1. Chapter 2: Tourism

2. 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

3. 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.

4. 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

5. 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.

6. 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

7. 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)

8. 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.)

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. Figure 2-2 Hub-and-Spoke System

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. Figure 2-3 Multiplier Effect

24. 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

25. 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

26. 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.)

27. 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.

28. 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

29. 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

30. Sustainable Tourism Places a broad obligation on society
Sustainable tourism should:
Make optimal use of environmental resources that constitute a key element in tourism development.
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.
Ensure viable, long-term economic operations.

31. 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

32. 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

33. 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

34. The End