CHAPTER I – THE MEANING AND IMPORTANCE OF TOURISM AND

HOSPITALITY

LEARNING OUTCOMES
1. Explain the relationship of tourism and hospitality
2. Discuss the components of the tourism and hospitality industry
3. Define tourism and hospitality
4. Differentiate tourists from excursionists
5. Understand the various elements of travel used as criteria for defining travelers and/or tourists
6. Explain the nature of a tour
7. Describe the characteristics of a tourist product and a tourist destination
8. Compare tourism and hospitality with other industries
9. Appreciate the importance of tourism and hospitality

THE RELATIONSHIP OF TOURISM AND HOSPITALITY

COMPONENTS:
1. Food and beverage services 2. Lodging services 3. Recreation services 4. Travel related
(tourism) services

These components constitute the tourism and hospitality network. Network means a complicated
interconnection of parts or components. The components of the tourism and hospitality network may be
independent and competitive businesses; yet, they are interrelated and interdependent. Although
the components of the tourism and hospitality network are constantly changing, the network will
continue to dominate as a global industry.

1. THE FOOD AND BEVERAGE COMPONENT

The public looks for food and beverage services everywhere. There must be food service available to
them for breakfast, lunch, dinner, and snacks. Food service establishments are found in theme parks,
schools and colleges, hospitals and homes for senior citizens, in prisons and halfway houses, and in
shelters for the homeless.

2. THE LODGING COMPONENT

Lodging involves providing overnight or even long term services to guests. For many people, lodging is
a place to sleep. For others, lodging facilities not only provide beds but also entertainment and
recreational facilities.

EXAMPLES OF LODGING ESTABLISHMENTS

• Parador – an old spanish monastery or castle that was converted to a hotel
• Pension or pensione – a french or italian home in which guests are provided with a room and a
board
• Chateau – a french castle or elegant country home used as a hotel
• Ryokan – a japanese inn in which traditional customs are observed
• Hostel – a lodging facility in which inexpensive accommodation are provided

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 3. RECREATION AND ENTERTAINMENT COMPONENT
Entertainment originated from the traditional duties of a host to entertain his or her guests. The host
has always felt an obligation to attend to the needs of his or her guests not only for food and beverages
and lodging, but also for entertainment. Nowadays, the concept of entertaining guests is broader. Guests
are offered different kinds of entertainment and recreational activities such as golf, tennis, hiking,
boating, swimming, handball, casino gambling, and concerts.

4. TRAVEL AND TOURISM CONCEPT

Travel and tourism are used together as an umbrella term to refer to those businesses that provide
primary services to travelers. These include not only food and beverage services, lodging services,
recreation and entertainments services, but also transportation services, and the services of travel
agencies and tour operators. The main purpose of transportation is to make it possible for people to
go from one place to another. There are many ways to do this, from the primitive and simple to the
modern and complex. The common means of transportation are automobiles, recreational vehicles
(RVs), buses, trains, ships, and airplanes.

Travel agencies and tour operators are modern additions to the travel and tourism world.
Travel agent – one who sells travel services in a travel agency, he or she sells travel services that are
assembled by others into “packages”
Package – a bundle of related travel services offered to a buyer at a single price
Tour operators – wholesalers who make the necessary contacts with hotels, airlines, and other
providers of travel services abd devise packages which will appeal to retail buyers

DEFINITION OF TOURISM

DEFINITION OF HOSPITALITY
The word hospitality is derived from the Latin word hospitare, which means “to receive a guest”. Several
related words come from the same Latin root, including hospital, hospice, and hostel. In each of these
words, the principal meaning is a host who receives, welcomes, and caters to the needs of people who
are temporarily away from their homes.

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MEANING OF TOURIST

CLASSES OF VISITORS

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ELEMENTS OF TRAVEL

DISTANCE – The difference between local travel or travelling within a person’s home community and
nonlocal travel or traveling away from home. It excludes commuting to and from work and change in
residence
LENGTH OF STAY AT THE DESTINATION – Tourists are temporary visitors who make at least one
overnight stay. Excursionists are temporary visitors who do not stay overnight in the country that they
visit.
RESIDENCE OF THE TRAVELER – For business and research purposes, it is important to know where
people live.
PURPOSE OF TRAVEL –

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THE NATURE OF A TOUR

THE TOURIST PRODUCT

In a narrow sense, the tourist product consists of what the tourists buys. In a wider sense it is a
combination of what the tourist does at the destination and the services he or she uses during his or her
stay.

CHARACTERISTICS OF A TOURIST PRODUCT

a. It is a service; it is an intangible item
b. Largely psychological in its attraction
c. Vary in standard and quality over time
d. Supply of the product is fixed

THE TOURIST DESTINATION

The tourist destination is a geographical unit where the tourists visits and stays. The success of a tourist
destination depends upon the interrelationship of three basic factors: 1. attractions, 2. amenities or
facilities, and
3. accessibility.

1. ATTRACTIONS

2. AMENITIES OR FACILITIES
Include accommodation, food, local transport, communications, and entertainment at the site. Differ
according to the attraction of the site.

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 3. ACCESSIBILITY
Accessibility means having regular and convenience of transport in terms of time/distance to the
destination from the originating country at a reasonable price.

TOURIST SERVICES

CHARACTERISICS OF TOURISM AND HOSPITALITY

IMPORTANCE OF TOURISM AND HOSPITALITY

DISCUSSION QUESTIONS

1. Explain the relationship of tourism and hospitality.

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2. Describe the components of the tourism and hospitality network.
3. Define tourism.
4. Explain the meaning of hospitality.
5. Differentiate tourism from recreation and migration.
6. How do tourists differ from excursionists?
7. Describe the four elements of travel.
8. Explain the basic factors of a tourist destination.
9. Differentiate site from event attractions; natural from man-made attractions.
10. Describe tourist services.
11. How is tourism and hospitality different from other industries?

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CHAPTER II – THE HISTORY OF TOURISM AND HOSPITALITY

LEARNING OUTCOMES
1. Describe the history of the tourism and hospitality industry
2. Explain the origin of tourism and hospitality in the Philippines
3. Identify the international travel patterns
4. Describe the factors that favor the growth of tourism and hospitality

HISTORY OF THE TOURISM INDUSTRY

EARLY TOURISM
• The term tourism was only used in the 19th Century
• Tourism is derived from the Hebrew word torah which means studying, learning, or searching
• Tourism can trace its ancestry in the Old Testament
• Early tourism has two forms: travel for business such as trading, and religious travel
• At this time, there were also travel for private purposes. Examples are the Olympic Games held
in 776 BC by the Greeks as well as the travel by rich Romans for enjoyment and to visit friends
and relatives.
• By employing relays of horses, distances of 100 miles or more could be covered in one day. In
between distances of six miles were stables where horses could be changed. They are the
equivalent of the present gasoline stations.

TOURISM IN THE MEDIEVAL PERIOD

• Travel declined
• Travel derived from the word travail. It became burdensome, dangerous and demanding
• Thieves inflicted harm on those who dared to travel
• No one travelled for pleasure
• Crusaders and pilgrims were the only ones who travelled

TOURISM DURING THE RENAISSANCE AND ELIZABETHAN ERAS

• Travel for education became popular in the 16th century
• A few renowned universities developed so that travel for education was introduced largely by
the British
• Young men were encouraged to travel to the continent to widen their education
• The education of a gentleman should be completed by a “Grand Tour” of the cultural centers of
the continent which lasted for three years

TOURISM DURING THE INDUSTRIAL REVOLUTION

• It brought about not only technological changes, but also essential social changes that made travel
desirable
• Emerging middle class combined with higher incomes and growing education travelled for their
holidays
• Working class resorts near major industrial centers were created

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MODERN TOURISM - 19TH CENTURY
Two technological developments: railway, and steam power
• The railroads created not only more business, but also more competition as various private
companies invested heavily in hotels, resorts and entertainment facilities
• The use of steam powers provided increased mobility. It provided reliable and inexpensive
transportation
• Travel organizers emerged. The first and most famous was Thomas Cook - “Father of the Travel
Agency Business”

MODERN TOURISM – 20TH CENTURY

• WWI brought about many changes which influenced the volume of tourism
• Forms of travel began to change. The railways as a means of travel declined with the introduction
of the motor car
• WWII also led to increased interest in travel
• Another outcome of war was the progress in aircraft technology
• After the post war recovery years, there was an increase in private car ownership

HISTORY OF THE HOSPITALITY INDUSTRY

ANCIENT PERIODS - THE SUMERIANS

• Group of people who lived in Mesopotamia near the Persian Gulf at about 4000 BC
• Sumerians became prosperous, as well as farmers and cattle breeders
• They were able to sell their surplus grain to people in other parts of the region
• In addition to growing and trading grain, they also converted it to alcoholic beverages or beers
• Local Sumerian taverns were established making them the first hospitality business

ANCIENT PERIOD - EARLY TRADERS

• In 2000 BC, a considerable amount of trade had developed among the people of the Middle East
• Some enterprising individuals set up caravanserai which provided food and shelter to travelers,
they were often dirty and infected with bugs that travelers tried to avoid them

EMPIRES: 3200 BC TO 476 AD

• Three significant empires flourished – the Egyptian, Greek, and Roman. This period is known to
historians as the Empire Era. Each of these empires developed hospitality services for increasing
numbers of travelers.

EGYPTIAN EMPIRE
• By 3200 BC, various groups had been united under one government ruled by a pharaoh, the
Egyptian term for king
• The famous pyramids or tombs for pharaohs became tourist attractions that many people
traveled long distances to see
• People also travelled to attend religious festivals
• The ancient Egyptians were the first to see that food service and lodging should be provided to
travelers

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 • They were the first to begin the activity we now call tourism and hospitality

GREEK EMPIRE
Ancient Greek civilization began to develop about 1100 BC. It evolved in the form of independent
city-states
• Their land and sea travels made them dominant in the Mediterranean region
• Inns and taverns became common in ancient Greece. As in the middle east they had a bad
reputation
• In contrast to inns and tavers, their restaurants were often respected and served fine food

ROMAN EMPIRE
• The Romans constructed elaborate inns along the main roads for officials and couriers of the
Roman government
• These inns were described as “fit for a king”
• It is believed that they were the first to establish the first restaurant chain
• In ancient Persia, large caravans carried elaborate tents that were used along caravan routes.
Frequently, these caravans stopped at Khans, a combination of stables, sleeping accommodations,
and fortresses which provided shelter from sandstorms and enemies who attacked the caravans.

MEDIEVAL PERIOD
• Throughout the Dark Ages, the Roman Catholic Church took over the job of feeding and housing
travellers
• Number of inns increased but the standards of comfort and cleanliness differed greatly in different
countries and regions
• During the Renaissance, concern about table manners increased and rules to be observed at the
dinner table developed

EARLY MODERN PERIOD

• In 16th century, taverns called ordinary appeared in England, these served a fixed price, fixed menu
meal
• During this era, coffee and tea began to influence the culinary habits of Western Europe
• During the next century, coffee houses were built all over Europe
• Other developments include an increase in the quality of inns, the application of English common
law to the hospitality industry, and the reintroduction of restaurants for public dining
• Late 18th century, the restaurant business flourished
• By the 1700’s the inns in England were much safer and more comfortable. The mails were an
important element in the development of the hospitality industry.
• The food service element of the hospitality industry changed dramatically in France in 1765. In
that year, a man name Boulanger operated a small business which sold soups and broths in Paris.
They were known as restaurants, a French word which means “restoratives”.
• Boulanger is recognized as the first to create the first restaurant, an establishment open to the
public with a dining room where a variety of foods could be bought and consumed.

THE INDUSTRIAL ERA

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 • The establishment of railroad stations became excellent locations for new hospitality business in
England and other countries that developed rail networks
• Inns, taverns, restaurants, and hotels opened near railroad stations

MODERN PERIOD - 19TH CENTURY

• In London, more luxurious hotels began to appear
The American used their ingenuity to create something for everyone
• More innovations in hospitality occured such as the custom of dining out, better methods of
preserving food, mass feeding, and the establishment of ice cream parlors

MODERN PERIOD - 20TH CENTURY

• After WWII, there was a rapid development of hotels and coffee shops
• 1950’s saw the emergence of fast food restaurants
• 1960’s, fine dining became popular
• 1970’s, new establishments were introduced such as Taco Bell, TGI Friday’s, Red Lobster.
Corporations such as Four Seasons, Marriott, Sheraton, Hyatt and other high class chains

PIONEERS IN THE TOURISM AND HOSPITALITY INDUSTRY

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ORIGINS OF TOURISM AND HOSPITALITY IN THE PHILIPPINES
• Tourism in the Philippines began when the original inhabitants of the country roamed around in
search for food, often through inter-tribe travel.
• A more recognizable form of tourism in the Philippines happened when galleons or wooden boats
sailed between Mexico and the Philippines during the galleon trade.
• In the 1920’s the steamship and the airline pioneers, the “China Clipper” and the “Manila
Clipper”, brought some passengers to Manila via Hong Kong.
• Travelers from the U.S., China, Japan, and Europe were provided inland tours by entrepreneurs
with their unregistered private cars and coaches called “colorum”.
• There were some offices like the American Express International which informally arranged land
tours for foreign travelers.
• There were only few tourist attractions and destinations.
• In 1952, the first tourism association in the Philippines was organized – Philippine Tourist and
Travel Association (PTTA).
• The government organized the Board of Travel and Tourism Industry (BTTI).
• In the late 1950’s, more hotels and restaurants and entertainment facilities were established.

INTERNATIONAL TRAVEL PATTERNS

• Major travel flows occur between the United States and Western europe
• The heaviest flow of air traffic into Europe is between New York and London
• The top ten countries generating international travel in rank order are: United States, Germany,
United Kingdom, Canada, Japan, France, Netherlands, Mexico, Switzerland, Australia

FACTORS THAT FAVOR THE GROWTH OF TOURISM AND HOSPITALITY

• Rising disposable income for large sections of the population.
• Growth in the number of retired persons who have the desire and the energy to travel.
• Increase in discretionary time – shorter work weeks and longer vacations.
• Greater mobility of the population.
• Growth in the number of “singles”.
• Greater credit availability through credit cards and bank loans.

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 • Higher educational levels.
• The growth of the cities.
• Simplification of travel through the package tour.
• Growth of multinational business.
• Modern transportation technology.
• Shift in values.
• Advances in communication.
• Smaller families and changing roles.

DISCUSSION QUESTIONS

1. Discuss early tourism.

2. Describe the Grand Tour.
3. Describe tourism during the Medieval Period, the Renaissance, and Elizabethan Eras.
4. How did the Industrial Revolution bring about major changes in tourism development?
5. Discuss tourism in the 19th and 20th centuries.
6. Describe the origin of tourism and hospitality in the Philippines.
7. Explain the contributions of the Sumerians to the development of the hospitality industry.
8. How did the invention of the railroad and the development of railroad networks affect the
development of the hospitality industry?
9. Explain the international travel patterns.
10. Discuss the factors that hastened the growth of tourism and hospitality.

CHAPTER ACTIVITIES

1. Research on what travel will be like twenty years from now. 2.

Research on why the Olympic Games survived since 776 BC.
3. Research on the origin of the hospitality industry in the Philippines.

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CHAPTER III – THE ECONOMICS OF TOURISM AND HOSPITALITY

LEARNING OUTCOMES
1. Explain the role of tourism and hospitality in economic development
2. Analyze the economic impact of tourism and hospitality on a destination area
3. Differentiate the direct effects from the secondary effects of tourist expenditures on the economy
of the host area
4. Elucidate the meaning of tourism multiplier and its effect on the economy of the host country
5. Describe the undesirable effects of the economic aspects of tourism and hospitality
6. Identify the strategies which can maximize the economic effects of tourism and hospitality

THE ROLE OF TOURISM AND HOSPITALITY IN ECONOMIC DEVELOPMENT

Several developing countries have used tourism and hospitality development as an alternative to help
economic growth. The reasons for this are:
1. There is a continuous demand for international travel in developed countries
2. As income in developed countries increases, the demand for tourism and hospitality also increases
at a faster rate
3. Developing countries need foreign exchange to aid their economic development

The Organization for Economic Cooperation and Development (OECD) has concluded that tourism and
hospitality provides a major opportunity for growth to countries that are at the intermediate stage of
economic development and require more foreign exchange earnings.

Tourism and hospitality is an invisible export which differs from international trade in many ways:
1. In tourism and hospitality, the consumer collects the product from the exporting country, thereby
eliminating the freight costs for the exporter
2. The demand for pleasure travel is largely dependent on non economic factors
3. By using specific fiscal measures, the exporting or tourist receiving country can manipulate
exchange rates so that those for tourists are higher or lower than those in other foreign trade
markets
4. Tourism and hospitality is a multifaceted industry that directly affects several sectors in the
economy and indirectly affects many others
5. Tourism and hospitality brings many more non-monetary benefits and costs than other export
industries

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ECONOMIC IMPACT

DIRECT AND SECONDARY EFFECTS

In order to measure the economic impact of tourism and hospitality on the destination area, it is
important to know the direct and secondary effect of visitor expenditures on the economy of the area.
Tourism expenditures received as income by businesses have a direct effect on the economy of the host
area. The term “direct” means that the income is received directly. “Indirect” or secondary effects mean
that the money paid by tourists to businesses are, in turn, used to pay for supplies, wages pf workers, and
other items used in producing the products or direct services bought by tourists.

TOURISM MULTIPLIER

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COST-BENEFIT RATIO
Those concerned with developing the tourism and hospitality industry, whether a government or a
private individual, would like to know the extent of potential benefits and their costs. Benefits divided by
costs equal the cost benefit ratio. To arrive at these ratios, the following procedures are used:

1. Determine where the tourist dollar is spent

2. Determine what percentage of each expenditure leaves the local economy
3. Derive a “multiplier effect”, a ratio applied to income that reflects multiple spending within an
economy
4. Apply the multiplier effect to the tourist expenditures to arrive at the total benefits of tourist
expenditures in dollars
5. Derive a cost-benefit ratio expressed as dollars received/dollars spent
6. Apply the cost benefit ratios to tourist expenditures to provide estimates of income and costs of
tourist business to a community, for both the private and public sectors

UNDESIRABLE ECONOMIC ASPECTS OF TOURISM

1. Higher prices
2. Economic instability

HOW TO MAXIMIZE THE ECONOMIC EFFECT OF TOURISM AND HOSPITALITY

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GROWTH THEORIES
ECONOMIC STRATEGIES

IMPORT SUBSTITUTION

INCENTIVES
The most common forms of incentives are:
1. Tax exemptions/reductions on imported machineries, materials etc.
2. Reduction in company taxation
3. Tax holidays (limited period)
4. Guarantee of stabalization of tax conditions (for up to 20 years)
5. Grants
6. Subsidies
7. Loans at low rates of interest
8. Provision of land freehold at nominal or little cost or at low rents
9. Free and unrestricted repatriation of all or part of invested capital profits, dividends, and interest
subject to tax provisions
10. Guarantees against nationalization or appropriation

FOREIGN EXCHANGE
• Many countries have placed restrictions on spending in order to maximize foreign exchange
earnings
• They have limited the amount of their own currency that tourists can bring in and take out of the
destination to ensure that foreign currency us used to pay bills in the host region
• Tourists may be required to pay bills in foreign currency
• Visitors may be required to show that they have enough money for their stay before they are
permitted to enter the country or they may even be required to enter with a specified amount of
foreign currency for the duration of their visit

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DISCUSSION QUESTION

1. Discuss the roles of tourism and hospitality in economic development.

2. Differentiate tourism and hospitality from international trade.
3. Explain the economic impacts of tourism and hospitality on a destination area.
4. Describe the direct and secondary effects of tourist expenditures.
5. Explain the meaning of tourism multiplier.
6. In what way does the tourism multiplier affect the economy of the host country?
7. Discuss the undesirable economic aspects of tourism and hospitality.
8. Describe the strategies that can maximize the economic effect of tourism and hospitality.

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