Core units - Student Books | Vocational Textbookswillenbooks.co.uk/OLD_download/04485 Chapter 1.pdf(inbound) and outgoing (outbound) tourism; these can be deﬁned as follows: domestic

Core units

The components of travel and tourismTypes of tourismBefore you start learning about the travel and tourismindustry, it is vital to define the notion of tourismand introduce some basic terms that relate to yourstudies. According to the UK Tourism Society,tourism is:

“The temporary, short-term movement ofpeople to destinations outside the placeswhere they normally live and work, and theiractivities during their stay at thesedestinations. ”We can distinguish between domestic, incoming

(inbound) and outgoing (outbound) tourism; thesecan be defined as follows:

● domestic tourism – travelling within their owncountry, e.g. a student from Leeds going to theReading Festival

● incoming tourism – tourists from other countriescoming to the UK, e.g. a couple from Madridcoming to spend a weekend in London

● outgoing tourism – UK residents travelling to othercountries, e.g. a family from Bristol going on askiing holiday to Austria.

Depending on the purpose of travel, we can talkabout business trips, leisure trips or VFR (visitingfriends and relatives).

The six travel and tourism componentsThe travel and tourism industry consists of six maincomponents: accommodation providers, transportproviders, visitor attractions, tour operators, travelagents as well as a wide range of support services (tradeassociations, ancillary services, tourism developmentbodies and many others).

This unit will look at each component as well ashow they work together and how they depend on oneanother.

Accommodation providersAmong accommodation providers there are hotels(1–7 stars), hostels, motels, camping and caravansites, bed & breakfasts, holiday parks and campusaccommodation. Accommodation providers varygreatly in terms of the products and services theyoffer, the types of customer they attract, the pricesthey charge as well as location of their properties andtheir ownership.

While hotels, especially 4- and 5-star properties,may offer a wide range of services such as roomservice, concierge, a gym, as well as meeting andconference facilities, a small B&B will only provide aroom, sometimes with a bathroom outside the roomand one meal a day (i.e. breakfast).

Hotels are more likely to attract business visitorswhile caravan sites will cater for leisure visitors, suchas families. A guesthouse or a farmhouse may beowned by an individual, while hotels, such as theHilton or the Intercontinental, may be part of largeinternational chains with properties worldwide. A

Investigating travel and tourism 01Learning outcomesBy the end of this unit you should:

● know the components of travel and tourism,and how they interrelate

● know the roles and responsibilities of travel andtourism organisations within the different sectors

● understand how recent developments haveshaped the present-day travel and tourismindustry

● understand the trends and factors affecting thedevelopment of travel and tourism.

youth hostel offers budget accommodation, while a hotel typically aims at the higher end of the market.

Caravan parks or campsites tend to be locatedoutside city centres where space is not at a premium,while guesthouses and hotels often use city-centrelocations and their proximity to the various amenitiesand transport links as a selling point.

Scheduled airlines, such as British Airways or bmi,operate according to a fixed timetable and normallyoffer customers a wider selection of destinations(short-haul and long-haul). Services such as mealsand allocated seats are included in the price of theticket.

Low-cost airlines, such as Ryanair, easyJet and Jet2,are also a form of scheduled airline, as they operate toa set timetable, but they do not include as much inthe price of their tickets – such as food or allocatedseats – as their primary goal is to keep prices down.They also aim to save costs by having a very shortturnaround period (spending little time at the airport in between flights), offering a reduced baggage allowance and operating from regionalairports.

Charter flights, such as those offered byThomsonfly and Monarch, tend to be sold mainly aspart of a package holiday. Such airlines could eitherbe owned by a tour operator (Thomsonfly is ownedby Thomson, for example) or ‘chartered’ by a touroperator for the purpose of flying its holidaymakersto and from their holiday destinations, followingitineraries set by the tour operators.

Road operators, such as coaches, offer a convenientand inexpensive way of travelling in the UK or to thecontinent. National Express and its continentaldivision, Eurolines, offer a wide selection of routeslinking major UK and European cities at affordableprices as long as you do not mind taking longer to getto your destination.

BTEC National Travel and Tourism4

Fig 1.01 The Savoy hotel, London

Fig 1.02 A campsite

ACTIVITYInvestigate and briefly describeaccommodation providers in terms ofownership, products and services,prices and location.

Transport providersTransport providers can be divided into road, rail, airand water transportation. Each has its owncharacteristics, advantages and disadvantages.

Air transportation, which mainly developed afterthe Second World War, can be divided into scheduled,charter and low-cost airlines.

Road travel, however, is dominated by private carsas well as hired vehicles. The largest car-hirecompanies – Hertz, Avis, Alamo and National – offera selection of different types of vehicles (e.g. smallcars, convertibles) for various durations (one day orone week), often including insurance and charging anall-inclusive price.

Rail operators, such as Eurostar and Virgin Trains,provide a fast and comfortable way of travellinglonger distances in the UK and in Europe. Many traincompanies have now upgraded their trains, providingservices for business travellers in their first-classcompartments.

Sea operators such as ferries (Brittany Ferries, SeaFrance) link a number of British ports, such as Dover,Portsmouth and Fishguard, with continental Europe,Ireland and the Channel Islands, and provide searoutes as an alternative to air transport. Ferries haveundergone many changes in recent years, particularlyfollowing the opening of the Channel Tunnel as theythen had to compete with another form of transport.There are also non-sea-going ferries – for example,across the River Tyne.

Investigating travel and tourism 5

ACTIVITYInvestigate the products andservices, routes and vessels of ferryoperators.

Cruises tend to provide a holiday experience ratherthan being purely a form of transportation. Moderncruise ships now offer a wide range of services onboard such as bars and restaurants, sports facilities,shops and entertainment. They provide completeholidays for a variety of customers.

ACTIVITYUsing the internet as well as othermedia such as newspapers, TV orradio, research recent developmentsin the transport sector. Be able to present twodevelopments during a class discussion.

Fig 1.03 Alton Towers theme park

There are also attractions based on events, whichattract tourists to a destination or region. Examplesinclude cultural events such as the Venice FilmFestival or sporting events such as the LondonMarathon or the Olympics.

Attractions such as the National Gallery or the BritishMuseum may offer free admission, while others chargean entrance fee (e.g. Madame Tussauds or ThorpePark). Paid-for attractions tend to be privately ownedwhile free attractions are usually publicly owned.

Tour operatorsTour operators combine into holidays the variousproducts and services offered by travel and tourism

Visitor attractionsVisitor attractions can play a large part in adestination’s success. They attract visitors andencourage them to stay at a destination longer, thusincreasing visitor spending.

There are both natural and man-made attractions.Among natural attractions there are Areas ofOutstanding Natural Beauty (AONBs), NationalParks, beaches, lakes and beautiful landscapes.

Man-made attractions include purpose-builtattractions such as theme parks (e.g. Alton Towers),museums such as the British Museum and heritageattractions such as Maritime Greenwich, galleries (e.g.Tate Britain), stately and historic homes, cathedrals,ornamental gardens, and castles. Such attractions areoften owned and/or managed by organisations such asthe National Trust or English Heritage.

companies and sell them as packages to customersaccording to customer preference, need and budget.Tour operators contract accommodation andtransport, negotiating lower prices due to the volumeof business they can guarantee. Large tour operatorsalso own hotels or airlines in order to have morecontrol over their capacity and offer morecompetitively priced services to their customers.

There is a wide range of packages offered by touroperators according to their customers’ needs andexpectations. These could be summer or winterholidays, short-haul destinations (reached within fivehours or less by plane from the UK) or long-hauldestinations (reached in more than five hours byplane from the UK), suitable for different age groups(i.e. young adults – Club 18–30, over-50s – Saga) oroffering different activities such as skiing, diving orhiking.

Tour operators can be divided according to thedestinations they offer. These could be: domestic,organising services for domestic tourists; inbound,organising services for tourists incoming to the UK;and outbound, organising services for UK residentstravelling abroad.

Tour operators can be further divided into massmarket and niche operators. Mass market operators,such as Thomson or Cosmos, offer holidays thatappeal to a large number of customers. These couldbe a two-week package in Spain or a week in theAlgarve during the summer months. The niche touroperators devise holidays that cater for customers’specific interests, such as Mediterranean cruises forlovers of ancient history with lectures as part of thecruise programme. The niche operator may also focuson a specific destination such as Essouira in Moroccoas opposed to the more established Agadir, or offer aparticular activity such as painting or wine-tasting inFrance.

Travel agentsTravel agents sell different travel and tourism services,such as holidays, accommodation only or train tickets.They also book flights, ferries or car hire, selladditional services such as travel insurance and


Fig 1.04 Tate Britain

ACTIVITYPrepare a list of 20 UK attractions.Identify whether they are natural orbuilt, privately or publicly owned, freeor charging an entrance fee.

Fig 1.05 Waterskiing

foreign currency, and offer advice about destinationsin terms of visas and health requirements.

Depending on the nature of their business, theymay operate in the following outlets:

● retail shops

● business shops or ‘implants’

● call centres

● online (e-tailers).

Travel agents may operate as independent outlets ifthey are not a part of a chain. Such shops arenormally run by their owners and often have a smallnumber of employees who typically offer a high levelof expertise. The majority of travel agents, however,belong to chains, whether multiples or ‘miniples’.

Multiple chains, such as Thomas Cook and GoingPlaces, are well known and have branches nationwide,while miniples are usually found in one region of thecountry such as Yorkshire and Lancashire.

Retail travel agents tend to be located in the highstreet or in shopping centres, which guarantee them ahigh volume of passing traffic. They predominantlydeal with leisure travellers, offering them the widerange of services discussed above.

Business travel agents deal with business travellers,offering them travel services and making travelarrangements for their trips. Their branches are oftenlocated on the premises of the companies they workwith and these are called implants. For example, thereis a small office of BTI (Business Travel International)UK on the premises of PricewaterhouseCoopers incentral London.

Where travel agents handle a large number of calls,they sometimes use out-of-town call centres. Due tolower labour costs, many companies open call centresoutside the UK – for example, in India. On the nextpage there is a case study of an innovative call centreidea implemented by Co-op Travel.

Because of these benefits, home-based virtualcontact centres constitute one of the fastest-growingtrends in the contact centre market.

“Industry experts estimate that by eliminatingoffice costs and the associated administrativeoverheads, the home-based contact centreoperates at around half the operating costs ofa traditional site-based contact centre …

Home-based agents enjoy a net benefitequivalent to a 15 per cent increase in salary –as a result of travel-to-work time beingeliminated, greater flexibility and associated work–life balance benefits. ”(Source: www.flexibility.co.uk, accessed May 2007)

Online agents have mostly developed during the lastfew years with companies such as Expedia,Lastminute.com, ebookers and Opodo. Thesecompanies take advantage of modern technologiesand customers’ preference for booking holidays fromthe comfort of their own homes via the internet.


Fig 1.06 Sunbathing

ACTIVITYUsing the ABTA (The TravelAssociation, www.abta.com) andAITO (Association of Independent TourOperators, www.aito.co.uk) websites – as wellas other sources – find ten different touroperators. Find out whether they are domestic,inbound or outbound, mass market or niche.

Support servicesTourism development and promotionTourism development and promotion are mainlycarried out by organisations in the public sector, asthey tend to be responsible for the support andpromotion of the private sector. Organisations suchlocal, regional or national tourist boards are normallyinvolved in such activities.

exchange. These enhance the customer’s experienceand often allow agents to increase their commission.

How the components interrelateThe chain of distribution in Figure 1.07 describes howtravel and tourism products and services reachcustomers. As the travel and tourism industry doesnot manufacture goods but offers services, at the topof the chain of distribution there are accommodationand transport providers and attractions. The servicesoffered by them are often packaged by tour operators,the wholesalers, and sold through travel agents, theretailers, to customers.


Case studyHow to run a call centre in the UK

We’ve all heard about the ‘offshoring’ of call centres:outsourcing them overseas, especially to the Indiansubcontinent – all made possible by newtechnologies. Even newer technologies, however,raise the possibility of ‘homeshoring’ – using home-based call centre agents in the UK as a cost-effective alternative.

While these virtual call centres (also calledcontact centres) cannot compete on labour costs,the reduction in property costs and telephonycosts, plus the advantage of having first-languageEnglish speakers is now making this a competitiveoption.

Having 630 ABTA-certified home-based operativesmakes the Co-op Travel Group’s Future Travelsubsidiary the largest virtual contact centre in the UK.And it is convinced of the benefits. According toPeter Healey, technical director of Future Travel:

“We’ve reduced staff churn by offering flexiblehome working to, for example, new mothersreturning to work part-time, or older peoplelooking to reduce their hours but not yet readyto retire. In the travel industry, an effectivehome working centre means that you keepvaluable knowledge and experience within the company. Being able to add or reduce lines to fit peak booking times, such asevenings and weekends, means that we can plan capacity. ”

ACTIVITYInvestigate and describe the rolesand responsibilities of VisitBritain.

Trade associationsTrade associations, such as AITO (Association ofIndependent Tour Operators), ABTA (The TravelAssociation) and GBTA (Guild of Travel ManagementCompanies) are organisations whose members areprivately owned travel and tourism organisations thatpay membership fees towards the running costs of theassociation. Trade associations, in exchange, look aftertheir members’ interests and represent their opinions.They also provide a set of rules for their members,often through a code of practice.

Ancillary servicesThese are services that are offered in addition to themain travel and tourism products as companies striveto deliver the best service to customers. These couldinclude travel insurance, airport parking and money

Hotels, airlines and other transport companies, and attractions

Tour operators

Travel agencies

Consumers

Fig 1.07 Traditional chain of distribution in travel and tourism

However, this is not the only way of distributing traveland tourism products and services; bothaccommodation and transport providers sell directlyto customers, who can book their services bytelephone or using their websites.

Customers can also use travel agents, who will booktransportation or accommodation directly withairlines or hotels without involving a tour operator.Many tour operators have also taken advantage of theopportunity presented by the internet and starteddistributing their holidays directly, excluding travelagents completely.

Recent years have seen many other changes tothe structure of the travel and tourism industry. Anumber of organisations in travel and tourism havemerged, formed partnerships or taken over otherorganisations. Intercontinental Hotels took overother holiday chains – for example, Holiday Innand Crowne Plaza. This is an example ofhorizontal integration, which means thatintegration happened at the same level in the chainof distribution.

Organisations also merge with others ondifferent levels in the chain of distribution – forexample, a tour operator can take over an airlineor a chain of travel agencies. This is called verticalintegration. An example of vertical integration isThomson (a tour operator) which boughtBritannia Airways and re-branded it asThomsonfly.

The roles and responsibilitiesof organisations within thedifferent sectorsThe majority of organisations in the travel andtourism industry belong to the private, for-profitsector. This also means that the majority oforganisations are funded privately, either through thesale of goods and services or bank loans required tostart or develop the company. In the case of largecompanies, such as British Airways or the VirginGroup, the funds could also come through the sale ofshares. The shares may go up or down in valuedepending on how the company performs. We callsuch companies public companies as the public canbuy their shares, not because they are a part of thepublic sector.

The main objective of businesses, and therefore thereason why companies trade, is to make a profit and


ACTIVITYFind current examples of recentmergers, partnership and integration.

Companies join together in order to gain greatermarket share and offer a wider range of products totheir customers, as well as find other ways ofdistribution so they can make their operations moreeconomical. More economic operation gives them theopportunity to offer customers lower prices and thuscompete successfully in the very competitive traveland tourism market.

There are also other forms of working together. Forexample, airlines form alliances, which is a form ofpartnership. This does not involve buying oneanother. Instead they liaise in order to offer a widernetwork of routes and destinations. Travel agents,often independents, join networks such as Advantagein order to increase their buying power, negotiatebetter commission levels and thus compete with themultiples.

ACTIVITYInvestigate alliances among airlinessuch as Star Alliance and One World. How do they work? What are thebenefits for customers?

Assessing the outcomeA small number of travel and tourism companiesare recruiting for junior positions. The positionsare available at a hotel, a tour operator and anonline agent, a visitor attraction and a localTourist Information Centre (TIC). As part of theselection process representatives of thosecompanies wish to assess your understanding ofthe travel and tourism industry, your researchskills and most importantly your currentknowledge of all the components as well as howthey work together. Prepare a report that coversthe above issues.

● Describe (giving examples, including domestic,inbound and outbound tourism) thecomponents of the travel and tourism industry(P1).

● Describe the ways that components of traveland tourism interrelate (P2).

stay in business. This may be achieved in many ways –for example, by ensuring good customer service socustomers come back and make recommendations totheir friends and family. By doing this, companiesensure sales without spending much on promotion,thus maintaining higher profits. A lot of touroperators ask customers to complete questionnaires atthe end of their holidays or feedback cards at the endof their stay at a hotel to establish what met customerexpectations and what could be improved.

These objectives can also be achieved by offeringcompetitive prices. Profits may not be high but salesare likely to increase. A number of travel companiesclosely watch the flight or holiday prices offered bytheir competitors in order to ensure they can stillattract customers.

Another way of ensuring profits is by tightlycontrolling business expenses – for example,operating from cheaper premises or recruiting stafffrom abroad. Thomson recently moved itsheadquarters from Camden, London, to Luton, whilea number of hospitality companies now recruit in thenew European accession states offering salaries lowerthan those offered to staff hired in the UK.

Private-sector companies also need to maximisesales. This can be done through promotion andadvertising, which can be quite expensive, or througha selection of discounts and carefully set prices as wellas through developing customer loyalty. This is alsoachieved through bringing new products onto themarket, ensuring customer interest in your offer.

Companies also aim to increase market share. Thisis necessary to reduce the impact of competition andincrease market control. As discussed earlier, this canalso be achieved through horizontal integration.

Organisations are expected to provide service tocustomers and to other organisations. This isparticularly true in the non-for-profit sector wheretourist boards offer services to organisations in thefor-profit sector by promoting them. They also offerinformation about their services to clients. Anexample of this could be a TIC (Tourist InformationCentre), which may have a selection of leaflets onB&Bs available in the area. These are given tocustomers interested in finding information aboutplaces to stay for the night.

Organisations in travel and tourism are expected tooperate in compliance with various regulations. Thesecould be industry regulations imposed on theirmembers by trade associations such as ABTA. ABTA

members need to follow the Code of Conduct thatrequires, for example, travel agents to respond to acomplaint within 28 days.

The CAA (Civil Aviation Authority), theorganisation responsible for regulating airports andairlines, ensures that all of them meet safetyrequirements. It also ensures that all operatorsoffering package holidays that include air travel havethe Air Travel Organisers Licence (ATOL). This meansthat if the company goes bankrupt, customers willrecover their deposits and their booking may be re-protected (another tour operator will handle thecustomer’s reservation) using the bond money.

Regulations and legislation do not have to beindustry-specific. All companies have to comply withthe DDA (Disability Discrimination Act) and DataProtection Act. Their promotional activities, whetherin the form of adverts or brochures, have to adhere toAdvertising Standards Agency (ASA) guidelines,which expect all promotional materials to be legal,decent, honest and truthful. Failure to do so mayresult in fines and/or the promotional material havingto be withdrawn.

In addition, all organisations (for-profit and not-for-profit sector) have to comply with employmentlaw and issue employees with contracts, offer thempaid holiday, maternity leave and other contractualarrangements.

The for-profit sector includes organisations such asairlines, rail operators, coach companies, hotels,holiday centres, theme parks, tour operators, travelagents, car-hire companies and many others. The not-for-profit sector includes the majority of publicorganisations, regulatory bodies and conservationgroups. Their main role is to support and promotethe for-profit sector for the benefit of all stakeholders– for example, employees, customers, otherorganisations and the government. Their fundingcomes mainly from the government through theDepartment for Culture, Media and Sport (DCMS) inthe form of grants. Their funding may also comefrom donations, National Lottery grants ormembership fees. This means they are not involved inselling and competing for customers although theymay subsidise their income by the sale of souvenirs orpostcards, renting out their premises, charging fortraining, etc., or reinvesting the proceeds ofcommercial operations such as shops.


The main tasks of not-for-profit organisations are:

● introducing common standards

● supporting the travel and tourism industry

● preparing statistics

● promoting destination to potential visitors.

Increasing numbers of people were also buying cars,which allowed them to take holidays in the UK or onthe continent. Because of this increased mobility, a lotmore people were also taking short breaks.

Faster and bigger passenger aircraft weredeveloped, which enabled more and more people totravel to destinations previously out of their reach. Inthe past, they would have to travel there by sea,which took a long time and was thereforeexpensive.

As Britain was rebuilt after the war, Britishconsumers had more disposable income, which theyspent on travel, and on foreign travel in particular.This, in combination with the development ofaircraft, led to the creation of package holidays.


ACTIVITYIdentify the roles and responsibilitiesof six selected travel and tourismorganisations. Identify their sources offunding.

Assessing the outcomeThe interview panel from the previous assignmentnow wants you to demonstrate your knowledgeof the roles and responsibilities of travel andtourism organisations from different sectors.

● Describe the roles and responsibilities of traveland tourism organisations from the profit andnot-for-profit sectors (P3).

Recent developments intravel and tourismAlthough people have always travelled, however easyor difficult it was, it is only in the past 50 years thatthe travel and tourism industry has really developed.

In the past, people had different reasons to travel;for example, a lot of trips were taken for VFRpurposes (visiting friends and relatives) or to trade,while leisure travel now dominates the market,offering a wide variety of transport, accommodationand holidays.

Many factors influenced the development oftourism after the Second World War (1939–45). Themain ones are related to money, time and technology.

First, the annual ‘two-week’ holiday (with pay) wasestablished. This meant that for the first time peoplecould take two weeks off a year and still be paid forthe time they were on holiday. Naturally, thisencouraged many more people to travel.

Fig 1.08 UK tourists on a British beach in the 1940s

ACTIVITYInterview some of your older relativesor family friends and find out wherethey travelled and why.

LegislationThe government saw the potential for tourism togenerate income for the British economy. TheDevelopment of Tourism Act 1969 confirmed the

EDEXCELCHANGE

public sector’s involvement in tourism and the role itwas going to play – one of encouraging the provisionand improvement of tourist amenities as well asencouraging people to visit Britain and people livingin Britain to take their holidays there. This was to bedone by appointed bodies: the English, Scottish andWelsh Tourist Boards as well as the British TouristAuthority.

Further legislation, such as the Transport Acts 1980and 1985, contributed to the development of tourismthrough deregulation and privatisation.

Further pieces of legislation, this time imposed bythe European Parliament, further influenced thedevelopment of tourism. The Package TravelRegulations of 1992 subjected all tour operators tostricter financial controls and imposed responsibilityon them for their customers. These regulationsrequired all operators offering air packages to allocate asum of money (a bond), calculated on the basis of theirturnover, to be placed in the bank in case of financialdifficulties. The bond could then be drawn on torefund customers’ deposits, pay suppliers or evenreturn passengers otherwise stranded abroad safelyhome.

More recently, legislation such as the DisabilityDiscrimination Act 2004 has had a great impact ontravel and tourism organisations, particularlyaccommodation and transport providers andattractions, in terms of the necessity to increaseaccessibility for disabled customers.

Following the introduction of Air Passenger Duty in1997, the government decided to increase it againfrom February 2007. We are still waiting to assess thetrue impact of this increase on all air travel.

“The hidden costs of flying will rise significantlyfrom February as UK airport departure taxesdouble. Chancellor Gordon Brown’s pre-budget statement announced that economyclass passengers will pay £10 on all domesticand European short-haul flights, long haulerswill pay £40 and business and first classtravellers will have to pay £40 for short-hauland £80 for long-haul flights.

Whether the doubling of airport tax will actuallyget people to switch to trains – or to not travelat all – is uncertain. Reactions were fairlypredictable: environmentalists said it wasnowhere near enough, but the angry aviationindustry said it was being treated like a cashcow. ‘Air passenger duty provides the Treasurywith extra funds for general public expenditurewithout any benefit to the environmentwhatsoever,’ said a British Airways spokesman– ignoring the fact that aviation’s contributionto climate change is soaring and is expected to get far worse. ”(Source: John Vidal, The Guardian, Saturday, 9 December

2006, copyright Guardian News & Media Ltd 2006)


Fig 1.09 UK tourists on package holidays in Spain in the1970s

ACTIVITYSelect three pieces of recent legislationrelating to travel and tourism andanalyse their impact on the industry.

Product developmentIn order to ensure a certain level of sales, repeatbusiness and competitiveness, companies in travel andtourism have to develop their product to meet theever-changing expectations of their customers.

One of the fastest-changing sectors is the airlineindustry. The most significant change recently hasbeen the boom in low-cost airlines. These offerinexpensive flights to many European cities. Theprinciple behind this is explained in the earlier part of

this unit. This increased competition on Europeanroutes not only in terms of price but also quality ofservice, as scheduled airlines responded by attemptingto offer better value for money.

includes transportation, accommodation, all food anddrink, activities and entertainment.

As people started taking more holidays, but shorterin duration, more and more operators started offeringcity breaks.

Destination developmentApart from the well-established short-hauldestinations, such as Spain and Greece, graduallylong-haul destinations were brought onto the market.Florida, with its theme parks, national parks andwarm climate throughout the year became verypopular with families. Destinations such as Goa andThailand offered an opportunity for beach holidays inlong-haul locations. Inexpensive accommodation,food and drink at these destinations also contributedto their popularity.

Recently, Eastern European destinations, such asPrague and Croatia, have been added to the variety ofpopular destinations in Europe, while Cuba seems tobe a long-haul hit.

Destinations themselves have started preparingbetter to receive their visitors: tougher health andsafety measures have been introduced, following theEU Package Travel Directive, making operators


Case studyIs low price the only way forwardon short-haul routes?

In 1998, British Airways launched a comprehensiverange of new services and benefits for ‘WorldTraveller’ passengers. New features included seatswith adjustable headrests and footrests, and moreknee room; and personal video screens for everypassenger.

Changes were also introduced on long-haul routesand in cabins, which normally generate the majorityof airline revenue on flights – business class and firstclass.

(Source: www.bamuseum.com, accessed May2007)

Case studyHow to travel in comfort with BA

In August 2000, new Club World ‘flying beds’ wereavailable on the Hong Kong route. The seats hadbeen well received by customers on the Heathrow–New York JFK route, with significant rises incustomer satisfaction ratings for cabin crew,catering, sleep, privacy, comfort and space.


Case studyWhat is World Traveller Plus?

In January 2000 British Airways announced theintroduction of a new cabin class, World TravellerPlus. The cabin would offer more space andfacilities than World Traveller for a premium on topof the full World Traveller fare.

Apart from the extra leg room, passengers werealso offered:

● double hand-baggage allowance (two pieces,12kg total)

● separate cabin with a maximum of five rows; apersonal in-seat entertainment system; laptoppower point and individual phone.

World Traveller Plus opened for sale for travel from29 October, 2000, for services between LondonHeathrow and New York JFK, Hong Kong and SanFrancisco.


The airline industry was not the only oneimplementing change: a new fast train called Eurostar,linking London with Paris and Brussels, wasintroduced in 1994, using the undersea tunnel builtbetween Britain and mainland Europe, providing afast transport route for both foot and car passengers.

Since the introduction of the first two-weekholidays to Spain, tour operators have also broughtvarious innovations to the market. Apart from thechanges already discussed earlier in this unit,customers can now book an all-inclusive package that

● CRSs (computer reservation systems – used byairlines)

● Global Distribution Systems (e.g. Galileo,Worldspan, Sabre and Amadeus – used by travelagents, tour operators, airlines, car-hire companiesand ferry operators).

Other technological advances are linked to theinternet. Companies such as airlines, hotels and touroperators offer online booking facilities on securewebsites.

In order to allow customers to ‘experience’ theproducts and services offered by the travel and tourismindustry, ‘virtual tours’ were devised. These are used byhotels so potential customers can view rooms, commonareas and other facilities available on the premises.

Visitor attractions such as the Globe Theatre inLondon or Chessington World of Adventures also usesuch tools to allow customers to have a more tangibleexperience of the services on offer, prior to booking,encouraging them to make a reservation.

Further developments can be observed in theairline industry: e.g. e-ticketing, paperless tickets, self-check-in at airports and online check-in. These help


Fig 1.10 Thailand, a popular long-haul destination

Fig 1.11 Croatia, a popular new destination

responsible for their suppliers. Some destinations alsoaddressed the issue of crime, thus improving theirchances of attracting regular business. In manyestablished destinations, such as Spain, there havebeen improvements in infrastructure, facilities andattractions on offer, making the holidaymaker’s stayeasier, more enjoyable and providing moreopportunities for increased spending.

ACTIVITYABTA identifies some destinationswith potential for growth. Readthrough this section of ABTA’s reporton its website using the link below and find outwhich destinations these are.What could contribute to their growth inpopularity?

(Source: www.abtamembers.org/press/kit/trends.htm, accessed May 2007)

Technological developmentsVarious booking systems were created in order toaccelerate communication between organisations intravel and tourism and improve the distribution oftheir services:

● ViewData (used by travel agents and touroperators)

reduce operational costs such as postal bills as ticketsno longer need to be posted or replaced if lost in thepost. This also reduces the number of check-in staffrequired as check-in is done remotely or bypassengers themselves.

Apart from wide-bodied jets such as the 747introduced by Boeing in 1969, with its cruising speedof 600 miles per hour and a non-stop range of 7200miles, larger planes are now being developed. TheAirbus A380, with its cruising speed of 500 miles perhour and its 8000 mile range, has already beenordered by a number of airlines, which may either useit to carry more passengers, or to carry passengers inmore comfort.

In 1968, some ferry companies introducedhovercrafts, which offer a faster sea connection withFrance thus competing with airlines, and now, morerecently, the Channel Tunnel.

Lifestyle changesThe growth of tourism can also be attributed tolifestyle changes. Higher levels of urbanisation andeducation encourage us to travel more and further inpursuit of different cultures; having learnt more, wewould now like to see it for ourselves. Increased levelsof mobility resulting from car ownership as well asthe increasing availability of airports, seaports andrailway connections help us get around more easily.

Overall we also have more leisure time than ourgrandparents did. Having various householdappliances performing most of our chores andenjoying longer paid holidays gives us more choice asto how we want to spend our leisure time.

Britain is now an ageing society with an increasingnumber of older people who have more spare time andare willing to spend it travelling. There is now agrowing number of companies offering travel andtourism services to mature travellers, e.g. SagaHolidays accepts bookings from customers who are 50or older, and Page & Moy provides tours to people 45+.

With the increase in the number of single anddivorced people, holidays for singles seem to be onthe increase, with companies such as Solos Holidaysor justyou.co.uk leading the way.

Consumer demandOverall customer demand for tourism seems to begrowing, with increasing numbers of customers being

more travelled, having higher expectations, beingaware of their rights and not afraid to complain ifnecessary.

The number of incoming trips has increased too.According to the Office of National Statistics, in 2005overseas residents made a record 30 million visits tothe UK, 2.2 million more than in 2004. While theywere here, they spent a record £14.2 billion, anincrease of £1.2 billion on 2004.

The number of outgoing trips has also increased.UK residents made a record 66.4 million visits abroad,an increase of 4 per cent on the previous year. UKresidents also spent a record amount abroad: £32.2billion – an increase of 6 per cent on 2004.

This shows that the number of trips taken by UKresidents is greater than the number of touristsreceived in the UK in 2005. Moreover, the amount ofmoney spent by UK residents on their outboundholidays is also greater than the amount of moneyearned from our incoming visitors. This difference,otherwise called the balance of payments, is negativeand adds up to £18 billion. The balance of paymentsis the relationship between tourism import(outbound trips) and tourism export (incomingtrips); it has been negative in Britain for a number ofyears and seems to be increasing every year.

According to www.tourismtrade.org.uk (accessedMay 2007), spending by domestic tourists (i.e.spending by UK tourists within the UK) has nowreached the figure of £11.5 billion, with visitors takinga total of 59.3 million trips annually.

Tourism is considered to be one of the largestindustries in the UK, approximately 3.5 per cent ofthe UK economy, and was worth approximately £74.2billion in 2003.

The number of jobs in travel and tourism alsoseems to be on the increase, to match customerdemand for travel and tourism products and services.According to Labour Market Trends, September 2004:

● there are an estimated 1.4 million jobs in tourismin the UK, some 5 per cent of all people inemployment in the UK

● approximately 130,400 of these jobs are in self-employment.

Particular growth has been registered in thehospitality and accommodation industries with evengreater growth predicted before 2012 when Londonwill be hosting the Olympic Games.


telephone or website, there is now the option ofbooking via mobile phone, at present restricted toflights only due to the complexity of other services.

The rise in independent travel looks set to continuedue to the increasing use of the Internet. According toABTA, the figures for internet use are:

● 52 per cent of the British population have access tothe internet at home

● 44 per cent of adults have used the internet forinformation about travel and accommodation

● 53 per cent are likely to book a holiday on theinternet over the next two years.

This trend also leads to an increased number of so-called ‘unpacked’ packages – independentarrangements where travellers often combinetransport and accommodation for themselves,creating a holiday that meets their particular needs.


Assessing the outcomeHaving completed your previous tasks, the panelnow wishes you to describe the recentdevelopments that have formed the travel andtourism industry as we know it.

● Describe four recent developments (from the1960s onwards) that have shaped the present-day travel and tourism industry (P4).

Trends and factors affectingthe development of travel and tourismIt is now time to investigate the trends in the travel andtourism industry, attempting to predict where it maygo during the next few years. Some of thedevelopments discussed in the earlier part of this unitwill provide the basis for this prediction – for example,the number of holidays taken by UK residents seemsto be on the increase, with the majority of peopletaking more than one holiday a year.

Customers now have a wider range of bookingmethods of which they can take full advantage.According to an ABTA report:

“The number of respondents who said theywere likely to book via the internet in the futurehad risen by 4 per cent compared with 2002.According to Mintel despite a slowing growthin internet penetration, the way in which theinternet is being used and accessed ischanging. Mintel reported that travel agentscontinued to be the most popular bookingmethod for holidays abroad. However, this waschanging and the proportion of holidaymakersusing this method decreased by 12 percentagepoints to 49 per cent between 1999 and 2003.Travel agents were gradually losing marketshare to direct bookings through touroperators (up 3 percentage points) and theincrease in independent bookings, particularly those made through the internet. ”(Source: www.abta.com, accessed May 2007)

Apart from the traditional methods such as bookingvia travel agent, Teletext, or tour operator either by

Case studyWhat kind of holiday do we want?

In spite of summer and winter sun holidays’,domination of the package holiday market, agrowing number of people are buying activitypackages and adventure holidays …

Beaches for relaxation are the number onerequest for luxury seekers, whether that’s ‘barefoot’or ‘glitz’, but often clients are looking for somethingmore exciting for secondary breaks. Big sportingevents have become popular, along with luxuryskiing, diving, sailing, golf and spa breaks.Increasingly, ‘experiential’ holidays that areaspirational, exclusive and unknown are beingsought. Round-the-world travel, going to Antarcticaor finding gorillas in Uganda are not only expensive,but are literally quite difficult to do and deliberatelydo not appeal to everyone.

(Source: www.abta.com, accessed May 2007)

There has been steady growth in the use of regionalairports. This is mainly due to the continuingexpansion of low-cost airlines. It is estimated that thelow-cost airline sector in Europe carried around 80million passengers in 2004, of which over 60 millionstarted or ended their journey at a UK airport.

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Factors influencing customer choiceNatural disasters such as hurricanes, tornadoes,earthquakes, droughts and floods as well as volcanoeruptions are classified as natural disasters. To acertain extent, they influence customer choice ofdestinations as nobody wants to holiday in an areastruck by a natural disaster, particularly if the essentialinfrastructure has been destroyed.

Although travel and tourism organisations cannotavoid natural disasters, they can strive to minimise theirimpacts. Tourists tend to avoid destinations such as theCaribbean during the hurricane season and theindustry attempts to encourage travellers by loweringprices during that period.

Every now and then there is a health scare whichdissuades travellers from visiting some destinations.Foot-and-mouth disease cost Britain a lot of inboundvisitors, estimated at £8.8 billion according towww.lga.gov.uk (accessed May 2007). The outbreak ofSARS affected tourism to and from Hong Kong andCanada where the virus spread. The latest example ofan epidemic was avian flu, which frightenedcustomers away from destinations such as Turkey.

The most unexpected threat at present seems to beterrorism. Events in New York, Madrid and Bali actedas an obvious deterrent for a number of visitors tothose destinations. Terrorist atrocities, and adestination’s ability to recover from them may be seenas a real popularity test. Some destinations, in spite ofattacks, still attract significant visitor numbers andtourist confidence seems unaffected.


ACTIVITYLondon Luton Airport is one of theUK’s fastest-growing airports, withpassenger numbers of 7.5 millionduring the calendar year 2004, an increase of400 per cent in ten years.Read about the potential growth of Luton Airporton its website and identify reasons for itspopularity and success.(Source: www.london-luton.co.uk, accessedMay 2007)

Case studyBird flu in Turkey?

Turkey was. . .tipped to be a front-runner in theshort/medium-haul market this year, but reportsabout avian flu in the eastern parts of the country inJanuary 2006 badly affected the early bookingperiod, even though these outbreaks amongstpoultry would have no effect on tourists.

(Source: www.abtamembers.org, accessed May 2007)

Case studyAre we still scared to go to Egypt?

Bookings to Egypt have again been high, despitethe terrorist attack in Sharm el Sheikh in July 2005.Growth has been driven by visits to this top divingdestination, even though visits to the ancient sites ineither Cairo or the Valley of the Kings are stillpopular. …the exciting scuba diving and year-roundsunshine of the Sinai desert present great value formoney and excellent hotel accommodation is alsosecuring growth.

(Source: www.abtamembers.org, accessed May2007)

ACTIVITYRead through reports in the press ofother destinations affected by naturaldisasters, health warnings orterrorism. Assess the damage caused by them.

More travellers are now choosing their tour operatorsaccording to their commitment to environmentalissues, therefore some tour operators have learnt tomake this their selling point.

Case studyHow committed is AITO?

At AITO we take our responsibilities to theenvironment, to local cultures and to sustainabilityvery seriously. AITO members recognise that thedestinations where they provide holidays are the lifeblood of the industry.

(Source: www.aito.co.uk, accessed May 2007)


ACTIVITYRead more about AITO and find outwhat its contribution to responsibletourism is.

With the rise in popularity of low-cost airlines,particularly in Europe, fares have tumbled due to theincreased competition and a revised approach toairline operations. Yet cheap travel may soon be athing of the past due to the proposed ‘green’ taxes onairlines, which are considered one of the greatestpolluters. Other forms of transport, particularly thoseconsidered to be ‘greener and cleaner’, such as rail,may start competing more with air travel.

Development of tourismTourism clearly continues to grow, in spite of periodsof low demand and the temporary effects of terrorismand natural disasters. With the increase inglobalisation, business travel, especially the conferenceand events market, is on the increase.

There are new generating markets such as Russia,India and China, which the UK is planning to attract.

Cruising continued to grow in 2005 and nowmakes up about 5 per cent of the travel industry.There has been a 13 per cent increase in cruisepassengers choosing to sail from UK ports.

Case studyThe future of cruising

It is estimated that 1.5 million British people will takea cruise by 2008. A steady stream of new ships willensure that a keen cruiser will continue to haveplenty of choice. Cruises can be traditional andformal – Cunard has announced that there will be athird Queen to join its fleet, Queen Victoria, or theycan be activity-based and informal – such as OceanVillage – and there are many ranges in between.Meanwhile Royal Caribbean Cruise Lines hasannounced the building of a 5400 passengermegaship.

(Source: www.abtamembers.org, accessed May2007)

Assessing the outcomeHaving reached this stage of your interview, youare now asked to describe the key trends andfactors that are likely to have an impact on thedevelopment of travel and tourism.

● Describe three key trends and three factors thatare affecting or are likely to affect thedevelopment of travel and tourism (P5).

Improve your gradeIf you are reading this part of the unit, you are clearlyinterested in achieving higher grades. To do so youneed to be clear how to get there. This section of theunit endeavours to give you that understanding.

First, we encourage you to do all the activitiesprovided in this unit. They provide a firm basis foryour understanding of the travel and tourismindustry and for your further research, which will leadyou hopefully to a merit or distinction. Without basicknowledge, you cannot achieve higher grades.

You can start off by working on your pass criteriaand gradually get to a merit or distinction. Forexample, criteria P1, P2 and M1 are linked together.While for P1 and P2 you will be describing (sayinghow things are), for M1 you are expected to explain(give reasons, answer the why and how questions). If youare not sure what you are expected to do, check theGlossary at the back of the book to get a better idea.

Having completed all the activities, you will be ableto describe different accommodation providers interms of their products, services, prices and location.This will be sufficient for a pass grade, while headingfor a merit you give reasons why accommodationproviders work with tourist boards in this country toattract domestic customers. Another example couldbe why tour operators work with travel agents andhow this relationship has recently been changing. Thisway you will satisfy the requirements of the meritcriterion.

When you preparing evidence for P3, with someextra work you will also gain M2 and possibly D1.Your task in this textbook requires you to research sixselected organisations and identify their roles andfunding. If you spend more time on this task andcompare the roles and responsibilities of travel andtourism organisations from the profit and not-for-profit sectors, you will satisfy the merit criterion.

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Make sure, however, that you select a variety oforganisations so there are some similarities as well asdifferences. If you then wish to take it further, andattempt a distinction, you need to assess (make valuejudgements) how the roles and responsibilities oftravel and tourism organisations from the profit andnot-for-profit sectors affect their operations. Forexample, if not-for-profit companies receive moneyfrom the government, how does this affect theiroperation? Do they achieve their objectives, thussatisfying their stakeholders?

When working on P4 you can also work on P5, assome recent developments will influence theimmediate future of travel and tourism so you canuse them to form predictions and trends. This part ofyour assignment requires a lot of research as you maynot be familiar with various issues and may notunderstand their significance immediately. Ask yourtutor for clarification but also be prepared to do somefinding out yourself and do not give up easily.Remember, you are aiming for higher grades! Choosedevelopments that interest you, as you will find iteasier to learn about them. You do not need to coverthem all: choose the ones you understand and are ableto explain (give reasons, answer why/how questions).For D2, you need to recommend (make suggestions)and justify (give good reason) how the travel andtourism industry could respond to key trends andfactors affecting the future development of travel and

tourism. If you do not have many ideas of your own,speak to people who work for travel and tourismorganisations as they deal with similar issues on afairly regular basis. Don’t be put off: try more thanone contact, get in touch with the Tourism Society oryour local tourist board. Eventually, they will give yousome help and inspiration.


Top tips● You must know the components of travel and

tourism before you can begin to explain howthey interrelate.

● You must know the sectors, roles andresponsibilities of different organisations beforeyou start to compare them or assess theirimpact.

● You must know about developments before youcan explain their impact and recommend howto respond to them.

● You must know what evidence you need toproduce (in what form, i.e. report, presentation)and on which topic (e.g. components of thetravel and tourism industry).

● You must be clear as to what you are expectedto do (e.g. describe, explain, assess) to achieveeach criterion.

● You must research and use examples tosupport your statements.

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Documents

Core units - Student Books | Vocational Textbookswillenbooks.co.uk/OLD_download/04485 Chapter 1.pdf(inbound) and outgoing (outbound) tourism; these can be deﬁned as follows: domestic