Module (I) Introduction to Tourism

Module (I)

Introduction to Tourism

1

June 12, 2018

Key Topics

• Tourism concepts and principles

• Tourism industry sectors and distribution channels

• Impacts of tourism: economic, social cultural, and environmental impacts

• Tourism organisations

Tourism Concepts and

Principles

Terminology and Definitions

Travel

– Encompasses all kinds of journey from one place to another, e.g. travel to work, reside, study or transit etc.

Tourism

– Comprises travelling to and staying in places

outside the usual environment for less than one year for non-remunerated activities (UNWTO)

4

Types of Tourism

Domestic Tourism

– Trips made by residents within their countries

International Tourism

– Trips involve between 2 or more countries.

Inbound Tourism Outbound Tourism

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Activity 1:

Types of Tourism

Discuss the following cases and decide:

(1) who is a tourist; and (2) whether he/ she is an outbound tourist, inbound tourist or domestic tourist;

from the perspective of Hong

Kong

Cases

1. Mr. Chan flies from New York to Hong Kong for his summer holidays.

2. Anna travels from Guangzhou to Shanghai to visit her grandparents for a week.

3. Joan takes a business trip from Hong Kong to

Beijing for two days, and then flies to London

with her husband for the Christmas holidays.

Cases (cont’d)

4. Peter, who stays in Sydney, goes to San

Francisco to study for 6 months and transit in Hong Kong.

5. Mr. Wong has been relocated to work in Taipei for a year.

6. May and Joyce go to Shenzhen for shopping and return back to Hong Kong on the same day

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Put a  in the appropriate box

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Case Tourist (Yes / No) International Domestic Inbound Outbound

1

2

3

4

5

6

Put a  in the appropriate box

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Case Tourist (Yes / No) International Domestic Inbound Outbound

1 Yes  

2 Yes 

3 Yes  

4 No

5 No

6 No

Tourism Figures

World’s Top Tourist Destinations (UNWTO, 2017) https://www.e-

unwto.org/doi/pdf/10.18111/9789284419029

Infographics – International Tourism 2017 (UNWTO, 2017)

http://media.unwto.org/content/infographics

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International Tourism Timeline 1950-2030

http://media.unwto.org/content/infographics

Market Share by Region of Tourist Arrivals and Tourism Receipts

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http://media.unw

to.org/content/inf

ographics

Tourist Arrivals and Tourism Receipts by Region

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http://media.unw

to.org/content/inf

ographics

Mode of Transport and Purpose of Visit

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http://media.unwto.org/content/infographics

World’s Top Tourism Earners

http://media.unwto.org/content/infographics

World’s Top Tourism Spenders 2017

http://media.unwto.org/content/infographics

Why Tourism Matters

http://media.unwto.org/content/infographics

Tourism is Much More Than You Image

http://media.unwto.org/content/infographics

Types of Tourist

Travellers

– Any person who is taking a trip within or outside his /her own country of residence irrespective of the purpose of travel or means of transport

Tourists (Overnight Visitors)

– A person who visits a place outside his / her

residence and working place, and stays for at least 24 hours, for the purpose of leisure or business

– International / domestic tourists

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Types of Tourist (cont’d)

Excursionists (Same-day Visitors or Day Trippers)

– A person visits a place and stays for less than 24

hours, for the purpose of leisure or business, but not for transit

• International – e.g. cruise visitors

• Domestic – e.g. Shenzhen visitors

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Classification of Tourists

• Cohen’s Classification

• Plog’s Theory

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Cohen’s Classification

Cohen’s Classification:

Non-institutionalized tourists

– The drifter – The explorer

Institutionalized tourists

– The individual mass tourist

– The organized mass tourist

Cohen’s Tourist Typology

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Institutionalized Tourism

Highly catered by the tourism industry

The Organized Mass Tourist

Not adventurous, seek for familiar and

comfortable environment (environmental bubble), purchase packaged tours

The Individual Mass Tourist

Similar to the organized mass tourist, tours are arranged by a travel agency except greater flexibility and control of tour arrangements

Non-institutionalized Tourism

Loosely attached to the tourism industry

The Explorer

Self-arranged tours to unusual places. Look for comfortable sleeping facilities and reliable means of transportation

The Drifter

Live the way the locals live, minimal or no connection with the tourism industry

Examples

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Institutionalized Tourism

– Cruise packages

– Special interest tours (SIT) – Incentive tours

The Individual Mass Tourist – Self-drive tours

– Air and hotel packages – Hosted sightseeing tours

Non-institutionalized Tourism

– Trans-island cycling tours

– Visiting new / novel destinations The Drifter

– Working holidays – Student exchange

Video

• Backpacker skills: how to master your Bear Spray

• https://www.backpacker.com/videos-

photos/master-bear-spray

Plog’s Theory

Plog’s Theory

• Ranging from psychocentric to allocentric at

either extreme of the personality scale

Allocentric Mid-centric Psychocentric

• Seek for new experiences and adventure

• Explore new and unusual areas

• Interact with local people

• Majority of travelers

• Seek well-known

established destinations

• Receptive to new experiences

• More conservative and less adventurous

• Choose destinations similar to home

environment

• Highly concern about safety and security Plog’s Classification of Tourist Personalities

Source: Plog Research, Inc., Leisure Travel – Making It a Growth Market Again, John Wiley & Sons, 1974

Allocentric Tourist

• Individuals with allocentric personality would try new food and seek self-fulfilling learning experiences and adventures

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Psychocentric Tourist

• Individuals with psychocentric personality have a strong need for consistency and

familiarity

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Example:

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Source:

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The Travel Needs of Millennials

• Millennials have become the fastest growing

customer segment with the hospitality industry.

Exploration, interaction and experience are the focus of Millennial who are willing to pay for a greater experience (Rauch 2014) .

• Who are Millennials?

– Millennials are generally refereed to those who were

born in early 1980s to early 2000s.

Needs of Millennials

• Search for unique and novel experience.

• Look for an overall gourmet experience for a reasonable price

• New lobby design integrated with their needs, e.g.

lobby bars and restaurants are wide and open enough to provide spaces for them to hang around together.

• Interested in utilizing technology to do things

• Speaking up. Turn to Twitter, Facebook, TripAdvisor to voice out complaints and share experience

• Source: Rauch R. (2014).Top 10 Hospitality industry Trends in 2015. Retrieved from http://www.4hoteliers.com/features/article/8736

Trends in Hospitality and Tourism Industry

• https://www.youtube.com/watch?v=SJ8Mom

wv7Qk

10 Trends in Hospitality & Tourism Industry

1. Providing healthy food 2. E-booking

3. Providing wellness service 4. Extreme sports

5. Green- sustainable tourism & hospitality 6. Low budget tourism

7. Innovative technology

8. Social network promotions 9. Sharing economy

10. E-payment

Activity 2: Forms of Tourism

Examples Leisure / Holiday Tourism

Business Tourism Cultural Tourism Eco-tourism Study Tourism

Religious Pilgrimage Health Tourism

Visiting Friends and Relatives

Sports Tourism ³⁶

Think about some examples for each form of tourism.

Suggested Answers

Examples

Leisure / Holiday Tourism Caribbean cruising, northern lights tour to Iceland

Business Tourism Trade shows, conventions, exhibitions and meetings etc.

Cultural Tourism Angkor Wat, observe Peruvian women weaving with alpaca wool, learn about tea ceremony in Japan

Eco-tourism Living in a tree house in Laos, rainforest exploration in Amazon Forest

Study Tourism Studying Korean language in Seoul, student exchange programs Religious Pilgrimage Christian pilgrimage to Israel, Muslim pilgrimage to Mecca

Health Tourism Cosmetic surgery in Korea, spa tourism in Thailand, medical tourism in Malaysia

Visiting Friends and

Relatives Popular countries of VFR – Australia, the USA, Canada

Sports Tourism Skiing in Hokkaido, watching the Olympics, diving in Maldives ³⁷

Travel Motivations

• Why do we go travelling?

• Why do we choose to travel to a certain place?

• Why do we participate in certain travel activity?

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The Formation of Travel Motivations and Travel Actions

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Factors that Influence Travel Motivations and Actions

Individual Factors

Economic capacity

Spare time

Sex, age and physical conditions

Psychological factors

External Environmental

Factors

Development of tourism

industry Group, family

and social atmosphere

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Travel Motivation Theory

• Maslow’s Hierarchy of Needs

• The Push and Pull Theory

• Hudman’s Motivators of Travel

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Maslow’s Hierarchy of Needs

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Activity 3:

Maslow’s Hierarchy of Needs

Suggest appropriate tourist activities/behavior

to different levels of the hierarchy needs.

Self-actualization

needs Travel around the world, space tourism, travel to the North/South Pole, bungee jump, climbing the Himalayas Esteem needs Shopping at brand shops, staying at 5-star hotels; visiting

Michelin restaurants

Social needs VFR, group tours, honeymoon, sharing photos on social media, WIFI

Safety needs Safe destinations, hotel accommodations, travel insurance

Physiology needs Food and beverage service, toilet facilities

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Suggested Answers

The Push and Pull Theory

Push Factors

Internal or intangible factors lead to the formation of travel desires

e.g. escape, rest and relaxation, adventure, knowledge seeking

Pull Factors

Attractiveness of the destination that draw travellers to visit the place

e.g. climate, scenic beauty, historical attractions

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Hudman’s Motivators of Travel

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Tourism Product and Destination Planning

• Butler’s Destination Life Cycle

• Carrying Capacity

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Butler’s Destination Life Cycle

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Source : Butler, R.W. (1980) 'The concept of a tourist area cycle of evolution: implications for the management of resources', The Canadian Geographer 24(2): 5-12.

Characteristics of Destinations in Different Stages of the Destination Life Cycle

Stage Characteristic

Exploration • Few explorers or drifters, visiting sites with no public facilities

• Visitors attracted to the destination by a natural physical feature

• Specific visitor type of a select nature

Involvement • Limited interaction between local residents and the developing tourism industry leads to the provision of basic services

• Increased advertising induces a definable pattern of seasonal variation

• Definite market are begins to emerge

Development • Development of additional tourist facilities and increased promotional efforts

• Greater control of the tourist trade by outsiders

• Number of tourists at peak periods far outweighs the size of the resident population, inducing rising antagonism by the latter towards the former

Source: Agarwal, S. (1997). The Resort Cycle and Seaside Tourism: An Assessment of its Applicability and Validity. Tourism Management, 18(2), pp 65-73. 50

Characteristics of Destinations in Different Stages of the Destination Life Cycle (cont’)

Stage Characteristic

Consolidation • Tourism has become a major part of the local economy, but growth rates have begun to level off

• A well-delineated business district has taken shape

• Some of the older deteriorating facilities becomes less attractive to visitors

• Local efforts are made to extend the tourist season

Stagnation • Peak numbers of tourists and capacity levels are reached

• The destination has a well-established image, but it is no longer in fashion Post-

stagnation • Five possibilities, reflecting a range of options that may be followed,

depending partly on the success of local management decisions. At either extreme are rejuvenation and decline

51 Source: Agarwal, S. (1997). The Resort Cycle and Seaside Tourism: An Assessment of its Applicability and Validity. Tourism Management, 18(2), pp 65-73.

Activity 4: Case Study

Article - ‘Tracing Malaysia Tourism Development Lifecycle’

• Discuss the various strategic options for different life cycle stages.

• (Source: https://ijbssnet.com/journals/Vol_5_No_3_March_2014/19.pdf )

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Carrying Capacity

• Carrying capacity can be defined as

– “the maximum number of people who can use a destination without unacceptable changes in the environment and without unacceptable changes in the enjoyment gained by visitors.”

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Five Types of Carrying Capacity

Physical carrying capacity

Environment carrying capacity

Psychological carrying capacity Economical

carrying capacity Social-cultural

carrying capacity

Physical Carrying Capacity • Accommodation, tourist facilities, roads and water supply

• Car park spaces, capacity of restaurants / theme parks

• Local transport capacity

Environmental Carrying

Capacity • Trampling of grassland

• Disturbance of wildlife

• Physical erosion of landscape Psychological Carrying

Capacity

• Visitors’ demand

• Visitors’ attitudes to other users’ behaviour

• Visitors’ tolerance to physical wear and tear Economical Carrying

Capacity

• Rise of property price

• Rise of commodity price Social-cultural Carrying

Capacity

• The acceptance of tourists by local people

Activity 5:

Discussion on Negative Impacts

News – ‘Problems faced by Dubrovnik’

What kinds of impacts brought by tourism development?

– Crowds and cruise ships have 'ruined' Dubrovnik

https://www.telegraph.co.uk/travel/destinations/europe/c roatia/dubrovnik/articles/dubrovnik-faces-overcrowding- cruise-ship-visitors-/

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Criticism of Carrying Capacity

1. Difficult to implement

2. Some of the types of capacity are subjective.

3. The current techniques for measuring capacity are rather crude and do not take into account:

1. The type of tourism and market segments which the destination attracts

2. The type of destination and the fragility of the environment 4. The assumption is too simplistic

5. The measurement of the capacity does not consider the cost of

reducing tourist volume

Tourism Distribution

Channels

• One-stage

• Two-stage

• Three-stage

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Types of

Distribution Channel

One-stage Suppliers

Customers

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Two-stage

Suppliers

Travel Agencies

Customers

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Three-stage

Suppliers

Wholesalers /Tour operators

Travel Agencies

Customers

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Suppliers

• Airlines

• Hotels

• Cruise companies

• Restaurants

• Attractions

• Rail companies

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Travel Wholesalers

• Buy large quantities from suppliers and sell in smaller quantities to retailers

• Bulk purchase generates economies of scale

• May sell directly to consumers

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• Plan and sell group tours

• Purchase from different suppliers

• Sell through

– Own retail outlets or

– Other retail travel agencies

• Deliver own services

– Tour escort/guide

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Tour Operators

• Act on behalf on suppliers and /or travel wholesalers

• Provide a convenient sales network for both suppliers & customers

• Receive commission from suppliers or mark up net rates to earn a profit

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Travel Agencies

Functions of Travel Agencies

Providing one-stop tourism products

The most important retail channel for tourism products

Facilitating customers’ tourism activities

Promoting the development of tourism industry

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Product Knowledge Required by a Travel Agent

Product Knowledge Examples

1. Destinations • Climatic conditions;

• Political situations;

• Special events and public holidays;

• Customs, culture and cuisine of country/destination;

• Major attractions;

• Health and other hazards;

• Currency exchange rates;

• Travel regulations and documents; and

• Accommodation facilities, etc.

2. Airlines • Reservation system;

• Route operations;

• Flight schedules;

• Fares;

• Types of airplanes;

• Services offered on board; and

• Connecting flights, etc.

Source: Indira Gandhi National Open University (2012). Managerial practices in tourism– 1, Unit 23– Travel agencies. 68 R t i d f htt // k h i /bit t /123456789/36596/1/U it 23 df

Product Knowledge Required by a Travel Agent (cont’d)

Product Knowledge Examples

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3. Airports • Timings;

• Facilities;

• Custom and security regulations;

• Taxes; and

• Distances from cities, etc.

4. Surface (Rail and Road)

and Water Transport • Time tables;

• Connections;

• Fares and car rentals;

• Facilities; and

• Reservation systems and procedures, etc.

5. Principal Suppliers • Image and financial standing;

• Service offered;

• Quality of service; and

• Commissions offered, etc.

6. Knowledge of Other Aspects • Package tours;

• Local excursions; and

• Special interest tours, etc

Source: Indira Gandhi National Open University (2012). Managerial practices in tourism– 1, Unit 23– Travel agencies Retrieved from http://www egyankosh ac in/bitstream/123456789/36596/1/Unit 23 pdf

Impacts of Tourism

Tourism Impacts

It is conventional to consider the impacts of tourism under the headings of:

1. Economic

2. Socio-cultural 3. Environmental

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Economic Benefits & Costs

Benefits Costs

Leakage Financial costs

Inflation Seasonal jobs

Foreign exchange Jobs generation /

regional growth GDP Growth / tax

revenue

Business / personal income

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An Example of the Multiplier Effect

Tourist pays the hotel

Hotel pays the food suppliers

Staff of food suppliers spend part

of the salary in a salon

Direct Revenue Indirect Revenue Induced Revenue

The Multiplier Effect

• Money spent by tourists in a destination has both primary (direct) and secondary (indirect

& induced) benefits.

• Direct effect (first-order)

– The new spending on the first tier service providers in the

destination, e.g. enterprises offering facilities for tourists

such as hotels, attractions and transport operators.

• Indirect effect (second order)

– In order to produce the services, the enterprises must purchase certain inputs from other business. If these inputs were from local suppliers, these purchases represent additional local economic activity. E.g.

restaurants purchase food from the local markets; travel

agencies hire tour buses from coach companies.

• Induced effect (third order)

– The additional spending that occurs when employees of

tourism-related businesses spend their income on other

service spectrum such as housing, food, transportation

and other services.

Activity 6:

Discussion on Positive Impacts

How Dubai is benefited from tourism development?

http://www.dubai-information- site.com/tourism-in-dubai.html

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Leakage

• Some countries, normally the less developed countries, cannot enjoy the benefits brought by tourism due to the fact that most of the tourism incomes are not retained in the local economy. This is known as leakage. Two major kinds of leakage

– Import leakage – Export leakage

Leakage in the tourism industry

Video http://www.youtube.com/watch?v=xZfA2Rns6bM

Import Leakage

• This happens when tourists demand standard of equipment, food and other products that the host country cannot supply, especially in less-developed countries.

• The average imported-related leakage

– In most developing economies: 40% to 50% of the gross tourism earnings

– In most advanced and diversified economies: 10% to 20%.

Export Leakage

• Multinational corporations and large foreign businesses invest heavily in the construction of tourism infrastructures and facilities.

• An export leakage arises when overseas

investors who finance the resorts and hotels take their profits back to their country of

origin.

Activity 7:

Give Examples on Leakage

Imported goods and services required by tourists

Imported capital goods and services required by the tourism industry

Imports for building the tourism infrastructure

Factor payments

Imported materials required by domestic

producers

Suggested Answers

Imported goods and services required by tourists

petrol, food

Imported capital goods and services required by the tourism industry

furniture, hotel supplies, architect’s fees

Imports for building the tourism infrastructure

airport, roads and cruise terminals

Factor payments repatriated profits, wages and hotel management fees

Imported materials required by domestic producers

raw materials

The Demonstration Effect

• Demonstration effect means the local people imitate the lifestyle of tourists.

• According to the acculturation theory , when two cultures

interact, the dominant culture overpowers the weaker

one, resulting in changes within the weaker culture.

Social-cultural Impacts

Positive

Improve the way of life

Encourage cultural exchange

Boost for cultural conservation

Negative

Congestion, change of occupation, health problems

Commodification of culture

Demonstration effect

Crime, prostitution, sex tourism

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Occupation Change

Lifestyle Change

Cultural Commoditization

• The exotic cultures are attractive to tourists. Tourism firms or local people try to package these cultures for sale.

• Tourists seek for cultural experiences, e.g. dances or rituals with religious / cultural properties.

• Since some rituals may take days to perform, which may not fit into tourists’ schedule. Therefore, the

rituals are staged to fit into tourist’s time frame. This

is known as cultural commoditization.

• Cultural commoditization also occurs when local people mass produce handicrafts to sell to tourists, bypassing traditional methods of manufacturing

• Moreover, local traditions are commoditized by

marketing concepts. As a result, strong traditions are ignored and eventually lost as they become products for sale

Cultural Commoditization (cont’d)

Commercialization of Festivals

Commercialization of Arts and Crafts

Doxey’s Irritation Index

Level of Irritation Responses of Local Residents Likely Stage(s) in Destination Life Cycle Butler (1980)

1. Euphoria Visitors are welcome and there is little tourism planning

2. Apathy Visitors are taken for granted and contact with tourists becomes more formal

3. Irritation /

Annoyance Saturation is approached and the local people have misgivings. Planning try to control via

increasing infrastructure rather than controlling the growth

4. Antagonism Open expression of irritation; planning is remedial; more promotion to offset the deteriorating reputation

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Doxey’s Irritation Index

Level of Irritation Responses of Local Residents Likely Stage(s) in Destination Life Cycle Butler (1980)

1. Euphoria Visitors are welcome and there is little tourism

planning Exploration

Involvement 2. Apathy Visitors are taken for granted and contact with

tourists becomes more formal Development

3. Irritation /

Annoyance Saturation is approached and the local people have misgivings. Planning try to control via

increasing infrastructure rather than controlling the growth

Consolidation

4. Antagonism Open expression of irritation; planning is remedial; more promotion to offset the deteriorating reputation

Stagnation Decline

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Doxey’s Irritation Index – Attitude of Local People

1. Euphoria — delight in contact

2. Apathy — increasing indifference with larger number of visitors

3. Irritation / Annoyance — concerns and annoyance over price rises, crime, rudeness, and cultural rules being broken

4. Antagonism — covert and overt aggression to

visitors

Activity 8:

Discussion on Negative Impacts

News - ‘The most overcrowded tourist destinations’

• Discuss the negative impacts caused by the over-development of tourism.

• (Source: https://www.independent.co.uk/travel/news-and- advice/most-overcrowded-tourist-destinations-amsterdam- rome-venice-warsaw-dubrovnik-a8108096.html )

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Positive Environmental Impacts

Preservation and conservation of environment

Enhancement of environment

Development of environmental awareness

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Negative Environmental Impacts

Negative Impacts

Water pollution

Soil pollution

Noise pollution Visual

pollution Distributio

n of wildlife &

vegetation pollutionAir

Video on Tourism Impacts

Impact of Tourism on the Himalayas

https://www.youtube.com/watch?v=bWXLA00t aMo

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Tourism Organisations

Tourism Commission

• Vision and Strategy

– http://www.tourism.gov.hk/english/about/abt_vision.html

• Major tourism projects

– http://www.tourism.gov.hk/english/current/current.html

• Review of the Operation and Regulatory Framework of the Tourism Sector in Hong Kong

– http://www.tourism.gov.hk/english/papers/files/consultatio n_paper_en.pdf

• Development blueprint for Hong Kong’s Tourism Industry

– http://www.tourism.gov.hk/popup/files/Development_Blue print_for_Hong_Kongs_Tourism_Industry_Eng.pdf

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The End