globalEDGE International Business Blog

In light of the current state of the global economy, people will want to cut down on expenses, while still enjoying the leisure and relaxation afforded by tourism. Here are the Top 10 2009 Tourism Trends, which include several options for the cash-strapped consumer:

1. Domestic tourism—This year will see a boost in domestic tourism as tourists will go around their own countries more than flying to another. This is one of the cheapest ways to travel and may help balance out the anticipated lack in foreign tourists.
2. Travel to nearby countries—As many people still want to explore countries other than their own, the next best thing is going to neighboring countries where they’re not expected to spend as much as a jet-setting spree. Europeans may go backpacking across their continent; Americans may go either north or south; and Asians may island-hop around the tropics.
3. Faith tourism—Sabbaticals, pilgrimage, and other religious tourism subcategories are among the top travel choices this year, along with the usual religious sites. Also popular are personal spiritual vacations where the travelers meditate and “self-help.”
4. Cultural/historical tours—People, especially those tracing their roots, will also be drawn to cultural and historical tours. Parents will be keen to take their kids on these types of tours, supposedly in hopes to keep them connected with their heritage. These historical attractions are often free of charge, as well.
5. Camping—A very cheap vacation option is more preferred this year to replace five-star resorts. This comes in the form of camping.
6. Nature trips—More folk will be interested to go on nature trips and explore the great outdoors and may even take part in adventurous activities like white water rafting and rappelling. The primary purposes of this kind of tourism are education, nature-appreciation, and retreat from city life.
7. Eco-friendly hotels—Environmental issues awareness comes into play even more as educated tourists choose accommodations that are certified green. Environmental responsibility is now a selling point and hospitality associations worldwide are advocating the implementation of eco-friendliness in hotels, inns, and resorts.
8. Visitation—More people will also choose to travel to countries where they have relatives in and most likely stay with them, instead of going to hotels. This will be less luxurious but is a sensible alternative for the budget-conscious.
9. Virtual tourism—The Internet will play a major role in people’s itineraries. Three-dimensional imaging of places will be important in planning one’s trip. Also, travelers are seeking economical alternatives, deals, and packages—thus, the emergence of more travel agency Web sites.
10. Asia—Because they’re relatively cheaper than Europe or the Americas, Asian countries will be popular tourist destinations in 2009. Other countries that are of interest include Turkey, Ireland, Syria, Egypt, and New Zealand.

There’s been a lot of talk lately about a new global reserve currency, or how the Yuan might overtake the dollar. One little-examined currency issue, however, is the role of virtual currency. Massively Multiplayer Online Role-Playing-Games such as World of Warcraft, which has nearly 11 million players worldwide, use an in-game currency system, where players can buy items, creatures, or even services from other players with virtual “gold”. In China, where a huge online gaming community exists, government officials are worried that, to some degree, virtual currency could replace the actual currency, and might even have a significant impact on the country’s economic system.

The problem is that virtual currency cannot be easily monitored by governments. The volatile online economies are governed by supply-and-demand to a much lesser extent than their real-life counterparts. Hyperinflation runs rampant, and competition is hardly a limiting factor. Thus, the savvy virtual businessperson can manipulate the virtual market with much less difficulty than they could on, say, Wall Street.

It’s not a real threat, though, because nobody would ever want to use real money to buy virtual gold, right? Wrong. In fact, some small companies in China have created “virtual sweatshops,” where they are paid minimal wages to play online games like World of Warcraft with the aim of amassing as much gold as possible. These companies then facilitate the sale of the virtual gold/goods/equipment to buyers across the internet in places like the U.S.and Europe. In order to restrict these types of sales, the government would need to restrict the internet itself, but even then, regulation is still difficult, as China has near 300 million internet users.

So will virtual currency overtake actual currency? Unlikely. Yet, one cannot discount the little-explored business opportunities offered in the online gaming community, especially ones where the number of players eclipses that of a small country. Expect to see the emergence of entrepreneurial businesses that deal with the creation of, trading of, and buying of virtual currency.

One month ago we posted about the Top 10 Global Small Busines Trends for 2009. Apparently this is still a hot topic, and Emergent Research has compiled a more pointed list of 10 expected trends for small businesses in 2009:

Economic Trends

1. The recession drives small business innovation.

2. Government plays an increasing role in the economy.

3. Global infrastructure and stimulus spending.

4. The number of small businesses will increase in 2009.

5. Small business globalization will temporarily slow.

Flying has been the dominant travel option in our lifetimes, mostly due to its speed. However, disgruntled travelers have often been fed up with the long lines, invasive security checks and the occaisonal canceled flight. In light of these issues, another mode of traveling has been attracting customers the past few months – luxury trains.

“Less is more.” It is a phrase often used and many tend not to believe it – especially when it comes to business. This lesson especially applies to small business entrepreneurs would be worried that they do not have enough capital to achieve their goals. When a company is operating on a tight budget, it will tend to have a lean cost structure and accordingly perform much better than a company that has received a lot of cash from venture capital firms.

You may be surprised to learn that Brazil produced half of the world's coffee at one point. Although the nation doesn't enjoy this kind of pick-me-up dominance anymore, they still are the key player in the global market, and produce one-third of world's coffee beans. Despite the shear quantity of coffee coming out of Brazil, most consumers are more familiar with  Columbian beans, and Asian and African beans seem to be gaining in popularity. It's said that because of Brazil's large-scale production, the quality suffers. Poor quality controls and an economic crisis in the 80's and 90's led to less local consumption in Brazil. Their best beans were exported while they had the leftovers. I can see why coffee didn't appeal very much to Brazilians. In response to this unfavorable trend, the Brazilian Association of the Coffee Industry initiated a "coffee purity" program that was so succesful that it was expanded to 60 countries. That led to a more than doubling of sales in Brazil. Brazilians now consume more than any other nation with the exception of the United States.

One of the more interesting subplots of the environmental movement that has popped up lately is the potential of lithium-ion batteries to replace gasoline in automobiles. Lithium-ion batteries are lighter, more energy dense, and lower-maintenance than some of their more conventional counterparts.

Car companies both large and small have been making major bets on the technology. GM’s long-awaited Chevrolet Volt will run primarily on a lithium-ion battery, as will the next-generation Toyota Prius, and a whole host of other cars from the likes of Nissan, Ford, Chrysler, and Volkswagen. A swath of startups including Tesla Motors, and China's BYD Auto are also bringing the technology to market. LG Chem (a major producer of lithium-ion batteries) predicted that 4.6 million electric vehicles would be on the road as soon as 2015. With expectations and capital commitments so high, one has to ask the question - what will happen if the technology is actually as successful as these companies seem to think it will be? One consequence would be a massive supply chain shift that would divert some attention away from oil and towards lithium.
 
And this is where Bolivia enters the picture.

Bolivia currently has about 5.4 million tons of lithium metal, which accounts for about 50% of the world’s total reserves. Companies such as South Korea’s LG Chem have already approached the Bolivian government to gain access. The looming fear is that the country’s socialist-leaning President Evo Morales could assert control over the operations after production has begun. This turn of events would echo a 2006 incident in which Bolivia nationalized the oil industry. Foreign companies including BP were forced to turn their operations over to the government.

Most analysts (and for that matter car companies) believe that, in the long term, the transportation manufacturing industry must find an alternative means of fueling their cars. If lithium-ion batteries can fill that role, Bolivia will be thrust into the center of the global energy spotlight.

A proposed 12-mile bridge across the Baltic Sea connecting Germany and Denmark, if approved, will be finished by 2018. The bridge will directly connect the two countries and replace the Scandlines ferries which operate on the route now.

There is a plethora of pros and cons to this proposal. The bridge will make travel not only easier between the two countries but also shorter. It will eliminate waiting at the dock and shorten the drive between Copenhagen and Hamburg. Consequently, business between the two countries will also be conducted more efficiently. Furthermore, an increase in tourists crossing the border between the two countries would likely result, and the tourism industry would stand to profit from this new option in travel.

We see them everywhere at Easter. Sometimes big, sometimes small, but always looking similar and always looking delicious. I'm talking about the famous chocolate bunny. I don't know about you, but I've had about 5 different kinds, and all had a similar shape. However, a few days ago in Luxembourg, the European Union's highest court ruled on a case about trademarking the shape of this tasty treat.

Back in 2001, Chocoladefabriken Lindt & Sprüngli AG (whew! that's a mouthful) got a European trademark for it's gold-foil bunny, ribbon, bell, and all. Ever since that time, Lindt has been looking for rabbits that try to steal the design. 5 years ago, Lindt sued Franz Hauswirth GmbH, for trademark violation. I thought it was kind of ridiculous. First off, the bunny has no bell, has a different color, and is shaped slightly differently, and rightly so, they countersued. They claimed Lindt acted in "bad faith" by registering a trademark for something that has been in existance for a very long time. There are also manufacturing limitations on the shapes. A few years ago, Lindt won an injunction, forcing Hauswirth to stop production, and give away 300,000 of the stock to charity.  

The Hauswirth lawyer, Mr. Schmidt had this to say, "It's a question of morality and ethics. We have been producing this kind of rabbit for 40 years. What's more, we've got several rabbits, but this is one of the most attractive ones to children. More so than in my opinion, the rather snobbish Lindt rabbit." The whole issue of three-dimensional trademarks is unclear. They say the product must be distinctive, but it cannot be functional. Not only is that part of the case complicated, but so is the "bad faith" part. That is what the Austrian Supreme Court has asked the European Court of Justice in Luxembourg to rule on. You can read about what the court decided here.

The U.S. Patent and Trademark Office has already given Apple Inc. a trademark for the three-dimensional shape of its iPod. But overall the U.S. and the European Union have been reluctant to give trademarks to shapes that are three-dimensional. You may ask why nontraditional trademarks such as these are even important. Market research shows us that the trademarks can promote brand recall and increase sales.

For any company, getting a trademark like this can be highly valuable. Lindt has already shored up its franchise, and looks to be a tough competitor for years to come. It's important to understand that trademarks applied for in a certain region only apply to that region, so this trademark in the European Union would not apply to the U.S. In this ever expanding global economy, preserving and protecting intellectual property is becoming very important. Trademarks last forever, so as 3-D movies become more popular, 3-D trademarks could be a smart business initiative for the future.

Richard Gelfond, co-CEO of IMAX, talks about the company's decision to sign a contract with a company in China due to the potential the country holds.

This deal is expected to increase profits for IMAX and the film industry in general. Furthermore, it will be helpful to the Chinese economy as it introduces a new product to the market with the potential for success.