Introduction To Hospitality Fifth Edition John R. Walker: Chapter 2: Tourism

introduction to hospitality
fifth edition
john r. walker
Chapter 2: Tourism
Chapter 2 Tourism
• What is Tourism?
• Benefits of Tourism
• Tourism 2020 Vision
• Five Ages of Tourism
• Types of Travel
• Economic Impact
• The Multiplier Effect
• Promoters of Tourism
• Why People Travel
• Social and Cultural Impact of Tourism
• Ecotourism
• Sustainable Tourism
• Cultural, Heritage, Nature, and Volunteer Tourism
• Trends
Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

Fifth Edition Upper Saddle River, New Jersey 07458
John Walker All rights reserved.
Tourism
• World’s largest industry!
• World Tourism Organization:
– A specialized agency of the United Nations
– The leading international organization in
the field
– Plays a role in the
• Development of sustainable tourism.
• Development of universally accessible tourism.
• Continuation of economic development.
• Development of a global code of ethics for
tourism.
Tourism
• The WTO and the World Travel & Tourism
Council declare the travel and tourism
industry to have the following characteristics:
– 24 hours a day, 7 days a week, 52 weeks a
year economic driver
– Accounts for 10.2% of the GDP = Gross
Domestic Product
– Employs 214 million people (7.8% of the global
workforce)
– $73.2 billion in spending in the U.S.
– Leading producer of tax revenues
– 4.6% annual forecasted growth until 2015
Benefits of Tourism
• Tourism:
– Provides governments with substantial tax
revenues
– Offers the greatest global employment
prospects
– This trend is caused by:
• The opening of borders.
• An increase in disposable income and vacations.
• Reasonably-priced airfares.
• An increase in the number of people with time and
money.
• More people with the urge to travel.

Tourism 2020 Vision
• International arrivals expected to reach
over 1.56 billion by 2020
• Europe, East Asia, the Pacific, and the
Americas are the top receiving areas
• There is interdependency between the
various segments of tourism: Travel,
lodging, foodservice, and recreation
– Each segment is, to an extent,
dependent on another for business

Traveling by Train
• One of the main factors that led to
railroads in the U.S. was the need to
move goods and people from one
region of the country to another
• Cars and buses caused a decline in
rail travel
• Facing a possible collapse of
passenger rail services, Congress
passed the Rail Passenger Service
Act in 1970 (amended in 2001)
Rail Travel
• Shortly after, the National Railroad
Passenger Corporation began operation
as a semipublic corporation—established
to operate intercity passenger trains—and
moved in the direction of semi-
nationalization of the American railroads
• The corporation is known today as Amtrak
• While the U.S. tries to rejuvenate rail travel
under the direction of Amtrak, rail service
in other parts of the industrialized world is
far ahead in progress (i.e., TGV’s,
Shinkansen, etc.)
Rail Travel
• Today, trains are becoming more energy and
time efficient
– Maglevs can travel at speeds of over 300
miles per hour, lifted off the ground on a
cushion formed by magnetic forces and
pulled forward by magnets
– They run more quietly, smoothly, and can
climb steeper grades than the conventional
train
– They are more energy efficient, have lower
maintenance costs, and require fewer staff
than comparable transportation; however,
given the high cost of construction, the
concept may not prove viable
Traveling by Car
• Began in 1895 in Germany
• Today, it is the American way of life
• Largest segment of ground transportation
• Creates accessibility to remote locations
• 5,000 rental companies in the U.S.:
– 75% of car rentals take place at airports
– The top four rental car company agencies in
the United States are Hertz, Avis, National, and
Budget

Traveling by Bus
• Convenient and economic mode of
travel
• Allows travelers to relax and enjoy
the ride
• Types of bus service:
– Local, charter, tour, commuter, airport,
urban, and rapid transit
• The largest and most recognized is
the Gray Line
Air Travel
• An integral factor in travel and tourism
• 4,500 planes are in the air over the U.S.
any day
• Competition between airlines to provide
lower fairs has had a significant impact
on increased air travel
• Travelers are paying less, but carriers are
spending more on fuel and other costs
(cutbacks and layoffs)
• Projected travel to reach 1 billion by 2012
Air Travel
• Airline alliances will allow them

access to each other’s “feeder
markets” and to resources that will
enable them to flourish in what will
ultimately be a worldwide
deregulation
– A feeder market is a market that
provides the source—in this case,
passengers for the particular destination

Hub-and-Spoke System
• Enables passengers to travel from

one smaller city to another smaller
city via a hub or even two hubs
• The hub-and-spoke system has two
main benefits:
• Airlines can service more cities at a
lower cost
• Airlines can maximize passenger
loads from small cities, thereby
saving fuel
Figure 2-2
Hub-and-Spoke System

New Airplanes
• The Boeing 787 Dreamliner is able to

fly up to 9,700 miles without refueling
• It uses up to 20% less fuel than
today’s similar-sized airplanes
• The Airbus A380 can carry up to 500
passengers for a distance of up to
8,000 miles

Airline Profit and Loss
• Fixed costs do not change:
– Lease of airplanes, the maintenance of airline-owned or
leased terminals, interest on borrowed money,
insurance, and pensions
• Variable costs rise and fall:
– Wages and salaries, advertising and promotion, fuel
costs, passenger food and drink, and landing fees
– The biggest single cost for airline operation is labor—
which is typically 30–45% of total operating costs
• A key statistic in analyzing profitability is the load
factor—percent of seats filled on all flights,
including planes being flown empty to be in
position for the next day’s schedule

Cruise Ships
• The cruise market has increased
dramatically in recent years
• About 9.0 million Americans cruise
each year
• Rates vary from about $95–$850 per
person per day
• Carnival Cruise Lines is the most
financially successful—netting about
20% of sales
Cruise Ships
• Most cruise ships sail under foreign flags
because they were built abroad for the
following reasons:
– U.S. labor costs for ships, officers, and crew—
in addition to maritime unions—are too high to
compete in the world market
– U.S. ships are not permitted to operate casino-
type gambling
– Many foreign shipyards are government
subsidized to keep workers employed, thereby
lowering construction costs

Cruise Market
• Mass market: Consists of people with
incomes in the $35,000–$74,000 range;
average cost per person is $95–$195 per
day
• Middle market: Consists of people with
incomes in the $75,000–$99,000 range;
average cost per person is $175–$350 per
day
• Luxury market: Consists of people with
incomes higher than $100,000; average
cost per person is more than $400 per day
Economic Impact of Tourism
• International travelers spend $94
billion in travel in U.S.
• $100 billion generated in tax receipts
• 46 million international travelers visit
the U.S. each year
• Tourism industry represents 1 in 11.7
jobs generated

Multiplier Effect
• When a tourist spends money to

travel, to stay in a hotel, or to eat in a
restaurant, that money is recycled by
those businesses to purchase more
goods, thereby generating further use
of the money
• In addition, employees of businesses
who serve tourists spend a higher
proportion of their money locally on
various goods and services
Figure 2-3 Multiplier Effect

Promoters of Tourism
• National Tourism Organization (NTO)
• Travel Industry of America (TIA)
• State tourism offices
• Convention & Visitors Bureaus (CVBs)
• Pacific Area Travel Association (PATA)
• Tour operators
• Travel agencies
• Travel corporations
• Travel and tour wholesalers
• National Office of Tourism
• Destination management companies
Why People Travel
• Main reasons are for pleasure and
business
• 82% of domestic travel is for
leisure/pleasure
• Most popular reasons for pleasure travel:
– To experience new and different surroundings
– To experience new cultures and see how
others live
– Rest and relaxation
– To visit friends and family
– To view or participate in a sporting event
Why People Travel
• Some factors influencing travel:
– Entertainment
– Purchase opportunities
– Climate for comfort (i.e., Florida in the
winter when you live in the North)
– Cost
– Special interests (i.e., golf, location,
etc.)

Why People Travel
• Business travelers travel for business
purposes (i.e., meetings, sales,
conventions, trade shows, and
expositions)
• Business travel is on a decline due to:
– The economy.
– Increased airfares.
– Terrorism.
– A reduction in travel budgets.

Social and Cultural Impact of
Tourism
• Tourism can have both positive and
negative impacts on communities
• World tourism organizations recognize that
tourism is a means of enhancing
international understanding, peace,
prosperity, and universal respect for and
observance of human rights and
fundamental freedom for all
• Provided the number of tourists is
manageable and they respect the host
community’s sociocultural norms and
values, tourism provides an opportunity for
social interactions
Ecotourism
• Ecotourism is focused more on individual values—it is
“tourism with a conscience”
• Those who implement and participate in ecotourism
activities should follow the following principles:
– Minimize impact
– Build environmental and cultural awareness and respect
– Provide positive experiences for both visitors and hosts
– Provide direct financial benefits for conservation
– Provide financial benefits and empowerment for local
people
– Raise sensitivity to host countries’ political,
environmental, and social climate
– Support international human rights and labor
agreements

Sustainable Tourism
• Places a broad obligation on society

• Sustainable tourism should:
1. Make optimal use of environmental resources
that constitute a key element in tourism
development.
2. Respect the sociocultural authenticity of host
communities, conserve their built and living
cultural heritage and traditional values, and
contribute to inter-cultural understanding and
tolerance.
3. Ensure viable, long-term economic
operations.
Cultural, Heritage, Nature,
and Volunteer Tourism
• Culture and heritage are “our legacies from the past, what
we live with today, and what we pass on to future
generations. Our cultures and natural heritages are
irreplaceable sources of life and inspiration.”
• Cultural tourism: Motivated by interest in cultural events
• Heritage tourism: Motivated by historic preservation
• Nature tourism: Motivated by nature
• Culinary tourism: Culinary adventures are at least a
contributing motivation
• Volunteer tourism: Motivations include opportunity to travel
safely and cheaply and to experience different cultures

Trends
• Ecotourism, sustainable tourism, and heritage
tourism will continue to grow
• Tourist arrivals will continue to increase
• Governments will increasingly recognize the
importance of tourism
• More bilateral treaties signed
• The promotion and development of tourism will
move more from the public sector (government) to
the private sector (involved industry segments)
• Technology will continue to advance
• Marketing partnerships and corporate alliances
will increase
• Employment prospects will continue to improve
• Ticketless air travel will continue to increase
Trends
• Increased Internet bookings
• Managing destinations will continue to be a challenge
• Low-cost, no-frills airlines will continue to gain an
increased market share
• Airlines will try to entice travelers to book their trips via
the airline’s website
• Automatic airport check-ins will become more popular
• Cruise industry will continue to expand
• Increase in alternative cruises
• Increased concern for the health and safety of travel
and tourism
• Nature, culinary, and volunteer tourism will increase

The End


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What are the main characteristics of the tourism industry according to the WTO and World Travel & Tourism Council?

What are the main characteristics of the tourism industry according to the WTO and World Travel & Tourism Council?

What are some of the principles of ecotourism?

What are some of the principles of ecotourism?

introduction to hospitality

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

• Airline alliances will allow them

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

• Enables passengers to travel from

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

• The Boeing 787 Dreamliner is able to

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

• When a tourist spends money to

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

• Places a broad obligation on society

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

Introduction to Hospitality Copyright ©2009 by Pearson Education, Inc.

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