Introduction to Hospitality, Fourth Edition John Walker ©2006 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ Chapter 3 Tourism

After Reading and Studying This Chapter, You Should Be Able to: Define tourism Define tourism Outline the important international and domestic tourism organizations Outline the important international and domestic tourism organizations Describe the economic impact of tourism Describe the economic impact of tourism Identify promoters of tourism Identify promoters of tourism List reasons why people travel List reasons why people travel Describe the sociocultural impact of tourism Describe the sociocultural impact of tourism Describe ecotourism Describe ecotourism

Characteristics Year-round economic driver Year-round economic driver Accounts for 10.2% of world GDP Accounts for 10.2% of world GDP Employer of 200 million people or 7.8% of the global workforce Employer of 200 million people or 7.8% of the global workforce Spending on tourism is $72.3 billion Spending on tourism is $72.3 billion Leading producer of tax revenues Leading producer of tax revenues

Tourism Offers Greatest Global Employment Prospects Trend factors Trend factors The opening of borders despite security concerns The opening of borders despite security concerns An increase in disposable income and vacations An increase in disposable income and vacations Cheaper and more exclusive flights Cheaper and more exclusive flights An increase in the number of people with time and money to travel An increase in the number of people with time and money to travel More people with the urge to travel More people with the urge to travel

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.”

Tourism Can Be Categorized by the Following Factors: Geography Ownership Function Industry Motive

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

Changes Seen Since September 11, 2001 Business travelers spend less Airlines’ fuel costs, pensions and security costs are on the rise Major airlines are laying off employees Delivery of new jets is delayed Closing hubs, reservation and maintenance centers to cut costs

The Hub-and-Spoke System Enables passengers to travel from one smaller city via 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

The Hub-and-Spoke System

Cruise Ships A floating resort A floating resort 8.2 million passengers vacationed on a ship in 2003 alone 8.2 million passengers vacationed on a ship in 2003 alone Most cruise ships sail under foreign flags Most cruise ships sail under foreign flags Lower labor cost Lower labor cost US ships are not permitted to operate casino-style gambling US ships are not permitted to operate casino-style gambling Lower construction costs Lower construction costs

Passengers Taking a Cruise Longer Than 2 Days

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

Economic Impact of Tourism International travelers spend about $72.3 billion on travel-related expenses in the US annually 20.8 million people are directly employed in the industry Travel generates $95.6 billion yearly in tax receipts Approximately 40 million international travelers visit the US each year

Multiplier Effect New money spent by tourists is then re- spent 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

The Multiplier Effect

Travel Agencies Serve as a middle person Serve as a middle person Agents use computer reservation systems Agents use computer reservation systems Make money on commissions charged to hotels and car rental bookings Make money on commissions charged to hotels and car rental bookings Charge clients a fee for their services Charge clients a fee for their services What does the future hold for travel promoters? What does the future hold for travel promoters?

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

Wholesalers Consolidated services Consolidated services Airlines Airlines Other transportation carriers Other transportation carriers Ground service suppliers Ground service suppliers Tours Tours Sold to the public Sold to the public

National Travel Offices National Offices National Offices US now has an NTO US now has an NTO Private organization Private organization Examples of other NTO’s Examples of other NTO’s Canada Canada Germany Germany Australia Australia

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

Reasons People Travel To experience new and different surroundings To experience new and different surroundings To experience other cultures To experience other cultures To rest and relax To rest and relax To visit friends and family To visit friends and family To view, or participate in, sporting/recreational activities To view, or participate in, sporting/recreational activities

Reasons for Anticipated Increase in Tourism Longer life span Longer life span Flexible working hours Flexible working hours Early retirement Early retirement Greater ease of travel Greater ease of travel Tendency to take shorter, more frequent trips Tendency to take shorter, more frequent trips Increase in standard of living Increase in standard of living

Appeal of Travel Scenic beauty Scenic beauty Pleasant attitudes of locals Pleasant attitudes of locals Suitable accommodations Suitable accommodations Rest and relaxation Rest and relaxation Airfare cost Airfare cost Historic and cultural interests Historic and cultural interests Cuisine Cuisine Water sports Water sports Entertainment Entertainment Shopping facilities Shopping facilities Sports Sports

Trends in Business Travel Companies are requiring employees to take the lowest reasonable airfare 37% of employees stay over a Saturday night when it will reduce the airfare 77% impose a size limit on rental cars, up from 70% 14% regularly make employees stay in economy hotels such as Hampton Inn or Courtyard by Marriott

Social and Cultural Impact of Tourism Tourism pollution Cultural awareness Higher levels of employment

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

Trends in Tourism Ecotourism Ecotourism Number of tourist arrivals will continue to increase Number of tourist arrivals will continue to increase Governments will continue to recognize importance of tourism Governments will continue to recognize importance of tourism Increase in number of bi-lateral treaties for visas and travel opportunity. Increase in number of bi-lateral treaties for visas and travel opportunity.

More Trends Internet booking will increase Internet booking will increase Technology will continue to advance Technology will continue to advance Marketing partnerships and corporate alliances will continue to improve Marketing partnerships and corporate alliances will continue to improve Ticket-less air travel will become commonplace Ticket-less air travel will become commonplace Managing destinations has become a challenge Managing destinations has become a challenge Increase in number of “boutique” airlines Increase in number of “boutique” airlines Increase in use of automatic airport check-ins Increase in use of automatic airport check-ins

Even More Trends… Continued expansion in the cruise industry Continued expansion in the cruise industry More alternate cruises More alternate cruises Increased concern for health and safety of travel and tourism Increased concern for health and safety of travel and tourism Increase in “nature” tourism Increase in “nature” tourism Royal Caribbean International's newest ship, Oasis of the Seas is the world's largest, accommodates 5,400 guests and weighs 220,000 gross registered tons.