Tourism System

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Published on January 24, 2009

Author: magielsr

Source: slideshare.net

Description

An introduction to the Tourism System for tourism students of colleges and universities.

An Introduction to the Tourism System Magiel Venema © 2011 Edutour BV

Table of Contents Introduction The Tourism System Tourism Demand Tourism Supply Intermediaries Transit Regions and Tourism Flows Supporting Institutions External Environments Acknowledgements

Introduction

The Tourism System

Tourism Demand

Tourism Supply

Intermediaries

Transit Regions and Tourism Flows

Supporting Institutions

External Environments

Acknowledgements

Chapter 1 Introduction

Aim of the Presentation To learn what Tourism Studies are about; To learn what Tourism is about; To get acquainted with the main players in Tourism; To understand their relationships; To experience the interdependence between Society and Tourism.

To learn what Tourism Studies are about;

To learn what Tourism is about;

To get acquainted with the main players in Tourism;

To understand their relationships;

To experience the interdependence between Society and Tourism.

So let’s start: What is behind all this and is this all there is? Tourists Accommodations Attractions Ther is much, much more …………………

The answer…... Companies: Hotels, Transport, Travel Agencies, …. Organizations: Information Services, …. People: Management, Front Office, …. Tourists: Needs, Wants, Behavior, …. Governments: Laws, Subsidies, …. Society: Norms, Values, …. Politics: Terrorism, …. Economy: Income, Employment, …. Technology: Reservation Systems, Internet, .… Together: THE TOURISM SYSTEM

Companies: Hotels, Transport, Travel Agencies, ….

Organizations: Information Services, ….

People: Management, Front Office, ….

Tourists: Needs, Wants, Behavior, ….

Governments: Laws, Subsidies, ….

Society: Norms, Values, ….

Politics: Terrorism, ….

Economy: Income, Employment, ….

Technology: Reservation Systems, Internet, .…

Together: THE TOURISM SYSTEM

Chapter 2 The Tourism System

What is a System? In a system, all separate parts perform together to make it function. Each separate part alone is of no use.

What is a System? Something that has parts: Components Which are Interrelated And which are changing in time: Dynamic And what is part of Society: External Environment Components of a System are Interrelated , so they influence each other. The System also receives and sends influences from and to the External Enviroment . Because Components change, Interrelations change and Society changes, making a system Dynamic !

Something that has parts: Components

Which are Interrelated

And which are changing in time: Dynamic

And what is part of Society: External Environment

Components of a System are Interrelated , so they influence each other. The System also receives and sends influences from and to the External Enviroment .

Because Components change, Interrelations change and Society changes, making a system Dynamic !

A Car as an example of a System What makes a system? Components Interrelated Dynamic (Changing) External Environment The System (Car) has many Components (like Wheels with Tires), which are Interrelated (Wheel and Car), so they Influence each other. They are Dynamic (Tear and wear), so there is Change . Also the System receives influences from External Environment (Nail on the Road), which causes a flat tire. Also it sends influences (Exhaust Fumes) to the External Environment .

What makes a system?

Components

Interrelated

Dynamic (Changing)

External Environment

The System (Car) has many Components (like Wheels with Tires), which are Interrelated (Wheel and Car), so they Influence each other. They are Dynamic (Tear and wear), so there is Change . Also the System receives influences from External Environment (Nail on the Road), which causes a flat tire. Also it sends influences (Exhaust Fumes) to the External Environment .

Tourism as a System Components: Tourists, Companies, Destinations Interrelated: Supply and Demand Dynamics: Nature of Tourism changes over the years External Environment: Political, Economical, Social and Technological Factors (PEST) influence and are influenced by Tourism

Components: Tourists, Companies, Destinations

Interrelated: Supply and Demand

Dynamics: Nature of Tourism changes over the years

External Environment: Political, Economical, Social and Technological Factors (PEST) influence and are influenced by Tourism

Dynamics of Tourism Tourism in the recent past: OLD TOURISM Travel industry was in charge Attraction based Tourism in the near future: NEW TOURISM Consumer is in charge Experience based

Tourism in the recent past: OLD TOURISM

Travel industry was in charge

Attraction based

Tourism in the near future: NEW TOURISM

Consumer is in charge

Experience based

Some Characteristics of ‘Old Tourism’ (from Fifties): Paid Holidays Economic Growth Jet Aircraft, Cheap Charter Flights Sun-lust Tourists Mass Tourism, Package Tours Entrance of Multi National Companies (like TUI, Expedia)

Paid Holidays

Economic Growth

Jet Aircraft, Cheap Charter Flights

Sun-lust Tourists

Mass Tourism, Package Tours

Entrance of Multi National Companies (like TUI, Expedia)

Some Characteristics of ‘New Tourism’ (starting at the end of 20 th Century): Attention for Environment and Sustainability Inmcreased Travel Experience More Demanding & Experienced Customers More Media exposure (TV, Internet, Twitter,..) Experiences more important than Sun New Production and Distribution Methods Vertical and Horizontal Integration of Companies New Technologies (Internet, Computer Reservation Systems, Database Marketing, Smart Phones, ….)

Attention for Environment and Sustainability

Inmcreased Travel Experience

More Demanding & Experienced Customers

More Media exposure (TV, Internet, Twitter,..)

Experiences more important than Sun

New Production and Distribution Methods

Vertical and Horizontal Integration of Companies

New Technologies (Internet, Computer Reservation Systems, Database Marketing, Smart Phones, ….)

OK, let’s study the Tourism System! We will take a closer look at the Components, Interrelations, Dynamics and External Environment Tourists at a Destination Airport Dynamics: Old Tourism New Tourism Attitude of External Environment

We will take a closer look at the Components, Interrelations, Dynamics and External Environment

The Tourism System : Components, Interrelations and Environment Demand Supply Intermediaries Influences from outside world Influences on outside world Transit Regions & Tourist Flows Supporting Institutions

Chapter 3 Tourism Demand

Tourism Demand Demand Supply Intermediaries Influences from outside Influences on outside Transit Regions & Tourist Flows S.I. S.I.

We will start with the Demand Demand = Tourists Effective Demand: Those who can and do Potential Demand: Those who can, but don’t do it yet Deferred Demand: Those who can and normally do, but not now for some reason No Demand: Those who can’t do and won’t do it Why study Demand? Product Development Marketing Purposes

Demand = Tourists

Effective Demand: Those who can and do

Potential Demand: Those who can, but don’t do it yet

Deferred Demand: Those who can and normally do, but not now for some reason

No Demand: Those who can’t do and won’t do it

Why study Demand?

Product Development

Marketing Purposes

Definition of a Tourist Tourists are 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. (UNWTO, 1995)

Tourists are 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.

(UNWTO, 1995)

Definition Ottawa Conference (1991) International Tourism: Travelers Visitors (included in statistics) Other Travelers Two types of Visitors: Tourist (Overnight Visitor) Same-day Visitor

International Tourism:

Travelers

Visitors (included in statistics)

Other Travelers

Two types of Visitors:

Tourist (Overnight Visitor)

Same-day Visitor

A more easy definition: A tourist is a temporary leisured person who voluntarily visits a place away from home for the purpose of experiencing a change Time: Temporary Choice: Voluntarily Destination: Place away from Home Motivation: Experience

A tourist is a temporary leisured person who voluntarily visits a place away from home for the purpose of experiencing a change

Time: Temporary

Choice: Voluntarily

Destination: Place away from Home

Motivation: Experience

Why do people travel at all? Push Factors: Why go? Needs and Wants Self-fulfillment To learn and to experience Pull Factors: Why there? Attractions in destination Needs and wants fulfillment Gains: real or perceived!

Push Factors: Why go?

Needs and Wants

Self-fulfillment

To learn and to experience

Pull Factors: Why there?

Attractions in destination

Needs and wants fulfillment

Gains: real or perceived!

Analyzing t he Demand Quantitative Aspects How many ? When ? How often ? How do they travel and where do they stay? How and where to? Qualitative Aspects Motivation Composition Typologies Life styles

Quantitative Aspects

How many ?

When ?

How often ?

How do they travel and where do they stay?

How and where to?

Qualitative Aspects

Motivation

Composition

Typologies

Life styles

The Demand Quantitative Aspects How many ? Where to? When ? Ages? How often ? From where? Type of Transportation? Type of Accommodation? Expenditures? Etc.

Quantitative Aspects

How many ?

Where to?

When ?

Ages?

How often ?

From where?

Type of Transportation?

Type of Accommodation?

Expenditures?

Etc.

Statistics Quantitative Aspects are found in statistics International Statistics (UNWTO) National Statistics Source for Planning and Marketing!

Quantitative Aspects are found in statistics

International Statistics (UNWTO)

National Statistics

Source for Planning and Marketing!

The Demand Qualitative Aspects Composition Typologies Norms and Values Behavior Life styles

Qualitative Aspects

Composition Typologies

Norms and Values

Behavior Life styles

Maslow’s needs and motivations Maslow states that there is a hierarchy in human needs. When a lower need is fulfilled, than a person is motivated to pursue a higher need. From low to high he distinguishes the following needs: Physiological: Relaxation (Rest, Sunlust) Safety: Security (Health) Belonging: Love (Togetherness, Roots) Esteem: Status (Recognition) Self-Actualization: Be yourself (Self-discovery) Enhancement 1: To Know and Understand: Knowledge (Culture) Enhancement 2: Aesthetics: Beauty (Scenery)

Maslow states that there is a hierarchy in human needs. When a lower need is fulfilled, than a person is motivated to pursue a higher need.

From low to high he distinguishes the following needs:

Physiological: Relaxation (Rest, Sunlust)

Safety: Security (Health)

Belonging: Love (Togetherness, Roots)

Esteem: Status (Recognition)

Self-Actualization: Be yourself (Self-discovery)

Enhancement 1: To Know and Understand: Knowledge (Culture)

Enhancement 2: Aesthetics: Beauty (Scenery)

Aesthetics To know and understand Self-Actualisation Esteem Belonging Safety Physiological Maslow’s Needs and Motivations Applied and Enhanced in Relation to Travel

Plog’s Typology of Tourists (Stanley Plog, 1974) Allocentrics : ‘other-centered’ tourists who enjoy exposing themselves to other cultures and new experiences, and are willing to take risks in this process Psychocentrics : ‘self-centered’ tourists who prefer familiar and risk averse experiences Midcentrics : ‘average’ tourists whose personality type is a compromise between allocentric and psychocentric traits

Allocentrics : ‘other-centered’ tourists who enjoy exposing themselves to other cultures and new experiences, and are willing to take risks in this process

Psychocentrics : ‘self-centered’ tourists who prefer familiar and risk averse experiences

Midcentrics : ‘average’ tourists whose personality type is a compromise between allocentric and psychocentric traits

% of Population Psychocentric Near psychocentric Near allocentric Allocentric More familiar destinations Exotic destinations Midcentric Plogs Typology of Tourists

Plogs Typology of Tourists Psychocentrics Familiar Destinations Traditional Activities Tour Packages Looking for Safety ‘ OLD’ TOURISTS Allocentrics Exotic Destinations Discovery Independent More Adventurous ‘ NEW’ TOURISTS Link between Type of Tourists and Type of Destination

Psychocentrics

Familiar Destinations

Traditional Activities

Tour Packages

Looking for Safety

‘ OLD’ TOURISTS

Allocentrics

Exotic Destinations

Discovery

Independent

More Adventurous

‘ NEW’ TOURISTS

% of Population Familiar destinations Exotic destinations Once Exotic Destinations become Mass Destinations! Plogs Typology of Tourists

Change of a destination: Acapulco (México) From a tiny fishing village into this…….. There are many Acapulco’s in the world!

Types of Tourists (After E. Cohen, 1972) Based upon both the interaction with local population and the use of travel industry Drifters Explorers Individual Mass Tourists Organized Mass Tourists

Based upon both the interaction with local population and the use of travel industry

Drifters

Explorers

Individual Mass Tourists

Organized Mass Tourists

Typology of E. Cohen Drifter: Adventurous, avoids other tourists, makes no use of tourist services Long-term stay, immerses completely in the local society Explorer: Independent, immerse themselves locally, but rely also on modern amenities. Backpacker, guided by the ‘Lonely Planet’. Individual Mass-Tourist: Uses services of the tourism industry, limited contact with local population Traveling individually, but stays on the ‘beaten track’ Organized Mass-Tourist: Highly dependent on tourist industry, fully organized, no or limited contacts with local population, stays in own environmental bubble; Western-style accommodations, prefers cruise or ‘all-inclusive

Business & Leisure Travel No clear distinction between business and leisure in definitions: Business Travel: Trips made by those who are required to travel in relation to their work.

No clear distinction between business and leisure in definitions:

Business Travel: Trips made by those who are required to travel in relation to their work.

Types of Business Travelers Individual Business Travelers: Sales, Service, Training,….. Corporate Hospitality (Grand Prix, Sky Box) M eetings I ncentives C onferences E xhibitions or E vents Most of the time referred to as MICE

Individual Business Travelers:

Sales, Service, Training,…..

Corporate Hospitality (Grand Prix, Sky Box)

M eetings

I ncentives

C onferences

E xhibitions or E vents

Most of the time referred to as MICE

Chapter 4 Tourism Supply

Tourism Supply Demand Supply Intermediaries Influences from outside Influences on outside Transit Regions & Tourist Flows S.I.

Tourism Supply Tourism Product Broad Sense: Destination Features Narrow Sense: Tourism Industry/Services at Destination

Tourism Product

Broad Sense: Destination Features

Narrow Sense: Tourism Industry/Services at Destination

Components of Product Attractions Facilities: Accommodation, Restaurants, .. Transport Infrastructure Hospitality

Attractions

Facilities: Accommodation, Restaurants, ..

Transport

Infrastructure

Hospitality

Typology of Attractions Feature(s) of Natural Environment Man-Made, but not designed for attracting visitors (Cathedral) Man-Made purpose designed for attracting visitors (Amusement or Theme parks) Culture, Customs, Folklore Special Events Destination Mix: the Combination of Characteristics at a given Destination

Feature(s) of Natural Environment

Man-Made, but not designed for attracting visitors (Cathedral)

Man-Made purpose designed for attracting visitors (Amusement or Theme parks)

Culture, Customs, Folklore

Special Events

Destination Mix: the Combination of Characteristics at a given Destination

Natural Environment Climate Beaches Caves Mountains Rivers, Lakes Glaciers Forests Flora & Fauna

Climate

Beaches

Caves

Mountains

Rivers, Lakes

Glaciers

Forests

Flora & Fauna

Man-made, not specific Churches Historic Buildings Ancient Ruins Historic Gardens Steam Railways Industrial Archeology Reservoirs

Churches

Historic Buildings

Ancient Ruins

Historic Gardens

Steam Railways

Industrial Archeology

Reservoirs

Man-made, specific, purpose built Theme Park Amusement Park Casinos Resorts Heritage Centers Zoo’s, Safari Parks Craft Centres Marinas

Theme Park

Amusement Park

Casinos

Resorts

Heritage Centers

Zoo’s, Safari Parks

Craft Centres

Marinas

Culture, Customs & Folklore Traditional Costumes Markets Religion Health Culinary

Traditional Costumes

Markets

Religion

Health

Culinary

Special Events Sporting Events (Olympic Games, World Soccer Cup) Cultural Events (Music Festivals)

Sporting Events (Olympic Games, World Soccer Cup)

Cultural Events (Music Festivals)

Destinations and Attractions Single Attraction: Brighton (UK) Embryonic Destination: Waitomo Caves (New Zealand) Developed Single Market Destination Aruba (Dutch West Indies) Diversified Destination Florida (USA)

Single Attraction:

Brighton (UK)

Embryonic Destination:

Waitomo Caves (New Zealand)

Developed Single Market Destination

Aruba (Dutch West Indies)

Diversified Destination

Florida (USA)

Diversified Destination: Spain Sun, sea, sand Culture Old Cities Nature City of Avila

Sun, sea, sand

Culture

Old Cities

Nature

Attraction as a Product Tourism Product: Intangible Perishable Production = Consumption Producers and consumers are part of product Not standardized Core is free Customers don't buy it, but use it temporarily

Tourism Product:

Intangible

Perishable

Production = Consumption

Producers and consumers are part of product

Not standardized

Core is free

Customers don't buy it, but use it temporarily

Product = Experience Anticipation Journey to and from Visit itself Recollection: A story to tell back home!!

Anticipation

Journey to and from

Visit itself

Recollection:

A story to tell back home!!

Product Levels (After Philip Kotler) Core Product: Need it satisfies Facilitating Product: Possibility to use it Supporting Product Adding value Augmented Product Atmosphere, Packaging Hamburger (Hunger) Plate, Seat, Etc. Coke Service (Happy Meal)

Core Product:

Need it satisfies

Facilitating Product:

Possibility to use it

Supporting Product

Adding value

Augmented Product

Atmosphere, Packaging

Hamburger (Hunger)

Plate, Seat, Etc.

Coke

Service (Happy Meal)

Number of tourists Time Exploration Involvement Development Stagnation Decline Continued Stagnation Rejuvenation Consolidation Destination Life Cycle (R. Butler, 1980)

Stages Life Cycle of a Destination Exploration: A secret spot is discovered, no or few facilities Involvement: A few locally-run businesses are established Development: A well defined tourism industry is developed. Destination is well promoted Consolidation: Tourism becomes an important or even a dominant feature of the local economy Stagnation: Tourism growth slows down and carrying capacity is reached. The area is no longer a new hotspot, probably it is overbuilt and polluted Decline or Rejuvenation: Decline results as tourists choose other destinations. Rejuvenation typically requires attracting a different kind of tourist and active government support!

Exploration: A secret spot is discovered, no or few facilities

Involvement: A few locally-run businesses are established

Development: A well defined tourism industry is developed. Destination is well promoted

Consolidation: Tourism becomes an important or even a dominant feature of the local economy

Stagnation: Tourism growth slows down and carrying capacity is reached. The area is no longer a new hotspot, probably it is overbuilt and polluted

Decline or Rejuvenation: Decline results as tourists choose other destinations. Rejuvenation typically requires attracting a different kind of tourist and active government support!

Pleasure Periphery Area with popular tourist destinations around the industrial, affluent world. Driving force: Social Distinction: When a higher social class sees that a lower class is coming to their destination, they depart and look for another. In time we see this shift in visitors to a destination: Upper Class, (Cultural) Elite, Gentry Upper Middle Class Mass Tourism

Area with popular tourist destinations around the industrial, affluent world.

Driving force: Social Distinction:

When a higher social class sees that a lower class is coming to their destination, they depart and look for another.

In time we see this shift in visitors to a destination:

Upper Class, (Cultural) Elite, Gentry

Upper Middle Class

Mass Tourism

Pleasure Periphery Each main tourist generating region has its own pleasure periphery This periphery grows with the arrival of new possibilities (available transport, time, money) There is an end to this growth, because earth is not infinite There are also overlaps of peripheries of different generating regions: Caribbean (USA & Europe), SE Asia (Europe and Australia) To retain their exclusivity, higher classes return to previous visited places, however they indulge there in other, more exclusive activities: social distinction!

Each main tourist generating region has its own pleasure periphery

This periphery grows with the arrival of new possibilities (available transport, time, money)

There is an end to this growth, because earth is not infinite

There are also overlaps of peripheries of different generating regions: Caribbean (USA & Europe), SE Asia (Europe and Australia)

To retain their exclusivity, higher classes return to previous visited places, however they indulge there in other, more exclusive activities: social distinction!

Pleasure Peripheries Europe: Start 19 th Century: Coastal Areas Britain & North Sea End 19 th Century: Mediterranean 1960-ies: North Africa, Canary Islands 1990-ies: Caribbean, S.E. Asia 21 st Century: Space or back to the coast?

Start 19 th Century:

Coastal Areas Britain & North Sea

End 19 th Century:

Mediterranean

1960-ies:

North Africa, Canary Islands

1990-ies:

Caribbean, S.E. Asia

21 st Century:

Space or back to the coast?

Pleasure Peripheries USA End 19 th Century: East Coast USA: Rhode Island Start 20 th Century: Florida 1950-ies: Mexico, Caribbean, Hawaii 1990-ies: S.E. Asia, South America 21 st Century: Space or back to Rhode Island?

End 19 th Century:

East Coast USA: Rhode Island

Start 20 th Century:

Florida

1950-ies:

Mexico, Caribbean, Hawaii

1990-ies:

S.E. Asia, South America

21 st Century:

Space or back to Rhode Island?

Pleasure Periphery Here today, gone tomorrow Coney Island (New York): Once a bustling entertainment area, now derelict, but…. Alternative Groups from a cultural elite and develop their own things!

Here today, gone tomorrow

Here today, gone tomorrow Both host population and travel industry need stability to assure: Income & Employment Tax revenues Therefore: Planning Sustainability Benefits and Costs!

Both host population and travel industry need stability to assure:

Income & Employment

Tax revenues

Therefore:

Planning

Sustainability

Benefits and Costs!

Destination Development Models Agents of Development: Public Sector Private Sector Public & Private Partnerships Typologies: Spontaneous (Costa Brava) Integrated (La Plagne, ski resort in French Alps) Catalystic (Disney in Florida) Creating Customer Loyalty and Sustainability should always be the guideline!

Agents of Development:

Public Sector

Private Sector

Public & Private Partnerships

Typologies:

Spontaneous (Costa Brava)

Integrated (La Plagne, ski resort in French Alps)

Catalystic (Disney in Florida)

Creating Customer Loyalty and Sustainability should always be the guideline!

Customer Loyalty High Attachment to Destination Many Return Visits HIGH LOYALS Low Attachment to Destination Many Return Visits SPURIOUS LOYALS High Attachment to Destination Few Return Visits LATENT LOYALS Low Attachment to Destination Few Return Visits LOW LOYALS

Impacts of Tourism Impacts can be either Positive or Negative Impacts of Tourism on Destination: Spatial Economical Cultural Environmental Political Social

Impacts can be either Positive or Negative

Impacts of Tourism on Destination:

Spatial

Economical

Cultural

Environmental

Political

Social

Costs and Benefits of Tourism Benefits Income (wages, tax) Employment Infrastructure Window on the world for locals More attention for own environment Costs Pollution Crime Import leakages Rising prices (food, property) Congestion

Benefits

Income (wages, tax)

Employment

Infrastructure

Window on the world for locals

More attention for own environment

Costs

Pollution

Crime

Import leakages

Rising prices (food, property)

Congestion

Index of Irritation (Doxey, 1975) Also called the IRRIDEX Locals express openly irritation at behavior of tourists Antagonism Saturation, attitude of locals becomes more negative Annoyance Visitors are considered a normal thing, contact is formal Apathy Visitors are welcomed Euphoria Description Stages

Also called the IRRIDEX

What is the total impact and which impact do we want? To reach a desired impact on a destination, a clear planning policy is needed Aim is of course to maximize the positive impacts and to minimize the negative impacts Tourism development must be aimed at sustainability, so that it will last

To reach a desired impact on a destination, a clear planning policy is needed

Aim is of course to maximize the positive impacts and to minimize the negative impacts

Tourism development must be aimed at sustainability, so that it will last

Principles of Sustainable Tourism Tourism should be blended with local environment and community Tourist experience focuses on existing features Local ownership Local materials and food Conservation of resources Encounter of local population and tourists

Tourism should be blended with local environment and community

Tourist experience focuses on existing features

Local ownership

Local materials and food

Conservation of resources

Product in narrow sense Accommodation Type: Resort, City Location & Atmosphere Concepts: All-suite All-Inclusive Bed & Breakfast Category: Stars Restaurants Information Services (CVB)

Accommodation

Type: Resort, City

Location & Atmosphere

Concepts: All-suite

All-Inclusive

Bed & Breakfast

Category: Stars

Restaurants

Information Services (CVB)

Transportation Train Scheduled Trains Special Trains (Blue Train) Road Car (Private and Rental Car) Coach Water Cruises (River / Ocean) Ferries Air Scheduled Charter

Train

Scheduled Trains

Special Trains (Blue Train)

Road

Car (Private and Rental Car)

Coach

Water

Cruises (River / Ocean)

Ferries

Air

Scheduled

Charter

Quality in Travel Quality is to deliver what you promised So make it clear what you are going to deliver Quality is objective: amount of complaints Quality is subjective: different persons, different standards Quality is value based: Price / Quality relation

Quality is to deliver what you promised

So make it clear what you are going to deliver

Quality is objective: amount of complaints

Quality is subjective: different persons, different standards

Quality is value based: Price / Quality relation

Hospitality Model Consumer Provider Services Money Needs Objectives Expectations Environment Behavior Product Concept

Needs

Objectives

Expectations

Environment

Behavior

Product

Concept

Quality = Meeting Expectations Expectations are a result of: Word of mouth Personal needs and objectives Past experiences Marketing communications Expectations are tested in Service Encounter : Moment of Truth Expected Quality < > Perceived Quality Result: Better - Equal - Below?

Expectations are a result of:

Word of mouth

Personal needs and objectives

Past experiences

Marketing communications

Expectations are tested in Service Encounter : Moment of Truth

Expected Quality < > Perceived Quality

Result:

Better - Equal - Below?

Reasons for Poor Quality (5 Gaps Model) Consumers Expectations as Perceived by Management Translation of Management Perception into Service Quality Specifications Service Quality Specifications into Service Delivery Communication to Customers of Service Delivery Expected Service and Perceived Service Discrepancy between Promise and Actual Product!

Consumers Expectations as Perceived by Management

Translation of Management Perception into Service Quality Specifications

Service Quality Specifications into Service Delivery

Communication to Customers of Service Delivery

Expected Service and Perceived Service

Chapter 5 Intermediaries

Intermediaries Demand Supply Intermediaries Influences from outside Influences on outside Transit Regions & Tourist Flows S.I.

Intermediaries Stimulators NTO's, Regional & Local Tourist Offices Producers Tour Operators / Wholesalers Distributors Travel Agencies Facilitators Touring Clubs, Banks

Stimulators

NTO's, Regional & Local Tourist Offices

Producers

Tour Operators / Wholesalers

Distributors

Travel Agencies

Facilitators

Touring Clubs, Banks

The Travel Industry Which players are there? How do they interrelate?

Which players are there?

How do they interrelate?

Travel Chain Destination Destination Destination Destination Customer Customer Customer Customer T.O. T.O. T.O. D.M.C. D.M.C. T.A. T.O. = Tour Operator / Wholesaler T.A. = Travelagent D.M.C. = Destination Management Company

Main Players: Tour Operators (or Wholesalers): They produce tour-packages, which are either sold directly or via: Travel Agencies: They sell the packages made by touroperators and add other services (like insurance) Destination Management Companies: Supplier of additional services at destination (like excursions, transfers) Eyes and ears of Tour Operator at a destination

Tour Operators (or Wholesalers):

They produce tour-packages, which are either sold directly or via:

Travel Agencies:

They sell the packages made by touroperators and add other services (like insurance)

Destination Management Companies:

Supplier of additional services at destination (like excursions, transfers)

Eyes and ears of Tour Operator at a destination

Tour Operator / Wholesaler CONCEPT REC IPIES INGREDI E NT S PREPARATION BUDGETTING PROMOTION MENU CARD SERVING THE MEAL CONTACT WITH CLIENTS AFTER SALES Compare it with a restaurant!

CONCEPT

REC IPIES

INGREDI E NT S

PREPARATION

BUDGETTING

PROMOTION

MENU CARD

SERVING THE MEAL

CONTACT WITH CLIENTS

AFTER SALES

Tour Operator: Added Value Selecting and packaging holiday elements Promoting and distributing them Offering prices un-obtainable by consumers Providing information Setting and Monitoring quality standards Organizing extra’s: excursions, entertainment Risk brokerage for both resellers and consumers Managing relations with principals

Selecting and packaging holiday elements

Promoting and distributing them

Offering prices un-obtainable by consumers

Providing information

Setting and Monitoring quality standards

Organizing extra’s: excursions, entertainment

Risk brokerage for both resellers and consumers

Managing relations with principals

Types of Tour Operators Mass Tour Operator High Volume Well known Destinations Wide Public Appeal Available through T.A Slow response to changing markets (long term commitments) Integration (hotels, transport, agencies) Low buying rates and prices Specialists Low volumes Exotic Destinations Appeal to niche markets Local Style and owned Accommodation Direct Sellers Quick response to new market trends Higher buying rates and selling prices

Mass Tour Operator

High Volume

Well known Destinations

Wide Public Appeal

Available through T.A

Slow response to changing markets (long term commitments)

Integration (hotels, transport, agencies)

Low buying rates and prices

Specialists

Low volumes

Exotic Destinations

Appeal to niche markets

Local Style and owned Accommodation

Direct Sellers

Quick response to new market trends

Higher buying rates and selling prices

Travel Agencies Two Main Types: Leisure Travel Services Business Travel Services

Two Main Types:

Leisure Travel Services

Business Travel Services

Travel Agencies: Leisure General Bricks and Mortar (‘High Street’) Independent Chains Pop and mom’s Touroperator owned Franchises Home Based Agents Niche Agencies Virtual Agencies: Expedia, Travelocity, …

General Bricks and Mortar (‘High Street’)

Independent Chains

Pop and mom’s

Touroperator owned

Franchises

Home Based Agents

Niche Agencies

Virtual Agencies: Expedia, Travelocity, …

Travel Agencies: Business Travel Management Companies Multi National Companies Nationals Corporate Agencies: Implants (An agency within a client’s company) From sellers of tickets to travel amangers Earnings: no commissions, but transaction fees

Travel Management Companies

Multi National Companies

Nationals

Corporate Agencies: Implants (An agency within a client’s company)

From sellers of tickets to travel amangers

Earnings: no commissions, but transaction fees

Travel Agents Added Value (1) Assistance in search and information Objective and unbiased advice Needs assessment and product matching Customer risk management Product distribution Additional services After sales: advice with complaints

Assistance in search and information

Objective and unbiased advice

Needs assessment and product matching

Customer risk management

Product distribution

Additional services

After sales: advice with complaints

Travel Agents Added Value (2) Dissemination of product information Purchase influence Provision of customer and market information Producer risk management Transaction economies of scale Integration of producer and consumer needs Savings on marketing costs

Dissemination of product information

Purchase influence

Provision of customer and market information

Producer risk management

Transaction economies of scale

Integration of producer and consumer needs

Savings on marketing costs

Marketing in Tourism (4 P’s) P roduct P romotion P rice P lace: Most Important Change! Place = Distribution of the Product: On-Line vs. Off-Line Direct vs. Indirect New Customers vs. Retaining Old Customers

P roduct

P romotion

P rice

P lace: Most Important Change!

Place = Distribution of the Product:

On-Line vs. Off-Line

Direct vs. Indirect

New Customers vs. Retaining Old Customers

Distribution is part of Marketing Development of Tourism Marketing: 1950’s: Mass Market: The Tourist 1960’s: Simple Market Segmentation: Old People 1980’s: Multilevel Segmentation: Wealthy Old People 1990’s: Niche Markets: Wealthy Old People who love to walk 2000’s: Markets of One: Long Tail

Development of Tourism Marketing:

1950’s: Mass Market: The Tourist

1960’s: Simple Market Segmentation: Old People

1980’s: Multilevel Segmentation: Wealthy Old People

1990’s: Niche Markets: Wealthy Old People who love to walk

2000’s: Markets of One: Long Tail

Examples of Market Segmentation Mass market 1960s – 1970s: The Tourists (No segmentation) Simple market segmentation 1980s: Older Couples – Younger Couples Multilevel segmentation 1990s: Wealthy Older Couples Ethnic Older Couples Niche markets & Markets of One 2000s: Postal Code & Mr. Johnson

What is the Long Tail? The Long Tail is: A huge offer of single items which are each of interest to specific small groups or niches, but whose total market-potential is bigger than that of the market-leader! Since ICT today is characterized by: Cheap and fast processors Cheap data-storage High speed data-transmission Hugh bandwidth It is now possible to store, assemble and distribute huge inventories of transportation, lodging, ancillary services, etc. Needs of any niche market can be satisfied

The Long Tail is:

A huge offer of single items

which are each of interest to specific small groups or niches,

but whose total market-potential is bigger than that of the market-leader!

Since ICT today is characterized by:

Cheap and fast processors

Cheap data-storage

High speed data-transmission

Hugh bandwidth

It is now possible to store, assemble and distribute huge inventories of transportation, lodging, ancillary services, etc.

Needs of any niche market can be satisfied

Visitor volume Examples of Purpose of Visits General City Trip Barcelona Architecture by Gaudi The Long Tail in Tourism Art, Culture and Food

Distribution Models Traditional Distribution Chain: Off-line “ Bricks and Mortar” New Distribution Chain: On-Line (Cybermediaries) “ Clicks” Emerging Distribution Chain: Multi-Channels “ Bricks and Clicks”

Traditional Distribution Chain: Off-line

“ Bricks and Mortar”

New Distribution Chain: On-Line (Cybermediaries)

“ Clicks”

Emerging Distribution Chain: Multi-Channels

“ Bricks and Clicks”

Distribution Models Direct Off-Line Direct On-Line Indirect Off-Line Indirect On-Line

Dynamics in the Travel Industry All players have to add value If a member of the distribution chain does not add value to the product or service, then his function is parasitic and, as a result, he will eventually disappear! TRENDS: De-intermediation (Internet) Globalization Integration (Horizontal, Vertical, Diagonal) Increased Scale of Operations Home-based Travel Agents (like ‘Tupperware Ladies’) Role of Social Media & User Generated Content (like Tripadvisor) So Rethinking of Business Processess

All players have to add value

If a member of the distribution chain does not add value to the product or service, then his function is parasitic and, as a result, he will eventually disappear!

TRENDS:

De-intermediation (Internet)

Globalization

Integration (Horizontal, Vertical, Diagonal)

Increased Scale of Operations

Home-based Travel Agents (like ‘Tupperware Ladies’)

Role of Social Media & User Generated Content (like Tripadvisor)

So Rethinking of Business Processess

Chapter 6 Transit Regions and Tourist Flows

Transit Regions & Tourist Flows Demand Supply Intermediaries Influences from outside Influences on outside Transit Regions & Tourist Flows S.I.

Tourist Flows What happens when a road is redirected? Seasonality Intensity Direction Distance

Seasonality

Intensity

Direction

Distance

Chapter 7 Supporting Institutions

Supporting Institutions Demand Supply Intermediaries Influences from outside Influences on outside Transit Regions & Tourist Flows S.I. S.I.

Supporting Institutions United Nations : UNWTO Universities: Research Education & Training Consumer Organizations ..............

United Nations : UNWTO

Universities: Research

Education & Training

Consumer Organizations

..............

Chapter 8 External Environments

External Environments Demand Supply Intermediaries Influences from outside Influences on outside Transit Regions & Tourist Flows S.I.

External Environments Political Economic Social Environmental Technological Demographic September 11 Financial Crisis

Political

Economic

Social

Environmental

Technological

Demographic

Influence of Technology Trans Pacific Transport System: Range of Planes FIFTIES: 2 Stops in Nadi & Honolulu EIGHTIES: 1 Stop in Honolulu NOW: Non-stop Effects on Nadi and Honolulu? Effects on tourism between USA and Australia?

Technology: Influence on Tourism System Internet Changed production of tourism products Mass Customization Dynamic Packaging Changed distribution of tourism products User Generated Content (Blogs, Facebook, You Tube, ..) ICT: Processing power of chips much increased Data storage at extreme low costs Date transmission with enormous speed and bandwidth All this at still lower costs!

Internet

Changed production of tourism products

Mass Customization

Dynamic Packaging

Changed distribution of tourism products

User Generated Content (Blogs, Facebook, You Tube, ..)

ICT:

Processing power of chips much increased

Data storage at extreme low costs

Date transmission with enormous speed and bandwidth

All this at still lower costs!

The Tourism System Demand Supply Intermediaries Influences from outside Influences on outside Transit Regions & Tourist Flows S.I.

About Magiel Venema Lecturer (retired) at NHTV Breda University of Applied Sciences (Netherlands) Tourism Education Consultant with P.U.M. (Dutch NGO) Director of Edutour ( www.edutour.eu ) Tourism Textbooks Author and Publisher Training and Simulation Software for Tourism and Hospitality Education

Lecturer (retired) at NHTV Breda University of Applied Sciences (Netherlands)

Tourism Education Consultant with P.U.M. (Dutch NGO)

Director of Edutour ( www.edutour.eu )

Tourism Textbooks Author and Publisher

Training and Simulation Software for Tourism and Hospitality Education

Acknowledgements Unless otherwise specified, all illustrations are from the author’s archive; Other illustrations are either Public Domain or used under a Creative Commons License; More info: http://creativecommons.org.

Unless otherwise specified, all illustrations are from the author’s archive;

Other illustrations are either Public Domain or used under a Creative Commons License;

More info: http://creativecommons.org.

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