Chapter 2 – Nature and Characteristics of Tourism

Summary

This chapter explains nature and characteristics of tourism.

Travel Industry is a sector of economy that includes business

providing services and facilities to visitors and travelling people.

Travel industry is different because of diversity of services and

diversity of products from normal industry. Tourism’s vast spread
makes it a complex industry. Different components of tourism
Industry are often interrelated. The impacts of one part of tourism
industry have significant implications for other sectors.

Economic characteristics of tourism sector includes -

 The attraction sector

 The accommodation sector
 The transport sector
 The travel organizer sector
 The destination organization sector

Tourism business requires large financial investment and frequently

over a long timescale. Level of risk & rate of return are critically
important to tourism management. Tourism industry products are
highly inflexible and perishable in nature. Tourism industry unlike
product sector, cannot keep inventory. Unsold rooms, unreserved
seats in plane today are lost opportunity for next day as they cannot
generate revenue next day.
To overcome inflexibility and perishability factors, tourism industry
use various strategies including differential rates to limited table
reservation time in a restaurants.

Transportation, accommodation, and entertainment are tangible

elements of tourist industry. But vital part of tourism industry is the
intangible elements which cannot be standardized.

Travel agents and tour operators, accommodations and dining,

transport, tourist information & guides, tourist attractions are
primary components of tourism industry.

The extent of disposable income available, ttourism Infrastructure

availability at destination and amount of leisure time available are
important factors responsible for growth of tourism Industry.

Thus a destination is cluster of activities and a bad performance by

one sub sector influence the profitability of the other sectors of the
cluster.