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travel and tourism industry

Posted by business | travelling | Posted on May 26th, 2010

Tourists

The origin of the word “tourist” date back to 1292 AD. It has come from the word ‘tour’. A number of experts have defined the term:
“Tourists are the voluntary temporary travelers, traveling in the expectations of pleasure from the novelty and change experienced on a relatively and non-current round-trip”.
“Tourist is a person who makes a journey for the sake of curiosity for the fun of traveling”.<br />
Tourists are:

-Persons traveling for pleasure, health and domestic reason.
-Persons arriving in the sea of sea cruise.
-Persons traveling for convention.

Tourism – the first commercial venture.

A religious Englishman called Thomas Cook in 1841 arranged, for a fee, a one –day rail excursion from Leicester to Loughborough for 540 members of a temperance league. Thus the first bona fide travel agent was Thomas Cook.

While Cook himself did not make a profit on this first venture, he was a man of vision and was convinced that there was a need for a skilled “travel arranger”. So by 1845 he had become the first full-time travel agent, operating train excursions from Leicester. The next year he chartered a train and steamer for an excursion to Scotland for 330 people. In 1851 Cook arranged ocean steamship travel and accommodations for more than 1,50,000 visitors to the World Exposition in London and in 1856 he operated the first escorted “grand tour” of Europe. Tours to Europe and Middle East were also conducted and, in 1872, the first around the world tour was conducted.

Tourism as a Service Industry

Tourism as a service industry comprises of several allied activities which together produce the tourism product. Involved in the tourism product are three major sub-industries. They are: -
1. Tour operators and travel agents.
2. Accommodation sector (hoteling and catering) and
3. Passenger accommodation.

According to international estimates, a tourist spends 35% of his total expenditure on transportation, about 40% on lodging and food and the balance 25% on entertainment, shopping and incidentals.
The product in this case is not confirmed to travel and accommodation but includes a large array of auxiliary services ranging from insurance and entertainment and shopping, demand generation, in addition to the consumer motivation, is also heavily dependent upon powerful persuasive communication both at the macro (country) level and the micro (enterprise) level. The participants in the process of this service business can be illustrated by the figure below.

Some of the pointers to nature of tourism as a Service Industry

1. Tourism accounts for nearly 6% of world trade.
2. Bulk of tourism business is located in Europe and North America., with 1/8 of the market being shared between the other regions.
3. The highest growth rate in tourism in recent years has been in the third world.
4. Tourism, like most pure services, because of the character of inseparability, exemplifies a product, which cannot be sampled before purchase; the prospective consumers have to travel to a foreign destination in order to consume the product.
5. The major players in the tourism market include a number of intermediary companies. Some of them transnational in character, some of them exhibit
vertical integration, both backward and forward, acquiring interests in all major sectors of this service industry.

The Tourism Product- Factors Governing Demand.

Because of the unique nature of the nature of tourism product- it being an amalgam of the characteristics of a destination and the infrastructural as well as managerial efforts of the promoter, the determinants of tourists demand emanate from both individual tourist motivations and the economic, social, technological factors. Some of these are:

• Income Levels

In the last 30 years, disposable incomes around the world have shown upward trends, thus allowing more money for activities like leisure travel. Smaller families have meant higher allocations per person in the family. More and more women are entering the workforce and in real terms the cost of travel has fallen. The dramatic rise of tourism in the last 50 years can be attributed in a large measure to the combined effect of more leisure time and rise in both real and disposable incomes.

• More Leisure time:

Increasing unionization of labour right from 1930 onwards has reduced the number of working hours per week. Changing managerial orientations towards human resources have increased the levels of pay and paid vacation time in most developed countries. Now people have longer periods of leisure, which could be allocated to travel.

• Mobility

Better transportation and communication services have made the world a smaller place, and have brought both exposure and awareness of distant lands to larger sections of potential tourists across the world. Faster modes of transport have cut down on travel time, making it easier for people to economically plan and execute trips abroad.

• Growth in Government Security Programmes and Employment Benefits:

The growth in government security programmes and well entrenched policies of employee benefits mean that quite a large number of families may have long term financial security and may be more willing to spend money for vacations.

Tourist Classification:-

Tourists can be classified into the following seven demand categories:-
1. Explorer: – Very limited in number, these tourists are looking for discovery and involvement with local people.
2. Elite: – People who favour special, individually trips to exotic places.
3. Offbeat: – These are filled with a desire to get away from the usual humdrum life.
4. Unusual: – Visitors who are looking forward to trips with peculiar objectives such as physical danger or isolation.
5. Incipient mass: – A steady flow, traveling alone or in small-organized groups using some shared services.
6. Mass: – The general packaged tour market, leading to tourist enclaves abroad.
7. Charter: – Mass travel to relaxation destinations, which incorporate as many as standardized, developed world facilities as possible.

The Travel Decision:-

The average tourist is faced with considerable uncertainty regarding the decision and may have only scanty ideas about distant destinations. His evaluation of alternatives is also limited to the extent of this awareness about possible destinations. The stages of travel decision can be described as: -

1. Travel Desire:-
The first step where the need to travel is felt and the pros and cons are thought about.
2. Information Collection and Evaluation:-
This stage involves the process of finding out the trip from travel agents, books and acquaintances .information so collected is evaluated against criteria of cost and time constraints, alternative possibilities, relative attractiveness of destinations, perceived ‘safety’ o the alternative destinations etc.
3. Travel Decision:-
This is the decision phase involving selection of destination, travel, mode of accommodation and activities to be undertaken.
4. Travel Preparation and Experience:-
This involves tickets, bookings, travel, money and documents arrangement, clothing and undertaking of the travel.
5. Travel Satisfaction Evaluation:-
The whole tourism expenditure is constantly evaluated before, during and after the experience is used to influence future decisions.

The marketing concept for the travel and tourism industry is profit driven and customer centric (unlike sales which are volume driven and target centric).

Service Marketing Triangle

Service marketing is unique in many ways in the travel and tourism industry. There are 3 players in the transaction process:-

- Company: A travel and tourism company listens to the customers and evolves/develops the travel/tour package and it communicates the attractiveness and the utility of that very tour package directly to the customers. Here it (the company) performs external marketing. The company makes promises to the customers.

- Providers: They are a travel company’s internal customers constituting employees and agents. The company does internal marketing with the providers educating and motivating them about the idea of the particular tour package which they can offer to their customers. This is done to enable the providers to effectively carry out the service transaction process. The providers make provisions for office space, accessibility and connectivity. The company enables promises to be kept by this infrastructural association.

- Customers (Travelers): The customers are the reasons that the travel company exists and for whom the company has designed the traveling and touring package as well as set up the infrastructural facilities and spent money on employee development programmes. Here the providers are the only ones who interact with the customers, like the travel agents interact with the customers and not the company. The agents perform interactive marketing which is on-time, all-time, every-time. This is the most crucial aspect of service marketing in the travel and tourism sector. Those agents have the responsibility of ‘keeping promises’ made and enabled by the company. The providers (agents) are responsible for the perceived quality level of the service transaction. This underlines the uniqueness of service marketing.

Tourism Products:

1. Accommodation
• Hotels
• Motels
• Boatels
• Flotels

2. Destination

• Natural Scenes
• Historic Excellence
• Artificial Beauties
• Social Cultural Excellence

3. Transportation

• Infrastructural
i. Airways
ii. Railways
iii. Roadways
iv. Waterways

• Local

i. Local transport

4. Tour operators

• Travel companies
• Travel agents
• Guides

5. Shopping

• Handicrafts
• Handloom
• Books

Marketing mix for tourism product:

The designing of the marketing mix variables in case of tourism is significant as it helps the marketer in conceiving the right ideas, particularly to raise the acceptability of the tourist product by stimulating and penetrating the demand. Framing of a proper marketing mix is significant because it helps the tourist organization in accomplishing the objective and projecting a fair image.

Product Mix:

Tourism is a composite product with components like attraction facilities and transportation. Attraction deserves an intensive care. It includes natural site, places of historic interest, events and cultural attraction.

The facilities compliment attraction. The facilities include accommodation, food, transportation and recreational facilities. The transportation component includes the vehicles and infrastructure. Innovation in the tourism product helps raising the sensitivity. The users of the service are looking forward to better and improved product.

The provider of the tourist is a travel agent or the package tour. A well conceived and designed package tour, covering a wide range of tourist attraction at an economic price, helps in attracting the potential tourist.

The travel agent performs numerous activities such as hotel arrangement and accommodation, site seeing arrangement, domestic transport arrangement, air travel arrangement etc.
In a true sense the tour agents and the travel agents are the vehicles who can give a fillip to the tourism industry, provided they are well trained.

Pricing:

Pricing of the tourist product is complex. Geographical location of the destination, seasonality and varying demand affects the pricing decision.
In India the pricing strategies become important for promoting or contracting the tourism industry, since more than 40% of the total population are below the poverty line. In order to develop the tourism industry more and more potential users are to be transformed into actual users.

When a tourist proposes to visit a particular place, the total cost of his traveling also include the expenses incurred on transportation, accommodation and communication.
Liberal pricing strategy is found to be a productive pricing decision, particularly in case of tourism industry. The pricing strategy which includes low income group people, student and retired persons can be more effective. This is possible if the government concessional and subsidized infrastructural facilities to the potential tourist below the average income.

The different pricing methods generally used are cost based pricing, demand based pricing and competition based pricing.

Promotions:

The promotion mix includes advertising, publicity, sales support and public relations.
The purpose of promotion is to make available the information to the user. Advertising the sales promotion can be effective when supplemented by publicity and personal selling.
Radio, TV, newspapers, cinema and printings are some of the important vehicles for traveling of messages. Effective slogans raises the effectiveness of advertisement.

Another important component of the promotion mix is public relation. It helps in projecting the image of an organization. Public relation and publicity include regular articles and photographs of tour attraction, use of TV and travel journalists to promote editorial comment.
Public relation officer plays an important role. He should be efficient, active, impressive, intelligent and well-behaved.

Good image projection can be made if the PRO manages the affair like a professional. It is said that word of mouth is the best form of publicity. The word of mouth promotion is an important tool in tourism marketing.

Place:

The tourist centers should be located at suitable points if the tourists spots are natural there is no question of selection. In a vast country like India with a divergent socioeconomic and cultural patterns, the promotion of domestic tourism encourages unity in diversity.
Infrastructural facilities, transport and communication are important for development of tourist centres. The site selected should have natural surroundings, increased accessibility and improved amenities. At the same time it is also important that the ecological balance is not disturbed. Since growing ecological imbalances leads to pollution, some important steps like promoting afforestation, promotion and beautification may be undertaken in countering the side effects of atmospheric pollution and maintaining ecological balance.

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