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THE TOURISM INDUSTRY

Nature of Tourism as an Industry

 Tour operators create tour packages for a target market and

Figure 1: Value Chain and the
Relationships amongst Tourism Sectors
(Santos, 2014)
the travel agencies retail these packages to prospective
tourists.
 Transportation sector – provides for the transport of tourists
to their destinations. It includes airlines, surface
transportation and sea vessels.
 The accommodation sector – provides for the lodging of
tourists. It is a tourism attraction on its own.
 Food and beverage establishments – offer thematic as well
as local and foreign gastronomy to attract individuals and
tourists.
 MICE (Meetings, Incentives, Conferences, and Exhibitions)
 Meeting – It is a general term indicating the coming
together of a number of people in one (1) place, to confer
out or carry out a particular activity.
 Incentive – It is a meeting event as part of a program
which is offered to its participants to reward a previous
performance.
 Conference – It is a participatory meeting designed for
discussion, fact-finding, problem solving, and
consultation. It is normally smaller in scale and more
select in character. Its features tend to facilitate the
exchange of information. It is usually of limited duration
with specific objectives.
 Exhibition – These are events at which products and
services are displayed.
 Tourism attractions – these are areas continuously being
developed by the government and funded by the investors.

Travel Agencies, Tour Operators, and Tour Guides

Travel Agencies
Travel agencies act as intermediaries for the customers. They receive commissions from their suppliers such
as hotels, food and beverage establishments, and tour operators as well as earn their revenues from their
principal (customers).
The following are the types of travelers served by travel agencies:
 Business travelers – are travelers whose purpose is mainly for work.
 Leisure travelers – are travelers whose purpose is mainly for relaxation and to get away from all the
stresses of life.
 International travelers – are travelers whose trips are going abroad or traveling to other countries
whether for business purposes or leisure.

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The following are used by travel agencies in their operation.

 Airline Computer Reservation System (CRS) – where the travel agency can scan flight information and
availability.
 Global Distribution System (GDS) – major CRS that book reservations in the hospitality industry.
 Familiarization Tour (fam tour) – is a free or low-cost trip depending on the sponsors for travel agents
or consultants, provided by a tour operator or airline, as a means of promoting their service.
 Hotel brochures and property’s websites – these are promotional tools used to introduce the company
and its products and services, and to inform prospective customers.
 Strategic alliances website – strategic alliances between two (2) or more properties have been
emerging. This is to cope with global expansion of bigger hotel chains and increase in travel of guests.

Tour Operators

A tour operator is an entity which may either be a single proprietorship, partnership, or a corporation regularly
engaged in business of extending to individuals or groups, such services pertaining to arrangements and
bookings for transportation and/or accommodation, handling and/or conduct of inbound tours whether or
not for a fee, commission, or any form of compensation. It is an entity that creates tour packages and sells it
in a wholesale price to travel agencies.

Tour Guides

Tour guides in the Philippines provide a world-class service. The Department of Tourism (DOT) provides a
training program designed to produce individuals who will guide visitors presenting the country in the best
possible light in an interesting, intelligent, and engaging manner. Aside from taking care of the guests by
physically accompanying them and ensuring all facilities and services are paid/signed, tour guides are also
expected to talk about their country, its people, history, culture, and attractions.

Tourism Organizations
United Nations World Tourism Organization (UNWTO)
The UNWTO is the United Nations agency responsible for the promotion of responsible, sustainable, and
universally accessible tourism. It promotes tourism as a driver of economic growth, inclusive development,
and environmental sustainability, and offers leadership and support to the sector in advancing knowledge and
tourism policies worldwide.
The membership of UNWTO includes 155 countries, seven (7) territories, and over 400 Affiliate Members
representing the private sector, educational institutions, tourism associations, and local tourism authorities.
UNWTO headquarters are based in Madrid, Spain.

The priorities of the UNWTO are the following:

 Mainstreaming tourism in the global agenda – Advocating the value of tourism as a driver of socio-
economic growth and development, its inclusion as a priority in national and international policies and
the need to create a level playing field for the sector to develop and prosper.
 Improving tourism competitiveness – Improving the competitiveness of UNWTO members through
knowledge creation and exchange, human resources development, and the promotion of excellence
in areas such as policy and planning, statistics and market trends, sustainable tourism development,
marketing and promotion, product development, and risk and crisis management.
 Promoting sustainable tourism development – Supporting sustainable tourism policies and practices
which make the optimal use of environmental resources, respect the socio-cultural authenticity of
host communities, and provide socio-economic benefits for all.
 Advancing tourism’s contribution to poverty reduction and development – Maximizing the
contribution of tourism to poverty reduction and achieving the Millennium Development Goals

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(MDGs) by making tourism work as a tool for development and promoting the inclusion of tourism in
the development agenda.
 Fostering knowledge, education, and capacity building – Supporting countries to assess and address
their needs in education and training, as well as providing networks for knowledge creation and
exchange.
 Building partnerships – Engaging with the private sector, regional and local tourism organizations,
academia and research institutions, civil society, and the UN system to build a more sustainable,
responsible, and competitive tourism sector.
National Tourism Organization (NTO)
Nearly, every country has some sort of National Tourism Organization (NTO). The main function of NTO is to
develop and implement tourism policies. Its secondary function is to market and gather tourism statistics.
NTO is a useful tool in preserving a country’s heritage. It aims to market a country as a destination locally and
globally. It also seeks to improve the export earnings of a country by attracting more tourists.
The type of NTO to be established depends on the potential of the tourism industry of a country. The amount
of money that the government allocates influences the magnitude of the marketing efforts. The performance
of NTO is measured by the number of inbound tourists.

The following are the types of NTOs:

 Ministry of Secretariat – It is an independent ministry or a part of a larger ministry.
Examples:
o Mexico – State Secretariat
o France – Ministry of Free Time
 Department – It is represented by a government agency or within a bureau that is part of a larger
department.
Examples:
o Japan – Department of Tourism is under the Department of Transportation
o Canada – Tourism Canada is under the Department of Regional and Industrial Expansion
 Quasi-Public – It is a combination of government and private ownership.
Examples:
o Hong Kong – Hong Kong Tourist Association
o United Kingdom – British Tourist Authority

THE HOSPITALITY INDUSTRY

Characteristics of the Hospitality Industry
 Hospitality businesses are open 365 days a year and 24 hours a day.
 The hospitality industry depends heavily on shift work (morning and afternoon shift). There is also a
graveyard shift that usually starts from 10:00 P.M. and lasts until 6:00 A.M.
 Hospitality businesses produce guest satisfaction that is different from other business sectors.
 The products of hospitality businesses are intangible and perishable.

Scope of the Hospitality Industry

A. Lodging Segment  Fast food chains
 Hotels  Caterings
 Inns
 Motels
 Pensions C. Entertainment and Recreation
 Resorts  Attractions
B. Food and Beverage Segment  Gaming
 Restaurants  Parks

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 Clubs  Travel Agencies

D. Travel and Tourism  Operators
 Transportation

Four (4) Different Perspectives of Tourism and Hospitality Industry

 The tourist – one who seeks various psychic and physical experiences and satisfactions.

 The Businesses Providing Tourist Goods and Services – These are the business people seeing tourism
as an opportunity to make profit by supplying the goods and services that the tourist market demands.

 The Government of a Host Community or Area – Politicians view tourism as a wealth factor in the
economy of their jurisdictions. It is related to the income their citizens can earn from this business.

 The Host Community – these are the people living in the community that is being visited by the tourists
who see tourism as a promotion of their culture and an employment opportunity.

References:
Cruz, Z. L. (2013). Principles of tourism II. Manila: Rex Book Store, Inc.
Jr, C. M., & Bosangit, C. A. (2007). Introduction to Tourism: A Comprehensive Guide to the Travel and Tourism
Industry. Pasig City: Anvil Publishing, Inc.
Santos, B., & Manzano, R. (2014). Principles of tourism II. Quezon City: MaxCor Publishing House, Inc.
Carino, C. E., & Beltran, M. N. (2013). The Hospitality industry: An Introduction. Manila: Mindshapers Co., Inc.

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