CHAPTER 2

TRAVEL AND TOURISM:

PARTNERS IN HOSPITALITY
OVERVIEW

 Hospitality, Travel, and Tourism compose the

world’s largest industry and contributes
greatly to global economic development.
 In 2004, worldwide the industry generated

more than $3.4 million in gross output,

whereas in US, it generated more than $1.3
trillion.
 Countries leading in hospitality and tourism

revenues are the US, France, Germany, Mexico,

United Kingdom and Japan
In this Chapter, you will learn:

I. How Hospitality, Travel, and Tourism

interrelate.
II. How Tourist Destinations and
Hospitality Facilities are keys to the
reasons people travel
III. How destinations are promoted and
distributed
IV. What are some of the effects of the
industry
RELATIONSHIP OF HOSPITALITY TO
TRAVEL AND TOURISM
Components of the hospitality network may be
independent and competitive businesses, yet they
share a mutual interdependency.
 Travel encompasses all movement of people but
not all travel involves tourism. (refugees,
migrants, explorers, nomads, soldiers are not
tourists)

 Tourism related travel involves the movement of

visitors to a place to enjoy its Attractions, Special
Events, Hospitality, Lodging, Food, and
Entertainment.
 Tourists – are people who take trips of 100 miles
or more & who stay at least one night away from
home.
 Excursionists – are people who travel to a site &
return home on the same day.

The tourism industry is concerned with attractions

& events that draw tourist & excursionist to an
area.
A destination is a location where travelers choose
to visit and spend time, no matter what their
motivations, needs, or expectations.
Interdependence in the Hospitality and Tourism
Network (eg Hawaiian Islands)
 Being a desirable destination is not enough to
create a successful tourism trade.
 A means to get to the destination must also

exist.
 The success of each component contributes to

the overall success of the industry.

 The interdependence of product and services

making up the network is an important aspect

of hospitality, travel and tourism.
Intertwining within the Network
Through On-line sites,
travel agency or tourism
1. Select a bureau to get information
destination on attraction & available
activities)

Transportation services
During vacations or business to get to destination (own
trips travelers require car, rent a car or using
the public transport)

Lodging
Accommod Souvenirs
Food &
ations /Gifts/Boutique
Beverage
All these components of hospitality & tourism
are interrelated witch each other.
 Without Attractions & Hospitality Establishments,
there is usually no popular destination ;
 Without a popular Destination, there may be no need
for an airport and other vehicle station;
 Without an Airport, there would be less need for a
travel agent.
Interdependence among the components of
hospitality, travel, and tourism is vital in countries
that rely on hospitality and tourism
revenue (eg, Bermuda)

s
Attraction and hospitality destination.
Tour and Travel Packages
A Tour Package
 is a composite of related services offered at a

single price.
 Might include more than one form of

transportation (Caribbean Cruise includes airfare

from the point of departure; sightseeing by
chartered bus, with lunch at a popular restaurant;
airline that offers reduced room rates at certain
hotel)
Advantages
 Save people money
 Arrangement is done for them before they travel
Frequent Flyer/ Frequent Guest Programs
 Innovative program introduced by airlines to
capture a bigger share of business
 Hotel chains adopted the idea, calling it frequent

guest program.

 Theseprograms are promotions designed to

gain customer’s loyalty

 Byflying certain number of miles on the same

the airline or by continuing to stay at the same
brand hotel, travelers earn free trips or free or
upgraded accommodation.
The Alaska Airlines
Business Profile
Alaska Airlines Frequent Traveler
program
 Has been recognized as a leading customer
loyalty program

Benefits:
 Pre-board airplanes
 Eligible for first class seating; accommodations
 Priority seat availability on standby
 Gold members receive VIP customer service and

treated with exceptional care and

professionalism
Familiarization Trips
A familiarization trip is a free or reduced-price
trip given to travel agents, travel writers, and
others in the travel trade, who will then promote
the destination.

 An excellent promotional tool, giving the

individual firsthand experience with the facilities,
services, and attractions available at a destination.

 Hosting a fam trip enables travel and tourism

partners to collaborate and focus on a specific
destination to intensify marketing.
High –Tech Amenities
 Targeted to business travelers (offers services to
facilitate business transactions)
 Technological advances in air travel have made it

possible for business travelers to conduct

business while on flight. ( on-board fax
machines, credit card operated phones at every
seat help business people stay in touch with
their offices and other countries).
 Technology enable customers to purchase

tickets, pre-check flight status, print boarding

pass at remote locations.
 Majority of airports offer check-in via automated

kiosk.
Female Business Travelers
 Growing segment of the US business travel
market.
 Today more than one-third of all business
travelers are women. (Growth – a reflection of
the changing role of women in today’s
economy)
 Suggested security measures – not calling out
room number of person checking in, providing
valet parking, well-lit car park and visible
security guards (has become industry
standards today)
A Day in The Life
of…
A Travel Agency
Manager
Distribution through Travel Intermediaries
Tour Wholesalers &
Retail Travel Agent
 receives income Operators
Company or individual
directly from
suppliers (airlines, who designs & packages
hotels, car rental tour
 sells package tour either
companies etc in the
form of commission TRAVEL directly to clients, through
retail agents, on own e-
(10%) INTERMEDIARIES
commerce Web-site.

Incentive Houses
 Mktg & Mgmt
tool to motivate
clients, Marketing Planners
salespeople &  Independent or employee
employees to meet  coordinates details of meetings &
sales objectives. convention (booking rooms, arranging air &
ground travel, equipment, seating, meals etc
Needs specialized knowledge & skills to
handle event efficiently
CHOOSING DESTINATIONS TODAY
Two Main Reasons To Travel

LEISURE TIME ACTIVITIES

BUSINESS ACTIVITIES
 Visiting friends & relatives
 Business travel is elastic  Education
(changes with economic  Culture
condition but not as elastic  Nature
as leisure)  Recreation
 Attending meetings & convention  Historically significant
 Other reasons places (war memorials)
- to learn latest industry trends  Events
- to take part in training program  Religion
- to see demonstration of new  Health
technology,  Others (ease of access,
- to meet contact, network price, attractive
- to find out about the advertising, previous
competition experience, friendliness of
people, multiple
motivations
 Marketing and Promoting Tourism and Travel
 Marketing → business activities that have the
purpose of satisfying demand for goods and services for
consumers, businesses, and government.

 Marketing Process → estimating the demand,

producing the product (the destination), pricing the
product to satisfy profit criteria, and promoting and
distributing the product.
Destination Development
• Begins with an idea and the selection of a site (natural or
constructed site).
- Natural site (Egyptian pyramids and grand
canyon)
- Constructed site (Disney World)
• Developed by Private Investors or Government (private
developers may work with government agencies during planning,
funding and building stages.
• The infrastructure or underlying economic foundation must be
considered.
• The basic framework includes transportation and communication
system, power facilities and other public services.
Government’s Role in Tour and Travel
Development
Because of economic gains that tourism can bring,
Government develop and promote tourist destinations
by:
• providing Facilities and Capital Investment upkeep at
government -owned destinations (national parks , monuments
and historical attractions.
• Getting involved in the planning and promoting sites that are
developed through the private sector.
• Helping the hospitality industry by reducing or waiving taxes
on establishment to attract businesses to a site.
• Develop and operate mass transit systems (airports, ports,
highways, bus/train stations, also infrastructure – water,
sewage, electrical systems)
• Another role of government, control of the
flow of people across national borders.
• Most government issues, passports to identify
citizen who are travelling or living in another
country.
• Traveler receives a passport from his or her
home country, while a visa is issued by the
country into which the traveler in entering.
 Organization that Promote Tourism and Travel
International level
• WTO (World Tourism Organization) main objective to promote
and develop tourism in the economic, social and cultural
progress of all nations.
- WTO provides a form for addressing problem that affect
tourism everywhere.
• The OECD (Orgn. For Economic Cooperation and Development)
is a multinational organization that was created in 1960 – fosters
the planned development of tourism
• PATA (Pacific Asia Travel Assoc) is a membership organization of
government and private business representatives that promotes
and monitors travel among countries within the Pacific Rim.
National level
Gov promotes their countries in the international tourist
market through national tourist organization(NTOs)
• In US – the United States Travel & Tourism Adm (USTTA)
• In Malaysia – Ministry of Tourism

Promote their countries through publicity campaign,

conduct research and develop plans for destinations.
State Level
In Malaysia, each states has a tourism office that is
typically part of the state's agency for economic
development.
 these organizations are in charge of developing
and implementing tourism programs.
 Produce and distribute literature on destination
and promote convention sites.
 l
Regional and Local Level (US)
Convention and Visitor Bureaus(CVBs) responsible for
promoting tourism.
• Promote the entire region or city as either a business or
pleasure destination.
• All CVB activities are funded by bureau members-suppliers
who benefit from the city’s conventions.
• This promotional tax is managed at the CVB level in order
to supplement city-wide marketing budgets
• Designed to allow stronger competitive thrusts and
intercommunity competition by enlarging the promotional
budget.
 Importance of a Destination’s Image
• The Promoters of the hospitality and tourism
industry publicize destinations.
• Work to make the public aware of destinations and
to overcome negative images that the public may
have.
• Promoters also tempt tourists to try one
destination over another by offering incentives.
• Trendy or “HOT” destination imaging is a valuable
marketing advantage in a competitive marketplace
 The role of destination images

• Major factor in determining where a family or an

individual goes for vacation or where a business entity
hold a meeting or convention.
• Tourist don’t often have firsthand knowledge of
destination and therefore, may choose a specific
destination based on images.
• Every destination has an image.
• One person’s image of a particular place may differ
from the images others have, but highly publicized
images may be commonly held.
 The Source of Destination Images
• Someone who have visited a destination forms an
image of that place.
• Books, Movies, Television, Postcards, Songs,
Photographs, News Stories and Advertising all
contribute to images of various destinations
Example: Austria became a popular vacation destination
for many Americans as a result of the favorable images
portrayed in the movie the sound of music.
• Images of destination are so important that countries
spend millions of dollar to build positive images of their
destination.
 Images and Tourist Satisfaction
A tourist’s overall travel experience can be examined
through the process of destination images modification.
The evaluation process includes a comparison of his
expectation and his actual experiences.
• If the actual experiences live up to the expectation
there is satisfaction.
• If the actual experiences do not live up to expectation,
there is dissatisfaction.
The primary images of a destination as perceived by a
tourist have a lot to do with the tourist’s ultimate
satisfaction or dissatisfaction.
 Functional and Symbolic Images
Tourist destination image can be described in both
Functional and Symbolic terms.
• Functional Image of a destination is associated with specific
activities and attractions at the destination.
• Symbolic Image is related to the personality of the area as
perceived by the visitor.
- Symbolic Image of Disney World is family- oriented
• Functional and Symbolic Images of a destination area are highly
correlated with choice.
- Choosing the particular area for vacation a tourist
consider not only what specific interests and activities
are available, but also whether the destination is ‘my
type of place” to go.
 The Effects of Hospitality, Tourism & Travel
 A healthy tourism trade benefit countries
economically, socioculturally & environmentally.
Economic Gains and Costs
When a destination is developed for tourism, the
number of tourists coming in has a tremendous
impact on the local and national economy.

Sometimes the local economy reaps the benefits; at

other times, it bears the costs and outsiders take
home the gains.
 Economic Gains

 All destination required facilities and services nearby to

satisfy the needs of visitors.
 Tourist usually spend money during their stay at a
destination.
 Visitor spending provides income and profit for many
business, including hotel, restaurant and so on.
 Business travel to a destination for conventions and
meeting directly benefit transportation business, hotel
and restaurant.
 Almost everyone living in the destination area receives
some economic benefit directly from business travel.
 Continue…..
 Destinations (usually local municipalities) invest in
convention centers to attract conventions,
meeting, trade shows, and expositions.
 Tourism also generates government revenue from
direct taxation of tourism business and tourists.
 Increased government revenue that may be used
to improve the area infrastructure can elevate the
quality of life for local residents.
 Direct spending is money that goes directly from
the traveler into the economy. (payment for hotel
rooms, meals, recreation, entertainmentetc)
 Continue….
 Indirect spending, generates more income and
further employment.
- The worker in turn pay for housing , buy
groceries , and so forth. Expand the
economy , is called the multiplier effect.
 The greater the multiplier effect , the more
advantageous tourist spending is to the local
economy.
 Economic costs
Tourism can also have a negative impact:
i. The Opportunity Cost or the benefit that will be
sacrificed by using a resource one way rather than
another.
- The opportunity cost of tourism is the cost of
developing tourism rather than some other
industry. (expanding an airport to bring in more
tourists or allowing a manufacturer to locate a
particular piece of real estate)
-
 ii. Leakage

Another economic cost is leakage or money that flows

out of the local economy to purchase outside resources.
• Many of the good and services that are needed to
satisfy tourist desires have to be imported.
(Construction materials, equipment, hotel beds and so
on may not be available in a large enough quantity in
the destination are).
• Country has a small domestic automobile industry it
may have to import cars or buses to satisfy
transportation needs of tourists. (not all of the direct
& indirect tourists expenditure money stay in the local
economy)
 ctd

• The more imports, the higher the leakage will

be.
• The more develop the local economy, the higher
the multiplier effect.
• The greater the leakage the less the multiplier
effect on the local economy.
 Globalization of Tourism & Travel Business.
• Cultural attitudes and lifestyle changes contribute to longer
lifespan.
• Travelers are brand –wise, travel more and desire new experiences
in both cultural and event- based tourism experiences.
• The percentage of population aged 65 and above will increase
from 15 to 25 by year 2015 contributes to increased travel by the
“silver” segment
• Not only travel increases but travel patterns ( emergence of China
and India)
• Increasing interest global travel has prompted development by
multinational hospitality entities as well as local based tourism
operations to gear towards tourist market in developing countries
 ctd

• These smaller operations include:

Eco-tourism, community-developed projects
and authentic travel experiences
• International hotel and restaurant chains have
opened properties throughout the world – lead
to much of the profits return to their home
countries
• Payment of airfare to foreign-owned airlines
causes a country to lose tourist income
• Income earned by outside investors for
destination development is another factor
that reduces a country’s tourist revenue.
• Money may also be spent abroad for
management fees.(hotels managed by foreign
corporation)
• Foreign labors
Some aspects of leakage are considered
necessary:
• Necessary leakage refers to the cost of
promoting the destination abroad.
• National tourist organization promote their
destination by advertising in media abroad
and by offering fam trip to travel agents and
travel writers.
 Minimizing Leakage
Developing countries can minimize the loss of tourist Income through
 Trade negotiations to reduce imports of tourism-related materials
and support local industries instead.
 Many nations also limit foreign ownership to 49 percents or less.
 Outside control of the hospitality industry might be further
reduced by incentives offered to local hotel employees &
restaurant owners.
- reduce number of imported managers & professionals
- offer education & training to locals
• These measures may help ensure that a greater percentage of
tourist money will stay in a destination area.
• Thus, the economic benefits of destination development can out-
weigh possible negative impact.
Socio Cultural Impact
• The effect of increased hospitality and tourism
activities on the ways individuals interact with
other members of their society also may be
positive or negative.
• Changing family lifestyle and cross- cultural
contacts may result in either positive or
negative influences.
Concerns surround the social ills that can result
from tourism are: i) Changing Family Lifestyles
Many local residents find their lives changed when
they obtain tourism-related employment.
• Young people may enter the job market for the
first time when tourism development occurs.
• The positive side, this may contribute to
increased family income, allowing families to buy
products that were previously beyond their
means.
• Demonstration Effect have a negative
outcome young generations may prefer to
work in hotels rather family traditions like
farming, fishing etc.
 ii. Cultural Awareness Preservation
• Integrating host cultural values and perspectives
with those of inbound tourist may prove to be
complex and required mitigation effort to bridge
the divergent cultural perspectives.
• One positive effect to tourism is an increased
understanding among people of different of
nations. (Tourism is a vital force for peace in the
regard).
• Our stereotypic view of people in another
country can change with a single visit.
• Tourism can also help preserve historical sites
and cultural. (traditional costumes, dances)
• Tourism has also been credited with helping
traditional arts and craft survive.
• Tourism can contribute to the undermining of
social standards and to the commercialization
of a cultural.
• Some people say that local artistic standards
suffer when reproductions of native craft are
mass-produced for tourist consumption.
 iii. Social ills
• Social ills include such problem as crime, displacement
and discrimination.
• Research studies show a correlation between the
growth of tourism and increased crime.
- tourists who do not know their way around a city
may be targets for criminals.
• Tourism can cause displacement if local resident find
they can no longer live in their community after it has
been newly developed as a destination.
• An increased demand for land for tourist facilities can
cause property values to soar.
The negative effect of tourism may include
discrimination.
• Hiring and promotion practice of corporation new to
an area may be discriminatory against local employees.
• Community may discriminate against corporate
employee.
• A sudden wave of large number of outside workers
may cause resentment in local workers. (managerial
positions earning high salaries)
• The culture and lifestyle of the local residents is very
different from that of the newcomers.
- The newcomers may be uncomfortable in their
new situation.
The Impact of Tourism on the Local Environment
 Harm to sensitive heritage sites.
• Carrying capacity (overcrowding) can cause
environment to deteriorate making tourist
experience satisfaction to decrease.
• Exceeding carrying capacity can strained
destination’s water and sewage systems.
Tourism promoters efforts to protect sites and
exotic animals and plants
• Heritage Interpretation International (HII) created in 1991
- to promote and preserve the world’s cultural and
natural heritages.
- HII held a conference in Honolulu, Hawaii, under the
theme of “joining hands for quality tourism”.

This conference sought ways to maintain a balance a between

the preservation of our natural and cultural heritages and
tourism development.
This balance is often called ecotourism, meaning ecologically
sound tourism.
ASTA (American Society of Travel Agents
- encourage the growth of peaceful tourism and
environmentally responsible tourism
- Establish guidelines related to air, land, and sea
travel
- Encourage energy and environmental conservation,
efforts to improve water and air quality, recycling,
safe management of waste, toxic materials, noise
control and community involvement
- Suggests that hospitality and tourism employees be
well-trained in principles of conservations
 END OF CHAPTER

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