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Chapter 5 Tourism Industry

Chapter 5 Tourism Industry. Learning Objectives Explain the interdependencies between the different sectors of tourism industry. Identify the important sectors of hotels, food services, transportation, and travel services required for a tourism destination. Overview .

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Chapter 5 Tourism Industry

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  1. Chapter 5 Tourism Industry Learning Objectives • Explain the interdependencies between the different sectors of tourism industry. • Identify the important sectors of hotels, food services, transportation, and travel services required for a tourism destination.

  2. Overview The sectors of tourism industry: • Hotels; • Food services; • Travel services; • Transportation; • Infrastructure.

  3. Operating Sectors of the Tourism Industry OPERATING SECTORS OF THE TOURISM INDUSTRY Accommodation Sector Travel Trade Sector Tourism Services Events Sector Transportation Sector SPIRIT OF HOSPITALITY Attractions Sector Entertainment Sector Adventure & Outdoor Recreation Sector Food Services Sector

  4. Accommodations Non-Commercial Commercial Non-Profit Motels Institutional Time Share Facilities Hotels (Chains/Independent) Bed & Breakfast College/University Hostels Private Homes Resort Hotels Upscale Upscale Mid Range Economy Spas and Health Care Facilities Suite Hotels Spa Home Exchange Shelters Mid Range Meetings & Convention Hotels Casino Deluxe Budget Extended Stay Budget YM / YWCA Airport Hotels Luxury 1. Hotels — Accommodations Structure

  5. hospitality and related services Introduction Providing overnight accommodations for travelers goes back into antiquity—it is the world’s oldest commercial business. Guest rooms were first part of private dwellings.then came caravansaries and guest quarters provided in monasteries.today, lodging and food service activities are enormous in economic importance.many lodging places provides meeting rooms, convention facilities and services,restaurant ,bars, entertainment, gift shops, gaming, health clubs, and other accommodations industry.

  6. Hotels classifications • Different systems are used to classify hotels. • The five-star rating system is preferred. • Five stars; • Four stars; • Three stars; • Two stars; • One star. • Grading criteria are given by national tourism organization.

  7. Top 10 hotel chains and brands by AHMA(2004)

  8. Top 20 Hotel Chains (2000) • Rank Corporate Chain Rooms Hotels • 1 Cendant Corporation 541,313 6,455 • Bass Hotels & Resorts 490,531 3,096 • Marriott International 390,469 2,099 • Accor 389,437 3,488 • 5 Choice Hotels International 350,351 4,392 • 6 Hilton Hotel Corporation 317,823 1,895 • 7 Best Western International 307,737 4,065 • Starwood Hotels & Resorts 227,042 738 • Carlson Hospitality Worldwide 129,234 716 • Hyatt Hotels/Hyatt International 86,711 201 • Sol Meliá 82,656 338 • Hilton International 64,647 223 • Wyndham International 62,262 242 • Compass Group (Forte Hotels) 59,928 453 • Société du Louvre 53,083 868 • FelCor Lodging Trust 50,000 186 • TUI Group 49,801 204 • MeriStar Hotels & Resorts 48,767 225 • Extended Stay America 41,586 392 • U.S. Franchise Systems 41,177 505 *Rankings are based on total rooms Source: Hotels, July 2001. Hotels magazine, a Cahners Publication, 2000 Clearwater Drive, Oak Brook, IL, U.S.A. 605230

  9. Trends 1) Merges and acquisitions. They have been in the lodging industry for some time, but now are current merge mania. And consolidation will continue to take place both domestically and internationally. 2)Hotel chains.Chains can most effectively use training programs, employee selection programs, major equipment with different layout, prices, advertising, technology, marketing, and so on. 3) Franchisees. The advantage is that they receive a known “name”,the knowledge,advice,and assistance of a proven operator,and it also spreads the costs of promotion, advertising, and reservation systems over all outlets, making the unit cost much lower. 4) Management contracts.More large properties will be operated under management contracts. 5) The increased use of central reservation system.

  10. Food Services Cafeterias Traditional Restaurants Fast Food Restaurants Independent Chain In-Hotel Independent Minimal Service Ethnic Specialty Specialty Local Full Service Local Ethnic Broad Menu 2. Food Services Structure

  11. The Food Service Industry Like the lodging industry ,the food service industry is a very old business.Such a service came out of the early inns and monasteries.In cities,small restaurants began serving simple dishes such as soups and breads. With the development of stagecoaches,taverns began providing food and lodging along the early road and in small communities .Some believe that these roadside taverns were really the beginnings of the American hotel industry.As cities grew so did eating establishments.Some names of historic restaurants in the 1820s in New York City were Niblo’s Garden ,the San Souci,and Delmonico’s.

  12. Kinds of the food service 1)local restaurants . That include fast-food units,coffee shops,specialty restaurants,family restaurants cafeterias,and full-service restaurants. 2)travel food service. It contains food operations in hotel and motels. 3) contract institutional food service. 4) vending

  13. Fast food Fast food chains have enjoyed great success in part . Reasons: 1)limited menus.It gives customers purchasing power, less waste, more portion control. 2)Lower operating costs.Most fast—food operations use disposable paper and plastic,so incline the costs. 3)Specialization. The employees have becoming specialists ,and they work efficiently. 4)Good reputation. Chain firms are house—hold words: like McDonald’s, Kentucky Fried Chicken.

  14. Suppliers Transportation providers, Accommodation Food Service Resorts Recreation, Entertainment, Etc. Specialty Channeler Direct Channel Via Telephone Suppliers office Tour Wholesaler Specialty Channeler Specialty Channeler Retail Travel Agent Tour wholesaler Specialty wholesaler Tour Wholesaler Retail Travel Agent Tour Wholesaler Retail Travel Agent Retail Travel Agent Customers Individuals Pleasure Groups, Business Groups, Etc 3 Travel services — Channels

  15. The ways of travel distribution channel Travel agents Internet Consolidators The tour wholesaler Specialty channeler Automated distribution

  16. Travel Agents The definition of travel agent: A travel agent is a middleman --a business man or person selling the travel industry’s individual parts or a combination of the parts to the consumer. In marketing terms: a travel agent is an agent middleman, acting on behalf of the client, making arrangements with suppliers of travel(airlines,hotels, tour operators), and receiving a commission from the suppliers. In legal terms: a travel agency is an agent of the principal—specifically, transportation companies. The agency operates as a legally appointed agent, representing the principal in a certain geographic area. The agency functions as a broker( buyer and seller together) for the other suppliers , such as hotels, car rentals, ground operators, and tour companies. A travel agent is thus an expert , knowledgeable in the schedules, routing, lodging, currency, prices, regulations, destinations, and all other aspects of travel and travel opportunities. In short, the travel agent is a specialist and counselor.

  17. Travel Agents Types of Travel Arrangements Made As would be expected, the most common type of travel arrangement made is for air transportation. In 1997, 56 percent of the total dollar volume was for air travel. Cruise sales accounts for 18 percent up from 14 percent in 1995. Much smaller proportions of the total dollar volume are attributable to lodging, car rentals, and miscellaneous arrangements; these activities accounted for 27 percent of total agency dollar volume.

  18. Travel Agents The future of travel agents There is a question being raised today: Will there be a travel agent in the future? Some so-called experts have been predicting for years that intermediaries would disappear and that with the current level of education, technology, and communication, consumers could conduct business directly with suppliers, and middlemen would gradually disappear because they were no longer needed. . Some other reason why this question has being raised: The Internet Commission caps封顶: The maximum dollar amount an airline, or other supplier, will pay as commission regardless of the actual price of the ticket or the standard commission rate. (From: http://www.hometravelagency.com/dictionary/index.html) Commission cuts The changing world of travel

  19. Travel Agents Actually ,intermediaries are doing more business than ever before, while in the same time there has been an increase in the direct selling. That’s because travel agents are adapting to new ways of doing business. They are shifting their revenue source from the airlines toward other suppliers, they are increasing in size, they are charging fees. And travel agents are joining consortiums. They are creating their own web sites. Despite Internet is the rival of travel agencies, travel agencies can make use of it, for example: agents can use Internet to research travel products or destination, and through Internet travel agencies can greatly expand their reach. And the most important thing that make travel agents survive is they are certificated by the client—they do really save time and money for the customers. What’s the fact?

  20. Travel Agents Travel Agency Organization ASTA : The American Society of Travel Agents ARTA: The Association of Retail Travel Agents NACOA: The National Association of Cruise Only Agencies ICTA: The Institute of Certificated Travel Agents

  21. Travel Agents The American Society of Travel Agents (ASTA) Brief instruction of ASTA: It is the largest association of travel and tourism professionals in the world with 26500 members in over 165 countries. It was established in 1931, ASTA continue to serve the best interests of the travel industry and the travel public. The purpose of ASTA: • To promote and encourage travel among people of all nation. • To promote and encourage the use of professional travel agents worldwide. • To promote and represent the views and interests of travel agents to all levels of government and industry. • To promote professional and ethical conduct in the travel agency industry worldwide • To serve as an information resource for the industry worldwide. • To promote consumer protection and safety for the traveler. • To sponsor and conduct educational programs for travel agents on subjects related to the travel industry. • To engage in any lawful activity that the members of the association shall deem fit and appropriate for the promotion of their common welfare.

  22. 4. Transportation A complete transportation system consists of four elements: • Modes • road, sea, air, and rail. • The way • roadways, seaways, airways, and railways. • Terminals • coordination between the three modes of air, rail, and bus. • Technology • Intelligent Transportation Systems (ITS) can help manage the ground transportation.

  23. Transportation Air Road Other Water Rail Inland Maritime Vehicles Used for Accommodation Motor Bike Bus Auto Foot Motor Home Snowmobiles Charter Private Privately Owned Private Truck Camper Private Scheduled Bicycles Commercial Commercial Private Travel Trailer Horse Drawn Vehicles Charter Charter Charter and Tour Operator Rental Commercial Tent Trailer Scheduled Scheduled Scheduled Other Aerial Tramways and Ski Lifts Passenger Transportation Structure

  24. Passenger transportation Introduction • (一) The position of various mode of passenger transportation • Air travel dominates long—distance and middle—distance tourism. • The private automobile dominates for short trips and is the most popular means of travel for most domestic journeys,and is the very important in region and international tourism. • Rail travel plays a more limited role than it did in the past ,but it could increase its market share ,especially in Europe. • Motor coach can reach many places that are not serviced by any other public mode ,but it account for a very small percentage. • 5) Cruises are becoming more popular and are the fastest—growing segment of tourism,although it is still small quantitatively.

  25. Passenger transportation (二) The pressures on transportation putted by world tourism growth Urgent Transportation Problems: • Congestion. • Serious congestion affects most passenger transportation modes,particularly on roads and at airports during peak periods. • Safety and security. • This is a basic requirement of tourism. • Environment. • An increase in traffic may harm the environment if an area does not have the carrying capacity for additional tourists. • Seasonality. • Seasonal patterns of tourism demand create overcrowding at certain times.conversely,low occupation and load factors will occur at other periods.

  26. Airline Industry • World airline industry carries over 1 billion passengers per year. • The U.S. airline industry in 2000 • * Employed 679,967 people • * Carried 1.6 million passengers each day • * Recorded revenues of $129.5 billion • However, during 1990 - 1993, U.S. carriers lost more than $12.8 billion. A weak air transportation system affects the rental car business, hotels, and attractions. • In 2001 carriers suffered record losses.

  27. The Airline Industry Important position The world’s airline industry now carries over 1billion passenger per year.There are about 800 air carriers in the world,and they employ more than 3 million people and fly from 14000airports,and recorded 109.5billion dollars in revenues in 1997. Guests A 1997 surge of air travelers by the Gallup Organization revealed that a record 80% of the entire adult population in the United States had flown. Two out of every five U.S.citizens flew during 1997. The surge found that 53% of airline trips during 1997 were for pleasure or other personal reasons, and 47% were for business.

  28. The Airline Industry Advantages • Rapidness. The airline revolutionized travel,and the range and speed of jet travel has greatly expanded what tourist or business travelers could accomplish with the equivalent time and funds at their disposal. • Convenience. The system is very efficient.You only need make a call to an airline or a travel agent and purchase your ticket,then all you have to do is go to the airport and check your bags to your desired destination. • Safety. According to National Transportation Safety Board’s date, U.S. air carriers provide scheduled service have an enviable safety record.

  29. The Airline Industry • Disadvantages • Some people fear of flying . • Lacking of geographic accessibility—many communities in the country era not serviced by air transportation. • An additional problem is the length of time spent getting to and from the airport.Frequently,this time exceeds that spent en route. • It is a point to point travel,not a surface travel,so it must be joined with other modes.

  30. The Airline Industry Deregulation and Alliances Under deregulation, the airline industry has undergone dramatic change. Looking back , we can see that it led to significant consolidation, hub systems, low airfares in competitive situations, and high airfares where competition is lacking. (Airline Deregulation Act issued in 1978) A wave of alliances. And it based on equity positions, to code sharing, to frequent flyer programs reciprocity and other joint marketing arrangements.

  31. Rail Industry • Reached its peak volumein the U.S. in 1920. • Major railroads want out of the passenger service business (except commuter service). Passenger service depends on Amtrak. The situation is similar in Canada with passenger service dependent on VIA Rail. • Passenger rail service is much more important outside of North America. Efficient, economical, high speed trains provide an alternative to air travel.

  32. The Railway Industry History and nowadays Railway station transportation , once the major mode of travel in the U.S., reached its peak volume in 1920. And today the survival of service depends largely on Amtrak.

  33. The Railway Industry Amtrak • It is the marketing name for the National railroad Passenger Corporation, the controlling stock of which is owned by the U.S. government through the U.S.Department of Transportation. Amtrak’s business is providing rail passenger transportation in the major intercity markets of the U.S.. • Although it receives financial support from the federal government , Amtrak is not a government agency. It is a corporation structured and managed like other large business in the U.S. and competes with all other modes in the transportation marketplace.

  34. The Railway Industry • Amtrak • Serving 44 states and 500 destinations on its 23000—mile route system, Amtrak carried more than 20 million intercity passengers in 1997. In addition, Amtrak carried more than 48 million commuters on trains operated under contract. Amtrak employs 223000 people. Amtrak generated a record—making revenue of 1.67 billion dollars in fiscal year in 1997. About 22000 of its employees are represented by 14 different labor organizations. • But threats are also here for Amtrak. Especially for the competition with airline. This is what it does : • (1) modernize services. • (2) improve the speed of rail travel.

  35. Motorcoach Industry • Intercity bus passengers tend to be lower income non-business travelers who are very price sensitive. • Intercity bus service is becoming less important due to increased auto ownership and aggressive airline pricing. • Bus travel is characterized by: • More travel to and from rural areas and small towns than other modes of transportation. • Lower average ticket revenues than other modes. • Intercity bus industry is a small-business industry with a great deal of flexibility. • Many bus companies focus primarily or exclusively on charter, tour or commuter operations.

  36. The Motorcoach industry Introduction The American Bus Association reports that there are between 26000 and 28000 commercial buses in use for charters, tours , regular route service, and special operations in North American. The amount of time that motor coach fleet buses spend in charters is 66.6%, in tours 22.5%, and in regular route scheduled service 10.9%. According to the U.S.Department of Transportation, the 17 carriers in the U.S.reported 33.7million revenue passengers in 1996, and overall operating revenue for them was 835.8 million dollars in 1996.

  37. The Motorcoach industry • Advantage • Cheap and convenient. • Energy—efficient.As reported at the 1993 White House Conference on the Globe climate Change ,intercity bus service is the most energy—efficient passenger transportation mode. Two largest companies Greyhound Line Inc. is the only nationwide bus carrier for regular route service. The Trailways National Bus System , is a federation of independently owned bus companies , and covers a large portion of the U.S..

  38. The Motorcoach industry Charters and Tours Both domestic and international travelers are heavy users of motor coach because coach travel gives them to see and experience sights with a group of friends without having to deal with traffic and road maps. About 1/3 of U.S. motor coach and tour operators polled by ABA report an increase in overseas visitors. Sales of tours and charters are expected to grow in the 3 to 5% range. Trends (1) merges and acquisitions (2) improve service ,change the image

  39. Automobile • Most popular mode of travel in the world because of affordability, flexibility, and convenience. • In the U.S., the Travel Industry Association of America reports that 80% of person- trips are made by auto. • Rental car industry growing in importance. • * Grosses approximately $24 billion per year.

  40. The Automobile Position of auto Most of the travel in the world takes place in the automobile. The National Travel Surge reports that 80% of the person-trips are made by auto (includes rental cars ,truck, and RVs) in 1996 in the U.S.. Advantages (1) affordability (2) flexibility (3) convenience

  41. The Automobile Kinds of auto (1) Recreation Vehicles (2) Private Cars (3) Rental Cars (4) Taxi and Limousine Service

  42. Cruise Industry • Fastest growing segment of the travel industry. • Since 1980 had average annual growth rate of 8.4%. • Expanding fleets. • Adding new ports of call. • Seeing consolidation. • Served by the Cruise LinesInternational Association.

  43. The Cruise Industry The position of the cruise industry Cruise Lines International Association states that cruising is the currently the fastest—growing segment of the travel industry. It is experiencing a surge of growth in passengers, ships, and ship passenger capacity. Since 1980, the industry has had an average annual growth rate of 7.6%. Although ships have been a means of transportation since early years, the cruise industry is young, and it is barely 20 years old. Its purpose is really to provide a resort experience rather than point—to—point transportation.

  44. The Cruise Industry Clientele Historically, most of the cruise company have focused their marketing efforts on North American clientele. However, with a marked increase in recent years of European, South American, and Asian vacationers taking American—style cruise, those company have begun to par more attention to the international markets, especially for European clientele. Repeat business No other vacation kind can touch a cruise for produce satisfaction and repeat business. Of those who have cruised in the last five years,the average number of cruise per person is 2.4, or one cruise every two years.

  45. 5. Infrastructure • It consists of all the underground and surface developmental construction of a region. • The important part of tourist infrastructure: • Water system; • Power sources; • Communication network – telephone and/or internet access; • Drainage and sewage; • Health care – the type of health care facilities based on the number of visitors, ages, the type of activities; • Security system.

  46. The End !

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