introduction to hospitality fifth edition john r walker

introduction to hospitality fifth edition john r. walker Chapter 9: Tourism

Chapter 9 Tourism • • • • What is Tourism? Benefits of Tourism 2020 Vision Five Ages of Tourism Types of Travel Economic Impact The Multiplier Effect Promoters of Tourism Why People Travel Social and Cultural Impact of Tourism Ecotourism Sustainable Tourism Cultural, Heritage, Nature, and Volunteer Tourism Trends Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Tourism • Hospitality and Tourism Industries are the largest and fastest growing in the world. • World Tourism Organization: – A specialized agency of the United Nations – The leading international organization in the field – Plays a role in the • • Development of sustainable tourism. Development of universally accessible tourism. Continuation of economic development. Development of a global code of ethics for tourism. Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Tourism • The WTO and the World Travel & Tourism Council declare the travel and tourism industry to have the following characteristics: – 24 hours a day, 7 days a week, 52 weeks a year economic driver – Accounts for 10. 2% of the GDP = Gross Domestic Product – Employs 214 million people (7. 8% of the global workforce) – $73. 2 billion in spending in the U. S. – Leading producer of tax revenues – 4. 6% annual forecasted growth until 2015 Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson 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: • • • 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 Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Tourism 2020 Vision • International arrivals expected to reach over 1. 56 billion by 2020 • Europe, East Asia, the Pacific, and the Americas are the top receiving areas • There is interdependency between the various segments of tourism: Travel, lodging, foodservice, and recreation – Each segment is, to an extent, dependent on another for business Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

The Five Ages of Tourism • Pre-Industrial Revolution • Railway Age • Automobile Age • Jet Age • Cruise Ship Age Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Traveling by Train • One of the main factors that led to railroads in the U. S. was the need to move goods and people from one region of the country to another • Cars and buses caused a decline in rail travel • Facing a possible collapse of passenger rail services, Congress passed the Rail Passenger Service Act in 1970 (amended in 2001) Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Rail Travel • Shortly after, the National Railroad Passenger Corporation began operation as a semipublic corporation—established to operate intercity passenger trains—and moved in the direction of semi-nationalization of the American railroads • The corporation is known today as Amtrak • While the U. S. tries to rejuvenate rail travel under the direction of Amtrak, rail service in other parts of the industrialized world is far ahead in progress (i. e. , TGV’s, Shinkansen, etc. ) Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Rail Travel • Today, trains are becoming more energy and time efficient – Maglevs can travel at speeds of over 300 miles per hour, lifted off the ground on a cushion formed by magnetic forces and pulled forward by magnets – They run more quietly, smoothly, and can climb steeper grades than the conventional train – They are more energy efficient, have lower maintenance costs, and require fewer staff than comparable transportation; however, given the high cost of construction, the concept may not prove viable Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson 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 5, 000 rental companies in the U. S. : – 75% of car rentals take place at airports – The top four rental car company agencies in the United States are Hertz, Avis, National, and Budget Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson 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 Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Air Travel • An integral factor in travel and tourism • 4, 500 planes are in the air over the U. S. any day • Competition between airlines to provide lower fairs had a significant impact on increased air travel • Travelers are paying less, but carriers are spending more on fuel and other costs (cutbacks and layoffs) • Projected travel to reach 1 billion by 2012 Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Air Travel • Airline alliances will allow them access to each other’s “feeder markets” and to resources that will enable them to flourish in what will ultimately be a worldwide deregulation – A feeder market is a market that provides the source—in this case, passengers for the particular destination Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

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 three main benefits: • Transportation between smaller cities • Provides service to more cities at lower cost • Transportation from small cities to reach worldwide destinations Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Figure 2 -2 Hub-and-Spoke System Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

New Airplanes • The Boeing 787 Dreamliner is able to fly up to 9, 700 miles without refueling • It uses up to 20% less fuel than today’s similar-sized airplanes • The Airbus A 380 can carry up to 500 passengers for a distance of up to 8, 000 miles Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

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 Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Cruise Ships • The cruise market has increased dramatically in recent years • About 9. 0 million Americans cruise each year • Rates vary from about $95–$850 person per day • Carnival Cruise Lines is the most financially successful—netting about 20% of sales Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Industry Severely Impacted Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson 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 Fifth Edition John Walker Copyright © 2009 by Pearson 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 person is $95–$195 per day • Middle market: Consists of people with incomes in the $75, 000–$99, 000 range; average cost person is $175–$350 per day • Luxury market: Consists of people with incomes higher than $100, 000; average cost person is more than $400 per day Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Economic Impact of Tourism • International travelers spend $94 billion in travel in U. S. • $100 billion generated in tax receipts • 46 million international travelers visit the U. S. each year • Tourism industry represents 1 in 11. 7 jobs generated Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

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 Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Figure 2 -3 Multiplier Effect Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Promoters of Tourism • • • National Tourism Organization (NTO) Travel Industry of America (TIA) State tourism offices Convention & Visitors Bureaus (CVBs) Pacific Area Travel Association (PATA) Tour operators Travel agencies Travel corporations Travel and tour wholesalers National Office of Tourism Destination management companies Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Why People Travel • Main reasons are for pleasure and business • 82% of domestic travel is for leisure/pleasure • Most popular reasons for pleasure travel: – – – To experience new and different surroundings To experience new cultures and see how others live Rest and relaxation To visit friends and family To view or participate in a sporting event Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Why People Travel • Some factors influencing travel: – Entertainment – Purchase opportunities – Climate for comfort (i. e. , Florida in the winter when you live in the North) – Cost – Special interests (i. e. , golf, location, etc. ) Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Why People Travel • Business travelers travel for business purposes (i. e. , meetings, sales, conventions, trade shows, and expositions) • Business travel is on a decline due to: – The economy. – Increased airfares. – Terrorism. – A reduction in travel budgets. Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson 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 Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

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 Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Sustainable Tourism • • Places a broad obligation on society Sustainable tourism should: 1. Make optimal use of environmental resources that constitute a key element in tourism development. 2. 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. 3. Ensure viable, long-term economic operations. Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Cultural, Heritage, Nature, and Volunteer Tourism • Culture and heritage are “our legacies from the past, what we live with today, and what we pass on to future generations. Our cultures and natural heritages are irreplaceable sources of life and inspiration. ” • Cultural tourism: Motivated by interest in cultural events • Heritage tourism: Motivated by historic preservation • Nature tourism: Motivated by nature • Culinary tourism: Culinary adventures are at least a contributing motivation • Volunteer tourism: Motivations include opportunity to travel safely and cheaply and to experience different cultures Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

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 Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Trends • Increased Internet bookings • Managing destinations will continue to be a challenge • Low-cost, no-frills airlines will continue to gain an increased market share • Airlines will try to entice travelers to book their trips via the airline’s website • Automatic airport check-ins will become more popular • Cruise industry will continue to expand • Increase in alternative cruises • Increased concern for the health and safety of travel and tourism • Nature, culinary, and volunteer tourism will increase Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

Key Terms / Thoughts • • Railway / Car / Cruise /Air Developments Cruise Markets Southwest and Jet Blue Load Factor Hub and Spoke System Support ___% of Global Workforce Travel Agent / Tour Operators WTO Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.

The End Introduction to Hospitality Fifth Edition John Walker Copyright © 2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved.