Chapter 2:

2
Travel and
Tourism Industry
The Relationship of Hospitality to
Travel And Tourism
The Effect of Hospitality, Tourism
and Travel
The Relationship of Hospitality to
Travel & Tourism
Interdependence in the Hospitality and Tourism Network
Distribution through Travel Intermediaries
Choosing Destinations Today
The Relationship of Hospitality to
Travel and Tourism
 The components of the hospitality network may be
independent and competitive business, yet they
share an interdependency that has evolved over the
centuries.
 This relationship can be seen in the roles that
destinations and hospitality facilities play in
motivating people to travel.
 Although travel encompasses all movement, but
not all travel involve tourism.
 Eg.: Refugees, migrant, explorer, nomad, soldier.
 Tourism-related travel – involve the movement of
visitors to a place to enjoy its attractions, events,
hospitality, lodging, foods and entertainment.
 Tourist – people who take trips of 100 miles or more
and stay at least 1 night away from home.
 Excursionist – people who travel to a site and return
home the same day.
Tourism Industry
 Concerned with attractions and events that draw
tourists and excursionist to an area
Interdependence in the Hospitality
and Tourism Network
Tour and Travel Packages
Frequent Flyers/ Guest Program
Familiarization Trip (Fam-trip)
High Tech Amenities
Tour and Travel Packages
 A composite of related services offered at a single
price.
 Might include more than 1 form of transportation.
Frequent Flyer/ Guest Program
 Hospitality and travel business compete to capture
a larger share of business travel.
 Frequent flyers – introduce by airlines.
 Frequent guest – promotions designed to gain
customer brand loyalty.
Familiarization Trip
 Known as Fam-trip.
 A free or reduced-price trip given to travel agents,
travel writers and others in the travel trade, who will
then promote the destination.
 Excellent promotional tool, giving the individual
first-hand experience with facilities, service and
attraction available at the destination.
 Several travel association hold annual trade shows
where suppliers, carriers, destination marketing
group, and intermediaries exhibit.
 Eg.: Matta Fair
 Hotel or individual properties will conduct their own
fam-trip in order to concentrate their marketing and
promotional effort on particular new product
offering.
High Tech Amenities
 Offer extra service to facilitate business traveller
target market.
 Eg.: fax machine, credit card-operated phone,
business radio, business centre, internet
 Technology advance enable customer to purchase
ticket online, pre-check flight status, self check in
and print boarding pass from remote locations.
 Majority of the airport offer check-in via
automated KIOSK hardware.
 Eg.: Air Asia, Firefly
 Female Business Traveller – service demanded
most where business centre with faxes, copier and
personal limousine service, 24hrs room service
and two line telephone.
 Suggested safety and security measure included
not calling out the room number of a person
checking in, valet parking, parking lots and visible
security guards.
Distribution through Travel
Intermediaries
Retail Travel Agents
Tour Wholesalers & Operators
Corporate Travel Managers
Incentive Houses
Meeting Planners
Distribution Through Travel
Intermediaries
 Middlemen are business firm distribute product
from the producer to the clients.
 Travel middlemen are called Travel
Intermediaries.
 Eg.: retails travel agent, travel wholesaler and
operators, corporate travel manager, incentive
houses, meeting planner.
Retail Travel Agents
 A retailer in travel services who receive income directly from
supplier (airlines, hotel, car rental companies).
 A retail travel agent also serves as a counsellor, advertising
traveller on and recommending destinations, hotels, and
carriers.
 Used to book many of the arrangements for international
travel and tourism consumer.
 However, today individual leisure and business
travelers able to book their own air travel,
accommodations and transportation though internet.
Tour Wholesalers & Operators
 A company or an individual who designs and
packages tours.
 A tour package may include airline seats, hotel
rooms, meals, ground transportation or car rental
and visit to tourist attractions.
 Tour package usually less money.
 Once tour package is designed, a tour wholesaler
sells the packaged directly to clients, retail travel
agents or on Web site.
 Three types of tour wholesalers are:
1. Charter Operator- assembles a package tour
and sells it to public or tour operators.
2. Tour Operators- may then resell the package to
groups of tourists. Include an escort or guide.
3. Inbound Operators- specialize in providing tour
packages
to international travelers.
Corporate Travel Managers
 Many large corporations have in-house travel
departments headed by a corporate travel
manager that will handles all aspect of travel rate
travel manager.
 Also handles all aspects of travel arrangements for
employees of the corporation.
 Many corporations think that an in-house manager
can reduce their travel costs and increase their
bargaining power in negotiating prices for hotels,
carriers, and other types of travel services.
 The clients of the corporate travel manager are
employees of the company, and most of the travel
arrangements are for business purposes.
Incentive Houses
 An incentive house manages incentive travel.
 Incentive travel is a marketing and management
tool currently used by many North American
corporations to motivate clients, salespeople, and
other employees to meet sales objectives.
 Case studies show that incentive travel can be
powerful management and marketing tool.
 Usually, incentive travel
redemption occurs at exotic
destinations.
 Destination promoters and
marketers are well aware of
this phenomenon and
position their product
accordingly.
Meeting Planners
 The increasing number of conventions and
meeting has led to the creation of the position of
professional meeting planner.
 A meeting planner, whether independent or an
employee of an association or corporation,
coordinates every detail of meetings and
conventions, which can be complicated affairs.
 Involved in planning a meeting for a thousand or more
people-booking all the rooms, making sure meeting
rooms have proper seating and presentation equipment,
arranging air travel and ground transportation, planning
meals and activities, and making sure attendees have
their tickets and the necessary information on time.
 Meeting planners need specialized knowledge and skills
to handle all these detail for an event efficiently.
 Meeting planner is a must for successful meeting or
conventions.
Choosing Destinations Today
Business Activities
Leisure- Time Activities

Multiple Motivations
Choosing Destinations Today
 Travellers today avail themselves of hospitality
services for many of the same reasons as in the
past.
 The two main reasons for travel are business and
leisure-time activities.
Business Activities
 Business travel has come an important part of the
hospitality and tourism industry.
 Destination choice for the business traveller is rarely a
matter of personal taste or preference.
 Although demand for business travel is elastic,
meaning demand changes with economic conditions.
 Whether the economy is good or bad, certain types of
business travel must still take place.
 Business travel is also less seasonal than pleasure travel.
 Business travel allows hotels and other hospitality
organizations to attract revenue that balance out the peak
and troughs of leisure-time travel.
 However, business traveller competition is fierce.
 Large segment of business travel are meetings and
conventions.
 Convention referred to a meeting with large numbers of
people in attendance.
 Conventions are held by large corporations,
government agencies, and other organizations
know as SMERF (social, military, educational,
religious, and fraternal groups).
 The term congress is often used instead
convention.
 Trade shows and expositions, held mainly for
information changes
among trades people.
 Business and professional people travel to
meetings and convention for variety of reasons:
a) to learn about the latest trends in an industry
b) to take part in training programs
c) to see demonstrations of new technology
d) to meet contacts, and
e) to find out about the competition.

Leisure- Time Activities
Leisure-time destination choices and motivations for travel can be group into common
categories.
 Generally, people evaluate more than one category when they make the decision to
travel.
a) Visiting Friends & Relatives
b) Education
c) Culture
d) Nature
e) Recreation
f) Historically Significant Places
g) Events
h) Religion
i) Health
j) Other Factors
Multiple Motivations
 Any one destination may be chosen for a number
of reasons.
 For example : A business trip might be planned to
coincide with the blooming of the cherry
blossoms, a thrilling sight that draws people to the
city year after year.
The Effects of Hospitality,
Tourism & Travel
Economic Gains & Costs
Sociocultural Impact
The Effects of Hospitality, Tourism
& Travel
 Many countries and destination areas seek the
advantages that make tourism attractive.
 A healthy tourism trade benefits countries
economically, socioculturally and environmentally.
Economic Gains & Costs
 When a destination is developed for tourism, the
wave 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
 Tourists usually spend money during their stay at a
destination.
 Visitor spending provides income and profit for
many businesses, including hotels, campgrounds,
restaurants, service stations, golf courses, grocery
stores, and souvenir shops.
 Business travel to a destination for conventions
and meetings directly benefits transportation
businesses, hotels, and restaurants.
 Almost everyone living in the destination area
receives some economic benefits directly from
business travel.
 Tourism also generates government revenue from
direct taxation of tourism business and tourist.
 Local, state, and national governments receive
revenues from sales taxes, room taxes, alcohol and
gasoline taxes, and user fees for campgrounds,
parks, toll-roads, and other amenities.
 Increased government revenue that may be used to
improve the area’s infrastructure can elevate the
quality of life for local residents.
 The flow of tourism dollars into a local economy
involves direct and indirect spending.
 Direct spending is money that goes directly
from the traveller into the economy. Includes
payments for hotel rooms, restaurant meals,
rental cars, recreation, entertainment, souvenirs,
and miscellaneous items.
 Once the money has reached the owners of the
tourist facilities, it is respent. The respending,
which is called indirect spending.
 This respending, which expands 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.
 One concern is 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.
 Another economic cost is leakage, or money that
flows out of the local economy to purchase outside
resources.
 For example, hotel beds, bedroom fixtures,
elevators, and air conditioners may have to be
imported.
 Globalization of Tourist and Travel Business- As
cultured attitudes and lifestyle changes contributed
to longer life spans, travellers and brand-wise,
travel more and desire new experienced in both
cultured and event-based tourist experienced.
 This increasing interest in global travel has
prompted development by large, multinational
hospitality entities as well as smaller operations
include ecotourism, community developed projects
and authentic travel experiences.
 The emergency of multinational corporations has
also affected tourism income in destination areas.
 International hotel and restaurant chains have
opened properties throughout the world. Much of
the profit from these businesses return to the home
countries.
 The payment of airfares to foreign-owned airlines is
another way in which countries lose tourism
income.
 Income earned by outside investors is another factor
that reduces a country’s tourism revenues.
 Money may also be spent abroad for management
fees.
 Local hotels that are not part of a chain, for
example, may be managed by foreign corporations
to which a fee is paid for their services.
 The imported workers may invest or save some of
their earnings in their home countries.
 Some aspects of leakage are considered necessary.
Necessary leakage refers to the cost of promoting
the destination abroad.
Minimizing Leakage
 Developing countries can minimize the loss of
tourist income. For example, though trade
negotiations, they can reduce imports of tourism-
related materials and support local industries
instead.
 The number of imported managers and
professionals might be reduced if education and
training programs are offered to local employees.
Sociocultural Impact
 Changing Family Lifestyles
 Cultural Awareness & Preservation
 Social Ills
Changing Family Lifestyles
 Many local residents find their lives changed when
they obtain tourism-related employment.
 The change in lifestyle may also lead to demands for
better housing and changes in dress and eating
habits.
 When local people adopt practices from tourists, this
is known as the demonstration effect.
 The demonstration effect can have a negative
outcome, though, if local residents come to realize
that, even with their increased income, they cannot
afford to live like the tourists.
 Traditional relationships between the young and the
old may change as young people take jobs in tourist
businesses.
 Established local trades or industries may suffer as
workers a drawn toward tourism.
 A young man whose father and grandfather both
farmed for a living may decide that instead of
following the family tradition he would rather work
toward managing a hotel.
Cultural Awareness & Preservation
 Integrating host culture values and perspectives
with those of inbound tourists may prove to be
complex and require mitigation efforts to bridge
the divergent cultural perspectives.
 However, one positive effect of tourism is an
increased understanding among people of different
nation.
 Tourism can also help preserve historical sites and
culture.
 Tourism has also been credited with helping
traditional arts and crafts survive.
 Tourism can contribute to the undermining of social
standards and to the commercialization of a culture.
Some people say that local artistic standards suffer
when reproductions of native crafts are mass-
produced for tourist consumption.
 They also claim that commercialization has a
negative effect on local religious and social customs.
 Social Ills
 Social ills include such problems as crime, displacement,
and discrimination.
 Organized crime and prostitution are sometimes
associated with tourism.
 Tourism can cause displacement if local residents find
they can no longer live in their community after it has
been newly developed as a destination.
 The negative effects of tourism may include
discrimination. Hiring and promotion practices of
corporations new to an area may be discriminatory
against local employees.
 The impacts of tourism on the local environment can
cause harm to sensitive heritage sites.