PEST Model Analyzes External Factors Affecting the Competitiveness of Tourist Destination



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PEST Model Analyzes External Factors Affecting the Competitiveness of Tourist Destination

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Figure 2.2 PEST model analyzes external factors affecting the competitiveness of tourist destinations

Researching external factors affecting destination competitiveness to propose solutions to adapt to the unpredictable fluctuations of external factors. The impact of this group of factors is reflected in different levels of impact and directions of impact. Within the scope of the thesis, the author focuses on revealing the impact of the following factors:

Economic factors: economic development, economic growth rate, GDP growth rate, GNP, inflation rate, unemployment rate... have negative or positive effects on the supply and demand of tourist destinations. If the economy develops, the average income of the people increases, which will positively affect the development of tourist destinations. When customers have high spending ability, the standard of living increases, so the demand also increases. Tourists will want to visit, experience and enjoy better service quality of tourist destinations. And any destination that satisfies the increasingly diverse and rich needs and desires will improve its competitiveness, attracting tourists to its destination.

Political and legal factors: countries with stable politics will attract investors to their tourist destinations, improve the quality of services, infrastructure, human resources, etc., thereby improving the competitiveness of destinations. Stable politics and effective diplomacy will create an important stepping stone for the formation of an attractive tourism environment, attracting domestic and foreign tourists. In addition, countries with a system of public, transparent and simple policies will ensure a stable long-term investment environment, supporting tourist destinations to increase their competitiveness. Moreover, the synchronization of the economic development policy system for the tourism industry will create an important legal foundation for solid destination development investment, bringing long-term benefits to investors and local people, thereby promoting relevant parties to contribute human and financial resources to the increasingly developed tourist destination.

Social factors: culture, customs, living standards, educational level, lifestyle... of the people are greatly influencing the behavior of choosing tourist destinations. Carefully studying the level of influence of social factors helps destinations improve products, services, information, and facilities to meet the needs of tourists, thereby enhancing the competitiveness of destinations compared to other destinations, increasing customer satisfaction and maintaining the attractive image of destinations for tourists.

Technological factors: information and connection with tourists play an important role for destinations in attracting tourists to the destination. Through the application of technological achievements, destinations can provide information quickly to domestic and international tourists, promote the image of the destination's differences to increase competitiveness compared to other destinations.

In addition to the elements of the PEST model, it is necessary to pay attention to other factors such as natural factors, tourists, current competitive destinations, potential competitive destinations and substitute products.

Natural factors: this is a factor that has a strong influence on the competitiveness of destinations, creating differences between destinations, creating attractiveness and attracting tourists. With advantages in geographical location, land, climate, forest resources, caves

Natural resources, hot springs, natural systems of trees, wildlife, etc., contribute significantly to the formation and enhancement of the competitiveness of destinations for strong tourism development. However, if natural factors are not exploited properly, they will lead to land and water pollution, climate change, imbalance of natural resources, etc., negatively affecting the attractiveness and core value of tourism products associated with nature. With modern life and a fast pace of life, tourists choosing destinations close to nature with fresh air is a new trend. Therefore, natural factors will strongly affect the competitiveness of tourist destinations in the coming years.

Tourists: Tourists' choice of destination will directly affect the success of the tourist destination in competition with other destinations. Therefore, researching tourist needs, building strategies to attract tourists, increasing competitiveness with other destinations is always a great pressure for tourist destinations. Therefore, to improve competitiveness, destinations must satisfy tourists' requirements on products and services, prices, distribution systems, promotion mix and importantly, must create satisfaction through experiences for tourists.

Current competitive destinations: To improve the competitiveness of a destination, it is necessary to understand current competitive destinations, analyze the strengths, weaknesses and development strategies of those destinations. In particular, it is necessary to grasp the highlights that create long-term competitive advantages of current competitive destinations. Because tourists are people who can choose this or that tourist destination. Therefore, current competitive destinations are always a threat to the position of the destination in the tourism market. Analyzing the impact of current tourist destinations will help decode the competition of competitors in terms of tourism products, prices, distribution and promotional activities. Therefore, tourist destinations need to research and analyze current tourist destinations to proactively respond to the competition of tourist destinations in order to maintain their competitive position in the market.

Potential competitive destinations and alternative tourism products: this factor is a major risk and threat to the competitiveness of tourist destinations. Tourist destinations

Potential tourism destinations can be newly discovered, emerging tourist destinations with quality and attractive tourism products. These destinations will increasingly increase competitive pressure on tourist destinations.

2.3.2.2. Local internal factors

Advantages of natural resources, tourism resources

The development of the tourism industry is closely linked to the exploitation of natural resources, historical and cultural relics. For a locality to attract investment capital for socio-economic development, especially investment capital for tourism development, the most important factor to consider is the advantages of natural resources, geographical location, terrain factors, climate conditions and tourism development potential. This is a necessary condition to attract investment capital for local tourism development projects. Localities with many conditions for tourism resources will have many favorable conditions to attract investment capital in the tourism industry. Tourism resources are all factors that can stimulate tourists' motivation and are used by the tourism industry to create economic and social benefits, all of which are called tourism resources. Tourism resources with the potential to attract investment capital for tourism development include:

- Natural resources:

+ Terrain: has diverse terrain with natural features such as: sea, forest, river, lake, mountain,... with beautiful landscapes, suitable for tourism.

+ Climate: the climate is not too cold, too hot, too dry, too humid and windy.

+ Plants and animals: rich and precious flora and fauna,...

+ Water resources: ponds, lakes, rivers, streams, lagoons, ... regulate the air, develop transportation and create conditions for the development of many separate types of tourism such as: medical tourism (with mineral water, mud, ...).

+ Geographical location: facilitates tourism development, tourist spots are located in tourism development areas, the distance from tourist spots to tourist sources is not too far.

- Human resources:

+ Historical values ​​include 2 groups: the group of historical values ​​associated with the common culture of mankind and the group of special historical values.

+ Cultural values, unique architectural works.

+ Traditional customs and practices, economic achievements of the country or region.

Local Infrastructure

Infrastructure development is a leading material condition for investors to invest capital. Infrastructure includes transportation networks, communication networks, energy supply systems, water supply and drainage systems, public works serving production and business such as bus stations, airports, seaports, etc. Good infrastructure is one of the important factors that help investors reduce indirect costs in production and business and be able to implement investment activities. The reality of attraction in localities shows that capital flows only flow to places with developed infrastructure, capable of serving the production and business activities of investors. The transportation network also contributes an important part to attracting capital, is the basis for transporting passengers, raw materials for business, consuming products and most importantly, traffic hubs adjacent to the world such as seaports, airports, etc. Important traffic routes also bridge the economic development exchange between localities. A modern and multimodal transportation network will help investors reduce unnecessary transportation costs.

The communication system is an important factor in the context of the current information explosion, when information about all market fluctuations everywhere is continuously transmitted around the world. Delays in communication will cause loss of business opportunities. An attractive investment environment in the eyes of investors must have a large communication system and low fees. In addition, the system of service industries such as: banking and finance, post and telecommunications, consulting or energy and clean water supply... ensures large-scale and continuous business. If these services do not meet the needs, it will cause many obstacles for investors.

Quality of local human resources

One of the important social factors in attracting investment capital to the locality is the quality of human resources and labor prices. This is one of the

These are essential factors for investors to make business plans. An investor who wants to develop a tourism project, in terms of human resources, will choose an area that can meet both the quantity and quality of labor. In addition, labor prices are one of the evaluation criteria of investors. Labor quality is a competitive advantage for investors in labor-intensive fields. In addition, cultural factors also affect labor factors such as diligence, discipline, and awareness in work.

Therefore, the labor factor is one of the conditions that affect investors when doing business. However, to have a good labor force depends on the education system, training, vocational training quality...

Administrative procedures and decision-making processes related to investment procedures

Administrative procedures are a very important factor contributing to the success of capital attraction. The simpler, more compact and transparent the administrative procedures are, the greater the attraction of the investment environment to investors. Administrative procedures affect all investment activities. If administrative procedures are not closely monitored, they can easily create harassment and negativity, thereby increasing business costs and losing the trust of investors. In addition to the general implementation process, the way administrative procedures are implemented in each locality is different, so there are places where investors encounter many difficulties in applying for investment licenses, business registration, etc. Simplifying administrative procedures will create favorable conditions for investors in the process of registering and implementing investment projects as well as reducing costs in both material and time, creating trust among investors.

Capacity and perspective on tourism destination development of leaders, activities of local promotion agencies

The thinking and attitude of local leaders are also factors that strongly influence the attraction of investment capital for development in that locality. If local leaders see the role of investment capital, they will have priorities, create a favorable environment, and be proactive in finding suitable investment partners to attract capital sources to their locality. Effective operation of agencies

Investment promotion in localities also plays a very important role and is one of the important factors to attract investment capital for socio-economic development in general and tourism development in particular.

Efficiency of implemented investment projects

Profit is often considered the ultimate motivation and goal of investors. Therefore, if investment attraction projects have been implemented with high profit margins, it will encourage and strengthen the confidence of investors to continue investing in expanding production, and at the same time, they are also bridges to convince other investors to confidently invest. This will help the investment capital continue to increase. On the contrary, if the projects being implemented are not effective and often lose money, it will discourage investors, because they think that the investment environment is risky.

Within the scope of the thesis, the author studies the factors affecting the competitiveness of tourist destinations through the "Diamond" model of M. Porter in the work "National Competitive Advantage" (1990), which has raised the factors that determine the competitiveness of a country in international trade. Thus, according to his theory, the competitiveness of tourist destinations today depends on the creativity and dynamism of the industry and that country. When the competitive world becomes globalized, the competitive foundation will shift from absolute advantages or comparative advantages given by nature to national competitive advantages created and maintained in the long-term competitive position of enterprises in the international market. The four groups of factors in M. Porter's diamond model develop in an interdependent relationship and have an important impact on the formation and maintenance of tourist destination competitiveness.

(1) Availability in both quantity and quality of resources necessary for the development of a competitive tourism destination

(2) Clear information about business opportunities that tourist destinations can access

(3) The strategies of tourist destinations in exploiting and using resource factors; the viewpoints and business philosophies of owners, administrators, and employees in tourist destinations, etc. can all "resonate" to promote tourist destinations.

Tourism in an industry must operate more efficiently, improve the quality of tourism products, innovate faster and better meet customer needs.

(4) The role of the State is to use macro policies to impact all four "sides" of the "diamond" so that they develop proportionally, synchronously and support each other, creating favorable conditions for domestic enterprises to improve their competitiveness in the international market.

Factors affecting destination competitiveness in previous studies can be summarized in Table 2.1.

Table 2.1 Factors affecting the competitiveness of tourist destinations


Factors constituting the competitiveness of tourist destinations

References


Tourism resources

Crouch and Ritchie (1999); Dywer & Kim (2003); WEF (2007); Thai Thi Kim Oanh

(2015); Le Thi Ngoc Anh (2017)


Tourism human resources

Dywer & Kim (2003); M.Porter (2008); Thai Thi Kim Oanh (2015); Le Thi Ngoc

English (2017)

Tourism infrastructure and technical facilities

Crouch and Ritchie (1999); Dywer & Kim (2003); Thai Thi Kim Oanh (2015); Le Thi

Ngoc Anh (2017)

Travel business

Nguyen Thi Quynh Huong (2018)


Tourism destination management

Crouch and Ritchie (1999); Dywer & Kim (2003); Thai Thi Kim Oanh (2015); Le Thi

Ngoc Anh (2017)

Tourist destination images

Zemer & Golden (1998); Thai Thi Kim

Oanh (2015); Le Thi Ngoc Anh (2017)

Tourism products

Nguyen Thi Quynh Huong (2018)

Accessibility to tourist destinations

Crouch and Ritchie (1999)

Price

Nguyen Thi Quynh Huong (2018)


Community participation

Crouch and Ritchie (1999); Dywer & Kim

(2003); Thai Thi Kim Oanh (2015); Le Thi Ngoc Anh (2017)

(Source: author's synthesis)

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