437-international tourism a global perspective

INTERNATIONAL TOURISM:

A GLOBAL PERSPECTIVE

World Tourism Organization

in cooperation with

WTO Education Network

at

University of Hawaii at Manoa, U.S.A.University of Calgary, Canada

James Cook University, Australia

Editor: CHUCK Y. GEEDean

School of Travel Industry ManagementUniversity of Hawaii at Manoa

Co-Editor: EDUARDO FAYOS-SOLÁHead, Education and Training

World Tourism Organization

Copyright © 1997 World Tourism OrganizationTitle: International Tourism: A Global Perspective

1st Edition: October 1997ISBN: 92-844-0231-X

Published by the World Tourism Organization, Madrid, Spain

All rights reserved. No part of this book may be reproduced or transmitted in anyform or by any means, electronic or mechanical, including photocopying, recordingor by any information storage and retrieval system without permission from theWorld Tourism Organization.

The designations employed and the presentation of material in this publication donot imply the expression of any opinions whatsoever on the part of the Secretariatof the World Tourism Organization concerning the legal status of any country,territory, city or area or of its authorities or concerning the delimitation of its frontiersor boundaries.

Printed by the World Tourism Organization, Madrid, Spain

Design and layout: Salvador Ten Barrón - ARCA DesignRevised by: Dana Gynther and Rosamond Deming

SECTION I: PERSPECTIVES OF TOURISM ................................................................1

Chapter 1: Introduction to Global Tourism.........................................................31.1 Introduction ......................................................................................................31.2 Defining Travel and Tourism ............................................................................4

1.2.1 The Need for Definitions .........................................................................41.2.2 Definitions .................................................................................................51.2.3 Forms and Categories of Travel ............................................................7

1.3 History of Travel and Tourism...........................................................................81.3.1 Early Ages.................................................................................................91.3.2 Middle Ages...........................................................................................101.3.3 The Renaissance ...................................................................................111.3.4 The Industrial Revolution.......................................................................111.3.5 Modern Tourism .....................................................................................12

1.4 Components of the Travel Industry .............................................................131.4.1 Transportation and Infrastructure........................................................131.4.2 Accommodations and Hospitality Services.......................................141.4.3 Travel Distribution Systems ....................................................................151.4.4 The Roles of the Public and Private Sectors in Tourism.....................16

1.5 Impacts of Travel and Tourism......................................................................171.5.1 Economic Impacts................................................................................171.5.2 Other Impacts .......................................................................................18

1.6 The Study of Tourism ......................................................................................19

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Table of contents

Chapter 2: Travel Patterns and Trends ..............................................................232.1 Introduction ....................................................................................................232.2 Tourism Growth...............................................................................................23

2.2.1 International vs. Domestic Tourism ......................................................242.2.2 Total International Arrivals ....................................................................242.2.3 World's Top Destinations and Tourism Receipts .................................252.2.4 Tourism Generators and Related Expenditures .................................262.2.5 Tourism Surpluses and Deficits..............................................................27

2.3 Regional Travel Patterns and Trends ...........................................................282.3.1 Europe ....................................................................................................282.3.2 Asia and the Pacific..............................................................................292.3.3 South Asia...............................................................................................312.3.4 Americas ................................................................................................322.3.5 Middle East ............................................................................................332.3.6 Africa ......................................................................................................33

2.4 External Factors That Affect Tourism ............................................................332.4.1 Changing Demographics ....................................................................342.4.2 Technological Advances .....................................................................342.4.3 Political Change....................................................................................352.4.4 Sustainable Tourism and the Environment .........................................362.4.5 Safety and Health .................................................................................372.4.6 Human Resource Development..........................................................37

2.5 Tourism Market Trends....................................................................................372.5.1 Changing Consumer Preferences ......................................................382.5.2 Product Development and Competition ..........................................39

SECTION II: TRAVEL AND TOURISM COMPONENTS AND SERVICES ..................43

Chapter 3: Transportation Services...................................................................453.1 Introduction ....................................................................................................453.2 Historical Development of Passenger Travel ..............................................46

3.2.1 Early Modes of Travel............................................................................463.2.2 Railroads and Ocean Liners ................................................................463.2.3 Automobiles and Airlines......................................................................47

3.3 Rail Service .....................................................................................................483.3.1 Significant Developments in Passenger Service................................483.3.2 Passenger Service Today .....................................................................48

3.4 Automobile Travel and Ground Transportation..........................................493.4.1 Automobiles...........................................................................................493.4.2 Highway Systems...................................................................................503.4.3 Other Ground Transportation ..............................................................51

3.5 Water Travel ....................................................................................................523.5.1 Cruise Ships ............................................................................................523.5.2 Other Water Travel ................................................................................53

3.6 Air Travel ..........................................................................................................533.6.1 Development of Commercial Passenger Service.............................533.6.2 Safety and Security...............................................................................543.6.3 Costs .......................................................................................................55

iv

3.6.4 Airports....................................................................................................563.6.5 Other Aspects of the Airline Industry ..................................................57

3.7 Regulation and Deregulation of Air Travel .................................................583.7.1 Basic Aspects of Regulation ................................................................583.7.2 Pressures on the Bilateral Regulatory System ....................................603.7.3 Economic Aspects of Regulation........................................................61

3.8 Challenges Facing Transportation...............................................................623.8.1 Fleet Planning ........................................................................................623.8.2 Congestion ............................................................................................633.8.3 Safety and Security...............................................................................643.8.4 Environmental Impacts.........................................................................64

Chapter 4: Accommodations and Hospitality Services .................................694.1 Introduction ....................................................................................................694.2 Historical Development.................................................................................704.3 Accommodations Classification..................................................................71

4.3.1 Hotels ......................................................................................................724.3.2 Resort Properties and Time Shares ......................................................744.3.3 The Casino/Destination Property.........................................................754.3.4 National Heritage Accommodations.................................................754.3.5 Bed and Breakfasts ...............................................................................764.3.6 The Emergence of the International Hotel ........................................764.3.7 Financing of International Hotels ........................................................76

4.4 Food and Beverage Establishment Classification .....................................784.4.1 Hotel-related Food Establishments .....................................................784.4.2 Independent Food Service Establishments .......................................79

4.5 Hotel Guests ...................................................................................................794.6 Food Service Clientele..................................................................................804.7 Ownership and Management of Accommodations................................81

4.7.1 Company-Owned and Operated Systems .......................................814.7.2 Franchising .............................................................................................824.7.3 Management Contract .......................................................................834.7.4 Management Measures for Hotels .....................................................844.7.5 Food Service Management and Operations....................................86

4.8 Hotel Operations............................................................................................874.8.1 Reservations...........................................................................................874.8.2 Marketing ...............................................................................................874.8.3 Hotel Staffing..........................................................................................894.8.4 Use of Technology.................................................................................89

4.9 Travel Industry Linkages.................................................................................904.9.1 Marketing Partnerships .........................................................................904.9.2 Hospitality-related Industry Organizations .........................................91

Chapter 5: Travel Distribution Systems..............................................................955.1 Introduction ....................................................................................................955.2 Historical Background ...................................................................................965.3 Types of Distribution Systems ........................................................................97

5.3.1 Direct Distribution System.....................................................................975.3.2 Indirect Distribution System ..................................................................99

v

5.4 Travel Intermediaries....................................................................................1005.4.1 Tour Wholesalers ..................................................................................1005.4.2 Tour Operators .....................................................................................1045.4.3 The Travel Agent..................................................................................1055.4.4 Regulation of Intermediaries .............................................................107

5.5 The Impact of Technology on Travel Distribution Systems ......................1095.5.1 The Link Between Technology and Tourism .....................................1095.5.2 Computer Reservation Systems (CRS)..............................................1105.5.3 Ticketing Automation..........................................................................1115.5.4 The Internet ..........................................................................................1125.5.5 The Future.............................................................................................112

Chapter 6: Special Services and Products ....................................................1176.1 Introduction ..................................................................................................1176.2 Special Segments of Leisure Travel............................................................118

6.2.1 Reasons for the Growth ofSpecial Leisure Travel Services and Products ..................................118

6.2.2 Ecotourism............................................................................................1186.2.3 Cultural Tourism....................................................................................1206.2.4 Rural Tourism ........................................................................................1216.2.5 Adventure Tourism...............................................................................1226.2.6 Health Tourism......................................................................................1236.2.7 "New Age" Tourism ..............................................................................1246.2.8 Educational Tourism............................................................................124

6.3 Special Segments of Business Travel..........................................................1256.3.1 Meetings...............................................................................................1256.3.2 Incentive Travel....................................................................................1266.3.3 Expositions ............................................................................................1276.3.4 Conventions.........................................................................................1286.3.5 Major Components of the MICE Market..........................................129

SECTION III: TOURISM MARKETING AND PROMOTION....................................135

Chapter 7: Tourism Market Segments and Travel Psychology.....................1377.1 Introduction ..................................................................................................1377.2 Describing Tourists by Purpose of Travel ....................................................138

7.2.1 Leisure vs. Business Travelers ...............................................................1397.2.2 Visiting Friends and Relatives (VFR)...................................................1417.2.3 Special Interest Travel .........................................................................1427.2.4 Group vs. Independent Travelers ......................................................144

7.3 Sociodemographic Factors and Life Circumstances .............................1447.3.1 Age .......................................................................................................1447.3.2 Gender .................................................................................................1457.3.3 Education.............................................................................................1467.3.4 Other Factors.......................................................................................146

7.4 Approaches to Tourist Motivation..............................................................1487.4.1 History of Tourism and Motivation .....................................................149

vi

7.4.2 Theories of Travel Motivation .............................................................1497.4.3 Market Research and Motivation .....................................................153

Chapter 8: Tourism Marketing .........................................................................1598.1 Introduction ..................................................................................................1598.2 Marketing Concepts ...................................................................................1598.3 Characteristics of Services Marketing.......................................................161

8.3.1 The Tourism Industry's Service Characteristics .................................1618.3.2 The Tourism Industry's Unique Marketing Challenges .....................162

8.4 Market Segmentation .................................................................................1638.4.1 Characteristics of Effective Market Segments ................................1638.4.2 Bases for Market Segmentation ........................................................164

8.5 The Market Mix .............................................................................................1658.5.1 Product.................................................................................................1678.5.2 Place (Distribution)..............................................................................1688.5.3 Price......................................................................................................1688.5.4 Promotion.............................................................................................170

8.6 Marketing Plans............................................................................................1778.6.1 NTA Marketing Plans ...........................................................................1778.6.2 Environmental Analysis .......................................................................1798.6.3 Competitive Analysis ..........................................................................1808.6.4 Market Trend Analysis .........................................................................1808.6.5 Market Segmentation Analysis ..........................................................1808.6.6 Strategic Goals and Objectives........................................................1818.6.7 Action Plans .........................................................................................181

Chapter 9: Tourism Research and Forecasting..............................................1859.1 Introduction ..................................................................................................1859.2 Tourism Research .........................................................................................186

9.2.1 The Functions of Tourism Research....................................................1869.2.2 The Tourism Research Process............................................................1869.2.3 Sources of Information........................................................................189

9.3 Organizations Conducting Research........................................................1929.3.1 Tourism Organizations .........................................................................1929.3.2 Educational Institutions.......................................................................1939.3.3 Private Organizations or Firms............................................................1949.3.4 Consulting Firms...................................................................................194

9.4 Relationship Between Marketing and Research .....................................1949.4.1 Destination Marketing Research as

a Planning and Evaluation Tool .........................................................1949.4.2 The Tourism Market Research Program ............................................1969.4.3 Accountability Research for Destination Marketing.......................1989.4.4 Making Research Understandable to Practitioners........................200

9.5 The Importance of Forecasting Tourism Demand ...................................2009.5.1 How Tourism Demand is Measured...................................................2009.5.2 Elements of Tourism Demand ............................................................2019.5.3 Forecasting Tourism Demand ............................................................201

vii

SECTION IV: TOURISM IMPACTS ........................................................................209

Chapter 10: Contributions of Tourism to Economic Development ..............21110.1 Introduction ................................................................................................21110.2 Understanding Economic Impacts..........................................................212

10.2.1 Tourism in the Global Economy.......................................................21210.2.2 Tourism in the National Economy....................................................21310.2.3 Impact of Tourism on Employment .................................................213

10.3 Measuring Tourism Economic Impacts....................................................21410.3.1 Identifying Tourism Activity ...............................................................21410.3.2 Structure of the Tourism Industry .....................................................21610.3.3 Supply-Demand and Price Elasticities ............................................21710.3.4 Direct, Indirect and Induced Benefits.............................................21710.3.5 Multiplier Model of Tourism Revenue Turnover ..............................21810.3.6 Input-Output Analysis........................................................................22010.3.7 Tourism Satellite Accounts................................................................22110.3.8 Cost-Benefit Analysis .........................................................................221

10.4 Monitoring Economic Impacts.................................................................22310.4.1 Indicators in Tourism Monitoring ......................................................22410.4.2 The Assessment Process....................................................................225

10.5 Obstacles to Economic Development Through Tourism.......................22510.6 Facilitating Employment in the Tourism Sector.......................................226

Chapter 11: Social and Cultural Aspects of Tourism.....................................23111.1 Introduction ................................................................................................23111.2 Sustainable Tourism....................................................................................23211.3 The Sociocultural Impacts of Tourism ......................................................234

11.3.1 Defining Society and Impacts .........................................................23411.3.2 Major Sociocultural Impacts............................................................23411.3.3 Cultural Change ...............................................................................23511.3.4 Other Impacts ...................................................................................23711.3.5 Factors Influencing the Sociocultural Impacts of Tourism............23711.3.6 Factors Related to Individual Perceptions of Tourism...................23811.3.7 Factors Related to the Size and

Nature of Tourism Development.......................................................239

11.4 Strategies to Manage Sociocultural Impacts of Tourism ......................23911.4.1 Obstacles to Sociocultural Understanding ....................................24011.4.2 Strategies to Manage Sociocultural Impacts................................240

11.5 The Relationship Between Culture and Tourism.....................................24311.5.1 Culture Shaping Outbound Tourism................................................24411.5.2 Culture Shaping Inbound Tourism ...................................................245

11.6 Interpretation for Sustainable Tourism .....................................................24711.6.1 Principles for Enhancing

the Effectiveness of Interpretation ...................................................248

Chapter 12: Sustainable Tourism and the Environment ................................25312.1 Introduction ................................................................................................25312.2 Sustainable Development ........................................................................25412.3 The Physical Environment: A Core Component of Tourism ..................254

viii

12.4 The Impacts of Tourism on the Physical Environment............................25612.4.1 Negative Impacts .............................................................................25612.4.2 Positive Impacts.................................................................................25912.4.3 Factors Which Influence Tourism Impacts ......................................259

12.5 Strategies for Managing Impacts ............................................................26012.5.1 Planning Strategies ...........................................................................26112.5.2 Marketing and Education Strategies..............................................26812.5.3 Research and Monitoring ................................................................270

12.6 Tourism and the Physical Environment: Three Case Studies .................27012.6.1 The Great Barrier Reef, Australia......................................................27012.6.2 Venice, Italy........................................................................................27212.6.3 Mt. Huangshan Scenic Area, People's Republic of China ...........273

12.7 Alternative Tourism.....................................................................................274

SECTION V: TOURISM POLICY AND PLANNING ...............................................279

Chapter 13: The Role of Governmentin Tourism Policy and Administration ..............................................................28113.1 Introduction ................................................................................................28113.2 Government Involvement in Tourism .......................................................28213.3 Reasons for Government Involvement

in Tourism and the Economy....................................................................28313.3.1 Promoting Economic Development ...............................................28313.3.2 Facilitating and Supporting Industries ............................................28413.3.3 Raising Revenues ..............................................................................28413.3.4 Creating a Stable Business Environment ........................................28513.3.5 Pursuing Other Policy Goals.............................................................285

13.4 Roles of the Public Sector in Tourism .......................................................28613.4.1 Policy...................................................................................................28613.4.2 Planning..............................................................................................28813.4.3 Development.....................................................................................29013.4.4 Regulation..........................................................................................290

13.5 Levels of Government Involvement.........................................................29213.5.1 International Involvement ................................................................29213.5.2 National Involvement .......................................................................29313.5.3 Local Involvement.............................................................................294

13.6 National Tourism Administrations (NTAs)..................................................29513.6.1 Role of NTAs .......................................................................................29513.6.2 NTA Structure .....................................................................................29713.6.3 NTAs and the Issue of

Public Sector Involvement in Tourism...............................................298

Chapter 14: The Role of Internationaland Regional Organizations in Tourism..........................................................30314.1 Introduction ................................................................................................30314.2 Types of Tourism Organizations.................................................................30414.3 Purposes and Objectives of Tourism Organizations...............................305

14.3.1 Promotion of Industry Interests ........................................................30514.3.2 Regional Marketing and Cooperation...........................................306

ix

14.3.3 Providing Data and Advice.............................................................30614.3.4 Providing Direct Assistance..............................................................30614.3.5 Addressing Trade Issues ....................................................................30714.3.6 Addressing Environmental and Social Issues .................................307

14.4 Important Tourism and Tourism-related Organizations..........................30914.4.1 World Tourism Organization (WTO)..................................................30914.4.2 Organization for Economic Cooperation

and Development (OECD) ..............................................................31014.4.3 International Civil Aviation Organization (ICAO)...........................31114.4.4 International Air Transport Association (IATA) ................................31214.4.5 World Travel and Tourism Council (WTTC) ......................................31214.4.6 Pacific Asia Travel Association (PATA)

and Other Regional Organizations .................................................31314.4.7 International Bank for

Reconstruction and Development (IBRD).......................................31514.4.8 International Trade in Services and GATS ......................................315

14.5 Challenges for Tourism Organizations .....................................................317

Chapter 15: Tourism Planning and Destination Development .....................32115.1 Introduction ................................................................................................32115.2 The Forms of Tourism Planning..................................................................322

15.2.1 Tourism and Economic Development ............................................32315.2.2 Tourism Master Planning ...................................................................324

15.3 The Need for Tourism Planning .................................................................32415.4 Levels of Tourism Planning in the Public Sector......................................326

15.4.1 National Planning..............................................................................32615.4.2 Local Planning...................................................................................32615.4.3 Destination Planning.........................................................................327

15.5 Actors Involved in the Planning Process .................................................32815.6 Organizing the Planning and Development Process ............................32915.7 Elements of a Tourism Plan .......................................................................330

15.7.1 Demand Analysis...............................................................................33015.7.2 Supply Analysis ..................................................................................33115.7.3 Tourism Impact Analysis....................................................................33315.7.4 Economic and Financial Analysis ...................................................33615.7.5 Action Plan and Recommendations..............................................337

15.8 Factors Affecting Tourism Planning..........................................................337

Chapter 16: Tourism Human Resources Planning and Development .........34116.1 Introduction ................................................................................................34116.2 Human Resources Planning......................................................................342

16.2.1 Assessing Labor Demand.................................................................34316.2.2 Assessing Labor Supply.....................................................................343

16.3 Tourism Employment and Career Opportunities ...................................34416.4 Quality of Service and the Work Force...................................................347

16.4.1 Service Expectations of Travelers....................................................34716.4.2 Sustaining Quality Through Skill Standards .....................................347

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16.5 Tourism Education and Training Providers...............................................35016.5.1 Formal Programs and Courses ........................................................35116.5.2 Employer-based Education and Training.......................................35316.5.3 Education and Training Providers and Skill Standards..................354

16.6 Issues Facing Tourism Human Resources Development........................35516.6.1 Geopolitical .......................................................................................35516.6.2 Economic...........................................................................................35616.6.3 Social ..................................................................................................35616.6.4 Information Technology ...................................................................35616.6.5 Constant Change.............................................................................357

Chapter 17: Conclusion ...................................................................................36117.1 Tourism and Sustainability: Issues for 2000 and Beyond ........................36117.2 The Challenges of Growth........................................................................362

17.2.1 Where Will Tourism Growth Occur?.................................................36317.2.2 What Kinds of Tourism Experiences Will Meet the Market?..........36417.2.3 Who Will Benefit from Tourism Growth? ..........................................36417.2.4 What are the Human Resource

Implications of Tourism Growth?......................................................36517.2.5 Learning from Other Destinations ...................................................366

17.3 Sustainable Tourism and the Future.........................................................36617.3.1 Growth Towards What? ....................................................................36617.3.2 Sustainable Tourism...........................................................................36717.3.3 Cross-cultural Understanding and Peace......................................367

Glossary .............................................................................................................373

About the Authors.............................................................................................395

Bibliography ......................................................................................................399

xi

1 Sec

tion

Perspectives of Tourism

CHAPTER 1Introduction to Global Tourism

CHAPTER 2Travel Patterns and Trends

CHAPTER 1

Introduction to Global Tourism Learning Objectives

Learning objectives

• To define the terms used in the travel and tourism industry.

• To obtain an overview of the historical development of tourism.

• To appreciate the scope and importance of international tourism.

• To identify the major components of the travel and tourism industry.

• To understand the impacts and contributions of tourism to the economic

and social well-being of societies.

• To understand the importance of the study of tourism.

Key terms and concepts

domestic tourism

inbound tourism

infrastructure

international tourism

mass tourism

outbound tourism

same day visitor

tourism

tourists

transportation

travel

travel distribution systems

travel industry components

visitors

1.1 IntroductionThe travel and tourism industry is the world’s largest and most diverseindustry. Many nations rely on this dynamic industry as a primarysource for generating revenues, employment, private sector growth,and infrastructure development. Tourism development is encouraged,particularly among the developing countries around the world, whenother forms of economic development, such as manufacturing or theexportation of natural resources, are not commercially viable.

The reasons people desire to travel are complex and varied.Contributing to the powerful growth tourism has experienced in arelatively short time frame has been the increased accessibility to themany components of the travel experience. Transportation to, from, andwithin parts of the world once considered remote has become moreaffordable for, and within the reach of, the majority of residents in manynations. Accommodations and restaurants in assorted budget categoriesare universally found in major cities, resort locations, adjacent toairports and thoroughfares, and in rural areas. Professional servicesprovided by travel agencies and tour operators, marketing efforts bypublic sector tourism offices, advanced technology that rapidly bringsthe tourism components together in a flash for the potential traveler–allmake today’s travel experience safe, comfortable, and enjoyable.

3

1Introduction to Global Tourism

Learning Objectives

Travel: easierand cheaper

This chapter will help students of the travel and tourism industryunderstand the many positive impacts travel and tourism have on countriesthroughout the world. The importance of tourism terminology isexplained, and definitions for the most common terms are provided. Traveland tourism through a historical context is also treated. The role of tourismas a major contributor to the global economy is explored, as well asindicators which reflect the industry’s rapid growth. Other contributions oftourism are discussed, as is the concept of sustainable tourism. Keycomponents of this multifaceted industry–tourism distribution,transportation, hospitality, tourism administration–are summarized.Finally, basic approaches to studying this dynamic industry are reviewed,bringing us to the 20th century and the mass tourism movement.

1.2 Defining Travel and Tourism

1.2.1 The Need for DefinitionsThe terminology used within this dynamic industry is worthy ofdiscussion. The simple word travel, defined as “the act of moving” bymost dictionaries, has a different definition within the context of thetourism industry. For the purpose of this book, travel is defined as “theact of moving outside one’s community for business or pleasure but notfor commuting or traveling to or from work or school” (Gee, Makens, &Choy, 1989, p. 12). With respect to travel as an industry, there must alsobe the creation of economic value resulting from the travel activity.

Understanding fundamental definitions and concepts used within thecontext of the travel and tourism industry provides an essentialframework from which most discussions on the industry are based.Because of tourism’s intangible nature, common definitions ofterminology benefit the industry in a number of ways.

Standardized definitions help insure that all parties are speaking aboutthe same term or concept with little or no room for variables. This isessential for tourism developers and executives from different regionsor countries when they discuss travel and tourism matters.

In addition, having standardized definitions enables planners to usecomparable data in which to make more informed business decisions.Exact definitions, however, cannot be taken for granted. For the firsthalf of the 20th century, tourism visitor arrivals were barely recordedby many countries and, when they were recorded, methods varied bycountries. It was not possible to effectively compare the total number

4

Chapter 1: Introduction to Global Tourism Learning Objectives

Defining "travel"

Importance ofstandardization

of visitors from one country to another which defined visitors differently,usually counting arriving foreign passport-holding individuals.

Finally, having standardized definitions enables tourism researchers tomake scientifically valid assumptions about the tourism industry. Thisbecomes increasingly important as travel and tourism researchers continueto enlighten public policy makers and private industry executives about theextraordinary role tourism plays in the world’s overall economy. As arelatively new academic discipline, the tourism field lacks the depth ofresearch found in other forms of commerce. As standardized definitionsbecome more accepted, researchers will have an easier time collectingcomparable data and performing meaningful tourism studies.

1.2.2 DefinitionsThe World Tourism Organization (WTO), the major intergovernmental bodyconcerned with tourism, has led the way in establishing a set of definitionsfor general use. In 1991, the WTO and the Government of Canada organizedan International Conference on Travel and Tourism Statistics in Ottawa,Canada which adopted a set of resolutions and recommendations relating totourism concepts, definitions, and classifications. The following definitionsare based on the WTO definitions and classifications and explain thevarious types of visitors (see Figure 1.1):

• Tourism - The activities of persons traveling to and staying inplaces outside their usual environment for not more than oneconsecutive year for leisure, business, and other purposes.

• Tourist - (overnight visitor) visitor staying at least one night in acollective or private accommodation in the place visited.

• Same Day Visitor (Excursionists) - visitor who does not spend thenight in a collective or private accommodation in the place visited.

• Visitor - any person traveling to a place other than that of his/herusual environment for less than 12 consecutive months and whosemain purpose of travel is not to work for pay in the place visited.

• Traveler - any person on a trip between two or more locations(WTO, 1995b, p. 17).

Unfortunately, there is still confusion over these very basic definitions.Even within the same country such as the United States, for example,different states may use different definitions for data gathering andstatistical purposes.

5

Defining Travel and Tourism

Definitions inresearch

6


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1.2.3 Forms and Categories of TravelJust as there are different types of visitors, there are different forms andcategories of travel which take place, varying by traveler, destination,and motive for travel, such as international vs. domestic travel, intra-regional vs. interregional travel, as well as inbound vs. outbound travel.

International and Domestic Tourism

According to the WTO, international tourism differs from domestictourism and occurs when the traveler crosses a country’s border. Notevery international traveler is a visitor, however. The traveler is a visitoronly if the trip takes him or her outside the usual environment, e.g.,workers who cross borders for employment are not considered visitors.The interest in international tourism has always been strong, primarilyfor economic reasons, as this form of tourism plays an important rolein trade and monetary flows among nations.

Domestic tourism has been overshadowed by the interest ininternational tourism, for it was thought initially to have little or nointernational impact, and statistics on the subject were felt to be acountry’s own business. It has become clear, however, that internationaland domestic tourism do relate to each other. Travelers’ choices changedepending on circumstances, and domestic tourism can be substitutedfor international tourism and vice versa under the influence of externalfactors, such as relative growth in real incomes, price differencesbetween countries, and international political conditions. Over the pastfew decades, in many Western countries domestic holidays were largelyreplaced by outbound holidays, influenced by the rise in livingstandards and discretionary incomes, while developing countries haveseen sharp increases in domestic tourism (WTO, 1995b, p. 34).

Regional Travel

Regions are geographically united subdivisions of a larger areacharacterized by definitive criteria or frames of reference. Three typesof regions are used in tourism research. The first one refers togeographical location. Regions such as “the north” or “the west,” areexamples of this type. The second type refers to administrative areas,such as “Province X.” The third combines criteria referring to locationwith criteria of a more physical nature. Examples of this type of regionare “the lake district” or “the Pacific Basin.” Regions of functional typecan also be constructed, such as “urban areas” or “coastal areas.” Theterm interregional travel refers to travel among various regions, whetherin regions found within the same province or state, a country, or various

7

Defining Travel and Tourism

Relationshipbetweeninternational anddomestic

Regional divisions

Interregional andintra-regional

regions throughout the world. Intra-regional, on the other hand, refersdirectly to travel contained within the same defined region, whetherdomestic or international such as travel between countries of East Asia.

Inbound and Outbound Tourism

There are three forms of tourism at any level, in relation to a givenarea, e.g., domestic region, country, or group of countries:

• Domestic tourism, involving residents of the given area traveling(as visitors) only within that area;

• Inbound tourism, involving non-residents traveling as visitors inthe given area;

• Outbound tourism, involving residents traveling as visitors in anarea other than the given area.

If a country is the area of reference, the terms “domestic,” “inbound”and “outbound” tourism can be combined in various ways to derive thefollowing categories of tourism:

• Internal tourism, which comprises domestic and inbound tourism;

• National tourism, which comprises domestic tourism and outboundtourism;

• International tourism, which consists of inbound tourism andoutbound tourism.

To avoid misunderstanding the terms “inbound,” “outbound,”“domestic,” “internal,” “national,” and “international tourism” aregenerally used with a country as the unit of reference. However, itshould be recognized that there are political subdivisions which areless than countries and differ from states such as the Commonwealthof Puerto Rico and the Commonwealth of the Northern MarianaIslands, both part of the United States (WTO, 1995b, p. 27).

1.3 History of Travel and TourismWhile the concept of travel and tourism is as old as civilization itself,history, reveals that travel was not always a pleasurable experience. A briefreview of tourism’s historical development is in order to fully appreciatetoday’s modern tourism environment and to understand tourism’schallenges as the world’s population approaches the new millennium.

8


1.3.1 Early AgesLogical motivators for the earliest of peoples in prehistoriccivilizations to travel focused on gathering food, avoiding danger, andmoving to more favorable climates. As humankind’s skills andtechnologies increased, there was a decreased need in the nomadicexistence, resulting in yet another travel motivator: the trade and barterof goods. As ancient world empires grew in Africa, Asia, and theMiddle East, the infrastructure necessary for travel such as land routesand waterways was created and vehicles for travel were developed. Thebeginnings of official government travel were a direct result of rulerswho sent their emissaries to observe the progress of wars throughoutsprawling empires or to collect taxes from the citizenry. During theEgyptian dynasties, travel for both business and pleasure began toflourish, and hospitality centers were built along major routes and inthe cities to accommodate travelers between central government postsand the outlying territories. During the height of the Assyrian empire,the means of travel were improved, largely for military use, and roadswere improved, and markers were established to indicate distances. ThePersians who defeated the Assyrians made further improvements to theroad systems and developed four-wheeled carriages for transportation.

The early Greeks advanced travel and tourism developments in twoparticular areas. First, through the development of a coin currency, replacingthe need for travelers to carry goods to barter at their final destination forother goods and services. Secondly, the Greek language spread throughoutthe Mediterranean area, making it easier to communicate as one traveled.Since most of the Greek towns and cities were located along the coast, travelwas primarily by sea. Travel for government business was kept to aminimum because of the independent nature of the city-state system, but theGreeks liked to visit other cities for pleasure, particularly Athens. They alsoenjoyed traveling to religious festivals, and events like the Olympic gamesheld every four years at Olympia.

At the height of the Roman empire, the ruling patrician class enjoyedtheir leisure during the periods of relative peace. Like the Greeks beforethem, they observed their own athletic and religious events and traveledto these sites. Sightseeing was also popular with the wealthy Romans,and many visited Greece. A ten-volume travel guide was published in170 A.D. by the Greek, Pausanias. Entitled A Guide to Greece, the guidetargeted the Roman tourist market and described the Grecianmonuments, sculptures, and the stories and myths behind them. Romansalso toured Egypt to see the Sphinx and the Pyramids. Alexandria was

9

History of Travel and Tourism

Early civilizations

The Greeks'contribution

Ancient Romans

a cosmopolitan oasis for Roman aristocracy, since many nationalitieswere represented there including Egyptians, Greeks, Jews, Ethiopians,Indians, and Syrians. Egypt’s weather was also a travel incentive for theRomans, as it offered a sunny, hot, and dry environment. The citizens ofthe Roman Empire also liked to shop when abroad, as most tourists dotoday. The practice of hiding purchases from custom officials probablyoriginated with this class, a result of high duties, typically 25 percent,placed on imported purchases.

Asian civilizations also have a history of leisure travel to resorts, withknown examples of second homes or seasonal retreats in China as wellas in Japan. Chinese nobility and their guests retreated to the summerpavilions and villas in Suzhou, Hangzhou and other scenic areas.

1.3.2 Middle AgesDuring the Middle Ages from about the 5th to 14th century A.D., tradeand travel declined as roads fell into disrepair and overall travelconditions became difficult as well as dangerous. During this period,the Christian Church was the primary impetus for travel with thespreading of monasteries and the Christian religion. Monks and priestsencouraged the public to go on pilgrimages, and by the 14th century,pilgrimages were an organized mass phenomena served by a growingnetwork of charitable hospices with growing ranks of participants frommost social classes. Christians went to Jerusalem and Rome, and eventhough the pilgrimages had a religious basis, they were also seen associal and recreational journeys.

In the latter part of the 13th century, Marco Polo explored the land routesfrom Europe to Asia. In China, Polo discovered a well-developed roadsystem, the first having been built during the Chou dynasty (1122-1221B.C.). Polo’s book on his travels was the West’s main source of informationabout life in the East during this period. Other travel books began to appearwith the advent of the printing press, and Sir John Mandeville’s Travels in1357 was printed in several foreign languages, with descriptions of travelto places as far away as southeast Asia.

By the 15th century there is a record of an actual package tour whichoriginated in Venice to the Holy Land. For the price of the package, thetourist received passage, meals, accommodations, donkey rides, andthe bribe money necessary to avoid red tape. Early versions of today’s

10


Leisure travelin Asia

Christianpilgrimages

Early travelaccounts

"Modern" tourismin medieval era

convenience fast food stands popped up along heavily traffickedpilgrim travel ways. Roadside hawkers during high seasons would sellwine, fruits, fish, meats, bread and cakes from roadside tents.

1.3.3 The RenaissanceTravelers between the 14th and 17th centuries used as their travelmotivator the desire to broaden one’s experience and knowledge. InEngland, Queen Elizabeth I approved a form of travel to groom futurediplomats, and the universities such as Oxford and Cambridge inEngland and Salamanca in Spain provided travel fellowships. Englandalso issued a traveler’s license which was good for two to three years andit disclosed travel restrictions, how much money, how many horses, andservants (usually three) the traveler could take. Tourists also were issuedpassports, but surrendered them at exit posts, and picked up new ones foreach country they visited. Little cash was carried, instead they used a lineof credit which worked like the modern day traveler’s checks. TheElizabethan traveler usually went to Italy, by way of Paris and Frankfurt.

The loosely organized Elizabethan tour later became more highlystructured into what became known as the Grand Tour. The organizedGrand Tour had its start in the mid-1600’s, and its popularity ran throughthe mid-1800’s. The desire to gain new knowledge and experiences werestill the prime motivators of travel for participants of the Grand Tour; andthe Grand Tour was seen as the capstone to educational and culturalattainment of the upper classes. Typically, sons of well-to-do familiestraveled to specific countries to visit historical sites and ruins as well asto study art, architecture and history. There was even a tour guidebookfor the Grand Tour travelers, the 1778 bestseller by Thomas Nugent.

1.3.4 The Industrial RevolutionThe Industrial Revolution, which lasted from about 1750 to 1850created the base for mass tourism as we know it today. This periodbrought profound economic and social changes as workers movedaway from basic agriculture in rural areas into the manufacturingplants and urban way of life familiar to many people today. TheIndustrial Revolution also introduced new machinery powered bysteam for trains and ships. Social changes brought on by changes inoccupations led to the expansion of a new middle class, an increase inleisure time, and for many, a demand for recreational travel activitiesleading to a decline in popularity of the elitist Grand Tour.

11

History of Travel and Tourism

Travel forknowledge

Passports andtraveler's checks

The Grand Tour

Groundwork formass travel

Initially, recreation tourist trips were generally only day trips becausemost people still had only limited discretionary income and a five-daywork week was not commonplace. Toward the end of the 19th century,workers began to get annual vacations. In order to escape congested andpolluted urban areas, many turned to spas and seaside resorts for theirholidays which set the tone more or less for the modern leisure tourist.

Some destinations, until then visited primarily by the wealthy, wereexpanded, while others were newly established to capture this growingmiddle class market. To these destinations, the middle class representeda huge market compared with the small number of the earlier wealthyand aristocratic visitors. What the new tourists lacked in individualspending power, they more than compensated in terms of the totalvolume of arrivals.

1.3.5 Modern TourismIt was the combination of desire, mobility, accessibility, and affordabilitythat made mass travel possible. With the 20th century came newtechnologies such as aviation, computers, robots, and satellitecommunications, which have transformed the way that people live, work,and play. Modern technology is credited with the development of masstourism for a number of reasons: it increased leisure time, providedadditional discretionary income, enhanced telecommunications, andcreated more efficient modes of transportation.

As the world looks ahead to the next millennium, there is little doubtthat tourism will continue to be one of the most dynamic growthsectors of the global economy. Despite periodic recessions, politicalupheavals, wars, and uncertainties about the price and availability offuel, international tourism is now the largest single item in the world’sforeign trade budget. It is three times bigger than world expenditureson defense. No longer an activity reserved only for the privileged few,tourism is now engaged in by millions of people who enjoy new places,seek a change in their environment, and look for meaningfulexperiences. As the new age of tourism evolves, it will be affected bya number of exogenous factors (see Figure 1.2) such as economic andfinancial developments, technological developments and innovations,environmental issues, and marketing factors affecting the structure ofthe travel and tourism operating sector and product development.

12


Beginnings ofvacations

Middle classmarket

Reasons formass tourism

Growth andfuture prospects

1.4 Components of the Travel Industry

1.4.1 Transportation and InfrastructureHow visitors get to, from and within a given destination is theresponsibility of the transportation component of tourism as discussedin Chapter 3. Whether travel is by air, sea, or ground transportation,adequate facilities and services must be in place for the development

13

Components of the Travel Industry

Need for facilitiesand services

Figure 1.2: Factors Shaping the Development of Tourism

Source: World Tourism Organization, Global Tourism Forecasts to the Year 2000 andBeyond, (Madrid: WTO, 1995), p. ix.

Economic andFinancial

Developments

MARKETFORCES

EXOGENOUSFACTORS

Structure of theTravel Trade

Operator Product andService Development

Destination Product Development

TradingDevelopments

TransportInfrastructure

Demographic andSocial Change

Political, Legislative,and Regulatory

Changes

TechnologicalDevelopments

Safety of Travel

Marketing

ComputerReservations Systems

and DestinationDatabases

HumanResources

Development

of a successful destination. For existing tourist destinations, domesticand international tourism is dependent upon the maintenance andimprovements of airport terminals, harbors, and road systems.Sufficient transportation is integral to the success of all othercomponents of tourism. The various modes of transportation work toget visitors, for example, from the airport to their accommodations.From the hotel, the visitor needs transportation to various restaurantsand evening entertainment, to attractions or convention sites the nextday, and back to the airport when the departure date arrives.

The infrastructure refers to components found on or below theground level that provide the basic framework for effective functioningof development systems such as urban areas, industry, and tourism(Inskeep, 1991, p. 119). Infrastructure components such as watersupply, electric power, sewage and solid waste disposal, drainage, andtelecommunications are but a few of the more critical elementsrequired for the various tourism dimensions to operate efficiently.

1.4.2 Accommodations and Hospitality ServicesTourism facilities covered in Chapter 4 include the services whichprovide basic necessities, comfort, and aid to travelers. Because thevisitor is away from home, basic needs–a place to stay, food andbeverage, stores–must be accessible, safe, and convenient.

Accommodations

Accommodations or lodging facilities and their related services arewhere tourists stay overnight during their travels, accounting for a goodportion of the tourists’ total expenditure, typically 20 to 30 percentdepending on quality of accommodation, destination, and purpose oftrip. There are a wide variety of types of accommodations which meetthe demands of various budgets, including bed and breakfastestablishments, European style pensions, youth hostels, campgrounds,recreational vehicle parks, and cruise ships. The hotel, the most commontype of accommodation, has its own categories, extending fromluxurious urban or resort properties, to smaller budget-oriented motels ormotor lodges. Most countries have classification or rating systems foraccommodations, particularly between the hotels and motels, which helpdistinguish the level of service provided to the guests.

14


Varieties ofaccommodations

Food and Beverage

Restaurants, bars and other types of eating and drinking outlets, range insize and service levels from stand-alone operations, to a unit located withina hotel, to small food carts or stalls in a street market. Food and beverageare required by tourists and represent another large source of competitionfor visitor expenditures. The cuisine in itself can be a primary or secondaryattraction for many visitors traveling abroad. Destinations such as Lyons,Paris, Rome, Hong Kong, San Francisco, New Orleans, among manyothers, are well known culinary centers. Some tourists are adventurous andwill try many different kinds of foreign foods. A majority of tourists,however, want to have food and beverage available to them which arefamiliar to them. As a result, a range of cuisine offerings need to beaccessible in a variety of price ranges in any popular tourist destination.

Support Services

Support services include shopping facilities and services at the destinationwhich help fulfill the basic as well as supplementary needs of visitors.Stores which meet the varying demands of visitors include: souvenirshops, duty free stores, laundry facilities, grocery and department stores.Other support services which meet the needs of visitors include tour guideservices, sports and recreation retail and rental shops, as well asentertainment facilities. All these support services not only make the travelexperience more accessible, but fulfill basic needs in addition to the specialextras which make the experience more enjoyable. An added benefit is thatmost of these businesses provide local jobs and opportunities for localentrepreneurship which helps keep money in the host community.

1.4.3 Travel Distribution SystemsThere are several ways to look at the various components and theservices provided by the tourism industry including examining thetourism consumer, the tourism product itself, and the direct andindirect distributors of travel-related goods and services. As discussedin Chapter 5, a travel distribution system involves a process whichbegins with the buyer or customer. The customer typically requires aproduct–an airline ticket, a cruise booking, a hotel reservation or carrental. The direct distributor is the service or business that provides theproduct. The indirect distributor is the travel agency, tour wholesaler oroperator, or specialty channeler, which may or may not be used as anintermediary to get the product to the customer. These distributionchannels serve to link the tourism suppliers and the customers.

15

Components of the Travel Industry

Attitudes towardsfood

Beneficial fortourist andcommunity

Direct/indirectdistributors

1.4.4 The Roles of the Public and Private Sectors in Tourism

It was thought at one time that tourism was primarily a private sectorconcern, since the tourism-related business made the profits andreaped the rewards. It was considered the private sector’s responsibilityto develop and produce services and products for visitors. The publicsector, represented by government, saw little need to invest scarceresources and funds toward an activity that benefited private interests.However, once governments realized the great economic importance oftourism, especially as an “engine of employment” and source of taxrevenue, this attitude changed. Today, there are many interestsconcerned with tourism’s growth and development from the privatesector businesses, both large and small, to the various public sectorgovernment structures (e.g., national, regional, state, provincial,municipalities), and international, regional, and national organizations.

Tourism consists of both public and private goods based on the supplyand allocation of tourism resources. While the private sector is likely tolimit its activities to goods or services that can realize profits, the publicsector represented by governments must look beyond profit motives tothose which will benefit the society as a whole. Public goods mightinclude natural, cultural, and historic attractions and resources whichare maintained and protected by government for the benefit of societyas a whole, and users are likely to benefit from these goods, such asvisiting a national park, without paying for the benefit. Other publicgoods and services provided by government which affect tourisminclude regulation, promotion, and marketing of tourism resources.

National tourism administrations or organizations, whether government-sponsored national tourism offices or private associations, help promoteand monitor tourism development within the context of a particularcountry, while state, provincial, and even municipal organizationspromote and define the growth of tourism for a smaller area of influence.International organizations, some of which are regional or developmentalin nature, provide forums for discussion as well as assistance in tourismmarketing and research, the removal of barriers to travel, and a number ofother functions. Foremost among intergovernmental organizations is theWorld Tourism Organization (WTO), a subagency of the United Nationsrepresenting 130 member states and over 300 affiliate members in 1996.The roles of governments and regional and international organizations arediscussed in Chapters 13 and 14.

16


Government andbusiness interests

Tourismorganizations

Because tourism has the ability to increase the public coffers and createemployment opportunities, the public sector has actively assisted in thepromotion of both international and domestic tourism. A series of governmenttourism offices for marketing purposes–national, regional, or at thestate/province level–are found in most countries. The goals are to promote theregion they represent and ensure sustainable tourism development.

Tourism organizations are found in both the public and private sectorsand are organized by:

• Geography - international, regional, national, state or provincial, local;

• Ownership - government, quasi-government, or private;

• Function or type - regulators, suppliers, marketers, developers,consultants, researchers, educators, publishers, etc.;

• Industry - transportation, travel agents, tour wholesalers, lodging,attractions;

• Motive - profit or nonprofit (Goeldner, McIntosh, & Ritchie, 1995, p. 71).

1.5 Impacts of Travel and Toursim

1.5.1 Economic ImpactsThe travel and tourism industry is a group of economic activities whichcombined makes it the world’s largest industry, the number one generatorof jobs, one of the world’s biggest exports, and a major stimulus forinvestment and growth. Since 1950, when international travel started tobecome accessible to the general public, international tourist arrivalshave risen each year at an average rate of 7.2 percent and internationaltourists receipts by 12.3 percent (WTO, 1994a, p. 1). In 1995,international tourist arrivals exceeded 563 million worldwide andtourism revenues (excluding transport) exceeded U.S. $399 billion (seeTable 1.1). The World Tourism Organization forecasts that by the year2000, international tourist arrivals will reach 702 million, and by the year2010, 1.108 billion arrivals. International tourism receipts grew fasterthan world trade in the 1980s, and now constitute a higher proportion ofthe value of world exports than all sectors other than petroleum products,and motor vehicles/parts/accessories. The contributions of tourism toeconomic development are covered in Chapter 10.

17

Impacts of Travel and Toursim

Tourism: theworld's largestindustry

1.5.2 Other ImpactsThe travel and tourism industry, however, contributes much more to theworld than bolstering economies and providing employmentopportunities. One of the major themes of this book is to explore howsustainable tourism can be accepted universally and applied to tourismdevelopment. The concept of sustainable tourism, loosely defined as themeeting of the needs of present tourists and host regions whileprotecting and enhancing opportunities for the future, will also beexplored in this book. Tourism can have positive environmental benefitswhich include efforts to protect the Earth’s natural and manmaderesources through the establishment of wildlife preserves, therestoration of historical sites and landmarks, and the preservation ofpristine environments. It also has beneficial social and cultural impacts.It helps recognize and promote distinctive cultures and heightens localawareness of indigenous traditions. Tourism has assisted in the revivalof the arts and handicrafts of some host communities, creating ademand for performance centers and cottage industry craft shops.

18


Source: World Tourism Organization,Yearbook of Tourism Statistics,48ed., 1996 and 49ed., 1997.

Year Arrivals (mn) Receipts ($Bn, excl.Transport)

1950 25.3 2.1

1960 69.3 6.9

1970 165.8 17.9

1980 286.2 105.2

1990 459.2 264.7

1995 563.6 399.0

Period (% p.a. growth) Average AnnualPercentage Increase

Average AnnualPercentage Increase

1950-1960 10.6 12.6

1960-1970 9.1 10.1

1970-1980 5.6 19.4

1980-1990 4.8 9.7

1990-1995 4.1 7.5

Table 1.1: International Tourism Activity 1950-1995.

Sustainabletourism

Among the tourism industry’s many supporters, it is believed that tourismcan ease political tensions, and in effect, act as a catalyst for world peace.As foreign borders disappear, whether literally or figuratively, there is anemerging use of the term global village, making the world smaller andmore intimate. The tourism industry and the countries which rely ontourism for overall development, must provide tourists a safe and secureatmosphere, as tourism can only prosper in a peaceful environment.

1.6 The Study of TourismThe study of tourism can be approached through a variety ofdisciplines including economics, business, history, geography, andsociology, to name a few. The travel industry has made both positiveand negative impacts on these disciplines and has become a globalplayer in activities, organizations, and businesses.

Throughout this book, many exciting facets of the travel and tourismindustry will be explored, but it is important to realize that no one partis more important than the other. This industry is unlike any other ascollaborative efforts are not only encouraged but necessary, due to theinterdisciplinary nature of the tourism experience. Each of the keycomponents required for a tourism destination to flourish–traveldistribution, transportation and infrastructure, accommodations andother facilities, and tourism administration–requires the assistance ofeach other in combination with marketing, promotion, facilitation andother “software” aspects of travel delivery. The interdisciplinaryapproach to travel then provides students a means to study tourism,particularly as it has become an increasingly complex industry withsophisticated, informed, and demanding consumers.

Rapid global changes and advancements in technology make the studyall the more essential for today’s tourism managers and planners.Tourism leaders must be familiar with the challenges of meeting theescalating demands of today’s traveling public. Tourism providersknow that if they cannot please or exceed their customers’ needs, thecompetition will be more than happy to fill that demand. To compoundan already challenging environment, today’s tourism developers andmanagement teams must work within the confines of anenvironmentally-sensitive and socially responsible approach tosustainable tourism. Careful attention to the earth’s finite naturalresources, and a sense of social responsibility to host communities andcultures influenced by tourism will continue to be a major factor inwhat encompasses a prosperous tourism industry.

19

The Study of Tourism

Benefits oftourism

An interdisciplinaryfield

The necessityof study

SUMMARY

This chapter has presented the background on the travel and tourismindustry as the largest service industry in the world. The growth ofdomestic and international tourism, the importance of tourismexpenditures, and the contributions of tourism to gross domesticproduct and employment opportunities provide many positive effects.Travel and tourism, when properly planned and managed also bringother benefits than economic ones such as maintaining cultures,preserving the environment, and contributing to peace efforts.

Travel and tourism is a multifaceted industry with many componentsincluding travel distribution, transportation and infrastructure, tourismfacilities such as accommodations, food and beverage establishments,and support services. Both the private and public sectors are involved inthe industry. The challenge for tourism planners and management in bothsectors will be to meet the needs of a more sophisticated traveler, whilebalancing the precious resources of a finite world, preserving nativetraditions and cultures, and taking social responsibility for negativeimpacts on the host community. The next chapter will take a closer lookat travel during the 20th century, travel trends of various countries, aswell as regional and international travel patterns. External factors andtheir possible effect on tourism and other world trends will also beexplored.

DISCUSSION QUESTIONS

1. What are the tourism-related definitions for your state/province andcountry? Do they differ from the WTO definition?

2. Within a historical context, what have been some of the motives fortravel?

3. Besides economic, environmental and cultural benefits, what aresome other benefits of tourism development?

4. What are examples of the various travel industry components whereyou live? How are they interdependent?

5. List some reasons for studying the tourism industry, including yourown.

20


CHAPTER 2

Travel Patterns and Trends

Learning objectives

• To understand the size and significance of international travel.

• To understand the patterns and trends of domestic, regional, and

international travel.

• To describe the factors that affect the development of tourism.

• To review top tourism trends which will have a significant impact on the

industry’s growth worldwide.


computerized reservation system (CRS)

domestic travel

global distribution system (GDS)

international travel

sustainable tourism

tourism expenditures

tourism generators

tourism receipts

travel deficit

travel surplus

2.1 IntroductionThe previous chapter examined the broad-based travel and tourismindustry and illustrated that through most of recent history, travel wasoften an exhausting undertaking. With societal and technological changes,travel transformed itself into a much desired and accessible leisureactivity–tourism–which has provided enriching experiences to travelers.This chapter will direct its attention to the current state of modern tourism.International and regional travel trends such as visitor arrivals, tourismreceipts, top destinations, and tourism expenditures will be examined, inaddition to regional travel patterns, both inbound and outbound. Theunderstanding of trends is important as they provide a clue to what is likelyto occur in the future, thus providing a basis for destination and touristproduct planning and marketing. External factors including political,demographic, social and technological changes must also be consideredfor their impact on tourism when trends are being analyzed.

2.2 Tourism GrowthBoth domestic travel or travel between two points in the same country,and international travel, where a person travels to a country other thanhis or her own country of residence, have experienced remarkablegrowth within a relatively short period of time. It was not until the 1960sthat working-class Britons, for example, could enjoy leisure travel

23

2Travel Patterns and Trends

Importanceof trends

consisting of a greater distance than what a train could cover in half aday, for example from Glasgow, in Scotland, to Blackpool, in northwestEngland (Elliot, 1991). It was not until 1964 that Japanese were allowedto travel abroad for pleasure, and then they were limited to one trip ayear. It was not until 1972 that more than one in two Americans had everflown (and in that year, only one in five Americans boarded an aircraft).

2.2.1 International vs. Domestic TourismThe World Tourism Organization estimates that the scale of worlddomestic tourism far exceeds that of world international tourism; in 1995total domestic tourist arrivals numbered about 5.6 billion, whereas totalinternational tourist arrivals numbered 567 million - a ratio of 10:1(World Tourism Organization, 1996a). In some countries domestictourism dominates often for geographical reasons. Because of the largesize of their countries, residents of Canada and the U.S. are less inclinedto travel to foreign countries in favor of domestic travel. In 1994, U.S.residents, for example, made over 1.3 billion trips away from home whileremaining within the U.S. borders, in contrast to the 46 million trips U.S.residents made to foreign countries (U.S. Travel Data Center, 1995, p. 5).

In other countries where geography is more conducive to trips outsidenational borders, international tourism is more important thandomestic tourism. Those who live in regions of the world outside oftemperate climates have different travel patterns from those who live intropical climates. Sometimes, a nation’s resources provide ampleattractions and destinations for its own citizens. The French, whosegeography poses few barriers to international travel, spend perhaps tentimes as many holiday nights in France as they do abroad.

The size of domestic travel notwithstanding, the global industry isincreasingly driven by international travel. Most countries that allowtheir nationals to travel abroad generally market their countries asdestinations to nationals of other countries. This policy is based on thefact that the technology which makes foreign travel possible is withinreach of the masses desiring to travel, and that international tourismrepresents an infusion of foreign currency and improves foreign trade.

2.2.2 Total International ArrivalsThe boom in international tourist arrivals around the globe is a relativelynew occurrence. In 1950, 25 million people crossed an internationalborder. In 1960, nearly 70 million international arrivals were recorded.

24

Chapter 2: Travel Patterns and Trends

More domestictravelers

Geographicalreasons

Globalimportance

By 1970, this figure had grown to 160 million. In 1980, internationalarrivals totaled well over 280 million. By 1995 international touristarrivals in all destinations was over 563 million. The WTO projectsworldwide tourism will grow to around 702 million arrivals in the year2000, and over 1 billion by 2010 (WTO, 1996i; see Table 2.1).

25

Tourism Growth

Source: World Tourism Organization.

Year Arrivals Receipts

1995 563,641,000 US$ 399 billion

2000 702,000,000 US$ 621 billion

2010 1,018,000,000 US$ 1.5 trillion

Table 2.1: WTO Forecast International Tourist Arrivals and Receipts

2.2.3 World’s Top Destinations and Tourism Receipts

From an international perspective, the most popular destinations in theworld in 1995 were France, followed by United States and the Spain(WTO, 1996c). It is important to note that an extremely high portion oftravel is received, as well as generated, by relatively few countries. Thetop ten destinations account for 54 percent of the world volume oftourism flows, with seven of the top ten countries located in Centraland Western Europe. Of the top ten receiving countries, seven areEuropean nations (see Table 2.2), but this may be explained by theclose geographic proximities and accessibility of countries (except forthe Central Independent States of the former U.S.S.R.) within thecontinent–a sharp contrast to the wide geographic spread and distanceamong the countries of Asia.

The pattern for tourism receipts is similar to tourism arrivals: the top tenearners represent 55 percent of the world total. The U.S. leads the worldin tourism receipts, with France and Italy in second and third place,respectively. With the swift increase in recent years of internationaltourism to and within East Asia and the Pacific, two Asian destinationsare among the top ten earner list (WTO, 1996d; see Table 2.3).

Europe: topdestinations

Travel receipts

2.2.4 Tourism Generators and Related Expenditures

Tourism generator countries is a category of information on outboundtourists, and is of great importance to countries seeking inbound tourism.Sources of these data include national tourism administrations (NTAs) aswell as international tourism organizations. Sixty-seven percent of allinternational outbound travelers are attributed to nationals of only 10countries, of which six are European countries (WTO, 1996k, p. 78).

26



Rank Destination No. of Arrivals

1 France 60,110,000

2

Spain

43,318,000

3

United States

39,324,000

4 Italy 31,057,000

5

China

24,008,000

6

United Kingdom

20,690,000

7

Hungary

20,162,000

8

Mexico

20,034,000

9 Poland 19,200,000

10 Austria 17,173,000

Table 2.2: Top Ten Tourism Destinations 1995


Rank Destination International Receipts

1 United States 61,137

2 France 27,527

3 Italy 27,451

4 Spain 25,701

5 United Kingdom 19,073

6

Austria

16,221

7

Germany

14,597

8 Hong Kong 9,604

9 China 9,364

10 Singapore 8,733

Table 2.3: Top Ten Tourism Earners 1995

The U.S. and Germany usually lead the world as tourism-generatingcountries. The U.S. is responsible for generating 15 percent of theworld total of international tourist arrivals. Until 1967, internationaloutbound travel from Japan was limited. With the easing of currencyrestrictions following the build-up of a strong foreign exchangeposition, tourism has grown very fast. Japan has shown the highestaverage increase in number of tourists registered in foreign countries,and by 1995, had an outbound market of 15 million (WTO, 1996k).

Tourism generating countries are also closely linked with the volume oftourism expenditures. Tourism expenditure refers to the total consumptionexpenditure made by a visitor, or on behalf of a visitor, before and duringhis or her trip and stay at a given destination (WTO, 1995b). Internationaltourism expenditures refer to the expenditures of outbound visitors in othercountries. In 1995, Germany surpassed the U.S. in international tourismexpenditures by generating 14 percent of the world total vs. 12.8 percentfor the U.S., while Japan the third leading tourism generator, accounted for10 percent of the international tourism expenditures (see Table 2.4).

27

Tourism Growth


Rank CountryInternational Tourism

Expenditures (mmUS$)

1 Germany 50,675

2 United States 45,855

3 Japan 36,792

4 United Kingdom 24,737

5 France 16,328

6 Italy 12,419

7 Austria 11,687

8

Netherlands

11,599

9 11,455

10 Canada 10,220

Russian Federation

Table 2.4: World's Top Tourism Spenders 1995

2.2.5 Tourism Surpluses and DeficitsThe most desired effect of international tourism is the inflow of foreignexchange. A travel surplus is achieved when foreign visitors spendmore money in a particular country than the total spending of the

Top tourismgeneratingcountries

Expenditures

country’s own nationals when they travel abroad. The U.S., France, andItaly, as popular international destinations, are among the top countrieswhich accumulate tourism surpluses. The United States has beenrunning a travel surplus since 1990. In 1995, foreign visitors spent$58.5 billion in the U.S., compared with $45.3 billion spent byAmericans traveling outside the country. Fluctuating foreign exchangerates have helped inbound travel to the U.S. grow twice as fast as U.S.outbound travel to foreign countries (WTO, 1996k, pp. 73, 78).

A less desirable economic result, the travel deficit, occurs when totalexpenditures spent in foreign countries from a given country exceedthe total tourism receipts earned by foreign inbound tourists. Forexample, Japan has experienced a travel deficit for some time, due tounfavorable exchange rates which have simultaneously enabled foreigncountries to benefit from Japan’s yen-spending outbound tourists.

2.3 Regional Travel Patterns and TrendsStatistics on worldwide tourism arrivals are dominated by a highproportion of intra-regional as well as domestic traffic. More thanthree-fourths of international travel takes the form of short-haul travel,and more often than not, within and between the developed nations ofEurope, North America, and Asia. Nationals of Canada, the U.S., andMexico visit their neighboring countries more than they do any othercountries of the world.

2.3.1 EuropeAs a region, Europe is the world’s number one destination. In 1995,this region attracted two-thirds of all international tourist arrivals(WTO, 1996a). Not surprisingly, it also is the leader in intra-regionaltravel for a number of reasons:

• Europe contains several relatively small countries.

• Much intra-regional international tourism within Europe takes placebetween neighboring countries with common land borders (orotherwise between countries that are fairly close to each other).

• Modes of travel for smaller countries in close proximity compriseground transportation, such as cars, trains, and motorcoaches,making more cost-prohibitive air travel unnecessary.

28


Surplusexample: U.S.

Deficitexample: Japan

Regionalinternational

travel

29

Regional Travel Patterns and Trends

It is estimated that 80 percent of all travel in Europe is intra-regional innature. The Netherlands, for example, receives 85 percent of its visitors fromother Western European countries. Over 90 percent of the visitors to Spainare other Europeans. Renewed promotional efforts to attract nearby markets,improvements in the tourism infrastructure in many of the tourist-generatingand tourist-destination countries, and the ease of border-crossing betweenEuropean countries are all factors favoring short-haul travel.

Leading receiving countries for Europe are the leading destinations forthe world–France, Spain, and Italy, among them–for 1995. Overall,however, there is a decrease in the growth rates of foreign arrivals andtourist receipts to these more established Western Europeandestinations, which have been attributed to saturation levels and poorexchange rates. As a subregion within Europe, the EasternMediterranean countries–notably Israel and Turkey–led in tourismarrival growth, with the Eastern and Central European subregioncountries following close behind in 1995 (WTO, 1996a).

Recent trends suggest that outbound long-haul travel from Europe isbeginning to increase and is growing faster than intra-European travel.Overall outbound traffic from Europe is still projected to be lowgrowth, however, as the countries’ nationals may have reached theirceiling on available free time and disposable income.

2.3.2 Asia and the PacificThe growth of travel in East Asia and the Pacific has been particularly rapid.From a region with known arrivals totalling fewer than 100,000 in 1950 toover one million a year in 1960, the totals for subsequent decade intervalsincreased exponentially–7.2 million in 1970, and 21 million in 1980–to atotal arrival figure exceeding 47 million in 1990 (Gee & Lurie, 1993, pp.49, 56, 61, 68). In 1995, there were 88 million international arrivals in theEast Asia and Pacific region, of which 70 percent ended up traveling withinthe region (WTO, 1996j, pp. 1-2). Travel to, from and within this area of theworld continues to surpass forecast figures. The WTO has had to revise itsestimates for international tourism arrivals and receipts for 2010 becauseearlier estimates for tourism, primarily in East Asia and the Pacific, were tooconservative. The revised forecast shows East Asia and the Pacific movingahead of the Americas by 2010 ranking second to Europe with 229 millioninternational arrivals anticipated (see Table 2.5). This growth is significantin light of the geographic characteristics of the region, where virtually allinternational arrivals arrive by air.

Intra-regionaltourism dominates

Changes inregional growth

Exceptionalgrowth and goodfuture prospects

30


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Top destinations within the Asian region include Hong Kong andChina, followed by Singapore, for 1995. Rapid tourism development incountries like Indonesia and Malaysia, as well as relatively newdestinations, such as Cambodia and Vietnam, signal that growth willcontinue for the Southeast subregion.

Since opening its doors to tourism in 1978, China has attractedmillions of tourists who are interested in the country’s history, heritage,cultural diversity, and natural landscapes. The growth in tourism can beattributed to the extensive efforts of the Chinese government inpromoting tourism and the removal of restrictions on the movement oftourists. With the increasing quality of tourism services and perceivedvalue, inbound visitors exceeded all previous records with over 23million foreign arrivals tallied for 1995. While visitors to China fromcompatriot destinations–Hong Kong and Taiwan–still dominate,Japanese visitors led the way for foreign visitors, the former SovietUnion placing second, followed by the United States.

Future outbound travel prospects for Asian nations hinge on theircontinued economic progress, which has been, and should continue tobe, a major catalyst to world economic performance. China has thepotential to be a particularly rich source of outbound travelers, with itsrapidly expanding economy. Overall economic growth rates for thisregion of the world should range between 4 and 5 percent each year,which bodes well for this region as an outbound generator.

2.3.3 South AsiaOvershadowed by the size of tourism development of its neighbors inEast and Southeast Asia, the South Asia region has made impressivegains in recent years starting at a smaller base. The region is comprisedof India, Bangladesh, Maldives, Pakistan, Sri Lanka, Nepal, Bhutan,Myanmar, Afghanistan, and Iran. Between 1980 and 1992, the overallgrowth rate of international tourism arrivals averaged 3.6 percent ayear, below the global average growth rate. Since 1993, regionaleconomic growth has spurred tourism development, and in 1995, theregion’s 2.1 million international tourism arrivals represented a 12.5percent growth rate over 1994. This growth rate was three times higherthan the world average and nearly matched the growth in the East Asianand the Pacific region (WTO, 1996j).

31

Regional Travel Patterns and Trends

Destinations

Tourism to China

Chinese travelers

Rise in arrivals

Nearly four out of every five international tourists go to India, andstrong growth rates have also been evident in the Maldives, based onits beach resorts, and Nepal which offers special interest tourism.Although much of the travel is intra-regional, the western Europeantourism market is quite steady especially for the beach resort segment.The growth in European tourism in the last decade is largelyattributable to better air transportation access and increasinginternational trade in the region (WTO, 1994c, pp. 30-31).

The prospects for growth are strong for intra-regional tourism, whilethe growth in long-haul, inbound tourism arrivals will be lower. Almostall countries in the region will share in the growth of inbound tourismincluding Bangladesh, Myanmar, and Iran. Japan is expected to be theleader in the major tourist generating markets to the region, followedby France, Germany, the U.K. and the U.S. With the expansion of tradeand increasingly strong domestic economies, outbound tourism is alsoexpected to experience steady growth (WTO, 1994c).

2.3.4 AmericasSubstantial growth was experienced in tourist arrivals across North,Central and South America, as well as the Caribbean. Overall tourismreceipts to the region stagnated, however, as a result of the United Statesdip in both arrivals and receipts for 1995. The U.S. attributed this todeclining numbers of Canadian and Mexican tourists, although overseastravel held up well. Of the total arrivals into the Americas in 1995, 75percent were intra-regional tourist flows. Cuba and Mexico experiencedthe quickest growth rate of all the countries of the Americas. Arrivalsinto South American countries grew at twice the world average, withsustained increases from the U.S., Canada, and traffic from within thesubregion. The Caribbean achieved marginal inbound tourism growthduring this year, an outcome of the previous year’s hurricane althoughthere was an increase in port-calls by cruise lines (WTO, 1996g).

Forecasting the outbound tourism potential for the Americas varies bysubregions. The U.S. and Canada, like Western Europe, is at a stagewhere the level of discretionary spending and time devoted for leisurehave reached their peak, meaning that growth of outbound tourism willslow for interregional travel, while intra-regional traffic should holdup. As economic development and industry continue to make inroadsin South and Central American nations, these two subregions show themost promise for increased outbound travel.

32


Topdestination:

India

European visitors

Intra-regionaltourism dominates

Growth potentialin South and

Central America

2.3.5 Middle EastThe Middle East was the fastest growing region for 1995. Whilearrivals to the Middle East represented only about two percent ofinternational tourist arrivals, this amounted to an 11.8 percent increase,with receipts increasing by nearly 30 percent. Egypt, which capturedfour out of five of these Middle East tourists, increased its revenues by95 percent as well as its arrivals by 27 percent. Other top destinationsmaking gains in this region include Jordan, Bahrain, and Lebanon(WTO, 1996h). Rapid growth was attributed to a renewed interest incultural tourism, but perceived safety and increased political stabilityplayed a large role as well.

Prospects for outbound travel for Middle East residents are tied to theeconomic performances of the countries. When the national economiesprosper, it typically implies that the citizens are enjoying a betterstandard of living and have the necessary resources to consider foreigntravel, whether intra-regional or long-haul.

2.3.6 AfricaPolitical instability and civil unrest have discouraged development inthis resource-rich, but investment-poor continent. Political and militarydisturbances and health apprehensions in some sub-Saharadestinations have left a decidedly substandard image of Africa as atourism destination. Inbound foreign arrivals grew only slightly in1995, although South Africa enjoyed growth in both leisure andbusiness travel. More stable political conditions and a decrease in civildiscontent led to South Africa experiencing an increase in both foreignarrivals and tourist receipts for 1995 (WTO 1996f).

The near future for Africa as an outbound generating region mirrors thatof the Middle East. Much needed foreign investment, as well asimproving political stability and education, could help the moredeveloped African nations improve their productivity and efficiency, thusstimulating local economies, and creating an interest in outbound travel.

2.4 External Factors that Affect TourismTo acquire a deeper understanding of tourism and to better facilitatetourism planning, a number of external factors which have the abilityto negatively impact the development of tourism must be considered.Factors confronting global, regional and domestic tourism which have

33

External Factors that Affect Tourism

Egypt: topdestination

Problematictourist destination

Growth inSouth Africa

the potential to greatly influence tourism growth include: socio-demographic change, technological advances, political change,sustainable tourism and environmental issues, safety and health issues,and human resource development.

2.4.1 Changing DemographicsAn important factor is the changing demographic profile of the world’spopulation. In light of the projected six billion people populating ourplanet by the year 2000, tourism product development and servicedelivery for the years ahead require the anticipation of demographicchanges. Three well-defined groups of travelers, each distinct in itstravel consumption and preferences, will be evident. The largest group,the 18-34 year olds, will continue to comprise much of the travelingpublic as singles or in groups. Whether traveling alone, with co-workers or with a group of friends, this age segment will continue todominate much of the Asian outbound market.

In developed western countries and Japan, however, the fastest growingpopulation segments will be over the age of 50. Many will be early retireesdue to the restructured job market of recent years. These “baby boomers”will have the financial resources and discretionary time to travel. However,their spending patterns will be quite mixed depending upon theirretirement incomes. Longer visitor stays and greater overall visitorexpenditures are expected from this group, who will be seeking physicaladventure, intellectual enrichment and culturally rich destinations.

Finally, the family market will also be visible as families with childrenand two income households continue to increase. Travel will be used toprovide quality time for parents and their children, resulting in greaterdemand for family-oriented attractions, facilities, and accommodations.

Family structures, too, will change worldwide with the rising numbers ofworking women, single households, childless couples and non-traditionalfamilies. All have enormous implications for planning tourism destinations.

2.4.2 Technological AdvancesTechnology continues to impact on the travel experience and those whouse or supply it. In particular, the linkage and interdependency betweentransportation, travel distribution systems, and customer information isreceiving increasing attention. In aircraft development the technology isalready available to transport passengers in a supersonic airplane fromNew York to Shanghai in under 3 hours, although it will be many years

34


Young travelmost

Growth inretiree travelers

Family market

Transportation

before economics make the technology feasible for marketplaceadoption. The technology of high speed trains able to reach speeds inexcess of 483 kmh (300 mph) are already in use in Japan, France andother parts of the world, and could become a preferred alternative to airtravel as airport congestion and delays increase. Although train travel forpleasure has been growing in popularity in the U.S., it seldom receivesadequate attention as a viable mode of transportation in tourism becauseof economic factors and withdrawal of public subsidies.

Technology can be an ally, but also a threat. While new developmentsin technology can improve tourism services and product delivery,technology can also mean customer loss, job displacement, under-employment and a resulting negative impact on a local economy.Already the new generation of long-haul, fuel-efficient aircraft meansthe ability to overfly virtually any destination. Unless a destination cangenerate sufficient demand for air seats, the future of adequate airservice to that destination may be in jeopardy.

The services provided by airline computerized reservation systems(CRS) and telephone and cable companies, combined with the growthof electronic highways and on-line services, are dramatically alteringthe way travel products are marketed and distributed. Accessible anduser-friendly global distribution systems (GDS), accessed by millionsof individuals throughout the world, have the ability to do what thetravel agent or tour operator has traditionally done: to create a vacationpackage for the consumer that can be “tailor-made” by the customer.The convergence of the television, telephone and the personal computerwill continue to create new distribution channels for reaching thecustomer directly. The growth of video conferencing and creation ofvirtual reality technologies will enable people miles apart from oneanother to communicate in a very real sense without leaving theiroffices, and without buying an airline ticket or needing a hotel room.

2.4.3 Political ChangeWe will continue to see political changes which will have strong effectson tourism. The emerging Eastern European countries and CentralIndependent States, slowly establishing democratic governments andfree market economies, are gradually having an impact on that regionof the world’s travel trends. The impact of China–with its populationover 1 billion–as both an inbound, but more importantly, an outboundtourism market, attracts the interests of economists, business andgovernment policy makers in neighboring countries and beyond.

35


Negative aspectsof technology

Other advances

China's impact

2.4.4 Sustainable Tourism and the EnvironmentAs tourism reaches maturity as an industry in many countries aroundthe world, the question is one of sustainability. The term “sustainabletourism” is a relatively recent one with different meanings andinterpretations. Sustainable tourism deals with the ability of adestination to remain competitive against newer, less exploreddestinations; to attract first time visitors as well as repeaters; to remainculturally unique; and to be in balance with the environment.

With the projected tourism arrivals figure of 1 billion by the year 2010,the potential strain on beaches, mountain resorts, historical city centersand small rural villages could leave their existence in peril. Acceptingand implementing limits on tourism development is one way tocounteract the potential overuse and exploitation of a destination’snatural resources and cultural heritage.

Environmental problems such as global climate changes, ozone loss,deforestation, and toxic wastes promise to stay at the top of theinternational agenda. The tourism industry will see the continued needto combine sound economic development with the protection ofnatural resources. There will be an increasing need to analyze thetrade-offs between native cultural integrity and the benefits ofemployment, and the need to understand the impact of rapid climaticchanges on prime vacations sites, such as coast lines.

Even ecotourism is not without its detractors. Ecotourism started out asa low-impact offshoot of the adventure travel industry. It represented thebest intentions of an educated and affluent middle class to travel withoutdespoiling the environment. However, the very presence of tourists canstill threaten the fragile ecology of such areas as the Antarctic, tropicalrain forests, or island destinations anywhere.

The World Tourism Organization, the World Travel and TourismCouncil, and the Pacific Asia Travel Association are among the manyinternational and regional organizations to develop policies, codes, andguidelines regarding conservation and protection of natural resources.Every segment of the industry has been enlisted to support theenvironment movement. Lately, the hotel industry has movedaggressively in combating waste in the use of water and energy,reducing the use of hazardous chemicals in laundry and groundmaintenance, and in recycling high use consumable materials, such assoap, paper goods, and plastic amenities in guest rooms.

36


Defining"sustainable

tourism"

Developmentlimitation

Combiningdevelopment and

protection

Ecotourism

"Green"organizations and

industry

2.4.5 Safety and HealthHealth as well as security concerns are of major interest forinternational travelers. The reemergence of diseases such as choleraand malaria in developing countries, as well as the global threat of theAIDS virus, is making travelers more concerned with the sanitationstandards applied to food, water, and medical supplies, and with humanbehavior and preventative measures practiced by host destinations.

Safety has always been an important prerequisite for the attraction ofinternational visitors. According to a 1994 survey, 66 percent of leisuretravelers said crime is an important consideration in choosing avacation destination, and 62 percent of travelers considering overseastravel had safety concerns as they made their plans (World Travel andTourism Council, 1995). While the statistical odds of being harmed asa visitor are insignificant compared to injury from ordinary accidents,the publicity which follows the wrongful death of a tourist makes forsensational anecdotal stories and headline news around the world. Astourism grows, security becomes more important and travelers willexpect safeguarding measures in transportation and accommodationswhile visiting foreign countries. The threat of international conflictsand wars, growing levels of crime, and terrorism not only detertourism, but often place countries at political odds when they mustissue travel advisories against otherwise friendly countries.

Some countries possess the resources to handle security issues as theyrelate to tourists quite effectively. However, aviation safety problemscontinue to plague many countries as the rapid growth in airline serviceputs a severe strain on the countries’ aviation infrastructure, and arefurther exacerbated by personnel shortages and lack of experiencedpilots, flight and ground crew.

2.4.6 Human Resource DevelopmentThe travel and tourism industry continues to be a major source ofemployment in both affluent and poor countries, employing one out ofevery nine workers worldwide. Because of slowed population growthrate in industrialized countries, however, some nations will have tosearch for workers, including the importation of expatriates, andinitiate work re-engineering for service industries. The lack ofavailable workers will become especially hard-felt after the turn of thecentury as populations continue to age.

37


Disease

Crime

Political problems

Aviation safety

Need forworkers inindustrializednations

Developing countries, by contrast, will be faced with burgeoning youthpopulations in need of work but without the necessary skills. The shortageof entry- level and skilled workers, plus the increased consumer demandfor improved services, will pressure the industry to provide moreeducation and training and greater incentives to work in the tourism sector.

Some countries actively pursue human resource planning for tourismenterprises which is discussed in Chapter 16. Hospitality and tourismtraining and education have undergone rapid development in mostcountries which heavily rely on the visitor industry for revenues.Secondary schools provide training for students desiring semi-skilled,entry-level hotel and restaurant jobs. Post-secondary vocationalprograms offer special skill training for students interested inbecoming supervisors or professional chefs. Higher education offersdifferent programs at varying levels, including two-year certificate anddiploma programs, as well as four-year Bachelor’s and Master’sdegrees.

2.5 Tourism Market TrendsUnlike some of the external factors which can have negative affects ontourism if not addressed early or quickly reversed, trends representdevelopments or social movements that foreshadow what will happenin the future. Since a true trend is impossible to change, planners mustanticipate it and determine a suitable course of action. The followingrepresent a few of the top tourism trends which are having significantimpacts on the tourism industry worldwide.

2.5.1 Changing Consumer PreferencesToday’s pleasure to business travel mix is approximately 60 percent/vs.40 percent, a reversal of the trend prevailing in earlier decades whichfavored business travel. While business travel is expected to remainimportant due to the development of Eastern Europe and resource-richSouth East Asian countries such as Malaysia and Indonesia, most ofthe growth will derive from pleasure traffic.

Paid holidays, while common in developed countries, are not yetuniversal, but are increasingly seen as an entitlement, as an integralcomponent of one’s lifestyle, and as an antidote to stress fromoverwork. For example, the Japanese government and industry areencouraging a policy of “jitan” or shortening work hours, with a goalof 1,800 hours or less for the average worker in a year. This translatesinto seven weeks of available time for leisure and travel.

38


Morepleasure

travel

Paid holidays

Need for trainingin developing

nations

Education

Planning forthe future

The industry is seeing both a rise in length of stay, particularly from theolder, affluent vacationers with discretionary time, as well as anincrease in shorter holidays by the younger work force that want tocatch their breath and take two- or three-night extended weekendgetaways from the stressful urban pace.

2.5.2 Product Development and CompetitionNew tourism destinations are rapidly emerging in the world. Theseinclude Vietnam, Cambodia, and Laos in Asia; the Central Republicsof the former USSR; Chile in Latin America; and Southern Africannations. In recent years, Vietnam has been particularly aggressive inseeking foreign expertise and investments for tourism. Even Japan–theAsian region’s most important tourist generating country–is beginningto stress the importance of a two-way flow of tourists. Some of thesedestinations already boast a high standard of service. Most of themalso possess aggressive government assistance and incentive fortourism development and varied attraction resources, which bodeextremely well for their potential success. For the more establisheddestinations, however, these new destinations represent competition forregional and international travelers.

SUMMARY

It is universally accepted that the travel and tourism industry is a growthindustry. Many market factors have contributed to this explosivetourism growth, including more modern, convenient and accessibletourism products and services in a variety of price ranges. Internationalvisitors and their spending in other countries, moreover, make theinternational travel market a key economic development tool. As aresult many countries have extensive tourism marketing campaignsgeared toward making their country a worthy country to visit.

This chapter provided information on basic international travel flows,outbound and inbound, as well as tourism receipts and tourismexpenditures of the various countries. Regional tourism patterns werealso reviewed, suggesting that proximity and land size play animportant role in the foreign travel picture. Future outlooks for variousregions were also offered. The positive relationship for developingnations between the status of a country’s economic development,increased inbound growth rates, and the likelihood for generatingoutbound tourism, was discussed. Developed nations, on the other

39

Tourism Market Trends

Longer stays,more trips

New destinations

hand, revealed a stagnant relationship between continued economicgrowth and generating increased rates of outbound tourism, as theceiling for leisure time and discretionary income has been reached.

Finally, this chapter discussed the various external factors which canand should be addressed by tourism planners and developers to wardoff potential negative impacts. While many of these external tourismtrends cannot be modified or reversed, proper planning and ongoingawareness of their implications on travel and tourism will enabletourism planners to maintain a balance in the development process.


1. Describe some of the advances that have affected tourism growth.

2. What are some of the reasons why some countries run tourismsurpluses and others run tourism deficits?

3. What is the difference between inter- and intra-regional tourism,and why are regional trends important?

4. Why do the countries with the largest proportion of internationaltravel arrivals and receipts tend to have the slowest growth trends ininternational arrivals?

5. What advances in technology tend to aid tourism growth? Whattechnological advances could stall tourism growth?

40


2 Sec

tion

Travel and TourismComponents and Services

CHAPTER 3

Transportation Services

CHAPTER 4

Accommodations and Hospitality Services

CHAPTER 5

Travel Distribution Systems

CHAPTER 6

Special Services and Products

CHAPTER 3

Transportation Services

Learning objectives

• To understand the historical development of passenger transportation

modes and their role in the travel industry.

• To identify the roles and important aspects of ground, sea, and air

transportation.

• To understand the basic aspects of international air agreements, airline

regulations, and deregulation.

• To identify challenges facing the transportation industry.


bilateral vs. multilateral regulatory systems

computerized navigation and traffic control


five freedoms of the air

ground transportation

scheduled vs. charter air service

yield management

3.1 IntroductionTransportation lies at the heart of the tourist industry. It is the linkbetween home, destination, accommodation, attraction, and all otherlocales of the tourist trip. Its efficiency, comfort, and safety determine,to a large extent, the quality of the tourism experience. In many cases,its cost comprises the largest portion of a tourist’s total expenses.

There is a direct relationship between advances in transportation andgrowth in the tourism industry. In particular, the automobile and the jetairplane have made travel accessible to a growing segment of the world’spopulation. As the demand for travel expands, the capacity oftransportation modes will be a critical factor in facilitating or hinderingthe expansion of the tourism industry. For many destinations, theconstraints posed by transportation and its infrastructure–such as airportsand roads–constitute the biggest obstacles to growth. In the case of islanddestinations, the availability of air access is the sine qua non of tourismdevelopment; without such access, there is little or no touristic activity.

This chapter will cover the basic aspects of passenger travel. Therelationship between transportation and technology will be highlightedthrough a discussion of the various modes of travel. Air travel iscovered extensively, given its importance to international tourism. Themain issues facing the air travel industry, including the critical role ofregulation, will be explored.

45

3Transportation Services

Expansion due tomodern transport

3.2 Historical Development of Passenger Travel

Different modes of travel have been dominant at different times inhistory. The evolution of passenger travel, from horse-drawn carriageto jet airplane, reflects the development of transportation technology.Understanding how passenger travel has changed over time isimportant because the development of other aspects of the travelindustry, especially the accommodations sector, have been greatlyinfluenced by those changes.

3.2.1 Early Modes of TravelLand travel did not progress much beyond horseback riding until theearly 19th century, when improvements in roads and coach designmade land travel more comfortable for passengers. Theseimprovements included the use of better paving materials for roads,which prevented them from deteriorating into rough, pothole-filledpaths, and the development of coaches with suspended rather thanfixed carriages, which provided passengers with a much smoother ride.However, because road construction was arduous work, and becausemost major cities were port cities more easily accessible via watertransportation, long distance land travel capabilities remained limiteduntil the development of the railroad.

Water travel was much more extensively used and developed at this time.Over the centuries, ship design had been improved by manyaccomplished seafaring societies, such as the Phoenicians, Romans, andChinese. From the 16th through early 19th centuries, sailing ships suchas the caravel and clipper dominated the seas. Steamships weredeveloped in the early 19th century and began regular service across theAtlantic Ocean in the mid-1800s.

3.2.2 Railroads and Ocean LinersThe first transportation modes to be used extensively for passenger travelwere the railroads and ocean liners, both of which utilized steam enginetechnology. Rail development began in the early 1800s and quickly grewthrough the 19th century. In 1835, the Great Western Railway linkedLondon and Bristol, and in 1841 Thomas Cook pioneered the first railtour. In the United States, the first transcontinental railroad wascompleted in 1869. By the late 19th century, rail dominated land

46

Chapter 3: Transportation Services

By land

By sea

Steam enginetechnology

passenger movement and had greatly improved inland access from themajor cities. The famous Orient Express linked Paris with Istanbul in1883 and London with Istanbul in 1913. In the United States, intercitytrains such as the Broadway Limited and the Golden State Limited werevery popular. By the early 20th century, the train station had become thefocal point of many established and new cities and towns, oftensurrounded by hotels, restaurants, and other facilities for travelers.

Meanwhile, improvements in steamship technology in the late 1800sthrough the early 1900s led to the age of the great ocean liners, such asthe Mauritania, the Queen Mary, and the Queen Elizabeth, which couldmake the trans-Atlantic voyage in less than four days.

3.2.3 Automobiles and AirlinesMass production of the automobile, pioneered by Ford Motors in theearly 1900s, led to the decline of rail as the primary mode of landtransportation. With mass production the automobile became affordableto a large segment of the population. As automobile ridership grew, sotoo did government commitment to road systems, such as the autobahnsin Germany and the interstate highway system in the United States.

In a similar way, the development of the airplane greatly diminished therole of the passenger ocean liner. Orville and Wilbur Wright’s famousfirst flight at Kitty Hawk took place in 1903. Passenger service inairborne vehicles began in 1910 with the dirigible in Germany. In 1914,the first scheduled airplane passenger service began in the U.S. It wasnot until after World War I, however, that airplane service became anestablished transportation mode. Europe took the lead in developingpassenger service, while in the U.S., faster mail service was the focusfor the development of air transportation. In the years between the worldwars, there were significant advances in air transport technology,including the areas of weather forecasting, navigation equipment,aerodynamics, and management. Intercontinental air transport becameestablished during World War II, and soon new, four-engine planes withpressurized cabins and advanced instruments made long-range flyingmore comfortable and efficient. With the introduction of commercial jetaircraft in 1958, air travel quickly gained dominance over rail and watertravel modes. In 1970, the wide-bodied or “jumbo” jet was introduced,and the supersonic Concord began service in 1976. Since then othernew aircraft have been introduced which have increased the speed,efficiency, and comfort of passenger travel.

47

Historical Development of Passenger Travel

Railwayexpansion

Ocean liners

Auto replacestrains

Popularity of cars

Plane replacesliners

Developments inpassenger planes

3.3 Rail ServiceAlthough railroads continue to be a major component of passenger andfreight transportation, air and automobile transportation have greatlyreduced the demand for passenger rail service in the decades since theend of World War II. Throughout its history, rail has suffered fromseveral problems. One of these was the lack of standardization of therail line gauge or width, especially in the United States, which requiredexpensive transfers between different rails. In addition, the varyingphysical demands and requirements of passenger vs. freight servicehave caused problems for track design and maintenance, as have theeffects of weather, soil, and erosion. The cost of track maintenance,along with the capital and labor requirements of operating a railservice, continue to make it an expensive mode of transportation. Thecombination of ridership decline and high costs has meant that mostrail lines need to be subsidized by government.

3.3.1 Significant Developments in Passenger Service

Passenger service began in the early 1800s with railroad cars thatmeasured about 4.6 meters (15 feet) long by 2.1 meters (7 feet) wide.Around 1830, the Baltimore & Ohio company in the U.S. began usinga car that held about 60 passengers, and whose design remainedbasically the same for passenger cars over the next 100 years. ThePullman sleeping car was patented in 1864. By the early 1900s, carsmade of steel began to displace the older wooden cars, and by the 1930srail travel had become faster and more comfortable. Ironically, just asrail travel benefited from these advances, it began to lose its popularityto the automobile and, soon thereafter to airplanes. In the United States,the federal government responded to rail’s economic crisis by creatingAmtrak, a private corporation, in 1971 which took over intercity railservice and revived ridership but required large public subsidies. InCanada, a similar service was established called Via Rail.

3.3.2 Passenger Service TodayJapan and several European countries have led the development ofmodern rail systems which remain competitive with other modes oftravel. Japan National Railways introduced high-speed service with itsbullet trains in 1965 linking major metropolitan centers in the country.European rail service also remains popular because of widespread

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Problems withrail travel

Expense of railmaintenance

Physical changes

access and convenience. The EuroCity network, which replaced theTrans Europe Express, serves over 200 cities in a dozen countries.International visitors from outside Europe can take advantage of theEurailpass, which entitles them to unlimited ridership during aspecified period of time. The much-anticipated Eurotunnel (alsoknown as the Channel Tunnel or Chunnel) opened in 1994, creating arail link between Great Britain and France.

High-speed service and other advances continue to occur in the railindustry to stay competitive. In France, the train a grande vitesse (TGV)links Paris, Lyons, and other destinations, and travels at about 200 kmh(186 mph). In Japan, the shinkansen, or bullet train, reaches speeds ofover 200 kmh. There has also been work on a rail system that usesmagnetic levitation, or maglev, which enables trains to hover slightlyabove the tracks, thereby eliminating friction and noise. In Britain,railbuses–a combination of bus and rail car frame–utilize older railroadtracks and provide an economical alternative to short-range air service.

3.4 Automobile Travel and Ground Transportation

3.4.1 AutomobilesThe dominant mode of travel in the world today is the automobile. Asautomobile registration continues to expand, this dominance willprevail into the next century. The reasons for the popularity ofautomobile travel include:

• Better vehicles. Today’s automobiles are high-precision machines,engineered for greater reliability, road stability, safety, and easierdriving. Advances in fuel efficiency and better mileage as well asimproved road and highway engineering offer an incentive forleisure travel by car.

• Affordability. Relative to other forms of transportation, the cost ofan automobile is low. Automobiles, therefore, are accessible to amuch wider range of travelers.

• Convenience. For a household that already owns an automobile, thedecision to travel is as easy as loading the baggage. There is no needto work around a predetermined schedule, or to make reservationsand possibly incur charges well in advance of the travel. Travel planscan be changed at will.

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Automobile Travel and Ground Transportation

Advantages tomodern rail travel

• Flexibility. The automobile allows for spontaneity and flexibility intravel. Extra time can be spent at a place of particular interest, andrest stops are always possible. In short, since the automobile is anindividual mode of travel (vs. rail, bus, and airline, which arecollective), it enables the individual traveler to freely make decisionsduring the trip without impinging on the travel experience of others.

Automobile Rentals

The automobile rental business generates billions of dollars of revenueworldwide, most of which occurs at airports. In 1996, six of the majorcar rental companies–Hertz, Avis, Budget, Enterprise, Alamo, andNational–each earned over $1 billion from their global operations.Hertz, the largest car rental company, operates a fleet of over 500,000vehicles from approximately 5,400 locations in over 180 countries(Loverseed, 1996, p. 4).

There have been several significant developments in the automobilerental business that have benefited tourists. One of those is the fly-drive package which combines airline and auto rental expenses into asingle product that is less expensive and easier to book for the traveler.Another ongoing development is in the area of computerized drivingdirections and other high-technology aids that make navigation in anunfamiliar destination simpler and safer. Rental companies are alsooffering a range of incentives, including mileage credit (similar inconcept to the airlines’ frequent flyer programs), partnerships withhotels and airlines, and expedited check-in and check-out services.

3.4.2 Highway SystemsAn essential prerequisite of automobile travel is a system of roads andrelated infrastructure. The more extensive the roadway system, thegreater the choices of destinations and routes. From the perspective oftourism, two of the key aspects of highways are their safety and cost.Because highways are often traveled at high speeds, they need to bedesigned for safety. Safety issues include the road constructionstandards, lighting, and signage. Well-maintained roads with goodlighting and signage reduce costs resulting from repairs and accidents.The costs of building and maintaining highways can be met in anumber of different ways, including taxes on fuel, tires, automobileand truck sales, vehicle weight, and vehicle registration as well as tollscollected directly from users of the highway.

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Earnings

Developments inindustry

Incentives

Safety and costs

3.4.3 Other Ground TransportationThe term ground transportation generally refers to travel by bus,limousine, van, and other modes for sightseeing and for transportationbetween hotels, attractions, and airports.

Buses

Buses (also referred to as coaches and motorcoaches) are a major modeof passenger travel. One of the key advantages of bus travel is that, likeautomobiles, buses are not limited to fixed or major routes of travel.Because of this, bus service is very flexible and can reach many morecommunities than either railroads or airlines. Buses serve an importantniche in tourism by also providing service between air and railterminals, accommodations, and attractions.

One of the most popular types of bus service is the bus tour, whichincorporates into one package transportation, attractions, meals, andsometimes hotel accommodations. Standard bus tours pick uppassengers at their hotels and take them to various attractions, often at adiscounted rate below what the tourist would otherwise pay on his own.

On a per-passenger basis, bus transportation is very economical whencompared with rail and air. Modern buses also have many of theamenities that tourists have come to expect, such as larger, morecomfortable seats that can recline, air conditioning, and toilets.European bus service is especially well-developed, and provides manyother amenities, such as bar service.

Recreational Vehicles

Recreational vehicles, or RVs, function like mobile motel rooms,enabling the traveler to integrate travel mode and accommodationfacility into one unit. RV sales are increasing, and more destinationsare providing the facilities for RVs to dock. These facilities, known asRV campgrounds, provide hook-ups for water, electricity, and sewage.Spaces at an RV campground may be reserved, much like a hotel.Demand for RVs has been strong in recent years. From 1991-1994,wholesale shipments of RVs grew by 50 percent.

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Automobile Travel and Ground Transportation

Flexibility

Bus tours

Economical andcomfortable

Transport andaccommodationcombined

3.5 Water Travel

3.5.1 Cruise ShipsAs discussed above, the use of large ocean liners for passengertransportation has been eclipsed by air travel. Today, the primary formof water travel is the cruise ship. Cruise ships differ from the otherforms of transportation discussed in this chapter, however, becausetheir primary purpose is not only to provide transportation, but to serveas a destination in and of itself. Although cruises often make stops atvarious ports to enable passengers to disembark and shop, sightsee, ordo other activities, the central attraction of a cruise is the cruise shipitself and its various amenities.

On modern cruise ships, these amenities can be extensive. A shipmight include the following: exercise gym, swimming pool, movietheater, video game arcade, discotheque, retail shops, variousrestaurants and bars, and live entertainment. For example, a passengeraboard the 13-story, 2,934-meter (963-foot) Queen Elizabeth II canenjoy the following: five dining rooms (three of which seat over 500persons), a health spa, life enrichment seminars, three swimmingpools, a basketball court, a library, a computer center, and a shoppingpromenade. On most cruises, the quantity and quality of food is aprimary attraction. Today’s cruise ships also include special designfeatures, such as stabilizers, that reduce the ship’s movement in roughsea conditions. Some ships also have large garage spaces that canaccommodate hundreds of vehicles, including RVs and buses.

The majority of cruise vacations today are sold as fly-cruise packages.These packages include air and ground transportation to and from thecruise ship’s home port. In this way, a person is able to purchase acruise vacation as a complete package, without worrying aboutscheduling conflicts between the cruise and the airline. The averagelength of a cruise is about six days.

The size of the cruise market is substantial and growing in importance.For the North American cruise market, which dominates the totalmarket, the number of passengers has grown at a rate of 7 percent peryear during the period 1989-1994 to a total of 4.6 million. During thesame period, cruise ship passenger capacity has grown by 7.8 percentper year. As of 1995, the most popular cruise destination by far was theCaribbean (including the Bahamas), which accounts for over 50 percentof the market. Other popular destinations include the Mediterranean

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Transport anddestination in one

Amenities

Fly-cruisepackages

Growth in market

(9.2 percent), Alaska (7.8 percent), and the Mexican Riviera (5.3percent). It is expected that the growth of the Asia-Pacific region willspur the development of its own cruise industry with Singapore servingas a main port (Peisley, 1995).

3.5.2 Other Water TravelAs with the cruise ship, most of the other forms of water travel areintended to provide more than just passenger transportation. On scenicrivers, for example, boats enable tourists to experience an older modeof travel while sightseeing. Ferries offer tourists a leisurely and oftenscenic route between inland points. Specialty craft, such as hovercraftand hydrofoils, provide quicker short-run travel than ferries, and can beattractions in themselves.

3.6 Air TravelFrom the perspective of international tourism, air travel is the mostcritical link between tourists and destinations. There are two basiccategories of air service: scheduled service provides regular service tothe general public, while charter service flights are privately contractedto provide service to a defined group, such as a tour group orassociation. Although charter service can be an important component oftourism (especially in Europe), most air travel statistics refer primarilyto scheduled air service. According to IATA, in 1994 scheduled airlineservice exceeded one billion passengers for the first time, of which 328million were on international routes, an increase of 8 percent over 1993.In addition, in 1994 airlines earned a collective net profit of U.S. $1.8billion, reversing a trend of losses dating back to 1989 (International AirTransport Association, 1996). The top ten airlines in terms ofinternational scheduled passengers carried are listed in Table 3.1.

The discussion below briefly covers the history of passenger air traveland the basic aspects of the air transportation industry. The subject ofair travel regulation is discussed in a separate section below, given itsimportance and complexity.

3.6.1 Development of Commercial Passenger Service

The earliest passenger aircraft to provide economical passenger servicewas the DC-3, a two-engine propeller plane introduced in 1935 whichhad a capacity of 21 persons and flew at about 305 kmh (190 mph).

53

Air Travel

Top destinations

Profit earning

3.6.2 Safety and SecurityAir travel is one of the safest modes of transportation in the world. Thisis due to the quality of the aircraft, the skill of pilots, maintenancepersonnel, and other persons involved with aircraft operation, and thecontrol of airline traffic in the skies. In all these areas, regulation playsa critical role. Passenger aircraft must meet rigorous design and

Improvements in air travel technology proceeded rapidly during WorldWar II and resulted in larger and faster passenger planes. The 1950s sawthe introduction of jet aircraft, such as the Boeing 707 and the DC-8.These planes flew at 885 kmh (550 mph) with a load of over 100passengers. With the jet aircraft, air travel became much more affordableand accessible, and the 1960s and 1970s saw a rapid expansion in theairline industry. Wide-bodied aircraft began service in the 1970s,inaugurated by the Boeing 747 which seated up to 500 passengers, andfollowed by planes such as the Lockheed 1011, DC-10, and the AirbusA300. The wide-bodied jets necessitated upgrades to airports andrunways and spurred larger capacity for hotel accommodations, groundtransportation, and other sectors of the tourist industry. In 1976, theConcorde, a supersonic transport (SST) plane, made its first commercialflights. However, the Concorde sustained large operating losses, and itsnoise impacts forced it to reduce its speed over populated areas. As aresult, the SST has not been a significant factor in passenger air travel.

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Source: IATA, World Air Transport Statistics, p. 37.

Rank Airline Passengers(thousands)

1 British Airways 23,933

2 Lufthansa 17,507

3 American Airlines 14,893

4 Air France 13,762

5 KLM 11,644

6 United Airlines 11,286

7 Singapore Airlines 9,920

8 SAS 9,806

9 Cathay Pacific 9,743

10 Japan Airlines 9,376

Table 3.1: Top Ten IATA-Member Airlines, By Number ofInternational Scheduled Passengers Carried, 1994.

Jet expandsindustry

Concorde

Importance ofregulations

55

Air Travel

materials standards. Pilots and flight crew are required to meetexperience and training standards, as do air traffic controllers. Airplanesare constantly inspected to ensure adequate maintenance. In these ways,regulations attempt to eliminate the risk of major accidents.

Acts of sabotage and terrorism are a constant concern of airlines. Themost important aspect of this concern is the security system of an airport.As discussed below, the security of an airplane from explosive devices,passengers with firearms, and other threats, is the most importantresponsibility of an airport security system. However, it is complicated byother security concerns and by the various different groups involved inenforcing airport security. Security technology is improving, but is oftentoo expensive for widespread use. For example, while baggage scannersnow exist that can detect plastic explosives, which are generally notdetectable by metal detectors, in the near term their high cost will preventtheir widespread use. This type of problem complicates overall airlinesecurity, which by its nature requires cooperation among airports. That is,a flight from airport A to airport D, that passes through airports B and C,is only as secure as the weakest security system among the four airports.

Airline accidents, whether caused by safety violation or sabotage, canbe extremely costly to an airline company. A number of prominentcases in recent years, including the Pan Am crash in Lockerbie,Scotland in 1988 and the Valujet crash in the U.S. Florida Evergladesin 1996 are examples of incidents which have contributed to carrierbankruptcies or mandated shutdowns. Accidents can also force airlinecompanies into expensive litigation, which can sometimes result inlarge damage awards in favor of the plaintiffs.

3.6.3 CostsAs the frequent air fare “wars” among airlines indicate, ticket pricesare a critical component of the flying public’s travel decisions. Besidesan airline’s own capital and operating costs, it must pay a variety oftaxes and fees to airports. These charges include ticket taxes,international departure taxes, customs fees, immigration fees,agriculture fees, and passenger facility charges. These taxes, landingfees, and other charges increase the total cost of airline operations, andcan have a significant impact on the price of the ticket.

A controversial aspect of airline costs is related to airlines that operate underbankruptcy protection. Deregulation of the industry, particularly in theUnited States, resulted in the bankruptcy of several major airlines. Thoseairlines that continued passenger service operations while in bankruptcy

Securityconcerns

Cost ofaccidents

Taxes and fees

Bankruptcyprotection

were able to reduce their operating expenses while the courts oversaw thedisposition of their debts. This, in turn, enabled these airlines to lower theirticket prices. Other airline companies argued that this created an unfairsituation, since they were forced by the market to also lower their ticketprices to compete with the bankrupt airline, but without any correspondingreduction in expenses. Despite these objections, customers benefited fromlower airfares and U.S. airlines such as TWA and Continental were able toemerge from bankruptcy with stronger balance sheets and viable operations.

3.6.4 Airports

Operations

The modern airport is home to a wide range of activities centeredaround the departure and arrival of aircraft. In addition to serving as aterminal for passenger air travel, airport operations also include:

• Control of air traffic at and in the vicinity of the airport.

• Automobile rental operations. Roughly 70 percent of automobilerentals occur at airports. Rental operations require large parkingareas and shuttle services to transport people between the rentaloffice and the airport terminal.

• Baggage processing. The efficient handling of baggage is a criticalcomponent of airport operations. Increasingly, technology is being usedto improve baggage operations. For example, after months of correctinginitial design and engineering flaws, the new Denver InternationalAirport in the U.S. has a sophisticated baggage system that isprogrammed to reduce mishandling of baggage and passenger wait time.

• Cargo and mail. Most of the world’s mail, and much of its cargo, istransported via airlines. Although largely hidden from the typicalairline passenger, cargo and mail handling are a substantialcomponent of overall airport operations.

• Customs and immigration operations. This function is related tosafety and security operations, since both require personnel andtechnology to check outgoing and incoming passengers andbaggage. Because international airports are major entry points for anation, this function is a high priority of overall airport operations.

• Restaurant and retail operations. The traveling public has come toexpect a range of ancillary services at airports. These operationsoften represent a significant source of revenue for airports.

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• Safety and security. Monitoring and restricting the flow of personsand material through an airport is an extremely complex anddemanding responsibility.

Airport Capacity

The volume of passenger travel through a major international airport isastonishing. In 1995, each of the top 35 airports worldwide processedin excess of 20 million passengers. This volume is straining many ofthe world’s airports. As a result, many countries are in the process ofbuilding or expanding terminals that can accommodate these highlevels of traffic. Examples are the Kuala Lumpur International Airport,Phase I of which is scheduled to open in 1998 and handle 25 millionpassengers per year, the Chek Lap Kok airport in Hong Kong(scheduled for 1998), and the new Bangkok airport (scheduled for2000 and to handle 55 million annual passengers).

However, the expansion or new construction of an airport is becomingan increasingly difficult task for governments. The high cost of buildingan airport poses a major obstacle. Traditional public financing becomesriskier and more controversial as airports become more expensive;projects such as the Denver International Airport in the U.S. and KansaiInternational Airport in Osaka, Japan experienced well-publicized costoverruns. Airlines have become more aggressive in challenging landingand other airport fees and taxes that appear to place an unfair burden ontheir industry. Finally, the social and environmental impacts ofconstructing new airports have required lengthy and sometimescontentious entitlement processes, in which residents near the proposedairport sites have fought against their development.

3.6.5 Other Aspects of the Airline Industry

Computerized Reservation Systems (CRSs)

Computerized reservation systems such as Apollo, Sabre, Amadeus, andGalileo have had a dramatic impact on the industry. Although there wereearlier concerns that such systems would give their owners a monopolisticadvantage over rival airlines, regulations and competitive pressures haveprevented such anti-competitive results. CRSs have also enabledcustomers to become more involved with and knowledgeable about airfares and reservations. Through the Internet, customers can search for thebest fares and book reservations using CRSs that are adapted for publicaccess and use. This subject is discussed further in Chapter 5.

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Air Travel

High volume ofpassengers

Building newairports

Customeradvantages tocomputerization

Computerized Navigation and Traffic Control

Delays and even accidents can result from problems in navigation andair traffic systems. Technological advances in this area hold thepotential to greatly improve the safety and efficiency of air travel. Theair traffic system includes satellites, ground radar, air traffic controlcenters, and the airplanes. Problems can stem from several sources. Forexample, throughout much of Europe ground control centers use amultitude of different operating systems, adding unnecessarycomplexity to communications among the centers.

Improvements are being made using Global Positioning Systems (GPS), asatellite-based method of positioning and navigation that is being adaptedto a variety of uses (such as in rental cars and boats). FANS (Future AirNavigation System) uses GPS and existing ground radar to improve theprecision of positioning and flight path, thereby improving overallcommunication between air traffic controllers and airplane personnel.

3.7 Regulation and Deregulation of Air Travel

Air travel has always been a highly regulated activity. The reasons forthis are complex but revolve around the perceived importance of airtravel to national pride and strength, the high costs of operating airservice, the safety issues posed by air travel, and the internationalpolitical aspects of flying to and over nations. Chapter 14 touches oninternational regulation from the standpoint of key air transportationorganizations. This chapter provides further discussion of internationalissues, as well as on the economic and safety dimensions of regulation.

3.7.1 Basic Aspects of RegulationInternational airline regulation began with the Chicago Conference in1944. The Chicago Conference resulted in the Chicago Convention,which created the International Civil Aviation Organization (ICAO,discussed in Chapter 14) and established four basic principles ofinternational aviation. These principles are:

• The sovereignty of each nation over its own air space.

• The right of all nations to participate in air traffic.

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Systemimprovements

Reasons forregulations

• Nondiscriminatory regulation of airline traffic.

• The freedom of each nation to designate its own carrier to operatein its air space.

The Chicago Conference also proposed the original Five Freedoms ofthe Air (there are now eight), by which each member, or contractingstate, granted to the other contracting states the following freedoms:

• The privilege to fly across its territory without landing.

• The privilege to land for non-traffic purposes.

• The privilege to put down passengers, mail and cargo taken on in theterritory of the state whose nationality the aircraft possesses.

• The privilege to take on passengers, mail and cargo destined for theterritory of the state whose nationality the aircraft possesses.

• The privilege to take on passengers, mail and cargo destined for theterritory of any other contracting state and the privilege to put downpassengers, mail and cargo coming from any such territory(Wheatcroft, 1994, p. 17).

Adoption of these freedoms by the international community would haveconstituted a multilateral system of air regulation. The term multilateralas used here refers to a regulatory system in which all nations abide byan agreed upon set of rules. In fact, only the first and second freedomswere subsequently adopted by the signatory nations of the InternationalAir Transport Services Agreement. The remaining freedoms, which arecrucial for passenger transportation, are subject to bilateral agreements,or agreements between two nations. In effect, nations did not want tocommit themselves in advance to these freedoms, and wished to retainthe right to negotiate on a case-by-case basis.

In 1946, the Bermuda Agreement, a bilateral air agreement, was reachedbetween the United Kingdom and the United States. This bilateralagreement subsequently became the basic model for bilateral agreements.Bilateral agreements generally apply to scheduled passenger service andnot to charter flights. Although each agreement is unique in its details,there are several major areas that all agreements must address:

• Specification of the routes that may be flown by the carriers of thetwo countries.

• Designation of the airlines that may fly the specified routes.

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Regulation and Deregulation of Air Travel

Freedomsadopted

Bilateralagreements

• Restrictions on ownership and control of the designated airlines.

• Fair opportunities for each country’s airlines to fly the specified routes.

• Agreement on setting rates, which is normally delegated to IATAtraffic conferences.

In addition, many bilateral agreements are supplemented byconfidential memoranda of understanding between the two countries,which often have the effect of superseding or modifying the terms ofthe bilateral agreement. An example of a bilateral agreement is onerecently reached between China and the U.S. in 1995. With thisagreement, the two countries allowed for the first time nonstop servicebetween them.

Unlike a multilateral system, in which one set of rules applies to allparticipating countries, the existing bilateral system results in eachcountry having to negotiate separate agreements with numerous othercountries. The reason that a multilateral system has not been achieved,despite its apparent efficiency when compared with numerous bilateralagreements, is that the bilateral system enables each country to retaingreater freedom in its negotiations with other countries. This freedom,in turn, is important because most countries have historically adopteda protectionist stance towards air transportation. Because air travel isperceived as a vital interest to a country, involving issues such asnational defense and prestige, it is unwilling to let market forcesdetermine control and availability. Thus, countries establish nationalairlines and, through bilateral agreements, ensure that those airlinesretain market access and remain economically viable.

3.7.2 Pressures on the Bilateral Regulatory System

The existing bilateral regulatory system has been criticized as beinginefficient and detrimental to the growth of international tourism. Itsinefficiencies are becoming more apparent due to changes and pressuresin the air transportation industry. It is anticipated that the followingpressures will significantly alter the existing system in the near future:

• Tourism’s increasing importance in the world economy, which isalerting countries to the costs of maintaining protectionist policies.

• The global trend towards deregulation and liberalization by theUnited States, Canada, Australia, and the United Kingdom, andespecially by the European Union.

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Investmentprotection

• The global trend towards airline privatization.

• The recognition of the competitive advantages of very large airlines.

• International mergers and alliances within the airline industry.

• Developments in CRSs and communications, which are facilitatingthe globalization of the airline industry.

• Increased acceptance of foreign ownership of airlines.

• The global trend towards liberalization of trade as reflected by theEuropean Union (EU), North American Free Trade Agreement(NAFTA), General Agreementon Trade in Services (GATS), theAndean Pact, the Australia-New Zealand Closer EconomicRelations Agreement, and other similar trade agreements(Wheatcroft, 1994, pp. 27-38).

3.7.3 Economic Aspects of RegulationWhether an airline is owned by the national government or a privatecompany, it represents a significant capital investment. Airplanes areexpensive to acquire and to operate. Regulation has often been used toprotect that investment by limiting competition and preventing themarket from adjusting prices. In the United States, regulation alsoensured that market pressures did not dictate routing, and forcedairlines to maintain routes that were unprofitable. This kind of nationalregulation came to an end in the United States beginning in 1978 withthe Airline Deregulation Act, and since then the deregulationmovement has gained momentum in other countries.

The Airline Deregulation Act’s primary impact was in granting theairlines greater freedom in setting air fares. The key provisions of theAct were in the following areas:

• Airlines were able to set fares within a “zone of reasonableness”without having them nullified by the government as beinganticompetitive.

• Flights of equal distance, but with different market characteristics,no longer needed to be priced at the same level.

• There was greater freedom in creating discount air fares.

• The restrictions on the relative pricing of coach and first-class fareswere removed, allowing the airlines to set fares for these differentclasses on the basis of market factors.

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Regulation and Deregulation of Air Travel

Deregulation

Pricing

• There was greater freedom in entering new routes for bothestablished and new carriers.

Greater freedom in pricing has been an important factor in encouragingleisure travel. Airlines have developed sophisticated yield managementtechniques that enable them to maximize their revenue on each flight.Yield management refers to the practice of pricing fares on each flightto take advantage of the specific demand characteristics of that flight.For example, a flight between two major cities that departs at 8:00 a.m.on each week day will have its seats allocated and priced to takeadvantage of the greater business travel demand at that specific time.Another flight that departs at 11:00 p.m. will be priced to attract leisureand other non-business travelers. In both cases, the airline uses pricingin conjunction with passenger demand to generate as much revenue aspossible. In addition, yield management must account for passengersutilizing frequent flyer awards, airline employees flying fare-free, andother components of the flight’s overall revenue.

Deregulation in the United States has had several consequences. Thenumber of airlines has increased, largely due to the creation of smallerregional companies. However, the number of major airlines hasdecreased to eight as of 1996, representing a significant consolidationof ownership. Deregulation also has resulted in a route system knownas the hub and spoke system, in which the major airlines concentrateon routes between hubs such as Los Angeles, Chicago, Dallas, andNew York City, and regional airlines provide service from hubsoutward along “spokes” to secondary areas.

3.8 Challenges Facing TransportationThe growth of visitor traffic and the demands such growth places ontransportation systems will pose significant challenges togovernments, planners, engineers, and others in the foreseeable future.

3.8.1 Fleet PlanningFrom the perspective of companies that provide transportation services,fleet planning is a constant challenge. Fleet planning refers to acompany’s efforts to match its supply (of available seats) with passengerdemand. Fleet planning is critical because of the nature of transportationsupply; specifically, the inventory of seats available for sale must eitherbe sold or lost at the moment they go unused. Thus, a bus that is carrying

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Yieldmanagement

Consequences ofderegulation

Supply anddemand

only 25 percent of its capacity loses 75 percent of its potential revenue;meanwhile, the bus’s operating costs, such as wages and fuel, generallyremain fixed regardless of the number of passengers. Fleet planning isnecessary to maximize the number of seats that are sold per trip.

Maximizing ridership is important because the costs of providingtransportation are usually high. These costs include the acquisition orlease of the airplane or vehicle, any debt service associated with theacquisition, facilities for holding and maintenance, and labor.

3.8.2 CongestionCongestion of roads, passenger terminals, and airports is a conditionthat most travelers face at one time or another, especially in urban areas.Inadequate facilities to handle growing demand is often the primarycause of congestion, but it can also result from traffic flow designproblems, repairs and other construction-related activity, and tightersecurity procedures. Visa and customs procedures often requiretravelers to stay within the confines of the passenger terminal for longerperiods of time, and contribute to the overall congestion of the terminal.

Congestion can result in significant costs to the traveling public. Forexample, a tourist who misses a flight due to airport congestion mayface additional costs relating to the rescheduling of hisaccommodations and rental car. Congestion also places a greater stresson a security system, especially where persons must be physicallyscreened and where there are areas of controlled access. The quality ofthe visitor experience can also be diminished by overcrowded streetsand terminals, as tourists are subjected to the very pressures that theywanted to get away from in the first place by taking the vacation.

One cause of congestion is the fluctuation in traffic levels throughoutthe year. The volume of leisure travel, in particular, often varies greatlythroughout the year due to factors such as the weather, schoolschedules, and work schedules. Besides congestion, these seasonalfluctuations cause other problems for transportation companies. Forexample, transportation providers must balance the need for capacityto handle peak traffic with the costs of maintaining that capacitythrough off-peak seasons. While seasonality affects all aspects of thetravel industry, its effects on transportation businesses are pronouncedbecause of the large costs associated with the industry.

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Challenges Facing Transportation

Causes ofcongestion

Problems ofcongestion

Seasonality

3.8.3 Safety and SecurityProviding for the safety and security of the traveling public willcontinue to be a central concern of transportation providers, especiallyfor airlines. Although airline accidents and acts of terrorism are rare,when they occur they draw worldwide attention. The circumstancesand images of such accidents tend to emphasize the vulnerability of airpassengers, and can have a significant effect upon people’s willingnessto travel by air. From the standpoint of international tourism, much ofwhich requires air travel, an increase in the public’s fear of flying canhave significant negative implications.

Ensuring the safety of the traveling public can result in conflicts withother aspects of the travel experience, however. For example, as notedabove, heightened security at an airport normally results in greatercongestion and delays, thereby diminishing the quality of the visitorexperience. The visitor will find himself subject to more extensivescreening and search procedures, restricted to certain areas, or forcedto fill out more detailed questionnaires. Safety measures also entailsignificant costs. These costs result from hiring additional securitypersonnel, purchasing newer and better equipment, and mandatingcompliance with additional procedures. Balancing the costs of safetymeasures against those resulting from accidents and terrorism willcontinue to pose a challenge to the transportation industry.

3.8.4 Environmental ImpactsTransportation modes and facilities tend to have significantenvironmental impacts. All modes of travel require energy, most ofwhich is provided by fossil fuels. The burning of fossil fuelscontributes to a number of environmental problems, including airpollution and global warming. In addition, the petroleum industry onwhich transportation depends can be the source of practices andaccidents that are environmentally destructive, including oil tankerspills, explosions at oil and gas wells, and offshore drilling problems.

The building of transportation infrastructure–roads, terminals,airports–also has significant impacts. The construction of a majorroadway, for example, necessitates excavation and paving of strips ofland that can extend for many miles. A long road will likely travelthrough several different ecosystems, which in turn means that thoseecosystems will be affected by the flow of traffic. The siting and

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Psychologicaleffects ofaccidents

Tighter securitylessens enjoyment

Use of fossil fuels

Construction

65

Summary

construction of airports involves considerations of noise impacts and airpollution, and in some cases the destruction of existing flora and fauna.

With the growth of ecotourism, rural tourism, and other alternativeforms of tourism which bring the tourist closer to local cultures andenvironments, the role of transportation in providing access toecologically vulnerable areas will be an issue. For example, advocatesfor the preservation and protection of marine life often criticize oceantransport businesses that bring tourists into the marine environment.This intrusion into the marine environment can inflict damage throughengine noise, oil and fuel leaks, physical injury to ocean animals, andother such impacts. On the other hand, tour operators point out thatthrough such experiences tourists gain a greater appreciation of theenvironment. These types of issues are not easily resolved, and have adirect bearing on the transportation industry.

SUMMARY

As technology has evolved and improved, different modes of transportationhave been dominant at different times in history. Today, from the perspectiveof international tourism, air transportation is the most important mode,having eclipsed ocean liners in the middle part of this century. When alltypes of travel are considered, the automobile continues to be the preferredmode, due to its flexibility and cost. Railroads and ships have lost theirpopularity as modes of passenger travel but remain important modes offreight transportation. Cruises are a unique combination of destination andtransportation, and the cruise ship industry has grown with the advent of fly-cruise packages that are easily accessible to tourists.

The airline industry has developed over several decades into a dynamicand highly competitive industry. Air travel costs and safety continue tobe major issues of concern to the industry and the flying public. Theregulatory environment of international air travel has been shaped bybilateral agreements between countries. Deregulation of airlines andincreasing trade liberalization, among other trends, are exertingpressure on the existing bilateral system. However, a true multilateralsystem has yet to be implemented.

As tourism moves into the new century, there are several keychallenges that transportation will face. Congestion, environmentalimpacts, and safety and security concerns will be significant factors ofthe transportation environment of the future.

Ecotourism


1. What are some of the major technological developments that haveinfluenced the development of passenger transportation?

2. What are the advantages of automobile transportation vs. othermodes of travel?

3. Discuss the key aspects of airline transportation.

4. Identify the major operations that occur at airports.

5. What are some of the issues that bilateral air agreements cover?

6. How has deregulation affected the airline industry?

66


CHAPTER 4

Accommodations and Hospitality Services

Learning objectives

• To understand the hospitality industry and its role within the tourism and

travel industry.

• To appreciate the historic development of the accommodations industry

and related hospitality services.

• To understand the structure of the accommodations industry.

• To understand the role of the food and beverage industry within the

hospitality industry.

• To understand the various forms of managerial systems used in the

accommodations industry.

• To gain an international perspective of the hospitality industry.


American plan (AP)

average daily rate (ADR)

bed and breakfast

Bermuda plan

European plan (EP)

expatriate manager

franchise

management contract

modified American plan (MAP)

occupancy ratios

rack rate

time shares

yield management

4.1 IntroductionHospitality is the term generally associated with hotels and restaurants.Today, the accommodations industry (also referred to as the lodging orhotel industry) and the food and beverage industry (also referred to as thecatering industry) encompass a variety of facilities and are a dynamic partof the global travel and tourism industry. Everywhere the traveler goes, aplace to stay and place to eat are necessities. The accommodationsindustry represents a wide array of lodging facilities from luxuriousresorts to modest bed and breakfast establishments. This range of facilitiesreflects the different needs and preferences of travelers and marketdynamics. Worldwide, the number of available hotel rooms has increasedrapidly to keep pace with the growth in international and domestictourism. The food and beverage industry has also expanded as tourism hasboomed. While hotels and resorts provide much of the core food servicefacilities for travelers, restaurants and other food service outlets also servetravelers. Food service is offered at a variety of facilities includingtransportation terminals, airplanes, trains, ships, and attractions. Muchlike the accommodations industry, the food and beverage industry isemerging in the global tourism economy through worldwide chains,providing new opportunities for the hospitality industry’s growth andexpansion. This chapter explores the accommodations and food andbeverage industries and their role in tourism.

69

4Accommodations and

Hospitality Services

Necessary partof industry

4.2 Historical DevelopmentTravelers have sought rest and refreshment at public houses and hostelsthroughout history. At the height of the Roman empire, inns flourishedalong major highways and other shelters were maintained along majorhighways, primarily for government officials and persons ofimportance (Gee, 1994, p. 27). In Asia, small shelters were placed atstops along caravan routes. Pilgrims looked to religious houses to givesanctuary, rest, and refreshment along the way. The term hospitality isderived from hospice, a medieval “house of rest for travelers.”Interestingly, even to this day some Alpine hospices in Europe continuethe tradition of offering food and rest to weary travelers (Lattin, 1985,p. 15). Food service also can be traced back in history, perhaps as farback as 4000 B.C. when establishments began selling food and wine.Such establishments continued and flourished during the Greek,Roman, and Byzantine periods.

It was not until the fifteenth century that commercial hospitalityventures made their appearance in Europe. The forerunner of the “bedand breakfast” type of accommodation was the spare bed in privatehomes offered to travelers for a small price. At the same time, free-standing inns appeared, often built by affluent landowners and namedafter them. In the sixteenth century, some inns and taverns in Englandbegan serving meals at set prices at regular meal times (Mill, 1990, p.321). During this era, road development and coach travel spurred thegrowth of travelers and the number of inns to serve them. By the endof the seventeenth and the dawn of the eighteenth centuries, lodgingfacilities which could be called the early versions of hotels made theirappearance. In 1774 the first hotel was opened in London; later in 1794the City Hotel opened in New York City. In the late eighteenth century,the term “restaurant” was first used in Paris referring to a dining room,and in the United States, Delmonico’s opened in 1834 offering mealsin the English fashion of fine dining (Coltman, 1989, pp. 326-327).

In the United States, the first hotel equipped with modern amenitiesresembling today’s facilities is believed to be the Tremont House whichwas built in 1892 in Boston, Massachusetts. The Tremont Houseestablished a number of precedents with a lobby, indoor plumbing, privateguest rooms with locking doors, and a complimentary cake of bath soap(Mill, 1990, p. 15). Elsewhere, hotels like the Ritz in Paris, France, theSavoy in London, England, and the Raffles in Singapore set standards forservice and quality. In the twentieth century, many of the innovations in the

70

Chapter 4: Accommodations and Hospitality Services

Early times

Inns

First hotelsand restaurants

Hotel innovations

accommodations sector continued to take place in the United States.American hotelier E.M. Statler was among the first to upgrade the guestexperience by offering larger guest rooms with private baths, runningwater, light switches, telephones, room service, in-room radios, and hotel-to-hotel reservations systems. Further innovations in American hotelsincluded central heating, air conditioning, passenger elevators, electriclighting, and sewage disposal systems. These innovations were quicklyadopted by international hotels (Gee, 1994, p. 28).

4.3 Accommodations ClassificationWorldwide, the number of hotels is increasing rapidly, and in 1994, itwas estimated that there were over 11 million rooms generating revenuesof nearly U.S. $250 billion (International Hotel Association, 1996, p. 12).The accommodations sectors in Europe and North America areconsidered the largest and the most mature, followed by East Asia andthe Pacific which has had the fastest expansion in the last decade. Yetthere is ample room for growth in many of the emerging markets in otherregions including South Asia, the Middle East, South America, Africa,and countries of the former Soviet Union (see Table 4.1).

71

Accommodations Classification

Source: International Hotel Association.Note: * The European Economic Area includes European Union

and European Free Trade Association countries, except Switzerland.

Number of Hotels Number of Rooms

Africa 10,759 343,347

Caribbean 5,290 155,253

Central America 1,160 41,221

North America 66,943 3,738,977

South America 14,578 487,787

Northeast Asia 10,192 719,480

Southeast Asia 13,211 453,657

South Asia 3,663 159,417

Australia/Pacific Islands 10,082 229,319

Middle East 4,735 162,178

European Economic Areas* 151,945 4,242,193

Other Europe 19,178 676,631

WORLD TOTAL 307,683 11,333,199

Table 4.1: Hotels Worldwide

Hotel numbersand growthprospects

Accommodations can be classified into various categories, illustrating thediversity of the industry. The wide array of available room types andamenities is a reflection of an industry that must respond to variousconsumer needs, including the social and business needs of the travelmarket. Any attempt to establish a uniform classification system facesproblems of differing types of accommodations around the world. It mightbe unlikely to find a pousada (Portugal), an auberge (France), or a ryokan(Japan) in the United States, yet such accommodations are common intheir own countries. As early as 1962, the International Union of OfficialTravel Organizations, a forerunner of the World Tourism Organization,attempted to establish a globally uniform hotel classification system.Various attempts have been made since then, but the obstacles to a uniformclassification system include variations in definitions, facilities, servicestandards, management, and cultural influences on service which candiffer dramatically from country to country (Gee, 1994, p. 391).

What has emerged are different systems developed by countries andregions around the world, through the efforts of the private sector as wellas governments. Nations which embark upon tourism usually as aneconomic activity to attract international travelers have recognized theadvantages of a classification system that tourists will understand. Manyhave official, government-initiated classification systems which have beendeveloped and widely used in the European Union countries based on bothphysical and qualitative criteria. In other countries, classification systemshave been established through private sector efforts especially throughcommercial services such as Guide Michelin, AA Britain, and theAmerican Automobile Association (AAA). The private sectorclassification systems have the support of the hotel industry largelybecause the industry often views the classifications and ratings as more ofa promotional feature, which can be used in marketing campaigns. Whilemany of the definitions used are similar in a global tourism market place,there are differences among countries between commercial and officialclassifications. Table 4.2 illustrates a comparison of hotel classifications.

4.3.1 HotelsThe term “hotel” has assumed a generic meaning around the world,applying to a wide range of property types. There is no one way toclassify the different types of hotels that exist. In the United States, thekey to the property’s type is based on its amenities identified by thedescriptor preceding “hotel.” In general these descriptors identify thetarget markets that the property aims to attract such as airport hotel,convention hotel, commercial hotel, luxury hotel, budget or economyhotel, casino or resort hotel. Some subgroups within hotels include:

72


Diversity

Classificationdifficulties

Governmentaland private

classificationsystems

Defining "hotel"

73


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• Airport hotels: Located within ten miles of an airport with amenitiesfor the air traveler including facilities for business meetings.

• Convention hotel. Located in major cities, often near a municipalconvention center. Major space dedication to meetings andexhibition area. Amenities for meetings and business travel.

• Commercial hotels. Located in urban areas with business travelersas the primary target market, usually upscale or midscale.

• Suite hotels. Apartment-style hotel rooms, generally offering morespace and upscale amenities.

• Motor hotels. Located close to a highway for automobile travelerswith provisions for parking and amenities which may includeswimming pool, coffee shops, and other family-oriented facilities.

Hotels differ by amenities and the levels of service offered. At thelowest level, budget motels tend to focus on cost-conscious travelers astheir target market. The overall goal of these establishments is to keepcosts down and pass the operational savings on to the customer. Thelimited amenities offered vary from chain to chain, each attempting toestablish a price-value relationship in the consumers’ minds.

4.3.2 Resort Properties and Time SharesResorts are found worldwide, wherever people gather for activities asdiverse as golf, tennis, spas, skiing, or a combination of similarrecreational activities.

Because the resort guest is typically a longer stay client, resortproperties generally offer more activities and extended amenities thanurban hotels. Although many resort properties are surf-and-sundestinations, resorts today are becoming more specialized. Themeparks, such as Disney World in the U.S., have capitalized on the resortconcept by making these facilities a part of the entire Disneyexperience (Berkowitz, 1980, p. 114).

The one-stop destination pioneered by Disney continues to expand aroundthe globe. Singapore’s Sentosa Island, for example, is a popular attractionfeaturing a resort hotel and rides and attractions. Although theaccommodations element is a core facility, restaurants, shops, and attractionsare all part of one operation. Expansion into these ventures may be donemore along the lines of alliances and partnerships than ownership, butdestination resorts will continue to grow as the industry increasingly viewsitself as part of broader industries, namely recreation and entertainment.

74


Budget motels

Hotel as partof attraction

75


Defining"time shares"

Casinos withtheme resorts

Time shares, like resorts, tend to be located in popular touristdestinations. Time shares basically are individually owned “hotel roomintervals” which allow the owner to access generally upscaleaccommodations for a usually fixed period of time each year. Theattraction of time share accommodations is that they tend to be moreapartment style and may be a part of a hotel, resort, or condominium.The arrangement is a permanent one unless the ownership share in theproperty is disposed of. Increasingly, the properties are managed byspecialized management companies including several majorinternational hotel management organizations such as Marriott, HiltonHotels Corporation, and Disney (Travel and Tourism Intelligence, 1997).

4.3.3 The Casino/Destination PropertyPerhaps no single city has had a greater impact on the casino lodgingindustry as Las Vegas, Nevada in the United States. The casino has longbeen recognized as a specialized property with gaming as the centralactivity, but in the past decade Las Vegas has spawned a new type oflodging which is a combination casino and destination property, not to becompared with the casino hotels of Monte Carlo wherein Monte Carlo,rather than the hotel, is the destination. This hybrid is often considered avariation of the theme resorts developed by the Disney Corporation. Theconcept has been used successfully elsewhere as in Sun City in SouthAfrica, which is a well-known international destination which offerscasinos, golf courses, a jungle theme park, and other entertainmentattractions as part of the large resort complex. These properties functionto a large degree as self-contained destinations which attempt to keep theguest, including family members, at the property as much as possible. Toaccomplish this, the resorts include extensive amenities and generallysome type of theme park which is part of the property. Although gamingremains central, the extended amenities serve to capture more of thetourist expenditures from all members of the family unit.

4.3.4 National Heritage AccommodationsIn many countries, historic buildings and structures such as palaces, castles,chateaus, monasteries, and convents have been converted to hotels. Someare privately run but others are part of a government-run chain such as theParador hotels in Spain which are popular with both international visitorsand Spaniards. Paradors are usually four- and five-star accommodationswhich have been modernized within but maintain their historical exteriors.They are often furnished with art treasures, antiques, or reproductions, andhave reputations for good service and meals.

"Paradors"

4.3.5 Bed and BreakfastsThis segment of the accommodations industry has grown steadily overthe years and is now made up of thousands of privately owned homesand inns around the globe. Bed and breakfasts (B and Bs) run thegamut from luxury to economy-type accommodations. Today, thebusiness of B and Bs has become more highly organized with many ofthe properties joining international reservations systems. Other modestestablishments which offer breakfast and sometimes light mealsinclude hostels and pensions which are often family-run operations.

4.3.6 The Emergence of the International HotelHistorically hotel companies first focused on their own region andwithin their continental boundaries. However, as international travelincreased in the late 1950s, more and more hotels began to look atexpansion into international markets. One of the major catalysts in theinternational hotel development arena was the former Pan AmericanAirlines. As air travel developed, Pan Am discovered that manylocations did not have adequate hotel accommodations. In order tobetter serve international travelers, Pan Am formed the Inter-Continental Hotels Corporation (IHC) as a wholly owned subsidiary in1946. Soon there after Pan Am acquired its first hotel in Brazil in 1949(Gee, 1994, p. 30). Inter-Continental Hotels and others wereestablished with the international business traveler as a primarymarket, and this segment remains important representingapproximately 60 percent of Inter-Continental’s sales. Other airlinesfollowed the Pan Am example including United Airlines which mergedwith Westin Hotels and Resorts in 1978. Although United Airlines hassince divested itself of hotel ownership, many major airlines of theworld continue with either ownership or arrangements to promotecertain hotels through their reservation systems such as Japan Airlineswith its international network of affiliated Nikko hotels. Although thehotel market generally is dominated by U.S. multinational corporationsand chains, European chains such as Forte PLC, Club Mediterranee,Accor, and Meriden, and Asian chains such as the Taj Group, Oberoi,and the Mandarin-Oriental hotels have properties on more than onecontinent. Table 4.3 lists the 20 largest corporate chains in the world.

4.3.7 Financing of International HotelsThe globalization of the business community has had noticeableimpacts on the financing of international hotels. Increasingly, financingsources have come from non-domestic and non-traditional sources, and

76


Private homes

Airlines'associations

with hotels

foreign borrowing has become more common (Gee, 1994, p. 127).Many governments in developing countries have developed incentivepackages to lure needed hotel and resort development. Such incentivepackages often include government participation, reduced or deferredtaxes, or assistance in securing investment capital. Many developingcountries have also established governmental agencies to assist foreigninvestors deal efficiently with other governmental agencies and permits.

77


Source: Somerset R. Waters, Travel Industry World Yearbook,The Big Picture 1995-96, p. 144.

Rank 1994 Organization CompanyHeadquarters Rooms 1994 Hotels 1994

1 Hospitality Franchise Systems USA 424,352 4,291

2 Holiday Inn Worldwide USA 356,000 1,930

3 Best Western International USA 280,144 3,409

4 Accor France 256,607 2,265

5 Choice Hotels International USA 247,069 2,827

6 Marriott International USA 180,500 851

7 ITT Sheraton Corp. USA 132,477 425

8 Hilton Hotels Corp. USA 92,452 226

9 Forte Plc England 88,153 888

10 Carlson/Radisson/SAS USA 79,482 349

11 Promus Cos. USA 78,690 570

12 Hyatt Hotels/HyattInternational USA 77,882 170

13 Club Mediteranee SA France 65,128 262

14 Inter-Continental Hotels England 53,092 141

15 Hilton International England 53,052 162

16 New World/RenaissanceHotels Hong Kong 47,139 140

17 Grupo Sol/Melia Spain 46,500 175

18 Westin Hotels & Resorts USA 39,470 76

19 La Quinta Inns USA 29,276 227

20 Societe du Louvre France 29,120 468

Table 4.3: Corporate Hotel Chains, 1994

Financial institutions worldwide at the same time have become moreconservative in their approval of hotel and resort loans. Part of the reasonhas been oversupply conditions in several world markets in recent yearswhich have resulted in loan defaults. Lenders today typically requiremarket feasibility studies and reports as part of the loan request process.Other major considerations by lending institutions are the expertise andreputation of the management company that will operate the property,often with performance guarantees as part of the management contract.

Developingcountries

Loan approvals

4.4 Food and Beverage Establishment Classification

Like the accommodations sector, food and beverage establishments canbe subdivided into many segments. However, unlike the accommodationssector, a large part of the food and beverage sector is not related to thetravel industry. These include major sectors such as institutional foodservice in schools, colleges, and hospitals, military food service, andother establishments. The segments which are interrelated with the travelindustry are commercial establishments which are primarily or partiallytourism dependent based on their location, clientele, and seasonal traffic(Gee, Makens, & Choy, 1989, p. 324).

In terms of total tourist expenditures, money spent on food andbeverages is second only to airline transportation in terms of vacationcosts. Food away from home is conservatively estimated at 18 to 20percent of all tourist expenditures. However, it would be difficult todetermine the percentage of sales attributable to the travel industrysince food and beverage revenues are usually generated in restaurantestablishments by both visitors and residents in the community.

Food and beverage outlets are more sensitive to economic cycles thanmost other types of retail businesses and typically have high mortalityrates. A restaurant’s profit margin is based on its ability to control foodand labor costs, which may run as high as 60 to 65 percent of revenueswhile the ratio of profit to sales is very low. In the host economy, it is alsoimportant to consider the relationship with local suppliers of food and theavailability of produce. For example, if food and beverages need to beimported to any great extent, much of the economic benefit gained by theindustry will be lost due to leakage of revenues to pay for the imports.

4.4.1 Hotel-Related Food EstablishmentsEstablishments which are tourism dependent are often owned andoperated by a hotel, or located in space leased out to independentrestaurant operators by hotels. Hotels may offer a variety of outletsincluding restaurants, dining rooms, coffee shops, room service,catering, and banquets. They also offer a variety of meal plans.Although the percentage of hotel income from food and beverage saleshas gradually declined in the U.S. owing to changes in customerpreferences and eating and drinking habits, full-service internationalhotels averaged approximately 30 percent of their revenues from food

78


Non-touristindustry

Economic factors

Hotel eateries

79

Food and Beverage Establishment Classification

and beverage sales in 1994 (PKF Consulting, 1994, pp. 5, 58). In somelocales such as Singapore and Hong Kong, food and beverage sales areas high as 50 percent of hotel revenues.

4.4.2 Independent Food Service EstablishmentsMany independent food service establishments rely on tourismbusiness as well as local trade. These establishments may beindividually owned and operated, part of a corporate chain, or afranchise. The vast majority of franchisees are fast-food outlets servingfoods like hamburgers, pizzas, or fried chicken. Franchised restaurantsare expanding worldwide such as the U.S.-based McDonald’s andMövenpick in Europe. Mövenpick began in Zurich, Switzerland in1948 and expanded into international activities in 1968. Since then ithas expanded its operations to include packaged food products as wellas hotels in countries in Europe, the Middle East, and Asia.

Another major food service segment within the travel industry istransportation-related. Airlines, for example, spend billions of dollarseach year on food and beverage purchases for inflight service. Somecarriers have their own ground commissaries with secured and bondedareas for duty-free liquor; others contract out their food service withcommercial caterers. In the U.S., the latter has become the more commonpractice while in Europe and Asia, carriers prefer to operate their ownkitchens in order to emphasize the importance of onboard dining.Onboard food and beverage service is also a hallmark of sea cruises,which typically offer meal service around-the-clock, constituting one ofthe highlights of the cruise experience. With the revival of the legendaryOrient Express in Europe and the Orient Express on the E & O linestraversing Singapore, Malaysia and Thailand, the glamour of luxury traintravel during the 1920s and 1930s has been restored, a major part of whichis based on outstanding dining cars and impeccable service.

4.5 Hotel GuestsHotel guests are divided into two general market segments, one beingtravel for business or government, the other for pleasure or leisuretravel. As travel often straddles business and leisure, it is not alwayseasy to differentiate the two categories. Business travelers worldwideare more likely to stay in urban hotels and use a higher percentage ofupscale services than pleasure travelers, but this depends on the natureof their business, the type of companies they work for, the positions

Transportationfood service

they hold, and purpose of their trips. Some may be quite cost-consciouswhile others may be on liberal expense accounts. As such, businesstravelers are found in all price levels of the hotel business. To cater tothe needs of business travelers, hotels have provided business-relatedamenities such as in-room computer connections and business centersin hotels. These centers offer such services as photocopying and faxmachines, desktop publishing software, computer work stations, laserprinters, video conferencing capabilities, and clerical staff on call. Incontrast, it is estimated that about 40 percent of worldwide demand forhotel rooms, especially within the resort category, fall into the leisureor personal travel markets. The leisure markets are highly segmentedby lifestyle are often more sensitive to economics, political situations,and price-value relationships. In general, the hospitality industry hasfound that these market segments tend to react positively to packagedtravel, loyalty awards, and other travel incentives.

4.6 Food Service ClienteleFood service clientele in the travel industry are as varied as the generalpopulation. Cultural or national characteristics generally dominate tastepreferences, especially at breakfast when people want familiar foods tostart their day. For example, Asian travelers may prefer a rice porridge,noodles in broth or dumplings, while Americans may want pancakes orham and eggs and Europeans, bread rolls and espresso coffee as thebreakfast meal of choice. Many restaurants will cater to these diversetastes, while others may feature local cuisine as part of the attraction ofthe locale. International hotels generally attempt to accommodateguests with different lifestyles and tastes, adapting their menus anddining styles to reflect these multicultural needs. Others emphasizemenus and dining styles which are authentic in terms of their cultural orethnic origin and reflect the location of the hotel (Gee, 1994, p. 359). Itwould be difficult to characterize the clientele of food and beverageservices even among hotel guests, as many factors influence the choiceof restaurants, including cost, time of day, convenience, menu and styleof service. The guest who might choose the hotel coffee shop forbreakfast, may eat lunch at a fast-food outlet while sight-seeing duringthe day, and have dinner at the hotel dining room or an outside specialtyrestaurant. Moreover, many hotels and restaurants also include a sizablelocal resident component in the use of their dining facilities.

80


Business andleisure guests

Diversity inchoice andreasons for

choosing

4.7 Ownership and Management of Accommodations

It is important to understand that hotels are managed and operated underdifferent systems around the world. There are many models, including:

• Independently owned and operated properties.

• Properties that are independently owned and operated with chainaffiliation.

• Chain-owned and operated properties.

• Independently owned, chain-operated properties.

• Franchised properties.

• Referral group properties (Gee, 1994, p. 14).

Independently-owned and operated properties outnumber chain-affiliated properties, but in terms of number of rooms, hotels owned andoperated by chains are dominant worldwide. In different parts of theworld, expansion has taken place differently. In Asia, equity investmentsare preferred, whereas in North America franchising and managementcontracts tend to be more popular. In reality, there are manycombinations and arrangements for managing hotels. In each system orarrangement, there are benefits and disadvantages to the owners andmanagers. In terms of management arrangements, properties may becompany-owned, part of a franchising system, or managed by contract.

4.7.1 Company-Owned and Operated SystemsIn this system, the property is owned by an individual or a companywhich can be a chain with multiple properties. The general advantagesof this system are:

• The owner has independence.

• There is more flexibility with decision making and thus decisionsare often reached more quickly.

• Direct ownership allows the owner major, if not full, control of theoperating policies and procedures.

• Since the owner and manager are the same, this individual or entityobtains the full benefits of the profits.

81

Ownership and Management of Accommodations

Chains dominate

The disadvantages in an owner-operated system can include:

• The owner has the full risk. In international settings, this can causeproblems in unstable political environments.

• When there is only one or a few properties, the reservations andreferral system may not be adequate.

• It is often more difficult to obtain capital for growth, especially ifthe chain is small.

4.7.2 FranchisingA franchise is “an arrangement in which the owner of a trademark,tradename or copyright licenses others, under specified conditions orlimitations, to use the owner’s trademark, tradename or copyright inproviding goods or services.” Hotel franchising comes in many forms,but the basic premise is that the owner remains in control of themanagement and the property, yet has the advantages of a large chain interms of trademark or tradename and marketing outreach. Mostfranchise systems are set up with the owner of the property, known as thefranchisee, obtaining the right to use the name and to be part of thenational or international chain, belonging to the franchiser. Rights givento the property owner include exclusivity of franchise rights to areasdefined by the franchiser. Under contract, the franchisee agrees to abideby the operating policies and practices as defined by the franchiser in theagreement. In general, the franchisee will agree to pay a fee and in mostcases some percentage of gross sales as defined by the specific contract.

In general, the advantages to the franchise system for an owner include:

• The right to use the brand name.

• Being part of a reservations system which has international access.

• The right to purchase supplies via the franchiser. In most cases thiswill afford savings to the owner.

• Professional managerial assistance. This is of obvious benefit to anowner who may have limited experience in the hotel industry.

Among the disadvantages to the franchise system are:

• The franchisee does not have complete management control. In generalthe policies and procedures must be followed as set by the franchiser.

• The franchisee must pay for the franchise rights and agree to paymonthly fees.

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Defining"franchise"

• The franchisee is tied to the franchiser and how the brand namefares in the marketplace tends to affect all parts of the system (Gee,1994, pp. 242-243).

4.7.3 Management ContractThis arrangement is favored in many international settings as it allowsa hotel chain to establish a presence often without the investment ofownership. The management contract allows for the separation ofownership and operation. With such an arrangement, the owners act asinvestors who allow someone else to manage the property. The exactarrangements vary greatly between chains and within chains. There arenumerous factors which come into negotiation in a specificmanagement contract. In general, the chain requires fees to be paid fortheir management responsibility.

In the international setting, management contracts are used widely byowners. Financial institutions and lenders have historically favoredmanagement contracts because of the lower financial risk for propertieswhich are managed by experienced hotel operators. At the same time,management contracts are a way for hotel companies to expand.

The management contract system affords the following advantages:

• The investors are not required to become involved in themanagement of the properties.

• The brand name generally assists in the property marketing.

• The management team is provided for the owners.

• Financing is generally easier to obtain.

A management contract has the following disadvantages:

• Certain fees must be guaranteed by the owners. Thus, theoperational risk falls more heavily on the owner than the chain.

• Owners and chains often do not agree on daily managementpractices. Generally the owners have less impact on operations thanthe operator.

• Chains operate by standard management practices. These are oftennot flexible enough in international settings.

• Management contracts often result in strained relations betweenowners and operators. Perceptions and communications often arestumbling blocks between both parties (Gee, 1994, pp. 230-241).

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Separation ofowner andmanagement

Lower risk andexpansionpotential

A brief look at these three systems of management underscores thevaried issues of hotel management. There is no one type ofmanagement arrangement that is best. The individual arrangementsthat are agreed upon always involve the weighing of the advantages anddisadvantages for a given situation.

In recent years, the industry has seen the emergence of larger and largerchains. Beginning in the 1980s many hotel industry companies havesought to combine their resources to gain stronger positions in regional,national, and international markets. The emerging mega-chains haverelied heavily on management contracts as one means of expansion, incombination with buy-outs, acquisitions, mergers, and joint ventures.Increasingly, a large percentage of rooms worldwide are in the hands afew corporations who market to multiple market segments. Smallerchains have also formed strategic alliances with the larger mega-chainswhich has allowed many to survive in a competitive global marketplace.

4.7.4 Management Measures for HotelsThe hotel industry uses several key measures including room rates andoccupancy ratios to evaluate the business success of individualproperties and chains. These standard measurements are used byfinancial institutions and worldwide consulting organizations to hotels.

Hotel Rates

Hotel rates can be one of the most confusing parts of hotel operationalanalysis. The officially assigned rate for each type of room in the propertyis called the rack rate. In reality, hotels have dozens of rates that arediscounted off the rack rate. The rack rate, which is based on theinvestment cost and required revenues to cover fixed and variableoperating costs, is generally the highest rate charged for a room.Discounted rates are part of the marketing plan to attract various marketsegments. Discounted rates can be offered to such groups as governmentemployees, members of the military, tour groups, senior citizens, andmany others. The most important measure regarding hotel rates is theaverage daily rate (ADR), which is calculated by dividing the total roomrevenue by the number of rooms occupied. Thus, heavy discounting willresult in a lower ADR. In recent times, the ADR is more often referred toas sales per room occupied. The need to generate sufficient sales to getbeyond the breakeven point has been a major factor in discounting byhotel management. Progressive hotel operators today use forms of yield

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Mega-chains

Standard ratesand discounts

management in room rate allocation. Yield management concepts werepioneered by airlines attempting to maximize the passenger revenue perseat mile, and the basic concept has been adapted to room sales by thehotel industry. A main goal in yield management is to get the maximumrate for each room given the existing demand at a given point in time. Alldiscounted rate programs are reviewed in relation to the room supply anddemand analysis. Airlines and hotels realize that airline seats and hotelrooms cannot be inventoried. Hence, any unsold airline seats or hotelrooms will “perish” once the day ends.

Occupancy Rate

The occupancy ratio or rate is as important an indicator of profitabilityas is the ADR. The occupancy rate is calculated by dividing the numberof occupied rooms by the number of rooms available for sale. Thus, if thehotel has 300 rooms available for sale, and 200 rooms are occupied, theoccupancy rate is 67 percent. Hotels rarely operate at 100 percentoccupancy for an entire year, and depending on its ADR, may need as lowas 50 percent or as high as 80 percent to achieve profitability. As a generalrule, hotels require at least 65 percent occupancy for profitability.

There are many variables that affect the level of hotel occupancy. It isimportant to know the occupancy rate of the hotel, but knowing howmany people were in the rooms is another important factor. Multipleoccupancy tends to increase the revenue for a hotel property. There areother variables such as the rate charged, but in general the higher thepercentage of double occupancy the more revenue. As mentionedearlier, rates charged for rooms vary from the rack rate in accordancewith marketing programs. The average rate per room occupied is anindication of discounting and multiple occupancy in the property. AHigher average rate per room will be achieved when there is less roomprice discounting and when there are more guests per room.

Other Revenue and Cost Concerns

Although there are hotels which still provide rooms only, most propertiesand property types have other sources of income that become part of therevenue and cost picture beyond hotel rooms. Worldwide, room revenuedoes account for well over half of total hotel revenue but other sources ofrevenue are also significant. In 1993, room revenue accounted for 59.8percent of the total hotel revenue flow while food and beverage revenueaccounted for 30.4 percent of the total (PKF Consulting, 1994, p. 5).

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Occupancyneeded forprofitability

Guests per room

Room revenue

Hotel food and beverage revenue come from a variety of outletsincluding coffee shops, buffets, fine table service, room service,catering, and banquets. Hotels also offer a variety of meal plans. TheAmerican plan (AP), also known as full pension in Europe, means thatall meals are included in the hotel room rate. Ironically, this rate is notoften used in American hotels except perhaps for resorts where it mayassist in marketing value vacation packages. By contrast, the Europeanplan (EP) normally provides no meals. This is the plan that is mostcommon in North American hotels, as opposed to the American Plan.There are many variations to these two basic plans. The Bermuda plannormally includes some type of breakfast. The modified Americanplan (MAP) normally includes breakfast and dinner but not lunch.

While room and food and beverage revenues comprise the primarysources of income, labor is the industry’s single largest cost. In termsof hotel operations, food and beverage is the highest labor cost areafollowed by rooms (PKF Consulting, 1994, p. 58). Certainly anyanalysis of revenue and costs needs to be done by country and region,as many country-specific economic factors must be considered. Hotelsare learning that attention to food service can be a good source ofadditional revenue, as many hotels have attempted to increase theirrevenue from food and beverage while keeping the expenses associatedwith food and beverage fairly constant.

4.7.5 Food Service Management and Operations

Independent restaurants commonly owned and operated by individuals,partnerships, or families are found worldwide. Because of the low ratio ofprofit to sales, however, restaurants are especially susceptible to failure,with the majority going out of business within five years (Coltman, 1989,p. 23). Because the profit margin of a food outlet is dependent on food andlabor costs, a number of critical factors need to be considered in managingand operating a restaurant. Since much of the success of a restaurant isdependent on the menu, menu planning is basic to a restaurant’s success.The menu is important not only in attracting customers, but also influencesthe financial investment that is needed to start a restaurant since the menucan dictate the needed equipment, food costs and labor costs. For example,a fine dining facility will require staff that is trained to prepare as well asserve food, and may involve other costs such as uniforms for the wait help.In contrast, a fast-food outlet or a cafeteria would have a limited menu,fewer staff, and less need for staff or space.

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Meals includedin rate

Hotel's cost

Restaurantsuccess

Corporate-owned restaurants with multiple outlets or franchises alsohave additional advantages in terms of cost-savings that individually-owned restaurants do not. These include cost savings that may comewith limited menus, greater purchasing power and better marketpenetration through organized marketing efforts. For fast-food outletsespecially, franchisers provide training to teach operators ways tocontrol food cost through strict portion control, inventory control,avoidance of waste and controlling labor costs by standardizingprocedures and emphasizing continuous training on the job.

4.8 Hotel Operations

4.8.1 ReservationsAlthough direct individual hotel reservations still account for more thanone-third of all hotel bookings, technology is rapidly changing thesereservation patterns. The worldwide, toll-free reservation systems andcomputers and the Internet are making it easier for individuals to arrangetheir own travel. Increasingly, hotels are part of reservation systems thatlink hotels by some common affiliation. The airlines’ computerreservation systems (CRS) are becoming interactive as travel companiesinvest in the hardware and software to link the systems together resultingin airlines, travel agencies, car rental companies, and hotel chainsoffering easy access to travelers. The CRS have increasingly evolved intoglobal distribution systems (GDS) which link all parts of the distributionsystem electronically. In the future, clients will be able to view picturesand “tour” the property before a reservation is placed, and the worldwidereservation system that is currently emerging will become a major forcefor change in the lodging industry.

4.8.2 MarketingMarketing the hospitality facility today must be viewed in terms of aglobal market. The reservations systems are a vital part of that marketingsystem. But today’s hospitality operator faces a more complexmarketplace. National tourism administrations (NTAs) are also importantto the hotels in international marketing since they usually work with thelocal travel entities such as travel agents, travel wholesalers, andconvention planners in large-scale promotions. The NTAs normally havea great deal of marketing information regarding major buyers that is ofgreat value to hotels. Decisions to advertise to segments must be viewed

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Hotel Operations

Advantages tofranchiserestaurants

Customer'scomputer use

Internationalmarketing

in terms of markets, values, and cultural attitudes. The internationalmarketing strategy of today requires that hotels also understand the roleof travel intermediaries in predicting potential business.

One of the most important aspects of marketing for hotels is the traveldistribution systems discussed in Chapter 5. It is important for thehotel operator to know how the products and services are sold to theultimate buyer. In the United States, it is common for the travel agentto play a major role in the purchase of travel to foreign destinations. InJapan, travelers tend to be influenced by a handful of large touroperators while other Asians and Europeans tend to shop many sourcesfor travel information before booking. The success of hotel marketingoften will ultimately depend upon the relationship a hotel has with theappropriate and critical intermediaries.

Hotel positioning also remains important in global marketing. Positioningis the way hotels differentiate themselves in the marketplace. Some hotelsare positioned according to their price-value, such as economy or budget,moderate, or luxury; others, by the type of property such as resort, spa,casino, condominium; still others by the type of service provided,including conferences, conventions, and bed and breakfast. Hotels todaymust use detailed market segmentation tools to make certain that theirpositioning in the marketplace is communicated to the potential client.Given that it is the consumer who ultimately identifies the position of theproduct in the marketplace, the competition between hotels helps todefine the position of the hotel in the broader marketplace.

Advertising, promotion, public relations and personal selling areequally important marketing tools for the hotel. These are the ways thatthe messages get to the potential markets the hotel is seeking. Theselection of the correct media is not an easy task. There is a vast arrayof communication media available including newspapers, television,radio, the Internet, and trade publications. These choices are furthercomplicated by the fact that different cultures have differentinterpretations of various media and different media habits.

Sales promotions are activities other than advertising, publicity, andpersonal selling. These can include a variety of special programs such aspostcards, brochures and posters. One of the important promotions forglobal hotel marketing is the use of cooperative promotions orcooperative marketing. These include programs where the hotelscooperate in marketing a destination by pooling their marketing dollars.The positive effects are that these programs normally enlarge the pool ofvisitors to a destination, and thus tend to benefit all hotels in the region.

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Travelagent's role

Positioning

Marketing toolsand promotions

Personal selling has long been important to the hotel industry. Thisinvolves direct contact of the sales force of the hotel with the potentialclient. These activities extend to direct contact with members of the traveltrade. Personal selling tends to be effective but expensive. Combined withthe expense is the reality that selling services in cross-cultural settingspresents more challenges since in the international arena, the sales personmust understand cultural patterns as well as the language.

4.8.3 Hotel StaffingThe staffing needs for hotels range from executive level positions such asgeneral managers to unskilled positions at lower levels. Jobs such asresident manager, front office manager, director of sales, cateringmanager, reservations clerk, housekeeper, doorman, chef, kitchen helper,and laundry worker represent only a few of the many levels of employmentin hotels. International hotels may face additional challenges in the humanresources area at all personnel levels. A new destination, for example,often does not have either the trained labor force for upscale properties orlocal management expertise. It has long been a custom of internationalhotel chains to recruit experienced managers beyond national boundaries.These expatriate managers bring with them the required hotel educationand training. At the same time, ideally these individuals must have theability to understand and work in the local culture. The successfulexpatriate manager can often help in the development of middlemanagement recruited and developed from the local labor force.

Equally challenging for the international hotels is having an adequatelabor force. In general, an adequate labor supply for the hospitalityindustry is a global problem. The service industry also has historicallybeen one of compensation based on a mix of pay (on the low side) andperquisites (on the high side), long hours, and high turnover. In theinternational setting, the rules of hiring, supervising, appraising,disciplining and training a hotel staff are also influenced by the localculture. For the international manager, there are often no clear-cutguidelines and success has often come through adaptation andintegration of prior experiences with locational realities, differentapproaches based on local advice and best judgment.

4.8.4 Use of TechnologyThe accommodations industry has often been criticized for laggingbehind other industries in the adoption of technology. In the pastdecade, however, the lodging sector has adopted technologies at a fast

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Hotel Operations

Personal selling

Labor levels

Labor forcechallenges

pace led by the major chains. In hotel operations, technology todayspans from the front of the house to the back of the house. Computershandle reservations and room assignments and assist with securitysurveillance and key control. In the hotel kitchen, computers recordorders, manage inventory and even automate some cooking functions.Indeed, virtually every part of the property involves the use ofcomputer technology in one form or another, whether information orrobotics. Technology increasingly free up employees so that they canprovide more personalized service to guests.

Computer reservations systems (CRS) for the lodging industry continueto expand and grow with advances in technology. A hotel chain’s CRSmay now be linked with the home computer. These systems turn thereservation systems into a marketing vehicle for global distribution of thechain recording demographics, guest histories, and related information.

Some hotel systems handle not only the CRS function, but virtuallyconnect the entire property on one system. Functions include telephones,inventory, payroll, and energy systems that control air conditioning, lightand power. Today’s traveling public, especially business travelers, alsoexpect to find communications technology available in their rooms as anextension of their “office away from the office”.

4.9 Travel industry LinkagesFor tourism to succeed, the hospitality sector must work together withother segments of the travel industry. Over the years, theaccommodations industry has learned to work with various industrysegments such as airlines, travel agencies, and tour operators to assistin the marketing of the destination. During low season especially, jointpromotions of special value tour packages involving the cooperationand contributions of different members of the travel industry,cooperative marketing campaigns, and travel agencies familiarizationtrips all help to fill rooms and airplane seats.

4.9.1 Marketing PartnershipsWorking as partners in travel, many major hotels and airlines offer awardsthat reward consumers for using specified hotels and air carriers. Thesearrangements have now expanded to rental cars, attractions, and upscalerestaurants. The various award programs vary considerably within theindustry. Frequent flyer miles and frequent stay point awards at hotels arevery common. In addition, there are programs which reduce the price ofrooms off the rack rate or the standard room rate by offering free

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Working together

Award programs

The many usesof computers in

today's hotels

accommodation for every two or more paid nights. The various programsare often confusing to both the consumer and the travel agents as programsare continually modified. These programs, nevertheless, generally buildimportant partnerships within the industry and often develop importantconsumer brand name loyalties (Kaiser & Helber, 1987, p. 179).

4.9.2 Hospitality-related Industry OrganizationsIn many countries, the members of the hospitality industry haveorganized business or industry organizations which provide a variety ofservices to their members. Among the services common to all suchorganizations is an organized approach to promoting the use anddevelopment of hospitality facilities and services for the traveling public.These organizations attempt to help negotiate favorable laws andregulations that affect the hospitality industry and tourism in general.They may also play a valuable role in the resolution of conflicts that mayresult from differences in goals and objectives with the public sector.

For example, the American Hotel and Motel Association (AHMA) is afederation of hotels and motels whose membership accounts for wellover 50 percent of all hotels and motels, and in terms of revenue reflectsover 80 percent of the revenue for the entire U.S. hotel industry. TheAHMA works for favorable laws that affect the industry including suchissues as taxation, liability, and advertising. Other regional andinternational organizations which represent the lodging sector includethe European Motel Federation in the Netherlands, the InternationalHotel Association in Paris, France, the International Organization ofHotel and Restaurant Associations in Zurich, Switzerland, and theCaribbean Hotel Association in Puerto Rico. Specialized sectors of thelodging industry also have organizations to represent them such as theInternational Youth Hostel Federation and the Bed and BreakfastReservation Services World Wide.

SUMMARY

The hospitality industry, representing the accommodations industryand the food and beverage sector, comprises a major part of the globaltourism industry in terms of revenue and employment. The growth inglobal tourism has resulted in many changes to the accommodationand food service industry in recent years. Hotels and restaurants haveincreasingly become part of national, regional and international chains.Franchising has been used extensively in the accommodations industryas well as the food and service industry, which allows a more rapid

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Travel industry Linkages

Promotion of useand development

Differentorganizations

penetration of the marketplace. However, the bulk of the global foodservice industry will likely remain with independent restaurants, wherethe customer seeks a special or different dining experience. Newtechnologies, demographic changes, and economic and political shiftswill continue to impact the management and operations of hotels andfood outlets in the next century.


1. What factors have contributed to globalization of the lodging industry?

2. What are the sources of hotel revenue and what are the expenses?

3. What do ADR and occupancy rate mean?

4. List and describe the major classifications of hotels.

5. What are some of the major trends in the hotel industry?

6. What are the types of food service operations and how do theydiffer according to the markets they serve?

7. What are some worldwide trends in the food service industry?

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CHAPTER 5

Travel Distribution Systems

Learning objectives

• To understand the travel distribution systems and their services.

• To differentiate the roles of tour wholesalers, tour operators, and travel

agents.

• To understand the economics of tour wholesaling.

• To be aware of the impact of technological change on the travel

distribution systems.


commissions


distribution systems - direct and indirect

electronic ticket delivery network (ETDN)

global distribution system (GDS)

group inclusive tour (GIT) or inclusive tour (IT)

Internet

land arrangements

satellite ticket printer (STP)

specialty channeler

suppliers

ticketless travel

tour operators

tour program

tour wholesaler

travel agent

travel intermediaries

5.1 IntroductionWe usually associate a product with its production and consumptionstages, often overlooking an intervening process which moves theproduct from production to the consumption stage. This process iscalled distribution. Theoretically, the distribution of the touristproduct resembles that of other industries. It involves the participationof wholesalers, retailers, and other intermediaries or middlemen, allresponsible for bringing the product from the supplier to the consumerin a sales distribution system. In practice, however, two factors makethe distribution of the tourist product unique. First, unlike agriculturalor manufactured products which can be transported to the consumer, itis usually the consumer that has to be transported to the point ofconsumption for the tourist product. For example, to enjoy the use of ahotel room, a meal or a tour, the consumer must go to the destination.Second, unlike tangible products with a shelf-life, the tourist product ishighly perishable. An unsold hotel room, meal or tour bus seat has noincome value in the marketplace the day after.

Collectively, these factors make the selling of the tourist product achallenging task. Thus, in order to better understand the mechanics ofthe tourism market and its economic significance, it is important to gaina basic understanding of the sales distribution systems and their role ininfluencing sales. This chapter describes the basic types of distribution

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5Travel Distribution Systems

Differences indistributing thetourist product

systems and explains the roles of travel intermediaries, including tourwholesalers, tour operators, and travel agents. As an integral part of thetravel distribution process, the role of technological advancements andtheir impact on travel distribution systems are also discussed.

5.2 Historical BackgroundToday’s travel distribution system can trace its origins to the 1840swhen Thomas Cook, an Englishman, organized what could be calledthe ancestor of today’s tours. An ambitious entrepreneur and innovator,Cook also introduced several types of tours including the first pleasuretour to North America in 1866 and the first around-the-world tour in1872. In the nineteenth century, tours were almost exclusively for theupper classes, but Cook tried to reduce the cost of traveling bychartering entire ships and booking blocks of rooms in hotels. In 1874,Cook was also the first to introduce circular notes to be used bytravelers. These were accepted by foreign banks and hotels and relievedtravelers from carrying large amounts of cash. They were a simpleversion of the traveler’s checks of today (Milne, 1991, p. 78).

Before the introduction of the travel agencies at the end of thenineteenth century, it was common for hotel porters to make steamshipand rail reservations on behalf of hotel guests. Hotels usually werebuilt close to rail stations and ports where hotel porters were sent tomake reservations and bring back the tickets in return for acommission by the supplier and a delivery charge from the client.

To compete with the railroads, commercial airlines starting operationsin the 1920s also used hotel porters as their agents, paying them a fivepercent commission. Later, airlines began establishing their own salesoffices in hotels in an effort to avoid paying out commissions.

As international and leisure travel increased following World War II,the travel agency business expanded rapidly. Tours also dramaticallyincreased in popularity with the introduction of jet aircraft in 1958. Theadvent of wide-bodied planes in the 1970s further reduced the price ofair travel which increased the affordability of tour packages. Thedemand for tours also expanded as the disposable incomes of people inthe U.S., Europe, and parts of Asia rose, and consumers became awareof the advantages of buying a complete tour package instead oforganizing their own itineraries and bookings.

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Chapter 5: Travel Distribution Systems

ThomasCook's tours

The hotelporter's role

Modern travel

5.3 Types of Distribution SystemsThere are two broad categories of sales distribution systems, direct andindirect, which involve different variations and combinations dependingon the number of intermediaries or middlemen used by suppliers in thedistribution pipeline. Suppliers include hotels, airlines, cruise shipcompanies, car rental companies, railroads, and sightseeing operators.While most of the suppliers are part of the private sector distributionsystem, many destinations also have public sector distribution systemsin tourism. Some governments run travel agencies such as Saigontouristand Vietnamtourist in Vietnam, railways, and hotels. African Tours andHotels Limited, for example, is a leading quasi-governmental hotelmanagement company which runs properties throughout Kenya. Eachof the systems offer advantages and disadvantages, depending on thetype of customers to be served.

5.3.1 Direct Distribution SystemIn the direct distribution system, sales are realized through directcontact between the supplier and the customer without anyintermediary (see Figure 5.1). An example is a prospective travelerwho calls the reservation department of a hotel to book a room or whowalks up to the airline ticket counter at the airport to purchase a ticket.The advantages of this method include:

• Time Savings. There is a direct communication between the twoparties and the transaction is a simple one.

• Increased Profits. Suppliers are not required to give a commissionto any middlemen resulting in greater profit per unit.

• Flexibility. Direct communication with the supplier offers thetraveler the option to make possible changes in the itinerary. Thisbecomes more complicated or even impossible when, for example,the traveler buys a tour package from a travel agent where theitinerary is usually fixed.

• Greater Control. For a number of customers, buying from thesupplier and confirming a booking directly provide a feeling ofcomfort and security in the transaction. For the supplier, dealingdirectly with the customer provides an opportunity forrecommendations and promotions of additional products.

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Types of Distribution Systems

Private and publicdistributors

Withoutintermediaries

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There are also some disadvantages of the direct distribution system.First is the high cost that the supplier faces in order to maintain apermanent sales force. Another disadvantage is the possible reaction ofthe dissatisfied intermediary, since the supplier attracts customers thatcould otherwise be served by them. Finally, if the supplier uses thisdistribution method exclusively, it risks losing an opportunity toincrease its revenues by selling to travelers who prefer to use anintermediary (Collier, 1994, p. 198).

5.3.2 Indirect Distribution SystemIn the indirect distribution system, the supplier makes use of one ormore travel intermediaries in order to reach the consumer. Forexample, a travel wholesaler can book a large number of rooms for acertain period, and these rooms are made available by the wholesaler aspart of a tour package. The customer can then book the tour packagethrough the travel agent who serves as the intermediary between thesupplier and the customer. Some benefits of this distribution methodfor the consumer include:

• Professional Consultation. Working through intermediaries ormiddlemen, the consumer can get a professional opinion about thecomparative advantages of different options. The travel agent, forexample, can provide the traveler with unbiased and personalizedguidance, advice, and expertise.

• Greater Variety. Dealing with a number of different suppliers allowsthe middlemen to offer a wider array of product options that theconsumer might not have the necessary knowledge or resources toexplore individually.

• Lower Price. Travel intermediaries are often able to negotiate lowerrates than otherwise would be available to the consumer.

• Single Payment. The customer is charged in advance and pays for alldifferent elements of the trip such as the flight, hotel, or car rental.This increases the convenience of the purchasing process andeliminates the need for the traveler to remit separate payments todifferent suppliers.

The indirect distribution system benefits the supplier as well. The mostsignificant benefit is the savings from not having to hire sales personnelsince the intermediaries function as a sales team. The collection of sales

99

Types of Distribution Systems

Disadvantages

Usingintermediaries

Middlemen assalesmen

revenues is also facilitated with the presence of middlemen, andcooperating with middlemen as “preferred” suppliers can help thesupplier to generate additional business (Collier, 1994, p. 199).

Variations of indirect distribution may involve two or moreintermediaries in moving the travel product from the supplier to theend consumer. Where there is a third intermediary, this is usually aspecialty channeler. Various types of middlemen can fit under theterm specialty channeler. These include, but are not limited to, meetingand convention planners, corporate travel offices, incentive travelagents, and hotel representatives. The added benefits to the consumercoming from the involvement of the specialty channelers are based onthe easier flow of information, the provision of customized service(often to large groups of people), and a favorable price of the package.

5.4 Travel Intermediaries

5.4.1 Tour WholesalersThe tour wholesaler functions as a middleman between the supplier,also known as principal, of the tourist product and the travel agent whoacts as the retailer. The tour wholesaler designs, prepares, promotes, andexecutes the sale of tour packages, buying large volumes of productsfrom a variety of travel suppliers. These products may include air travel,accommodations, meals, entertainment, ground transportation,sightseeing tours, and special entrance fees for attractions. The productsare grouped by the wholesaler to form attractive tour packages whichare made available to travel agents for sale to the end consumer.

The Role of Wholesaler

Wholesalers generate a large part of the revenues in the travel industrysince purchasing in bulk increases their buying power and ability tonegotiate discounts. In this respect, larger wholesalers have a leveragedadvantage over their smaller competitors. The cost savings is ultimatelypassed to the consumer by making tour packages available at priceslower than the sum cost of all components bought separately at retail.In addition, wholesalers provide advantages to the suppliers of touristproducts who enjoy the financial security of having advance salescommitments for large blocks of rooms, seats, or other products.Wholesalers make a significant contribution to the travel agent and

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Consumer benefits

Defining"wholesaler"

Bulk buying fordiscounts

customer alike by developing and making available an array of tourpackages to satisfy different travel customer tastes and income levels(Gee, Boberg, Choy, & Makens, 1990, p. 49). Some well-knownwholesalers are Cartan and Maupintour in the U.S., Japan TravelBureau (JTB) and Kinki Nippon Travel (KNT) in Japan, ThomsonTravel in the United Kingdom, China Travel Service (CTS) in thePeople’s Republic of China and Deutschesreitsburo in Germany.

Types of Wholesalers

Tour wholesalers can be classified in various ways including the following:

• The inbound wholesaler arranges tour packages for tourists visitingthe country where the wholesaler is based. Inbound wholesalers donot necessarily operate only in the country where they offer toursand some maintain sales branches in other countries.

• The outbound wholesaler arranges packaged travel for tourists whowish to travel to destinations outside the country where thewholesaler is located. Unlike the inbound wholesaler, the outboundwholesaler does not usually focus on a single destination, but mayoffer a wide variety of packages and destinations. However, both ofthese wholesalers tend to cater to the needs of the mass market inorder to have the necessary volume leverage.

• The domestic wholesaler designs and packages tours for localresidents who travel within the country where the wholesaler operates.

• The independent wholesaler represents the majority of wholesalersor about three-quarters of the industry. However, independents alsoexperience the largest failure rate as they are not in a position tobenefit from the financial support of a large company.

• The airline wholesaler can be either a subsidiary selling the seats ofa particular airline or a wholesale business that has formed abrokerage relationship with an airline.

• The wholesale travel agent is a travel agent who puts togethercustomized versions of tour packages to satisfy the needs of marketniches within their customer base. These travel agents such asAmerican Express Travel Related Services and Thomas Cook Traveloften assume the retail and wholesaler roles at the same time.Similarly, the wholesaler may sometimes act as a travel agent byoperating retail outlets.

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Travel Intermediaries

Advantagesfor consumerand agent

• The specialty wholesaler centralizes its business in making toursavailable for special-interest groups (e.g. retirees, singles) or focuses onparticular destinations, accommodations, or alternative forms of tourismof interest to adventure travelers, culture seekers, or nature enthusiasts.

• The travel clubs and incentive travel companies arrange travelpackages in ways similar to the wholesalers. However, thesepackages do not become available for general consumption and areonly offered to their individual members.

The Economics of Wholesalers

In the U.S., the number of wholesalers more than tripled from 400 to1,500 between 1970 and the mid 1990s. However, these numbers do notnecessarily coincide with high profitability. Unlike travel retailerswhich benefit from commissions, wholesalers generate their grossprofits using a 20-25 percent markup. The markup is applied only in theground services portion of the tour. Although 90 percent of wholesalepackages include air transportation, in general, wholesalers do not makeany profit on this part of the package. This part, which represents almost50 percent of the total price of the package, generates profits that go tothe travel agent in the form of commission. For the wholesaler, after thesubtraction of its operating expenses, there remains an average threepercent before-tax profit out of the total price of an all-inclusive tour.Consequently, high volumes of sales have to be reached in order for awholesale business to be profitable. Additionally, strong sales arerequired in order to reach the average break-even point of the industry.More specifically, before it starts generating a profit, a wholesaler mustsell as much as 85 percent of its packages (Coltman, 1989, pp. 326-327). In contrast to the low return-on-sales that characterizes thebusiness, wholesalers benefit by a favorable return-on-equity ratio. Thisis due to the low requirements in initial investment.

The travel wholesaler is not required to pay in full when booking froma supplier. For example, only a minimum deposit is necessary to securethe desired number of rooms of a hotel for a certain period. Next, thewholesaler can redeem his cash in the form of deposits and/orpayments submitted to him by the travel agent when individualtravelers buy the packages. It should be emphasized that while thecustomers pay the wholesaler for their trips in advance, the wholesalerdoes not usually pay off the supplier until after the trip is completed.Thus, the wholesaler can take advantage of the excess funds also calledthe “float,” before it actually pays the supplier in full.

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Profits frommarkups

Necessity of highvolume sales

Payment practices

Despite this cash flow benefit, the wholesaler faces considerable risksas well. Factors such as changing preferences, unfavorable weatherconditions, safety concerns, or political upheavals can destabilizemarkets and render destinations unsaleable. Moreover, when making alarge number of advance reservations with a supplier, the wholesalermust enter into a sales contract for which he is bonded. Despite theinclusion of typical cancellation clauses in a contract, the wholesalermay still incur significant losses from forgone deposits and pre-payments, and the closer the cancellation is to the departure date, thegreater the reduction of the deposits.

Trends Affecting Wholesalers

In the growing tourism market, wholesalers are likely to face increasedcompetition coming mostly from the suppliers. For example, after thederegulation of the U.S. airline industry in 1978, airlines beganarranging their own tours by combining their services with those ofother suppliers. In addition, lower prices offered by various suppliers,such as discount airfares made available by airlines, have had animpact on the wholesale business. Lower airline ticket prices allow theoption of creating a personalized tour with a total price that could becomparable to the one offered by wholesalers. Moreover, wholesalersmay be affected by changes in consumer tastes as experienced travelersmove away from the typical group travel that characterized the last twodecades toward independent travel.

In recent years, wholesalers have also been increasingly subject to lawsuitsfrom consumers who are better educated and aware of their rights. Falseadvertising has become a problem together with the growth of the tourbusiness, largely attributable to the exploding demand for tours that hasallowed the entrance of many new and inexperienced wholesalers.Sometimes, the claims and promises made by the advertising of wholesalersare in conflict with what the consumer ultimately receives. Other problemsthat wholesalers are sued for may be changes in the scheduled flights or theprices of packages or hotel rooms. Even though wholesalers might not bethe only ones responsible for those changes, which can be the result ofairline schedule changes, exchange rate variation, or hotel errors, they arethe ones that consumers can usually hold liable.

The future of the wholesale business will also be affected by the impact ofthe communication revolution in the travel industry which is discussed in alater section of this chapter. For example, information experts suggest thata good tour is one that can be booked quickly, preferably in four minutes.

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Economic risks

Competition andmarket changes

Lawsuits

The computer'simpact

Inevitably, computers become mandatory for the accomplishment of thistask, and the hiring of more technical personnel by wholesalers has alreadybeen observed as a result of technological changes.

5.4.2 Tour OperatorsIn the travel world, the term wholesaler is often used interchangeablywith the term tour operator. Even though these two terms describesimilar types of intermediaries, a distinction should be made in orderto avoid confusion. In general, the tour operator, also referred to asground operator, can be thought of as a tour wholesaler with a smallerscale of operations. The word operator indicates the main function oftour operators which is to “operate” or run tour packages. In otherwords, tour operators are responsible for the delivery of the parts of atour as promised to the buyer of the tour. To deliver services, operatorsmay employ their own ground equipment and facilities, such asmotorcoaches and accommodations, or rent these from other touroperators or individual providers (Gee et al., 1990, p. 50).

In contrast to a wholesaler who designs and offers a large number of tours,the tour operator can offer only a limited number of tours on a yearly basis.These tours in combination are referred to as the tour program. While thewholesaler will typically include transportation to and from a destination,the tour operator offers his/her services only at a the destination itself. Thetour operator’s defined business is to make the land arrangements at thedestination encompassing hotel transfers, accommodations, sightseeing,prepaid admissions, and other special arrangements. Much like thewholesaler, the tour operators are free to design and offer their ownpackages which can be geared to all travelers. In some cases, however,operators have to comply with the specific preferences of the wholesalerinterested in buying their services. In other instances, they compete withwholesalers who operate packages of their own.

In recent years there has been a trend for tour operators to specialize.For example, companies might concentrate in incentive travel or othersmay focus on sailboat charters. The “group inclusive tour” (GIT) or“inclusive tour” (IT) sector whose customers buy a tour package thatmay include transportation, hotel rooms, airport transfers, andsightseeing, accounted for one-third of total travel expenditures inWestern Europe in 1992. Group tour expenditures in 1994 reached U.S.$7.8 billion in the U.S. and U.S. $1.2 billion in Canada (Waters, 1996,pp. 141-142). Worldwide, UK and Japanese travelers are major markets

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Defining "touroperator"

Limited tourswith service

at destination

Specialization

for tour packages comprising 63 percent and 57 percent respectively ofoverseas holiday travelers in 1992 (World Tourism Organization, 1995d,p. 21). Due to a progressively higher segmentation and the sizable freeand independent traveler (FIT) market whose customers travelindependently of a group, the need for additional specializations of touroperators has increased.

5.4.3 The Travel AgentTraditionally, the role of the retailer in the travel industry has been playedby the travel agent. The travel agent is the final link in the consumptionprocess, connecting the receiver (the consumer) and the source (eitherthe supplier or the wholesaler) of various tourism goods and services.The travel agent is also the visible intermediary in the distribution chainselling transportation, accommodations, meals, activities, attractions,and other travel elements directly to the public. These products can besold individually, in various combinations, or as tour packages to theclients. It is the responsibility of the travel agent to act on behalf ofprospective travelers and understand their desires in order to satisfy themby arranging the necessary parts of the trip (Gee et al., 1990, p. 48).

Legally, the travel agent is a commissioned “agent” or an authorizedrepresentative who is approved to sell the products of a company in acertain geographic area. In terms of distribution, the travel agent maintainsa delicate balance between serving the client and promoting the interestsof the principal the agent represents. Above all, a travel agent has to useknowledge and expertise in responsible ways to successfully plan andsecure a safe and enjoyable trip. This may involve carrying out numerousdetailed activities including but not limited to preparing individualitineraries, informing about travel insurance, documents, andimmunization requirements, as well as giving descriptions of destinations,hotels, and local customs. The demands on the agent have increased as theproduct mix has expanded. Even though almost every agent can sell theproducts of all sorts of suppliers, there are agents who choose to specializein particular areas, and they play many different roles.

In 1992, there were an estimated 67,000 travel agents worldwide ofwhich 47 percent were in the U.S., 30 percent in Europe, the MiddleEast and Africa, 9 percent in the Americas outside of the U.S. andCanada, 7 percent in the Asia-Pacific region, and 6 percent in Canada.In 1994, travel agencies in Europe and the Americas produced aboutU.S. $170 billion in sales (Waters, 1996, p. 137).

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Deals with public

Representativeselling products

Locationand sales

Travel Agents as Counselors

The retail travel agent plays an important role in promoting theefficiency and the quality of the distribution of the various travelproducts. To the customer, the travel agent is the means for researching,organizing, securing, and realizing a desired trip. The agent’s goal is tounderstand what satisfies the traveler’s needs and try to provide it. Thatis why the term counselor is frequently employed to describe theadvising service that the agent provides.

Due to the increasing complexity of the reservation and pricing systems,a client would have to spend substantial time and money to arrange a tripor tour individually. Alternatively, the services of a travel agent may beused which are generally offered free of charge. The travel agent is aspecialist who has developed an expertise in researching and collectinglarge amounts of appropriate and reliable information in very little time.In order to add value to the customer’s travel experience, the agent isrequired to know or have access, at least, to schedules, prices, differenttypes and qualities of accommodations, airlines, and other travelcomponents. Moreover, the agent has to personalize the results of thisknowledge to fit the specific needs of the prospective traveler.

Operating as a responsible and trustworthy professional is an integral partof an agent’s mission. The travel agent’s business depends greatly on repeatcustomers and is severely affected by word-of-mouth. The significance ofcustomer loyalty for the industry is indicated by the fact that approximately85 percent of an agent’s clientele consists of repeat customers.

Travel Agents as Sales Representatives

The travel agent carries out an equally important function as asalesperson. Ultimately, this is what determines an agency’s financialcondition. Most people who seek the travel agent’s advice alreadyknow what they want. Because the value-conscious consumer does nothesitate to research and shop around, agents must not only service andsell what he or she requests, but be able to close the sale as well.

Maintaining a harmonious relationship between serving a client andselling the products of preferred suppliers has always been a challengefor travel agents. The deregulation of the field has allowed agents toobtain different commissions and even overrides (commission ratesthat increase according to the level of sales) from different suppliers.To the supplier, the retail travel agent plays a critical role in promotingand selling its products to the ultimate consumer. The agent provides

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The advisingservice

Specialists

Customer loyalty

Closing the sale

Supplier-Agent-Customer

relationship

three basic elements that facilitate the suppliers’ business. Theseinclude a location where information can be obtained for the suppliers’products, an outlet where a potential customer can purchase thoseproducts, as well as a place were payments can be collected.

In the U.S. and elsewhere, airline deregulation and other developments inthe industry have had a dramatic effect on travel agencies. In 1995, mostof the major U.S. airlines adopted a cap policy limiting commissions inorder to cut costs. For example, Delta Air Lines provides travel agents a10 percent commission on U.S. domestic tickets as long as the totalcommission per ticket does not exceed the amount of $50. The averagecommission rates for domestic air sales have declined for travel agentsplacing increased pressure on agencies to move larger volumes of ticketsto attain the same profit. Another concern is the low-fare trend fordomestic tickets. When airline price wars are in effect, fares often becomeso low that the money an average agent makes selling a ticket may be lessthan what it costs to issue it. Even though this situation is not new, itcomprises a serious burden, especially in combination with restrictedcommissions. Because of the commission cap, travel agents cannotbalance losses incurred in selling cheap air tickets with higher fare tickets.

5.4.4 Regulation of Intermediaries

Travel Agents

Historically, travel agents have been affected by regulations, especiallyfrom the airlines which restrict the number of agents because of concernover increased competition for their own sales offices. Until 1959, atravel agency could not be established unless it had the sponsorship ofan airline and the approval of two-thirds of the members of therespective domestic or international travel conference. The subsequentrapid expansion of the airline industry forced airlines to rely moreheavily on travel agents to reach and service their clientele. Althoughthere has been a relaxation of restrictions since the deregulation of theairline industry in the U.S., even today an agency has to comply tocertain regulations before and during the time it is in business.

In the U.S., where a travel agency is not legally obliged to be licensed inmany states, certification or accreditation consists of the approval fromindustry conferences. A conference is a regulatory body made up oftransportation companies that impose requirements in order to promotecertain standards. For the U.S., there are four major conferences: (1) The

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Commissions

Restrictions

Airlines Reporting Corporation (ARC) responsible for domestic tickets,(2) The International Airline Travel Agency Network (IATAN)responsible for international tickets, (3) The Cruise Line InternationalAssociation (CLIA) responsible for cruises, and (4) The NationalRailroad Passenger Corporation responsible for domestic rail tickets(Mill, 1990, p. 321). An agency which is appointed by one group willusually receive an appointment by the rest of the conferences. Majorrequirements of ARC, for example, are that agencies carry a minimumbond to cover for the possibility of default and maintain a minimum cashreserve. There are also minimum experience requirements for agencymanagement, and the agency must be accessible to the general public,actively sell tickets, and promote travel.

Some states in the U.S. require a license. The license can be obtainedby passing an examination given by the state licensing boards.Additionally, a city license and possibly a county license are requiredin order for a travel agency to be operational. Travel agents may alsochoose to follow the rules imposed by various trade associations whichthey have joined as members.

The EC (European Community) Travel Directive was initiated in 1993to eliminate differences in laws among member European states relatedto group or package travel. The Directive, however, does not replacenational laws regarding ground travel, package holidays, tours, andtour operators and agents and leaves implementation to each state(Downes, 1993). Japan’s travel agency law is considered one of themost organized and advanced, and its 12,500 travel agents are dividedinto three classifications: general, domestic, and sub-agency. Allagencies are required to register with the Ministry of Transport and arebonded (Travel Journal, Inc., 1995, p. 185).

Travel agents have a legal obligation to perform in a professionalmanner. They can be held responsible for the quality of the service theyprovide. The provided service has to be in accordance to the promisesmade to the customer and consistent with the average industryperformance. Agents have to take into consideration any special factorsin the destination that may influence the customer such as politicalstability, health care, and other conditions. According to court rulings,agents can be even held liable in the event a wholesaler goes bankruptbefore the trip. The American Society of Travel Agents (ASTA) in theU.S., the Association of Canadian Travel Agents (ACTA) in Canada,the Association of British Travel Agents (ABTA) in the U.K., and the

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U.S. conferences'standards for

agencies

Licenses

European andJapanese laws

Liability

Japan Association of Travel Agents (JATA) in Japan are some of thegroups or organizations which set industry standards. Internationalorganizations include the International Federation of Travel Agents(IFTA) and the World Association of Travel Agents (WATA).

Wholesalers

For a new wholesaler to enter the industry, usually a local business licenseand compliance with governmental and airline regulations are required.Nevertheless, wholesalers may be subject to additional constraints, someof those monetary, if they choose to join certain professional associations.In the U.S., the tour operator industry is largely self-regulated, and mostbelong to the U.S. Tour Operators Association (USTOA). The USTOArequires an indemnity bond from its members. This goes toward theConsumer Payment Protection Program which helps refund the money tocustomers in case the wholesaler goes out of business.

5.5 The Impact of Technology on Travel Distribution Systems

In the field of tourism, technology represents a dynamic and powerfulfactor responsible for numerous changes in the past, present, and futureof the travel industry. Technological advances especially in the last twodecades have facilitated the distribution of travel services and will havea major impact on the future structure of travel distribution systems.

5.5.1 The Link Between Technology and TourismWithin the last two decades the tourism industry has experiencedtremendous growth. During this period, a series of rapid and radicalchanges has been noted. The resulting evolution has made travelmarketers realize that they are not only in the business of movingpleasure and/or business travelers, but also in the business ofcommunication and information. Changes in consumers’characteristics, preferences, and decision making, and continuousalterations in a highly competitive global environment have created anever closer relationship between tourism and information technology.

It is important to note that contemporary travelers have differentcharacteristics from travelers of three decades earlier at the beginning ofmass tourism development. The lack of travel experiences of earliertravelers and the complexity of the distribution systems favored the

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The Impact of Technology on Travel Distribution Systems

Requirementsand constraints

Changes inmarket andmentality

creation of standardized travel packages for groups. By contrast, today’sconsumers tend to be better educated with wider exposure to travel andstrong preferences for unique travel experiences. Their desire forcustomized travel has influenced their decision-making process as well.

To create memorable travel experiences, suppliers need to providetoday’s prospective traveler with a full range of options. Here, thecompleteness and the clarity of the information offered to the traveler bythe seller are essential variables of satisfaction. The complexity of theissue increases as the competitive global environment of tourismcontinuously generates more information. The combination of theseforces and the need for high professionalism in handling the informationprovided to the consumer necessitates the use of technology to gather,manage, distribute, and communicate information. Technology surfacesas the “enabler” that allows tourism businesses to carry out all thesefunctions in order to create products and services that address personaltravel demands. Additionally, it helps satisfy the need for value whichemerges as a determinant factor of consumer satisfaction. Technology,then, acts as a strong driving force which is reshaping the tourismindustry and providing companies with a competitive edge.

5.5.2 Computer Reservation Systems (CRS)Probably the most widely used technological tool in the travel industryis the computerized reservation systems (CRS). First introduced atthe experimental level in the 1960s, the CRS was usually an internalairline system used for keeping track of the seats sold. In the followingyears, a number of different systems were developed by individualairlines. For example, TWA introduced PARS; United Air Lines,APOLLO; Delta, DATAS II; and American Air Lines, SABRE. Later,airlines realized that they could use the CRS to make their faresavailable to travel intermediaries with increased cost effectiveness. Asa result, in the first half of 1970s, airlines tried to gain an advantageover their competitors by creating their own version of a reservationsystem. The move was based on the expectation that the airline with amore widely adopted CRS would be capable of providing its clientsmore timely information and thereby increase sales volumes.

Because of ownership and control factors, the different CRSs were notinterconnected until 1976 when TWA, American, and United Air Linesgave access to each other’s systems in the first attempt to link systems.This event marked the beginning of the widespread use of the CRS.The advent of CRS directly increased both the effectiveness and the

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Group vs.individual travel

Need fortechnology

Beginnings in theairline industry

Linking systems

efficiency of airline reservations by enabling airlines to continuouslyupdate their databases in terms of seat availability and fareadjustments. It also increased the speed and the efficiency with whichtravel agents serviced their customers. Drawing from the example ofthe airlines, other suppliers such as hotels and car rental companiesalso adopted CRSs (WTO, 1995c, pp. 22-23, 29).

In more recent years, there has been a trend for alliances at differentlevels of the tourism industry. These alliances have resulted as a responseto intense competition, the need to capitalize on economies of both scaleand scope, as well as on economies of networking (maximizing utilityout of networks). An example was the cooperation of Delta Air Lineswith Northwest and TWA for the introduction of WORLDSPAN, areservation-only network. Different travel suppliers also linked theirreservation systems. For example, SABRE started offering reservationcapability to the Sheraton hotel chain and the Avis car rental company.Currently, after a series of alliances, mergers and acquisitions, the CRShas evolved into what is widely known as the global distribution system(GDS). In 1995, the leading GDS companies worldwide wereAMADEUS, GALILEO, SABRE, and WORLDSPAN. Regional CRSvendors include ABACUS (Asia-Pacific), ACCESS (Japan), and GETS(Latin America, Eastern Europe, Africa). The main objective in thedevelopment of these integrated global systems has been to make acomplete one-stop service possible. Using GDS, suppliers,intermediaries, and customers worldwide can now interlink to exchangeinformation on a wide variety of tourist products including airfare,accommodations, ground transportation, and destination information.

5.5.3 Ticketing AutomationOther technological advancements have facilitated the distribution oftravel while cutting costs and increasing responsiveness. Satellite ticketprinters (STP) now allow travel intermediaries to issue tickets directly.The electronic ticket delivery network (ETDN) is another form of STP.The difference between them is that the supplier collects a commissionfor the usage of ETDN, while only a printing fee is received in the caseof the STP. Electronic kiosks, which are stand-alone computer terminalsfound in hotel lobbies, airport terminal, and tourist information offices,now allow travelers to perform a series of different functions such ashotel check-in, purchase of airline tickets, or receipt of informationabout what a destination has to offer. Another development in facilitatingthe distribution of travel are electronic travel documents, simply referred

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The Impact of Technology on Travel Distribution Systems

Alliances withinindustry

Otheradvancementsbenefitingindustry

to as ticketless travel, where the passenger’s personal information existsin an electronic file with the airline. All the passenger is required to dois present personal identification to obtain a boarding pass (Gee,Makens, & Choy, 1997, p. 213).

5.5.4 The InternetThe increasingly widespread use of the global computer networkknown as Internet may eventually have the largest impact of alltechnologies on travel distribution systems. Currently, it can be viewedboth as a substitute and a complement to the traditional distributionchannels. Functioning as a complement, the Internet can be used bytravel intermediaries and individual travelers alike to research availabletravel products and prices. Functioning as a substitute, it allowsindividual travelers to reserve and purchase travel products on-line,potentially eliminating the need for a middleman.

A continuously larger number of travel-related businesses are turningto the Internet due to the benefits that it can have on customer servicedelivery and ultimately on sales volume. For example, in 1995,American Air Lines sold 1.6 million tickets on-line (Gunther, 1996). Tomany, the Internet provides a great opportunity for reaching newcustomers and targeting additional market segments. The greatestadvantage of the Internet is its capability to make travel productsglobally accessible at a much lower cost than traditional distributionsystems. Cost reductions become possible by eliminating the overheadcosts of reservation departments, decreasing printing and mailing costsof company directories, and avoiding commissions to the travel agents.Despite the many benefits that the Internet brings, there are still somedrawbacks that limit its immediate widespread adoption as analternative distribution method. For consumers, these include the levelof computer literacy, availability of necessary computer equipment,ease of use of software, confusion in organizing the enormous amountsof data, security of sharing personal information, slow response times,and image quality (Cho, Connolly, & Tse, 1995).

5.5.5 The FutureThe single most important issue concerning the future of the traveldistribution systems is the elimination of the intermediary or middleman(i.e. travel agent and even the wholesaler) from the distribution chain.Indeed, the two most powerful technological trends, ticketless travel andthe Internet, tend to challenge the survival of travel intermediaries.

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Both complementand substitute

Advantages anddisadvantages

Elimination ofintermediaries?

Individual computer users with direct access to ample on-line travelinformation can make their own travel arrangements. This, incombination with the possibility of using an electronic instead of aregular ticket make traveling possible without the use of intermediaries.

It is possible that travel intermediaries will shift their business on-line.This could involve collecting, managing, adding value, and redistributinginformation via the World Wide Web to computer users. They can alsomake use of upcoming technologies by providing on-line videos ofvacation destinations and direct e-mail messages to update theircustomers on the latest travel bargains. However, one should keep in mindthat competitors from fields not directly related to tourism, such astelecommunications and computer companies, possess technologies thatcan make on-line travel planning possible. These companies constitute aserious threat for travel intermediaries that plan to go on-line.

No matter what the future developments may be, many insist that thevalue of the personal element of the travel intermediary business cannotbe substituted by non-personal technological advancements. Additionally,it can be argued that many who do travel, such as corporate executives,cannot spend time on booking their own travel. What can be stated withcertainty is that the structure of travel distribution systems is changing,and adopting new technologies to do business will be the single mostimportant factor in the future survival of travel intermediaries.

SUMMARY

Travel sales distribution systems provide the means by which thetourism product or service moves from the supplier to the customer.The distribution system can be direct or indirect depending on thenumber of intermediaries or middlemen–tour wholesalers, touroperators, travel agents–who play a role in the process. The use ofintermediaries is a cost-effective method of distribution and eachintermediary plays an important role. Tour wholesalers and operatorsgenerally create and provide the tour package while travel agents sellthe tours and service the customer directly. Travel agents receive theirincome from suppliers and wholesalers through commissions andaccount for a major portion of reservations and bookings in the travelindustry. However, the relationships within the travel distributionsystems are expected to change in the future with the challenges posedby new technology. Direct booking by consumers through computersusing on-line services and the use of ticketless travel which by-passesthe need for the purchase and issuing of actual tickets are expected to

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Summary

On-lineoperations?

Willingnessto change

reduce the demand for services from travel intermediaries. The travelsales distribution system will need to adapt to the new technologies aswell as to changing consumer tastes and preferences in travel in orderto maintain its major role in the travel industry.


1. What are the different types of travel sales distribution systems andhow do they operate?

2. Who are the major suppliers of travel services?

3. What are the primary functions of the tour wholesaler?

4. What are the differences between the tour wholesaler and the touroperator?

5. What services does the travel agent provide to the customer?

6. How do each of the intermediaries derive income and revenue?

7. In what ways will technological changes affect the travel salesdistribution industry in the future?

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CHAPTER 6

Special Services and Products

Learning objectives

• To identify the changes in the leisure and business travel markets that

have facilitated the development of special services and products.

• To identify some of the major special services and products in the leisure

and business travel markets.

• To understand the MICE market and the various specialized roles that

meeting planners, convention centers, events managers, and convention

and visitors bureaus play.


adventure tourism

convention center

convention and visitors bureau (CVB)

cultural tourism

ecotourism

educational tourism

event manager

health tourism

meeting planners

meetings, incentive, convention and exposition (MICE) market

new age tourism

rural tourism

6.1 IntroductionAs the tourism industry has matured and tourists have become moreknowledgeable and sophisticated, special types of tourism services andproducts have been developed to meet their travel needs. These specialservices and products have grown out of changes and pressuresaffecting tourism supply components (such as destinations andattractions) and the traveling public. Both the leisure and businesstravel markets are affected by these changes and pressures. As a result,special services and products serve certain niche markets.

Special areas of leisure travel reflect the public’s diverse reasons andmotivations for traveling. Chapter 7 discusses the many differentreasons why people travel and the psychological aspects of their choicesof destinations and activities. As greater numbers of people travel, andas tourists look for different travel experiences, those markets that wereonce considered too small to merit much attention by suppliers are nowgrowing into substantial and profitable niches such as ecotourism,adventure tourism, health tourism, educational tourism and “new age”tourism dealing with people’s interest in spiritualism and metaphysics.

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6Special Services and Products

Changes inmarkets anddestinations

Business travel has also developed its own special markets. Meetingsand conventions events now have professional planners to deal with thecomplex activities and needs that are unique to these events. In addition,destinations now compete vigorously to host these types of events.

This chapter examines some of the main special services and productsthat have developed in both the leisure and business travel markets.

6.2 Special Segments of Leisure Travel

6.2.1 Reasons for the Growth of Special LeisureTravel Services and Products

In the area of leisure travel a significant and growing number of people,especially those who travel frequently, now approach tourism with differentexpectations. Rather than simply going on sightseeing tours and relaxing atpool side, these tourists search for more meaningful or intense experiences.Part of the reason for these newer expectations of travel lies in thedevelopment of the tourism industry itself. As tourism has grown andmatured, it has become increasingly sophisticated and creative in the rangeof products and services it offers including destinations. Tourism suppliersare constantly innovating ways to differentiate themselves from othersuppliers and stand out in the market. This innovation is part of the naturalprocess of product development, where the accumulation of knowledge andexperience enables suppliers to modify and improve their products.

In addition, this need to innovate comes from the competitive pressuresof the market. Today’s tourists are likely to be knowledgeable about themany different products in the market and concerned with getting thebest value for their leisure dollar. Many tourists are seasoned travelersand are looking for new travel experiences. Thus, suppliers are underconstant pressure to appeal to buyers who are becoming increasinglydiscriminating in their tastes and more conscious of value. The followingspecial segments of the leisure tourism market reflect these factors.

6.2.2 EcotourismOne form of tourism which has gained much attention in recent yearsis ecotourism. Although there are several definitions of this term,there is general agreement that in ecotourism the physical environmentis the focus of the touristic activity. For the purposes of this chapterecotourism will be defined as any tourism which:

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Chapter 6: Special Services and Products

Special markets

Productdevelopment

Savvy tourists

• Provides a first-hand active experience of a place.

• Provides an educational experience which develops visitors’understanding and appreciation of the place visited and promotesboth appropriate behaviors and a conservation ethic.

• Is environmentally responsible and uses various strategies tominimize negative impacts.

• Maximizes local economic returns (Bottril & Pearce, 1993; Scace, 1995).

One of the difficulties in analyzing ecotourism is the problem ofdetermining its size. Although it is believed that ecotourism is a substantialand growing activity, its contribution to the tourism industry can only beestimated because few countries or regions monitor the number of visitorschoosing ecotourism options. Examples of countries whose tourismgrowth appears to be driven by ecotourism are Belize (with tourismgrowth of nearly 140 percent in the period 1981-1990), Kenya (115percent), and Costa Rica (31 percent). Certain trends in tourism, such asthe increasing experience and sophistication of travelers and the increasingdesire for self development through travel, are believed to generate moreinterest in ecotourism experiences (Poon, 1993; Urry, 1990; Cater, 1994).

Ecotourism activities typically focus on providing access to remote,rare and/or spectacular natural settings. Tours which concentrate onwildlife viewing are another major form of ecotourism. The followingexamples demonstrate the various characteristics of ecotourism:

• In Costa Rica, a country which has been heavily promoted as anecotourism destination, the operations of the La Selva BiologicalStation are a successful example of ecotourism. The station is run bya consortium of research institutions which is called the Organizationfor Tropical Studies (OTS). The primary activity of the station isscientific research, but the OTS offers access to tourists and thestation is visited by approximately 13,000 tourists each year. Visitorsare provided with accommodation in basic cabins and are allowedaccess to trails into La Selva, which is comprised of 2,000 acres ofvirgin forest, swamps, and abandoned plantations. The incomegenerated by visitors supports the operation of the research programs.

• An Australian company provides tours in many parts of Australiaand in Indonesia that take visitors into more remote naturalenvironments and provide interpretation of these places and thewildlife. The tours often involve visits to research sites and contact

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Special Segments of Leisure Travel

Growthestimations

Example 1:Costa Rica

Example 2:Australia

with local residents. A substantial focus of the tours is the educationof tourists to encourage their appreciation of the visited places. Allguides are trained in both conservation principles and in minimalimpact behavior and travel techniques. The tours are run under a setof guidelines which include asking visitors not to collect artifacts,fossils or plants, removal of rubbish, restoration of campsites, andguidance for visitors on how to behave in cross cultural encounters.The tour company also offers employment to local people as guidesand purchases local goods wherever possible.

• Cruises to Antarctica led by scientists with substantial experiencewith the Antarctic environment. These scientists give talks topassengers on the ecology, history, and geology of the antarcticregion. Tourist behavior while onshore is strictly controlled, andvisitors are not allowed to eat, smoke, or litter while off the boat. Thecost of the cruise includes fees to government agencies, such as theNew Zealand Department of Conservation, which are used tosupport environmental protection programs (Rovinski, 1991).

As these examples demonstrate, ecotourism can be viewed assustainable tourism for natural settings. In this way, ecotourismpossesses the potential as a guide for the development of moresustainable conventional tourism discussed in Chapter 12.

6.2.3 Cultural TourismCultural tourism refers to a segment of the industry that places specialemphasis on cultural attractions. These attractions are varied, and includeperformances, museums, displays, and the like. In developed areas,cultural attractions include art museums, plays, and orchestral and othermusical performances. Tourists may travel to specific sites to see afamous museum such as the Prado in Madrid or the Louvre in Paris or tohear the Vienna symphony orchestra. In less developed areas, they mightinclude traditional religious practices, handicrafts, or culturalperformances. An example of the latter type of cultural tourism is the U.S.Amish community in Lancaster County, Pennsylvania. The Amish live atraditional lifestyle without modern conveniences such as electricity andtelephones. Tourism provides the Amish with an important source ofincome, through the sale of quilts, small handicrafts, and baked goods.

Cultural tourism and ecotourism are usually closely related, andelements of each are often found in tours and destinations that appealto this market. An example is Africatourism, a tourism program based

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Example 3:Antarctica

Activities indeveloped/less

developed areas

Combinationculture/ecology

on the cultural and environmental wealth of Africa. Among its featuresand benefits, Africatoursim: “recognizes the natural qualities of Africaand its people and upholds them as a source of pride and confidence,all the way from the grassroots level… implies responsibility andstewardship toward the environment and embraces everythingenvironmental, from fauna and flora through cultures, traditions, artforms, architecture, engineering, agriculture, and industry… [and] canbe found and experienced only in Africa (Open Africa, 1997). This lastfeature–that Africatourism is unique to Africa–is key to culturaltourism and ecotourism, as it emphasizes the importance of thedestination’s place to the authenticity of the tourist experience.

One of the issues facing less-developed destinations that offer culturalattractions is the potential impact of tourism upon the local culture andsociety. By its nature, cultural tourism can bring together people of vastlydifferent orientations towards modern values, a cash-based economy, andtraditional religious practices. The meeting between such different peoplesin the context of a tourist experience can have significant impacts,especially upon the local, traditional society. For example, a tourist maysee a local handicraft primarily as a souvenir to be purchased anddisplayed at home, and thus the purchase of the handicraft as simply atransaction, much like the thousands of other transactions he participatesin on a daily basis. The traditional craftsman, on the other hand, mayperceive the exchange of money for the handicraft as a symbol of his orher relationship with the buyer and the buyer’s society. The craftsman inthis case may want certain customs to be followed in the exchange, or mayexpect the buyer to exhibit behavior that indicates that the exchange is ameaningful event. In this and many other ways, there are opportunities incultural tourism for greater understanding and mutual enrichment betweencultures, as well as for misunderstandings and disappointment.

6.2.4 Rural TourismThe primary tourism-generating markets are highly developed andurbanized areas. Many of the residents of these areas wish to escapefrom their modern urban and suburban environments, and visit simpler,less developed areas. For such tourists, rural tourism offers an idealalternative. Like ecotourism, rural tourism is difficult to preciselydefine because it can take a multitude of forms (Lane, 1994).

An example of rural tourism is farm tourism or agri-tourism as foundin many countries in Europe. In Austria, for example, there were about21,000 farms providing about 109,000 rooms to farm tourists in 1994.

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Example: Africa

Tourist impacton societies

Urban escape

Farm tourism

Farm tourism helps Austrian farmers diversify their income sourcesbeyond traditional means such as cattle and timber, with the tourists’payment of room rent and their purchase of farm-grown produce.Another example is the youth hostel found in rural areas, which hasbeen a long-standing way for young persons to travel economicallyaround Europe. In many parts of the United States, particularly in thenortheast region, there are numerous small inns, often run as a familybusiness, that provide guests with a small-town experience.

One of the key aspects of rural tourism, and of several of the otherspecial segments of leisure travel discussed below, is the experience ofa way of life and environment that offer a sharp contrast to life in themodern city. For these segments of tourism, the environmentalqualities of the destination are particularly important. Rural, adventure,and cultural tourism are often cited as the segments of tourism thathold the most promise of incorporating the principles of sustainability.

6.2.5 Adventure TourismMany tourists have the desire to participate in activities that providethem with a challenge, thrill, or intense experience. Some of thesetourists want to test their physical skills in new or unusual ways, withactivities like mountain climbing, hiking, or kayaking. Others want toface nature without the modern conveniences that make their lives safeand comfortable. Whatever their motivation, these tourists will seekdestinations and products that can provide such intense experiences. Ingeneral, adventure tourism relies on natural, environmental features,such as mountains, rivers, forests, and the like. Unlike traditional tours,however, where such natural features are appreciated for their visualbeauty, adventure tourism brings the tourist into close contact with theenvironment and makes it something to be challenged or wrestled with.In this way, adventure tourism, like rural tourism, takes the tourist backin time by providing dangerous or challenging situations that themodern tourists’ forefathers may have faced. Historically, one of themost famous examples of adventure tourism has been the huntingsafari in Africa, which combined the thrill of pursuing wild animals,the challenge of living in an untouched environment, and the beauty ofthe African landscape. Another well-known form of adventure tourismis mountain climbing, where climbers risk their lives to pit their skillsagainst nature. A growth area of adventure tourism is the extreme

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Rural hostelsand inns

Challenges

Extremesport

sports tour. Extreme sports include established activities that, likemountain climbing, have a high degree of danger such as rockclimbing, skydiving, and new variations such as snowboarding.

6.2.6 Health TourismHealth tourism refers to travel to facilities and destinations forobtaining health-care services or health-related benefits. Healthtourism thus encompasses many different types of activities whichhave in common an emphasis on the healthfulness of the tourist. Thethree main forms of health tourism include:

• Medical care. Traveling to a facility or physician to obtain specialtreatment or a quality of treatment unavailable in the traveler’s homearea. Examples of this would include hospitals or physicians that areworld-renown for their treatment of certain diseases, or that offerexperimental or unique treatments, such as the Mayo Clinic in theUnited States.

• Fitness and wellness. Traveling to a destination or facility, such as aspa or weight-loss clinic, for the purpose of engaging in preventativehealth measures, such as dieting, weight-loss, relaxation, andexercise. Many hotels and resorts already include spa and exercisefacilities,which indicates how widely fitness and wellness practiceshave been adopted in people’s lifestyles.

• Rehabilitation and recuperation. Traveling to a destination or facilitythat offers special care, or is located in an area considered to beparticularly beneficial to one’s health, to recover from illness.

Health tourism is considered to be a segment with much potential.During the next decades, a generation of people who have becomeaccustomed to modern medical care will be entering their retirementyears. These people are expected to demand a level of health andcomfort as they grow older that earlier generations could not expect. Alarge segment of this generation will also possess the economic meansto pursue better health, including travel related to health tourism.Health tourism will also benefit from the world’s growing knowledgeof, and concern with, good health. The past decades have witnessedsignificant increases in public awareness in areas such as diet,environmental dangers (air and water quality, pesticides), and lifestyle(the consequences of cigarette smoking, alcohol consumption, stress,

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Future growthpotential

and the benefits of exercise). This increasing awareness, along withwell-publicized advances in medicine, will continue to raise publicexpectations for their own health and well-being.

6.2.7 New Age TourismA growing number of tour operators are offering programs that focus onmetaphysics and spirituality designed for travelers in search of life’sdeeper meanings and wishing to escape from the excessive materialism ofthe world. New Age tourism includes elements of cultural tourism, healthtourism and ecotourism. People who consider themselves part of the NewAge movement share a belief in the importance of learning from ancientcultures, encompassing spirituality, metaphysics, yoga, meditation,natural healing, herbology and communion. The sites visited in New Agetourism are in their very nature sacred sites dating from the pre-Christianity era, such as Stonehenge, the Easter Islands, and the greatpyramids in Egypt. These tours often take unconventional approaches tohistory and archeology. For example, the pyramids are seen as a powerfulenergy vortex that emit a grid of energy lines encircling the world.

Another branch of New Age tourism centers on physical health, offeringyoga, guided meditation, exercise, massage and organic vegetarian andother diets. Destinations such as Sedona, Arizona (U.S.), Bali(Indonesia) or Dominica in the Caribbean are chosen for their naturalattributes and spiritual energy in healing. The premise is that a naturalapproach to physical health leads to spiritual health and fulfillment. Asthe concept of New Age tourism is relatively recent, there are nostatistics currently available on the size of this market (Cogswell, 1996).

6.2.8 Educational TourismAlthough all tourism can be thought of as educational in the sense that thevisitor learns about a destination’s culture, society, and other aspects, theterm educational tourism generally refers to travel in which the learningoccurs within a structured or formal program. A familiar and popularform of educational tourism is the “study abroad” program, in whichstudents attend schools or programs (usually for a semester or academicyear) in another location, often in a foreign country. Through such aprogram, a student has the opportunity to take advantage of thedestination’s resources which might not be available anywhere else. Oneof the most popular reasons for attending a foreign school is to theopportunity to be immersed in the language and culture of the destination.

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Unconventionaltourism

Spiritual healing

"Study abroad"

Certain tours can also be considered as educational tourism. Thesetours are centered around significant historical, cultural, or scientificsites and are often led by a teacher with expertise in the sites. Incontrast to sightseeing-only tours, educational tours often includebooks, lectures, and other supplemental materials to create a moreformal learning experience.

6.3 Special Segments of Business TravelBusiness travel has also changed under the pressure of increased anddivergent expectations of business travelers. One of the most importantfactors influencing business travel patterns has been the increasingcost-consciousness of corporations and other organizations. Becauseof pressure to reduce expenses, travel costs–including transportation,lodging, meals and entertainment–are increasingly perceived asunnecessary. Advances in communications technologies have alsocalled business travel into question. The speed of e-mail and facsimiletransmissions, and the capabilities of teleconferencing, haveeliminated some of the reasons for earlier business travel. Increasingly,businesses are scrutinizing decisions to hold meetings by goingthrough a needs assessment process. This process is designed to ensurethat there is a shared understanding of the proposed meeting’s issuesand objectives among all participants, and that there are clearly definedmeasures of the meeting’s success or effectiveness.

Within business travel, however, there are special segments that arebased on face-to-face interaction and often incorporate elements ofleisure travel that are growing increasingly important. Collectively,these segments are often referred to as the meetings, incentive,conventions and expositions (MICE) market. This market accountedfor 983,600 meetings, 77.4 million attendees, and U.S. $37.4 billion ofbusiness in 1995 (Braley, 1996, pp. 65, 72-73).

6.3.1 MeetingsMeetings can be defined as events designed to bring people togetherfor the purpose of exchanging information. Meetings can be held on-premise at one of the companies or organizations that is convening themeeting, or off-premise at other sites, requiring the rental of meetingfacilities. It is the off-premise meeting market that is of primaryconcern to the tourism industry.

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Special Segments of Business Travel

Changes due tocost andtechnology

Corporate andassociationmeetings

Meetings held by corporations and other businesses are classified ascorporate meetings, while those held by associations are referred to asassociation meetings. Association meetings include activities of a varietyof different types of groups, including social, military, educational,religious, and fraternal organizations, often collectively referred to as“SMERF.” Corporate meetings account for about 25 percent of themeetings market, while organization meetings account for 75 percent.

The term “meetings” includes various types of events that differ in theirsize, subject matter, and agenda. While the criteria used to distinguishamong the different types of meetings are not clear-cut, the termsthemselves are useful in distinguishing among the many different kinds ofevents that businesses and organizations hold. A clinic is usually a small,“hands-on” educational meeting that emphasizes participant involvementin the learning process. A forum is a larger gathering at which issues ofinterest or concern to the audience are discussed, often led by a panel andmoderator, and with opportunities for comments and questions from theaudience. A seminar is similar to a forum, but often smaller and morefocused in subject matter. A symposium is much like a forum, but generallyrefers to meetings where the subject matter of the meetings is academic ortechnical in nature. A workshop is similar to a clinic, generally led by aleader or facilitator, and devoted to skills building or training.

Meetings can also be categorized by their function. Major functionalcategories of corporate meetings are incentive trips, sales meetings,management meetings, training seminars, professional and technicalmeetings, new product introductions, and stockholder meetings.

6.3.2 Incentive TravelIncentive travel refers to the segment of business travel that uses theallure of a trip as an incentive or reward for achievement. A typicalexample of incentive travel would be a company-paid vacation to aresort for top-performing salespersons. Sometimes this type ofvacation will include motivational seminars, morale-buildingactivities, and other activities that build upon a gathering of employees.Incentive trips also can include business-related group activities, suchas the introduction of new products or promotional campaigns, ortraining programs for employees. The incentive travel market has beenshowing strong growth in recent years: in 1995, 92,000 incentive travelprograms were planned in the U.S. vs. 60,200 in 1993. The averagenumber of attendees in 1995 was 95, with an average trip length ofnearly 4 days (Braley, 1996, p. 72).

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Different typesof meetings

Functionalcategories

Trip as reward

Short-term trips at which participants devote themselves to a particularissue or problem, and which are held at sites that provide a sense ofisolation and relaxation to encourage in-depth thinking and groupinteraction, are often referred to as retreats. Retreats can be held for avariety of problem-solving, motivational, or morale-building reasons.However the incentive trip is organized, it should result in specificresults that benefit the company. These results include greateremployee productivity, increased skills, improved morale, and highermotivation to achieve company objectives.

As the incentive travel market has grown, organizations specificallydedicated to organizing incentive trips for companies have come intoexistence. These organizations, often referred to as motivationalhouses, function as specialized meeting planners, arranging travel,accommodations, transportation, and other aspects of the trip.Incentive travel planners are under increasing pressure to provide theirclients with more than just travel plans. Rather, companies are viewingincentive travel more as a component of overall employee and businessdevelopment. This trend towards performance marketing is part ofchanges in the incentive travel market, including:

• The decrease of pure leisure travel in favor of trips that includemeetings and other business-related activities.

• A greater emphasis on group, as opposed to individual, travel, tofacilitate business-related activities (such as meetings and seminars).

• Greater use of non-sales criteria in awarding incentive travel,including factors such as loyalty, spirit, and customer satisfaction.

As a result of these developments, and of the changing businessexpectation of incentive travel, planners are getting more involved withthe goals of their client organizations.

6.3.3 ExpositionsExpositions are generally large events at which vendors can displayand market their products or services to a contingent of potentialclients and buyers. The vendors or exhibitors pay a fee to set up theirdisplays, usually based on the size of the area their displays require.Large expositions can cover hundreds of thousands of square feet ofexhibition space. The goals of the exhibitors are to attract attendees,inform them of their product or service, and establish a contact thatwill lead to a sale.

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Retreats

Travel plannersand performancemarketing

Display andmarket

6.3.4 ConventionsThe term convention refers to an event that combines both meeting andexposition. The conventions market can be divided into those that aresponsored by professional and trade associations, and those that aresponsored by corporations. Associations account for about 70 percentof the market, and corporations about 30 percent.

Conventions have the reputation for generating high expenditures on aper visitor basis, as well as creating substantial economic impacts forthe host economy. The many different segments of the tourism industrythat benefit from convention expenditures include hotels, restaurants,car rental, ground transportation, entertainment, and retail.

There are several reasons for the high level of involvement of thegovernment or the public sector with the convention business. First,high development costs and limited potential for realizing operatingprofits generally require that the government either own or subsidizethe center. With modern centers approaching 186,000 square meters (2million square feet) of exhibition space, development of a centeralmost always requires some form of public financing. Furthermore,the actual convention operations generally lose money or, at best, breakeven. This is due to the high cost of running a center, and to the factthat competition among centers tends to keep rent rates low.

From the government’s perspective, the financial risks posed by aconvention center are outweighed by their larger economic impact onthe host community and economy. It is the ability of a center to generatevisitor activity and revenues for such convention supporting businessesas hotels, restaurants, entertainment, and the surrounding area thatprovides the main reason for its development. The visitor expenditures,in turn, generate employment, tax revenues, and generally boost thearea’s economy, all of which serve to offset the center’s operating lossand create an overall net benefit to the area. To the government, theoperating loss it sustains is a worthwhile cost in light of the jobs, taxes,and healthier economy it gains. Because of their size and the amount ofvisitor activity they generate, conventions are often perceived as servingan underlying public purpose.

Secondly, large convention events bring prestige to a city. Largeconventions or expositions are often covered in national andinternational news. For the duration of the convention, the host city mayreceive daily exposure and coverage from the media. From thestandpoint of the host city’s visitor industry, this kind of media attention

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Combinationmeeting/exposition

High expenditures

Publicinvolvement

Economic impact

Prestige andmedia attention

can amount to valuable advertising. Cities often use conventions andother large events to create a positive image for themselves. In thisrespect, conventions are often very desirable to government leaders.

6.3.5 Major Components of the MICE MarketThe MICE market has become a highly specialized and importantsegment of the tourism industry. As a result, there are several well-established components of the MICE industry, each of which serves adifferent function. These include: meeting planners, conventioncenters, convention and visitor bureaus, and event managers.

Meeting Planners

Planning a successful meeting requires a great deal of logisticalcoordination and oversight of many different areas. As a result, overallresponsibility for a meeting is often given to professional meetingplanners, many of whom specialize in different types of meetings. Someplanners are independent businesses that perform their services for clientorganizations. Large organizations that hold meetings on a regular basismay employ their own planners on staff. The responsibilities of a plannerwill vary depending on the type of meeting being planned, facilitiesbeing used, sponsoring or host organization, and other variables.

Responsibilities of a Meeting Planner

Planning a large meeting is a complex and demanding task. A meetingplanner is often responsible for both large issues such as the selectionof a site and the arranging of transportation as well as smaller onessuch as specifying each day’s menu. The primary areas ofresponsibility for a meeting planner include the following:

• Selecting, or providing options for, a meeting site.

• Devising a marketing plan for the meeting, if necessary.

• Planning transportation to and from the site (including negotiatingwith airlines for discounted group air fares and arranging groundtransportation).

• Arranging for and reserving hotel rooms for the attendees.

• Working with the meeting facility personnel to plan the layout of themeeting/exhibition room(s).

• Organizing the exhibition, and working with exhibitors.

• Ensuring that audio-visual equipment needs are met.

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Professionalcoordinators

• Planning for the registration process, including any necessaryrequirements for accreditation of participants.

• Arranging for various food and beverage needs.

• Planning off-site tours and activities for nonparticipants and forattendees during nonmeeting times.

As this list indicates, communication is vital to the planning process.Even a moderately sized meeting will require virtually hundreds ofdecisions, many of which require consultation among the sponsoringorganization(s), the planner, and the meeting facility.

Site selection is a crucial part of the planning process. Planners mustconsider a number of criteria when choosing a site for an event. Themost important criteria, in descending order of importance, are:

• Availability of hotels or other facilities for meetings.

• Affordability of the destination.

• Ease of transporting attendees to and from the location.

• Transportation costs.

• Distance traveled by the attendees.

• Climate of the location.

• Availability of recreational facilities such as golf, swimming, andtennis (Braley, 1996, p. 73).

Convention and Visitors Bureaus

A convention and visitors bureau (CVB) is a nonprofit organizationthat promotes the destination area it represents, usually a city, to travelbuyers. A CVB’s mission is based on the premise that travel to the areawill benefit all supply sectors, such as accommodations, entertainment,transportation, and food and beverage. As discussed in Chapter 10,tourist expenditures can have a positive “ripple effect” throughout thehost economy. This is especially true of convention visitors.

CVBs reach tour wholesalers, meeting planners, and organizationsthrough several channels, including trade shows, direct sales, andbranch offices in major cities. Because the goal of a CVB is to have thetravel buyer make a commitment to the destination area as a whole, itwill generally not take a direct role in promoting individual businesses.Rather, it will facilitate a coordinated effort by these businesses to gainthe buyer’s travel business.

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Site selection

Non-profitorganization

CVBs' goals

The main responsibilities of a CVB are:

• Developing a marketing strategy and destination image for the area.

• Promoting the area to potential travel buyers and planners.

• Facilitating the entire process of selling the area and hosting the event.

• Promoting the area’s public attractions and amenities to the visitors.

In the 1990s, Central and Eastern European countries have begun to opentheir own CVBs in an attempt to improve their economies and utilize thepotential of their rich historical and cultural resources. The InternationalAssociation of Conventions and Visitors Bureaus (IACVB), through aninitiative called Partnership for Peace, is using the expertise of establishedCVBs to assist these countries in the areas listed above. In another case,the Philippine Conventions and Visitors Corporation conducted acampaign to attract more small- to medium-sized conventions(conventions with about 500-800 delegates). Convention City Manila, asthis campaign was called, specifically targeted this size of convention inrecognition of the resource and facility limitations of the host city. TheCorporation worked with airlines, hotels, and tour operators to buildattractive packages for prospective conventions.

Convention Centers

Convention centers are large facilities that accommodate many of theevents discussed in this chapter. Newly constructed and expanded centersare extremely large, with some new and expanded centers providingnearly two million square feet of exhibition space. For example,McCormick Center in Chicago, which currently has 148,800 squaremeters (1.6 million square feet) of exhibit space, is in the process ofexpanding to over 186,000 square meters (2 million square feet) by 1997.Convention centers earn revenue from a variety of sources, including therent of the facility, food and beverage service, and concession stands.

One of the key aspects of a convention center is its location. Centers needto be within reasonable distance of a major airport, since most delegateswill usually arrive by air. Centers should also be close to, or incorporate,adequate hotel accommodations. There should also be a variety of food,retail, and entertainment establishments in the vicinity of the center andthe accommodations. These considerations are extremely important to anorganization that is considering a convention site, because they arecritical to the delegates’ attendance and enjoyment of the event.

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Developmentof new CVBs

Profit-earningcenters

Location

A newer development in the operation of convention centers is their usefor smaller meetings, including those that do not require exhibit space.New centers are increasingly being designed to accommodate smallmeetings, so that space can be configured to provide a small meetingatmosphere and service. These smaller meetings enable centers to rentspace during periods between major events, thereby increasing rentrevenues. This additional rent is becoming increasingly important toconvention centers. As discussed earlier in this chapter, centers oftenoperate at a loss, with the expectation that the economic activity theygenerate will result in a net gain to the host community. However, asgovernments have come under increasing budgetary pressure, centers arebeing forced to sustain themselves without large governmental subsidies.

Conference centers are smaller than convention centers, and are animportant part of the business travel market. These centers vary in typefrom executive centers that are geared toward top management, withsophisticated audio-visual capabilities and quality amenities, to resortcenters, where the availability of recreational facilities is most important.

Event Managers

Once an event has been booked for the convention center, the centeroperator assigns it to an event manager. From this point forward, theevent manager becomes the link between the center and the client,whether it be a planner or the sponsoring organization itself.

One of the key responsibilities of an event manager is to ensure that theevent contract is followed. The contract between a convention center anda client for a specific event contains provisions for all aspects of the event,including the client’s requirements for the event, the agreed upon rental,and the mutual responsibilities and obligations of both parties. Thecontract will also specify the consequences of cancellation of the event,nonperformance by either party, and other contingencies. As planning andpreparation for an event move forward, adherence to the terms of thecontract must be enforced to prevent disputes and last-minute problems.

SUMMARY

The special travel segments discussed in this chapter represent some of thefaster growing areas of tourism. They are the result of greater productdifferentiation in the industry, which in turn is being driven by changes inthe traveling public. Given the rapid growth and change of the tourismindustry, it should be expected that new services and products will continue


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Small meetingspace

Conferencecenters

Link betweencenter and client

Event contract

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Summary

to appear. The proliferation of special services and products will provide thetourist of the coming century with an array of travel choices. Perhaps thesechoices will enable tourists in the future to design their “perfect” vacations.

The special leisure travel segments discussed in this chapter share acommon goal of bringing tourists closer to the natural environment.The success of these travel segments points to the tourism industry’srole in leading the world’s efforts to protect and preserve itsenvironmental and cultural resources.

The business travel market is coming under increasing pressure fromconcerns over travel costs and the availability of new teleconferencingtechnologies. Despite these pressures, the special market segmentscovered in this chapter have shown strong growth in recent years.Recognizing the greater role of the MICE market, cities are developingand expanding their meeting and convention facilities at a rapid pace.As discussed, large meeting events create business and publicity thatare extremely valuable for the host destination.

As the MICE market grows, planners, convention centers, and otherkey components of the industry are becoming increasingly specializedand sophisticated. CVBs will play a vital role in the future, asdestinations compete vigorously to fill their meetings and conventionsfacilities. With the growing availability of facilities and destinations,planners will have to ensure that they understand their clients’ needs inorder to best match them with what the market has to offer.


1. What are several special segments of the leisure travel market? Whatare their main characteristics?

2. What are the changes in the leisure travel market that havefacilitated the development of these special segments?

3. Can you identify the special business travel segments? Howimportant are they to the overall business travel market?

4. What are some of the reasons for the development of these specialbusiness travel segments?

3 Sec

tion

Tourism Marketing and Promotion

CHAPTER 7

Tourism Market Segments and Travel Psychology

CHAPTER 8

Tourism Marketing

CHAPTER 9

Tourism Research and Forecasting

CHAPTER 7

Tourism Market Segments and Travel Psychology

Learning objectives

• To describe different ways to segment tourism markets.

• To provide information on travelers by purpose and style of travel.

• To provide information on travelers according to basic demographic

factors such as age, sex, and education.

• To provide information on travelers according to life circumstances

including family composition, income, and disability.

• To review the key factors and main approaches to tourist motivation as a

conceptual approach to segmentation.

• To describe the links between tourist motivation and other topics in tourism

study.


allocentric

anomic

business travel

ego-enhancement

family life cycle

market segmentation

multimotive

optimal arousal

pleasure travel

pull factors

push factors

psychocentric

religious travel

special interest travel

travel career ladder

Values Attitudes LIfestyle Segmentation (VALS)

visiting friends and relatives (VFR) travel

7.1 IntroductionTourism places are settings for the behaviors and experiences of manydifferent types of visitors. As the gates of any large North American themepark open, a variety of visitors begin their day’s entertainment: some areteenagers in small groups, others are young couples, while families andsenior citizens also stroll through the gates. As intercontinental flights pullinto the major European airports, a further variety of visitors begin theirday’s travels: some attired in business clothes are met by colleagues, othersin sports uniforms are greeted by tournament organizers, several arereunited with friends and relatives, while still others are escorted by tourleaders to their waiting ground transport. As the afternoon wears on andthe lobby of a large Asian hotel fills with incoming guests, furtherdifferentiation among tourists can be witnessed: there are young Asianadults enjoying tea in the lounge, conventioneers wearing name badges ontheir way to function rooms, well-dressed European middle-aged couples,and a few Australian families with children already dressed for theswimming pool and impatient to get there. Clearly on a global scale,tourists fit into many possible categories, and it is the task of this chapterto describe these differences.

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7Tourism Market Segments

and Travel Psychology

Different typesof tourists

In Chapter 2, some consideration was given to measuring the flows ofinternational visitors rather than domestic visitors. Whether the intendeddestination is international or domestic is one of the many ways in whichtourists can be categorized. This chapter will cover several other descriptiveor segmentation approaches, all of which are valuable in characterizingtourists. Two preliminary points need to be made in relation to thesedescriptions and tourist categories. First, any individual tourist has a rangeof characteristics which may be useful in describing his or her behavior andtravel experience. For example, a traveler who is a father, a businessman, amountain climber, 35 years old, and affluent may not be adequatelydescribed by generalizations about businessmen. Characterizing a touristby using only one factor is a limited approach and is unlikely to explainindividual behavior adequately for marketing or in tourism planning. Thesecond point is that the most appropriate segmentation approach ordescription depends on the purpose of the user. For example, if one isconcerned with the development of tourism facilities in World HeritageAreas for children, then a description of visitors based on lifestyle and agewill be quite useful. By way of contrast, for a tourism regional destinationmarketer knowledge about the preferred activities of potential visitors,rather than just their ages or gender, might be appropriate. The purpose ofthis chapter is to describe many tourist types and their psychological needs,and a full array of tourist descriptions will be presented.

7.2 Describing Tourists by Purpose of Travel

The World Tourism Organization (WTO), the major intergovernmentalbody concerned with tourism, uses a formal definition of the termtourist that embraces several travel purposes:

TOURIST: Any person who travels to a country other than that in whichs/he has his/her usual residence but outside his/her usual environment fora period of at least one night but not more than one year and whose mainpurpose of visit is other than the exercise of an activity remunerated fromwithin the country visited. This term includes people traveling for leisure,recreation and holidays; visiting friends and relatives; business andprofessional; health treatment, religion/ pilgrimages and other purposes(World Tourism Organization, 1996c, p. 24).

Note that this definition excludes day trip visitors (sometimes calledexcursionists) who may cross an international border, the crew of transportservices (flight and cruise staff), nomads, military personnel, workers who

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Chapter 7: Tourism Market Segments and Travel Psychology

Characterizingtourists

Non-tourists

cross international borders for employment reasons, long stay touristworkers who are away for more than one year, international students ortrainees, backpackers, long stay budget travelers, and all domestic visitors.

Among international visitors there is considerable variation in purposeor type of visitor. For example, if all international inbound tourism isconsidered, Switzerland and France receive almost the same totalnumber of border crossings (about 130 million). For Switzerland,however, only 13 million of these are overnight visitors while forFrance the figure is 60 million.

WTO collates figures for arrivals by purpose of visit into threecategories: leisure, recreation, and holidays; business and professional;and other, which includes visiting friends and relatives, healthtreatment, religion, and pilgrimages and further unspecified groupings.Table 7.1 below provides some contrasts between select tourismdestinations by purpose of travel as defined by the three categories.

The figures presented in Table 7.1 indicate the variation in travelpurpose among holiday-recreation dominated destinations,destinations where the holiday market is of modest importance, andlow holiday-recreation destinations.

7.2.1 Leisure vs. Business TravelersLeisure comprises the core of what is commonly accepted as tourism.Among host communities, leisure travel is associated with people takingphotos, buying souvenirs, having limited contact with the residents, andstaying for short periods of time. The leisure travel market is so large formost destinations that broad generalizations about the market are difficultto make; thus, most of the efforts of marketers and researchers tounderstand this group involve subdividing the overall market intocategories of people who share similar sociodemographic or psychologicalcharacteristics. This process is formally known as market segmentation.

Business travel can be defined as including attending meetings andconferences, training and sales missions, and general promotional andprofessional contact work. For the U.S. market, about 25 percent of thetotal travel market is business-related. Business-related travel is usuallyorganized by travel agents and involves a restricted schedule of activitiesand places visited. Pleasure travel, by way of contrast, is seen as eitherindependently organized or organized through a travel agent and is likelyto have a greater regional spread with more diverse destinations. Ingeneral, pleasure travel tends to be dispersed across destinations whilebusiness travel is concentrated in key economic centers.

139

Describing Tourists by Purpose of Travel

Categoriesof visits

Necessity tosubdivide market

140


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to

Se

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ted

De

stin

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by

Pu

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141


Conference and convention travel have been recognized internationallyas core components of business travel. Many international destinationsnow compete for a share of the world convention and businessmeetings market. Many U.S. cities have set aside specialized areasadjacent to their convention centers as tourist zones so that the businesstraveler can enjoy a safe and distinctive urban recreational setting. Theappeal of business travelers to the destination marketers lies in theirhigh spending in hotels and concentration of activities such asshopping, casino gambling, and evening entertainment.

One of the important developments in business travel is the rise of whatmight be called hybrid travel, which can be defined as combiningtraditionally different travel purposes in one trip. For example, hybridtravel exists when business travelers bring their spouses to aconvention or when a family holiday is closely linked to or built aroundthe business travel requirements of a parent. Another example is thespecial category of incentive travel which is business-related withrespect to trip sponsorship and organization, but pleasure-oriented interms of focus. The traveler receives the trip as a reward foroutstanding performance (usually in sales) and aside from one or twomotivation sessions, the trip is geared to fun and new experiences.

7.2.2 Visiting Friends and Relatives (VFR)Tourism statistics indicate that visiting friends and relatives (VFR) travelis a large segment of international travel, and is linked to immigrationbetween countries. For example, Barbados is a popular vacation destinationfor a large segment of the Afro-Caribbean community in London becauseof strong family ties between the two areas, and frequent VFR tripsbetween residents of the U.S. and Canada are not uncommon. Travelerswhose journeys are focused on their desire to be with friends and relativesare important because their visits are likely to be repeated, and because theeconomic impact of these travelers is substantial due to their longer lengthsof stay in hotels than holiday and business travelers.

The visiting friends and relatives trip purpose can be differentiated intosubcategories. For example, those who visit friends have beenobserved to have shorter holidays whereas those who visit relativeshave more long distance trips and longer length-of-stay patterns. VFRsubcategories can differ significantly in their holiday planning, travelstyles, and media usage. VFR travel can be encouraged in a number ofways, including using local residents as a source of promotion,

Conventions

Hybrid andincentive travel

Repeated andlonger visits

EncouragingVFR travel

providing incentives and information to local residents to invite friendsand relatives, undertaking promotions in places where significantnumbers of friends and relatives reside, staging homecomings orreunions for former residents or friends and families, and providingincentives for former residents or their families to return home. VFRtourism is important as a forerunner to more conventional pleasuretravel between regions, and thus in promoting tourism more generally.

7.2.3 Special Interest TravelAnother broad classification of travel purpose can be described asspecial interest, a term which embraces such diverse activities asgambling, adventure travel, sports-related travel, and cultural pursuits.Special interest travel can also be seen as a part of alternative orecotourism discussed in Chapter 6.

Recreational Travel

In contrast with other leisure travel, special interest travel tends toinclude a single or dominant focus to the tourist’s holiday taking andan enjoyment of specific on-site activities. The special interest traveleris likely to be an enthusiastic hobbyist, a club member, or a devotee ofa particular product or experience. Yachting holidays are an examplethat illustrates the specific activities that characterize special interesttourism. The different yachting styles include bareboat cruising,skippered cruises, luxury yachting, and flotilla yachting. Thesevariations provide greater access for more people of varying levels ofskill and socio-economic status.

Special interest travel also includes specialty accommodation styleswhich organize travelers’ experiences, such as health farms, coastalresorts, bed and breakfast inns, and backpacker hostels. One studynoted that specialty accommodation guests appear to be bettereducated, have higher incomes, and occupy managerial, professional orexecutive positions. They spend more time planning their trips thanconventional accommodation users, and pursue different activitieswhile on holiday. They appear to favor nonbeach outdoor recreationactivities including bird-watching, hiking, swimming in lakes or rivers,walking, and horseback riding (Morrison, Hsieh, & O’Leary, 1995).

As noted earlier, special interest tourism is often associated with onedominant activity. In a study of visitors to the Rotterdam Museum park, acomplex which includes a museum for modern architecture, a museum of

142


Hobbyists

SpecialtyAccommodation

Guests

natural history, a local art museum, a gallery for temporary art exhibitions,and a fine arts museum, over 50 percent of the respondents said that thefine arts museum was the primary reason for their visit to Rotterdam and20 percent were motivated primarily by one of the other museums in thecomplex. For urban tourism in this part of Europe, museum visiting is avalued and primary special interest activity with respondents givingexplanations of their motives with phrases such as a museum visitprovides “food for thought,” offers opportunity “to learn something,” and“enriches their life” (Jansen-Verbeke & Van Rekom, 1996).

Religious Travel

Travel for religious purposes ranges across a spectrum of intensity. Atthe less intensive end of the spectrum certain religious sites may bevisited as a part of the attractions of a region. European cathedrals, forexample, may be appreciated for their physical splendor and theirarchitectural beauty. At a more intense level the supposed healingpowers of particular holy places such as Lourdes, France may be oneof several points of interest of a travelers’ holiday in a country. At themost intensive level, pilgrimages to sites which define the religion ofa particular group may be the sole purpose of the travel, and indeed forsites such as Mecca in Saudi Arabia or the Vatican as the center ofworld Catholicism, tourism is a major management concern.

The Islamic pilgrimage (the Hajj) to Mecca, for example, is an activityof enormous significance in the contemporary world economy. It wasnoted in Table 7.1 that the “other” purpose of visiting for somecountries was a large percentage of their total visitation. For a countrysuch as Saudi Arabia, more than 55 percent of all visitors fall into thiscategory and most of these are tourists motivated by strong religiousconcerns. Devout Muslims from nations such as Bangladesh, Chad,Mali, and Somalia may be using their full economic resources for thisone significant act of international travel. There are also affluentMuslims staying in first class hotels who make regular pilgrimages tofulfill their spiritual needs. A further feature of the pilgrimage to Meccais the concentration of the activity as the estimated two million visitors(approximately 50 percent of the total are domestic pilgrims) convergeon a single site within a specific one-month period. A visit to Mecca isa contemporary example of the continued importance of religious travelas a major organizer of tourism and of the lives of the faithful.

143


Dominantactivities

Levelsof intensity

Pilgrimagesto Mecca

7.2.4 Group vs. Independent TravelersThere are a number of terms used to describe the travel arrangementsused by tourists. At the broadest level a distinction can be made betweenthose who travel independently and make all their own arrangements andpurchase decisions and those who travel in groups. Independenttravelers, sometimes referred to as F.I.T.’s or free independent travelers,may use travel agents in organizing their holidays but do not participatein an organized group tour. Other terms for group travel include packagetours, group inclusive tours, inclusive holidays, and guided tours.

In the early years of tourism much of the leisure and holiday travel,particularly in Europe, was package tourism where the different partsof the total holiday were integrated into one product and sold at afavorable price. Much contemporary tourism from Asian countries toWestern countries is still sold as package tourism. For example, theJapanese tourist who pays one price for a combination of airfare,accommodations, ground transportation, and admission to attractionsis a true package tourist. In the 1990s, packages have become moreflexible and it is possible for customers to buy an accommodation-onlypackage and make their own arrangements for ground transport.Traditionally, package tourists traveled and stayed together and weremanaged by a tour leader, a role also described as a tour manager,guide, or courier. This individual usually stayed with the travel partyfor the entire duration of the holiday and assisted with such matters ascurrency exchange, dealing with residents, organizing the dailyitinerary, and generally facilitating the travelers’ holiday experiences.

The advantages of group travel include highly competitive prices and theelimination of many travel difficulties for the inexperienced traveler.Group travel is also popular with youth tourists as well as with seniorcitizens requiring special care. Guides can serve an important functionby facilitating entry into special places and providing an ongoing sourceof information to interpret the visitor environment.

7.3 Sociodemographic Factors and Life Circumstances

7.3.1 AgeOver 25 percent of the U.S. population is currently over 50 years old,and this figure is predicted to grow to 30 percent in another 50 years.This seniors market segment is generally wealthy and has more time to

144


Package tourism

Traditional andmore flexible

packages

Advantages togroup travel

travel than ever before. It has been suggested that this market segmenttravels more frequently, goes longer distances, stays away longer, andrelies more on travel agents than any other segment of the population.In fact, senior travelers tend to be highly social, and the resortcomplexes set up to provide for these travelers involve hectic schedulesof physical and recreational pursuits. Much of the importance of thesenior market is due to changing social role expectations and theavailabilities of health care facilities, especially in countries such as theUnited States. These changes are removing the physical andpsychological limitations that constrained the elderly in earlier eras.

A particularly notable segment of senior travelers is the so-calledsnowbirds. These travelers, complete with their mobile homes orrecreation vehicles, seek the winter sun in the southern part of theUnited States, in such destinations as Arizona, Texas, and Florida.Parallel examples of this sunseeking behavior of older mobile touriststake place in Europe and Australia.

Another significant age segment of travelers is the long-stay budgettraveler. These travelers are typically less than 30 years old and mayspend up to 12 months moving in a circuit of Southeast Asian andAustralian destinations where there are inexpensive “backpacker”hostels set up to support their budget and long-stay travel style. Thetotal travel expenditure of these travelers, although spread over a longerperiod of time, is greater than most other international tourists and isfocused on activities and tours, not accommodation purchases.

7.3.2 GenderAn assessment of gender issues in tourism reveals that substantialchanges have taken place in this market in the last twenty years.Motivations underlying women’s travel include escaping from a routineor domestic environment, changes in personal circumstances, such asa family death, a broken romance or a change in marital status, a desireto experience the thrill of danger, and a desire by women todemonstrate their own abilities, independence, and competence.Women also play an important role as facilitators of other’s leisure(particularly husbands, children, parents, and working colleagues)while considering their own leisure and travel needs as secondary.

Women are also playing an increasingly important role in the businesstravel market. Over one-third of U.S. business travel is undertaken bywomen and the percentage of women travelers in general appears to be

145

Sociodemographic Factors and Life Circumstances

The senior market

"Snowbirds"

Young budgettravelers

Women's travelmotivations

Businesswomen

growing. The travel concerns of businesswomen revolve around corefeatures such as security and practical items such as ironing facilitiesand full-length mirrors.

7.3.3 EducationAside from income, one of the most important factors in determining thepropensity to travel is the strong link between travel and education.Numerous studies have demonstrated that as an individual’s educationalattainment increases, so does his/her desire to travel. Even among youthtravelers, the largest percentage will be associated with college studentsin search of new experiences and opportunity for self-discovery. Soimportant is travel to this group that the majority feel that if travel werenot individually affordable, it ought to be government subsidized.

7.3.4 Other FactorsThe family life cycle, a term originating from sociology, is asignificant technique which assists the understanding of travel-relatedpurchasing. Nine phases of the family life cycle are commonlyrecognized and are presented in Table 7.2.

The family life cycle concept should not be confused with lifestyle.The latter term is a broad label for a group of market segmentationapproaches based on activities, habits, and type of products purchased,such as a sports or health-oriented lifestyle. Alternative lifestyle groupsrepresent important travel markets for some destinations due to theirpurchasing power and high levels of mobility. The usefulness of thisapproach, as with other broad differentiations of the tourism market,ultimately depends on how well the markets can be reached by theinterested tourism operators.

Disabled or handicapped tourists represent another group whose lifecircumstances affect their travel behavior. Disability comes in many formsand physical and intellectual impairment require very different servicesand facilities. Traditionally, legislative and management efforts on behalfof disabled travelers have focused on providing wheelchair access, such asin national parks and within hotels and restaurants. Increasingly there is arecognition that the enjoyment of the environment such as trails for thepartially sighted, sign language provision for the deaf, and other auxiliaryservices are valuable additions to the total tourism product. A study ofAustralian facilities noted that provision of services for the disabled mayalso serve the seniors market or be useful for young children at certainstages of development (Sproats & Murray, 1994).

146


Tendency oftravelers being

educated

Disabled travelers

147

Sociodemographic Factors and Life Circumstances

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on

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7.4 Approaches to Tourist MotivationThe preceding discussion has considered a range of factors which helpdescribe different kinds of tourists. In trying to understand visitors,researchers in tourism have developed travel motivation models. Theaim of these models is to answer the question, “Why do people travel?”or, more precisely, “What drives or motivates people to undertakecertain kinds of travel?” It is important to distinguish questions abouttravel motivation (why do people travel?) from questions relating todestination choice (why do people go to a certain place?) The firstquestion seeks to understand the individual psychology of the travelerwhereas the second question requires us to both describe the importantfeatures of a tourism destination and assess how well these featureswill satisfy the potential travelers’ needs.

One widely used distinction is that between push and pull factors intourist behavior. Push factors refer to forces arising from within theindividual and from the individual’s social context. These are truemotivational forces. Pull factors, by way of contrast, refer to features ofa destination which are thought to be likely to attract people to a specificlocation. It is misleading to refer to these pull factors as motivationalforces - instead they are properly described as destination attributeswhich may fulfil people’s motives for traveling. For example, a pushfactor may be a strong need for excitement and adventure. A destinationmay have white water rafting as an available activity but it is misleadingto describe this as a motivating force in tourist behavior. The problemwith assigning motivating power to activities or destination features(such as beautiful scenery or nightlife) is that any one activity canrepresent a mix of motives, and different tourists may value the samedestination attributes for different reasons. Thus one individual mayindeed find white water rafting suits a need for adventure and excitementwhile another may see it as suiting a need to become more skillful atphysical activities, while a third may be interested in the rafting only forits social value and as an item for conversation and self-esteem.

There are three sources of information on tourist motivation. At ageneral level there is the history of tourism itself and some valuablesociological commentaries on the changing needs of travelers indifferent eras. At a more specific level of analysis, there have beensystematic and focused attempts to produce theories of touristmotivation, an area of study which draws on a long history ofpsychology and motivation. A third source of information resides in

148


Motivation vs.choice

Different reasonsfor motivation

the practice of market research and survey studies discussed in Chapter9. Such work is often conducted by consultants for national or statelevel tourism organizations and is a source on travelers’ needs.

7.4.1 History of Tourism and MotivationChapter 1 described the history of tourism, particularly as it unfoldedin Europe. From a motivational point of view, several broad trends orthemes can be extracted from the history of pleasure travel. Rest,relaxation, escape from the heat, and curiosity are all reflected in thetravel undertaken by Roman society. The original pilgrimages of theearly Middle Ages added a religious and spiritual purpose to travel.The Grand Tours of Europe undertaken by young gentlemen of theseventeenth and eighteenth centuries were often rather indulgentadventures, but the practice gained favor as an educational event toacquire sophistication and worldliness for a certain social class of theperiod. Health and physical well-being were primary motives in the spaand mountain tourism of nineteenth century travel, and included anemphasis on relaxing and enjoying natural settings. In North Americaas well as Europe, the early twentieth century with large ocean-goingliners, the use of the automobile, and the development of railways,grand hotels and resorts, generated many different options for tourists.The social value of certain kinds of holidays emerged as a force forsocial differentiation, and one’s travel style, as well as one’spossessions, became social status attributes.

In the last half of the twentieth century, increasing diversity indestinations and travel products has permitted the flowering of all ofthese historically important motives. There are destinations whichspecialize in travel for escape, for health, for education, for spiritualrenewal, for self-indulgence, and for developing skills. One additionalmotivation in current travel is nostalgia or comparison with earliersocieties, such as when travelers join the Orient Express, cruise the Nile,follow Route 66 in the U.S. or trek along the Silk Road of Central Asia.

7.4.2 Theories of Travel MotivationThe broad social trends evident in any review of the history of travelare refined by tourism researchers who study travel motivation.

As presented in Table 7.3, a good theory of tourist motivation must organizeresearch efforts, must be easy to explain and appeal to its users, must besuitable for objective studies, must consider the total needs of travelers and

149

Approaches to Tourist Motivation

Historical motivesfor pleasure travel

Current travelmotives

not limit its focus to one need, must be able to manage dynamic changeswithin individuals and society, and must balance needs influenced by otherpeople with those determined by individuals themselves. The discussionbelow considers five approaches to tourist motivation in light of therequirements for a sound theory outlined in Table 7.3.

150


Attribute Description

The task of the theoryMust be able to integrate existing tourist needs,

reorganize the needs, and provide a new orientation forfuture research

The appeal of the theoryMust be appealing to specialist researchers, useful in

tourism industry settings, and credible to marketers andconsumers

Ease of communication Must be relatively easy to explain to potential users andbe universal (not country specific) in its application

Ability to measure travel motivationMust be amenable to empirical study; the ideas can betranslated into questions and responses for assessment

purposes

A multimotive vs. single-trait approachMust consider the view that travelers may seek to satisfyseveral needs at once; must be able to model the pattern

of traveler needs, not just consider one need

A dynamic vs. snapshot approachMust recognize that both individuals and societies

change over time; must be able to consider or model thechanges that are taking place continuously in tourism

The roles of extrinsic and intrinsic motivation

Must be able to consider that travelers are variouslymotivated by intrinsic, self-satisfying goals and at other

times are motivated by extrinsic, socially controlledrewards (e.g., others' opinions)

Table 7.3: The Core Requirements of a Sound Theory of Tourist Motivation

Allocentric vs. Psychocentric

The work of Stanley Plog represents an early attempt to classify peopleaccording to psychological types and to relate these behavior patternsto travel behavior (Plog, 1974). Plog devised a personality continuumranging from psychocentric (inward orientation or small focus ofconcern) to allocentric (outward orientation, varied interests). Forallocentric people travel is a way to express their confidence,inquisitiveness and curiosity. For psychocentric people, travel isfocused on close destinations, participation in familiar activities, andcautious travel behavior. In Plog’s account of tourist motivation, exoticdestinations fulfil the inquisitive curious motives of allocentrics andclose-to-home destinations fulfil the motives of the less confident andmore anxious psychocentrics. According to Plog, there are somepeople whose travel behavior fits the psychocentric pattern due to

Theoryrequirements

Plog's theory

financial constraints but as their life changes (such as a college studentwho begins to earn a substantial income), they will gradually move toallocentric destinations. Weaknesses of this approach to travelmotivation are its failure to consider multimotive behavior andunresolved questions of how to measure the underlying allocentric-psychocentric dimension. Nevertheless, in an era when psychologicalassessment of travelers was limited, Plog’s work highlighted the needfor tourism managers to understand more about traveler motivation.

Anomic vs. Ego Enhancement

A sociologically based approach to tourist motivation developed by G.Dann advances two concepts, anomic and ego enhancement, which areviewed as more sophisticated explanations of the broad travel need of“escape” (Dann, 1977). In the study based on tourists to Barbados,Dann described as predominantly anomic those tourists who werefrom large mainland U.S. and Canada cities, lived in competitive,stressful work environments, and were occupied with the demands ofnuclear families. On the other hand, the ego-enhancement touristswere frequently of lower socio-economic status, often female, andemphasized the status and social value of their Caribbean holidays.Dann conceived of these two tourist types as opposite ends of a singletravel motivation continuum. While this work was innovative anduseful in refining the concept of escape, like Plog’s work it is limitedin its single trait approach to the rich variety which historical andpsychological theories of motivation suggest are likely to be at work.

Optimal Arousal

A third tourist motivation theory argues that tourist and leisure behaviortakes place within a framework of optimal arousal and incongruity (Iso-Ahola, 1982). Iso-Ahola suggested that while individuals seek differentlevels of stimulation, they share the need to avoid either overstimulation(mental and physical exhaustion) or boredom (too little stimulation). Thestudy noted that leisure needs change during the lifespan and across places,thus introducing a potential dynamic element into his categorization ofvisitors. This theory emphasizes the participant’s feelings of self-determination and competence as the means of understanding touristmotivation, and on the experience in which travelers are engaged and ontheir actual participation in travel behavior rather than abstract assessmentsof life purposes. A weakness of this theory is the lack of specificity inmeasuring preferred stimulation levels or the relationships between self-determination, competence, and preferred stimulation.

151


Another single-trait theory

Stimulation levels

152


Values Attitudes Lifestyle Segmentation (VALS)

A further approach is known as the Values Attitudes LifestyleSegmentation (VALS) system. Broadly based on the pioneering workof the psychologist Abraham Maslow, the VALS system generallygroups consumers into nine broad segments with labels such as “HighAchievers” or “Emerging Activitists.” Different variations of VALS areused in North America, Australia, and Europe, principally asconsultant tools to relate purchases of all sorts of products to acombined grouping of peoples’ motives for consumption,sociodemographic and occupation profiles, and existing consumerownership. Its use in travel and tourism is growing but there are someconcerns over its limited explanatory power for travel or holiday takingmotivation, since profiles based on consumers of tangible goods maynot apply to travel. Nevertheless market segmentation approachesusing VALS style systems are in current commercial favor and mayoffer promise in the area of tourist motivation.

Travel Career Ladder

An explicit theory of tourist motivation which has been developed isthat of the travel career ladder (Pearce, 1988; Pearce, 1991). The travelcareer ladder approach argues that travel behavior reflects a hierarchy oftravel motives (see Figure 7.1). Based on Maslow’s hierarchy of needs,the steps or levels on the travel career model may be likened to a ladder.By expanding and extending the range of specific needs at each ladderlevel, a comprehensive and rich catalogue of the many differentpsychological needs and motives can be realized. The travel needsladder retains Maslow’s premise that lower levels on the ladder usuallyhave to be satisfied before the person moves to higher levels of theladder. Nevertheless, it is the total pattern of travelers’ motives whichdescribes them rather than a focus on any one single motive. Forexample, a visitor to Orlando, Florida who goes to EPCOT center atDisney World might be motivated to do so by the pleasant, safe settingto entertain a child and develop family experiences of togetherness, andto acquire knowledge about American culture. In this way, several levelsof the travel needs ladder are working together for a rich multimotivepicture of travel motivation. This flexibility and variability recognizesthat motivation may change over time and across situations.

In the travel career ladder model, destinations are seen as settingswhere vastly different holiday experiences are possible, and wheretravelers select activities and holiday experiences among those offeredto suit their personal psychological and motivational profile. In this

Consumer groups

A hierarchy oftravel motives

way, the travel career ladder model is a dynamic, multimotive accountof travel behavior that requires individual tailoring to specificsituations. The context or setting helps frame the way in which thetravel needs ladder questions are asked.

153


Figure 7.1: The Travel Career Ladder

People tend to ascend theladder with travel

experience

Overall pattern ofmotives is

the importantfeature

Higher levelmotives include

lower level motives.One motive at atime tends to be

dominant

Overall patternof motives isthe important

feature

Self-directedNeed for self-developmentNeed for growthNeed for curiosity/mentalstimulationNeed for mastery, controlcompetenceNeed for self-efficacyNeed to repeat intrinsically satisfyingbehaviors.

Internally orientedNeed for sex, eating, drinkingNeed for relaxation (manage arousalstimulation level)

Need for self-actualizationNeed for flow experiences

Self-directedNeed for security

Other directedNeed for statusNeed for respect recognitionNeed for achievement

Other directedNeed to reduce anxietyabout othersNeed to affiliate

Other directedNeed to reduce anxietyNeed to predict andexplain the world

Self-directedNeed to give love, affection

Externally orientedNeed for escape, excitement,curiosityNeed for arousal, externalexcitement, stimulation

Fulfillment needs

Self-Esteem/development needs

Relationship needs

Safety/security

Physiological needs

7.4.3 Market Research and MotivationA third contribution to tourism motivation studies lies in the work doneby market research organizations. These studies typically consist oflarge scale surveys that look at travel motivation, destination attributes,characteristics of the type of trip undertaken or preferred, andsociodemographic characteristics. For example, the Pleasure TravelMarket Survey, which consists of in-house interviews conducted in anumber of countries for U.S. and Canadian tourism authorities, has a

Surveys

list of travel philosophies which are parallel to travel motives. Thesame survey also asks respondents to characterize trip attributes. InTable 7.4 the travel philosophies and trip-driven attributes are bothlisted, with motives represented in bold. Survey studies like those areintegrated with other information to provide information of practicaluse for marketers and analysts.

154


Item Mean ImportanceRating*

Going to places I haven't visited before 3.26

Outstanding scenery 3.16

Meeting new and different people 3.11

Opportunities to increase one's knowledge 3.10

Interesting rural countryside 3.10

Destinations that provide value formy holiday money 3.01

Personal safety 3.01

Arts and cultural attractions 2.98

Public transportation such as airlines 2.97

Experiencing new and different lifestyles 2.97

Having fun, being entertained 2.92

Standards of hygiene and cleanliness 2.89

Visiting friends and relatives 2.86

Historical, archaeological or militarysites, buildings, and places 2.85

Just relaxing 2.85

Escaping from the ordinary 2.85

Being together as a family 2.84

Inexpensive travel to the country 2.79

The best deal I could get 2.78

Availability of pre-trip/incountry touristinformation 2.78

Being able to communicate in English 2.72

Inexpensive travel within the country 2.71

Nice weather 2.69

Trying new food 2.67

Shopping 2.66

Table 7.4/1: Trip-Driven Attributes for Australian Outbound Travelers

*4 = Very impoirtant; 1 = not all important.

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Summary

Item Mean ImportanceRating*

Ease of obtaining visa 2.61

Visits to appreciate natural2.59ecological sites (forests, wetlands, etc.)

Talking about the trip after I returned home 2.55

Meeting people with similar interests 2.55

Getting a change from a busy job 2.47

2.45

Ease of exchanging the currency 2.40

Getting away from the demands of home 2.36

Finding thrills and excitement 2.33

Exotic atmosphere 2.30

Unique or different immigrant culture 2.27

Ease of driving on my own 2.25

Advertised low cost excursions 2.24

Environmental quality of the air, water, and soil 2.24

Indulging in luxury 2.20

Visiting places where my family came from 2.19

Activities for the whole family 2.16

Going places my friends have not been 1.97

Being able to communicate in the foreignlanguage 1.96

Outdoor activity 1.92

Experiencing a simpler lifestyle 1.91

Doing nothing at all 1.83

Exercise and fitness opportunities 1.55

Roughing it 1.50

Unique or different native culturalgroups such as Eskimo and Indian

Table 7.4/2: Trip-Driven Attributes for Australian Outbound Travelers

SUMMARY

This chapter has suggested that there are numerous ways to describevisitors. Initially the focus of the discussion was concerned with keytravel purposes, particularly as reflected in the collection of internationaltourism statistics. The categories of pleasure travel, business travel,visiting friends and relatives, religious travel and special interest travel

*4 = Very impoirtant; 1 = not all important.

were all considered and some defining features and illustrative studies ofthese groups were presented. Next, some sociodemographic descriptionsof visitors were reviewed with attention being paid to senior and youthtravelers and to gender-based studies in travel. Further consideration wasgiven to independent travelers vs. package tourists. It was also noted thatpeople’s life circumstances strongly influence travel opportunities andthe concept of family life cycle was reviewed together with a briefdiscussion of lifestyle and disability. In order to provide a more advancedunderstanding of traveler differences, the topic of tourist motivation wasconsidered. An important distinction was drawn between questions suchas why people travel vs. why people go to specific destinations. Thescope of travel motivation information was reviewed by consideringthree sources of material. A brief consideration of market survey workand historical records of traveler motivation was provided while a moreextensive discussion of tourist motivation theories together with theirstrengths and weaknesses was undertaken.


1. What are some physical ways to categorize travelers? What are thelimitations of these categories?

2. In what ways are business travel and pleasure travel coming closertogether?

3. In what forms does religious travel still persist?

4. Distinguish between special interest travel and mainstream tourism.

5. What are some general family life cycle influences on travel?

6. What are some ways in which a theory of tourist motivation can beuseful?

7. What approaches could be combined to measure travel motivation?

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CHAPTER 8

Tourism Marketing

Learning objectives

• To understand the marketing process and general marketing concepts.

• To understand the different marketing philosophies.

• To understand the difference between marketing services and marketing

goods.

• To understand the purpose and major elements of the marketing plan.


buyer readiness states

competitive analysis

environmental analysis

market mix

market segmentation

market trends

marketing

marketing philosophies

marketing plan

marketing strategy

product life cycle

pull strategy

push strategy

service characteristics

8.1 IntroductionTo compete in today’s tourism marketplace, organizations in both thepublic and private sectors must know who their customers are and whatthey want. They must also be able to communicate the availability oftourism products and services to potential customers and convince themto become actual customers–to travel to a destination or attraction thathas been developed or to purchase the products and services such as atour package or airline ticket. These activities are what marketing is allabout. For countries that expect to gain from tourism activities, themarketing of the country as a unique travel destination may beundertaken by the national tourism administration (NTA). Forcommunities that hope to compete for their share of visitors, themarketing of a distinctive culture, attraction or outstanding amenitiesmight be the central theme. For firms in the private sector, success maybe dependent on effective marketing and selling activities of the airline,hotel chain, or tour company. This chapter provides a broad discussionof marketing concepts as a foundation for understanding the importanceof marketing to the tourism industry and the global tourism economy.

8.2 Marketing ConceptsMarketing comprises all the activities and processes used to bringbuyers and sellers together, including “creating, distributing,promoting, pricing and innovative ideas to facilitate satisfying exchangerelationships in a dynamic environment” (Pride & Ferrell, 1995, p. 4).

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8Tourism Marketing

Making potentialcustomers realcustomers

When marketing matches the right product or service with the rightcustomer at the right place and the right time, the results are a profitablebusiness and a satisfied customer.

How an organization approaches marketing may reflect any of severaldifferent basic marketing philosophies. As in any other field, theoriesand their application develop and change over time so that themarketing practices used by an organization in the travel industrytoday will differ from those used by a similar organization in the past.While practices may vary, they all reflect in varying degrees one of thefollowing marketing concepts or philosophies.

• Production Concept. This concept presumes that customers aremainly interested in price and availability. Management’s job is,therefore, to produce the service as efficiently as possible keepingcosts low so prices, which are the main product feature, can becompetitive. Too often, under this concept, management tends toadopt a “commodity mentality,” forgetting the customer’s shiftingdesires and needs. In the early stages of tourism development fromthe 1950s to the 1970s, for example, it was not uncommon to findhotels offering only a single type of accommodation or to find one-or two-item restaurants which greatly simplified business practicesfor owners and operators. Customers could take it or leave it; and ina noncompetitive environment, owners would do very well. Today’smarkets, however, are based on the concept of choice andproduction must consider optimum ways of providing for choicewhile containing costs that are imposed by variety.

• Product Concept. This concept is similar to the production concept,but focuses on the service or product itself. In this case, the goal isto produce someone’s, usually the inventor’s, dream of the productor service with the expectation that a market will follow. “Build itand they will come” best expresses this philosophy. The fast foodindustry is an applicable example of both production and productconcepts–limited menus, controlled production, fast service and lowprices–appealing to a wide market of consumers around the world.

• Selling Concept. This concept maintains that intense selling andpromotion efforts are needed to ensure sufficient sales. Should salesbegin to drop, the response is to increase sales efforts and to allocatemore money to promotion then to production. It is common, forexample, for firms to offer discounts or special promotions when salesbegin to decline without considering factors such as levels of customersatisfaction or revenue contribution. The fallacy is that if the cause of

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Chapter 8: Tourism Marketing

Approaches tomarketing

Price andavailability

Service or product

Promotion efforts

the decline rests with a product weakness that needs to be corrected,such as poorly maintained or worn-out facilities or poor service, orwith an external event such as a change in foreign exchange rates,reducing prices may result in higher volume but lower profitability.

• Marketing Concept. With growing global competition, the marketingconcept has come into vogue. Marketing focuses on responding toconsumer demands and competitive positioning. This requires the abilityto create and maintain customer satisfaction and to channel all activitiesof the organization toward the successful production and delivery ofgoods and services as defined by customers and to attain this at a profit.This philosophy suggests that a successful enterprise is one that can notonly determine the wants and needs of its target market but also deliverthose things more effectively and efficiently than its competitors.

• Societal Marketing Concept. This concept considers the importanceof maintaining the consumer’s and society’s well-being in themarketing equation and product decisions. Broader issues such asthe environment, scarcity of resources, social services, andpopulation growth are incorporated in the marketing practices. Forexample, hotels applying societal concerns to their marketing haveadded nonsmoking floors, rooms or seating areas in restaurants,used recyclable supplies in operations, and practiced conservationmethods throughout the property. These hotels may also havepolicies refusing to do business with suppliers that are known todiscriminate against minorities. Societally-based marketing is oftencontroversial as one person’s cause may be another’s bane.

8.3 Characteristics of Services MarketingWhile the same marketing concepts apply to any industry regardless ofthe product or service being offered, there are important differencesbetween products and services. The differences between a “product”and a “service” distinguish the tourism industry’s unique propertiesand characteristics.

8.3.1 The Tourism Industry’s Service Characteristics

The tourism industry is involved primarily in selling services (a stay ina hotel, a trip on an airplane, or a tour of a visitor attraction), ratherthan a product (car, groceries, clothing, or a book). Understanding theunique characteristics of services, therefore, is important inunderstanding how these services are marketed.

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Characteristics of Services Marketing

Consumerdemands andsatisfaction

Consumer'sand society'swell-being

Differencesbetween "product"and "service"

• In tourism the customer participates in the production of the service.Organized sightseeing offers a good example. Provision of guideservices and consumption of the sightseeing occurs simultaneously.The greater the interaction between the tour guide and the visitor,the more pleasurable the service.

• Services cannot be stored or kept in inventory. An airplane thatleaves the airport with empty seats will never be able to sell thosespecific seats on that specific flight, and that income is lost forever.

• Services must generally be provided where and when the customerwants (or needs) them at convenient times and locations. Thevacationing family with hungry children is likely to stop at the mostconvenient restaurant that offers acceptable food at a reasonablecost; they cannot wait several hours for a specific restaurant to open.

• Services tend to be labor intensive to produce. Because there is face-to-face interaction between the service provider and the customer, there isa greater need for employees. A hotel must have enough service staffready to work at each point of contact with the customers, such ascheck-in, concierge desk, restaurants, or lapses in service will result.

• Services are intangible. Services are not objects that can be easilymeasured to determine if standards of production have been met. Howthe quality of the service encounter is judged depends on thecustomer’s perceptions and expectations. The same service may beevaluated differently by two different customers if they entered theencounter with different expectations. For example, a business travelerwho must travel in the economy section of a full plane due to the flightbeing oversold may describe the trip as tedious and very poor quality.A vacation traveler sitting next to the business traveler on her first tripby air may describe the same trip as exciting and high quality.

8.3.2 The Tourism Industry’s Unique Marketing Challenges

In addition to meeting the challenges faced by all service industries,the tourism industry has certain unique characteristics that createadditional marketing challenges.

• The supply of tourism services cannot be changed rapidly inresponse to changes in demand. For example, much time and moneyis needed to develop a resort destination, to build a hotel, or to

162


Customerparticipation

Perishability

Labor

Convenience

Intangibility

Difficulty tochange

develop a transportation system. Once built, the capacity of thesefacilities is difficult to change. Due to the inability to inventorysupply, there is more pressure for builders, planners, and developersto forecast capacity correctly and for the operators of the facilitiesto keep them as fully used as possible.

• Tourism demand is highly elastic. This means that a relatively smallchange in price or tourist income will result in a proportionatelylarger change in demand. Tourism also tends to be seasonal in natureand affected by a variety of subjective factors such as taste andfashion. Further, tourism services are often viewed by the customeras interchangeable between different service providers.

• The tourism product is, itself, a combination of many differentservices. Each trip includes many different services–transportation,accommodation, restaurant meals, sightseeing, car rental,attractions–provided by different firms. A poor experience in any ofthese can affect customer satisfaction for the entire trip.

8.4 Market SegmentationAn essential step in marketing is determining the actual and potentialcustomers or the firm’s market. Market segmentation (discussed inChapter 7) is the process used to group people with similar wants andneeds to form target markets. Research (discussed in Chapter 9) alsoplays an important role in identifying the market segments. Specificproducts and services and different promotional strategies can then bedeveloped to meet the needs of different groups.

8.4.1 Characteristics of Effective Market Segments

Not all possible market segments are useful. For example, an airlinecould determine how many customers have blue eyes versus brown eyes,but since eye color does not affect the choice of airline, this would serveno purpose. To be effective as a marketing tool, a segment should be:

• Measurable in terms of size and other variables.

• Accessible through promotion with existing or potential distributionchannels.

163

Market Segmentation

Elasticity

Service division

Target markets

• Substantial or large enough or profitable enough to serve as a targetmarket.

• Defensible in terms of sufficiently unique characteristics to justify aseparate marketing effort or a program which can withstand themass marketing approach of competitors.

• Durable in terms of continuing over time.

• Competitive in terms of providing an advantage over thecompetition by serving this segment.

8.4.2 Bases for Market Segmentation The variables that form market segments can be grouped into fourmajor categories (see Table 8.1):

• Demographic segmentation divides the market into groups based onaggregate population characteristics such as age, gender, income,and occupation.

• Geographic segmentation divides the market into segments based ongeographic characteristics, identifying those areas with the greatestnumber of potential customers.

• Psychographic segmentation identifies personality characteristics,lifestyle, and motives. There are several different models that havebeen developed as described in Chapter 7. One is Stanley C. Plog’smodel of psychocentric and allocentric characteristics. Anotherwidely known model developed by SRI International is VALS,“Values, Attitudes, and Lifestyles” (Kotler, Bowen, & Makens,1996, pp. 190-193). This model classifies consumers based on self-images, aspirations, values and beliefs, and the products they use.

• Behavioral segmentation divides buyers based on their knowledge,attitude, use or response to a product.

The attributes or benefits sought by a market segment can be used toattract that segment and also to identify customer types. Once a firmknows what their customers want and need, they are better able to meetthose needs. At the same time, knowing the characteristics of currentcustomers will help to identify potential customers. Marketing effortscan be directed toward segments with the greatest likelihood ofbecoming customers.

164


Identification ofcustomer types

165

The Market Mix

8.5 The Market MixOnce a specific market segment or target market has been selected, amarketing strategy to meet the needs of that market can be developed.This strategy includes many factors that influence the marketing effortin the tourism industry:

• Timing. Considerations include holidays, the school year cycle(when families vacation), high season, low season, and upwardtrends in the business cycle among others.

• Brands. Names, trademarks, labels, logos, and other identificationmarks all assist the consumer in identifying and recallinginformation about a product.

• Packaging. Tourism services such as transportation, lodging, amenities,and recreation activities can be packaged and sold together orseparately. Family plans or single plans are other forms of packaging.

• Pricing. Pricing affects sales volume and the image of the product.A multitude of pricing options exist, ranging from discount prices topremium prices.

• Channels of distribution. To make the product accessible to theconsumer, distribution channels must be developed including directselling, retail travel agents, wholesale tour operators, or acombination of these methods.

• Product. The physical attributes of the product help to determine itsposition against the competition and provide guidelines on how tobest compete.

• Image. The consumer’s perception of the product depends to a greatextent on the important factors of reputation and quality.

Category Variables

Demographicage, gender, marital status, race, ethnic group, income,

education, occupation, family size, family life cycle,religion, social class, nationality

Geographic region, city or metropolitan area size, population density,climate, terrain, market density

Psychographic personality attributes, lifestyle, motives

Behavioral occasion, benefit expectations, usage rate, brand loyalty,attitude toward product

Table 8.1: Bases for Market Segmentation

• Advertising. Paid promotion is critical, and the questions of when,where, and how to promote must be carefully considered.

• Selling. Internal and external selling are essential components forsuccess, and various sales techniques must be incorporated in themarketing plan.

• Public relations. Even the most carefully drawn marketing plan willfail without good relations with the visitors, the community, suppliers,and employees (Goeldner, McIntosh, & Ritchie, 1995, pp. 427-429).

The market mix consists of how the different elements are combined.Generally, these are grouped into four basic categories: product, place,price, and promotion. Figure 8.1 illustrates that all factors that impactthe target market segment are an integral part of the market mix.

166


Figure 8.1: The Market Mix.

Product

Brand

Image

Packaging

Promotion

Public Relations

Advertising

Selling

Media Used

Price

Match, above, or below

current market

price

Place

(Channels of Distribution)

Direct Sales

Retail Travel Agents

Tour Operators

Hotel

Representatives

TARGETMARKETSEGMENT

8.5.1 ProductThe tourism product includes not only the physical product and servicebut also planning and development, branding, and packaging. Themarketing concept and societal marketing concept discussed earlier inthis chapter suggest that any new product development must meet theneeds of some segment of the market and also be developed with theoverall good of society in mind. In deciding on whether to offer a newproduct, there are several criteria that should be met.

• There should be sufficient demand for the product or service togenerate a profit for the organization.

• The new product or service should fit in with the overall image andmission of the organization.

• Sufficient resources should be available to offer the product orservice including enough trained personnel.

• The new product or service should contribute to the overall profit orgrowth of the organization or destination, even if the new offeringmay not bring in a profit by itself.

Clearly, development of new products and services is a complex task.Consumer needs and wants constantly change and competitorscontinually offer new or improved products. Over time, a product thathas been very successful is likely to become less so and eventually maybe phased out completely. The product life cycle illustrated in Figure8.2 provides a framework for describing the process of productdevelopment through various stages as follows:

• Product development begins with an idea for a new product orservice. There are no sales during this period although investmentcosts are incurred.

• Introduction of the new product or service also reflects highinvestment costs to promote and advertise the new product withrelatively low sales volume resulting in little or no profit.

• Growth is a period of rapid expansion with increasing profit levels.There may be few or no competitors at the beginning of this stage,but as profits increase, competitors may begin to enter the market.

• Maturity is marked by a slower rate of sales growth and a levelingoff of sales. Increasing expenditures to hold off competitors will beneeded with resulting declines in profits.

• Decline sees a rapid fall off of sales and profit. The number ofcompetitors will decrease as firms choose to withdraw from the market.

167

The Market Mix

New productdevelopment

8.5.2 Place (Distribution)The choice of distribution channels must be compatible with otherelements of the market mix. Essentially, decisions involve how todeliver the product or service to the consumer. The tourism industrygenerally uses a multilevel distribution system combining direct sales,wholesale operations, and retail travel agents. These travel distributionchannels are discussed in Chapter 5.

8.5.3 PriceSetting the price of a product of service is a complex process involvingconsiderations both within and outside the organization. At the sametime, setting the right price is critical as it is the only revenue-generatingelement in the marketing mix.

a) Internal factors for consideration include:

• Positioning or how consumers perceive the product relative tocompetition. Many organizations offer a variety of products targetedat different levels or positions which are reflected in the pricingstrategies of the firm.

• Survival for organizations struggling with economic recessions,overcapacity, and strong competition. If demand for hotel rooms ina specific location declines substantially, the response of a specifichotel may be to reduce prices and cut costs until demand recovers.Other properties may lower prices to match or may choose not tolower prices, losing the more budget-minded customers.

168


Figure 8.2: Product Life Cycle

Sales and profils ($)

ProductDevelopment

Introduction Growth Maturity Decline

Profits

Sales

Multileveldistribution

system

Internal factors

• Current profit maximization may be an objective of organizationsbased on demand and costs at different prices choosing the pricesthat are expected to yield the highest revenue, profit, cash flow orother financial objective. The long-term performance of theorganization is of much less concern. An organization that developsnew concepts for chain restaurants, for example, will demonstratethe success of the concept with a smaller chain first.

• Market-share leadership for some organizations is based on thebelief that the largest player in the market will result in long-termprofit. When entering a new market, a firm may offer lowintroductory prices to quickly gain a significant share of the market,raising prices as demand increases.

• Product-quality leadership involves firms wishing to lead in termsof quality of product by charging an appropriately higher price forthat quality. An internationally recognized hotel chain’s revenuesmay reflect the higher prices charged for its services and facilities,but it must also continually reinvest to maintain a well-trained staffand level of luxury to continue to lead in quality.

• Marketing mix strategy which involves the coordination of product,place, and promotion strategies with pricing strategies. For example,a regional air carrier may promote a product which is no-frills,short-haul, point-to-point air travel, while an international air carriermay offer a much more luxurious flight environment. Pricing foreach firm reflects the different products offered.

• Costs which are a basic consideration in determining price sinceprice is based on organization’s costs plus a specific profit margin.Each firm must charge more for their products than the cost toproduce them in order to stay in business. However, sufficientattention must be paid to controlling costs so a firm does not chargemore than its competitors.

b) External factors include:

• Demand which may vary based on price, season, or other variables.While changes in price by one competitor are often followed by similarchanges by other firms in the same market because consumers mayseek the lowest price, products aimed at the luxury end of the market donot respond in the same way. Changes in price, then, may have littleeffect on demand. Also, destinations that are primarily seasonal innature, such as winter ski resorts, experience widely fluctuating demandat different times of the year with corresponding changes in price.

169

The Market Mix

• Consumer perceptions of price and value which influence the buyer’sdecision. The buyer’s reasons for selecting one item over another andthe expectations of the items or service received compared to theprice paid affect the judgment of value. Each organization must knowhow customers perceive their products and services and whatcustomers are willing to pay for them. Each segment of the marketwill have different standards by which it judges value.

• Competition involving firms that operate in the same marketsegment. Price is one element consumers use to distinguish amongotherwise similar firms. Therefore, each organization must be awareof what its competitors charge, what benefits and features areoffered, and the quality of the product offered.

8.5.4 PromotionPromotion is essentially communication with the goal of changing thebehavior of the consumer, specifically to purchase a tourism productsuch as air travel, hotel accommodations, restaurant meals, tours, or acomplete destination package. Before undertaking any promotionaleffort, the objectives of the campaign must be set. Effective objectivesare quantifiable, measurable, specific, and realistically attainablewithin a specified time frame. Understanding where the potentialbuyers are in terms of readiness to buy is important in settingappropriate objectives and developing effective promotional materials.For example, in the selection of a travel destination for a vacation, aconsumer must go through several stages in making a decision. Thesestages, illustrated in Figure 8.3, reflect the buyer readiness states:

• Consumer awareness of the destination (or product) can range fromtotal unawareness of its existence to knowing only the destinationname to knowing a little about the destination. Promotion aimed atthis stage will focus on providing critical information to increase theconsumers’ level of knowledge. New York City’s promotion using“The Big Apple” theme in the early 1970s is a classic example of asuccessful destination promotion using a recognizable image.

• Consumer knowledge about the destination is the target ofpromotion. A national tourism administration (NTA) may featurespecific attractions or outstanding recreational facilities of differentparts of the country as promotions targeted to the vacationer.

• Consumer attitudes vary according to cultural, ideological, andother differences. For example, an advertisement for African safarisfeaturing a successful hunter posing with his trophy of a dead lion

170


Promotionalobjectives

may be a positive image for hunters but would be negative for thoseinterested in animal rights, environmental protection, andpreservation of animal species.

• Consumer preference is established in terms of liking one productover others in the marketplace. Each product must promote thosefeatures and benefits that will make a difference in the consumer’sbuying decision. A destination like Hawaii or Bali may feature itsclimate, activities, beautiful scenery, or unique culture. Destinationsand companies like tour agencies may choose to focus on quality,unique services, location, price–whatever it is that makes theirproducts of particular value to their target audience.

• Consumer conviction and purchase are the final steps and areusually closely linked. The NTA or other marketers want to create afirm intention to come to a destination or to purchase followed bythe actual purchase of the product. Special pricing is commonlyused to increase sales during off-season periods at manydestinations. For example, airlines offer lower fares for advancepurchases and for travel during non-peak hours and days.

171

The Market Mix

Investing inpromotion

Figure 8.3: Buyer Readiness States

Awareness

Knowledge

Liking

Preference

Conviction

Purchase

The Promotional Budget

The objectives to be met by the promotional campaign and the stepsnecessary to achieve them should be the primary factors in setting thepromotional budget. Frequently, however, organizations decide tospend a certain amount of money on promotion before determining theobjectives. It is also common to set aside a percentage of sales forpromotional efforts. Industry figures are generally available that

frequently serve as a guideline for this decision. However, this fails totake into account any unusual circumstances of a particularorganization that may want to introduce a new product or respond toother changes in their particular market. It also fails to recognize therelationship between promotion and sales. Additional investment inpromotion should result in higher sales; falling sales may be a signalthat more, not less, promotion is required.

Message Content and Form

Based on the marketing objectives, including the buyer readiness stateof the target market, the specific content (what to say) and form (howto say it) of messages can be developed and tested. Different messagescan be shown to sample members of the target audience and the resultsmeasured to determine which is the most effective.

The Promotion Mix

There are many different types of promotional tools available, and theirselection depends on the product and the target audience as well as theamount of funds available. Promotional tools can be categorized intofour groups:

• Advertising has many different forms and uses and can be used tobuild an image over a long period of time, to stimulate a quick salesincrease, and to reach a geographically dispersed audience at arelatively low cost.

• Personal selling is effective when building buyer preference,conviction, and purchase. The personal interaction between thebuyer and seller allows each to observe, communicate and adjust tothe other’s needs and characteristics.

• Sales promotions include special discounts, coupons, contests, orincentives to buy. These promotions add value to the product andencourage the consumer to respond quickly.

• Publicity and public relations offer several advantages. The newsstory format is often more believable than advertising and reachesmany readers.

Table 8.2 provides a summary of the characteristics of each type.

Within the tourism industry, all forms of promotion are used. Anadvertisement or sales promotion can be an effective way to influencethe choice of a rental car for a weekend trip. However, when selecting

172


Promotional tools

Choosingmessages

173

The Market Mix

a two-week vacation for a family of four, additional informationthrough personal selling is often preferred. Personal selling is alsorequired for larger, more expensive purchases and to sell customizedproducts. For example, conventions and meetings tend to be both largeand customized with the services of a professional convention servicesplanner to organize a successful event.

AdvertisingA paid form of nonpersonal communication about an

organization and/or its products that is transmitted to atarget audience through a mass medium.

Personal salesPersonal paid communication that attempts to informcustomers and persuade them to purchase products in

an exchange situation.

Sales promotionAn activity and/or material that acts as a direct

inducement to resellers, salespersons, or consumers; itoffers added value or incentive to buy or sell the product.

Publicity(Public relations)

Nonpersonal communication in news story form,regarding an organization and/or its products, that is

transmitted through a mass medium at no charge.

Table 8.2: Major Types of Promotional Tools

Trade shows deserve a special mention as they are important inpromoting both destinations and suppliers products. Thousands ofbuyers and sellers come together at these shows which are held invarious points of the world. The two largest shows are the ITB Berlinand the WTM (World Travel Market) in London. Other prominenttravel shows are FITUR (Feria International de Turismo) in Spain andJATA (Japan Association of Travel Agents) in Japan.

There are actually two different markets that must be addressed: thefinal consumer and the travel trade intermediaries. To reach these twodifferent markets, two different strategies are used. A tourism servicesupplier such as a resort destination, a hotel, or an airline that is usingthe push strategy provides an incentive for intermediaries to sell theirservices. For example, a major hotel may offer travel agents anadditional commission for bookings. Conversely, a pull strategyrequires increasing consumer demand for a product. The goal is todirectly increase consumer demand for the product. The same hotelmay place an advertisement in a target city asking customers to contacttheir travel planner or the hotel for reservations. These two strategiesare contrasted in Figure 8.4.

Uses of tools

Trade shows

Reachingintermediariesand consumers

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Media Selection

Once a decision has been made to advertise, selections must be madeabout the type of media to use to most effectively deliver the desiredmessage. The most common choices are newspapers, magazines,television, radio, direct mail, and outdoor billboards. In selectingwhich media is best, several factors must be considered:

• Reach measures the percentage of people in a target market that areexposed to the message during a specific period of time. Forexample, the advertiser might want to reach 75 percent of the marketwithin a year.

• Frequency is how many times the average person in the target marketsees the advertisement. An advertiser might, for example, want theaverage person to see the message three times during the campaign.

• Impact is the qualitative value of the message. This includes thesource credibility, visual quality, and noise level of the particularmedium. Newspapers, for example, have less visual quality thanmagazines, and certain media types and selections of media haveless credibility than others. Noise level refers to the stimulicompeting for the viewer’s attention while the message is shown.With radio, for example, the listener is often also carrying onconversations, driving, or completing some task while the radio isplaying so the noise level is high.

• Cost includes both the total cost and the cost per contact (cost ofreaching one member of the audience.) Television, for example, hasa low cost per contact but a high total cost.

• Market selectivity is the ability to target particular groups whether bygeographic region or another of the bases for market segmentation.Daily newspapers offer a great deal of geographic segmentation, butvery little demographic, psychographic, or behavioral segmentation.Magazines offer more options for different types of segmentation,but may not offer as specific a geographic segmentation.

• Timing flexibility is the lead time needed to place, remove, orchange a message. Newspapers offer the most timing flexibility.Magazines and television require much longer lead times to producethe advertisement.

The advantages and disadvantages of each are summarized in Table 8.3.

175

The Market Mix

Using differentmedia types

176


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8.6 Marketing PlansBefore any specific marketing activities are undertaken, it is crucial tocomplete a marketing plan. It is important that the marketing plans fortourism destinations be differentiated from tourism products and services.Whether the organization is a national tourism administration (NTA),national tourism office (NTO) or other governmental body, rather than anindividual firm or a cooperative public/private association, the completionof a marketing plan will be of benefit. With increasing competition in thetourism industry as more destinations are developed, destinations withmarketing plans will outperform those without, and the formulation of thisplan is generally the responsibility of the NTA. All marketing plans focusefforts on attaining the goals and objectives of the organization over theshort- and long-term and ensure that all key aspects of the marketing effortare included in formulating specific activities (see Table 8.4).

Marketing plans may be strategic, operational, or include bothcomponents. Strategic plans are concerned primarily with long-termissues (three to five years), overall mission, goals and objectives.Operational plans focus on specific steps to be taken to reach thestrategic targets within the short-term (usually one year). Themarketing plan must support the organization’s overall strategic plan.

8.6.1 NTA Marketing PlansIn most major destinations, NTAs have developed marketing plans whichmay be strategic or operational in nature. NTA plans in Australia, India,Senegal, Italy, and Switzerland, for example, are primarily strategic, whileothers like the United States, have operational plans which set out specificactions to achieve given strategies. Because of the focus on strategicissues, measures of effectiveness in achieving objectives have beendifficult to apply. NTAs, however, have become increasingly aware of theneed for accountability in the use of public funds for marketing andpromotion and are now tying their strategies to performance measuressuch as increasing tourist arrivals, overnight stays, revenues, and marketshare (World Tourism Organization, 1995a, p. 2-24).

The responsibility for marketing a country or a region, sometimesreferred to as “macro-marketing,” usually rests with the NTA of thatcountry and is generally aimed at attracting international tourists to thedestination. It should be understood that the NTA’s basic responsibilityis to market the country as a whole. Any deviation from this, such asthe marketing and promotion of a province, is usually undertaken as acooperative venture with the province.

177

Marketing Plans

Necessity ofmarketing plan

Strategic/Operational

Strategies

Macro-marketing

As discussed in Chapter 15, every destination needs to have a clearunderstanding of its objectives for tourism development and supplyand demand factors regarding its comparative strengths in terms ofavailable attractions, accessibility, and its competition beforedeveloping a marketing plan. The target markets are then determinedbased on the type and number of tourists the destination hopes toattract, the product development is prioritized, and the strategies orapproaches to resolve problems are developed.

178


Table 8.4: Rules for Drawing up a Marketing Plan

Source: World Tourism Organization, Budgets and Marketing Plansof National Tourism Organizations (1995), pp. 2-23, 2-24.

The following suggested rules were developed as an aid for National TourismAdministrations (NTA) that do not have marketing plans. They are designed tomaximize the use of existing resources and avoid unnecessary expense.

1. Employ market expertise –either in-house or external– when drawing upthe initial plans.

2. Develop a thorough understanding of existing offerings and of theirabsolute and relative advantages and shortcomings with respect tocompeting destinations.

3. Identify and study the competition in order to clearly identify any marketgaps and capitalize on the main strengths that the country has.

4. Prepare a strategic plan for supply spanning several years, to improvedeficiencies and strengthen advantages.

5. Thoroughly consider potential demand. Access to such information isrelatively straightforward in view of the existence of numerous studies ondemand in the main tourism source countries.

6. Set strategic goals in line with tourist arrival capacity, transport capacity andexisting promotional resources. Goals should be defined in terms of marketshare in each of the main source countries, because large fluctuations inexchange rates make it difficult to forecast foreign exchange earnings.

7. Once the three-year strategic plan has been completed, the correspondingone-year operational plan can be drawn up.

8. Given the scant resources of most NTAs, yearly operational plans shouldconcentrate on a few markets only; these need not be national but couldbe limited to certain regions or even cities.

9. Do not address the public in general until appropriate measures have beentaken with opinion leaders; journalists, travel agents, specific interest groups.

10. Include the private sector in the preparation and execution of marketingplans from the very outset.

Clear objectives

179

Marketing Plans

NTA marketing strategies will be both short-term and long-termdepending on goals or objectives which are laid out in the plan. To agreat degree, the success of these marketing strategies will depend on theavailable budget for promotional programs and other activities. Thesepromotional activities are often coordinated with private sector efforts onbehalf of air carriers, hotels, and other firms as well as provinces ormunicipalities interested in joint promotion with the NTA. In manycountries, the primary air carrier to a given destination may be a national,government-funded air carrier which will develop a coordinatedpromotional campaign with the NTA (Inskeep, 1994, pp. 45-48).

The marketing strategies of the tourism master plan for the Republic ofUganda illustrates the marketing and product strategies in a marketingplan. In this plan, Uganda’s target markets are prioritized. Primary marketsare the U.K., Germany, and the U.S. Secondary markets are France andItaly, followed by Australia and the rest of Europe. The plan identifies theimage problems of Uganda and analyzes the need to position Uganda as anew destination emphasizing its scenic beauty and interesting wildlife.Strategies are developed for three distinct time phases with provisions forpromotion mix and recommendations for an organizational structure tocarry out the strategies (Inskeep, 1994, p. 197).

8.6.2 Environmental AnalysisTourism is highly sensitive to changes in the business environment. Ananalysis of the major factors in the environment should be completedearly in the planning process. While the marketing plan cannot foreseeall possible events, a careful analysis will identify current conditions,outline expected changes, and indicate how the identified challengeswill be met. A careful assessment of the following majorenvironmental factors will help to identify new market segments aswell as to prepare for expected changes.

• Social factors such as crime, disease, and changing demographicsmay have significant impacts on a destination and the firms locatedthere. The relevant social factors and their importance will varydepending on the geographic location. The widely reported attackson tourists in Miami, Florida in 1993, and the reported outbreak ofplague in parts of India in 1994, had the potential for significantimpact on the tourism industry in these destinations.

• Political factors such as legislation regulating casino gambling,political stability within a country, and the international politicalarena are also of vital concern.

Program budgets

Example: Uganda

Analyzingmajor factors

• Economic factors including changing interest rates, internationalmonetary exchange rates, employment, and income all affect thetourism industry. The lodging industry is especially sensitive tobusiness-cycle changes.

8.6.3 Competitive AnalysisRegardless of whether the marketing plan is for an entire destination or asingle firm, a comprehensive analysis of the competition is needed todevelop an effective marketing plan. The analysis will include acomparison of physical attributes such as climate, number of hotel roomsavailable, activities, and number and type of restaurants. However, thecomplete analysis must go beyond this level to consider the intangibleelements of the tourism product. Differences in service levels,cleanliness, safety, and cultures affect the satisfaction of visitors. A soundmarketing plan identifies those factors that are of primary importance tovisitors in making their purchasing decisions and develop specific stepsto improve areas of weakness while capitalizing on existing strengths.

8.6.4 Market Trend AnalysisMarket trends are closely related to the factors revealed in theanalysis of major environmental factors and competition. There aremany sources of market trend information including publicly availabledata from chambers of commerce, universities, government, andvisitors bureaus as discussed in Chapter 9. Relevant factors include:

• Visitor trends such as origin markets, length of stay, expenditurepatterns, mode of transportation, and demographic profiles.

• Competitive trends in terms of identification and location of majorcompetitors, services and products offered by competitors, the competitivepricing structure, and assessment of the success of competitors.

• Industry trends such as changes being planned by the transportationservices to the location, new construction that will have an impactsuch as new hotels, shopping centers, visitor attractions, orconvention centers, or new technologies being developed.

8.6.5 Market Segmentation AnalysisIn earlier sections, the importance of market segmentation andselecting target markets was discussed. As competition at all levelsincreases, this factor becomes even more important. The marketingplan should identify those segments of the market that will be the focus

180


Comparingphysical and

intangibleelements

for marketing efforts through the life of the plan. Sound marketresearch including analyses of market trends, competition, andenvironmental factors must be completed to select the best targetmarkets. This will allow more effective and efficient marketing.

In many cases this analysis will identify areas that must be improvedbefore the objectives of the organization can be met. For example, adestination may decide that the market for conventions and meetingshas strong potential for their location. A decision might be made toinvest in developing additional convention facilities to attract thismarket. However, further analysis may reveal that there are too fewhotel rooms or insufficient transportation access. A long-terminvestment strategy to improve all needed infrastructure would beneeded in addition to investment in the convention center itself.

8.6.6 Strategic Goals and ObjectivesThe strategic goals and objectives of the marketing plan will guide thedevelopment of everything else in the marketing plan. These objectivesmust support the overall mission, goals, and objectives of the largerorganization. Areas often addressed in marketing plans for destinationsinclude:

• Increase in employment

• Improvement in the balance of payments

• Preservation of cultural heritages and natural environments

• Strengthening of competitive position relative to other destinations

• Increase in the number of visitors, length of stay, and earnings fromtourist activities

Objectives should be as specific as possible with quantitative targetsand specific time frames indicated, such as an increase in employmentby a given percentage per year over the next three years. This enablesthe results to be measured throughout the duration of the plan and forcorrective measures to be developed if necessary.

8.6.7 Action PlansOnce objectives are clear and the target markets are selected, actionplans can be developed. These must be as specific as possible andinclude each segment of the market mix as it relates to the particularobjective. The plan should also indicate who is responsible for eachaction, what funds will be required, and the source of funds.

181

Marketing Plans

Planningexample

Specifyobjectives

SUMMARY

Marketing includes all activities involved in bringing buyers andsellers together in an exchange relationship. Tourism products arealmost exclusively services, and the supply of tourism services is oftendifficult to adjust rapidly because tourism demand is elastic, and thetourism product is actually a combination of many different products.

Market segmentation is used to group people into categories based ondemographic, geographic, psychographic, and behavioralcharacteristics. The market mix combines the various factors thatinfluence the marketing effort into four main categories: product,place, price, and promotion. The product life cycle describes thevarious stages during a product’s development, while place representsdistribution or how the product or service is delivered to the customer.Setting the price of a product or service is a complex process involvinga variety of factors such as marketing objectives, the marketing mixstrategy, costs, demand, consumer perceptions of price and value, andcompetition. Promotion is communication with the goal of changingthe behavior of the consumer. The promotion mix involves theselection of promotional tools from four basic types: advertising,personal sales, sales promotion, and publicity or public relations.

Marketing plans are essential to ensure that all efforts are focused onattaining the goals and objectives of the organization over the short-and long-term. Developing an effective marketing plan begins with anenvironment analysis including consideration of social, political, andeconomic factors. An analysis of the competition and market trendsshould also be completed. The marketing plan should specify how themarket is to be segmented, the strategic goals and objectives, andprovide action plans to reach the desired goals.


1. What are the differences between the different marketing concepts?

2. Are some characteristics of market segments more important thanothers, or are they equally important? Why?

3. A resort destination is considering adding a second golf course toits facilities. What factors should be considered in deciding whetherto expand the resort in this manner?

182


4. You have just been hired as the general manager of a downtownbusiness hotel. The owner of the hotel wants you to raise the prices;you’re not sure this is a wise decision. Describe the factors that youwould include in your report to the owner about factors that must beconsidered in setting prices for the hotel.

5. Apply the four tools available in the promotion mix to a resortdestination by showing how each could be used.

6. What is the purpose of a marketing plan?

183

Summary

CHAPTER 9

Tourism Research and Forecasting

Learning objectives

• To understand the role and scope of tourism research.

• To understand the research process.

• To be familiar with the uses of primary and secondary data.

• To be aware of who conducts tourism research.

• To be familiar with the elements of a travel market research program.

• To understand the importance of forecasting tourism demand.

• To be familiar with the quantitative and qualitative approaches used to

forecast tourism demand.


accountability assessment

Delphi Model

Judgment-Aided Model (JAM)

multivariate regression analysis

nonsurvey techniques

primary data

propensities to travel

qualitative forecasting methods

quantitative forecasting methods

resistances to travel

secondary data

time-series models

types of surveys

9.1 IntroductionTourism research is an objective, systematic, and logical investigationof travel-related problems. In response to the globalization of tourismactivities and industry, tourism research has become increasinglyimportant to assist decision making and planning for the tourismproduct, which is comprised of all the goods and services that arenecessary to accommodate the visitor. In the fast changinginternational tourism environment, tourism planners and managersneed to respond sufficiently to external challenges like newtechnologies and increasing competition, as well as internal factors likefinancial and human resource constraints.

The interrelationships between research, marketing, and forecastingcan be seen in some examples of everyday uses of tourism research inthe industry including:

• Hotels and resorts studying the impacts of new technologies such as theWorld Wide Web and video conferencing on the business travel market.

• Airlines investigating attitudes and behaviors of leisure travelers inlight of shifting global travel patterns and increased security measures.

185

9Tourism Researchand Forecasting

Importanceof investigatingproblems

• Tour operators conducting a market profile study on eco-tourists inorder to provide tour packages that would attract this emerging market.

• National tourism organizations using market profile data to identifytarget markets and develop a tourism marketing strategy.

• Government planning offices assessing the probable impact of anew resort or attraction through the measurement of economicfeasibility and environmental and social impacts.

This chapter explores the research process and the applications anduses of research in the industry.

9.2 Tourism Research

9.2.1 The Functions of Tourism ResearchTourism research has many functions in the industry, especially inhelping identify and evaluate significant problems. Tourism researchcan help organizations in the public sector or businesses in the privatesector formulate policies and establish priorities that are appropriatefor market shifts and community concerns. In the private sector, it isoften used to help increase productivity through the use of a range ofquantitative and qualitative techniques that allow decision makers toselect and implement the most effective operational methods. Researchis also invaluable for marketing and promotional campaigns and formsthe basis for successful strategic marketing plans which use the resultsof studies of consumer attitude and behavior, comparative demand forthe product, and marketing effectiveness (see Chapter 8). Tourismresearch can also be used to develop new resources by identifying newmarkets, new products, and new uses for established products.Research can be used to show destinations the type of activities, touristfacilities, and services that travelers are looking for based on factorssuch as demographics, psychographics, and consumption patterns.Finally, through the study and forecast of market and developmentaltrends, tourism research can reduce the risk of unanticipated changesand unforeseen events at the destination through the use of probablescenario development and alternative strategies.

9.2.2 The Tourism Research ProcessThe research process involves a number of stages beginning with theidentification of the problem and ending with the conclusions andrecommendations of the study (see Figure 9.1). It is important to ensure

186

Chapter 9: Tourism Research and Forecasting

Identificationand evaluation

Development

Risk reduction

that the tourism research process is well designed and pertinent to thedefined problem. Although the benefits of a research study might beapparent, the need is often weighed against the expense of conducting thestudy, in terms of time, money, and opportunity cost. The research designwill depend on the particular problem at hand, and the basic research studyis focused as to its scope, relevant variables, and parameters. Theidentification of a problem may arise from observations of trends orbehavior in visitors. In other instances, there may be a need to distinguishfacts from observations or to test a hypothesis (Ryan, 1995; see Table 9.1).

187

Tourism Research

Source: World Tourism Organization, Collection andCompilation of Tourism Statistics (1995), p. 9.

Forms of Tourism Marketing Issues Economic Impact Issues

Inbound internationaltourism

What are the volume,origins, and other

characteristics?

What are these visitors'expenditures?

What are their neteconomic contributions?

Outbound internationaltourism

What are the volume,destinations, and other

characteristics?


Domestic tourism What are the volume andcharacteristics?


What are their neteconomic contributions?

Tourism supply

What are the number andcharacteristics oftourism-relatedestablishments?

What are the economiccontributions of these

establishments?

Table 9.1: Major Tourism Research Issues

The value of the research process is in providing users with useful andrelevant information that they can implement in their decision makingprocess. Thus, the research must be clearly understood anddisseminated to interested and concerned parties. Beyond answeringimmediate concerns, a well-designed study also has the potential forfuture benefits by establishing the groundwork for follow-up work.

The application of the research results is the desired goal of any project.Hence, adequate planning and support are necessary in order to ensurepracticable application. In this process, the interpretation of the statisticalresults and other findings into usable information provides one of the

Benefits vs. cost

Providinginformation forfuture benefits

188


most difficult and challenging steps in research. The conclusions whichare reached then are used to assist in decision making or to helpformulate policy. Finally, the dissemination of the results throughappropriate channels is an important step in assisting in bringing aboutdesired outcomes, and the implementation procedure might involveusing existing structures or establishing new mechanisms.


8. Process and analyze the data

9. Interpret results and draw conclusions

10. Formulate recommendations

11. Prepare and present findings

1. Recognize and define the problem

2. Specify data needs

3. Evaluate secondary data

6. Design datacollectioninstruments

5. Plan primarydata collection

4.2 Chooseprimarydata collection

4.1 Choosesecondarydata

7.1 Collectdesired data

7.2 Collectdesired data

Figure 9.1: The Research Process

Practicalapplication

189

Tourism Research

9.2.3 Sources of InformationData used in tourism research may either be primary, secondary or both.Primary data are original observations generated to solve the researchproblem at hand. If, for example, researchers conduct a survey of pleasurevisitors to determine their attitudes toward ecotourism, the informationgathered would be primary data. Secondary data, on the other hand, aredata that have been gathered by someone other than the researcher or forsome other purpose. These data may be available through public orprivate published sources (Goeldner, McIntosh, & Ritchie, 1995).

Secondary Data

In recent years, there has been an overwhelming flow of informationrelated to tourism, travel, recreation, and leisure. Low cost andconvenience are clearly the biggest advantages of obtaining secondarydata. Instead of printing data collection forms, hiring interviewers,editing, and tabulating the results, researchers may go to the library andtake information from published records compiled by somebody else.Another advantage of secondary data is that they can be collected morequickly than primary data. While an original research project might take60 to 90 days or more to complete, secondary data can be accessedelectronically in hours or collected within a few days. In addition, if thedata is part of a larger series, comparability might be an advantage.

There are, however, limitations in using secondary data. For instance, theinformation may not fit the problem that is being researched, may beoutdated, or in forms which do not answer the specific problem at hand.In evaluating secondary data, consideration is also given to theorganization which collected the data and the purposes for which theywere collected. Accuracy will depend on the application of objective andsystematic methods of data collection. The reputation, experience, anddegree of independence of the research organization are relevantconsiderations in assessing the reliability of the data, and reliable sourcesusually give a detailed description of their methods of data collection. Inthis regard, data based on mandatory reporting is often considered moredesirable than voluntary compliance. An organization such as a nationaltourism administration (NTA) which regularly collects and publishestravel data as its chief function can provide invaluable data.

In order to obtain current and reliable statistical data on tourism,standard definitions, classifications, and measurement methods andobjectives have been established to assist NTAs. In June 1991, the

Original sources

Published sources

Advantages

Disadvantages

World Tourism Organization (WTO) and the Government of Canadaorganized an International Conference on Travel and Tourism Statisticsin Ottawa, which brought together representatives of NTAs, thetourism industry, national statistical offices and international andregional organizations to define the statistical needs of the industry foranalysis, market research, industry performance and tourism forecasts.The recommendations of the conference included concepts, definitionsand classifications covering the basic tourism unit, tourism demand,tourism supply and tourism expenditure.

Primary Data

When it is not possible to get the needed information throughsecondary sources, research organizations obtain primary data ororiginal sources of information. There are various methods that areused to gather primary data, including the widely used survey method.Non-survey techniques include the observational method and theexperimental method. Given the complex nature of travel and tourismand the challenges presented by a fast changing economy andmarketplace, there is an increasing need to conduct primary researchfor the sake of developing marketing and planning strategies. Sometypes of surveys and their uses are (Goeldner etal., 1995):

• Factual surveys which pose questions to the respondent allowing anaccurate answer rather than an opinion. Factual surveys generallyprovide better results than opinion or interpretive surveys.

• Opinion surveys which ask participants to express an opinion ormake an appraisal. For instance, a respondent may be asked to ratethe services provided by the resort as excellent, good, average, fair,or poor, enabling management to assess guest satisfaction.

• Interpretative surveys which ask questions to gain insight into thesubject’s psychological behavior, for example, why they chose aparticular tour package. Results from interpretive surveys tend to belimited since they rely on self-reporting, and respondents may beunclear or unwilling to state why they made certain decisions.

Surveys can be conducted by personal interviews, telephoneinterviews, self-completed questionnaires, focus groups, or electronicmethods. A description of different methods follows:

• Personal interviews or face-to-face interviews use a pre-structuredquestionnaire allowing the interviewer to exert a certain degree ofcontrol over the interview environment. In addition, the interviewer

190


Standardization

Gatheringmethods

Different typesof surveys

can generally gather more information by adapting to the situationand establishing a rapport with the respondent.

• Telephone interviews also use a pre-structured questionnaire but areconsidered more cost efficient than personal interviews. However,compared to personal interviews, telephone surveys are limited inthat they are briefer and less flexible. Industry guidelinesrecommend that the interview time not exceed 25 minutes (Rogers,1991). However, depending on the market, even 25 minutes may beconsidered too long.

• Self-completed questionnaires are mailed to carefully selectedrespondents or distributed on-site. Mailed surveys allow the respondentto chose the time and place for completion, and questionnaires can belonger than telephone surveys. It is an impersonal approach but a cost-efficient method of collecting information.

• Focus group discussions are employed for researching complexattitudinal and motivational issues. Focus group discussions typicallyinvolve eight to ten representatives of some target market segmentwho are led through a discussion of perceptions, images, and beliefsby a trained moderator. Studies from focus group discussions haveprovided insights into travel, revealing that “many travel decisionshave very little to do with the excellence of the destinations, butrather with the travelers emotional need to travel and his or her imageor perception of the destination. The destination is often an excuse togo rather than the reason” (Davidson & Wiethaupt, 1989, p. 45).

• Electronic surveys have become more common through user-friendlycomputer software programs and widespread use of electronic mail (e-mail) and the Internet. Computer devices programmed with surveyquestionnaires and equipped with keyboards or touch screens arefound in airports, hotels, or shopping malls to record consumers’responses to surveys. Electronic surveying is less costly and timeconsuming because it is self-administered and tabulated automatically.

Some nonsurvey techniques are as follows:

• Observational methods involve primary data collection usingpersonal or mechanical recognition and recording of people,objects, and occurrences instead of relying on the respondents forinformation. This method of collection reduces the bias effect of theinterviewer, but the observation method is considered to be costlyand does not have the ability to examine the motives, attitudes, oropinions of the visitors (Boyd, Westfall, & Stasch, 1977).

191

Tourism Research

More surveys

Non-surveytechniques

• Experimental methods involve variables which are manipulated inan artificial condition. A test or model is used to simulate the realworld and variables are manipulated to allow researchers to measurethe variations and the cause and effect relationship between thevariables (Boyd etal., 1977). While the complex nature of thetourism product makes the experimental method difficult to use, testmarketing using simulation models to conduct pricing experimentshas been successful in tourism research (Goeldner, etal., 1995).

9.3 Organizations Conducting ResearchTourism research is conducted by both public and privateorganizations. Proprietary (private) research refers to research that isbeing done to solve problems within the company, and results are oftennot revealed to other businesses. Universal research, on the other hand,is made public through technical journals or literature. Typically,universal tourism research is conducted by local, national, andinternational tourism organizations and educational institutions.Airlines, hotels, consulting firms, and advertising agencies, on theother hand, all engage in private research.

9.3.1 Tourism OrganizationsInternational tourism statistics are available through a number of sources.International organizations like the World Tourism Organization (WTO)publishes The Compendium of Tourism Statistics (annual), Yearbook ofTourism Statistics (annual), and Travel and Tourism Barometer(quarterly). In addition, the Organization for Economic Cooperation andDevelopment (OECD) and Pacific Asia Travel Association (PATA)publish annual reports that include tourism statistics.

Other sources for worldwide tourism statistics include: Travel IndustryWorld Yearbook: The Big Picture (annual) by Somerset R. Waters; Traveland Tourism (annual) by the World Travel and Tourism Council (WTTC)sponsored by the American Express Travel Related Service Company,Inc.; The Tourist Review (periodical) published by the InternationalAssociation of Scientific Experts in Tourism (AIEST); and World Traveland Tourism Review: Indicators, Trends, and Forecasts by CABInternational. The Economic Intelligence Unit (EIU) publishes Travel andTourism Analyst, International Tourism Reports, Travel Business Analyst(Asia-Pacific or European editions) and various country reports.

192


Private anduniversal research

Available statistics

Sources

Tourism research on specific topics can be located through severaluseful abstracts which index dozens of tourism and hospitalityjournals. These include: (1) Leisure, Recreation & Tourism Abstractscompiled by CAB International, United Kingdom; (2) Lodging,Restaurant & Tourism Index (quarterly, CD ROM) published by theRestaurant, Hotel and Institutional Management Institute at PurdueUniversity; and (3) The Hospitality Index: An Index for the Hotel, FoodService and Travel Industries (quarterly, CD ROM) compiled by TheConsortium of Hospitality Research Information Services (CHRIS).

International statistics on the hotel industry are available throughannual publications entitled Worldwide Hotel Industry by Horwath &Horwath and Trends in the Hotel Industry: International Edition byPannell, Kerr, Forster. In addition, most national tourismadministrations have the responsibility of compiling national tourismstatistics and provide this information in regular reports.

The World Tourism Organization has developed a series of technicalmanuals to assist in statistical data gathering including: Collection andCompilation of Tourism Statistics; Concepts, Definitions andClassifications for Tourism Statistics; Collection of Tourism ExpenditureStatistics; Collection of Domestic Tourism Statistics; Tourism and theBalance of Payments.

9.3.2 Educational InstitutionsEducational institutions, particularly universities and colleges withspecialties in travel industry management and hotel, restaurant, andinstitutional management (HRIM), conduct applied tourism researchstudies. Tourism as a topic of research can also be found in academicdisciplines like economics, geography, urban planning, sociology,anthropology, and business management, among others. These studiesmay be published in academic or trade journals or they may beproprietary in nature. Given the increasing concern about theenvironmental impacts of tourism, tourism research is extending intonew areas such as environmental science and environmentaleconomics. Tourism research by academicians has greatly contributedto the recognition of tourism studies as a legitimate field of academicinquiry through the use of improved methodologies.

193

Organizations Conducting Research

Abstracts

Hotel statistics

Technical manuals

Academicresearch

9.3.3 Private Organizations or FirmsMany firms conduct proprietary tourism research in such areas asproduct development, feasibility studies, and market trends. Inparticular, large-scale industries such as airlines conduct on-goingstudies on their operations, customers, and the market. Carriers eitherhave their own market research departments or contract withprofessional research firms or consultants. Similarly, hotels may userecent secondary and/or primary data to analyze product success, markettrends, advertising effectiveness, and impacts of new technologies onhuman resources. Hotels also collect primary data such as occupancyrates, average room night, guest satisfaction and so forth. The idealsituation for tourism research at a destination is the collaborationbetween public and private agencies in providing tourism statistics.

9.3.4 Consulting FirmsThere are a variety of consulting firms which conduct tourism researchin such areas as market research, feasibility studies, impact studies,strategic planning, and destination development. These firms mayspecialize in accounting, architecture, market research, or tourismresearch itself. Often outside consultants are hired for their particularexpertise. Other arrangements include the use of a team approachinvolving a partnership of both local and outside experts from start tofinish on a research project.

9.4 Relationship Between Marketing and Research

9.4.1 Destination Marketing Research as a Planning and Evaluation Tool

Marketing research is a necessary tool for both public and privatedecision makers to make effective marketing, planning, andmanagement decisions within the tourism industry. Tourism-relateddata include information such as: (1) trip and traveler characteristics,(2) inventories of accommodations, transportation modes, attractionsand facilities, (3) usage and load factors, (4) visitor motivation andsatisfaction, (5) resident attitudes, and (6) impacts on environment.Because of the extensive and broad nature of the data, no singleorganization has sufficient resources to collect this range of data. The

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Industryresearch

Outside experts

Necessity ofresearch

responsibility for the collection and dissemination of travel data isnormally relegated to government or a quasi-governmental nationaltourism administration, and the information can then be used by bothpublic and private organizations for planning or evaluative purposes.

As discussed in Chapter 8, marketing research is used to developcompetitive products and successful marketing strategies. Increasedtraffic counts and achievement awards from the industry are commonlyused to justify advertising expenditures. However, there is a need tomeasure the effectiveness of marketing and advertising efforts beyondincreased market share, and tourism marketing organizations areincreasingly being asked to account for the effectiveness of marketingprograms through objective measurements that show specific economicand social outcomes such as job creation, tax revenues, or investments.

Moreover, because tourism marketing is partially or fully funded bypublic moneys, the demand for accountability will continue to increase.Government funding for tourism marketing is justified on the basis of thesubstantial government revenues accrued from the multitude of direct andindirect industries that receive tourism-related income. Governmentsupport for tourism marketing is also critical from the standpoint ofpresenting a coherent marketing strategy for the destination and fosteringcohesiveness and collaboration within this broad and diverse industry.However, the support of tourism marketing through public funds is underscrutiny in some places due to declining sources of government revenue.

Because of the unique nature of tourism, it can be argued that themanagement and marketing of tourism cannot be entirely separated fromgovernment support. The tourism product, which consists of all thegoods and services necessary to accommodate visitors, is fundamentallydifferent from other export commodities in that it is the consumer whotravels to the product. Furthermore, the point of production is also aplace of residence and thus the environmental and social impacts oftourism on the host community are of public concern. Hence, at everystage involving the production, distribution and consumption of tourism,government involvement is necessary to ensure conformance withcommunity goals and priorities. This includes control mechanisms suchas: (1) environmental impact statements to be included in feasibilitystudies for resorts or attractions, (2) location and development oftransportation terminals and networks, and (3) government-sponsoredconversion studies for tourism advertising campaigns.

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Relationship Between Marketing and Research

Measuringeffectiveness

Accountability

Governmentinvolvementfor community

9.4.2 The Tourism Market Research ProgramA sound market research program begins with support and commitmentfrom top management. In the private sector, large firms are more likelyto have a formal research program, but all firms use market informationin some fashion (see Table 9.2). Continual advances in computerhardware and software have made it feasible for firms of any size toengage in interpretation and analysis of tourism market information. Infact, the strategic use of information technology is now regarded as a keydeterminant of competitive advantage. An organization’s tourism marketresearch process involves the following (Davidson & Wiethaupt, 1989):

• Setting goals which relate to some specific benefit such as morevisitors, more revenue, or more tax dollars. More complex goals mightbe to match demand with supply, more efficient use of resources, orobtain a cleaner environment. Goals of the marketing effort reflect theinfluence of marketing variables such as price and promotion sincechanges taking place in a destination such as increases in the numberof visitors may also be due to promotional efforts of the airlines. Goalsof destination marketing also go beyond increasing the volume ofvisitors and may include obtaining more first-time visitors, increasingoff-season travel, or persuading visitors to extend their length of stay.

• Identifying target audiences which are defined by psychographic,geographic, and demographic characteristics as discussed inChapter 7. This process facilitates the development of focusedadvertising or promotional programs, and this information can alsobe used to develop research programs which attempt to identifytarget markets more clearly to measure and assess behavior change.

• Developing Strategies. A careful assessment of the strengths,appeals, and weaknesses of the travel product or service contributesto the effectiveness of any new marketing program. Much of thedata is obtained from past market research efforts, and benchmarksare important in the development of strategies. Areas which areoften included in the measurement process are:

- Positioning. This type of analysis will point out whether any changesin promotion or the product are needed based on how the travelmarketer would like the product to be perceived by consumers.

- Competition. It is important to know who are the destination’smain competitors.

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Accessibilityof information

197


- Pricing. This allows the consumer to obtain good value based ona product or service which is price sensitive, i.e., neither over norunderpriced.

- Distribution. The product should be readily available toconsumers and in a manner or form they prefer.

- Promotion. Promotion and advertising programs are measured bytheir success in communicating new information, increasingawareness, changing the consumer’s mind, creating a new image,and giving a return on the investment that justifies the use of funds.


Table 9.2: Major Types of Tourism Establishments for Tourism Marketing Research

AccommodationsHotels and motelsHostels and refugesCamping and caravan sitesHealth-oriented accommodationsOther lodging

Restaurants, bars and canteensRestaurantsBars and other drinking placesNight clubs and dinner theaters

TransportationAir transportInterurban rail passenger serviceScheduled and long-distance tour busesCruise ships

Recreational, cultural, sporting activitiesDramatic arts, music and other art activitiesAmusement parksMuseumsHistorical sites and buildingsSpectator sport facilitiesGambling, betting operations, casinosParticipant sport facilitiesFairs, festivals and other special eventsConvention and conference centers

Other servicesTravel agentsTour operatorsGuides and sightseeing services

An objective marketing research program that addresses these concernsmay uncover weaknesses and strengths of the tourism program. Asmarketing and advertising budgets of destinations around the worldcontinue to increase, it is important to realize that ultimately alldestinations are competing for the same travel moneys. While marketingefforts may increase market share, maintaining or increasing the marketshare is a challenging task in an increasingly mature marketplace. Giventhe fact that most funds for marketing and advertising a destination arepaid by the taxpayers, travel marketers have to be specific in assessinghow well those funds were invested. In this environment, justification forcontinuous public support requires good accountability research study.

9.4.3 Accountability Research for Destination Marketing

Accountability assessment or evaluation research has been defined asthe “sound measurement of the degree or the extent to which statedgoals of a specific marketing effort are being or were achieved”(Davidson & Wiethaupt, 1989 p. 44). In short, the statement of thegoals themselves is the key to this definition. Travel marketers neednumerical goals that are realistic, meaningful, and measurable.Accountability assessment measures more than performance andassists in the review of the adequacy of the goals themselves so thattravel marketers can determine whether objectives are realistic andachievable. Accountability assessment also provides guidance for theimprovement of future marketing performance.

Conversion studies are commonly used in accountability research toevaluate media advertising by measuring how many inquirers wereconverted into visitors. Other ways to assess marketing effectiveness inaddition to conversion studies include studies that examine theoutcomes of familiarization tours/sales blitzes and trade missions,travel writer tours, consumer shows, direct mail, international welcomecenters, outdoor advertising, visitor centers, media programs, andhospitality training (Perdue & Pitegoff, 1990, pp. 45-49).

Accountability research generally should address four areas:

• Is the campaign bringing about the desired change(s)?

The objective of a marketing plan is to focus on bringing desirablechanges in the target market. These changes may include increasedconsumer awareness of the destination, improved image, or increased

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Realistic goals

Accountabilityresearch

visitation and require before and after measures in order to determinethe degree of success of increased awareness created by the campaign.

• Is the campaign changing the target market?

Market segmentation is an essential component for the evaluation oftourism marketing, and target markets are defined geographically,demographically, or psychographically. If segmentation is used,accountability research can focus on the changes that occurred inthe target market, rather than on the limited information provided byoverall changes in the entire market.

• Is the appropriate measure of change being used?

Other measures of success exist rather than economic return oninvestment. A number of studies have indicated that 60 to 70 percentof the people who request travel information, have already madetheir trip decision. Other studies have shown that previousexperience and positive word of mouth from friends and relativesdominate as key reasons for destination choice. Given thesefindings, studies have focused on visitor satisfaction, assessing howsatisfaction depends on actors such as information packets, friendlyemployees, and others.

• Is the measure of change sufficiently precise to adequately measurethe projected campaign results?

Accountability research is designed to adequately measure theprojected change. Measures of success are sensitive to the level ofexpected change brought about by the marketing campaign. Giventhe direct correlation between measurement precision and researchcost, it is important that the desired level of accuracy in evaluatingthe marketing effort be determined before designing the researchprocess (Perdue & Pitegoff, 1990).

For accountability assessment purposes, various aspects of the tourismpromotional and marketing campaign are examined in addition to theoverall campaign. For example, evaluation of a television campaignmay include both an overall assessment of the campaign as well asassessments of different commercial formats and media schedules.Further, accountability assessment should provide clear guidance as tohow future campaigns can be improved. Generally, such an assessmentis not regarded as an end in itself but rather as “a series of insights” tohelp researchers do a more effective job in planning marketingprograms in a highly competitive environment.

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Examiningdifferent aspects

9.4.4 Making Research Understandable to Practitioners

The volume of tourism marketing research studies has increasedgreatly over the years, yet in many cases, this has not resulted in acorresponding increase in the use of these studies by tourismbusinesses (Taylor, Rogers, & Stanton, 1994). Reasons for the gapbetween the producers and users of research include such reasons as:(1) research that is not easily translatable into useable informationbecause of unfamiliar terminology or methodologies, (2) valuableresults that are not used due to user resistance, or (3) findings that arenot sufficiently distributed to concerned parties.

This gap highlights a problem of research use. In order for research tobe translated into information that is easily interpreted and used by thepractitioners, there needs to be good communication between thesuppliers and users of research. Increasingly, mechanisms forcollaboration between government, academia, and private industry arebeing established to accomplish this goal. These could be jointlyfunded projects by government and private sources, specific industrysponsored projects, industry association involvement in academicresearch, and private consulting by academics.

9.5 The Importance of Forecasting Tourism Demand

Tourism demand forecasting is the basic element that is needed byindividuals, public or private organizations, and governments that areplanning future tourism developments. Decisions to be made on prices,promotional or strategic marketing programs, distribution and allocationsof human, natural, and capital resources all require reliable predictions ofcurrent and future demand trends. Forecasting the number of touristarrivals, their service needs, and their seasonality are also crucial forplanners to decide on allocation and distribution of infrastructure,accommodations, transportation, attractions, promotions, and otherservices. The goal is that well-planned tourism development based onreliable and valid tourism forecasts can bring about long-term success andbenefits, while minimizing social and environmental problems.

9.5.1 How Tourism Demand is MeasuredDemand is affected and limited by supply. Operators of tourismbusinesses must make an effort to match demand with supply in orderto prevent losses through either under- or over-supply. Tourism is

200


Gap betweenresearch and

business

Importance ofcommunication

Predictions offuture for long-

term benefit

ultimately an experience of travel for the sake of pleasure and cannotbe stored like material products. Income that is lost from unsold airlineseats or unoccupied hotel rooms cannot be recaptured at some futuredate. Thus, a successful tourism destination depends on linking supplyand demand by attaining sufficient load factors for airlines andoccupancy rates for hotels rooms.

There are several measures of “actual demand”: (1) number of visitors,(2) visitor-days or visitor-nights, and (3) per capita spending. “Potentialdemand” consists of possible future visitations. The demand segmentsinclude international and domestic markets, as well as local residents.

9.5.2 Elements of Tourism DemandThe number of people who engage in travel depends on the factors thatencourage or discourage travel at any given time and place. Factors thatpromote travel are called “propensities to travel” and include proximityof large populations with high disposable incomes, low travel costs,favorable exchange rates, attractive destinations, and a strong culturaltradition for travel. Factors that discourage travel are called “resistancesto travel” and include poor accessibility, high costs, poor image of thedestination, political instability, and concerns about safety or sanitation.

9.5.3 Forecasting Tourism DemandIt is possible to forecast tourism demand by using quantitative orqualitative approaches. Quantitative methods rely on past statisticalinformation that can be counted and measured, while qualitative methodsdepend on human judgements or opinions. Quantitative methodsinclude: (1) causal and (2) non-causal methods, while qualitativeapproaches include: (1) traditional techniques, (2) the Delphi technique,and (3) the Judgment-Aided Model (JAM). These approaches will bebriefly discussed. The best forecasts use a combination of both aspects.

Quantitative Approaches

Quantitative approaches to demand forecasting can be divided intocausal and non-causal (time-series) methods. Causal models attempt toexplain changes in tourism demand in relation to one or moreexplanatory variables in order to forecast future demand. Causalmodels include econometric models that use: (1) multivariateregression techniques or (2) gravity and trip-generation models.

• Multivariate regression analysis is the most popular causal techniqueused for demand forecasting. Multivariate regression models examine

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The Importance of Forecasting Tourism Demand

Linking supplyand demand

"Actual demand"

Factors thatencourage anddiscourage travel

Statisticalinformation andopinions

Causal and non-causal methods

the influence of selected factors such as levels of tourist income, travelcost to the destination, relative price levels, or the currency exchangerate on visitor arrivals. These sophisticated econometric models maybe used to test for possible changes in demand due to variations in thecausal factors, such as what would happen to tourist spending if touristincomes or airfares rise by five percent, or exchange rates dropped by10 percent. However, it is best to have fewer variables in order to cutdown on costs and statistical complexity.

• Gravity and trip generation models have provided useful resultsin examining the effects of propensities such as population andtourist income versus resistances such as distance and costs ontourism demand. Some limitations to using these models to forecastdemand are the extensive data requirements and the problem oftesting for how well the model fits the data.

Non-causal models, or time-series methods, rely on past trends of asingle variable like visitor arrivals or visitor spending in order toestimate future trends. Non-causal methods are used when causalmodels are inappropriate due to lack of data or incomplete knowledgeregarding the causal structure.

• Time-series models use historical data collected over time andproject these trends toward the future. The assumption is that whathappened in the past will influence the future direction andmagnitude of tourism demand. This approach can adequately predictshort-term demand, but poor forecasts can result due to unforeseenchanges in trends. Although causal models are more theoreticallysound, non-causal models are more frequently used because theygenerate acceptable forecasts at low cost.

In comparing the two approaches, the causal approach requiressubstantially more data and considerably more user understanding thandoes the non-causal method. In terms of accuracy, a comprehensivestudy of modeling and forecasting tourism demand in Europeconcluded that the more sophisticated and complicated econometricmethods were not necessarily more accurate compared to the morecost-effective times-series models (Witt & Witt, 1992). The findingssuggest that the value of causal models is limited to identifying howtourism demand changes in relation to price and income, rather thanbeing used as a direct forecasting tool.

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Econometricmodels

Propensities vs.resistances

Projectinghistorical datatowards future

Similarity ofaccuracy

Qualitative Approaches

Qualitative forecasting methods are also designed to predict futuredemand and to assess the possible outcomes of events. However, incontrast to the more objective approach provided by quantitativemethods, this approach seeks subjective inputs through theperceptions, judgments, and accumulated experiences from experts inthe tourism field. In particular, qualitative methods can provide avaluable means to augment quantitative tourism forecasting models.

In addition, qualitative methods are useful if past data are insufficient orinapplicable because the destination is experiencing new or unanticipateddevelopments. For instance, a destination that is just starting to develop itstourism industry may not have historical data on market shares,seasonality, and visitor expenditures. Another destination might becontemplating expanding into new capital-intensive or controversialmarkets like conventions or gaming. Moreover, if a region experiencessocial and political unrest, an existing data base may no longer be valid forquantitative forecasting. Typically, these are situations where qualitativemodels could be useful in analyzing and predicting consumer behavior.

Examples of qualitative methods include market surveys, the Delphimethod, and the Judgment-Aided Model:

• Market surveys of actual or potential visitors are the traditional wayof obtaining qualitative information. Visitor surveys, however, areexpensive, and an alternative is to survey tourist service providerssuch as airlines, hoteliers, and tour wholesalers. For example, anational tourism administration could canvass hotels and tourwholesalers about expectations about advanced reservations andexpected hiring for the following year. Depending on the extent anddegree of industry collaboration, fairly accurate forecasts arepossible. Speculations about the future from experienced and well-informed tourism authorities can provide valuable insights,direction and rationale for decision-makers.

• The Delphi Model technique is essentially a method to obtainconsensus from qualified individuals about the likely occurrence ofcertain situations or events. A series of questionnaires areadministered to a group of experts. Each participant answers thequestionnaire independently from each other to prevent peerpressure or group dominance. Two or more rounds of questionnaires

203


Perceptions andjudgments

New developments

Market surveys

Questioningexperts

are necessary to achieve consensus or divergence. Expert opinioncan yield valuable results that can supplement quantitativeeconomic models for long-range tourism planning.

• Judgment-Aided Model (JAM), or scenario writing, is similar tothe Delphi method in that a panel of experts is assembled in order toreach a consensus on a particular matter. The difference is thatparticipants meet in a seminar format to debate and explore ideas. Ascenario includes a description of: (1) the current situation (baselineanalysis), (2) potential future situations, and (3) future paths thatindicate how the current situation could develop into a future image(Uysal & Crompton, 1985). This approach can prove valuable inobtaining short- to medium-range tourism forecasts by conveningtourism and economic experts on a regular basis, at least once ayear. These forecasts can also be fairly accurate and provide a wealthof information on expected occupancies, employment, construction,retail, and other business trends.

In conclusion, quantitative forecasting requires numerical data seriesand assumes that past trends will continue into the future. Non-causalmodels have more utility for practitioners, while academicians aremore likely to develop causal models. In general, quantitativeapproaches are more suitable for short-term forecasting. Majordrawbacks of quantitative approaches include the need for accuratedata series of the explanatory variables, inability to adjust tounforeseen trends or events, reliance on aggregated data, and theirinability to incorporate an understanding of consumer motivations andbehavior. In an industry as dynamic as international tourism,quantitative forecasts should only be used with extreme care.

Probably no single forecasting method can be considered to be appropriatefor all situations. For example, the Tourism Forecasting Council of theAustralian Tourist Commission has developed its visitor arrivals forecaststhrough a combination of quantitative and qualitative techniques. Usingeconometric techniques, models were developed for each source marketbased on income and price variables. Qualitative adjustments are thenmade to the models based on a number of factors such as expectedchanges in consumer behavior, government policy, external politicalfactors, or unusual events. The final forecasts represent a “most likely”outcome for arrivals based on these indicators. The forecasts are then usedto assist in management decision making (see Table 9.3).

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Seminarof experts

Disadvantagesof quantitive

forecasts

Australianexample

Forecasting tourism demand is a complex process that requires inclusionof all relevant factors and parties in some dynamic fashion. Decisionsupport can now be provided via sophisticated computer software thatfacilitates the processes involved in both quantitative and qualitativeanalyses. It is possible for experts to meet in electronic meeting roomsthat shortens the time and cost required to achieve a consensus inqualitative approaches. Moreover, expert computer systems can bedesigned to simulate management functions and decision makingprocesses. It is suggested that the ideal situation would be a collaborationof both public and private interests in using some combination of bothquantitative and qualitative approaches for tourism forecasting andplanning.

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Source: Australia, Commonwealth Department of Industry Scienceand Tourism, Forecast, Vol. 2, No. 2 (June 1996), p. 3.

Table 9.3: Forecasts At A Glance - Australia

INBOUND TOURISM TO 2005

General

• International arrivals to grow by 9 percent a year to 8.8 million overseasvisitors in 2005.

• Growth to slow from the expected growth of 11.8 percent in 1996, except inthe Sydney Olympics year.

• Fastest growth to be from Asian countries other than Japan.

Visitor Nights

• Visitor nights to grow by 6.8 percent a year, reflecting a decline in averagelength of stay due to the changing composition of the international market.

• Nights in hotels, motels and guest houses to grow more quickly, at 8.8percent due to high use of commercial accommodation by visitors from Asia.

EARNINGS

• Real tourism export earnings to reach $30.6 billion in 2005, up from $13.1billion in 1995. This represents average annual growth of 8.8 percent.

TOTAL VISITOR NIGHTS TO 2000

• Total visitor nights (domestic and international) to grow by 3.7 percent a yearto 346 million.

• Total nights spent in hotels, motels and guest houses to grow by 5.1 percenta year to almost 75 million.

Computer aid

SUMMARY

Tourism research does more than just provide information for travelplanners and managers to make better decisions. The value of tourismresearch is its potential for providing an ongoing and comprehensivemeans of decision support and proactive planning. Marketing research,which is an important part of tourism research, is a necessary tool for bothpublic and private sector decision makers to determine effectivestrategies. Today, there is an increasing need to use sound marketingresearch in order to develop competitive products and successfulmarketing strategies. Well-planned tourism development must also bebased on reliable and valid forecasting information, which attempts toanticipate the future and which is another important dimension of tourismresearch.


1. List and define the sources of data that are used in tourism research.

2. What types of organizations are involved in conducting tourismresearch?

3. Briefly describe what is involved in an organization’s tourismmarket research process.

4. What are the four areas that accountability research should address?

5. What are the reasons for the gap between producers and users oftourism research?

6. Compare quantitative methods versus qualitative methods inforecasting tourism demand.

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4 Sec

tion

Tourism Impacts

CHAPTER 10

Contributions of Tourism to Economic Development

CHAPTER 11

Social and Cultural Aspects of Tourism

CHAPTER 12

Sustainable Tourism and the Environment

CHAPTER 10

Contributions of Tourism to Economic Development

Learning objectives

• To examine the economic effects of tourism on a global, regional,and local

level.

• To understand the economic benefits and costs of tourism.

• To examine several methods for measuring economic impacts.

• To develop an understanding of indicators and monitoring impacts.

• To examine some of the obstacles to obtaining economic benefits

through tourism activity.

• To consider some strategies for maximizing economic contributions.


balance of payments

cost-benefit analysis

direct and indirect employment

direct, indirect, and induced benefits

indicators

input-output analysis

leakage

price elasticity

tourism multipliers

tourism satellite accounts

10.1 IntroductionThere is a growing recognition that innovative approaches must beadopted in order to maintain the economic health of a number ofcountries, communities, and regions. While conditions vary from regionto region, tourism has been seen as an important form of economicdevelopment. It has also been promoted as a somewhat benign agent ofeconomic and social change, a promulgator of peace through interactionand dialogue, and a service-based industry capable of creatingemployment and income. However, in countries and states withburgeoning tourism traffic, there is also an awareness and knowledge ofthe more intangible and indirect economic costs of tourism.

While it can be argued that tourism does offer an important alternativeform of economic activity, it must be seen as only one component of alarger series of development initiatives within any economic system. Thatis not to say that tourism in selected circumstances cannot be the majorsource of income and jobs in a community or region, but rather that theimpact and role of tourism will vary from region to region. Experiencehas shown that tourism may take many forms and meet a number oftourist motivations. Experience has also shown that destinations can riseand fall in popularity, driven by various factors in the destination’s internal

211

10Contributions of Tourism to

Economic Development

Economicdevelopment andsocial change

Variable impact

and external environment such as political unrest, natural catastrophe, anddemand or supply-side problems. A destination that is entirely dependenton tourism is much more vulnerable to these shifts than an economy thatis diversified and has tourism as one of its industries.

This chapter provides an overview of the economic contributions oftourism through an examination of its economic benefits and costs.This chapter also discusses the measurement of economic impacts andthe monitoring of economic activity. Obstacles to economiccontributions and strategies to manage these issues are also explored.

10.2 Understanding Economic Impacts

10.2.1 Tourism in the Global EconomyStatistics provided by the World Tourism Organization (WTO)emphasize the economic significance of tourism at the global level. In1995, international tourist arrivals were estimated at 567 million touristsworldwide while total receipts from international tourism amounted toUS$372 billion (World Tourism Organization, 1996c, p. 1). Internationaltourism receipts grew faster than world trade (commercial services andmerchandise exports) in the 1980s and now constitute a higherproportion of the value of world exports than all sectors other than crudepetroleum/petroleum products and motor vehicle/parts/accessories(WTO, 1995d, p. 21). Travel and tourism is also the world’s largestcreator of jobs in most countries, providing employment for over onehundred million people worldwide. International travel and tourismcontributes about US$166 billion of tax revenues (WTO, 1993b).International tourist arrivals are forecast to grow to 660 million in 2000and to 937 million by 2010 (WTO, 1994e, p. 36).

The ability of a tourism destination to attract tourism revenues isinfluenced by a complex set of characteristics, including:

• Political constraints and incentives (such as taxation policiesregarding local and foreign investment and imports).

• Resources, facilities, and conveniences (attractions, transportation,access, hospitality, medical and other services, pricing).

• Market characteristics (visitor tastes and preferences, disposableincome, propensity to travel, proximity to destination).

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Chapter 10: Contributions of Tourism to Economic Development

Economicsignificance ofglobal tourism

• Political stability.

• Expertise of human resources and ability of decision-makers (publicand private) to market and promote the destination effectively.

10.2.2 Tourism in the National EconomyTourism is generally seen as a significant economic contributor to anation’s gross national product (GNP) since international visitors are avaluable source of foreign currency. One source of economic data on theeconomic significance of tourism for a country is its balance ofpayments, which is a record of the international transactions of acountry. Kenya is an example of a country where net foreign exchangeearnings from tourism are a significant percentage of gross receipts (90percent in 1989), indicating that from a balance of payments perspective,Kenya’s tourism industry is very important to the country. In contrast, inMauritius tourism accounted for only 10 percent of its gross receipts in1990 (The Economist Intelligence Unit, 1992). Other examples oftourism’s contribution to GNP in the early 1990s include six percent inTunisia, 18 percent in the Maldives, and 32 percent in Barbados(Sustainable Tourism Development in Industry and Environment, 1992).

10.2.3 Impact of Tourism on EmploymentThe importance of the tourism industry both as an income generatorand employer is often overlooked by those unfamiliar with tourism andits work force. Yet, human resources is likely to be one of the mostimportant issues facing the tourism industry in the near future. WTOprojects that by the year 2005, tourism jobs will increase faster thantraditional industries by as much as 59 percent. The World Travel andTourism Council (WTTC) has estimated that tourism employed 1 in 9workers worldwide or about 212 million people, making it the world’slargest employer (World Travel and Tourism Council, 1993). For manycountries, tourism is the main employer.

Besides generating millions of jobs worldwide, the tourism industry in1994 had a payroll of US $1.7 trillion, or 10.3 percent of totalemployee wages and salaries (Goeldner, McIntosh, & Ritchie, 1995).Tourism’s share of total employment compensation ranges from 4.9percent in Eastern Europe, where tourism is in its beginning stages, to18.7 percent in the Caribbean, where tourism is a mature industry. Theimage of tourism as a generator primarily of low-wage and low-skillemployment is a misleading one, and underestimates tourism’s impact

213

Understanding Economic Impacts

Contributionto GNP

Human resources

Payroll

10.3 Measuring Tourism Economic Impacts

10.3.1 Identifying Tourism ActivityOne of the points that previous chapters of this textbook haveemphasized is tourism’s complexity as an industry, encompassing privateand public sectors– transportation, accommodations, retail, food andbeverage, reception and convention centers, and so forth. Because of

on overall wages and salaries. In fact, many of the jobs at the technical,managerial, and professional levels require education and trainingwhich command compensation commensurate with thesequalifications. In many cases, compensation in the tourism industry iscompetitive with high-technology industries.

Tourism provides both direct and indirect employment. Companies thatprovide direct employment are those whose employees are in contactwith tourists or directly affect the tourist experience. Companies thatprovide direct employment include hotels, food service operators, airlines,cruise lines, travel agents, attractions, and shopping outlets. Companiesthat provide indirect employment in the tourism industry are those thatserve the direct employment companies. These indirect employmentcompanies, which may be restaurant suppliers, construction firms thatbuild hotels, and aircraft manufacturers, are dependent on the companiesproviding direct employment for their revenues. Overall, direct andindirect employment in tourism represent a sizeable portion of totalemployment. As shown in Table 10.1, both direct and indirect employmentopportunities in tourism are expected to grow over the next decade.

214


Source: World Travel and Tourism Council, 1993.

Year Direct Employment% of Total

IndirectEmployment % of

TotalTOTAL

1991 4.9 5.3 10.2

1994 5.1 5.5 10.6

2005 5.4 5.9 11.3

Table 10.1: Travel and Tourism Employment

Contact withtourists

Companiescontact with

industry

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Measuring Tourism Economic Impacts

this, it has been difficult to statistically distinguish tourism activity fromother economic activity and to measure its contribution to the overalleconomy. The International Standard Classification of EconomicActivities, and other similar classification methods which providecategories of economic activity that nations use in compiling theirstatistics, traditionally have not included tourism. These difficulties areoften cited as the reason why tourism’s importance to economic growthis consistently underestimated, especially by policymakers.

The WTO has played an instrumental role in improving the way inwhich tourism activity is statistically identified and measured. Earlyefforts to standardize definitions and measurements of internationaltourism were quickly overtaken by the rapid pace at which the industrygrew and changed, thus rendering many of the efforts inappropriate. Atthe same time, the demand for timely and accurate data has growntremendously on the part of organizations and groups such as nationaltourism administrations, industry associations, interest groups,academia, and communities. These demands, in addition to the manyexisting sources of data which were often incompatible with eachother, presented a situation where a common standard was vital.

In 1991, the WTO and the government of Canada convened theInternational Conference on Travel and Tourism Statistics, known as theOttawa Conference. Recommendations of the Ottawa Conference werethen pursued with the leadership of a WTO-established steeringcommittee. The committee’s resulting report on tourism statisticalstandards was adopted by the United Nations Statistical Commission in1993. The WTO then published a series of manuals to assist countries inimplementing the standards: Collection and Compilation of TourismStatistics; Concepts, Definitions and Classifications for TourismStatistics; Collection of Tourism Expenditure Statistics; Collection ofDomestic Tourism Statistics; and Tourism and the Balance of Payments.

Part of WTO’s effort has been directed towards a classification system oftourism activities. As noted above, traditional classification systems ofeconomic activity have excluded tourism as an identifiable industry. Thus,in 1993, the WTO gained approval from the United Nations StatisticalCommission on a Draft Standard International Classification of TourismActivities (SICTA). SICTA provides a foundation for better analysis of thesupply aspect of tourism. Better understanding of the demand aspect isalso being pursued through work on a standard classification of tourismproducts. Together, improvements in supply and demand analysis willfacilitate more accurate answers to the following questions:

Difficultyestimatingeconomic activity

Standardization

Statisticalstandard manuals

Classifyingtourism activities

• What are the products that tourists consume?

• Who provides them and how are they produced?

• What is the labor input necessary for the production of tourist goodsand services?

• What is the contribution of tourism to Gross Domestic Product (GDP)?

• How do demand and supply in tourism interact? (WTO, 1995b, p. 71).

Despite these advances in statistical methods, difficulties remain inmeasuring the tourism industry. A large part of the problem centersaround the traditional method of defining an industry, which is from asupply or production perspective. For example, industries such asagriculture, manufacturing, and construction can be readily identifiedby the products and services they produce. For tourism, however, thismethod does not work well. Most tourism-related businesses do notdevote all of their production to tourism. Restaurants and retail stores,for example, generally rely on sales revenue generated by both visitorsand non-visitors for their business.

To seek greater clarity and understanding in measuring the economicscope of tourism, organizations such as the WTO and the WTTC as wellas individual countries have pursued a consumption or demand approachthe subject. The underlying premise of this approach is that touristactivity is best defined by a demand characteristic: specifically, theconsumption of a good or service by a tourist (see Chapter 1 to reviewWTO’s definition of “tourist”). This approach, along with the use oftourism satellite accounts (discussed below), enables governments tomore accurately identify and measure their tourism industries.

10.3.2 Structure of the Tourism IndustryTourism consists of many different types of companies andorganizations. In a particular destination, the services these companiesoffer combine to provide each tourist with a single touristic experience.

While the types of companies that comprise the tourism industry varywidely, they can be grouped and classified by sub-industries or sectors.For statistical purposes, only major categories within classificationsare separately certified. The main sectors, and some of the types ofcompanies in each sector, are:

• Lodging - Hotels, motels, resorts, bed and breakfast establishments

• Food Service - Restaurants, institutional food service contractors

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Difficultymeasuring

industry

Demandapproach

Types ofcompanies

• Passenger Transportation - Airlines, ground tour operators, carrental firms, cruise lines

• Channelers - Travel agents, tour wholesalers

• Tourist Activities - Attractions, gaming, recreation, entertainment,shopping establishments

• Tourism Organizations - National Tourism Administrations (NTAs),local government tourism offices, tourism trade associations.

In light of this structure, measuring the economic contribution oftourism to a community or region is complicated by a number offactors within and outside the destination. These factors include thewide range of impacts associated with tourism economic activity, thediverse number of participants in the activity, the complex inter-relationships between various sectors, and the ignoring of smallsubcategories in the statistical counting.

10.3.3 Supply-Demand and Price ElasticitiesAt a basic level, tourism economic activity can be understood within theframework of the concept of supply and demand. For example, as theprice of a hotel room increases, demand should decrease as visitors seekother locations or accommodation sources, and the supply of availablehotel rooms therefore increases. One way to measure the supply-demandrelationship of tourism goods and services is to determine their priceelasticity. When demand is price elastic, a lower price generatessufficiently higher demand to generate higher revenues. Similarly, ifdemand is price inelastic, a lower price does not result in a sufficientincrease in demand, thus leading to lower overall revenues. Knowing theprice elasticity of demand can aid tourism service providers in designingtheir product mix (Lundberg, Krishnamoorthy, & Stavenga, 1995).

10.3.4 Direct, Indirect and Induced BenefitsThe economic benefits of travel and tourism can be derived directly orindirectly. Direct benefits are realized through direct touristexpenditures for goods and services in the destination, in the form ofbusiness receipts, income, employment, and government receipts fromthe sectors that directly receive the tourism expenditure.

Indirect benefits are generated by the circulation of the tourismexpenditure in the destination through inter-business transactions in thedomestic economy. For example, indirect benefits can be generated from

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Understandingeconomic activity

Touristexpenditures

the investment and spending by the businesses which benefit directly fromtourism expenditures. The direct business receipts, when re-funneled asinvestments or used to purchase other goods and services from domesticsuppliers (who, in turn, purchase goods and services from other domesticsuppliers), stimulate income and employment in other sectors.

In addition, tourism spending within the destination can create inducedbenefits. As income levels rise due to the direct and indirect effects ofthe change in the level of tourism expenditure, some of the additionalpersonal income (related to the change in tourism expenditures) is spentwithin the destination. This results in induced benefits, such as higherlevels of income and jobs in the local goods and service sector. Hence,tourist spending creates direct benefits in tourism-related services andsectors such as accommodation, hospitality, attractions, events, andtransportation, and indirect and induced benefits in other sectors suchas agriculture, construction, and manufacturing. Indirect and inducedbenefits are also referred to as the secondary effect.

10.3.5 Multiplier Model of Tourism Revenue Turnover

Multipliers measure the effect of expenditures introduced into aneconomy. Tourism multipliers are used to determine changes in output,income, employment, business and government receipts, and balance ofpayments, due to a change in the level of tourism expenditures in an area.For example, if tourism expenditures increase by 15 percent due toattendance at a special event in the destination, some of this added revenue(first round of expenditures) may be used by the event to purchase foodand other goods from the local economy, as well as on wages, salaries, andgovernment taxes (second round of expenditures). The suppliers to theevent may then spend the money received as a result of the event towardother goods, services, and taxes, generating yet another round ofexpenditures. This process continues, as the additional personal incomederived from the direct and indirect effects of the increase in tourismexpenditures go towards the consumption of local goods and services.

Leakage

Some of the added revenues from the increase in tourism expenditures may,however, undergo leakage. Leakage refers to the process through whichtourism receipts leave the destination’s economy. Revenues may leak out ofthe local economy in the form of payment for imports or moneys saved

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Domestic inter-business

transactions

Personalincome spent

Local productconsumption due

to tourismincrease

(without re-investment). Import payments can take several forms, such asrepatriation of profits to foreign corporations and salaries to non-localmanagers, as well as payment for imported goods and for promotion andadvertising by companies based outside the destination. Tourism-relatedcommodities and services purchased from within the destination reduceleakages through the creation of economic interrelationships among thegoods and service providers in the destination.

Multiplier Effect

The net effect of the successive rounds of spending and leakage of theadded tourism expenditure is the multiplier effect. Tourism multipliersattempt to measure the relationship between the direct tourismexpenditure in the economy and the secondary effect of the expenditureupon the economy. Some of the factors which affect the multiplier are thesize of the local economy, the propensity of tourists and residents to buyimported goods or services, and the propensity of residents to save ratherthan spend (where saving reflects money kept out of circulation, and notre-invested). In mathematical terms, the multiplier can be shown as:

Multiplier = 1/(1 - C + M)

where C = marginal propensity to consume (the proportion of anyincrease in income spent on consumption of goods and services), and

where M = marginal propensity to import (the proportion of anyincrease in income spent on imported goods and services).

Some commonly used multipliers are:

• The income multiplier, which measures the extra domestic income(primary and secondary) generated by an extra unit of tourismexpenditure.

• The employment multiplier, which measures the increased numberof primary and secondary jobs created by an extra unit of tourismexpenditure.

• The government multiplier, which measures the governmentrevenue created by an extra unit of tourism expenditure.

Multipliers can be calculated for a country, region, or community.However, the information provided by tourism multipliers has to beevaluated with a great deal of care. Factors such as the size of thedestination can affect the multiplier significantly. A smaller economy

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Receipts leavelocal economy

Spendingand leakage

may have a much smaller multiplier than a larger one since more goodsand services might be imported to meet the tourists’ needs, resulting ina greater leakage of revenues out of the destination. Hence, multipliersmay vary greatly among communities within a country or region.Furthermore, since tourism multipliers can be calculated in a numberof different ways, care must be taken when comparing the multipliersof different countries. Multipliers should be examined along with othermeasurements and indicators to determine the positive and negativeeconomic impact of tourism on the community.

10.3.6 Input-Output AnalysisStudies of the economic impacts of tourism generally include input-output analysis. This kind of analysis helps to demonstrate howeconomic sectors are related, the number of linkages among them, andthe effect of these linkages. Input-output analysis is a means ofanalyzing interindustry relationships by tracking the flow of goods andservices in an area’s economy through the chain of producers,suppliers, and intermediaries, to the final buyer.

Input-output analysis commences with the development of a table thatillustrates, in matrix form, how transactions flow through the economyover a given time period. The rows of the matrix indicate the sales of thetotal output by each sector to every other sector. The columnsdemonstrate the inputs required by every sector from the other sectors.For example, when assessing tourism accommodation, the rows in thetable would demonstrate the output or revenues generated by eachindustry from the sale of products or services, including accommodation,meals, tour guides, and related services such as laundry, or medicalservices. The columns would indicate the inputs (goods, services, laborand capital) that go into the output of the accommodation sector,including food, utilities, paper products, advertising and promotionservices, wage and salary levels, and other factors.

Using a combination of matrix manipulations, multipliers can becalculated to provide an assessment of the effects of different sectorson each other. While input-output tables are helpful in understandingthe linkages of the sectors in the economy, they are limited to providinga snapshot of inter-industry economic actions at a single point in time(Archer, 1977; Archer, 1982, pp. 236-24; Fletcher, 1989, pp. 514-529).

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Evaluationsand comparisons

Linkages amongeconomic sectors

Input-outputlimitation

10.3.7 Tourism Satellite AccountsSatellite accounts provide comprehensive information on a field ofeconomic activity, and are generally tied to the economic accounts of anation or region. The tourism satellite account is a relatively newpractice adopted by some countries. For example, the British ColumbiaMinistry of Development, Trade and Tourism (in the Province of BritishColumbia, Canada), has developed a tourism satellite account and aseparate input-output model designed to display tourism’s contributionsto the province, based on the overall input-output model of the province(Burd, 1994, p. 372). A tourism satellite account has also beendeveloped by Statistics Canada in order to assess the significance oftourism to Canada. The account uses concise definitions of tourism andattempts to provide a clear and real measure of tourism-relatedeconomic activity. Both direct and indirect tourism activities areaccounted for in areas such as demand, supply, employment, and taxes.This capability is helpful in determining the complex spending patternsof visitors and the goods and services that cater to their needs. A systemof national accounts (SNA) has been supported by the United Nationsto improve the quality of government statistics. The advantages of thetourism satellite accounts can be summarized as follows:

• Tourism satellite accounts identify the amount of the benefit enjoyedby various sectors of the economy and the employment, income,taxes, and other benefits that flow from these sectors.

• Tourism satellite accounts provide a comprehensive picture of thesize and scale of tourism in the country, thereby helping governmentsand businesses assess the value of tourism to the economy.

10.3.8 Cost-Benefit AnalysisBy using a number of economic tools and methods, destinations areable to obtain a large array of economic information on tourism whichcan be used to make decisions. In assessing this information, analysts,planners, and managers have to determine not just whether jobs andwealth are created, but also how tourism’s benefits are distributed, whateconomic, social, and cultural impact costs result from thedevelopment process, and whether the benefits outweigh the costs.This analysis requires the integration of economic data with other data(such as environmental, social, and cultural) to provide a reasonableindication of whether tourism is a good strategy for the destination.

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Real measure oftourism-relatedeconomic activity

Analyzingthe distributionof benefits

The potential economic benefits of tourism development include:

• Increased income and standard of living from tourist expenditures.

• New employment opportunities.

• Increased tax base.

• Increased community visibility leading to other economicdevelopment opportunities.

• Improved infrastructure and facilities.

• Increased resources for the protection and conservation of naturaland cultural heritage resources.

• Development of local handicrafts.

The potential costs that need to be weighed against these benefitsinclude:

• Seasonal employment.

• Increased cost of living for residents (e.g., land, housing, food, services).

• Pollution.

• Increased traffic and congestion.

• Negative impacts on cultural and natural heritage resources.

• Increased crime.

• Increased taxes.

• Leakage of revenues and dependence on imported goods and services.

• Over-dependence on tourism as a prime economic activity.

Cost-benefit analysis is an important activity to perform, but is also difficultto carry out, since a number of the costs are very difficult to quantify. Howdoes one measure the “sense of place” or “spiritual happiness” of apopulation? How does one quantify the cost of habitat fragmentation?While advances are being made in developing full-cost, environmentally-based accounting, some measures may need to remain qualitative ratherthan quantitative. Another challenge in cost-benefit analysis lies inidentifying the parties who benefit and those who pay the costs of tourism.

Cost-benefit analysis does not have to be applied to the industry as awhole; often, it is more appropriate to conduct smaller cost-benefitanalyses on specific issues to provide information on specific aspectsof tourism.

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Evaluationchallenges

10.4 Monitoring Economic ImpactsThe previous section discusses some of the challenges of evaluatingthe economic costs and benefits of tourism. Such an evaluation needsto be undertaken within the context of the overall economicdevelopment of the destination, and should also be integrated with ananalysis of the social, cultural, and environmental costs and benefits oftourism which are covered in Chapters 11 and 12. This task can befacilitated by ensuring that proper indicators are established forevaluating and monitoring these costs and benefits. Many destinationareas have been unable to monitor and evaluate the effects of theirplanning with the result that essential data is lacking in many areas.The setting of monitoring criteria and thresholds is becomingincreasingly important in tourism, given the many ambitious claimsthat are made concerning the potential of tourism to satisfy a range ofcultural and societal goals. Growing concerns for global environmentalsustainability will force greater accountability for the economicimpacts of tourism. In addition, in difficult economic times tourismbenefits need to be well understood and documented if public andprivate sector funding is to be allocated for developmental purposes.The prospects for tourism development depend on more sophisticatedunderstanding and documentation of the benefits and costs of usingtourism as a tool in meeting the goals of a society.

An example of the ways in which tourism can have indirect, long-termeconomic impacts can be seen in land value changes. In relativelyundeveloped destination areas, land values often rise substantially ashigher-priced projects replace traditional and less profitable land uses.If agricultural landowners choose to sell or develop their land fortourism purposes, the local economy may have to rely more heavily onfood imports to feed tourists and residents. The intrusion of a market-based system on traditional land values can also have an impact on thelocal heritage and sense of place. Conflict may occur between thoselandowners who wish to retain the traditional values and uses of land intheir community and area, and tourism proponents. Such conflict couldescalate as tourism pressures increase, and the resulting scars on thecommunity might take a long while to heal. This short example helps toillustrate that understanding and measuring the full economic impact oftourism is more complex than measuring only its direct impacts.

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Monitoring Economic Impacts

Evaluating overallcosts and benefits

Land values

10.4.1 Indicators in Tourism MonitoringOne of the important first steps in ensuring quality monitoring andevaluation in tourism is to establish indicators which can be used tomeasure success and failure. Indicators are statistical devices thatserve to measure or gauge conditions, such as the amount of airpollution in an area. Indicators are generally used to compare anexisting condition to a base point. Thus, an air pollution index of 150would indicate an increase over the air pollution measured in the baseyear, represented by an index of 100. Indicators for the tourismindustry should include measures for the quality of visitor experienceand for visitor satisfaction, in order to help gauge how future visitationmay be impacted. Given the interdisciplinary and wide rangingimpacts of tourism, it is impossible to deal with all variables, andtherefore reliable indicators simplify the assessment process. Some ofthe factors to be considered in developing and using indicators include:

• The development and use of indicators can be costly and timeconsuming and an early commitment must be made to the process.The process should be carefully assessed in order to ensure that theinformation being produced is accurate and useful in futuredecision-making.

• Not all indicators are of equal weight and the use of a differentialweighting system often must be instituted.

• The process of assessing community economic impacts created bytourism may produce conflicting results. The assessment processmust recognize the need to both consider and balance these conflicts.

• The information gathering process should enable the utilization ofdata in varied situations. For example, data on the characteristics ofvisitors to a site might be used for assessing economic impacts aswell as refining an interpretive program, and for guiding thedevelopment and assessment of strategic tourism plans.

• The development of indicators will have to be undertaken as aserious first step in being able to make the case for the role thattourism plays in community economic development.

• For indicators to be designed and used effectively, joint agreement onthe nature of the information to be collected by a range of actors isnecessary. This agreement is important to allow collective experiencesto guide the process and ensure that the data is perceived to be legitimateby the scientific, public, and other stakeholders in the domain.

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failure

10.4.2 The Assessment ProcessFor the assessment process to have any influence, it has to be futureoriented and tied into the policy and planning process. The impactmanagement process will therefore require the following:

• A planning and management development approach which requiresongoing assessment.

• Coordination and cooperation among a wide range of actors(including specialists and government officials).

• The training of existing and future personnel in monitoring techniques.

• The establishment of an ongoing organizational structure to conductmonitoring activities.

10.5 Obstacles to Economic Development Through Tourism

Market Obstacles

Much of tourism activity–including the ability and interest of touriststo travel and the distance they are willing to travel–is dependent on avariety of market factors, such as income levels, cost of fuel, jobsecurity, physical condition and mobility, seasonal factors, as well astravel motivations. Most of these factors are beyond the control of theindividual destination. Thus, the ability of a destination to attracttourists on a long-term basis requires planning and flexibility. Theability of a community to conduct a reliable market survey, identify apositioning strategy, and promote itself is essential.

Community Obstacles

Negative perceptions of tourism are often found at the local level.Tourism activities, as a whole, are generally viewed as a collection ofsmall business ventures, unlike a large factory that may be the mainemployer in many communities. Often, tourism work is viewed as ashort-term or temporary activity until more appealing and profitableemployment can be found, since many tourism positions are in fact, entrylevel jobs or seen as low status occupations. These perceptions act as adeterrent to greater local participation in tourism-related employment.Overcoming these negative feelings and providing for a hospitable hostcommunity is an important challenge.

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Obstacles to Economic Development Through Tourism

Future-orientedplanning

Willingnessto travel

Perceptions oftourism work

Environmental Obstacles

The emphasis in much of tourism activity tends to be on attractinglarger numbers of tourists to a region or site, which can pose problemsfor environmentally sensitive areas. It is clear that some environmentsmay have to generate high-yielding tourist activities to generatesufficient income while protecting social and natural environments.This is difficult to accomplish in the highly competitive tourism market.

Lack of Integration

There is limited integration and cooperation between many tourismbusinesses given that, for the most part, the local tourism industrytends to be fragmented or lacking in tourism expertise.

Institutional Obstacles

In some cases there is little coordinated governmental support andpromotion for tourism initiatives. In addition, government can lack theproper structure to help plan and manage tourism. In other instances,political and ideological issues make tourism planning andmanagement difficult to implement.

Employment and Training Obstacles

The availability and quality of training and education opportunities intourism planning and management can limit growth. In order to beeffective, training should address the broader context of tourism andthe range of potential opportunities. The lack of employment equityand opportunities for women can be a serious obstacle in ensuring anequitable distribution of the benefits of tourism activity, as can limitedaccess to education and training for disadvantaged groups.

10.6 Facilitating Employment in the Tourism Sector

The actual extent of employment generated by tourism is contingentupon a variety of factors. One of the primary factors is the quality andextent of the resources available in the destination area (such asheritage resources, the uniqueness of the landscape, and culturaltraditions) and the nature of the market for these resources. Of equalimportance is the ability and willingness of local tourism businesses,operators, and governmental bodies to develop plans, marketeffectively and reach an appropriate target audience.

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Problem oftourist numbers

Limitedcooperation

Little publicsupport

Lack of equityin education/employment

Buildingdevelopment

In order for countries, regions, and communities to take advantage oftourism as a form of economic development, a number of changes andprograms are necessary. They include:

• Better tourism planning and management practices.

• Coordination of activities at all levels of government operations.

• Improved cooperation between businesses and communities, as wellas between public and private sectors.

• Improved impact assessment and monitoring practices.

• The design and delivery of a wide range of tourism educational andtraining opportunities.

• The provision of marketing and promotional assistance.

• More equitable access to employment, promotion, education andtraining for marginalized population groups.

Better Planning and Management

Tourism strategies and plans that are developed with local participationin the planning, implementation, and management stages andcommunity economic development approaches empower residents toassume leadership and responsibility for tourism planning. This helpsto increase local control over tourism activities and investments andlocal commitment to continuing tourism development, therebyreducing the potential of leakage and a diminished loss of quality oflife. Tourism strategies and plans that are linked with a broader set ofinitiatives and community or economic development plans, and areafforded the same status and importance as other local plans, has abetter chance of successfully achieving broader community goals.

Coordination

Coordination at both policy and action levels among the variousagencies involved and among the different levels of government is vitalto sound development. This is particularly relevant to the developmentand implementation of tourism and environmental policies, and in theprovision of service such as transportation, parking, and water andsewer capacities.

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Facilitating Employment in the Tourism Sector

Local control,local commitment

Policy and action

Cooperation

Cooperation among local businesses and tourism operators stems fromthe interrelated nature of tourism, where one business or operation canbe directly affected by the success or quality of another. Tourismpartnerships in the areas of planning, management, marketing, andfunding for tourism ventures by local financial organizations provide oneavenue of cooperation. Public-private partnerships to support thedevelopment and funding of tourism initiatives and cooperation amongneighboring regions and communities are forms of cooperationinvolving government. In many instances, it is not just one town or sitethat attracts tourists, but rather the larger area and its environs. A case inpoint is San Francisco, California where the nearby wine producingcounties of Napa and Sonoma are important draws for many tourists.Cooperative arrangements enable communities to capture a range ofbenefits for the entire region, while independent efforts often result in aduplication of efforts and an inefficient use of limited resources. Onearea of particular importance is marketing linkages among operators atthe local, regional, national, and international levels.

Impact Assessment and Monitoring

An area of great importance is the assessment of the impacts of tourismdevelopment proposals. Such assessments include consideration of thecapacity of sites, in terms of their physical, natural, social, and culturallimits. They also include monitoring and evaluation of plans and operations.

Sustainable tourism may involve direct and indirect forms ofgovernment intervention to ensure the protection of natural resourcesand the equitable distribution of economic benefits from tourismdevelopment. Private sector incentive may encourage financialinvestment and reinvestment in developmental activity that adhere tothe principles of sustainable tourism. Encouraging cooperation andcollaboration among the diverse actors, as well as public-private sectorpartnerships can reduce potential and actual conflicts of interests andvalues. In addition, these actions should facilitate the more efficient useof resources and capabilities to achieve the destination’s economicobjectives. As the global environment heads toward the 21st century,creative leadership will be required to develop and spread the economicbenefits from tourism equitably, while minimizing economic and otherrelated costs. Careful monitoring and assessment of the economicimpacts of tourism will help destination planners and managers forwardthe vision of economic sustainability at the destination and global level.

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Makingpartnerships

Assessing efficientuse of resources

SUMMARY

Tourism is becoming an increasingly important force in the worldeconomy. Tourism’s contributions to total production and toemployment are significant and growing. As the industry matures andas governments recognize its importance, there will be greateremphasis on the accurate measurement of tourism’s economic impacts.This measurement has been hampered by the unique structure oftourism which does not conform to the established norms ofproduction-based industry analysis. Increasingly, however, betterstatistical approaches based on demand are yielding more accurateinformation on tourism’s direct and indirect benefits. At the same time,tourism’s costs are being studied more carefully and anticipated inpolicy and planning. The development of realistic indicators fortourism’s costs and benefits has played an important role in enablingthe public and private sectors to maximize tourism’s positive economicbenefits.


1. What are some of the costs of tourism development that could affectthe economic benefits of tourism in a community?

2. How do tourism expenditures turn over (multiply) in the destination?

3. How can leakage be reduced?

4. What advice would you give a community’s destination managerregarding the use of multipliers for his community?

5. Why is cost-benefit analysis a useful tool in economic analysis?

6. What role do indicators play in economic analysis?

7. What are some of the obstacles to generating economic benefitsfrom tourism?

8. As a destination manager, how would you ensure that tourismdevelopment generates employment in your community or region?

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Summary

CHAPTER 11

Social and Cultural Aspects of Tourism

Learning objectives

• To understand the factors in tourism that contribute to social and cultural

impacts, both positive and negative.

• To understand the importance of culture as a tourist attraction.

• To understand the direct relationship between sociocultural factors and

sustainable tourism.

• To be familiar with strategies suggested as ways to mitigate negative

social and cultural tourism impacts and promote positive impacts.

• To know what interpretation is and how it can be used to provide quality

tourist experiences.


cultural arrogance

culture shaping inbound tourism

culture shaping outbound tourism

culture shock

demonstration effect

ethnic tourism

interpretation

sociocultural impacts of tourism

urban tourism

11.1 IntroductionOne clear lesson from the history of tourism is that not everyone hasbeen happy to have guests. Tourism has attracted both praise andcriticism–praise for its potential or real economic contributions;criticism for its sometimes adverse affect on places and host residents.The criticism of tourism has come not only from academic researchersand cultural commentators, but also from government officials andpolicy makers and from residents and host communities themselves.When criticisms are strident, the consequences for visitors range fromindifference to outright hostility from the community to the denial ofpublic investment in tourism infrastructure. The challenge for tourismmanagers, planners, and researchers is to find ways to develop tourismas an industry providing travel experiences which are rewarding andsustainable for both hosts and guests.

This chapter describes some of the principles that have been proposedfor ensuring that the tourism industry of the future is characterized bythese rewarding and sustainable travel experiences. In particular, thediscussion will focus on the interaction between sustainable tourism andsocial and cultural resources. The chapter will review the importance ofsocial and cultural attractions in tourism, describe the negative andpositive social and cultural impacts of tourism, and discuss practices

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Criticism oftourism

and strategies for tourism planners and managers to alleviate thenegative and encourage the positive impacts. Finally, the chapter willintroduce interpretation as a tool to assist in the management of tourismand as a means of ensuring quality social and cultural tourism products.

11.2 Sustainable TourismAs the global community moves towards the twenty-first century, twomajor forces in tourism are gathering momentum. The first calls forgreater responsibility to and respect for the host destination’s peopleand their culture. This pressure is the result of growing recognition thattourism can and often does have negative impacts on hosts and theirenvironments. The second force calls for greater responsibility on thepart of individuals who travel, reflecting new patterns of consumptionwhich include a rise in independent travel and an increasing focus bytourists on education and self-development as motives for their travel.These two forces can be seen as coming together in the principles ofsustainable tourism.

Definitions of sustainable tourism emphasize three important features:

1. Quality. Sustainable tourism provides a quality experience forvisitors, while improving the quality of life of the host communityand protecting the quality of the environment.

2. Continuity. Sustainable tourism ensures the continuity of the naturalresources upon which it is based, and the continuity of the culture ofthe host community with satisfying experiences for visitors.

3. Balance. Sustainable tourism balances the needs of the tourismindustry, supporters of the environment, and the local community.Sustainable tourism emphasizes the mutual goals and cooperationamong visitors, host community, and destination in contrast to moretraditional approaches to tourism, which emphasize their diverseand conflicting needs.

Table 11.1 provides the key principles of sustainable tourism. Insustainable tourism the needs of the host community are an importantcomponent to be considered in the planning and management oftourism. The need to ensure that tourism does not adversely impact onthe culture and social structure of a host community is central tosustainable tourism. The quality of the tourist experience is alsodependent upon the social and cultural features of a destination.

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Chapter 11: Social and Cultural Aspects of Tourism

Responsibilityand respect

Host community'sneeds

233

Sustainable Tourism

Source: Globe '90 Conference, Tourism Stream, Action Strategy for SustainableTourism Development, Vancouver BC, Canada. As quoted in WTO, Sustainable

Tourism Development: Guide for Local Planners (Madrid: WTO, 1993), p. 40.

Table 11.1: Principles for Sustainable Tourism

• Tourism planning, development and operation should be part ofconservation or sustainable development strategies for a region, aprovince (state) or the nation. Tourism planning, development andoperation should be cross-sectoral and integrated, involvingdifferent government agencies, private corporations, citizens groupsand individuals thus providing the widest possible benefits.

• Agencies, corporations, groups and individuals should follow ethicaland other principles which respect the culture and environment of thehost area, the economy and traditional way of life, the communityand traditional behavior, leadership and political patterns.

• Tourism should be planned and managed in a sustainable manner,with due regard for the protection and appropriate economic uses ofthe natural and human environment in host areas.

• Tourism should be undertaken with equity in mind to distribute fairlybenefits and costs among tourism promoters and host peoples andareas.

• Good information, research and communication on the nature oftourism and its effects on the human and cultural environmentshould be available prior to and during development, especially forthe local people, so that they can participate in and influence thedirection of development and its effects as much as possible, in theindividual and the collective interest.

• Local people should be encouraged and expected to undertakeleadership roles in planning and development with the assistance ofgovernment, business, financial and other interests.

• Integrated environmental, social and economic planning analysesshould be undertaken prior to the commencement of any majorprojects, with careful consideration given to different types of tourismdevelopment and the ways in which they might link with existinguses, ways of life and environmental considerations.

• Throughout all stages of tourism development and operation, acareful assessment, monitoring and mediation program should beconducted in order to allow local people and others to takeadvantage of opportunities or to respond to changes.

11.3 The Sociocultural Impacts of TourismThe impacts of tourism are commonly categorized as being physical,economic, and sociocultural. However, because the consequences oftourism are often complex and interrelated, impacts usually fall intomore than one category. This problem is also apparent in attempts todefine social and cultural impacts.

11.3.1 Defining Society and ImpactsSociety is a multi-faceted term generally referring to the patterns ofsocial organization of and within communities. Societies are the waygroups of human beings locate, differentiate, and organize themselvesinto functioning communities. While a society is often thought of ashaving a common or dominant culture, many multi-cultural societiesexist, and cultures may extend across national boundaries and regionsof the world. While the term society may at times refer to a wholecountry, community is usually a more geographically focused termreferring to settlements in specific locations.

Social impacts, as a rule, refer to changes in the lives of people wholive in destination communities, and are associated more with directcontact between residents and tourists. Cultural impacts refer tochanges in the arts, artifacts, customs, rituals and architecture of apeople, and are longer term changes which result more from tourismdevelopment. Because most tourism consequences involve changes toboth daily life and culture, the term sociocultural impacts is used torefer to changes to residents’ everyday experiences as well as to theirvalues, way of life, and intellectual and artistic products.

This section will describe the major sociocultural impacts of tourism.Examples from a range of different places will be used to demonstratehow tourism can be a positive and negative force in the lives of peoplewho live in, or near, a tourism destination. The section will alsoexamine the factors which influence these sociocultural impacts.

11.3.2 Major Sociocultural ImpactsTable 11.2 provides a summary of the most commonly describedpositive and negative sociocultural impacts of tourism. The table alsolinks these impacts to specific factors associated with tourism such asthe use of culture as a tourist attraction and changes in social roleswhich result from employment and economic opportunities provided bytourism. As may be seen in the table, the same factor can be associatedwith both positive and negative impacts.

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Changes inpeople's lives

11.3.3 Cultural ChangeBecause culture can play an important role in attracting tourists to adestination, tourism offers both economic incentives and social supportfor the maintenance and revitalization of various cultural activities.Tourism researchers have often provided anecdotal evidence of howtourist interest in culture has resulted in a strengthening of artistictraditions and traditional activities such as festivals and processions, andin a stronger sense of identity for the resident population in some societies.

The production of traditional arts and activities for tourists, however, hasoften resulted in changes in cultural products. For example, the demandsfor large quantities of arts and crafts and for cheaper prices tend to leadto mass production of goods of inferior quality or encourage importationof poor copies of cultural goods represented as authentic. Changes canalso appear cultural such as festivals, ceremonies, and dances throughthe addition of fees or charges, the use of timetables, and modificationsin the features of activities to make them more palatable to visitors. Forsome people, such changes are seen as destroying the authenticity andcultural meaning of the products or events. Tourist interest in culturalactivities can also result in invasions of residents’ privacy.

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The Sociocultural Impacts of Tourism

Source: Based on a review of the literature conducted by Pearce,Moscardo and Ross (1996).

Factor Associated with Tourism Positive Impact Negative Impact

The use of culture as a touristattraction

Increased support for traditionalcultures and displays of ethnic

identity. Revitalization oftraditional arts, festivals and

language.

Changes to traditional activitiesand arts to suit production for

tourists. Disruption and crowdingof traditional activities. Invasion

of privacy.

Direct contact between residentsand tourists

Breakdown of negativestereotypes. Increased social

opportunities.

Enhancement of negativestereotypes. Increased

commercialism. Introduction ofdiseases. Demonstration effects.

Changes in jobs and economicstructure resulting in changes in

social roles.

New economic and socialopportunities which decrease

social inequity.

Community conflict and tension.Increased social inequity.

Loss of language.

Development of tourist facilities Increased recreationalopportunities.

Loss of access to places andrecreational activities.

Increased population fromtourists and associated

development

Support for medical, educationaland other facilities which

enhance quality of life.

Crowding and congestion.Increased crime.

Table 11.2: Summary of Positive and Negative Sociocultural Impacts of Tourism

Strengtheningtraditions

Changes incultural productsand festivals

The Alarde festival in Spain’s Fuenterrabia is a commonly used exampleof how adopting a cultural activity to accommodate tourism can resultin a loss of value for the local community. The Alarde is a ritualrecreation of a seventeenth century battle which traditionally involvedmany residents in both its preparation and its enactment, serving as anopportunity for the community to celebrate its unity and history throughpageantry. As the Alarde became a popular tourist attraction, problemswith crowding began to occur. The solution proposed by the localgovernment was to hold the reenactment twice. In changing the eventfrom one held primarily for locals to one staged for monetary gain, amajor backlash ensued with many residents withdrawing their supportand refusing to participate (Greenwood, 1978).

International tourists and destination residents often have verydifferent cultural backgrounds, and it is not uncommon for residents todevelop negative stereotypes of tourists from their direct encounters.Visitors sometimes break cultural taboos and engage in behavior whichis seen by residents as offensive. In Thailand, for example, the Westernpractice of sunbathing on beaches is seen by Thai residents as bothunwise (because of the potential health risks) and immoral (because oftraditional taboos against body exposure). Such behavior sometimesgenerates hostility which can be expressed in crime against tourists.Negative stereotypes can arise even when visitors and hosts share asimilar cultural background.

Community Conflict

Not all social exchanges between tourists and visitors are negative.Younger residents of tourist destinations sometimes express the belief thattourism is a positive force in creating a less rigid society. This looseningof traditional restrictions is often associated with a phenomenon calledthe demonstration effect. For example, local, and usually younger,residents who are exposed often to Western tourists are likely to emulatetheir dress and habits. While this may seem to be a positive impact forthose residents who adopt the more relaxed standards, it can be seen as adangerous and negative trend to older or more traditional residents. Suchdifferences in perception can lead to conflict within communities.

Tourism can further contribute to community conflict indirectlythrough the creation of new job and economic opportunities. Althoughnew economic and employment options are given by residents as amajor positive impact from tourism, such opportunities are not alwaysevenly spread across communities. For example, tourism typically

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Alarde festival

Negativestereotypes

Differences inperceptions

Creation of jobsand opportunities

provides a large number of jobs for women in resort communities.While this work does provide women with improved financial andsocial prospects especially in developing areas, increased familytensions can occur as women struggle to maintain both their traditionalroles and new jobs, and as men suffer from decreased self-esteemassociated with a reduced role in maintaining and managing families.These types of situations have been studied in such places as Austria,Hawaii, Cyprus, Fiji, Panama, and Crete. It is important to note thatsuch tensions are not always permanent and can be resolved.

11.3.4 Other ImpactsOther sociocultural impacts of tourism, both positive and negative, include:

• Competition for tourist business.

• Increased economic inequity, where the people who are best placedto take advantage of tourism opportunities are those who alreadypossess the capacity to invest in this industry.

• Renewed interest in and opportunities for revival in the use of locallanguages.

• The adoption by local residents of other languages to easecommunication with visitors.

• The development of facilities for tourists such as sportingcomplexes, restaurants, and entertainment, as well as increasedsupport for medical, educational and other services.

• Increased income and an improved quality of life for host communities.

• Increases in population leading to problems with crowding,congestion and crime.

• Pressure to provide facilities for tourists leading to reducedopportunities for local residents.

11.3.5 Factors Influencing the SocioculturalImpacts of Tourism

Tourism can have both positive and negative impacts on the samesocial and cultural elements. In some instances an impact may beviewed or interpreted differently by different community members.One reason for this is that many sociocultural impacts are perceivedimpacts. The contribution of tourism to crowding, for example, may be

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The Sociocultural Impacts of Tourism

Workingwomen

Perceivedimpacts

seen as intolerable or nothing unusual to an Asian accustomed tocrowding as a fact of life. Improvements to quality of life and changesto culture require value judgments, which depend very much onindividual perceptions. Two sets of factors influence tourism’s socialand cultural impact; one refers to factors which influence howindividuals perceive tourism, while the other includes factors which arerelated to the size and nature of tourism development.

11.3.6 Factors Related to Individual Perceptions of Tourism

The following list summarizes basic patterns of relationships among thevarious factors that influence host perceptions of tourism and its impacts:

• In general, residents who are likely to benefit from tourism (eitherbecause they or family members are employed in tourism or becausethey believe tourism’s benefits outweigh its costs to thempersonally) are more likely to support tourism and report morepositive impacts from tourism.

• People with greater involvement in and knowledge of tourism tendto support the industry. People often consider community interestswhen thinking about tourism and will support it even in cases wherethey receive little personal benefit from the industry.

• Host community perceptions of tourism are influenced by the socialor cultural role assigned to tourists. For example, in the TrobriandIslands the only available category for tourists were soldiers(sodiya); in the Seychelles, tourists are seen as “tous riches” whichtranslates as all wealthy; and in the West Indies tourism is associatedwith servility and colonialism. The use of each of these rolesprovides its community with a set of attitudes which may be used tostereotype tourists.

• Communities which have had little contact with outsiders havegreater difficulty dealing with tourism than those with a longerhistory of dealing with other cultures.

• Media portrayals of tourism can influence host perceptions byproviding information which is used in the social construction ofreality and which influences public opinion. The mass media caninfluence people’s understandings of public affairs or issues byproviding individuals with knowledge about tourism, and bypresenting issues as conflict between different groups.

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In summary, it appears that several factors can influence residents’perceptions of tourism and its sociocultural impacts. If residents are wellinformed about tourism, have a positive cultural role for visitors, havemore experience with crosscultural contacts, and believe that tourismbenefits themselves or their community, then they are likely to bepositive about tourism. Residents are also more likely to be supportive oftourism if they feel they have some control over tourist developments.These three factors of equitable returns from tourism, knowledge abouttourism, and control over tourism have been seen as important principlesfor the planning and development of a sustainable tourism industry.

11.3.7 Factors Related to the Size and Nature of Tourism Development

The economic, sociocultural and environmental effects of tourism canalso be viewed as outcomes related to sequential stages or themagnitude of tourism development. For example, one developmentmodel relating to tourism presents tourist areas as evolving through thestages of exploration, involvement, development, consolidation,stagnation, and then either decline or rejuvenation, with social impactsemerging in the consolidation stage. Negative tourism impacts are not,however, an inevitable consequence of growth. For example, visitationlevels to Shark Bay, Australia, famous for its dolphins, have grownfrom 10,000 in 1984 to 150,000 in 1990, representing a change inresident-to-visitor ratios from 1:10 to 1:150 in six years. The size andrate of growth of tourism and the existence of serious environmentalimpact problems would clearly place the destination in an advancedstage of development. Yet residents are very positive about tourism andstrongly supportive of its continued growth (Dowling, 1993).

The apparent inconsistency in responses to tourism growth may be dueto the fact that impacts are related to the style of development as wellas, or instead of, the amount of development.

11.4 Strategies to Manage SocioculturalImpacts of Torusim

Sustainable tourism refers not only to the economic viability of theindustry and the biophysical resources on which much tourism is basedbut, further, applies to the sociocultural resource base. This sectionoutlines ideas and strategies for maintaining the sociocultural andhuman resource components for ecologically sustainable development.

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Strategies to Manage Sociocultural Impacts of Torusim

Magnitude ofdevelopment

Developmentstyle

Two key terms, culture shock and cultural arrogance, are important inunderstanding the obstacles to sustainable sociocultural tourism.

11.4.1 Obstacles to SocioculturalUnderstanding

Culture shock may be defined as the totality of reactions to new peopleand settings which result in ineffective behaviors. Culture shock may beexperienced by either visitors or their hosts. Tourists, for example, maybe confused by the language, signs and symbolism of the visited cultureand unable to communicate clearly, resulting in frustration andconfusion. Local people may also confront new behaviors and reactwhen tourists break local cultural rules. While some rule breaking byvisitors is unintentional and therefore likely to be forgiven by the hosts,if there is continued flaunting of local sensitivities, locals will see thisas a display of cultural arrogance. Cultural arrogance is defined as thecontinued practice of following one’s own cultural rules whiledisregarding the feelings and perspectives of the host community. Byway of illustration, tourists who invade the privacy of others bywatching sacred ceremonies and taking photographs when requestednot to do so are displaying cultural arrogance. Similarly, touristbehaviors which break known moral, religious or social codes such aswearing too little clothing or indulging in publicly intimate sexualbehavior are examples of continuing arrogance on the part of thevisitors. Cultural shock and cultural arrogance work against theprinciples of sustainable tourism in the sociocultural sphere. If leftunresolved, negative sociocultural impacts can destroy local goodwilland lead to instances of community backlash such as hostility, rudeness,poor service, and organized anti-industry protests.

11.4.2 Strategies to Manage Sociocultural Impacts

In attempting to limit culture shock and reduce cultural arrogance,different strategies are required for the various players in the culturecontact situation, including visitors, tourism professionals, and the hostcommunity at large. Key strategies for managing socioculturalexchange include:

• Pre-travel information. The need for tourists to prepare themselvesfor culture contact may be analogous to visitors who seek toundertake adventurous activities. No long distance cyclist or walker

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Confusion andfrustration

Disregarding hostcommunity'sperspective

would think of undertaking such behavior without prior training andthe necessary equipment. It is equally appropriate for culturallycommitted visitors, particularly those who seek high levels ofcultural immersion, to prepare themselves for travel to places wherethe culture is known to be markedly different from one’s own. Justas Paris is not all of France, neither is a Parisian similar to Frenchnatives outside of Paris. Commercial guide books, advice totravelers, pamphlets and even structured training manuals such asthe culture assimilators used by aid workers and diplomats are allappropriate information sources. The use of contemporarytechnologies such as the World Wide Web, CD-roms and in-flightvideos can be seen as further mechanisms for empowering visitorsand encouraging sensitive cultural behaviors.

• On-site interpretation. The provision of appealing and informativeinterpretive strategies is a major element in any overall program forreducing sociocultural impacts of tourism. Interpretation takes manyforms and may include signs, brochures, displays, visitor centers,guided walks, cassette tapes and posters. The critical importance ofthis strategy in the sociocultural sphere will be discussed in moredetail following this broad review of a range of strategies.

• Societal marketing practices. The community acceptance of thecultural images used in tourism promotion is an emerging issue inresponsible marketing. The voice of the host community can be heardin tourism marketing by involving panels of local people orcommunity representatives to examine the images being portrayed ofthe local culture or indigenous groups. Some tourism marketingembellishes cultural products or differences and reinforces stereotypesor images which are undesirable or taboo. Misleading cultural imagesmay result in visitor disappointment which ultimately amounts to poorbusiness practice as well as causing community offense.

• Facility design. In some cases, the structure and layout of facilitiesencourages inappropriate behavior. For example, places for visitorsto sit, walk, queue, get changed, and eat are all required to deal withlarge numbers at sites such as beaches, cathedrals, and monuments.Without adequate facilities for these activities, inappropriate actionswhich amount to cultural desecration may inevitably be committed.For several kinds of contact with indigenous groups, it has beenargued that neutral or buffer zones where both tourists and localscan congregate on neutral ground prevents visitors from awkwardlyconverging on the homes and private spaces of the local people.

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Strategies to Manage Sociocultural Impacts of Torusim

Culturalpreparation

Writteninformation

Examination ofcultural images

Tourist facilities

• A range of culture contact opportunities. Because visitors are likely tohave varying interests in the culture of the visited community, it isdesirable, within the limits of profitability for the local tourismbusinesses, for a range of culture contact opportunities to exist, so thatsome visitors may have relatively brief involvement while others canenjoy sustained contact. For example, in Australia’s Northern Territoryit is possible for visitors to experience Aboriginal culture by viewing astaged performance in a brief evening’s formal entertainment, or byparticipating in a guided tour of Aboriginal island communities, or byimmersing themselves in a food and hunting experience withAboriginal landowners. This diversity of opportunity is more likely toresult in an appropriate match between visitor expectation andexperience, and thus reduce sociocultural impacts.

• Evaluation skills. One of the difficulties of managing socioculturalimpacts lies in the monitoring and assessment of those impacts. Aclear imperative is for tourism professionals to develop research andassessment skills so they can know what impacts are occurring andthen, using this baseline level, assess change and the impact of theirstrategies over time. A tourism community attitudes survey may beone appropriate baseline measure but studies of income distribution,employment patterns and the success of cultural tourism businesseswould also be valuable components in a monitoring study.

• Explanation of tourism issues. There have been structuredgovernment-industry attempts to inform the public of tourism issues.These efforts address a need for tourism-related information in mostcommunities which is at once more comprehensive and lesssensational than media reports. Tourism, unlike many other industries,is particularly dependent on the use of community spaces andcommunity friendliness, so industry-government initiatives to explainthe value (both economic and socioenvironmental) are important.

• Community involvement in tourism planning. This strategy involves anextensive array of issues which are partly considered in Chapter 15. Thenotion that communities need to be or should be involved in tourismplanning (and tourism management) is not universally accepted. Insome newly developing tourism destinations or in authoritariansocieties, the concept of community involvement in tourism planning isnot well established. In a number of Western countries, it is seen as apivotal issue in the future of tourism. There are many levels ofcommunity involvement in tourism ranging from information

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Diversity ofopportunity

Assessment ofchange and

impact

Publicinformation

Communityinvolvement

exchange, to negotiation, to protest. The resulting involvement of thecommunity in actual tourism may vary from manipulation,consultation, partnerships, and in some cases ultimate citizen control.

• Developing conflict resolution skills. The involvement of thecommunity in tourism planning, as noted above, varies from limitedto intensive. In many situations some conflict over developmentissues is likely to occur. It is valuable for local community groups todevelop good negotiation and bargaining skills so that disputes forsustainable sociocultural resource issues in tourism can be managedrather than avoided or exaggerated.

11.5 The Relationship Between Culture and Tourism

The impact of tourism on the host culture and society discussed in theprevious section represents one type of relationship between tourism andculture. Culture and tourism interact at two other levels. First, thecultural patterns of a society influence its citizens and their ability anddesire to travel. Such influence may be described as culture shapingoutbound travel motivation. Second, culture serves as an attraction in thetourism system. Cultural activities, events, or products are the inspirationfor visitors and tourists to journey to the destination. This influence maybe described as culture shaping inbound travel motivation.

The term culture has a myriad of definitions. Rather than choosing onedefinition it is possible to depict three themes or emphases in the manydefinitional statements. These themes include:

• Culture as a value system relating to intellectual, spiritual andaesthetic development.

• Culture as summarizing the whole “way of life” of a people.

• Culture as the works or products of intellectual and artistic endeavors.

These three variants on the term culture are all useful in assessing thethree levels of the tourism-culture relationship. When culture as aninfluence on outbound tourist motivation or the impacts of tourism isconsidered, the first theme (value system) of the term is most useful.On the other hand, when tourism as an influence on inbound tourism isat issue, the second and third themes (way of life and cultural products)are most relevant.

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The Relationship Between Culture and Tourism

Negotiation andbargaining

11.5.1 Culture Shaping Outbound TourismAn illustration of culture’s impact on traveler behavior is found in thehistory of South Korean travelers. In 1983 the South Korean governmentallowed only Koreans aged 50 years or over to obtain a single-usepassport for travel purposes. This kind of political and governmentalrestriction on outbound travel is not uncommon, particularly amongdeveloping nations as well as in existing and former socialist regimes.These kinds of travel restrictions were accompanied, in the South Koreancase, by a joint economic and sociocultural justification. While the SouthKorean travel restrictions were progressively eased in the 1980s andfinally in 1987 all restrictions lifted, by late 1990 the Korean governmentembarked on an “anti-luxury” and “anti-consumption” campaign as away of discouraging conspicuous consumption. According to thegovernment, frugality or austerity was a traditional cultural value ofKorean people and outbound tourists were advised to travel modestly sothat social harmony within the country would be maintained and imagesof a nation divided into rich and poor effectively contained.

The South Korean example illustrates how national priorities, justified andplaced in the context of cultural behavior, create an agenda for travelers andmay effectively shape individual motives on how to and where to travel.Other powerful cultural influences shaping outbound travel motivationinclude travel for religious purposes, such as the culturally sanctioned andapproved pilgrimages to Mecca and the desire to travel to countries wherethere are long-established cultural ties (refer to Chapter 7).

As well as having an impact on outbound travel motivation,particularly in terms of where and how to travel, cultural factors willinfluence the particular activities in which travelers participate as wellas in how much such activities are valued. Golf, for example, is aleisure activity highly valued by wealthy Japanese and Korean travelersas it is an extremely expensive and high status sport in their homeculture. By way of contrast, golf for Australians is an enjoyable but notparticularly high status activity and the ready availability of golfcourses in Australia means there is little international outboundtourism built on the sport. Other examples of the ways in which cultureand nationality influence tourists include:

• Arab tourists, as contrasted to Europeans, are markedly less activeyet more socially gregarious in their vacation behavior due to theconcept of “raha,” which can be defined as absolute relaxation.

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South Koreanexample

Tourist's activitiesand their values

• Food service is a more important factor in choosing a vacation forJapanese or Chinese as opposed to Canadian or American tourists.Cultural differences generate a strong preference for their owncuisine among Chinese, French, Japanese, and Italian tourists whileNorth Americans are more willing to experiment with the food ofthe visited culture.

• Tour guides perceive various nationalities as having differentbehaviors. In particular, when asked to assess the characteristics ofChinese, French, Italian, American, and Japanese tourists the greatestdifferences were noted with the behaviors of interacting andsocializing with other tourists and taking photographs. In particularthe Chinese, Japanese and French tourists were seen as less gregarioustowards other cultural groups than the Italians and Americans.

• Japanese travelers were thought to travel in groups while the Frenchwere thought to be more individually oriented in their vacationbehavior, preferring to travel alone and to mix less both with theirown nationals and other cultures.

11.5.2 Culture Shaping Inbound TourismThe concept of culture as an attraction in the tourism system builds onthe second and third themes identified in the definition of culture,effectively a consideration of culture as the whole way of life of apeople and culture as the works or products of intellectual and artisticactivity. When culture is seen as the motivating force shaping tourism,the term cultural tourism is increasingly used and can be defined as:

the movement of persons to cultural attractions away from their normalplace of residence with the intention to gather new information andexperience to satisfy their cultural needs (Richards, 1996, p. 24).

Increasingly, tourism experiences are no longer closely linked to welldefined social scales of value and prestige. All places and items of culturalimport are potentially rewarding topics and factors for “consumption” aspeople seek to learn about themselves and the host community.Accordingly, the culture of a society is not simply its art and architecturebut extends to its everyday life, from shopping malls to sporting events.

There are abundant examples of the power of cultural icons or majorsymbols in attracting tourists. The British Tourist Authority estimates thatnearly 7 million people visit the British Museum while the Tower ofLondon, the United Kingdom’s most visited historic property, receives 2.3

245

The Relationship Between Culture and Tourism

Popular culture

million visits. Even these substantial figures seem limited when comparedwith Europe’s most visited cultural attraction, France’s Pompidou Centre,with over 8 million visitors annually. At the broad and popular culturelevel, Disney World Florida with over 12 million visitors annually isarguably the greatest cultural icon in the modern tourism world.

A transnational European study on cultural tourism found thatmuseums (59 percent) and historic monuments (56 percent) were thetwo most popular categories of cultural tourism attractions, whileheritage centers (37 percent), art galleries (24 percent) and theperforming arts (22 percent) received moderate levels of interest. Thestudy also found that there are two categories of cultural tourists:specific and general. Specific cultural tourists travel specifically tovisit the cultural attraction, rating it as important or very important intheir overall choice of the destination, while general cultural touristshave a more incidental or passing interest in cultural attractions. Basedon this study, cultural tourism is growing at about or slightly less thanthe overall rate of tourism growth.

Urban Tourism

It was noted earlier that culture as a motivator for tourist behavior andas a force shaping inbound tourism is also concerned with the ways oflife of a community and society. Two components of this broader andusually more “popular” view of culture include urban tourism andethnic tourism. Urban tourism focuses on the mix of attractions whichmotivate travel to major population centers and while specific culturalicons are a part of this mix, qualities such as atmosphere, layout, andthe friendliness of local residents are equally important culturalfeatures of destination image.

New York City can be seen as an example of urban tourism. Its culturaltourism base includes an extensive number and diversity of restaurants,museums, theaters, concert halls, visual arts, ethnic neighborhoods, andhistoric sites. In 1990 it was estimated that 25 million visitors, includingday trippers, came to the city, of which 5.6 million were internationalvisitors. The latter figure represents 14.4 percent or one seventh of allinternational visitors to the nation. The competitiveness of urbantourism destinations is reflected by the promotional efforts among citiesfor special events, festivals, and meetings and conventions. Culture andhistory are being employed as tourist attractions, but there is concernregarding the ways in which these reinterpretations of the past mightdistort or suppress community and visitor understanding.

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Cultural icons

Specific andgeneral cultural

tourists

New York

Ethnic Tourism

Ethnic tourism, a second basic component of cultural importance,refers to tourism focused on a group’s traditions and lifestyle and isused principally to highlight tourism in developing communities orspecialized enclaves. Ethnic tourism is sometimes described asmotivated by tourists’ desires to see “the other” (van den Berghe,1993). This motivation is consistent with the need to learn and tosatisfy curiosity motives as depicted in the more generic definition ofcultural tourism. Additionally, ethnic tourism may embrace motives ofsocial comparison or even the development of relationships as peopleseek to understand their own lives in the context of how other groupsand individuals organize human existence.

Ethnic tourism may take the form of viewing local festivals, of attendingspecial ceremonies such as fire-walking, burials, weddings or initiations ormore simply watching local activities such as fishing or handicraftmanufacture. At times ethnic tourism may include eating with localfamilies, touring villages, farms stays or traveling with communitymembers on special walks or treks. The high level of contact between localsand visitors in ethnic tourism may produce a range of positive and negativesociocultural impacts which will be described in the following section.

11.6 Interpretation for Sustainable TourismAccording to the Society for Interpreting Britain’s Heritage,interpretation is the process of explaining to people the significance ofthe place or object they have come to see, so that they enjoy their visitmore, understand their heritage and environment better, and develop amore caring attitude towards conservation.

At its simplest, interpretation can be seen as any activity which seeks togive tourists information about the place they are visiting. Interpretationis most commonly used to refer to things such as guided walks, signs anddisplays in museums, art galleries, zoos, historic buildings and nationalparks, and guide books or information sheets or leaflets.

Interpretation can contribute to sustainable development by improvingthe quality of the experience for the visitor, by changing visitorbehavior to avoid negative sociocultural and environmental impactsand by alleviating congestion, in the following ways:

• Educating tourists about the nature of the host region and cultureand informing them of the consequences of their behavior, thusencouraging them to behave in an appropriate manner.

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Interpretation for Sustainable Tourism

Developingcommunities'traditions andlifestyles

Contribution oftouristinformation

• Enhancing the quality of visitor experiences by adding value totourism products.

• Developing tourist support for both cultural and environmentalconservation.

• Relieving pressure on sites by controlling access, by distributingvisitors more evenly throughout an area, by encouraging them tovisit less crowded places and by providing them with alternativeexperiences which can act as substitutes for visiting sensitive areas.

11.6.1 Principles for Enhancing the Effectiveness of Interpretation

If interpretation is to make a contribution to sustainable tourism it mustbe effective. It is valuable, therefore, to consider the followingprinciples for enhancing interpretive effectiveness:

• Interpreters must make a personal link with the visitor. Theinterpretation must be relevant or important to them. Providingdirect contact or experience can be useful in establishing such a link.Credible and empathetic communicators can also create a personalconnection to the visitor.

• Interpreters should present a whole rather than a part. The use of storiesor themes can assist in providing visitors with a complete picture. Todevelop a sense of place interpreters should present information on thephysical setting, associated activities and significance of a place.

• Interpreters must provide variety in interpretive experiences. Varietycan include the use of different media, varied levels of requiredphysical activity and the use of multisensory techniques.

A basic principle is that “any interpretation that does not somehowrelate what is being displayed or described to something within thepersonality or experience of the visitor will be sterile” (Tilden, 1977,p. 9). In short, the interpretation of what is being shown must fit withthe visitor’s own frame of references. An example of how interpretationcan make connections to experiences familiar to the visitors isdemonstrated in the following exhibit label in a Texas museum:

“Prehistoric mammoths were here in Texas just a few thousand yearsago. They roamed the plains in great herds . . . The chances are that theybrowsed right where you are standing now.” Where you are standingnow. With that statement the mammoths are not far away creatures oftime or space but right under your feet (Tilden, 1977, pp. 13-14).

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Connections withthe familiar

Anecdotes, analogies and metaphors are also methods for makingpersonal connections. Allowing visitors to interact by asking questions,by touching and using all their senses and by being able to pursue theirown interests can also personalize an interpretive event.

Presenting a whole story, rather than a series of isolated pieces ofinformation, is the second principle for effective interpretation.Storytelling is a traditional method of teaching in many cultures and thereis clear evidence to support the value of a story in the education of visitors.

Providing variety in experiences is also a valuable principle ininterpretation. Interpretive experiences can be varied along a numberof dimensions including the degree of physical activity required (forexample, listening to a storyteller vs. participating in a dance); thenumber of visitors involved in an activity (for example, sitting alone ina prison cell, as compared to being part of a large theater audience); theamount of technology involved in the interpretation (for example,writing your own experience of a building on a piece of paper for avisitor experience notice board vs. using an interactive computer todesign buildings); the number of senses used (touching and smelling aswell as looking); and the interpretive media used (signs, displays,audiovisuals and computers).

Education fulfills a crucial role in sustainable tourism development.Interpretation has a major role to play in educating local populations,tourism staff and tourists, and thus is a central component of any newapproach to creating sustainable tourism.

SUMMARY

At the start of this chapter it was observed that tourists have not alwaysbeen welcomed by their host communities. In reviewing the meaningand value of culture for tourism, in assessing the sociocultural impactsof tourism, and in reviewing strategies for managing socioculturalimpacts (including interpretation), a strong positive message for thetourism-host community relationship emerges. Tourism does notinevitably cause guest-host conflict. With planning, informationprovision, and superior management, tourism can be a positive forcefor the preservation and revitalization of cultures. Many of thestrategies and tactics recommended for tourists, hosts, and tourismplanners to work towards sustainable tourism depend on developingeffective communication pathways. Tourists need information tobehave in sensitive and appropriate ways, they need a sound knowledge

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Summary

Storytelling

Variety ofexperiences

Education

of host societies to select their travel wisely, and they need on-sitecommunication to enhance their experiences. Hosts need informationand can benefit from improving educational and communicationtechnologies. Host communities need to understand tourism as aphenomenon, its benefits and costs, and learn from other societies howto ameliorate negative impacts. Tourism operators need to present theirproducts so that quality experiences are both promised and offered,resulting in profitability through repeat visits and personal marketing.As the newer communication technologies become more widelyavailable and as groups learn to use existing communication meansmore effectively, there is a strong promise that tourists and their hostsmay interact harmoniously.


1. Is tourism changing cultures or merely exploiting them? Discusswith reference to the impacts of tourism in both developed anddeveloping nations.

2. If culture is defined as the whole way of life of a group, whatpopular or general cultural factors might be used more to attractvisitors to Western cities?

3. Explain how a skilled guide using good interpretive practices couldprovide a quality tourism experience of an ethnic community in arural setting.

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Chapter 12

Sustainable Tourism and the Environment

Learning objectives

• To understand the importance of the physical environment as a tourist

attraction.

• To understand the importance of environmental quality for the success of

tourism.

• To be able to list the different positive and negative environmental impacts

of tourism.

• To understand the factors that contribute to environmental impacts.

• To be able to describe strategies that tourism planners and managers

can use to alleviate negative environmental impacts.

• To be able to describe the major elements of sustainable tourism.


carrying capacity

human-environment interaction categories

LAC model

site hardening

sustainable development

visitor management systems

zoning

12.1 IntroductionThe concept of sustainability arose from the recognition that the earth’slimited resources could not indefinitely support the population andindustrial growth associated with existing approaches to development,and that existing development approaches were not working to reducepoverty or to increase standards of living across all countries.

In Chapter 11 the principles and characteristics of sustainable tourismwere described and the relationship between tourism and socioculturalresources was explored. This chapter will focus on the physicalenvironment and its relationship to tourism. The role that the physicalenvironment plays in tourism will be reviewed and the impacts thattourism can have on the physical environment will be described.Strategies and practices to effectively manage the tourism-environmentrelationship will be discussed, using examples of successful approachesto ensure that tourism is sustainable. Three case studies from variousparts of the world will be used to demonstrate the importance of thephysical environment for tourism to the area and as examples of theways in which tourism can impact physical environments and thetechniques available to manage these impacts. Finally, alternativeapproaches to tourism will be explored and evaluated.

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12Sustainable Tourism

and the Environment

Recognizing theearth's limitedresources

Physicalenvironmentalfocus

12.2 Sustainable DevelopmentIn recent years, sustainable development has been put forward as a newapproach to the way communities think about standards of living,social equity, and the maintenance of resources. The three mainprinciples of sustainability are:

• Ecological sustainability ensures that development is compatiblewith the maintenance of essential ecological processes, biologicaldiversity and biological resources.

• Social and cultural sustainability ensures that developmentincreases people’s control over their lives, is compatible with theculture and values of people affected by it, and maintains andstrengthens community identity.

• Economic sustainability ensures that development is economicallyefficient and that resources are managed so that they can supportfuture generations (McIntyre, 1993, p. 10).

In its early history the focus of sustainable development was onmanufacturing and extractive industries, which were seen as majorsources of pollution. More recently, tourism has been targeted forconsideration due to concerns about its negative consequences forcommunities and environments. Table 12.1 reviews the goals andcharacteristics of sustainable tourism.

12.3 The Physical Environment.A Core Component of Tourism

In tourism it is usual to distinguish between the physical environment(the land, air, water, vegetation, wildlife and the creations of people)and the sociocultural environment (the people and the social,economic, cultural and political forces that influence their lives). Thephysical environment is an important tourism resource, and since thetime of the ancient Romans and Greeks travelers have been motivatedby a desire to experience various aspects of the physical environment.Historical examples include holidays at Mediterranean coastal centersand visits to natural attractions and sites of historical and architecturalinterest, the observation of scenery and the experience of architectureand historic sites during the Grand Tours of the Renaissance, and withthe Industrial Revolution and the beginning of modern tourism, visitsto seaside and natural environments for restoration and recuperation.

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Chapter 12: Sustainable Tourism and the Environment

The principles ofsustainability

Historicalenvironmental

tourism

255

The Physical Environment. A Core Component of Tourism

Tourist products and the experiences sought by visitors differ widely interms of how they are influenced by the physical environment. Inunderstanding the role of the physical environment in tourism, it isuseful to classify human-environment interaction into three categories:

• In the first, the environment serves merely as a setting for an activityand is not directly relevant to the activity. Although not the central

GOALS

To improve the quality of life of host communities

To preserve intergenerational and intragenerational equity

To protect the quality of the environment by maintaining biological diversity andecological systems

To ensure the cultural integrity and social cohesion of communities

To provide a high quality experience for visitors

CHARACTERISTICS

Tourism which is concerned with the quality of experiences

Tourism which has social equity and community involvement and is mindful ofresidents' needs

Tourism which employs locals and has local participation in planning anddecision making

Tourism which operates within the limits of the resource - this includesminimization of impacts and use of energy and the use of effective wastemanagement and recycling techniques

Tourism which maintains the full range of recreational, educational and culturalopportunities within and across generations

Tourism which is based upon activities or designs which reflect and respect thecharacter of a region

Tourism which allows the guest to gain an understanding of the region visitedand which encourages guests to be concerned about, and protective of, the hostcommunity and environment

Tourism which does not compromise the capacity of other industries or activitiesto be sustainable

Tourism which is integrated into local, regional and national plans.

Table 12.1: Goals and Characteristics of Sustainable Tourism

Source: Derived from ESD Working Group (1991), Conlin and Baum (1994)and Owen, Witt and Gammon (1993).

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focus of the activity, the physical environment can influence theactivity. For example, although the physical setting of casinos is not ofmuch importance to the activity of gambling, the design of casinos is,by centering on features which will encourage patrons to stay and togamble. Further, even though the physical environment may not be thefocus of the tourist’s attention, the tourist exerts an influence on theenvironment through his use of resources and the creation of waste.

• The second category is where the qualities of the environment exerta general effect on the activity. Activities such as shopping, relaxing,playing tennis or golf, or dining, could take place in a number oflocations, but are particularly enjoyable in the presence of a pleasantand/or exotic backdrop. Likewise, the environmental quality of adestination is critical to its success and destinations which areperceived to be polluted or congested will find it difficult tomaintain tourism. Declines in European tourism after the Chernobylnuclear accident and in Alaskan visitor numbers after the ExxonValdez oil spill are examples of this phenomenon (Fridgen, 1991).

• In the third type of interaction the physical environment is the focusof the activity. A substantial proportion of tourism falls into thiscategory. Many tourists specifically travel to experience naturalenvironments and heritage areas and to engage in activities such aswalking, viewing wildlife, and touring scenic areas.

12.4 The Impacts of Tourism on the Physical Environment

12.4.1 Negative ImpactsThe negative environmental impacts of tourism have been studiedextensively. Table 12.2 indicates tourism’s potential environmentalimpacts on protected areas.

Environmental Damage

The most obvious negative environmental impacts have been thoseassociated with loss of, or damage to, physical environments. TheMediterranean has often been used as an example of how excessive andintensive hotel development can destroy the natural environment, crowdout beach views and result in the loss of historic sites. According to theUnited Nations Environment Program nearly three-quarters of the sanddunes on the Mediterranean coast between Gibraltar and Sicily have

Environmentas setting

Environment aspleasant backdrop

Environmentas focus

Example of theMediterranean

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The Impacts of Tourism on the Physical Environment

Table 12.2: Potential Environmental Effects of Tourism in Protected Areas:The Types of Negative Visitor Impacts That Must be Controlled

Source: World Tourism Organization and United Nations Environment Program,Guidelines: Development of National Parks and Protected Areas for Tourism (Madrid:WTO/UNEP, 1992), p. 14, as adapted from Thorsell, J.W., Protected Areas in East Africa:

A Training Manual (Tanzania: College of African Wildlife Management, 1984).

Factor Involved Impact on Natural Quality Comment

Overcrowding Environmental stress, animals showchanges in behavior

Irritation, reduction in quality, need forcapacity limits or better regulation

Overdevelopment Development of rural slums, excessivemanmade structures

Unsightly urban-like development

Recreation:PowerboatsFishingFoot safaris

Disturbance of wildlifeNoneDisturbance of wildlife

Vulnerability during nesting seasons,noise pollutionCompetition with natural predatorsOveruse and trail erosion

Pollution:Noise (radios, etc.)LitterVandalism destruction

Disturbance of natural soundsImpairment of natural scene,habituation of wildlife to garbageMutilation and facility damage

Irritation to wildlife and other visitorsAesthetic and health hazardRemoval of natural features

Feeding of wildlife Behavioral changes–danger to tourists Removal of habituated animals

Vehicles:SpeedingOff-road driving

Wildlife mortalitySoil and vegetation damage

Ecological changes, dustDisturbance to wildlife

Miscellaneous:Souvenir collectionFirewoodRoads and excavationsArtificial water holes and salt provisionIntroduction of exotic plants andanimals

Removal of natural attractions,disruptions of natural processesSmall wildlife mortality andhabitat destructionHabitat loss, drainageUnnatural wildlife concentrations,vegetation damageCompetition with wild species

Shells, coral, horns, trophies, rareplantsInterference with natural energy flowAesthetic impactsReplacement of soil requiredPublic confusion

disappeared either as a result of having resorts built on them or througherosion resulting from land clearing for development (United NationsEnvironment Programme, 1992). In Kenya the demand for touristresorts and hotels has resulted in the clearing of mangroves for buildingmaterials. The development of tourist facilities has also caused damageto coral reefs which have been blasted to provide further constructionmaterial (Visser & Njuguna, 1992). Many places which become sitesfor tourist buildings are the homes of threatened or endangered species.

Pollution

Pollution is another major negative impact of tourism. Transportation isa major source of both air and noise pollution. It has been estimated thatapproximately 2 million tons of aviation fuel are burned each yearproducing 550 million tons of greenhouse gases and 3.5 million tons ofthe chemicals responsible for acid rain (UNEP, 1992). Water pollution

Problemsin Kenya

Different typesof pollution

from sewage and the use of pesticides, herbicides and fertilizers in resortlandscaping are also major problems for many tourist destinations. Forexample, in the Caribbean untreated sewage results in ocean recreationalareas with high bacterial levels. Tourist waste can also cause problemswith overloaded waste disposal systems and litter, such as in England’sNew Forest where thousands of empty bottles are collected each year.Many of these negative impacts are interrelated and result from thecumulative and long term impacts of tourist development, as can be seenin the experience of a ski resort in New Mexico, in the United States,where poor sewage treatment resulted in water pollution that changed theinsect and fish populations throughout the area and reduced the flow ofwater to humans and wildlife that lived in the area. Tropical islands thatare prime tourist destinations and possess fragile environments areparticularly vulnerable to a range of negative environmental impactsfrom tourism, such as those that have affected the Maldives includingbeach erosion resulting from the construction of resorts, anchor andtrampling damage to coral reefs, and depletion of coral, shell and marineanimal stocks from collecting for tourist souvenirs.

The pressure of increased numbers of people (living even temporarilyin an area) on water, food and energy resources can be severe. It hasbeen estimated that the average daily water consumption of tourists,including the water needs of golf courses, hotel gardens and swimmingpools, is ten times the level seen as necessary for survival. Lobster andother marine animal populations are under threat in areas of theCaribbean because of the demand for seafood for tourists. In theHimalayas serious erosion has been the consequence of extensive treefelling to provide fuel for tourist camps and many species suffer fromexploitation for use as tourist souvenirs.

Tourist Activities

Many tourist activities such as boating, diving, walking and skiing canhave negative impacts on the physical environment. The pressure ofnumbers can result in the erosion of paths and the wearing away ofhistoric buildings. Anchor damage to marine environments can beextensive and long lasting. The feeding of wildlife by tourists can leadto declining animal health and aggressive behavior which in turn canthreaten tourists and residents. Visitors can also introduce non-nativespecies which disrupt existing ecosystems. The mere presence ofvisitors can be harmful in sensitive environments. The tomb ofTutankhamen in Egypt has suffered severe damage from fungal growth

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Destinationvulnerability

Effects oftourist density

Damage causedby activities

which results from the moisture, dust and bacteria brought into thetomb by its 5,000 daily visitors. As in many tourism situations thedamage is unintentional and not directly a result of the actions of anysingle individual tourist.

12.4.2 Positive ImpactsTourism can also work towards the restoration, conservation andprotection of physical environments. Tourism can provide theincentives and the income necessary to restore and rejuvenate historicbuildings and precincts and to create and maintain national parks andother conservation areas. The non-consumptive use of wildlife fortourism can replace other more threatening practices. In Canada, forexample, a New Brunswick tourism group takes tourists to view andphotograph the Labrador harp seals once slaughtered for their coats.Tourism can also be a force for the development of better infrastructurewhich can in turn improve environmental quality. The construction ofwaste water treatment plants in Cyprus provides an example wherepressure and revenue from tourism has resulted in reduced waterpollution and the provision of water for agriculture. Tourism’s positiveenvironmental impacts are summarized below:

• Development of tourist attractions. Conservation, restoration andprotection of natural and built heritage can result from the perceivedneed to develop attractions for tourists and from the revenueprovided by tourism.

• Development of infrastructure. Improvements to roads, water supplyand treatment and waste management systems can result fromincreased revenue from tourism. Such improvements may decreasepollution and improve environmental quality.

12.4.3 Factors Which Influence Tourism ImpactsThere are several factors which influence whether or not tourism willresult in negative environmental impacts and the severity of the impacts.

• The amount or volume of tourism (the number of actual tourists andthe extent of development put in place to support tourism) and theconcentration of tourism use, both at particular sites and atparticular times. The more visitors who walk along a trail or througha church the more erosion that will occur, and the more visitors who

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The Impacts of Tourism on the Physical Environment

Conservationand protection

Infrastructure

stay in a place the more waste there will be to manage. Developingways to measure volume-related impacts presents difficult issues,however. Impacts usually depend on when and where the tourism isconcentrated (the second factor). For example, a major disturbanceto colonies of herons in New Jersey was only detected when visitorsapproached the bird colonies after hatching and/or when visitorsactually walked through the colonies, whereas viewing from adistance and/or at other times in the breeding cycle had nodiscernible impacts on the herons.

• The type of use or tourist activity that takes place at a destination.The example above of research into tourists and their effects on birdcolonies also found that the type of tourist activity was directlyrelated to impacts. Clearly, viewing a colony from a distance willhave fewer harmful impacts than walking through a nesting site.Other variations in tourist behavior are less obvious. For example,people moving through an area at a constant speed or pace will oftendisturb the birds less than if people stop or slow their pace, becausethe birds’ attention is more readily drawn to changes in movement.

• The type of environment being impacted. Environments differ interms of their sensitivity and fragility. Antarctica, for example, is anespecially fragile environment because of its harsh climate andisolation. Coral atolls are more fragile than continental islands asthey are more easily eroded and exposed to the elements. Venice ismore sensitive to tourist pressures than other European historiccities because its restrictions on pedestrian traffic results inwaterways that are of necessity heavily used.

• The management and planning of tourism. The environmentalimpacts of tourism are closely related to the types of planning andmanagement associated with tourism. Many of the negative impactsof tourism have occurred in areas where there has been little controland either poor or no management of tourism development.

12.5 Strategies for Managing ImpactsBecause many of tourism’s negative environmental impacts haveoccurred in places with little or no planning or management,sustainable tourism development employs planning and managementstrategies to alleviate negative tourism effects and encourage positiveimpacts. Table 12.3 provides an overview of these strategies.

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Volume

Activities

Different sites

Planning

12.5.1 Planning StrategiesThe development of local, regional, and national plans whichincorporate or focus on tourism is a first and major step towardssustainable development. With regard to environmental impacts, suchplans should consider the following questions or issues:

Carrying Capacity

• What sites or areas are most suitable for tourist development?

• How many visitors should there be in any place?

• What sorts of tourist activity or development are suitable?

• What infrastructure is necessary for tourism?

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Strategies for Managing Impacts

Policy/Planning Development plans which include tourism and which set out zones orsites for tourist use, determine rights of access to areas, and considerwhat sort of activities are suitable for the area.Develop and enforce regulations to control aspects of development andtourist activity.Require environmental impact assessments and monitoring for touristdevelopments.Use economic mechanisms such as subsidies to encourage moresustainable practices and user pays to control use and provide incomefor conservation and rehabilitation of the environment.

Development/Construction

Consider choice of sites and site design carefully to ensure minimalimpact.Use minimal impact construction techniques.Use native species for landscaping and appropriate architectural styles.

Management ofResources

Conduct environmental audits.Develop and use recycling, waste minimization and energy efficiencyprograms.Use environmentally friendly products and technologies.

Management ofVisitors

Design systems which control visitor flows.Use interpretation/education to encourage sustainable behavior.

Adapting theEnvironment

Harden sites for protection.Provide facilities which influence visitor activities.

Marketing andPromotion

Consider tourism concepts and products better suited to the environment.Provide accurate information in advertising to ensure that visitors haveappropriate expectations.

Education Use effective interpretation services to encourage visitors to engage inmore sustainable behaviors.Provide environmental education for tourism personnel.Develop codes of conduct for tourist, staff, operators and other tourismsectors.

Research andMonitoring

Support research which seeks to improve understanding of thetourism-environment relationship.Evaluate the effectiveness of any programs and activities conducted.Monitor environmental quality.

of Facilities

Table 12.3: An Overview of Major Strategies for Managing Tourism Impacts

Setting anumeral limit

• Are there resource limitations which are relevant to tourismdevelopment?

• What mechanisms are needed to control tourist operators and tourists?

The first three questions are all concerned with limits to tourism or aconcept referred to as carrying capacity. Carrying capacity can bedefined as “the maximum use of any site without causing negative effectson the resources, reducing visitor satisfaction, or adverse impact upon thesociety, economy and culture of the area” (McIntyre, 1993, p. 23). Thereare three major components involved in carrying capacity:

• Ecological/biophysical constraints, or how many people can visit anarea before the water and air become polluted, erosion begins tooccur and wildlife is disturbed.

• Sociocultural constraints, or the number of visitors that areacceptable to the local residents.

• Psychological/perceptual constraints, the number of people that canvisit an area without feeling crowded or concerned about their impacts.

Limits to Acceptable Change (LAC)

It is difficult to determine carrying capacity in terms of the number ofvisitors that a site can accommodate before there are negative impacts.As noted earlier negative impacts are not caused by numbers alone, butby the result of interaction between numbers of visitors, what they do,when they visit, and the type of management systems which are in place.

An alternative to the concept of carrying capacity is the Limits toAcceptable Change or LAC model. The LAC model moves theplanning focus away from attempts to set a numerical limit on tourismand towards describing a set of environmental conditions which areseen to be desirable. The process involves using local residents’perspectives and scientific knowledge to design a set of environmentalconditions which are appropriate for a place. Planners and managerscan then consider any tourism activities or developments in terms oftheir impact on the conditions which have been chosen. For example, itmay be possible to minimize the impacts of large numbers of visitors toa rain forest site by putting in place steps and boardwalks. In the LACapproach this would be an acceptable level of tourism use if residentsand managers agreed that this management action was appropriate. If,however, residents and managers wished to preserve the area forwilderness experiences where little evidence of humans existed, thenhardening the site would be seen as an unacceptable change.

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Desirableconditions

Zoning

The decisions about the type and quantity of tourism which result from aprocess like that described in the LAC model are often incorporated intoplans through the identification of zones. Zoning refers to a processwhere planners connect types of development or activity to specific areas.Table 12.4 provides an example of zones proposed to manage visitors tothe Galapagos National Park. Zoning approaches usually include severalzones that range from those with no access or very limited access forvisitors (the Pristine/scientific zone in Table 12.4) to those where touristfacilities are allowed (the Intensive/recreational zone). A common featureof zoning plans is the clustering of tourist developments into particularareas where impacts can be dealt with more easily.

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1. Pristine/scientific zone

For areas which are remote, uninhabited and which have relativelyundisturbed ecosystems. Visits would be very limited and only allowed witha permit (required in advance) and with a specially trained guide.

2. Semiprimitive zone

For relatively remote areas where nonmotorized transport is required. Thereare limits to visitor numbers and entry requires a permit and a guide.

3. Extensive/natural zone

For sites of natural and cultural interest where group sizes are limited butno permit or guide is required.

4. Intensive/natural zone

For major sites of natural and cultural interest where moderate levels of useare permitted.

5. Intensive/recreational zone

For areas near established communities where tourist facilities andstructures can be built. This zone allows for large concentrations of visitors.

6. Rural zone

For areas adjacent to the park where privately run tourist activities could bedeveloped.

Source: Based on Wallace 1993.

Table 12.4: Zones for Tourism Management:An Example of Zones Prepared for the Galapagos National Park

Developingspecified areas

Permits and Licenses

There are several other planning and policy mechanisms which areoften associated with zoning. These include having permit or licensesystems, charges or fees, and environmental quality standards. Permitsystems require tourist operators or tourists to apply for permits toconduct certain activities within an area. Often the application processrequires evidence that the proposed activity will not have negativeenvironmental impacts and in many instances there are limits to thenumber of permits which can be issued. These permits can take theform of contractual obligations, with the operator or tourist agreeing tomany conditions in order to be issued with a permit. A tour operator,for example, may be required to have a permit to take visitors to a sitein a national park. Such a permit will usually specify the maximumnumber of visitors the operator may take to the site, the type of vehicleto be used, the activities that are allowed and the actual physical areasthat may be accessed. Permits can sometimes come with a fee and suchrevenue can be set aside for the provision of facilities for tourist use aswell as for conservation, restoration and maintenance programs. Suchprograms can also be funded by other charges such as bed or guesttaxes and entry charges.

Environmental Standards

Plans can also include sets of environmental quality standards whichare supported by regulations or legislation to control various aspects oftourism. These standards can include maximum heights for buildings,restrictions on the use of construction materials and controls overarchitectural style and placement of buildings. In the Republic ofMauritius, for example, development of a resort in a coastal area isallowed only if it complies with requirements which include:

• A restriction on resort size to a maximum of 200 rooms.

• A restriction on the maximum height of buildings to 12 meters.

• A requirement that hotels with over 75 rooms must install water andsewage treatment plants.

• A recommendation that regional architectural styles be incorporatedin the design of facilities.

• A requirement that facilities have at least 60 percent of their areagiven to landscaping.

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Enforcing controlwith permits

Fees as funds

Regulationsor legislation

Increasingly, the preparation of an environmental impact assessment isalso included in the requirements for building tourist facilities. Such aprocess involves investigating and detailing the likely environmentaleffects of a proposed tourist development. An important part of theprocess is the adaptation of the proposal to minimize impacts whichthe assessment identifies.

Design Standards

There are numerous ways in which proposed tourist developments can beconstructed to minimize negative and enhance positive environmentalimpacts. The English Tourist Board (ETB) offers the following suggestionsfor tourist developers when planning and constructing facilities:

• Use local styles of architecture and where appropriate regionalbuilding materials.

• Incorporate features of the site into the design. Use existingvegetation and land forms as screens and features.

• Think about design features which will minimize energy and otherresource requirements. An example of how this can be done is theuse of vegetation to provide shade and minimize air conditioningrequirements.

• Use construction techniques which have minimal impact on theenvironment.

• Use recycled materials wherever possible.

• Use native species in landscaping and encourage the use of thesetting by wildlife (English Tourist Board, 1991).

Table 12.5 contains a list of more specific suggestions to minimize theimpact of tourist structures.

An example of the use of the ETB principles can be found in thedevelopment of a Center Parc holiday village in Sherwood Forest inEngland. This development blended roads and facilities into thelandscape to minimize visual impact and used existing pine trees asvisual screens. The developers also created a lake and stream systemwhich was stocked with plants from nearby areas and planted 500,000new trees and bushes to revegetate the area. This new vegetationprovides food and shelter for wildlife and the operators have suppliednesting boxes to encourage birds to use the area.

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Constructingfacilities

England'sSherwood Forest

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Existing tourist operations can also improve their sustainability byconducting environmental audits and using this information to createwaste and energy management systems. Environmental audits aresimilar to environmental impacts assessments in that they areconcerned with identifying a variety of environmental impactsassociated with an operation. In particular, environmental auditsusually concentrate on the products or resources used in an operationand the waste produced. Examples of mechanisms to minimizeresource use and waste production are listed in Table 12.6.

Visitor Management Systems

Another important set of strategies for managing tourism impacts isthat concerned with the management of visitors. Visitor managementsystems are designed to control the numbers and flow of visitors aswell as their activities. Visitor flow systems operate by restrictingvisitor access to certain areas, by establishing pathways through areas,and by controlling the times of visits. The two major goals of such flowcontrol mechanisms are to keep visitors away from sensitive sites and

• Avoid major trees and natural features when deciding on sites for structures.

• Consider water flow through a site when placing structures and divert waterfrom roads and paths to avoid erosion.

• Do not intensively clear vegetation from lakes, beaches, streams or rivers.

• Space buildings to allow wildlife to move through the area and for belts ofnatural vegetation to be established.

• Restrict the use of vehicles both during construction and as a feature of thefinished facilities.

• Use boardwalks both during construction and for pedestrian traffic.

• Pipes and cables can be placed under boardwalks to minimize excavation.

• Use design features to control the intrusion of insects and rodents.

• Use landscape features to enhance natural ventilation.

• Include facilities for recycling and waste treatment.

Source: Based on Andersen 1993.

Table 12.5: Suggestions for Minimizing Negative EnvironmentalImpacts When Constructing Tourist Facilities

Audits

Controllingvisitor flow

to spread visitor use either spatially or temporally or both. At Seal BayConservation Park in South Australia, for example, visitors are onlyallowed onto the beach where sea lions congregate with a guide and insmall groups. Tour groups must book in advance and the time of arrivalof these tours is spread throughout the day. There are also boardwalkswhich keep visitors from damaging the dunes and beach areas.

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Table 12.6: Mechanisms for Minimizing Resource Use and Waste Management

Source: Examples used in this table were taken from ETB 1991,Goodall 1992, and Harris and Lieper 1995.

Target Area Ideas and Examples

Minimize Waste Buy products in bulk to cut down on packaging.Use washable or reusable utensils.Separate rubbish and use recycling options.Pale Hall Hotel (UK) recycles menus into office note pads.

Minimize EnergyUse

Use insulation wisely.Use low energy lighting options.Recycle energy.The Dome in Doncaster (UK) leisure center recycles heat fromrefrigeration units and uses it to heat pools.Consider solar power options.Use key-tag systems that automatically shut off lights and airconditioning when guests leave their room.

Minimize WaterUse and Pollution

Install low flow shower hoses.Recycle water from sewage for use in gardens.Install tertiary sewage treatment plants.Encourage guests not to have towels laundered every day.Disney World (USA) uses a system which converts sewage into organicfertilizer which in turn is used in the theme park gardens.

Minimize air andnoise pollution

Encourage guests and staff to use more environmentally friendly forms oftransport.Consort Hotels (UK) offer staff and guests the use of bicycles.Change to using cars which run on unleaded petrol.

Minimize pollutionin general

Avoid the use of pesticides in gardens.Use environmentally friendly cleaning products.Forte Hotels (UK) use biodegradable toiletries whichare not tested on animals, and which are packaged in recyclable materials.

Interpretation is another major visitor management tool. Effectiveinterpretation can inform visitors of the range of activities or sitesavailable in an area and assist visitors in choosing alternatives that bestsuit their interests. This can have the effect of easing congestion atintensely used sites. Interpretation can educate tourists about a placeand inform them directly on how to behave in ways that will haveminimal impact on the environment. Effective interpretation can alsohelp tourists understand the significance of the place they are visitingand encourage them to support its conservation and care. Interpretationcan play a role in the creation of tourist experiences that substitute for

Seal Bayexample

Educatingtourists

actually getting into the environment. For example, the Royal TyrrellMuseum of Paleontology in Drumheller, Alberta is an interpretivetourist attraction that is located several hundred kilometers away fromthe world heritage area, Dinosaur Provincial Park. This system resultsin very few tourists actually going to the park, which reduces intrusioninto a very sensitive environment.

Adapting the Environment

The use of boardwalks at Seal Bay is an example of another tourismmanagement option, adapting the environment. The most commonadaptation of an environment is the addition of protective structuressuch as rock walls, boardwalks, steps, formed pathways and visitorfacilities. This is usually referred to as site hardening. Such measurescan prevent erosion and damage to vegetation and can also be used asa measure of protection for wildlife. At Seal Bay the boardwalks allowthe sea lions to move into the sand dunes without being disturbed byvisitors. The provision of facilities can encourage visitors to engage inactivities which are less damaging, such as the use of hides to allowvisitors to unobtrusively observe wildlife, and the provision of gas orelectric barbecues to discourage damage to trees as a result of visitorsseeking fuel for cooking.

12.5.2 Marketing and Education StrategiesThere are also marketing strategies which can encourage thedevelopment of sustainable tourism. The most important of these is inthe development of tourism products or concepts which are suitable forthe environmental resources that their destination region has available.For example, in the Norfolk Broads National Park in England a guideto the region contains information designed to heighten visitorawareness of the environment and encourage appropriate activitiessuch as birdwatching and nature trails. It is also important to provideaccurate information about the environment and environmentalimpacts in advertising. This ensures that visitors are matched to theexperiences which are actually available.

The education of staff who work in tourism businesses can also make avaluable contribution to impact management. As with interpretation forvisitors, education of staff can provide both information specificallyabout different actions, their impacts of the environment and measures tominimize these impacts, as well as information which can help staff

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Adapting sites

Suitability

Educating staff

appreciate the place in which they work. The use of codes of conduct orenvironmental ethics are currently a popular form of education for bothtourists and tour operators. Table 12.7 is an example of one of these codes.

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Table 12.7: A Tourist Code of Ethics

Source: American Society of Travel Agents, as contained in WTO,Sustainable Tourism Development Guide for Local Planners.

The American Society of Travel Agents (ASTA) proposes the followingcommandments for travelers. Whether on business or leisure travel:

1. Respect the frailty of the earth. Realize that unless all are willing tohelp in its preservation, unique and beautiful destinations may not behere for future generations to enjoy.

2. Leave only footprints. Take only photographs. No graffiti! No litter! Donot take away “souvenirs” from historical sites and natural areas.

3. To make your travels more meaningful, educate yourself about thegeography, customs, manners, and cultures of the region you visit. Taketime to listen to the people. Encourage local conservation efforts.

4. Respect the privacy and dignity of others. Inquire before photographing people.

5. Do not buy products made from endangered plants or animals, such asivory, tortoise shell, animal skins and feathers. Read “Know Before YouGo,” the U.S. Customs list of products which cannot be imported.

6. Always follow designated trails. Do not disturb animals, plants or theirnatural habitats.

7. Learn about and support conservation-oriented programs andorganizations working to preserve the environment.

8. Whenever possible, walk or utilize environmentally-sound methods oftransportation. Encourage drivers of public vehicles to stop engines whenparked.

9. Patronize those (hotels, airlines, resorts, cruise lines, tour operators andsuppliers) who advance energy and environment conservation; water andair quality; recycling, safe management of waste and toxic materials;noise abatement; community involvement; and which provideexperienced, well-trained staff dedicated to strong principles ofconservation.

10. Ask your ASTA travel agent to identify those organizations whichsubscribe to ASTA Environmental Guidelines for air, land and sea travel.ASTA has recommended that these organizations adopt their ownenvironmental codes to cover special sites and ecosystems.

12.5.3 Research and MonitoringFinally, there are actions relating to research and monitoring. There arethree major types of research that are necessary to ensure that qualityis preserved and encouraged in tourism development. The first areaimproves understanding of the relationship between tourism andenvironmental impacts. The second area improves techniques forevaluating actions and strategies. The gathering of systematic evidenceof the effectiveness of any strategy is necessary for the widespreadadoption of the strategy and in its further development. Finally, thethird research area is aimed at improving the monitoring of variousindicators of environmental quality to identify impacts before theybecome severe or irreversible.

12.6 Tourism and the PhysicalEnvironment: Three Case Studies

The following sections describe three different destinations that reflectdifferent types of tourism environments and different types of tourism-environment interactions. These case studies demonstrate theinteraction between various features of tourism and their impacts, andprovides examples of the cumulative and indirect nature of many oftourism’s effects on the physical environment.

12.6.1 The Great Barrier Reef, AustraliaThe north-eastern tropical coastal region of Australia is a major centerfor both international and domestic travel. The major attractions are atropical climate, beaches and the world heritage-listed Great BarrierReef and Wet Tropics Rain Forests. The Great Barrier Reef (GBR) isthe world’s largest coral system, stretching almost 2,000 kilometersalong the Australian coast. Nearly two-thirds of the region’s tourists areprimarily interested in nature-based activities such as diving and daytrips to the reef.

A review of tourism impacts on the GBR suggested that all thefollowing have occurred:

• Coral damage from infrastructure and tourist activity.

• Collection of coral, shells and plants.

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Understanding,evaluating,improving

GBR Problems

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Tourism and the Physical Environment: Three Case Studies

• Accumulation of litter.

• Disruption to habitats and changes in animal behavior as a result offeeding.

• Water pollution from sediment disturbance, nutrient overload fromthe use of fertilizer, and sewage discharge.

The GBR is an example of the way in which a comprehensive andintegrated management strategy can be used to encourage thesustainability of tourism. The area is contained within a Marine Parkand managed by the Great Barrier Reef Marine Park Authority(GBRMPA). The GBRMPA has produced both a strategic plan for thearea as a whole as well as detailed regional plans which are updated ona regular basis. At the core of these plans are a series of zones whichdetermine the activities that are allowed in various parts of the reef.Commercial tour operations are allowed in several of the zones with apermit. These permits require the proposed operator to provide a type ofenvironmental impact assessment and permits are only given tooperators who can demonstrate that their activities are consistent withthe type of experiences seen as appropriate to the area and that they willhave minimal environmental impacts. Operators who place majorstructures on the reef must also provide a bond to the GBRMPA toensure that sites are rehabilitated if necessary. A variety of conditionsrelated to numbers of visitors, places of anchoring, types of structuresand types of activities allowed are attached to each permit.

The GBRMPA also relies heavily on education as a managementstrategy and offers both training packages for reef operators and theirstaff but also numerous forms of interpretation for both staff andtourists. In conjunction with tour operators in the region the GBRMPAhas developed a series of environmental best practice principles for arange of tourist activities. Table 12.8 contains two examples of these,one designed for operators feeding fish on tours and one for visitorswho snorkel. Monitoring and research is also an important managementstrategy used in this case. The GBRMPA itself conducts research intotourism impacts and along with the recently established CooperativeResearch Centre for Reef Research is continuing to investigate not onlythe impacts of tourism on the reef, but also visitor expectations andresponses to interpretive programs, and the development of technologyto minimize environmental impacts.

Operatorswith permits

Educationand research

12.6.2 Venice, ItalyThis historic center of this city is the most visited Italian tourist destinationattracting 48 percent of international visitor nights spent in Italy. It is alsoa major center for domestic tourists and excursionists. In 1992, more than1.2 million tourists spent at least one night in Venice and nearly 6 millionpeople took a day trip to this city. These figures mean that there were 89

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Table 12.8: Examples of Best Environmental Practices for Tourismon the Great Barrier Reef

Source: Great Barrier Reef Marine Park Authority, 1996, pp. 6 and 9.

Best Environmental Practices for Fish Feeding:

1. If you are feeding fish as a part of a commercial tourism operation, fishfeeding should be well supervised and conducted only by staff.

2. Avoid feeding fish in areas where fishing takes place, to minimize conflict of use.

3. Fish should not be fed directly by hand, but by broadcasting food into the water.

4. People should not be in the water at the same time of fish feeding.

5. Feed fish only raw marine products or fish pellets.

6. Feed Fish no more than one kilogram of food per day per site on the reef.

Best Environmental Practices for Snorkeling:

1. Where possible, practice snorkeling techniques away from living coral.

2. Be aware of where your fins are at all times and control your fin kicks,especially in shallow water.

3. Avoid touching anything with your fins and be aware of disturbing coraland sediment.

4. Do not rest or stand on coral. If you must stand up make sure it's on sand.

5. Where available use rest stations. These should be located adjacent tocoral or sensitive areas.

6. Observe animals rather than handle them directly. Handling someanimals may be dangerous.

7. Do not chase or attempt to ride or grab free-swimming animals. Avoidblocking their path.

8. Do not poke or prod any plants or animals.

9. If you pick up anything under water, living or dead, always return it toexactly the same position.

10. Take the time to learn about the underwater environment.

Italy's topdestination

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Tourism and the Physical Environment: Three Case Studies

times as many visitors to the historic center of the city than there wereresidents. Surveys of visitors to this destination indicate that the touristscome to experience the city’s “unique character, which combines heritageand important cultural events with the peculiar physical structure of thecentre” (Costa, Manente, & van der Borg, 1993, p. 51).

Venice suffers from high levels of both physical and social impactsfrom tourism. The major negative environmental impacts of tourism inVenice are water pollution, including sewage from hotels and litter, andair pollution from tourist buses and boats. In recent years the city hasexperienced algal blooms as a consequence of water pollution. Theselarge growths of algae float along the surface of the water, chokingoxygen supplies to fish and creating decay that results in foul smellingareas. It has been estimated that such occurrences can result insignificant drops in tourist trade, and is a clear example of theimportance to tourism of maintaining environmental quality. Inaddition, the large number of visitors at several sites has resulted in thewearing down of stone floors and stairs and damage to art work due toincreases in humidity and temperature inside buildings.

While Venice has no overall tourism strategy or plan, severalmanagement options have been proposed to alleviate the problemsassociated with tourism to Venice. The main focus of these proposals hasbeen to deal with the number and flow of visitors to and through the city.A series of actions have been undertaken to encourage tourists to usealternative means of transportation to access the city, to use alternativeroutes to travel through the city and to visit in intermediate seasons.These include both actual restrictions on tourist movements, such aslimiting the use of transport terminals by tour buses, and promotionalcampaigns advertising lesser known sites within the city andencouraging visitors to come at less crowded times. The city is alsoconsidering attempts to restrict numbers of visitors by offering a VeniceCard or tour package which is booked in advance, is limited in numberand which offers the holder discounts and advantages such as not havingto wait in lines for entry tickets. The aim would be to make this packagesufficiently attractive that it would be used by the majority of visitors.

12.6.3 Mt. Huangshan Scenic Area,People’s Republic of China

This world heritage-listed area is a major domestic and internationaltourism destination because of its environmental features whichinclude hot springs, pine forests, mountain scenery and historic

Physical impacts,e.g. waterpollution

Dealing withvisitor flow

buildings and sites. Tourism here has grown from 282,000 visitors in1979 to more than 1.3 million visitors in 1990. Tourism focuses on theexperience of the destination’s beautiful and exotic environment.

Rapid growth in tourist numbers has been associated with variousenvironmental impacts including reduction of animal and vegetationresources, urbanization of scenic areas, loss of balance of waterdistribution, and pollution. In peak periods, visitors can leave up to1,000 tons of rubbish and 3,000 tons of sewage, much of which flowsdirectly into rivers. These rivers have also been disturbed by thebuilding of reservoirs to supply water for tourist developments.Developments constructed to take advantage of scenic views havecreated disordered urban landscapes in what were natural scenic areas.These developments have also cleared extensive areas of forest andmany of the plants and animals of the region are now endangered.

The following actions have been suggested to manage tourism to thisworld heritage area:

• Develop a plan which includes regulations: controlling theconstruction of tourist facilities; creating a zoning system whichrestricts access to particularly sensitive sites and opens up lesserknown sites to ease pressure on intensively used points; setting limitsto the number of visitors allowed into particular places; controllingfacility construction to encourage the use of traditional architecturalstyles; and effectively addressing the issue of waste treatment.

• Provide better infrastructure such as site hardening and visitorcenters and gardens.

• Develop itineraries or routes which can ease the flow of visitorsthrough the area and encourage visitors to follow these suggested paths.

• Establish a monitoring program to “help in acquiring an exactknowledge of the changes in the ecological environment, and in tappingthe tourism resource in a rational way” (Tiansheng, 1992, p. 30).

12.7 Alternative TourismOne of the responses to criticism of tourism based on its negativeimpacts has been a call for alternative forms of tourism to be created.A number of these alternative tourism forms have been offered usinglabels such as soft tourism, green tourism, responsible tourism,community tourism, and ecotourism. While these proposed alternativeforms of tourism differ in various ways from each other, they share, in

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Environmentalproblems

Regulations

275

Summary

contrast to mass tourism, an emphasis on small scale development, anactive experience for tourists, direct contact between hosts and guests,and local control over development.

However, negative environmental impacts can also result fromalternative forms of tourism, especially where it occurs in remote andsensitive environments. In addition, it is unlikely that alternative formsof tourism can be viable economic substitutions for conventional formsof tourism due to the fact that small scale operations are unlikely toprovide the economic returns of conventional tourism.

Despite these concerns and criticisms, alternative forms of tourism arevaluable and appropriate in some situations in that they can provide agreater range of opportunities for visitors, thereby diversifying andstrengthening the base for a region’s tourism. Alternative tourism canalso demonstrate the value and practicality of practices and productsdesigned to minimize negative impacts.

SUMMARY

In many places the relationship between tourism and the physicalenvironment has been one of conflict. Many examples can be found ofthe negative impacts that tourism has had on the physical environment.This chapter has described some of these impacts including thedestruction of natural and cultural heritage to make way for tourismfacilities, the creation of pollution, and pressure on resources.Unplanned and uncontrolled tourism can destroy its own assets asmuch of tourism is dependent upon environmental quality.

The challenge for tourism planners, managers and developers is tomove from a relationship marked by conflict to one of symbiosis. In asymbiotic relationship tourism depends upon the physical environmentas a core feature of the products it provides and the physicalenvironment benefits from tourism. This is the goal of sustainabletourism. This chapter has described the major characteristics ofsustainable tourism and offered a range of strategies which can be usedto achieve this type of tourism.


1. Consider tourism products in your local area and discuss theimportance of the physical environment in those products.

Criticisms

Diversifyingtourism

2. Review the examples of negative impacts described in the chapterand suggest management strategies that could be used to deal withthese impacts.

3. Describe some examples of positive impacts from tourism in yourregion and identify factors which have contributed to these positiveoutcomes.

4. Develop a behavior code for visitors to your country.

5. Design an ecotourism product relevant to your local area whichmeets each of the requirements for ecotourism listed in the chapter.

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5 Sec

tion

Tourism Policy and Planning

CHAPTER 13

The Role of Government in Tourism Policy and Administration

CHAPTER 14

The Role of International and Regional Organizations in Tourism

CHAPTER 15

Tourism Planning and Destination Development

CHAPTER 16

Tourism Human Resources Planning and Development

CHAPTER 17

Conclusion

CHAPTER 13

The Role of Government in Tourism Policy and Administration

Learning objectives

• To understand the importance of public policy and regulation in tourism

at the national and international levels.

• To understand the reasons for governmental intervention in a country’s

economy.

• To be aware of the ways in which government involvement in tourism

benefits a country.

• To understand the major roles of government activity in tourism.

• To understand the goals and impacts of tourism policy and planning.

• To appreciate the role of national tourism administrations and their

importance to governments in creating and implementing tourism policy.


government regulation

national tourism administration (NTA)

tourism policy

tourism planning

13.1 IntroductionTourism, like other forms of economic activity, takes place in anenvironment that is shaped by many different forces. One of the mostimportant of these forces–if not the most important–is exerted by a complexweb of policies, laws, regulations, and other actions of governments.

As we have discussed in earlier chapters, tourism is comprised ofindustries and activities that stretch not only across nations andregions, but across traditional lines of business and industry as well.The businesses that provide tourism services, therefore, must contendwith actions of different levels within a government, of many differentgovernments, and of a variety of types of laws and regulations aimedat different industries.

International tourism relies on a high degree of communication andcooperation among nations with respect to this complex network of laws,regulations, and policies. Consider, for example, something as basic as airtravel to another country: the availability, frequency, and cost of the planeride are subject to bilateral air travel agreements; the exchange of onecurrency for another is subject to rates and terms set by currency agreementsand to the complex workings of the international currency markets; and entryinto the destination country is regulated by visa and other immigration or

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13The Role of Government

in Tourism Policyand Administration

Travel laws,policies andregulations

customs-related agreements. The point is clear: the fundamental andnecessary elements of international travel are largely determined by theactions and policies of governments. Or, to put it another way, even the mostattractive destination will be of no consequence unless its host country canforge the agreements that will enable developers, airlines, banks, andimmigration personnel, among others, to provide the services that will bringtourists to the area. Thus, public policy is critical to the success ofinternational tourism and merits careful study and consideration.

This chapter will examine the role of government in tourism policy and itsadministration. Chapter 14 will then take a closer look at the internationaland regional organizations that are involved in tourism policy issues.

13.2 Government Involvement in TourismTo illustrate the importance of the public sector to tourism, consider ahypothetical dream vacation an avid skier might take to a foreigncountry called Alpina, home to the world’s greatest ski slopes.

First of all, can the skier visit Alpina? The answer depends on Alpina’spolicy regarding foreign visitors to its country, and on the skier’s owngovernment’s policy regarding travel to Alpina. The answer alsodepends on the status of political and trade relations between the skier’shome country and Alpina. Perhaps the two are not on the best of terms,in which case a lengthy and extensive process may delay the trip.

How will the skier get to Alpina? Ideally, she would board a plane andfly directly to the airport nearest to the hotel she will be staying at. Butthe availability of such flights would depend on the status of bilateralair agreements that the two countries may or may not have with eachother. If the two countries do not have an agreement, she may need tofly to a third country first before boarding a plane destined for Alpina.

Once there, where will the skier lodge and visit? She may have heardof several outstanding ski areas. Perhaps, however, the local or nationalgovernment has been advised that these areas are being overused, andhas therefore designated them as ecological preserves and will notallow any further skiing. Or perhaps the hotel at which the skier isstaying is quite distant from the best ski areas, because the localgovernment, for political reasons, has compelled developers to buildhotels in areas that need jobs rather than those in proximity to the skislopes. During her stay, our skier will have paid many direct andindirect taxes in the hotel, stores, slopes, and transportation that arealso the prerogatives of governments at various levels.

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Chapter 13: The Role of Government in Tourism Policy and Administration

Importance ofpublic policy

Hypotheticalsituation showing

governmentimpact

From this hypothetical example, one can see that the actions orinactions of government can have a great impact upon nearly everyaspect of tourism. Tourism-related laws, regulations, and restrictionsrange from the broad and inclusive such as air traffic agreements thatdictate the frequency and cost of airline trips, to the minute such as alocal law that specifies the amount of indigenous material that an“authentic” souvenir needs to contain in order to be labeled as such.Governments are extensively involved in all travel experiences, even ifthe effects of their involvement may not be immediately apparent.

13.3 Reasons for Government Involvementin Tourism and the Economy

Government intervention in a country’s economy has traditionally beenthought to be a characteristic of command economies, in which theprivate sector is largely preempted by government-owned institutionsand businesses. On the other hand, market economies, by definition,are supposed to be freer of government involvement. While significantdifferences in the levels of government intervention exist amongcountries, all governments, even those in nations characterized byrelatively unfettered market economies, are deeply involved in theireconomies for a number of reasons.

13.3.1 Promoting Economic DevelopmentAll governments have a vital interest in the health of their countries’economies. A country’s strength and standing in the global communitydepend in large part upon its ability to sustain economic vitality, withoutwhich it would be forced into a cycle of debt and dependence on othernations. In addition, to the extent that poor economic health strains thedomestic population, the government of an economically weak nationwill be more susceptible to internal challenge and pressure.

In today’s global economy, the tie between government and economicvitality is a direct and essential one. Very few countries can pursueeconomic development without participating in the global economy.This participation involves issues such as currency exchange, foreignownership, and consular relations. Thus development is highlydependent upon political and governmental actions. For example, acountry’s textile industry may depend for its survival on restrictionsand tariffs on foreign fabrics. The result of this interdependence is thatpolitical decisions can have a ripple effect throughout the entirenational economy. Economic development often requires government

283

Reasons for Government Involvement in Tourism and the Economy

Levels of control

Governmentinterest in strongeconomy

Global economicrelationships

initiative and capital. This is particularly important for thedevelopment of new regions or areas that require infrastructure. Forexample, foreign investors might be reluctant to finance a resortproject unless the government demonstrates its commitment to theproject by building or financing the necessary access roads and waterlines, or by offering appropriate incentives such as a tax holiday duringthe early years when the resort is not expected to be profitable.

Monetary policy is another important area of government involvement.Governments often use their ability to expand or contract the supply ofmoney to stimulate or control economic growth. Governments also usea variety of methods to influence the value of their currency on theinternational market. Currency exchange rates among nations areparticularly important to international trade and tourism. For example,if country A’s currency is inexpensive relative to country B’s, thenvisitors to country A from country B will likely increase theirexpenditures while in country A.

13.3.2 Facilitating and Supporting IndustriesClosely related to overall economic development is the practice on the partof governments to support certain industries. Governments take differentapproaches to supporting sectors or industries. Some governments take avery activist approach to shaping their economies by creating industrialpolicies, which constitute integrated plans of action that can be quitedetailed in setting goals and limits for a nation’s industries. Governmentsthat want to avoid the degree of planning and control that an industrialpolicy requires often utilize various incentives and disincentives. Taxcredits, for example, are often used to encourage investment in anddevelopment of certain industries that a government favors.

13.3.3 Raising RevenuesMuch of government intervention in the economy results from its need togenerate the revenue to maintain its agencies and activities. Asgovernments grow more complex and are called upon to provide moreservices, their need for revenues increases correspondingly. Governmentoperating expenses related to tourism include the costs to maintain thevarious departments responsible for tourism functions. Revenue-raisingmeasures can be highly visible to the ordinary citizen, like the taxation ofpersonal consumption and business income or the assessment of fees toobtain permits and licenses, or in more specialized forms as in the sale of

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Monetarypolicy

Governmentand industry

Taxationand fees

bonds and other instruments of public finance. Taxation, however, is lessapparent to tourists who have no vote on the matter or in local politics,and thus often becomes a source of choice for raising new revenues.

13.3.4 Creating a Stable Business EnvironmentGovernments have a vested interest in ensuring that certain standards ofcompetence and conduct prevail in the marketplace. This is becausegovernments are often drawn into, and are asked to resolve, problems anddisputes that arise from economic activity. In order to set up thesestandards, governments establish regulatory agencies and laws. Forexample, a government may create a professional licensing board thatrequires that engineers pass certain tests and meet minimum standards oftraining in order to ensure that the hotels they design are structurallysound. Or a government may enact a law that defines the phrase “madefrom indigenous materials,” to ensure that visitors who are sold suchitems are not being deceived. To protect home industries and to encouragethe consumption of local commodities, government may also attempt toimpose high import taxes to discourage the purchase of foreign goods toresell in hotels, restaurants and other tourism-related businesses.

13.3.5 Pursuing Other Policy GoalsGovernments can use their power to intervene in business activity toachieve broader policy goals. Some of the policy areas thatgovernments often address when considering tourism developmentinclude employment, human resources development, education andtraining (discussed in Chapter 16) and environmental protection(discussed in Chapter 12). Social equity and justice are important goalsof some government intervention; where inequitable distributions ofwealth are being created or conserved by structural problems in theeconomy, corrective government action is sometimes warranted.

While these incentives and pressures integrally involve governments intheir economies, public policy is not the sole determinant of a country’seconomic direction. Other factors, such as a country’s climate and itsnatural resources, cultural and social factors, and the condition of theregional and world economies, also direct and constrain economicdevelopment in certain ways. Nevertheless, in today’s global businessenvironment it is clear that public policy exerts a significant influenceon the shape and vitality of a country’s economy.

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Reasons for Government Involvement in Tourism and the Economy

Regulations tomaintainstandards

Encouraging localspending

Governmentinfluence onbusiness

13.4 Roles of the Public Sector in TourismIn order to better understand how government involvement affects thetourism industry, we can classify public sector actions into four generalcategories: policy, planning, development, and regulation. In each ofthese areas governments play a unique and vital role in eitherfacilitating or discouraging tourism.

13.4.1 PolicyPolicy generally refers to an overall, high-level plan that includes goalsand procedures. Public policy, therefore, takes into account the desiredend results of a government and the methods for attaining those results.For example, a government might pursue a policy of greater economicgrowth through tourism development by creating generous tax incentivesfor resort developers. Policy is meant to provide guidance by addressingthe issues that are central to any effort to develop and sustain a tourismindustry. Policies embody goals and strategies that a government hasadopted with respect to tourism, economic development, employment,political relations, or, more likely, a combination of these and other areas.Because policy provides direction, of the four roles or functions of publicsector involvement in tourism listed above that of policy formulation isprobably the most important.

Policies are generally found in formal statements, such as laws and officialdocuments and speeches. However, policies can also be informal andunstated, and can be discerned from patterns or trends of governmentalactions. For example, a government jurisdiction that consistentlydisapproves every application to build a hotel within its borders, but doesnot possess any formal statement on hotel development, may neverthelessbe guided by a clear policy. In this respect, it is important to note thatpolicy can be evident as much from government inaction as its actions.

In general, a nation will have several broad policy areas, such aseconomic policy, educational policy, and social welfare policy. Often,these broad policy areas will coincide with the organizational structureof the government, with each ministry or department having theresponsibility to formulate and administer its own policies. The actualnames and formal relationships among the various governmentdepartments vary from nation to nation.

Tourism policy is generally considered to be an area within a nation’soverall economic policy. Economic policy is concerned with thestructure and growth of a nation’s economy and is often articulated in

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Goals andprocedures

Importanceof policies

Formal andinformal policies

Policy andgovernment

structure

ten-year plans that project conditions in the coming decade and planthe nation’s economic growth within those conditions. Some of the keyareas of concern in economic policy are labor force, investment andfinance, important industries, and trade.

It is important to understand that a nation’s various policy areas areinterrelated, reflecting the complex and dynamic nature of modernsociety itself. Impacts in one policy area will likely effect changes inother areas. Thus, tourism policy makers need to adopt acomprehensive perspective and consider all of the possible impacts andrelationships that tourism will have with other areas of society.

The formulation of tourism policy, therefore, is a crucial responsibilityof a government that wishes to develop or sustain tourism as an integralpart of its economy. Tourism policy articulates goals and direction,strategies and objectives, and by so doing enables the government tolead and actively pursue the kind of development its people want.Tourism policy thus requires that policy makers–legislators,administrators, business executives–consider the following issues:

• The role of tourism in the economy. (How important is tourism tothe overall economy? How important is tourism with respect toother industries?)

• Control of tourism development. (What kind of tourismdevelopment is desirable and appropriate? Where should tourismdevelopment occur?)

• Administration of tourism. (At what level should tourism berepresented in the government’s organizational structure?)

• Government support for tourism. (What amount of public resourcesshould be directed to tourism’s support and growth?)

• Tourism’s impacts. (What kinds of impacts, both positive andnegative, will tourism have on the existing society, culture, andenvironment, and how will these be addressed?)

As can be seen, these are issues which are likely to generate substantialdebate. Different regions within a country may be at odds over thelocation of planned development, different segments of the populationmay disagree over the perceived impacts of tourism, and differentbusinesses may struggle to direct development in a manner that favorsthem. The process that a government employs in order to arrive at itspolicy must account for the many competing constituencies that wishto be represented in the final product.

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Roles of the Public Sector in Tourism

Interrelatedpolicies

Debatepotential

13.4.2 PlanningTourism constitutes a means of economic development. On this point,all countries would agree, and, in fact, it is the primary reason that theyseek to develop the industry. But economic development in today’scomplex and global business environment is far from being a simpleprocess. Tourism is a certain kind of industry that has its own uniquerequirements, impacts, and rewards. Fulfilling those requirements,minimizing the negative impacts, and reaping the rewards, are theprimary goals of tourism planning.

Planning is particularly important for tourism development because oftwo characteristics of the tourism industry. First, tourism is a complexindustry that stretches across many different sectors and businesses;therefore, it is an industry which is often not formally recognized instatistical analyses of the economy. As a result, hard data and informationabout tourism tend to be fragmented among different subject areas.Complicating the first characteristic is the fact that tourism is a site-specific industry. Two destinations may be comparable in terms of sizeand visitor market, but because of their unique circumstances–includingthe physical environment, availability of services, government andculture–their industries may take vastly different forms. Each destinationwill have different problems, or will need to address similar problems indifferent ways. Because mass tourism is a relatively young industry, evendestinations that are considered established may be only 30-40 years old,and are still learning from their own experiences. In turn, newerdestinations are trying to learn from the mistakes of others.

Planning enables government and industry to compensate for thesefactors by providing a structure to collect and analyze informationrelevant to tourism development and a process to achieve it. Theplanning process requires policy makers to consider all aspects andimpacts of the industry (which are discussed in Chapter 15). Thoseissues raise the following types of questions:

• Marketing analysis and strategy: What kind of travelers should beappealed to and how can they be attracted?

• Physical infrastructure: Are existing airports, roads, and utilitiesadequate for the level of tourism projected? If not, what needs to beimproved and expanded? How will these improvements andexpansions be financed?

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Means ofeconomic

development

A site-specificindustry

Youngindustry

Providing astructure for

analysis

• Human resources: Can the local communities provide an adequateemployment base for the industry? Will workers need to beimported? What kinds of skills are required, and how do they matchwith the existing base of workers? Will there be a need to developeducation and training facilities?

• Environmental impacts: How will tourism development affect theexisting environment? What can be done to minimize the adverseimpacts? What can be done to create a sustainable industry?

• Sociocultural impacts: How will the commercial and market-oriented aspects of tourism affect the local culture? Will tourismemployment disrupt existing family patterns? To what extent canexisting cultural resources, such as arts, crafts, and music, be usedas visitor attractions without damaging them? How will the presenceof foreign visitors affect residents?

• Economic impacts: What will the net economic impact be fromtourism in terms of exchange earnings and tax revenues? To whatextent must import goods be sold to visitors? What kinds ofincentives, if any, must be offered to the private sector in order toattract capital investment?

As can be seen from this range of issues and questions, the planningprocess can be essential in forcing a government to thinksystematically about the total impact of tourism. The importance ofplanning cannot be overstated, particularly for those destinations thatare environmentally fragile or whose cultures have not been exposed tomarket-oriented activities. Because tourism development usuallyrequires both the public and private sectors to undertake major capitalprojects (hotel accommodations, public works infrastructure,transportation links), a lack of planning can result in costly mistakes.For example, a comprehensive tourism plan usually includes a land useplan that directs and integrates the many uses of land for an area–suchas visitor accommodation facilities, commercial activities, housing,recreational amenities–in a rational way that enhances the visitorexperience while protecting the host community and environment.Without such a plan, haphazard development might occur, such as ahotel being built in an inappropriate place, resulting in mistakes thatessentially cannot be corrected (or are extremely costly to rectify), andwhich the host community will have to endure for many years.

289


Comprehensiveplanning

13.4.3 DevelopmentAlthough development is often thought of as a private sector activity,there are circumstances in which the government can play a useful, andsometimes necessary, role. For example, in many cases the existingprivate sector may lack sufficient size and capital to undertake thedevelopment of a destination on its own. In these cases, governmentmay get involved by taking the role of developer, or by taking on apartnership role as the provider or guarantor of capital, or in any of anumber of other ways. Sometimes, in cases where certain areas havebeen designated and planned for tourism development, the governmentmay wish to control the overall development by assuming the role oflead developer. In this way, the government can coordinate theconstruction of the actual visitor facilities with necessary improvementsin infrastructure or other activities such as education and training.

There are certain projects that, by virtue of their size and importance to thecountry or destination as a whole, almost always require a leadinggovernment role. Airports, major land transportation projects, and water-related projects that involve dredging are examples of such tourism-relatedprojects. Governments have the ability to fund such projects by issuingbonds and other financial instruments, thereby providing an essentialelement of the development process that the private sector often cannot.

13.4.4 RegulationThe regulatory role of government is very important for the tourismindustry, because so much of it is intended to protect the consumer.Government regulation plays a critically important role in protectingtourists and enhancing their travel experiences in many ways, including:

• Consumer protection laws and rules that require travel agencies todeposit their customers’ advance booking deposits in a trustaccount, to ensure that the moneys will be used for the purpose ofsecuring their reservations.

• Fire safety laws that mandate a minimum number of exits andemergency lights on each floor of a hotel, in case of a fire.

• Health and food safety regulations that require food serviceestablishments to maintain minimum standards of safety and sanitation.

• Competency standards that require bus and boat operators topossess requisite skills and knowledge.

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Government asdeveloper

Projectimportance

Consumerprotection

Regulatory actions often arise from a concern for a destination’senvironmental and cultural resources. Certain protective regulationsrestrict activities on, or access to, vulnerable environmental areas.Examples of this would be a limit on the kinds and numbers of tourboats that could operate in a scenic waterway to prevent undue damagefrom overuse, or limiting hikers to only certain mountain areas toprevent damage to a rare plant species. Another type of law might limitthe serving of alcohol or the performance of certain cultural displays tocertain days to minimize negative effects upon local customs. To theextent that increasing numbers of destinations rely on environmentaland cultural features to differentiate themselves from other destinations,these types of protective regulations will become more important.

Perhaps the most critical area of government regulation with respect tointernational tourism is that of aviation. For most countries, tourismgrowth requires growth in airline service. Air service, in turn, isheavily dependent upon the bilateral agreements between countriesthat govern all aspects of air transportation between them. The airlineindustry has always been highly regulated, for two main reasons: first,air travel requires technical and operational standards to ensure thesafety of air travel; and second, governments have generally tried toretain tight control over the economic and commercial aspects of airtravel involving their countries.

Air regulations have traditionally been protectionist in nature. Areas inwhich protectionist regulations have been used include thespecification of air routes, restrictions on airline ownership andcontrol, airline capacity, and tariffs. The complexity of the issuesinvolved in air travel regulation, and the ways in which issues ofinternational relations and national pride get tangled in air regulation,means that the negotiation of air agreements remains a highlycontentious and political process. So far, efforts to create multilateralagreements–agreements that would apply to several countries–havebeen largely unsuccessful, even though they promise a simpler andmore efficient system of regulation. More recently, as more countriestake measures to deregulate and privatize their airline systems, and asthey become more aware of the negative effects of airline regulation ontourism growth, there has been increased pressure for a more liberal airregulation. Air agreements are covered in greater detail in Chapter 3.

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Protectiveregulations

Air regulations

13.5 Levels of Government InvolvementGovernment involvement or intervention in the economy occurs atdifferent levels of government. Although the exact structure andrelationship of these levels will vary from one country to another, thereare four basic levels that generally encompass all of the governmentaljurisdiction and activity relevant to any given destination.

13.5.1 International InvolvementInternational involvement can take several forms. First, there areinternational political organizations. These organizations differ from theeconomic and trade organizations discussed below by addressing a rangeof non-economic issues, including political disputes. The most well-known of these is the United Nations (UN), which serves as a forum forthe international community. The UN is unique in that its decisions canbe supported with police powers, in the form of armed troops. Within theUN, there are organizations such as the United Nations DevelopmentProgram (UNDP) and the United Nations Environment Program(UNEP), and the International Civil Aviation Organization (ICAO),which serve a variety of functions for the member nations. The world’slargest and most influential government tourism organization–the WorldTourism Organization (WTO)–is an executing agency for the UNDPwith over 130 government members. The WTO and its importance toworld tourism are discussed in Chapter 14. Other examples ofgovernmental organizations include the Association of Southeast AsianNations (ASEAN) and the European Union (EU).

Another important form of international government involvement is themultilateral trade agreement. These agreements contain principles andpractices that guide the signatory countries’ economic and trade relations.The General Agreement on Tariffs and Trade (GATT), General Agreementon Trade in Services (GATS), North American Free Trade Agreement(NAFTA), and European Community (EC) are examples of efforts bycountries to create greater efficiency and predictability in trade and com-merce across national boundaries by forging comprehensive agreements.

From the perspective of tourism, bilateral air agreements represent aspecial kind of international agreement. Bilateral agreements spell outthe terms and conditions of air transportation rights between twocountries, and are therefore critical for the success of internationaltourism. Because these agreements are bilateral, they apply only to the

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Internationalpolitical

organizations

Multilateraltrade agreements

Bilateral airagreements

two participating countries; thus, a given country will negotiate andmaintain a separate agreement with each country with whom it wishesto establish air transportation relations.

A key point regarding international governmental involvement is thesovereignty of the national government. The sovereignty of the nation-state means that international governmental involvement is dependentupon voluntary cooperation. This is due to the fact that, with theexception of the UN noted above, international organizations generallydo not possess the means to enforce agreements. Thus, it has historicallybeen difficult for international bodies and agreements to addresscontroversial or divisive issues. On these issues, nations prefer to reserveto themselves the discretion to act in their own interests, rather thanrelinquish it to a multilateral organization. This has been the primaryobstacle to creating a multilateral air regulatory system. Thus, withrespect to policy issues government involvement at the internationallevel tends to be advisory in nature. An international organization mayset certain goals for its government members, but it must lobby nationalgovernments to adopt and abide by them. The ways in whichinternational bodies are involved in tourism is discussed in Chapter 14.

13.5.2 National InvolvementGovernmental involvement at the national level can be extensive, andis often critical to the success of the nation’s tourism industry. Theprimary areas of involvement include the following:

• Entry and exit. It is the national government that bears theresponsibility for controlling the most basic aspect of internationaltravel, that is, access across its borders. In itself, this responsibilityinvolves a wide range of issues and problems that need constantattention. Key responsibilities in this area would include regulatingthe issuance of visas, monitoring borders and airports, andenforcing customs regulations

• Policy and planning. As this chapter and Chapter 15 emphasize, thepolicy and planning functions of a government are crucial to itstourism industry. Tourism policies can exist at various governmentallevels, but it is at the national level that policy exerts its greatestinfluence. This is due to the fact that, at the national level, policypriorities are generally reflected in the nation’s political structure. Aseparate national ministry or department devoted to tourism wouldsignal that the national government deems tourism to have a primary

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Voluntarycooperation

role in its economy. The ministry would have its own staff and wouldbe included in the regular process of government budgeting andfunding. In addition, it is likely that tourism would also be given aprominent place in master economic and development plans, tax andother economic incentive programs, physical plant andinfrastructure plans, and other such important activities. Nationaltourism planning generally involves the designation of regions orareas to be targeted for tourism development.

• Infrastructure development. A national government’s involvement intourism is also significant because of the resources that can bemarshaled at the national level. Some aspects of tourismdevelopment, particularly the construction of the infrastructure andnational parks necessary to accommodate both citizens and tourists,require tremendous amounts of capital, amounts that oftennecessitate the use of government financing capabilities such astaxes, bonds and loan guarantees.

• Marketing. Many national governments take an active role inpromoting their countries as destinations to the outside world. Thiskind of promotion can be particularly useful for countries whosetourism industry lacks sufficient resources to generate largemarketing campaigns. As discussed below, national tourismadministrations (NTAs) have traditionally been conceived andformed primarily as marketing bodies of the national government.

13.5.3 Local InvolvementAt the local level, government involvement can also be quite visibleand significant. It is at this level that the government’s regulatoryfunction becomes prominent. Key areas of local governmentalinvolvement are the following:

• Control of the land development process, including zoning laws andbuilding design.

• Enforcement of laws and regulations relating to health, safety, andemployment, such as standards of cleanliness and safe handling forfood establishments, service of alcoholic beverages andoccupational safety and work conditions.

• Licensing of persons and businesses, such as tour operators, travelagencies, hotels, restaurants, and others.

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13.6 National Tourism Administrations (NTAs)

13.6.1 Role of NTAsAs we have seen, the nature of tourism is such that it is difficult todesignate the tourism industry or sector with the same precision thatcan be applied to other industries and sectors. Because of this,governments have had a difficult time measuring the importance andimpact of tourism upon their overall economies. Economists havecreated and improved models that can be used to gauge the effect ofdirect expenditures by visitors on hotels, transportation, and othergoods and services. Multipliers are used to estimate the ways in whichsuch expenditures exert a “ripple” effect throughout the economy.Nevertheless, these estimates depend on many different variables andassumptions and are often subject to uncertainty and dispute.

According to some observers, this uncertainty regarding themeasurement of tourism’s contribution to an economy leads manygovernments to either ignore tourism or to divide oversight for it amongmany different ministries, departments, or agencies. A government maydirect its transportation ministry to address airline issues, its commerceministry to address issues relating to hotels, restaurants, and otherbusinesses, its energy ministry to consider fuel requirements oftransport systems, and its labor or education ministry to monitor issuesrelating to tourism training and education. The effect of this kind ofdispersion of governmental responsibility is often a set of confusing,and sometimes contradictory, laws, regulations, and policies. Oftentimes the various departments will zealously protect their respectiveareas of responsibility and eschew collaboration with other departmentsin favor of tighter control. It is well known that bureaucracies aresubject to these types of internal pressures that can hinder the effectiveadministration of functions that cross departmental boundaries.

National tourism administrations (NTAs), also referred to as nationaltourism offices (NTOs), are seen by some governments as providing ameans to avoid fragmentation of tourism-related policy and practice. Ingeneral, NTAs are ministerial- or departmental-level bodies that pursuenational tourism policies and goals. Beyond this broad definition, it isdifficult to generalize about NTAs as there are many differentstructures and roles among them. Traditionally, NTAs were created andoperated primarily as marketing entities. They enabled countries to

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Difficulty inassessingtourism impact

Governmentdispersion

Tourism-relatedpolicy

pursue broad-based promotional strategies, in order to supplement themarketing normally done by private industry. Traditional marketingactivities of an NTA include:

• Marketing and promotion of the nation, ensuring its tourismcompetitiveness and market share of visitors among otherdestinations within its region.

• Encouraging private sector support and cooperation in promotionalactivities and participating in shaping national tourism policies andpractices.

• Representing its country in trade and consumer shows and expositions.

• Producing and distributing brochures, videos, and other marketingmaterials.

• Promoting and producing special events.

• Performing or contracting for market research and analysis.

• Maintaining overseas tourism information offices.

In fact, marketing and promotion continues to account for most of NTAspending. In 1992, of the ten countries with the greatest NTA promotionexpenditures, eight spent more than 50 percent of their entire NTAbudget on promotion (World Tourism Organization, 1995a).

However, as tourism’s importance has grown and as governmentsexpand their goals and expectations of tourism development, the policyissues that tourism involves have also become more inclusive andcomplex. NTAs, then, have been seen by many as the logical means ofadministering and overseeing the tourism policies of governments.While the scope of their functions varies from one NTA to another, theWorld Tourism Organization has classified NTA functions into fivemain groups:

• General administration of travel and tourism

• Tourism planning and development

• Research

• Education and training

• Marketing and promotion

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13.6.2 NTA StructureNTAs vary in terms of their structure and relationships to otherbranches of government. The three basic forms of a NTA are:

• The state tourism secretariat, which is a high-level office either onits own or within a ministry, with representation at, and access to,the highest executive levels of the government. An example is theUganda Ministry of Tourism and Wildlife and Antiquities.

• The government agency or bureau located within a department(such as a department of commerce or economic development), andreporting to that department. The Taiwan Tourism Bureau, forexample, is located within the Ministry of Transportation andCommunication.

• The quasi-public tourism authority or corporation, which oftenincludes representation of members of the private sector andreceives private funding and which is run more independently of thegovernment than the other types of NTAs. The Canadian TourismCommission is one such example among the many countries nowmoving toward a quasi-public agency structure.

In addition, there is also a type of governmental entity that, while notan NTA, fulfills a role similar to that of an NTA. This is a centralizedcoordinating body comprised of representatives of other departments.This type of body generally receives minimal funding and acts as aforum in which the major departments involved with a nation’s tourismindustry (commerce, human resources, foreign relations) can addressissues that affect them.

Advocates of a NTA point out that a ministry or office of tourism hasthree important advantages. First, it enables policy makers to work froman overall perspective of tourism. This is important because governmentpolicy often has many varied effects, only some of which are anticipated.For example, a government may issue regulations restricting theimportation of foreign beef to protect its domestic cattle industry withoutunderstanding that such a regulation may jeopardize the viability ofthousands of restaurants featuring imported high quality beef as theirmain specialty. A centralized tourism office can often prevent or mitigatethe problems that arise from such unintended results of policy. In arelated manner, a central tourism office can provide leadership in

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Coordinator

NTA advantages

government planning efforts. Transportation and resort development, forexample, generally require large-scale planning due to their high costand their impact on the communities in which they are placed.

The second function that a centralized tourism office serves is to accordtourism a higher level of status and attention within the governmentadministration. Generally, a higher status level enables the touristindustry to receive greater amounts of governmental assistance andfunding. It also provides an institutional framework through which theindustry and government can communicate. A high-level tourism officealso serves to validate the importance of tourism to the overall economyand society and informs the public of this importance. Third, it shouldbe kept in mind that only government can deal with other governments.As tourism rises in importance as an item of international trade, aneffective NTA will be able to work with other NTAs to address issuesthat involve fair trade in tourism as well as removing impediments totravel among the sending and the receiving countries.

13.6.3 NTAs and the Issue of Public SectorInvolvement in Tourism

One of the main issues that NTAs continually face is the proper role ofthe government in NTA activities, and particularly in NTA marketingand promotion efforts. Government involvement is seen by some as anunnecessary use of public funds for private purposes, while othersemphasize the public good that NTAs serve. It is also noted that privateindustry, especially airline companies, are much more efficient andeffective destination promoters than many NTAs. The WTO hassuggested that government support of NTA activities may be seen as afunction of the overall economic development of the country and hasproposed the following categories:

• Developed countries such as the United States and the UnitedKingdom, characterized by a dominant private sector with somepublic sector support.

• Developed countries such as Italy, Spain, France, and Austria,characterized by a dominant public sector.

• Developed countries such as Japan and Sweden, with limited publicsector involvement.

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Summary

• Developing countries such as Cuba, Guatemala, and Morocco, wherethe public sector is dominant and private sector participation is minimal.

• Developing countries such as India and Curacao, with leadershipfrom the public sector but substantial involvement of the privatesector. (WTO, 1995a)

The debate regarding the government’s proper role in tourism willcontinue to engage both sides of the issue, especially as economicconditions force governments to carefully examine their spendingpriorities. The dissolution of the United States Travel and TourismAdministration (USTTA) in 1996, for instance, indicates thevulnerability of NTAs to budgetary constraints. It has been noted,however, that a lack of government involvement in tourism marketingcan lead to an imbalance between demand and the infrastructure andresource limitations of a destination.

SUMMARY

In today’s global economy, the relationship between industry andgovernment is a close and vital one. International tourism, which bydefinition involves the movement of people across national borders, isheavily dependent upon governmental policies and actions. In addition,because tourism involves and impacts many different parts of society,it is subject to governmental involvement across a wide range ofactivities. At the international, national, regional, and local levels, thereare important links between government and the tourism industry.

The presence or absence of a national tourism policy is important insetting goals and directing development of the industry. Throughpolicy, governments can articulate their objectives in pursuing tourismand their concerns regarding its impacts. Whatever its degree ofinvolvement in the industry, government can fulfil a valuable role byemphasizing the long-range and comprehensive view of tourism’splace in the development of a country’s economy and society. As theindustry grows, governments who turn to tourism development willhave greater expectations of its contribution to the country. NTAsprovide a means of preventing these expectations from conflicting witheach other, and of managing the industry’s many different aspects.


1. In what ways can government policy hurt the tourism industry of acountry?

2. Compare and contrast the effect of international vs. nationalgovernment involvement in tourism policy making.

3. Name the four general categories of the public sectors actions in thetourism industry. In what ways does one category impact anothercategory?

4. This chapter discusses how government regulation protects theindividual tourist. What are some ways in which governmentregulation may protect businesses within the tourist industry?

5. Define the function of a National Tourism Administration (NTA)and describe its three basic forms.

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CHAPTER 14

The Role of International and Regional Organizations in Tourism

Learning objectives

• To understand the types of tourism organizations and their purposes and

objectives.

• To understand the different ways tourism organizations assist members of

the tourist industry.

• To understand how tourism organizations address international trade

issues.

• To understand ways in which tourism organizations address environmental

and social issues in tourism.

• To understand the challenges facing tourism organizations.


Association of Southeast Asian Nations (ASEAN)

European Union (EU)

free trade

General Agreement on Trade in Services (GATS)

International Air Transport Association (IATA)

International Civil Aviation Organization (ICAO)

Organization for Economic Cooperation and Development (OECD)

Pacific Asia Travel Association (PATA)

protectionism

World Bank

World Tourism Organization (WTO)

World Travel and Tourism Council (WTTC)

14.1 IntroductionThe previous chapter examined the importance of governmentinvolvement in the travel industry, and discussed the various levels ofpolicy and regulation ranging from the local level to the internationallevel. The diversity of policy issues that affect tourism is evidence of theindustry’s unique structure, which stretches across many differenteconomic sectors and has various social impacts. Tourism thus requiresa great deal of communication and cooperation among government,business, and host communities. Because of this need forcommunication and cooperation, many kinds of organizations,including ones of voluntary membership, have been established to servetravel and tourism-related interests. These organizations satisfy manydifferent purposes, but they all provide a means by which the varioussectors of the travel industry can articulate and pursue common goals.

Nowhere is this need for communication and cooperation morenecessary than in the international arena, where the structuralcomplexity of the industry is compounded by different nationalpriorities and policies. This chapter focuses on international tourism-related organizations. Specifically, it discusses their roles andfunctions, and examines the concerns, purposes, and activities of these

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14The Role of International and

Regional Organizations in Tourism

Need forcommunication

Internationalcooperation

organizations and how they play a vital role in facilitating internationaltourism. Finally, it addresses some of the challenges facing theseorganizations as tourism moves into the new century.

14.2 Types of Tourism OrganizationsThere are several ways of categorizing tourism and tourism-relatedorganizations. Perhaps the most useful typology is based on themembership of the organization. The membership of an organizationprovides the clearest indication of its purposes and objectives, since itis the members’ interests that are being advanced by the organization.

Public Sector Organizations

As discussed earlier, tourism takes place within the context of governmentalstructures that include laws, regulations, agreements, and other actions. Theissues that arise from this context require communication and cooperationamong governments. Public sector organizations provide a forum fornations to address such issues. Public sector organizations are generallycomposed of government representatives (such as ministers, departmentheads, and directors) and tourism-related agencies.

Private Sector Organizations

In general, private sector organizations are comprised of businesses,companies, and associations with common goals or interests. Suchorganizations provide a forum for their members to identify anddiscuses issues of importance to them and to their industries. Often, theorganization will address these issues by creating standards andguidelines, increasing public awareness, lobbying governments, andother such measures. In many cases, private sector organizations aredevoted to changing or repealing laws, regulations, and other legalrestrictions on their industries.

Regional Organizations

Because tourism is tied closely to geography, many tourism organizationshave been formed on the basis of regional proximity or affiliation. Suchorganizations often are formed initially for the purpose of marketing andincreasing the travel market’s awareness of their respective regions. Therationale behind regional marketing is that potential visitors will be moreattracted by the collective attractions of a region rather than by anindividual destination, particularly when the region is not well known to

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Chapter 14: The Role of International and Regional Organizations in Tourism

Differentmemberships and

their goals

Government

Business

Geographicalorganizations

the visitor. Regional organizations also enable destinations to pool theirresources and mount more effective marketing campaigns. As regionalorganizations evolve, they often expand their goals beyond marketing toinclude such areas as travel facilitation and policy coordination.

14.3 Purposes and Objectives of Tourism Organizations

Tourism businesses, destinations, and their governments face manychallenges. As tourism becomes increasingly sophisticated,competitive, and global, the public and private sectors will becompelled to keep abreast of the rapidly changing market. Internationalorganizations provide one means for those involved in tourism toaccomplish this. Through organizations, the members can createnetworks, pool resources, and benefit from efficiencies in scale and sizethat might otherwise be unattainable by them individually. In addition,organizations enable businesses and governments to address issues withthe greater power and credibility that derive from collective action.

Tourism organizations thus have many different agendas and purposes.The section below examines major areas of concern to internationaltourism organizations. Subsequently, these areas of concern will beillustrated by discussions of several prominent tourism-relatedorganizations. The topic of trade agreements is also discussed, in lightof their importance to the future of international tourism.

14.3.1 Promotion of Industry InterestsPerhaps the most basic type of organization is an association of membersrepresenting the same profession or industry segment. Theseorganizations are primarily oriented towards addressing issues that affecttheir particular interests. The activities of such organizations include:

• Monitoring laws, rules, and other such legal decisions that mayaffect the industry.

• Lobbying for or against such laws and rules, based on their potentialimpacts.

• Setting standards for various aspects of the industry in areas such asoperations, financial reporting, and statistics.

• Appointing and regulating travel agents’ sale of international air tickets.

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Purposes and Objectives of Tourism Organizations

Advantages toorganizations

Areas ofconcern

Professional and industry organizations are an important part of thetourism industry. Examples of tourism-related professionalorganizations include the Association of Independent Tour Operators,the International Association of Convention and Visitors Bureaus, andthe World Association of Travel Agents.

14.3.2 Regional Marketing and CooperationFor an industry like tourism, which is based on the movement of consumersto specific geographical sites, regional collaboration can providecompetitive advantages especially in terms of marketing the region and itsdestinations. As the discussion in Chapter 8 makes clear, a first and crucialstep for any destination is creating awareness. Regional organizations areimportant vehicles for creating greater awareness of a destination areabecause they enable destinations to participate in marketing campaigns thatare larger than they could afford individually, and to create a regionalidentity which can appeal to a broader range of visitors.

14.3.3 Providing Data and AdviceOne of the ways of improving the quality of international tourism is toenable new destinations to utilize and benefit from the experiences ofmore established ones and the expertise of industry professionals. Thisis particularly important to destinations in environmentally orculturally vulnerable areas, where mistakes can be costly and maydamage the reputation of the industry as a whole. The provision of dataand advice to both public and private interests constitutes a valuableservice of many organizations. Examples include:

• Providing data to support sound planning for new development.

• Conducting studies for planners, governments, and other parties.

• Providing consultants to assist local governments in planning andimplementation.

The provision of consulting and advisory services is closely tied to theneed for tourism planning. As is discussed in Chapter 15, planning is avital element of tourism development.

14.3.4 Providing Direct AssistanceTourism development can require capital investment in many differentareas, such as infrastructure improvements, human resources educationand training, and housing. These capital requirements are often beyond

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Creating regionalawareness

Benefiting fromexperience

the means of local governments and industry. Nevertheless, it isrecognized that proper attention and resources need to given to theseareas because of their importance to the ability of the local populationto benefit from tourism development. An important function of severalorganizations is to meet this need for funds for tourism-related projects.

14.3.5 Addressing Trade IssuesAs was discussed in Chapter 2, the flow of tourists across national borderswill be an increasingly significant economic trend for most of the worldcommunity. As international tourism grows in importance, so too will theissues that are inherent in international trade. The world has long wrestledwith issues related to trade and commerce among nations. Because of theclose tie between economics and politics, international trade has alwaysbeen, and will continue to be, a highly political activity. Internationaltourism, as a major part of that trade, will be increasingly drawn into worldpolitics. The political and commercial relationships of the world communitywill be a central theme of international tourism into the 21st century.

The importance to international tourism of trade and commercialrelations between nations cannot be overemphasized. Imagine, forexample, the effect of a significant reduction of airline flights due to adispute over air freight privileges, or a major change in laws regulatingthe ownership of tourist accommodations. Trade relations affect notonly the flow of tourists, but the flow of capital that tourism generates.

14.3.6 Addressing Environmental and Social Issues

As the tourism industry has grown and matured, larger issues ofimportance and concern to the industry have loomed to the forefront.Foremost among these are the following:

• Tourism’s potential as industry through which sustainabledevelopment can be achieved.

• The critical importance of environmental protection andenhancement to the success of the industry.

• The importance of peace and security issues to internationaltourism, and the potential for tourism to advance greaterunderstanding and peace among nations.

• The promotion of equal access for all travelers, including thedisabled, to the opportunities and benefits of travel.

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Purposes and Objectives of Tourism Organizations

Capitalinvestment

Internationaltrade relations

Tourism organizations provide a forum where these concerns can bediscussed, and a collective voice and powerful vehicle by which actionscan be taken.

Recognizing the importance of the relationship between tourism andthe environment, the industry has taken a leadership position inincorporating environmental priorities into its goals and practices. Thisis particularly evident in the industry’s emphasis on the concept ofsustainable development. The term sustainable development is used todenote many different things, but generally it refers to strategies ofeconomic development that promote the long-term viability of thedestination in harmony with its natural and cultural environment.Increasing sensitivity to social and cultural impacts, especially upontraditional societies, is reflected in the concerns of many tourismorganizations. Some organizations have also made sustainability andsocial awareness a central part of their overall mission and goals.

Among the numerous examples of the ways in which sustainablityissues have been integrated into the goals of tourism organizations arethe following three:

• The European Commission, as part of its “Action Plan to AssistTourism,” has provided financial support to several sustainable tourismpilot projects and established the “European Prize for Tourism and theEnvironment,” which defines “environment” to include culturalresources as well. In 1995, the Commission produced “The Role of theUnion in the Field of Tourism,” which, among other topics, discussedthe EU’s activities with regard to sustainable tourism.

• Green Globe is one of several environmental initiatives begun by theWTTC. The Green Globe program seeks to involve all sectors of theglobal tourism industry in an effort to place environmental prioritiesat the center of the business agendas of tourism-related companies.

• In September 1995, WTO, WTTC, and the Earth Council releasedAgenda 21 for the Travel and Tourism Industry, an action planspecifically for the industry. Through the identification of specificstrategies and priority action areas, Agenda 21 for the Travel andTourism Industry constitutes a means of integrating sustainabledevelopment principles, derived from the Rio Declaration ofEnvironment and Development, into the decision-making processesof tourism professionals.

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Sustainabledevelopment

Examples ofsustainability

14.4 Important Tourism and Tourism-related Organizations

14.4.1 World Tourism Organization (WTO)The largest and most significant governmental organization is theWorld Tourism Organization (WTO), headquartered in Madrid,Spain. Its membership is composed of 133 countries and territories, andover 300 affiliate members from the public and private sectors. WTO isan executing agency for the United Nations Development Program(UNDP) of the United Nations, and is headed by a Secretary-General.It is composed of three main bodies: the General Assembly, ExecutiveCouncil, and Regional Commissions representing the Americas,Europe, Africa, Middle East, South Asia, and East Asia and the Pacific.

WTO’s mission is to “promote and develop tourism as a significantmeans of fostering international peace and understanding, economicdevelopment and international trade.” To pursue its mission, WTOengages in a wide range of activities specifically designed to assistdeveloping countries in the following areas:

• Inventories of existing and potential tourism resources; nationaltourism development master plans; formulation of policies, plansand programs for development of domestic tourism.

• Institutional framework of national tourism administrative structures;tourism development corporations; legislation and regulations.

• Evaluation of the impact of tourism on the national economy and onthe environment.

• Statistics, forecasting, statistical analysis, market research, marketanalysis; promotion, publicity and public relations.

• Training; feasibility studies for tourism and hotel schools;management development.

• Planning and management of national, social and cultural goals oftourism.

• Area development, development of new tourist sites, anddevelopment of particular tourism products.

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Important Tourism and Tourism-related Organizations

Structure of WTO

WTO activities

• Planning, location, operation and improvement of touristaccommodations; hotel classification systems.

• Sources and methods of finance for tourism investments; pre-investment studies, feasibility studies of investment projects,cost/benefit analysis.

• Safety of tourists and tourist facilities.

Examples of the kinds of actual projects through which WTO assistsdeveloping countries are:

• In Niger (1990-92): Establishment of a computer system to processtourism statistics and the creation of a tourism database, and stafftraining to support the new system.

• In Uganda (1986-93): Preparation of tourism marketing strategiesand an inventory of tourist attractions; training of tourism officialsin planning and marketing; completion of a National Tourism Planfor Uganda, a strategic action program, detailed planning forpriority tourism areas, cost/benefit analyses of developmentprojects, and an implementation procedures manual.

• In Oman (1989-91): Preparation of a comprehensive long-range nationaltourism development policy and 5-year action program, and training oftourism officials in planning, marketing, and implementation.

14.4.2 Organization for Economic Cooperationand Development (OECD)

The OECD was formed in 1961 by the United States, Canada, and 18European nations; as of 1996, there were 27 member countries. Unlikethe WTO, the OECD is not exclusively concerned with tourism- relatedissues, but with economic development in general. Its main purpose isto facilitate world prosperity by helping nations create compatible andintegrated domestic policies and practices. Thus, the OECD focuses ongovernmental policies and how they interact with those of othercountries. Research and analysis is carried out through its directoratesand services: Directorates of Agriculture; Development Cooperation;Education, Employment and Social Policies; Enterprises; Environment;Financial and Fiscal Matters; Science, Technology and Industry;Statistics and Trade; and the Economics Department, InternationalEnergy Agency, Public Management Service, and TerritorialDevelopment Service. Until recently, there was also a TourismDirectorate, but tourism issues are now taken up by other, appropriate

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General economicdevelopment

directorates. OECD’S Statistics Directorate compiles and analyzes datain a manner that enables governments to assess and compare theirpolicies and practices from a cross-national perspective. The areas inwhich statistics are collected include national accounts, labor force,foreign trade, prices, output, and monetary and financial measures.OECD’s annual publication, Tourism Policy and International Tourismin OECD Countries, contains important statistical analyses ofinternational tourism. The OECD is based in Paris, France.

14.4.3 International Civil Aviation Organization (ICAO)

The ICAO is an inter-governmental body devoted to cooperation insetting international aviation standards. The ICAO was established in1944 by 52 nations, or Contracting States, through the signing of theConvention on International Civil Aviation. As of 1996, ICAOmembership stood at over 180 Contracting States. In 1947, ICAObecame a specialized agency of the United Nations through theEconomic and Social Council. As is discussed in Chapter 13, airtransportation is a unique industry by virtue of its direct and extensiveinvolvement with governments, air safety concerns, equipmentstandards, training and political issues.

The ICAO’s stated purpose is “that international civil aviation may bedeveloped in a safe and orderly manner and that international airtransport services may be established on the basis of equality ofopportunity and operated soundly and economically” (InternationalCivil Aviation Organization, 1996). ICAO’s main areas of activity are:

• Establishing international standards, recommended practices andprocedures covering the technical fields of aviation.

• Developing a satellite-based system concept to meet the futurecommunications, navigation, surveillance/air traffic management(CNS/ATM) needs of civil aviation.

• Regional planning for nine distinct regions.

• Facilitating air travel by reducing formalities and obstacles.

• Providing advice and assistance to nations in planning safe andeconomical aviation systems.

• Collecting statistics on airline accidents.

• Promoting civil aviation in developing countries.

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Aviationorganization'spurpose andactivities

• Facilitating the adoption of international air law instruments and thepromotion of their acceptance.

14.4.4 International Air Transport Association (IATA)IATA was formed in 1945 with 57 members from 31 nations, mainlyrepresenting Europe and North America. Since then, the airline industryhas experienced tremendous growth, and as of 1995 IATA membershipnumbered 230 members from 130 nations worldwide. IATA’s mission isto represent and serve the airline industry. Its goals include:

• Promoting safe, reliable and secure air service.

• Achieving recognition of the importance of a healthy air transportindustry to world-wide social and economic development.

• Assisting the industry to achieve adequate levels of profitability.

• Providing high quality, value for money, industry-required productsand services that meet the needs of the customer.

• Collecting statistics on airline accidents.

• Developing cost-effective, environmentally-friendly standards andprocedures to facilitate the operation of international air transport.

• Identifying and articulating common industry positions andsupporting the resolution of key industry issues.

• Appointing and regulating travel agents’ sale of internationalairtickets.

Among its efforts to facilitate air travel is IATA’s work to create greaterefficiency in various logistical aspects of air travel, such as tickets,baggage checks, ground handling, and electronic data interchange. Inconjunction with governments following the establishment of bilateralagreements, IATA also reviews air travel rates through IATA trafficconferences.

14.4.5 World Travel and Tourism Council (WTTC)The WTTC is comprised of executives from leading internationalcompanies in the airline, hotel, transportation, and travel agencyindustries and is located in Brussels, Belgium. As a private-sectororganization, several of the WTTC’s primary objectives are concernedwith making changes to the public sector, including:

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Airline industry

• Improving recognition of tourism’s importance.

• Eliminating barriers (such as trade restrictions and airlineagreements) that restrict the growth of tourism.

14.4.6 Pacific Asia Travel Association (PATA)and Other Regional Organizations

Founded in 1951 to encourage travel to the region, PATA numbers over2,000 members representing the public and private sectors of the travelindustry. PATA’s central mission is defined in terms of a distinct region:“to contribute to the growth, value and quality of travel and tourism toand within the Pacific-Asia area,” an area which it defines as extendingfrom North America (including Mexico) westward across the Pacific toSouth Asia and from Pole to Pole.

PATA has been an exemplar of regional tourism organizations. PATA’sprimary objective and its strategies for pursuing that objective providea clear picture of the range of activities that a regional organization canpursue on behalf of its membership:

“To encourage and assist in the development of travel industriesthroughout the Pacific-Asia area in a manner which recognizes theurgent importance to practice an environmental ethic that supportsresponsible conservation and restoration of the Pacific Asia’s uniquecombination of natural, social, and cultural resources, by:

a) Providing an instrument for close collaboration among the variousterritories, countries, and commercial interests concerned;

b) Augmenting and assisting local promotional and developmentefforts of the members and encouraging sources of capital fortourist accommodation and recreational projects;

c) Providing a liaison between the travel and transportation industriesand all members;

d) Carrying out advertising, promotional, and publicity measurescalculated to focus the attention of the travel industry and travelingpublic upon Pacific Asia as one of the world’s outstandingdestination areas;

e) Encouraging the development of adequate passenger transportationservices and facilities to and within Pacific Asia;

f) Carrying out statistical and research work relating to travel trendsand tourism development, and

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PATA's purposeand activities

g) Negotiating with governments, whether directly or through theappropriate bodies, for an easing of monetary regulations and travelformalities tending to be barriers to tourist travel” (Pacific AsiaTravel Association, 1995, p. 3).

To support these strategies, PATA provides its members with a range ofservices, including:

• Marketing and promotion, through an annual marketing convention,marketing conferences, and fairs and sales missions.

• Product development, by providing member expertise to local andregional government entities to assist them in improving the qualityof their products and services.

• Research and information services, through a research center whichgenerates a variety of reports, studies, and forecasts.

• Human resource development, through work on jobs standards,distance learning, and train-the-trainer workshops.

• Communication and public relations services.

• Membership development.

Other examples of regional tourism organizations include theCaribbean Tourism Organization (CTO), Tourism Council of the SouthPacific (TCSP), and the ASEAN (Association of Southeast AsianNations) Tourism Association (ASEANTA). The CTO is comprised ofnational tourism administrations, while ASEANTA membership isbased on ASEAN, an established regional governmental organization.

Examples of major regional organizations not exclusively devoted totourism, but whose actions with respect to the industry are importantto its member nations, are the European Union (EU) and theAssociation of Southeast Asian Nations (ASEAN). Formed in 1993by the enactment of the Treaty of European Union, or MaastrichtTreaty, the EU represents the culmination of efforts over three decadesto achieve greater economic integration. The EU provides significantfunds to finance tourism-related investment and infrastructureprojects, and to projects that upgrade cultural and historical resources.The funds were directed particularly towards tourism development inregions that are underdeveloped, suffering from economic decline, orconcerned with the development of rural areas.

ASEAN was founded in 1967 in Bangkok by the countries of Indonesia,Singapore, Malaysia, Philippines and Thailand. These original member

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PATA's services

Other regionalorganizations

EU formationand funding

countries were subsequently joined by Brunei (1984) and Vietnam(1995). One of ASEAN’s objectives is the promotion of economic,social, and cultural development of the Southeast-Asian region throughcooperative programs. Tourism, as an increasingly important economicactivity for this region, represents an area of importance for theorganization. ASEAN holds both formal and informal meetings of thetourism ministers of its member countries, which address the followingtypes of issues: facilitating inter-ASEAN travel through specialimmigration procedures at airports; increasing direct air links betweendestinations; facilitating leisure water travel; promoting conventions inASEAN destinations; and improving tourism training programs.

14.4.7 International Bank for Reconstructionand Development (IBRD)

The best-known international organization involved in direct fundingfor tourism-related projects is the IBRD or, as it is more commonlycalled, the World Bank. The World Bank was established in 1945 andis owned by the governments of 174 countries. It is a specializedagency of the United Nations. In general, the World Bank makes loansfor tourism-related infrastructure projects rather than directly totourism projects. Loan recipients are generally countries withdeveloping economies (World Tourism Organization, 1993a).

14.4.8 International Trade in Services and GATSEconomic relations among countries have historically been tied toquestions of national strength, pride, and prerogative. Different tradetheories and practices have been adopted throughout history by nations asa means to greater national strength. Protectionist theories and practicesbasically attempt to protect a nation’s economy by restricting the abilityof foreign goods and services to compete in the domestic market. Thus,for example, the steel industry of protectionist country A can be protectedfrom the steel industry of country B by restricting the importation of B’ssteel, by mandating that manufacturers in country A use a minimumpercentage of domestic steel, and by a variety of other such measures.What this means in practice, of course, is that country B will very likelyimpose restrictive measures on certain products that country A would liketo export. In this way, protectionist strategies are inherently double-edgedin that they invite similar actions by other countries.

Proponents of free-trade theories and practices have noted this fundamentalproblem of protectionism, and argue instead that the free flow of trade

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ASEAN formationand objectives

A direct-fundingorganization

Restricting tradecompetition

ultimately benefits all nations. To continue the example cited above, whilecountry A may indeed experience a decline in its steel industry in a free-trade scenario, a commensurate increase in its exports to country B (paid forby the earnings that B receives from selling its steel to A) will offset thatdecline and, in the long run, result in greater growth for both countries. Free-trade advocates note that each country–due to its natural resources, costs oflabor and capital, and other factors–can be efficient only in certain areas.Because of this fact, free trade and open markets will enable theinternational economic system as a whole to benefit from these efficiencies.Country B may be able to produce steel for half the cost of country A, butA’s citizens will only be able to benefit from this efficiency–they can onlyhave the benefit of paying less for steel and spending more on otherthings–if A and B are in an open trading relationship. One can quickly seehow restrictive or free-trade practices will directly affect the cost of doingbusiness in tourism, ranging from the cost of hotel construction to the costof producing and distributing marketing material.

Commercial treaties are formal agreements that establish rights andconditions of trade relations between the nations signing the treaty.These treaties cover areas such as the property rights of foreignnationals, taxation of foreign investments, debts owed to foreignentities, port regulations, commercial relations during war, and thejurisdiction of consuls. Nations that have significant economicrelationships with each other often establish trade agreements, whichare less formal and permanent than commercial treaties. Tradeagreements cover such areas as tariffs, customs, copyrights,commercial laws and arbitration, and restrictions on specific products.

The most important trade agreement of modern times is the GeneralAgreement on Tariffs and Trade (GATT). GATT grew out of arecognition by many countries of the problems of protectionist policies,especially those that restricted trade during the period between the Firstand Second World Wars. GATT was signed in October 1947 by 23countries, with its administration based in Geneva. As a multilateral tradeagreement, GATT is dedicated to reducing tariffs and other obstacles totrade. Throughout its history, several rounds or trade conferences havebeen held to address various issues and problems. The latest round, begunin Uruguay in 1986, culminated in April 1994 with the dissolution ofGATT and its reorganization as the World Trade Organization.

The significance of the Uruguay Round for tourism was the formation ofthe General Agreement on Trade in Services (GATS). Unlike GATT,which did not address trade in services, GATS is specifically dedicatedto the issues and problems of such trade, including those relating to

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Benefits offree trade

Internationaltrade relations

Importantmultilateral trade

agreement

tourism. GATS took effect on January 1, 1995, and is concerned withgovernmental measures (such as laws, regulations, and administrativeactions) that affect services supplied in the following ways:

• Services supplied from one territory to another (such as touroperations and travel assistance).

• Services supplied in the territory of one party to the consumers ofany other (such as to international visitors).

• Services supplied through the presence of commercial entities ofone party in the territory of another (such as the establishment of abranch office abroad).

• Services provided by nationals of one party in the territory ofanother (such as by consultants) (WTO, 1996b).

The ultimate goal of GATS is for its signatory members to achievefull non-discrimination with respect to services trade among eachother. Through GATS, then, there is a formal, global vehicle forpursuing the reduction of barriers and increased liberalization oftrade in services. GATS represents a significant advance infacilitating international tourism.

An important aspect of GATS is that its Services Sectoral ClassificationList includes a section for Tourism and Travel Related Services. Incontrast to the International Standard Classification of Industries, whichdid not contain such a section, GATS addresses the key issue of statisticalrecognition of the tourist industry. However, because tourist services arediverse, the new section includes only the following subclasses: hotelsand restaurants (including catering), travel agencies and tour operatorsservices, tourist guide services, and other. Business areas such astransportation, hotel construction, car rentals, and computerizedreservations systems are located under other headings (WTO, 1995e).

14.5 Challenges for Tourism OrganizationsDespite the importance of tourism in the world economy, and itsgrowth prospects into the next century, tourism organizations facemany challenges.

• Financial viability. The activities of voluntary tourism organizationsrequire substantial funding. However, when companies or publicagencies face financial constraints, the payment of dues to a voluntaryorganization may seem to be an unnecessary expense. Organizationsthus face a constant challenge in retaining their dues-paying members.Meeting this challenge requires that organizations continually

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Challenges for Tourism Organizations

Concerns andgoals of GATS

Statisticalrecognition oftourism industry

demonstrate to their members the benefits of membership. One waythat organizations have been meeting this challenge is by reducingtheir reliance on membership dues by utilizing other funding sources,such as the sale of research publications.

• Meeting the needs of a diverse membership. To be successful, anorganization must ensure that its mission reflects the needs anddesires of its membership. Given the dynamic and competitivenature of the tourism industry, these needs are likely to changequickly from time to time in response to the current industryenvironment. Membership needs also change as the membersthemselves change and grow. However, when organizations adapttoo quickly in the attempt to be relevant to the immediate needs oftheir membership, often the result is one of structural destabilizationand loss of focus on long term strategies.

• Duplication of efforts. In an effort to serve a diverse group ofmembers whose needs may encompass many different areas of theindustry, an individual organization will likely adopt multipleobjectives or programs of work. Inevitably organizations then beginto duplicate each other’s efforts in the attempt to be as all-encompassing as possible. For the members, such duplication meansthat their dues may be buying similar services from differentorganizations. Thus, tourism organizations face great challenges intrying to maintain a close fit between their central missions,objectives and activities and the needs of their membership.

SUMMARY

As tourism expands, so too does the need for communication andcooperation among the many private and public interests that areinvolved in the industry. Tourism organizations–comprised of publicsector members, private sector members, or both–fulfill this importantrole. They enable an industry that lacks broad-based recognition andsupport to pursue common goals through collective action.

Tourism organizations such as the WTO, WTTC, PATA, CTA and manyothers play a valuable and vital role in world travel. They do this byserving not only the direct needs of their members, but by addressing thelong-term, broader issues such as peace and environmental sustenance inthe interest of the entire industry and the world community.

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1. What are the three major types of international tourismorganizations presented in this chapter?

2. What are some of the different purposes and objectives ofinternational tourism organizations?

3. What is the role and importance of the WTO?

4. What are some of the challenges that will face tourismorganizations in the future?

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Summary

Chapter 15

Tourism Planning and Destination Development

Learning objectives

• To understand why tourism planning is important and necessary.

• To understand the forces that shape the tourism planning process.

• To identify the major elements of a tourism plan.

• To understand the concept of master or comprehensive planning and its

value for tourism development.


action plan

business and legal environment

destination planning

economic and financial analysis

impact analysis

master plan

planning

supply and demand analysis

15.1 IntroductionAs the economic bases of many countries are increasingly challengedby world markets and technology, many governments see tourism as amajor opportunity for economic development and a tool for creating abetter community. The reliance on tourism as a tool for development isbased on such evidence as tourism’s effectiveness as an engine ofemployment, a means of wealth redistribution, and its potential inrestoring blighted areas in a community. Communities and regionsvary widely in their economic development life cycle. Some arethriving, while others are attempting to reverse the process ofcommunity and economic decline. In these latter instances, thephysical environment of a community may be deteriorating andcommunity spirit low; tourism therefore becomes a potentiallyattractive replacement for businesses that have shut down or movedaway. Unfortunately, a great many communities have pursued tourismdevelopment either without planning or without considering largerplanning or community economic development processes.

This chapter will examine tourism planning approaches and discuss therole of tourism planning within the broader context of communityeconomic development. Planning seeks to simultaneously preventnegative impacts and meet the goals and objectives of a community. The

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15Tourism Planning and

Destination Development

Necessity ofplanning

Preventingnegative impactsand meeting goals

planning process discussed here is concerned with ensuring sustainabletourism development that respects local populations, createsappropriate employment, maintains the natural environment, anddelivers a quality visitor experience. These sustainable developmentgoals have made the planning process far more complex than earlierplanning efforts, which were driven primarily by economic imperatives.

This chapter also discusses the process and essential aspects ofplanning a destination. It looks at the elements of a plan and thecontext of creating one. Destination planning involves many partieswith different perspectives, including governmental bodies and privateinvestors and developers. In addition, governments are increasinglymaking an effort to ensure public participation through involving localcommunities or their representatives in planning. Given the diverseinterests of all these parties, the range of different destinations, and themany types of possible development, the subject of planning is quiteextensive. Because of the comprehensive nature of destinationplanning, there will be numerous occasions throughout this chapter forthe reader to refer to other chapters in the text. In this way, the readercan better understand how the actual process of planning mustsimilarly take into account the relationships among all elements of adestination.

15.2 The Forms of Tourism PlanningIn general terms, planning “is organizing the future to achieve certainobjectives” (Inskeep, 1991, p. 25). However, there are many differentforms of planning, including:

• Economic development planning, which is primarily concernedwith facilitating the development of various industries and sectors.

• Land use planning, which structures the uses of land through toolssuch as zoning codes.

• Infrastructure planning, which deals with roads, airports, andutilities such as power, water, and sewer.

• Social services planning, which deals with issues such asemployment, public health, education, and social welfare.

• Safety planning, which addresses internal security problems, crimecontrol, risk coverage, and special provisions for tourists whorequire speedy remedies.

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Chapter 15: Tourism Planning and Destination Development

Planning adestination

15.2.1 Tourism and Economic DevelopmentTourism planning can be viewed as a form of economic developmentplanning that is directed towards tourism-related objectives. Examplesof tourism planning include:

• A plan to increase the foreign exchange earnings of a nation byencouraging the growth of tourism.

• A plan to designate specific areas for the development of resorts.

• A plan to improve local employment through the tourism industry.

The plans listed above generally involve public resources andobjectives, such as the creation of land use controls, the construction ofa network of highways, and the provision of affordable housing toresidents. Consequently, most planning is done by the government. Atthe national level, government planning may take place within theindividual ministries or departments that comprise the government,such as a ministry of tourism, or it may be assumed by a centralizedplanning department. Government planning is performed both by staffplanners and by private consultants and specialists who are contractedto consider policy implications and the public interest. Private sectorplanning activities generally occur at the investment level withspecialists in various aspects of product development, building,finance, marketing, management and operations providing technicalinformation and expertise to the planning process.

The research and study involved in a tourism plan can require theparticipation of many different specialists and professionals. Overallresponsibility for the planning process generally is given to a planningspecialist. Depending on the scope of the plan, the planner will use andcoordinate the work of economists, marketing specialists, transportationspecialists, ecologists or environmental specialists, sociologists,archaeologists, human resources specialists, and architects and engineers.Participation by such professionals can be particularly extensive in theproduction of master or comprehensive plans (see discussion below).

The end product of planning is generally a formal document, or plan,that is intended to guide further activity. A plan is often targeted atpersons involved in the policy making process, such as legislators andadministrators. Such a plan might include model legislation,regulations, and other types of policy directives. A plan can also bedesigned to guide private sector activity such as development andfinancing with timetables or specific land use designations.

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The Forms of Tourism Planning

Public andprivateplanning

Planningspecialist andotherprofessionals

Plans

As discussed in Chapter 14, the WTO provides support and personnelto assist the tourism planning efforts of nations. This assistance can beboth direct (as in the use of planners and other professionals to conductthe plans and studies) or indirect (by training personnel to conduct theirown planning). Examples include:

• A five-year promotional plan for Honduras.

• A tourism master plan and six-year development program for Ethiopia.

• Training for tourism officials in Uganda in techniques of planningand marketing.

• Training for staff of the Rwandan national tourism administrationand recommendations for legislative and regulatory initiatives.

• Specific, medium-term programs and policies in various tourism-related areas for incorporation into national and regional economicdevelopment plans in the Philippines.

• Plans for the Sri Lankan Convention Bureau in the areas of membershipdevelopment, financing, marketing, and manpower structure.

• Training for tourism officials in Oman to effectively implementtourism plans.

15.2.2 Tourism Master PlanningThe term “master plan” or “comprehensive master plan” has beenused extensively in reference to tourism planning. In general, it definesa strategic plan that integrates all aspects of tourism development,including human resources, environmental impacts, and social andcultural impacts. The master plan considers the long term implications ofdecisions and their risk and return to a community or destination.Depending on the nature of the tourism master plan, whether it is oneintended for tourism development in general or whether it is one whosepurpose is more specific (such as to guide the physical development ofa new resort area), the topics and levels of research will vary widely. Allmaster plans are designed to cover the span of a development period(e.g., a five-year plan, a ten-year plan or other time frame) or aninvestment period when land acquisition, construction, operation andfinancing are laid out as critical points for guiding decisions at each step.

15.3 The Need for Tourism PlanningTourism planning has assumed a greater role in tourism developmentas governments recognize not only that tourism generates a widespectrum of impacts, but also its potential for social and cultural

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WTO assistance

Long-termdevelopment

expression and revitalization. As more governments expand their goalsand expectations of tourism development beyond its economicbenefits, planning becomes more important to the success of achievingthose goals and meeting those expectations.

It is not only public goals and expectations that have brought prominenceto planning, however. As the industry itself grows and matures, the travelmarket is becoming more sophisticated and discerning. This, in turn,places greater pressure upon developers to use planning as a means ofcreating quality destinations. It is no longer sufficient to simply buildattractions and accommodations in today’s highly competitive market.As the number of destinations grows and visitors become more selectiveabout choosing locations that offer quality and value, the market willshun poorly planned destinations. Thus, both public and private interestsare converging towards a position that sees tourism planning as essential.

Critics of planning are skeptical about its effectiveness and point to thenumerous plans that were never consulted or used. In many cases, thisskepticism derives from older planning practices which tended to focus ondeveloping regulatory procedures instead of creating suitable mechanismsfor achieving goals. In addition, planning tools such as master plans andland development control systems centered on zoning and developmentincentive systems. These tools were used without appropriate residentparticipation or recognition of the complexity of the tourism setting andthe needs of the host community. In some cases, master plans attemptedto freeze a destination at a particular time frame without taking intoaccount the dynamic nature of economic and social systems. To avoidthese problems, more dynamic and participative planning approaches arebeing used to achieve sustainable tourism development.

Despite the difficulties of and resistance to planning faced by tourismplanners, there is widespread agreement that tourism planning serves avaluable purpose by addressing the following issues:

• The need to have a common vision, direction and commitment fortourism established through a participative process of involvingmany stakeholders.

• Tourism’s sociocultural and environmental impacts, and the need fora long-term perspective in assessing those impacts.

• Resource problems faced by communities that may not have the politicalframework or trained labor force to create a service based industry.

• Destination survival in an increasingly competitive market, and theneed to respond to changes in the travel market.

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The Need for Tourism Planning

Importance tosuccess

Skepticism due toolder planningmethods

Planning issuesaddressed

• The rapid pace of change in the tourism industry in areas such astransportation and communications.

• The need to provide the private sector, especially those partiesproviding investment funds, with a certain level of stability andpredictability in the progress of the overall development.

15.4 Levels of Tourism Planning in the Public Sector

Tourism planning occurs at different levels within the government. Theissues and concerns faced by tourism planners vary with the level of theplanning activity. Generally, broader issues are treated at the national level,while local planning is directed towards more specific locations and issues.At the national level, for example, the goal might be to create a nationaltourism policy statement which designates broad regions or areas for futuredevelopment, while local planning may involve building design standardsfor a specific resort area. In some cases there is competition among variouslevels of government for control over tourism development, and conflictbetween local planning and regional and national tourism goals. Althoughthere are numerous international organizations concerned with tourism (asdiscussed in Chapter 14), planning activity tends to be country orcommunity specific, mainly because it is at that level where sovereigntyrights and the ability to take direct action lie.

15.4.1 National PlanningA primary function of national tourism planning is the developmentand administration of national tourism policies. As is discussed ingreater detail in Chapter 13, tourism policy plays a key role in guidingtourism development according to the needs of the host communityand nation. Creating a structure for the administration of policy is alsoa critical aspect of national-level planning. Other important tasksusually handled at the national level include: physical planning thatidentifies and designates major tourist attractions, regions for tourismdevelopment, and transportation lines; creating national standards inareas such as health, safety, and employment; and conducting research,statistical analysis, and forecasting.

15.4.2 Local PlanningIn general, as tourism planning progresses towards actualimplementation, the lower levels of government become increasinglyinvolved. This may involve provincial or state governments at a

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Levels of publicplanning

Policies andinfrastructure

secondary level and local municipal governments at the lowest levels.However, it is important to note that there is often a close relationshipbetween the levels of government. For example, the local governmentmay be charged with the responsibility of imposing on tourismemployers certain employee health and safety rules that have beenformed at the national level. Examples of areas usually associated withlocal tourism planning include the following:

• Creating and enforcing zoning policies, including site planning andthe design of buildings and landscaping.

• Establishing and enforcing environmental regulations.

• Facilitating the participation of all interest groups in tourism.

• Local infrastructure planning, including energy requirements andallocation to tourism.

• Providing public access to use amenities which are privately built.

• Providing services for visitors and residents.

• Education, training, and other human resources services.

• Financing tourism development.

• Marketing and promotion of the local destination.

• Taxation issues.

In many cases the degree of government involvement during theplanning process will change over time. For example, when a localgovernment determines a master planned area and acts as the maindeveloper, its initial involvement will be significant and controlling.The municipality or state will hire the architects, engineers, and othersuch consultants and direct their work. As the project progresses, thegovernment gradually withdraws into the background and encouragesprivate sector companies to take the lead in arranging financing, hiringconsultants, and ultimately building and operating the facilities.

15.4.3 Destination PlanningThe term “destination planning” is generally used to refer to planningfor a geographical region that possesses sufficient facilities, attractions,infrastructure and work force to attract visitors (Gunn, 1994, p. 27).Thus, depending on the nature of tourism development and the area inquestion, a destination may be regional in scope, encompassing manyresort areas and communities, or it may be local. The term“development project area” can also be used to denote a destination.

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Levels of Tourism Planning in the Public Sector

Implementationof plan

Shifts ininvolvement

Developmentproject area

For example, the South Antalya tourism development project area inTurkey encompasses an area that includes seven villages and threeancient cities (Inskeep & World Tourism Organization, 1991).

Whatever the size of the destination, its key characteristic is that itrepresents an integrated area, including the actual site of the tourismaccommodations, visitor attractions, resident communities that provideemployment, and the transportation links among them. Thus, inaddition to the planning of a specific resort or resort area, destinationplanning also involves consideration of issues such as transportation,water and sewer infrastructure, and human resources development.

15.5 Actors Involved in the Planning Process

Tourism planning is a challenging endeavor, considering the diversityof organizations and individuals that act as service providers of thetourism experience, and the complexity of the tourism system. Inaddition, there are differing levels of control over tourism relatedresources, many plans and planning processes in the private and publicsectors, and public and common goods that are shared by residents andtourists that need to be managed fairly. To address these factors,individuals and groups who have a key “stake” in the tourismdomain–those who are impacted by, or have the ability to influence thedirection and outcomes, of tourism–are involved in the planning andimplementation of tourism actions and activities. Some of the actorswho are included in the planning process include:

• Residents of the host destination area.

• Environmental advocacy groups.

• Tourism-related and non-tourism-related businesses.

• Politicians and other elected officials.

• Major business interest and lobby groups.

• Labor unions and other employee representatives.

• Government officials involved with tourism regulation anddevelopment.

Each of these actors brings a particular set of needs, knowledge, andperspectives to the decision making table. Their involvement at an

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Key actors

early stage in the process is important in order to generate support andcommitment to the process, and thus reduce the chances of laterresistance by an actor who has not been involved.

15.6 Organizing the Planning andDevelopment Process

An enormous amount of data and analysis goes into the planning anddevelopment process. While there are many ways of organizing theprocess, most planning generally adheres to the following basic steps:

• Defining the Goals and Objectives of Development - This first stepis important because the decisions made at this point guide the restof the planning process. Current planning practice favors theinclusion of a broad spectrum of interests during this step of theprocess. The following questions are discussed and answered inorder for the planning process to go forward:

- Why do we want to develop tourism?

- What kinds of benefits do we expect from tourism?

- What kind of tourism and visitor do we want?

- Do we want to place limits on tourism growth?

- What is our time frame for development?

• Gathering Relevant Data - In this phase, research, surveys, and othermethods of fact-finding are pursued in order to accumulate all of therelevant data mentioned above.

• Analyzing the Data - The data is then organized and analyzed andbasic recommendations and parameters are set. For example, theanalysis may show that any interference with shoreline access willlikely be met with resistance by local residents. A recommendationcan then be drafted which guides the site planning to ensure thatsuch interference will not occur.

• Preliminary Plan Draft, Review, and Revision - On the basis of thedata and analysis, a preliminary plan is drafted. The plan willinclude site (land use) plans, development schedules, designsketches, and financial projections. The preliminary plan then goesthrough the process of review and revision, as it is further refined.Often, there will be opportunities for public review at this point.

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Organizing the Planning and Development Process

Need forinvolvement

Planning steps

• Finalizing the Plan, Implementation, and Monitoring - After all ofthe revisions have been incorporated and approved, the final plan isdrafted and becomes the working document guiding theimplementation of the plan. The final plan will include all of thedetail necessary to provide guidance to the developers.

15.7 Elements of a Tourism PlanDestination planning can vary from one project to another, due to factorssuch as the type of destination being developed, its current level ofdevelopment, and the theory or style of planning being used. Regardlessof the exact planning style adopted, a destination plan will generallyinclude analysis of the following areas: tourism demand, tourism supply,tourism impacts, economic and financial issues, and an action plan.

15.7.1 Demand AnalysisDemand analysis examines the existing and intended visitor markets ofthe destination. It also includes regional and global travel patterns andtrends, since these will also affect the ability and willingness of peopleto visit the destination. The basic premise of demand analysis is thatthe destination must be planned with the visitor in mind, and that it isno longer prudent to follow a supplier mentally, which takes a “build itand they will come” approach.

Market Analysis

Increasing competition among destinations requires knowledge ofchanging trends in the visitor market. A destination that offers sun, sea,and surf now has a multitude of competitors, as do other types ofdestinations. Differentiating one tourism destination from anotherrequires greater and more sophisticated marketing information andtechniques to ensure a proper “fit” between what is offered and whatvisitors want. Market analysis is therefore crucial for planners anddevelopers. Two key components of a market analysis include:

- Tourist arrivals and characteristics, including information on avisitor’s place of origin, demographic and socioeconomic profile,travel itinerary, purpose of visit, length of stay, and spendingpatterns. These are discussed in Chapter 7.

- Travel patterns and trends, which should place the destination andits visitor profile within the context of general travel patterns andtrends which are discussed in Chapter 2. An assessment of the broad

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Examination ofintended visitor

markets

Matching visitorwith destination

market includes historical travel patterns, recent growth markets,and changes in the industry that may have a significant impact (suchas recent technological innovations which have affected howtravelers make their reservations).

15.7.2 Supply AnalysisSupply analysis examines the destination itself–its attractions,accommodations, and facilities. The goal of a supply analysis is to havea complete understanding of what visitors will be presented with fromthe moment they enter the destination area. Most importantly, this willinvolve a close look at what the destination intends to market as itsattractions. In addition, however, it will also be necessary to examineareas such as transportation networks, infrastructure, and manpower,since these have a direct and large impact on the quality of the visitorexperience. Supply analysis can also include a discussion of thebusiness and political-legal environment of the destination area.

Site Selection

If the purpose of the destination plan is to guide new development inan undeveloped area, a supply analysis would be oriented to theplanned, rather than the existing, tourism product. Thus, rather than anassessment of existing hotel accommodations (which may be limited ornonexistent), such an analysis might look at various locations for theproposed hotels and commercial buildings. The following are criteriaused to assess potential integrated hotel resorts:

- Proximity of the site to tourist attraction features.

- Desirability of the site’s micro-climate.

- Attractiveness of the physical environment of the site.

- Availability of land that can be feasibly developed.

- Access to major tourist gateways and regional attractions.

- Adequate transportation and utilities infrastructure.

- Absence of environmentally vulnerable areas at the site.

- Receptivity and feelings of the resident population to the industry.

- Availability of a local work force and sufficient housing.

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Elements of a Tourism Plan

Examination ofthe destination

Assessment ofplanneddevelopment

Inventory of Existing Attractions

An attraction can be defined as a facility or location that is “plannedand managed for visitor interest, activity, and enjoyment” (Gunn, 1994,p. 58). The purpose of this element is to make a comprehensive list ofall of the attractions that the destination currently offers its visitors.The inventory would examine the types of attractions, their locationand accessibility, their condition, and any other aspects that might berelevant to visitors. Attractions can be organized in a number ofdifferent ways, including ownership (public vs. private) and the type ofvisitor the attraction appeals to.

Inventory of Facilities, Services and Infrastructure

Although tourists are generally not attracted to a destination by itssupporting facilities and services, they are nevertheless crucial to theoverall quality of the visitor experience. The inventory notes specificdetails about support facilities and services, such as the number andlocation of places to make currency exchanges, in order to provideplanners and developers with a complete picture of the destination’scurrent capabilities. The quality and scale of support facilities andservices is closely related to projections of the destination’s capacity, ormaximum volume of visitors its facilities and infrastructure canhandle. Capacity problems often occur where the development ofaccommodations outpaces transportation and infrastructureimprovements. With detailed information from the inventory, plannerscan avoid such problems by properly scheduling development phases.Major components of an inventory include:

- Tourist facilities and services. These include entry and exit facilitiesand services such as airports, baggage handling, customs, andcheck-in procedures, the availability and quality ofaccommodations, dining, entertainment and shopping amenities andthe destination’s ability to provide for the safety and security of itsvisitors, including the availability of medical facilities.

- Infrastructure. These are the facilities generally owned by thegovernment or utility company that support tourism development andactivities. There are two important characteristics of infrastructure:first, they tend to be large and capital-intensive, and second, theysupport both the visitor and resident communities. Because of thesetwo factors infrastructure development raises difficult questions, oneof which is how to allocate the cost of an infrastructure project

332


Assessing site'scurrent

capabilities

Supporting bothvisitors and

residents

between public and private funds. Elements that are generally coveredin an analysis of infrastructure include facilities and services such asairports, harbors, roads, public transportation, water supply, power,sewage, solid waste disposal, and telecommunications.

Business and Legal Environment

The business and legal environment of a destination can have asignificant impact on the development process. For this reason, there is adiscussion of topics such as the existing structure of government, theexistence and functions of any government tourism organizations, andcurrent laws, policies, and regulations as they apply to tourism,development, and investment. In many destinations, a basic issue is theexisting system of property rights. Can foreign entities own property? Ifnot, how will ownership and control issues be addressed? From theprivate sector’s perspective, an important factor is the process by which adeveloper obtains all the necessary approvals and permits to startconstruction, and the approval process for businesses to start operations.Local politics can be a major factor in these permitting processes. Finally,the tax laws of the destination will have an impact on the financial aspectsof the project. For example, many destinations place a higher tax burdenon visitors by imposing hotel taxes and other types of additional fees.

15.7.3 Tourism Impact AnalysisAnticipating the impacts of development is one of the most crucialfunctions of a tourism plan. An assessment of the environmental impactsof development has become a standard and, in many places, required partof the planning process. Equally important is a consideration of thesociocultural impacts (which was discussed in Chapter 11) of thedevelopment. These impacts are more difficult to anticipate and quantify,but the experience of many destinations has shown that the effects oftourism on a society’s culture and people play a vital role in its success.

For many countries and areas, tourism constitutes one of the mostenvironmentally friendly industries that can be realistically achieved.Tourism does not require the kinds of activities that have traditionallybeen associated with environmental degradation, such as large-scaleexcavation (mining and extraction), release of pollutants into the waterand air (refining, manufacturing), or the use of pesticides andherbicides (agriculture). Like much of the service sector it is normallyconsidered a part of, tourism is a relatively “clean” industry in terms ofits environmental impacts.

333


Laws, policies,permits andapprovals

Environmentaland culturalimpacts

"Clean" industry

Nevertheless, tourism has definite and measurable impacts. Theseimpacts are perhaps even more significant when one considers thatmuch of tourism’s appeal relies on the quality of the environment itself.The goal of sustainable development, which is discussed in Chapter 12,demands that destinations place a high priority on the environment.There has also been a trend toward expanding the definition of whatconstitutes an environmental impact. The following list reflects theareas covered in an environmental impact statement for a proposedconvention center development:

- Project description: physical characteristics; estimated cost;construction schedule.

- Physical environment impacts: region; climate; existing land uses;project site; geology and topography; soils; flooding; water quality;hazardous materials and waste; botanical resources; terrestrialfauna; archaeological, cultural, and historic resources; air quality;noise; radio frequency interference; scenic and visual resources.

- Socioeconomic impacts: social impacts; employment; economicand fiscal impacts.

- Infrastructure and public facilities: traffic and transportation; wastewater;water supply; drainage; electrical power and communication; solid waste;police protection; fire protection; emergency services; education andchild care; recreational resources; health care facilities.

- Conformance with existing plans, policies, and controls: state level;county level; environmental regulations.

- Alternatives to the proposed development.

- Long-range and unresolved issues: irreversible resource commitments;long-term productivity; unavoidable adverse environmental affects(Nordic/PCL & Wilson Okamoto & Associates, 1995).

Environmental assessments of this type require the services of manyspecialized consultants and professionals, including archaeologists andsoils engineers, and highly specialized tests, such as traffic modelingand noise impact studies.

With regard to the issue of the industry’s sociocultural impacts, thepressures and changes that tourism brings to bear upon population groupsthat have remained outside of the modern market economy can besignificant. Again, as in the case of the environment, these pressures and

334


Environmentalconcerns

changes become all the more important in light of the fact that a particulardestination may base its appeal on the local population and its culture.

The sociocultural impacts assessment begins with the collection ofdemographic data (birth and death rates, age profile, marriage patterns,family size), economic data (personal incomes, source of incomes, householdsizes), health data (disease rates, life expectancy), social indicators (crimestatistics, educational levels), and cultural beliefs and practices. Based on thisdata, the plan can address issues such as the following:

- To what extent is the society dependent upon a more traditionaleconomy (e.g., barter) rather than a cash-based market economy?

- How will existing family structures and patterns fit with the possibleemployment of family members? This issue has proven to beparticularly important in traditional patriarchal societies wherewomen have entered the work force for the first time, and develop asocial and economic network outside of the family.

- How do the residents feel about the uses to which the land will beput (in particular, the construction of accommodations andcommercial facilities)? Will the construction alter their access or useof shoreline and other areas?

- How do residents feel about performing cultural practices beforeforeigners? About selling traditional artifacts and wares?

- Is the local society relatively egalitarian, or are there clear divisionsamong various strata? How might this affect their willingness andability to work in service-related positions?

- How might the availability and use of consumer goods affect thelocal society? How might they react to visitors whose consumptionpatterns reflect a much higher standard of living?

In recent years, the issues related to environmental and socioeconomicimpacts have become more pressing as more destinations turn toecotourism. Ecotourism (which is discussed in detail in Chapter 6) isintended to give the visitor a closer and more authentic experience ofthe destination. In so doing, however, it also places both visitor and thelocal environment and culture in much closer contact. In some cases,this has worked to the detriment of the local society, which by itsopenness to the visitor is now more vulnerable. The market forecotourism continues to grow, however, and thus these impacts willcontinue to be important for both visitors and local societies to consider.

335


Socioculturalissues

15.7.4 Economic and Financial AnalysisTourism development must be financially feasible for both the hostarea’s government and the private sector in order for it to provide anyeconomic benefits to the host community. Of particular concern to thegovernment will be the extent to which the development will provideeconomic benefits, such as an increased standard of living and higheremployment, to the host area.

For most destinations, the prospect of greater economic activity andstrength is the first and primary reason for tourism development.Ideally, every dollar of visitor expenditures will be retained and extendthroughout the local economy, creating spending, jobs, and wealth. Inorder to devise strategies to facilitate this outcome, the economic andfinancial aspects of the development, grounded in the information ondemand and supply, is assessed.

From the government’s perspective the industry’s ability to generateincreased economic benefits for the local community is of centralimportance. Some of the questions that are important to the publicsector in an economic and financial analysis include:

- What kind (in terms of socioeconomic level) of visitor is tourismlikely to attract?

- What are the spending habits of this type of visitor?

- Are there products and services that this visitor values andpurchases? If not, will they need to be imported? What will be thelikely cost of such imports?

- Does the work force have the requisite skills and training to supplythe industry with labor? How much will education and training cost?Will there be a need to import certain segments of the labor force?If so, what kinds of costs will be associated with that?

From the private sector’s standpoint, the risk and profitability of aproject need to be carefully projected. Examples of questions that areimportant to the private sector are:

- Are there sufficient local sources of capital for the planned projects?

- Are there restrictions on foreign ownership or control of land? Willthese restrictions affect the ability to obtain financing?

- What are the prevailing wage rates of the local population? Is therea pool of managerial-level workers that can staff the facilities?

336


Economicbenefits

Analyzingfinances

Risk andprofitability

The funding requirements for destination development are usuallyaddressed carefully in the planning process. Although government isoften responsible for funding items such as infrastructure andeducation and training, while the private sector funds accommodationsand other facilities, the actual funding will vary with the circumstancesof each project. Less-developed areas with limited access to bothpublic and private capital can apply for assistance from variousregional and international organizations, such as the AsianDevelopment Bank and the World Bank (see Chapter 14). These typesof organizations also provide funding for the planning process itself.

15.7.5 Action Plan and RecommendationsThe action plan is the culmination of the planning process and willvary with the goals of the plan itself. The goal of this section is tosynthesize all of the data and analysis into a viable plan of action forthe various parties involved in the development. This section of theplan can include strategies, guidelines, recommendations, schedules,and even legislation and other formal documents. Often, the actionplan will include a combination of some or all of these products.

An example of an element that might be included in this section is agraph that represents a time-specific action plan, with details on thesequencing and timing of objectives. Another example would bedevelopment and design standards, or even model legislation, which agovernment could use to control the development of the destinationarea and covering areas such as building density, building height,building setbacks from property boundaries, shorelines, and roads, theallowable floor area ratio of buildings, the allowable building footprintor site coverage, parking requirements, and other requirements in areassuch as landscaping (WTO, 1994e, p. 52).

These types of development guidelines are important for undevelopedareas, many of which do not have zoning codes in place during theplanning process. In this way, a plan can have an impact beyond its ownproject area and assist a destination area’s government in ensuring thatthe groundwork for tourism development is laid.

15.8 Factors Affecting Tourism PlanningTourism planning, as a complex activity that involves many differentparties, is subject to a number of pressures and factors that can influencethe planning process and the persons involved in it. These pressures can

337

Factors Affecting Tourism Planning

Funding

Synthesis of data

Guidelinedevelopment

be particularly numerous and forceful in cases where there is anexpectation that tourism will solve a range of economic and socialproblems. Unfortunately, this expectation often occurs in communitiesthat are economically depressed which in turn creates budget constraintsthat reduce the ability of government to fund and support the industry. Insome communities, on the other hand, government planning efforts areconstrained not by funds but by pressure to lessen planning regulation andto leave the development of tourism to the private sector. In these cases,often there is the fear on the part of individual businesses that cooperationand planning with others will lessen their individual competitiveness.

Sometimes tourism planning must contend with skepticism of the needfor and benefits of tourism on the part of residents. Residents may bewary of the negative impacts of tourism development. A common andoften powerful factor in tourism planning results from pressure toprotect the environment on the part of the public and, in particular, byenvironmental groups. Planners deal with public skepticism andinterest group pressures by encouraging wide participation and input inthe planning process. However, the complexity and cost of setting up aplanning process and structure that provides for extensive participationand input can be quite high. Finally, the planning process must dealwith the ongoing, market-related competitive pressures resulting fromconstantly changing technology, the emergence of new destinations,and changing preferences of visitors.

SUMMARY

A successful tourist destination rarely happens by accident. Rather, itis the product of careful planning in a number of critical areas. In acomprehensive analysis of the development of a visitor destination,these areas range from the visitors themselves to the localinfrastructure. The experience of many destinations has demonstratedthat such a comprehensive analysis is necessary to anticipate the widerange of impacts that tourism brings to a society. In the past, tourismplanning had often been reactive due to the inherent difficulties ofdealing with the future and to the nature of the organizations in whichmany planners have worked. Because of the difficulties of forecastingand projecting the future, plans and policies often did not meet theirstated goals and in many cases also brought about unexpected results.The resulting crisis in planning, as well as the accumulated experiencein this area, has brought about a more realistic view of the limitations

338


Expectationsand fears

Public skepticismand interest

groups

of planning, led to the development of planning mechanisms that dealwith uncertainty and change, and produced a better quality of planningproduct and process.

Experience has also shown that planning is critical to the long-termeconomic viability of the industry. Sooner or later, the problems of anunplanned destination will become apparent to its tourists, who, intoday’s competitive market, will opt for other destinations. Planning adestination according to the principles discussed in this chapter can betime-consuming and contentious, as various parties–developers,government, the local population–press for their own goals. However,the process itself is designed to bring issues out before decisions aremade, construction begins, and mistakes become costly or irrevocable.


1. Why is tourism planning important?

2. What are the levels of tourism planning?

3. Who are the actors involved in the planning process?

4. What are the major elements of a destination plan?

5. How is tourism planning usually organized?

6. What is the purpose of a tourism impact analysis?

339

SUMMARY

CHAPTER 16

Tourism Human Resources Planning and Development

Learning objectives

• To understand the importance of human resources in the global tourism

industry.

• To be aware of how human resources needs are assessed.

• To understand the relationship between tourism human resources needs

and human resources development through tourism education and training

programs.

• To understand the impacts of global political, economic, and social

trends on human resources.


academic programs

advanced management programs

certification

cross-border labor flow

cross-functional skills

human resources planning

skill standards

vocational programs

16.1 IntroductionTourism is essentially a service business, and the many people whom avisitor encounters and relies on to provide for basic needs and entertainmentare critical to the success of a tourism destination. Tourism is also thebusiness of hospitality, therefore, when service is provided, the friendlinessof the service delivery matters. It is an axiom that people don’t go wherethey do not feel welcomed. Thus the roles of host and guest define in largemeasure the memorableness of the visitor experience and determineswhether there will be repeat business. Professionalism, effective skills,efficiency, and courtesy as service characteristics do not happen in avacuum–they are the result of education and training investments.

Recognizing that workers as providers of service are essential to the industry’ssuccess, governments are working actively with industry to establishemployment policies and skill standards to meet the needs of an increasinglycompetitive global environment. Education and training providers, who nowdeliver an array of programs and courses, are also examining their curriculain the context of real world skills and knowledge needs.

This chapter will examine aspects of tourism’s human resources or workforce, as well as the nature of service in the tourism industry. It willdiscuss the importance and methods of assessing human resources needsin the industry, for both new and existing destinations, and the role

341

16Tourism Human Resources

Planning and Development

Hospitality andservice business

Workers:essential tosuccess

education and training providers play in human resources development.It concludes with a look at some of the global issues that will affect thetourism industry and tourism human resources in the future.

16.2 Human Resources PlanningHuman resources planning and development has been defined as “asystematic approach to ensure that the right people are in the right job atthe right time” (Inskeep, 1991, p. 403). Because tourism is a serviceactivity and depends heavily on the people who work in the industry,knowing how many people are needed to fill current and future positionsand what attitudes, skills, and knowledge the people who fill thosepositions should possess is important in tourism development. Besides thequantification aspect, human resources development must also be sensitiveto the sociocultural environments of the community and host society.

In the past, human resources development was often neglected intourism destination planning. The assumption was that once tourismprojects were completed, it would be easy enough to find labor and to dointense, short-term training to prepare people for jobs. This view hasproven to be shortsighted, and in countries with scarcity of either laboror skills or both, the success of tourism enterprises was put into jeopardyas solutions to import labor and skills were not only costly, but usuallymet with government opposition. Tourism is a growth industry for manycountries and regions, and human resources planning is seen as essentialin balancing labor supply and demand and in developing and sustaininga quality tourism product. The WTO-sponsored “Madrid Declaration onHuman Resources Development” in 1996 noted the urgency in the needfor qualified human resources in the tourism industry.

Government strategies related to human resources development cutacross a wide range of activities including education and training,immigration, wages, and other work-related incentives and controls.Human resources planning involves:

• Evaluating the present utilization of human resources in tourism andidentifying any existing problems and needs.

• Projecting the future human resources needed by estimating thenumber of personnel required in each category of employment anddetermining the qualifications for each category of job.

• Evaluating the human resources available in the future.

• Formulating the education and training programs required to providethe requisite qualified human resources (Inskeep, 1991, p. 404).

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Chapter 16: Tourism Human Resources Planning and Development

Importance ofplanning

16.2.1 Assessing Labor DemandIn assessing tourism human resources, all levels of tourism positions inevery sector must be considered including managers and nonmanagersfor hotels, food service, attractions, transportation, tour and traveloperations, personal service, and government tourism administration.The information obtained includes job classifications, number ofemployees, and work force demographic information such as age,education level, residence, and national origin. Problem areas, if theyexist, are identified and described such as the number of availableworkers, worker qualifications, high turnover, or lack of training.

Projecting human resources demand can be done by using expected touristarrivals and number of lodging units and other facilities to be used to meetthis demand. A common technique to obtain gross human resourcesprojections is to use ratios such as the number of jobs per lodging unit. Forexample, a ratio of 1.5:1 means 150 jobs for 100 rooms. Types of servicewill also influence different types of jobs. For example, sightseeing tourismrequires more guides and drivers, while beach tourism, more lifeguards anddiving instructors. An active government role in tourism will also createpublic service jobs linked with tourism, for instance, in marketing andpromotion, research, convention bureau management and other areas.

16.2.2 Assessing Labor SupplyAn accurate projection of human resources supply and demand canhelp reduce the need for migration of the work force to seek or fill jobsthrough better planning. Migration takes place when there areimbalances of seasonal demand or structural supply of workers fortourism. Cross-border labor flow often reflects the disparate needs ofcountries at different levels of development, with industrialized nationsdrawing immigrant labor to fill lower paid positions for which the hostcountry has no available workers. These positions may also not be inline with the career expectations of resident workers of the hostcountry. Developing nations often have to bring in expatriate managersto fill the top positions in the tourism industry because there is no localpool of management talent. Even for industrialized countries, fillingmanagement and professional positions may be difficult as otherindustries compete with tourism and draw employees from this pool.

In planning an area’s tourism human resources, decisions need to be maderegarding the number of people that are going to be brought in, thequalifications needed, and the social implications of having immigrantlabor. Cross-border labor flows have been increasing, especially in Asia-

343

Human Resources Planning

Assessing allpositions levels

Projectingdemand

Immigrant laborand expatriatemanagers

Pacific countries. In such labor-short countries or locales as Taiwan, HongKong, Singapore and Malaysia, migrants provide a partial solution inmeeting the demand for workers. By contrast, countries such as China,Philippines, Sri Lanka, India, and Bangladesh experience labor surpluses.Recent studies of travel and tourism industry human resources in Asia-Pacific countries found more than half the employers surveyed indicatedthat they have a moderate to serious problem in recruiting management andskilled/semi-skilled workers, due in part to the rapid growth in the industry.They also reported that filling professional positions was also a seriousproblem. However, most employers had no trouble filling unskilledpositions (American Express Foundation & the World Travel and TourismCouncil, 1993, p. 8; American Express Foundation & the Pacific Asia TravelAssociation, 1994, p. 7). Similar results were found in a study on humanresources for Latin America’s travel and tourism industry (AmericanExpress Foundation & the World Travel and Tourism Council, 1996).

16.3 Tourism Employment and Career Opportunities

The employment and career opportunities available in tourism-relatedactivities are as varied as the industrial sectors which comprise thetourism and travel industry. These diverse sectors (discussed in Chapter 8)provide a wide and varied range of occupations. Although there are noindustry sectors which are entirely dependent on tourism, there have beennumerous attempts to develop a classification framework to identifyeconomic activities related to tourism. The World Tourism Organization(WTO) has developed a classication methodology called the StandardInternational Classification of Tourism Activities (SICTA) whichcategorizes businesses based on their principal activity. Within thesesectors, tourism-related occupations can be readily identified. In thehotels, motels, and other provisions of lodging (SICTA codes 5510, 1, 2,9) for example, jobs include general manager, resident manager, cateringmanager, executive housekeeper, director of sales, front office manager,and steward to name a few. Jobs in restaurants, bars and canteens (SICTAcode 5520) include restaurant managers, cashiers, food servicesupervisors, chefs, waiters and waitresses, and kitchen helpers. Thetransportation sector may include jobs which relate to airlines (SICTAcode 6210-1) including pilots, flight attendants, and aircraft mechanics;ground transportation (SICTA code 6021, 6010) such as bus companies,railroads, rental car companies which offer jobs as drivers, tourrepresentatives, ticket agents; and sea transportation (SICTA code 6110-1) with jobs offered on cruise liners.

344


Lack ofskilled labor

Range ofoccupations

Generally, the jobs in the tourism industry can be classified as service,clerical, managerial, or professional. In a hotel, for example, serviceworkers are those who clean, serve food, carry luggage, and providesecurity; clerical workers are those who provide information, keeptrack of accounts, cash and stock, and operate the switchboard;managerial workers are those who supervise the activities of others;and professional personnel are those who provide legal and financialaccounting services to the hotel. They are designated as professionalsby virtue of their special training and credentials. For the hotel andother companies that provide basic and personal services to tourists,service workers generally comprise the largest group.

345

Tourism Employment and Career Opportunities

Source: World Tourism Organization, Framework for the Collectionand Publication of Tourism Statistics (1991), pp. 62-63.

5510 Hotels, Camping Sites and Other Commercial Accommodations

5510-1 Hotels and Motels with Restaurants

5510-2 Hotels and Motels without Restaurants

5510-3 Hostel and Refuges

5510-4 Camping Sites, Including Caravan Sites

5510-5 Health-Oriented Accommodation

5510-6 Other Provisions of Lodging, N.E.C.

5520 Restaurants, Bars and Canteens

5520-1 Bars and Other Drinking Places

5520-2 Full-Service Restaurants

5520-3 Fast Food Restaurants and Cafeterias

5520-4 Institutional Food Services, Caterers

5520-5 Food Kiosks, Vendors, Refreshment Stands

5520-6 Night Clubs and Dinner Theaters

Table 16.1: Standard International Classification ofTourist Activities (SICTA) Hotels and Restaurants

The projected growth in tourism worldwide ensures many opportunities toenter and advance in the industry. With many entry points for those desiringto begin a career in tourism, young workers may enter jobs that requireminimal skills and acquire on the job training, while seasoned workers canobtain technical jobs that require some formal training and education. Jobopportunities will usually increase with higher levels of education andtraining. Each sector has a career path or ladder for individuals entering thefield and some representative occupations. Examples of advancementopportunities in hotels are provided in Table 16.2.

Kinds of jobs

Opportunities foradvancement

346


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347

Quality of Service and the Work Force

16.4 Quality of Service and the Work ForceWhile the many companies that serve tourists may form a distinctgroup, what do workers in these companies have in common? How isthe tour driver like the hotel guest service agent? The thread that cutsacross all sectors and companies–hotels, restaurants, travel agencies,airlines–is service. The experience tourists have is largely determinedby the contact they have with the employees working in the tourismindustry. Thus, the employees both create and deliver the tourism“product” at the point of consumption. The defining characteristic ofthe tourism work force is this core of knowledge and skills that enablesthe workers to provide quality service to the tourist.

16.4.1 Service Expectations of TravelersA traveler is by definition a person who is out of his/her own elementand one who has only limited time to relate to a new environment, andtherefore may choose to sample the best that a destination might haveto offer. Travelers consider themselves as guests and expect to betreated as such. Moreover, as tourism suppliers raise their standards ofservice to remain competitive in the dynamic marketplace, they alsoraise the level of expectation of their customers as well.

The implication of these greater expectations for service standards andservice performance in the tourism industry is obvious–employees mustbe trained and educated to provide quality experiences with efficiency ordestinations and companies will lose their market share. Providing thishigh level of service consistently to a demanding market is a challengefor the industry. For the long-term success of a destination or company,education and training can be critical because the tourist will often judgethe trip experience by all of the individual contacts, or “moments oftruth,” during a visit. Both defining a quality service from the tourist’sperspective and having tourism companies agree to a common servicestandard and training are important challenges for the industry.

16.4.2 Sustaining Quality Through Skill StandardsA critical part of sustaining a quality destination is establishingstandards of performance in tourism jobs and certifying workers whopossess the skills meeting those standards. In tourism and in otherindustries, setting skill standards for each occupation is gainingimportance as a means to increase employee productivity and provide

a competitive edge in a global market. In the U.S., the push for skillstandards is also based on the need to fight stagnating wages for 50-80percent of the nation’s workers. In Europe, the European EconomicCommunity (EEC) in 1990 launched the “Year of Tourism” which wasorganized to promote European tourism in the face of increasingcompetition from other destinations. However, it was recognized that awell-educated and trained work force was needed to accomplish thisobjective. Some European countries had cited a deterioration in serviceas a reason for the drop in their market share.

A skill standards system assumes that all productive workers needsome occupational preparation. Developing a skill standards systeminvolves three major groups: the employer, who sets the performancespecifications that identify the knowledge and skills an individualneeds to succeed in the workplace; education and training providers,who design and deliver the programs to raise worker skills to meetprofessional standards; and a government coordinating body, such as aboard or commission, to ensure a centralized system of standards andassessments for certification. A description of the employer andgovernment roles follows and the role of education and trainingproviders will be discussed in a later section.

The Employer

The Institute of Policy Research at Johns Hopkins University definesskills as “marketable competencies,” reflecting the movement of manydeveloped economies from a job-based to a skills-based economy(Shephard & Cooper, 1995). Employers seek work-related standardsthat are measurable and certifiable, providing them confidence that theworkers will be qualified. In addition, because the impetus has been todevelop a work force that can compete globally, countries and regionshave sought common measures or benchmarks.

In Canada, the U.K., and other European countries, industry with thesupport of education has created profiles of jobs based on competencies.The European Center for the Development of Vocational Training hasconducted a survey to analyze key job functions and the knowledge andskills required (Sheldon & Gee, 1987). In the United States, the school-to-work program focuses on critical skills, competencies, and knowledgeneeded by students to succeed in different occupations linked to theseskills. Competencies and knowledge areas are defined by advisorycouncils which include employers, educators, and other experts.

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Occupationalpreparation

Seeking standards

Job profiles

Similarly, in the Philippines, efforts to establish skill standards havefocused on job specific skills, such as those for a cook or baker, ratherthan skills common to other jobs.

Another broad approach in developing skill standards has been to focuson cross-functional skills or those that are common or similar acrossoccupations and industry sectors. For example, the customer serviceagent position, which is found in many companies, requires the samebasic skills regardless of type of business or sector. It is estimated that70 percent of the basic skills of a position transfer across occupationsand sectors, and up to 90 percent for management positions. In theU.S., the Occupational Information Network is being developed for allindustries, which will replace the U.S. Department of Labor’sDictionary of Occupational Titles. This network will, among otherthings, identify basic and cross-functional skills in occupations.

For the tourism industry, certain skills have been identified as cross-functional and critical to the tourism industry such as social or humanrelations skills. In a study of employer- and employee-perceivedimportance of skills in their jobs, human relations, communications,and courtesy ranked the highest (Ortiz, 1992). In studies of employersin the Asia-Pacific area, a positive attitude displayed by employees wasjudged to be of critical importance and in greatest need among sixother skill areas. This human relations skill area is important to tourismto create a positive service experience for the tourist. Other skills thatare considered cross-functional and important to the work force arecritical thinking, initiative and problem solving, and computer skills.

Government Coordination

Many countries have established government coordinating bodies tocentralize the skill standards and certification system and to serve as ameans of communication between employer and education and trainingproviders. Such bodies ensure that the system is responsive to changingeconomic conditions and need for skill types. Most countries also haveindustry training boards or national training councils that regulate andset policy for various work training programs. Traditionally, these boardshave concerned themselves mainly with established industries such asthose of mechanical, electrical, and construction trades, but tourism isbeginning to be included in their purview. Examples of coordinatingbodies for tourism skill standards include India National Board,Singapore Hotel Trade Advisory Committee, and the Philippines’ Hoteland Restaurant Industry Training Board Foundation, Inc. (Ortiz, 1992).

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Quality of Service and the Work Force

Similiar basicskills

Critical skills

Certification andcommunication

Regionally, the Association of Southeast Asian Nations (ASEAN) in1990 initiated a project that developed skill standards for several hoteland restaurant occupations for cross-national use. This project evolvedinto the ASEAN Tourism Occupation Standards which prescribescurricula and training techniques and encourages their use throughoutthe region (SSRC, 1996). Singapore also has initiated NationalTourism Education and Training Strategies, which are strategies tokeep Singapore competitive and its tourism work force productive. TheU.S. has been active in establishing a skills standards system as well byforming a National Skills Standards Board (NSSB) which has issuedguidelines to employers and education and training providers forvoluntary implementation (Sheldon & Gee, 1987).

In 1996, the World Tourism Organization conducted a study of 100public and private sector employers representing 12 subsectors of thetourism and hospitality industry in six WTO regions. The purpose ofthe TEDQUAL (Tourism Education Quality) study was to pinpointfactors to be addressed by tourism educational and training programsto meet the current and future needs of tourism employers. Among theproblems identified were misconceptions of the tourism industry andthe jobs offered, the lack of awareness of postsecondary educationprograms in tourism, lack of coordination in tourism education, and thelack of performance standards and credentialing processes (WorldTourism Organization, 1996i).

16.5 Tourism Education and Training Providers

As discussed above, more governments are becoming actively involvedin tourism human resources development and are assisting employersin identifying skill needs. Education and training providers are alsobecoming involved in this movement by examining occupations andjob functions in terms of skills needed, linking skill standards to thecurriculum, and viewing certification of skills as a new role.

To meet the diverse skill and knowledge needs of the industry, a rangeof programs have developed over the years, from basic skills trainingto education for management. Education and training providers can becategorized in two ways: formal programs and courses, such asvocational programs and academic courses of study, and employer-based training, such as management training programs.

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Examples ofstandardization

Problems withtourism education

Range ofprograms

16.5.1 Formal Programs and Courses

Vocational Programs

Many countries offer courses in tourism and basic tourism skills at thehigh school or secondary level. Students who take a vocational careerpath focus on practical skills that lead to immediate employment. Infact, the original vocational program was entirely based onapprenticeship training under the tutelege of master craftsmen. Manyhigh schools have vocational programs that also apply the principlesand theories of traditional academic areas, such as math and reading, tothe field of tourism and other occupations. In most countries, thevocational programs at the post-secondary level are usually found atprivate training institutes, community colleges, or polytechnicinstitutions. These programs concentrate on providing skills training insuch technical areas as food service, culinary arts, housekeeping,landscaping and ticket writing. The training usually spans from sixmonths to three years with a certificate offered after completion of theprogram. Hospitality-related training has had a long history, especiallyin Western Europe–Switzerland, Austria, France, the U.K., among othercountries. Travel and tour training, on the other hand, is comparativelynew and has gained in popularity almost everywhere. Instructors invocational training programs typically have extensive industryexperience, which is a primary requisite. While the more common typeof tourism-related programs and courses around the world arevocational in curricular makeup, there has been a trend to include moregeneral education courses, for example, social studies, economics,languages, and business core courses in vocational program curriculum.

Academic Programs

The academic programs are usually found at universities, withstudents taking a core of general studies in the first two years of studyand specific courses in the professional field in a four-yearbaccalaureate degree program. There is some variation in how theseprograms are structured. Most baccalaureate hospitality programsfocus on hotel and catering management. These programs provide bothgeneral management, including business studies, and specific skillstraining in the hospitality field. Work experience in the form ofinternships of a semester or year length are usually a mandatory part ofthe curriculum. Besides hospitality programs, there are programs and

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Tourism Education and Training Providers

Focusing onpractical skills

Post-secondarytechnical andtravel training

Hotelmanagementprograms andinternships

courses that focus on tourism as an area of study. Tourism isapproached from various perspectives, such as management, sociology,and geography. This approach to tourism studies is still relatively newwith the courses usually offered by traditional departments such asgeography rather than from its own program. Instructors for theseprograms often come from the traditional disciplines such aseconomics or sociology. In the U.S., tourism studies are usuallyintegrated as an optional area of study within the hospitality program.

Graduate programs in tourism and hospitality are increasing, and theirgraduates are gaining acceptance by the industry. In Europe, theERASMUS program, which encourages the link between Europeaninstitutions, has developed the European Tourism ManagementMasters Programme, a cross-cultural Masters (MSc) programdeveloped for tourism. Students can study for the degree in up to threeof the five institutions located in five countries: the Netherlands, theU.K., France, Germany, and Spain. Over the past decade, the numberof advanced management programs have increased for preparingprivate and public sector managers and executives. These programshave capitalized on the trend of lifelong learning, which encouragesindividuals to keep abreast of the rapid changes in the workenvironment through short courses or formal programs that upgradeskills and knowledge, such as supervision, tourism planning, andmarketing. These advanced management programs also develop tailor-made programs for the employer. A combination of academic courses,study tours, and on-the-job work/observations are arranged by theadvanced management program, often drawing participants fromoverseas tourism employers and government tourism organizations.

In spite of the many education and training opportunities, those workingin tourism historically have been perceived as having low professionalstatus. But this situation may be changing within the framework oftourism-related occupations. Formal programs such as two-year, four-year, and graduate programs are important to preparing professionalscompetent in the field, and the educational institutions are developingknowledge that supports the professions. WTO’s TEDQUAL studyindicated employers are also seeing the importance of formal programsas enhancing the professionalism of the field. In studies conducted in theU.K., more companies want not only “real world,” on-the-job training,which is still the prevalent mode of training, but also formal educationand training that complements vocational training (see Table 16.3).

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Graduateprograms

Upgrading skills

Changes inperceptions

16.5.2 Employer-Based Education and TrainingWhile tourism human resources planning and the delivery of educationand training are often done at national or regional levels and througheducational institutions, the larger companies such as the major hotelchains also do their own human resources planning and development.Some hotel chains–Hilton International, Inter-Continental, Meridien,Oberoi Hotel Company in India, the Dusit Thani hotel group inThailand, among others–operate their own training schools. Because ofthe inherent diversity in the tourism industry, there is a tendency foreach type of company to provide its products and services in its ownway. In addition, although medium and small tourism companiesemploy the majority of the workers and have a need for qualifiedemployees, they often are hesitant to invest in tourism education andtraining because of the additional costs involved. Companies use avariety of in-house resources such as special training facilities as wellas support their employees’ outside learning activities.

Companies with smaller training budgets may operate their own trainingprograms as well, which include on-the-job training and the sponsorshipof employees in special short courses, regular programs off-premise tolearn about specific tourism topics or upgrade skills, and study tours tovisit model tourism development and operations. A few in-houseprograms have their programs accredited by certain trade associations,such as for the catering profession, to ensure program quality. Othercompanies use innovative methods to provide training, for example, ahotel in South Korea allows employees to be a complimentary guest onproperty so they can better know the product and appreciate the elements

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Tourism Education and Training Providers

On-the-jobtraining

In-house programs

Source: World Tourism Organization, 1996i, p. 18.

Front LinePersonnel Supervisors Mid Level

ManagersHigh LevelManagers

High School 36 34 12 6

Technical School 36 36 14 6

College or University 24 25 62 47

Post Graduate Institution 5 4 13 42

Table 16.3: Employes Survey of Tourism Education. Percentage of EmployersIndicating Degree Needed for Working in the Tourism Industry

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of high quality service; a Southeast Asia airline links customer needs tostaff development and training center activities and course offerings; anAustralian hotel company recognizes existing skills of employees whichallows them to compete for higher rank and position in variousspecializations (Inskeep, 1991). Generally, these company programs aredesigned to respond to changing work force needs and to enhance thecompany’s culture, mission, and standard of service.

Recently, there have been concerns that employer-based education andtraining programs may be too specific, narrow and appropriate only toa particular company’s requirements with the workers not being able totransfer their skills and knowledge to other sectors of the tourismindustry. While many company programs are well-structured andcomprehensive, others are understaffed and underbudgeted, andcompany trainers may not be providing the breadth and variety that anindependent institution possesses. Moreover, few in-house programsare accredited or open to independent scrutiny (Shephard and Cooper,1995). Training resources and funds also appear to bedisproportionately spent on training for managerial-level workers,leaving relatively little for other workers who do the daily operationaltasks. In some regions, companies expend on average one-half of theirtraining budget on 5 to 10 percent of the employees (American ExpressFoundation & the World Travel and Tourism Council, 1993, p. 13).

16.5.3 Education and Training Providers and Skill Standards

Today, interest in establishing a worldwide skill standards, certification,and accreditation system for the travel industry is mounting within theWorld Tourism Organization and other travel-related international andregional associations. As discussed earlier, establishing standards for adiverse industry is difficult, which has sometimes frustrated educationand training providers and employers. The lack of regional or nationaloccupation standards to which both employers and education providersmay agree makes it difficult to achieve any consistency in curriculumdesign and occupational preparation. Programs in the hospitality andtourism-related fields tend to determine their own outcome goals,curriculum design, and teaching methods. In the absence of uniformstandards and guidelines, they adopt well-known and long establishedschools as models for emulation. Educators are also faced with thedilemma of whether to focus their curriculum on specialized topics andskills and risk having graduates whose skills are quickly obsolete, or on

Problemsachievingstandards

Disadvantages ofcompany training

general topics and skills and risk having graduates with no “hard” skillswhich are immediately applicable on the work environment. From theemployer’s perspective, institutional education and training providersoften seem too rigid and out of touch with the needs of the industry.From the educators’ viewpoint, industry seems not to know how tobeneficially employ the trained skills that graduates have to offer.

Despite these concerns, there has been gradual progress in establishinga partnership between education and training providers and theindustry in developing skill standards and certification systems. Insome countries such as Australia and Canada, skill standards have beenestablished in certain occupational areas as well as a certificationprocess by education and training providers. The establishment ofgovernment coordinating bodies in countries discussed earlierrepresents an important step in developing occupational profiles andassessing current education and training providers.

The WTO has taken the lead in establishing a network of education andtraining centers to implement strategies and standards to increaseprofessionalism in advanced tourism education and training. In 1997,there were 14 WTO centers distributed on a regional basis cooperatingin the development of tourism education and training curricula andresearch. Cooperating institutions are also involved with the centers inthe WTO Education and Training Network.

16.6 Issues Facing Tourism Human Resources Development

As with all individuals in the world community, the tourism work forceis subject to the rapid changes occurring across the world’s politicaland socio-economic landscape. Even such basic functions as how wecommunicate, use, and store information have changed radically overthe past decade and will continue to change in the future. These criticalworld changes will challenge the industry, governments and regionalassociations, and education and training providers in their effort todevelop and maintain a quality tourism work force.

16.6.1 GeopoliticalWith the end of the Cold War, major realignments in political affiliationsare occurring. In Europe, there are increased business opportunities inthe Central Independent States or CIS (part of former USSR and easternEurope). An increasingly unified European regional economy has

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Issues Facing Tourism Human Resources Development

Progress

WTO's educationnetwork

Global changes

Politicalrealignments

created labor shifts and increased demand for travel. In the Americas, theNorth American Free Trade Agreement (NAFTA) has made it easier tomove businesses across borders. In the Asia-Pacific region, China andVietnam are moving rapidly toward market economies, generating aneed for capital, training, and labor. These changes will impact travel andtourism as more people will be traveling to developing countries andthere will be a greater need for training of the work force, especially incross-cultural skills and communications. In addition, the work forcewill be more apt to migrate, which means that more cross-border laborflows will occur, increasing the stratification of jobs. The need for skillstandards and certification systems that cross national boundaries will begreater because of a transient work force; the work force has to be seenin regional and global terms rather than at company or country levels.

16.6.2 EconomicGlobal competition is increasing, and investors and bankers arebecoming more aggressive in pursuing their return on investment fromtourism companies. In the 1990s, management companies are nolonger in the driver’s seat as they were during the 1980s and now mustsatisfy both the guests and owners. The implication of this trend is thatmanagement must work smarter and more creatively. Skills at apremium will be problem solving, commitment to the business, andbeing multi-skilled with the decentralization of authority in the new“power-sharing” styles of management.

16.6.3 SocialAspirations are rising as educational levels increase around the world.Workers want more from their careers. On the other hand, workers arenow turning down jobs that offer more pay but a lesser quality of life.The implication for human resources development is that a skillstandards system may address these career and lifestyle issues.Tourism occupations will gain credibility, attracting more talentedindividuals, as well as provide clear benchmarking for career growth.

16.6.4 Information TechnologyThe information-knowledge age is accelerating. More companies aregoing on-line and state of the art computers will be sitting on everydesk. All employees, management, and entry-level workers will need to

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Labor migration

Need for creativemanagers

Career andlifestyle issues

master this constantly changing communications medium. Foreducation, there will be a closing of the “head-hand” gap where theskilled or semi-skilled worker will be taking on more “head” work.Educators must redesign curriculum and pedagogy in which all studentsare educated to a higher level. Establishing skill standards will be onemeans of articulating these fundamental changes that will be occurring.

16.6.5 Constant ChangeGlobal competition, new technology, and quick access to informationhave placed people in a permanent learning mode. It is predicted thatworkers will be spending as much or more time on learning newtechniques or information than actually doing the activity of the job.The tourism curriculum can expect to be more process- than content-oriented. In this approach, it is not so much what is learned but how itis learned that is important. The focus will be on students developingtransferable skills, such as critical thinking and communication skills.Students will be the center of learning, and they will need to take onmore responsibility for their learning and be self-directed.

SUMMARY

This chapter has emphasized the importance of human resourcesdevelopment, especially given the size of the tourism industryworldwide and the central role service plays in the industry. Theprojected worldwide growth of the tourism industry will increase thedemand for labor. In addition, the labor-intensive, service-dependent,and widely diverse nature of the tourism industry makes it a priority tohave a well-educated and trained work force. Also discussed was theneed to first assess the skill, knowledge, and attitudes needed for thepositions in the industry both for new and existing destinations. Theestablishment of skill standards and a certification system, with regularemployer input and coordination by government, is one way to ensurethat industry skills are made known in a consistent way and can bechanged. The education and training providers deliver a range ofprograms and courses from vocational to advanced management to in-house training. However, it was pointed out that more has to be done inmeeting industry needs and that some countries are already taking stepsto establish a comprehensive skills standards system and provide for thecertification of skills. Finally, some broad global trends were discussedthat might have an impact on the tourism work force in the future.

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SUMMARY

Computer age

Global trends


1. Why is the tourism industry unique in its dependence on a qualitywork force for its growth?

2. Why is the tourism industry difficult to define as an industry?

3. What steps need to be taken to ensure work force quality in atourism destination?

4. Discuss the roles of the employer, government, and education andtraining providers in developing and implementing skill standardsand a certification system.

5. In light of current global trends, why are skill standards andcertification systems important to tourism’s future?

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CHAPTER 17

Conclusion

17.1 Tourism and Sustainability: Issues for 2000 and Beyond

The historic phrase “all roads lead to Rome” when Rome was the centerof the Western universe aptly describes the convergence of tourismconcerns in the new millennium towards two fundamental issues: growthand sustainability. These two issues are at the heart of the anticipation thatwe have for tourism’s future within the economic, social, cultural, andenvironmental structure of communities, countries and regions of theworld. With respect to growth, there is general agreement that the tourismindustry will continue its rapid pace of expansion and development intothe next century and beyond. Whatever theory of travel motivation(covered in Chapter 7) one believes best accounts for the reasons thatpeople travel, it is clear that travel will continue to be a valuable and highlydesirable experience for people around the globe. Advances in technologyand planning will enable international travel to become affordable andaccessible to more of the world’s population. Thus, for the foreseeablefuture, growth will characterize the travel and tourism industry.

In this text, the authors have attempted to demonstrate that tourism growthis also a double-edged sword which, on the one hand, provides more jobsand revenues to help sustain a community’s economy, but on the other,

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17Conclusion

Growth andsustainability

Tourism: adouble-edgedsword

may contribute to accelerated changes of cultural and naturalenvironments of that same community. Nor can growth be taken forgranted, as many mature destinations have discovered when newconsumer trends favored other alternatives offered by competitors. Thetype and quality of growth, moreover, become fundamental issues indetermining how tourism will or will not benefit the environment andpeople of a host community. As was discussed in Chapter 12, tourism’ssuccess can no longer be measured purely by increasing numbers–whetherthey be visitor arrivals, tourist revenues, or marketing expenditures–but byits contributions to the quality of human life and the integrity of thephysical environment. These are much more demanding goals, andachieving them will require that tourism professionals, especially thoseengaged in the policy and planning areas, must improve their methods ofanalyzing, anticipating, and managing the effects of tourism development.

The issues of quality upon which the future of tourism depends lie at theheart of sustainability. In this regard, it is important to note that in the newmillennium quality will be essential across all the elements of tourismthat have been covered in this text–transportation, hospitality and lodging,attractions, and services. Tourists will expect an integrated experience ofthese elements characterized by high quality. In accomplishing this,tourism research will continue to play a critical role in creating thenecessary knowledge base to address complex and interrelated issues.

As the discussion of the resort destination life cycle (Chapter 15) makesclear, growth and success can be a transitory stage of development. Growthand success can create problems of overcrowding, overdevelopment,commercialism, community alienation, and so forth, that become the seedsof decline for the destination. Some experts in paraphrasing Karl Marxhave noted that tourism uncontrolled contains within itself the seeds of itsown destruction. Sustainable tourism avoids such problems in byreorienting the industry’s priorities and practices towards an acceptablebalance between viable growth and environmental sustainability over thelong term. Indeed, the adoption of this long-term perspective will be thekey to survival for many popular destinations which have seen recentdeclines in the quality of their products and loss of visitor traffic to newerand better planned destinations which are unspoiled.

17.2 The Challenges of GrowthAs tourism enters a new millennium and the prospect of continuedexpansion and greater importance in the world economy, it facesnumerous challenges. Policymakers will increasingly have to address

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Chapter 17: Conclusion

Measuringsuccess

Higher qualityexpectations

Long-termperspectives

fundamental issues related to the industry’s growth, direction, andeffects. As there is more awareness of the many connections betweenthe tourism industry and the future of communities, the public will alsobecome more engaged with these issues. Fundamentally, the followingquestions reflect choices that government, private industry, andcommunity leaders must collectively consider.

17.2.1 Where Will Tourism Growth Occur?Chapter 6 discussed the way in which the increasing sophistication oftourists has given rise to special market segments such as cultural,rural, adventure, and sports-related tourism. These segments provideconsumers with well-defined choices in the type of visitor experiencesthey seek, often by basing those experiences on the uniquecharacteristics of the landscape or culture in which they are situated.Because these special segments provide alternatives to the morefamiliar and commercial forms of mass tourism, they are by definitionspecial or niche segments which direct tourism activity into lessdeveloped environments. Unfortunately, from an environmental andcultural perspective, lesser developed areas are potentially morevulnerable to the adverse effects of tourism activity.

The question of where tourism growth will occur, then, requiresthoughtful decisions about the extent to which tourism activity will takeplace in areas and communities that exist at or beyond the periphery ofmodern, market economies. As tourists demand more unique andunconventional experiences in the future, examples of the types of hardquestions that policy makers will need to address more frequently are:Should nations place geographical limits on tourist activity? Are therecertain types of environments (such as wetlands or rainforests) thatshould be protected from all forms of visitor intrusion? How willgovernments balance the competing demands for access to popularnatural areas with their preservation and protection, and the largerdebate between business interests and environmentalists?

Growth issues will affect not only undeveloped or vulnerable areas, butalso established population centers. For example, many governmentsare finding it increasingly difficult to build new or expand existingairports due to resistance from affected residents and businesses.Residents may see a new or expanded airport as a source of worseningtraffic, noise pollution, and unattractive development. Businesses mayobject to the potential changes in land values that result from suchdevelopment, or to new patterns and concentrations of commercial

363

The Challenges of Growth

Special marketsegments

Balance andprotection

Massivedevelopmentse.g. airports

activity that threaten their established ones. There are few otherdevelopments that are as massive in scale, as costly, and as importantto the economic vitality of an area, than a modern airport. Their veryimportance and impact means that planning an airport will be fraughtwith contention and complications that can delay the project for years.

17.2.2 What Kinds of Tourism Experiences Will Meet the Market?

Throughout this text, the importance of adapting to and meeting thetourism market has been stressed. The tourism market is dynamic. Newvisitor generating markets will arise, representing different cultureswith their own unique preferences and patterns of expenditures. Visitortrends will change, as fads and fashions go through their inevitablecycles. To be successful, destinations and businesses will need toanticipate change and be flexible enough to adapt to it.

As suppliers attempt to meet the changing desires of visitors, however,there are important issues that will need to be addressed. For example,two trends that are apparent in the development of the special marketsegments discussed in Chapter 6 are the increasing desire by tourists toactively and directly participate in sports, recreational, and culturalexperiences, and their greater value on authentic experiences versusthose that reflect commercial influences. Once established, however,these niche markets may prove to be difficult to adapt to changingconsumer tastes. A destination cannot simply alter the physical featuresor cultural activities that it has used as visitor attractions throughout theyears. Thus, destinations, particularly those that base their appeal onattractions and activities that are unique to their location and culture,face a delicate balance between building a sustainable industry thatenables their communities to maintain their cultural identity andenvironment, and adapting to changes in the market in order to surviveas a viable destination within a highly competitive industry.

17.2.3 Who Will Benefit From Tourism Growth?As discussed in Chapter 12, the issue of equity is a central concern ofsustainability. As tourism moves into the new century, this issue willbecome increasingly important. Citizens and communities around theworld are becoming more sophisticated in their awareness andunderstanding of issues that affect them, and in their ability toinfluence decision making. Revolutionary changes in communicationstechnologies are enabling people to gain access to information and to

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Anticipatingchange

Visitor trends

Necessity of a fairdistribution

share information with each other. Given these conditions, it willbecome increasingly difficult for governments and businesses tosupport development that is not perceived to allocate its benefits andits costs in a fair manner. Communities in which tourism developmentoccurs will demand answers to the following types of questions: Wherewill the profits from the operations go? Who will own and control themajor businesses? Who will be employed by the businesses? Whatkinds of employment positions will be available to residents? Whatkinds of wages will be paid to tourism employees? In manydestinations, the question will no longer be one of whether there willbe adequate employment generated by tourism but whether tourismjobs will suit the aspirations of residents in the community.

Local governments will also be interested in tourism’s anticipatedbenefits at a macro level. Will developers help to finance infrastructureimprovements necessary to accommodate growth? What kinds ofamenities will be accessible to the public? Will they provide theresidents with the skills and training required by tourism employers?This last question centers on one of the key issues facing tourism,namely, the availability and competence of human resources.

17.2.4 What are the Human Resource Implications of Tourism Growth?

As noted above, the issue of human resources is a key aspect of sustainabletourism development. One of the most important potential benefits oftourism development is its ability to generate employment. Often, it is thepromise of jobs that proves decisive to public officials in theirdeliberations over whether or not to encourage tourism development.

Yet there are many dimensions to the implications of tourism growth forhuman resources. For example, in some destination areas, the availablepool of resident manpower is insufficient to staff the local industry. Suchareas have often resorted to the importation of workers, both nationalsand foreign, to provide the necessary labor. As can be expected, suchmeasures can have a significant effect upon the communities involved.In some cases foreign workers are paid wages that are much lower thanwould otherwise be paid to local workers. In others, foreigners fill onlythe higher-paying positions, leaving a cultural gap between them and thestaff and line workers. Another example is the large-scale movement ofwomen out of the domestic sphere and into the myriad employmentpositions that tourism offers. The impacts of this shift include disruptionsin traditional domestic economic arrangements, downward pressure on

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The Challenges of Growth

Macro-level ofbenefits

Promise of jobs

Complexity of thelabor question

wages, increased employment competition for men, and changes in childcare, marital relations, and other aspects of family life. Workerimportation and women’s employment are two examples of how theemployment demands of the industry create new social and economicarrangements to which everyone must adjust.

17.2.5 Learning from Other DestinationsTo be certain, many communities and countries have already encounteredthese foregoing questions in the past and there are numerous case studiesdocumenting the outcomes of those decisions. Some of those outcomeshave been successful, and some less so. The relevant point to be made hereis that each destination is unique and the application of another’s experiencewill not necessarily result in the same outcome. Drawing conclusions fromthe experience of another destination requires a careful assessment of theways in which its various aspects–environment, development stage, socialand cultural contexts, and so forth–are comparable.

17.3 Sustainable Tourism and the Future

17.3.1 Growth Towards What?Fundamentally, economic growth is aimed at improving the livingstandards of people. As growth occurs, it is expected that more resourcesbecome available to more people. The effect of this greater availabilityof resources is not limited only to higher real wages or consumption. Itextends also to more qualitative aspects of a community, such as itshealth, education, and arts and culture. Communities also benefit fromthe greater capabilities of a government that has increased resources as aresult of economic growth. Governments can improve their services inareas such as social assistance and support, education, health care,environmental protection, citizen safety, and planning. The resultingimprovement in these areas have direct and significant impacts on thequality of life for a community.

However attractive these benefits of economic growth may appear,they can no longer be pursued without regard for the environmentaland human resources on which growth is based. As the world enters anew era, it is clear that sustainability is no longer an ideal, but anecessity. Population and development pressures have placed the Earthin a delicate and vulnerable position. Species that have survivedthrough centuries have disappeared as their habitats have been

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Learning fromexperience

Benefits due togrowth

Sustainability: anecessity

modified or eliminated by development. Biological and culturaldiversity are under increasing pressure from the effects of urbanexpansion. And in spite of the fact that nations are becoming moreproductive and efficient, poverty and hunger afflict much of the world.

17.3.2 Sustainable TourismThe tourism industry has been at the forefront of efforts to reorienttraditional priorities and practices that are destructive to environmentsand cultures. In recent years, these efforts have become more focused andconcrete and have yielded encouraging results. The groundwork is beinglaid for a concerted effort on the part of the industry to achievesustainability in the next century. In early 1997, for example, the WTOconvened the Asia-Pacific Tourism Ministers Conference on Tourism andEnvironment in the Republic of Maldives. This conference intensivelycovered a range of technical issues related to sustainable tourism, andissued the Malé Declaration on Sustainable Tourism (see Exhibit 17.1).

The Malé Declaration is indicative of a global trend on the part of tourismorganizations to formally recognize the importance of sustainability andto encourage and facilitate the adoption of sustainable principles by theindustry. In particular, there is a sense of urgency in efforts to protectthose destination environments, such as small islands, for which adverseenvironmental and sociocultural impacts would be devastating andpermanent. The Declaration also emphasizes the need for cooperationbetween the public and private sectors in fostering sustainability.

17.3.3 Cross-Cultural Understanding and PeaceIn the post-Cold War era, culture and religion have replaced ideologyas the dominant sources of international tension and conflict. It hasbeen demonstrated all too frequently that when other societies areperceived as categories, rather than communities of humans who havemuch in common with other communities, the results can be tragic.International tourism, by definition, brings people from different partsof the world face-to-face with each other, enabling them to discoverthose things that make them unique as well as those that bind themtogether. Other societies, cultures, and communities thereby acquire a“face” and immediacy rather than remain abstract groups. This contactbetween cultures has been emphasized as critical to global survival onan increasingly crowded planet. Thus, there is tremendous potential fortourism to play a prominent and catalytic role in achieving one of thekey tenets of sustainability: world peace.

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Sustainable Tourism and the Future

Laying thegroundworktowardssustainability

Formalrecognition ofprinciples

Contact betweencultures

As the primary governmental organization devoted to world tourism, theWTO has recognized this potential and incorporated peace into itsmission statement: the development of tourism “as a significant meansof fostering international peace and understanding.” As the world movesinto the new century and millennium, it can safely be said that withoutinternational peace, little else–from CRSs to NTAs–will much matter. Asthe world’s leading governmental organization in tourism, theWTO–along with governments and nongovernmental organizationsinterested in sustainable tourism–recognizes its role and responsibility innurturing this vital link between tourism and world peace. It is aresponsibility that WTO has directly and proactively met through itsnumerous activities and initiatives. It is hoped that this textbook haslikewise made a small, but essential contribution towards globalfellowship.

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Link betweentourism and peace

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Malé Declaration on Sustainable Tourism

MALÉ DECLARATION ON SUSTAINABLE TOURISM(adopted at the Asia-Pacific Ministers’ Conference on

Tourism and Environment, in Malé, Maldives, 16 February 1997)

WHEREAS the Asia-Pacific Tourism Ministers Conference on Tourism andEnvironment was held on 16 February 1997, in Malé, Republic of Maldives,convened by the World Tourism Organization with the participation ofdelegations of 27 states, affiliate members, international organizations, regionalorganizations and observers, to clarify and define the linkage between tourismand environment, as well as to consider the responsibility of states and theprivate sector for achieving a high degree of sustainable tourism development;and

WHEREAS, the theme of the conference, “Tourism 2000-Building aSustainable Future for Asia-Pacific,” attests to the unanimous sentiment on thepart of the conference participants that tourism can and should promoteenvironmental health and integrity, and that the substantial and ongoinginvestment of financial, human, and natural resources in tourismdevelopment requires a fiduciary responsibility to the sustainablity andcontinued viability of the industry for the benefit of communities and nations;and

WHEREAS, there is recognition and appreciation for the uniqueness and thediversity of natural environments, peoples, cultures, and heritages of the Asia-Pacific countries and their importance for tourism’s potential for cross-culturallearning, international understanding, and world peace; and

WHEREAS, the conference participants have explored the many policy-relatedand technical issues involved in sustainability, with an emphasis on those ofparticular relevance to the public sector; now, therefore,

BE IT RESOLVED by conference that the participants of the Asia-PacificMinisters Conference on Tourism and the Environment agree in principle to:

Pledge continuing support for the vision and goals of sustainable future, asconceived and articulated in the 1987 Brundtland Commission report, the1992 Earth Summit, the Rio Declaration, and Agenda 21, and further extendedto the tourism industry through subsequent efforts such as Agenda 21 for theTravel and Tourism Industry, the World Conference on Tourism and HeritageManagement, encompassing the following precepts:

• Fostering awareness of environmental ethics in tourism amongcommunities and consumers;

• Conservation and sustainable use of resources;

• Public guardianship of the natural environment;

• Reducing consumption of water;

• Natural, social and cultural diversity;

Exhibit 17.1

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• Integrated tourism planning for sustainability;

• Support for local economies;

• Local community involvement;

• Consulting tourism stakeholders and the public;

• Human resource development;

• Responsible tourism marketing;

• Ongoing inquiry into sustainability issues;

• Measurements to monitor tourism’s impacts on environment, culture andheritage; and

• Use of environmental impact assessments in tourism planning.

Commit resources to environmental protection and to improving the quality andprofessionalism of our human resources to create a valuable and meaningfulvisitor experience and to meet the needs of a competitive global environment;

Emphasize the urgency of sustainability for the health of both the tourismindustry and the world economy, and especially for vulnerable ecosystemssuch as small island states;

Intensify efforts to make operational those policies and practices that promotesustainability, including further refinement of sustainable indicators tomeasure progress, realizing that research and technological advances havebrought us to the point where sustainable action can now proceed;

Strive to provide the leadership, training and technical support needed bycommunities to enable them to become fully aware of, and involved with, theprocesses by which tourism is planned and developed;

Support an active and prominent role for governments at all levels–national,provincial and local–in planning and promoting sustainable development;

Seek greater international and regional cooperation among Asian-Pacificnations in collaborating on sustainable tourism programs and sharingresources, expertise and information on best practices and experiences;

Call on the WTO and other appropriate bodies to expand the base of knowledge onsustainability issues, problems, and solutions for achieving sustainable balance;

Strengthen and promote cooperation with the many tourism-relatedbusinesses and organizations that comprise the private and non-governmental sectors, in recognition of the costs and effort that sustainabilityrequires for optimizing opportunities; and

BE IT FINALLY RESOLVED that the participants urge their governments to usethe principles of this Declaration as a policy tool to measure progress towardssustainability and to assist in the implementation of sustainable practices.

accommodation expenditure: Includes the following:

a) Cost of accommodation in collective tourist establishment;

b) Rent paid in respect to accommodation in private dwellings;

c) A proportion of on-going expenses such as government charges, andmaintenance and repairs, pro-rated over each visit where a visitor’svacation or summer home, caravan, camper, boat, etc., is used;

d) Accommodation site expenses relating to caravans or other mobilehomes, and mooring expenses for boats;

e) Hire of caravan or mobile home (but not self-propelled vans,recreational vehicles etc.)

accreditation: Approval by conferences or associations for allowingthe sale of tickets and other travel services.

agent: A person authorized to sell the products or services of a supplier.

air traffic control: A service operated by appropriate authority topromote the safe, orderly, and expeditious flow of air traffic.

air transport services agreements: Bilateral accords with respect toscheduled (and sometimes nonscheduled) air transportation servicesbetween nations.

airbus (aerial bus): A jumbo jet carrying twice as many people as a707 or DC-8 and specializing in short- and medium-length trips.

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Glossary

all-expense tour: An inclusive tour that offers many included servicesfor the stated price. It probably includes most, if not all, meals,sightseeing, taxes, tips, and extras.

allocentrics: Individuals with a strong need for variety and newexperiences; when traveling they seek destinations that offer anopportunity to experience different cultures and environments.

American Hotel and Motel Association (AHMA): Lodging industrytrade association.

American plan (AP): Meal plan that includes three meals daily withthe price of accommodations.

attraction: Positive or favorable attributes of an area for a givenactivity or set of activities as desired by a given customer or marketincluding climate, scenery, activities, culture.

average room rate: Total revenues from room sales in a hotel, orcollective room revenues of a destination, divided by the total number ofavailable rooms. Average room rates may be computed on a daily basis foran individual property or an annual or seasonal basis for a destination.

balance of payments: A statistical statement, linked to the nationalaccounts, which provides a systematic record of a country’s economictransactions with the rest of the world.

balance of trade: A practical definition of an economic concept. Eachnation is assumed to be one business entity dealing with othernations/business entities. When a business (country) sells (exports)more than it buys (imports), it has a positive balance of trade. When itbuys (imports) more than it sells (exports) it has a negative balance oftrade. Tourism is a part of the balance of trade.

bed and breakfast (B & B): A meal plan that includes breakfast withguest house or other lodging accommodations.

bilateral air agreement: A treaty, or negotiated agreement, betweentwo nations for reciprocal air services covering details of equipment,scheduling, specific air freedoms, taxation, landing privileges, andother factors of importance to each party in the agreement.

bulk fare: Fare available only to tour organizers or operators whopurchase a specified block of seats from a carrier at a low,noncommissionable price and then have the responsibility of selling theseats, including a commission in their marked-up price for the seats.

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business class: A class of service on airlines that is geared towardsbusiness travelers and is usually situated between first class andeconomy (coach) and offers such amenities as larger seats, freecocktails and headsets, and early check-in privileges.

business travel: Travel that is the result of one’s occupation. In the caseof conventions or where a side trip is added to what would otherwise bestrictly business, pleasure may also be involved. Business travel involvesa special market requiring some special services (typists, meeting rooms)and expectations that differ from those of the purely-for-pleasure tourist.

cabin: A sleeping room on a ship. Also the interior of an aircraft.

cargo liner (or freighter): Vessel principally engaged in transportinggoods, which is licensed to carry a maximum number of passengers(usually 12).

carrying capacity: The maximum use of any site without causingnegative effects on the resources, reducing visitor satisfaction, oradverse impacts upon the society, economy or culture of the area.

casino: Gambling establishment, usually part of a luxury resort complex.

certified air carrier: One of a class of air carriers holding certificates ofpublic convenience and necessity, authorizing the holder to engage in airtransportation. This group consists of certified route carriers authorizedto provide schedules service and limited nonscheduled service, andsupplemental carriers authorized to engage in nonscheduled service.

charter service: Nonscheduled air transport services whereby theparty or parties receiving transportation obtain exclusive use of anaircraft at published tariff rates and the remuneration paid by the partyreceiving transportation accrues directly to, and the responsibility forproviding transportation is that of, the accounting air carrier. This termalso has general application to any other mode of transport; such asmotorcoach, ship, and train, where the entire capacity or a minimumnumber of seats are hired by contract for exclusive use.

classification of tourism activities: see SICTA

coach service: Transport service established for the carriage ofpassengers at fares and quality of service below that of first-class andbusiness-class service. Is also known as economy service.

commercial carrier: Any form of transport carrier that sells its seatsto the public.

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commercial rate: Special discounted rate offered by a hotel or othersupplier to a company, group, or individual traveler on a qualified basis.

commuter airlines: An airline that offers frequent roundtrip serviceto/from smaller communities and some larger airport hubs with apublished flight schedule of such services principally to serve businesscommuters.

computerized reservation system (CRS): An electronic informationsystem connecting individual travel agencies to a central computer,making immediate inquiries and reservations on an airline, hotel, carrental, or other possible travel services.

concession: A part of the hotel operation that is leased to and operatedby another party. Some examples are a parking garage, newsstand,barber shop, and beauty salon.

concierge: An individual who is professionally trained to handlespecial requests or services for guests, usually in a luxury-class hotel.

conference: An association of air carriers designed in principle toprovide a set of operational rules that are fair to operators and toprevent cutthroat competition among operators. A conference mayestablish and enforce agreed upon rules, ethical practices, safetystandards, documents, and serve as a clearinghouse for information. Itmay also establish travel agency rules and regulations.

conference center: Refers to establishments offering facilities forcongresses, conferences, courses, vocational training, mediation etc.The sleeping accommodation in these establishments is generally onlyavailable to participants of the specialized activities organized in or bythe establishments.

continental breakfast: Usually a beverage with rolls, butter, and jamor marmalade. In Holland and Norway, cheese, cold cuts, or fish aresometimes included.

Continental plan (CP): Bed and breakfast, meaning hotel accommodationsas specified and breakfast according to the custom of the country.

convention: Business or professional meeting, usually attended bylarge numbers of people. In Europe the more prevalent term forconvention is congress.

convention center: Specialized facility designed to meet the needs oflarge groups of people with ample parking, large and small meeting

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rooms, banquet facilities, audio-visual equipment, and so forth. Oftenpublicly funded for the purpose of stimulating the business of nearbyhotels, motels, restaurants, and attractions, none of which could affordto provide a facility of sufficient size.

convention and visitors bureau: Municipal or state organizationresponsible for promoting tourism to the area. Often funded by acombination of public and private money.

country of residence of a person: Consists of the country where s/hehas lived for most of the past year (12 months), or for a shorter periodif s/he intends to return within 12 months to live there.

courier (tour escort, tour leader, tour manager): A professionaltravel escort.

cruise ships: Ships used specifically for pleasure cruising, as opposedto point-to- point transportation.

cultural attraction: Attractions that are based on the heritage andtraditions of a destination’s people, past and present.

cultural tourism: Tourism that focuses upon the heritage and cultureof a country and its people, preserved and portrayed in monuments,historic sites, traditional architecture, artifacts, events, and culturalattainments in the arts.

currency restrictions: Limitations established by a country to controlthe amount of money taken in, out, or exchanged within a country.

customs: Formal procedure whereby all persons entering a countrymust declare their possessions of specific kinds of amounts of itemspurchased in another country under the jurisdiction of a governmentagency that has the right to inspect, restrict, seize, and/or impose taxeson goods brought into a country. Also refers to the normal manners orbehavioral procedures of a country.

customs duty: Tax on certain goods being imported.

day rate: A special rate for a room used by a guest only during the dayup to a specific hour, such as 4:00, 5:00, or 6:00 pm.

demand: Quantity of tourism goods or services that buyers are readyto buy at a specified price in a given market at a given time.

destination: The place visited by a visitor. In the case of domesticvisitors, the destination is an area within the same country. In the case

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of international visitors, the destination might refer to the countrybeing visited or to a region of that country. A destination is the basicgeographic unit used for the production of tourism statistics. Within thereference country, the country might be split up into destination areaswhich represent homogeneous tourism regions or which may be groupsof local government administrative regions.

destination development: The conscious planning, developing, andmarketing of a destination to attract visitors.

destination planner: An independent professional who providessupport services with regard to destination information and resourcesto assist meetings and convention planners.

direct employment: Companies in the tourism industry whoseemployees are in contact with tourists or directly affect the touristexperience. Includes hotels, food service operators, airlines, cruiselines, travel agents, attractions and shopping outlets.

domestic airline: Carrier providing service within its own country.

domestic tourism: Comprises the activities of residents of a givencountry or other area traveling to and staying in places inside thatcountry or other area but outside their usual environment for not morethan one consecutive year for leisure, business and other purposes.Note that the term, “domestic”, used in this tourism context differsfrom its use in the System of National Accounts (SNA) context.“Domestic” in the tourism context retains its original marketingconnotation, that is, it refers to residents traveling within their own areaor country. In the SNA context, it refers to activities and expendituresof both residents and non-residents traveling within the referenceregion or country, that is, both domestic and inbound tourism.

domestic tourism expenditure: The expenditure incurred as a directresult of resident visitors traveling within their country of residence. Itincludes spending while enroute and at the places visited as well asadvance outlays necessary for the preparation and undertaking of thetrip and travel-related outlays made in the place of residence whenreturning from a trip.

duration of trip: The time spent during a visit measured from thestandpoint of the generating country or place. Duration of stay refersto the time spent during a visit measured from the standpoint of the

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receiving country or place. Travel-time refers to the time traveled on atrip, adding the journey traveling to the distance destination andreturning to the stays in each place visited.

duty-free imports: Government specified list of item categories and theirquantities that may be brought into the country free of tax or duty charges.

duty-free stores: Retail stores in which merchandise is soldcompletely or partially free of the taxes and duties that wouldotherwise be imposed by the country in which the store is located.

economy hotel: Hotel with limited facilities and services targeted atbudget travelers. Also referred to as second class or tourist hotel.

economy service: Transport service established for the carriage ofpassengers at fares and quality of service below first class and businessclass. Is also known as coach service.

efficiency unit: Room that has kitchen facilities, similar to a one-roomapartment. Also called a studio.

electronic ticket delivery network: Another form of STP (see satelliteticket printers).

entry requirements: The official documents required to enter a country,which may include a passport, visa, or document showing inoculations.

escorted tour: A tour that includes the services of an escort. Alsocalled a conducted tour.

escrow accounts: Funds placed in the custody of licensed financialinstitutions for safekeeping. Many contracts in travel require thatagents and tour operators maintain customers’ deposits andprepayments in escrow accounts.

European plan (EP): Meal plan that does not include meals with theprice of accommodations.

excursion: Usually a side trip out of a destination city; may be usedinterchangeably with tour or sightseeing.

excursionist: Temporary visitors staying less than 24 hours in thedestination visited and not making an overnight stay (includingtravelers on cruises).

exit restrictions: Restrictions enforced by a country to curb outboundtravel.

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Glossary

expatriate: Citizen of one country who resides for an extended periodof time in another country.

familiarization trips or tours: A trip or tour offered to travel agents,travel writers, and so on to promote a new product or destination andthe services of the suppliers, usually at a discount price or FOC (freeof charge). Also called a fam trip.

fare: The amount per passenger or group of persons stated in theapplicable tariff for transportation, including accompanying baggageunless otherwise specified.

first-class hotel: Hotel offering a high standard and variety ofservices. In Europe a first-class hotel ranks below a luxury or grandluxe hotel. In Asia, first class may mean a four-star property where fivestars denotes the top classification.

flag carrier: Term usually referring to the national airline of a country.

flat rate: Special room rate for a group negotiated in advance whereall rooms in the property, which may or may not be subject to certainrestrictions, are priced at the same rate.

fleet planning: Refers to a transportation company’s efforts to matchits supply (of available seats) with passenger demand.

fly-drive: Package that includes airfare and car rental (and sometimesaccommodations).

free and independent travelers (FIT): Travelers who have madeindependent arrangements, versus travel with a tour group.

franchise: The right to market a service and/or product, often exclusivefor a specified area, as granted by the manufacturer, developer, ordistributor in return for a fee; prevalent in the fast-food service industry.

freedoms of the air: Basic traffic rights, as bilaterally arrangedbetween nations or established by treaty.

freight: Transported property, other than express mail, and excesspassenger baggage.

frequent flyer programs (FFP): A program whereby bonuses areoffered by the airlines to passengers who accumulate travel mileage.

gateway city: A city that functions as the first destination for visitorsto the area, due to location and transportation patterns.

GATS: General Agreement on Trade in Services

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GATT: General Agreement on Tariffs and Trade

gross occupancy rate (GOR): Refers to the use of totalaccommodation in a given period, irrespective of whether or not a partis closed for the season or for other reasons.

GOR = (total overnight stays) * 100%

(total number of bed-places * number of nights)

ground operators: A supplier that provides local transportation, transferservice, sightseeing, and other services to a client at a destination.

group inclusive tour (GIT): Prepaid tour, with transportation,accommodations, sightseeing arrangements, and so on covered.Special air fares are provided to the group, requiring that all membersmust travel on the same round-trip flight and must travel togetherduring their entire time abroad.

guaranteed reservation: Used with hotel reservations to mean theroom will be held all night in the case of late arrival of the passengers.With a guaranteed reservation, the traveler must pay for the roomwhether or not it is actually used.

health (accommodation) establishments: Refers to health treatmentand health care establishments providing accommodation, such asspas, thermal resorts, (mountain) sanatoria, convalescent homes, healthfarms and other similar establishments.

health tourism: Tourism associated with travel to health spas or resortdestinations where the primary purpose is to improve the traveler’sphysical well-being through a regimen of physical exercise and therapy,dietary control, and medical services relevant to health maintenance.

host community: The residents of a town, area, or nation who are influencedby the presence of tourists and who serve officially or accidentally as hostsby sharing their land, facilities, highways, and culture with tourists.

hostel: Accommodations often for specific groups of users, such asyouth, club members and so forth, where the facilities are shared,inexpensive, supervised and basic.

hotels: Refers to hotels, motels, roadside inns, beach hotels andapartment hotels and similar establishments providing hotel services,including more than daily bed-making and cleaning of the room andsanitary facilities.

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Glossary

hub-spoke concept: A concept involving the establishment of aparticular city as a central point to which longer-haul flights arescheduled and which serves as a connecting point where other flightsare deployed or made to smaller cities. The routing of schedulesthrough a central connecting city ensures heavier passenger loads.

IATA: International Air Transport Association

IBRD: International Bank for Reconstruction and Development

ICAO: International Civil Aviation Organization

import restrictions: Government regulations regarding the type andquantity of goods returning residents are allowed to import after a trip abroad.

inbound tourism: Comprises the activities of non-resident visitors ina given area that are outside their usual environment for not more thanone consecutive year for leisure, business and other purposes.

incentive travel: Travel provided as a reward for sales or work performedby employees, distributors, members of organizations, and so on.

inclusive tour (IT): An advertised package or tour that includes theaccommodations and other components such as transfers and sightseeing.

indirect employment: Employment in companies in the tourism industrythat serve the direct employment companies. May include restaurantsuppliers, construction firms that build hotels, aircraft manufacturers.

infrastructure: In a general sense, infrastructure applies to thephysical necessities that must be supplied to tourists. This includesroads, electricity, water, telephone, airports and so on.

input-output analysis: A type of economic analysis that helps todemonstrate how economic sectors are related, the number of linkagesamong them, and the effect of these linkages.

international inbound tourism receipts: Expenditure of internationalinbound visitors, including their payments to national carriers forinternational transport. This should also include any other prepaymentsmade for goods and services received in the destination country.

international outbound tourism expenditure: Expenditure of outboundvisitors in other countries including their payments to foreign carriers forinternational transport. This should also include any other prepaymentsmade for goods and services received in any foreign country.

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international tourism expenditures: The expenditures of outboundvisitors in other countries including their payments to foreign carriersfor international transport. They should also should include any otherprepayments or payments afterwards made for goods and servicesreceived in the country of destination.

international tourism receipts: Expenditures of international inboundvisitors including their payments to national carriers for internationaltransport. They also include any other prepayments or paymentsafterwards made for goods and services received in the destinationcountry.

international visitor: Refers to any person traveling to a country otherthan the one in which s/he has his/her usual residence, but outsidehis/her usual environment, for less than 12 consecutive months andwhose main purpose of trip is other than the exercise of an activityremunerated from within the place visited.

LAC Model (Limits to Acceptable Change Model): A model thatmoves the planning focus away from attempts to set a number orspecific limit on tourism and towards describing a set of environmentalconditions which are seen to be desirable.

leakages: Decrease in real foreign exchange earnings caused by theneed for importing goods, services or credit. May be applied to states,regions, or communities as well as nations.

load factor: Percentage of carrier capacity based on the total numberof seats available.

management contract: An agreement between the owner(s) of aproperty such as a hotel, restaurant, convention center, or resortcomplex and a professional management company to develop and/oroperate such property for a consideration, typically a set percentage ofthe gross operating profit.

man-made attractions: Artificially created attractions such as themeparks, special events such as olympics, shopping, meetings andconventions, gambling, recreation and sports are significant motivatorsfor potential visitors.

mass tourism: Contemporary tendency to create mass demand forspecific locations or experiences, as well as the accommodations andtransportation to serve such demand.

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Glossary

meeting and convention planner: A professional consultant who specializesin the planning and execution of conventions and business meetings.

MICE: Meetings, incentive, convention, and exposition businesstravel market.

midcentrics: Individuals who are in the midrange between allocentrics(those wanting to experience new destinations and cultures) andpsychocentrics (those wanting to travel only to familiar, “tried and true”destinations). Midcentrics are not too adventurous, yet neither are theyafraid to try new experiences as long as they are not too challenging.

motorcoach: Bus designated to carry passengers for touring,frequently equipped with toilet facilities.

multilateral: An agreement among three or more countries, the termsof which apply equally to the signing countries.

multiplier effect: Concept that tourist expenditures in an area generatemore expenditures, and thus more money, as the tourist income is spentby residents who receive it as wages or profits. The multiplier effectcan be estimated statistically.

national accounts: An integrated framework of accounts whichprovides a systematic summary of national economic activity.

national tourism administration (NTA): A generic term used toidentify the official government body responsible for tourism. This maybe a ministry, part of a ministry or a semi-autonomous body. Theorganization, title and functions vary from country to country, butfunctions would typically include policy advice, promotion andresearch. This body is sometimes responsible for tourism statisticalcollection.

national tourism office or organization (NTO): Also known asnational tourism administration (NTA). The primary governmentagency charged with the implementation of national goals and publicpolicy with respect to tourism.

natural attractions: Attractions which are based on features of thenative environment and include parks and wildlife conservation areas,sites with overall natural scenic beauty, beaches and marine areas, aswell as environments with special features such as high mountains,unusual geological formation, caves, geysers, hot springs, mild formsof volcanic activity and desirable climate conditions.

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net occupancy rate (NOR): Refers to the use of availableaccommodations in a given period.

NOR = (total overnight stays) * 100%

(total available bed-places * number of nights)

nonscheduled air services: Revenue flights that are not operated inregular scheduled service, such as charter flights and all nonrevenueflights incident to such flights.

occupancy rate: Refers to the proportion of the rooms or bed-placesin a collective tourism establishment that is occupied over some periodof time, such as a night, month or year.

OECD: Organization for Economic Cooperation and Development

origin (place or country of): For domestic visitors, the place of originis the place in the same country in which the visitor has her/his usualresidence at the time a trip is undertaken; for international visitors, thecountry of origin is the country in which the visitor has his/her usualresidence at the time a trip is undertaken.

outbound tourism: Comprises the activities of residents of a givenarea traveling to and staying in places outside that area and outsidetheir usual environment for not more than one consecutive year forleisure, business and other purposes.

overbooking: Refers to the practice of preselling more hotel rooms (orairline seats) than the hotel (or airline) has to offer.

overflight: A scheduled flight that does not stop at an intermediate pointin its scheduled route because (1) the point is certified as a flag stop, andthere is no traffic to be deplaned or enplaned; (2) the carrier has receivedauthority to temporarily suspend service to that point; (3) weatherconditions or other safety and technical reasons do not permit landing; or(4) for any other reason. The aircraft need not fly directly over the point.

overflight charge: Fee assessed to air carriers for the privilege offlying over another nation.

overflight privileges: Permission granted by one country for an aircarrier of another country to fly over its land.

override commissions: Extra commission paid to travel agents bysuppliers based on incremental quantity or volume of sales.

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Glossary

PATA: Pacific Asia Travel Association

package travel/holidays/tours: A “package” comprises two or morecomponent products involved in a trip. Packages typically (but notnecessarily) include some transport and accommodation, but may alsoinclude such items as meals, excursions, entrance to tourism attractionsand souvenir items. Packages are sold to the consumer (i.e., the visitor) asa single product for a single price. Packages are usually marketed to theconsumer by travel agencies, but may also be marketed by other tourismoperators such as major airlines and accommodation enterprises.

passenger miles: One passenger carried 1 mile; this is calculated bymultiplying the number of miles traveled times the number of passengers.

passenger ships: Ships whose primary purpose is to transport peoplefrom one destination to another as opposed to simply pleasure cruising.

person-night: A statistical term denoting one paying guest staying onenight at a destination.

pleasure tour: Any prearranged tour associated with entertainment,leisure or recreation.

positioning: A marketing concept which “summarizes” all of the qualitiesof a given operation that differentiates it from its competitors, both fromthe point of view of the guest and as a goal of a marketing strategy.

protectionism: Theories and practices that attempt to protect a nation’seconomy by restricting the ability of foreign goods and services tocompete in the domestic market.

psychocentrics: Individual with a strong need for consistency and thefamiliar or the tried and true in their lives; when traveling they prefer tovisit “safe” destinations and do not experiment with accommodations,food or entertainment.

pull factors/push factors: Tourism theory that identifies the “push” exertedon the tourist by factors such as employment, community and personallife–a force that impels him/her to seek change, challenge, recreation. Thiscombines with the “pull” of attractive locations and activities.

purpose of visit: Refers to a motivation of the trip, the reason in theabsence of which the trip would not have taken place. The main purposeof visit refers to the reason in the absence of which the trip would nothave taken place or the given destination would not have been visited.

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rack rate: The regular published rates of a hotel. When special ratesare quoted, they represent a discount from the rack rate.

rebate: The practice of sharing, demanding, collecting, or receivingless compensation for air transportation, or for any service inconnection therewith, than the rates, fares, or charges specified in theair carrier’s currently effective tariffs.

recreational vehicle (RV): A motorized self-contained camping traileror a truck or van used for traveling.

re-entry permit: Document allowing alien residents to return fromtrips outside the country.

region: In the domestic context, “region” refers to any area within acountry, usually a tourism destination area; in the international context“region” refers to a grouping of countries, usually in a commongeographic area.

regional carrier: A carrier serving a particular area only.

residence: The place where the visitor resides.

resident: A person is considered to be a resident in a place if the person:

a) has lived for most of the past year (12 months) in that place; or

b) has lived in that place for a shorter period and intends to returnwithin 12 months to live in that place.

resort: Geographic or business area offering a variety of facilities servicesand activities for the accommodation, use and enjoyment of the visitors.

retail travel agent: A travel agent that sells travel products on a retailbasis on behalf of his/her principals, airlines, cruiselines, hotels, carrentals, and so on, for a commission to the general public.

rural tourism: type of tourism that bases its appeal and offeredservices on some aspect of the real or imagined rural, nonurban way oflife; the vast quiet, unrushed countryside, varieties of trees andanimals, and so forth.

same day visitor: Temporary visitors staying less than 24 hours in thedestination visited and not making an overnight stay.

satellite ticket printer (STP): Free-standing computerized machinecapable of accepting reservations and issuing tickets, boarding passes,

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Glossary

and other documents as programmed. Located in an airport, acorporate office or a shopping center, the STP is leased to a hostagency which oversees the machine and is responsible for the process.

scheduled air carrier: Airline or carrier that publishes itstransportation services timetable.

seasonality: Change in the level and composition of tourism demanddue to the time of the year. Seasons may be defined in terms of monthsor of groups of consecutive months with similar climatic conditions.

shopping expenditures: Refers to all outlays made for and during atrip on consumer goods other than food and drinks.

SICTA: the Standard International Classification of Tourism Activities(SICTA) is a classification of industry sectors comprising categorieswhich are important to tourism or which are highly dependent ontourism demand. The SICTA does not define the tourism industry, butprovides a framework for selecting appropriate industry sectors to beincluded in supply side tourism collections.

side trip: An optional trip offered to participants of a tour.

sightseeing tour: A tour within the city limits showing to clients the mainplaces of interest, avenues, churches, museums, monuments, and so on.

sightseeing company: A local company providing guided sightseeingin a city or town area.

site hardening: The addition of protective structures in an attempt toprotect the environment.

snowbird: Colloquial expression that refers to persons residing in northernclimates who tend to migrate south for a warm vacation in the winter.

special fare: Other than normal fares, special fares have variousrestrictions, for instance, advance purchase, specified length of stay, limitedor no schedule change privileges, and limited or no cancellation rights.

special interest tour: Prearranged, packaged itinerary designed toappeal to or respond to a request by a group of persons who have aparticular interest area of study or activity, for example, culture and thearts, sports, preservation and shopping.

suppliers: One who offers the products or services as sold through thetravel retailers or in some cases directly with the public.

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supporting documents: Those additional papers necessary to verify atransaction, such as a birth certificate, health certificate, passport, visa,voter registration card, and so on.

survey: The major methodology used to collect tourism expenditurestatistics. A survey typically involves selection of a sample of the unitsbeing measured, usually a group of visitors or business enterprises, andobtaining the required data from them by way of personal (face-to-faceor by telephone) interview or by mail questionnaire. A census is, ineffect, a survey in which the sample size is 100%.

sustainable tourism: The ability of a destination to remaincompetitive against newer, less explored destinations; to attract firsttime visitors as well as repeaters; to remain culturally unique; and to bein balance with the environment.

system of national accounts (SNA): A framework designed by theUnited Nations which provides a systematic summary of nationaleconomic activity, and which is adopted by many countries in theproduction of their national accounts.

target market: Subset of some larger population identified aspotential users of a product or service due to their income, location,lifestyle, ethnicity, previous use, or some combination of such factors.

time sharing: Concept dividing the ownership and use of a lodgingproperty among several investors; generally each time-sharingpurchaser is able to use the unit for a specified interval (e.g., 2 weeks)each year at a specified period of time.

total international tourism expenditures: Expenditures of outboundvisitors in other countries plus their payments to foreign carriers forinternational transport. They should also include any otherprepayments or payments made afterwards for goods and servicespurchased from other countries visited.

tour escort: A person designed as the leader of the group usually for theentire travel experience, although he may be assisted by other guides.

tour operators: An operator that provides services that includeresponsibility for the delivery and/or operation of all facets of the tour.Tour operators may also be wholesalers as well as local operators.

tour package: A joint service that gives a traveler a significantly lowerprice for a combination of services than could be obtained if each had

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Glossary

to be purchased separately by the traveler. Thus, the total price of apackage tour might include a round-trip plane ticket, hotelaccommodations, meals, sightseeing bus tours, and theater tickets.

tour wholesaler: A person who contracts with hotels, sightseeing andother ground components to provide ground packages for sale toindividuals through travel agents and direct air carriers to be used inconjunction with scheduled air transportation.

tourism: Comprises the activities of persons traveling to and staying inplaces outside their usual environment for not more than oneconsecutive year for leisure, business and other purposes. The usualenvironment of a person consists of a certain area around his/her placeof residence plus all other places s/he frequently visits.

tourism expenditures: Amount of money spent by tourists for theirtravel experiences. May be calculated as expenditures while at adestination or as a total, independent of where funds were spent. Includestransportation, lodging, food, gifts and incidentals, and entertainment.

tourism policies: Generally refers to public policies designed toachieve specific objectives relevant to tourism established at themunicipal, state or federal level.

tourism receipts: Amount of money spent by tourists in a given areaduring a specific time period.

tourism satellite accounts: A set of accounts, using national accountsconcepts, which provides a picture of the place of tourism in thenational economy.

tourist (overnight visitor): A visitor who stays at least one night in acollective or private accommodation in the place visited. Aninternational tourist is an international visitor who stays at least onenight in a collective or private accommodation in the country visited.Domestic tourist refers to a domestic visitor who stays at least onenight in a collective or private accommodation in the place visited.

tourist accommodation: Refers to any facility that regularly oroccasionally provides overnight accommodation for tourists.

trade fair: An organized event to bring people to a specific location toview a display of products and services, to exchange information,and/or to buy and sell the products or services that are specific to aparticular trade, business, or industry.

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transfers: The services of transportation from an airport, railwaystation, or other terminal to the hotel of the clients.

travel: The act of moving outside one’s community for business orpleasure but not for commuting or traveling to or from work or school.

travel advisory: Caution issued by some authoritative body regarding thesafety, changing conditions, or practices of a specific travel destination.

travel agent: Person, firm or corporation qualified to sell tours,cruises, transportation, hotel accommodations, meals, transfers,sightseeing and all other elements of travel to the public as a service.

travel agent commission: The payment by airlines and other travelsupplier’s to a travel agent of specified amounts of money (usually apercentage) in return for the agent’s sales of travel products.

travel allowance: Restrictions on the amount of foreign exchange thatresidents of a country may buy before departing on a trip and/or theamount of national currency residents of a country may take out of thecountry and convert into foreign currency.

travel industry: The composite of organizations, both public andprivate, that are involved in the development, production, distribution,and marketing of products and services to serve the needs of travelers.

travel industry distribution system: The process of moving travelproducts and services from suppliers to ultimate consumers.

travel insurance: Regular insurance tailored to cover travelers andtheir personal effects. May be sold by a regular broker; however, mosttravel agents and tour carrier personnel are specially licensed insuranceagents with the power to issue such policies and immediately bind theinsurance company.

traveler: Refers to any person on a trip between two or more localities.International traveler refers to any person on a trip between two or morelocalities in different countries. Domestic traveler refers to any personon a trip between two or more localities in his/her country of residence.

traveler profile: Characteristics used to describe various travel marketsegments.

trip: Used to describe tourism from the standpoint of the generatingplace or country (the origin) and covers the whole period that a persontravels away from home.

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Glossary

VALS (Values, Attitudes, Lifestyle, Segmentation): A touristmotivation theory that groups consumers into nine broad segmentswith labels such as “High Achievers” or “Emerging Activists.”

VFR (Visiting Friends and Relatives): Classification of travelerswhose purpose in traveling is visiting friends and relatives.

visa: An endorsement on a passport or document used in lieu of apassport by a consular office indicating that the bearer may gain entryinto the country of issue.

visitor: Refers to any person traveling to a place other than that ofhis/her usual environment for less than 12 consecutive months andwhose main purpose of trip is other than the exercise of an activityremunerated from within the place visited.

voucher: Document to be exchanged for goods or services, confirmingthat payment has already been made. Also called an exchange order.

WTO: World Tourism Organization

WTTC: World Travel and Tourism Council

wholesale travel agent: One who does not sell on a commission basis(as opposed to a retail travel agent) but contracts for large blocks ofadvanced reservations on airlines and other services such as hotels andtour packages at volume-based prices for resale. The wholesale travelagent assumes his or her own financial risk for all unsold products.

wide-bodied aircraft: A generic and commonly used term applied toany and all of the newest generation of jet aircraft with a fuselagediameter exceeding 200 inches and whose per engine thrust is greaterthan 30,000 pounds (i.e., Boeing 747, McDonnell Douglas DC-10 andLockheed L-1011).

yield: Air transport revenue earned per unit of air traffic carried. May becalculated and presented several ways (e.g., passenger revenue perpassenger-mile, per aircraft-mile, per passenger ton-mile, and perpassenger).

yield management: A system of calculating room rates, transportfares, or other prices which factors in actual and predicted sales fordifferent time periods in an effort to obtain the highest possiblepercentage of profit given envisioned levels of supply and demand.

youth hostels: Accommodations where the facilities may be somewhatsimilar to dormitories, usually associated with youth travel.

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Tazim B. Jamal is a Ph.D. candidate at the Faculty of Management,the University of Calgary, in Canada. She has an M.B.A. with aconcentration in international business from the University of BritishColumbia, as well as a Bachelor of Science and a Bachelor of Artsfrom the University of Calgary. She has had several years of workexperience in small business management and has also worked as asecurities broker for a national investment house. Her researchpublications and interests lie primarily in the areas of multi-stakeholdercollaboration for destination planning and management, community-based tourism and sustainable tourism for developing countries.

Walter Jamieson is a Professor of Planning in the Faculty ofEnvironmental Design at the University of Calgary in Alberta, Canada.He holds a Ph.D. in Urban and Regional Studies from the University ofBirmingham, England. Dr. Jamieson is also the Director of theHistorical Resources Intern Programme, Director of the Centre forLivable Communities and Vice Chair of the World TourismOrganization Education and Research Centre. He is co-editor of PlanCanada and a member of the Journal of Sustainable Tourism’s editorialboard. Dr. Jamieson has published extensively for various Tourismjournals, publications and projects.

395

About the Authors

George Kalaitzis is a graduate student at the School of Travel IndustryManagement at the University of Hawaii at Manoa. Mr. Kalaitzis holds aBachelor of Science in Business Administration from Ohio StateUniversity. He is a candidate for a Masters degree in Professional Studies.

Michael Kirk-Kuwaye is the former Internship Director and AssistantSpecialist for the School of Travel Industry Management at theUniversity of Hawaii at Manoa. He holds a Ph.D. in EducationalPsychology from the University of Hawaii.

Juanita Liu is Professor of Travel Industry Management at theUniversity of Hawaii at Manoa. She holds a Ph.D. in EconomicGeography from Simon Fraser University and a Masters degree inRegional Science from the University of Pennsylvania. Dr. Liu hasresearched and written extensively on tourism impacts as well as ontourism policy and tourism development. Her teaching and researchinterests lie primarily in the areas of the economic and environmentalimpacts of tourism, tourism development in island economies and thetheory of tertiary activities.

Robert Meyer is formes Assistant Professor of Travel IndustryManagement at the University of Hawaii at Manoa. He holds a Doctor ofPhilosophy in Business and Marketing Education from Michigan StateUniversity. Dr. Meyer was a Professional Fulbright Scholar in Tourismand International Business for the Government of Thailand. He hasconsulted widely on behalf of public and private sector organizations inThailand, Costa Rica, West Indies and throughout the United States.

Gianna Moscardo is Senior Research Assistant for the Department ofTourism at the James Cook University of North Queensland, Australiawhere she is working on Rainforest Tourism for CRCTREM andMarket Survey Research for CRC Reef. She holds a Ph.D. from JamesCook University and has published extensively for various Tourismjournals and conferences.

Philip Pearce is Foundation Professor and Head of the Department ofTourism at the James Cook University of North Queensland, Australia.He holds a Doctor of Philosophy from the University of Oxford. Dr.Pearce is the past Research Director of the National Centre for Studies inTravel and Tourism at James Cook University and is a member of theInternational Academy of Tourism Scholars and a member of theInternational Association of Scientific Experts in Tourism. Dr. Pearce hasalso extensively published research articles and consultancy reports in thefields of Tourism, Leisure, Recreation and Environmental Management.

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Mary Spreen is the formes Assistant Dean of Academic Services forthe School of Travel Industry Management at the University of Hawaiiat Manoa. She has an M.B.A. from the University of Hawaii at Manoa.

Patricia Thompson is the formes International Programs Specialist atthe School of Travel Industry Management at the University of Hawaiiat Manoa. She holds a Masters degree in Travel and TourismAdministration from George Washington University.

Russell Uyeno is a Junior Researcher at the School of Travel IndustryManagement at the University of Hawaii at Manoa. He has a Mastersdegree in American Studies and is pursuing a doctoral degree ineducation at the University of Hawaii. Mr. Uyeno’s professionalexperience includes real estate development and government policyanalysis.

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About the Authors

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