TOURISM VALUE CHAIN

Tourism – is concerned with the movement of and contract between people in different
geographical locations. It involves confrontation of different cultures, ethnic groups,
lifestyles, languages etc.
Tourism Value Chain - is simply defined as a SYSTEM which describes how private sector firms
in collaboration with government and civil society receive or access resources as inputs,
add value through various processes (planning, development, financing, marketing,
distribution, pricing, positioning, among others) and SELL the resulting products to
customers. (Hawkins, 2005).

Daly D. and Guinn, G. (2017)

https://www.wider.unu.edu/sites/default/files/wp2017-17.pdf

Note: Information flows are represented by the thick black arrows at the top; communication travels from the
consumers to the distribution intermediaries to the service providers. The solid and dashed lines with smaller arrows
indicate the flow of consumer money through the chain. Direct flow of expenditures represents payments for services
directly related to the consumers’ tourism experience. Indirect flow of expenses represents back-end transactions
where payment between companies is not based on consumers’ experiences.

Consumers - an individual who purchases goods and services for personal use.
Distribution Intermediaries- Independent groups or individuals that provide the channel for a
company’s product to reach the end user.
 Direct booking distribution channel - Consumers may choose to bypass
distribution intermediaries and book directly with service providers.
 Online package distribution channel – emergence of online portal

 Online portal- A website that mainly act as a gateway or door to other

websites. It provides access to specialized and focused information and
links. Moreover, it is both customized and individualized. ( Sochats &
Robins,2000)
 GDS (Global Distribution System) - is a computerized network that
facilitates transactions between travel service providers and travel
agents (both online travel agents like Expedia and human travel
agents).
TravelPD Blogs (2021)
http://travelpd.com/travelpdblogs/2018/06/11
/gds-integration-service-global-distribution-
system-integration-for-travel-businesses/

 Package booking distribution channel- includes a network of travel agents, global tour
operators, inbound tour operators, and DMCs.
 Travel Agent Retailers who largely sell packaged tours. As a primary point of contact with
consumers, they create trust that the experience will conform with expectations.
 Global Tour Operator- Manufacturers and wholesalers. Together with DMCs, they
purchase services from individual providers and assemble them into leisure tourism
products.
  Destination Management Company also known as DMC, is a company that provides
services, resources and expertise specializing in local knowledge for events, activities and
tours for other companies.
 Inbound Tour Operator- They handle all arrangements in the host country; and the types
of tours they curate are specifically for non-residents touring the country.
 Service providers- business offering services to consumers while travelling.

International Transport- VS Domestic Transport-

travel outside the country travel within the
of origin country of origin

 Lodging - a place in which someone lives or stays temporarily.

 Hospitality - relating to or denoting the business of housing or entertaining visitors.
 Excursions- a short journey or trip, especially one engaged in as a leisure activity

Tourism Multiplier
Effect
How money moves in and out
of all sectors of tourism and
flows into adjacent sectors – a
remarkable illustration of how
tourism intersects with almost
every other consumer sector.

Source: World Travel and

Tourism Council, 2018

The multiplier effect is how many times money spent by a tourist is circulated in a
country’s economy
 Courtesy of the WTTC.

Direct Impact: The tourist’s initial spending which creates direct revenue
Indirect Impact: The initial process of re-spending i.e., employees’ salary
Induced Impact: The secondary process of re-spending, i.e., employees’ purchases

Money spent in a hotel helps to create jobs directly in the hotel, but it also creates jobs indirectly
elsewhere in the economy. The hotel, for example, has to buy food from local farmers, who may
spend some of this money on fertilizer or clothes. The demand for local products increases as
tourists often buy souvenirs, which increases secondary employment.

The multiplier effect continues until the money eventually 'leaks' from the economy through
imports - the purchase of goods from other countries.

Tourism sector contribute to three high-

priority goals of developing countries:
the generation of income, employment,
and foreign-exchange earnings. It plays
an important role as a driving force of
economic development

Yong’s Cyberclassroom
https://yourcyberclassroom.weebly.com
/micro-perspective-of-tourism-and-
hospitality.html
 Engaging Activities:
1. Explain tourism business value chain.
2. Give examples of the direct, indirect and induced tourism and travel contribution.
Direct tourism and travel Indirect tourism and travel Induced tourism and travel
contribution contribution contribution

Performance Tasks
Directions: Discuss the economic contribution of tourism illustrated below. Give example.

Rubrics for Checking

Needs Improvement (1 point) Good Very Good Excellent
(2 points) (3 points) (5 points)
FORMAT OF
INTRODUCTIO Lacks an introduction or Has an introduction or a Has a strong Has a strong
N/ conclusion with an opinion. conclusion with an opinion. introduction and/or introduction and
CONCLUSION Ideas do not flow throughout Uses at least three conclusion with an conclusion with an
paragraphs paragraphs. Most ideas opinion. opinion. Groups ideas
flow throughout to the topic
paragraphs.
REASONS Does not state any reasons Somewhat states a Clearly states Clearly states reasons
that is easy to identify. Does reason(s) that is easy to reasons that is easy that is easy to identify
not follow their opinion identify. Follows most of to identify. Follows and it is well written.
throughout the essay. their opinion throughout their opinion Follows their opinion
most of the essay. throughout the throughout the essay
essay.
EVIDENCE/ Uses no or very little general Uses general evidence from Uses specific Uses specific evidence
EXAMPLES evidence from the text(s) to the text(s) to support evidence to support to support opinion
support opinion opinion opinion

MECHANICS/G Many errors occur in spelling, Many errors occur in Some errors occur Little or no errors occur
RAMMAR punctuation and grammar, spelling, punctuation and in spelling, in spelling, punctuation
that greatly interfere with grammar, that somewhat punctuation and and grammar, but they
meaning. Uses little to no interfere with meaning. grammar, but they do not interfere with
precise language and linking Uses few precise languages do not interfere with meaning.
words to connect ideas. and linking words to meaning. Uses Uses precise language
connect ideas. some precise and linking words to
language and connect ideas.
linking words to
connect ideas.
 THE PSYCHOLOGICAL AND
SOCIAL NATURE OF TRAVEL

A. Motivation for Travel

 The following are motivations listed in travel literature:

1. Escape 8. Interpersonal relation 15.Cultural

2. Relaxation 9. roots or ethnic 16.Education
3. Relief of Tension 10. maintaining social contacts 7.Professional/business
4. Sun lust 11.Convince oneself of one’s 18.Wanderlust
achievements
5. Physical 12.Show one’s importance to 19.Interest in forest areas
others
6. Health 13.Status and prestige 20.Interest in scenery
7. family togetherness 14.Self discovery

4 Basic Travel Motivators:

1. Physical Motivators include those related to physical rest, sports participation, beach
recreation, relaxing entertainment, and other motivations connected with health.
2. Cultural Motivators include the desire to know about culture other countries.
3. Interpersonal Motivators Pertain to the desire to meet other people, visit friends or relatives,
escape from routine, from family and neighbors.
4. Status and Prestige Motivators Ego needs and personal development. Included in this group
are trips related to business, and conventions, study, and pursuit of hobbies education. Travel will
enhance one’s recognition and group reputation.

B.TRAVEL AS MEANS TO SATISFY A NEED AND WANT

 Key in understanding Tourist Motivation is to view vacation travel as a vehicle to satisfy
ones need and wants.
C. RELATIONSHIP OF NEEDS, WANTS, AND MOTIVES

Awareness is what needs and wants differ. It is

the duty of people involved in marketing to
convert needs into wants by making the
individual aware of his need deficiencies. The
awareness must be accompanied by
motivation. It is the role of marketing to
suggest objectives for example cruises,
vacations or even flights to satisfy needs.
Source: Mill, R.C. and Alaistair ,M. The tourism System
Dubuque,IA;Kendall/Hunt,1998

Why do people travel?

 Push Factor- factors which encourage individuals to move away from their home setting
through tourism.
 Pull Factor- those attributes of a different place which attract or pull them towards it.
 WHY GO?
 Needs and wants
 Self-fulfillment
 To learn and ed experience

WHY There?
 Attraction in destination
 Needs and wants fulfillment
 Gains; real and perceived. MacCallum,T. (2018) Push and Pull, finding the right balance
https://tommccallum.medium.com/push-and-pull-finding-the-
right-balance-658d5c86bc5a

Maslow’s Needs and Motivations Listed in Travel Literature

Need Motive Desire/Action
Physiological Relaxation Escape; relaxation, relief of tension, sun lust, physical, mental relaxation
Safety Security Health, Recreation; keep oneself active and healthy
Social Love and Family togetherness; enhancement of kinship relationship, companionship,
Affection facilitation of social interaction, interpersonal relations etc.
Self Esteem Achievement Convince oneself one’s achievement, show one’s importance to others, prestige,
status social recognition, ego enhancement, professional and business fulfillment
Self- personal fulfillment
actualization
Source: Mill,R.C. and Alastair Morrison,The

Types of travelers based on personality:

Tourism System Dubuque,IA;Kendal/Hunt,1998

1. Psychocentric- non adventurous and inhibited.

2. Allocentric – adventurous, curious and have a strong desire for new experiences
Types of travelers based on travel purpose:
1. Business Travelers- the cost of the trip is shouldered by a company; travel is not influenced
by personal income.
Ex: Business travelers attending meetings, conventions, congresses, incentive travelers
2. Pleasure/Personal Travelers -this group consist of people travelling for vacation or
pleasure.
Ex: resort travelers, family pleasure travelers, elderly, singles and couples

Travel Constraints:
 Lack of money- the major travel constraint. Less money means less travel.
 Lack of time- the desire to travel and the financial ability to travel are insufficient if one
does not have the time to travel.
 Lack of safety and security in public places, hotels, travel centers cause people to prefer
to remain in security of their neighborhood and home.
 Physical disability- in the form of bad health or physical handicap may keep people at
home.
 Family commitments- parents with young children find it inconvenient and expensive to
go on holiday.
 Lack of interest in travel- mainly due to preference to stay at home
 Fears of travel-for example fear of flying, fear of the unknown keeps,or unfamiliar
decisions.

The Social Nature of Travel

Tourism evolves a mutual trust and respect for one another and the dignity of life on earth.
According to Pope John Paul II,” the world is becoming a global village in which people from
different continents are made to feel like next door neighbors. In facilitating more authentic social
relationships between individuals, tourism can help overcome many real prejudices and foster
new bonds of fraternity.”
 In sociological terms, tourism involves:
1. Social relations between people who would not normally meet;
2. The confrontations of different cultures, ethnic groups, lifestyles, languages, levels of
prosperity etc.;
3. The behavior of people released from many of the social and economic constraints of
everyday life;
4. The host populations’s behavior which has to reconcile economic gain and benefits with the
costs of living with strangers.
Socio economic variables and their effect on travel
A. Age - younger individual tend to select more active recreational activities
than older people.
-elderly prefer more passive forms of recreation (visiting friends,
fishing,sightseeing,and playing golf)
- Older tourist tend to travel farther destination, they prefer ship travel,
travel more on spring than younger tourist, and spend less than middle
aged-travelers but more than young tourist.
B. Income - rich person as well as with higher social status travel more than those
and Social with lower income and social class.
Status
C. Education -better educated members of the population have a greater desire to
travel.
D. Life Stages -the presence of children in the family limits travel. As the children grow
of The up and leave home, the married couples renew interest in travel.
Family

The four types of tourist roles:

 The first two types are called institutionalized tourist roles because they are dealt within a
routine way by the tourist establishment, such as travel agencies and hotel chains which cater
to the tourist trade.
1. The organized mass tourist- least adventurous. He buys a package tour in which the
itinerary of his trip is fixed in advanced and his stops are well prepared and guided.
- prefers familiar environment rather than new environment.
2.Individual mass tourist- Similar to organized mass tourist, except that the individual
mass tourist has a certain degree of control of his time and itinerary and not bound to
group.
- Familiarity is still dominant but less than organized mass tourist. The desire of novelty is
greater.
 The next two roles are called non-institutionalized tourist roles because they are loosely
attached to the tourist establishment.
3. The Explorer - arrange his trip by himself and looks for comfortable accommodations
and reliable means of transportation.
- Though novelty dominates the explorer does not adopt completely the lifestyle of host
country.
4. The Drifter- He arranges his own trip and does not seek the help of travel agency.
-Novelty is at its highest, familiarity disappears almost completely.

Social Tourism – is a subsidized system of travel through the intervention of the government,
employer or labor union to achieve social goals.
Social tourism, by definition, is a form of tourism that brings travelers to local
communities with the goal of not only gaining pleasure from the experience but also contributing
to the places they’re visiting.

The International Bureau of Social Tourism (BITS) was organized in 1963 to encourage the
development of social tourism on an international scale by building and financing tourist facilities
and preserving local culture and environment.
Engaging Activities:
I. identify the following:
_________________1. A type of traveler who is adventurous, curious and have a strong desire for new
experiences.
_________________2. This is tourist role that dealt within a routine way by the tourist establishment,
such as travel agencies and hotel chains which cater to the tourist trade.
_________________3. They prefer familiar environment rather than new environment.
_________________4. this group consist of people travelling for vacation or pleasure.
_________________5. Type of traveler that is non adventurous and inhibited .

Performance Tasks
Directions: Answer the given questions below.

1. Discuss your travel interest and explain why is it differ from others like parents and
grandparents.
2. Explain Maslow Hierarchy of needs in relation to travel.

Rubrics for Checking

Needs Improvement (1 Good Very Good Excellent
point) (2 points) (3 points) (5 points)
FORMAT OF
INTRODUCTION/ Lacks an introduction or Has an Has a strong Has a strong
CONCLUSION conclusion with an introduction or introduction introduction and
opinion. Ideas do not a conclusion and/or conclusion with
flow throughout with an opinion. conclusion with an opinion.
paragraphs Uses at least an opinion. Groups ideas to
three the topic
paragraphs.
Most ideas flow
throughout
paragraphs.
REASONS Does not state any Somewhat Clearly states Clearly states
reasons that is easy to states a reasons that is reasons that is
identify. Does not follow reason(s) that is easy to identify. easy to identify
their opinion throughout easy to identify. Follows their and it is well
the essay. Follows most of opinion written. Follows
their opinion throughout the their opinion
throughout essay. throughout the
most of the essay
essay.
EVIDENCE/EXAMPLES Uses no or very little Uses general Uses specific Uses specific
general evidence from evidence from evidence to evidence to
the text(s) to support the text(s) to support opinion support opinion
opinion support opinion
MECHANICS/GRAMMAR Many errors occur in Many errors Some errors Little or no errors
spelling, punctuation occur in occur in spelling, occur in spelling,
and grammar, that spelling, punctuation and punctuation and
greatly interfere with punctuation and grammar, but grammar, but
meaning. Uses little to grammar, that they do not they do not
no precise language and somewhat interfere with interfere with
linking words to connect interfere with meaning. Uses meaning.
ideas. meaning. Uses some precise Uses precise
few precise language and language and
languages and linking words to linking words to
linking words to connect ideas. connect ideas.
connect ideas.
 TRANSPORTATION SECTOR

Transport or Transportation- is the movement of people and goods from one place to the other.
The term is derived from the Latin words:
/trans/ - ACROSS
/portare/ - TO CARRY

Transportation is further subdivided into:

- Air
- Road
- Rail
- Water

Historical Background of Transportation

- period before widespread industrialization in Europe and

North America
Pre- Industrial Travel
-few common carriers
System Era
-no regularly scheduled transportation services
-the era of stagecoach and wayside inn
- road improvements of railways, canals and steamship
services due to rapid industrialization and advances in
Early-industrial travel
transportation technology.
system Era
-common carriers came into existence
-began to offer regularly scheduled transportation services
-characterized by railways which expanded their operations
by running hotels and providing other travel related services.
Mature-Railway System
-travel agencies and tour operators formed.
Era
-Thomas Cook an innovator, known for founding travel agency.
Began his company’s activity in United Kingdom in 1840.
-express serviced increased.
-trains and other forms of transportation stops on major
Express-travel Era terminal only which increased the speed of travel and
encouraged more travel than before.

A. Air Transportation

The first generally recognized human flight took place in:

Paris in 1783, a hot air balloon traveled 5 miles invented by the Montgolfier brothers, Joseph-
Michel (1740 - 1810) and Jacques-Etienne (1745 - '99)

-Two Americans named Wilbur and Orville Wright who are generally credited with inventing and
building the world’s first successful airplane making it the first controlled, powered and sustained
heavier-than-air human flight on December 17, 1903 near Kitty Hawk, North Carolina.

D.E.L.A.G (Deutsche Luftschiffahrts-Aktiengesellschaft)

or the German Airship Transport Corporation was the world’s first airline. It was founded on
November 16, 1909 with government assistance.
The first countries in Europe to embrace Air Transport were:
Finland, France, UK, Germany, The Netherlands

Some of the first countries in Asia to embrace Air Transport were:

India, Hong Kong, Indonesia, Malaysia, Philippines

The Philippine Airlines (PAL) was founded on February 28, 1941, making it Asia’s oldest carrier
still operating under its current name. The airline was founded by a group of businessmen led by
Andres Soriano Sr., hailed as one of the Philippines’ leading industrialists at the time. The
airlines’ first flight was made on March 15, 1941

Classifications Of Airlines

 Major/Full – Service Carriers- Servicing both domestic and international (including long haul)
flights. Usually offers several classes of service

 Regional – Carriers- Also known as feeder airlines because their flights feed passengers from
small cities into big city-airports and help fill the large planes of the major airlines.

 Low-Cost Carriers (Lccs)- Emerged after the liberalization of Civil Aviation in North America
and Europe in 1970’s. Cheap, point-to-point services without any “frills”
They offer basic services. Passengers have the option to pay for extras such as food
on board, inflight entertainment and checked (in) baggage

8 Freedoms of the air

 First Freedom. The freedom to overfly a foreign country (A) from a home country en-
route to another
 Second Freedom. The freedom to stop in a foreign country for a technical/refueling
purpose only. A flight from a home country can land in another country for purposes other
than carrying passengers, such as refueling, maintenance, or emergencies.
 Third Freedom. The freedom to carry traffic from a home country to another country for
the purpose of commercial services.
 Fourth Freedom. The freedom to pick up traffic from another country to a home country
for the purpose of commercial services.
 Fifth Freedom. The freedom to carry traffic between two foreign countries on a flight that
either originated in or is destined for the carrier’s home country.
 Sixth Freedom. The “unofficial” freedom to carry traffic between two foreign countries via
the carrier’s home country by combining third and fourth freedoms.
 Seventh Freedom. The freedom to base aircraft in a foreign country for use on
international services, establishing a de facto foreign hub. Covers the right to operate
passenger services between two countries outside the home country.
 Eighth Freedom. The freedom to carry traffic between two domestic points in a foreign
country on a flight that either originated in or is destined for the carrier’s home country.
Also referred to as “cabotage” privileges. It involves the right to move passengers on a
route from a home country to a destination country that uses more than one stop along
which passengers may be loaded and unloaded.
 Ninth Freedom. The freedom to carry traffic between two domestic points in a foreign
country. Also referred to as “full cabotage” or “open-skies” privileges. It involves the right
of a home country to move passengers within another country.
B. Railways- considered one of the earliest modes of transportation.
- Serves as one of the major transport services in many countries. – Includes: India,
Japan, China and South Korea. – Widespread in European countries
- To date, this mode of transportation still attracts travelers as they continue to offer:
– Comfort – Reasonable fares and; – Less travel time
 - The Eurail • The Eurail also known as the Eurorail • One of the most extensive
railway systems in the world. • Its major product, offers rail passes for train travel all across
Europe

C. Motorcoach is a type of bus used for conveying passengers on excursions and on longer
distance intercity bus service between cities—or even between countries.
- Unlike transit buses designed for shorter journeys, coaches often have a luggage hold that is
separate from the passenger cabin and are normally equipped with facilities required for
longer trips, including comfortable seats and sometimes a toilet.
-Bus or motorcoach is the most economical form of transportation in terms of fuel costs, it still
has the disadvantage of being time consuming compared to air transportation.
Advantages of Motorcoach Travel
1. No driving
2. Hassle-free planning
3. Expertise of a Tour Guide
4. Socialize
5. Safety
6. It’s great for the environment

D. The Automobile - Most of the travel in the world takes place in the automobile.
- The real inventor of the automobile was Car Benz, of Mannheim, Germany.
- Brought decline of the train’s popularity in most developed countries.
- Auto travel is the most inexpensive and convenient form of travel.
The growth of car ownership necessitated road improvements.
Two important aspects of automobile travel are:
- Car Rentals
- Recreational Vehicles
 Rental Cars - The car rental business is a world-wide industry.
- Four countries dominate the U.S. market with 85 percent market share.
- These are Hertz, Avis, Budget, and National.
- Hertz is the airport market leader.
- Air travel is critical to the car rental business as airport revenues account for much of overall
car rentals in the US.
- Hertz is the airport market leader with about 29 percent of the airport rental business.
 Sea Transportation - Watercraft carrying people or goods. Sea transport has been the
largest carrier of freight throughout recorded history.
- Can be over any distance by boat, ship, sailboat or barge, over oceans and lakes, through
canals or along rivers.
 Cruise Ship - Vacation trip by ship.
- Travelling by water for purely recreational purposes. This is a leisure vacation
experience with the ships staff doing all the work.
- Is both a floating hotel and resort.
- Provides entertainment
- Opportunities to socialize is one of its major attractions.

Engaging Activities:
Identify the Transportation Era that are being asked below.

- influence of privately owned

1.______________
automobile was enhanced in North
America and Europe from 1920s
onward.

- car ownership continued to grow

- Mass air travel was another Post-
2.________________ World War II occurrence

- period before widespread

industrialization in Europe and North
3. ________________ America
-few common carriers
-no regularly scheduled
transportation services
-the era of stagecoach and wayside
inn
- road improvements of railways,
4._________________
canals and steamship services due to
rapid industrialization and advances
in transportation technology.
-common carriers came into
existence
-began to offer regularly scheduled
transportation
-express serviced increased.
5._________________
-trains and other forms of
transportation stops on major
terminal only which increased the
speed of travel and encouraged more
travel than before.

Performance Tasks
Explain at least 3 freedom of the air.

THE ACCOMMODATION SECTOR

 ACCOMMODATION - is an absolutely broad sector of the hospitality industry, ranging from bed &
breakfast enterprises and hotels to other facilities that offer lodging services.
The lodging industry developed because of the need to provide accommodations to travelers.

People who travel and stay away from home for more
than a day need lodging mainly for sleeping:

Other purposes include:

For safety
Shelter for cold and rain
Having a place to store luggage
Being able to take a shower

British Law defines a “Hotel” or “Inn” Dreamstime (n.d.)https://www.dreamstime.com/set-hotels-facade-ideal-market- as a

“place where a bonafide traveler can business-web-publications-graphic-design-flat-style-vector-illustration-image146799911

receive food and shelter, provided s/he is in a

position to pay for it and is in a fit condition to be received.”
- The first Inns go back to 3000 BC which were established for the people on the move spurred
by the urge to travel.
-The industrial revolution and the development of spas helped the growth of hotel industry
because of the demand for accommodation of people who migrate to the cities to work.
- The development of railways led to the establishment.
- The introduction and development of the automobile industry led to the building of roadside
hotels or motels.
-in 1960s, resort hotels were developed due to the popularity of the sun vacation.

Types of Accommodation:
1. Hotel – can be a 10-room boarding house, or a building that has a thousand or more rooms with
several restaurants, bars and various types of entertainments.
2. Motel/Motor Hotel – offers room only and free parking to guests, often found along busy
highways that caters primarily transient and cost-conscious travelers.
3. Resort Hotels – These are usually located near beaches and offer amenities, shops and
recreation opportunities.
4.Pensions – These are usually family-owned accommodation facilities. Also called Gasthaus in
German speaking part of Europe. Usually offers continental breakfast but do not have
facilities for other meals.
5. Paradors – Are unique in Spain, generally old castles, convents or monasteries that have been
converted into hotels by the government and operated by Government.
6. Condominium Hotels – are a recent innovation. These are often hotels with apartelles
(condominium)instead of rooms.
7.Campgrounds – is a popular form of overnight accommodation in both Europe and North
America.
8. Bed and Breakfast – it was originated in Europe. It provides bed for the night and breakfast the
next day.
9. Tourist Inn- caters to transient. Do not formally meet the requirements of an economy hotel.
10. Apartment- Hotels (Apartels) – are building which contain several independent and furnished
or semi furnished apartments offers long term basis and offer basic services to its tenant
similar to hotels.
11. Health Spas - are hotels and resorts which cater to people who go to spas or mineral springs
for medical treatment or weight reduction.
12. Private Home - is the earliest form of overnight lodging for travelers.
13. Time Sharing – is the selling of vacation lodging, usually condominiums, for a specific
week/week over a given number of years.
14.Hostels - provides amenities such as bunk bed and commonly shared toilet and bathroom. The
traveler provides his/her own bedding.

Typical Accommodation Structure

Source: International Hotel Development and Management

Rating Systems- Hotels are rated based on the quality of the physical structure, furnishing,
maintenance, housekeeping and overall service.
The following are used to rate hotels, motels, inns, resorts and guest ranches:
1-star = Good, better than average
2-star = very good
3-star = Excellent
4-star = Outstanding
5 -star= one of the best in the country

Room Rates
Room rates for hotels are quoted in terms of what meals are included in the price.
 European Plan (EP) means that there are no meals included. North American Hotel
usually used this type of room rate.
 American Plan (AP) means that breakfast, lunch and dinner are included in the
quoted price, in Europe it is known as full pension.
 Modified American Plan (MAP) includes breakfast and dinner but not lunch or
breakfast and lunch but not dinner, in Europe it is known as demi pension.
 Bermuda Plan (BP) offered by hotels in Bermuda and some other places. It includes
both a room and a full English or American type of breakfast.
- The measure of hotel ‘s profitability is its room occupancy.
- The breakeven point of a hotel is the point where it will neither make a profit nor a loss.
Accommodation promotion
Accommodation establishment promote their properties to tour wholesalers and travel
agencies as well as to members of the travel trade.
- They use direct mail, newspaper, magazine, radios, television advertisements and
telephone directories for promotion.

Airline companies link with hotels to protect their existing business and develop future
business to boost tourism development in their home countries and to expand national
culture. Several frequent flyer programs of airlines are linked to hotels.

Engaging Activities:
Direction: Identify what is being asked.
________________1. Room rate plan that includes breakfast and dinner but not lunch or breakfast
and lunch but not dinner.

________________2. A rating that is awarded to hotels that have outstanding service.

________________3. A type of lodging that was originated in Europe. It provides bed for the night
and breakfast the next day.
________________4. It is where a bonafide traveler can receive food and shelter, provided s/he is in a
position to pay for it and is in a fit condition to be received.
_______________5. These are lodging that are unique in Spain, generally old castles, convents or
monasteries that have been converted into hotels by the government and operated by
Government

Performance Tasks
1. Identify a hotel that you are dreaming to work with in the future and search what
rating system does it belong. Describe the services given by the hotel.
2. Why does hotels need promotion?
3. Why airline companies link with hotels?

Learning Resources
AustralAsianManagementInstitute World Travel & Tourism Council Economic Impact
Report Highlights Value of Tourism
https://www.ausleisure.com.au/news/world-travel-tourism-council-economic-
impact-report-highlights-impact-of-to/
Barcelona Field Study Center (2020) Tourism Multiplier Effect
https://geographyfieldwork.com/TouristMultiplier.htm#:~:text=Tourism%20n
ot%20only%20creates%20jobs,circulates%20through%20a%20country's%20e
conomy.
Cruz, Zenaida 2013 Principles of Tourism 2
Cruz, Zenaida 2019 Micro Perspective of Tourism and Hospitality
Daly D. and Guinn, G. (2017) Tourism global value chains and Africa
Darboe,F. (2019) Which Type of Tour Operator are You?
https://pro.regiondo.com/types-of-
touroperators/#:~:text=Inbound%20tour%20operators%20bring%20tourists,
non%2Dresidents%20touring%20the%20country.
Landman, P. (2020) DMC – Destination Management Company
https://www.xotels.com/en/glossary/destination-management-company/
Lim, Romeo D. 2019 Micro Perspective on Tourism and Hospitality
Kalacas, Maria Rellie, 2017 Travel Industry Economics
Scott’s Cheap flights (2019) What is a Global Distribution System (GDS)?
https://scottscheapflights.com/glossary/global-distribution-system-
gds#:~:text=A%20Global%20Distribution%20System%2C%20or,Expedia%20an
d%20human%20travel%20agents).
Yong’s Cyber classroom https://yourcyberclassroom.weebly.com/micro-perspective-of-
tourism-and-hospitality.html