MACRO PERSPECTIVE OF TOURISM AND HOSPITALITY

LESSON 1: THE MEANING AND IMPORTANCE OF TOURISM AND HOSPITALITY

 The Relationship of Tourism and Hospitality

 The tourism and hospitality industries strongly affect one another. The
component of this large industry includes:
o Food and Beverage Services/Component
o Lodging Services/Component
o Recreation and Entertainment Services/Component
o Travel-Related and Tourism Services/Component
 Transportation
 The main purpose of transportation is to make it possible for people to go
from one place to another. The common means of transportation are
automobiles, recreational vehicles, buses, trains, ships, and airplanes.
 Travel Agent
 A travel agent is one who sells travel services in travel agencies. He or she
sells travel services that are assembled by others into “packages”.
 Tour Operator
 A tour operator are wholesalers who make the necessary contacts with
hotels, airlines and other providers of travel services and devise packages
which will appeal to retail buyers.
 Definition of Tourism in other people
 Professor Hunziker and Krapf of Berne University, Switzerland
o sum of the phenomena and relationship arising from the travel and
stay of nonresident, in so far as they do not lead to permanent
residence and are not connected to any earning activity
 In Britain
o temporary short-term movement of people to destination outside the
places where they are normally live and work
 Tourism Society in Cardiff
o defined in terms of particular activities selected by choice and
undertaken outside the home environment
 Tourism
 Tourism in the pure sense is essentially a pleasure activity in which money
earned in one’s abode is spent in place visited. Tourism therefore is
distinguished from the concept of leisure and recreation in one hand, and
from travel and migration on the other hand.
 Hospitality
 The word hospitality derived from the Latin word hospitare, which means “to
receive as a guest.” Several related words come from the same Latin root
including hospital, hospice, and hostel.
 Meaning of Tourist
 In 1937, the league of nation defined tourist as;
o A tourist is a person who visits a country other than that in which he
or she usually resides for a period of at least 24 hours.
 In 1963, a united nations conference on international travel and tourism
recommended a new definition of a visitor as; (Any person visiting a
country other than that of earning money.)
o Tourist - temporary visitors staying at least 24 hours
o Excursionist -Temporary visitors staying less than 24 hours in the
destination visited
 Elements of Travel
 Distance - What must consider the difference between local travel or
traveling within a person’s home community and nonlocal travel or traveling
away from home. It excludes commuting to and from work and change in
residence. Trip is defined as; each time a person goes to a place at least 100
miles away from home and returns.
 Length of Stay at the Destination - The definition of tourists and excursionist
as proposed as a WTO is largely based on length of stay.
 Residence of the Traveler - The residence or origin of the traveler is the third
basic element of travel. For business and research purposes, it is important to
know people live.
 Purpose of Travel
o Visiting friends and relatives
o Conventions, seminar, and meetings
o Business
o Outdoor recreation
o Entertainment
o Personal
o Others
 The Nature of a Tour
 Domestic Tourism - refers to travel taken exclusively within the national
boundaries of traveler’s country.
 International Tourism - involves the movement of people across
international boundaries.
 Package Tour - sometimes called inclusive tour; an arrangement in which
transport and accommodation is bought by the tourist at an all-inclusive price
and the price of individual element cannot be determined by the tourist.
 Independent Tour - is an arrangement in which the tourist buys these
facilities separately, either making reservations in advance through a travel
agent or en route during his or her tour.
 The Tourist Product
  In a narrow sense, the tourist product consists of what the tourist buys. In a
wider sense, the tourist product is a combination of what the tourist does at
the destination and the services he or she uses during his or her stay.
 Characteristics of a Tourist Product:
o Service
o Large Psychological in its attraction
o Tends to vary in standard and quality over time
o Supply of product is fixed
 The Tourist Destination
 The tourist destination is a geographical unit where the tourist visits and
stays. The success of a tourist destination depends upon the interrelationship
of three basic factors:
o Attractions – may be site or event. Site attraction is one in which the
destination itself has appeal, while an event attraction is one in which
tourist are drawn to the destination solely because of what is taking
place there. Attraction may also be natural or man-made.
o Amenities or facilities – includes accommodation, food, local
transport, communication and entertainment at the site.
o Accessibility – having regular and convenience of transport in terms
of time/distance to the destination from the originating country at a
reasonable price.
 Tourist Services
 The travel and stay of tourist give rise to a wide range of services;
o Passenger Transport
o Accommodation, food and beverage, and entertainment
o Travel agent and travel operator
o Others (information, sight-seeing, shopping, and etc.)
 Characteristics of Tourism and Hospitality
 In tourism and hospitality, the product is not brought to the costumer, rather
the costumer has to travel and go to the product to purchase.
 In tourism and hospitality, the product is not brought to the costumer, rather
the costumer has to travel and go to the product to purchase.
 Tourism and hospitality is a labor intensive industry.
 Tourism and Hospitality is people-oriented.
 Tourism and hospitality is a multidimensional phenomenon.
 The tourism and hospitality industry is seasonal.
 The industry is dynamic.
 Importance of Tourism and Hospitality
 Contribution to the balance of payment. - Cultural Enrichment
 Dispersion of development. - Educational Significance
 Effect on general economic development. – Vital force of peace
 Employment opportunities.
 Social benefits.
LESSON 2: THE HISTORY OF TOURISM AND HOSPITALITY

 Early Tourism
 Travel and exploration are basic to human nature. Man has traveled since the
earliest time although the term tourism was used only in the 19th century.
 Tourism is derived from the Hebrew word torah which means studying,
learning or searching.
 2 forms;
o Travel for business
o Religious travel
 Tourism in the Medieval Period
 During the medieval period, travel declined. After the decline of the Roman
Empire, roads were not maintained and they become unsafe. Thieves
inflicted harm on those who dared to travel. No one during this time traveled
for pleasure. Crusaders and pilgrims were the only ones who traveled.
 Travel derived from the word travail – become burdensome, dangerous and
demanding during this time.
 Tourism during the Renaissance and Elizabeth Eras
 With the Renaissance, a few renowned universities developed so that travel
for education was introduced largely. Travel for education became popular.
 Under Elizabeth I, young men seeking positions in court were encourage to
travel to the continent to widen their education.
 In time it became recognized that the education of a gentleman should be
complete by a grand tour in which scholar from both the middle and upper
classes went on a three-year exploration of the capitals, politics, culture and
society to enhance their education.
 Tourism during the Industrial Revolution
 The Industrial Revolution brought about major changes in the scale and
type of tourism development.
o Modern tourism development
o Spas and Seaside Resorts
o Large City Hotels
o Automobile
o Roads and Railways
o Lake and River Boats
o Air Travel
 Modern Tourism
 Tourism in the 19th Century - Two technical developments in the early part of
the 19th century had a great effect on the growth of tourism. These were the
introduction of railway and the development of steam power.
  Tourism in the 20th Century - At the beginning of the 20th century, pleasure
travel continued to expand, encourage people by the increasing wealth,
curiosity and outgoing attitudes of the people as well as the increasing ease
of such movement. World War I brought about many changes which
influenced the volume of tourism.
 Early post war prosperity, coupled with large scale migration, boosted the
demand for international travel. Interest in foreign travel was further
enhanced by firsthand experience of foreign countries. New forms of mass
communication stimulated curiosity about other countries.
 After World War I, form of travel began to change radically. The railways as a
means of travel declined with the introduction of the motor cars. Motorized
public road transport and improved roads conditions led to the popularity of
seaside tours.
 World War II also led to increased interest in travel and progress in aircraft
technology.
 After the post-war recovery years, there was an increase in private car
ownership.
 The post-war economic recovery provided an increase in discretionary
income and leisure time, which many people converted into increased
recreation and travel.
 History of the Hospitality Industry (Ancient Period – The Sumerians)
 The recorded history of the hospitality industry began with the Sumerians, a
group of people who lived in Mesopotamia near the Persian Gulf at about
4000 BC.
 Sumerians became prosperous, as well as skilled farmers and cattle breeders.
The Sumerian farmers were able to produce such abundant harvest that they
were able to sell their surplus grain to people in other part of the region.
 The Sumerians invented money and writing as a means to record and settle
their business transactions.
 In addition to growing and trading grains, The Sumerians converted it to
alcoholic beverages or beers which became the most common consumed
beverages. The Sumerian beverages were safer to drink than their water.
 Since the states covered a large geographic area, Sumerian traders required
the services of travelers namely food, drinks and shelter. Hence local
Sumerian taverns were established, making them the first hospitality
business.
 These taverns served beers to the local residents. Some of these taverns
attracted criminals and others who meet at the taverns to plot crimes.
 They were commonly tolerated until Hammurabi, the king of Babylon made a
set of laws, carved in stones– known as the Code of Hammurabi. The code
required tavern owners to report customers who planned crimes in these
taverns. The penalty for failure to do was death.
 Pioneers in the Tourism and Hospitality Industry
  Cesar Ritz – general manager of the Savoy Hotel in London, one of the most
famous and luxurious hotels in the world. He made the hotel a cultural center
for high society.
 Ellsworth Milton Statler – considered being the premier hotel-man of all
time. He brought a high standard of comfort and convenience to the middle-
class traveler at an affordable price.
 Conrad Hilton - recognized as the biggest hotel man in the world. He was
described by the New York Times as the Mater of Hotel Finance.
 Howard Dearing Johnson – pioneer of brand leveraging. His name was one of
the famous in the restaurant and hotel business.
 Thomas Cook – recognized as the first professional travel agent. He was the
founder of the world’s first travel agency.
 J. Willard Marriot – founded the Marriot Corporation which has continued to
be an important asset to the hospitality industry
 Ray Kroc – the most financially successful of all hospitality entrepreneurs. He
founded the McDonalds corporation, a multibillion-dollar industry, through
his strong dedication, organizational skills, perseverance and incredible
aptitude for marketing.
 Isadore Sharp – a founder of Four season Regent Hotels, the world largest
hotel chain and multimillion-dollar global hotel empire.
 Ruth Fertel – a founder of Chris Steak House, the large upscale restaurant
chain in the United State. I Ha 59 operations – 54 in the US and Puerto Rico, 5
internationally.
 Origins of Tourism and Hospitality in the Philippines
 Tourism and hospitality industry in the Philippines began when the original
inhabitants of the country roamed around in search of food.
 A more recognizable form was discovered by Ferdinand Magellan and when
galleons or wooden boats sailed between Mexico and the Philippines.
Americans were able to reach Manila after 2weeks onboard.
 The introduction of more comfortable and faster means of transportation
gave the early impetus for tourism and hospitality in the Philippines.
 Travels from other country were provided inland tours by entrepreneurs with
their unregistered private cars called colorum.
 Colorum means illegal tour handling and the illegal use of private vehicle for
public use. It was tolerated by the government authorities at that time since
tourism was not yet developed.
 There were some offices like American Express International which formally
engaged land tours for foreign travelers. Steamship office endorsed tourist to
private cars and coach operators (colorum) who rented their vehicle directly
to tourist.
 There were only a few tourist attractions and destination in the Philippines.
o Manila
o Pagsanjan Falls
o Laguna Lake
 o Tagaytay and Taal Volcano
o Mount Mayon Tour
o Legazpi Tour
o Baguio Tour
o Banaue Tour
o Cebu City
o Zambuanga City
 In 1952, the first tourism and hospitality association in the Philippines was
organized. This was the Philippine Tourist and Travel Association (PTTA),
which was organized to put together all existing traveler establishments
serving both domestic and international travelers.
 Later, the government organized the Board of Travel and Tourist Industry
(BTTT) to regulate, supervise and control the tourist industry.
 In the late 1950’s more hotels and restaurants and entertainment facilities
were established.
 The Philippines had undergone economic, social and political crises starting
1960s up to 70s, which hindered the development and promotion of tourism
and hospitality.
 The Philippines had undergone economic, social and political crises starting
1960s up to 70s, which hindered the development and promotion of tourism
and hospitality.
 Due to this condition the tourist industry was denied the peace and order,
sanitation, financial support and other important factors for the tourism and
hospitality development
 In 1972, after the declaration of martial law, when tourism and hospitality in
the Philippines prospered. This was due to favorable conditions. We became
a “bargain destination” to foreign visitors.
 At present, Tourism and Industry now is the result of the continuous
development and promotion of tourism and hospitality from 1950. However
the growth is not very spectacular compared to our neighbor countries in
terms of tourist arrivals.
 The National Tourism Organization (NTO) of the Philippines or the
Department of tourism has embarked on several plans and programs.
Among these are:
o Increase visitor arrivals especially from nearby markets.
o Increase tourism and hospitality receipts through longer stays and
higher spending per day
o Expand domestic tourism and hospitality through more promotions,
cheaper tour packages and new facilities
o Expand the capability of tourism and hospitality by promoting more
private sector investment
o Improve the standard of service
o Program major tourism and hospitality infrastructure projects
 o Engaged in major tourism and hospitality estate and resort
development
o Classify facilities in tourist site according to international standards
o Strictly enforce the tour facility standards
o Promote self-regulation with in the different sectors of tourism and
hospitality industry
o Complete the national tourism plan and destination tourism plan
o Encourage consumer advertising in selected markets
o Work closely in the private sector in product development
o Develop and strengthen linkages with in the local government, the
private sector and the general public through tourism and hospitality
councils
 International Travel Patterns
 Travel Pattern this influence people for choosing a destination and for
workers in the tourism industry to market a destination effectively. Reasons
for travel; distance, international connection, attractiveness, image, cost,
specific events and etc.
 A substantial proportion of international travel occurs within and between
Europe and the United States. Europe receives the lion’s share of tourist
arrival and receipts.

 Factors that Favor the Growth of Tourism and Hospitality

 Some of the positive factors that hastened the growth of tourism and
hospitality are:
o Rising disposable income for large section of population
o Growth in the number of retired persons who have the desire and the
energy to travel
o Increase the discretionary time
o Greater mobility of the population
o Growth in the number of singles
o Greater credit availability through credit cards and bank loans.
o Higher educational level.
o The growth of cities.
o Simplification of travel through the package tour
o Growth of multinational business
o Modern transportation technology
o Shift in values
o Advance in communication
o Smaller families and changing roles
LESSON 3: THE ECONOMIC OF TOURISM AND HOSPITALITY

 The Role of Tourism and Hospitality Economic Development

 Several developing countries have used tourism and hospitality development
as an alternative to help economic growth. The reasons for this are:
o there is a continuous demand for international travel in developed
countries;
o as income in developed countries increases, the demand for tourism
and hospitality also increases at a faster rate;
o developing countries need foreign exchange to aid their economic
development.
 OECD
 The Organization for Economic Cooperation and Development (OECD) has
concluded that tourism and hospitality provide a major opportunity for
growth to countries that are at the intermediate stage of economic
development and require more foreign exchange earnings.
 Tourism and hospitality is an invisible export which differs from international trade
in many ways.
 In tourism and hospitality, the consumer collects the product from the
exporting country, thereby eliminating the freight costs for the exporter
 International tourism and hospitality is both price elastic and income elastic.
 By using specific fiscal measures, the exporting or tourist-receiving country
can manipulate exchange rates so that those for tourists are higher or lower
than those in other foreign trade markets.
 Tourism and hospitality is a multifaceted industry that directly affects several
sectors in the economy
 Tourism and hospitality bring many more non-monetary benefits and costs
than other export industries
 Economic Impact
 When travelers outside the destination area spend on goods and services
within the destination, tourism and hospitality acts as an export industry by
bringing in revenues from outside sources. Tourist expenditures also increase
the level of economic activity in the host area directly. Many countries have
utilized tourism and hospitality as a means to increase foreign exchange
earnings to produce investment necessary to finance economic growth.
 The tourism and hospitality industry’s economic impact on a destination area
can be immense since it provides a source of income, employment, and
foreign exchange.
 Undesirable Economic Aspects of Tourism
  Some undesirable economic aspects of tourism and hospitality are higher
prices and economic instability. Because of additional demand and/or
increased imports, tourist purchases may result in higher prices in a
destination area. This would mean that local residents would also have to pay
more for products and services.
 Since pleasure travel is a discretionary item, it is subject to changes in prices
and income. These fluctuations may result in economic instability.
 How to Maximize the Economic Effect of Tourism and Hospitality
 Growth Theories - Some economic growth theories have been proposed to
maximize the economic effect of tourism and hospitality within a destination
area. These are the theory of balanced growth and the theory of unbalanced
growth.
o Theory of balanced growth suggest that tourism and hospitality
should be viewed as an important part of a broad-based economy.
o Theory of unbalanced growth see tourism and hospitality as the spark
to economic growth.
 Economic Strategies
 The key to maximizing the economic effects of tourism and hospitality is to
maximize the amount of revenue and jobs developed within the region. To
attain this objective, some economic strategies have been adapted, such as
import substitution, incentives, and foreign exchange.
o Import Substitution
 It imposes quotas or tariffs on the importation of goods which
can be developed locally. It also grants subsidies, grants, or
loans to local industries to encourage the use of local
materials. Its objective is to minimize the leakage of money.
o Incentives
 The wise use of incentives can encourage the influx of capital,
both local and foreign, necessary to develop tourism and
hospitality supply.
o Foreign Exchange
 Many countries have placed restrictions on spending in order
to maximize foreign exchange earnings.
 They have limited the amount of their own currency
that tourists can bring in and take out of the
destination to ensure that foreign currency is used to
pay bills in the host region.
 Tourists may be required to pay hotel bills in foreign
currency.
 Visitors may be required to show that they have
enough money for their stay before they are permitted
to enter the country or they may even be required to
enter with a specified amount of foreign currency for
the duration of their visit.