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TOURISM INDUSTRY
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Tourism and hospitality
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TOURISM AND HOSPITALITY INDUSTRY
1. INDUSTRY ENVIRONMENT
Tourism is travel for recreational, leisure or business purposes. The World
Tourism Organization defines tourists as people who "travel to and stay in places
outside their usual environment for more than twenty-four (24) hours and not more
than one consecutive year for leisure, business and other purposes not related to the
exercise of an activity remunerated from within the place visited."

Tourism has become a popular global leisure activity. In 2008, there were over 922
million international tourist arrivals, with a growth of 1.9% as compared to 2007.
International tourism receipts grew to US$944 billion (euro 642 billion) in 2008,
corresponding to an increase in real terms of 1.8%.As a result of the late-2000s
recession, international travel demand suffered a strong slowdown beginning in
June 2008, with growth in international tourism arrivals worldwide falling to 2%
during the boreal summer months. This negative trend intensified during 2009,
exacerbated in some countries due to the outbreak of the H1N1 influenza virus,
resulting in a worldwide decline of 4% in 2009 to 880 million international tourists
arrivals, and an estimated 6% decline in international tourism receipts.

Tourism is vital for many countries, such as Egypt, Greece, Lebanon, Spain,
Malaysia and Thailand, and many island nations, such as The Bahamas, Fiji,
Maldives, Philippines and the Seychelles, due to the large intake of money for
businesses with their goods and services and the opportunity for employment in the
service industries associated with tourism. These service industries include
transportation services, such as airlines, cruise ships and taxicabs, hospitality
services, such as accommodations, including hotels and resorts, and entertainment
venues, such as amusement parks, casinos, shopping malls, music venues and
theatres.

In 1994, the United Nations classified three forms of tourism in its

Recommendations on Tourism Statistics:

 Domestic tourism, involving residents of the given country traveling only

within this country.
 Inbound tourism, involving non-residents traveling in the given country.
 Outbound tourism, involving residents traveling in another country.
There has been an up-market trend in the tourism over the last few decades,
especially in Europe, where international travel for short breaks is common.
Tourists have high levels of disposable income, considerable leisure time, are well
educated, and have sophisticated tastes. There is now a demand for a better quality
products, which has resulted in a fragmenting of the mass market for beach
vacations; people want more specialised versions, quieter resorts, family-oriented
holidays or niche market-targeted destination hotels.

 Tourists enjoying cocktails during a beach vacation in The Bahamas

 The developments in technology and transport infrastructure, such as jumbo
jets, low-cost airlines and more accessible airports have made many types of
tourism more affordable. WHO estimates that up to 500,000 people are on
planes at any time?
 There have also been changes in lifestyle, such as retiree-age people who
sustain year round tourism. This is facilitated by internet sales of tourism
products. Some sites have now started to offer dynamic packaging, in which
an inclusive price is quoted for a tailor-made package requested by the
customer upon impulse.
 There have been a few setbacks in tourism, such as the September 11 attacks
and terrorist threats to tourist destinations, such as in Bali and several
European cities. Also, on December 26, 2004, a tsunami, caused by the 2004
Indian Ocean earthquake, hit the Asian countries on the Indian Ocean,
including the Maldives. Thousands of lives were lost and many tourists died.
This, together with the vast clean-up operation in place, has stopped or
severely hampered tourism to the area.

Most visited countries by international tourist arrivals

In 2008, there were over 922 million international tourist arrivals, with a growth of
1.9% as compared to 2007. In 2009, international tourists’ arrivals fell to 880
million, representing a worldwide decline of 4% as compared to 2008. The region
most affected was Europe with a 6% decline.

The World Tourism Organization reports the following ten countries as the most
visited from 2006 to 2009 by the number of international travelers. When
compared to 2006, Ukraine entered the top ten list, surpassing Russia, Austria and
Mexico, and in 2008, surpassed Germany. In 2008, the United States displaced
Spain from the second place. Most of the top visited countries continue to be on
the European continent, followed by a growing number of Asian countries.
In 2009, Malaysia made it into the top 10 most visited countries' list. Malaysia
secured the ninth position, just below Turkey and Germany. In 2008, Malaysia was
in 11th position. Both Turkey and Germany climbed one rank in arrivals,
occupying seventh and eighth positions respectively, while France continued to
lead the ranks in terms of tourist arrivals.

The hospitality industry consists of broad category of fields within the service
industry that includes lodging, restaurants, event planning, theme parks,
transportation, cruise line, and additional fields within the tourism industry. The
hospitality industry is a several billion dollar industry that mostly depends on the
availability of leisure time and disposable income. A hospitality unit such as a
restaurant, hotel, or even an amusement park consists of multiple groups such as
facility maintenance, direct operations (servers, housekeepers, porters, kitchen
workers, bartenders, etc.), management, marketing, and human resources.

The hospitality industry covers a wide range of organizations offering food service
and accommodation. The hospitality industry is divided into sectors according to
the skill-sets required for the work involved. Sectors include accommodation, food
and beverage, meeting and events, gaming, entertainment and recreation, tourism
services, and visitor information.

Competition & Usage Rate

Usage rate is an important variable for the hospitality industry. Just as a factory
owner would wish to have his or her productive asset in use as much as possible
(as opposed to having to pay fixed costs while the factory isn't producing), so do
restaurants, hotels, and theme parks seek to maximize the number of customers
they "process" in all sectors. This led to formation of services with the aim to
increase usage rate provided by hotel consolidators. Information about required or
offered products is brokered on business networks used by vendors as well as
purchasers.

In viewing various industries, "barriers to entry" by newcomers and competitive

advantages between current players are very important. Among other things,
hospitality industry players find advantage in old classics (location), initial and
ongoing investment support (reflected in the material upkeep of facilities and the
luxuries located therein), and particular themes adopted by the marketing arm of
the organization in question (such as a restaurant called the 51st fighter group that
has a WW2 theme in music and other environmental aspects). Very important is
also the characteristics of the personnel working in direct contact with the
customers. The authenticity, professionalism, and actual concern for the happiness
and well-being of the customers that is communicated by successful organizations
is a clear competitive advantage.

Indian context:
As per the Travel and Tourism Competitiveness Report 2009 by the World
Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd overall,
moving up three places on the list of the world's attractive destinations. It is ranked
the 14th best tourist destination for its natural resources and 24th for its cultural
resources, with many World Heritage sites, both natural and cultural, rich fauna,
and strong creative industries in the country. India also bagged 37th rank for its air
transport network. The India travel and tourism industry ranked 5th in the long-
term (10-year) growth and is expected to be the second largest employer in the
world by 2019.

1.1 FRAGMENTED INDUSTRY

Fragmented industries have many small competitors and have structural factors
that inhibit concentration. The reasons for the fragmentation may include:

1. Low barriers to entry.

2. Highly specialized market for goods and services requires extreme specialization
by firms.

3. High transportation costs.

4. Lack of standardization, or lack of need for it.

5. High need for trust and local firms often inspire more trust in their customers.

In most parts of the world, but notably in many regions of Europe tourism has
developed into and has until recently been considered a "fragmented industry". A
fragmented industry typically consists on the supply side of many small- or
medium-sized enterprises (SMEs) producing and selling very competitive or
slightly differentiated products (services) which face on the demand side small
regional markets with buyers displaying strong local and location preferences.

Fragmentation has been far stronger and more prevalent in vacation tourism as
compared to business tourism and has also played less of a role in underdeveloped
or newly developing economies where tourism arrived late and with the helping
hand of multinational and transnational enterprises (see e.g. Clegg, 1987). The
historical importance and dominance of the small business sector in tourism can be
easily illustrated with a few stylized facts from the hotel sector: In the European
Union 94.4 % of the accommodation & food sector is classified as small business
employing nine employees or less. The big companies with more than 250
employees cover 17.2 % of all employees. SMEs are still more prevalent in the
hospitality industry as compared to other industries: in Europe, SMEs employ 83
% of all hospitality workers, while across all industries SMEs provide employment
for 66 % of the labor force (Eurostat, 2000). For instance, most typical of the
situation in central and southern Europe, the average size of hotels was 35.3 beds
in 1994 from where it changed only marginally to 37 beds by 1998.

The fragmentation of the industry and its trade associations

             
There is general agreement that the business travel and tourism industry
does not receive the attention it deserves from government. This is,
perhaps, partly because it is a very fragmented industry with no single body
speaking for the whole industry, even in an individual country, let alone
globally.            
The lack of a single body may reflect the very diverse nature of the
industry, which has three main dimensions, as follows:        
1 There are great differences in terms of structure, key players, and market
characteristics between different sectors of business travel and tourism
such as incentive travel and exhibitions.          
2 The suppliers, intermediaries and buyers are usually distinctly different
types of organization with different objectives and ways of operating.           
3 There are distinct geographical differences around the world within
business travel and tourism. For example, even the terms used vary from
place to place, around the world. Conventions in the USA are usually called
conferences in the UK and congresses in much of mainland Europe.   
However, these reasons do not offer a full explanation for the fragmentation
that we see in business travel and tourism. In some other industries, the
problems identified above are also present, but they are more united and
speak as industries with fewer different voices than business travel and
tourism.          
There is no doubt that this ‘fragmentation’ and the lack of a clear, single
voice representing the industry is a real problem for the industry in terms of
influencing politicians and public policy, in individual countries and globally. 

The fragmentation of the industry is clearly illustrated by a brief look at the

1999–2000 edition of the influential guide, Venue – The World-wide Guide
to Conference and Incentive Travel Facilities. This guide listed no fewer
than sixty-four professional associations, and this list does not claim to be
fully comprehensive! These bodies often market themselves to try to attract
new members, sometimes at the expense of other associations.            
For the sake of the industry, there is clearly a case, therefore, for greater
co-operation and partnership, together with rationalization of the trade
associations in the industry. This is now being recognized by many in the
industry and some useful initiatives are under way.           

In the UK, for example, the Business Tourism Partnership (BTP) was set
up in 1999 to give a single, strong voice to the industry. This group has
thirteen members and was set up in response to the UK government’s new
tourism strategy which was published in January 1999. Among other issues
the BTP is seeking to persuade government in the UK to reduce value
added tax (VAT) on hotel accommodation and devote some money from
the new air passenger duty tax for investment in business tourism facilities.
It is also interested in qualifications and training for the industry, as well as
the need for better data on business travel and tourism.  

1.2 EMERGING INDUSTRY

Latest trends in tourism industry:
As a result of the late-2000s recession, international arrivals suffered a strong
slowdown beginning in June 2008. Growth from 2007 to 2008 was only 3.7%
during the first eight months of 2008. The Asian and Pacific markets were affected
and Europe stagnated during the boreal summer months, while the Americas
performed better, reducing their expansion rate but keeping a 6% growth from
January to August 2008.

Only the Middle East continued its rapid growth during the same period, reaching
a 17% growth as compared to the same period in 2007. This slowdown on
international tourism demand was also reflected in the air transport industry, with a
negative growth in September 2008 and a 3.3% growth in passenger traffic through
September.

The hotel industry also reports a slowdown, as room occupancy continues to

decline. As the global economic situation deteriorated dramatically during
September and October as a result of the global financial crisis, growth of
international tourism is expected to slow even further for the remaining of 2008,
and this slowdown in demand growth is forecasted to continue into 2009 as
recession has already hit most of the top spender countries, with long-haul travel
expected to be the most affected by the economic crisis.

Sports tourism
Since the late 1970s, sports tourism has become increasingly popular. Events such
as rugby, Olympics, Commonwealth games, Asian Games and football World
Cups have enabled specialist travel companies to gain official ticket allocation and
then sell them in packages that include flights, hotels and excursions.

Creative tourism

Creative tourism has existed as a form of cultural tourism, since the early
beginnings of tourism itself. Its European roots date back to the time of the Grand
Tour, which saw the sons of aristocratic families traveling for the purpose of
mostly interactive, educational experiences. More recently, creative tourism has
been given its own name by Crispin Raymond and Greg Richards, who as
members of the Association for Tourism and Leisure Education (ATLAS), have
directed a number of projects for the European Commission, including cultural and
crafts tourism, known as sustainable tourism. They have defined "creative tourism"
as tourism related to the active participation of travelers in the culture of the host
community, through interactive workshops and informal learning experiences.

Meanwhile, the concept of creative tourism has been picked up by high-profile

organizations such as UNESCO, who through the Creative Cities Network, have
endorsed creative tourism as an engaged, authentic experience that promotes an
active understanding of the specific cultural features of a place.
More recently, creative tourism has gained popularity as a form of cultural tourism,
drawing on active participation by travelers in the culture of the host communities
they visit. Several countries offer examples of this type of tourism development,
including the United Kingdom, the Bahamas, Jamaica, Spain, Italy and New
Zealand.

MEDICAL TOURISM

Medical tourism (also called medical travel, health tourism or global

healthcare) is a term initially coined by travel agencies and the mass media to
describe the rapidly-growing practice of travelling across international borders to
obtain health care. It also refers pejoratively to the practice of healthcare providers
travelling internationally to deliver healthcare.

Services typically sought by travelers include elective procedures as well as

complex specialized surgeries such as joint replacement (knee/hip), cardiac
surgery, dental surgery, and cosmetic surgeries. However, virtually every type of
health care, including psychiatry, alternative treatments, convalescent care and
even burial services are available.

Over 50 countries have identified medical tourism as a national industry. However,

accreditation and other measures of quality vary widely across the globe, and some
destinations may become hazardous or even dangerous for medical tourists.

In the context of global health, "medical tourism" is a pejorative because during

such trips health care providers often practice outside of their areas of expertise or
hold different (i.e., lower) standards of care. Greater numbers than ever before of
student volunteers, health professions trainees, and researchers from resource-rich
countries are working temporarily and anticipating future work in resource-starved
areas. This emphasizes the importance of understanding this other definition.

Popular medical travel worldwide destinations include: Argentina, Brunei, Cuba,

Colombia, Costa Rica, Hong Kong, Hungary, India, Jordan, Lithuania, Malaysia,
The Philippines, Singapore, South Africa, Thailand, and recently, Saudi Arabia,
UAE, South Korea, Tunisia and New Zealand.

Popular cosmetic surgery travel destinations include: Argentina, Bolivia, Brazil,

Colombia, Costa Rica, Cuba, Mexico and Turkey. In South America, countries
such as Argentina, Bolivia, Brazil and Colombia lead on plastic surgery medical
skills relying on their experienced plastic surgeons. In Bolivia and Colombia,
plastic surgery has also become quite common. According to the "Sociedad
Boliviana de Cirugia Plastica y Reconstructiva", more than 70% of middle and
upper class women in the country have had some form of plastic surgery.
Colombia also provides advanced care in cardiovascular and transplant surgery.

1.3 TOURISM INDUSTRY IN TRANSITION AND

MATURE STAGE

A UNITED KINGDOM PERSPECTIVE

The main objectives of the research were to determine the extent and types of
tourism-related activity taking place within Transition Initiatives around the UK;
whether there are any examples of responsible tourism good practice emerging
which could be replicated elsewhere; the kinds of tourism that would most benefit
sustainable communities; the character and extent of collaboration between
Transition Initiatives, the tourism industry and local government. This was done
through a combination of survey questionnaires and key informant interviews.
Case studies were undertaken in Glastonbury and Totnes, both located in the south
west of England.

Tourism-related Transition activity taking place in the two Transition Initiatives

investigated (Transition Glastonbury and Transition Town Totnes) includes: an
environmentally-friendly shopping bag range; local food producers’ directories;
bike hire and rickshaw services; a local currency and Transition tours.

It is suggested that the basic principles of the Transition movement are strongly
aligned to those of responsible tourism. However, findings show that most
Transition Initiatives are too young to have begun to think about tourism activity;
the majority are still at the stage of raising awareness of the Transition model
within their communities. In other communities, where activity on the ground has
begun, tourism is often being overlooked. There is uncertainty amongst groups as
to how to integrate tourism into the Transition model, yet many of the existing
working groups set up within Initiatives have relevance to tourism – if only the
link is made. There is evidence to suggest that Transition Initiatives could offer an
holistic approach to tourism development and that tourism could play a key role in
linking many of the core elements of sustainability at the heart of Transition (and
sustainable communities more widely) to drive change and promote sustainable
development.
Most tourism industry representatives interviewed were generally supportive of the
Transition Initiatives, or showed signs that they would be with a better
understanding. However, to date, engagement with accommodation providers and
local attractions managers appears to be low, though there were indications that
engagement may be fruitful.

It remains to be seen what impact the Sustainable Communities Act will have, but
putting pressure on local authorities to ‘opt in’ is advised. Other key
recommendations within the report include seeking to engage the tourism industry
in the Transition process (especially by targeting the mainstream, high volume
operators) and networking amongst other Transition Initiatives, and other
sustainable community initiatives, across the county to give the movement greater
credibility in the eyes of local government.

The Transition of Airport Hotels

There’s an interesting phenomena at airports these days. It’s called the hotel.
Airport hotels have seen a surge in popularity during the past few years. Just look
at the number of airport hotels that now have electronic arrival / departure boards
tucked away in their lobbies. Yes, in this era fraught with flight delays and
cancellations it makes sense for many frequent travelers to stay near the airport.
You don’t have to rush from a business meeting to the airport hours ahead of time,
only to sit about a terminal packed to overflowing while there’s a good chance
their flight might be delayed — or, even worse, cancelled.

But the real surge in popularity isn’t coming from frequent travelers over-nighting,
but from traveling executives who are finding airport hotels to be a good
counterbalance to all of the craziness of the terminal between flights, or who want
to avoid the hassle of traveling into a city just for a single meeting.
Many business executives are using airport hotels as a haven for productivity –
setting up their laptops in lobbies, restaurants and day-rooms. Others use the hotels
as a place to chill out in a restaurant or spa, only a short walk or shuttle ride from
check-in.

According to PricewaterhouseCoopers in 2007 the industry spent $5.5 billion in

renovating these properties, second only to luxury hotels.
As discount airlines such as JetBlue, Southwest and others who cater to the
business traveler continue to expand into secondary airports, might luxury hotels
follow?

Thus, the industry is in between a transition towards maturity stage in most

countries.

1.4 GLOBAL TOURISM INDUSTRY

 World Tourism Industry is an industry which is flourishing all over the world.
The scenario of the World tourism industry is always in a state of flux, ever
changing. It is reckoned that end of 2007 will see the World tourism industry
generating as many as 234 million job opportunities for the people. It is also
assumed that the contribution towards the GDP by the World tourism industry will
be approximately 10.3%. People can afford overseas travel. However, in order to
meet the requirements, constant changes in the travel and tourism policies need to
be reframed and restructured.

World tourism industry and the environment:

The impact of the World tourism industry on our environment cannot be

overlooked. While global tourism industry is expanding manifold, every effort is
being made to protect the heritage of historically significant places. With every
passing year, world tourism industry is experiencing new changes to adapt to the
needs of time. Increase in the world tourism activities mean more consumption of
energy and the natural resources. Alternative sources of energy are being worked
out. Global warming, rise in sea levels, pose a great threat to all the nations
worldwide. Concepts of Eco tourism is fast catching up with the common people.

World tourism industry and economy:

In order to find out the contribution of the travel and tourism industry to a
particular country, the Travel And Tourism Account or the TTSA is an important tools
to determine the economics in detail. The TTSA throws light on matters related to
travel, tourism job opportunities, comparing related tourism industries including
hotels, transport etc.,.TTSA furnishes information about global travel, tourism
pertaining to growth, demand, export, GDP, employment opportunities, capital
investment etc.,.

Indian perspective:

India’s tourism industry is experiencing a strong period of growth, driven by the

burgeoning Indian middle class, growth in high spending foreign tourists, and
coordinated government campaigns to promote ‘Incredible India’.

The tourism industry in India is substantial and vibrant, and the country is fast
becoming a major global destination. India’s travel and tourism industry is one of
them most profitable industries in the country, and also credited with contributing a
substantial amount of foreign exchange. This is illustrated by the fact that during 2006,
four million tourists visited India and spent US $8.9 billion.

Several reasons are cited for the growth and prosperity of India’s travel and tourism
industry. Economic growth has added millions annually to the ranks of India’s middle
class, a group that is driving domestic tourism growth. Disposable income in India has
grown by 10.11% annually from 2001-2006, and much of that is being spent on travel.

SOURCES:

en.wikipidea.com

www.google.com