Introduction to Hospitality, 6e
and
Introduction to Hospitality Management, 4e
John R. Walker
Tourism
Chapter 9
What is Tourism?
• World’s largest industry!
• World Tourism Organization:
– A specialized agency of the United Nations
– The leading international organization in the field
– Plays a role in the
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Development of sustainable tourism.
Development of universally accessible tourism.
Continuation of economic development.
International understanding, peace, prosperity, and
respect for human rights and freedoms
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
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What is Tourism?
• For many developing countries, tourism
represents a large percentage of GDP and a
way of gaining a positive balance of trade with
other nations
• “Tourism comprises the activities of persons
traveling to and staying in places outside their
usual environment for not more than one
consecutive year for leisure, business, and other
purposes.”
– From the UNWTO definition of Tourism
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
What is Tourism?
• The WTO and the World Travel & Tourism Council
declare the travel and tourism industry to have the
following characteristics:
– 24 hours a day, 7 days a week, 52 weeks a year
economic driver
– Accounts for 9.1% of the GDP = Gross Domestic
Product - Worldwide
– Employs 259 million people (8.8% of the global
workforce)
– Leading producer of tax revenues
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Benefits of Tourism
• Tourism:
– Provides governments with substantial tax revenues
– Offers the greatest global employment prospects
– This trend is caused by:
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The opening of borders.
An increase in disposable income and vacations.
Reasonably-priced airfares.
An increase in the number of people with time and money.
More people with the urge to travel.
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Long-Term Prospects:
Tourism 2020 Vision
• International arrivals expected to reach over 1.8 billion
by 2030
• Europe, East Asia, the Pacific, and the Americas are the
top receiving areas
• There is interdependency between the various
segments of tourism: Travel, lodging, foodservice, and
recreation
– Each segment is, to an extent, dependent on another
for business
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
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The Five Ages of Tourism
• The historical development of tourism has been
divided into five distinct ages or periods:
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Pre-Industrial (prior to 1840)
The railway age
The automobile age
The jet aircraft age
The Cruise ship age
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Pre-Industrial Revolution
• Travel in the middle ages was mostly for
religious or trade reasons
• People made pilgrimages to various shrines:
Muslims to Mecca and Christians to Jerusalem
or Rome
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Rail, Automobile, and Coach Travel
• Changes in the technology of travel have had
widespread implications for society in the United
States
• Rail travel influenced the building of towns and
cities caused hotels to be built near rail depots,
and opened up the West
• Auto travel produced the motel and a network of
highways
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
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Traveling by Train
• One of the main factors that led to railroads in
the U.S. was the need to move goods and
people from one region of the country to another
• The train made mass travel possible for
everyone
• Cars and buses caused a decline in rail travel
• Facing a possible collapse of passenger rail
services, Congress passed the Rail Passenger
Service Act in 1970 (amended in 2001)
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Rail Travel Abroad
• Taking the train makes good sense in densely
populated areas such as those in Western
Europe and parts of Asia, and high-speed
networks are already well developed, often
drawing most of the traffic that formerly went by
air.
• Several European nations have banded together
to offer non-European visitors unlimited firstclass rail service for a reduced lump sum.
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Traveling by Car
• Began in 1895 in Germany
• Today, it is the American way of life
• Largest segment of ground transportation
• Creates accessibility to remote locations
• Rental Cars
– 5,000 rental companies in the U.S.
– 75% of car rentals take place at airports
– The top five rental car company agencies in the
United States are Hertz, Avis, Enterprise, National,
and Budget
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Traveling by Bus
• Convenient and economic mode of travel
• Allows travelers to relax and enjoy the ride
• Types of bus service:
– Local, charter, tour, commuter, airport, urban, and
rapid transit
• The largest and most recognized is the Gray
Line
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Airlines
• An integral factor in travel and tourism
• 5,500 planes are in the air over the U.S. any day
• Competition between airlines to provide lower
fairs has had a significant impact on increased
air travel
• Travelers are paying less, but carriers are
spending more on fuel and other costs (cutbacks
and layoffs)
• Projected travel:1 billion by 2012!
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Airlines
• Airline alliances will allow them access to each
other’s “feeder markets” and to resources that
will enable them to flourish in what will ultimately
be a worldwide deregulation
– A feeder market is a market that provides the
source—in this case, passengers for the particular
destination
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
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The Hub and Spoke System
•
Enables passengers to travel from one smaller
city to another smaller city via a hub or even
two hubs
•
The hub-and-spoke system has two main
benefits:
• Airlines can service more cities at a lower
cost
• Airlines can maximize passenger loads
from small cities, thereby saving fuel
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
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Hub-and-Spoke System
Figure 9-2
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
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New Airplanes
• Boeing’s first new airplane model in several
years, the Dreamliner 787, takes advantage of
huge advances made in aviation technology
• Is capable of flying long-haul routes using up to
20 percent less fuel
• Up to 50 percent of the primary structure of the
plane, including the fuselage and wing, is made
of components such as carbon fiber, which
reduces the weight of the plane
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
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New Airplanes
• Able to fly up to 9,700 miles without refueling,
the Boeing 787 Dreamliner could easily manage
a flight between New York and Moscow, Manila,
or Sao Paulo or between Boston and Athens.
• Richard Aboulafia, chief analyst with Teal Group,
comments, “If you look at it from an airline
standpoint: you don’t have a choice. If you don’t
have a 787-class aircraft and your competitor
does, he can under price you and out-profit you.”
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
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Components of Airline Profit and Loss
• Fixed costs do not change:
– Lease of airplanes, the maintenance of airline-owned or leased
terminals, interest on borrowed money, insurance, and pensions
• Variable costs rise and fall:
– Wages and salaries, advertising and promotion, fuel costs,
passenger food and drink, and landing fees
– The biggest single cost for airline operation is labor—which is
typically 30–45% of total operating costs
• A key statistic in analyzing profitability is the load
factor—percent of seats filled on all flights, including
planes being flown empty to be in position for the next
day’s schedule
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Cruise Ships
• The cruise market has increased dramatically in
recent years
• About 9 million Americans cruise each year
• Rates vary from about $95–$850 per person per
day
• Carnival Cruise Lines is the most financially
successful—netting about 20% of sales
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Cruise Ships
• Most cruise ships sail under foreign flags
because they were built abroad for the following
reasons:
– U.S. labor costs for ships, officers, and crew—in
addition to maritime unions—are too high to compete
in the world market
– U.S. ships are not permitted to operate casino-type
gambling
– Many foreign shipyards are government subsidized to
keep workers employed, thereby lowering
construction costs
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Cruise Market
• Mass market: Consists of people with incomes
in the $35,000–$74,000 range; average cost per
person is $95–$195 per day
• Middle market: Consists of people with incomes
in the $75,000–$99,000 range; average cost per
person is $175–$350 per day
• Luxury market: Consists of people with
incomes higher than $100,000; average cost per
person is more than $400 per day
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
The Economic Impact of Tourism
• International travelers spend $94 billion in travel
in U.S.
• $100 billion generated in tax receipts
• 59.7 million international travelers visit the U.S.
each year
• Tourism industry represents 1 in 10 jobs
generated
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
The Multiplier Effect
• When a tourist spends money to travel, to stay in
a hotel, or to eat in a restaurant, that money is
recycled by those businesses to purchase more
goods, thereby generating further use of the
money
• In addition, employees of businesses who serve
tourists spend a higher proportion of their money
locally on various goods and services
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Multiplier Effect
Figure 9-4
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Promoters of Tourism
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National Tourism Organization (NTO)
Travel Industry of America (TIA)
State Offices of Tourism
City-Level Offices of Tourism
Convention & Visitors Bureaus (CVBs)
National Offices of Tourism (NOT’s)
Pacific Area Travel Association (PATA)
Tour operators
Travel agencies
Travel corporations
Tour Wholesalers and Consolidators
Destination management companies
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Business Travel
• Business travel has declined due to the general
economic climate
• In addition, increases in airfares, incidences in
terrorism, and businesses reducing their travel
budgets have negatively affected business
travel.
• Business travelers tend to be younger, spend
more money, travel further, however they do not
stay as long as leisure travelers
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Social and Cultural Impact of Tourism
• Tourism can have both positive and negative
impacts on communities
• World tourism organizations recognize that
tourism is a means of enhancing international
understanding, peace, prosperity, and universal
respect for and observance of human rights and
fundamental freedom for all
• Provided the number of tourists is manageable
and they respect the host community’s
sociocultural norms and values, tourism
provides an opportunity for social interactions
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
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Ecotourism
• Ecotourism is focused more on individual values—it is
“tourism with a conscience”
• Those who implement and participate in ecotourism activities
should follow the following principles:
– Minimize impact
– Build environmental and cultural awareness and respect
– Provide positive experiences for both visitors and hosts
– Provide direct financial benefits for conservation
– Provide financial benefits and empowerment for local
people
– Raise sensitivity to host countries’ political, environmental,
and social climate
– Support international human rights and labor agreements
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Ecotourism
• Generally, most ecotourism destinations are
located in underdeveloped and developing
countries
• Ecotourism projects tend to be developed on a
small scale
• They are kept small in order to allow more indepth tours and educational opportunities
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
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Sustainable Ecotourism
• According to the UNWTO definition, sustainable
tourism refers to the environmental, economic,
and sociocultural aspects of tourism
development, with the establishment of a
suitable balance between these three
dimensions to guarantee its long-term
sustainability
• The increasing number of tourists visiting
destinations has heightened concerns about the
environment, physical resources of the place,
and sociocultural degradation
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Sustainable Tourism
 Places a broad obligation on society
 Sustainable tourism should:
a) Make optimal use of environmental resources that
constitute a key element in tourism development.
b) Respect the sociocultural authenticity of host
communities, conserve their built and living cultural
heritage and traditional values, and contribute to
inter-cultural understanding and tolerance.
c) Ensure viable, long-term economic operations.
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Hospitality Management, 4e - Walker
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Cultural, Heritage, Nature,
and Volunteer Tourism
• Culture and heritage are “our legacies from the
past, what we live with today, and what we pass
on to future generations. Our cultures and
natural heritages are irreplaceable sources of
life and inspiration.”
• UNESCO has designated a number of World
Heritage Sites worthy of protection and
preservation because of the outstanding value to
humanity of their natural and cultural heritage
• There are 19 sites within the U.S.
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
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Cultural, Heritage, Nature,
and Volunteer Tourism
• Cultural tourism: Motivated by interest in
cultural events
• Heritage tourism: Motivated by historic
preservation
• Nature tourism: Motivated by nature
• Culinary tourism: Culinary adventures are at
least a contributing motivation
• Volunteer tourism: Motivations include
opportunity to travel safely and cheaply and to
experience different cultures
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
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Trends
• Ecotourism, sustainable tourism, and heritage tourism will continue
to grow
• Tourist arrivals will continue to increase
• Governments will increasingly recognize the importance of tourism
• More bilateral treaties signed
• The promotion and development of tourism will move more from the
public sector (government) to the private sector (involved industry
segments)
• Technology will continue to advance
• Marketing partnerships and corporate alliances will increase
• Employment prospects will continue to improve
• Ticketless air travel will continue to increase
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
Trends
• Ticketless air travel will continue to rise
• Increased Internet bookings
• Managing destinations will continue to be a challenge
• Low-cost, no-frills airlines will continue to gain market share
• Airlines will entice travelers to book trips via the airline’s website
• Automatic airport check-ins will become more popular
• Cruise industry will continue to expand
• Increase in alternative cruises
• Increased concern for the health and safety of travel and tourism
• Nature, culinary, and volunteer tourism will increase
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved
The End
Introduction to Hospitality, 6e and Introduction to
Hospitality Management, 4e - Walker
© 2013 by Pearson Higher Education, Inc
Upper Saddle River, New Jersey 07458 • All Rights Reserved