introduction to hospitality fifth edition john r. walker chapter 9: tourism

introduction to hospitalityfifth edition

john r. walker

Chapter 9: Tourism

Introduction to HospitalityFifth EditionJohn Walker

Copyright ©2009 by Pearson Education, Inc.Upper Saddle River, New Jersey 07458

All rights reserved.

Chapter 9 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




Tourism

• Hospitality and Tourism Industries are the largest and fastest growing in the world.

• 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




The Five Ages of Tourism

• Pre-Industrial Revolution• Railway Age• Automobile Age• Jet Age• Cruise Ship Age




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 three main benefits:

• Transportation between smaller cities• Provides service to more cities at lower

cost• Transportation from small cities to

reach worldwide destinations




Figure 2-2Hub-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




Industry Severely Impacted




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




Key Terms / Thoughts• Railway / Car / Cruise /Air Developments• Cruise Markets• Southwest and Jet Blue• Load Factor• Hub and Spoke System• Support ___% of Global Workforce• Travel Agent / Tour Operators• WTO




The End

introduction to hospitality fifth edition john r. walker chapter 9: tourism

Documents

benefits of tourism

tourism hospitality

tourism slide

tourism industry

tourism industries

accessible tourism

world tourism organization

various segments of