Micro Perspectives of Tourism and Hospitality
C-THC3
Module 2
Tourism Components and Service Suppliers
Tourism Management
 is a complex sector involving a wide
range of economic operations.
 Tourism supply is one of the
operations.
 It is highly reliable on the natural,
artificial or man-made, operating, as
well as the regulatory components
involved in creating the tourism
product.
 The supply elements are
geographically confined to a fixed
place hence, the stake holding
businesses need to provide products
and services by putting costs and
anticipating promotion of their
individual products and revenue.
Tourism Supply
 is derived by summing the value of
tourism products sold by the tourism
industry to the tourists. It takes into
account accommodation services,
food, transport, and other retail sales.
Properties of Tourism Supply
 Tourism supply is perishable (cannot
be stored like the products).
 It cannot be examined before one
purchase it.
 It is necessary to move from one place
to other for its consumption.
 It is geographically fixed at different
places.
Components of Tourism Supply
1. Attractions - They are the places the
tourists perceive as the satisfaction of
their leisure-oriented needs.
a. Natural Attractions − Caves,
canyons, rocks, waterbodies,
landscapes.
b. Man-Made Attractions − Theme
parks, towers, bridges, architecture,
temples, mosques, churches, and
monuments.
c. Cultural Attractions − Historical
sites, monuments, local arts and
crafts, local folk core, music and
dance.
2. Transportation - They are the modes
of commuting.
a. Road − Car, bus, cycle.
b. Rail − Long distance, high speed,
commuter, or intercity trains.
c. Water − Boats, ferries, cruises.
d. Air − Carriers that operate on fixed
schedule. Charters that operate as
and when required.
3. Intermediaries - They are the
mediators.
a. Travel Agents − The business of
selling hospitality and tourism
products.
b. Tour Operators − They deal with
the operating components for rates.
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4. c. Bu
Destination - It is the place the tourists siness Activities − Attending
visit. It is composed of ; seminars, business meetings,
a. Accommodation − Hotel, motel, promotions.
lodge, guest house, B&B. d. Health Activities − Attending Yoga
b. Restaurant  − Specialty restaurants, sessions, exercising, undergoing
themed restaurants, branded naturopathy, and similar activities.
restaurants such as CCD (Café
Coffee Day), KFC, Bistros, and Categories of Tourism Supply
takeaway food joints. Components
c. Tourist Facilities  − Pubs, 1. Natural Components
entertainment parks, shopping  They are mainly
centers, and casinos. the Environmental components.
They are the natural elements for
5. Activities - They include activities the visitors’ experience and enjoyment.
tourists are interested to engage in:  Climate
a. Adventure Sports − Mountain  Milieus of the destination
biking, bungee jumping, rafting, and  Flora and fauna
other similar activities.  Natural beauty of destination
b. Leisure − Basking on beaches,
swimming, dining near body of 2. Constructed Components
water.  They are the infrastracture and
Superstracture
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 They include all surface,  Transport service
underground, and above the ground  Food service
constructions and facilities.  Accommodation service
 Water Supply System  Service at the places of attraction
 Cooking gas supply system 4. Regulatory Components
 Electric supply system  They are the permitting authorities.
 Drainage and sewage system  The public sector − Government
 Rest rooms for sanitation policies
 Airports  Licensing
 Transport hubs  Civil rights authorities
 Parking hubs  NGOs
 Accommodations/hotels/ Restaurants
 Museums The tourist supply inspires, conducts, and
 Gardens affects the entire tour. If any one of the
 Shopping centers above given components does not work
 Attractions well, it impedes the experience of the
tourists and the tour does not turn out to
3. Operating Components the tourists’ satisfaction.
 They are mainly related to the
services. They include the work
force that is instrumental in
imparting excellent experience to the
tourists.
                                                                                                                             
Hospitality Resources/Hotel Management
The Activities Of The Hospitality drink) to people who for whatever
Industry reason are away from home
Main business sectors in the hospitality  Food and beverage – To provide food
industry: and beverage to local, commuting,
 Accommodation – To provide transient customers and tourists
accommodation (and usually food and
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C-THC3
                                                                                                                             

Classification Of Hotels 2. Suburban Hotel

Criteria: 3. Airport Hotel
 Location: e.g. city centre hotels, 4. Motel
suburban hotels, airport hotels and 5. Convention Hotel
highway hotels/motels 6. Commercial Hotel
 Function: e.g. commercial hotels and 7. Resort Hotel
convention hotels 8. Spa Hotel
 Market segment: e.g. resorts, health 9. Timeshare Hotel (vacation ownership)
spas, timeshares/vacation ownership 10.Casino Hotel
and casino hotels 11.Boutique Hotel
 Distinctiveness of property: e.g. all- 12.Extended Stay Hotel
suite hotels, boutique hotels, extended- 13.Historic Conversion Hotel
stay hotels, historic conversions and 14.B&B
bed and breakfast inns 15.Guest Houses
 Price and staff/room ratio 16.Hostels
 Size: e.g. under 150 rooms, 151-300 17.Cabins
rooms, 301-600 rooms, more than 600 18.Villas/Chalets (ski and beach resorts)
rooms
 Rating (grading) : e.g. one-star to Hotel Management
five-star or one-diamond to five- Hotels can be operated in one of the
following ways:
diamond
1. Independently owned and operated
Hotel Ownership - Another  These can be independent hotels,
classification of hotels is by their with no affiliation, that are being
ownership, which can be: managed by the -owners of the
 Private: An independent hotel properties.
2. Management contract
owned by a person/
partnership/private company;  Management contracts are hotel
management companies which
 Local group: Several hotels owned
by a local company operate properties owned by other
entities. In some cases, the hotel
 International group: A hotel which
owners may arrange to run their
is part of an international chain of
properties through a management
hotels
contract with a company that
specialises in managing hotels.
Types of Hotels
1. City Centre Hotel
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hotels similar benefits as franchising,
but at a lower cost.
 Some hotels choose to become a
Franchising referral property.
Some investors prefer to use the  This means that the property is being
franchising concept in running the hotel. operated as an independent hotel in
Franchising in the hospitality industry is association with a certain chain.
a concept that:  These hotels refer guests to one
 Allows interested investors to use a another’s properties and share a
company’s (the franchisor) name and centralised reservation system, a
business format common logo, image, or advertising
 Is made up of properties where the slogan.
franchisees agree to run the hotel in  Hotels pay an initial fee to join a
accordance with the strict guidelines referral association and further fees are
set by the franchisor based on services required.
 Allows a company to expand more
rapidly by using others’ capital As the property has already been
physically developed, the owner may
Benefits for the franchisee: want assistance only with marketing,
 Obtain from the franchisor the advertising, management, or reservation
expertise in doing business such as site referral.
selection, planning, pre-opening
training, operations manuals, In addition, guests may find more
information management,central variation among the referral properties as
reservation system, field support, size and appearance standards are less
quality control, purchasing, stringent than those in a franchise
advertising, marketing, new products agreement.
and concepts
 The franchisee has complete control However, every hotel is assessed and
and responsibility over the daily checked regularly to ensure that it
operation of the property maintains the highest standards.
 In return, the franchisor receives a
joining fee and an ongoing fee from
the franchisee.

Referrals
 Referral associations, e.g. Leading
Hotels of the World (LHW), offer to
Micro Perspectives of Tourism and Hospitality
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Bringing Travelers and Tourism Service Providers Together
Travel necessitates a variety of services. Goal of service suppliers is reaching, serving,
and satisfying travelers. Serving Traveler Needs
Operating Sectors of the Tourism Industry
Distribution Channel
An operating structure, system, or
linkage of various combinations of
organizations through which a producer
of travel products describes, sells, or
confirms travel arrangements to the
buyer Products get to consumer through
a distribution channel.
Tourism Services
Services are actions; goods are material
objects Services are often accompanied
by facilitating goods which support the
service in tourism there is no physical
good that can be held in inventory and
can be transferred from one middleman
to the next
Serving Traveler’s Needs
Thomas Cook is credited with being the
first tourism intermediary, packaging
tourism services and then selling the
packages to tourists To attract business,
tourism suppliers must provide
prospective customers with information
on which they will base tourism choice
decisions There are many alternative
ways to provide information and services
to prospective guests Three types of
distribution channels can be used
Why Use Intermediaries?
Intermediaries make information and
services widely available cost-effectively
They perform a variety of value-added
functions e.g, types of services, potential
customers, packages Intermediaries are
frequently paid on commission May also
charge the customer a modest fee Exist
Micro Perspectives of Tourism and Hospitality
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where they perform a necessary role more cost-effectively than the supplier
could perform the same role

Distribution Channel

One-Level (Direct) Distribution Two-Level Distribution Channels

Channels  Intermediary between tourism supplier
 Simplest form of distribution, no and tourist
intermediary between supplier and  Most common form of tourism
customer supplier
 Most tourism suppliers utilize one-  Travel agencies are the department
level distribution channels stores of the travel industry
 Purchase directly from the supplier  Improving service delivery through
 World Wide Web is increasing the cooperative systems
direct availability of information and  Global distribution system (GDS)
purchase  Computer reservation system (CRS)
 Airlines encouraging the use of the
Web and ticketless travel Improving service delivery through
cooperative systems
Advantages  Agencies big and small use global
 Simplicity distribution systems (GDSs)
 Additional Sales Opportunity
 Flexibility  Via GDSs agents have on-line
 Greater Profitability to Suppliers information about schedules,
 Personal Control over the Sale availability, and fares, and allow
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C-THC3
                                                                                                                             
booking of some reservations and o Escorted
printing tickets  Tour Operators
 Two airline GDSs; Sabre and  Purchase tourism services in bulk
TravelPort and then mark up the price and resell
 These GDSs are also used as in packaged form
databases/reservation systems for  Plan, prepare, market and often
many other tourism services such as operate vacation tours
hotels and rental cars  Also termed tour packager or tour
wholesaler
Two important cooperative systems for  Many financial risks in the tour
airline ticketing packaging business
 Airlines Reporting Corporation (ARC)  Receptive service operator is local
 International Airline Travel Agency company that handles group’s needs
Network (IATAN) while in its location
 Consolidators and Travel Clubs
Advantages  Consolidators buy excess airline
 Professional Assistance capacity and resell at discounted
 Multiple Options prices
 Free or Low-Cost Assistance  Travel clubs perform similar
 Cumulative Group Power function for their members plus offer
 Single-Charge Billing discounts on other tourism services
 Cost Less???  Meeting Planners
 Professionals employed by
Three-Level Distribution Channels corporations, associations, etc. To
 Add another level of intermediary such organize all the details entailed in
as tour operators to low-level channel meetings
 Some travel agencies have entered tour  Meeting planner must balance meeting
packaging business costs with meeting attendee desires
 Tours
 A package of two or more tourism
services priced together
 Four primary forms of tours
o Independent
o Foreign/domestic independent
o Hosted

Tourism Distribution Channels

Micro Perspectives of Tourism and Hospitality
C-THC3
                                                                                                                             

Flow of Payments, Information, and Service Delivery

Tapping the Power of Dual Distribution  Indirect channel using traditional

 Internet increasing the use of the direct travel agents
channel  Indirect channel using Internet-based
 Direct channel using mall locations cruise-only agents
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 Indirect channel using last-minute fire  Most tourism suppliers have their own
sale agencies to fill cabins close to sales force
sailing dates  Often conduct missionary sales
activities to supply information and
Tourism Information Sources and brochures to aid in sales efforts
Services
 Tourism offices provide general Seven Steps to “Making the Sale” at
information BETEX
 Often operate tourist information  Acquiring product knowledge
centers  Approach
 Large cities have conventions and  Qualifying the customer
visitors bureaus; small cities use  Making sales presentation
chamber of commerce- both funded by  Closing the sale
local tourism service suppliers  Follow-up
 Build relationships
Selling Adds a Personal Touch