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.

The sectors of tourism industry:

1. Hotels;

2. Food services;

3. Travel services;

4. Transportation;

5. Infrastructure.

Overview

Travel Trade

Sector

AccommodationSectorEv

ents

Sec

tor

Transportation

Sector

Adventure & Outdoor

Recreation SectorFood Services

Sector

Attractions Sector

Ente

rtain

men

tSe

ctor

Tourism

Services

Operating Sectors of the Tourism Industry

Commercial

Accommodations

Non-Commercial

MotelsMotelsTime Share

FacilitiesTime Share

Facilities

Upscale

Mid Range

Suite Hotels

InstitutionalInstitutional

PrivateHomes

College/University

Spas and Health Care

Facilities

Non-ProfitNon-Profit

Hostels

Shelters

YM / YWCA

Bed &Breakfast

Bed &Breakfast

Hotels(Chains/Independent)

Hotels(Chains/Independent)

Meetings &Convention

Hotels

Budget

AirportHotels

Mid Range

Budget

HomeExchange

Deluxe

Luxury

Extended Stay

Economy

ResortHotels

Spa

Casino

Upscale

1. Hotels — Accommodations Structure

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.

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.

Top 10 hotel chains and brands by AHMA （ 2004 ） Hotel chains Brands

Inter-Continental Hotel Group （洲际）

Candlewood ， Centra ， Crowne Plaza ， Forum Hotel ， Holiday Inn ， Holiday Inn Express ， Holiday Inn Garden Court ， Holiday Inn Select ， Inter Continental ， Parkroyal ， Posthouse ， Staybridge Suites by Holiday Inn ， & Sunspree Resorts

Cendant Corporation （圣达特） Amerihost Inn ， Days Inn ， Days Serviced Apartments ， Howard Johnson ， Howard Johnson Express ， Knights Inn ， Ramada ， Ramada Limited ， Super 8 ， Thriftlodge ， & Wingate Inn

Marriott International, Inc. （马里奥特）

Courtyard by Marriott ， Fairfield Inn by Marriott ， Marriott Conference Centers ，Marriott Executive Apartments ， Marriott Hotels and Resorts ， Ramada Int'l Plaza ， Ramada International Hotels & Resorts ， Renaissance Hotels & Resorts ，& Residence Inn

Choice Hotels International, Inc. （精选国际）Clarion ， Comfort Inn ， Hotel & Suites ， Econo Lodge ， MainStay Suites ， Quality Inn ， Hotel & Suites ， Rodeway Inn ， & Sleep Inn

Hilton Hotels Corporation （希尔顿） Conrad ， Doubletree ， Doubletree Club ， Embassy Suites ， Embassy Vacation Resort ， Hampton Inn ， Hampton Inn & Suites ， Hilton ， Hilton Gaming ， Hilton Garden Inn ， & Homewood Suites

Best Western International （最佳西方） Best Western

Starwood Hotels & Resorts Worldwide, Inc. （史达屋）Four Points Hotel by Sheraton ， Sheraton ， St. Regis/Luxury Collection ， W Hotels ， & Westin

Accor International （雅高国际） Century ， Coralia ， Etap Hotel ， Hotel Formule 1 ， Hotel Novotel ， Hotel Sofitel ， Jardin ， Libertel ， Mercure Hotel ， Pannonia ， Parthenon ， & Suitehotel

Carlson Hospitality Worldwide （卡尔森） Country Inns & Suites by Carlson ， Park Inns & Suites ， Park Plaza Suites ， Radisson ， & Regent Hotels

Accor North America （雅高北美） Coralia ， Hotel Novotel ， Hotel Sofitel ， Mercure Hotel ， Motel 6 ， Red Roof Inn ， & Studio 6

Top 20 Hotel Chains (2000)Rank Corporate Chain Rooms Hotels

1 Cendant Corporation 541,313 6,4552 Bass Hotels & Resorts 490,531 3,0963 Marriott International 390,469 2,0994 Accor 389,437 3,4885 Choice Hotels International 350,351 4,3926 Hilton Hotel Corporation 317,823 1,8957 Best Western International 307,737 4,0658 Starwood Hotels & Resorts 227,042 7389 Carlson Hospitality Worldwide 129,234 71610 Hyatt Hotels/Hyatt International 86,711 20111 Sol Meliá82,656 33812 Hilton International 64,647 22313 Wyndham International 62,262 24214 Compass Group (Forte Hotels) 59,928 45315 Société du Louvre 53,083 86816 FelCor Lodging Trust 50,000 18617 TUI Group 49,801 20418 MeriStar Hotels & Resorts 48,767 22519 Extended Stay America 41,586 39220 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

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.

Food Services

Independent Chain In-Hotel

Fast FoodRestaurantsFast Food

RestaurantsTraditional

RestaurantsTraditional

Restaurants

Ethnic Local

CafeteriasCafeterias

Specialty

Independent

Broad Menu

Specialty Ethnic

Local

Minimal Service

Full Service

2. Food Services Structure

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.

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

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.

Suppliers Transportation providers, Accommodation Food Service Resorts

Recreation, Entertainment, Etc.

Specialty

Channeler

Tour

Wholesaler

Retail Travel

Agent

Specialty

Channeler

Retail Travel

Agent

Specialty

Channeler

Tour

Wholesaler

Tour

Wholesaler

Retail Travel

Agent

Specialty

wholesaler

Tour

wholesaler

Retail Travel

Agent

Direct

Channel

Via

Telephone

Suppliers

office

CustomersIndividuals Pleasure Groups, Business Groups, Etc

3 Travel services — Channels

The ways of travel distribution channel

Travel agentsTravel agents

Internet Internet

ConsolidatorsConsolidators

The tour wholesalerThe tour wholesaler

Specialty channelerSpecialty channeler

Automated distributionAutomated distribution

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.

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.

Ai r 56%Crui se 18%Hotel 11%Car rental 8%Misc 8%

Travel Agents

The future of travel agents

There is a question being raised today: Will there be a travel agent in the future?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.

.

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

Some other reason why this question has being raised:Some other reason why this question has being raised:

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?What’s the fact?

Travel Agents

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

Travel Agency Organization

Travel Agents

• 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.

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:

Travel Agents

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.

4. Transportation

Other

Transportation

Road Rail Water

MotorBike

MotorBike

AutoAutoBusBus VehiclesUsed for Accommodation

VehiclesUsed for Accommodation

InlandInland MaritimeMaritime

Air

Charter

Private

Scheduled

CharterandTour

Operator

Scheduled

Rental

PrivatelyOwned

TruckCamper

MotorHome

TravelTrailer

TentTrailer

Other

Commercial

Private

Commercial

Private PrivateSnowmobiles

Foot

Bicycles

HorseDrawn

Vehicles

AerialTramways

and Ski Lifts

Charter

Scheduled

Commercial

Charter

Scheduled

Passenger Transportation Structure

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 m

ode ,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.

(二 ) The pressures on transportation putted by world tourism growth

1. Congestion. • Serious congestion affects most passenger transportation

modes,particularly on roads and at airports during peak periods.

2. Safety and security. • This is a basic requirement of tourism.

3. Environment. • An increase in traffic may harm the environment if an area

does not have the carrying capacity for additional tourists.

4. Seasonality.• Seasonal patterns of tourism demand create overcrowding

at certain times.conversely,low occupation and load factors will occur at other periods.

Passenger transportation

Urgent Transportation Problems:

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.

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.

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.

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.

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.

The Airline Industry

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.

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.

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.

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.

The Railway Industry

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.

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.

Advantage

1) Cheap and convenient.

2) 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..

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

The Motorcoach industry

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.

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

Kinds of auto

(1) Recreation Vehicles

(2) Private Cars

(3) Rental Cars

(4) Taxi and Limousine Service

The Automobile

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.

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.

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.

The Cruise Industry

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.

The End !