Homewood Travel and Tourism ALA (2007)

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 Homewood Travel and Tourism ALA (2007)

The unit is assessed by you sitting a 90 minute exam which is marked out
of 90, in short a mark a minute!

The unit is divided into 4 categories:

1. The nature and characteristics of travel and tourism and the travel
and tourism industry
2. The development of the travel and tourism industry
3. Structure of the UK travel and tourism industry
4. Scale of the travel and tourism industry

This revision guide provides an overview of these four areas that you
should use with your own class notes to revise for the exam.

The Nature and Characteristics of travel and tourism and the travel
and tourism industry

Definition of Tourism

You will need to know the accepted definition of tourism below:

“..the short term movement of people to destinations away from the

communities which they live and work, and their activities during their
trip, including travel, day visits and excursions.”

Understand the nature of the industry in that it is perishable and

intangible.

Perishable
A travel and tourism service can
not be stored for later. Your seat
on a plane or bed in a hotel are only
available once at a set time.
If they are not used they will
perish.
Intangible
You can not touch or test a holiday
or trip before you pay for it.
Tour Operators and Travel Agents
must convince the customer that a
real product or service (tangible)
will be provided.
They do this by using brochures,
virtual tours, ticket, receipt and
confirmation e-mail

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 Homewood Travel and Tourism ALA (2007)

Types and Purposes of Tourism

You must be able to describe each of the types of tourism below, give an
example and understand differences between them.

Tourism Type Description Example

Incoming Travellers arriving in a Arriving on your annual
different country than holiday in Madrid, you
their own. Known as would be an incoming
“inbound” tourism. tourist to Spain.
Domestic Travelling around your A family from London
own country. Known as going on a one week
“internal” tourism. coastal holiday to
Brighton.
Outgoing Travellers leaving their A British couple going
own country to go on a long haul holiday
abroad. Known as to New York or short
“outbound” tourism. haul to the Spanish
“Costas”
Business Travellers go abroad An English businessman
for the purpose of travelling to Munich
work. for a business
conference.
Leisure Leisure travel can be Leisure tourism cuts
as little as a day trip across all types of
to a park or beach, or tourism – holidays,
as much as world tour short breaks, long haul
lasting 6 months. trips.
Excursions An excursion is simply A day trip on a coach
a trip away to a tourist for older people to
destination. Brighton.
Adventure Are usually for the Ice climbing in the
purpose of challenge, French Alps. White
exploration, skills Water rafting in
development or thrills. Wales.
Package Arranged by a tour A family package
operator and includes holiday brought
transport and through a Travel Agent
accommodation. to the Costa Del Sol,
Spain.
Independent Opposite to package Common with gap year

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 Homewood Travel and Tourism ALA (2007)

travel, where people university students

book their holiday inter-railing around
themselves. Europe.
Visiting friends and People have always Bank Holiday Monday
relatives (VFR) travelled to visit visit to your cousins
friends and relatives. house in Manchester.

Characteristics of the Travel and Tourism Industry

You should be able to give examples if these characteristics in the UK

Travel and Tourism industry research into the operations of different
types of organisation.

1. The industry is private sector led

- Normally aim to generate a profit and increase market share
- Provide customer with products and services
- Often household names: Virgin Airways, P&O Ferries
- Large companies hold 50% of market

2. The majority of businesses in the industry are small and

medium sized but the industry is dominated by a number of
large organisations.
- Multiples – name given to the largest companies which have
multiple outlets such as Going Places Travel Agent, they tend
to dominate the industry. This has made travel and tourism
more affordable for customers but mass tourism can have
negative impacts on the environment, local culture and
smaller businesses who can not afford to compete.
- Small and medium sized enterprises (SMEs) can trade
globally from an internet site but tend to serve customers on
a regional or local basis. Usually fewer than 250 employees.
Tend to focus on niche markets such as adventure holidays.

3. The industry makes use of new technologies such as ICT

(Information Communications Technology.
- New technology has had a huge impact on the industry.
- The internet has changed the way we book holidays.
Independent travellers are now happy to book individual
elements direct using online booking systems or via email
with SMEs i.e. hotels abroad and low fare airlines.

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 Homewood Travel and Tourism ALA (2007)

5. The industry is vulnerable to external pressures

Currency Fluctuations: Case Study: USA

- the value of the pound to the dollar is currently very
favourable for the British visiting the USA, meaning they
will get much more for their money.
http://news.bbc.co.uk/1/hi/business/6567821.stm

Government Legislation: Case Study National Park Act (1949)

- the act created Britain’s National Parks. In National Parks
development and impact of tourism is controlled, so that
negatives impacts on the environment are minimised often at
an economic cost to tourism businesses.

Climate Change: Case Study Maldives

- it is predicted that the paradise islands of the Maldives will
be under water with 100 years from the possible impacts of
Sea Level Rise. Sea Level Rise is caused via the melting of
the polar ice caps from global warming.
http://news.bbc.co.uk/1/hi/world/south_asia/3930765.stm

War and Civil Unrest: Case Study Sri Lanka

- the ongoing Civil War in Sri Lanka has reduced tourism by up
to 40% in 2007. As a result many airlines have suspended
flight to Sri Lanka. Many tourist areas have been destroyed
as the LTTE group try to destroy the economy of the
country.
http://en.wikipedia.org/wiki/Tourism_in_Sri_Lanka

Terrorism: Case Study 9/11

- the events of 9/11 have shown vulnerabilities in the global
travel and tourism industry. This has been in the form of a
drop in the amount of people flying due to fears for their
safety and security.
http://news.bbc.co.uk/1/hi/in_depth/world/2002/september_11_one_ye
ar_on/2204980.stm

Economic Climate
- The current strong pound and high wages in the United
Kingdom has led to a growth in both domestic and outgoing
tourism. However if the economic climate changes in a

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 Homewood Travel and Tourism ALA (2007)

negative way the industry can be severely hit because people

will cut down on spending money on non-essentials often
linked to leisure, travel and/or tourism.

Impact on Host Environment: Case Study Peak District National Park

- impacts of travel and tourism can be both negative and
positive. Negative impacts in a national parks are often in
“honey pot” areas:
- car parking at popular spots can damage verges and spoil the
views
- congestion on the approach roads can annoy local people and
bring pollution
- the constant flow of visitors can erode pathways
- visitors may bother animals in their natural habitats
http://www.peakdistrict.org/tourism.pdf

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The development of the travel and tourism industry

You will need to know the key stages in the development of the travel and
tourism industry with a particular focus on post Second World War
developments and their effect of the industry.

Since the end of the Second World War (1945) the Travel and Tourism
industry it is regarded as the largest industry in the world. In 1998 it
was estimated UK residents took over 60 million holidays both at home
and abroad. This growth can be explained by the following factors:

1. Motivating factors – are the reasons why we want to go on holiday.

These can be two types “intrinsic” (from within) motivation, such as
having a burning desire to see the world and “Extrinsic” (from
outside) motivation such as being pulled towards a place that we
may have seen on television.

2. Enablers – are closely linked to motivating factors but are

different. This factors allow us to travel:
a. level of disposable income (money available for travel)
b. level of education (knowledge of the world)
c. level of mobility (ability to get around e.g. car, airport location)

3. Socio-economic factors – it is estimated that there are now 25

million cars on the road in the UK, which is nearly half the
population. The increased popularity of the motorcar has led to a
decline in the use of public transport:

The impacts have been:

1. Congestion and pollution with no alternative as cost of
public transport is high
2. New products emerged to suit car owners e.g. caravan
holidays
3. Access- transport network has developed to allow access
to countryside

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 Homewood Travel and Tourism ALA (2007)

4. Technological growth – in 1969 the Boeing 747 was launched. The

aircraft had the following impacts on the package market:
1. It was possible to fly further in less time, thus making
long haul destinations more accessible
2. Increased capacity (400 seats) meant the price per seat
was reduced this lowering prices
3. As jumbo jets were used more the smaller aircraft were
available for charter operations.
4. Long haul travel was less exhausting and as a result
business travel increased.

5. Product development and innovation – in the 1970 the travel and

tourism industry saw huge growth in the package holiday. Resorts
on the Spanish coast needed new accommodation to support the
tourist boom. That factors influencing this were:
1. lifting of government restriction allowed tourists to take
more than £50 abroad
2. Longer paid holidays encouraged people to take a second
holiday
3. Boeing 747 introduced reducing airfares further (see
above)

6. Changing Consumer needs and expectations – in the 1970’s the

demand for a second holiday grew This resulted in the 1980’s of
the development of the short break, in 2000 Thomas Cook
reported a 30% in short break holidays. The demand grew because:
1. Due to increases in leisure time
2. Due to rises in disposable income

Budget airlines have made European destinations even more

accessible for the traveller. There aggressive marketing approach,
low costs and ticket less travel is changing the face of air travel
today. The development has caused concern to major airlines such
as British Airways who appear to be losing money.

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 Homewood Travel and Tourism ALA (2007)

Structure of the UK Travel and Tourism Industry

You will need to know about the different sectors that make up the UK
Travel and Tourism industry shown below.

1. Transport principals
2. Tour Operators
3. Travel Agents
4. Attractions
5. Accommodation providers
6. Ancillary Service Providers
7. Support Services

You will need to identify key organisations in each sector and describe
the products and services they offer and their objectives and values.

The industry is often divided up into the private and public sector.

Private Sector Public Sector

Companies trade for a profit
Dominate industry
Range of scales from independent
travel agent to International Tour
Operator
Not profit orientated and provides
a service
Funded by local or national
government e.g. DCMS (Department
of Culture Media and Sport)

Transport Principals – there are 4 main principal transport modes,

aeroplanes, ships, trains and motor vehicles.

Air Travel

There are two main types of airline travel “charted” and “scheduled”
flights:

Scheduled – fly to a published timetable on fixed routes e.g. London to

New York (British Airways). Ryanair and Easyjet offer no-frills
scheduled flights to less busy airports giving the major airlines real
competition. No-frills airlines offer less services, fly to airports with
lower landing fees and turn aircraft around quicker which all helps reduce
the prices of flights.

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 Homewood Travel and Tourism ALA (2007)

Chartered – fly to specific destination for tourism purposes e.g.

holidaymakers to Spain from the UK. Therefore often seasonal in nature
and belong to the larger airlines e.g. Monarch and Air 2000. As no set
timetable often fly at unsocial times.

Sea Travel

Ferry Companies – British ferries faced new competition when the

Channel tunnel opened in 1994 and today by the budget airlines. Ferries
have improved the quality of onboard products and services they offer,
reduced prices and introduced faster vessels in order to compete.

Cruise-ship companies – cruises are no longer for the rich and famous.
With mass market operators now owning many cruise operators it is one
of the largest growing markets in the travel and tourism industry.
http://news.bbc.co.uk/1/hi/uk/4552269.stm

Rail and Road

Car holidays in and from the UK tend to be to visit friends and relatives
and the annual holiday trip to Europe. Many families now hire a car on
holiday to give them independence when travelling around from companies
such as Hertz and Avis.

Rail use in the UK is in decline with a recent history of accidents, lateness

and staff strikes. Much investment has come from the UK government to
raise standards to compete with the rest of Europe.

Tour Operators

Tour Operators are organisations that produce package holidays

(transport, accommodation, transfers and ancillary services). The
package is then sold directly to the public (direct sale) or via travel
agents.

Mass-market operators – offer a wide range of products at a variety of

locations e.g. TUI

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Independent operators – have created niche markets of special interest

holiday packages. Often committed to a high level of customer service
and selling the produce directly without using a travel agent, so the
internet has helped their survival.

Travel Agents

Travel Agents – sell travel products and services on behalf of others, and
therefore do not produce anything. They receive commission for selling
products from the principals e.g. tour operators. They also offer ancillary
services such as car insurance, car hire, airport car parking, currency
exchange to increase their commission levels (income). Technology has
helped travel agents by giving them fast communications and reservation
systems, but has hindered travel agents by the internet offering direct
access to operators and transporters making travel agents redundant.

Multiples – a chain of travel agents with multiple outlets e.g. Going Places
and Thomas Cook. Multiple travel agents dominate the sector and are
often owned by a tour operator (integration).

Independent – often one shop, they do not have the purchase power of
Multiples but may offer more choice as not tied to one agent,

Attractions

Attractions represent what a destination has two offer. There are two
main types “man made” e.g. Thorpe Park and “natural” e.g. Grand Canyon
attractions. The London Eye is UK’s top paid attraction.

Accommodation

There is a huge variety of accommodation available in the travel and

tourism industry. These can be divided into two types commercial and non
commercial:

Non-commercial Commercial
Youth hostels Hotels and motels
Local authority campsites Guest houses
Home exchanges Bed and Breakfasts
Staying with friends Villa rentals
University halls of residence Hired Caravans/motor homes

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 Homewood Travel and Tourism ALA (2007)

Hotels dominate the accommodation sector. There are now many chains
of hotels such as Best Western who aim to provide the customer with a
familiar environment at as consistent standard whatever hotel they stay
in.

Ancillary Service Providers

When people book a holiday they may need to but extra services, these
are called ancillary services:

• Travel agents selling travel insurance as part of a package

holiday
• Airport car parking, provided by private companies
• Local taxi and minibus companies
• Limousine and chauffeur services for business travellers
• Car hire, whether arranged independently or via a travel
agent
• Bureaux de Change in travel agents, city centres or airports

Support Services

Support services are the extra services that are provided by the tourist
organisations and the services provided by outside organisations to
support the industry:

• local tourist boards providing training for hoteliers

• Marketing consultancies offering business advice to local
tourist organisations
• Employment agencies providing seasonal staff to a tourist
attraction
• Laundry services for hotels
• Printing if leaflets, timetables and menus
• Entertainers for clubs, bars and hotels
• Technical support for computer systems

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 Homewood Travel and Tourism ALA (2007)

Horizontal and vertical Integration

Since the 1980’s large tour operators have tried to dominate the market
by integrating with other travel companies. Thus tour operators have
brought hotels, airlines, travel agents and other tour operators. In doing
so the own all the components of the package holiday that they sell to the
public. Integration can be both horizontal and vertical.

Horizontal Integration – if a tour operator buys another tour operator or

business at the same level on the chain of distribution.

Vertical integration – occurs when two companies at different levels on

the chain of distribution merge. This can be backwards integration (tour
operator buys a hotel) or forwards integration (tour operator buys a
travel agent.

Example case study:TUI

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 Homewood Travel and Tourism ALA (2007)

Chain of Distribution

The distribution chain above shows how travel and tourism services are
distributed to the customer, it also shows how each area is
interdependent and interrelates with each other.

Direct Sale – when products and services are sold directly from the tour
operator to the customer.

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 Homewood Travel and Tourism ALA (2007)

Scale of the travel and tourism industry

You will need to learn to interpret statistics presented to you to

determine conclusions about the scale of the travel and tourism industry
locally, nationally and globally in terms of visitor numbers, visitor
spending and levels of employment.

Visitor Numbers/Spending

Inbound Tourism Domestic Tourism Outbound Tourism

Inbound tourism Domestic tourism Outbound tourism is
generates money for generates money for money spent outside
the UK economy. the UK economy. UK economy.

London is the most Currently decreasing Outbound tourism

popular destination for due to increase in continues to grow and
incoming tourists. outbound tourism. has higher spending
than UK inbound
Inbound tourism to UK: UK residents spend tourism. This is a
France – most visitors more than inbound concern for the British
USA – highest tourists although economy who are trying
spenders. inbound tourists have to encourage more
considerably less inbound tourism and
visits. domestic holidays.

Employment

There are many different types of jobs in the travel and tourism industry
and they vary from sector to sector.

• peak period in summer for many organisations who require

extra staff (seasonal nature of industry)
• customer service industry – shift work and unsociable hours,
busiest times are the weekends

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