Travel Agency & Tour Operations Management

INTRODUCTION TO TRAVEL AND TOURISM

OBJECTIVES:
After completing this unit, you will be able to:
• describe the history and development of tourism
• explain the composition of the tourism industry
• describe the tourism product
• explain how to protect the environment for the benefit of tourism
• describe what a tour operator does

THE HISTORY OF TOURISM

Mass travel and tourism is a relatively recent development. In early history, only rich and powerful people
travelled while ordinary people stayed at home. The little free time people enjoyed was normally connected
with religious festivals or ‘holy days’. It is from these holy days that we get the word holidays. In later
centuries, wealthy people travelled for health reasons, and visited health spas, where the water for drinking
and bathing, together with a change of climate, was considered beneficial. The common people, however,
rarely moved outside the confines of their own town or village, as they lacked the four essentials to take a
holiday:
 Time- (to leave their essential subsistence work)

 -Money - (to pay for the journey, and maintain the home)

 Transport- (most had only their own feet or an animal and cart)

 Motivation- (poor education meant that they feared unknown places and foreigners and so had no
desire to travel abroad).

Some people had travelled on government business such as during colonial service but it was with the
coming of the ‘Industrial Revolution’ in Europe and North America that conditions for the urban people
changed. Gradually, working people were given some paid free time and wage levels also improved.
Transport changed with the 19th century invention of the steam engine, and travel became cheaper and
faster. However, holiday making for ordinary people was still very limited even up to the middle of the 20th
century. It was initially confined to the home country of the traveler. People travelled mostly by steam train
and chose destinations such as seaside or beach locations to enjoy new experiences, and to escape from the
noise and dirt of the cities.
It was really after the end of the Second World War that travel and tourism began to accelerate. A
combination of higher wages and salaries, better and cheaper modes of transport, including private cars,
and more paid free time led to a huge increase in the numbers of people travelling. Furthermore, many men
had travelled as part of the armed services. They were often the first family member ever to go abroad and
they came home keen to revisit other places and cultures they had only glimpsed during war. At this time
the coming of motion pictures and television also showed people what foreign places were like and so the
desire to travel was fostered.
 Travel Agency & Tour Operations Management

The concept of tourism as we know it today is relatively new. With the development of cars, railways,
steamships, motor vehicles and airplanes, travel became easier. Some enterprising people saw the potential
of tourism and created the concept of ‘package tours’. These tours included the cost of transport, meals,
accommodation and sometimes entertainment at a price people could afford, and with the security of
travelling with a pre booked group it was easy for the inexperienced to enjoy travelling.

In more recent times, improvements in aircraft technology and design opened up new long haul
destinations. Many locations can now be reached in a matter of hours. This has led to a dramatic growth in
international tourism as people can reach faraway places during their annual leave from work.

WHAT IS TOURISM?

To understand the ‘tourism sector of industry’, it is necessary to define what tourism is. In 1993 the United
Nations Statistical Commission defined tourism as comprising ‘the activities of persons travelling to and
staying in places outside their usual environment for not more than one consecutive year, for leisure,
business and other purposes’.

When we examine the above definition we can see that tourism can be subdivided into two main categories.
These are:

Domestic tourism, which are involves residents of one country travelling only within that country
and international tourism, which involves residents of one country travelling to and in another country.
Both categories of tourism are important and contribute to economic development.
International tourism can likewise be broken down into two distinct areas. These are:

Inbound tourism, which involves residents of one country travelling to and in another country we
could call the “host” country; and outbound tourism, which involves residents of the “host” country
travelling out of their own land to and in another country, which has become a host to them. All types of
travelers engaged in tourism are described as visitors.

International visitors include:

Tourists (overnight visitors):

A visitor who stays at least one night in a country visited, in either private or commercial accommodation.
Same day visitors
A visitor who does not spend one night in a country visited.

The purposes of a visit for inbound, outbound or domestic tourism can be divided as follows:
• Leisure, recreation and holidays;
• Visiting friends and relations (VFR);
• Business and professional;
• Religious/cultural/historical (Heritage);
• Health;
• other (including special interests).

WHAT IS THE TOURISM SECTOR?

 Travel Agency & Tour Operations Management

The tourism sector is a coming together of various suppliers of services to offer people a complete tourist
experience. It is made up, therefore, of providers of transport, board and lodging together with a range of
activities designed to satisfy the tourist’s needs.

Normally the tourism sector comprises both the government (public sector) and the business community
(private sector). They combine to give the tourists a satisfactory holiday.
The public sector is usually involved with:
• Policy making;
• Statistical analysis;
• Planning and development;
• Licensing and regulation;
• Marketing;
• Training and human resource development.

Sometimes the public sector gets involved in the actual provision of services for the tourist. In many
countries National Tourism Organizations (NTOs) are established to plan, organize, direct, coordinate and
monitor the sector as a whole.

The private sector provides all the services which the tourist might require. These providers of services are
commercial operations and try to make a profit from the tourist.

Some of the services provided by these commercial enterprises include:

 Transport (air, sea and land)

 Accommodation
 Food and beverages
 Entertainments/activities, as well as many others

In general, the public sector plans and guides tourism development and the private sector provide the end
product.

GROWTH OF TOURISM

The onset of better wages, more leisure time, an increase in the desire to travel improvements in
transportation systems and facilities for tourists have combined to make tourism the world’s largest
industry. In 1993, international tourist arrivals worldwide grew to 500 million and the World Tourism
Organization (WTO) forecasts that this number will increase to 650 million by the end of the century. These
figures are easily measured as international travelers complete formalities upon entering or leaving a foreign
country. While figures for domestic tourism are not so easily measured, it is certain that domestic tourists
can be measured in billions.
At present, the tourism industry directly employs more than 204 million people throughout the world which
makes it the largest single employer. This means that one person out of every nine is employed in tourism
(World Travel and Tourism Council estimate for 1994) and of course many more are indirectly employed in
the sector. Tourism is ranked first among world exports of goods and services, ahead of oil, motor vehicles
or electronic equipment. Forecasts suggest that tourist arrivals will grow at about 3% per year, thereby
doubling in size over the next 20 years (WTO 1994).
 Travel Agency & Tour Operations Management

Earnings from international tourism are called ‘invisible exports’. These earnings come about as a result of
selling a country’s tourism product to visitors from abroad. Countries earn much needed foreign exchange in
this way and governments now place great importance on the tourism sector.

WHY DO PEOPLE TRAVEL?

People who travel do so for the following reasons:

 They want the pleasure of rest, adventure, escape, discovery excitement, sport, romance or any
other pleasure seeking motivation. Taken together they
comprise leisure tourism.
 They have to carry out business, visit family, fulfill religious duties or for medical reasons.

Although both sets of travelers are important to the industry as a whole, it is normally the former which is
central to our understanding of tourism.

Travel for pleasure can be broken down into general interest tourism and special interest tourism.

General interest tourism is made up of people who are in search of rest, relaxation and enjoyment.

Special interest tourism attracts people who have certain interests or hobbies such as trekking, fishing,
culture, adventure water sports, etc. and undertake travel to pursue these special interests or hobbies.
It is important for us to know why people travel to given destinations so that we can provide them with the
type of product they demand.

WHAT IS THE TOURISM PRODUCT?

The term ‘tourism product’ can sometimes be difficult to define. In general terms the product is the total
experience a tourist will have when visiting a tourist destination. This total experience will include:

- Geographical location;
- Climate;
- Natural resources (mountains, lakes, beaches, etc.);
- Man-made resources (theme parks, resorts, sports facilities, etc.);
- Cultural/historical features;
- Infrastructure (airports, water supply, power supply etc.);
- Tourism superstructure (hotels, guesthouses, restaurants, etc.);
- The atmosphere of a place and the warmth and hospitality of the people

In other words, the tourism product is the total package of everything a particular destination offers to the
tourist.

As in all industries and businesses, a product is put together or manufactured for sale to the general public.
In order to develop and sell a product, a company or organisation must know what the potential buyers
really want. It is of little benefit to produce a beautiful product that nobody wants to buy. The tourism
product too must meet the needs of potential buyers.
 Travel Agency & Tour Operations Management

Some countries will have a much more varied product than others. This can be illustrated by comparing such
countries as India with one like the Republic of the Maldives. The former has an enormous variation of
natural tourism resources, while the latter is mainly dependent on the sole resource of island/water
sports/beach. Nevertheless, the Maldives is an internationally recognised tourist destination. It has
exploited its main resource by attracting a specific type of tourist.

Event a destination already possesses natural tourism resources, at needs infrastructure and superstructure
to exploit those resources. It is of no benefit to have a wonderful destination in a place that people cannot
reach or where there are no services or facilities. A destination needs adequate man-made facilities such as:

Airport and Roads

Power supply INFRASTRUCTURE
Water supply
Sewage and drainage systems Waste disposal
facilities
Hotels
Restaurants SUPERSTRUCTURE
Bars
Places of entertainment
Ground transport etc.
Heritage (culture, religion, history etc.) NATURAL RESOURCES &
Geographical features HERITAGE
Climate etc.

The combination of infrastructure, superstructure and the natural resources of the country go to make up
the tourism product. If any of these elements are below standard, the product will be affected and difficult
to sell.

TOURISM AND THE ENVIRONMENT

What is meant by ‘the environment’?

When we talk of the environment we talk of our surroundings such as soil, water, air, vegetation, wildlife
and other scarce resources. Every day we are made aware of environmental issues in the newspapers, on
television or by observing our own surroundings. Pollution of the land, air, rivers and seas are just some of
the issues that we are faced with. Other more global ‘issues are:
 The green house effect
 The ozone hole
 Deforestation
 The impact of tourism on the environment

TOURISM AND THE ENVIRONMENT

Tourism and the environment are closely linked. When tourists visit your country they come to experience
the environment and its natural beauty such as the sea, beaches, ancient sights, the wildlife and the flora
and fauna (vegetation) and of course your cultural heritage. It makes sense to protect it.
 Travel Agency & Tour Operations Management

TOURISM POLICY AND REGULATION

Effective policy making and regulation by government can and does protect the environment.
For example:
 Tourism planning and infrastructure
 Planning and building regulations
 Licensing of hotels
 Regulations on effluent discharges
 Regulations on dumping of garbage and hazardous waste

THE NEGATIVE IMPACT OF TOURISM ON THE ENVIRONMENT

In the developing world, however, it can be difficult to regulate effectively due to the lack of resources and
the need for jobs which can create over-exploitation of the environment.

You have already seen in this unit that tourism has many benefits including job creation and its impact on
the economy of the country. Because tourism does have these benefits, it is sometimes difficult to see the
potential problems that tourism can create for the environment. Some examples of this are:

 Development without proper planning

 Damage to natural resources such as coral reefs, forests and wildlife
 Untreated sewage disposal
 Ineffective disposal of waste and rubbish
 Social impact (e.g. drugs, exploitation)

Tourism and the environment- how can you help?

Whether you work in an office, a hotel or as a guide there are things that you can do to reduce the risk on
the environment. This applies just as much at home as it does at work.

• Save energy by switching off unnecessary appliances, e.g. air-conditioning. Energy is a scarce resource and
should be conserved.
• Save water - water is a scarce resource. Try not to waste it.
• Detergents and chemicals pollute rivers and water supplies. Use them sparingly and take care where you
dispose of them.
•Dispose rubbish in the proper containers. Rubbish and waste just dumped is not only an eyesore but can
attract pests and vermin and cause disease. It also poses a threat to wildlife
and vegetation.
• If you work in an office, try not to waste paper. The more paper you use the more trees need to be cut
down to make more.
• When you are talking to or working with tourists, stress the importance of conservation of your
environment for their enjoyment and the enjoyment of others. For example, discourage them from buying
coral or goods made from end angered species.
• If you have any ideas that will reduce wastage of scarce resources or help to protect your environment,
suggest them to your supervisor or manager.
• Report any infringements of regulations that exist to protect the environment.
 Travel Agency & Tour Operations Management

More and more people are becoming aware of the importance of conservation of the environment and
scarce resources.
The tourist visits your country to experience the good things about your environment, so it makes sense to
protect it. Perhaps more importantly, it should be protected for you and future generations.

WHAT IS A TRAVEL AGENT?

In the middle of the last century an Englishman called Thomas Cook started selling excursions by train. He
put together different services such as transport and accommodation and sold them as a ‘package’ at one
inclusive price to travelers. The providers of these services gave him a commission on all sales made and in
this way the concept of a travel agency came into being. Today, we would call the organizer or such a trip,
who buys the “ingredients “at one price, mixes them together, and sells them at a higher, inclusive price, a
tour operator, and we would call the organization which sells the package on to the customer, and in turn
earns his own commission, a retail travel agent. In those early days Thomas Cook acted as both tour
operator and travel agent and so today Thomas Cook is internationally recognized as the founder of the
modern travel trade. Just imagine how one small trip by train started the world’s biggest growth industry!

The modem travel agent can either be a small business with only a few staff members or it can be a very
large and sometimes multinational organization with hundreds 0 employees. Travel agent may provide a full
range of services, or specialize In the provision of only certain services Outbound tour operators tend to be
quite large operations, while inbound ‘operators tend to have only a few staff ([here are, of course,
exceptions to this).

A travel agency is therefore an enterprise or business which is authorised by the main

providers of services to sell such services to the travelling public for which they are paid
a fee or commission. The main suppliers of services are called ‘industry principals’.
Such services may include:
• Air transportation
• Water transportation
• Rail transportation
• Motor transportation
• Hotel/restaurant services and accommodation
• Entertainment
• Package tours and excursions
• Foreign exchange facilities (Bureau de Change)
• Travel insurance
• Passport and visa services
All agencies, whether large or small, must fulfill certain minimum requirements. These include:
• Proper finance base
• Adequate premises
• Trained and qualified staff
• Government license or approval (where applicable)
 Travel Agency & Tour Operations Management

• Authority to sell on behalf of industry principals in return for a commission

For travel agents to operate successfully, the staff must be trained to a high standard.

WHAT IS A TOUR OPERATOR?

Tour operators can also be divided into two groups. There are those which deal with outbound business
from their own country. These operators have staff which travel abroad, buying hotel bed space, negotiating
ground arrangements such as meet and greet services, local transport, representation for their clients
sightseeing and entertainment, to which they add international air transport. (The partner companies which
provide many of these services in the host country will be known in their own country as tour operators,
inbound operators, or ground operators, and even, sometimes, as destination managers.) The complete
package of arrangements and services is then sold at an inclusive package price to clients through retail
agents in the home (generating) country of the tour operator. The outbound tour operator makes his money
by selling the complete package at a higher price than he has paid for all the ingredients.
The tour operating sector must also fulfill certain high operating standards, very like those for the retail
sector (see above)
Client’s book and pay for their holidays from retail agents shop or offices in their own towns in their own
country. The retail agent receives commission from the tour operator on the sales made.

Clients like to use the services of tour operators because making their own arrangements involves a lot of
prior knowledge arid experience, which they may not have, and because they have the security of booking
with a licensed operator. (See unit on legislation) It is also easier to pay locally, in familiar currency, a
previously agreed and fixed price.
All these are reasons why clients like to use the services of tour operators but it is important to note that
tour operators and travel agents are not necessary to clients. They only exist because of the convenience
and service they provide.
In their own country the tour operators who have put the whole package together will be referred to as tour
operators by the clients and as principals or tour operators by the retail agents. When the ground operators
in the host country refer to these same overseas companies they will usually call them wholesalers.
The term “tour operator” therefore needs to be used with care, as it can be confusing!