Travel and Tourism What is the Travel Industry?

Travel and tourism encompass the activities of Travel refers to the act of moving from one
people traveling to and staying in places outside location to another. This can refer to long-
their usual environment for leisure, business, or distance, short-distance, overseas, domestic, and
other purposes. This sector is vital for its various other forms. Crucially, travel also
significant contribution to global economic includes both round trips and one-way journeys,
growth, job creation, and the promotion of and it covers a wide variety of different travel
cultural exchange and environmental awareness. purposes.

Key Takeaways The travel industry, therefore, refers to the

numerous aspects of the wider service industry
 Diverse Sectors: Encompasses various which cater to the needs and desires of those
segments like transportation, who have traveled from one part of the world to
accommodation, food & beverage, and another.
entertainment, crucial for a
comprehensive travel experience. The Difference Between the Travel and
 Economic Impact: The industry Tourism Industry
significantly contributes to global
economies, offering employment and Given the definitions above, it is understandable
boosting local businesses. that many people struggle to see much of a
 Evolution with Technology: Increasing distinction between the tourism industry and the
reliance on technology for enhancing travel industry. Indeed, there is clearly a
traveler experiences and operational significant overlap between the two, and many
efficiency in the travel and tourism of the businesses and services that cater to
sector. tourists also cater to travelers more generally.
 Sustainability Initiatives: Growing
focus on sustainable practices to Nevertheless, there are some notable differences.
minimize environmental impact. Essentially, the tourism industry is concerned
 Personalized Experiences: The trend with people traveling for business or pleasure
towards more customized and unique purposes, staying at their destination for at least
travel experiences. one night, and returning. By contrast, the travel
industry has a wider scope, covering more travel
What is the Tourism Industry? purposes and durations.

Tourism is generally regarded as traveling to a Philippine Tourism Industry

different location for business or pleasure
purposes. However, it has quite a specific
A composite industries entities of both private
definition: traveling to another environment for
and public sector which involved planning ,
at least 24 hours, but for no longer than one
development, marketing, sales, operations and
year, for purposes related to business or leisure.
evaluation of destinations, product and services
that caters to the needs of the travelers both
A tourist is generally only classed as such if they foreign and dometic.
stay in overnight accommodation situated in the
location they travel to. By its very nature,
GOVERNMENT SECTOR ROLE
tourism involves a round trip rather than travel
in one direction only. With this in mind, the
tourism industry refers to all aspects of the  Responsible for the formulation of
service industry that cater to tourists. tourism policies.
  Provides guideline for the development from point A to point B, and cruise ships, where
of the destination transportation is not the only purpose, and the
 Regulates the industry in collaboration voyage itself is a huge part of the travel
with other government entities. experience.

Government Agencies Coach Services

In many cases, coach services are one of the
Responsible in encouraging, promoting and most cost-effective ways for tourists or travelers
developing tourism as major socio-economic to reach their chosen destinations, and they are
activity to generate foreign currency and especially popular for day trips. However, coach
employment and to spread the benefits of travel does cater for international travel too.
tourism in both private and public sector Moreover, local bus services also fall under this
umbrella.
Transportation
Railway
The transportation sector is one of the most Railways are another popular transportation
obvious sectors that falls under both the travel method, helping passengers to get from one
and tourism umbrellas and is concerned with the location to another easily. Rail services are
movement of people from one location to especially popular with domestic travelers, due
another. This includes various types of travel, to their convenience and regularity. Moreover,
including air, road, rail, and water-based many major cities use subway-style rail services,
methods. This sector enables tourism in the first facilitating quick and easy movement.
place, but also provides tourists with a means of
getting around after they arrive at their Spacecraft
destination. A more recent form of transportation, which will
become increasingly influential in the years
Airline Industry ahead, is the spacecraft. The most famous
Air travel is one of the main ways that tourists example of a company operating within this area
and travelers reach their chosen destinations, and is Virgin Galactic, hoping to provide
the airline industry provides various services, commercial space tourism via passenger trips
including scheduled and chartered flights. into space in the near future.
Companies within this sub-category may offer
flights to domestic and international destinations
and long-haul and short-haul flights.
What is Travel Trade?
Car Rental
Travel trade is the buying and selling of
Car rental services provide customers with
travel products that are either sold directly
temporary access to a car. These services can
to consumers or to other tour operators and
enable tourists or travelers actually to get to their
buyers. It is a distribution network for travel.
chosen destination in the first place. Still, many
Products include accommodations,
customers use them after arriving, as they
attractions, transportation, food and
provide more freedom for exploration than
beverage, etc. Suppliers pay commission
relying on public transport.
levels between 20 and 30 per cent to the
buyer on a per-booking basis.
Water Transport
As the name suggests, the water transport sub-
category includes all forms of transport that
carry passengers across the water. This includes
ocean liners and ferries, which tend to voyage What is a Buyer?
A buyer is a tour operator seeking to add a an accommodation, organized activity,
supplier's tourism product or service to an transportation or attraction to a tour
existing package and product offering. operator.

What is a Tour Operator?

A tour operator is a business that employs
people to design, develop, manage, market Travel Trade Familiarization (FAM) Tours
and execute packaged travel and tours to a
variety of destinations. Tour operators sell FAM tours are a great way to sell a
travel products through travel agencies or destination and provide immense
directly to consumers. They typically receive opportunity to get your export ready product
20 per cent of the advertised or retail price noticed.
of the travel product.

What is Market- and Export-Ready?

What is a Receptive Tour Operator Explore Tourism Saskatchewan’s Industry
Categorization Criteria to determine where
(RTO)? your business currently sits and what you
A receptive tour operator is a wholesaler can do to move up to the next level.
that specializes in particular destinations,
providing services at the destination to
group travel organizers and tour operators.
An RTO receives 30 per cent of the
advertised or retail price of the travel
product. Tourism Saskatchewan Export Toolkit
The Tourism Saskatchewan Export Toolkit
consists of seven short courses designed to
introduce business owners to the essential
What is a Supplier? knowledge they need to build their presence
in the international market.
A supplier is a company or individual that
provides the actual travel product, such as

Travel Trade Terminology

Affinity Group – A formal or informal encourage them not to do business with

organization made up of people with similar them.
interests.
Blackout Periods – A period of time that a
Black List – A slang term used to describe stakeholder identifies as unavailable to the
what happens when a business does not meet travel trade. This typically occurs during
the requirements or the contractual high demand periods when the supplier is or
obligations of a wholesaler. Wholesalers will be sold out. In an effort to maintain
who “black list” a supplier advise other good relationship with travel trade,
wholesalers of their negative experience and blackouts should be avoided. Travel trade
will expect access, even on a limited basis, Escorted Group Tour – A prearranged group
during high demand dates. tour developed and managed by a tour
operator, receptive tour operator or travel
Block Bookings/Block Space/ Allotment – agent. A tour guide accompanies the group
Product inventory that is set aside and put on the tour and handles all logistical matters.
under the control of a tour operator so as to
allow them to confirm reservations without Experiential Travel – Experiential travellers
recourse to the supplier. Generally this want to learn, participate and create.
arrangement is established as part of the Examples: building dream catchers, working
negotiations between the supplier and the on a ranch, learning to make bannock,
tour operator. sleeping in unique accommodations, hiking
the Boreal Trail.
Buyer – A tour operator seeking to add a
supplier’s tourism product or service to its Export Ready – A term used to describe a
own product mix. Also responsible for tourism business that meets necessary
contract negotiations. criteria to sell to the international market.

Collateral – The materials produced to Familiarization Tour (FAM Tour) – A

market a business - brochures, websites, complimentary or reduced-rate travel
flyers, newsletters, etc. program designed to “familiarize” qualified
tour operators, travel agents or media with a
Commission – In the case of any travel destination or product. The purpose is to
component, i.e. attraction, accommodation, encourage travel influencers and media to
transportation services, etc., a commission promote the product to customers,
represents an amount payable to the seller of encourage active marketing support, or
the travel goods. Travel agents usually produce favourable media stories about the
receive an amount averaging no less than 10 destination.
per cent of the advertised or retail price of
the service or goods. Wholesalers or tour FIT – Fully Independent Travel – Packages
operators generally receive 20-30 per cent of designed for independent travellers that do
the advertised or retail price of the travel not usually involve group activities at any
service or goods. stage of the trip. A typical example is the
fly/drive package, offering a saving in air,
Domestic Traveller – A traveller originating car rental and perhaps some additional
from Canada. services on a package basis.

DMO – Destination Marketing Organization Fly/Drive Tour – A FIT package that

– An organization dedicated to developing includes air travel and a car rental and
and marketing tourism, typically defined by includes other elements such as
a geographic or political area such as a town, accommodation.
city or region.
Fully Commissionable – The commission
applies to the total value of the transaction,
pre-tax - not just selected portions.
Ground Operator – A company or individual Wholesalers will expect export-ready
who provides services to a tour operator at stakeholders to be adequately insured.
the destination. Services include sightseeing
tours, local transfers, guides and other local Long Haul - Long haul refers to travellers
services. coming from far away. Usually, if the
traveller’s destination is further away than a
Inbound Operator – A tourism operator who three-hour flight, they are considered to be
usually serves travellers arriving from long haul. Manifest
another country.
(Booking Manifest) – document sent to the
Incentives – “Perks” offered to encourage supplier with a list of bookings.
more sales (especially during low season).
An example includes providing a free gift Marketplace – A tourism industry event in
upon arrival. which suppliers and buyers meet via
scheduled appointments.
Incidentals – Charges that are not included
in the tour package. Incidentals may include Market Ready – A term used to describe a
phone calls, tips, gratuities and tourism business that actively markets to
miscellaneous room charges. potential visitors; communicates with
potential visitors year round, and is ready to
Incremental Business – New business that accept advanced reservations.
generates new revenue.
Meet and Greet – The service of a
Inventory – A list of product available for representative to greet travellers at a specific
sale. point in the itinerary and welcome them.
Meet and greets often include a small gift,
Itinerary – A detailed travel plan provided to information packages or refreshments.
a client by a travel agent or tour operator.
Group – Group booking, tour or package, MC&IT – Meetings, Conventions and
generally involving ten or more people. Hub Incentive Travel.
and Spoke – Hub and spoke is a travel
pattern in which the traveller stays in one Motorcoach Tour – A group tour in which
place for a number of days and takes in the primary mode of transportation is by
different day trips from the central point. By motorcoach.
contrast, a “touring” traveller changes
location every day or so. Net rate – The rate provided to wholesalers
and tour operators that can be marked up to
Leisure Travel – Vacation travel, sell to the customer.
sightseeing, visiting friends or relatives at
one’s own expense and during one’s free Online Tour Operator (OTA) – A tour
time. Also called pleasure travel, as operator who sells exclusively online.
distinguished from business travel.
Outbound Operator – A wholesaler who
Liability Insurance – Insurance that protects organizes groups to travel outside the
a company from legal claims arising out of country of origin.
accidents or losses incurred by customers.
Outbound Travel – Travellers leaving their Self-Drive Itinerary – An itinerary of travel
own countries to visit other nations. arrangements for an independent traveller on
an independent package tour.
Package – A combination of travel
components packaged together and sold at Short Haul - Short haul refers to travellers
an all-inclusive price in a single transaction. coming from a nearby market. Site
Each component of the package is Inspection - An assessment tour of a
discounted, resulting in an attractive price destination or facility carried out in advance
that consumers could not get if they were to to determine whether a given site or event
purchase the components individually. meets the inspector’s needs and
Example: A tour that combines prepaid requirements. Site inspections may be done
transportation, accommodations or other by a meeting planner, convention or trade
tour elements, such as meals, sightseeing show manager, site selection committee,
admissions or car rental. tour operator, wholesaler, travel agent or
incentive travel representative.
Payment Terms – invoicing/pre-payment.
Special Interest Group – A group built
PMO – Provincial Marketing Organization. around a common interest in a specific
subject or activity. Example: birding clubs.
Published Rate – An advertised rate of a
tourism product or service. This is the rate Stakeholder/Supplier – A company or
that wholesalers use to determine what their individual providing the actual travel
net or wholesale rate should be. product, such as accommodations, activities
or attractions, to the tour operator.
Rack Rate – See Published Rate.
Step On Guide – A knowledgeable
Receptive Tour Operator (RTO) – A individual from the target community who is
wholesaler who specializes in particular contracted by a tour operator to “step on”
destinations, providing services at the the bus to escort and educate a touring
destination to group travel organizers and group.
tour operators.
Tariff – The catalogue of itineraries,
An RTO receives 30 per cent of the products and programs (complete with
advertised or published rate of the travel pricing) developed by RTO’s/wholesalers
service or good. for distribution to tour operators and travel
agents.
Release Date – A specific date that a
wholesaler is expected to confirm a Tour Itinerary – The day-by-day, event-by-
reservation (or block of reservations) with event travel plan for a tour.
the names of the end user. The dates will be
noted in the wholesaler contract and are Tour Operator – A tour operator designs,
typically set for 14-30 days prior to arrival. develops, markets and operates packaged
The unused block will be released for public travel and tourism products and tours. Tour
sale. operators sell through travel agents or
directly to consumers.
Tour Operator Rates – A discounted net rate Value Added – A term used to describe
that is negotiated between suppliers and those things that can be included in a
wholesalers/tour operators. This rate is package or itinerary that do not significantly
expected to be 20-30 per cent off the retail add to the cost of the program. Example:
or published rate. Small gift upon arrival, local festival or
event and no-charge attractions.
Tourism Supplier – See
Stakeholder/Supplier. Visiting Friends & Relatives (VFR) – These
are FIT travellers who stay with friends and
Trade Show – An industry event that relatives for a portion of their visit.
involves exhibits of destinations and tourism
company products. Volume Based Discount – A discount
formula that is based on volume of business
Transferable/Floating Deposit – An advance that a wholesaler generates for a supplier.
deposit that may be rolled over to other When an established volume threshold is
dates or other block bookings. achieved, a deeper discount or “incentive” is
provided to the wholesaler.
Travel Agent – A person who arranges
travel for individuals or groups. Travel Voucher – A document having monetary
agents may be generalists or specialists value, issued by a tour operator or travel
(cruise, adventure travel, conventions and agent, to be exchanged at face value for
meetings). The agents receive a minimum 10 specified products or services. A voucher
per cent commission from accommodations, authorizes the provision of a particular
transportation companies and attractions for product or service at a negotiated price.
coordinating the booking of travel. They Stakeholders agree to accept vouchers and
typically coordinate travel for their invoice according to the wholesale contract.
customers at the same or lower cost than if A voucher is issued following a pre-payment
the customer booked the travel on his/her by the customer to the travel company. It is
own. commonly used with independent packages
and tours and wholesalers should provide
Travel Influencer – A person who has the sample vouchers with the duly signed
ability to influence a group or individual’s contract
travel decisions. Influencers can be travel
agents, tour operators, DMO’s, travel writers . Wholesale Net Rates – The discounted rate
and media. negotiated with the travel trade for booking
in volume.
Travel Trade – A term describing the full
range of organizations operating as Wholesaler – A company that operates as an
intermediaries in the travel and tourism intermediary between the travel product
industry. These typically include tour supplier and the retail travel agent or
operators, wholesalers, receptive operators, international tour operator. They develop
group leaders and travel agents. and market inclusive tours and individual
travel programs to the consumer through
travel agents. Wholesalers do not sell
directly to the public.