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Chapter 3

Tourism

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

After Reading and Studying This


Chapter, You Should Be Able to:

Define tourism
Outline the important international and
domestic tourism organizations
Describe the economic impact of tourism
Identify promoters of tourism
List reasons why people travel
Describe the sociocultural impact of tourism
Describe ecotourism

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Characteristics

Year-round economic driver


Accounts for 10.2% of world GDP and 7.8%
of global workforce
Employer of 214 million people or 7.8% of
the global workforce
Spending on tourism is $72.3 billion
Leading producer of tax revenues
Despite Indian Ocean tsunami, SARS, war,
and terrorism, WTTC forecasts 4.6% growth
between 2006 and 2015

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Tourism Offers Greatest Global


Employment Prospects

Trend factors:
The opening of borders despite security concerns
An increase in disposable income and vacations
Reasonably priced air fares
An increase in the number of people with time and

money to travel
More people with the urge to travel

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

The World Tourism Organization


States:
Tourism comprises the activities of people
traveling to and staying in places outside
their usual environment for not more than
one consecutive year for leisure, business,
and other purposes.

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Tourism Can Be Categorized by


the Following Factors:

Geography
Ownership
Function
Industry
Motive

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Airlines
Change occurred in 1978
Purpose is to allow a free market of
competition (fare structures)
Change in companies and the way
airlines are doing business

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Changes Seen Since September


11, 2001
Business travelers spend less
Airlines fuel costs, pensions, and security
costs have risen
Major airlines are laying off employees
Delivery of new jets is delayed
Closing hubs and reservation and
maintenance centers to cut costs

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

The Hub-and-Spoke System

Enables passengers to travel from one


smaller city to another smaller city via a hub
Hubs are the centers for connections around
the world
Benefits:
Airlines

can service cities at a lower cost


Airlines can maximize passenger loads from small
cities, thereby saving fuel

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Figure 3-2
The Hub-and-Spoke System

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Cruise Ships

A floating resort
8.2 million passengers vacationed on a ship in
2003 alone
Most cruise ships sail under foreign flags:
Lower

labor cost
U.S. ships are not permitted to operate casino-style
gambling
Lower construction costs

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Figure 3-3
Passengers Taking a Cruise Longer Than 2 Days

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Cruise Market Segments


Mass market
Middle market
Luxury market

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

World and Domestic


Organizations

Visit the websites of the following organizations for more


information:
World Tourism Organization
International Air Transportation Organization
International Civil Aviation Organization
Organization for Economic Cooperation and
Development
Pacific Asia Travel Association
Travel Industry of America
World Travel and Tourism Council

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Economic Impact of Tourism

International travelers annually spend about $94


billion in the U.S. on travel-related expenses
20.8 million people are directly employed in the
industry
Travel generates $100 billion yearly in tax receipts
Approximately 46 million international travelers
visit the U.S. each year
Just a 1% increase in the world market would
mean an additional 7.6 million visitors, which
would create 150,000 jobs

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Multiplier Effect

New money spent by tourists is then respent by hotels and restaurants in the
community for goods and services
Leakage occurs when money must be spent
outside the community for goods
unavailable within the community

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Figure 3-5
The Multiplier Effect

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Travel Agencies

Serve as a middle person


Agents use computer reservation systems
Make money on commissions charged to hotels
and car rental companies
Charge clients a fee for their services
What does the future hold for travel promoters?

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Corporate Managers
Work within a large corporation
Can still work with travel agencies
Can also be the meeting planner

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Wholesalers

Consolidated services:
Airlines
Other

transportation carriers
Ground service suppliers

Tours
Sold to the public

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

National Travel Offices

National offices:
U.S. now has an NTO

Private organization

Examples of other NTOs:


Canada
Germany
Australia

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Destination Management
Companies
Service organizations
Meet the needs of their clients
Sell destinations
Meeting planners
Incentive companies

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Reasons People Travel

To experience new and different surroundings


To experience other cultures
To rest and relax
To visit friends and family
To view, or participate in, sporting/recreational
activities

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Reasons for Anticipated


Increase in Tourism

Longer life span


Flexible working hours
Early retirement
Greater ease of travel
Tendency to take shorter, more frequent trips
Increase in standard of living

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Appeal of Travel

Scenic beauty
Pleasant attitudes of
locals
Suitable
accommodations
Rest and relaxation
Airfare cost

Walker: Introduction to Hospitality


Management, 2nd edition

Historic and cultural


interests
Cuisine
Water sports
Entertainment
Shopping facilities
Sports

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Ecotourism
Buzzword
Seeks to minimize the impact of
tourism
Natural environment and native
cultures

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Trends in Tourism
Ecotourism
Number of tourist arrivals will continue
to increase, topping 1 billion by 2010
Governments will continue to recognize
importance of tourism
Increase in number of bilateral treaties

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

More Trends

Internet booking will increase


Technology will continue to advance
Marketing partnerships and corporate alliances
will continue to improve
Ticketless air travel will become commonplace
Managing destinations has become a challenge
Increase in number of boutique airlines
Increase in use of automatic airport check-ins

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

Even More Trends


Continued expansion in the cruise industry
More alternate cruises
Increased concern for health and safety of
travel and tourism
Increase in nature tourism

Walker: Introduction to Hospitality


Management, 2nd edition

2007 Pearson Education, Upper Saddle River,


NJ 07458. All Rights Reserved.

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