1. PART II. Structural Change in the tourism sector  I. The Industrial Structure

2. The “techno-industrial” space Raw materials Final clients Technological Dimension (vertical) Market dimension (horizontal)

3. The concept of « filière »  The vertical or technological dimension : A “filière” describes a chain of activities transforming raw material to a final product. Give examples

4. Representation of a « filière » Raw materials Transformation transportation distribution Added value

5. Exercice  Represents a tourism « filière »

6. The tourism « filière »  The specificities ?  Comment on every stage. Tourist (the consumer) Transportation Transformation The destination

7. The tourism “attractiveness” : an added value  The role of economic actor (private and public) in the “filière” : Create attractiveness tourism (output) with a specific destination (input).  The attractiveness is not given, is not “natural” : it is an economic output.

8. The creation of tourism value Tour-operators Travel Agencies tourists

9. The structural change (I) : the direct distribution Tour-operators Travel Agencies tourists Retailing biggie (mass-distribution) Consumers (as potential tourists)

10. Question : What is the strategic objective of tour-operators ? Observation : tours-operators are developing their own mass- distribution network.

11. Direct distribution of French T.O. (1997) Tours operators Market share (%) Agencies number Asia184 Cit Evasion18.513 Fram2267 Kuoni2412 Look-voyages2556 Pacha Tours88 Rev’Vacances2.54

12. E-tourism: the “virtual” agency Tour-operators Travel Agencies tourists The new consumer: « Potential tourists » internet

13. Travel sales with internet in USA

15. PART II. Structural Change in the tourism sector  I. The Tourism firm

16. The production function Technical Capital (K) Human Capital (L) Fixed Variable standard qualified The firm Final product Question : apply to a tourism firm. INPUT OUTPUTcombination

17. The firm constraint and objective  OBJECTIVE To create wealth (Profit target) : output value > input value  CONSTRAINT The “optimal” payment of each input: Labor (wage given by labor market) Capital (interest & dividend fixed by financial market) Public factors (taxes fixed by government) Entrepreneur (profit as a residual income)

18. The Market Structure  Perfect competition : firm take the price.  Monopoly: firm make the price  Imperfect competition (oligopoly): firm influence the price. Oligopoly is between pure competition and monopoly.

20. Firm strategies  Strategic objective: to move on industrial space with Externalization Integration (vertical, horizontal) Agreement & alliances

21. Question: Find examples in tourism sector

22. Types of integration in travel & tourism  Concentration (absorption & fusion) in hospitality / tour-operating industries  Alliances in air-companies sector

23. Illustration 1

24. Illustration 2

25. Illustration 3

26. References  Evan N. and Stabler M.(1995) « A future for the package tour operator in the 21st century ? » Tourism Economics Vol. 1 Part 3, 245-263.  Gratton C. and Richards G. (1997) « Structural Change in the European package tour industry: UK/German comparisons » Tourism Economics, Vol. 3, Part 3, 213-226.  Sheldon P.J. (1986) « The tour operator industry analysis », Annals of Tourism Research, vol 13, 349-365.

27. Paper study:  B. Davies and P. Downward (Staffordshire University) Competition and contestability in the UK Package Tour Industry: some empirical observations Working Paper 98.3.

28. Exercice:  Production, cost and profit.