1. Memorandum of Class Exercise 1
Faculty of Management Sciences
Memorandum of Class Exercise 1

2. Question 1:
Identify the three aspects to be included in the contemporary definition of ‘Tourism’

3. Aspects that need to be included in the definition are:
*temporary movement
*(leisure/business) objective
*travel outside place of normal residence

4. Question 2:
Name and describe the elements of the tourism product

5. The Tourist Product Hetero-geneous Tourism Perishable Inseparable
Intangible

6. Intangible Intangible service rather than a tangible good
tourist product cannot be inspected by prospective purchasers before they buy
‘selling holidays is like selling dreams’
tourists are buying more than a simple collection of services, such as an airline seat, hotel room, three meals a day and the opportunity to sit on a sunny beach; they are also buying the temporary use of a strange environment, incorporating what may be, for them, novel geographical features – old world towns, tropical landscapes – plus the culture and heritage of the region and other intangible benefits, such as service, atmosphere and hospitality

7. Heterogeneity Hetero-geneous Intangible
the marketer of tourism is to match the dream to the reality
tends to vary in standard and quality over time and under different circumstances
people are involved in the delivery of the service and this human involvement may not be consistent in behaviour
A package tour or even a flight on an aircraft cannot be consistently uniform: a bumpy flight, or a long technical flight delay, can change an enjoyable experience into a nightmare, while a holiday at the seaside can be ruined by a prolonged rainy spell

8. Inseparability Inseparable Hetero-geneous Intangible
the consumer must be brought to the product and be present for the delivery of the service
production and consumption of the tourism product happens at the same time

9. Perishability Inseparable Hetero-geneous Intangible
inability to be stockpiled for future use
unsold hotel room or aircraft seat
market demand changes, as it does frequently in the business of tourism, therefore, the supply will take time to adapt
a hotel is built to last for many years, and must remain profitable throughout that period - MARKETING

10. Question 3:
Distinguish between a ‘natural’ and a ‘constructed’ destination

11. Varieties of Destinations
Destinations are either ‘natural’ or ‘constructed’
E.g. National parks are left in their natural state of beauty as far as possible, but have to be managed, i.t.o the provision of access, parking facilities, accommodation (such as caravan and campsites) and litter bins

12. Question 4:
Illustrate the simple chain of distribution (COD) in the tourism industry and give an example of each

13. Chain of distribution for tourism
the COD describes the system by which a product or service is distributed from its manufacturing/creative source to the eventual consumers
Travel Principal
(airline, hotel, car rental)
Producers
Tour operator
(packages together travel elements from several principals)
Wholesalers
Travel agent, online and call centre retailers
Retailers
Consumers
Customers
(business and leisure travellers)

14. Question 5:
Explain the different forms of integration in the tourism industry.

15. Integration in the Tourism Industry:
The process of integration takes place between sectors of the tourism industry: either horizontally or vertically
HI: takes place at any one level in the chain
VI: describes the process of linking together the organisations at different levels of the chain
Diagonal integration: describes links between complementary businesses within each level in the chain

16. 1. Horizontal Integration:
Different forms of horizontal integration:
Integration of two companies offering similar (or potential competing) products
e.g. MERGERS = two hotels at the same seaside resort may merge or two airlines operating on similar routes may unite
e.g. CONSORTIUM = an affiliation of independant companies working together to achieve one common benefit

17. 1. Horizontal Integration:
Different forms of horizontal integration:
2. Integration between companies offering complementary rather than competing products
e.g. linking an airline with a hotel chain- both are principals- they are interdependent for their customers
READ MORE ON PAGES

18. 2. Vertical Integration:
Different forms of vertical integration:
Backward vertical integration: (or upward, against the direction of the chain) where a tour operator buys its own airline
fairly uncommon occurrence

19. 2. Vertical Integration:
Different forms of vertical integration:
2. Forward vertical integration: (or downward, in the direction of the chain) where a tour operator buys its own chain of travel agents
more common occurrence as organisations are more likely to have the capital to buy businesses further down the chain (less capital required to go down the chain than up the chain)

20. Question 6:
Explain ‘The Grand Tour’ in full detail. Write in a paragraph of 6 lines

21. The Grand Tour Early 17th century: freedom and quest for learning
High social class
Young gentlemen who travel to complete their education
Often lasting 3 years or more
Licences to travel received from the Crown (Elizabeth I)
Later, it became social and pleasure-seeking young men of leisure, also to develop cultural knowledge of antiquity, architecture, music and arts
READ MORE ON PAGE 27

22. Question 7:
Explain the conditions that favoured the expansion of travel and tourism in the 19th century

23. Conditions favouring the expansion of travel in the 19th century
As seen through the evolution of travel, there are a number of factors that have been at work in encouraging travel
We can divide these into 2 categories:
Enabling factors: factors that make travel possible
Motivating factors: factors that persuade people to travel

24. Question 8:
Explain the influence of the improvements of information technology on the tourism industry.

25. The influence of information technology:
Reservation information has a significant influence on the operations of airlines, tour operators and hotels
A key business tool for many tourism companies
1970: CRS (computer reservation system) used by airlines – tracked seat pricing and availability on different routes and schedules
1980: those systems installed in travel agencies
GDS (global distribution systems): Amadeus, Sabre, Galileo and Worldspan (latter two merged in 2007)
Regional GDSs (Axess-Japan, Abacus-Asia Pacific Region) ‘links’ with the big GDSs

26. The influence of information technology (continued):
The Internet (and PCs!) allowed B2C and B2B systems provided by GDSs
Travellers can now search for holiday information, compare travel companies (review sites) an book online
Online bookings were made possible by airlines, offering cheaper prices online
Experienced travelers book elements themselves & use price comparison websites, expecting short response times, immediate confirmation
Change in COD- airlines become less reliant on travel agents (less commission payments)
Travel agents now offer a specialized service, creating elements acc to tourist’s needs

27. The influence of information technology (continued):
Database and Web technology enable companies to adjust
content to customer profile (tracking sites visited or prior bookings) = matching needs to relevant product offers
Search engines: customers rarely move beyond the first few pages of results
Destination management systems: info on small companies at a destination
Back office systems: databases of customer records (MARKETING)
Wi-fi and mobile technology: previously charged for, now accepted as standard
Mobile-compatible versions of websites
Apps: easily perform specific activities, accessing info and consumer reviews, making reservations and receiving traffic updates

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