"Travel and Tourism Final Exam LESSONS 8-14

Tourism: Some of its multiple INTERFACES WITH OTHER SECTORS of the economy and society

* Legal/Political Players * Health Services Sector * Resources extraction industries *Technology Sector *Entertainments Industry *Financial Sector *Education Sector

Deregulation and Liberalization to remove government intervention and open competition to other airlines intended to lower prices

**1978 - Deregulation of airline industry --Removes government intervention --Lowers prices through competition --Effects controversial: **** (results were: mergers, bankruptcies, increase international and foreign, pressure on remaining airlines --Growth of regional feeder airlines **Liberalization in Europe (not as many routes)

Input-Output Models

**Alternative to multipliers **Calculation of direct, indirect, and induced effects of tourist spending ____Depict employment and income effects on sector-by-sector basis (better picture of who gains or loses) ___Improved projections improve decision-making (more government decisions on travelers) __Track tourist spending through economy

Basic vs. Applied Research **Basic Research **Applied Research

**Basic Research -Focuses on new problems or on developing new approaches to old problems -Theoretical **Applied Research -Focuses on problems that have been studied before -Contributes to solution of specific problem Applied researchers rely on basic researchers to successfully solve expanding range or problems Applied researchers provide feedback that helps basic researchers better target research

Business Strategies in Tourism Marketplace

**Diversification - hotels are owned by diversed partnerships,( i.e. airlines, auto rental places, etc.) **Conglomerates bring brand-name recognition --Access to developmental funds and technology --Knowledge of labor markets --Global standards

Research Consultants

**In- house Company must be large enough to have its own research department **Private consultants Some pitfalls Determine benefit derived from research investment **Colleges and universities Less expensive, highly specialized skills, extensive resources, innovative approaches Lengthy process, sharing information may

PRICING STRATEGIES Determine extent and nature of the demand and competitors' positioning **Price Skimming **Penetration Pricing

**Price Skimming - (enter high, lower over time) appropriate when the product or service has the following characteristics: Price inelasticity No close substitutes High promotion elasticity Distinct market segments based on price **Penetration Pricing - (enter low, raise over time) appropriate when the following factors are present High price elasticity Economies of scale An easy fit of the product into consumer purchasing patterns

The Lodging Industry Hotels represent largest component of international lodging sector Examples - commercial, airport, suite, residential, casino, resorts, motels, inns, bed & breakfasts, paradors, timeshares, resort condos, camps, youth hostels, spas

**World hotel room inventory grows about 2.5% a year **Occupancy rates average about 65% overall **72% of the world's hotel rooms are located in Europe and North America. Europe has 45% of the rooms **In 2006, the U.S. lodging industry generated $133.4 billion in sales, numbered 47,135 properties, 4.4 millions rooms, and recorded profits of $26.6 billion

WTTC (World Travel and Tourism Council) KEY Environmental Issues:

*Global warming *Depletion of the ozone layer *Acid rain *Depletion and pollution of water resources *Depletion and pollutionof land resources

The Process of Tourism Policy, Strategy Formulation and Implementation : Implementation Phase

*Implementation of strategy for Destination  Development,  Promotion, and  Stewardship *Allocation of  responsibilities for recommendation implementation *Identification of sources of  funding to support competitive initiatives and stewardship  programs *Specification of timing for  recommendation  implementation *Monitoring and evaluation  of the results

Meetings and Conventions

*Industry worth $175 billion, Major reason for business travel *Average convention attendee spends $290 per day in the city, stays 3.5 days and spends $1,036 per event *Domestic and international market US, Germany #1 and #2 in international meetings *Convention centers are expanding *Alternative meeting sites

Importance of the Research Function

*Measure guest perceptions in order to define product/service as perceived by tourist --Identify current and prospective guests --Understand how guest expectations change over time *Industry failure due to poor location spurs research *Identify underserved markets and develop products/services that target those markets *Promotion research determines which types of promotions and/or media work best

Automobile

*Most popular mode of travel in the world because of affordability, flexibility, and convenience *In the U.S., the Travel Industry Association of America reports that 80% of person-trips are made by auto --Interstate highway system *Rental car industry growingin importance --Grosses approximately $25 billion per year *RV market expanding *AAA

Motor Coach Industry

*Offers transportation to those with limited budgets, focuses on tours *Bus travel is characterized by: ---More travel to and from rural areas and small towns than other modes of transportation ---Lower average ticket revenues *Intercity bus passengers - lower income non-business travelers who are very price sensitive ---Less important due to increased auto ownership and aggressive airline pricing ---Small-business industry with a great deal of flexibility ---Many bus companies focus primarily or exclusively on charter, tour or commuter operations *Trends - deregulation in Europe, Popularity with senior market

Public/Private Sector Tourism

*Policies set at all governmental levels --Evolves through negotiation and compromise --Role of lobbyists, special interest groups, agencies *Private sector policy specific to company/organization

Market Strategy and Positioning strategy positioning implement and evaluate

*Strategy to exploit target markets -Tactics to reach target markets prioritized/customized -Market research supports techniques *Positioning is critical to capturing target markets 5 D's - Document, Decide, Differentiate, Design, Deliver *Implement and Evaluate -Timing is crucial to success of marketing plan -Measurable objectives -Identify elements that were most and least effective

Cruise Industry - cont

*Trends *Mega ships and fleets Port accessibility Impact can be positive of negative *Marketing focused on need/desire to cruise *Niche markets *Mergers may imply more competitive rates, but may cut cruise options *Increased emphasis on safety/security *Access to local communities requires quality infrastructure/superstructure and receptiveness of host community

History of US Tourism Policy

*US Travel and Tourism Administration (USTTA) replaces US Travel Service -Promote US as destination -Develop marketing plans and strategies -Assist state travel offices -Reduce national travel deficit -Promote understanding of US abroad *Office of Travel and Tourism Industries (1996) -Congress encourages private industry and states in marketing US as travel destination -OTTI serves as facilitator -Creation of other travel entities Tourism Policy Council, Advisory Board US Travel Promotion Act

Sustainable Development: in Tourism: (Key stakeholders and A Possible Allocation of Responsibility

- Level/ Organizations: *Host Community/ Region *Destination Mgmt Community Organizations *Individual Tourism Films and Operations *Host Community Region * Visitors/Tourists

Benefit-Cost Analysis Economic impacts are macroeconomic concerns

-- Aggregate number of jobs -- income derived from tourism development

Common Features of All Sustainable Codes

---the need to make an overall commitment to the physical and human environment, to accept responsibility for environmental damage and take corrective action where necessary, and to promote and reward outstanding environmental performance; ---the need to develop policies and strategies that take account of land-use planning regulations and the need to protect some areas from further development; ---the need to develop management policies that enhance beneficial and minimize adverse impacts on the environment; and ---the need to cooperate with all other firms, sectors and countries.

Resorts and Timesharing

--41% of the world's timeshare units are located in the U.S. --There are 4.4 million U.S. timeshare owners --Timeshare resorts are located in 95 countries --Timeshare owners reside in more than 174 nations --Major companies such as Disney, Hilton, Marriott, and Hyatt have become involved in timeshare

Internal Marketing Mix Customer service philosophy Employee training Service-oriented personnel Organizational communications --Recruitment/retention -Focus on job value elements

--Customer service philosophy Starts with top management --Employee training Multiple skill sets --Service-oriented personnel policies Reinforce customer service orientation --Organizational communications Reinforcement of training --Recruitment/retention of qualified employees --Focus on job value elements: content, work relationships, working conditions

Cruise Industry

--Fastest growing segment of the travel industry -------1/3 of American cruise market is 18-34 yrs old --Since 1980 had average annual growth rate of about 8.0% --------Market is international --Alternative vacation package --Expanding fleets, Adding new ports of call --"Flycruising" - flying to initial destination of cruise port. --Served by the Cruise LinesInternational Association

History of US Tourism Policy

--Fragmented, inconsistent, political, especially pre-WWII --19th century development of Western lands National Park Service, Land grants for roads/rail, Domestic Travel Act of 1940 --Post WWII - increase in discretionary leisure time and money Office of International Travel (1958) International Travel Act (1961), United States Travel Service Promote US travel, inbound travel, collection of travel data (not very successful) --National Tourism Resources Review Commission (1970) --National Tourism Policy Study (1974)

Implications of Resource Depletion

--Political instability or increased competition for land could lead to loss of potential new tourism destinations and degradation of existing destinations --Loss of landscape and wildlife could cause a decrease in customer satisfaction with tourism products and hence lower propensity to travel to some destinations --Higher fuel prices could lead to operational price increases and corresponding decreases in the number of travelers in this "price-sensitive market"

Equilibrium Point - that point at which supply and demand curves intersect

--Price above/below equilibrium will not persist in a free market --Buyers may ask for government to create price ceilings below equilibrium price -*May create shortages --Sellers may ask government to create and guarantee price supports (floor) above equilibrium price *may create surpluses

Rail Industry Use of rail system may increase due to auto congestion, better customer service and transport speed, competitive price packaging

--Reached peak volume in the U.S. in 1920 --Major railroads want out of the passenger service business (except commuter service) About 5-10% of surface travel in US --Passenger service depends on Amtrak - similar in Canada with passenger service dependent on VIA Rail Passenger rail service is much more important outside of North America, ex. Japan, China, Soviet states --Efficient, economical, high speed trains provide an alternative to air travel --Continental Europe - attempts at deregulation *********Railway independence, reduction of debt, eliminate distorted competition, remove border crossing barriers

Other Travel Pursuits

--Shopping --Education --Entertainment Festivals and Events Importance to host communities --Recreation ($400 billion in sales) RVs Parks, Recreational Lands/Sites Popularity of outdoor activities National/state parks Zoos, aquariums, etc. Adventure Travel Historic Sites ("heritage" travel) --Sports

Gaming

--The gaming industry is a $83.7 billion business --Employs directly and indirectly more than 1 million people --87 percent of American people view casino entertainment as acceptable for themselves or others --Indian reservation gaming is a growthindustry

Overview of attractions (printout)

--Tourism attractions "power" the travel industry - both domestically and internationally --Ownership is public and private --Attract both residents and travelers --Can provide primary economic base for country or region

The interaction between supply and demand keeps a free market system going...

--When desired services are in short supply, price increases --Where supplies are abundant, prices decrease

Outgrowths of Ecotourism

-Adventure Tourism ----High Risk and Soft Tourism **High risk (must be in top physical condition and depend on the environment ***_soft adventure (less challengingeasier on tourist) ----Cultural Adventure Tourism (more interested in the: very unique cultures in a lesser environment and culture, customs, languages, artifacts, interests and norms of local peoples -Scientific Tourism (students work as in archeological digs) -Green Movement **Environmental Activism (people working to fight against tourism if it is destroying the environment **Green Party -Environmental Impacts of Tourism -Sustainable Tourism

Quality tourism marketing plan includes:

-Business objectives -Analysis of market conditions -Competition analysis -Identification of target markets -Marketing strategy -Budget allocation -Implementation plan -Evaluation procedure

Types of Indicators What used to measure whether we've accomplished sustainable development

-Core indicators of sustainable tourism must be determined UPFRONTwhich have been developed for general application to all destinations (i.e. numbers of people, dollars generatored, wildlife protected, land preserved -Destination-specific indicators applicable to particular ecosystems or types of tourism. These indicators fall into two categories: **Supplementary ecosystem-specific indicators for application to particular ecosystems (e.g., coastal areas, parks and protected areas, or mountainous regions). **Site-specific indicators that are developed uniquely for the particular site. These indicators reflect important factors of the site. Which may not be adequately covered by the core and supplementary eco-system-specific indicator sets, but are nonetheless needed for management of the particular site.

Sustainable Developmentand Tourism: The Critical Areas

-Defining the Relevant Population/Community -Defining the Time Horizon -Defining the Dimensions of Sustainability -Defining the Values that Underlie Sustainable Development

Interactive Marketing Mix After tourist reaches destination............

-Each involves the tourist, or customer -Each involves an exchange or encounter -Interaction usually takes place at destination -Tourist is, in most cases, already committed to destination -Product/service is produced and delivered in full view of tourist

Reasons for Tourism Policy

-Economic benefit -Regulation and control -Visibility, recognition, support -Self-interest -Tax base -Investments -Development

Sustainable Tourism: PROGRAM ELEMENTS: An Agenda for Action CONTINUED

-Maximum total visitation levels to a community/region -Introduce An obligatory tax to support tourism infrastructure planning, development, and maintenance to sustain project -introduce Community-supported legislation to protect and preserve unique resources and heritage sites. the need to be in agreement. -Community and industry consensus concerning architectural and signage standards -Support for standards and certification programs that encourage staff development and the delivery of high-quality service

Cognitive Map : collection of information used to orient oneself within an environmental setting

-Mental representation of the world -Importance of sensory attributes -Tourist maps don't always coincide with physical/social boundaries

Geography of tourism

-Movement of people -Location of destinations flows and patterns indicate significance of geography -Routing of vacations

Images

-Perceptions not directly visible -Induced images (generated by planned promotions or advertising -Sets up tourist expectations and satisfaction levels (MOST IMPORTANT) FOR Setting up what the tourist expects

Benefits and Importance of Ecotourism

-Provides jobs and income for local people -Makes possible funds to purchase and improve protected or natural areas to attract more ecotourists in the future (such as mountains, forest, etc) -Provides environmental education for visitors -Encourages heritage and environmental preservation and enhancement

Environmental Perception: Environmental perception means:

-Requires memory -Active exploration -Perception influences choice of travel destinations - observer must perceive multi-dimensional target

Examples of the many "stakeholders" in tourism within a given destination/region.

-Residents of the "Host" Destination -Local/Municipal/Regional/Provincial/National Governments -Local/Regional/National Environmental Groups Local visitors/excursionists -Remote visitors/tourists -Tourism industry sectors: -------Transportation ------Accommodation -------Attractions -------Events ------Commercial Outdoor Recreation -------Commercial Visitor Service -Destination Management Organization (DMO) -Culture/Heritage Groups -Social/Health/Education Groups

Definitions of Ecotourism The notion of tourism that does not take away, but takes from natural resources so tourist enjoy and CONTRIBUTE back to the resources and area making it a sustainable travel destination

-Responsible travel to natural areas that conserves the environment and sustains the well-being of local people -Environmentally friendly travel that emphasizes seeing and saving natural habitats and archeological treasures -A tool for conservation -Ecologically responsible tourism

Three Major Goals of Tourism These goals are often compatible but in certain situations they can be incompatible

1) Maximize the amount of psychological experience for tourists 2) Maximize the profits for firms providing goods and services to tourists 3) Maximize the direct (primary) and indirect (secondary) impacts of tourist expenditures on a community or region

An Overview of the Tourism Planning Process

1. Define the system 2. Formulate objectives 3. Gather data 4. Analyze and interpret 5. Create the preliminary plan 6. Approve the plan 7. Create the final plan 8. Implement the plan

US Model for Tourism Planning (OTTI) Reference community plan under Tourism Links icon

1. Develop tourism leadership within the community 2. Develop tourism organizations to implement planning, promote awareness and acceptance 3. Inventory community assets, resources, and liabilities 4. Project future assets and resources 5. Set goals and objectives for tourism plan 6. Investigate alternative means of obtaining objectives. Evaluate pros and cons. 7. Select an approach and use it as a guide. 8. Prepare and implement strategy, designate who, when, and what will be needed 9. Execute plan. Be flexible 10. Reassess and evaluate plan.

Some Disadvantages of Tourism

1. Develops excess demand 2. Creates leakages so great that economic benefits do not accrue 3. Diverts funds from more promising forms of economic development 4. Creates social problems from income differences, social differences, introduction of prostitution, gambling, crime, and so on 5. Degrades the natural physical environment 6. Degrades the cultural environment 7. Poses the difficulties of seasonality 8. Increases vulnerability to economic and political changes 9. Adds to inflation of land values and the price of local goods and services

5 D'S OF Market Strategy and Positioning

1. Document 2. Decide 3. Differentiate 4. Design 5. Deliver

The Travel Research Process

1. Identify the problem and establish objectives 2. Evaluate possible approaches by conducting a situation analysis 3. Develop the research proposal (formal research design) and budget 4. Develop and pretest research instruments 5. Develop a plan for analysis 6. Select the sample 7. Collect the data 8. Process and analyze data 9. Report results 10. Follow up

Tourism Supply Components Can be classified into four main categories

1. Natural resources 2. Built Environment 3. Operating Sectors 4. Spirit of Hospitalityand cultural resources

Vital Demand Data

1. Number of visitors 2. Means of transportation used by visitors to arrive at destination 3. Length of stay and type of accommodations used 4. Amount of money spentby visitors

Factors that InfluencePrice Policies Important to consider general business goals, target market objectives, and responsiveness of tourist (demand) Always set price in accordance with customer's perception of quality

1. Product quality - Perceived value 2. Product distinctiveness/Social Image 3. Extent of the competition 4. Method of distribution 5. Character of the market 6. Cost of the product and service 7. Cost of distribution 8. Margin of profit desired 9. Seasonality 10. Special promotional prices 11. Psychological considerations **Always set price in accordance with customer's perception of quality

Goals of Tourism Development

1. Provide a framework for raising the living standard of the people through the economic benefits of tourism 2. Develop an infrastructure and provide recreation facilities for visitors and residents alike 3. Ensure development within visitor center and resorts is appropriate to those areas 4. Establish a development program consistent with the cultural, social, and economic philosophy of the government and people of that region 5. Optimize visitor satisfaction

Sources of Information: Secondary Data Saves time and money if the data is related to your problem and is relatively current. The following criteria may be used to appraise the value of information obtained from secondary data sources:

1. The organizations supplying the data 2. The authority under which the data was gathered 3. Freedom from bias 4. Adequacy from the sample 5. The nature for the unit in which the data are expressed 6. Accuracy of the data 7. Pertinence to the problem 8. Careful work

Areas Addressed byTourism Policy

1. The roles of tourism within the overall socio-economic development of the destination region 2. The type of destination that will most effectively fulfill the desired roles 3. Taxation - types and levels 4. Financing for the tourism sector - sources and terms 5. The nature and direction of product development and maintenance 6. Transportation access and infrastructure 7. Regulatory practices (e.g. airlines, travel agencies) 8. Environmental practices and restrictions 9. Industry image, credibility 10. Community relationships 11. Human resources and labor supply 12. Union and labor legislation 13. Technology 14. Marketing practices 15. Foreign travel rules

Uses of Travel Research Some uses or functions of travel research are:

1. To delineate significant problems 2. To keep an organization or a business in touch with its markets 3. To reduce waste 4. To develop new sources of profit 5. To aid in sales promotion 6. To create goodwill

Measures of Actual Demand

1. Visitor arrivals Number of people arriving at a destination who stay for 24 hours or longer 2. Visitor - days or - nights = no. of visitors x avg. no. of days or nights at destination 3. Amounts spent = no. of visitor - days or - nights x avg. expenditure per day/night (per capita)

Economic Impact Analysis: (EIA) the likelihood of the... Effect of tourist spending on entire existing economy

3 Primary Elements Direct impact ( money spent on hotels, restaurants, entertainment, transport etc. Indirect impact - ripple effect or circulation of tourist dollars thru purchase of more supplies (hotels need to buy more linen, or more food due to the increase or decrease accordingly) BOTH ABOVE ARE measured as a function that can be spent regarding tourist spending (restaurants Induced impact - Final round of spending (when employees spend their monies in some other business from earnings Procedural steps Determine region of impact Leakage - dollars that are NOT GOING BACK INTO that regional area. Identify number of "new" dollars injected INTO the regiion by the proposed project Distinguish between tourist and resident spending

Superstructure Hotels, restaurants, malls, etc.

All forms of construction above ground The "built" environment Government and developers as partners Tax incentives Access to natural resources

ENVIRONMENTsocial and physical characteristics

Ambience Setting Authenticity Environmental Perception Cognitive Map Landmarks Images Geography of tourism

An Overview of the Tourism Planning Process in 7 stages: STAGE 1: Define the system STAGE 2: Gather data STAGE 3: Analyze and interpret STAGE 4: Create the preliminary plan STAGE 5: Approve the plan STAGE 6: Create the final plan STAGE 7: Implement the plan

An Overview of the Tourism Planning Process in 7 stages: In doing so, ensures that the definitions for the policy formulation and destination planning are consistent. Gather Necessary Data: Again, much of the data used for policy formulation may be helpful for the planning process However, additional and much more detailed data will be required for the planning process In doing so, it is useful to relate data to the specific facilities, events, activities, and programs that impact on the factors that determine/influence destination success The plan should start to make clear the detailed nature of the facilities, events, activities, and programs that will deliver the unique high-quality destination experience that will enhance the competitiveness of the destination within strategic market segments It is critical to ensure that where approval is required no relevant stakeholders are overlooked At this stage, the level of detail becomes increasingly rigorous and directly related to the specific geography, legislation, financing, and timing of the "real world" This stage allocates responsibility for development actions to specific individuals and organizations, defines the exact timing of these actions, and establishes contingencies for unexpected occurrences. This stage also monitors, follows up, and evaluates

The Process of Tourism Policy, Strategy Formulation and Implementation : Analytical Phase

Analytical Phase Internal Analysis: Review of existing policies and programs Resource audit Strategic impact analysis External Analysis: Macro level analysis of  current and future  demand Micro level analysis of  current and future  demand and behaviors Review of competitive and  supportive tourism  development and  promotion policies

Analyzing Market Conditions - cont. Economy Politics Environment

Analyzing Market Conditions - cont. Economy Mass tourism is sensitive to recession with unemployment, layoffs, and reduced credit International tourism sensitive to currency exchange rates Other economic stability factors Politics Vulnerability to country and region political environment Safety and security Government/monetary policies Environment Quality of natural and physical environment Most important consideration after economic and political considerations

Setting (smaller subset of the environment)

Behavioral settings must include: People and Programs- orderly, planned behavior (think of theme park how people Primary characteristics of setting must include --- -People -Time and place boundaries -Active or dynamic -Self-regulating often-modified by the phenomena that occurs within it

Benefit-Cost Analysis Economic benefits and costs are microeconomic issues

Benefit-Cost Analysis -- How consumers decide what to buy/How businesses remain profitable -- Measure efficiency of business decisions/government projects -- Efficiency - absence of waste of resources, when benefits exceed costs

Placement: Selection of Channels of Distribution

Channels of distribution are selected by: 1. Analyzing the product 2. Determining the nature and extent of the market 3. Analyzing the channels by sales 4. Determining the cooperation you can expect from the channel 5. Determining the assistance you will have to give to the channel 6. Determining the number of outlets to be used

Composite Indices and Specific Measures COMPOSITE INDICES Carrying capacity Site stress Attractivity

Composite Indices and Specific Measures SPECIFIC MEASURES Composite early warning measure of key factors affecting the ability of the site to support different levels of tourism Composite measure of levels of impact on the site (its natural and cultural attributes due to tourism and other sector cumulative stresses: Qualitative measure of those site attributes that make it attractive to tourism and can change over time

The Process of Tourism Policy, Strategy Formulation and Implementation : Definitional Phase

Definitional Phase Definition of Tourism  Destination System Explication of a Tourism  Philosophy Crafting of a Destination  Vision Objectives and Constraints

Constraints Faced in Tourism Goal Attainment Causes of INCOMPATIBILITY INCOMPATIBLE

Demand Supply of attractive resources Technical and environmental constraints Time constraints Indivisibilities Legal constraints Self-imposed constraints Lack of knowledge Limits on supportive resources

Demand to a Destination

Demand for travel to a particular destination is a function of the propensity of the individual to travel and the reciprocal of the resistance of the link between origin and destination areas Demand = f(propensity, resistance)

Analyzing Market Conditions Social and economic context within which tourism product/service is exchanged Demographics Social/Cultural Conditions Electronic Technology Analyzing Market Conditions - cont. BELOW

Demographics: Characteristics within the population (ex. census information) Social/Cultural Conditions: Shifts or trends Traditional values or norms Subcultures Culture itself may be motivation or precondition for travel Electronic Technology: New technologies have reduced cost travel, contributed to new types of tourist destinations, and produced innovations in reservations, profit management, demand forecasting Analyzing Market Conditions - cont. BELOW

The Ritchie/Crouch Model of Lesson 12 slide 1 Page 350 in book

Destination Competitiveness & Sustainability Lesson 12 slide 1

Ambience

Dynamic condition Understanding the tourism environment helps predict behavior Affected by people who move in and out of the atmosphere People adapt and respond to ambience

Economic Multipliers Multiplier - Different tourism scenarios

Economic Multipliers measurement device used for economic impact analysis --------Impact expressed in terms of employment, income, output (sales) --------Size reflects impact of re circulation before complete leakage occurs will indicate changes in employment and income to guide investment decision-making ---------Multiplier effects greater in large, more diverse economy

Economic Multipliers continued Direct Effect Indirect Effect Employment Multiplier Income Multiplier A more simpler formula is

Economic Multipliers continued Result from visitors spending money in tourist enterprises and providing a living for the owners and managers and creating jobs for employees This is the multiplier impact. This is where visitor spending circulates and recirculates Income Multiplier Formula Multiplier = 1 (divided by) ___ 1-MPC where M = marginal (extra) P = propensity (inclination) C = consume (spending) MPC S = savings (money out of circulation) MPS A more simpler formula is Multiplier = 1/MPS Example $1,000 of tourist expenditure and an MPC of 1/2. Multiplier = 1 / 1- .5 x $1000 = $2,000

Resistance depends on: resistance= failure to convince travel

Economic distance - cost of transport. Cultural distance - area= US travel vs Africa ie global travel Cost of tourist services Quality of service Seasonality

Formula to Calculate Number of Hotel Rooms Required EXAMPLE

Example T = 1,560,000 visitors P = 98% L = 9 days N = 1.69 0 = 70 % S = 365 days R = 1,560,000 x .98 x 9 365 x 1.69 R = 22,306 (rooms needed at 100% occupancy) at 70 % occupancy need R = 22,306/.70 = 31,866 rooms

Government Planning: Federal State/Regional/Local: Private Sector: :

Federal: Efforts directed towards transportation, financing, safety and health, attracting international tourists OTTI provides planning model State/Regional/Local: State supports planning on regional and local levels State offices use marketing as conduits for funding tourism advertising State promotes own tourism attractions Transportation is critical planning factor Chambers of Commerce, CVBS plan at local level Private Sector: Business-specific Hospitality operations and attractions often built to conform to tourism development plans (superstructure) Different tourist business sectors must communicate and coordinate activities To insure success, include unrelated businesses in tourism development process

Four P's of Marketing: Product Place Promotion Price

Four P's of Marketing: Attributes, branding, packaging Channels of distribution, access Benefits of product through selling, advertising, P/R, promotion Profit x Customer satisfaction

Analysis of supply and demand is fundamental investigative tool of economists

Graphs of supply and demand curves relate price to quantity

SERVICE CYCLE - MOMENT OF TRUTH

INTERACTIONS Tourist-Employee Tourist-Tourist Tourist-Setting Tourist-Host Community

Task Analysis: is the procedure used in matching supply with demand. The following steps are usually employed:

Identification of the present demand A quantitative and qualitative inventory of the existing supply The adequacy of present supply with present demand Examination of present markets and the socioeconomic trends Forecast of tourism demand Matching supply with anticipated demand

Promotion Tourism primarily targets potential customers: tourists, travel agents, wholesalers

In order to sell the product it is necessary to: 1. Attract attention 2. Create interest 3. Create a desire 4. Get action

Alternative and Mass Tourism

Increased emphasis on alternative methods of managing and developing tourism -Conduct tourism on a smaller scale -Encourage respect for resources -Provide means to maintain long-term tourism economy -Monitor structure and pattern of tourism -Develop a tourism ETHIC ---Residents and tourists ---Requires knowledge and education and mutual understanding of needs and consequences of actions

Core Indicators of Sustainable Tourism INDICATORS: -Site Protection -Stress Development control Waste management Planning Process Critical Ecosystems Consumer Satisfaction Local Satisfaction Tourism Contribution

Indicators and Specific Measures SPECIFIC MEASURES -Category of site protection -Tourist numbers visiting site (per yr/per peak month) Existence of environmental review procedure of formal controls over development of site and use densities Percentage of sewage from site receiving treatment (addt'l indicators may include structural limits of other infrastructural capacity on site, such as water supply) Existence of organized regional plan for tourist destination region (including tourism component) Number of rere/endangered species Level of satisfaction by visitors (questionnaire-based) Level of satisfaction by locals (same) Proportion off total economic activity generated by tourism only

The Planning Process Exhibit 1 : US MODEL

LESSON 12 SLIDE 8

Food Services Structure

Lesson 10 Slide 22

2010 PARTICIPATION - RANKED BY TOTAL PARTICIPATIONPARTICIPATED MORE THAN ONCE (IN MILLIONS) SEVEN (7) YEARS OF AGE AND OLDER

Lesson 10 slide 27

Top 20 National Park Units for Recreation Visits in 2009

Lesson 10 slide 27

The Structure and Composition of Tourism Policy

Lesson 11 slide 13

Marketing Mix The marketing mix is composed of every factor that influences the marketing effort - the challenge is finding the right combination of these factors to produce a profit

Marketing Mix 1. Timing 2. Brands 3. Packaging 4. Pricing 5. Channels of distribution 6. Product 7. Image 8. Advertising 9. Selling 10. Public relations 11. Service quality 12. Research

Marketing Tourism In the past, marketing was focused on production or sales - or both

Now, Marketing is a continuous process in which management plans, researches, implements, controls, and evaluates activities designed to satisfy both the needs and wants of the customer and the objectives of the organization

Basic Research Methods Observational method Experimental method The Survey Method Focus Groups

Observational method -Objective and accurate, but costly -Direct vs. indirect observation Experimental method -Simulation environment (lab) makes this difficult to use in tourism The Survey Method -Factual surveys -Opinion surveys -Interpretive surveys -Personal interviews -Telephone surveys -Mail surveys -Electronic devices, Internet -Internet surveys Focus Groups

National Trade Offices (NTO)Tourist Information Services Usually located in a tourist city

Offices created to facilitate travel as boost to national economy Coordinate supportive services resulting from agreements on trade/exchange matters ----Travel documentation ----Information for international tourists ----Located in large tourist cities

The Process of Tourism Policy, Strategy Formulation and Implementation : Operational Phase

Operational Phase Identification of strategic  conclusions Implications of conclusions for supply and demand  development Policy/Program  recommendations

Fluctuating Demand Levels and Supply (Seasonality)

Overcrowding and loss potential business DEMAND & SUPPLY LOW occupancies Seasonality can be reduced through either price differentials or multiple use

Promotion Techniques

PERSONAL SELLING - face to face f2f ADVERTISING - all forms of media PUBLICITY/PUBLIC RELATIONS - free coverage of product or service can be positive or negative, unpredictable. When someone reports on your business SALES PROMOTIONS - discount programs, incentives WORD-OF-MOUTH - when people exchange info about their experiences and is crucial and more persuasive.

Destination Vision Framework

PREAMBLE Core Vision _______________________________ ELEMENTS of the VISION: Ecology Awareness Visitor Experience Economy Community Governance ________________________________ VALUES On Which the Vision is Based _________________________________ PRINCIPLES Guiding Implementation of Vision

Planning Considerations

Planning Considerations 1. Tourism development is a long-term process 2. Primary benefits include increased employment, tax revenues, stimulation of business activity and diversity, conservation of historic sites 3. Primary costs include wear and tear on infrastructure, people and traffic congestion, damage to environment, shifts in social/cultural life 4. Third World concerns complicated by foreign investors and multinational tourism companies A. Little resident involvement B. Limited production of amenities by community C. Economic obstacles D. High risk investment 5. Important to address Tourism Life Cycle in plan A. Startup B. Growth C. Maturation D. Decline

Planning Examples Visit these sites to see the results of tourism planning in Banff, Canada South Africa Jonesborough, Tennessee

Planning Examples Banff, Canada http://www.banff.ca South Africa http://www.sun-city-south-africa.com/http://www.suninternational.com/sun-city/palace/Pages/default.aspx Jonesborough, Tennessee http://www.jonesboroughtn.org/files/VisitorsGuide.pdf

Primary vs. Secondary Research and Data

Primary research collects and uses original (primary) data, while secondary research is conducted using data from a source other than the current study (secondary data).

Product Life Cycle Each stage requires a different form of marketing support for success.

Products and services go through a predictable pattern of changes over time 1. Introduction - need to push quant. in the market. some fail here cause not enough to sell 2. Growth - being accepted still costly 3. Maturity - well established, leveling off, may need to target another group 4. Saturation - Lowered price, getting around well, stay around for long period 5. Decline - product becomes obsolete and new products replace current product. advertising expenditures low, small # of competitiors

Market Segmentation - cont.

Psychographics -Psychological character of both destination and tourist -Ex. Psychocentrics vs. Allocentrics -Must include linkage with travel motivations -Behavior & Consumption Patterns =Behavioral patterns based on attitudes, values, interests, lifestyles =VALS1 and VALS2 - needs that drive traveler are inner/outer-directed ◈ Actualizers ◈ Believers ◈ Fulfilleds ◈ Strivers ◈ Achievers ◈ Makers ◈ Experiencers ◈ Strugglers Behavioral Patterns include -Occasions -Benefits -User status, rate -Readiness stage -Attitude toward product

Propensity depends on:

Psychographics Demographics(socioeconomic status) Marketing effectiveness

Formula to Calculate Number of Hotel Rooms Required

R = T x P x L S x N where T = number of tourists P = percentage staying in hotels N = total number of guest nights/number of guests R = room demand per nights/number O = hotel occupancy used for estimating; divide number of rooms needed at 100% occupancy by estimated occupancy S = number of days per year in business L = average length of stay

Top 25 Hotel Chains (2006)

Rank Corporate Chain Rooms Hotels 1 InterContinental Hotels Group 556,246 3,741 2 Wyndham Hotel Group 543,234 6,473 3 Marriott International 513,832 2,832 4 Hilton Hotels Corp. 501,478 2,935 5 Accor 486,512 4,121 6 Choice Hotels International 435,000 5,376 7 Best Western International 315,401 4,164 8 Starwood Hotels & Resort265,600 871 9 Carlson Hospitality Worldwide 145,331 945 10 Global Hyatt Corp. 140,416 749 11 TUI AG/TUI Hotels & Resorts 82,111 279 12 Sol Meliá SA 80,856 407 13 Extended Stay Hotels 75,860 681 14 LQ Management LLC (was La Quinta Corp.) 64,856 582 15 Westmount Hospitality Group 63,380 384 16 Société du Louvre 59,616 840 17 Jin Jiang International Hotels 53,552 277 18 Golden Tulip Hospitality/THL 51,182 512 19 Interstate Hotels & Resorts 50,199 223 20 NH Hoteles SA 47,799 330 21 Vantage Hospitality Group (American Best Value Inns) 46,910 699 22 Rezidor Hotel Group 45,463 225 23 Fairmont Raffles Holdings International 44,149 123 24 MGM Mirage 43,785 18 25 Walt Disney World Co. 40,399 47

Top European Theme Park Admissions 2005

Rank, Attendance 2005 Park and Location (in millions) 1 Disneyland Paris 10.2 Marne la Vallée, France 2 Blackpool Pleasure Beach 6.0 Blackpool, England 3 Tivoli Gardens 4.1 Copenhagen, Denmark 4 Europa-Park 3.9 Rust, Germany 5 Port Adventura 3.4 Salou, Spain 6 De Efteling 3.3 Kaatsheuvel, the Netherlands 7 Liseberg 3.2 Göteborg, Sweden 8 Gardaland 3.1 Castelnuovo del Garda, Italy 9 Bakken 2.6 Klampenborg, Denmark 10 Alton Towers 2.4 Staffordshire, England

Authenticity- 2 forms means having a Authenticity means - types of authenticity

Real experience -Emerging authenticity (cultural recreation of furniture, (rocky horror picture show -Staged authenticity - Used to enhance to suggest the real thing. (renaissance festival) really seeing and experiencing place, people, attractions and -Encompasses desire to buy authentic artifacts -Emerging authenticity -Staged authenticity

Landmarks

Reference points to determine or distinguish features with respect to direction or distance. Seem larger and bolder and further in distance than they really are

Relating Tourism Planning to Tourism Policy SIMILARITIES DIFFERENCES

Relating Tourism Planning to Tourism Policy SIMILARITIES 1. They both deal with the future development of a tourism destination or region; 2. They both emphasize the strategic dimensions of managerial action-although planning must also address a number of tactical concerns. DIFFERENCES 1. Policy formulation is definitely very "big picture" while much of planning is characterized by an attention to detail; 2. Policy formulation is a creative, intellectual process, while planning is generally a more constrained exercise; 3. Policy, and particularly its visioning component, has a very long-term strategic emphasis, while planning tends to be more restrictive in its time horizon; 4. Policy formulation must allow for as yet unseen circumstances and technologies to be considered. In contrast, planning tends to assume current conditions and technologies, with some allowances for predictable, or evolutionary change; 5. Policy formulation tends to emphasize a systematic determination of "WHAT" should be done in long-term tourism development, while planning tends to emphasize the "HOW" for the achievement of specific destination goals.

Marketing Research Systematic study of any issue, problem or phenomena related to the marketing of aproduct or service

Research data assists marketing manager to make decisions about potential markets, pricing, supply, problem solutions, opportunities, and more Internal sources of marketing research data include hotel guest lists, sales reports, guest comment cards, internal files, customers themselves Solid research supports establishment of new enterprises --Market analyses --Feasibility studies --Situational analyses

Sustainable Responsibility Chart Level/Organization * Host Community/Region Destination Management Community Organization Individual Tourism Firms and Operators Host Community/Region Visitors/Tourists

SD = Sustainable Development Responsibility *Defining the tourism philosophy and vision for the community/region *Establishing social, physical and cultural MAXIMUMS ,carrying capacity for the host community/region * Coordination of implementation of community SD plan tourism *Monitoring of levels and impact of tourism in the community/ region * Fair contribution to implementation of SD plan for tourism *Observance of regulations, guidelines, and practices for SD *Encouragement/acceptance of tourism within parameter of SD plan * Acceptance of responsibility for minimal self-education with respect to values of host region *Acceptance and observance of terms and conditions of host community SD plan for tourism

Sustainable Tourism: ACTIVITIES An Agenda for Action

ST ACTIVITIES: -Coordinating the development of a tourism philosophy and vision for the community/ region -Specifying the major goals of the community/region with respect to tourism -Obtaining consensus concerning the social, physical, and cultural carrying capacity of the community/region in question -Identifying the specific action initiatives necessary to meet the tourism development objectives while respecting the destination's carrying capacities -Gaining agreement on the measures to be used in monitoring the impacts of tourism in the community/region -Gathering and disseminating information concerning the impacts of tourism on the community/region

Marketing plan for businesses is part of a larger, long-term business strategy

Should mesh with overall corporate goals Written document facilitates planning process as well as communication, provides reference point Written plan exposes new opportunities, market focus, integrates priorities and objectives, criteria for success, provides continuity

Some Advantages of Tourism -Provide employment opportunities -Generates foreign exchange -Increases incomes -Increases GNP -Development of tourism infrastructure helps to stimulate local commerce and industry -Justifies environmental protection and improvement

Some Advantages of Tourism cont. -Increase governmental revenues -Diversifies the economy -Creates a favorable worldwide image for the destination -Facilitates the process of modernization -Provides tourist and recreational facilities for the local population -Provides foreigners and opportunity to be favorable impressed by little-known nation or regions

Some Elements of Successful "total tourism destination management" COMPETITIVENESS [Resource Deployment] Business/Economic Management Skills • Marketing • Financial Management • Operations Management • Human Resources Management • Information Management • Organization Management • Strategic Planning Information Management both competitive and sustain Destination Monitoring

Some Elements of Successful "total tourism destination management" SUSTAINABILITY [Resource Stewardship] Environmental Management Capabilities • Water Quality Management • Air Quality Management • Wildlife Management • Forest/Plant Management • Visitor Management • Resident/CommunityManagement • Commemorative Integrity Information Management both competitive and sustain Destination Research

Airline Industry Low-Cost Carriers

Some typical characteristics of LCCs are: -One passenger class -One type of airplane to reduce fleet maintenance costs -Using secondary airports -Quick airport turnarounds -Point-to-point service -Unreserved seating -Employees working in multiple roles -Internet booking -No frills, just low fares

State and Local Tourism State Local

State and Local Tourism State travel office - Department of Commerce or Economic Development Market research Clarify role of tourism Political factionism City, town, village, county level policy Cities play important role in attracting tourism Local policies should complement state and national policy Role of Chamber of Commerce, CVB, City Council, Regional Tourism Councils

Analyzing Competition Success Identify Competitive Understand

Success is based on knowledge and understanding of competition - constant monitoring Identify who they are/what they do Tourism is particularly competitive Understand target market and who competes for it - starts with Market Segmentation

Infrastructure Water, sewer lines, etc needs a well developed infrastructure to bring in tourism

Systems and construction on and below ground Developed, funded by local government Mandatory for tourism and tourist facilities

General Economic & Social Policies Affecting Tourism

Taxation - affects costs and thus profitability; Interest Rate Policy - affects costs and thus profitability; Bilateral Air Agreements - determines foreign visitor access; Environmental Policy - limits growth and access to attractive, but sensitive areas; Customs and Immigration Policy - can facilitate or hinder international visitation; Communications Policy - can restrict use of certain advertising media; Minimum Wage Policy - can affect labor markets; Welfare Policy - can influence nature and behavior of workforce; Education Policy - can affect quality of workforce; Cultural Policy - can affect preservation and promotion of national heritage; Foreign Investment Policy/Regulations - can affect availability of investment capital; Local Zoning Policy/By-Laws - can restrict or encourage tourism facility development; National/Provincial/Local Policy re: funding support for major public facilities (e.g. stadiums, convention centers, museums, parks) - can drastically affect destination attractiveness; Infrastructure Policy - can make destination safer for visitors, or restrict resident travel to foreign destinations; Currency/Exchange Rate Policies - directly affects destination cost competitiveness; and Legal System - determines consumer/visitor protection legislation (e.g. liability for failing to deliver advertised facilities/tours/experiences).

The Premises of Sustainable Development

The Premise of Interdependency The Premise of Multidisciplinarity The Premise of Previous Experience The Premise that Nature is Better The Premise of Politics and Power

Top U.S. Theme Park Admissions (2005)

Theme Park Attendance (millions) The Magic Kingdom, Orlando 16.1 Disneyland, Anaheim, California 14.5 Epcot, Orlando 9.9 Disney-MGM Studios, (now Disney Hollywood Studios) Orlando 8.7 Disney's Animal Kingdom, Orlando 8.2 Universal Studios, Orlando 6.1 Disney's California Adventure, Anaheim 5.8 Islands of Adventure at Universal, Orlando 5.7 9. Sea World, Orlando 5.6 10. Universal Studios, Los Angeles 4.7

The Competitive/Sustainable Tourist Destination: A Managerial Framework 1. Growing competition from both established and emerging destinations 2. Pressure to maintain the ecological integrity of regions affect by tourism

Tourism Policy Structure and Content The Policy Formulation Process Policy Formulation Methods

Tourism Policy: A Definition A policy is a guideline for a future course of action with the intent to create consistent behavior while maintaining a certain dynamism

Tourism policy: A set of regulations, rules, guidelines, directives, and development/ promotion objectives and strategies that provide a framework within which the collective and individual decisions directly affecting tourism development and the daily activities within a destination are taken

Marketing Tools and Strategies Marketing Mix Initial 4 Ps of Marketing Mix PLUS 4 more Ps in Marketing Mix

Tourism requires both Interactive and Internal Marketing Marketing Mix - "the right combination of elements to produce a profit", but mix is more complicated with tourism because many products/services are experiential and intangible Initial 4 Ps of Marketing Mix Price Promotion Product Place PLUS 4 more Ps in Marketing Mix Programming Packaging - combining services or products for one price Partnerships - integrate packaging through company partnerships or thru frequent flier program, etc. Least integrated- long distant attributes for promotion purposes Publicity/Public Relations - media driven

Elements of the WTTC Vision of Travel & Tourismand the Environment

Travel & Tourism is an integral aspect of modern societies Global awareness of environmental damage is developing rapidly The resources of the world's largest industry can and must be harnessed to achieve environmental goals The industry has the potential to influence billions of customers per years and to use its leverage to achieve beneficial environmental effects The customer challenge will exert a growing pressure to achieve environmental improvements Environmental lobbies will add pressure to develop good environmental practice Self-regulation must be developed rapidly and effectively and used to influence the development of appropriate and workable regulations Corporate environmental mission statements are a vital first step toward self-regulation Environmental leadership must come from the major international companies

Market Segmentation Identify current and potential market(s) on basis of meaningful characteristics Criteria must be substantial, exploitable, identifiable and accessible, durable Market Segmentation - cont. BELOW

Typical Bases for Market Segmentation -Geographic -Demographic -Socio-economic -Psychographic -Behavior patterns -Consumption patterns -Consumer predispositions Geographic -Regions, Cities, Density, Climate -Bureau of Census MSAs Demographics -Social statistics, ex. age, ethnicity, and occupation Market Segmentation - cont. BELOW

Food Service Industry (2010)

U.S. sales total estimated $580 billion - 2.5% over 2009 Employs more than 12.8 million people Restaurant industry provides work for more than 9% of those employed in the United States Industry employees more minority managers than any other retail industry 935,000 locations Travelers contribute about $130 billionto sales each year Culinary tourism 17% US market makes decisions based on food and wine Young, affluent, well-educated market Desirable market for all types of tourism

Passenger Transportation Structure

Urgent Transportation Problems: 1. Congestion 2. Safety and security 3. Environmental damage 4. Seasonality

Airline Industry

World airline industry carries over 2.2 billion passengers per year The U.S. airline industry in 2007 * Employed 550,000 people * Records revenues of over $150 billion However, from 2001-2005 and in 2008, U.S. carriers have suffered large losses. A weak air transportation system affects the rental car business, hotels, and attractions Low-cost carriers (LCCs) are growing

A societal approach to marketing

accounts for a long-term positive social and community presence

Encoding - Communication is dynamic, interactive, and influenced by subjective factors

act of sending a promotional message (usually through mass media), translated into language and visual symbols, to traveler, who receives, interprets and decides upon purchase in response

Economic Multipliers - cont Use of wrong multiplier in analysis can

inflate/deflate projections *Income and employment multipliers most useful *Sales (output) (USELESS TO DETERMINE STANCE) multipliers vs. income multipliers ___Political uses of sales multipliers ___High sales multipliers can give false impressions BOTH ABOVE MEASURED IN DOLLARS *Ratio multipliers as an alternative to indicating economic self-sufficiency (this can be used to determine outcome of economic analysis)

Hypothetical Evolution of a Tourist Area

lesson 12 slide 12 1. Discovery 2. Involvement 3. Development 4. Consolidation 5. Stagnation 6. a - Rejuvenation b - Reduced Growth c - Stabilization

Consumer orientation in marketing means

that the tourist business must first determine the wants and needs of the customer, then fashion a product or service that meets those wants and needs

Change in quantity demanded or movement along a fixed demand curve occurs Change in demand occurs when Change in quantity supplied or movement along a fixed supply curve occurs Change in supply occurs

when ONLY price of good/service changes prices of related goods, consumer income or tastes, future expectations, or number of buyers changes when ONLY price of good/service changes when price of resources, production, technology, prices of other goods or service, or suppliers' expectations change