INTRODUCTION : OVERVIEW OF THE INDUSTRY
Tourism is one of the greatest growing industry in the world. All over the world, it is the key drives for economy and supports million of jobs and generates annual revenue. It involves travelling away from home for leisure or business purposes.
It involves a person going outside a usual environment for not more than one consecutive year. In this assignment I have summarized the key historical developments in the travel and tourism industry. I have also described the structure of travel and tourism sector.
KEY HISTORICAL DEVELOPMENTS
Travel and tourism has been existed in many countries, even during the pre-historic times, though not functioning as an industry itself. It was an important feature since the beginning of the civilization. In the pre-historic times the caveman travel for gathering food, hunt for animals etc. The purposes of travelling vary from purposes of trade, education, accommodation, religion. Our present times are connected to the ancient times. Few events make up religious festivals for e.g. in the Ancient Greece there were almost 200 days set aside for celebrations. In Rome people used to travel to get away from the burning heat of Rome. Many Muslims used to travel for religious purposes such as Hajj to Mecca.
The growth after the Industrial Revolution has been described by many as the leisure boom or leisure explosion. The below section will be discussing of the key historical development in the travel and tourism industry.
The earliest times have been started by the Egyptian and Babylion times. In the 6th century a museum was opened to the public in Babylon. It was a museum which consisted of historic antiques and many more things. People visited Egypt because the pyramids attracted them and the festivals also proved as an attraction. As there were so many people who visited these places, services like souvenir shops, food and drink vendors, guides, prostitutes etc.
There were Greeks, who wanted to travel to healing gods, but the roads were not constructed there as all the states were independent so Greece had no authority for construction of roads, hence the travelling was done mostly by water. During the start of the 5th century BC, various destinations like Sparta, Athens and Troy became a good tourist destination for the purpose of leisure, travel, sports. Athens had become popular for Parthenon and inns in the temples were constructed, there were also seaports constructed in major towns for accommodation of people who would stay overnight. The only unsatisfactory part was that the innkeepers during that time were unfriendly and the facilities were very basic and not of good quality, there were no heating facilities, the toilet facilities were not available and above all, everything was self serviced. The guides during those times were of two types, there were one who used to escort the tourists around the attraction or site they were known as periegetai and other ones are those who were paid for providing information, they were known as exegatai. For the above destinations, there were guidebooks which provided information about the destination. The advertisements at that time were in the form of telling directions to the inns and other places.
During the times of the Romans roads were developed because of wars and because of trade. The upper class enjoyed the Gladiators as part of their entertainment. As there were no foreign borders between England and Syria, it was during the Roman period the international travel became famous due to favorable conditions in travelling. Roman Coinage was the common currency accepted everywhere and Latin was the language spoken all around. The Romans travelled to places like Troy, Greece, Egypt, Sicily, Rhodes etc because of the developments here.
Bureaucracy also played an important role. Many people were required to have an exit permit from the sea port and these services were charged for services. Everyone had to go through a customs declaration and the souvenirs were subjected to import duty. Due to accommodation, catering services and road transport, domestic tourism flourished. Domestic tourism was popular in Bay of Naples, Cumae, and Puteoli.
Because of the war during the Roman period, the soldiers got divided which led to trips abroad to visit friends and relatives (now commonly known as VFR).
As the Roman Empire ended the middle ages were next in the line. This age was referred to as Dark Ages where travel became more dangerous and difficult and less attractive. Its origin is from travail which means painful and laborious effort. Due to this leisure travel was undertaken near home. However many people travelled like the adventurers and merchants for fame and to avail to new opportunities. Many minstrels travelled to earn a living. These kinds of travel were for business or some obligation, but not for leisure purposes.
As Christianity rose, it gave rise to the word HOLIDAYS as it comes from the 'Holy Days' representing special religious occasions. For e.g. the day before Christmas people should not work and rest during these days as a mean of celebration. Many a people take this as a break from work rather than for travelling purposes. These kinds of holidays were much more common before than now. In 1830, there were about 33 saint days in the holiday calendar. Religious pilgrimages were another reason for travelling in Middle Ages. Chaucer's tales of the pilgrimage to Canterbury is a good example which tells us travelling during the Middle Age was not that bad also.
EARLY TRANSPORT METHODS
Before the 16th century, there were three types of ways by which people travelled people travelled by foot, ride a horse, or they could be carried in a carrier wagon. These carriages were very uncomfortable because they were not with springs and the roads were also not constructed in a proper manner they are not surfaced well and are consisted full wayfarers making the journey unpleasant.
Originated from Hungary in the 15th century, the sprung coach was developed; it made the travel experience quite pleasant to a great extent. It offered a great comfort to the travelers.
In the 18th century, the introduction of the turnpike road improved road surfaces which enabled coaches to travel for longer period of time. However it still took 10 days to travel from Edinburgh to London. In 1815 the discovery of tarmac road surface revolutionized the road systems of Europe and public transport started in the 19th century.
From the early 17th century, new forms of tourism developed as a result of freedom for learning during the Renaissance period. Under Queen Elizabeth 1, the grand tour was organized for young men who encouraged them to go to continents to finish their education. This tour was not only for aspiring gentlemen but also for also the sons and daughters of the rich. The tour would last up to 3 years, the main purpose apart from travelling and visiting sites of Europe was to educate and broaden the minds of young people making the Grand Tour an educational tour. Other reasons that have emerged are pleasure, social activities, health, entertainment and leisure.
DEVELOPMENT OF SEASIDE RESORTS AND SPA TOWNS
Seaside resorts and spas were basically constructed because they proved beneficial to people's health. E.g. Scarborough was developed as a tourist resort in the 17th century when the spa waters were sold as mineral cure for leprosy and other diseases. Seawater was also perceived as having healthy properties.
Mass travel to Sea side resort by the working classes did not come into picture until the late 19th and early 20th centuries, when the rail networks came into force from cities to towns to coastal area, many people started visiting these resorts. Due to increase in the level of accommodation and entertainment facilities people like staying overnight and eventually the day trips converted to longer holidays for e.g. Margate and Brighton.
The structure of the society and the way of living was changed to a great extent after the 18th and 19th centuries. It is a society which is basically based on principles of urbanization and industry. There were large changes particularly with the arrival of steam power. Steam power was used to drive large scale machinery, which made large scale production easy and possible. Many people moved from rural areas to work in factories in towns and cities had to work long hours, they received low wages, and poor living conditions and unhealthy environment. Housing was poorly built, cramped and unsanitary.
Only the wealthy upper classes were the ones who could afford the time and money of leisure activities, during the industrial revolution. From the 1830 onwards, social reforms began to concentrate to reducing working hours, improve pay and conditions and increase opportunities for education. During 1750's the average working day was 14 hours, but the industrial revolution gave time to people for their leisure activities. Therefore from this era the leisure activities from the working class emerged. During these breaks, people wanted to relax and escape from their normal harsh conditions and dirty environment. Many people went to the rural area for relaxation and back to the urban area for work. Hence industrial revolution is regarded as a major step for the development of tourism.
INTRODUCTION OF PAID HOLIDAYS AND BANK HOLIDAYS
Industrial towns had periods which were known as wakes and revels when all the factories were closed and many workers would spend their days at the nearest coastal resort. In the starting, these holidays were unpaid but eventually these led to paid holidays. During the mid 1860 , trade union activity brought reduction in working hours and introduced half day to be followed on a Saturday in many trades. Sundays, Christmas days, Good Fridays were also holidays. The BANK HOLIDAY ACT 1871, enabled four holidays to the workers, Easter Monday, Whit Sunday, the First Monday of August and Boxing Day. This was regarded as the first act of the Parliament in the favor of increasing leisure times from workers.
However, it was not until the Holidays with Pay Act 1938 that paid holiday became a norm. This is nowadays referred to paid leave, and many workers since the introduction of this Act, had provided the working population to take holidays.
These holidays bought lot of time for merry making and feasting and also to visit friends and relatives.
DEVELOPMENT OF SEA AND RAIL TRANSPORT
Development in different modes of transportation marked the growth of the tourism industry in the 19th and 20th centuries. Initially it was only the growth of rail networks which increased opportunities for mass tourism.
Island nations such as UK have water transport as their key feature and many cities in the UK are ports. The invention of steam changed the water transportation system dramatically. Initially the steam ships were developed only for cargo, but later passenger ships were introduced. London, Gravesend, Margate and other resorts on the Thames were areas in which passenger steamships were operated first.
Piers were built on the major resort to land their passengers, and very soon paddle steamers became famous in the traditional seaside resort in Britain.
As the resorts grew piers became a focal point for visitors.
The steamships had a short life as the railways overtook in few years. The railways made travel in Britain easier and cheaper. The first all passenger rail link was to be built between Canterbury and Whitstable in 1825 and during the same year Liverpool and Manchester Railway succeeded in covering 31 miles between the two Lancashire cities in just an hour and a half. Initially passenger rail travel was only used by businessmen as it was expensive. Rail travel became a preferred mode of transportation for it provided a fast and efficient transport system between urban areas and coastal resorts. Due to its great expansion large number of people could go to places where they want easily. Accesses to inland tourist attraction became possible, for e.g. visitors to Hampton Court Palace was 122,000 in 1840 which increased to 370,000 after the developments of train.
Butlin and Warners became fathers of the holiday camp, which still survives to this day. Butlin worked on a idea that he would take a small profit from many people than a large profit from a few. Holiday camps flourished before the outbreak of WWII, the first camp opened by Butlin in 1937 was Skegness in Lincolnshire. Two years later there were around 200 camps offering a self serviced holidays to around 30,000 per week. The main motto or concepts of these camps were if the children are happy the parents are happy too. These camps provide entertainment and activities for both parent and children at a low and reasonable rate. Holiday camps have changed their names and image in recent years.
POST WAR DEVELOPMENTS
Establishment of tourism organizations
In the late 1950s the establishment of British Travel Association was given the role to encourage the development of hotels and resorts. In the year 1969, the government passed the Development of Tourism Act, establishing the English, Wales and Scottish Tourist Board.
Henery Ford developed his first T model car in the USA in 1908. It was produced in abundance in the factories at a low cost and later it also became available to the masses for travel by land. The development of the road network and increasing car ownership in the 20th century has increased opportunities for domestic tourism. The use of private car provided individuals with more of freedom and flexibility in their leisure time. The number of private cars in Britain rose from 2.3 million in 1950 to 23 million in 1999. However there were disadvantages of this also like drop in the use of public transport, and problems like pollution, congestion and loss of land for the roads. Due to these problems, cars were banned in some areas for some time.
As the road system has developed so have the industries associated with it. Organizations such as, Moat House, and Granada have developed facilities on the road. Nowadays people stop on the road to grab a snack or for small things hence convenience stores are helpful.
The WWII had given people the taste to travel abroad hence it stimulated aircraft production and pilot trading. Technological advances by aircraft production made farther places easier to reach. The development of jet engine made the travel comfortable and fast compared to sea travel. Entrepreneurs realized that there were opportunities to offer holidays to foreign destination as the potential of jet engines increased. These holidays contained accommodation, catering, transport and resort service all in one package. This encouraged the Britshers to go to popular destinations such as Greece, Spain, Italy etc. Boeing 707 jet airline service led to growth in chartered flights which were combined with accommodation, transfers etc. There were many advancement like the Boeing 747 jumbo jet, they have more seating capacity and fly to new destinations. These aircrafts are bigger and comfortable to travel, they were mainly used for business travel.
Growth of package tours
The first seeds to be sowed of mass tourism was by Thomas Cook. He organized first rail excursion to Leicester to Loughborough for 570 members in 1841. Ten years down the line, he organized a trip to Hyde Park, he had booked things which we find in holiday packages today. He had booked a hotel, train in which English tea and biscuits were served, hot bottles for all, and the best thing of all were the guides available to help his client on each step. Paris International Exhibition gave Thomas Cook the opportunity offer continental trips. Cooks trips became more adventurous and popular. His company was the first travel agency and still is a leading agency in the UK, making him father of tourism.
There were new technologies introduced, the convenience of all inclusive arrangement in coupled with increase speed with the new aircrafts bought proved as boom.
Factors facilitating growth of tourism
The following are the current factors that increased consumer demand for travel and tourism activities.
International tourism expanded due to the development in jet aircraft and the computer technology. Nowadays, aircrafts, ships, trains carry a huge number of passengers to their choice of destination in a safe and cost effective manner.
The development of computers, brought reservation systems, the CRS (computer reservation system) which is used today by travel agencies so that they can have direct contact with the airline. The most famous and widely used CRS are Galileo, Sabre, Worldspan, and Amadeus. Global Distribution System are the major CRS operation that book and sell tickets of multiple airlines. Modern GDS typically allow users to book hotel rooms and rental cars as well as airline tickets. Booking online is much more cheaper and convenient hence its usage has grown in these recent years. Technology has now introduced e-ticketing, which refers to ticketless travel.
Time available for travel and tourism activities
Increased in paid holiday entitlement for those who are employed gave them more time for leisure. In the year 1938, it became a legal requirement for employers to give employees paid holidays. A reduction in working hours meant more time for leisure activities. In the 1950s, the average working week in the UK was 50 hours. The typical hours in a normal working week now range from 37-40 hours. The use of labor saving devices like dishwashers, photocopy machine, microwave, oven both at home and workplace saved energy and time, therefore more time for leisure.
Many people like the retired, unemployed have lots of free time for e.g. to spend long holidays on the cruise. The number of retired people has increased in the UK, therefore many tour operators concentrate on over 50s market, as they are much wealthier than young people.
Money/levels of personal disposable income
Every person needs basic commodities and after paying for their personal expenses and necessities, like medicine, food, rent the amount of income left or the disposable income maybe spent on leisure times or holidays. The disposable income of UK rose over 60% between 1971- 2007 which in turn increases the income for travel and tourism.
More leisure time, car ownership and higher income encourage people to travel more often, particularly for overseas holidays. Few people like the unemployed, single parents, pensioners, and who are low on income do not travel.
Freedom of movement/improved public transport and personal mobility
The development of cars, buses, and tarmac road surface increased the mobility of many people. More mobility in association with more holidays meant people could go further for leisure and recreation. Public transportation such as coaches and trains, improved infrastructures, the opening of the Channel Tunnel linking England and France had contributed to improve mobility.
Car ownership was the greatest factor that increased tourism demand. The number of cars in UK increased by 5 times between 1951 and 1970 and by 10 times by 1951 and mid1990s. In today's time there are about 20 million privately owned cars in the UK and the survey shows us there are around three quarters of the population living in the UK visit the countryside at least one occasion per year with their privately owned car.
Changing consumer needs and expectations
The needs and wants of a consumer change with the amount of exposure, from television and other forms of mass media. Nowadays people look for more and more opportunities to travel. As the conditions of the society change people's expectations change. Our society is more prosperous, fitter now which gives us an opportunity for better education and better jobs and better status in life. The more a person is experienced and educated, the more complex are his needs and wants. Things which are needed and are popular in today's travel are the quality, eco-tourism popularity, low budget airlines, growing 50s market who prefer cruises etc. No matter what the trends or fashion is prevailing in the market, the tourism business has cater to all needs and wants of people, as different people have different needs.
The infrastructure of the roads and buildings have changed tremendously. The roads in past times were crackly and had uneven pavements, which made it very difficult for caravans to walk, and even for that matter, it made it difficult for people to walk. The buildings in the previous times were not very long and big in size, but now if we see we have buildings with tremendous height. For e.g. the Burj Dubai in Dubai
The typical image of a tourist destination is a resort town set in middle of attractive scenery with a variety of day trip opportunities with easy access. Eventually as time passed people got bored of beaches and sun tans. During the 70's and 80's new kinds of tourist destinations came up. They are based on new types of products and create new approaches in marketing. The new destinations have created new attractions like muesums, botanical gardens, theme parks, waterfront development(e.g. the world), artificial islands(e.g. the Palm Islands in Dubai), zoos, wild safaris, attraction hotels(e.g. Atlantis), sports and cultural festivals.
STRUCTURE OF THE TRAVEL & TOURISM INDUSTRY
Travel and tourism industry is fragmented industry, this industry employs around 1.5 million people who help to provide a wide range vast range of product, services and facilities to cater to all kinds of tourists. The tourism industry is made up of numerous components which compliment each other beautifully. They are closely linked, but can function induviually also. The structures main aim is to where to go, how to get there, where to stay, and what to do. The structure is divided into three categories the promoters, producers, and distributors of tourism products.
Producers are organization that provide product and services, which constitute the holiday package. They can be divided into accommodation, transportation and ancillary services.
The success of a tourist destination depends on its attractions, accessibility of the destination, and the facilities it provides. Attractions are the main reason why people visit a destination, either for education, leisure, stimulation and experience. If there would be no attraction, people would not be excited to see the destination.
History, geology, geography, culture are the main features on which the attractions are based. Attractions can be classified either as a site attraction (country, region, city or resort, or a specific building or place such as Canterbury Cathedral), or event attraction (such as festivals, sports events). Site attractions can be divided into manmade or natural. A destination can have a mixture of both natural and man-made attraction. For example, Chatsworth House is a built attraction, but its grounds are natural.
Taking Dubai as an example, visiting small villages and meeting the local people (e.g. Baniyaas tribe) and seeing how they live in the desert is already an attraction for tourists.
These attractions are managed by the Natural England in the UK. They usually free of cost and don't require admission fee.
a. Coastlines and lakes- These are typical traditional tourist attractions, dating back to the development of spas for its healing qualities and tanning at the beach. It is still popular in today's world.
b.Climate- climate can be an attraction in the sense people from the Northern Hemisphere travel to the south during the winter months, where the climate is moderate and there is 'winter sun'. A good example can be Dubai.
c. Countryside visitor attractions- these kinds of attractions are very popular in the UK. It can prove as a great attraction for the people in Dubai, as people living over here are in the cities and would like to go to the country side for some fresh air and activities like picnic, walks etc. . There are 10 national parks in the UK covering 1/10 of the land area. Other kinds of attractions, other than national parks are:
Areas of Outstanding Natural Beauty (AONB)
National trails and long distance paths
They are mainly built on the purpose of attracting tourists such as theme parks, entertainment complex, and sporting events. The National Trust or English Heritage usually manages these attractions. If they are built for a purpose, the entrance should be free depending if it's privately or publicly owned.
These are artificial areas which are filled with an entertainment package for both youngsters and adults. They mostly include rides with high technology, amusement arcades, adventure playgrounds, computer simulations, and laser games. Some theme parks have wildlife in them to attract tourists. Many theme parks have admission fee as they are privately owned and invest millions of pounds for their technology. Some of the famous parks in are:
Alton Towers, Staffordshire
Chessington World of Adventures, Surrey
Thorpe Park, Surrey
Drayton Manor Park, Staffordshire
Wild Wadi and Dubailand (Dubai)
Disneyland and Six Flags (chain of theme parks)
They include nightclubs, pubs, discos, opera houses, cinemas, concert halls etc.
These can be cultural events, sports events, and traditional events. Egs of cultural events can be The Notting Hill Carnival in the UK. Traditional events can be marriage and sports event can be FIFA World Cup, Olympics etc.
These places attract tourists because of their cultural diversity. They are often related to art, music or famous people. For e.g birth place of Shakesphere in Stratford-upon-Avon and Tate Gallery.
Museums and galleries
Museum is an institution which collects, preserves the material and evidence for public benefit. They are visited by many people all over the world for educational or cultural reasons. They are mainly publicly owned. Most museums and galleries are found in London.
Accommodation and catering
Accommodation can be divided simply into serviced and self-serviced or self-catering accommodation.
Serviced accommodation- will mostly include some meal facilities either bed and breakfast, half-board (dinner, bed and breakfast), full board (bed, breakfast, lunch, and dinner), or all-inclusive (all meals, snacks, and drinks). Examples are hotels, motels, inns, pubs, guesthouses, lodges etc.
Hotels - the hotel industry in normally owned by private sector, and consist of large hotel chains. It offers facilities for both leisure and business facilities, as well as for middle class and upper class. An e.g. can be Hilton Hotel Group, it is franchised that is the franchiser pays Hilton Group to use their name but in turn they must follow corporate standards and policies. This is used so that Hilton has same consistency throught the world.
Guest accommodation they are referred to local people who wish to rent a part of their house for extra income. It gives opportunity to the tourists to stay at their home and experience the culture. They include farmhouses as well; this kind of accommodation is popular in France and UK.
Serviced accommodation can be categorized in a number of ways including:
- By number of bedrooms:
- Small (ten rooms or fewer)
- Medium (11 to 50 rooms)
- Large (more than 50 rooms)
- Less than
Self-serviced accommodation does not always include cooking facilities although there are many cottages, chalets that will provide this facility. In the Meditterian Resort, self service includes o 'room basis only' where visitors have to make their own arrangements for meals as there are no catering facilities. There are also other types of accommodation that are self serviced like bus hotels, yachts, mobile homes, youth hostels etc.
This kind of accommodation are also graded, by the star system. They are popular in destinations like Greece and Turkey, where dining out is not expensive. It provides flexibility to the tourists and is especially good for big families as they don't have to book separate rooms and all can stay in one apartment and in terms of food all the choices are entertained.
Catering services Self-serviced accommodation- these mainly include endless serving of food and drinks. . Catering facilities which can be found in towns and cities:
Restaurants and Cafes
Bistros and wine bars
Fast food and takeaway outlets
In UK transport companies are privately owned. Transportation plays an important role in the travel and tourism industry. Without the ability to get to a destination easily, there would be limited opportunity for travel and tourism, as an activity, to happen. Travel can be further divided into the following different modes of transport. Scheduled and chartered flights
Main international travels by people all around are made by air. Air can be divided into scheduled and charters flights. Sheduled flights are which are for the public and have a specific time to fly on, they have a particular time table to follow. They are known as flag carrier to a particular country like Emirates for Dubai, Swiss Air for Switzerland etc. They are for business and travel and provide food and drinks.
Chartered travel is different, in this a plane is booked for a particular company, it maybe owned by the company or booking might be done for the company. They fly only on certain days as per the demand of the company. All airlines in the UK are privately owned, and the largest in the UK is British Airways flies to over 200 destinations and offers 4 different types of cabin service (economy to Club World). Other major airlines in the UK include British Midland and Virgin Atlantic. Emirates Airlines is the principal airline in Dubai
The first half of the 20th century was the peak time for rail travel as cars were not common and trains were quick and reliable. Mostly the European travel was by rail good train network serviced ski resorts and tourist cities. There are now many privately owned rail companies within the UK, including Virgin, GNER, Eurostar, Thames Trains, and Central Trains. . Within this category of travel it is also appropriate to include the London Underground, Docklands Light Railway, and Shuttle Channel tunnel services, which take passengers under the English Channel in approximately thirty minutes through the Eurostar from London Waterloo and Ashford in Kent to Paris or Lille in France or even Brussels in Belgium.
The private ownership of cars became popular as people needed their own time. There were rent a car service, which were provided by many companies like Holiday Autos, Hertz, Avis, and Europecar. They provide services such as drop and pick up, chauffer driven cars, one way rentals, luxurious limousines etc.
Coach travel was very popular in the UK, which dominated the main routes and local bus company which control services within towns and cities. It is popular due to low prices, door-to-door travel when touring, and no baggage or transfer problems. It is a hassle free journey for all. Other ways of traveling by road include buses, taxis, bicycles, caravans, and motors.
This include organizations that provide extra services which can be merged with the packages or can be utilized separately. Examples can be excursion operators, travel agency, transfer agents, currency exchange, airport packing, rent a car, cruise and fly drive, transfer agents, travelers cheques etc.
They are institutions that create a holiday by negotiating contracts with other parallel services like airlines, accommodation, coach companies, attractions, transportation and all put together make a successful 'package holiday'. The package is priced according to the target market and then will be printed in a form of information like brochures etc. A consumer can book a package with making a little change according to his convenience. The tour operators can even design new package according to the needs of the consumers these kind of packages are named 'tailor made packages'. Nowadays many small companies merge with each other to form big companies or many small companies merge with big companies for e.g. Thomas Cook and My Travel merged in 2007, as well as TUI and First Choice, forming two dominant companies instead of four.
As the tourism industry in a diverse and big industry, there are a lot of changes prone to happen; hence the brochures must be out well in advance so that the tour operators can inform the potential consumers and travel agents about the changes. The travel agents inform the tour operators about the booking done by the customer and hence the tour operators give them confirmations and invoices to travel. Many tour operators who can function individually don't contact travel agencies like Portland which is a part of Thomas. They sell their packages on the phone or internet directly to the consumers. The kinds of tour operators are:
Outbound tour operators
Mass market tour operators- their focus is mainly on leisure travel market. Main companies like Thomas, First choice compete on price as they get concession on the number of people traveling. They also divide their package on the basis of transportation, age groups, destinations etc. Their package usually includes:
Holidays for young people
Holidays for families
Holidays for retired
Specialist tour operators- these companies specialize on a specific feature like either a destination or the target consumers. Form e.g. Balkan specializes in holidays to Bulgaria. Few tour operators specialize in activity holidays that are their packages are mainly for activities in each age group.
Domestic tour operators
They are tour operators who offer packages within the boundaries of the country. Very often there are no transport facilities with this kind of package as people make use of their own private car. The bookings are usually done in direct contact with the customers and travel agencies are not included.
Incoming tour operators
They specialize in packages for overseas visitors, who want to pre book their travel and accommodation within a country. They provide facilities like accommodation, airport transfers, package holiday based on different themes, cultural heritage or city breaks.
Sources of income
Package holidays- 55% of the income
Specialized holidays- 15% of the income
Interest - earned through deposits paid nine months in advance
Commission - insurance, car-hire, flight-only sales, and excursions
Cancellations or amendments charges made if bookings cancelled
Foreign currency rate (gbp) is favorable
Duty - free goods can be a good source of income when the tour operator has its own airline
A travel agency is known as the retail part of the distributors group. Travel agency differs from tour operators as they do not make the packages but act as an intermediary between the tour operators and consumers. Travel agencies are paid on commission basis, for selling the tour operators product, this ranges from 10-15% for packages, 35% for transportation, mainly car hire, 40% or more for insurances. They are divided into retail and business.
Retail travel agencies
These agencies sell packages which are for leisure purposes. From the total number of tourist around 80% of the tourists visit destinations for leisure purposes. Examples of such agencies can be Thomas Cook and Lunn Poly. They also offer ancillary services, again earring commissions on these:
Travel agencies can be broken down into 4 kinds:
Multinationals - travel agencies that are represented in many countries and operate on an international level. They have offices worldwide. Thomas cook and American Express are good examples of this kind.
Multiples - these are national company, which function throughout one country. Usually they are part of large organizations that may not be a travel company. Carlson Worldchoice is a good example of this kind of agency.
Miniples - these agencies have 6 or more branches, but all are small or medium sized enterprises. They are mostly based on a particular region, many a times they are taken over by large companies. Midlands Co-operative Society, which operates 88 branches.
Independent travel agencies - these types of agencies specialize in a particular product or destination or simply in customer service. They are usually found in villages and suburbs.
The roles of travel agencies have changed from the past years. Nowadays everyone prefers independent travel, they prefer booking tickets online rather than going to agencies. Due to this, the typical travel agency is facing tough competition from direct selling tour operators. In the future these agencies will focus more on tailor made packages instead of providing holidays for mass market.
Levels of integration
This industry usually consists of large organizations which own large number of small organizations. As the time as proceeded, many small organizations have merged with large organizations. This has led to integration, which can be of two forms vertical and horizontal.
In this kind of integration companies at different levels are linked to each other. Tour operators, which have a big name in the market have their own travel agency and facilities for transport and accommodation. The integration can be forward or backward. Forward integration is when a tour operator purchases a travel agency and backward is when the tour operators purchases principals. We can take an example of Thomson Holidays which owns the Lunn Poly travel agency so it's a forward integration. Example of backward integration can be Britannia Airlines and some hotels. In this kind of integration, high profits can be yielded as there are chains of organizations merged.
There are many benefits of this kind of integration to both the companies and the consumer. The companies' brand name is mentioned throughout the trip from the brochure to the point at which the booking is made, carrying this through to the airline and then completed with the staff based in the resort. And also if the tour operator has his own company, he need not pay commissions to the other agencies and hence sales are kept within the organization. From the view point of consumers, the service satisfaction is more in this integration. A example of vertical integration is shown below:
Horizontal (or lateral) integration
In this kind of integration companies have bought their companies across particular sector of the industry. When companies at the same level in the distribution chain merge, such as British Airways' takeover of Dan Air it is horizontal integration. Tour operators who build many ranges of product offer many to the smaller tour operators. In this integration all sectors are separate, the travel agency, the accommodation, travel etc. Hence commissions are issued and different kinds of bookings are done.
All components or principals rely on each other to operate. The tour organizer arranges the packages, there is transportation needed to go to the attractions and accommodation places. For example a family books a flight for visiting Dubai with Emirates Holidays (tour operators), they fly via Emirates Airlines(transportation), when they enter Dubai, they are greeted by Arabian Adventures(destination management company of Emirates providing ancillary services), will be transferred from the airport to a Atlantis(resort) and their stay would have an unlimited access to aquaventure, lost chambers(attractions). Emirates Airlines will be regulated by Civil Aviation Authority but the overall development of tourism components will be regulated by DTCM (Dubai Tourism and Commerce Marketing).
In this aspect, it is not necessary that the companies merge, they can have a tie up with one another. For example an airline and hotel can make a tie up and maximize their own profits by combining their services but still retaining their own identities. We can take an example of EasyJet and Hotelopia, they launched EasyJet Hotels accomodation and booking services. In this way, customers would book flight with EasyJet and get accommodation in Hotelopia.
The tie up can be within the same field, for example British Airways and Qantas share passengers on certain routes to reduce cost and increase benefits. In this way airlines benefit from the from the economies of sale. With reduced costs, partner airlines can offer cheaper prices.
Each component of tourism has a regulatory body attached to it:
IAPPA (International Association of Amusement Parks and Attractions)
BALPPA (British Association of Leisure Parks, Piers and Attractions)
CAA (Civil Aviation Authority)
AUC (Air Transport Users Council)
NATS (National Air Traffic Services)
Retail travel agencies and tour operators
ABTA (Association of British Travel Agents)
ATOL (Air Travel Organizers' Licensing)
FTO (Federation of Tour Operators)
PRIVATE, PUBLIC, AND VOLUNTARY SECTORS
All components mentioned above can belong to either private sector, public and voluntary sector.
The organizations involved in travel and tourism are usually in the privatesector. These organizations can be large companies like British Airways and Thomsan Holidays or small companies which are owned by one person. Private sector falls in 4 categories:
Sole trader - in this category, a single person owns the company and has ultimate control over everything but is liable for all his debts.
Partnership - in this category, between 2 to 20 people owns the company in which opinions and decisions are shared as all are responsible for the company's debts.
Private limited companies (Ltd.)- in this category, the companies are owned by owners who enjoy shares limited only to the extent of the amount they have invested in the company.
Public limited companies (PLCs)- companies that have a share capital whose share the benefits of the limited liability. The shares of PLC are offered for sale to general public.
In all the above categories, their main aim is to make profits. Hence they operate in industry where there are large numbers of potential customers. Private companies are funded through the following different sources.
Personal savings - money coming from the owners pocket itself.
Loans lent by banks, building societies, insurance companies.
Private shares these are shares sold by a private limited company to private individuals.
Public shares - these are shares sold by a public limited company to the public anywhere in the world through the Stock Exchange.
Mostly the private sectors are small or medium sized. All theme parks, hotels, restaurants are privately owned.>
In these organizations, the funds are received through local or central government and their aim is to provide services to the public. Examples can be national and regional tourist board promoters as well as some local attractions such as sport and leisure centres. In this funds come usually from central government or through local councils. They also raise funds from taxes, which are invested back for the development of new tourism projects and to maintain the existing attractions.
They have charitable status that gives them advantage like exemption from VAT, income tax, bank deposit on investments. They run small organizations but have paid employees. Mainly these organizations are run by volunteers in local sports club, conversation groups who have a common interest like sports, art or environment. Voluntary organizations aim is not to earn profit but they need a flowing income to support their campaigns. The revenue raised by them is used for the facilities and services. They raise funds mainly through donations and sponsorship.
Lieper's tourism system
Leiper suggested this model in 1979, which was updated in 1990. It takes interest in the activity of tourists, providing geographical element and allowing industry sectors to be located.
The three main elements of Liepers model are:
Tourists- they play an important role in this system. Tourism is a human experience which is enjoyed and cherished by many people. The purposes of travelling can be leisure or business.
Geographical elements- Lieper has further divided this element, into three:
Traveler generating region- this region provides a 'push' to stimulate and motivate travel. From this point the tourist searches for information and makes bookings.
Tourist destination region - this region is associated with the 'pull' to visit destinations. It creates a demand for travel and energizes the whole tourism system.
Transit route region - it means the short period to travel to reach a destination and the places which maybe visited during the route.
The tourism sector - this sector is the last element of Liepers model. It is a business and organization which involves delivering tourism product.