Introduction to Tourism Chapter 1

Tourism According to World Tourism Organization (WTO) tourism is the world’s largest industry According to World Tourism Organization (WTO) tourism is the world’s largest industry Estimates of economic impact vary widely depending on the definition used to describe “tourism” Estimates of economic impact vary widely depending on the definition used to describe “tourism”

The Definition of Tourism Umbrella concept meant to cover all fields or sectors of travel related business Umbrella concept meant to cover all fields or sectors of travel related business The book definition… The book definition… Encompasses travelers away from home/business and people who provide a service to make travel easier or more entertaining. Encompasses travelers away from home/business and people who provide a service to make travel easier or more entertaining. Our definition… Our definition… An interrelated group of businesses who serves the needs and wants of the travelers. An interrelated group of businesses who serves the needs and wants of the travelers. Definitions change depending on where you are Definitions change depending on where you are Knowing the definition of a region is important when accurately assessing effects of tourism on an economy Knowing the definition of a region is important when accurately assessing effects of tourism on an economy

Tourism Economics Measures amount of travel and its economic consequences directly, indirectly and induced Measures amount of travel and its economic consequences directly, indirectly and induced Methods are constantly modified to collect travel information Methods are constantly modified to collect travel information Complex interactions also take place before, during and after travel, which can effect the economics Complex interactions also take place before, during and after travel, which can effect the economics Psychological- Ecological Psychological- Ecological Sociological- Political Sociological- Political

Tourism as a Business One business made up of other large and small businesses such as… One business made up of other large and small businesses such as… Airlines- Restaurants Airlines- Restaurants Cruise lines- Retail shops Cruise lines- Retail shops Rental car companies- Food stores Rental car companies- Food stores Travel marketers- Gas stations Travel marketers- Gas stations Lodging Lodging

Government and Tourism Government has the function of taxing, regulating and promoting tourism Government has the function of taxing, regulating and promoting tourism Economic models, cost/benefit studies used to forecast economic impact in communities, states and regions Economic models, cost/benefit studies used to forecast economic impact in communities, states and regions As the tourist dollar circulates its effect is increased and income multiplier is added As the tourist dollar circulates its effect is increased and income multiplier is added Impact of the tourist dollar on taxes and employment is estimated Impact of the tourist dollar on taxes and employment is estimated

Tourism Integration Many companies involved in tourism own more than one specialized service within the industry Many companies involved in tourism own more than one specialized service within the industry Ownership, cross-ownership, marketing agreements and franchising Ownership, cross-ownership, marketing agreements and franchising For example: Some travel agencies own restaurants and hotels domestically and internationally For example: Some travel agencies own restaurants and hotels domestically and internationally Carlson Travel Group Carlson Travel Group Carlson Travel Group Carlson Travel Group

The Changing Definition of Tourism Due to… Due to… Number of business, governments and researchers involved Number of business, governments and researchers involved Rapid changes taking place in the industry Rapid changes taking place in the industry Economic analysis is limited by reliability and validity of private and government research Economic analysis is limited by reliability and validity of private and government research Definition changes and variable sampling techniques can lead to errors Definition changes and variable sampling techniques can lead to errors

Magnitude of Tourism Economics According to the US Office of Tourism and Travel Industries (OTTI) for 2010… According to the US Office of Tourism and Travel Industries (OTTI) for 2010… Tourism supplied the US with 7.5 million American jobs Tourism supplied the US with 7.5 million American jobs International visitors spent $134 billion dollars experiencing the US International visitors spent $134 billion dollars experiencing the US Impact of tourism varies greatly depending on the spending habits and length of stay of the visitor Impact of tourism varies greatly depending on the spending habits and length of stay of the visitor

Tourism Income and Impact Studies Typically, the higher the Gross National Product (GNP) of a country, the more money tourists from that country are spending per capita Typically, the higher the Gross National Product (GNP) of a country, the more money tourists from that country are spending per capita Origin of Visitor 2010 Canada20.0 million Mexico13.4 million United Kingdom3.9 million Japan3.4 million Germany1.7 million Top 5 International Markets to USA (Arrivals) Data from US Travel

US Domestic Tourism Income Every state has its own tourism impact study Every state has its own tourism impact study Each state has its own definition of “tourism” Each state has its own definition of “tourism” Every states annual economic impact study is on spending type (either business or traveler) is categorized differently Every states annual economic impact study is on spending type (either business or traveler) is categorized differently Sources drawn from local hotel occupancy tax, estimates reported in a number of visitor studies, local visitor surveys, US Dept. of Census, consumer price index, etc. Sources drawn from local hotel occupancy tax, estimates reported in a number of visitor studies, local visitor surveys, US Dept. of Census, consumer price index, etc. The US does not have a Department of Tourism, tourism is strictly the responsibility of each state The US does not have a Department of Tourism, tourism is strictly the responsibility of each state

Tourism in Developing Countries Tourism has become a prospect of growth in 3 rd world countries Tourism has become a prospect of growth in 3 rd world countries However… However… Attractions can be minimal Attractions can be minimal Cost and distance of travel is great Cost and distance of travel is great Safety issues due to unstable governments Safety issues due to unstable governments Hard for countries to profit due to corrupt nature of government Hard for countries to profit due to corrupt nature of government