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:
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:
- disposable income, ie. money to spend on non-essentials
- leisure time
- tourism infrastructure, such as transport and accommodation.
- 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:
- 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)
- those sectors which are part of the product at the destination (for example, accommodation, facilities and attractions)
- the human component of tourism (the labour force)
- 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:
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
Direct Elements
Transportation
Water Transportation
http://flickr.com/photos/nmarshall42/86195286/ Transport by water can be an attraction in itself whether you are travelling on a cruise ship in the Mediterranean or on a ferry between Wellington and Picton. Travelling by water has never been more popular as tourists seek to avoid the frustrations of air travel with its airport delays, congestion and the lack of comfort in the air (unless travelling first class!). Cruising has undergone a revival and all forms of recreational pursuits on the water including yachting and jet boating have expanded to fulfil this demand.
Air
Advances in aviation technology has meant that travel by air is now relatively safe, economical, quick and reasonably comfortable. The development of the jet airliner after World War 11 to the first jumbo jet, the Boeing 747 in 1970 led to rapid falls in seat cost per passenger kilometre. The advances have continued with the Airbus ‘super jumbo’ A380 a double-decker aircraft seating between 550-800 passengers enters service in late 2007 with Singapore Airlines operating the aircraft on the London -Singapore – Sydney route.
http://en.wikipedia.org/wiki/Image:Airbus_A380_cross_section.svg A380 cabin cross section showing economy class seating
There are two basic type of air transport operation:
- Scheduled services
- Charter services
Scheduled services operate on defined routes, domestic or international, for which licences have been granted by the governments concerned. The airline must operate on the basis of their timetable regardless of the passenger loading.
Fully state owned carriers such as Singapore Airlines and the Emirates are known as the national flag-carriers. Even when the carrier has been privatised as in the case of British Airways the airline is still seen as the national flag carrier. Air New Zealand was privatised but after the 9/11 disaster 80 per cent of the carrier was returned into public ownership. Air transport is very important to the national economy of a country and a government will often assist in times of crisis.
Low Cost Airlines LCA’s or LCLF (low cost low fare) carriers has been a major development in scheduled services in the last decade. A total of 80 million people travelled on European no-frills carriers in 2004 up from 47 million in 2003. These airlines create a cost-competitive advantage by using some of the following means:
- operate from secondary airports which have lower landing fees and are less congested allowing quicker turnarounds and more flights
- operate on high density, short-haul routes with one class of seating
- charge passengers for food, drink and entertainment
- sell only via the Internet
- tickets are inflexible – generally non-refundable
- not operating frequent flying programmes and keeping airport passenger services to a minimum
Charter services do not operate according to a published timetable and so do not have to operate with uneconomical loadings. They are not advertised or promoted by the airlines themselves as they are usually charted by intermediaries – usually tour operators. Many charter flights are sold as part of a package holiday in which the price paid includes flights, accommodation and other services.. Such packages are frequently cheaper than regular schedule airline fares. Furthermore charter airlines frequently operate on routes, or to airports, where there is no scheduled service. Much of the traffic through small and medium sized airports in the United Kingdom consists of charter flights, and the survival of these airports often depends on the airline landing fees they get from the charter companies.
Although charter airlines typically carry passengers who have booked individually or as small groups to beach resorts, historic towns, or cities where a cruise ship is awaiting them, sometimes an aircraft will be chartered by a single group such as members of a company, a sports team, or to travel to a major event.
Many airlines operating regular scheduled services (i.e., for which tickets are sold directly to passengers) have set up charter divisions, though these have not always proved competitive with the specialist charter . In New Zealand, Freedom Air was established by the Mount Cook Group in response to the competition from the charter airline, Kiwi Air (went in to voluntary liquidation in 1996). Freedom Air now operates as a scheduled airline from smaller airports eg Dunedin and Hamilton. The economics of charter flights demand that the flights should operate on the basis of near 100% seat occupancy.
Land Transportation
Land transportation can be used for travelling from home to a host destination, within the destination and between the host destinations.
Motorcars Tourists can use privately owned cars for independent and flexible holidays both domestic and international. They can take day excursions or longer trips. The explosion in private car ownership has changed the tourism industry by establishing a need for motels, bed and breakfasts, home stays, roadside cafes and car ferry services particularly in Europe.
The car rental business is divided into two categories, the large international companies e.g. Hertz, Avis, Budget and the small, locally based companies. The larger companies will have contracts with airports and railways maintaining a desk at the location for easier collection of vehicles, links with airlines and hotels, (some large hotel chains offering desk space in their reception area) and access to their business through a computer reservation system (CRS) and website.
Rail Rail travel has declined in popularity because of the rise in ownership of private vehicles, the advent of jet aircraft and the failure of rail operators around the world to adapt to changing tourists needs. The Orient Express (www.orient-expresstrains.com), the Trans-Siberian Railway and the Tranz Alpine railway (www.tranzscenic.co.nz) are all well known for their sight seeing appeal and are attractions in their own right. Rail can provide efficient links between airports and city centres and can carry large numbers of passengers and luggage. E.g. London, Frankfurt, Paris and Rome. Trains often have an advantage over coach travel as they are a lot faster. Inter-city express services operate in Britain, Europe, U.S.A. and Japan. For rail travel within a city, tourists tend to travel by underground trains such as the ‘Tube’ in London, Le Metro in Paris and the ‘Bart’ in San Francisco, Hong Kong, Singapore, Rome and Prague also have their own underground rail systems. Tickets offering unlimited travel by train, marketed to inbound tourists and only sold prior to departure, have boosted sales of rail travel. These included Eurailpasses in Europe and Britrail pass in Britain.
Campervans These are becoming increasingly popular both in New Zealand and overseas especially in the USA where more than 25 million Americans make use of them each year. While not cheap to hire, they have the advantage of flexibility and independence providing both transportation and accommodation.
Coach
Coach operations can be categorised as follows:
- express coach services, domestic and international
- private hire services
- tour and excursion operations
- transfer services
Greyhound in the USA is one of the most famous inter city express coach operators but must compete with budget airlines and AMTRAK rail services for its customers. In New Zealand, the Intercity bus service operates between major cities. Coaches can be hired by groups to travel to special events e.g. Millbrook concerts or for educational purposes e.g. tourism students educational tours. Escorted package tours are the most visible use of coaches in the travel industry where there is a combination of accommodation, sightseeing by coach and transportation between cities. E.g. Trafalgar Tours, Contiki Tours. The majority of coaching holidays are booked by the over-45s. City sightseeing tours for half-day or full-day are usually undertaken by coaches or mini-buses. They can be specialised coaches such as London’s double-decker buses or open-decked used in Auckland.
Transfers from airports to hotels are often by provided coach transportation especially when the distance makes the cost of travelling by taxi prohibitive. Some accommodation providers will also provide complimentary transfers by mini-coach or they will be included in the cost of the package holiday.
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)
- 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
Wampam
No |
Wanderoo
No |
Wanderlust
Correct |
Wanderings
No |
Man-made features
No |
Natural features
Correct |
Watersports facilities
No |
Wintersports facilities
No |
Adventure
Correct |
Expedition
No |
Exploration
No |
Safari
No |
Walking holidays
No |
Skiing holidays
Correct |
Sun holidays
No |
Adventure holidays
No |
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 |
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 |
Pre booked accommodation
Correct |
Transfers
Correct |
Currency exchange
No |
Return air tickets
No |
Car hire and meal vouchers
No |
Entrance fees and souvenirs
No |
Transport and accommodation
Correct |
Travel insurance and spending money
No |
Flycruise
Correct |
Port to port
No |
Liner service
No |
Traditional cruise
No |
Distributed within the local economy
Correct |
Exported to overseas companies
No |
Reinvested within parent organisations
No |
Stockpiled within the tourism industry
No |
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 |
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 |
Facilities
Correct |
Size
No |
Price
Correct |
Location
No |
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 |
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.