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Chapter 9 Travel and Tourism Industry

Chapter 9 for Exam 3
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Introduction Statistics from Travel Industry Association of America 2004,2005 (6 stats)
-Involves about $571 billion of direct expenditures
-Domestic and international economic impact is over $1.23 trillion
-Over 1.2 billion trips away from home by Americans
-Generates 7.2 million jobs in the US
-Generates about $95 billion in tax revenue for local,state and federal governments
-In the top three industries in almost every state
Definition of Tourism (general) (WTO)
the activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes
Definition of Domestic Tourism (WTO)
involves residents of a country traveling only within that country
Definition of International Tourism (WTO)
inbound and outbound tourism of a given country
Definition of an Overnight Visitor (WTO)
visitors who stay at least one night in a collective or private accommodation in the place visited. This includes people on cruise ships, yachts or trains.
Definition of a Same Day Visitor (WTO)
visitors who do not spend the night in a collective or private accommodation in the place visited
Definition of Tourism Industry (Book)
the broad industry comprising a loose network of businesses that serve tourists/travelers. Includes transportation carriers, travel agencies, tour companies, most of the hospitality industry and anything else that serves tourists.
Definition of Tour (Book)
a combination of services, including transportation and one or more of the following: accommodations, meals, recreational activities, entertainment, or sightseeing, which are provided to individual or group pleasure travelers.
Components of the Tourism Industry (5 components)
-the traveler who seeks psychic and physical experiences and satisfaction
-the businesses providing transportation, lodging, products and other services to the traveler
-the government of the host country, region or community
-the host community, including the residents' cultural background
-the natural resource base and physical environment
What are Travel Industry Sales and Distribution System?
There is no single process by which sales are made because the industry is so interrelated. To accomplish sales, there is a distribution process with multiple stages.
What is a One Stage Sale? (Figure 9-1 on page 205)
Supplier sells directly to the consumer.
What is a Two Stage Sale? (Figure 9-1 on page 205)
Transaction goes through a travel agent, tour operator or specialty channeler who makes all of the arrangements.
What is a Three Stage Sale? (Figure 9-1 on page 205)
A travel wholesaler, specialty channeler or tour operator and a travel agency are used in the transactions.
What is a Four Stage Sale? (Figure 9-1 on page 205)
Transaction includes a wholesaler or tour operator, a travel agent and a specialty channeler.
What is a specialty channeler?
Travel coordinator for an organization such as a nonprofit agency, corporation, ski shop, scuba retail shop, or club.
How Quickly did the Industry grow from 1984-2000?
Approximately 4% a year (faster than the GNP of the US)
What factors influenced the travel boom of the 1980's and 1990's? (5 factors)
-Oil prices remained fairly stable which kept fuel prices fairly stable
-Deregulation of airlines and competition within the industry kept prices down (except in places with little competition)
-Overcapacity of lodging which led to competition and stable prices
-Tax reforms in the US gave Americans more discretionary income in the 1980's.
-Remarkable financial gain during the 1990's for Americans who invested in the stock market
What was the early decline of tourism in the early 2000's?
-2.9% drop in worldwide tourism
-22% drop in international travel to the US
Why was there a decline in tourism in the early 2000's? (2 reasons)
-Stock market decline in 2000
-Terrorist attacks, specifically 9/11/2001 and Bali 2002
When did the tourism industry bounce back and by how much?
Between 2003 and 2005 the industry rebounded 10%
What are the characteristics of Domestic Travel? (8 Characteristics)
Domestic travel accounts for most of the American travel industry.
-Most popular destinations are CA, FL, TX, PA and NY
-National Parks are major destinations with approximately 414 million visitors
-Average length of a leisure trip by adults is 6 nights and costs $1459.00 per party
-55% of travelers stay in hotels or motels and 39% stay in private homes
-Average spending on a trip is 36% transportation, 25% food, 18% lodging, 12% entertainment and 8% for general purchases
-June through August are the most popular months to travel and accounts for 33% of the annual trips
-Leisure travel accounts for 82% of trips with 12% for business and 6% combined business and leisure
-Half or all business and leisure trips are for 2 nights or less
What are the characteristics of International Travel? (8 Characteristics)
-International travel arrivals to the US are mostly from Canada (31%), Mexico (26%), UK (10%), Japan (8%), Germany (3%), France (2%), South Korea (2%), Austria (1%), Italy (1%) and the Netherlands (1%)
-Asians, Europeans and South Americans spend more per day than do Canadians and Mexicans because they tend to stay longer periods of time
-Fastest growing individual markets to the US are Mexico, India, Ireland the South Korea
-US residents trips to other countries are mostly to Europe (33.6%), Mexico (14.3%), the Caribbean (14.2%), Asia (12%), Canada (24%), Central America (5.7%), South America (5.4%), Oceania (2.1%), The Middle East (1.3%), Africa (0.6%)
-Among European travelers to the US it is ranked UK, France, Italy and Germany
-The US travel deficit of $10 billion of 1985 balanced out by 1989 and grew to a surplus of $26.3 billion by 1996, before dropping to 2.4 billion in 2004
-Top 10 leading destinations for travel, measured by number of visitors are France Spain, US, Italy, China, UK, Austria, Mexico, Germany and Canada
-US destinations for international travelers are FL, NY, CA, HI, NV
Business Vs. Pleasure Travel
- About 82% of trips are for pleasure and increased dramatically from the 50% 30 years ago
-Leisure is added to business trips about 34% of the time
Business Travelers (2 characteristics)
-mostly men (70%), travel solo, educated, and higher incomes
-more likely than leisure travelers to use airplanes, rental cars and stay in hotels
Pleasure/ Leisure Travelers (3 characteristics)
-stay longer
-plan ahead
-spend less per day
What are weekend and long weekend trips?
- Account for 50% American vacation trips and among two career families this is even higher
-57% of Americans prefer shorter trips
What are Push Factors? (Motives and Attractions for Travel)
Push factors are those forces within us that motivate us to travel and include:
-health pursuits
-curiosity
-escape
-rest and relaxation
-cultural interest
-adventure
-challenge
-business
What are Pull Factors? (Motives and Attractions for Travel)
Pull factors are those attractions that draw people once they have the urge to travel and include:
-natural scenic areas
-historical areas
-cultural events and attractions
-entertainment events
sporting events
What are the barriers to travel? (9 barriers)
-expense
-lack of time
-health
-lack of skills
-lack of interest
-family stage
-lack of information
-lack of travel companion
-security
What are Allocentric and Psychocentric Travelers: Venturesomeness?
-Classic Psychographic model developed by Dr. Stanley Plog (1974)
-Allocentric traveler is a person who seeks new experiences and adventure in a variety of activities
-Psychocentric traveler is more conservatively oriented and prefer destinations that are familiar
-Some people are Allocentric but cannot afford to be so they are more Psychocentric (college students)
Importance of Travel Market Segmentation and Lifestyles
Travel businesses typically want to know demographic characteristics such as area of residence, age, income, family stage and transportation mode to model their product to the needs of the masses. They often develop market segment profiles to understand their clientele.
What are some other Travel and Tourism Patterns?
-Friends and relatives are the number one source for most people for travel information
-People younger than 35 use the internet for research over books
-Summer has the most travel (33%)
-Tax refunds are used by 19% of Americans to pay for trips
-People with pets usually stay with friends as opposed to hotels or motels
What is the role of government in Travel and Tourism?
-The US has no federal tourism budget but states spend a lot to promote tourism to their area
-State governments spend about $603 million for tourism development and promotion
-The US has no effective organization or budget for promoting itself to international tourists
-The government is responsible for some tourism related aspects such as infrastructure of roads and utilities
-The government makes about $95 billion in revenues through tourism related tax
What is rural tourism?
Tourism has the potential to rejuvenate a rural community's economic vitality through the infusion of tourists' dollars, creation of jobs and generation of tourism dedicated taxes. Tourism can also be used to promote preservation of unique cultural practices or conservation of natural areas.
What are the four stages of rural tourism?
1. evolution of tourism- there is a potential for tourism to grow
2. formalization- formal organization s get together to start marketing tourism
3. development- development and marketing are in full swing
4. centralization- formal tourism organizations are created
What are Tourism Trade Associations?
Used in almost ever segment of tourism to unite its members and advance its interests. Example: National Tour Association (NTA)
Terrorism, Crime and Safety in the Travel Industry
Terrorism, crime and natural disasters have all become very real concerns to the industry. The tourism industry has plans set up to combat this and to recover if needed. Includes such things as rescue, restoration and rebuilding.
What is ecotourism?
Also known as "green tourism", "natural tourism" and recently "geotourism." It is defined as "responsible travel to natural areas that conserves the environment and imporves the well being of local people." Geotourism is defined as "tourism that sustains or enhances the geographical character of the place being visited- its environment, culture, aesthetics, heritage and well being of its residents."