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INTERNATIONAL TOURISM:

A GLOBAL PERSPECTIVE
World Tourism Organization
in cooperation with
WTO Education Network
at
University of Hawaii at Manoa, U.S.A.
University of Calgary, Canada
James Cook University, Australia
Editor: CHUCK Y. GEE
Dean
School of Travel Industry Management
University of Hawaii at Manoa
Co-Editor: EDUARDO FAYOS-SOL
Head, Education and Training
World Tourism Organization
Copyright 1997 World Tourism Organization
Title: International Tourism: A Global Perspective
1st Edition: October 1997
ISBN: 92-844-0231-X
Published by the World Tourism Organization, Madrid, Spain
All rights reserved. No part of this book may be reproduced or transmitted in any
form or by any means, electronic or mechanical, including photocopying, recording
or by any information storage and retrieval system without permission from the
World Tourism Organization.
The designations employed and the presentation of material in this publication do
not imply the expression of any opinions whatsoever on the part of the Secretariat
of the World Tourism Organization concerning the legal status of any country,
territory, city or area or of its authorities or concerning the delimitation of its frontiers
or boundaries.
Printed by the World Tourism Organization, Madrid, Spain
Design and layout: Salvador Ten Barrn - ARCA Design
Revised by: Dana Gynther and Rosamond Deming
SECTION I: PERSPECTIVES OF TOURISM................................................................1
Chapter 1: Introduction to Global Tourism.........................................................3
1.1 Introduction......................................................................................................3
1.2 Defining Travel and Tourism............................................................................4
1.2.1 The Need for Definitions .........................................................................4
1.2.2 Definitions .................................................................................................5
1.2.3 Forms and Categories of Travel ............................................................7
1.3 History of Travel and Tourism...........................................................................8
1.3.1 Early Ages.................................................................................................9
1.3.2 Middle Ages...........................................................................................10
1.3.3 The Renaissance ...................................................................................11
1.3.4 The Industrial Revolution.......................................................................11
1.3.5 Modern Tourism.....................................................................................12
1.4 Components of the Travel Industry .............................................................13
1.4.1 Transportation and Infrastructure........................................................13
1.4.2 Accommodations and Hospitality Services.......................................14
1.4.3 Travel Distribution Systems ....................................................................15
1.4.4 The Roles of the Public and Private Sectors in Tourism.....................16
1.5 Impacts of Travel and Tourism......................................................................17
1.5.1 Economic Impacts................................................................................17
1.5.2 Other Impacts .......................................................................................18
1.6 The Study of Tourism......................................................................................19
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Table of contents
Chapter 2: Travel Patterns and Trends ..............................................................23
2.1 Introduction....................................................................................................23
2.2 Tourism Growth...............................................................................................23
2.2.1 International vs. Domestic Tourism......................................................24
2.2.2 Total International Arrivals ....................................................................24
2.2.3 World's Top Destinations and Tourism Receipts .................................25
2.2.4 Tourism Generators and Related Expenditures .................................26
2.2.5 Tourism Surpluses and Deficits..............................................................27
2.3 Regional Travel Patterns and Trends ...........................................................28
2.3.1 Europe ....................................................................................................28
2.3.2 Asia and the Pacific..............................................................................29
2.3.3 South Asia...............................................................................................31
2.3.4 Americas ................................................................................................32
2.3.5 Middle East ............................................................................................33
2.3.6 Africa......................................................................................................33
2.4 External Factors That Affect Tourism............................................................33
2.4.1 Changing Demographics ....................................................................34
2.4.2 Technological Advances .....................................................................34
2.4.3 Political Change....................................................................................35
2.4.4 Sustainable Tourism and the Environment .........................................36
2.4.5 Safety and Health.................................................................................37
2.4.6 Human Resource Development..........................................................37
2.5 Tourism Market Trends....................................................................................37
2.5.1 Changing Consumer Preferences ......................................................38
2.5.2 Product Development and Competition ..........................................39
SECTION II: TRAVEL AND TOURISM COMPONENTS AND SERVICES ..................43
Chapter 3: Transportation Services...................................................................45
3.1 Introduction....................................................................................................45
3.2 Historical Development of Passenger Travel ..............................................46
3.2.1 Early Modes of Travel ............................................................................46
3.2.2 Railroads and Ocean Liners ................................................................46
3.2.3 Automobiles and Airlines......................................................................47
3.3 Rail Service .....................................................................................................48
3.3.1 Significant Developments in Passenger Service................................48
3.3.2 Passenger Service Today .....................................................................48
3.4 Automobile Travel and Ground Transportation..........................................49
3.4.1 Automobiles...........................................................................................49
3.4.2 Highway Systems...................................................................................50
3.4.3 Other Ground Transportation ..............................................................51
3.5 Water Travel ....................................................................................................52
3.5.1 Cruise Ships ............................................................................................52
3.5.2 Other Water Travel ................................................................................53
3.6 Air Travel ..........................................................................................................53
3.6.1 Development of Commercial Passenger Service.............................53
3.6.2 Safety and Security...............................................................................54
3.6.3 Costs .......................................................................................................55
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3.6.4 Airports....................................................................................................56
3.6.5 Other Aspects of the Airline Industry ..................................................57
3.7 Regulation and Deregulation of Air Travel .................................................58
3.7.1 Basic Aspects of Regulation................................................................58
3.7.2 Pressures on the Bilateral Regulatory System....................................60
3.7.3 Economic Aspects of Regulation........................................................61
3.8 Challenges Facing Transportation...............................................................62
3.8.1 Fleet Planning........................................................................................62
3.8.2 Congestion ............................................................................................63
3.8.3 Safety and Security...............................................................................64
3.8.4 Environmental Impacts.........................................................................64
Chapter 4: Accommodations and Hospitality Services .................................69
4.1 Introduction....................................................................................................69
4.2 Historical Development.................................................................................70
4.3 Accommodations Classification..................................................................71
4.3.1 Hotels ......................................................................................................72
4.3.2 Resort Properties and Time Shares ......................................................74
4.3.3 The Casino/Destination Property.........................................................75
4.3.4 National Heritage Accommodations.................................................75
4.3.5 Bed and Breakfasts ...............................................................................76
4.3.6 The Emergence of the International Hotel ........................................76
4.3.7 Financing of International Hotels ........................................................76
4.4 Food and Beverage Establishment Classification .....................................78
4.4.1 Hotel-related Food Establishments .....................................................78
4.4.2 Independent Food Service Establishments .......................................79
4.5 Hotel Guests ...................................................................................................79
4.6 Food Service Clientele..................................................................................80
4.7 Ownership and Management of Accommodations................................81
4.7.1 Company-Owned and Operated Systems .......................................81
4.7.2 Franchising.............................................................................................82
4.7.3 Management Contract .......................................................................83
4.7.4 Management Measures for Hotels .....................................................84
4.7.5 Food Service Management and Operations....................................86
4.8 Hotel Operations............................................................................................87
4.8.1 Reservations...........................................................................................87
4.8.2 Marketing...............................................................................................87
4.8.3 Hotel Staffing..........................................................................................89
4.8.4 Use of Technology.................................................................................89
4.9 Travel Industry Linkages.................................................................................90
4.9.1 Marketing Partnerships .........................................................................90
4.9.2 Hospitality-related Industry Organizations .........................................91
Chapter 5: Travel Distribution Systems..............................................................95
5.1 Introduction....................................................................................................95
5.2 Historical Background...................................................................................96
5.3 Types of Distribution Systems ........................................................................97
5.3.1 Direct Distribution System.....................................................................97
5.3.2 Indirect Distribution System..................................................................99
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5.4 Travel Intermediaries....................................................................................100
5.4.1 Tour Wholesalers ..................................................................................100
5.4.2 Tour Operators .....................................................................................104
5.4.3 The Travel Agent..................................................................................105
5.4.4 Regulation of Intermediaries .............................................................107
5.5 The Impact of Technology on Travel Distribution Systems ......................109
5.5.1 The Link Between Technology and Tourism.....................................109
5.5.2 Computer Reservation Systems (CRS)..............................................110
5.5.3 Ticketing Automation..........................................................................111
5.5.4 The Internet ..........................................................................................112
5.5.5 The Future.............................................................................................112
Chapter 6: Special Services and Products ....................................................117
6.1 Introduction..................................................................................................117
6.2 Special Segments of Leisure Travel ............................................................118
6.2.1 Reasons for the Growth of
Special Leisure Travel Services and Products ..................................118
6.2.2 Ecotourism............................................................................................118
6.2.3 Cultural Tourism....................................................................................120
6.2.4 Rural Tourism........................................................................................121
6.2.5 Adventure Tourism...............................................................................122
6.2.6 Health Tourism......................................................................................123
6.2.7 "New Age" Tourism..............................................................................124
6.2.8 Educational Tourism............................................................................124
6.3 Special Segments of Business Travel ..........................................................125
6.3.1 Meetings...............................................................................................125
6.3.2 Incentive Travel....................................................................................126
6.3.3 Expositions ............................................................................................127
6.3.4 Conventions.........................................................................................128
6.3.5 Major Components of the MICE Market..........................................129
SECTION III: TOURISM MARKETING AND PROMOTION....................................135
Chapter 7: Tourism Market Segments and Travel Psychology.....................137
7.1 Introduction..................................................................................................137
7.2 Describing Tourists by Purpose of Travel ....................................................138
7.2.1 Leisure vs. Business Travelers ...............................................................139
7.2.2 Visiting Friends and Relatives (VFR)...................................................141
7.2.3 Special Interest Travel .........................................................................142
7.2.4 Group vs. Independent Travelers ......................................................144
7.3 Sociodemographic Factors and Life Circumstances .............................144
7.3.1 Age .......................................................................................................144
7.3.2 Gender .................................................................................................145
7.3.3 Education.............................................................................................146
7.3.4 Other Factors.......................................................................................146
7.4 Approaches to Tourist Motivation..............................................................148
7.4.1 History of Tourism and Motivation .....................................................149
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7.4.2 Theories of Travel Motivation .............................................................149
7.4.3 Market Research and Motivation.....................................................153
Chapter 8: Tourism Marketing .........................................................................159
8.1 Introduction..................................................................................................159
8.2 Marketing Concepts ...................................................................................159
8.3 Characteristics of Services Marketing.......................................................161
8.3.1 The Tourism Industry's Service Characteristics .................................161
8.3.2 The Tourism Industry's Unique Marketing Challenges .....................162
8.4 Market Segmentation.................................................................................163
8.4.1 Characteristics of Effective Market Segments ................................163
8.4.2 Bases for Market Segmentation ........................................................164
8.5 The Market Mix.............................................................................................165
8.5.1 Product.................................................................................................167
8.5.2 Place (Distribution)..............................................................................168
8.5.3 Price......................................................................................................168
8.5.4 Promotion.............................................................................................170
8.6 Marketing Plans............................................................................................177
8.6.1 NTA Marketing Plans ...........................................................................177
8.6.2 Environmental Analysis .......................................................................179
8.6.3 Competitive Analysis ..........................................................................180
8.6.4 Market Trend Analysis .........................................................................180
8.6.5 Market Segmentation Analysis ..........................................................180
8.6.6 Strategic Goals and Objectives........................................................181
8.6.7 Action Plans .........................................................................................181
Chapter 9: Tourism Research and Forecasting..............................................185
9.1 Introduction..................................................................................................185
9.2 Tourism Research .........................................................................................186
9.2.1 The Functions of Tourism Research....................................................186
9.2.2 The Tourism Research Process............................................................186
9.2.3 Sources of Information........................................................................189
9.3 Organizations Conducting Research........................................................192
9.3.1 Tourism Organizations .........................................................................192
9.3.2 Educational Institutions.......................................................................193
9.3.3 Private Organizations or Firms............................................................194
9.3.4 Consulting Firms...................................................................................194
9.4 Relationship Between Marketing and Research .....................................194
9.4.1 Destination Marketing Research as
a Planning and Evaluation Tool .........................................................194
9.4.2 The Tourism Market Research Program............................................196
9.4.3 Accountability Research for Destination Marketing.......................198
9.4.4 Making Research Understandable to Practitioners........................200
9.5 The Importance of Forecasting Tourism Demand...................................200
9.5.1 How Tourism Demand is Measured...................................................200
9.5.2 Elements of Tourism Demand ............................................................201
9.5.3 Forecasting Tourism Demand............................................................201
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SECTION IV: TOURISM IMPACTS ........................................................................209
Chapter 10: Contributions of Tourism to Economic Development ..............211
10.1 Introduction................................................................................................211
10.2 Understanding Economic Impacts..........................................................212
10.2.1 Tourism in the Global Economy.......................................................212
10.2.2 Tourism in the National Economy....................................................213
10.2.3 Impact of Tourism on Employment .................................................213
10.3 Measuring Tourism Economic Impacts....................................................214
10.3.1 Identifying Tourism Activity...............................................................214
10.3.2 Structure of the Tourism Industry .....................................................216
10.3.3 Supply-Demand and Price Elasticities ............................................217
10.3.4 Direct, Indirect and Induced Benefits.............................................217
10.3.5 Multiplier Model of Tourism Revenue Turnover ..............................218
10.3.6 Input-Output Analysis........................................................................220
10.3.7 Tourism Satellite Accounts................................................................221
10.3.8 Cost-Benefit Analysis .........................................................................221
10.4 Monitoring Economic Impacts.................................................................223
10.4.1 Indicators in Tourism Monitoring......................................................224
10.4.2 The Assessment Process....................................................................225
10.5 Obstacles to Economic Development Through Tourism.......................225
10.6 Facilitating Employment in the Tourism Sector.......................................226
Chapter 11: Social and Cultural Aspects of Tourism.....................................231
11.1 Introduction................................................................................................231
11.2 Sustainable Tourism....................................................................................232
11.3 The Sociocultural Impacts of Tourism......................................................234
11.3.1 Defining Society and Impacts .........................................................234
11.3.2 Major Sociocultural Impacts............................................................234
11.3.3 Cultural Change ...............................................................................235
11.3.4 Other Impacts ...................................................................................237
11.3.5 Factors Influencing the Sociocultural Impacts of Tourism............237
11.3.6 Factors Related to Individual Perceptions of Tourism...................238
11.3.7 Factors Related to the Size and
Nature of Tourism Development.......................................................239
11.4 Strategies to Manage Sociocultural Impacts of Tourism......................239
11.4.1 Obstacles to Sociocultural Understanding....................................240
11.4.2 Strategies to Manage Sociocultural Impacts................................240
11.5 The Relationship Between Culture and Tourism.....................................243
11.5.1 Culture Shaping Outbound Tourism................................................244
11.5.2 Culture Shaping Inbound Tourism...................................................245
11.6 Interpretation for Sustainable Tourism.....................................................247
11.6.1 Principles for Enhancing
the Effectiveness of Interpretation ...................................................248
Chapter 12: Sustainable Tourism and the Environment ................................253
12.1 Introduction................................................................................................253
12.2 Sustainable Development ........................................................................254
12.3 The Physical Environment: A Core Component of Tourism..................254
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12.4 The Impacts of Tourism on the Physical Environment............................256
12.4.1 Negative Impacts .............................................................................256
12.4.2 Positive Impacts.................................................................................259
12.4.3 Factors Which Influence Tourism Impacts ......................................259
12.5 Strategies for Managing Impacts ............................................................260
12.5.1 Planning Strategies ...........................................................................261
12.5.2 Marketing and Education Strategies..............................................268
12.5.3 Research and Monitoring ................................................................270
12.6 Tourism and the Physical Environment: Three Case Studies .................270
12.6.1 The Great Barrier Reef, Australia......................................................270
12.6.2 Venice, Italy........................................................................................272
12.6.3 Mt. Huangshan Scenic Area, People's Republic of China...........273
12.7 Alternative Tourism.....................................................................................274
SECTION V: TOURISM POLICY AND PLANNING ...............................................279
Chapter 13: The Role of Government
in Tourism Policy and Administration..............................................................281
13.1 Introduction................................................................................................281
13.2 Government Involvement in Tourism.......................................................282
13.3 Reasons for Government Involvement
in Tourism and the Economy....................................................................283
13.3.1 Promoting Economic Development ...............................................283
13.3.2 Facilitating and Supporting Industries ............................................284
13.3.3 Raising Revenues ..............................................................................284
13.3.4 Creating a Stable Business Environment ........................................285
13.3.5 Pursuing Other Policy Goals.............................................................285
13.4 Roles of the Public Sector in Tourism.......................................................286
13.4.1 Policy...................................................................................................286
13.4.2 Planning..............................................................................................288
13.4.3 Development.....................................................................................290
13.4.4 Regulation..........................................................................................290
13.5 Levels of Government Involvement.........................................................292
13.5.1 International Involvement ................................................................292
13.5.2 National Involvement .......................................................................293
13.5.3 Local Involvement.............................................................................294
13.6 National Tourism Administrations (NTAs)..................................................295
13.6.1 Role of NTAs .......................................................................................295
13.6.2 NTA Structure .....................................................................................297
13.6.3 NTAs and the Issue of
Public Sector Involvement in Tourism...............................................298
Chapter 14: The Role of International
and Regional Organizations in Tourism..........................................................303
14.1 Introduction................................................................................................303
14.2 Types of Tourism Organizations.................................................................304
14.3 Purposes and Objectives of Tourism Organizations...............................305
14.3.1 Promotion of Industry Interests ........................................................305
14.3.2 Regional Marketing and Cooperation...........................................306
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14.3.3 Providing Data and Advice.............................................................306
14.3.4 Providing Direct Assistance..............................................................306
14.3.5 Addressing Trade Issues ....................................................................307
14.3.6 Addressing Environmental and Social Issues .................................307
14.4 Important Tourism and Tourism-related Organizations..........................309
14.4.1 World Tourism Organization (WTO)..................................................309
14.4.2 Organization for Economic Cooperation
and Development (OECD) ..............................................................310
14.4.3 International Civil Aviation Organization (ICAO)...........................311
14.4.4 International Air Transport Association (IATA) ................................312
14.4.5 World Travel and Tourism Council (WTTC) ......................................312
14.4.6 Pacific Asia Travel Association (PATA)
and Other Regional Organizations .................................................313
14.4.7 International Bank for
Reconstruction and Development (IBRD).......................................315
14.4.8 International Trade in Services and GATS ......................................315
14.5 Challenges for Tourism Organizations .....................................................317
Chapter 15: Tourism Planning and Destination Development .....................321
15.1 Introduction................................................................................................321
15.2 The Forms of Tourism Planning..................................................................322
15.2.1 Tourism and Economic Development ............................................323
15.2.2 Tourism Master Planning...................................................................324
15.3 The Need for Tourism Planning.................................................................324
15.4 Levels of Tourism Planning in the Public Sector......................................326
15.4.1 National Planning..............................................................................326
15.4.2 Local Planning...................................................................................326
15.4.3 Destination Planning.........................................................................327
15.5 Actors Involved in the Planning Process .................................................328
15.6 Organizing the Planning and Development Process ............................329
15.7 Elements of a Tourism Plan .......................................................................330
15.7.1 Demand Analysis...............................................................................330
15.7.2 Supply Analysis ..................................................................................331
15.7.3 Tourism Impact Analysis....................................................................333
15.7.4 Economic and Financial Analysis ...................................................336
15.7.5 Action Plan and Recommendations..............................................337
15.8 Factors Affecting Tourism Planning..........................................................337
Chapter 16: Tourism Human Resources Planning and Development .........341
16.1 Introduction................................................................................................341
16.2 Human Resources Planning......................................................................342
16.2.1 Assessing Labor Demand.................................................................343
16.2.2 Assessing Labor Supply.....................................................................343
16.3 Tourism Employment and Career Opportunities ...................................344
16.4 Quality of Service and the Work Force...................................................347
16.4.1 Service Expectations of Travelers....................................................347
16.4.2 Sustaining Quality Through Skill Standards .....................................347
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16.5 Tourism Education and Training Providers...............................................350
16.5.1 Formal Programs and Courses ........................................................351
16.5.2 Employer-based Education and Training.......................................353
16.5.3 Education and Training Providers and Skill Standards..................354
16.6 Issues Facing Tourism Human Resources Development........................355
16.6.1 Geopolitical .......................................................................................355
16.6.2 Economic...........................................................................................356
16.6.3 Social ..................................................................................................356
16.6.4 Information Technology ...................................................................356
16.6.5 Constant Change.............................................................................357
Chapter 17: Conclusion ...................................................................................361
17.1 Tourism and Sustainability: Issues for 2000 and Beyond ........................361
17.2 The Challenges of Growth........................................................................362
17.2.1 Where Will Tourism Growth Occur?.................................................363
17.2.2 What Kinds of Tourism Experiences Will Meet the Market?..........364
17.2.3 Who Will Benefit from Tourism Growth? ..........................................364
17.2.4 What are the Human Resource
Implications of Tourism Growth?......................................................365
17.2.5 Learning from Other Destinations ...................................................366
17.3 Sustainable Tourism and the Future.........................................................366
17.3.1 Growth Towards What? ....................................................................366
17.3.2 Sustainable Tourism...........................................................................367
17.3.3 Cross-cultural Understanding and Peace......................................367
Glossary.............................................................................................................373
About the Authors.............................................................................................395
Bibliography ......................................................................................................399
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Perspectives of Tourism
CHAPTER 1
Introduction to Global Tourism
CHAPTER 2
Travel Patterns and Trends
CHAPTER 1
Introduction to Global Tourism Learning Objectives
Learning objectives
To define the terms used in the travel and tourism industry.
To obtain an overview of the historical development of tourism.
To appreciate the scope and importance of international tourism.
To identify the major components of the travel and tourism industry.
To understand the impacts and contributions of tourism to the economic
and social well-being of societies.
To understand the importance of the study of tourism.
Key terms and concepts
domestic tourism
inbound tourism
infrastructure
international tourism
mass tourism
outbound tourism
same day visitor
tourism
tourists
transportation
travel
travel distribution systems
travel industry components
visitors
1.1 Introduction
The travel and tourism industry is the worlds largest and most diverse
industry. Many nations rely on this dynamic industry as a primary
source for generating revenues, employment, private sector growth,
and infrastructure development. Tourism development is encouraged,
particularly among the developing countries around the world, when
other forms of economic development, such as manufacturing or the
exportation of natural resources, are not commercially viable.
The reasons people desire to travel are complex and varied.
Contributing to the powerful growth tourism has experienced in a
relatively short time frame has been the increased accessibility to the
many components of the travel experience. Transportation to, from, and
within parts of the world once considered remote has become more
affordable for, and within the reach of, the majority of residents in many
nations. Accommodations and restaurants in assorted budget categories
are universally found in major cities, resort locations, adjacent to
airports and thoroughfares, and in rural areas. Professional services
provided by travel agencies and tour operators, marketing efforts by
public sector tourism offices, advanced technology that rapidly brings
the tourism components together in a flash for the potential travelerall
make todays travel experience safe, comfortable, and enjoyable.
3
1
Introduction to Global Tourism
Learning Objectives
Travel: easier
and cheaper
This chapter will help students of the travel and tourism industry
understand the many positive impacts travel and tourism have on countries
throughout the world. The importance of tourism terminology is
explained, and definitions for the most common terms are provided. Travel
and tourism through a historical context is also treated. The role of tourism
as a major contributor to the global economy is explored, as well as
indicators which reflect the industrys rapid growth. Other contributions of
tourism are discussed, as is the concept of sustainable tourism. Key
components of this multifaceted industrytourism distribution,
transportation, hospitality, tourism administrationare summarized.
Finally, basic approaches to studying this dynamic industry are reviewed,
bringing us to the 20th century and the mass tourism movement.
1.2 Defining Travel and Tourism
1.2.1 The Need for Definitions
The terminology used within this dynamic industry is worthy of
discussion. The simple word travel, defined as the act of moving by
most dictionaries, has a different definition within the context of the
tourism industry. For the purpose of this book, travel is defined as the
act of moving outside ones community for business or pleasure but not
for commuting or traveling to or from work or school (Gee, Makens, &
Choy, 1989, p. 12). With respect to travel as an industry, there must also
be the creation of economic value resulting from the travel activity.
Understanding fundamental definitions and concepts used within the
context of the travel and tourism industry provides an essential
framework from which most discussions on the industry are based.
Because of tourisms intangible nature, common definitions of
terminology benefit the industry in a number of ways.
Standardized definitions help insure that all parties are speaking about
the same term or concept with little or no room for variables. This is
essential for tourism developers and executives from different regions
or countries when they discuss travel and tourism matters.
In addition, having standardized definitions enables planners to use
comparable data in which to make more informed business decisions.
Exact definitions, however, cannot be taken for granted. For the first
half of the 20th century, tourism visitor arrivals were barely recorded
by many countries and, when they were recorded, methods varied by
countries. It was not possible to effectively compare the total number
4
Chapter 1: Introduction to Global Tourism Learning Objectives
Defining "travel"
Importance of
standardization
of visitors from one country to another which defined visitors differently,
usually counting arriving foreign passport-holding individuals.
Finally, having standardized definitions enables tourism researchers to
make scientifically valid assumptions about the tourism industry. This
becomes increasingly important as travel and tourism researchers continue
to enlighten public policy makers and private industry executives about the
extraordinary role tourism plays in the worlds overall economy. As a
relatively new academic discipline, the tourism field lacks the depth of
research found in other forms of commerce. As standardized definitions
become more accepted, researchers will have an easier time collecting
comparable data and performing meaningful tourism studies.
1.2.2 Definitions
The World Tourism Organization (WTO), the major intergovernmental body
concerned with tourism, has led the way in establishing a set of definitions
for general use. In 1991, the WTO and the Government of Canada organized
an International Conference on Travel and Tourism Statistics in Ottawa,
Canada which adopted a set of resolutions and recommendations relating to
tourism concepts, definitions, and classifications. The following definitions
are based on the WTO definitions and classifications and explain the
various types of visitors (see Figure 1.1):
Tourism - The activities of persons traveling to and staying in
places outside their usual environment for not more than one
consecutive year for leisure, business, and other purposes.
Tourist - (overnight visitor) visitor staying at least one night in a
collective or private accommodation in the place visited.
Same Day Visitor (Excursionists) - visitor who does not spend the
night in a collective or private accommodation in the place visited.
Visitor - any person traveling to a place other than that of his/her
usual environment for less than 12 consecutive months and whose
main purpose of travel is not to work for pay in the place visited.
Traveler - any person on a trip between two or more locations
(WTO, 1995b, p. 17).
Unfortunately, there is still confusion over these very basic definitions.
Even within the same country such as the United States, for example,
different states may use different definitions for data gathering and
statistical purposes.
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Defining Travel and Tourism
Definitions in
research
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Figure 1.1: Visitors and Other Travelers
Source: Adapted from World Tourism Organization, Concepts, Definitions, and Classifications for Tourism Statistics, (1995), p. 22.
Travelers
Other travelers Visitors
Same-day
visitor
Overnight visitor
(tourist)
For fhe purpose of:
Leisure, recreation
and holidays
Visiting friends and
relatives
Business and
professional
Health treatment
Religion/
pilgrimages
Other
1.2.3 Forms and Categories of Travel
Just as there are different types of visitors, there are different forms and
categories of travel which take place, varying by traveler, destination,
and motive for travel, such as international vs. domestic travel, intra-
regional vs. interregional travel, as well as inbound vs. outbound travel.
International and Domestic Tourism
According to the WTO, international tourism differs from domestic
tourism and occurs when the traveler crosses a countrys border. Not
every international traveler is a visitor, however. The traveler is a visitor
only if the trip takes him or her outside the usual environment, e.g.,
workers who cross borders for employment are not considered visitors.
The interest in international tourism has always been strong, primarily
for economic reasons, as this form of tourism plays an important role
in trade and monetary flows among nations.
Domestic tourism has been overshadowed by the interest in
international tourism, for it was thought initially to have little or no
international impact, and statistics on the subject were felt to be a
countrys own business. It has become clear, however, that international
and domestic tourism do relate to each other. Travelers choices change
depending on circumstances, and domestic tourism can be substituted
for international tourism and vice versa under the influence of external
factors, such as relative growth in real incomes, price differences
between countries, and international political conditions. Over the past
few decades, in many Western countries domestic holidays were largely
replaced by outbound holidays, influenced by the rise in living
standards and discretionary incomes, while developing countries have
seen sharp increases in domestic tourism (WTO, 1995b, p. 34).
Regional Travel
Regions are geographically united subdivisions of a larger area
characterized by definitive criteria or frames of reference. Three types
of regions are used in tourism research. The first one refers to
geographical location. Regions such as the north or the west, are
examples of this type. The second type refers to administrative areas,
such as Province X. The third combines criteria referring to location
with criteria of a more physical nature. Examples of this type of region
are the lake district or the Pacific Basin. Regions of functional type
can also be constructed, such as urban areas or coastal areas. The
term interregional travel refers to travel among various regions, whether
in regions found within the same province or state, a country, or various
7
Defining Travel and Tourism
Relationship
between
international and
domestic
Regional divisions
Interregional and
intra-regional
regions throughout the world. Intra-regional, on the other hand, refers
directly to travel contained within the same defined region, whether
domestic or international such as travel between countries of East Asia.
Inbound and Outbound Tourism
There are three forms of tourism at any level, in relation to a given
area, e.g., domestic region, country, or group of countries:
Domestic tourism, involving residents of the given area traveling
(as visitors) only within that area;
Inbound tourism, involving non-residents traveling as visitors in
the given area;
Outbound tourism, involving residents traveling as visitors in an
area other than the given area.
If a country is the area of reference, the terms domestic, inbound
and outbound tourism can be combined in various ways to derive the
following categories of tourism:
Internal tourism, which comprises domestic and inbound tourism;
National tourism, which comprises domestic tourism and outbound
tourism;
International tourism, which consists of inbound tourism and
outbound tourism.
To avoid misunderstanding the terms inbound, outbound,
domestic, internal, national, and international tourism are
generally used with a country as the unit of reference. However, it
should be recognized that there are political subdivisions which are
less than countries and differ from states such as the Commonwealth
of Puerto Rico and the Commonwealth of the Northern Mariana
Islands, both part of the United States (WTO, 1995b, p. 27).
1.3 History of Travel and Tourism
While the concept of travel and tourism is as old as civilization itself,
history, reveals that travel was not always a pleasurable experience. A brief
review of tourisms historical development is in order to fully appreciate
todays modern tourism environment and to understand tourisms
challenges as the worlds population approaches the new millennium.
8
Chapter 1: Introduction to Global Tourism Learning Objectives
1.3.1 Early Ages
Logical motivators for the earliest of peoples in prehistoric
civilizations to travel focused on gathering food, avoiding danger, and
moving to more favorable climates. As humankinds skills and
technologies increased, there was a decreased need in the nomadic
existence, resulting in yet another travel motivator: the trade and barter
of goods. As ancient world empires grew in Africa, Asia, and the
Middle East, the infrastructure necessary for travel such as land routes
and waterways was created and vehicles for travel were developed. The
beginnings of official government travel were a direct result of rulers
who sent their emissaries to observe the progress of wars throughout
sprawling empires or to collect taxes from the citizenry. During the
Egyptian dynasties, travel for both business and pleasure began to
flourish, and hospitality centers were built along major routes and in
the cities to accommodate travelers between central government posts
and the outlying territories. During the height of the Assyrian empire,
the means of travel were improved, largely for military use, and roads
were improved, and markers were established to indicate distances. The
Persians who defeated the Assyrians made further improvements to the
road systems and developed four-wheeled carriages for transportation.
The early Greeks advanced travel and tourism developments in two
particular areas. First, through the development of a coin currency, replacing
the need for travelers to carry goods to barter at their final destination for
other goods and services. Secondly, the Greek language spread throughout
the Mediterranean area, making it easier to communicate as one traveled.
Since most of the Greek towns and cities were located along the coast, travel
was primarily by sea. Travel for government business was kept to a
minimum because of the independent nature of the city-state system, but the
Greeks liked to visit other cities for pleasure, particularly Athens. They also
enjoyed traveling to religious festivals, and events like the Olympic games
held every four years at Olympia.
At the height of the Roman empire, the ruling patrician class enjoyed
their leisure during the periods of relative peace. Like the Greeks before
them, they observed their own athletic and religious events and traveled
to these sites. Sightseeing was also popular with the wealthy Romans,
and many visited Greece. A ten-volume travel guide was published in
170 A.D. by the Greek, Pausanias. Entitled A Guide to Greece, the guide
targeted the Roman tourist market and described the Grecian
monuments, sculptures, and the stories and myths behind them. Romans
also toured Egypt to see the Sphinx and the Pyramids. Alexandria was
9
History of Travel and Tourism
Early civilizations
The Greeks'
contribution
Ancient Romans
a cosmopolitan oasis for Roman aristocracy, since many nationalities
were represented there including Egyptians, Greeks, Jews, Ethiopians,
Indians, and Syrians. Egypts weather was also a travel incentive for the
Romans, as it offered a sunny, hot, and dry environment. The citizens of
the Roman Empire also liked to shop when abroad, as most tourists do
today. The practice of hiding purchases from custom officials probably
originated with this class, a result of high duties, typically 25 percent,
placed on imported purchases.
Asian civilizations also have a history of leisure travel to resorts, with
known examples of second homes or seasonal retreats in China as well
as in Japan. Chinese nobility and their guests retreated to the summer
pavilions and villas in Suzhou, Hangzhou and other scenic areas.
1.3.2 Middle Ages
During the Middle Ages from about the 5th to 14th century A.D., trade
and travel declined as roads fell into disrepair and overall travel
conditions became difficult as well as dangerous. During this period,
the Christian Church was the primary impetus for travel with the
spreading of monasteries and the Christian religion. Monks and priests
encouraged the public to go on pilgrimages, and by the 14th century,
pilgrimages were an organized mass phenomena served by a growing
network of charitable hospices with growing ranks of participants from
most social classes. Christians went to Jerusalem and Rome, and even
though the pilgrimages had a religious basis, they were also seen as
social and recreational journeys.
In the latter part of the 13th century, Marco Polo explored the land routes
from Europe to Asia. In China, Polo discovered a well-developed road
system, the first having been built during the Chou dynasty (1122-1221
B.C.). Polos book on his travels was the Wests main source of information
about life in the East during this period. Other travel books began to appear
with the advent of the printing press, and Sir John Mandevilles Travels in
1357 was printed in several foreign languages, with descriptions of travel
to places as far away as southeast Asia.
By the 15th century there is a record of an actual package tour which
originated in Venice to the Holy Land. For the price of the package, the
tourist received passage, meals, accommodations, donkey rides, and
the bribe money necessary to avoid red tape. Early versions of todays
10
Chapter 1: Introduction to Global Tourism Learning Objectives
Leisure travel
in Asia
Christian
pilgrimages
Early travel
accounts
"Modern" tourism
in medieval era
convenience fast food stands popped up along heavily trafficked
pilgrim travel ways. Roadside hawkers during high seasons would sell
wine, fruits, fish, meats, bread and cakes from roadside tents.
1.3.3 The Renaissance
Travelers between the 14th and 17th centuries used as their travel
motivator the desire to broaden ones experience and knowledge. In
England, Queen Elizabeth I approved a form of travel to groom future
diplomats, and the universities such as Oxford and Cambridge in
England and Salamanca in Spain provided travel fellowships. England
also issued a travelers license which was good for two to three years and
it disclosed travel restrictions, how much money, how many horses, and
servants (usually three) the traveler could take. Tourists also were issued
passports, but surrendered them at exit posts, and picked up new ones for
each country they visited. Little cash was carried, instead they used a line
of credit which worked like the modern day travelers checks. The
Elizabethan traveler usually went to Italy, by way of Paris and Frankfurt.
The loosely organized Elizabethan tour later became more highly
structured into what became known as the Grand Tour. The organized
Grand Tour had its start in the mid-1600s, and its popularity ran through
the mid-1800s. The desire to gain new knowledge and experiences were
still the prime motivators of travel for participants of the Grand Tour; and
the Grand Tour was seen as the capstone to educational and cultural
attainment of the upper classes. Typically, sons of well-to-do families
traveled to specific countries to visit historical sites and ruins as well as
to study art, architecture and history. There was even a tour guidebook
for the Grand Tour travelers, the 1778 bestseller by Thomas Nugent.
1.3.4 The Industrial Revolution
The Industrial Revolution, which lasted from about 1750 to 1850
created the base for mass tourism as we know it today. This period
brought profound economic and social changes as workers moved
away from basic agriculture in rural areas into the manufacturing
plants and urban way of life familiar to many people today. The
Industrial Revolution also introduced new machinery powered by
steam for trains and ships. Social changes brought on by changes in
occupations led to the expansion of a new middle class, an increase in
leisure time, and for many, a demand for recreational travel activities
leading to a decline in popularity of the elitist Grand Tour.
11
History of Travel and Tourism
Travel for
knowledge
Passports and
traveler's checks
The Grand Tour
Groundwork for
mass travel
Initially, recreation tourist trips were generally only day trips because
most people still had only limited discretionary income and a five-day
work week was not commonplace. Toward the end of the 19th century,
workers began to get annual vacations. In order to escape congested and
polluted urban areas, many turned to spas and seaside resorts for their
holidays which set the tone more or less for the modern leisure tourist.
Some destinations, until then visited primarily by the wealthy, were
expanded, while others were newly established to capture this growing
middle class market. To these destinations, the middle class represented
a huge market compared with the small number of the earlier wealthy
and aristocratic visitors. What the new tourists lacked in individual
spending power, they more than compensated in terms of the total
volume of arrivals.
1.3.5 Modern Tourism
It was the combination of desire, mobility, accessibility, and affordability
that made mass travel possible. With the 20th century came new
technologies such as aviation, computers, robots, and satellite
communications, which have transformed the way that people live, work,
and play. Modern technology is credited with the development of mass
tourism for a number of reasons: it increased leisure time, provided
additional discretionary income, enhanced telecommunications, and
created more efficient modes of transportation.
As the world looks ahead to the next millennium, there is little doubt
that tourism will continue to be one of the most dynamic growth
sectors of the global economy. Despite periodic recessions, political
upheavals, wars, and uncertainties about the price and availability of
fuel, international tourism is now the largest single item in the worlds
foreign trade budget. It is three times bigger than world expenditures
on defense. No longer an activity reserved only for the privileged few,
tourism is now engaged in by millions of people who enjoy new places,
seek a change in their environment, and look for meaningful
experiences. As the new age of tourism evolves, it will be affected by
a number of exogenous factors (see Figure 1.2) such as economic and
financial developments, technological developments and innovations,
environmental issues, and marketing factors affecting the structure of
the travel and tourism operating sector and product development.
12
Chapter 1: Introduction to Global Tourism Learning Objectives
Beginnings of
vacations
Middle class
market
Reasons for
mass tourism
Growth and
future prospects
1.4 Components of the Travel Industry
1.4.1 Transportation and Infrastructure
How visitors get to, from and within a given destination is the
responsibility of the transportation component of tourism as discussed
in Chapter 3. Whether travel is by air, sea, or ground transportation,
adequate facilities and services must be in place for the development
13
Components of the Travel Industry
Need for facilities
and services
Figure 1.2: Factors Shaping the Development of Tourism
Source: World Tourism Organization, Global Tourism Forecasts to the Year 2000 and
Beyond, (Madrid: WTO, 1995), p. ix.
Economic and
Financial
Developments
MARKET
FORCES
EXOGENOUS
FACTORS
Structure of the
Travel Trade
Operator Product and
Service Development
Destination Product
Development
Trading
Developments
Transport
Infrastructure
Demographic and
Social Change
Political, Legislative,
and Regulatory
Changes
Technological
Developments
Safety of Travel
Marketing
Computer
Reservations Systems
and Destination
Databases
Human
Resources
Development
of a successful destination. For existing tourist destinations, domestic
and international tourism is dependent upon the maintenance and
improvements of airport terminals, harbors, and road systems.
Sufficient transportation is integral to the success of all other
components of tourism. The various modes of transportation work to
get visitors, for example, from the airport to their accommodations.
From the hotel, the visitor needs transportation to various restaurants
and evening entertainment, to attractions or convention sites the next
day, and back to the airport when the departure date arrives.
The infrastructure refers to components found on or below the
ground level that provide the basic framework for effective functioning
of development systems such as urban areas, industry, and tourism
(Inskeep, 1991, p. 119). Infrastructure components such as water
supply, electric power, sewage and solid waste disposal, drainage, and
telecommunications are but a few of the more critical elements
required for the various tourism dimensions to operate efficiently.
1.4.2 Accommodations and Hospitality Services
Tourism facilities covered in Chapter 4 include the services which
provide basic necessities, comfort, and aid to travelers. Because the
visitor is away from home, basic needsa place to stay, food and
beverage, storesmust be accessible, safe, and convenient.
Accommodations
Accommodations or lodging facilities and their related services are
where tourists stay overnight during their travels, accounting for a good
portion of the tourists total expenditure, typically 20 to 30 percent
depending on quality of accommodation, destination, and purpose of
trip. There are a wide variety of types of accommodations which meet
the demands of various budgets, including bed and breakfast
establishments, European style pensions, youth hostels, campgrounds,
recreational vehicle parks, and cruise ships. The hotel, the most common
type of accommodation, has its own categories, extending from
luxurious urban or resort properties, to smaller budget-oriented motels or
motor lodges. Most countries have classification or rating systems for
accommodations, particularly between the hotels and motels, which help
distinguish the level of service provided to the guests.
14
Chapter 1: Introduction to Global Tourism Learning Objectives
Varieties of
accommodations
Food and Beverage
Restaurants, bars and other types of eating and drinking outlets, range in
size and service levels from stand-alone operations, to a unit located within
a hotel, to small food carts or stalls in a street market. Food and beverage
are required by tourists and represent another large source of competition
for visitor expenditures. The cuisine in itself can be a primary or secondary
attraction for many visitors traveling abroad. Destinations such as Lyons,
Paris, Rome, Hong Kong, San Francisco, New Orleans, among many
others, are well known culinary centers. Some tourists are adventurous and
will try many different kinds of foreign foods. A majority of tourists,
however, want to have food and beverage available to them which are
familiar to them. As a result, a range of cuisine offerings need to be
accessible in a variety of price ranges in any popular tourist destination.
Support Services
Support services include shopping facilities and services at the destination
which help fulfill the basic as well as supplementary needs of visitors.
Stores which meet the varying demands of visitors include: souvenir
shops, duty free stores, laundry facilities, grocery and department stores.
Other support services which meet the needs of visitors include tour guide
services, sports and recreation retail and rental shops, as well as
entertainment facilities. All these support services not only make the travel
experience more accessible, but fulfill basic needs in addition to the special
extras which make the experience more enjoyable. An added benefit is that
most of these businesses provide local jobs and opportunities for local
entrepreneurship which helps keep money in the host community.
1.4.3 Travel Distribution Systems
There are several ways to look at the various components and the
services provided by the tourism industry including examining the
tourism consumer, the tourism product itself, and the direct and
indirect distributors of travel-related goods and services. As discussed
in Chapter 5, a travel distribution system involves a process which
begins with the buyer or customer. The customer typically requires a
productan airline ticket, a cruise booking, a hotel reservation or car
rental. The direct distributor is the service or business that provides the
product. The indirect distributor is the travel agency, tour wholesaler or
operator, or specialty channeler, which may or may not be used as an
intermediary to get the product to the customer. These distribution
channels serve to link the tourism suppliers and the customers.
15
Components of the Travel Industry
Attitudes towards
food
Beneficial for
tourist and
community
Direct/indirect
distributors
1.4.4 The Roles of the Public and
Private Sectors in Tourism
It was thought at one time that tourism was primarily a private sector
concern, since the tourism-related business made the profits and
reaped the rewards. It was considered the private sectors responsibility
to develop and produce services and products for visitors. The public
sector, represented by government, saw little need to invest scarce
resources and funds toward an activity that benefited private interests.
However, once governments realized the great economic importance of
tourism, especially as an engine of employment and source of tax
revenue, this attitude changed. Today, there are many interests
concerned with tourisms growth and development from the private
sector businesses, both large and small, to the various public sector
government structures (e.g., national, regional, state, provincial,
municipalities), and international, regional, and national organizations.
Tourism consists of both public and private goods based on the supply
and allocation of tourism resources. While the private sector is likely to
limit its activities to goods or services that can realize profits, the public
sector represented by governments must look beyond profit motives to
those which will benefit the society as a whole. Public goods might
include natural, cultural, and historic attractions and resources which
are maintained and protected by government for the benefit of society
as a whole, and users are likely to benefit from these goods, such as
visiting a national park, without paying for the benefit. Other public
goods and services provided by government which affect tourism
include regulation, promotion, and marketing of tourism resources.
National tourism administrations or organizations, whether government-
sponsored national tourism offices or private associations, help promote
and monitor tourism development within the context of a particular
country, while state, provincial, and even municipal organizations
promote and define the growth of tourism for a smaller area of influence.
International organizations, some of which are regional or developmental
in nature, provide forums for discussion as well as assistance in tourism
marketing and research, the removal of barriers to travel, and a number of
other functions. Foremost among intergovernmental organizations is the
World Tourism Organization (WTO), a subagency of the United Nations
representing 130 member states and over 300 affiliate members in 1996.
The roles of governments and regional and international organizations are
discussed in Chapters 13 and 14.
16
Chapter 1: Introduction to Global Tourism Learning Objectives
Government and
business interests
Tourism
organizations
Because tourism has the ability to increase the public coffers and create
employment opportunities, the public sector has actively assisted in the
promotion of both international and domestic tourism. A series of government
tourism offices for marketing purposesnational, regional, or at the
state/province levelare found in most countries. The goals are to promote the
region they represent and ensure sustainable tourism development.
Tourism organizations are found in both the public and private sectors
and are organized by:
Geography - international, regional, national, state or provincial, local;
Ownership - government, quasi-government, or private;
Function or type - regulators, suppliers, marketers, developers,
consultants, researchers, educators, publishers, etc.;
Industry - transportation, travel agents, tour wholesalers, lodging,
attractions;
Motive - profit or nonprofit (Goeldner, McIntosh, & Ritchie, 1995, p. 71).
1.5 Impacts of Travel and Toursim
1.5.1 Economic Impacts
The travel and tourism industry is a group of economic activities which
combined makes it the worlds largest industry, the number one generator
of jobs, one of the worlds biggest exports, and a major stimulus for
investment and growth. Since 1950, when international travel started to
become accessible to the general public, international tourist arrivals
have risen each year at an average rate of 7.2 percent and international
tourists receipts by 12.3 percent (WTO, 1994a, p. 1). In 1995,
international tourist arrivals exceeded 563 million worldwide and
tourism revenues (excluding transport) exceeded U.S. $399 billion (see
Table 1.1). The World Tourism Organization forecasts that by the year
2000, international tourist arrivals will reach 702 million, and by the year
2010, 1.108 billion arrivals. International tourism receipts grew faster
than world trade in the 1980s, and now constitute a higher proportion of
the value of world exports than all sectors other than petroleum products,
and motor vehicles/parts/accessories. The contributions of tourism to
economic development are covered in Chapter 10.
17
Impacts of Travel and Toursim
Tourism: the
world's largest
industry
1.5.2 Other Impacts
The travel and tourism industry, however, contributes much more to the
world than bolstering economies and providing employment
opportunities. One of the major themes of this book is to explore how
sustainable tourism can be accepted universally and applied to tourism
development. The concept of sustainable tourism, loosely defined as the
meeting of the needs of present tourists and host regions while
protecting and enhancing opportunities for the future, will also be
explored in this book. Tourism can have positive environmental benefits
which include efforts to protect the Earths natural and manmade
resources through the establishment of wildlife preserves, the
restoration of historical sites and landmarks, and the preservation of
pristine environments. It also has beneficial social and cultural impacts.
It helps recognize and promote distinctive cultures and heightens local
awareness of indigenous traditions. Tourism has assisted in the revival
of the arts and handicrafts of some host communities, creating a
demand for performance centers and cottage industry craft shops.
18
Chapter 1: Introduction to Global Tourism Learning Objectives
Source: World Tourism Organization, Yearbook of Tourism Statistics,
48ed., 1996 and 49ed., 1997.
Year Arrivals (mn)
Receipts ($Bn, excl.
Transport)
1950 25.3 2.1
1960 69.3 6.9
1970 165.8 17.9
1980 286.2 105.2
1990 459.2 264.7
1995 563.6 399.0
Period (% p.a. growth)
Average Annual
Percentage Increase
Average Annual
Percentage Increase
1950-1960 10.6 12.6
1960-1970 9.1 10.1
1970-1980 5.6 19.4
1980-1990 4.8 9.7
1990-1995 4.1 7.5
Table 1.1: International Tourism Activity 1950-1995.
Sustainable
tourism
Among the tourism industrys many supporters, it is believed that tourism
can ease political tensions, and in effect, act as a catalyst for world peace.
As foreign borders disappear, whether literally or figuratively, there is an
emerging use of the term global village, making the world smaller and
more intimate. The tourism industry and the countries which rely on
tourism for overall development, must provide tourists a safe and secure
atmosphere, as tourism can only prosper in a peaceful environment.
1.6 The Study of Tourism
The study of tourism can be approached through a variety of
disciplines including economics, business, history, geography, and
sociology, to name a few. The travel industry has made both positive
and negative impacts on these disciplines and has become a global
player in activities, organizations, and businesses.
Throughout this book, many exciting facets of the travel and tourism
industry will be explored, but it is important to realize that no one part
is more important than the other. This industry is unlike any other as
collaborative efforts are not only encouraged but necessary, due to the
interdisciplinary nature of the tourism experience. Each of the key
components required for a tourism destination to flourishtravel
distribution, transportation and infrastructure, accommodations and
other facilities, and tourism administrationrequires the assistance of
each other in combination with marketing, promotion, facilitation and
other software aspects of travel delivery. The interdisciplinary
approach to travel then provides students a means to study tourism,
particularly as it has become an increasingly complex industry with
sophisticated, informed, and demanding consumers.
Rapid global changes and advancements in technology make the study
all the more essential for todays tourism managers and planners.
Tourism leaders must be familiar with the challenges of meeting the
escalating demands of todays traveling public. Tourism providers
know that if they cannot please or exceed their customers needs, the
competition will be more than happy to fill that demand. To compound
an already challenging environment, todays tourism developers and
management teams must work within the confines of an
environmentally-sensitive and socially responsible approach to
sustainable tourism. Careful attention to the earths finite natural
resources, and a sense of social responsibility to host communities and
cultures influenced by tourism will continue to be a major factor in
what encompasses a prosperous tourism industry.
19
The Study of Tourism
Benefits of
tourism
An interdisciplinary
field
The necessity
of study
SUMMARY
This chapter has presented the background on the travel and tourism
industry as the largest service industry in the world. The growth of
domestic and international tourism, the importance of tourism
expenditures, and the contributions of tourism to gross domestic
product and employment opportunities provide many positive effects.
Travel and tourism, when properly planned and managed also bring
other benefits than economic ones such as maintaining cultures,
preserving the environment, and contributing to peace efforts.
Travel and tourism is a multifaceted industry with many components
including travel distribution, transportation and infrastructure, tourism
facilities such as accommodations, food and beverage establishments,
and support services. Both the private and public sectors are involved in
the industry. The challenge for tourism planners and management in both
sectors will be to meet the needs of a more sophisticated traveler, while
balancing the precious resources of a finite world, preserving native
traditions and cultures, and taking social responsibility for negative
impacts on the host community. The next chapter will take a closer look
at travel during the 20th century, travel trends of various countries, as
well as regional and international travel patterns. External factors and
their possible effect on tourism and other world trends will also be
explored.
DISCUSSION QUESTIONS
1. What are the tourism-related definitions for your state/province and
country? Do they differ from the WTO definition?
2. Within a historical context, what have been some of the motives for
travel?
3. Besides economic, environmental and cultural benefits, what are
some other benefits of tourism development?
4. What are examples of the various travel industry components where
you live? How are they interdependent?
5. List some reasons for studying the tourism industry, including your
own.
20
Chapter 1: Introduction to Global Tourism Learning Objectives
CHAPTER 2
Travel Patterns and Trends
Learning objectives
To understand the size and significance of international travel.
To understand the patterns and trends of domestic, regional, and
international travel.
To describe the factors that affect the development of tourism.
To review top tourism trends which will have a significant impact on the
industrys growth worldwide.
Key terms and concepts
computerized reservation system (CRS)
domestic travel
global distribution system (GDS)
international travel
sustainable tourism
tourism expenditures
tourism generators
tourism receipts
travel deficit
travel surplus
2.1 Introduction
The previous chapter examined the broad-based travel and tourism
industry and illustrated that through most of recent history, travel was
often an exhausting undertaking. With societal and technological changes,
travel transformed itself into a much desired and accessible leisure
activitytourismwhich has provided enriching experiences to travelers.
This chapter will direct its attention to the current state of modern tourism.
International and regional travel trends such as visitor arrivals, tourism
receipts, top destinations, and tourism expenditures will be examined, in
addition to regional travel patterns, both inbound and outbound. The
understanding of trends is important as they provide a clue to what is likely
to occur in the future, thus providing a basis for destination and tourist
product planning and marketing. External factors including political,
demographic, social and technological changes must also be considered
for their impact on tourism when trends are being analyzed.
2.2 Tourism Growth
Both domestic travel or travel between two points in the same country,
and international travel, where a person travels to a country other than
his or her own country of residence, have experienced remarkable
growth within a relatively short period of time. It was not until the 1960s
that working-class Britons, for example, could enjoy leisure travel
23
2
Travel Patterns and Trends
Importance
of trends
consisting of a greater distance than what a train could cover in half a
day, for example from Glasgow, in Scotland, to Blackpool, in northwest
England (Elliot, 1991). It was not until 1964 that Japanese were allowed
to travel abroad for pleasure, and then they were limited to one trip a
year. It was not until 1972 that more than one in two Americans had ever
flown (and in that year, only one in five Americans boarded an aircraft).
2.2.1 International vs. Domestic Tourism
The World Tourism Organization estimates that the scale of world
domestic tourism far exceeds that of world international tourism; in 1995
total domestic tourist arrivals numbered about 5.6 billion, whereas total
international tourist arrivals numbered 567 million - a ratio of 10:1
(World Tourism Organization, 1996a). In some countries domestic
tourism dominates often for geographical reasons. Because of the large
size of their countries, residents of Canada and the U.S. are less inclined
to travel to foreign countries in favor of domestic travel. In 1994, U.S.
residents, for example, made over 1.3 billion trips away from home while
remaining within the U.S. borders, in contrast to the 46 million trips U.S.
residents made to foreign countries (U.S. Travel Data Center, 1995, p. 5).
In other countries where geography is more conducive to trips outside
national borders, international tourism is more important than
domestic tourism. Those who live in regions of the world outside of
temperate climates have different travel patterns from those who live in
tropical climates. Sometimes, a nations resources provide ample
attractions and destinations for its own citizens. The French, whose
geography poses few barriers to international travel, spend perhaps ten
times as many holiday nights in France as they do abroad.
The size of domestic travel notwithstanding, the global industry is
increasingly driven by international travel. Most countries that allow
their nationals to travel abroad generally market their countries as
destinations to nationals of other countries. This policy is based on the
fact that the technology which makes foreign travel possible is within
reach of the masses desiring to travel, and that international tourism
represents an infusion of foreign currency and improves foreign trade.
2.2.2 Total International Arrivals
The boom in international tourist arrivals around the globe is a relatively
new occurrence. In 1950, 25 million people crossed an international
border. In 1960, nearly 70 million international arrivals were recorded.
24
Chapter 2: Travel Patterns and Trends
More domestic
travelers
Geographical
reasons
Global
importance
By 1970, this figure had grown to 160 million. In 1980, international
arrivals totaled well over 280 million. By 1995 international tourist
arrivals in all destinations was over 563 million. The WTO projects
worldwide tourism will grow to around 702 million arrivals in the year
2000, and over 1 billion by 2010 (WTO, 1996i; see Table 2.1).
25
Tourism Growth
Source: World Tourism Organization.
Year Arrivals Receipts
1995 563,641,000 US$ 399 billion
2000 702,000,000 US$ 621 billion
2010 1,018,000,000 US$ 1.5 trillion
Table 2.1: WTO Forecast International Tourist Arrivals and Receipts
2.2.3 Worlds Top Destinations
and Tourism Receipts
From an international perspective, the most popular destinations in the
world in 1995 were France, followed by United States and the Spain
(WTO, 1996c). It is important to note that an extremely high portion of
travel is received, as well as generated, by relatively few countries. The
top ten destinations account for 54 percent of the world volume of
tourism flows, with seven of the top ten countries located in Central
and Western Europe. Of the top ten receiving countries, seven are
European nations (see Table 2.2), but this may be explained by the
close geographic proximities and accessibility of countries (except for
the Central Independent States of the former U.S.S.R.) within the
continenta sharp contrast to the wide geographic spread and distance
among the countries of Asia.
The pattern for tourism receipts is similar to tourism arrivals: the top ten
earners represent 55 percent of the world total. The U.S. leads the world
in tourism receipts, with France and Italy in second and third place,
respectively. With the swift increase in recent years of international
tourism to and within East Asia and the Pacific, two Asian destinations
are among the top ten earner list (WTO, 1996d; see Table 2.3).
Europe: top
destinations
Travel receipts
2.2.4 Tourism Generators
and Related Expenditures
Tourism generator countries is a category of information on outbound
tourists, and is of great importance to countries seeking inbound tourism.
Sources of these data include national tourism administrations (NTAs) as
well as international tourism organizations. Sixty-seven percent of all
international outbound travelers are attributed to nationals of only 10
countries, of which six are European countries (WTO, 1996k, p. 78).
26
Chapter 2: Travel Patterns and Trends
Source: World Tourism Organization.
Rank Destination No. of Arrivals
1 France 60,110,000
2
Spain
43,318,000
3
United States
39,324,000
4 Italy 31,057,000
5
China
24,008,000
6
United Kingdom
20,690,000
7
Hungary
20,162,000
8
Mexico
20,034,000
9 Poland 19,200,000
10 Austria 17,173,000
Table 2.2: Top Ten Tourism Destinations 1995
Source: World Tourism Organization.
Rank Destination International Receipts
1 United States 61,137
2 France 27,527
3 Italy 27,451
4 Spain 25,701
5 United Kingdom 19,073
6
Austria
16,221
7
Germany
14,597
8 Hong Kong 9,604
9 China 9,364
10 Singapore 8,733
Table 2.3: Top Ten Tourism Earners 1995
The U.S. and Germany usually lead the world as tourism-generating
countries. The U.S. is responsible for generating 15 percent of the
world total of international tourist arrivals. Until 1967, international
outbound travel from Japan was limited. With the easing of currency
restrictions following the build-up of a strong foreign exchange
position, tourism has grown very fast. Japan has shown the highest
average increase in number of tourists registered in foreign countries,
and by 1995, had an outbound market of 15 million (WTO, 1996k).
Tourism generating countries are also closely linked with the volume of
tourism expenditures. Tourism expenditure refers to the total consumption
expenditure made by a visitor, or on behalf of a visitor, before and during
his or her trip and stay at a given destination (WTO, 1995b). International
tourism expenditures refer to the expenditures of outbound visitors in other
countries. In 1995, Germany surpassed the U.S. in international tourism
expenditures by generating 14 percent of the world total vs. 12.8 percent
for the U.S., while Japan the third leading tourism generator, accounted for
10 percent of the international tourism expenditures (see Table 2.4).
27
Tourism Growth
Source: World Tourism Organization.
Rank Country
International Tourism
Expenditures (mm
US$)
1 Germany 50,675
2 United States 45,855
3 Japan 36,792
4 United Kingdom 24,737
5 France 16,328
6 Italy 12,419
7 Austria 11,687
8
Netherlands
11,599
9 11,455
10 Canada 10,220
Russian Federation
Table 2.4: World's Top Tourism Spenders 1995
2.2.5 Tourism Surpluses and Deficits
The most desired effect of international tourism is the inflow of foreign
exchange. A travel surplus is achieved when foreign visitors spend
more money in a particular country than the total spending of the
Top tourism
generating
countries
Expenditures
countrys own nationals when they travel abroad. The U.S., France, and
Italy, as popular international destinations, are among the top countries
which accumulate tourism surpluses. The United States has been
running a travel surplus since 1990. In 1995, foreign visitors spent
$58.5 billion in the U.S., compared with $45.3 billion spent by
Americans traveling outside the country. Fluctuating foreign exchange
rates have helped inbound travel to the U.S. grow twice as fast as U.S.
outbound travel to foreign countries (WTO, 1996k, pp. 73, 78).
A less desirable economic result, the travel deficit, occurs when total
expenditures spent in foreign countries from a given country exceed
the total tourism receipts earned by foreign inbound tourists. For
example, Japan has experienced a travel deficit for some time, due to
unfavorable exchange rates which have simultaneously enabled foreign
countries to benefit from Japans yen-spending outbound tourists.
2.3 Regional Travel Patterns and Trends
Statistics on worldwide tourism arrivals are dominated by a high
proportion of intra-regional as well as domestic traffic. More than
three-fourths of international travel takes the form of short-haul travel,
and more often than not, within and between the developed nations of
Europe, North America, and Asia. Nationals of Canada, the U.S., and
Mexico visit their neighboring countries more than they do any other
countries of the world.
2.3.1 Europe
As a region, Europe is the worlds number one destination. In 1995,
this region attracted two-thirds of all international tourist arrivals
(WTO, 1996a). Not surprisingly, it also is the leader in intra-regional
travel for a number of reasons:
Europe contains several relatively small countries.
Much intra-regional international tourism within Europe takes place
between neighboring countries with common land borders (or
otherwise between countries that are fairly close to each other).
Modes of travel for smaller countries in close proximity comprise
ground transportation, such as cars, trains, and motorcoaches,
making more cost-prohibitive air travel unnecessary.
28
Chapter 2: Travel Patterns and Trends
Surplus
example: U.S.
Deficit
example: Japan
Regional
international
travel
29
Regional Travel Patterns and Trends
It is estimated that 80 percent of all travel in Europe is intra-regional in
nature. The Netherlands, for example, receives 85 percent of its visitors from
other Western European countries. Over 90 percent of the visitors to Spain
are other Europeans. Renewed promotional efforts to attract nearby markets,
improvements in the tourism infrastructure in many of the tourist-generating
and tourist-destination countries, and the ease of border-crossing between
European countries are all factors favoring short-haul travel.
Leading receiving countries for Europe are the leading destinations for
the worldFrance, Spain, and Italy, among themfor 1995. Overall,
however, there is a decrease in the growth rates of foreign arrivals and
tourist receipts to these more established Western European
destinations, which have been attributed to saturation levels and poor
exchange rates. As a subregion within Europe, the Eastern
Mediterranean countriesnotably Israel and Turkeyled in tourism
arrival growth, with the Eastern and Central European subregion
countries following close behind in 1995 (WTO, 1996a).
Recent trends suggest that outbound long-haul travel from Europe is
beginning to increase and is growing faster than intra-European travel.
Overall outbound traffic from Europe is still projected to be low
growth, however, as the countries nationals may have reached their
ceiling on available free time and disposable income.
2.3.2 Asia and the Pacific
The growth of travel in East Asia and the Pacific has been particularly rapid.
From a region with known arrivals totalling fewer than 100,000 in 1950 to
over one million a year in 1960, the totals for subsequent decade intervals
increased exponentially7.2 million in 1970, and 21 million in 1980to a
total arrival figure exceeding 47 million in 1990 (Gee & Lurie, 1993, pp.
49, 56, 61, 68). In 1995, there were 88 million international arrivals in the
East Asia and Pacific region, of which 70 percent ended up traveling within
the region (WTO, 1996j, pp. 1-2). Travel to, from and within this area of the
world continues to surpass forecast figures. The WTO has had to revise its
estimates for international tourism arrivals and receipts for 2010 because
earlier estimates for tourism, primarily in East Asia and the Pacific, were too
conservative. The revised forecast shows East Asia and the Pacific moving
ahead of the Americas by 2010 ranking second to Europe with 229 million
international arrivals anticipated (see Table 2.5). This growth is significant
in light of the geographic characteristics of the region, where virtually all
international arrivals arrive by air.
Intra-regional
tourism dominates
Changes in
regional growth
Exceptional
growth and good
future prospects
3
0
C
h
a
p
t
e
r

2
:

T
r
a
v
e
l

P
a
t
t
e
r
n
s

a
n
d

T
r
e
n
d
s
Source: World Tourism Organization, WTO News, No. 2., May/June 1996, p. 3.
Region 1995 2000 2010
Average annual growth
rate 1990-2010
Europe 337.2 397 525 3.1
East Asia/Pacific 84.0 122 229 7.6
Americas 111.9 138 195 3.7
Africa 18.7 25 37 4.6
Middle East 11.1 14 21 4.9
South Asia 4.4 6 11 6.7
World 567.4 702 1,018 4.1
Table 2.5: International Arrivals by Region Forecast (in Millions)
Top destinations within the Asian region include Hong Kong and
China, followed by Singapore, for 1995. Rapid tourism development in
countries like Indonesia and Malaysia, as well as relatively new
destinations, such as Cambodia and Vietnam, signal that growth will
continue for the Southeast subregion.
Since opening its doors to tourism in 1978, China has attracted
millions of tourists who are interested in the countrys history, heritage,
cultural diversity, and natural landscapes. The growth in tourism can be
attributed to the extensive efforts of the Chinese government in
promoting tourism and the removal of restrictions on the movement of
tourists. With the increasing quality of tourism services and perceived
value, inbound visitors exceeded all previous records with over 23
million foreign arrivals tallied for 1995. While visitors to China from
compatriot destinationsHong Kong and Taiwanstill dominate,
Japanese visitors led the way for foreign visitors, the former Soviet
Union placing second, followed by the United States.
Future outbound travel prospects for Asian nations hinge on their
continued economic progress, which has been, and should continue to
be, a major catalyst to world economic performance. China has the
potential to be a particularly rich source of outbound travelers, with its
rapidly expanding economy. Overall economic growth rates for this
region of the world should range between 4 and 5 percent each year,
which bodes well for this region as an outbound generator.
2.3.3 South Asia
Overshadowed by the size of tourism development of its neighbors in
East and Southeast Asia, the South Asia region has made impressive
gains in recent years starting at a smaller base. The region is comprised
of India, Bangladesh, Maldives, Pakistan, Sri Lanka, Nepal, Bhutan,
Myanmar, Afghanistan, and Iran. Between 1980 and 1992, the overall
growth rate of international tourism arrivals averaged 3.6 percent a
year, below the global average growth rate. Since 1993, regional
economic growth has spurred tourism development, and in 1995, the
regions 2.1 million international tourism arrivals represented a 12.5
percent growth rate over 1994. This growth rate was three times higher
than the world average and nearly matched the growth in the East Asian
and the Pacific region (WTO, 1996j).
31
Regional Travel Patterns and Trends
Destinations
Tourism to China
Chinese travelers
Rise in arrivals
Nearly four out of every five international tourists go to India, and
strong growth rates have also been evident in the Maldives, based on
its beach resorts, and Nepal which offers special interest tourism.
Although much of the travel is intra-regional, the western European
tourism market is quite steady especially for the beach resort segment.
The growth in European tourism in the last decade is largely
attributable to better air transportation access and increasing
international trade in the region (WTO, 1994c, pp. 30-31).
The prospects for growth are strong for intra-regional tourism, while
the growth in long-haul, inbound tourism arrivals will be lower. Almost
all countries in the region will share in the growth of inbound tourism
including Bangladesh, Myanmar, and Iran. Japan is expected to be the
leader in the major tourist generating markets to the region, followed
by France, Germany, the U.K. and the U.S. With the expansion of trade
and increasingly strong domestic economies, outbound tourism is also
expected to experience steady growth (WTO, 1994c).
2.3.4 Americas
Substantial growth was experienced in tourist arrivals across North,
Central and South America, as well as the Caribbean. Overall tourism
receipts to the region stagnated, however, as a result of the United States
dip in both arrivals and receipts for 1995. The U.S. attributed this to
declining numbers of Canadian and Mexican tourists, although overseas
travel held up well. Of the total arrivals into the Americas in 1995, 75
percent were intra-regional tourist flows. Cuba and Mexico experienced
the quickest growth rate of all the countries of the Americas. Arrivals
into South American countries grew at twice the world average, with
sustained increases from the U.S., Canada, and traffic from within the
subregion. The Caribbean achieved marginal inbound tourism growth
during this year, an outcome of the previous years hurricane although
there was an increase in port-calls by cruise lines (WTO, 1996g).
Forecasting the outbound tourism potential for the Americas varies by
subregions. The U.S. and Canada, like Western Europe, is at a stage
where the level of discretionary spending and time devoted for leisure
have reached their peak, meaning that growth of outbound tourism will
slow for interregional travel, while intra-regional traffic should hold
up. As economic development and industry continue to make inroads
in South and Central American nations, these two subregions show the
most promise for increased outbound travel.
32
Chapter 2: Travel Patterns and Trends
Top
destination:
India
European visitors
Intra-regional
tourism dominates
Growth potential
in South and
Central America
2.3.5 Middle East
The Middle East was the fastest growing region for 1995. While
arrivals to the Middle East represented only about two percent of
international tourist arrivals, this amounted to an 11.8 percent increase,
with receipts increasing by nearly 30 percent. Egypt, which captured
four out of five of these Middle East tourists, increased its revenues by
95 percent as well as its arrivals by 27 percent. Other top destinations
making gains in this region include Jordan, Bahrain, and Lebanon
(WTO, 1996h). Rapid growth was attributed to a renewed interest in
cultural tourism, but perceived safety and increased political stability
played a large role as well.
Prospects for outbound travel for Middle East residents are tied to the
economic performances of the countries. When the national economies
prosper, it typically implies that the citizens are enjoying a better
standard of living and have the necessary resources to consider foreign
travel, whether intra-regional or long-haul.
2.3.6 Africa
Political instability and civil unrest have discouraged development in
this resource-rich, but investment-poor continent. Political and military
disturbances and health apprehensions in some sub-Sahara
destinations have left a decidedly substandard image of Africa as a
tourism destination. Inbound foreign arrivals grew only slightly in
1995, although South Africa enjoyed growth in both leisure and
business travel. More stable political conditions and a decrease in civil
discontent led to South Africa experiencing an increase in both foreign
arrivals and tourist receipts for 1995 (WTO 1996f).
The near future for Africa as an outbound generating region mirrors that
of the Middle East. Much needed foreign investment, as well as
improving political stability and education, could help the more
developed African nations improve their productivity and efficiency, thus
stimulating local economies, and creating an interest in outbound travel.
2.4 External Factors that Affect Tourism
To acquire a deeper understanding of tourism and to better facilitate
tourism planning, a number of external factors which have the ability
to negatively impact the development of tourism must be considered.
Factors confronting global, regional and domestic tourism which have
33
External Factors that Affect Tourism
Egypt: top
destination
Problematic
tourist destination
Growth in
South Africa
the potential to greatly influence tourism growth include: socio-
demographic change, technological advances, political change,
sustainable tourism and environmental issues, safety and health issues,
and human resource development.
2.4.1 Changing Demographics
An important factor is the changing demographic profile of the worlds
population. In light of the projected six billion people populating our
planet by the year 2000, tourism product development and service
delivery for the years ahead require the anticipation of demographic
changes. Three well-defined groups of travelers, each distinct in its
travel consumption and preferences, will be evident. The largest group,
the 18-34 year olds, will continue to comprise much of the traveling
public as singles or in groups. Whether traveling alone, with co-
workers or with a group of friends, this age segment will continue to
dominate much of the Asian outbound market.
In developed western countries and Japan, however, the fastest growing
population segments will be over the age of 50. Many will be early retirees
due to the restructured job market of recent years. These baby boomers
will have the financial resources and discretionary time to travel. However,
their spending patterns will be quite mixed depending upon their
retirement incomes. Longer visitor stays and greater overall visitor
expenditures are expected from this group, who will be seeking physical
adventure, intellectual enrichment and culturally rich destinations.
Finally, the family market will also be visible as families with children
and two income households continue to increase. Travel will be used to
provide quality time for parents and their children, resulting in greater
demand for family-oriented attractions, facilities, and accommodations.
Family structures, too, will change worldwide with the rising numbers of
working women, single households, childless couples and non-traditional
families. All have enormous implications for planning tourism destinations.
2.4.2 Technological Advances
Technology continues to impact on the travel experience and those who
use or supply it. In particular, the linkage and interdependency between
transportation, travel distribution systems, and customer information is
receiving increasing attention. In aircraft development the technology is
already available to transport passengers in a supersonic airplane from
New York to Shanghai in under 3 hours, although it will be many years
34
Chapter 2: Travel Patterns and Trends
Young travel
most
Growth in
retiree travelers
Family market
Transportation
before economics make the technology feasible for marketplace
adoption. The technology of high speed trains able to reach speeds in
excess of 483 kmh (300 mph) are already in use in Japan, France and
other parts of the world, and could become a preferred alternative to air
travel as airport congestion and delays increase. Although train travel for
pleasure has been growing in popularity in the U.S., it seldom receives
adequate attention as a viable mode of transportation in tourism because
of economic factors and withdrawal of public subsidies.
Technology can be an ally, but also a threat. While new developments
in technology can improve tourism services and product delivery,
technology can also mean customer loss, job displacement, under-
employment and a resulting negative impact on a local economy.
Already the new generation of long-haul, fuel-efficient aircraft means
the ability to overfly virtually any destination. Unless a destination can
generate sufficient demand for air seats, the future of adequate air
service to that destination may be in jeopardy.
The services provided by airline computerized reservation systems
(CRS) and telephone and cable companies, combined with the growth
of electronic highways and on-line services, are dramatically altering
the way travel products are marketed and distributed. Accessible and
user-friendly global distribution systems (GDS), accessed by millions
of individuals throughout the world, have the ability to do what the
travel agent or tour operator has traditionally done: to create a vacation
package for the consumer that can be tailor-made by the customer.
The convergence of the television, telephone and the personal computer
will continue to create new distribution channels for reaching the
customer directly. The growth of video conferencing and creation of
virtual reality technologies will enable people miles apart from one
another to communicate in a very real sense without leaving their
offices, and without buying an airline ticket or needing a hotel room.
2.4.3 Political Change
We will continue to see political changes which will have strong effects
on tourism. The emerging Eastern European countries and Central
Independent States, slowly establishing democratic governments and
free market economies, are gradually having an impact on that region
of the worlds travel trends. The impact of Chinawith its population
over 1 billionas both an inbound, but more importantly, an outbound
tourism market, attracts the interests of economists, business and
government policy makers in neighboring countries and beyond.
35
External Factors that Affect Tourism
Negative aspects
of technology
Other advances
China's impact
2.4.4 Sustainable Tourism and the Environment
As tourism reaches maturity as an industry in many countries around
the world, the question is one of sustainability. The term sustainable
tourism is a relatively recent one with different meanings and
interpretations. Sustainable tourism deals with the ability of a
destination to remain competitive against newer, less explored
destinations; to attract first time visitors as well as repeaters; to remain
culturally unique; and to be in balance with the environment.
With the projected tourism arrivals figure of 1 billion by the year 2010,
the potential strain on beaches, mountain resorts, historical city centers
and small rural villages could leave their existence in peril. Accepting
and implementing limits on tourism development is one way to
counteract the potential overuse and exploitation of a destinations
natural resources and cultural heritage.
Environmental problems such as global climate changes, ozone loss,
deforestation, and toxic wastes promise to stay at the top of the
international agenda. The tourism industry will see the continued need
to combine sound economic development with the protection of
natural resources. There will be an increasing need to analyze the
trade-offs between native cultural integrity and the benefits of
employment, and the need to understand the impact of rapid climatic
changes on prime vacations sites, such as coast lines.
Even ecotourism is not without its detractors. Ecotourism started out as
a low-impact offshoot of the adventure travel industry. It represented the
best intentions of an educated and affluent middle class to travel without
despoiling the environment. However, the very presence of tourists can
still threaten the fragile ecology of such areas as the Antarctic, tropical
rain forests, or island destinations anywhere.
The World Tourism Organization, the World Travel and Tourism
Council, and the Pacific Asia Travel Association are among the many
international and regional organizations to develop policies, codes, and
guidelines regarding conservation and protection of natural resources.
Every segment of the industry has been enlisted to support the
environment movement. Lately, the hotel industry has moved
aggressively in combating waste in the use of water and energy,
reducing the use of hazardous chemicals in laundry and ground
maintenance, and in recycling high use consumable materials, such as
soap, paper goods, and plastic amenities in guest rooms.
36
Chapter 2: Travel Patterns and Trends
Defining
"sustainable
tourism"
Development
limitation
Combining
development and
protection
Ecotourism
"Green"
organizations and
industry
2.4.5 Safety and Health
Health as well as security concerns are of major interest for
international travelers. The reemergence of diseases such as cholera
and malaria in developing countries, as well as the global threat of the
AIDS virus, is making travelers more concerned with the sanitation
standards applied to food, water, and medical supplies, and with human
behavior and preventative measures practiced by host destinations.
Safety has always been an important prerequisite for the attraction of
international visitors. According to a 1994 survey, 66 percent of leisure
travelers said crime is an important consideration in choosing a
vacation destination, and 62 percent of travelers considering overseas
travel had safety concerns as they made their plans (World Travel and
Tourism Council, 1995). While the statistical odds of being harmed as
a visitor are insignificant compared to injury from ordinary accidents,
the publicity which follows the wrongful death of a tourist makes for
sensational anecdotal stories and headline news around the world. As
tourism grows, security becomes more important and travelers will
expect safeguarding measures in transportation and accommodations
while visiting foreign countries. The threat of international conflicts
and wars, growing levels of crime, and terrorism not only deter
tourism, but often place countries at political odds when they must
issue travel advisories against otherwise friendly countries.
Some countries possess the resources to handle security issues as they
relate to tourists quite effectively. However, aviation safety problems
continue to plague many countries as the rapid growth in airline service
puts a severe strain on the countries aviation infrastructure, and are
further exacerbated by personnel shortages and lack of experienced
pilots, flight and ground crew.
2.4.6 Human Resource Development
The travel and tourism industry continues to be a major source of
employment in both affluent and poor countries, employing one out of
every nine workers worldwide. Because of slowed population growth
rate in industrialized countries, however, some nations will have to
search for workers, including the importation of expatriates, and
initiate work re-engineering for service industries. The lack of
available workers will become especially hard-felt after the turn of the
century as populations continue to age.
37
External Factors that Affect Tourism
Disease
Crime
Political problems
Aviation safety
Need for
workers in
industrialized
nations
Developing countries, by contrast, will be faced with burgeoning youth
populations in need of work but without the necessary skills. The shortage
of entry- level and skilled workers, plus the increased consumer demand
for improved services, will pressure the industry to provide more
education and training and greater incentives to work in the tourism sector.
Some countries actively pursue human resource planning for tourism
enterprises which is discussed in Chapter 16. Hospitality and tourism
training and education have undergone rapid development in most
countries which heavily rely on the visitor industry for revenues.
Secondary schools provide training for students desiring semi-skilled,
entry-level hotel and restaurant jobs. Post-secondary vocational
programs offer special skill training for students interested in
becoming supervisors or professional chefs. Higher education offers
different programs at varying levels, including two-year certificate and
diploma programs, as well as four-year Bachelors and Masters
degrees.
2.5 Tourism Market Trends
Unlike some of the external factors which can have negative affects on
tourism if not addressed early or quickly reversed, trends represent
developments or social movements that foreshadow what will happen
in the future. Since a true trend is impossible to change, planners must
anticipate it and determine a suitable course of action. The following
represent a few of the top tourism trends which are having significant
impacts on the tourism industry worldwide.
2.5.1 Changing Consumer Preferences
Todays pleasure to business travel mix is approximately 60 percent/vs.
40 percent, a reversal of the trend prevailing in earlier decades which
favored business travel. While business travel is expected to remain
important due to the development of Eastern Europe and resource-rich
South East Asian countries such as Malaysia and Indonesia, most of
the growth will derive from pleasure traffic.
Paid holidays, while common in developed countries, are not yet
universal, but are increasingly seen as an entitlement, as an integral
component of ones lifestyle, and as an antidote to stress from
overwork. For example, the Japanese government and industry are
encouraging a policy of jitan or shortening work hours, with a goal
of 1,800 hours or less for the average worker in a year. This translates
into seven weeks of available time for leisure and travel.
38
Chapter 2: Travel Patterns and Trends
More
pleasure
travel
Paid holidays
Need for training
in developing
nations
Education
Planning for
the future
The industry is seeing both a rise in length of stay, particularly from the
older, affluent vacationers with discretionary time, as well as an
increase in shorter holidays by the younger work force that want to
catch their breath and take two- or three-night extended weekend
getaways from the stressful urban pace.
2.5.2 Product Development and Competition
New tourism destinations are rapidly emerging in the world. These
include Vietnam, Cambodia, and Laos in Asia; the Central Republics
of the former USSR; Chile in Latin America; and Southern African
nations. In recent years, Vietnam has been particularly aggressive in
seeking foreign expertise and investments for tourism. Even Japanthe
Asian regions most important tourist generating countryis beginning
to stress the importance of a two-way flow of tourists. Some of these
destinations already boast a high standard of service. Most of them
also possess aggressive government assistance and incentive for
tourism development and varied attraction resources, which bode
extremely well for their potential success. For the more established
destinations, however, these new destinations represent competition for
regional and international travelers.
SUMMARY
It is universally accepted that the travel and tourism industry is a growth
industry. Many market factors have contributed to this explosive
tourism growth, including more modern, convenient and accessible
tourism products and services in a variety of price ranges. International
visitors and their spending in other countries, moreover, make the
international travel market a key economic development tool. As a
result many countries have extensive tourism marketing campaigns
geared toward making their country a worthy country to visit.
This chapter provided information on basic international travel flows,
outbound and inbound, as well as tourism receipts and tourism
expenditures of the various countries. Regional tourism patterns were
also reviewed, suggesting that proximity and land size play an
important role in the foreign travel picture. Future outlooks for various
regions were also offered. The positive relationship for developing
nations between the status of a countrys economic development,
increased inbound growth rates, and the likelihood for generating
outbound tourism, was discussed. Developed nations, on the other
39
Tourism Market Trends
Longer stays,
more trips
New destinations
hand, revealed a stagnant relationship between continued economic
growth and generating increased rates of outbound tourism, as the
ceiling for leisure time and discretionary income has been reached.
Finally, this chapter discussed the various external factors which can
and should be addressed by tourism planners and developers to ward
off potential negative impacts. While many of these external tourism
trends cannot be modified or reversed, proper planning and ongoing
awareness of their implications on travel and tourism will enable
tourism planners to maintain a balance in the development process.
DISCUSSION QUESTIONS
1. Describe some of the advances that have affected tourism growth.
2. What are some of the reasons why some countries run tourism
surpluses and others run tourism deficits?
3. What is the difference between inter- and intra-regional tourism,
and why are regional trends important?
4. Why do the countries with the largest proportion of international
travel arrivals and receipts tend to have the slowest growth trends in
international arrivals?
5. What advances in technology tend to aid tourism growth? What
technological advances could stall tourism growth?
40
Chapter 2: Travel Patterns and Trends
2
S
e
c
t
i
o
n
Travel and Tourism
Components and Services
CHAPTER 3
Transportation Services
CHAPTER 4
Accommodations and Hospitality Services
CHAPTER 5
Travel Distribution Systems
CHAPTER 6
Special Services and Products
CHAPTER 3
Transportation Services
Learning objectives
To understand the historical development of passenger transportation
modes and their role in the travel industry.
To identify the roles and important aspects of ground, sea, and air
transportation.
To understand the basic aspects of international air agreements, airline
regulations, and deregulation.
To identify challenges facing the transportation industry.
Key terms and concepts
bilateral vs. multilateral regulatory systems
computerized navigation and traffic control
computerized reservation system (CRS)
five freedoms of the air
ground transportation
scheduled vs. charter air service
yield management
3.1 Introduction
Transportation lies at the heart of the tourist industry. It is the link
between home, destination, accommodation, attraction, and all other
locales of the tourist trip. Its efficiency, comfort, and safety determine,
to a large extent, the quality of the tourism experience. In many cases,
its cost comprises the largest portion of a tourists total expenses.
There is a direct relationship between advances in transportation and
growth in the tourism industry. In particular, the automobile and the jet
airplane have made travel accessible to a growing segment of the worlds
population. As the demand for travel expands, the capacity of
transportation modes will be a critical factor in facilitating or hindering
the expansion of the tourism industry. For many destinations, the
constraints posed by transportation and its infrastructuresuch as airports
and roadsconstitute the biggest obstacles to growth. In the case of island
destinations, the availability of air access is the sine qua non of tourism
development; without such access, there is little or no touristic activity.
This chapter will cover the basic aspects of passenger travel. The
relationship between transportation and technology will be highlighted
through a discussion of the various modes of travel. Air travel is
covered extensively, given its importance to international tourism. The
main issues facing the air travel industry, including the critical role of
regulation, will be explored.
45
3
Transportation Services
Expansion due to
modern transport
3.2 Historical Development
of Passenger Travel
Different modes of travel have been dominant at different times in
history. The evolution of passenger travel, from horse-drawn carriage
to jet airplane, reflects the development of transportation technology.
Understanding how passenger travel has changed over time is
important because the development of other aspects of the travel
industry, especially the accommodations sector, have been greatly
influenced by those changes.
3.2.1 Early Modes of Travel
Land travel did not progress much beyond horseback riding until the
early 19th century, when improvements in roads and coach design
made land travel more comfortable for passengers. These
improvements included the use of better paving materials for roads,
which prevented them from deteriorating into rough, pothole-filled
paths, and the development of coaches with suspended rather than
fixed carriages, which provided passengers with a much smoother ride.
However, because road construction was arduous work, and because
most major cities were port cities more easily accessible via water
transportation, long distance land travel capabilities remained limited
until the development of the railroad.
Water travel was much more extensively used and developed at this time.
Over the centuries, ship design had been improved by many
accomplished seafaring societies, such as the Phoenicians, Romans, and
Chinese. From the 16th through early 19th centuries, sailing ships such
as the caravel and clipper dominated the seas. Steamships were
developed in the early 19th century and began regular service across the
Atlantic Ocean in the mid-1800s.
3.2.2 Railroads and Ocean Liners
The first transportation modes to be used extensively for passenger travel
were the railroads and ocean liners, both of which utilized steam engine
technology. Rail development began in the early 1800s and quickly grew
through the 19th century. In 1835, the Great Western Railway linked
London and Bristol, and in 1841 Thomas Cook pioneered the first rail
tour. In the United States, the first transcontinental railroad was
completed in 1869. By the late 19th century, rail dominated land
46
Chapter 3: Transportation Services
By land
By sea
Steam engine
technology
passenger movement and had greatly improved inland access from the
major cities. The famous Orient Express linked Paris with Istanbul in
1883 and London with Istanbul in 1913. In the United States, intercity
trains such as the Broadway Limited and the Golden State Limited were
very popular. By the early 20th century, the train station had become the
focal point of many established and new cities and towns, often
surrounded by hotels, restaurants, and other facilities for travelers.
Meanwhile, improvements in steamship technology in the late 1800s
through the early 1900s led to the age of the great ocean liners, such as
the Mauritania, the Queen Mary, and the Queen Elizabeth, which could
make the trans-Atlantic voyage in less than four days.
3.2.3 Automobiles and Airlines
Mass production of the automobile, pioneered by Ford Motors in the
early 1900s, led to the decline of rail as the primary mode of land
transportation. With mass production the automobile became affordable
to a large segment of the population. As automobile ridership grew, so
too did government commitment to road systems, such as the autobahns
in Germany and the interstate highway system in the United States.
In a similar way, the development of the airplane greatly diminished the
role of the passenger ocean liner. Orville and Wilbur Wrights famous
first flight at Kitty Hawk took place in 1903. Passenger service in
airborne vehicles began in 1910 with the dirigible in Germany. In 1914,
the first scheduled airplane passenger service began in the U.S. It was
not until after World War I, however, that airplane service became an
established transportation mode. Europe took the lead in developing
passenger service, while in the U.S., faster mail service was the focus
for the development of air transportation. In the years between the world
wars, there were significant advances in air transport technology,
including the areas of weather forecasting, navigation equipment,
aerodynamics, and management. Intercontinental air transport became
established during World War II, and soon new, four-engine planes with
pressurized cabins and advanced instruments made long-range flying
more comfortable and efficient. With the introduction of commercial jet
aircraft in 1958, air travel quickly gained dominance over rail and water
travel modes. In 1970, the wide-bodied or jumbo jet was introduced,
and the supersonic Concord began service in 1976. Since then other
new aircraft have been introduced which have increased the speed,
efficiency, and comfort of passenger travel.
47
Historical Development of Passenger Travel
Railway
expansion
Ocean liners
Auto replaces
trains
Popularity of cars
Plane replaces
liners
Developments in
passenger planes
3.3 Rail Service
Although railroads continue to be a major component of passenger and
freight transportation, air and automobile transportation have greatly
reduced the demand for passenger rail service in the decades since the
end of World War II. Throughout its history, rail has suffered from
several problems. One of these was the lack of standardization of the
rail line gauge or width, especially in the United States, which required
expensive transfers between different rails. In addition, the varying
physical demands and requirements of passenger vs. freight service
have caused problems for track design and maintenance, as have the
effects of weather, soil, and erosion. The cost of track maintenance,
along with the capital and labor requirements of operating a rail
service, continue to make it an expensive mode of transportation. The
combination of ridership decline and high costs has meant that most
rail lines need to be subsidized by government.
3.3.1 Significant Developments
in Passenger Service
Passenger service began in the early 1800s with railroad cars that
measured about 4.6 meters (15 feet) long by 2.1 meters (7 feet) wide.
Around 1830, the Baltimore & Ohio company in the U.S. began using
a car that held about 60 passengers, and whose design remained
basically the same for passenger cars over the next 100 years. The
Pullman sleeping car was patented in 1864. By the early 1900s, cars
made of steel began to displace the older wooden cars, and by the 1930s
rail travel had become faster and more comfortable. Ironically, just as
rail travel benefited from these advances, it began to lose its popularity
to the automobile and, soon thereafter to airplanes. In the United States,
the federal government responded to rails economic crisis by creating
Amtrak, a private corporation, in 1971 which took over intercity rail
service and revived ridership but required large public subsidies. In
Canada, a similar service was established called Via Rail.
3.3.2 Passenger Service Today
Japan and several European countries have led the development of
modern rail systems which remain competitive with other modes of
travel. Japan National Railways introduced high-speed service with its
bullet trains in 1965 linking major metropolitan centers in the country.
European rail service also remains popular because of widespread
48
Chapter 3: Transportation Services
Problems with
rail travel
Expense of rail
maintenance
Physical changes
access and convenience. The EuroCity network, which replaced the
Trans Europe Express, serves over 200 cities in a dozen countries.
International visitors from outside Europe can take advantage of the
Eurailpass, which entitles them to unlimited ridership during a
specified period of time. The much-anticipated Eurotunnel (also
known as the Channel Tunnel or Chunnel) opened in 1994, creating a
rail link between Great Britain and France.
High-speed service and other advances continue to occur in the rail
industry to stay competitive. In France, the train a grande vitesse (TGV)
links Paris, Lyons, and other destinations, and travels at about 200 kmh
(186 mph). In Japan, the shinkansen, or bullet train, reaches speeds of
over 200 kmh. There has also been work on a rail system that uses
magnetic levitation, or maglev, which enables trains to hover slightly
above the tracks, thereby eliminating friction and noise. In Britain,
railbusesa combination of bus and rail car frameutilize older railroad
tracks and provide an economical alternative to short-range air service.
3.4 Automobile Travel
and Ground Transportation
3.4.1 Automobiles
The dominant mode of travel in the world today is the automobile. As
automobile registration continues to expand, this dominance will
prevail into the next century. The reasons for the popularity of
automobile travel include:
Better vehicles. Todays automobiles are high-precision machines,
engineered for greater reliability, road stability, safety, and easier
driving. Advances in fuel efficiency and better mileage as well as
improved road and highway engineering offer an incentive for
leisure travel by car.
Affordability. Relative to other forms of transportation, the cost of
an automobile is low. Automobiles, therefore, are accessible to a
much wider range of travelers.
Convenience. For a household that already owns an automobile, the
decision to travel is as easy as loading the baggage. There is no need
to work around a predetermined schedule, or to make reservations
and possibly incur charges well in advance of the travel. Travel plans
can be changed at will.
49
Automobile Travel and Ground Transportation
Advantages to
modern rail travel
Flexibility. The automobile allows for spontaneity and flexibility in
travel. Extra time can be spent at a place of particular interest, and
rest stops are always possible. In short, since the automobile is an
individual mode of travel (vs. rail, bus, and airline, which are
collective), it enables the individual traveler to freely make decisions
during the trip without impinging on the travel experience of others.
Automobile Rentals
The automobile rental business generates billions of dollars of revenue
worldwide, most of which occurs at airports. In 1996, six of the major
car rental companiesHertz, Avis, Budget, Enterprise, Alamo, and
Nationaleach earned over $1 billion from their global operations.
Hertz, the largest car rental company, operates a fleet of over 500,000
vehicles from approximately 5,400 locations in over 180 countries
(Loverseed, 1996, p. 4).
There have been several significant developments in the automobile
rental business that have benefited tourists. One of those is the fly-
drive package which combines airline and auto rental expenses into a
single product that is less expensive and easier to book for the traveler.
Another ongoing development is in the area of computerized driving
directions and other high-technology aids that make navigation in an
unfamiliar destination simpler and safer. Rental companies are also
offering a range of incentives, including mileage credit (similar in
concept to the airlines frequent flyer programs), partnerships with
hotels and airlines, and expedited check-in and check-out services.
3.4.2 Highway Systems
An essential prerequisite of automobile travel is a system of roads and
related infrastructure. The more extensive the roadway system, the
greater the choices of destinations and routes. From the perspective of
tourism, two of the key aspects of highways are their safety and cost.
Because highways are often traveled at high speeds, they need to be
designed for safety. Safety issues include the road construction
standards, lighting, and signage. Well-maintained roads with good
lighting and signage reduce costs resulting from repairs and accidents.
The costs of building and maintaining highways can be met in a
number of different ways, including taxes on fuel, tires, automobile
and truck sales, vehicle weight, and vehicle registration as well as tolls
collected directly from users of the highway.
50
Chapter 3: Transportation Services
Earnings
Developments in
industry
Incentives
Safety and costs
3.4.3 Other Ground Transportation
The term ground transportation generally refers to travel by bus,
limousine, van, and other modes for sightseeing and for transportation
between hotels, attractions, and airports.
Buses
Buses (also referred to as coaches and motorcoaches) are a major mode
of passenger travel. One of the key advantages of bus travel is that, like
automobiles, buses are not limited to fixed or major routes of travel.
Because of this, bus service is very flexible and can reach many more
communities than either railroads or airlines. Buses serve an important
niche in tourism by also providing service between air and rail
terminals, accommodations, and attractions.
One of the most popular types of bus service is the bus tour, which
incorporates into one package transportation, attractions, meals, and
sometimes hotel accommodations. Standard bus tours pick up
passengers at their hotels and take them to various attractions, often at a
discounted rate below what the tourist would otherwise pay on his own.
On a per-passenger basis, bus transportation is very economical when
compared with rail and air. Modern buses also have many of the
amenities that tourists have come to expect, such as larger, more
comfortable seats that can recline, air conditioning, and toilets.
European bus service is especially well-developed, and provides many
other amenities, such as bar service.
Recreational Vehicles
Recreational vehicles, or RVs, function like mobile motel rooms,
enabling the traveler to integrate travel mode and accommodation
facility into one unit. RV sales are increasing, and more destinations
are providing the facilities for RVs to dock. These facilities, known as
RV campgrounds, provide hook-ups for water, electricity, and sewage.
Spaces at an RV campground may be reserved, much like a hotel.
Demand for RVs has been strong in recent years. From 1991-1994,
wholesale shipments of RVs grew by 50 percent.
51
Automobile Travel and Ground Transportation
Flexibility
Bus tours
Economical and
comfortable
Transport and
accommodation
combined
3.5 Water Travel
3.5.1 Cruise Ships
As discussed above, the use of large ocean liners for passenger
transportation has been eclipsed by air travel. Today, the primary form
of water travel is the cruise ship. Cruise ships differ from the other
forms of transportation discussed in this chapter, however, because
their primary purpose is not only to provide transportation, but to serve
as a destination in and of itself. Although cruises often make stops at
various ports to enable passengers to disembark and shop, sightsee, or
do other activities, the central attraction of a cruise is the cruise ship
itself and its various amenities.
On modern cruise ships, these amenities can be extensive. A ship
might include the following: exercise gym, swimming pool, movie
theater, video game arcade, discotheque, retail shops, various
restaurants and bars, and live entertainment. For example, a passenger
aboard the 13-story, 2,934-meter (963-foot) Queen Elizabeth II can
enjoy the following: five dining rooms (three of which seat over 500
persons), a health spa, life enrichment seminars, three swimming
pools, a basketball court, a library, a computer center, and a shopping
promenade. On most cruises, the quantity and quality of food is a
primary attraction. Todays cruise ships also include special design
features, such as stabilizers, that reduce the ships movement in rough
sea conditions. Some ships also have large garage spaces that can
accommodate hundreds of vehicles, including RVs and buses.
The majority of cruise vacations today are sold as fly-cruise packages.
These packages include air and ground transportation to and from the
cruise ships home port. In this way, a person is able to purchase a
cruise vacation as a complete package, without worrying about
scheduling conflicts between the cruise and the airline. The average
length of a cruise is about six days.
The size of the cruise market is substantial and growing in importance.
For the North American cruise market, which dominates the total
market, the number of passengers has grown at a rate of 7 percent per
year during the period 1989-1994 to a total of 4.6 million. During the
same period, cruise ship passenger capacity has grown by 7.8 percent
per year. As of 1995, the most popular cruise destination by far was the
Caribbean (including the Bahamas), which accounts for over 50 percent
of the market. Other popular destinations include the Mediterranean
52
Chapter 3: Transportation Services
Transport and
destination in one
Amenities
Fly-cruise
packages
Growth in market
(9.2 percent), Alaska (7.8 percent), and the Mexican Riviera (5.3
percent). It is expected that the growth of the Asia-Pacific region will
spur the development of its own cruise industry with Singapore serving
as a main port (Peisley, 1995).
3.5.2 Other Water Travel
As with the cruise ship, most of the other forms of water travel are
intended to provide more than just passenger transportation. On scenic
rivers, for example, boats enable tourists to experience an older mode
of travel while sightseeing. Ferries offer tourists a leisurely and often
scenic route between inland points. Specialty craft, such as hovercraft
and hydrofoils, provide quicker short-run travel than ferries, and can be
attractions in themselves.
3.6 Air Travel
From the perspective of international tourism, air travel is the most
critical link between tourists and destinations. There are two basic
categories of air service: scheduled service provides regular service to
the general public, while charter service flights are privately contracted
to provide service to a defined group, such as a tour group or
association. Although charter service can be an important component of
tourism (especially in Europe), most air travel statistics refer primarily
to scheduled air service. According to IATA, in 1994 scheduled airline
service exceeded one billion passengers for the first time, of which 328
million were on international routes, an increase of 8 percent over 1993.
In addition, in 1994 airlines earned a collective net profit of U.S. $1.8
billion, reversing a trend of losses dating back to 1989 (International Air
Transport Association, 1996). The top ten airlines in terms of
international scheduled passengers carried are listed in Table 3.1.
The discussion below briefly covers the history of passenger air travel
and the basic aspects of the air transportation industry. The subject of
air travel regulation is discussed in a separate section below, given its
importance and complexity.
3.6.1 Development of Commercial
Passenger Service
The earliest passenger aircraft to provide economical passenger service
was the DC-3, a two-engine propeller plane introduced in 1935 which
had a capacity of 21 persons and flew at about 305 kmh (190 mph).
53
Air Travel
Top destinations
Profit earning
3.6.2 Safety and Security
Air travel is one of the safest modes of transportation in the world. This
is due to the quality of the aircraft, the skill of pilots, maintenance
personnel, and other persons involved with aircraft operation, and the
control of airline traffic in the skies. In all these areas, regulation plays
a critical role. Passenger aircraft must meet rigorous design and
Improvements in air travel technology proceeded rapidly during World
War II and resulted in larger and faster passenger planes. The 1950s saw
the introduction of jet aircraft, such as the Boeing 707 and the DC-8.
These planes flew at 885 kmh (550 mph) with a load of over 100
passengers. With the jet aircraft, air travel became much more affordable
and accessible, and the 1960s and 1970s saw a rapid expansion in the
airline industry. Wide-bodied aircraft began service in the 1970s,
inaugurated by the Boeing 747 which seated up to 500 passengers, and
followed by planes such as the Lockheed 1011, DC-10, and the Airbus
A300. The wide-bodied jets necessitated upgrades to airports and
runways and spurred larger capacity for hotel accommodations, ground
transportation, and other sectors of the tourist industry. In 1976, the
Concorde, a supersonic transport (SST) plane, made its first commercial
flights. However, the Concorde sustained large operating losses, and its
noise impacts forced it to reduce its speed over populated areas. As a
result, the SST has not been a significant factor in passenger air travel.
54
Chapter 3: Transportation Services
Source: IATA, World Air Transport Statistics, p. 37.
Rank Airline
Passengers
(thousands)
1 British Airways 23,933
2 Lufthansa 17,507
3 American Airlines 14,893
4 Air France 13,762
5 KLM 11,644
6 United Airlines 11,286
7 Singapore Airlines 9,920
8 SAS 9,806
9 Cathay Pacific 9,743
10 Japan Airlines 9,376
Table 3.1: Top Ten IATA-Member Airlines, By Number of
International Scheduled Passengers Carried, 1994.
Jet expands
industry
Concorde
Importance of
regulations
55
Air Travel
materials standards. Pilots and flight crew are required to meet
experience and training standards, as do air traffic controllers. Airplanes
are constantly inspected to ensure adequate maintenance. In these ways,
regulations attempt to eliminate the risk of major accidents.
Acts of sabotage and terrorism are a constant concern of airlines. The
most important aspect of this concern is the security system of an airport.
As discussed below, the security of an airplane from explosive devices,
passengers with firearms, and other threats, is the most important
responsibility of an airport security system. However, it is complicated by
other security concerns and by the various different groups involved in
enforcing airport security. Security technology is improving, but is often
too expensive for widespread use. For example, while baggage scanners
now exist that can detect plastic explosives, which are generally not
detectable by metal detectors, in the near term their high cost will prevent
their widespread use. This type of problem complicates overall airline
security, which by its nature requires cooperation among airports. That is,
a flight from airport A to airport D, that passes through airports B and C,
is only as secure as the weakest security system among the four airports.
Airline accidents, whether caused by safety violation or sabotage, can
be extremely costly to an airline company. A number of prominent
cases in recent years, including the Pan Am crash in Lockerbie,
Scotland in 1988 and the Valujet crash in the U.S. Florida Everglades
in 1996 are examples of incidents which have contributed to carrier
bankruptcies or mandated shutdowns. Accidents can also force airline
companies into expensive litigation, which can sometimes result in
large damage awards in favor of the plaintiffs.
3.6.3 Costs
As the frequent air fare wars among airlines indicate, ticket prices
are a critical component of the flying publics travel decisions. Besides
an airlines own capital and operating costs, it must pay a variety of
taxes and fees to airports. These charges include ticket taxes,
international departure taxes, customs fees, immigration fees,
agriculture fees, and passenger facility charges. These taxes, landing
fees, and other charges increase the total cost of airline operations, and
can have a significant impact on the price of the ticket.
A controversial aspect of airline costs is related to airlines that operate under
bankruptcy protection. Deregulation of the industry, particularly in the
United States, resulted in the bankruptcy of several major airlines. Those
airlines that continued passenger service operations while in bankruptcy
Security
concerns
Cost of
accidents
Taxes and fees
Bankruptcy
protection
were able to reduce their operating expenses while the courts oversaw the
disposition of their debts. This, in turn, enabled these airlines to lower their
ticket prices. Other airline companies argued that this created an unfair
situation, since they were forced by the market to also lower their ticket
prices to compete with the bankrupt airline, but without any corresponding
reduction in expenses. Despite these objections, customers benefited from
lower airfares and U.S. airlines such as TWA and Continental were able to
emerge from bankruptcy with stronger balance sheets and viable operations.
3.6.4 Airports
Operations
The modern airport is home to a wide range of activities centered
around the departure and arrival of aircraft. In addition to serving as a
terminal for passenger air travel, airport operations also include:
Control of air traffic at and in the vicinity of the airport.
Automobile rental operations. Roughly 70 percent of automobile
rentals occur at airports. Rental operations require large parking
areas and shuttle services to transport people between the rental
office and the airport terminal.
Baggage processing. The efficient handling of baggage is a critical
component of airport operations. Increasingly, technology is being used
to improve baggage operations. For example, after months of correcting
initial design and engineering flaws, the new Denver International
Airport in the U.S. has a sophisticated baggage system that is
programmed to reduce mishandling of baggage and passenger wait time.
Cargo and mail. Most of the worlds mail, and much of its cargo, is
transported via airlines. Although largely hidden from the typical
airline passenger, cargo and mail handling are a substantial
component of overall airport operations.
Customs and immigration operations. This function is related to
safety and security operations, since both require personnel and
technology to check outgoing and incoming passengers and
baggage. Because international airports are major entry points for a
nation, this function is a high priority of overall airport operations.
Restaurant and retail operations. The traveling public has come to
expect a range of ancillary services at airports. These operations
often represent a significant source of revenue for airports.
56
Chapter 3: Transportation Services
Safety and security. Monitoring and restricting the flow of persons
and material through an airport is an extremely complex and
demanding responsibility.
Airport Capacity
The volume of passenger travel through a major international airport is
astonishing. In 1995, each of the top 35 airports worldwide processed
in excess of 20 million passengers. This volume is straining many of
the worlds airports. As a result, many countries are in the process of
building or expanding terminals that can accommodate these high
levels of traffic. Examples are the Kuala Lumpur International Airport,
Phase I of which is scheduled to open in 1998 and handle 25 million
passengers per year, the Chek Lap Kok airport in Hong Kong
(scheduled for 1998), and the new Bangkok airport (scheduled for
2000 and to handle 55 million annual passengers).
However, the expansion or new construction of an airport is becoming
an increasingly difficult task for governments. The high cost of building
an airport poses a major obstacle. Traditional public financing becomes
riskier and more controversial as airports become more expensive;
projects such as the Denver International Airport in the U.S. and Kansai
International Airport in Osaka, Japan experienced well-publicized cost
overruns. Airlines have become more aggressive in challenging landing
and other airport fees and taxes that appear to place an unfair burden on
their industry. Finally, the social and environmental impacts of
constructing new airports have required lengthy and sometimes
contentious entitlement processes, in which residents near the proposed
airport sites have fought against their development.
3.6.5 Other Aspects of the Airline Industry
Computerized Reservation Systems (CRSs)
Computerized reservation systems such as Apollo, Sabre, Amadeus, and
Galileo have had a dramatic impact on the industry. Although there were
earlier concerns that such systems would give their owners a monopolistic
advantage over rival airlines, regulations and competitive pressures have
prevented such anti-competitive results. CRSs have also enabled
customers to become more involved with and knowledgeable about air
fares and reservations. Through the Internet, customers can search for the
best fares and book reservations using CRSs that are adapted for public
access and use. This subject is discussed further in Chapter 5.
57
Air Travel
High volume of
passengers
Building new
airports
Customer
advantages to
computerization
Computerized Navigation and Traffic Control
Delays and even accidents can result from problems in navigation and
air traffic systems. Technological advances in this area hold the
potential to greatly improve the safety and efficiency of air travel. The
air traffic system includes satellites, ground radar, air traffic control
centers, and the airplanes. Problems can stem from several sources. For
example, throughout much of Europe ground control centers use a
multitude of different operating systems, adding unnecessary
complexity to communications among the centers.
Improvements are being made using Global Positioning Systems (GPS), a
satellite-based method of positioning and navigation that is being adapted
to a variety of uses (such as in rental cars and boats). FANS (Future Air
Navigation System) uses GPS and existing ground radar to improve the
precision of positioning and flight path, thereby improving overall
communication between air traffic controllers and airplane personnel.
3.7 Regulation and Deregulation
of Air Travel
Air travel has always been a highly regulated activity. The reasons for
this are complex but revolve around the perceived importance of air
travel to national pride and strength, the high costs of operating air
service, the safety issues posed by air travel, and the international
political aspects of flying to and over nations. Chapter 14 touches on
international regulation from the standpoint of key air transportation
organizations. This chapter provides further discussion of international
issues, as well as on the economic and safety dimensions of regulation.
3.7.1 Basic Aspects of Regulation
International airline regulation began with the Chicago Conference in
1944. The Chicago Conference resulted in the Chicago Convention,
which created the International Civil Aviation Organization (ICAO,
discussed in Chapter 14) and established four basic principles of
international aviation. These principles are:
The sovereignty of each nation over its own air space.
The right of all nations to participate in air traffic.
58
Chapter 3: Transportation Services
System
improvements
Reasons for
regulations
Nondiscriminatory regulation of airline traffic.
The freedom of each nation to designate its own carrier to operate
in its air space.
The Chicago Conference also proposed the original Five Freedoms of
the Air (there are now eight), by which each member, or contracting
state, granted to the other contracting states the following freedoms:
The privilege to fly across its territory without landing.
The privilege to land for non-traffic purposes.
The privilege to put down passengers, mail and cargo taken on in the
territory of the state whose nationality the aircraft possesses.
The privilege to take on passengers, mail and cargo destined for the
territory of the state whose nationality the aircraft possesses.
The privilege to take on passengers, mail and cargo destined for the
territory of any other contracting state and the privilege to put down
passengers, mail and cargo coming from any such territory
(Wheatcroft, 1994, p. 17).
Adoption of these freedoms by the international community would have
constituted a multilateral system of air regulation. The term multilateral
as used here refers to a regulatory system in which all nations abide by
an agreed upon set of rules. In fact, only the first and second freedoms
were subsequently adopted by the signatory nations of the International
Air Transport Services Agreement. The remaining freedoms, which are
crucial for passenger transportation, are subject to bilateral agreements,
or agreements between two nations. In effect, nations did not want to
commit themselves in advance to these freedoms, and wished to retain
the right to negotiate on a case-by-case basis.
In 1946, the Bermuda Agreement, a bilateral air agreement, was reached
between the United Kingdom and the United States. This bilateral
agreement subsequently became the basic model for bilateral agreements.
Bilateral agreements generally apply to scheduled passenger service and
not to charter flights. Although each agreement is unique in its details,
there are several major areas that all agreements must address:
Specification of the routes that may be flown by the carriers of the
two countries.
Designation of the airlines that may fly the specified routes.
59
Regulation and Deregulation of Air Travel
Freedoms
adopted
Bilateral
agreements
Restrictions on ownership and control of the designated airlines.
Fair opportunities for each countrys airlines to fly the specified routes.
Agreement on setting rates, which is normally delegated to IATA
traffic conferences.
In addition, many bilateral agreements are supplemented by
confidential memoranda of understanding between the two countries,
which often have the effect of superseding or modifying the terms of
the bilateral agreement. An example of a bilateral agreement is one
recently reached between China and the U.S. in 1995. With this
agreement, the two countries allowed for the first time nonstop service
between them.
Unlike a multilateral system, in which one set of rules applies to all
participating countries, the existing bilateral system results in each
country having to negotiate separate agreements with numerous other
countries. The reason that a multilateral system has not been achieved,
despite its apparent efficiency when compared with numerous bilateral
agreements, is that the bilateral system enables each country to retain
greater freedom in its negotiations with other countries. This freedom,
in turn, is important because most countries have historically adopted
a protectionist stance towards air transportation. Because air travel is
perceived as a vital interest to a country, involving issues such as
national defense and prestige, it is unwilling to let market forces
determine control and availability. Thus, countries establish national
airlines and, through bilateral agreements, ensure that those airlines
retain market access and remain economically viable.
3.7.2 Pressures on the Bilateral
Regulatory System
The existing bilateral regulatory system has been criticized as being
inefficient and detrimental to the growth of international tourism. Its
inefficiencies are becoming more apparent due to changes and pressures
in the air transportation industry. It is anticipated that the following
pressures will significantly alter the existing system in the near future:
Tourisms increasing importance in the world economy, which is
alerting countries to the costs of maintaining protectionist policies.
The global trend towards deregulation and liberalization by the
United States, Canada, Australia, and the United Kingdom, and
especially by the European Union.
60
Chapter 3: Transportation Services
Investment
protection
The global trend towards airline privatization.
The recognition of the competitive advantages of very large airlines.
International mergers and alliances within the airline industry.
Developments in CRSs and communications, which are facilitating
the globalization of the airline industry.
Increased acceptance of foreign ownership of airlines.
The global trend towards liberalization of trade as reflected by the
European Union (EU), North American Free Trade Agreement
(NAFTA), General Agreementon Trade in Services (GATS), the
Andean Pact, the Australia-New Zealand Closer Economic
Relations Agreement, and other similar trade agreements
(Wheatcroft, 1994, pp. 27-38).
3.7.3 Economic Aspects of Regulation
Whether an airline is owned by the national government or a private
company, it represents a significant capital investment. Airplanes are
expensive to acquire and to operate. Regulation has often been used to
protect that investment by limiting competition and preventing the
market from adjusting prices. In the United States, regulation also
ensured that market pressures did not dictate routing, and forced
airlines to maintain routes that were unprofitable. This kind of national
regulation came to an end in the United States beginning in 1978 with
the Airline Deregulation Act, and since then the deregulation
movement has gained momentum in other countries.
The Airline Deregulation Acts primary impact was in granting the
airlines greater freedom in setting air fares. The key provisions of the
Act were in the following areas:
Airlines were able to set fares within a zone of reasonableness
without having them nullified by the government as being
anticompetitive.
Flights of equal distance, but with different market characteristics,
no longer needed to be priced at the same level.
There was greater freedom in creating discount air fares.
The restrictions on the relative pricing of coach and first-class fares
were removed, allowing the airlines to set fares for these different
classes on the basis of market factors.
61
Regulation and Deregulation of Air Travel
Deregulation
Pricing
There was greater freedom in entering new routes for both
established and new carriers.
Greater freedom in pricing has been an important factor in encouraging
leisure travel. Airlines have developed sophisticated yield management
techniques that enable them to maximize their revenue on each flight.
Yield management refers to the practice of pricing fares on each flight
to take advantage of the specific demand characteristics of that flight.
For example, a flight between two major cities that departs at 8:00 a.m.
on each week day will have its seats allocated and priced to take
advantage of the greater business travel demand at that specific time.
Another flight that departs at 11:00 p.m. will be priced to attract leisure
and other non-business travelers. In both cases, the airline uses pricing
in conjunction with passenger demand to generate as much revenue as
possible. In addition, yield management must account for passengers
utilizing frequent flyer awards, airline employees flying fare-free, and
other components of the flights overall revenue.
Deregulation in the United States has had several consequences. The
number of airlines has increased, largely due to the creation of smaller
regional companies. However, the number of major airlines has
decreased to eight as of 1996, representing a significant consolidation
of ownership. Deregulation also has resulted in a route system known
as the hub and spoke system, in which the major airlines concentrate
on routes between hubs such as Los Angeles, Chicago, Dallas, and
New York City, and regional airlines provide service from hubs
outward along spokes to secondary areas.
3.8 Challenges Facing Transportation
The growth of visitor traffic and the demands such growth places on
transportation systems will pose significant challenges to
governments, planners, engineers, and others in the foreseeable future.
3.8.1 Fleet Planning
From the perspective of companies that provide transportation services,
fleet planning is a constant challenge. Fleet planning refers to a
companys efforts to match its supply (of available seats) with passenger
demand. Fleet planning is critical because of the nature of transportation
supply; specifically, the inventory of seats available for sale must either
be sold or lost at the moment they go unused. Thus, a bus that is carrying
62
Chapter 3: Transportation Services
Yield
management
Consequences of
deregulation
Supply and
demand
only 25 percent of its capacity loses 75 percent of its potential revenue;
meanwhile, the buss operating costs, such as wages and fuel, generally
remain fixed regardless of the number of passengers. Fleet planning is
necessary to maximize the number of seats that are sold per trip.
Maximizing ridership is important because the costs of providing
transportation are usually high. These costs include the acquisition or
lease of the airplane or vehicle, any debt service associated with the
acquisition, facilities for holding and maintenance, and labor.
3.8.2 Congestion
Congestion of roads, passenger terminals, and airports is a condition
that most travelers face at one time or another, especially in urban areas.
Inadequate facilities to handle growing demand is often the primary
cause of congestion, but it can also result from traffic flow design
problems, repairs and other construction-related activity, and tighter
security procedures. Visa and customs procedures often require
travelers to stay within the confines of the passenger terminal for longer
periods of time, and contribute to the overall congestion of the terminal.
Congestion can result in significant costs to the traveling public. For
example, a tourist who misses a flight due to airport congestion may
face additional costs relating to the rescheduling of his
accommodations and rental car. Congestion also places a greater stress
on a security system, especially where persons must be physically
screened and where there are areas of controlled access. The quality of
the visitor experience can also be diminished by overcrowded streets
and terminals, as tourists are subjected to the very pressures that they
wanted to get away from in the first place by taking the vacation.
One cause of congestion is the fluctuation in traffic levels throughout
the year. The volume of leisure travel, in particular, often varies greatly
throughout the year due to factors such as the weather, school
schedules, and work schedules. Besides congestion, these seasonal
fluctuations cause other problems for transportation companies. For
example, transportation providers must balance the need for capacity
to handle peak traffic with the costs of maintaining that capacity
through off-peak seasons. While seasonality affects all aspects of the
travel industry, its effects on transportation businesses are pronounced
because of the large costs associated with the industry.
63
Challenges Facing Transportation
Causes of
congestion
Problems of
congestion
Seasonality
3.8.3 Safety and Security
Providing for the safety and security of the traveling public will
continue to be a central concern of transportation providers, especially
for airlines. Although airline accidents and acts of terrorism are rare,
when they occur they draw worldwide attention. The circumstances
and images of such accidents tend to emphasize the vulnerability of air
passengers, and can have a significant effect upon peoples willingness
to travel by air. From the standpoint of international tourism, much of
which requires air travel, an increase in the publics fear of flying can
have significant negative implications.
Ensuring the safety of the traveling public can result in conflicts with
other aspects of the travel experience, however. For example, as noted
above, heightened security at an airport normally results in greater
congestion and delays, thereby diminishing the quality of the visitor
experience. The visitor will find himself subject to more extensive
screening and search procedures, restricted to certain areas, or forced
to fill out more detailed questionnaires. Safety measures also entail
significant costs. These costs result from hiring additional security
personnel, purchasing newer and better equipment, and mandating
compliance with additional procedures. Balancing the costs of safety
measures against those resulting from accidents and terrorism will
continue to pose a challenge to the transportation industry.
3.8.4 Environmental Impacts
Transportation modes and facilities tend to have significant
environmental impacts. All modes of travel require energy, most of
which is provided by fossil fuels. The burning of fossil fuels
contributes to a number of environmental problems, including air
pollution and global warming. In addition, the petroleum industry on
which transportation depends can be the source of practices and
accidents that are environmentally destructive, including oil tanker
spills, explosions at oil and gas wells, and offshore drilling problems.
The building of transportation infrastructureroads, terminals,
airportsalso has significant impacts. The construction of a major
roadway, for example, necessitates excavation and paving of strips of
land that can extend for many miles. A long road will likely travel
through several different ecosystems, which in turn means that those
ecosystems will be affected by the flow of traffic. The siting and
64
Chapter 3: Transportation Services
Psychological
effects of
accidents
Tighter security
lessens enjoyment
Use of fossil fuels
Construction
65
Summary
construction of airports involves considerations of noise impacts and air
pollution, and in some cases the destruction of existing flora and fauna.
With the growth of ecotourism, rural tourism, and other alternative
forms of tourism which bring the tourist closer to local cultures and
environments, the role of transportation in providing access to
ecologically vulnerable areas will be an issue. For example, advocates
for the preservation and protection of marine life often criticize ocean
transport businesses that bring tourists into the marine environment.
This intrusion into the marine environment can inflict damage through
engine noise, oil and fuel leaks, physical injury to ocean animals, and
other such impacts. On the other hand, tour operators point out that
through such experiences tourists gain a greater appreciation of the
environment. These types of issues are not easily resolved, and have a
direct bearing on the transportation industry.
SUMMARY
As technology has evolved and improved, different modes of transportation
have been dominant at different times in history. Today, from the perspective
of international tourism, air transportation is the most important mode,
having eclipsed ocean liners in the middle part of this century. When all
types of travel are considered, the automobile continues to be the preferred
mode, due to its flexibility and cost. Railroads and ships have lost their
popularity as modes of passenger travel but remain important modes of
freight transportation. Cruises are a unique combination of destination and
transportation, and the cruise ship industry has grown with the advent of fly-
cruise packages that are easily accessible to tourists.
The airline industry has developed over several decades into a dynamic
and highly competitive industry. Air travel costs and safety continue to
be major issues of concern to the industry and the flying public. The
regulatory environment of international air travel has been shaped by
bilateral agreements between countries. Deregulation of airlines and
increasing trade liberalization, among other trends, are exerting
pressure on the existing bilateral system. However, a true multilateral
system has yet to be implemented.
As tourism moves into the new century, there are several key
challenges that transportation will face. Congestion, environmental
impacts, and safety and security concerns will be significant factors of
the transportation environment of the future.
Ecotourism
DISCUSSION QUESTIONS
1. What are some of the major technological developments that have
influenced the development of passenger transportation?
2. What are the advantages of automobile transportation vs. other
modes of travel?
3. Discuss the key aspects of airline transportation.
4. Identify the major operations that occur at airports.
5. What are some of the issues that bilateral air agreements cover?
6. How has deregulation affected the airline industry?
66
Chapter 3: Transportation Services
CHAPTER 4
Accommodations and Hospitality Services
Learning objectives
To understand the hospitality industry and its role within the tourism and
travel industry.
To appreciate the historic development of the accommodations industry
and related hospitality services.
To understand the structure of the accommodations industry.
To understand the role of the food and beverage industry within the
hospitality industry.
To understand the various forms of managerial systems used in the
accommodations industry.
To gain an international perspective of the hospitality industry.
Key terms and concepts
American plan (AP)
average daily rate (ADR)
bed and breakfast
Bermuda plan
European plan (EP)
expatriate manager
franchise
management contract
modified American plan (MAP)
occupancy ratios
rack rate
time shares
yield management
4.1 Introduction
Hospitality is the term generally associated with hotels and restaurants.
Today, the accommodations industry (also referred to as the lodging or
hotel industry) and the food and beverage industry (also referred to as the
catering industry) encompass a variety of facilities and are a dynamic part
of the global travel and tourism industry. Everywhere the traveler goes, a
place to stay and place to eat are necessities. The accommodations
industry represents a wide array of lodging facilities from luxurious
resorts to modest bed and breakfast establishments. This range of facilities
reflects the different needs and preferences of travelers and market
dynamics. Worldwide, the number of available hotel rooms has increased
rapidly to keep pace with the growth in international and domestic
tourism. The food and beverage industry has also expanded as tourism has
boomed. While hotels and resorts provide much of the core food service
facilities for travelers, restaurants and other food service outlets also serve
travelers. Food service is offered at a variety of facilities including
transportation terminals, airplanes, trains, ships, and attractions. Much
like the accommodations industry, the food and beverage industry is
emerging in the global tourism economy through worldwide chains,
providing new opportunities for the hospitality industrys growth and
expansion. This chapter explores the accommodations and food and
beverage industries and their role in tourism.
69
4
Accommodations and
Hospitality Services
Necessary part
of industry
4.2 Historical Development
Travelers have sought rest and refreshment at public houses and hostels
throughout history. At the height of the Roman empire, inns flourished
along major highways and other shelters were maintained along major
highways, primarily for government officials and persons of
importance (Gee, 1994, p. 27). In Asia, small shelters were placed at
stops along caravan routes. Pilgrims looked to religious houses to give
sanctuary, rest, and refreshment along the way. The term hospitality is
derived from hospice, a medieval house of rest for travelers.
Interestingly, even to this day some Alpine hospices in Europe continue
the tradition of offering food and rest to weary travelers (Lattin, 1985,
p. 15). Food service also can be traced back in history, perhaps as far
back as 4000 B.C. when establishments began selling food and wine.
Such establishments continued and flourished during the Greek,
Roman, and Byzantine periods.
It was not until the fifteenth century that commercial hospitality
ventures made their appearance in Europe. The forerunner of the bed
and breakfast type of accommodation was the spare bed in private
homes offered to travelers for a small price. At the same time, free-
standing inns appeared, often built by affluent landowners and named
after them. In the sixteenth century, some inns and taverns in England
began serving meals at set prices at regular meal times (Mill, 1990, p.
321). During this era, road development and coach travel spurred the
growth of travelers and the number of inns to serve them. By the end
of the seventeenth and the dawn of the eighteenth centuries, lodging
facilities which could be called the early versions of hotels made their
appearance. In 1774 the first hotel was opened in London; later in 1794
the City Hotel opened in New York City. In the late eighteenth century,
the term restaurant was first used in Paris referring to a dining room,
and in the United States, Delmonicos opened in 1834 offering meals
in the English fashion of fine dining (Coltman, 1989, pp. 326-327).
In the United States, the first hotel equipped with modern amenities
resembling todays facilities is believed to be the Tremont House which
was built in 1892 in Boston, Massachusetts. The Tremont House
established a number of precedents with a lobby, indoor plumbing, private
guest rooms with locking doors, and a complimentary cake of bath soap
(Mill, 1990, p. 15). Elsewhere, hotels like the Ritz in Paris, France, the
Savoy in London, England, and the Raffles in Singapore set standards for
service and quality. In the twentieth century, many of the innovations in the
70
Chapter 4: Accommodations and Hospitality Services
Early times
Inns
First hotels
and restaurants
Hotel innovations
accommodations sector continued to take place in the United States.
American hotelier E.M. Statler was among the first to upgrade the guest
experience by offering larger guest rooms with private baths, running
water, light switches, telephones, room service, in-room radios, and hotel-
to-hotel reservations systems. Further innovations in American hotels
included central heating, air conditioning, passenger elevators, electric
lighting, and sewage disposal systems. These innovations were quickly
adopted by international hotels (Gee, 1994, p. 28).
4.3 Accommodations Classification
Worldwide, the number of hotels is increasing rapidly, and in 1994, it
was estimated that there were over 11 million rooms generating revenues
of nearly U.S. $250 billion (International Hotel Association, 1996, p. 12).
The accommodations sectors in Europe and North America are
considered the largest and the most mature, followed by East Asia and
the Pacific which has had the fastest expansion in the last decade. Yet
there is ample room for growth in many of the emerging markets in other
regions including South Asia, the Middle East, South America, Africa,
and countries of the former Soviet Union (see Table 4.1).
71
Accommodations Classification
Source: International Hotel Association.
Note: * The European Economic Area includes European Union
and European Free Trade Association countries, except Switzerland.
Number of Hotels Number of Rooms
Africa 10,759 343,347
Caribbean 5,290 155,253
Central America 1,160 41,221
North America 66,943 3,738,977
South America 14,578 487,787
Northeast Asia 10,192 719,480
Southeast Asia 13,211 453,657
South Asia 3,663 159,417
Australia/Pacific Islands 10,082 229,319
Middle East 4,735 162,178
European Economic Areas* 151,945 4,242,193
Other Europe 19,178 676,631
WORLD TOTAL 307,683 11,333,199
Table 4.1: Hotels Worldwide
Hotel numbers
and growth
prospects
Accommodations can be classified into various categories, illustrating the
diversity of the industry. The wide array of available room types and
amenities is a reflection of an industry that must respond to various
consumer needs, including the social and business needs of the travel
market. Any attempt to establish a uniform classification system faces
problems of differing types of accommodations around the world. It might
be unlikely to find a pousada (Portugal), an auberge (France), or a ryokan
(Japan) in the United States, yet such accommodations are common in
their own countries. As early as 1962, the International Union of Official
Travel Organizations, a forerunner of the World Tourism Organization,
attempted to establish a globally uniform hotel classification system.
Various attempts have been made since then, but the obstacles to a uniform
classification system include variations in definitions, facilities, service
standards, management, and cultural influences on service which can
differ dramatically from country to country (Gee, 1994, p. 391).
What has emerged are different systems developed by countries and
regions around the world, through the efforts of the private sector as well
as governments. Nations which embark upon tourism usually as an
economic activity to attract international travelers have recognized the
advantages of a classification system that tourists will understand. Many
have official, government-initiated classification systems which have been
developed and widely used in the European Union countries based on both
physical and qualitative criteria. In other countries, classification systems
have been established through private sector efforts especially through
commercial services such as Guide Michelin, AA Britain, and the
American Automobile Association (AAA). The private sector
classification systems have the support of the hotel industry largely
because the industry often views the classifications and ratings as more of
a promotional feature, which can be used in marketing campaigns. While
many of the definitions used are similar in a global tourism market place,
there are differences among countries between commercial and official
classifications. Table 4.2 illustrates a comparison of hotel classifications.
4.3.1 Hotels
The term hotel has assumed a generic meaning around the world,
applying to a wide range of property types. There is no one way to
classify the different types of hotels that exist. In the United States, the
key to the propertys type is based on its amenities identified by the
descriptor preceding hotel. In general these descriptors identify the
target markets that the property aims to attract such as airport hotel,
convention hotel, commercial hotel, luxury hotel, budget or economy
hotel, casino or resort hotel. Some subgroups within hotels include:
72
Chapter 4: Accommodations and Hospitality Services
Diversity
Classification
difficulties
Governmental
and private
classification
systems
Defining "hotel"
7
3
A
c
c
o
m
m
o
d
a
t
i
o
n
s

C
l
a
s
s
i
f
i
c
a
t
i
o
n Source: Adapted from Gee, International Hotels, Development and Management, p. 407.
France Guide Michelin U.S. AAA Israel Official U.K. Official Spain Official
Type of Classification
Scheme
Inclusion at the discretion of
Michelin
Inclusion at discretion of AAA compulsory voluntary compulsory
Basic Criteria of Scheme
structural and operational
requirements; quality
facilities, maintenance,
service
physical features, quality of
service
structural & operational
requirements; quality
optional
depends on regional
authority
Symbols Used for Grade
Bands
System Administered By Michelin AAA Ministry of Tourism
national tourist boards
through regional tourist
boards
relevant regional community
authority
Type of Monitoring anonymous inspections
annual evaluations;
over-night stays for high
rated properties
anonymous inspections
every 1-4 years
questionnaires, inspections
unregulated & dependent on
regional policy
System Funded By Michelin; sale of guide books AAA; membership dues government
hotels with government
subsidy
government
Hotel Classification System
includes
select hotels select hotels, motels all hotels all forms of accommodations
all forms of professionally
serviced accommodations
5 houses
4 houses
3 houses
2 houses
1 house
5 diamonds
4 diamonds
3 diamonds
2 diamonds
1 diamond
5 star deluxe
5 stars
4 stars
3 stars
2 stars
1 star
5 crowns
4 crowns
3 crowns
2 crowns
1 crown
listed
5 stars
4 stars
3 stars
2 stars
1 star
Table 4.2: Selected Classification Systems
Airport hotels: Located within ten miles of an airport with amenities
for the air traveler including facilities for business meetings.
Convention hotel. Located in major cities, often near a municipal
convention center. Major space dedication to meetings and
exhibition area. Amenities for meetings and business travel.
Commercial hotels. Located in urban areas with business travelers
as the primary target market, usually upscale or midscale.
Suite hotels. Apartment-style hotel rooms, generally offering more
space and upscale amenities.
Motor hotels. Located close to a highway for automobile travelers
with provisions for parking and amenities which may include
swimming pool, coffee shops, and other family-oriented facilities.
Hotels differ by amenities and the levels of service offered. At the
lowest level, budget motels tend to focus on cost-conscious travelers as
their target market. The overall goal of these establishments is to keep
costs down and pass the operational savings on to the customer. The
limited amenities offered vary from chain to chain, each attempting to
establish a price-value relationship in the consumers minds.
4.3.2 Resort Properties and Time Shares
Resorts are found worldwide, wherever people gather for activities as
diverse as golf, tennis, spas, skiing, or a combination of similar
recreational activities.
Because the resort guest is typically a longer stay client, resort
properties generally offer more activities and extended amenities than
urban hotels. Although many resort properties are surf-and-sun
destinations, resorts today are becoming more specialized. Theme
parks, such as Disney World in the U.S., have capitalized on the resort
concept by making these facilities a part of the entire Disney
experience (Berkowitz, 1980, p. 114).
The one-stop destination pioneered by Disney continues to expand around
the globe. Singapores Sentosa Island, for example, is a popular attraction
featuring a resort hotel and rides and attractions. Although the
accommodations element is a core facility, restaurants, shops, and attractions
are all part of one operation. Expansion into these ventures may be done
more along the lines of alliances and partnerships than ownership, but
destination resorts will continue to grow as the industry increasingly views
itself as part of broader industries, namely recreation and entertainment.
74
Chapter 4: Accommodations and Hospitality Services
Budget motels
Hotel as part
of attraction
75
Accommodations Classification
Defining
"time shares"
Casinos with
theme resorts
Time shares, like resorts, tend to be located in popular tourist
destinations. Time shares basically are individually owned hotel room
intervals which allow the owner to access generally upscale
accommodations for a usually fixed period of time each year. The
attraction of time share accommodations is that they tend to be more
apartment style and may be a part of a hotel, resort, or condominium.
The arrangement is a permanent one unless the ownership share in the
property is disposed of. Increasingly, the properties are managed by
specialized management companies including several major
international hotel management organizations such as Marriott, Hilton
Hotels Corporation, and Disney (Travel and Tourism Intelligence, 1997).
4.3.3 The Casino/Destination Property
Perhaps no single city has had a greater impact on the casino lodging
industry as Las Vegas, Nevada in the United States. The casino has long
been recognized as a specialized property with gaming as the central
activity, but in the past decade Las Vegas has spawned a new type of
lodging which is a combination casino and destination property, not to be
compared with the casino hotels of Monte Carlo wherein Monte Carlo,
rather than the hotel, is the destination. This hybrid is often considered a
variation of the theme resorts developed by the Disney Corporation. The
concept has been used successfully elsewhere as in Sun City in South
Africa, which is a well-known international destination which offers
casinos, golf courses, a jungle theme park, and other entertainment
attractions as part of the large resort complex. These properties function
to a large degree as self-contained destinations which attempt to keep the
guest, including family members, at the property as much as possible. To
accomplish this, the resorts include extensive amenities and generally
some type of theme park which is part of the property. Although gaming
remains central, the extended amenities serve to capture more of the
tourist expenditures from all members of the family unit.
4.3.4 National Heritage Accommodations
In many countries, historic buildings and structures such as palaces, castles,
chateaus, monasteries, and convents have been converted to hotels. Some
are privately run but others are part of a government-run chain such as the
Parador hotels in Spain which are popular with both international visitors
and Spaniards. Paradors are usually four- and five-star accommodations
which have been modernized within but maintain their historical exteriors.
They are often furnished with art treasures, antiques, or reproductions, and
have reputations for good service and meals.
"Paradors"
4.3.5 Bed and Breakfasts
This segment of the accommodations industry has grown steadily over
the years and is now made up of thousands of privately owned homes
and inns around the globe. Bed and breakfasts (B and Bs) run the
gamut from luxury to economy-type accommodations. Today, the
business of B and Bs has become more highly organized with many of
the properties joining international reservations systems. Other modest
establishments which offer breakfast and sometimes light meals
include hostels and pensions which are often family-run operations.
4.3.6 The Emergence of the International Hotel
Historically hotel companies first focused on their own region and
within their continental boundaries. However, as international travel
increased in the late 1950s, more and more hotels began to look at
expansion into international markets. One of the major catalysts in the
international hotel development arena was the former Pan American
Airlines. As air travel developed, Pan Am discovered that many
locations did not have adequate hotel accommodations. In order to
better serve international travelers, Pan Am formed the Inter-
Continental Hotels Corporation (IHC) as a wholly owned subsidiary in
1946. Soon there after Pan Am acquired its first hotel in Brazil in 1949
(Gee, 1994, p. 30). Inter-Continental Hotels and others were
established with the international business traveler as a primary
market, and this segment remains important representing
approximately 60 percent of Inter-Continentals sales. Other airlines
followed the Pan Am example including United Airlines which merged
with Westin Hotels and Resorts in 1978. Although United Airlines has
since divested itself of hotel ownership, many major airlines of the
world continue with either ownership or arrangements to promote
certain hotels through their reservation systems such as Japan Airlines
with its international network of affiliated Nikko hotels. Although the
hotel market generally is dominated by U.S. multinational corporations
and chains, European chains such as Forte PLC, Club Mediterranee,
Accor, and Meriden, and Asian chains such as the Taj Group, Oberoi,
and the Mandarin-Oriental hotels have properties on more than one
continent. Table 4.3 lists the 20 largest corporate chains in the world.
4.3.7 Financing of International Hotels
The globalization of the business community has had noticeable
impacts on the financing of international hotels. Increasingly, financing
sources have come from non-domestic and non-traditional sources, and
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Chapter 4: Accommodations and Hospitality Services
Private homes
Airlines'
associations
with hotels
foreign borrowing has become more common (Gee, 1994, p. 127).
Many governments in developing countries have developed incentive
packages to lure needed hotel and resort development. Such incentive
packages often include government participation, reduced or deferred
taxes, or assistance in securing investment capital. Many developing
countries have also established governmental agencies to assist foreign
investors deal efficiently with other governmental agencies and permits.
77
Accommodations Classification
Source: Somerset R. Waters, Travel Industry World Yearbook,
The Big Picture 1995-96, p. 144.
Rank 1994 Organization
Company
Headquarters
Rooms 1994 Hotels 1994
1 Hospitality Franchise Systems USA 424,352 4,291
2 Holiday Inn Worldwide USA 356,000 1,930
3 Best Western International USA 280,144 3,409
4 Accor France 256,607 2,265
5 Choice Hotels International USA 247,069 2,827
6 Marriott International USA 180,500 851
7 ITT Sheraton Corp. USA 132,477 425
8 Hilton Hotels Corp. USA 92,452 226
9 Forte Plc England 88,153 888
10 Carlson/Radisson/SAS USA 79,482 349
11 Promus Cos. USA 78,690 570
12
Hyatt Hotels/Hyatt
International
USA 77,882 170
13 Club Mediteranee SA France 65,128 262
14 Inter-Continental Hotels England 53,092 141
15 Hilton International England 53,052 162
16
New World/Renaissance
Hotels
Hong Kong 47,139 140
17 Grupo Sol/Melia Spain 46,500 175
18 Westin Hotels & Resorts USA 39,470 76
19 La Quinta Inns USA 29,276 227
20 Societe du Louvre France 29,120 468
Table 4.3: Corporate Hotel Chains, 1994
Financial institutions worldwide at the same time have become more
conservative in their approval of hotel and resort loans. Part of the reason
has been oversupply conditions in several world markets in recent years
which have resulted in loan defaults. Lenders today typically require
market feasibility studies and reports as part of the loan request process.
Other major considerations by lending institutions are the expertise and
reputation of the management company that will operate the property,
often with performance guarantees as part of the management contract.
Developing
countries
Loan approvals
4.4 Food and Beverage
Establishment Classification
Like the accommodations sector, food and beverage establishments can
be subdivided into many segments. However, unlike the accommodations
sector, a large part of the food and beverage sector is not related to the
travel industry. These include major sectors such as institutional food
service in schools, colleges, and hospitals, military food service, and
other establishments. The segments which are interrelated with the travel
industry are commercial establishments which are primarily or partially
tourism dependent based on their location, clientele, and seasonal traffic
(Gee, Makens, & Choy, 1989, p. 324).
In terms of total tourist expenditures, money spent on food and
beverages is second only to airline transportation in terms of vacation
costs. Food away from home is conservatively estimated at 18 to 20
percent of all tourist expenditures. However, it would be difficult to
determine the percentage of sales attributable to the travel industry
since food and beverage revenues are usually generated in restaurant
establishments by both visitors and residents in the community.
Food and beverage outlets are more sensitive to economic cycles than
most other types of retail businesses and typically have high mortality
rates. A restaurants profit margin is based on its ability to control food
and labor costs, which may run as high as 60 to 65 percent of revenues
while the ratio of profit to sales is very low. In the host economy, it is also
important to consider the relationship with local suppliers of food and the
availability of produce. For example, if food and beverages need to be
imported to any great extent, much of the economic benefit gained by the
industry will be lost due to leakage of revenues to pay for the imports.
4.4.1 Hotel-Related Food Establishments
Establishments which are tourism dependent are often owned and
operated by a hotel, or located in space leased out to independent
restaurant operators by hotels. Hotels may offer a variety of outlets
including restaurants, dining rooms, coffee shops, room service,
catering, and banquets. They also offer a variety of meal plans.
Although the percentage of hotel income from food and beverage sales
has gradually declined in the U.S. owing to changes in customer
preferences and eating and drinking habits, full-service international
hotels averaged approximately 30 percent of their revenues from food
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Chapter 4: Accommodations and Hospitality Services
Non-tourist
industry
Economic factors
Hotel eateries
79
Food and Beverage Establishment Classification
and beverage sales in 1994 (PKF Consulting, 1994, pp. 5, 58). In some
locales such as Singapore and Hong Kong, food and beverage sales are
as high as 50 percent of hotel revenues.
4.4.2 Independent Food Service Establishments
Many independent food service establishments rely on tourism
business as well as local trade. These establishments may be
individually owned and operated, part of a corporate chain, or a
franchise. The vast majority of franchisees are fast-food outlets serving
foods like hamburgers, pizzas, or fried chicken. Franchised restaurants
are expanding worldwide such as the U.S.-based McDonalds and
Mvenpick in Europe. Mvenpick began in Zurich, Switzerland in
1948 and expanded into international activities in 1968. Since then it
has expanded its operations to include packaged food products as well
as hotels in countries in Europe, the Middle East, and Asia.
Another major food service segment within the travel industry is
transportation-related. Airlines, for example, spend billions of dollars
each year on food and beverage purchases for inflight service. Some
carriers have their own ground commissaries with secured and bonded
areas for duty-free liquor; others contract out their food service with
commercial caterers. In the U.S., the latter has become the more common
practice while in Europe and Asia, carriers prefer to operate their own
kitchens in order to emphasize the importance of onboard dining.
Onboard food and beverage service is also a hallmark of sea cruises,
which typically offer meal service around-the-clock, constituting one of
the highlights of the cruise experience. With the revival of the legendary
Orient Express in Europe and the Orient Express on the E & O lines
traversing Singapore, Malaysia and Thailand, the glamour of luxury train
travel during the 1920s and 1930s has been restored, a major part of which
is based on outstanding dining cars and impeccable service.
4.5 Hotel Guests
Hotel guests are divided into two general market segments, one being
travel for business or government, the other for pleasure or leisure
travel. As travel often straddles business and leisure, it is not always
easy to differentiate the two categories. Business travelers worldwide
are more likely to stay in urban hotels and use a higher percentage of
upscale services than pleasure travelers, but this depends on the nature
of their business, the type of companies they work for, the positions
Transportation
food service
they hold, and purpose of their trips. Some may be quite cost-conscious
while others may be on liberal expense accounts. As such, business
travelers are found in all price levels of the hotel business. To cater to
the needs of business travelers, hotels have provided business-related
amenities such as in-room computer connections and business centers
in hotels. These centers offer such services as photocopying and fax
machines, desktop publishing software, computer work stations, laser
printers, video conferencing capabilities, and clerical staff on call. In
contrast, it is estimated that about 40 percent of worldwide demand for
hotel rooms, especially within the resort category, fall into the leisure
or personal travel markets. The leisure markets are highly segmented
by lifestyle are often more sensitive to economics, political situations,
and price-value relationships. In general, the hospitality industry has
found that these market segments tend to react positively to packaged
travel, loyalty awards, and other travel incentives.
4.6 Food Service Clientele
Food service clientele in the travel industry are as varied as the general
population. Cultural or national characteristics generally dominate taste
preferences, especially at breakfast when people want familiar foods to
start their day. For example, Asian travelers may prefer a rice porridge,
noodles in broth or dumplings, while Americans may want pancakes or
ham and eggs and Europeans, bread rolls and espresso coffee as the
breakfast meal of choice. Many restaurants will cater to these diverse
tastes, while others may feature local cuisine as part of the attraction of
the locale. International hotels generally attempt to accommodate
guests with different lifestyles and tastes, adapting their menus and
dining styles to reflect these multicultural needs. Others emphasize
menus and dining styles which are authentic in terms of their cultural or
ethnic origin and reflect the location of the hotel (Gee, 1994, p. 359). It
would be difficult to characterize the clientele of food and beverage
services even among hotel guests, as many factors influence the choice
of restaurants, including cost, time of day, convenience, menu and style
of service. The guest who might choose the hotel coffee shop for
breakfast, may eat lunch at a fast-food outlet while sight-seeing during
the day, and have dinner at the hotel dining room or an outside specialty
restaurant. Moreover, many hotels and restaurants also include a sizable
local resident component in the use of their dining facilities.
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Chapter 4: Accommodations and Hospitality Services
Business and
leisure guests
Diversity in
choice and
reasons for
choosing
4.7 Ownership and Management
of Accommodations
It is important to understand that hotels are managed and operated under
different systems around the world. There are many models, including:
Independently owned and operated properties.
Properties that are independently owned and operated with chain
affiliation.
Chain-owned and operated properties.
Independently owned, chain-operated properties.
Franchised properties.
Referral group properties (Gee, 1994, p. 14).
Independently-owned and operated properties outnumber chain-
affiliated properties, but in terms of number of rooms, hotels owned and
operated by chains are dominant worldwide. In different parts of the
world, expansion has taken place differently. In Asia, equity investments
are preferred, whereas in North America franchising and management
contracts tend to be more popular. In reality, there are many
combinations and arrangements for managing hotels. In each system or
arrangement, there are benefits and disadvantages to the owners and
managers. In terms of management arrangements, properties may be
company-owned, part of a franchising system, or managed by contract.
4.7.1 Company-Owned and Operated Systems
In this system, the property is owned by an individual or a company
which can be a chain with multiple properties. The general advantages
of this system are:
The owner has independence.
There is more flexibility with decision making and thus decisions
are often reached more quickly.
Direct ownership allows the owner major, if not full, control of the
operating policies and procedures.
Since the owner and manager are the same, this individual or entity
obtains the full benefits of the profits.
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Ownership and Management of Accommodations
Chains dominate
The disadvantages in an owner-operated system can include:
The owner has the full risk. In international settings, this can cause
problems in unstable political environments.
When there is only one or a few properties, the reservations and
referral system may not be adequate.
It is often more difficult to obtain capital for growth, especially if
the chain is small.
4.7.2 Franchising
A franchise is an arrangement in which the owner of a trademark,
tradename or copyright licenses others, under specified conditions or
limitations, to use the owners trademark, tradename or copyright in
providing goods or services. Hotel franchising comes in many forms,
but the basic premise is that the owner remains in control of the
management and the property, yet has the advantages of a large chain in
terms of trademark or tradename and marketing outreach. Most
franchise systems are set up with the owner of the property, known as the
franchisee, obtaining the right to use the name and to be part of the
national or international chain, belonging to the franchiser. Rights given
to the property owner include exclusivity of franchise rights to areas
defined by the franchiser. Under contract, the franchisee agrees to abide
by the operating policies and practices as defined by the franchiser in the
agreement. In general, the franchisee will agree to pay a fee and in most
cases some percentage of gross sales as defined by the specific contract.
In general, the advantages to the franchise system for an owner include:
The right to use the brand name.
Being part of a reservations system which has international access.
The right to purchase supplies via the franchiser. In most cases this
will afford savings to the owner.
Professional managerial assistance. This is of obvious benefit to an
owner who may have limited experience in the hotel industry.
Among the disadvantages to the franchise system are:
The franchisee does not have complete management control. In general
the policies and procedures must be followed as set by the franchiser.
The franchisee must pay for the franchise rights and agree to pay
monthly fees.
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Chapter 4: Accommodations and Hospitality Services
Defining
"franchise"
The franchisee is tied to the franchiser and how the brand name
fares in the marketplace tends to affect all parts of the system (Gee,
1994, pp. 242-243).
4.7.3 Management Contract
This arrangement is favored in many international settings as it allows
a hotel chain to establish a presence often without the investment of
ownership. The management contract allows for the separation of
ownership and operation. With such an arrangement, the owners act as
investors who allow someone else to manage the property. The exact
arrangements vary greatly between chains and within chains. There are
numerous factors which come into negotiation in a specific
management contract. In general, the chain requires fees to be paid for
their management responsibility.
In the international setting, management contracts are used widely by
owners. Financial institutions and lenders have historically favored
management contracts because of the lower financial risk for properties
which are managed by experienced hotel operators. At the same time,
management contracts are a way for hotel companies to expand.
The management contract system affords the following advantages:
The investors are not required to become involved in the
management of the properties.
The brand name generally assists in the property marketing.
The management team is provided for the owners.
Financing is generally easier to obtain.
A management contract has the following disadvantages:
Certain fees must be guaranteed by the owners. Thus, the
operational risk falls more heavily on the owner than the chain.
Owners and chains often do not agree on daily management
practices. Generally the owners have less impact on operations than
the operator.
Chains operate by standard management practices. These are often
not flexible enough in international settings.
Management contracts often result in strained relations between
owners and operators. Perceptions and communications often are
stumbling blocks between both parties (Gee, 1994, pp. 230-241).
83
Ownership and Management of Accommodations
Separation of
owner and
management
Lower risk and
expansion
potential
A brief look at these three systems of management underscores the
varied issues of hotel management. There is no one type of
management arrangement that is best. The individual arrangements
that are agreed upon always involve the weighing of the advantages and
disadvantages for a given situation.
In recent years, the industry has seen the emergence of larger and larger
chains. Beginning in the 1980s many hotel industry companies have
sought to combine their resources to gain stronger positions in regional,
national, and international markets. The emerging mega-chains have
relied heavily on management contracts as one means of expansion, in
combination with buy-outs, acquisitions, mergers, and joint ventures.
Increasingly, a large percentage of rooms worldwide are in the hands a
few corporations who market to multiple market segments. Smaller
chains have also formed strategic alliances with the larger mega-chains
which has allowed many to survive in a competitive global marketplace.
4.7.4 Management Measures for Hotels
The hotel industry uses several key measures including room rates and
occupancy ratios to evaluate the business success of individual
properties and chains. These standard measurements are used by
financial institutions and worldwide consulting organizations to hotels.
Hotel Rates
Hotel rates can be one of the most confusing parts of hotel operational
analysis. The officially assigned rate for each type of room in the property
is called the rack rate. In reality, hotels have dozens of rates that are
discounted off the rack rate. The rack rate, which is based on the
investment cost and required revenues to cover fixed and variable
operating costs, is generally the highest rate charged for a room.
Discounted rates are part of the marketing plan to attract various market
segments. Discounted rates can be offered to such groups as government
employees, members of the military, tour groups, senior citizens, and
many others. The most important measure regarding hotel rates is the
average daily rate (ADR), which is calculated by dividing the total room
revenue by the number of rooms occupied. Thus, heavy discounting will
result in a lower ADR. In recent times, the ADR is more often referred to
as sales per room occupied. The need to generate sufficient sales to get
beyond the breakeven point has been a major factor in discounting by
hotel management. Progressive hotel operators today use forms of yield
84
Chapter 4: Accommodations and Hospitality Services
Mega-chains
Standard rates
and discounts
management in room rate allocation. Yield management concepts were
pioneered by airlines attempting to maximize the passenger revenue per
seat mile, and the basic concept has been adapted to room sales by the
hotel industry. A main goal in yield management is to get the maximum
rate for each room given the existing demand at a given point in time. All
discounted rate programs are reviewed in relation to the room supply and
demand analysis. Airlines and hotels realize that airline seats and hotel
rooms cannot be inventoried. Hence, any unsold airline seats or hotel
rooms will perish once the day ends.
Occupancy Rate
The occupancy ratio or rate is as important an indicator of profitability
as is the ADR. The occupancy rate is calculated by dividing the number
of occupied rooms by the number of rooms available for sale. Thus, if the
hotel has 300 rooms available for sale, and 200 rooms are occupied, the
occupancy rate is 67 percent. Hotels rarely operate at 100 percent
occupancy for an entire year, and depending on its ADR, may need as low
as 50 percent or as high as 80 percent to achieve profitability. As a general
rule, hotels require at least 65 percent occupancy for profitability.
There are many variables that affect the level of hotel occupancy. It is
important to know the occupancy rate of the hotel, but knowing how
many people were in the rooms is another important factor. Multiple
occupancy tends to increase the revenue for a hotel property. There are
other variables such as the rate charged, but in general the higher the
percentage of double occupancy the more revenue. As mentioned
earlier, rates charged for rooms vary from the rack rate in accordance
with marketing programs. The average rate per room occupied is an
indication of discounting and multiple occupancy in the property. A
Higher average rate per room will be achieved when there is less room
price discounting and when there are more guests per room.
Other Revenue and Cost Concerns
Although there are hotels which still provide rooms only, most properties
and property types have other sources of income that become part of the
revenue and cost picture beyond hotel rooms. Worldwide, room revenue
does account for well over half of total hotel revenue but other sources of
revenue are also significant. In 1993, room revenue accounted for 59.8
percent of the total hotel revenue flow while food and beverage revenue
accounted for 30.4 percent of the total (PKF Consulting, 1994, p. 5).
85
Ownership and Management of Accommodations
Occupancy
needed for
profitability
Guests per room
Room revenue
Hotel food and beverage revenue come from a variety of outlets
including coffee shops, buffets, fine table service, room service,
catering, and banquets. Hotels also offer a variety of meal plans. The
American plan (AP), also known as full pension in Europe, means that
all meals are included in the hotel room rate. Ironically, this rate is not
often used in American hotels except perhaps for resorts where it may
assist in marketing value vacation packages. By contrast, the European
plan (EP) normally provides no meals. This is the plan that is most
common in North American hotels, as opposed to the American Plan.
There are many variations to these two basic plans. The Bermuda plan
normally includes some type of breakfast. The modified American
plan (MAP) normally includes breakfast and dinner but not lunch.
While room and food and beverage revenues comprise the primary
sources of income, labor is the industrys single largest cost. In terms
of hotel operations, food and beverage is the highest labor cost area
followed by rooms (PKF Consulting, 1994, p. 58). Certainly any
analysis of revenue and costs needs to be done by country and region,
as many country-specific economic factors must be considered. Hotels
are learning that attention to food service can be a good source of
additional revenue, as many hotels have attempted to increase their
revenue from food and beverage while keeping the expenses associated
with food and beverage fairly constant.
4.7.5 Food Service Management
and Operations
Independent restaurants commonly owned and operated by individuals,
partnerships, or families are found worldwide. Because of the low ratio of
profit to sales, however, restaurants are especially susceptible to failure,
with the majority going out of business within five years (Coltman, 1989,
p. 23). Because the profit margin of a food outlet is dependent on food and
labor costs, a number of critical factors need to be considered in managing
and operating a restaurant. Since much of the success of a restaurant is
dependent on the menu, menu planning is basic to a restaurants success.
The menu is important not only in attracting customers, but also influences
the financial investment that is needed to start a restaurant since the menu
can dictate the needed equipment, food costs and labor costs. For example,
a fine dining facility will require staff that is trained to prepare as well as
serve food, and may involve other costs such as uniforms for the wait help.
In contrast, a fast-food outlet or a cafeteria would have a limited menu,
fewer staff, and less need for staff or space.
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Chapter 4: Accommodations and Hospitality Services
Meals included
in rate
Hotel's cost
Restaurant
success
Corporate-owned restaurants with multiple outlets or franchises also
have additional advantages in terms of cost-savings that individually-
owned restaurants do not. These include cost savings that may come
with limited menus, greater purchasing power and better market
penetration through organized marketing efforts. For fast-food outlets
especially, franchisers provide training to teach operators ways to
control food cost through strict portion control, inventory control,
avoidance of waste and controlling labor costs by standardizing
procedures and emphasizing continuous training on the job.
4.8 Hotel Operations
4.8.1 Reservations
Although direct individual hotel reservations still account for more than
one-third of all hotel bookings, technology is rapidly changing these
reservation patterns. The worldwide, toll-free reservation systems and
computers and the Internet are making it easier for individuals to arrange
their own travel. Increasingly, hotels are part of reservation systems that
link hotels by some common affiliation. The airlines computer
reservation systems (CRS) are becoming interactive as travel companies
invest in the hardware and software to link the systems together resulting
in airlines, travel agencies, car rental companies, and hotel chains
offering easy access to travelers. The CRS have increasingly evolved into
global distribution systems (GDS) which link all parts of the distribution
system electronically. In the future, clients will be able to view pictures
and tour the property before a reservation is placed, and the worldwide
reservation system that is currently emerging will become a major force
for change in the lodging industry.
4.8.2 Marketing
Marketing the hospitality facility today must be viewed in terms of a
global market. The reservations systems are a vital part of that marketing
system. But todays hospitality operator faces a more complex
marketplace. National tourism administrations (NTAs) are also important
to the hotels in international marketing since they usually work with the
local travel entities such as travel agents, travel wholesalers, and
convention planners in large-scale promotions. The NTAs normally have
a great deal of marketing information regarding major buyers that is of
great value to hotels. Decisions to advertise to segments must be viewed
87
Hotel Operations
Advantages to
franchise
restaurants
Customer's
computer use
International
marketing
in terms of markets, values, and cultural attitudes. The international
marketing strategy of today requires that hotels also understand the role
of travel intermediaries in predicting potential business.
One of the most important aspects of marketing for hotels is the travel
distribution systems discussed in Chapter 5. It is important for the
hotel operator to know how the products and services are sold to the
ultimate buyer. In the United States, it is common for the travel agent
to play a major role in the purchase of travel to foreign destinations. In
Japan, travelers tend to be influenced by a handful of large tour
operators while other Asians and Europeans tend to shop many sources
for travel information before booking. The success of hotel marketing
often will ultimately depend upon the relationship a hotel has with the
appropriate and critical intermediaries.
Hotel positioning also remains important in global marketing. Positioning
is the way hotels differentiate themselves in the marketplace. Some hotels
are positioned according to their price-value, such as economy or budget,
moderate, or luxury; others, by the type of property such as resort, spa,
casino, condominium; still others by the type of service provided,
including conferences, conventions, and bed and breakfast. Hotels today
must use detailed market segmentation tools to make certain that their
positioning in the marketplace is communicated to the potential client.
Given that it is the consumer who ultimately identifies the position of the
product in the marketplace, the competition between hotels helps to
define the position of the hotel in the broader marketplace.
Advertising, promotion, public relations and personal selling are
equally important marketing tools for the hotel. These are the ways that
the messages get to the potential markets the hotel is seeking. The
selection of the correct media is not an easy task. There is a vast array
of communication media available including newspapers, television,
radio, the Internet, and trade publications. These choices are further
complicated by the fact that different cultures have different
interpretations of various media and different media habits.
Sales promotions are activities other than advertising, publicity, and
personal selling. These can include a variety of special programs such as
postcards, brochures and posters. One of the important promotions for
global hotel marketing is the use of cooperative promotions or
cooperative marketing. These include programs where the hotels
cooperate in marketing a destination by pooling their marketing dollars.
The positive effects are that these programs normally enlarge the pool of
visitors to a destination, and thus tend to benefit all hotels in the region.
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Chapter 4: Accommodations and Hospitality Services
Travel
agent's role
Positioning
Marketing tools
and promotions
Personal selling has long been important to the hotel industry. This
involves direct contact of the sales force of the hotel with the potential
client. These activities extend to direct contact with members of the travel
trade. Personal selling tends to be effective but expensive. Combined with
the expense is the reality that selling services in cross-cultural settings
presents more challenges since in the international arena, the sales person
must understand cultural patterns as well as the language.
4.8.3 Hotel Staffing
The staffing needs for hotels range from executive level positions such as
general managers to unskilled positions at lower levels. Jobs such as
resident manager, front office manager, director of sales, catering
manager, reservations clerk, housekeeper, doorman, chef, kitchen helper,
and laundry worker represent only a few of the many levels of employment
in hotels. International hotels may face additional challenges in the human
resources area at all personnel levels. A new destination, for example,
often does not have either the trained labor force for upscale properties or
local management expertise. It has long been a custom of international
hotel chains to recruit experienced managers beyond national boundaries.
These expatriate managers bring with them the required hotel education
and training. At the same time, ideally these individuals must have the
ability to understand and work in the local culture. The successful
expatriate manager can often help in the development of middle
management recruited and developed from the local labor force.
Equally challenging for the international hotels is having an adequate
labor force. In general, an adequate labor supply for the hospitality
industry is a global problem. The service industry also has historically
been one of compensation based on a mix of pay (on the low side) and
perquisites (on the high side), long hours, and high turnover. In the
international setting, the rules of hiring, supervising, appraising,
disciplining and training a hotel staff are also influenced by the local
culture. For the international manager, there are often no clear-cut
guidelines and success has often come through adaptation and
integration of prior experiences with locational realities, different
approaches based on local advice and best judgment.
4.8.4 Use of Technology
The accommodations industry has often been criticized for lagging
behind other industries in the adoption of technology. In the past
decade, however, the lodging sector has adopted technologies at a fast
89
Hotel Operations
Personal selling
Labor levels
Labor force
challenges
pace led by the major chains. In hotel operations, technology today
spans from the front of the house to the back of the house. Computers
handle reservations and room assignments and assist with security
surveillance and key control. In the hotel kitchen, computers record
orders, manage inventory and even automate some cooking functions.
Indeed, virtually every part of the property involves the use of
computer technology in one form or another, whether information or
robotics. Technology increasingly free up employees so that they can
provide more personalized service to guests.
Computer reservations systems (CRS) for the lodging industry continue
to expand and grow with advances in technology. A hotel chains CRS
may now be linked with the home computer. These systems turn the
reservation systems into a marketing vehicle for global distribution of the
chain recording demographics, guest histories, and related information.
Some hotel systems handle not only the CRS function, but virtually
connect the entire property on one system. Functions include telephones,
inventory, payroll, and energy systems that control air conditioning, light
and power. Todays traveling public, especially business travelers, also
expect to find communications technology available in their rooms as an
extension of their office away from the office.
4.9 Travel industry Linkages
For tourism to succeed, the hospitality sector must work together with
other segments of the travel industry. Over the years, the
accommodations industry has learned to work with various industry
segments such as airlines, travel agencies, and tour operators to assist
in the marketing of the destination. During low season especially, joint
promotions of special value tour packages involving the cooperation
and contributions of different members of the travel industry,
cooperative marketing campaigns, and travel agencies familiarization
trips all help to fill rooms and airplane seats.
4.9.1 Marketing Partnerships
Working as partners in travel, many major hotels and airlines offer awards
that reward consumers for using specified hotels and air carriers. These
arrangements have now expanded to rental cars, attractions, and upscale
restaurants. The various award programs vary considerably within the
industry. Frequent flyer miles and frequent stay point awards at hotels are
very common. In addition, there are programs which reduce the price of
rooms off the rack rate or the standard room rate by offering free
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Chapter 4: Accommodations and Hospitality Services
Working together
Award programs
The many uses
of computers in
today's hotels
accommodation for every two or more paid nights. The various programs
are often confusing to both the consumer and the travel agents as programs
are continually modified. These programs, nevertheless, generally build
important partnerships within the industry and often develop important
consumer brand name loyalties (Kaiser & Helber, 1987, p. 179).
4.9.2 Hospitality-related Industry Organizations
In many countries, the members of the hospitality industry have
organized business or industry organizations which provide a variety of
services to their members. Among the services common to all such
organizations is an organized approach to promoting the use and
development of hospitality facilities and services for the traveling public.
These organizations attempt to help negotiate favorable laws and
regulations that affect the hospitality industry and tourism in general.
They may also play a valuable role in the resolution of conflicts that may
result from differences in goals and objectives with the public sector.
For example, the American Hotel and Motel Association (AHMA) is a
federation of hotels and motels whose membership accounts for well
over 50 percent of all hotels and motels, and in terms of revenue reflects
over 80 percent of the revenue for the entire U.S. hotel industry. The
AHMA works for favorable laws that affect the industry including such
issues as taxation, liability, and advertising. Other regional and
international organizations which represent the lodging sector include
the European Motel Federation in the Netherlands, the International
Hotel Association in Paris, France, the International Organization of
Hotel and Restaurant Associations in Zurich, Switzerland, and the
Caribbean Hotel Association in Puerto Rico. Specialized sectors of the
lodging industry also have organizations to represent them such as the
International Youth Hostel Federation and the Bed and Breakfast
Reservation Services World Wide.
SUMMARY
The hospitality industry, representing the accommodations industry
and the food and beverage sector, comprises a major part of the global
tourism industry in terms of revenue and employment. The growth in
global tourism has resulted in many changes to the accommodation
and food service industry in recent years. Hotels and restaurants have
increasingly become part of national, regional and international chains.
Franchising has been used extensively in the accommodations industry
as well as the food and service industry, which allows a more rapid
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Travel industry Linkages
Promotion of use
and development
Different
organizations
penetration of the marketplace. However, the bulk of the global food
service industry will likely remain with independent restaurants, where
the customer seeks a special or different dining experience. New
technologies, demographic changes, and economic and political shifts
will continue to impact the management and operations of hotels and
food outlets in the next century.
DISCUSSION QUESTIONS
1. What factors have contributed to globalization of the lodging industry?
2. What are the sources of hotel revenue and what are the expenses?
3. What do ADR and occupancy rate mean?
4. List and describe the major classifications of hotels.
5. What are some of the major trends in the hotel industry?
6. What are the types of food service operations and how do they
differ according to the markets they serve?
7. What are some worldwide trends in the food service industry?
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CHAPTER 5
Travel Distribution Systems
Learning objectives
To understand the travel distribution systems and their services.
To differentiate the roles of tour wholesalers, tour operators, and travel
agents.
To understand the economics of tour wholesaling.
To be aware of the impact of technological change on the travel
distribution systems.
Key terms and concepts
commissions
computerized reservation system (CRS)
distribution systems - direct and indirect
electronic ticket delivery network (ETDN)
global distribution system (GDS)
group inclusive tour (GIT) or inclusive tour (IT)
Internet
land arrangements
satellite ticket printer (STP)
specialty channeler
suppliers
ticketless travel
tour operators
tour program
tour wholesaler
travel agent
travel intermediaries
5.1 Introduction
We usually associate a product with its production and consumption
stages, often overlooking an intervening process which moves the
product from production to the consumption stage. This process is
called distribution. Theoretically, the distribution of the tourist
product resembles that of other industries. It involves the participation
of wholesalers, retailers, and other intermediaries or middlemen, all
responsible for bringing the product from the supplier to the consumer
in a sales distribution system. In practice, however, two factors make
the distribution of the tourist product unique. First, unlike agricultural
or manufactured products which can be transported to the consumer, it
is usually the consumer that has to be transported to the point of
consumption for the tourist product. For example, to enjoy the use of a
hotel room, a meal or a tour, the consumer must go to the destination.
Second, unlike tangible products with a shelf-life, the tourist product is
highly perishable. An unsold hotel room, meal or tour bus seat has no
income value in the marketplace the day after.
Collectively, these factors make the selling of the tourist product a
challenging task. Thus, in order to better understand the mechanics of
the tourism market and its economic significance, it is important to gain
a basic understanding of the sales distribution systems and their role in
influencing sales. This chapter describes the basic types of distribution
95
5
Travel Distribution Systems
Differences in
distributing the
tourist product
systems and explains the roles of travel intermediaries, including tour
wholesalers, tour operators, and travel agents. As an integral part of the
travel distribution process, the role of technological advancements and
their impact on travel distribution systems are also discussed.
5.2 Historical Background
Todays travel distribution system can trace its origins to the 1840s
when Thomas Cook, an Englishman, organized what could be called
the ancestor of todays tours. An ambitious entrepreneur and innovator,
Cook also introduced several types of tours including the first pleasure
tour to North America in 1866 and the first around-the-world tour in
1872. In the nineteenth century, tours were almost exclusively for the
upper classes, but Cook tried to reduce the cost of traveling by
chartering entire ships and booking blocks of rooms in hotels. In 1874,
Cook was also the first to introduce circular notes to be used by
travelers. These were accepted by foreign banks and hotels and relieved
travelers from carrying large amounts of cash. They were a simple
version of the travelers checks of today (Milne, 1991, p. 78).
Before the introduction of the travel agencies at the end of the
nineteenth century, it was common for hotel porters to make steamship
and rail reservations on behalf of hotel guests. Hotels usually were
built close to rail stations and ports where hotel porters were sent to
make reservations and bring back the tickets in return for a
commission by the supplier and a delivery charge from the client.
To compete with the railroads, commercial airlines starting operations
in the 1920s also used hotel porters as their agents, paying them a five
percent commission. Later, airlines began establishing their own sales
offices in hotels in an effort to avoid paying out commissions.
As international and leisure travel increased following World War II,
the travel agency business expanded rapidly. Tours also dramatically
increased in popularity with the introduction of jet aircraft in 1958. The
advent of wide-bodied planes in the 1970s further reduced the price of
air travel which increased the affordability of tour packages. The
demand for tours also expanded as the disposable incomes of people in
the U.S., Europe, and parts of Asia rose, and consumers became aware
of the advantages of buying a complete tour package instead of
organizing their own itineraries and bookings.
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Chapter 5: Travel Distribution Systems
Thomas
Cook's tours
The hotel
porter's role
Modern travel
5.3 Types of Distribution Systems
There are two broad categories of sales distribution systems, direct and
indirect, which involve different variations and combinations depending
on the number of intermediaries or middlemen used by suppliers in the
distribution pipeline. Suppliers include hotels, airlines, cruise ship
companies, car rental companies, railroads, and sightseeing operators.
While most of the suppliers are part of the private sector distribution
system, many destinations also have public sector distribution systems
in tourism. Some governments run travel agencies such as Saigontourist
and Vietnamtourist in Vietnam, railways, and hotels. African Tours and
Hotels Limited, for example, is a leading quasi-governmental hotel
management company which runs properties throughout Kenya. Each
of the systems offer advantages and disadvantages, depending on the
type of customers to be served.
5.3.1 Direct Distribution System
In the direct distribution system, sales are realized through direct
contact between the supplier and the customer without any
intermediary (see Figure 5.1). An example is a prospective traveler
who calls the reservation department of a hotel to book a room or who
walks up to the airline ticket counter at the airport to purchase a ticket.
The advantages of this method include:
Time Savings. There is a direct communication between the two
parties and the transaction is a simple one.
Increased Profits. Suppliers are not required to give a commission
to any middlemen resulting in greater profit per unit.
Flexibility. Direct communication with the supplier offers the
traveler the option to make possible changes in the itinerary. This
becomes more complicated or even impossible when, for example,
the traveler buys a tour package from a travel agent where the
itinerary is usually fixed.
Greater Control. For a number of customers, buying from the
supplier and confirming a booking directly provide a feeling of
comfort and security in the transaction. For the supplier, dealing
directly with the customer provides an opportunity for
recommendations and promotions of additional products.
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Types of Distribution Systems
Private and public
distributors
Without
intermediaries
9
8
C
h
a
p
t
e
r

5
:

T
r
a
v
e
l

D
i
s
t
r
i
b
u
t
i
o
n

S
y
s
t
e
m
s
Figure 5.1: Tourism Distribution Channels
OR
Customer Direct Provider
Indirect Provider
Travel Agency
Tour Operator
Tour Wholesaler
Specialty Channeler
Customer
Direct Provider
Hotel
Restaurant
Airlines
Theme Park
Retail Shops
Cruise Lines
Ground Transportation
There are also some disadvantages of the direct distribution system.
First is the high cost that the supplier faces in order to maintain a
permanent sales force. Another disadvantage is the possible reaction of
the dissatisfied intermediary, since the supplier attracts customers that
could otherwise be served by them. Finally, if the supplier uses this
distribution method exclusively, it risks losing an opportunity to
increase its revenues by selling to travelers who prefer to use an
intermediary (Collier, 1994, p. 198).
5.3.2 Indirect Distribution System
In the indirect distribution system, the supplier makes use of one or
more travel intermediaries in order to reach the consumer. For
example, a travel wholesaler can book a large number of rooms for a
certain period, and these rooms are made available by the wholesaler as
part of a tour package. The customer can then book the tour package
through the travel agent who serves as the intermediary between the
supplier and the customer. Some benefits of this distribution method
for the consumer include:
Professional Consultation. Working through intermediaries or
middlemen, the consumer can get a professional opinion about the
comparative advantages of different options. The travel agent, for
example, can provide the traveler with unbiased and personalized
guidance, advice, and expertise.
Greater Variety. Dealing with a number of different suppliers allows
the middlemen to offer a wider array of product options that the
consumer might not have the necessary knowledge or resources to
explore individually.
Lower Price. Travel intermediaries are often able to negotiate lower
rates than otherwise would be available to the consumer.
Single Payment. The customer is charged in advance and pays for all
different elements of the trip such as the flight, hotel, or car rental.
This increases the convenience of the purchasing process and
eliminates the need for the traveler to remit separate payments to
different suppliers.
The indirect distribution system benefits the supplier as well. The most
significant benefit is the savings from not having to hire sales personnel
since the intermediaries function as a sales team. The collection of sales
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Types of Distribution Systems
Disadvantages
Using
intermediaries
Middlemen as
salesmen
revenues is also facilitated with the presence of middlemen, and
cooperating with middlemen as preferred suppliers can help the
supplier to generate additional business (Collier, 1994, p. 199).
Variations of indirect distribution may involve two or more
intermediaries in moving the travel product from the supplier to the
end consumer. Where there is a third intermediary, this is usually a
specialty channeler. Various types of middlemen can fit under the
term specialty channeler. These include, but are not limited to, meeting
and convention planners, corporate travel offices, incentive travel
agents, and hotel representatives. The added benefits to the consumer
coming from the involvement of the specialty channelers are based on
the easier flow of information, the provision of customized service
(often to large groups of people), and a favorable price of the package.
5.4 Travel Intermediaries
5.4.1 Tour Wholesalers
The tour wholesaler functions as a middleman between the supplier,
also known as principal, of the tourist product and the travel agent who
acts as the retailer. The tour wholesaler designs, prepares, promotes, and
executes the sale of tour packages, buying large volumes of products
from a variety of travel suppliers. These products may include air travel,
accommodations, meals, entertainment, ground transportation,
sightseeing tours, and special entrance fees for attractions. The products
are grouped by the wholesaler to form attractive tour packages which
are made available to travel agents for sale to the end consumer.
The Role of Wholesaler
Wholesalers generate a large part of the revenues in the travel industry
since purchasing in bulk increases their buying power and ability to
negotiate discounts. In this respect, larger wholesalers have a leveraged
advantage over their smaller competitors. The cost savings is ultimately
passed to the consumer by making tour packages available at prices
lower than the sum cost of all components bought separately at retail.
In addition, wholesalers provide advantages to the suppliers of tourist
products who enjoy the financial security of having advance sales
commitments for large blocks of rooms, seats, or other products.
Wholesalers make a significant contribution to the travel agent and
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Chapter 5: Travel Distribution Systems
Consumer benefits
Defining
"wholesaler"
Bulk buying for
discounts
customer alike by developing and making available an array of tour
packages to satisfy different travel customer tastes and income levels
(Gee, Boberg, Choy, & Makens, 1990, p. 49). Some well-known
wholesalers are Cartan and Maupintour in the U.S., Japan Travel
Bureau (JTB) and Kinki Nippon Travel (KNT) in Japan, Thomson
Travel in the United Kingdom, China Travel Service (CTS) in the
Peoples Republic of China and Deutschesreitsburo in Germany.
Types of Wholesalers
Tour wholesalers can be classified in various ways including the following:
The inbound wholesaler arranges tour packages for tourists visiting
the country where the wholesaler is based. Inbound wholesalers do
not necessarily operate only in the country where they offer tours
and some maintain sales branches in other countries.
The outbound wholesaler arranges packaged travel for tourists who
wish to travel to destinations outside the country where the
wholesaler is located. Unlike the inbound wholesaler, the outbound
wholesaler does not usually focus on a single destination, but may
offer a wide variety of packages and destinations. However, both of
these wholesalers tend to cater to the needs of the mass market in
order to have the necessary volume leverage.
The domestic wholesaler designs and packages tours for local
residents who travel within the country where the wholesaler operates.
The independent wholesaler represents the majority of wholesalers
or about three-quarters of the industry. However, independents also
experience the largest failure rate as they are not in a position to
benefit from the financial support of a large company.
The airline wholesaler can be either a subsidiary selling the seats of
a particular airline or a wholesale business that has formed a
brokerage relationship with an airline.
The wholesale travel agent is a travel agent who puts together
customized versions of tour packages to satisfy the needs of market
niches within their customer base. These travel agents such as
American Express Travel Related Services and Thomas Cook Travel
often assume the retail and wholesaler roles at the same time.
Similarly, the wholesaler may sometimes act as a travel agent by
operating retail outlets.
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Travel Intermediaries
Advantages
for consumer
and agent
The specialty wholesaler centralizes its business in making tours
available for special-interest groups (e.g. retirees, singles) or focuses on
particular destinations, accommodations, or alternative forms of tourism
of interest to adventure travelers, culture seekers, or nature enthusiasts.
The travel clubs and incentive travel companies arrange travel
packages in ways similar to the wholesalers. However, these
packages do not become available for general consumption and are
only offered to their individual members.
The Economics of Wholesalers
In the U.S., the number of wholesalers more than tripled from 400 to
1,500 between 1970 and the mid 1990s. However, these numbers do not
necessarily coincide with high profitability. Unlike travel retailers
which benefit from commissions, wholesalers generate their gross
profits using a 20-25 percent markup. The markup is applied only in the
ground services portion of the tour. Although 90 percent of wholesale
packages include air transportation, in general, wholesalers do not make
any profit on this part of the package. This part, which represents almost
50 percent of the total price of the package, generates profits that go to
the travel agent in the form of commission. For the wholesaler, after the
subtraction of its operating expenses, there remains an average three
percent before-tax profit out of the total price of an all-inclusive tour.
Consequently, high volumes of sales have to be reached in order for a
wholesale business to be profitable. Additionally, strong sales are
required in order to reach the average break-even point of the industry.
More specifically, before it starts generating a profit, a wholesaler must
sell as much as 85 percent of its packages (Coltman, 1989, pp. 326-
327). In contrast to the low return-on-sales that characterizes the
business, wholesalers benefit by a favorable return-on-equity ratio. This
is due to the low requirements in initial investment.
The travel wholesaler is not required to pay in full when booking from
a supplier. For example, only a minimum deposit is necessary to secure
the desired number of rooms of a hotel for a certain period. Next, the
wholesaler can redeem his cash in the form of deposits and/or
payments submitted to him by the travel agent when individual
travelers buy the packages. It should be emphasized that while the
customers pay the wholesaler for their trips in advance, the wholesaler
does not usually pay off the supplier until after the trip is completed.
Thus, the wholesaler can take advantage of the excess funds also called
the float, before it actually pays the supplier in full.
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Chapter 5: Travel Distribution Systems
Profits from
markups
Necessity of high
volume sales
Payment practices
Despite this cash flow benefit, the wholesaler faces considerable risks
as well. Factors such as changing preferences, unfavorable weather
conditions, safety concerns, or political upheavals can destabilize
markets and render destinations unsaleable. Moreover, when making a
large number of advance reservations with a supplier, the wholesaler
must enter into a sales contract for which he is bonded. Despite the
inclusion of typical cancellation clauses in a contract, the wholesaler
may still incur significant losses from forgone deposits and pre-
payments, and the closer the cancellation is to the departure date, the
greater the reduction of the deposits.
Trends Affecting Wholesalers
In the growing tourism market, wholesalers are likely to face increased
competition coming mostly from the suppliers. For example, after the
deregulation of the U.S. airline industry in 1978, airlines began
arranging their own tours by combining their services with those of
other suppliers. In addition, lower prices offered by various suppliers,
such as discount airfares made available by airlines, have had an
impact on the wholesale business. Lower airline ticket prices allow the
option of creating a personalized tour with a total price that could be
comparable to the one offered by wholesalers. Moreover, wholesalers
may be affected by changes in consumer tastes as experienced travelers
move away from the typical group travel that characterized the last two
decades toward independent travel.
In recent years, wholesalers have also been increasingly subject to lawsuits
from consumers who are better educated and aware of their rights. False
advertising has become a problem together with the growth of the tour
business, largely attributable to the exploding demand for tours that has
allowed the entrance of many new and inexperienced wholesalers.
Sometimes, the claims and promises made by the advertising of wholesalers
are in conflict with what the consumer ultimately receives. Other problems
that wholesalers are sued for may be changes in the scheduled flights or the
prices of packages or hotel rooms. Even though wholesalers might not be
the only ones responsible for those changes, which can be the result of
airline schedule changes, exchange rate variation, or hotel errors, they are
the ones that consumers can usually hold liable.
The future of the wholesale business will also be affected by the impact of
the communication revolution in the travel industry which is discussed in a
later section of this chapter. For example, information experts suggest that
a good tour is one that can be booked quickly, preferably in four minutes.
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Travel Intermediaries
Economic risks
Competition and
market changes
Lawsuits
The computer's
impact
Inevitably, computers become mandatory for the accomplishment of this
task, and the hiring of more technical personnel by wholesalers has already
been observed as a result of technological changes.
5.4.2 Tour Operators
In the travel world, the term wholesaler is often used interchangeably
with the term tour operator. Even though these two terms describe
similar types of intermediaries, a distinction should be made in order
to avoid confusion. In general, the tour operator, also referred to as
ground operator, can be thought of as a tour wholesaler with a smaller
scale of operations. The word operator indicates the main function of
tour operators which is to operate or run tour packages. In other
words, tour operators are responsible for the delivery of the parts of a
tour as promised to the buyer of the tour. To deliver services, operators
may employ their own ground equipment and facilities, such as
motorcoaches and accommodations, or rent these from other tour
operators or individual providers (Gee et al., 1990, p. 50).
In contrast to a wholesaler who designs and offers a large number of tours,
the tour operator can offer only a limited number of tours on a yearly basis.
These tours in combination are referred to as the tour program. While the
wholesaler will typically include transportation to and from a destination,
the tour operator offers his/her services only at a the destination itself. The
tour operators defined business is to make the land arrangements at the
destination encompassing hotel transfers, accommodations, sightseeing,
prepaid admissions, and other special arrangements. Much like the
wholesaler, the tour operators are free to design and offer their own
packages which can be geared to all travelers. In some cases, however,
operators have to comply with the specific preferences of the wholesaler
interested in buying their services. In other instances, they compete with
wholesalers who operate packages of their own.
In recent years there has been a trend for tour operators to specialize.
For example, companies might concentrate in incentive travel or others
may focus on sailboat charters. The group inclusive tour (GIT) or
inclusive tour (IT) sector whose customers buy a tour package that
may include transportation, hotel rooms, airport transfers, and
sightseeing, accounted for one-third of total travel expenditures in
Western Europe in 1992. Group tour expenditures in 1994 reached U.S.
$7.8 billion in the U.S. and U.S. $1.2 billion in Canada (Waters, 1996,
pp. 141-142). Worldwide, UK and Japanese travelers are major markets
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Chapter 5: Travel Distribution Systems
Defining "tour
operator"
Limited tours
with service
at destination
Specialization
for tour packages comprising 63 percent and 57 percent respectively of
overseas holiday travelers in 1992 (World Tourism Organization, 1995d,
p. 21). Due to a progressively higher segmentation and the sizable free
and independent traveler (FIT) market whose customers travel
independently of a group, the need for additional specializations of tour
operators has increased.
5.4.3 The Travel Agent
Traditionally, the role of the retailer in the travel industry has been played
by the travel agent. The travel agent is the final link in the consumption
process, connecting the receiver (the consumer) and the source (either
the supplier or the wholesaler) of various tourism goods and services.
The travel agent is also the visible intermediary in the distribution chain
selling transportation, accommodations, meals, activities, attractions,
and other travel elements directly to the public. These products can be
sold individually, in various combinations, or as tour packages to the
clients. It is the responsibility of the travel agent to act on behalf of
prospective travelers and understand their desires in order to satisfy them
by arranging the necessary parts of the trip (Gee et al., 1990, p. 48).
Legally, the travel agent is a commissioned agent or an authorized
representative who is approved to sell the products of a company in a
certain geographic area. In terms of distribution, the travel agent maintains
a delicate balance between serving the client and promoting the interests
of the principal the agent represents. Above all, a travel agent has to use
knowledge and expertise in responsible ways to successfully plan and
secure a safe and enjoyable trip. This may involve carrying out numerous
detailed activities including but not limited to preparing individual
itineraries, informing about travel insurance, documents, and
immunization requirements, as well as giving descriptions of destinations,
hotels, and local customs. The demands on the agent have increased as the
product mix has expanded. Even though almost every agent can sell the
products of all sorts of suppliers, there are agents who choose to specialize
in particular areas, and they play many different roles.
In 1992, there were an estimated 67,000 travel agents worldwide of
which 47 percent were in the U.S., 30 percent in Europe, the Middle
East and Africa, 9 percent in the Americas outside of the U.S. and
Canada, 7 percent in the Asia-Pacific region, and 6 percent in Canada.
In 1994, travel agencies in Europe and the Americas produced about
U.S. $170 billion in sales (Waters, 1996, p. 137).
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Travel Intermediaries
Deals with public
Representative
selling products
Location
and sales
Travel Agents as Counselors
The retail travel agent plays an important role in promoting the
efficiency and the quality of the distribution of the various travel
products. To the customer, the travel agent is the means for researching,
organizing, securing, and realizing a desired trip. The agents goal is to
understand what satisfies the travelers needs and try to provide it. That
is why the term counselor is frequently employed to describe the
advising service that the agent provides.
Due to the increasing complexity of the reservation and pricing systems,
a client would have to spend substantial time and money to arrange a trip
or tour individually. Alternatively, the services of a travel agent may be
used which are generally offered free of charge. The travel agent is a
specialist who has developed an expertise in researching and collecting
large amounts of appropriate and reliable information in very little time.
In order to add value to the customers travel experience, the agent is
required to know or have access, at least, to schedules, prices, different
types and qualities of accommodations, airlines, and other travel
components. Moreover, the agent has to personalize the results of this
knowledge to fit the specific needs of the prospective traveler.
Operating as a responsible and trustworthy professional is an integral part
of an agents mission. The travel agents business depends greatly on repeat
customers and is severely affected by word-of-mouth. The significance of
customer loyalty for the industry is indicated by the fact that approximately
85 percent of an agents clientele consists of repeat customers.
Travel Agents as Sales Representatives
The travel agent carries out an equally important function as a
salesperson. Ultimately, this is what determines an agencys financial
condition. Most people who seek the travel agents advice already
know what they want. Because the value-conscious consumer does not
hesitate to research and shop around, agents must not only service and
sell what he or she requests, but be able to close the sale as well.
Maintaining a harmonious relationship between serving a client and
selling the products of preferred suppliers has always been a challenge
for travel agents. The deregulation of the field has allowed agents to
obtain different commissions and even overrides (commission rates
that increase according to the level of sales) from different suppliers.
To the supplier, the retail travel agent plays a critical role in promoting
and selling its products to the ultimate consumer. The agent provides
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The advising
service
Specialists
Customer loyalty
Closing the sale
Supplier-Agent-
Customer
relationship
three basic elements that facilitate the suppliers business. These
include a location where information can be obtained for the suppliers
products, an outlet where a potential customer can purchase those
products, as well as a place were payments can be collected.
In the U.S. and elsewhere, airline deregulation and other developments in
the industry have had a dramatic effect on travel agencies. In 1995, most
of the major U.S. airlines adopted a cap policy limiting commissions in
order to cut costs. For example, Delta Air Lines provides travel agents a
10 percent commission on U.S. domestic tickets as long as the total
commission per ticket does not exceed the amount of $50. The average
commission rates for domestic air sales have declined for travel agents
placing increased pressure on agencies to move larger volumes of tickets
to attain the same profit. Another concern is the low-fare trend for
domestic tickets. When airline price wars are in effect, fares often become
so low that the money an average agent makes selling a ticket may be less
than what it costs to issue it. Even though this situation is not new, it
comprises a serious burden, especially in combination with restricted
commissions. Because of the commission cap, travel agents cannot
balance losses incurred in selling cheap air tickets with higher fare tickets.
5.4.4 Regulation of Intermediaries
Travel Agents
Historically, travel agents have been affected by regulations, especially
from the airlines which restrict the number of agents because of concern
over increased competition for their own sales offices. Until 1959, a
travel agency could not be established unless it had the sponsorship of
an airline and the approval of two-thirds of the members of the
respective domestic or international travel conference. The subsequent
rapid expansion of the airline industry forced airlines to rely more
heavily on travel agents to reach and service their clientele. Although
there has been a relaxation of restrictions since the deregulation of the
airline industry in the U.S., even today an agency has to comply to
certain regulations before and during the time it is in business.
In the U.S., where a travel agency is not legally obliged to be licensed in
many states, certification or accreditation consists of the approval from
industry conferences. A conference is a regulatory body made up of
transportation companies that impose requirements in order to promote
certain standards. For the U.S., there are four major conferences: (1) The
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Travel Intermediaries
Commissions
Restrictions
Airlines Reporting Corporation (ARC) responsible for domestic tickets,
(2) The International Airline Travel Agency Network (IATAN)
responsible for international tickets, (3) The Cruise Line International
Association (CLIA) responsible for cruises, and (4) The National
Railroad Passenger Corporation responsible for domestic rail tickets
(Mill, 1990, p. 321). An agency which is appointed by one group will
usually receive an appointment by the rest of the conferences. Major
requirements of ARC, for example, are that agencies carry a minimum
bond to cover for the possibility of default and maintain a minimum cash
reserve. There are also minimum experience requirements for agency
management, and the agency must be accessible to the general public,
actively sell tickets, and promote travel.
Some states in the U.S. require a license. The license can be obtained
by passing an examination given by the state licensing boards.
Additionally, a city license and possibly a county license are required
in order for a travel agency to be operational. Travel agents may also
choose to follow the rules imposed by various trade associations which
they have joined as members.
The EC (European Community) Travel Directive was initiated in 1993
to eliminate differences in laws among member European states related
to group or package travel. The Directive, however, does not replace
national laws regarding ground travel, package holidays, tours, and
tour operators and agents and leaves implementation to each state
(Downes, 1993). Japans travel agency law is considered one of the
most organized and advanced, and its 12,500 travel agents are divided
into three classifications: general, domestic, and sub-agency. All
agencies are required to register with the Ministry of Transport and are
bonded (Travel Journal, Inc., 1995, p. 185).
Travel agents have a legal obligation to perform in a professional
manner. They can be held responsible for the quality of the service they
provide. The provided service has to be in accordance to the promises
made to the customer and consistent with the average industry
performance. Agents have to take into consideration any special factors
in the destination that may influence the customer such as political
stability, health care, and other conditions. According to court rulings,
agents can be even held liable in the event a wholesaler goes bankrupt
before the trip. The American Society of Travel Agents (ASTA) in the
U.S., the Association of Canadian Travel Agents (ACTA) in Canada,
the Association of British Travel Agents (ABTA) in the U.K., and the
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Chapter 5: Travel Distribution Systems
U.S. conferences'
standards for
agencies
Licenses
European and
Japanese laws
Liability
Japan Association of Travel Agents (JATA) in Japan are some of the
groups or organizations which set industry standards. International
organizations include the International Federation of Travel Agents
(IFTA) and the World Association of Travel Agents (WATA).
Wholesalers
For a new wholesaler to enter the industry, usually a local business license
and compliance with governmental and airline regulations are required.
Nevertheless, wholesalers may be subject to additional constraints, some
of those monetary, if they choose to join certain professional associations.
In the U.S., the tour operator industry is largely self-regulated, and most
belong to the U.S. Tour Operators Association (USTOA). The USTOA
requires an indemnity bond from its members. This goes toward the
Consumer Payment Protection Program which helps refund the money to
customers in case the wholesaler goes out of business.
5.5 The Impact of Technology
on Travel Distribution Systems
In the field of tourism, technology represents a dynamic and powerful
factor responsible for numerous changes in the past, present, and future
of the travel industry. Technological advances especially in the last two
decades have facilitated the distribution of travel services and will have
a major impact on the future structure of travel distribution systems.
5.5.1 The Link Between Technology and Tourism
Within the last two decades the tourism industry has experienced
tremendous growth. During this period, a series of rapid and radical
changes has been noted. The resulting evolution has made travel
marketers realize that they are not only in the business of moving
pleasure and/or business travelers, but also in the business of
communication and information. Changes in consumers
characteristics, preferences, and decision making, and continuous
alterations in a highly competitive global environment have created an
ever closer relationship between tourism and information technology.
It is important to note that contemporary travelers have different
characteristics from travelers of three decades earlier at the beginning of
mass tourism development. The lack of travel experiences of earlier
travelers and the complexity of the distribution systems favored the
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The Impact of Technology on Travel Distribution Systems
Requirements
and constraints
Changes in
market and
mentality
creation of standardized travel packages for groups. By contrast, todays
consumers tend to be better educated with wider exposure to travel and
strong preferences for unique travel experiences. Their desire for
customized travel has influenced their decision-making process as well.
To create memorable travel experiences, suppliers need to provide
todays prospective traveler with a full range of options. Here, the
completeness and the clarity of the information offered to the traveler by
the seller are essential variables of satisfaction. The complexity of the
issue increases as the competitive global environment of tourism
continuously generates more information. The combination of these
forces and the need for high professionalism in handling the information
provided to the consumer necessitates the use of technology to gather,
manage, distribute, and communicate information. Technology surfaces
as the enabler that allows tourism businesses to carry out all these
functions in order to create products and services that address personal
travel demands. Additionally, it helps satisfy the need for value which
emerges as a determinant factor of consumer satisfaction. Technology,
then, acts as a strong driving force which is reshaping the tourism
industry and providing companies with a competitive edge.
5.5.2 Computer Reservation Systems (CRS)
Probably the most widely used technological tool in the travel industry
is the computerized reservation systems (CRS). First introduced at
the experimental level in the 1960s, the CRS was usually an internal
airline system used for keeping track of the seats sold. In the following
years, a number of different systems were developed by individual
airlines. For example, TWA introduced PARS; United Air Lines,
APOLLO; Delta, DATAS II; and American Air Lines, SABRE. Later,
airlines realized that they could use the CRS to make their fares
available to travel intermediaries with increased cost effectiveness. As
a result, in the first half of 1970s, airlines tried to gain an advantage
over their competitors by creating their own version of a reservation
system. The move was based on the expectation that the airline with a
more widely adopted CRS would be capable of providing its clients
more timely information and thereby increase sales volumes.
Because of ownership and control factors, the different CRSs were not
interconnected until 1976 when TWA, American, and United Air Lines
gave access to each others systems in the first attempt to link systems.
This event marked the beginning of the widespread use of the CRS.
The advent of CRS directly increased both the effectiveness and the
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Chapter 5: Travel Distribution Systems
Group vs.
individual travel
Need for
technology
Beginnings in the
airline industry
Linking systems
efficiency of airline reservations by enabling airlines to continuously
update their databases in terms of seat availability and fare
adjustments. It also increased the speed and the efficiency with which
travel agents serviced their customers. Drawing from the example of
the airlines, other suppliers such as hotels and car rental companies
also adopted CRSs (WTO, 1995c, pp. 22-23, 29).
In more recent years, there has been a trend for alliances at different
levels of the tourism industry. These alliances have resulted as a response
to intense competition, the need to capitalize on economies of both scale
and scope, as well as on economies of networking (maximizing utility
out of networks). An example was the cooperation of Delta Air Lines
with Northwest and TWA for the introduction of WORLDSPAN, a
reservation-only network. Different travel suppliers also linked their
reservation systems. For example, SABRE started offering reservation
capability to the Sheraton hotel chain and the Avis car rental company.
Currently, after a series of alliances, mergers and acquisitions, the CRS
has evolved into what is widely known as the global distribution system
(GDS). In 1995, the leading GDS companies worldwide were
AMADEUS, GALILEO, SABRE, and WORLDSPAN. Regional CRS
vendors include ABACUS (Asia-Pacific), ACCESS (Japan), and GETS
(Latin America, Eastern Europe, Africa). The main objective in the
development of these integrated global systems has been to make a
complete one-stop service possible. Using GDS, suppliers,
intermediaries, and customers worldwide can now interlink to exchange
information on a wide variety of tourist products including airfare,
accommodations, ground transportation, and destination information.
5.5.3 Ticketing Automation
Other technological advancements have facilitated the distribution of
travel while cutting costs and increasing responsiveness. Satellite ticket
printers (STP) now allow travel intermediaries to issue tickets directly.
The electronic ticket delivery network (ETDN) is another form of STP.
The difference between them is that the supplier collects a commission
for the usage of ETDN, while only a printing fee is received in the case
of the STP. Electronic kiosks, which are stand-alone computer terminals
found in hotel lobbies, airport terminal, and tourist information offices,
now allow travelers to perform a series of different functions such as
hotel check-in, purchase of airline tickets, or receipt of information
about what a destination has to offer. Another development in facilitating
the distribution of travel are electronic travel documents, simply referred
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The Impact of Technology on Travel Distribution Systems
Alliances within
industry
Other
advancements
benefiting
industry
to as ticketless travel, where the passengers personal information exists
in an electronic file with the airline. All the passenger is required to do
is present personal identification to obtain a boarding pass (Gee,
Makens, & Choy, 1997, p. 213).
5.5.4 The Internet
The increasingly widespread use of the global computer network
known as Internet may eventually have the largest impact of all
technologies on travel distribution systems. Currently, it can be viewed
both as a substitute and a complement to the traditional distribution
channels. Functioning as a complement, the Internet can be used by
travel intermediaries and individual travelers alike to research available
travel products and prices. Functioning as a substitute, it allows
individual travelers to reserve and purchase travel products on-line,
potentially eliminating the need for a middleman.
A continuously larger number of travel-related businesses are turning
to the Internet due to the benefits that it can have on customer service
delivery and ultimately on sales volume. For example, in 1995,
American Air Lines sold 1.6 million tickets on-line (Gunther, 1996). To
many, the Internet provides a great opportunity for reaching new
customers and targeting additional market segments. The greatest
advantage of the Internet is its capability to make travel products
globally accessible at a much lower cost than traditional distribution
systems. Cost reductions become possible by eliminating the overhead
costs of reservation departments, decreasing printing and mailing costs
of company directories, and avoiding commissions to the travel agents.
Despite the many benefits that the Internet brings, there are still some
drawbacks that limit its immediate widespread adoption as an
alternative distribution method. For consumers, these include the level
of computer literacy, availability of necessary computer equipment,
ease of use of software, confusion in organizing the enormous amounts
of data, security of sharing personal information, slow response times,
and image quality (Cho, Connolly, & Tse, 1995).
5.5.5 The Future
The single most important issue concerning the future of the travel
distribution systems is the elimination of the intermediary or middleman
(i.e. travel agent and even the wholesaler) from the distribution chain.
Indeed, the two most powerful technological trends, ticketless travel and
the Internet, tend to challenge the survival of travel intermediaries.
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Chapter 5: Travel Distribution Systems
Both complement
and substitute
Advantages and
disadvantages
Elimination of
intermediaries?
Individual computer users with direct access to ample on-line travel
information can make their own travel arrangements. This, in
combination with the possibility of using an electronic instead of a
regular ticket make traveling possible without the use of intermediaries.
It is possible that travel intermediaries will shift their business on-line.
This could involve collecting, managing, adding value, and redistributing
information via the World Wide Web to computer users. They can also
make use of upcoming technologies by providing on-line videos of
vacation destinations and direct e-mail messages to update their
customers on the latest travel bargains. However, one should keep in mind
that competitors from fields not directly related to tourism, such as
telecommunications and computer companies, possess technologies that
can make on-line travel planning possible. These companies constitute a
serious threat for travel intermediaries that plan to go on-line.
No matter what the future developments may be, many insist that the
value of the personal element of the travel intermediary business cannot
be substituted by non-personal technological advancements. Additionally,
it can be argued that many who do travel, such as corporate executives,
cannot spend time on booking their own travel. What can be stated with
certainty is that the structure of travel distribution systems is changing,
and adopting new technologies to do business will be the single most
important factor in the future survival of travel intermediaries.
SUMMARY
Travel sales distribution systems provide the means by which the
tourism product or service moves from the supplier to the customer.
The distribution system can be direct or indirect depending on the
number of intermediaries or middlementour wholesalers, tour
operators, travel agentswho play a role in the process. The use of
intermediaries is a cost-effective method of distribution and each
intermediary plays an important role. Tour wholesalers and operators
generally create and provide the tour package while travel agents sell
the tours and service the customer directly. Travel agents receive their
income from suppliers and wholesalers through commissions and
account for a major portion of reservations and bookings in the travel
industry. However, the relationships within the travel distribution
systems are expected to change in the future with the challenges posed
by new technology. Direct booking by consumers through computers
using on-line services and the use of ticketless travel which by-passes
the need for the purchase and issuing of actual tickets are expected to
113
Summary
On-line
operations?
Willingness
to change
reduce the demand for services from travel intermediaries. The travel
sales distribution system will need to adapt to the new technologies as
well as to changing consumer tastes and preferences in travel in order
to maintain its major role in the travel industry.
DISCUSSION QUESTIONS
1. What are the different types of travel sales distribution systems and
how do they operate?
2. Who are the major suppliers of travel services?
3. What are the primary functions of the tour wholesaler?
4. What are the differences between the tour wholesaler and the tour
operator?
5. What services does the travel agent provide to the customer?
6. How do each of the intermediaries derive income and revenue?
7. In what ways will technological changes affect the travel sales
distribution industry in the future?
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Chapter 5: Travel Distribution Systems
CHAPTER 6
Special Services and Products
Learning objectives
To identify the changes in the leisure and business travel markets that
have facilitated the development of special services and products.
To identify some of the major special services and products in the leisure
and business travel markets.
To understand the MICE market and the various specialized roles that
meeting planners, convention centers, events managers, and convention
and visitors bureaus play.
Key terms and concepts
adventure tourism
convention center
convention and visitors bureau (CVB)
cultural tourism
ecotourism
educational tourism
event manager
health tourism
meeting planners
meetings, incentive, convention and exposition (MICE) market
new age tourism
rural tourism
6.1 Introduction
As the tourism industry has matured and tourists have become more
knowledgeable and sophisticated, special types of tourism services and
products have been developed to meet their travel needs. These special
services and products have grown out of changes and pressures
affecting tourism supply components (such as destinations and
attractions) and the traveling public. Both the leisure and business
travel markets are affected by these changes and pressures. As a result,
special services and products serve certain niche markets.
Special areas of leisure travel reflect the publics diverse reasons and
motivations for traveling. Chapter 7 discusses the many different
reasons why people travel and the psychological aspects of their choices
of destinations and activities. As greater numbers of people travel, and
as tourists look for different travel experiences, those markets that were
once considered too small to merit much attention by suppliers are now
growing into substantial and profitable niches such as ecotourism,
adventure tourism, health tourism, educational tourism and new age
tourism dealing with peoples interest in spiritualism and metaphysics.
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6
Special Services and Products
Changes in
markets and
destinations
Business travel has also developed its own special markets. Meetings
and conventions events now have professional planners to deal with the
complex activities and needs that are unique to these events. In addition,
destinations now compete vigorously to host these types of events.
This chapter examines some of the main special services and products
that have developed in both the leisure and business travel markets.
6.2 Special Segments of Leisure Travel
6.2.1 Reasons for the Growth of Special Leisure
Travel Services and Products
In the area of leisure travel a significant and growing number of people,
especially those who travel frequently, now approach tourism with different
expectations. Rather than simply going on sightseeing tours and relaxing at
pool side, these tourists search for more meaningful or intense experiences.
Part of the reason for these newer expectations of travel lies in the
development of the tourism industry itself. As tourism has grown and
matured, it has become increasingly sophisticated and creative in the range
of products and services it offers including destinations. Tourism suppliers
are constantly innovating ways to differentiate themselves from other
suppliers and stand out in the market. This innovation is part of the natural
process of product development, where the accumulation of knowledge and
experience enables suppliers to modify and improve their products.
In addition, this need to innovate comes from the competitive pressures
of the market. Todays tourists are likely to be knowledgeable about the
many different products in the market and concerned with getting the
best value for their leisure dollar. Many tourists are seasoned travelers
and are looking for new travel experiences. Thus, suppliers are under
constant pressure to appeal to buyers who are becoming increasingly
discriminating in their tastes and more conscious of value. The following
special segments of the leisure tourism market reflect these factors.
6.2.2 Ecotourism
One form of tourism which has gained much attention in recent years
is ecotourism. Although there are several definitions of this term,
there is general agreement that in ecotourism the physical environment
is the focus of the touristic activity. For the purposes of this chapter
ecotourism will be defined as any tourism which:
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Chapter 6: Special Services and Products
Special markets
Product
development
Savvy tourists
Provides a first-hand active experience of a place.
Provides an educational experience which develops visitors
understanding and appreciation of the place visited and promotes
both appropriate behaviors and a conservation ethic.
Is environmentally responsible and uses various strategies to
minimize negative impacts.
Maximizes local economic returns (Bottril & Pearce, 1993; Scace, 1995).
One of the difficulties in analyzing ecotourism is the problem of
determining its size. Although it is believed that ecotourism is a substantial
and growing activity, its contribution to the tourism industry can only be
estimated because few countries or regions monitor the number of visitors
choosing ecotourism options. Examples of countries whose tourism
growth appears to be driven by ecotourism are Belize (with tourism
growth of nearly 140 percent in the period 1981-1990), Kenya (115
percent), and Costa Rica (31 percent). Certain trends in tourism, such as
the increasing experience and sophistication of travelers and the increasing
desire for self development through travel, are believed to generate more
interest in ecotourism experiences (Poon, 1993; Urry, 1990; Cater, 1994).
Ecotourism activities typically focus on providing access to remote,
rare and/or spectacular natural settings. Tours which concentrate on
wildlife viewing are another major form of ecotourism. The following
examples demonstrate the various characteristics of ecotourism:
In Costa Rica, a country which has been heavily promoted as an
ecotourism destination, the operations of the La Selva Biological
Station are a successful example of ecotourism. The station is run by
a consortium of research institutions which is called the Organization
for Tropical Studies (OTS). The primary activity of the station is
scientific research, but the OTS offers access to tourists and the
station is visited by approximately 13,000 tourists each year. Visitors
are provided with accommodation in basic cabins and are allowed
access to trails into La Selva, which is comprised of 2,000 acres of
virgin forest, swamps, and abandoned plantations. The income
generated by visitors supports the operation of the research programs.
An Australian company provides tours in many parts of Australia
and in Indonesia that take visitors into more remote natural
environments and provide interpretation of these places and the
wildlife. The tours often involve visits to research sites and contact
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Special Segments of Leisure Travel
Growth
estimations
Example 1:
Costa Rica
Example 2:
Australia
with local residents. A substantial focus of the tours is the education
of tourists to encourage their appreciation of the visited places. All
guides are trained in both conservation principles and in minimal
impact behavior and travel techniques. The tours are run under a set
of guidelines which include asking visitors not to collect artifacts,
fossils or plants, removal of rubbish, restoration of campsites, and
guidance for visitors on how to behave in cross cultural encounters.
The tour company also offers employment to local people as guides
and purchases local goods wherever possible.
Cruises to Antarctica led by scientists with substantial experience
with the Antarctic environment. These scientists give talks to
passengers on the ecology, history, and geology of the antarctic
region. Tourist behavior while onshore is strictly controlled, and
visitors are not allowed to eat, smoke, or litter while off the boat. The
cost of the cruise includes fees to government agencies, such as the
New Zealand Department of Conservation, which are used to
support environmental protection programs (Rovinski, 1991).
As these examples demonstrate, ecotourism can be viewed as
sustainable tourism for natural settings. In this way, ecotourism
possesses the potential as a guide for the development of more
sustainable conventional tourism discussed in Chapter 12.
6.2.3 Cultural Tourism
Cultural tourism refers to a segment of the industry that places special
emphasis on cultural attractions. These attractions are varied, and include
performances, museums, displays, and the like. In developed areas,
cultural attractions include art museums, plays, and orchestral and other
musical performances. Tourists may travel to specific sites to see a
famous museum such as the Prado in Madrid or the Louvre in Paris or to
hear the Vienna symphony orchestra. In less developed areas, they might
include traditional religious practices, handicrafts, or cultural
performances. An example of the latter type of cultural tourism is the U.S.
Amish community in Lancaster County, Pennsylvania. The Amish live a
traditional lifestyle without modern conveniences such as electricity and
telephones. Tourism provides the Amish with an important source of
income, through the sale of quilts, small handicrafts, and baked goods.
Cultural tourism and ecotourism are usually closely related, and
elements of each are often found in tours and destinations that appeal
to this market. An example is Africatourism, a tourism program based
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Chapter 6: Special Services and Products
Example 3:
Antarctica
Activities in
developed/less
developed areas
Combination
culture/ecology
on the cultural and environmental wealth of Africa. Among its features
and benefits, Africatoursim: recognizes the natural qualities of Africa
and its people and upholds them as a source of pride and confidence,
all the way from the grassroots level implies responsibility and
stewardship toward the environment and embraces everything
environmental, from fauna and flora through cultures, traditions, art
forms, architecture, engineering, agriculture, and industry [and] can
be found and experienced only in Africa (Open Africa, 1997). This last
featurethat Africatourism is unique to Africais key to cultural
tourism and ecotourism, as it emphasizes the importance of the
destinations place to the authenticity of the tourist experience.
One of the issues facing less-developed destinations that offer cultural
attractions is the potential impact of tourism upon the local culture and
society. By its nature, cultural tourism can bring together people of vastly
different orientations towards modern values, a cash-based economy, and
traditional religious practices. The meeting between such different peoples
in the context of a tourist experience can have significant impacts,
especially upon the local, traditional society. For example, a tourist may
see a local handicraft primarily as a souvenir to be purchased and
displayed at home, and thus the purchase of the handicraft as simply a
transaction, much like the thousands of other transactions he participates
in on a daily basis. The traditional craftsman, on the other hand, may
perceive the exchange of money for the handicraft as a symbol of his or
her relationship with the buyer and the buyers society. The craftsman in
this case may want certain customs to be followed in the exchange, or may
expect the buyer to exhibit behavior that indicates that the exchange is a
meaningful event. In this and many other ways, there are opportunities in
cultural tourism for greater understanding and mutual enrichment between
cultures, as well as for misunderstandings and disappointment.
6.2.4 Rural Tourism
The primary tourism-generating markets are highly developed and
urbanized areas. Many of the residents of these areas wish to escape
from their modern urban and suburban environments, and visit simpler,
less developed areas. For such tourists, rural tourism offers an ideal
alternative. Like ecotourism, rural tourism is difficult to precisely
define because it can take a multitude of forms (Lane, 1994).
An example of rural tourism is farm tourism or agri-tourism as found
in many countries in Europe. In Austria, for example, there were about
21,000 farms providing about 109,000 rooms to farm tourists in 1994.
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Special Segments of Leisure Travel
Example: Africa
Tourist impact
on societies
Urban escape
Farm tourism
Farm tourism helps Austrian farmers diversify their income sources
beyond traditional means such as cattle and timber, with the tourists
payment of room rent and their purchase of farm-grown produce.
Another example is the youth hostel found in rural areas, which has
been a long-standing way for young persons to travel economically
around Europe. In many parts of the United States, particularly in the
northeast region, there are numerous small inns, often run as a family
business, that provide guests with a small-town experience.
One of the key aspects of rural tourism, and of several of the other
special segments of leisure travel discussed below, is the experience of
a way of life and environment that offer a sharp contrast to life in the
modern city. For these segments of tourism, the environmental
qualities of the destination are particularly important. Rural, adventure,
and cultural tourism are often cited as the segments of tourism that
hold the most promise of incorporating the principles of sustainability.
6.2.5 Adventure Tourism
Many tourists have the desire to participate in activities that provide
them with a challenge, thrill, or intense experience. Some of these
tourists want to test their physical skills in new or unusual ways, with
activities like mountain climbing, hiking, or kayaking. Others want to
face nature without the modern conveniences that make their lives safe
and comfortable. Whatever their motivation, these tourists will seek
destinations and products that can provide such intense experiences. In
general, adventure tourism relies on natural, environmental features,
such as mountains, rivers, forests, and the like. Unlike traditional tours,
however, where such natural features are appreciated for their visual
beauty, adventure tourism brings the tourist into close contact with the
environment and makes it something to be challenged or wrestled with.
In this way, adventure tourism, like rural tourism, takes the tourist back
in time by providing dangerous or challenging situations that the
modern tourists forefathers may have faced. Historically, one of the
most famous examples of adventure tourism has been the hunting
safari in Africa, which combined the thrill of pursuing wild animals,
the challenge of living in an untouched environment, and the beauty of
the African landscape. Another well-known form of adventure tourism
is mountain climbing, where climbers risk their lives to pit their skills
against nature. A growth area of adventure tourism is the extreme
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Chapter 6: Special Services and Products
Rural hostels
and inns
Challenges
Extreme
sport
sports tour. Extreme sports include established activities that, like
mountain climbing, have a high degree of danger such as rock
climbing, skydiving, and new variations such as snowboarding.
6.2.6 Health Tourism
Health tourism refers to travel to facilities and destinations for
obtaining health-care services or health-related benefits. Health
tourism thus encompasses many different types of activities which
have in common an emphasis on the healthfulness of the tourist. The
three main forms of health tourism include:
Medical care. Traveling to a facility or physician to obtain special
treatment or a quality of treatment unavailable in the travelers home
area. Examples of this would include hospitals or physicians that are
world-renown for their treatment of certain diseases, or that offer
experimental or unique treatments, such as the Mayo Clinic in the
United States.
Fitness and wellness. Traveling to a destination or facility, such as a
spa or weight-loss clinic, for the purpose of engaging in preventative
health measures, such as dieting, weight-loss, relaxation, and
exercise. Many hotels and resorts already include spa and exercise
facilities,which indicates how widely fitness and wellness practices
have been adopted in peoples lifestyles.
Rehabilitation and recuperation. Traveling to a destination or facility
that offers special care, or is located in an area considered to be
particularly beneficial to ones health, to recover from illness.
Health tourism is considered to be a segment with much potential.
During the next decades, a generation of people who have become
accustomed to modern medical care will be entering their retirement
years. These people are expected to demand a level of health and
comfort as they grow older that earlier generations could not expect. A
large segment of this generation will also possess the economic means
to pursue better health, including travel related to health tourism.
Health tourism will also benefit from the worlds growing knowledge
of, and concern with, good health. The past decades have witnessed
significant increases in public awareness in areas such as diet,
environmental dangers (air and water quality, pesticides), and lifestyle
(the consequences of cigarette smoking, alcohol consumption, stress,
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Special Segments of Leisure Travel
Future growth
potential
and the benefits of exercise). This increasing awareness, along with
well-publicized advances in medicine, will continue to raise public
expectations for their own health and well-being.
6.2.7 New Age Tourism
A growing number of tour operators are offering programs that focus on
metaphysics and spirituality designed for travelers in search of lifes
deeper meanings and wishing to escape from the excessive materialism of
the world. New Age tourismincludes elements of cultural tourism, health
tourism and ecotourism. People who consider themselves part of the New
Age movement share a belief in the importance of learning from ancient
cultures, encompassing spirituality, metaphysics, yoga, meditation,
natural healing, herbology and communion. The sites visited in New Age
tourism are in their very nature sacred sites dating from the pre-
Christianity era, such as Stonehenge, the Easter Islands, and the great
pyramids in Egypt. These tours often take unconventional approaches to
history and archeology. For example, the pyramids are seen as a powerful
energy vortex that emit a grid of energy lines encircling the world.
Another branch of New Age tourism centers on physical health, offering
yoga, guided meditation, exercise, massage and organic vegetarian and
other diets. Destinations such as Sedona, Arizona (U.S.), Bali
(Indonesia) or Dominica in the Caribbean are chosen for their natural
attributes and spiritual energy in healing. The premise is that a natural
approach to physical health leads to spiritual health and fulfillment. As
the concept of New Age tourism is relatively recent, there are no
statistics currently available on the size of this market (Cogswell, 1996).
6.2.8 Educational Tourism
Although all tourism can be thought of as educational in the sense that the
visitor learns about a destinations culture, society, and other aspects, the
term educational tourismgenerally refers to travel in which the learning
occurs within a structured or formal program. A familiar and popular
form of educational tourism is the study abroad program, in which
students attend schools or programs (usually for a semester or academic
year) in another location, often in a foreign country. Through such a
program, a student has the opportunity to take advantage of the
destinations resources which might not be available anywhere else. One
of the most popular reasons for attending a foreign school is to the
opportunity to be immersed in the language and culture of the destination.
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Unconventional
tourism
Spiritual healing
"Study abroad"
Certain tours can also be considered as educational tourism. These
tours are centered around significant historical, cultural, or scientific
sites and are often led by a teacher with expertise in the sites. In
contrast to sightseeing-only tours, educational tours often include
books, lectures, and other supplemental materials to create a more
formal learning experience.
6.3 Special Segments of Business Travel
Business travel has also changed under the pressure of increased and
divergent expectations of business travelers. One of the most important
factors influencing business travel patterns has been the increasing
cost-consciousness of corporations and other organizations. Because
of pressure to reduce expenses, travel costsincluding transportation,
lodging, meals and entertainmentare increasingly perceived as
unnecessary. Advances in communications technologies have also
called business travel into question. The speed of e-mail and facsimile
transmissions, and the capabilities of teleconferencing, have
eliminated some of the reasons for earlier business travel. Increasingly,
businesses are scrutinizing decisions to hold meetings by going
through a needs assessment process. This process is designed to ensure
that there is a shared understanding of the proposed meetings issues
and objectives among all participants, and that there are clearly defined
measures of the meetings success or effectiveness.
Within business travel, however, there are special segments that are
based on face-to-face interaction and often incorporate elements of
leisure travel that are growing increasingly important. Collectively,
these segments are often referred to as the meetings, incentive,
conventions and expositions (MICE) market. This market accounted
for 983,600 meetings, 77.4 million attendees, and U.S. $37.4 billion of
business in 1995 (Braley, 1996, pp. 65, 72-73).
6.3.1 Meetings
Meetings can be defined as events designed to bring people together
for the purpose of exchanging information. Meetings can be held on-
premise at one of the companies or organizations that is convening the
meeting, or off-premise at other sites, requiring the rental of meeting
facilities. It is the off-premise meeting market that is of primary
concern to the tourism industry.
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Special Segments of Business Travel
Changes due to
cost and
technology
Corporate and
association
meetings
Meetings held by corporations and other businesses are classified as
corporate meetings, while those held by associations are referred to as
association meetings. Association meetings include activities of a variety
of different types of groups, including social, military, educational,
religious, and fraternal organizations, often collectively referred to as
SMERF. Corporate meetings account for about 25 percent of the
meetings market, while organization meetings account for 75 percent.
The term meetings includes various types of events that differ in their
size, subject matter, and agenda. While the criteria used to distinguish
among the different types of meetings are not clear-cut, the terms
themselves are useful in distinguishing among the many different kinds of
events that businesses and organizations hold. A clinic is usually a small,
hands-on educational meeting that emphasizes participant involvement
in the learning process. A forum is a larger gathering at which issues of
interest or concern to the audience are discussed, often led by a panel and
moderator, and with opportunities for comments and questions from the
audience. A seminar is similar to a forum, but often smaller and more
focused in subject matter. A symposium is much like a forum, but generally
refers to meetings where the subject matter of the meetings is academic or
technical in nature. A workshop is similar to a clinic, generally led by a
leader or facilitator, and devoted to skills building or training.
Meetings can also be categorized by their function. Major functional
categories of corporate meetings are incentive trips, sales meetings,
management meetings, training seminars, professional and technical
meetings, new product introductions, and stockholder meetings.
6.3.2 Incentive Travel
Incentive travel refers to the segment of business travel that uses the
allure of a trip as an incentive or reward for achievement. A typical
example of incentive travel would be a company-paid vacation to a
resort for top-performing salespersons. Sometimes this type of
vacation will include motivational seminars, morale-building
activities, and other activities that build upon a gathering of employees.
Incentive trips also can include business-related group activities, such
as the introduction of new products or promotional campaigns, or
training programs for employees. The incentive travel market has been
showing strong growth in recent years: in 1995, 92,000 incentive travel
programs were planned in the U.S. vs. 60,200 in 1993. The average
number of attendees in 1995 was 95, with an average trip length of
nearly 4 days (Braley, 1996, p. 72).
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Different types
of meetings
Functional
categories
Trip as reward
Short-term trips at which participants devote themselves to a particular
issue or problem, and which are held at sites that provide a sense of
isolation and relaxation to encourage in-depth thinking and group
interaction, are often referred to as retreats. Retreats can be held for a
variety of problem-solving, motivational, or morale-building reasons.
However the incentive trip is organized, it should result in specific
results that benefit the company. These results include greater
employee productivity, increased skills, improved morale, and higher
motivation to achieve company objectives.
As the incentive travel market has grown, organizations specifically
dedicated to organizing incentive trips for companies have come into
existence. These organizations, often referred to as motivational
houses, function as specialized meeting planners, arranging travel,
accommodations, transportation, and other aspects of the trip.
Incentive travel planners are under increasing pressure to provide their
clients with more than just travel plans. Rather, companies are viewing
incentive travel more as a component of overall employee and business
development. This trend towards performance marketing is part of
changes in the incentive travel market, including:
The decrease of pure leisure travel in favor of trips that include
meetings and other business-related activities.
A greater emphasis on group, as opposed to individual, travel, to
facilitate business-related activities (such as meetings and seminars).
Greater use of non-sales criteria in awarding incentive travel,
including factors such as loyalty, spirit, and customer satisfaction.
As a result of these developments, and of the changing business
expectation of incentive travel, planners are getting more involved with
the goals of their client organizations.
6.3.3 Expositions
Expositions are generally large events at which vendors can display
and market their products or services to a contingent of potential
clients and buyers. The vendors or exhibitors pay a fee to set up their
displays, usually based on the size of the area their displays require.
Large expositions can cover hundreds of thousands of square feet of
exhibition space. The goals of the exhibitors are to attract attendees,
inform them of their product or service, and establish a contact that
will lead to a sale.
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Special Segments of Business Travel
Retreats
Travel planners
and performance
marketing
Display and
market
6.3.4 Conventions
The term convention refers to an event that combines both meeting and
exposition. The conventions market can be divided into those that are
sponsored by professional and trade associations, and those that are
sponsored by corporations. Associations account for about 70 percent
of the market, and corporations about 30 percent.
Conventions have the reputation for generating high expenditures on a
per visitor basis, as well as creating substantial economic impacts for
the host economy. The many different segments of the tourism industry
that benefit from convention expenditures include hotels, restaurants,
car rental, ground transportation, entertainment, and retail.
There are several reasons for the high level of involvement of the
government or the public sector with the convention business. First,
high development costs and limited potential for realizing operating
profits generally require that the government either own or subsidize
the center. With modern centers approaching 186,000 square meters (2
million square feet) of exhibition space, development of a center
almost always requires some form of public financing. Furthermore,
the actual convention operations generally lose money or, at best, break
even. This is due to the high cost of running a center, and to the fact
that competition among centers tends to keep rent rates low.
From the governments perspective, the financial risks posed by a
convention center are outweighed by their larger economic impact on
the host community and economy. It is the ability of a center to generate
visitor activity and revenues for such convention supporting businesses
as hotels, restaurants, entertainment, and the surrounding area that
provides the main reason for its development. The visitor expenditures,
in turn, generate employment, tax revenues, and generally boost the
areas economy, all of which serve to offset the centers operating loss
and create an overall net benefit to the area. To the government, the
operating loss it sustains is a worthwhile cost in light of the jobs, taxes,
and healthier economy it gains. Because of their size and the amount of
visitor activity they generate, conventions are often perceived as serving
an underlying public purpose.
Secondly, large convention events bring prestige to a city. Large
conventions or expositions are often covered in national and
international news. For the duration of the convention, the host city may
receive daily exposure and coverage from the media. From the
standpoint of the host citys visitor industry, this kind of media attention
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Chapter 6: Special Services and Products
Combination
meeting/exposition
High expenditures
Public
involvement
Economic impact
Prestige and
media attention
can amount to valuable advertising. Cities often use conventions and
other large events to create a positive image for themselves. In this
respect, conventions are often very desirable to government leaders.
6.3.5 Major Components of the MICE Market
The MICE market has become a highly specialized and important
segment of the tourism industry. As a result, there are several well-
established components of the MICE industry, each of which serves a
different function. These include: meeting planners, convention
centers, convention and visitor bureaus, and event managers.
Meeting Planners
Planning a successful meeting requires a great deal of logistical
coordination and oversight of many different areas. As a result, overall
responsibility for a meeting is often given to professional meeting
planners, many of whom specialize in different types of meetings. Some
planners are independent businesses that perform their services for client
organizations. Large organizations that hold meetings on a regular basis
may employ their own planners on staff. The responsibilities of a planner
will vary depending on the type of meeting being planned, facilities
being used, sponsoring or host organization, and other variables.
Responsibilities of a Meeting Planner
Planning a large meeting is a complex and demanding task. A meeting
planner is often responsible for both large issues such as the selection
of a site and the arranging of transportation as well as smaller ones
such as specifying each days menu. The primary areas of
responsibility for a meeting planner include the following:
Selecting, or providing options for, a meeting site.
Devising a marketing plan for the meeting, if necessary.
Planning transportation to and from the site (including negotiating
with airlines for discounted group air fares and arranging ground
transportation).
Arranging for and reserving hotel rooms for the attendees.
Working with the meeting facility personnel to plan the layout of the
meeting/exhibition room(s).
Organizing the exhibition, and working with exhibitors.
Ensuring that audio-visual equipment needs are met.
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Special Segments of Business Travel
Professional
coordinators
Planning for the registration process, including any necessary
requirements for accreditation of participants.
Arranging for various food and beverage needs.
Planning off-site tours and activities for nonparticipants and for
attendees during nonmeeting times.
As this list indicates, communication is vital to the planning process.
Even a moderately sized meeting will require virtually hundreds of
decisions, many of which require consultation among the sponsoring
organization(s), the planner, and the meeting facility.
Site selection is a crucial part of the planning process. Planners must
consider a number of criteria when choosing a site for an event. The
most important criteria, in descending order of importance, are:
Availability of hotels or other facilities for meetings.
Affordability of the destination.
Ease of transporting attendees to and from the location.
Transportation costs.
Distance traveled by the attendees.
Climate of the location.
Availability of recreational facilities such as golf, swimming, and
tennis (Braley, 1996, p. 73).
Convention and Visitors Bureaus
A convention and visitors bureau (CVB) is a nonprofit organization
that promotes the destination area it represents, usually a city, to travel
buyers. A CVBs mission is based on the premise that travel to the area
will benefit all supply sectors, such as accommodations, entertainment,
transportation, and food and beverage. As discussed in Chapter 10,
tourist expenditures can have a positive ripple effect throughout the
host economy. This is especially true of convention visitors.
CVBs reach tour wholesalers, meeting planners, and organizations
through several channels, including trade shows, direct sales, and
branch offices in major cities. Because the goal of a CVB is to have the
travel buyer make a commitment to the destination area as a whole, it
will generally not take a direct role in promoting individual businesses.
Rather, it will facilitate a coordinated effort by these businesses to gain
the buyers travel business.
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Chapter 6: Special Services and Products
Site selection
Non-profit
organization
CVBs' goals
The main responsibilities of a CVB are:
Developing a marketing strategy and destination image for the area.
Promoting the area to potential travel buyers and planners.
Facilitating the entire process of selling the area and hosting the event.
Promoting the areas public attractions and amenities to the visitors.
In the 1990s, Central and Eastern European countries have begun to open
their own CVBs in an attempt to improve their economies and utilize the
potential of their rich historical and cultural resources. The International
Association of Conventions and Visitors Bureaus (IACVB), through an
initiative called Partnership for Peace, is using the expertise of established
CVBs to assist these countries in the areas listed above. In another case,
the Philippine Conventions and Visitors Corporation conducted a
campaign to attract more small- to medium-sized conventions
(conventions with about 500-800 delegates). Convention City Manila, as
this campaign was called, specifically targeted this size of convention in
recognition of the resource and facility limitations of the host city. The
Corporation worked with airlines, hotels, and tour operators to build
attractive packages for prospective conventions.
Convention Centers
Convention centers are large facilities that accommodate many of the
events discussed in this chapter. Newly constructed and expanded centers
are extremely large, with some new and expanded centers providing
nearly two million square feet of exhibition space. For example,
McCormick Center in Chicago, which currently has 148,800 square
meters (1.6 million square feet) of exhibit space, is in the process of
expanding to over 186,000 square meters (2 million square feet) by 1997.
Convention centers earn revenue from a variety of sources, including the
rent of the facility, food and beverage service, and concession stands.
One of the key aspects of a convention center is its location. Centers need
to be within reasonable distance of a major airport, since most delegates
will usually arrive by air. Centers should also be close to, or incorporate,
adequate hotel accommodations. There should also be a variety of food,
retail, and entertainment establishments in the vicinity of the center and
the accommodations. These considerations are extremely important to an
organization that is considering a convention site, because they are
critical to the delegates attendance and enjoyment of the event.
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Special Segments of Business Travel
Development
of new CVBs
Profit-earning
centers
Location
A newer development in the operation of convention centers is their use
for smaller meetings, including those that do not require exhibit space.
New centers are increasingly being designed to accommodate small
meetings, so that space can be configured to provide a small meeting
atmosphere and service. These smaller meetings enable centers to rent
space during periods between major events, thereby increasing rent
revenues. This additional rent is becoming increasingly important to
convention centers. As discussed earlier in this chapter, centers often
operate at a loss, with the expectation that the economic activity they
generate will result in a net gain to the host community. However, as
governments have come under increasing budgetary pressure, centers are
being forced to sustain themselves without large governmental subsidies.
Conference centers are smaller than convention centers, and are an
important part of the business travel market. These centers vary in type
from executive centers that are geared toward top management, with
sophisticated audio-visual capabilities and quality amenities, to resort
centers, where the availability of recreational facilities is most important.
Event Managers
Once an event has been booked for the convention center, the center
operator assigns it to an event manager. From this point forward, the
event manager becomes the link between the center and the client,
whether it be a planner or the sponsoring organization itself.
One of the key responsibilities of an event manager is to ensure that the
event contract is followed. The contract between a convention center and
a client for a specific event contains provisions for all aspects of the event,
including the clients requirements for the event, the agreed upon rental,
and the mutual responsibilities and obligations of both parties. The
contract will also specify the consequences of cancellation of the event,
nonperformance by either party, and other contingencies. As planning and
preparation for an event move forward, adherence to the terms of the
contract must be enforced to prevent disputes and last-minute problems.
SUMMARY
The special travel segments discussed in this chapter represent some of the
faster growing areas of tourism. They are the result of greater product
differentiation in the industry, which in turn is being driven by changes in
the traveling public. Given the rapid growth and change of the tourism
industry, it should be expected that new services and products will continue
Chapter 6: Special Services and Products
132
Small meeting
space
Conference
centers
Link between
center and client
Event contract
133
Summary
to appear. The proliferation of special services and products will provide the
tourist of the coming century with an array of travel choices. Perhaps these
choices will enable tourists in the future to design their perfect vacations.
The special leisure travel segments discussed in this chapter share a
common goal of bringing tourists closer to the natural environment.
The success of these travel segments points to the tourism industrys
role in leading the worlds efforts to protect and preserve its
environmental and cultural resources.
The business travel market is coming under increasing pressure from
concerns over travel costs and the availability of new teleconferencing
technologies. Despite these pressures, the special market segments
covered in this chapter have shown strong growth in recent years.
Recognizing the greater role of the MICE market, cities are developing
and expanding their meeting and convention facilities at a rapid pace.
As discussed, large meeting events create business and publicity that
are extremely valuable for the host destination.
As the MICE market grows, planners, convention centers, and other
key components of the industry are becoming increasingly specialized
and sophisticated. CVBs will play a vital role in the future, as
destinations compete vigorously to fill their meetings and conventions
facilities. With the growing availability of facilities and destinations,
planners will have to ensure that they understand their clients needs in
order to best match them with what the market has to offer.
DISCUSSION QUESTIONS
1. What are several special segments of the leisure travel market? What
are their main characteristics?
2. What are the changes in the leisure travel market that have
facilitated the development of these special segments?
3. Can you identify the special business travel segments? How
important are they to the overall business travel market?
4. What are some of the reasons for the development of these special
business travel segments?
3
S
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t
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n
Tourism Marketing and Promotion
CHAPTER 7
Tourism Market Segments and Travel Psychology
CHAPTER 8
Tourism Marketing
CHAPTER 9
Tourism Research and Forecasting
CHAPTER 7
Tourism Market Segments and Travel Psychology
Learning objectives
To describe different ways to segment tourism markets.
To provide information on travelers by purpose and style of travel.
To provide information on travelers according to basic demographic
factors such as age, sex, and education.
To provide information on travelers according to life circumstances
including family composition, income, and disability.
To review the key factors and main approaches to tourist motivation as a
conceptual approach to segmentation.
To describe the links between tourist motivation and other topics in tourism
study.
Key terms and concepts
allocentric
anomic
business travel
ego-enhancement
family life cycle
market segmentation
multimotive
optimal arousal
pleasure travel
pull factors
push factors
psychocentric
religious travel
special interest travel
travel career ladder
Values Attitudes LIfestyle Segmentation (VALS)
visiting friends and relatives (VFR) travel
7.1 Introduction
Tourism places are settings for the behaviors and experiences of many
different types of visitors. As the gates of any large North American theme
park open, a variety of visitors begin their days entertainment: some are
teenagers in small groups, others are young couples, while families and
senior citizens also stroll through the gates. As intercontinental flights pull
into the major European airports, a further variety of visitors begin their
days travels: some attired in business clothes are met by colleagues, others
in sports uniforms are greeted by tournament organizers, several are
reunited with friends and relatives, while still others are escorted by tour
leaders to their waiting ground transport. As the afternoon wears on and
the lobby of a large Asian hotel fills with incoming guests, further
differentiation among tourists can be witnessed: there are young Asian
adults enjoying tea in the lounge, conventioneers wearing name badges on
their way to function rooms, well-dressed European middle-aged couples,
and a few Australian families with children already dressed for the
swimming pool and impatient to get there. Clearly on a global scale,
tourists fit into many possible categories, and it is the task of this chapter
to describe these differences.
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7
Tourism Market Segments
and Travel Psychology
Different types
of tourists
In Chapter 2, some consideration was given to measuring the flows of
international visitors rather than domestic visitors. Whether the intended
destination is international or domestic is one of the many ways in which
tourists can be categorized. This chapter will cover several other descriptive
or segmentation approaches, all of which are valuable in characterizing
tourists. Two preliminary points need to be made in relation to these
descriptions and tourist categories. First, any individual tourist has a range
of characteristics which may be useful in describing his or her behavior and
travel experience. For example, a traveler who is a father, a businessman, a
mountain climber, 35 years old, and affluent may not be adequately
described by generalizations about businessmen. Characterizing a tourist
by using only one factor is a limited approach and is unlikely to explain
individual behavior adequately for marketing or in tourism planning. The
second point is that the most appropriate segmentation approach or
description depends on the purpose of the user. For example, if one is
concerned with the development of tourism facilities in World Heritage
Areas for children, then a description of visitors based on lifestyle and age
will be quite useful. By way of contrast, for a tourism regional destination
marketer knowledge about the preferred activities of potential visitors,
rather than just their ages or gender, might be appropriate. The purpose of
this chapter is to describe many tourist types and their psychological needs,
and a full array of tourist descriptions will be presented.
7.2 Describing Tourists
by Purpose of Travel
The World Tourism Organization (WTO), the major intergovernmental
body concerned with tourism, uses a formal definition of the term
tourist that embraces several travel purposes:
TOURIST: Any person who travels to a country other than that in which
s/he has his/her usual residence but outside his/her usual environment for
a period of at least one night but not more than one year and whose main
purpose of visit is other than the exercise of an activity remunerated from
within the country visited. This term includes people traveling for leisure,
recreation and holidays; visiting friends and relatives; business and
professional; health treatment, religion/ pilgrimages and other purposes
(World Tourism Organization, 1996c, p. 24).
Note that this definition excludes day trip visitors (sometimes called
excursionists) who may cross an international border, the crew of transport
services (flight and cruise staff), nomads, military personnel, workers who
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Chapter 7: Tourism Market Segments and Travel Psychology
Characterizing
tourists
Non-tourists
cross international borders for employment reasons, long stay tourist
workers who are away for more than one year, international students or
trainees, backpackers, long stay budget travelers, and all domestic visitors.
Among international visitors there is considerable variation in purpose
or type of visitor. For example, if all international inbound tourism is
considered, Switzerland and France receive almost the same total
number of border crossings (about 130 million). For Switzerland,
however, only 13 million of these are overnight visitors while for
France the figure is 60 million.
WTO collates figures for arrivals by purpose of visit into three
categories: leisure, recreation, and holidays; business and professional;
and other, which includes visiting friends and relatives, health
treatment, religion, and pilgrimages and further unspecified groupings.
Table 7.1 below provides some contrasts between select tourism
destinations by purpose of travel as defined by the three categories.
The figures presented in Table 7.1 indicate the variation in travel
purpose among holiday-recreation dominated destinations,
destinations where the holiday market is of modest importance, and
low holiday-recreation destinations.
7.2.1 Leisure vs. Business Travelers
Leisure comprises the core of what is commonly accepted as tourism.
Among host communities, leisure travel is associated with people taking
photos, buying souvenirs, having limited contact with the residents, and
staying for short periods of time. The leisure travel market is so large for
most destinations that broad generalizations about the market are difficult
to make; thus, most of the efforts of marketers and researchers to
understand this group involve subdividing the overall market into
categories of people who share similar sociodemographic or psychological
characteristics. This process is formally known as market segmentation.
Business travel can be defined as including attending meetings and
conferences, training and sales missions, and general promotional and
professional contact work. For the U.S. market, about 25 percent of the
total travel market is business-related. Business-related travel is usually
organized by travel agents and involves a restricted schedule of activities
and places visited. Pleasure travel, by way of contrast, is seen as either
independently organized or organized through a travel agent and is likely
to have a greater regional spread with more diverse destinations. In
general, pleasure travel tends to be dispersed across destinations while
business travel is concentrated in key economic centers.
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Describing Tourists by Purpose of Travel
Categories
of visits
Necessity to
subdivide market
1
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Bermuda Hawaii Indonesia Australia Hong Kong
United
Kingdom
Pakistan
Leisure, Recreation and Holidays 82.6% 79.4% 74.4% 62.3% 54.1% 43.2% 19.8%
Business and Professional 10.6% 11.4% 23.2% 13.7% 30.5% 26.6% 28.5%
Other (includes VFR, health,
religious pilgrimages)
6.8% 9.2% 2.4% 24.0% 15.4% 30.2% 51.7%
Total Visits (000's) 413 6,326 3,403 2,996 19,154 8,938 379
Table 7.1: Percentage Visitation to Selected Destinations by Purpose of Travel
141
Describing Tourists by Purpose of Travel
Conference and convention travel have been recognized internationally
as core components of business travel. Many international destinations
now compete for a share of the world convention and business
meetings market. Many U.S. cities have set aside specialized areas
adjacent to their convention centers as tourist zones so that the business
traveler can enjoy a safe and distinctive urban recreational setting. The
appeal of business travelers to the destination marketers lies in their
high spending in hotels and concentration of activities such as
shopping, casino gambling, and evening entertainment.
One of the important developments in business travel is the rise of what
might be called hybrid travel, which can be defined as combining
traditionally different travel purposes in one trip. For example, hybrid
travel exists when business travelers bring their spouses to a
convention or when a family holiday is closely linked to or built around
the business travel requirements of a parent. Another example is the
special category of incentive travel which is business-related with
respect to trip sponsorship and organization, but pleasure-oriented in
terms of focus. The traveler receives the trip as a reward for
outstanding performance (usually in sales) and aside from one or two
motivation sessions, the trip is geared to fun and new experiences.
7.2.2 Visiting Friends and Relatives (VFR)
Tourism statistics indicate that visiting friends and relatives (VFR) travel
is a large segment of international travel, and is linked to immigration
between countries. For example, Barbados is a popular vacation destination
for a large segment of the Afro-Caribbean community in London because
of strong family ties between the two areas, and frequent VFR trips
between residents of the U.S. and Canada are not uncommon. Travelers
whose journeys are focused on their desire to be with friends and relatives
are important because their visits are likely to be repeated, and because the
economic impact of these travelers is substantial due to their longer lengths
of stay in hotels than holiday and business travelers.
The visiting friends and relatives trip purpose can be differentiated into
subcategories. For example, those who visit friends have been
observed to have shorter holidays whereas those who visit relatives
have more long distance trips and longer length-of-stay patterns. VFR
subcategories can differ significantly in their holiday planning, travel
styles, and media usage. VFR travel can be encouraged in a number of
ways, including using local residents as a source of promotion,
Conventions
Hybrid and
incentive travel
Repeated and
longer visits
Encouraging
VFR travel
providing incentives and information to local residents to invite friends
and relatives, undertaking promotions in places where significant
numbers of friends and relatives reside, staging homecomings or
reunions for former residents or friends and families, and providing
incentives for former residents or their families to return home. VFR
tourism is important as a forerunner to more conventional pleasure
travel between regions, and thus in promoting tourism more generally.
7.2.3 Special Interest Travel
Another broad classification of travel purpose can be described as
special interest, a term which embraces such diverse activities as
gambling, adventure travel, sports-related travel, and cultural pursuits.
Special interest travel can also be seen as a part of alternative or
ecotourism discussed in Chapter 6.
Recreational Travel
In contrast with other leisure travel, special interest travel tends to
include a single or dominant focus to the tourists holiday taking and
an enjoyment of specific on-site activities. The special interest traveler
is likely to be an enthusiastic hobbyist, a club member, or a devotee of
a particular product or experience. Yachting holidays are an example
that illustrates the specific activities that characterize special interest
tourism. The different yachting styles include bareboat cruising,
skippered cruises, luxury yachting, and flotilla yachting. These
variations provide greater access for more people of varying levels of
skill and socio-economic status.
Special interest travel also includes specialty accommodation styles
which organize travelers experiences, such as health farms, coastal
resorts, bed and breakfast inns, and backpacker hostels. One study
noted that specialty accommodation guests appear to be better
educated, have higher incomes, and occupy managerial, professional or
executive positions. They spend more time planning their trips than
conventional accommodation users, and pursue different activities
while on holiday. They appear to favor nonbeach outdoor recreation
activities including bird-watching, hiking, swimming in lakes or rivers,
walking, and horseback riding (Morrison, Hsieh, & OLeary, 1995).
As noted earlier, special interest tourism is often associated with one
dominant activity. In a study of visitors to the Rotterdam Museum park, a
complex which includes a museum for modern architecture, a museum of
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Chapter 7: Tourism Market Segments and Travel Psychology
Hobbyists
Specialty
Accommodation
Guests
natural history, a local art museum, a gallery for temporary art exhibitions,
and a fine arts museum, over 50 percent of the respondents said that the
fine arts museum was the primary reason for their visit to Rotterdam and
20 percent were motivated primarily by one of the other museums in the
complex. For urban tourism in this part of Europe, museum visiting is a
valued and primary special interest activity with respondents giving
explanations of their motives with phrases such as a museum visit
provides food for thought, offers opportunity to learn something, and
enriches their life (Jansen-Verbeke & Van Rekom, 1996).
Religious Travel
Travel for religious purposes ranges across a spectrum of intensity. At
the less intensive end of the spectrum certain religious sites may be
visited as a part of the attractions of a region. European cathedrals, for
example, may be appreciated for their physical splendor and their
architectural beauty. At a more intense level the supposed healing
powers of particular holy places such as Lourdes, France may be one
of several points of interest of a travelers holiday in a country. At the
most intensive level, pilgrimages to sites which define the religion of
a particular group may be the sole purpose of the travel, and indeed for
sites such as Mecca in Saudi Arabia or the Vatican as the center of
world Catholicism, tourism is a major management concern.
The Islamic pilgrimage (the Hajj) to Mecca, for example, is an activity
of enormous significance in the contemporary world economy. It was
noted in Table 7.1 that the other purpose of visiting for some
countries was a large percentage of their total visitation. For a country
such as Saudi Arabia, more than 55 percent of all visitors fall into this
category and most of these are tourists motivated by strong religious
concerns. Devout Muslims from nations such as Bangladesh, Chad,
Mali, and Somalia may be using their full economic resources for this
one significant act of international travel. There are also affluent
Muslims staying in first class hotels who make regular pilgrimages to
fulfill their spiritual needs. A further feature of the pilgrimage to Mecca
is the concentration of the activity as the estimated two million visitors
(approximately 50 percent of the total are domestic pilgrims) converge
on a single site within a specific one-month period. A visit to Mecca is
a contemporary example of the continued importance of religious travel
as a major organizer of tourism and of the lives of the faithful.
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Describing Tourists by Purpose of Travel
Dominant
activities
Levels
of intensity
Pilgrimages
to Mecca
7.2.4 Group vs. Independent Travelers
There are a number of terms used to describe the travel arrangements
used by tourists. At the broadest level a distinction can be made between
those who travel independently and make all their own arrangements and
purchase decisions and those who travel in groups. Independent
travelers, sometimes referred to as F.I.T.s or free independent travelers,
may use travel agents in organizing their holidays but do not participate
in an organized group tour. Other terms for group travel include package
tours, group inclusive tours, inclusive holidays, and guided tours.
In the early years of tourism much of the leisure and holiday travel,
particularly in Europe, was package tourism where the different parts
of the total holiday were integrated into one product and sold at a
favorable price. Much contemporary tourism from Asian countries to
Western countries is still sold as package tourism. For example, the
Japanese tourist who pays one price for a combination of airfare,
accommodations, ground transportation, and admission to attractions
is a true package tourist. In the 1990s, packages have become more
flexible and it is possible for customers to buy an accommodation-only
package and make their own arrangements for ground transport.
Traditionally, package tourists traveled and stayed together and were
managed by a tour leader, a role also described as a tour manager,
guide, or courier. This individual usually stayed with the travel party
for the entire duration of the holiday and assisted with such matters as
currency exchange, dealing with residents, organizing the daily
itinerary, and generally facilitating the travelers holiday experiences.
The advantages of group travel include highly competitive prices and the
elimination of many travel difficulties for the inexperienced traveler.
Group travel is also popular with youth tourists as well as with senior
citizens requiring special care. Guides can serve an important function
by facilitating entry into special places and providing an ongoing source
of information to interpret the visitor environment.
7.3 Sociodemographic Factors
and Life Circumstances
7.3.1 Age
Over 25 percent of the U.S. population is currently over 50 years old,
and this figure is predicted to grow to 30 percent in another 50 years.
This seniors market segment is generally wealthy and has more time to
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Chapter 7: Tourism Market Segments and Travel Psychology
Package tourism
Traditional and
more flexible
packages
Advantages to
group travel
travel than ever before. It has been suggested that this market segment
travels more frequently, goes longer distances, stays away longer, and
relies more on travel agents than any other segment of the population.
In fact, senior travelers tend to be highly social, and the resort
complexes set up to provide for these travelers involve hectic schedules
of physical and recreational pursuits. Much of the importance of the
senior market is due to changing social role expectations and the
availabilities of health care facilities, especially in countries such as the
United States. These changes are removing the physical and
psychological limitations that constrained the elderly in earlier eras.
A particularly notable segment of senior travelers is the so-called
snowbirds. These travelers, complete with their mobile homes or
recreation vehicles, seek the winter sun in the southern part of the
United States, in such destinations as Arizona, Texas, and Florida.
Parallel examples of this sunseeking behavior of older mobile tourists
take place in Europe and Australia.
Another significant age segment of travelers is the long-stay budget
traveler. These travelers are typically less than 30 years old and may
spend up to 12 months moving in a circuit of Southeast Asian and
Australian destinations where there are inexpensive backpacker
hostels set up to support their budget and long-stay travel style. The
total travel expenditure of these travelers, although spread over a longer
period of time, is greater than most other international tourists and is
focused on activities and tours, not accommodation purchases.
7.3.2 Gender
An assessment of gender issues in tourism reveals that substantial
changes have taken place in this market in the last twenty years.
Motivations underlying womens travel include escaping from a routine
or domestic environment, changes in personal circumstances, such as
a family death, a broken romance or a change in marital status, a desire
to experience the thrill of danger, and a desire by women to
demonstrate their own abilities, independence, and competence.
Women also play an important role as facilitators of others leisure
(particularly husbands, children, parents, and working colleagues)
while considering their own leisure and travel needs as secondary.
Women are also playing an increasingly important role in the business
travel market. Over one-third of U.S. business travel is undertaken by
women and the percentage of women travelers in general appears to be
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Sociodemographic Factors and Life Circumstances
The senior market
"Snowbirds"
Young budget
travelers
Women's travel
motivations
Businesswomen
growing. The travel concerns of businesswomen revolve around core
features such as security and practical items such as ironing facilities
and full-length mirrors.
7.3.3 Education
Aside from income, one of the most important factors in determining the
propensity to travel is the strong link between travel and education.
Numerous studies have demonstrated that as an individuals educational
attainment increases, so does his/her desire to travel. Even among youth
travelers, the largest percentage will be associated with college students
in search of new experiences and opportunity for self-discovery. So
important is travel to this group that the majority feel that if travel were
not individually affordable, it ought to be government subsidized.
7.3.4 Other Factors
The family life cycle, a term originating from sociology, is a
significant technique which assists the understanding of travel-related
purchasing. Nine phases of the family life cycle are commonly
recognized and are presented in Table 7.2.
The family life cycle concept should not be confused with lifestyle.
The latter term is a broad label for a group of market segmentation
approaches based on activities, habits, and type of products purchased,
such as a sports or health-oriented lifestyle. Alternative lifestyle groups
represent important travel markets for some destinations due to their
purchasing power and high levels of mobility. The usefulness of this
approach, as with other broad differentiations of the tourism market,
ultimately depends on how well the markets can be reached by the
interested tourism operators.
Disabled or handicapped tourists represent another group whose life
circumstances affect their travel behavior. Disability comes in many forms
and physical and intellectual impairment require very different services
and facilities. Traditionally, legislative and management efforts on behalf
of disabled travelers have focused on providing wheelchair access, such as
in national parks and within hotels and restaurants. Increasingly there is a
recognition that the enjoyment of the environment such as trails for the
partially sighted, sign language provision for the deaf, and other auxiliary
services are valuable additions to the total tourism product. A study of
Australian facilities noted that provision of services for the disabled may
also serve the seniors market or be useful for young children at certain
stages of development (Sproats & Murray, 1994).
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Chapter 7: Tourism Market Segments and Travel Psychology
Tendency of
travelers being
educated
Disabled travelers
1
4
7
S
o
c
i
o
d
e
m
o
g
r
a
p
h
i
c

F
a
c
t
o
r
s

a
n
d

L
i
f
e

C
i
r
c
u
m
s
t
a
n
c
e
s
Source: Adapted from Lawson 1989.
Stage Characteristics Travel Consumer Behavior
Bachelor Young: not living at home
Few financial burdens - some vacation
purchase, highly recreation oriented.
Newly married No children
Initially financially well off- more
vacation purchasing.
Full nest - Stage 1 Youngest child under 6 Travel restricted.
Full nest - Stage 2 Youngest child over 6
Finances improving - some family
holidays.
Full nest - Stage 3 Older married with dependent children
Vacations just one part of the
purchasing mix.
Empty nest - Stage 1
Older married - no children at home,
still working
Optimum financial position. Strong
vacation purchasing.
Empty nest - Stage 2 Older married retired
Vacations decline - depending on
finances.
Solitary survivor Still working Purchasing power high - may travel
Solitary survivor Retired
Package tour options - security
sociability needs high
Table 7.2: Consumption As It Relates to Life Cycle
7.4 Approaches to Tourist Motivation
The preceding discussion has considered a range of factors which help
describe different kinds of tourists. In trying to understand visitors,
researchers in tourism have developed travel motivation models. The
aim of these models is to answer the question, Why do people travel?
or, more precisely, What drives or motivates people to undertake
certain kinds of travel? It is important to distinguish questions about
travel motivation (why do people travel?) from questions relating to
destination choice (why do people go to a certain place?) The first
question seeks to understand the individual psychology of the traveler
whereas the second question requires us to both describe the important
features of a tourism destination and assess how well these features
will satisfy the potential travelers needs.
One widely used distinction is that between push and pull factors in
tourist behavior. Push factors refer to forces arising from within the
individual and from the individuals social context. These are true
motivational forces. Pull factors, by way of contrast, refer to features of
a destination which are thought to be likely to attract people to a specific
location. It is misleading to refer to these pull factors as motivational
forces - instead they are properly described as destination attributes
which may fulfil peoples motives for traveling. For example, a push
factor may be a strong need for excitement and adventure. A destination
may have white water rafting as an available activity but it is misleading
to describe this as a motivating force in tourist behavior. The problem
with assigning motivating power to activities or destination features
(such as beautiful scenery or nightlife) is that any one activity can
represent a mix of motives, and different tourists may value the same
destination attributes for different reasons. Thus one individual may
indeed find white water rafting suits a need for adventure and excitement
while another may see it as suiting a need to become more skillful at
physical activities, while a third may be interested in the rafting only for
its social value and as an item for conversation and self-esteem.
There are three sources of information on tourist motivation. At a
general level there is the history of tourism itself and some valuable
sociological commentaries on the changing needs of travelers in
different eras. At a more specific level of analysis, there have been
systematic and focused attempts to produce theories of tourist
motivation, an area of study which draws on a long history of
psychology and motivation. A third source of information resides in
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Chapter 7: Tourism Market Segments and Travel Psychology
Motivation vs.
choice
Different reasons
for motivation
the practice of market research and survey studies discussed in Chapter
9. Such work is often conducted by consultants for national or state
level tourism organizations and is a source on travelers needs.
7.4.1 History of Tourism and Motivation
Chapter 1 described the history of tourism, particularly as it unfolded
in Europe. From a motivational point of view, several broad trends or
themes can be extracted from the history of pleasure travel. Rest,
relaxation, escape from the heat, and curiosity are all reflected in the
travel undertaken by Roman society. The original pilgrimages of the
early Middle Ages added a religious and spiritual purpose to travel.
The Grand Tours of Europe undertaken by young gentlemen of the
seventeenth and eighteenth centuries were often rather indulgent
adventures, but the practice gained favor as an educational event to
acquire sophistication and worldliness for a certain social class of the
period. Health and physical well-being were primary motives in the spa
and mountain tourism of nineteenth century travel, and included an
emphasis on relaxing and enjoying natural settings. In North America
as well as Europe, the early twentieth century with large ocean-going
liners, the use of the automobile, and the development of railways,
grand hotels and resorts, generated many different options for tourists.
The social value of certain kinds of holidays emerged as a force for
social differentiation, and ones travel style, as well as ones
possessions, became social status attributes.
In the last half of the twentieth century, increasing diversity in
destinations and travel products has permitted the flowering of all of
these historically important motives. There are destinations which
specialize in travel for escape, for health, for education, for spiritual
renewal, for self-indulgence, and for developing skills. One additional
motivation in current travel is nostalgia or comparison with earlier
societies, such as when travelers join the Orient Express, cruise the Nile,
follow Route 66 in the U.S. or trek along the Silk Road of Central Asia.
7.4.2 Theories of Travel Motivation
The broad social trends evident in any review of the history of travel
are refined by tourism researchers who study travel motivation.
As presented in Table 7.3, a good theory of tourist motivation must organize
research efforts, must be easy to explain and appeal to its users, must be
suitable for objective studies, must consider the total needs of travelers and
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Approaches to Tourist Motivation
Historical motives
for pleasure travel
Current travel
motives
not limit its focus to one need, must be able to manage dynamic changes
within individuals and society, and must balance needs influenced by other
people with those determined by individuals themselves. The discussion
below considers five approaches to tourist motivation in light of the
requirements for a sound theory outlined in Table 7.3.
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Chapter 7: Tourism Market Segments and Travel Psychology
Attribute Description
The task of the theory
Must be able to integrate existing tourist needs,
reorganize the needs, and provide a new orientation for
future research
The appeal of the theory
Must be appealing to specialist researchers, useful in
tourism industry settings, and credible to marketers and
consumers
Ease of communication
Must be relatively easy to explain to potential users and
be universal (not country specific) in its application
Ability to measure travel motivation
Must be amenable to empirical study; the ideas can be
translated into questions and responses for assessment
purposes
A multimotive vs. single-trait approach
Must consider the view that travelers may seek to satisfy
several needs at once; must be able to model the pattern
of traveler needs, not just consider one need
A dynamic vs. snapshot approach
Must recognize that both individuals and societies
change over time; must be able to consider or model the
changes that are taking place continuously in tourism
The roles of extrinsic and intrinsic motivation
Must be able to consider that travelers are variously
motivated by intrinsic, self-satisfying goals and at other
times are motivated by extrinsic, socially controlled
rewards (e.g., others' opinions)
Table 7.3: The Core Requirements of a Sound Theory of Tourist Motivation
Allocentric vs. Psychocentric
The work of Stanley Plog represents an early attempt to classify people
according to psychological types and to relate these behavior patterns
to travel behavior (Plog, 1974). Plog devised a personality continuum
ranging from psychocentric (inward orientation or small focus of
concern) to allocentric (outward orientation, varied interests). For
allocentric people travel is a way to express their confidence,
inquisitiveness and curiosity. For psychocentric people, travel is
focused on close destinations, participation in familiar activities, and
cautious travel behavior. In Plogs account of tourist motivation, exotic
destinations fulfil the inquisitive curious motives of allocentrics and
close-to-home destinations fulfil the motives of the less confident and
more anxious psychocentrics. According to Plog, there are some
people whose travel behavior fits the psychocentric pattern due to
Theory
requirements
Plog's theory
financial constraints but as their life changes (such as a college student
who begins to earn a substantial income), they will gradually move to
allocentric destinations. Weaknesses of this approach to travel
motivation are its failure to consider multimotive behavior and
unresolved questions of how to measure the underlying allocentric-
psychocentric dimension. Nevertheless, in an era when psychological
assessment of travelers was limited, Plogs work highlighted the need
for tourism managers to understand more about traveler motivation.
Anomic vs. Ego Enhancement
A sociologically based approach to tourist motivation developed by G.
Dann advances two concepts, anomic and ego enhancement, which are
viewed as more sophisticated explanations of the broad travel need of
escape (Dann, 1977). In the study based on tourists to Barbados,
Dann described as predominantly anomic those tourists who were
from large mainland U.S. and Canada cities, lived in competitive,
stressful work environments, and were occupied with the demands of
nuclear families. On the other hand, the ego-enhancement tourists
were frequently of lower socio-economic status, often female, and
emphasized the status and social value of their Caribbean holidays.
Dann conceived of these two tourist types as opposite ends of a single
travel motivation continuum. While this work was innovative and
useful in refining the concept of escape, like Plogs work it is limited
in its single trait approach to the rich variety which historical and
psychological theories of motivation suggest are likely to be at work.
Optimal Arousal
A third tourist motivation theory argues that tourist and leisure behavior
takes place within a framework of optimal arousal and incongruity (Iso-
Ahola, 1982). Iso-Ahola suggested that while individuals seek different
levels of stimulation, they share the need to avoid either overstimulation
(mental and physical exhaustion) or boredom (too little stimulation). The
study noted that leisure needs change during the lifespan and across places,
thus introducing a potential dynamic element into his categorization of
visitors. This theory emphasizes the participants feelings of self-
determination and competence as the means of understanding tourist
motivation, and on the experience in which travelers are engaged and on
their actual participation in travel behavior rather than abstract assessments
of life purposes. A weakness of this theory is the lack of specificity in
measuring preferred stimulation levels or the relationships between self-
determination, competence, and preferred stimulation.
151
Approaches to Tourist Motivation
Another single-
trait theory
Stimulation levels
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Chapter 7: Tourism Market Segments and Travel Psychology
Values Attitudes Lifestyle Segmentation (VALS)
A further approach is known as the Values Attitudes Lifestyle
Segmentation (VALS) system. Broadly based on the pioneering work
of the psychologist Abraham Maslow, the VALS system generally
groups consumers into nine broad segments with labels such as High
Achievers or Emerging Activitists. Different variations of VALS are
used in North America, Australia, and Europe, principally as
consultant tools to relate purchases of all sorts of products to a
combined grouping of peoples motives for consumption,
sociodemographic and occupation profiles, and existing consumer
ownership. Its use in travel and tourism is growing but there are some
concerns over its limited explanatory power for travel or holiday taking
motivation, since profiles based on consumers of tangible goods may
not apply to travel. Nevertheless market segmentation approaches
using VALS style systems are in current commercial favor and may
offer promise in the area of tourist motivation.
Travel Career Ladder
An explicit theory of tourist motivation which has been developed is
that of the travel career ladder (Pearce, 1988; Pearce, 1991). The travel
career ladder approach argues that travel behavior reflects a hierarchy of
travel motives (see Figure 7.1). Based on Maslows hierarchy of needs,
the steps or levels on the travel career model may be likened to a ladder.
By expanding and extending the range of specific needs at each ladder
level, a comprehensive and rich catalogue of the many different
psychological needs and motives can be realized. The travel needs
ladder retains Maslows premise that lower levels on the ladder usually
have to be satisfied before the person moves to higher levels of the
ladder. Nevertheless, it is the total pattern of travelers motives which
describes them rather than a focus on any one single motive. For
example, a visitor to Orlando, Florida who goes to EPCOT center at
Disney World might be motivated to do so by the pleasant, safe setting
to entertain a child and develop family experiences of togetherness, and
to acquire knowledge about American culture. In this way, several levels
of the travel needs ladder are working together for a rich multimotive
picture of travel motivation. This flexibility and variability recognizes
that motivation may change over time and across situations.
In the travel career ladder model, destinations are seen as settings
where vastly different holiday experiences are possible, and where
travelers select activities and holiday experiences among those offered
to suit their personal psychological and motivational profile. In this
Consumer groups
A hierarchy of
travel motives
way, the travel career ladder model is a dynamic, multimotive account
of travel behavior that requires individual tailoring to specific
situations. The context or setting helps frame the way in which the
travel needs ladder questions are asked.
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Approaches to Tourist Motivation
Figure 7.1: The Travel Career Ladder
People tend to ascend the
ladder with travel
experience
Overall pattern of
motives is
the important
feature
Higher level
motives include
lower level motives.
One motive at a
time tends to be
dominant
Overall pattern
of motives is
the important
feature
Self-directed
Need for self-development
Need for growth
Need for curiosity/mental
stimulation
Need for mastery, control
competence
Need for self-efficacy
Need to repeat intrinsically satisfying
behaviors.
Internally oriented
Need for sex, eating, drinking
Need for relaxation (manage arousal
stimulation level)
Need for self-actualization
Need for flow experiences
Self-directed
Need for security
Other directed
Need for status
Need for respect recognition
Need for achievement
Other directed
Need to reduce anxiety
about others
Need to affiliate
Other directed
Need to reduce anxiety
Need to predict and
explain the world
Self-directed
Need to give love, affection
Externally oriented
Need for escape, excitement,
curiosity
Need for arousal, external
excitement, stimulation
Fulfillment needs
Self-Esteem/development needs
Relationship needs
Safety/security
Physiological needs
7.4.3 Market Research and Motivation
A third contribution to tourism motivation studies lies in the work done
by market research organizations. These studies typically consist of
large scale surveys that look at travel motivation, destination attributes,
characteristics of the type of trip undertaken or preferred, and
sociodemographic characteristics. For example, the Pleasure Travel
Market Survey, which consists of in-house interviews conducted in a
number of countries for U.S. and Canadian tourism authorities, has a
Surveys
list of travel philosophies which are parallel to travel motives. The
same survey also asks respondents to characterize trip attributes. In
Table 7.4 the travel philosophies and trip-driven attributes are both
listed, with motives represented in bold. Survey studies like those are
integrated with other information to provide information of practical
use for marketers and analysts.
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Chapter 7: Tourism Market Segments and Travel Psychology
Item
Mean Importance
Rating*
Going to places I haven't visited before 3.26
Outstanding scenery 3.16
Meeting new and different people 3.11
Opportunities to increase one's knowledge 3.10
Interesting rural countryside 3.10
Destinations that provide value for
my holiday money
3.01
Personal safety 3.01
Arts and cultural attractions 2.98
Public transportation such as airlines 2.97
Experiencing new and different lifestyles 2.97
Having fun, being entertained 2.92
Standards of hygiene and cleanliness 2.89
Visiting friends and relatives 2.86
Historical, archaeological or military
sites, buildings, and places
2.85
Just relaxing 2.85
Escaping from the ordinary 2.85
Being together as a family 2.84
Inexpensive travel to the country 2.79
The best deal I could get 2.78
Availability of pre-trip/incountry tourist
information
2.78
Being able to communicate in English 2.72
Inexpensive travel within the country 2.71
Nice weather 2.69
Trying new food 2.67
Shopping 2.66
Table 7.4/1: Trip-Driven Attributes for Australian Outbound Travelers
*4 = Very impoirtant; 1 = not all important.
155
Summary
Item
Mean Importance
Rating*
Ease of obtaining visa 2.61
Visits to appreciate natural
2.59
ecological sites (forests, wetlands, etc.)
Talking about the trip after I returned home 2.55
Meeting people with similar interests 2.55
Getting a change from a busy job 2.47
2.45
Ease of exchanging the currency 2.40
Getting away from the demands of home 2.36
Finding thrills and excitement 2.33
Exotic atmosphere 2.30
Unique or different immigrant culture 2.27
Ease of driving on my own 2.25
Advertised low cost excursions 2.24
Environmental quality of the air, water, and soil 2.24
Indulging in luxury 2.20
Visiting places where my family came from 2.19
Activities for the whole family 2.16
Going places my friends have not been 1.97
Being able to communicate in the foreign
language
1.96
Outdoor activity 1.92
Experiencing a simpler lifestyle 1.91
Doing nothing at all 1.83
Exercise and fitness opportunities 1.55
Roughing it 1.50
Unique or different native cultural
groups such as Eskimo and Indian
Table 7.4/2: Trip-Driven Attributes for Australian Outbound Travelers
SUMMARY
This chapter has suggested that there are numerous ways to describe
visitors. Initially the focus of the discussion was concerned with key
travel purposes, particularly as reflected in the collection of international
tourism statistics. The categories of pleasure travel, business travel,
visiting friends and relatives, religious travel and special interest travel
*4 = Very impoirtant; 1 = not all important.
were all considered and some defining features and illustrative studies of
these groups were presented. Next, some sociodemographic descriptions
of visitors were reviewed with attention being paid to senior and youth
travelers and to gender-based studies in travel. Further consideration was
given to independent travelers vs. package tourists. It was also noted that
peoples life circumstances strongly influence travel opportunities and
the concept of family life cycle was reviewed together with a brief
discussion of lifestyle and disability. In order to provide a more advanced
understanding of traveler differences, the topic of tourist motivation was
considered. An important distinction was drawn between questions such
as why people travel vs. why people go to specific destinations. The
scope of travel motivation information was reviewed by considering
three sources of material. A brief consideration of market survey work
and historical records of traveler motivation was provided while a more
extensive discussion of tourist motivation theories together with their
strengths and weaknesses was undertaken.
DISCUSSION QUESTIONS
1. What are some physical ways to categorize travelers? What are the
limitations of these categories?
2. In what ways are business travel and pleasure travel coming closer
together?
3. In what forms does religious travel still persist?
4. Distinguish between special interest travel and mainstream tourism.
5. What are some general family life cycle influences on travel?
6. What are some ways in which a theory of tourist motivation can be
useful?
7. What approaches could be combined to measure travel motivation?
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Chapter 7: Tourism Market Segments and Travel Psychology
CHAPTER 8
Tourism Marketing
Learning objectives
To understand the marketing process and general marketing concepts.
To understand the different marketing philosophies.
To understand the difference between marketing services and marketing
goods.
To understand the purpose and major elements of the marketing plan.
Key terms and concepts
buyer readiness states
competitive analysis
environmental analysis
market mix
market segmentation
market trends
marketing
marketing philosophies
marketing plan
marketing strategy
product life cycle
pull strategy
push strategy
service characteristics
8.1 Introduction
To compete in todays tourism marketplace, organizations in both the
public and private sectors must know who their customers are and what
they want. They must also be able to communicate the availability of
tourism products and services to potential customers and convince them
to become actual customersto travel to a destination or attraction that
has been developed or to purchase the products and services such as a
tour package or airline ticket. These activities are what marketing is all
about. For countries that expect to gain from tourism activities, the
marketing of the country as a unique travel destination may be
undertaken by the national tourism administration (NTA). For
communities that hope to compete for their share of visitors, the
marketing of a distinctive culture, attraction or outstanding amenities
might be the central theme. For firms in the private sector, success may
be dependent on effective marketing and selling activities of the airline,
hotel chain, or tour company. This chapter provides a broad discussion
of marketing concepts as a foundation for understanding the importance
of marketing to the tourism industry and the global tourism economy.
8.2 Marketing Concepts
Marketing comprises all the activities and processes used to bring
buyers and sellers together, including creating, distributing,
promoting, pricing and innovative ideas to facilitate satisfying exchange
relationships in a dynamic environment (Pride & Ferrell, 1995, p. 4).
159
8
Tourism Marketing
Making potential
customers real
customers
When marketing matches the right product or service with the right
customer at the right place and the right time, the results are a profitable
business and a satisfied customer.
How an organization approaches marketing may reflect any of several
different basic marketing philosophies. As in any other field, theories
and their application develop and change over time so that the
marketing practices used by an organization in the travel industry
today will differ from those used by a similar organization in the past.
While practices may vary, they all reflect in varying degrees one of the
following marketing concepts or philosophies.
Production Concept. This concept presumes that customers are
mainly interested in price and availability. Managements job is,
therefore, to produce the service as efficiently as possible keeping
costs low so prices, which are the main product feature, can be
competitive. Too often, under this concept, management tends to
adopt a commodity mentality, forgetting the customers shifting
desires and needs. In the early stages of tourism development from
the 1950s to the 1970s, for example, it was not uncommon to find
hotels offering only a single type of accommodation or to find one-
or two-item restaurants which greatly simplified business practices
for owners and operators. Customers could take it or leave it; and in
a noncompetitive environment, owners would do very well. Todays
markets, however, are based on the concept of choice and
production must consider optimum ways of providing for choice
while containing costs that are imposed by variety.
Product Concept. This concept is similar to the production concept,
but focuses on the service or product itself. In this case, the goal is
to produce someones, usually the inventors, dream of the product
or service with the expectation that a market will follow. Build it
and they will come best expresses this philosophy. The fast food
industry is an applicable example of both production and product
conceptslimited menus, controlled production, fast service and low
pricesappealing to a wide market of consumers around the world.
Selling Concept. This concept maintains that intense selling and
promotion efforts are needed to ensure sufficient sales. Should sales
begin to drop, the response is to increase sales efforts and to allocate
more money to promotion then to production. It is common, for
example, for firms to offer discounts or special promotions when sales
begin to decline without considering factors such as levels of customer
satisfaction or revenue contribution. The fallacy is that if the cause of
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Approaches to
marketing
Price and
availability
Service or product
Promotion efforts
the decline rests with a product weakness that needs to be corrected,
such as poorly maintained or worn-out facilities or poor service, or
with an external event such as a change in foreign exchange rates,
reducing prices may result in higher volume but lower profitability.
Marketing Concept. With growing global competition, the marketing
concept has come into vogue. Marketing focuses on responding to
consumer demands and competitive positioning. This requires the ability
to create and maintain customer satisfaction and to channel all activities
of the organization toward the successful production and delivery of
goods and services as defined by customers and to attain this at a profit.
This philosophy suggests that a successful enterprise is one that can not
only determine the wants and needs of its target market but also deliver
those things more effectively and efficiently than its competitors.
Societal Marketing Concept. This concept considers the importance
of maintaining the consumers and societys well-being in the
marketing equation and product decisions. Broader issues such as
the environment, scarcity of resources, social services, and
population growth are incorporated in the marketing practices. For
example, hotels applying societal concerns to their marketing have
added nonsmoking floors, rooms or seating areas in restaurants,
used recyclable supplies in operations, and practiced conservation
methods throughout the property. These hotels may also have
policies refusing to do business with suppliers that are known to
discriminate against minorities. Societally-based marketing is often
controversial as one persons cause may be anothers bane.
8.3 Characteristics of Services Marketing
While the same marketing concepts apply to any industry regardless of
the product or service being offered, there are important differences
between products and services. The differences between a product
and a service distinguish the tourism industrys unique properties
and characteristics.
8.3.1 The Tourism Industrys
Service Characteristics
The tourism industry is involved primarily in selling services (a stay in
a hotel, a trip on an airplane, or a tour of a visitor attraction), rather
than a product (car, groceries, clothing, or a book). Understanding the
unique characteristics of services, therefore, is important in
understanding how these services are marketed.
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Characteristics of Services Marketing
Consumer
demands and
satisfaction
Consumer's
and society's
well-being
Differences
between "product"
and "service"
In tourism the customer participates in the production of the service.
Organized sightseeing offers a good example. Provision of guide
services and consumption of the sightseeing occurs simultaneously.
The greater the interaction between the tour guide and the visitor,
the more pleasurable the service.
Services cannot be stored or kept in inventory. An airplane that
leaves the airport with empty seats will never be able to sell those
specific seats on that specific flight, and that income is lost forever.
Services must generally be provided where and when the customer
wants (or needs) them at convenient times and locations. The
vacationing family with hungry children is likely to stop at the most
convenient restaurant that offers acceptable food at a reasonable
cost; they cannot wait several hours for a specific restaurant to open.
Services tend to be labor intensive to produce. Because there is face-to-
face interaction between the service provider and the customer, there is
a greater need for employees. A hotel must have enough service staff
ready to work at each point of contact with the customers, such as
check-in, concierge desk, restaurants, or lapses in service will result.
Services are intangible. Services are not objects that can be easily
measured to determine if standards of production have been met. How
the quality of the service encounter is judged depends on the
customers perceptions and expectations. The same service may be
evaluated differently by two different customers if they entered the
encounter with different expectations. For example, a business traveler
who must travel in the economy section of a full plane due to the flight
being oversold may describe the trip as tedious and very poor quality.
A vacation traveler sitting next to the business traveler on her first trip
by air may describe the same trip as exciting and high quality.
8.3.2 The Tourism Industrys
Unique Marketing Challenges
In addition to meeting the challenges faced by all service industries,
the tourism industry has certain unique characteristics that create
additional marketing challenges.
The supply of tourism services cannot be changed rapidly in
response to changes in demand. For example, much time and money
is needed to develop a resort destination, to build a hotel, or to
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Customer
participation
Perishability
Labor
Convenience
Intangibility
Difficulty to
change
develop a transportation system. Once built, the capacity of these
facilities is difficult to change. Due to the inability to inventory
supply, there is more pressure for builders, planners, and developers
to forecast capacity correctly and for the operators of the facilities
to keep them as fully used as possible.
Tourism demand is highly elastic. This means that a relatively small
change in price or tourist income will result in a proportionately
larger change in demand. Tourism also tends to be seasonal in nature
and affected by a variety of subjective factors such as taste and
fashion. Further, tourism services are often viewed by the customer
as interchangeable between different service providers.
The tourism product is, itself, a combination of many different
services. Each trip includes many different servicestransportation,
accommodation, restaurant meals, sightseeing, car rental,
attractionsprovided by different firms. A poor experience in any of
these can affect customer satisfaction for the entire trip.
8.4 Market Segmentation
An essential step in marketing is determining the actual and potential
customers or the firms market. Market segmentation (discussed in
Chapter 7) is the process used to group people with similar wants and
needs to form target markets. Research (discussed in Chapter 9) also
plays an important role in identifying the market segments. Specific
products and services and different promotional strategies can then be
developed to meet the needs of different groups.
8.4.1 Characteristics of Effective
Market Segments
Not all possible market segments are useful. For example, an airline
could determine how many customers have blue eyes versus brown eyes,
but since eye color does not affect the choice of airline, this would serve
no purpose. To be effective as a marketing tool, a segment should be:
Measurable in terms of size and other variables.
Accessible through promotion with existing or potential distribution
channels.
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Market Segmentation
Elasticity
Service division
Target markets
Substantial or large enough or profitable enough to serve as a target
market.
Defensible in terms of sufficiently unique characteristics to justify a
separate marketing effort or a program which can withstand the
mass marketing approach of competitors.
Durable in terms of continuing over time.
Competitive in terms of providing an advantage over the
competition by serving this segment.
8.4.2 Bases for Market Segmentation
The variables that form market segments can be grouped into four
major categories (see Table 8.1):
Demographic segmentation divides the market into groups based on
aggregate population characteristics such as age, gender, income,
and occupation.
Geographic segmentation divides the market into segments based on
geographic characteristics, identifying those areas with the greatest
number of potential customers.
Psychographic segmentation identifies personality characteristics,
lifestyle, and motives. There are several different models that have
been developed as described in Chapter 7. One is Stanley C. Plogs
model of psychocentric and allocentric characteristics. Another
widely known model developed by SRI International is VALS,
Values, Attitudes, and Lifestyles (Kotler, Bowen, & Makens,
1996, pp. 190-193). This model classifies consumers based on self-
images, aspirations, values and beliefs, and the products they use.
Behavioral segmentation divides buyers based on their knowledge,
attitude, use or response to a product.
The attributes or benefits sought by a market segment can be used to
attract that segment and also to identify customer types. Once a firm
knows what their customers want and need, they are better able to meet
those needs. At the same time, knowing the characteristics of current
customers will help to identify potential customers. Marketing efforts
can be directed toward segments with the greatest likelihood of
becoming customers.
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Identification of
customer types
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The Market Mix
8.5 The Market Mix
Once a specific market segment or target market has been selected, a
marketing strategy to meet the needs of that market can be developed.
This strategy includes many factors that influence the marketing effort
in the tourism industry:
Timing. Considerations include holidays, the school year cycle
(when families vacation), high season, low season, and upward
trends in the business cycle among others.
Brands. Names, trademarks, labels, logos, and other identification
marks all assist the consumer in identifying and recalling
information about a product.
Packaging. Tourism services such as transportation, lodging, amenities,
and recreation activities can be packaged and sold together or
separately. Family plans or single plans are other forms of packaging.
Pricing. Pricing affects sales volume and the image of the product.
A multitude of pricing options exist, ranging from discount prices to
premium prices.
Channels of distribution. To make the product accessible to the
consumer, distribution channels must be developed including direct
selling, retail travel agents, wholesale tour operators, or a
combination of these methods.
Product. The physical attributes of the product help to determine its
position against the competition and provide guidelines on how to
best compete.
Image. The consumers perception of the product depends to a great
extent on the important factors of reputation and quality.
Category Variables
Demographic
age, gender, marital status, race, ethnic group, income,
education, occupation, family size, family life cycle,
religion, social class, nationality
Geographic
region, city or metropolitan area size, population density,
climate, terrain, market density
Psychographic personality attributes, lifestyle, motives
Behavioral
occasion, benefit expectations, usage rate, brand loyalty,
attitude toward product
Table 8.1: Bases for Market Segmentation
Advertising. Paid promotion is critical, and the questions of when,
where, and how to promote must be carefully considered.
Selling. Internal and external selling are essential components for
success, and various sales techniques must be incorporated in the
marketing plan.
Public relations. Even the most carefully drawn marketing plan will
fail without good relations with the visitors, the community, suppliers,
and employees (Goeldner, McIntosh, & Ritchie, 1995, pp. 427-429).
The market mix consists of how the different elements are combined.
Generally, these are grouped into four basic categories: product, place,
price, and promotion. Figure 8.1 illustrates that all factors that impact
the target market segment are an integral part of the market mix.
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Figure 8.1: The Market Mix.
Product
Brand
Image
Packaging
Promotion
Public Relations
Advertising
Selling
Media Used
Price
Match, above, or below
current market
price
Place
(Channels of Distribution)
Direct Sales
Retail Travel Agents
Tour Operators
Hotel
Representatives
TARGET
MARKET
SEGMENT
8.5.1 Product
The tourism product includes not only the physical product and service
but also planning and development, branding, and packaging. The
marketing concept and societal marketing concept discussed earlier in
this chapter suggest that any new product development must meet the
needs of some segment of the market and also be developed with the
overall good of society in mind. In deciding on whether to offer a new
product, there are several criteria that should be met.
There should be sufficient demand for the product or service to
generate a profit for the organization.
The new product or service should fit in with the overall image and
mission of the organization.
Sufficient resources should be available to offer the product or
service including enough trained personnel.
The new product or service should contribute to the overall profit or
growth of the organization or destination, even if the new offering
may not bring in a profit by itself.
Clearly, development of new products and services is a complex task.
Consumer needs and wants constantly change and competitors
continually offer new or improved products. Over time, a product that
has been very successful is likely to become less so and eventually may
be phased out completely. The product life cycle illustrated in Figure
8.2 provides a framework for describing the process of product
development through various stages as follows:
Product development begins with an idea for a new product or
service. There are no sales during this period although investment
costs are incurred.
Introduction of the new product or service also reflects high
investment costs to promote and advertise the new product with
relatively low sales volume resulting in little or no profit.
Growth is a period of rapid expansion with increasing profit levels.
There may be few or no competitors at the beginning of this stage,
but as profits increase, competitors may begin to enter the market.
Maturity is marked by a slower rate of sales growth and a leveling
off of sales. Increasing expenditures to hold off competitors will be
needed with resulting declines in profits.
Decline sees a rapid fall off of sales and profit. The number of
competitors will decrease as firms choose to withdraw from the market.
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The Market Mix
New product
development
8.5.2 Place (Distribution)
The choice of distribution channels must be compatible with other
elements of the market mix. Essentially, decisions involve how to
deliver the product or service to the consumer. The tourism industry
generally uses a multilevel distribution system combining direct sales,
wholesale operations, and retail travel agents. These travel distribution
channels are discussed in Chapter 5.
8.5.3 Price
Setting the price of a product of service is a complex process involving
considerations both within and outside the organization. At the same
time, setting the right price is critical as it is the only revenue-generating
element in the marketing mix.
a) Internal factors for consideration include:
Positioning or how consumers perceive the product relative to
competition. Many organizations offer a variety of products targeted
at different levels or positions which are reflected in the pricing
strategies of the firm.
Survival for organizations struggling with economic recessions,
overcapacity, and strong competition. If demand for hotel rooms in
a specific location declines substantially, the response of a specific
hotel may be to reduce prices and cut costs until demand recovers.
Other properties may lower prices to match or may choose not to
lower prices, losing the more budget-minded customers.
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Figure 8.2: Product Life Cycle
Sales and profils ($)
Product
Development
Introduction Growth Maturity Decline
Profits
Sales
Multilevel
distribution
system
Internal factors
Current profit maximization may be an objective of organizations
based on demand and costs at different prices choosing the prices
that are expected to yield the highest revenue, profit, cash flow or
other financial objective. The long-term performance of the
organization is of much less concern. An organization that develops
new concepts for chain restaurants, for example, will demonstrate
the success of the concept with a smaller chain first.
Market-share leadership for some organizations is based on the
belief that the largest player in the market will result in long-term
profit. When entering a new market, a firm may offer low
introductory prices to quickly gain a significant share of the market,
raising prices as demand increases.
Product-quality leadership involves firms wishing to lead in terms
of quality of product by charging an appropriately higher price for
that quality. An internationally recognized hotel chains revenues
may reflect the higher prices charged for its services and facilities,
but it must also continually reinvest to maintain a well-trained staff
and level of luxury to continue to lead in quality.
Marketing mix strategy which involves the coordination of product,
place, and promotion strategies with pricing strategies. For example,
a regional air carrier may promote a product which is no-frills,
short-haul, point-to-point air travel, while an international air carrier
may offer a much more luxurious flight environment. Pricing for
each firm reflects the different products offered.
Costs which are a basic consideration in determining price since
price is based on organizations costs plus a specific profit margin.
Each firm must charge more for their products than the cost to
produce them in order to stay in business. However, sufficient
attention must be paid to controlling costs so a firm does not charge
more than its competitors.
b) External factors include:
Demand which may vary based on price, season, or other variables.
While changes in price by one competitor are often followed by similar
changes by other firms in the same market because consumers may
seek the lowest price, products aimed at the luxury end of the market do
not respond in the same way. Changes in price, then, may have little
effect on demand. Also, destinations that are primarily seasonal in
nature, such as winter ski resorts, experience widely fluctuating demand
at different times of the year with corresponding changes in price.
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The Market Mix
Consumer perceptions of price and value which influence the buyers
decision. The buyers reasons for selecting one item over another and
the expectations of the items or service received compared to the
price paid affect the judgment of value. Each organization must know
how customers perceive their products and services and what
customers are willing to pay for them. Each segment of the market
will have different standards by which it judges value.
Competition involving firms that operate in the same market
segment. Price is one element consumers use to distinguish among
otherwise similar firms. Therefore, each organization must be aware
of what its competitors charge, what benefits and features are
offered, and the quality of the product offered.
8.5.4 Promotion
Promotion is essentially communication with the goal of changing the
behavior of the consumer, specifically to purchase a tourism product
such as air travel, hotel accommodations, restaurant meals, tours, or a
complete destination package. Before undertaking any promotional
effort, the objectives of the campaign must be set. Effective objectives
are quantifiable, measurable, specific, and realistically attainable
within a specified time frame. Understanding where the potential
buyers are in terms of readiness to buy is important in setting
appropriate objectives and developing effective promotional materials.
For example, in the selection of a travel destination for a vacation, a
consumer must go through several stages in making a decision. These
stages, illustrated in Figure 8.3, reflect the buyer readiness states:
Consumer awareness of the destination (or product) can range from
total unawareness of its existence to knowing only the destination
name to knowing a little about the destination. Promotion aimed at
this stage will focus on providing critical information to increase the
consumers level of knowledge. New York Citys promotion using
The Big Apple theme in the early 1970s is a classic example of a
successful destination promotion using a recognizable image.
Consumer knowledge about the destination is the target of
promotion. A national tourism administration (NTA) may feature
specific attractions or outstanding recreational facilities of different
parts of the country as promotions targeted to the vacationer.
Consumer attitudes vary according to cultural, ideological, and
other differences. For example, an advertisement for African safaris
featuring a successful hunter posing with his trophy of a dead lion
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Promotional
objectives
may be a positive image for hunters but would be negative for those
interested in animal rights, environmental protection, and
preservation of animal species.
Consumer preference is established in terms of liking one product
over others in the marketplace. Each product must promote those
features and benefits that will make a difference in the consumers
buying decision. A destination like Hawaii or Bali may feature its
climate, activities, beautiful scenery, or unique culture. Destinations
and companies like tour agencies may choose to focus on quality,
unique services, location, pricewhatever it is that makes their
products of particular value to their target audience.
Consumer conviction and purchase are the final steps and are
usually closely linked. The NTA or other marketers want to create a
firm intention to come to a destination or to purchase followed by
the actual purchase of the product. Special pricing is commonly
used to increase sales during off-season periods at many
destinations. For example, airlines offer lower fares for advance
purchases and for travel during non-peak hours and days.
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The Market Mix
Investing in
promotion
Figure 8.3: Buyer Readiness States
Awareness
Knowledge
Liking
Preference
Conviction
Purchase
The Promotional Budget
The objectives to be met by the promotional campaign and the steps
necessary to achieve them should be the primary factors in setting the
promotional budget. Frequently, however, organizations decide to
spend a certain amount of money on promotion before determining the
objectives. It is also common to set aside a percentage of sales for
promotional efforts. Industry figures are generally available that
frequently serve as a guideline for this decision. However, this fails to
take into account any unusual circumstances of a particular
organization that may want to introduce a new product or respond to
other changes in their particular market. It also fails to recognize the
relationship between promotion and sales. Additional investment in
promotion should result in higher sales; falling sales may be a signal
that more, not less, promotion is required.
Message Content and Form
Based on the marketing objectives, including the buyer readiness state
of the target market, the specific content (what to say) and form (how
to say it) of messages can be developed and tested. Different messages
can be shown to sample members of the target audience and the results
measured to determine which is the most effective.
The Promotion Mix
There are many different types of promotional tools available, and their
selection depends on the product and the target audience as well as the
amount of funds available. Promotional tools can be categorized into
four groups:
Advertising has many different forms and uses and can be used to
build an image over a long period of time, to stimulate a quick sales
increase, and to reach a geographically dispersed audience at a
relatively low cost.
Personal selling is effective when building buyer preference,
conviction, and purchase. The personal interaction between the
buyer and seller allows each to observe, communicate and adjust to
the others needs and characteristics.
Sales promotions include special discounts, coupons, contests, or
incentives to buy. These promotions add value to the product and
encourage the consumer to respond quickly.
Publicity and public relations offer several advantages. The news
story format is often more believable than advertising and reaches
many readers.
Table 8.2 provides a summary of the characteristics of each type.
Within the tourism industry, all forms of promotion are used. An
advertisement or sales promotion can be an effective way to influence
the choice of a rental car for a weekend trip. However, when selecting
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Promotional tools
Choosing
messages
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The Market Mix
a two-week vacation for a family of four, additional information
through personal selling is often preferred. Personal selling is also
required for larger, more expensive purchases and to sell customized
products. For example, conventions and meetings tend to be both large
and customized with the services of a professional convention services
planner to organize a successful event.
Advertising
A paid form of nonpersonal communication about an
organization and/or its products that is transmitted to a
target audience through a mass medium.
Personal sales
Personal paid communication that attempts to inform
customers and persuade them to purchase products in
an exchange situation.
Sales promotion
An activity and/or material that acts as a direct
inducement to resellers, salespersons, or consumers; it
offers added value or incentive to buy or sell the product.
Publicity
(Public relations)
Nonpersonal communication in news story form,
regarding an organization and/or its products, that is
transmitted through a mass medium at no charge.
Table 8.2: Major Types of Promotional Tools
Trade shows deserve a special mention as they are important in
promoting both destinations and suppliers products. Thousands of
buyers and sellers come together at these shows which are held in
various points of the world. The two largest shows are the ITB Berlin
and the WTM (World Travel Market) in London. Other prominent
travel shows are FITUR (Feria International de Turismo) in Spain and
JATA (Japan Association of Travel Agents) in Japan.
There are actually two different markets that must be addressed: the
final consumer and the travel trade intermediaries. To reach these two
different markets, two different strategies are used. A tourism service
supplier such as a resort destination, a hotel, or an airline that is using
the push strategy provides an incentive for intermediaries to sell their
services. For example, a major hotel may offer travel agents an
additional commission for bookings. Conversely, a pull strategy
requires increasing consumer demand for a product. The goal is to
directly increase consumer demand for the product. The same hotel
may place an advertisement in a target city asking customers to contact
their travel planner or the hotel for reservations. These two strategies
are contrasted in Figure 8.4.
Uses of tools
Trade shows
Reaching
intermediaries
and consumers
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Figure 8.4: Push vs. Pull Strategy
Retailers and Wholesalers Consumers Suppliers
Supplier marketing
activities (personal
sales,sales promotions)
Reseller marketing
activities (personal sales,
advertising, sales
promotions)
Supplier marketing activities
(advertising, sales promotions)
Retailers and Wholesalers Consumers Suppliers
Push Strategy
Pull Strategy
Demand Demand
Media Selection
Once a decision has been made to advertise, selections must be made
about the type of media to use to most effectively deliver the desired
message. The most common choices are newspapers, magazines,
television, radio, direct mail, and outdoor billboards. In selecting
which media is best, several factors must be considered:
Reach measures the percentage of people in a target market that are
exposed to the message during a specific period of time. For
example, the advertiser might want to reach 75 percent of the market
within a year.
Frequency is how many times the average person in the target market
sees the advertisement. An advertiser might, for example, want the
average person to see the message three times during the campaign.
Impact is the qualitative value of the message. This includes the
source credibility, visual quality, and noise level of the particular
medium. Newspapers, for example, have less visual quality than
magazines, and certain media types and selections of media have
less credibility than others. Noise level refers to the stimuli
competing for the viewers attention while the message is shown.
With radio, for example, the listener is often also carrying on
conversations, driving, or completing some task while the radio is
playing so the noise level is high.
Cost includes both the total cost and the cost per contact (cost of
reaching one member of the audience.) Television, for example, has
a low cost per contact but a high total cost.
Market selectivity is the ability to target particular groups whether by
geographic region or another of the bases for market segmentation.
Daily newspapers offer a great deal of geographic segmentation, but
very little demographic, psychographic, or behavioral segmentation.
Magazines offer more options for different types of segmentation,
but may not offer as specific a geographic segmentation.
Timing flexibility is the lead time needed to place, remove, or
change a message. Newspapers offer the most timing flexibility.
Magazines and television require much longer lead times to produce
the advertisement.
The advantages and disadvantages of each are summarized in Table 8.3.
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The Market Mix
Using different
media types
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Medium Advantages Disadvantages
Newspapers
Timing flexibility; broad market coverage;
high credibility; low cost per contact.
Poor visual quality; short life-span; small
pass-along audience (readers other than
purchaser).
Magazines
High market selectivity; high credibility
and prestige; high visual quality; long life;
high pass-along audience.
Low timing flexibility; infrequency of
publication; expensive cost per contact.
Television
High visual impact; high geographic
selectivity; high reach.
High cost; high noise level; short
exposure time; low market selectivity other
than geographic.
Radio High market selectivity; low total cost.
Audio presentation only with lower
attention than visual media; fleeting
exposure.
Direct Mail
High market selectivity; personalization of
message.
Relatively high cost; low timing flexibility;
less credible.
Outdoor High frequency; low cost.
No market selectivity other than
geographic; creative limitations; each
exposure is very brief.
Table 8.3: Comparison of Major Media Types
8.6 Marketing Plans
Before any specific marketing activities are undertaken, it is crucial to
complete a marketing plan. It is important that the marketing plans for
tourism destinations be differentiated from tourism products and services.
Whether the organization is a national tourism administration (NTA),
national tourism office (NTO) or other governmental body, rather than an
individual firm or a cooperative public/private association, the completion
of a marketing plan will be of benefit. With increasing competition in the
tourism industry as more destinations are developed, destinations with
marketing plans will outperform those without, and the formulation of this
plan is generally the responsibility of the NTA. All marketing plans focus
efforts on attaining the goals and objectives of the organization over the
short- and long-term and ensure that all key aspects of the marketing effort
are included in formulating specific activities (see Table 8.4).
Marketing plans may be strategic, operational, or include both
components. Strategic plans are concerned primarily with long-term
issues (three to five years), overall mission, goals and objectives.
Operational plans focus on specific steps to be taken to reach the
strategic targets within the short-term (usually one year). The
marketing plan must support the organizations overall strategic plan.
8.6.1 NTA Marketing Plans
In most major destinations, NTAs have developed marketing plans which
may be strategic or operational in nature. NTA plans in Australia, India,
Senegal, Italy, and Switzerland, for example, are primarily strategic, while
others like the United States, have operational plans which set out specific
actions to achieve given strategies. Because of the focus on strategic
issues, measures of effectiveness in achieving objectives have been
difficult to apply. NTAs, however, have become increasingly aware of the
need for accountability in the use of public funds for marketing and
promotion and are now tying their strategies to performance measures
such as increasing tourist arrivals, overnight stays, revenues, and market
share (World Tourism Organization, 1995a, p. 2-24).
The responsibility for marketing a country or a region, sometimes
referred to as macro-marketing, usually rests with the NTA of that
country and is generally aimed at attracting international tourists to the
destination. It should be understood that the NTAs basic responsibility
is to market the country as a whole. Any deviation from this, such as
the marketing and promotion of a province, is usually undertaken as a
cooperative venture with the province.
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Marketing Plans
Necessity of
marketing plan
Strategic/
Operational
Strategies
Macro-marketing
As discussed in Chapter 15, every destination needs to have a clear
understanding of its objectives for tourism development and supply
and demand factors regarding its comparative strengths in terms of
available attractions, accessibility, and its competition before
developing a marketing plan. The target markets are then determined
based on the type and number of tourists the destination hopes to
attract, the product development is prioritized, and the strategies or
approaches to resolve problems are developed.
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Table 8.4: Rules for Drawing up a Marketing Plan
Source: World Tourism Organization, Budgets and Marketing Plans
of National Tourism Organizations (1995), pp. 2-23, 2-24.
The following suggested rules were developed as an aid for National Tourism
Administrations (NTA) that do not have marketing plans. They are designed to
maximize the use of existing resources and avoid unnecessary expense.
1. Employ market expertise either in-house or external when drawing up
the initial plans.
2. Develop a thorough understanding of existing offerings and of their
absolute and relative advantages and shortcomings with respect to
competing destinations.
3. Identify and study the competition in order to clearly identify any market
gaps and capitalize on the main strengths that the country has.
4. Prepare a strategic plan for supply spanning several years, to improve
deficiencies and strengthen advantages.
5. Thoroughly consider potential demand. Access to such information is
relatively straightforward in view of the existence of numerous studies on
demand in the main tourism source countries.
6. Set strategic goals in line with tourist arrival capacity, transport capacity and
existing promotional resources. Goals should be defined in terms of market
share in each of the main source countries, because large fluctuations in
exchange rates make it difficult to forecast foreign exchange earnings.
7. Once the three-year strategic plan has been completed, the corresponding
one-year operational plan can be drawn up.
8. Given the scant resources of most NTAs, yearly operational plans should
concentrate on a few markets only; these need not be national but could
be limited to certain regions or even cities.
9. Do not address the public in general until appropriate measures have been
taken with opinion leaders; journalists, travel agents, specific interest groups.
10. Include the private sector in the preparation and execution of marketing
plans from the very outset.
Clear objectives
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Marketing Plans
NTA marketing strategies will be both short-term and long-term
depending on goals or objectives which are laid out in the plan. To a
great degree, the success of these marketing strategies will depend on the
available budget for promotional programs and other activities. These
promotional activities are often coordinated with private sector efforts on
behalf of air carriers, hotels, and other firms as well as provinces or
municipalities interested in joint promotion with the NTA. In many
countries, the primary air carrier to a given destination may be a national,
government-funded air carrier which will develop a coordinated
promotional campaign with the NTA (Inskeep, 1994, pp. 45-48).
The marketing strategies of the tourism master plan for the Republic of
Uganda illustrates the marketing and product strategies in a marketing
plan. In this plan, Ugandas target markets are prioritized. Primary markets
are the U.K., Germany, and the U.S. Secondary markets are France and
Italy, followed by Australia and the rest of Europe. The plan identifies the
image problems of Uganda and analyzes the need to position Uganda as a
new destination emphasizing its scenic beauty and interesting wildlife.
Strategies are developed for three distinct time phases with provisions for
promotion mix and recommendations for an organizational structure to
carry out the strategies (Inskeep, 1994, p. 197).
8.6.2 Environmental Analysis
Tourism is highly sensitive to changes in the business environment. An
analysis of the major factors in the environment should be completed
early in the planning process. While the marketing plan cannot foresee
all possible events, a careful analysis will identify current conditions,
outline expected changes, and indicate how the identified challenges
will be met. A careful assessment of the following major
environmental factors will help to identify new market segments as
well as to prepare for expected changes.
Social factors such as crime, disease, and changing demographics
may have significant impacts on a destination and the firms located
there. The relevant social factors and their importance will vary
depending on the geographic location. The widely reported attacks
on tourists in Miami, Florida in 1993, and the reported outbreak of
plague in parts of India in 1994, had the potential for significant
impact on the tourism industry in these destinations.
Political factors such as legislation regulating casino gambling,
political stability within a country, and the international political
arena are also of vital concern.
Program budgets
Example: Uganda
Analyzing
major factors
Economic factors including changing interest rates, international
monetary exchange rates, employment, and income all affect the
tourism industry. The lodging industry is especially sensitive to
business-cycle changes.
8.6.3 Competitive Analysis
Regardless of whether the marketing plan is for an entire destination or a
single firm, a comprehensive analysis of the competition is needed to
develop an effective marketing plan. The analysis will include a
comparison of physical attributes such as climate, number of hotel rooms
available, activities, and number and type of restaurants. However, the
complete analysis must go beyond this level to consider the intangible
elements of the tourism product. Differences in service levels,
cleanliness, safety, and cultures affect the satisfaction of visitors. A sound
marketing plan identifies those factors that are of primary importance to
visitors in making their purchasing decisions and develop specific steps
to improve areas of weakness while capitalizing on existing strengths.
8.6.4 Market Trend Analysis
Market trends are closely related to the factors revealed in the
analysis of major environmental factors and competition. There are
many sources of market trend information including publicly available
data from chambers of commerce, universities, government, and
visitors bureaus as discussed in Chapter 9. Relevant factors include:
Visitor trends such as origin markets, length of stay, expenditure
patterns, mode of transportation, and demographic profiles.
Competitive trends in terms of identification and location of major
competitors, services and products offered by competitors, the competitive
pricing structure, and assessment of the success of competitors.
Industry trends such as changes being planned by the transportation
services to the location, new construction that will have an impact
such as new hotels, shopping centers, visitor attractions, or
convention centers, or new technologies being developed.
8.6.5 Market Segmentation Analysis
In earlier sections, the importance of market segmentation and
selecting target markets was discussed. As competition at all levels
increases, this factor becomes even more important. The marketing
plan should identify those segments of the market that will be the focus
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Comparing
physical and
intangible
elements
for marketing efforts through the life of the plan. Sound market
research including analyses of market trends, competition, and
environmental factors must be completed to select the best target
markets. This will allow more effective and efficient marketing.
In many cases this analysis will identify areas that must be improved
before the objectives of the organization can be met. For example, a
destination may decide that the market for conventions and meetings
has strong potential for their location. A decision might be made to
invest in developing additional convention facilities to attract this
market. However, further analysis may reveal that there are too few
hotel rooms or insufficient transportation access. A long-term
investment strategy to improve all needed infrastructure would be
needed in addition to investment in the convention center itself.
8.6.6 Strategic Goals and Objectives
The strategic goals and objectives of the marketing plan will guide the
development of everything else in the marketing plan. These objectives
must support the overall mission, goals, and objectives of the larger
organization. Areas often addressed in marketing plans for destinations
include:
Increase in employment
Improvement in the balance of payments
Preservation of cultural heritages and natural environments
Strengthening of competitive position relative to other destinations
Increase in the number of visitors, length of stay, and earnings from
tourist activities
Objectives should be as specific as possible with quantitative targets
and specific time frames indicated, such as an increase in employment
by a given percentage per year over the next three years. This enables
the results to be measured throughout the duration of the plan and for
corrective measures to be developed if necessary.
8.6.7 Action Plans
Once objectives are clear and the target markets are selected, action
plans can be developed. These must be as specific as possible and
include each segment of the market mix as it relates to the particular
objective. The plan should also indicate who is responsible for each
action, what funds will be required, and the source of funds.
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Marketing Plans
Planning
example
Specify
objectives
SUMMARY
Marketing includes all activities involved in bringing buyers and
sellers together in an exchange relationship. Tourism products are
almost exclusively services, and the supply of tourism services is often
difficult to adjust rapidly because tourism demand is elastic, and the
tourism product is actually a combination of many different products.
Market segmentation is used to group people into categories based on
demographic, geographic, psychographic, and behavioral
characteristics. The market mix combines the various factors that
influence the marketing effort into four main categories: product,
place, price, and promotion. The product life cycle describes the
various stages during a products development, while place represents
distribution or how the product or service is delivered to the customer.
Setting the price of a product or service is a complex process involving
a variety of factors such as marketing objectives, the marketing mix
strategy, costs, demand, consumer perceptions of price and value, and
competition. Promotion is communication with the goal of changing
the behavior of the consumer. The promotion mix involves the
selection of promotional tools from four basic types: advertising,
personal sales, sales promotion, and publicity or public relations.
Marketing plans are essential to ensure that all efforts are focused on
attaining the goals and objectives of the organization over the short-
and long-term. Developing an effective marketing plan begins with an
environment analysis including consideration of social, political, and
economic factors. An analysis of the competition and market trends
should also be completed. The marketing plan should specify how the
market is to be segmented, the strategic goals and objectives, and
provide action plans to reach the desired goals.
DISCUSSION QUESTIONS
1. What are the differences between the different marketing concepts?
2. Are some characteristics of market segments more important than
others, or are they equally important? Why?
3. A resort destination is considering adding a second golf course to
its facilities. What factors should be considered in deciding whether
to expand the resort in this manner?
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4. You have just been hired as the general manager of a downtown
business hotel. The owner of the hotel wants you to raise the prices;
youre not sure this is a wise decision. Describe the factors that you
would include in your report to the owner about factors that must be
considered in setting prices for the hotel.
5. Apply the four tools available in the promotion mix to a resort
destination by showing how each could be used.
6. What is the purpose of a marketing plan?
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Summary
CHAPTER 9
Tourism Research and Forecasting
Learning objectives
To understand the role and scope of tourism research.
To understand the research process.
To be familiar with the uses of primary and secondary data.
To be aware of who conducts tourism research.
To be familiar with the elements of a travel market research program.
To understand the importance of forecasting tourism demand.
To be familiar with the quantitative and qualitative approaches used to
forecast tourism demand.
Key terms and concepts
accountability assessment
Delphi Model
Judgment-Aided Model (JAM)
multivariate regression analysis
nonsurvey techniques
primary data
propensities to travel
qualitative forecasting methods
quantitative forecasting methods
resistances to travel
secondary data
time-series models
types of surveys
9.1 Introduction
Tourism research is an objective, systematic, and logical investigation
of travel-related problems. In response to the globalization of tourism
activities and industry, tourism research has become increasingly
important to assist decision making and planning for the tourism
product, which is comprised of all the goods and services that are
necessary to accommodate the visitor. In the fast changing
international tourism environment, tourism planners and managers
need to respond sufficiently to external challenges like new
technologies and increasing competition, as well as internal factors like
financial and human resource constraints.
The interrelationships between research, marketing, and forecasting
can be seen in some examples of everyday uses of tourism research in
the industry including:
Hotels and resorts studying the impacts of new technologies such as the
World Wide Web and video conferencing on the business travel market.
Airlines investigating attitudes and behaviors of leisure travelers in
light of shifting global travel patterns and increased security measures.
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9
Tourism Research
and Forecasting
Importance
of investigating
problems
Tour operators conducting a market profile study on eco-tourists in
order to provide tour packages that would attract this emerging market.
National tourism organizations using market profile data to identify
target markets and develop a tourism marketing strategy.
Government planning offices assessing the probable impact of a
new resort or attraction through the measurement of economic
feasibility and environmental and social impacts.
This chapter explores the research process and the applications and
uses of research in the industry.
9.2 Tourism Research
9.2.1 The Functions of Tourism Research
Tourism research has many functions in the industry, especially in
helping identify and evaluate significant problems. Tourism research
can help organizations in the public sector or businesses in the private
sector formulate policies and establish priorities that are appropriate
for market shifts and community concerns. In the private sector, it is
often used to help increase productivity through the use of a range of
quantitative and qualitative techniques that allow decision makers to
select and implement the most effective operational methods. Research
is also invaluable for marketing and promotional campaigns and forms
the basis for successful strategic marketing plans which use the results
of studies of consumer attitude and behavior, comparative demand for
the product, and marketing effectiveness (see Chapter 8). Tourism
research can also be used to develop new resources by identifying new
markets, new products, and new uses for established products.
Research can be used to show destinations the type of activities, tourist
facilities, and services that travelers are looking for based on factors
such as demographics, psychographics, and consumption patterns.
Finally, through the study and forecast of market and developmental
trends, tourism research can reduce the risk of unanticipated changes
and unforeseen events at the destination through the use of probable
scenario development and alternative strategies.
9.2.2 The Tourism Research Process
The research process involves a number of stages beginning with the
identification of the problem and ending with the conclusions and
recommendations of the study (see Figure 9.1). It is important to ensure
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Chapter 9: Tourism Research and Forecasting
Identification
and evaluation
Development
Risk reduction
that the tourism research process is well designed and pertinent to the
defined problem. Although the benefits of a research study might be
apparent, the need is often weighed against the expense of conducting the
study, in terms of time, money, and opportunity cost. The research design
will depend on the particular problem at hand, and the basic research study
is focused as to its scope, relevant variables, and parameters. The
identification of a problem may arise from observations of trends or
behavior in visitors. In other instances, there may be a need to distinguish
facts from observations or to test a hypothesis (Ryan, 1995; see Table 9.1).
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Tourism Research
Source: World Tourism Organization, Collection and
Compilation of Tourism Statistics (1995), p. 9.
Forms of Tourism Marketing Issues Economic Impact Issues
Inbound international
tourism
What are the volume,
origins, and other
characteristics?
What are these visitors'
expenditures?
What are their net
economic contributions?
Outbound international
tourism
What are the volume,
destinations, and other
characteristics?
What are these visitors'
expenditures?
Domestic tourism
What are the volume and
characteristics?
What are these visitors'
expenditures?
What are their net
economic contributions?
Tourism supply
What are the number and
characteristics of
tourism-related
establishments?
What are the economic
contributions of these
establishments?
Table 9.1: Major Tourism Research Issues
The value of the research process is in providing users with useful and
relevant information that they can implement in their decision making
process. Thus, the research must be clearly understood and
disseminated to interested and concerned parties. Beyond answering
immediate concerns, a well-designed study also has the potential for
future benefits by establishing the groundwork for follow-up work.
The application of the research results is the desired goal of any project.
Hence, adequate planning and support are necessary in order to ensure
practicable application. In this process, the interpretation of the statistical
results and other findings into usable information provides one of the
Benefits vs. cost
Providing
information for
future benefits
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Chapter 9: Tourism Research and Forecasting
most difficult and challenging steps in research. The conclusions which
are reached then are used to assist in decision making or to help
formulate policy. Finally, the dissemination of the results through
appropriate channels is an important step in assisting in bringing about
desired outcomes, and the implementation procedure might involve
using existing structures or establishing new mechanisms.
Source: World Tourism Organization, Collection and
Compilation of Tourism Statistics (1995), p. 8.
8. Process and analyze the data
9. Interpret results and draw conclusions
10. Formulate recommendations
11. Prepare and present findings
1. Recognize and define the problem
2. Specify data needs
3. Evaluate secondary data
6. Design data
collection
instruments
5. Plan primary
data collection
4.2 Choose
primary
data collection
4.1 Choose
secondary
data
7.1 Collect
desired data
7.2 Collect
desired data
Figure 9.1: The Research Process
Practical
application
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Tourism Research
9.2.3 Sources of Information
Data used in tourism research may either be primary, secondary or both.
Primary data are original observations generated to solve the research
problem at hand. If, for example, researchers conduct a survey of pleasure
visitors to determine their attitudes toward ecotourism, the information
gathered would be primary data. Secondary data, on the other hand, are
data that have been gathered by someone other than the researcher or for
some other purpose. These data may be available through public or
private published sources (Goeldner, McIntosh, & Ritchie, 1995).
Secondary Data
In recent years, there has been an overwhelming flow of information
related to tourism, travel, recreation, and leisure. Low cost and
convenience are clearly the biggest advantages of obtaining secondary
data. Instead of printing data collection forms, hiring interviewers,
editing, and tabulating the results, researchers may go to the library and
take information from published records compiled by somebody else.
Another advantage of secondary data is that they can be collected more
quickly than primary data. While an original research project might take
60 to 90 days or more to complete, secondary data can be accessed
electronically in hours or collected within a few days. In addition, if the
data is part of a larger series, comparability might be an advantage.
There are, however, limitations in using secondary data. For instance, the
information may not fit the problem that is being researched, may be
outdated, or in forms which do not answer the specific problem at hand.
In evaluating secondary data, consideration is also given to the
organization which collected the data and the purposes for which they
were collected. Accuracy will depend on the application of objective and
systematic methods of data collection. The reputation, experience, and
degree of independence of the research organization are relevant
considerations in assessing the reliability of the data, and reliable sources
usually give a detailed description of their methods of data collection. In
this regard, data based on mandatory reporting is often considered more
desirable than voluntary compliance. An organization such as a national
tourism administration (NTA) which regularly collects and publishes
travel data as its chief function can provide invaluable data.
In order to obtain current and reliable statistical data on tourism,
standard definitions, classifications, and measurement methods and
objectives have been established to assist NTAs. In June 1991, the
Original sources
Published sources
Advantages
Disadvantages
World Tourism Organization (WTO) and the Government of Canada
organized an International Conference on Travel and Tourism Statistics
in Ottawa, which brought together representatives of NTAs, the
tourism industry, national statistical offices and international and
regional organizations to define the statistical needs of the industry for
analysis, market research, industry performance and tourism forecasts.
The recommendations of the conference included concepts, definitions
and classifications covering the basic tourism unit, tourism demand,
tourism supply and tourism expenditure.
Primary Data
When it is not possible to get the needed information through
secondary sources, research organizations obtain primary data or
original sources of information. There are various methods that are
used to gather primary data, including the widely used survey method.
Non-survey techniques include the observational method and the
experimental method. Given the complex nature of travel and tourism
and the challenges presented by a fast changing economy and
marketplace, there is an increasing need to conduct primary research
for the sake of developing marketing and planning strategies. Some
types of surveys and their uses are (Goeldner etal., 1995):
Factual surveys which pose questions to the respondent allowing an
accurate answer rather than an opinion. Factual surveys generally
provide better results than opinion or interpretive surveys.
Opinion surveys which ask participants to express an opinion or
make an appraisal. For instance, a respondent may be asked to rate
the services provided by the resort as excellent, good, average, fair,
or poor, enabling management to assess guest satisfaction.
Interpretative surveys which ask questions to gain insight into the
subjects psychological behavior, for example, why they chose a
particular tour package. Results from interpretive surveys tend to be
limited since they rely on self-reporting, and respondents may be
unclear or unwilling to state why they made certain decisions.
Surveys can be conducted by personal interviews, telephone
interviews, self-completed questionnaires, focus groups, or electronic
methods. A description of different methods follows:
Personal interviews or face-to-face interviews use a pre-structured
questionnaire allowing the interviewer to exert a certain degree of
control over the interview environment. In addition, the interviewer
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Chapter 9: Tourism Research and Forecasting
Standardization
Gathering
methods
Different types
of surveys
can generally gather more information by adapting to the situation
and establishing a rapport with the respondent.
Telephone interviews also use a pre-structured questionnaire but are
considered more cost efficient than personal interviews. However,
compared to personal interviews, telephone surveys are limited in
that they are briefer and less flexible. Industry guidelines
recommend that the interview time not exceed 25 minutes (Rogers,
1991). However, depending on the market, even 25 minutes may be
considered too long.
Self-completed questionnaires are mailed to carefully selected
respondents or distributed on-site. Mailed surveys allow the respondent
to chose the time and place for completion, and questionnaires can be
longer than telephone surveys. It is an impersonal approach but a cost-
efficient method of collecting information.
Focus group discussions are employed for researching complex
attitudinal and motivational issues. Focus group discussions typically
involve eight to ten representatives of some target market segment
who are led through a discussion of perceptions, images, and beliefs
by a trained moderator. Studies from focus group discussions have
provided insights into travel, revealing that many travel decisions
have very little to do with the excellence of the destinations, but
rather with the travelers emotional need to travel and his or her image
or perception of the destination. The destination is often an excuse to
go rather than the reason (Davidson & Wiethaupt, 1989, p. 45).
Electronic surveys have become more common through user-friendly
computer software programs and widespread use of electronic mail (e-
mail) and the Internet. Computer devices programmed with survey
questionnaires and equipped with keyboards or touch screens are
found in airports, hotels, or shopping malls to record consumers
responses to surveys. Electronic surveying is less costly and time
consuming because it is self-administered and tabulated automatically.
Some nonsurvey techniques are as follows:
Observational methods involve primary data collection using
personal or mechanical recognition and recording of people,
objects, and occurrences instead of relying on the respondents for
information. This method of collection reduces the bias effect of the
interviewer, but the observation method is considered to be costly
and does not have the ability to examine the motives, attitudes, or
opinions of the visitors (Boyd, Westfall, & Stasch, 1977).
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Tourism Research
More surveys
Non-survey
techniques
Experimental methods involve variables which are manipulated in
an artificial condition. A test or model is used to simulate the real
world and variables are manipulated to allow researchers to measure
the variations and the cause and effect relationship between the
variables (Boyd etal., 1977). While the complex nature of the
tourism product makes the experimental method difficult to use, test
marketing using simulation models to conduct pricing experiments
has been successful in tourism research (Goeldner, etal., 1995).
9.3 Organizations Conducting Research
Tourism research is conducted by both public and private
organizations. Proprietary (private) research refers to research that is
being done to solve problems within the company, and results are often
not revealed to other businesses. Universal research, on the other hand,
is made public through technical journals or literature. Typically,
universal tourism research is conducted by local, national, and
international tourism organizations and educational institutions.
Airlines, hotels, consulting firms, and advertising agencies, on the
other hand, all engage in private research.
9.3.1 Tourism Organizations
International tourism statistics are available through a number of sources.
International organizations like the World Tourism Organization (WTO)
publishes The Compendium of Tourism Statistics (annual), Yearbook of
Tourism Statistics (annual), and Travel and Tourism Barometer
(quarterly). In addition, the Organization for Economic Cooperation and
Development (OECD) and Pacific Asia Travel Association (PATA)
publish annual reports that include tourism statistics.
Other sources for worldwide tourism statistics include: Travel Industry
World Yearbook: The Big Picture (annual) by Somerset R. Waters; Travel
and Tourism (annual) by the World Travel and Tourism Council (WTTC)
sponsored by the American Express Travel Related Service Company,
Inc.; The Tourist Review (periodical) published by the International
Association of Scientific Experts in Tourism (AIEST); and World Travel
and Tourism Review: Indicators, Trends, and Forecasts by CAB
International. The Economic Intelligence Unit (EIU) publishes Travel and
Tourism Analyst, International Tourism Reports, Travel Business Analyst
(Asia-Pacific or European editions) and various country reports.
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Chapter 9: Tourism Research and Forecasting
Private and
universal research
Available statistics
Sources
Tourism research on specific topics can be located through several
useful abstracts which index dozens of tourism and hospitality
journals. These include: (1) Leisure, Recreation & Tourism Abstracts
compiled by CAB International, United Kingdom; (2) Lodging,
Restaurant & Tourism Index (quarterly, CD ROM) published by the
Restaurant, Hotel and Institutional Management Institute at Purdue
University; and (3) The Hospitality Index: An Index for the Hotel, Food
Service and Travel Industries (quarterly, CD ROM) compiled by The
Consortium of Hospitality Research Information Services (CHRIS).
International statistics on the hotel industry are available through
annual publications entitled Worldwide Hotel Industry by Horwath &
Horwath and Trends in the Hotel Industry: International Edition by
Pannell, Kerr, Forster. In addition, most national tourism
administrations have the responsibility of compiling national tourism
statistics and provide this information in regular reports.
The World Tourism Organization has developed a series of technical
manuals to assist in statistical data gathering including: Collection and
Compilation of Tourism Statistics; Concepts, Definitions and
Classifications for Tourism Statistics; Collection of Tourism Expenditure
Statistics; Collection of Domestic Tourism Statistics; Tourism and the
Balance of Payments.
9.3.2 Educational Institutions
Educational institutions, particularly universities and colleges with
specialties in travel industry management and hotel, restaurant, and
institutional management (HRIM), conduct applied tourism research
studies. Tourism as a topic of research can also be found in academic
disciplines like economics, geography, urban planning, sociology,
anthropology, and business management, among others. These studies
may be published in academic or trade journals or they may be
proprietary in nature. Given the increasing concern about the
environmental impacts of tourism, tourism research is extending into
new areas such as environmental science and environmental
economics. Tourism research by academicians has greatly contributed
to the recognition of tourism studies as a legitimate field of academic
inquiry through the use of improved methodologies.
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Organizations Conducting Research
Abstracts
Hotel statistics
Technical manuals
Academic
research
9.3.3 Private Organizations or Firms
Many firms conduct proprietary tourism research in such areas as
product development, feasibility studies, and market trends. In
particular, large-scale industries such as airlines conduct on-going
studies on their operations, customers, and the market. Carriers either
have their own market research departments or contract with
professional research firms or consultants. Similarly, hotels may use
recent secondary and/or primary data to analyze product success, market
trends, advertising effectiveness, and impacts of new technologies on
human resources. Hotels also collect primary data such as occupancy
rates, average room night, guest satisfaction and so forth. The ideal
situation for tourism research at a destination is the collaboration
between public and private agencies in providing tourism statistics.
9.3.4 Consulting Firms
There are a variety of consulting firms which conduct tourism research
in such areas as market research, feasibility studies, impact studies,
strategic planning, and destination development. These firms may
specialize in accounting, architecture, market research, or tourism
research itself. Often outside consultants are hired for their particular
expertise. Other arrangements include the use of a team approach
involving a partnership of both local and outside experts from start to
finish on a research project.
9.4 Relationship Between
Marketing and Research
9.4.1 Destination Marketing Research
as a Planning and Evaluation Tool
Marketing research is a necessary tool for both public and private
decision makers to make effective marketing, planning, and
management decisions within the tourism industry. Tourism-related
data include information such as: (1) trip and traveler characteristics,
(2) inventories of accommodations, transportation modes, attractions
and facilities, (3) usage and load factors, (4) visitor motivation and
satisfaction, (5) resident attitudes, and (6) impacts on environment.
Because of the extensive and broad nature of the data, no single
organization has sufficient resources to collect this range of data. The
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Chapter 9: Tourism Research and Forecasting
Industry
research
Outside experts
Necessity of
research
responsibility for the collection and dissemination of travel data is
normally relegated to government or a quasi-governmental national
tourism administration, and the information can then be used by both
public and private organizations for planning or evaluative purposes.
As discussed in Chapter 8, marketing research is used to develop
competitive products and successful marketing strategies. Increased
traffic counts and achievement awards from the industry are commonly
used to justify advertising expenditures. However, there is a need to
measure the effectiveness of marketing and advertising efforts beyond
increased market share, and tourism marketing organizations are
increasingly being asked to account for the effectiveness of marketing
programs through objective measurements that show specific economic
and social outcomes such as job creation, tax revenues, or investments.
Moreover, because tourism marketing is partially or fully funded by
public moneys, the demand for accountability will continue to increase.
Government funding for tourism marketing is justified on the basis of the
substantial government revenues accrued from the multitude of direct and
indirect industries that receive tourism-related income. Government
support for tourism marketing is also critical from the standpoint of
presenting a coherent marketing strategy for the destination and fostering
cohesiveness and collaboration within this broad and diverse industry.
However, the support of tourism marketing through public funds is under
scrutiny in some places due to declining sources of government revenue.
Because of the unique nature of tourism, it can be argued that the
management and marketing of tourism cannot be entirely separated from
government support. The tourism product, which consists of all the
goods and services necessary to accommodate visitors, is fundamentally
different from other export commodities in that it is the consumer who
travels to the product. Furthermore, the point of production is also a
place of residence and thus the environmental and social impacts of
tourism on the host community are of public concern. Hence, at every
stage involving the production, distribution and consumption of tourism,
government involvement is necessary to ensure conformance with
community goals and priorities. This includes control mechanisms such
as: (1) environmental impact statements to be included in feasibility
studies for resorts or attractions, (2) location and development of
transportation terminals and networks, and (3) government-sponsored
conversion studies for tourism advertising campaigns.
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Relationship Between Marketing and Research
Measuring
effectiveness
Accountability
Government
involvement
for community
9.4.2 The Tourism Market Research Program
A sound market research program begins with support and commitment
from top management. In the private sector, large firms are more likely
to have a formal research program, but all firms use market information
in some fashion (see Table 9.2). Continual advances in computer
hardware and software have made it feasible for firms of any size to
engage in interpretation and analysis of tourism market information. In
fact, the strategic use of information technology is now regarded as a key
determinant of competitive advantage. An organizations tourism market
research process involves the following (Davidson & Wiethaupt, 1989):
Setting goals which relate to some specific benefit such as more
visitors, more revenue, or more tax dollars. More complex goals might
be to match demand with supply, more efficient use of resources, or
obtain a cleaner environment. Goals of the marketing effort reflect the
influence of marketing variables such as price and promotion since
changes taking place in a destination such as increases in the number
of visitors may also be due to promotional efforts of the airlines. Goals
of destination marketing also go beyond increasing the volume of
visitors and may include obtaining more first-time visitors, increasing
off-season travel, or persuading visitors to extend their length of stay.
Identifying target audiences which are defined by psychographic,
geographic, and demographic characteristics as discussed in
Chapter 7. This process facilitates the development of focused
advertising or promotional programs, and this information can also
be used to develop research programs which attempt to identify
target markets more clearly to measure and assess behavior change.
Developing Strategies. A careful assessment of the strengths,
appeals, and weaknesses of the travel product or service contributes
to the effectiveness of any new marketing program. Much of the
data is obtained from past market research efforts, and benchmarks
are important in the development of strategies. Areas which are
often included in the measurement process are:
- Positioning. This type of analysis will point out whether any changes
in promotion or the product are needed based on how the travel
marketer would like the product to be perceived by consumers.
- Competition. It is important to know who are the destinations
main competitors.
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Chapter 9: Tourism Research and Forecasting
Accessibility
of information
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Relationship Between Marketing and Research
- Pricing. This allows the consumer to obtain good value based on
a product or service which is price sensitive, i.e., neither over nor
underpriced.
- Distribution. The product should be readily available to
consumers and in a manner or form they prefer.
- Promotion. Promotion and advertising programs are measured by
their success in communicating new information, increasing
awareness, changing the consumers mind, creating a new image,
and giving a return on the investment that justifies the use of funds.
Source: World Tourism Organization, Collection and
Compilation of Tourism Statistics (1995), p. 88.
Table 9.2: Major Types of Tourism Establishments for Tourism Marketing Research
Accommodations
Hotels and motels
Hostels and refuges
Camping and caravan sites
Health-oriented accommodations
Other lodging
Restaurants, bars and canteens
Restaurants
Bars and other drinking places
Night clubs and dinner theaters
Transportation
Air transport
Interurban rail passenger service
Scheduled and long-distance tour buses
Cruise ships
Recreational, cultural, sporting activities
Dramatic arts, music and other art activities
Amusement parks
Museums
Historical sites and buildings
Spectator sport facilities
Gambling, betting operations, casinos
Participant sport facilities
Fairs, festivals and other special events
Convention and conference centers
Other services
Travel agents
Tour operators
Guides and sightseeing services
An objective marketing research program that addresses these concerns
may uncover weaknesses and strengths of the tourism program. As
marketing and advertising budgets of destinations around the world
continue to increase, it is important to realize that ultimately all
destinations are competing for the same travel moneys. While marketing
efforts may increase market share, maintaining or increasing the market
share is a challenging task in an increasingly mature marketplace. Given
the fact that most funds for marketing and advertising a destination are
paid by the taxpayers, travel marketers have to be specific in assessing
how well those funds were invested. In this environment, justification for
continuous public support requires good accountability research study.
9.4.3 Accountability Research
for Destination Marketing
Accountability assessment or evaluation research has been defined as
the sound measurement of the degree or the extent to which stated
goals of a specific marketing effort are being or were achieved
(Davidson & Wiethaupt, 1989 p. 44). In short, the statement of the
goals themselves is the key to this definition. Travel marketers need
numerical goals that are realistic, meaningful, and measurable.
Accountability assessment measures more than performance and
assists in the review of the adequacy of the goals themselves so that
travel marketers can determine whether objectives are realistic and
achievable. Accountability assessment also provides guidance for the
improvement of future marketing performance.
Conversion studies are commonly used in accountability research to
evaluate media advertising by measuring how many inquirers were
converted into visitors. Other ways to assess marketing effectiveness in
addition to conversion studies include studies that examine the
outcomes of familiarization tours/sales blitzes and trade missions,
travel writer tours, consumer shows, direct mail, international welcome
centers, outdoor advertising, visitor centers, media programs, and
hospitality training (Perdue & Pitegoff, 1990, pp. 45-49).
Accountability research generally should address four areas:
Is the campaign bringing about the desired change(s)?
The objective of a marketing plan is to focus on bringing desirable
changes in the target market. These changes may include increased
consumer awareness of the destination, improved image, or increased
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Chapter 9: Tourism Research and Forecasting
Realistic goals
Accountability
research
visitation and require before and after measures in order to determine
the degree of success of increased awareness created by the campaign.
Is the campaign changing the target market?
Market segmentation is an essential component for the evaluation of
tourism marketing, and target markets are defined geographically,
demographically, or psychographically. If segmentation is used,
accountability research can focus on the changes that occurred in
the target market, rather than on the limited information provided by
overall changes in the entire market.
Is the appropriate measure of change being used?
Other measures of success exist rather than economic return on
investment. A number of studies have indicated that 60 to 70 percent
of the people who request travel information, have already made
their trip decision. Other studies have shown that previous
experience and positive word of mouth from friends and relatives
dominate as key reasons for destination choice. Given these
findings, studies have focused on visitor satisfaction, assessing how
satisfaction depends on actors such as information packets, friendly
employees, and others.
Is the measure of change sufficiently precise to adequately measure
the projected campaign results?
Accountability research is designed to adequately measure the
projected change. Measures of success are sensitive to the level of
expected change brought about by the marketing campaign. Given
the direct correlation between measurement precision and research
cost, it is important that the desired level of accuracy in evaluating
the marketing effort be determined before designing the research
process (Perdue & Pitegoff, 1990).
For accountability assessment purposes, various aspects of the tourism
promotional and marketing campaign are examined in addition to the
overall campaign. For example, evaluation of a television campaign
may include both an overall assessment of the campaign as well as
assessments of different commercial formats and media schedules.
Further, accountability assessment should provide clear guidance as to
how future campaigns can be improved. Generally, such an assessment
is not regarded as an end in itself but rather as a series of insights to
help researchers do a more effective job in planning marketing
programs in a highly competitive environment.
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Relationship Between Marketing and Research
Examining
different aspects
9.4.4 Making Research Understandable
to Practitioners
The volume of tourism marketing research studies has increased
greatly over the years, yet in many cases, this has not resulted in a
corresponding increase in the use of these studies by tourism
businesses (Taylor, Rogers, & Stanton, 1994). Reasons for the gap
between the producers and users of research include such reasons as:
(1) research that is not easily translatable into useable information
because of unfamiliar terminology or methodologies, (2) valuable
results that are not used due to user resistance, or (3) findings that are
not sufficiently distributed to concerned parties.
This gap highlights a problem of research use. In order for research to
be translated into information that is easily interpreted and used by the
practitioners, there needs to be good communication between the
suppliers and users of research. Increasingly, mechanisms for
collaboration between government, academia, and private industry are
being established to accomplish this goal. These could be jointly
funded projects by government and private sources, specific industry
sponsored projects, industry association involvement in academic
research, and private consulting by academics.
9.5 The Importance of Forecasting
Tourism Demand
Tourism demand forecasting is the basic element that is needed by
individuals, public or private organizations, and governments that are
planning future tourism developments. Decisions to be made on prices,
promotional or strategic marketing programs, distribution and allocations
of human, natural, and capital resources all require reliable predictions of
current and future demand trends. Forecasting the number of tourist
arrivals, their service needs, and their seasonality are also crucial for
planners to decide on allocation and distribution of infrastructure,
accommodations, transportation, attractions, promotions, and other
services. The goal is that well-planned tourism development based on
reliable and valid tourism forecasts can bring about long-term success and
benefits, while minimizing social and environmental problems.
9.5.1 How Tourism Demand is Measured
Demand is affected and limited by supply. Operators of tourism
businesses must make an effort to match demand with supply in order
to prevent losses through either under- or over-supply. Tourism is
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Chapter 9: Tourism Research and Forecasting
Gap between
research and
business
Importance of
communication
Predictions of
future for long-
term benefit
ultimately an experience of travel for the sake of pleasure and cannot
be stored like material products. Income that is lost from unsold airline
seats or unoccupied hotel rooms cannot be recaptured at some future
date. Thus, a successful tourism destination depends on linking supply
and demand by attaining sufficient load factors for airlines and
occupancy rates for hotels rooms.
There are several measures of actual demand: (1) number of visitors,
(2) visitor-days or visitor-nights, and (3) per capita spending. Potential
demand consists of possible future visitations. The demand segments
include international and domestic markets, as well as local residents.
9.5.2 Elements of Tourism Demand
The number of people who engage in travel depends on the factors that
encourage or discourage travel at any given time and place. Factors that
promote travel are called propensities to travel and include proximity
of large populations with high disposable incomes, low travel costs,
favorable exchange rates, attractive destinations, and a strong cultural
tradition for travel. Factors that discourage travel are called resistances
to travel and include poor accessibility, high costs, poor image of the
destination, political instability, and concerns about safety or sanitation.
9.5.3 Forecasting Tourism Demand
It is possible to forecast tourism demand by using quantitative or
qualitative approaches. Quantitative methods rely on past statistical
information that can be counted and measured, while qualitative methods
depend on human judgements or opinions. Quantitative methods
include: (1) causal and (2) non-causal methods, while qualitative
approaches include: (1) traditional techniques, (2) the Delphi technique,
and (3) the Judgment-Aided Model (JAM). These approaches will be
briefly discussed. The best forecasts use a combination of both aspects.
Quantitative Approaches
Quantitative approaches to demand forecasting can be divided into
causal and non-causal (time-series) methods. Causal models attempt to
explain changes in tourism demand in relation to one or more
explanatory variables in order to forecast future demand. Causal
models include econometric models that use: (1) multivariate
regression techniques or (2) gravity and trip-generation models.
Multivariate regression analysis is the most popular causal technique
used for demand forecasting. Multivariate regression models examine
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The Importance of Forecasting Tourism Demand
Linking supply
and demand
"Actual demand"
Factors that
encourage and
discourage travel
Statistical
information and
opinions
Causal and non-
causal methods
the influence of selected factors such as levels of tourist income, travel
cost to the destination, relative price levels, or the currency exchange
rate on visitor arrivals. These sophisticated econometric models may
be used to test for possible changes in demand due to variations in the
causal factors, such as what would happen to tourist spending if tourist
incomes or airfares rise by five percent, or exchange rates dropped by
10 percent. However, it is best to have fewer variables in order to cut
down on costs and statistical complexity.
Gravity and trip generation models have provided useful results
in examining the effects of propensities such as population and
tourist income versus resistances such as distance and costs on
tourism demand. Some limitations to using these models to forecast
demand are the extensive data requirements and the problem of
testing for how well the model fits the data.
Non-causal models, or time-series methods, rely on past trends of a
single variable like visitor arrivals or visitor spending in order to
estimate future trends. Non-causal methods are used when causal
models are inappropriate due to lack of data or incomplete knowledge
regarding the causal structure.
Time-series models use historical data collected over time and
project these trends toward the future. The assumption is that what
happened in the past will influence the future direction and
magnitude of tourism demand. This approach can adequately predict
short-term demand, but poor forecasts can result due to unforeseen
changes in trends. Although causal models are more theoretically
sound, non-causal models are more frequently used because they
generate acceptable forecasts at low cost.
In comparing the two approaches, the causal approach requires
substantially more data and considerably more user understanding than
does the non-causal method. In terms of accuracy, a comprehensive
study of modeling and forecasting tourism demand in Europe
concluded that the more sophisticated and complicated econometric
methods were not necessarily more accurate compared to the more
cost-effective times-series models (Witt & Witt, 1992). The findings
suggest that the value of causal models is limited to identifying how
tourism demand changes in relation to price and income, rather than
being used as a direct forecasting tool.
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Chapter 9: Tourism Research and Forecasting
Econometric
models
Propensities vs.
resistances
Projecting
historical data
towards future
Similarity of
accuracy
Qualitative Approaches
Qualitative forecasting methods are also designed to predict future
demand and to assess the possible outcomes of events. However, in
contrast to the more objective approach provided by quantitative
methods, this approach seeks subjective inputs through the
perceptions, judgments, and accumulated experiences from experts in
the tourism field. In particular, qualitative methods can provide a
valuable means to augment quantitative tourism forecasting models.
In addition, qualitative methods are useful if past data are insufficient or
inapplicable because the destination is experiencing new or unanticipated
developments. For instance, a destination that is just starting to develop its
tourism industry may not have historical data on market shares,
seasonality, and visitor expenditures. Another destination might be
contemplating expanding into new capital-intensive or controversial
markets like conventions or gaming. Moreover, if a region experiences
social and political unrest, an existing data base may no longer be valid for
quantitative forecasting. Typically, these are situations where qualitative
models could be useful in analyzing and predicting consumer behavior.
Examples of qualitative methods include market surveys, the Delphi
method, and the Judgment-Aided Model:
Market surveys of actual or potential visitors are the traditional way
of obtaining qualitative information. Visitor surveys, however, are
expensive, and an alternative is to survey tourist service providers
such as airlines, hoteliers, and tour wholesalers. For example, a
national tourism administration could canvass hotels and tour
wholesalers about expectations about advanced reservations and
expected hiring for the following year. Depending on the extent and
degree of industry collaboration, fairly accurate forecasts are
possible. Speculations about the future from experienced and well-
informed tourism authorities can provide valuable insights,
direction and rationale for decision-makers.
The Delphi Model technique is essentially a method to obtain
consensus from qualified individuals about the likely occurrence of
certain situations or events. A series of questionnaires are
administered to a group of experts. Each participant answers the
questionnaire independently from each other to prevent peer
pressure or group dominance. Two or more rounds of questionnaires
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The Importance of Forecasting Tourism Demand
Perceptions and
judgments
New developments
Market surveys
Questioning
experts
are necessary to achieve consensus or divergence. Expert opinion
can yield valuable results that can supplement quantitative
economic models for long-range tourism planning.
Judgment-Aided Model (JAM), or scenario writing, is similar to
the Delphi method in that a panel of experts is assembled in order to
reach a consensus on a particular matter. The difference is that
participants meet in a seminar format to debate and explore ideas. A
scenario includes a description of: (1) the current situation (baseline
analysis), (2) potential future situations, and (3) future paths that
indicate how the current situation could develop into a future image
(Uysal & Crompton, 1985). This approach can prove valuable in
obtaining short- to medium-range tourism forecasts by convening
tourism and economic experts on a regular basis, at least once a
year. These forecasts can also be fairly accurate and provide a wealth
of information on expected occupancies, employment, construction,
retail, and other business trends.
In conclusion, quantitative forecasting requires numerical data series
and assumes that past trends will continue into the future. Non-causal
models have more utility for practitioners, while academicians are
more likely to develop causal models. In general, quantitative
approaches are more suitable for short-term forecasting. Major
drawbacks of quantitative approaches include the need for accurate
data series of the explanatory variables, inability to adjust to
unforeseen trends or events, reliance on aggregated data, and their
inability to incorporate an understanding of consumer motivations and
behavior. In an industry as dynamic as international tourism,
quantitative forecasts should only be used with extreme care.
Probably no single forecasting method can be considered to be appropriate
for all situations. For example, the Tourism Forecasting Council of the
Australian Tourist Commission has developed its visitor arrivals forecasts
through a combination of quantitative and qualitative techniques. Using
econometric techniques, models were developed for each source market
based on income and price variables. Qualitative adjustments are then
made to the models based on a number of factors such as expected
changes in consumer behavior, government policy, external political
factors, or unusual events. The final forecasts represent a most likely
outcome for arrivals based on these indicators. The forecasts are then used
to assist in management decision making (see Table 9.3).
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Chapter 9: Tourism Research and Forecasting
Seminar
of experts
Disadvantages
of quantitive
forecasts
Australian
example
Forecasting tourism demand is a complex process that requires inclusion
of all relevant factors and parties in some dynamic fashion. Decision
support can now be provided via sophisticated computer software that
facilitates the processes involved in both quantitative and qualitative
analyses. It is possible for experts to meet in electronic meeting rooms
that shortens the time and cost required to achieve a consensus in
qualitative approaches. Moreover, expert computer systems can be
designed to simulate management functions and decision making
processes. It is suggested that the ideal situation would be a collaboration
of both public and private interests in using some combination of both
quantitative and qualitative approaches for tourism forecasting and
planning.
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The Importance of Forecasting Tourism Demand
Source: Australia, Commonwealth Department of Industry Science
and Tourism, Forecast, Vol. 2, No. 2 (June 1996), p. 3.
Table 9.3: Forecasts At A Glance - Australia
INBOUND TOURISM TO 2005
General
International arrivals to grow by 9 percent a year to 8.8 million overseas
visitors in 2005.
Growth to slow from the expected growth of 11.8 percent in 1996, except in
the Sydney Olympics year.
Fastest growth to be from Asian countries other than Japan.
Visitor Nights
Visitor nights to grow by 6.8 percent a year, reflecting a decline in average
length of stay due to the changing composition of the international market.
Nights in hotels, motels and guest houses to grow more quickly, at 8.8
percent due to high use of commercial accommodation by visitors from Asia.
EARNINGS
Real tourism export earnings to reach $30.6 billion in 2005, up from $13.1
billion in 1995. This represents average annual growth of 8.8 percent.
TOTAL VISITOR NIGHTS TO 2000
Total visitor nights (domestic and international) to grow by 3.7 percent a year
to 346 million.
Total nights spent in hotels, motels and guest houses to grow by 5.1 percent
a year to almost 75 million.
Computer aid
SUMMARY
Tourism research does more than just provide information for travel
planners and managers to make better decisions. The value of tourism
research is its potential for providing an ongoing and comprehensive
means of decision support and proactive planning. Marketing research,
which is an important part of tourism research, is a necessary tool for both
public and private sector decision makers to determine effective
strategies. Today, there is an increasing need to use sound marketing
research in order to develop competitive products and successful
marketing strategies. Well-planned tourism development must also be
based on reliable and valid forecasting information, which attempts to
anticipate the future and which is another important dimension of tourism
research.
DISCUSSION QUESTIONS
1. List and define the sources of data that are used in tourism research.
2. What types of organizations are involved in conducting tourism
research?
3. Briefly describe what is involved in an organizations tourism
market research process.
4. What are the four areas that accountability research should address?
5. What are the reasons for the gap between producers and users of
tourism research?
6. Compare quantitative methods versus qualitative methods in
forecasting tourism demand.
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Chapter 9: Tourism Research and Forecasting
4
S
e
c
t
i
o
n
Tourism Impacts
CHAPTER 10
Contributions of Tourism to Economic Development
CHAPTER 11
Social and Cultural Aspects of Tourism
CHAPTER 12
Sustainable Tourism and the Environment
CHAPTER 10
Contributions of Tourism to Economic Development
Learning objectives
To examine the economic effects of tourism on a global, regional, and local
level.
To understand the economic benefits and costs of tourism.
To examine several methods for measuring economic impacts.
To develop an understanding of indicators and monitoring impacts.
To examine some of the obstacles to obtaining economic benefits
through tourism activity.
To consider some strategies for maximizing economic contributions.
Key terms and concepts
balance of payments
cost-benefit analysis
direct and indirect employment
direct, indirect, and induced benefits
indicators
input-output analysis
leakage
price elasticity
tourism multipliers
tourism satellite accounts
10.1 Introduction
There is a growing recognition that innovative approaches must be
adopted in order to maintain the economic health of a number of
countries, communities, and regions. While conditions vary from region
to region, tourism has been seen as an important form of economic
development. It has also been promoted as a somewhat benign agent of
economic and social change, a promulgator of peace through interaction
and dialogue, and a service-based industry capable of creating
employment and income. However, in countries and states with
burgeoning tourism traffic, there is also an awareness and knowledge of
the more intangible and indirect economic costs of tourism.
While it can be argued that tourism does offer an important alternative
form of economic activity, it must be seen as only one component of a
larger series of development initiatives within any economic system. That
is not to say that tourism in selected circumstances cannot be the major
source of income and jobs in a community or region, but rather that the
impact and role of tourism will vary from region to region. Experience
has shown that tourism may take many forms and meet a number of
tourist motivations. Experience has also shown that destinations can rise
and fall in popularity, driven by various factors in the destinations internal
211
10
Contributions of Tourism to
Economic Development
Economic
development and
social change
Variable impact
and external environment such as political unrest, natural catastrophe, and
demand or supply-side problems. A destination that is entirely dependent
on tourism is much more vulnerable to these shifts than an economy that
is diversified and has tourism as one of its industries.
This chapter provides an overview of the economic contributions of
tourism through an examination of its economic benefits and costs.
This chapter also discusses the measurement of economic impacts and
the monitoring of economic activity. Obstacles to economic
contributions and strategies to manage these issues are also explored.
10.2 Understanding Economic Impacts
10.2.1 Tourism in the Global Economy
Statistics provided by the World Tourism Organization (WTO)
emphasize the economic significance of tourism at the global level. In
1995, international tourist arrivals were estimated at 567 million tourists
worldwide while total receipts from international tourism amounted to
US$372 billion (World Tourism Organization, 1996c, p. 1). International
tourism receipts grew faster than world trade (commercial services and
merchandise exports) in the 1980s and now constitute a higher
proportion of the value of world exports than all sectors other than crude
petroleum/petroleum products and motor vehicle/parts/accessories
(WTO, 1995d, p. 21). Travel and tourism is also the worlds largest
creator of jobs in most countries, providing employment for over one
hundred million people worldwide. International travel and tourism
contributes about US$166 billion of tax revenues (WTO, 1993b).
International tourist arrivals are forecast to grow to 660 million in 2000
and to 937 million by 2010 (WTO, 1994e, p. 36).
The ability of a tourism destination to attract tourism revenues is
influenced by a complex set of characteristics, including:
Political constraints and incentives (such as taxation policies
regarding local and foreign investment and imports).
Resources, facilities, and conveniences (attractions, transportation,
access, hospitality, medical and other services, pricing).
Market characteristics (visitor tastes and preferences, disposable
income, propensity to travel, proximity to destination).
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Chapter 10: Contributions of Tourism to Economic Development
Economic
significance of
global tourism
Political stability.
Expertise of human resources and ability of decision-makers (public
and private) to market and promote the destination effectively.
10.2.2 Tourism in the National Economy
Tourism is generally seen as a significant economic contributor to a
nations gross national product (GNP) since international visitors are a
valuable source of foreign currency. One source of economic data on the
economic significance of tourism for a country is its balance of
payments, which is a record of the international transactions of a
country. Kenya is an example of a country where net foreign exchange
earnings from tourism are a significant percentage of gross receipts (90
percent in 1989), indicating that from a balance of payments perspective,
Kenyas tourism industry is very important to the country. In contrast, in
Mauritius tourism accounted for only 10 percent of its gross receipts in
1990 (The Economist Intelligence Unit, 1992). Other examples of
tourisms contribution to GNP in the early 1990s include six percent in
Tunisia, 18 percent in the Maldives, and 32 percent in Barbados
(Sustainable Tourism Development in Industry and Environment, 1992).
10.2.3 Impact of Tourism on Employment
The importance of the tourism industry both as an income generator
and employer is often overlooked by those unfamiliar with tourism and
its work force. Yet, human resources is likely to be one of the most
important issues facing the tourism industry in the near future. WTO
projects that by the year 2005, tourism jobs will increase faster than
traditional industries by as much as 59 percent. The World Travel and
Tourism Council (WTTC) has estimated that tourism employed 1 in 9
workers worldwide or about 212 million people, making it the worlds
largest employer (World Travel and Tourism Council, 1993). For many
countries, tourism is the main employer.
Besides generating millions of jobs worldwide, the tourism industry in
1994 had a payroll of US $1.7 trillion, or 10.3 percent of total
employee wages and salaries (Goeldner, McIntosh, & Ritchie, 1995).
Tourisms share of total employment compensation ranges from 4.9
percent in Eastern Europe, where tourism is in its beginning stages, to
18.7 percent in the Caribbean, where tourism is a mature industry. The
image of tourism as a generator primarily of low-wage and low-skill
employment is a misleading one, and underestimates tourisms impact
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Understanding Economic Impacts
Contribution
to GNP
Human resources
Payroll
10.3 Measuring Tourism
Economic Impacts
10.3.1 Identifying Tourism Activity
One of the points that previous chapters of this textbook have
emphasized is tourisms complexity as an industry, encompassing private
and public sectors transportation, accommodations, retail, food and
beverage, reception and convention centers, and so forth. Because of
on overall wages and salaries. In fact, many of the jobs at the technical,
managerial, and professional levels require education and training
which command compensation commensurate with these
qualifications. In many cases, compensation in the tourism industry is
competitive with high-technology industries.
Tourism provides both direct and indirect employment. Companies that
provide direct employment are those whose employees are in contact
with tourists or directly affect the tourist experience. Companies that
provide direct employment include hotels, food service operators, airlines,
cruise lines, travel agents, attractions, and shopping outlets. Companies
that provide indirect employment in the tourism industry are those that
serve the direct employment companies. These indirect employment
companies, which may be restaurant suppliers, construction firms that
build hotels, and aircraft manufacturers, are dependent on the companies
providing direct employment for their revenues. Overall, direct and
indirect employment in tourism represent a sizeable portion of total
employment. As shown in Table 10.1, both direct and indirect employment
opportunities in tourism are expected to grow over the next decade.
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Chapter 10: Contributions of Tourism to Economic Development
Source: World Travel and Tourism Council, 1993.
Year
Direct Employment
% of Total
Indirect
Employment % of
Total
TOTAL
1991 4.9 5.3 10.2
1994 5.1 5.5 10.6
2005 5.4 5.9 11.3
Table 10.1: Travel and Tourism Employment
Contact with
tourists
Companies
contact with
industry
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Measuring Tourism Economic Impacts
this, it has been difficult to statistically distinguish tourism activity from
other economic activity and to measure its contribution to the overall
economy. The International Standard Classification of Economic
Activities, and other similar classification methods which provide
categories of economic activity that nations use in compiling their
statistics, traditionally have not included tourism. These difficulties are
often cited as the reason why tourisms importance to economic growth
is consistently underestimated, especially by policymakers.
The WTO has played an instrumental role in improving the way in
which tourism activity is statistically identified and measured. Early
efforts to standardize definitions and measurements of international
tourism were quickly overtaken by the rapid pace at which the industry
grew and changed, thus rendering many of the efforts inappropriate. At
the same time, the demand for timely and accurate data has grown
tremendously on the part of organizations and groups such as national
tourism administrations, industry associations, interest groups,
academia, and communities. These demands, in addition to the many
existing sources of data which were often incompatible with each
other, presented a situation where a common standard was vital.
In 1991, the WTO and the government of Canada convened the
International Conference on Travel and Tourism Statistics, known as the
Ottawa Conference. Recommendations of the Ottawa Conference were
then pursued with the leadership of a WTO-established steering
committee. The committees resulting report on tourism statistical
standards was adopted by the United Nations Statistical Commission in
1993. The WTO then published a series of manuals to assist countries in
implementing the standards: Collection and Compilation of Tourism
Statistics; Concepts, Definitions and Classifications for Tourism
Statistics; Collection of Tourism Expenditure Statistics; Collection of
Domestic Tourism Statistics; and Tourism and the Balance of Payments.
Part of WTOs effort has been directed towards a classification system of
tourism activities. As noted above, traditional classification systems of
economic activity have excluded tourism as an identifiable industry. Thus,
in 1993, the WTO gained approval from the United Nations Statistical
Commission on a Draft Standard International Classification of Tourism
Activities (SICTA). SICTA provides a foundation for better analysis of the
supply aspect of tourism. Better understanding of the demand aspect is
also being pursued through work on a standard classification of tourism
products. Together, improvements in supply and demand analysis will
facilitate more accurate answers to the following questions:
Difficulty
estimating
economic activity
Standardization
Statistical
standard manuals
Classifying
tourism activities
What are the products that tourists consume?
Who provides them and how are they produced?
What is the labor input necessary for the production of tourist goods
and services?
What is the contribution of tourism to Gross Domestic Product (GDP)?
How do demand and supply in tourism interact? (WTO, 1995b, p. 71).
Despite these advances in statistical methods, difficulties remain in
measuring the tourism industry. A large part of the problem centers
around the traditional method of defining an industry, which is from a
supply or production perspective. For example, industries such as
agriculture, manufacturing, and construction can be readily identified
by the products and services they produce. For tourism, however, this
method does not work well. Most tourism-related businesses do not
devote all of their production to tourism. Restaurants and retail stores,
for example, generally rely on sales revenue generated by both visitors
and non-visitors for their business.
To seek greater clarity and understanding in measuring the economic
scope of tourism, organizations such as the WTO and the WTTC as well
as individual countries have pursued a consumption or demand approach
the subject. The underlying premise of this approach is that tourist
activity is best defined by a demand characteristic: specifically, the
consumption of a good or service by a tourist (see Chapter 1 to review
WTOs definition of tourist). This approach, along with the use of
tourism satellite accounts (discussed below), enables governments to
more accurately identify and measure their tourism industries.
10.3.2 Structure of the Tourism Industry
Tourism consists of many different types of companies and
organizations. In a particular destination, the services these companies
offer combine to provide each tourist with a single touristic experience.
While the types of companies that comprise the tourism industry vary
widely, they can be grouped and classified by sub-industries or sectors.
For statistical purposes, only major categories within classifications
are separately certified. The main sectors, and some of the types of
companies in each sector, are:
Lodging - Hotels, motels, resorts, bed and breakfast establishments
Food Service - Restaurants, institutional food service contractors
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Chapter 10: Contributions of Tourism to Economic Development
Difficulty
measuring
industry
Demand
approach
Types of
companies
Passenger Transportation - Airlines, ground tour operators, car
rental firms, cruise lines
Channelers - Travel agents, tour wholesalers
Tourist Activities - Attractions, gaming, recreation, entertainment,
shopping establishments
Tourism Organizations - National Tourism Administrations (NTAs),
local government tourism offices, tourism trade associations.
In light of this structure, measuring the economic contribution of
tourism to a community or region is complicated by a number of
factors within and outside the destination. These factors include the
wide range of impacts associated with tourism economic activity, the
diverse number of participants in the activity, the complex inter-
relationships between various sectors, and the ignoring of small
subcategories in the statistical counting.
10.3.3 Supply-Demand and Price Elasticities
At a basic level, tourism economic activity can be understood within the
framework of the concept of supply and demand. For example, as the
price of a hotel room increases, demand should decrease as visitors seek
other locations or accommodation sources, and the supply of available
hotel rooms therefore increases. One way to measure the supply-demand
relationship of tourism goods and services is to determine their price
elasticity. When demand is price elastic, a lower price generates
sufficiently higher demand to generate higher revenues. Similarly, if
demand is price inelastic, a lower price does not result in a sufficient
increase in demand, thus leading to lower overall revenues. Knowing the
price elasticity of demand can aid tourism service providers in designing
their product mix (Lundberg, Krishnamoorthy, & Stavenga, 1995).
10.3.4 Direct, Indirect and Induced Benefits
The economic benefits of travel and tourism can be derived directly or
indirectly. Direct benefits are realized through direct tourist
expenditures for goods and services in the destination, in the form of
business receipts, income, employment, and government receipts from
the sectors that directly receive the tourism expenditure.
Indirect benefits are generated by the circulation of the tourism
expenditure in the destination through inter-business transactions in the
domestic economy. For example, indirect benefits can be generated from
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Measuring Tourism Economic Impacts
Understanding
economic activity
Tourist
expenditures
the investment and spending by the businesses which benefit directly from
tourism expenditures. The direct business receipts, when re-funneled as
investments or used to purchase other goods and services from domestic
suppliers (who, in turn, purchase goods and services from other domestic
suppliers), stimulate income and employment in other sectors.
In addition, tourism spending within the destination can create induced
benefits. As income levels rise due to the direct and indirect effects of
the change in the level of tourism expenditure, some of the additional
personal income (related to the change in tourism expenditures) is spent
within the destination. This results in induced benefits, such as higher
levels of income and jobs in the local goods and service sector. Hence,
tourist spending creates direct benefits in tourism-related services and
sectors such as accommodation, hospitality, attractions, events, and
transportation, and indirect and induced benefits in other sectors such
as agriculture, construction, and manufacturing. Indirect and induced
benefits are also referred to as the secondary effect.
10.3.5 Multiplier Model of Tourism
Revenue Turnover
Multipliers measure the effect of expenditures introduced into an
economy. Tourism multipliers are used to determine changes in output,
income, employment, business and government receipts, and balance of
payments, due to a change in the level of tourism expenditures in an area.
For example, if tourism expenditures increase by 15 percent due to
attendance at a special event in the destination, some of this added revenue
(first round of expenditures) may be used by the event to purchase food
and other goods from the local economy, as well as on wages, salaries, and
government taxes (second round of expenditures). The suppliers to the
event may then spend the money received as a result of the event toward
other goods, services, and taxes, generating yet another round of
expenditures. This process continues, as the additional personal income
derived from the direct and indirect effects of the increase in tourism
expenditures go towards the consumption of local goods and services.
Leakage
Some of the added revenues from the increase in tourism expenditures may,
however, undergo leakage. Leakage refers to the process through which
tourism receipts leave the destinations economy. Revenues may leak out of
the local economy in the form of payment for imports or moneys saved
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Chapter 10: Contributions of Tourism to Economic Development
Domestic inter-
business
transactions
Personal
income spent
Local product
consumption due
to tourism
increase
(without re-investment). Import payments can take several forms, such as
repatriation of profits to foreign corporations and salaries to non-local
managers, as well as payment for imported goods and for promotion and
advertising by companies based outside the destination. Tourism-related
commodities and services purchased from within the destination reduce
leakages through the creation of economic interrelationships among the
goods and service providers in the destination.
Multiplier Effect
The net effect of the successive rounds of spending and leakage of the
added tourism expenditure is the multiplier effect. Tourism multipliers
attempt to measure the relationship between the direct tourism
expenditure in the economy and the secondary effect of the expenditure
upon the economy. Some of the factors which affect the multiplier are the
size of the local economy, the propensity of tourists and residents to buy
imported goods or services, and the propensity of residents to save rather
than spend (where saving reflects money kept out of circulation, and not
re-invested). In mathematical terms, the multiplier can be shown as:
Multiplier = 1/(1 - C + M)
where C = marginal propensity to consume (the proportion of any
increase in income spent on consumption of goods and services), and
where M = marginal propensity to import (the proportion of any
increase in income spent on imported goods and services).
Some commonly used multipliers are:
The income multiplier, which measures the extra domestic income
(primary and secondary) generated by an extra unit of tourism
expenditure.
The employment multiplier, which measures the increased number
of primary and secondary jobs created by an extra unit of tourism
expenditure.
The government multiplier, which measures the government
revenue created by an extra unit of tourism expenditure.
Multipliers can be calculated for a country, region, or community.
However, the information provided by tourism multipliers has to be
evaluated with a great deal of care. Factors such as the size of the
destination can affect the multiplier significantly. A smaller economy
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Measuring Tourism Economic Impacts
Receipts leave
local economy
Spending
and leakage
may have a much smaller multiplier than a larger one since more goods
and services might be imported to meet the tourists needs, resulting in
a greater leakage of revenues out of the destination. Hence, multipliers
may vary greatly among communities within a country or region.
Furthermore, since tourism multipliers can be calculated in a number
of different ways, care must be taken when comparing the multipliers
of different countries. Multipliers should be examined along with other
measurements and indicators to determine the positive and negative
economic impact of tourism on the community.
10.3.6 Input-Output Analysis
Studies of the economic impacts of tourism generally include input-
output analysis. This kind of analysis helps to demonstrate how
economic sectors are related, the number of linkages among them, and
the effect of these linkages. Input-output analysis is a means of
analyzing interindustry relationships by tracking the flow of goods and
services in an areas economy through the chain of producers,
suppliers, and intermediaries, to the final buyer.
Input-output analysis commences with the development of a table that
illustrates, in matrix form, how transactions flow through the economy
over a given time period. The rows of the matrix indicate the sales of the
total output by each sector to every other sector. The columns
demonstrate the inputs required by every sector from the other sectors.
For example, when assessing tourism accommodation, the rows in the
table would demonstrate the output or revenues generated by each
industry from the sale of products or services, including accommodation,
meals, tour guides, and related services such as laundry, or medical
services. The columns would indicate the inputs (goods, services, labor
and capital) that go into the output of the accommodation sector,
including food, utilities, paper products, advertising and promotion
services, wage and salary levels, and other factors.
Using a combination of matrix manipulations, multipliers can be
calculated to provide an assessment of the effects of different sectors
on each other. While input-output tables are helpful in understanding
the linkages of the sectors in the economy, they are limited to providing
a snapshot of inter-industry economic actions at a single point in time
(Archer, 1977; Archer, 1982, pp. 236-24; Fletcher, 1989, pp. 514-529).
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Chapter 10: Contributions of Tourism to Economic Development
Evaluations
and comparisons
Linkages among
economic sectors
Input-output
limitation
10.3.7 Tourism Satellite Accounts
Satellite accounts provide comprehensive information on a field of
economic activity, and are generally tied to the economic accounts of a
nation or region. The tourism satellite account is a relatively new
practice adopted by some countries. For example, the British Columbia
Ministry of Development, Trade and Tourism (in the Province of British
Columbia, Canada), has developed a tourism satellite account and a
separate input-output model designed to display tourisms contributions
to the province, based on the overall input-output model of the province
(Burd, 1994, p. 372). A tourism satellite account has also been
developed by Statistics Canada in order to assess the significance of
tourism to Canada. The account uses concise definitions of tourism and
attempts to provide a clear and real measure of tourism-related
economic activity. Both direct and indirect tourism activities are
accounted for in areas such as demand, supply, employment, and taxes.
This capability is helpful in determining the complex spending patterns
of visitors and the goods and services that cater to their needs. A system
of national accounts (SNA) has been supported by the United Nations
to improve the quality of government statistics. The advantages of the
tourism satellite accounts can be summarized as follows:
Tourism satellite accounts identify the amount of the benefit enjoyed
by various sectors of the economy and the employment, income,
taxes, and other benefits that flow from these sectors.
Tourism satellite accounts provide a comprehensive picture of the
size and scale of tourism in the country, thereby helping governments
and businesses assess the value of tourism to the economy.
10.3.8 Cost-Benefit Analysis
By using a number of economic tools and methods, destinations are
able to obtain a large array of economic information on tourism which
can be used to make decisions. In assessing this information, analysts,
planners, and managers have to determine not just whether jobs and
wealth are created, but also how tourisms benefits are distributed, what
economic, social, and cultural impact costs result from the
development process, and whether the benefits outweigh the costs.
This analysis requires the integration of economic data with other data
(such as environmental, social, and cultural) to provide a reasonable
indication of whether tourism is a good strategy for the destination.
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Measuring Tourism Economic Impacts
Real measure of
tourism-related
economic activity
Analyzing
the distribution
of benefits
The potential economic benefits of tourism development include:
Increased income and standard of living from tourist expenditures.
New employment opportunities.
Increased tax base.
Increased community visibility leading to other economic
development opportunities.
Improved infrastructure and facilities.
Increased resources for the protection and conservation of natural
and cultural heritage resources.
Development of local handicrafts.
The potential costs that need to be weighed against these benefits
include:
Seasonal employment.
Increased cost of living for residents (e.g., land, housing, food, services).
Pollution.
Increased traffic and congestion.
Negative impacts on cultural and natural heritage resources.
Increased crime.
Increased taxes.
Leakage of revenues and dependence on imported goods and services.
Over-dependence on tourism as a prime economic activity.
Cost-benefit analysis is an important activity to perform, but is also difficult
to carry out, since a number of the costs are very difficult to quantify. How
does one measure the sense of place or spiritual happiness of a
population? How does one quantify the cost of habitat fragmentation?
While advances are being made in developing full-cost, environmentally-
based accounting, some measures may need to remain qualitative rather
than quantitative. Another challenge in cost-benefit analysis lies in
identifying the parties who benefit and those who pay the costs of tourism.
Cost-benefit analysis does not have to be applied to the industry as a
whole; often, it is more appropriate to conduct smaller cost-benefit
analyses on specific issues to provide information on specific aspects
of tourism.
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Chapter 10: Contributions of Tourism to Economic Development
Evaluation
challenges
10.4 Monitoring Economic Impacts
The previous section discusses some of the challenges of evaluating
the economic costs and benefits of tourism. Such an evaluation needs
to be undertaken within the context of the overall economic
development of the destination, and should also be integrated with an
analysis of the social, cultural, and environmental costs and benefits of
tourism which are covered in Chapters 11 and 12. This task can be
facilitated by ensuring that proper indicators are established for
evaluating and monitoring these costs and benefits. Many destination
areas have been unable to monitor and evaluate the effects of their
planning with the result that essential data is lacking in many areas.
The setting of monitoring criteria and thresholds is becoming
increasingly important in tourism, given the many ambitious claims
that are made concerning the potential of tourism to satisfy a range of
cultural and societal goals. Growing concerns for global environmental
sustainability will force greater accountability for the economic
impacts of tourism. In addition, in difficult economic times tourism
benefits need to be well understood and documented if public and
private sector funding is to be allocated for developmental purposes.
The prospects for tourism development depend on more sophisticated
understanding and documentation of the benefits and costs of using
tourism as a tool in meeting the goals of a society.
An example of the ways in which tourism can have indirect, long-term
economic impacts can be seen in land value changes. In relatively
undeveloped destination areas, land values often rise substantially as
higher-priced projects replace traditional and less profitable land uses.
If agricultural landowners choose to sell or develop their land for
tourism purposes, the local economy may have to rely more heavily on
food imports to feed tourists and residents. The intrusion of a market-
based system on traditional land values can also have an impact on the
local heritage and sense of place. Conflict may occur between those
landowners who wish to retain the traditional values and uses of land in
their community and area, and tourism proponents. Such conflict could
escalate as tourism pressures increase, and the resulting scars on the
community might take a long while to heal. This short example helps to
illustrate that understanding and measuring the full economic impact of
tourism is more complex than measuring only its direct impacts.
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Monitoring Economic Impacts
Evaluating overall
costs and benefits
Land values
10.4.1 Indicators in Tourism Monitoring
One of the important first steps in ensuring quality monitoring and
evaluation in tourism is to establish indicators which can be used to
measure success and failure. Indicators are statistical devices that
serve to measure or gauge conditions, such as the amount of air
pollution in an area. Indicators are generally used to compare an
existing condition to a base point. Thus, an air pollution index of 150
would indicate an increase over the air pollution measured in the base
year, represented by an index of 100. Indicators for the tourism
industry should include measures for the quality of visitor experience
and for visitor satisfaction, in order to help gauge how future visitation
may be impacted. Given the interdisciplinary and wide ranging
impacts of tourism, it is impossible to deal with all variables, and
therefore reliable indicators simplify the assessment process. Some of
the factors to be considered in developing and using indicators include:
The development and use of indicators can be costly and time
consuming and an early commitment must be made to the process.
The process should be carefully assessed in order to ensure that the
information being produced is accurate and useful in future
decision-making.
Not all indicators are of equal weight and the use of a differential
weighting system often must be instituted.
The process of assessing community economic impacts created by
tourism may produce conflicting results. The assessment process
must recognize the need to both consider and balance these conflicts.
The information gathering process should enable the utilization of
data in varied situations. For example, data on the characteristics of
visitors to a site might be used for assessing economic impacts as
well as refining an interpretive program, and for guiding the
development and assessment of strategic tourism plans.
The development of indicators will have to be undertaken as a
serious first step in being able to make the case for the role that
tourism plays in community economic development.
For indicators to be designed and used effectively, joint agreement on
the nature of the information to be collected by a range of actors is
necessary. This agreement is important to allow collective experiences
to guide the process and ensure that the data is perceived to be legitimate
by the scientific, public, and other stakeholders in the domain.
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Chapter 10: Contributions of Tourism to Economic Development
Measuring
success and
failure
10.4.2 The Assessment Process
For the assessment process to have any influence, it has to be future
oriented and tied into the policy and planning process. The impact
management process will therefore require the following:
A planning and management development approach which requires
ongoing assessment.
Coordination and cooperation among a wide range of actors
(including specialists and government officials).
The training of existing and future personnel in monitoring techniques.
The establishment of an ongoing organizational structure to conduct
monitoring activities.
10.5 Obstacles to Economic
Development Through Tourism
Market Obstacles
Much of tourism activityincluding the ability and interest of tourists
to travel and the distance they are willing to travelis dependent on a
variety of market factors, such as income levels, cost of fuel, job
security, physical condition and mobility, seasonal factors, as well as
travel motivations. Most of these factors are beyond the control of the
individual destination. Thus, the ability of a destination to attract
tourists on a long-term basis requires planning and flexibility. The
ability of a community to conduct a reliable market survey, identify a
positioning strategy, and promote itself is essential.
Community Obstacles
Negative perceptions of tourism are often found at the local level.
Tourism activities, as a whole, are generally viewed as a collection of
small business ventures, unlike a large factory that may be the main
employer in many communities. Often, tourism work is viewed as a
short-term or temporary activity until more appealing and profitable
employment can be found, since many tourism positions are in fact, entry
level jobs or seen as low status occupations. These perceptions act as a
deterrent to greater local participation in tourism-related employment.
Overcoming these negative feelings and providing for a hospitable host
community is an important challenge.
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Obstacles to Economic Development Through Tourism
Future-oriented
planning
Willingness
to travel
Perceptions of
tourism work
Environmental Obstacles
The emphasis in much of tourism activity tends to be on attracting
larger numbers of tourists to a region or site, which can pose problems
for environmentally sensitive areas. It is clear that some environments
may have to generate high-yielding tourist activities to generate
sufficient income while protecting social and natural environments.
This is difficult to accomplish in the highly competitive tourism market.
Lack of Integration
There is limited integration and cooperation between many tourism
businesses given that, for the most part, the local tourism industry
tends to be fragmented or lacking in tourism expertise.
Institutional Obstacles
In some cases there is little coordinated governmental support and
promotion for tourism initiatives. In addition, government can lack the
proper structure to help plan and manage tourism. In other instances,
political and ideological issues make tourism planning and
management difficult to implement.
Employment and Training Obstacles
The availability and quality of training and education opportunities in
tourism planning and management can limit growth. In order to be
effective, training should address the broader context of tourism and
the range of potential opportunities. The lack of employment equity
and opportunities for women can be a serious obstacle in ensuring an
equitable distribution of the benefits of tourism activity, as can limited
access to education and training for disadvantaged groups.
10.6 Facilitating Employment
in the Tourism Sector
The actual extent of employment generated by tourism is contingent
upon a variety of factors. One of the primary factors is the quality and
extent of the resources available in the destination area (such as
heritage resources, the uniqueness of the landscape, and cultural
traditions) and the nature of the market for these resources. Of equal
importance is the ability and willingness of local tourism businesses,
operators, and governmental bodies to develop plans, market
effectively and reach an appropriate target audience.
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Chapter 10: Contributions of Tourism to Economic Development
Problem of
tourist numbers
Limited
cooperation
Little public
support
Lack of equity
in education/
employment
Building
development
In order for countries, regions, and communities to take advantage of
tourism as a form of economic development, a number of changes and
programs are necessary. They include:
Better tourism planning and management practices.
Coordination of activities at all levels of government operations.
Improved cooperation between businesses and communities, as well
as between public and private sectors.
Improved impact assessment and monitoring practices.
The design and delivery of a wide range of tourism educational and
training opportunities.
The provision of marketing and promotional assistance.
More equitable access to employment, promotion, education and
training for marginalized population groups.
Better Planning and Management
Tourism strategies and plans that are developed with local participation
in the planning, implementation, and management stages and
community economic development approaches empower residents to
assume leadership and responsibility for tourism planning. This helps
to increase local control over tourism activities and investments and
local commitment to continuing tourism development, thereby
reducing the potential of leakage and a diminished loss of quality of
life. Tourism strategies and plans that are linked with a broader set of
initiatives and community or economic development plans, and are
afforded the same status and importance as other local plans, has a
better chance of successfully achieving broader community goals.
Coordination
Coordination at both policy and action levels among the various
agencies involved and among the different levels of government is vital
to sound development. This is particularly relevant to the development
and implementation of tourism and environmental policies, and in the
provision of service such as transportation, parking, and water and
sewer capacities.
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Facilitating Employment in the Tourism Sector
Local control,
local commitment
Policy and action
Cooperation
Cooperation among local businesses and tourism operators stems from
the interrelated nature of tourism, where one business or operation can
be directly affected by the success or quality of another. Tourism
partnerships in the areas of planning, management, marketing, and
funding for tourism ventures by local financial organizations provide one
avenue of cooperation. Public-private partnerships to support the
development and funding of tourism initiatives and cooperation among
neighboring regions and communities are forms of cooperation
involving government. In many instances, it is not just one town or site
that attracts tourists, but rather the larger area and its environs. A case in
point is San Francisco, California where the nearby wine producing
counties of Napa and Sonoma are important draws for many tourists.
Cooperative arrangements enable communities to capture a range of
benefits for the entire region, while independent efforts often result in a
duplication of efforts and an inefficient use of limited resources. One
area of particular importance is marketing linkages among operators at
the local, regional, national, and international levels.
Impact Assessment and Monitoring
An area of great importance is the assessment of the impacts of tourism
development proposals. Such assessments include consideration of the
capacity of sites, in terms of their physical, natural, social, and cultural
limits. They also include monitoring and evaluation of plans and operations.
Sustainable tourism may involve direct and indirect forms of
government intervention to ensure the protection of natural resources
and the equitable distribution of economic benefits from tourism
development. Private sector incentive may encourage financial
investment and reinvestment in developmental activity that adhere to
the principles of sustainable tourism. Encouraging cooperation and
collaboration among the diverse actors, as well as public-private sector
partnerships can reduce potential and actual conflicts of interests and
values. In addition, these actions should facilitate the more efficient use
of resources and capabilities to achieve the destinations economic
objectives. As the global environment heads toward the 21st century,
creative leadership will be required to develop and spread the economic
benefits from tourism equitably, while minimizing economic and other
related costs. Careful monitoring and assessment of the economic
impacts of tourism will help destination planners and managers forward
the vision of economic sustainability at the destination and global level.
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Chapter 10: Contributions of Tourism to Economic Development
Making
partnerships
Assessing efficient
use of resources
SUMMARY
Tourism is becoming an increasingly important force in the world
economy. Tourisms contributions to total production and to
employment are significant and growing. As the industry matures and
as governments recognize its importance, there will be greater
emphasis on the accurate measurement of tourisms economic impacts.
This measurement has been hampered by the unique structure of
tourism which does not conform to the established norms of
production-based industry analysis. Increasingly, however, better
statistical approaches based on demand are yielding more accurate
information on tourisms direct and indirect benefits. At the same time,
tourisms costs are being studied more carefully and anticipated in
policy and planning. The development of realistic indicators for
tourisms costs and benefits has played an important role in enabling
the public and private sectors to maximize tourisms positive economic
benefits.
DISCUSSION QUESTIONS
1. What are some of the costs of tourism development that could affect
the economic benefits of tourism in a community?
2. How do tourism expenditures turn over (multiply) in the destination?
3. How can leakage be reduced?
4. What advice would you give a communitys destination manager
regarding the use of multipliers for his community?
5. Why is cost-benefit analysis a useful tool in economic analysis?
6. What role do indicators play in economic analysis?
7. What are some of the obstacles to generating economic benefits
from tourism?
8. As a destination manager, how would you ensure that tourism
development generates employment in your community or region?
229
Summary
CHAPTER 11
Social and Cultural Aspects of Tourism
Learning objectives
To understand the factors in tourism that contribute to social and cultural
impacts, both positive and negative.
To understand the importance of culture as a tourist attraction.
To understand the direct relationship between sociocultural factors and
sustainable tourism.
To be familiar with strategies suggested as ways to mitigate negative
social and cultural tourism impacts and promote positive impacts.
To know what interpretation is and how it can be used to provide quality
tourist experiences.
Key terms and concepts
cultural arrogance
culture shaping inbound tourism
culture shaping outbound tourism
culture shock
demonstration effect
ethnic tourism
interpretation
sociocultural impacts of tourism
urban tourism
11.1 Introduction
One clear lesson from the history of tourism is that not everyone has
been happy to have guests. Tourism has attracted both praise and
criticismpraise for its potential or real economic contributions;
criticism for its sometimes adverse affect on places and host residents.
The criticism of tourism has come not only from academic researchers
and cultural commentators, but also from government officials and
policy makers and from residents and host communities themselves.
When criticisms are strident, the consequences for visitors range from
indifference to outright hostility from the community to the denial of
public investment in tourism infrastructure. The challenge for tourism
managers, planners, and researchers is to find ways to develop tourism
as an industry providing travel experiences which are rewarding and
sustainable for both hosts and guests.
This chapter describes some of the principles that have been proposed
for ensuring that the tourism industry of the future is characterized by
these rewarding and sustainable travel experiences. In particular, the
discussion will focus on the interaction between sustainable tourism and
social and cultural resources. The chapter will review the importance of
social and cultural attractions in tourism, describe the negative and
positive social and cultural impacts of tourism, and discuss practices
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11
Social and Cultural
Aspects of Tourism
Criticism of
tourism
and strategies for tourism planners and managers to alleviate the
negative and encourage the positive impacts. Finally, the chapter will
introduce interpretation as a tool to assist in the management of tourism
and as a means of ensuring quality social and cultural tourism products.
11.2 Sustainable Tourism
As the global community moves towards the twenty-first century, two
major forces in tourism are gathering momentum. The first calls for
greater responsibility to and respect for the host destinations people
and their culture. This pressure is the result of growing recognition that
tourism can and often does have negative impacts on hosts and their
environments. The second force calls for greater responsibility on the
part of individuals who travel, reflecting new patterns of consumption
which include a rise in independent travel and an increasing focus by
tourists on education and self-development as motives for their travel.
These two forces can be seen as coming together in the principles of
sustainable tourism.
Definitions of sustainable tourism emphasize three important features:
1. Quality. Sustainable tourism provides a quality experience for
visitors, while improving the quality of life of the host community
and protecting the quality of the environment.
2. Continuity. Sustainable tourism ensures the continuity of the natural
resources upon which it is based, and the continuity of the culture of
the host community with satisfying experiences for visitors.
3. Balance. Sustainable tourism balances the needs of the tourism
industry, supporters of the environment, and the local community.
Sustainable tourism emphasizes the mutual goals and cooperation
among visitors, host community, and destination in contrast to more
traditional approaches to tourism, which emphasize their diverse
and conflicting needs.
Table 11.1 provides the key principles of sustainable tourism. In
sustainable tourism the needs of the host community are an important
component to be considered in the planning and management of
tourism. The need to ensure that tourism does not adversely impact on
the culture and social structure of a host community is central to
sustainable tourism. The quality of the tourist experience is also
dependent upon the social and cultural features of a destination.
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Chapter 11: Social and Cultural Aspects of Tourism
Responsibility
and respect
Host community's
needs
233
Sustainable Tourism
Source: Globe '90 Conference, Tourism Stream, Action Strategy for Sustainable
Tourism Development, Vancouver BC, Canada. As quoted in WTO, Sustainable
Tourism Development: Guide for Local Planners (Madrid: WTO, 1993), p. 40.
Table 11.1: Principles for Sustainable Tourism
Tourism planning, development and operation should be part of
conservation or sustainable development strategies for a region, a
province (state) or the nation. Tourism planning, development and
operation should be cross-sectoral and integrated, involving
different government agencies, private corporations, citizens groups
and individuals thus providing the widest possible benefits.
Agencies, corporations, groups and individuals should follow ethical
and other principles which respect the culture and environment of the
host area, the economy and traditional way of life, the community
and traditional behavior, leadership and political patterns.
Tourism should be planned and managed in a sustainable manner,
with due regard for the protection and appropriate economic uses of
the natural and human environment in host areas.
Tourism should be undertaken with equity in mind to distribute fairly
benefits and costs among tourism promoters and host peoples and
areas.
Good information, research and communication on the nature of
tourism and its effects on the human and cultural environment
should be available prior to and during development, especially for
the local people, so that they can participate in and influence the
direction of development and its effects as much as possible, in the
individual and the collective interest.
Local people should be encouraged and expected to undertake
leadership roles in planning and development with the assistance of
government, business, financial and other interests.
Integrated environmental, social and economic planning analyses
should be undertaken prior to the commencement of any major
projects, with careful consideration given to different types of tourism
development and the ways in which they might link with existing
uses, ways of life and environmental considerations.
Throughout all stages of tourism development and operation, a
careful assessment, monitoring and mediation program should be
conducted in order to allow local people and others to take
advantage of opportunities or to respond to changes.
11.3 The Sociocultural Impacts of Tourism
The impacts of tourism are commonly categorized as being physical,
economic, and sociocultural. However, because the consequences of
tourism are often complex and interrelated, impacts usually fall into
more than one category. This problem is also apparent in attempts to
define social and cultural impacts.
11.3.1 Defining Society and Impacts
Society is a multi-faceted term generally referring to the patterns of
social organization of and within communities. Societies are the way
groups of human beings locate, differentiate, and organize themselves
into functioning communities. While a society is often thought of as
having a common or dominant culture, many multi-cultural societies
exist, and cultures may extend across national boundaries and regions
of the world. While the term society may at times refer to a whole
country, community is usually a more geographically focused term
referring to settlements in specific locations.
Social impacts, as a rule, refer to changes in the lives of people who
live in destination communities, and are associated more with direct
contact between residents and tourists. Cultural impacts refer to
changes in the arts, artifacts, customs, rituals and architecture of a
people, and are longer term changes which result more from tourism
development. Because most tourism consequences involve changes to
both daily life and culture, the term sociocultural impacts is used to
refer to changes to residents everyday experiences as well as to their
values, way of life, and intellectual and artistic products.
This section will describe the major sociocultural impacts of tourism.
Examples from a range of different places will be used to demonstrate
how tourism can be a positive and negative force in the lives of people
who live in, or near, a tourism destination. The section will also
examine the factors which influence these sociocultural impacts.
11.3.2 Major Sociocultural Impacts
Table 11.2 provides a summary of the most commonly described
positive and negative sociocultural impacts of tourism. The table also
links these impacts to specific factors associated with tourism such as
the use of culture as a tourist attraction and changes in social roles
which result from employment and economic opportunities provided by
tourism. As may be seen in the table, the same factor can be associated
with both positive and negative impacts.
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Chapter 11: Social and Cultural Aspects of Tourism
Changes in
people's lives
11.3.3 Cultural Change
Because culture can play an important role in attracting tourists to a
destination, tourism offers both economic incentives and social support
for the maintenance and revitalization of various cultural activities.
Tourism researchers have often provided anecdotal evidence of how
tourist interest in culture has resulted in a strengthening of artistic
traditions and traditional activities such as festivals and processions, and
in a stronger sense of identity for the resident population in some societies.
The production of traditional arts and activities for tourists, however, has
often resulted in changes in cultural products. For example, the demands
for large quantities of arts and crafts and for cheaper prices tend to lead
to mass production of goods of inferior quality or encourage importation
of poor copies of cultural goods represented as authentic. Changes can
also appear cultural such as festivals, ceremonies, and dances through
the addition of fees or charges, the use of timetables, and modifications
in the features of activities to make them more palatable to visitors. For
some people, such changes are seen as destroying the authenticity and
cultural meaning of the products or events. Tourist interest in cultural
activities can also result in invasions of residents privacy.
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The Sociocultural Impacts of Tourism
Source: Based on a review of the literature conducted by Pearce,
Moscardo and Ross (1996).
Factor Associated with Tourism Positive Impact Negative Impact
The use of culture as a tourist
attraction
Increased support for traditional
cultures and displays of ethnic
identity. Revitalization of
traditional arts, festivals and
language.
Changes to traditional activities
and arts to suit production for
tourists. Disruption and crowding
of traditional activities. Invasion
of privacy.
Direct contact between residents
and tourists
Breakdown of negative
stereotypes. Increased social
opportunities.
Enhancement of negative
stereotypes. Increased
commercialism. Introduction of
diseases. Demonstration effects.
Changes in jobs and economic
structure resulting in changes in
social roles.
New economic and social
opportunities which decrease
social inequity.
Community conflict and tension.
Increased social inequity.
Loss of language.
Development of tourist facilities
Increased recreational
opportunities.
Loss of access to places and
recreational activities.
Increased population from
tourists and associated
development
Support for medical, educational
and other facilities which
enhance quality of life.
Crowding and congestion.
Increased crime.
Table 11.2: Summary of Positive and Negative Sociocultural Impacts of Tourism
Strengthening
traditions
Changes in
cultural products
and festivals
The Alarde festival in Spains Fuenterrabia is a commonly used example
of how adopting a cultural activity to accommodate tourism can result
in a loss of value for the local community. The Alarde is a ritual
recreation of a seventeenth century battle which traditionally involved
many residents in both its preparation and its enactment, serving as an
opportunity for the community to celebrate its unity and history through
pageantry. As the Alarde became a popular tourist attraction, problems
with crowding began to occur. The solution proposed by the local
government was to hold the reenactment twice. In changing the event
from one held primarily for locals to one staged for monetary gain, a
major backlash ensued with many residents withdrawing their support
and refusing to participate (Greenwood, 1978).
International tourists and destination residents often have very
different cultural backgrounds, and it is not uncommon for residents to
develop negative stereotypes of tourists from their direct encounters.
Visitors sometimes break cultural taboos and engage in behavior which
is seen by residents as offensive. In Thailand, for example, the Western
practice of sunbathing on beaches is seen by Thai residents as both
unwise (because of the potential health risks) and immoral (because of
traditional taboos against body exposure). Such behavior sometimes
generates hostility which can be expressed in crime against tourists.
Negative stereotypes can arise even when visitors and hosts share a
similar cultural background.
Community Conflict
Not all social exchanges between tourists and visitors are negative.
Younger residents of tourist destinations sometimes express the belief that
tourism is a positive force in creating a less rigid society. This loosening
of traditional restrictions is often associated with a phenomenon called
the demonstration effect. For example, local, and usually younger,
residents who are exposed often to Western tourists are likely to emulate
their dress and habits. While this may seem to be a positive impact for
those residents who adopt the more relaxed standards, it can be seen as a
dangerous and negative trend to older or more traditional residents. Such
differences in perception can lead to conflict within communities.
Tourism can further contribute to community conflict indirectly
through the creation of new job and economic opportunities. Although
new economic and employment options are given by residents as a
major positive impact from tourism, such opportunities are not always
evenly spread across communities. For example, tourism typically
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Chapter 11: Social and Cultural Aspects of Tourism
Alarde festival
Negative
stereotypes
Differences in
perceptions
Creation of jobs
and opportunities
provides a large number of jobs for women in resort communities.
While this work does provide women with improved financial and
social prospects especially in developing areas, increased family
tensions can occur as women struggle to maintain both their traditional
roles and new jobs, and as men suffer from decreased self-esteem
associated with a reduced role in maintaining and managing families.
These types of situations have been studied in such places as Austria,
Hawaii, Cyprus, Fiji, Panama, and Crete. It is important to note that
such tensions are not always permanent and can be resolved.
11.3.4 Other Impacts
Other sociocultural impacts of tourism, both positive and negative, include:
Competition for tourist business.
Increased economic inequity, where the people who are best placed
to take advantage of tourism opportunities are those who already
possess the capacity to invest in this industry.
Renewed interest in and opportunities for revival in the use of local
languages.
The adoption by local residents of other languages to ease
communication with visitors.
The development of facilities for tourists such as sporting
complexes, restaurants, and entertainment, as well as increased
support for medical, educational and other services.
Increased income and an improved quality of life for host communities.
Increases in population leading to problems with crowding,
congestion and crime.
Pressure to provide facilities for tourists leading to reduced
opportunities for local residents.
11.3.5 Factors Influencing the Sociocultural
Impacts of Tourism
Tourism can have both positive and negative impacts on the same
social and cultural elements. In some instances an impact may be
viewed or interpreted differently by different community members.
One reason for this is that many sociocultural impacts are perceived
impacts. The contribution of tourism to crowding, for example, may be
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The Sociocultural Impacts of Tourism
Working
women
Perceived
impacts
seen as intolerable or nothing unusual to an Asian accustomed to
crowding as a fact of life. Improvements to quality of life and changes
to culture require value judgments, which depend very much on
individual perceptions. Two sets of factors influence tourisms social
and cultural impact; one refers to factors which influence how
individuals perceive tourism, while the other includes factors which are
related to the size and nature of tourism development.
11.3.6 Factors Related to Individual
Perceptions of Tourism
The following list summarizes basic patterns of relationships among the
various factors that influence host perceptions of tourism and its impacts:
In general, residents who are likely to benefit from tourism (either
because they or family members are employed in tourism or because
they believe tourisms benefits outweigh its costs to them
personally) are more likely to support tourism and report more
positive impacts from tourism.
People with greater involvement in and knowledge of tourism tend
to support the industry. People often consider community interests
when thinking about tourism and will support it even in cases where
they receive little personal benefit from the industry.
Host community perceptions of tourism are influenced by the social
or cultural role assigned to tourists. For example, in the Trobriand
Islands the only available category for tourists were soldiers
(sodiya); in the Seychelles, tourists are seen as tous riches which
translates as all wealthy; and in the West Indies tourism is associated
with servility and colonialism. The use of each of these roles
provides its community with a set of attitudes which may be used to
stereotype tourists.
Communities which have had little contact with outsiders have
greater difficulty dealing with tourism than those with a longer
history of dealing with other cultures.
Media portrayals of tourism can influence host perceptions by
providing information which is used in the social construction of
reality and which influences public opinion. The mass media can
influence peoples understandings of public affairs or issues by
providing individuals with knowledge about tourism, and by
presenting issues as conflict between different groups.
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Chapter 11: Social and Cultural Aspects of Tourism
In summary, it appears that several factors can influence residents
perceptions of tourism and its sociocultural impacts. If residents are well
informed about tourism, have a positive cultural role for visitors, have
more experience with crosscultural contacts, and believe that tourism
benefits themselves or their community, then they are likely to be
positive about tourism. Residents are also more likely to be supportive of
tourism if they feel they have some control over tourist developments.
These three factors of equitable returns from tourism, knowledge about
tourism, and control over tourism have been seen as important principles
for the planning and development of a sustainable tourism industry.
11.3.7 Factors Related to the Size and
Nature of Tourism Development
The economic, sociocultural and environmental effects of tourism can
also be viewed as outcomes related to sequential stages or the
magnitude of tourism development. For example, one development
model relating to tourism presents tourist areas as evolving through the
stages of exploration, involvement, development, consolidation,
stagnation, and then either decline or rejuvenation, with social impacts
emerging in the consolidation stage. Negative tourism impacts are not,
however, an inevitable consequence of growth. For example, visitation
levels to Shark Bay, Australia, famous for its dolphins, have grown
from 10,000 in 1984 to 150,000 in 1990, representing a change in
resident-to-visitor ratios from 1:10 to 1:150 in six years. The size and
rate of growth of tourism and the existence of serious environmental
impact problems would clearly place the destination in an advanced
stage of development. Yet residents are very positive about tourism and
strongly supportive of its continued growth (Dowling, 1993).
The apparent inconsistency in responses to tourism growth may be due
to the fact that impacts are related to the style of development as well
as, or instead of, the amount of development.
11.4 Strategies to Manage Sociocultural
Impacts of Torusim
Sustainable tourism refers not only to the economic viability of the
industry and the biophysical resources on which much tourism is based
but, further, applies to the sociocultural resource base. This section
outlines ideas and strategies for maintaining the sociocultural and
human resource components for ecologically sustainable development.
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Strategies to Manage Sociocultural Impacts of Torusim
Magnitude of
development
Development
style
Two key terms, culture shock and cultural arrogance, are important in
understanding the obstacles to sustainable sociocultural tourism.
11.4.1 Obstacles to Sociocultural
Understanding
Culture shock may be defined as the totality of reactions to new people
and settings which result in ineffective behaviors. Culture shock may be
experienced by either visitors or their hosts. Tourists, for example, may
be confused by the language, signs and symbolism of the visited culture
and unable to communicate clearly, resulting in frustration and
confusion. Local people may also confront new behaviors and react
when tourists break local cultural rules. While some rule breaking by
visitors is unintentional and therefore likely to be forgiven by the hosts,
if there is continued flaunting of local sensitivities, locals will see this
as a display of cultural arrogance. Cultural arrogance is defined as the
continued practice of following ones own cultural rules while
disregarding the feelings and perspectives of the host community. By
way of illustration, tourists who invade the privacy of others by
watching sacred ceremonies and taking photographs when requested
not to do so are displaying cultural arrogance. Similarly, tourist
behaviors which break known moral, religious or social codes such as
wearing too little clothing or indulging in publicly intimate sexual
behavior are examples of continuing arrogance on the part of the
visitors. Cultural shock and cultural arrogance work against the
principles of sustainable tourism in the sociocultural sphere. If left
unresolved, negative sociocultural impacts can destroy local goodwill
and lead to instances of community backlash such as hostility, rudeness,
poor service, and organized anti-industry protests.
11.4.2 Strategies to Manage
Sociocultural Impacts
In attempting to limit culture shock and reduce cultural arrogance,
different strategies are required for the various players in the culture
contact situation, including visitors, tourism professionals, and the host
community at large. Key strategies for managing sociocultural
exchange include:
Pre-travel information. The need for tourists to prepare themselves
for culture contact may be analogous to visitors who seek to
undertake adventurous activities. No long distance cyclist or walker
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Chapter 11: Social and Cultural Aspects of Tourism
Confusion and
frustration
Disregarding host
community's
perspective
would think of undertaking such behavior without prior training and
the necessary equipment. It is equally appropriate for culturally
committed visitors, particularly those who seek high levels of
cultural immersion, to prepare themselves for travel to places where
the culture is known to be markedly different from ones own. Just
as Paris is not all of France, neither is a Parisian similar to French
natives outside of Paris. Commercial guide books, advice to
travelers, pamphlets and even structured training manuals such as
the culture assimilators used by aid workers and diplomats are all
appropriate information sources. The use of contemporary
technologies such as the World Wide Web, CD-roms and in-flight
videos can be seen as further mechanisms for empowering visitors
and encouraging sensitive cultural behaviors.
On-site interpretation. The provision of appealing and informative
interpretive strategies is a major element in any overall program for
reducing sociocultural impacts of tourism. Interpretation takes many
forms and may include signs, brochures, displays, visitor centers,
guided walks, cassette tapes and posters. The critical importance of
this strategy in the sociocultural sphere will be discussed in more
detail following this broad review of a range of strategies.
Societal marketing practices. The community acceptance of the
cultural images used in tourism promotion is an emerging issue in
responsible marketing. The voice of the host community can be heard
in tourism marketing by involving panels of local people or
community representatives to examine the images being portrayed of
the local culture or indigenous groups. Some tourism marketing
embellishes cultural products or differences and reinforces stereotypes
or images which are undesirable or taboo. Misleading cultural images
may result in visitor disappointment which ultimately amounts to poor
business practice as well as causing community offense.
Facility design. In some cases, the structure and layout of facilities
encourages inappropriate behavior. For example, places for visitors
to sit, walk, queue, get changed, and eat are all required to deal with
large numbers at sites such as beaches, cathedrals, and monuments.
Without adequate facilities for these activities, inappropriate actions
which amount to cultural desecration may inevitably be committed.
For several kinds of contact with indigenous groups, it has been
argued that neutral or buffer zones where both tourists and locals
can congregate on neutral ground prevents visitors from awkwardly
converging on the homes and private spaces of the local people.
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Strategies to Manage Sociocultural Impacts of Torusim
Cultural
preparation
Written
information
Examination of
cultural images
Tourist facilities
A range of culture contact opportunities. Because visitors are likely to
have varying interests in the culture of the visited community, it is
desirable, within the limits of profitability for the local tourism
businesses, for a range of culture contact opportunities to exist, so that
some visitors may have relatively brief involvement while others can
enjoy sustained contact. For example, in Australias Northern Territory
it is possible for visitors to experience Aboriginal culture by viewing a
staged performance in a brief evenings formal entertainment, or by
participating in a guided tour of Aboriginal island communities, or by
immersing themselves in a food and hunting experience with
Aboriginal landowners. This diversity of opportunity is more likely to
result in an appropriate match between visitor expectation and
experience, and thus reduce sociocultural impacts.
Evaluation skills. One of the difficulties of managing sociocultural
impacts lies in the monitoring and assessment of those impacts. A
clear imperative is for tourism professionals to develop research and
assessment skills so they can know what impacts are occurring and
then, using this baseline level, assess change and the impact of their
strategies over time. A tourism community attitudes survey may be
one appropriate baseline measure but studies of income distribution,
employment patterns and the success of cultural tourism businesses
would also be valuable components in a monitoring study.
Explanation of tourism issues. There have been structured
government-industry attempts to inform the public of tourism issues.
These efforts address a need for tourism-related information in most
communities which is at once more comprehensive and less
sensational than media reports. Tourism, unlike many other industries,
is particularly dependent on the use of community spaces and
community friendliness, so industry-government initiatives to explain
the value (both economic and socioenvironmental) are important.
Community involvement in tourism planning. This strategy involves an
extensive array of issues which are partly considered in Chapter 15. The
notion that communities need to be or should be involved in tourism
planning (and tourism management) is not universally accepted. In
some newly developing tourism destinations or in authoritarian
societies, the concept of community involvement in tourism planning is
not well established. In a number of Western countries, it is seen as a
pivotal issue in the future of tourism. There are many levels of
community involvement in tourism ranging from information
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Chapter 11: Social and Cultural Aspects of Tourism
Diversity of
opportunity
Assessment of
change and
impact
Public
information
Community
involvement
exchange, to negotiation, to protest. The resulting involvement of the
community in actual tourism may vary from manipulation,
consultation, partnerships, and in some cases ultimate citizen control.
Developing conflict resolution skills. The involvement of the
community in tourism planning, as noted above, varies from limited
to intensive. In many situations some conflict over development
issues is likely to occur. It is valuable for local community groups to
develop good negotiation and bargaining skills so that disputes for
sustainable sociocultural resource issues in tourism can be managed
rather than avoided or exaggerated.
11.5 The Relationship Between
Culture and Tourism
The impact of tourism on the host culture and society discussed in the
previous section represents one type of relationship between tourism and
culture. Culture and tourism interact at two other levels. First, the
cultural patterns of a society influence its citizens and their ability and
desire to travel. Such influence may be described as culture shaping
outbound travel motivation. Second, culture serves as an attraction in the
tourism system. Cultural activities, events, or products are the inspiration
for visitors and tourists to journey to the destination. This influence may
be described as culture shaping inbound travel motivation.
The term culture has a myriad of definitions. Rather than choosing one
definition it is possible to depict three themes or emphases in the many
definitional statements. These themes include:
Culture as a value system relating to intellectual, spiritual and
aesthetic development.
Culture as summarizing the whole way of life of a people.
Culture as the works or products of intellectual and artistic endeavors.
These three variants on the term culture are all useful in assessing the
three levels of the tourism-culture relationship. When culture as an
influence on outbound tourist motivation or the impacts of tourism is
considered, the first theme (value system) of the term is most useful.
On the other hand, when tourism as an influence on inbound tourism is
at issue, the second and third themes (way of life and cultural products)
are most relevant.
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The Relationship Between Culture and Tourism
Negotiation and
bargaining
11.5.1 Culture Shaping Outbound Tourism
An illustration of cultures impact on traveler behavior is found in the
history of South Korean travelers. In 1983 the South Korean government
allowed only Koreans aged 50 years or over to obtain a single-use
passport for travel purposes. This kind of political and governmental
restriction on outbound travel is not uncommon, particularly among
developing nations as well as in existing and former socialist regimes.
These kinds of travel restrictions were accompanied, in the South Korean
case, by a joint economic and sociocultural justification. While the South
Korean travel restrictions were progressively eased in the 1980s and
finally in 1987 all restrictions lifted, by late 1990 the Korean government
embarked on an anti-luxury and anti-consumption campaign as a
way of discouraging conspicuous consumption. According to the
government, frugality or austerity was a traditional cultural value of
Korean people and outbound tourists were advised to travel modestly so
that social harmony within the country would be maintained and images
of a nation divided into rich and poor effectively contained.
The South Korean example illustrates how national priorities, justified and
placed in the context of cultural behavior, create an agenda for travelers and
may effectively shape individual motives on how to and where to travel.
Other powerful cultural influences shaping outbound travel motivation
include travel for religious purposes, such as the culturally sanctioned and
approved pilgrimages to Mecca and the desire to travel to countries where
there are long-established cultural ties (refer to Chapter 7).
As well as having an impact on outbound travel motivation,
particularly in terms of where and how to travel, cultural factors will
influence the particular activities in which travelers participate as well
as in how much such activities are valued. Golf, for example, is a
leisure activity highly valued by wealthy Japanese and Korean travelers
as it is an extremely expensive and high status sport in their home
culture. By way of contrast, golf for Australians is an enjoyable but not
particularly high status activity and the ready availability of golf
courses in Australia means there is little international outbound
tourism built on the sport. Other examples of the ways in which culture
and nationality influence tourists include:
Arab tourists, as contrasted to Europeans, are markedly less active
yet more socially gregarious in their vacation behavior due to the
concept of raha, which can be defined as absolute relaxation.
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Chapter 11: Social and Cultural Aspects of Tourism
South Korean
example
Tourist's activities
and their values
Food service is a more important factor in choosing a vacation for
Japanese or Chinese as opposed to Canadian or American tourists.
Cultural differences generate a strong preference for their own
cuisine among Chinese, French, Japanese, and Italian tourists while
North Americans are more willing to experiment with the food of
the visited culture.
Tour guides perceive various nationalities as having different
behaviors. In particular, when asked to assess the characteristics of
Chinese, French, Italian, American, and Japanese tourists the greatest
differences were noted with the behaviors of interacting and
socializing with other tourists and taking photographs. In particular
the Chinese, Japanese and French tourists were seen as less gregarious
towards other cultural groups than the Italians and Americans.
Japanese travelers were thought to travel in groups while the French
were thought to be more individually oriented in their vacation
behavior, preferring to travel alone and to mix less both with their
own nationals and other cultures.
11.5.2 Culture Shaping Inbound Tourism
The concept of culture as an attraction in the tourism system builds on
the second and third themes identified in the definition of culture,
effectively a consideration of culture as the whole way of life of a
people and culture as the works or products of intellectual and artistic
activity. When culture is seen as the motivating force shaping tourism,
the term cultural tourism is increasingly used and can be defined as:
the movement of persons to cultural attractions away from their normal
place of residence with the intention to gather new information and
experience to satisfy their cultural needs (Richards, 1996, p. 24).
Increasingly, tourism experiences are no longer closely linked to well
defined social scales of value and prestige. All places and items of cultural
import are potentially rewarding topics and factors for consumption as
people seek to learn about themselves and the host community.
Accordingly, the culture of a society is not simply its art and architecture
but extends to its everyday life, from shopping malls to sporting events.
There are abundant examples of the power of cultural icons or major
symbols in attracting tourists. The British Tourist Authority estimates that
nearly 7 million people visit the British Museum while the Tower of
London, the United Kingdoms most visited historic property, receives 2.3
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The Relationship Between Culture and Tourism
Popular culture
million visits. Even these substantial figures seem limited when compared
with Europes most visited cultural attraction, Frances Pompidou Centre,
with over 8 million visitors annually. At the broad and popular culture
level, Disney World Florida with over 12 million visitors annually is
arguably the greatest cultural icon in the modern tourism world.
A transnational European study on cultural tourism found that
museums (59 percent) and historic monuments (56 percent) were the
two most popular categories of cultural tourism attractions, while
heritage centers (37 percent), art galleries (24 percent) and the
performing arts (22 percent) received moderate levels of interest. The
study also found that there are two categories of cultural tourists:
specific and general. Specific cultural tourists travel specifically to
visit the cultural attraction, rating it as important or very important in
their overall choice of the destination, while general cultural tourists
have a more incidental or passing interest in cultural attractions. Based
on this study, cultural tourism is growing at about or slightly less than
the overall rate of tourism growth.
Urban Tourism
It was noted earlier that culture as a motivator for tourist behavior and
as a force shaping inbound tourism is also concerned with the ways of
life of a community and society. Two components of this broader and
usually more popular view of culture include urban tourism and
ethnic tourism. Urban tourism focuses on the mix of attractions which
motivate travel to major population centers and while specific cultural
icons are a part of this mix, qualities such as atmosphere, layout, and
the friendliness of local residents are equally important cultural
features of destination image.
New York City can be seen as an example of urban tourism. Its cultural
tourism base includes an extensive number and diversity of restaurants,
museums, theaters, concert halls, visual arts, ethnic neighborhoods, and
historic sites. In 1990 it was estimated that 25 million visitors, including
day trippers, came to the city, of which 5.6 million were international
visitors. The latter figure represents 14.4 percent or one seventh of all
international visitors to the nation. The competitiveness of urban
tourism destinations is reflected by the promotional efforts among cities
for special events, festivals, and meetings and conventions. Culture and
history are being employed as tourist attractions, but there is concern
regarding the ways in which these reinterpretations of the past might
distort or suppress community and visitor understanding.
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Chapter 11: Social and Cultural Aspects of Tourism
Cultural icons
Specific and
general cultural
tourists
New York
Ethnic Tourism
Ethnic tourism, a second basic component of cultural importance,
refers to tourism focused on a groups traditions and lifestyle and is
used principally to highlight tourism in developing communities or
specialized enclaves. Ethnic tourism is sometimes described as
motivated by tourists desires to see the other (van den Berghe,
1993). This motivation is consistent with the need to learn and to
satisfy curiosity motives as depicted in the more generic definition of
cultural tourism. Additionally, ethnic tourism may embrace motives of
social comparison or even the development of relationships as people
seek to understand their own lives in the context of how other groups
and individuals organize human existence.
Ethnic tourism may take the form of viewing local festivals, of attending
special ceremonies such as fire-walking, burials, weddings or initiations or
more simply watching local activities such as fishing or handicraft
manufacture. At times ethnic tourism may include eating with local
families, touring villages, farms stays or traveling with community
members on special walks or treks. The high level of contact between locals
and visitors in ethnic tourism may produce a range of positive and negative
sociocultural impacts which will be described in the following section.
11.6 Interpretation for Sustainable Tourism
According to the Society for Interpreting Britains Heritage,
interpretation is the process of explaining to people the significance of
the place or object they have come to see, so that they enjoy their visit
more, understand their heritage and environment better, and develop a
more caring attitude towards conservation.
At its simplest, interpretation can be seen as any activity which seeks to
give tourists information about the place they are visiting. Interpretation
is most commonly used to refer to things such as guided walks, signs and
displays in museums, art galleries, zoos, historic buildings and national
parks, and guide books or information sheets or leaflets.
Interpretation can contribute to sustainable development by improving
the quality of the experience for the visitor, by changing visitor
behavior to avoid negative sociocultural and environmental impacts
and by alleviating congestion, in the following ways:
Educating tourists about the nature of the host region and culture
and informing them of the consequences of their behavior, thus
encouraging them to behave in an appropriate manner.
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Interpretation for Sustainable Tourism
Developing
communities'
traditions and
lifestyles
Contribution of
tourist
information
Enhancing the quality of visitor experiences by adding value to
tourism products.
Developing tourist support for both cultural and environmental
conservation.
Relieving pressure on sites by controlling access, by distributing
visitors more evenly throughout an area, by encouraging them to
visit less crowded places and by providing them with alternative
experiences which can act as substitutes for visiting sensitive areas.
11.6.1 Principles for Enhancing
the Effectiveness of Interpretation
If interpretation is to make a contribution to sustainable tourism it must
be effective. It is valuable, therefore, to consider the following
principles for enhancing interpretive effectiveness:
Interpreters must make a personal link with the visitor. The
interpretation must be relevant or important to them. Providing
direct contact or experience can be useful in establishing such a link.
Credible and empathetic communicators can also create a personal
connection to the visitor.
Interpreters should present a whole rather than a part. The use of stories
or themes can assist in providing visitors with a complete picture. To
develop a sense of place interpreters should present information on the
physical setting, associated activities and significance of a place.
Interpreters must provide variety in interpretive experiences. Variety
can include the use of different media, varied levels of required
physical activity and the use of multisensory techniques.
A basic principle is that any interpretation that does not somehow
relate what is being displayed or described to something within the
personality or experience of the visitor will be sterile (Tilden, 1977,
p. 9). In short, the interpretation of what is being shown must fit with
the visitors own frame of references. An example of how interpretation
can make connections to experiences familiar to the visitors is
demonstrated in the following exhibit label in a Texas museum:
Prehistoric mammoths were here in Texas just a few thousand years
ago. They roamed the plains in great herds . . . The chances are that they
browsed right where you are standing now. Where you are standing
now. With that statement the mammoths are not far away creatures of
time or space but right under your feet (Tilden, 1977, pp. 13-14).
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Chapter 11: Social and Cultural Aspects of Tourism
Connections with
the familiar
Anecdotes, analogies and metaphors are also methods for making
personal connections. Allowing visitors to interact by asking questions,
by touching and using all their senses and by being able to pursue their
own interests can also personalize an interpretive event.
Presenting a whole story, rather than a series of isolated pieces of
information, is the second principle for effective interpretation.
Storytelling is a traditional method of teaching in many cultures and there
is clear evidence to support the value of a story in the education of visitors.
Providing variety in experiences is also a valuable principle in
interpretation. Interpretive experiences can be varied along a number
of dimensions including the degree of physical activity required (for
example, listening to a storyteller vs. participating in a dance); the
number of visitors involved in an activity (for example, sitting alone in
a prison cell, as compared to being part of a large theater audience); the
amount of technology involved in the interpretation (for example,
writing your own experience of a building on a piece of paper for a
visitor experience notice board vs. using an interactive computer to
design buildings); the number of senses used (touching and smelling as
well as looking); and the interpretive media used (signs, displays,
audiovisuals and computers).
Education fulfills a crucial role in sustainable tourism development.
Interpretation has a major role to play in educating local populations,
tourism staff and tourists, and thus is a central component of any new
approach to creating sustainable tourism.
SUMMARY
At the start of this chapter it was observed that tourists have not always
been welcomed by their host communities. In reviewing the meaning
and value of culture for tourism, in assessing the sociocultural impacts
of tourism, and in reviewing strategies for managing sociocultural
impacts (including interpretation), a strong positive message for the
tourism-host community relationship emerges. Tourism does not
inevitably cause guest-host conflict. With planning, information
provision, and superior management, tourism can be a positive force
for the preservation and revitalization of cultures. Many of the
strategies and tactics recommended for tourists, hosts, and tourism
planners to work towards sustainable tourism depend on developing
effective communication pathways. Tourists need information to
behave in sensitive and appropriate ways, they need a sound knowledge
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Summary
Storytelling
Variety of
experiences
Education
of host societies to select their travel wisely, and they need on-site
communication to enhance their experiences. Hosts need information
and can benefit from improving educational and communication
technologies. Host communities need to understand tourism as a
phenomenon, its benefits and costs, and learn from other societies how
to ameliorate negative impacts. Tourism operators need to present their
products so that quality experiences are both promised and offered,
resulting in profitability through repeat visits and personal marketing.
As the newer communication technologies become more widely
available and as groups learn to use existing communication means
more effectively, there is a strong promise that tourists and their hosts
may interact harmoniously.
DISCUSSION QUESTIONS
1. Is tourism changing cultures or merely exploiting them? Discuss
with reference to the impacts of tourism in both developed and
developing nations.
2. If culture is defined as the whole way of life of a group, what
popular or general cultural factors might be used more to attract
visitors to Western cities?
3. Explain how a skilled guide using good interpretive practices could
provide a quality tourism experience of an ethnic community in a
rural setting.
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Chapter 12
Sustainable Tourism and the Environment
Learning objectives
To understand the importance of the physical environment as a tourist
attraction.
To understand the importance of environmental quality for the success of
tourism.
To be able to list the different positive and negative environmental impacts
of tourism.
To understand the factors that contribute to environmental impacts.
To be able to describe strategies that tourism planners and managers
can use to alleviate negative environmental impacts.
To be able to describe the major elements of sustainable tourism.
Key terms and concepts
carrying capacity
human-environment interaction categories
LAC model
site hardening
sustainable development
visitor management systems
zoning
12.1 Introduction
The concept of sustainability arose from the recognition that the earths
limited resources could not indefinitely support the population and
industrial growth associated with existing approaches to development,
and that existing development approaches were not working to reduce
poverty or to increase standards of living across all countries.
In Chapter 11 the principles and characteristics of sustainable tourism
were described and the relationship between tourism and sociocultural
resources was explored. This chapter will focus on the physical
environment and its relationship to tourism. The role that the physical
environment plays in tourism will be reviewed and the impacts that
tourism can have on the physical environment will be described.
Strategies and practices to effectively manage the tourism-environment
relationship will be discussed, using examples of successful approaches
to ensure that tourism is sustainable. Three case studies from various
parts of the world will be used to demonstrate the importance of the
physical environment for tourism to the area and as examples of the
ways in which tourism can impact physical environments and the
techniques available to manage these impacts. Finally, alternative
approaches to tourism will be explored and evaluated.
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12
Sustainable Tourism
and the Environment
Recognizing the
earth's limited
resources
Physical
environmental
focus
12.2 Sustainable Development
In recent years, sustainable development has been put forward as a new
approach to the way communities think about standards of living,
social equity, and the maintenance of resources. The three main
principles of sustainability are:
Ecological sustainability ensures that development is compatible
with the maintenance of essential ecological processes, biological
diversity and biological resources.
Social and cultural sustainability ensures that development
increases peoples control over their lives, is compatible with the
culture and values of people affected by it, and maintains and
strengthens community identity.
Economic sustainability ensures that development is economically
efficient and that resources are managed so that they can support
future generations (McIntyre, 1993, p. 10).
In its early history the focus of sustainable development was on
manufacturing and extractive industries, which were seen as major
sources of pollution. More recently, tourism has been targeted for
consideration due to concerns about its negative consequences for
communities and environments. Table 12.1 reviews the goals and
characteristics of sustainable tourism.
12.3 The Physical Environment.
A Core Component of Tourism
In tourism it is usual to distinguish between the physical environment
(the land, air, water, vegetation, wildlife and the creations of people)
and the sociocultural environment (the people and the social,
economic, cultural and political forces that influence their lives). The
physical environment is an important tourism resource, and since the
time of the ancient Romans and Greeks travelers have been motivated
by a desire to experience various aspects of the physical environment.
Historical examples include holidays at Mediterranean coastal centers
and visits to natural attractions and sites of historical and architectural
interest, the observation of scenery and the experience of architecture
and historic sites during the Grand Tours of the Renaissance, and with
the Industrial Revolution and the beginning of modern tourism, visits
to seaside and natural environments for restoration and recuperation.
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The principles of
sustainability
Historical
environmental
tourism
255
The Physical Environment. A Core Component of Tourism
Tourist products and the experiences sought by visitors differ widely in
terms of how they are influenced by the physical environment. In
understanding the role of the physical environment in tourism, it is
useful to classify human-environment interaction into three categories:
In the first, the environment serves merely as a setting for an activity
and is not directly relevant to the activity. Although not the central
GOALS
To improve the quality of life of host communities
To preserve intergenerational and intragenerational equity
To protect the quality of the environment by maintaining biological diversity and
ecological systems
To ensure the cultural integrity and social cohesion of communities
To provide a high quality experience for visitors
CHARACTERISTICS
Tourism which is concerned with the quality of experiences
Tourism which has social equity and community involvement and is mindful of
residents' needs
Tourism which employs locals and has local participation in planning and
decision making
Tourism which operates within the limits of the resource - this includes
minimization of impacts and use of energy and the use of effective waste
management and recycling techniques
Tourism which maintains the full range of recreational, educational and cultural
opportunities within and across generations
Tourism which is based upon activities or designs which reflect and respect the
character of a region
Tourism which allows the guest to gain an understanding of the region visited
and which encourages guests to be concerned about, and protective of, the host
community and environment
Tourism which does not compromise the capacity of other industries or activities
to be sustainable
Tourism which is integrated into local, regional and national plans.
Table 12.1: Goals and Characteristics of Sustainable Tourism
Source: Derived from ESD Working Group (1991), Conlin and Baum (1994)
and Owen, Witt and Gammon (1993).
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Chapter 12: Sustainable Tourism and the Environment
focus of the activity, the physical environment can influence the
activity. For example, although the physical setting of casinos is not of
much importance to the activity of gambling, the design of casinos is,
by centering on features which will encourage patrons to stay and to
gamble. Further, even though the physical environment may not be the
focus of the tourists attention, the tourist exerts an influence on the
environment through his use of resources and the creation of waste.
The second category is where the qualities of the environment exert
a general effect on the activity. Activities such as shopping, relaxing,
playing tennis or golf, or dining, could take place in a number of
locations, but are particularly enjoyable in the presence of a pleasant
and/or exotic backdrop. Likewise, the environmental quality of a
destination is critical to its success and destinations which are
perceived to be polluted or congested will find it difficult to
maintain tourism. Declines in European tourism after the Chernobyl
nuclear accident and in Alaskan visitor numbers after the Exxon
Valdez oil spill are examples of this phenomenon (Fridgen, 1991).
In the third type of interaction the physical environment is the focus
of the activity. A substantial proportion of tourism falls into this
category. Many tourists specifically travel to experience natural
environments and heritage areas and to engage in activities such as
walking, viewing wildlife, and touring scenic areas.
12.4 The Impacts of Tourism
on the Physical Environment
12.4.1 Negative Impacts
The negative environmental impacts of tourism have been studied
extensively. Table 12.2 indicates tourisms potential environmental
impacts on protected areas.
Environmental Damage
The most obvious negative environmental impacts have been those
associated with loss of, or damage to, physical environments. The
Mediterranean has often been used as an example of how excessive and
intensive hotel development can destroy the natural environment, crowd
out beach views and result in the loss of historic sites. According to the
United Nations Environment Program nearly three-quarters of the sand
dunes on the Mediterranean coast between Gibraltar and Sicily have
Environment
as setting
Environment as
pleasant backdrop
Environment
as focus
Example of the
Mediterranean
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The Impacts of Tourism on the Physical Environment
Table 12.2: Potential Environmental Effects of Tourism in Protected Areas:
The Types of Negative Visitor Impacts That Must be Controlled
Source: World Tourism Organization and United Nations Environment Program,
Guidelines: Development of National Parks and Protected Areas for Tourism (Madrid:
WTO/UNEP, 1992), p. 14, as adapted from Thorsell, J.W., Protected Areas in East Africa:
A Training Manual (Tanzania: College of African Wildlife Management, 1984).
Factor Involved Impact on Natural Quality Comment
Overcrowding
Environmental stress, animals show
changes in behavior
Irritation, reduction in quality, need for
capacity limits or better regulation
Overdevelopment
Development of rural slums, excessive
manmade structures
Unsightly urban-
like development
Recreation:
Powerboats
Fishing
Foot safaris
Disturbance of wildlife
None
Disturbance of wildlife
Vulnerability during nesting seasons,
noise pollution
Competition with natural predators
Overuse and trail erosion
Pollution:
Noise (radios, etc.)
Litter
Vandalism destruction
Disturbance of natural sounds
Impairment of natural scene,
habituation of wildlife to garbage
Mutilation and facility damage
Irritation to wildlife and other visitors
Aesthetic and health hazard
Removal of natural features
Feeding of wildlife Behavioral changesdanger to tourists Removal of habituated animals
Vehicles:
Speeding
Off-road driving
Wildlife mortality
Soil and vegetation damage
Ecological changes, dust
Disturbance to wildlife
Miscellaneous:
Souvenir collection
Firewood
Roads and excavations
Artificial water holes and salt provision
Introduction of exotic plants and
animals
Removal of natural attractions,
disruptions of natural processes
Small wildlife mortality and
habitat destruction
Habitat loss, drainage
Unnatural wildlife concentrations,
vegetation damage
Competition with wild species
Shells, coral, horns, trophies, rare
plants
Interference with natural energy flow
Aesthetic impacts
Replacement of soil required
Public confusion
disappeared either as a result of having resorts built on them or through
erosion resulting from land clearing for development (United Nations
Environment Programme, 1992). In Kenya the demand for tourist
resorts and hotels has resulted in the clearing of mangroves for building
materials. The development of tourist facilities has also caused damage
to coral reefs which have been blasted to provide further construction
material (Visser & Njuguna, 1992). Many places which become sites
for tourist buildings are the homes of threatened or endangered species.
Pollution
Pollution is another major negative impact of tourism. Transportation is
a major source of both air and noise pollution. It has been estimated that
approximately 2 million tons of aviation fuel are burned each year
producing 550 million tons of greenhouse gases and 3.5 million tons of
the chemicals responsible for acid rain (UNEP, 1992). Water pollution
Problems
in Kenya
Different types
of pollution
from sewage and the use of pesticides, herbicides and fertilizers in resort
landscaping are also major problems for many tourist destinations. For
example, in the Caribbean untreated sewage results in ocean recreational
areas with high bacterial levels. Tourist waste can also cause problems
with overloaded waste disposal systems and litter, such as in Englands
New Forest where thousands of empty bottles are collected each year.
Many of these negative impacts are interrelated and result from the
cumulative and long term impacts of tourist development, as can be seen
in the experience of a ski resort in New Mexico, in the United States,
where poor sewage treatment resulted in water pollution that changed the
insect and fish populations throughout the area and reduced the flow of
water to humans and wildlife that lived in the area. Tropical islands that
are prime tourist destinations and possess fragile environments are
particularly vulnerable to a range of negative environmental impacts
from tourism, such as those that have affected the Maldives including
beach erosion resulting from the construction of resorts, anchor and
trampling damage to coral reefs, and depletion of coral, shell and marine
animal stocks from collecting for tourist souvenirs.
The pressure of increased numbers of people (living even temporarily
in an area) on water, food and energy resources can be severe. It has
been estimated that the average daily water consumption of tourists,
including the water needs of golf courses, hotel gardens and swimming
pools, is ten times the level seen as necessary for survival. Lobster and
other marine animal populations are under threat in areas of the
Caribbean because of the demand for seafood for tourists. In the
Himalayas serious erosion has been the consequence of extensive tree
felling to provide fuel for tourist camps and many species suffer from
exploitation for use as tourist souvenirs.
Tourist Activities
Many tourist activities such as boating, diving, walking and skiing can
have negative impacts on the physical environment. The pressure of
numbers can result in the erosion of paths and the wearing away of
historic buildings. Anchor damage to marine environments can be
extensive and long lasting. The feeding of wildlife by tourists can lead
to declining animal health and aggressive behavior which in turn can
threaten tourists and residents. Visitors can also introduce non-native
species which disrupt existing ecosystems. The mere presence of
visitors can be harmful in sensitive environments. The tomb of
Tutankhamen in Egypt has suffered severe damage from fungal growth
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Chapter 12: Sustainable Tourism and the Environment
Destination
vulnerability
Effects of
tourist density
Damage caused
by activities
which results from the moisture, dust and bacteria brought into the
tomb by its 5,000 daily visitors. As in many tourism situations the
damage is unintentional and not directly a result of the actions of any
single individual tourist.
12.4.2 Positive Impacts
Tourism can also work towards the restoration, conservation and
protection of physical environments. Tourism can provide the
incentives and the income necessary to restore and rejuvenate historic
buildings and precincts and to create and maintain national parks and
other conservation areas. The non-consumptive use of wildlife for
tourism can replace other more threatening practices. In Canada, for
example, a New Brunswick tourism group takes tourists to view and
photograph the Labrador harp seals once slaughtered for their coats.
Tourism can also be a force for the development of better infrastructure
which can in turn improve environmental quality. The construction of
waste water treatment plants in Cyprus provides an example where
pressure and revenue from tourism has resulted in reduced water
pollution and the provision of water for agriculture. Tourisms positive
environmental impacts are summarized below:
Development of tourist attractions. Conservation, restoration and
protection of natural and built heritage can result from the perceived
need to develop attractions for tourists and from the revenue
provided by tourism.
Development of infrastructure. Improvements to roads, water supply
and treatment and waste management systems can result from
increased revenue from tourism. Such improvements may decrease
pollution and improve environmental quality.
12.4.3 Factors Which Influence Tourism Impacts
There are several factors which influence whether or not tourism will
result in negative environmental impacts and the severity of the impacts.
The amount or volume of tourism (the number of actual tourists and
the extent of development put in place to support tourism) and the
concentration of tourism use, both at particular sites and at
particular times. The more visitors who walk along a trail or through
a church the more erosion that will occur, and the more visitors who
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The Impacts of Tourism on the Physical Environment
Conservation
and protection
Infrastructure
stay in a place the more waste there will be to manage. Developing
ways to measure volume-related impacts presents difficult issues,
however. Impacts usually depend on when and where the tourism is
concentrated (the second factor). For example, a major disturbance
to colonies of herons in New Jersey was only detected when visitors
approached the bird colonies after hatching and/or when visitors
actually walked through the colonies, whereas viewing from a
distance and/or at other times in the breeding cycle had no
discernible impacts on the herons.
The type of use or tourist activity that takes place at a destination.
The example above of research into tourists and their effects on bird
colonies also found that the type of tourist activity was directly
related to impacts. Clearly, viewing a colony from a distance will
have fewer harmful impacts than walking through a nesting site.
Other variations in tourist behavior are less obvious. For example,
people moving through an area at a constant speed or pace will often
disturb the birds less than if people stop or slow their pace, because
the birds attention is more readily drawn to changes in movement.
The type of environment being impacted. Environments differ in
terms of their sensitivity and fragility. Antarctica, for example, is an
especially fragile environment because of its harsh climate and
isolation. Coral atolls are more fragile than continental islands as
they are more easily eroded and exposed to the elements. Venice is
more sensitive to tourist pressures than other European historic
cities because its restrictions on pedestrian traffic results in
waterways that are of necessity heavily used.
The management and planning of tourism. The environmental
impacts of tourism are closely related to the types of planning and
management associated with tourism. Many of the negative impacts
of tourism have occurred in areas where there has been little control
and either poor or no management of tourism development.
12.5 Strategies for Managing Impacts
Because many of tourisms negative environmental impacts have
occurred in places with little or no planning or management,
sustainable tourism development employs planning and management
strategies to alleviate negative tourism effects and encourage positive
impacts. Table 12.3 provides an overview of these strategies.
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Chapter 12: Sustainable Tourism and the Environment
Volume
Activities
Different sites
Planning
12.5.1 Planning Strategies
The development of local, regional, and national plans which
incorporate or focus on tourism is a first and major step towards
sustainable development. With regard to environmental impacts, such
plans should consider the following questions or issues:
Carrying Capacity
What sites or areas are most suitable for tourist development?
How many visitors should there be in any place?
What sorts of tourist activity or development are suitable?
What infrastructure is necessary for tourism?
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Strategies for Managing Impacts
Policy/Planning Development plans which include tourism and which set out zones or
sites for tourist use, determine rights of access to areas, and consider
what sort of activities are suitable for the area.
Develop and enforce regulations to control aspects of development and
tourist activity.
Require environmental impact assessments and monitoring for tourist
developments.
Use economic mechanisms such as subsidies to encourage more
sustainable practices and user pays to control use and provide income
for conservation and rehabilitation of the environment.
Development/
Construction
Consider choice of sites and site design carefully to ensure minimal
impact.
Use minimal impact construction techniques.
Use native species for landscaping and appropriate architectural styles.
Management of
Resources
Conduct environmental audits.
Develop and use recycling, waste minimization and energy efficiency
programs.
Use environmentally friendly products and technologies.
Management of
Visitors
Design systems which control visitor flows.
Use interpretation/education to encourage sustainable behavior.
Adapting the
Environment
Harden sites for protection.
Provide facilities which influence visitor activities.
Marketing and
Promotion
Consider tourism concepts and products better suited to the environment.
Provide accurate information in advertising to ensure that visitors have
appropriate expectations.
Education Use effective interpretation services to encourage visitors to engage in
more sustainable behaviors.
Provide environmental education for tourism personnel.
Develop codes of conduct for tourist, staff, operators and other tourism
sectors.
Research and
Monitoring
Support research which seeks to improve understanding of the
tourism-environment relationship.
Evaluate the effectiveness of any programs and activities conducted.
Monitor environmental quality.
of Facilities
Table 12.3: An Overview of Major Strategies for Managing Tourism Impacts
Setting a
numeral limit
Are there resource limitations which are relevant to tourism
development?
What mechanisms are needed to control tourist operators and tourists?
The first three questions are all concerned with limits to tourism or a
concept referred to as carrying capacity. Carrying capacity can be
defined as the maximum use of any site without causing negative effects
on the resources, reducing visitor satisfaction, or adverse impact upon the
society, economy and culture of the area (McIntyre, 1993, p. 23). There
are three major components involved in carrying capacity:
Ecological/biophysical constraints, or how many people can visit an
area before the water and air become polluted, erosion begins to
occur and wildlife is disturbed.
Sociocultural constraints, or the number of visitors that are
acceptable to the local residents.
Psychological/perceptual constraints, the number of people that can
visit an area without feeling crowded or concerned about their impacts.
Limits to Acceptable Change (LAC)
It is difficult to determine carrying capacity in terms of the number of
visitors that a site can accommodate before there are negative impacts.
As noted earlier negative impacts are not caused by numbers alone, but
by the result of interaction between numbers of visitors, what they do,
when they visit, and the type of management systems which are in place.
An alternative to the concept of carrying capacity is the Limits to
Acceptable Change or LAC model. The LAC model moves the
planning focus away from attempts to set a numerical limit on tourism
and towards describing a set of environmental conditions which are
seen to be desirable. The process involves using local residents
perspectives and scientific knowledge to design a set of environmental
conditions which are appropriate for a place. Planners and managers
can then consider any tourism activities or developments in terms of
their impact on the conditions which have been chosen. For example, it
may be possible to minimize the impacts of large numbers of visitors to
a rain forest site by putting in place steps and boardwalks. In the LAC
approach this would be an acceptable level of tourism use if residents
and managers agreed that this management action was appropriate. If,
however, residents and managers wished to preserve the area for
wilderness experiences where little evidence of humans existed, then
hardening the site would be seen as an unacceptable change.
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Chapter 12: Sustainable Tourism and the Environment
Desirable
conditions
Zoning
The decisions about the type and quantity of tourism which result from a
process like that described in the LAC model are often incorporated into
plans through the identification of zones. Zoning refers to a process
where planners connect types of development or activity to specific areas.
Table 12.4 provides an example of zones proposed to manage visitors to
the Galapagos National Park. Zoning approaches usually include several
zones that range from those with no access or very limited access for
visitors (the Pristine/scientific zone in Table 12.4) to those where tourist
facilities are allowed (the Intensive/recreational zone). A common feature
of zoning plans is the clustering of tourist developments into particular
areas where impacts can be dealt with more easily.
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Strategies for Managing Impacts
1. Pristine/scientific zone
For areas which are remote, uninhabited and which have relatively
undisturbed ecosystems. Visits would be very limited and only allowed with
a permit (required in advance) and with a specially trained guide.
2. Semiprimitive zone
For relatively remote areas where nonmotorized transport is required. There
are limits to visitor numbers and entry requires a permit and a guide.
3. Extensive/natural zone
For sites of natural and cultural interest where group sizes are limited but
no permit or guide is required.
4. Intensive/natural zone
For major sites of natural and cultural interest where moderate levels of use
are permitted.
5. Intensive/recreational zone
For areas near established communities where tourist facilities and
structures can be built. This zone allows for large concentrations of visitors.
6. Rural zone
For areas adjacent to the park where privately run tourist activities could be
developed.
Source: Based on Wallace 1993.
Table 12.4: Zones for Tourism Management:
An Example of Zones Prepared for the Galapagos National Park
Developing
specified areas
Permits and Licenses
There are several other planning and policy mechanisms which are
often associated with zoning. These include having permit or license
systems, charges or fees, and environmental quality standards. Permit
systems require tourist operators or tourists to apply for permits to
conduct certain activities within an area. Often the application process
requires evidence that the proposed activity will not have negative
environmental impacts and in many instances there are limits to the
number of permits which can be issued. These permits can take the
form of contractual obligations, with the operator or tourist agreeing to
many conditions in order to be issued with a permit. A tour operator,
for example, may be required to have a permit to take visitors to a site
in a national park. Such a permit will usually specify the maximum
number of visitors the operator may take to the site, the type of vehicle
to be used, the activities that are allowed and the actual physical areas
that may be accessed. Permits can sometimes come with a fee and such
revenue can be set aside for the provision of facilities for tourist use as
well as for conservation, restoration and maintenance programs. Such
programs can also be funded by other charges such as bed or guest
taxes and entry charges.
Environmental Standards
Plans can also include sets of environmental quality standards which
are supported by regulations or legislation to control various aspects of
tourism. These standards can include maximum heights for buildings,
restrictions on the use of construction materials and controls over
architectural style and placement of buildings. In the Republic of
Mauritius, for example, development of a resort in a coastal area is
allowed only if it complies with requirements which include:
A restriction on resort size to a maximum of 200 rooms.
A restriction on the maximum height of buildings to 12 meters.
A requirement that hotels with over 75 rooms must install water and
sewage treatment plants.
A recommendation that regional architectural styles be incorporated
in the design of facilities.
A requirement that facilities have at least 60 percent of their area
given to landscaping.
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Enforcing control
with permits
Fees as funds
Regulations
or legislation
Increasingly, the preparation of an environmental impact assessment is
also included in the requirements for building tourist facilities. Such a
process involves investigating and detailing the likely environmental
effects of a proposed tourist development. An important part of the
process is the adaptation of the proposal to minimize impacts which
the assessment identifies.
Design Standards
There are numerous ways in which proposed tourist developments can be
constructed to minimize negative and enhance positive environmental
impacts. The English Tourist Board (ETB) offers the following suggestions
for tourist developers when planning and constructing facilities:
Use local styles of architecture and where appropriate regional
building materials.
Incorporate features of the site into the design. Use existing
vegetation and land forms as screens and features.
Think about design features which will minimize energy and other
resource requirements. An example of how this can be done is the
use of vegetation to provide shade and minimize air conditioning
requirements.
Use construction techniques which have minimal impact on the
environment.
Use recycled materials wherever possible.
Use native species in landscaping and encourage the use of the
setting by wildlife (English Tourist Board, 1991).
Table 12.5 contains a list of more specific suggestions to minimize the
impact of tourist structures.
An example of the use of the ETB principles can be found in the
development of a Center Parc holiday village in Sherwood Forest in
England. This development blended roads and facilities into the
landscape to minimize visual impact and used existing pine trees as
visual screens. The developers also created a lake and stream system
which was stocked with plants from nearby areas and planted 500,000
new trees and bushes to revegetate the area. This new vegetation
provides food and shelter for wildlife and the operators have supplied
nesting boxes to encourage birds to use the area.
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Strategies for Managing Impacts
Constructing
facilities
England's
Sherwood Forest
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Chapter 12: Sustainable Tourism and the Environment
Existing tourist operations can also improve their sustainability by
conducting environmental audits and using this information to create
waste and energy management systems. Environmental audits are
similar to environmental impacts assessments in that they are
concerned with identifying a variety of environmental impacts
associated with an operation. In particular, environmental audits
usually concentrate on the products or resources used in an operation
and the waste produced. Examples of mechanisms to minimize
resource use and waste production are listed in Table 12.6.
Visitor Management Systems
Another important set of strategies for managing tourism impacts is
that concerned with the management of visitors. Visitor management
systems are designed to control the numbers and flow of visitors as
well as their activities. Visitor flow systems operate by restricting
visitor access to certain areas, by establishing pathways through areas,
and by controlling the times of visits. The two major goals of such flow
control mechanisms are to keep visitors away from sensitive sites and
Avoid major trees and natural features when deciding on sites for structures.
Consider water flow through a site when placing structures and divert water
from roads and paths to avoid erosion.
Do not intensively clear vegetation from lakes, beaches, streams or rivers.
Space buildings to allow wildlife to move through the area and for belts of
natural vegetation to be established.
Restrict the use of vehicles both during construction and as a feature of the
finished facilities.
Use boardwalks both during construction and for pedestrian traffic.
Pipes and cables can be placed under boardwalks to minimize excavation.
Use design features to control the intrusion of insects and rodents.
Use landscape features to enhance natural ventilation.
Include facilities for recycling and waste treatment.
Source: Based on Andersen 1993.
Table 12.5: Suggestions for Minimizing Negative Environmental
Impacts When Constructing Tourist Facilities
Audits
Controlling
visitor flow
to spread visitor use either spatially or temporally or both. At Seal Bay
Conservation Park in South Australia, for example, visitors are only
allowed onto the beach where sea lions congregate with a guide and in
small groups. Tour groups must book in advance and the time of arrival
of these tours is spread throughout the day. There are also boardwalks
which keep visitors from damaging the dunes and beach areas.
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Table 12.6: Mechanisms for Minimizing Resource Use and Waste Management
Source: Examples used in this table were taken from ETB 1991,
Goodall 1992, and Harris and Lieper 1995.
Target Area Ideas and Examples
Minimize Waste Buy products in bulk to cut down on packaging.
Use washable or reusable utensils.
Separate rubbish and use recycling options.
Pale Hall Hotel (UK) recycles menus into office note pads.
Minimize Energy
Use
Use insulation wisely.
Use low energy lighting options.
Recycle energy.
The Dome in Doncaster (UK) leisure center recycles heat from
refrigeration units and uses it to heat pools.
Consider solar power options.
Use key-tag systems that automatically shut off lights and air
conditioning when guests leave their room.
Minimize Water
Use and Pollution
Install low flow shower hoses.
Recycle water from sewage for use in gardens.
Install tertiary sewage treatment plants.
Encourage guests not to have towels laundered every day.
Disney World (USA) uses a system which converts sewage into organic
fertilizer which in turn is used in the theme park gardens.
Minimize air and
noise pollution
Encourage guests and staff to use more environmentally friendly forms of
transport.
Consort Hotels (UK) offer staff and guests the use of bicycles.
Change to using cars which run on unleaded petrol.
Minimize pollution
in general
Avoid the use of pesticides in gardens.
Use environmentally friendly cleaning products.
Forte Hotels (UK) use biodegradable toiletries which
are not tested on animals, and which are packaged in recyclable materials.
Interpretation is another major visitor management tool. Effective
interpretation can inform visitors of the range of activities or sites
available in an area and assist visitors in choosing alternatives that best
suit their interests. This can have the effect of easing congestion at
intensely used sites. Interpretation can educate tourists about a place
and inform them directly on how to behave in ways that will have
minimal impact on the environment. Effective interpretation can also
help tourists understand the significance of the place they are visiting
and encourage them to support its conservation and care. Interpretation
can play a role in the creation of tourist experiences that substitute for
Seal Bay
example
Educating
tourists
actually getting into the environment. For example, the Royal Tyrrell
Museum of Paleontology in Drumheller, Alberta is an interpretive
tourist attraction that is located several hundred kilometers away from
the world heritage area, Dinosaur Provincial Park. This system results
in very few tourists actually going to the park, which reduces intrusion
into a very sensitive environment.
Adapting the Environment
The use of boardwalks at Seal Bay is an example of another tourism
management option, adapting the environment. The most common
adaptation of an environment is the addition of protective structures
such as rock walls, boardwalks, steps, formed pathways and visitor
facilities. This is usually referred to as site hardening. Such measures
can prevent erosion and damage to vegetation and can also be used as
a measure of protection for wildlife. At Seal Bay the boardwalks allow
the sea lions to move into the sand dunes without being disturbed by
visitors. The provision of facilities can encourage visitors to engage in
activities which are less damaging, such as the use of hides to allow
visitors to unobtrusively observe wildlife, and the provision of gas or
electric barbecues to discourage damage to trees as a result of visitors
seeking fuel for cooking.
12.5.2 Marketing and Education Strategies
There are also marketing strategies which can encourage the
development of sustainable tourism. The most important of these is in
the development of tourism products or concepts which are suitable for
the environmental resources that their destination region has available.
For example, in the Norfolk Broads National Park in England a guide
to the region contains information designed to heighten visitor
awareness of the environment and encourage appropriate activities
such as birdwatching and nature trails. It is also important to provide
accurate information about the environment and environmental
impacts in advertising. This ensures that visitors are matched to the
experiences which are actually available.
The education of staff who work in tourism businesses can also make a
valuable contribution to impact management. As with interpretation for
visitors, education of staff can provide both information specifically
about different actions, their impacts of the environment and measures to
minimize these impacts, as well as information which can help staff
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Adapting sites
Suitability
Educating staff
appreciate the place in which they work. The use of codes of conduct or
environmental ethics are currently a popular form of education for both
tourists and tour operators. Table 12.7 is an example of one of these codes.
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Strategies for Managing Impacts
Table 12.7: A Tourist Code of Ethics
Source: American Society of Travel Agents, as contained in WTO,
Sustainable Tourism Development Guide for Local Planners.
The American Society of Travel Agents (ASTA) proposes the following
commandments for travelers. Whether on business or leisure travel:
1. Respect the frailty of the earth. Realize that unless all are willing to
help in its preservation, unique and beautiful destinations may not be
here for future generations to enjoy.
2. Leave only footprints. Take only photographs. No graffiti! No litter! Do
not take away souvenirs from historical sites and natural areas.
3. To make your travels more meaningful, educate yourself about the
geography, customs, manners, and cultures of the region you visit. Take
time to listen to the people. Encourage local conservation efforts.
4. Respect the privacy and dignity of others. Inquire before photographing people.
5. Do not buy products made from endangered plants or animals, such as
ivory, tortoise shell, animal skins and feathers. Read Know Before You
Go, the U.S. Customs list of products which cannot be imported.
6. Always follow designated trails. Do not disturb animals, plants or their
natural habitats.
7. Learn about and support conservation-oriented programs and
organizations working to preserve the environment.
8. Whenever possible, walk or utilize environmentally-sound methods of
transportation. Encourage drivers of public vehicles to stop engines when
parked.
9. Patronize those (hotels, airlines, resorts, cruise lines, tour operators and
suppliers) who advance energy and environment conservation; water and
air quality; recycling, safe management of waste and toxic materials;
noise abatement; community involvement; and which provide
experienced, well-trained staff dedicated to strong principles of
conservation.
10. Ask your ASTA travel agent to identify those organizations which
subscribe to ASTA Environmental Guidelines for air, land and sea travel.
ASTA has recommended that these organizations adopt their own
environmental codes to cover special sites and ecosystems.
12.5.3 Research and Monitoring
Finally, there are actions relating to research and monitoring. There are
three major types of research that are necessary to ensure that quality
is preserved and encouraged in tourism development. The first area
improves understanding of the relationship between tourism and
environmental impacts. The second area improves techniques for
evaluating actions and strategies. The gathering of systematic evidence
of the effectiveness of any strategy is necessary for the widespread
adoption of the strategy and in its further development. Finally, the
third research area is aimed at improving the monitoring of various
indicators of environmental quality to identify impacts before they
become severe or irreversible.
12.6 Tourism and the Physical
Environment: Three Case Studies
The following sections describe three different destinations that reflect
different types of tourism environments and different types of tourism-
environment interactions. These case studies demonstrate the
interaction between various features of tourism and their impacts, and
provides examples of the cumulative and indirect nature of many of
tourisms effects on the physical environment.
12.6.1 The Great Barrier Reef, Australia
The north-eastern tropical coastal region of Australia is a major center
for both international and domestic travel. The major attractions are a
tropical climate, beaches and the world heritage-listed Great Barrier
Reef and Wet Tropics Rain Forests. The Great Barrier Reef (GBR) is
the worlds largest coral system, stretching almost 2,000 kilometers
along the Australian coast. Nearly two-thirds of the regions tourists are
primarily interested in nature-based activities such as diving and day
trips to the reef.
A review of tourism impacts on the GBR suggested that all the
following have occurred:
Coral damage from infrastructure and tourist activity.
Collection of coral, shells and plants.
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Understanding,
evaluating,
improving
GBR Problems
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Tourism and the Physical Environment: Three Case Studies
Accumulation of litter.
Disruption to habitats and changes in animal behavior as a result of
feeding.
Water pollution from sediment disturbance, nutrient overload from
the use of fertilizer, and sewage discharge.
The GBR is an example of the way in which a comprehensive and
integrated management strategy can be used to encourage the
sustainability of tourism. The area is contained within a Marine Park
and managed by the Great Barrier Reef Marine Park Authority
(GBRMPA). The GBRMPA has produced both a strategic plan for the
area as a whole as well as detailed regional plans which are updated on
a regular basis. At the core of these plans are a series of zones which
determine the activities that are allowed in various parts of the reef.
Commercial tour operations are allowed in several of the zones with a
permit. These permits require the proposed operator to provide a type of
environmental impact assessment and permits are only given to
operators who can demonstrate that their activities are consistent with
the type of experiences seen as appropriate to the area and that they will
have minimal environmental impacts. Operators who place major
structures on the reef must also provide a bond to the GBRMPA to
ensure that sites are rehabilitated if necessary. A variety of conditions
related to numbers of visitors, places of anchoring, types of structures
and types of activities allowed are attached to each permit.
The GBRMPA also relies heavily on education as a management
strategy and offers both training packages for reef operators and their
staff but also numerous forms of interpretation for both staff and
tourists. In conjunction with tour operators in the region the GBRMPA
has developed a series of environmental best practice principles for a
range of tourist activities. Table 12.8 contains two examples of these,
one designed for operators feeding fish on tours and one for visitors
who snorkel. Monitoring and research is also an important management
strategy used in this case. The GBRMPA itself conducts research into
tourism impacts and along with the recently established Cooperative
Research Centre for Reef Research is continuing to investigate not only
the impacts of tourism on the reef, but also visitor expectations and
responses to interpretive programs, and the development of technology
to minimize environmental impacts.
Operators
with permits
Education
and research
12.6.2 Venice, Italy
This historic center of this city is the most visited Italian tourist destination
attracting 48 percent of international visitor nights spent in Italy. It is also
a major center for domestic tourists and excursionists. In 1992, more than
1.2 million tourists spent at least one night in Venice and nearly 6 million
people took a day trip to this city. These figures mean that there were 89
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Table 12.8: Examples of Best Environmental Practices for Tourism
on the Great Barrier Reef
Source: Great Barrier Reef Marine Park Authority, 1996, pp. 6 and 9.
Best Environmental Practices for Fish Feeding:
1. If you are feeding fish as a part of a commercial tourism operation, fish
feeding should be well supervised and conducted only by staff.
2. Avoid feeding fish in areas where fishing takes place, to minimize conflict of use.
3. Fish should not be fed directly by hand, but by broadcasting food into the water.
4. People should not be in the water at the same time of fish feeding.
5. Feed fish only raw marine products or fish pellets.
6. Feed Fish no more than one kilogram of food per day per site on the reef.
Best Environmental Practices for Snorkeling:
1. Where possible, practice snorkeling techniques away from living coral.
2. Be aware of where your fins are at all times and control your fin kicks,
especially in shallow water.
3. Avoid touching anything with your fins and be aware of disturbing coral
and sediment.
4. Do not rest or stand on coral. If you must stand up make sure it's on sand.
5. Where available use rest stations. These should be located adjacent to
coral or sensitive areas.
6. Observe animals rather than handle them directly. Handling some
animals may be dangerous.
7. Do not chase or attempt to ride or grab free-swimming animals. Avoid
blocking their path.
8. Do not poke or prod any plants or animals.
9. If you pick up anything under water, living or dead, always return it to
exactly the same position.
10. Take the time to learn about the underwater environment.
Italy's top
destination
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Tourism and the Physical Environment: Three Case Studies
times as many visitors to the historic center of the city than there were
residents. Surveys of visitors to this destination indicate that the tourists
come to experience the citys unique character, which combines heritage
and important cultural events with the peculiar physical structure of the
centre (Costa, Manente, & van der Borg, 1993, p. 51).
Venice suffers from high levels of both physical and social impacts
from tourism. The major negative environmental impacts of tourism in
Venice are water pollution, including sewage from hotels and litter, and
air pollution from tourist buses and boats. In recent years the city has
experienced algal blooms as a consequence of water pollution. These
large growths of algae float along the surface of the water, choking
oxygen supplies to fish and creating decay that results in foul smelling
areas. It has been estimated that such occurrences can result in
significant drops in tourist trade, and is a clear example of the
importance to tourism of maintaining environmental quality. In
addition, the large number of visitors at several sites has resulted in the
wearing down of stone floors and stairs and damage to art work due to
increases in humidity and temperature inside buildings.
While Venice has no overall tourism strategy or plan, several
management options have been proposed to alleviate the problems
associated with tourism to Venice. The main focus of these proposals has
been to deal with the number and flow of visitors to and through the city.
A series of actions have been undertaken to encourage tourists to use
alternative means of transportation to access the city, to use alternative
routes to travel through the city and to visit in intermediate seasons.
These include both actual restrictions on tourist movements, such as
limiting the use of transport terminals by tour buses, and promotional
campaigns advertising lesser known sites within the city and
encouraging visitors to come at less crowded times. The city is also
considering attempts to restrict numbers of visitors by offering a Venice
Card or tour package which is booked in advance, is limited in number
and which offers the holder discounts and advantages such as not having
to wait in lines for entry tickets. The aim would be to make this package
sufficiently attractive that it would be used by the majority of visitors.
12.6.3 Mt. Huangshan Scenic Area,
Peoples Republic of China
This world heritage-listed area is a major domestic and international
tourism destination because of its environmental features which
include hot springs, pine forests, mountain scenery and historic
Physical impacts,
e.g. water
pollution
Dealing with
visitor flow
buildings and sites. Tourism here has grown from 282,000 visitors in
1979 to more than 1.3 million visitors in 1990. Tourism focuses on the
experience of the destinations beautiful and exotic environment.
Rapid growth in tourist numbers has been associated with various
environmental impacts including reduction of animal and vegetation
resources, urbanization of scenic areas, loss of balance of water
distribution, and pollution. In peak periods, visitors can leave up to
1,000 tons of rubbish and 3,000 tons of sewage, much of which flows
directly into rivers. These rivers have also been disturbed by the
building of reservoirs to supply water for tourist developments.
Developments constructed to take advantage of scenic views have
created disordered urban landscapes in what were natural scenic areas.
These developments have also cleared extensive areas of forest and
many of the plants and animals of the region are now endangered.
The following actions have been suggested to manage tourism to this
world heritage area:
Develop a plan which includes regulations: controlling the
construction of tourist facilities; creating a zoning system which
restricts access to particularly sensitive sites and opens up lesser
known sites to ease pressure on intensively used points; setting limits
to the number of visitors allowed into particular places; controlling
facility construction to encourage the use of traditional architectural
styles; and effectively addressing the issue of waste treatment.
Provide better infrastructure such as site hardening and visitor
centers and gardens.
Develop itineraries or routes which can ease the flow of visitors
through the area and encourage visitors to follow these suggested paths.
Establish a monitoring program to help in acquiring an exact
knowledge of the changes in the ecological environment, and in tapping
the tourism resource in a rational way (Tiansheng, 1992, p. 30).
12.7 Alternative Tourism
One of the responses to criticism of tourism based on its negative
impacts has been a call for alternative forms of tourism to be created.
A number of these alternative tourism forms have been offered using
labels such as soft tourism, green tourism, responsible tourism,
community tourism, and ecotourism. While these proposed alternative
forms of tourism differ in various ways from each other, they share, in
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Chapter 12: Sustainable Tourism and the Environment
Environmental
problems
Regulations
275
Summary
contrast to mass tourism, an emphasis on small scale development, an
active experience for tourists, direct contact between hosts and guests,
and local control over development.
However, negative environmental impacts can also result from
alternative forms of tourism, especially where it occurs in remote and
sensitive environments. In addition, it is unlikely that alternative forms
of tourism can be viable economic substitutions for conventional forms
of tourism due to the fact that small scale operations are unlikely to
provide the economic returns of conventional tourism.
Despite these concerns and criticisms, alternative forms of tourism are
valuable and appropriate in some situations in that they can provide a
greater range of opportunities for visitors, thereby diversifying and
strengthening the base for a regions tourism. Alternative tourism can
also demonstrate the value and practicality of practices and products
designed to minimize negative impacts.
SUMMARY
In many places the relationship between tourism and the physical
environment has been one of conflict. Many examples can be found of
the negative impacts that tourism has had on the physical environment.
This chapter has described some of these impacts including the
destruction of natural and cultural heritage to make way for tourism
facilities, the creation of pollution, and pressure on resources.
Unplanned and uncontrolled tourism can destroy its own assets as
much of tourism is dependent upon environmental quality.
The challenge for tourism planners, managers and developers is to
move from a relationship marked by conflict to one of symbiosis. In a
symbiotic relationship tourism depends upon the physical environment
as a core feature of the products it provides and the physical
environment benefits from tourism. This is the goal of sustainable
tourism. This chapter has described the major characteristics of
sustainable tourism and offered a range of strategies which can be used
to achieve this type of tourism.
DISCUSSION QUESTIONS
1. Consider tourism products in your local area and discuss the
importance of the physical environment in those products.
Criticisms
Diversifying
tourism
2. Review the examples of negative impacts described in the chapter
and suggest management strategies that could be used to deal with
these impacts.
3. Describe some examples of positive impacts from tourism in your
region and identify factors which have contributed to these positive
outcomes.
4. Develop a behavior code for visitors to your country.
5. Design an ecotourism product relevant to your local area which
meets each of the requirements for ecotourism listed in the chapter.
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Chapter 12: Sustainable Tourism and the Environment
5
S
e
c
t
i
o
n
Tourism Policy and Planning
CHAPTER 13
The Role of Government in Tourism Policy and Administration
CHAPTER 14
The Role of International and Regional Organizations in Tourism
CHAPTER 15
Tourism Planning and Destination Development
CHAPTER 16
Tourism Human Resources Planning and Development
CHAPTER 17
Conclusion
CHAPTER 13
The Role of Government in Tourism Policy and Administration
Learning objectives
To understand the importance of public policy and regulation in tourism
at the national and international levels.
To understand the reasons for governmental intervention in a countrys
economy.
To be aware of the ways in which government involvement in tourism
benefits a country.
To understand the major roles of government activity in tourism.
To understand the goals and impacts of tourism policy and planning.
To appreciate the role of national tourism administrations and their
importance to governments in creating and implementing tourism policy.
Key terms and concepts
government regulation
national tourism administration (NTA)
tourism policy
tourism planning
13.1 Introduction
Tourism, like other forms of economic activity, takes place in an
environment that is shaped by many different forces. One of the most
important of these forcesif not the most importantis exerted by a complex
web of policies, laws, regulations, and other actions of governments.
As we have discussed in earlier chapters, tourism is comprised of
industries and activities that stretch not only across nations and
regions, but across traditional lines of business and industry as well.
The businesses that provide tourism services, therefore, must contend
with actions of different levels within a government, of many different
governments, and of a variety of types of laws and regulations aimed
at different industries.
International tourism relies on a high degree of communication and
cooperation among nations with respect to this complex network of laws,
regulations, and policies. Consider, for example, something as basic as air
travel to another country: the availability, frequency, and cost of the plane
ride are subject to bilateral air travel agreements; the exchange of one
currency for another is subject to rates and terms set by currency agreements
and to the complex workings of the international currency markets; and entry
into the destination country is regulated by visa and other immigration or
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The Role of Government
in Tourism Policy
and Administration
Travel laws,
policies and
regulations
customs-related agreements. The point is clear: the fundamental and
necessary elements of international travel are largely determined by the
actions and policies of governments. Or, to put it another way, even the most
attractive destination will be of no consequence unless its host country can
forge the agreements that will enable developers, airlines, banks, and
immigration personnel, among others, to provide the services that will bring
tourists to the area. Thus, public policy is critical to the success of
international tourism and merits careful study and consideration.
This chapter will examine the role of government in tourism policy and its
administration. Chapter 14 will then take a closer look at the international
and regional organizations that are involved in tourism policy issues.
13.2 Government Involvement in Tourism
To illustrate the importance of the public sector to tourism, consider a
hypothetical dream vacation an avid skier might take to a foreign
country called Alpina, home to the worlds greatest ski slopes.
First of all, can the skier visit Alpina? The answer depends on Alpinas
policy regarding foreign visitors to its country, and on the skiers own
governments policy regarding travel to Alpina. The answer also
depends on the status of political and trade relations between the skiers
home country and Alpina. Perhaps the two are not on the best of terms,
in which case a lengthy and extensive process may delay the trip.
How will the skier get to Alpina? Ideally, she would board a plane and
fly directly to the airport nearest to the hotel she will be staying at. But
the availability of such flights would depend on the status of bilateral
air agreements that the two countries may or may not have with each
other. If the two countries do not have an agreement, she may need to
fly to a third country first before boarding a plane destined for Alpina.
Once there, where will the skier lodge and visit? She may have heard
of several outstanding ski areas. Perhaps, however, the local or national
government has been advised that these areas are being overused, and
has therefore designated them as ecological preserves and will not
allow any further skiing. Or perhaps the hotel at which the skier is
staying is quite distant from the best ski areas, because the local
government, for political reasons, has compelled developers to build
hotels in areas that need jobs rather than those in proximity to the ski
slopes. During her stay, our skier will have paid many direct and
indirect taxes in the hotel, stores, slopes, and transportation that are
also the prerogatives of governments at various levels.
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Importance of
public policy
Hypothetical
situation showing
government
impact
From this hypothetical example, one can see that the actions or
inactions of government can have a great impact upon nearly every
aspect of tourism. Tourism-related laws, regulations, and restrictions
range from the broad and inclusive such as air traffic agreements that
dictate the frequency and cost of airline trips, to the minute such as a
local law that specifies the amount of indigenous material that an
authentic souvenir needs to contain in order to be labeled as such.
Governments are extensively involved in all travel experiences, even if
the effects of their involvement may not be immediately apparent.
13.3 Reasons for Government Involvement
in Tourism and the Economy
Government intervention in a countrys economy has traditionally been
thought to be a characteristic of command economies, in which the
private sector is largely preempted by government-owned institutions
and businesses. On the other hand, market economies, by definition,
are supposed to be freer of government involvement. While significant
differences in the levels of government intervention exist among
countries, all governments, even those in nations characterized by
relatively unfettered market economies, are deeply involved in their
economies for a number of reasons.
13.3.1 Promoting Economic Development
All governments have a vital interest in the health of their countries
economies. A countrys strength and standing in the global community
depend in large part upon its ability to sustain economic vitality, without
which it would be forced into a cycle of debt and dependence on other
nations. In addition, to the extent that poor economic health strains the
domestic population, the government of an economically weak nation
will be more susceptible to internal challenge and pressure.
In todays global economy, the tie between government and economic
vitality is a direct and essential one. Very few countries can pursue
economic development without participating in the global economy.
This participation involves issues such as currency exchange, foreign
ownership, and consular relations. Thus development is highly
dependent upon political and governmental actions. For example, a
countrys textile industry may depend for its survival on restrictions
and tariffs on foreign fabrics. The result of this interdependence is that
political decisions can have a ripple effect throughout the entire
national economy. Economic development often requires government
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Reasons for Government Involvement in Tourism and the Economy
Levels of control
Government
interest in strong
economy
Global economic
relationships
initiative and capital. This is particularly important for the
development of new regions or areas that require infrastructure. For
example, foreign investors might be reluctant to finance a resort
project unless the government demonstrates its commitment to the
project by building or financing the necessary access roads and water
lines, or by offering appropriate incentives such as a tax holiday during
the early years when the resort is not expected to be profitable.
Monetary policy is another important area of government involvement.
Governments often use their ability to expand or contract the supply of
money to stimulate or control economic growth. Governments also use
a variety of methods to influence the value of their currency on the
international market. Currency exchange rates among nations are
particularly important to international trade and tourism. For example,
if country As currency is inexpensive relative to country Bs, then
visitors to country A from country B will likely increase their
expenditures while in country A.
13.3.2 Facilitating and Supporting Industries
Closely related to overall economic development is the practice on the part
of governments to support certain industries. Governments take different
approaches to supporting sectors or industries. Some governments take a
very activist approach to shaping their economies by creating industrial
policies, which constitute integrated plans of action that can be quite
detailed in setting goals and limits for a nations industries. Governments
that want to avoid the degree of planning and control that an industrial
policy requires often utilize various incentives and disincentives. Tax
credits, for example, are often used to encourage investment in and
development of certain industries that a government favors.
13.3.3 Raising Revenues
Much of government intervention in the economy results from its need to
generate the revenue to maintain its agencies and activities. As
governments grow more complex and are called upon to provide more
services, their need for revenues increases correspondingly. Government
operating expenses related to tourism include the costs to maintain the
various departments responsible for tourism functions. Revenue-raising
measures can be highly visible to the ordinary citizen, like the taxation of
personal consumption and business income or the assessment of fees to
obtain permits and licenses, or in more specialized forms as in the sale of
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Monetary
policy
Government
and industry
Taxation
and fees
bonds and other instruments of public finance. Taxation, however, is less
apparent to tourists who have no vote on the matter or in local politics,
and thus often becomes a source of choice for raising new revenues.
13.3.4 Creating a Stable Business Environment
Governments have a vested interest in ensuring that certain standards of
competence and conduct prevail in the marketplace. This is because
governments are often drawn into, and are asked to resolve, problems and
disputes that arise from economic activity. In order to set up these
standards, governments establish regulatory agencies and laws. For
example, a government may create a professional licensing board that
requires that engineers pass certain tests and meet minimum standards of
training in order to ensure that the hotels they design are structurally
sound. Or a government may enact a law that defines the phrase made
from indigenous materials, to ensure that visitors who are sold such
items are not being deceived. To protect home industries and to encourage
the consumption of local commodities, government may also attempt to
impose high import taxes to discourage the purchase of foreign goods to
resell in hotels, restaurants and other tourism-related businesses.
13.3.5 Pursuing Other Policy Goals
Governments can use their power to intervene in business activity to
achieve broader policy goals. Some of the policy areas that
governments often address when considering tourism development
include employment, human resources development, education and
training (discussed in Chapter 16) and environmental protection
(discussed in Chapter 12). Social equity and justice are important goals
of some government intervention; where inequitable distributions of
wealth are being created or conserved by structural problems in the
economy, corrective government action is sometimes warranted.
While these incentives and pressures integrally involve governments in
their economies, public policy is not the sole determinant of a countrys
economic direction. Other factors, such as a countrys climate and its
natural resources, cultural and social factors, and the condition of the
regional and world economies, also direct and constrain economic
development in certain ways. Nevertheless, in todays global business
environment it is clear that public policy exerts a significant influence
on the shape and vitality of a countrys economy.
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Reasons for Government Involvement in Tourism and the Economy
Regulations to
maintain
standards
Encouraging local
spending
Government
influence on
business
13.4 Roles of the Public Sector in Tourism
In order to better understand how government involvement affects the
tourism industry, we can classify public sector actions into four general
categories: policy, planning, development, and regulation. In each of
these areas governments play a unique and vital role in either
facilitating or discouraging tourism.
13.4.1 Policy
Policy generally refers to an overall, high-level plan that includes goals
and procedures. Public policy, therefore, takes into account the desired
end results of a government and the methods for attaining those results.
For example, a government might pursue a policy of greater economic
growth through tourism development by creating generous tax incentives
for resort developers. Policy is meant to provide guidance by addressing
the issues that are central to any effort to develop and sustain a tourism
industry. Policies embody goals and strategies that a government has
adopted with respect to tourism, economic development, employment,
political relations, or, more likely, a combination of these and other areas.
Because policy provides direction, of the four roles or functions of public
sector involvement in tourism listed above that of policy formulation is
probably the most important.
Policies are generally found in formal statements, such as laws and official
documents and speeches. However, policies can also be informal and
unstated, and can be discerned from patterns or trends of governmental
actions. For example, a government jurisdiction that consistently
disapproves every application to build a hotel within its borders, but does
not possess any formal statement on hotel development, may nevertheless
be guided by a clear policy. In this respect, it is important to note that
policy can be evident as much from government inaction as its actions.
In general, a nation will have several broad policy areas, such as
economic policy, educational policy, and social welfare policy. Often,
these broad policy areas will coincide with the organizational structure
of the government, with each ministry or department having the
responsibility to formulate and administer its own policies. The actual
names and formal relationships among the various government
departments vary from nation to nation.
Tourism policy is generally considered to be an area within a nations
overall economic policy. Economic policy is concerned with the
structure and growth of a nations economy and is often articulated in
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Goals and
procedures
Importance
of policies
Formal and
informal policies
Policy and
government
structure
ten-year plans that project conditions in the coming decade and plan
the nations economic growth within those conditions. Some of the key
areas of concern in economic policy are labor force, investment and
finance, important industries, and trade.
It is important to understand that a nations various policy areas are
interrelated, reflecting the complex and dynamic nature of modern
society itself. Impacts in one policy area will likely effect changes in
other areas. Thus, tourism policy makers need to adopt a
comprehensive perspective and consider all of the possible impacts and
relationships that tourism will have with other areas of society.
The formulation of tourism policy, therefore, is a crucial responsibility
of a government that wishes to develop or sustain tourism as an integral
part of its economy. Tourism policy articulates goals and direction,
strategies and objectives, and by so doing enables the government to
lead and actively pursue the kind of development its people want.
Tourism policy thus requires that policy makerslegislators,
administrators, business executivesconsider the following issues:
The role of tourism in the economy. (How important is tourism to
the overall economy? How important is tourism with respect to
other industries?)
Control of tourism development. (What kind of tourism
development is desirable and appropriate? Where should tourism
development occur?)
Administration of tourism. (At what level should tourism be
represented in the governments organizational structure?)
Government support for tourism. (What amount of public resources
should be directed to tourisms support and growth?)
Tourisms impacts. (What kinds of impacts, both positive and
negative, will tourism have on the existing society, culture, and
environment, and how will these be addressed?)
As can be seen, these are issues which are likely to generate substantial
debate. Different regions within a country may be at odds over the
location of planned development, different segments of the population
may disagree over the perceived impacts of tourism, and different
businesses may struggle to direct development in a manner that favors
them. The process that a government employs in order to arrive at its
policy must account for the many competing constituencies that wish
to be represented in the final product.
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Interrelated
policies
Debate
potential
13.4.2 Planning
Tourism constitutes a means of economic development. On this point,
all countries would agree, and, in fact, it is the primary reason that they
seek to develop the industry. But economic development in todays
complex and global business environment is far from being a simple
process. Tourism is a certain kind of industry that has its own unique
requirements, impacts, and rewards. Fulfilling those requirements,
minimizing the negative impacts, and reaping the rewards, are the
primary goals of tourism planning.
Planning is particularly important for tourism development because of
two characteristics of the tourism industry. First, tourism is a complex
industry that stretches across many different sectors and businesses;
therefore, it is an industry which is often not formally recognized in
statistical analyses of the economy. As a result, hard data and information
about tourism tend to be fragmented among different subject areas.
Complicating the first characteristic is the fact that tourism is a site-
specific industry. Two destinations may be comparable in terms of size
and visitor market, but because of their unique circumstancesincluding
the physical environment, availability of services, government and
culturetheir industries may take vastly different forms. Each destination
will have different problems, or will need to address similar problems in
different ways. Because mass tourism is a relatively young industry, even
destinations that are considered established may be only 30-40 years old,
and are still learning from their own experiences. In turn, newer
destinations are trying to learn from the mistakes of others.
Planning enables government and industry to compensate for these
factors by providing a structure to collect and analyze information
relevant to tourism development and a process to achieve it. The
planning process requires policy makers to consider all aspects and
impacts of the industry (which are discussed in Chapter 15). Those
issues raise the following types of questions:
Marketing analysis and strategy: What kind of travelers should be
appealed to and how can they be attracted?
Physical infrastructure: Are existing airports, roads, and utilities
adequate for the level of tourism projected? If not, what needs to be
improved and expanded? How will these improvements and
expansions be financed?
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Means of
economic
development
A site-specific
industry
Young
industry
Providing a
structure for
analysis
Human resources: Can the local communities provide an adequate
employment base for the industry? Will workers need to be
imported? What kinds of skills are required, and how do they match
with the existing base of workers? Will there be a need to develop
education and training facilities?
Environmental impacts: How will tourism development affect the
existing environment? What can be done to minimize the adverse
impacts? What can be done to create a sustainable industry?
Sociocultural impacts: How will the commercial and market-
oriented aspects of tourism affect the local culture? Will tourism
employment disrupt existing family patterns? To what extent can
existing cultural resources, such as arts, crafts, and music, be used
as visitor attractions without damaging them? How will the presence
of foreign visitors affect residents?
Economic impacts: What will the net economic impact be from
tourism in terms of exchange earnings and tax revenues? To what
extent must import goods be sold to visitors? What kinds of
incentives, if any, must be offered to the private sector in order to
attract capital investment?
As can be seen from this range of issues and questions, the planning
process can be essential in forcing a government to think
systematically about the total impact of tourism. The importance of
planning cannot be overstated, particularly for those destinations that
are environmentally fragile or whose cultures have not been exposed to
market-oriented activities. Because tourism development usually
requires both the public and private sectors to undertake major capital
projects (hotel accommodations, public works infrastructure,
transportation links), a lack of planning can result in costly mistakes.
For example, a comprehensive tourism plan usually includes a land use
plan that directs and integrates the many uses of land for an areasuch
as visitor accommodation facilities, commercial activities, housing,
recreational amenitiesin a rational way that enhances the visitor
experience while protecting the host community and environment.
Without such a plan, haphazard development might occur, such as a
hotel being built in an inappropriate place, resulting in mistakes that
essentially cannot be corrected (or are extremely costly to rectify), and
which the host community will have to endure for many years.
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Comprehensive
planning
13.4.3 Development
Although development is often thought of as a private sector activity,
there are circumstances in which the government can play a useful, and
sometimes necessary, role. For example, in many cases the existing
private sector may lack sufficient size and capital to undertake the
development of a destination on its own. In these cases, government
may get involved by taking the role of developer, or by taking on a
partnership role as the provider or guarantor of capital, or in any of a
number of other ways. Sometimes, in cases where certain areas have
been designated and planned for tourism development, the government
may wish to control the overall development by assuming the role of
lead developer. In this way, the government can coordinate the
construction of the actual visitor facilities with necessary improvements
in infrastructure or other activities such as education and training.
There are certain projects that, by virtue of their size and importance to the
country or destination as a whole, almost always require a leading
government role. Airports, major land transportation projects, and water-
related projects that involve dredging are examples of such tourism-related
projects. Governments have the ability to fund such projects by issuing
bonds and other financial instruments, thereby providing an essential
element of the development process that the private sector often cannot.
13.4.4 Regulation
The regulatory role of government is very important for the tourism
industry, because so much of it is intended to protect the consumer.
Government regulation plays a critically important role in protecting
tourists and enhancing their travel experiences in many ways, including:
Consumer protection laws and rules that require travel agencies to
deposit their customers advance booking deposits in a trust
account, to ensure that the moneys will be used for the purpose of
securing their reservations.
Fire safety laws that mandate a minimum number of exits and
emergency lights on each floor of a hotel, in case of a fire.
Health and food safety regulations that require food service
establishments to maintain minimum standards of safety and sanitation.
Competency standards that require bus and boat operators to
possess requisite skills and knowledge.
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Government as
developer
Project
importance
Consumer
protection
Regulatory actions often arise from a concern for a destinations
environmental and cultural resources. Certain protective regulations
restrict activities on, or access to, vulnerable environmental areas.
Examples of this would be a limit on the kinds and numbers of tour
boats that could operate in a scenic waterway to prevent undue damage
from overuse, or limiting hikers to only certain mountain areas to
prevent damage to a rare plant species. Another type of law might limit
the serving of alcohol or the performance of certain cultural displays to
certain days to minimize negative effects upon local customs. To the
extent that increasing numbers of destinations rely on environmental
and cultural features to differentiate themselves from other destinations,
these types of protective regulations will become more important.
Perhaps the most critical area of government regulation with respect to
international tourism is that of aviation. For most countries, tourism
growth requires growth in airline service. Air service, in turn, is
heavily dependent upon the bilateral agreements between countries
that govern all aspects of air transportation between them. The airline
industry has always been highly regulated, for two main reasons: first,
air travel requires technical and operational standards to ensure the
safety of air travel; and second, governments have generally tried to
retain tight control over the economic and commercial aspects of air
travel involving their countries.
Air regulations have traditionally been protectionist in nature. Areas in
which protectionist regulations have been used include the
specification of air routes, restrictions on airline ownership and
control, airline capacity, and tariffs. The complexity of the issues
involved in air travel regulation, and the ways in which issues of
international relations and national pride get tangled in air regulation,
means that the negotiation of air agreements remains a highly
contentious and political process. So far, efforts to create multilateral
agreementsagreements that would apply to several countrieshave
been largely unsuccessful, even though they promise a simpler and
more efficient system of regulation. More recently, as more countries
take measures to deregulate and privatize their airline systems, and as
they become more aware of the negative effects of airline regulation on
tourism growth, there has been increased pressure for a more liberal air
regulation. Air agreements are covered in greater detail in Chapter 3.
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Protective
regulations
Air regulations
13.5 Levels of Government Involvement
Government involvement or intervention in the economy occurs at
different levels of government. Although the exact structure and
relationship of these levels will vary from one country to another, there
are four basic levels that generally encompass all of the governmental
jurisdiction and activity relevant to any given destination.
13.5.1 International Involvement
International involvement can take several forms. First, there are
international political organizations. These organizations differ from the
economic and trade organizations discussed below by addressing a range
of non-economic issues, including political disputes. The most well-
known of these is the United Nations (UN), which serves as a forum for
the international community. The UN is unique in that its decisions can
be supported with police powers, in the form of armed troops. Within the
UN, there are organizations such as the United Nations Development
Program (UNDP) and the United Nations Environment Program
(UNEP), and the International Civil Aviation Organization (ICAO),
which serve a variety of functions for the member nations. The worlds
largest and most influential government tourism organizationthe World
Tourism Organization (WTO)is an executing agency for the UNDP
with over 130 government members. The WTO and its importance to
world tourism are discussed in Chapter 14. Other examples of
governmental organizations include the Association of Southeast Asian
Nations (ASEAN) and the European Union (EU).
Another important form of international government involvement is the
multilateral trade agreement. These agreements contain principles and
practices that guide the signatory countries economic and trade relations.
The General Agreement on Tariffs and Trade (GATT), General Agreement
on Trade in Services (GATS), North American Free Trade Agreement
(NAFTA), and European Community (EC) are examples of efforts by
countries to create greater efficiency and predictability in trade and com-
merce across national boundaries by forging comprehensive agreements.
From the perspective of tourism, bilateral air agreements represent a
special kind of international agreement. Bilateral agreements spell out
the terms and conditions of air transportation rights between two
countries, and are therefore critical for the success of international
tourism. Because these agreements are bilateral, they apply only to the
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International
political
organizations
Multilateral
trade agreements
Bilateral air
agreements
two participating countries; thus, a given country will negotiate and
maintain a separate agreement with each country with whom it wishes
to establish air transportation relations.
A key point regarding international governmental involvement is the
sovereignty of the national government. The sovereignty of the nation-
state means that international governmental involvement is dependent
upon voluntary cooperation. This is due to the fact that, with the
exception of the UN noted above, international organizations generally
do not possess the means to enforce agreements. Thus, it has historically
been difficult for international bodies and agreements to address
controversial or divisive issues. On these issues, nations prefer to reserve
to themselves the discretion to act in their own interests, rather than
relinquish it to a multilateral organization. This has been the primary
obstacle to creating a multilateral air regulatory system. Thus, with
respect to policy issues government involvement at the international
level tends to be advisory in nature. An international organization may
set certain goals for its government members, but it must lobby national
governments to adopt and abide by them. The ways in which
international bodies are involved in tourism is discussed in Chapter 14.
13.5.2 National Involvement
Governmental involvement at the national level can be extensive, and
is often critical to the success of the nations tourism industry. The
primary areas of involvement include the following:
Entry and exit. It is the national government that bears the
responsibility for controlling the most basic aspect of international
travel, that is, access across its borders. In itself, this responsibility
involves a wide range of issues and problems that need constant
attention. Key responsibilities in this area would include regulating
the issuance of visas, monitoring borders and airports, and
enforcing customs regulations
Policy and planning. As this chapter and Chapter 15 emphasize, the
policy and planning functions of a government are crucial to its
tourism industry. Tourism policies can exist at various governmental
levels, but it is at the national level that policy exerts its greatest
influence. This is due to the fact that, at the national level, policy
priorities are generally reflected in the nations political structure. A
separate national ministry or department devoted to tourism would
signal that the national government deems tourism to have a primary
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Levels of Government Involvement
Voluntary
cooperation
role in its economy. The ministry would have its own staff and would
be included in the regular process of government budgeting and
funding. In addition, it is likely that tourism would also be given a
prominent place in master economic and development plans, tax and
other economic incentive programs, physical plant and
infrastructure plans, and other such important activities. National
tourism planning generally involves the designation of regions or
areas to be targeted for tourism development.
Infrastructure development. A national governments involvement in
tourism is also significant because of the resources that can be
marshaled at the national level. Some aspects of tourism
development, particularly the construction of the infrastructure and
national parks necessary to accommodate both citizens and tourists,
require tremendous amounts of capital, amounts that often
necessitate the use of government financing capabilities such as
taxes, bonds and loan guarantees.
Marketing. Many national governments take an active role in
promoting their countries as destinations to the outside world. This
kind of promotion can be particularly useful for countries whose
tourism industry lacks sufficient resources to generate large
marketing campaigns. As discussed below, national tourism
administrations (NTAs) have traditionally been conceived and
formed primarily as marketing bodies of the national government.
13.5.3 Local Involvement
At the local level, government involvement can also be quite visible
and significant. It is at this level that the governments regulatory
function becomes prominent. Key areas of local governmental
involvement are the following:
Control of the land development process, including zoning laws and
building design.
Enforcement of laws and regulations relating to health, safety, and
employment, such as standards of cleanliness and safe handling for
food establishments, service of alcoholic beverages and
occupational safety and work conditions.
Licensing of persons and businesses, such as tour operators, travel
agencies, hotels, restaurants, and others.
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13.6 National Tourism Administrations (NTAs)
13.6.1 Role of NTAs
As we have seen, the nature of tourism is such that it is difficult to
designate the tourism industry or sector with the same precision that
can be applied to other industries and sectors. Because of this,
governments have had a difficult time measuring the importance and
impact of tourism upon their overall economies. Economists have
created and improved models that can be used to gauge the effect of
direct expenditures by visitors on hotels, transportation, and other
goods and services. Multipliers are used to estimate the ways in which
such expenditures exert a ripple effect throughout the economy.
Nevertheless, these estimates depend on many different variables and
assumptions and are often subject to uncertainty and dispute.
According to some observers, this uncertainty regarding the
measurement of tourisms contribution to an economy leads many
governments to either ignore tourism or to divide oversight for it among
many different ministries, departments, or agencies. A government may
direct its transportation ministry to address airline issues, its commerce
ministry to address issues relating to hotels, restaurants, and other
businesses, its energy ministry to consider fuel requirements of
transport systems, and its labor or education ministry to monitor issues
relating to tourism training and education. The effect of this kind of
dispersion of governmental responsibility is often a set of confusing,
and sometimes contradictory, laws, regulations, and policies. Often
times the various departments will zealously protect their respective
areas of responsibility and eschew collaboration with other departments
in favor of tighter control. It is well known that bureaucracies are
subject to these types of internal pressures that can hinder the effective
administration of functions that cross departmental boundaries.
National tourism administrations (NTAs), also referred to as national
tourism offices (NTOs), are seen by some governments as providing a
means to avoid fragmentation of tourism-related policy and practice. In
general, NTAs are ministerial- or departmental-level bodies that pursue
national tourism policies and goals. Beyond this broad definition, it is
difficult to generalize about NTAs as there are many different
structures and roles among them. Traditionally, NTAs were created and
operated primarily as marketing entities. They enabled countries to
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National Tourism Administrations (NTAs)
Difficulty in
assessing
tourism impact
Government
dispersion
Tourism-related
policy
pursue broad-based promotional strategies, in order to supplement the
marketing normally done by private industry. Traditional marketing
activities of an NTA include:
Marketing and promotion of the nation, ensuring its tourism
competitiveness and market share of visitors among other
destinations within its region.
Encouraging private sector support and cooperation in promotional
activities and participating in shaping national tourism policies and
practices.
Representing its country in trade and consumer shows and expositions.
Producing and distributing brochures, videos, and other marketing
materials.
Promoting and producing special events.
Performing or contracting for market research and analysis.
Maintaining overseas tourism information offices.
In fact, marketing and promotion continues to account for most of NTA
spending. In 1992, of the ten countries with the greatest NTA promotion
expenditures, eight spent more than 50 percent of their entire NTA
budget on promotion (World Tourism Organization, 1995a).
However, as tourisms importance has grown and as governments
expand their goals and expectations of tourism development, the policy
issues that tourism involves have also become more inclusive and
complex. NTAs, then, have been seen by many as the logical means of
administering and overseeing the tourism policies of governments.
While the scope of their functions varies from one NTA to another, the
World Tourism Organization has classified NTA functions into five
main groups:
General administration of travel and tourism
Tourism planning and development
Research
Education and training
Marketing and promotion
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Chapter 13: The Role of Government in Tourism Policy and Administration
NTA marketing
Expansion
of goals
13.6.2 NTA Structure
NTAs vary in terms of their structure and relationships to other
branches of government. The three basic forms of a NTA are:
The state tourism secretariat, which is a high-level office either on
its own or within a ministry, with representation at, and access to,
the highest executive levels of the government. An example is the
Uganda Ministry of Tourism and Wildlife and Antiquities.
The government agency or bureau located within a department
(such as a department of commerce or economic development), and
reporting to that department. The Taiwan Tourism Bureau, for
example, is located within the Ministry of Transportation and
Communication.
The quasi-public tourism authority or corporation, which often
includes representation of members of the private sector and
receives private funding and which is run more independently of the
government than the other types of NTAs. The Canadian Tourism
Commission is one such example among the many countries now
moving toward a quasi-public agency structure.
In addition, there is also a type of governmental entity that, while not
an NTA, fulfills a role similar to that of an NTA. This is a centralized
coordinating body comprised of representatives of other departments.
This type of body generally receives minimal funding and acts as a
forum in which the major departments involved with a nations tourism
industry (commerce, human resources, foreign relations) can address
issues that affect them.
Advocates of a NTA point out that a ministry or office of tourism has
three important advantages. First, it enables policy makers to work from
an overall perspective of tourism. This is important because government
policy often has many varied effects, only some of which are anticipated.
For example, a government may issue regulations restricting the
importation of foreign beef to protect its domestic cattle industry without
understanding that such a regulation may jeopardize the viability of
thousands of restaurants featuring imported high quality beef as their
main specialty. A centralized tourism office can often prevent or mitigate
the problems that arise from such unintended results of policy. In a
related manner, a central tourism office can provide leadership in
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Coordinator
NTA advantages
government planning efforts. Transportation and resort development, for
example, generally require large-scale planning due to their high cost
and their impact on the communities in which they are placed.
The second function that a centralized tourism office serves is to accord
tourism a higher level of status and attention within the government
administration. Generally, a higher status level enables the tourist
industry to receive greater amounts of governmental assistance and
funding. It also provides an institutional framework through which the
industry and government can communicate. A high-level tourism office
also serves to validate the importance of tourism to the overall economy
and society and informs the public of this importance. Third, it should
be kept in mind that only government can deal with other governments.
As tourism rises in importance as an item of international trade, an
effective NTA will be able to work with other NTAs to address issues
that involve fair trade in tourism as well as removing impediments to
travel among the sending and the receiving countries.
13.6.3 NTAs and the Issue of Public Sector
Involvement in Tourism
One of the main issues that NTAs continually face is the proper role of
the government in NTA activities, and particularly in NTA marketing
and promotion efforts. Government involvement is seen by some as an
unnecessary use of public funds for private purposes, while others
emphasize the public good that NTAs serve. It is also noted that private
industry, especially airline companies, are much more efficient and
effective destination promoters than many NTAs. The WTO has
suggested that government support of NTA activities may be seen as a
function of the overall economic development of the country and has
proposed the following categories:
Developed countries such as the United States and the United
Kingdom, characterized by a dominant private sector with some
public sector support.
Developed countries such as Italy, Spain, France, and Austria,
characterized by a dominant public sector.
Developed countries such as Japan and Sweden, with limited public
sector involvement.
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Government
role in tourism
299
Summary
Developing countries such as Cuba, Guatemala, and Morocco, where
the public sector is dominant and private sector participation is minimal.
Developing countries such as India and Curacao, with leadership
from the public sector but substantial involvement of the private
sector. (WTO, 1995a)
The debate regarding the governments proper role in tourism will
continue to engage both sides of the issue, especially as economic
conditions force governments to carefully examine their spending
priorities. The dissolution of the United States Travel and Tourism
Administration (USTTA) in 1996, for instance, indicates the
vulnerability of NTAs to budgetary constraints. It has been noted,
however, that a lack of government involvement in tourism marketing
can lead to an imbalance between demand and the infrastructure and
resource limitations of a destination.
SUMMARY
In todays global economy, the relationship between industry and
government is a close and vital one. International tourism, which by
definition involves the movement of people across national borders, is
heavily dependent upon governmental policies and actions. In addition,
because tourism involves and impacts many different parts of society,
it is subject to governmental involvement across a wide range of
activities. At the international, national, regional, and local levels, there
are important links between government and the tourism industry.
The presence or absence of a national tourism policy is important in
setting goals and directing development of the industry. Through
policy, governments can articulate their objectives in pursuing tourism
and their concerns regarding its impacts. Whatever its degree of
involvement in the industry, government can fulfil a valuable role by
emphasizing the long-range and comprehensive view of tourisms
place in the development of a countrys economy and society. As the
industry grows, governments who turn to tourism development will
have greater expectations of its contribution to the country. NTAs
provide a means of preventing these expectations from conflicting with
each other, and of managing the industrys many different aspects.
DISCUSSION QUESTIONS
1. In what ways can government policy hurt the tourism industry of a
country?
2. Compare and contrast the effect of international vs. national
government involvement in tourism policy making.
3. Name the four general categories of the public sectors actions in the
tourism industry. In what ways does one category impact another
category?
4. This chapter discusses how government regulation protects the
individual tourist. What are some ways in which government
regulation may protect businesses within the tourist industry?
5. Define the function of a National Tourism Administration (NTA)
and describe its three basic forms.
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Chapter 13: The Role of Government in Tourism Policy and Administration
CHAPTER 14
The Role of International and Regional Organizations in Tourism
Learning objectives
To understand the types of tourism organizations and their purposes and
objectives.
To understand the different ways tourism organizations assist members of
the tourist industry.
To understand how tourism organizations address international trade
issues.
To understand ways in which tourism organizations address environmental
and social issues in tourism.
To understand the challenges facing tourism organizations.
Key terms and concepts
Association of Southeast Asian Nations (ASEAN)
European Union (EU)
free trade
General Agreement on Trade in Services (GATS)
International Air Transport Association (IATA)
International Civil Aviation Organization (ICAO)
Organization for Economic Cooperation and Development (OECD)
Pacific Asia Travel Association (PATA)
protectionism
World Bank
World Tourism Organization (WTO)
World Travel and Tourism Council (WTTC)
14.1 Introduction
The previous chapter examined the importance of government
involvement in the travel industry, and discussed the various levels of
policy and regulation ranging from the local level to the international
level. The diversity of policy issues that affect tourism is evidence of the
industrys unique structure, which stretches across many different
economic sectors and has various social impacts. Tourism thus requires
a great deal of communication and cooperation among government,
business, and host communities. Because of this need for
communication and cooperation, many kinds of organizations,
including ones of voluntary membership, have been established to serve
travel and tourism-related interests. These organizations satisfy many
different purposes, but they all provide a means by which the various
sectors of the travel industry can articulate and pursue common goals.
Nowhere is this need for communication and cooperation more
necessary than in the international arena, where the structural
complexity of the industry is compounded by different national
priorities and policies. This chapter focuses on international tourism-
related organizations. Specifically, it discusses their roles and
functions, and examines the concerns, purposes, and activities of these
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14
The Role of International and
Regional Organizations in Tourism
Need for
communication
International
cooperation
organizations and how they play a vital role in facilitating international
tourism. Finally, it addresses some of the challenges facing these
organizations as tourism moves into the new century.
14.2 Types of Tourism Organizations
There are several ways of categorizing tourism and tourism-related
organizations. Perhaps the most useful typology is based on the
membership of the organization. The membership of an organization
provides the clearest indication of its purposes and objectives, since it
is the members interests that are being advanced by the organization.
Public Sector Organizations
As discussed earlier, tourism takes place within the context of governmental
structures that include laws, regulations, agreements, and other actions. The
issues that arise from this context require communication and cooperation
among governments. Public sector organizations provide a forum for
nations to address such issues. Public sector organizations are generally
composed of government representatives (such as ministers, department
heads, and directors) and tourism-related agencies.
Private Sector Organizations
In general, private sector organizations are comprised of businesses,
companies, and associations with common goals or interests. Such
organizations provide a forum for their members to identify and
discuses issues of importance to them and to their industries. Often, the
organization will address these issues by creating standards and
guidelines, increasing public awareness, lobbying governments, and
other such measures. In many cases, private sector organizations are
devoted to changing or repealing laws, regulations, and other legal
restrictions on their industries.
Regional Organizations
Because tourism is tied closely to geography, many tourism organizations
have been formed on the basis of regional proximity or affiliation. Such
organizations often are formed initially for the purpose of marketing and
increasing the travel markets awareness of their respective regions. The
rationale behind regional marketing is that potential visitors will be more
attracted by the collective attractions of a region rather than by an
individual destination, particularly when the region is not well known to
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Chapter 14: The Role of International and Regional Organizations in Tourism
Different
memberships and
their goals
Government
Business
Geographical
organizations
the visitor. Regional organizations also enable destinations to pool their
resources and mount more effective marketing campaigns. As regional
organizations evolve, they often expand their goals beyond marketing to
include such areas as travel facilitation and policy coordination.
14.3 Purposes and Objectives
of Tourism Organizations
Tourism businesses, destinations, and their governments face many
challenges. As tourism becomes increasingly sophisticated,
competitive, and global, the public and private sectors will be
compelled to keep abreast of the rapidly changing market. International
organizations provide one means for those involved in tourism to
accomplish this. Through organizations, the members can create
networks, pool resources, and benefit from efficiencies in scale and size
that might otherwise be unattainable by them individually. In addition,
organizations enable businesses and governments to address issues with
the greater power and credibility that derive from collective action.
Tourism organizations thus have many different agendas and purposes.
The section below examines major areas of concern to international
tourism organizations. Subsequently, these areas of concern will be
illustrated by discussions of several prominent tourism-related
organizations. The topic of trade agreements is also discussed, in light
of their importance to the future of international tourism.
14.3.1 Promotion of Industry Interests
Perhaps the most basic type of organization is an association of members
representing the same profession or industry segment. These
organizations are primarily oriented towards addressing issues that affect
their particular interests. The activities of such organizations include:
Monitoring laws, rules, and other such legal decisions that may
affect the industry.
Lobbying for or against such laws and rules, based on their potential
impacts.
Setting standards for various aspects of the industry in areas such as
operations, financial reporting, and statistics.
Appointing and regulating travel agents sale of international air tickets.
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Purposes and Objectives of Tourism Organizations
Advantages to
organizations
Areas of
concern
Professional and industry organizations are an important part of the
tourism industry. Examples of tourism-related professional
organizations include the Association of Independent Tour Operators,
the International Association of Convention and Visitors Bureaus, and
the World Association of Travel Agents.
14.3.2 Regional Marketing and Cooperation
For an industry like tourism, which is based on the movement of consumers
to specific geographical sites, regional collaboration can provide
competitive advantages especially in terms of marketing the region and its
destinations. As the discussion in Chapter 8 makes clear, a first and crucial
step for any destination is creating awareness. Regional organizations are
important vehicles for creating greater awareness of a destination area
because they enable destinations to participate in marketing campaigns that
are larger than they could afford individually, and to create a regional
identity which can appeal to a broader range of visitors.
14.3.3 Providing Data and Advice
One of the ways of improving the quality of international tourism is to
enable new destinations to utilize and benefit from the experiences of
more established ones and the expertise of industry professionals. This
is particularly important to destinations in environmentally or
culturally vulnerable areas, where mistakes can be costly and may
damage the reputation of the industry as a whole. The provision of data
and advice to both public and private interests constitutes a valuable
service of many organizations. Examples include:
Providing data to support sound planning for new development.
Conducting studies for planners, governments, and other parties.
Providing consultants to assist local governments in planning and
implementation.
The provision of consulting and advisory services is closely tied to the
need for tourism planning. As is discussed in Chapter 15, planning is a
vital element of tourism development.
14.3.4 Providing Direct Assistance
Tourism development can require capital investment in many different
areas, such as infrastructure improvements, human resources education
and training, and housing. These capital requirements are often beyond
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Chapter 14: The Role of International and Regional Organizations in Tourism
Creating regional
awareness
Benefiting from
experience
the means of local governments and industry. Nevertheless, it is
recognized that proper attention and resources need to given to these
areas because of their importance to the ability of the local population
to benefit from tourism development. An important function of several
organizations is to meet this need for funds for tourism-related projects.
14.3.5 Addressing Trade Issues
As was discussed in Chapter 2, the flow of tourists across national borders
will be an increasingly significant economic trend for most of the world
community. As international tourism grows in importance, so too will the
issues that are inherent in international trade. The world has long wrestled
with issues related to trade and commerce among nations. Because of the
close tie between economics and politics, international trade has always
been, and will continue to be, a highly political activity. International
tourism, as a major part of that trade, will be increasingly drawn into world
politics. The political and commercial relationships of the world community
will be a central theme of international tourism into the 21st century.
The importance to international tourism of trade and commercial
relations between nations cannot be overemphasized. Imagine, for
example, the effect of a significant reduction of airline flights due to a
dispute over air freight privileges, or a major change in laws regulating
the ownership of tourist accommodations. Trade relations affect not
only the flow of tourists, but the flow of capital that tourism generates.
14.3.6 Addressing Environmental
and Social Issues
As the tourism industry has grown and matured, larger issues of
importance and concern to the industry have loomed to the forefront.
Foremost among these are the following:
Tourisms potential as industry through which sustainable
development can be achieved.
The critical importance of environmental protection and
enhancement to the success of the industry.
The importance of peace and security issues to international
tourism, and the potential for tourism to advance greater
understanding and peace among nations.
The promotion of equal access for all travelers, including the
disabled, to the opportunities and benefits of travel.
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Purposes and Objectives of Tourism Organizations
Capital
investment
International
trade relations
Tourism organizations provide a forum where these concerns can be
discussed, and a collective voice and powerful vehicle by which actions
can be taken.
Recognizing the importance of the relationship between tourism and
the environment, the industry has taken a leadership position in
incorporating environmental priorities into its goals and practices. This
is particularly evident in the industrys emphasis on the concept of
sustainable development. The term sustainable development is used to
denote many different things, but generally it refers to strategies of
economic development that promote the long-term viability of the
destination in harmony with its natural and cultural environment.
Increasing sensitivity to social and cultural impacts, especially upon
traditional societies, is reflected in the concerns of many tourism
organizations. Some organizations have also made sustainability and
social awareness a central part of their overall mission and goals.
Among the numerous examples of the ways in which sustainablity
issues have been integrated into the goals of tourism organizations are
the following three:
The European Commission, as part of its Action Plan to Assist
Tourism, has provided financial support to several sustainable tourism
pilot projects and established the European Prize for Tourism and the
Environment, which defines environment to include cultural
resources as well. In 1995, the Commission produced The Role of the
Union in the Field of Tourism, which, among other topics, discussed
the EUs activities with regard to sustainable tourism.
Green Globe is one of several environmental initiatives begun by the
WTTC. The Green Globe program seeks to involve all sectors of the
global tourism industry in an effort to place environmental priorities
at the center of the business agendas of tourism-related companies.
In September 1995, WTO, WTTC, and the Earth Council released
Agenda 21 for the Travel and Tourism Industry, an action plan
specifically for the industry. Through the identification of specific
strategies and priority action areas, Agenda 21 for the Travel and
Tourism Industry constitutes a means of integrating sustainable
development principles, derived from the Rio Declaration of
Environment and Development, into the decision-making processes
of tourism professionals.
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Chapter 14: The Role of International and Regional Organizations in Tourism
Sustainable
development
Examples of
sustainability
14.4 Important Tourism and
Tourism-related Organizations
14.4.1 World Tourism Organization (WTO)
The largest and most significant governmental organization is the
World Tourism Organization (WTO), headquartered in Madrid,
Spain. Its membership is composed of 133 countries and territories, and
over 300 affiliate members from the public and private sectors. WTO is
an executing agency for the United Nations Development Program
(UNDP) of the United Nations, and is headed by a Secretary-General.
It is composed of three main bodies: the General Assembly, Executive
Council, and Regional Commissions representing the Americas,
Europe, Africa, Middle East, South Asia, and East Asia and the Pacific.
WTOs mission is to promote and develop tourism as a significant
means of fostering international peace and understanding, economic
development and international trade. To pursue its mission, WTO
engages in a wide range of activities specifically designed to assist
developing countries in the following areas:
Inventories of existing and potential tourism resources; national
tourism development master plans; formulation of policies, plans
and programs for development of domestic tourism.
Institutional framework of national tourism administrative structures;
tourism development corporations; legislation and regulations.
Evaluation of the impact of tourism on the national economy and on
the environment.
Statistics, forecasting, statistical analysis, market research, market
analysis; promotion, publicity and public relations.
Training; feasibility studies for tourism and hotel schools;
management development.
Planning and management of national, social and cultural goals of
tourism.
Area development, development of new tourist sites, and
development of particular tourism products.
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Important Tourism and Tourism-related Organizations
Structure of WTO
WTO activities
Planning, location, operation and improvement of tourist
accommodations; hotel classification systems.
Sources and methods of finance for tourism investments; pre-
investment studies, feasibility studies of investment projects,
cost/benefit analysis.
Safety of tourists and tourist facilities.
Examples of the kinds of actual projects through which WTO assists
developing countries are:
In Niger (1990-92): Establishment of a computer system to process
tourism statistics and the creation of a tourism database, and staff
training to support the new system.
In Uganda (1986-93): Preparation of tourism marketing strategies
and an inventory of tourist attractions; training of tourism officials
in planning and marketing; completion of a National Tourism Plan
for Uganda, a strategic action program, detailed planning for
priority tourism areas, cost/benefit analyses of development
projects, and an implementation procedures manual.
In Oman (1989-91): Preparation of a comprehensive long-range national
tourism development policy and 5-year action program, and training of
tourism officials in planning, marketing, and implementation.
14.4.2 Organization for Economic Cooperation
and Development (OECD)
The OECD was formed in 1961 by the United States, Canada, and 18
European nations; as of 1996, there were 27 member countries. Unlike
the WTO, the OECD is not exclusively concerned with tourism- related
issues, but with economic development in general. Its main purpose is
to facilitate world prosperity by helping nations create compatible and
integrated domestic policies and practices. Thus, the OECD focuses on
governmental policies and how they interact with those of other
countries. Research and analysis is carried out through its directorates
and services: Directorates of Agriculture; Development Cooperation;
Education, Employment and Social Policies; Enterprises; Environment;
Financial and Fiscal Matters; Science, Technology and Industry;
Statistics and Trade; and the Economics Department, International
Energy Agency, Public Management Service, and Territorial
Development Service. Until recently, there was also a Tourism
Directorate, but tourism issues are now taken up by other, appropriate
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Chapter 14: The Role of International and Regional Organizations in Tourism
General economic
development
directorates. OECDS Statistics Directorate compiles and analyzes data
in a manner that enables governments to assess and compare their
policies and practices from a cross-national perspective. The areas in
which statistics are collected include national accounts, labor force,
foreign trade, prices, output, and monetary and financial measures.
OECDs annual publication, Tourism Policy and International Tourism
in OECD Countries, contains important statistical analyses of
international tourism. The OECD is based in Paris, France.
14.4.3 International Civil Aviation
Organization (ICAO)
The ICAO is an inter-governmental body devoted to cooperation in
setting international aviation standards. The ICAO was established in
1944 by 52 nations, or Contracting States, through the signing of the
Convention on International Civil Aviation. As of 1996, ICAO
membership stood at over 180 Contracting States. In 1947, ICAO
became a specialized agency of the United Nations through the
Economic and Social Council. As is discussed in Chapter 13, air
transportation is a unique industry by virtue of its direct and extensive
involvement with governments, air safety concerns, equipment
standards, training and political issues.
The ICAOs stated purpose is that international civil aviation may be
developed in a safe and orderly manner and that international air
transport services may be established on the basis of equality of
opportunity and operated soundly and economically (International
Civil Aviation Organization, 1996). ICAOs main areas of activity are:
Establishing international standards, recommended practices and
procedures covering the technical fields of aviation.
Developing a satellite-based system concept to meet the future
communications, navigation, surveillance/air traffic management
(CNS/ATM) needs of civil aviation.
Regional planning for nine distinct regions.
Facilitating air travel by reducing formalities and obstacles.
Providing advice and assistance to nations in planning safe and
economical aviation systems.
Collecting statistics on airline accidents.
Promoting civil aviation in developing countries.
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Important Tourism and Tourism-related Organizations
Aviation
organization's
purpose and
activities
Facilitating the adoption of international air law instruments and the
promotion of their acceptance.
14.4.4 International Air Transport Association (IATA)
IATA was formed in 1945 with 57 members from 31 nations, mainly
representing Europe and North America. Since then, the airline industry
has experienced tremendous growth, and as of 1995 IATA membership
numbered 230 members from 130 nations worldwide. IATAs mission is
to represent and serve the airline industry. Its goals include:
Promoting safe, reliable and secure air service.
Achieving recognition of the importance of a healthy air transport
industry to world-wide social and economic development.
Assisting the industry to achieve adequate levels of profitability.
Providing high quality, value for money, industry-required products
and services that meet the needs of the customer.
Collecting statistics on airline accidents.
Developing cost-effective, environmentally-friendly standards and
procedures to facilitate the operation of international air transport.
Identifying and articulating common industry positions and
supporting the resolution of key industry issues.
Appointing and regulating travel agents sale of international
airtickets.
Among its efforts to facilitate air travel is IATAs work to create greater
efficiency in various logistical aspects of air travel, such as tickets,
baggage checks, ground handling, and electronic data interchange. In
conjunction with governments following the establishment of bilateral
agreements, IATA also reviews air travel rates through IATA traffic
conferences.
14.4.5 World Travel and Tourism Council (WTTC)
The WTTC is comprised of executives from leading international
companies in the airline, hotel, transportation, and travel agency
industries and is located in Brussels, Belgium. As a private-sector
organization, several of the WTTCs primary objectives are concerned
with making changes to the public sector, including:
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Chapter 14: The Role of International and Regional Organizations in Tourism
Airline industry
Improving recognition of tourisms importance.
Eliminating barriers (such as trade restrictions and airline
agreements) that restrict the growth of tourism.
14.4.6 Pacific Asia Travel Association (PATA)
and Other Regional Organizations
Founded in 1951 to encourage travel to the region, PATA numbers over
2,000 members representing the public and private sectors of the travel
industry. PATAs central mission is defined in terms of a distinct region:
to contribute to the growth, value and quality of travel and tourism to
and within the Pacific-Asia area, an area which it defines as extending
from North America (including Mexico) westward across the Pacific to
South Asia and from Pole to Pole.
PATA has been an exemplar of regional tourism organizations. PATAs
primary objective and its strategies for pursuing that objective provide
a clear picture of the range of activities that a regional organization can
pursue on behalf of its membership:
To encourage and assist in the development of travel industries
throughout the Pacific-Asia area in a manner which recognizes the
urgent importance to practice an environmental ethic that supports
responsible conservation and restoration of the Pacific Asias unique
combination of natural, social, and cultural resources, by:
a) Providing an instrument for close collaboration among the various
territories, countries, and commercial interests concerned;
b) Augmenting and assisting local promotional and development
efforts of the members and encouraging sources of capital for
tourist accommodation and recreational projects;
c) Providing a liaison between the travel and transportation industries
and all members;
d) Carrying out advertising, promotional, and publicity measures
calculated to focus the attention of the travel industry and traveling
public upon Pacific Asia as one of the worlds outstanding
destination areas;
e) Encouraging the development of adequate passenger transportation
services and facilities to and within Pacific Asia;
f) Carrying out statistical and research work relating to travel trends
and tourism development, and
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Important Tourism and Tourism-related Organizations
Encouraging
regional travel
PATA's purpose
and activities
g) Negotiating with governments, whether directly or through the
appropriate bodies, for an easing of monetary regulations and travel
formalities tending to be barriers to tourist travel (Pacific Asia
Travel Association, 1995, p. 3).
To support these strategies, PATA provides its members with a range of
services, including:
Marketing and promotion, through an annual marketing convention,
marketing conferences, and fairs and sales missions.
Product development, by providing member expertise to local and
regional government entities to assist them in improving the quality
of their products and services.
Research and information services, through a research center which
generates a variety of reports, studies, and forecasts.
Human resource development, through work on jobs standards,
distance learning, and train-the-trainer workshops.
Communication and public relations services.
Membership development.
Other examples of regional tourism organizations include the
Caribbean Tourism Organization (CTO), Tourism Council of the South
Pacific (TCSP), and the ASEAN (Association of Southeast Asian
Nations) Tourism Association (ASEANTA). The CTO is comprised of
national tourism administrations, while ASEANTA membership is
based on ASEAN, an established regional governmental organization.
Examples of major regional organizations not exclusively devoted to
tourism, but whose actions with respect to the industry are important
to its member nations, are the European Union (EU) and the
Association of Southeast Asian Nations (ASEAN). Formed in 1993
by the enactment of the Treaty of European Union, or Maastricht
Treaty, the EU represents the culmination of efforts over three decades
to achieve greater economic integration. The EU provides significant
funds to finance tourism-related investment and infrastructure
projects, and to projects that upgrade cultural and historical resources.
The funds were directed particularly towards tourism development in
regions that are underdeveloped, suffering from economic decline, or
concerned with the development of rural areas.
ASEAN was founded in 1967 in Bangkok by the countries of Indonesia,
Singapore, Malaysia, Philippines and Thailand. These original member
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Chapter 14: The Role of International and Regional Organizations in Tourism
PATA's services
Other regional
organizations
EU formation
and funding
countries were subsequently joined by Brunei (1984) and Vietnam
(1995). One of ASEANs objectives is the promotion of economic,
social, and cultural development of the Southeast-Asian region through
cooperative programs. Tourism, as an increasingly important economic
activity for this region, represents an area of importance for the
organization. ASEAN holds both formal and informal meetings of the
tourism ministers of its member countries, which address the following
types of issues: facilitating inter-ASEAN travel through special
immigration procedures at airports; increasing direct air links between
destinations; facilitating leisure water travel; promoting conventions in
ASEAN destinations; and improving tourism training programs.
14.4.7 International Bank for Reconstruction
and Development (IBRD)
The best-known international organization involved in direct funding
for tourism-related projects is the IBRD or, as it is more commonly
called, the World Bank. The World Bank was established in 1945 and
is owned by the governments of 174 countries. It is a specialized
agency of the United Nations. In general, the World Bank makes loans
for tourism-related infrastructure projects rather than directly to
tourism projects. Loan recipients are generally countries with
developing economies (World Tourism Organization, 1993a).
14.4.8 International Trade in Services and GATS
Economic relations among countries have historically been tied to
questions of national strength, pride, and prerogative. Different trade
theories and practices have been adopted throughout history by nations as
a means to greater national strength. Protectionist theories and practices
basically attempt to protect a nations economy by restricting the ability
of foreign goods and services to compete in the domestic market. Thus,
for example, the steel industry of protectionist country A can be protected
from the steel industry of country B by restricting the importation of Bs
steel, by mandating that manufacturers in country A use a minimum
percentage of domestic steel, and by a variety of other such measures.
What this means in practice, of course, is that country B will very likely
impose restrictive measures on certain products that country A would like
to export. In this way, protectionist strategies are inherently double-edged
in that they invite similar actions by other countries.
Proponents of free-trade theories and practices have noted this fundamental
problem of protectionism, and argue instead that the free flow of trade
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Important Tourism and Tourism-related Organizations
ASEAN formation
and objectives
A direct-funding
organization
Restricting trade
competition
ultimately benefits all nations. To continue the example cited above, while
country A may indeed experience a decline in its steel industry in a free-
trade scenario, a commensurate increase in its exports to country B (paid for
by the earnings that B receives from selling its steel to A) will offset that
decline and, in the long run, result in greater growth for both countries. Free-
trade advocates note that each countrydue to its natural resources, costs of
labor and capital, and other factorscan be efficient only in certain areas.
Because of this fact, free trade and open markets will enable the
international economic system as a whole to benefit from these efficiencies.
Country B may be able to produce steel for half the cost of country A, but
As citizens will only be able to benefit from this efficiencythey can only
have the benefit of paying less for steel and spending more on other
thingsif A and B are in an open trading relationship. One can quickly see
how restrictive or free-trade practices will directly affect the cost of doing
business in tourism, ranging from the cost of hotel construction to the cost
of producing and distributing marketing material.
Commercial treaties are formal agreements that establish rights and
conditions of trade relations between the nations signing the treaty.
These treaties cover areas such as the property rights of foreign
nationals, taxation of foreign investments, debts owed to foreign
entities, port regulations, commercial relations during war, and the
jurisdiction of consuls. Nations that have significant economic
relationships with each other often establish trade agreements, which
are less formal and permanent than commercial treaties. Trade
agreements cover such areas as tariffs, customs, copyrights,
commercial laws and arbitration, and restrictions on specific products.
The most important trade agreement of modern times is the General
Agreement on Tariffs and Trade (GATT). GATT grew out of a
recognition by many countries of the problems of protectionist policies,
especially those that restricted trade during the period between the First
and Second World Wars. GATT was signed in October 1947 by 23
countries, with its administration based in Geneva. As a multilateral trade
agreement, GATT is dedicated to reducing tariffs and other obstacles to
trade. Throughout its history, several rounds or trade conferences have
been held to address various issues and problems. The latest round, begun
in Uruguay in 1986, culminated in April 1994 with the dissolution of
GATT and its reorganization as the World Trade Organization.
The significance of the Uruguay Round for tourism was the formation of
the General Agreement on Trade in Services (GATS). Unlike GATT,
which did not address trade in services, GATS is specifically dedicated
to the issues and problems of such trade, including those relating to
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Chapter 14: The Role of International and Regional Organizations in Tourism
Benefits of
free trade
International
trade relations
Important
multilateral trade
agreement
tourism. GATS took effect on January 1, 1995, and is concerned with
governmental measures (such as laws, regulations, and administrative
actions) that affect services supplied in the following ways:
Services supplied from one territory to another (such as tour
operations and travel assistance).
Services supplied in the territory of one party to the consumers of
any other (such as to international visitors).
Services supplied through the presence of commercial entities of
one party in the territory of another (such as the establishment of a
branch office abroad).
Services provided by nationals of one party in the territory of
another (such as by consultants) (WTO, 1996b).
The ultimate goal of GATS is for its signatory members to achieve
full non-discrimination with respect to services trade among each
other. Through GATS, then, there is a formal, global vehicle for
pursuing the reduction of barriers and increased liberalization of
trade in services. GATS represents a significant advance in
facilitating international tourism.
An important aspect of GATS is that its Services Sectoral Classification
List includes a section for Tourism and Travel Related Services. In
contrast to the International Standard Classification of Industries, which
did not contain such a section, GATS addresses the key issue of statistical
recognition of the tourist industry. However, because tourist services are
diverse, the new section includes only the following subclasses: hotels
and restaurants (including catering), travel agencies and tour operators
services, tourist guide services, and other. Business areas such as
transportation, hotel construction, car rentals, and computerized
reservations systems are located under other headings (WTO, 1995e).
14.5 Challenges for Tourism Organizations
Despite the importance of tourism in the world economy, and its
growth prospects into the next century, tourism organizations face
many challenges.
Financial viability. The activities of voluntary tourism organizations
require substantial funding. However, when companies or public
agencies face financial constraints, the payment of dues to a voluntary
organization may seem to be an unnecessary expense. Organizations
thus face a constant challenge in retaining their dues-paying members.
Meeting this challenge requires that organizations continually
317
Challenges for Tourism Organizations
Concerns and
goals of GATS
Statistical
recognition of
tourism industry
demonstrate to their members the benefits of membership. One way
that organizations have been meeting this challenge is by reducing
their reliance on membership dues by utilizing other funding sources,
such as the sale of research publications.
Meeting the needs of a diverse membership. To be successful, an
organization must ensure that its mission reflects the needs and
desires of its membership. Given the dynamic and competitive
nature of the tourism industry, these needs are likely to change
quickly from time to time in response to the current industry
environment. Membership needs also change as the members
themselves change and grow. However, when organizations adapt
too quickly in the attempt to be relevant to the immediate needs of
their membership, often the result is one of structural destabilization
and loss of focus on long term strategies.
Duplication of efforts. In an effort to serve a diverse group of
members whose needs may encompass many different areas of the
industry, an individual organization will likely adopt multiple
objectives or programs of work. Inevitably organizations then begin
to duplicate each others efforts in the attempt to be as all-
encompassing as possible. For the members, such duplication means
that their dues may be buying similar services from different
organizations. Thus, tourism organizations face great challenges in
trying to maintain a close fit between their central missions,
objectives and activities and the needs of their membership.
SUMMARY
As tourism expands, so too does the need for communication and
cooperation among the many private and public interests that are
involved in the industry. Tourism organizationscomprised of public
sector members, private sector members, or bothfulfill this important
role. They enable an industry that lacks broad-based recognition and
support to pursue common goals through collective action.
Tourism organizations such as the WTO, WTTC, PATA, CTA and many
others play a valuable and vital role in world travel. They do this by
serving not only the direct needs of their members, but by addressing the
long-term, broader issues such as peace and environmental sustenance in
the interest of the entire industry and the world community.
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DISCUSSION QUESTIONS
1. What are the three major types of international tourism
organizations presented in this chapter?
2. What are some of the different purposes and objectives of
international tourism organizations?
3. What is the role and importance of the WTO?
4. What are some of the challenges that will face tourism
organizations in the future?
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Summary
Chapter 15
Tourism Planning and Destination Development
Learning objectives
To understand why tourism planning is important and necessary.
To understand the forces that shape the tourism planning process.
To identify the major elements of a tourism plan.
To understand the concept of master or comprehensive planning and its
value for tourism development.
Key terms and concepts
action plan
business and legal environment
destination planning
economic and financial analysis
impact analysis
master plan
planning
supply and demand analysis
15.1 Introduction
As the economic bases of many countries are increasingly challenged
by world markets and technology, many governments see tourism as a
major opportunity for economic development and a tool for creating a
better community. The reliance on tourism as a tool for development is
based on such evidence as tourisms effectiveness as an engine of
employment, a means of wealth redistribution, and its potential in
restoring blighted areas in a community. Communities and regions
vary widely in their economic development life cycle. Some are
thriving, while others are attempting to reverse the process of
community and economic decline. In these latter instances, the
physical environment of a community may be deteriorating and
community spirit low; tourism therefore becomes a potentially
attractive replacement for businesses that have shut down or moved
away. Unfortunately, a great many communities have pursued tourism
development either without planning or without considering larger
planning or community economic development processes.
This chapter will examine tourism planning approaches and discuss the
role of tourism planning within the broader context of community
economic development. Planning seeks to simultaneously prevent
negative impacts and meet the goals and objectives of a community. The
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Tourism Planning and
Destination Development
Necessity of
planning
Preventing
negative impacts
and meeting goals
planning process discussed here is concerned with ensuring sustainable
tourism development that respects local populations, creates
appropriate employment, maintains the natural environment, and
delivers a quality visitor experience. These sustainable development
goals have made the planning process far more complex than earlier
planning efforts, which were driven primarily by economic imperatives.
This chapter also discusses the process and essential aspects of
planning a destination. It looks at the elements of a plan and the
context of creating one. Destination planning involves many parties
with different perspectives, including governmental bodies and private
investors and developers. In addition, governments are increasingly
making an effort to ensure public participation through involving local
communities or their representatives in planning. Given the diverse
interests of all these parties, the range of different destinations, and the
many types of possible development, the subject of planning is quite
extensive. Because of the comprehensive nature of destination
planning, there will be numerous occasions throughout this chapter for
the reader to refer to other chapters in the text. In this way, the reader
can better understand how the actual process of planning must
similarly take into account the relationships among all elements of a
destination.
15.2 The Forms of Tourism Planning
In general terms, planning is organizing the future to achieve certain
objectives (Inskeep, 1991, p. 25). However, there are many different
forms of planning, including:
Economic development planning, which is primarily concerned
with facilitating the development of various industries and sectors.
Land use planning, which structures the uses of land through tools
such as zoning codes.
Infrastructure planning, which deals with roads, airports, and
utilities such as power, water, and sewer.
Social services planning, which deals with issues such as
employment, public health, education, and social welfare.
Safety planning, which addresses internal security problems, crime
control, risk coverage, and special provisions for tourists who
require speedy remedies.
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Planning a
destination
15.2.1 Tourism and Economic Development
Tourism planning can be viewed as a form of economic development
planning that is directed towards tourism-related objectives. Examples
of tourism planning include:
A plan to increase the foreign exchange earnings of a nation by
encouraging the growth of tourism.
A plan to designate specific areas for the development of resorts.
A plan to improve local employment through the tourism industry.
The plans listed above generally involve public resources and
objectives, such as the creation of land use controls, the construction of
a network of highways, and the provision of affordable housing to
residents. Consequently, most planning is done by the government. At
the national level, government planning may take place within the
individual ministries or departments that comprise the government,
such as a ministry of tourism, or it may be assumed by a centralized
planning department. Government planning is performed both by staff
planners and by private consultants and specialists who are contracted
to consider policy implications and the public interest. Private sector
planning activities generally occur at the investment level with
specialists in various aspects of product development, building,
finance, marketing, management and operations providing technical
information and expertise to the planning process.
The research and study involved in a tourism plan can require the
participation of many different specialists and professionals. Overall
responsibility for the planning process generally is given to a planning
specialist. Depending on the scope of the plan, the planner will use and
coordinate the work of economists, marketing specialists, transportation
specialists, ecologists or environmental specialists, sociologists,
archaeologists, human resources specialists, and architects and engineers.
Participation by such professionals can be particularly extensive in the
production of master or comprehensive plans (see discussion below).
The end product of planning is generally a formal document, or plan,
that is intended to guide further activity. A plan is often targeted at
persons involved in the policy making process, such as legislators and
administrators. Such a plan might include model legislation,
regulations, and other types of policy directives. A plan can also be
designed to guide private sector activity such as development and
financing with timetables or specific land use designations.
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The Forms of Tourism Planning
Public and
private
planning
Planning
specialist and
other
professionals
Plans
As discussed in Chapter 14, the WTO provides support and personnel
to assist the tourism planning efforts of nations. This assistance can be
both direct (as in the use of planners and other professionals to conduct
the plans and studies) or indirect (by training personnel to conduct their
own planning). Examples include:
A five-year promotional plan for Honduras.
A tourism master plan and six-year development program for Ethiopia.
Training for tourism officials in Uganda in techniques of planning
and marketing.
Training for staff of the Rwandan national tourism administration
and recommendations for legislative and regulatory initiatives.
Specific, medium-term programs and policies in various tourism-
related areas for incorporation into national and regional economic
development plans in the Philippines.
Plans for the Sri Lankan Convention Bureau in the areas of membership
development, financing, marketing, and manpower structure.
Training for tourism officials in Oman to effectively implement
tourism plans.
15.2.2 Tourism Master Planning
The term master plan or comprehensive master plan has been
used extensively in reference to tourism planning. In general, it defines
a strategic plan that integrates all aspects of tourism development,
including human resources, environmental impacts, and social and
cultural impacts. The master plan considers the long term implications of
decisions and their risk and return to a community or destination.
Depending on the nature of the tourism master plan, whether it is one
intended for tourism development in general or whether it is one whose
purpose is more specific (such as to guide the physical development of
a new resort area), the topics and levels of research will vary widely. All
master plans are designed to cover the span of a development period
(e.g., a five-year plan, a ten-year plan or other time frame) or an
investment period when land acquisition, construction, operation and
financing are laid out as critical points for guiding decisions at each step.
15.3 The Need for Tourism Planning
Tourism planning has assumed a greater role in tourism development
as governments recognize not only that tourism generates a wide
spectrum of impacts, but also its potential for social and cultural
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Chapter 15: Tourism Planning and Destination Development
WTO assistance
Long-term
development
expression and revitalization. As more governments expand their goals
and expectations of tourism development beyond its economic
benefits, planning becomes more important to the success of achieving
those goals and meeting those expectations.
It is not only public goals and expectations that have brought prominence
to planning, however. As the industry itself grows and matures, the travel
market is becoming more sophisticated and discerning. This, in turn,
places greater pressure upon developers to use planning as a means of
creating quality destinations. It is no longer sufficient to simply build
attractions and accommodations in todays highly competitive market.
As the number of destinations grows and visitors become more selective
about choosing locations that offer quality and value, the market will
shun poorly planned destinations. Thus, both public and private interests
are converging towards a position that sees tourism planning as essential.
Critics of planning are skeptical about its effectiveness and point to the
numerous plans that were never consulted or used. In many cases, this
skepticism derives from older planning practices which tended to focus on
developing regulatory procedures instead of creating suitable mechanisms
for achieving goals. In addition, planning tools such as master plans and
land development control systems centered on zoning and development
incentive systems. These tools were used without appropriate resident
participation or recognition of the complexity of the tourism setting and
the needs of the host community. In some cases, master plans attempted
to freeze a destination at a particular time frame without taking into
account the dynamic nature of economic and social systems. To avoid
these problems, more dynamic and participative planning approaches are
being used to achieve sustainable tourism development.
Despite the difficulties of and resistance to planning faced by tourism
planners, there is widespread agreement that tourism planning serves a
valuable purpose by addressing the following issues:
The need to have a common vision, direction and commitment for
tourism established through a participative process of involving
many stakeholders.
Tourisms sociocultural and environmental impacts, and the need for
a long-term perspective in assessing those impacts.
Resource problems faced by communities that may not have the political
framework or trained labor force to create a service based industry.
Destination survival in an increasingly competitive market, and the
need to respond to changes in the travel market.
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The Need for Tourism Planning
Importance to
success
Skepticism due to
older planning
methods
Planning issues
addressed
The rapid pace of change in the tourism industry in areas such as
transportation and communications.
The need to provide the private sector, especially those parties
providing investment funds, with a certain level of stability and
predictability in the progress of the overall development.
15.4 Levels of Tourism Planning
in the Public Sector
Tourism planning occurs at different levels within the government. The
issues and concerns faced by tourism planners vary with the level of the
planning activity. Generally, broader issues are treated at the national level,
while local planning is directed towards more specific locations and issues.
At the national level, for example, the goal might be to create a national
tourism policy statement which designates broad regions or areas for future
development, while local planning may involve building design standards
for a specific resort area. In some cases there is competition among various
levels of government for control over tourism development, and conflict
between local planning and regional and national tourism goals. Although
there are numerous international organizations concerned with tourism (as
discussed in Chapter 14), planning activity tends to be country or
community specific, mainly because it is at that level where sovereignty
rights and the ability to take direct action lie.
15.4.1 National Planning
A primary function of national tourism planning is the development
and administration of national tourism policies. As is discussed in
greater detail in Chapter 13, tourism policy plays a key role in guiding
tourism development according to the needs of the host community
and nation. Creating a structure for the administration of policy is also
a critical aspect of national-level planning. Other important tasks
usually handled at the national level include: physical planning that
identifies and designates major tourist attractions, regions for tourism
development, and transportation lines; creating national standards in
areas such as health, safety, and employment; and conducting research,
statistical analysis, and forecasting.
15.4.2 Local Planning
In general, as tourism planning progresses towards actual
implementation, the lower levels of government become increasingly
involved. This may involve provincial or state governments at a
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Chapter 15: Tourism Planning and Destination Development
Levels of public
planning
Policies and
infrastructure
secondary level and local municipal governments at the lowest levels.
However, it is important to note that there is often a close relationship
between the levels of government. For example, the local government
may be charged with the responsibility of imposing on tourism
employers certain employee health and safety rules that have been
formed at the national level. Examples of areas usually associated with
local tourism planning include the following:
Creating and enforcing zoning policies, including site planning and
the design of buildings and landscaping.
Establishing and enforcing environmental regulations.
Facilitating the participation of all interest groups in tourism.
Local infrastructure planning, including energy requirements and
allocation to tourism.
Providing public access to use amenities which are privately built.
Providing services for visitors and residents.
Education, training, and other human resources services.
Financing tourism development.
Marketing and promotion of the local destination.
Taxation issues.
In many cases the degree of government involvement during the
planning process will change over time. For example, when a local
government determines a master planned area and acts as the main
developer, its initial involvement will be significant and controlling.
The municipality or state will hire the architects, engineers, and other
such consultants and direct their work. As the project progresses, the
government gradually withdraws into the background and encourages
private sector companies to take the lead in arranging financing, hiring
consultants, and ultimately building and operating the facilities.
15.4.3 Destination Planning
The term destination planning is generally used to refer to planning
for a geographical region that possesses sufficient facilities, attractions,
infrastructure and work force to attract visitors (Gunn, 1994, p. 27).
Thus, depending on the nature of tourism development and the area in
question, a destination may be regional in scope, encompassing many
resort areas and communities, or it may be local. The term
development project area can also be used to denote a destination.
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Levels of Tourism Planning in the Public Sector
Implementation
of plan
Shifts in
involvement
Development
project area
For example, the South Antalya tourism development project area in
Turkey encompasses an area that includes seven villages and three
ancient cities (Inskeep & World Tourism Organization, 1991).
Whatever the size of the destination, its key characteristic is that it
represents an integrated area, including the actual site of the tourism
accommodations, visitor attractions, resident communities that provide
employment, and the transportation links among them. Thus, in
addition to the planning of a specific resort or resort area, destination
planning also involves consideration of issues such as transportation,
water and sewer infrastructure, and human resources development.
15.5 Actors Involved in
the Planning Process
Tourism planning is a challenging endeavor, considering the diversity
of organizations and individuals that act as service providers of the
tourism experience, and the complexity of the tourism system. In
addition, there are differing levels of control over tourism related
resources, many plans and planning processes in the private and public
sectors, and public and common goods that are shared by residents and
tourists that need to be managed fairly. To address these factors,
individuals and groups who have a key stake in the tourism
domainthose who are impacted by, or have the ability to influence the
direction and outcomes, of tourismare involved in the planning and
implementation of tourism actions and activities. Some of the actors
who are included in the planning process include:
Residents of the host destination area.
Environmental advocacy groups.
Tourism-related and non-tourism-related businesses.
Politicians and other elected officials.
Major business interest and lobby groups.
Labor unions and other employee representatives.
Government officials involved with tourism regulation and
development.
Each of these actors brings a particular set of needs, knowledge, and
perspectives to the decision making table. Their involvement at an
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Chapter 15: Tourism Planning and Destination Development
Key actors
early stage in the process is important in order to generate support and
commitment to the process, and thus reduce the chances of later
resistance by an actor who has not been involved.
15.6 Organizing the Planning and
Development Process
An enormous amount of data and analysis goes into the planning and
development process. While there are many ways of organizing the
process, most planning generally adheres to the following basic steps:
Defining the Goals and Objectives of Development - This first step
is important because the decisions made at this point guide the rest
of the planning process. Current planning practice favors the
inclusion of a broad spectrum of interests during this step of the
process. The following questions are discussed and answered in
order for the planning process to go forward:
- Why do we want to develop tourism?
- What kinds of benefits do we expect from tourism?
- What kind of tourism and visitor do we want?
- Do we want to place limits on tourism growth?
- What is our time frame for development?
Gathering Relevant Data - In this phase, research, surveys, and other
methods of fact-finding are pursued in order to accumulate all of the
relevant data mentioned above.
Analyzing the Data - The data is then organized and analyzed and
basic recommendations and parameters are set. For example, the
analysis may show that any interference with shoreline access will
likely be met with resistance by local residents. A recommendation
can then be drafted which guides the site planning to ensure that
such interference will not occur.
Preliminary Plan Draft, Review, and Revision - On the basis of the
data and analysis, a preliminary plan is drafted. The plan will
include site (land use) plans, development schedules, design
sketches, and financial projections. The preliminary plan then goes
through the process of review and revision, as it is further refined.
Often, there will be opportunities for public review at this point.
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Organizing the Planning and Development Process
Need for
involvement
Planning steps
Finalizing the Plan, Implementation, and Monitoring - After all of
the revisions have been incorporated and approved, the final plan is
drafted and becomes the working document guiding the
implementation of the plan. The final plan will include all of the
detail necessary to provide guidance to the developers.
15.7 Elements of a Tourism Plan
Destination planning can vary from one project to another, due to factors
such as the type of destination being developed, its current level of
development, and the theory or style of planning being used. Regardless
of the exact planning style adopted, a destination plan will generally
include analysis of the following areas: tourism demand, tourism supply,
tourism impacts, economic and financial issues, and an action plan.
15.7.1 Demand Analysis
Demand analysis examines the existing and intended visitor markets of
the destination. It also includes regional and global travel patterns and
trends, since these will also affect the ability and willingness of people
to visit the destination. The basic premise of demand analysis is that
the destination must be planned with the visitor in mind, and that it is
no longer prudent to follow a supplier mentally, which takes a build it
and they will come approach.
Market Analysis
Increasing competition among destinations requires knowledge of
changing trends in the visitor market. A destination that offers sun, sea,
and surf now has a multitude of competitors, as do other types of
destinations. Differentiating one tourism destination from another
requires greater and more sophisticated marketing information and
techniques to ensure a proper fit between what is offered and what
visitors want. Market analysis is therefore crucial for planners and
developers. Two key components of a market analysis include:
- Tourist arrivals and characteristics, including information on a
visitors place of origin, demographic and socioeconomic profile,
travel itinerary, purpose of visit, length of stay, and spending
patterns. These are discussed in Chapter 7.
- Travel patterns and trends, which should place the destination and
its visitor profile within the context of general travel patterns and
trends which are discussed in Chapter 2. An assessment of the broad
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Chapter 15: Tourism Planning and Destination Development
Examination of
intended visitor
markets
Matching visitor
with destination
market includes historical travel patterns, recent growth markets,
and changes in the industry that may have a significant impact (such
as recent technological innovations which have affected how
travelers make their reservations).
15.7.2 Supply Analysis
Supply analysis examines the destination itselfits attractions,
accommodations, and facilities. The goal of a supply analysis is to have
a complete understanding of what visitors will be presented with from
the moment they enter the destination area. Most importantly, this will
involve a close look at what the destination intends to market as its
attractions. In addition, however, it will also be necessary to examine
areas such as transportation networks, infrastructure, and manpower,
since these have a direct and large impact on the quality of the visitor
experience. Supply analysis can also include a discussion of the
business and political-legal environment of the destination area.
Site Selection
If the purpose of the destination plan is to guide new development in
an undeveloped area, a supply analysis would be oriented to the
planned, rather than the existing, tourism product. Thus, rather than an
assessment of existing hotel accommodations (which may be limited or
nonexistent), such an analysis might look at various locations for the
proposed hotels and commercial buildings. The following are criteria
used to assess potential integrated hotel resorts:
- Proximity of the site to tourist attraction features.
- Desirability of the sites micro-climate.
- Attractiveness of the physical environment of the site.
- Availability of land that can be feasibly developed.
- Access to major tourist gateways and regional attractions.
- Adequate transportation and utilities infrastructure.
- Absence of environmentally vulnerable areas at the site.
- Receptivity and feelings of the resident population to the industry.
- Availability of a local work force and sufficient housing.
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Elements of a Tourism Plan
Examination of
the destination
Assessment of
planned
development
Inventory of Existing Attractions
An attraction can be defined as a facility or location that is planned
and managed for visitor interest, activity, and enjoyment (Gunn, 1994,
p. 58). The purpose of this element is to make a comprehensive list of
all of the attractions that the destination currently offers its visitors.
The inventory would examine the types of attractions, their location
and accessibility, their condition, and any other aspects that might be
relevant to visitors. Attractions can be organized in a number of
different ways, including ownership (public vs. private) and the type of
visitor the attraction appeals to.
Inventory of Facilities, Services and Infrastructure
Although tourists are generally not attracted to a destination by its
supporting facilities and services, they are nevertheless crucial to the
overall quality of the visitor experience. The inventory notes specific
details about support facilities and services, such as the number and
location of places to make currency exchanges, in order to provide
planners and developers with a complete picture of the destinations
current capabilities. The quality and scale of support facilities and
services is closely related to projections of the destinations capacity, or
maximum volume of visitors its facilities and infrastructure can
handle. Capacity problems often occur where the development of
accommodations outpaces transportation and infrastructure
improvements. With detailed information from the inventory, planners
can avoid such problems by properly scheduling development phases.
Major components of an inventory include:
- Tourist facilities and services. These include entry and exit facilities
and services such as airports, baggage handling, customs, and
check-in procedures, the availability and quality of
accommodations, dining, entertainment and shopping amenities and
the destinations ability to provide for the safety and security of its
visitors, including the availability of medical facilities.
- Infrastructure. These are the facilities generally owned by the
government or utility company that support tourism development and
activities. There are two important characteristics of infrastructure:
first, they tend to be large and capital-intensive, and second, they
support both the visitor and resident communities. Because of these
two factors infrastructure development raises difficult questions, one
of which is how to allocate the cost of an infrastructure project
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Chapter 15: Tourism Planning and Destination Development
Assessing site's
current
capabilities
Supporting both
visitors and
residents
between public and private funds. Elements that are generally covered
in an analysis of infrastructure include facilities and services such as
airports, harbors, roads, public transportation, water supply, power,
sewage, solid waste disposal, and telecommunications.
Business and Legal Environment
The business and legal environment of a destination can have a
significant impact on the development process. For this reason, there is a
discussion of topics such as the existing structure of government, the
existence and functions of any government tourism organizations, and
current laws, policies, and regulations as they apply to tourism,
development, and investment. In many destinations, a basic issue is the
existing system of property rights. Can foreign entities own property? If
not, how will ownership and control issues be addressed? From the
private sectors perspective, an important factor is the process by which a
developer obtains all the necessary approvals and permits to start
construction, and the approval process for businesses to start operations.
Local politics can be a major factor in these permitting processes. Finally,
the tax laws of the destination will have an impact on the financial aspects
of the project. For example, many destinations place a higher tax burden
on visitors by imposing hotel taxes and other types of additional fees.
15.7.3 Tourism Impact Analysis
Anticipating the impacts of development is one of the most crucial
functions of a tourism plan. An assessment of the environmental impacts
of development has become a standard and, in many places, required part
of the planning process. Equally important is a consideration of the
sociocultural impacts (which was discussed in Chapter 11) of the
development. These impacts are more difficult to anticipate and quantify,
but the experience of many destinations has shown that the effects of
tourism on a societys culture and people play a vital role in its success.
For many countries and areas, tourism constitutes one of the most
environmentally friendly industries that can be realistically achieved.
Tourism does not require the kinds of activities that have traditionally
been associated with environmental degradation, such as large-scale
excavation (mining and extraction), release of pollutants into the water
and air (refining, manufacturing), or the use of pesticides and
herbicides (agriculture). Like much of the service sector it is normally
considered a part of, tourism is a relatively clean industry in terms of
its environmental impacts.
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Elements of a Tourism Plan
Laws, policies,
permits and
approvals
Environmental
and cultural
impacts
"Clean" industry
Nevertheless, tourism has definite and measurable impacts. These
impacts are perhaps even more significant when one considers that
much of tourisms appeal relies on the quality of the environment itself.
The goal of sustainable development, which is discussed in Chapter 12,
demands that destinations place a high priority on the environment.
There has also been a trend toward expanding the definition of what
constitutes an environmental impact. The following list reflects the
areas covered in an environmental impact statement for a proposed
convention center development:
- Project description: physical characteristics; estimated cost;
construction schedule.
- Physical environment impacts: region; climate; existing land uses;
project site; geology and topography; soils; flooding; water quality;
hazardous materials and waste; botanical resources; terrestrial
fauna; archaeological, cultural, and historic resources; air quality;
noise; radio frequency interference; scenic and visual resources.
- Socioeconomic impacts: social impacts; employment; economic
and fiscal impacts.
- Infrastructure and public facilities: traffic and transportation; wastewater;
water supply; drainage; electrical power and communication; solid waste;
police protection; fire protection; emergency services; education and
child care; recreational resources; health care facilities.
- Conformance with existing plans, policies, and controls: state level;
county level; environmental regulations.
- Alternatives to the proposed development.
- Long-range and unresolved issues: irreversible resource commitments;
long-term productivity; unavoidable adverse environmental affects
(Nordic/PCL & Wilson Okamoto & Associates, 1995).
Environmental assessments of this type require the services of many
specialized consultants and professionals, including archaeologists and
soils engineers, and highly specialized tests, such as traffic modeling
and noise impact studies.
With regard to the issue of the industrys sociocultural impacts, the
pressures and changes that tourism brings to bear upon population groups
that have remained outside of the modern market economy can be
significant. Again, as in the case of the environment, these pressures and
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Environmental
concerns
changes become all the more important in light of the fact that a particular
destination may base its appeal on the local population and its culture.
The sociocultural impacts assessment begins with the collection of
demographic data (birth and death rates, age profile, marriage patterns,
family size), economic data (personal incomes, source of incomes, household
sizes), health data (disease rates, life expectancy), social indicators (crime
statistics, educational levels), and cultural beliefs and practices. Based on this
data, the plan can address issues such as the following:
- To what extent is the society dependent upon a more traditional
economy (e.g., barter) rather than a cash-based market economy?
- How will existing family structures and patterns fit with the possible
employment of family members? This issue has proven to be
particularly important in traditional patriarchal societies where
women have entered the work force for the first time, and develop a
social and economic network outside of the family.
- How do the residents feel about the uses to which the land will be
put (in particular, the construction of accommodations and
commercial facilities)? Will the construction alter their access or use
of shoreline and other areas?
- How do residents feel about performing cultural practices before
foreigners? About selling traditional artifacts and wares?
- Is the local society relatively egalitarian, or are there clear divisions
among various strata? How might this affect their willingness and
ability to work in service-related positions?
- How might the availability and use of consumer goods affect the
local society? How might they react to visitors whose consumption
patterns reflect a much higher standard of living?
In recent years, the issues related to environmental and socioeconomic
impacts have become more pressing as more destinations turn to
ecotourism. Ecotourism (which is discussed in detail in Chapter 6) is
intended to give the visitor a closer and more authentic experience of
the destination. In so doing, however, it also places both visitor and the
local environment and culture in much closer contact. In some cases,
this has worked to the detriment of the local society, which by its
openness to the visitor is now more vulnerable. The market for
ecotourism continues to grow, however, and thus these impacts will
continue to be important for both visitors and local societies to consider.
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Elements of a Tourism Plan
Sociocultural
issues
15.7.4 Economic and Financial Analysis
Tourism development must be financially feasible for both the host
areas government and the private sector in order for it to provide any
economic benefits to the host community. Of particular concern to the
government will be the extent to which the development will provide
economic benefits, such as an increased standard of living and higher
employment, to the host area.
For most destinations, the prospect of greater economic activity and
strength is the first and primary reason for tourism development.
Ideally, every dollar of visitor expenditures will be retained and extend
throughout the local economy, creating spending, jobs, and wealth. In
order to devise strategies to facilitate this outcome, the economic and
financial aspects of the development, grounded in the information on
demand and supply, is assessed.
From the governments perspective the industrys ability to generate
increased economic benefits for the local community is of central
importance. Some of the questions that are important to the public
sector in an economic and financial analysis include:
- What kind (in terms of socioeconomic level) of visitor is tourism
likely to attract?
- What are the spending habits of this type of visitor?
- Are there products and services that this visitor values and
purchases? If not, will they need to be imported? What will be the
likely cost of such imports?
- Does the work force have the requisite skills and training to supply
the industry with labor? How much will education and training cost?
Will there be a need to import certain segments of the labor force?
If so, what kinds of costs will be associated with that?
From the private sectors standpoint, the risk and profitability of a
project need to be carefully projected. Examples of questions that are
important to the private sector are:
- Are there sufficient local sources of capital for the planned projects?
- Are there restrictions on foreign ownership or control of land? Will
these restrictions affect the ability to obtain financing?
- What are the prevailing wage rates of the local population? Is there
a pool of managerial-level workers that can staff the facilities?
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Chapter 15: Tourism Planning and Destination Development
Economic
benefits
Analyzing
finances
Risk and
profitability
The funding requirements for destination development are usually
addressed carefully in the planning process. Although government is
often responsible for funding items such as infrastructure and
education and training, while the private sector funds accommodations
and other facilities, the actual funding will vary with the circumstances
of each project. Less-developed areas with limited access to both
public and private capital can apply for assistance from various
regional and international organizations, such as the Asian
Development Bank and the World Bank (see Chapter 14). These types
of organizations also provide funding for the planning process itself.
15.7.5 Action Plan and Recommendations
The action plan is the culmination of the planning process and will
vary with the goals of the plan itself. The goal of this section is to
synthesize all of the data and analysis into a viable plan of action for
the various parties involved in the development. This section of the
plan can include strategies, guidelines, recommendations, schedules,
and even legislation and other formal documents. Often, the action
plan will include a combination of some or all of these products.
An example of an element that might be included in this section is a
graph that represents a time-specific action plan, with details on the
sequencing and timing of objectives. Another example would be
development and design standards, or even model legislation, which a
government could use to control the development of the destination
area and covering areas such as building density, building height,
building setbacks from property boundaries, shorelines, and roads, the
allowable floor area ratio of buildings, the allowable building footprint
or site coverage, parking requirements, and other requirements in areas
such as landscaping (WTO, 1994e, p. 52).
These types of development guidelines are important for undeveloped
areas, many of which do not have zoning codes in place during the
planning process. In this way, a plan can have an impact beyond its own
project area and assist a destination areas government in ensuring that
the groundwork for tourism development is laid.
15.8 Factors Affecting Tourism Planning
Tourism planning, as a complex activity that involves many different
parties, is subject to a number of pressures and factors that can influence
the planning process and the persons involved in it. These pressures can
337
Factors Affecting Tourism Planning
Funding
Synthesis of data
Guideline
development
be particularly numerous and forceful in cases where there is an
expectation that tourism will solve a range of economic and social
problems. Unfortunately, this expectation often occurs in communities
that are economically depressed which in turn creates budget constraints
that reduce the ability of government to fund and support the industry. In
some communities, on the other hand, government planning efforts are
constrained not by funds but by pressure to lessen planning regulation and
to leave the development of tourism to the private sector. In these cases,
often there is the fear on the part of individual businesses that cooperation
and planning with others will lessen their individual competitiveness.
Sometimes tourism planning must contend with skepticism of the need
for and benefits of tourism on the part of residents. Residents may be
wary of the negative impacts of tourism development. A common and
often powerful factor in tourism planning results from pressure to
protect the environment on the part of the public and, in particular, by
environmental groups. Planners deal with public skepticism and
interest group pressures by encouraging wide participation and input in
the planning process. However, the complexity and cost of setting up a
planning process and structure that provides for extensive participation
and input can be quite high. Finally, the planning process must deal
with the ongoing, market-related competitive pressures resulting from
constantly changing technology, the emergence of new destinations,
and changing preferences of visitors.
SUMMARY
A successful tourist destination rarely happens by accident. Rather, it
is the product of careful planning in a number of critical areas. In a
comprehensive analysis of the development of a visitor destination,
these areas range from the visitors themselves to the local
infrastructure. The experience of many destinations has demonstrated
that such a comprehensive analysis is necessary to anticipate the wide
range of impacts that tourism brings to a society. In the past, tourism
planning had often been reactive due to the inherent difficulties of
dealing with the future and to the nature of the organizations in which
many planners have worked. Because of the difficulties of forecasting
and projecting the future, plans and policies often did not meet their
stated goals and in many cases also brought about unexpected results.
The resulting crisis in planning, as well as the accumulated experience
in this area, has brought about a more realistic view of the limitations
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Chapter 15: Tourism Planning and Destination Development
Expectations
and fears
Public skepticism
and interest
groups
of planning, led to the development of planning mechanisms that deal
with uncertainty and change, and produced a better quality of planning
product and process.
Experience has also shown that planning is critical to the long-term
economic viability of the industry. Sooner or later, the problems of an
unplanned destination will become apparent to its tourists, who, in
todays competitive market, will opt for other destinations. Planning a
destination according to the principles discussed in this chapter can be
time-consuming and contentious, as various partiesdevelopers,
government, the local populationpress for their own goals. However,
the process itself is designed to bring issues out before decisions are
made, construction begins, and mistakes become costly or irrevocable.
DISCUSSION QUESTIONS
1. Why is tourism planning important?
2. What are the levels of tourism planning?
3. Who are the actors involved in the planning process?
4. What are the major elements of a destination plan?
5. How is tourism planning usually organized?
6. What is the purpose of a tourism impact analysis?
339
SUMMARY
CHAPTER 16
Tourism Human Resources Planning and Development
Learning objectives
To understand the importance of human resources in the global tourism
industry.
To be aware of how human resources needs are assessed.
To understand the relationship between tourism human resources needs
and human resources development through tourism education and training
programs.
To understand the impacts of global political, economic, and social
trends on human resources.
Key terms and concepts
academic programs
advanced management programs
certification
cross-border labor flow
cross-functional skills
human resources planning
skill standards
vocational programs
16.1 Introduction
Tourism is essentially a service business, and the many people whom a
visitor encounters and relies on to provide for basic needs and entertainment
are critical to the success of a tourism destination. Tourism is also the
business of hospitality, therefore, when service is provided, the friendliness
of the service delivery matters. It is an axiom that people dont go where
they do not feel welcomed. Thus the roles of host and guest define in large
measure the memorableness of the visitor experience and determines
whether there will be repeat business. Professionalism, effective skills,
efficiency, and courtesy as service characteristics do not happen in a
vacuumthey are the result of education and training investments.
Recognizing that workers as providers of service are essential to the industrys
success, governments are working actively with industry to establish
employment policies and skill standards to meet the needs of an increasingly
competitive global environment. Education and training providers, who now
deliver an array of programs and courses, are also examining their curricula
in the context of real world skills and knowledge needs.
This chapter will examine aspects of tourisms human resources or work
force, as well as the nature of service in the tourism industry. It will
discuss the importance and methods of assessing human resources needs
in the industry, for both new and existing destinations, and the role
341
16
Tourism Human Resources
Planning and Development
Hospitality and
service business
Workers:
essential to
success
education and training providers play in human resources development.
It concludes with a look at some of the global issues that will affect the
tourism industry and tourism human resources in the future.
16.2 Human Resources Planning
Human resources planning and development has been defined as a
systematic approach to ensure that the right people are in the right job at
the right time (Inskeep, 1991, p. 403). Because tourism is a service
activity and depends heavily on the people who work in the industry,
knowing how many people are needed to fill current and future positions
and what attitudes, skills, and knowledge the people who fill those
positions should possess is important in tourism development. Besides the
quantification aspect, human resources development must also be sensitive
to the sociocultural environments of the community and host society.
In the past, human resources development was often neglected in
tourism destination planning. The assumption was that once tourism
projects were completed, it would be easy enough to find labor and to do
intense, short-term training to prepare people for jobs. This view has
proven to be shortsighted, and in countries with scarcity of either labor
or skills or both, the success of tourism enterprises was put into jeopardy
as solutions to import labor and skills were not only costly, but usually
met with government opposition. Tourism is a growth industry for many
countries and regions, and human resources planning is seen as essential
in balancing labor supply and demand and in developing and sustaining
a quality tourism product. The WTO-sponsored Madrid Declaration on
Human Resources Development in 1996 noted the urgency in the need
for qualified human resources in the tourism industry.
Government strategies related to human resources development cut
across a wide range of activities including education and training,
immigration, wages, and other work-related incentives and controls.
Human resources planning involves:
Evaluating the present utilization of human resources in tourism and
identifying any existing problems and needs.
Projecting the future human resources needed by estimating the
number of personnel required in each category of employment and
determining the qualifications for each category of job.
Evaluating the human resources available in the future.
Formulating the education and training programs required to provide
the requisite qualified human resources (Inskeep, 1991, p. 404).
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Chapter 16: Tourism Human Resources Planning and Development
Importance of
planning
16.2.1 Assessing Labor Demand
In assessing tourism human resources, all levels of tourism positions in
every sector must be considered including managers and nonmanagers
for hotels, food service, attractions, transportation, tour and travel
operations, personal service, and government tourism administration.
The information obtained includes job classifications, number of
employees, and work force demographic information such as age,
education level, residence, and national origin. Problem areas, if they
exist, are identified and described such as the number of available
workers, worker qualifications, high turnover, or lack of training.
Projecting human resources demand can be done by using expected tourist
arrivals and number of lodging units and other facilities to be used to meet
this demand. A common technique to obtain gross human resources
projections is to use ratios such as the number of jobs per lodging unit. For
example, a ratio of 1.5:1 means 150 jobs for 100 rooms. Types of service
will also influence different types of jobs. For example, sightseeing tourism
requires more guides and drivers, while beach tourism, more lifeguards and
diving instructors. An active government role in tourism will also create
public service jobs linked with tourism, for instance, in marketing and
promotion, research, convention bureau management and other areas.
16.2.2 Assessing Labor Supply
An accurate projection of human resources supply and demand can
help reduce the need for migration of the work force to seek or fill jobs
through better planning. Migration takes place when there are
imbalances of seasonal demand or structural supply of workers for
tourism. Cross-border labor flow often reflects the disparate needs of
countries at different levels of development, with industrialized nations
drawing immigrant labor to fill lower paid positions for which the host
country has no available workers. These positions may also not be in
line with the career expectations of resident workers of the host
country. Developing nations often have to bring in expatriate managers
to fill the top positions in the tourism industry because there is no local
pool of management talent. Even for industrialized countries, filling
management and professional positions may be difficult as other
industries compete with tourism and draw employees from this pool.
In planning an areas tourism human resources, decisions need to be made
regarding the number of people that are going to be brought in, the
qualifications needed, and the social implications of having immigrant
labor. Cross-border labor flows have been increasing, especially in Asia-
343
Human Resources Planning
Assessing all
positions levels
Projecting
demand
Immigrant labor
and expatriate
managers
Pacific countries. In such labor-short countries or locales as Taiwan, Hong
Kong, Singapore and Malaysia, migrants provide a partial solution in
meeting the demand for workers. By contrast, countries such as China,
Philippines, Sri Lanka, India, and Bangladesh experience labor surpluses.
Recent studies of travel and tourism industry human resources in Asia-
Pacific countries found more than half the employers surveyed indicated
that they have a moderate to serious problem in recruiting management and
skilled/semi-skilled workers, due in part to the rapid growth in the industry.
They also reported that filling professional positions was also a serious
problem. However, most employers had no trouble filling unskilled
positions (American Express Foundation & the World Travel and Tourism
Council, 1993, p. 8; American Express Foundation & the Pacific Asia Travel
Association, 1994, p. 7). Similar results were found in a study on human
resources for Latin Americas travel and tourism industry (American
Express Foundation & the World Travel and Tourism Council, 1996).
16.3 Tourism Employment
and Career Opportunities
The employment and career opportunities available in tourism-related
activities are as varied as the industrial sectors which comprise the
tourism and travel industry. These diverse sectors (discussed in Chapter 8)
provide a wide and varied range of occupations. Although there are no
industry sectors which are entirely dependent on tourism, there have been
numerous attempts to develop a classification framework to identify
economic activities related to tourism. The World Tourism Organization
(WTO) has developed a classication methodology called the Standard
International Classification of Tourism Activities (SICTA) which
categorizes businesses based on their principal activity. Within these
sectors, tourism-related occupations can be readily identified. In the
hotels, motels, and other provisions of lodging (SICTA codes 5510, 1, 2,
9) for example, jobs include general manager, resident manager, catering
manager, executive housekeeper, director of sales, front office manager,
and steward to name a few. Jobs in restaurants, bars and canteens (SICTA
code 5520) include restaurant managers, cashiers, food service
supervisors, chefs, waiters and waitresses, and kitchen helpers. The
transportation sector may include jobs which relate to airlines (SICTA
code 6210-1) including pilots, flight attendants, and aircraft mechanics;
ground transportation (SICTA code 6021, 6010) such as bus companies,
railroads, rental car companies which offer jobs as drivers, tour
representatives, ticket agents; and sea transportation (SICTA code 6110-
1) with jobs offered on cruise liners.
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Chapter 16: Tourism Human Resources Planning and Development
Lack of
skilled labor
Range of
occupations
Generally, the jobs in the tourism industry can be classified as service,
clerical, managerial, or professional. In a hotel, for example, service
workers are those who clean, serve food, carry luggage, and provide
security; clerical workers are those who provide information, keep
track of accounts, cash and stock, and operate the switchboard;
managerial workers are those who supervise the activities of others;
and professional personnel are those who provide legal and financial
accounting services to the hotel. They are designated as professionals
by virtue of their special training and credentials. For the hotel and
other companies that provide basic and personal services to tourists,
service workers generally comprise the largest group.
345
Tourism Employment and Career Opportunities
Source: World Tourism Organization, Framework for the Collection
and Publication of Tourism Statistics (1991), pp. 62-63.
5510 Hotels, Camping Sites and Other Commercial Accommodations
5510-1 Hotels and Motels with Restaurants
5510-2 Hotels and Motels without Restaurants
5510-3 Hostel and Refuges
5510-4 Camping Sites, Including Caravan Sites
5510-5 Health-Oriented Accommodation
5510-6 Other Provisions of Lodging, N.E.C.
5520 Restaurants, Bars and Canteens
5520-1 Bars and Other Drinking Places
5520-2 Full-Service Restaurants
5520-3 Fast Food Restaurants and Cafeterias
5520-4 Institutional Food Services, Caterers
5520-5 Food Kiosks, Vendors, Refreshment Stands
5520-6 Night Clubs and Dinner Theaters
Table 16.1: Standard International Classification of
Tourist Activities (SICTA) Hotels and Restaurants
The projected growth in tourism worldwide ensures many opportunities to
enter and advance in the industry. With many entry points for those desiring
to begin a career in tourism, young workers may enter jobs that require
minimal skills and acquire on the job training, while seasoned workers can
obtain technical jobs that require some formal training and education. Job
opportunities will usually increase with higher levels of education and
training. Each sector has a career path or ladder for individuals entering the
field and some representative occupations. Examples of advancement
opportunities in hotels are provided in Table 16.2.
Kinds of jobs
Opportunities for
advancement
3
4
6
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a
p
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1
6
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u
m
a
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o
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e
s

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a
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n
t
Title Department Description
Advancement
Opportunity
Assistant Manager Front Office
Assists General and Resident Managers in discharging
their duties. Performs specific assignments on their
orders.
Resident Manager
Assistant
Housekeeper
Housekeeping
Supervises the work of maids and housemen in assigned
areas.
Executive
Housekeeper
Front Officer
Manager
Front Office
Acts as liaison between the guest and the hotel for
reservations, registration and information.
Assistant Manager
Maitre D'Hotel Foodservice
Supervises the service of the public dining and banquet
rooms.
Director of Food
and Beverage
Director of Sales Sales
Sells convention facilities for meetings, banquets and
receptions.
Resident Manager
Steward Food and Beverage
Purchases or supervises the food and beverage for the
hotel.
Restaurant Manager
Executive
Housekeeper
Housekeeping
Supervises all housekeeping personnel in charge of
renovation and purchasing of housekeeping supplies.
Supervisor of more
than one operation
or a corporate
position
Catering Manager Food and Beverage Sells banquets and supervises banquet service.
Director of Food
and Beverage
General Manager Administration
Supervises all activities within the hotel. Responsible for
all the coordination of all departments.
Managing Director
Resident Manager Administration
Takes over for manager in his absence. Usually handles
special duties assigned by manager.
General Manager
Table 16.2: Job Advancement Opportunities in Hotels
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Quality of Service and the Work Force
16.4 Quality of Service and the Work Force
While the many companies that serve tourists may form a distinct
group, what do workers in these companies have in common? How is
the tour driver like the hotel guest service agent? The thread that cuts
across all sectors and companieshotels, restaurants, travel agencies,
airlinesis service. The experience tourists have is largely determined
by the contact they have with the employees working in the tourism
industry. Thus, the employees both create and deliver the tourism
product at the point of consumption. The defining characteristic of
the tourism work force is this core of knowledge and skills that enables
the workers to provide quality service to the tourist.
16.4.1 Service Expectations of Travelers
A traveler is by definition a person who is out of his/her own element
and one who has only limited time to relate to a new environment, and
therefore may choose to sample the best that a destination might have
to offer. Travelers consider themselves as guests and expect to be
treated as such. Moreover, as tourism suppliers raise their standards of
service to remain competitive in the dynamic marketplace, they also
raise the level of expectation of their customers as well.
The implication of these greater expectations for service standards and
service performance in the tourism industry is obviousemployees must
be trained and educated to provide quality experiences with efficiency or
destinations and companies will lose their market share. Providing this
high level of service consistently to a demanding market is a challenge
for the industry. For the long-term success of a destination or company,
education and training can be critical because the tourist will often judge
the trip experience by all of the individual contacts, or moments of
truth, during a visit. Both defining a quality service from the tourists
perspective and having tourism companies agree to a common service
standard and training are important challenges for the industry.
16.4.2 Sustaining Quality Through Skill Standards
A critical part of sustaining a quality destination is establishing
standards of performance in tourism jobs and certifying workers who
possess the skills meeting those standards. In tourism and in other
industries, setting skill standards for each occupation is gaining
importance as a means to increase employee productivity and provide
a competitive edge in a global market. In the U.S., the push for skill
standards is also based on the need to fight stagnating wages for 50-80
percent of the nations workers. In Europe, the European Economic
Community (EEC) in 1990 launched the Year of Tourism which was
organized to promote European tourism in the face of increasing
competition from other destinations. However, it was recognized that a
well-educated and trained work force was needed to accomplish this
objective. Some European countries had cited a deterioration in service
as a reason for the drop in their market share.
A skill standards system assumes that all productive workers need
some occupational preparation. Developing a skill standards system
involves three major groups: the employer, who sets the performance
specifications that identify the knowledge and skills an individual
needs to succeed in the workplace; education and training providers,
who design and deliver the programs to raise worker skills to meet
professional standards; and a government coordinating body, such as a
board or commission, to ensure a centralized system of standards and
assessments for certification. A description of the employer and
government roles follows and the role of education and training
providers will be discussed in a later section.
The Employer
The Institute of Policy Research at Johns Hopkins University defines
skills as marketable competencies, reflecting the movement of many
developed economies from a job-based to a skills-based economy
(Shephard & Cooper, 1995). Employers seek work-related standards
that are measurable and certifiable, providing them confidence that the
workers will be qualified. In addition, because the impetus has been to
develop a work force that can compete globally, countries and regions
have sought common measures or benchmarks.
In Canada, the U.K., and other European countries, industry with the
support of education has created profiles of jobs based on competencies.
The European Center for the Development of Vocational Training has
conducted a survey to analyze key job functions and the knowledge and
skills required (Sheldon & Gee, 1987). In the United States, the school-
to-work program focuses on critical skills, competencies, and knowledge
needed by students to succeed in different occupations linked to these
skills. Competencies and knowledge areas are defined by advisory
councils which include employers, educators, and other experts.
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Chapter 16: Tourism Human Resources Planning and Development
Occupational
preparation
Seeking standards
Job profiles
Similarly, in the Philippines, efforts to establish skill standards have
focused on job specific skills, such as those for a cook or baker, rather
than skills common to other jobs.
Another broad approach in developing skill standards has been to focus
on cross-functional skills or those that are common or similar across
occupations and industry sectors. For example, the customer service
agent position, which is found in many companies, requires the same
basic skills regardless of type of business or sector. It is estimated that
70 percent of the basic skills of a position transfer across occupations
and sectors, and up to 90 percent for management positions. In the
U.S., the Occupational Information Network is being developed for all
industries, which will replace the U.S. Department of Labors
Dictionary of Occupational Titles. This network will, among other
things, identify basic and cross-functional skills in occupations.
For the tourism industry, certain skills have been identified as cross-
functional and critical to the tourism industry such as social or human
relations skills. In a study of employer- and employee-perceived
importance of skills in their jobs, human relations, communications,
and courtesy ranked the highest (Ortiz, 1992). In studies of employers
in the Asia-Pacific area, a positive attitude displayed by employees was
judged to be of critical importance and in greatest need among six
other skill areas. This human relations skill area is important to tourism
to create a positive service experience for the tourist. Other skills that
are considered cross-functional and important to the work force are
critical thinking, initiative and problem solving, and computer skills.
Government Coordination
Many countries have established government coordinating bodies to
centralize the skill standards and certification system and to serve as a
means of communication between employer and education and training
providers. Such bodies ensure that the system is responsive to changing
economic conditions and need for skill types. Most countries also have
industry training boards or national training councils that regulate and
set policy for various work training programs. Traditionally, these boards
have concerned themselves mainly with established industries such as
those of mechanical, electrical, and construction trades, but tourism is
beginning to be included in their purview. Examples of coordinating
bodies for tourism skill standards include India National Board,
Singapore Hotel Trade Advisory Committee, and the Philippines Hotel
and Restaurant Industry Training Board Foundation, Inc. (Ortiz, 1992).
349
Quality of Service and the Work Force
Similiar basic
skills
Critical skills
Certification and
communication
Regionally, the Association of Southeast Asian Nations (ASEAN) in
1990 initiated a project that developed skill standards for several hotel
and restaurant occupations for cross-national use. This project evolved
into the ASEAN Tourism Occupation Standards which prescribes
curricula and training techniques and encourages their use throughout
the region (SSRC, 1996). Singapore also has initiated National
Tourism Education and Training Strategies, which are strategies to
keep Singapore competitive and its tourism work force productive. The
U.S. has been active in establishing a skills standards system as well by
forming a National Skills Standards Board (NSSB) which has issued
guidelines to employers and education and training providers for
voluntary implementation (Sheldon & Gee, 1987).
In 1996, the World Tourism Organization conducted a study of 100
public and private sector employers representing 12 subsectors of the
tourism and hospitality industry in six WTO regions. The purpose of
the TEDQUAL (Tourism Education Quality) study was to pinpoint
factors to be addressed by tourism educational and training programs
to meet the current and future needs of tourism employers. Among the
problems identified were misconceptions of the tourism industry and
the jobs offered, the lack of awareness of postsecondary education
programs in tourism, lack of coordination in tourism education, and the
lack of performance standards and credentialing processes (World
Tourism Organization, 1996i).
16.5 Tourism Education
and Training Providers
As discussed above, more governments are becoming actively involved
in tourism human resources development and are assisting employers
in identifying skill needs. Education and training providers are also
becoming involved in this movement by examining occupations and
job functions in terms of skills needed, linking skill standards to the
curriculum, and viewing certification of skills as a new role.
To meet the diverse skill and knowledge needs of the industry, a range
of programs have developed over the years, from basic skills training
to education for management. Education and training providers can be
categorized in two ways: formal programs and courses, such as
vocational programs and academic courses of study, and employer-
based training, such as management training programs.
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Chapter 16: Tourism Human Resources Planning and Development
Examples of
standardization
Problems with
tourism education
Range of
programs
16.5.1 Formal Programs and Courses
Vocational Programs
Many countries offer courses in tourism and basic tourism skills at the
high school or secondary level. Students who take a vocational career
path focus on practical skills that lead to immediate employment. In
fact, the original vocational program was entirely based on
apprenticeship training under the tutelege of master craftsmen. Many
high schools have vocational programs that also apply the principles
and theories of traditional academic areas, such as math and reading, to
the field of tourism and other occupations. In most countries, the
vocational programs at the post-secondary level are usually found at
private training institutes, community colleges, or polytechnic
institutions. These programs concentrate on providing skills training in
such technical areas as food service, culinary arts, housekeeping,
landscaping and ticket writing. The training usually spans from six
months to three years with a certificate offered after completion of the
program. Hospitality-related training has had a long history, especially
in Western EuropeSwitzerland, Austria, France, the U.K., among other
countries. Travel and tour training, on the other hand, is comparatively
new and has gained in popularity almost everywhere. Instructors in
vocational training programs typically have extensive industry
experience, which is a primary requisite. While the more common type
of tourism-related programs and courses around the world are
vocational in curricular makeup, there has been a trend to include more
general education courses, for example, social studies, economics,
languages, and business core courses in vocational program curriculum.
Academic Programs
The academic programs are usually found at universities, with
students taking a core of general studies in the first two years of study
and specific courses in the professional field in a four-year
baccalaureate degree program. There is some variation in how these
programs are structured. Most baccalaureate hospitality programs
focus on hotel and catering management. These programs provide both
general management, including business studies, and specific skills
training in the hospitality field. Work experience in the form of
internships of a semester or year length are usually a mandatory part of
the curriculum. Besides hospitality programs, there are programs and
351
Tourism Education and Training Providers
Focusing on
practical skills
Post-secondary
technical and
travel training
Hotel
management
programs and
internships
courses that focus on tourism as an area of study. Tourism is
approached from various perspectives, such as management, sociology,
and geography. This approach to tourism studies is still relatively new
with the courses usually offered by traditional departments such as
geography rather than from its own program. Instructors for these
programs often come from the traditional disciplines such as
economics or sociology. In the U.S., tourism studies are usually
integrated as an optional area of study within the hospitality program.
Graduate programs in tourism and hospitality are increasing, and their
graduates are gaining acceptance by the industry. In Europe, the
ERASMUS program, which encourages the link between European
institutions, has developed the European Tourism Management
Masters Programme, a cross-cultural Masters (MSc) program
developed for tourism. Students can study for the degree in up to three
of the five institutions located in five countries: the Netherlands, the
U.K., France, Germany, and Spain. Over the past decade, the number
of advanced management programs have increased for preparing
private and public sector managers and executives. These programs
have capitalized on the trend of lifelong learning, which encourages
individuals to keep abreast of the rapid changes in the work
environment through short courses or formal programs that upgrade
skills and knowledge, such as supervision, tourism planning, and
marketing. These advanced management programs also develop tailor-
made programs for the employer. A combination of academic courses,
study tours, and on-the-job work/observations are arranged by the
advanced management program, often drawing participants from
overseas tourism employers and government tourism organizations.
In spite of the many education and training opportunities, those working
in tourism historically have been perceived as having low professional
status. But this situation may be changing within the framework of
tourism-related occupations. Formal programs such as two-year, four-
year, and graduate programs are important to preparing professionals
competent in the field, and the educational institutions are developing
knowledge that supports the professions. WTOs TEDQUAL study
indicated employers are also seeing the importance of formal programs
as enhancing the professionalism of the field. In studies conducted in the
U.K., more companies want not only real world, on-the-job training,
which is still the prevalent mode of training, but also formal education
and training that complements vocational training (see Table 16.3).
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Chapter 16: Tourism Human Resources Planning and Development
Graduate
programs
Upgrading skills
Changes in
perceptions
16.5.2 Employer-Based Education and Training
While tourism human resources planning and the delivery of education
and training are often done at national or regional levels and through
educational institutions, the larger companies such as the major hotel
chains also do their own human resources planning and development.
Some hotel chainsHilton International, Inter-Continental, Meridien,
Oberoi Hotel Company in India, the Dusit Thani hotel group in
Thailand, among othersoperate their own training schools. Because of
the inherent diversity in the tourism industry, there is a tendency for
each type of company to provide its products and services in its own
way. In addition, although medium and small tourism companies
employ the majority of the workers and have a need for qualified
employees, they often are hesitant to invest in tourism education and
training because of the additional costs involved. Companies use a
variety of in-house resources such as special training facilities as well
as support their employees outside learning activities.
Companies with smaller training budgets may operate their own training
programs as well, which include on-the-job training and the sponsorship
of employees in special short courses, regular programs off-premise to
learn about specific tourism topics or upgrade skills, and study tours to
visit model tourism development and operations. A few in-house
programs have their programs accredited by certain trade associations,
such as for the catering profession, to ensure program quality. Other
companies use innovative methods to provide training, for example, a
hotel in South Korea allows employees to be a complimentary guest on
property so they can better know the product and appreciate the elements
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Tourism Education and Training Providers
On-the-job
training
In-house programs
Source: World Tourism Organization, 1996i, p. 18.
Front Line
Personnel
Supervisors
Mid Level
Managers
High Level
Managers
High School 36 34 12 6
Technical School 36 36 14 6
College or University 24 25 62 47
Post Graduate Institution 5 4 13 42
Table 16.3: Employes Survey of Tourism Education. Percentage of Employers
Indicating Degree Needed for Working in the Tourism Industry
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Chapter 16: Tourism Human Resources Planning and Development
of high quality service; a Southeast Asia airline links customer needs to
staff development and training center activities and course offerings; an
Australian hotel company recognizes existing skills of employees which
allows them to compete for higher rank and position in various
specializations (Inskeep, 1991). Generally, these company programs are
designed to respond to changing work force needs and to enhance the
companys culture, mission, and standard of service.
Recently, there have been concerns that employer-based education and
training programs may be too specific, narrow and appropriate only to
a particular companys requirements with the workers not being able to
transfer their skills and knowledge to other sectors of the tourism
industry. While many company programs are well-structured and
comprehensive, others are understaffed and underbudgeted, and
company trainers may not be providing the breadth and variety that an
independent institution possesses. Moreover, few in-house programs
are accredited or open to independent scrutiny (Shephard and Cooper,
1995). Training resources and funds also appear to be
disproportionately spent on training for managerial-level workers,
leaving relatively little for other workers who do the daily operational
tasks. In some regions, companies expend on average one-half of their
training budget on 5 to 10 percent of the employees (American Express
Foundation & the World Travel and Tourism Council, 1993, p. 13).
16.5.3 Education and Training Providers
and Skill Standards
Today, interest in establishing a worldwide skill standards, certification,
and accreditation system for the travel industry is mounting within the
World Tourism Organization and other travel-related international and
regional associations. As discussed earlier, establishing standards for a
diverse industry is difficult, which has sometimes frustrated education
and training providers and employers. The lack of regional or national
occupation standards to which both employers and education providers
may agree makes it difficult to achieve any consistency in curriculum
design and occupational preparation. Programs in the hospitality and
tourism-related fields tend to determine their own outcome goals,
curriculum design, and teaching methods. In the absence of uniform
standards and guidelines, they adopt well-known and long established
schools as models for emulation. Educators are also faced with the
dilemma of whether to focus their curriculum on specialized topics and
skills and risk having graduates whose skills are quickly obsolete, or on
Problems
achieving
standards
Disadvantages of
company training
general topics and skills and risk having graduates with no hard skills
which are immediately applicable on the work environment. From the
employers perspective, institutional education and training providers
often seem too rigid and out of touch with the needs of the industry.
From the educators viewpoint, industry seems not to know how to
beneficially employ the trained skills that graduates have to offer.
Despite these concerns, there has been gradual progress in establishing
a partnership between education and training providers and the
industry in developing skill standards and certification systems. In
some countries such as Australia and Canada, skill standards have been
established in certain occupational areas as well as a certification
process by education and training providers. The establishment of
government coordinating bodies in countries discussed earlier
represents an important step in developing occupational profiles and
assessing current education and training providers.
The WTO has taken the lead in establishing a network of education and
training centers to implement strategies and standards to increase
professionalism in advanced tourism education and training. In 1997,
there were 14 WTO centers distributed on a regional basis cooperating
in the development of tourism education and training curricula and
research. Cooperating institutions are also involved with the centers in
the WTO Education and Training Network.
16.6 Issues Facing Tourism Human
Resources Development
As with all individuals in the world community, the tourism work force
is subject to the rapid changes occurring across the worlds political
and socio-economic landscape. Even such basic functions as how we
communicate, use, and store information have changed radically over
the past decade and will continue to change in the future. These critical
world changes will challenge the industry, governments and regional
associations, and education and training providers in their effort to
develop and maintain a quality tourism work force.
16.6.1 Geopolitical
With the end of the Cold War, major realignments in political affiliations
are occurring. In Europe, there are increased business opportunities in
the Central Independent States or CIS (part of former USSR and eastern
Europe). An increasingly unified European regional economy has
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Issues Facing Tourism Human Resources Development
Progress
WTO's education
network
Global changes
Political
realignments
created labor shifts and increased demand for travel. In the Americas, the
North American Free Trade Agreement (NAFTA) has made it easier to
move businesses across borders. In the Asia-Pacific region, China and
Vietnam are moving rapidly toward market economies, generating a
need for capital, training, and labor. These changes will impact travel and
tourism as more people will be traveling to developing countries and
there will be a greater need for training of the work force, especially in
cross-cultural skills and communications. In addition, the work force
will be more apt to migrate, which means that more cross-border labor
flows will occur, increasing the stratification of jobs. The need for skill
standards and certification systems that cross national boundaries will be
greater because of a transient work force; the work force has to be seen
in regional and global terms rather than at company or country levels.
16.6.2 Economic
Global competition is increasing, and investors and bankers are
becoming more aggressive in pursuing their return on investment from
tourism companies. In the 1990s, management companies are no
longer in the drivers seat as they were during the 1980s and now must
satisfy both the guests and owners. The implication of this trend is that
management must work smarter and more creatively. Skills at a
premium will be problem solving, commitment to the business, and
being multi-skilled with the decentralization of authority in the new
power-sharing styles of management.
16.6.3 Social
Aspirations are rising as educational levels increase around the world.
Workers want more from their careers. On the other hand, workers are
now turning down jobs that offer more pay but a lesser quality of life.
The implication for human resources development is that a skill
standards system may address these career and lifestyle issues.
Tourism occupations will gain credibility, attracting more talented
individuals, as well as provide clear benchmarking for career growth.
16.6.4 Information Technology
The information-knowledge age is accelerating. More companies are
going on-line and state of the art computers will be sitting on every
desk. All employees, management, and entry-level workers will need to
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Chapter 16: Tourism Human Resources Planning and Development
Labor migration
Need for creative
managers
Career and
lifestyle issues
master this constantly changing communications medium. For
education, there will be a closing of the head-hand gap where the
skilled or semi-skilled worker will be taking on more head work.
Educators must redesign curriculum and pedagogy in which all students
are educated to a higher level. Establishing skill standards will be one
means of articulating these fundamental changes that will be occurring.
16.6.5 Constant Change
Global competition, new technology, and quick access to information
have placed people in a permanent learning mode. It is predicted that
workers will be spending as much or more time on learning new
techniques or information than actually doing the activity of the job.
The tourism curriculum can expect to be more process- than content-
oriented. In this approach, it is not so much what is learned but how it
is learned that is important. The focus will be on students developing
transferable skills, such as critical thinking and communication skills.
Students will be the center of learning, and they will need to take on
more responsibility for their learning and be self-directed.
SUMMARY
This chapter has emphasized the importance of human resources
development, especially given the size of the tourism industry
worldwide and the central role service plays in the industry. The
projected worldwide growth of the tourism industry will increase the
demand for labor. In addition, the labor-intensive, service-dependent,
and widely diverse nature of the tourism industry makes it a priority to
have a well-educated and trained work force. Also discussed was the
need to first assess the skill, knowledge, and attitudes needed for the
positions in the industry both for new and existing destinations. The
establishment of skill standards and a certification system, with regular
employer input and coordination by government, is one way to ensure
that industry skills are made known in a consistent way and can be
changed. The education and training providers deliver a range of
programs and courses from vocational to advanced management to in-
house training. However, it was pointed out that more has to be done in
meeting industry needs and that some countries are already taking steps
to establish a comprehensive skills standards system and provide for the
certification of skills. Finally, some broad global trends were discussed
that might have an impac