Unit 1: The travel and tourism industry

Structure of the Industry

 International tourists- people from overseas

 Domestic tourists- people from your own country

 Leisure tourists are tourists that visit for pleasure in their free time. They engage in leisure
related activities, paid with their own economic resources. They are on HOLIDAY.
o Some examples of leisure tourists are day trippers, holiday takers, short break &
overnight visitors.

 Business tourists are high spending tourists that travel for attendance at conferences, sales trip
& trade shows. They usually make extensive use of premium air fares and luxury hotel rooms as
the company pays for it.
o Some examples of business tourists include people going for:
 Meetings (events that bring people together to exchange information)
 Incentives (a reward for employee effort)
 Conferences (multi-day events with at least 100 delegates)
 Exhibitions (bringing people together to view products and services).

 Visiting Friends & Relatives (VFR) are people who travel for family occasions such as weddings
and funerals, or for leisure, holidays and recreation.

 Sub-Sectors of the Industry:

o Tour Operators- combine a number of inter-related tourism products and services that
together offer a comprehensive experience for travellers. Usually at a lower cost
compared to buying each product separately.

Note: They are the ‘big guys’ of the industry compared to Travel Agents

o Travel Agents- main role is to sell holidays, ancillary products, advise customers &
provide information.

Note: They are the ‘smaller guys’ of the industry compared to Tour Operators

o Accommodation Providers- Provide a variety of accommodation types to suit a wide

range of tourists.
  Examples: hotel, motel, holiday homes, guesthouse, hostel, holiday village, bed
& breakfast.

o Catering Outlets- Satisfy tourists’ basic needs in any destination or resort. They are also
important for promoting and developing all types of tourist facilities.

o Tourist Information & Guiding Services- escort groups of visitors around monuments,
sites or city. They provide information of the history and geography of the area in the
visitor’s language heritage and environment through an entertaining and inspiring
method.

o Ancillary Tourist Services- provide opportunities for intermediaries to offer additional

travel products and services to their customers.
 Eg. Travel insurance, souvenir shops, publications and postcards.

o Attractions- draw tourists’ attention to a destination by providing opportunities for

relaxation, amusement, entertainment and education.
 Natural attractions: landscape features, lakes, forests, mountains
 Built attractions: animal parks, historic sites, theme parks

o Entertainment Venues- very important part of tourism, it is the main driving force
behind development of destinations.
 Museums, sport stadiums, theatres, etc.

o Transportation- provide transportation services and improve the transport facilities &
develop them to make the destination accessible to their markets. Lack of accessibility
can make or break a destination.
 Air- Airlines
 Water- Ferry Operators/Cruise Companies
 Land- Railway companies/Coaches/Car Rentals

o Tourist Boards- Increase the value of inbound tourism by identifying a series of

objectives and facilitating strategies for their implementation.

Note: Basically, the mastermind behind the growth and development of a particular
destination in terms of tourism
Economic, Environmental & Social-Cultural Impacts of Tourism
 Economic Impacts
+ Increased employment rate- tourism creates employment opportunities in sectors like
accommodation, travel agencies, catering and transport services.

+ Improved local economy- tourist spendings helps generate income and stimulate the
investment necessary to financial growth in other economic structures

Note: So, the more money generated from tourists, the more money invested into
improving other sectors

+ Improved infrastructure- when profit comes through visitor spendings, the country
would invest improving roads and public facilities which can help benefit a tourists
experience and the citizens’ lifestyle.

+ Multiplier Effect:
New tourist developments set up (resorts, hotels, attractions etc)  Local businesses
are attracted to the area and ‘feed off’ tourists coming to the tourist development 
More jobs are created from these businesses  Workers spend their income in the
local area, which increases tax revenues  Taxes spent on improving infrastructure,
image and tourist services  Area becomes a more popular destination, which
increases the number of tourists and therefore the income and revenue for
reinvestment  Since it becomes a more popular destination, new tourist
developments set up
Cycle Repeats

- Import Leakage- Occurs when tourists demand standards of equipment, food and other
products that the host country cannot supply, because the local products are not up to
the hotel’s (tourist’s) standards.

- Export Leakage- Occurs when overseas investors who finance the hotels & resorts take
their profits back to their country of origin.

- Tax inflation- the costs of day-to-day products like water and food purchased by locals
will be expensive

 Environmental Impacts
+ Conservation & Preservation- saving endangered places and species by creating
sanctuaries (national parks, wildlife reserves)
 + Investment- using money gained through tourist spendings to help invest in preserving
the area.
+ Visitor Management- controlling the number of visitors in a certain area to avoid
congestion and noise pollution

- Air pollution- due to excessive use of air & road transport, increasing risk of cardio-
respiratory death by 2-3% day by day.

- Water pollution- water becomes more contaminated by littering by large number of

tourists. Sewage and oil spills discharged from cruise ships pollute the water bodies.

- Soil erosion, natural habitat loss, increased pollution, increased pressure on

endangered species and heightened vulnerability to forest fires

- Vegetation- scarce resources such as food in the local area due to high number of
tourists visiting to dine in the local cuisine.

 Socio-Cultural Impacts
+ Awareness of cultural exchange- tourists and locals can explore cultures and traditions
in the area.

+ Boost for cultural conservation- through traditional activities and cultural & historic
sites, the local area’s culture and history can be preserved.

- Demonstration Effect- the local population of the country may gain influence from
tourist behaviours (especially the youth), reducing culture conservation and loss of
national identity.

- Globalisation- rapid transfer of money, people, information, technology and materials

around the globe can cause tourists to look for similar products or services instead of
cultural and traditional alternatives

- Culture clash- tourists may unintentionally break laws or disrespect the culture’s
customs and moral values of the host country.

- Staged Authenticity- adapting cultural activities or performing shows for tourists as if

they were happening in real life is known as staged authenticity

- Crime- The presence of a large number of tourists with a lot of money to spend attracts
robbers
Role of National Governments in Forming Tourism Policy
 Aims & Objectives of Governments to develop the tourism industry:
o Economic- increase employment; attract tourists who spend money locally and
contribute to the multiplier effect; increasing income for commercial operators; improve
infrastructure and local area and conditions for local people.

o Political- enhancing the image of an area, which boosts the domestic morale and
encourage visitor numbers.

o Socio-cultural- promoting understanding between the cultures of tourists and those of

the local population; providing community facilities, as well as facilities for tourists

o Environmental- regeneration and conservation of environment; stimulating

environmental improvements of benefit to the local people