The Global Tourism Industries - Assignment Example

Question a) Provide a definition of an inclusive tour. An inclusive tour is a package that combines accommodation and transportation with extra services such as touring, transfers, museum access, and others. These set-ups are normally based around charter flights transporting people who seats on one plane to their planned destinations. All products and services are sold to the tourists as an all-inclusive package. b) Comment on the factors that contributed to the growth of tour operations since the 1950s. The travel and tourism industry, since World War II, has progressed. The major factors that have resulted in the development and socio-economic conditions of the industry are varied. Obviously, a revolution in transportation was the major factor for this growth. Not only has transportation advanced but also the capacity of many people to buy cars due to more compensated holiday and passive income. This increase in consumers’ income was apparently a positive development for tourism. Moreover, the invention of the Internet and other computer technologies made the booking system easier (Sharpley 2006). For instance, the global distribution systems (GCDs) were recognised in the 1980s as a computer reservation technology (Singh 2008). However, this advances in technology depressed the traditional operations of the travel and tourism industry as well as the importance of human travel agents. The benefits of these developments to the industry are hence relative to one’s point of view. c) Using relevant examples, discuss the different ways in which a tour operator may specialise. A general differentiation is usually made between the different specialisations of tour operators: first is mass-market or mainstream, and second is specialist or niche. Mass-market or mainstream tour operators, such as My Travel, TUI UK, First Choice, etc., are those that create a substantial fraction of their revenue by selling a popular product such as the 4S product (sex, sand, sea, and sun) to a broad market segment. On the other hand, niche or specialist tour operators serve a smaller market segment with frequently highly specialised products. In an effort to thrive in a highly competitive environment of tourism, tour operators, specifically small independent ones, are incessantly searching for niche markets to develop. d) Consider the benefits of using a tour operator from the perspective of consumers and suppliers. From the point of view of the customer, with less leisure time and more severe stress, services offered by tour operators are important for maximising valuable time. Moreover, the operator gains better transactions from the producers by buying in bulk, which enables them to bid low prices for the whole produce and/or service, which are quite difficult to acquire by the individual customer. Due to these factors, price and time, the services of tour operators are highly demanded by a vast majority of customers. From the point of view of the suppliers, the tour operator frees the supplier from the task of selling the products and the risk of bearing unsold products. Capitalising on their broad distribution network the tour operators can successfully take advantage of the ‘last minute offers’ to make many ordinary tourists happy and to reduce their losses. Hence, the existence of the tour operator is vital for the suppliers, with regard to trimming down costs and risks. Question 2 a. Comment on the importance of the brochure as the tour operator’s main marketing tool. The brochure is the main marketing tool of tour operators due to the intangible or abstract character of the product that is being offered. The brochure could encourage individuals to purchase the tour schedules it advertises, give the needed information to convince the customer to buy a holiday and build and strengthen the image of the company with its customers. b) Why is it important for tour operators to conduct market research? Conducting market research is essential for tour operators for them to determine their biggest competition or the destinations that offer the greatest prospect for durable sustainable growth. These factors will help tour operators understand or recognise the market within their business functions. Other essential issues that tour operators can determine from conducting market research are the marketplace and the business’s outcomes. Market research findings are crucial for tour operators to be able to make sound decisions. c) Explain how home research and destination research are conducted and describe the type of information that is collected in each case. In home research economic and political conditions and feedback of customers in the home country are studied. Information that are collected relates to economic concerns such as the current exchange rate or market demand, political issues such as legislative reforms, and individual perception of the products and services offered. Destination research is a diagnostic instrument that helps tour operators in determining where a destination is at present and what should be carried out to develop it for the future. This type of research is conducted to determine the success of public relations, advertising and the current strategies for improving and endorsing the destination from a tour operator’s point of view. Question 3 a) What are charter airlines and how do they differ from scheduled airlines? In the mass tourism perspective, charter flights have gained an exact definition of an air travel whose only task is to transport travellers to tourist destinations. These chartered flights are different from scheduled flights, though they actually operate to announced, regular schedules. A scheduled flight travels from one airport to another on a regular basis whereas chartered flight is chartered for a particular air travel. b) What are low cost carriers and how have they affected travel industry operations? A low cost carrier is an airline that charges lower passenger fees. In order to offset the lost in profit due to lowered fares, the carrier may charge for additional products or services such as seat reservation, special boarding, and food. The effect that low cost carriers have had on travel industry operations has progressed and now stands for a major component of the international or mass tourism domain (Sharpley 2006). These cheaper flights have allowed budget travellers to visit many tourist destinations. The advantages of the improved access to these destinations have promoted the belief that developing tourism is a dependable and potential source for significantly advancing the economy. Yet, as countries developed tourism as an assumed perfect solution and with low cost carriers regularly offering inexpensive tickets to these tourist spots, demand elevated more than was predicted and accompanied by unforeseen problems such as environmental ones. c) Describe the impacts of liberalisation on the aviation industry in Europe. Liberalisation definitely has cultivated competition and innovation in Europe’s aviation industry, leading to more destinations served and fiercer competition on numerous current destinations. Consumers have gained from a broader array of option, both in type and quality of service and destinations served. As a common observation, there is a broader array of products and/or services packages and fares available than before. On the contrary, liberalisation has had a slight effect on the core system of the airline sector, most likely because this is greatly affected by the established international regulatory structure, which is beyond the power of any single nation or group of countries. Question 4: a) By using a diagram explain the positions of the tour operator and the travel agent in the travel distribution chain and discuss their roles. A tour operator procures the services of tourism in large quantities, bundles them into appealing packages, which are purchased directly by the customer or via the travel agents. Basically, it functions as a go-between between the demand and the supply for travel and tourism services, role that grants the tour operator power over the sale and distribution of travel and tourism packages. b) Identify and describe the types of integration that take place in the travel industry. What is the most appropriate type of integration for tour operators? In order to protect their existence and standing on the market, businesses use the technique of horizontal integration, which transpires between businesses with identical area of operation, such as independent hotels. For small or medium businesses, which have restricted control, horizontal integration includes building alliances, or creating voluntary agreements, which function harmoniously to realise a similar advantage, such as purchasing services wholesale and mass advertising (Goeldner & Ritchie 2005). On the other hand, value integration embodies the connection between of various tourism distribution chain levels and is often found today in the case of big businesses. An upper spot in the distribution chain demands a higher investment, hence normally vertical integrations occurs from the tour operator upwards, such as Airtours Group’s History (Cooper 2008). Although it is less likely that a travel agency has the needed resources to procure the business of a tour operator, it is feasible for a travel agency to convert its business into that of a tour operator, such as the case of Thomas Cook who was originally a travel agency and afterwards transformed into a tour operator. The most appropriate type of integration for tour operators is vertical integration because without having possession of their supplies, tour operators can gain power over their activities by holding the bulk of their shares. Thereby, big tour operators guarantee an improved management of the quality of their product and their internal costs. c) What are barriers to entry and how have they affected the structure of the travel industry? There are seven major forms of barriers to entry in the travel and tourism industry: (1) competitive advantages; (2) capital requirements; (3) access to distribution channels; (4) product differentiation; (5) switching costs; (6) economies of scale; and (7) administrative or government regulation (Singh 2008). Current competition can increase barriers through market control, complimentary supplier contracts, and/or appealing for licensing costs. Hence, there are businesses in the travel and tourism industry that are more profitable than others. The ration of small and medium enterprise to large ventures in the industry is disproportionate. Question 5: a) What are the main roles and functions of a travel agent? The main function and role of the travel agent is to essentially provide convenience to tourists or travellers. They should suggest accommodations that complement travellers’ conditions or instructions and book them. They also give information about the occasions, happenings, or activities at the tourist destination and provide advance booking services. b) What are some of the factors that a tour operator might consider when selecting distribution channels? In selecting distribution channels a tour operator should first determine its market. A register of distribution channels that seem to best fit the operator’s product is considered. Then, the marketing budget in a number of distribution channels should be taken into account. A tour operator should be capable of sustaining its marketing presence in the tourism industry. The funds that would have to be invested in each distribution channel should also be calculated. After a tour operator has determined expenditures and the match between its products/services and the prospective customers contacted through the chosen distribution channels, the operator will be equipped to formulate its marketing plan. c) How did the Internet influence the travel agent operations? The internet may or may not destroy the whole tourism sector. For instance, the travel agency segment has been seriously distressed by the accessibility of online booking systems, which have allowed hotels and airlines to effortlessly transact directly with their customers. Reservation systems such as the Computerised Reservation System (CRS) and the Global Distribution Systems (GDS) have been strongly challenged by the Internet. The positions of travel agents were threatened by the Internet due to absence of subscription costs, specialisation in marketing, inexpensive operations and appealing packaging. Travel agencies are forced to create additional services to save their threatened position. However, there are still a large number of internet users who choose to book their travel through travel agents. d) What can traditional travel agents do to survive the current environment they operate in? Travel agents should understand or identify immediately what their clients are looking for by interviewing them thoroughly. Additional services should be offered such as chauffeur service or conversing with the client about his/her travel experience which is then documented for future use. Product knowledge is also crucial. Travel agencies should also invest greatly on staff training and development. Question 6: a) Compare and contrast the travel behaviour of the ‘old’ and the ‘new’ tourists. The similarities between the old and new tourists are very few. Both conduct some research on the culture, landscape, events, and activities in their destinations. Both love the sun. The differences between the two are many. The old tourist does not travel a lot while the new one visits several places in a year; cheap prices are more valuable for the old tourist than the quality of services, whereas value for money is favoured by the new one; the old tourist does not prefer to go out and have some adventure or explore the local culture of the tourist destination whereas the new one tries out the local fare and explore the environment. b) Describe two types of products that have emerged to cater for the needs of the ‘new tourist’. Two types of products that have emerged for the new tourists are eco-tourism and health travel. The former is a responsible or interested visit to natural domains which protects the environment and promotes the well-being of the local population. The latter is a concept focused primarily around tourist destinations intended to indulge or relax the mind and relieve the body. Health resorts and tourist spas are the most widespread and well-liked health travel location. c) How is distance affecting global tourism flows? One of the travel behaviours of tourists that greatly affect global tourism flows is their reaction to distance. Components of distance that influence a tourist’s choice of destination are culture, time, economic, gravity, network, cognitive, and social. Hence tour operators should try to minimise distance as much as possible because intraregional and interregional tourism flows may occur. References Buhalis, D. (2008) Tourism Principles and Practice, In A. Cooper, Tourism Principles and Practice (pp. 622-652). Cooper et al. (2008) Tourism Principles and Practice, Harlow: Pearson. Goeldner, C.R. & Ritchie, J.B. (2005) Tourism: Principles, Practices, Philosophies, New Jersey: Wiley. Gretzel et al. . (2006) The transformation of consumer behaviour, In D. Buhalis and C. Costa (eds), Tourism Business Frontiers, Consumers, Products and Industry (p. Chap. 2). Oxford: Elsevier. Hall, C. (2005) Rethinking Social Science of Mobility, Pearson: Harlow. Middleton, V. (2001) Marketing in Travel and Tourism, London: Heinemann. Pender, L. (2001) Travel Trade and Transport: An Introduction, London: Continuum. Sharpley, R. (2006) Travel and Tourism, London: Sage Publications Ltd. Singh, L. (2008) Fundamental of Tourism & Travel, Isha Books. Swarbrooke, J. & Horner, S. (2007) Consumer Behaviour in Tourism, Butterworth-Heinemann: Oxford. Yale, P. (1995) The Business of Tour Operations, Harlow: Longman. Read More