Tourism industry

This topic will assist you in developing an understanding of the many aspects of the tourism industry, and an appreciation of its place in the global and local economies.

This topic is used in:

• International tourism

Learning support and certification

Formal learning support and certification services for this topic is offered by:

• Otago Polytechnic - Department of Business, Travel and Tourism

Introduction

Tourism is one of the world's fastest growing industries as well as the major source of foreign exchange earning and employment for many developing countries.

World tourism demand continues to exceed expectations, showing resilience against extraneous factors. According to the UNWTO World Tourism Barometer, released (November 2006):

• In the first eight months of 2006 international tourist arrivals totalled 578 million worldwide (+4.5%), up from 553 million in the same period of 2005, a year which saw an all-time record of 806 million people travelling internationally.
• Growth is expected to continue in 2007 at a pace of around 4% worldwide.

Tourism is vital to the well being of many countries, because of the income generated by the consumption of goods and services by tourists, the taxes levied on businesses in the tourism industry and the opportunity for employment and economic advancement by working in the industry.

What defines tourism

and what makes an ordinary travelling person a tourist.

The concept of tourism refers to the broad framework that identifies tourism’s essential characteristics and distinguishes tourism from similar, often related but different phenomena.

The two terms ‘travel’ and ‘tourism’ can be used in isolation or together to describe three concepts:

• The movement of people
• A sector of the economy or an industry
• A brad system of interacting relationships of people, their needs to travel outside their communities and services that attempt to respond to these needs by supplying products

The World Tourism Organisation (WTO) cited these definitions of tourism:

• International Tourism: Consists of inbound tourism, visits to a country by non-residents, and outbound tourism, residents of a country visiting another country
• Internal Tourism: Residents of a country visiting their own country
• Domestic Tourism: Internal tourism plus inbound tourism (the tourism market of accommodation facilities and attractions within a country)
• National Tourism: Internal tourism plus outbound tourism (the resident tourism market for travel agents and airlines.

According to the WTO tourists are people who: “travel to and stay in places outside their usual environment for not more then one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited.”

Devised by WTO was endorsed by the UN Statistical Commission in 1993 following an International Government Conference held in Ottawa, Canada in 1991.

Before people can experience tourism they usually need at least:

1. disposable income, ie. money to spend on non-essentials
2. leisure time
3. tourism infrastructure, such as transport and accommodation.
4. Other factors such as health and motivation to travel are also important.

As a service industry, tourism has numerous tangible and intangible elements. Major tangible elements include transportation, accommodation, and other components of the hospitality industry. Major intangible elements relate to the purpose or motivation for becoming a tourist, such as rest, relaxation, the opportunity to meet new people and experience other cultures, or simply to do something different and have an adventure.

Following is a range of aspects to do with the tourism industry. Please feel free to expand the dot points with your own findings and research.

Structure and organisation

The tourism industry is based on many different components and interrelated parts. For example, transport, accommodation, attractions, activities, marketing and government regulation. Many businesses span more than one sector and the impacts in one part of the tourism industry have significant implications for other sectors.

The tourism industry includes:

1. those sectors which enable the tourist to travel to and from the destination (for example travel agents, airlines, bus companies, tour operators and rental car companies)
2. those sectors which are part of the product at the destination (for example, accommodation, facilities and attractions)
3. the human component of tourism (the labour force)
4. public sector or government agencies, regional tourism organisations, professional associations and industry training organisations.

((Figure 4.1 P94 – Tourism,Principles,Practices, philosophies))

International Organisations

World Tourism Organisation (UNWTO) is the most widely recognised and the leading international organisation in travel and tourism today. It is a specialised agency of the United Nations. It serves as a global forum for tourism policy and a practical source of tourism know-how. With its headquarters in Madrid, Spain the World Tourism Organisation plays a central and decisive role in promoting development of responsible, sustainable and universally accessible tourism, with the aim of contributing to economic development, international understanding, peace prosperity and universal respect for and observance of human rights and fundamental freedoms.

Its membership includes 150 countries and territories and more than 450 affiliate members representing local governments, tourism associations, educational institutes and private sector companies including airlines, hotels and tour operators.

Other international organisations which have a specialised interest in tourism include the International Civil Aviation Organisation (ICAO) which is a specialised agency of the United Nations and is concerned with the development of international civil aviation, and the International Governmental Maritime Consultative Organisation (IMCO) which is an inter-governmental organisation concerned with co-operation in sea transport.

The International Air Transport Association (IATA) is an association of airlines concerned with the development and regulation of the air transportation industry. Members comprise of approximately 80% of the world’s international airlines.

Regional International Organisations

The Pacific Asia Travel Association (PATA) is a mix governmental and non-governmental bodies that work together to promote tourism industry professionalism in the Asia and Pacific area. http://www.pata.org

European Civil Aviation Conference (ECAC) this is a regional organisation with a specialised interest in tourism and concerned with co-operation and co-ordination of European airlines. www.ecac-ceac.org

European Travel Commission is a strategic alliance that provides for the collaboration between thirty-three European national tourism organisations. The commission’s goal is to attract customers from overseas markets to come to Europe through promotional campaigns and industry trade shows. www.visiteurope.com

National Organisations

Public (government) sector

The major reason for government involvement in tourism is concerned with the welfare of their citizens and the overall welfare of their country. This relates to areas such as economic stability, protection of natural resources, national security, public health and employment. Tourism activity can occur in all of these areas so governments are concerned that it is regulated and directed so as to ensure maximum benefit for the country and the negative factors are minimised.

The degree of control differs between each country. State organisations in the former Soviet Union had almost total control of tourism from the formation of policy to running the only travel agency Intourist, airline Aeroflot and over 40000 rooms.

The only remaining countries that still control tourism completely so that independent travel is impossible are North Korea and Turkmenistan.

In capitalist countries, the mix of private-sector and public-sector involvement in tourism varies considerably between each country.

The United Nations Conference on International Travel and Tourism in Rome in 1963 adopted the following resolution:

The Conference considers that it is incumbent on governments to stimulate and co-ordinate national tourist activities, convinced that this task can, in the main, be carried out through the medium of national tourist organisations.

Virtually every country in the world has a national body responsible for tourism. It can be part of a ministry, a constituted part of a government department or an organisation with a separate legal status. Generally the role of a NTO will be to ensure appropriate development and promotion of a nation as a tourism destination. This can include the following functions:

• research
• information and promotion within the country
• overseas promotional activities
• international relations
• development of tourist areas
• overall tourism policy and promotion
• in supporting key tourism interests in a time of financial crisis

A list of NTO’s worldwide is found at http://www.towd.com For example:

• Canadian Tourism Commission
• Tourism New Zealand
• Japan National Tourist Organisation

Local Authorities

Below the National Tourism Organisations, in most countries, there is often a complex web of organisations which complement the work of the NTO at the regional and local level. For example, Tourism Dunedin is a local tourist information service under the national tourism office for New Zealand. Their activities are often a scaled-down version of the NTO’s work at a regional level; they often implement national policy and pursue integrated activities with the NTO providing guidance.

((Presentation ‘Key elements of Tourism’ to be inserted here))

Direct elements of the Tourism Industry - Those areas of the tourism industry which come into direct contact with tourists

• Sales
• Accommodation
• Transport
• Activities
• Attractions
• Ancillary Services

Indirect elements of the Tourism Industry - Often called support sectors. Those parts of the tourism industry which may not come into direct contact with tourists, but without the rest of the industry could not function.

• Infrastructure
• Roads
• Airports
• Communications
• Public Toilets
• Signs
• Manufacturing
• Building Industry
• Electricity
• Water supply
• Sewerage and waste disposal

Brief History of Travel & Tourism Through The Ages

http://farm1.static.flickr.com/31/54114053_f4951e0457_m.jpg

Travel tourist - Originating from the French word “travail’ meaning to labour or toil. Tourist is today defined as a person travelling for pleasure

The Earliest Travel & Tourism

• Business travel (3000BC)
• Trading
• Matters of state
• Military purposes
• Leisure
• Egyptians visiting pyramids (1500BC)
• Religion - Pilgrimage (4th C AD) and other sacred ceremonies
• Pleasure
• Curiosity
• Sport - Olympic Games (776BC), Polo & jousting (Persia), Swimming (Egypt), Winter sports holiday (1901)

Spa (Bath)

File:Wallyg-300681098.jpg

A photo of the Great Bath, taken by Wallyg while visiting the Roman Baths Museum in Somerset, United Kingdom

• First used by the Romans
• Later developed 1897 to The Terrace (at left)
• Fashionable venue for social and rehabilitating needs
• The Grand Tour
• Renaissance – rebirth
• Travel for educational experience
• Early 17th century

19th Century

• Technological developments
• Railways
• Steamships
• Capital investment
• Hotel chains and corporations
• Casinos – escape from middle class morality of Victorian England
• Outdoor Activities
• Beach bathing
• Sun tan status symbol of health and wealth
• Mobile holidays
• Bicycle
• Motoring
• Walking

Early 20th Century

• Airline Industry
• Shipping lines
• Private Motor Cars

1960’s, 1970’s, 1980’s

• Changing social patterns
• Annual holiday taking
• Special interest holidays
• Increasing prosperity and declining inflation
• Domestic and international travel

1990’s

• Failing economy
• Decline in airline travel
• Unrest
• Wars (Gulf War 1991)
• Civil unrest (Fiji)
• Terrorism

New Millennium

• Promise of golden era for tourism
• Terrorism
• September 11, 2001
• War
• Invasion of Iraq (2003)

2007 onwards - Issues - Negatives

• Global warming
• World resources - Oil
• War\coups
• Terrorism

2007 onwards - Issues positive

• Increased prosperity
• Emerging Industrial Nations – China
• Developments in Transportation
• Hypersonic jet
• Cruise Ships\Communities
• Development in Technology
• Virtual tourism

Impacts of Tourism

Economic

• International tourism receipts regarded as exports
• Expenditure by nationals abroad as imports
• Tourism leading source of foreign exchange for 38% of countries worldwide
• Contributes approximately 4.2% to the world’s Gross Domestic Product
• 78 million jobs within the industry-3.1% of total world employment
• Tourism can increase government revenue through payment of taxes by tourists eg departure tax, GST, visa fees
• Multiplier effect – more tourist dollar is spent and respent within the economy less the amount leaving in form of leakage

Economic - summary

• Major economic impact on developing countries/underdeveloped regions within country
• Foreign exchange earnings critically important to developing nations-require high level imports
• Increase standard of living creating employment and provision of facilities

Positive Environmental Impacts

• Formation parks and reserves to protect environmental sites
• Educate local community – plaques,leaflets
• Increased environmental awareness-physical improvement to landscape
• Protection of wildlife funded through tourism ventures

Negative Environmental Impacts

• Noise pollution
• Water pollution
• Air pollution
• Visual pollution
• Erosion
• Overcrowding
• Damaging wildlife

Positive Social Impacts Tourism is often regarded by the host community as an economic necessity but a social evil (Parkinson 1970)

• Employment
• Wealth creation
• Foreign investment
• Competition
• Improvement in lifestyles

Negative Social Impacts

• Inflation
• Overdependence on tourism
• Competition
• Undesirable activities
• Consumptive behaviour

Support Sectors

Public Sector - Those areas of the tourism industry which are directly controlled or organised by central or local government

Private Sector - Those areas of the tourism industry which are directly controlled or organised by individuals or privately owned companies.

Sectorial Organisations Based on the interests of a particular sector of the industry

• IATA – International Air Transport Association
• ABTA – Association of British Travel Agents
• TAANZ – Travel Agents Association of NZ
• HANZ – Hospitality Association of NZ
• BHA – British Hospitality Association

Destination Organisations - Concerned with developing and/or marketing a specific destination

• PATA – Pacific Asia Travel Association
• ETC – European Travel Commission
• Dunedin Host
• Tourism Dunedin
• British Tourist Authority
• Tourism New Zealand

Tourism Organisations - Concerned with Tourism Activity as a whole, by collecting statistics and research into the tourism phenomenon

• UN WTO – World Tourism Organisation
• WTTC – World Travel and Tourism Council
• British Industries Tourism Advisory Group

Attractions and Activities

Theme and Amusement Parks

• Bakken, Copenhagen opened in 1583 oldest amusement park
• Blackpool Pleasure Beach opened in 1896 most visited tourist site in England
• Walt Disney Corporation’s Disneyland in Anaheim and Disneyworld in Orlando attracts between 13-15 million visitors annually

Historical Buildings

• Stately homes in England number over 6000 and over 800 are open to visitors
• In Dunedin, Olveston offers tours and Larnach Castle can offer tours, accommodation, events, garden walks and restaurant facilities

Wildlife Attractions

• Establishment of zoos goes back to the 18th century – now 900 established zoos
• Safari parks increasingly popular – see animals in wild eg Kruger National Park
• Sealife centres attract crowds although dolphin shows are losing favour

Museums and Art Galleries

• Attracting new tourists through interactive displays and special events e.g. Te Papa holding Lord of the Rings exhibition
• Special exhibitions at Art Galleries

Natural Attractions

• New Zealand’s world renowned e.g. Milford Sound, geothermal activity Rotorua
• National parks world wide – related activities e.g. Yellowstone

Shopping

• Important part of tourism
• Tourist cities London, Paris, Rome, New York popular for quality
• Large malls being developed to attract visitors
• Souvenir shopping

Water Transport

Main categories

• Ocean line voyage shipping
• cruise shipping
• ferries
• inland waterway transportation

Ocean liners

• Port to port basis
• Decline because of reduced cost air transportation and oil increase
• Scheduled sailings limited

Cruising

• 250 cruise ships operate worldwide carrying 10 million passengers
• More than half cruises operate out of US ports and Americans represent 4 out of 5 cruise passengers
• Niche markets for vessels carrying 100-200 passengers
• Fly-cruises – combination of flights to and from port of departure
• Stereotypical cruise passenger – conservative and elderly sitting in deck chairs or hyper-active extrovert middle- aged looking for non-stop entertainment
• Security
• All inclusive
• Social interaction

Ferries

• Short distance – water-borne transport
• Within cities or between countries
• One of the busiest waterways in the world – English Channel

Inland waterways

• Excursion boats such as paddle steamers operate on the Murray River in Australia
• Barge holidays on canals are very popular
• Venice and Bangkok are examples of cities where water transport is both an attraction, and a means of sightseeing

Accommodation

Categories

• Hotels and luxury lodges
• Caravans and campervans
• Motels, Serviced Apartments, timeshares
• Backpacker and youth hostel
• Bed and breakfast
• Homestays, farmstays

Hotels

• Globally sector dominated by small family-owned businesses
• Can be licensed or unlicensed
• Corporate hotel chains
• Resort complexes
• Unique hotels

Caravans and campervans

• Motorhome holidays increasing in popularity both privately owned and leased
• Four million holidaymakers a year are attracted to holiday parks in the UK

Motels, Timeshares, Serviced Apartments

• In New Zealand, motels are self catering apartments. In the rest of the world, they are without cooking facilities.
• Apartments are small flats with full facilities – they can be serviced or non serviced
• Timeshares are apartments owned by individuals but leased out by managers

Backpacker and youth hostel

• Major youth hostel operator worldwide is the YHA
• Numerous privately owned hostels offer similar facilites
• Growing market with independent travellers of all ages

Bed and breakfast, Homestays, farmstays

• Wide variety of style and quality
• Increasing desire by many tourists to ‘meet the people’
• Approximately 11,500 B & B’s in the United Kingdom

Review

Which one of the following describes the desire to leave familiar things and seek new experiences?

Wampam No

Wanderoo No

Wanderlust Correct

Wanderings No

The main attraction of Grand Canyon National Park in the USA is its:

Man-made features No

Natural features Correct

Watersports facilities No

Wintersports facilities No

Activities such as bungee jumping and white water rafting are most likely to be included in which one of the following types of holiday?

Adventure Correct

Expedition No

Exploration No

Safari No

During January to March the Alps in Europe mainly attract people on:

Walking holidays No

Skiing holidays Correct

Sun holidays No

Adventure holidays No

The main reason why tourists go on safari is to:

Experience the great outdoors No

Prevent animals being put in zoos No

See animals in their natural environment Correct

See the countryside in the safety of a group No

The main purpose of national tourist boards is to:

Co-ordinate the work of local tourist information centres No

Promote the country to potential visitors overseas Correct

Provide information to visitors arriving in the country No

Supply tour operators with photographs for their brochures No

Which two of the following would be offered by an in-bound tour operator?

Pre booked accommodation Correct

Transfers Correct

Currency exchange No

Return air tickets No

The term ‘package holiday’ usually refers to holidays which include:

Car hire and meal vouchers No

Entrance fees and souvenirs No

Transport and accommodation Correct

Travel insurance and spending money No

Which one of the following is the term used for holidays when passengers travel by air to the port of embarkation?

Flycruise Correct

Port to port No

Liner service No

Traditional cruise No

The positive economic impact of tourism is likely to be experienced by the national population if income from tourism is:

Distributed within the local economy Correct

Exported to overseas companies No

Reinvested within parent organisations No

Stockpiled within the tourism industry No

‘All inclusive” resort hotels are becoming popular. The main disadvantage to the local area of such developments is

An increase in electricity consumption No

Depletion of wildlife and plant life No

Greater pressure on the emergency services No

Loss of employment in supporting industries (ie restaurants) Correct

Which one of the following best describes the term ‘economical leakage’?

Details of new promotional activities which are given to competitors No

Serious water problems affecting the health of tourists to a region No

The profits from tourism being drained away to benefit other countries Correct

Visitors being attracted to other resorts in the region No

Hotel grading schemes are most likely to give potential visitors an indication of the hotel’s

Facilities Correct

Size No

Price Correct

Location No

One effect of the US dollar weakening against the GB pound is that

British holidaymakers will find the costs in the USA are lower Correct

British holidaymakers will find the costs in the USA are higher’ No

Transatlantic airfares will go up No

Transatlantic airfares will go down No

Which one of the following effects will an increase in visitor numbers have in the UK?

The UK’s balance of payment will improve Correct

The UK’s balance of payment will worsen No

More UK residents will travel overseas Correct

Fewer UK residents will travel overseas No

References

http://www.biodiv.org/programmes/socio-eco/tourism http://www.world-tourism.org/newsroom/Releases/2006/november http://en.wikipedia.org/wiki/Tourism Page, Stephen J and Connell Joanne, (2006) Tourism a modern synthesis, second edition, Thomson Learning, London, UK.