Tourism The Business of Hospitality and Travel (6TH Ed.)

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Tourism: The Business of Hospitality and Travel

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TOURISM
The Business of Hospitality and Travel
Sixth Edition
Global Edition
Roy A. Cook
Fort Lewis College, Professor Emeritus
Cathy H. C. Hsu
The Hong Kong Polytechnic University, Chair Professor
Lorraine L. Taylor
Fort Lewis College, Assistant Professor
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Dedication
To my wife, Gwen, who continues to support and encourage

me in the completion of all my writing endeavors.
Roy
To my husband, Thomas Sun, for his TLC and support.
Cathy
To my parents, Robert and Harriet, from whom I inherited

an insatiable sense of wanderlust.
Lorraine

CONTENTS
Preface 10 Tourism’s Challenges and Opportunities 43
Acknowledgments 13 Where Do You Fit in? 45
About the Authors 14 Topics Covered in Each Chapter 45
Summary 46
PART 1
The Traveling Public and You Decide 46
Tourism Promoters 15
Net Tour 46
1 INTRODUCING THE WORLD’S LARGEST Discussion Questions 47
INDUSTRY, TOURISM 16 Applying the Concepts 47
Glossary 47
Learning Objectives 16
References 48
Chapter Outline 16
Could a Career in Tourism Be in Your Future? 17
Introduction 18 2 MARKETING TO THE TRAVELING PUBLIC 49
Services and Tourism 18 Learning Objectives 49
What Is Tourism? 19 Chapter Outline 49
A Tourism Model 20 A Ride with a Difference! 50
The History of Travel and Tourism 22 Introduction 50
The Empire Era 22 Decisions, Decisions, Decisions 51
The Middle Ages and the Renaissance Era 24 Information Seeking 53
The Grand Tour Era 25 It’s All in the Details 54
The Mobility Era 26 Foundations for Understanding Tourist
The Modern Era 26 Motivations 55
Bringing Tourism into Focus 28 Push and Pull Motivations 55
Geography Describes the Traveler’s World 29 Maslow’s Hierarchy of Needs 56
Maps 30 The Travel Career Patterns 58
Reading Maps 31 The Psychocentric–Allocentric Model 58
Indexes and Locators 33 Segmenting the Tourism Market 61
Scales 33 Geographic Segmentation 62
Legends 33 Demographic Segmentation 63
Physical Geography 34 Psychographic Segmentation 63
Landforms and Vegetation 35 Product-Related Segmentation 64
Water 35 Putting Segmentation Knowledge
Climate and Seasons 35 to Work 65
Human Geography 37 Specialized Tourist Segments 68
Regional Geography 38 Business and Professional Travelers 68
Studying Tourism from Business Incentive Travelers 70
Perspectives 39 SMERFs 70
Marketing 39 Mature Travelers 71
Management 40 Special-Interest Travelers 73
Finance 41 Delivering High-Quality Service 75

Contents 5
Summary 76 One Stop Does It All! 105

You Decide 76 Introduction 106
Net Tour 76 Serving Traveler Needs 106
Discussion Questions 77 Why Use Intermediaries? 108
Applying the Concepts 77 One-Level (Direct) Distribution Channels 108
Glossary 77 Two-Level Distribution Channels 109
References 78 Travel Agencies 110
Three-Level Distribution Channels 114
3 DELIVERING QUALITY TOURISM SERVICES 80 Tour Operators 114
Tours 115
Learning Objectives 80 Consolidators and Travel Clubs 117
Chapter Outline 80 Event Planners 117
All’s Well That Ends Well? 81 Tapping the Power of Multiple Distribution 121
Introduction 82 Tourism Boards and Other Intermediaries 122
Quality 83 Selling Adds a Personal Touch 123
Defining Quality 83 Acquiring Product Knowledge 124
Quality Differences 85 Approaching the Client 124
Service Encounters 85 Qualifying the Client 124
Service Quality Model 87 Making the Sales Presentation 124
Quality and Customer Satisfaction 90 Closing the Sale 125
Following Up 125
Human Resources: The Key to
High-Quality Service 91 Building Relationships 126
Bringing Employees into the Organization 92 Summary 126
Working with Organized Labor 93 You Decide 126
Setting the Stage for Peak Performance 93 Net Tour 127
Achieving and Maintaining Peak Discussion Questions 127
Performance 93
Applying the Concepts 127
Anticipating and Meeting Guest Needs 94
Glossary 128
Building Service Teams 95
Service Mistakes 96 References 129
Mistakes Happen 97
Be a Can-Do Problem Solver 98 5 CAPTURING TECHNOLOGY’S
Service Guarantees 99 COMPETITIVE ADVANTAGES 130
Summary 101 Learning Objectives 130
You Decide 101 Chapter Outline 130
Net Tour 101 Staying on the Cutting Edge 131
Discussion Questions 102 Introduction 132
Applying the Concepts 102 Improving Operating Efficiency
Glossary 102 and Effectiveness 133
References 103 Management Information Systems 133
Point-of-Sale Systems 134
4 BRINGING TRAVELERS AND TOURISM Property Management Systems 135
SERVICE SUPPLIERS TOGETHER 104 Providing Customer Convenience

and Enhancing Service 136
Learning Objectives 104 Changing Communication
Chapter Outline 104 and Distribution Channels 138

6 Contents
Internet and Travel Product Distribution 139 Summary 185

Internet-Based Distribution for Hotels 140 You Decide 186
Internet as a Travel Tool 141
Net Tour 186
The Power of User-Generated Content 142
Discussion Questions 186
Improving Profitability 143
Applying the Concepts 186
Operational Considerations 144
Revenue Management in Practice 144 Glossary 187
Summary 146 References 188
You Decide 147
Net Tour 147
7 ACCOMMODATIONS 189
Discussion Questions 148 Learning Objectives 189
Applying the Concepts 148 Chapter Outline 189
Glossary 148 Expect the Unexpected 190
References 149 Introduction 191
Integrative Cases 150 Oh, So Many Choices! 191
Whose Money Is It? 151 No Two Are Exactly Alike 192
Measuring and Managing Employee Living Like a Local 194
Turnover at Tastee Max Restaurants 152 Same Time, Same Place? 195
Boss or Friend 158 Living, Learning, and Leisure 197
100% Satisfaction Guaranteed 161 Enjoying the Great Outdoors 197
Rooms, Rooms, and More 198
PART 2 Tourism Service Making Sense of Classifications
Suppliers 162 and Ratings Systems 200
Lodging Lexicon 202
6 TRANSPORTATION 163 Operating Structures 202
Going It Alone 203
Franchising 204
Chapter Outline 163 Management Contracts 205
The Graduation Gift 164 Chain Operations 205
Introduction 165 Strength in Numbers 206
Surface Transportation 167 It All Begins with Marketing 206
Plying the Waves 167 Providing a Home Away from Home 206
Riding the Rails 168 Organizing for Success 207
Canada and the United States Follow Meeting Guests’ Needs 208
Similar Tracks for Rail Service 169 Achieving Profitable Operations 210
Asian and European Rail Service Summary 212
Blazes Ahead 170 You Decide 213
Scenic Railroads 171 Net Tour 213
Cruising the Highways and Byways 172 Discussion Questions 213
Automobiles 172 Applying the Concepts 214
Motorcoaches 175
Glossary 214
Important Transportation Links 177
References 215
Soaring Through the Skies 178
Operating in a Deregulated Environment 179 8 FOOD AND BEVERAGE 216
Decoding the Language of the
Airline World 183 Learning Objectives 216
Airports 184 Chapter Outline 216

Contents 7
Sometimes It’s More Difficult Museums and Historical Sites 245

Than It Seems 217 Zoos and Aquariums 246
Introduction 218 Parks and Preserves 247
Major Influences on the Development Fairs and Festivals 249
of Food and Beverage Services 218 Commercial Attractions 252
Travel and Discovery 218 Amusement Parks 252
Science and Technology 219 Theme Parks 253
Building a Culinary Heritage 220 Gaming 254
The Beginnings of Modern Foodservice Gaming Segments 255
Practices 220 Place Your Bets 257
Planning to Meet Guest Expectations 221 Shopping 258
It All Comes Down to Rhythm, Live Entertainment 260
Timing, and Flow 224
Sporting Activities 260
Adding Value to Food and Beverage
The Performing Arts 261
Experiences 225
From Ten to Ten Thousand 227
Summary 262
Building Profitable Operations 228 You Decide 263
Balancing Payroll Costs with Net Tour 263
Productivity 229 Discussion Questions 263
Food Quality and Food Costs Are Applying the Concepts 263
the Results of Effective
Glossary 264
Purchasing 230
References 264
An Ounce of Prevention Is Worth
a Pound of Cure 231
Beverages 233 10 DESTINATIONS 266
Beverage Operations 233
Keeping Spirits Under Control 234 Learning Objectives 266
Coffee, Tea, Or? 235 Chapter Outline 266
Summary 235 Indulging in Destination Macao 267
You Decide 236 Introduction 268
Net Tour 236 From Resorts to Urban Destinations 269
Discussion Questions 236 Classifying Destinations 269
Applying the Concepts 236 Far from the Maddening Crowd 272
Glossary 237 Links to the Past 273
References 237 Seasonal Delights 274
Spotlight on Sporting Activities 275
9 ATTRACTIONS AND ENTERTAINMENT 239 Snow Holiday Resorts
Golf Resorts
275
276
Learning Objectives 239 Year-Round Playgrounds 278
Chapter Outline 239 Spas278
So Many Things to Do and So Cruise Ships 279
Little Time 240 Casino Resorts 286
Introduction 241 Integrated Resorts 287
A World of Opportunities 242 Bright Lights and City Sights 287
Foundations for Understanding Building on Success 288
Attractions and Entertainment 243 Summary 289
Heritage Attractions 245 You Decide 289

8 Contents
Net Tour 289 Summary 336

Discussion Questions 290 You Decide 337
Applying the Concepts 290 Net Tour 337
Glossary 290 Discussion Questions 337
References 291 Applying the Concepts 337
Integrated Cases 292 Glossary 338
Flying the Competitive Skies: References 338
U.S. Airline Industry 293
Georgia’s Restaurant Businesses 302
Taking a Dive 307 12 ENVIRONMENTAL AND SOCIAL/
CULTURAL IMPACTS OF TOURISM 340
PART 3 The Tourism
Environment 313
Chapter Outline 340
11 ECONOMIC AND POLITICAL Reflecting on the Future 341
IMPACTS OF TOURISM 314 Introduction 342
Tourism and the Environment 342
Learning Objectives 314 Defining Carrying Capacity 343
Chapter Outline 314 Determining Carrying Capacities 344
Chamber Director Headache #1456 315 Environmental Impacts of Tourism 346
Introduction 316 Social and Cultural Impacts of Tourism 349
Looking to Tourism for Economic Host Community 349
Growth and Vitality 318 Social and Cultural Benefits
Comparative Advantage 318 of Tourism 350
Tourism and Foreign Exchange Using Culture to Attract Tourists 351
Rates 319 Unintended Consequences
The Multiplier Concept 319 of Tourism on Culture 352
Realizing Tourism’s Export Potential 320 The Demonstration Effect 353
What Goes Around Comes Around 320 A Dark Side to Tourism’s Promise
Tracking the Impact of Tourism of Economic Benefits 354
Expenditures 322 External Influences and Internal
Economic Impact Analysis 323 Problems 355
Other Economic Impacts 325 Summary 356
Potential Problems in Tourism-Based You Decide 357
Economies 325 Net Tour 357
Tourism in the Economic Balance 327 Discussion Questions 357
Tourism and Politics 327 Applying the Concepts 358
The Role of Government in Tourism 328
Glossary 358
Tourism Promotion Agencies 330
References 358
Public/Private Organizations 331
Chambers of Commerce and
Convention and Visitors Bureaus
Convention Centers
331
331
13 SUSTAINING TOURISM’S BENEFITS 360
Tourism Planning 334 Learning Objectives 360
Political “Tugs of War” Over Chapter Outline 360
Tourism 335 Green’s the Dream 361

Contents 9
Introduction 362 Vocation and Real Estate Tourism 395

When Is Tourism Too Much Space Tourism 395
of a Good Thing? 362 Marijuana Tourism 396
Planet 363 Meeting Future Tourists’ Needs 396
People 365 Transportation Transformations 398
What’s in a Name? 366 Moving into an Era of Competitive
Ecotourism 367 Cooperation and Consolidation 399
Niche Markets 369 Service Enhancements 401
Establishing Standards 371 Amplifying Guests’ Experiences 402
Going Green 373 Safety and Security Strides 403
A Future of Sustainability 377 Keeping the Human Touch 404
Summary 378 The Green Frontier 404
You Decide 378 Tourism Research 405
Types of Tourism Research 406
Net Tour 379
Who Conducts Tourism Research? 407
Discussion Questions 379
Who Needs and Uses Tourism Research? 408
Applying the Concepts 379 When, Where, and How Is Tourism
Glossary 379 Research Conducted? 408
References 380 Tourism Research Is Hard to Do 409
Conclusion 409
14 THE FUTURE OF TOURISM 382 You Decide 410
Learning Objectives 382 Net Tour 410
Chapter Outline 382 Discussion Questions 410
A New Reality 383 Applying the Concepts 410
Introduction 384 Glossary 411
The Shape of Coming Tourism References 411
Markets 384 Integrated Cases 413
Demographic Shifts 385 It’s Not a Bird House 414
Travelers with Disabilities and Coping with Crisis 417
Special Needs 389 Any City Can be a Tourist Destination 420
Changes in Business, Professional, Struggling to Serve the Cannabis
and Conference Travel 390 Tour Niche 426
Emerging Tourism Markets 391 Glossary 433
Slow Tourism 391
Adventure and Extreme Tourism 392 Index 441
Medical Tourism 394

PREFACE
This text provides a holistic view of the tourism industry through the use of cases and real
world examples. We have taken a global perspective with numerous international exam-
ples and included current trends and industry developments in every industry segment.
We set out to write a book that would be as interesting and multifaceted as the
field itself. Like the five previous editions, the sixth edition of Tourism: The Busi-
ness of Hospitality and Travel features a conversational style, making it fun to read,
yet providing a thorough overview of the tourism industry, giving balanced coverage
to each component part. The role of travel intermediaries, technology, transportation
modes, accommodations, cruise lines, destinations, attractions, and food and beverage
operations are all covered in detail. As the importance of the industry has continued to
grow we have paid increasing attention to the economic, political, environmental, and
social/cultural impacts of tourism and the critical issues of sustainability.
As our title suggests, we look at the tourism industry through the lens of busi-
ness, specifically by considering the management, marketing, and finance issues most
important to industry members. In addition, the book starts with a comprehensive
model of tourism and unfolds by considering each piece of the model in succession. All
students should find the book enjoyable and educational, no matter which facet of the
industry they find most interesting.
New to the Sixth Edition

We have built on the success of the previous editions of Tourism: The Business of Hos-
pitality and Travel and created an even better learning tool in the sixth edition.
A new four-color format is intended to enhance engagement with a text students
have already said they enjoy learning from and reading. Additional key additions and
revisions include:
• We have addressed the ways that environmental and sustainability issues have
continued to grow in importance throughout the industry by highlighting key
issues and emerging trends. Chapters 12 and 13 include an expanded discussion
of the triple bottom line for evaluating the impacts of tourism and sustainability.
• We have added a significant number of academic references in all chapters for
readers who are seeking resources for more in-depth analyses and discussions.
• We increased coverage of the rapidly evolving impact of technology on the tour-
ism industry and expanded coverage of the dynamics of distribution. Chapter 4
discusses the growing importance of social media to tourism and Chapter 5
includes coverage of beacon technology, for example.
• We increased the presence of international practices and perspectives with mul-
tiple new examples.
• Chapter 3 includes an expanded discussion of human resources in the context
of the service-profit chain, especially as it relates to improving and maintaining
service delivery.
• Chapter 10 includes enhanced coverage of cruise line topics with the addition of
new material, especially the growth in fleets and river and Asian cruises.
10

Preface 11
Who Should Use This Book

We designed this sixth edition of Tourism: The Business of Hospitality and Travel so
that it can be tailored to suit a variety of needs. Its engaging writing style and hundreds
of updated industry examples make it the perfect textbook for students taking their
first hospitality or tourism class. The thoroughness of content also makes it suitable
for upper-level hospitality and tourism courses. To meet the advanced critical-thinking
needs of junior and senior students, we have augmented the text’s basic content with
integrative cases that they can use to apply their knowledge and refine their problem-
solving skills.
No matter how experienced the instructor or students, we believe this sixth edition
is one that professors can teach with, not simply from. The various text features and
teaching supplements allow each instructor to develop the course to fit his or her style
to successfully deliver the content in a way that engages and inspires students.
How the Text Is Organized

The sixth edition of Tourism: The Business of Hospitality and Travel introduces stu-
dents to an integrative model of tourism as a dynamic industry and then unfolds, con-
sidering each of the model’s components in turn. Part 1 focuses on the traveling public
and tourism promoters, explaining the importance of providing quality service, the
critical linking role of distribution channel members, and the importance of technol-
ogy to all industry participants. Part 2 familiarizes students with each of the tourism
service providers in turn, beginning with transportation and concluding with destina-
tions and resorts. Part 3 elevates students’ attention to macro-issues facing the indus-
try, such as the important impacts tourism can have on host communities and the
world. Each part of the book is followed by several integrative cases.
Special Features
Tourism: The Business of Hospitality and Travel includes a variety of features to sup-
port student engagement and understanding and to allow instructors the greatest flex-
ibility in teaching their courses.
• Every chapter opens with learning objectives and a detailed outline.
• Every chapter features an engaging opening vignette that illustrates a major
component of the chapter and then is mentioned again within the chapter pages.
• All chapters include ethical/critical-thinking dilemmas (termed “You Decide”)
that are useful in generating class discussion and encouraging students to prac-
tice critical-thinking skills. Each “You Decide” is written to be especially rele-
vant to the chapter in which it appears.
• Every chapter includes tables and figures that will help students understand the
more abstract concepts and theories presented.
• For Your Information (FYI) boxed items are sprinkled throughout the chapters.
These items serve as examples of chapter concepts and provide helpful travel
tips or useful business information.
• Every chapter includes “Tourism in Action” topics that provide students with
in-depth industry examples.
• Discussion questions at the end of every chapter are based on the learning objec-
tives and are intended to help students retain and deepen their understanding of
text material.

12 Preface
• The “Applying the Concepts” section within each chapter offers professors and
students a variety of thought-provoking topics to explore or to use as a blue-
print for applying newly acquired knowledge.
• Key terms are listed at the end of each chapter and a full glossary is placed at the
end of the book.
• Integrative cases follow each major section of the textbook, offering the instruc-
tor supplemental material and examples for student discussion.
Instructor Resources
To fulfill our goal of making this sixth edition of Tourism: The Business of Hospitality
and Travel customizable for individual instructor needs, we have developed a
comprehensive instructor’s toolkit of resources. The instructor’s manual includes
the usual elements—detailed chapter outlines and a test bank—but also includes
supplemental lecture material and discussion guides to support the cases provided
in the text. In addition, discussion suggestions are offered throughout the chapter
outlines to generate student debate on several of the textbook features, such as the
“You Decide” chapter dilemmas. The power of the written word in our text is also
supported with PowerPoint slides.
To access supplementary materials online, instructors need to request an instruc-
tor access code. Go to www.pearsonglobaleditions.com/cook, where you can register
for an instructor access code. You will receive a confirmation email, including your
instructor access code. Once you have received your code, go to the site and log on for
full instructions on downloading the materials you wish to use.

ACKNOWLEDGMENTS
We would like to thank those educators who reviewed our text for this sixth edition and
made it better through their suggestions and constructive criticism: Ping He, Troy State
University; Karen Trevino, Pulaski Technical College; and Wayne Smith, College of
Charleston.
Our colleagues and students in the School of Business Administration at Fort Lewis
College have always supported and challenged us to remain current and continually improve
each edition of this textbook. We would also like to thank our colleagues at The Hong Kong
Polytechnic University, School of Hotel and Tourism Management, who provided expert
knowledge and updated information about various subject areas in the travel and tourism
field. Their generosity made the updating of the book a much easier and enjoyable process.
We would also like to add a special thank you for the support of two dedicated librar-
ians, Lateka Grays, University of Nevada, Las Vegas and Shane Roopnarine, University of
Central Florida who provided invaluable research support.
Global Edition Acknowledgments

Pearson would like to thank the following people for their work on the content of the
Global Edition:
Contributors
Glyn Atwal, Burgundy School of Business
Desmond Lam, University of Macau
Vikneswaran Nair, University of the Bahamas
Eunice Tan, Murdoch University
Reviewers
Glyn Atwal, Burgundy School of Business
Anya Chapman, Bournemouth University
Dave Centeno, University of the Philippines
Eerang Park, Victoria University of Wellington
13

ABOUT THE AUTHORS
Roy A. Cook, DBA (Mississippi State University), is Professor Emeritus, Fort Lewis College,
Durango, Colorado. He has written several textbooks: Tourism: The Business of Hospitality
and Travel, Human Resource Management, Meeting 21st Century Challenges, An Accidental
Hotelier and Guide to Business Etiquette. He also serves as the editor of The Source: A Guide
to Academic Journals and Publishing Opportunities in Hospitality, Leisure, Tourism & Travel
(now in its third edition). He has authored over 100 articles, cases, and papers based on his
extensive working experiences in the tourism and hospitality industry and research interests in
the areas of strategic management, tourism, human resource management, communications,
and small business management. In addition to serving as past editor of Annual Advances in
Business Cases, he serves on the editorial boards of the Journal of Teaching in Travel and
Tourism, Journal of Case Studies, the Business Case Journal, and the Journal of Business
Strategies. He is a long-standing member of the International Society of Travel and Tourism
Educators, Academy of Management, and Society for Case Research (past President and Exec-
utive Director). Dr. Cook served as Associate Dean of the School of Business Administration
at Fort Lewis College and as the Director of the Colorado Center for Tourism Research. He
taught courses and consults in Tourism and Resort Management, Human Resource Manage-
ment, Strategic Management, and Small Business Management.
Cathy H. C. Hsu, PhD (Iowa State University), is the Chair Professor of Hospitality and Tour-
ism Marketing in the School of Hotel and Tourism Management at The Hong Kong Polytechnic
University (PolyU). Prior to joining PolyU in July 2001, she taught in the United States for 12
years in two different state universities. She is the lead author of the books Tourism Marketing:
An Asia-Pacific Perspective, published in 2008 by John Wiley & Sons Australia, Ltd., and Mar-
keting Hospitality, published in 2001 by John Wiley & Sons. She has coedited a book, Tourism
and Demography, published by Goodfellow Publishers, Ltd., in 2011. She is the editor and chap-
ter author of the book, Legalized Casino Gaming in the U.S.: The Economic and Social Impact,
published in 1999, and of the book, Casino Industry in Asia Pacific: Development, Operations,
and Impact, published in 2006, both by The Haworth Hospitality Press. Her research foci have
been tourism destination marketing, tourist behaviors, hotel branding, service quality, and the
economic and social impacts of casino gaming. She has over 200 refereed publications. She is
the Editor-in-Chief of the Journal of Teaching in Travel and Tourism and serves on 10 journal
editorial boards. She received the John Wiley & Sons Lifetime Research Achievement Award in
2009 and International Society of Travel and Tourism Educator’s Martin Oppermann Memo-
rial Award for Lifetime Contribution to Tourism Education in 2011.
Lorraine L. Taylor, PhD (Clemson University) is an Assistant Professor of Management in
the School of Business Administration at Fort Lewis College in Durango, Colorado. There,
she teaches courses in the Tourism and Hospitality Management concentration including
Sustainable Tourism, Event Management, and Critical Issues in Tourism and Hospitality
Management. Prior to earning her doctorate, she pursued a career in the hotel industry and
worked for Walt Disney World, Marriott International, and the Five Star and Five Diamond
rated Sanctuary at Kiawah Island Golf Resort. She also worked as an inspector for a lux-
ury hotel guidebook, Condé Nast Johansens. Dr. Taylor’s research interests are in tourists’
motivations, decision making, and behavior. Her current projects apply these concepts to
the development of profiles in niche markets. She is a member of the Travel and Tourism
Research Association, the International Society of Travel and Tourism Educators, and the
North American Case Research Association. She sits on the editorial review board for the
e-Review of Tourism Research and also reviews for Event Management.
14

The Traveling
PART
1
Public and Tourism
Promoters
CHAPTERS
1 Introducing the World’s Largest Industry, Tourism
2 Marketing to the Traveling Public
3 Delivering Quality Tourism Services
4 Bringing Travelers and Tourism Service Suppliers

Together
5 Capturing Technology’s Competitive Advantages
EXTERNAL
ENVIRONMENT
Society/Culture Economy
TOURISM SERVICE
SUPPLIERS
TOURISM
PROMOTERS Accommo-
dations
Destinations
Travel
Tour agents
operators
TRAVELERS
Incentive
and
Tourist Meeting
boards planners
Attractions & Food &
entertainment Direct beverages
marketing
Transportation
Environment Politics
Technology
An integrated model of tourism.
M01A_COOK1670_06_GE_PT1.indd 15 13/05/17 10:25 AM

CHAPTER 1
Introducing the World’s Largest
Industry, Tourism
Travel is fatal to prejudice, bigotry, and narrow-mindedness.
—Mark Twain
LEARNING OBJECTIVES
After you have read this chapter, you should be able to:
1. Understand and explain the basic definition of 5. Explain why tourism should be studied from mar-
tourism. keting, management, and financial perspectives.
2. Identify the major participants and forces shaping 6. Identify future challenges and opportunities fac-
the tourism industry. ing the tourism industry.
3. Explain historical factors that encouraged the 7. Discuss career prospects in the tourism industry.
development of tourism activities.
4. Explain the impact of physical, human, and
regional geography on tourism activities.
CHAPTER OUTLINE
Could a Career in Tourism Be in Your Future? Maps
Introduction Reading Maps
Indexes and Locators
Services and Tourism Scales
What Is Tourism? Legends
A Tourism Model Physical Geography
Landforms and Vegetation
The History of Travel and Tourism Water
The Empire Era Climate and Seasons
The Middle Ages and the Renaissance Era Human Geography
The Grand Tour Era Regional Geography
The Mobility Era
The Modern Era Studying Tourism from Business Perspectives
Marketing
Bringing Tourism into Focus Management
Geography Describes the Traveler’s World Finance
16
M01B_COOK1670_06_GE_C01.indd 16 13/05/17 10:25 AM

Chapter 1 ▸ Introducing the World’s Largest Industry, Tourism 17
Tourism’s Challenges and Opportunities Net Tour

Where Do You Fit In? Discussion Questions
Topics Covered in Each Chapter Applying the Concepts
Summary Glossary
You Decide References
Tourism is a Worldwide and Growing Phenomenon. Prasit Rodphan/Shutterstock
Could a Career in Tourism Be in Your Future?

From the day Richard Wolf started a summer job at a local hotel in the Black Forest in
Germany, Richard knew he wanted to be in the business of serving people. After finishing
school, Richard decided to move to Munich and enroll in a three-year vocational training
program in one of the city’s leading hotels. It was certainly hard work but a great learning
experience. Richard was not only back in the classroom but was also able to take advantage
of intensive, hands-on training in all departments of the hotel. After passing his final exams,
he gained the professional qualification Hotelkaufmann, which certified the completion of
his apprenticeship in hotel management.
The twists and turns of his career have been as varied and exciting as the industry
that became a part of his life—tourism. Richard started to work as a hotel concierge
in a spa hotel outside of Munich. He soon established a reputation as being extremely
professional and was promoted to work at the front desk. Richard was given greater
responsibilities in his new role and he proved to be a team player with leadership
potential. He was appointed as assistant manager and many of his initiatives ensured
an improvement in guest satisfaction scores.
However, Richard recognized that he needed to further develop his skills and com-
petencies if he wanted to climb up the career ladder. He took the decision to enroll in
a tourism master’s degree course at a leading school in Switzerland. It proved to be a
valuable investment that enabled him to not only develop strategic, decision-making,
and project management skills, but also improve his foreign language skills. After grad-
uation, Richard was recruited as the hotel manager of a small health and wellness hotel
in Lugano, Switzerland. Based on his successful track record of profitable operations,
he was recruited to open a ski resort and hotel in St. Moritz. The promotions and
opportunities within the hotel and hospitality group just kept coming. Richard was
promoted to vice president of a larger ski resort and hotel in the region and his next
assignment found him moving from the Swiss mountains to the Spanish seashore as he
accepted a transfer to the resort’s sister property that was popular with golf enthusiasts.

18 Part 1 ▸ The Traveling Public and Tourism Promoters
His decision to embark on an MBA with a tourism management specialization at a

French business school opened up even more opportunities. Armed with additional edu-
cation and a broad base of operational experience, he secured general manager positions
at a golf resort in Spain, and later in Portugal.
Richard’s most recent career move finds him as a business owner, serving all segments
of the tourism industry. He soon realized that technology was changing how people were
making reservations. He partnered with a former colleague to launch a booking application
that books lodging, destination activities, and vacation packages for individuals and groups
traveling to Spain and Portugal.
As you approach the study of tourism, let your imagination soar, learning all you can
to prepare yourself to grow as your career advances.
Introduction
Welcome to the study of a dynamic group of industries that have developed to serve
the needs of travelers worldwide—tourism! Tourism is the business of hospitality and
travel. Whether we are travelers or we are serving travelers’ needs, this exciting and
demanding group of visitor services industries touches all of our lives. In this book,
you will explore the many and varied segments of this multifaceted industry. As you
learn more about tourism, begin thinking about the future challenges and opportuni-
ties that lie ahead for all of these industries and how they may influence your life.
Services and Tourism

Services and tourism go hand in hand. You will learn more about services in Chapter 3.
However, as we begin our study of tourism, it is important to know that these activities
make a significant economic impact on almost every nation in the world! Services are
growing at a faster rate than all agricultural and manufacturing businesses combined.
In fact, tourism-related businesses are the leading producers of new jobs worldwide.
Tourism has developed into a truly worldwide activity that knows no political,
ideological, geographic, or cultural boundaries. For a long time, tourism was disparate
and fragmented, but as this industry has continued to grow and mature, a sense of pro-
fessional identity has emerged. It has formed lobbying groups such as the World Travel
and Tourism Council (WCTT), which includes executives of airlines, hotel chains, and
travel agents among its members and concentrates on making the case for tourism’s
global importance and economic value. The future prospects for tourism are brighter
than ever as people continue to travel for work or pleasure. “Given its historical per-
formance as a luxury good during expansions and a necessity during recessions, travel
and tourism’s future economic prospects look quite bright”(p. 51).1 As we will see
later, the growth and popularity of tourism activities have not been accidental. Growth
projections indicate that tourism will support almost 350 million jobs worldwide by
2025. This will be an increase of over 70 million jobs when compared to 2015.2
Tourism has become more than just another industry; it has developed into an
important part of the economic fabric of many communities, regions, and countries.
Tourism activities have historically demonstrated a general upward trend in numbers
of participants and revenues. Tourism is one of the few industries that is sensitive
to economic ups and downs, and yet at the same time rebounds quickly from any
negative economic conditions or other environmental impacts. Even in the face of a
dramatic credit crunch, an economic slump, and political uncertainty, the impact on
international tourism was not as severe as the downturn experienced in foreign trade
and industrial production.3 “Over the past six decades, tourism has experienced con-
tinued expansion and diversification, to become one of the largest and fastest-growing
economic sectors in the world” (p. 2).4

What Is Tourism?
As tourism-related activities have grown and changed, many different definitions and
ways of classifying the industry have emerged. Use of the term tourism has evolved
as attempts have been made to place a title on a difficult-to-define group of naturally
related service activities and participants. As we embark on our study of tourism, it is
helpful to begin with a common definition that has been accepted for decades: “the
temporary movement of people to destinations outside their normal places of work
and residence, the activities undertaken during their stay in those destinations, and the
facilities created to cater to their needs.”5
As our definition shows, tourism includes a wide array of people, activities, and
facilities, and most people would agree that it is a unique grouping of industries that
are tied together by a common denominator—the traveling public.
Can you describe tourism in your own words? Take a moment to think about this
question. You might find it easy to answer this question in general terms, but more diffi-
cult to answer if you were asked to provide specific details. In fact, you might find yourself
facing a task similar to the one depicted in Figure 1.1. Tourism is much like the elephant:
diverse and sometimes hard to describe, but, just like the elephant, too big to be ignored.
Specific segments of tourism, such as air transportation, theme parks, eating
and drinking establishments, lodging and accommodations, and museums, have
their own industrial classification codes in every industrialized country. However,
the overall grouping of related activities and organizations that come together to
create the more comprehensive tourism industry does not have its own distinctive
industry code. To address this concern organizations such as the WTTC and the
United Nations World Tourism Organization (UNWTO) have spearheaded efforts
to highlight the breadth and economic impact of tourism. Even though tourism
may not be classified as a distinct industry, it is generally agreed that “ ‘[t]ourism’
appears to be becoming an acceptable term to singularly describe the activity of
people taking trips away from home and the industry which has developed in
response to this activity.”6
FIGURE 1.1
The blind men and tourism.
Food and beverage
Destinations
Transportation
Accommodations
Attractions and
Travel agencies
entertainment

Table 1.1 Components of the Tourism Industry

Accommodation Services Food and Beverage Services
Railway Passenger Transport Services Road Passenger Transport Services
Water Passenger Transport Services Air Passenger Transport Services
Transport Equipment Rental Services Travel Agencies and Other Reservation
Services
Cultural Services Sport and Recreational Services
Country-Specific Tourism Goods Country-Specific Tourism Services
Based on: International Recommendation for Tourism Statistics 2008, UNWTO, 42.
Both the WTTC and UNWTO track and report tourism statistics to highlight the
size, scope, and impact of tourism-related businesses. Comparable data from around the
world is made possible through the use of a common definition of tourists or visitors.
As defined by UNWTO, tourism is a social, cultural, and economic phenomenon, which
entails the movement of people to countries and places outside their usual environment
for personal or business/professional purposes. These people are called visitors . . . and
tourism has to do with their activities, some of which involve tourism expenditure.7 The
U.S. Travel Association has taken the commonly agreed upon definition of tourism and
restricted its scope by defining these activities as trips away from home of 50 miles or
more, one way, or trips that include an overnight stay in paid accommodations.8
By using a common umbrella definition, data can be collected and analyzed for
each of the industry subgroupings shown in Table 1.1 in Tourism Satellite Accounts.
Even as the debate continues for a common definition, it has been suggested that
the definition be expanded to include the concept of displacement. This inclusion would
expand the definition to capture, “the decision of tourists to leave the familiar behind in
order to participate in something new” (p. 122).9 Because definitions conjure up different
meanings and can be used for different purposes, some critics have suggested using a term
other than tourism to describe the industry. One of these suggestions has been to use a
more inclusive and descriptive term such as “visitor-service industry.”10 For convenience
and ease of understanding, however, we will refer to tourism as an industry in this book.
A Tourism Model
In an attempt to overcome some of the problems encountered in describing tourism,
the model presented in Figure 1.2 was developed to highlight important participants
and forces that shape the tourism industry. The model, like a photograph, provides a
picture that begins to capture the dynamic and interrelated nature of tourism activities.
This model can be used as a reference throughout the entire text. Although many of
the terms in our tourism model may not be familiar at this time, you will be learning
more about each one and its importance in later chapters.
As you study our tourism model, notice its open nature and how each of the seg-
ments is related to the others. Let’s begin our study of tourism by looking at travelers
(tourists), who serve as the focal point for all tourism activities and form the center
of our model. Radiating from this focal point are three large bands containing several
interdependent groups of tourism participants and organizations.
Individual tourists may deal directly with any of these tourism service suppliers,
but they often rely on the professional services provided by tourism promoters shown
in the first band of our model. Tourism promoters, such as travel agencies and tourist

FIGURE 1.2
An integrated model of tourism. EXTERNAL
ENVIRONMENT
TOURISM SERVICE
SUPPLIERS
TOURISM
PROMOTERS Accommo-
dations
Destinations
Travel
Tour agents
operators
TRAVELERS
Incentive
and
Tourist Meeting
boards planners
marketing
Transportation
Technology
boards, provide information and other marketing services. Moving to the next band
of our model, we see key tourism suppliers who provide transportation, accommoda-
tions, and other services required by travelers.
Tourism suppliers may provide these services independently; they may compete
with each other; and, at times, they may work together. For example, airline, bus, rail-
road, cruise ship, and car rental companies may compete individually for a traveler’s
business. However, they may also team up to provide cooperative packages such as
fly–ride, fly–cruise, and fly–drive alternatives. Or, as airlines have discovered, they
must establish strategic alliances with many other carriers to provide seamless travel
across states, nations, and continents. Hotels and resorts may also compete against
each other for the same traveler’s patronage yet cooperate with transportation provid-
ers to attract tourists to a specific location. Service providers representing all segments
of the tourism industry may often work together to develop promotional packages
designed to attract tourists to destinations.
How closely these individuals and organizations work together is ultimately influ-
enced by the forces shaping the face of tourism activities. As our model shows, the tour-
ism industry does not operate in a vacuum. All of the participants, either individually
or as a group, are constantly responding to a variety of social/cultural, political, envi-
ronmental, economic, and technological forces. These forces may range from subtle
changes, which are noticeable only after many years, to more dramatic changes, which
have immediate and visible impacts. Examples of these forces can be found all around us.
Gradual changes may be noticed in destinations that were once fashionable but
eventually faded in popularity, such as Niagara Falls on the Canadian/U.S. border and
Brighton in England. Similar shifts can also be seen in transportation. Steamship pas-
sage across the North Atlantic was eclipsed by the faster and more efficient airplane,
which opened new horizons for travelers. Immediate impacts can be seen in sudden
shifts brought about by currency devaluations, wars, fuel shortages, natural disasters,
and economic conditions.11 Rapid adoption of new technologies such as the Internet
can have immediate and far-reaching impacts on tourism activities and service provid-
ers. A country that was once avoided may suddenly become a popular tourism destina-
tion because it is more affordable or accessible. Conversely, a once-popular destination
may be avoided because of a recent natural disaster or political upheaval.

The number of travelers from and to nations also varies dramatically due to political
and economic changes. Through the year 2020, Europe will continue to see the largest
number of tourist arrivals followed by East Asia and the Pacific and then the Americas.
At the country level, China will be the largest tourist receiving country by 2020, surpass-
ing France, and the United States.12 Now that China has developed a sizable middle class
due to its economic growth, it has become the biggest Asian nation in terms of outbound
travelers and a domestic market that is growing 15% to 20% a year.6,13
Let’s look at how our model might work. Suppose you (a tourist) want to visit a
sunny beach or a snow-covered mountain. You might begin planning your trip by brows-
ing the websites of different airlines, condominiums, hotels, and/or resorts (tourism
service suppliers) searching for possible flight schedules and accommodation options.
You could simply call a travel agent (tourism promoter) who would search out the best
alternatives to meet your needs, rather than spending time and money contacting each
supplier. Another option would be taking a “virtual trip” to your desired destination by
browsing offerings on the Internet. Finally, you could contact your preferred destinations’
local chambers of commerce or visitors’ bureaus to learn more about their offerings.
As you progress through this book, we will focus our attention on specific features
of our model, learning more about each component and how it interacts with other
components of the tourism industry. We will begin our journey into the study of tour-
ism by looking back in time to discover the origins of these activities and the founda-
tions they laid for tourism as we know it today.
The History of Travel and Tourism

Table 1.2 lists some of the milestones in the development of tourism. Long before the
invention of the wheel, travel occurred for a variety of reasons. In the beginning, it was
simple. As seasons changed and animals migrated, people traveled to survive. Because
these early travelers moved on foot, they were confined to fairly small geographic areas.
Travel may have remained a localized experience, but people by nature are curious. It is
easy to imagine these early travelers climbing a mountain or crossing a river to satisfy
their own sense of adventure and curiosity as they sought a glimpse of the unknown.
We can only guess at the wonder and amazement of early travelers as they made
each new discovery. However, there is a rich history of people and cultures that forms
the foundation of tourism. History provides important insights into the reasons for
travel and the eventual development of tourism. Based on early records, we know that
many cultures and nations moved great armies and navies to conquer and control
resources and trade routes. Although military forces often traveled great distances,
it was probably not until the emergence of the Egyptian, Eastern Mediterranean, and
Roman Empires that travel began to evolve into tourism as we know it today.
Early recorded history provides a glimpse into ancient tourism activities. The Phoe-
nicians, like many travelers, were interested in travel because of a sense of curiosity and
discovery as well as a means of establishing trade routes. Although written records are
scarce, other peoples such as the Mayans on the Gulf Coast of what is now Mexico and
the Shang Dynasty in what is now present-day China probably traveled for many of the
same reasons as the Phoenicians. Evidence of their travels can be found in the artifacts
they collected during their journeys to faraway places. One thing we know for sure is that
as civilizations became established and spread geographically, travel became a necessity.
The Empire Era

The point at which simple travel evolved into the more complex activities of tourism is
hard to identify. However, tourism as an industry probably began to develop during the

Table 1.2 Milestones in the Development of Tourism

Prerecorded history Travel begins to occur out of a sense of adventure and curiosity.
4850 b.c.–715 b.c. Egyptians travel to centralized government locations.
1760 b.c.–1027 b.c. Shang Dynasty establishes trade routes to distant locations throughout the Far East.
1100 b.c.–800 b.c. Phoenicians develop large sailing fleets for trade and travel throughout their empire.
900 b.c.–200 b.c. Greeks develop common language and currency, and traveler services emerge as city-
states become destinations.
500 b.c.–a.d. 300 Romans improve roads, the legal system, and inns to further travel for commerce,
adventure, and pleasure.
a.d. 300–a.d. 900 Mayans establish trade and travel routes in parts of Central and North America.
a.d. 1096–a.d. 1295 European travel on failed religious crusades to retake the Holy Lands from Muslim control
introduces these military forces to new places and cultures.
a.d. 1275–a.d. 1295 Marco Polo’s travels throughout the Far East begin to heighten interest in travel and trade.
14th–16th centuries Trade routes develop as commercial activities grow and merchants venture into new territories.
a.d. 1613–a.d. 1785 Grand Tour Era makes travel a status symbol for wealthy individuals seeking to experience
cultures of the civilized world.
18th–19th centuries Industrial Revolution gives rise to technological advances, making travel and trade more
efficient and expanding markets; increasing personal incomes make travel both a
business necessity and a leisure activity.
1841 Thomas Cook organizes first group tour in England.
1903 Wright Brothers usher in era of flight with the first successful aircraft flight.
1913 Westinghouse Corporation institutes paid vacations for its workers.
1914 Henry Ford begins mass production of the Model T.
1919 First scheduled airline passenger flight debuts between London and Paris.
1945 World War II ends and ushers in new era of prosperity, giving rise to millions of people with
the time, money, and interest to travel for pleasure and business.
1950 Diners Club introduces the first credit card.
1952 Jet passenger service is inaugurated between London and Johannesburg, South Africa.
1950s Rapid expansion of hotel and motel chains in the United States via franchise agreements.
1978 Competition on routes and fares begins with signing of Airline Deregulation Act.
1978 American Airlines expands access to electronic reservation system, SABRE, to travel agencies.
1984 The State Council of China approves the organization of tours to Hong Kong and Macao
for mainland residents visiting relatives, which was the prelude to the outbound tourism
of Chinese citizens.
1996 Expedia is founded as a division of Microsoft.
2000 TripAdvisor is founded.
2001 Dennis Tito launches the advent of space tourism as he pays $20 million for an eight-day
vacation aboard the International Space Station.
2001 Transportation Security Administration (TSA) in the United States is created to ensure
airline passenger safety in the wake of the September 11th terrorist attacks on the World
Trade Center in New York City and the Pentagon in Washington, D.C.
2002 The euro currency is introduced, signaling liberalization of travel among member nations of
the European Union.
2004 Mark Zuckerberg, a Harvard student, launches a social networking service Facebook.com.
2007 Air Bed and Breakfast (AirBnB) launched, signaling a wave of new services such as Uber
and an expanding sharing economy in tourism services.
2011 Google provides an online flight-booking service, Google Flights, to public.

Empire Era, which stretched from the time of the Egyptians to the Greeks and finally
came to an end with the fall of the Roman Empire. During this time, people began
traveling in large numbers for governmental, commercial, educational, and religious
purposes out of both necessity and pleasure. The Egyptian Kingdoms (4850–715 b.c.)
were the first known civilization to have consolidated governmental functions at cen-
tralized locations. Travel to these locations by boat was particularly easy because trav-
elers could use the Nile River, which flowed northward but was constantly brushed by
southward breezes. Because oars were not needed, travel in either direction was rela-
tively effortless. Boats could go north with the current or south with sails.
As travel became commonplace, basic necessities such as food and lodging had
to be provided. Several factors combined to encourage travel during the height of the
Egyptian, Greek, and Roman Empires. Large numbers of travelers began to seek out
enjoyable experiences in new locations. The most notable group of these travelers,
because of their numbers, was the Greeks.
The Greek Empire (900–200 b.c.) promoted the use of a common language
throughout much of the Mediterranean region, and the money of some Greek city-
states became accepted as a common currency of exchange. As centers of governmen-
tal activities, these city-states became attractions in themselves. They offered visitors a
wide variety of opportunities to enjoy themselves while away from home. Shopping,
eating, drinking, gaming, and watching spectator sports and theatrical performances
are just a few of the many activities that grew out of travel and evolved into the more
encompassing aspects of tourism.
The growth of the Roman Empire (500 b.c.–a.d. 300) fostered expanded tourism
opportunities for both middle-class and wealthy citizens. Good roads (many of which
were built to connect the city of Rome to outlying areas in case of revolt) and water
routes made travel easy. As these roads were developed, so were inns, which were
located approximately 30 miles apart, making for a day’s journey. Fresh horses could
be hired at the inns and at more frequent relay stations. With effort, people could
travel 125 miles a day on horseback, knowing they would have a place to eat and sleep
at the end of the day. These roads, which connected Rome with such places as Gaul,
Britain, Spain, and Greece, eventually extended into a 50,000-mile system. The most
famous road was the Appian Way, joining Rome with the “heel” of Italy.
Many of the hassles of travel to distant places were removed because Roman cur-
rency was universally accepted and Greek and Latin were common languages. In addi-
tion, a common legal system provided protection and peace of mind, allowing people
to travel farther away from home for commerce, adventure, and pleasure. Just like the
Greek city-states, cities in the Roman Empire became destination attractions or way-
side stops along the way to a traveler’s final destination.
Has this brief glimpse into ancient history taught us anything of use today? The
answer is yes. Even today, tourism activities continue to flourish where individuals have
free time; travel is easy and safe; there are easily exchangeable currencies; common lan-
guages are spoken; and established legal systems create a perception of personal safety.
The absence of any of these factors can dampen people’s desire to travel and enjoy
tourism-related activities, as can be seen in the demise of travel during the Middle Ages.
The Middle Ages and the Renaissance Era

Travel almost disappeared during the Middle Ages (5th–14th centuries a.d.). As the
dominance of the Roman Empire crumbled, travel became dangerous and sporadic.
The feudal system that eventually replaced Roman rule resulted in many different
autonomous domains. This breakdown in a previously organized and controlled soci-
ety resulted in the fragmentation of transportation systems, currencies, and languages,
making travel a difficult and sometimes dangerous experience.

FIGURE 1.3
Venice
Marco Polo’s travel route
from his home in Venice, Constantinople Taitu
Italy, to China during the (Beijing)
13th century. Black Sea A S I A
Caspian
Sea
Acre
PERSIA
C H I N A
Hormuz
EAS
Persian INDIA BURMA
CHINA S
Gulf Bay
of
Arabian Bengal
AFRICA Sea
CEYLON
Indian Ocean SUMATRA
As the Roman Catholic Church gained power and influence, people began to talk
of Crusades to retake the Holy Land. There were nine of these Crusades (a.d. 1096–
1291), but each failed. In 1291, Acre, the last Christian stronghold, was retaken by the
Muslims, bringing the Crusades to an end. Although conquest and war were the driv-
ing forces behind the Crusades, the eventual result was the desire of people to venture
away from their homes to see new places and experience different civilizations.
After the Crusades, merchants such as Marco Polo traveled to places well beyond the
territories visited by the Crusaders (see Figure 1.3). Reports of Polo’s travels and adven-
tures (1275–1295) across the Middle East and into China continued to heighten interest in
travel and trade. The rebirth in travel emerged slowly during the Renaissance (14th–16th
centuries). Merchants began to venture farther from their villages as the Church and kings
and queens brought larger geographic areas under their control. Trade routes slowly began
to reopen as commercial activities grew and merchants ventured into new territories.
The idea of traveling for the sake of experiences and learning can probably be attributed
to the first recorded “tourist,” Cyriacus of Ancona. His journeys took him around the
Mediterranean Sea in a quest to learn more about and experience Greek and Roman His-
tory.14 The desire to learn from and experience other cultures heightened awareness of the
educational benefits to be gained from travel and led to the Grand Tour Era.
The Grand Tour Era

The Grand Tour Era (1613–1785), which marked the height of luxurious travel and
tourism activities, originated with the wealthy English and soon spread and became
fashionable among other individuals who had time and money. Travel, and the
knowledge provided by these travels, became a status symbol representing the ultimate
in social and educational experiences. Grand Tour participants traveled throughout
Europe, seeking to experience the cultures of the “civilized world” and acquire knowl-
edge through the arts and sciences of the countries they visited. Their travels took
them to a variety of locations in France, Switzerland, Italy, and Germany for extended
periods of time, often stretching over many years.

Although the desire to participate in the Grand Tour continued, the Industrial Rev-
olution, which began c. 1750, forever changed economic and social structures. Whole
nations moved from an agricultural and commercial focus to modern industrialism.
People became tied to the regimented structures and demands of factory life and the
management of business enterprises. Economic growth and technological advances led
to more efficient forms of transportation, the integration of markets across geographic
and international boundaries, and higher personal incomes for larger numbers of peo-
ple. Travel became a business necessity as well as a leisure activity, and tourism sup-
pliers rapidly developed to serve the growing needs of travelers. The days of leisurely
travel over extended periods of time to gain cultural experiences faded away as fewer
and fewer people were able to take advantage of these time-consuming opportunities.
The Mobility Era

Growing economic prosperity and the advent of leisure time as well as the availability
of affordable travel ushered in a new era in the history of tourism. People who were no
longer tied to the daily chores of farm life began to search for new ways to spend their
precious leisure time away from their jobs in offices, stores, and factories.
The Mobility Era (1800–1944) was characterized by increased travel to new and
familiar locations, both near and far. Tourism industry activities began to increase as
new roads, stagecoaches, passenger trains, and sailing ships became common sights
in the early 1800s. Great Britain and France developed extensive road and railroad
systems well before Canada and the United States. The growth and development of
roads and railroads helped to increase the availability of transportation alternatives
and reduced their costs, attracting more and more people to the idea of travel.
Thomas Cook (1808–1892) can be credited with finally bringing travel to the gen-
eral public by introducing the tour package. In 1841, he organized the first tour for a
group of 570 people to attend a temperance rally in Leicester, England. For the price of
a shilling (12 pence), his customers boarded a chartered train for the trip from Lough-
borough, complete with a picnic lunch and brass band. The immediate success of his
first venture and the demand for more assistance in making travel arrangements led
Cook into the full-time business of providing travel services.
The next major steps in the Mobility Era were the introduction of automobiles
and air travel. Although automobile technology was pioneered in Britain, France, and
Germany, it was Henry Ford’s mass production of the Model T in 1914 that brought
individual freedom to travel, opening new horizons for millions of people. Winged
travel was not far behind, and the time required to reach faraway places began to
shrink. Orville and Wilbur Wright ushered in the era of flight with their successful test
of the airplane in Kitty Hawk, North Carolina, in 1903.
The Modern Era

But the means of mobility and an interest in seeing new places were not enough. The
seeds of mass tourism were planted during the first half of the 20th century when
industrialists such as George Westinghouse created the paid vacation, believing that
annual breaks from work for employees would increase productivity. The working
and middle classes in industrialized countries thus were given the financial means and
the time to satisfy their newfound wanderlust. Indeed, at the dawn of the 21st century,
most workers in virtually all industrialized nations have several weeks of vacation time
that they may choose to spend traveling.
Mass tourism received an additional boost after World War II (which ended in
1945). During this war, millions of people throughout the world, including over 17
million Canadian and U.S. citizens, were exposed to many new, different, and even
exotic locations as they served in a variety of military assignments. Military service

FYI ALL WORK AND NO PLAY

Forgo vacation time? You would have “long hours workers” take ten days U.S. federal government should man-
to be crazy, right? Well, many Amer- or less. In the United States, a Harris date paid vacation days just as many
icans and Brits work insane hours poll revealed that 51% of Americans European countries do. Believe it or
and frequently skip their allotted paid did not plan to take an annual vacation not, President William Taft (1909–1913)
vacation periods. Nearly one-quarter even though they had earned an aver- proposed that all workers should be
of self-confessed workaholics in Great age of 14 days. In contrast, workers in given two or three months off each
Britain take not a single day’s “holiday” France on average forgo only 3 of the year! Yet, the United States is still the
of the 24 days they earn during the year. 36 days they earn each year. Human only advanced economy that does not
Ten percent of workers who work over resource experts believe that vacation require any mandatory vacation time.
48 hours per week also forgo vacation time is necessary for workers to be
breaks, whereas another 22% of these productive, and they believe that the
Sources: Based on All work and no holidays (2002). Management Services, 46(2), 5; Bellows, K. (2003). Too little play time. National
Geographic Traveler, 20(8), 18; Allegretto, S., and Bivens J. (2006, July–August). Foreign Policy, 26–27. Dickey, J. Save our vacation,
(June 1, 2015) Time 180(20). Save our vacation, 44–49.
forced many people who had never traveled before to do so, and they were eager to
share their positive experiences with family and friends when they returned home.
Following the end of World War II, several additional factors helped encourage the
growth of tourism. Cars were again being produced in large numbers; gas was no lon-
ger rationed; and prosperity began to return to industrialized countries. As American
families travelled around the country in cars, the motel business began to boom. Also
in the 1950s, hotels and motels expanded quickly through the newly adopted franchis-
ing development model. The introduction of jet travel in the 1950s and its growing
popularity in the 1960s further accelerated growth in both domestic and international
travel. To grease the gears of the tourism industry even further, in 1950, the credit
card was born in the form of the Diners Club card. Credit cards provided travelers
with purchasing power anywhere in the world without the risk of carrying cash and
the hassle of currency exchange. In fact, credit cards are now the preferred form of
international buying power because travelers can charge their purchases in the local
currency. Time, money, safety, and the desire to travel combined to usher in an unpar-
alleled period of tourism growth that continues today.
The 20th-century phenomenon that came to be known as mass tourism now
includes two different groups of travelers.15 These groups are classified as organization
mass tourists who buy packaged tours and follow an itinerary prepared and organized
by tour operators. The second group is classified as individual mass tourists. These
travelers visit popular attractions independently but use tourism services that are pro-
moted through the mass media. In addition, many travelers are now seeking more than
just going to a destination to be able to say “been there, done that.” They have a desire
to become truly immersed in all the destination has to offer and when able to, give
back through educational and volunteer programs.
Well into the 21st century, the tourism industry has proven to be full of opportunities
and challenges. Widespread Internet access, opening of previously closed international bor-
ders, and increased wealth and mobility of citizens in increasingly industrialized countries
such as China and India are opening new venues for travelers and providing millions more
potential tourists. Even countries such as Vietnam and Cuba that were once off limits to
U.S. travelers are experiencing explosive tourism growth. However, the future is not com-
pletely rosy for tourism. Terrorism, political and economic instability, and health scares
have discouraged travel. Increased security efforts have also meant increased hassles and
time constraints for travelers at airports, borders, and attractions. Only time will tell what
the future holds for us, as tourism industry members and as consumers of tourism services.

This has been just a brief journey through some of the changes that have led to the
growth of tourism. In later chapters, we will explore more of the historical details and
importance of each of these changes as well as some of the more recent factors that
have shaped the tourism industry.
Bringing Tourism into Focus

The continued growth in tourism and, more specifically, international travel may well
make tourism the world’s peace industry. “As we travel and communicate in ever-
increasing numbers, we are discovering that most people, regardless of their political
or religious orientation, race, or socioeconomic status, want a peaceful world in which
all are fed, sheltered, productive, and fulfilled.”16
Our methods of transportation have definitely improved, and the distances we can
cover in relatively short periods have greatly expanded, but the sense of curiosity and
adventure found in those early travelers is still with us today. However, travel today is
more than just adventure, and it has spawned an entire group of service industries to
meet the needs of tourists all over the world.
Where people travel, why they choose a particular location, and what they do once
they arrive are of interest to everyone in the tourism industry. These data are now collected
and recorded based on the reasons given for taking trips. The primary reasons for travel
can be broken into three broad categories: vacation and leisure travel, visits to friends
and relatives (called VFR in the tourism industry), and business or professional travel (see
Figure 1.4). Travel in all of these categories creates demands for other tourism activities.
Travel and tourism have now become so commonplace in industrialized countries
that we may fail to think about what has made these activities possible. If you think
about it, tourism affects all of our lives and is intertwined throughout the entire fabric
of a host community, region, or country. Tourism can be viewed and studied from a
variety of perspectives. In addition to geography and the commonly studied business
disciplines of marketing, management, and finance, other disciplines often included in
the study of tourism are:
• Anthropology
• Sociology
• Economics
• Psychology
FIGURE 1.4
Typical reasons for travel. The percentages of
trips in each category may vary from year-to-
year, but they are relatively constant over time.
Business or professional: 20%; Visit friends or Visit friends
Vacation or leisure,
relatives: 40%; Vacation or leisure: 37%; Others: or relatives,
3%. Source: Travel Facts and Statistics. U.S. Travel 37%
40%
Association (2010).
Others,
3%
Business or
professional,
20%

Each of these perspectives provides important insights into tourism activities and
raises a variety of questions. Some of the more commonly asked questions that could
help us understand travel, tourism, and tourists include:
• Who are these visitors?
• Why do they travel?
• Where do they travel?
• What are their concerns when they travel?
• What are their needs when they travel?
• What forms of transportation do they use?
• Where do they stay?
• What do they do when they travel?
• Who provides the services they need?
• What impact do they have on the locations they visit?
• What types of career opportunities are available in this industry?
These and many other questions point to the need to study tourism.
Casual or commonsense approaches to answering these questions will not prepare
us to meet the needs of tomorrow’s visitors. Rather than studying tourism from only
one perspective, throughout this book you will have the opportunity to learn from
multiple perspectives. You will learn more about tourism in general, the segments of
the tourism industry, and the key issues facing tourism.
Technology continues to have an unprecedented effect on the tourism industry.
For example, the Internet has inexorably changed the way tourism services are sold
and automation is being adapted for new uses. Throughout the chapters of this text,
we will highlight how technology is affecting the service landscape. Technology plays
such an important role in the tourism industry that we will take a more in-depth look
at these impacts in Chapter 5.
Geography Describes the Traveler’s World

Travel is a key component in all tourism activities; therefore, a basic understanding
of geography can enrich our understanding of the tourism industry. As a future tour-
ism professional, you may find yourself working in a position requiring more than
just a basic understanding of geography. Careers in travel agencies, tour operations,
airlines, car rental companies, rail and bus companies, cruise lines, travel publishing,
and cartography are just a few examples of where geographic knowledge may be con-
sidered important. If you see yourself in any of these careers or just want to be a more
informed traveler, join us as we journey through this section and learn how geography
provides a window to the world.
Take a look at what National Geographic Traveler calls the world’s greatest des-
tinations (see Table 1.3). How does geography play a role in defining these special
places? Are they the same or different? Are they near or far? Are they rural or urban?
Let your imagination roam, and take a moment to locate each of these distinct destina-
tions on a map. What makes these destinations special?
Now that you have located these destinations, see whether you can answer these
basic questions. How do you get to these locations? Based on climatic conditions,
when would be the best time to visit? What would you see and experience once you
arrive? A thorough understanding of geography gives you the confidence to answer
these questions and meet travelers’ needs.

Table 1.3 Fifty Places of a Lifetime

African Continent Antarctica Asian Continent
Pyramids of Giza The entire continent Istanbul
Sahara North American Continent Acropolis
Serengeti Canadian Rockies Jerusalem
Seychelles Boundary Waters Petra
European Continent Canadian Maritimes Great Wall of China
English Lake District San Francisco, CA Japanese Ryokan
Coastal Norway Big Sur, CA Taj Mahal
London Mesa Verde, CO Hong Kong
Paris Grand Canyon, AZ Danang to Hue
Loire Valley Vermont Angkor
Barcelona New York Kerala
Amalfi Coast British Virgin Islands Outer Space
Vatican City Oceania An infinite frontier
Tuscany Papua New Guinea Reefs
Venice Outback
Alps North Island, New Zealand
Greek Islands Hawaiian Islands
South American Continent Galápagos Islands
Tepuis
Amazon Forest
Machu Picchu
Rio de Janeiro
Torres del Paine
Maps
What better place to start studying geography than with maps? For centuries, maps
have played a role in traveler’s plans and adventures. But, what are maps?
“Since classical Greek times, curiosity about the geographical landscape has
steadily grown, and ways to represent it have become more and more specialized.
Today there are many kinds of mapmaking, ….”17 Globes, photo maps, trail maps,
topographical maps, satellite image maps, and street guides should come to mind
when you think of maps and how to read them understanding basic cartography nota-
tions. However, these are only a few examples; other types of maps are also commonly
encountered. Mall diagrams, airport layouts, and even stadium and concert seating
diagrams are all forms of maps. “Like a model automobile or ship, a map is a scale
model of the real world, made small enough to work with on a desk or computer.”18
No matter how large or small, maps show you where you are and how to get to
where you want to be. Today, maps serve a variety of tourism purposes, as they are
created to depict scale models of reality and convey important information to users.
For smaller locations such as airports, theme parks, and historic districts, mapmaking
(technically plans) is fairly simple. However, for expansive areas such as continents or
countries, mapmaking is not quite as simple.
The Earth is a sphere, so the most accurate map of the world is a globe; but car-
rying around a sphere that is big enough to provide any level of detail is a physical
impossibility. So, although these spheres make attractive conversation pieces and let

608
458
308
158
Equator 08
158
308
458
FIGURE 1.5
Mercator projection. Source: Semer-Purzycki, Jeanne, Travel Vision: A Practical Guide for the Travel, Tour-
ism and Hospitality Industry, 1st Ed., © 2009, p. 47. Reprinted and Electronically reproduced by permission of
Pearson Education, Inc., Upper Saddle River, NJ.
us visualize the complexity of our world, they are not very practical travel compan-
ions. For practical purposes, maps must be flat, which results in distortion, meaning
features don’t appear exactly as they are when large areas are involved no matter how
they are drawn. The most common of these representations is the Mercator projection
(see Figure 1.5), and like most early maps, it was developed for navigation purposes.
In addition to the Mercator projection, two other representations of the world are
used. One is the Robinson projection (see Figure 1.6) and the other is Goode’s homolosine
projection (see Figure 1.7). No matter what approach is taken to represent the Earth in a
two-dimensional format, some distortion will occur. The Mercator projection distorts the
Arctic and Antarctic regions, making them appear larger than they really are. For example,
Greenland appears to dwarf Australia, when in fact Greenland is only about one-fourth
the size of Australia, having a landmass of 2,175,600 square kilometers compared with
Australia’s landmass of 7,617,931 square kilometers. The Robinson projection provides
a more accurate view of the world, but it, too, results in some distortion, especially at
the poles, which appear to be larger than they really are. Goode’s homolosine projection,
which resembles a flattened orange peel, creates the most accurate view of the Earth and
creates the least amount of distortion. Because the world is round, whichever projection is
used, the shortest distance between two points is not a straight line, but a curved one.
Current information technologies allow travelers access to maps in a num-
ber of different formats, including the traditional two-dimensional drawings,
three-dimensional drawings, satellite images, and actual video images of the locations
shot from the street. These can be accessed from computers or a number of mobile
devices. The three-dimensional drawings simulate real view of the locations and reduce
the two-dimensional challenge of distortion.
Reading Maps
As the previous representations of the world show, not all maps are created alike.
However, once you master the basic language of mapmaking, cartography, you can

FIGURE 1.6
Robinson projection. Source: Semer-Purzycki, Jeanne, Travel Vision: A Practical Guide for the Travel, Tour-
ism and Hospitality Industry, 1st Ed., © 2009, p. 47. Reprinted and Electronically reproduced by permission of
Pearson Education, Inc., Upper Saddle River, NJ.
FIGURE 1.7
Goode’s homolosine projection.
Source: Semer-Purzycki, Jeanne. Travel
Vision: A Practical Guide for the Travel,
Tourism and Hospitality Industry, 1st
Ed., © 2009, p. 47. Reprinted and Elec-
tronically reproduced by permission of
Pearson Education, Inc., Upper Saddle
River, NJ.
interpret any map. Unlocking this information requires understanding of basic carto-
graphic notations, that is, geographic grids (longitude and latitude), legends (symbols
and colors), and indexes (location guides).
“Twenty-first-century maps are more than just maps—they are analytical tools
referred to as geographic information systems (GIS) and are part of a larger field of
study called geographic information science (GIScience).”19 Every map has several
things in common. They all will serve as a means of location. The most common
means of determining location is via latitude and longitude. Every place on Earth can
be located by knowing these two pieces of information.
Finding a location’s latitude and longitude relies on two imaginary lines that divide
the Earth. One is the equator located halfway between the North and South Poles.
Distances moving north or south from this line are measured in degrees of latitude.
The other imaginary line is the prime meridian, running north and south through
Greenwich, England, and connecting the two poles. Distances moving east and west
from this line are measured in degrees of longitude. These lines intersect at right angles,
forming a grid (see Figures 1.5–1.7). So, you could locate Christchurch, New Zealand,
on a map by knowing the coordinates, 43°32¿S and 172°38¿E; or if you were given the
coordinates 44°57¿ N and 93°16¿ W, you would find Minneapolis, USA.

On the opposite side of the Earth from the prime meridian is the International
Date Line separating east from west. This line is not a straight longitudinal line, but
it corresponds fairly closely to 180° longitude, and just like the prime meridian, it
extends from the North to the South Pole. This line has been set by international agree-
ment and separates one calendar day from the next. Areas to the west of the Interna-
tional Date Line are always one day ahead of areas to the east. Therefore, Pacific Rim
and Asian countries are one day ahead of the United States and Canada, and several
hours ahead of European countries.
Indexes and Locators

Some maps, such as diagrams of specific locations like road atlases, may not be so
sophisticated as to have latitude and longitude. These maps may simply have indexes
of locations listed alphabetically with map-specific grids or location indicators. Spe-
cific map locations are identified through the use of two index points such as A and
12. You would find A by looking down the left- or right-hand side of the map and 12
by looking across the top or bottom of the map. If the location is small, specific points
of interest may be identified only by letters or numbers that correspond to locators
on the outside border of the map. An airport layout is an example of a small-place
diagram providing all the information travelers need to find their way around as they
check in, change flights, or locate available services.
Second, maps will have locator information. These locators may be cardinal direc-
tions or compass points such as north, south, east, and west. If you are directionally
impaired, it may help you to remember that up is north and down is south when using
the North Pole as a reference point. The same holds true for left and right. Left is west
and right is east. However, anytime you look at a map, always remember to orient
(place) the map facing north so that you will have a common sense of direction.
Scales
Maps are replicas of reality, so they must be smaller than the area depicted. Therefore,
everything shown on a map must be proportional, which requires a map scale. The
scale will be indicated on the map. Examples of scales may include notations such as
1– equals one mile or 1– equals ten miles. Scales may also be shown as graphic or bar
scales. Figure 1.8 provides several examples of how scales may be used on maps.
Legends
Symbols or icons are often used on maps to indicate points of interest, services, and
attractions. These legends save space, locating and drawing attention to everything
from capital cities, roads, airports, marinas, and waterways to restaurants, museums,
roadside parks, points of interest, and campgrounds. When searching for the legend,
also take a look at the date the map was produced. The more recent the date, the more
accurate the map should be. Finally, you may find several maps using similar notations
grouped together in atlases.
Maps are important tools in geography, but there is more to geography than spin-
ning a globe and placing your finger on Tibet or locating the home of the Taj Mahal.
For tourism professionals, geography includes knowledge of the physical and human
characteristics that influence travel activities.
Information provided through three broad categories of geography—physical,
human (cultural), and regional—will enable you to learn more about locations around
the world and to provide others with that information without ever having to visit
those locations. Let’s look at how you might use some of these basic geographical con-
cepts in a variety of settings.

Lake 10 Jacksonville
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0 5 10 15 MILES 0 .5 1.0 1.5 MILES
FIGURE 1.8
Map scale. The four maps show Florida (upper left), south Florida (lower left), Miami (lower right), and
downtown Miami (upper right). The map of Florida (upper left) has a fractional scale of 1:10,000,000.
Expressed as a written statement, 1 inch on the map represents 10 million inches (about 158 miles)
on the ground. The bar line below the map displays the scale in a graphic form. Look what happens to
the scale on the other three maps. As the area covered gets smaller, the maps get more detailed, and
1 inch on the map represents smaller distances. Source: Rubenstein, James M. Cultural Landscapes:
An Introduction to Human Geography, 8th Ed., © 2005. Electronically reproduced by permission of Pearson
Education, Inc., Upper Saddle River, NJ.
Physical Geography
Knowledge of physical geography provides the means to identify and describe natural
features of the Earth, including landforms, water, vegetation, and climate. When these
natural features are combined, they create an environment that can either encourage
or discourage tourism activities. For example, during winter months in the Northern
Hemisphere, visitors might be attracted to snow-covered mountains for skiing or to

warm sun and sandy beaches for a break from the harsh realities of winter. As the
seasons change, these same physical attributes could deter tourism. As the snow melts
and mud appears, the mountains may lose their appeal. The same can be said for the
once-sunny beaches as the rainy season arrives.
Landforms and Vegetation

Landforms refer to the surface features of the Earth. Relief maps showing elevation
changes provide quick clues to the many different types of landforms that may be
encountered. Everything from continents and islands to mountains and valleys make
up our physical world. Mountain ranges, the most significant landforms, not only cre-
ate impediments to travel but also affect weather. As mountains stop moisture-bearing
winds, one side will be wet and the other dry.
Vegetation or the lack of it (based on rainfall) creates the mantle that covers land-
forms. Whether it is a barren desert landscape, deep-dark forest, verdant grassland, or
the stark reality of arctic tundra, the variations capture imaginations and attract visitors.
Water
Most of the world (over 70%) is covered by water, and most of this water is saltwater;
so it should come as no surprise that tourism professionals should know something
about oceans, seas, gulfs, lakes, and rivers. These bodies of water are the playgrounds
for today’s cruise lines and river barges, but they were once the primary corridors
of transportation. Because water transportation was the first means of moving large
numbers of people and cargoes, it is easy to see how cities formed as people congre-
gated around and along major bodies of water.
Even today, water, and especially water currents, can have dramatic impacts on
land temperatures and the amount of moisture that falls. Ocean currents rotate clock-
wise in the Northern Hemisphere but counterclockwise in the Southern Hemisphere.
Thus, the warm Atlantic currents of the Gulf Stream and the North Atlantic Drift keep
Ireland and England green almost year-round even though both are located far north of
the equator. Likewise, the cold waters of the Indian Ocean are still cool as they move
north up the west coast of Australia (the West Australia Current). Even large inland
bodies of water can significantly affect weather patterns. For example, the warmer tem-
peratures of the Great Lakes produce large amounts of snow in the winter as warmer
moisture from the lakes collides with the cold landmass. In addition to bodies of water,
levels of precipitation (see Figure 1.9) affect population densities and tourism activities.
Climate and Seasons

Meteorologists can fairly accurately predict short-term weather patterns. However,
travel and tourism professionals should be able to describe general weather patterns
for any location at any time of the year. Will it be rainy or snowy, sunny or cloudy,
humid or dry, hot or cold? Geography provides the answers to these important and
specific climatic questions.
Location, combined with season, will dictate long-term weather patterns. For
example, a Caribbean cruise would make sense in December but would be question-
able in September, the height of hurricane season. Likewise, an Alaskan cruise would
be enticing in August, but would be frosty if not an impossible nightmare in December.
Or, a trip to Southern China during the cool-dry season in November would be a plea-
sure rather than in July or August, the hot and humid season.
Seasons may change, but climates remain relatively constant. The world is divided into
five basic climatic zones, which are based on distance from the equator, 0° latitude. This
imaginary line splits the world into the Northern and Southern Hemispheres. The tropical

36
M01B_COOK1670_06_GE_C01.indd 36
80°
ARCTIC OCEAN
ARCTIC OCEAN
70° 70°
Arctic Circle
60° 60° 60°
50° 50° 50°
40° 40° 40° 40°
ATLANTIC PACIFIC
30° 30° 30° 30°

OCEAN OCEAN
Tropic of Cancer Tropic of Cancer
160°
20° 20° 20°
PACIFIC ARABIAN BAY OF
SEA BENGAL
OCEAN
10° 10° 10°
140° 130° 120° 110° 100° 90° Equator 40° 10° 0° 50° 60° 70° 80° 90° Equator 140°
0° 0°
INDIAN OCEAN
10° 10° 10° 10° 10°
ATLANTIC 120° 140° 150° 160° 170°
CORAL SEA
Inches Centimeters OCEAN
20° 20° 20° 20° 20° 20° 20°
Over 80 Over 200 Tropic of Capricorn Tropic of Capricorn
60–80 150–200
30° 30° 30° 30° 30° 30° 30°
40–60 100–150
20–40 50–100
40° 10–20 25–50 40° 40° 40° 40° 40° 40°
Under 10 Under 25
110° 120° 130° 140° 150° 160° 180°
50° 50° 50° 50° 50°
0 1,000 2,000 3,000 MILES
0 1,000 2,000 3,000 KILOMETERS

MODIFIED GOODE'S HOMOLOSINE EQUAL-AREA PROJECTION
FIGURE 1.9
World mean annual precipitation. Precipitation varies greatly from one part of the world to another. Moreover, there is considerable variability in precipitation from one year to the next.
Variability is usually greatest in areas of limited precipitation. Source: Clawson, David L., Fisher, James, Aryeetey-Attoh, Samuel A., Theide, Roger, Williams, Jack F., Johnson, Merrill L., Johnson,
Douglas L., Airriess, Christopher A., Jordan-Bychkov, Terry G., and Jordan, Bell. World Regional Geography: A Development Approach, 8th Ed., © 2004, pp. 36–37. Reprinted and Electronically repro-
duced by permission of Pearson Education, Inc., Upper Saddle River, NJ.
13/05/17 10:26 AM
The geography of the Greek Island, Santorini—caldera, calm Mediterranean water, and
mild weather—makes it a popular vacation destination. Photo by Cathy Hsu
regions extend to the Tropic of Cancer to the north and the Tropic of Capricorn to the
south. The north temperate climate extends from the Tropic of Cancer to the Arctic Cir-
cle, and the south temperate climate extends from the Tropic of Capricorn to the Antarc-
tic Circle. Above and below these lines are the North and South Polar zones.
In tropical zones, temperatures are mild, with little variation throughout the year.
In contrast, the temperate zones are noted for their four-season temperatures. Polar
zones are the exact opposite of the tropical zones, staying below 0°F most of the year.
In addition to the natural features, location and accessibility are key factors that
will influence the level of tourism activity. But geography is more than just landforms,
water, vegetation, and climate. It also includes people.
Human Geography
The exhilaration of experiencing other cultures is enjoyed by many through languages,
foods, beverages, products, arts, and crafts that are typical to particular locations.
Simply being in a different location and participating in daily activities can be an
adventure in itself. An understanding of human (cultural) geography provides specific
types of information that can enhance any tourism experience.
Human geography, which includes people and economic activities, creates the rest
of the picture that can be captured and explained through maps. Culture, as expressed
through language, religion, dress, foods and beverages, and other customs, plays a
critical role in the popularity of many tourism destinations. Other factors such as pol-
itics and economic conditions can also play an important role in the ease of travel,
especially across international boundaries. Governments can encourage or discourage
tourism through passport and visa requirements as well as through policies relating to
taxation or the ease of currency exchange.
For example, English is the most commonly spoken language in the industrialized
world, but it may not be spoken in some locations. In other locations, Chinese, French,
Spanish, Russian, Japanese, or a host of other languages may be common. Although

this might create a language barrier for some, it can create opportunities for others
who provide interpretation or tour services.
Human geography allows travelers to become aware of cultural norms and reli-
gious expectations so they do not commit social blunders. In some countries, it is com-
mon practice for businesses to close on certain days and times because of accepted
cultural norms or for religious reasons. For example, all commercial activity ceases in
many Middle Eastern countries during designated prayer times.
Regional Geography
The level of tourism interest and activity in a specific area often depends on a combination
of both physical and human geography that comes together, making certain locations more
attractive than others. It may be curiosity or a combination of natural as well as developed
features and attractions that meet visitor wants, needs, and expectations. Regional geog-
raphy is a useful framework for studying the physical and human geography of a specific
area or location, providing a convenient way to organize a wide variety of facts.
For example, locations near large population centers combined with access to
well-developed transportation systems generally create high levels of tourism activity.
Climate also influences the level and type of tourism activity. Factors such as time of year,
geographic location, and proximity to major bodies of water all contribute to demand.
This may explain why the most popular tourist destinations in Europe can be found
along the Mediterranean Sea and in Asia around the South China Sea. We can see a sim-
ilar pattern in the United States, as six of the top ten locations for domestic travelers are
located near major bodies of water: Arizona, Arkansas, California, Colorado, Florida,
Hawaii, Nevada, New York, Texas, and Washington, D.C. Similar patterns can be seen
all along the shores of Costa Del Sol in Spain and the Sunshine Coast in Australia.
Regions also play an important role in the development and promotion of tour-
ism activities. The Gold Coast in Australia, the Pearl River Delta in China, the Alps in
Europe, and the Rocky Mountains in North America form natural regions of tourism
activities that cross political boundaries. Smaller regions such as the wine-growing regions
of California, Washington, New York, France, Germany, Italy, and Spain also attract
a great deal of tourism activity and have become popular destinations. Other regions
TOURISM IN ACTION
GEOGRAPHIC INFORMATION SYSTEMS (GIS)
An enormous challenge to any business in the tourism industry is managing information. Who are the many
different guests of the business? Where do they come from? What do they have in common and how do their
needs differ? What time of year do they come and how long do they stay? What qualities and services do we have
or need to develop to fit visitor lifestyles? The questions are endless and so is the amount of data generated by
the answers. As introduced in this chapter, the ability to segment markets and serve them profitably is a critical
component to competing successfully in the global tourism industry. So how do you put all the data into clear,
easy-to-use information and put it into the hands of people to use it? One answer is to use a GIS for presentation
and spatial data analysis (information linked to geographic location).
A GIS is a set of computerized tools, including both hardware and software. GISs are used for collecting, stor-
ing, retrieving, transforming, and displaying spatial data. An easier way to think of GIS is as a marriage between
computerized mapping and database management systems. In other words, anything that can appear on a map
can be fed into a computer and then compared to anything on any other map, and everything on any map can have
layers of data and information attached. GIS is a powerful technology and its potential uses are endless. GISs are
now being used to locate park and recreational facilities, to generate site specific economic and environmental
impact information on tourism activities, and to track tourist movement so as to evaluate and optimize tourist flow
and refine tourism product offerings.

may be defined by specific boundaries such as the Valley of the Kings in Egypt, the Lake
District in England, Canada’s Capital Region, Chicagoland, and the French Riviera.
Geography provides a foundation to help us understand why people visit or fail
to visit certain areas, but we also need to learn how to meet their needs efficiently
and effectively as they travel. The three primary interrelated business functions—
marketing, management, and finance—add the structure to our foundation, providing
many of the tools necessary to plan and meet current and future needs of travelers.
Let’s look at how these business functions work together in the tourism industry.
Studying Tourism from Business Perspectives

First, marketing concepts provide insights into why people travel as well as possible
approaches to meeting their needs as they travel. Second, management concepts pro-
vide insights into the processes needed to meet societies’ and visitors’ current and future
demands. Third, financial concepts provide the tools needed to understand, design,
and supply profitable levels of visitor services. By combining knowledge from each of
these perspectives, a basic understanding of tourism fundamentals can be developed.
Marketing
Studying tourism from the marketing approach provides valuable insight into the
process by which tourism organizations create and individual visitors obtain desired
goods and services. Everyone who has either worked in or used tourism-related ser-
vices knows that customers (visitors and guests) can be very demanding. The more
you know about these travelers and how to meet their needs, the more successful you
will be as a hospitality and tourism professional. In fact, individuals and organiza-
tions who attempt to understand and meet the needs of these visitors successfully are
practicing what is called the marketing concept, an organizational philosophy centered
around understanding and meeting the needs of customers.
Marketing theorists have coined a variety of phrases to describe the philosophy of
an organization.20 The “production orientation” organization views its mission to pro-
duce its product most efficiently and customers will simply arrive to purchase whatever
is produced. In a noncompetitive, high-demand environment, this orientation works.
Consider the gasoline industry. A second philosophy is the “sales orientation.” Under
this philosophy, an enterprise produces its product but it needs an effective (even pushy)
sales force to encourage customers to buy all of the organization’s production. This phi-
losophy is frequently exhibited at large city hotels. The hotels have an inventory they
need to “move,” and it is the role of their sales staff to fill those beds each night and
bring in those conventions and wedding receptions to fill those ballrooms!
Notice that neither of these orientations focuses on the needs or wants of the cus-
tomer: The focus is on the “need” of the organization to produce and sell. A third
philosophy, the heart of marketing, places the customer at the core of a firm’s pro-
duction or service delivery purchase. This newer philosophy is called the “consumer
orientation” and requires that organizations determine what customers really want
and need in a product or service so that a firm’s offerings closely fit what is wanted by
consumers, and therefore selling the firm’s offerings becomes much easier.
Meeting visitor needs relies on a complex set of tools and techniques that is
referred to as the marketing mix. The marketing mix consists of four variables that
are often called the four Ps of marketing: product, price, place, and promotion. Prod-
uct refers to the good or service that is being offered. Price is the value of the good or
service. This value is the amount of money that will be paid as well as the time “given
up” to obtain the good or service. Place includes the location and the activities that are
required to make the good or service available to the visitor. Finally, promotion refers

Communications with tourists can take various creative means. Photo by Cathy Hsu
to all of the activities that are undertaken to communicate the availability and benefits
of a particular good or service. Just think about yourself or someone else who is travel-
ing to another city to attend a concert. How can each of the variables in the marketing
mix come together to make that trip a memorable experience?
Although tourists, as a whole, are a very diverse group, they can be divided
into subgroups or market segments. Market segmentation allows an organization to
develop the most appropriate marketing mix to meet the needs of specifically targeted
visitor segments effectively and efficiently. For example, would a young college student
want the same types of experiences at Disney World as a family would want?
Each market segment contains individuals who share many of the same characteristics
and common needs. For example, businesspeople may need to get to their destinations as
quickly as possible, whereas the summer vacationers may want to take the most leisurely
and scenic route. Young college students may need to locate inexpensive accommodations
at their destinations, whereas conventioneers may need to stay at the hotel that is hosting
the convention, regardless of price. Some visitors may be seeking a variety of entertaining
outdoor activities, whereas other visitors are interested in shows and shopping. This list of
examples could go on, but the point should be clear: As organizations plan to meet these
differing needs, they can no longer afford to try to serve the needs of all visitors. They sim-
ply do not have the resources to reach everyone and meet their diverse needs successfully.
You will learn more about the importance of marketing and its role in meeting tour-
ists’ needs in the following chapters. As we explore the many facets of the tourism indus-
try, think about yourself as well as other specific groups of visitors who are being served
and how these targeted individuals shape marketing as well as management decisions.
Management
Management furnishes additional tools and techniques to serve visitor needs suc-
cessfully. Management, just like marketing, is essential to the continued success of

all organizations, both public and private. The study of management provides a uni-
fied approach to planning, organizing, directing, and controlling present and future
actions to accomplish organizational goals. As our model depicts, economic, political,
environmental, sociocultural, and technological forces affect all tourism organizations
and play a key role in the development of strategic plans.21 Managers need to under-
stand each of these forces and how they will impact decisions as they plan for the future.
Basically, management is the common thread that holds any organization or activ-
ity together and keeps everyone moving in the same direction. For example, managers
working for the Forest Service must decide how many people can comfortably use a
campsite and when and where new campsites should be built. Government planners
and administrators must make decisions about the desirability and necessity of new
or expanded highways, airports, and shopping facilities. Restaurant managers must
decide how many employees are needed to provide high-quality service and, at the
same time, make a fair profit. Resort managers must decide whether or not to expand
and what level of service to offer. Think back to that trip you were asked to plan ear-
lier in the chapter, and you will begin to see how all of the management functions must
fit together to have a successful experience.
The process might go something like this. After you mentioned the possibility of
renting a cottage at the beach to enjoy some sun, surf, and sand, several of your friends
asked if they could go with you. The first management function used in putting this
trip together is planning: where to go, how to get there, and how many will go. Once
these decisions are made, the next function used is organizing. You are using the orga-
nizing function when you assign someone to search the Web for more information and
decide who will make reservations, who will buy food and refreshments, and who will
call everyone to make sure each person shows up on time on the day of departure.
The next logical step you would use in putting together your trip would be the
directing function. You are directing as you answer questions and coordinate all of
your planned activities. Finally, you will use the controlling function. You are con-
trolling as you check maps, directions, itineraries, and reservations to ensure the
success of your trip. Although the activities may be more complex, managers in all
tourism-related activities are constantly going through the same types of processes.
Finance
Studying tourism from a financial approach provides a basic understanding of how
organizations manage revenues and expenses. To continue operating and providing
services, tourism organizations must strive to generate revenues in excess of expenses
or effectively and efficiently use the financial resources they have been allocated. Even
nonprofit and government organizations are being called on to generate more of their
own funding and to gain better control of their expenses.
By definition, a business is an organization operated with the objective of making
a profit from the sale of goods and services. Profits are revenues in excess of expenses.
They are used as a common yardstick to represent financial performance and are the
ultimate measure of financial success. However, some tourism organizations such as
governmental agencies, museums, visitors and convention bureaus, and hotels asso-
ciations may be classified as nonprofit. Even though they may not technically operate
with a profit motive, most still strive to generate revenues in excess of expenses. For
simplicity, we will use the generic term business in our discussion of financial concepts.
To use and communicate financial information, a common language must be spo-
ken. That language is known as accounting, which is often called the “language of
business.” Accounting is an activity designed to accumulate, measure, and commu-
nicate financial information to various decision makers, such as investors, creditors,
managers, and front-line employees. One of the purposes of accounting information
is to provide data needed to make informed decisions. There are two main categories

of financial reports: internal and external. Internal financial reports are used by those
who direct the day-to-day operations of a business. External financial reports are used
by individuals and organizations that have an economic interest in the business but are
not part of its management.
Three basic building blocks are used to measure financial success:
1. Margin (the amount of each sales dollar remaining after operating expenses
have been deducted)
2. Turnover (the number of times each dollar of operating assets has been used
to produce a dollar of sales)
3. Leverage (the extent to which borrowed funds are being used)
When these three components are multiplied together, they equal return on invest-
ment (ROI), which measures profit. The ability to operate profitably is critical to tour-
ism organizations because they are typically faced with low margins, high turnover, and
the need to use leverage (other people’s money). As can be seen in Figure 1.10, man-
aging these three components is a delicate balancing act, and tourism is an industry in
which every nickel counts and profits depend on recognizing the importance of pennies.
Since margins are so low for most tourism service providers, many segments of
the industry are adding convenience charges on to their service offerings to improve
profitability—for example, airlines charge for food, entertainment, and specific seat
reservations; hotels charge for early check-outs on reservations, spa and gym access;
cruise lines charge for specialty restaurants on-board; car rental companies charge for
GPS navigation systems; and restaurants charge for premium seating locations. As
tourism service providers search for profitability, these lists will only continue to grow.
Let’s look at some practical examples of how these building blocks for financial success
might work in specific segments of the tourism industry. In its simplest form, margin (50¢
or 5¢ for each dollar in revenue) for a food-service operator serving a hamburger and fries
would be the sales price ($10.00) minus the cost of preparation, ingredients, and service
($9.50). Keep in mind that out of that 50¢ margin, businesses must still pay taxes to local
and national governments. Airlines would measure turnover by the number of times a seat
FIGURE 1.10 Turnover

The art of finance. Finance is a matter of
balancing margin, turnover, and leverage.
Covers
Seats
High Low
margin Room margin
Passenger
nights
s
miles
or
sit
Vi
Leverage:
"other people's money"

FYI HOSPITALITY
The Japanese word omotenashi, which Japanese culture. For example, white hot It is all part of providing an outstanding
translates as the spirit of selfless hospi- or cold towels are offered to customers, service, where tipping in Japan is consid-
tality, is considered as a cornerstone of depending on the season, in restaurants. ered rude and may even cause offense.
was sold during a 24-hour period. Leverage is an indication of how much money has been
borrowed or invested in a business. For example, a ski resort wanting to add a new gondola
might go to a bank or investor to get the money needed for this expansion. We will explore
the importance of finance in later chapters as we examine specific industry segments.
Remember the analogy of the elephant? Financial information is much like the
elephant’s nervous system. Just as the elephant’s nervous system allows it to respond
to its environment, an organization’s financial information system allows it to read its
environment and move in the direction of profitable operations.
Basic knowledge of geography, marketing, management, and finance concepts
will provide many of the tools needed for your future success in the tourism industry.
However, the importance and practice of hospitality must be added to these basic con-
cepts. To make a profit, managers must use their marketing and management skills to
extend hospitality and high-quality service that meet guests’ needs. We will explore the
importance of providing hospitality and delivering service quality in Chapter 3.
Tourism’s Challenges and Opportunities

Meeting the needs of travelers by providing tourism-related goods and services has
proven to be an attractive form of economic development. Attempts to encourage the
development and growth of tourism activities are often desirable because tourism cre-
ates jobs and brings money into a community or country. However, unplanned tour-
ism growth can lead to problems.
Although tourism can create greater cultural understanding and enhance economic
opportunities, it may also change social structures; may place increasing demands on
transportation systems, public services, and utilities; and may lead to environmental deg-
radation. Whether we are participants in or beneficiaries of (both positive and negative)
tourism activities, we are all in one way or another affected by tourism. However, there
is still a lack of understanding by the public of the impact of tourism on environment.22
Pause for a moment and consider the following examples of how tourism might
affect our lives and communities. For example, tourism could create needed jobs for
residents and increase business for local merchants in a small coastal town seeking eco-
nomic security. However, as that town grows into a more popular destination, it can
become overcrowded, and the original residents who sought increased tourism expendi-
tures may be driven out because of increased housing costs, higher taxes, and/or chang-
ing business demands. Tourism can generate needed funds to improve the lives of an
isolated native tribe in the rain forests of South America. Yet, it can also forever change
the lives of these peoples as they are exposed to the cultures and habits of the tourists
who come seeking what they consider to be the ultimate travel experience.
The future of tourism provides many challenges and opportunities as well as many
unanswered questions:
• Can tourism growth and development continue without creating environmental
problems?
• How will advances in technology change tourism experiences and how tourists
and service providers deal with each other?

• Will the expansion of the use of technology by tourism suppliers lead to a “low-
touch” service that is less appealing to guests?
• As tourism service activities continue to grow, will an adequate workforce with
the necessary skills be available?
• Will tourism change the social structure of countries and communities when they
experience increased tourism activities?
• Will the threat of terrorism continue and spread around the globe, decreasing
potential travelers’ sense of security and thus decreasing the level of international
travel?
These are only a few of the questions that may arise as plans are made to respond
to the demands of tourism growth. Information presented throughout this book will
provide you with the fundamental knowledge necessary to begin forming your own
opinions and possible answers to many of the questions and issues that you will face as
decision makers of tomorrow.
As you search for answers to the future of tourism, let your thoughts and actions
be guided by ethical principles. Although most people can easily distinguish between
right and wrong based on their own personal experiences, they are often faced with
decisions where it is difficult to make these clear distinctions. In an effort to promote
ethical behavior, organizations often publish codes of ethics to help guide individuals
in their daily activities and decisions.
Even without the help of a code of ethics, there are some very simple questions
you can ask yourself about any situation or problem to identify ethical and unethical
behavior:
• Will someone be hurt in this situation?
• Is anyone being coerced, manipulated, or deceived?
• Is there anything illegal about the situation?
• Does the situation feel wrong to you?
TOURISM IN ACTION
WORLD TOURISM ORGANIZATION
The World Tourism Organization (UNWTO), an agency of the United Nations, serves the world as a global source
of tourism information and skill development. Headquartered in Madrid, Spain, the UNWTO boasts 144 member
countries and over 300 affiliate members from the private sector and other tourism organizations. Begun in 1925,
the UNWTO, through its various programs and committees, aids countries in developing tourism and its benefits.
For example, the UNWTO was instrumental in the Silk Road Project aimed at revitalizing the ancient highway
through Asia. The UNWTO’s Business Council works hand-in-hand with private-sector members to strengthen
public–private sustainable tourism efforts. The UNWTO also is a major publisher of important tourism resources,
offering more than 250 titles in four official languages.
A critically important role of the UNWTO is its collection of global tourism statistics. Its international standards
for tourism measurement and reporting provide a common language that allows destinations to compare tourism
revenues and other data with those of competitors. The UNWTO is recognized as the world’s most comprehensive
source of tourism statistics and forecasts. In 2000, the United Nations approved the UNWTO’s Tourism Satellite
Account methodology. This method helps ensure the measurement of the tourism industry’s true economic con-
tribution in terms of gross domestic product, employment, and capital investment.
To learn more about the UNWTO and its structure and activities, visit its website at http://www.unwto.org.

• Is someone else telling you that there is an ethical problem?

• Would you be ashamed to tell your best friend, your spouse, or your parents about
your contemplated actions or your involvement?
• Do the outcomes, on balance, appear to be positive or negative?
• Do you or others have the right or duty to act in this situation?
• Is there a chance that you are denying or avoiding some serious aspect of the
situation?23
Finally and possibly the simplest, yet most thorough, ethical guideline is the
Golden Rule: Do unto others as you would have them do unto you. Keep these guide-
lines in mind as you analyze and respond to the “You Decide” challenge found at the
end of each chapter.
Where Do You Fit in?

The prospects for the future of the tourism industry and employment in this industry
are bright. Projections from the UNWTO indicate that tourism will remain the world’s
largest “industry” through the year 2020 with travel and tourism sales growing at the
rate of 4.1% a year. Employment opportunities in countries such as Australia, Brazil,
China, and the United States appear to be especially positive.
Realizing the significant role tourism plays in everyone’s future, we should all
attempt to understand how it functions. Only through understanding the participants
and forces shaping the tourism industry can we meet the expectations and desires of
society. Tourism offers a world of opportunities for you to become involved as either a
visitor or service supplier. Just like Richard, whom you met in the chapter opener, you
never know where a career in tourism may find you in the future.
Topics Covered in Each Chapter

The text, like our tourism model, is organized around meeting the needs of travelers
who are discussed in detail in Chapter 2. In Chapter 3, you will learn more about
travelers and how tourism suppliers identify and deliver quality services. Each of the
fundamental participants and forces shaping tourism can be explored through the
information presented in the remaining chapters.
Chapter 4 takes an in-depth look at the multifaceted distribution systems and sales
functions that link travelers and tourism suppliers. Chapter 5 explores how technology
has shaped and continues to change every aspect of the tourism industry. Chapters 6
through 10 focus on the marketing, management, and financial issues facing primary
groups of tourism service suppliers—transportation, accommodations, food and bever-
age services, attractions and entertainment, and destinations, respectively. Throughout
these chapters, we highlight the importance of maintaining a motivating environment
that supports high-quality service.
Chapters 11 and 12 explore the forces that shape the current and future oper-
ating environment for every person and organization that is found in the tourism
model. These forces include economic, political, environmental, and social/cultural
issues. Chapter 13 is devoted to exploring how we can maintain tourism’s benefits.
Chapter 14 takes a glimpse into the future of tourism. Finally, selected readings
have been included at the end of each major section of the book to complement
and expand the information provided in the chapters. Integrative cases at the end

of each major section give you an opportunity to apply your knowledge to real-
world situations.
Questions and exercises at the end of each chapter will allow you to check your
knowledge and apply the concepts you have learned. You will also have an opportu-
nity to think about some of the challenges and ethical issues facing participants in the
tourism industry. We sincerely hope that you enjoy the journey as you study all this
multifaceted industry has to offer!
Summary
The study of tourism will introduce you to one of the larg- development and interdependence of the participants and
est and fastest-growing industries in the world. As shown forces shaping the tourism industry. Based on this foun-
in our model, tourism is a multifaceted service industry dation, and recognizing the importance of geography to
that has a rich history and exciting future marked by many travel and tourism, we will explore all of the components
challenging opportunities. The career opportunities created of the industry on an individual basis and in an economic,
from serving the needs of travelers are almost limitless. political, environmental, and social context.
Our journey into the study of tourism began with a As you learn the concepts and terminology of tour-
brief look back in history. History provides many import- ism, you will gain an appreciation for how the industry
ant lessons that help explain the growth and significance of has developed and you will be equipped to gain more from
travel in world economies. In fact, the lessons to be learned your travel experiences or understand and meet the needs
from history can still be used to help plan for and serve the of others as they travel. Finally, if you decide to become a
needs of travelers today and in the future. Travel continues member of this industry, by practicing the art of hospitality,
to be influenced by factors such as time, money, mobility, you can use all of your knowledge and skills to meet and
and a relative sense of safety. exceed visitor expectations. As you explore the world of
A business focus centered on marketing, management, tourism throughout this book, you will be introduced to the
and finance will be used as a foundation for examining the concepts and issues facing tourism today and in the future.
You Decide
The idea of traveling for education and experience reached benefits from travel, but their travel impacts are very
its pinnacle in the Grand Tour Era. During that time, different. Whereas Grand Tour participants traveled to
travel to locations such as Paris, Rome, and Venice was cities to study, explore, and experience the arts, today’s
considered to be the ultimate travel experience. Today’s adventure travelers visit remote areas and cultures, seeking
equivalent of the Grand Tour participants, the adventure new experiences while generating new income sources
travelers, may not have the time or money for extended for the native population. As they popularize these dif-
trips but still seeks the same educational experiences. ferent locations, roads, utilities, buildings, and other
Although the adventure travelers may travel to some of environment-altering activities follow.
the same destinations that were popular on the Grand Tour, Think for a moment about the impacts Grand Tour
these destinations are not new or exotic. Today’s adventure participants had on the areas they visited while traveling
travelers seeking new and exotic destinations may be found throughout Europe. Are the impacts adventure travelers
trekking through Nepal, viewing wildlife on the Galápagos have on today’s destinations the same? From an ethical
Islands, or braving the elements in Antarctica. perspective, should tourism activities be encouraged every-
The original Grand Tour participants and today’s where?
adventure travelers may have been seeking the same
Net Tour
To get you started exploring the world of tourism, enter www.mapquest.com
the terms tourism and travel, history of travel and tour- travel.state.gov
ism, and/or travel and tourism geography into your favor- google.com/earth
ite search engine, or use the specific links provided here to
www.pata.org
learn more.
en.cnta.gov.cn
www.wttc.travel
www.destinationmarketing.org
www.unwto.org
www.ustravel.org

Discussion Questions
1. Why should we study tourism? 5. Why should we study travel and tourism from a mar-
2. History has taught us that people travel and engage keting approach?
in tourism activities in increasing numbers when sev- 6. Why should we study travel and tourism from a man-
eral basic conditions can be met. Identify and describe agement approach?
these conditions and why they help facilitate travel and 7. Why should we study travel and tourism from a finan-
tourism activities. cial approach?
3. What is geography? 8. What are some of the future opportunities and chal-
4. How do physical, human (cultural), and regional geog- lenges facing the tourism industry?
raphy influence tourism activities?
Applying the Concepts

1. Perform an Internet search in order to investigate the 4. Go to the reference section at your local library and
varying definitions of the term “tourism.” Note the look at the different types of maps that are available.
differences in their descriptions. List those things that After selecting or being assigned a nation, state, or
are common in their descriptions as well as some of the province, make two lists of geographic features: (a)
distinct differences. physical and (b) human (cultural). Your lists should
2. France is one of the world’s most popular destinations. provide an overview of significant information that
Why do you think people are attracted to France as a would be of use to someone traveling to the destina-
tourist destination? tion you are describing.
3. Based on your knowledge of the factors and condi- 5. Use your favorite search engine to find three sources of
tions that encourage tourism, which new and emerg- maps. Prepare a list including Web addresses showing
ing country travel destinations will be a “must visit” in the types of maps available and the information con-
the next 5 years? Conduct an online search to support tained on these maps.
your analysis. Be ready to justify your answer.
Glossary
Accounting A service activity of business designed to resources to achieve organizational objectives efficiently
accumulate, measure, and communicate financial infor- and effectively.
mation to various decision makers. Marketing concept An overall organizational philosophy
Business An organization operated with the objective of that is focused on understanding and meeting the needs
making a profit from the sale of goods and services. of customers.
Cartography The science or art of making maps and Marketing mix Those things that an organization can do
interpreting mapped patterns of physical and human to influence the demand for its goods or services. It con-
geography. sists of four variables, often called the four Ps of mar-
Convenience charges Additional charges added to basic keting: product, price, place, and promotion.
services that are designed to increase profitability. Mass tourism Twentieth-century phenomenon whereby
Feudal system A system of political organization, prevail- the working and middle classes began traveling in large
ing in Europe from the 9th to about the 15th century, in numbers for leisure purposes.
which ownership of all land was vested in kings or queens. Model A simple representation showing how important
Host community A town or a city that welcome visitors features of a system fit together.
and provide them with desired services. Physical geography The natural features of our planet,
Human (cultural) geography The human activities that including such things as climate, land masses, bodies of
shape the face of a location and shared experiences, water, and resources.
including the cultural aspects of language, religion, and Professional travel Travel by individuals to attend meet-
political and social structures. ings and conventions.
Leisure travel Travel for personal interest and enjoyment. Profits Revenues in excess of expenses representing the
Management The distinct processes of planning, orga- financial performance and the ultimate measure of the
nizing, directing, and controlling people and other financial success of a business.

Regional geography The components of geography that Tourism The temporary movement of people to destina-
focus on regional landscapes, cultures, economies, and tions outside their normal places of work and residence,
political and social systems. the activities undertaken during their stay in those desti-
Return on investment (ROI) A measure of management’s nations, and the facilities created to cater to their needs.
efficiency, showing the return on all of an organiza- Tourism Satellite Accounts Methodological framework
tion’s assets. that uses common classifications and definitions to mea-
Services The performance of actions or efforts on behalf sure economic impacts of tourism on a national basis.
of another. VFR Visits to friends and relatives.
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UNWTO, 1. 20. Burns, A. C., and Bush, R. F. (2010). Marketing
8. U.S. Travel Association. (2015). U.S. travel answer Research (6th ed.). Upper Saddle River, NJ: Pearson/
sheet. Retrieved https://www.ustravel.org/answer- Prentice Hall.
sheet. 21. Hsu, C. H. C., Killion, L., Brown, G., Gross, M.
9. Baranowski, S. (2007, March). Common ground: J., and Huang, S. (2008). Tourism Marketing: An
Linking transport and tourism history. Journal of Asia-Pacific Perspective. Milton, Australia: John
Transport History, 28(1), 120–243. Wiley & Sons Australia.
10. Outbound tourism market becomes spotlight of 22. Miller, G., Rathouse, K., Scarles, C., Holmes,
industry. (Retrieved 2004, July 20). Xinhua (China). K., and Tribe, J. (2010), Public understanding of
Available at: http://www.xinhua.org. sustainable tourism. Annals of Tourism Research,
11. O’Brien, A. (2012). Wasting a good crisis develop- 37(3), 627–645.
mental failure and Irish tourism since 2008. Annals 23. (1992). Code of ethics: Hospitality service and
of Tourism Research, 39(2), 1138–1155. tourism industry. In Stephen S. J. Hall, ed., Ethics
12. Tourism 2020 vision. (2008). Available at: http:// in Hospitality Management. East Lansing, MI:
www.unwto.org/facts/eng/vision.htm. Education Institute of the American Hotel and
Motel Association.
13. Ward, S. (October 10, 2011). The virtues of travel-
ing light. Barrons, XCI(41), 25, 27.

CHAPTER 2
Marketing to the Traveling Public
I have wandered all my life, and I also traveled; the difference between the two being
this, that we wander for distraction, but we travel for fulfillment.
—Hilaire Belloc
LEARNING OBJECTIVES
1. Explain the importance of segmenting the tour- 5. Discuss the importance of business and profes-
ism market. sional, incentive, SMERF, mature, and special-
2. Identify the four major models of tourist motivations. interest travelers.
3. List and describe the steps involved in segment- 6. Describe how information gained from segment-
ing a market. ing the tourism market can be used to target and
meet the wants, needs, and expectations of the
4. Describe the major approaches that are used to
traveling public.
segment the tourism market.
CHAPTER OUTLINE
A Ride with a Difference! Specialized Tourist Segments
Introduction Business and Professional Travelers
Incentive Travelers
Decisions, Decisions, Decisions SMERFs
Information Seeking Mature Travelers
It’s All in the Details Special-Interest Travelers
Foundations for Understanding Tourist Delivering High-Quality Service
Motivations
Push and Pull Motivations Summary
Maslow’s Hierarchy of Needs You Decide
The Travel Career Patterns Net Tour
The Psychocentric–Allocentric Model
Segmenting the Tourism Market
Geographic Segmentation Applying the Concepts
Demographic Segmentation Glossary
Psychographic Segmentation References
Product-Related Segmentation
Putting Segmentation Knowledge to Work
49
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A Ride with a Difference!

“Let’s start our own Segway city tour business!” When Peter mentioned the idea to
Jochen, they both laughed. Sure, they had worked as tourist guides in their home town
of Frankfurt am Main in Germany during summer breaks, but what did they really
know about starting and running a business? As they sipped their coffee, admiring the
view of a boat cruising down the Main River, they began to talk about the possibilities.
It had all started on a summer vacation. Like many young people, they had bought an
Interrail Pass that provided unlimited rail travel in 30 European countries. They had visited
many European city destinations and this is when they discovered the experience of visit-
ing the sights on a guided Segway tour. They had used the two-wheeled electric vehicles in
Paris, Madrid, and Milan. It wasn’t only a fun way to travel around the city but was also a
quicker way to get to see the sights. The guided tour provided an entertaining alternative to
discovering more about the city attractions. It seemed more real than reading a guide book.
During this trip, they struck up a conversation with Pierre, the owner of a Segway city tour
business in Paris. Pierre mentioned that although it wasn’t easy to begin with, business was
busy during the summer months and he was planning to expand his business. Was it really
possible to make money by offering guided Segway tours in Frankfurt?
During the spring break, they decided to find out more about the business oppor-
tunities of starting a Segway city tour business in Frankfurt. An Internet search revealed
that Frankfurt was indeed a popular stopover destination—5.1 million visitors, which
included 2.2 million international visitors, spent one night or more in Frankfurt in
2015 (Frankfurt Tourismus, 2016). The air of optimism was soon subdued. Peter and
Jochen realized that they were not the only people who had come up with the idea of
offering Segway city tours in Frankfurt. A Google search revealed that an increasing
number of Segway tours were now available. Despite the competition, Peter and Jochen
were convinced that they could still provide a distinctive service offering. Peter’s grand-
mother agreed to lend them enough money to purchase 10 Segways, and two of their
college professors helped them to develop a business plan. Pierre even offered them
some words of advice and encouragement as they prepared to launch their business.
After graduation, Peter and Jochen were ready to put their knowledge and experience
to work. After securing the necessary paperwork, they were ready to launch their business,
A Ride with a Difference! They distributed flyers in many of the city’s hotels and developed
a strong social media presence. Frankfurt was not only known as a banking metropole but
also the city of Goethe. Their Goethe-themed tour was particularly successful, and they
managed to gain a five star rating on a popular travel website. June was a great month,
but July and August were even better! In fact, business was so good and they were so busy,
they almost didn’t notice a story posted online announcing the launch of another Segway
city tour company offering similar themed tours, including a city tour of Goethe.
When the summer season was over, Peter and Jochen counted their profits, dis-
cussed their successes and mistakes, and began to think about the future. What would
the new competition mean for them? There had been plenty of customers during the
summer, but what about the next 6, 12, and 18 months? Would there be enough busi-
ness for all of the Segway tour companies in Frankfurt? Who were their customers?
Where did they come from? How did they find about A Ride with a Difference!? Would
they tell others about their experiences?
To continue their success and prosper with new competition on the horizon, they
needed to know more about marketing and customer service. As they thought about
the future, they realized that many of the lessons they had learned about business in
their college courses would be useful.
Introduction
In Chapter 1, we presented a model highlighting the scope and complexity of the tour-
ism industry. Referring back to this model, notice that the center is the focal point and
primary reason for all tourism activities: travelers. In this chapter, we will learn more
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Chapter 2 ▸ Marketing to the Traveling Public 51
The ancient Roman ruins attract a wide variety of tourists. Photo by Cathy Hsu
about these travelers (tourists) and how we can plan to meet their wants and needs
successfully. Take a minute to look around and notice all the different types of people
at your college or university. The diversity of this group may be similar in many ways
to the diversity of guests being served in the tourism industry. Because these tourists
are at the heart of the industry, we need to know more about who they are, why they
travel, and what they expect during their travels.
Any number of activities, including seeking the assistance of a travel agent, flying
to another city, or walking through the gates of a theme park, change a person into an
active participant using tourism services. As consumers of these tourism services, we
have sometimes similar, as well as different, needs. In response to the tasks of under-
standing consumers, their needs, and the actions they take to satisfy these needs, a
whole branch of marketing, consumer behavior, has developed.
Consumer behavior is the study of consumer characteristics and the processes involved
when individuals or groups select, purchase, and use goods and services to satisfy wants
and needs. How we behave as consumers is determined by a variety of interpersonal influ-
ences (e.g., we learn how to make shopping decisions from our parents) and by our indi-
vidual characteristics (gender, age, personality, etc.). Consumers are likely to return and
continue to use goods and services as long as their needs are met. Consequently, we need
to learn more about who these consumers are and what they need and want.
Decisions, Decisions, Decisions

Think of the number and variety of decisions that go into a vacation. First, you have to
decide in a general way that you want to spend a period of time away from your home
area. That time period may run the gamut from a quick overnight escape to a full year’s
travel to “find yourself.” You then have to consider where you might want to go, your
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destination. Will you travel to a single destination, such as Ogunquit, Maine, and stay
put for a relaxing long weekend, or will you travel continuously during your vacation
using a multi-destination itinerary? Will you rely on a travel professional to help in
your planning, or will you do all the “legwork” yourself? Will you make lodging res-
ervations and buy attraction tickets in advance, or will you simply wing it? Will you
stick to your original plans and choices, or will you make modifications as your trip
progresses? As you read this section, look at Figure 2.1 to aid your understanding. For
leisure travelers, this thought process occurs in four stages and is often referred to as
the dreaming (first decision), researching (second and third decisions), booking (fourth
decision), experiencing (fifth decision), and then finally the sharing cycle. Social media
made this process even more personal for many travelers as it creates the opportunity
to share experiences real-time.
First Decision Set: The Decision to Take a Trip. (Decisions to make prior to “trip commitment.”)
Do I have the time, money, health, and interest to take a trip?
How much time, money, and effort do I want to devote to this potential trip?
Who will go with me and therefore need to be consulted in at least some of my decisions?
Do I want to gather the information myself or do I want to utilize the expertise of others, such as
a travel agent or tour operator?
Second Decision: The Destination Decision (general)

In general, where do I/we want to go?
In general, what do I/we want to do on the trip?
Given my/our time frame, what destinations are within the allowed travel time?
Third Decision: The Destination Commitment Decision. (This decision involves a choice that is
not easily changed.)
Which of the destinations that are most appealing to me/us will I/we choose?
Fourth Decision: Trip Preparation Decisions. (Post-Trip Commitment Decisions.)

What specific day will I/we leave for the trip? How long will I/we stay in one place?
Will I/we travel within a larger destination area (multi-destinations), or will I/we stay in one
place for the duration of the trip?
What transportation mode will I/we use to get to the destination area?
What components of the trip will I/we pay for or reserve in advance?
Should I/we buy travel insurance in case of unforeseen circumstances necessitating canceling
the trip or in case of disaster on the trip?
Fifth Decision Set: During-Trip Decisions.

How will I/we get around the destination area? What routes will I/we take within the area?
If not arranged in advance of arrival, what specific accommodations will I/we use each night?
Where will I/we eat?
What activities and attractions will I/we participate in or attend?
FIGURE 2.1
The travel decision-making process.
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The previous paragraph hints at the endless number of decisions leisure travelers
need to make. How and when do travelers make decisions? How much information do
they gather prior to selecting their choice? The depth of information search conducted
and the timing of that information gathering are of substantial importance to tourism
suppliers. They want to provide the information that tourists desire at the time they most
desire it. Consumer research has proven that we will most notice and remember advertis-
ing messages and other forms of information when we are actively seeking information
to make a certain decision. This information receptive mode is called selective attention.1
Information Seeking
When we are in the midst of making a decision regarding a trip, we have a variety of
information sources available. First, we have our own memory, including our existing
base of knowledge and experiences. This form of memory reliance is called internal infor-
mation search. Imagine Kurt and Sharon who are thinking about going on a weeklong
family vacation. They recall the terrific time their kids had at that great Recreational Vehi-
cle resort at Lake George in upstate New York and simply decide to make that trip again.
Frequently, we feel the need to gather additional information; this is termed exter-
nal information search. These external sources are grouped into two types, personal
sources and nonpersonal sources. Personal sources are individuals who provide us with
information. A friend who recommends a rafting company that offers Colorado River
trips through the Grand Canyon would be an example of a noncommercial personal
source. Your trusted travel agent who helps you decide which cruise best fits the true
you is an example of a commercial personal source. And, finally, the front desk clerk
who suggests a fun nightspot where locals party is also a personal source of information.
Nonpersonal sources of information are all other forms of information available
to you, from travel magazine ads to resort brochures to billboards along your trip
route. Tourism suppliers can control to a large extent the information in nonpersonal
sources, such as websites and pop-up ads. Messaging that is controlled by the supplier
is called induced information. Travelers may also gather information from organic
sources that are not controlled by the tourism supplier.2 Examples of organic sources
include travel guides, blogs, and travel review sites such as tripadvisor.com. However,
one form of tourism information often consulted by long-trip-duration travelers are
published travel guidebooks, which frequently include opinions and impressions from
the authors/editors. Travel guides such as Frommer’s and Lonely Planet are viewed as
neutral sources of information because the author is usually not being compensated to
make the recommendations included in the guide. Many travelers are also turning to
blogs and review sites, which may or may not contain reliable and unbiased informa-
tion. While many organic sites began with the intent to provide neutral information
from user-generated content, consider the fact that there are also opportunities to post
induced information on organic sources that can mislead travelers. We will explore the
impact of blogs and user-generated content on the tourism industry when we turn our
attention to technology issues in Chapter 5.
Although business and professional travelers will have a set plan and reservations
for almost all components of their trips, leisure travelers have a full range of planning
options. As suggested earlier, after deciding to travel, the next decision a traveler faces
is where to go. And with the endless possibilities out there, that is often not a simple
choice. Leisure travelers often spend hour upon hour gathering information about var-
ious destinations to find the one that most tickles their fancy. The conclusion to the
destination decision may be very specific—“I’m going to Disney World!”—or it may
be very general, such as Southeast Asia.
After the decision of “where” is made, travelers will differ on how much infor-
mation they collect before making other decisions. A portion of vacationers will turn
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most of the information gathering and decision making over to others, by using a
travel agent and purchasing a tour package. Package tours allow the traveler to trust
the judgment of a tour wholesaler to piece together the necessary services so that deci-
sion making by the traveler is minimal.3 This is usually the case for travelers with lim-
ited experience in consuming travel products.
However, most experienced travelers are independent travelers, those who do not
leave the planning to someone else. Specifically, independent travelers do not book
all-inclusive packages that include transportation, accommodations, and activities at
the destination. These travelers have many decisions to make, both before (pre-trip
planning) and during their trip. Independent travelers tend to have more flexibility
in their itineraries, in terms of where they go, how long they spend at any one place,
where they stay, and what they do at each locale. Travel planning by independent trav-
elers can be thought of as a continuum. Travelers may make virtually all decisions prior
to departure regarding route, duration of stays, where to stay, and what they will do
each day. On the other extreme of the continuum are the travelers who do virtually no
pre-trip planning and allow their trip to evolve spontaneously.4 For example, in studies
of visitors to New Zealand (NZ), Tourism New Zealand researchers have found that
more than 40% do absolutely no preplanning before their arrival on NZ shores.
By now, you realize that travel decision making involves a series of choices con-
cerning many facets of a trip. “Compared to most other examples of consumer decision
making, vacation decision making is a particularly complex and multifaceted matter,
involving a series of decisions on multiple elements of the vacation itinerary.” (p. 20)5
What factors make pre-trip planning more likely or less likely? Research conducted
in a variety of countries indicates that certain characteristics of a trip lead to greater
information search by leisure travel consumers. These characteristics are lack of expe-
rience with the destination, longer duration of trip, farther away from home (espe-
cially international), commercial accommodations (rather than staying with friends or
relatives), larger group size, and multiple destinations.
It’s All in the Details

Logically, the length of a trip will play a role in determining how much pre-trip plan-
ning occurs. For short-term domestic trips, most tourists will plan many elements of
the trip ahead of time, such as dates of the trip, destination, accommodations, and
travel route. For such a trip, even the attractions to attend and other activities are likely
to be planned ahead, although travelers will allow some flexibility in these areas.6
Trips of longer duration allow travelers the opportunity to have multiple desti-
nations. Multi-destination trips tend to be less rigidly planned and allow for more
spontaneity. Travelers who take long multi-destination trips tend to utilize guidebooks
and on-site information sources for help in making decisions as they travel. Locals
and other travelers met along the way are important personal sources of information
regarding what to do, where to stay, and where to dine. Typically, the sequence of
decision making for multi-destination, long-duration trips tends to be sub-destination
decisions, followed by travel route (how to get from A to B), concluding with decisions
concerning attractions and activities to attend/participate in.
Personality type and demographics also impact how much information search and
trip planning a traveler will perform. Think of two very different friends of yours.
One is a planner, a clock-watcher, and a deliberate thinker. The other is spontaneous,
ready to drop everything and go where the wind blows him. Your first friend likely
would enjoy pre-trip planning and view this information-gathering step as part of the
challenge and fun of travel. Your other friend would view such planning as confin-
ing and ruining the surprise of a vacation. Generally speaking, older travelers tend to
plan more, along with those who perceive substantial risk, such as those traveling in a
country whose people do not speak the traveler’s language.
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Finally, think of the type of information travelers may want. In choosing a des-
tination, travelers may seek general information to get a “feel” for the look, culture,
and possible activities of the location. They may also seek more specific information
once they have narrowed their focus to a few destinations, their choice set, so they can
compare the possibilities in more detail. For example, Jo may want to take a fun-in-
the-sun break from winter and decides from all the possibilities that she will go to one
of the islands of the Caribbean. She needs detailed information about the islands she
finds most intriguing. Once she chooses an island destination, St. Lucia, she will need
information about resorts on the island to make an advance reservation. Finally, while
at the destination, she will need to collect information to make individual decisions to
satisfy her day-to-day needs for food, entertainment, local transportation, and the like.
Tourism suppliers therefore vary in the type of information they need to provide
prospective customers. At the macro level, destination marketing organizations, such
as Tourism British Columbia (using the slogan “Super Natural British Columbia”),
need to entice visitors to their region by providing general information in an appealing
format. At the micro level, individual hotels need to have websites that can be accessed
directly or that are linked to the destination marketing site or will be listed when a
traveler conducts a Web search. Small-scale area attractions, such as that of Peter and
Jochen from the chapter opener, need to have attractive brochures available in local
area shops, restaurants, and the local visitor information center. From this discussion
of decision making and information gathering, we hope you now have a better under-
standing of the challenges facing tourism suppliers in getting the right information to
the right people at the right moment in time.
Foundations for Understanding Tourist Motivations

In Chapter 1, you learned that humans have traveled away from their homes through-
out history. What has motivated people to leave familiar surroundings and travel to
distant places? In this section, we will consider what psychological reasons compel indi-
viduals to travel. Psychologists have long studied motivations for a variety of human
behaviors including the drive to travel. We will discuss four of the most well-accepted
models of tourist motivations: push and pull motivations, Maslow’s hierarchy of needs,
Pearce’s travel career patterns (TCPs), and Plog’s psychocentric–allocentric continuum.
Push and Pull Motivations

For decades, tourism researchers have grouped tourist motivations as push or pull fac-
tors. The notion is that travelers are both “pushed” to travel by personality traits or
individual needs and wants, and “pulled” to travel by appealing attributes of travel
destinations. Generally, the push motivations are useful for explaining the desire
for travel while the pull motivations are useful for explaining the actual destination
choice.7 Table 2.1 lists many of the push and pull factors proposed and examined by
tourism motivation researchers.
This “theory” of travel motivation highlights the fact that tourists are pushed
(motivated) to travel by many factors simultaneously, and destinations pull (attract)
visitors with a combination of resources. For instance, a tourist generates the desire
to escape from his mundane day-to-day routine and seeks a destination that seems to
offer the “ticket” to that escape. Research has shown that push and pull factors are
matched by travelers. For example, studies have found a large percentage of travelers
are motivated to travel by a desire to be pampered, comfortable, and entertained.
Destinations that generate the most “pull” for this group of travelers are cities and
beach resorts.
Several of the “push” factors listed in Table 2.1 are identified and researched
personality traits (e.g., novelty seeking). An additional and particularly appropriate
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Table 2.1 Push and Pull Travel Motivations

Push Pull
Desire for escape Beaches
Rest and relaxation Recreation facilities
Health and fitness Historic sites
Adventure Reasonable prices
Prestige Cultural resources
Social interaction Undisturbed nature
Novelty seeking Ease of access
Exploration Cosmopolitan environment
Enhancement of relationships Climate
Evaluation of self Safety and security
Regression Shopping facilities
Learning new things Celebrity sighting opportunities
Desire for pampering/comfort Popular attractions
Being entertained Scenery and landscape
Hobbies Quality accommodation
personality trait theory that relates to tourism is optimal arousal theory. Briefly, the
core of this theory is that each of us has some optimal level of arousal at which we feel
most comfortable. For some, that level is quite low, leading to a relaxed, slower-paced
lifestyle, whereas for many, the optimal arousal level is very high, driving individuals
constantly to seek new and challenging activities. A person who is stressed out by
work may desire to reduce arousal by seeking a quiet seaside resort to spend some
quiet time with a loved one. Another who is bored by the routine of his job and life
may instead decide to travel to Europe and test his mettle on the ski slopes of the Alps.
As mentioned in Chapter 1, other factors also play a role in the desire to travel.
In addition to the push and pull factors, there are inhibitors to travel. Travel requires
time, money, energy, and security. Work and school demands on time may keep a per-
son from traveling. Lack of funds may restrict travel opportunities, and failing health
prevents travel altogether for some. Family situations, for example, a new baby or
caring for an elderly parent, may limit opportunities to travel. Finally, due to world-
wide political unrest, uncertainty about personal safety while traveling has made many
hesitant to travel. The extra security now mandated at many airports, borders, attrac-
tions, and events has dampened the carefree attitude some may have had prior to the
increase in terrorist attacks on civilians, especially travelers, around the globe.
Maslow’s Hierarchy of Needs

Abraham Maslow provided a good general framework for describing human needs in
his classic model depicting the hierarchy of needs.8 This hierarchy, as can be seen in
Figure 2.2, begins at the bottom with basic physiological needs and progresses upward
through safety, belongingness, esteem, and self-actualization needs. Maslow further
grouped these needs into two broader categories: lower-order and higher-order needs. He
believed that this hierarchy of needs was shared by everyone. Although the hierarchy of
needs model was developed to explain human behavior and motivation in general, we will
see later in this chapter how these same concepts can be applied specifically to tourists.
To understand an individual’s behavior, we begin at the bottom of the hierar-
chy and move upward. As each level of needs is satisfied, individuals move up to the
next level of needs. At the lowest levels are basic physiological and safety needs. Basic
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FIGURE 2.2
Maslow’s hierarchy of needs.
Self-
actualization
needs
Esteem
needs
Belongingness
needs
Safety
needs
Physiological
needs
physiological needs consist of food, water, clothing, shelter, and sleep. Next are safety
needs, which consist of protection, security, and the comfort we seek from familiar
surroundings. In the advanced economies of developed countries such as Australia,
Canada, Great Britain, Japan, and the United States, most consumers’ lower-order
physiological and safety needs have been met. Because these needs have been satis-
fied, they are no longer motivators. Individuals often strive to fulfill their higher-order
needs through travel.
These higher-order needs include belongingness, esteem, and self-actualization.
Belongingness needs include love, friendship, affiliation, and group acceptance. Esteem
needs include the desire for status, self-respect, and success. The highest level in
Maslow’s hierarchy of needs is self-actualization or the desire for self-fulfillment.
Travelers may be seeking to fulfill more than one need when they participate in
a tourism activity. Let’s put the ideas in Maslow’s hierarchy of needs into practice by
looking at specific examples in the tourism industry.
Physiological
• Tour packages that offer frequent rest stops
• Easily accessible food outlets in theme parks
• Sleeping shelters strategically located along the Appalachian Trail for overnight visitors
Safety
• Reservation service provided at government-approved agencies or locations
• Cruise ship lines providing medical facilities and doctors as part of their standard
services
• Tour guide services provided in exotic or unfamiliar locations
Belongingness
• Group tours with people having similar interests and/or backgrounds
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• Group recognition gained by belonging to frequent-user programs provided by

airlines, hotels, restaurants, and car rental companies
• Trips made to explore one’s ancestral roots
Esteem
• Elite status in frequent-user programs such as diamond, gold, or silver
“memberships”
• Incentive travel awards for superior company performance
• Flowers, champagne, and other tokens provided to guests in recognition of special
occasions
Self-Actualization
• Educational tours and cruises
• Trekking through Nepal, a personal challenge to one’s physical limits
• Learning the language and culture before traveling to another country and then
practicing on arrival
The hierarchy of needs model provides a good foundation as well as a brief glimpse
into the fundamentals of motivation. Can you think of other examples?
The Travel Career Patterns

The Travel Career Patterns (TCPs) developed by Pearce9 is based on Maslow’s hierar-
chy of needs, but it goes further by providing more detailed insights into specific tourist
behaviors. The TCP model attempts to explain individual behaviors on the basis of stages
in a tourist’s life cycle. When you think about tourist life cycle stages, it may be helpful to
remember that they are very similar to the stages individuals experience in their working
careers. Just as a person tentatively enters a career and eventually becomes more proficient
and effective based on experience, so do tourists as they venture into leisure activities.
According to Pearce, tourist motivations can be illustrated as three layers, where
each layer consists of different travel motives. The most important common motives
(e.g., novelty, escape/relax, and enhancing relationships) are found at the center in the
core layer. The next layer, surrounding the core, includes the moderately important
travel motives, which include internally oriented travel motives (e.g., self-actualization)
and externally oriented motives (e.g., nature and host-site involvement). The outer
layer consists of common, relatively stable, and less important travel motives (e.g.,
nostalgia, isolation, or social status). As shown in Figure 2.3, pleasure travelers at all
stages of the TCP are influenced by the most important and central travel motives as
well as by less important motives. However, as their travel career develops—in other
words, as they grow older, pass through the stages of their life span, and gain more
travel experience—pleasure travelers’ moderately important travel motives shift from
internally oriented needs to externally oriented needs.
The Psychocentric–Allocentric Model

Further attempts to understand and broadly describe the differing wants and needs of
tourists have resulted in a widely used model developed by Stanley Plog.10,11 Based on
observable and consistent patterns of behavior, it is possible to use personality charac-
teristics to understand tourists’ behavior patterns further (see Table 2.2). Plog accom-
plished this task by originally classifying tourists along a continuum with allocentrics
anchoring one end and psychocentrics anchoring the other.9 In an update, Plog sug-
gested the terms venturers and dependables were better descriptors for the end points.
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FIGURE 2.3
Outer Layer
Travel Career Patterns (TCPs). Source: (Less Important)
Based on Lee, U., and Pearce, P. L.
(2003). Travel career patterns: Further Middle Layer
conceptual adjustment of travel career
(Moderately Important) Externally-oriented
ladder. Proceedings of Second Asia e.g., self-development
Pacific Forum for Graduate Students Higher Travel Career Level through host-site
Research in Tourism, 65–78. involvement and
Core Motives seeking nature
(Very Important)
e.g., novelty, Internally-oriented
Low Level
escape/relax, and e.g., self-enhancement,
kinship or relationship romance, kinship
(belonging), and
autonomy
In general, venturers are seeking adventure through travel, whereas dependables are
seeking the comforts of familiar surroundings in their tourism experiences. However,
as the model shows, most travelers fall between these two extremes and would be clas-
sified as near-venturers, midcentrics, and near-dependables. Research has shown that
while Plog’s model may not provide a perfect picture of an individual’s actual travel
patterns, it can be useful to marketers as it appears to be effective in providing an
understanding of their travel aspirations.12
The venturer found at one extreme of Plog’s continuum (see Figure 2.4) would be
referred to by marketers as an “innovator.” These innovators seek out new locations
and activities before they are discovered by others. As more people become aware of
these locations and activities, information about them is communicated or diffused to
Table 2.2 Psychocentric–Allocentric Personality Characteristics

Psychocentrics/Dependables Allocentric/Venturers
Prefer familiar travel destinations Prefer non-“touristy” destinations
Like commonplace activities at Enjoy discovering new destinations before
destinations others have visited them
Prefer relaxing sun-and-fun spots Prefer unusual destinations
Prefer low activity levels Prefer high activity levels
Prefer driving to destinations Prefer flying to destinations
Prefer heavy tourist accommodations, Prefer services such as adequate to good
such as hotel development, family-style accommodations and food, and few
restaurants, and souvenir shops developed tourist attractions
Prefer familiar rather than foreign featuring Enjoy interacting with people from different
a full schedule of activities cultures
Prefer purchasing complete tour packages Prefer tour arrangements that include basics
(transportation and accommodations) and
allow for considerable flexibility
Source: Based on Plog, S. C. (1974, February). Why destination areas rise and fall in popularity. Cornell Hotel
& Restaurant Administration Quarterly, pp. 55–58; Plog, S. (2001). Why destination areas rise and fall in
popularity. Cornell Hotel & Restaurant Administration Quarterly, 42(3), 13; Plog, S. C. (2002). The power
of psychographics and the concept of venturesomeness. Journal of Travel Research, 40, 244–251.
M02_COOK1670_06_GE_C02.indd 59 13/05/17 10:27 AM

FIGURE 2.4
Psychographic positions of
destinations.
Near- Midcentrics Near-

dependable venturer
Dependable Venturer
North & South

Branson, Missouri
Walt Disney World
U.S. (general)
Hawaii
Caribbean
Great Britain
France
Eastern Europe
Hong Kong
Japan
China
Africa
Nepal
Poles
Wading into The Narrows at Zion National Park fulfills venture traveler’s needs. Photo by
Sabrina Cook
M02_COOK1670_06_GE_C02.indd 60 13/05/17 10:27 AM

more and more people. Interest in traveling to these new locations or experiencing new
activities passes from the venturer to the midcentric and eventually to the dependable
as these locations or activities become commonplace.
The dependable found at the opposite extreme of Plog’s continuum would most
likely be tradition bound and tend to be uncomfortable with new and different activ-
ities and/or locations. These individuals would be interested only in visiting popular
locations and participating in customary activities. They desire predictability and the
comforting reassurance that other visitors have enjoyed the same experiences.
Dependables can enter a McDonald’s restaurant throughout the world and find a
familiar atmosphere and menu. On the other extreme, venturers may be drawn by the
allure of seeking out unique travel and tourism experiences that have previously gone
unnoticed. Taking a rubber raft down the headwaters of the Amazon River or trekking
among the highland villages of Nepal might appeal to the venturesome travelers today,
but they will be looking for something new and different tomorrow.
The creators of the Disney mystique may be catering to a broad cross section of visi-
tors. For dependables, a Disney theme park assures them of similarity and consistency in
operations. However, Disney is continually adding new attractions and entertainment to
appeal to a broader market group of visitors. How would you classify yourself along this
continuum? To find the answer, log on to BestTripChoices.com and take a short quiz.
Segmenting the Tourism Market

The old saying “You can’t please all the people all the time” certainly holds true for
tourism service suppliers. Because you can’t please everyone, whom should you please?
One common approach to answering this question is to focus marketing efforts by seg-
menting potential customers into groups with fairly similar wants and needs.
Identifying tourism customers and deciding how to meet their wants and needs is
a basic task facing everyone in the tourism industry. In large organizations, this task
is often given to marketing professionals. For example, according to the vice president
for Revenue Management at MGM Brands, “The finer we can segment our market, the
better we can target and get the right product in front of the right customer in the right
channel at the right price!” (p. 112)13 In smaller organizations, such as Peter and Jochen’s
A Ride with a Difference!, this responsibility might remain with the owner or manager.
As we discussed in Chapter 1, the marketing concept creates a customer-oriented
philosophy that is essential to meeting visitors’ wants and needs. Let’s think about the
questions raised by Peter and Jochen as they considered the future of their Segway city
tour business. They both agreed on the importance of knowing more about marketing,
sales, and customer service, but they weren’t sure where to start.
The starting point for any organization planning to implement the marketing con-
cept is to learn more about its customers. But, who are these customers? Although it
may sound appealing to think of everyone as a potential customer, marketers have
learned that this usually does not lead to a high level of customer satisfaction. A com-
mon example with which we can all identify will help explain this statement.
Imagine for a moment you are the president of a major lodging company. You
decide that it would be profitable to come up with the perfect hotel—a hotel at which
everyone would want to stay. Is such a dream possible? If you designed the “average”
hotel—rooms, a restaurant, and a swimming pool—do you think every potential guest
would be equally satisfied with this hotel? Of course not. Some guests want inexpensive
accommodations and have no need for any amenities other than a clean, comfortable
room for the night, whereas others want to be pampered and select from a large variety
of services, room types, and amenities. With this in mind, could you design an “aver-
age” hotel that would satisfy everyone? Probably not, because trying to meet everyone’s
needs and wants with the same services would prove to be an impossible task.
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The task of meeting diverse needs and wants led to the idea of market segmen-
tation. Instead of trying to meet everyone’s needs and wants with a single product or
service, marketers divide the large, heterogeneous market for a good or service into
smaller but more homogeneous market segments. A heterogeneous market is one com-
posed of people having differing characteristics and needs, whereas a homogeneous
market is one with people of similar characteristics and needs.
The task of grouping millions of travelers into groups with similar needs and
wants may appear to be a bit complex at first. However, this process can be simplified
if we begin to think of the tourism market as a large jigsaw puzzle. Each piece of this
puzzle (i.e., each consumer) is unique. Once several pieces are put together, they begin
to form similar-looking sections (market segments). Finally, when all of these sections
of the puzzle are put together, they form the whole picture (the market).
As you saw in Chapter 1, it is possible to begin segmenting the tourism market by
using the broad reasons people give for traveling: vacation and leisure, visiting friends
and relatives, and business and professional. Although these broad reasons for travel
may provide some initial insight into potential tourism market segments, they do not
provide the level of detail needed to understand specific consumer needs. What are
needed are segmentation approaches that clearly describe travelers and that can be
used as a basis for planning to meet their needs and wants.
Common approaches (called “bases”) to segmenting markets can be achieved by
grouping customers according to the following variables:
1. Geographic characteristics
2. Demographic characteristics
3. Psychographic characteristics
4. Product-related characteristics
These segmentation variables provide a good starting point as we begin to fit the
pieces of the tourist jigsaw puzzle into a meaningful picture. Each of these segmentation
approaches also serves to highlight the breadth, depth, and differences to be found among
individuals and groups of tourists. However, as we begin to study groups of travelers, do
not lose sight of the importance of meeting individual needs. Remember, Maslow, Pearce,
and Plog showed that although we may behave in similar ways, we are all still individu-
als! The brand boom taking place in the hotel industry demonstrates the importance of
serving the needs of varying segments of travelers. With over 350 brands, and many of
them part of the same parent company, there is a hotel to cater to everyone’s needs.14 We
will explore hotel brands in more detail later in this chapter and also in Chapter 7.
Geographic Segmentation
Geographic segmentation, grouping potential tourism customers based on their loca-
tion, is the oldest and simplest basis for market segmentation. Even though people
in the same geographic location do not usually have similar wants and needs, their
location often has an important impact on their selection of tourism goods and ser-
vices. Commonly used geographic segmentation variables include nations, regions,
states/provinces, counties/parishes, cities, and even neighborhoods.
Geographic segmentation has proven especially useful in segmenting the traveling
public. Many tourism facilities and attractions market their services regionally, recog-
nizing that the time and money involved in traveling makes them more attractive to con-
sumers within a certain defined geographic area. For example, the Walt Disney Company
advertises Disneyland, located in California, heavily in the western United States and the
Pacific Rim countries (such as Japan), whereas it markets Walt Disney World, located
in Florida, more heavily in the eastern United States and Europe. On a smaller scale,
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Killington Ski Resort in Vermont is promoted to skiers in northeastern North America,

whereas Durango Mountain Resort outside Durango, Colorado, tries to attract skiers
primarily from the southern and western United States. Would geographic segmentation
provide useful information to Peter and Jochen about their potential customers?
Demographic Segmentation
Although geographic segmentation is the simplest and oldest approach to grouping
tourists, demographic segmentation is the basis most commonly used for market seg-
mentation. Using this approach, consumers are grouped according to variables that
define them in an objective, easily measurable way. These variables include classifi-
cations such as gender, age, ethnicity, occupation, education level, income, household
size, and family situation. Demographics are frequently used by marketers because
information about people’s objective characteristics is routinely collected and widely
available. A gold mine of segmentation information for marketers who know how to
use it can be found in data gathered and reported by most national government offices,
such as Statistics Canada and the U.S. Census Bureau.
Examples of tourism organizations using demographic segmentation abound. Club
Med is using demographic segmentation when it attempts to serve the needs of two dis-
tinct upscale market segments. One segment is composed of young singles and the other
of high-income married couples with children. Tour operators and cruise lines are using
demographic segmentation when they develop special tours or cruises featuring nostal-
gic, educational, religious, or ethnic experiences. Can you think of other examples?
Psychographic Segmentation
Geographic and demographic variables provide easy approaches to segmenting travel-
ers, but we all know that people are much more different than these simple pieces of
information might suggest. For example, most of us listen to music. And, even though
age is an important factor in determining the type of music different people enjoy, you
probably know people of similar ages who have different tastes. Some Generation Yers
enjoy rap music while some enjoy old-fashioned rock and roll and still others prefer
the sounds of the classical music. These differences come from what marketers call
“psychographic variables.”
Psychographics were developed by marketing researchers to try to link personality
to product or brand usage. Originally, these researchers relied on standard psycholog-
ical personality measurement.15 Personality refers to a person’s unique psychological
composite that compels a person to react in consistent ways to his or her environ-
ment. Examples of personality traits that are commonly measured by psychologists are
introversion/extroversion (outgoingness), need for cognition (think and puzzle things
out), and innovativeness (degree to which a person likes to try new things). To better
capture a person’s “consuming” self, researchers added to personality concepts the
measurement of activities, interests, and opinions, called AIOs.
Psychographic segmentation involves grouping people on how they live, their pri-
orities, and their interests. Put all this together and you have a description of a per-
son’s lifestyle and personality. Psychographic segmentation has been used by cruise
lines and resorts to target individuals with similar hobbies, sports preferences, and
musical interests.
Sometimes, psychographic segmentation is called lifestyle segmentation. A lifestyle is
broadly defined as a way of living identified by how people spend their time (activities),
what they consider important (interests), and what they think of themselves and the
world around them (opinions). Some examples of activities, interests, and opinions that
might be important to those working in the tourism industry are included in Table 2.3.
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Table 2.3 Psychographic Lifestyle Dimensions

Activities Interests Opinions
Work Family Themselves
Hobbies Home Social issues
Social events Job Politics
Vacation Community Business
Entertainment Recreation Economics
Club membership Fashion Education
Community Food Products
Shopping Media Future
Sports Achievements Culture
Source: Faarup, P. K. and Aabroe, J. (2010). The marketing framework. Denmark: Academica. (p.136).
The idea of segmenting travelers based on activities, interests, and opinions

might seem familiar, because this approach was popularized by Stanley Plog in his
psychocentric–allocentric continuum. More recently, three large psychographic seg-
ments have been identified in the American travel market. In a proprietary (privately
funded) study based on survey information collected from thousands of travelers,
a research firm developed segments by associating values expressed by the survey
respondents and the type of vacations they preferred.
The largest segment the study identified is termed the “family getaway traveler”
(38% of American travelers). This segment values family time above all else and seeks
activities that all members of the family can enjoy together. The second segment is
called the “adventurous/education traveler” (31%). This type of traveler values phys-
ical activity and challenge, and enjoys interacting with nature. Segment three is com-
posed of “romantics” (28%). As the name suggests, these travelers value intimate
companionship and have a primary desire for comfort and relaxation. Do you see
yourself fitting into any of these categories? To learn more about psychographic or
lifestyle segmentation, consult any consumer behavior textbook.
Product-Related Segmentation
The previously mentioned bases for segmentation—geographic, demographic, and
psychographic—are all used to help marketers move closer to the goal of developing
product offerings that better satisfy potential tourism consumers. However, in all these
cases, we are indirectly grouping people based on characteristics we assume are related
to their needs and wants. Because assumptions can sometimes get us into trouble, mar-
keters often try to segment less indirectly and more directly: They attempt to group
potential buyers directly from what people indicate they need or want in a particular
good or service. These product-related variables include the following:
1. The benefits people seek in the good or service (e.g., the ability to guarantee
the availability of a room at a hotel).
2. The amount of good or service used (light users such as occasional leisure
travelers versus heavy users such as business travelers).
3. The degree of company loyalty shown by the consumer in relation to the spe-
cific good or service (participation in frequent-user programs).
In Chapter 1, we mentioned that travelers are frequently grouped into leisure ver-
sus business categories. These groupings serve as good examples of product-related
segmentation. Tourism suppliers know that travelers seek different benefits based
on the purposes of their trips. Think about the benefits a businessperson seeks in
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FYI SINUS-MILIEUS®
A widely used lifestyle segmentation differences. Ten Sinus-Milieus ® were a result, marketers can identify and
system, Sinus-Milieus ® , developed identified for Germany: Established target groups with greater efficiency
by the Sinus Institute in Germany, Conservative, Liberal Intellectual, and effectiveness. However, lifestyles
has become an influential tool for High Achiever, Movers and Shakers, around the world are evolving and this
target group segmentation. Sinus Socio-ecological, New Middle Class, needs to be considered. For exam-
milieu research uses an ethnolog- Adaptive-Pragmatist, Traditional, Pre- ple, a growing interest in sustainabil-
ical approach in order to identify carious, and Escapist. Indeed, it is ity is shaping values and redefining
so-called “social milieus,” that is, the Escapist milieu, with a 15 per cent lifestyles. Marketers should certainly
groups of people with similar values share of the population (14+ years), not overlook the profile of tomor-
and lifestyles. It has also developed that represents the largest milieu, row’s customer segment. It could be
county-specific studies that high- the modern lower class/lower middle a costly oversight for the bottom line.
light international similarities and class seeking new experiences. As
Source: http://www.sinus-institut.de
accommodations compared to the benefits desired by a person traveling on a holiday

or vacation. How would these benefits differ?
Business travelers tend to be the “heavy users” of many tourism services, espe-
cially air transportation, hotels, and rental cars. Airlines, hotels, and rental car com-
panies have responded to these needs by developing services and forms of promotion
that appeal especially to these busy frequent travelers. Services such as ticketless travel,
hotel rooms wired for all types of technology, and the computerized check-in kiosks at
many airport rental car locations were all developed to appeal to this special group of
travelers. Finally, in a special appeal to this group, frequent-user programs were devel-
oped expressly to encourage and reward loyalty and repeat patronage.
Putting Segmentation Knowledge to Work

Now that you know some of the basic approaches to market segmentation, you are
faced with yet another challenge: when and how to segment. It would be nice if we could
neatly categorize and slice up all travelers into distinct market segments. However, we
can encounter several problems in attempting to segment markets. For example, some
markets might be too small to segment. In addition, each of us can be classified as
members of many different markets, which tends to complicate the segmentation task.
There are almost as many potential market segments as there are groups of people.
In fact, many market segments that were not even considered a few years ago, such as
travelers with disabilities and volunteerism travelers, are growing in size and importance.
The task of deciding when and how to segment can be clarified by answering the
following questions:
• Can the market segment be relatively easily identified and measured in both pur-
chasing power and size?
• Is the segment large enough to be potentially profitable?
• Can the segment be reached efficiently and effectively through advertising and
other forms of promotion?
• Is the segment interested in the service offered?
• Is the segment expected to be long term and will it grow or shrink in size?16
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Market segmentation helps satisfy differing visitor needs. Vibe Images/Fotolia
Although this list of questions helps narrow the range of potential segments, the
most important reason for segmenting should not be forgotten. Segmenting permits
tourism service suppliers to better meet specific customer needs and wants while
attempting to increase their satisfaction. Once a segmentation approach has been
selected, the next task is to decide which of these segments to target.
Marketers use a five-step approach to accomplish this market segmentation deci-
sion process. In Step 1, they choose one or more of the segmentation approaches we
have previously described for grouping individuals. Even though we introduced each
basis for segmentation separately, most organizations tend to use a combination of
these approaches. For example, the Vancouver Aquarium in British Columbia might
define its market in terms of geographic location and demographic profile. The aquar-
ium’s marketing team might break the potential market for its educational and enter-
tainment services into two geographic segments, such as people within a 200-mile
radius of Vancouver and those living more than 200 miles away, and then further
group potential visitors by age and family situation.
In Step 2, each segment is profiled in as much detail as is cost-effective. This
greater amount of detail provides a more accurate understanding of the needs of the
segments and is used in developing a basic outline of the marketing mix that each
segment would require. Continuing with our example, management of the Vancouver
Aquarium may decide to conduct a comprehensive consumer research study to gather
detailed information about the visitors to the aquarium. The decision makers can then
develop more thorough profiles of the various segments. In acquiring this consumer
information, the research team would need to survey consumers who visit the attrac-
tion at different times of the year. Visitors during July may tend to be international
travelers from the United States and Japan, whereas visitors in December may tend to
be Vancouver locals and other British Columbians.
In Step 3, forecasts are developed for the market potential of each segment being
considered. All segments will not be the same in terms of number of potential buyers and
amount of purchasing power, nor will they be equally likely to desire the good or service.
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Table 2.4 The Segmentation Process

Step 1. Select segmentation approach.
Step 2. Create detailed profile of segments.
Step 3. Forecast market potential of each segment.
Step 4. Estimate likely market share of each segment.
Step 5. Decide which segment or segments to target and design appropriate marketing mix.
In Step 4, an “educated guess” about the share of each segment’s business that the
organization is likely to be able to achieve is prepared. Some segments are likely to find
the organization’s offerings more appealing than are other segments.
In Step 5, the decision is made as to which segment or segments will be targeted,
that is, for which segments a specific marketing mix will be developed. These segments
then become the organization’s target markets. Returning to our example, although
school trips to the aquarium are plentiful and acquaint thousands of area youngsters
with its marine species, this segment does not bring in large revenues to cover the
cost of operations. Other segments with more purchasing power will also need to be
attracted to generate the money necessary to keep the aquarium “afloat.”
Based on the information gathered in this five-step process, as shown in Table 2.4,
marketers are able to develop sets of “product, place, promotion, and price” that they
hope will be attractive to the segments they have chosen to target. As an illustration, the
marketing director of the Vancouver Aquarium may decide that the “within 200-mile
radius, environmentally concerned, married retiree” segment has great potential during
the fall. She may therefore develop a marketing package that offers these consumers spe-
cial guided tours (including lunch) on Tuesdays during September and October for one
all-inclusive price. She may advertise this package on area radio stations that features
easy-listening music. The process of segmenting larger markets and then targeting these
specific segments furnishes tourism organizations with the tools to focus their attention
on providing appropriate levels of service to their most likely customers. Just like the
time and effort it takes to put together an intricate jigsaw puzzle, it may also require
time and commitment to identify potential groups of tourism consumers, but the effort
will be worth it. When wants and needs are identified and met, tourists will return and
often tell others who share similar characteristics about their positive experiences.
An example of meeting these needs can be found with hotels. With the advance-
ment of technology and changes of tourist behaviors, hotels may segment and market
to their customers based on rate fences. Researchers have identified four distinctive
segments: refund seekers, one-week advance booking lovers, price-sensitive consum-
ers, and nonfenced consumers.17
TOURISM IN ACTION
PUTTING SEGMENTATION TO WORK IN VACATION PLANNING
YHA in the UK uses psychographic and demographic cues on its website (http://www.yha.org.uk) to help viewers
choose the perfect outdoor vacation break. YHA has simplified the process of finding the perfect vacation options.
Website viewers are encouraged to explore their vacation options by selecting from a variety of destinations, activ-
ities, and vacation types to discover their perfect getaway. By clicking on choices, viewers can filter options that fit
their individual desires and profiles. For example, viewers who wish to visit the Peak District in England can click
on accommodation type (e.g., Camping Barns) that is ideal for families and/or particular outdoor interests such as
climbing, walking, and cycling. The result is usually a perfect match!
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Specialized Tourist Segments

Five large and distinctive segments of tourism consumers deserve special discussion
because of their size and importance to the industry. These segments are business and
professional travelers (product-related segmentation), incentive travelers (product-
related segmentation), SMERF groups (psychographic segmentation), mature travelers
(demographic segmentation), and special-interest travelers (psychographic segmenta-
tion). Let’s take a brief look at the size, importance, and common characteristics of
each of these segments.
Business and Professional Travelers

Business travel is considered to be the backbone or “bread and butter” of the tourism
industry because businesspeople are often required to travel as a part of their day-to-
day activities. Worldwide, direct spending on business travel including expenditures
on meetings, events, and incentive programs reached $1.12 trillion in 2013 and should
grow by over 7% a year through 2017. The most rapid growth in business travel and
spending is projected to occur in Brazil, Russia, India, and China (the BRIC coun-
tries).18 Because travel is a part of their jobs, the amount of money they spend on
tourism services tends to stay fairly constant, and they are not as price sensitive as
vacation and leisure travelers. Therefore, the demand for business travel services is
fairly inelastic. When demand does not significantly change with price fluctuations, it
is said to be inelastic. In contrast, when demand changes substantially as price fluctu-
ates, it is referred to as elastic. The demand for vacation and leisure travel and tourism
services is elastic because it can be significantly influenced by changes in prices.
The prices travelers pay for airline tickets provide an excellent example highlighting
differences between inelastic and elastic demands. When looking at airfares, you may
have noticed the least expensive airfares are the ones booked the farthest in advance of
the scheduled departure date, or the last-minute sales of distressed inventory. Because
businesspeople typically have to travel on short notice at specific times and to specific
destinations, they are willing to pay higher fares to obtain needed services (inelastic
demand). However, because leisure travel is elastic and these individuals can plan their
trips in advance or on the spur of the moment, they are attracted to lower airfares and
are often willing to travel to bargain destinations just for the fun of the experience.
How would the concepts of inelastic and elastic demand work for a downtown com-
mercial hotel experiencing heavy demand from business travelers during the weekdays
while attempting to fill the rooms with leisure travelers on the weekend?
Business travel expenses are also one of the largest and most controllable expense cat-
egories in any organization. Because these travelers are so important to the profitability
and potential success of most tourism service suppliers, it is important for us to know
more about these individuals. The task is made easier because there are several charac-
teristics that are common to many business travelers, as can be seen in the information
provided in Table 2.5. Business travelers will continue to be more demanding of tourism
service suppliers as they come to expect at a minimum the current level of services and
benefits as a standard level of performance. The challenge of retaining and satisfying
these individuals will depend on identifying the aspects of the travel and tourism experi-
ence that can be modified or improved to truly delight these demanding visitors.
Professional travelers are similar to business travelers in many ways, although this
type of travel is more elastic than business travel. Professional travel is built around
the meeting and convention markets. These markets have grown as transportation,
especially by air, has become more available and affordable. As professional travel
continues to grow, new and expanded meeting and convention facilities have been
developed to satisfy this increasing demand. Along with this growth, new management
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Table 2.5 Business Traveler Profile

Seventeen percent of frequent business travelers take 64% of all business trips.
Average number of trips 7
Average number of nights per trip 3.2
Average miles per trip 1,128
Traveled by car 60%
Traveled by air 38%
Used a rental car during business trip 25%
Stayed in hotel 65%
Combined vacationing with business trip 62%
Male 57%
Female 43%
Source: Washington, K., and Miller, R. (2005). The 2006 travel & tourism market research handbook.
Loganville, GA: Richard K. Miller & Associates.
challenges have arisen to serve this specialized market. Some of the key market seg-
ments for meeting participants or attendees are associations, businesses, exhibitions
and trade shows, religious organizations, political parties, and governments.
For many years, forecasters have predicted the demise of business and professional
travel based on the increasing availability and sophistication of electronic communication
technology. However, the importance of face-to-face interaction remains important in
maintaining business relationships. Many futurists have also predicted a decline in busi-
ness and professional travel with the introduction of teleconferencing. Although telecon-
ferencing serves to introduce people to each other electronically, they will eventually want
to meet in person to interact and network. This need for personal contact and interaction
has allowed the business travel market to grow even in the face of advancing technology.
In response to the needs of the business travel segment, tourism service suppliers
have offered a wide array of services and benefits. Airlines instituted frequent-flier pro-
grams and service upgrades including premier economy seats as well as business and
first-class cabins and have provided corporate pricing, discounts and rebates, travel
lounges, and preferred check-ins. Amtrak developed club service with reserved seating,
snack and beverage service, and conference rooms on some trains. Car rental com-
panies, following the lead of airlines, established frequent-renter programs that pro-
vided corporate pricing, discounts, rebates, upgrades, and special check-in procedures.
Hotels and other lodging properties have provided similar benefits to business trav-
elers including corporate pricing, discounts, and rebates; special floors and sections
including business centers; frequent-stay programs; and upgrades.
Marriott International provides a good example of how one company has used
consumer behavior information to further segment the business and professional travel
market successfully. Although Marriott serves the needs of leisure travelers, it has
designed multiple types of lodging facilities to serve business travelers in three dis-
tinct segments. The first is the luxury collection of brands including The Ritz-Carlton,
Bulgari Hotels & Resorts, and Edition Hotels.
The second is the full-service collection of brands, including Marriott Hotels
& Resorts, JW Marriott, Renaissance Hotels, and the Autograph Collection. These
hotels are targeted to business travelers who want a wide variety of facilities and ser-
vices while on business trips, such as secretarial support, room service, spas, exercise
facilities, conference rooms, a variety of restaurants, and other services. The third is
the limited-service collection of brands, including Courtyard by Marriott, Fairfield
Inn & Suites by Marriott, Spring Hill Suites by Marriott, Residence Inn by Marriott,
M02_COOK1670_06_GE_C02.indd 69 13/05/17 10:27 AM

TownePlace Suites by Marriott, and Marriott ExecuStay. These properties were

designed expressly with the “limited expense account” businessperson in mind. This
type of traveler wants the basics of a business hotel or the comforts of home for an
extended stay but doesn’t have the budget or desire to pay for the extras not used.
Even inside each of these broad segments, there are further subdivisions. For
example in the limited-service segment, Fairfield is targeted at the value-conscious
travelers, while Residence Inn is targeted at the upscale extended stay travelers. A good
example of how Marriott has placed hotels to meet a wide variety of guest needs can
be seen in the brands that surround the Las Vegas Convention Center. Guests travel-
ing to events at this venue can choose from the Renaissance Las Vegas Hotel, the Las
Vegas Marriott, Courtyard, Residence Inn, or Spring Hill Suites. Catering to a variety
of needs has become even more important, as there is a growing trend for business
travelers to combine pleasure trips with business demands.
Incentive Travelers
One of the faster-growing segments of the tourism industry is incentive travel, which
is a sub-segment of the broader MICE (meetings, incentive travel, conventions, and
events) segment generating about $13 billion a year in the United States alone.19
Employee productivity and motivation are a concern for all organizations, and incen-
tive travel awards are an attempt to achieve higher levels of both. Incentive programs
are designed to create competition, with the winner(s) receiving many different types
of awards, including complete holiday getaway packages. The good news for the tour-
ism industry is that, in general, if properly planned, people will work harder to receive
an incentive trip than any other type of reward, including cash.20
Planning incentive travel awards requires creating a party atmosphere for cele-
brating achievement, so the settings for celebrating these successes are spectacular by
design. In the United States, typical destination locations for recipient awards include
Hawaii, Europe, and the Caribbean Islands. The up and coming destinations include
Africa and China.21 Trips to these locations often involve recognition award banquets
and many other special activities where the recipients can be honored and pampered.
All aspects of incentive travel are structured so that everything is first class, filled
with pleasant surprises, and arranged so that participants never have to pay for any-
thing. The incentive travel segment demands the best in service and, at the same time,
is willing to pay incentive tour operators top dollar for these services. Companies such
as BI, Maritz, and Wyndham Jade provide organizations with a one-stop shop for
motivation and loyalty enhancement programs designed around rewarding people with
incentive travel. These programs can be designed to reward individuals or groups by
providing everything from transportation, lodging, food, activities, to entertainment.
BI’s efforts to continuously improve its internal processes and customer satisfaction
have garnered the coveted Malcolm Baldridge National Quality Award. BI joins only
one other tourism service provider, the Ritz Carlton Hotels, to have achieved this dis-
tinction of excellence. Because of the size and importance of MICE, we will explore
this segment of the tourism industry in more depth in Chapter 4.
SMERFs
SMERFs are not those little blue creatures that became popular Saturday morning car-
toon icons and later a movie but is an acronym for a very large, but hard to define and
reach, group of travelers. SMERF stands for Social, Military, Education, Religious,
and Fraternal. Even though these groups are hard to define and reach, their impor-
tance to the tourism industry cannot be overlooked. They are a large market in terms
of potential revenue; they tend to hold events on weekends that create traffic when
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business travel volume is at its lowest point; and contrary to popular opinion, they are
not always price sensitive.
Estimates have placed the market value of these groups of U.S. travelers at any-
where between $18 billion and $90 billion annually and growing. Because of the size,
growth, and need for personalized service, this market segment is proving to be very
attractive to tourism service providers, especially travel agents, tour operators, cruise
lines, hotels, and resorts. Because SMERF groups are typically run by volunteers, they
pose some unique marketing challenges both in identifying the specific groups and
in creating service offerings that cater to their needs. Social groups such as vacation
clubs, reunions, weddings, and girlfriend get-togethers may be the hardest of all the
SMERFs to identify and target, but they have proven to be the least price sensitive.22
Mature Travelers
Another large and growing segment of tourism consumers is mature travelers. The face
of the industrialized world’s population is changing. Although it is probably a mistake
to lump all mature travelers together into a single market, it is important to understand
the immense size of this market. The U.S. Census Bureau estimates that the number of
senior citizens aged 65 and over in the year 2040 will be 1.3 billion worldwide, repre-
senting 14% of the world population.23 By 2050, those people over 60 years old will
more than double, and by 2100 it will more than triple.24 A good idea of the changes
taking place in the mature segment of the tourism market can be seen by looking at the
changes taking place in the United States. The American population is aging and will
continue to increase as a percentage of the total population. This segment will grow
seven times faster than all other age segments.25 Similar demographic shifts are taking
place in many countries throughout the world.
The number of senior citizens in the United States who compose the market seg-
ment called mature travelers has been growing at double-digit rates. This rapid growth
provides many opportunities for firms who recognize and plan to meet the needs of
Mature travelers have the time and money to explore the world. Wavebreakmedia/Shutterstock
M02_COOK1670_06_GE_C02.indd 71 13/05/17 10:28 AM

Table 2.6 Profile of Mature Travelers

Represent 21% of all leisure travelers
Comprise 14% of business travelers
Take an average of 4.1 leisure trips each year
Take an average of 6.7 business trips each year
68.3% would like to travel to beach, rivers, and lakes
64.3% like to travel to quiet countryside
57.6% like to travel to natural wilderness
52.9% would like to visit historical sites
Travel primarily by car, truck, or recreational vehicle: 75%
Take long trips: 5.3 nights
Take the longest pleasure trips of all age groups: 948 round-trip miles (avg.)
Age group most likely to purchase package tours
Source: Based on U.S. Travel. (2010). Travel facts and statistics. Hsu, C. H. C., Cai, L. A., and Morrison, A.
(1995). Relationships between sociodemographic variables, travel attitudes, and travel experiences. In K. S.
Chon, ed., New Frontiers in Tourism Research. Harper Woods, MI: Society of Travel and Tourism Educators.
these travelers. The mature traveler market segment is especially important because
these individuals spend 30% more than younger travelers and account for 80% of all
commercial vacation travel.26
Other significant facts about this group of travelers in the United States that may
have gone unnoticed or unappreciated are as follows:
• They are the fastest-growing segment of the travel market.
• They have the time and desire to travel.
• They have the wealth and disposable income needed for travel.
• They actively seek the services of travel professionals.27
Findings from two different surveys (see Table 2.6) of travelers over the age of
50 provide useful insights into the needs and expectations of this growing market.
Many mature visitors have the time, money, and energy to travel and enjoy family,
friends, new sights, adventures, and active lifestyles. Several researchers have found
that most mature travelers fall into one of three segments. The first tend to be sight-
seers, preferring package tours to cities with a wide variety of urban attractions. They
do not like either surprises or the party scene and are very concerned for their safety
while they travel. The second segment of mature travelers, are enthusiastic participa-
tors, who tend to be younger, better-educated seniors, and they seek adventure and
new experiences. They enjoy exploring on their own and mingling with the local pop-
ulation at destinations. The third segment of mature travelers are family focused, pre-
ferring travel that results in family time and interactions. They tend to be less affluent
and less educated than the other two segments.28
Mature travelers are increasingly traveling with their families, at least on some of
their trips. Because families are scattered across a country (or even around the globe),
more and more families are using vacations as a time for family togetherness, including
grandparents and other extended family members on the trip. This emerging segment
that is focused on creating memories designed to educate, pass on traditions, and build
family ties is called intergenerational or multigenerational travel. These family groups
tend to take vacations to destinations that offer a wide variety of activities so every-
one, no matter one’s age, can find something exciting to do. Las Vegas, Hawaii, and
cruises have proved to be popular destinations for these family “reunions.”29
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“One of the biggest challenges, overall, is how to market to the mature travelers.
Mature travelers do not want to be seen as ‘mature travelers,’ but merely an older
‘young person’ with distinctive tastes and enthusiasm.” (p. 72)30 As tourism service
suppliers plan to meet the needs of this growing and potentially lucrative market seg-
ment, it will be important to recognize their similarities and differences when compared
to other traveler segments. While they demand the same types of services as other trav-
elers, these service offerings will need to be adapted to meet their special needs.
Meeting these special needs requires attention to reducing uncertainties, providing
opportunities for relational benefits and simplifying the decision-making process prior to
purchases. Simple things like providing travel insurance options, creating opportunities
to meet others either personally or through blogs and forums, and limiting the complex-
ity of information sources, combined with testimonials, can ease the travel planning and
purchase process. Finally, providing opportunities to share experiences through social
media postings will enhance the feeling of connectivity and lead to repeat purchases.31
Special-Interest Travelers
Over the past 50 years, tourism has evolved as tourists have become more sophisti-
cated and more discriminating in their tastes and jealous of their limited free time.
Originally, tourism was characterized by general-interest tourism. The destination and
its variety of attractions were the most important components of the tourism prod-
uct and the primary motivators for leisure travel. Today, more and more travelers are
focusing their vacation attention on experience and are selecting a destination based
on the ability to participate in one or more of their favorite pastimes. This selective
form of tourism is now called special-interest tourism (SIT). SIT is “defined as tourism
TOURISM IN ACTION
FOCUSING IN ON SENIOR TRAVELERS
Saga is a UK-listed company with a difference. It is in the business of the so-called “gray” or “silver” market.
Sidney de Haan founded a travel company in Folkestone, England, in 1951, offering vacations exclusively to
retired people. Fast forward over 65 years and Saga is now the UK’s leading provider of insurance, travel, personal
finance, and healthcare products and services tailored to the needs of the over 50s. Saga’s experience, expertise,
and know-how within the senior travel sector has created a distinctive niche market positioning. Seniors (anyone
over 50 years and a traveling companion can be over 40 years) can take advantage of a diverse range of vacation
offerings including hotel stays, river cruises, escorted tours, and ocean cruises. There is really something for
everyone. For example, seniors who do not want the stress of traveling can choose Stay & Relax, where they can
be pampered at a selected hotel, while Stay & Explore allows the more adventurous holidaymaker to discover the
region from one base. There is a wide choice of destinations in Africa, Europe, Asia, Australasia, Caribbean, North
America, and South America. Saga even owns two ships, Saga Sapphire and Saga Pearl II, that provide a luxury
cruising experience without the noise and hectic of families. Saga is certainly banking on strong growth for the
future. The company noted that the over 50s are the fastest growing demographic in the UK and is forecast to
represent a staggering 40 percent of the UK population by 2033. It is not only demographics that is changing the
dynamics of the UK travel market. The over 50s not only have more wealth than previous generations (younger
members of this demographic group are also inheriting wealth) but they also have more leisure time and are more
willing to enjoy life in the “golden” years. There may indeed be some truth that 60 is the new 40 and 50 is the
new 30!
Source: http://travel.saga.co.uk
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Table 2.7 Evolution of Special-Interest Tourism

General-Interest Tourist Mixed-Interest Tourist Special-Interest Tourist
Where would I like to go? Where do I want to go, and what What interest/activity do I want to
activities can I pursue there? pursue, and where can I do it?
undertaken for a distinct and specific reason; thereby indicating that the special inter-
est tourist has a specific interest-based motivation for his/her travel to another destina-
tion.” (p. 12)32 Table 2.7 shows the evolution of this tourism transition.
Special-interest travelers come in all shapes and sizes. Tour operators, for example,
are now offering tours with a list of special interests/activities (e.g., opera, wine, and
battlefields), geographic area (e.g., Antarctica), or affinity groups (e.g., single women,
LGBT).33 These groups are particularly appealing to tourism suppliers for a number
of reasons. Often they travel in small groups on very specific itineraries, so they see
the planning and knowledge benefits of using a travel agent or specialty tour oper-
ator. They highly value education and skill enhancement, so many of these travelers
prefer to hire the services of guides. They frequently travel during shoulder or off-
season periods, providing revenue when businesses need it the most. Because their spe-
cial interest is central to their lives, they typically spend above-average amounts on
their trips. Take a look at Table 2.8 for a sampling of some typical special-interest trips
often taken with tour groups. Have you ever taken an SIT trip? One of the larger and
faster-growing special-interest groups of travelers is sports tourism visitors, so we will
take a closer look at this group.
Rather than traveling for rest and relaxation, more and more of the world’s pop-
ulation is traveling for sports-related reasons. Sports tourism has exploded in the last
10 years and is now seen as a major form of SIT. Sports tourism is “travel away from
home to play sport, watch sport, or to visit a sport attraction including both compet-
itive and noncompetitive activities.” (p. 2)34 Think of the vast array of travel that is
included in this definition. Sport team members traveling to out-of-town tournaments
are included; booster and alumni clubs trekking to “bowl” games are included; golf
fans traveling to the British Open are included; a snowboard/ski club traveling to the
Rockies for spring break is included!
Sports tourism is not a new phenomenon. The first Olympic Games occurred
nearly 3,000 years ago. In 1852, a New England railroad company sponsored the
Harvard–Yale crew competition in part so ridership would increase dramatically. The
Northern Pacific Railroad developed the Sun Valley ski resort to generate passengers
during the company’s slow season! As sport participation, spectatorship, and team
Table 2.8 Examples of Special-Interest Trips

Archeological Bird watching
Culinary Culture
Dark Ecotourism
Educational Genealogical
Heritage Medical
Shopping Sports
Volunteer Winery
Adventure LGBT
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Table 2.9 Types of Sport Tourists

A. Outdoor/Nature Sport Tourists—Usually must travel substantial distance to
participate in chosen sport, as many sports are dependent on a natural resource
(e.g., a mountain, a river, a wilderness area). Most of these sports are nonteam
and noncompetitive, but some require substantial skill. Frequently, participants
return to the same destination many times throughout the year.
B. Resort Sport Tourists—Travel typically to highly developed luxury resorts to
participate in such sports as golf and tennis. Some skiers also fall in this
category.
C. Amateur Team Sport Tourists—Travel to participate in a team sport or travel to
watch, coach, or support team members. Travel is usually to urban or suburban
locations.
D. Athletic Spectators—Most often travel with group of friends or family members.
Travel is to high-profile events (e.g., NASCAR race, Olympic Games) or to
scheduled professional or high-profile sport team game.
Source: Based on Weed, Mike, and Bull, Chris (2004). Sports tourism: Participants, policy and providers.
Oxford: Elsevier, Butterworth-Heinemann.
affiliations have increased with the world’s increased affluence and health conscious-
ness, sports tourism has exploded as a segment of the tourism market.
Sports tourists are primarily of two types, participatory sport tourists and specta-
tor sport tourists, and these two types can be further grouped (see Table 2.9). Partici-
patory sport tourists tend to be physically active, college educated, relatively affluent,
and young (18–44 years old). This type of traveler also tends to participate in more
than one activity; for example, a skier by winter may be a golfer by summer.
However, even the least physically active among us can be a sport tourist. Mil-
lions upon millions of travelers worldwide are following “their team” or their favorite
athlete, and they spend billions for tourism and other services. U.S. Travel estimates
that nearly 40% of U.S. adults are sport event travelers, and the percentage in the
industrialized world is likely to be high as well.35 Many of these trips are families trav-
eling to watch a family member compete in a sporting event, so sports tourism is now a
major component of family travel. Sport event travel is about evenly split between pro-
fessional and amateur sporting events, and summer is the peak season for such travel,
although autumn is also a popular sports tourism season. Many cities, states/provinces,
and even countries have specially designated sports commissions whose primary role is
to attract sports tourism events.
Delivering High-Quality Service

Simply identifying and attracting targeted customers is not enough. Tourism organi-
zations must then meet customer expectations by satisfying their wants and needs.
Every component of the tourism industry is service oriented. Therefore, providing con-
sistently high-quality service is the key to establishing and maintaining a successful
operation.
Because the tourism market has become more competitive, service quality has
become critical for tourism suppliers. It is no longer good enough simply to provide
today’s demanding travelers with adequate service. Travelers now expect consistency
in service, if not superior service. Delivery of superior service requires understanding
travelers’ needs and expectations. We will talk about the specific knowledge and skills
needed to deliver service quality in Chapter 3.
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Summary
We continue our journey through the dynamic world of tour- common wants and needs. A segment can then be seen
ism by starting at the center of the tourism model, where we as a distinct target that can be served with its own
focus on the millions of people who travel away from home unique mix of services, prices, locations, times, and pro-
each day. Because it is impossible to serve all of their wants motional activities. When customer wants and needs are
and needs, we learned more about these travelers, their properly identified and customer expectations are met,
reasons for travel, and how we can meet their needs. As we travelers will often tell others about their experiences
learned more about these travelers, we could begin segment- and return.
ing them into groups based on some similar characteristics. Providing service that, at a minimum, results in sat-
Common approaches to segmenting markets include isfaction and strives truly to delight customers should be
classifying consumers based on geographic, demographic, the goal of all tourism organizations. Remember, tourism
psychographic, and product-related characteristics. There is a business dependent on human relations and shared
are several very large market segments such as busi- experiences. People like to be served and feel that they
ness and professional, incentive, SMERF, mature, and are welcome, that their business is important, and that
special-interest travelers that are particularly important to service providers care about their experiences. By iden-
the future of the tourism industry. tifying the specific needs of individuals and groups of
Segmentation and target marketing are used to guests and visitors, it is possible to meet and exceed their
focus marketing efforts on groups of individuals with expectations.
You Decide
Event tourism ranging from art shows and music festivals Many of these Sturgis copycat rallies were promoted
to athletic tournaments and food fairs are becoming a large because the economic benefits could be enormous, but there
and growing travel industry entertainment component. are other impacts to be considered. Just think about the
Communities that host these events have been, for the thundering sounds and raucous partying that occur as thou-
most part, receptive because of their apparent economic sands of motorcyclists descend on these many annual gath-
benefits. These events provide a variety of leisure oppor- erings. Motorcycle rally participants are a far cry from the
tunities for participants, as well as needed traffic for local genteel crowds that come together for a spring flower show!
tourism service providers. In fact, many of these events are Whereas members of the tourism community, from
intentionally scheduled during traditionally slow tourism lodging facilities and restaurants to attractions and retailers,
periods to provide an extra boost to the local economy. who benefit directly from increased expenditures are sup-
Although local residents may greet special events porters, local governmental agencies from law enforcement
enthusiastically, one event, the motorcycle rally, seems to to sanitation are not always quite as enthusiastic. They
polarize communities along emotional lines: equally vocal are the ones who must provide extra services at additional
supporters and detractors. Why do these events generate costs, which may not be offset by increased tax receipts.
so much local interest? A quick look at their history gives a And although local residents may enjoy many of the event
good indication as to why. activities, they may resent the noise, wild party antics, and
The first recognized motorcycle rally was held in other inconveniences created by a sudden influx of revelers.
Sturgis, South Dakota, in 1940 and attracted about 200 Governmental officials and local tourism service suppli-
people. However, today, this sleepy little mountain town ers face a variety of issues when making decisions regarding
“welcomes” over 200,000 rally enthusiasts to this event endorsing or encouraging the creation and/or continuance
each year. The success of the Sturgis rally has spawned of these events. They must weigh the potential economic
other rallies in places such as Bainbridge, Georgia; benefits against the costs and inconveniences they create. If
Hollister, California; Daytona Beach, Florida; and Laconia, your hometown was presented with the opportunity to host
New Hampshire. a motorcycle rally, what would you recommend?
Net Tour
To get you started on exploring Internet links for this www.incentivefederation.org
chapter, see www.aarp.org/travel
www.nbta.org www.lonelyplanet.com
www.sric-bi.com www.tripadvisor.com
www.BestTripChoices.com www.ecotourism.org
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1. What do we mean when we refer to segmenting a market? 7. Why are special-interest travelers becoming more
2. Why do we segment the tourism market? important to tourism service suppliers?
3. Identify and provide examples of the common 8. Why are incentive travelers so important to the future
approaches to segmenting the tourism market. of the tourism industry?
4. Why are business travelers so important to the tour- 9. Why are special-interest travelers so important to the
ism industry? future of the tourism industry?
5. How do SMERF groups complement the business 10. Why should the topic of customer service be import-
travel market? ant to tourism service suppliers?
6. Why are mature travelers so important to the future
of the tourism industry?

1. Collect several advertisements for tourism-related What types of service suppliers do you select to meet
goods or services. Based on the content of these adver- these needs?
tisements, describe the customer segment you believe is 5. Based on what you know about market segmentation,
being targeted. help Peter and Jochen by preparing a list describing some
2. Browse the Internet and find three tourism supplier home of the common characteristics of the people who might be
pages. Which segments do you think each is targeting potential customers for their Segway city tour business.
based on the information provided on the home pages? 6. Your family is planning a summer holiday and des-
3. Interview the head of a tourism service supplier’s mar- ignated you as the information gatherer. How much
keting or sales department to find out the segments information would you collect? What types of infor-
targeted and the relative importance of each of these mation would you collect? What sources of informa-
segments to overall profitability. tion would you consult?
4. Arrange an interview with a member of one of the spe- 7. Chinese New Year, also known as Spring Festival in
cialized tourist segments introduced in this chapter. China, is a popular travel occasion. It has become a
Develop a profile of this segment’s travel behaviors. festival that is increasingly being celebrated outside of
Examples of questions you might ask include: Where China as well. What would be the motivation factors
do you travel? How frequently do you travel? When of Chinese New Year travel? Can you classify the moti-
do you travel, how do you travel? What do you enjoy vation factors based on one of the tourist motivation
doing when you travel? With whom do you travel? models introduced in this chapter?
Glossary
Allocentrics See Venturers. Elastic demand A change in the quantity of goods or ser-
Business travel Travel-related activities associated with vices used in a proportion that is greater than changes
commerce and industry. in prices.
Consumer behavior The study of consumer character- Geographic segmentation Dividing consumer mar-
istics and the processes involved when individuals or kets along different geographical boundaries such as
groups select, purchase, and use goods, services, or nations, states, and communities.
experiences to satisfy wants and needs. Heterogeneous Having differing characteristics and
Demographics Characteristics used to classify consumers needs.
on the basis of criteria such as age, education, income, Homogeneous Having similar characteristics and needs.
gender, and occupation. Incentive tour operators Tour operators who specialize in
Demographic segmentation Dividing consumer mar- organizing, promoting, and conducting incentive tours.
kets based on demographic data such as age, education, Incentive travel Motivational programs designed to cre-
income, gender, religion, race, nationality, and occupation. ate competition, with the winner(s) receiving travel
Dependables Travelers who seek the comforts of familiar awards.
surroundings. Induced information Information and messaging that is
Disposable income Household income after paying taxes controlled by the supplier.
that is available for personal use. Inelastic demand A change in the quantity of goods or
Distressed inventory Tourism services that have not been services used that is not in direct proportion to changes
sold as the date of use approaches. in prices.
M02_COOK1670_06_GE_C02.indd 77 09/06/17 10:45 AM

Lifestyle A mode of living that is identified by how people Psychographic segmentation Dividing consumer markets
spend their time (activities), what they consider import- into groups based on lifestyle and personality profiles.
ant in their environment (interests), and what they think SMERF An acronym for the market comprising social,
of themselves and the world around them (opinions). military, educational, religious, and fraternal groups.
Market segmentation Dividing a broad market into Special-interest tourism (SIT) Tourism undertaken for a
smaller and distinct groups of buyers—each group with distinct and specific personal reason.
similar needs, characteristics, or behaviors. Sports tourism visitors People who travel to participate
Mature travelers People aged 55 and older; also called in or view sporting activities.
“senior citizens.” Target market (target segment) A group of people sharing
Optimal arousal theory Level of arousal or level of common characteristics that an organization attempts
activity at which different segments of tourists feel most to serve by designing strategies to meet the group’s spe-
comfortable. cific needs.
Product-related segmentation Dividing consumer mar- Teleconferencing A meeting that allows people to remain
kets according to characteristics such as the amount in several locations but come together and communi-
of use or benefits consumers expect to derive from the cate through a combination of television and telephone
service. connections.
Psychocentrics See Dependables. Upgrades Receiving a better class of service or facility
Psychographics Consumer psychological characteristics than was paid for, such as moving from coach to first
that can be quantified, including lifestyle and personal- class.
ity information. Venturers Travelers who seek adventure.
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Foundation. 30. Hartman, J. (2007). The senior travel market: Do’s
22. Rogers, B. (2007). SMERF: A multi-billion dollar and don’ts. Journal of Quality Assurance, 8(2), 67–81.
market worth pursuing. HSMAI Marketing Review, 31. Kazeminia, A., Del Chiappa, G., and Jafari, J. (2015).
24(2), 22–26. Seniors’ travel constraints and their coping mecha-
23. Fox, M. (2009). In the year 2040—1.3 billion senior nisms. Journal of Travel Research, 54(1), 80–93.
citizens. Retrieved on February 21, 2012. Available 32. Brotherton, B., and Himmetoglu, B. (1997). Beyond
at: http://www.reuters.com/article/2009/07/20/ destinations—special interest tourism. Anatolia: An
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24. United Nations, Department of Economic and Social Research, 8(3), 11–30.
Affairs (2015). The World Population Prospects: 33. Trauer, B. (2006). Conceptualizing special interest
2015 Revision. United Nations, New York, NY. tourism—frameworks for analysis. Tourism Man-
25. 2004 Domestic outlook for travel and tourism. agement, 27, 183–200.
Proceedings of the Travel Industry Association of 34. Delpy-Neirotti, L. (2003). An introduction to sport
America’s Twenty-ninth Annual Marketing Outlook and adventure tourism. In Simon Hudson, ed., Sport
Forum. Austin, TX, October 20–22, 2003. and Adventure Tourism (pp. 1–25). New York:
26. Conaway, F. (1991, May). Targeting mature Haworth Press.
markets: Segmenting will unleash mature market 35. Getz, D. (2003). Sport event tourism: Planning,
potential. Public Relations Journal, 47(5), 18–19. development, and marketing. In Simon Hudson, ed.,
27. Amadeus North America (2014, September). Sport and Adventure Tourism (pp. 49–88). New
Active Senior Whitepaper, Trending with Seniors, York: Haworth Press.
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CHAPTER 3
Delivering Quality Tourism Services
We have 50,000 moments of truth out there every day.

—Jan Carlzon, President, Scandinavian Airlines
LEARNING OBJECTIVES
1. Describe how services are different from goods. 6. Explain how a comparison of service expecta-
2. Explain how a service is like a play. tions with the actual service encounter can give
rise to three possible satisfaction levels.
3. Explain the different factors that affect a guest’s
service experience. 7. Explain what tourism managers can do to ensure
high-quality service.
4. Explain how a person develops expectations of a
service and how tourism organizations can meet 8. Explain how negative “breaks from the script”
or exceed these expectations. should be handled in order to “turn a frown
upside down” and create guest loyalty.
5. Name and describe the five service quality
dimensions. 9. List the important aspects of a service guarantee.
CHAPTER OUTLINE
All’s Well That Ends Well? Anticipating and Meeting Guest Needs
Introduction Building Service Teams
Service Mistakes
Quality Mistakes Happen
Defining Quality Be a Can-Do Problem Solver
Quality Differences
Service Guarantees
Service Encounters
Summary
Service Quality Model
You Decide
Quality and Customer Satisfaction
Net Tour
Human Resources: The Key to High-Quality
Service Discussion Questions
Bringing Employees into the Organization Applying the Concepts
Working with Organized Labor Glossary
Setting the Stage for Peak Performance
Achieving and Maintaining Peak Performance References
80
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Chapter 3 ▸ Delivering Quality Tourism Services 81
All’s Well That Ends Well?

After a short night’s sleep, six hours of air terminal waits and airline flights, and a hectic
taxi ride, Jamal and Kayla Johnson were ready for the peace and quiet of their hotel room.
However, when they arrived at the Town Center Hotel to begin their vacation in Vancou-
ver, things got off to a bad start. Although they had received an email confirmation of their
room reservation two months ago, the Town Center was completely full for that night.
The Johnsons were furious! They showed Mike an email copy of their reservation
confirmation. Mike apologized sincerely, admitted the mistake, and explained that sev-
eral guests had stayed over unexpectedly, so there were no rooms available. Mike next
picked up the phone to find the Johnsons suitable accommodations nearby. Although
the city was virtually full due to a major conference in town, Mike was able to obtain
a suite for the Johnsons at a hotel nearby and explained that the Town Center Hotel
would pay for the suite to compensate the Johnsons for their trouble.
To keep their inconvenience to a minimum, Mike also arranged for a taxi to take
the Johnsons to their new hotel. To ensure that friends and relatives could contact
them if need be, they would be listed in the Town Center database so any calls could
be forwarded to their new hotel.
The next day, a room at the Town Center was available for the Johnsons. Mike
welcomed them as they returned the next afternoon and again apologized for the incon-
venience. As they were escorted to their room by a bellman, Mike thought, “I’ll call the
Johnsons in about an hour just to check and make sure they are settled in and satisfied.”
It was an unfortunate situation, but he was certain the Johnsons would forgive the error
and give the Town Center another chance the next time they came to Vancouver.
Welcome snacks and a note from the hotel staff add a personal touch to the lodging
experience. Photo by Cathy Hsu
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Introduction
As you learned in Chapter 1, services are the fastest-growing industry in the world,
and tourism is the fastest-growing segment in the service industry. Most of us easily
recognize and know where to purchase goods such as smartphones, textbooks, and
toothpaste. However, in the tourism industry, we deal mainly with services, not goods.
We may find it difficult at times to describe these services, know where to purchase
them, or even make clear distinctions between services and goods. Even these distinc-
tions may at times become blurred because some tourism organizations are involved
primarily in the delivery of services, whereas others deliver both services and goods.
These differences can be seen in the goods/services continuum shown in Figure 3.1.
At one end of the goods/services continuum, you will find organizations such as travel
agencies and convention and visitors bureaus that primarily provide services. In the
middle, you will find organizations such as restaurants that provide both goods and
services. On the opposite end, you will find organizations such as retail shops that pro-
vide primarily goods and some services.
But wait a minute. Didn’t we just say that tourism is a service? Yes, but services are
often accompanied by something called a facilitating good. Facilitating goods are tangible
items that support or accompany the service being provided. For example, if you were to
call the Israel Government Tourist Office located in Chicago, Illinois, and ask questions
about the types of documentation needed for travel into Israel, the answers you received
would be a service. If you requested brochures, then you would be receiving both a ser-
vice and a facilitating good. It is now becoming almost an expectation for many travelers
to receive a complimentary breakfast or WiFi as part of their accommodations.
Services provided by these and other tourism organizations are called “intangibles”
because they cannot be placed in inventories and then pulled out of warehouses or off of
shelves like a can of beans or a flash drive. Services are not only intangible but also highly
perishable. Tourism services perish or lose their value with the passage of time just like
fresh fruits and vegetables that eventually spoil and must be thrown away. Think about the
airplane that has just left the gate, the cruise ship that has just been pushed away from the
dock, or the fireworks show that marks the end of a concert. In each of these situations,
the opportunity to generate revenue from the seat, cabin, or concert has disappeared forever.
Services are also different from goods because they are actions performed by one
person on behalf of another. Sometimes we are merely the recipients of services, but at
other times, we become actively involved in the service delivery process. For example,
once we call a travel agency to book a flight, we are through with active participa-
tion. The travel agent finds the best route and the best flight and reserves seats for us.
FIGURE 3.1
High
Goods/services continuum. Travel

agency
Amount of service
Cruise
ship
Souvenir
shop
Low
Low High
Amount of facilitating goods
Service Goods
Pure
with facilitating with little
service
goods service
M03_COOK1670_06_GE_C03.indd 82 13/05/17 10:29 AM

However, some tourism organizations may actively involve customers in the service
delivery process: Airline passengers check in via self-service kiosks, use their mobile
devices as boarding passes, purchase movies and meals on board; hotels allow guests
to check in electronically or check out over the telephone or through the in-room tele-
vision or their own mobile devices without ever going to the front desk; and restau-
rants invite guests to serve themselves at salad bars. A wide variety of mobile devices
also allow passengers to check on current flight status, find frequent-flier mileage, and
confirm upgrades without ever having any human contact in person or on the phone.
Quality
In the case of tourism, quality and hospitality are two words that are inseparable.
When thinking about a high-quality experience in any tourism service, whether a
restaurant meal, a hotel stay, an airline flight, or a guided tour, most people think of
friendly, helpful personnel who treat them with concern and kindness. The concept of
quality with its important hospitality component is the focus of this chapter.
As the tourism marketplace becomes more competitive, quality becomes more crucial
for continued financial success. Consumers are more critical and demanding today than
they have ever been. Simply providing guests average service is not good enough in this com-
petitive environment. In a market full of tourism suppliers, a company needs to offer more
and better service because guests can always take their business elsewhere. For example, for
hotel operators, “Service quality and customer satisfaction have gradually been recognized
as key factors used to gain competitive advantage and customer retention” (p. 349).1
“Virtually every survey of restaurant guests tells a similar story. If a property
[hotel or a restaurant] has great service, the guests will come back even if the food is
mediocre. Reverse the situation and the opposite occurs: Great food with bad service,
and guests will most likely not return. The bottom line? Great service is a necessity”
(p. 34).2 Therefore, to be successful, every organization in the tourism industry needs
to understand what quality means to prospective customers and strive to improve the
service quality offered so customers keep coming back again and again.
Take a moment to think back on a memorable tourism service experience that you
would label as very high in quality. What were the circumstances? Why is this encoun-
ter more memorable than others? What aspects of it make you recall it as high quality?
As we have already suggested, different travelers have different needs and wants.
What is “high quality” to one may be perceived as entirely unacceptable to another.
Think of Mexican food. Some restaurant patrons believe that high-quality Mexican
food must make you perspire and set your tongue on fire. Many other fans of South
of the Border Fare like their food much less combustible and prefer milder versions of
Mexican classics. Those red chili burritos may be delicious to you, but to a friend born
and raised in Santa Fe, New Mexico, they may seem bland and tasteless. Likewise, a
Mexican tourist visiting a “Mexican” restaurant in Canada might well be surprised
and disappointed by what they are served. So, quality is a complex concept, difficult to
define in terms on which all can agree.
Defining Quality
As Figure 3.2 shows, quality can have several definitions. Most of us probably think of
quality as synonymous with “excellence.” Technically, from a management and market-
ing perspective, quality represents a form of measurement like a thermometer or ruler.
Products have some amount of quality: We talk of high quality or bad quality, good
quality or poor quality. Quality is both objective and subjective in nature. Objectively,
we can measure some aspects of quality because they involve objective, or measurable,
amounts of certain attributes or ingredients. A spacious hotel room would be rated as
higher quality than a smaller one simply based on the measurable dimensions of the two
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FIGURE 3.2
1. Quality as...
Quality definitions.
2. Amount of quality... High
Low
3. Subjective perceptions of quality...
4. Value based: perceived price

relative to quality...
rooms. Likewise, a flight that takes off on time and arrives ahead of schedule would be
thought of as higher in quality than a delayed flight, based on the quantifiable aspect of
time as measured in minutes.3 However, this measurable concept of quality is not the
complete picture of quality. Much of quality is subjective—in the “eye of the beholder.”
In addition to these objective versus subjective concepts of quality is the idea of value.
The value-based definition of quality incorporates the notion of a trade-off: the trade-off
between service attributes and service performance with the price paid for the quality
received. Even if you are an infrequent flier, you no doubt have recognized the objective
quality differences between first or business class and coach. In first class, passengers sit in
leather-covered, spacious “lounger”-style seats with more leg room between the rows. In
addition, they receive bountiful amounts of food and beverages served on fine china. But
do you believe the quality received in first class is worth the difference in price?
First- and business-class airfares are often three to five times as expensive as coach-class
fares, yet everyone takes off and arrives at the exact same time in the exact same place. In the
case of air travel, the value-based concept of quality therefore involves a person’s perception
of the best use of his or her travel and time budget. For example, frequent business travelers
value the quiet time and space for relaxing or working that is provided in first-class seating.
The values of leisure travelers vary. If you believe that “getting there is half the fun,” you
may decide to spend the extra money to enjoy the benefits of first-class travel. But if you
believe that the plane ride is simply transportation to be endured in order to get to where the
fun starts, you are more likely to save those travel dollars to spend at your destination.
Why is quality so important? Higher quality can result in three important benefits
for companies. First, when consumers perceive a company’s product as superior in
quality, they are willing to pay higher prices, which can translate into higher profits.
Second, superior quality can lead to increased market share.4 Third, superior qual-
ity can generate truly brand-loyal customers. These are customers who will accept no
substitutes, do not respond to competitors’ promotions, and pass along positive word-
of-mouth messages, enhancing a company’s reputation even further.
Similar to manufacturing companies, service providers should also pay attention
to defection management (or customer retention) as good service quality could lead to
customer satisfaction and retention. The simple act of retaining customers contributes
to increased profits over the years.5
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FYI TIPS
One commonly used but often misun- they may fail to recognize the origin of amount (if any) a guest leaves is often
derstood measure of service quality is the term tips. TIPS is actually an acro- a pointed comment on the service
tipping. Although many employees rely nym for the phrase “To Insure Prompt received.
on tips to supplement their income, Service.” Tips are not automatic; the
Can you think of a local tourism provider in your area that has a superior quality
reputation? Keep this business in mind throughout the rest of this chapter and see
whether the ideas we present explain why this business is such a success.
Quality Differences
Quality in services, including tourism services, is more difficult to define and measure
than in hard goods. When manufacturers design and build hard goods, they engineer
in a specified quality level. In some instances, the specification standards are very high,
as in the case of BMW automobiles, but in most cases, manufacturers focus on the
value component of quality. How much quality is the customer willing to pay for?
Hyundai is perceived by most consumers as a high-quality car because the value trade-
off is positive. For a modest price, the car buyer receives a comfortable, stylish, and
reliable automobile. Both BMW and Hyundai design a car with certain specifications
that are then met in virtually every model that rolls off the assembly line.
Unfortunately, we do not manufacture services. Remember, services are actions per-
formed on behalf of a customer. In most cases, human beings perform at least part of the
actions, and therefore consistency in actions is much lower than if a machine performed
the actions over and over. Machines can be programmed to repeat the same action thou-
sands of times. People are far less consistent than machines. In addition, tourism services
frequently necessitate the input and participation of the consumers themselves. For exam-
ple, when you go hiking, you are intimately involved in the “production” of that tourism
service. Things you control and don’t control, from your skill and decisions about which
trails to hike as well as the weather and your companions, play a large part in determin-
ing how much enjoyment and “quality” you perceive during your trip.
Service Encounters
The tourism industry is one of close customer contact, and every interaction between a service
employee and a customer becomes a service encounter.6 Both tourism customers and tour-
ism supplier personnel bring to each encounter expectations about what will occur during
the interaction. As customers and suppliers, we learn what to expect in tourism encounters
from past experiences and from the experiences of others that we observe. In a sense, we all
perform an important role in a service encounter “play.” As customers or suppliers, we both
have role expectations of each other that dictate appropriate behavior for each party.
In Table 3.1 and Figure 3.3, we extend this theater metaphor for services a little
further. Most tourism services have a backstage area referred to as “back-of-the-
house” that the audience (guests) does not usually see. Managers of these services must
be careful in their choices of props and sets onstage, those service areas guests expe-
rience referred to as “front-of-the-house.” Services even have two types of employ-
ees, backstage hands, those who work behind the scenes to ensure a smooth running
“show,” and front stage actors, those employees who directly interact with guests.
M03_COOK1670_06_GE_C03.indd 85 13/05/17 10:29 AM

Table 3.1 Services as Theater: Everyone Has a Role

Services Terminology Theater Terminology
Employees Cast
Customers Audience
Physical facilities The set
Uniforms Costumes
Front stage Those areas that the audience sees
Backstage Those areas that the audience seldom sees
Manager Director
Service encounter Performance
Personal front/“character” Face/role that cast assumes when front stage (allowed
to “break character” when backstage)
Source: Grove, Steven, J., and Fisk, Raymond, P. (1983). The dramaturgy of services exchange: An analytical
framework for services marketing in emerging perspectives on services marketing. In G. Lynn Shostack,
Leonard L. Berry, and Gregory D. Upah, eds. Emerging perspectives on services marketing, (pp. 45–49).
Chicago: American Marketing Association.
Although we can think of service encounters as little plays that involve service
scripts, we all realize that they do not involve a rigid, prerehearsed set of lines. After
all, a stay at Accor brand Motel 6 in the United States or Formula 1 in Europe
is not expected to be as well rehearsed and performed as a Broadway production.
Each encounter will be somewhat similar to but also different in some ways from
every other encounter, depending on the individual customer and the individual ser-
vice employee. These service encounters are frequently called “moments of truth”
because it is through these encounters that customers derive their quality impres-
sions about a service.7
Take a careful look at Figure 3.3 while thinking about your favorite full-service
restaurant. What are the backstage parts of the service theater, such as the kitchen, that
guests do not usually see but that are important in determining the experience any guest
will have? What “staged” areas of the restaurant, from the parking lot to the “powder
room,” will the guest encounter that can affect how she perceives the restaurant? Which
restaurant employee “actors” is she likely to see and/or interact with whose appearances
and actions can influence her quality perception? Finally, think about how other mem-
bers of the audience can influence the guest’s enjoyment of her meal. Research has shown
that customers do judge their dining experiences in three different areas that align with
this concept of theater: functional, mechanic, and humanistic, which have all proven to
be important influences to determining service quality.8
If she is dining with her fiancé, she is probably hoping for a quiet, intimate dinner
experience. If the hostess seats a family with three overtired children at the next table,
our guest and her date are likely to have a lower-quality restaurant encounter than
they had originally hoped for.
This preliminary discussion of service quality and service encounters should help
you realize that quality assurance in tourism services is quite a challenge. Management
of all the factors that affect service quality requires skilled planning, organizing, staff-
ing, directing, and juggling. What makes quality assurance in tourism services even
more challenging is that travelers’ overall satisfaction of a trip is influenced by services
provided by multiple tourism suppliers. If any one of the suppliers’ performance
is not up to par with customer expectation, the overall trip experience would be
less than satisfactory. For destinations and tour operators, how to make sure that
M03_COOK1670_06_GE_C03.indd 86 13/05/17 10:29 AM

FIGURE 3.3 The service "theater"

The service encounter as
theater. Based on Ideas
originally discussed in Guest A
Tangeard, E., Bateson, J., Sets and props
Lovelock, C., and Eiglier, of tourism service
P. (1981). Marketing of ser-
vices: New insights from
consumers and managers.
Report No. 80–104. Cam-
bridge, MA.
Behind the scenes
Guest B
• Operations,
• Systems, and
• Backstage
"hands"
Employees front stage
actors having
direct contact with
guests and visitors
Backstage Front stage
Symbols
Perception
Interaction
services provided by various suppliers are consistent and they work together seam-
lessly is a major challenge. Thus, to improve service delivery every part of the process
must be measured because what can be measured can be improved!
Service Quality Model

The diagram in Figure 3.4 begins with the factors that lead to quality expectations of
a service.9 When you go to a water park for the first time, do you have some idea of
what benefits you will receive from that particular attraction? Of course you do. And
how did you develop these service expectations? You may have talked with friends
who had been to the water park (word-of-mouth communications). You may be going
to the water park because you believe it will be fun and provide relief from the heat
(personal needs). You may have been to other water parks and therefore have a general
impression of what water parks are like (past experience). And, finally, you may have
M03_COOK1670_06_GE_C03.indd 87 13/05/17 10:29 AM

How service expectations are formed...
Personal
Past Marketing
Word of mouth needs and
experience communications
desires
Factors that put

quality in service
s
Re
le
l
ib
ia
ng
b
ili
Expected service
Ta
ty
Perceived
Empathy
Compared to… service Satisfaction level
quality
Re
s
Perceived service
po
cen
ns
ra
ive
su
ne
As
ss
How satisfaction is determined . . .
FIGURE 3.4
Service quality model. Source: Adapted from Zeithaml, V. A., Bitner, M. J., and Gremler, D. D. (2009). Services marketing: Integrating cus-
tomer focus across the firm (5th ed.). Boston: McGraw-Hill Irwin.
seen commercials on TV or social media posts giving you an impression of the park
(marketing communications). These factors combine and lead to expectations about
the type of experience you will have during this tourism service encounter.
Once you enter the park, what elements of the experience will be important in
shaping your perception of the quality of this park? People generally consider five
dimensions when judging the quality of a service. Each of these five dimension can be
measured through SERVQUAL, a comprehensive multi-item scale that reliably mea-
sures consumer service expectations and perceptions; giving service providers the data
they need track and improve their service offerings.10,11 In Figure 3.4, these dimensions
link to the expected and perceived service boxes.
Tangibles are those physical aspects of the service that we can see and with
which we interact—the physical appearance of the facilities, the equipment we use
or that service employees use for us, the appearance and uniforms of the employees,
and any signs or other communications materials that are provided. These physi-
cal attributes of the service encounter are often referred to as the servicescape. For
instance, in our water park example, you may be provided with a brochure that
includes a map and information about support facilities such as lockers and places
to buy a snack or soft drink.
Reliability refers to the ability of service personnel to perform the promised ser-
vice accurately and consistently. For example, if the water park provides you with the
opportunity to learn how to snorkel, do the instructors teach you well enough so that
you can snorkel without drinking half of the pool? Are employees at the snack bars
just as friendly and helpful as those at the locker rooms?
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Tangible aspects of a hotel give customers an indication of the level of service

provided. Courtesy of George Mitchell/Kowloon Shangri-La, Hong Kong
Responsiveness involves service employees’ willingness to help customers and their

promptness in providing service. You expect snack bar personnel to wait on you as
soon as possible and to provide your food without unnecessary delay.
Assurance is a catch-all quality dimension that involves the faith we have in the
service personnel. Do they seem well trained? Are they knowledgeable about the park
as a whole? Do they seem trustworthy? After all, lifeguards at a water park literally
have guests’ lives in their hands.
TOURISM IN ACTION
CAB DRIVERS
Many cities are realizing that visitors begin their journey to satisfaction or dissatisfaction immediately on arrival at
the air terminal. Who, then, represents the first “ambassador” of a city? The cab drivers! Singapore has had spe-
cial educational and licensing programs for cab drivers for many years. The drivers must learn guest relations skills
and then pass rigorous tests to become officially licensed cab drivers. These skills include proficiency in English,
safety, and knowledge of a wide variety of locations.
In the never-ending quest toward continual improvement, the taxicab industry in Singapore has put itself to
the test by becoming part of the country’s National Customer Satisfaction Index. Based on the survey results com-
piled to produce this index, taxicab companies can view their ratings and see where they can improve. National
Trades Union Congress secretary-general Lim Swee Say noted that “we must never neglect that improving quality
service is a daily event, it’s a daily challenge.”
Over $1.7 million was raised to fund the first year of this service improvement initiative, which included addi-
tional training for 5,000 taxicab drivers, mystery shoppers, and training courses on the finer points of service. The
goal is to train 5,000 drivers each year. Cities from London to New York are keeping an eye on these programs with
a view toward improving their services.
Sources: Based on Kotler, Philip, Haidera, Donald, H., and Rein, Irving. (1993). Marketing places. New York: Free Press;
Almenora, Maria. (2008, February 23). Taxi industry aims to up service standards. The Straits Times (Singapore).
M03_COOK1670_06_GE_C03.indd 89 13/05/17 10:29 AM

Finally, empathy is the “warm, fuzzy” piece of service quality, the part of quality that
is heartfelt. Empathy is the quality element that shows that service personnel care about you
and understand your needs and frustrations. It involves setting operating hours for the con-
venience of guests, not management or employees. It includes caring about waiting times
and fairness in waiting line systems. For example, our hypothetical water park’s manage-
ment realizes that many people will be waiting in lines in their bare feet on hot pavement.
For guest comfort, they have located shade trees and shade umbrellas over the line areas so
that you can jump from one shady area to the next while waiting your turn.
Empathy is also the element of a service that makes us feel special, when service pro-
viders recognize that we are individuals. It is the care and individualized attention that is
(or is not) provided to us. When a water park “host” suggests that you might need to reap-
ply your sunscreen because your skin is beginning to turn pink, he is showing empathy.
Quality and Customer Satisfaction

How are expectations of the service received and service quality factors linked? Figure 3.4
shows that customers compare their prior expectations of the service to their “during
service” judgments of the five service quality elements—their overall quality percep-
tion of “actual quality.” The result of this comparison of expected quality to actual
perceived quality influences the customer’s level of satisfaction. Figure 3.5 shows the
three possible satisfaction outcomes customers can have. If a customer perceives that
the quality of the service actually received (after-the-fact perceptions) was better than
expected, the guest will be pleasantly surprised and highly satisfied. On the other hand,
if the guest perceives the service actually delivered to have fallen short of before-the-fact
expectations, the guest will be unpleasantly surprised and therefore dissatisfied.12
A third quality comparison is also possible. The third possible outcome is that
expectations are met exactly. If the service quality received is almost identical to expec-
tations, the guest will likely be “just” satisfied. The guest received the service quality
expected and so is neither pleasantly nor unpleasantly surprised.
If meeting a customer’s expectations yields satisfaction, organizations should deter-
mine exactly what customers expect and then deliver it, right? Not usually. In many ser-
vices, such as most tourism services, there are major added benefits to delivering more
than is expected so that the customers are delighted, not simply satisfied. As some airlines
discovered, simply relying on statements that showed customer satisfaction can lead to
trouble. Airline customers indicated they were satisfied with the present level of service,
but they were eager to switch to carriers that provided improved quality service.13
Studies have found that customers who are highly satisfied become more valuable
customers. First, delighted customers tend to pass along many more positive word-of-
mouth messages than do customers who are just satisfied. Second, these highly satisfied
customers are also more likely to purchase again and spend more in the future than are
customers whose expectations were met but not exceeded. Finally, highly satisfied cus-
tomers are unlikely to pay attention to competitors’ advertising and promotional offers.
Customers who are merely satisfied are more willing to try out a competitor’s service to
see whether it might just be better than the service they have been using.14
FIGURE 3.5
Satisfaction equations. Actual service > expectations.......................................
Actual service = expectations.......................................
Actual service < expectations.......................................
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FYI EMPATHY
Banyan Tree Bintan, a luxury resort extra mile! Arriving guests are given such, overnight guests are promptly
located in Bintan Island, Indone- a red-carpet welcome and offered greeted by their first names and as
sia, provides some examples of the complimentary fresh fruit juices these guests enter the signature Saf-
empathy–quality dimension. For Ban- during check-in. In fact, all staff are fron Thai restaurant, servers quickly
yan Tree, attention to details is para- purposefully trained to recognize identify and usher them to their regu-
mount and they are willing to go the guests and their preferences. As lar, preferred seatings.
Building and managing a profitable service organization is no easy task. It

requires paying close attention to every aspect of the business from the customer
to the employee. It has been suggested that this task can be made more manage-
able by considering a service business to be a service-profit chain of equal and closely
interrelated links. “The service-profit chain establishes relationships between prof-
itability, customer loyalty, and employee satisfaction, loyalty and productivity”
(p. 120).15 This chain emphasizes the importance of internal service quality, leading to
employee satisfaction, good external service, customer satisfaction, and ultimately revenue
growth and profitability. How can this information be used to improve service and ensure
that guests are delighted? Keep reading and you will discover the answers to this question.
Human Resources: The Key to High-Quality Service

A wide range of skills from entry-level dishwashers to senior executives are needed in
every service organization. Effectively and efficiently managing these human resources
is the cornerstone of success for every organization from entrepreneurial tour compa-
nies to large multinational lodging chains. As the complexity of human issues and legal
compliance expands each year, the importance of filling and managing the human needs
of organizations will continue to increase. In some settings you may find yourself deal-
ing with unions and employees who may consider that they really work for the union
and not the organization. So understanding some basics of what is involved with man-
aging the human side of service organizations will be invaluable.
Everyone wants to hire a winner and create a “sustainable competitive advan-
tage.” In large organizations, the human resources department is a means to achiev-
ing these goals. In very small firms, this responsibility is usually shared among the
immediate supervisor and other management personnel. Some organizations have even
found it to be cost effective to contract out or “outsource” some of these activities. For
example, many airlines, convention centers, stadiums, and theme parks contract with
outside firms to perform cleaning and security services.
With labor costs exceeding 70% of operating costs in many service organizations,
it is easy to identify and quantify the value of employees in terms of cost. However,
employees are more than just the cost of doing business—they are also organizational
assets that management is obligated to safeguard and develop.16 In fact, as the signif-
icance of the human side of many organizations is being recognized; human resource
departments are being called, human capital departments.
Guest services almost always require active guest involvement. Service organiza-
tions depend on everyone from the front line to the boardroom to deliver customer
satisfaction. Guests will perceive, judge, and value their experiences based on the cul-
mination of dozens, even hundreds, of one-on-one service encounters over the course
of a visit. Although management must always remain focused on price, market share,
and cost savings strategies, it is now more dependent than ever on everyone in the
organization to deliver on its behalf.
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The well-trained Disney character cast members interact with guests, personalizing the
guests’ theme park experience. Disneyland/Alamy
Shaping organizational culture and implementing change are now central to highly
satisfying hospitality experiences. Human resource professionals must become change
agents and employee champions in this process by creating learning organizations ded-
icated to continuous improvement and organizational effectiveness. The demand for
organizational excellence translates into:
• Encouraging employee participation and commitment to delivering value at every level;
• Developing and expanding employee commitment, capacity, and innovation; and
• Creating a workplace environment where everyone is motivated to excel and is
accountable for organizational success.
One of the primary functions of human resource departments in today’s service
environment is to implement best practices through effective recruitment, selection,
training, retention, and team-building programs. These efforts, combined with clear
communication of an organization’s vision and programs designed to generate and
reward desired employee behaviors, create an environment where customer satisfac-
tion can be measured and achieved.
Bringing Employees into the Organization

When new employees report for work the first day, the manner in which their supervisor
and other employees welcome them may have a lasting impact on their future performance.
Orientation or on-boarding is a process designed to help new employees become acquainted
with the organization and understand the expectations the organization and their supervisor
have for them. This process is sometimes referred to as the socialization process. Employees
want to know what is expected of them in the way of performance. In most large organi-
zations, someone from the human resources department will give new employees general
information about the organization, including policies, benefits, and procedures.
In small firms where hiring is sporadic and haphazard during the year, orientation may
be less formal and the supervisor may personally choose to “welcome” new employees or
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may prefer to assign the new employee to experienced, capable employees who will do all
of the orienting including instructing new employees on how to perform the job.
Working with Organized Labor

Labor unions are common in most industrialized countries. Understanding the impor-
tance of these unions and learning to work with them or avoid having to work with
them is critical to every organization whether they are unionized or nonunionized. An
important aspect of human resource management involves employees and employers hav-
ing agreements and understandings about a wide array of matters affecting working con-
ditions and the accomplishment of the organization’s work. Among these, for example,
are how work is to be assigned, how jobs are to be filled, how employees are to be disci-
plined and rewarded, and how disagreements are to be handled. For many employees in
the tourism industry, but especially airlines, gaming, and hotels, these types of questions
and issues are formally developed and administered through a representation system by
which employee representatives meet with employer representatives to resolve issues that
are significant to the interests of both parties. For those organizations that are unionized,
it is a matter of learning how to work productively with the representative union.
Setting the Stage for Peak Performance

Performance management begins during the orientation process of the first few weeks
of employment, which are the most tenuous and susceptible to turnover. Even with
well-written job descriptions and realistic job previews, new employees bring many pre-
conceived notions with them about a job that can be easily shattered as they collide
with on-the-job realities. In addition, new employees may often be subjected to a little
“good-natured” teasing from co-workers as they settle in to daily routines. Too many
services employees are also literally thrown into positions because someone is needed to
get the job done and are left to “sink or swim.” All of this can add to an already stressful
situation that can lead to employee discomfort, withdrawal, and premature turnover.
When the right employees have been hired, comprehensive orientation programs
can help to alleviate these potential new hire stumbling blocks, setting the stage for
successful organizational integration. However, thinking that successful organiza-
tional entry can be achieved simply through orientation is short-sighted, since it is
only the beginning to organizational assimilation and personal development. The
orientation process can be further enhanced through a mentoring system. Assigning
mentors for new employees not only provides them with someone who knows the
inner workings of the organization, but it also co-ops the mentor into ensuring the
successful integration of the new employee, creating a win-win situation.
Achieving and Maintaining Peak Performance

Think about the different supervisors you have worked for. Were they achievement ori-
ented or task oriented? Did their orientation toward getting the job done make a difference
in how you worked or how you enjoyed your job? As you think about answering these
questions, it becomes clear that supervisors, those first-line managers who are responsible
for day-to-day operations, have a huge impact on employees and customers. However you
answered these questions, the most effective supervisors gained the cooperation of others.
Research has shown that, “The human element is crucial to ensure quality of tourism-related
services, which in turn is fundamental in providing visitors with a memorable experi-
ence” (p. 26).17 Delivering quality services which results in memorable experiences leads
to customer satisfaction and ultimately loyalty and improved profitability. Therefore,
tourism and hospitality organizations should provide support systems focused on cus-
tomer contact employees, support employees, and their supervisors that are designed to
generate customer delight, repeat business, and profitability.18
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Anticipating and Meeting Guest Needs

Table 3.2 provides a quick list of the methods needed to ensure high-quality service. The
first step in delivering high-quality service is to learn and fully understand what custom-
ers want in a particular tourism service. Tourism managers can uncover specific needs
and expectations of customers in a number of ways. First, marketing research can be
used to gather information from potential and existing customers. Many companies reg-
ularly survey members of their target market to better understand the changing needs
and desires of segments they hope to serve. For example, when PepsiCo acquired Taco
Bell, management conducted a study of fast-food customers (any fast-food customer, not
simply customers who liked Mexican food). From this survey, PepsiCo concluded that
fast-food customers had expectations about four things, which can be remembered by the
acronym FACT. Customers wanted their fast food really Fast; they expected their orders
to be Accurately delivered; they wanted the premises to be Clean; and they expected foods
and beverages to be served at appropriate Temperatures. With this knowledge, top man-
agement redesigned the entire Taco Bell system to better deliver these expected qualities.19
Management can also learn about customer expectations and experiences by com-
municating frequently with customers and by welcoming suggestions from front-line
employees who deal on a one-on-one basis with customers every day. At times customers
may not know what they want, so efforts should also be made to uncover unknown cus-
tomer needs. This flow of communication from customers to management is more likely
to occur if there are fewer levels of bureaucracy through which the information must
pass. After making the restaurant manager’s job more customer and employee interac-
tive, Taco Bell has been able to streamline its organization. Taco Bell has eliminated two
levels of bureaucracy so that all members of the organization are closer to the customer.
In addition to understanding the customer’s needs and expectations, hospitality and
tourism managers must be able to hire the right people and train them well. To delight
guests, tourism employees must have a positive service attitude; they must have the necessary
abilities to learn and perform jobs well; and they must be flexible enough to meet different
customers’ needs and expectations. Employees with a genuine service orientation will try to
anticipate customer needs even before customers realize the needs or ask for such services.
Management must decide on proper training for employees and set standards and policies
that result in high quality and high satisfaction. However, management needs to remember
Table 3.2 Management Methods That Ensure High-Quality Service

Learn and Understand Select and Train the
Customer Wants Emphasize Team Goals Right People
1. Regularly survey 1. Actively participate, support, 1. Reinforce basic skills
customers. recognize, and reward and abilities.
2. Frequently interact with teams in achieving goals. 2. Select employees
customers. 2. Recognize, reward, with the following
3. Actively seek and listen and reinforce individual character traits:
to front-line employee behaviors that support and • Positive and willing
opinions. further team progress. service attitudes
4. Reduce the number of 3. Give teams the training, • Flexible and team-
management levels. tools, and technology based behaviors
needed to achieve the
organization’s goals.
4. Train and empower
team members to make
decisions, solve problems,
and make process and
service improvements.
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FYI LISTENING AND RESPONDING

Hotel employees at this major inter- Hotel ICON in Hong Kong provides a mentary coffee and tea, use the gym or
national travel hub received many “timeless lounge” where guests can spa, access free WiFi, and have a com-
requests for early check-in and late rest and relax before check-in or after fortable area to sit, read, or take care of
check-out due to flight schedules. check-out. They can enjoy compli- business.
that customer expectations will differ and quality perceptions will vary, so employees need
to be able to make judgments and adaptations to best satisfy each guest. Remember, one
of the key elements to service quality is empathy, and empathy means understanding and
appreciating each customer’s specific needs. Employees who are trained to follow policies
strictly cannot empathize with customers and meet their needs. Managers are learning that
delivering successful customer service requires allowing employees to “think while doing.”
Building Service Teams

In addition to individual efforts, employees must work together as a team. If you have
worked in any tourism industry job, you already know that delivering good service
is a team effort. Imagine two different restaurants. One features servers who have a
“that is not my table” attitude. The other has servers who constantly help each other
out by refilling water at any table needing it and by delivering meals to any table when
the meals are ready to come out of the kitchen. The second restaurant is obviously the
higher-quality one and demonstrates the benefits of teamwork.
Allowing employees to think as they serve and building teams are not easy man-
agerial tasks, but the rewards are worth the effort. Recognizing individual efforts that
lead to team success promotes employee involvement and commitment. When employees
understand organizational goals and how to measure their performance in accomplishing
these goals, the foundation for improving service delivery has been laid. Understanding
Airport train service employees line up luggage carts before the train arrives, anticipating
customers’ needs. Photo by Cathy Hsu
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the importance of their individual and team efforts leads to organizational success.
Promoting teamwork also serves as a powerful tool for overcoming problems created by
cultural differences as well as generating shared understandings, building appreciation
across functions and between individuals, and increasing skill and knowledge levels.
Teams can be developed and supported by management in a variety of ways. First,
management can convey team spirit by being an active member of the team. Employ-
ees should be hired, trained, and supported so that all team members know their jobs
and can carry their shares of the load to achieve the team’s common goals. Second,
team members also need to be supported with well-maintained and appropriate tech-
nology. Finally, team members should be able to make decisions without constantly
having to check with a supervisor.
Some companies allow employees to make decisions using their own best judg-
ment. Other firms train employees to handle a wide variety of customer scripts and
problem situations. Put this all together and more in hotel companies such as Joie
de Vivre Hospitality and Four Seasons, and you discover the benefits of focusing on
employees that ranges from lower employee turnover (less than half of industry stan-
dards) to intense customer loyalty.20,21 Management in these and other successful orga-
nizations has discovered the benefits of taking on the role of coach rather than boss
so that the entire team can win.22 After all, management is ultimately responsible for
continually improving the service quality delivered to guests.
Singapore Airlines has been recognized for its innovative programs to create
high-quality service and employee satisfaction. The “Singapore Girl” has become
the corporate symbol of Asian grace and hospitality and a global marketing icon. Its
extended training programs that begin with 15 weeks of training when hired is then
followed up on a continuous basis with courses designed to enhance service quality.23
The Shangri-La Hotels and Resorts is a Hong Kong–based company, inspired by
the legendary land featured in James Hilton’s 1933 novel, Lost Horizon. The name
Shangri-La encapsulates the serenity and service for which their hotels and resorts are
renowned worldwide. See Table 3.3 for the culture by which company employees share.
As immigration and multiculturalism become more common across the globe,
tourism service suppliers will depend on diversity training and education to meet team
building as well as guest needs. Managing employees with similarities and differences
in language, culture, education, and religion can create a competitive advantage as we
deal more effectively with staff and guests.24
Service Mistakes
As illustrated in the chapter opener, although management and employees may want to
delight guests in each and every service encounter, problems can occur. Fortunately, most
consumers are willing to forgive “service mistakes,” or service failure, when appropriate
responses to them occur. What constitutes a service failure that can result in a guest being
dissatisfied? In simple terms, a mistake occurs when the customer’s expectations are not
met—when a customer’s “service script”25 is broken. We have learned that customers’
script expectations develop from word-of-mouth and marketing communications, from
personal needs, and from past experiences. When customers experience an unexpected
change from their expected script, we call this a “break from the script.”
A tourism-focused research study investigated these breaks from customers’ scripts.26
Interestingly, the researchers found that there were two categories of breaks from a script.
The first type of break is a positive change from what the customer expects. For example,
a particularly cheerful and efficient front desk clerk who provides a suggestion for a good,
inexpensive place to dine that evening might be perceived as a pleasant change from the
expected script—a “positive break” from the script. Positive breaks lead to highly memo-
rable and highly satisfying service encounters that guests enjoy recounting to friends.
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Table 3.3 The Shangri-La Hotels and Resorts Service Culture

Hospitality from the Heart:
Through the years, our philosophy has been “Shangri-La Hospitality from a caring
family.” Shangri-La has always believed in the unique characteristics encapsulated by
Asian hospitality.
Our commitment to providing guests with distinctive Asian standards of hospitality and
service enables us to stand out amongst our peers. This quality remains the cornerstone
of our reputation as a world-class hotel group.
“Pride without arrogance” is of particular importance to us. We take pride in our
achievements, while remaining outwardly humble.
In striving to delight customers each and every time they stay with us, we aim to
exceed expectations through consistent quality and value in our products and services.
That’s why we look for trendsetters and professionals who are motivated by innovation
and driven by achievement.
Our Vision:
To be the first choice for guests, colleagues, shareholders, and business partners.
Our Mission:
To delight our guests every time by creating engaging experiences straight from our
heart.
Guiding Principles
We will:
• Ensure leadership drives for results
• Make guest loyalty a key driver of our business
• Enable decision making at the guest contact point
• Be committed to the financial success of our own unit and of our company
• Create an environment where our colleagues may achieve their personal and career goals
• Demonstrate honesty, care, and integrity in all our relationships
• Ensure our policies and processes are guest and colleague-friendly
• Remain deeply committed to our social responsibility by making a positive contribution
to our communities, environment, colleagues, guests, and business partners
http://www.shangri-la.com/corporate/about-us/shangri-la-culture/.
Unfortunately, the opposite type of break also can occur. When a change from
the expected script is negative, the customer will be dissatisfied. If a front desk clerk
doesn’t look up from the computer screen when a guest approaches the desk, the guest
is likely to perceive this behavior as a negative break from his expected script and be
more than a little annoyed at the lack of service!
Mistakes Happen
Researchers have found that common negative breaks from the script occur from (1)
failures in the core service (a broken-down mattress in a hotel room; an overdone,
cold steak; or a bus that breaks down mid-tour); (2) unwillingness to accommodate
a customer’s special need or request (to locate a disabled guest on the ground floor of
a hotel in a handicapped accessible room, to modify an entrée to fit a patron’s special
dietary needs); and (3) unsolicited tourism employee actions (inattention, rudeness, or
thievery on the part of an employee). What was the negative break from the script the
Johnsons faced in the chapter opener?
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Fortunately, the research team discovered that all is not lost when a negative break
from a script occurs. Customers will often give tourism providers a chance to make things
right. When a tourism encounter is less than satisfactory, the tourism employee can right
the situation and “turn the guest’s frown upside down.” This reversal of a service problem
is called service recovery.27 However, if a mistake is made and the employee does not make
a sincere effort to better the guest’s situation, highly memorable dissatisfaction occurs.
So, the bad news is that mistakes are inevitable in tourism businesses. The good
news is that, with proper handling, a negative break from the guest’s script can be
reversed and turned into an extra-satisfying, memorable service encounter. Keep in
mind that satisfied guests represent potential future flows of revenues and profits,
whereas dissatisfied guests represent future losses because they fail to return and they
pass negative word-of-mouth comments on to their friends.
Be a Can-Do Problem Solver

Most service unreliability is rooted in poorly designed service processes, inattention to
detail, and simple carelessness. The tourism service team members need to have a “do-it-
right-the-first-time” spirit. All team members, managers, and front-line employees should
constantly search for fail points—steps in the process that are vulnerable to failure. Atten-
tion to these details and suggestions on improvements should be paramount in the minds
of all team members. But we know that sometimes service will fail. What can be done
then to try to retain the customer? Thankfully, there are several things.
When a customer complains or a service employee somehow senses that a service
mistake has occurred, what happens next is critical to customer satisfaction. If the
problem is ignored, the customer is likely to be furious and subsequently spread nega-
tive comments about the company. If the problem is handled; but not to the customer’s
complete satisfaction, the customer is still likely to be dissatisfied and also speak ill
of their experience. However, if the problem is solved quickly, the guest is likely to
be pleased and recount the story of the incident to friends. In this way, tourism ser-
vice providers can take a bad situation and make it positive. Research has shown that
although organizations may not be able to obtain pre-failure level of service satisfac-
tion, some type of positive recovery can be attained with service recovery strategies.28
How can tourism managers ensure that problems are handled and their guests leave
smiling? To solve problems, employees must know problems exist. Therefore, managers
must encourage customers to voice their problems immediately so that employees can
solve them. Because most guests are hesitant about voicing complaints, employees should
also be trained to recognize problem situations so that they can fix the problem. And the
problem solution needs to occur immediately. This quick response handling is most likely
to occur when management gives employees the knowledge and authority to solve prob-
lems on their own, without having to check with supervisors.
FYI LAUGH
Need help remembering the problem is said. Acknowledge that the prob- him or her to choose the preferred
solution steps? Just LAUGH. Each lem really is important. Understand. solution. Hit home with a follow-up.
letter of the word laugh stands for a Indicate that you understand the situ- When possible, contact the guest a
step on the road to turning a dissatis- ation by reviewing with the customer short time after the problem is solved
fying encounter into a satisfying one. what has occurred. Give solutions. to make sure that the guest is now
Listen. Let the guest relate the prob- Provide the guest with a variety of satisfied.
lem in detail and really listen to what solutions to the problem, and allow
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“Making things right” for most customers simply involves doing a few simple things.
Customers want acknowledgment that the problem exists. They also like to be told why
the problem arose in the first place. Next, they want a sincere apology. Finally, customers
want to be made “whole” again. In other words, they want some form of compensation
that will lessen the cost of the problem to them. They need to be compensated for any
bother or annoyance they perceived or experienced because of the problem. Which of
these steps did Mike use in the chapter opener to make things right for the Johnsons?
Think of a recent situation in which you were less than satisfied with the service
you received and voiced your dissatisfaction. What happened? Did the service employee
respond appropriately, as we have just outlined? Did you leave frowning or smiling?
Correcting the immediate mistake and satisfying the customer are a great start
to creating a truly service-oriented organization, but there is still more to do. Steps
should be taken to make sure that the problem does not recur. This requires figuring
out why the mistake happened and making operational or training changes so that it
does not happen again. These changes could be very simple or creative. One example
of a creative solution to a service problem comes from a theme park in South Korea.
Managers were having trouble with employees sticking their hands in their pockets
during work. The solution: Sew up the pockets until employees broke this annoying
habit. In addition, customer co-participation, being actively involved in the resolution
process, may be an effective recovery strategy for service companies as it could: influ-
ence satisfaction with the recovery process, encourage repurchase intentions, and be
more cost effective than what a company would be prepared to offer.29
Service Guarantees
One way to instill more confidence in guests regarding quality of service is by guaran-
teeing it. You are probably familiar with guarantees for hard goods. When a good you
purchase, for example, a smartphone, proves to be unsatisfactory, producers frequently
guarantee your satisfaction by offering you one or more options. In the case of dissatisfac-
tion with a smartphone, the manufacturer may replace it, repair it, or refund your money.
In the tourism service environment, it is more difficult to use these options. How does one
“replace” an unsatisfactory visit to a theme park? How does management “repair” an
unpleasant stay at a hotel, being ignored by a server in a restaurant, or missing your flight
due to a mechanical failure? You could get your money back, but that may not fully sat-
isfy you. In most tourism services, one other important difference exists. You must com-
plain face-to-face to another human being to get your money back or have your problem
solved. Many of us do not like the confrontational nature of such direct complaining.
Our server may “complain” back or become overly embarrassed by our complaint.
So how can a tourism service provider guarantee service quality? By using a cus-
tomer satisfaction guarantee that has five important features forming the basis for a
service guarantee:30
1. The guarantee should be unconditional with regard to the elements that are
under the control of management and the employees. Airlines and other trans-
portation providers cannot control the weather, but they can control most
other aspects of your flight or ride experience.
2. The service guarantee should be easy to understand and communicate to
guests. It should be brief and worded very simply. Fine print and legal lan-
guage should not be used to confuse the customer.
3. The guarantee should be meaningful, guaranteeing an important quality
aspect to guests. For example, if speed of service (responsiveness) is an import-
ant element of quality to lunchtime restaurant patrons, the restaurant might
use the following guarantee: “Your meal in just 5 minutes or it’s free!”
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4. The guarantee should be easy to collect. The

customer should not have to “jump through
hoops” to collect, and no guilt should be
heaped on the guest for asking for the guar-
anteed restitution.
5. Compensation should be appropriate. How
does management decide what is appropri-
ate compensation for a service failure? Man-
agement needs to consider not only the price
of the service to the customer in money, but
also the seriousness of the failure in incon-
venience or other bother. Finally, but proba-
bly most important, what does the customer
think is fair given the problem?
Service guarantees provide assurances to both
service personnel and customers that the organiza-
tion is focused on delivering quality service. When
these guarantees are supported with training pro-
grams and process reviews focused on continuous
improvement; what should be the ultimate goal of
every tourism organization—delighted customers,
repeat visits, and increased profitability—can be
achieved. In pre-purchase situations, research has
shown that customers perceive a higher quality
for hotels offering unconditional guarantees, sig-
nificantly lowering customers’ perceived risk.31
It has also been shown that service guarantees,
both conditional and unconditional, could be an
effective tool to encourage customers to complain
about their dissatisfaction allowing employees to
The “time guarantee” offered by a restaurant in an airport apply appropriate service recovery strategies.32
eases travelers’ worries. Photo by Cathy Hsu
FYI SERVICE GUARANTEES

Service guarantees come in many dif- Others are more direct and detailed. make it right or you won’t pay for that
ferent forms. Some are in the form of For example, Holiday Inn calls its ser- part of your stay.”
a commitment. For example, manage- vice guarantee its Hospitality Promise. Companies that are excellent at
ment at the Best Rest Inn in Boise, The promise is prominently displayed problem solving give the customer a
Idaho, uses its welcome sign, “We in each guest room. It reads, “Making list of problem solution choices or ask
delight every guest, every day, one your stay a complete success is our the customer what would make him or
guest at a time,” as a statement of its goal. Just let our Manager on Duty or her happy. In that way, the customer
service commitment. The Hampton Inn front desk staff know if any part of your decides what the guarantee payout
chain uses the slogan “Get what you stay isn’t satisfactory. We promise to should be.
expect—guaranteed!”
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Summary
Quality, hospitality, and satisfaction are all crucial con- the quality of the service, from the weather to the mood
cepts in tourism. To a large extent, quality is like beauty: It of the service employee and of customers. When guests are
is “in the eye of the beholder.” The marketing and manage- dissatisfied with a service, problem handling becomes par-
ment challenge lies in identifying how guests judge quality amount. Every effort should be made to fix the problem
and then measuring these factors so service delivery can be and satisfy the guests.
continually improved. Guests judge the quality of a tour- Tourism managers can ensure high-quality service
ism service by five factors: (1) the tangibles of the tourism and guest satisfaction by researching guest expectations,
service, (2) the reliability of the service performance, (3) by acting on employee suggestions for improvements,
the responsiveness of employees, (4) the assurance they feel by hiring and training employees well, and by emphasiz-
from the tourism provider, and (5) the empathy they are ing a team approach in service delivery. Managing these
shown during their tourism experience. These five factors employees on a daily basis to meet customer expectations
combine and yield a guest’s overall quality perception. sets the stage for the delivery of quality service. Finally,
Guests have expectations of tourism services that providing guarantees for services reassures customers and
they compare to the service they receive. This comparison focuses employees’ attention on the important aspects of
determines the level of satisfaction they feel. Guests can be service quality. When customers are truly delighted with
highly satisfied, just satisfied, or dissatisfied with a tourism their service experiences, satisfaction levels increase and
service. Quality is more variable in tourism services than in profitability is enhanced through repeat visits.
manufactured goods because so many factors can change
You Decide
What does quality mean to you? Does it mean the same Singapore, Qantas, and United think that their customers
thing to you as to everyone else? Do you expect the same will define quality in terms of a larger bundle of services
level of service when dining at an upscale sit-down restau- such as in-flight meals and entertainment, airport lounges,
rant as you would expect at a quick-service restaurant? and extensive route systems. And, they market the expan-
Your answer is probably no. The same comparison ques- siveness of their services. To add to this potentially confus-
tion could be asked about almost any group of tourism ser- ing array, there are also regional airlines such as Republic
vice providers and your answer would be similar. and SkyWest that fly routes for many of the major airlines
However, in one segment of the tourism industry, under something called code-share agreements. So, you
airlines, this question has become an important issue for could find yourself flying with a company that you might
passengers in recent years. As the industry has struggled never have heard of.
with profitability concerns and competitive pressures, These differing levels of marketed services have cre-
it has become apparent that one size definitely does not fit ated a dilemma for both the airlines and their consumers.
all passengers when it comes to choices in air travel. If it When customers see a particular brand, should they expect
doesn’t matter how you get from point A to point B, all you a specific level of service? As the airlines struggle to remain
need is a ticket. However, if you buy a ticket without know- profitable, they have begun to blur not only the service
ing anything about the airline, you could find yourself fly- lines between brand names but also who provides the
ing on anything from a 400-passenger jet flying a nonstop service for their brand, as many carriers may be subcon-
route with snacks and in-flight movies to a 19-passenger tracting these services to other independent carriers under
turboprop with no service making multiple stops. code-share agreements.
Low-cost carriers such as Frontier, Gol Airlines, Jet- Do customers make a conscious quality distinction
Blue, Ryanair, Southwest Airlines, and Spring Airlines between these brands or for that matter between carriers
think that their customers will define quality based on low in general? What obligation do the airlines have to com-
price, frequency of flights, and on-time performance. And, municate these distinctions to their customers? What level
they market their services as no-frills experiences. On the of service do you think passengers expect or should expect
other hand, larger carriers such as American, Lufthansa, when they purchase their tickets on any of these flights?
Net Tour
To get you started on exploring Internet links for this fourseasons.com
chapter, enter the phrase “tourism service quality” into www.qualitydigest.com
your favorite search engine, or please see www.singaporeair.com
www.quality.nist.gov www.discoverhongkong.com/usa/shopping/quality-
corporate.ritzcarlton.com tourism-services.html
M03_COOK1670_06_GE_C03.indd 101 13/05/17 10:29 AM

www.forbes.com/travel/ corporate.ritzcarlton.com/en/About/GoldStandards
corporate.disney.go.com/corporate/cr_human_ .htm#motto
resources. html
1. Describe how services are different from goods. 5. What is a break from the service script? How do breaks
2. Define quality using the many meanings the word can from the script affect customer satisfaction?
have. 6. What should a tourism service employee do to “turn a
3. Explain why the quality of tourism services is harder frown upside down”?
to define and manage than the quality of hard goods. 7. What can management do to ensure high-quality
4. How are expectations of a tourism service formed? service?

1. Use an airline flight to illustrate the service as theater 5. Look up some tourism organizations on the Internet
concepts highlighted in Figure 3.3. and read through their corporate information. Identify
2. Choose a local tourism supplier and rate it on the five one company that you consider doing a good job of
dimensions of quality. Why does it rate high, average, creating a learning organization and explain why.
or low on each dimension? Be detailed in your answers. 6. Imagine you are a supervisor working in a luxury hotel
3. Describe a recent tourism service encounter in which a in which customer service is considered a very import-
service mistake was handled to your satisfaction or dis- ant attribute. You manage a small team. Discuss how
satisfaction. What was done, or could have been done, you are able to achieve and maintain peak perfor-
to turn your frown upside down? mance of your team members. Critically assess if your
recommendations are realistic.
4. Develop a service guarantee for a tourism service with
which you are familiar. Critique your guarantee using
the five important features of service guarantees.
Glossary
Expected quality The level of quality that a consumer Service encounter A single episode during which a cus-
predicts he or she will receive from a good or service. tomer and service personnel interact; often also called a
Expected script The set of steps and statements that a “moment of truth.”
guest expects to occur during a service encounter. Service expectations The quality level of the five dimen-
Facilitating goods Tangible items that support or accom- sions of service expected by a customer.
pany a service being provided. Service guarantee Providing assurances in writing that
Learning organization An organization committed the level of service promised is provided and, if not,
to identifying best practices and creating systems to what specific responses will be made in correct to the
achieve high-quality standards. service failure and make the customer whole.
Market share The percent of the total market for a good Service recovery The process of reversing a service
or service that a single company has. problem.
Marketing communications Any communication Service script Learned patterns of behavior that guide
between a marketer and a consumer. interactions during a service encounter.
Orientation Also called “on-boarding” is a process Specification A detailed written description of a proce-
designed to help new employees become acquainted dure or ingredient.
with the organization and understand the expectations Standard A predetermined procedure or amount of an
the organization and their supervisor have for them. ingredient.
Perceived quality The level of quality a consumer per- Supervisors Individuals who are responsible for day-to-
ceives following the consumption of a good or service. day operations, other employees’ job performance, and
Restitution An amount of money or other item given to provide recommendations to managers on personnel
make up for some mistake or wrongdoing. issues.
Servicescape The physical (tangible) aspects of the service
encounter.
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References
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CHAPTER 4
Bringing Travelers and Tourism
Service Suppliers Together
There are no such things as service industries. There are only industries whose service
components are greater or less than those of other industries. Everybody is in service.
—Theodore Levitt, Former Editor, Harvard Business Review,
In The Marketing Imagination, Free Press, 1986
LEARNING OBJECTIVES
1. Explain the importance of intermediaries in the 4. Describe the roles of tour wholesalers in bringing
distribution of tourism services. tourists and tourism service providers together.
2. Identify and describe the three different types of 5. Explain how and why the Internet has changed
distribution channels that are used for tourism the distribution of tourism services.
services. 6. Identify and describe how travelers access infor-
3. Describe the roles of travel agencies in bringing mation for tourism services.
tourists and tourism providers together.
CHAPTER OUTLINE
One Stop Does It All! Acquiring Product Knowledge
Approaching the Client
Introduction
Qualifying the Client
Serving Traveler Needs Making the Sales Presentation
Why Use Intermediaries? Closing the Sale
Following Up
One-Level (Direct) Distribution Channels
Building Relationships
Two-Level Distribution Channels
Travel Agencies Summary
Three-Level Distribution Channels You Decide
Tour Operators Net Tour
Tours Discussion Questions
Consolidators and Travel Clubs
Event Planners Applying the Concepts
Tapping the Power of Multiple Distribution Glossary
Tourism Boards and Other Intermediaries References
Selling Adds a Personal Touch
104
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Chapter 4 ▸ Bringing Travelers and Tourism Service Suppliers Together 105
One Stop Does It All!

Kristin Hatten has just stepped into the office and already the phone is ringing, the
message light is blinking, and her computer screen is filled with email messages. This
workday will probably be just like every other workday in her life as a travel agent—
always different. The demands of the day will require that she be a true multiproces-
sor, handling several tasks at once, from answering the phone to entering, retrieving,
and verifying data from a sophisticated computer reservation system (CRS), searching
the Internet, and responding to a multitude of emails and text messages. At the same
time, during all these tasks she must focus her attention on the ultimate goal of provid-
ing high-quality individualized customer service. As a travel agent, Kristin serves as an
important link between suppliers in the tourism industry and her clients.
As a front-line service employee, Kristin faces a demanding public that often does
not understand the constantly changing industry rules and prices with which she must
work. On any given day, she may receive information about changing regulations and
prices as well as invitations for seminars and familiarization trips from destinations,
airlines, hotels, resorts, cruise lines, rental car companies, and a host of other tourism
service suppliers. Kristin must sort through this information to learn more about the
services that will meet the needs of her clients.
Kristin will spend most of her day answering the phone, communicating electron-
ically and serving customers who walk through the door seeking help with their travel
plans. She will deal with a wide variety of customers, ranging from her regular busi-
ness clients who know what they want to first-time customers who have little knowl-
edge about travel and tourism in general. The uncertainties that fill each day can make
her job stressful, but the opportunity to learn more about the world and help others
meet their travel needs keeps Kristin going.
At the end of a particularly hectic day, she takes a moment to think about her
list of appointments and calls to be made the next day. Most of the calls are from her
typical leisure customers and require only providing information on basic scheduling
options. As she continues reviewing the list, Kristin notices one appointment that she
Tour guides add a personal touch to the travel experience. Rough Guides/Dorling Kindersley, Ltd
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is particularly looking forward to. Mr. and Mrs. Campbell phoned last week to dis-
cuss an upcoming trip they were planning from Lethbridge, Canada, to Vietnam. After
obtaining some brief information about the Campbells and their needs, Kristin sched-
uled an early morning appointment.
Looking at the notes she took during that phone conversation, Kristin begins
thinking about the types of information and services the Campbells might want. The
Campbells, a recently retired couple, have always wanted to visit Vietnam for a variety
of reasons and return home with pictures and stories they could share with friends and
relatives. They have been reading extensively and exploring Internet sites to learn more
about the history and attractions and have some ideas of where they want to go and
what they want to see and do, but they are interested in any suggestions Kristin might
offer. Before she leaves for the day, Kristin prints out several different itineraries and
gathers brochures, Web addresses, and other information that she thinks will help the
Campbells in making their plans for an unforgettable experience.
Introduction
When people travel, they need a whole range of tourism services. These services may
include airline tickets, car rentals, places to stay, places to eat, places to shop, tickets
and admissions to attractions, and information about things to do and see. In this
chapter, we will explore the basic concepts of services and how marketing, manage-
ment, and finance decisions have an impact on the way travelers access the services
of tourism suppliers. The success and profitability of tourism service suppliers depend
on their ability to reach and meet targeted customers’ needs effectively and efficiently.
As you learned in Chapter 2, by dividing the larger tourism market into distinctive
groups, we can plan and provide services that are targeted to the needs of a specific
segment of the tourism market. Once these target customers and their needs have been
identified, the goal of service suppliers becomes reaching, serving, and satisfying their
needs profitably. This is not an easy task because “competition today demands that
service be delivered faster, cheaper, and without defects.”1 By referring to our model of
tourism in Figure 1.2, you will see that many different organizations and approaches
have been developed to accomplish this task. In this chapter, we will discover how
travelers obtain information about and access to tourism services.
Serving Traveler Needs

Remember Thomas Cook, who organized and conducted the first large tour in 1841?
He used a variety of marketing, management, and financial skills as he packaged, sold,
and escorted that first organized tour. Cook negotiated reduced fares on a train trip
between Loughborough and Leicester, England, and arranged for picnic lunches and
afternoon tea for almost 600 people. He was serving as an intermediary. As an inter-
mediary, he did not work for the railroad company or the bakery, but he sold their
services and goods. His clients benefited from his efforts because he took care of
their needs while saving them money; the suppliers benefited from his efforts because
they received increased revenues without having to spend additional monies attracting
more customers.
Once an organization has developed a service offering, it must be made available
for customer use. Consumers are often unable to sample or even see services before
purchasing, so they rely primarily on information to make their purchase decisions.
Determining how this information will be made available and how travelers will
obtain the services they need involves a variety of decisions. For example, should the
organization deal with customers directly, or should it rely on others to attract and
inform customers about its services? How much money should be spent on attracting
customers? Does the organization have the people and talent to distribute information
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about its services efficiently and effectively, and, at the same time, achieve the desired
levels of profit, service quality, and customer satisfaction?
In answering these questions, managers need to consider two key issues. The first
deals with who should be involved in bringing travelers and tourism service suppliers
together, and the second deals with how to manage these activities. A simple example
will help highlight these issues.
Consider for a minute a small coastal resort located in South Carolina. It would
probably not have the money or the marketing staff to reach all of its desired target
customers effectively. Rather than attempting to accomplish this task alone, the man-
ager of the resort could rely on the help of others. The state tourism office, local visitors
bureau, membership in a regional reservations system, cooperative brochures includ-
ing other local attractions, an interactive website, a Facebook page, hotel-booking
sites, and participation in a reservation referral system provide just a few possibil-
ities for informing and attracting potential guests. However, even with all of these
efforts, the resort may still not reach enough of its targeted audience to be profitable.
To close this information loop, the resort might rely on the professional services of
travel agents such as Kristin Hatten, whom we met in the chapter opener. As you will
see in this chapter, these are just a few of the alternatives a manager should consider
when attempting to reach potential customers.
Travelers need access to a wide variety of tourism services. These services may be
as simple as having questions answered about the availability of services or as com-
plex as purchasing a custom-designed all-inclusive prepackaged tour. No matter how
simple or how complex the needs are, there are several types of distribution channels
that can be used to access tourism services and information about these services. These
channels may range all the way from one-level direct access to more complex three-
level arrangements involving several intermediaries. Figure 4.1 shows typical one-,
two-, and three-level distribution channels for tourism services.
FIGURE 4.1 One-level Two-level Three-level
Distribution channels.
Service Service Service

Service
provider provider provider
Provider
Tour operator
(e.g., wholesaler)
Travel agent
Travel
(e.g., retailer)
Agent
Travel agent
(e.g., retailer)
Customer Customer Customer
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Why Use Intermediaries?

Although tourism service suppliers such as airlines, theme parks, and restaurants may
reach some of their customers directly, they can also use the distribution services pro-
vided by one or more intermediaries. Intermediaries perform a vital function for tour-
ism service suppliers by making the suppliers’ services available to large numbers of
potential customers in a cost-effective way. These services may be as simple as pro-
viding directions for a motorist at a welcome center to more complex service activities
such as packaging, selling, and then escorting tour groups.
Intermediaries in tourism distribution channels perform a variety of value-adding
functions. Examples of just a few of these distribution functions are:
• Providing information about the types and availability of service offerings,
• Making reservations and other travel arrangements,
• Preparing tickets and/or providing confirmations,
• Encouraging repeat use of supplier channels,
• Contacting current and potential customers,
• Reducing costs of acquiring new customers,
• Assembling services to meet customer needs,
• Risk taking by buying or booking large quantities of services in advance and then
reselling them to individuals and groups,
• Marketing excess inventories, and
• Providing extensive marketing data to tourism suppliers through databases con-
taining targeted consumer behavior information.
The expenses of selling services through an intermediary typically occur in the form
of commissions and do not arise until the services have been sold or used. The company
providing the final service such as the cruise line, hotel, resort, or attraction pays the
commission on each ticket sold or reservation used. Increasingly, users are paying some
type of service fee to compensate for the demise of commissions. Services may also be
purchased in large quantities at reduced costs and resold at higher prices called markups.
Credit card companies are becoming important intermediaries in the distribu-
tion of tourism services. Companies such as American Express provide an array of
services such as reserving theater tickets and golf tee times for groups of travelers
that frequently purchase travel services. In addition to these services for travelers,
they can provide key marketing information to suppliers through their data-mining
capabilities. Specific service offerings can then be targeted to meet customer needs.
The roles of intermediaries are changing with the advancement of technology, but
these advances have not reduced the number of intermediaries in the tourism distribu-
tion channels. However, the structure of the tourism industry distribution networks
has undertaken large transformations evolving into more complex networks.2
One-Level (Direct) Distribution Channels

One-level distribution channels are the simplest form of distribution, providing trav-
elers with direct access to tourism suppliers. In this type of distribution channel, sup-
pliers deal directly with travelers without the assistance of intermediaries. Airlines,
car rental companies, passenger railroads, lodging facilities, resorts, restaurants, theme
parks, and attractions all rely on online promotions and advertising, including through
social media, to encourage people to purchase their products and services directly.
These advertising and promotion programs also serve to generate business for other
travel intermediaries, such as travel agencies and tour operators.
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Information technology offers another promising format for bringing service sup-
pliers and customers together through voice commands, the touch of a keyboard or
screen or the click of a mouse. Services such as electronic travel brochures and videos
and basic information about airlines, international rail service, passenger bus lines,
car rental companies, cruise lines, hotels/motels, and resorts can be accessed through a
variety of online services and Internet connections.
The future holds many exciting challenges and opportunities for tourism market-
ers and service suppliers. How we access and use tourism information is changing
radically as information technologies develop and improve. Advances in communi-
cation technology have made it possible for travelers to visit faraway places without
ever leaving their homes or offices. They can connect to reservation systems through
their personal computers or mobile devices; search for related travel information;
book flights; make hotel, dinner, and theater reservations; and complete other travel
arrangements. We will take a more in-depth look at the transformational role of tech-
nology in the tourism industry in Chapter 5.
Airlines, hotels, and other tourism suppliers have encouraged many of these changes
because they help reduce operating expenses and develop brand loyalty. “The Internet has
brought fundamental change to the economy and to how commerce is conducted. Many
businesses use the Internet as a way to bypass product and service intermediaries to deal
directly with consumers” (p. 9).3 When travelers make direct purchases from suppliers,
the suppliers save the costs of using intermediaries, usually in the form of commissions to
retailers and deep discounts to wholesalers. Low-cost carriers, such as Ryanair and South-
west Airlines, almost exclusively use direct distribution to accomplish the tasks of providing
information, making reservations, processing payment, and delivering services.
Hotels have also been aggressively marketing direct sales to lower commission
costs that can be as high as 20% through some intermediaries. In addition to con-
trolling costs, customer loyalty can be enhanced through direct booking incentives
such as better rates, room-selection privileges, speedier check-ins, and free WiFi.
Traditional channels of distribution of tourism services have evolved to incor-
porate new communication technologies. Although direct channels, especially call
centers, have been used by many tourism suppliers in the past, the increased use of
the Internet and cloud computing makes the direct channel a more feasible and cost-
effective option for suppliers to reach their consumers. As travelers have become com-
fortable with information technology, they view these new forms of connectivity as
a do-it-yourself means to search for tourism service information and for the booking
and purchase of travel services.
Two-Level Distribution Channels

As much as consumers enjoy searching for information and best deals on the Internet,
they may soon become overwhelmed by the amount of information available and the
time required to find the most suitable products. At the same time, as much as tourism
suppliers would like to save costs on distribution, most of them soon realize that they
may not have the necessary human or financial resources to engage in direct distribu-
tion effectively. As a result, they enter into relationships with intermediaries who are
able to perform the distribution functions more effectively.
Two-level distribution channels are more complex than one-level direct-access
channels. In a two-level channel, travel agents (often called advisors, counselors, or
planners) serve as intermediaries bringing suppliers and consumers together. Bringing
another person or organization in between tourism service suppliers and the travelers
may at first seem a bit more complex than the one-level approach to distribution that
we just described. However, it can simplify the travel process for consumers and it is
often more efficient and effective for both consumers and tourism suppliers.
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Travel Agencies
The beginning of travel agencies goes back to the glorious years of railroads and steam-
ship lines, when agents sold tickets for these carriers and received a commission for
their efforts. Thomas Cook, whom you read about previously, started the concept of
the travel agent. By making travel arrangements simple and affordable, he was able to
attract growing numbers of people to explore places away from their homes and villages.
By the late 1800s, the idea of seeking help for travel arrangements had made its
way from Europe to the United States. A gift shop owner in St. Augustine, Florida, can
be credited with starting the idea of a travel agency in the United States. Although he
probably never planned to be a travel agent, his knowledge of geography, rail sched-
ules, and hotels soon led him to be the local source for travel information. When any-
one had a question about travel, he or she was sent to “Ask Mr. Foster.” In 1888,
Ward G. Foster turned his love of geography and his hobby of studying maps, trans-
portation, and destinations into Ask Mr. Foster Travel. Ask Mr. Foster continued to
grow and eventually became part of one of the largest travel agencies in the world,
Carlson Wagonlit Travel, now Travel Leaders.4
Although technology has changed, travel agencies still provide important sales and
information links between tourism service suppliers and the traveling public. One of
the most popular forms of purchasing tourism services is still through travel agencies
led by American Express, Navigant, Travel Leaders, and World Travel Partners.5 How-
ever, the form of travel agency being used is changing from brick and mortar to online.
Whether through a personal touch, social media interaction, or online point-and-click
interfaces, travel agencies act as focal points for many of the sales and reservation
activities in the travel industry. Although the Internet has created an environment
where various transactions bypass them, many travel arrangements, especially those
involving high-end or complex arrangements, still involve this intermediary function.6
In addition, the phenomenal growth and consolidation that has taken place with
online travel agencies (OTAs) has resulted in two massive enterprises—Expedia and
Priceline. These two companies have now become the department stores of the tourism
industry. Expedia owns Hotels.com, Hotwire.com, Trivago.com, Travelocity.com, and
many others. Priceline owns Booking.com, Agoda.com, Kayak.com, OpenTable.com,
and many others. Even with tourism suppliers’ efforts to increase direct distribution,
travel agents (both traditional and online) continue to represent about half of all travel
sales in the United States.7
One segment of the tourism industry, cruise lines, has developed and nurtured
a close working relationship with travel agents. About three-quarters of cruises are
still booked through agents. The multiple steps of a cruise purchase can be daunting.
Travel agents can provide advice not only on itinerary, schedule, and price, but also
on cruise line, the ship, cabin type, dinner seating, shore excursions, onboard activities
and charges, and pre- and post-cruise transportation. An experienced agent can help
navigate the complexities and may be able to snag fare discounts, cabin upgrades,
on-board credits, and other perks.
Travel agents are no longer just order takers who spend the entire business day
making bookings at the client’s direction. In fact, only a small portion of an agent’s
day is spent actually making reservations. Travel agents, as consultants, spend much of
their time researching travel products and conferring with clients.8 Internet and online
agencies have forever changed the role of today’s travel agent (see Table 4.1). They
have adopted a much more consultative role, serving as a travel concierge, and go
to great lengths to influence the travel guest’s overall experience. Travel agents are
increasingly expected to be subject experts on destinations, and so we see these travel
experts focusing on tourism products that they have the ability to make informed rec-
ommendations on shopping, night life, and even where the “locals” eat.
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Table 4.1 Travel Agents’ Changing Role

Travel Agents
Pre-Internet Role Post-Internet Role
• Transactional focus • Travel experience focus
• Process transactions and concentrate • Manage overall travel experience
on travel logistics • Book air, car, and hotel
• Book air, lodging, and car • Majority of compensation from markups
• Majority of compensation from and service fees
suppliers through commissions Concierge orientation:
• Little or no follow-up with clients • Door-to-door delivery of sports equipment
and luggage
• Theater tickets
• Restaurant reservations
• Golf tee times
• Spa treatments, etc.
As we saw in the chapter opener, Kristin will need to learn more about the “vari-
ety of reasons” the Campbells desire to visit Vietnam and then tailor an itinerary to
meet their special needs. Experienced travel agents having specific knowledge of where
to find or avoid travel services such as singles-only, LGBT (lesbian, gay, bisexual,
transgender), nude, and seniors-only hotels, resorts, and cruises can make or break a
vacation. Additional services provided by travel guests could include travel document
application, door-to-door luggage delivery, theater and dinner reservations, golf tee
times booking, and personal tour guides or spa treatment arrangements. Travel agents
also have access to products that are still unavailable directly to travelers, such as
multi-carrier air tickets, where travel agents have access to greater number of fare and
scheduling options through global distribution systems (GDSs). These interline tickets
are usually less expensive than single-carrier itineraries.
Many travel agencies, brick and mortar as well as online, specialize by focusing
their efforts on large target markets such as business or leisure customers, whereas oth-
ers serve a general group of customers, or a specific market niche such as cruise-only
customers. Many travel agents, and some travel agency businesses, have also become
more specialized. We see travel agents now focus on high-end luxury travel, adventure
travel, and senior travel, just name a few. However, no matter which type of agency is
used, these agencies do not take title to (own) the services they are selling. Figure 4.2
shows the flow of payments, information, and delivery of services that are purchased
and consumed by travelers through travel agencies.
Even though there are many types of agencies (see Table 4.2) serving different
types of customer needs, they all typically provide a common group of services called
a “product mix.” These services include providing an itinerary; airline, rail, and cruise
reservations with ticketing confirmations; car rental, accommodation, and activity
reservations; tour packages; travel insurance; theater and event ticketing; and general
travel information from necessary travel documents to current weather information.
As a consumer, recognize the professional status of travel agents and focus your atten-
tion on the questions shown in Table 4.3 to get the best possible service.
The growth in OTAs has continued to encroach on the traditional brick-and-mortar
customer base. Whereas in the past, a travel agency was largely limited in clientele to its
small geographic territory, the Internet has made possible the servicing of clients who
are thousands of miles away. Through the use of websites, mobile apps, and electronic
mail; agents now compete with virtually all other agents, regardless of where they are
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FIGURE 4.2
Flow of payments,
information, and ser-
vice delivery.
TOURISM
SUPPLIERS
(airlines, cruise
lines, hotels)
Minus
Information commissions
Service
Travel
delivery
agents
Information
Travelers
Table 4.2 Travel Agency Types

Independent agencies—small agencies, privately owned, unaffiliated with any larger organization; less than 40%
of all travel agencies; traditionally serving clients from a walk-in office location or over the telephone.
Agency chains–wholly owned—mega-agencies that have dozens to hundreds of branch offices throughout a
region, country, or worldwide.
Agency chains–franchises—semi-independent agencies affiliated with each other through franchise agreements.
Consortium-affiliated agencies—independent agencies that link together through a consortium to gain the
financial benefits of a chain but have lower fees and commissions.
Specialty agencies—agencies that offer limited services, such as cruise-only agencies.
Corporate travel agencies—agencies that provide services to business clients but not regularly to the general
public. A corporate travel agency is a private enterprise that specializes in business clientele and may have
branch offices on-site at major clients’ locations. These agencies are frequently compensated by management
fees rather than commissions on the travel services they sell.
Corporate travel department—similar to a corporate travel agency, but agents are employees of the organization
in a department that handles most if not all of the travel needs of the organization’s employees.
Home-based agencies—agents who conduct their services from their homes, using electronic technology, rather
than from an office location in which clients meet with the agent in person; may be independent or affiliated
with some organization (e.g., consortium or chain).
Internet (online) agencies—either opaque (hiding service supplier, e.g., Priceline) or transparent (showing service
supplier, e.g., Travelocity). Other agencies in this category may be home based, serving clients primarily
through the Internet, and use telephone, fax, and postal communications to a lesser degree than traditional
agencies.
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Table 4.3 Four Questions to Ask a Travel Agent

1. What are your qualifications? Expect an agent to have credentials just as you would an accountant or other
advisor. What certifications does the agent have? What industry affiliations does he or she hold? Is the agency
part of a greater network of agencies? Is the agent a specialist or expert in a particular industry sector (e.g.,
cruises) or area of the world (Asia)?
2. What are your relationships with specific industry members? Special relationships with a certain airline, cruise
line, or hotel chain can work for and against the agency’s clients. Links to a cruise line, for example, may result
in stateroom upgrades for the agency’s clients, these but may also mean that the agency will “push” the
cruise line rather than recommending one that better matches your needs or personality.
3. What will you charge and what will I receive for your fee? Ask what fees will be charged and determine
whether the expertise of the agent is worth the money. An expert on Africa who has booked many trips in the
last six months is assuredly worth a $100 fee.
4. What are your contact details (e.g., phone numbers, email address, and messaging app ID)? Agents should
return calls promptly and should be available in emergencies to solve problems. The agents who are most
worth their salt are those who will go to bat for you when trouble arises while you’re halfway around the world
from their office.
Source: Based on Loftus, Margaret. (2003, March). The new travel agent. National Geographic Traveler, p. 18.
located. And, OTAs are beginning to look a bit more like traditional storefront travel
agencies as they attempt to move from promoting the lowest possible prices to planning
and customizing trips based on individual interests by adding more planning tools for
customers.9 The Internet also has made the at-home agent more competitive with the
in-office agent because the Web client need never know that there is no office (and all
its associated expenses) at the other end of the phone or Internet communication link.
Some larger agencies are outsourcing to small home-based agencies to serve clients better
by offering after-hours reservations, service recovery assistance, information, and so on.
Maintaining profitability within the highly competitive travel agency business
requires a combined effort focused on generating sales, offering high-quality cus-
tomer service, and controlling operating costs. Remember that travel agencies depend
on their marketing abilities and programs to generate sales for other tourism sup-
pliers and receive only a portion of these sales in the form of commissions (based
on the level of sales, which are referred to as “bookings”) or markups (the differ-
ence between the price for which travel agencies can obtain the service and the price
they can charge when selling the service). So, a small travel agency that generates
$1 million in sales may receive only $80,000 in commissions and markups to cover
operating expenses and earn a profit. As commissions continue to dwindle, brick-
and-mortar travel agencies must rely on increasing service fees and transform them-
selves from simply being intermediaries, to “professional infomediaries” (p. 144).10
By evolving into infomediaries they can become an indispensable component of the
travel distribution system.
Because the most efficient brick-and-mortar travel agencies are able to make only
a few pennies of profit on each sales dollar, maintaining the financial health of the
business by controlling expenses such as salaries and benefits, rent, CRSs, advertising
and promotion, utilities, repairs and maintenance, insurance, and other miscellaneous
items becomes an important managerial task. Online agencies may have fewer per-
sonnel and office costs, but they have significant marketing expenses and face higher
technology costs as systems must be upgraded constantly and maintained 24/7.
Airline deregulation and the subsequent elimination of commissions on airline ticket
sales in the United States have brought about many changes in the operation of travel
agencies. Although the United States and some European airlines no longer pay com-
missions, they do allow large-volume travel agencies to earn overrides and frequently
provide them with “conversion ability” for large volumes of business to their routes.
This is the ability to convert a regular full-economy-priced airline reservation to a
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discounted fare price when all discounted seats are sold out. These two factors have
encouraged agency owners and managers to seek affiliation through a franchise or a
consortium (such as Vacation.com) to gain the necessary volume of business that can
lead to improved profitability.
Because the majority of travel agency revenues are derived from overrides; com-
missions on hotels, tours, and cruise line reservations; and service fees, appointment
and accreditation by two key agencies are critical to continued success. The Airlines
Reporting Corporation (ARC) and the International Airline Travel Agency Network
(IATAN) operate the financial networks and clearinghouses that allow travel agen-
cies to sell airline tickets. ARC accreditation is the most important because it han-
dles transactions for U.S. domestic airlines, many international airlines, and Amtrak
and Britrail as well. IATAN handles transactions for the international airlines that are
not processed through the ARC system. The equivalents to the ARC in the accommo-
dations sector of the tourism industry may be Hotel Clearing Corporation’s Pegasus
Solutions. Pegasus serves thousands of hotel properties and travel agencies around the
world by collecting and consolidating hotel commissions.11
Whereas some airlines have virtually reduced commissions to zero, hotel compa-
nies, such as Marriott, seem to be taking a different approach. By passing a product
knowledge test and being certified as a Preferred Travel Agency, Marriott guarantees
agencies a full 10% commission plus other money-saving and educational benefits.
Travel agencies that do not participate in the program will see their commission rates
reduced to 8%. The program called Hotel Excellence! is available in ten languages and
teaches travel planners how to sell hotel services.
Although many predictions were made about the demise of the travel agent in
an Internet era, the reverse has happened. After a prolonged dip in revenues, travel
agencies began to grow as customers sought service. Travelers soon discovered they
did not have the time or did not care to invest the effort in finding the best deal.
They also were seeking to talk to a person rather than punching buttons to work
their way through an automated call system only to be put on hold. With airlines
scaling back on staffing in call centers, travel agents have gone back to the basics of
providing customer service. The result? Many travel agencies are now experiencing
double-digit growth.12
Three-Level Distribution Channels

Three-level distribution channels involve many of the same activities and character-
istics found in the previously described two-level or indirect-access channels. How-
ever, in addition to travel retailers, they bring in another layer of intermediaries, travel
wholesalers, who assemble and market tours and other tourism products. By doing so,
they facilitate the process of bringing travelers and tourism suppliers together.
Tour Operators
Tour operators are, by definition, business organizations engaged in planning, prepar-
ing, marketing, and, at times, operating vacation tours. The terms packager, wholesale
tour operator, tour operator, tour wholesaler, and wholesaler often are used inter-
changeably. For simplicity, we will use the term tour operator. Some of the larger well-
known wholesalers and operators are listed in Table 4.4.
Tour operators serve to both create and at the same time anticipate demand by pur-
chasing or reserving large blocks of space and services to be resold in the form of tours
in packages. Tour operators do not typically work on a commission basis like travel
agents but on a markup basis. They buy large blocks of services such as airline seats,
hotel rooms, and attraction admission tickets at very favorable prices by guaranteeing
minimum levels of revenues or by making nonrefundable deposits and then resell these
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Table 4.4 Do You Recognize the Names of Any of These Tour Operators?
Abercrombie & Kent International Gogo Worldwide Vacations
American Express Holland America Line–Westours
Certified Vacations Japan & Orient Tours
Collette Travel Service Tauck Tours
Dertravel Services Trafalgar Tours/Contiki Holidays
Globus & Cosmos TUI AG
services at a higher price. Tour operators are a particularly significant intermediary in the
tourism industry because they supply packages for travel agencies to sell as well as buy-
ing services from airlines, cruise lines, hotels, resorts, car rental companies, and many
other tourism suppliers. They usually buy tourism products more than a year in advance,
which relieves suppliers the worry about demand for them to focus on providing quality
products. “Traditionally, wholesalers have provided 60% to 70% of all room revenue
for tourism-driven destinations such as Hawaii, the Caribbean, and Europe.”13
The tour business holds a certain mystique for many people who like to travel and
think that they would like to arrange and package travel and tourism services for others.
However, the tour business is extremely risky. Both tour operators and wholesalers
are an unregulated segment of the industry because there are no entry requirements
for licensing, bonding, or insurance for many countries. Although every segment of
the tourism industry deals with highly perishable services, the problem of perishability
is compounded in the tour business. Once a tour has departed, there is no way to sell
additional seats on the tour and receive revenues for services that have already been
reserved and, in most cases, paid for in advance.
In addition, tour wholesalers and operators often must commit to prices for ser-
vices far in advance and are therefore faced with the potential problems of inflation
and foreign currency fluctuations that may reduce their profit margins. If that weren’t
enough, there are the additional problems of natural disasters, political unrest, and
changing consumer tastes, which are all outside the control of the tour operator.
Realizing all of these potential problems, it becomes critical for successful tour
operators to control costs, competitively price the packages they offer, and market
these packages to the appropriate target market(s). Assembling a package that interests
consumers and then pricing it competitively becomes a tricky issue because tour oper-
ators must work with a very thin markup, usually 20% or less. Getting out the word
on tour packages is also a challenge because most tour operators must develop their
marketing campaigns on limited budgets. Therefore, market segmentation and target-
ing are essential to continued success.
Another specialized layer of the tourism distribution channel is the receptive service
operator (RSO). An RSO is a local company that specializes in handling the needs of
groups traveling to its location. The RSO coordinates (and is often in charge of booking)
the local suppliers serving the needs of the group. In other words, the RSO is in charge of
handling the land arrangements for the group and is therefore sometimes termed a ground
operator. RSOs may work with travel agents in developing packages for groups, and they
also may subcontract with wholesalers in providing better service to tour groups.
Tours
The word tour, as defined by the United States Tour Operators Association, “a trip
taken by a group of people who travel together and follow a pre-planned itinerary.14”
Tour packages include at least two of the following elements: transportation, accom-
modations, meals, entertainment, attractions, and sightseeing activities. Packages vary
widely in the number of elements included and in the structure of the itinerary. Listed
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below are some of the more common types of tour packages. In almost every case, the
company acting as a wholesaler also operates the tours it creates or packages.15
• Independent tour—the least structured tour package. Hotel “escape” weekends
featuring accommodations, some meals, and possibly a rental car qualify as inde-
pendent tours, as does Disney’s Resort Magic package, which includes car rental,
accommodations, and entrance to all of the Walt Disney theme and water parks.
Purchasers of independent tours set their itineraries themselves.
• Foreign independent tours (FITs)/domestic independent tours (DITs)—customized
tours including many elements designed and planned to fulfill the particular needs
of a traveler. FITs and DITs may be designed by a travel agent or by a wholesaler
in consultation with the traveler’s agent.
• Hosted tour—provides buyers with a number of tourism supplier elements plus
the services of a local host who is available to give advice, make special arrange-
ments, and iron out any problems that may occur.
• Escorted tour—the most structured of tour types and usually the most complete in
the elements included for the package price. An escorted tour begins and ends on a
set date and follows a specific, detailed itinerary. A tour escort accompanies tour
members throughout the tour. Most escorted tours use motorcoaches with experi-
enced drivers to transport travelers for all or part of the tour. Escorted tours are very
popular with tourists traveling to exotic locations or in areas of the world where few
members of the native population are likely to speak the traveler’s language.16
Why would a traveler prefer to purchase a tour package rather than buy from
individual tourism suppliers? The reasons are many but benefits include the following:
1. Convenience. Purchasing a package allows the decision-making process to be
shortened so that the traveler does not need to spend a lot of time deciding what to
do and which supplier to use. Often all the details including ground transfers, tip-
ping, and baggage handling are included, alleviating worry about the little things.
2. One-stop shopping. The buying process is also made easier; one payment
covers the cost and paperwork of two or more services. All-inclusive tours can
be virtually cash free and allow the traveler to know how much the trip will
cost without the fear of being “nickeled and dimed” along the way.
3. Cost savings. In most cases, tour packages are less expensive than the cost
if the tourist were to purchase all of its elements separately. Tour wholesalers
are able to take advantage of volume discounts and usually pass on some of
the cost savings to tour purchasers.
4. Special treatment. Because of the volume of business tour operators repre-
sent to service suppliers, tour members tend to receive preferential treatment.
For example, tour group members rarely stand in long lines or park far away
from entrances to attractions.
5. Worry free. When traveling on a hosted or escorted tour, tourists are able to
concentrate on the experiences and new world around them, leaving problems
and details in the hands of tour personnel. In addition, as a participant of an
escorted tour, travelers have a ready-made group of new friends accompany-
ing them, increasing the fun.17
Tour packages are usually sold through retail travel agents who are typically paid
a 10% commission for the selling efforts they provide the tour wholesaler. Travel
agents distribute tour brochures and consult various sources, such as the Official Tour
Directory and Jax Fax Travel Marketing Magazine, published monthly to match client
desires to available tours.
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Consolidators and
Travel Clubs
Consolidators and travel clubs are very
special combinations of wholesalers and
retailers who perform unique tourism dis-
tribution functions. Consolidators buy
excess inventory of unsold airline tickets
and then resell these tickets at discounted
prices through travel agents or, in some
cases, directly to travelers. Travel clubs also
provide an inexpensive and convenient out-
let for members to purchase unused seats
at the last minute. Both consolidators and
travel clubs perform a win–win function as
intermediaries in the distribution channel.
They help airlines sell a highly perishable
service and often provide consumers with
some real bargains in the process.
Where travel agencies are the depart-
ment stores of the tourism industry, con-
solidators and travel clubs are to the airline
industry what factory outlet stores are to
clothing manufacturers. They are an effi-
cient way to move highly perishable inven-
tories of services to shoppers who have the
flexibility to adjust their travel schedules to
take advantage of lower prices on sched-
uled flights for which airlines have not
been able to sell all of their available seats.
Although there may be restrictions and the
frequent fare wars that airlines wage may
make the savings differential smaller, bar-
gains can be substantial. Travel clubs also
Guided tours are still popular among the traveling public. Philip perform the additional function of selling
Enticknap/Dorling Kindersley, Ltd accommodations, car rentals, and other
tourism services at reduced rates.
The Internet provides consolidators with more market opportunity to sell their
inventories. For example, Travelocity’s Special Deals icon links Web surfers to con-
solidators such as Cheap Tickets, Inc. Other service providers such as Priceline and
Hotwire offer airlines a simple way to move distressed inventory.
Event Planners
Organizations and individuals who plan, promote, and deliver meetings, incentive travel,
conventions, and events (often referred to as MICE) bring together every component
of the travel industry. Event planners are responsible for the execution of “temporary
and purposive gatherings of people.”18 The event industry is composed of a diverse spec-
trum of events in terms of their audience and their impact. On one end of the spectrum,
there are mega-events such as the Olympic Games that have an international media reach
and a planning period that begins nearly a decade before the event is held. In the middle
of the spectrum are a variety of national and regional festivals like music festivals or food
festivals and those discussed as in Chapter 9. On the other end of the spectrum, there are
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TOURISM IN ACTION
DYNAMIC PACKAGING
The Internet has permanently altered the way vacation packages are created, marketed, and priced. The newest
technology being leveraged throughout the travel industry is dynamic packaging. Consumers can now purchase
packages from a variety of sites including online agencies, hoteliers, and airlines. The choices and types of options
have never been so broad. Internet travel sales continue to grow rapidly, and package sales have emerged as one
of the leading growth categories. The role of dynamic packaging technology is to bundle all the components cho-
sen by the traveler to create one reservation. Regardless of where the inventory originates, the package that is
created is handled seamlessly as one transaction and requires only one payment from the consumer. It automati-
cally applies rules defined by the suppliers and the travel marketer to build and price travel packages. This package
configuration process determines which components are used, what combinations of components are allowed
or required, and handles inclusions such as taxes, fees, or additional package features. Rules also determine how
the final retail price is computed.
For suppliers and distributors, dynamic packaging facilitates dynamic pricing. It applies pricing to a “package,”
thereby allowing greater margins to be realized by travel marketers and sellers than can be realized by individual
pricing of every component within a package for consumer comparison. Comparison shopping forces suppliers
into the uncomfortable position of commodity pricing. Dynamic packaging allows travel suppliers and sellers to sell
instead on value, features, and benefits.
community based events which are planned to meet the needs of a small group and may
focus on a common interest in the arts, heritage, culture, or faith. Depending on the fund-
ing source, events can be private, public, or even nonprofit in the case of charity events.
Due to the potential for events to benefit the economy in the host destination,
event planning is increasing in its legitimacy as a profession. The International Events
Management Body of Knowledge has been developed to better define the role of event
managers and includes five domains: administration, design, marketing, operations,
and risk management.19 To be successful, event planners must master skills in each of
these domains. There are also a number of certification programs available for plan-
ners to signify their knowledge, experience, and commitment to potential clients.
Meeting planners, sometimes called event or convention planners, are another
important tourism intermediary. The size and scope of their activities in this $82.8 billion
industry segment may go unnoticed, but their impact is tremendous.12 For example:
• Meetings represent $1 out of every $4 spent on air travel
• In the United States, meetings represent $23 billion of the hotel industry’s operat-
ing revenue (36% of all hotel room income), and an even higher percentage among
the business hotels
• Almost four of every ten room nights is used in conjunction with a meeting
• Professional and vocational associations represent 70% of the billions of dollars
spent on meetings
• The number-one factor that associations consider when selecting a meeting site is
quality of service
Meeting planners are employed by corporations, associations, and others who
need their specialized services. The main function of a meeting planner is the detailed
planning of business meetings, incentive travel, educational meetings, conventions,
trade shows, sales meetings, tournaments, executive retreats, reunions, and association
gatherings. Meeting planners, like travel agents, handle many tasks at once. Take a
moment to review Table 4.5, which shows just a sample of the decisions that need to
be made by meeting planners on a daily basis.
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Table 4.5 A Small Sample of Decisions Made by Meeting Planners

How many people will attend the meeting?
What city of destination will you choose to host the meeting?
What types of transportation services will clients need?
What types of food functions must be planned?
• Meeting catering
• Reception catering
• Event/program catering
• Banquet catering
• Festival catering
• Cocktail receptions
What types of support services will be needed?
• Message and mass texting service
• Welcome banners
• Registration assistance
• Welcome packets
• Room blueprints
What types of facilities equipment and supplies will be needed?
• High ceilings (for projections)
• Light controls in each space
• Variety in table size
• Computer/video projection
• Flip charts/white boards
• Mobile communication devices
• Tele-/video-conferencing
• Simultaneous translation
• WiFi access
• Stationery/water on meeting tables
• Audio/sound system
What types of activities need to be planned outside of meeting times?
• Tennis
• Horseback riding
• Golf
• Shopping
• Sightseeing
• Tours
One of the most pressing responsibilities of meeting planners is to control costs

for the organizations they serve. As a result of corporate “belt tightening,” the need
for meeting planners is predicted to expand, and the destinations and number of
sites (both domestic and international) they select will continue to grow. Once again,
technology is playing a key role in improving efficiencies when it comes to man-
aging these functions strategically. Companies such as StarCite provide a suite of
e-products serving the needs of both suppliers and buyers to reduce expenditures and
increase return on investment.
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Meetings and conferences require coordination of efforts of many tourism suppliers.

Pressmaster/Shutterstock
The meetings planned are usually high profile or of strategic importance to the
organization the meeting planner serves, so planning professionals are scrutinized for
the level of service, hospitality, and enthusiasm experienced by meeting participants.
This means that meeting planner must walk a tightrope, balancing cost constraints
with the desires of the meeting attendees.
Research has shown that meeting planners place different weights on supplier
selection criteria at different stages of the purchasing process in relation to their sup-
plier selection. At the initial supplier selection stage, meeting planners are more focused
on “ability of supplier to meet quality specifications.” However, as they continue to
maintain relationships with their suppliers, meeting planners place more importance on
“ability to meet specific delivery schedules.” By taking these factors into consideration
sales personnel can target their presentations and follow-up relationship building calls
to specifically address client needs.20
The concept of incentive travel was introduced in Chapter 2. Incentive tour operators
are specialized in this form of travel arrangement and have professional incentive trip
planners on staff to take care of the details. Incentive trip planners are basically tour
wholesalers. The incentive trip planner is responsible for coordinating the complete
itinerary for a variety of activities that many include social gatherings, business meet-
ings, recreational activities, and opportunities for staff development through team
building exercises. The objective of an incentive trip is to not only recognize top per-
formers within a company or organization, but to also promote morale and motivation
within the attendees. The diverse demographic profile of an incentive group can be a
challenge for the planner, as often the attendees range from relatively new employees
to those with decades of experience.18 Often incentive trips will allow each attendee to
invite a guest which adds another group whose needs planners must anticipate while
designing itineraries. Incentive programs can be designed and purchased through a
variety of sources, as shown in Table 4.6.
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Table 4.6 How Travel Awards Are Purchased*

Corporate travel agency 17%
Direct purchase—airline, hotel, etc. 27%
Retail travel agency 17%
Incentive company/incentive house 31%
Sales promotion/advertising agency 13%
*
Percentages will add to more than 100% as respondents could choose more than one category.
Source: “How Travel Awards Are Purchased,” 2005 Incentive Federation Survey.
Tapping the Power of Multiple Distribution

It is common in the tourism industry to utilize more channel structures to sell their prod-
ucts, a tactic called multiple distribution in marketing. As discussed earlier, the channel
between tourism suppliers and travelers include several intermediaries, such as travel
agencies, tour operators, and incentive and meeting planners. These intermediaries pro-
vide services to both tourism suppliers as well as travelers in the form of delivering infor-
mation, processing purchases and payments, and providing value added services. Tourism
suppliers perform some of these tasks themselves, and at the same time engage multiple
intermediaries to maximize the potential of reaching targeted travelers. For example, Car-
nival is actively developing and using at least five different channels in attempts to gener-
ate enough demand to fill its expanding supply of cabins, that are as follows:
1. Direct channel using Carnival’s Internet site
2. Direct channel using mall locations
3. Indirect channel using traditional travel agents
4. Indirect channel using Internet-based cruise-only agents
5. Indirect channel using last-minute fire sale agencies to fill cabins close to sail-
ing dates
In addition, other cruise lines such as Princess and Norwegian are using tour
packagers to move their inventory. For example, both are now featured occasion-
ally in direct mail catalogs sent by Grand Circle Tours to its huge list of likely trav-
elers. According to one industry expert, “While the number of brick-and-mortar
agencies has continued to decline . . . , the travel generated by the agency com-
munity continues to be strong. And although some of the Internet-based agencies
are among the largest in the country in terms of sales, there is clearly room in the
marketplace for agencies of all types. This will remain the case as the industry
continues to evolve” (p. 16).21
FYI TRIP-CANCELLATION AND TRIP-INTERRUPTION INSURANCE

Trip-cancellation and trip-interruption due to an automobile accident, a are paying in advance for an expen-
insurance policies will provide reim- sudden illness, injury, or death, but sive tour package or cruise, or if you
bursement for financial losses you it doesn’t cover changing your mind. have purchased any type of expen-
might suffer if you can’t begin and S h o u l d yo u b uy t r i p - c a n c e l l a t i o n sive nonrefundable ticket, then the
must cancel a trip or it is interrupted insurance? The answer to this ques- answer may be yes. In all other situ-
while in progress. This insurance will tion could be yes, no, or maybe. If ations, read the fine print and decide
cover such things as missing a flight you are making a large deposit, if you for yourself.
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Tourism Boards and Other Intermediaries

As we have noted, travelers need access to information before and during their trips.
When tourists are seeking general information about travel and locations en route to
their destinations, they often rely on the services of tourism boards. These offices may
range from national tourism offices (which we will learn more about in Chapter 11) to
local chambers of commerce. These information sources help promote tourism activi-
ties on both the individual and the group level by providing information and other ser-
vices. In addition, national, state, provincial, and local tourist offices can be accessed
to obtain information and updates on currency, transportation, restaurants, and more.
Many of these offices also provide toll-free telephone access and/or mobile device apps
to improve customer service.
Because tourism is an important economic activity, state, provincial, and local gov-
ernments are often actively involved in providing tourist information. In fact, tourist
information centers appear to be one of the more important information sources that
visitors use in accessing general information about destinations.22 We will explore more
about the roles that governments play in encouraging tourism expenditures in Chapter 11.
Trade associations of various segments of the tourism industry also play the role of
intermediaries, although the scope of their services and responsibilities vary from asso-
ciation to association, and from country to country. Some trade associations mainly
provide tourism supplier information to travelers, while others also provide product
purchase–related services. Many trade associations advise tourism suppliers regard-
ing consumer trends or product innovation ideas. Different associations, such as hotel
association, travel agency association, and tour operator association, could also work
together to maximize the economic benefits of tourism to all segments of the industry.
The amount of money spent by visitors at the local level helps to determine the type of
organization that will provide general tourist information. In large metropolitan areas or
in cities in the United States where tourism is an important economic activity, you will find
convention and visitors bureaus. These offices are often funded by lodging, restaurant, or
other tourism-related use taxes. In smaller cities, these same information functions would be
provided by the local chambers of commerce. No matter where the operation is located, the
primary functions are providing information for visitors and serving as facilitators in bring-
ing together individual tourists and groups of tourists with tourism suppliers.
The best way to gain information and become familiar with a particular location
and all it has to offer is actually to visit the location. Familiarization trips (also called
“fams” or “fam trips”) are offered to tourism intermediaries by a variety of tour-
ism-related organizations such as governmental agencies, hotels, resorts, convention
and visitors bureaus, and tour operators at low, or no, cost. These trips are designed
to promote tourism in general and acquaint participants with the specific capabilities
of tourism service suppliers. In addition, annual travel trade shows provide continu-
ing education, promotional, and selling opportunities for industry participants. Some,
such as U.S. Travel’s International Pow Wow, which is billed as the travel industry’s
largest international marketplace, are designed to bring travel organizations together.
And Pow Wow does this in a big way, bringing together over 1,000 U.S. travel orga-
nizations and close to 1,200 buyers from over 70 countries.23 Others such as ITB
Berlin, the world’s largest travel trade show, are designed to bring service suppliers
and consumers together. ITB Berlin does this in a huge way, hosting over 10,000
travel-related companies from 180 countries and well over 170,000 attendees each
year.24 Marketing communications through websites, directories, advertising, blogs,
public relations, and personal selling can all be used to provide travelers and tourism
intermediaries with information they need about benefits, prices, and availability.
During the trip planning phase, it has become popular to rely on blogs or social
media sites for travel and destination insights. However, a note of caution is in order.
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TOURISM IN ACTION
THE INTERNET: IT’S NOT ONE-STOP SHOPPING
Need to book a flight or a hotel room? It’s simple—just hop on the Information Superhighway and you’re through,
right? Better slow down; the Internet isn’t the place to practice one-stop shopping. Your first stop might be one
of the “omnibus” travel sites (i.e., Expedia, Google, Travelocity, and Orbitz), but these sites often don’t offer the
best deal out there. Check out sites such as Kayak.com and Sidestep.com as well as consolidator sites such as
Hotels.com and discount sites such as Hotwire.com. Next, try destination sites such as Vegas.com for special
deals. Consider airfare/hotel/rental car package deals, too, because suppliers often will price services superlow
if they don’t have to disclose the actual price of each component being offered. And, if you don’t travel much or
if you enjoy the personal touch of service, you may still want to maintain a good relationship with a travel agent.
Many agents, due to expertise and experience, can find even more and better deals than you can on your own.
Anyone can post to a blog, and governmental entities as well as private organizations
often pay to receive positive comments. Some high-profile examples of sponsored
bloggers include The Netherlands Board of Tourism & Conventions, Visit Milwaukee,
and Pennsylvania’s “Roadtripper” project. They are fun to read and provide some use-
ful information to a consumer, but don’t rely on the information contained in just one
blog. At the same time, if you are a tourism service provider, don’t overlook the power
of having your organization’s name in the blogging world.25
Selling Adds a Personal Touch

No matter which channels are used to distribute tourism services, personal selling
skills provide a key ingredient to creating customer satisfaction by adding the personal
touch. Personal selling is extensively used by sales representatives of tourism suppliers,
travel agents, and tour operators. Personal selling is a communication process that
includes discovering customer needs, finding the appropriate services to meet these
needs, and then persuading the customer to purchase these services. Effective salespeo-
ple are more than just order takers; they cultivate long-term customer relationships as
part of a process called customer relationship management, creating win–win situa-
tions for both customers and suppliers. We will explore more about customer relation-
ship management in the next chapter.
Most airlines, car rental services, hotel chains, resorts, convention centers, and cruise
lines maintain their own sales force and reservations staff. These individuals respond to
inquiries, actively solicit business, or engage in missionary sales efforts. Missionary sales-
people call on travel agencies and other tourism service suppliers, such as tour operators,
to answer questions, provide brochures, and offer other information services—in short,
to educate others about their company’s services so those services may be sold more
effectively. Let’s take a closer look at what it takes to create a successful sales effort.
Close your eyes for a moment and think about some very special place you have
visited. Now, think about how you would describe this place to your best friend, using
just words, no pictures allowed. Could you paint a vivid verbal picture that would
excite your friend’s imagination? The ability to connect with customers through visual
images is a key ingredient to successful selling and it begins with product knowledge. A
Louis Harris Travel Agency Marketing Survey revealed that “consumers want a travel
counselor who’s an expert, an opinion broker and a trusted ally who can provide
insider knowledge and wise counsel that’s difficult or impossible for them to match,
even through a guidebook or Internet research” (p. 9).26 In addition to being customer
oriented and acquiring detailed knowledge of the services they are selling, effective
salespeople must be likable, dependable, and honest.
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Acquiring Product Knowledge

The ability to excite, give details, and help others envi-
sion places near and far, known or unknown, is one of
the first skills you will need in selling tourism services.
Customers must have confidence in your ability to assess
their needs and make recommendations that will not
only satisfy those needs but also delight them so they
return again and again. It’s hard to sell an experience if
you don’t have extensive product knowledge. A success-
ful salesperson is constantly gathering additional knowl-
edge that will be useful to existing and potential clients.
Approaching the Client

Armed with the confidence of product knowledge,
salespeople are prepared to serve their clients. The
approach begins with the salesperson’s first contact
with a client. This contact may be over the phone,
through email, or in person. No matter how the con-
tact is initiated, the salesperson has a responsibility to
create a positive and professional impression through
Professional sales training adds knowledge and common business courtesies. When clients contact or
polish to the sales force. Photo by Ron Hilliard approach you, stop what you are doing and focus all of
your attention on them.
Qualifying the Client

Clients come in many varieties, ranging from casual information seekers to qualified
buyers. Although a plethora of information is available through the Internet, people
continue to seek the personal touch that can come only from human interface. Many
of today’s clients will have already completed much of their basic homework, thanks
to the Internet. They will be familiar with schedules, prices, and service offerings,
meaning they will be shopping for a “deal.” They know what they want and are only
looking for help and, they hope, a better price, using the salesperson as a facilitator
in this process. Others will rely on your knowledge, skills, and ability to identify
and satisfy their individual wants and needs, taking them through every step of the
process.
Whether these contacts are made over the phone, through the Internet, or in
person, your task is to identify and serve each client’s need. Qualifying the customer
entails asking questions to discover his or her specific needs, budgetary considerations,
and the necessary personal information that can be used to make the sales presenta-
tion. Qualifying clients allows you to determine whether or not you have a product
or service to meet their needs and then tailor your presentation to meet those needs.
You should not waste time on unqualified clients, but don’t be rude. Even if they don’t
make a purchase today, treating everyone with courtesy today may result in sales or
positive comments to potential clients tomorrow.
Making the Sales Presentation

Your assessment of clients’ intentions won’t always be perfect, but with a little prac-
tice, your skills in dealing with clients will improve. Sales presentations provide
opportunities for the salesperson to present the features and benefits of a service or
package of services that will meet the client’s needs. This may be as simple as making a
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recommendation as to the best airline schedule or as complex as presenting a complete

sales proposal for a major convention. The sales tools used in the presentation may
include brochures, PowerPoint presentations, videos, testimonial letters from satisfied
clients, reprints of travel articles, social media clips, or virtual tours through websites.
Successful selling means that you will adapt your presentation to meet your cli-
ents’ needs by selling benefits rather than features. Always deal with clients on the
basis that you will make the sale whether today or in the future, building the founda-
tion for long-term relationships.
Closing the Sale

Clients may be ready to purchase when the call arrives or the presentation is made,
but it may also be necessary to overcome objections or resistance. Negotiations involve
responding to objections or concerns and discovering how to meet client needs. Many
objections can be cleared up through active listening and clarification. However, sales-
people should anticipate possible objections such as mismatches between brand qual-
ity and price perceptions, time of year, or seasonality concerns. Remember, special
requests should be met whenever possible.
Be prepared to counter or overcome these resistance points effectively to close the sale.
The sale is formally closed when payment is made; the reservation is confirmed; a deposit
is made; and/or the contract is signed. Don’t make the common mistake of continuing to
sell after the sale has been made. This may result in losing the sale. Always look for verbal
and nonverbal signals, as shown in Table 4.7, that a client is ready to commit.
Following Up
Follow-up is the final step in the selling process. Providing service after the sale cre-
ates customer loyalty and satisfaction. Salespeople can create repeat business by letting
their clients know they truly care about them as individuals. Personalization can even
be achieved in telephone and electronic interactions. Smile when you talk on the phone
and always use your customer’s name in all interactions. Your personal warmth will
come through to the person on the other end of the call or in your messages.
Follow-up is a team effort, requiring everyone in the organization to pitch in, not
just members of the sales staff. Tourism is a people business, and everyone in the indus-
try who has contact with customers is a salesperson, whether he or she knows it or not.
Even if your job is not specifically sales related, you are still responsible for building cus-
tomer relations, which can lead to future sales. The Walt Disney Company epitomizes this
philosophy by training all employees (cast members), even park cleaners, that they are
always “on stage” as customer service representatives. When they step into the “park” in
uniform, they are there not only to do their jobs but also to help customers by answering
questions and providing directions. The same roles should be played in every tourism set-
ting by everyone who serves in supporting roles for those who actively sell the experience.
Table 4.7 Common Closing Signals

Stop talking. If the clients don’t have any more questions, ask for their business.
When clients begin asking specific questions that personalize the conversation, make the assumption that they
are ready to buy!
When clients agree with how your product or service descriptions meet their needs, they are probably ready to buy.
When clients ask about forms of payment, deposit requirements, or making reservations, it is time to close.
Pay particular attention to body language and voice tone. Any of these cues may signal it’s time to close: smiles,
nods, relaxation, and friendly voice tones.
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Building Relationships
In addition to following the steps of the selling process, a good salesperson provides
consistent high-quality service to clients. Returning phone calls and emails promptly,
solving problems (building relationships), providing thank-you cards, or notifying cli-
ents of special sales or special offers serve as simple tokens of appreciation and can all
go a long way toward creating customer loyalty.
Research has shown that salespeople who engage in consultative behaviors that
demonstrate expertise focused on understanding and meeting customer’s needs create
strong personal relationships, trust, and loyalty.27 The use of social media also influ-
ences value creation both for customers and salespersons. Use of social media by sales-
person could help to increase service behaviors (e.g., information communications,
customer service, empathy, maintaining relationships, and information sharing) and
value creation through improved customer relationships by generating useful content
that positions themselves as “experts” in the distribution chain.28
Even if you never plan a career in sales, sooner or later, you will be in a selling sit-
uation. From landing your first professional job or asking for a promotion to making a
transfer request or asking for a raise, you are selling your most valuable asset—yourself!
Whether you like it or not, you are judged by the way you look and how you
present yourself in person, on the phone, and in written communications. Long before
you utter a word or extend your hand, opinions have been formed. Paying attention to
details in all of these areas no matter what type or in which setting you find yourself,
from formal to informal, will set you apart as a professional. For more information
and specific recommendations for successfully navigating the complexities of the busi-
ness landscape, see Guide to Business Etiquette.29
Summary
Tourism is a service-oriented industry that focuses on several types of distribution channels for providing con-
meeting the needs of the traveling public. The success and sumers with access to the suppliers of tourism services,
profitability of tourism service suppliers depend on their ranging from direct access, travel agents (both traditional
ability to reach and meet the needs of selected target mar- and online), and tour operators to more complex multi-
kets effectively and efficiently. With changes in technology level channels involving several intermediaries.
and challenges to the commission system for intermediar- Tourists need information to make informed buy-
ies, the distribution landscape is continuously evolving. ing decisions, and there is no shortage of available
As channel relationships change, suppliers in the tour- information thanks to the Internet. This information
ism industry face many new and unique marketing chal- may range from general facts about a location to spe-
lenges. The number of options for reaching customers with cific details concerning schedules and availability.
information about service offerings and booking reserva- Organizations such as conventions and visitors bureaus
tions continues to grow. However, the fact that the services and local chambers of commerce have been developed
they provide are highly perishable and cannot be placed in to provide general tourism information. Tourism ser-
inventory remains the same. In addition, with some tourism vice suppliers are learning to utilize a combination of
services often involving a great deal of customer engage- information sources from the personal touch of sales-
ment and employee contact, the need for well-trained people to the 24/7 availability of online information to
employees remains a constant management challenge. supply the specific information needs of the traveling
Although providing profitable levels of customer public. With improvements in information technology,
service is important, it is equally important to make sure the ways we access and use tourism information have
that these services reach the intended markets. There are changed radically and will continue to evolve.
You Decide
Brenda Baumgardner, manager of Discovery Travel, looked trip, only she would be hosted by a client rather than a
at the letter one more time. The offer sounded too good group of tourism service suppliers.
to pass up! It provided five all-expense-paid days at the The letter had come from John Smithers, Corpo-
Canyon Fire Resort and an opportunity to generate more rate Director of Marketing at a local manufacturing
business for her travel agency. It would be similar to a fam company. He had invited Brenda to accompany him on
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the company’s annual incentive award trip. The Janu- Brenda had visited Canyon Fire on previous occa-
ary date was perfect for Brenda. Business was usually sions and looked forward to a chance to return and enjoy
slow at that time of year, and the chance to leave the a little fun in the sun. Although she wanted to experience
snow behind for the warmth of the desert was appeal- the pampering of an incentive trip firsthand, she was a bit
ing. Besides, the enclosed itinerary of activities looked troubled by the invitation. Brenda’s agency handled many
interesting. of the travel arrangements for John’s sales managers, who
John had indicated in the letter that he was con- had told her that the company was considering establish-
sidering having his office coordinate some of the travel ing an in-house travel agency.
and meeting planning activities for this annual event. He Although Brenda wanted to accept the invitation, she
had typically turned this task over to an incentive travel was concerned from both a personal and business perspec-
company, but recent budget cuts might force him to scale tive. How would her staff and friends view the personal
back the program or consider other travel awards. John invitation? Would accepting the invitation create a sense
stated that his staff could handle some of the administra- of obligation and limit her negotiating abilities in future
tive details, but he might need Brenda’s agency to help business dealings with John? Would the sales managers
coordinate travel and accommodation needs for future for John’s company understand that she was on a business
meetings. John had closed the letter by asking Brenda to trip and not simply there for pleasure? If you were Brenda,
call him with an answer by the end of next week. what would you do?
Net Tour
To get you started on exploring Internet links for this www.itb-berlin.de/en/
chapter, please see www.conventionindustry.org
www.asta.com www/mpiweb.org
www.arccorp.com www.amadeus.com
www.ustoa.com www.ectaa.org/
iccaworld.com www.wmph.com
www.phocuswright.com/
1. Explain the functions of intermediaries in tourism dis- 4. How has the Internet changed the distribution of tour-
tribution channels. ism services?
2. What are the differences in one-level, two-level, and 5. Explain the functions of tour operators and wholesalers.
three-level tourism distribution channels? 6. How is information about tourism services made avail-
3. Why have travel agents remained an important link in able to the traveling public?
the distribution of tourism services? 7. Why have personal selling skills remained important
for tourism services professionals?

1. Make an appointment with a travel agent at his or her 4. Using the Internet, perform the necessary steps to make
place of business to discuss the impact of the Internet airline and hotel reservations at the destination of your
on his or her travel agency. Also ask what type of edu- choice. Write down the steps and Web addresses you
cation and training will be necessary to be successful visited in completing this task.
in the future. While you are at the agency, ask for a 5. Visit the Thomson website (http://www.thomson
demonstration of how the GDS/CRS is used to make .co.uk) and select an all-inclusive tour package. List
reservations with tourism suppliers. all of the tourism suppliers that have been linked
2. Look for the following headings in the Yellow Pages together to make this tour package possible. Suggest
or business section of your local phone book: “Tourist how Thomson could improve the attractiveness of the
Information” and “Tours.” Call or visit one organiza- all-inclusive package.
tion. Prepare a brief outline describing the information 6. Visit, call, or chat online with a travel agent as a potential
you received from your contact. vacationer. Ask about the various possibilities of taking a
3. Find an article describing how consumers can use trip and ask lots of questions about the different packages
information technology to access tourism information. and destinations. What do you think are the necessary
Prepare a brief (half-page) summary and copy of the skills and characteristics of an effective travel agent?
article.
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Glossary
Airlines Reporting Corporation (ARC) The clearinghouse Hosted tour A tour in which a host is available at each
for receiving commission payments for airline ticket sales. major tour destination to welcome guests, solve prob-
All-inclusive Single price for all or nearly all major ser- lems, and answer questions.
vices provided in a tour, resort, or cruise package. Independent tour A tour that allows the flexibil-
Call centers Centralized locations designed and managed ity to travel independently while taking advantage
to handle large volumes of incoming telephone inqui- of prearranged services and rates based on volume
ries, in many cases on a 24/7 basis. discounts.
Commissions The percentage paid to a sales agent Intermediary Firms that help tourism suppliers locate
(travel agent) by tourism suppliers for booking travel customers and make sales to them, including tour oper-
arrangements. ators and travel agencies.
Computer reservation systems (CRSs) Computer hard- Itinerary A detailed schedule of a trip.
ware and software that allow travel agents to tap into Markup Adding a percentage to the cost of a good or
global distribution systems. service to arrive at a selling price.
Consolidators Wholesalers who buy excess inventory of Meeting planner An individual who specializes in plan-
unsold airline tickets and then resell these tickets at dis- ning and coordinating all the details of meetings, con-
counted prices through travel agents or, in some cases, ferences, or events.
directly to travelers. Missionary sales Sales calls made by individuals to retail
Consortium An affiliation of privately owned compa- travel agencies and other tourism industry interme-
nies to improve business operations and gain the nec- diaries to answer questions and educate them about
essary volume of business that can lead to improved the company’s services so that they may be sold more
profitability. effectively.
Customer Relationship Management Understand- One-level distribution channels The simplest form of dis-
ing customer needs and building relationships by tribution, in which the supplier deals directly with the
analyzing databases of information from multiple consumer without the services of intermediaries.
sources including websites, emails, social media, and Overrides Additional bonuses offered to travel agencies
other customer touch points to increase sales and beyond their usual commission to encourage the agency
profitability. to sell more tickets.
Domestic independent tour (DIT) Customized domestic Personal selling A communications process that includes
tour including many elements, designed and planned discovering customer needs, finding the appropriate
to fulfill the particular needs of a traveler; may be services to meet these needs, and then persuading cus-
designed by a travel agent or by a wholesaler in consul- tomers to purchase these services.
tation with the traveler’s agent. Receptive service operator (RSO) (ground operator) A
Dynamic packaging The ability to aggregate multiple local company that specializes in handling the needs of
tourism service supplier offerings (e.g., air, hotel, and groups traveling to its location.
car) in real time into a package. Three-level distribution channels Distribution chan-
Escorted tour An all-inclusive tour with a structured itin- nels in which two or more channel members, such as
erary and a guide who accompanies the guests. tour operators or wholesalers serve as intermediaries
Familiarization trips (also called “fams” or “fam trips”) between the supplier and the consumer.
Trips offered by governmental tourism agencies, Tour A product that includes at least two of the follow-
hotels, resorts, and tour operators at low or no cost to ing elements: transportation, accommodations, meals,
acquaint travel salespeople (typically travel agents) with entertainment, attractions, and sightseeing activities. It
the products and services they offer. can vary widely in the number of elements included and
Foreign independent tour (FIT) Customized foreign tour in the structure of the itinerary.
including many elements, designed and planned to ful- Tour operator A business entity engaged in the planning,
fill the particular needs of a traveler; may be designed preparing, marketing, making of reservations, and, at
by a travel agent or by a wholesaler in consultation times, operating vacation tours.
with the traveler’s agent. Tour package Two or more travel services put together by
Franchise A license to operate a tourism service busi- a tour operator, such as air transportation, accommo-
ness such as a travel agency or hotel with the benefit of dations, meals, ground transportation, and attractions.
trademarks, training, standardized supplies, operating Travel agent A sales specialist in tourism services.
manual, and procedures of the franchiser. Travel clubs Membership organizations designed to serve
Global distribution systems (GDSs) Worldwide interor- the needs of last-minute leisure travelers at bargain prices.
ganization information systems that travel agencies use Two-level distribution channels Distribution channels in
in selling tourism services. which an additional channel member, such as a travel
Ground transfers Short-distance transportation between ser- agent, serves as an intermediary between the supplier
vice providers, most frequently provided as part of a tour. and the consumer.
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Accessed: December 2, 2016. 29. Cook, R. A., and Cook, G. O. (2010). Guide to
15. Meeting industry statistics. (1999, September 27). Business Etiquette (2nd ed.). Upper Saddle River,
Meeting Professional, 19(9). NJ: Prentice Hall.
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CHAPTER 5
Capturing Technology’s Competitive
Advantages
Technology makes the world a new place.
—Shoshana Zuboff
LEARNING OBJECTIVES
1. Describe some of the technological trends that 5. Describe how technology can enhance customer
are shaping operating practices of tourism ser- service.
vice suppliers. 6. Describe how the Internet has changed tourism
2. Describe how technology can enhance productivity. operations.
3. Describe how technology can improve both inter- 7. Describe how revenue management has improved
nal and external communications. the financial performance of tourism service
4. Describe how technological changes will have an suppliers.
impact on the future of the tourism industry.
CHAPTER OUTLINE
Staying on the Cutting Edge Improving Profitability
Introduction Operational Considerations
Revenue Management in Practice
Improving Operating Efficiency and
Effectiveness Summary
Management Information Systems You Decide
Point-of-Sale Systems Net Tour
Property Management Systems
Providing Customer Convenience and
Enhancing Service
Glossary
Changing Communication and Distribution
Channels References
Internet and Travel Product Distribution
Internet-Based Distribution for Hotels
Internet as a Travel Tool
The Power of User-Generated Content
130
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Chapter 5 ▸ Capturing Technology’s Competitive Advantages 131
Staying on the Cutting Edge

How do hospitality companies stay on the cutting edge of technology? Technolog-
ical innovation that seeks to enhance the guest experience has been the answer for
Consulting & Leading Hotels Services SA (CLHS). From its home office in Lugano in
Switzerland, the company has created a Customer Relationship Management (CRM)
web application, Hoxell (a combination of “Hospitality” and “Excellence”). Hotels
such as Le Grand Hôtel, Cannes, are using the web platform in order to integrate the
hotel’s internal and external relationships and management in a single program.
How does this work in practice? Let us consider the following scenario. A guest
has dust allergy and staying in hotels can be a very stressful experience. This isn’t a
worry because the guest can fully customize his/her stay before arrival. For instance, a
personal MyPage is created that enables the guest to select the desired room tempera-
ture and pillow type—a feature that is welcomed not just by allergy sufferers. MyPage
even allows guests to customize the contents of the mini bar! After the stay, guests
receive a “welcome home” email, enabling the guest to provide feedback about the
hotel experience. All in all, a direct and personal relationship between the hotel and
the guest is managed before, during, and after the stay.
Moreover, the application can improve the effectiveness and efficiency of house-
keeping tasks. This in turn will also improve the overall customer experience. Each
member of the housekeeping staff is equipped with a tablet that not only optimizes
workflow but also facilitates the exchange of information. For example, the guest no
longer needs to wait for the receptionist to call housekeeping to find whether the desig-
nated room is ready for check-in. With a tap of the finger, the housekeeper can inform
reception when the room is ready to be occupied. Excel sheets are no longer required!
How often have guests discovered that a lightbulb is faulty or the battery in the remote
control is low? This is certainly annoying—ask any guest! The housekeeper can use the
tablet in order to notify in-room malfunctions, so that they can be fixed right away.
No need for forms and other paperwork!
MyPage, an integral feature of the Hoxell application. Photo courtesy of CLHS
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Technology development while adding the all-important human touch can improve
customer satisfaction and ultimately engage the guest in a meaningful relationship. As the
recipient of numerous industry awards, CLHS has built a strong reputation within the hos-
pitality sector. However, CLHS should not rest on their laurels. Not only is the consumer
behavior changing, technology is also advancing. Continuous innovation will be a corner-
stone of future success.
Introduction
Technology, which we broadly define as the use of new knowledge and tools to
improve productivity and systems, has created both challenges and opportunities for
tourism service providers. Nowhere have technological advances been more evident
than in computing capabilities. As data storage capacities expand, processing speeds
seem to grow exponentially, all at lower and lower costs, permitting the power of
information technology to be within the reach of almost every organization. The same
technology that is driving the information revolution has spawned other innovative
uses from point-of-sale (POS) systems to enterprise resource planning (ERP) systems.
In this chapter, we will explore the challenges posed by technological advances and
innovations as well as the benefits being derived as they are adopted by tourism service
suppliers, both large and small. For a glimpse at how technology affects these suppli-
ers, take a look at Figure 5.1.
Even with the demonstrated benefits of technological advancements, some tourism
service providers have been reluctant to embrace new technologies, but competitive
pressures and rising labor costs are breaking down these barriers. Fears of losing
human connectivity that has historically been the foundation of hospitality, learning
new skills, and the costs of technological applications have been the typical reasons
voiced for this reluctance. Although early adopters did experience some of these
problems, they soon progressed through the learning curve (slowly at first and then
more rapidly with time and experience) and achieved many benefits, both financial
and operational, from their commitment and investment. The outcome from these
investments? Enhanced productivity, improved communications, and enhanced
FIGURE 5.1
Technology’s impact on
tourism service suppliers.
Profitability
Customer
Communications Technology service
Productivity
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customer service leading to improved profitability and a competitive advantage. Let’s

take a look at how the technological revolution is transforming the tourism industry.
Improving Operating Efficiency and Effectiveness

In the face of rising wages, increasing input costs, and intensifying competition, tour-
ism service suppliers have been forced to make cuts in staff size, increase productivity,
and rethink marketing efforts. Doing things the same old traditional ways no longer
seems to be working. For example, food-service operators who traditionally planned
for and staffed stand-alone kitchens have now adopted the use of central kitchens,
allowing a single large operation to provide a variety of menu items to several satellite
dining locations with fewer preparation and production employees, less equipment,
and centralized purchasing and production planning.
Staffing software allows supervisors to schedule employees in key time slots to meet
peak customer demands while limiting coverage during slack times. Advances in com-
munication technologies and decreasing costs for mobile devices make internal ordering
and inventory stocking more efficient by allowing employees to communicate through
remote devices. Dining room and housekeeping employees can transmit orders, rooms’
status, and inventory needs through wireless headsets and handheld order-entry equip-
ment. These and many other technological innovations have evolved as tourism ser-
vice suppliers search for solutions to enhance customer service, respond to operational
demands, and improve profitability.
Recognizing the fact that knowledge is as important, if not a more important asset; than
land, capital, and labor in creating a competitive advantage for hospitality organizations
highlights the importance of information technology in organizational success. By harness-
ing the value of this asset with the help of technology, hospitality companies could establish
an efficient and effective system to create, accumulate, transfer, and use knowledge.1
Management Information Systems

Management information systems (MIS) or information systems provide the backbone
for operational decisions. They are computer-based systems designed to collect and
store data and then provide information for planning, decision making, and problem
solving. Deciding what information systems to use, whether to develop applications
in-house or buy them, and then whether they should be centralized or dispersed to the
property or store level are only a few of the decisions facing chief information officers
and information technology professionals.
To see where participants in the tourism industry might be heading as they grapple
with these questions, we can once again turn to the pioneering work of the airlines.
By necessity, most of the information management functions for the airlines and other
transportation service providers were centralized for operational efficiencies and profit
FYI RFIDs
Radio frequency identification devices RFIDs use radio waves to identify peo- require a direct line of sight to be read,
(RFIDs) are being used to control hotel ple or objects automatically. These tags and multiple tags can be read at one
guest room locks, to track inventory, and are different from the bar-coded tags time, creating opportunities for ticketing,
for a variety of other uses for which low- currently being used by airlines to track identification verification, and something
cost tracking and security are needed. the location of baggage. RFIDs do not as complex as tour group coordination.
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Table 5.1 Examples of Management Information System Features

Accounts receivables Auditing and analysis
Climate control Customer problems
Customer profiles and preferences Customer relations
Financials Food production management
Housekeeping Maintenance
Reservations and table management Retail outlets
Revenue management Sales and catering
Security Staffing
Standing orders and preorders Telephones and televisions
Web ordering Web reporting
improvement. However, many of the MIS for restaurants, hotels, and car rental com-
panies were initially implemented at the local level with the same profit motive, but
with an eye toward enhancing productivity and improving customer service.
Points of data input for these systems may be found at the time reservations are
made, when orders are entered into a POS device, or when guests check in. Retrieving
information from any of these input points can aid in property- (a term used to describe
individual hotels, motels, and resorts) and store- (a term used to describe individual food
service units) level decision making, but aggregating these data across local and regional
boundaries can also improve financial, management, and marketing decisions. Each of
these functions can be thought of as a module. For example, reservations management
systems, back office accounting systems, and human resource management systems have
been in use for years. Today, lodging companies have centralized these programs, mov-
ing them from individual properties to corporate offices. This allows software updates
to be made once, instead of at various times in locations, that may be spread around the
world.2 Table 5.1 provides just a few examples of the many individual tasks that can be
accomplished with integrated data retrieval and analysis programs.
Similar integrated management systems are available for restaurants, casinos, cruise
lines, car rental agencies, and theme parks. Total integration through ERP systems takes
the concept of MIS to a higher level of integration by combining all information sources,
subsystems, and processes into one unified system. For example, an ERP system would
incorporate everything listed in Table 5.1 and more, allowing every department and
function within a hotel or resort, even an entire chain in diverse geographic locations, to
store and/or retrieve information on a real-time basis. Everything from purchasing and
warehousing to payroll and sales and marketing would be managed by one system.
Point-of-Sale Systems
Point-of-Sale (POS) systems are being integrated into MIS to improve foodservice effi-
ciency and profitability at a staggering pace. They are no longer just glorified cash reg-
isters. POS systems for restaurants, with intuitive touch screens, reduce training time
for servers and cashiers, reduce input errors and waste, and improve customer service.
These same systems, designed to:
• Process reservations,
• Manage wait lists,
• Balance table assignments,
• Record and track customer orders,
• Process debit and credit cards,
• Reduce credit card expenses,
• Manage inventory,
M05_COOK1670_06_GE_C05.indd 134 02/06/17 9:36 AM

• Manage menus, and

• Provide data to other networked systems, freeing up time once devoted to report
preparation and analysis.
Computer software suppliers are constantly updating their systems, and foodser-
vice operators are eagerly embracing and purchasing system enhancements. Touch
screen and wireless systems are quickly becoming the standard, allowing food servers
to enter customer orders without having to make unnecessary trips to the kitchen. The
kitchen staff notifies the server via a vibrating pager with a digital readout when orders
are ready. Newer advances allow servers to place orders using handheld devices and
server voice recognition systems. These new systems will make it possible for servers to
remain in the dining area to provide customers with more personalized attention.
In addition to improving the flow of information from the wait staff to the kitchen
production staff, the real-time data also improve purchasing and inventory controls.
Wider wireless local area networks are giving properties with multiple food service
outlets the ability to integrate information and consolidate operations. Consolidated
data accumulated by a chain or a POS provider are available via an Internet site. Prof-
itability as well as enhanced food quality is achieved by keeping inventories lower
through rapid turnover. The leading POS systems offer an instant multilocation inter-
face, so that sales, labor, inventory, and purchasing information can be shared on
demand. This easy access of information creates a cost-saving environment through
centralized data storage. These databases create powerful tools for making improved
marketing, management, and financial decisions as reports can be generated by the
day, hour, and minute.
Property Management Systems

For hotels and resorts, bringing each of these functions and other applications together
into a unified program creates a property management system (PMS). PMSs combine
computer hardware and software into an integrated information system. These sys-
tems provide a central point for accumulated data and integrate a variety of activities
at the property level such as:
• Reservations (Internet, central reservation, and GDS reservations),
• Pricing and revenue management,
• Guest profile,
• Guest check in and check out,
• Electronic keys,
• Telephone, messaging, and television activation,
• Maintaining guest folios (revenue recognition),
• Updating room status and housekeeping data,
• Combining night audit information and reports,
• Maintaining employee payroll records,
• Updating inventory records,
• Creating financial statements,
• Tracking travel agency bookings and commissions, and
• Tracking the effectiveness of marketing programs.
These systems have been further enhanced by another important development in the
use of management information technology—enterprise systems—that combine infor-
mation for multiple properties. Enterprise systems present a new model of corporate
computing. They allow companies to replace their existing information systems, which are
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Table 5.2 Uses of Data-Mining Information in Hotel Marketing

• Determine usage patterns of hotel facilities by time slots and customer groups
• Identify micro market segments among in-house guests to provide customized services
• Evaluate training needs based on the nature and location of service failures
• Refine distribution channel management based on timing and volume of reservations from various sources
• Evaluate menu item popularity and profitability (menu engineering)
• Optimize website design based on visitor browsing patterns and click-to-book conversions
often incompatible with one another, with a single, integrated system. An enterprise system
enables a company to integrate the data used throughout its entire organization. By stream-
lining data flows throughout an organization, these MIS are delivering dramatic gains in
operational efficiency and profitability. The information generated from these databases
can be mined and used for a variety of marketing programs as shown in Table 5.2.
Providing Customer Convenience and Enhancing Service

The do-it-yourself approach to customer service met with some initial resistance, but once
customers became comfortable with on-demand services, these technologies spread rap-
idly. Nowadays, travelers are so accustomed to self-service technologies some even prefer
the do-it-yourself option rather than traditional face-to-face personal service. For exam-
ple, travelers can now book a flight online as well as check in and print out boarding pass
at home or in a hotel lobby, or at the airport using a self-service kiosk. Or, as more and
more travelers prefer, they are using their mobile devices for all of these functions. Similar
options are available for hotel stays, train travel, and attraction visits. Some online tour
operators allow travelers to custom design their own travel packages, or dynamic packag-
ing as explained in Chapter 4, based on their preferences and budget.
Many quick service restaurants have installed touch screen kiosks at busy stores to
allow customers to place their own orders. Casual dining restaurants have also placed
ordering device on the table for diners to make order themselves. Many tourist attractions
offer audio or video “tour guides” so that visitors can have an informed visit at their own
pace. Tourist boards have also begun offering apps for consumer mobile devices for visitors
to download. These apps provide instant, in-situ information about restaurants, hotels,
shops, and attractions to orient visitors of the local offerings. These technologies cer-
tainly reduced the labor cost for operators, but ultimately customer service was improved.
Shorter waits in line, reduced transaction times, and the ability to make changes without
explaining the rationale for the changes were just a few of the improvements. With the aid
of technology, including social media, user-generated content, video, mobile application,
location-based services, and other new media and devices, consumers are more informed
of the tourism products and more engaged in travel-related activities so as to enhance their
consumption experience. An extra benefit to international travelers is that the self service
option removes some uncomfortable moments due to language barriers.
Handheld devices and tablet computers are also aiding employees in the service deliv-
ery process. Airlines began using these devices to track baggage, but their use in many
other customer service applications has led to their widespread adoption by other tourism
service suppliers. Restaurants, always keen on finding new ways to improve customer ser-
vice and reduce costs, are finding handheld POS devices to be an invaluable asset. The use
of these devices to place an order can save an average of four minutes over the traditional
POS system, freeing more time to focus on the customer.3 Hotels have also used handheld
devices to offer check-in service en route for guests who use their airport transportation
service upon arrival. Technologically advanced hotels have developed apps to allow guests
to check in and check out; make service requests, from wake up call to room service, on
their mobile devices whether they are in the hotel or out and about.
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FYI BEACONS
Beacons can detect when Bluetooth- When a pre-registered guest enters also alerting them of gate changes
enabled devices are approaching a hotel, it triggers a check-in alert to and flight delays. As a tourist wan-
and can then send tourists infor- their phone where they can choose ders in an unfamiliar city, beacons
mation that is relevant to them in their room number and receive key- can send information for sales at gift
that particular setting. The settings less access bypassing the front desk shops or reviews of nearby restau-
where beacons can be used are only entirely. Navigating large places rants and even provide notification
limited by suppliers’ imaginations. like airports or busy train stations is of impending weather. In addition to
Museums become interactive when easier for the traveler when a set of having their Bluetooth enabled, some
a visitor walks up to an exhibit and beacons provides them with a con- locations require an app download to
the dates and description of the dis- stantly updating map and directions receive all the benefits of information
play pop up on their phone screen. based on their current location and that can be derived from beacons.
Geo-based technology, such as car navigation systems, geo-based software and

applications on personal computers or mobile technology, location-based portable
recommender systems, and/or GPS-based devices for outdoor activities, is an import-
ant element in daily life as well as travel experiences. Geo-based technology helps
people to identify the unique features of the current place, thus establishing a sense of
orientation. It provides opportunities for tourists to sense the different qualities of the
destination and recognize that the destination is distinguishable from other places.4
Database marketing, based on data mining, is aiding tourism suppliers in targeting
microsegments of their markets and customizing marketing mixes to fulfill the needs
of specific travelers. Because of seemingly endless capacity of cloud-based storage mar-
keters can access and rapidly sift through vast amounts of information, allowing them
to build immense databases providing extremely detailed profiles of prospective con-
sumers. Information in the database could come from a variety of sources, including
customer provided information upon reservation or joining frequent guest program,
employee observation, consumption record, guest complaint, and customer survey.
Web browsers’ behaviors, such as searches and product click-throughs (e.g., looking at
4-star hotels), can also be recorded and used for future target marketing purposes. For
example, if you search the airfare from Hong Kong to Sanya, China, through one of
the online travel wholesaler sites, promotional information about airfare between these
two cities and other tailored recommendations will pop up on your computer screen
regularly in the next few weeks as you surf the Net. The Amazon model of additional
product recommendations is what the travel industry mirrors after.
For another example, Harrah’s created individualized promotion packages to tempt
players to come to its casinos more often. Using information collected from its Total Gold
frequent gambler cards, Harrah’s began testing different promotions and learned which
promotions worked best in bringing back players. Marketers for the chain determined
that different players responded better to different promotions, such as free room nights,
whereas others returned when offered free gaming tokens. Now, when a player has not
come to Harrah’s within a set time period, for example, two weeks, that player receives a
promotion tailored to his or her tastes. This use of data mining has increased the response
rate for Harrah’s mailed promotions from 3% to 8%.5
Cruise lines are another industry segment that can capture vast amounts of customer
data largely due to the cashless consumption (a requirement for all purchases to be made
through a cruise line’s “credit card”) onboard. All expenditures incurred during the cruise;
including spa, beverages, shopping, specialty restaurants, land tours, and casino plays, are
charged to their account. This information can be helpful in designing future marketing
mix targeted at individual consumers based on their tastes and preferences.
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TOURISM IN ACTION
A RECIPE FOR SUCCESS!
Entrepreneurship, technology, customer service, and tourism; put them all together and you have a recipe for
success. Each part of this recipe can be found in a technological leader in online ticketing solutions, ExtremeTix
(begin.extremetix.com), a key distribution intermediary in the tourism industry. ExtremeTix has been on the fore-
front of ticketing solutions for many different kinds of events and venues within the United States and Canada.
When it comes to providing tickets for air shows, live music, fairs, theaters, museums, festivals, golf tourna-
ments, sporting events, amusement parks, motorsports, traveling exhibits, and much more, ExtremeTix leads the
way through innovative technology and high levels of customer service.
Preparing for a massive influx of excited and demanding customers is no easy task. However, this task becomes
a manageable undertaking when approached from the beginning. Starting with online reservations and ticket pur-
chases through to the day of the event with effective and efficient ticket scanning and crowd control the process
becomes seamless. Maneuvering through the demanding needs of both sides of the stakeholder equation—
event and venue managers and individual consumers—the company has studied, adapted to, and evolved to meet
market place demands. By providing key performance indicators, maximizing revenues, and ensuring superior
customer service for organizers and promoters while at the same time providing customers with convenience,
simplicity, and memorable experiences, ExtremeTix has created the perfect customer interface.
Global positioning technology provides tourists with an onboard navigator on unfamiliar

roads. Photo by Cathy Hsu
Changing Communication and Distribution Channels

Internet access has become ubiquitous. Take a look at Table 5.3 to see the phenomenal
growth, penetration, and usage of the Internet. Smartphones are overtaking personal com-
puters as the dominant platform to access the Internet. In countries, such as China, Japan,
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Table 5.3 Internet Usage Around the World

Internet Users Penetration Rate
World Regions June 30, 2016 (% of Population) Growth 2000–2016
Asia 1,846,212,654 45.6% 1,515.2%
Europe 614,979,903 73.9% 485.2%
Latin America/
Caribbean 384,751,302 61.5% 2,029.4%
Africa 340,783,342 28.7% 7,448.8%
North America 320,067,193 89.0% 196.1%
Middle East 141,489,765 57.4% 4,207.4%
Oceania/Australia 27,540,654 73.3% 261.4%
World Total 3,675,824,813 50.1% 918.3%
Source: Adapted from Internet Usage Statistics, The Big Picture, World Internet Users and 2016 Population
Statistics. Internet World Stats, http://www.internetworldstats.com/stats.htm. Retrieved (12/2/2016). For
more detailed and updated information, please visit www.internetworldstats.com.
France, South Korea, and the United Kingdom, this is already a reality.6 By 2015, over 3.2
billion Internet users and 7 billion mobile subscriptions were reported. This represents an
astounding growth rate of 960% and 660%, respectively, for these forms of digital connec-
tivity from 2000. Market penetration rates of 43% for Internet usage and 97% for mobile
availability bode well for electronic connectivity between consumers and tourism suppliers.7
Internet and Travel Product Distribution

All travel distribution channels and sectors were fundamentally changed by the advent
of the Internet. “Historically, the travel distribution channel was the domain of large
suppliers. Reservation systems were complex and unwieldy, requiring significant
investments in hardware, software, and connectivity.”8 Airlines had traditionally relied
on travel agents to be the primary intermediary in the distribution of their services.
The Internet introduced online distribution channels, in effect furthering competition
by expanding distribution and bringing transparency to airline inventory and pricing.
Before online distribution channels, consumers bought airline tickets via the air-
lines call centers and traditional travel agencies. Both points of distribution used main-
frame or “green screen”–based reservation systems such as American Airlines’ Sabre
and United Airlines’ Apollo systems. For a number of years, airlines owned these pro-
prietary systems, which listed available air inventories based on schedules with price
TOURISM IN ACTION
HI-TECH DINING EXPERIENCE
Inamo is a chain of three Asian fusion restaurants located in London’s fashionable districts of Soho, Convent
Garden, and Camden Town. It is, however, not just the pan-Asian cuisine that has made Inamo a popular dining
destination. It is Inamo’s hi-tech dining experience that is the talk of the town. The so-called “e-table” is more
than an interactive ordering system that enables diners to place orders from an illustrated food and drinks menu.
Diners can visualize/preview their meal on the plate and customize their dining ambience by adjusting the lighting
surrounding the table and by choosing their very own virtual tablecloth image! Entertainment is provided as well:
diners can play video games such as pong (popular not just with the kids) and watch the chefs working in real
time via the “Chef Cam” function. In addition, they can use the e-table to ask for the bill and order a taxi home.
Thus, the e-table serves to provide a more engaging, memorable, and hi-tech dining experience.
Sources: http://www.inamo-restaurant.com; http://www.bighospitality.co.uk/Interviews/Small-Talk/Inamo-s-Noel-Hunwick-on-how-
restaurant-technology-is-evolving
M05_COOK1670_06_GE_C05.indd 139 08/06/17 1:04 PM

being a secondary, hidden factor. Naturally, this scenario created demand for schedule-
based inventory and caused airlines to deepen their commitment to operational
efficiency. Airlines eventually sold off these reservation systems, but the basic schedule-
based inventory practices continued.
The introduction of the Internet expanded travelers’ choice for points of purchase,
thereby creating price competition for airline inventory. In fact, price is the main driver
for purchasing travel online.9 Travel marketers created online booking engines that
allowed travelers to compare available airline inventories by both price and schedule.
The availability of price comparison sites, such as kayak.com and travelsupermarket.
com, intensifies price competition.
Online reservations represent close to 40% of all U.S. travel in terms of booking
dollar value, of which airlines represent 55% of the total.10 “Carriers’ full-service web-
sites now handle between 20% to 30% (for major carriers) and 70% (for low-cost
carriers) of their total transactions.”11 In fact, the Internet has enabled thousands of
tourism suppliers to offer computerized reservation systems that identify the availabil-
ity of facilities, attractions, accommodation, and transport in real time.
The early airline reservation systems have later been further developed and evolved
into what we know today as the Global Distribution System (GDS). GDS now not
only allows travel intermediaries to make reservations for hotels, resorts, car rental,
railways, cruise lines, and other tourism products, but also provides other integrated
marketing services and information. Through a sophisticated computer system, travel
intermediaries can sell a variety of product combinations in real time. This benefits
the consumers by offering information transparency, broad range of product selec-
tion, and price comparison across product options. The six major GDS (i.e., Amadeus,
Sabre, Abacus, Apollo, Galileo, and Worldspan) owned by three major GDS compa-
nies (i.e., Amadeus, Sabre, and Travelport) process more than 2,000 transactions per
minute.12 They distribute products for more than 550 airlines, over 90,000 hotels, the
world’s largest car rental companies, hundreds of tour operators, and the major cruise
lines to travel agencies. GDS generates about two-thirds of all airline passenger reve-
nue, over 10% of hotel room revenue, and about 30% of car rental revenues in the
United States.9
Internet-Based Distribution for Hotels

Hotels, especially chain hotels, have been using central reservation systems (CRSs) to
make room bookings. Large hotel corporations usually use proprietary CRS, whereas
smaller hotel chains or independent hotels could use commercially available reser-
vation software. CRSs are internal systems shared by member hotels. Holiday Inns
launched the first hotel CRS, Holidex, in 1965 to enhance the efficiency and cost-
effectiveness of lodging product distribution. The modern CRS is integrated into the
overall enterprise systems and provides customer profile, preferences, and behavior
information for data mining. The reservation functions on hotel websites are part of
the CRS. CRS facilitates direct distribution, and at the same time are connected to
GDS to make the three-level distribution more efficient.
Due to the advancement of technology, there is a new breed of intermediaries spe-
cialized in online lodging product distribution. These intermediaries could be lodg-
ing marketing organizations or trade associations that sell rooms for contracted hotel
to earn commission. Examples include Utell International, The Leading Hotels of the
World, World Hotels & Resorts, and Sterling International. Travelers can make reser-
vations directly on their websites, which are connected to the GDS. Travel agents can
also make room reservations on their websites and receive commission.
One research study showed that online travel agencies (OTAs) serve not only as a
distribution channel for selling hotel rooms but also as an information source provid-
ing customer reviews and comments on their platforms. A case study of actual hotel
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FYI WYSWYG
W h a t Yo u S e e I s W h a t Yo u G e t no connection to the hotel. Many of bad bookings of over $1.3 billion. The
(WYSWYG) may not always be the these questionable booking sites will old adage of “buyer beware” is espe-
case when it comes to online hotel show up on Internet search engines cially true when booking hotel reser-
booking sites. There are many travel before the actual hotel company site, vations online. Look closely at the site
and reservation sites that try to pass easily confusing the inexperienced before you book and make sure you are
themselves off as “real or official” shopper. Although these reservations dealing directly through the hotel or a
hotel company booking sites. All it may result in legitimate transactions trusted online booking site or you may
takes to look like the real thing is the taking place through a reputable inter- find yourself receiving a blank look at
simple addition of a number or a letter mediary, they may also be fraudulent. the front desk when you arrive at your
to the URL containing the actual hotel The American Hotel and Lodging Asso- destination and discover that you have
name and the unsuspecting search- ciation estimates that 15 million book- been duped!
ers can find themselves making a res- ings are affected by site-spoofing each
ervation through a third-party having year, resulting in consumers making
Source: New Study Reveals: Some 15 Million Online Bookings Are Scams By Rogue Websites, American Hotel & Lodging Association.
Retrieved (12/2/2016). Available at https://www.ahla.com/press-release/new-study-reveals-some-15-million-online-bookings-are-scams-
rogue-websites.
practices has shown that OTAs provide customers with reliable information on hotel
quality based on guest comments and that customers are willing to pay a price pre-
mium for hotels with a good review record.13
Internet as a Travel Tool

The Internet exploded onto the scene in the last years of the 20th century and changed
the tourism industry forever. As online users have become more comfortable, confi-
dent, and convinced of the security on the Internet, more and more travelers are relying
on this medium for their travel needs. Research has demonstrated that in addition to
booking, online leisure travelers use the Internet for three purposes: ideas, inspiration,
and information. More than nine in ten U.S. travelers use the Internet at some point in
the travel planning process.9 And where are their searches taking them? In descending
order of importance, they are seeking information on accommodations, attractions,
where to visit, when to visit, and sample itineraries for their visits.14
The Internet affects our travel habits in other ways as well. We routinely turn to the Web
as a source of customized maps to our destination and for on-the-go directions on how to
get from place to place at our destination. We also use weather sites for up-to-the-moment
travel weather reports before and during our trips. And we rely on the Net to check the
on-time status of flights and trains, and traffic congestion on our driving routes.
The Internet has become a major source of information about travel products and
destinations. Many potential travelers routinely turn to their computer or mobile devices
whenever they have a travel need or question. Guidebooks come in downloadable form
and can be carried on a smartphone, tablet computer, or other mobile devices. Many
destination tourist boards have fully utilized the current technology in providing pod-
casts of destination information, participating in blogs, and offering travel intermediary
training programs on demand. With the use of email, mobile phones, and other personal
technologies, we can “get away from it all” while still staying in frequent contact with
others. Cyber cafés have already cropped up on cruise ships, and WiFi access is avail-
able in tourist destination areas where, for a nominal fee or free, one can jump online
and retrieve and send emails or messages. Most hotel rooms are equipped with Internet
access, if not full-technology suites. The postcard may become extinct as vacationers use
their digital cameras to download and share images with friends and loved ones who
“wish they were there” instantly through emails or social media sites.
M05_COOK1670_06_GE_C05.indd 141 13/05/17 11:22 AM

The Power of User-Generated Content

User-generated content, made possible through Web 2.0 and facilitated through social net-
working and We(b) logs, blogs (Facebook, YouTube, LinkedIn, WeChat, and other social
media platforms), found its way into the world of tourism and hospitality and is having
a profound impact on the entire tourism industry. “User-generated content, because it is
genuinely one traveler speaking to another, offers the sense that what you see (or read) is
really what you want to get: an experience that is authentic and out of the mainstream
(p. 14).”15 Perhaps the ultimate in user-generated content is Periscope. With Periscope,
users activate their smartphone cameras allowing viewers to become virtual tourists.
Social media is not only allowing consumers to research tourism sites and book ser-
vices, but they can also create content and engage with companies. This new media for-
mat, like all technological innovations, has created both opportunities and challenges
for tourism service suppliers. Opportunities are presented as awareness and interest can
be created by posting positive comments. However, challenges arise when negative com-
ments appear. Because information will be created and disseminated at lightning-fast
speeds, organizations must now monitor what is being said and distributed about them.
There is more being written about some locations, hotels, restaurants, and local
“hot spots” than could ever be read by one person. In fact, “[d]ue to the high volume
of user-generated content typically found on social media and networking sites, it is dif-
ficult for each travel supplier to absorb it all.”16 Like any technological advancement,
decisions will have to be made on how to monitor and respond to the information that
is being created. This monitoring function is especially important, as anything can be
posted, true or untrue, requiring the need for rapid response to legitimate customer
complaints and to correct false information.
Many tourism suppliers and online travel agencies are actively managing their
brand presence on social networking sites, such as Facebook, and microblogs like
Twitter. They are connecting with consumers by providing convenience, instant grat-
ification, personal control, and relevancy. Alaska Airlines’ Jenna, an online virtual
assistant, provides website visitors the opportunity to chat and ask questions. United
Airlines’ Twares makes special offers only to their followers on Twitter.
There is no question that social media is a growing and important source for online
travel information searches. It is also an important tool for travel planning and may well
continue to grow into the primary source for travel information as these sites seem to be
available everywhere. Research has shown that in search engines, social media websites
are one of first few results appearing when searching for travel-related information.17
When information is acquired and analyzed from every customer touch point,
meaningful relationships can be formed with customers from the information collected.
FYI SHOW ME MORE

It seems like there is an app for almost book, and enjoy every step of your trip. not already used some of the following
everything, and there probably is. And, while you are doing all of this, apps, take time to try them out before
When it comes to tourism, you can find marketers are connecting with you to you take your next trip:
an app that will help you dream, plan, enhance your experiences. If you have
Cedar Point VR Time Out GateGuru

Google Maps Gogobot TripCase
SkyScanner Lonely Planet Field Trip
Maps.Me Stay.com Yelp
The list could go on and on, but you get the idea. Get APPING!
M05_COOK1670_06_GE_C05.indd 142 13/05/17 11:22 AM

By offering them products and services that are tailored to meet their individual needs,
sales volume can be increased and profitability can be enhanced. Whether these inter-
actions are in person, over the phone, through web chats, or electronically facilitated,
customer relationship management creates a personal touch.
Improving Profitability
Revenue management (which is also called yield management), a foundational compo-
nent of almost every MIS for tourism service suppliers, was developed by Bell Labora-
tories in 1988 and initially used as a scheduling tool for the airline industry. However,
its effectiveness in addressing a host of marketing, management, and financial issues
soon expanded its use to other tourism service providers such as hotels/motels, resorts,
restaurants, theme parks, cruise ships, golf courses, and car rental companies. Basi-
cally, revenue management requires allocating capacity to customers at the right price
and at the right time to maximize revenue or yield, enhance customer service, improve
operating efficiency, and increase profitability under the following conditions.18
• When capacity is relatively fixed. For example, when demand increases, airlines
cannot simply add more seats; hotels cannot add more rooms; and rental car com-
panies cannot quickly enlarge fleets at specific locations.
• When demand can be separated into distinct market segments. For example,
tourism service providers can segment demand based on specific customer profiles
and needs.
• When inventory is perishable. For example, as we have previously mentioned,
once a plane has left the gate, there are no more opportunities to fill its seats with
revenue-paying passengers on that flight.
• When services can be sold well in advance. For example, reservation systems
allow leisure travelers to save money by making advance reservations with specific
time restrictions.
• When demand fluctuates substantially. For example, during periods of high
demand, higher rates can be obtained, but during periods of lower demand, lower
rates may be necessary to attract customers.
• When marginal sales costs are low and marginal capacity costs are high. For
example, the cost of selling an additional reservation for an airplane seat or a
night’s lodging is minimal, but the cost of purchasing a larger airplane or adding
rooms to an existing hotel would be very expensive.
Although revenue management has been widely applied in many different indus-
tries, each of these industries has their own specific characteristics and differences.
Based on the two strategic levers unique to services, these industries could be seg-
mented into four quadrants. The first lever is price. Price of service offerings could be
fixed (one price for all) or variable (dynamic pricing). The second lever is duration;
whether consumption duration of services can be predictable or not. When applying
revenue management in different industries, strategies and focuses should be changed
for each quadrant.19
“One of the underlying principles of revenue management is to understand what
customers value and develop products that enable those customers that value a par-
ticular attribute to obtain what they want; albeit, having them pay for that privilege
(p. 300).”20 Technological advances now allow tourism service suppliers from airlines
to rental car companies to sell everything efficiently from empty seats to unrented cars
through GDSs, through their own Internet sites, or via intermediary Internet sites, such
as Travelocity, Expedia, and Orbitz at the best possible price.
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FYI DYNAMIC PRICING

The adoption of revenue manage- prices. In these situations, minimum Other service suppliers such as theme
ment in the hotel industry has brought stays of two to three or four days at park operators and restaurants have
renewed attention to the concept rates that are two or three times higher begun to use demand pricing to not
of dynamic pricing. During very high than normal are not uncommon. What only generate increased revenue, but
demand periods such as holidays, has changed is that improvements in also control demand and alleviate prob-
sporting events, concerts, confer- revenue management systems are lems of overcrowding. Some say that
ences, and even college graduations allowing users to fine tune these stay these practices are nothing more than
when demand far exceeds the num- and pricing decisions, on an hour-by- price gouging while others say they
ber of rooms available; hotel opera- hour or even minute-by-minute basis, are smart business decisions leading
tors have implemented minimum stay to generate even more revenues and to greater customer satisfaction and
requirements at significantly higher profitability than previously recognized. profitability.
Operational Considerations
Although revenue management holds the promise of maximizing revenues, it, like
most other quantitative management tools, should not be used blindly. Factors, such
as desired market position, customer satisfaction, employee morale, and demand for
related goods or services, must be considered. As competition among transportation
services increases and more governments privatize or eliminate subsidies to their airlines
and passenger rail systems, revenue management techniques will grow in importance.
Mere possession of a revenue-management system does not guarantee success. For
a company to be successful with revenue management, it must have a clear under-
standing of the needs and price sensitivity of its various market segments; it must
be able to fully integrate its revenue management system with other computerized
systems; it must be able to properly train and motivate its employees and mangers;
and it must be able to quickly respond to competitive pressures.21 (p. 138)
Additional benefits can be obtained from revenue management when it is com-
bined with dynamic packaging and suggestive selling. Look at the benefits already
gained from this approach by an innovative marketing leader in Web selling,
Amazon.com. Any time you search for or purchase an item on Amazon, a message
appears saying, “Other people who bought this item also bought . . . .” Tourism
service suppliers are beginning to use this same idea of suggestive selling, but the full
potential of this sales tool along with cross-marketing and dynamic packaging have
yet to be fully embraced.
Revenue Management in Practice

The following example will highlight the importance of revenue management tech-
niques as they are used to enhance revenues and potential profitability in an airline
setting. This same approach can be used by every other tourism service supplier. Rev-
enue management allows service providers to reserve capacity for the highest revenue
customers as they book reservations closer to the time of consumption.
For ease of understanding, we will use a smaller 37-seat aircraft in this example. The
principles will remain the same for larger aircraft as well as in other settings, especially
hotels and resorts, where tourism service providers are seeking to enhance revenues.
On a 250-mile flight between cities A and B, we know from past reservation data
that we can sell all 37 seats on our flight to leisure travelers. These travelers would be
willing to purchase all seats for advance purchase excursion ticket fares of $117 each
M05_COOK1670_06_GE_C05.indd 144 13/05/17 11:22 AM

way ($117 fare * 37 passengers = $4,329). We also know that we could sell 17 full-
fare coach tickets to business travelers for $398 each way ($398 fare * 17 passengers
= $6,766). If this were an either/or decision, we would choose to sell only full-fare
coach tickets because it would result in $2,437 more in revenue ($6,766 compared
to $4,329); we could focus more attention on each passenger with the same required
flight crew; and we would save fuel with a lighter load.
However, neither one of these choices will allow us to maximize revenues for this
flight. What we need to do is hold back enough seats in the full-fare ($398) category to
serve our business customers who need to travel on fixed schedules, usually purchase
at the last minute, and do not make their travel decisions solely on price. At the same
time, we still want to fill the plane to generate as much revenue as possible. We could
sell all of the remaining 22 seats at the $117 advance purchase excursion fare. How-
ever, this choice would still not maximize revenues.
Based on information provided from our revenue management system, we decide to
sell eight seats at $117 each if they are reserved more than 180 days in advance, 12 seats
at $189 if they are reserved more than 21 days in advance, and hold 17 seats that based
on past experience we will be able to sell at the full $398 fare up to the time of departure.
By making these decisions, we have begun the process of maximizing revenues.
Our true yield for this flight will be based on the number of revenue-paying pas-
sengers who actually fly on the day of departure. Passengers buying discounted tickets
know that these fares are nonrefundable and have restrictions. Therefore, they typi-
cally arrive for the flight, claim their reservations, and board the plane. On the other
hand, passengers who have paid full fare may not claim their reservations, because
they can be canceled and/or changed without penalties. Knowing this, we might over-
book the flight, realizing that based on historical information, a certain percentage of
passengers holding reservations will not show up to claim their seats.
Figure 5.2 shows a seating configuration for a 37-passenger airplane and how
these seats might be filled with revenue-paying passengers in our example. By manag-
ing our seats to meet the needs of specific target groups, we will generate $9,970 in
total revenue if all passengers honor their reservations. Remember that for the sake of
simplicity in our example, we used a smaller aircraft flying a direct route and offered
only three fare categories. As the size of aircraft increases, we add in a round trip, and
the number of legs multiplies; revenue management calculations can become very com-
plex, requiring sophisticated computer hardware and software programs.
There are several other key statistics that can be generated from the data that are
gathered to maintain our revenue management system. These data include available seat
miles (ASMs), revenue passenger miles (RPMs), and load factor. In our flight example
with a 37 seat aircraft, we would have 9,250 ASMs (250 miles * 37 seats), and if we
had only sold 30 seats we would have generated 7,500 RPMs (250 miles * 30 revenue
passengers), resulting in a load factor of 81% (7,500 RPMs , 9,250 ASMs).
Airlines have continued to expand the capabilities of revenue management. Not only
are they using it for its original intent, but they are also expanding its use to generate other
operating efficiencies. Everything from flight planning and crew management to group
sales management and cargo sales are being incorporated into an integrated system.22
Technology will definitely change the face of the tourism industry. Where and when
these changes will occur is anybody’s guess. What we do know is that technological
advances will change how operators deliver services and how customers access and enjoy
these services. As more tourism suppliers fully adopt the revenue management concept
and as software developers create more sophisticated programs, additional applications
are being tapped. No longer are users looking to simply enhance revenues, they are now
seeking to implement profit optimization strategies. In addition, they are also seeking to
enhance revenues from all yieldable revenue streams such as meeting spaces, food and
beverage offerings, retail outlets, and even spa and professional services.23
M05_COOK1670_06_GE_C05.indd 145 13/05/17 11:22 AM

Y = 17 passengers at $398 (full coach fare) = $6766

X = 12 passengers at $189 (advanced purchase fare) = $2268
O = 8 passengers at $117 (advanced purchase fare) = $936
Total potential revenue: $9970
City A
Y Y O Y Y X X O
Y X X
O X O Y X Y Y
O
Y Y O Y X Y Y Y X
X X O Y Y O Y X
X
City B
FIGURE 5.2
Revenue management example for one leg of flight.
Care should be taken in the implementation of revenue management as, when

looking strictly at the numbers, decisions may only focus on short-term revenues,
thereby neglecting long-term customer relationships. These short-term decisions may
create potential management conflicts between revenue management and customer
relationship management. Therefore as companies implement and refine their revenue
management policies, they should have a good understanding of both aspects (revenue
and service) in order to balance both sides of the revenue and service equation.24 When
you reach Chapter 14, we will share with you some of our expectations for the future
impacts of technology on tourism and hospitality.
Summary
In response to the need for information to improve planning to support every function found in tourism and hospitality
and decision making, management information systems operations. Staying on top of the technological advances
designed to collect, store, and interpret data have evolved that make these support systems can be an expensive and
M05_COOK1670_06_GE_C05.indd 146 13/05/17 11:22 AM

time-consuming proposition, as change is a constant when it confident, and convinced of the security of the Internet,
comes to technology. Not only is it expensive to incorporate more and more travelers are relying on this medium for
each new technological advance, but it can also require a their travel needs.
significant commitment in training and education for both Creating and accessing user-generated content found its
employees and customers. In addition to time and resource way into the world of tourism and hospitality and it, like
commitments, there can be reluctance to adopt changes the Internet, has created even more changes for marketing
owing to fears of losing the human connection that has his- managers. This new media format, like all technological
torically been the foundation of hospitality. innovations, has created both opportunities and challenges
In spite of these concerns, technology is revolutionizing as information, both positive and negative, is created and
the tourism industry. In the face of rising wages, increasing disseminated at lightning-fast speeds, requiring constant
input costs, and intensifying competition, doing business in monitoring. Handheld devices and tablet computers are also
the same old traditional ways no longer seems to be work- aiding employees in the service delivery process.
ing. Technological innovations ranging from fairly simple Revenue management, a foundational component of
handheld input devices to complex PMSs are improving almost every MIS for tourism service suppliers, was initially
communication, operations, profitability, and customer ser- used as a scheduling tool for the airline industry. However,
vice. In addition, more and more consumers are expressing its effectiveness in addressing a host of marketing, manage-
a desire to take control of the service encounter through the ment, and financial issues soon expanded its use to other
tap of a finger on their mobile devices. tourism service providers such as hotels/motels, resorts,
All travel distribution channels and sectors were restaurants, cruise ships, golf courses, and car rental com-
fundamentally changed by the advent of the Internet. panies as part of more complex MIS. Although revenue
The introduction of the Internet expanded travelers’ management holds the promise of maximizing revenues, it,
access to information and choices for points of purchase, like most other quantitative management tools, should not
intensifying competition. In response, travel marketers be used blindly. Revenue management and all of the other
created online booking engines that allowed travelers to technological innovations discussed in this chapter will defi-
compare available inventories by both price and avail- nitely change the face of the tourism industry. Where and
ability. As online users have become more comfortable, when these changes will occur is anybody’s guess.
You Decide
Frequent travelers love them. The more you fly, rent, stay, anniversaries to spending patterns and leisure versus busi-
play, and dine, the more you earn. And, the more you earn, ness activities. All of these specifics provide the key pieces
the higher your status and prestige with the airline, car rental of information needed for creating effective targeted mar-
company, hotel, casino, or restaurant. What are they? Points! keting communications. With ever-expanding databases
The benefits that flow from points range all the way and software enhancements, the depth and breadth of
from upgrades to free flights, rental, stays, and more. So information that can be collected are limited only by the
it’s no wonder that travelers are willing to give up a host imagination of the data acquirer.
of personal information to tap into these loyalty programs. Although these programs have been designed to cap-
Think for a moment about the types of information ture customer loyalty and enhance service delivery and sat-
these program participants willingly share with their travel isfaction, a question of how much information is enough
service providers. Depending on which travel service pro- arises. What types of information is it ethical to acquire
vider is concerned, your personal profile could contain and store on loyal customers? How should this informa-
credit card numbers, driver’s license number, your mother’s tion be used? How long should it be retained? Can it be
maiden name, or even information about other travel ser- shared with other entities in the same organization and/
vice providers you frequently use. or related travel partner organizations? Where should the
Once a traveler becomes active in a program, other lines be drawn on information collection?
information may be collected ranging from birthdays and
Net Tour
To get you started on exploring Internet links for this www.web20travel.blogspot.com/
chapter, please see www.utell.com
www.tripadvisor.com www.lhw.com
www.pegs.com www.travelsupermarket.com
www.radiantsystems.com www.interactivetravel.net
www.micros.com
M05_COOK1670_06_GE_C05.indd 147 13/05/17 11:22 AM

1. What technological advances have made the most sig- 4. How has the Internet changed the delivery of tourism
nificant changes in the tourism industry? services?
2. How can technology be used to enhance productivity? 5. How can technology be used to enhance customer ser-
3. How can technology be used to improve both internal and vice?
external communications? 6. How can revenue management be used to improve
financial performance?

1. Make an appointment to visit the manager of a local 5. Using Expedia, Skyscanner, or Travolcity, search for
hotel, resort, or restaurant. During your visit, find out airfares between London, Heathrow (LHR), and
how technology is being used. Make a list of the names Bangkok, Suvarnabhumi (BKK), on three different
of products, systems, and/or programs being used and dates. The first date for your search should be at
describe the functions they perform. least 30 days from today’s date. The second date
2. Browse the Internet for POS suppliers. Develop a list should be 15 days from today’s date. Your third
from your search of three companies that supply this date should be five days from today’s date. Prepare
technological application along with a description of a list of flights and rates (economy). Are the prices
the services they offer. the same? If they are different, explain why there is
a difference.
3. Browse the Internet for PMSs. Develop a list from your
search of three companies that supply this technologi- 6. Use the various channels (e.g., hotel’s own website,
cal application along with a description of the services online travel agencies, hotel’s reservation telephone
they offer. hotline, local travel agency) to obtain rates for a
hotel stay on a particular night. Are the rates the
4. Using your favorite search engine, type in “travel
same or different? Why do you think they are the
blog.” Based on the results, select one blog and sum-
same or different?
marize your findings for that site.
Glossary
Available seat miles (ASMs) The distance traveled multi- provide information for planning, decision making, and
plied by the number of seats available. problem solving.
Blogs Online journals composed of links and postings in Night Audit An accounting function performed in hotels
reverse chronological order. at the close of each business day to ensure the correct
Data Facts and figures. posting of all revenues.
Data mining Analyzing information stored in computer Point-of-sale (POS) systems Systems designed to record
databases with the help of statistical techniques to and track customer orders, process debit and credit
uncover hidden relationships and patterns. cards, manage inventory, and connect to other systems
Enterprise resource planning (ERP) system A system in a network.
designed to combine all information sources, subsys- Property management system (PMS) A unified system
tems, and processes from various locations into one used to manage sales and marketing, reservations, front
unified system. office operations, POS systems, telecommunications,
Enterprise systems Computer systems that provide for back office operations, and revenue management.
collaboration and communication of data storage and Revenue management (yield management) The process
retrieval across multiple departments and organiza- of allocating the right type of capacity to the right kind
tional units. of customer at the right price so as to maximize revenue
Folio A form used to record a guest’s hotel. or yield.
Information technology Computer systems that provide Revenue passenger miles (RPMs) One seat on an air-
for the storage and retrieval of data. plane, railroad, or motorcoach traveling one mile with
Learning curve The rate at which people learn over time. a revenue-producing passenger.
Leg The segment of a flight between two consecutive Social networking Individuals tied together by a common
stops. interest or theme who share bookmarked Web links and
Load factor The number of revenue passenger miles conversations.
(RPMs) divided by the number of available seat miles Technology The use of new knowledge and tools to
(ASMs). improve productivity and systems.
Management information systems (MIS) Computer-based
systems designed to collect and store data and then
M05_COOK1670_06_GE_C05.indd 148 24/05/17 11:03 AM

References
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M05_COOK1670_06_GE_C05.indd 149 16/05/17 10:40 AM

PART I
Integrative Cases
Whose Money Is It?
Measuring and Managing Employee Turnover at Tastee Max Restaurants
Boss or Friend
100% Satisfaction Guaranteed
150
M05_COOK1670_06_GE_C05.indd 150 13/05/17 11:22 AM

WHOSE MONEY IS IT?

Roy A. Cook and Edwin C. Leonard, Jr.
There was no question about it; being a server at Charley’s Restaurant was hard work.
You were on your feet all evening, doing your best to make the dining experience
pleasurable. However, there was a reward to look forward to for all of your hard
work—tips.
When the practice of tipping for food service started, no one knows for sure, but
the custom had become firmly established in American restaurants and bars. In fact,
tips had become so common, that an acronym was now associated with the practice;
TIPS, To Insure Prompt Service. And, tips had become a significant part of many food
servers total compensation.
By tradition and practice, customers typically left 15% to 20% of the total check
as a tip. During a busy meal period, tips for fast, efficient, and pleasant service could
be very rewarding. Under the Fair Labor Standards Act (FLSA), restaurants like
Charley’s were allowed to take a tip credit and pay servers less than the federally
mandated minimum wage, based on the assumption that servers received tips from
their customers.
While receiving tips may seem like a simple and expected practice, the distribu-
tion of tips can become a cause for concern and dissatisfaction. When servers receive
all monies left on the table and credit and debit cards, the servers are satisfied, but
greeters, bussers, and kitchen staff can feel left out. Recognizing the importance of the
whole service team, servers frequently share a small portion of their tips with bussers.
Some restaurants attempt to address what may seem like an inequity by establishing
tip pooling plans. In these plans, servers pool and divide all of their tips based on pre-
established allocation formulas.
No matter how tips are received, it seems like someone is always dissatisfied. In
fact, dissatisfaction would be putting it mildly for one server at Charley’s, Katy. She
was downright mad and wasn’t going to take it anymore. She had decided that the tip
pooling plan at Charley’s was unfair and she was taking action to make sure that she
would be treated fairly.
Charley’s followed the practice of pooling tips. The idea in and of itself wasn’t so
bad. If you had a bad day, had some lousy tippers for customers, or were assigned to
a slow station, you could make it up by dividing tips equitably with other servers. The
problem, as far as Katy was concerned, was that Charley’s included the kitchen staff in
the tip pool. Katy didn’t mind pooling her tips with the other servers or giving a little
bit to the bussers, but she finally decided to draw the line when it came to sharing with
the cooks and dishwashers.
Katy had known about the practice at Charley’s of servers receiving only 30%
of the pooled tips in proportion to their hours worked and the kitchen staff receiving
the remaining 70% when she was hired. She had accepted the idea because Charley’s
hourly pay rate had been $2.10 above the federal minimum wage. But, once she saw
the money from her “hard work” being “taken” away from her and being given to
“those out-of-sight” people, it was more than she could stand!
Katy wanted “her” money back and filed suit against Charley’s to get it. Katy claimed
that, although Charley’s had paid her more than the required minimum wage, it had
violated the FLSA. She claimed that even though Charley’s had not taken a tip-credit, it
was not customary for cooks and dishwashers to participate in the tip pool.
Since no management or supervisory employee participated in the tip-pooling plan,
Charley’s argued that the compensation program was valid and no laws were violated.
So, whose money is it?
M05_COOK1670_06_GE_C05.indd 151 13/05/17 11:22 AM

This critical incident was prepared by Roy A. Cook, Professor Emeritus, Fort Lewis College, and Edwin
C. Leonard, Jr., Professor Emeritus, Indiana University–Purdue University Fort Wayne, and is intended
to be used as a basis for class discussion. The views presented here are those of the authors based on
their professional judgment and do not necessarily reflect the views of the Society for Case Research.
Copyright © 2011 by the Society for Case Research and the authors. No part of this work may be
reproduced or used in any form or by any means without the written permission of the Society for Case
Research.
MEASURING AND MANAGING EMPLOYEE TURNOVER AT

TASTEE MAX RESTAURANTS
Bonalyn J. Nelsen and Patricia A. Walker
INTRODUCTION
Ronda Garvey, assistant manager of a Tastee Max restaurant located in the food court
of one of upstate New York’s busiest malls, pored over the turnover statistics for her
restaurant. In 2008, average employee turnover within the nine-unit quick service
restaurant chain was 66.3%—well below the industry average of 120% (U.S. Bureau
of Labor Statistics, 2009). However, the average annual turnover rate for Ronda’s
restaurant was 122.7%, approximately double the turnover rate of other Tastee Max
stores. Ronda chafed at the knowledge that her restaurant was known as the chain’s
“bad store” due to frequent employee problems and high turnover, and she was deter-
mined to improve her unit’s performance. Ronda had several ideas about how the turn-
over problem could be addressed, but knew that obtaining support for her ideas would
not be easy. Noting that the chain’s employee turnover was about half the industry
average for quick service restaurants, Tastee Max’s corporate managers had been rel-
atively unconcerned about the problem. Key to the success of any initiative taken to
curb turnover was gaining the support of corporate management. Ronda wondered,
“What actions should I suggest for lowering employee turnover, and how can I make a
business case for my ideas?”
Company History
Tastee Max was a family restaurant chain established in upstate New York in 1955.
The original store was a small refreshment stand featuring ice cream and hand-made
root beer; over time the menu expanded to include hamburgers, hot dogs, hot sand-
wiches, and French fries (see Appendix: Table 1, p. 157). The restaurant was known
for its uncompromising standards for excellent product and service quality. For ex-
ample, choice cuts of beef were ground daily in every store for hamburgers; only
all-meat hot dogs with natural casings were used; and the restaurant’s handcrafted
root beer was made on site. Tastee Max won a devoted following among customers,
who were known to drive long distances to purchase a Tastee burger or frosty mug of
root beer. Over the next five decades, Tastee Max opened a total of nine restaurants
(called units or stores by company insiders) across upstate New York. Six units were
stand-alone restaurants, while the remaining three—including Ronda’s unit—were
located in the food courts of area malls. All restaurants featured a menu consisting of
hamburgers, hot dogs, hot sandwiches, cold salads, French fries, ice cream, and soft
drinks. In 1985, a group of local businesspeople purchased the chain, but continued
to operate the company using the original name, menu, and business concept. Tastee
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Max’s company culture continued to be based on nine core values handed down by
the restaurant’s founder:
• The Golden Rule: Always treat customers and co-workers as you would like to be
treated.
• Customer Focus: Our success is directly tied to how customer focused and atten-
tive we are. Always remember that the customer is the reason we are here.
• Professionalism: We honor co-workers and ourselves by prohibiting the use of
profanity in the workplace.
• Work Performance: Promotion and pay raises are based on work performance,
teamwork, and customer service skills rather than seniority.
• Investment: Investing money in our facilities is important; investing in employee
training is ten times as important.
• Diversity: We create a work environment in which everyone can do their best
regardless of race, religion, or sexual orientation.
• Caring: We exhibit care and concern for our fellow workers.
• Cost Control versus Product Quality: Controlling costs is important to our busi-
ness success. However, we will never compromise product quality for the sake of
saving money.
• Simplicity: Our systems and procedures must be simple to permit consistent, flaw-
less execution.
Employment Practices at Tastee Max

Tastee Max restaurants were open for service from 10:30 a.m. to 9:30 p.m.
(9:00 p.m. in stand-alone stores) Monday through Saturday, and from 11:00 a.m.
to 6:00 p.m. on Sundays. Mall stores were required to keep longer hours during the
busy holiday shopping season, staying open until 10:00 p.m. on Mondays through
Saturdays and 8:00 p.m. on Sundays. To staff these hours every restaurant had
25–30 employees, with 5–9 employees comprising a shift crew. With the exception
of supervisory employees, most workers were under the age of 20 years and worked
26 hours or less per week. Supervisory employees (shift supervisors, assistant man-
agers, and head store managers) worked between 30 and 50 hours during a five-day
work week. Average wages for supervisory and nonsupervisory restaurant workers
were consistent with those in the quick service restaurant industry (see Appendix:
Table 2, p. 157). New workers at Tastee Max earned approximately $7.25 per hour,
the minimum wage in New York State. Workers typically received a wage increase
of $.25 per hour at the end of their probationary period with the company, provided
that their performance was satisfactory. The average wage earned by Tastee Max
crew members was $7.75 per hour.
Upon hire, all employees were supposed to attend a four-hour group orientation
session designed to acclimate them to the company. During the orientation—which
was offered most Saturdays—new employees were introduced to the rules and poli-
cies in the employee handbook, the company’s mission and culture, the restaurant’s
menu, and procedures for taking customer orders and handling cash; employees were
also given the opportunity to complete paperwork needed for their employment. New
employees were then assigned to a restaurant for two or three weeks of on-the-job train-
ing. Although all new employees were required to attend the orientation and complete
on-the-job training, many did not. Ronda knew that the orientation and training was
largely done at the discretion of store managers. While some store managers dutifully
oriented and trained their employees, others favored a “sink or swim” approach of
M05_COOK1670_06_GE_C05.indd 153 16/05/17 10:42 AM

immediately putting new employees on the job, perhaps with the help of a more ex-
perienced employee for a day or two. Moreover, some new employees were unable
or unwilling to attend the orientation session on a Saturday. All newly hired employ-
ees served a 90-day probationary period before earning the status of a “permanent”
employee.
Tastee Max offered benefits to permanent employees who met two qualifications.
Group health insurance was offered to all employees who worked (1) 13 consecutive
weeks after completing one full year of employment with the company and, once eli-
gible, (2) worked a minimum of 30 hours per week. To be eligible for the 401(k) Plan
employees had to be at least 21 years of age and complete at least 1,000 hours of work
in addition to one full year of employment. In addition, employees who worked at
least 35 hours per week were eligible for 48 hours of personal time after completing
at least 1,000 hours of work in addition to one full year of employment. The personal
time benefit was increased on the second, fifth, and tenth year of employment after the
benefit was originally received. Managers and Assistant Managers were granted addi-
tional time off: in their first year of employment store managers were eligible for 110
hours of paid leave per year, with allowance increases in the second and fifth year of
eligibility. Tastee did not offer paid sick leave; all employees were required to use their
earned personal time if they wished to be paid for work missed due to illness or per-
sonal needs. Because most employees worked less than 35 hours per week, supervisory
employees were usually the only individuals who qualified for these benefits.
Tastee Max employed a progressive employee discipline policy to enforce com-
pany rules. The first violation of a rule or policy would result in a verbal warning to
the employee; the offender’s supervisor would write and sign a brief description of the
incident, which was placed in the employee’s records. A second violation of the same
rule or policy would result in the employee receiving their first written warning. This
document described the rule and the incident in which it was violated. After the super-
visor and employee read and discussed the document, both parties signed the warning,
which was placed in the offender’s records. The third violation of the rule or policy
resulted in a final written warning, which again described the incident; again, both
the supervisor and the employee signed the written warning after having read and
discussed the document. A fourth violation of the rule resulted in the employee’s ter-
mination. In short, Tastee Max employed a sort of “three strikes” rule in which em-
ployees could violate a particular rule or policy three times before being involuntarily
terminated for cause. All written warnings were kept in employee files for a period of
one year. After this time, the company discarded written warnings for rule violations
or poor work performance and each employee started with a clean disciplinary slate.
Employees who voluntarily or involuntarily terminated their employment with Tastee
Max were asked to complete exit interviews prior to departure, although doing so
was not compulsory and many departing employees refused or forgot.
Employee Turnover at Ronda’s Store

Ronda had worked for Tastee Max for a total of six years. The last 18 months of her
tenure was spent working at the Jubilee Mall store. Jubilee Mall was located within
a few miles of affluent suburbs, three large companies employing several thousand
workers and a university with approximately 15 thousand students. Its favorable loca-
tion made the Jubilee Mall store one of the chain’s busiest and most profitable units;
the store consistently ranked third or fourth in sales revenue among all Tastee Max
restaurants. But Ronda admitted the restaurant had acquired a reputation for being
a “problem store” among Tastee Max’s senior management due to the unit’s exces-
sive turnover and employee-related problems. Approximately 25% of all newly hired
M05_COOK1670_06_GE_C05.indd 154 13/05/17 11:22 AM

employees quit before completing their training and probationary period, and most of
the remaining 75% would leave before completing their first year of employment. The
average tenure for employees at the Jubilee Mall store was nine months. In fact, during
the previous fiscal quarter her store had lost nine employees—the equivalent of an en-
tire crew for an eight-hour shift—that had to be replaced. Ronda had identified several
reasons for the problem.
Both transportation and commuting contributed to employee turnover.
Because most university students and local students from affluent families rejected
minimum-wage fast-food jobs, most of the “line” or nonsupervisory workers were
urban, working class people who did not own or have access to private vehicles.
Ronda estimated that 80% of the line employees who worked at her store relied
on the city’s bus system to get to and from work. Because there were few direct bus
routes from the inner city to Jubilee Mall and busses ran infrequently on Saturdays,
Sundays, and holidays, employee commutes were often long and complicated; it was
not unusual for employees to make several connections and ride for several hours to
get to work. For example, the bus circuited the route from the city to Jubilee Mall
every two hours on Sundays. The last bus to the city left the mall at 6:25 p.m. on
Sunday evening. Employees who commuted on that bus would want to leave before
6:25 p.m. even if their shift was unfinished or their work remained undone. Those
who did so would receive a disciplinary warning or “write up” as a result. If line em-
ployees were frequently late or repeatedly walked off the job before their scheduled
time, they risked being terminated. Others simply tired of the long, boring commute
and quit their jobs.
Absenteeism, poor punctuality, closing a store early, and walking off one’s job
were also drivers of turnover. Due to the vagaries of weather and traffic, it was not
unusual for bus-riding employees to show up late for their shift, and delays for per-
sonal reasons were not infrequent. When employees knew they were going to be late
or absent from work, company policy dictated that the employee either find another
employee to cover their shift or “call in”—give management at least four hours’ notice
so a replacement worker could be found. Ronda noted that tardy employees sometimes
failed to call in at all. Those that were finally reached by telephone often claimed to
be unaware that they were scheduled to work that day. “I can’t remember a single day
that I’ve worked at this store when everyone has showed up or was on time,” Ronda
claimed. Each incident of tardiness, absenteeism, or leaving before the scheduled time
earned an employee a write up.
Violations of company rules were still other drivers of turnover. The Jubilee Mall
store had the most ethnically and racially diverse crew in the Tastee Max restau-
rant chain. Diverse employees brought behaviors and attitudes to the workplace that
sometimes clashed with managerial or company policy. For example, different views
on handling customer, operational, and managerial issues caused friction between
line employees and supervisors, most of whom were from middle-class suburbs.
Ronda noted, “Our crew is vocal and opinionated. They won’t back down if some-
one gets in their face. Some supervisors see this as being unruly and insubordinate.”
Employees were frequently written up for insubordination, which could lead to vol-
untary or involuntary separation. Other rule violations included wearing improper
dress, not following sanitation and safety procedures, violating labor laws, having
disagreements with members of the store’s management team, being rude or “talking
back” to customers, pilfering food and beverages, giving friends unauthorized “dis-
counts” on menu items, and not attending mandatory employee meetings held at
9:00 a.m. on Sunday mornings. All of these infractions would earn the offender a
write up. Theft of cash and violence toward management were cause for immediate
dismissal.
M05_COOK1670_06_GE_C05.indd 155 13/05/17 11:22 AM

Ronda admitted that a store manager’s leadership style occasionally contributed to

employee turnover. Some managers favored certain employees with preferential treat-
ment, particularly when enforcing company rules and policies. For example, a disfa-
vored employee would be written up for lateness while a favored employee guilty of
the same offense was not. Managers could also be arbitrary in enforcing rules due to
distractions or disinterest. Other managers alienated line employees by “pulling rank”
or acting in an autocratic manner. For example, Ronda described one supervisor who,
when displeased, threatened workers with a reduced work schedule or outright termina-
tion; when employees disagreed with this person or were slow to follow her orders, the
rogue supervisor demanded, “Do you want hours next week or not?” While the super-
visor’s imperious manner won grudging compliance in the short term, Ronda believed it
created a hostile work environment that spurred employees to seek other employment.
Addressing Employee Turnover at Tastee Max

Ronda knew that employee turnover had a negative impact on product/service quality,
operational costs, employee morale and productivity for the company in general, and
her store in particular (see Appendix: Table 3, p. 157, and Table 4, p. 158). Lowering
employee turnover would improve the chain’s profitability and competitiveness. Ronda
had given considerable thought to the problem and identified several possible solutions.
But first, she would have to convince the company’s senior leadership that the problem
was a serious one. The solutions that Ronda considered would require a substantial
financial investment from the company, and company management would be reluctant to
invest in costly remediation if the problem was not perceived to be serious. High levels of
employee turnover were endemic in quick service restaurants due to the nature of the work
and jobs. Consequently, turnover was viewed as normal and unavoidable in quick service
restaurants. Moreover, Tastee Max’s overall employee turnover rate was approximately
half that of the industry average; management attention was focused on other problems,
such as increasing sales and controlling food costs in a sluggish economy marked by
rising food prices. To obtain the support needed to curb turnover, Ronda realized that
she needed to “shake up” company management by demonstrating the financial and
strategic impact of turnover on the company. But what sort of remedial plan should she
offer, and how should she make a business case to win managerial support for her plan?
Bibliography
U.S. Bureau of Labor Statistics. (2009). Job openings and labor turnover summary.
U.S. Bureau of Labor Statistics News Release. Available at: http://www.bls.gov/
news.release/jolts.nro.htm (accessed on October 15, 2009).
Appendix
Company averages for major expense categories (food and beverage, labor, paper, and
fixed costs) were as follows:
• Food and beverage cost: 32% of total price.
• Labor cost: 30% of total price.
• Paper costs: 10% of total price.
• Fixed costs (rent, utilities, insurance, other services): 20% of total price.
In addition to an hourly wage, assistant managers, unit managers, human resource
professionals, and trainers earned additional benefits equivalent to 28% of wages.
M05_COOK1670_06_GE_C05.indd 156 16/05/17 10:43 AM

Table 1 Selected Menu Items and Prices at Tastee Max Restaurants*

Menu Item Menu Price ($)
Cheeseburger 3.89
Hot dog 2.89
Grilled chicken sandwich 4.69
Root beer, large cup 1.79
French fries, side 2.69
*
These prices do not include state sales taxes.
Notes: Tastee’s food and labor cost percentages were consistent with those of other chains operating in the
quick service restaurant industry.
Table 2 Average Wages of Tastee Max Employees*

Employee Type Wage per Hour ($)
Entry-level crew person (NUHIRE) 7.25
Experienced crew person (EC) 7.75
Shift supervisor (SS) 9.00
Assistant manager (AM) 10.25
Unit manager (UM) 11.00
*
Human Resources Professional (HRM) $35,000/49-week year, 40 hours worked per week Trainer (TRAIN)
$35,000/49-week year, 40 hours worked per week.
Table 3 Average Recruitment and Selection Costs for Entry-Level Employees*

Type of Cost Number of Hours and Employee Level
Review of applications .25 hours per applicant, UM
Telephone screening of applicants .25 hours per applicant, UM
Review notes from telephone screening .25 hours per applicant, UM
In-store interview of job candidate 1 hour UM + 1 hour EC
Review notes, make hiring decision .5 hours per candidate, UM
Contact candidate and make job offer .25 hours per candidate, UM
New hire orientation 4 hours NUHIRE + 4 hours TRAIN
In-store training 20 hours per employee, AM + 20 hours per
employee, NUHIRE + 20 hours per employee,
EC
Completion of paperwork for new hire .5 hours per new hire, UM + 1 hour per new
hire, HRM
*
An entry-level employee is defined as an employee who has not successfully completed probation. An
experienced crew member is defined as an employee who has successfully completed probation.
This critical incident was prepared by Bonalyn J. Nelsen and Patricia A. Walker both from Rochester
Institute of Technology and is intended to be used as a basis for class discussion. The views represented
here are those of the case authors and do not necessarily reflect the views of the Society for Case Research.
Authors’ views are based on their professional judgment. Presented to and accepted by the Society for Case
Research. Adapted from Measuring and Managing Employee Turnover at Tastee Max Restaurants by
Bonalyn Nelson and Patricia Walker, Annual Advance in Business Cases. Used with permission from Society
of Case Research.
M05_COOK1670_06_GE_C05.indd 157 13/05/17 11:22 AM

Table 4 Average Separation and Vacancy Costs for Entry-Level Employees*

Type of Cost Number of Hours and Employee Level
Exit interview .5 hours per separated employee, UM +
.5 hours per separated employee, EC +
.5 hours per separated employee, NUHIRE
Completion of separation paperwork .5 hours per separated employee, UM +
.75 hours per separated employee, HRM
Estimated cost of reduced crew Estimated 4 hours NUHIRE pay per each day
productivity the position remains vacant†
Overtime pay to cover vacancy created by
separated employee
Additional crew member “borrowed” from Estimated at 20 hours per separated
another store to cover vacancy created by employee
separated employee .5 hours per separated employee, EC pay
+ $1.00/hour (compensation for additional
transportation costs, inconvenience, etc.)
*
An entry-level employee is defined as an employee who has not successfully completed probation. An
experienced crew member is defined as an employee who has successfully completed probation.
†
On average, two weeks is required to replace a crew member who leaves the company.
BOSS OR FRIEND
Dory Hammond, David Bake, Kent Kauffman, and Eric Nelson
Most college students don’t think much about being a manager when they first begin
working. Sure like most employees, they may gripe about decisions that their managers
make and wonder why they get paid more than when it appears like they never really
work that hard. However, one college student, Rachel Maddox, found herself in the
position of being a manager just a little sooner than she had expected. In fact, it seemed
like one day she was signing in on a time sheet and thinking about how much of her
tips to report to the Internal Revenue Service and then all of a sudden the next day
she was a manager. She was offered and accepted the position of assistant manager at
La Fortuna, a restaurant where she had been working for less than three years. As she
assumed these duties, she soon learned that there was more to being a manager than
met the eye.
Being a manager hadn’t been on her mind when she applied for a hostess posi-
tion at a local Mexican restaurant during her first year of college. Even though she
had never worked in a restaurant before, she got the job. She found the atmosphere
exciting, the working environment enjoyable, and threw herself into the job. It wasn’t
long until she had the opportunity to apply for a cashier’s position, a server’s slot, and
finally head server. Her hard work and interest in all aspects of the business didn’t go
unnoticed.
When one of the restaurant’s two assistant managers graduated from college and
moved away at the end of the spring semester, Rachel was asked to fill the position.
She hadn’t applied for the position or even thought about being a manager, but Diego,
M05_COOK1670_06_GE_C05.indd 158 13/05/17 11:22 AM

the owner, convinced her that she was ready for the job. The only customer service
position she hadn’t held was bartender, but Diego assured her that he could teach her
all she needed to know about this position. And to Rachel’s relief, she would not be
responsible for any of the kitchen operations.
So Rachel, 21 years of age at the time, took the job and found herself supervis-
ing 16 front-of-the-house employees, many of whom she had been working with
since she started and all of them she considered to be her friends. One day they had
been working together as a team and the next day she was in charge of the team.
This sudden transition to being “in charge” was especially awkward with two of her
co-workers, Mary and Joanie. They had become very close friends. All of them had
been attending classes in the same Hospitality and Tourism program at the local col-
lege and, for the last two terms, they had been in many of the same classes together.
At first, when Rachel took over as assistant manager, she eased into her new posi-
tion, reluctantly taking on her increased in responsibilities. In the beginning, she even
felt a little bad about being paid more than her friends who had been her equals just a
few weeks before. However, things suddenly changed about six months after she became
assistant manager, when the owner announced at the informal weekly staff meeting that
two assistant managers were one too many. To Rachel’s surprise he told the staff that
Mary, who had been an assistant manager for over two years, was moving back to a
head server position while Rachel would remain in her position as assistant manager.
Change is always difficult and, when friends are involved, it can be even more difficult.
Rachel now found herself in the awkward position of being fully responsible for restau-
rant operations in Diego’s absence and having to supervise her friend Mary who had
previously held the same position and whom she wanted to keep as her friend.
All of these changes came as a shock, but Rachel wanted to succeed. She thought
to herself, “Dang, now here’s a friggin’ leadership challenge they don’t teach you about
in school. How do I manage my friends without losing them as friends?” Looking
back, she thought about how excited she had been when asked to take on the assistant
manager position and how much she had enjoyed the new challenges. Now she wasn’t
sure the extra money was worth the personal headaches.
La Fortuna’s
La Fortuna’s was a busy authentic 80-seat, family-owned Mexican-style restaurant
located along with many other casual dining restaurants in a busy metropolitan setting.
It opened in 1999 and was purchased by Diego Arrigo in 2011. It was open for lunch
and dinner, seven days a week, and had a fairly large customer base of regulars from
the community, good traffic from the local hotels as well as many students from the
nearby college.
Rachel Maddox: Reluctant Restaurant Manager

So much of Rachel’s experience prepared her to be La Fortuna’s manager. She had
been studying about basic business in college. While on the job, she learned to develop
the weekly schedule for eight servers, one hostess, one cashier, five bussers, and a
bartender. In her former position as head server, Rachel was already one of the pri-
mary trainers utilized when new people were hired, so this aspect of managing was
not new to her. Upon being promoted to assistant manager, Rachel was asked almost
immediately to do all of the interviewing, hiring, and firing, but again, she felt that the
transition was slow enough to learn effectively what to do. Rachel felt the biggest
change as assistant manager was that anytime the owner had a problem with staff, he
came to her.
M05_COOK1670_06_GE_C05.indd 159 13/05/17 11:22 AM

Rachel knew that Mary and Joanie had struggled with her promotion to assis-
tant manager more than the other co-workers had. They both refused to come to her
about anything work-related for a while after Rachel’s promotion. But after Mary
was demoted, she in particular struggled to find anything nice to say at all. That was
frustrating because they were both supposed to be her friends, and Rachel thought
Mary and Joanie should have been happy for her, especially since they shared the same
major and they had all started to talk about future career plans in school and at work.
However, neither of the women seemed that happy about the new reporting relation-
ship. During the six months of Rachel’s tenure as the assistant manager, Mr. Arrigo
had relied on her to solve all his personnel problems, so it was surprising, but not
totally unexpected, that he chose to demote Mary.
It got even worse for the three friends about a month after Mary’s demotion,
when Mr. Arrigo left on an extended trip to go home to Mexico. Before leaving,
Mr. Arrigo gave Rachel the new title of Restaurant Manager. Now, in addition to
her previously stated tasks, she was required to hold staff meetings and was put
in charge of inventory, requisitions, and a few other smaller administrative tasks.
Clearly, Mr. Arrigo held Rachel in high regard, but all the responsibility he was giv-
ing Rachel was really hard for Mary and Joanie to accept. They still seemed to find
it hard to look up to her as their boss when they had thought of her for so long as
just their friend.
Things really came to a head when Rachel was asked to take charge of inventory-
ing and requisitioning all bar stock. Since this had to be done at closing, Rachel knew
that she needed to delegate some of the responsibility, because there was no way she
could do it on her own and still find the time to go to school. For control purposes,
she and Diego agreed not to ask the bartender for help. So, in an employee meeting, she
sought help from one of the servers with taking the inventory. She didn’t think having
someone else helping her to conduct a nightly inventory would be a problem, but she
was wrong. No one wanted to take on this extra task at the end of a long day. While
Rachel could understand why both of her friends would be disgruntled with her, it
soon dawned on her that her good friends really had no idea about everything she did,
nor did they care to pay attention to it.
This was not the first employee-related problem Rachel had encountered and to
make matters worse, La Fortuna had no employee handbook or written procedures.
As a single-unit family-owned business, very little about the operations or employment
practices had been put in writing. Because of the lack of explicit policies, everyone at
La Fortuna was an at-will employee. Each employee was free to resign without notice,
and La Fortuna was free to release them without warning and legal repercussion.
Now What?
When Rachel was offered the assistant management position back in that spring semes-
ter, she was excited to take the promotion: money was tight and she had no student
aid, her partial scholarship didn’t even begin to cover her school expenses, and the
experience and title would help make her resume look awesome because the direct line
experience was marketable when it came time to look for a career after graduation. It
had all seemed so good. In this current economy, any promotion might help make one
more marketable for the next job. And now she was the manager at La Fortuna. Yet,
here she was having to take a class with Mary and having to oversee Mary and Joanie
at the restaurant. Before Rachel’s promotion, the three women’s friendship seemed so
solid. Now, Joanie always seemed to be mad at her and Mary seemed so distant, and
all Rachel wanted to do after work was go out for a drink and just talk, like close col-
lege girlfriends need to!
M05_COOK1670_06_GE_C05.indd 160 13/05/17 11:22 AM

100% SATISFACTION GUARANTEED

Roy A. Cook, Laura J. Yale, and John E. Cave
After a particularly frustrating business trip, Sales Representative Dan O’Brien sent the
following letter to the president and CEO of El Primo Inns, Inc.
Dear Mr. Simmons,

As a long-time El Primo customer, I am very disappointed with the way I was
treated on my most recent visit. You advertise a 100% Satisfaction Guarantee.
However, I left your hotel nothing close to 100% satisfied.
I made a reservation through your reservation system for the airport location
because my flight was not scheduled to arrive until 10:30 p.m. Your reservation clerk
assured me that the hotel had airport shuttle service available at that time. I gave the
airport location to my boss as he was to meet me the morning after my arrival.
Due to weather, my flight was over an hour late. After collecting my luggage,
I called the hotel to request the shuttle. The clerk at the hotel could not find my
reservation and asked for my confirmation number. Upon receiving it, he informed
me that my reservation was at another El Primo property about 6 miles away.
I called that property for shuttle service and was told that the service stopped run-
ning at 10 p.m. Therefore, I was forced to pay $16 for a cab to take me to the hotel.
Upon checking in, I asked the clerk to call the airport hotel location and leave
a message so that my boss could find me at this other location. Her response?
“It’s not my problem.”
The next morning, I tried to explain the problems I had to the general man-
ager. His only reaction? “I’m sorry.” Is this all your managers are authorized to
do when confronted with a dissatisfied customer?
When I checked in, the rate I was given was $69, the rate I was quoted by
your reservation clerk. When I checked out the next morning, the rate had in-
creased to $79. When I brought this discrepancy to the clerk’s attention, he said
that the night audit system automatically posts the rate of $79 unless the night
auditors override the system. He then corrected the amount. Again, I talked with
the general manager and his response again was simply, “I am sorry.”
These are the facts. Your 100% Satisfaction Guaranteed slogan doesn’t really
seem to mean very much. I look forward to your response.
Sincerely,
Dan O’Brien
Based on the above information,
1. What should a “100% Satisfaction Guarantee” mean in the case of a hotel?
What did it appear to mean in the case of El Primo Inns?
2. How many breaks from the service script occurred according to Mr. O’Brien’s
letter?
3. What service recovery measures should have been taken?
4. If you were Mr. Simmons, what would your response(s) be in this situation?
5. Should Mr. Simmons follow up on his letter to Mr. O’Brien? If so, what kind
of follow-up? What should he say?
This critical incident was prepared by Roy A. Cook, Laura J. Yale, and John E. Cave of Fort Lewis College
and is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective
handling of the situation. The names of the organization, the individuals, and locations have been disguised
to preserve the organization’s desire for anonymity. Copyright © 2001 by Roy A. Cook, Laura J. Yale, and
John E. Cave.
M05_COOK1670_06_GE_C05.indd 161 13/05/17 11:22 AM

PART
2
Tourism Service
Suppliers
CHAPTERS
6 Transportation
7 Accommodations
8 Food and Beverage
9 Attractions and Entertainment
10 Destinations
EXTERNAL
ENVIRONMENT
TOURISM SERVICE
SUPPLIERS
TOURISM
PROMOTERS Accommo-
dations
Destinations
Travel
Tour agents
operators
TRAVELERS
Incentive
and
Tourist Meeting
boards planners
marketing
Transportation
Technology
M06A_COOK1670_06_GE_PT2.indd 162 13/05/17 10:40 AM

CHAPTER 6
Transportation
For my part, I travel not to go anywhere, but to go. I travel for travel’s sake.
The great affair is to move.
—Robert Louis Stevenson
LEARNING OBJECTIVES
1. Explain the importance of transportation to the 4. Explain the importance of automobiles and
tourism industry. motorcoaches to the tourism transportation system.
2. Identify and describe the major components of 5. Describe the role and importance of water trans-
the tourism transportation system. portation in the movement of travelers.
3. Explain the differences between passenger rail- 6. Describe how airlines operate in a deregulated
road operations within and outside the United and competitive environment.
States.
CHAPTER OUTLINE
The Graduation Gift Important Transportation Links
Introduction Soaring Through the Skies
Surface Transportation Operating in a Deregulated Environment
Plying the Waves Decoding the Language of the Airline World
Riding the Rails Airports
Canada and the United States Follow Summary

Similar Tracks for Rail Service You Decide
Asian and European Rail Service Blazes Net Tour
Ahead Discussion Questions
Scenic Railroads Applying the Concepts
Cruising the Highways and Byways Glossary
Automobiles
References
Motorcoaches
163

164 Part 2 ▸ Tourism Service Suppliers
The Graduation Gift

When Shawna opened the envelope at her graduation party, it seemed too good to be true:
a trip to Europe! Her grandparents had often discussed the benefits of travel and encour-
aged Shawna to travel to learn more about the world around her. They had taken Shawna
with them on some of their journeys and she had also traveled with her parents on summer
vacations and business trips. These trips had allowed her to see some beautiful and exciting
places, but now she was going to faraway places to do things she had only dreamed about.
After the excitement of the graduation party was over, Shawna settled down to care-
fully read the letter her grandparents had written describing their travel gift. They were
going to buy her a round-trip airline ticket from her home in Montgomery, Alabama, to
her choice of either London or Paris. They also were going to give her the money to buy a
Eurailpass and her choice of a ticket to travel on the Eurostar through the Chunnel between
London and Paris or a ticket on one of the ferries that cross the English Channel. In addi-
tion, they had included a check for $1,000 to help pay for some of her other expenses.
Shawna knew it was late, but she couldn’t wait to call her grandparents and thank
them for the gift. When she asked them what airline to call and which one of the channel-
crossing options to take, they simply told her that the experiences to be gained from
planning her travels were part of the gift. With this in mind, Shawna immediately
hopped on the Internet and then contacted Derik, her mother’s travel agent, the next
day for help in designing her itinerary.
During her first meeting with Derik, she learned that she would be using many
different types of transportation while on her trip. She could begin by driving, riding a
bus, or flying on a small commuter airline to Atlanta. Once there, she could fly directly
to either London or Paris. After arriving in Europe, Shawna would have several choices
of air, rail, and bus transportation. In addition, there was still the question of how she
should cross the English Channel between England and France. Derik answered all of
Shawna’s questions, but his answers led her to ask only more questions. Shawna soon
began to realize that there were several ways to meet her travel needs and she wanted
to know more. Provided with a whole new understanding of transportation options,
she and Derik began to discuss and plan the details of her upcoming trip. Her grand-
parents were right; planning her trip was a learning experience.
Ferries form one of the many links in the transportation system. Photo by Thomas Sun

Chapter 6 ▸ Transportation 165
Introduction
Although we may not think about it, the tourism industry would cease to function
without an efficient and effective transportation system; trains, automobiles, and air-
planes are just a few of the more obvious parts of this system. The importance of all of
these transportation modes to both travelers and tourism suppliers was vividly demon-
strated as the air transportation system was shut down in the United States following
the September 11, 2001, terrorist attacks and when European travel was grounded
for days due to the Icelandic volcano eruptions in 2010. Every segment of the tourism
system was adversely affected.
There are many other modes of transportation in addition to planes, trains, and
automobiles from which to choose. The components of this system can be conveniently
classified and placed into two broad categories: surface (land and water) and air. As
Figure 6.1 shows, transportation is often intermodal, with travelers relying on several
different modes of transportation to reach their final destinations.
Intermodal transportation options can be found throughout the transportation sys-
tem, but airports provide a focused glimpse into the importance of all transportation
modes. Providing a variety of transportation connection options to feed passengers into
airports, intermodality has become increasingly important as air traffic volumes have
soared. While the present pattern is for North Americans to use cars, Europeans to
use trains, and Asians to use buses, expanding the options for ingress in and egress out
of airports will be required to meet future demand. By expanding intermodal options,
airport managers can increase the catchment areas, enable growth, alleviate congestion,
address environmental concerns, and provide customers with “seamless” transporta-
tion options. To see a good example of where these best practices in intermodal trans-
portation have been put to work, take a look at the Frankfurt airport.1
How did this system of interconnectivity develop and how does it function today?
Modes of transportation evolved slowly until the 19th and 20th centuries; then, as
Table 6.1 shows, things really began to happen. By this time, railways criss-crossed
the continents of Europe and North America; gasoline-powered cars became a com-
mon sight as highways were developed; steamships plied the waters across major trade
routes; and the possibility of flight became a reality. Transportation has now become
so efficient that we often think of travel in terms of time rather than distance. For an
example of different transportation modes and travel times between pair cities, see
Table 6.2.
Table 6.1 Trends in Travel Time

Year Method Elapsed Time in Days
Around the World
1889 Sailing ship—Nellie Bly 72.00
1924 U.S. Army aircraft 35.00
1929 Graf Zeppelin dirigible 30.00
1947 Pan American Airways 4.00
Constellation
2006 Suborbital passenger 0.50
spacecraft
Across the Atlantic
(New York to London)
1905 Sailing ship—Atlantic 12.00
1938 Steamship—Queen Mary 4.00
2005 QE2 6.00

166
M06B_COOK1670_06_GE_C06.indd 166
2 Hour 4 Hour 6 Hour 8 Hour 10 Hour 12 Hour 14 Hour 16 Hour 18 Hour 20 Hour 22 Hour 24 Hour 26 Hour 28 Hour 30 Hour
Mackinaw Ferry Port Total Travel

City to to Grand Time: 25 hours
20 min
10 min
t Chicago to
8 hours
ar Mackinac Hotel 35 minutes
St Kalamazoo,
Hong Kong to Kalamazoo to Island
2 hrs 35 min
MI
14 hrs 30 min
Hong
Kong
Chicago Mackinaw City
Ferry Grand Hotel

Tsawwassen ferry Car Mackinac Island,
to Swartz Bay Michigan, USA
Ferry Terminal
Swartz Bay Total Travel
t Vancouver to Ferry Terminal Time: 14 hours
30 min
30 min
ar Tsawwassen to The Fairmont
St Hong Kong to Ferry Terminal Empress Hotel
1 hr 30 min
11 hrs 30 min
Hong
Kong
Vancouver
Bus
The Fairmont Empress Hotel,
Boat Victoria
Car
Total Travel
Newark Boston Airport Time: 17 hours
t
10 min
ar to to Four Seasons
St Hong Kong to Boston Hotel
1 hr 20 min
15 hrs 30 min
Hong
Kong
Newark, NJ
Taxi
Four Seasons Hotel
Boston
FIGURE 6.1
Intermodal transportation and times.
13/05/17 10:41 AM
Table 6.2 Comparison of Travel Times between Washington, D.C., and

Chicago, Illinois
Mode of Transportation Approximate Travel Times (hr)
Airplane 1.5
Bus 19
Car 12
Train 17
Note: The above time estimates factor in check-in lead times and transportation to terminals.
Source: Based on “The deals on the bus” in USA Today, January 18, 2008.
FIGURE 6.2 1200

The 24-hour clock. 2400
1100 0000
0100
2300 1300
12
11 1
1000 0200
2200 1400
10 2
0900 0300
2100 9 3 1500
8 4
0800 0400
2000 1600
7 5
6
0700 0500
1900 0600 1700
1800
The international standard for transportation timetables is the 24-hour clock.

Figure 6.2 presents a visual example of the 24-hour clock. Notice that by using this
style of timekeeping, there is no need for either a.m. or p.m. designations.
Surface Transportation
Just like modern travelers, early travelers probably used both land and water. Modern
modes of surface transportation were ushered in with the development of sailing ves-
sels and then passenger railroads, and grew with increased personal ownership of
automobiles, availability of rental vehicles, and the convenience of motorcoach ser-
vices. We will briefly examine important historical developments as well as key issues
associated with each of these modes of transportation.
Plying the Waves

The power of the wind behind a good sail moved passengers across countless miles of
water to many locations for business and pleasure. However, no matter how sleek or fast

these ships, they were always subject to the vagaries of the wind. With a favorable wind,
it truly was “smooth sailing.” But when the wind died and the sails went slack, there
was little for passengers and crew to do other than sit and wait for the wind to return.
With the introduction of steam power, regularly scheduled passenger service on
primary water routes became a reality. Like most of the early technological innova-
tions in transportation, steam-powered ships originated in Europe. In 1838, two pas-
senger ships (the Sirus and the Great Western) crossed the Atlantic from Ireland and
Great Britain to the United States. By today’s standards, and even compared with the
speed of clipper ships, their 19- and 15-day crossings were slow. But they ushered in
a new age of dependable scheduled service whereby travelers had some assurance that
they would arrive at their destinations on time.2
Transatlantic passenger traffic grew rapidly until 1957 when another technologi-
cal innovation—the jet engine—heralded the demise of point-to-point ocean crossings.
Although Cunard Line still runs scheduled routes between Southampton, England, and
New York City, and some cruise ships at times carry passengers on point-to-point
crossings, ocean-going transportation is now limited. Long-distance cruise ship cross-
ings are typically restricted to repositioning cruises, in which cruise ships are being
moved from one location to another. For example, a cruise line will move ships from
the Caribbean to the Mediterranean to take advantage of seasonal changes and pas-
senger demands. Cruise ships are such a significant sector of the tourism industry that
we will take an in-depth look at cruising in Chapter 10.
Mention water transportation, and most people think about cruise ships or a brief
hop on a ferry when they cross a river, lake, or other short distance on a waterway.
Water transportation, especially ferry services, is still an important link in the total
transportation system. Passenger ferries have evolved over time and have become more
sophisticated, offering a wide range of services. They are now designed to do more
than just carry passengers and vehicles. Some ferries also offer sleeping cabins, restau-
rants, lounges, casinos, movie theaters, shops, and child-care services.
Passenger ferry routes have been designed to tie in with rail and road systems to
facilitate intermodal transportation. These routes create important links in the trans-
portation system for many residents and visitors in North American locations such as
Alaska, British Columbia, Newfoundland, Nova Scotia, and Washington State. British
Columbia, for example, has an extensive system of ferries calling on 42 coastal ports.3
For the millions of people who travel throughout Asia and the European community,
water transportation is not a luxury but a necessity and a key driver of tourism.
Technological advances in ferry design and construction have increased both
speeds and operating efficiencies. These high-speed ferries are particularly noticeable
in high-traffic tourist areas such as the Bahamas, Catalina Island, Hong Kong, Tas-
mania, and along the Massachusetts coastline. These locations are all served by high-
speed catamarans that can transport passengers at speeds of up to 42 miles per hour.
Riding the Rails

Passenger rail service had its origins in Europe. The first railway service for passengers
was inaugurated in Europe on September 17, 1825, when the Stockton and Darlington
Railway began offering regularly scheduled service in England. Passenger rail service
arrived in North America in 1829, when the South Carolina and Canal Railroad began
carrying passengers between Charleston, South Carolina, and Hamburg, Georgia,
with steam-powered locomotives. Transcontinental service in the United States began
in 1869 and in Canada in 1885.
Long-distance rail travel was given a boost in the United States when George Pullman
developed the Pullman coach, with sleeping facilities for overnight travel. The addition of
dining cars and legitimate food and lodging facilities pioneered by Fred Harvey heralded

the golden age of passenger railroad service in the United States. Dissatisfied with poor
food and service, Harvey arranged in 1875 to provide food service for the Atchison,
Topeka, and Santa Fe Railroad at its Topeka, Kansas, depot. He became so well known for
quality and service that the railroad eventually awarded him all of its dining car services.
Passenger rail service flourished and was an important form of domestic transpor-
tation in Canada and the United States until the 1940s. In fact, railroad transportation
was so prominent that lodging facilities were developed at major destinations along the
rail lines such as Banff, Alberta, Canada, and White Sulphur Springs, West Virginia.
However, the forces of change eventually led to the decline of passenger rail service in
North America. First, automobile ownership as well as the number of miles traveled
by car increased. Then, the Trans-Canada Highway Act of 1949 and the U.S. Federal
Aid Highway Act of 1956 enabled provinces and states to begin constructing major
highway systems. Both of these factors facilitated long-distance automobile travel.
Second, domestic jet passenger service became available. Third, the railroads did not
adequately maintain their tracks or customer services. The final blow to U.S. passenger
rail service came in 1967 when the post office announced that it would no longer ship
mail by train. Without this government subsidy, passenger services became unprofit-
able, and the railroads began to concentrate on moving freight.
Canada and the United States Follow Similar Tracks

for Rail Service
Rail passenger service followed similar tracks of decline in both Canada and the United
States until public interest in salvaging long-distance passenger train service resulted
in government intervention. Amtrak was formed in 1971 and VIA Rail Canada in
1978 to reduce the number of routes and points served while upgrading the remain-
ing passenger rail systems. Although in different countries, there are many similarities
between these two passenger-rail-operating companies.
Amtrak is the marketing name for the National Railroad Passenger Corpora-
tion, which is a combination of the passenger rail services of U.S. railroads. Amtrak
trains now serve 45 states, with stops in hundreds of communities. (Note: The popular
Alaska Railroad is not part of the Amtrak system.) VIA Rail Canada is the market-
ing name for Canada’s passenger train network, which links over 400 communities
throughout the country. Although they both receive governmental financial support,
neither Amtrak nor VIA Rail Canada is a government agency; they are corporations
structured and managed like other large businesses.
Passenger rail service in Canada and the United States, where passenger and freight
trains share the same rails, still faces an uncertain future and will probably continue
to rely on some form of government subsidies. However, with increased urban growth
and new airports being constructed farther and farther from city centers, rail service
may grow in importance. Because train terminals were originally built in the center of
cities, they now provide a convenient central location and, in many cases, faster and
easier transportation in crowded corridors. This is especially true between major
cities in close proximity to each other, such as Montreal and Toronto, New York and
Boston, Kansas City and St. Louis, and Los Angeles and San Francisco.
Recent improvements in Amtrak service can be attributed to several factors:
introduction of improved service and scheduling in the high-traffic Northeast cor-
ridors, aggressive marketing and packaging of vacation trips including rail passes
(All Aboard America Fares) and fly/rail packages, membership in the Airlines
Reporting Corporation (ARC), and listings on airline computer reservation
systems. Amtrak service has been further enhanced by the addition of high-speed
trains (top speeds of 150 mph) on major passenger routes and routes that serve as

Passenger rail service is an important transportation mode in many countries. Photo by

Cathy Hsu
feeders to major hub airports. In fact, in some city pairs, transit time is shorter via
Amtrak service than by air service.
Similar steps such as rail passes (CANRAILPASS), fly/drive packages, special tour
packages, and lodging partnerships have been taken by VIA Rail Canada to enhance
customer service and ridership.
Asian and European Rail Service Blazes Ahead

Although train travel has declined in Canada and the United States, it has continued to
be an important mode of intercity transportation in Asia and Europe. At present, the
countries with the largest number of train passengers are China, Germany, India, and
Japan. Heavy population concentrations and attention to roadbeds and tracks dedi-
cated solely to passenger traffic have led to the development of high-speed rail service.
China, Japan, Korea, France, Great Britain, Italy, Germany, Sweden, and Spain are just
a few of the countries where passengers can travel by train at speeds averaging up to
220 miles per hour (350 kilometers per hour). The technology for high-speed rail travel
is continually evolving, and trains that can travel at speeds of up to 270 miles per hour
are being put into service.4 The popularity of high-speed rail in Taiwan has actually
caused the bankruptcy of several domestic airlines; and the surviving airlines no longer
offer routes that duplicate the service of the rail. The rail service between Taipei (in the
North) and Kaohsiung (in the South) takes about 90 minutes at a cost of $50, whereas
the flight time was about 60 minutes at a cost of $100 while it was in operation.
Between major population centers within European countries, train travel has also
become so fast and efficient that it is often more convenient and less expensive than
travel by plane when travel to the airport, check-in, and baggage handling times are
considered.5 By comparison rail service in Canada and the United States is more expen-
sive and very difficult to piece together for long distance journeys. Examples in Table 6.3
compare the competitive nature of train and air travel between key European cities.

Table 6.3 Comparison of Train and Air Travel Times between Key
European Cities
By Rail By Air
London to Edinburgh 4 hr 1 hr 15 min
Paris to Marseilles 4 hr 15 min 1 hr 20 min
Madrid to Seville 3 hr 30 min 55 min
Hamburg to Munich 6 hr 1 hr 15 min
Rome to Milan 4 hr 1 hr 5 min
One of the most exciting developments in rail transportation was the inauguration
of high-speed passenger rail service between London, England, and Paris, France. The
Eurostar, which travels through the channel tunnel or “Chunnel,” allows passengers to
make the entire trip in just less than two hours at speed of close to 200 mph, cutting
the time in half when compared with ferry crossings.
Passenger rail service in Europe has been further enhanced through expansion
of the Eurailpass. A number of European countries—Austria, Belgium, Denmark,
France, West Germany, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain,
Sweden, and Switzerland—introduced the first Eurailpass in 1959. Finland, Greece,
and Ireland were added later. With the fall of the Berlin Wall and the end of the Cold
War, the pass became valid throughout the entire German Republic as well as the
Czech Republic and Hungary. Trains have become so significant in Europe that they
move more than 40 times more passengers every day than in the United States.6
The Eurailpass is used as a marketing tool to attract international visitors from
outside the European community because it is available only to non-European tour-
ists. Pass holders are allowed unlimited travel for varying periods of time throughout
Western Europe, with the exception of Great Britain. Recognizing the importance of
rail travel to their total tourism package, individual countries such as Great Britain
(BritRail pass), Germany (German Railpass), Switzerland (Swiss Pass), Spain (Spain
Railpass), and Greece (Greek Railpass) are providing similar services.
Most countries consider passenger rail transportation to be of vital national impor-
tance and continue to retain government control. Therefore, information on operating
results (other than ridership) and the financial condition of most passenger railroads
is not available. This may all change in the future as a trend toward private ownership
and reduced subsidies has emerged in European countries, especially Great Britain and
Germany. Managers there find themselves venturing into unfamiliar territory, requir-
ing marketing skills to maintain and increase ridership and financial skills to attract
the necessary capital to maintain and improve service quality while controlling costs.
Scenic Railroads
In addition to the ready availability of passenger rail service for basic transportation
in most developed countries, there are several specialty trains with particular appeal
to tourists. The Orient Express is without a doubt the most famous of all luxurious or
scenic trains. With its magnificently restored cars, it runs from London, England, to
Istanbul, Turkey. Another classic train, the Blue Train, can be found traveling between
Cape Town and Johannesburg, South Africa. With its gold-tinted windows and fine
dining, the Blue Train is also renowned for its mystique and romanticism. China’s
Sky Train carries passengers across the Tibetan Plateau from Xining, China, to
Lhasa, Tibet, using three locomotives to cross the 16,640 foot Tangula Pass.7 Other
trains such as the Copper Canyon in Mexico, the Palace on Wheels in India, and the

Table 6.4 Exploring the World of Heritage Railways and Railroads

Alishan Forest Railway Taiwan
Coral Coast Railway Figi
Durango & Silverton Narrow Gauge Railroad United States
Kalka-Shimla Railway India
Kettle Valley Steam Railroad Canada
La Trochita Argentina
Moka Railway Japan
North Yorkshire Moors Railway United Kingdom
Puffing Billy Railway Australia
Talyllyn Railway Wales
Indian-Pacific in Australia are just a few of the many specialty trains that can be found
throughout the world.
In addition to these long-haul scenic trains, you will find many historic trains that
have been preserved for tourist enjoyment. Although many of these trains may be con-
sidered to be attractions (see Chapter 9), these vintage trains carry an amazing number
of tourists on trips of nostalgia each year.
Depending on where in the world these rail lines are located, they may also be
called tourist railways or heritage railways. Everything from narrow gauge and cog
lines to steam and electrified locomotives await train buffs around the globe. Just con-
sider the geographic diversity of possibilities shown in Table 6.4.
Cruising the Highways and Byways

The term highway came into use as roads were built up from the paths they followed to
raise them out of the mud and make them usable on a year-round basis. Innovations in
road construction that were pioneered by the French and English soon spread throughout
the world.1 Road construction has continued to progress and now plays a central role
in the transportation systems of all developed countries. For example, the first multilane
highway, the Autobahn, built in Germany during the 1930s, still serves as a vital link in that
country’s transportation system. These improvements in road systems allowed travelers to
move from horses and carts and stagecoaches to automobiles and motorcoaches.
Automobiles
Nowhere in the world is the love affair with the automobile stronger than in North Amer-
ica. Much of the credit for this attraction goes to the pioneering genius of Henry Ford, who
ushered in the age of mass automobile travel with his famous Model T. Between 1908 and
1923, 15 million of these affordable cars were produced. The car is now more than simply
transportation for most Americans; it is a symbol of freedom and individualized lifestyles.
The availability of affordable automobiles and an expansive highway system have
made automobile travel the most popular form of transportation in Canada and the
United States. As Table 6.5 shows, the vast majority of domestic trips in the United
States were taken over the highways. In addition, 84% of all overnight weekend trav-
elers drove to their destinations.
Both Canada and the United States have focused government attention and
resources on the development of highway systems rather than rail systems. The
Trans-Canada Highway spans 4,860 miles between Victoria, Vancouver Island, British
Columbia, and St. John’s, Newfoundland. The interstate highway system in the United
States has resulted in an intricate web of 42,800 miles of divided highways connecting

Table 6.5 Modes of Transportation for U.S. Trips and Trip Destinations
Auto 90%
Airplane 7%
Bus 2%
Train 1%
Notes: 98% of trips to destinations within United States.
62% of trips to destinations within home state.
Sources: National Household Travel Survey, 2001–2002; NPTS Brief, U. S. Department of Transportation,
Federal Highway Administration, March, 2006.
every major city in the country. This system is truly remarkable because it accounts for
only 1% of all roads in the United States but carries over 20% of all highway traffic.
Why do travelers rely on their personal motor vehicles for so many of their trips?
Reasons vary but include the relatively inexpensive cost of vehicle travel compared
with that of other modes, especially for families. In addition, cars, trucks, and recre-
ational vehicles offer the convenience of having a vehicle at the destination, the ability
to alter the route and pace, and the opportunity to explore new places “up close.”
Supporting all of these over-the-road travelers is the American Automobile Association,
commonly known as AAA. The association is a network of 86 independent auto clubs in the
United States and Canada. AAA boasts 47 million members in North America and is affili-
ated with over 100 million members in 120 countries through its reciprocal agreements with
212 auto clubs throughout the world. Services provided by AAA to its members include
emergency road service, travel insurance, access to professionally trained travel agents and
counselors, trip routing and mapping services, and assistance with travel documents.
Although automobiles may be the desired form of personal transportation in the
United States, less than 20% of the population has ever rented a car. Growth in the
rental car business has historically paralleled or exceeded the growth in air travel, with
almost two-thirds of car rental revenues being derived from airline passengers.8
This growth has been dominated by a few large companies as this industry segment
has gone through a significant consolidation period. Enterprise (with the acquisition
of Vanguard, the parent company of Alamo and National) has the largest rental car
fleet, followed by Hertz, and the combination of Avis and Budget into the Avis Budget
Group, respectively. The primary users of rental cars are business travelers, who rent
over 75% of all vehicles, but car rental companies are beginning to turn some of their
attention to leisure travelers. Hertz and Enterprise serve to highlight the differences in
marketing strategies among the rental car companies. Hertz controls the largest market
share at most major airports whereas Enterprise has chosen to service a broader range of
customers by delivering cars directly to customers from less expensive off-airport sites.9
The range of variables managers must deal with in this industry is staggering. To
deploy fleets of cars ranging in average age from 8 to 12 months across broad geographic
areas and achieve maximum fleet utilization, managers must anticipate a wide variety of
customer demands, including car types, rental periods, insurance, fuel options, and pickup
and return locations. Like other tourism service suppliers, rental car companies have a slim
profit margin. For example, “the profit margin on a $50 rental is around $5” (p. 1).10 Just
think about what happens to that margin if a renter brings the car back with less than a
full tank of gas and pays the often unobserved and inflated price charged for refueling.
Logistics also play a key role in successful car rental operations in getting the right
cars to the right place at the right time. Recent software developments provide the nec-
essary information for employees and managers to know when to refuse a short-term
rental based on the probability that the same vehicle can be rented for a longer term
to a different customer.7 Still, cars must be moved to meet seasonal demand, creating
inexpensive repositioning rentals as fleets must be moved from high demand areas

FYI RENTING A CAR

Although renting cars in the United fees. The list goes on, so it pays to ask only for damages not already covered
States is fairly straightforward, except questions and shop around as well as by your personal automobile or other
for those under 25 years of age, rent- to use the services of your travel agent. insurance. If you do decide to rent a car
ing outside the United States can be a Check the restrictions on your credit as you travel abroad, take the time to
more complicated adventure. There can card coverage before you rent. Most get an international driving permit.
be a variety of charges added to the credit cards provide supplemental
basic cost of rental, including mileage, collision-damage waiver or loss-damage
insurance, drop-off charges, and airport waiver (CDW/LDW) coverage, but
such as Florida in the Spring to northern locations later. Can economies of scale make
a difference? The answer is yes, as demonstrated by the dominance of Enterprise and
the Avis Budget Group in the business and leisure markets shown in Table 6.6.
In this highly competitive industry, price is important, but it is often the lit-
tle things, such as how quickly you get your car, that make a difference.11 Surveys
show that customers want to cut as many hassles out of rental car returns as possible.
Car rental companies are responding to these requests by enhancing their services to
include valet delivery and parking services to avoid shuttle buses, equipping cars with
onboard computerized navigation systems, providing drop boxes for the return of keys
and rental forms, and equipping service personnel with handheld computers to com-
plete rental transactions at the point of return.12
Table 6.6 Growth in Major Business and Leisure Rental Car Suppliers in the
United States (2010–2015)
Number of
Cars in Cars in Locations Number of
Company Service 2010 Service 2015 2010 Locations 2015
Enterprise 850,689 1,166,828 6,187 6,250
Holdings
(Includes
Alamo Rent A
Car, Enterprise
Rent-A-Car,
National Car
Rental)
Hertz (Includes 290,000 499,100 2,300 5,410
Advantage
Rent-A-Car,
Dollar, Thrifty,
Firefly)
Avis Budget 270,000 365,000 2,100 3,250
Group
(Includes
Payless not
Zipcar)
Dollar Thrifty 108,000 See Hertz 463 See Hertz
Automotive
Group
Sources: Based on 2010 U.S. Car Rental Market. Retrieved on March 6, 2012. Available at: http://www
.autorentalnews.com/fc_resources/ARN-2010marketdata.pdf; and 2015 Car Rental Market Retrieved on
May 16, 2016. Available at: http://www.autorentalnews.com/fileviewer/2229.aspx.

The rental transportation options in some tourism areas have diversified to include
many alternatives other than rental cars. For example, in Kitakyushu City, Japan, users can
choose from ultra-lightweight vehicles (ULVs), electric-assisted bicycles, electric scooters,
and electric four-wheel carts. When consumers have options for rentals in short transporta-
tion situations such as this, which option do they chose? It was not the car, but the ULV.13
Motorcoaches
Motorcoaches have come a long way since their predecessor (stagecoaches) bounced
across the countryside. There are now two primary categories of motorcoach (often
called bus) transportation—scheduled intercity travel and charter/tour groups. Inter-
city bus travel, like rail travel, has continued to command less and less of the scheduled
travel market in the United States. As with railroads, the importance of scheduled bus
service in the United States peaked in the 1940s, and the decline continues today. In
1980, bus travel accounted for 12% of all interstate travel, but it now accounts for
only about 6% of that market segment. Although the number of passengers utilizing
interstate buses has continued a gradual downward trend, this mode of transportation
still provides a vital link in domestic and international transportation systems.
In the United States, schedules, fares, and routes of intercity buses were closely
regulated by the Interstate Commerce Commission (ICC) until passage of the Bus
Regulatory Reform Act of 1982, which eliminated most regulations except those per-
taining to safety. In this deregulated environment, intercity bus lines have continued to
consolidate and pare their schedules and now focus primarily on trips of less than 250
miles. Greyhound Lines is now the dominant intercity bus service provider in North
America carrying over 20,000 passengers daily in Canada and the United States.
Although the primary market segment served remains visiting friends and relatives,
several diverse target markets, including lower-income groups and riders under the age
of 24 or over the age of 65, are proving to be fertile ground for future growth.
As Greyhound continues to rationalize its routes, many rural communities have
found themselves without bus services and miles away from any rail or air connections.
Luckily, many of these abandoned routes have been picked up by regional carriers.
Motorcoaches provide stress-free travel for group tours. Photo by Cathy Hsu

The regional carriers often rely on government subsidies to meet expenses. Through
interline agreements passengers are able to buy one ticket and transfer between multi-
ple motorcoach carriers for long distance trips.14
While intercity bus travel is common in many parts of the world, for many North
Americans it is considered to be demeaning. This move away from bus travel occurred
in North America in the mid-20th century as a result of rising living standards, suburban
growth and sprawl, growth in airline capacity, and increased car production. All of these
factors came together to change the demand for scheduled intercity bus service. It became
a transportation choice used mainly by poor whites, African Americans, Hispanics, recent
immigrant women, and low-income males who could not afford car ownership.15
New life is being breathed into the North American market by upgrades at Grey-
hound and a variety of start-up carriers serving paired cities like New York–Washington,
D.C., Los Angeles–San Francisco, and Chicago–Milwaukee. Using concepts such as
yield management and hub-and-spoke systems, bus companies are finding new niches
and growth opportunities.16
Although intercity bus travel in the United States has declined, motorcoach usage in
general has increased owing to its popularity among tour and charter operators because
of flexibility and economy of operation. In addition, intercity bus travel remains an
attractive alternative to rail travel in many countries with high population densities.
Additional growth opportunities for motorcoach travel can be found in the mature
traveler market segment. During the past two decades, the first wave of baby boom-
ers began to enter their senior years, making them a prime target for the domestic
motorcoach market. Their primary considerations in selecting motorcoach tours will
be service, quality, and comfort. Motorcoach executives predict that health, spa, spe-
cial event, entertainment, and golf and ski packages will be the primary tours sought
by these demanding groups in the future.17
As profiles of individuals using motorcoaches have changed, so have the motorcoaches.
“Seats are wider. Views are better. There’s stereo music and often an integrated video sys-
tem showing the latest movies, just like the airlines. Increasingly, there’s a hot beverage
service or even a full galley with a microwave oven” (p. 9).18 The standard motorcoach has
grown from 40 feet to as much as 45 feet in length, and passenger capacity has increased
from 47 to 55. Motorcoach operators such as Gray Line highlight their ability to provide a
wide range of ground transportation services especially suited to motorcoaches, from sight-
seeing tours and charter services to airport services on six continents at 150 destinations.
Motorcoach operations, whether intercity (bus) or charter (tour operators), have
many of the same operational concerns that face every participant in the tourism industry.
Because operators in this industry are privately owned, financial data are not available.
Competition and government involvement in intercity bus transportation varies
widely outside the United States. In some countries, such as Spain, bus transportation
is more important than rail transportation; in other countries, such as Iceland, there is
no train service, only bus service; and in Japan, the Japan Rail Pass includes unlimited
travel on the bus as well as the train. Therefore, because of the country-specific nature
of intercity bus transportation, we will leave the investigation of availability and oper-
ations in specific geographic locations up to your exploration.
Motorcoaches usually serve many more locations than trains, which are confined
to specific routes because of their fixed tracks. They are frequently less expensive to
ride and can often take you to places not served by trains, although they are generally
slower. However, there are several exceptions to this general rule. In southern European
countries, including Portugal, Greece, Spain, and Turkey, bus service may be faster but
more expensive than trains.19 The long-distance bus networks of Great Britain, Ireland,
Portugal, Morocco, Greece, Turkey, and the Czech Republic are more extensive, more
efficient, and often more comfortable than trains. The Eurobus programs provide direct
competition to train-pass programs, with two months of unlimited travel on buses

accompanied by an English-speaking driver and guide. Destinations in continental Europe

include Paris, Amsterdam, Cologne, Prague, Munich, Venice, Rome, and Milan. As with
rail passes, passengers get on and off at their leisure.20 As researchers studied intercity bus
travel in the United States and Germany, they determined that the spatial distribution
(distances) between cities was a key determinant in the supply of intercity bus services.21
In most major tourism active metropolitan areas, such as Paris, London, Sydney,
and Shanghai, city tour buses are available to take visitors around major tourist attrac-
tions within the city. Passengers can purchase a single day or multi-day pass and “hop
on, hop off” as often as they wish. These bus tours are often known as loop tours;
because the buses drive around town in a loop, provide a quick and convenient way to
get an overview of a city.
Important Transportation Links

The final link in the surface transportation system is composed of many modes such
as subways, trolleys, intracity buses, water taxis, and light-rail systems. Although each
of these forms of transportation is important to the overall transportation system, we
will not examine them in this book because they are used primarily for daily commut-
ing to and from work and do not fall within our definition of tourism. However, they
do fill an important transportation need for many individuals who do not want to be
burdened with automobiles as they travel.
If short distances are involved and/or individuals do not need a car while at their
destination, then they may rely on taxi, limousine, ride-sharing, or shuttle services. Taxis
fill an important transportation function by efficiently moving large numbers of people
within cities, especially in crowded urban areas, as well as to and from airports and rail-
way stations. One of the most significant changes in the tourism industry has been the
intermodal tour that combines motorcoach, air travel, railroad, and water travel.22
FYI CONSIDER YOUR OPTIONS

Traveling from Boston to New York? Your options are numerous!
Luxury bus Called the LimoLiner, this luxury bus costs about $178 round-trip, takes 4 hours, and features
such amenities as reclining leather seats, free sandwiches, and movies.
Bus Greyhound offers round-trip express service for $70 with a trip time of about 4 hours and
20 minutes. Standard motorcoach amenities are offered.
Train Amtrak provides round-trip service for around $140, and the rail journey takes about 4 hours
and 15 minutes. Seats offer more legroom and you can get up and walk around. Café cars sell
snacks and drinks. No reservations are required. Just show up and buy a ticket.
High-speed train Amtrak’s Acela is priced between $220 and $280 round-trip, and the special train shaves nearly
an hour from the duration of the regular train’s trip. Amenities include extra legroom in comfy
seats and power outlets for computers, phones, and DVD players. Foods offered are also a cut
above its traditional counterpart.
Airplane Several airlines offer shuttles between cities. Advance-purchase tickets can often be had for
about $120, whereas walk-up fares may be as high as $360. But the flight is short (about
1 hour). U.S. Airways even offers a special expedited security check so passengers can arrive
just 20 minutes before take-off.
Sources: Based on Limoliner. http://www.limoliner.com/
Greyhound. https://www.greyhound.com/farefinder/step2.aspx?
Amtrak’s Acela. http://tickets.amtrak.com/itd/amtrak#
Expedia. http://www.expedia.com/Flights-Search

Visitors to Havana, Cuba will find that transportation comes in many forms. Photo by
Ron Hilliard
A highly valued transportation link for air travelers is transport to and from the
air terminal. In 1983, SuperShuttle pioneered door-to-door ground transportation by
offering shared ride vans for travel to the Los Angeles airport. Today, SuperShuttle
provides service for over 20,000 air travelers a day. Reserving a ride on one of Super-
Shuttle’s blue vans is as easy as picking up the phone or clicking on its website. Finally,
more and more travelers are tapping into the convenience of ride-sharing services such
as Uber, Lyft, and Didi through easy-to-use mobile apps.
Soaring Through the Skies

The first scheduled passenger flight debuted in Europe on August 25, 1919, with a
route between London and Paris, and jet passenger service was inaugurated on May 2,
1952, with a flight between London and Johannesburg, South Africa. However, in the
United States, passenger service did not begin until April 17, 1926, with an inaugural
6.5-hour flight between Los Angeles and Salt Lake City. Domestic jet passenger service
did not appear until 1958, with scheduled service between New York City and Miami.
With a long and meaningful history, domestic (U.S.) cooperation between airlines
has been accomplished through the Air Transport Association (ATA) and international
cooperation through the International Air Transport Association (IATA). Formed in
1936, ATA serves as a united voice for the airline segment of the tourism industry and
provides a format for the discussion of safety and service issues and the promotion of
technological advancements. IATA, which is composed of almost all major interna-
tional airlines, was formed in 1919 and reorganized in 1945. Its purpose is to facilitate
the movement of passengers and freight across a combination of route structures and
international boundaries. Through these cooperative agreements, passengers are able
to buy a single ticket based on one currency that is valid for travel throughout an air
system that may involve many carriers and cross many national boundaries.
As with all tourism service providers, competition among airlines is intense. In an
attempt to attract more customers and to develop brand loyalty, American Airlines

FYI THE MARKETING POWER OF FREQUENT-FLIER MILES

Frequent fliers are finding some new about any organization from banks and gain added revenue and the purchasing
ways to earn additional miles even retailers to charities that are willing to organizations obtain attractive promo-
when they are not in the air. Airlines buy them. Purchases can be made for tional incentives.
are selling frequent-flier miles to just about two cents per mile. The airlines
Source: In terminal decline. (2005, January 8). Economist, 374(8708), 14.
pioneered a frequent-flier marketing program in 1981. This program was soon copied
by other major carriers as well as regional and low-cost carriers. Research into why
consumers participate in frequent-flyer benefit programs found three perceived dimen-
sions: recognition, convenience, and exploration. These benefits relate to multiple con-
sumer motivations: utilitarian (convenience benefits), hedonic (exploration benefits),
and symbolic (acknowledgment/recognition benefits).23
These programs have increased customer loyalty, with passengers often going out
of their way or taking inconvenient flights to obtain frequent-flier miles, yet few actu-
ally cash in their mileage for awards.24 Airlines are also partnering with a multitude
of other organizations both inside and outside the tourism industry by offering miles
for purchase to generate additional revenues, increase brand awareness, and heighten
customer loyalty.
“Airlines have always had a love–hate relationship with their programs—they love
the loyalty they instill in passengers, but they hate the fact that people collect so many
miles. According to an estimate by Inside Flyer magazine, there’s a backlog of about eight
trillion unredeemed frequent-flyer miles” (p. 18).25 This accumulated mileage could be a
financial liability for some airlines, where revenue-paying passengers could be displaced
by non-revenue-paying frequent-flier awardees. Recognizing this potential liability, air-
lines have increased the number of miles required to obtain frequent-flier awards and
restricted the number of seats available for these awards, especially on popular routes.
Airlines, like most other service providers in the tourism industry, operate on very thin
profit margins. In fact, since the inception of commercial air service, airlines have collec-
tively lost more money than they have ever made. Therefore, controlling costs and maxi-
mizing revenues are major concerns and absolute necessities for survival and profitability.
As can be seen in Figure 6.3, the most significant expenses as a percentage of sales in the
airline industry are operating costs and equipment. Because costs other than labor are diffi-
cult to control, airline companies attempt to maximize revenues. This can be accomplished
by obtaining the highest possible load factor per revenue passenger mile on each flight.
In the United States, the leader in low-cost airlines, Southwest, has achieved what
seems to be an amazing operational cost per seat mile flown of six cents. However, Air
Asia has eclipsed this efficiency benchmark by flying its planes at a cost per seat mile
of three cents.26 Combining low cost with maximizing available seat miles (ASMs) has
led to profitability for these select few carriers in an industry filled with competition
that struggles even to achieve break-even.
Operating in a Deregulated Environment

The Airline Deregulation Act of 1978 is still shaping the landscape for airlines in the
United States. Prior to the passage of the Act:
1. Airlines did not compete on price.
2. Airlines wanting to begin services to new cities had to apply to the Civil
Aeronautics Board (CAB).

All other 13.7%

Salary and benefits 26.4%
Transport related 13.5%
Aircraft ownership 11.6%
Fuel 25.1%
Aircraft maintenance 9.7%
Note: 2010 data are through June.
FIGURE 6.3
Domestic and International U.S. Airline industry share of operating expense. Source: U.S. Department of Transportation,
Research and Innovative Technology Administration, Bureau of Transportation Statistics, Office of Airline Information. Air Carrier
Financial Reports (Form 41 Financial Database), special tabulation, October 2010.
TOURISM IN ACTION
RING THE BELL!
Visitors to Copenhagen are more likely to hear the sound of a bicycle bell than the horn of a car. It is not surpris-
ing since there are now more bikes than cars on the streets of the Danish capital. Copenhagen is ranked as the
most bike-friendly city in the world with an increasingly expanding network of over 454 kilometers (282 miles) of
designated bike lanes. Indeed, the bike has become synonymous with the laid-back lifestyle of one of Europe’s
hippest city destinations.
This phenomenon is also changing how visitors are exploring the city. For example, visitors can take advan-
tage of the city’s bike share program, Bycyklen. Bycyklen electric bikes are available at more than 100 stations
throughout the city and a fully charged battery can last up to 25 kilometers (15.5 miles). It is all very hassle-free.
Visitors can set up a user account via the bike’s touchscreen tablet and select the preferred tariff. They can opt for
pay as you go, which amounts to DKK 40 (approx. USD 6) an hour. Alternatively, visitors who plan to stay longer
in the city can take out a subscription or a prepaid package. Cycling does not need to be hard work. The bike can
reach a speed of up to 24 km/h (15 miles/h) and has a built in GPS route planner, which enables tourists to create
their personalized route plans. And it is safe. According to the Cycling Embassy of Denmark, statistically, one has
to cycle 2,800 years to be involved in a serious accident.
There are of course alternative bike hires to suit every need or budget. Bike the City provides a bike rental scheme
in which visitors can select a thematic tour and use the audio-visual GPS device as a guide. For example, visitors can
choose to visit Nørrebro and learn about the world’s busiest bicycle street and less-known attractions. The budget
traveler is certainly not left out. For example, a budget bike can be hired at Baisikeli for as little as DKK 50 (USD 7) for
6 hours or DKK 80 (USD 11.5) for 24 hours. If cycling does prove to be too tiring, visitors can bring their bikes for free
onboard the city’s suburban rail network.
Visitors are recognizing that the best way to visit Copenhagen is by bike. It is not only an environmentally friendly
mode of transport, cycling itself has become the tourist attraction. Even if it rains!
Sources: https://www.wired.com/2015/06/copenhagenize-worlds-most-bike-friendly-cities; http://denmark.dk/en/green-living/
bicycle-culture/; http://www.cycling-embassy.dk/facts-about-cycling-in-denmark/statistics/; https://bycyklen.dk/en/; http://www
.copenhagencvb.com/copenhagen/awards-accolades-copenhagen
M06B_COOK1670_06_GE_C06.indd 180 08/06/17 1:06 PM

3. Airlines had to apply to the CAB 90 days in advance and receive formal
approval to discontinue service to a city.
4. Airlines were prohibited from entering the tour business.
The crafters of the Deregulation Act envisioned the creation of a freely competitive
market that would provide needed air service more efficiently. The passage of this act
may seem like ancient history, but even after 40 years, airlines are still grappling with
this evolving competitive marketplace.
To facilitate the move to a competitive market, the CAB and its regulatory capac-
ities were eliminated, and the U.S. Department of Transportation (DOT) assumed
the responsibilities for overseeing operational issues such as the overselling of tickets,
smoking on flights, and potentially deceptive advertising practices, as well as compet-
itive concerns such as mergers and acquisitions. Air routes were made available to all
carriers who could meet safety and service standards, and new carriers were encour-
aged to provide a variety of low-priced services. The Federal Aviation Administration
(FAA) has responsibility for the safety of air transportation carriers.
Deregulation removed all the previously listed operating constraints that restricted
airline operations. Pricing became very complex. Rather than a simple three-tier structure
(economy, business, and first class), there are multiple prices, and airlines change these
prices hundreds of thousands of times each day. Sometimes, very low prices on a
particular route may be available for only a few minutes. All these changes are being
made as airlines attempt to meet customer needs, maximize load factors, and increase
revenues through their revenue management systems. Today, there is little to keep a
carrier from entering a new city other than airport safety and capacity constraints.
Airlines may now function as tour operators, providing packaged tours directly to the
public. In addition, they may own and operate travel agencies, and they may develop new
methods of selling tickets other than directly and through the existing travel agency system.
This latter change has resulted in satellite ticketing terminals that operate in a manner similar
to automatic teller machines and other forms of electronic access, including ticketless travel.
Deregulation made the hub-and-spoke system the primary route pattern for leg-
acy carriers throughout the world. Airlines select hubs near major metropolitan areas,
where passenger, administrative, and maintenance activities can be concentrated and
quickly rerouted to their final destinations. By designating primary hubs, airlines are
able to funnel traffic into these centers to feed their trunk routes from smaller markets
along spoke routes. This system allows the airlines to capitalize on economies of scale
and match the size of the aircraft serving a market to the demand from that market.
An example of a hub-and-spoke system is shown on the map in Figure 6.4.
FIGURE 6.4
Hub-and-spoke system.
Reykjavik
Oslo Helsinki
Stockholm
Dublin Moscow
Vancouver Copenhagen
London Berlin
Paris
Montreal
Almaty
Madrid Rome
Beijing Tokyo
Seoul Tehran Kabul
Islamabad
Shanghai Tel Aviv Bagdad
Delhi
Taipei
Hong Kong
Manila
Kuala Lumpur
Jakarta

Regional/commuter airlines, which provide lift to the legacy carriers’ hubs by flying
shorter domestic passengers on spoke routes, typically operate on a code-share basis.
In a code-share agreement, a regional/commuter airline does not sell its own tickets,
but shares the same two-letter identification code of a major airline in the computer
reservation system and usually paints its planes the same color.
The term code refers to the flight number that is used in flight schedules. Under
a code-sharing agreement, participating airlines can present a common flight number
for connecting flights. Although obviously and importantly this portrays a simple and
seamless picture to the travel buyer, it is not the only benefit. Cooperating airlines also
strive to synchronize their schedules, to maximize passenger transfers between con-
necting flights, and consolidate the cost of both airlines’ flying the same route. Code
sharing allows carriers who do not operate their own aircraft on a given route to gain
exposure in the market through display of their flight numbers and the ability to offer
those routes to their customer base.
Code-sharing agreements have also been established between airlines and rail
lines. They involve some integration of both types of transport, for example, in finding
the fastest connection, allowing exchange between an air ticket and a train ticket, or
a step further, permitting an air ticket to be valid on the train, and so on. Examples
of such code-sharing arrangements are Amtrak out of Newark Liberty International
Airport in Newark, New Jersey; Deutsche Bahn out of Frankfurt International Airport
in Frankfurt am Main, Germany (AIRail Service); and Swiss Rail out of Zurich Inter-
national Airport in Zurich, Switzerland.
In theory, by utilizing the hub-and-spoke system, legacy carriers such as American and
United are able to increase operating efficiency through scheduling arrivals and departures
in banks of flights. Banking flights is the process of coordinating flight schedules to maxi-
mize the use of ground crews and equipment as waves of flights are scheduled to arrive and
depart at very close to the same time. In addition, the shorter the period of time that an
aircraft remains on the ground, the more time it can spend in the air earning money. Some
regional/commuter airlines are able to turn their aircraft around or push them in 15 minutes
or less, whereas major carriers may take as long as 45 minutes to do the same tasks.
Deregulation and the growth of passenger air service in general have created sev-
eral potential problems. The hub-and-spoke system has created bottlenecks at hub
airports and increased travel times. Traditionally, hub-and-spoke carriers would feed
hub operations all at once during peak travel periods with short connect times so
as to speed passengers to their final destinations. The management teams at airline
companies are addressing these problems through the designation of secondary and
rolling hubs and instituting more direct flights to pair cities. For example, rather than
flying from Indianapolis to Chicago and then on to their final destination in St. Louis,
passengers can fly directly from Indianapolis to St. Louis.
Service to secondary and feeder cities is improving as larger, more fuel-efficient regional
jets (also called RJs) that can seat up to 110 passengers are being added to airline fleets.
RJs are ideal for serving long, thin (limited number of passengers) routes from an airline’s
hub. Most of these smaller regional planes are being operated by code-share carriers.
With the addition of RJs to their fleets, many code-share carriers not only are
flying routes to hubs, but also are flying more point-to-point routes in secondary mar-
kets. That means more service to cities that support small, 70- to 110-seat planes, not
larger jets, as these smaller planes can operate at a much lower break-even point than
larger planes that typically start with 170 seats.
Still, in order to maintain efficient operations and provide acceptable levels of cus-
tomer service, viable airports must be able to support at least four departures a day
with 100 seat plus capacity airplanes. Finding new efficiencies is critical to financial
survival in an industry in which pricing has become transparent and consumer demand
is driven by low price.

Rolling-hub operations have eliminated peak departure hours by more evenly

spreading flights throughout the day, using more RJs, and ratcheting down legacy
carrier operations. The effect for passengers is longer, more random connections,
causing passengers longer layovers and total travel time, but allowing for lower
fares. For hub-and-spoke operators, it means less expensive operations and the
ability to meet consumer price demands. Low-fare airline operations, pioneered by
Southwest Airlines, have focused their flight schedules on point-to-point systems.
These systems fly directly between pair cities, avoiding the transfers involved in
hub-and-spoke systems.
The Southwest Airlines model of operation is attracting a great deal of attention
as airlines around the world, especially new entrants, attempt to mimic its success.
From Ryanair in Europe and GoAir in India to WestJet serving multiple destinations
in North America and AirAsia, carriers around the globe are drawn to an oper-
ating model that holds the possibility for profitability by slashing operating costs.
Research has shown that these low-cost carriers can be successful in attracting cus-
tomers, especially in developing markets, when they focus on generating customer
satisfaction with both tangibles and responsiveness. Marketing strategies and service
management policies focused on these dimension yield customer satisfaction, pos-
itive word-of-mouth communications, increased purchase intentions, and reduced
complaining behaviors.27
Decoding the Language of the Airline World

All participants in the tourism industry have their own particular set of terms they use
to describe operating issues, but the airline industry has more than most. To understand
the airline industry, it is important to be familiar with some of the more common terms.
1. Every airline has its own two-letter identification code. Examples of these
codes for the largest airlines in the world are American Airlines (AA), Air Can-
ada (AC), Air China (CA), British Airways (BA), Korean Air (KE), Lufthansa
(LH), Qantas (QF), Singapore Airlines (SQ), and United Airlines (UA).
2. Every city with scheduled passenger service has its own three-letter airport
code to identify the airport that is served. Examples of these airport codes are
Seoul/Gimpo (GMP); New York/Kennedy International Airport (JFK); Orlando
International, Florida (MCO); Hong Kong (HKG); Orly, Paris, France (ORY);
Narita, Tokyo, Japan (NRT); and Toronto, Ontario, Canada (XYZ).
3. Every airline uses codes to identify class of service. Examples: First Class (F),
Business Class Discounted (D), Business Class Premium (J), Business Class
(C), Coach Economy Class (Y), Coach Economy Premium Class (W) (Q), and
Advance Purchase Excursion (APEX).
4. Airline service is also classified as nonstop, direct or through, and connect-
ing. Nonstop flights are from the point of origin to a destination with no
intermediate stops. Direct or through flights are from the point of origin to
a destination with one or more intermediate stops. Connecting flights require
passengers to change planes to a connecting flight between the point of origin
and final destination.
5. There are also several types of trips that passengers can book. Examples:
one-way—a trip from origin to destination without a return to origin; round-
trip—a trip from origin to destination with a return to origin; circle-trip—
similar to a round-trip except that the outbound and the return trips follow
different routes and possibly use different airlines; open-jaw—a round-trip
that allows the passenger to utilize different points of origin or return.

Free tourist shuttles provide convenience to visitors and encourage them to visit more
attractions. Photo by Cathy Hsu
Airports
We can’t leave our discussion of transportation without taking a look at terminals.
Passengers pass through many different types of terminals during their journeys:
whether rail, bus, car rental, ferry, cruise, or air. In fact, the number of travelers pass-
ing through terminals is staggering. For an idea of how big these volumes are, just
think about the fact that over 255 million people passed through the world’s three
busiest airports; Atlanta, GA, Beijing, China and London, United Kingdom in 2014.28
At times, providing services to these potential customers may seem like an afterthought.
Basic necessities such as restrooms and water fountains can be found in smaller terminals,
and added amenities such as vending machines may be added as passenger volumes increase.
With more traffic comes more services and concessions; limited service food options, news-
stands and gift shops, then bars, restaurants, food courts, expanded shopping, airline clubs,
and duty free. Then, as volumes grow into the millions, services found in many destinations
appear such as spas, hotels, and children’s playgrounds appear in airports.
One key service provider in the transportation industry, airports, has now realized
that passengers using their terminals hold the potential of substantially increased
revenues. However, it has only been since the 2000s that airport operators have shifted
their attention from simply providing facilities and services to meet basic needs to
enhancing the airport experience with a broad array of design and operational ameni-
ties focused on increasing revenues.29
According to industry research findings, satisfied passengers spend more time and
money in airports than less satisfied passengers leading to increased economic benefits
and profitability.30 With money to be made on not only departing and arriving pas-
sengers who are passing through their facilities, but also passengers who are passing
through on connecting flights and passengers who are enjoying the time-saving conve-
nience of using airports as primary destinations for business meetings.

FYI WHAT HAPPENS WHEN THERE’S NO ROOM ON THE PLANE?

Because it is a common practice for If there are insufficient volunteers, two hours of their originally scheduled
individuals to make airline reserva- then the airline will involuntarily deny arrival time on domestic flights (four
tions and not show up for their sched- boarding based on its established hours on international flights). Other
uled flights, airlines overbook in order policies. Passengers who have been types of benefits offered may include
to fly at capacity. Federal regulations denied boarding are entitled to com- phone calls and/or free or reduced-cost
require them to make amends to pas- pensation of up to 200% (or a max- lodging and meals if an overnight stay
sengers who are involuntarily denied imum of $400) of the value of their is required.
boarding (bumped) because of over- remaining flight coupons. This amount
booking. The airline must first ask for may be reduced by the airline if com-
volunteers to give up their confirmed parable transportation can be arranged
reserved space on the flight for some that will allow passengers to arrive at
form of compensation. their scheduled destinations within
Over 250,000 people are employed in on-airport at the five largest airports in the
United States. When this number is projected on to airports of all sizes around the
world, the number of jobs multiplies into the millions!
A prime example of putting all the pieces together to create a sense of place, space,
and destination for passengers can be found at the Seoul Incheon International Airport
serving Seoul, South Korea. This airport has the typical amenities you would expect
such as a variety of retail shops and food and beverage outlets, but you will also find a
casino, a golf course, hotel rooms, an ice skating rink, indoor gardens, a spa, and the
Museum of Korean Culture.
Summary
Passenger transportation, whether on land, over the In other countries, such as Canada and the United States,
water, or in the air, is the lifeblood of the tourism indus- automobiles account for the majority of all travel away
try. Water transportation was the first mode of trans- from home. Taxis, shuttles, limousine services, and light-
portation to move travelers rapidly over long distances, rail systems fill important transportation needs for trav-
but many other modes have since evolved to meet time elers everywhere. In addition, the flexibility and economy
and distance requirements. Geography and governmen- of operations of motorcoaches that can serve scheduled
tal policies and subsidies combined to create a host of routes and organized tours continue to meet the needs of
transportation alternatives that vary greatly by country travelers worldwide.
and location. Air transportation has proven to be the driving force
When it comes to transportation, travelers have the behind the explosive growth in domestic and international
choice of plying the waves, riding the rails, cruising the travel. As governmental regulations are removed from air
highways, or soaring through the skies. Which one they transportation, international barriers fall, and major air-
choose will depend on where they are going, their budget, lines vie for an increasing number of passengers, competi-
and the amount of flexibility they desire. tion as well as passenger traffic will continue to increase.
Ocean-going passenger service, which was once popu- Airlines, like most other service providers in the tourism
lar crossing the Atlantic, declined as jet air service increased. industry, are being forced to rely on more sophisticated
However, water transportation alternatives, including ferry marketing and management techniques to achieve profit-
services, which are designed to carry everything from pas- ability and deliver high-quality service.
sengers to trains, motorcoaches, and automobiles, are still With the growth in air transportation, the number
very important in many parts of the world. of travelers passing through terminals has also exploded.
Land transportation revolves around rail service, When these travelers are combined with those passing
automobiles, and motorcoaches. Passenger rail service, through rail, ferry, and cruise terminals, the number of
which originated in the European countries, has continued potential customers is compounded. Airports have espe-
to improve in efficiency and still meets the needs of those cially recognized the revenue potential from these passen-
travelers, but it is also popular in other countries, espe- gers and shifted their attention from simply providing basic
cially those in Asia, with high population concentrations facilities and services to creating experiences, expanded
and large cities located in close proximity to each other. services and enhanced amenities.

You Decide
Too many calls and not enough time! As Meredith Carpen- Just before leaving, Meredith decided to make some
ter, national sales manager for Park Plaza Hotels, reviewed contingency plans in case her business needs changed.
her schedule for the upcoming week, she began to wonder Using her smartphone, she made reservations on a differ-
if she had built in enough flexibility. Being pressed for time ent airline for an early afternoon flight from each city. In
was nothing new, but five clients in three cities in one week addition, she downloaded several airline timetables onto
would be pushing it. On top of that, she was hoping to her phone. Having these schedules with her, she could
squeeze in a few cold calls as she prospected for new busi- make last-minute changes and book even more convenient
ness. Meredith knew it would be hectic but worth it if she flights if necessary.
beat her quota and qualified for her incentive bonus. It would be hectic, but she was prepared. Armed with
Meredith had worked closely with her travel agent to two reservations for flights from each city and informa-
develop an itinerary that would allow her as much time as tion at her fingertips for alternative flights, Meredith was
possible in each city. The itinerary was set up so that she prepared for any contingency. If her plans changed and
could catch the last scheduled flight as she moved from city she finished early, she could cancel her reservation for the
to city. This schedule looked good at the time she arranged later flight. However, if her sales calls went as planned, she
it, but she was now beginning to think about how inflex- would simply do a “no-show” for the earlier flights and
ible it might be. What if her appointments ended early or use her original reservations. After all, Meredith thought,
she was unable to connect with decision makers on her airlines always overbooked and no one would be hurt by
cold calls? Would she be wasting time in one city when she either a last-minute cancellation or a no-show. Do you
could be more productive in the next one? think Meredith did the right thing?
Net Tour
To get you started on exploring Internet links for this chap- www.bluetrain.co.za/
ter, please see www.bigbustours.com/
www.eurail.com www.cruising.org/
www.iata.org/index.htm www.ntaonline.com/
www.supershuttle.com www.sustrans.org.uk/
transtats.bts.gov www.airports.org
1. What are the major modes of transportation, and why 4. Why are cities such as Paris and Madrid imposing driv-
is each of these modes important to the current and ing restrictions?
future success of the tourism industry? 5. Why are motorcoaches experiencing renewed growth
2. Who do many travelers, especially based on geographic in Europe?
location, rely on water transportation to meet their 6. Discuss how low-cost airlines have changed the Euro-
transportation needs? pean airline industry.
3. Why is Europe’s passenger rail service at a more 7. Why are airlines considered to be the backbone of
advanced stage of development compared with that of travel?
the United States?

1. Take on a planning task similar to the one faced by c. The estimated time it would take to reach each of your
Shawna in our chapter opener. Select three major cities selected destinations by both air and surface travel.
that are serviced by scheduled airlines. One city should d. A fter you have developed the table, explain the
serve as your reference point for departure and the other pros and cons of each of the available transporta-
two cities should be two different destinations. One des- tion alternatives.
tination city should be in an adjacent province or state 2. Select one mode of transportation that is particularly
and the other city should be located in a different coun- interesting to you and learn more about it. Either
try. Prepare a table showing the following information: schedule an interview with an employee of a
a. The types of transportation you could use to reach representative company or collect copies of newspaper
each of your selected destinations. and magazine articles about the industry and companies
b. The distance between each city in air miles and sur- in the industry. Based on the data you obtain, write a
face miles. short report discussing important information you

learned from your interview or research containing facts 5. Consider the following long-distance city pair:
about the industry, the company, and the person’s job. London–Ankara. Access information using the Internet
3. What makes the Eurostar high-speed railway service to determine the variety of transportation alternatives
between Paris and London so popular for tourists? How and fares available between them.
do you think the Eurostar will evolve in the next 10 years? 6. Select one of the top ten airports from your search
4. Browse the Internet for intercity bus transportation on the Internet and access its website. Make a list of
information for three different countries. Describe the all the services provided along with any cultural venues
information that is available on each site. or activities.
Glossary
Airport code A three-letter designation used to identify airlines are able to funnel traffic into these centers to
specific airports. feed their trunk point-to-point routes between major
Air Transport Association (ATA) A domestic association market cities.
that provides a format for discussing safety and service Intermodal A trip requiring the use of two or more forms
issues and promotes the advancement of technology. of transportation.
Amtrak The marketing name for the National Railroad International Air Transport Association (IATA) Associ-
Passenger Corporation, which is a combination of the ation for airlines offering international air service that
passenger rail services of U.S. railroads. provides a means of resolving problems for mutual
Banks of flights The process of coordinating flight sched- benefit.
ules so that aircraft arrive and depart during similar Involuntarily denied boarding A situation that occurs
time periods. when airline passengers with confirmed reservations
Bumping The process of denying boarding to airline are denied boarding on scheduled flights due to over-
passengers with confirmed reservations due to booking. Passengers may either voluntarily give up their
overbooking (overselling) the flight. reserved space or be involuntarily denied boarding in
CANRAILPASS Allows 12 days of economy class travel exchange for compensation.
within a 30-day period anywhere VIA Rail goes in Canada. Legacy carrier Established and comprehensive carriers
Circle-trip flight A flight plan that includes return to city offering varying classes of services with global networks
of origin but via different routing or airline. that include alliance partners, which allow passengers to
Code-share An agreement allowing a regional/commuter earn and redeem frequent-flier miles across these networks.
airline to share the same two-digit code of a cooperat- Nonstop flight A flight between two cities with no inter-
ing primary carrier in the computer reservation system. mediate stops.
Concessions Retail outlets offering goods and services One-way flight A flight plan that includes no return to
to customers in self-contained settings such as airports, city of origin.
museums, stadiums, and zoos. Open-jaw A round-trip that allows the passenger to uti-
Connecting flight A flight plan that includes a change of lize different points of origin or return.
aircraft and flight number. Overbooking Accepting more reservations than there is
Direct flight A flight plan that includes one or more capacity to serve those customers making the reserva-
intermediate stops but no change of aircraft or flight tions (e.g., accepting reservations for more passengers
number. than there are available seats on an aircraft or for more
Economies of scale Savings in time, money, or other rooms than there are in a hotel).
resources organizations enjoy as the result of purchas- Point-to-point Direct travel between two destinations.
ing and/or selling in large quantities, specialization at Push The act of pushing an aircraft away from the gate
a particular job or function, and the use of specialized for departure. The term is used to indicate the length
machinery. of time necessary to unload, fuel, service, and reload an
Eurailpass Allows unlimited travel for non-European aircraft between time of arrival and departure.
tourists for varying periods of time throughout Austria, Repositioning cruise The transfer of a ship from one
Belgium, Denmark, Finland, France, Germany, Greece, cruising area to another to take advantage of the sea-
Ireland, Italy, Luxembourg, the Netherlands, Norway, sonality of demand.
Portugal, Spain, Sweden, and Switzerland. Rolling hubs Connecting flights are spread over longer
Federal Aviation Administration (FAA) Agency within periods of time to reduce congestion and facility and
the DOT charged with ensuring air safety and promot- equipment demands.
ing the growth of aviation. Round-trip flight A flight plan that includes return to
Fleet utilization Percentage of time transportation vehi- city of origin via identical routing.
cles are used for revenue-producing purposes. Spoke routes Air service provided from smaller sec-
Hub-and-spoke system The primary airline route pat- ondary markets to feed passengers into primary hub
tern in the United States. By designating primary hubs, markets.

Terminals Facilities where passengers embark and disem- the nation’s overall transportation policy, including
bark transportation services. highway planning, development, and construction;
Trunk routes Point-to-point air service between primary urban mass transit; railroads; aviation; and waterways.
hub markets. VIA Rail Canada The marketing name for Canada’s pas-
U.S. Department of Transportation (DOT) Organization senger train network, which is a combination of the
within the U.S. government charged with establishing passenger rail services of Canadian railroads.
References
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integration in air transportation: Status quo, Geographic Traveler, 32.
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Transport Geography, 19(6), 1187–1197. firms: Future clients will be a more demanding lot.
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262(4), 42. 21. Augustin, K., Gerike, R., Sanchez, M. J. M., and
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14. Lunday, E. (2006, June). Intercity buses lose some, (2015, July). An airport experience framework from
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of Transport History, 31(2), 210–230. er%20service.pdf, retrieved March 28, 2016.

CHAPTER 7
Accommodations
A guest never forgets the host who had treated him kindly.
—Homer
LEARNING OBJECTIVES
1. Explain the importance of accommodations to 5. Describe the differences between front-of-the-
the tourism industry. house and back-of-the-house operations.
2. Identify and describe the major classifications of 6. Identify and describe key marketing, manage-
accommodations. ment, and financial considerations in lodging
3. Identify and describe the primary ownership pat- operations.
terns of lodging properties. 7. Demonstrate knowledge of basic accommoda-
4. Describe the basic organizational structures in tion terminology.
lodging properties.
CHAPTER OUTLINE
Expect the Unexpected Chain Operations
Strength in Numbers
Introduction
Oh, So Many Choices! It All Begins with Marketing
Providing a Home Away from Home
No Two Are Exactly Alike
Organizing for Success
Living Like a Local
Meeting Guests’ Needs
Same Time, Same Place?
Achieving Profitable Operations
Living, Learning, and Leisure
Enjoying the Great Outdoors Summary
Rooms, Rooms, and More You Decide
Making Sense of Classifications and Net Tour
Ratings Systems
Lodging Lexicon Discussion Questions
Operating Structures Applying the Concepts
Going It Alone Glossary
Franchising References
Management Contracts
189
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Expect the Unexpected

The alarm went off at 5:00 a.m., but David knew he couldn’t hit the snooze button. It was
going to be a busy day and he wanted to be at work by 6:30 a.m. The hotel was full, and a
large convention group was checking out with an even bigger group checking in that after-
noon. As the assistant general manager of a large downtown hotel, David prided himself
on the quality of service his staff delivered to each guest every day. Although his employees
were well trained, he liked to be on hand, especially on busy days, to help out where needed.
As he rubbed his eyes and looked out the window, he stared in disbelief and his
mind began to race. It was snowing and the parking lot in front of his apartment was
covered with snow. If he had been living in the North, where snow was common, this
would not have been a problem, but he lived in Georgia, where snow was a novelty.
Could he get to work? Could his employees get to work? Would the airport be open?
The drive to the hotel that morning was a little nerve-racking, but he made it. While
he listened to the radio on the way to work, he groaned. The city buses would not be run-
ning today and unseasonably cold weather was still in the forecast. Everyone was being
encouraged to stay home, and several “fender benders” had already been reported.
When he arrived at the hotel, he was relieved to see that some of the kitchen staff
had made it. He asked the night auditor and front desk employees if they would stay
a few extra hours and help out. Several other employees had arrived after braving the
slick streets and sidewalks, but the calls were starting to come in from many more
employees who were not able to get to work. By 7:00 a.m., the lobby was beginning to
fill with guests, and a line had formed in front of the coffee shop.
This may not be a typical day in the life of a hotelier, but David had learned to
expect the unexpected. The day was still young, and there were sure to be many more
challenges. Solving problems, meeting needs, training employees, and being an active
part of the community kept his job from being anything but dull.
The Stanley Hotel, Estes Park, Colorado, just one of many lodging choices. Photo by C. A. Cook
M07_COOK1670_06_GE_C07.indd 190 13/05/17 10:41 AM

Chapter 7 ▸ Accommodations 191
Introduction
“Come in; please be my guest.” For years, these words of welcome have greeted weary
travelers seeking shelter for the night. Providing travelers with temporary shelter is an
age-old profession that can be traced through recorded history to the inns of biblical
times. In fact, the term hostel (meaning inn) can be traced back to the middle ages.
The inns of old, usually no more than simple structures, offered meals and a bed in a
room shared with other travelers seeking safety and shelter for the night. By today’s stan-
dards, these early inns were very crude. They usually had one or may be two rooms with
several beds in each room. The innkeeper would put two, three, or perhaps even four peo-
ple in a bed. Although many early innkeepers were not always the most reputable lot, they
did provide an important service by meeting travelers’ basic needs for shelter and food.
Most early inns looked like any other home along the roadside and could be recog-
nized only by special signs hung by their front doors. As lodging facilities became more
sophisticated, they often added taverns, which served as gathering spots for locals.
Because these inns and taverns were usually built around courtyards, they became nat-
ural entertainment areas for speakers and traveling minstrels and troubadours.
Early “hotels” were usually just overgrown inns. However, it didn’t take long
for large structures specifically designed for lodging to appear. Most of these hotels
were originally built in or around seaports and train depots as well as at major spa
resort destinations in Canada, England, France, Germany, and the United States. In
fact, development of lodging facilities closely followed improvements in transporta-
tion, particularly steamships and railroads. From these modest beginnings a variety
of accommodation choices have emerged to meet the needs of today’s travelers. “It
is difficult to imagine how today’s fast-paced globalized economy could function at
all without countless hotels around the world offering shelter and services to a bur-
geoning clientele of international business and leisure travelers” (p. 52).1
Oh, So Many Choices!

Think for a minute about some of the accommodation options from which you can
choose when planning a trip. Where will you spend the night(s) on the way to your des-
tination? Where will you stay once you reach your destination? You can probably think
of alternatives ranging all the way from staying with friends and relatives to pampering
yourself at a luxury hotel. Over the years, a wide range of facilities have been developed
to meet travelers’ accommodation needs. Just like inns of old, these facilities became a
focal point for community gatherings and social activities. In addition, they attract visi-
tors and create opportunities for these guests to spend more time and money in the area.
Although accommodations can be found in many shapes and sizes, these facilities
have commonly been grouped under the umbrella term lodging. The accommodations
segment of the tourism industry consists of many popular alternatives such as bed and
breakfasts (B&B), condominiums, timeshares, conference centers, hotels, and motels,
as well as recreational vehicle (RV) parks and campgrounds.
If you think back to the transportation service providers we studied in Chapter 6,
you will also find that many of them that travel over long routes, such as passenger
trains, ferries, and even airplanes, often include accommodations as part of their total
service packages. In addition, resorts provide extensive lodging facilities, and some of
the newer mega–cruise ships are often referred to as floating resorts. We will not dis-
cuss resorts or cruise ships in this chapter but, more appropriately, in Chapter 10 as
we explore destinations. As you will begin to see, the range of available accommoda-
tion alternatives is extensive.
With so many choices, attracting and retaining guests requires attention to their
needs. Marketers have zeroed in on this important group of potential frequent stayers
M07_COOK1670_06_GE_C07.indd 191 13/05/17 10:41 AM

Table 7.1 Strategies for Developing Loyal Guests

Strategy Type Example
Social Frequent communications with former hotel guests
Emotional Use of guest’s name to provide sense of recognition
Experiential Provide special-touch extra services (e.g., birthday cake)
Functional Provide amenities such as high-speed WiFi
Temporal Offer guest time savings via quick check-in/out
Financial Offer guest discounts or free services
Source: Based on Shoemaker, S., and Lewis, R. (1999). Customer loyalty: The future of hospitality
management. Hospitality Management, 18, 345–370.
by fine-tuning strategies to meet their specific needs. As Table 7.1 illustrates, a broad
array of strategies are needed to attract and retain a loyal following. In addition to
targeting frequent stayers, marketers have recognized and developed varying brands
within hotel chains to meet the needs of specific market segments (see Table 7.2).
No Two Are Exactly Alike

The B&B concept began in the small towns and rural areas of Europe where a family would
open its home to travelers. Known as pensions, these original B&Bs were probably a lot
like the inns of biblical or medieval times: a room or two with a shared bath down the
hall and a homemade breakfast served before departure.
The idea of B&Bs may have started in small towns and rural areas, but this con-
cept has spread across the world and can be found anywhere someone wants to be his
or her own boss. In fact, after the fall of communism, some of the first businesses to
Accommodations can be found in many shapes and sizes depending on the location.
Photo by C. A. Cook
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Table 7.2 Hotel Companies’ Global Reach

InterContinental Hotels Group (4,700 hotels in 100 countries)
InterContinental Hotels & Resorts Holiday Inn Express Hotels
Hotel Indigo Staybridge Suites
Holiday Inn Crowne Plaza Hotels & Resorts
Holiday Inn Resort Kimpton Hotels & Restaurants
Even Hotels HUALUX Hotels and Resorts
Candlewood Suites
Accor (3,700 hotels in over 92 countries)
Novotel Ibis
Grand Mercure Etap
All Seasons Hotel f1
Sofitel Legend Adagio Access
SO Sofitel M Gallery by Sofitel
The Sebel Mercure Hotels
Adagio Premium Ibis Styles
Adagio Ibis Budget
Thalassa Sea and Spa MAMA Shelter
Pullman
Starwood Hotel & Resorts Worldwide (1,300 hotels in nearly 100 countries)
Sheraton Hotels/Inns/Resorts/Suites St. Regis
Westin Hotels & Resorts W Hotels
Le Meridien The Luxury Collection
Four Points Hotels by Sheraton Starwood Vacation Ownership
Aloft Element
Tribute Portfolio Design Hotels
Best Western (4,100 hotels in over 100 countries)
Best Western Best Western Plus
Best Western Premium
Hilton Hotels (550 hotels in 78 countries)
Hilton Hotels & Resorts Conrad Hotels & Resorts
Embassy Suites Hotels by Hilton Hilton Garden Inns
DoubleTree by Hilton HOME2 Suites by Hilton
Homewood Suites by Hilton Waldorf Astoria Hotels & Resorts
Hampton Inns & Suites by Hilton The Waldorf Astoria Collection
Marriott International (4,000 hotels in over 78 countries)
Marriott Hotels & Resorts Ritz Carlton
Courtyard by Marriott Springhill Suites by Marriott
Fairfield Inns by Marriott TownePlace Suites by Marriott
Residence Inns by Marriott Marriott Vacation Club
Renaissance Hotels & Resorts JW Marriott Hotels & Resorts
Marriott Executive Apartments Moxy Hotels
Bulgari Hotels & Resorts Edition
AC Hotels Protea Hotels
Delta Hotels Gaylord Hotels
Autograph Collection Hotels
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Table 7.2 Hotel Companies’ Global Reach (Continued )

Choice Hotels International (6,300 hotels in nearly 40 countries)
Comfort Inn Comfort Suites
Quality Sleep Inn
Clarion CAMBRiA Hotels & Suites
MainStay Suites Suburban
EconoLodge Rodeway Inn
Ascend Hotel Collection
appear in the former Eastern European Bloc countries and Cuba were B&Bs. However,
it should be noted that in the United States, and probably other countries, very small
B&B homes are generally operated for supplemental income, tax benefits, and as a
means of defraying utility costs rather than as an investment or sole source of income.2
No matter what the setting or operator, research has shown the successful B&B opera-
tors are those providing guests with the same positive experience again and again.
Today, B&Bs come in a wide variety of sizes and service offerings. You can now find
Bed & Breakfast Homes (1–3 rooms), Bed & Breakfast Inns (4–20 rooms), and Bed &
Breakfast Hotels (over 20 rooms and sometimes a small restaurant). The average B&B
in the United States has 6 rooms.3 If you travel to southern Europe or perhaps Quebec,
rather than finding B&Bs, you might find pensions, which offer similar accommoda-
tions. As B&Bs have grown in numbers, government-sponsored as well as independent
reservation and referral organizations have evolved to assist owners in marketing their
services to travelers seeking the “comforts of home.” B&B owners have found the Inter-
net to be an especially effective marketing tool for booking reservations.
Even though B&Bs may look different, personal attention and breakfast in the
morning are common themes that tie all B&Bs together. One reason some travelers pre-
fer B&Bs to hotel accommodations in a large city is that a $200 room in a B&B is may
be a better buy than a $200 hotel room. A B&B operator rarely adds on parking, Inter-
net connection, or other charges, and many offer afternoon snacks and wine in addition
to a hearty breakfast. With the ready availability of the Internet, it is easy, and more per-
sonal, to book a stay at a B&B virtually anywhere in the world. Managing and operating
a B&B to provide guests with stays that are rewarding and memorable is a multifaceted
challenge requiring many skills. Finance, management, marketing, technology, cooking,
decorating, cleaning, safety, customer service, staffing—the list is practically endless.4
Living Like a Local

Offering visitors a place to stay in one’s home, whether it’s on an air mattress in the liv-
ing room, a spare bedroom, or the entire property; private accommodations, has grown
tremendously in the past few years. Airbnb, as the pioneer intermediary for this type of
lodging, has revolutionized the already competitive lodging landscape. Now Airbnb and
various other intermediaries in this lodging space, such as Homeaway, VRBO, and Flip-
key, carry huge volumes of room inventory, especially in destinations where hotel room
rates are high. To compete with private accommodations, hotel’s chains have also begun
to use these intermediaries to distribute their own room inventory.
Why would travelers want to stay in someone else’s home? According to research, the
primary reason is to “feel like a local” and get a taste of the community life during their
visits. These rental units are usually spread out in the community, unlike hotels which
usually are located in clusters near business districts or tourist attractions. Although in
some cities, private accommodations could cost more than hotel rooms, for the most part;
staying in private accommodations could save money. In fact, most private rental units are
M07_COOK1670_06_GE_C07.indd 194 13/05/17 10:41 AM

now for the entire property, often housing large travel parties. Travelers can also prepare
their own meals in the rental units and save on dining out expenses.
In addition to leisure visitors, business travelers, and convention attendees appreci-
ate the same benefits of staying at private homes and are contributing to the growth of
this accommodation sector. This is especially true when large conventions and events
are held and traditional hotels don’t have enough rooms or increase their rates signifi-
cantly due to high demand.
The growth of this form of lodging, like many other sharing economy players, is
not without controversies. Different cities, states, and countries have different regu-
lations (some have no regulations) about this type of business. Safety and security of
guests, potential loss of government taxes, and impacts on neighbors are just some of
the issues to be addressed.
Same Time, Same Place?

Timeshares at condominium properties usually have the same amenities found in a
typical luxury apartment setting. Condominiums (condos) and other types of accom-
modations are often marketed as timeshares. The idea of owning timeshares (vacation
or fractional ownerships), especially in resort locations, is very appealing to individu-
als who can plan their travel activities in advance and want to be assured of accommo-
dations at set times and in specific locations.
The idea of guaranteeing accommodations during a specific time period at a resort
location originated at a ski resort in the French Alps called SuperDevoluy. The idea of
timesharing quickly spread to and flourished in the United States. It seems people were
very interested in owning a small fraction of time in a resort destination that fit their
lifestyle and vacation needs with “like-minded” fellow owners. In addition, research
confirms that the following attributes are positively related to customer satisfaction
with timeshare ownership: “resort-like hotel service, resort amenities, affiliation with
an exchange company, and a counselor to assist with vacation planning” (p. 65).5,6
Historically, buying a timeshare unit (typically 1/52 or 1/26, one or two weeks) meant
purchasing fixed weeks at a single-site location on a fee simple or right-to-use basis. This
ownership assured the purchaser of having specific accommodations for a set time and
place each year. Through companies such as Resort Condominiums International and
Interval International, purchasers could exchange their units and times with other own-
ers at participating locations. Timeshare companies now offer flexibility through mul-
tisite programs, global exchanges, point systems, and vacation clubs. The point system
or vacation credits introduced by Disney in 1992 are the up-and-coming way timeshare
resorts are being marketed and sold. Resort developers assign a point value to each sea-
son, week, unit size, and type. Owners then can use their points to exchange vacation
times and locales.7 Moving from fixed and floating weeks to points provided owners with
a “currency” that could be used to purchase time at almost any other vacation ownership
resort, rent recreation vehicles, houseboats, or purchase cruise ship bookings. Many city
hotels also participate in this program and make their room inventory available.
Not surprisingly, the most popular locations for the millions of timeshare owners
are in locations that are not subject to seasonality. In the United States, the most popu-
lar timeshare properties are found at destinations such as Florida, California, Hawaii,
Arizona, and Nevada. The same holds true for international destinations, with the most
popular locations being the Caribbean, coastal Europe, Mexico, and Australia.8 South-
east Asia is now an emerging market. Timeshare operators in all of these countries and
more have come together for a unified voice and research activities through the Global
Alliance for Timeshare Excellence or GATE. Just as there are popular locations, there
are also different times of the year that are more popular than others. These time peri-
ods are classified by colors indicating the level of demand. Low-demand weeks are
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Table 7.3 Excerpts from “Profile of Timeshare Owners”

The Baby Boomer generation (ages 45–63) is the largest segment (45%).
Half of timeshare owners are employed full-time (52%).
Timeshare owners are more educated than the U.S. population as a whole (43% received
college education; 19% received graduate school training).
Average household income of $92,405 for all owners. Roughly 92% of timeshare owning
households reported incomes that exceed the United States average of $50,233.
Beaches (52%), attractions/entertainment (48%), and shopping (39%) are the most
attractive resort characteristics.
Source: Reprinted with permission from ARDA, originally printed in November/December 2009
Developments magazine. The ARDA International Foundation updates research regularly—please see www
.arda.org/researchlibrary/ for the latest data and statistics.
classified as “blue,” medium-demand “white,” and high-demand “red.”9 For example,

a week during Christmas in Orlando, Florida, would probably be more desirable than
a week in February in Okoboji, Iowa.
The allure of timeshare ownership is especially strong in the United States, where
purchases are growing at an 8% compounded annual rate.10 The United States leads the
world in the timeshare market, with over 3.2 million owners, and Americans are also
active buyers of timeshares in other countries (see Table 7.3). The popularity of time-
shares is expected to continue growing as more and more baby boomers enter the prime
age for buying second homes (ages 52 to 70), and more hotel companies begin supplying
the timeshare market. Hotel companies such as Disney, Hilton, Hyatt, InterContinental,
Marriott, and Starwood Hotels are being attracted to this industry segment because occu-
pancy rates average almost 94%.11 With over 5,000 properties worldwide and many
FYI SIMILAR BUT DIFFERENT

Timeshares are similar to hotels, but and research has shown that the skills presentation to buy a timeshare. Inter-
they are also different in many ways. needed by employees in both types of net access to photo galleries, videos,
When you walk in the front door, many settings are very similar. and live chats combined with detailed
things will seem the same as you While operational issues may be purchasing and ownership costs can
approach the front desk or reception the same, timeshares unlike hotels and make ownership a no-stress exercise.
area. Even the key cards to your room resorts are owned by many individu- Timeshare ownership should not
will look the same. You might start als who typically purchase one or two be looked at as a standard real estate
noticing a difference when it comes weeks of vacation time. Since owning investment that will grow in value, but
to service. Room service is probably a timeshare is a real estate investment, more like an automobile purchase that
out of the question and housekeeping owners are required to pay insurance, will decrease in value over time. While
services will only be provided mid- maintenance fees, management fees, there should be residual value, time-
week rather than every day. The num- and real estate taxes. To attract and sell share purchasers are really buying the
ber of food and beverage options will timeshare units require a great deal of opportunity to vacation in prime loca-
definitely be more limited, but your marketing effort, and, in fact, 30–50% tions in well-maintained facilities for a
accommodations almost always be of the sales price for a timeshare is life time. Although timeshares may be
larger and, you can prepare your own composed of marketing expenses such different than hotels, the lure of own-
meals in a fully equipped kitchen. It as salaries and enticements to attend ing a piece of paradise continues to
takes the same types of employees to sales presentations. However, today, grow and attract a younger audience
operate timeshares as it does a hotel you don’t even need to sit through a each year!
Source: Based on Timeshares Come of Age. (2016, March), Consumer Reports, Vol. 81(3), pp 48–52; Ricci, Peter and Kaufman,
Tammie. (2007), Managerial Expectations for New Hires: Similarities Between Vacation Ownership and Traditional Lodging, Journal
of Teaching in Travel and Tourism, Vol. 7(2), pp 35–49; ARDA News and Information. (2016), http://www.arda.org/news-information/
industryinformation/overview.aspx.
M07_COOK1670_06_GE_C07.indd 196 13/05/17 10:41 AM

easily recognized brand names, timeshare ownership should continue its pattern of rapid
growth. Vacationers desiring ownership for longer periods of time turn to condominiums.
In a condominium development, individuals buy units for their own use. In con-
trast to a fractional ownership plan, the units are frequently made available for rental
when not being used by their owners. These units may be managed under a straight
rental agreement or be placed in a rental pool.
In a straight rental agreement, condo owners receive a portion of the rental revenues
based on the rental income received for their units. In a rental pool, all condominium
owners share in rental income based on the square footage of their units. In either situa-
tion, the owners typically pay for all taxes, utilities, and general maintenance expenses.
In return, they receive a percentage of the rental income (usually 49%), and the manage-
ment company retains the remainder (usually 51%) as compensation for operating and
maintaining the property when owners are not using their allotted times or units.
For those wanting a special touch in vacation ownership, fractional ownerships are just
the ticket. Fractional ownership plans, typically providing high-end accommodations, can
be purchased for one to three months of usage periods. Premier properties in breathtaking
locations with hotel-like amenities take away the hassles of being confined to one destina-
tion and add the benefits of multiple vacation home ownership destinations. Companies
such as Exclusive Resorts and Storied Places are finding demand is high for their exclusive
offerings. To meet this demand, condo hotels, such as the condominium tower at the Fon-
tainebleau Resort in Miami Beach, Florida, are entering the lodging market.12
Living, Learning, and Leisure

Providing accommodations built around a setting specifically designed, equipped, and
staffed to host meetings creates the unique environment of a conference center. The first
of these facilities was established by former President Dwight D. Eisenhower when, as
president of Columbia University in 1950, he opened Arden House, a 30-bedroom
house on a country estate outside New York City.13 Today, there are over 300 con-
ference centers in the United States, including the original Arden House and a host of
other locations such as the Scanticon Conference Center in Princeton, New Jersey; the
Macklowe Conference Center in downtown New York City; and the Inn and Confer-
ence Center at the Biosphere in Oracle, Arizona.
With an employee:guest ratio of from 1:0.5 to 1:2.5, conference center managers
can focus their attention on the specific needs of each group and excel at providing
the desired experience of living, learning, and leisure. Extra service touches such as
rearranging housekeeping schedules to clean guest rooms when attendees are in meet-
ings or adjusting foodservice schedules based on changing group needs highlight the
flexibility provided in conference centers. Extremely strict guidelines established by the
International Association of Conference Centers must be achieved and adhered to if
the facility is to be classified as a conference center.
Enjoying the Great Outdoors

Campers have traditionally been viewed as families or individuals wanting to save
money or get close to nature and experience the great outdoors. However, with
advances in technology, more people are being drawn to camping as they realize that
the outdoor experience can be achieved without “roughing it.” It is not uncommon to
find swimming pools, cable TV hookups, convenience stores, and even restaurants as part
of the operations of commercial campgrounds and RV parks. The luxury tented safari
experience offered in the Kruger National Park, South Africa, is a good example of a
lavishly pampered outdoor adventure. As the levels of convenience have increased, so has
the number of people who camp as well as use RVs to take a bit of home along with them.
Campgrounds and RV parks fill a special need in seasonal recreational areas,
as they can add significantly to the accommodation base. From an economic
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Rooms on wheels meet seasonal accommodation needs. Photo by Lorie A. Tuma
perspective, government-funded as well as privately developed campgrounds have

essentially shifted capital investment needs to campers who bring along their tents,
camper trailers, trailers (also called caravans), and RVs. Rather than investing in
expensive buildings that could remain empty for a large part of the year, limited
investments can be made in support facilities when travelers bring along their own
accommodations.
In response to the growing popularity of RVs, many lodging facilities, especially
when associated with casinos, are providing parking spaces for these vehicles. Nowhere
is the mutually beneficial relationship between traditional lodging facilities and RVs
more evident than at Walt Disney World or in Laughlin, Nevada. Specifically designed
campgrounds and parking spaces with full RV hookups are adding to the accommoda-
tions base. In addition, whole communities of travelers can be found springing up on
a “temporary” basis in Arizona, Florida, and south Texas during the winter months
or in the mountains of Alberta, British Columbia, Colorado, New Mexico, Montana,
Washington, and Wyoming during the summer months.
Rooms, Rooms, and More

From some of the more specialized and unique types of accommodations, we now move
to hotels and motels that meet the majority of travelers’ lodging needs. The history of hotel
development centers largely in the United States, as this is where the hotel concept origi-
nated.1 The construction of the 170-room Tremont House in Boston in 1829 technically
marked the beginning of the hotel segment of the tourism industry in the United States.
Services and conveniences such as a “rotunda man” (bellhop) to carry guest bags because
there was no elevator, a restaurant featuring French cuisine, private rooms with locks, soap
and pitchers of water in each room, and indoor toilets made the Tremont a special place
to stay. The opening of the Brown Palace Hotel in Denver, Colorado, in 1892, with its dis-
tinctive atrium design, marked another significant milestone in lodging history.
The next major change in the development of modern lodging occurred when Ells-
worth M. Statler opened the Buffalo (New York) Statler Hotel in 1908. This hotel
truly revolutionized the industry because it was designed and operated with guest com-
fort, convenience, and safety in mind. Each room had an electric light just inside the
doorway, a private bath with tub and toilet, and a pitcher of iced water. In addition,
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FYI MOTEL OF A DIFFERENT KIND

Instead of roadside motels, most econ- ments, respectively. Suitable accom- Group, launched the first domestic
omy hotels in China are in downtown modation choices in traditional hotel economy hotel brand, Jinjiang Inn,
convenient locations where guests sectors for these travelers are limited marking the beginning of the econ-
arrive by train, bus, or taxis. The econ- because the high end 4- and 5-star omy hotel development in China. Since
omy hotel sector has experienced tre- hotels are usually priced beyond their 2000, foreign economy hotel chains
mendous growth in China where the reach and 3-star or lower hotels and have also stepped into the China mar-
concept remained relatively unknown guesthouses are usually poorly run ket. Among the forerunners are Ibis,
until the mid-1990s. The rise of the with inconsistent and less than desir- Super 8, and Holiday Inn Express. By
Chinese middle class and the general able quality. A big portion of these trav- the end of 2015, China had over 21,000
growth of the economy supported by elers would demand value-for-money economy hotels with close to two mil-
millions of small and medium sized accommodation options. lion rooms across the country.
enterprises generate leisure travel In 1996, one of China’s influential
activities and business travel require- hotel companies, the Jinjiang Hotel
Source: Based on 2016 China Hotel Chain Development and Investment Report. Published by China Hotel Association. Retrieved on
December 5, 2016 from http://chinahotel.org.cn/ChoiceOSP/upload/file/20160422/42291461329739119.pdfv.
free morning newspapers were delivered to each room. The hotel also had fire doors
and a host of other standard features.
The Buffalo Statler Hotel ushered in a new era of lodging growth, and the industry
continued to flourish in the early 1900s as hotels, designed to be the biggest and best,
sprouted up across Canada and the United States. This boom stopped abruptly with
the Great Depression (which began in 1929), when nearly 85% of all hotels in the
United States went bankrupt as business and leisure travel came to a screeching halt.
Prosperity finally returned with the end of World War II, but the focus shifted to motels
(a contraction for motor hotel) rather than hotels. With improvements in road construc-
tion and maintenance, increased automobile traffic, and the desire and ability to travel, the
motel segment flourished. As families began using automobiles for vacation travel, the old
practice of sleeping in cars or camping beside the road no longer met their needs.
In response to changing needs, small wooden structures (the forerunner of the
modern motel) were built beside major highways to serve this growing group of auto-
mobile travelers.
The first use of the term “motel” occurred at the Milestone Mo-Tel, built in 1925
in San Luis Obispo, California. Strategically located adjacent to the then-youthful
Pacific Coast Highway (later U.S. 101) at the base of the Cuesta Grade near the foot
of the Santa Lucia Mountains, the motel was a popular stop for modern motorists
exploring this ruggedly beautiful country in their automobiles.14
The idea of “tourist courts” for the motoring public caught the eye of another lodging
pioneer, Kimmons Wilson. Wilson believed consistent marketing programs and operating
procedures could lead to financial success by fulfilling an unmet need: standardized facili-
ties, service, and quality at the end of each day. His answer to meeting this need was Hol-
iday Inn, the first of which was opened on the outskirts of Memphis, Tennessee, in 1952.
Based on the promise of providing standardized facilities, Holiday Inn soon grew
into a successful chain of motels stretching across the United States. One room looked
just like another and travelers always knew there would be free parking, a telephone, air
conditioning, a swimming pool, and free ice. In addition, children under the age of 18
could stay free with their parents wherever they found the distinctive Holiday Inn sign.
Hyatt Hotels ushered in the renaissance of downtown hotel properties when it
agreed to take over a yet-to-be-completed hotel construction project that other com-
panies had shunned in Atlanta, Georgia. Architect John Portman had designed the
hotel with an open atrium where conventional wisdom would dictate that another
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Table 7.4 Profile of Extended-Stay Guests

Stay for five or more consecutive nights
Bring personal items, such as photos, slippers, and pillows
Set up a workstation within the room
See kitchen as an important room amenity
Work in their rooms so place extra importance on space, lighting, comfortable chair, and
handy telephone
Take baths (to relax) in addition to showers
Source: Reprinted with permission by Lodging Hospitality, a Penton Media Publication.
500 rooms could be built. Hyatt Hotels took on the challenge of what most hoteliers
considered to be an unworkable design and successfully opened the first major down-
town atrium hotel since the historic Brown Palace debuted in Denver, Colorado, in
1892. The atrium concept is now widely accepted and can be found in a wide variety
of lodging properties and most mega-cruise ships.
Recent decades have been marked by high periods of growth and profitability for the
hotel industry. In addition, companies continue to add new brands of properties to better
target specific segments, such as extended-stay travelers (see Table 7.4). As the consoli-
dation and the brand boom continue, a handful of mega-operators dominated by Accor,
Marriott International, Choice Hotels International, Hilton Hotels & Resorts, InterCon-
tinental Hotels Group, and Starwood Hotels & Resorts Worldwide are emerging.
Making Sense of Classifications and Ratings Systems

A wide variety of lodging properties and amenities developed to meet the needs of spe-
cific market segments. For example, business travelers expect to find larger desks, better
lighting, casual seating, and irons and ironing boards in their rooms. As these features
and other amenities such as shampoo, lotion, in-room coffee, and free newspapers
became standard, travelers began to expect even more. As lodging properties race to
meet customer needs, differences between traditional lodging property classifications
such as hotels and motels have begun to blur. To clarify this situation and more clearly
communicate the differences in facilities and services among properties, organizations
(and governments in some countries) developed standardized classification and report-
ing systems. Both consumers and hotel companies benefit from standardized classifica-
tions through clearly communicated expectations and brand positioning.15
1. Limited-service budget motels. Simple, basic, clean rooms with no amenities
other than clean towels, linens, and soap. (Sleep Inns and Microtel)
2. Limited-service economy motels. Upgraded room decor with television, tele-
phone, vending machines, and generally located close to restaurants. (Motel 6,
Super 8, and Red Roof Inn)
FYI ICE AND SNOW HOTELS

Icehotel is the world’s first hotel made year round as the building is run on solar a cold and warm room. The temperature
of ice and snow (refer to page 272). The power. Each suite in this boutique hotel in the cold room is between −5 and −8
Deluxe Suites, which are a part of the is individually themed and hand carved degrees but a thermal sleeping ensures
concept Icehotel 365, are available all by artists. Guests can choose between that guests have a good night’s sleep!
Source: www.icehotel.com
M07_COOK1670_06_GE_C07.indd 200 02/06/17 11:36 AM

3. Full-service, midpriced hotels and motels. 24-hour front desk, upgraded inte-
rior and exterior decors, limited food service, extra room amenities, and other
services. (Courtyard by Marriott, Four Points by Sheraton, and Holiday Inn)
4. Full-service, upscale hotels. Better quality and more luxurious, upgraded
food service, and usually concierge service. (Delta Hotels, Hyatt Hotels, Hil-
ton Hotels, and Westin Hotels)
5. Luxury hotels. Lavish guest rooms offering the ultimate in room amenities. Noted
worldwide for service and surroundings. (Ritz-Carlton and Four Seasons Hotels)
6. All-suite hotels. Separate sleeping and living quarters, limited kitchen facili-
ties, and complimentary food and/or beverage service in morning and evening.
(Embassy Suites and MainStay Suites)
7. Extended-stay hotels. Apartment/studio living quarters targeting travelers
seeking accommodations for five or more nights. (Residence Inn, Hyatt Sum-
merfield Suites, Studio 6, and Staybridge Suites)
8. Botique and lifestyle hotels. Small to medium-sized hotels offering high lev-
els of service with historic or innovative features. (Kimpton Hotels, Aloft, and
Moxy Hotels)
Other organizations such as Smith Travel Research use classifications such as upper
upscale, upscale, midscale with food and beverage, midscale without food and beverage,
and economy to differentiate properties based on room rates.12 Historic hotels (inde-
pendently owned properties that are over 50 years old) occupy a special category in the
classification system. They not only fulfill all the requirements of a typical full-service hotel
but also have a unique character created through restored architectural structures and col-
lections of antiques and other memorabilia. Each of these classification systems provides
managers with reference groups and benchmarks against which they can evaluate perfor-
mance and plan for the future. Best practices have been identified for a variety of hotel oper-
ations including check-in, housekeeping, maintenance, food and beverage, marketing, and
information technology. For example, the Newark Gateway Hilton and the Ritz-Carlton
Dearborn designed processes to speed up the traditional check-in process, and Motel 6
achieved excellence by creating a cohesive, chain-wide promotional campaign.16,17
Rating systems can be just as con-
fusing as classification systems. There
are literally hundreds of rating systems,
both public and private, in every country.
With published guides, blogs, and tourism
sites boasting individual rating services, it
is easy for the consumer to become con-
fused. Confusion has been introduced into
rating systems as many online sources
have created their own rating rubrics. In
fact, in one study, it was reported that
about 60% of the hotels were found on
at least six of the selected distribution
channels, and only 24% of the hotels had
consistent star ratings across different dis-
tribution channels. Results of data anal-
ysis indicated that consistent star ratings
become even more difficult to maintain as
the number of distribution channels used
This hotel is inspected and approved by tourism BC under its increases making it difficult for users to
approved accommodation program and it is also rated by the rely on these third-party distribution web-
Canadian star quality accommodation system. Photo by Cathy Hsu site ratings.18
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Table 7.5 Hotel Terminology

Single Room with one twin bed
Twin Room with two twin beds
Double Room with one double bed
Double double Room with two double beds
Murphy Room with a Murphy bed (a bed that folds out of a wall or closet)
Suite Room with one or more bedrooms and a living area
Connecting Rooms that are side by side and have a door connecting the two rooms
Adjoining Rooms that are side by side but do not have a connecting door between the rooms
European plan (EP) Rooms only, no meals
Continental plan (CP) Continental breakfast (juice, coffee, roll, pastry) included in the room price
Modified American plan Continental or full breakfast and dinner included in the room price
(MAP)
American plan (AP) Continental or full breakfast, lunch, and dinner included in the room price
The three time-honored standbys for rating lodging properties are the Michelin
Guide (started in 1900), the Forbes Travel Guide (started as the Mobil Travel Guide
in 1958), and the AAA Guide (started in 1963). All of these rating organizations use
standardized rubrics and annual visits by anonymous inspectors to classify properties.
Lodging Lexicon
Some lodging terminology (see Table 7.5) is very specific and may sound almost
like a foreign language the first time you hear it. For example, terms such as occu-
pancy rates, average daily rates, RevPAR (revenue per available room), and RevPAC
(revenue per available customer) carry specific meanings and are frequently used to
measure financial performance and make comparisons among similar classifications of
lodging properties. However, other lodging terminology is more variable and at times
causes some confusion. Therefore, it is always advisable to seek clarification when
using these terms to ensure effective communications. Figure 7.1 illustrates how some
of the more typically used terminology can be applied to a guest room.
Operating Structures
Lodging facilities are typically marketed and managed under one of the following own-
ership patterns: independent properties, franchise properties, management contract
properties, or chain properties. With the possible exception of very small independent
properties, some type of formalized management structure, training programs, prop-
erty management systems, and standard operating procedures will be found in most
lodging properties. Property management systems, as introduced in Chapter 5, manage
all of a property’s financial reporting and a variety of other tasks such as pricing and
travel agent commissions. These tasks are often offered through an Internet platform.19
At first, most hotels and motels were operated as independent properties. How-
ever, between 1960 and 1990, the trend moved toward franchise affiliations and
chain operations. Today, the trend is for larger properties operated under manage-
ment contracts, although it appears that more and more property managers are once
again deciding to go it alone.20 This trend of lodging corporations moving away from
owning real estate assets to franchising or operating under management contracts has
continued to accelerate and shows no signs of abating.21
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FIGURE 7.1 Connecting rooms

Room layouts demonstrating Rooms that are side by side and have a door connecting the two rooms
lodging terminology.
Adjoining rooms
Rooms that are side by side but do not have a connecting door between them
Going It Alone
Independent properties are lodging facilities owned and operated as single units with
no chain affiliation or common identification. Managers of independent properties have
many of the same advantages and disadvantages as the sole proprietors of B&Bs. They
are not bound by corporate policies, so they are free to be creative and respond quickly
to the needs of their guests and communities. The price they pay for this freedom, how-
ever, is a lack of marketing, management, and financial support and other resources that
are typically provided through larger, multiproperty organizations such as franchises or
chains. The epitome of these independent hotels is referred to as a boutique hotel with
unique architecture and décor, offering a high level of service and typically having fewer
than 150 rooms.22 Additional research has suggested that limiting size to 100 rooms,
specifying that these properties not be part of a chain and that they must be located in
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FYI THE FRENCH HOTEL STAR SYSTEM

The French Hotel Star System is a scale and rooms have a minimum size Five-star hotels are also required to
standardized system classifying every requirement of 9 square meters, and provide a range of services such as room
hotel in France. The ratings for hotels some feature shared bathrooms. A service and a concierge. However, there
represent a combination of the overall 5-star hotel is at the highest end of the is an additional classification. Sixteen
quality, range of facilities, and level scale. Guest rooms must be 24 square hotels have been awarded Palace status,
of services offered by the property. A meters and staff must be able to speak designed to award official recognition to
1-star hotel is at the lowest end of the two foreign languages including English. the finest 5-star hotels in France.
Sources: https://www.service-public.fr/professionnels-entreprises/vosdroits/F24149; http://europeupclose.com/article/french-hotel-

rating-system/
urban or downtown location would help in identifying which hotels could be considered
to be a part of this very special and rapidly growing lodging segment.23
Franchising
Franchise agreements provide owners/operators (franchisees) with the use of a rec-
ognized brand name, access to central reservation systems, training programs, docu-
mented operating procedures, standardized computer software, quantity purchasing
discounts, and technical assistance from the parent company (franchiser) in return for
royalties and fees. Examples of franchise operating fees and requirements are shown in
Table 7.6. In return for the benefits received from the franchiser and in addition to the
required franchise fees, franchisees must give up some of their operational flexibility
and follow standardized operating procedures (SOP) and purchasing requirements as
outlined in the franchise contract.
Although franchising has been favorably received in the United States, it has not
been a great success in Europe and it has been even less common in Asia for North
Table 7.6 Franchise Requirements and Operating Fees

Marketing/
Minimum # Annual Reservations
Company of Rooms Franchise Fee Fee Application Fee
Days Inns 40 5.5% of 3.8% marketing/ Conversion: greater of $35,000
Worldwide revenues reservations or $350 per room plus $1,000
application fee; New built: greater
of $36,500 or $365 per room plus
$1,000 application fee
Hilton 5% of revenues 4% marketing/ $85,000 minimum
reservations
Holiday Inn 100 5% of revenues 2.5% of $500 per room, $50,000 minimum
Express revenues
Motel 6 40 4% of revenues 3.5% of $25,000
revenues
Preferred 100 $300 per room $20,000 per year $100 per room, $20,000 minimum
Hotels & per year,
Resorts $25,000
minimum
Source: Reprinted with permission by Lodging Hospitality, a Penton Media Publication.
M07_COOK1670_06_GE_C07.indd 204 08/06/17 4:42 PM

American lodging corporations to distribute their brands through franchising agree-

ments. As hospitality is an important component of the overall lodging product offer-
ing, by reading the SOP without fully appreciating and learning the corporate culture,
the franchisee will not be able to deliver the spirit of the brand. Developing countries
also do not have comprehensive franchise law developed to protect both parties.
Management Contracts
The idea of operating hotels under management contracts was born in the 1950s with
the Caribe Hilton in San Juan, Puerto Rico. “The Puerto Rican government’s develop-
ment agency wanted a modern hotel to encourage tourism and attract industry. [The
government] was so anxious to attract a name brand and the management skills needed
that it offered to build, furnish and equip the hotel” (p. 28).24 Hilton was approached
and agreed to market and manage the property under a profit-sharing lease agreement.
Management contracts, like franchises, allow lodging chains to expand aggres-
sively into new markets without having to make capital investments in physical facil-
ities. Under a management contract, hotel operating companies act as agents for the
owner of the property. The owner of the property “hires” the operating company to
fulfill all of the management and marketing functions needed to run the property. The
property owner continues to retain all financial obligations for the property, and the
management company is responsible for all operating issues. For their operating exper-
tise, management companies receive a base fee anywhere from slightly under 3% to
almost 6% of either total revenues or room revenues. In addition, other fees could be
collected, including branding fees, sales and marketing fees, reservation fees, training
fees, and incentive payments for achieving a predetermined level of profit. The con-
tracts normally range from 5 to 20 years.
As management contracts have grown in popularity, the structure of these con-
tracts has changed and become more complex. The owners’ needs in the relationship are
focused on guaranteed cash flows and while the operators’ needs are focused on assur-
ances of continued benefits from operating the property. “In place of a single document,
management contracts now include numerous concurrent agreements that address such
matters as real property rights; intellectual property rights; hotels as financial assets;
hotels as operating businesses; and the needs of owners, operators, and lenders” (p. 68).25
Chain Operations
Chain operations refer to groups of properties that are affiliated with one another
and have common ownership and/or management control and oversight. Chain oper-
ations can be created in a variety of different ways. For example, many chains such as
Interstate Hotels & Resorts and John Q. Hammonds Hotels and Resorts have been
developed using franchise agreements or management contracts. In other cases, such as
Walt Disney Resorts, all properties within the chain are owned and managed by a sin-
gle company. However, the most common structure is a blend of ownership, manage-
ment contracts, and franchises, which is used by companies such as InterContinental
Hotels, Marriott International, and Millennium & Copthorne Hotels.
Parent companies may own, franchise, or contract to manage any or all of the
properties they operate. Interstate Hotels & Resorts provides an interesting example
of how these combinations can be put together. Interstate operates franchises under
the Marriott, Hilton, Westin, and Hampton names as well as other properties under
management contracts. The use of different brand names allows Interstate to target
travelers in a variety of market segments.
Chain operations provide many management, marketing, and financial ben-
efits. These benefits include increased purchasing power, lower costs of operations,
common signage and advertising, expanded access to centralized reservation systems,
M07_COOK1670_06_GE_C07.indd 205 13/05/17 10:41 AM

and greater support from professional staff functions such as sales and marketing,
finance and accounting, and human resource management. Marketing synergies are
also gained through shared database information on customer preferences and usage
patterns, providing opportunities for cross-selling brands.
Strength in Numbers
Can property owners retain operating autonomy and still reap some of the benefits
that go along with franchise affiliations or chain ownership? This question may seem
like asking for the best of both worlds, but the answer is yes. Membership in referral
associations allows property owners to “go it alone” and still share the benefits that
come from “strength in numbers.”
Referral associations come in all sizes, meeting many different marketing needs. You
may already be familiar with Best Western, but not Utell. Best Western claims more than
4,000 properties in over 80 countries; the Best Western logo can be found on all types
of properties ranging from airport and convention center hotels to roadside motels and
resorts.26 In contrast, Utell is less well known but represents over 6,400 properties linked
to over 450,000 travel agent terminals worldwide. Whereas some referral organizations
such as REZolutions, Inc. serve a wide variety of properties, others such as the Historic
Hotels of America Association and Preferred Hotels and Resorts Worldwide serve the
needs of property owners catering to specific market niches.
There is no need for members to meet standardized design specifications or change
time-tested operating procedures. In fact, membership requirements are straightforward
and the benefits can be numerous. After meeting established quality standards and
paying an initiation fee, the benefits can begin. The marketing power of instant name
recognition through coordinated marketing campaigns, a centralized reservation sys-
tem, and widely distributed membership directories are just the beginning. Additional
benefits can come in the form of cooperative purchasing agreements, access to training
information, and the ability to share ideas with other property managers.
It All Begins with Marketing

Lodging properties rely on a steady flow of new and repeat guests to remain financially
healthy. Even before a property opens for business, sales and marketing efforts often
begin and should never end. These efforts may range from simply operating under a
recognized brand name and a reservation system to a complete in-house staff dedi-
cated to selling and marketing an individual property or an entire chain of properties.
No matter how simple or complex the marketing effort, the ultimate goal is to attract
future bookings of both individual and group business.
To generate reservations, hotels have a variety of options. Think back to Chapter 4
and the channels of distribution we presented. Hotel reservations can be made directly
by travelers or via travel agents or through other intermediaries such as tour opera-
tors. For example, you might pick up the phone and call your hotel of choice directly
or click on a website to book a room. Or you could stop in and see your travel agent
who could use her GDS to reserve your room. If you were attending a large conven-
tion, you might contact the convention and visitors bureau or a convention housing
services firm to reserve your room. Table 7.7 provides a list of many of the sources
used by hotels to fill their rooms.
Providing a Home Away from Home

Lodging properties are more than just mortar, bricks, and sticks. Once the physical
facility has been constructed, a staff must be hired, trained, organized, and motivated
M07_COOK1670_06_GE_C07.indd 206 13/05/17 10:41 AM

Table 7.7 Sources of Room Reservations

Proprietary website or mobile app for hotel property or chain
Intermediary websites or mobile app, such as Travelocity and Expedia
Auction-style websites or mobile app, such as Priceline.com
Direct telephone number to the individual property
Central reservation telephone number for the chain or other referral system
Local visitors bureau reservation service telephone number or website
Property or corporate sales staff
Travel agents
Hotel room consolidators such as Hotel Reservations Network
Conventions/other meetings
Presold room blocks through tour operators or preferred partners
to meet guest needs. This task often begins long before reservations are made or guests
arrive. Depending on the size of a property, guests may encounter a whole host of ser-
vice employees.
Too often, employees fail to recognize that they are an important part of these
marketing efforts. Just as employees must be trained to deliver high-quality service,
they must also be trained to anticipate guest needs and serve as marketing ambassa-
dors. For example, when checking in, guests’ comments that they are tired and hungry
provide opportunities to recommend room service. Or when checking out, guests who
mention that they will be returning in a month provide an opportunity to ask whether
they would like to make a reservation now for their next visit.
Organizing for Success

Basic operating functions that must be performed in all properties include adminis-
tration (general management), guest contact services (such as front office reception,
cashiering, and housekeeping), and guest support services (such as groundskeeping,
engineering, and maintenance). In a small motel, inn, or B&B, there may be only one
TOURISM IN ACTION
IT TAKES A TEAM TO CLOSE A SALE
While pleasing owners is the mainstay of the timeshare industry, marketing and sales is the lifeblood of the
industry. Reaching the goal of closing the sale on a vacation ownership interest requires a team of people. In
order to sell to existing owners and attract new prospects, timeshare companies invest heavily in marketing to
attract potential leads. These leads are solicited via company web pages, by mail, on the phone, and in-person
at premier vacation locations by an on-the-ground sales force offering incentives or gifts (free night stays, show
tickets, attraction tickets, deep discounts at premium restaurants, loyalty points for current owners, etc.) to entice
prospects into attending a sales presentation.
Prospects who meet income and employment minimum requirements must attend a “presentation” before
these gifts can be obtained. These sales presentations, which many consider to be high pressure, are scheduled
in waves (typically 8:30, 11:30, and 1:30), and are made by sales people who operate on a commission basis. Since
sales people only earn money when they make a sale and are evaluated on their ability to convert prospects into
owners, there is no question that it is a high-pressure job. The sales force is supported by administrative employ-
ees at the tour reception desk, gifting desk, contracts and finance department, human resources, and others who
are paid on a salaried or hourly basis. Finally, just like any other business, there is a manager or executive who is
responsible for the entire operation.
M07_COOK1670_06_GE_C07.indd 207 13/05/17 10:41 AM

or a few employees performing all of these functions. However, owing to the size and
complexity of many lodging properties (some with thousands of rooms and employ-
ees), additional managers, support staff, and hourly employees performing a variety
of specific functions may also be required to ensure effective and efficient operations.
No matter how large or small the property, the ultimate responsibility for property
management remains with the General Manager (GM). GMs hold uniquely important
positions, as they are the focal point for employees, guests, and the community. As
the top manager of a property, they perform many different but interrelated roles.
These roles include providing leadership, working with the community, gathering and
distributing information, allocating resources, handling problems, and coordinating a
wide variety of activities and functions.
Research continues to confirm the importance of the role of the GM in the suc-
cessful operation of a hotel; the scope of this role is also changing depending on the
type of property being operated. “In many hotels, the GM is an employee of a hotel
operating firm and is effectively an agent of the operator or owner (and sometimes
both parties). . . . With regard to individual functional areas, chain GMs have rela-
tively greater authority in human resources, marketing, and strategy but limited auton-
omy in finance and operations” (p. 433).
As properties grow, the primary administrative and senior management duties
for the revenue-producing activities of the hotel are typically divided between the
front office manager, the director of food and beverage, and the director of house-
keeping, who report to the general manager. It is also common in larger properties to
find the front office manager and the executive housekeeper reporting to the direc-
tor of rooms. These duties are further divided between front-of-the-house positions
(guest contact services) and back-of-the-house positions (guest support services). For
all but the smallest properties, front-of-the-house room’s duties are performed in
the front office and by guest service employees such as the bell, concierge, and valet
parking staff. Back-of-the-house room’s duties are typically performed by the house-
keeping department. You will learn more about food and beverage operations in
Chapter 8.
Larger and more complex properties will require additional cost center functions
such as marketing (sales), accounting (controller), human resource management
(HR), information technology (IT), building maintenance (engineering), purchasing,
and security services. An example of a traditional organizational structure for a large
lodging property can be seen in Figure 7.2. No matter what brand or management
structure, “[t]he modern guest is looking for environments that are refreshing, color-
ful, creative, and connective, not just efficient and tasteful” (p. 22).27
Meeting Guests’ Needs

The front office serves as the “heart” of all lodging properties as well as the first and
last point for guest contact. Front office operations are the nerve center and focal
point of all guest activities and many employee contacts. Front office employees are
charged not only with meeting and greeting guests but also with fielding their inquiries
about other available services and serving as the point of exchange for most financial
transactions. Other special assistance that may be provided under the direction of the
front office includes bell service, concierge service, and valet parking. It is interesting
to note that during interviews with hotel guests about delightful experiences, the front
office was the most cited service department by both North American and Northern
European guests.28
A key back-of-the-house guest service support group that is critical to guest satis-
faction is housekeeping. In addition to ensuring the cleanliness of all guest facilities, the
housekeeping department typically has the largest number of employees in a lodging
M07_COOK1670_06_GE_C07.indd 208 13/05/17 10:41 AM

The guest
General
manager
Office
Controller
manager
Accounting Payroll
staff staff
MIS Security
manager manager
Security
staff
Director of Director of Director of Director of Director of food

rooms marketing human resources engineering and beverage
Housekeeping Sales and Employee wellness/ Purchasing/ Executive

Training
manager marketing staff satisfaction commissary manager chef
Room Advertising and Group business Engineering Maintenance

inspectors promotions staff sales and services manager manager
Housekeeping Technical
staff Grounds
assistants
Employment
Front office
services Receiving/inventory
manager
control staff
Reservations Front office
manager shift managers
Restaurant and Banquet
Reservations outlet managers manager
staff Guest
Night audit CBX manager
services
Assistant restaurant Event
and outlet managers coordinators
Concierge CBX
Bell staff
services operators
Dining room and Banquet staff
Chefs
outlet shift managers
Valet Transportation
services staff
Dining room Room service

Bar managers Kitchen staff
staff staff
Bar staff
FIGURE 7.2
A typical lodging property organizational chart.
property. Housekeeping must coordinate its activities very closely with the front office
as it maintains the cleanliness and readiness of guest rooms, corridors, and common
public areas in addition to managing laundry facilities in many properties. Each time
guests check-in, their rooms should appear as if no one else had ever used them. In
fact, complaints about housekeeping are the number-one concern for travelers.29
M07_COOK1670_06_GE_C07.indd 209 13/05/17 10:41 AM

FYI TRADITIONS ARE IMPORTANT

Visitors to the Taj Mahal Palace, Mum- ritual has come to symbolize a culture that have helped Taj Hotels Resorts
bai, India, enjoy a traditional Indian of Indian hospitality. Other signature rit- and Palaces develop a distinctive brand
welcome, such as the marking of the uals include the wake-up of gentle yoga identity based on local Indian traditions.
forehead with a fragrant paste and the and the afternoon tea that pays homage All in all, the guest is immersed in a
presentation of a garland. This arrival to local tea traditions. It is these rituals truly memorable experience!
Source: https://taj.tajhotels.com/en-in/uniquely-taj/uniquely-taj-experience/sense-of-place/
Achieving Profitable Operations

The financial performance of lodging properties has been historically cyclical. When the
economy grows, the demand for overnight accommodations also tends to grow. This
growth results in higher occupancy rates, attracting developers who build more proper-
ties. This building boom finally slows when the economy softens, causing travel to slow
or the supply of new rooms to exceed demand for these rooms. Therefore, construction
and pricing decisions should be based on the ability to achieve and exceed break-even
occupancy levels. To achieve long-term profitability, hotel developers use the following
rule of thumb: For every $1,000 in construction costs, $1 in room revenue must be
achieved.30 Using this calculation results in a cost per key to construct and furnish each
room. So, for example, on the average per-room construction cost of approximately
$120,00031 for a midscale hotel without food and beverage facilities, a room rate of
$120 per night would need to be generated.
Table 7.8 shows the major revenue and expense centers for a full-service 300 room
center city hotel with convention facilities.
Additional revenue centers that might be seen for some hotel operations include meet-
ing room revenues, technology revenues, spa revenues, and rental and concession revenues.
There are also additional cost centers that may be common for expense reporting including
sales and marketing, accounting, purchasing, human resources, and safety and security.
Pricing and occupancy are doubly important to lodging facilities, which are noted
for operating on thin profit margins owing to capital and labor intensiveness. Build-
ing and equipping a lodging facility is very expensive and requires a long-term com-
mitment of financial resources or capital. Once constructed, the daily, weekly, and
monthly costs of providing adequate staffing continue to be incurred.
The rooms side of hotel/motel operations provides the main source of income and
operating profits for lodging properties in many countries, typically generating over 60%
of revenues and yielding a departmental margin of approximately 70%. A great deal of
management and marketing effort is focused on maximizing occupancy levels and room
rates by monitoring the rate or pace of future room reservations. To achieve the maxi-
mum occupancy at the best price, hotels and motels have relied on establishing several
different rates and borrowed the concept of revenue management from the airline indus-
try. These systems help managers achieve the maximum amount of revenue from a vari-
ety of available rates. If you were to walk in off the street on a high-demand day, you
would probably receive the rack rate, the standard and most expensive quoted rate for
one night’s lodging. However, due to the ease of travelers searching for information on
the go, room rates are becoming more transparent. A guest could search the web or use
an app to check the rate before walking in to the front desk. Therefore, often the best
available rate (BAR) is offered to capture the walk-in guest through direct booking.
The rack rate that is offered to transient guests is the most profitable rate for a prop-
erty. The least profitable are long-term contracts with preferred customers, such as airline
crews, that guarantee a minimum number of paid stays per year. These contract rates may
M07_COOK1670_06_GE_C07.indd 210 02/06/17 11:36 AM

result in prices that are only one-quarter of the rack rate, but hotel operators are will-
ing to forgo higher rates in exchange for guaranteed consistency in occupancy and reve-
nues. For competitive reasons, slight discounts of 10% off the BAR are offered to certain
groups of travelers such as senior citizens, club members, and frequent stayers. Because
these guests are dealing directly with the hotel or the hotel’s central reservations system,
the hotel saves on processing costs and commissions that would be paid to a travel agent
or other intermediary. Room rates are reduced further when travel agents and tour opera-
tors are extended commissions of 20% or more to generate business during slow periods.
Other groups offered prices below rack rates are government employees and
convention attendees. Government employees may be offered significant discounts
because they frequently are limited in how much they can pay by their per diem rates.
Conventioneers also receive reduced rates that have been negotiated based on the total
volume of business the convention will bring to a property.
Table 7.8 Prosperity Point Hotel Revenues and Expenses for the Month of
March 20xx
Occupied Rooms Actual Actual (%) Budgeted (%)
Available rooms 9,300
Total occupied rooms 7,403 79.6 80.0
Average rate $137.01
RevPar $109.06
Revenue
Rooms $1,014,285 54.2 46.8
Food 462,183 24.7 27.9
Beverage 338,415 18.1 21.3
Total F & B 800,598 42.7 49.2
Telecommunications 30,428 1.6 2.7
Gift shop 19,247 1.0 0.9
Other income 8,187 0.4 0.4
Total revenue 1,872,745 100.0 100.0
Departmental profit
Rooms 728,090 71.8 78.1
Food 84,260 18.2 14.7
Beverage 159,055 47.0 48.6
Total F & B 243,315 30.4 29.3
Telecommunications 1,521 5.0 (7.0)
Gift shop 3,465 1.8 .3
Other income 4,667 57.0 57.1
Total departmental profit 981,058 52.4 51.0
Operating expenses
Administrative and general 162,929 8.7 8.7
Advertising and promotion 74,910 4.0 4.4
Utilities 88,019 4.7 4.6
Maintenance 69,292 3.7 3.2
Total operating expenses 395,150 21.1 20.9
Gross operating profit before 585,908 31.3 31.0
interest, taxes, and depreciation
M07_COOK1670_06_GE_C07.indd 211 13/05/17 10:41 AM

For revenue management systems to work in lodging properties, “the problems

of multiple-night stays, the multiplier effect of rooms on other hotel functions (such
as food and beverage), the booking lead time for various types of rooms, the lack of a
distinct rate structure and decentralized information systems” must all be addressed.32
Failing to understand and adjust for these multiple variables can lead to the problem
of overbooking. Even when manual systems are used, overbooking can occur.
Hotels strive to achieve a “perfect sell,” where every available room is sold. To do
this the hotel may purposefully reserve more rooms than are available because historic
data indicates that a certain percentage of their reservations will get cancelled. It is a
gamble for hotels, which sometimes pays off with maximum revenue at 100% occu-
pancy, and sometimes does not when the property is actually overbooked.
When a property is overbooked and everyone holding confirmed reservations
shows up, some guests must be relocated or “walked” to other accommodations,
which costs money and creates guest dissatisfaction. Because a lodging reservation is a
binding contract, lodging property managers should be prepared to provide alternative
accommodations free of charge plus transportation and communication allowances
when there is “no room at the inn.” It is interesting to note that providing cash-based
compensation rather than vouchers in overbooking situations is preferred by custom-
ers, but may be more importantly, providing guests any type of over compensation
does not result in increased rebooking patronage.33
The availability of comparable hotels in the area will dictate whether a property prac-
tices a strategy of reserving more rooms than it has available. In some areas there will be a
variety of accommodation options making it possible to walk guests, while in other areas
there may only be one hotel and walking a guest is not a viable option. Even in the case of
a hotel that does not purposefully reserve more rooms than it has, sometimes there could
be a maintenance issue that puts a room out of order and the hotel still may find itself in
an overbooked situation and faced with the dilemma of having to walk a guest.
Even though properties may grow in size and complexity, the basic business oper-
ations remain the same. Providing accommodations to the traveling public continues
to be a 24-hour-a-day, 7-day-a-week task that demands dedication to detail and a
strong desire to welcome and serve each guest as if that guest were the first and most
important person of the day.
FYI CHECKOUT PENALTIES

If you’ve made a reservation with a surprised to find a $25 penalty added chains are adding a checkout pen-
major hotel chain such as Hilton, Hyatt, to your bill. In an attempt to control alty when guests fail to honor the full
or Westin for three days and decide to room availability and better serve their length of their reservations.
checkout after the second day, don’t be guests, these and many other hotel
Summary
Accommodations create temporary living quarters for guests Growth in the number of lodging facilities has resulted
through a variety of sources, including B&B, private accom- in the development of several classification schemes that
modations, condominium properties, timeshares, conference can be used for reporting and comparison purposes. These
centers, hotels, motels, RV parks, and campgrounds. Lodging classification schemes show that lodging facilities come in
properties, which provide the bulk of overnight accommoda- many sizes and types and therefore require varying levels
tions, can be traced to biblical times but did not develop into of staffing and managerial expertise for successful opera-
a significant segment of the tourism industry until rail and tions. Basic functions that must be performed in all lodging
oceangoing transportation systems improved and automo- properties include administration, front office, housekeep-
bile travel became convenient and popular. ing, and maintenance.
M07_COOK1670_06_GE_C07.indd 212 13/05/17 10:41 AM

The necessary staffing requirements of properties welcome and serve each guest. To meet and serve the diverse
change as they grow in size and complexity. Additional needs of travelers, a wide variety of accommodations has
line functions such as food and beverage and support staff been developed. Although much of our attention has been
functions such as accounting, engineering, human resource devoted to lodging properties, other specialized forms of
management, security, and purchasing are added as accommodations such as campgrounds and RV parks can
needed. Because some of the terminology concerning lodg- significantly increase the number of guests who can be
ing and other accommodation facilities is often loosely served in any one location.
used, it is important to seek clarification when talking The statement, “Come in; please be my guest,” is
with guests or other individuals in these establishments. more than just words. It is both an invitation and a state-
Providing accommodations to the traveling public ment of dedication to provide hospitality to the weary
requires training, dedication to detail, and a strong desire to traveler.
You Decide
“It just doesn’t make any sense, Nancy. We’ve been under- he may have found the source of the bidding problem. He
bid on four of our last five convention proposals. Worse had been tossing draft copies of his estimates and propos-
yet, each time we’ve been underbid, it’s been by the City als into the trash. Somehow, these papers must have been
Center Hotel, and they’ve beat us out by almost 5% on the finding their way into the hands of the City Center Hotel
total value of the contract. employees, because there were suspicious parallels between
I want some answers before we submit another bid. the contract proposals he had developed and the final bid
It seems to me that we are either totally out of touch with proposals submitted by the City Center Hotel.
the realities of our marketplace or there are some serious After a thorough investigation, Nancy concluded that
operational problems in your office.” although disposal procedures were normal, they were inad-
As a downtown hotel that targeted business travelers equate in this situation. Further investigation confirmed
and convention business, the Forest Park Hotel had tradi- that the night custodians working for a contract-cleaning
tionally been very successful in following up and capturing firm had been taking discarded worksheets and proposals
its fair share of leads that were developed by the local con- from the office wastebaskets. Nancy reported her finding
vention and visitors bureau. Because of these past successes, to Rich and assured him that adequate control procedures
Rich Edwards, general manager of the hotel, was partic- had been implemented to prevent future problems.
ularly disturbed by the failure of Nancy Peak, director of However, Nancy failed to tell Rich that she had
sales, in securing some key convention groups for the hotel. instructed Harvey to create fictitious worksheets and pro-
A heated meeting with Rich was always an uncomfort- posals to be discarded on a current bid proposal. A few
able situation, but Nancy was particularly troubled by this weeks later, Nancy was informed that Forest Park Hotel’s
encounter because she had no immediate answers. After an bid had been accepted and it would serve as the host hotel.
early-morning conference with her sales staff, she was confi- She felt that it was poetic justice that the bid proposal sub-
dent they could find the cause of the bidding failures. mitted by the City Center Hotel had been 5% less than the
Less than two weeks had passed when Harvey Zoller fictitious work discarded by Harvey but 2% over the actual
sheepishly walked into Nancy’s office. He said that he felt bid she had submitted. Did Nancy make the right decision?
Net Tour
To get you started on exploring Internet links for this www.boutiquelodgingassociation.org/
chapter, please see www.bandbassociation.org/
www.arda.org www.preferredhotels.com/
www.Marriott.com www.hsmai.org/
www.ahma.com www.str.com/
www.iacconline.org/ www.experienceispa.com/
www.rci.com/rci/
1. Identify and describe each of the major types of accom- 4. Explain the importance of this statement: “It all begins
modations. with marketing.”
2. Explain how timeshares (vacation ownerships) operate. 5. Identify and describe key front-of-the-house and back-
3. Describe the differences among independent, franchise, of-the-house functions.
management contract, and chain properties. 6. Describe how different rates can affect hotel revenues.
M07_COOK1670_06_GE_C07.indd 213 13/05/17 10:41 AM


1. Although several hotel pioneers were mentioned in this 4. Burj Al Arab Hotel in Dubai is widely recognized
chapter, there are many other individuals who have as the world’s most luxurious 7-star hotel. What do
had a significant influence on the lodging industry. you think are the reasons for this recognition and
After selecting or being assigned one of these pioneers, classification?
briefly describe the contributions that person made to 5. Visit a B&B or a boutique hotel in your area. Alter-
the industry. natively, do a virtual visit online. Summarize your
2. Arrange to visit a lodging property and schedule an impression of the property and differences from a tra-
interview with the manager. Your interview should ditional hotel.
include questions about how the property is marketed, 6. Identify someone who owns a timeshare through your
what types of standard operating procedures are fol- family connection, or neighbors and friends. Talk
lowed, and how financial performance is measured. to the person and find out why he/she purchased the
3. Select one of the hotel management companies listed in timeshare, and identify his/her usage patterns.
this chapter. Using your local library or other sources,
list the sizes (number of rooms) and brand names of
properties this company manages.
Glossary
Accommodations Loosely defined as establishments Lodging Facilities designed and operated for the pur-
engaged primarily in providing lodging space to the pose of providing travelers with a temporary place to
general public. stay.
Amenities Goods and services provided with accommo- Management contracts Operating agreements with man-
dations that contribute to guest comfort. agement companies to conduct day-to-day operations
Benchmarks Performance measures that are used by sim- for a specific property or properties.
ilar types of businesses to monitor key operations. Occupancy rate Ratio comparing the total number of
Best available rate (BAR) A guaranteed price that the rooms occupied for a given time period to the total
guest is quoted the lowest available rate for a night’s number of rooms available for rent.
stay. Overbooking Confirming more reservations for rooms
Booking A reservation. than can be provided during a specified time period.
Break-even The level at which total sales equals total Pension A small inn or boarding house similar to a B&B.
costs. Per diem Maximum travel expense amount that will be
Chain operations Groups of properties that are affiliated reimbursed on a per day basis.
with one another and have common ownership and/or Properties Individual accommodations and lodging
management control and oversight. facilities.
Concierge services Services provided by employees who Rack rate The standard quoted rate for one night’s
specialize in meeting the special requests of guests and lodging.
provide guest services such as making reservations and Referral organizations Associations formed to conduct
supplying information. advertising and marketing programs and generate reser-
Cost per key Cost to construct and furnish each hotel vations and referrals for member properties.
room. Rental pools Groups of condominium units that are
Fee simple Right of ownership evidenced by the trans- released by their owners for rental purposes and are
fer of a certificate of title. The buyer has the right to managed by lodging companies.
sell, lease, or bequeath the property or interest (as in a Right-to-use A type of lease in which legal title does not
timeshare). pass to the buyer. The buyer has the right to occupy and
Franchise A contractual agreement providing for the use utilize the facilities for a particular time period.
of a recognized brand name, access to a central reser- Royalties Payment (usually a percentage of sales) for
vation system, training, documented operating pro- the use of a franchiser’s brand name and operating
cedures, quantity purchasing discounts, and technical systems.
assistance in return for royalties and fees. Timeshare Either ownership or the right to occupy and
Independent properties Facilities that are owned and use a vacation home for a specific period of time.
operated as single units with no chain affiliation or
common identification.
M07_COOK1670_06_GE_C07.indd 214 08/06/17 4:42 PM

References
1. Sandoval-Strausz, A. K. (2008, January). The hotel. 18. Denizci Guillet, B., and Law, R. (2010). Analyz-
United Hemispheres, 52–54. ing hotel star ratings on third-party distribution
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Hotel & Restaurant Administration Quarterly, 19. Marta, S. (2003, February 21). Dallas-based Peg-
36(5), 57–63. asus has solution for hotel managers. Travel Wire
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paii.com/About-PAII. multinational lodging corporations. Industry Studies
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vacation ownership product attributes on customer 22. Anhar, L. (2001, December 12). The definition of
satisfaction: An investigation of product purchase boutique hotels in recent years. HVS International
and use. International Journal of Contemporary Newsletter, 1.
Hospitality Management, 27(1), 52–70. 23. Gau, L., and Day, J. (2011). Preliminary analysis
6. Upchurch, R., and Lahsley, C. (2006). Timeshare re- of the nature of boutique hotels. In F. Hummel,
sort operations. Butterworth-Heinemann, Boston, MA. ed., Proceedings of the 2011 Annual International
7. Baumann, M. A. (2000). Points offer consumers Society of Travel and Tourism Educators (ISTTE)
flexibility, variety. Hotel & Motel Management, Conference (Vol. 23, pp. 77–97), October 20–22,
215(9), 18. 2011 in Miami, USA. St. Clair Shores, MI: Interna-
8. Interval International sponsored study shows huge tional Society of Travel and Tourism Educators.
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leisure travelers. (2007). Vacation Ownership companies. Cornell Hotel & Restaurant Adminis-
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Summer). Time-share performance: A survey of finan- contracts—Past and present. Cornell Hospitality
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10. Vacation-ownership net sales increase 7.6 percent 26. Top brands. (2007). Lodging Hospitality, 63(3),
in 2002. (2004, May 17). Hotel & Motel Manage- 30–31.
ment, 36. 27. Attracting your guests from the outside. (2004,
11. Next stage of 2002 timeshare research complete May). AAHOA Lodging Business, 22.
(2002, November 13). ARDA press release. Avail- 28. Torres, E. N., Fu, X., and Lehto, X. (2014). Exam-
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nov13b.htm. perience: A cross-cultural perspective. International
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tion Quarterly, 40(5), 31–43.
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CHAPTER 8
Food and Beverage
There is no love sincerer than the love of food.
—George Bernard Shaw
LEARNING OBJECTIVES
1. Explain how travel and other events in history 4. Discuss the importance of a menu and its impact
have influenced the growth and acceptance of on production and service delivery.
different foods and beverages. 5. Identify the important operational and financial
2. Discuss the impact of science and technology on concerns faced by foodservice managers.
foods and beverages. 6. Describe how foods and beverages can add value
3. Explain the importance of rhythm, timing, and to other tourism services.
flow in foodservice operations.
CHAPTER OUTLINE
Sometimes It’s More Difficult Than It Seems An Ounce of Prevention Is Worth a Pound
Introduction of Cure
Major Influences on the Development of Beverages
Food and Beverage Services Beverage Operations
Travel and Discovery Keeping Spirits Under Control
Science and Technology Coffee, Tea, Or?
Building a Culinary Heritage Summary

The Beginnings of Modern Foodservice Practices You Decide
Planning to Meet Guest Expectations Net Tour
It All Comes Down to Rhythm, Timing, and Flow
Adding Value to Food and Beverage Experiences Discussion Questions
From Ten to Ten Thousand Applying the Concepts
Building Profitable Operations Glossary
Balancing Payroll Costs with Productivity References
Food Quality and Food Costs Are the Results of
Effective Purchasing
216
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Chapter 8 ▸ Food and Beverage 217
Sometimes It’s More Difficult Than It Seems

What had begun as an exciting sale soon turned into an important learning experience.
It was Carrie’s first big sale and she could hardly contain her excitement. As the newest
employee on the catering and sales staff at the River Front Hotel, she was anxious to
pull her weight and be a productive member of the team.
After dealing with several small groups, Carrie had been assigned to work with
Marge Lundstrum of Getaway Tours. Marge had already reserved space for a lunch
stopover on their Fall Foliage Tour, and the only remaining detail was to select a menu.
After a few qualifying questions, Carrie learned that there would be three busloads
consisting of 125 to 150 older men and women.
Marge said that they had been served chicken salad in pineapple boats their last
two fall seasons, but this time they wanted something different. She also stated that
they didn’t want to spend much more than they had in the past. Following a brief dis-
cussion, Carrie and Marge decided on bacon, lettuce, and tomato sandwiches (BLTs)
with garnish to be accompanied by a fruit salad with poppy seed dressing.
As Carrie reviewed the proposed menu at the weekly staff meeting, the food and
beverage (F&B) director, Martin Yantis, listened in disbelief. The thought of toasting
450 slices of bread would prove to be a logistical nightmare with the other daily activ-
ities taking place in the kitchen.
Although Martin thought about having Carrie call Marge to offer her some other
alternatives that would be just as appealing and easier to prepare, he decided to turn
this potential problem into a learning experience. On the day of the luncheon, Carrie
was given the opportunity to work with the preparation staff in the kitchen.
She soon discovered how difficult it was to make so many BLTs. Carrie learned
that preparing and serving large meal functions required a team effort and consider-
ation of the physical and human capabilities of the kitchen and staff. Carrie now knew
her job was more than just sales and decided to learn more about all of the different
aspects of F&B marketing, management, and finance.
Open kitchens can add value to the dining experience. Photo courtesy of Kowloon Shangri-La,
Hong Kong
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Introduction
Just think of the lasting memories and friendships that you have developed while shar-
ing your favorite foods and drinks. As we learned in Chapter 2, all of us share some
of the same needs. Foods and beverages are not only instrumental in filling a number
of basic human needs, but they also fill special tourism needs. Culinary tours have
recently emerged as a significant component of the overall tourism industry. Research
has shown that culinary tourists, those who travel to participate in cooking classes,
dine out in unique locations, sample wines, and attend food festivals and farmers’
markets, are younger, better educated, and more affluent than other travelers.1
Meeting the needs of these special travelers as well as those seeking to fulfill basic
physiological and social needs creates a variety of opportunities for tourism service pro-
viders to satisfy their guests and build lasting relationships. If a country would like to bet-
ter promote its culinary tourism, photos and written descriptions really help online visitors
to access the contents and topics in which they are the most interested. An analysis of gov-
ernment websites found that the website dimensions most essential for the promotion of
culinary tourism to be “Cuisine and Food Culture,” “Featured Foods & Recipes,” “Table
Manners,” “Culinary Tourism,” “Restaurant Certification,” and “Restaurant Guides.”2
Tourists provide an important source of revenue to many, but not all, foodservice
operations. “Roughly half of all travelers report that they dine out when they travel,
and that doing so is the most important activity planned after tourists arrive at a des-
tination.”3 On average, tourists spend about 25% of their total travel expenditure on
foodservices, more than their spending on public transportation, lodging, and other
tourism services.4 Some operations such as Hard Rock Café and Bubba Gump Shrimp
Company Restaurant and Market rely on a steady stream of tourist traffic, whereas
others cater mainly to local clientele. Location and target segments will determine the
relative importance of tourists versus local patronage in an operation’s financial suc-
cess. Research has shown that foodservice providers attempting to cater to tourists can
target marketing efforts to one or more of the following segments based on what they
are seeking: value, service, adventure, atmosphere and/or health.5
Because F&B experiences are very personal, the thought of pleasing all these different
tastes may seem like a difficult task. What may be pleasing and desirable to you may be
completely unappealing to someone else. The good news is that there are fundamentals
that can be followed to provide successful F&B services. In this chapter, you will learn about
these principles as well as some of the marketing, management, and financial decisions that
combine to create the dynamic and fast-paced working environment of F&B operations.
Major Influences on the Development of Food

and Beverage Services
We can trace the most important influences on the development of foods and beverages to
travel experiences and innovations in science and technology. Throughout history, travel
has introduced visitors to new tastes, and these discoveries continue today. Visiting new
locations allows us to enjoy unfamiliar foods. It also allows us to expand our understanding
and appreciation of new cultures, ceremonies, and traditions. In fact, throughout history,
foods and beverages have often been at the center of social gatherings and celebrations.
Travel and Discovery

The quest to explore and conquer new lands that encouraged early travel also led to
the spread of different F&B offerings. The importance of foods and beverages to the
development of travel and tourism can be seen all the way from the expansion and
conquests of the Greek and Roman Empires to the travels of Marco Polo.
M08_COOK1670_06_GE_C08.indd 218 13/05/17 10:42 AM

Precious metals and land were not the only treasures sought by these early adven-
turers—so, too, were flavorful spices and herbs. The Greeks brought home food-related
“treasures” from their travels in Egypt, Persia, Babylon, and India. These culinary trea-
sures were later passed on to the Romans. In fact, at the height of the Roman Empire, the
typical Roman cook was a male slave brought from overthrown Greece, where cooking
skills and cuisine were highly developed. The Romans’ appetites for pleasurable indul-
gences placed these cooks in high demand and raised the status of cooking to an art form.6
As the world moved into the so-called “Dark Ages,” travel began to diminish. The art
of cooking, however, was preserved during this period because most of the rich cooking
styles and the books that discussed foods and beverages were guarded in monasteries.
Outside monastery walls, people continued to prepare rough, simple dishes that had been
passed down unchanged for generations. The revival of travel by the wealthy during the
Grand Tour Era after the end of the Middle Ages had a significant impact on foods and
beverages. When the noble classes began to expand their travels into new territories, they
encountered and brought home many new foods, beverages, and methods of preparation.7
As Europeans began to travel to the Americas and West Indies, they returned with
many native foods from those regions such as chocolate, chilies, beans, corn, tomatoes,
and potatoes. Some of these items were initially avoided and treated with suspicion
because they looked different and were often regarded as poisonous. Through the efforts
of pioneers such as French agronomist Antoine-August Parmentier and American scientist
George Washington Carver, deep-seated fears and misconceptions about different foods
were dispelled. Parmentier successfully spearheaded a campaign begun in 1774 that made
potatoes a staple on the French dinner table.6 Research efforts led by Carver resulted in
over 300 products including cheese, milk, flour, and coffee made from peanuts.
Once people began emigrating from Europe to the “New Worlds” of North
America, they brought along their favorite drinks, breads, desserts, herbs, spices, and
fruits. These old favorites were combined with new foods, creating distinctive regional
cuisines from New England clam chowder to hominy grits. Now, in the 21st century,
the majority of people in industrialized countries can afford to travel for pleasure
and, through tourism, enjoy new foods and dining experiences. These experiences con-
tinue to influence the development of menus and service styles for F&B operations as
international and regional cuisines are blended together.
In the same way that travel has driven their development, foods and beverages
now drive many travel choices, especially food-themed travel choices. F&B events
attract tourists in increasing numbers to resorts, festivals, theme parks, casinos, and
many other destinations. For example, travelers come from all over the world to enjoy
the sights, sounds, and delights of Oktoberfest celebrations throughout Germany or
Fiesta Days in San Antonio, Texas. In fact, pleasant memories of foods and beverages
enjoyed as part of a trip often linger and are remembered more often than any other
part of the travel experience.8,9 Just as travel and the quest for new experiences have
awakened our taste buds, science and technology have continued to advance, so we
can enjoy these newfound treats wherever and whenever we desire.
Science and Technology

Now more than ever before, F&B professionals can deliver on the promise “your wish
is my command.” If a meeting planner wants to arrange a closing celebration banquet
for a sales conference in Arizona in January with live lobster and fresh corn on the cob,
no problem! Scientific advances and new technologies have made it possible to trans-
port highly perishable foods safely over great distances. Products such as strawberries and
asparagus can now be enjoyed anywhere and at any time of the year. Advances in farm
technology have increased the quantity, quality, variety, and availability of foods, expand-
ing menu choices all over the world. For example, aquaculture now brings high-quality
seafood such as shrimp, salmon, and oysters to the kitchens of the world 365 days a year.
M08_COOK1670_06_GE_C08.indd 219 09/06/17 9:38 AM

TOURISM IN ACTION
WINE TOURISM
There are different ways to experience a wine tasting trip but nothing quite like the Marathon du Médoc, held every
September near Bordeaux, France. Ten thousand runners, who come from all over the world, are challenged to run 26.3
miles (42 kilometers) through a scenic circuit of more than 50 châteaux in the Médoc wine region. The difference is that
fancy dress is mandatory and runners are expected to drink wines en route from the course’s 22 refreshment stands
and tuck into local food such as cheese, steak, and oysters. The event has become so popular that thousands of appli-
cants have been turned away, which may be a blessing in disguise!
Sources: http://www.marathondumedoc.com; http://www.marathontours.com/races/le-marathon-du-medoc-392; http://www
.lonelyplanet.com/news/2016/09/06/france-marathon-du-medoc-wine/
Refrigeration and freezing technologies, along with the use of irradiation,10 also
allow foods to be stored longer and transported over greater distances without affecting
quality. Continuing technological advances have also led to an array of computerized
equipment such as internal temperature probes, which can be accurately programmed
to regulate oven cooking and holding temperatures. These advances ensure the greatest
yields and the highest-quality food products. In addition, information and new ideas
about F&B preparation and presentation are now freely shared. Featured food sec-
tions in magazines and newspapers, special television programs, attractive websites,
professional publications, and a cable channel dedicated to food have heightened both
awareness and appreciation of this segment of the tourism industry.
Building a Culinary Heritage

Creating the foods we enjoy involves a combination of technology, science, and a great
deal of culinary and service talent. This talent can be found in many different types of
F&B operations. The most common are commercial restaurants serving the general
public and travelers who dine for reasons that range from need and convenience to
entertainment and pleasure. Commercial restaurant operations vary all the way from
fast-food (quick service) and take-out to elegant, full-service, sit-down operations.
Whereas restaurants are the most typical F&B operation, they represent only one
of many types of F&B services. Others can be classified into employee food service,
recreational food service, transportation food service, lodging properties, banquet/
meeting and catering facilities, and institutional foodservice establishments. Most of
these foodservice operations touch travel and tourism in some way.
The Beginnings of Modern Foodservice Practices

Independent eating and drinking establishments were the first F&B operations to
evolve, and today, they still generate the majority of all F&B revenues. It all began in
Paris, way back in 1765, when Monsieur Boulanger served a typical peasant’s dish:
sheep’s feet (also known as trotters) in a white sauce as a restorative along with ales in
his tavern. In fact, the word restaurant comes from the French word restorante, which
means “restorative.” Tavern keepers in Boulanger’s time were limited to serving beers
and ales only in accordance with the controls imposed by the medieval guild system.
These controls were designed to maintain standards and restrict competition. Because
Boulanger was limited by law to serving beers and ales only, he was brought to court
to stop the practice of serving food in his tavern. He won the case and the rest is his-
tory; the door was opened for restaurants to serve food and drink together.
The French Revolution marked another important milestone in the growth of
these new eating establishments. Chefs, who had previously worked for the monarchy
or nobility under the constant threat of losing their heads in the guillotine, fled to the
countryside and opened restaurants.11
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FYI TAPAS
It will always be difficult to categorize Spain is a tapas bar or café. The service open much later than other foodser-
every type of foodservice operation. goal of these operations is to provide vice operations. Tapas bars also serve
Differences arise owing to variations in guests with a wide variety of foods in as a meeting place for guests wanting
service goals, the number and profiles appetizer portions. They are most com- a drink and an appetizer before going
of people served, menus, atmosphere, monly found in the heart of theater dis- elsewhere to dine. Because of this
seasons, and production techniques. tricts, restaurant groupings, and other practice, tapas bars often thrive when
One example of a unique type of food- areas of a city where late-night activity surrounded by restaurants.
service operation that originated in thrives. A tapas kitchen will often stay
Foodservice operations have come a long way from the pioneering days of Mon-
sieur Boulanger. As societal norms, customs, and economies evolved, so, too, did the
entire F&B industry. The first disciplined approach to the culinary arts was captured
through the grande cuisine instituted by Marie-Antoine Carême. His cooking style,
along with recipes describing dishes and sauces of the grande cuisine, were collected
and published in La Cuisine Classique (1856) and other books that followed. Although
these books were popular in the kitchens of the nobility, they were slow in finding
their way into the fledgling restaurants, which offered a simple table d’hôte. This type
of menu provided little if any choice. Carême’s grande cuisine created a new style of
service and range of menu choices. Menus expanded through the offering of a “carte”
or list of suggestions, giving rise to the à la carte restaurant.
The next major step in the development of modern foodservice operations was
marked by the opening of the Savoy Hotel. It opened in London in 1898 under the
direction of Caesar Ritz and George Auguste Escoffier. Grande cuisine was still the
exception, but it was embraced by these two foodservice pioneers who ensured that
their à la carte presentations were an event. Diners enjoyed the best of food and service
as well as the ambiance of elegant surroundings.
Escoffier was the most famous chef of his day and is considered by many to be the
father of modern-day chefs. Escoffier revolutionized the methods of food service and
kitchen organization during his years of managing the kitchens at the Savoy and later
the Carlton Hotel. He expanded and refined the idea of à la carte service by establish-
ing carefully planned sequences of courses. For example, a typical sequence of courses
for today’s full-service casual American-style restaurant might start with an appetizer
and then be followed by soup, salad, entrée, and dessert.
Escoffier also reorganized tasks and activities in the kitchen, eliminating
duplication of effort and improving efficiency in operations by creating and defining
the work of stations. More than anyone else, Escoffier helped to focus foodservice
providers on the important task of catering to guests’ needs and desires by making
dining a memorable experience. This was only the beginning, as others contributed
to the constantly evolving developments in foods and beverages. Table 8.1 traces the
historic evolution of foods and preparation methods from the Egyptian Kingdoms to
Ray Kroc’s brainchild, McDonald’s.
Planning to Meet Guest Expectations

Foodservice operators are not simply in the business of providing foods and beverages;
they are in the business of creating guest enjoyment. Achieving this goal requires
attention to detail and preparation that begins well in advance of welcoming the
first guest. The guest experience is determined by a variety of interrelated factors
from menu design and place settings to plate presentation and style of service. Each
M08_COOK1670_06_GE_C08.indd 221 13/05/17 10:42 AM

Table 8.1 A Food and Beverage Timeline

4850 b.c.–715 b.c. Egyptian kingdoms—travel became popular; people sought new foods and experiences.
900 b.c.–200 b.c. Greek Empire—Greeks traveled to Egypt, India, Persia, and Babylon and brought back
knowledge of various cooking methods.
500 b.c.–a.d. 300 Roman Empire—Romans conquered the Greeks, bringing back Greek slaves and their
knowledge of food and preparations. The Romans’ appetite for indulgence elevated
cooking to the status of an art form.
5th–14th centuries Dark Ages—travel all but disappeared; the spread of cooking knowledge and skills
stopped and even began to diminish.
a.d. 1275–a.d. 1295 Travels of Marco Polo to the Middle East and China brought spicy new “treasures” such
as salt and pepper to Europe, renewing interest in travel, trade, and desire to discover
new foods.
14th–16th centuries Catherine de Medici, an Italian princess who married a French prince, introduced etiquette
such as the use of a fork and napkin as well as the Italian Florentine style of cooking.
16th–17th centuries European travel to the Americas and West Indies added new foods such as chocolate,
chilies, beans, corn, tomatoes, and potatoes.
Ann of Austria, a member of the Spanish Hapsburg family, married Louis XIII. Her Spanish
chefs introduced sauce espagnol and the use of roux as a thickener for sauces.
1651 Pierre Francois de la Varenne published the first cookbook, Le Vrai Cuisinier François,
which detailed the cooking practices of the French nobility.
1765 M. Boulanger, a Paris tavern keeper, started the first restaurant.
1789–1799 The French Revolution—chefs who were classically trained and had worked in royal
households began to work for wealthy “nonnoble” families. The exchange between
classically trained chefs and domestic chefs produced a number of culinary innovations
and refinements.
1856 Marie-Antoine Carême established the grande cuisine and published La Cuisine Classique,
systematizing culinary techniques.
1898 The Savoy Hotel opened in London under the direction of Caesar Ritz and George Auguste
Escoffier.
19th–20th centuries George Auguste Escoffier introduced the “brigade system.”
Soldiers returned from each of the world wars with appetites for the traditional foods of
Italy, Germany, France, and Asia.
1955 Ray Kroc opened the first McDonald’s revolutionizing ideas about franchising and
customer service.
1970s Chef and restaurateur Fernand Point of La Pyramide in France developed nouvelle cuisine.
Sources: Based on Labensky, S. R., Hause, A. M., Labensky, S. R., and Martel, P. (2007). On cooking: A textbook of culinary
fundamentals (4th ed.). Upper Saddle River, NJ: Prentice Hall, Inc.; The Culinary Institute of America. (2006).
of these factors plays a significant role in achieving guest satisfaction and must be
made within the physical and human constraints of the operation. Issues such as size
of storage areas, production and service areas, types of equipment, and the capabilities
of preparation, production, and service personnel must all be considered.
Armed with an understanding of these constraints and capabilities, the first step in
preparing to welcome guests is designing the menu. Effective menu design begins with
identifying target segments and planning to meet their desires. This requires asking
some basic questions. What image should foodservice operations support? How many
items should be offered on the menu? How diversified should the offerings be and how
seasonal should they be? What impact will different menu items have on preparation,
production, presentation, sales, service, and profitability?
The answers to these questions may result in a variety of menu offerings and
styles of service ranging from quick-service snacks to full-service formal dining. In two
studies, researchers found that, “Placing menu items at the beginning or end of their
M08_COOK1670_06_GE_C08.indd 222 13/05/17 10:42 AM

Tapas bars fill a unique food service niche. Photo by Cathy Hsu
category increases their popularity by about 20% (namely the gain from 45% of the
time when an item appeared in the middle of its category to 55% of the time when it
appeared at one of the ends of its category)” (p. 339).12
The second step involves the design and presentation of the menu itself. Seemingly
simple things such as deciding what type of menu board should be placed above an
ordering station or selecting the paper stock, graphics, color, font, and layout of a menu
take on new importance. These decisions communicate an image to guests even before
the food is presented.13 A theme-park guest wanting a restful break will have differ-
ent expectations than a businessperson on an expense account entertaining clients. The
design and presentation of the menu sets the stage for the next important decisions.
The third step involves a variety of decisions that range from selecting service ware to
designing place settings. These decisions may be driven by the functional demands of serv-
ing as many guests as inexpensively as possible or a desire to create an aesthetically pleasing
atmosphere. Plastic or paper with self-service areas for condiments may be the best selection
for guests in a hurry, but the same choice would not be suitable in a fine-dining situation.
Designing the actual plate presentation is the fourth and possibly most artistic
step in the process. Attention to detail in the previous steps comes to life when guests
receive their selections. Once the order is delivered, whether hot dogs and fries or cha-
teaubriand, the eyes always take the first taste. Even with simple dishes, the presenta-
tion should be designed to fill our senses through a thoughtful combination of
• color,
• texture,
• shape,
• aroma, and
• arrangement.
Think for a moment about how many different ways a chicken breast can be pre-
pared and presented. Does your choice encourage the guest to sample and savor or
simply eat because it is there and he or she is hungry? In one research study, among six
M08_COOK1670_06_GE_C08.indd 223 13/05/17 10:42 AM

FYI MOBILE FOODSERVICE UNITS

The idea of mobile food service, for for tourists to sample s ignature local beverage items, for instance, noodles,
example, food trucks and street food hawker dishes. Street food allows us a stir-fries, and steamed snacks. Exam-
stalls, is not new. Many destina- chance to sample popular local dishes ples of popular street food markets
tions showcase their local street food cheaply and conveniently and taste the include Taipei’s Ningxia night market,
markets in tourism promotional mate- local culture through socializing with Penang’s Gurney Drive Hawker Centre,
rials. For example, Singapore’s Hawker the locals. The units usually provide a Bangkok’s Yaowarat Road (Chinatown),
Centers are promoted as unique places limited menu of specialized food and/or and Singapore’s Maxwell Food Centre.
Sources: Choi, J., Lee, A., & Ok, C. (2013). The effects of consumers’ perceived risk and benefit on attitude and behavioral intention: A
study of street food. Journal of Travel and Tourism Marketing, 30(3), 222–237; Henderson, J. C., Ong, S. Y., Poon, P., & Xu, B. (2012).
Hawker centers as tourist attractions: The case of Singapore. International Journal of Hospitality Management, 31, 849–855.
food quality attributes (presentation, menu item variety, healthy options, taste, fresh-
ness, and temperature) that were tested; food presentation, taste, and temperature were
found to be significantly related to customer satisfaction among restaurant patrons.14
The fifth and final step in planning to meet guest expectations is accomplished
when the type of service is selected for delivering menu items. Service may range from
moving down a cafeteria line to formally orchestrated Russian service. Whatever the
selection, the ultimate goal is meeting guests’ needs. Proper planning, as shown in
Table 8.2, sets the stage for enjoyable dining experiences.
It All Comes Down to Rhythm, Timing, and Flow

Developing menus and having the right equipment, ingredients, and talent to produce
these items is only the beginning of a successful foodservice operation. Just like the
conductor of an orchestra who brings a musical score to life, F&B managers bring
menus to life. The brigade system, developed by Escoffier, was designed to make this
task possible. Under this system, each position has a station (assigned workplace)
and clear-cut responsibilities. For example, one station in the kitchen makes all of the
stocks and reductions needed for the bases of soups and sauces instead of having each
station make its own. Although the brigade systems were originally designed for use in
fine-dining establishments, they are flexible and can be modified for use in any size or
style of foodservice operation and, even with new innovations, are still used today.15
Professionally planned menus, a properly designed and equipped kitchen, well-
trained employees, and effective preparation and production systems make up the
basic ingredients for delivering high-quality food and service. However, it takes more.
A dedicated team constantly striving to balance the rhythm, timing, and flow of pro-
duction and service delivery adds the final ingredients that bring the dining experience
to life. To achieve this balance, managers must focus on being team leaders or coaches
for their employees and move away from the authoritarian approach that has been
traditionally used by foodservice managers.16
• Rhythm is the coordination of each required task and activity.
• Timing is the sequencing of each task and activity to produce desired results.
• Flow is the combination of rhythm and timing resulting in a smooth, efficient operation.
Table 8.2 Menu Planning Essentials

Step 1. Decide on items to include on the menu.
Step 2. Design menu appearance.
Step 3. Select appropriate service ware and place settings for menu items.
Step 4. Determine plate presentation for all menu items.
Step 5. Select appropriate level of service for menu items.
M08_COOK1670_06_GE_C08.indd 224 09/06/17 10:47 AM

To understand the importance of rhythm, timing, and flow, imagine the follow-
ing setting. You and your friend have just been seated and presented with menus in a
full-service American-style restaurant. The typical sequence of courses in this style of
restaurant would be appetizer, soup, salad, entrée, and dessert.
As you review the menu, you look around and notice that the dining room is full,
and there are customers still waiting to be seated. You see a busser (back waiter) mov-
ing a high chair toward a table; the captain (host/hostess) reseating guests who did not
like their table; a server (front waiter) stopping to answer a guest’s question; and you
just heard the captain take a special request from the guests at the table next to you.
While you are watching all of these activities your water glasses have been filled, and
your waiter has already taken and served your drink orders.
When your server takes your orders, you notice that each appetizer and entrée will
have to be prepared differently. The shrimp cocktail and the mozzarella cheese sticks,
just like the grilled salmon and the fettuccini Alfredo, will all come from different
stations in the kitchen. Your server passes through the kitchen doors and you hear a
muffled burst of activity before the doors quickly close. When the rhythm, timing, and
flow of all of these activities occur as planned, the dining experience can be as pleasur-
able as listening to a well-rehearsed symphony. Bon appetit!
Adding Value to Food and Beverage Experiences

Successful F&B operators are quick to point out the need for differentiating their opera-
tions from those of their competitors. Operators strive to distinguish themselves by focus-
ing on guest service, adding value through quality or pricing, providing unique atmospheres
and dining experiences, or offering innovative foods, beverages, and services. Any of these
approaches when successfully implemented may attract new guests as well as encourage
loyal supporters to come back time and time again and bring their families and friends.
With many smaller F&B operations, managers are usually in close contact with
the entire operation, enabling them to gain personal insights into guests’ needs.
As operations become more complex in settings such as hotels and resorts and the
number of outlets increases, the need for formal planning processes and procedures
becomes more important. There are two typical designs or approaches to planning
and delivering F&B services in these large “property” settings. The approach chosen
usually depends on factors such as the number of foodservice outlets, services provided
(e.g., room service, event catering, pool-side service, etc.), and the property’s overall
marketing strategy for attracting and serving guests.
At one location, F&B facilities may be designed to provide service to a captive audi-
ence of guests, whereas at another location, facilities may be designed to attract guests.
Let’s consider a ski area’s approach to its F&B operations. There may be thousands of
skiers on the mountain and many more guests in the base area. Most of the skiers are
planning to take a break from skiing between 11:30 a.m. and 1:30 p.m. to have lunch.
They expect conveniently located restaurants with a layout that allows traffic to flow
smoothly (the skiers want to move about without feeling as if they are stuck in a crowd).
They expect to be able to order, receive, and pay for their food without long waits. They
expect hot foods and beverages to be served hot, and cold items to be served cold. They
might expect prices to be a little higher on the mountain because of location and the
desire for convenience, but they still expect good food quality. Other guests who have
decided not to ski and are staying in the base area or village want the same quality and
convenience, but they may desire a larger selection of food and service options.
To run the ski resort’s F&B operations successfully, managers must pay close
attention to a number of things. For example, organized commissary operations will
be important to make sure each restaurant has everything it needs. Accurate track-
ing systems of food and supplies from the commissary to each restaurant will also
be needed. By tracking food and supplies accurately, managers know how much it
M08_COOK1670_06_GE_C08.indd 225 13/05/17 10:42 AM

costs to run each foodservice outlet. Watching the costs of each of these outlets helps
managers to identify and respond to potential problems quickly. Items on the menu
for these types of foodservice operations are usually the result of needing to please the
“mainstream” desires of guests by providing items quickly and in large quantities.
At another property, such as a destination resort, the typical approach for F&B
operations might be quite a bit different from the one we just discussed. In this type of sit-
uation, foods and beverages may be used to support a property’s overall marketing strat-
egy. For example, an oceanside resort in Monterey, California, may use distinctive F&B
offerings as marketing tools to attract guests and to distinguish itself from competitors.
These types of properties tend to use their F&B operations for three special reasons:
• Creating a desired public image and defining their place in the market. F&B
operations can have a significant impact on a property’s image in the marketplace
by serving as a center for community groups and organizations, causing the prop-
erty to be perceived as a point of pride in the community.
• Attracting desired business. F&B operations can be used to add quality or value
to a property’s overall image by attracting individuals such as travel agents, tour
operators, and meeting planners who influence travel decisions. These operations
are often used to attract group business by discounting F&B items, which adds
value to the total meeting package and obviates the need to discount sleeping
room prices. Actions like this can increase overall profitability because rooms have
a greater contribution margin than does F&B.
• Creating new business opportunities. By producing events, a property can use
F&B operations to create new business opportunities. Wine tastings, celebrations,
theme dinners, balls, brunches, and other combinations of food, beverage, and
entertainment often entice people to visit a property. Once there, they may stay
longer to enjoy the guest rooms, restaurants, lounges, pools, spas, and golf and
tennis facilities. These marketing strategies can be especially effective for generat-
ing business during shoulder seasons.
Guests can enjoy a traditional local breakfast at Sin Hoe Huat Café in a boutique heritage
hotel in Singapore. Photo by Eunice Tan
M08_COOK1670_06_GE_C08.indd 226 16/05/17 11:27 AM

FYI BASIC TABLE MANNERS

The rules of etiquette are formed and • Place your napkin in your lap. Finally, remember that no matter
re-enforced by cultural norms. So, to • Wait until everyone at the table has where you are, focus on the purpose
say one way is right could be a problem been served before beginning to eat. and enjoy the setting and people around
depending on where in the world you • Chew with your mouth closed. you. For more information on business
are. However, basic table manners are etiquette, see Cook and Cook.17
• Never talk with food in your mouth.
the same throughout the world. Keep
these few basics in mind and you can
• When in doubt about what you
should do, always follow the lead of
be comfortable in any setting.
your host or the person of highest
• Keep your elbows off the table. authority in your group.
Source: From Guide to business etiquette (2nd ed.) by Cook, R. A., and Cook, G. O. Published by Upper Saddle River, NJ:
Prentice-Hall © 2011.
In properties that use F&B as part of their overall marketing strategy, the F&B
director is expected to run the operations in a way that will best benefit the entire
property. In other words, the F&B director should be more concerned with the overall
profitability of the property and meeting guests’ needs rather than simply the profit-
ability of F&B operations. This approach can be seen in operations in which attention
to little details and customer service are the norm. Little things like responding to a
guest request for an item not on the menu, such as a peanut butter and jelly or grilled
cheese sandwich, or grander gestures, such as hosting a “no charge” cocktail reception
as a kickoff to a three-day conference, create lasting and positive impressions.
Other tourism suppliers face similar types of decisions. Should foods and beverages
simply be provided to fill a basic human need or should they be used as a valuable addi-
tion to the marketing mix? To answer that question, think about the approaches taken
by two different airlines. Singapore Airlines is noted for its high-quality foodservice
operations and uses this as a marketing tool, whereas Southwest Airlines flies only short
legs, choosing to avoid the costs and challenges associated with foodservice operations.
From Ten to Ten Thousand

How many did you say we should expect? Feeding small and large groups of guests
on a one-time basis creates some unique challenges for foodservice operators. Meeting
these special needs ranges from simple to complex. It may be as simple as reserving a
special section in a restaurant for a tour group as they step off the bus to enjoy a relax-
ing lunch, or it may be as complex as serving multiple meals at scattered sites across a
broad geographic setting such as at the Summer Olympics.
Whether it’s providing breakfast, lunch, dinner, or refreshment breaks for groups,
foodservice teams must be prepared to meet their needs and budgets flexibly. There
are a variety of facilities either specifically designed for banquets or that can be eas-
ily converted to meet catering needs. Most large hotels and resorts and many smaller
properties have multipurpose rooms that can be used for both meetings and food func-
tions, and convention centers and even sports arenas can be converted to feed tens of
thousands of guests. The task of planning, setting up, and serving these functions falls
in the capable hands of catering (also called banquet) managers and their supporting
service teams.
Catering sales managers work with clients to discover their needs for such things
as meeting and exhibit space as well as F&B requirements. These requirements are
then described in great detail for internal use for kitchen and service employees on a
catering contract or banquet event order (BEO) form. The BEO serves as an internal
M08_COOK1670_06_GE_C08.indd 227 13/05/17 10:42 AM

FYI WHERE FOOD IS THE FOCUS

One of the highlights of food tourism • Bonghwa Eun-Uh (Sweet Fish) Festi- • Phuket Vegetarian Festival, Phuket,
is traveling to places where food is the val, Bonghwa-gun, South Korea Thailand
focus. A destination's unique foods and • Cheung Chau Bun Festival, Cheung • Sapporo Autumn Fest, Sapporo, Japan
gastronomy can enhance the overall Chau, Hong Kong • Singapore Food Festival, Singapore
visitor experience. Local cuisines and • Miao Sisters’ Meal (Sisters’ Rice) Fes- • Ubud Food Festival, Bali, Indonesia
culinary heritage take center stage at
fairs and festivals dedicated to spe-
tival, Guizhou, China • World Durian Fruit Festival,
• Pesta Nukenen Bario (Bario Food Chanthaburi, Thailand
cial foods. Consider sampling some of
and Cultural Festival), Sarawak,
these Asian destinations from the food
Malaysia
festival smorgasbord:
form of communication that provides specific timing and instructions for the ban-
quet service team to meet guest expectations. This level of detail becomes especially
important when dealing with groups requiring a variety of services over multiple days.
For example, at a four-day conference, meeting goers will likely be served breakfasts,
lunches, dinners, refreshment breaks, and cocktail parties. These may range from a
formal dinner-dance banquet to a self-service continental breakfast.
Building Profitable Operations

“Mention food and beverage, and most hotel owners and managers want to run for
the exits. Restaurants, and to a lesser extent bars and lounges, are hard to conceive,
staff, operate, and certainly profit from” (p. 26).18 Competition in the F&B industry is
fierce, with owners and managers facing the added problem of operating on very thin
profit margins, so it is not surprising that a 60% failure rate for restaurants has been
reported.19
Why is this failure rate so high? People seem to become financially involved in F&B
establishments naively or for many of the wrong reasons. Some are motivated to own
or invest in a restaurant because they crave social recognition, whereas others like to
dine out and think they know how to deliver the dining experience. Still others venture
into this line of business because they have gained status as accomplished cooks from
dinner parties put on for friends. Such experiences lead many to believe falsely that they
have the necessary skills to be good F&B operators. However, there is some good news.
Research has shown that the median lifespan for restaurant operations is 4.5 years.20 So,
the restaurant you enjoyed on your last trip may still be there on your next trip.
FYI CHINESE’ AFFECTION FOR FOOD AND BEVERAGE

Chinese cuisine is famous around the it is around 40% in North American earn revenues through the sales of
world. However, one really has to be in hotels. It is not uncommon for a hotel gift packages that include festive food
China to realize how much they enjoy to have several large ballrooms and products. For example, hotels could
foods and beverages. In full-service many private dining rooms to serve easily generate over U.S. $1 million
hotels, the revenue generated from the banquet needs of customers. In revenue selling moon cakes during the
F&B operations accounts for more addition to banquets and restaurants, mid-Autumn festival.
than half of the total revenue, whereas hotels take advantage of festivals to
M08_COOK1670_06_GE_C08.indd 228 05/06/17 11:13 AM

Table 8.3 Recipes for Restaurant Success

Recipe Ingredients
#1 Operating costs are high and profit margins are low, so budgets, costs, and
portion controls are a must.
#2 Labor is a significant cost and a time-consuming issue; be sure to focus on
effective selection, training, and retention.
#3 Prepare a good business plan and have sufficient cash flow and capital to make it
through slow times.
#4 You must have a passion for the business and develop as well as practice strong
internal controls. Not only must you interact with customers, you have to
be involved in the day-to-day business to avoid fraud and theft as well as
supervising profit margins and negative signs that could infer problems.
#5 Pay attention to the number-one customer demand—quality.
#6 Monitor the marketplace. Keep your concepts current and fresh. Plan for change;
don’t wait for sales to slow before you implement changes.
Source: Kahan, Stuart. (2003, December). Food for thought. Practical Accountant.
Even if they do have the necessary talent, they may often fail to realize that foodservice
operators are faced with working long hours and then dealing with many complex prob-
lems in today’s competitive environment.21 Profit margins are shrinking, and controllable
costs, such as payroll, employee benefits, food costs, and taxes, are being forced up by
inflation and governmental regulations, and foodservice patrons are unwilling to accept
higher menu prices. In fact, F&B operations require a great deal of attention to detail, and
they are a business in which every nickel counts, and profits are often measured in pennies.
According to one industry expert, there are a number of steps restaurant operators can
take to ensure success. Table 8.3 lists those factors that can make the difference between
success and failure.22 “Whether in a quick service environment or a five-star resort, just the
right amount of planning will increase the likelihood of success exponentially.”23
Some of the more common performance measures that are used to evaluate per-
formance in foodservice operations include sales per seat, sales per employee, and the
number of times a seat or table turns over in one day. In the search for increased rev-
enues, restaurant operators may seek to increase table turns during peak periods by
speeding up the meal’s pace. However, this seemingly appealing approach should be
considered cautiously as research shows that excessive speed may make customers feel
rushed and hence guest satisfaction may be diminished.24
Table 8.4 shows a financial statement for a successful full-service restaurant. As
you study the profit and loss statement in Table 8.4, refer back to Figure 1.10 and
remember the importance of leverage, turnover, and margin in achieving profitability.
Rather than face the complexities of foodservice operations alone, tourism service
suppliers (especially small lodging properties) are turning in increasing numbers to the
expertise provided through branded concepts from successful franchisors. By co-locating
several franchises into a food court setting, guest needs can be met, kitchen and customer-
service labor costs can be substantially reduced, and marketing efforts can be minimized.
Balancing Payroll Costs with Productivity

As Carrie learned in the chapter opener, producing some menu items can be very
complicated as well as labor intensive and costly. Labor and food costs are the larg-
est controllable expenses for F&B operations. High employee turnover, the availabil-
ity and quality of new employees, and the constant need for training all combine to
create significant operating costs. Consequently, F&B managers must constantly focus
M08_COOK1670_06_GE_C08.indd 229 13/05/17 10:42 AM

Table 8.4 Income and Expense Statement of Restaurant Blue for the Month of
September 20xx
Revenues $ %
Food 2,437,500 65.52
Wine 544,688 14.64
Beer 410,156 11.02
Liquor 262,500 7.06
Soft beverages 65,625 1.76
Total revenues 3,720,469 100.00

Cost of goods sold
Food 926,250 59.05
Wine 245,109 15.63
Beer 131,250 8.37
Liquor 73,500 4.69
Soft beverages 6,563 0.42
Fees & commissions 186,023 11.86
Total cost of goods sold 1,568,695 100.00

Operating expenses
Labor 667,615 47.88
Employee benefits 477,345 34.23
Direct operating expenses 79,549 5.70
Occupancy expenses 90,280 6.47
General & administrative 79,531 5.70
Total operating expenses 1,394,320 100.00

Gross operating profit before interest, taxes, and depreciation 757,454 20.35
Food cost 38.0
Liquor cost 37.0
their efforts on making employees more productive through education, training, and
technology enhancements. In response to continuing labor shortages, most foodservice
operations are buying some ingredients that have been either partially or fully prepared.
This allows managers to hire fewer employees and reduces culinary training needs.25
Increasing employee productivity typically involves investing for future profitabil-
ity. Keep in mind that recruiting, training, and retaining skilled employees, as well as
equipping them with the best tools and technology, will be costly decisions. These deci-
sions are often difficult because the paybacks in efficiencies may be more long term than
immediate. Other approaches such as reminding food servers of a simple slogans such
as “hands-full-into-the-kitchen and hands-full-out-of-the-kitchen” and “if you can lean
you can clean” can do wonders to increase productivity and employee satisfaction.
Food Quality and Food Costs Are the Results

of Effective Purchasing
As important as controlling labor costs in F&B operations is the challenge of controlling
the cost of food. Therefore, just as much attention should be paid to purchasing, receiv-
ing, and storing these products as is paid to controlling labor costs. Purchasing is much
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FYI BE YOUR OWN RESTAURANT INSPECTOR

No matter where you travel, from • Look for cleanliness. Check out the • Check for general cleanliness. This
Augusta, Maine, to Zhenghou, China, back door and trash areas. If they are doesn’t mean just the tables, chairs,
you can protect yourself from food- neat and clean, then the restaurant floor, and uniforms; check also for
borne illnesses. In addition to watch- probably is clean also. dead bugs and soiled menus.
ing what you eat and drink, be your • Before you are seated, check out the Don’t run the risk of spoiling your
own restaurant inspector. There are restrooms. This is a good indication of travel fun. When in doubt, leave; there
many points in the foodservice process the importance placed on sanitation. is always a good place to eat if you look!
where sanitation and health standards • Notice your servers. Have they taken
may be compromised. Practice these care with their appearance? Do they
simple rules: appear to be clean? How do they han-
• Follow your nose’s cues. If there are dle plates and service ware? If the
funny smells emanating from the servers are dirty or careless, it’s time
restaurant, stay away. to move on.
Sources: Based on Dine Out Safely. USA Weekend, November 2–4, 2001; Satow, Y. E., Inciardi, J. F., and Wallace, S. P. (2009). Factors
used by restaurant customers to predict sanitation levels. Journal of Foodservice Business Research, 12(2), 170–179.
more than simply ordering and receiving F&B products. The greater the food knowl-
edge and skills of the purchasing agent, the more effective the purchasing processes will
be. For example, the purchaser must understand the impact that the menu, preparation
methods, ingredients, shelf life, storage facilities, equipment, skill level of the staff, and
guest expectations have on production and service delivery. Without this knowledge,
problems are sure to occur. In addition, no matter how good the purchasing processes
are, they can be made totally ineffective by poor receiving and storage procedures. Sim-
ple mistakes such as failing to verify amounts and weights or not checking product
specifications against the purchase order, as well as using newer items before older
items, can have an adverse impact on profitability and quality.
As in many competitive industries, foodservice operators are finding it beneficial to
create partnership relationships with their suppliers. These suppliers are called purveyors
in the foodservice industry and the relationships they are creating are called prime vendor
agreements. In a prime vendor agreement, foodservice operators agree to direct a large
portion (typically up to 80%) of their orders to a specific purveyor. In return, the pur-
veyor agrees to categorize purchases into broad groupings, such as meats, poultry, shell-
fish, and canned goods, and then negotiate prices for items in each category based on a
set percentage markup above cost. Other incentives such as providing training or lending
specialized equipment may also be offered by the purveyor to obtain additional business.
An Ounce of Prevention Is Worth a Pound of Cure

Foodservice operators also invest a great deal of time and money in training and tech-
nology for reasons other than improving service and profitability. In the same way an
airline captain is charged with the safety of crew and passengers, so, too, are foodser-
vice managers with their employees and guests. They must ensure that safe and proper
sanitation practices and procedures are always given priority in daily operations. As
you consider the following information, think about the potential dangers that could
be created if sanitation were not maintained as a high priority.
Food-borne illnesses concern both consumers and suppliers. When asked what
factors influenced their confidence in food safety, consumers resoundingly said clean-
liness of plates and silverware, tables and tablecloths, and restrooms (81%, 77%, and
M08_COOK1670_06_GE_C08.indd 231 13/05/17 10:42 AM

Table 8.5 How Foodservice Operators Are Addressing Sanitation Concerns

• 96% have trained kitchen staff in food-safety topics.
• 88% have audited food handling, preparation, or storage procedures.
• 85% have trained waitstaff in food-safety topics.
• 66% have purchased insurance to cover food-safety losses.
• 61% have required food suppliers to submit proof of liability insurance.
Source: Perlik, A. (2004). To protect and serve. Restaurants and Institutions, 1114(5), 42–44.
72%, respectively). How have foodservice operators responded to these concerns? See
Table 8.5 for a list of action steps.26
Scientific developments may have increased our understanding of food processing,
improved our methods of preparation, and allowed us to improve sanitation and food
storage techniques, but common sense is still needed. In the past, traditional safety
and sanitation practices focused mainly on the external cleanliness of food production
areas and equipment, leaving invisible contaminants free to grow into illness-causing
hazards. Most bacteria grow or multiply rapidly when products are held at tempera-
tures between 41°F and 140°F, which is known as “The Bacterial Danger Zone”
(see Figure 8.1). Knowledge of how and when bacteria can grow and cause food-borne
illnesses as well as the practice of basic sanitation techniques provides the foundations
for protecting guest and employee safety and health.
Frequent hand washing, frequent sterilization of foodservice equipment, and care-
ful use of cutting boards can go a long way toward preventing future problems. For
C° F°
Minimum temperature for reheating and

74° 165° minimum internal temperature for poultry
60° 140°
4° 40°
Or lower for frozen–food storage

–18° 0°
To preserve good quality store fresh at an internal temperature of:

• Meat, poultry, and fish, 41°F (5°C)
• Shellfish, 45°F (7°C)
• Eggs, 45°F (7°C)
• Dairy products, 41°F (5°C)
• Produce, vary depending on the product
FIGURE 8.1
The Bacterial Danger Zone. When food is improperly handled or stored bacterial will grow and cause
illness. Source: Food Safety Education. (2013). United States Department of Agriculture. Retrieved on
December 5, 2016 from https://www.fsis.usda.gov/wps/portal/fsis/topics/food-safety-education/get-
answers/food-safety-fact-sheets/safe-food-handling/danger-zone-40-f-140-f/ct_index.
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example, cutting boards can be color coded and dedicated for use with a specific prod-
uct. One color would be used only for cutting raw poultry, another only for fresh
vegetables, and another for breads. This helps to prevent the danger of cross contami-
nation when handling different types of foods.
The Center for Disease Control and Prevention identified common factors that are
responsible for food-borne illnesses, including purchasing food from unsafe sources,
failing to cook food adequately, holding food at improper temperatures, using con-
taminated equipment, and poor personal hygiene. Most of these are related to time–
temperature abuse and cross-contamination. The ServSafe program developed by the
National Restaurant Association provides the knowledge to properly design a food
safety management system that monitors and reinforces food safety principles from
receiving, storing, preparing, cooking, holding, cooling, reheating, to serving food.
Beverages
The distillation, fermentation, and compounding of spirits is surrounded by a history
as long and rich as the history of food. No one really knows who the alchemist was
who invented the distillation process, so it is no wonder that many people through the
centuries have referred to it as a gift from the gods. It was the Arabs or Saracens who
gave us the words alcohol and alembic, the latter word meaning a still. In fact, the
word alembic is used in all but the English-speaking countries even today.27
Beers, wines, and spirits can enhance foods and add to the overall dining experi-
ence. However, a lively bar will seldom complement a candlelit dining experience, just
as a great selection of wines will do little to enhance a hot dog stand on the beach.
Beers, wines, and spirits not only make a good companion for a dining experience, but
they are often the predominant flavor in a sauce, entrée, or dessert. They can also be
used in food preparations to season and tenderize foods.
When alcoholic beverages are used in hot food dishes, the alcohol quickly evapo-
rates, leaving only the flavor. In dessert recipes in which an alcoholic beverage is not
heated and cooked off, the practice is often referred to as perfuming. In short, the
relationship between foods and beverages is a marriage made in heaven and there are
many cultures who take the relationship for granted. For example, in Germany, you
can order a beer with your Big Mac and, on a trip to Japan, you can find vending
machines offering not only food but also cold beer or hot sake.
Beverage Operations
Successful beverage operations depend on many of the same fundamental business
principles that we previously discussed in developing efficient, profitable, and safe
foodservice organizations. In addition, beverage operations require a great deal of
attention to detail because they represent a substantial investment in equipment, furni-
ture, décor, and inventory.
Books, television, and movies have all painted a picture of the bartender full of
character, serving the guest whose stress is lifted away with a warm greeting. At the
guest’s request, the bartender reaches for a bottle or pulls the tap. That practice called
“free-pouring” is fading away to be recalled as a thing of the past. Today, it is com-
mon to see the increasing use of technology in bar operations in response to dramatic
drops in profit margins. The causes of these drops are heavy taxes on alcoholic bever-
ages and a change in consumption behaviors, as people are drinking less but ordering
more premium products. These changes along with guests’ intolerance of higher prices
are leading to narrower profit margins. However, interest in the status of premium
brands holds the promise of increasing sales and profit margins.
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Pubs remain favorite gathering spots for locals and visitors. Nyul/Fotolia
Today, instead of allowing the bartender to free-pour, automated systems strictly

control the amount of alcohol poured and electronically transmit information to
the computerized cash register system that rings up the sale and updates the bar’s
perpetual inventory. Although these systems are practical, many guests find them
to be impersonal, and many professional bartenders dislike their inflexibility. Some
guests and bartenders perceive the bar as a place for relaxed, social exchanges where
technology should be forgotten and handshakes remembered.
Keeping Spirits Under Control

Establishments serving alcoholic beverages face a unique set of legal and social chal-
lenges. In the United States, Dram Shop or Civil Liability Acts impose liability on the
seller of intoxicating liquors when an injury occurs to a third party as a result of a cus-
tomer’s intoxication.28 In addition, society’s demand for more responsible drinking and
stricter drinking-and-driving laws are creating additional demands on operators who
serve alcoholic beverages.
These legal and social concerns are being met with strong industry support for
responsible serving practices. Training programs that focus on recognition and service
support for customers who have enjoyed too much of a good time are now the indus-
try standard. Simple tactics for bartenders and waitstaff that include slowing down the
FYI CATEGORIES OF ALCOHOLIC BEVERAGES

1.
Fermented beverages, made from 2.
Distilled or spirit beverages, made 3. Compounded beverages, made from
agricultural products such as grains from a pure distillation of fermented combinations of either a fermented
and fruits. beverages. beverage or a spirit with a flavoring
substance(s).
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speed of service, keeping “munchies” on the table, and offering appetizer menus and
water are just a few approaches to responsible alcohol service. More drastic measures
such as denying service, having a guest escorted to his or her room, or calling a taxicab
may also be required.
The laws defining legal levels of blood alcohol before driving impairment occurs
vary (typically .08% – .10% in the United States). So, can a person drink and still
drive? The answer is yes, not much, or maybe not at all. A good rule of thumb to
follow in the United States is that a person can drink one ounce of distilled spirits,
one beer, or one glass of wine an hour and still be capable of driving legally. However,
countries in Europe have much stricter laws. In the United Kingdom, alcohol is limited
to 0.4 mg per liter of blood, and falls to 0.25 mg in most other countries including
Germany and France, but the limit in Norway is 0.1 mg. Gibraltar is the strictest
country of all; any trace of alcohol is considered a violation.29 Paying attention to
customers’ needs and enjoyment can go a long way toward protecting the customer,
the establishment, and the general public.
Coffee, Tea, Or?

For many years, we would have focused all of our attention on the alcoholic side
of beverage operations, but times have changed and non-alcoholic beverages have
gained in importance due to their financial significance. With the explosion of
specialty coffees and teas, bottled water, juices and energy drinks, non-alcoholic
beverages are no longer an after-thought or necessity as they have become
important profit generators. Even the dispensing of fountain drinks has taken on
new significance.
To understand the significance of non-alcoholic beverages to the bottom line,
think about that $4.00 cup of coffee, glass of tea or soda you recently had with a
moderately priced dinner. When these and other non-alcoholic beverages are added to
the bill, they not only increase the check average, but also the profit potential for the
foodservice operator. From a simple profit perspective, consider the contents of a 16
ounce cup. What is the main ingredient and how much does it cost? The answers to
these questions: ice and next to nothing! And, does a $4.00 cup of coffee or a lemon-
ade really cost as much, percentage wise, to prepare and serve as $16.00 entrée? The
answer to this question: no. But, when paired together, the combination is valued by
the customer and the profit margin for the operator is enhanced. And, where tipping is
practiced, servers also benefit, creating a triple-win situation. So, just like with alcohol
and food, pairings of non-alcoholic beverages and foods should also be taken into con-
sideration when designing and pricing menus.
Summary
Travel has expanded our awareness and desire for foods organizations are driven by the menus they offer. In deliv-
and beverages from all over the world while advances ering their menus, they must integrate the concepts of
in science and technology have also increased the ways rhythm, timing, and flow to best serve their guests.
that foods and beverages are produced and prepared. Foodservice operations range from the ubiquitous fast-
The growing desire to experience new and tantalizing food franchises that rely on drop-in customers to on-site
foods and beverages has created a separate category of amusement park snack bars and five-star gourmet dining
travelers: culinary tourists. rooms that serve captive audiences. No matter where they are
There are many types of F&B operations designed located or whom they serve, these operations can achieve a
to serve the public. The most common are commercial competitive advantage by focusing on guest service, adding
restaurants, but dozens of other styles of food service exist. value, providing unique dining experiences, or offering inno-
No matter the size or type of operation, all foodservice vative foods and beverages.
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The F&B sector of the tourism industry is excep- their guests and employees by using wise food-handling
tionally competitive, and profit margins are small, practices. Managers of beverage operations are also
making controlling labor and food costs an everyday faced with many of the same challenges and opportu-
challenge. Successful foodservice operators must train nities that are found in foodservice operations. By pay-
and retrain their employees as well as carefully monitor ing attention to details and keeping customer service in
purchasing and inventory control procedures. In addi- mind, we can create pleasurable memories and lasting
tion, F&B providers must guard the safety and health of relationships.
You Decide
Jim Barnes always made it a point to go to the Bull & Jim’s company reimbursed meal expenses only,
Bear Restaurant whenever his business trips took him not bar expenses. Because his previous guest checks had
to the Saskatoon area. After a busy day, he enjoyed the always been handwritten, he asked his waiter if he could
ambiance and the service for which the Bull & Bear had have a handwritten guest check showing the total amount
become famous. Everything was the same this time except rather than the computer-generated guest check.
for a new computerized cash register system that had been His waiter apologized for any inconvenience, but said
installed since his last visit. they were no longer allowed to handwrite guest checks.
As Jim scanned his guest check at the end of another Undaunted, Jim decided to ask the cashier for a receipt
enjoyable meal, he noticed something else that was differ- showing the total bill only. When the cashier hesitated,
ent. In the past with the handwritten checks, the waiter Jim told her that if she would not give him the receipt, he
had given Jim a receipt showing his total bill only. How- would have to find another restaurant that appreciated his
ever, this time, the guest check showed bar, food, and tax. business. Would you honor Jim’s request?
Net Tour
To get you started on exploring Internet links for this www.ifwtwa.org/
chapter, please see www.fcsi.org/
www.restaurants.org www.restaurantreport.com/
www.culinarytourism.org/ www.ameribev.org/
www.crfa.ca/ www.zagat.com/
www.wacs2000.org www.fodors.com/world/restaurant-reviews.html
www.servsafe.com/ www.worldfoodtravel.org
1. How has travel expanded our acceptance of different 4. How can F&B operations be used as a marketing tool?
foods and beverages? 5. Why must foodservice operators pay attention to detail
2. How have scientific and technological advances and watch every penny?
increased the availability and variety of foods and 6. Why is sanitation such an important issue in
beverages? foodservice operations?
3. Why are the concepts of rhythm, timing, and flow
important in foodservice operations?

1. Look up restaurants in the Yellow Pages of your local menu offerings, and prices. What are the key differ-
telephone directory. What categories are used to group ences and what are the similarities in these operations?
the restaurants? Select one category and identify the 3. Make an appointment with a manager/supervisor at
chapter issues that are particularly related to that cate- a local restaurant, airport caterer, hotel, motel, resort,
gory of restaurant. amusement or theme park, or other location that
2. Visit two different foodservice operations in your area serves food to tourists. Discuss with this manager what
and compare their décor, hours of operation, staffing, he or she likes and dislikes about the work as well as
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what types of education and training are necessary to 5. You have friends coming to town for a visit. Where
be successful in the industry. would you take them to eat? Why?
4. Select an article from a travel magazine or the travel 6. Visit the official Burgundy Tourism website (http://
section of the newspaper describing foods and/or bev- www.burgundy-tourism.com) and plan a weekend itin-
erages. Make a copy of the article and prepare a brief erary for an adult couple.
summary of the key points.
Glossary
à la carte A menu in which each item is priced and Perpetual inventory A system of tracking inventory on a
prepared separately. continual basis so that current information on the level
Aquaculture The farming and cultivation of water plants, of stock is always available.
fish, and crustaceans, such as kelp, salmon, catfish, Plate presentation The process of arranging menu
oysters, and shrimp, in large quantities for human offerings in a visually appealing fashion.
consumption. Prime vendor agreements Agreements directing a
Banquet A food and beverage function designed, priced, majority of purchases to one purveyor.
and produced for a client usually for a single event or Purchase order A contract that specifies the item(s)
occasion. wanted, including a brief description of quality and
Banquet event order (BEO) A contract for a meeting or grade, the number desired, and the price.
other special occasion that details the date, the sequence Purveyors Food-service supplier.
of events, special needs, foods and beverages, prices, Reduction The result of boiling a liquid (usually stock,
and guaranteed quantities. wine, or a sauce mixture) rapidly until the volume is
Brigade A team of foodservice employees, for example, reduced by evaporation, thereby thickening the consis-
the service brigade (all service personnel) or the kitchen tency and intensifying the flavor.
brigade (all kitchen personnel), in which each member Russian service A style of service in which the entrée,
is assigned a set of specific tasks. vegetables, and starches are served by the waitstaff
Catering A department within a restaurant, hotel, or directly from a platter to a guest’s plate.
resort property that is charged with selling and plan- Seat (table) turnover The number of successive diners
ning special meetings and food and beverage events. sitting in one seat or at one table during each dining
Commissary Central storage area where food and sup- period, breakfast, lunch, and dinner.
plies are received and kept until requisitioned. Shoulder season The period of time between high and
Contribution margin What is left of the sales price after low or closed seasons when demand for services
deducting operating costs. decreases.
Cuisine A French term pertaining to a specific style of Station A designated work area or department in a
cooking (such as Asian cuisine), or a country’s food in kitchen.
general (such as Mexican cuisine). Stock The strained liquid that is the result of cooking
Culinary The creative arts and crafts of preparing foods. vegetables, meat, or fish and other seasonings and
Culinary tourists/tours Travel for unique eating and ingredients in water.
drinking experiences in the context of the local culture. Table d’hôte French term referring to a menu offering a
Employee turnover A number of employees who leave complete meal at a fixed price (prix fixe).
their jobs because they intentionally miss work, quit, or Yield The amount or quantity produced or returned after
are terminated. the preparation, processing, or cooking of a product or
recipe.
References
1. Keefe, C. (2007, February 14). Comprehensive 4. U.S. Travel Association. (2011). U.S. Travel Answer
travel survey provides insights on food and Sheet. Available at: http://www.ustravel.org/sites/
wine travelers. Washington, DC: Travel Industry default/files/page/2009/11/USTravelAnswerSheet.pdf.
Association. 5. Yüksel, A., and Yüksel, F. (2003). Measurement
2. Horng, J. S., and Tsai, C. T. S. (2010). Government of tourist satisfaction with restaurant services:
websites for promoting East Asian culinary tourism: A segment-based approach. Journal of Vacation
A cross-national analysis. Tourism Management, Marketing, 9(1), 52–68.
31(1), 74–85. 6. Mizer, D. A., Porter, M., and Sonnier, B. (1987).
3. National Restaurant Association. (2008). Travel Food preparation for the professional. New York:
and tourism facts. Available at: http://restaurant.org John Wiley & Sons, Inc.
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7. The Culinary Institute of America. (2006). The 18. Watkins, E. (2004, January). Expotel Hospitality
professional chef (8th ed.). Hoboken, NJ: John uses F&B as its competitive edge. Lodging
Wiley & Sons, Inc. Hospitality, 26–28.
8. Kivela, J., and Crotts, J. C. (2009). Understanding 19. Parsa, H. G., Self, J. T., Njite, D., and King, T.
travelers’ experiences of gastronomy through (2005). Why restaurants fail. Cornell Hotel and
etymology and narration. Journal of Hospitality Restaurant Administrative Quarterly, 46(3),
and Tourism Research, 33, 161–192. 304–322.
9. Silkes, C. A., Cai, L. A., and Lehto, X. Y. (2013). 20. Luo, T., and Stark, P. B. (2015, April). Nine out
Marketing to the culinary tourist. Journal of Travel of 10 restaurants fail? check please. Significance,
& Tourism Marketing, 30(4), 335–349. 25–29.
10. U.S. Environmental Protection Agency. (2011). Food 21. Ranti, D. (1996, March 10). Out of business as
irradiation. Retrieved on 10 January, 2011, from usual. News and Observer (Raleigh, NC), 1, 2F.
http://www.epa.gov/radiation/sources/food_irrad.html. 22. Kahan, S. (2003, December). Food for thought.
11. Labensky, S. R., Hause, A. M., Labensky, S. R., Practical Accountant, 49–50.
and Martel, P. (2007). On cooking: A textbook of 23. Simon, L. (2007, June 19). The simplest kitchen on
culinary fundamentals (4th ed.). Upper Saddle River, Earth. Available at: Hotelinteractive.com.
NJ: Prentice Hall, Inc. 24. Noone, B. M., Kimes, S. E., Mattila, A. S., and
12. Dayan, E., and Bar-Hillel, M. (2011). Nudge to Wirtz, J. (2007). The effect of meal pace on
nobesity II: Menu positions influence food orders. customer satisfaction. Cornell Hotel and Restaurant
Judgment and Decision Making, 6(4), 333. Administration Quarterly, 48(3), 231–244.
13. Kelson, A. H. (1994). The ten commandments 25. Kitchen helpers. (2000). Nation’s Restaurant News,
for menu success. Restaurant Hospitality, 78(7), 4(1), 24–26.
103–105. 26. Perlik, A. (2004). To protect and serve. Restaurants
14. Namkung, Y., and Jang, S. (2007). Does food and Institutions, 1114(5), 42–44.
quality really matter in restaurants? Its impact on 27. Grossman, H. J. (1983). Grossman’s guide to
customer satisfaction and behavioral intentions. wines, beers and spirits (7th ed.) (revised by Harriet
Journal of Hospitality & Tourism Research, 31(3), Lembeck). New York: Charles Scribner’s Sons.
387–409.
28. Black’s Law Dictionary. (2014). Tenth Edition,
15. Dowling, M. (2011, Autumn). Auguste Escoffier: Garner, B. A., Editor in Chief. Thomson Rueters,
Still “le maitre.” Chef Educator Today, 14. St. Paul, MN.
16. Mills, S. F., and Riehle, H. (1993). Foodservice 29. Archer, J. (2003, November 14). Hazards of
manager 2000. Hospitality Research Journal: The driving abroad. Travel Weekly: The Choice of
Future Issue, 17(1), 147–159. Travel Professionals, 65.
17. Cook, R. A., and Cook, G. O. (2011). Guide to
business etiquette (2nd ed.). Upper Saddle River,
NJ: Prentice-Hall.
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CHAPTER 9
Attractions and Entertainment
The World is a book, and those who do not travel read only a page.
—St. Augustine
LEARNING OBJECTIVES
1. Describe the major classifications of attractions 4. Describe major types of heritage attractions.
and entertainment in the tourism industry. 5. Describe major types of commercial attractions.
2. Understand the differences among heritage 6. Describe major types of live entertainment
attractions, commercial attractions, and live alternatives.
entertainment.
3. Identify key marketing, management, and finan-
cial issues facing attractions and entertainment
operations.
CHAPTER OUTLINE
So Many Things to Do and So Little Time Shopping
Introduction Live Entertainment
A World of Opportunities Sporting Activities
The Performing Arts
Foundations for Understanding Attractions
and Entertainment Summary
Heritage Attractions You Decide
Museums and Historical Sites Net Tour
Zoos and Aquariums Discussion Questions
Parks and Preserves
Fairs and Festivals Applying the Concepts
Commercial Attractions Glossary
Amusement Parks References
Theme Parks
Gaming
Gaming Segments
Place Your Bets
239
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So Many Things to Do and So Little Time

One week was just not enough, but Marie had packed in an exciting agenda of
attractions and entertainment during her brief stay in London. When she and her
friends first planned to visit London, one week seemed long enough for this tourism
mecca. However, once they arrived, everything was so much better than the guide-
books and websites had described that their itinerary quickly expanded. Sure, it had
rained, but the rain just added to the atmosphere. As she posted pictures and com-
ments about her adventures, even more ideas and suggestions for things to do and
see kept pouring in.
The adventure began as they boarded a flight from Toronto for Heathrow Airport.
After getting their bags, clearing customs, and taking an express train to Paddington
Station, they were in the heart of London. They had agreed to find a bed and breakfast
(B&B) to use as a “home base” and meet there each night to discuss the different activ-
ities of the day and plan for the next. Finding a B&B was easy compared with fighting
the urge to sleep.
For her first day, Marie decided to take a nonstop tour aboard one of London’s
famous double-decker tour buses to get a feel for the city. A side benefit of the tour
was being able to stay awake by riding on the top in the open air. The tour gave Marie
an overall view of London and some ideas for scheduling her time. After a fish and
chips dinner, she returned to her B&B for a good night’s sleep.
Day two began with a typical English breakfast: eggs, sausage, bacon, juice, toast,
butter, jelly, and coffee. Marie decided to spend this day learning more about the
Terra-cotta Warriors and Horses Museum in Xian, China, a popular heritage attraction.
Photo by Cathy Hsu
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Chapter 9 ▸ Attractions and Entertainment 241
history of London. The Tower of London, Westminster Abbey, Parliament, Bucking-

ham Palace, and Cleopatra’s Needle were just a few of the stops on this busy day. Day
three was filled with shopping: Covent Garden, Oxford Street, and, finally, Knights-
bridge and Harrods. Day four was supposed to be museum day, but, when the sun
finally came out that morning, plans changed. A boat ride on the Thames and a visit
to Hyde Park and Kensington Gardens seemed like better choices. She also visited
Madame Tussaud’s Wax Museum and ended the day with a visit to one of London’s
many theaters.
The weather on her last day was a bit gray and drizzly, so museums were
back on the itinerary. There was no shortage of choices, but she finally decided
to visit the Natural History Museum and the British Museum. As there were still
a few empty spots in her luggage, quick trips to local shops for some last-minute
souvenirs for friends and family back home and one last visit to a local pub topped
off the day.
The plays, the shopping, the museums, the historic sights, Big Ben, the Tower of
London, Westminster Abbey, Buckingham Palace, Harrods, and that chance visit to
the British Museum! The days had flowed into one another as she enjoyed the delights
of one of the world’s premier tourism destinations. A rich history combined with a
wide array of attractions and entertainment options made London the perfect tourist
playground. There had been so many things to see and do during her whirlwind week.
Settling back in her seat for the flight home, she fell asleep thinking about the high-
lights of her trip.
Introduction
People have always been attracted to new, unusual, or awe-inspiring attractions and
events in every corner of the world. In the days before recorded history, travelers
may have journeyed for miles just to experience the beauty of the setting sun across a
mountain valley or to participate in a religious festival in honor of bountiful harvests.
Today, we may expect more, but we are still inspired to travel by the appeal of special
attractions and events. No matter whether it is the chance to attend a rock concert, to
witness Shakespeare being performed in the rebuilt Globe Theatre, to climb to the top
of the Eiffel Tower, or to view the solitude and majesty of Uluru (Ayers Rock), tourists
are constantly seeking new sights, sounds, and experiences as well as the opportunity
to participate in a variety of leisure activities.
Whether traveling or staying close to home, just how do people spend their
leisure time? The types and varieties of activities in which we choose to participate
are as varied as the seasons and the locations to which we travel. Natural attrac-
tions, such as volcanoes, mountains, caves, seashores, and waterfalls, and festivals,
such as planting and harvesting celebrations, served as attractions for early visi-
tors and are still popular today. However, times have changed and, although these
natural attractions and festivals are still popular, even wider varieties of alterna-
tives have evolved to fill our leisure time. Figure 9.1 provides a brief glimpse at
some of the attractions and entertainment alternatives North Americans find most
attractive.
Tourists, whether visiting friends and relatives, traveling for pleasure, conducting
business, or attending a professional meeting, tend to seek out a variety of attractions
and entertainment alternatives to fill their leisure time. When traveling, we may con-
tinue to participate in many of our favorite leisure and recreational activities, but we
also seek to see, do, and experience new things.
M09_COOK1670_06_GE_C09.indd 241 13/05/17 10:42 AM

400
376 million visits
350 341 million visits
300
250
Millions of visits
200
175 million visits
150
100
73 million in
attendance
50
17 million in
attendance 12.3 million in
7 million in
attendance
attendance
0
Theme/amusement parks Zoos/aquariums Major league football
Casinos Major league baseball Broadway shows
Nascar racing (Winston cup)
FIGURE 9.1
Entertainment activities enjoyed by North Americans. Source: Based on 2007 attendance figures: International Association of
Amusement Parks and Attractions.
A World of Opportunities
As Marie soon found out in the chapter opener, the menu of attractions and enter-
tainment possibilities traveler’s face is almost limitless. Selecting which ones to discuss
in this chapter is almost as difficult as deciding how to spend our leisure time as we
travel. To organize this discussion, we will use the following broad categories: heritage
M09_COOK1670_06_GE_C09.indd 242 13/05/17 10:42 AM

Table 9.1 An Attractions and Entertainment Sampler

Heritage Attractions Commercial Attractions Live Entertainment
Museums and historical Amusement and theme Sporting activities
sites parks
Zoos and aquariums Gaming Performing arts
Parks and preserves Shopping Fairs, festivals, and events
Can you think of other attraction or entertainment alternatives?
attractions, commercial attractions, and live entertainment. As shown in Table 9.1,

each of these broad categories can be further classified into more specific subgroups.
As you can see, this is only a sample, and many more options could be added to
the list. These attraction and entertainment opportunities may be selected as simply a
sideline on a trip or they may be the main reason for travel. In Chapter 10, you will
learn more about the important role many other leisure-time recreational activities,
such as golf, tennis, and water and snow sports, play in the overall appeal of tourism
destinations.
What would you add to this list? The Philadelphia Flower Show, the Carnival of
Venice, the Calgary Stampede, the Taj Mahal of India? Remember, things that interest
you and your friends may be totally different from what others might seek to experi-
ence or enjoy. Each of these attractions or live entertainment opportunities has its own
special appeal and place on the menu of leisure-time offerings.
Foundations for Understanding Attractions

and Entertainment
Attractions are similar in some ways to live entertainment alternatives. Visiting attrac-
tions or enjoying entertainment opportunities require travelers to make choices about
how they will use their leisure time. Some attractions are planned around historic sites
and natural settings, whereas others are designed and constructed around planned
activities, themes, and events. Depending on the purpose or setting, they may be con-
trolled and operated by not-for-profit organizations that are dedicated to preservation
and interpretation or by commercial organizations dedicated to meeting guests’ needs
while making a profit. Live entertainment opportunities may also be found in these
same settings and may be operated on a not-for-profit or a for-profit basis. However,
there are some key differences between attractions and live entertainment venues.
Attractions are natural locations, objects, or constructed facilities that have
a special appeal to both tourists and local visitors. In addition to these attractions,
tourists and other visitors are also drawn to see and be part of a variety of live enter-
tainment opportunities. Although most attractions are permanent, entertainment
alternatives are often temporary. In contrast, events such as fairs and festivals are
temporary attractions that include a variety of activities, sights, and live entertainment
venues. In addition, visitor attendance, as well as the financial fortunes of almost all
attractions, is influenced by seasonal changes, whereas entertainment venues can be
planned to take advantage of seasons and tourism flows. As can be seen in Figure 9.2,
even at a popular location such as White House, there are definite highs and lows in
attendance patterns.
Although many heritage attractions as well as amusement and theme parks are
heavily used during the summer months, they may experience much less traffic in
the winter months and so they close down. Even commercial attractions that were
M09_COOK1670_06_GE_C09.indd 243 13/05/17 10:42 AM

Recreational White House Visitations, Washington, D.C., 2012

110,000
106,494
100,000
92,910
80,000
Number of Visitors
64,221 61,764
60,692
60,000 56,096
52,315
39,917 38,114 36,357

40,000
27,401
20,668
20,000
0
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
FIGURE 9.2
Recreational White House Visitations, Washington, DC, 2012. Source: National Park Service. (2016). The National
Park Service 2016 Centennial. Retrieved from https://www.nps.gov/aboutus/upload/ Site-Designations-04-13-16.pdf.
originally intended to be open year-round, such as Sea World in San Antonio, Texas,
saw their visitor numbers drop so much during the colder months that it was no longer
profitable to operate on a year-round basis. Yet, these attractions may still have very
appealing shoulder seasons, which can meet the needs of many visitors and still gener-
ate sufficient revenues to cover operating expenses and/or generate a profit.
This seasonality of demand raises some key operating concerns for attractions.
First, from a marketing perspective, how can more visitors be attracted during less
popular shoulder seasons and how can they be encouraged to spend more time and
money during their visits? Second, from a management perspective, how can large
numbers of employees be recruited and trained in a short period of time to deliver
high-quality customer service? Finally, from a financial perspective, how can cash flow
be managed so that enough money is available to meet payroll and other operating
expenses during the busy periods while retaining enough funds to meet maintenance
and administrative expenses that occur on a year-round basis? Attraction operators
have a variety of alternatives to address these concerns.
In an attempt to address the slump in attendance and revenues during off-peak peri-
ods, attractions are developing and using special events to attract more visitors.1 To gen-
erate shoulder season attendance, marketing efforts have been altered to target groups
of potential visitors with flexible schedules such as mature travelers and families with
students on year-round education calendars. In addition, activities have been added to
match the seasons. For example, winter snow sport resorts have added mountain biking
and alpine slides to attract summer visitors, and amusement and theme parks are hosting
large groups at special promotional prices during traditionally slow shoulder seasons.
Attractions are also cooperating in their marketing efforts. “To help boost attendance,
the Toronto Metro Zoo has entered into cross-promotions with Paramount’s Canada’s
Wonderland, a large amusement park located about 30 minutes from the zoo.”2
Attracting and retaining the traditional pool of high school- and college-aged employ-
ees through the entire busy season has been accomplished through implementing wage
M09_COOK1670_06_GE_C09.indd 244 13/05/17 10:42 AM

scales that increase as the season progresses and the payment of completion bonuses if an
employee stays through a specified target date. In response to fluctuating demand, many
seasonal operations are also finding it helpful to recruit older workers, especially retirees
who still want to be active in the workforce or simply want to supplement their incomes.
No matter what the source of employees, managers must maintain a continuous recruit-
ing and training process to fill vacant slots created by employee turnover.
When the gates to an amusement park open or a ski lift starts running, guests arrive
and expect to find a staff ready to meet their needs. They also expect the same array
of foods, gifts, and other goods and amenities that they would find if they had arrived
a month later when the season was in full swing. Because most attractions operate on
a cash basis from admission receipts, initial payroll and supply expenses must be paid
before revenues are received. Planning and creative thinking are required to ensure
that adequate funds are available at the start of the busy season as new employees are
hired and supplies are received in anticipation of arriving guests. Selling season passes
at a discount at the end of the season or before the season begins and negotiating a line
of credit and extended payment terms with suppliers can help to ease the cash flow
squeeze. As you will soon see, these are just a few of the problems and solutions facing
tourism service suppliers in this segment of the industry.
In the following sections, we will describe and explore many of the heritage attrac-
tions, commercial attractions, and live entertainment alternatives that are available
for people to enjoy as they travel. You may be amazed by the variety of opportunities
available in each of these categories.
Heritage Attractions
Heritage attractions can be found in a variety of shapes, sizes, and locations through-
out the world. These attractions may range from a small community museum dedi-
cated to preserving memories and experiences to incredible feats of human ingenuity
and determination such as the Great Wall of China and other World Heritage Sites.
But heritage attractions are more than just museums, monuments, and archaeological
treasures. They also include showplaces for natural wonders such as botanical gardens
and aquariums as well as parks and preserves that are dedicated to public enjoyment
and the protection of natural resources. In addition, fairs and festivals create special
venues for celebrating and sharing a variety of accomplishments and cultural activities.
Museums and Historical Sites

Archaeological evidence shows that once people began to live in communities, they
began collecting, preserving, and displaying various items of interest from a cultural
and historical perspective. These collections have provided a means of displaying
history and passing on important information to future generations as well as “out-
siders.” Our continuing fascination with the past has created a growing demand for
museums and cultural heritage sites. Although the majority of these sites are operated
on a nonprofit basis, they serve as major tourist attractions, generating important cul-
tural and economic benefits.
Today people are attracted by the diverse cultures of other people and the past that
are displayed in museums. The number, types, and locations of museums can be counted
in the hundreds of thousands, and the list of people who visit these museums each year can
be measured in the millions. “Those who haven’t been to a museum in a while will hardly
recognize the institution. In the past decade, museums have transformed themselves, con-
structing eye-catching new buildings at a feverish-pace, replacing dusty artifact cases with
high-tech interactive exhibits, and dramatically expanding restaurants and museum shops.
The goal: getting more people to come, stay longer, and spend more money” (p. 12).3
M09_COOK1670_06_GE_C09.indd 245 13/05/17 10:42 AM

Research shows that when visiting museums, most visitors expect an experience
that can be described as “easiness and fun.” However, there are differences in what
these visitors expect based on demographic segments. For example, females with a
higher educational level usually expect a museum-visiting experience like most others
of easiness and fun; whereas older and married participants with higher incomes often
expect historical reminiscences.4
“Tourists love museums. In cities like Paris, London, Amsterdam, and New York,
museums have long been major draws for out-of-town tourists. Many people will plan
entire trips around a must-see exhibition; many more merely find museums a convenient
place to spend a rainy afternoon. A single spectacular museum has transformed the Basque
city of Bilbao from an industrial backwater into a premier tourist destination” (p. 6).5 The
number of available museums throughout the world continues to grow. For example, in
Europe, for every museum that existed in 1950, there are now more than four. The list of
museum types is extensive, but the following list provides some examples of the more com-
mon options from which visitors can choose: general, art, history, science and technology,
military, and natural history. Whether there are too few or too many museums is the sub-
ject of much debate. However, as societies grow and change, museums provide a valuable
foundation for studying the past and thinking about what the future may hold.
You may have heard of or even visited Colonial Williamsburg, Virginia, or Old
Quebec and recognize that they are major historic attractions. These are just two exam-
ples of historic sites, yet there are many other places beckoning tourists and dependent
on tourism revenues to continue preservation activities. Sites such as Historic Deerfield
and others throughout the world are attracting record numbers of visitors, especially
international tourists. More and more communities and countries are taking steps to
preserve historic treasures and attract visitors through active restoration and interpretive
programs. New life and uses are even being found for old industrial sites. “The owners
of the Dürnberg salt mine in Hallein, Austria, which has been hosting visitors since at
least 1700, decided in 1989 that salt was no longer profitable and closed down the mine.
But it still earns money from 220,000 visitors each year, taking them on rides on the
steep, long wooden slides that were built to transport miners” (p. 440).6 These museums
and heritage sites are managed by professional curators, and interpretive programs are
frequently conducted by docents who volunteer their time or work for very little pay.
Zoos and Aquariums

Large collections of animals, which were originally called menageries, have served as
magnets for visitors since the times of the ancient Chinese, Egyptians, Babylonians,
and Aztecs. Modern zoos (sometimes referred to as zoological parks) now come in
many sizes and can be found throughout the world. The Philadelphia Zoo was the first
(1859) location in the United States dedicated to the large-scale collection and display
FYI THE NATIONAL HERITAGE BOARD (NHB), SINGAPORE

NHB is the custodian of Singapore’s operates and manages the following • Singapore Philatelic Museum
heritage, with a mission to preserve museums and institutions: • Reflections at Bukit Chandu
and celebrate the shared heritage of • Indian Heritage Centre
Singapore’s diverse communities,
• National Museum of Singapore
• Asian Civilisations Museum • Malay Heritage Centre
for the purpose of education, nation-
building and cultural understanding. It • Peranakan Museum • Sun Yat Sen Nanyang Memorial Hall
Source: Reproduced with the permission of the National Heritage Board, Singapore, 2017.
M09_COOK1670_06_GE_C09.indd 246 05/06/17 2:20 PM

FYI S.E.A. AQUARIUM AT RESORTS WORLD SENTOSA MISSION STATEMENT

“The mission of S.E.A. Aquarium is to inspire conservation through fun and educational experiences.”
Reprinted with permission from Resorts World Sentosa.
of animals. Although this facility is still of great importance, it has been eclipsed by
more spectacular zoos such as the Bronx Zoo and the San Diego Zoo. Other nota-
ble zoos around the world can be found in Montreal, Vancouver, Frankfurt, London,
Paris, Moscow, New Delhi, Tokyo, and Sydney. Historically, most zoos were estab-
lished as not-for-profit organizations, but that form of operation is changing as over
half of all the zoos in the United States now operate as for-profit organizations or only
partially depend on government funding.1
Some of these zoos are very large, creating a great deal of public interest and public-
ity as well as generating significant international tourism traffic. This interest and traffic is
based on unusual exhibits, collections of animal species, and efforts to re-create the natural
setting found in the wild. Even the Walt Disney Company is banking on the continued draw
of zoos. Disney’s Animal Kingdom theme park, which features a blend of live displays of
existing animal species and animatronic displays of species from the past, such as dinosaurs,
has proven to be an attractive tourism destination. From both a management and market-
ing perspective, research shows that improving the zoo environment and demonstrating a
concern for animal welfare were important for achieving overall visitor satisfaction levels.7
The first public aquarium was established in London at Regents Park in 1853. It
eventually failed because of poor design and management, but the idea of a preserva-
tion attraction devoted to water life has proven to be successful. Although aquariums
are only about half as popular as zoos and wild animal parks combined, they are
increasing in number, size, and attendance. The huge Oceanarium in Lisbon, Portu-
gal, which opened as the flagship attraction of Expo ’98, represents Europe’s largest
and possibly the most spectacular of the world’s hundreds of aquariums. The Manila
Ocean Park in the Philippines, which opened in 2008, combines not only an expansive
Oceanaruim but also shopping and food to round out its attractiveness to visitors.
Many aquariums are supported and
managed as not-for-profit foundations,
such as Canada’s largest, the Vancouver
Aquarium. Others have been developed
as for-profit enterprises, such as the chain
of Sea World Parks. Recently, many cities,
such as Camden, New Jersey, and Long
Beach, California, have funded aquari-
ums to help revitalize waterfront areas by
attracting tourists and residents to oceans-
ide regions of these cities. One of the most
successful aquariums, Baltimore’s National
Aquarium, helped ensure the success of
that city’s redeveloped Inner Harbor.
Visitors get up-close marine life encounters at the Open

Parks and Preserves
Ocean Habitat, S.E.A Aquarium at Resorts World Sentosa. Every park and preserve is a little bit
Photo courtesy of Resorts World Sentosa different. They may range from famous
M09_COOK1670_06_GE_C09.indd 247 05/06/17 2:21 PM

urban parks such as Central Park in New York City or Hyde Park in London to forests
and preserves such as Prince Albert National Park in Canada and Nairobi National
Park in Kenya. Although they may be different in appearance and purpose, they are
dedicated to protecting the natural beauty of landscapes, plants, and animals for future
generations as well as providing visitors with open spaces for rest, relaxation, and rec-
reation. Achieving this balance requires meeting the needs of visitors while maintain-
ing the resources contained within the lands that have been set aside for public use.
To serve all these needs, the potential impacts of all activities must be monitored and
managed. For example, day-use areas and campsites that are accessible by motorized
vehicles and have full sanitary facilities require more upkeep and labor than wilderness
areas that are accessible by foot or on horseback only.
The importance of parks as major tourist attractions was ushered in with the ded-
ication of Yellowstone National Park in 1872. The U.S. National Park Service has
now expanded to include a variety of sites dedicated to the preservation of nature
and heritage. The 411 units within the park system are grouped into 20 designations
(see Table 9.2) including national park, national monument, national scenic trail, and
national preserve. The idea of national parks soon spread north to Canada, where in
1887, the first national park was established with the opening of Banff National Park.
National parks can now be found throughout the world as countries strive to pre-
serve and protect their more pristine natural treasures. The grandeur and importance
of some of these national parks, such as Jasper National Park in Canada and Grand
Canyon National Park in the United States, have become legendary and draw millions
of visitors each year to enjoy their breathtaking beauty.
Table 9.2 Units in the U.S. National Park Service

International Historic Site 1
National Battlefields 11
National Battlefield Parks 4
National Battlefield Site 1
National Historic Parks 50
National Historic Sites 78
National Lakeshores 4
National Memorials 30
National Military Parks 9
National Monuments 82
National Parks 59
National Parkways 4
National Preserves 19
National Reserves 2
National Recreation Areas 18
National Rivers 5
National Scenic Trails 3
National Seashores 10
National Wild and Scenic Rivers 11
Parks (other) 11
Total 412
Source: National Park Service. (2016). The National Park Service

2016 Centennial. Retrieved from https://www.nps.gov/aboutus/upload/
Site-Designations-04-13-16.pdf.
M09_COOK1670_06_GE_C09.indd 248 05/06/17 1:05 PM

FIGURE 9.3
U.S. National Parks expenditures. Source: Improvements and
Statistical abstract of the United States 2010.
maintenance,
Washington, DC: U.S. Government Printing Office.
16.2%
Salaries, Construction,
39.5% 12.3%
Other,
32%
Some attractions such as Nairobi and Tsavo National Parks in Kenya and Seren-
geti National Park in Tanzania have gained such international acclaim that they serve
as some of these countries’ primary tourist attractions. Although people from around
the world are drawn to these well-known national parks, there are also millions of
acres of land that have been set aside for public enjoyment on the state, provincial, and
local levels. From these giant parks to the small pocket parks tucked away in the cor-
ner of a city, not a day goes by that visitors and locals alike are not relaxing or taking
in a little bit of nature.
The U.S. National Park Service is a large operation in itself, with over 28,000
employees and 2.4 million volunteers, and spending over $2.7 billion to serve approx-
imately 11.7 billion visitors a year. 8 As a not-for-profit government agency, the
National Park Service depends on appropriations as well as other sources of revenues.
These other sources include admission (user) fees as well as revenues generated from
over 650 concessionaires that supply a wide range of goods and services from food
and lodging to transportation and souvenirs. However, the majority of operating funds
(65% in 2008) still come from appropriations. Figure 9.3 shows how these funds are
spent. Even with what may seem to a significant government appropriation, the park
service is having difficulty finding funds for maintenance and is exploring the possibil-
ity of corporate sponsorships in the form of advertising in the parks to generate addi-
tional funding. With the number of units in the national park service having increased
from 391 to 412 from 2009 to 2016, this funding problem is sure to persist.
Botanical gardens are another important part of the tourism attraction mix for
many communities. Some botanical gardens are renowned for their magnificent dis-
plays, and they draw visitors from all over the world. The oldest botanical garden was
established at the University of Pisa in Italy in 1544. The Royal Botanical Gardens in
Edinburgh, the Munich Botanical Gardens, the Montreal Botanical Gardens, and the
Missouri Botanical Gardens in St. Louis are just a few examples of some of the more
popular and frequently visited botanical gardens.
Fairs and Festivals

Fairs and festivals hold unique positions in the attractions and entertainment segment of the
tourism industry because they are a little bit of everything—heritage attractions, commer-
cial attractions, and live entertainment. A fair was originally a temporary marketplace set
up with the idea of stimulating commerce by creating an event that would bring together
buyers and sellers. You might recognize the modern-day version of the original fair as a flea
market. Festivals, on the other hand, were gatherings devoted to times of celebration.
M09_COOK1670_06_GE_C09.indd 249 13/05/17 10:42 AM

The Stone Forests are a natural attraction in China. Photo by Cathy Hsu
Up through the Middle Ages, there were fairly distinct differences between fairs
and festivals. However, over time, many of the same types of activities such as food,
shows, and musical entertainment could be found at both fairs and festivals. The idea
of having fun at these events is probably not surprising because the word fair comes
from the Latin word feria, meaning “holiday.”
As commerce grew, so did the idea of fairs that were designed to be large and
last for longer periods of time, maybe as long as several months. Many major exhi-
bitions highlighting achievements and industries were held before the first “World’s
Fair.” Two of these were the Paris Exhibition of 1889 and the 1904 Louisiana Pur-
chase Exhibition in St. Louis, Missouri.
The idea of these very large fairs that bring together exhibitors and visitors from
all over the world proved to be so popular that international leaders decided to bring
some uniformity to the concept. With the signing of a diplomatic convention in Paris in
1928, 43 countries agreed to the frequency and basic operational goals of events that
would officially be recognized as World’s Fairs. This agreement created the Interna-
tional Bureau of Exhibitions (BIE), which divided the world into three zones: Europe,
North and South America, and the rest of the globe. It also stipulated that fairs would
not be held in consecutive years in any one country and that no fees would be charged
for the exhibits of foreign governments. Since its formation, there have been a number
of notable World’s Fairs including the New York World’s Fairs (1939); Brussels Uni-
versal and International Exhibition (1958); Expo ’67 in Montreal, Canada; Expo ’70
in Osaka, Japan; Expo ’92 in Seville, Spain; Expo 2000 in Hanover, Germany; Expo
2005 in Aichi, Japan; Expo 2010 in Shanghai, China; and Expo 2015in Milan, Italy.
Another very popular visitor attraction is the regional, state, or county fair. Most
of these have evolved around the display of agricultural and livestock exhibits, but they
often include industrial exhibits and many other entertainment activities. The Eastern
States Exhibition, or “The Big E” as it is called, is an annual regional 10-day fair held
each summer in West Springfield, Massachusetts; it celebrates the crafts, industries,
and agricultural products of the northeastern states of the United States. Some of these
fairs, such as the Canadian National Exhibition in Toronto, the State Fair of Texas,
and the National Western Livestock Show in Denver, draw tens of millions of visitors.
However, whether it is a World’s Fair, state fair, or county fair, people still travel from
all over to exhibit and participate in the festivities.
M09_COOK1670_06_GE_C09.indd 250 13/05/17 10:42 AM

FYI SONGKRAN FESTIVAL, THAILAND

The Songkran Festival held in April each contests, Mr and Miss Songkran contest paying homage and respect to elders and
year celebrates the Thai New Year and and procession, and sporting events, in ancestors.
is one of the most significant festivals in addition to traditional rites and practices. For the 2017 Songkran Festival, the
Thailand. Commonly referred to as the These include the procession of Buddha number of international tourists travel-
water festival, it involves lively water images on floats, bathing of Buddha ing to Thailand was expected to be over
battles and parties on the streets, music images, bringing offerings of sand to 470,000, generating revenues of 8.05
concerts and cultural performances, food temples, placing tungs (ceremonial paper billion Baht.
festivals, traditional arts and handicraft flags) on sand chedis (pagodas), and
Sources: Porananond, P., & Robinson, M. (2008). Modernity and the evolution of a festive tourism tradition: The Songkran Festival in
Chiang Mai, Thailand. In J. Cochrane (Ed.) Asian Tourism: Growth and Change (pp. 311–322). Oxford: Routledge; http://www
.tatnews.org/event/songkran-festival-2017/?instance_id=147; http://www.tatnews.org/nationwide-songkran-celebrations-kick-off-
colourful-bangkok-extravaganza/
Festivals celebrate a variety of special occasions and holidays. Some are derived
from religious observances, such as New Orleans’ and Rio de Janeiro’s huge Mardi
Gras festivals. Other festivals focus on activities as peaceful as ballooning (the Albu-
querque Balloon Festival) or as terrifying as the running of the bulls in Pamplona,
Spain. Often, festivals center on the cultural heritage of an area, such as the clan fes-
tivals that are prominent in the North Atlantic province of Nova Scotia. Seasons are
also reasons for festivals such as the Harbin Ice Festival in China, Winter Carnival
held in Quebec City, or Milwaukee’s Summerfest. More recently, food has become the
center of attention at locations such as the Taste of Chicago, the National Cherry Fes-
tival in Traverse City, Michigan, or the Garlic Festival in Gilroy, California.
Any time people visit a fair or a festival, it is a time of celebration, and what cele-
bration would be complete without fun and food? From the Oktoberfest in Munich to
Hawaii’s oldest food festival, the Kona Coffee Cultural Festival, tourists and locals can
expect to find a tempting array of music, foods, and drinks. Community leaders have
discovered that tourists can be drawn to even the smallest communities for fun-filled
events. The National Cluck-off held during Chicken Days in Wayne, Nebraska, and
the Oatmeal Cook-off held at the Oatmeal Days in Oatmeal, Texas, attest to people’s
desires to attend and be a part of festivals from the sophisticated to the seemingly silly.
In addition to these many heritage attractions, culture provides innumerable other
methods to attract visitors. For further discussion of the importance of culture’s role in
tourism, turn to Chapter 12.
TOURISM IN ACTION
THE CANNES FILM FESTIVAL AND THE AMERICAN PAVILION
The Cannes Film Festival (officially Festival de Cannes) is held each year in the French Mediterranean. The festival is
recognized as the most prestigious film festival in the world, attracting A-list celebrities, performers, directors, and
cinematic staff. The international scope of the festival is evident in the languages used to communicate media cov-
erage: French, English, Spanish, Portuguese, Chinese, Japanese, Arabic, and Russian. Select festival screenings are
held in the elegant Palais des Festivals located on the Boulevard de la Croisette, preceded by the famous red carpet
entrance. The buying and selling of films takes place in the adjoining Marche du Films, and the associated business of
networking, business parties, press panels, and supporting activities take place in pavilions like the American Pavilion
(AMPAV) that are located directly on the beaches of the Mediterranean attract masses of tourists each year. All of this
activity creates a variety of internship opportunities for students wanting to get an international experience.
Sources: www.festival-cannes.fr/en/about/whoWeAre.html and www.ampav.com/index.php/about-us. Retrieved on 4/15/2016.
M09_COOK1670_06_GE_C09.indd 251 09/06/17 9:47 AM

Commercial Attractions
In addition to the heritage attractions just discussed, a host of commercial attractions have
been developed to meet travelers’ leisure-time needs. Whether it’s the thrill of the roller-coaster
plunge, the excitement of gaming, or the joy of an armload of boxes after a day at the mall,
both tourists and locals welcome the opportunity to visit and enjoy these attractions.
Amusement Parks
The first amusement parks, which were called pleasure gardens, were built in England
and France. Some of the largest and most popular amusement parks such as Gardaland
on Italy’s Lake Garda and Tivoli in Denmark attract millions of visitors each year.
As the name pleasure garden implies, these attractions began as manicured gardens
designed to provide a temporary escape for city dwellers from the everyday drudgeries
of life. Rides such as carousels, games, and food and drink stands were added to these
pleasure gardens to meet guest needs.
The idea of parks with rides and other entertainment activities soon found its way
to the United States. Interest in amusements in the United States heightened when the
Ferris wheel was introduced at the 1893 Chicago World’s Fair. The name for this new
amusement that became the centerpiece of most early amusement parks was taken
from its inventor, George Washington Gales Ferris.
Lights, sounds, rides, games of chance, food, and a flurry of activities proved to be
natural draws for those early thrill-seeking visitors to such places as Coney Island in
Brooklyn or the Steel Pier in Atlantic City. Many smaller amusement parks in the United
States were originally located at the edge of town, where the trolley lines stopped. These
amusement parks, called “trolley parks,” were established as marketing tools to encour-
age ridership during the slow weekend periods. As automobiles and buses replaced trol-
leys, these and other amusement parks faded in popularity as their captive audiences
disappeared. However, the concept of family fun and amusement was kept alive during
the first half of the 20th century by traveling carnivals that moved across the country as a
source of entertainment at many fairs and festivals until a landmark event that occurred
in 1955. That year marked the opening of Disneyland in Anaheim, California.
Disneyland was much more than an amusement park. Although it drew on some
of the basic attributes of an amusement park, Disneyland was the first theme park, and
its opening served to rekindle respectability and interest in amusement parks. 9 Since
that time, the operations of amusement parks have become more sophisticated, with
technology playing a far more important role. However, the basics of fun, excitement,
and fantasy remain the keys to amusement park successes.
Amusement parks, family entertainment centers, and water parks serve as
important recreational outlets for their host communities and also attract considerable
tourism interest from the region. Some of the larger amusement parks that may
FYI ROLLER COASTERS

Looking for a thrill? Amusement park approaching 150 miles an hour, turns of can stand during a safe yet terrifying
operators know you are, and are over 120 degrees and 4 plus G-forces, thrill experience. With the addition of
meeting that need by pushing the adrenaline rushes are the norm. How virtual reality to these rides, the only
limits of what the human body can high, fast, dramatic, and powerful will limits faced by ride designers are their
stand with continuing advances in next year’s ride experience be? The imaginations.
roller coaster technology. With drops answer lies in design technologies and
of over 400 hundred feet, speeds ultimate limits of what the human body
M09_COOK1670_06_GE_C09.indd 252 13/05/17 10:42 AM

be recognizable to you include Six Flags/Elitch’s

Garden in Denver; Kentucky Kingdom in Louisville;
Kennywood Park (one of the original trolley parks) in
West Miffin, Pennsylvania; Grand Slam Canyon in Las
Vegas; and Cedar Point in Sandusky, Ohio (the largest
in North America). Like so many tourism service
providers, there is no industry-specific classification
system for these entertainment attractions.
Theme Parks
The distinction between amusement and theme parks
is beginning to blur, but there are several unique char-
acteristics that set them apart. Theme parks create a
destination in themselves. By combining entertain-
ment, food, and beverages and an environment dif-
ferent from that found outside the gates, visitors are
allowed to escape reality as they enter. Through the
magic of technology and elaborate staging, theme
parks can replicate almost any location in the world.
As visitors are transported into this simulated environ-
ment, they are afforded the luxury of being in another
location without the expense or any of the potential
problems of faraway travel.10 It is predicted that, “[T]
he popularity of theme parks and attractions will con-
tinue to grow as theme parks and attractions are more
and more associated with the new vacation experience
that includes the convenience of on-property accom-
Ferries wheels, freefall drop towers, and roller
modations, food services, recreation, shopping, recre-
coasters are the hallmarks of a major amusement
ational and entertainment activities, and other tourist
park. Dave King/Dorling Kindersley, Ltd
services” (p. 146).11
There may be a tendency on the part of North
Americans to think that they are the center of amusement park attractions. However,
remember that the idea was imported from Europe and a trip to that continent will show
that it has not lost its place in the theme park spotlight. Disneyland Paris; Europa Park
in Rust, Germany; De Efteling Leisure Park in Kaatsheuvel, the Netherlands; and Port
Aventura in Salou, Spain, are Europe’s most popular theme parks.12 Other park locations
around the world, such as Tokyo Disneyland in Japan; Dreamworld at Coomera on
Australia’s Gold Coast; Lotte World in Seoul, Korea; Ferrari World Abu Dhabi; Hopi
Hari in Sao Paulo, Brazil; Window of the World in Shenzhen, China; and Burlington
Amusement Park on Prince Edward Island, Canada, serve to highlight the international
appeal of these attractions.
Increasingly, in the creation of theme parks, we see labor, expertise, capital, and
management flowing freely around the world. “People do drawings in China for deliv-
ery in Los Angeles the next morning; expatriates move around to work in India, Latin
America, and Eastern Europe.”10
“The contemporary American typically associates theme parks with concepts of per-
manence, gardened park-like settings and single price admission” (p. 51).13 Theme parks
meeting these criteria range from elaborate parks such as Disney World in Florida and
Canada’s Wonderland in Toronto to local and specialty theme parks such as Worlds of
Fun in Kansas City, Missouri, and Six Flags over Georgia, in Atlanta, providing a wide
range of choices for the consumer. To differentiate product offerings and compete suc-
cessfully, theme park operators must become more aware of consumer perceptions and
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Table 9.3 Amusement/Theme Park Revenue Sources

Revenue Sources in U.S. Dollars Mean Percentage of Total Revenue (%)
Admissions 39
Tickets/wristbands 20
Food 16
Birthday parties 2
Catering 3
Merchandise 6
Souvenir photography or video 1
Video/arcade games 1
Skill/team/challenge games 2
Redemption games 1
Parking 1
Rentals 1
Concessions 1
Sponsorships 1
Special events 2
Campground 1
Go-karts 1
Other 2
Source: International Association of Amusement Parks and Attractions. (2011–2012). IAAPA Amusement
Park Benchmark Study.
concerns. In today’s global market, the basics of parks development and management
remain the same, but attention to detail is vital. “Whether the project is in your native
country, or a continent away, it is imperative to be up to date on the demographics of
your target market, what appeals to them and how to communicate with them.”14
From an operating point of view, parks must create a fun atmosphere and be clean
and visually pleasing. There are several core conditions that must be met by theme park
operators to retain repeat patronage and attract new patrons. In addition to visually pleas-
ing and exciting park facilities designed based on the preferences of your target markets, all
the service quality principles discussed in Chapter 3 apply. For example, employees need
to have good product knowledge, be able to think and feel from customers’ perspective,
and deliver consistency in products, services, and fun! Good communication skills by park
employees are also pertinent to maintain visitors’ interest and excitement. The ability to
control crowds and work out the logistics of people flow are other essential components.
Park designers must provide a wide variety of rides, especially roller coasters and
water rides, while reducing the perception of crowding. In addition to activities with
an educational focus, new rides and features must be added on a periodic basis to
maintain guest interest and ensure repeat patronage. To fund these changes, parks rely
on six major sources of revenue (see Table 9.3).
Gaming
Casino gaming has always been popular and available in many parts of the world, but
it has experienced explosive growth in popularity and availability in the United States,
Macao, Singapore, and Canada during the past few years. When gaming was legalized in
Nevada in 1931 to attract tourists during the Depression, few would have envisioned that
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some type of gaming operation would one day be found within easy access of so many
people in so many locations. The same type of phenomenon happened in Macao in 2003
when China eased visa requirements, and gaming exploded as tourists flooded in.
The increasing availability and ease of access to gaming locations just in the United
States has resulted in more Americans visiting casinos than attending major league and
collegiate football games, arena concerts, symphony concerts, and Broadway shows
combined, as shown in Figure 9.1.
From New Mexico to Connecticut, casinos all over the country are in the midst of
a high-stakes gamble: remaking themselves into full-service, if not luxury, vacation
destinations. Taking their cue from Vegas, they’re throwing up plush hotels, high-
end shopping malls and even kiddie amusement parks, all in an unprecedented bid
for the family-vacation dollar (p. W4).15
Five basic factors combine to explain the current success and future prospects of
the gaming industry. First, voters have been increasingly willing to approve new gam-
ing alternatives because these activities have come to be viewed as a “voluntary tax”16
or form of economic development while politicians have been unwilling or unable to
pursue new taxes.17 Second, more people than ever before are choosing casino gaming
as an acceptable leisure activity. Four out of five adults now report that they consider
casino gaming to be a “fun night out.”18 Third, retirees constitute the single largest
segment of the casino market,19 and their numbers continue to grow. Fourth, casi-
nos have devised marketing programs to attract the previously ignored “low roller,”20
and fifth, expanded availability of gaming opportunities is attracting many individuals
who have never before visited casinos for entertainment.21
With the advent of more locations, accessibility, and new technologies, the char-
acteristics of gaming as a leisure-time activity have changed. Currently, there are five
broad categories of gaming alternatives:
• Traditional, full-scale casino gaming, including well-established locations in
Atlantic City, Las Vegas, London, Macao, and Monte Carlo
• Historic, limited-stakes operations such as those in Colorado’s mining towns
• “Dockside” (riverboat) casinos, such as those operating in Missouri and Illinois,
and on the Mississippi Gulf Coast
• Gaming on Native American reservations varies all the way from limited-stakes,
small-scale operations such as the Sky Ute Casino in Ignacio, Colorado, to large-
scale Vegas-style operations such as Foxwoods on the Mashantucket Pequot
reservation in Connecticut
• Casino on ocean cruises where the slot machines and gaming tables begin
operation when the cruises reach international waters.
Table 9.4 highlights some of the milestones in the growth and availability of gam-
ing activities.
Casino gaming is one of the most regulated businesses around the world. Gaming
businesses must comply with local, state, and federal regulations. These include com-
plying with tax laws, treasury department regulations, and rules governing alcohol
consumption, types of games allowed, and sizes of bets. The size of casino operations
is measured by gross gambling revenues (GGR). GGR is the amount wagered minus
the winnings returned to players.
Gaming Segments
The development of new games and expanded gaming availability have given rise to
several gaming segments, each with a profile somewhat different from the others and
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Table 9.4 Milestones in Gaming’s History and Growth

Year Event
1931 Casino gaming legalized in Nevada.
1969 Casino gaming legalized in Canada.
1978 Casino gaming legalized in Atlantic City.
1988 Indian Gaming Regulatory Act made gaming possible on tribal lands in almost
every state.
1989 Limited-stakes gaming in Deadwood, South Dakota.
1989 Limited-stakes riverboat gaming legalized in Iowa (limits removed in 1994).
1990 Limited-stakes gaming in Central City, Cripple Creek, and Black Hawk,
Colorado
Government-operated Crystal Casino opened in Winnipeg, Canada.
1990 Riverboat gaming legalized in Illinois.
1990 Riverboat and dockside gaming legalized in Mississippi.
1991 Riverboat gaming legalized in Louisiana.
1992 Cruise ships permitted to operate gaming activities on the high seas.
1992 Casino gaming legalized in New Orleans.
2002 Liberalization of casinos in Macao ending a 40-year monopoly.
2003 Visa restrictions on mainland Chinese travelers to Hong Kong and Macao were
relaxed, and Macao boomed as a gaming destination.
2005 Casino gaming legalized in Singapore, with two licenses issued in 2006 as part
of the integrated resort development.
2006 Gaming revenue in Macao exceeded that of Las Vegas strip.
each with different benefits sought from gaming. Four broad segments appear to be
emerging:
1. High rollers. This segment is composed of sophisticated gamblers (both
domestic and foreign), to whom traditional gaming was originally targeted.
These players tend to be wealthy, older, and male. High rollers tend to play
games of skill rather than luck.22 Gaming venues outside of the United States
have been especially adept at serving this segment.
2. Day-trippers. Retirees dominate this segment. These players make several short-
duration trips to operations within easy driving distance and wager relatively
significant amounts per trip but tend to play slots and other video gaming options.
3. Low-stakes/new adopters. Players in this segment have discovered and
accepted gaming as an interesting day or evening diversion when it is close
to home or when traveling. Members of this segment include the growing
cadre of aging baby boomers and their retiree parents, with the time and
money to enjoy the entertainment associated with gaming. Other players in
this segment are younger adults who grew up with computers and playing
video games.23
4. Family vacationers. Owing in part to the development of complementary
tourism attractions such as theme parks, this segment tends to play as an
offshoot of a family vacation.
Through the use of customer loyalty programs, casinos are collecting marketing
data to target each segment and cross-sell related products and services. Gaming has
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become so important as a tourism activity that we will take a closer look at casino
resorts in Chapter 10.
Place Your Bets

The availability of new and expanded gaming opportunities for tourists to try their hands
at “Lady Luck” is likely to continue to grow. Although many present and future gaming
locations do not have the marketing advantages of destinations such as Macao, Monte
Carlo, or Las Vegas, they do have one factor in common with already well-established
and successful operations in places like Hull, Ontario; Atlantic City; and Laughlin,
Nevada: a location within easy driving distance of a large population base. This ease
of access, combined with the social acceptance and novelty of gaming as recreation, has
attracted many first-time players and should continue to generate repeat visits.24
Serving this growing market for locals and tourists who are seeking the excitement
and entertainment of gaming is creating attractive investment and employment oppor-
tunities. Continued growth has brought both positive benefits, as well as concerns. In
one mega-casino destination community, Macao; “[C]ommunity leaders suggest that
although casino gaming does make positive social, economic, and environment contri-
butions to the community, greater effort is needed to minimize its negative social and
environmental consequences” (p. 737).25
In contrast with other segments of the tourism industry that operate on very thin
profit margins, gaming generates margins of up to 35%. Gaming opportunities con-
tinue to grow as visitors can choose from a variety of venues including riverboats,
Indian reservations, destination resort casinos, and the traditional casino meccas of
Las Vegas and Atlantic City. International destinations such as Singapore, Isla De
Margarita off the Venezuelan coast, and Bermuda tempt tourists to gaming tables
from around the world. Table 9.5 shows the diversity and size of gaming venues in the
largest gaming markets in the world.
Most of this growth can be attributed to the attractiveness of slot machines, which
generate over 70% of casino revenues in the United States. The average quarter slot
player feeds $2,500 into machines within a three- to four-hour playing session. Nevada
state law requires that casinos yield a minimum 75% payout and New Jersey requires
83%, but most of the casinos entice players with much higher payouts. New casinos
will frequently offer the highest payouts, often returning 93.4% to players, whereas the
payout may drop to 87% at the more established casinos. These figures represent the
average of all of the slot machines within each casino. Each machine is programmed
to set different yields, so a machine may pay out higher or lower.26 “Today’s comput-
erized slot machines generate thousands of random numbers every second, even when
nobody is playing them. . . . Press a button 1/100th of a second sooner or later, and the
number is different” (p. 3A).19
Table 9.5 Major Casino Markets Based on Gross Gambling Revenue

Location 2012 Gross Revenues ($) (billion)
Macau, China 38.2
Las Vegas, Nevada 6.2
Atlantic City, New Jersey 3.1
Chicago, Illinois/Indiana area 2.2
Detroit, Michigan 1.4
Source: From IBISWorld Industry Report. (March 2016). Global Casinos & Online Gambling; and
American Gaming Association, 2013 State of the States, The AGA Survey of Casino Entertainment, Top 20
U.S. casino markets 2012, Washington, DC.
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Shopping
Shopping may be part of the travel experience or it may be the primary focus of travel.
Shopping is an activity that crosses all market segments. “As long as cities have existed,
the pattern of ‘going into town’ has included a leisure experience, and visiting towns
is an essential part of the tourist market” (p. 12).27 Whereas some visitors, like Marie
in the chapter opener, simply pick up necessities or souvenirs as reminders of their
travels, gifts for friends and relatives, or conversation pieces and evidence,28 others
may travel to specific locations for the primary purpose of shopping. “Nearly nine out
of ten, or 87%, of overseas travelers report that they shopped during their visit to the
United States, according to a study conducted by the U.S. Department of Commerce
and Taubman Centers Inc.”29
“Shop till you drop.” This statement applies to more than just local shop-
pers as more and more malls are turning to tourists in search of new customers
and growth. Shopping malls have increasingly become popular tourist attractions.
Despite “placelessness” (homogenized, modern, synthetic landscapes) assumptions,
shopping malls, and the experiences they facilitate do increasingly matter to those
visiting them.30 For some travelers, a visit to a mega-shopping mall has become rea-
son enough to take a trip, especially as these malls are transforming themselves into
tourist destinations by adding amusement parks and other cultural attractions and
entertainment activities.31
In fact, the number-one tourist attraction in Minnesota is a shopping mall. The
Mall of America in Bloomington, Minnesota, attracts over 43 million visitors a year.
Based on its resounding success as a tourist attraction, plans are underway to more
than double the size of the mall by adding more retail and office space, and entertain-
ment opportunities as well as additional hotel rooms and other services.32
What brings visitors from far and wide to these shopping meccas? It’s more than just
the wide array of retail shopping alternatives. For example, the Mall of America comes
complete with an 18-hole miniature golf course, a 14-screen theater, and 9 nightclubs.
Night markets as popular tourist attractions in many countries. Antonio Gravante/Fotolia
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FYI SHOW ME THE MONEY

Mainland Chinese represent 78% The per capita spending of Chinese cameras. In fact, retailers of jewelry
(or 47 million) of the visitor arrivals to visitors is around $1,100, of which $800 and luxury brand goods reported that
Hong Kong. Shopping is one of the is spent on shopping. What do they 80%–90% of their sales come from
major motivation factors for mainland buy? The top five categories are jewelry mainland visitors.
Chinese to visit Hong Kong, which and watches, clothing, leather (e.g.,
positions itself as a shopping paradise. purses), cosmetics, and electronics and
Source: Based on data from a Statistical Review of Hong Kong Tourism 2011, 2014.
But as successful as the retailing and attraction mix is at the Mall of America, manage-
ment is not counting on its past decisions for future success. Additions like Underwater
World, a 1.2-million-gallon walk-through aquarium, provide just one more reason for
shoppers to plan a trip to experience a unique mall environment.
Other malls, such as Woodfield Mall in Schaumburg, Illinois, and Gurnee Mills
Mall in Gurnee, Illinois, do not rely on added attractions to draw in visitors, just good,
solid shopping opportunities. And does this work? The answer is a definite yes, as
these two malls are Illinois’ number-one and two tourist attractions, drawing in over
28 million visitors a year. Marketing efforts that provide incentives to tour operators
and support from tourist bureaus keep the shoppers coming back in record numbers.
All of these malls pale in comparison to the roster of megamalls that dot the Asian
continent. Nine of the ten largest malls can be found on this continent. Based on leas-
able space, only the West Edmonton Mall can be found in the top ten. The others
are located in China, Malaysia, the Philippines, and Turkey. In addition to shopping,
foodservice, and theaters, these attractions include everything from ski slopes, casinos
and human-made beaches to aquariums, theme parks, spas, hotels, performing arts
venues, and IMAX theaters.
When you think of a trip to the Big Apple you probably imagine visiting its famous
sites, such as the Empire State Building and the Statue of Liberty. But international
visitors think of New York City as a shoppers’ paradise. Shopping is the number-one
activity for overseas visitors to New York City, who account for over 70% of visitor
retail sales.33 In fact, Bloomingdale’s claims that it is the city’s third largest tourist
attraction.34
When it comes to shopping, the motto “build it and they will come” works!
Ontario Mills Mall, located 60 miles east of Los Angeles, California, attracts over 20
million shoppers each year. About 40% of these shoppers are tourists, coming from as
far away as Australia, Hong Kong, Japan, Malaysia, and the Philippines, while tour
buses, approximately 2,000 a year, bring in the not-so-distant tourists. All of this tour-
ist traffic doesn’t just happen by accident. The mall has an office of tourism and mar-
keting staff targeting not only countries but also tour operators, airlines, and other
travel industry representatives.35
The importance of shopping to tourism has become so significant in recent years
that it has given rise to a distinct category of travel with a purpose: shopping tourism.
Although the activity is distinct and growing, there is still some disagreement on how it
should be defined. Even though there may be some disagreement as to a common defi-
nition, there seems to be one common theme; shopping is the main purpose of the trip.
“Studies on the role of shopping in tourist destination choice and experience identify
four types of tourists (i.e., serious shoppers, non-shoppers, arts-and-crafts shoppers,
and not-so-serious shoppers) based on a combination of the importance of shopping in
destination choice and actual participation in shopping activities” (p. S14).36
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Live Entertainment
Visiting heritage and commercial attractions and participating in activities at these
locations could easily be classified as entertainment. However, live entertainment
opportunities fill a special need for travelers and others seeking additional leisure-time
activities. The choices of live entertainment venues can run from the deafening crowds
at hallmark sporting events such as the World Cup or the Super Bowl to the serene
pleasures of the ballet.
Sporting Activities
As highlighted in Chapter 2, sports have drawn visitors to scheduled events from near
and far for thousands of years. Over 3,500 years ago, the Greeks initiated the idea of
staging athletic competitions. The most famous of these competitions were the Olympic
Games held in Olympia. The competitions began as part of their religious festivals and
were staged in towns throughout Greece and Italy. The original competitions in Greece
were organized as contests, but the Romans expanded the idea and staged them as
games for public entertainment. Although the grand athletic competitions and festivals
such as the classical Olympic Games faded and disappeared under Roman rule, the
TOURISM IN ACTION
BUILD IT AND THEY WILL COME
A mall is a mall is a mall. Not so! Imagine a shopping and entertainment paradise that covers over 110 acres and
attracts over 20 million visitors a year. Now, imagine this attraction sitting on the plains of Canada in the city of
Edmonton, Alberta. If you have not visited this “shopping center,” then you have missed seeing and experiencing
one of the biggest malls on Earth—West Edmonton Mall. This mammoth package of tourist services attracts peo-
ple from all over the world in record numbers.
The West Edmonton Mall is not like most other malls: It is massive in size and excites the imagination. Sure,
it has shops, shops, and more shops. In fact, it has more than 800 stores. But the mall has more than shops and
shopping to attract visitors. Almost 40% of the mall’s space is dedicated to attractions as well as a hotel and more
than 100 food outlets, and it is all under one roof. It takes over 15,000 employees to accomplish all of the adminis-
trative and operating duties to keep this giant enterprise ticking.
The Fantasyland Hotel has 355 guest rooms, but 127 of these rooms have been specially “themed” and
decorated to fulfill guests’ desires for travel adventures. When it’s time to take a break from shopping there are
a number of things to do and see, including Galaxyland Amusement Park, World Waterpark, Ice Palace, Europa
(miniature) golf course, Deep Sea Submarine Adventure, Dolphin Lagoon and Sea Life Caverns, a full-scale casino,
a bowling emporium, three cinema complexes, and a replica of one of the ships of Christopher Columbus.
Deciding what to do can be as difficult as deciding what to buy. Viewing the many animal attractions exhibiting
more than 200 species of animals such as dolphins, fish, exotic birds, and a colony of breeding penguins takes you
back to nature. A ride on the Mindbender roller coaster will find you dropping 14 floors at over 70 mph, while the
tranquility of the submarine ride will transport you to exotic coral reefs. Or, you can splash down into the water park
that covers an area the size of five NFL football fields.
The success of West Edmonton Mall and Mall of America as retailing and tourism magnets has set the stage
for even bigger and better venues. Consider the South China Mall in Dongguan, China, with 7.1 million square feet;
the Golden Resources Shopping Mall in Beijing, China, with 6 million square feet; and the SM Mall of Asia in Pasay
City, Philippines, with 4.2 million square feet; and the West Edmonton Mall begins to look small.38 What marketers
at each of these and other megamalls have learned is that tourists are drawn to a shopping experience where they
have the option of staying overnight while enjoying themed attractions, dining, and entertainment options.
Sources: From http://westedmall.com; Carlisle, Tamsin. (1997, March 7). Gamble by the world’s biggest mall pays off. Wall Street
Journal, pp. B1, B18; World’s ten largest shopping malls. (2008, January 30). Forbes.com.
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idea did not go away. Now, mega tourism sporting events such as the Olympics and
FIFA World Cup Soccer that draw athletes and spectators from around the world offer
unique opportunities for host countries and cities. Not only do they gain name recogni-
tion and top-of-the-mind awareness from being in the international media spotlight, but
they also gain the opportunity for cross marketing other tourism venues. Specifically,
“[t]he destination can also be promoted by hosting additional sport and cultural events,
fairs or exhibitions, cultural festivals, or concerts staged in the new multipurpose facili-
ties and congress centers initially constructed for a megaevent” (p. 219).37
The idea of traveling for sports has continued to grow, and it has been suggested
that, “[t]here are three types of sport tourism: (a) active sport tourism where partici-
pants travel to take part in a sport; (b) event sport tourism where participants travel to
watch a sport; and (c) nostalgia sport tourism where participants visit sports-related
attractions such as halls of fame, famous stadia, or sports-themed cruises” (p. 207).39
Modern-day professional and intercollegiate sporting events such as football, soccer,
baseball, basketball, and hockey draw millions of visitors each year to regularly sched-
uled games and playoffs. Special sporting events such as the Super Bowl, the Stanley
Cup Championship, the World Cup, the Pro Rodeo Championship, the Indianapolis
500, and the College World Series, to name just a few, attract international attention
and vast numbers of spectators to host communities each year. These same sports are
often played at local and regional levels and, although they may not draw the same
crowds, they are just as important to the participants and spectators who are attracted
to the excitement of the event. In addition to team sports, a wide array of sporting
activities such as golf, tennis, swimming, hiking, biking, fishing, rock climbing, and
snowboarding/skiing round out the list of alternatives from which travelers can choose.
The National Basketball Association (NBA) was the growth sport of the 1980s,
whereas the National Association for Stock Car Racing, better known as NASCAR,
was the fastest-growing spectator sport in the United States during the 1990s. Which
sport has taken over the title of fastest growing spectator sport of last decade? The
answer is Professional Bull Riders (PBR). From 80,000 during the founding year in
1994, attendance at PBR events has grown into the millions. And, the sport is expand-
ing globally with events in Canada, Mexico, Brazil, and Australia.40,41
The Performing Arts

The performing arts “including plays, musicals, opera, ballet, orchestral concerts,
singers, comedians, dancers, and rock and pop groups” (p. 671),42 have been popular
forms of entertainment for thousands of years. For some destinations, such as Branson,
Missouri, they serve as primary tourism revenue generators; for other destinations,
such as Las Vegas, Nevada and Vienna, Austria, they serve as one more ingredient in
the menu of attractions and entertainment that the area can boast of to interest visitors
to encourage them to extend their stay. Live entertainment has always been a draw for
travelers. For some it may be the opportunity to select from a wide variety of plays
in London’s theater district; for others, it is a chance to attend a concert featuring the
newest entertainment idol. For still others, it can be the opportunity to attend a coun-
try jam or an opera performance.
The classical performing arts include theater (live stage plays, not the movies),
ballet, opera, concerts, and the symphony. Contemporary performing arts include
stand-up and improvisational comedy, rock concerts, and even the band that is play-
ing in your favorite local “hot spot.” Performing arts entertainment, especially the
classical forms, are frequently offered in locations such as concert halls (the Lincoln
Center in New York City, the Athens Concert Hall in Athens, Greece, and the Forbid-
den City Concert Hall in Beijing, China) developed for the express purpose of show-
casing the art form.
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Opera is a popular type of performance in Europe for tourists. Antonio Gravante/Fotolia
Theaters, concert halls, and other large-seating-capacity facilities exist in almost

all cities throughout the world and each, no matter how plain or impressive, serves as
a draw for visitors. Some, such as the Sydney Opera House, are even renowned as
landmarks. Many performing arts companies, whether a repertory acting group
or symphony orchestra, have a season (a few months each year) when they stage
productions and perform for the public. For example, the Desert Chorale is a classical
choir that performs each summer in Santa Fe, adding to the entertainment options
offered in that renowned arts city.
Think for a moment of all the performing arts productions you have enjoyed in
the past year. Which were of the classical form and which would be considered con-
temporary? Maybe you even have experience as a participant in the performing arts?
Band? Chorus? Local theater? If you traveled to enjoy any of these performances you
can call yourself an arts tourist. We will discuss other cultural aspects of tourism in
Chapter 12.
Summary
So many things to do and so little time sums up the delight- ums and zoos to gaming and shopping, and the list goes
ful dilemma travelers face when selecting from the menu of on. Attraction and entertainment alternatives are lim-
attractions and entertainment options. How we choose to ited only by our curiosity, imagination, ingenuity, and
spend our leisure time while traveling can find us seeing resources.
and doing things ranging from the simple to the exotic. Heritage attractions provide a unique two-way win-
Sometimes we look for the comfort and convenience of the dow that allows us to peer into the past for a fleeting
familiar, and at other times we seek new or unusual sights, glimpse of what the future may hold. Whereas heritage
sounds, and activities. attractions meet our needs for self-fulfillment and educa-
The list of leisure-time alternatives from which tion, commercial attractions can transport us to lands of
visitors can choose can be conveniently classified into make-believe for excitement and enjoyment. When live
three broad categories: heritage attractions, commercial entertainment is added to the mix of other attraction and
attractions, and live entertainment. Each of these cate- entertainment opportunities, travelers are faced with a
gories contains even more choices, ranging from muse- broad menu of choices for filling their leisure time.
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Whether our leisure-time choices are simply a sideline decisions that make these operations challenging. They may
along the way or the main reason for a trip, attractions and be operated on either a for-profit or a not-for-profit basis,
entertainment add special spice and memories to our travels. creating the need to look to different funding sources. They
Although the goals of providing visitors with self-fulfillment are typically affected by dramatic shifts in seasonal demand,
and enjoyment may be common threads that tie attractions creating the need for skillful marketing, management, and
and entertainment together, there are a variety of business financial decisions for continued success.
You Decide
The following letter is mailed to leaders of senior citizen
Commission Rate
clubs and organizations by the Pot O’ Gold Casino.
Group Size (per person)
Dear Group Leader:
Great group leaders are hard to find. That is why we 10–15 $3
wanted you to know about our group leader commission 16–25 $4
rates. The Pot O’ Gold Casino offers one of the best leader 26–39 $5
incentive programs in the business. We pay you a commis- 40+ $6
sion based on a minimum five (5)-hour Casino stay.
On your group’s arrival, a Lucky Leprechaun hostess So call our Tour & Travel department at 1-800-POT-
will greet your group, verify group size, collect $20 from GOLD today!
each group member, and give each member a $20 cashback Sincerely,
coupon that can be exchanged for a roll of quarters at the Etta Tsosie
cashiers’ cages. In addition, each member receives a Gold Tour and Travel Coordinator
Funbook, which contains $10 worth of coupons that can Note: Some group leaders donate their commission
be used for food, beverages, keno play, and gift shop dis- payment to their organization; others do not.
counts. We also provide your group with bus transporta- Why does the casino provide a free bus to the casino
tion to the casino! for groups? (Hint: minimum stay) Should this type of mar-
As leader of the group, you will be paid the following keting be allowed by casinos?
commission in cash on your arrival:
Net Tour
To get you started on exploring Internet links for this www.iaapa.org/
chapter, please see www.thedubaimall.com/en
whc.unesco.org/en/35 www.museumsassociation.org/
www.americangaming.org www.london2012.com/
www.discoverhongkong.com/eng/shop www.teaconnect.org
www.nps.gov www.iaee.com
www.bie-paris.org/
1. Why are attractions and entertainment important com- 3. Explain the similarities and differences between heri-
ponents of the tourism industry? tage attractions and commercial attractions.
2. How does seasonality create marketing, management, 4. Why has gaming experienced a surge in growth and
and financial challenges for attraction and entertain- participation?
ment operators? 5. How have shopping malls been turned into tourism
attractions?

1. Ask several people of different ages, occupations, and 2. Prepare a list and a basic description of attraction
both genders to describe their favorite leisure-time and entertainment alternatives that are available in
activities while traveling. Make a list of these activities your area. Limit yourself to ten entries, but be sure
and note the similarities and differences depending on to include at least one location or event from each of
whether they are traveling on business, for pleasure, or the major categories: heritage attractions, commercial
to visit friends and relatives. attractions, and live entertainment venues. After you
M09_COOK1670_06_GE_C09.indd 263 13/05/17 10:42 AM

have prepared your list, fill in the hours of operation, 4. Browse the Internet for locations or organizations
admission or entry fees (if any), services offered, and mentioned under the headings of heritage attractions,
whether operations are for-profit or not-for-profit. commercial attractions, and live entertainment venues
3. Arrange to visit an attraction or entertainment loca- in this chapter (limit your search to one per heading).
tion in your area and schedule an interview with the Describe the information that is available on each site.
manager or local administrator. Your interview should 5. Review the concept of tourist motivation learned in
include questions about the typical marketing, man- Chapter 2. Develop a list of possible motivations for
agement, and financial issues this person faces in com- visiting heritage attractions, commercial attractions,
pleting his or her job duties. and live entertainment venues.
Glossary
Appropriations Funding provided through governmental Museum According to the International Council of
entities. Museums: a non-profit-making, permanent institution,
Attractions Natural locations, objects, or constructed in the service of society and its development, and open
facilities that have a special appeal to both tourists and to the public, which acquires, conserves, researches,
local visitors. communicates, and exhibits, for the purposes of study,
Botanical gardens Gardens dedicated to the preservation, education, and enjoyment, material evidence of humans
display, and study of growing plants. and their environment.
Concessionaires Individuals or companies who have been National monument A landmark, structure, or other
granted the right to provide a particular service such as object of historic or scientific interest.
food service, guide service, sanitation service, or gift shop. National park A large natural place having a wide vari-
Curator Person in charge of a museum. ety of attributes.
Docent A museum guide. National preserve An area in which Congress has per-
Events Special occasions and scheduled activities. mitted continued public hunting, trapping, and oil/gas
Fairs Temporary gathering places for the exhibition of exploration and extraction.
products and services, often accompanied by entertain- National scenic trail A linear parkland.
ment and food and beverage services. Recreational activities Activities and experiences people
Festival A time of celebration, with scheduled activities. pursue for personal enjoyment.
Gross gambling revenues (GGR) The amount wagered Shopping tourism Shopping is the main purpose of the
minus the winnings returned to players. trip.
Heritage attractions Places, structures, and activities with Sport tourism Travel to participate in, watch, or visit
historical and cultural significance. sporting events, venues, and attractions.
Leisure activities Activities performed during one’s free Venue The location of an event or attraction.
time away from work. World Heritage Sites Sites identified for preservation
Limited stakes Legislative limits placed on the dollar amount because of special cultural or heritage interest by the
that can be wagered on any single bet (typically $5). United Nations Educational, Scientific and Cultural
Line of credit An agreement with a bank in which loans Organization (UNESCO).
are automatically made up to an established limit.
References
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4. Sheng, C. W., and Chen, M. C. (2012). A study as an economic development generator. Economic
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11. Milman, A. (2001). The future of the theme park 27. Jansen–Verbeke, M. (1991, March). Leisure shop-
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Gardens, jewel of Florida tourism, to reopen. 106–114.
Denver Post, 5T. 31. Tarlow, P. E., and Muehsam, M. J. (1992,
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faces higher odds. New York Times, E3. 34. Beck, R. (1998, August 19). Shopping malls
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Memphis, TN: Harrah’s Brand Communications. Durango Herald, 3B, 4B.
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M09_COOK1670_06_GE_C09.indd 265 13/05/17 10:42 AM

CHAPTER 10
Destinations
To many people holidays are not voyages of discovery, but a ritual of reassurance.
—Philip Andrew Adams
LEARNING OBJECTIVES
1. Explain how destinations combine many of the 4. Identify the types of services and facilities that
suppliers in the tourism industry. may be included in resort operations.
2. Describe the similarities and differences among 5. Identify the recreational amenities that guests
destination resorts, resort areas/communities, may encounter at resort locations.
and urban tourist destinations. 6. Explain why cruise ships are considered floating
3. Identify the major classifications of destination destination resorts.
resorts.
CHAPTER OUTLINE
Indulging in Destination Macao Casino Resorts
Integrated Resorts
Introduction
From Resorts to Urban Destinations Bright Lights and City Sights
Classifying Destinations Building on Success
Far from the Maddening Crowd Summary
Links to the Past You Decide
Seasonal Delights Net Tour
Spotlight on Sporting Activities Discussion Questions
Snow Holiday Resorts Applying the Concepts
Golf Resorts Glossary
Year-Round Playgrounds References
Spas
Cruise Ships
266
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Chapter 10 ▸ Destinations 267
Indulging in Destination Macao

They said it is the “Monte Carlo of the East” and “Asia’s Las Vegas.” But despite less
than a four-hour flight from Singapore to Macao, Amy and Frank had never stepped
foot onto this tiny Chinese city, which was once a Portuguese colony. While they
knew that modern Macao was famous for its casinos—all 38 of them 1—they were
unaware that Macao was once an important trading port between China, Japan, India,
and Europe or that the Historic Centre of Macao (with its A-Ma Temple, Ruins of St.
Paul’s, and St. Augustine’s Square etc) is on the UNESCO World Heritage List.2
The young couple had scurried through travel magazines to find their getaway for
the perfect honeymoon. They finally took some advice from their friends and decided
to give Macao a try. “It will be great!” claimed Frank as they packed their bags the
day before their flight on Tigerair, the regional low-cost airline. Frank had always been
the positive one. Adventurous but dependable, he was gung ho for any new travel
experiences. Amy, on the other hand, was more cautious; she was the sort who would
just love a cup of tea and chill out in a shopping mall. Both liked to be utterly enter-
tained and had a love for historical cities.
To pamper themselves, Amy had reserved a hotel room within a well-known
integrated resort. The professional front desk greeted them politely with their first
names, checked them in, and then
graciously ushered them into this big
luxurious suite that featured its own
relaxation pool. Within the resort,
there was a huge selection of food
and beverage outlets, a world-class
cineplex, a water-based theme park,
and, of course, a fascinating casino.
“Just exploring every corner of the
resort would take days!” thought
Amy. Since they had just four days,
the couple spent some time at the
resort then hopped on to a shuttle
bus to explore the city—a melting
pot of Portuguese and Chinese cul-
tures. Food became an immediate
attraction as they tried out street
foods like Portuguese egg tarts and
pork chop buns. At Macau Tower,
Frank dared Amy to try out one of
the highest bungee jumps in the
world at 233 meters. And so she
did! “She finally broke out of her
comfort zone and discovered new
things,” Frank thought, delighted.
Traveling was often about exploring
new experiences.
Things got better at night in
Macao as the couple had romantic
dinners in Michelin-starred restau-
rants and fun trying their luck in
d ifferent casinos across the Cotai
Macau Tower at sunset—a view from Taipa, Macao. Photo by Desmond

Lam
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Strip. They also hired a pedicab, a traditional tricycle rickshaw, near the historic Hotel
Lisboa and toured around the Nam Van Lake. There was plenty more to do as Amy
and Frank explored the city in the next few days, visiting places like the Taipa Houses-
Museum and enjoying exquisite shows like the House of Dancing Water at the City of
Dreams. Before leaving Macao, the couple took a captivating shot of the Eiffel Tower
at the Parisian Macao hotel. Next time, they would be ready to embark on a more
adventurous self-discovery in cities around the world!
Introduction
Up to this point, our journey through the tourism industry has introduced you to a
variety of tourism suppliers. Each of these suppliers, from those providing transpor-
tation to those providing entertainment, plays an important role in meeting specific
needs. However, as you will learn in this chapter, when the services of these suppliers
are brought together in one location, we have arrived at another important stop on
our journey—tourist destinations. These destinations can be found in locations rang-
ing from rural retreats to bustling cities.
Destinations can be popular tourist cities and communities like Paris, France;
Vienna, Austria; San Diego, California; and Branson, Missouri. They can be attractive
geographic regions like the Napa Valley in northern California or the Costa del Sol
in Spain. Or they can be the final stop on a trip to visit friends and relatives. In fact,
the final stopping place on any trip can technically be considered a destination, but in
this chapter, we are interested in the locations, communities, properties, and, yes, even
ships that have evolved or been developed primarily to serve the needs of vacationers.
In a hectic world, filled with time pressures and a multitude of demands, people
often want to “escape” daily routines. Destination locations provide the perfect setting
for a brief change of pace or a more extended stay accompanied by a variety of activi-
ties. Destination locations can come in all sizes and shapes and are found almost every-
where, from mountaintop resorts to cruise ships sailing the high seas to artificially
engineered environments such as Dubailand.
As we learned in Chapter 1, geography plays an important role in the development
of tourism activity. People are naturally attracted to areas with pleasing natural beauty
such as the snow-white sands of Destin, Florida, or the majesty of the Austrian Alps.
They are also attracted to areas that have developed as entertainment magnets such as
Las Vegas, Nevada, and Orlando, Florida. And areas with mild climates, such as the
island paradises of the Caribbean and the Canary Islands off the coast of Africa, have
been consistently popular with tourists.
As destinations grow in popularity, so do the services needed to meet visitors’
needs. Airport services are enhanced; accommodations are improved and/or expanded;
restaurants, retail shops, and visitor information services are added to deal with grow-
ing popularity. At some destinations, such as the islands of Hawaii, these services and
facilities have often been added with little planning or consideration for the scenic
beauty of the location. At other destinations, such as Cancun, Mexico, the national
government has developed underutilized natural resources, beautiful beaches, and a
near-perfect climate into a tourist destination.
All of the examples just mentioned have another important destination component
in common: ease of access. Even locations that may not be pristinely beautiful can
develop into popular destinations if they are easily accessible and close to heavily pop-
ulated areas. For example, the gravel beaches on the cold English Channel at Brighton
have become a popular summertime destination. With over 9 million potential visitors
living in London, only a short train or car ride away, it is no wonder that Brighton has
become a vacation playground.
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From Resorts to Urban Destinations

The Romans were the first to enjoy the pleasures of resorts, which were built around
public baths located at natural mineral springs like those found in Bath, England. Vis-
iting these natural hot springs baths and enjoying the relaxing atmosphere of the des-
tination became the primary reason for travel. However, with the fall of the Roman
Empire, travel for pleasure and leisure pursuits disappeared. When travel once again
became safe and practical during the Industrial Revolution, the popularity of visit-
ing resorts for enjoyment and pampering once again spread throughout Europe. With
newfound wealth and leisure time, members of the upper classes sought pleasurable
places outside of the industrialized cities to enjoy the Sun, sea, sand, snow, and more.
The first resorts in America, like their European counterparts (especially those found
in the Czech Republic), were built around spas and focused on health and escape from the
daily rigors of life. Many of these early spas—such as The Greenbrier at White Sulphur
Springs, West Virginia; The Homestead at Hot Springs, Virginia; Ein Bokek near the Dead
Sea; and Karlsbad in the Czech Republic—have since grown into world-class destinations.
Although these early resorts were built around spas and the idea of rest, relaxation, and
rejuvenation, later resorts began to expand by appealing to a broader cross section of mar-
ket segments. To these new resort-goers, recreation became more important than simply a
restful break, and a wider variety of activities was added to the mix of facilities and ser-
vices provided, including retail shops, recreational facilities, and casinos.3
Resorts are now much more than just health spas or locations with a single pur-
pose, catering to a single target segment. Resorts are self-sufficient holiday complexes,
master planned with the ambitious goal of captivating the guests and giving them no
reason to leave the premise. They are places to make social contacts, attend social
occasions, and improve health and fitness. In fact, both resort destinations, such as
Tuscany, Italy, and Vail, Colorado, and destination resorts, such as Disney World and
the Palm Island Resort off the coast of Dubai, now appeal to very diverse market
segments ranging from individuals and families to conventions and corporate meeting
groups. Many of these resorts are marketed as timeshares, as previously discussed. You
can find settings that fit the description of resort destinations in communities and small
towns such as Jackson Hole, Wyoming, as well as in destination locations such as
Mackinac Island, Michigan. Visitors also enjoy self-contained resort properties such
as Marriott’s Tan-Tar-A Resort, Golf Club and Spa at Lake of the Ozarks, Missouri,
and Sheraton’s San Marcos Resort near Phoenix, Arizona. Certain cities around the
world have even developed into urban tourist destinations. Hong Kong, Paris, Rome,
Vienna, San Francisco, San Antonio, Seattle, Singapore, and Vancouver can all claim
to be great destinations that encourage and promote urban tourism. Whatever the
location, tourist destinations are special places that meet guests’ desires for rest, relax-
ation, fun, excitement, and entertainment, even when visits are combined with the
demanding schedules of business and professional meetings.
Classifying Destinations
There are several different types of locations and properties that can be classified as des-
tinations. Although each of these locations may share some of the same activities, facili-
ties, and amenities, the operational issues they face, such as staffing, meeting varying guest
expectations, and managing cash flows, will differ depending on geographic location, size,
markets served, and primary season of operation. What is common with all destinations
is, “a geographical cluster of tourism resources rather than a political barrier” (p. 340).4
Operational issues were probably not on the minds of early resort developers, because
many resorts and destinations were simply developed in locations with natural beauty,
favorable climates, and easy transportation access. In fact, one popular classification system
M10_COOK1670_06_GE_C10.indd 269 05/06/17 11:40 AM

that has been used to describe resorts relies on the historically seasonal operational patterns
that defined the markets of many resorts. Using this system, Northern Hemisphere resorts
can be classified as summer resorts (beach and mountain locations operating Easter through
Labor Day), winter resorts (northern and eastern locations operating November through
April), winter vacation resorts (southern and southwestern locations operating January
through April), and four-season resorts (mountain locations or in mild climates).5
For many resort properties and tourist destinations, the luxury of being open for
operation during only one season is proving to be financially impractical. In today’s
highly competitive economic environment, investors, lenders, and governmental
agencies are no longer willing to commit to financing large capital expenditures for
airports, hotels, conference centers, and other facilities that may be used for only a
few months during the year. As resorts and other tourist destinations have responded
to these financial demands and broadened their market appeal, other classification
approaches have appeared. One such approach relies on identifying the type of trip
being taken. By using trip types, destinations can be conveniently grouped into cat-
egories such as cruise, beach, casino, ski, and summer country.6 Another approach
has relied on broader categories to bring several different types of resorts and desti-
nations under common umbrella classifications. These groupings have resulted in cat-
egories such as integrated resorts, town resorts, and retreat resorts. Integrated resorts
are self-contained developments planned around natural settings or recreational activi-
ties; town resorts are communities that primarily focus on resort activities; and retreat
resorts are small-scale operations located in remote areas.7
Separating and classifying the final stopping points on trips from true destination
locations may seem difficult, but there is help. Figure 10.1 introduces you to many of the
different types of popular tourist destinations that include attractions, entertainment,
FIGURE 10.1 Seasonal delights

Seasonal
Tourist destinations. Mountain resorts
Seaside resorts
Summer resorts
Far from the
Spotlight on
maddening crowd
sporting activities
Hunting and fishing lodges
Retreats and guest ranches Snow holiday resorts
Golf resorts
Degree of Seasonality
Year-round
Links to the Past playgrounds
Heritage Sites Spa resorts
Religious Sites Casino resorts
Integrated resorts
Cruise ships
Bright lights and

city sights
Non-Seasonal Urban destinations
Limited High Level of

Development Level of Commercial Development Development
M10_COOK1670_06_GE_C10.indd 270 05/06/17 11:40 AM

and all of the supporting facilities needed to draw and host visitors. It provides a con-
venient approach to classifying these destinations based on seasonality and level of
commercial development.
As we discussed in Chapter 9, seasonality is frequently a major concern for manag-
ers of attractions. The same is true for destinations. It is obvious that snow resorts in the
Northern Hemisphere will experience the peak of their season during the winter months.
To the contrary, similar resorts in South America see their greatest demand during
June through September. However, seasonality is a more complex concept than simple
weather conditions at destinations. Seasonality is also a factor, because of the weather
conditions and life patterns of people’s hometowns. If you live in the northern part of the
Northern Hemisphere, such as Saskatoon, Saskatchewan, during the winter, you may
dream of a vacation to Florida, the south of Spain, or the Caribbean to escape the cold.
A resident of Phoenix, Arizona, or Houston, Texas, may save up vacation time to travel
to the Rocky Mountains during August, fleeing the sweltering heat or humidity of the
dog days of summer. So, in addition to the direct effect of weather on a destination,
weather has an impact on a destination because of its effect, especially if it is predict-
able, on the travel desires of potential customers in important geographic market areas.
Hawaii has beautiful weather all year long, but its primary season is winter because that
is when potential visitors are most likely to want to travel to Hawaii to escape the cold.
Interestingly, sometimes neither the weather at the destination nor in primary geo-
graphic market areas explains the ebb and flow of demand to the destination. Sometimes it
is simply that one season is traditional for travel to that destination. Look back at Figure 9.2.
Note the peak periods for White House Visitations. What is the single unifying reason for
the ups and downs of visits? School and work vacation periods. Although the weather in
Washington, D.C. is less than ideal during the summer, The White House experiences its
longest sustained peak season during the summer months, because families can travel then.
Using a concept called strategic grouping, we can categorize these destinations
into groups that share similar characteristics. Although all destinations will not easily
fit into a grouping, these groupings provide a useful framework for understanding the
similarities and differences among types of destinations.
The soothing waters of spas served as destinations during the Roman Empire and
continue to attract visitors in the 21st century. Photo by Thomas Sun
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FYI “AT YOUR SERVICE”

Resort destinations excel at delivering to make your stay special. Help them find that special way to make your stay
memorable experiences. During your out. When making reservations or memorable. So let them help you relax,
stay, you are the center of attention. In checking in, don’t be shy about telling enjoy, and celebrate!
the spirit of hospitality, resort employ- resort personnel you are celebrating a
ees are constantly searching for ways special occasion. You’ll be helping them
As you look at the following list, notice that although there may be some overlap
and gray areas between the groups, six groupings emerge when the primary influences
of seasonal weather patterns and the level of investment in commercial facilities are
taken into consideration. We have chosen to label these groups using the following
descriptive phrases:
• Far from the Maddening Crowd
• Links to the Past
• Seasonal Delights
• Spotlight on Sporting Activities
• Year-Round Playgrounds
• Bright Lights and City Sights
As we explore each of these destination groupings, see whether you can think of
specific examples that would fit in each category.
Before we move on, consider the following two brief examples that show how
Figure 10.1 can be used to place different types of destinations into strategic groupings.
Winter snow holiday resorts (Spotlight on Sporting Activities) are obviously affected
by seasonal changes that bring snow, and these locations also require significant com-
mercial investments in ski lifts and snowmaking equipment as well as other mountain
operations facilities such as restaurants, retail shops, and base-area accommodations.
However, mega–cruise ships (Year-Round Playgrounds) are not significantly influenced
by seasons, because they can be moved to take advantage of seasonal changes, yet they
are very expensive to build and require significant capital investment. Now, let us take
a more in-depth look at each of these strategic groups.
Far from the Maddening Crowd

In the upper left-hand corner of Figure 10.1, you will see a group of destinations that are
significantly affected by changes in seasonal weather patterns, yet have little in the way of
commercial development when compared with other destinations. Traveling to destinations
and taking advantage of seasonal weather patterns along with the solitude, beauty, and
bounty of nature have a long history that can be traced back to the Romans, if not before.
You will find two types of destinations in this classification. One includes hunting
and fishing lodges, and the other includes retreats and guest ranches. These destina-
tions have limited levels of commercial development. Development is usually a lodge
with guest rooms and common areas and a few other support buildings, built and
operated to be open only during set time periods each year. For example, dude ranches
in Arizona are open primarily in the winter and spring, whereas fishing lodges in
Alaska and Canada serve visitors during the summer and fall. Or think about the other
extreme—ice, snow, and frigid temperatures. “Imagine a hotel which is built from
scratch each year, a new design, new suites, a brand new reception—in fact, everything
in it is crisp and new. Well, there is such a hotel: the Ice Hotel, situated on the shores of
the Torne River, in the old village of Jukkasjärvi in Swedish Lapland.”8
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Destinations that are grouped in this category face many of the same challenges as
those faced by seasonal attractions, which were discussed in Chapter 9. For example,
managers must hire and train a staff in a very short time and then bring all systems
into operation by opening day each season. Taking care of the basics such as order-
ing supplies, manicuring the grounds, and deep-cleaning guest rooms are routine oper-
ations that can be easily scheduled. However, other tasks can become more difficult
because facilities are often located in out-of-the-way places where there is limited access
to potential employees and other services. Just think about how difficult it might be to
find on short notice a plumber or an electrician for a remote fishing lodge in Manitoba.
Links to the Past

Dropping down the left-hand side of Figure 10.1, we see a collection of destinations
that have been attracting travelers for hundreds, even thousands, of years. The pri-
mary designations of destinations in this category are religious and heritage sites.
These locations may or may not be affected by the seasons. Some are affected by
religious holidays, such as the Vatican City at Easter. Others may be affected by season
of the year. For example, the pyramids of Egypt experience a reduction in visitor traffic
during the scorching summer months. By definition, there is little, if any, recent commer-
cial development at these sites, because they have been classified as heritage locations.
Some, such as the Petra archaeological site in Jordan, the Mnajdra prehistoric temples in
Malta, or the Itum Monastery in Kathmandu, are rapidly succumbing to the ravages of
time and the stresses of Mother Nature.9
Travelers have been embarking on journeys
called pilgrimages to religious sites for centu-
ries. Greeks and Romans traveled to worship
their gods, and Jews still journey to Jerusalem,
Muslims to Mecca, and Hindus to Varanasi.
These well-known, as well as other lesser known,
sites are so popular they attract hundreds of
thousands of pilgrims each year. One popular
pilgrimage site that draws almost half a million
people a year is Santiago de Compostela in Spain.
The focus of this pilgrimage is the central marble
pillar of the Gloria Portico, where St. James is
depicted welcoming the tired pilgrim. This pillar
has been etched with deep finger marks where
untold numbers have touched it over the years.10
The other destinations found in this group-
ing feature primarily heritage attractions. These
sites are dedicated to preserving and passing on
the natural or cultural heritage to future genera-
tions. Several sites worldwide—such as Angkor,
Cambodia; Ruins of St. Paul, Macao; Machu
Picchu, Peru; and Gettysburg, Pennsylvania—
have been recognized for their unique heritage
appeal to travelers. “Heritage tourism, or visit-
ing an area’s historical sites, is the hottest trend
in the travel industry today. Tourists, these
days, want more out of travel than visiting a
park or a mountain range. They want to expe-
Pilgrims to Jerusalem continue to arrive even in times of rience unique places, traditions, and history and
political unrest. Photo by C. E. Yale learn about their roots” (p. 8).11
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FYI HOME OF THE SHAOLIN KUNG FU

Shaolin Temple is located in the Shao- Chinese. The Temple has had a steady tual activities, but also aims to preserve
lin Scenic Area in Mount Song, which tourist flow with 1.5 million visitors and promote cultural heritage as well
is located in central China’s Henan annually since the 1990s, with the as mental and physical well-being-
Province. With a history of 1,500 highest number of visitors recorded at related activities through Chinese med-
years, Shaolin Temple has long been a 100,000 in a day. Shaolin Temple not icine, retreats, and martial art practices.
famous spiritual site for generations of only is regarded as the place for spiri-
As mentioned in Chapter 9, designations as World Heritage Sites (WHSs) are bringing

increasing attention to cultural preservation and the importance of tourism management
practices. For example, WHSs constitute one of the major driving forces in promoting
international tourist arrivals to China. In addition, “cultural WHSs are found to exhibit
a stronger impact on tourist arrivals than natural heritage sites, indicating that the most
influential travel resources in China are historical sites, cultural traditions, and colorful
folk customs which are unique and hard for other countries to copy” (p. 836).12
Seasonal Delights
Moving toward the middle of Figure 10.1, you will find destinations that are still
affected to some degree by seasonal weather patterns but that also have a greater degree
of commercial development. In this strategic grouping you will find mountain, seaside,
and summer resorts that have served through time as traditional destinations for tour-
ists seeking a place to play in the water or escape the heat of summer. In fact, “[t]he
resort hotel in America was traditionally a summer operation which offered, besides a
comfortable room and good food, a seaside or mountain location with scenic, histor-
ical, recreational, or therapeutic advantages” (p. 23).10 Today, these resorts have been
developed not only to take advantage of the best Mother Nature has to offer during the
primary season of operation, but also to attract visitors during other seasons.
Mountain, seaside, and summer resorts may be found in different geographic
locations, but they offer one thing in common—escape from summer’s sweltering heat
and a variety of warm-weather recreational activities. Depending on the location, hik-
ing, swimming, boating, golf, tennis, and just lying in the sun or relaxing in the cool
breezes head the wish list of seasonal activities visitors expect to find at these destina-
tions during their primary operating season. Add other activities such as biking and
horseback riding, and it is easy to see why vacationers are attracted to warm-weather
paradises. As the following example shows, in addition to having a primary operating
season, these destinations are expanding the number and types of activities and facili-
ties to attract visitors during secondary seasons.
The Wisconsin Dells (the “Dells”) provides an excellent example of an area that
began as a summer holiday refuge and developed into a major resort destination.
Visitors still come in large numbers during the summer months to enjoy the natural
beauty and warm-weather attractions that have been developed along this stretch of
the Wisconsin River. However, they also come at other times of the year because of the
commercial development that has taken place in the area.
Packed in a lush “North woods” geographic area of a bit more than 3 by 5 miles
are examples of just about any type of attraction ever established to entertain
tourists. More than 700 amusement parks, beaches, family entertainment centers,
museums, lodgings, restaurants, and other attractions [from golfing and snow
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TOURISM IN ACTION
SANYA, HAINAN ISLAND
Searching for a place in Asia to chill out? Check out Sanya (http://english.sanya.gov.cn), the tropical resort city on Hainan
Island. Dubbed as the “Hawaii of China,” Sanya is a great place to experience Chinese hospitality. It is a popular get-
away, particularly for the northern Chinese, during winter. Famous for its white beaches and gorgeous forest parks,
Sanya is home to many top international hotel brands. Popular attractions include Yalong Bay, Nanshan Temple, Luobi
Cave, and Luhuitou Park.
skiing to horseback riding and sleigh rides] in the area cater to a mix of visitors
ranging from “day-trippers” with children to empty-nest couples spending busy
weeks in local resort accommodations (p. 27).13
Over 3 million visitors a year come to this resort area that is located midway
between Chicago and Minneapolis. The total area encompasses two towns, Wisconsin
Dells and Lake Delton, which have a year-round population of about 3,500 people.
During peak seasons, this population temporarily swells with nearly 6,000 housing
units ranging from bed and breakfasts (B&Bs) to condos and luxury hotels plus camp-
sites and recreational vehicle (RV) parks.
Through active support of the Dells Visitor and Convention Bureau, businesses
in the area reap the benefits of a coordinated marketing campaign and a five-state
employee recruiting effort. Marketing efforts range all the way from responding to
requests for information (almost half a million per year) to creating major promo-
tional campaigns. In addition to the recruiting campaign, joint customer-service semi-
nars (area businesses employ about 6,000 seasonal workers) are conducted to prepare
employees for the seasonal summer surge in visitors. This high level of cooperation
continues to pay off, as can be seen by the astounding number of repeat visitors (78%).
Increased marketing efforts have also attracted additional visitors during the secondary
fall and winter seasons to enjoy the fall colors, hunting, and winter sporting activities.9
Spotlight on Sporting Activities

In the upper right-hand corner of Figure 10.1 is a group of destinations that not only
are affected by seasonal weather patterns but also are highly developed with specific
recreational activities. Destinations in this grouping offer recreational activities, pri-
marily participation sports, such as skiing, golf, and tennis.
Destinations that specialize by offering these activities share two things in com-
mon. First, they are affected by weather patterns that dictate primary operating sea-
sons. For example, although golf can be played year-round in Arizona, winter and
spring are much more attractive than summer, when temperatures soar to well over
100°F for most of the day. Second, these destinations are easily identified by their
high levels of commercial development, such as ski lifts, snowmaking equipment, golf
courses, tennis courts, and other supporting facilities.
Snow Holiday Resorts

Wherever they are located, all snow holiday resorts need the same natural wonders
(steep slopes and snow) to attract winter snow-sports enthusiasts. And, snow is the most
important ingredient for these resorts, as research has shown that early season snowfall
has a significant impact on lift ticket sales.14 Snowmaking is also important for winter
resorts as they seek to supplement low natural snowfall levels and extend the length
of their seasons. However, research has shown that, as might be expected, low natural
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Table 10.1 Factors That Have an Impact on the Survival and Success of Snow Holiday Resorts
Capital intensive, yet produce extreme fluctuations in cash flow to pay for these necessary investments.
Labor intensive and seasonal, resulting in the need to both hire and lay off large groups of service employees.
Weather dependent, resulting in the need to invest in expensive snowmaking equipment and draw heavily on an
area’s water resources.
Sensitive to economic fluctuations, because they are relatively expensive, and thus they must attract consumers
with adequate discretionary income.
Located in remote locations, which creates potential transportation problems for both guests and employees.
snow cover resulted in decreased visitation even with snowmaking. From a financial per-
spective, with the warmer conditions many lower-altitude resorts have been experiencing
in recent years they may not receive enough income due to reduced visitation numbers
to offset their snowmaking costs. While higher-altitude resorts may have a short-term
gain in visitation based on the presence of more natural snow, their operations may also
become uneconomical in the longer term.15 In addition, all of these resorts have the same
operational problems that accompany these snowy remote locations.
The continued problem of unpredictable weather patterns has required large
investments in snowmaking and grooming equipment to start, maintain, and extend
ski seasons. Snowmaking not only costs money but also raises environmental con-
cerns. Snowmaking draws heavily on available water supplies during typically dry
times of the year, and additional grooming requires an increase in exhaust-producing
grooming vehicles to be placed on the mountainside. Furthermore, the demographic
shifts resulting from an aging population are reducing the potential number of skiers.
Efforts to expand existing ski areas are being met with tough opposition from environ-
mental groups, resulting in extensive environmental impact assessments and challenges
to the use of government lands for single-season recreational use.16
Managers at mountain snow holiday resorts, like managers at other seasonal opera-
tions, must cope with seasonal changes to survive and succeed. Table 10.1 provides some
examples of challenges faced in these types of seasonal destinations. Think about seasonal
resorts with which you are familiar. Do they face the same, similar, or different problems?
Snow holiday resorts were originally developed to serve the snowsports public.
Subsequently, they have expanded facilities to appeal to cross-country skiers, snow-
boarders, tobogganers, tubers, and ice skaters. However, to smooth cash flows, appeal
to a broader market, and position themselves as year-round destinations, many tradi-
tional warm-weather activities such as golf and tennis have been added to their product
offerings to appeal to a broader variety of market segments. The increasing popularity
of mountain biking has also improved revenue potential. By offering bikers a “lift” up
the mountain and providing trails for the way down, many traditional snow holiday
resorts have substantially boosted the number of summer visitors.
Golf Resorts
No one is really sure where the game of golf began, but it has been a popular recreational
sporting activity throughout the world for years. The origins of the game may have come
from the Romans, but St. Andrew’s Golf Club in Scotland, which was first used in the 16th
century, is the oldest golf course in the world. The first permanent golf club did not appear
in North America until 1873, when the Royal Montreal Club was founded in Canada.
Golf has continued to grow in popularity throughout the world. It is estimated as
the leading sport in the world in expenditure with more than 60 million active partic-
ipants.17 In the United States alone, there are over 40 million current or potential golf-
ers.18 With all of these golfers, it should be no surprise that golf is an especially attractive
destination amenity, and the development of new golf courses is not keeping up with
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Golf resorts combine solitude with luxury. Photo by Shaen Adey © Dorling Kindersley
demand. In fact, at the current growth rate of participation, it has been estimated that a
minimum of 100 new golf courses must be built each year in the United States to keep up
with growing demand.19 On a national level, both France and Thailand are using afford-
able and accessible golfing destinations as key marketing year-round draws.20,21
The only significant sports activity that meeting planners say influences their decisions
in selecting a resort destination is golf. Why do that meeting planners and others look to
golf when making travel plans? Golf is both a recreational activity and a social event. The
majority of the time spent golfing is more than just for sport. It is also a social activity and
an opportunity to enjoy the natural surroundings. The manicured landscaping and natural
settings provide the perfect environment for socializing and relationship building.
A good golf course does more than present a pretty picture. It is designed and
operated with the players and employees in mind for enjoyable play and ease in main-
tenance. The usual layout is in loops, so that the finishing hole is near the beginning
one. A golf course at a resort location must be designed with the average player in
mind but still be challenging enough to be interesting. It may be pretty to look at, but
if it is too difficult to play, guests will become frustrated and not return.22
Building even a basic golf course is a major financial undertaking, while building
a golf course as part of a world-class resort requires even more land and facilities and
an even bigger financial commitment. For player comfort, a traditional golf course
requires somewhere between 150 and 200 acres of gently sloping land. If the right type
of land is available, the design and construction of a golf course will require a financial
commitment of several millions of dollars to include:
• Parking space for cars;
• A pro shop;
• Restrooms;
• A driving range and practice putting green;
• Golf cart storage;
• Basic food and beverage facilities;
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• Grounds keeping and maintenance facilities; and

• Tees, fairways, hazards, greens, and extra space and buffers for safe play.
In addition to land use and player design considerations, there are also environmen-
tal issues that must be considered. Golf courses may require using 25,000 gallons of
water a day in wet climates, but they may require up to 1,000,000 of gallons of water a
day in very dry climates. Maintaining a lush appearance also requires constant mowing,
and the application of large quantities of fertilizer, herbicides, and pesticides.23
The greens fees generated by golf courses are an important resort revenue center. In
addition, supporting services and facilities such as lessons, driving ranges, cart rentals,
restaurants, and retail shops generate additional cash flows that enhance the financial
attractiveness of golf course operations and increase revenue per round. However, golf
resorts are more than just golf courses and related services. They must also cater to other
guests and golfers when they are not on the links. These needs are being met with the
addition of tennis, swimming, fitness centers, meeting rooms, shopping, dining, and more.
Year-Round Playgrounds
Located in the middle right-hand side of Figure 10.1, you will find a group of destina-
tions that are highly developed commercially and only slightly affected by changes in sea-
sonal weather patterns. What visitors experience at these types of destinations is a complex
blend of facilities and services that you can see listed in Table 10.2. They may be spread
across hundreds of acres or confined to the dimensions of a cruise ship. From a manage-
ment viewpoint, each of these components should be planned with ease of maintenance
and guest service, safety, security, and satisfaction in mind. We will explore each of the
destinations in this group, but we will focus the majority of our attention on cruise ships.
Spas
Technically, the word spa means “mineral spring,” but the use of this term has been
expanded in recent years to describe a place where people go to rejuvenate bodies and
minds. “Spas are entities denoted to enhancing overall well-being through a variety of
professional services that encourage the renewal of mind, body, and spirit.” 24 Guests
can choose to visit either a spa that is part of a complete resort package or a spa resort,
which is designed for the total spa experience (e.g., The Oaks at Ojai, California, or
Lake Austin Spa Resort, Texas). Although they may differ in their operating focus, the
same basic ingredients will be found in either spa type: healthy food, exercise classes,
baths, massages, herbal treatments, and educational training programs. Guests are sur-
rounded by a serene, possibly luxurious environment, and focus on healthier living. As
people face more pressure and have less free time in their life, the need for services that
offer greater relaxation in a shorter time period arises. The lifestyle focus of spas is
in higher demand today due to the benefits of relaxation and pampering. Guests may
choose to visit spa resorts to experience the spa itself, or they may choose to enjoy the
services and other recreational and social activities offered at the resort.
Table 10.2 Components of Resort Developments

Accommodations Conference and meeting facilities
Restaurants and lounges Parking and/or transportation services
Entertainment facilities Storage and maintenance facilities
Retail shopping facilities Public information/administrative facilities
Access to, or, on-property golf and tennis Pools and spas
facilities
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The facilities and services provided through spas are now an important addition
to the entertainment, shopping, and recreational activities found at many resorts.
Spas have proven to be popular with tourists and provide a competitive advantage for
hotels and resorts as demonstrated in a study by the Canadian Tourism Commission
and ISPA (International Spa Association) where they found that, “one-fourth of all
adults have been to a spa, most of those patrons visiting day spas (52%) and 28%
traveling to destination or resort spas” (p. 112).25
Through effective marketing programs and efficient management practices, spas
can be an attractive revenue generator or profit center for resort properties. Spas are
opportunities to generate more room night demand, increase revenues and profits,
increase property value, and enhance guest experience. Treatments such as massages,
body wraps, and facials are the largest sources of revenue for hotel spas. Also contrib-
uting are gains in revenue generated from local membership fees, fitness lessons and
personal training, and the sale of merchandise and clothing. Marketing efforts may be
focused on the individual à la carte user or packaged as an incentive along with other
resort activities. Just as you learned in Chapter 8 that food and beverages can be used
as a marketing tool in resort properties, so, too, can spa services. Building and equip-
ping the spa with customer satisfaction in mind is a must, but it takes more. A staff
well trained to pamper guests ensures that the goal of total customer satisfaction will
be achieved (see Table 10.3).
Cruise Ships
Cruising is booming as record numbers of vacationers select cruise vacations. And why
not? Cruising is fun! Cruises of all durations have been experiencing growth, with the
largest increase recorded in the 2- to 5-day category.26 Very long cruises, 21 or more
Table 10.3 Primary Staffing Areas of a Spa

Areas Sample Job Titles
Managers General Managers
Department Managers (e.g., Hair Department Manager, Nail Department Manager)
Assistant Managers (e.g., Housekeeping Assistant Manager, Massage Assistant Manager)
Service Providers Estheticians may perform skin cleansing, exfoliation, hair removal, facial, and body treatments
Cosmetologists may work with scalp and hair, including haircuts, styling, braiding, chemical
services, and therapeutic treatments. They may also provide temporary hair-removal and
make-up services
Nail technicians offer nail services and hand and foot treatments, including basic massages
Massage therapists focus on the body, mind, and spirit. Massage involves manipulating soft
tissues by using pressure, tension, motion, or vibration
Spa assistants/attendants prepare guests for treatments. Their tasks may include shampooing
the guest, assisting in product preparation, and setting up the equipment
Medical professionals, including dermatologists, dentists, and chiropractors, are often staffed
in spas to provide alternative or conventional medical practices
Fitness personnel includes personal trainers, fitness instructors, nutrition consultants, and
special topic instructors
Support Staff Receptionists, hosts, front desk agents
Housekeepers, locker room attendants, laundry attendants
Appointment and billing specialists
Chefs, servers, and stewards
Source: Based on data from Spa Management: An Introduction, by Wisnom and Capozio, Pearson Education, pp. 95–100, copyright © 2012.
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days in length, are also proving to be very popular. However, seven day itineraries
still remain the most in demand. The Caribbean continues to be the favorite cruising
destination, and the Mediterranean and other European routes are the second most
purchased cruising itineraries. Alaska and the coast of Mexico also remain popular
with cruise passengers. River cruising has gained momentum, especially in Europe,
Asia, and the United States and cruise lines are adding ships at a rapid pace to keep up
with growing demand.
Cruise passengers sail on either one-way or round-trip itineraries. On a one-way itin-
erary they will begin and end their journey to and from different ports. One-way itineraries
are very common on river cruises and Alaskan routes. For example, passengers begin their
journey by flying to Paris where they transfer to a motorcoach traveling to Trier, board a
river barge and cruise the Moselle, Rhine, and Main Rivers to Nuremberg then transfer
to another motorcoach finishing their journey in Prague. Alaskan cruise passengers begin
their inside passage journey by boarding their cruise at ports in either Vancouver, B. C.,
or Seward, Alaska. Seward is just a short train or bus ride away from Anchorage. On a
round-trip itinerary, passengers begin and end their journey from the same port.
Expanded fleets of ships combined with new amenities and effective marketing
efforts have helped to reposition the cruise experience in consumers’ minds as desti-
nation resorts rather than as transportation. Growth in the number of cruises has led
to other changes as cruise line operators continue their efforts to improve service and
expand their marketing reach.
The number of ports and the quality of facilities where passengers may embark and
disembark have grown and improved. Cruise-line companies have also expanded the
number of available cruising options and targeted specific market segments. Because
of the flexibility provided in cruise-line operations, each cruise can be designed to meet
the tastes and needs of a specific cruising audience, with focused activities such as fit-
ness, big band or rock music, and mystery parties.
Cruise ships come in a variety of types and offer different experiences. Cruis-
ing was originally available on classic ocean liners, such as the Queen Mary and the
Queen Elizabeth (1 and 2). But most cruising now takes place on vessels that fit one of
the following categories:27
1. Megaships Most of the ships are extremely large, weighing up to 250,000
gross registered tons (GRT), carrying up to 7,000 passengers or more, and
having 12 or more decks. These ships are virtually floating resorts, usually
offering an array of entertainment and dining options onboard.
2. Midsize ships Luxury ships, older cruise ships, and ships that primarily sail
select regions, for example, Europe and the Mediterranean, accommodate 950
to 2,000 passengers. These ships offer amenities but on a smaller scale than
those featured on the megaships.
3. Small ships Carrying fewer than 950 passengers, these ships offer a more
intimate, less frenzied cruise experience. Most are used for niche markets,
such as education-based, ultraluxury, or adventure cruises.
4. Sailing ships Serving a distinct market segment, masted ships provide passen-
gers with the opportunity to cruise in the original style—using wind power! Fre-
quently, passengers act as part of the crew and aid in the sailing of the vessel.
5. Riverboats and barges An additional style of nostalgia cruising is provided
by the riverboat. In the United States, riverboats designed to look like Mark
Twain paddle wheelers ply the Mississippi, the Missouri, and the Columbia
rivers. In Europe, modern riverboats, built low to the water to glide under
bridges, travel on rivers such as the Danube and the Rhine.
6. Multipurpose ships Some ships, like those that transit the Scandinavian
fjords, carry leisure travelers along with cargo and/or local commuters.
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7. Superyachts These large luxury yachts, also called megayachts, are usu-
ally over 24 meters in length and can reach up to 110 meters. Typical occu-
pancy onboard is approximately 200 passengers, and all cabins are classically
well-appointed suites or estate rooms.
A ship’s size will impact the space ratio or how much space is allocated to each pas-
senger. You can find the space ratio by dividing the GRT of a ship by the number of pas-
sengers it can accommodate. The greater the space ratio, the roomier and less crowded
the ship will feel. Space ratios of 25 to 40 are fairly common on today’s ships.28
The variety of jobs onboard cruise ships is even greater than the types of ships.
Obviously, ships require a crew to guide them efficiently and safely through their itin-
eraries. In addition, cruise ships carry a large staff, over 2,000 for some megaships,
in charge of resort operations. Included among these employees are the hotel man-
ager, purser, shore excursion manager and staff, entertainers, cruise director and cruise
staff, housekeeping staff, executive chef, chief steward and kitchen staff, maitre d’ and
dining room staff, and food and beverage manager and beverage staff. Onboard cruis-
ing operations are supported by large land-based marketing, management, and finance
staff, which means that employment opportunities abound. Securing a position on a
cruise ship can be difficult and these positions are not suited for everyone.
Most ships are registered in developing countries with limited or no labor law pro-
tections. Therefore, most of the crew members also come from developing countries.
Some positions such as cruise director, purser, spa, casino, and medical staff come from
English speaking countries. However, before you decide to work on a cruise ship think
about working long hours, even split shifts, living in cramped quarters below the pas-
senger decks, and being on duty seven days a week for months at a time. You might
want to “test the waters” by working in a land-based position, especially in a seasonal
setting such as Alaska where the cruise lines own and operate lodging, transportation,
Because of their mobility, cruise ships are floating, year-round resorts. Photo by Cathy Hsu
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FIGURE 10.2
Map of cruise ship itin-
erary for MS Maasdam.
Source: Reprinted from
Holland America Cruise Los Angeles
Lines. Ensenada
Zihuatanejo/
Ft. Lauderdale
Lahaina Ixtapa Half Moon Cay
Antigua
Honolulu
Puerto Vallarta Tikal
Acapulco Copán
Kona Santa Cruz Huatulco
Puerto Quetzal Cartagena
Puerto Caldera Panama Canal
and activities. But, with 44 new ships scheduled to be put in service between 2016 and
2022, continuing passenger growth and employment opportunities look promising.29
Cruise ships have an operational advantage over destinations that are anchored
to a specific geographic location and must suffer through changing weather patterns.
Sailing itineraries can be changed through repositioning cruises to take advantage of
the best seasonal patterns and passenger demand anywhere in the world. In addition,
“Cruise ships are an operator’s dream. They run at 95% of capacity or higher, when
hotels are pressed to manage 70%. And cruise passengers, unlike hotel guests, cannot
wander off to eat their dinner elsewhere” (p. 14).30
With the flexibility to meet vacationer and meeting-goer needs, cruise lines are now
targeting many of the same people and groups who previously stayed in traditional
destination resorts. The primary geographic markets for U.S. cruise-line passengers
are California, Florida, New York, Illinois, Pennsylvania, and Texas; and the primary
ports for cruise ships serving U.S. and Canadian markets are located in Miami, New
York, Port Everglades, Los Angeles, San Francisco, Seattle, and Vancouver. Most cruise
ships sailing from these ports go southward to Mexico, the Caribbean, and the Panama
Canal, or northward to Alaska. Figure 10.2 shows a typical cruise ship itinerary.
“From a marketing perspective, getting consumers to take their first cruise is the
key for the market to continue to grow and expand” (p. 343).31 Today, cruise-line
passengers come from a wide range of income levels and ages. However, the fastest
growth in cruisers is in the 25- to 40-year-old and family segments, which has caused
the median age of cruisers to drop from 58 to 43. “At long last, cruises are being
perceived as a ‘hip’ vacation alternative, one that appeals to a group of vacationers
whose diversity is matched only by the cruise industry’s diversity. We have 150 vessels
visiting nearly 2,000 ports, and itineraries ranging in length from three days to three
months—the possibilities are endless.”32 These new and expanding groups of cruisers
are not only selecting cruise ships based on sailing itineraries, activities, and length of
time at sea, but they are also changing the way in which they incorporate cruise ships
into their travel plans. Today, the usual pattern involves a fly–cruise package.
These efforts are proving successful, as cruise lines can offer many of the same
features as, if not more than, a traditional resort (see Figure 10.3) at an inclusive price.
Even the amount of tips for onboard service personnel is clearly communicated to all
guests in information brochures. In fact, there are activities galore. Everything from
rock climbing and golf lessons to ice skating and dancing:
When viewing Figure 10.3, think about the three main areas of a ship: the support
or crew space, the cabins or staterooms, and the public space. The support and crew
spaces will be found in very different locations on the ship. The crew spaces will be
located on the lowest levels of the ship and will include crew cabins (much smaller
than passenger staterooms), dining, and recreation facilities. Other support spaces
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FIGURE 10.3
Exploring Holland America’s MS Maasdam. Source: Reprinted from Holland America Cruise Lines.
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FIGURE 10.3 (Continued)
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include the bridge, engine room, the galley, and storerooms. As a cruise passenger, you
may be able to visit the bridge and the galley on special days, but you will not be able
to view the engine room or crew quarters for safety and privacy reasons.
Moving up the ship from the crew quarters you will find the passenger staterooms.
In every stateroom, you will find varying configurations of berths (beds). Staterooms
are configured with single beds that can be moved together and converted in to queen-
sized beds. Single beds are used to provide the opportunity for maximum passenger
occupancy. With that in mind, many staterooms will also have two upper berths that
can be folded into the wall during the day creating room for four passengers in a cabin.
Public areas will be found on the upper levels. Exploring the ship, passengers can
find a variety of spaces dedicated to their enjoyment including on megaships and many
midsized ships:
• The reception area and front office
• Information and excursion desks
• Dining rooms, specialty restaurants, and pubs
• Shopping
• Health clubs and spa
• Casino
• Movie theater
• Showrooms and lounges
• Photo and art auction galleries
• Pools and activity areas
• Library and card rooms
• Internet center
• Medical facilities
And, this may just be the start as increasing ship sizes and creativity have given rise
to driving ranges, wave pools, skating rinks, and more. Although cruising itineraries can
be commonly found in 2-, 3-, 4-, 7-, and 14-day (or more) lengths, short cruises are prov-
ing to be the most popular and fastest-growing segment of this industry group. First-
time cruisers are especially attracted to shorter cruises to test the waters and sample the
cruising experience before committing to a longer itinerary. In addition, there are other
factors contributing to the popularity of shorter cruises. Families and two-income house-
holds are finding short cruises to be attractive as they try to coordinate busy and often
conflicting schedules that interfere with attempts to take extended vacations. Workers in
pressure-filled jobs are seeking shorter and more frequent stress-relieving breaks to rest,
relax, and recharge.33
Whether it is the inclusive pricing policies, one class of service (everyone receives the
same service no matter how much he or she paid for the cabin), close attention to ser-
vice details, or convenient itineraries, people seem not only to enjoy but also to praise
their cruising experiences. Based on a cruise ship passenger satisfaction survey, 78.6%
of passengers found the trip “enjoyable” and 19.3% found the trip “most enjoyable.”34
Cruises are able to achieve these high levels of satisfaction because they can deliver
high-quality service in addition to effectively combining two important characteristics
of a good trip. First, passengers see and experience new activities, sights, and cultures
through onboard activities and different ports of call. Second, passengers enjoy these
experiences with a feeling of safety, security, and comfort in familiar surroundings,
established schedules, and attentive service.
Once onboard a cruise ship, everyone, no matter how much the passenger paid
for the cruise or where his or her cabin is located, has arrived at his or her destination
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and is treated the same. One class of service and variable pricing levels mean the cruise
lines depend on high occupancy levels. Cruise prices are based on the style and loca-
tion of the stateroom or cabin. Prices will be higher for outside cabins and those cabins
located on upper level decks as well as for larger staterooms and those with balconies.
Prices may also vary depending on when the cruise is booked, with lower rates being
offered well in advance of the cruise date and just before the ship is set to sail.
Cruise lines depend on generating additional high-margin revenues to achieve prof-
itability. Some of these profit centers include spas, beauty salons, gaming, alcoholic bev-
erage service, shopping, photo galleries, and shore excursions, plus pre- and postcruise
packages. Other activities such as excursions to company-owned islands help to control
the destination concept of the cruise and generate additional revenues.35 None of these
goods and services is included in the all-inclusive pricing structure and they all add up,
increasing revenue per cabin and contributing around 20% of each ship’s revenue.36
Trends in cruise-line operations include the building of new ships of all sizes from
yacht-like vessels to superliners, new programs and itineraries, and new onboard facilities.
Yet, even with all of this growth, it is still estimated that less than 10% of the adult pop-
ulation in the United States has cruised, leaving plenty of room for growth. However, the
largest potential for cruise-line growth can be found in China which is expected to triple in
the number of passengers by 2020. Cruise-line companies are purchasing or leasing private
islands for the exclusive use of their passengers, and the addition of free-style dining options
will entice even more cruisers onboard. In addition, new cruise itineraries will bring back
seasoned cruisers. Consider this developing route. “The Great Lakes have all the ingredients
needed for successful cruising: magnificent scenery, waterfront cities with well developed
tourism facilities, and a rich mix of cultural and historical institutions” (p. 13).37
Casino Resorts
Casino resorts constitute a large and growing segment of the tourism industry. Trav-
elers who participate in gaming activities are demanding more when they visit these
resort destinations. They are no longer satisfied with finding gaming and lodging at
their destination; they want a total entertainment experience. And their demands have
been met, first with a wide array of dining and entertainment alternatives and then
with a menu of activities that range all the way from golf to theme and water parks.
As you learned in Chapter 9, gaming locations continue to spread across the United
States, Canada, and the world. What visitors will find at any one location is limited only
by the imaginations and financial resources of the developers. Casino resorts located in
Nevada provide some excellent examples of the diversity that can be found in successful
casino resorts that have broadened their appeal to attract the family market.
At megaresort theme park/casinos such as Wynn and Encore, Bellagio, Mandalay Bay,
the Cosmopolitan, and the Venetian located in Las Vegas (an urban tourism destination
FYI WHAT IS NOT INCLUDED IN CRUISE PRICES?

• Transportation between the passen- beauty salons and spas, beverages matically added for services. Still
ger’s home and port of embarkation, (soft drinks and alcoholic bever- other ships may post guidelines in
although it is included in some packages), specialty restaurants, Internet cruise-line brochures and have them
age prices. access, and shore excursions. explained by cruise directors. As a
• Port taxes and personal expendi- • Tips (gratuities). The amounts will matter of professional respect, it is
tures, including medical expenses, vary. On some ships there is “no tip- important to remember to tip only
casino play, some sports activities, ping” (tips are built into the package hotel personnel, never ship per-
use of special services such as price). On others, the tips are auto- sonnel.
Note: Purchases for goods and services not included in the cruise price can be charged while onboard and then settled with the purser at
the end of the cruise by using a credit or debit card.
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Table 10.4 What Will You Find at the Atlantis Resort?

Location: Paradise Island, Bahamas
Accommodations: 2,300 rooms
Food and beverage facilities: 38 restaurants and lounges
Recreation: Golf course, sports center, spa, Caribbean’s largest casino, snorkeling lagoon,
tennis courts, retail shopping complex, marina, Discovery Channel camp, plus 11
million gallons of water activities including 34-acre Atlantis waterscape, the largest
tropical marine habitat
Meeting facilities: 86,000 square feet, including 3 ballrooms
Source: Atlantis Resort.
itself), complete leisure and entertainment facilities have been created to appeal to our
fantasies and provide a little something for everyone. At other, more out-of-the-way des-
ert locations, such as Players Island in Mesquite, Nevada (which is on the Utah border),
visitors are tempted with spas, golf, tennis, dining, entertainment, gaming, and more to
fill their days and nights. Or high in the Sierra Nevada Mountains, visitors can combine
water sports, golf, and tennis in the summer or skiing in the winter with gaming, dining,
and entertainment. Other locations, as diverse as Foxwoods in Connecticut, Resorts World
Sentosa in Singapore, or The Wyndham Nassau Resort and Crystal Palace Casino in the
Bahamas, provide all the excitement and amenities found at the Las Vegas megaresorts.
Integrated Resorts
Integrated resorts (also called “four-season resorts”) are similar to other tourism des-
tinations we have been studying. They provide many of the same facilities, activities,
and entertainment opportunities that you would expect to find at any resort location.
However, they are different from other destinations because they are located in settings
where they can offer guests the same menu of leisure-time activities on a year-round
basis. For example, see Table 10.4 for all the Atlantis Resort in the Bahamas has to
offer. Even less temperate destinations, such as Baden-Baden in Germany, or arid des-
tinations, such as Dubailand, have developed an array of offerings to meet seasonal
demands while serving a variety of tourist segments.
However, even year-round resorts experience operational problems that result
from fluctuations and spikes in demand. Integrated resorts are designed to serve a
demanding group of vacationers each of whom has his or her own ideas about the
meaning of rest and relaxation. Whereas one guest may describe the perfect four-
season resort destination as a “haven for peace and quiet, calm, rest, and relaxation,”
another guest might describe it as a “giant country club with rooms,” so integrated
resorts must create settings that meet a diversity of needs.
Travelers are now comparing the services and amenities they receive on cruise ships
with what they receive at integrated resorts. Both types of destinations are designed to be
self-contained vacation retreats. As you learned in the section on cruise lines, most services
on a cruise are provided at an inclusive price. Integrated resorts are responding to this
benchmark in hassle-free experiences by instituting strategies such as marketing themselves
as nontipping properties and offering inclusive pricing for the use of spa facilities, golf, and
other activities. Club Med is one of the pioneers in all-inclusive resort operations.
Bright Lights and City Sights

The final destination grouping we will discuss is located in the lower right-hand cor-
ner of Figure 10.1. This group is composed of urban areas that have developed into
unique tourist destinations. “Major urban areas perform important functions within
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the workings of the overall tourism system: for example, they are key “gateways” for
both international and domestic tourists and, as key nodes in the air transport system,
act as staging posts for multi-destination trips” (pp. 1032–1033).38
Most cities will attempt to attract tourists because of the economic benefits these
travelers bring to the local economy. However, travelers do not consider all cities to be
tourist destinations. What is it that sets some large urban areas apart from others and
makes them stand out as special tourist destinations? It is a strong desire on the part
of city planners, civic leaders, and businesses to attract and serve the needs of visitors.
Using a research technique that is popular among marketers, the Canadian Tour-
ism Commission, through the help of focus groups, has identified what tourists con-
sider to be some of the key attributes of a destination city:
For some people it was a feeling, a flavor, or an image, that made the city a beloved
destination. For others it was something more concrete: an ocean or a waterfront
setting, beautiful architecture, great food, a sense of history, or friendly people
that give a city its appeal. . . . For many people it’s the range of interesting things
to see and do that makes a city a great destination (p. 8).39
What we can learn from this research is that tourist destination cities have their own
unique character. Tourists are attracted to these locations because they are special places
to visit and enjoy, and they offer a wide variety of accommodations, attractions, enter-
tainment, restaurants, lounges, and other activities and amenities that tourists desire.
Many cities are tapping the benefits of potential increased tourism traffic by building
major league sports stadiums or large convention centers. The local and visitor traffic
they generate helps bring restaurants, theaters, and excitement back to city centers.
Building on Success
As the opportunities for leisure travel for workers in industrialized countries grow
and the number of mature travelers continues to increase, travel to resorts and other
destinations will continue to grow in popularity. To remain competitive and attract
more guests, these destinations may need to focus on attracting more than one market
segment as well as increasing or improving their service offerings. To meet these needs,
indoor resorts, such as Ocean Dome in Seagaia, Japan, create an endless summer envi-
ronment, whereas Ski Dubai creates a variety of ski terrains in the midst of an arid
desert climate.40
Through market segmentation, resorts are meeting this challenge by developing
packages that appeal to a variety of specific guest segments. At the same time, desti-
nation resorts are focusing efforts on specific segments such as group tour business,
incentive travel, meetings, and conferences. Many resorts are also breaking these focused
markets into smaller segments. For example, a property might focus first on attracting
association meeting business in general and then target members of one association such
as the American Association for Retired Persons. These efforts are generating more year-
round business and leveling out the traditional seasonal fluctuations in cash flows.
The complex task of developing, marketing, and managing tourist destinations
goes well beyond the physical location itself. Other concerns, such as employee hous-
ing and labor availability, capital investment requirements, recreational and attraction
development, infrastructure requirements, social and cultural effects, environmental
impacts, land use, tax receipts, and other public benefits and problems, must be con-
sidered by private developers, citizens, and government officials. Tourist destinations
thrive on positive relationships between residents and visitors, and these relationships
must be encouraged and sustained for future success. We will be exploring these issues
in greater depth in future chapters.
M10_COOK1670_06_GE_C10.indd 288 05/06/17 11:40 AM

Summary
Bringing together all of the components provided by tour- Activities, Year-Round Playgrounds, and Bright Lights and
ism suppliers into one location creates the potential for City Sights.
a tourist destination. Destinations are the final stopping Destinations that are grouped in each of these cate-
points of trips where tourists seek to “escape” their daily gories face similar marketing, management, and financial
routines and enjoy rest, relaxation, recreation, and enter- opportunities and challenges. Some destinations face dra-
tainment. These destinations can be found anywhere in the matic seasonal shifts in demand, but others experience
world and range all the way from quiet and secluded guest more consistent demand throughout the year. Shifting pat-
retreats to those floating resorts we call cruise ships. No terns in demand can affect a variety of decisions, including
matter where they are located or how attractive the desti- marketing plans, staffing patterns, cash flow projections,
nations might be, tourists will not come unless the facilities and capital expenditure plans. Steps are therefore being
and activities they desire are provided. taken at most tourist destinations to attract additional visi-
Spas were the original destination “resorts” built by the tors during less popular time periods.
Romans, but the types of destinations from which travelers Tourist destinations continue to grow in popularity and
can choose today are numerous. Although each destination so do the choices travelers face when selecting their perfect
has its own unique appeal to tourists, destinations often share destination. It can be a fishing lodge, a snow holiday resort, a
many similarities based on seasonal demand and the level of seaside resort, a golf resort, a spa resort, a cruise ship, an urban
commercial development needed to meet guests’ needs. These tourist mecca, or (you fill in the blank). As the choices grow
shared similarities allow us to classify destinations into the and the opportunities for leisure travel increase, tourist desti-
following strategic groups: Far from the Maddening Crowd, nations must focus on meeting a variety of guest needs while
Links to the Past, Seasonal Delights, Spotlight on Sporting continuing to improve service offerings for future success.
You Decide
Cruises are one of the best buys in vacationing today. Most cruise-line employees come from Third World
Prices have remained fairly constant, and the amenities or former Soviet-bloc nations. Although many are college
onboard have improved year after year. And the service is educated, they are unable to find well-paying employment
second to none. Passengers are pampered by employees at in their home countries. Cruise-line personnel agencies are
every turn: by the pool, in the many dining rooms, in the virtually flooded with applicants from around the globe,
casino, and in their cabins, with a steward on call 24 hours from Honduras to Romania. The demand for cruise ship
a day. jobs is high because wages in most nonindustrialized coun-
How can cruise ships afford to provide so much per- tries are so low.
sonal attention and service? One way is by controlling Cruise lines can decide how much to pay employees
labor costs. Nonprofessional cruise employees work 70 because they are not subject to the employment regulations
hours a week for an average starting pay of $2,000 a of industrialized countries such as minimum wages, max-
month. The vast majority of their earnings come from tips, imum working hours, and overtime pay. They are able to
which can add from $1,000 to $2,500 per month to their avoid these regulations by registering their ships abroad in
income. Cruise workers not only work long hours but are countries such as Panama and Liberia. Should cruise lines
also generally at sea on five- to eight-month contracts, be pressured to comply with employment laws in devel-
receiving two days off per month. They do spend six weeks oped countries?
onshore between contracts. Employees, of course, receive
room and board, medical care, and airfare to and from Sources: Based on Allerton, H E. (2003). Crewse. T + D, 57(4),
home between contracts in addition to their pay and tips; 87–88; Keedle, J. (2008). Wish. you were here. Career World,
and benefits are generous by international standards. 36(5), 21–23.
Net Tour
To get you started on exploring Internet links for this www.dubailand.ae
chapter, please see www.experienceispa.com
www.scantours.com/ice_hotel.htm www.cmaa.org/
www.wisdells.com www.clubmed.com
www.cruising.org www.rwsentosa.com/
www.atlantis.com www.shaolin.org.cn/en/index.aspx
M10_COOK1670_06_GE_C10.indd 289 05/06/17 11:40 AM

1. Describe the various tourism supply components that 4. Describe the factors that have an impact on the sur-
must be brought together to create a successful tourist vival and success of a seasonal tourist destination such
destination. as a winter snow holiday resort.
2. What are the major classifications of tourist destina- 5. Why are cruise ships called “floating resorts”?
tions and the similarities and differences among these
classifications? 6. What is it that sets some large urban areas apart from
others and makes them stand out as special tourist
3. Why are tourist destinations attempting to attract
destinations?
more visitors outside of their prime seasons?

1. Select one type of tourist destination that is particu- type of information that is available along with specific
larly interesting to you and learn more about it. Either information on one property.
schedule an interview with an employee or represen- 4. Can your hometown be classified as a tourist desti-
tative of the destination, or search for articles in the nation? Using the information from this chapter as a
library and/or online about that type of destination. guideline, prepare a list of all of the attractions and
Based on the information you obtain, write a short activities that would appeal to visitors. Once you
report discussing important facts you learn from your have collected the information, prepare a one-page
interview or research. flier that highlights the best of what your hometown
2. Select an article from a travel magazine or the travel offers tourists.
section of the newspaper describing two different 5. Of the different types of destinations, which would be
cruise ships and itineraries. Make copies of the articles the most suitable for your family as a vacation spot?
to include with your report describing the similarities Why? Plan a one week itinerary to a specific destina-
and differences between the two vacation options. tion with a list of activities for each member of your
3. Browse the Internet for information about ski resorts family, including both alone time and family time.
in Courchevel (French Alps). Prepare a list showing the
Glossary
Berths Beds on a ship. Pilgrimage Travel to a holy place or shrine.
Cruise director The person who plans and operates pas- Purser A ship official responsible for papers, accounts,
senger entertainment and activities onboard a cruise and the comfort and welfare of passengers.
ship. Resort destinations Communities or areas that contain
Deck The equivalent on a ship to a floor or story of a attractions, entertainment, and supporting facilities
hotel. needed to draw and host tourists.
Destination resorts Properties that are relatively self- Resorts Destination locations that are distinguished by
contained and provide a wide range of recreational and the combination of attractions and amenities for the
other leisure-time activities. express purpose of attracting and serving large numbers
Disembark To go ashore from a ship. of visitors.
Embark To go onboard a ship. Secondary seasons Periods when tourism activities are
Focus group An in-depth interview about a topic among either increasing toward peak levels or declining from
8 to 12 people, with a researcher (called a “modera- peak levels; also called “shoulder seasons.”
tor”) leading the discussion. Ship personnel All individuals responsible for the safety
Galley The kitchen or food preparation area of a ship. and navigation of cruise ships.
Gross registered tons (GRT) A measure of the interior Spa resorts A resort property dedicated to fitness and the
size of a ship determined by volume of public space. development of healthy lifestyles.
Hotel personnel All individuals responsible for the care Space ratio A statistical measure of the GRT of a ship to
and service of cruise ship passengers. the number of passenger it can carry.
Inclusive price A single price for a package of services Staterooms Guest rooms on a ship. Also called cabins.
such as accommodations, food, and activities. Strategic grouping Groups that share common interests.
Megaresort A destination resort containing multiple Urban tourism Tourism that takes place in large cit-
facilities and world-class attractions and entertainment ies, where hotels and other facilities and services have
venues. Each revenue center at these destinations could become an integral part of urban activities.
operate as a separate business venture.
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PART II
Integrated Cases
Flying the Competitive Skies: U.S. Airline Industry
Georgia’s Restaurant Businesses
Taking a Dive
292
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FLYING THE COMPETITIVE SKIES: U.S. AIRLINE INDUSTRY

Dale Krueger and Denise Bartles
According to a Fortune Magazine article entitled “Airlines, Why the Big Boys Won’t
Come Back,” the traditional airline industry (the majors) has been facing major com-
petitive changes that were brought about as a result of the business practices of the dis-
count airlines. For the six major airlines that were established prior to deregulation of
the industry—American, United, Delta, Continental, Northwest and U.S. Airways—the
competition has been so intense (with soft economic conditions) that they have been un-
able to raise prices sufficiently to cover higher fuel costs, labor costs, and security costs.
As a result, the majors have lost market share and the trend apparently has contin-
ued as the discounters, principally Jet Blue, America West, and Southwest, have con-
tinued to increase their market share. The discounters now control 25% of the market.
The question is whether the majors can adapt to the external environmental threats
and the competitive industry environment, or will they continue to lose market share
and eventually go out of business. With the different business models in the airline in-
dustry, the questions become: What is the forecast and what are the possible scenarios
in the airline industry?
Despite the airline industry’s lack of profitability, an editorial in the Washington
Post entitled “Airline Mogul Remains Upbeat,” writer George Will states that Doug
Parker, president of America West Airlines, has remained optimistic. He has attributed
this optimism to America West’s hubs. America West’s hubs in Phoenix and Las Vegas
enjoyed tremendous economic expansion in the last 10 years.
Parker, however, indicated that there are far too many airlines in an industry that
has overcapacity. He suggested that causalities are inevitable, and with the industry
competition, each airline has to put together various strategies to increase market share,
maintain market share, or downsize the airline in an attempt to differentiate its service,
while at the same time avoiding bankruptcies or entering bankruptcies to reorganize.
The Structure of the Airline Industry: Major and Discounter

There are two basic types of operational models used by the airline industry—the hub-
and-spoke and the point-to-point. United, American, Northwest, Continental, Delta, Air
Tran, U.S. Airways, Midwest Airlines, Frontier, and America West operate a hub-and-
spoke system. In the hub-and-spoke system, flights from all over the United States fly
into major hubs where passengers disembark ending their flight, or they take a connect-
ing flight to the city of their choice. This model allows each airline to fly passengers from
smaller cities into the hub and then funnel these passengers to destinations on its own
airline or on a regional carrier airline. The hub-and-spoke model permits airlines, with
the help of the regional carrier (with its smaller aircraft), to serve small cities, which have
insufficient traffic flow to support a major airline. For example, America West, now
U.S. Airways, has operated two hubs, Phoenix and Las Vegas, and with the help of its
regional carrier, Mesa Airlines, it serves many other smaller sized cities in the Western
United States. Delta has hubs in Atlanta, Georgia; Cincinnati, Ohio; South Carolina; and
Utah; Northwest has hubs in Minneapolis, Minnesota; and Detroit, Michigan; United’s
hubs are in Chicago, Illinois; and Denver, Colorado; American’s hubs reside in Chicago,
Illinois; and Dallas, Texas; and Continental’s hubs are located in Newark, New Jersey;
and Cleveland, Ohio. The airlines that use the hub-and-spoke model usually have a vari-
ety of different types of planes; therefore, to service these different types of planes, main-
tenance, training, and inventory costs (plane parts) are more costly because of variety
of aircraft. However, these airlines are able to maintain and increase load factors from
smaller hubs to larger hubs to maximize revenue.
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In contrast to the hub-and-spoke model, the point-to-point model is based on a

transportation system similar to one used by bus companies. Southwest and Jet Blue are
the principal airlines that use this model. Flights start in one city and then proceed to
other cities where some passengers deplane and other passengers remain on the plane
to proceed to the next city. For example, someone might start in Houston, Texas, with
the final destination being Chicago, but rather than a direct flight to Chicago, the pas-
senger may have stops in Oklahoma City and Kansas City before arriving in Chicago.
The benefit of the point-to-point model is the efficiency generated by having aircraft
in flight for longer periods of time and leasing gates at older less costly airports, both
of which lower operating costs. Southwest, for example, flies from Houston, Texas, to
Dallas to Oklahoma City, to Kansas City, Missouri, ending the flight in Chicago.
Point-to-point airlines usually operate only one type of aircraft. Southwest uses
only Boeing 737s, which reduces training costs, maintenance costs, and inventory costs
because only one type and size of craft needs to be serviced. However, the point-to-
point carriers do not fly into smaller cities where there are a limited number of potential
passengers; whereas, the hub-and-spoke airlines service the smaller cities with smaller
aircraft or rely on smaller regional carriers to service their hub-and-spoke model. Both
the hub-and-spoke and point-to-point have different approaches to generating revenue,
but each model has different training and maintenance costs because of the different
aircraft used (see Table I).
To compete with the low-cost airlines and their point-to-point systems, the ma-
jors, and some of the discounters including America West, implemented a code-share
system by which passengers could purchase tickets on two different airlines. This was
convenient for the passenger and reduced transaction costs for the code-share partners.
These airlines maintained their own reservation systems with the code-share capability
and also sold blocks of airline seats to Internet companies, wholesalers, and channel
distributors, such as Orbitz and Travelocity.
Not all airlines perceive this model as beneficial. For example, Southwest does not
code-share with any other airline and maintains its own reservation system. Southwest has
refused to allow Internet companies to sell Southwest seats. This has enabled Southwest
to control costs and more adequately project revenues when compared to other airlines.
In contrast to the discounters, the major airlines were often saddled with debt
obligations, union contracts that guaranteed high salaries and wages to their em-
ployees, and under-funded pension plans. Pricing pressure made it impossible for
the majors to increase the cost of tickets to cover their own costs let alone meet the
Table I Comparison between Southwest and America West

America West Airlines Southwest Airlines
Hub-and-spoke Point-to-point
Three types of aircraft-143 One type of aircraft-388
First class and coach seating Coach seating
Assigned seats No assigned seats
Boarding rear first Boarding first come
Use many on-line reservations systems Use own on-line system
Code-share agreement with other airlines No code sharing
Paid meal service on some flights No meal service
In-flight movies on some flights No in-flight movies
Baggage transfer between airlines No baggage transfer
Overbooked flights receive discount on other No discount for other airline passengers
airlines
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reduced prices of the on-line discounters. Instead, the majors have had to compete
by differentiating their service, such as providing first-class seating and seating
choices in coach.
GOVERNMENT REGULATIONS THAT AFFECT AIRLINES

Historically, the airline industry had been highly regulated and subject to a high
degree of political involvement. The industry was subject to regulations promulgated
by the Department of Labor, Occupational Safety and Health Administration, the
Environmental Protection Agency, the Department of Defense, the Federal Aviation
Administration (FAA), and The Department of Transportation (DOT). The FAA, for
example, could issue regulations affecting flight safety, such as the requirement that
airlines had to install a system to reduce the chance of fuel-tank explosions in Boeing and
Airbus aircraft. The airlines were given a deadline to meet these requirements, generally
with a phase-in-period. The Aviation Transportation Security Act required the airlines to
screen every piece of luggage for explosive devices by 2003. These unfunded mandates
cost the airlines millions of dollars. Failure to comply with the regulations meant that
DOT could revoke an airline’s certificate of public convenience, resulting in a revocation
of its permission to fly. Although the possibility of a government revocation exists, it
remains more of a negotiation factor for the government in regulating the airlines.
Traditionally, the majors had controlled most of the landing slots at a half-dozen inter-
national airports by entering into long-term leases with the airports. This greatly reduced
competition from the discount airlines at major hubs, but the discounters leased less ex-
pensive gates at older national airports, such as Houston’s Hobby and Chicago’s Midway.
After the terrorist attacks of 9/11, national and international transportation in-
terruptions seemed imminent due to possible terrorism and other global instability
variables. To help the airlines, the federal government passed the Emergency Wartime
Supplemental Appropriations insurance programs under the Air Transportation Safety
and System Stabilization Act. This act provided the airlines with cash payments for 9/11
interruption in airline travel, and with the opportunity to secure a government-guaranteed
loan to offset the increased costs for security. These federal government injections of
liquidity helped airlines survive in the short run. The supplemental appropriations ex-
tended only until March 2008, at which time the airline industry had to self-insure.
The additional cost to the airlines of terrorism insurance could not be passed on to pas-
sengers due to the extreme price competition in the industry. Private insurers did not
want to assume liability for unforeseeable catastrophic events. As a result, the airlines’
choice of insurers was limited, which resulted in higher premiums for coverage.
Some airlines, such as America West, were able to secure a government-guaranteed
loan, but the loan agreement contained strict limitations on management prerogatives.
America West borrowed $429 million plus a term loan for $73.2 million, but in return
it was required to maintain $100 million in cash reserves and to prepay the government
loan with the net proceeds of all issuances of debt or equity by its holding company.
Any money derived from asset sales in excess of $20 million in any fiscal year and in-
surance proceeds in excess of $2 million (to the extent such proceeds were not used to
restore or replace the assets from which such proceeds were derived) had to be paid to
the government. A further restriction on airlines that received the governmental loan
was the requirement that the airline had to control labor costs.
In addition to the legislation intended to preserve the airlines, there were unfunded
governmental mandates levied on the airlines. Airlines were subjected to the Aviation
and Transportation Security Act (ATSA). This established a new Transportation
Security Administration within the Department of Homeland Security. ATSA man-
dated that by December 2003, all checked baggage at U.S. airports had to be screened
using explosive detection systems. There were also new requirements for strengthening
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cockpit doors, deploying federal air marshals on board certain flights, improving air-
line crew security training, and expanding the use of criminal background checks of
employees. Implementation of these directives resulted in delays and disruptions to air
travel. Funding was provided by a $2.50 per ticket tax, not to exceed $5.00 per one-
way trip.
There were additional direct fees on carriers. For example, America West’s compli-
ance costs under the requirements of ATSA amounted to $13.2 million. Additionally,
the Environmental Protection Agency had reached an agreement with 11 airlines,
which meant the airlines had to periodically check water quality on flights. Because of
these government regulations, airlines were not able to recover the additional security
costs through increased fares, nor was it possible to predict what security requirements
would be imposed in the future by federal or state regulations. The slow economic
growth limited the airlines’ ability to pass on increased operating costs. These govern-
ment rules and regulations helped restrict the airlines from expanding operations and
revenues and forced most airlines to downsize.
The Travel Industry and Economic Cycles

Historically, business in the travel industry, which includes airlines, hotels, motels,
car rentals, etc., has fluctuated on a seasonal basis with the summer months being
the high traffic periods. Therefore, revenues have been greater in the second and
third quarters because the demand for leisure travel increased as families and indi-
viduals planned vacations. However, travel industry revenues are adversely affected
by specific events, such as airport congestion, weather conditions (hurricanes, etc.),
mechanical problems, and security concerns that result in cancelled flights and de-
lays. Also, the industry is affected by the U.S. economic cycle in terms of recession
and growth. For example, as the U.S. Gross Domestic Product (GDP) increases, so
does the travel industry sales and revenues, and when the U.S. economy falters, travel
industry revenues decline.
From 1991 to 2000, the airlines along with the travel and tourism industries expe-
rienced growth. Historically, the travel and tourism industry grows faster than GDP.
However, during periods of economic expansion, travel and tourism have been ex-
tremely price sensitive. As incomes increased so did the demand for travel.
During recessions, the travel and tourism industry sales fall, but the economic
evidence indicated that the decrease in output and revenue did not fall any more than
the percentage decrease in GDP. Most estimates indicated that the travel and tourism
industry’s share of total output for the total economy had varied between 4% and 6%.
For various sections of the country that rely on the travel industry, such as Phoenix and
Las Vegas, the total output exceeded 6%.
The travel and tourism industry accounted for 3.6% of total U.S. employment and
for 27.7% of the employment in Las Vegas, which had a population of 1,375,765 as
of 2000. The percent of travel-related employment in Phoenix was not far behind Las
Vegas. For example, Phoenix had experienced a population growth of 31.7% since
the l960s from 663,510 to 3,072,149 in the year 2000. Because of population growth
and tourist attractions in Phoenix, and Las Vegas, the importance of the travel and
tourism industry for these regions was significant. As a result, other cities and states
have recognized the economic development potential of the travel industry and have
allocated funds for promoting travel and tourism. However, beginning in 2000, as the
GDP faltered, the travel and tourism industry growth wavered.
For the next five years, economic growth in the United States, although positive,
was not sufficient to eliminate the overcapacity of the industry, and with fuel costs
escalating the airline industry could not pass on the increased operating costs. The
immediate result was significant losses for almost all airlines except for some of the
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discounters such as Jet Blue and Southwest, which either had sufficient cash reserves to
hedge on fuel costs or labor costs lower than the major airlines. By 2006, most airlines
had reduced labor costs and downsized sufficiently, except for Northwest and Delta
which were still in bankruptcy. In 2007, the financial projections for most airlines
indicated a return to profitability assuming stable fuel costs, no recession, and other
external impacts.
Airline Industry after 9/11

With the onset of the U.S. recession in 2001, the airlines’ losses mounted. The terrorist
attack on 9/11 plunged the airlines into more red ink. The fourth quarter of 2001 saw
substantial airline losses. These losses continued into 2002, 2003, 2004, and for some
airlines into 2005. Over these years, the airlines’ cash balances declined significantly.
For example, United Airlines, which was in bankruptcy, reported a $1.4 billion loss in
the second quarter of 2005. In 2004, the current ratio and the quick ratio for the air-
line industry were .8 and .7, respectively, which compares unfavorably with the S&P
500 standard of 1.5 and 1.2.
On July 17, 2005, aviation experts reported that airlines were in desperate
shape. The airlines had been short of cash and had carried a heavy debt load.
For example, the big five Delta, United, Northwest, American, and Continental
incurred billions in debt and with soaring fuel costs the question arose whether the
airlines could stay the course. Even though the industry reduced costs, borrowed
more funds, or sold assets, many other external risk factors impacted the airline
industry (see Table II).
These risks, particularly the social factors, could immediately and adversely affect
the airlines. SARS and the bird flu could shut down airports and quarantine passengers
at airports. Scenarios for this type of possibility already existed.
The soft economic conditions starting in 2000 and 9/11 prohibited the airlines
from showing any substantial improvement in revenues. This revenue problem contin-
ued until the summer of 2003 because of continued terrorist threats, adverse weather
conditions, and the acts of foreign governments. The supply and demand conditions in
the oil industry added to airline costs. From 2001 to 2006, oil prices fluctuated, and
in 2006, they increased to all time highs. Those airlines that had the cash to hedge a
large percentage of their fuel costs were able to decrease the red ink. Southwest Airlines
avoided a loss by hedging 100% of its fuel costs in 2002. Other airlines, particularly
the big five with less cash, had to totally or partially absorb the jet fuel price increases.
The major airlines were projected to lose $5 billion each in 2005, based solely
on the rise in fuel costs. This projection was based on the assumption that oil prices
would return to $40 a barrel. Fuel prices did not return to $40 a barrel; and therefore,
losses were greater than projected. With labor and other costs higher than the dis-
counters, the majors lost money as they continued to match the lower prices offered by
Table II External Airline Risk Factors

Global instability Military presence in Iraq and Afghanistan
Potential or actual terrorist attacks Social risks—SARS and avian flu (bird flu)
Government regulations Insurance costs because of global instability
Interest rate fluctuations Soft economic conditions (GDP)
Fuel price increases Financing availability to fund future business
Industry competition Cyclical affects of the travel-airline industry
Union relations with the industry Competitive practices in the airline industry
Unfunded pension obligations Changes in federal and state laws
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the discounters. Labor costs both as a percentage of total expenses and per available
seat mile was trending down in general, but could vary considerably both among and
between the major and discount airlines. According to a USA Today article entitled,
“Low Fare Airlines are Losing Their Edge,” the spread between these operators was
closing, but in some cases there was still about a two percentage point or more differ-
ence in labor costs as a percentage of total expenses and the labor cost per available
seat mile could amount to $2.00 or more in most cases. United and Continental report-
ed the lowest costs for the majors while ATA and Jet Blue reported the lowest costs
for the discount carriers. It was also interesting to note that Southwest Airlines was an
outlier as it had one of the highest labor expense percentages and one of the highest
labor cost per available seat mile expenses for all airlines. Some of the variation in
labor costs among the airlines may be attributable to union contracts varied based on
hours worked. For example, some of the discount airlines had reached agreements with
their pilots which required the pilots to fly 80 hours per month; whereas, the majors
worked their pilots 50 hours per month per contract. Despite these disparities, the air-
lines benchmarked their expenses on a cost per seat mile.
Because of fuel and labor costs, the majors had been saddled with billions in debt
and a negative $3.2 billion or more in equity. For the airlines, there had been only
two methods for reducing labor costs: negotiate reductions in pay and retirement
benefits with the unions and downsize. The other option was to increase revenues, but
revenue growth had been difficult to achieve in an industry saddled with overcapacity,
consumer price sensitivity, and intense rivalry.
In the past to reduce or eliminate competition, the majors controlled most of the
landing slots at the newer international airports through leases. Therefore, the dis-
counters increased service to the smaller national airports such as Chicago’s Midway
and Houston’s Hobby. To equalize the competition in the last 10 years, the govern-
ment encouraged airports to lease more gates to the discounters in the industry at
the newer airports. As more gates became available, competition at major airports
increased, which placed greater pressure on the majors to reduce costs.
At the same time, the labor unions rejected reductions in labor costs and, in some
instances, asked for greater increases in pay. Southwest Airlines workers, for example,
moved into the upper tier in pay and the flight attendants asked for a 40% increase in
pay. America West settled with their pilots for an 11% increase in pay.
Because of the many governmental restrictions and the airlines’ limited ability
to respond to competitive developments, adverse economic conditions and/or global
instability resulted. This has caused most majors to file for bankruptcy protection:
United, U.S. Airways, Delta, Northwest, ATA, and Air Tran. Bankruptcy enabled these
airlines to reorganize, renegotiate more favorable union contracts and more favorable
airplane leases, while attempting to eliminate unfunded pension plans and overall debt
obligations. In fact, to help the airlines return to profitability, some experts have sug-
gested the Federal Government eliminate the $15 billion in transportation taxes and
costs for the airline industry.
Travel Industry Trends

Despite billions in airline losses due to industry overcapacity and soft demand in the
travel industry, the economic projection for the U.S. economy and overall travel in-
dustry continued to be favorable. The Federal Reserve had a low-interest rate policy
from 2001 until 2004 with some projected increases for 2005 and 2006. In 2000, the
fiscal stimulus from the federal government helped restore economic growth, and the
low rate of inflation promised a healthy economic outlook for the future. As a result,
the U.S. Travel Revenue is projected to grow between 3% and 7% from $193.1 billion
(as related in Table III) in total U.S. travel revenue for years 2002 through 2006. These
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Table III U.S. Travel Revenue

Total U.S. Travel Revenue (U.S. $ and Percent Change)
Year Total Revenue ($) vs. Year Ago (%)
2002 193.1
2003 199.2 3.2
2004 210.2 5.5
2005 225.2 7.1
2006 234.2 4.0
Source: Online Corporate Travel 2001–2003: Market Share, Strategy, Forecasts and
Commentary. (2002, January). PhoCusWright, Inc.
figures included air, car, and hotel, tour, and cruise accommodations, but they did not
include travel-related expenses such as meals and entertainment. The 2002 revenue fig-
ures and the total revenue projections for 2003 through 2006 are illustrated in Table III
at the end of the case. Table III also indicates the size of the total U.S. travel market.
Despite the projected growth in the travel industry, overcapacity in the airline in-
dustry prevented the industry from raising fares except for a small increase of $2 to
$5 in one-way fares to cover the higher fuel costs. Since deregulation, the industry had
been highly competitive and, ironically, instead of immediately increasing prices of
tickets to cover fixed costs, the airline companies sold blocks of airlines tickets at a low
cost to on-line Internet companies, such as Orbitz, Travelocity, Expedia, Hotels.com,
Priceline, and Hotwire. These Internet companies and the airlines developed their own
web-based reservation systems and the Internet provided a marketing outlet. Besides
the airlines, the on-line travel companies also included rental car companies and hotel
chains. In fact, most airlines leased blocks of hotel space to accommodate passengers
when flights were over-booked and provided one-stop shopping, which means the cus-
tomer can book the airline flight, the car rental, and the hotel space at the same time.
This one-stop shopping trend is projected to continue.
Projections indicated that the use of the Internet to book airline travel was expect-
ed to grow by 25% per year. In 2002, 15% of all travel was booked on-line, and by
the end of 2005, it was expected to grow to 30%. If the travel sector had a slow but
steady recovery in the future, it was projected, that within in a few years, 50% of all
bookings would be done on-line with airline websites and on-line travel companies
equally sharing these bookings’ pricing pressures. The competitive pressure from the
on-line discount travel companies required airlines to develop strategies for providing
greater customer service to attract customers.
Airlines continued to attempt to attract frequent fliers. For example, to compete
more effectively and provide customer service, airlines accessed databases of frequent
flyers to promote not only the sale of airline tickets, but also hotel accommodations,
car rentals, cruises, and vacation packages, thereby reducing transaction costs. Other
cost reductions were obtained by using technology, such as the use of scanners for
boarding passes and kiosks for e-ticket check-in. Consumers, as buyers, often chose to
fly or drive based on the price of the airline ticket.
Even with the favorable forecast for the travel industry, the airlines had not in-
dicated whether they could make the necessary structural changes to avoid future
bankruptcy or liquidation. The various opinions circulated in the media add to the
confusion in the industry. Glenn Tilton, president of United Airlines, predicted that
United would emerge from bankruptcy. This occurred in the second quarter of 2006.
However, because United racked up a $1.4 billion second quarter loss for 2005, and
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substantial previous losses, the creditors were expected to receive only 7% of the $30
billion the airline owed. Instead, United Airlines and others, including some airlines
that have consolidated, proposed that creditors receive stock in place of the debt owed.
Bruce Wakefield, president of U.S. Airways, stated, “The merger or buyout by
America West Airlines of U.S. Airways has allowed the merged airlines to become a
stronger airline with U.S. Airways strong on the east coast and America West on the west
coast.” In 2005, Delta needed more than $5 billion in cuts to avoid bankruptcy, and it
planned layoffs and service cuts despite the $425 million cash infusion from the sale of
South East Air. Despite these announcements, Clayton Securities analyst Ray Neidi said
he expected the airline to file bankruptcy “some time after Labor Day in 2005,” and
that prediction came true. Delta and Northwest Airlines filed and entered bankruptcy
in 2005. With Northwest machinists on strike and not agreeing to the proposed cuts,
the question continued to surface about whether Northwest Airlines and Delta can re-
structure and survive. Delta started with merging the discount airline Song into the main
airline structure. For Northwest, outsourcing the machinists’ jobs and flight attendants
jobs helped the bottom line, assuming the flight attendants do not strike.
The demand for airline travel slowly increased from 2002 to 2006, which en-
abled the airlines to increase prices by 10.3% in first quarter of 2006, compared to
first quarter of 2005, to cover fuel costs and other escalating costs, such as security.
However, when considering Michael Porter’s Five Forces Model, these price increases
and time delays because of security screening encouraged customers to find substitute
methods of travel. Traveling by car between cities regionally became more economical.
However, if the price increases do not decrease airline demand, then suppliers and buy-
ers in the airline industry benefit.
Airline Suppliers and Buyers

Until 2006, the unprofitable airline companies adversely affected the supplier power,
buyer power, and barriers to entry within the industry. Creditors (buyers of aircraft)
and the manufacturers (suppliers) have a vested interest in the success of airline compa-
nies. To insure potential buyers for aircraft and insure creditors have received payment
for the leased aircraft, the creditors (lessors) and manufacturers continued to supply
funds for airlines to stay in business.
For example, it was reported that General Electric and Airbus provided funds for
U.S. Airways and America West to consolidate. By keeping the major airlines flying,
these creditors (lessors), such as General Electric and Morgan Stanley, have avoided
substantial losses and avoided being stuck with many unused aircraft as each airline
reorganizes. At the same time, these agreements have helped an industry remain in
competitive turmoil.
The two principal manufacturers and suppliers of aircraft, Airbus and Boeing, lost
business since 9/11 and the travel industry only recently returned to the same level of
business prior to 9/11. Boeing, for example, lost sales because of 9/11, and in addi-
tion, it has trailed Airbus the last four years in the sale of new aircraft. All the while,
Boeing’s bread and butter airplane, the 737, accounted for less than 50% of its reve-
nue. In competition with Boeing, the larger Airbus was built to carry more passengers
and was claimed to be more fuel-efficient because of the increased size of the aircraft
and additional load availability.
However, Boeing entered into a game-saving strategy by developing the Dreamliner.
This 787 aircraft sold for $120 million. The advantage of this aircraft was that it was built
mostly of plastic composites. The plastics have been proven to be lighter and stronger than
aluminum, making the aircraft more fuel-efficient, with fewer parts. The production func-
tion became simpler and more efficient than the production of the older aluminum aircraft.
Because of the economic uncertainty in the airline industry, the market for newer
aircraft continued to remain uncertain. For example, Airbus has not sold many jumbo
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jets that carry 500 to 600 passengers, despite the fact that Airbus is subsidized by some
of the European governments. This subsidization has made Airbus more price competi-
tive than Boeing. As a result of government subsidies for Airbus, the United States filed
an unfair competitive complaint with the World Trade Organization.
The competitive rivalry in the airline industry left the industry with sizable losses,
cash shortages, and forced Northwest, Delta, U.S. Airways, and United into bankruptcy.
When one airline eliminated a route or downsized, another airline jumped into the
void, which raised the question per Porter’s model as to whether the major airlines
can restructure and return to profitability. In the airline industry, barriers to entry are
weak to moderate with the intense competitive rivalry, with uncontrollable threats
from external risk factors, and with any number of possible scenarios among the dif-
ferent business models, all of which makes forecasting difficult for each airline within
an industry where it is difficult to analyze and to predict the future. Can the majors
survive, maintain their position, downsize, consolidate, and recover?
Bibliography
Adams, Mariyln. (2005, September 8). United reorganization plan projects Chapter 11
exit by Feb 1, 2006. USA Today, 2B.
Air Transportation Safety and System Stabilization Act of 2001, Pub. L. No.107-42.
115, Stat. 230. 49 USC 44302 (April 2003).
Air Transportation Stabilization Board Report, Department of Treasury, December 28,
2001. Available at: http://ustreas.gov/press/release/po890.htm (accessed 2003,
October 22).
Airport security still weak in areas terrorists likely to exploit Congress told. (2003,
October 17). USA Today. Available at: http://www.usatoday.com/travel/
news/2003/10/17-airport-security.htm (accessed 2003, October 17).
Aviation and Transportation Security Act of 11-19-01. Available at: http://
www.house.gov/transportation/, http://tsa.gov/interweb/asset/library/
Aviation_and_Transportation_Security/.
Creswell, Julie. (2004, April 19). Beset by airbus and rocked by scandal, the aircraft
maker turns to new ceo-the pentagon-for help. Fortune, 91–108.
Crutsinger, Martin. (2004, October 28). Fed sees expanding economy. News St. Joseph
News Press, St. Joseph, MO, D3.
DeLollis, Barbara. (2005, September 8). Delta plan layoffs, service cuts, jet sales, USA
Today, 2B.
DeLollis, Barbara. (2005, August 26). Northwest considers making temp workers per-
manent. USA Today, 1B.
Dodge, Robert. (2005, July 17). Airlines still in desperate shape, experts say. St Joseph
News Press, St. Joseph, MO, F3.
Foss, Brad. (2005, August 11). Airlines facing fuel shortages. St. Joseph News Press,
St. Joseph, MO, D3.
Grinstein, Gerald. (2005, July 27). Northwest airline nears bankruptcy. Available at:
http://www.msnbc.com/business/news/2005/7/27/05 (accessed 2005, July 27).
Holmes, Stanley. (2005, June 20). A plastic dream machine. Business Week, 32–35.
Mattern, Hal. (2003, August 12). America West to battle big carriers. USA Today.
Available at: http://www.usatoday.com/travel/news/2003/08/12_amwert.htm (ac-
cessed 2003, October 17).
Neidl, Ray. (2005, August 15). Delta shares fall to all-time low amid bankruptcy fears.
Available at: http://www.usatoday.com/business/news p1 (accessed 2005, July 27).
Race for first place. (2004, July). Plane Talk, 3, 7.
Reed, Dan. (2004, July 14). Low-fare airlines may be losing their edge. USA Today,
B1, B2.
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Reed, Dan. (2005, July 29). United racks up $1.4B loss. USA Today, 13B.
Tully, Shawn. (2004, June 14). Why the big boys won’t come back. Fortune, 101–104.
Will, George. (2004, June 3). Airline mogul remains upbeat. St. Joseph News Press, A6.
Yu, Roger. (2006, July 7). Airfares soar as planes fill up. USA Today, 7D.
This case was prepared by Dale Krueger and Denise Bartles, both from Missouri Western State University,
and is intended to be used as a basis for class discussion. The views represented here are those of the case
authors and do not necessarily reflect the views of the society for case research. Authors’ views are based
on their professional judgment. Presented to and accepted by the society for case research. Adapted from
Flying the Competitive Skies: U.S. Airline Industry, by Dale Krueger and Denise Bartles, Annual Advance in
Business Cases. Used with permission from Society of Case Research.
GEORGIA’S RESTAURANT BUSINESSES

Sambhavi Lakshminarayanan
“I could just wring their necks!” muttered Georgia to herself as she trudged in the chilly
and windy aftermath of a snow storm to her restaurant, Upside Down. Yet another crisis
at the recently opened store had made it necessary for her to rush there on a Saturday
morning. Her mood only worsened as she accidentally stepped into a puddle of icy water
gathered at the street corner. Georgia would much rather have been at home with her
children making their breakfast and taking them for swimming lessons, but she had no
choice other than to go. The people incurring her wrath were both the employees at
Upside Down and the partners who co-owned the restaurant with Georgia.
IT Professional to Restaurateur
Georgia’s parents were typical immigrants who had come over from the “old country.”
They had worked hard to ensure a better future for their children, of whom Georgia
was the oldest. Georgia went on to obtain a college degree in Computer Science. In defi-
ance of her father’s strictures to adhere to their cultural norms (daughters stay at home
until they are married), she then obtained a job and left home. In the face of parental
disapproval, Georgia’s brother, Stephen, supported her and even moved in with her in
a show of solidarity. Eventually Georgia married one of her classmates from college.
In 1988, they moved to a small town upstate where both were employed as computer
software professionals in a large multinational firm. Her husband Michael worked as a
software programmer and Georgia worked in quality assurance and de-bugging code.
In 1995, Stephen brought a business idea to Georgia and Michael. He proposed
that they take over a restaurant in a major metropolitan city. Stephen had established
himself there as both a real estate developer and a restaurant owner. While he himself
was not interested in taking on a new business at that time, he felt it had great poten-
tial. Georgia and Michael also felt it was time to make a move. They had enjoyed their
work immensely and were happy with how well they were treated as employees at the
firm, but it was the beginning of the outsourcing trend at their company and the future
was uncertain for IT professionals there. They decided to take the plunge and become
entrepreneurs; that was how “Food Station” opened that same year in the city.
In the beginning, Georgia and Michael had to work extremely hard to establish
Food Station. The neighborhood was not well developed; for instance, construction of
the road in front seemed to go on forever. They persisted and built the business up, cus-
tomer by customer. Georgia recalled the first Christmas when she brought her infant
daughter to the restaurant and spent the entire night mailing out holiday cards to cus-
tomers. Many customers stopped by later to thank Georgia and mention that they had
never received such a card before from a local business. Similarly, for Thanksgiving,
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regular customers were given “thank you” cards instead of the check. Such special
marketing touches, along with a large and moderately priced menu, ensured a reliable
group of regular customers for Food Station. One customer even ate three meals a day
at the restaurant for several years.
Although it was a big switch in careers, Georgia and Michael both enjoyed the
experience of running their own business very much. Georgia has always been a people-
oriented person and Michael liked the sense of control he had. They even put their skills
from their prior jobs to good use. For instance, as early as 1996, Georgia analyzed their
customers’ behaviors and maintained a list of addresses of regular customers in an excel
file. By 2004, at a time when few restaurants that size had an electronic order-taking
system, Michael had installed one at Food Station and trained all staff on using it.
Over time, the neighborhood around Food Station improved dramatically
and became affluent, trendy, and upscale. However, Food Station did not make
major changes to either the menu or prices. The restaurant remained popular
with not only older residents but also gained new customer segments, such as
tourists and professionals working in the area. Some celebrities who lived in the
area became regulars, apparently appreciating an opportunity to dine in a low-
key manner with their family.
Things Go Upside Down

In mid-2007, Stephen came by with a new business proposition for Georgia and
Michael. He had come across a distressed restaurant and proposed that they enter into
a partnership with four others, including himself, to take it over. Stephen was very
persuasive and tried to convince them that the partners would contribute both money
and expertise to the enterprise. Initially, Georgia was reluctant since she had not had
business interactions with the other partners. At the same time, the idea was intriguing
and interesting. She also felt compelled to support her brother in his business plans.
Georgia was confident that she had the expertise to run another enterprise like
Food Station. It was possible with planning, time, and effort; that a management team
could be put in place at Food Station, so that it could be run with only a light touch
from the owners. The catch was Georgia was not sure that she wanted to make a full-
scale commitment to grow another business at this stage of her life. However, after due
discussion and deliberation, Georgia finally agreed to the proposal for the partnership
with the understanding that it would only be a part-time commitment for her.
At the time the partners purchased the restaurant, it was in bad shape. The interior
was run-down, dull, and uninspired, the staff was unmotivated, the menu looked tired,
and there was no steady clientele to sustain the business. However, Georgia agreed
with the other partners that the business had a lot of promise and potential. A main
reason for such optimism was the presence of a thriving and busy neighborhood, with
plenty of offices. There was also a fairly large and well-known college almost directly
across the street. A mix of residential apartment buildings and smaller retail stores was
scattered in the surrounding blocks. A little further away, although still within walking
and reachable distance, was a major train station with attendant hotels and tourist
traffic. Another reason for confidence in the venture was that Georgia and many other
partners had experience in the industry.
It was apparent that the restaurant would need rework before it could deliver its
potential. Its previous lack of a good reputation and state of disrepair were impedi-
ments to success in its current state. Georgia’s partners, who contributed to the initial
investment, decided it required a complete renovation and wanted to reposition it as
a bar-cum-restaurant. Although not completely convinced that it was the best plan,
Georgia agreed. The restaurant was shut for many months, as the interior was gutted
and redone, and a complete bar was outfitted in the interior.
M10_COOK1670_06_GE_C10.indd 303 05/06/17 11:40 AM

The renovation process took about eight months to be completed to all the part-
ners’ satisfaction. Michael then chose a new name for the store. In 2008, the restau-
rant reopened in a quiet way, as “Upside Down.” There was reason to be optimistic
when it reopened; the redesigned interior was extremely pleasant with artistic touches
and appealing earth tones, the bar was well designed and located in the middle of the
restaurant, and the neighborhood had a promising mix of potential customers.
However, from the start, Upside Down was unable to capitalize on these advantag-
es. The reasons were both strategic and operational. There was unresolved confusion
between the partners about how to position Upside Down—should it present itself as
a family restaurant, a quasi-professionals eatery, or a late night bar hangout? Each
one of these had a potential customer pool. A persistent concern was whether any one
such niche would be large enough to sustain the business and help it grow. Being very
narrowly defined might cut out certain groups from the mix. The partners tried to bal-
ance all these different customer needs and requirements by having both a bar and an
extensive menu, offering eclectic items as well as traditional, comfort food, with a wide
range of pricing. Then it seemed that in trying to be all things to all people, there was a
danger that Upside Down was not being especially attractive to any of them.
Another serious issue was that of staffing. As a restaurant, having a good staff
was critical to its success. However, the restaurant business is notorious for turnover
and it appeared that Upside Down did not escape that curse, indeed having it worse
than many others. One of the initial partners was a chef/manager, Johnny, who had
been recommended by one of the partners. Within a short time of reopening, it be-
came clear that he was not up to the task of running the restaurant. Stephen recom-
mended that he be terminated from the job and the partnership, and that was done.
Since then Georgia had to fill in as intermittent manager, as many employees were
hired and fired as chief chefs or managers. There was also churn in other positions
such as wait staff and bartender. One announcement for a bartender position drew
about 800 responses, but barely a handful of them were qualified and passed muster
in other respects.
For Georgia, one irritating problem was that she was soon pushed into the role of
the chief decision-maker and emergency manager of Upside Down. Soon after opening,
the restaurant was faced with a series of operational issues, such as: a bartender found
drinking on the job one day, the chef insisting on making his own dish rather than
the one listed on the menu, and a sudden visit by a neighborhood magazine to write a
review. All these situations needed immediate decisions and action, and there seemed
to be nobody other than Georgia to pick up that slack. That state of affairs continued,
hence her trek to the restaurant on a blustery Saturday morning.
The more serious and nagging concern on Georgia’s mind, however, was not about
the operational challenges. It was about the status and future of the partnership.
Family, Friend, or Partner?

In running Food Station, Georgia was used to complete control in making all levels of
decisions. She and her husband were co-owners; they worked in complete harmony
and with a unified vision.
However, the partnership at Upside Down was a completely different experience.
Each of the partners appeared to have a different vision and wildly varying levels of
commitment, among themselves, and even for the same person over time. In the be-
ginning, there was considerable enthusiasm and each partner made the required initial
financial investment readily. Over time there was erosion in their quality of commit-
ment and involvement. Although ready to proffer expert opinions and directives, no-
body else seemed ready to contribute in more tangible ways. The responsibility for the
business enterprise fell on Georgia and Michael.
M10_COOK1670_06_GE_C10.indd 304 05/06/17 11:40 AM

The initial partnership consisted of six people—Stephen, Georgia, Michael, Bernard,

Malcolm, and Johnny. When the partnership was formed, there was an initial (unwritten)
understanding that all partners would be contributing equally in terms of money and their
time involvement to the enterprise. The exception was Johnny, who was only expected
to contribute his time and effort. As mentioned, that did not work out, due to differences
between Johnny and the other partners as to the type and quantity of work he contributed.
Stephen was the driving force in forming the partnership: Georgia and Michael
were his family; Bernard and Malcolm were his business acquaintances. Stephen was a
dynamic and charismatic businessman, who had set very high goals for himself as an
entrepreneur. Although he had extensive hands-on experience in running a restaurant
of exactly the same sort as Upside Down, his personal focus was on building the real
estate side of his business portfolio. That took up a lot of his energy, and he was simply
not able to put time into Upside Down. On occasion, he did try to visit and “set right”
what he felt were errors, and on one memorable instance, even dismissed a manager
from afar, while he was travelling abroad. His involvement in Upside Down was spo-
radic, although he expected his recommendations to be carried out immediately, since
he viewed himself as both tough and knowledgeable in the business.
Malcolm was the owner of a restaurant very similar to Upside Down, located not
too far from it. His restaurant was well-established and successful. Malcolm gave first
importance to running his own restaurant and viewed his involvement in Upside Down
as that of a silent partner. Even when he was aware of the immediate urgency of some-
one needing to step in for Upside Down, he did not volunteer to do so. Malcolm was
known to Stephen since they belonged to the same community and industry.
Bernard was not only a business acquaintance but also partner with Stephen in
other business enterprises. He had little prior experience in the food industry and
his primary focus, like Stephen’s, was also on real estate. Bernard was different from
the rest of the partners, in that he belonged to a different ethnic community and was
also considerably younger. Indeed he had recently got married and had an infant son.
Although Bernard did not have direct industry experience, many of the issues at Upside
Down simply required general management decisions which he could have performed
with ease. However, Bernard proved resistant to taking on any of those tasks and often
cited other (more important) demands on his time.
Georgia and Michael had experience in running exactly the kind of business that
Upside Down was. However, their first restaurant, Food Station, could not be left un-
tended. Initially, Michael took on some of the fire fighting at Upside Down, but soon
they mutually agreed that he needed to be present at Food Station.
So it was left to Georgia to tend to Upside Down. Apart from the teething prob-
lems common to any new business, the situation was complicated by the unpredictable
involvement of partners. Stephen and Malcolm would weigh in with top-level, strategic
viewpoints and even decisions that Bernard often went along with. All this was done
without much thought to actual impacts, implementation details, and follow through.
One example was that of installing the bar. A critical factor in the successful running of
a bar is a bartender. There had been at least five different bartenders in as many months
at Upside Down. One of them was an attractive woman, who was competent and per-
sonable. Stephen decided that she should be elevated to the position of manager, based
on her personality. It turned out that her skills as a manager were abysmal. The staff
rebelled and she had to be let go. Some bartenders had an inflated expectation of how
much money they could make, that was not in tune with where Upside Down was in its
growth stage, and they left on their own accord. Finally, the decision to have a bar was
not supported by a concerted marketing effort in that direction either.
Indeed, the marketing of Upside Down was confusing to both customers and em-
ployees. Each partner appeared to have different ideas on what approach to follow and
there was no unified strategy. This began with the most basic issue of the menu; the
M10_COOK1670_06_GE_C10.indd 305 05/06/17 11:40 AM

conflicting opinions of the partners resulted in inclusion of both “old world” dishes as
well as contemporary, trendy, American ones in the list of offerings. Advertising was
aimed at distinctly different groups in different ways—these groups included tourists,
students, blue-collar workers, young professionals, and families in the area. However,
money and time constraints often acted as brakes for repeat advertising toward any
one target. For example, in targeting tourists, Georgia distributed coupons and menus
to hotel doormen in the area, but nobody had the time to revisit the hotels, so that it
turned out to be a one-time effort.
The major operational challenge for Upside Down was that of reliable manage-
ment. Due to its hours of operation, there was a need for a day and a night manager.
One manager, who seemed quite competent, somehow rubbed Stephen the wrong way,
and was the one who was dismissed long distance. A day manager had been working
out well for a while, although some of the staff complained about him. However, he
did not want to take on an evening shift, which was the more lucrative period for the
restaurant. The staff itself was barely capable in terms of skill, competence, and ex-
pertise. They were sufficient to keep the restaurant afloat in its current position, but
certainly not in enabling its growth.
Georgia felt that although she had been pushed into a position of taking the lead
on occasion, it was not one of leadership. The partners, other than Michael, did not
hesitate in calling, and indeed relying, on her to solve all kinds of issues at all times.
At various times, Georgia had handled everything from designing the menu, settling
staff conflicts, processing resumes and interviewing applicants, designing marketing
programs, to talking to the bank about finances. However, the partners were not will-
ing to cede control to her on strategic and major decisional issues. They also did not
respond to Georgia’s requests to pitch in with help on operational issues. Not that
they were not polite about it, but it seemed that everyone else always had a convenient
reason for why they could not be there at Upside Down. The partners seemed content
to direct from a distance, with an implicit understanding that Georgia would do all
of the heavy lifting of implementation. Since the partners were all known to Georgia
through social and familial connections, she hesitated to counter their suggestions and
decisions, or to demand more of them.
Georgia felt strongly that she should have formal control and real leadership, but cul-
ture and personality exerted a strong pull on her not to demand it. While entrepreneurship
levels were extremely high in Georgia’s community, not many women were involved ac-
tively in the family businesses. Even fewer, almost none, were active owners or in formal
leadership positions. In terms of personality, Georgia was a very emotionally mature per-
son; in dealing with others, she expected them, mostly in vain, to act in a similar manner.
Finally, being the eldest in the family and female, she perceived herself in a care-giving
role. All this led to her taking a gentle, persuasive approach rather than a tough and
confrontational one. Lately, Georgia was wondering if that approach was effective at all.
The biggest and most worrisome concern for Georgia and Michael was the increas-
ing reluctance of the other partners to inject any more capital into the business; it ap-
peared that they both were the only ones willing to do so. Even as the other partners
agreed that the business had potential, they seemed more and more reluctant to put in
time and money. For Georgia and Michael, it became even more important that Food
Station do well, since a percentage of the profit from there was being funneled to Upside
Down. Georgia was also concerned that she was spending altogether too much time at
Upside Down, to the detriment of both her “own” business as well as her family.
This case was prepared and is intended to be used as a basis for class discussion. The views represented here
are those of the case author and do not necessarily reflect the views of the Society for Case Research. The
views are based on personal judgment. Adapted from Georgia’s Restaurant Businesses, by Sambhavi Laksh-
minarayanan, 2010 Annual Advance in Business Cases. Used with permission from Society of Case Research.
M10_COOK1670_06_GE_C10.indd 306 05/06/17 11:40 AM

TAKING A DIVE
Suzanne Wilhelm, Reed McKnight, Roy A. Cook
Roger was brooding, and the more he thought about the problems of the last two
weeks, the angrier he became. There had been one problem after another, and the
worst part was that no one seemed to care! Not the resort, the travel agency, nor the
car rental company! Worse yet, as far as Roger was concerned, he had been lied to.
Blowing off steam and commiserating with Harrison, they mulled over their options—
everything from poison pen letters to web postings to legal actions. In the midst of their
venting, they both got a laugh or two out of how this saga began.
An Unlikely Friendship
The situation began when Roger was forced to share a tiny office with Harrison’s wife,
Sheena. Although they both resented being crammed into one seemingly impossible
small workplace, they were determined to get along. To their surprise, they found that
they shared a common interest in tropical islands, and they found themselves talking
about vacationing with their spouses on one of these romantic tropical paradises as a
way of easing their office space strains.
A Dream Vacation
The four of them decided to make their dreams a reality. For Roger and his wife Julie,
this would be their fourth trip to their favorite island for scuba diving and they had
recommended staying at their usual resort. Traveling to the Caribbean was always an
adventure, but this resort was safe, had always delivered excellent service, and had
always been responsive to any of their requests or concerns.
But Sheena and Harrison wanted something nicer. They wanted a resort with more
of a beach to play on for their daughter who was accompanying them. From their
Internet searches they thought that a nearby resort, Ultimate Scuba, which was consis-
tently rated highly in scuba diving publications, would better suit their needs.
Having acquaintances who had vacationed there the year before, Roger confirmed
that Ultimate Scuba should meet everyone’s needs. The decision to change resorts was
made easier since Roger and Julie had also been to Ultimate Scuba on a previous trip
and enjoyed a nice dinner at the resort’s romantic ocean front restaurant. Although
a bit more expensive, it offered more of a beach, upscale accommodations, a good
restaurant, and a great reputation for scuba diving.
As repeat customers at their usual resort, Roger had used a travel agent for their
first trip, but had booked their trips directly with the resort for the last two. But having
never dealt with Ultimate Scuba, Roger agreed with Harrison to book their vacation
through a well-known Florida travel agency, Tropical Dive. They both agreed that
using a travel agency would provide them with a sense of security. As experienced trav-
elers, both of them knew how important a travel agent could be in effective handling
of the unexpected when in another country. As a primary booking agent for Ultimate
Scuba, Tropical Dive had what looked like perfect packages to meet their needs.
Storm Warnings
After dreaming, fantasizing, planning, and booking, it was finally happening. The trip
down to Bonaire and Ultimate Scuba had gone without a hitch. They only had to
change planes once, in Puerto Rico. And, on the final leg of the journey, the plane
was almost empty, just the five of them and one other couple. At 11:00 p.m. on New
Year’s Eve, they landed on the Caribbean island of Bonaire, just 50 miles north of the
M10_COOK1670_06_GE_C10.indd 307 05/06/17 11:40 AM

Venezuelan coast. Bonaire was one of the world’s premiere wind surfing, snorkeling,
and scuba diving destinations.
As they completed their guest registration cards at the hotel desk, the clock struck
midnight and a majestic fireworks display began to fill the night sky over the shore of
their beach front resort. What a magical ending to a long day that began at 4:00 a.m.
the previous morning. However, things started going downhill from there.
As Roger and Julie prepared to call it a night, Julie complained that a cold she
had been nursing was really starting to bother her. She felt like the start of a perfect
vacation was beginning to unravel and she became a little emotional. She was afraid
that her cold would ruin their vacation. Roger sympathized with her, but told her not
to worry about ruining their trip. Tropical Dive had said they could downgrade their
packages and receive a refund if they decided to reduce the number of boat dives on
their trip. He reminded her of how much fun they had snorkeling years ago, before
they even learned to dive. In the worst case, if her head cold didn’t get better, they
would just give up the diving and have a great time snorkeling.
Storm Clouds on the Horizon

After a very short night’s sleep, it was time to get up and attend the mandatory morn-
ing orientation meeting required of all divers. Roger and Julie drug themselves out of
bed, dressed, and went to grab a quick breakfast with Sheena and Harrison before the
meeting. However, once they arrived for the orientation, they were told that, due to the
small number of new divers at the resort and because it was New Year’s Day, manage-
ment had rescheduled orientation for 1:00 p.m. Roger was surprised that they had not
been informed, but decided to see what was required to reduce the number of dives in
their package. Karen, the employee at the orientation desk, told them that she couldn’t
help them with that and they would have to talk to someone in management, but there
wouldn’t be anyone there until 12:30 p.m. Roger asked who would he need to talk
with in management and was told to talk to Brett, head of dive operations.
Later that day, Roger found Brett and explained about Julie’s head cold, her inabili-
ty to dive, and the necessity to reduce the number of dives in their package. Brett replied
that he couldn’t help them because all changes have to be approved by the office. Again,
Roger asked who would he need to talk with in the office and was told Lucinda. Roger
headed over to the office and asked to see Lucinda to change their dive package. He was
told that she wasn’t working that day, but would be back the next day.
The Clouds Roll In

That night, Roger, Julie, Harrison, and Sheena met for dinner at the resort’s romantic
ocean front restaurant. Upon returning to their cabana, Julie asked Roger why he had
messed up her clothes in the closet. He said that he hadn’t touched them, and at that
point, they noticed the open window. They immediately called to Harrison and Sheena
who were lounging on the patio and asked them to check to see if anything was amiss in
their room. After a quick inventory, both couples realized that they had been victims of
a burglary. Fortunately, each couples’ losses were only a couple hundred dollars. It could
have been much worse since there was a lot of expensive scuba gear in their rooms.
Roger and Harrison went immediately to the resort front office to report the
break-in and their losses. The front desk clerk seemed genuinely unconcerned, but after
pressing her to do something, she reluctantly agreed to call both resort security and the
police. Based on her apparent indifference, they were worried that the resort had no
intention of alerting other guests that there was a burglary problem. So Roger took it
upon himself and started making the rounds, going to notify other guests to take extra
precaution. At his first stop, the guest next door said his son had had $200 stolen two
M10_COOK1670_06_GE_C10.indd 308 05/06/17 11:40 AM

days earlier. And at other rooms, guests said that they had heard through the grapevine
that there was a problem. Apparently theft had been a common problem at the resort.
Roger felt like he was starting to understand why the resort staff had not informed
them of this problem when they had arrived, and he felt even more victimized.
More than an hour later, the resort’s security guard arrived at their cabana. He
expressed no sympathy and wasted no time in directing their attention to the resort’s
inch-thick welcome manual in which it was clearly stated that it was the guests’
responsibility to secure their possessions or place them in the resort’s lock box for safe
keeping. An hour after that, the island police showed up and reluctantly filled out a
police report and gave a half-hearted promise to get back to them with the results of
their investigation.
The Storm Arrives

Both couples were ready to get on with their vacation plans. They were, after all, in
paradise. Julie’s head cold was still bothering her, but all Roger needed to do was talk
with Lucinda about changing their dive package. However, when he caught up with
Lucinda, she told him that she couldn’t change their dive package; he would have to
talk to management. When he asked who that would be, he was once again told Brett.
Roger told Lucinda that when he had talked to Brett the day before, he was told he
would need to speak with her. Lucinda apologized, but maintained that she could not
make any changes without Brett’s approval. Roger was beginning to feel like he was
getting the proverbial run-around.
Feeling frustrated and a little angry, Roger headed off once again to see Brett and
told him that he had talked to Lucinda who said that he would have to approve any
changes to their dive package. Brett denied that he had the authority to make any
changes and reiterated that only the front office could make changes and Roger would
need to talk to Lucinda. Once again Roger, now more exasperated than ever, headed
back to Lucinda’s office and told her that Brett still said that only she could make
changes.
Lucinda called Brett, but when he picked up the phone, the conversation quickly changed
to Dutch, a language Roger neither spoke nor understood. After hanging up, Lucinda told
Roger that Brett said it was OK to change from the 12-dive package to the 6-dive package,
or even a no-dive package if Julie’s head cold prevented them from diving. But if Julie got
better and they ended up diving more than six times, they would be charged for the extra
dives at a higher individual dive rate. Roger, after having been given the run-around previ-
ously, restated what Lucinda had said to verify that that he didn’t have to decide that day.
Lucinda again said, “No, you just have to let us know before you begin diving.” Reassured,
Roger said he would get back with her if and when there was a change with Julie’s cold.
The Forecast Changes

Julie’s cold persisted and they were unable to dive; the days passed slowly for Roger
and Julie. On the following Monday morning, an entire week had gone by since they
had arrived and Julie couldn’t wait for Roger to wake up. Her cold was almost gone
and she could clear her ears, a requirement to be able to dive safely. Finally, now that
Julie could begin diving, Roger returned to talk to Lucinda.
Roger told Lucinda that Julie’s cold was better and they believed that she was going
to be able to start diving that day. Julie had gone down to the dive shop to get her weight
belt and to do a short orientation dive at the hotel dock to be sure that she could clear her
ears. If she could clear her ears, they wanted to start diving immediately. Due to the fact
that they had little time left before flying home, they would not be able to complete the
12-dive package and wanted to reduce it to 6 boat dives. Lucinda reassured him, saying
that the change was fine, just to let her know before they made their first boat dive.
M10_COOK1670_06_GE_C10.indd 309 05/06/17 11:40 AM

The Storm Returns

Roger and Julie were rested and finally ready to begin enjoying one of their favor-
ite sports and the reason for this vacation, scuba diving. However, there were still
some details that needed to be finalized to get their vacation plans back on track.
Roger began, once again, to try to track down the decision-makers at the resort.
Roger found Lucinda and told her that the orientation had gone OK and it looked
like Julie would be able to dive. He also told her that the 8:30 and 11:15 boats were
already full, so they had signed up for the last dive boat leaving at 2:30. As requested,
they were letting her know before they made their first dive so they could formalize the
change in their package from 12 to 6 dives.
To Roger’s dismay, Lucinda acted surprised, wanting to know why they wanted
to change. After all, they had bought a 12-boat dive package. Roger explained that the
change was necessary because they couldn’t make 12 dives. They could only dive once
that day, and after that there were only three days left before they had to fly home. As
Lucinda knew, diving was not permitted the day before flying, so they could only do
five or maybe six dives at the most.
Lucinda looked puzzled as she said that they had had 10 days to make the 12 dives.
Roger thought, oh no, here we go again. Are they ever going to live up to their
commitment? Roger reminded her that Julie had a bad cold when they arrived and
couldn’t dive at all the first week they were there. Diving with a cold can permanently
injure a diver. Lucinda told him that she knew that, but she couldn’t change their
dive package. At first, Roger thought she was kidding him, but she insisted that only
management could make changes. Roger reminded her that the week before Brett had
said it was OK to make the change. Lucinda then said that Brett was unable to authorize
changes that only Patty could. Roger asked to speak to Patty, only to be told that it was
her day off and he would have to wait until the next morning to speak with her.
The Storm Intensifies

Feeling even more frustrated, Roger continued to seek answers or better yet, someone
who was authorized to make decisions. Roger met with Patty and asked her if Lucinda
had explained their problem and the necessity of changing their dive package. Patty
admitted that she had but, since they had booked their trip through Tropical Dive in
Miami, only Tropical Dive could approve changes. She went on to say that she had
already emailed Heidi at Tropical Dive and that a reply was expected shortly. Patty
didn’t expect there to be any problem.
Later that night, Roger and Julie returned to their cabana earlier than expected;
their night dive had just been canceled by the resort because too few divers had signed
up for the dive. Harrison and Sheena were in the living room, relaxing. Harrison told
them that he had some good news and some bad news for them. The good news was that
they had enjoyed a spectacular day. The bad news was that Patty left a message that
she had heard from Tropical Dive and they wouldn’t reduce their dive package. At
first, Roger thought Harrison was just teasing him, but then realized he was not. Roger
said he would talk to Patty again the next day.
No Letup in Sight
Although the couples had joked about their problems, especially the seemingly never
ending attempts to change Roger and Julie’s dive package, they tried to make the best
of things. Maybe today they would finally get some answers. Roger went to meet with
Patty about their dive package, only to be told by Lucinda that she wasn’t in the office.
Roger told her that Patty had left a message saying that Tropical Dive denied the re-
quest to change their dive package and he didn’t understand why.
M10_COOK1670_06_GE_C10.indd 310 05/06/17 11:40 AM

Lucinda offered to look at their package to see if she could discover why. She then
told him that he had booked a 12-dive package and any changes had to be made before
the package began. Roger reminded her that he had been in the office the morning after
arriving to make changes before they had even put a toe in the water. He also remind-
ed her that it wasn’t until Monday this week that they were finally able to make their
first dive. Lucinda agreed, but informed him that no change could be made as they had
already started the package.
Roger questioned how the package could have started before they had started div-
ing. Lucinda told him that the package began when he got the key to their room and
no changes could be made once they were at the resort. Roger couldn’t believe that
they would not let them make a change that would save them just a couple of hundred
dollars on a hotel/dive package that cost several thousand dollars especially since Julie
couldn’t dive without risking her health. To add insult to injury, even if they wanted to
dive once Julie got better, they couldn’t. The dive boats were booked to capacity every
day except one and, on that day, the dive had been cancelled.
Lucinda continued to explain that it wasn’t the resort that would not let them
change; it was Tropical Dive. Since he had been told repeatedly that he could make
the change, Roger wondered if any of the resort personnel had authority to act for
Tropical Dive. Roger asked, if that were the case, why they were not told a week ago
that they needed to deal with Tropical Dive. If only they had been told, they could have
called or emailed Tropical Dive for assistance in making the change. Lucinda had no
response.
No Change in the Forecast

It was 5:00 a.m. on departure day and the problems and frustrations continued. After
missing out on most of their diving opportunities, it was time to go home. Nothing
seemed to be going as planned or promised. Roger returned the rental car to Island
Rental Car and waited as the attendant inspected it. He told Roger that the car looked
fine and the gas tank was full so there would not be any additional charges. As Roger
started to leave, the attendant told him he still had to pay the rental charges.
Roger was dumbfounded; he knew the car had already been paid for as it was in-
cluded in the package they purchased from Tropical Dive. The attendant apologized, but
insisted that he had no record of that, and Roger would have to pay or they could just
wait until Tropical Dive opened and straighten it out. Roger said he couldn’t wait; their
plane would leave before Tropical Dive opened. Roger and Harrison had previously tried
to change their departure time to a later flight, but all of the other flights that day were
full. The attendant offered to put the rental charges on the credit card Roger had given
for security when he picked up the car. Having no alternative, Roger reluctantly agreed.
Back Home and Still No Sunshine

After returning home from Bonaire, Roger asked for Harrison’s assistance to resolve
the problems they had on the trip with their travel agent. They called Heidi at Tropical
Dive on a speaker phone to discuss the charges for missed dives and the rental car.
They also wanted Heidi to know about the run-arounds they had gotten and the secu-
rity problems they experienced at the resort.
Roger reminded Heidi of what they had discussed before booking the trip because
her agency’s packages were a bit different from other agencies he had used in the past.
She had told Roger that, if he had doubts about booking the 12-dive package as op-
posed to the 6-dive package, not to worry. The 12-dive package would save them
money on the total number of dives and they could change to the 6-dive package if
they decided to do less boat diving. Upon their arrival, Ultimate Scuba had also assured
M10_COOK1670_06_GE_C10.indd 311 05/06/17 11:40 AM

them that they could make the change at any time as long as it was prior to their first
boat dive. He explained to Heidi that Julie had a head cold when they arrived, so they
were unable to dive. He went on to say that both Harrison and he tried many times to
make the change to a 6-dive package, but all they got was a run around.
Heidi told them that she couldn’t believe that she told them that they could make
changes, but it didn’t matter because they never made refunds on any tour packages.
Harrison insisted that she had told them they could make the change. He also told her
that they had to pay for the rental car and he knew that had been included in the pack-
age. Heidi asked if she could put them on hold while she reviewed their file.
While they waited, Roger and Harrison discussed their options. If satisfactory rem-
edies were not offered, what should they do? They knew they would each write a letter
of complaint, but to whom? Harrison suggested possible legal action, but just like the
letters of complaint, to whom would these be directed? Or could they even take legal
action? One thing was for sure—they were determined to get some satisfaction.
This case was prepared and is intended to be used as a basis for class discussion. The views represented
here are those of the case author and do not necessarily reflect the views of the Society for Case Research.
The views are based on personal judgment. Adapted from Taking a Dive, by Roy Cook, Suzanne Wilhelm,
and Reed McKnight, 2005 Annual Advance in Business Cases. Used with permission from Society of Case
Research.
M10_COOK1670_06_GE_C10.indd 312 05/06/17 11:40 AM

PART
3
The Tourism
Environment
CHAPTERS
11 Economic and Political Impacts of Tourism
12 Environmental and Social/Cultural Impacts of T

ourism
13 Sustaining Tourism’s Benefits
14 The Future of T
ourism
EXTERNAL
ENVIRONMENT
TOURISM SERVICE
SUPPLIERS
TOURISM
PROMOTERS Accommo-
dations
Destinations
Travel
Tour agents
operators
TRAVELERS
Incentive
and
Tourist Meeting
boards planners
marketing
Transportation
Technology
M11A_COOK1670_06_GE_PT3.indd 313 16/05/17 2:46 PM

CHAPTER 11
Economic and Political
Impacts of T
ourism
Nobody goes there anymore; it’s too crowded.
—Yogi Berra
LEARNING OBJECTIVES
1. Identify and explain the economic benefits of 5. List the various organizations that help promote
tourism. tourism.
2. Identify and explain the potential economic 6. Explain how convention centers are used to
problems that can be created by tourism. generate tourism in a city and how these centers
3. Explain why tourism revenues are considered an can be funded and managed.
export. 7. Explain the steps involved in tourism planning.
4. Explain what is meant by the tourism multiplier 8. Explain why tourism development can lead to
concept. political tugs of war.
CHAPTER OUTLINE
Chamber Director Headache #1456 Public/Private Organizations
Introduction Chambers of Commerce and Convention and
Visitors Bureaus
Looking to Tourism for Economic Growth Convention Centers
and Vitality
Comparative Advantage Tourism Planning
Tourism and Foreign Exchange Rates Political “Tugs of War” over Tourism
The Multiplier Concept Summary
Realizing Tourism’s Export Potential You Decide
What Goes Around Comes Around
Tracking the Impact of Tourism Expenditures Net Tour
Economic Impact Analysis Discussion Questions
Other Economic Impacts Applying the Concepts
Potential Problems in Tourism-Based Economies Glossary
Tourism in the Economic Balance
References
Tourism and Politics
The Role of Government in Tourism
Tourism Promotion Agencies
314

Chapter 11 ▸ Economic and Political Impacts of Tourism 315
Chamber Director Headache #1456

Maria Sandoval, Executive Director of the Ocotillo, Arizona, Chamber of Commerce,
tossed two extra-strength pain relievers into her mouth and washed them down with
the lukewarm remains of her second cup of coffee. This was a day she had been dread-
ing. Today, six advertising agencies were making presentations to the Board of Direc-
tors of the Chamber of Commerce in attempts to receive the $450,000 annual contract
for promoting Ocotillo as a tourism destination.
The selection of which six agencies (out of the 45 that had submitted written
proposals) had been a political nightmare. Most citizens, businesspeople, and
government officials agreed that tourism was an economic engine for the local
economy and that the Chamber of Commerce, in its role as development leader,
had an obligation to coordinate tourism promotion. However, many locals,
including the editor of the Ocotillo Times, believed the promotion contract should
be granted to a local advertising agency. Maria had received dozens of calls from
irate citizens when they learned that four of the six finalist firms were from outside
the Ocotillo area.
Maria sympathized with these dissenters. If the agency selection goal was to gen-
erate additional jobs, revenue, and tax dollars within the community, it would be easy
to understand why folks would feel that local companies should receive the marketing
business. But still, if the primary goal was to bring an increasing number of tourists
to the region, and get them to stay longer in the area, shouldn’t the most capable firm
receive the contract, no matter where that firm was located?
Maria sighed and gathered up the proposals from the six finalist advertising
agencies, placing them in her briefcase. It was going to be a long day and a tough
decision. But that’s why they pay me the big bucks; she chuckled, as she hurried off
to the meeting.
The tourist resort town, Varadero, Cuba welcomes the world. Photo by Ron Hilliard

316 Part 3 ▸ The Tourism Environment
Introduction
How important is tourism to your county or geographic area? What percentage of the
jobs available in your city or town is in tourism-related businesses? How much tax
revenue is raised through taxes paid by tourists on goods and services they purchase
during their visits to your region? Whatever the answers to these questions, the world-
wide economic impact of tourism is massive (see Table 11.1). “According to the World
Tourism Organization, an important indicator of the role of international tourism is its
generation of foreign exchange earnings. Tourism is one of the top five export catego-
ries for as many as 83 per cent of countries and is a main source of foreign exchange
earning for at least 38 per cent of countries” (p. 2).1 In addition, research investigating
data in 27 nations of the EU from 1988 to 2009 shows that tourism development posi-
tively influences economic growth while reducing carbon dioxide emissions.2
International travelers are a large and growing segment of tourism consumers. Travel
to international destinations has been growing at a rapid pace. However, the popularity of
the United States as an international travel destination is interesting, because less money
is spent per capita promoting tourism to the United States than in any other industrialized
nation. According to tourism industry officials, the United States continues to fall in the
top-of-mind awareness among international travelers as lawmakers fail to allocate mar-
keting dollars to attract these visitors.3 As might be expected, the largest number of vis-
itors to the United States comes from its neighbors to the north, Canada, and the south,
Mexico. These countries are followed in numbers of visitors by Japan, Great Britain, Ger-
many, France, and Italy. As can be seen in Table 11.2, Europe is the major international
destination region, but Asian destinations are rapidly rising to the top. Even though the
United States is a major international destination, citizens of the United States travel less
internationally than their counterparts in other industrialized countries.
As we pointed out in Chapter 1, there are several factors that can influence the level
of tourism activity. The current growth and importance of travel into Canada and the
United States by foreign visitors, especially Asians and Europeans, helps to highlight
several of these factors. First, disposable income continues to rise in these industrialized
countries. Second, European workers have longer vacation periods than their American
counterparts, usually five weeks. Asian workers are now beginning to have more leisure
time and disposable income. Third, these travelers are seeking new adventures away
from their traditional vacation spots. Fourth, international airfares have become very
competitive and are enticing increasing numbers of travelers to head to Canada and the
United States.4 Bring all of these factors together and international tourism receipts in
the United States are expected to almost triple between 2000 and 2020.5
Table 11.1 Top Ten in International Tourism Receipts

Rank Country Billions (U.S. Dollars)
1 United States 177.2
2 Spain 65.2
3 China 56.9
4 France 55.4
5 Macao (China) 50.8
6 Italy 45.5
7 United Kingdom 45.3
8 Germany 43.3
9 Thailand 38.4
10 Hong Kong (China) 38.4
Source: Based on UNWTO Tourism Highlights (2015).

Table 11.2 International Tourist Arrivals

Rank Country In Millions
1 France 83.7
2 United States 74.8
3 Spain 65.0
4 China 56.6
5 Italy 48.6
Source: Based on UNWTO Tourism Highlights (2015).
These same factors are important for other developed and developing countries and
should be considered as plans are made for attracting or maintaining visitors. The level
of disposable income, available leisure time, destination attractiveness, relative travel
costs, and local exchange rates should be kept in mind as countries seek to attract even
more individuals to participate in international travel and tourism activities. Tourism
service suppliers are well positioned to be at the forefront of the continually growing
experience economy that may well be the future of the service economy. As consum-
ers desire more than simply commoditized services, tourism service suppliers have the
opportunity to design their service offerings to be used as a stage to engage customers
in events, creating lasting memories, loyalty, and increased revenues.6 According to the
United Nations World Tourism Organization, the number of tourist arrivals is pro-
jected to grow on every continent and reach a total of 1.6 billion by the year 2020.7
How do researchers arrive at these estimates of tourism activity? They typically take
two steps. First, they estimate the number of “arrivals” at a destination (a city, a state/
province, a country). Second, they estimate average expenditures per visitor by survey-
ing samples of travelers or through estimates based on hotel and other tourism-related
taxes. Then they multiply these two estimates together to arrive at a total amount of
tourism spending in the specific destination. You will find that tourism activity estimates
vary widely owing to the differences in the methods used to approximate the number
of travelers and their expenditures, as well as the different definitions used to determine
France is the number one visitor arrival country. Photo by Cathy Hsu

just who is a tourist. Some agencies define tourists as individuals who travel more than
50 miles away from home, whereas other agencies may use 100 or even 200 miles. Some
require that the person stay overnight at his or her destination, whereas others do not.
So, when you see statistics like those cited in Tables 11.1 and 11.2 realize that other
numbers might be quoted from other sources of information, with the difference in the
numbers depending on the different methods and definitions used.
Looking to Tourism for Economic Growth and Vitality

The people of every country around the world survive or thrive on the income-
producing possibilities of the country’s resources. Citizens all over the world need
income to provide the necessities of life for themselves and their families. Income
options may range from subsistence farming to investment banking. More and more
countries are finding that the development of tourism offers an effective means of
increasing economic well-being. Debate over the appropriate level of tourism develop-
ment for an area often results in political action by individuals, special-interest groups,
and governing officials and bodies. In this chapter, we begin by discussing why and how
tourism activities affect the economic vitality of a region. Then, we will look at some of
the many ways that politics comes into play to affect and shape the tourism industry.
Economics is the “social science that seeks to understand the choices people make
in using their scarce resources to meet their wants” (p. 27).8 For tourists, these scarce
resources are money, available time, and the physical energy to travel. A small amount
of any of these three resources will decrease tourists’ ability to travel, whereas a large
amount of these three resources will increase tourists’ ability to travel. Scarce resources
for promoters and suppliers of tourism businesses are human resources (the availability
and quality of tourism service employees) and financial resources (the amount of money
that the developer can raise by borrowing money or by selling stock). Scarce resources
for communities or countries are the amount and variety of their natural resources
and the pool of human resources available at differing skill levels. Scarce resources for
governments are primarily tax revenues that can be used (1) to develop natural and
human resources productively and (2) to pay for the many services that governments
can provide their citizens.
Comparative Advantage
Many towns and cities, states/provinces, even entire nations, have determined that
development of their visitor-inducing resources can add to the economic well-being of
local residents. Economic decisions are often based on a concept called comparative
advantage. Tourism can be said to have a comparative advantage over other indus-
tries if it yields a better return from the region’s human and natural resource inputs
than another industry would. Leaders of many communities believe this comparative
advantage exists because of the many economic, social, and environmental benefits
tourism offers. Let’s take a closer look at how comparative advantage might favor
tourism development.
FYI NEW ORLEANS

City officials in New Orleans use an festival. They look at the additional weeklong festivities to estimate the
unusual measure to determine the tons of garbage collected during the number of visitors to the city!
success of the annual Mardi Gras

Tourism may have a comparative advantage over other industries in two ways.
First, the region may be especially appealing to tourists because
• it has features that are highly attractive,
• it may be easily accessible to many potential tourists,
• it has the necessary infrastructure, and
• it has an abundant labor force to serve in the tourism industry.
In other words, the area may have the necessary ingredients for both the demand and
the supply of tourism. Not all destinations are able to achieve this balance, and investment
in tourism as an industry is not always an appropriate solution if existing industries in the
region begin to falter. One example is when Flint, Michigan, was recovering from the loss
of the automobile industry and invested $80 million to open the AutoWorld theme park
in 1984 with the hope that an increase in tourism would stabilize their failing economy.
Low-visitation numbers within the first year quickly indicated that Flint did not have the
necessary ingredients to be a successful tourism destination and the park was closed.9
Second, tourism may also be the best industry to develop if there are no other alterna-
tives. For example, many island economies are based on tourism because these small nations
have little else of economic value to offer the world. Its citizens, therefore, are best able to
achieve a better standard of living through employment in tourism businesses. Owing to
very limited natural resources (other than beauty), the islanders have few, if any, industrial
alternatives since almost all supplies and materials must be shipped in. So, tourism has the
comparative advantage because the island country is at a comparative disadvantage for all
other industries. Since islands have unique natural, cultural, and social attractiveness, tour-
ism development rather than other economic development alternatives has been shown to
play an important role in explaining the economic growth of these economies.10
Tourism and Foreign Exchange Rates

One of the most important factors influencing the level of international tourism to a
country is the relative exchange rate of its currency for other currencies. When interna-
tional travelers decide to visit a foreign land, they need to trade their currency for the
currency of the nation they will visit. For example, if a U.S. citizen were to take a trip
to Spain, he or she would need to trade U.S. dollars for the euro. A Spanish traveler
would do just the reverse if he decided to visit the United States.
Most currency exchange rates vary daily depending on the supply and demand for
each currency. The exchange rate of a nation’s currency greatly affects the amount of
international tourism that a country will experience. For example, the United States
has been a very reasonably priced destination for Australian travelers as the dollar has
fallen in value, whereas travel to Australia has become a more expensive destination
for United States residents as the Australian dollar has risen in value.
The power of a single currency, such as the euro, can have tremendous impact on
tourism expenditures. Three of the five most popular international destinations now use the
euro as a common currency. With 28 member states (19 of which use the euro as a common
currency) and more potential members, the European Union (E.U.) is the world’s largest
trading power; and with border crossings now easier for both Europeans and non-Europeans
alike, tourism is thriving if the E.U. can work through its economic problems.
The Multiplier Concept

Why are tourism expenditures important to an area? And just how big a benefit do
they have? One of the most common ideas of the economic impact of tourism is called
the multiplier concept. Money is added to an area when someone from outside its

borders buys a good or service produced within the area. In addition, this new money
to the area is re-spent, generating additional value. Tourism is usually a very good
source of new money for an area because visitors travel to the area and “leave” their
money behind as they buy goods and services during their visit.
Realizing Tourism’s Export Potential

Let us first focus on the multiplier concept of tourism expenditures from an export
point of view. An export is defined as a good or service manufactured or provided in
one country that is purchased by a person or business from another country. Exports
therefore “add” money to one economy and “deduct” money from another economy.
Most countries desire international visitors because tourism services sold to foreign
travelers are considered exports.
For example, when an Irish businessman travels to Toronto and spends money
on restaurant meals, taxicabs, and hotel rooms, some of the money and purchasing
power he earned in Ireland becomes part of Canada’s economy. In this way, the tour-
ism receipts from his visit add to the Canadian economy the same way that selling a
Canadian manufactured good in Dublin would. Likewise, his tourism expenses rep-
resent an import in Ireland the same way that a manufactured good does because the
traveler’s money left Ireland and was gained by Canada.
Here is a more detailed example of a tourism export. Imagine that an Australian
family decides to vacation in California, taking in all the entertainment attractions
and recreational activities that it has to offer. They arrive at LAX airport and then
spend seven fun-and-sun-filled days experiencing southern California. Think of all the
expenses they incur during their weeklong visit: meals, rental car and gasoline, admis-
sions, souvenirs, accommodations, and a host of other services. The family pays for all
these services and goods by spending the money they brought with them from Australia
to cover all these expenses. This money represents “new” money for the U.S. economy
and for California in particular. This exchange is an export for the United States and
represents an import for Australia because the family purchased foreign goods and ser-
vices with their Australian money rather than spending their money at home.
Nowhere are the economic impacts of tourism more evident than in the cruise ports
of Caribbean Islands. When two or three large ships disembark 10,000 plus passengers,
the island becomes alive. Cruise passengers purchase everything from adventures,
cultural activities, and food to high-end jewelry, souvenirs, and T-shirts and fashions.
What Goes Around Comes Around

The multiplier concept also applies to domestic travel. Imagine you have a friend, Sam,
who goes to college and works in Bloomington, Indiana. Sam decides to spend spring
break vacation in Fort Lauderdale, Florida. She takes her hard-earned money and
“leaves” it in Florida as she pays for her travel needs there. In other words, the purchas-
ing power Sam earned in the Bloomington economy is transferred to the economy of
Fort Lauderdale, and the businesses and citizens there benefit from it (see Figure 11.1).
But how does this money “multiply”? The multiplier effect occurs when some
of this new money is re-spent within the local economy. For example, while in Fort
Lauderdale, Sam had dinner at a local hot spot, dining, dancing, and having a won-
derful evening. Her total bill for the evening of fun came to $85. The lion’s share
of the $85 she paid was then used to pay Joe, her server, as well as the bartender,
the dishwasher, the city’s local taxes (sales, property, and income), the manager’s sal-
ary, the local bakery for that delicious bread—you get the idea. In this way, the pur-
chasing power of Sam’s $85 is multiplied because it then becomes Joe’s purchasing
power, which he can use to purchase goods and services he needs. When Joe spends

FIGURE 11.1
Multiplier concept. 1. Sam leaves her home in Bloomington, IN,
with $500 dollars. She is going to Fort
Lauderdale, FL, for spring break.
2. Sam pays way too much for a lobster

tail at an expensive restaurant on the intercoastal
waterway. But what the heck – she's on vacation. Sam's
waiter Joe goes the extra mile for her, recommending a few
great night spots and even draws Sam a walking map. Sam is
so grateful she tips Joe $25.
3. Joe worked 7 days a week for the

past 3 weeks. He hasn't had time to get
a haircut, do his laundry, or even visit the
bank. He decides to go see his hairdresser
Sarah and get a haircut – $25 with tip.
4. "Good thing Joe

came in today," Sarah
thinks. "His $10 tip was
the only tip of the day. I've got
to start cutting a better class of
hair." Sarah looks down as she is driving and
notices she's almost out of gas. She pulls over
and puts the $10 in her tank.
5. The owner of the gas station lets out a

sigh of relief as Sarah pays him. He was
just shy $10 to cover his payroll deposit –
he can go to the bank now and then go home
and relax for the rest of the weekend.
And the continues to move through

the economy increasing
the multiplier effect.
“Sam’s share” of his paycheck on a haircut, Sam’s purchasing power multiplies again

and now becomes purchasing power to be used by the hairdresser, and so on.
However, all of that new purchasing power that has been added to the Fort
Lauderdale economy does not stay in the local economy forever because of leakage.
Just as Sam took some of her purchasing power from Bloomington to Fort Lauderdale,
that purchasing power will eventually leak out of the Fort Lauderdale area. For exam-
ple, Joe’s hairdresser could purchase gasoline for her car. Relatively little of the money
she pays for gasoline gets to stay in the local economy, because the gas station owner
needs to purchase gasoline produced at a refinery in another state from oil from

another country. The purchase of this import causes the purchasing power to “leak”
out of the Fort Lauderdale economy, so it is no longer available for locals to use within
the area. The faster the leakage, the lower the output multiplier.
Economists derive multiplier values for a number of important economic variables:
1. Income
2. Employment
3. Output or sales or transactions
4. Government revenue (taxes)
5. Imports11
The multiplier effect is the sum of three levels of impact created by tourism pur-
chases. These effects are called direct, indirect, and induced effects. Together they cre-
ate the total multiplier impact on the area. Direct effects, also called first-round effects,
come directly from tourist spending, such as the increase in the number of employ-
ees and the amount of wages paid to restaurant employees owing to tourist eating/
drinking at the restaurant.
Indirect effects, also called secondary effects, are created from the increase in
purchases by tourism suppliers to serve tourist needs, such as the increase in food
and beverages purchased from suppliers by a restaurant. Suppliers in turn will need to
increase their purchases, and so on. These “ripple effects” are all indirect effects from
tourism expenditures.
Induced effects are other increases in economic activity, employment, taxes, and
so on generated within the area’s economy at large owing to the existence of tourism.
For example, the community will see higher expenditures on health care because of the
increased number of residents drawn to the area for employment in the tourism industry.7
Tracking the Impact of Tourism Expenditures

How big or small can this multiplier concept be? Tourism researchers and economists
have tried to estimate the tourism multiplier concept for countries, regions, and
even cities. For example, Adrian Bull reported that the tourism multiplier concept
for Canada is approximately 2.5: For every new dollar injected into the Canadian
economy from an international visitor, $2.50 of purchasing power is generated over
time before that original dollar is leaked out through expenditures on imports coming
into Canada.12
Multipliers are an indicator of the economic independence of a country. The
higher the multiplier, the more economically self-sufficient the country. Some countries
such as Ireland, Turkey, the United Kingdom, and the United States have multiplier
factors of approximately 2 or more. Other countries experience much lower multiplier
concepts, for example, 0.8 for the Philippines and 0.7–1.2 for Least Developed Coun-
tries and small island states.8
Although island countries tend to depend on tourism for economic growth, they
also have very quick leakage and, therefore, very low-output multipliers, because
almost all goods associated with tourism need to be imported to the area. These
imports may be as simple as the food and beverages served to visitors or as complex
and costly as the steel to build the hotels. Foreign ownership is another reason why
island economies experience high levels of leakage. Transnational corporations (TNCs)
are found in many sectors of the tourism industry, and profits are leaked out of a com-
munity any time a business (e.g., hotel chain, restaurant chain, rental car chain, etc.) is
headquartered outside of the destination. There is a similar case for foreign franchises,
and even if the business is locally owned, a portion of the profits will leak out of the
community as fees paid to the franchisor.

Determining tourism’s impact on an area’s economy is not an easy task. It takes

a great deal of information collection and highly skilled researchers to undertake
the process. Let’s look at this task of determining the economic impact of tourism
expenditures.
Economic Impact Analysis

Economic impact analysis is an inexact process, and output numbers should be
regarded as a “best guess” rather than as being inviolably accurate. Indeed, if a study
were undertaken by five different experts, it is probable that there would be five differ-
ent results (p. 80).13
Much of the government-sponsored research in tourism focuses on the economic
impact of tourism to a certain region. These economic impact analysis (EIA) studies
are conducted to determine tourism activities’ effects on the income and employment
of the residents of some region. Usually the studies reflect annual impacts of total tour-
ism visits, but sometimes they are undertaken to measure the effects of visitors on a
single entity or event, such as a major zoo or a festival.
On the benefit side, this normally means the study provides estimates of travel
spending and the impact of this spending on employment, personal income, business
receipts and profits, and government revenue. On the cost side, this means estimating
the costs, sometimes nonmonetary, to government and residents of travel activity in
the area (p. 359).4
The results of EIA studies are useful to:
1. Public policy makers and the area’s residents when determining economic
benefits of investment in tourism promotion or expansion/development of
publicly funded tourism attractions, such as events.
2. Public/private organizations when measuring impact of travel promotion
efforts or specific conferences or groups of travelers enticed to visit the area.
3. Tourism industry members in educating the public and government officials of
the benefits that the industry offers the community or region.
Fundamentally, EIA research involves counting the number of area visitors and
determining how much they spent during their visit, usually using sample surveys
(although other estimation methods are used). Tourists are usually counted at bor-
der entry/departure points, visitor information (welcome) centers, or accommodation
establishments. In the past, the surveys used to query tourists differed from country
to country. The World Tourism Organization (UNWTO) published a general ques-
tionnaire that can be used by countries (and adapted by other organizations as well)
to attempt to generate more consistent data that are more easily compared.5 Since
the 1990s, the UNWTO has encouraged countries and smaller, more local entities to
develop Tourism Satellite Accounts (TSA) to track the expenditures and economic
impact of travelers to their regions. The purpose of a TSA is to link tourism expendi-
tures spent in the wide array of industries in which they may be made and therefore
better enumerate the total amount and impact of tourism.
Although the development of standard questionnaires is a giant step in the collection
of expenditure data from tourists, the process is still no easy chore, for either the
researcher or the tourist! To demonstrate the daunting task facing the tourist, imagine
you have just spent ten days having fun in the Sun in Cancun, Mexico. While you are
waiting to board your flight home, a pleasant-looking lady approaches you and asks
whether you would take a few minutes to answer some questions about your visit to her
country. Because you have nothing better to do, you agree. First she asks you several
easy questions: in what country do you live, how many people (including yourself) are

you traveling with, how long have you stayed in Mexico, and what was your reason for
traveling to Mexico; but then the questions start to tax your memory and your estimation
skills. She asks you how much you spent on transportation within the country; how
much on accommodations; how much on food and beverages; how much on souvenirs;
how much on activities and attractions. Those are tough questions. At best, you offer
decent “ballpark” numbers for your expenditures. But perhaps you are uncomfortable
or embarrassed to admit how much you spent on the trip to this stranger and provide
her with an estimate that is significantly different than your actual spending.
Asking tourists about their spending is most effective at the very end of their trip.
Increased security restrictions for accessing departure lounges at airports are making it
harder for researchers to capture tourists at this time. Many researchers are intercepting
tourists at other stages during their trip when they are less likely to be able to provide
an accurate estimate of their spending. Imagine if you were waiting in line for a tourist
attraction on the second day of a five day vacation when you were approached by this same
researcher. The amounts you provide about your spending would have to be speculation.
From these scenarios, you can see that statistics you read about average tourism
expenditures should not be assumed to be totally accurate. The estimates are only as
good as the tourists’ ability to give accurate answers and the researchers’ estimation of
total tourism spending based on the answers of sampled tourists. As the saying goes,
“garbage in, garbage out,” so the quality of the research depends on the skills of the
researcher and the accuracy of tourists’ memories and ability to estimate.
Once total tourism expenditures have been estimated, researchers then try to deter-
mine how these monies are re-spent within the regional economy. EIA expert John
Crompton lists six ways a tourism dollar spent in a local establishment could be re-spent:
1. Paid to other local businesses for some goods or services (e.g., a local produce
farmer)
2. Paid to local-resident employee or owner
3. Paid to local government in form of tax
4. Paid to other business outside of local area (e.g., distant wholesale food
distributor)
5. Paid to nonlocal employee or owner
6. Paid to nonlocal government in form of tax (state/province or federal)
The first three ways are called linkage, and the latter three are termed leakage.
The higher the linkages and the lower the leakages within an area economy, the higher
will be the total economic impact of tourism to the area. The size of these linkages and
leakages are assumptions (a type of “judgment call”) made by the researchers. “As a
general rule, a smaller community tends not to have the sectoral interdependencies
that facilitate retention of monies spent during the first round of expenditures. Hence,
much of the expenditure would be re-spent outside the local region leading to a rela-
tively low local economic multiplier” (p. 22).6
FYI DOES TOURISM BENEFIT EVERYONE IN THE COMMUNITY?

As Shanghai celebrated the success- they think the event created more jobs the 6-month period to reduce noise and
ful hosting of the most attended and increased the income for those air pollution. The exact overall return
(73 million visitors over a 6-month employed in the hospitality and tourism on investment on this type of mega
period) World Expo in 2010, Shanghai industry. However, those who work in event is difficult to estimate due to the
residents reflected on the impact of the the construction industry are adversely scope of impact and potential time lag
event. Most residents do not feel any affected because the government between return and investment.
economic impact personally, although halted all construction activities during

The final judgment that needs to be made is a guess concerning the number of
rounds of re-spending of the tourism expenditures within the area economy, the mul-
tiplier effect we introduced earlier. So, final EIA numbers, on which so many decision
makers rely, are only as good as the research method used and the validity of the large
number of assumptions researchers use in deriving them.
Now, Shanghai welcomes 94 airlines that connect with 256 cities. In addition, the
city welcomes 608 cruise ships each year in Shanghai harbor and witnessed the suc-
cessful opening of the Disney theme park. Welcoming over eight million domestic trav-
elers each year, there is no question that Shanghai has now developed into a powerful
international tourism destination generating enormous returns from the 11% value
added tax (VAT) levied on overseas tourists.
Other Economic Impacts

In addition to the multiplier concept, tourism offers other positive economic benefits.
First, tourism can provide stability in an economy. Although recessions affect virtually
all industries, tourism historically has seen relatively minor declines in revenue during
recessionary times. As we mentioned in Chapter 2, business travel remains relatively
constant during changes in economic cycles; and even though people may cut back on
the amount they spend on travel during harder economic times, citizens of most indus-
trial nations have come to view vacationing as a necessity of life.
Second, tourism provides economic diversity. A stable economy is one that provides
jobs and revenues from a variety of industries. Tourism can be added as another economic
engine to the industry mix. Obviously, the addition of any industry to a community will
increase the employment opportunities of that community. However, unlike many other
industries, tourism provides a wide variety of job possibilities, such as:
1. Entry-level employment for relatively unskilled and semiskilled workers
2. Positions for highly skilled craftspersons, such as chefs and artists
3. Many professional-level career opportunities for well-educated decision makers
Third, tourism often provides the economic incentive to improve infrastructure
that can be enjoyed by residents as well as tourists. For example, state-of-the-art air-
ports are built by communities primarily to increase accessibility, thereby enticing
more visitors and increasing business activity; but the airport can also be used by locals
to meet their travel needs.
Tourism offers a fourth additional positive impact that you may find particularly
appealing. Unlike most manufacturing-based enterprises, a tourism business can be
started in the form of a small business. In this way, the tourism industry can be used
to encourage entrepreneurial activity. Have you ever considered developing your own
business? Many people today like the idea and challenge of being their own boss. Tour-
ism provides plenty of chances for creative, motivated individuals to start their own
businesses. Small retail shops, restaurants, bed-and-breakfast homes, and guide and
taxi services are just a few of the many tourism-related small business opportunities.
So, tourism has many economic benefits but, unfortunately, the development of
tourism is not without drawbacks. Up to this point, we have been looking at the eco-
nomics of tourism through rose-colored glasses. Next we will consider some of the
not-so-positive economic effects tourism can yield.
Potential Problems in Tourism-Based Economies

Having a diversified economy means that an area is not overly reliant on any
one industry. Consider an agricultural region that faces a drought. A diversified
economy allows the area to financially recover faster because other industries will

FYI SA PA’S COMMUNITY-BASED TOURISM

If managed appropriately, tourism the Black H’mong, a Vietnamese eth- their embroidered items, and many of
can provide an alternative source of nic minority, have successfully used the young women who can converse
income for indigenous communities. tourism to improve the quality of their in English make a living by being tour
In community-based tourism (CBT), lives in Sa Pa. Through the street ven- guides. Community members also
communities control and manage dors along the trekking routes of the offer homestays for an authentic local
their tourism industry. For example, tourists, the community is able to sell experience.
Sources: http://www.cbtvietnam.com/sapa/; Nguyen, D.H.C & Toot, O. (2004). Sustainable tourism—bringing balance to the tourism
boom: Equitable tourism development in Sa Pa, Vietnam. SNV Bulletin, Netherlands.
support the economy even if agriculture fails. Like all industries, tourism has the poten-
tial for negative as well as positive impacts. Overdependence on tourism can lead to
a dangerous lack of economic diversity, so that a major event affecting tourism can
threaten an area’s economy. Tourism revenues can be quickly and severely diminished
by a variety of crisis events. Five of the most common and influential types of crises are:
1. International war or conflict
2. Acts of terrorism, especially those involving tourists
3. A major criminal act or crime wave, especially against tourists
4. A natural disaster that causes substantial damage to natural resources or tour-
ism infra-or superstructure
5. Epidemics of diseases that are highly contagious14
Countries and regions around the globe have felt the economic pain associated
with one or more of these events. For Example, Great Britain suffered a substantial
decline in tourist volume when foot-and-mouth disease was discovered on British
farms. The British government restricted access to many rural areas, including tourist
sites, and the media intensely covered moves made to control the spread of the disease.
The head of the British Tourist Authority estimated that international tourism to Great
Britain dropped by 22% owing to the disease outbreak.10
Climate change and political instability can also have harmful effects on economies
supported by tourism. For example, both the North American and European markets
were severely impacted by volcanic eruptions in Iceland. These initial eruptions in 2010
and subsequent eruptions have caused millions of passengers to be stranded as air traf-
fic was halted for safety purposes. Other unforeseen events such as the economic tur-
moil in Greece coupled with an influx of refugees due to warfare in the Middle East
and terrorist attacks and the threat of war by Russia in Turkey have all dramatically
decreased the number of tourist arrivals in these countries. Other wars, weather, dis-
ease, and political unrest continue to pose challenges for the tourism industry.
The Caribbean islands are suffering now more than ever because of their tourism-
only-based economies. When the cruise industry began to flourish, cruise ships brought
thousands of eager spenders to the islands and boosted the economy. However, the trend
in the cruise business now is to provide more onboard shopping and recreational opportu-
nities. For example, although cruise passengers to the U.S. Virgin Islands represent 80% of
all visitors, they generate only 25% of tourist revenue. Many cruise lines, such as Holland
America Cruise Line and the Disney Cruise Line, have even acquired their own private
islands where their guests can play. Because these islands are owned by the cruise lines, no
local island economy gains much benefit from tourism revenues generated on them.
Finally, as noted previously terrorism and the threat of terrorism can wipe out
tourism demand. Witness the devastating impacts that the September 11, 2001,

terrorist attacks on New York City and Washington, D.C., had on the United States
and, indeed, the whole world. These attacks on the United States have had the largest
and widest effect on tourism since its mass development in the 1950s. The U.S. tour-
ism market was estimated to have declined by 25% at the end of 2001. However, the
global impact of these attacks is what sets them apart from previous terrorist actions.
Virtually all the world’s airlines saw double-digit declines in passenger numbers, which
resulted in the worldwide loss of hundreds of thousands, even millions, of jobs in all
sectors of the tourism industry and its supplier industries, such as aircraft manufac-
ture.10 The good news is that, in the aftermath of these attacks, tourism has proven its
resilience, and both the number of travelers and the amounts spent on tourism activi-
ties have exceeded pre-2001 levels.
Tourism can also highlight too much of a good thing and bring too many visitors
to an area. By showcasing the beauty and other tourism resources of an area, tourism
marketers can increase the popularity of the area and bring in many more people inter-
ested in playing and living there. This increase in demand frequently leads to increased
prices for goods and services as well as higher housing and land values. Occasionally,
this problem becomes so severe that workers can no longer afford to live near their
work. Such an impact has occurred in the beautiful central California beach towns and
many mountain towns of the Rocky Mountain states and provinces.
Large increases in the number of tourists to an area usually increase costs of pro-
viding services for both the increased number of tourists and the increased number of
residents. Services such as police and fire protection can be strained by the numbers
of visitors, and school systems can be strained by new residents who decide to move
to their favorite travel destination. Utilities, and other infrastructure resources such as
roads, can also feel the strain from increases in the numbers of visitors and residents
and the development required to serve their needs.
Tourism in the Economic Balance

Determining whether the total economic impact of tourism will be positive or negative
is not an easy task. Many decision makers are turning to cost–benefit analysis for help.
In cost–benefit analysis, dollar values are assigned to the benefits of tourism (such as
increased tax revenues and increased employment opportunities) as well as the costs
associated with tourism (such as the increased need for utilities, schools, and police
protection). If the value of the positive impacts (the benefits) is greater than the value
of the negative impacts (the costs), the total economic impact of tourism is positive. If
the costs are larger than the benefits, then tourism may not be the economic engine it
is often believed to be. To be as thorough as possible, decision makers have tried to
quantify difficult-to-value pluses and minuses (such as increased entertainment options
for residents and increased crowding and traffic jams) to include these benefits and
costs in the equation.6
So, as you can see, tourism can have both positive and negative economic impacts.
How, then, are tourism development decisions made and who is involved in the
decision-making process? In the next section, we will look at how governments and
citizens try to make choices concerning the development and growth of tourism.
Tourism and Politics

Remember, economics is all about decisions concerning scarce resources. Politics is about
how decisions concerning the public are made. In a democratic society, economic decisions
that can affect large groups of people are likely to involve some political process. An easy
way to define politics is “[P]olitics is about power, who gets what, where, how, and why.”15

So, politics is about decision-making: how decisions are made, who is involved in the pro-
cess, and how decisions are implemented. The politics of tourism is usually about how
decisions concerning use of scarce resources are made. In a way, economics is about the
quantity of life, whereas politics involves debates over the quality of life.
Often, decision-making about promoting and developing tourism does not hap-
pen through a rational decision-making process in which all interested parties have a
chance to voice their opinions or vote for their favorite alternatives. Frequently, the
most influential “players” in tourism are outsiders—developers from other areas, even
other countries, who see profit opportunities from developing tourism-related busi-
nesses. Development of tourism in an area frequently leads to heated political debates
over the benefits and costs of tourism, creating political tugs of war among constituent
groups (covered later in the chapter).
The Role of Government in Tourism

Governments, from the local to the national level, can and often do play an important role
in tourism development. Why do governments devote scarce funds to the promotion and
development of tourism? As we discussed in the first half of the chapter, tourism can pro-
vide many economic benefits. First, a wide variety of jobs are created through the devel-
opment of the hotels, restaurants, retail shops, and other facilities and services required
to satisfy the needs of travelers. Second, additional jobs are generated to serve the needs
of the employees of the tourism industry. These jobholders earn wages that, in turn, are
re-spent in the local economy, creating the multiplier concept. Third, and may be most
important from a government perspective, revenues are boosted by taxing the goods and
services that visitors buy. Taxing visitor shifts a portion of the tax burden from local res-
idents to tourists (see Table 11.3). As can be seen in this table, auto rental companies
have become especially concerned about what they consider to be “hidden taxes,” because
cities, counties, and states have frequently added additional taxes to rental agreements to
fund projects from building major league stadiums to subsidizing operating budgets.
For example, the small country of Monaco receives virtually all of its tax revenues
from taxes paid by tourists, primarily through Monaco’s famous gaming casinos.16 The
same is true for the city of Macao where the government receives about 85% of its rev-
enue from gaming taxes.17 Communities and other governmental units commonly tax
hotel rooms, restaurant meals, and gasoline, and often add passenger facility charges
Table 11.3 Examples of Tourism-Related Taxes

Auto Rental
Hotel/Lodging Restaurant Gasoline Tax Base Tax Dollar Off Airport
City Tax (%) Tax (%) per Gallon ($) Rate (%) Surcharge ($) Fees (%)
Baltimore 8.00 5.00 0.419 11.50 6.00
Chicago 14.90 9.25 0.573 18.00 10.00
Houston 17.0 8.25 0.384 15.00 3.00 8.15
San Francisco 14.00 8.50 0.67 8.65 7.00
New York 13.25 8.75 0.674 13.25 18.00–21.00
Miami 12.50 8.50 0.534 6.9 9.00
Seattle 15.6 8.90 0.559 18.3 3.00 10.00
Washington, D.C. 14.50 10.00 0.419 8.0 6.00 10.00
Note: Although many in the tourism industry believe these tax revenues should be used for travel/tourism programs, much of it goes
directly to the general fund or to programs unrelated to travel. Airline taxes collected from travelers are significant revenue sources for
the federal government. Consumers pay a 10% federal air ticket tax on each airline ticket sold in the United States. Additionally, many
airports impose a passenger facility charge (PFC).

FYI MISO WALAI’S COOPERATIVE MODEL

Are you aware that 260 members from from the activities (e.g., homestay, committed to tourism. KOPEL today
5 villages of the Batu Puteh Community wildlife watching, tree planting, learning provides a strong platform to support
at Miso Walai in Kinabatangan, Sabah, traditional music and dance, cooking the local government (Sabah Forestry
Malaysia, have a share in the village local dishes, and having interpretive Department) in the management
tourism business using a cooperative walks through local farms and orchards) of visitors and forest recreation
a p p r o a c h ? Th r o u g h KO P E L , t h e in the village rose from $12,000 in 2000 activities. In turn, the government has
Batu Puteh Community Ecotourism to more than $50,000 in 2015. Thus, provided funds to develop essential
Co-operative, the income generated the Batu Puteh community remains infrastructure for tourism.
Sources: Uma Thevi, M., Sushila Devi, Mura, P. & Nair, V. (2013). Local Residents’ Involvement in Rural Tourism: The Case of
KOPEL in Kinabatangan, Sabah, Malaysia. Proceedings of the BEST Education Network Think Tank XIII. 23–26 June 2013. Taylor’s
University, Malaysia; http://www.misowalaihomestay.com/
on departing flights from the local airport. These tax revenues can then be used to fur-
ther develop and promote tourism or, as is common, to improve the quality of life by
funding services for local citizens.
National and state/provincial governments can support tourism development by
performing many activities. These can include the collection of tourism information,
regulation of tourism-related businesses such as airlines, international promotion of
tourism, encouragement of development of tourist areas (especially by funding infra-
structure or providing government-backed loans), and development of tourism policy.
In a bid to reshape its economy, the government of Taiwan is shifting its develop-
ment efforts away from manufacturing to tourism. Its “Challenge 2008” plan, backed
by $75 billion in financing, is designed to double the number of tourists visiting the
country.18 Its subsequent implementation of the “Taiwan’s 2015–2018 Tourism Action
Plan” includes tourism product integration and marketing, manpower optimization,
application of smart tourism, and promotion of green and caring travel. The govern-
ment plans to welcome the 11.2 million international visitors to Taiwan in 2017.19
In some countries, the national government actually takes part in the tourism
industry through government ownership of certain businesses such as hotel chains,
tour companies, and airlines. In the United States and Canada, government agencies
are an integral part of the management of a valuable tourism resource—the national
park systems. However, more and more national governments are getting out of the
tourism businesses through privatization and limiting their roles to tourism promo-
tion and regulation. For example, in the mid-1980s, the government of New Zealand
owned hotels, tour companies, and the national airline. Since then, the New Zealand
government has privatized virtually all of these tourism enterprises.
Governments can also aid tourism development by financing necessary infrastruc-
ture such as roads and airports and by offering government-backed low-interest loans
to private developers who develop superstructure facilities. For example, travelers are
often surprised to learn that they must pay a departure tax in many locations to fund
airport operations and improvements. In other instances, many local governments,
aided through state funds, have attempted to revitalize inner-city areas and turn them
into leisure, entertainment, and shopping meccas. Local governments can also spon-
sor “hallmark tourist events” such as the Super Bowl or a World’s Fair to generate
increased visits and gain publicity for the region that can pay off in the future.
Think of the international awareness that is gained by cities and countries when they
host Olympic Games! Bidding for the Olympics is an expensive and competitive endeavor
and often considered an investment for tourism in the host country by gaining the opportu-
nity to showcase its cultural and natural resources. The estimated cost of the Sochi Olym-
pics in 2014 is $51 billion.20 Many question whether such an expense was a good use of
funds and whether it is likely to see a return on the investment for future tourism in Sochi.

TOURISM IN ACTION
TOURISM POLICY
Although by no means universal, some governments (national, state/provincial, or local) formulate a tourism
policy to aid in guiding the development of a sustainable tourism industry in their jurisdiction. A formal statement
of tourism policy serves as a “master plan” that lists the parameters for development and stewardship of tourism
resources within the region. Specifically, a tourism policy has the following features:
• It is written at the macro level and offers a long-term perspective.

• It delineates the critical resources needed to develop and sustain tourism in the area.
• It explains the relationship of tourism components to the greater societal and economic systems of
the region.
• It outlines the information inputs that will be needed for decision-making.
The tourism policy should provide a destination vision, which is defined as an “inspirational portrait of the
ideal future that the destination hopes to bring about in some defined future (usually 5, 10, 20, or 50 years)”
(p. 154). From this vision, tourism decision makers can formulate a destination image to strive for, both by
developing resources and via marketing efforts.
Source: Ritchie, J. R. B., and Crouch, G. I. (2011). A model of destination competitiveness and sustainability. Destination Marketing
and Management: Theories and Applications, 326.
Tourism Promotion Agencies

Many governments have an agency that is charged with promoting tourism. At the
national level, this agency is called a “national tourism organization/office,” or the
NTO. National and state/provincial governments fund such offices to fulfill two pri-
mary functions. First, the government agency collects visitor and industry information
that can be used by tourism businesses to become more successful and grow, employing
more citizens and generating more tax revenues. Visitor information is often gathered at
welcome centers run by states, provinces, cities, and towns. Second, government agen-
cies promote entire areas as destinations. Tourism businesspeople are usually unable or
unwilling to fund advertising that does not expressly sell their individual businesses.
But we know that tourists are first sold on a destination area and then look to buy spe-
cific services to fulfill particular travel needs, such as hotel accommodations, restaurant
meals, guide services, and so forth. So, national and state/provincial governments engage
in destination marketing through destination marketing organizations (DMOs) to gen-
erate sizable numbers of tourists. Individual tourism-related businesses are rarely able
to afford marketing campaigns large enough to create a distinctive destination image.
Research has shown that successful DMOs all exhibited a focus on the same following
characteristics: effective communications with all suppliers; collaborative partnerships
in marketing efforts, research, and sales; effective relationship management with all
stakeholders; attention to strategic planning activities; organizational focus and drive;
proper public and private funding; and attracting and retaining quality personnel.21
Destination image is simply the detailed impression an individual or target segment
has of a specific destination. This impression is composed of three parts. The first,
called cognition, is the sum of all that the potential traveler knows and believes about
the destination. These bits of information and beliefs may be from past experience with
the destination or may have been acquired through a variety of information sources,
from word of mouth from friends to magazine articles to movie settings. The second
part of the destination image impression, called affect, represents the consumer’s
feelings—favorable, unfavorable, or neutral—about the destination. From these two
components of impression comes the third, called conation. Conation is the likelihood
of the potential traveler to visit the destination in the near future.22

Closely related to destination image is the concept of a destination’s positioning.

Whereas a destination’s image can be described by itself, a destination’s positioning relates
the image of one destination to those of its competitors. So, destination positioning is all
relative. Through consumer research on the amount of important attributes that make
up a destination’s image and then “mapping” of a destination with its likely competitors,
decision makers can see how their destination “stacks up.” Destination positioning is a
strategic tool used to “reinforce positive images, correct negative images, or create a new
image” for a destination (p. 334).16 Once the position is determined, an ideal position can
be decided and then tactics can be developed to move the destination’s image to the new,
improved position. Tourists make the decision about where to travel after narrowing
down all of their options. The process of destination selection is a series of stages where
possible vacation spots are eliminated based on the tourists’ awareness and preference.23
Tourism promotion agencies use positioning as a way to encourage awareness and pref-
erence for their own destination to successfully compete with similar destinations.
Public/Private Organizations
Decisions concerning tourism promotion are complicated and raise many questions.
Should more be spent on leisure travelers, or should the bulk of funds be spent trying
to attract conferences and other meetings to the area? Should a mass-marketing strat-
egy be used, trying to attract any and all comers to the area, or should segmentation
and targeting be used to attract a specific group? In addition, organizations need to
determine how much money should be spent on attracting tourists from their own
region, from outside their region, and from outside the country.
A common way for tourism promotion and development decisions to be made and
funded is through public/private organizations or partnerships. A public/private partnership
is an organization whose members include government officials as well as private citizens.
A tourism-related public/private organization usually has a membership composed of local
or state government officials, tourism business owners and managers, and local citizens.
These partnerships are being used more and more to fund the promotion and development
of tourism. Often, the government partner funds infrastructure improvements; the private
enterprise partners fund the superstructure (often with the help of tax incentives); and then
together the government and private business partners fund tourism promotion through
contributions and the collection of special tourism-related taxes, such as a room tax.24
Chambers of Commerce and Convention

and Visitors Bureaus
Two common examples of local public/private tourism promotion organizations are
chambers of commerce and convention and visitors bureaus. As suggested in the chap-
ter opener, in smaller communities, chambers of commerce often perform the tourism
promotion role (as well as many other economic and business developmental roles).
Frequently, as communities grow, the tourism promotion role is conducted through a
special organization called a convention and visitors bureau. In very large cities, Chicago,
for example, responsibility for attracting tourists is further divided. Promotion to lei-
sure travelers rests with the Chicago Office of Tourism, whereas attracting professional
travelers is the concern of the Chicago Convention and Tourism Bureau. A priority of
all of these types of organizations is literally to put their area on the map by educating
prospective visitors and meeting planners about the destination.
Convention Centers
Convention centers are also frequently public/private organizations. An increasing
number of cities worldwide have been developing and renovating convention center

facilities to attract the professional traveler segment of tourism. As you learned in

Chapter 2, a major portion of the professional traveler segment involves meetings.
This “meetings” market is composed of two sub-segments: conventions and exhi-
bitions (trade shows). Convention centers are designed to serve the special needs of
conventions and exhibitions, and range from tiny facilities that are little more than a
single large room to immense complexes that can hold tens of thousands of conven-
tioneers (see Figure 11.2).
Cities continue to engage in a “space race” with more and more cities expanding or
building centers, trying to edge each other out to be the biggest and newest. Nowhere
is this growth more evident than in China, where there was only one large conven-
tion center in 1992 with 50,000 square meters of space (538,196 square feet), but by
FIGURE 11.2
ENTRANCE TO EXHIBIT HALL
Example of a trade show layout.
MEN WOMEN
REGISTRATION
AREA
WOMEN INFORMA- MEN

101 TION CRUISES 121
CANADA
102 190 202 122
134 146 US
CRUISES
103 123
135 147 CONVENTION 191 203
104 192 204 124
136 148 AND VISITORS
105 193 205 125
137 149 BUREAU 126
CANADA
106
107 158 174 127
108 159 175
109 RENO/TAHOE 160 176
110 138 150 161 177 STAGE AREA
111 139 151
140 152 CARIBBEAN
112 162 178
113 141 153
163 179
164 180
165 181
114 128
115
LAS VEGAS
LAS VEGAS FLORIDA EUROPE 129

AIRLINES
116 142 154 166 182 194 206 130

117 143 155 167 183 195 207 131
118 144 156 168 184 196 208 132
119 145 157 169 185 197 209 133
120
ASIA MEXICO
170 186 198 210
171 187 199 211
172 188 200 212
173 189 201 213
WOMEN
BAR
EXHIBITORS,
STORAGE AREA
FOOD AREA
MEN
All booths are 10'312' and all aisles are at least 10' wide
Booths =

Table 11.4 A Sample of Large Convention Facilities

Total Meeting/Exhibition Space
Site/Location (in millions of square feet)
Las Vegas Convention Center, Las Vegas, NV 10
Georgia World Congress Center, Atlanta, GA 3.9
McCormick Place, Chicago, IL 3.1
Shanghai New International EXPO Center, Shanghai, China 3.5
Beijing International Convention Center, Beijing, China 2.3
Orange County Convention Center, Orlando, FL 2.1
The Venetian, Las Vegas, NV 1.9
Berlin Exhibition Grounds, Berlin, Germany 1.7
Note: Space estimates approximated from information obtained from the website of each convention center.
2003, there were 16 with 1,288,000 square meters of space (13,863,917 square feet).25
Beijing and Shanghai now boast convention centers of 220,000 and 364,000 square
meters (2,368,000 and 3,918,063 square feet), respectively.26 Shanghai, Beijing, and
Guangzhou are the three largest exhibition cities in China, each hosting several hun-
dred exhibitions annually.27 The reason for this convention center building frenzy?
Lots of revenues and some bragging rights too! See Table 11.4 for a sample of other
large convention facilities.
Marketing to attract convention and exhibition business is very different from
efforts used to entice leisure travelers. Single decision makers or, more commonly, a
small committee of decision makers, decides where to locate their group’s convention,
meeting, or exhibition. This decision process usually begins years before the event
takes place, requiring the coordination of many tourism-related businesses in devel-
oping a proposal presented to the site selection committee. Key determinants for these
Due to increasing demand, the Hong Kong Convention and Exhibition Center was
expanded to handle larger crowds. Photo by Thomas Sun

site decisions are price, size, and quality of facilities, and a wide variety of amenities or
add-ons that will likely encourage prospective attendees to sign up for the convention
or trade show. Convention centers need a staff of knowledgeable and efficient people
to sell the center and ensure that conventioneers/trade show participants are satisfied
with their experience and will return in some future year.
Convention centers are funded and managed in a variety of ways. Some are
funded and managed by local governments. Some are public/private joint ventures,
whereas others are completely financed and managed as nonprofit private associations
of tourism-related businesses. Often, the convention center facilities are built with
public money, usually a combination of city and state funds. The annual marketing
and operating costs are covered through tourism-related taxes, membership fees, and
revenues generated directly from services provided at the center and sold to attendees.
But most centers lose money.
Tourism Planning
Another major function of government and nonprofit tourism associations is tour-
ism planning. Planning involves predicting the future, setting objectives to attain
future outcomes, and then outlining and implementing the actions needed to attain
these objectives. You now realize that tourism is a conglomeration of many indus-
tries and needs the coordination of a wide variety of enterprises and agencies to
thrive. However, because so many organizations are involved in the industry, plan-
ning is not easy.
Tourism planning is a continuous process and involves many steps to develop and
sustain tourism revenues. A wide variety of decisions must be made, including the
timing of development, size of the infrastructure and the superstructure, targeting of
promotional campaigns, and efforts to enhance and preserve attraction resources. In
addition, plans must include studies of the increased burdens on resources such as
water, roads, and police and fire protection, and how the strains on these resources can
be met or minimized. Table 11.5 provides a list of the steps that must be included in a
comprehensive tourism plan.
Usually, tourism planning rests with a government agency, typically at the state/
provincial and local levels, although many countries have strong national organizations
as well. Government agencies are often charged with conducting research and making
predictions concerning likely tourism industry trends. Based on research results, plans
can be drawn up to achieve the desired level of tourism activity to maximize benefits
and minimize the costs that can occur.
A tourism planning organization, whether at the national, state/provincial, or
local level, needs to modify and refine its plan continually. First, research to learn
the changing trends in market segments needs to be conducted regularly, along
with studying emerging economic impacts of tourism (both positive and negative).
Second, planners must constantly gain and enhance the cooperation of the indus-
try sectors to ensure effective promotion and delivery of high-quality tourism ser-
vices to visitors. Third, planners need to determine whether changes in priorities for
tourism marketing are needed. For example, research may show that the area has
successfully developed the domestic tourism market and now should start developing
international promotion campaigns; or may be the idea of hosting a hallmark event,
such as a World’s Fair or Olympic Games, should be seriously considered. Last, but
certainly not least, planners need to monitor and preserve the very resources that
attracted visitors in the first place. Often, these resources are fragile natural or heri-
tage sites, so plans must include ways to protect them from erosion and harm so that
they are preserved for future enjoyment.

Table 11.5 Phases in the Tourism Policy and Planning Process

Phase 1: Definitional phase
Definition of the tourism destination system (geographical boundaries and the
stakeholder groups and their relationships)
Specification of the tourism destination philosophy (the values to be followed)
Crafting of a destination vision
Specification of objectives and constraints
Phase 2: Analytical phase
Internal analysis (review of existing policies and programs, resources)
External analysis (analysis of current and future demand, competition, and promotion)
Phase 3: Operational phase
Strategy determination
Predictions regarding future demand and competitive environment
Policy and program recommendations
Phase 4: Implementation phase
Strategy for development, promotion, and stewardship
Assignment of responsibilities for tactical implementation
Identification of funding sources
Specification of timing of tactics
Source: Adapted from Ritchie, J. R. B., and Crouch, G. I. (2003). The Competitive Destination. Wallingford:
CABI Publishing.
A fine example of tourism planning is the Banff National Park Management Plan.
The plan started with a vision statement that provided direction for the preparation of
a detailed plan that will guide decision-making about development and operations in
the Canadian park for the foreseeable future.28
Political “Tugs of War” Over Tourism

Under “Tourism and Politics,” we defined politics as power and about who gets what.
Whenever a finite amount of resources, especially financial resources, needs to be allo-
cated, there will always be tugs of war among providers and users of these resources.
In politics, groups with common needs or wants are called constituent groups. In the
world of tourism, these constituent groups include:
• Tourism business owners
• Employees of tourism businesses
• Other business owners/managers/employees
• Government officials
• Government employees
• Taxpayers
• Local community/region citizens
• Tourists
Each of these constituent groups has its own set of priorities concerning how
resources, especially tax dollars, should be used. In addition, these groups also have
differences in opinion concerning issues such as the quality of life. For example, some
people believe jobs and higher incomes (quantity of life) are the basis for attaining
quality of life for citizens, whereas others believe environmental and cultural aspects
are equally or even more important.

Tourism business owners want the number of tourists traveling to their area
to increase so that their investments generate more income and profits. Employees
of these businesses want secure employment with fair wages and safe working
conditions. Business owners, managers, and employees in other industries want the
continued growth and success of their businesses. Government officials want strong
economies and to be reelected, whereas government employees want job security and
good wages. Taxpayers want a wide variety of government services and a bearable
tax burden. Local residents want a clean, safe community with a high quality of life.
Tourists want enjoyable and safe places to visit that offer a full range of services to
meet their travel needs.
Unfortunately, with all of these differing objectives, it is difficult for decision
makers to please all constituents. Frequently, a decision for the benefit of one group
is often seen as negative by another group. Local taxpayers may welcome the tax
revenues generated by visitors to the area but then fight additional tourism develop-
ment because it would change the landscape of the region and add to the industrial-
ization of the community. Tourism business owners strongly support the promotion
of their industry by governments, but owners of businesses in other industries often
believe that their industry should receive equal government support. Rarely is there
enough tax revenue to promote all industries, so priorities must be established.
Determining priorities is where the political tug of war among constituent groups
occurs.
You may live now (or have lived) in an area that has experienced a tourism devel-
opment political battle. We hope you now have a better understanding of the eco-
nomic and political impacts of tourism development and promotion and how different
perspectives can lead to debate. The words of tourism writer Uel Blank may give some
food for thought concerning tourism development: “Citizens’ rights to enjoy amenities
of lakes, cities, and facilities away from home carry with them the responsibility to
also share local amenities with travelers from elsewhere.”29
Summary
Economics and politics are forever linked, and the eco- ness opportunities, and increased tax revenues, it is not with-
nomics and politics of tourism are no exception to that out its costs. Large numbers of visitors strain utilities, public
rule. The use of scarce resources by the tourism industry services, and natural resources. Often, these tourists also put
can lead to a variety of positive economic impacts, as well upward pressure on prices, which increases the cost of living
as some not-so-positive effects. Virtually everyone has an for local citizens. Researchers use cost–benefit analysis to try
opinion about tourism, and the process of deciding the role to determine whether, all things considered, tourism brings
tourism will play in the economic development of an area substantial economic gain to an area.
gives rise to a great deal of political debate. Given the importance of the tourism industry to most
As you learned in this chapter, the tourism industry is countries, states/provinces, and cities governments often
often used to bring added economic vitality to an area and become involved in tourism development. The most common
frequently has a comparative advantage over other develop- role for government is collection of data on tourist activity
ment alternatives. A primary reason for tourism’s popular- and promotion of the area as a destination. A recent trend
ity as an industry is its ability to generate new money for a is for government and private tourism associations to join
region, especially in the form of exports. together to help sustain and increase the tourism industry.
Tourism revenues enter an economy and then are Building and promotion of convention centers are just one
re-spent creating additional revenues until the added money function of these public/private organizations.
finally leaves the economy through leakage—money spent on A continuing challenge for government officials and
imports to the area. This increased economic activity is called tourism industry members will be to balance the special inter-
the “multiplier concept,” and its size depends on the amount ests of constituent groups who have conflicting opinions con-
of imports a region needs to utilize to provide goods and ser- cerning the development of tourism that lead to political tugs
vices for visitors and residents alike. of war. Tourism, like any industry, has benefits and costs, and
Even though tourism adds diversity and stability to an these impacts will always be viewed and prioritized differ-
economy and provides a wide variety of employment, busi- ently by different members of communities.

You Decide
The following two letters to the editor appeared in a resort enough already. This area is losing its small-town feel and
town’s newspaper. its small-town security. Why should we pay to decrease the
To the Editor: quality of life of our community?
Summer is approaching again and, as in every year, Signed, Jack Smith
I am dreading it. By the middle of June, our town will be To the Editor:
inundated with tourists. The price of gasoline will jump After reading the letter from Jack Smith, who sees
and all of the “local appreciation” specials at restaurants only the negatives of tourists to our community, I felt
will disappear. The traffic jams will start and the number compelled to respond. Without these “foreigners” that
of car accidents will escalate. All of the stores and restau- he decries, he may not even be able to live here. Many of
rants will be mobbed and service will suffer. And forget us, either directly or indirectly, owe our livelihood to the
trying to park downtown. All the spaces will be filled by money that tourists spend here every year. And, contrary
out-of-state cars. Our policemen will find it harder to pro- to Mr. Smith’s opinion, the tourists to our town and state
tect us because they will have all of these “foreigners” to actually reduce our taxes by paying taxes on the goods and
watch. And our fire departments will begin their annual services they purchase here.
campaign against forest fires started by careless transients. In addition, do the people of this town think we locals
And now our chamber of commerce wants us to celebrate by ourselves could support the number of restaurants and
tourism and be extra nice to the “guests” to our area? shops we have, let alone the jet-capable airport we enjoy?
Frankly, I am sick and tired of some of my state tax Instead of cursing out tourists, we should smile, wave, and
dollars (and I’ll bet some of my local taxes, too!) going thank our lucky stars that we get to live where they can
to promote our state as a tourism destination! All these only visit.
new people in the area just serve to increase my taxes in Signed, Linda Jones
order to pay for the increased costs they lead to! Enough is With which letter do you agree? Why?
Net Tour
To get you started on exploring Internet links for this w ww.tinet.ita.doc.gov/research/programs/satellite/
chapter, please see index.html
www.world-tourism.org www.iacconline.org/
www.ustravel.org www.iccaworld.com/
www.occc.net www.cnccchina.com/en/
www.oanda.com/convert/classic www.travelcoalition.org/
www.etc-corporate.org/index.php www.poweroftravel.org/
www.wttc.org/ www.destinationmarketing.org
1. In what ways can tourism benefit the economy of an area? 5. What are the various roles that governments can play
2. Why are tourism receipts from international visitors in supporting the tourism industry?
considered exports? 6. How do convention centers add to the economic activ-
3. How does the multiplier concept work? Why do island ity of an area? How can they be funded and managed?
countries have small tourism multipliers? 7. What steps are needed to develop a tourism plan?
4. What are some of the negative effects that can come 8. Why can political tugs of war arise over decisions con-
from tourism development? cerning tourism development?

1. Look at Tables 11.1 and 11.2. Why are these coun- .com. How does the tourism board promote their
tries top in international tourism receipts and arrivals? destination?
In other words, what is it about these countries that 3. Research the tourist taxes that are levied in the fol-
enable them to attract so much international tourism? lowing cities: Rome, Paris, Barcelona, and Prague.
2. Visit an official tourism website, for example, How do they compare?
visitbritain.com, discoverhongkong.com, australia

4. Interview members of three different constituent 6. Based on currency exchange rate changes, which
groups and identify similarities and differences countries would be less expensive to visit now than
regarding their opinions of tourism development in 5 years ago? You may want to track the exchange
a community. rates between your currency and several other cur-
5. Based on interviews with tourism promotion agency rencies over the past 5-year period and identify three
personnel, library and online searches, and your expo- countries.
sure to the mass media, provide a list of marketing
activities performed to promote your community.
Glossary
Comparative advantage The benefits of one alternative Infrastructure The foundation utilities and other systems
relative to another. necessary for an economy, such as roads, electricity,
Constituent groups Subgroups of citizens with a set of and water and sewage systems.
common needs or wants. Joint venture Combined efforts of two or more partners,
Convention and visitors bureau An organization whose usually organizations.
mission is to develop tourism to an area by attracting Leakage Purchasing power that is spent on imports to an
both professional and leisure travelers. area, resulting in a transfer of income out of the local
Convention center A property developed to serve the economy.
special needs of groups, especially regarding meetings Multiplier concept The additional economic activity that
and trade shows. results when money is spent and re-spent in a region on
Cost–benefit analysis A method used to determine the the purchase of local goods and services.
relative impact of a development, in which total costs Nonprofit tourism association An organization that
and total benefits are estimated and then compared. exists to support the tourism industry of an area and
Destination image The detailed impression an individual often promotes the area as a destination.
or target segment has of a specific destination. Objective A specific target for which measurable results
Destination marketing organizations (DMOs) Organiza- can be obtained.
tions that are dedicated to promoting tourism activities Passenger facility charge A charge added to airline tickets
in a town, city, county, province, or region. for enplanement. The monies collected are to be used
Destination vision An inspirational portrait of the for airport improvements.
ideal future that the destination hopes to bring about Policy A general statement that provides direction for
at some defined future time (usually in 5, 10, 20, or individuals within an organization.
50 years). Privatization The action of converting a govern-
Economics The study of the choices people make in using ment-owned business to private ownership.
scarce resources to meet needs. Public/private organizations Organizations made up
Entrepreneurial Assuming the risks of a personally of private and public members, usually to coordinate
owned business. efforts between government and private businesses.
Exchange rate The number of units of one currency Superstructure The facilities needed to serve the specific
necessary to be exchanged to obtain a unit of another needs of tourists, such as hotels, restaurants, and
currency; for example, 121 Japanese yen for U.S. $1.00. attractions.
Export A good or service produced in one country Tourism planning A continual process of research-and-
and purchased by a resident of another country; the development decisions to create and sustain tourism in
opposite of “import.” a region.
Financial resources The amount of money available for a Tourism policy A master plan formulated by a government
given project through the use of debt and equity. (national, state/provincial, local) to aid in guiding the
Import A good or service purchased in one country but development of sustainable tourism industries within its
produced in another country; the opposite of “export.” jurisdiction.
References
1. Thomas, S. (2003, October 27). Receiving mixed 3. Haussman, G. (2007, June 19). U.S. ceding world
messages. Travel Weekly, 40. tourism market share. Available at: http://www
2. Lee, J. W., and Brahmasrene, T. (2013). Investigating .hotelinteractive.com. Accessed 4/10/2009.
the influence of tourism on economic growth and 4. Parker, P. (1999, March 21). Bigger is better. Denver
carbon emissions: Evidence from panel analysis of the Post, 1K, 26K.
European Union. Tourism Management, 38, 69–76.

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Plunkett’s Airline, Hotel, & Travel Industry Alma- 20151225/25e9e6f8-e05d-4ef8-a015-
nac. Houston, TX: Plunkett Research. 3164d495b04c.pdf
6. Pine, B. J., II and Gilmore, J. H. (1998). Welcome to 20. Baade, R. A., and Matheson, V. A. (2016). Going
the experience economy. Harvard Business Review, for the gold: The economics of the Olympics. The
July-August, Reprint number 98407. Journal of Economic Perspectives, 30(2), 201–218.
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Spain. Facts & Figures: Tourism 2020 Vision. (2010). Determinants of tourism success for DMOs
Available at: http://unwto.org/facts/eng/vision.htm. & destinations: An empirical examination of
Accessed 3/29/2009. stakeholders’ perspectives. Tourism management,
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Krishnamoorthy, M. (1995). Tourism Economics. 22. Pike, S, and Ryan, C. (2004). Destination
New York: John Wiley & Sons, Inc. positioning analysis through a comparison of
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Flint legend, AutoWorld. The Flint Journal. 23. Goodall, B. (1991). Market opportunity sets for
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economic impact of tourism for island economies. Recreation and Hospitality Management
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11. Los, B., and Steenge, A. E. (2010). Tourism studies 24. Kotler, P, Haider, D. H., and Rein, I. (1993).
and input–output analysis: Introduction to a special Marketing Places. New York: Free Press.
issue. Economic Systems Research, 22(4), 305–311. 25. Kay, A. L. K. (2005). China’s convention and
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ism (2nd ed.). Melbourne: Longman. Event Tourism, 7(1), 5–22.
13. Crompton, J. L., Lee, S., and Shuster, T. J. (2001, 26. So-hyun, K. (2007, December 31). Seoul to give
August). A guide to undertaking economic impact boost to convention industry. Korea Herald.
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14. Beirman, D. (2003). Restoring Tourism Destinations Convention & Event Tourism, 11(1), 2–17.
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When, How? New York: McGraw-Hill. Publishing.
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tourism in bid to boost economy. Wall Street
Journal, D5.

CHAPTER 12
Environmental and Social/Cultural
Impacts of T
ourism
[T]he long-term viability of the [tourism] industry in any location depends on maintaining
its natural, cultural, and historical attraction.
—Edward Manning/T. David Dougherty
LEARNING OBJECTIVES
1. Describe how tourism can aid the preservation of 5. Explain how carrying capacities are determined.
nature as well as harm it. 6. Describe the positive and negative impacts
2. Describe how tourism can benefit or undermine tourism can have on societies and cultures.
cultural preservation. 7. Identify the potential unintended consequences
3. Describe the impact of tourism activities on host of tourism.
community resources.
4. Explain the factors that determine an area’s
carrying capacity.
CHAPTER OUTLINE
Reflecting on the Future A Dark Side to Tourism’s Promise of Economic
Benefits
Introduction
External Influences and Internal Problems
Tourism and the Environment
Defining Carrying Capacity Summary
Determining Carrying Capacities You Decide
Environmental Impacts of Tourism Net Tour
Social and Cultural Impacts of Tourism Discussion Questions
Host Community
Social and Cultural Benefits of Tourism Applying the Concepts
Using Culture to Attract Tourists Glossary
Unintended Consequences of Tourism on References
Culture
The Demonstration Effect
340
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Chapter 12 ▸ Environmental and Social/Cultural Impacts of Tourism 341
Reflecting on the Future

As the Sun set slowly in the western sky, the tribal council paused in its discussion to
take in the beauty of the moment. This was not the first day of their discussions and
it surely would not be the last. A decision to move forward could create changes that
could never be reversed.
Some of the younger tribal members had brought up the idea of developing a golf,
tennis, and ski resort in the heart of the reservation. The area would be perfect—great
views, optimal weather conditions, and easy access from several large metropolitan
areas. There was even talk of adding a casino to the mix and creating a series of activ-
ities and events with year-round appeal.
Development of any of these ideas sounded exciting to some tribal council mem-
bers because of the variety of jobs that would be created, but there were other con-
cerns. The tribal council was familiar with the economic benefits of tourism because
the tribe already operated a motel and other small-scale attractions to encourage visi-
tors to the reservation. However, extensive tourism development was a completely dif-
ferent story. Questions were raised about how many new visitors would be attracted
and what effects these additional visitors would have on the natural environment and
the cultural traditions that tribal members cherished.
The lands of the reservation were fragile and untouched in an environmental
sense. Development would require extensive improvements to the current reservation
infrastructure to support more visitors. Some members of the council believed that an
influx of tourists would forever damage the lands on which a hundred generations had
lived. Other members expressed dismay about allowing tens of thousands of outsiders
into the heart of the reservation. Would these outsiders show respect for the ways of
the tribe? Could the tribe keep visitors out of the sacred areas, or would four-wheel-
drive vehicles be racing everywhere, ignoring any restrictions the tribe might impose?
As the council members settled back into their discussions, they reached one deci-
sion. Before a final conclusion was made on the matter, they would need a professional
analysis of the potential environmental and social/cultural impacts of each alternative.
Italy uses the nostalgia of the Roman Empire to attract tourists. Photo by Thomas Sun
M12_COOK1670_06_GE_C12.indd 341 16/05/17 2:54 PM

Introduction
In the previous chapter, you learned about tourism’s many economic and political
impacts. Historically, decision-making was focused on the financial impacts of tour-
ism in what is considered the singular bottom line of profit. However, while reading
Chapter 11, as well as many of the other chapters, you may have thought of other
benefits and problems that tourism can bring particularly to the natural resources and
the local residents. The success of tourism is now evaluated on the triple bottom line,
so that destinations not only focus on economic aspects of tourism, but also make
decisions to maximize positive impacts and minimize negative impacts on the envi-
ronment and the people who live there. For example, in Chapter 10, we considered
the range of commercialization that exists at different types of resort locations. These
developments may have been planned or they may have just happened. No matter if it
is a destination or just a stop along the road, tourists and the activities they undertake
have the potential of impacting the environment, social fabric, and cultural founda-
tions both positively and negatively anywhere they travel.
But what impact does commercial development, no matter how extensive or how lim-
ited, have on the cultural, social, and natural environment? Can the attractiveness of an
area that drew tourists in the first place be preserved when tourism development occurs?
How are residents affected by the creation and growth of tourism in their area? Will the
presence of tourism activities improve, maintain, or destroy the culture and environment
that attracts tourists? Should we even be concerned that tourism can create change?
As the chapter opener suggests, the economic impacts of tourism are not the only
important impacts that must be considered when tourism development is proposed.
Effects on nature, peoples, and cultures of a region are just as important to study and
predict as the economic effects of tourism. In this chapter, we will discuss the other
two aspects of the triple bottom line in the environmental pluses and minuses of tour-
ism as well as the benefits and costs of tourism to a society and its culture. Then in
Chapter 13, we will explore how these benefits can be sustained.
Tourism and the Environment

How can tourism be used to enhance and preserve the environment? Management,
education, and appreciation are probably the most important ways. When visitor
numbers are managed, and they see firsthand the wonders of the attraction or the beauty
of the natural setting and are educated about visitor impacts and nature’s fragile balance,
they are more likely to understand the importance of preservation efforts. In addition to
its educational role, tourism can be used to help finance the preservation of attractions
and natural areas. Revenues generated from taxes, memberships, entrance fees, and other
guest services can be used to preserve and improve the very attributes that attract tourists.
Think about the hundreds of thousands of acres of national parks and pre-
serves, nearly 12% of Earth’s land surface, that have been set aside all over the world
primarily to preserve them for future generations to enjoy.1 North Americans and vis-
itors from around the globe owe U.S. President Theodore Roosevelt a great deal of
thanks for his foresight in instituting the U.S. National Park System. Similar systems,
public and private, as shown in Table 12.1, exist in countries on all continents, from
Asia to South America.
But how can tourism managers and planners determine just how much tourism a
natural site, an attraction, or any destination can handle? What types of positive and
negative impacts does tourism have on culture, society, and the environment? The first
question can be answered by determining the carrying capacity of a location. After we
discuss the concept of carrying capacity, we will then consider some of the particular
environmental benefits and costs tourism yields.
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Table 12.1 Worldwide Examples of National Parks and Preserves

Location Park or Preserve
Australia Great Barrier Reef Marine Park
China Sanjiangyuan National Nature Reserve
Ecuador Galapágos National Park
Guatemala Laguna Del Tigre National Park
India Gir National Park and Wildlife Sanctuary
New Zealand Auckland Islands National Nature Reserve
Saudi Arabia Ar-Rub’-Al-Khali Wildlife Management Area
South Africa Kruger National Park
Tanzania Serengeti National Park
United States Arctic National Wildlife Refuge
Defining Carrying Capacity

Just how many visitors are too many? The answer is, It depends, and what it depends on
is the carrying capacity of an area. Carrying capacity is a key concept in analysis of the
potential environmental impacts of tourism. Different people mean different things when
they use the term carrying capacity, but essentially there are four elements to the concept.
1. Physical capacity—the limit on the actual number of users that can be accom-
modated in a region. Such things as the number of roads, the size of park-
ing lots, and the amount of water resources influence the physical carrying
capacity of an area. Acadia National Park in Maine is frequently marred by
bumper-to-bumper traffic during the height of tourist season.
2. Environmental capacity—the limit on the number of users that an area can
accommodate before visitors perceive a decline in the desirability of the area.
This capacity is more subjectively defined and varies depending on season, and so
forth. The beaches of St. Tropez in France are uncomfortably crowded in August.
3. Ecological capacity—the maximum level of users that an area can accommo-
date before ecological damage is incurred. For example, the alpine flora of
Waterton-Glacier International Peace Park spanning the Canadian/U.S. border
has suffered from the tens of thousands of hikers swarming the park.
Ecological capacity will vary depending on the type of use made of the area.
Backpackers will have less impact on a national park than campers who travel
through the park on horseback or in four-wheel-drive vehicles. In addition,
different types of environments are affected more or less by use. Beaches and
other dunelike areas tend to be even more fragile than mountainous areas.2
4. Social carrying capacity—is sometimes used to label the amount of people that
a society and its land area can bear without substantial damage to its culture.
FYI BRITAIN’S NATIONAL TRUST

The United Kingdom boasts of a Beauty. Started in 1895, it is the largest homes and gardens, the Trust owns or
private organization whose mission is private landowner in Great Britain controls 600 miles of coastline.
preservation—The National Trust for (Scotland also has a National Trust).
Places of Historic Interest or Natural Along with a huge portfolio of stately
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TOURISM IN ACTION
INCREASING CARRYING CAPACITY
As part of the effort to develop tourism and benefit from the economic contribution of tourist spending, Macao
has engaged in infrastructure and superstructure development to increase its carrying capacity. Macao, a city of
approximately 11.7 square miles with 646,800 residents in 2015 (which represents a 46% increase from 2002),
has progressively conducted land reclamation projects. It also has a light rail project planned. The construction
for the Hong Kong–Zhuhai–Macao Bridge, a “Y” shape, 18.5-mile bridge connecting Macao with its two main
tourist origin markets, Hong Kong and Mainland China, has started. Ferry terminals and airports also have plans
for expansion. The immigration counters at major border crossings have also extended their opening hours, some
with 24-hour around the clock service, to facilitate tourist movements.
Since the liberalization of casino gaming in 2002, the number of hotel rooms increased from just under 9,000
to over 32,000 in 2015 in response to the tremendous growth in tourist arrivals, from 11.5 million in 2002 to over
30 million in 2015. Large casino resorts offer 40- to 50-seat shuttle buses every ten minutes or so to and from all
major ports (e.g., ferry terminals, airport, and land border crossings) as well as between sister properties to trans-
port the mass number of guests. This significantly reduces the demand burden on local public transport such as
taxis and buses and the traffic that could be caused by using smaller vehicles or private transportation.
While the government’s tax receipts and tourism-related employees’ salaries increased dramatically, housing prices
skyrocketed due to influx of expatriates and foreign professionals as well as the shortage of land. This presents eco-
nomic hardship for small business owners who have to pay higher salary to retain their employees and higher rent for
their offices and shops. Many of the “mom and pop” stores that are part of the Macao culture for generations have
since closed. Many young people, instead of going to college, are drawn to the casino and tourism-related jobs due to
attractive pay. Macao is now more modern, with numerous international branded retail operations dotting the landscape.
Sources: Based on Tourism Statistics (http://www.dsec.gov.mo/Statistic.aspx?lang=en-US&NodeGuid=7b23463a-d253-4750 -
bd12-958030df5ccb), MACAO GOVERNMENT TOURISM OFFICE (http://industry.macaotourism.gov.mo/en/Statistics_and_
Studies/list_statistics.php?id=29&page_id=10).
While determining ideal carrying capacities is an ideal goal, it is important to

remember that there is no universal definition of carrying capacity.3 Carrying capacity
is more like an ideal concept. The conditions needed to establish a carrying capacity is
rarely achieved in the real world. Instead of determining the limit, it is more important
to answer “what are the appropriate or acceptable conditions?”4 What becomes appar-
ent in all of these capacity descriptions is that there can and should be limits to tourism
activities. Too much of anything is not good, and there is no exception for tourism. There
are limits to where benefits can be gained and problems of degradation begin. Basically,
these limits are reached when crowding, either real or perceived, occurs and damage
begins. The bad news is that all of these definitions point to the conclusion that there are
limits to the number of tourists that can be accommodated in any one location or area.
The good news is that with planning and management the integrity and benefits
of tourism can be maintained and achieved. By determining carrying capacities, which
we will examine in the next section, optimum tourism numbers can be identified and
controlled. In addition where planning and investment have been employed, capacities
can be increased and growth can be accommodated.5 For example, through planning,
tourism-generated proceeds have come to represent a significant revenue source,
increasing employment, household income, and government income for South Korea.6
Determining Carrying Capacities

As you can see from the previous definitions, preserving the physical and natural
features that attracts visitors requires managing the carrying capacity of a location.
As places become discovered or grow in popularity, more and more people will come.
It might be tempting to “shut the door” or take down the “welcome” sign and hope
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FYI DENSITY
In China, almost all workers have their holiday (October 1). Even if only a portion of the Great Wall receives about
holidays at the same time, during the so- portion of the 1.3 billion people take a 65,000 visitors a day and the Imperial
called “Golden Weeks.” These week- vacation during these periods, that’s Palace would see about 128,000 vaca-
long periods are the Chinese New Year a lot of people on the go and at tourist tioners walking through the front gate
holiday (usually in February), Labor attractions. For example, at the peak each day.
Day holiday (May 1), and National Day of the Golden Weeks, the Badaling
Source: Based on National Day Golden Week Holiday Crowds Throughout China by Paul, published by chinaSMACK.
that this would stop or limit the number of visitors. Would hoping that no one else will
come be the right thing to do? The answer, is no.
The solution lies in planning and management. To determine the carrying capacity,
planners must look at a variety of factors, including:
• The number of visitors,
• The amount of “use” by the average visitor,
• The quality of resource management and facility development/design,
• The number of area residents and their quality-of-life needs, and
• The number of other users of the area and its resources; for example, industrial
users and farmers/ranchers.7
The historic old town area in Charleston,
South Carolina, provides an excellent example of
destination management. The numbers of people,
both tourists and residents, who flock to see and
enjoy this well-preserved charming southern city
could soon overwhelm and destroy its very char-
acter if limits were not in place. The city has taken
proactive steps to preserve this charm by limiting
things such as the number of carriages (a popu-
lar way to enjoy the architecture and history of
the area) that are allowed in the historic district
by the use of a restricted number of medallions.
At the entry point to the district, carriages wait
in line to be issued a medallion before entering.
This medallion must be displayed on the rear of
the carriage as long as it is in the district. Once
the carriage leaves the district, the medallion
is returned at the entry point to be used by the
next carriage in line. Not only are the number of
carriages limited, but the drivers must also alert
cleanup crews to pick up after their horses when
they stop to relieve themselves.
Wyoming’s Grand Teton National Park pro-
vides another good example of capacity control
in practice. About 3.5 million visitors arrive each
year to play and marvel at the mountain majesty
of the area. At the same time, the nearby town of
Great Wall of China. Overcrowding can negatively impact Jackson Hole has exploded with new full- and
the enjoyment of the experience. Wong Chi Chiu/Fotolia part-time residents. The area also supports its
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traditional agriculture-based industries such as cattle ranching. And the amount of “use”
by visitors has increased. In the past, use was primarily hiking and low-impact sports of
nature (such as fishing), but visitors now bring all the comforts of home—and more—
with them. Dan Burgette, chief of the Colter Bay subdivision of the park, states:
The toys people bring to the park have changed. Twenty-five years ago they would
have a car and a tent. Now they come with a motor home, a boat, trail bikes, and
a car in tow. Parking lots built in the 1960s just aren’t big enough. One of our
biggest chores is getting people to turn off their TV sets and gas-powered electric
generators at ten o’clock at night (p. 136).8
The preceding quotation suggests that the carrying capacity of an area changes
when any one or more of capacity’s determining factors change. For example, if a
town begins to see an increase in permanent residents, it will not have as high a “visi-
tor” carrying capacity as before because the additional residents “use up” some of the
finite carrying capacity of the area. On the other hand, the carrying capacity of a site
can be increased by reducing the amount of “use” by each visitor. Constructing visitor
walkways allows more foot traffic in a fragile natural area; busing visitors from remote
parking lots cuts down on air pollution within a park; and creating viewing platforms
allows many more visitors to view the scenery without endangering the pristine site.
Another suggestion that has been mathematically modeled and appears to hold
promise for allowing increased use while increasing a sense of solitude is to stagger
entry lines. Park managers at the Athabasca Falls site in British Columbia have used
all of these means—walkways, buses, and view platforms—to decrease the erosion and
vegetation trampling that had threatened its natural beauty.9
As you can see, identifying the carrying capacity of an area requires thorough
research. The management of a natural attraction demands careful environmental
planning and creative carrying capacity design to balance visitor enjoyment and educa-
tion with the well-being of the flora and fauna of the location.
Environmental Impacts of Tourism

To provide services to visitors, a tourism area must first develop the necessary infrastruc-
ture to support these services. This was just like the concerns being raised by the tribal
council members in the chapter opener. Infrastructure is the underlying foundation or
basic framework for a system or organization. In the case of tourism, infrastructure
includes roads, ports and airports, and utilities such as electricity and water and sewage
systems. In addition, superstructures will be needed. The superstructures of tourism are
the facilities directly associated with serving visitors’ needs such as welcome centers,
hotels, restaurants, car rental facilities, tour company offices, and retail establishments.
Obviously, the development of the infrastructure and superstructure necessary for
tourism will have an impact on the environment of an area. However, the impact can be
minimized with good design and planning. For example, the use of underground lines
for utilities can retain the more natural look of vistas, whereas appropriate design of
buildings, in terms of colors, height, signage, and landscaping, may even enhance their
beauty. Many resort communities have ordinances that require harmony in architec-
ture, color, and signs so that human-made structures blend into the natural setting. For
example, in Sedona, Arizona, architecture, color schemes, and signs must follow design
restrictions so that the community fits into its awe-inspiring, red-rock formation setting.
Unfortunately, such design foresight does not always occur. In the earlier days
of tourism development in Hawaii, hotels were built along the beautiful beaches of
Oahu with little regard to the “scenic impact” they would have. Today, these hotels
completely block the view of the ocean. Developers of the other islands of Hawaii have
learned from the mistakes made, and regional planners and developers are now more
careful with their designs.3,10
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A substantial increase in the number of people using an area’s resources is likely to

have a detrimental impact on the environment. This impact may simply be annoying,
such as increased traffic or crowded parks; but the impact may be severe enough to
cause harm to a fragile natural area. For example, the Taman Negara National Park in
Malaysia is suffering from the impacts of human intervention as visitor numbers have
exploded. This astounding increase in tourists has made wildlife scarce, and the forests’
floors have become littered with garbage.11 Likewise, Banff National Park, Canada’s
oldest national park, continues to suffer from the millions of visitors it receives annually.
Many places in its tundra wilderness have been “trampled by so many hikers that in
places the route resembles a boggy, 20-foot-wide cattle trail” (p. 50).12
Air pollution can become a problem with the increased level of vehicle traffic in
an area, along with other activities that cause air-quality problems. For example, the
congestion of cars through Yosemite National Park causes the very air pollution that visi-
tors try to escape by fleeing to national parks. Some communities have taken serious steps
to try to reduce the other forms of air pollution that can be caused by tourism’s success.
In the mountain valleys of the Rockies, it is now common for towns to prohibit hearth
fires on many winter days, because wood smoke is so dense and dissipates very slowly.
In addition to air pollution, noise pollution is becoming a new problem in many
communities, especially with the relocation and/or expansion of airports. Noise pollu-
tion is even a problem at the Grand Canyon. Each year, about 80,000 scenic flights take
tourists low over the canyon, creating an airplane buzz that disrupts the tranquility of
its splendor.13 In 2000, to restore peace and quiet, Utah’s Zion National Park became
the first park outside Alaska to ban nearly all cars. Tourists now take shuttles from the
visitor center to experience the natural sights in the canyon.14 Similar limitations have
been put in place around the world, including the Jiuzhai Valley National Park, China.
Light pollution is another issue that has a close relationship with the tourism
industry. The infrastructure and superstructure that support tourism contributes to
pollution through the conveniences and safety that artificial light provides tourists. It
has been estimated that over 99% of the population in the 48 contiguous United States
lives in an area with light pollution.15 The desire to see the night sky without pollu-
tion has created a new target market of dark sky tourists and National Parks such as
Yosemite, Acadia, and Death Valley have developed night sky interpretive programs to
meet the demand.16 Dark sky tourism must be proactively managed in order to avoid
development that contributes to light pollution, thereby reducing the ability to see the
very resource that attracts the tourists.
Possibly most damaging, however, is the impact that can occur to vegetation, wildlife,
and precious historical attractions. Unplanned or poorly planned development can lead to
the endangerment of flora and fauna species and to the erosion of the very sites that are
the destination’s “reason for being.” For example, the government of Egypt is excavating
more of the dozens of pharaoh burial sites in the hope that by providing more sites, they
can reduce the amount of tourist traffic to the Great Pyramids in Giza. Each year, millions
of visitors troop through the most famous pyramids, worsening the water vapor problem
that causes salt to leach from the stones and weaken the structures.17 Other countries,
such as Mozambique, which is recovering from years of civil war, have demonstrated the
power of tourism’s economic benefits for enhancing culture and the environment.18
Historic site deterioration can occur in more modern locations as well. Many
historic towns in the United States have applied the brakes to tour buses rolling
through their streets. For example, New Orleans officials stopped all tour bus access to
the French Quarter owing to the damage inflicted on the delicate architecture by the
vibration of hundreds of buses passing through the narrow streets. Other cities are
considering similar restraints.19
Virtually every year, the National Park Service considers limiting the number of peo-
ple into Yosemite National Park. In the meantime, roads have been upgraded to allow
better bus access through the park to try to encourage visitors to leave their cars outside.
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TOURISM IN ACTION
VENICE
Environmental and cultural issues are not restricted to natural destinations. One of the world’s most beautiful and
historic cities—Venice, Italy—is suffering from tourism’s success. This cradle of European civilization, 1,500 years
old, includes incredible riches in terms of art, architecture, and history. Ten million visitors each year travel to it and
marvel at its beauty. So what’s the problem?
The problem for Venice is its location and its size. Venice is an island city, constructed on pilings sunk into the
sea and connected by causeway to the rest of Italy. The ancient city is a mere three square miles in size, with a
permanent population of only 70,000 residents. And the streets were built hundreds of years ago, which virtually
prevents the use of cars, buses, and trucks. Its famous canals and gondolas are a prime form of transit, but they,
too, are small. Each day between 50,000 and 150,000 tourists descend on the city and crowd the streets to the
point that simply walking across a town square becomes nearly impossible.
This overcrowding is taking its toll on more than just citizens’ blood pressures. The amount of garbage and trash is
massive and difficult to dispose of due to the city’s size, location, and lack of transportation options. And the crowds of
visitors are taking their toll on the ancient churches, palaces, and other historic places. Solutions that are being considered
include selling tickets and limiting the number of guests who can visit the city each day, as well as allowing only tours
that follow differing itineraries so that the crowds are more evenly spread through the streets and the city’s monuments.
Source: Based on National Geographic, 187(2), 70–99.
Mesa Verde, a world-famous archaeological site of early Native American settlements, limits

access to the more popular ruins by utilizing tickets. As the market for tourism grows, car-
rying capacity and means to enhance it will be a major concern for planners and managers.
The United Nations Educational, Scientific and Cultural Organization (UNESCO)
is attempting to preserve many of the world’s historic cities and natural and cultural
properties for future generations. For example, UNESCO has declared Lunenburg, Nova
Scotia, Canada, as having unique value to be preserved for the education and enjoyment
of future generations by declaring it to be a World Heritage Site. “The World Heritage
Convention (UNESCO) is the most important international agreement aimed at preserving
cultural heritage and one of the most successful international conventions ever drafted when
measured by the number of state parties involved and the number of sites included.”20 In
addition to over 1,000 sites that are recognized on the World Heritage List, UNESCO also
makes designations to the List of World Heritage in Danger if a site becomes threatened
and needs corrective action to manage ascertained or potential danger.21
To assess and plan for the maintaining or improving the current benefits of
tourism as well as planning for potential growth should require the use of strategic
environmental assessments (SEAs). The application of SEAs in tourism planning is still
in its initial stage of application when compared to other industries. As you saw in
Chapter 11, tourism planning is a complex process involving many different steps as
well as needing to include the many different sectors of the tourism industry to gain a
holistic picture. Therefore, an integrated approach involving all sectors of the tourism
industry is needed for SEAs to assess the growth and impact of tourism.22
Tourism is considered by some to be one of the economic sectors least prepared to
deal with the potential risks and opportunities that may be brought about by climate
change. Whether you think climate change is inevitable or you are agnostic to possible
changes, the thoughtful responses to varying climate change scenarios from the tour-
ism industry are critical to the sustainability of tourism.23
To try to preserve the environment and still gain the economic benefits of tourism,
ecotourism has evolved. Although protection of the natural environment is the key com-
ponent of ecotourism (sometimes called “green tourism” or “alternative tourism”), protec-
tion and appreciation of the native peoples of an area are also two of its guiding principles.
We will take a closer look at ecotourism and other sustainability efforts in the next chapter.
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Social and Cultural Impacts of Tourism

The concepts of society and culture are closely linked. A society is a community, nation,
or broad grouping of people who have common traditions, institutions, activities, and
interests. Culture represents the practices of a society; its customary beliefs, social roles,
and material objects that are passed down from generation to generation. Again, as we
saw in the chapter opener, tourism’s potential effects on the culture of a society are often
major concerns when tourism development is being considered. Tourism’s impacts on
a society can be both positive and negative. Because tourism brings “outsiders” into a
society, it has the possibility of influencing that society by changing its culture.
Host Community
Tourism, by its very definition, takes place at a location distant from one’s hometown.
The community a tourist is visiting is often termed the host community. Local resi-
dents of the host community share facilities and services with the guests to the area. In
this way, the town and its inhabitants become “hosts” to the visitors.
A host community is composed of four resources (see Figure 12.1). The most obvi-
ous resource is the local residents, the hosts themselves. They interact directly or indi-
rectly with tourists on many levels: for example, serving tourists at restaurants or in retail
stores, enjoying the local parks with them, or talking with visitors while waiting in line
at the local amusement park. The community’s economic system is also a resource of
the host community. The economic health and wealth of the area are created and used
by both residents and the community’s guests. The infrastructure and basic government
services are the third resource of the host community. The residents of the community
literally share the roads, the sidewalks, the water system, and police and fire protection
with the guests to their area.4 Finally, the natural resources of the community are also
The historic and cultural significance of the monuments and museums on the National
Mall in Washington, D. C. attract millions of tourists each year. Photo by C. A. Cook
M12_COOK1670_06_GE_C12.indd 349 16/05/17 2:55 PM

Local Economic
Residents System
Infra- Natural
structure Resources
FIGURE 12.1
Host community resources.
shared among residents and visitors. Residents and visitors often enjoy the same beaches,
rivers, lakes, and mountains. This blending of local people and their resources with out-
siders can have many social and cultural impacts, some positive and some not so positive.
Social and Cultural Benefits of Tourism

In addition to economic gains, tourism can provide many social and cultural benefits. By
bringing people from a wide variety of places and cultures together, visitors and locals
learn about each other, their differences, and their similarities. They also become aware of
new tastes and ways of thinking, which may lead to increased tolerance among the hosts
and the visitors. After 18 years, the United States lifted the travel ban on Libya in February
2004 because of its progress in fighting terrorism. In April 2004, a Dutch firm signed a
$2 billion contract to develop four new tourism resorts on the coastline of Libya. Libya
now has a Tourism Ministry to oversee its infant tourism industry. Although tourism flows
were staunched due to civil unrest and a regime change, only time will tell whether citizens
of the world will feel comfortable traveling in the previously controversial region.24
Another important cultural benefit of tourism is the attainment of the “critical
mass” of interest necessary to maintain the viability of a society’s culture, especially the
culture’s authentic art forms.25 The opportunity to sell native crafts or to perform to an
enthusiastic audience can entice local artisans to continue traditional art forms that oth-
erwise may no longer be seen as a viable means of income. For example, in Fiji, islanders
have turned their crafts of palm mats and shell jewelry into lucrative tourist businesses.
They also earn additional income by performing folk dances, including fire walking.26
In many cases, the growth of tourism in developing countries, such as Turkey,27 has led
to improved standards of living and greater educational opportunities, especially for women
and young people who were formerly “enslaved” by tradition. In Spain, for example, growth
in tourism led to the employment of many young women outside the home and gave them
lifestyle choices other than the homemaker role that had been their only option in the past.28
At the same time, tourism provides the opportunity to preserve the region’s historical
and natural sites. Revenues from tourist fees and taxes afford the host area the ability to
produce income and create jobs from lands and historic sites that would otherwise have
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FYI ARE YOU A RESPONSIBLE TRAVELER?

To be a responsible traveler, you must • Will you respect local citizens and • Will you make the extra effort to seek
respect the area to which you are refrain from all activities that might out and support these local service
going. Simply taking in the sights won’t change local behaviors? providers?
work. Before you leave home, consider • Will you walk or use public transpor- • Will you make the effort to try locally
these points to see if you are a respon- tation whenever possible (may be grown and harvested foods and
sible traveler or if your actions could even rent a bicycle)? enjoy local food specialties?
cause adverse cultural, environmental, • Will you make every effort to not disturb
or economic impacts: There are many other things to
and preserve local flora and fauna?
consider, but knowing a bit of the
• Have you studied the culture or cul- • Will you reduce and conserve on your local language, asking questions, and
tures of your destinations? power and water consumption? listening will take you a long way in your
• Do you know the basics dos and • Have you researched the names and quest to blend in and enjoy any place
don’ts of these cultures? addresses of local tourism service your travels take you.
providers?
to be industrially developed to achieve a higher standard of living for the local people.
It is the influx of tourist piastres (the currency of Egypt) that is providing Egypt with the
funds necessary to uncover and preserve that culture’s ancient past. Spain has similarly
used tourism demand to aid in historic preservation. The Spanish government devel-
oped a system of inns—Paradores de Turismo—that utilizes the room capacity of many
of Spain’s historic castles, monasteries, and convents. By generating revenue from these
classic buildings, Spain can afford to maintain them, preserving them for the future.
Using Culture to Attract Tourists

Remember that culture includes the practices of a society, including its material
objects. These practices and objects can be grouped into three categories:
• material goods of culture,
• daily life activities of culture, and
• special expressions of culture (i.e., special events or sites of special historical value).
The material goods of a culture include its distinctive arts and crafts. Daily life activities
of a culture include its food and dress forms, its language, and its special ways of playing,
living, and working. Special expressions of culture are found in a culture’s unique history,
architecture, and special traditions. One of the most well-attended cultural expressions in
the world is the daily changing of the guard at Buckingham Palace in London.
Think of the many destinations that you might have visited or heard about and con-
sider how many of them attract visitors based on one or more of these elements of cul-
ture. Many destinations experience a substantial influx of tourists who are attracted by
the local handicrafts and traditions of the area. The American Southwest, for example,
is world renowned for its beautiful Native American crafts. The Bahamas are famous for
the variety of straw goods produced by its people. Spain attracts tens of thousands of
students each year who are studying Spanish. France attracts visitors eager to partake of
its renowned cuisine and to view the wealth of art exhibited in its museums and galleries.
Greece is a popular tourism destination because of its important historical role in the
evolution of Western civilization. And the United States and Canada have turned into
the world’s playgrounds, attracting millions of international visitors who participate in
the vast array of leisure activities available on the North American continent.
Need more examples of the importance of cultural elements in attracting visitors? The
Middle East is the cradle of three of the world’s most prominent religions—Christianity,
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Table 12.2 Places to Experience History

To Experience Visit
Greek Empire Era Temple of Apollo Epicurius erected at Bassae. Visitors at the British Museum in
London can view an excellent example of an Ancient Greek temple. What makes
this experience especially unique is that the temple has been disassembled,
transported to London, and then reassembled and placed on display.
Roman Empire Era Fortifications at Masada. Travel to a large plateau on the eastern edge of the
Judean desert in Israel and look out over the Dead Sea and contemplate the
bravery exhibited by the Jewish rebels under siege by the troops of the Roman
Empire.
The Middle Ages Venice and its Lagoon. Visitors will find 118 islands, 150 canals, and 400 bridges
that form an intricate web to explore a city of history, art, and treasure.
The Mobility Era Old Havana, Cuba. Travel to this destination and find a city seemingly frozen in
time (an amazing array of architectural designs) at the beginning of the mobility
era, but on the verge of bursting into the modern tourism era.
The Modern Era Sydney Opera House. Sitting on a prominent peninsula jutting into Sydney Harbor,
visitors can’t help but notice a building that continues to inspire imaginations
and awe based on its modern architectural form.
Source: Based on World Heritage List, http://whc.unesco.org/en/list.
Judaism, and Islam. Literally millions of people trek to various sites in the Middle East
as a form of pilgrimage. Salt Lake City serves a similar role for members of the Church
of Jesus Christ of Latter-day Saints. Italy, Mexico, Peru, and Turkey provide unique
opportunities for visitors to see the architectural marvels of past civilizations.
Even industry and education can attract visitors. You have probably toured
“industrial attractions” yourself. How about the Hershey chocolate plant in
Pennsylvania? How about wineries in California, New York, or Washington State? And
many colleges and universities are popular sites—Oxford and Cambridge in England,
Yale and Stanford in the United States, the Sorbonne in France, and many more.
The list of destinations and attractions (see Table 12.2) that are based on culture
is almost infinite. The cultural resources of a society provide many opportunities to
generate tourism revenues. Often, the society also gains by meeting and sharing with
people from other cultures, each one learning and appreciating the other. But some-
times tourism brings problems to a culture.
Unintended Consequences of Tourism on Culture

Although we have provided a long list of benefits that tourism can offer, there can be
some unintended negative effects of tourism on a society and culture.29 Newcomers or
visitors to a society may cause problems owing to overcrowding or by bringing unfa-
miliar behaviors.30
Once tourism in an area becomes successful, it is common for local residents to
resent sharing “their” resources and facilities with visitors. Frequently, the residents
of the area forget that many of the facilities in the area (both infrastructure and super-
structure) were developed to serve the tourist market and would not be available for
locals’ use if the tourists did not return year after year. As we saw in the “You Decide”
of Chapter 11, communities can split apart by the debate over the effect of tourism on
the area when it begins to influence the quality of life of the local residents.
While you read in the previous section that the use of material goods, daily
life activities, and special expressions of culture to attract tourism can be positive,
there are also risks of sharing the local culture that can have negative consequences.
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The culture of Europe, represented in its abundant museums, may be its greatest appeal
to tourists. Photo by Thomas Sun
Authenticity is a key ingredient to the success of using culture to attract tourists.

There are cases when tourists request that traditional crafts be made in different
sizes to fit in a suitcase or in a different color based on the tourists’ preference, or
perhaps a tour company requests that indigenous people perform a sacred dance on
a regular schedule.31 Over time, the demand from tourists causes the local craft to
lose its integrity or standard of quality, and dance or similar expressions begin to
lose their meaning and the tradition becomes diluted when performed on demand for
the tourists.31 Another issue with potentially negative consequences is when tourists
choose to purchase souvenirs that are mass produced outside of the region so they are
less expensive than ones made by the locals. Rather than supporting the local people
and their authentic culture, tourists who purchase imported souvenirs contribute to
leakage which also hurts the economy.
The Demonstration Effect

Another serious societal problem can occur especially in lower-income areas. In some
locations, tourism has caused what is termed the demonstration effect. It has been
argued that the demonstration effect can occur in both directions: a member of the
host group imitates the tourist or a member of the tourist group imitates the host.
There are five stages that occur in this process: observation of a behavior, analysis of
the behavior, comparison of the current behavior with the observed behavior, evalu-
ation to determine if the behavior can be copied, and finally a decision to copy the
behavior in some form.32
Compared with their own lifestyles, the local residents often see the visitors as uni-
formly wealthy and in possession of all the “good things” in life. This display of mate-
rial goods and affluence may lead to envy and resentment from the locals. This effect
can happen in developing island countries, such as Jamaica, as well as in industrialized
countries. In Great Britain, many locals resent the large number of wealthy Arabs who
visit that country each year.33
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Tourism’s effect on young people may have a detrimental effect on the culture of
an area. The youth of a region are the most likely to seek the jobs created by the tour-
ism industry, which are often higher-paying than the traditional work available, for
example, farming. It is common for a young man or woman in a developing nation to
be able to earn much more than his or her elders and to flaunt this disparity through
the purchase of material goods. This apparent casting away of the society’s traditional
ways can cause rifts in families. The younger generation is also the most likely to copy
behaviors of the tourists that may be considered improper in the region’s culture.
The advent of a substantial [tourism] industry in an area tends to diminish the tra-
ditional ways and inject the styles, tastes and behaviors of the tourists into the local
people. Tourism tends to increase the standard of living of those involved in it but
also transforms the very fiber of the community, frequently separating a formerly
homogeneous group into classes and divergent generations (p. 143).22
Developing countries can experience a subtle change in their class system from tour-
ism. It is common for ownership of the tourism businesses to rest with foreigners, who
also frequently bring expatriate managers to fill the higher-skilled, higher-paying jobs cre-
ated. In these instances, tourism can be viewed as a modern form of colonialism, in which
the host country is “exploited” for its natural beauty but does not participate in the most
lucrative return from the industry. This foreign ownership resentment can also occur in
industrialized countries as investments are made by those considered to be outsiders.
The world of the Sherpas of Nepal, about whom we will learn more later, has
been forever changed as tourists became a part of their lives. When Nepal opened up
to tourism in 1964, the handful of visitors who ventured into the pristine countryside
could be counted in the hundreds. By the 1980s, the numbers had exploded to well
over 200,000 and then to over 700,000 by the 2000s with nearly 100,000 of these
visitors planning on trekking during their visit. Drawn by magnificent scenery and a
unique culture, these visitors needed lodging along very concentrated trekking routes
on their quests to see Mount Everest. As more lodges were built, more trees were
cut for firewood; more shops were opened to offer supplies; and more “comforts of
home” appeared. Tourism thus became the economic focus of the Sherpa who operate
the lodges and restaurants, sell the goods, and serve as guides. As the Sherpa focus on
tourists, the old ways of agricultural subsistence farming are slowly fading away.34
A Dark Side to Tourism’s Promise of Economic Benefits

It has been said that prostitution is the oldest form of business, and the advent of sex
tourism, once called prostitution tourism, probably wasn’t far behind. The problems and
misery of this shadowy and often invisible side of tourism have often been overlooked or
ignored. In poor countries, especially those with low standards of living, where just getting
enough to eat can be a real and recurring problem, sex tourism has tended to flourish.
Because it can be a lucrative cash business, just like the drug trade, it flourishes where it is
not controlled. The lure of easy cash and the desire to escape poverty can create situations
where locals are attracted to sex tourism. The money generated from sex tourism then cre-
ates envy usually aggravated by the demonstration effect resulting in pressure for locals to
set aside or ignore traditional societal norms to cater to deviant tourist behaviors.
Sex tourism can cause deep resentment, split both families and communities, and
in the extreme, irreparably damage lives. As noted by Karsseboom,35 while sex tourism
brings shame to husbands, fathers, and brothers, it is often a substantial part of
many families’ incomes . . . as men leave their families in search of work and better
lives . . . women are left with the burden of providing for themselves and their fam-
ilies in a society that pushes them into a way of life that it shuns (p. 32).
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This problem is especially prevalent in economically depressed or politically unsta-

ble countries where the lure of money and a better life draw suppliers and their prey
into commercial sex.
Researchers believe that the phenomenon of sex tourism has grown dramatically
in recent decades because there are:
• increasing numbers of individuals traveling, especially to new and distant
destinations;
• more situational abusers; individuals who did not intend to engage in sexual acts,
but who get caught up in an atmosphere of freedom in their travels and lose their
inhibitions;
• too many (often very poor) people, sometimes including local law enforcement,
who derive too much income from the sex tourism trade to shut it down; and
• which has resulted in an increasing number of victims.36–38
Once it takes root, it is very difficult to shut it down.39 It is even more appalling to
note that, as the sex tourism has grown, the age of victims has continued to decrease
with “some as young as five years old” (p. 2).40
While the majority of sex tourists come from the United States, Canada, and the
European countries, governments worldwide are stepping forward in a unified front to
bring awareness to the problem and fight it with criminal penalties. As these information
and enforcement efforts are combined with those of non-governmental organizations, air-
lines, hotels, tour companies, and travel agencies, there is hope that this pervasive problem
of human slavery can be brought under control. For example, the Australian government,
in cooperation with the tourism industry, developed a “Travel with Care” leaflet that “is
distributed in airports, travel agencies, travel medical centers, passport offices, embas-
sies, and visa offices…and tour operators must complete the mandatory child sex tourism
component before finishing their studies” (pp. 468–469).27 And, Air France shows a video
on long-haul flights targeted at male passengers traveling to developing countries for the
purpose of sex tourism, warning perpetrators that they will go to jail.41
External Influences and Internal Problems

Many areas find that tourism development is the only viable “export” industry and therefore
change their political and economic structures to accommodate the needs of tourism devel-
opers and tourists. To encourage tourism, the local governments often waive taxes, import
restrictions, and environmental safeguards on tourism investors and develop infrastructure
that is mainly available to tourists and not the native population. In this way, the natives see
the trappings of a better life but do not participate in it. In 2004, factions within (and outside
of) the Dominican Republic were arguing about denationalizing parklands to allow new
tourism developments, thus expanding the tourism industry within the island country.
Crime also can become a serious societal problem when tourism succeeds.
Researchers believe this phenomenon is due to both the increase in the number of
potential victims and the resentment and envy of the apparent wealth and carefree
attitude of the tourists. Milman and Pizam found a relationship between tourist
season and crime season: Crime increased at the height of the tourist season but was
lower during the off-season.42 Researchers suggest that the larger number of people
in an area increases a criminal’s potential gain from crime and decreases the chances
of being caught. This increase in crime becomes a social and economic burden on
the local area because it raises fear and necessitates funding a larger police force.
Unfortunately, another social ill that sometimes occurs with the development
of tourism is a decline in the moral conduct of the local people. This moral decay—
promiscuity, prostitution, alcohol, and drug use—is particularly damaging to a society
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that had few of these behaviors owing to a strong religious or cultural taboo against
them.
Finally, some cultures have balked at the effect tourism has had on their language.
Because so many tourists and business travelers use English as a common communi-
cation means, the native tongue loses its value and is replaced by English owing to
employment qualifications and the demonstration effect. The French seem especially
sensitive to threats to the French language. One of the biggest fears concerning the
development of Disneyland Paris was the effect that English usage in the park would
have on the native language.
Many of these unintended consequences can be seen in the once isolated country
of Nepal. Each year, more than 20,000 visitors arrive at the base of Mt. Everest in
Nepal. The Sherpa, a native people of the region, have flourished from this influx of
international travelers.
Strong, congenial, and adept at business, Sherpas play a role in the tourist trade
rivaled by few indigenous peoples in the world. Sherpas own most of the 300-plus
lodges and hotels and many of the companies that organize the treks. Tourism has
made the Sherpas of Khumbu rich, or at least considerably richer than most of their
neighbors (p. 54).43
Sherpas involved in tourism earn incomes five times the average for Nepal as a
whole. Recently, the Sherpas have begun “subcontracting.” The Sherpas organize and
guide the mountain treks but now subcontract the “heavy lifting” (of gear and sup-
plies) to less-well-paid members of other area natives.
This increased prosperity for the Sherpas has not been achieved without problems.
This new dependence on tourism means that world events now affect the Sherpas’
lives. For example, the Sherpa community saw a reduction in the number of visitors
when they staged a strike in 2014 which ended the climbing season and then an ava-
lanche in 2015 closed the climbing activities for the whole season.
Owing to Maoist insurrections within greater Nepal and the armed security that is
required, tourist numbers dropped nearly 40% by 2004. Interaction with peoples from
around the globe has also led young Sherpas to leave their native mountain home for the
outside world, primarily Kathmandu, for an easier life, better education, and a variety
of jobs. And the Sherpas now are experiencing irritants from modern technology. In
an area where telephone service was nonexistent, the cell phone has arrived and signal
disruption is a new irritant that the Sherpas now share with the rest of us!25,32
The examples just mentioned are only a few instances of the unintended conse-
quences that tourism can have on a society and its culture. Most of tourism’s negative
impacts on the physical environment are also unintended. The influx of thousands of
visitors to a region is often too much for the environment and the host community to
withstand without stress. Tourism to an area in large numbers is called mass tourism.
Summary
In addition to potentially positive economic benefits, precious historical and cultural sites have survived because
the tourism industry can have negative impacts on of visitors willing to pay to view treasures of the past.
the environment, cultures, and societies. When visitor Carrying capacity is a key concept in determining the
numbers are planned for and capacities are managed, impact that tourists may have on an area. Both the physical
the revenues generated through taxes, memberships, and and social carrying capacity of an area can be analyzed by
entrance fees can be used for marketing and educational considering factors such as number of visitors, type of use, and
efforts to create awareness and minimize the potentially number of residents. The carrying capacity of an environment
negative impacts of visitor activities. By preserving and or host community will be increased or decreased by
maintaining the attractiveness of an area or destination, changes in the situation such as better planning or increased
economic vitality can also be maintained. Achieving this intensity of use by visitors. The increase in visitors to tourist
balance has been a proven success, as many of the world’s destinations, whether natural or human-made, has heightened
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the need for managers to expand carrying capacity through to do so can lead to a variety of unintended consequences
creative facility designs. from what should be positive economic benefits. When
For hundreds of years, communities have utilized tourism grows unchecked, locals may not only become
natural and cultural resources to attract visitors. However, resentful and even envious of visitors, but they may also
as tourism continues to grow, additional attention and witness increases in crime, congestion, and what many
efforts will need to be focused on planning, management, consider to be a “way of life,” or a desire to return to “the
and preservation efforts. History has taught us that failure way it was,” before tourists arrived.
You Decide
Alaska, population 600,000—the last frontier of the spent $900 million into Alaska, mostly in wages and retail
United States. Far away, difficult to get to, inhospitable. sales. Three-quarters of Skagway’s $80 million in revenues
Not today’s Alaska. Thanks to the cruise industry, anyone came from [the cruise industry]” (p. 98). Former railroad
can visit the distant sights of Alaska, even the far interior conductor, now day-tour operator Steven Hites says, “If it
Denali National Park. In the past, Mount McKinley, at the weren’t for the cruise industry, my little town of Skagway
heart of Denali park, was visited by relatively few hearty would have been boarded up” (p. 98).
backpackers. With the influx of dozens of cruise ships each In the oil-supported state, where there is no income,
summer season, over 100,000 visitors view the majesty of sales, or property tax, some towns have tried to tax
the tundra of the park. Carnival Corporation alone moved the cruise lines. For example, Haines passed a 4%
110,000 cruisers from its ships onto its trains and to its organized-tour tax in 2001. Cruise lines dropped the port
hotels on the outskirts of Denali. from their future itineraries, and the decline in the town’s
The 800,000-per-summer cruise passengers have revenues resulted in a 40% increase in the unemployment
most affected the tiny coastal towns of Alaska, such as rate (9%–12.5%). In 2003, Haines repealed the tour tax,
Skagway (year-round population 862). On a typical sum- hoping that the cruise ships would return. With the return
mer day, 9,000 passengers descend from their “floating of cruise ship traffic, the unemployment rate in Haines had
hotels” to the buses that whisk them off to several dozen dropped to 4.7% in the summer of 2010.
shore excursions, including the White Pass & Yukon What does the future hold for Alaska? The emerging
Railway or Broadway, the shopping district of Skagway. issues for tourism in Alaska are the same as those for
Some are local shops offering Alaskan souvenirs, but many tourism anywhere in the world. More development? More
are shops transplanted from the Caribbean, like Diamonds environmental protection? More taxes? More jobs, more
International. The cruise lines “get a cut from stores . . . entrepreneurial opportunities?
in exchange for recommending the establishment and men-
tioning a money-back guarantee on items” (p. 98). Kroll, Luisa. (2004). Cruise control: Carnival Corp. is
What do the residents of Alaska think of the growth of leading the charge to open up the last frontier to the
tourism to the state? They see the massive increase in visi- vacationing masses. Forbes, 174(4), 96–102. Bureau of
tors as good news and bad news. The bad news? Pollution, Labor Statistics, http://www.bls.gov/lau/laucntycur14.txt
congestion, noise. The good news? “The cruise industry (retrieved December 2, 2011).
Net Tour
To get you started on exploring Internet links for this www.gdrc.org/uem/index.html
chapter, please see whc.unesco.org/
www.nps.gov www.nationaltrust.org.uk/
www.nepalhomepage.com/travel/firstpage www.culturalheritagetourism.org/
www.jiuzhai.com/language/english/index.html www.ecpat.net
www.macautourism.gov.mo/en/index.php
1. How can tourism aid in the preservation of societies, 5. What negative effects has tourism had on cultures and
cultures, and natural environments? the natural environment?
2. What host community resources are shared by both 6. How can tourism be used to benefit a culture? What
visitors and local residents? are some of the cultural problems that can result from
3. What are the major factors that determine an area’s large numbers of visitors?
carrying capacity? 7. What are the potential unintended consequences of
4. How can culture be used to attract tourists? tourism?
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1. Find an article in a recent magazine (e.g., National e conomic and social/cultural impacts of aboriginal
Geographic) that discusses how some host communi- tourism. Discuss your findings and conclusions.
ties manage the demands of tourism. Be prepared to 5. As a tourist to a foreign country, what do you do that
summarize the article for the class. would provide economic benefits to the host commu-
2. Using the Internet, discuss the impact of cruise ships on nity? What can you do to maximize positive and min-
the environment. Do cruise lines have environmental pol- imize any negative social impacts you leave with the
icies? Give examples and comment on how these policies host community?
can be improved. 6. Interview two or three friends and relatives who just
3. Conduct a cultural inventory, and document what returned home from a holiday. Ask if they had visited
might attract tourists to your area or another area in places that are densely populated. How did they feel
which you are interested. the crowds impacted their touring experience?
4. Aboriginal tourism is becoming increasingly popular
in Australia. Using online resources, summarize the
Glossary
Authenticity An item or activity that is original and gen- Expatriate A citizen of one nation who lives in a nation
uine to the origins of culture. of which he or she is not a citizen.
Carrying capacity A key concept in environmental Physical capacity The number of users that can be
impact analysis that relates to the amount of use an accommodated in an area.
environment is capable of sustaining under certain Sex tourism Travel to a foreign country usually by males
circumstances. from developed countries to underdeveloped or devel-
Culture The practices of a society; its customary beliefs, oping countries for the purpose of engaging in sex,
social roles, and material objects. especially with children.
Demonstration effect Display of material goods and Social carrying capacity The number of outsiders to an
wealth by tourists leading to envy by local residents area that can be accepted without having damaging
based on either the perception or the reality of being psychological effects on the locals of the area.
less fortunate. Society A community, nation, or broad grouping of peo-
Ecological capacity The maximum level of users that ple who have common traditions, institutions, activi-
an area can accommodate before ecological damage is ties, and interests.
incurred. Triple bottom line Measuring tourism success in terms
Ecotourism A form of tourism that focuses on environ- of maximizing positive impacts and minimizing nega-
mental and cultural preservation. tive impacts on the economy, environment, and local
Environmental capacity The limit on the number of users residents.
that an area can accommodate before visitors perceive a
decline in the desirability of the area.
References
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11. Roy, R. (1999, October 19). Tourists trash famous Turkey? Applied Economics Letters, 12(8),
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Eden. Condé Naste Traveler, 176–178, 185–187, 248. Cuban women into sex tourism. Digital Freedom
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26. Vaughn, R. (1995). The two worlds of Fiji. National of tourism on Central Florida. Annals of Tourism
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tourism-led growth hypothesis valid for Geographic, 203(5), 42–71.
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CHAPTER 13
Sustaining Tourism’s Benefits
There are no passengers on Spaceship Earth. Everybody’s crew.
—Marshall McLuhan
LEARNING OBJECTIVES
1. Explain how the success of sustainable tourism 4. Describe the benefits that may be achieved
is measured with the triple bottom line. through the use of ecotourism practices.
2. Explain how ecotourism differs from mass 5. Explain why tourism service suppliers are embrac-
tourism. ing sustainability practices.
3. Explain how tourism service providers can fulfill 6. Describe why it is so difficult for tourism service
the principles of ecotourism. suppliers to achieve sustainable operations.
CHAPTER OUTLINE
Green’s the Dream A Future of Sustainability
Introduction Summary
When Is Tourism Too Much of a Good Thing? You Decide
Planet Net Tour
People
What’s in a Name?
Ecotourism Applying the Concepts
Niche Markets Glossary
Establishing Standards References
Going Green
360
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Chapter 13 ▸ Sustaining Tourism’s Benefits 361
Green’s the Dream

It didn’t seem possible, but five years had passed since Tyla purchased the Lakeway
Resort. She and her staff had accomplished so much in their goal to achieve sustain-
ability, yet there was much more to be done.
When Lakeway had come on the market for sale, Tyla jumped at the chance to
buy it based on positive recommendations from her accountant and close friends in
the tourism business. She had vacationed at the resort with her family since early
childhood and would return anytime her hectic career had allowed. The peace and
tranquility of the resort in its pristine location along with numerous water and winter
sports activities made it an ideal getaway destination.
Stepping away from a successful career in the hotel industry was a major
life change, but she never regretted her decision. Lakeway Resort had been well-
maintained, and the 40 cabins clustered on 21 acres had been thoughtfully placed to
take full advantage of the natural setting.
As soon as Tyla signed the papers and took possession, she began to make changes
that would lead to creating a sustainable operation. Long before people talked about
carbon footprints or LED lightbulbs were the norm, earth-friendly decisions were being
implemented throughout the resort. The small rental fleet of outboard-motor fishing
boats had been replaced with kayaks and rowboats. All disposable service ware and
cups had been eliminated; linens were now changed only at guests’ request regardless of
the length of their stays; no pesticides were in use; and the laundry used only recycled
water and biodegradable detergents. Through wise purchasing decisions and an exten-
sive recycling and composting program, waste had been reduced to a minimum.
In addition to implementing numerous environmentally friendly programs, Tyla
had worked with neighboring property owners to improve wildlife habitat as well as
creating trails with numerous wildlife viewing venues. She was also committed to hir-
ing all of her employees from the local community and always selected local contrac-
tors when she needed to pay for additional services so her spending would multiply in
An Asian tour group admires renaissance statues in Florence’s Piazza della Signoria.
Photo by Thomas Sun
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the economy. To her delight, the feedback was mostly positive from the resort’s guests.
They seemed to enjoy being part of the sustainability efforts.
Her efforts were even catching the attention of the press, and last year she had
won the Governor’s Award for “Sustainability in Hospitality.” Still, there was much to
be done to meet her dream of creating a truly sustainable operation.
Following the management practices she had implemented from day one, she scheduled
a daylong retreat with her full-time staff to discuss possible future actions. It was time
to make plans for some major renovations including new furnishings. To preserve the
environment and create a truly sustainable operation, what type of furnishings should
be purchased? Could they be purchased from sources that used locally produced products?
Should any of the carpeting be replaced, or would natural or even textured concrete flooring
be more appropriate? What should be done about the disposal of the old mattresses? These
were just a few of the questions posed at the beginning of what would launch the next
phase of Tyla’s dream of serving guests while enhancing the environment.
Introduction
Consider the root of the word sustainability. What does it mean to sustain? Essentially,
sustainability is about providing what is needed for something or someone to exist
and continue1 in the future. Like Tyla, responsible tourism business owners nowadays
emphasize not only the financial bottom line but also maximize the positive impacts
on the area’s social/cultural and environmental resources, or what you have learned
is called the “triple bottom line.” Sustainable tourism focuses the triple bottom line by
incorporating each of the three Ps: Profit (economic impacts), Planet (environmental
impacts), and People (impacts on the local residents).
Creating sustainable tourism operations is more than just words; it requires action
and commitment. Sustainable tourism has taken the lead from work done in sustainable
development. As early as 1987, the World Commission on Environment and Develop-
ment (WCED) defined sustainable development as “[m]eeting the needs of the present
without compromising the ability of future generations to meet their own needs” (p. 8).2
Borrowing from this philosophy, in 1993 the World Tourism Organization, defined sus-
tainable tourism as meeting “the needs of present tourists and host regions while pro-
tecting and enhancing opportunity for the future.”3 Destinations and individual tourism
businesses are learning to accept that to be sustainable, success must be measured by
finding a balance of making a profit while protecting natural and cultural resources so
that decisions today do not adversely affect the success of future generations.
Commitment to sustainability is important because the tourism industry has
exploded in recent decades, and the number of travelers continues to grow each year
as quicker, cheaper, and safer transportation to almost every corner of the globe
becomes available. A second reason is the explosion in the number of the world’s cit-
izens who now have the leisure time and money to travel. The longer lives and better
health of many of the world’s peoples is a third reason. Finally, global communica-
tions make people more aware of the wondrous sites of the world and the endless
activity options available to them.4 The United Nations World Tourism Organization
(UNWTO) estimated that there were over 1.2 billion international arrivals in 2015,5
and with that kind of traffic, sustainability is more important than ever.
When Is Tourism Too Much of a Good Thing?

The costs of tourism, especially its environmental, social, and cultural costs, have
led many destination residents and tourists alike to become disillusioned with mass
tourism. Concerns about mass tourism; the rise of large numbers of working- and
M13_COOK1670_06_GE_C13.indd 362 16/05/17 2:59 PM

middle-class travelers; have all add to critics’ lament about the continued growth of
tourism as they see problems of this growth resulting in:
• The architectural pollution of tourist strips,
• The herding of tourists as if they were cattle,
• The disruption of traditional cultural events and occupations,
• The diminished natural environment and beauty of the area, and
• The low priority paid to local needs with funds used instead to increase tourism
amenities to keep the community competitive in the marketplace.1
Mass tourism tends to emphasize Profit and sacrifice the Planet and People
resources. The conveniences demanded by mass tourists can strain the environment
through the development of more and more infrastructure and superstructure and the
increasing wear and tear from the presence and actions of more and more tourists.6 It
is probably obvious to you that building lots of hotels, restaurants, roads, and airports
can cause serious problems for an area’s environment. For example, the construction
of ski resorts in the Alps has led to mudslides and landslides that are damaging the
mountainsides.
Planet
This boom in tourism has given rise to millions of new jobs and increased economic
prosperity in countries across the world, but as we began to see in Chapter 11, tour-
ism can usher in problems along with economic benefits. The millions of additional
tourists have strained the resources of many destinations, sometimes straining natural
resources to the point where the initial appeal of an area is diminished and visitation
to it declines. Figure 13.1 provides one tourism expert’s idea of the stages that a des-
tination may go through from beginning to decline. It is important to note that not
all destinations decline. If tourism managers are closely monitoring the area’s perfor-
mance, it is possible to anticipate the need to change and enter a phase of rejuvenation
before the decline stage begins. Often, rejuvenation is associated with the reallocation
of resources, introducing new technologies, or finding a way to reinvent the desti-
nation to better meet the needs of existing target markets or develop products and
services for new target markets. As tourism numbers have increased, questions about
future sustainability of these activities have grown.
Some issues are easier to anticipate and mitigate than others. Climate change is
incredibly complex and possibly the greatest impending threat to global tourism. While
the existence of climate change may have been debated in popular media, the scientific
community agrees that anthropogenic climate change is occurring. This means that
although the Earth has experienced natural fluctuations in temperatures in the past,
human activity (including greenhouse gas emissions7) is now contributing to unprec-
edented shifts in weather patterns. What does this mean for tourism? Many tourism
activities are based on seasonal climates: skiing in the winter, hiking amongst wild-
flowers in the spring, surfing in the summer, and watching the leaves change color in
the fall. These are examples of the many tourist attractions based on existing climate
patterns. Think about how many trips you have taken recently that were dependent on
certain weather conditions.
Various climate models exist that provide different projections for how much the
global temperature will change but most estimate that the global temperature will rise
between 2°and 6° Fahrenheit by the year 2050.8 As you learned in Chapter 10, certain
destinations are more seasonal than others, but the potential threat of climate change
will force most destinations to begin implementing adaptations to what attractions
they offer and during what time of year. Weather dependent attractions such as ski
M13_COOK1670_06_GE_C13.indd 363 16/05/17 2:59 PM

...often the
stages repeat
Exploration stage
...small number of visitors discover
the destination area.
Involvement stage
...number of visitors increases, more host
community members become involved in
serving the needs of tourists.
Development stage
...tourist arrivals increase rapidly and
outside developers build large facilities
to serve the seemingly endless demand;
tour operators add the destination
to tours.
Consolidation stage
...growth in the number of visitors ceases, the
destination loses its distinctiveness. Professional
managers focus on controlling costs and gaining
revenue from tour groups. Some environmental
and cultural problems begin to appear.
Stagnation/Decline stage
...the area has reached full capacity,
and businesses try to maintain
tourist numbers and revenues by
decreasing prices. Maintenance
of facilities declines and the resort
area begins to look dated. All of the
environmental and social problems of
tourism appear.
FIGURE 13.1
Stages of tourism development. Source: Butler, R. (2006). The Tourism Area Life Cycle: Applications
and Modifications (Vol. 1). Channel View Books.
resorts or beach resorts may be the first to make changes. Ski resorts may start to
experience shorter seasons and be required to move their base areas to higher eleva-
tions where the snow is less likely to melt. Beach resorts closer to the equator may
at first experience longer tourism seasons, but uncomfortably hot temperatures may
eventually turn tourists away. Even non-seasonal attractions found in big cities are
threatened because many are positioned along coastlines and need to be concerned
with sea level rise that could eliminate their existing locations.9
M13_COOK1670_06_GE_C13.indd 364 16/05/17 2:59 PM

Tourism has a complicated relationship with climate change. Not only is tourism
likely to be dramatically influenced by climate change in the future, tourism also is
an industry that significantly contributes to the human activity that is causing climate
change. Particularly within the transportation sector,10 greenhouse gas emissions from
tourism have been growing. Unfortunately, research shows that tourists are generally
unwilling to voluntarily change their behaviors to lessen emissions, especially when it
comes to limiting their air travel, and it is likely that change in the future will come in
response to government regulations.11
The threat of climate change has actually promoted irresponsible tourism for those
who wish to see destinations and attraction that may no longer exist in the near future.
One such example is “last-chance tourism” to view polar bears in Northern Canada
where the impact of visitors is “loving tourism destinations to death.”12
Climate change is not only a concern for the environmental impacts of tourism.
Because tourism is service-oriented, if destinations were to lose tourism demand it would
result in job losses13 and potentially impact the
local residents and their quality of life.
People
Many of the gains realized from tourism are eco-
nomic and have often been short term in nature.
The costs, however, especially to natural and cul-
tural resources of an area, are more likely to be
long-lived or even permanent. Too many times,
nonlocal developers relying on “outside money”
are the biggest winners, and when the area has
become saturated and starts to decline, these devel-
opers move on to the next trendy destination with
no concern for the damage that may have been
done. The quality of life for the local residents can
decline if they are not on the receiving end of the
benefits that tourism can bring to a region through
foreign ownership and leakage. The quality of life
of the local residents can also be impacted by their
social interactions with the tourists. Called the
host-guest relationship, the behavior of the tourists
can influence local residents regardless of whether
they work in the tourism industry.
Tourism researcher George Doxey studied the
effects that “outsiders” have on destination resi-
dents and developed an index of these sentiments
called the Irridex. The Irridex describes the levels
of irritation that locals may feel with the influx in
the number of tourists and the changes brought
about by this growth. Stage One is Euphoria. In
the first phase of tourism development, locals
welcome both tourism investors and travelers,
recognizing the economic boom tourism can gen-
erate. Stage Two is Apathy, as residents begin to
take tourism for granted, contacts with tourists
become businesslike, and communications focus
Native peoples can be harmed by the demonstration on marketing. Stage Three, termed Annoyance,
effect of tourism. Photo by Ron Hilliard develops when residents become “saturated” with
M13_COOK1670_06_GE_C13.indd 365 16/05/17 2:59 PM

the number of tourists in their area and begin to see the downsides of sharing their home
area. Antagonism, the final stage, is achieved when residents reach their boiling point and
overtly treat visitors with verbal or even physical abuse. Tourists are viewed as the root
cause for the area’s problems. This stage sets off a vicious cycle requiring increased pro-
motional efforts to attract visitors and offset the deteriorating reputation of the region.14
What’s in a Name?
So far, we have presented quite a list of problems, both environmental and cultural,
that can result from tourism. What can be done to minimize these problems? In areas
where tourism activities are still developing, long-range planning will address some of
the potential problems in developing tourist destinations. In developing areas and in
already popular tourist locations, many efforts can be taken that will help safeguard the
environment and the people. These efforts are encompassed in a variety of initiatives
that can be found under the umbrella of sustainable tourism. As you know, sustainable
tourism maximizes the positive impacts and minimizes the negative impacts on Profit,
Planet, and People. Figure 13.2 illustrates how sustainable tourism is distinct from
mass tourism but has a variety of niche markets within it.
By many accounts, sustainable tourism is the fastest-growing phenomenon of the
industry, especially when you consider all the related terms that have been attached to
and arbitrarily used to describe sustainable tourism, there should be no doubt about
this claim. It seems as though everyone finds marketing appeal in describing its service
offerings as green, sustainable, or ecologically friendly.
Pick up a copy of any popular travel or tourism magazine and you will be hard
pressed not to find at least one article dedicated to sustainability somewhere in the
issue. It has become very popular for almost everyone in the tourism industry to tout
its efforts at sustainability. Sustainability appears to be just as popular in the academic
community, with entire journals dedicated to the subject. Usage of the term sustain-
able has become so prevalent that the concepts and practices of sustainable tourism are
beginning to be lost in a semantics jungle.
One thing is for sure: No matter what these efforts to preserve resources are called,
maintaining the positive benefits of tourism is in everyone’s interests. Unchecked and
unplanned tourism growth can lead to the eventual destruction of the very assets that
originally served to attract visitors. Taking steps to preserve and protect tourist attrac-
tions will create a legacy for future generations. Achieving these benefits begins with
awareness and education, and ends with actions!
Mass Tourism
Sustainable Tourism
Green Tourism
Responsible Tourism
Alternative Tourism
Ecological Tourism
Nature Tourism
FIGURE 13.2
Degrees of sustainability.
M13_COOK1670_06_GE_C13.indd 366 16/05/17 2:59 PM

Ecotourism
The first efforts to reduce the negative impacts of tourism on the environment, especially
on fragile areas, were called ecotourism, which primarily involves travel to sensitive nat-
ural and cultural environments to observe and learn about a very different culture and
environment and participate in low-impact (on nature) sports activities. The term eco-
tourism originally was used to label a form or philosophy of tourism that emphasizes the
need to develop tourism in a manner that minimizes environmental impact and ensures
that host communities gain the greatest economic and cultural benefits possible.
The foundation of ecotourism is the preservation of the environment. In addition,
ecotravelers generally desire to mingle with the local culture and have their travel needs filled
by locals in their traditional ways (such as dining on the local gastronomical delights). Com-
pared with other travelers, ecotourists tend to be wealthier, college educated, and willing to
spend large amounts of money on extended trips.15 They also tend to participate in active
yet nature-focused sports such as climbing, canoeing, and kayaking.16 “Ecotourists are more
environmentally concerned and responsible than non-ecotourists. They are also more ded-
icated to nature, more supportive of tourism accreditation programs, and more likely to
patronize businesses with good environmental practices even at a higher cost” (p. 275).17
The seed of ecotourism was planted within the burgeoning environmental movement
of the 1960s. It grew during the 1970s and 1980s, fed by increased concern for the
environment, dissatisfaction with the urbanism of mass tourism, and entry into the
tourism marketplace by less developed countries with nature as their primary attraction;3
and ecotourism continues to explode, having gained the designation as the fastest growing
segment of tourism. Ecotourism is experiencing double-digit growth that should accelerate
as concerns over the environment and global warming rise.18 The importance of ecotourism,
its size, and its influence on economies, environments, and peoples were recognized by the
United Nations when it declared 2002 as the International Year of Ecotourism.19
There are five basic principles to ecotourism development.20 The core guiding prin-
ciple is that tourism should be blended with, or assimilated into, the environment and
the local culture of an area. The boundary between the tourism industry and the host
community should not be startling: Tourism should fit into the community and share
in its ways. This blurring can occur, for example, by matching architecture to the exist-
ing local structures and using the area’s natural vegetation for grounds landscaping.
A second principle of ecotourism is that the tourist experience should focus on
the host community’s existing scenic and activity opportunities. In other words, tour-
ism should evolve from the area’s natural and historic/cultural attractions rather than
developing attractions that do not reflect the authenticity and uniqueness of the region.
Third, ecotourism is associated with local ownership and management of all or most
services. Tourist needs should be filled by local businesspeople and local employees
rather than by foreign investors or managers. In this way, more of the economic bene-
fits of tourism flow to the local citizens and their local governments.
To further benefit the host community economically, the fourth principle is that a high
proportion of local materials should be used to fulfill tourists’ needs, from construction
materials to foodstuffs. For example, in Zambia, there is a unique resort called Tongabezi.
The architecture of the “hotel” is a sight to behold. Most of it is built from native lumber
and grasses, and many of the guest rooms are open air. One suite, called the Bird House, is
built high in a huge tree, and neither the bedroom nor its private bath needs to have walls
for modesty’s sake. The height of the rooms alone provides all the privacy needed.
Finally, the fifth principle highlights the importance of conservation of resources.
By using what are called “ecotechniques,” local utilities such as water, heat, and elec-
tricity can be stretched to accommodate the needs of both the tourists and the local
population. Ecotechniques include use of solar power, rainwater collection, and biocli-
matic design of structures to aid in heating and cooling.
M13_COOK1670_06_GE_C13.indd 367 16/05/17 2:59 PM

FYI LANGKAWI UNESCO GLOBAL GEOPARK

On May 31, 2006, Langkawi Island in accepted as a member of UNESCO’s the world, with the UNESCO Geopark
Malaysia was renamed as Langkawi prestigious Global Geoparks Network status there is pressure for Langkawi
Geopark by the local state government, (GGN), the only Southeast Asian des- to comply with the stringent require-
and a few months later was recognized tination to have attained UNESCO’s ments regarding conservation of the
as such by the federal government much-coveted Geopark status. While environment and development of tour-
of Malaysia. This claim as a geopark Langkawi Development Authority ism to promote socio-economic devel-
received international validation on (LADA) now has the leverage to high- opment and community participation.
June 1, 2007, when Langkawi was light Langkawi’s spectacular features to
Source: https://www.lada.gov.my/index.php/en/about-us/product/langkawi-unesco-global-geopark
Even with good intentions, ecotourists still may have a negative impact on a des-
tination. How do individual tourists threaten the natural environment? One way is
simply by blazing trails while walking through nature. One person walking through
a wilderness area may not have any significant impact on the area, but 10,000 people
within a short period certainly will. The simple action of trampling grass multiplied
by 10,000 can lead to erosion of land. For example, several of New York State’s
Adirondack Mountain peaks are now bare owing to hiker traffic. And driving through
a natural area can cause more damage. The manufacture and promotion of “off-road”
vehicles may be the biggest threat to nature. To view ever more remote areas, trav-
elers and tour operators are venturing farther into our national forests and parks,
scaling fragile rock formations, and converting dirt paths into rutted mud holes. Left
unchecked these actions can cause irreparable harm.
Since its birth, ecotourism has been defined in various ways and used as a market-
ing term with growing popularity for any number of tourism attractions and tours. It
has come to encompass a wide variety of nature-based activities, from hard to soft. This
explosion in the use of the term makes some tourism experts now maintain that the word
ecotourism “has been applied so widely that it has in many regards become meaningless
(p. 1168).21 Table 13.1 provides some examples of the common terms that have been
adopted as descriptors and lumped together to describe ecotourism and related activities.
David Weaver says such dismay over what many consider to be indiscriminate
use is not necessary and suggests today’s ecotourism should be defined as “a form of
nature-based tourism that strives to be ecologically, socio-culturally, and economically
sustainable while providing opportunities for appreciating and learning about the nat-
ural environment or specific elements thereof” (p. 105).22 Weaver suggests ecotourism
now encompasses the following three core elements.
1. Attraction of natural environments, so ecotourism is nature based.
2. Emphasis on learning as an outcome of ecotourism for the tourist that
differentiates ecotourism from other more hedonistic forms of “nature-based”
tourism, such as Sun, sea, and sand; skiing, trekking, or rafting.
3. High desire for sustainability of the natural attraction and the native people of
the region.11
Table 13.1 Common Terms Used to Describe Ecotourism and Related Activities
Adventure Tourism Green Tourism
Low-impact tourism Nature-based tourism
Rural tourism Sustainable tourism
Wilderness tourism Responsible tourism
M13_COOK1670_06_GE_C13.indd 368 06/06/17 5:43 PM

FYI MULU NATIONAL PARK

One of Malaysia’s best examples of conservation practices and nature- Nature lovers are attracted to the
ecotourism development and manage- based tourism activities. In November unique four show caves, adventure cav-
ment can be found at the Mulu National 2000, Mulu was listed as a World ing, canopy walking, challenging treks
Park in Sarawak, Malaysia, with the Heritage site because of its biological and trails, breathtaking waterfall, and
Sarawak Government committed to significance and exceptional landscape. boat rides.
Source: http://mulupark.com
As mentioned previously, 21st century ecotourism covers a range of tourism expe-

riences on a continuum of hard to soft activities. For example, a hard ecotourist might
travel to coastal sea turtle nesting areas to aid these gentle giants in propagating their
species. A soft ecotourist might be a passenger on a cruise ship that stops in Costa Rica
and takes a guided day trip to the Cloud Forest.
Hard ecotourism activities (rugged and uncomfortable) are enjoyed by a relatively
small proportion of environmentally conscious ecotourists. Soft ecotourism applies to
short-duration trips often incorporated into a longer multi-destination or multipurpose trip.
This “side-trip” form of ecotourism is thus tacked on to trips that would largely be consid-
ered mass tourism. Estimates of the size of the ecotourism segment have ranged from 2%
to 25% or even 50% of the tourism market. The low estimates likely represent the original
concept of ecotourism and are the proportion of the market we might term hard ecotourists.
The larger figure represents soft ecotourists, or those whom Weaver calls mass ecotourists.11
Whereas a few of you may have been a hard ecotourist on a past trip, most of you,
like the majority of tourists, would probably be classified as a soft ecotraveler based
on the activities in which you participated on a recent trip. For example, if during
a spring break trip to Florida you spent a day on a guided tour of the Everglades,
you would have been considered a mass ecotourist that day. Or you may have taken
a whale-watching boat trip off the coast of California. Incorporation of ecotourism
activities within trips like these examples has become commonplace, as people around
the globe have developed keen interest in the often-fragile natural world around them.
Ecotourism and ecotechniques can be used by both newly developed and fully
developed tourist destinations to try to minimize the negative impacts that large num-
bers of visitors can have on host communities and the environment. As tourism num-
bers continue to grow, more and more nations and communities need to apply the
principles of ecotourism and conservation to ensure that the tourism industry remains
viable. “Benefits from ecotourism for the local community include opportunities to
gain skills and leadership, heightened self-esteem, expanded networks of support, and
better organizational capacity. However, negative changes brought by ecotourism are
new restrictions on time, the erosion of reciprocity and other traditional relationships,
and new conflicts associated with the distribution of profits” (p. 461).23
What can we conclude about ecotourism as we see it today? Though use of the
term has strayed from its original intent, the key to the idea of ecotourism remains the
same: sustaining the natural and cultural elements of fragile environments. Whereas
natural and cultural preservation are definitely appropriate for some areas, sustain-
ability is needed in all areas and operations.
Niche Markets
Thanks to the efforts of Jonathan Tourtellot, the Senior Editor of National Geographic
Traveler magazine, a new form of tourism, geotourism, which combines all of the
M13_COOK1670_06_GE_C13.indd 369 09/06/17 10:54 AM

prominent features of a destination, from natural resources and culture to lodging and
shopping, has found its way into the tourism vocabulary. Geotourism proposes that trav-
elers have various attitudes and behavior toward the cultural heritage, aesthetics, environ-
ment, and well-being of the local people in the destination. This relatively new form of
tourism focuses on the unique culture and heritage of a location while attempting to help
visitors enrich these qualities. Geotourism is all about making a place better by encourag-
ing tourists to visit and spend money with preservation in mind. Destinations are encour-
aged to showcase those things that set them apart as unique. The geotourism designation
should ultimately attract more tourists, but at the same time, it should motivate both locals
and tourists to preserve the cultural and/or natural resources that make the place special.
Destinations are encouraged to showcase those things that set them apart as unique.
Efforts such as increased emphasis on volunteering while on vacation are increas-
ing awareness, preservation, and protection of all of our resources. Voluntourism, a
trip that combines travel activities with charitable work, allows tourists to give back
through service projects while they take time to experience a destination.24, 25 By pro-
viding volunteer tourist opportunities to engage their head, hands, and hearts, ben-
efits will be realized by not only the tourists but also the hosting organizations.26
WWOOFing (World Wide Opportunities on Organic Farms) is a segment of volun-
tourism that is growing in popularity.27 There is a global network of farms that invite
WWOOFers to come and stay at the farm to receive education, housing, and most
meals in return for work on the farm. WWOOFing is an excellent example of how
voluntourists can immerse themselves in a community; make a contribution to the des-
tination while dramatically reducing their travel costs. Voluntourism and other efforts
targeting the sustainability of tourism will build a positive foundation for the enjoy-
ment of travel experiences, for both business and leisure, for generations to come.
Look no further than foodservice to find the epitome of sustainability. Local food,
especially, appeals to the tourists’ interest in authenticity.28 The goal of the farm-to-fork
concept is to create a complete circle of sustainability. When local farmers first teamed
up with local restaurants to showcase locally produced, especially organically produced
agricultural products, it was an immediate hit with consumers. In fact, it was such a hit
that many of these organic producers started showcasing their operations and products
by hosting special dinners “down on the farm.” Many of these farm-to-fork events have
grown so much in popularity that reservations must be made months in advance.
Since locally grown agricultural products are only transported short distances
when used at local restaurants, or even not at all, there is little if any carbon footprint
created through transportation. However, when composting is added to the mix, the
carbon footprint for this tourism phenomenon is reduced even more. Through com-
posting efforts, restaurants are returning food wastes to the farm so that it can be used
as fertilizer for future organically grown crops. In addition, these waste materials can
be returned to the farms on the very vehicles that make deliveries thus eliminating the
need for delivery trucks to return to the farms empty.
The farm-to-fork concept was originally fostered by entrepreneurs who saw a busi-
ness opportunity, but it has grown past simple and singular operations and is now being
encouraged at the local, state, and national level with support and encouragement from
local tourism organizations and governments. Farm-to-fork events with signature dining
opportunities have come to be popular in wine growing regions around the world, but
are also being embraced as a way of life for promoting tourism in countries like Ireland as
visitors seek authenticity. Telling the “story” of food production offers an enhanced visitor
experience.28 Continued growth in farm-to-fork venues will enhance sustainability as they
promote “ . . . social, economic and environmental benefits for hosts and guests . . .”28
Wildlife tourism is yet another niche market where tourists visit destinations with the
intention of seeing native species in their natural habitat. This is in contrast to viewing
animals in enclosures at heritage attractions like zoos and aquariums that you read about
M13_COOK1670_06_GE_C13.indd 370 16/05/17 2:59 PM

FYI IDENTIFYING TOURISM OPERATORS DEDICATED TO CONSERVATION

AND PRESERVATION
With all of the potential confusion about • Is there a published environmental • How are local flora and fauna protected?
terms such as ecotourism and sustain- policy? • Are locals hired as employees and
ability, the best bet for travelers is to ask • Are construction materials and supplies guides?
some very pointed questions to iden- provided from local sources? • What is given back to the local com-
tify those operators who are dedicated • How are resources conserved? munity?
to conservation and preservation. The • How is gray water used? • Are ecotourism education programs
following questions are a good starting • What types of renewable energy provided to employees and offered
point for initiating the conversation: sources are used? to guests?
Source: Based on Oko, D. (2006). Four questions on ecotourism. Arthur Frommer’s Budget Travel (Newsweek LLC), 9(5), 51.
in Chapter 9. Wildlife tourism is growing in popularity as traditional attractions have

been increasingly criticized for lacking sustainable principles. In 2013, the documentary,
“Blackfish,” raised questions about the management of Sea World when an orca whale
attacked and killed a trainer during a show.29 The incident and the increased awareness
of the incident from the film resulted in decreased visitation and significant financial
losses and Sea World reevaluated their top executives and management.30
As industry participants adopt practices designed to maintain or achieve sustainability,
the number of visitors that can be accommodated decreases. So, if sustainability is to be
achieved, there is a limit to the number of tourists that can be accommodated in any
setting. From a marketing, management, and financial perspective, it is important to note
that proactive measures such as targeting these niche segments that are environmentally
friendly and economically attractive will allow destinations to limit numbers without
having to impose capacity restrictions. By marketing to tourists who are environmentally
friendly, thus not requiring education on the importance of sustainable practices,
economic benefits can be achieved as these tourists have been found to spend more
money. In particular two segments, Nature Lovers (these tourists are educated about the
environment and seek to experience nature) and Environmental Wanders (these tourists
are also educated about the environment and seek to actively experience it) have been
found to meet these two criteria.31 Research has shown that positive attitudes toward
ecotourism are likely to influence people’s intention to purchase ecotourism products or
services as well as to pay a premium for these products and services. However, it was also
found that individual’s materialistic values may negatively influence these intentions.32
Establishing Standards
Environmental certification programs lack global standardization, especially within
tourism. There is a wide variety of associations providing certifications and govern-
mental agencies setting forth guidelines for use of this title, but there are no universal
standards for usage. For example, “a vacationer looking to spend time and money
in an environmentally conscious manner might run across names such as Sustainable
Travel International, Conservation International, Rainforest Alliance, the Interna-
tional Ecotourism Society, Green Hotels Association, and EcoClub, as well as regional
associations such as Eco-tourism Australia and Travel Green Wisconsin” (p. 51).33 “To
confuse matters even more, many not-so-green businesses are jumping on the band-
wagon for economic benefit, duping good-hearted tourists with their murky promises”
(p. T3).34 Without a global standard, consumers must be skeptical of marketing claims
that a business or the products they sell are genuinely eco-friendly.
M13_COOK1670_06_GE_C13.indd 371 16/05/17 2:59 PM

An eco-friendly rating system for hotels. Photo by Cathy Hsu
The term eco has been adopted and abused so widely that a new term has been
coined to apply to tour operators who make dubious ecological claims—greenwashers.
There are seven sins of greenwashing when a business will mislead a customer to believe
they have a commitment to the environment when it is false. The seven sins are:35
1. Sin of the hidden trade-off: A claim suggesting that a product is “green”
based on a narrow set of attributes without attention to other important
environmental issues.
2. Sin of no proof: An environmental claim that cannot be substantiated by easily
accessible supporting information or by a reliable third-party certification.
3. Sin of vagueness: A claim that is so poorly defined or broad that its real
meaning is likely to be misunderstood by the consumer.
4. Sin of worshipping false labels: A product that, through either words or images,
gives the impression of third-party endorsement where no such endorsement exists.
5. Sin of irrelevance: An environmental claim that may be truthful but is
unimportant or unhelpful for consumers seeking environmentally preferable
products.
6. Sin of lesser of two evils: Claim that may be true within the product category,
but that risks distracting the consumer from the greater environmental impacts
of the category as a whole.
7. Sin of fibbing: Environmental claims that are simply false.
While a global standard does not exist, recently, several governments have created
national certification programs to verify the ecoworthiness of tour operators, hotels,
and other tourism suppliers. In October 2003, Kenya was the first African nation to
introduce such ratings. The private, nonprofit Ecotourism Society of Kenya sends inde-
pendent inspectors out, armed with a list of criteria that range from environmental
measures (water recycling) to economic benefits (purchasing locally grown produce).36
Another example is the Certification for Sustainable Tourism (CST) in Costa Rica.
The CST’s mission is to make sustainability a reality within tourism in Costa Rica and
they award 1 to 5 leaves based on the operation’s physical and biological relationship,
internal process and practices, management services, encouragement of the client, and
socio-economic realm.37
M13_COOK1670_06_GE_C13.indd 372 16/05/17 2:59 PM

However, with so many different uses and misuses of the term ecotourism, many
industry groups have begun to establish guidelines and standards to define ecotourism
operations. As with all standards, the goals are to:
• Provide clear definitions,
• Establish measurable criteria,
• Measure and report compliance,
• Promote consistency in use of terminology, and
• Create defined marketing programs.
Once agreement can be reached on terminology and measurements for agreed-upon
standards, clarity in meaning and application of ecotourism concepts can be achieved.
Going Green
As you read the following quote about why hotels are embracing sustainability, think
about how other tourism service suppliers might embrace similar actions:
Good for the planet, good for people, good for profit—the trifecta of sustainability
explains why boutique hotels to big guns are going green. And it’s not just green-
washing. Forward-thinking hospitality executives are investing in maintenance
Table 13.2 Sustainable versus Conventional Lodging Operations

Attribute Sustainable Conventional
Host community Maintain social and cultural diversity while Collect and pay taxes.
educating and engaging community
members in sustainability activities.
Project location and Build on previously developed land, and design Locate and build on a site with
design buildings to blend in with natural setting while beautiful views or outstanding
incorporating energy-efficient features. natural attributes.
Building materials and Use natural materials in construction that do not Utilize standard designs to minimize
operating supplies have to be shipped in, and encourage develop- construction costs and centralized,
ment of local suppliers for operating needs. low-cost procurement processes.
Transportation Promote ride sharing and the use of mass trans- Locate without regard to transportation
portation, using electric and hybrid vehicles infrastructure.
while limiting the use of fossil-fuel vehicles.
Staff Recruit, train, and develop local employees for Import skilled labor and hire local
all positions. unskilled labor for entry-level positions.
Food Build menus around local cuisine and crops, Utilize standardized menus based on
encourage sustainable farming practices, popularity and centralized purchasing
and purchase from local sources. and distribution programs.
Energy Utilize passive cooling and solar sources, Utilize available power sources.
avoid fossil fuels, utilize renewable
energy sources, and use energy-efficient
appliances and practices.
Water Conserve, utilize natural water sources and Utilize available commercial or
gray water, capture runoff, desalinate, and community water sources.
avoid chemicals.
Waste management Reduce, recycle, and dispose of waste so as Utilize available commercial or commu-
not to harm the environment. nity waste management facilities.
Marketing Provide information on the benefits of Utilize all available marketing channels to
sustainability practices and encourage increase visitor traffic and occupancy
respect for the environment. rates for maximum profitability.
M13_COOK1670_06_GE_C13.indd 373 16/05/17 2:59 PM

makeovers, system overhauls, and new green-from-the-ground-up construction.

They’re choosing renewable materials and earth-friendly supplies, energy-efficient
technologies, and management practices that reduce environmental impacts (p. 24).38
Possibly the greatest benefit of ecotourism has been the transfer of the ecotourism
philosophy to the preservation of many practices that support mass tourism markets. One
simple starting point that is often adopted for identifying sustainable practices is the pro-
motion of the four Rs: Reuse, Recycle, Reduce, and buy Recycled products. Imagine all of
the waste that can be generated in a traditional lodging facility. Hoteliers have found that
conserving resources is good for their profit and also good for their image. While the ini-
tial choice to reduce waste may come from saving money or complying with government
regulations, there is increased demand from tourists for businesses to follow sustainable
practices. Table 13.2 outlines differences in lodging operations between sustainable and
conventional properties. Individuals are increasingly realizing that their consumption
choices directly influence the environment and have put pressure on hotels to follow the
same waste reduction strategies that they have adopted in their own homes.39
As the chapter opener demonstrates, even Tyla faced this same dilemma as the
decisions about what she and her staff could do to reach her dream of sustainabil-
ity covered a broad continuum of decisions. These decisions ranged from relatively
inexpensive and easy-to-implement changes to costly, time-consuming, and complex
actions. What should be apparent as we begin to explore sustainability in the context
of travel and tourism is that it is a concept that is still developing.
To sustain the viability of destinations, ecotechniques, developed under the
philosophy of ecotourism, are now being used by tourism suppliers to sustain the
positive benefits of tourism and reduce and minimize the negative effects it can have
on destinations and host communities. In addition, more destination decision makers
TOURISM IN ACTION
OUR NATIVE VILLAGE
Our Native Village is a 24-room eco-resort near Banglore, India. This 100 percent eco-friendly resort combines
warm village hospitality with environmental conservation.
The community at the eco-resort is committed and devoted to living in harmony with the environment by doing the
following: generating 70 to 80 percent of the electricity using a wind mill, solar panels, and bio gas plants; harvesting rain
water through a channeling system on the roofs; processing and reusing all waste (organic, paper, and gray/black water)
except plastics (which are sent out to a recycling unit); growing vegetables, herbs, and medicinal plans for kitchen and
spa use; providing handmade, chemical-free soaps and shampoos in the rooms; setting up a pond-style, chemical-free
swimming pool; and using solar panels for water heating.
Their effort has been recognized: Our Native Village received accolades at the World Responsible Tourism
Awards 2008; featured in the Asian Geographic Passport magazine (Feb-Mar 2010) as No.1 among the top 10
eco-friendly places to stay in India; and was a finalist at the Wild Asia Responsible Tourism Awards 2012.
Guests visiting and staying at this eco-resort have given it a thumbs-up, considering it a great place to unwind as
they experience Indian farm life and indulge in traditional games.
The guest experience at the resort has made them value the importance of sustainability approaches and
living in harmony with the environment. The little sacrifices that guests make can go a long way in sustaining the
fragile environment in rural destinations.
Sources: http://www.ournativevillage.com; http://economictimes.indiatimes.com/magazines/panache/tired-of-life-in-a-metro-unwind-
on-a-rural-safari/articleshow/52650800.cms
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are using formal planning processes to guide future development and operations to
sustain both the marketability of the destination and the quality of life of its residents.
From the five ecotourism goals for “establishing standards” discussed earlier, you
can see how host communities can gain many potential benefits from incorporating
the concepts into sustainable practices rather than simply chasing mass tourism by:
• Generating more income for more local community members,
• Promoting understanding between locals and members of different cultures,
• Educating local populations on matters of health, education, energy use, business,
and environmental conservation, and
• Providing a financial incentive to protect and conserve a globally significant natural/
cultural resource.40
Many of the techniques just described can also be used in already developed
tourism areas to improve or sustain the existing tourism industry. Although applying
one or two techniques will not change an area from a mass tourism to an ecotourism
destination, simply to adopt efforts such as water conservation and sign codes (limiting
their size, height, and lighting) can help alleviate problems that may have arisen.
Research has shown that there are some identifiable barriers that discourage customers
from participating in green practices (e.g., only having sheets changed on stays of
three or more nights, using key cards to turn power to the room off and on) including
inconvenience, perceptions of cost cutting, and concerns about decreased luxury.
Interestingly, although customers expressed interest in being green, they are more likely
to behave with a higher level of environmental responsibility at home than in a hotel.41
As you saw in Chapter 12, there are other means of managing the physical and
social carrying capacity of developing and developed tourism areas. For example, to
eliminate crowds, policies of dispersion have been used. Rather than allowing one area
of a destination to become the center of all tourism activity, the infrastructure and
superstructure can be spread throughout the region to force visitors to be more evenly
distributed. Zoning can also be used to limit the amount of development that can
occur in any one place.42
To promote sustainability and manage the carrying capacity of specific sites,
restrictive entry is often used. Sometimes the number of visitors is limited through
reservations, tickets, or a lottery system. At other times, the number can be limited by
charging higher fees, thus limiting the number of visitors able and willing to pay the
price of admission, and usually reducing the number of times any tourist chooses to
visit the site. Limiting types of usage can also reduce the number of users of a site or
the impact to the environment any user has on it.
When it comes to sustainability, talk is cheap and putting sustainable practice in
place can be priceless for the environment. One way for any tourism or hospitality
organization that has a building to prove that they are dedicated to sustainable prac-
tices is to obtain LEED (Leadership in Energy and Environmental Design) certification
from the nonprofit U.S. Green Building Council. LEED certification can be obtained
for new construction as well as renovations. According to the U.S. Green Building
Council, in the United States alone there are over five billion square feet of lodging
space dedicated to guest rooms, event space, and public facilities.43
There are four levels of certification; starting at certified and then moving up
through silver and gold, finally reaching the ultimate level, platinum. Each of these
levels is reached by accumulating points in eight categories.
• Sustainable Sites—consideration for the entire ecosystem including land and water.
• Water Efficiency—consideration for water consumption.
• Energy and Atmosphere—consideration for energy sources and use.
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• Materials and Resources—consideration for sourcing, transportation, and waste.

• Indoor Environmental Quality—consideration for air and light quality and sound
control.
• Location and Linkages—consideration for design choices that include interrelationships
with local surrounding.
• Innovation and Design—consideration for use of innovative technologies and
design.
• Regional Priority—consideration for specific regional concerns.44
The last category, Regional Priority, is especially important as LEED certification
efforts are expanding internationally and are now recognized in over 20 countries.
Since all of us either work in or spend time in buildings, any efforts directed at embrac-
ing sustainability will touch and have a positive impact on all of our lives.
Achieving LEED certification is definitely within reach of any hotel operation.
For example, ITC Hotels which is headquartered in New Delhi was able to obtain
LEED Platinum certification for its entire portfolio of hotels. This feat was achieved
by doing such things as use biodegradable materials and supplies, using locally grown
and processed foods and beverages, promoting fair trade practices, and it even owns
a wind farm to supply power to one of its hotels.45 Other certification programs such
as The Green Seal for hotels and Energy Star which have both been certified by the
TOURISM IN ACTION
GOING GREEN: DOING GOOD AND DOING WELL
When hotels “go green” by instituting conservation measures, they benefit in two ways. The measures can save
the earth’s resources and reduce costs at the same time. Here are a few examples:
Conservation Measure Eco-Benefits Cost Savings
Energy-saving lightbulbs and By using more efficient lightbulbs By reducing energy usage, the
“smart” thermostats and allowing high-tech thermostats hotel saves on its energy bills,
to regulate heat and air conditioning usually by tens of thousands of
when a room is empty, hotels reduce dollars per year for medium to large
the energy they demand from their properties.
regional power grid, freeing up this
power for other users.
Towel and linen reuse By allowing guests to choose to re- Hotels not only save costs
use towels and bed linens, hotels cut associated with water and sewer
their water consumption and reduce bills and detergent and bleach but
the use of chemicals by about 10%. also cut labor costs. Housekeepers
can clean more rooms when they
do not have to change sheets and
towels in each room assigned.
Refillable shampoo dispensers By dispensing with all those little Complimentary shampoo can be
plastic bottles, hotels free up space provided at a reduced cost because
in area landfills. most of the cost of such small-size
grooming products is represented
in the packaging. Hotels find they
can offer higher-quality shampoo to
guests at a lower cost to the hotel
when going “green.”
Source: Based on Rosenthal, John. (2003, January–February). Why hotels go green. National Geographic Traveler, p. 20.
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U.S. Environmental Protection Agency and the Green Food Service Alliance which has
been certified by the National Restaurant Association are beginning to bring credibil-
ity to claims of sustainability.
A Future of Sustainability
There is a recent debate about the difference between a tourist and a traveler. What is
your initial reaction when you read the word tourist? Tourists are likely to take vaca-
tions that are characterized by elements found in mass tourism, with little awareness
or concern for natural and cultural resources in the destination. Tourists are more
concerned with convenience and familiarity and can be disconnected from the places
and people they visit. Travelers, on the other hand, want to immerse themselves in the
destination so they are actively experiencing a place rather than passively observing
a place. Travelers will purposefully avoid “touristy” areas and seek authenticity by
exploring remote places and meeting local people to appreciate the true meaning of the
landscape and the culture. There is a stronger connection and sense of belongingness
for a traveler and they are more likely to make a contribution to the destination based
on their deeper understanding of its character.46
It may seem like an easy solution that everyone should be a traveler, get off the
beaten path, and follow the ecotourism principles. However, that is not entirely the
case and some argue that mass tourism has its own place if it is managed well. What
if everyone got off the beaten path? That path could become a road, and that road
could become a highway.47 Ecotourism essentially promotes visitation to remote and
fragile areas that are highly sensitive to the impact of tourists. Relying on ecotourism
People exploring the Everglades National Park on a guided boat could be labeled as soft
ecotourists. Photo by Cathy Hsu
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exclusively would threaten the few undisturbed places left in the world, so a better
solution is to develop mass tourism according to the triple bottom line of sustainabil-
ity, and allow for ecotourism and other forms of alternative tourism as a supplement.48
One area of opportunity within sustainable tourism is “lifestyle entrepreneurship.”
Small and medium-sized enterprises (SMEs) with fewer than 250 employees make up
a considerable portion of the economic production and employment within the tour-
ism industry. SMEs tend to be deeply rooted to the local landscape and culture and
their size enables them to make deeper connections with their guests. Tour companies,
outdoor recreation guides, bed and breakfasts, and food trucks are all examples of
tourism business that could be operated successfully as an SME. Some owners of these
SMEs are considered lifestyle entrepreneurs because of a conscious choice to build
and maintain a small and flexible business so that they can pursue a satisfying lifestyle
rather than profit optimization.49
Now, think back to Chapter 1 and our discussion of the many different
definitions and approaches that have been taken to describe the tourism industry.
Do you remember how difficult it has been for industry participants to agree on a
singular focus? It seems to be just as difficult to describe sustainable tourism. Yet, as
difficult as it may be to define, sustainability is critical to the industry as “tourism
contains the seeds of its own destruction; tourism can kill tourism, destroying the very
environmental attractions which visitors come to a location to experience” (p. 27).50
At its root, “sustainable tourism” is an oxymoron because tourism inevitably will have
negative impacts on the destination and “true” sustainable tourism development is
unachievable.51 However, if we assume that people will continue to want to travel,
the philosophy of sustainability will help minimize the negative impacts and maximize
the ability of future generations to see the world.
Summary
The tourism industry has exploded in recent decades as the Now, ecotourism involves travel to sensitive natural and
number of travelers continues to grow. Quicker, cheaper, cultural environments to observe and learn about very
and safer transportation to almost every corner of the different cultures and environments and participate in
globe and an increase in the number of people who now low-impact sporting activities.
have the leisure time and money to travel have made this On a broader scale, members of the tourism industry are
possible. Many of the gains that have been realized from attempting to ensure the long-term survival and prosperity of
this increased level of travel have been economic, but there travel-related activities by embracing sustainable practices.
have often been costs to the environment and the people in As the use of terms such as ecotourism and sustainability has
visited areas. In response to these impacts, many initiatives grown in popularity, many industry groups have begun to
based on the concepts of sustainable tourism can be taken establish guidelines and standards to define and set apart these
and have been taken. terms. There seems to be a great deal of confusion about the
The seed of ecotourism was planted with the definitions and usage of both of these terms, as well as of
environmental movement and continues to explode. other related terms that have found their way into the tour-
The term ecotourism was originally used to label a ism vocabulary. It seems as though everyone finds marketing
form or philosophy of tourism that emphasized the appeal in describing its service offerings as green, sustain-
need to develop tourism in a manner that minimizes able, or ecologically friendly. However, creating ecologically
environmental impact and ensures that host communities friendly or sustainable operations is more than just words; it
gain the greatest economic and cultural benefits possible. requires actions and commitments.
You Decide
The chief executive officer of Xanadeaux Hotels and Resorts would also result in lost profits. Therefore, to begin this pro-
had been studying the marketing and economic benefits of cess, he asked the director of marketing to survey the sustain-
adopting sustainable practices and decided it was time to act. ability actions the company was currently taking and then
Failure to adopt sustainable practices at the company’s prop- develop a marketing plan that could be used to highlight the
erties would not only put it at a competitive disadvantage; it company’s best practices and leadership in these efforts.
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A quick inventory revealed that many standard practices of the chain, it was time to make a decision. It seemed
such as energy and water conservation were in use through- as though most competitors were using terms like green,
out the chain, but it also revealed that each of the general sustainable, earth-friendly, and environmentally friendly
managers had different ideas about what it meant to run a in their advertising and publicity programs; so why not
sustainable operation. These differences appeared to be the take the same tack for Xanadeaux, and let practice catch
most pronounced between those managers who were located up with reality in the future? Because most of the prop-
in resort settings as opposed to those who were located in erties already had programs in place to reduce waste,
major metropolitan areas. What soon became apparent was conserve energy, and recycle whenever possible, wasn’t
that there was no organization-wide sustainability program. Xanadeaux in fact embracing sustainability? Or would
Having been charged with developing a marketing they be committing a sin of greenwashing to include such
plan to showcase and promote the sustainable posture statements in their marketing?
Net Tour
To get you started on exploring Internet links for this www.seacanoe.net/
chapter, please see: www.dundeeparkacademy.com/
www.ecotourism.org new.gstcouncil.org/
www.ecotourism.org.au www.myfootprint.org/
www.ec3global.com www.travelgreen.org/
www.dep.state.fl.us/greenlodging/ www.wwoof.net
www.sustainabletourismonline.com/default.aspx
1. When can tourism be too much of a good thing? 5. What benefits may be achieved by a host community
2. What are the major principles of ecotourism? through the use of ecotourism practices?
3. Why is it important to establish standards for the use 6. How can destinations move from mass tourism to
of terms such as eco? sustainable tourism practices?
4. How can hotel and resort operators create sustainable
practices?

1. Interview a travel agent about the ecotraveler market 4. Identify a tourism business (e.g., attraction, resort,
segment. How many of his or her clients would be part retail) that features sustainability in its operation. List
of this segment? What destinations does he or she con- all the activities and actions being taken that illustrate
sider ecotourism destinations? Collect information on its effort in achieving and maintaining sustainability.
one of these destinations to bring to class. 5. Antarctica is an once-in-a-lifetime dream destination
2. Based on the descriptions of ecotourists that range for many adventurous travelers. Search for informa-
from hard to soft, how would you describe yourself? tion on the types of cruise and package that take those
Provide examples of travel activities you would enjoy brave souls to the southern tip of the earth. Are those
that fit your description. cruises and packages eco-friendly? Would visits impact
3. Make an appointment to visit a local hotel or resort. the ecological system and environment in Antarctica?
Using the information presented in Table 13.2, “Sus- Should people visit Antarctica at all? Would you? Why
tainable versus Conventional Lodging Operations,” or why not?
classify how the property measures up.
Glossary
Ecotourism (also called ecological tourism) A form of different culture and environment and participate in
tourism that focuses on environmental and cultural low-impact sports activities.
preservation. Geotourism Tourism that sustains or enhances the geo-
Ecotourists Leisure travelers who prefer to visit less pop- graphic character of the place being visited, including
ular, more primitive destinations. its environment, culture, aesthetics, heritage, and the
Ecotravelers Travelers who visit sensitive, natural, and well-being of its residents.
cultural environments to observe and learn about a very
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Hard ecotourist Physically active travelers with a strong Soft ecotourist Physically passive travelers with moder-
environmental commitment who seek specialized trips ate environmental commitment who seek multipurpose
with an emphasis on personal experiences. trips with an emphasis on interpretation and physical
LEED An alliteration for Leadership in Energy and Envi- comfort.
ronmental Design, a certification program sponsored by Sustainable tourism Tourism activities and development
the nonprofit U.S. Green Building Council recognizing that do not endanger the economic, social, cultural, or
sustainable practice in building design, construction, environmental assets of a destination.
and renovation. Voluntourism A trip that combines travel activities with
Mass tourism Twentieth-century phenomenon whereby charitable work.
the working and middle classes began traveling in large Wildlife tourism Travel to observe animals, birds, and
numbers for leisure purposes. fish in their native habitats without altering their
Nature-based tourism Travel to unspoiled places to expe- behaviors.
rience the natural world.
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CHAPTER 14
The Future of T
ourism
The more things change, the more they stay the same.
—Alphonse Karl
LEARNING OBJECTIVES
1. Describe emerging trends that will affect future 4. Describe how and why tourism service suppliers
tourism marketing decisions. are becoming larger through mergers, consolida-
2. Describe how emerging market segments will tions, and alliances.
affect the future of the tourism industry. 5. Describe how technological changes will affect
3. Describe how tourism service suppliers will be the future of the tourism industry.
affected by changing consumer needs. 6. Explain why the human touch will remain important
to the future success of tourism service suppliers.
CHAPTER OUTLINE
A New Reality Safety and Security Strides
Keeping the Human Touch
Introduction
The Shape of Coming Tourism Markets The Green Frontier
Demographic Shifts Tourism Research
Travelers with Disabilities and Special Needs Types of Tourism Research
Changes in Business, Professional, and Who Conducts Tourism Research?
Conference Travel Who Needs and Uses Tourism Research?
When, Where, and How Is Tourism Research
Emerging Tourism Markets
Conducted?
Slow Tourism
Adventure and Extreme Tourism Tourism Research Is Hard to Do
Medical Tourism Conclusion
Vocation and Real Estate Tourism
Space Tourism You Decide
Marijuana Tourism Net Tour
Meeting Future Tourists’ Needs Discussion Questions
Transportation Transformations Applying the Concepts
Moving into an Era of Competitive Glossary
Cooperation and Consolidation References
Service Enhancements
Amplifying Guests’ Experiences
382
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ourism 383
Chapter 14 ▸ The Future of T
A New Reality
Pokémon Go is a gaming craze that has got even the hospitality sector hooked. Austra-
lia’s Mantra Group launched the world’s first Pokémon Go–friendly hotels in Sydney
and Melbourne. Pokémon Go fans who use their mobile phones to catch virtual mon-
sters are encouraged to visit one of the hotel bars. A stop at the hotel bar will not only
increase the chances of catching one of the monsters but Pokémon Go fans can also
take advantage of food and beverage promotions. Pokémon Go is just one of the many
examples where technology is at the forefront of the hospitality experience. Trends
such as Pokémon Go will certainly come and go but it is technology that is shaping the
future within the hospitality sector—a new reality.
Let us, for example, consider the following scenario. A business traveler arrives at
a hotel. Instead of being greeted by a human being at the reception desk, the guest will
be checked-in by a human-looking robot receptionist. Amazingly, the robot reception-
ist can also speak the guest’s native language. The luggage is quite heavy to carry to
the room on the 3rd floor. No worries because a robot porter is on hand to transport
the case. There is no need for any fiddly keys because the facial recognition system will
open the door to the hotel room. As the guest settles in, a personal robot concierge is
at hand to answer any questions from providing a weather forecast to dimming the
lights. In the evening, the guest is winding down in the hotel bar. The piano is being
played by a robot, who is actually quite good. An evening snack is also prepared by a
robot chef. Nothing too fancy but it tastes surprisingly good.
This may appear to be far from reality but a robot hotel is coming soon close
to you. Robot-staffed hotels, such as the Henn na Hotel in Sasebo, Japan, are
already using robots for traditionally human-occupied jobs, such as concierges
or porters (refer to page 402). And this technology is becoming increasingly main-
stream. For example, at the Marriott Hotel in Ghent, Belgium, a humanoid robot
named “Mario” welcomes guests and helps with the check-in process. Mario can
even dance! In fact, Mario has become not only a new employee but also a mas-
cot for the hotel. Similarly, Royal Caribbean has installed a Bionic Bar on four of
its cruise ships, Harmony of the Seas, Quantum of the Seas, Anthem of the Seas,
and Ovation of the Seas. Two cocktail-mixing robot bartenders, who can also
dance, can come up with a cocktail concoction from a selection of 30 spirits and
21 mixers! The movement of the arms were even patterned after Marco Pelle from
the New York Theater Ballet. The drinks are also served at the bar by the robots. The
hotel chain Hilton is experimenting with a concierge robot named “Connie.” Guests
can ask Connie questions such as providing information about restaurants and tourist
attractions.
This raises the question if robots will become the new normal in the hospitality
sector. The development of an ecosystem will certainly mean that service robots will
gain wider customer acceptance and no longer be seen as a novelty. Moreover, techno-
logical advancements such as improvements in robotic facial expressions will improve
the overall service experience.
But will robots replace humans in the hospitality sector? The blurring of real and
virtual experiences is certainly redefining everyday lives and robots will be able to
assist with routine tasks (refer to page 404). However, robots will never be able to
replace the human touch—emotion. It will be the concierge who will be able to help to
get hold of tickets for a sold-out concert. It will be the bartender who will be able to
mix cocktails exactly to the required taste and provide entertaining company. It will be
the hotel doorman who has all the local knowledge that is unmatched.
Technological innovation will undoubtedly play an increasingly important role
within the hospitality sector. It will, however, be the human interaction that will make
the difference. Ask any guest!
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The future of the world’s largest industry is in all of our hands. Victoria/Fotolia
Introduction
Peering into the future of travel and tourism is similar to looking into a cloudy crystal
ball. We may not be able to bring the future into a clearly focused picture for you, but
the bright light of a growing industry is glowing from the center of our crystal ball.
The knowledge you have gained through studying the information in this textbook has
given you a sound foundation for thinking about the future. Based on this knowledge,
you can begin to see some of the challenges and opportunities the tourism industry will
face. As you look to the future, can you see yourself becoming a professional member
of this industry?
In this chapter, we gaze into the future by considering some of the emerging trends
in the tourism industry. These trends may shift and new ones may emerge, but think-
ing about the future allows you to plan for it. As you read about each of the trends,
think about the changes you see happening around you and imagine what the world of
tourism might be like 5, 10, or even 20 years from now. No matter how much uncer-
tainty the future holds, there is good news. There will always be the need for talented
professionals to tackle the management, marketing, and financial challenges of this
growing industry.
The Shape of Coming Tourism Markets

You read about many of the important tourism market segments of today in Chapter 2.
Will these segments still be as important in the future? There is no question that tour-
ism markets will change, but what will these markets look like? Two possible scenarios
are beginning to unfold. One scenario points to mass markets and a “one-size-fits-all”
approach to delivering tourism services; the other points to highly focused services that
are targeted toward meeting the needs of specific market niches.
In countries growing in economic strength, such as Poland, India, Russia, China,
Panama, Vietnam, and Brazil, many tourism services will be developed to meet the needs
of mass markets. We will see this type of development as levels of disposable income, lei-
sure time, and infrastructure improvements in these countries encourage tourism growth.
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ourism 385
Increased economic activity will lead to increased levels of leisure travel both
domestically and internationally. As more citizens of the world discover the enjoy-
ment that comes from tourism activities, increasing participation in travel will drive
the development of new facilities and services. The highly populated, newly affluent
countries of China and India will dominate the market as the top two countries for
outbound tourists, supplying the world with a huge demand for travel services. There
will also be a large flow of VFR tourists to these countries as former emigrants return
to visit relatives in the “homeland” and to learn more about their heritage. Unlike
their American and European counterparts, who seek arts and architecture, and active
travel experiences, Chinese and other Asian-born tourists are most likely to be moti-
vated to travel to shop and experience cultural values of group engagement, learning,
and promote geopolitical aspirations.1
Tourism markets will probably take a very different path in developed countries
such as Canada, France, Germany, Japan, the United Kingdom, and the United States.
In these countries, we will continue to see mass-market tourism, but marketers will
continue to refine and even “tailor-make” their service offerings to meet the needs of
increasingly demanding and sophisticated travelers.
Demographic Shifts
One of the biggest changes that will occur in the tourism market in the 21st century
will be the increasing size of the mature traveler segment. The baby boom generations,
those tens of millions of post-World War II babies born between the years 1946 and
1964, are retiring in record numbers. As you learned in Chapter 2, mature travelers
are a very important tourism segment because of their affluence and ability to travel
at any time of the year. By 2050, 34.9% of the U.S. population will be 55 or older,
compared with 26.7% in 2010.2 According to Statistics Canada and the U.S. Census
Bureau, Canada will see an even larger increase in its mature traveler group, and the
retirement age population in Japan is also exploding. This explosion in the number
of senior citizens is happening in virtually all industrialized countries of the world.
Consider the potential effects on tourism of the demographic age pyramids represented
in Figure 14.1.
Baby boomers are already the most likely age cohort to travel.1 As retirees, they
will be even more likely to travel than their parents and grandparents were, and they
will be somewhat different in their tourism interests. Senior baby boomers will be
healthier, better educated, and wealthier than seniors of previous generations. The
increasing number of SKINs (Spend Kids’ Inheritance Now), who are not willing to
save their financial assets for their children, have contributed to a growing market
of longer holidays.3 Many will have already traveled throughout their country and in
foreign lands, often as students or businesspeople. Therefore, they will be seeking new
and exciting adventures in their future travels.
So what can we predict about baby boomers’ travel needs once they achieve senior
citizen status? First, they will use computers and their smart phones as a source of
travel information (both before and during their travels) and reservations and booking.
Although they may not be as “connected” as their children and grandchildren, most
baby boomers are technologically savvy having owned and used computers for decades.
Second, they are likely to be interested in vacations that include a big dose of healthy
food, exercise, intellectual stimulation, and the great outdoors. Because they have been
health conscious all their lives, the baby boom generation will be a very physically active
group of senior travelers. They will probably place more importance on doing and being
immersed in destinations rather than simply seeing attractions. Many will have already
“been there and done that” during trips when they were younger, so baby boomer seniors
will want to go to new destinations that offer different things to experience and learn.
M14_COOK1670_06_GE_C14.indd 385 16/05/17 3:24 PM

Age
110
Male 105 Female
2009
2010 100
2030 95
2036
90
2050
85
80
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0
3.0 2.5 2.0 1.5 1.0 0.5 0.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0
Population in Millions
FIGURE 14.1
Population projections—2050. Sources: Statistics Canada and U.S. Census Bureau 2008. Statistics Canada. Review on
February 27, 2012. Retrieved from http://www.statcan.gc.ca/pub/91-520-x/91-520-x2010001-eng.pdf.
Many baby boomers will want to travel with their children and grandchildren.
Because so many families live far away from relatives and have so little common lei-
sure time, vacations have already become family reunion time. In addition to more,
longer-living grandparents, there are fewer children and grandchildren due to fall-
ing birth rates. As grandparents have more leisure time and parents lead increasingly
complicated lives, a new phenomenon, called “grandtravel,” that finds grandparents
and grandchildren traveling and holidaying together emerged and will continue to
grow. According to the Travel Industry Association of America,4 30% of U.S. leisure
travelers who are grandparents have taken at least one vacation with their grand-
children. Cruises, timeshares, resorts, and extended-stay and all-suite hotels are well
suited to meet the needs of extended family getaways. In addition, second homes will
become more common as a form of accommodations at destinations as baby boomers
retire and can afford seasonal homes or desire options for extended stays (remember
Homeaway and VRBO from Chapter 7). Unlike in the past, retirees not only will flock
to warm climates (snowbirds) but also will purchase in adults-only communities in
other resort areas such as island destinations in the Caribbean, Hawaii, the Maldives,
and Mediterranean; and the mountain regions in the U.S., France, and Germany.
Many of these second-home communities will offer assisted-living services and local
travel opportunities.
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ourism 387
More baby boomers will be single in their golden years because, as a generation, they
have been less likely to re-marry and more likely to divorce. As people’s attitudes toward
marriage and singleness change, more individuals choose to stay single or get married
later in their lives. By 2020, it is projected that 28.6% of all households will be composed
of single persons.5 Combine this with the fact that singles spend more on themselves than
those living with others; the future looks bright for leisure markets.6 In fact, the main
purchasers of Lonely Planet guides are single, middle-class females.7 For some companies,
such as the Explore Worldwide, single travelers are their core market. Research shows
that most solo travelers actually have friends and family with whom they can travel, but
they prefer to travel by themselves.8 When traveling by themselves, single travelers often
feel a sense of freedom and strong urge to take part in activities, such as adventure holi-
days and extreme sports, that they would not do if traveling with others.9
A single traveler is defined by the U.S. Travel as a person who lives alone and trav-
els with or without a companion. Single travelers literally come in all shapes, sizes, and
life circumstances. An 18-year-old college student on spring break in Fort Lauderdale,
Florida, qualifies as a single traveler, as does an 80-year-old widow enjoying a luxury
barge tour on the great rivers of Europe. As suggested by research, even married peo-
ple sometimes prefer to holiday on their own to escape the other half!
Single travelers may not travel alone because traveling alone can be extra costly.
Most tours, all-inclusive resorts, and cruise lines charge a single supplement that ranges
from an additional 25% to 100% more than the per-person price a couple would pay.
The Internet is now making it possible for single travelers to find acceptable room-
mates so they can avoid the single supplement premiums and meet new friends.
Baby boomers will continue to use travel to meet other single people and to fulfill
social needs. Savvy tour companies and travel agents will set up travel companion
matchmaking services so that boomers do not forgo travel for lack of a travel buddy
or owing to expensive single supplement prices for cruises and tours. Grand Circle
Travel, a tour operator, has already taken steps to aid the single traveler by offering
shoulder season tours that have no single supplements.
Research has shown that senior baby boomers main travel motivations in descend-
ing order were to experience Sun/beach location, visit family and friends, and then
participate in nature adventures. These were followed by secondary drivers including
wellness, spa and health treatments, and city trips. It is also interesting to note from
this research that these seniors having good income and health are likely to travel
more extensively in the initial years, and then for long distance travel and international
travel to decrease as they age. As the aging process continues, the number of short trips
associated with health and well-being will increase.10
Another demographic shift, which will have an impact on international travel espe-
cially, has been the shift in the ethnic mix of North America. During the 19th and first half
of the 20th centuries, most immigrants to the United States and Canada were Europeans
by birth. These ethnic groups enjoyed traveling to their mother countries and fueled trans-
atlantic tourism in the 20th century. But the majority of immigrants during recent decades
have come from Latin and Central America, Asia, and former Soviet Union nations (see
Figure 14.2). These individuals, as they become more affluent, will also want to visit the
lands of their heritage, generating a substantial increase in travel to their homelands.
These demographic shifts are bad news for some tourism suppliers. Snow holiday
resorts will experience a double negative effect. Baby boomers and their parents who have
been ski resorts’ mainstay market segment are giving up skiing as they age, and unfortu-
nately, many did not turn their children on to the sport. In addition, winter sports have
been primarily the pastime of Northern and Western European ethnic groups. These ethnic
groups are shrinking as a percentage of the population of the world. Unless members of the
growing Asian and Hispanic ethnic groups can be enticed to learn and participate frequently
in winter sports, substantial shrinkage in participation rates will occur in the next 25 years.
M14_COOK1670_06_GE_C14.indd 387 16/05/17 3:24 PM

91.6%
Europe 60%
14.9%
13.22%
3.7%
Asia 3.6%
30.9%
34.78%
3.9%
North America* 32.2%
43.8%
35.28%
.2%
South America 2.1%
5.8% 1901–1910
8.40% 1941–1950
1991–1998
.1% 1999–2010
Africa .7%
3.7%
7.0%
*Mexico, Canada, and Caribbean island countries
FIGURE 14.2
U.S. immigration countries of origin through the early 21st century. Sources: 1998 Statistical Yearbook
of the U.S. Immigration and Naturalization Service. Washington, DC: U.S. Government Printing Office; and
2010 Yearbook of Immigration Statistics. Washington, DC: U.S. Department of Homeland Security.
Although skiing has decreased in popularity (although being replaced in part by

snowboarding) in the traditional ski countries in North America, Europe, and Japan,
investment in ski resorts continues, and there is development of ski domes at retail
malls. The future may see partnerships between North American and European
ski companies to bring the classic resorts of Europe into the 21st century. Resort
developers are hoping the snowboarders of today will convert to skiers as they age.
Future challenges for snow holiday resort developers will be primarily environmental.
Growing concerns about human pollution and traffic congestion are being raised
whenever and wherever resort expansion is proposed. In the future, resort manage-
ment and developers will need to develop more environmentally conscious operations.
Whistler Resort in British Columbia, Canada, already has an environmental manager
as part of its full-time staff.11
The focus will be on development of winter sports resorts, not limiting the mar-
ket to skiing and snowboarders, as well as the development of winter theme parks
that offer plenty to do for the expanding nonskier market. Traditional winter season
resorts will also expand their entertainment and sports offerings during the other three
seasons of the year. There is a need to look at the mountain as a year-round tour-
ism resource and add other desirable alternatives, such as guided nature hikes, cycling
adventures, and paragliding.
Other members of the tourism industry that will need to change to sustain rev-
enues are theme and amusement parks. The likelihood of visiting a theme park goes
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ourism 389
Preserving the past becomes more challenging as the number of visitors increases.
Photo by Thomas Sun
down after age 44, so as the average age of the industrialized countries’ populations
increases, either theme parks will see reduced attendance numbers, or they will need
to modify their offerings to appeal to older visitors. You can expect to see theme park
growth in some expected locations such as China and Dubai as people seek to travel,
but maybe not as far away from home, to experience new adventures, especially vir-
tual relativity options, in comfortable and familiar surroundings.
At the same time theme parks are appealing to an older crowd, they will need to
strike a delicate balance as they need to cater to millennials who are current and future
patrons with their families. “They’re looking for a collection of different kinds of com-
plementary experiences rather than just one main event. . . . ‘Curating the experience’
is the process of customizing an encounter and controlling how it is shared with the
world. This is as simple as choosing a filter on Instagram, finding the right emoji to
include in a status update, or hashtagging a tweet” (p. 41–42).12 These 16 to 34 year
olds who have grown up in a tech-savvy digital world are our future customers!
Travelers with Disabilities and Special Needs

Physical ability is an important determinant of travel. Travelers with disabilities and
special needs might have minor limitations, from slight hearing impairments to major
mobility obstacles such as confinement to wheelchairs. The United States took the lead
to increase accessibility substantially for all by passing the Americans with Disabili-
ties Act in 1990. Since that time, access to most major tourism resources and services
has greatly improved within the United States. However, access is still a major issue
in other countries of the world and seriously restricts the ability to travel for tens of
millions of people. The proportion of the world’s population that has disabilities will
surely grow as the average age in industrialized countries continues to rise.
The Society for Accessible Travel & Hospitality estimates that about 70% of
adults with disabilities travel at least once a year. With the increasing size of the mature
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traveler segment, accessible travel will become more and more of an issue. Although
seniors the world over are likely to continue their interest in travel and new sights and
experiences, they will begin to have special needs owing to changing health.13
Some forward-thinking organizations are already stepping up to better serve those
with special physical needs. By 2005, Avis had introduced Avis Access in its top 100
markets. This program featured a variety of specially equipped cars and vans that make
renting a car a possibility for many who have not been able to rent in the past. These
special cars offer such useful additions as swivel entry seats and hand (as opposed to
foot) controls. Microtel Inns and Suites started a new training program called Opening
Doors to enhance service to those with disabilities. Most cruise ships, either by their
new designs or through retrofitting, now afford the use of mobility scooters so that
those with limitations can easily traverse the huge decks.
As tourism promoters and service suppliers develop visitor opportunities, market-
ing plans, and operational strategies to serve this growing market; they will grapple
with issues of accessibility and accommodation. These issues will center on under-
standing differences between the concepts of handicapped accessible and handicapped
friendly. It is obvious to disabled and special needs travelers that many organizations
have utilized able-bodied individuals to plan their service offerings.
The Internet will be an excellent way for those with special needs to find suppliers
who will accommodate them. Sites such as wheelchairsonthego.com (which includes
a list of accessible fun places in Florida) will become more common in the future.
Hotels, attractions, and other suppliers will feature virtual tours of accessible areas to
convince the physically challenged that they too are welcome to enjoy the services of
the tourism operator. In addition, and possibly the most important thing that tourism
service suppliers will do is to rely on persons with specific movement disorders to
help design their services. For example, when hotel operators see that a person who is
actually disabled and using a wheelchair rather than someone who is not disabled and
simply sitting in a wheelchair to see how it feels when testing rooms will soon realize
that it is very difficult if not impossible to transfer from a wheelchair into a bed that is
higher than 24 inches or use bathroom facilities with only one grab bar.
Changes in Business, Professional,

and Conference Travel
What will happen to the ever-important business and professional travel segment of the
tourism market? That is where our crystal ball becomes particularly cloudy: Current
trends support the possibility of a decrease or an increase in business and professional
travel. Trends in communications, such as computer networking and satellite video
image transmission, seem to indicate that business travel will become less necessary.
Technological advances allow businesspeople to see each other and share information
as if they were in the same room, but will virtual contact replace face-to-face meetings?
For example, technological improvements in virtual conferencing could slow the
rate of growth in business and professional travel. Improvements now make virtual
conferencing (as simple as Skype and Facetime) just as convenient and easy as a tele-
phone conference call. Since it is now possible to link participants at multiple sites
with high resolution audio and video quality (creating the sensation that they are pres-
ent), the need for some travel has been reduced, but this easy familiarity is creating the
need for other types of travel.
Think about the potential for an international media company such as Pearson, the
publisher of this textbook. Sales representatives from each of its geographic regions within
the United States, for example, can meet regularly at a designated virtual conferencing
center within their region for product updates, and meet virtually with members of other
regions or countries on a quarterly basis for marketing updates and training. Travel may
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ourism 391
still be involved as the power of personal contact and networking can never be underesti-
mated, but by gathering its sales force at regional sites, Pearson could increase efficiency
by saving on both travel expenses and time. Where will these virtual conferencing centers
be located? The logical locations are those properties—conference centers, hotels, and
resorts—that can afford to build and equip quality virtual conferencing facilities. This
may in turn lead to more travel, although it may be for shorter distances and durations.
Even though virtual conferencing may help to control travel expenses, more and
more companies will be doing business with firms across the world. Representatives of
these organizations may feel the need for face-to-face meetings to build trusting relation-
ships that can come only from sharing time together. North American businesspeople
in particular are being forced by economic necessity to work with other businesspeo-
ple from Asia, the Pacific Rim, Central and South America, and former Soviet Union
nations. In all these locations, trust is the primary foundation for business transactions.
These relationships can be developed only by spending time together, sharing meals,
and getting to know one another. Because this type of relationship building requires
time and face-to-face interactions, it is unlikely that technology will override these cul-
tural factors and the need for face-to-face relationship building opportunities.
Our best guess is that travel for business and professional reasons will continue to
increase in spite of further advances in communication technology. Doing business in the
future will involve more, not less, collaboration with others. Some of this increased need for
interaction among businesses will be satisfied with telecommunications. However, there is
no substitute for the personal contact that requires physical travel and meeting with others
face-to-face. Yet, business travelers will increasingly find opportunities to tack on a little
personal rest and relaxation with their business duties.
We predict that the most popular types of conferences in the future will not be
business related but instead will focus on personal lifestyles and interests. Growth in
number of conferences and attendees will most likely come in the form of meetings on
organized religion, self-improvement/education, hobbies, civic topics, alumni reunions,
and politics. This trend began in the 1990s when 20% of U.S. citizens traveled to non-
business conference events.14
Emerging Tourism Markets

What tourist activities will be the favored pastimes in the future? We have already men-
tioned several of the broad tourism trends shaping the face of the industry in previous
chapters. Now we will turn our attention to some specific segments that hold promise
for future growth. As one travel professional noted, “[r]ather than sit on a beach and
sip a mai tai, there is a move among travelers to engage themselves in the people and
places they visit” (p. 4L).15 In a world where many travelers have “been there and done
that,” there is a growing desire to do something special or participate in life-changing
activities. While there is no question that some specialized niche markets such as slum
tourism16 and dark tourism17 have evolved, several larger and growing markets should
be of interest to all tourism service suppliers.
Slow Tourism
Slow tourism vacations will develop as an important niche segment of the tourism indus-
try to meet the need of travelers looking for a very different experience. To escape the
21st-century “accelerated” life, more and more travelers will opt out of high-activity
vacations, instead preferring trips with a slower pace than they experience in everyday
life, allowing time and opportunities for immersion. These vacations will involve all the
five senses and be designed with the goal of experiencing people and places. Research
shows that those involved in slow tourism are seeking revitalization and self enrichment.18
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This trend suggests that health spas, “zones of tranquility,” rural destinations,
food tourism venues, and cultural tourism opportunities in general will see an increase
in popularity. In addition, single-destination, as opposed to multidestination, trips
will be preferred by travelers seeking the immersion of the slow tourism experience.19
A preferred slow tourism vacation might be a two-week cottage stay in a rural Irish
town, walking the green hills and ocean bluffs, soaking in the ambiance of local pubs,
and meeting and mingling with the townspeople. “Home-stay holidays” are popular
in some countries that offer the opportunity for tourists to live with a family for a
period to gain a perspective that is usually not available to casual tourists. Spiritual
or religious tourism has also grown rapidly as part of the experience-driven holidays.
Spiritual retreats have been offered by historic or religious sites to help tourists enrich
their vacation experiences.
Adventure and Extreme Tourism

Adventure travel is defined as a “trip or travel with the specific purpose of activity
participation to explore a new experience, often involving perceived risk or con-
trolled danger associated with personal challenges, in a natural environment or exotic
outdoor setting” (p. 343).20 Like ecotourism, adventure travel focuses on experiencing,
not sightseeing. Adventure travel is often split into hard and soft forms, and partici-
pants are called hard and soft adventure travelers (see Table 14.1).
Hard adventure tourism encompasses activities that involve above-average ele-
ments of physical challenge and risk. Because of the potential danger involved in many
of the hard adventure activities, such as mountain climbing, highly experienced guides
often “choreograph” much of the trip for the tourist group.21
Recently, researchers have tried to describe the breadth of adventure travelers.
Table 14.2 highlights the results of one such attempt that reported the psychodemographic
description of six “types” of adventure travelers. Note that three of the segments are
primarily soft adventure tourists, whom we might call the mainstream of adventure
travel. Many of the hard adventure tourists in the general enthusiast and active soloist
categories are probably GRAMPIES, a term for men “who are growing, retired, and
moneyed, in good physical and emotional health” (p. 208).22
It is estimated that by 2040 over half of the population in the developed world will
be over fifty. This means more people in good health with a more informed global per-
spective—more GRAMPIES—thus more adventure tourists. The lines between adventure
and mainstream tourism will become less clearly defined. Adventure will become more
FYI WALKABOUT TOURS

The preferred guided tour of the future from extreme tourism for serious trek- Walkabout, founded in 2000 by an Ab-
may not be conducted via motorcoach kers to “soft adventure” tourism for original Discovery Ranger, takes guests
but instead via the oldest form of trans- families or mature travelers. Walking into the bush of Dharug country for an
portation: on foot. Recently there has tour packagers also offer a variety of immersion experience. On this daylong
been a boom in the number of tourists accommodations and meal plans: rus- program that involves about four hours
taking walking tours. What is driving tic for the ecotourist segment through of walking, participants are encouraged
this phenomenal growth? One reason luxurious for the walker who wants to to use all of their senses, meditate, and
is that walking is now the most popular be pampered at the end of the trail. slow down. Discussions about culture
form of exercise among adults. Another What better place to find this type bring everything they see, touch, hear,
is that walking tours can run the gamut of tour than Australia? Blue Mountains smell, and taste to life.
Sources: Based on Eastwood, Ken. (2007, October–December). Blue Mountains Walkabout, NSW. Australian Geographic, (88), 79;
Gonzalez, Isabel C. (2004). Taking a head trip. Time, 163(113), 84.
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ourism 393
Table 14.1 Adventure Travel Activities

Examples of Soft Adventure Travel Examples of Hard Adventure Travel
Activities Activities
Camping Rock climbing
Hiking Skydiving
Canoeing Mountain climbing/trekking
Bicycling Rapids rafting/kayaking
Walking Sea kayaking
Snorkeling Ice climbing
Horseback riding Scuba diving
Snow or water skiing Mountain biking
Bird/animal watching Cave exploring
Off-road driving Cliff skiing/snowboarding
Sailing Triathlons
Photo safaris Multisport endurance challenges
Dude ranching
accessible and achievable for more people. Moreover, adventure holidays will become
more attractive as the collection of experiences begins to undermine the more materialistic
elements of consumer society.21
During the next decade, the softer adventure activities will increase in popular-
ity to the point that most mass tourism trips and tours will include at least one of
the activities listed in Table 14.1. Think back on your last vacation. In which of the
listed activities did you participate? As you can see, using this more relaxed definition
of adventure tourism, a family skiing in the mountains of Alberta during a school
vacation week would be classified as adventure tourism. Cruise lines have already
found that mixing laid-back relaxation with more adventurous activities has allowed
them to reach a broader market of potential cruisers.
Table 14.2 Segments of Adventure Tourists

General enthusiasts (about 25%)—Most likely to take experiential/participatory adventure
trips. Mostly male, college educated, with above-average income. Prefer hard challenge
activities.
Budget youngsters (about 20%)—Young, single, with low income. Most likely to take
adventure trips with friends instead of family.
Soft moderates (about 10%)—More likely to be older, well-educated women. Prefer soft adven-
ture activities such as hiking, nature trips, and camping. Most likely to take package trip.
Upper-high naturalists (about 15%)—Middle aged and married with the highest incomes of
any type. Prefer softer forms of adventure travel with emphasis on more distant exotic
locales, such as Africa and Asia. Most likely to travel on long-duration trips and spend a
lot per trip.
Family vacationers (about 15%)—Heads of households from dual-income families who
travel with entire family. Prefer carefree vacations at least partially planned by operators.
Active soloists (about 15%)—Both young to middle-aged men and women who prefer
traveling alone or with members of some organization. The most likely to travel on an
all-inclusive package and pay the greatest amount for trip.
Source: Sung, Heidi H. (2004). Classification of adventure travelers: Behavior, decision making, and target
markets. Journal of Travel Research, 42(4), 343–356.
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Tomorrow’s travelers will look for new extremes. Philip Gatward/Dorling Kindersley, Ltd
Extreme tourism (a subset of adventure tourism) encompasses activities that

involve above-average elements of physical challenge and risk. Growth in extreme
sports and other extreme activities will continue in the future. Although younger,
professional/managerial, single men are most likely to seek extreme thrills, baby
boomers and young women are fast-growing subsegments for this market.
Why are these more dangerous activities gaining in popularity? One reason offered
by industry leaders is that these sports have been spotlighted and glamorized in the
media, including motion pictures. Another reason suggested is that we are so coddled
in our everyday world—from tamper-resistant packaging to self-braking cars—that
people want to feel that physical rush of danger, even if the rush comes more from
the appearance of living on the edge than from actual terror. Growing demand for
extreme activities is also driven by increasing affluence and the increased safety and
better equipment of many of the sports. To some extent, tried-and-true activities and
attractions have become boring because they are so familiar to so many.
Adventure and extreme sports are typically outdoor or wilderness sports and go
hand-in-hand with ecotourism. A sea kayaking trip off the coast of Costa Rica or run-
ning from the north rim of the Grand Canyon to the south rim of the Grand Canyon and
back again in one day qualifies as both ecotourism and adventure tourism. Tourism sup-
pliers, especially tour operators, will create at least two different ecotourism packages.
One ecotourism package will be more educational and observational, whereas the other
will be more physically challenging, including one or more extreme sports.
Medical Tourism
Medical tourism, travel to other countries to receive treatments, is becoming very popular.
Many already travel for cosmetic surgery or dentistry, experimental drug/surgical
treatments, or because treatment is either unavailable or untimely in the country of their
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residency. In addition to people traveling from high-income countries to low-income

countries to seek cheaper medical products, patients from low-income countries travel
to high-income countries in search of better care. The estimated gross medical tourism
revenues of $40 billion worldwide in 2004 will increase to $100 billion by 2012.23 With
a growing number of health travel agencies, it is becoming easier for travelers to schedule
everything from complete physicals to complex surgeries more confidently.24
In Singapore, some hospitals and hotels are partnering to offer packages that com-
bine a hotel stay with a treatment package. Thailand’s Tourism Ministry has aided
the development of packages marketed to rich Arab patients. These packages feature
shopping, sightseeing, and other activities for family members who are traveling with
the loved one who is receiving treatment. The governments of South Korea and Taiwan
are launching campaigns to promote medical tourism services in their countries. In an
interesting twist, Indian nations in Canada are developing private hospitals so fellow
Canadians can circumvent the Canadian ban on private-pay medical services by travel-
ing to tribal lands where such laws do not apply.25
Vocation and Real Estate Tourism

Very specialized niches are being served and should grow as tourism service suppliers
strive to meet ever-changing needs and expectations. Culinary and heritage tourism
definitely fit the concept of travel with a purpose, but new niches are appearing that
do more than fulfilling physiological and psychological needs. For example, vocation
tourism and real estate tourism are being marketed to meet travelers’ needs seeking to
combine pleasure with accomplishment.
Vocation and real estate vacations are catching on as travelers seek personal and
often tangible benefits by combining relaxation and new experiences into practical
leisure-time packages. On a vocation vacation, travelers take time to experience pos-
sible new careers before actually making career changes. You can think of these trips
as being mini-internships. On a real estate vacation, travelers spend their time gaining
in-depth knowledge and perspectives about the area from scheduled meetings with
local experts while searching out potential investment opportunities or a second home.
Space Tourism
Someday in the not-too-distant future, we may be able to fly halfway around the globe
in just minutes thanks to developments in scram jet engine technology that will allow
for hypersonic flights. We have already witnessed the advent of space tourism as civil-
ians have joined the ranks of astronauts on space voyages, but the numbers of space
travelers will surely grow in coming years as hypersonic travel becomes a commercial
reality. Just think, hypersonic travel made possible by scramjet engines will allow pas-
sengers to travel from New York to London in 11 minutes at an incredible speed of
18,000 miles per hour. This is not science fiction, as engineers around the globe are
working on perfecting scramjet technology.
Space travel became a reality when the first space tourist, Dennis Tito, paid for a
seat on a Russian Soyuz rocket and spent a week at the International Space Station in
2001 and this experience was repeated by Mark Shuttleworth the year after. The future
of space tourism became a reality in 2004 when famed aircraft designer Burt Rutan and
his team, with funding from Paul Allen, a Microsoft pioneer, was the first to success-
fully launch a privately developed manned spaceship, SpaceShipOne. They subsequently
won the $10 million Ansari X-Prize granted to the first team to launch two success-
ful manned space launches within two weeks of each other. The team’s invention gave
Richard Branson the confidence to make the significant investment required to commer-
cialize the prototype technology, thus creating the world’s first spaceline, Virgin Galactic.
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The spaceline is taking reservation at a ticket price of $250,000. There are about 500
people who have signed up for a seat on the flight to the space. While Virgin Galactic
continues their testing phase, new competitors have joined the market including XCOR
Space Expeditions, Space Adventures, and SpaceX and there is now a modern day space
race to see which company will be the first to complete a space tourism mission.
Marijuana Tourism
The possession and consumption of marijuana has varying degrees of legality in differ-
ent countries. Some international destinations, such as the Netherlands, 26 are known
as marijuana tourism destinations. Drug tourists are motivated in a number of ways:
the desire to experiment when traveling, marijuana consumption as a recreational
activity, the search for authenticity in a destination, and access to legal marijuana.27
In the United States, Colorado and Washington were the first to legalize recreational
marijuana in 2014 and while other states have been quick to follow, research is being
done to help navigate the challenges of how to manage and regulate a substance that is
still illegal in the majority of states within the country. In Colorado for example, there
are policies in place to manage marijuana consumption by tourists as they are only
allowed to purchase 7 grams in a single transaction while Colorado residents can pur-
chase 28 grams (or one ounce).28 It is still illegal to consume marijuana in public spaces
or take marijuana products across the border into a state where it is illegal.
Many marijuana tourism businesses have seen the emerging market as an oppor-
tunity and have developed new products and services to meet their needs. Marijuana
tour companies such as My 420 Tours,29 which was an early innovator in the Denver
area, offer education and transportation from grow facilities to recreational shops to
420 friendly hotels where they have partnered to provide vaporizers so tourists are
able to consume marijuana in rooms that typically do not allow smoking. The lack
of legal accommodations options has been an obstacle for marijuana tourists though
new business ventures such as “bud and breakfasts” and cannabis camps have recently
been entering the market and meeting their lodging needs.
The Colorado Tourism Office (CTO) had early concerns about whether legal mari-
juana would turn away families that had historically been drawn to the state’s image as
a place for wholesome outdoor recreation. As a destination management organization,
the CTO is publically funded by tax dollars and their position was to avoid the promo-
tion of marijuana tourism in any CTO marketing material. Research was conducted
to understand the complexities of marijuana tourism as a new industry to understand
whether legal marijuana was bringing more people in to the state or turning them away.
The findings of marketing research study by Strategic Marketing and Research Insights
(SMARI) indicated that in 2015, 8% of tourists visited a recreational marijuana shop
during their stay.30 It was concluded that legal marijuana is not the primary reason why
tourists choose to visit Colorado and 65% of visitors in the study said that it would not
affect their decision to visit.30 Colorado and Washington may be experiencing a slight
competitive advantage over destinations that offer similar attractions, but that advantage
is likely to be temporary as more states have voted and will vote to legalize marijuana.
Meeting Future Tourists’ Needs

All of the changes that have been mentioned will lead to two common forms of market
segmentation. Microsegmentation and mass customization have been used for several
years, but these two concepts will gain further use in the future. Subsegments, also
called “microsegments,” are market segments that represent a relatively small group
of consumers such as Californian young professional Asian Americans or Manitoban
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ourism 397
back-country fishing enthusiasts. As companies attempted to lure customers from

competitors, they are developing product offerings to meet the needs of smaller and
smaller market segments.
Mass customization is the extreme of microsegmentation. A company mass custom-
izes when it produces a good or service to fulfill the unique needs of an individual buyer.
An example of how these trends are being manifested in the tourism industry can be found
in hotel developments in locations where real estate has become extremely high priced. In
these settings, companies are dual or co-branding two or more hotel brands under one
roof. It may seem unique to find a Courtyard and a Residence Inn by Marriott under one
roof or a Hampton Inn and Homewood Suites by Hilton under one roof, but how about
an Aloft, a Marriott, and a Hyatt Place under one roof. In addition to real estate cost sav-
ings, there are also operating efficiencies to be gained by sharing laundry, housekeeping,
maintenance, and even amenities such as pools and fitness facilities. As companies strive
to meet individual customer segments and real estate prices continue to increase, expect to
see more co-branding. Tourism businesses in the future will definitely use both microseg-
mentation and mass customization to attract guests and meet their needs.
Mass customization will allow travelers to customize their service packages and
travel itineraries. Hotels specializing in the business and professional segments are build-
ing rooms that can be configured to suit individual guests’ needs for multimedia pre-
sentations, conference calling, telecommunications links, and so on. Tour companies
will use mass customization to allow more flexibility in touring. As the tourism mar-
ket becomes more competitive, the empathy component of service quality you learned
about in Chapter 3 will become more and more important. Both microsegmentation
and mass customization can add the personal touch of empathy to a tourism service.
“As travel costs increase and as costs, restrictions, social pressures associated with green-
house gas emissions and climate change continue to evolve, it seems likely that middle
and down-market mass tourism will decrease or become more localized” (p. 66).31
One segment of the tourism industry, cruise lines, could face two unique and
completely unrelated customer service challenges in the future. The first area of
customer concern deals with a perception by some cruisers, especially first time
cruisers, that they are being “nickled and dimed” while they are onboard. With
additional charges for mandatory gratuities, both soft and alcoholic beverages,
photographs, upcharges for specialty restaurants, specialty coffees, and convenience
food choices, the marketing promise of an “all inclusive price” may start to be
questioned. This “sticker shock” realization on the day of disembarkation is
especially true for many first time cruisers. The second, and unrelated concern, also
occurs on the day of disembarkation. As larger and larger ships are being put into
service current procedures and port terminal facilities are not adequate to efficiently
move cruisers off the ship and through the terminal. Technological improvements
FYI MASS CUSTOMIZATION = PERSONALIZATION

The Ritz-Carlton luxury hotel chain hypoallergenic pillow, for her next more peanut butter cookies during
is taking the concept of mass stay, housekeeping will make up her subsequent stays. A guest checking
c u s t o m i z a t i o n s e r i o u s l y. G u e s t bed with that type of pillow without into the Orlando Ritz-Carlton receives
preferences are entered into the hotel waiting for a request. And if a guest an empty glass to be filled with his or
database so that service during return eats only the complimentary peanut her favorite citrus juice courtesy of a
visits can be more personalized. butter cookies (for going the chocolate Citrus Concierge. Talk about making a
For example, if a guest requests a chip and sugar cookies), he will receive guest feel at home!
Sources: Based on Brown, Tom. (1996). Efficiently serving customers uniquely. American Management Association, 85, 60–61; Braley,
Sarah J. F. (2002). The new concierge. Meetings and Conventions, 37(11), 14.
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such as the use of RFID for passenger identification could easily speed up the
disembarkation process, but then a bottleneck would quickly occur in the terminal
facilities. To alleviate this problem, significant investments will need to be made in
these facilities similar to those that had to be made as the airlines put larger and
larger aircraft into service.
Transportation Transformations
Significant changes will be noticed in all forms of transportation. Speed and efficiency
will increase thanks to advances in technologies and materials. Every form of transpor-
tation from automobiles to ferries will see change. For example, ferry transportation,
which has been an old standby, should become more prevalent and popular in the
face of increasing demands for energy efficiency. New high-speed ferries cut down on
travel time by taking shorter across-the-water routes than land-based alternatives or
over shorter routes that would be prohibitively expensive for air service. For example,
introduced in 2004, the Lake Express ferries cross Lake Michigan from Milwaukee to
Muskegon in just two and one-half hours.
Expanded rail service will also provide additional relief to crowded transportation
corridors. Proliferation of high-speed rail service will be the hallmark of this trans-
portation mode for years to come. Although speeds of 100 miles per hour are com-
monplace, plans are already being tested to produce trains that travel at much higher
speeds. Magnetic levitation (Maglev) trains, especially on shorter high-traffic routes,
will replace traditional track-based trains. Maglev trains generate their own energy
from the friction created over their magnetic lines and will travel at speeds in excess of
300 miles per hour. As the convenience and comfort of magnetic levitation technology
spreads from its experimental status to the norm for high-speed rail travel, more and
more passengers will be drawn from the airports to the ground.
To get an idea of how efficient train travel could be, think about the following
proposal. Brad Swartzwelter, a conductor for Amtrak, has suggested that the solution
to transportation problems within the United States could be solved by underground
trains. He proposes that tunnels be dug, connecting points A and B, and a magnetic
levitation system be installed to carry travelers between these points at speeds up to
900 miles per hour. Future technological advances could lead to a transcontinental trip
that could be completed in approximately three hours.32
In the meantime, in the United States and throughout the world, you can expect
that more high-speed trains will be put into service as demand continues to be fueled
by the efficiencies of point-to-point service in high-demand corridors prompted by fuel
costs, security delays, and continuing customer-service problems at crowded airports.
Noticeable increases in this type of service in China and India have been seen as the
appetite for travel explodes.
Connector trains will become the norm for mass transit in densely populated cor-
ridors and as connectors for newly built airports. As you will see next, there will be a
boom in new airport construction. In these new facilities, ticket counters, parking, and
baggage checking will be located at substantial distances from the airports, which will
be built far outside of urban areas to alleviate noise, road traffic, and airspace con-
gestion. These new airports will become destinations in themselves, featuring a wide
variety of entertainment options for locals and travelers alike.33
The future of air travel presents a picture that at first seems to be incongruous. As
airline fleets are upgraded, these new planes will be larger or smaller, faster or slower,
and be designed to fly more direct routes. First, you will see more of the double-decker
superjumbo jets, the 555-seat A380, serving long-haul trans-Pacific and trans-Atlantic
routes. These extremely large aircrafts can serve routes only between airports that have
made infrastructure investments to handle the weight of the planes on the runways, and
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ourism 399
the large number of passengers during arrivals and departures. At the same time you will
also be seeing smaller planes, like the regional jets, as airlines are finding that it is more
profitable to serve many markets through direct routes that can produce passenger traf-
fic to fill planes with fewer than 100 seats. In an effort to conserve fuel, more and larger
turboprop aircraft, with lower operating costs, will be placed into service, replacing jets.
Because of new technology, air traffic control centers may become a thing of the
past. Pilots in the future will determine their own routes, aided by computers calculat-
ing their planes’ and other air traffic positions each second. As a matter of fact, planes
may fly without pilots. Most commercial aircraft already fly “pilotless” from just after
takeoff to just prior to landing. Another new concept, tilt-rotor planes, may make it
possible for aircraft to take off and land with little to no runway.
Increases in size and speed of aircraft will be absolutely necessary to satisfy future
demand for air travel. While worldwide, 2.4 billion passengers were carried in 2010;
this number is projected to grow to 16 billion by 2050!34 The demands on aircraft and
the supporting infrastructure will be enormous.
As for airline services, polarization in service offerings also appears to be the norm
for the future. On one hand, the service in business and first class will continue to become
more upscale and elaborate. Some long-haul first class suites now are configured like
a hotel room, with a comfortable double bed and a seating area. Passengers can enjoy
comfort and privacy while traveling. Most large airlines also offer menus designed by
well-known chefs and wines selected by sommeliers. On the other hand, low-cost carriers
will continue to expand rapidly, especially in developing countries where domestic and
regional travel have grown and will continue to grow exponentially. When safety per-
mits, on some short-haul flights, the least expensive “seats” will not be seats at all, as pas-
sengers will simply stand the same way they do on crowded subways during rush hours.
Finally, even with all of the improvements being made in other forms of transpor-
tation, automobiles will still be the most popular means of getting from one place to
another, but they will definitely be more efficient. The future of automobile travel is
already with us; all electric vehicles, hydrogen fueled cars, hybrid vehicles, and driver-
less cars will continue to shape the futures of our roadways. As technologies take over
human decisions for driving and routing, roadways will also become safer.
Moving into an Era of Competitive Cooperation

and Consolidation
The tourism industry has historically been fragmented, with many different suppliers
serving an ever-growing market. This fragmentation has resulted in varying levels of
service, quality, availability, and pricing. At the same time, the traveling public has
gained greater access to information and become more knowledgeable and demanding
about tourism services, forcing managers to search for new ways to control costs and
improve quality. As organizations respond to the converging demands of improving
quality and controlling costs, we will witness an era marked by an increasing number
of mergers, acquisitions, alliances, and cooperative agreements.
Just as the airlines led the way with innovations in reservation systems and reve-
nue management, they are also leading the way through consolidations and mergers
designed to gain market share and improve profitability. Smaller, less-efficient carriers
were overtaken by larger, more efficient, and better-capitalized companies that could
respond to changing consumer demands. The same type of trend is emerging across
the tourism industry as other suppliers continue to consolidate. Several travel agencies,
ground service operators, hotels, casino operators, cruise lines, and car rental compa-
nies are merging or have been acquired by larger rivals; as well. Similar combinations
will continue and become more common as organizations seek economies of scale and
broader name recognition across national and international markets.
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Another trend that will move through the tourism industry is cooperative alliances,
another concept that was pioneered by airlines to gain greater brand recognition and oper-
ating synergies. For example, the alliance between British Airways and American Airlines
signaled the importance of gaining dominance in high-traffic corridors such as those serving
the North Atlantic marketplace. However, the benchmark for airline alliances is the Star
Alliance. This alliance, which was created in 1997 by six airlines with the intent of being the
airline of the Earth, has since grown into a global giant, as can be seen in Table 14.3.
Airline alliances meet customer needs by delivering “‘seamless service’—
simplified ticketing, better connections, thorough baggage checking, and frequent
flyer reciprocity” (p. 73).35 They also provide another important economic benefit
by allowing airlines to gain access to landing slots and gates at already crowded
international airports. More changes are on the horizon as the number of major
participants in the airline industry continues to shrink and the remaining organizations
increase their levels of cooperation.
Table 14.3 The Star Alliance

Member Airlines Major Hub Airports
Adria Airways Ljubljana
Aegean Airlines Athens, Thessaloniki, Heraklion, Rhodes and Larna
Air Canada Toronto, Montreal, Vancouver
Air China Beijing, Chengdu
Air India Delhi, Kolkata, Mumbai
Air New Zealand Auckland, Los Angeles, Sydney
ANA Tokyo, Osaka, Nagoya
Asiana Airlines Seoul
Austrian Airlines Group Vienna, Salzburg, Innsbruck
Avianca TACA Bogota, Lima, San Salvador, San Jose
Brussels Airlines Brussels
COPA Airlines Bogota, Panama City
Croatia Airlines Zagreb
EGYPTAIR Cairo
Ethiopian Airlines Addis Ababa
EVA Air Taipei
LOT Polish Airlines Warsaw
Lufthansa Aviation Group Frankfurt, Munich, Dusseldorf
Scandinavian Airlines Copenhagen, Oslo, Stockholm
Shenzhen Airlines Shenzhen
Singapore Airlines Singapore
South African Airways Johannesburg
Swiss International Air Lines Zurich
TAP Portugal Lisbon
Thai Airways International Bangkok, Chiang Mai, Phuket, Hat Yai
Turkish Airlines Istanbul, Ankara
United Airlines Chicago, Cleveland, Denver, Houston, Los
Angeles, Newark, San Francisco, Washington, DC,
and Guam. International: Narita
U.S. Airways Charlotte, Pittsburgh, Philadelphia, Phoenix, Las
Vegas, Washington, DC
Source: http://www.staralliance.com/en/ and each member airline webpage.
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ourism 401
There is no doubt that the airline industry will also continue to cooperate as well as
consolidate with more mergers between rival carriers both inside domestic boundaries
and across country boundaries. The trend that began in the United States has already
spread to Europe and Asia and will only pick up steam in the future. The “Open Skies”
treaty between Europe and the United States set in motion the consolidation wave
among previously competing airlines. With this treaty, consolidation between airlines
no longer means losing lucrative international markets. The combined companies can
keep their trans-Atlantic routes and they can fly out of any European city to the United
States, not just from airports located in their home country. With these artificial barri-
ers to competition being lifted, the urge to merge will definitely grow.
As we discussed in Chapter 8, the move toward industry partnerships is also
accelerating in the foodservice segment of the tourism industry. Every link in the sup-
ply chain, from manufacturers and distributors to operators and customers, is being
brought closer together to improve service and reduce operating costs. These efforts
have been dubbed efficient foodservice response, or EFR. The partnership agreements
that are evolving through EFR are providing lower food costs, fewer inventory errors,
and higher levels of customer satisfaction and value.36 Foodservice operators, espe-
cially franchise operators, will take advantage of the social networking capabilities
facilitated by Web 2.0 through enterprise-level networking to share information tar-
geted at improving purchasing and operating efficiencies.
There will also be an increase in subcontracting many functions needed to support
guest services. Operations such as cleaning, laundry, and food service will be performed by
outside contractors who can focus their attention on being extremely efficient in providing
one type of service. In some situations, the operating company will own the facilities and
equipment and rely on the expertise of outside contractors to provide and manage labor. In
other situations, space will be leased to subcontractors, who in turn will make the invest-
ments in equipment as well as manage the entire operation. This trend is already becoming
evident in the number of fast-food franchised outlets that are appearing in hotels, airports,
theme parks, casinos, service stations, food courts in malls, and even cruise ships.
Destinations, while competing with each other, have also sensed the need to cooper-
ate with nearby destinations to draw tourists to the region. Developing tourism without
considering its impact on neighbors will increase substitution, leading to cut-throat com-
petition and endangering the healthy tourism development in the region. The concept
of “coopetition”—simultaneous competition and cooperation among rivals—originally
coined in the 1980s by Raymond Noorda, founder of Novell, is an important philosophy
or strategy that goes beyond the conventional rules of competition and cooperation to
achieve the advantages of both.37 Regional cooperation in tourism development, promo-
tion, and planning could be a win-win situation for all parties involved with a long-term
focus. The Eurail train pass is a long-standing example of how this type of coopera-
tion can succeed. The Association of Southeast Asian Nations (ASEAN) can serve as
another example of successful regional tourism cooperation. The ASEAN national tour-
ism organizations (NTOs) have regularly carried out a number of campaigns to promote
the region as a single destination. For example, as part of the ongoing Visit ASEAN
Campaign, the NTOs have actively promoted the Visit ASEAN Pass and its correspond-
ing web portal (www.visitASEAN.travel). The ASEAN NTOs have also facilitated travel
within and into the region via air travel promotion and enhancement of cruise tourism.
Service Enhancements
One thing is for sure, future service enhancements will revolve around technological
advances, and the rate of change in these advancements will continue to increase. To
get some idea of future technological changes, think back to the computers you used
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at home, work, or school just five years ago. How fast could they operate? What
software did they run? How were they linked to information sources around the
world? What you thought was fast and efficient back then is slow and cumbersome
by today’s standards; and computing technology is just one facet of the technological
changes that will shape the future of the tourism industry. Maybe the changes in
service delivery won’t come quite this fast, but change will definitely come. As
we saw in Chapter 5, operators pursue increasing efficiency and effectiveness in
everything they do from service delivery to customer connectivity. Although every
effort will be made to enhance the guest experience, the human touch will remain
the hallmark of hospitality.
Amplifying Guests’ Experiences

A glimpse of what may be in store for hotel guests in the future can be seen at
the Fairmont Vancouver Airport hotel, where it is no longer necessary for guests to
check in at the hotel’s front desk. Check-in takes place in the airline baggage claim
area, and the hotel arranges for bags to be delivered straight to the guest’s room.
Guests are greeted with a comfortable and cheery room as check-in also activates
room lighting and temperature controls that stay in an energy conservation mode
until a room is occupied. In-room motion detectors make “Do Not Disturb” signs a
thing of the past, because the housekeeping staff can now time their cleaning activ-
ities for maximum customer convenience and satisfaction when guests are out of
their rooms.38 And, there are even more changes on the horizon. According to Tad
Smith, Senior Vice President, e-Commerce, for Starwood Hotels & Resorts World-
wide, Inc.,
In [the future], your credit card will also have your frequent guest information
imbedded in a computer chip. When you walk through the door of our hotels,
you’ll be automatically checked in, and your credit card will become your key. You
won’t have to stand in any lines at all. You’re going to have an entirely personal
experience in your hotel. Your computer screen will already be configured to your
homepage with your e-mail waiting for you (p. 64).39
Hotel guests now can even check in and select their own room using apps on their
smartphone and then use their phone as a room key and payment device. Hotels have also
begun to employ robots to run errands for guests, such as delivering laundry and sundries.
Travelers seeking new adventures will have the opportunity to participate in a real
Jules Verne experience as they enjoy an underwater odyssey. Jules’ Undersea Lodge
in Key Largo, Florida, currently provides the only underwater accommodations for
undersea adventures. However, if architects and developers have their way, larger nau-
tical hotels could be built at offshore sites in Hawaii, Mexico, and Sicily.40
The importance of the personal touch can be seen in other areas of the tourism
industry. For example, travelers are rediscovering the benefits to be gained from the
professional knowledge of experienced travel agents. However, now, rather than vis-
iting brick-and-mortar locations, they are accessing these agents through the Internet
or phone and the agents are working from home. Consumer satisfaction has lead to
growth in this segment of the industry and as the need for personalized service grows,
so will the number of agents.
Research shows that as more technology is introduced into the service encoun-
ter, customers can become dissatisfied if they are placed in a position where they
need to deal with technology and service staff at the same time. To solve this prob-
lem, it was suggested that service technology interfaces might be designed so that
they can be either integrated seamlessly into customer-employee exchanges or that
customers should be given both space and time to deal with the technology side of
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ourism 403
the transaction before engaging in social aspects of the transaction with the ser-
vice provider.41
Safety and Security Strides

Realistically, the threat of terrorism will continue, so travelers will have no choice
other than to accept a decrease in their privacy in exchange for greater security. Secu-
rity will pervade but hopefully in the future will almost go unnoticed as technologies
improve in all aspects of the tourism industry from attractions and sporting events to
accommodations and transportation. Surveillance will also become common for all
future events and many tourism attractions/congregating sites. In some locales, the
future has arrived. “The average visitor to London . . . is now captured on video 300
times in a single day” (p. 16).18
Biometrics will become the common form of identification. Most countries will
move to globally standardized electronic national identification cards in place of pass-
ports. These ID cards may also include driver’s license information along with finger-
print and/or retinal scan data. In addition, by choice, to achieve better connectedness
and better service, travelers will carry more and more personal information from loyalty
accounts to personal travel preferences on their smart phones. As security has tightened,
airlines have restricted size and weight of baggage to conserve fuel and space. Although,
front line airline service personnel have looked the other way as more and more luggage
is carried on, this practice will have to cease for both security and operational efficiency
reasons. In response, specialty freight companies will enjoy substantial increases in reve-
nue as more and more travelers elect to ship their luggage and adventure “toys.”
Owing to the dominance and immediacy of global media, crisis events will have
even greater impact on tourism revenues. In response to hyped 24-hour coverage of
natural disasters and terrorism attacks, organizations, especially NTOs and their
lower-level counterparts, will develop restoration and recovery programs with special-
ists who communicate through the broadcast and print media and use the power of the
Internet to inform travelers about the condition of tourism resources and steps being
taken to ensure the safety and security of visitors.42
To guard against lost or stolen cash or traveler’s checks (for the minority of popu-
lation still using them), we will move to a truly cashless society. In all venues, making
purchases will be easier. Everything from your credit/debit card to your smart phone
will be used to make purchases. Making purchases easier for customers means more
revenues for service providers through lower transaction fees.
TOURISM IN ACTION
BIOMETRICS
Fingerprint scans are only the tip of the iceberg when it comes to enhanced security and service. Both employees
and guests will find biometrics incorporated into the workplace and the guest experience. For safety and security
concerns, even in the face of privacy concerns, operators are turning to biometrics: fingerprint scans, handprint
scans, facial scans, and iris scans. With these new technologies, there is no more need for time clocks, keys, or entry
cards. With the scan of facial features, the blink of an eye, the press of a finger, or the wave of a hand, entrance is
approved and a time record is established. Once an individual’s personal profile (face, eye, finger, or hand) has been
entered into a computer system, entry, checking in or checking out, and security are easily managed. Many countries
have installed e-channels for their citizens and nonresident frequent visitors who can pass through immigration check
points with the scan of travel documents and finger prints. This has speeded up the entry and exit time for travelers.
Sources: Based on Kirby, Adam. (2008, January). Buying into biometrics. Hotels, pp. 49–50; and Yu, Roger. (2008, February 5).
Some guests can open doors in a blink. USA Today, p. 4B.
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Keeping the Human Touch

There is no doubt that the business of hospitality and travel is adopting technology
at an advanced speed, and organizations as well as travelers are embracing the move-
ment. The personal touch still provides the basis for the reassurance and experience
travelers seek, but technology is revolutionizing the way service providers are stay-
ing attentive and engaged with their guests. While customer relationship management
holds great promise for delivering customized services more efficiently and effectively,
“ . . . the old-fashion style of customer relations may be the appropriate strategy for
many travel and tourism ventures.”43
To help reduce labor costs, many tourism-related businesses are automating services
that until recently were provided by people. More and more businesses within the industry
are making greater use of computer terminals and interactive screens to allow travelers
to “do it yourself.” Although this step depersonalizes service, a growing number of trav-
elers prefer speed and efficiency to the more personal interaction with hospitality service
employees. Tourism operators, just like other service providers, will find a balance between
the power of technology and human interaction. Customers enjoy the freedom of technol-
ogy but want to know that when needed there is someone available to serve their needs.
With the shrinking number of available workers owing to the aging populations
of industrialized nations and competition for workers who have the skills needed to
learn and complete more complex tasks, tourism suppliers will offer better pay and
benefits to employees. Greater efficiency through the use of technology and employees
who can utilize it will partially compensate for these higher human resource costs.
Automation and robots will replace human workers in many back-of-the-house opera-
tions and some front-line positions. Employees will be seen as the most important asset
for delivering high-quality, highly personalized customer service, so service training
and employee empowerment will become the norm industry wide.44
The Green Frontier

The coming decades will see the rise of mandatory recycling, water and energy con-
servation, and use of environmentally friendly building products and supplies. The
industry will rise to this challenge by focusing on energy efficiency coupled with new
energy technologies such as solar, wind, and geothermal energy. New Zealand serves
as a good example of what is to come, as sizable quantities of thermal energy from hot
springs are already used throughout the major tourism city of Rotorua. The lodging
industry will increasingly build or convert to “smart rooms” that sense and adjust cli-
mate conditions and can be cleaned at least in part with robot technology.
FYI MODULAR HOTELS

They go by many different names— downtown locations, these small 75- to areas, are finding that pods “fit the bill.”
capsule hotels, modular hotels, and 100-square-foot rooms don’t waste any Thanks to their sleek design and small
pod hotels—but they all have one thing space. Most modular units include the footprints, these new hotels are open-
in common: very efficient use of space basics: private bathrooms, beds that ing up a new subeconomy category of
in a small footprint. The concept of are designed for two, flat screen televi- lodging properties. In some locations,
modular hotels was pioneered by the sions with integrated technologies, and for example airport terminals, they can
Japanese, but the idea is sweeping some even have a small work space. even be rented for stays as short as
across the world. Priced well below Weary travelers looking for nothing four hours.
most competitors in high-cost real more than a place to sleep, especially
estate markets such as airports and in airports and high-cost metropolitan
Sources: Based on Hornyak, T. Capsule hotels go high style. New York Times. 11/20/2011, Vol. 161 Issue 55595, p. 11; and Karmin, C.
Hotels think small. Wall Street Journal (Online). 11/12/2014, p. 1.
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ourism 405
Shower time: bringing conservation ideas to life. Photo by Cathy Hsu
According to one survey, business travelers expect lodging facilities to be environ-

mentally conscious in their daily practices. The results of the survey indicate that these
travelers expect them to:
• Recycle (77%),
• Use energy-efficient lighting (74%),
• Have energy-efficient windows (59%),
• Place cards in rooms to let guests request that sheets/towels not be changed (52%),
and
• Use environmentally safe cleaning products (49%).45
Many of these practices are already in place in the restaurant industry, as the
National Restaurant Association reports that more than seven out of ten operators
purchased products made from recycled materials, and roughly three out of four oper-
ate recycling programs.46
However, the road to becoming green will not be easy, as we saw in the previous
chapter. Even though customers are demanding more environmentally sound practices,
achieving this goal will be difficult. There are numerous products that claim to be
“green,” but there are no accepted standards or reliable guidelines for use in any
segment of the industry. 47 When such universal guidelines are accepted across
international boundaries, environmentally safe practices will become the norm.
Tourism Research
If we just had more data, decisions would be easier. This is a common refrain heard from
decision makers in every organization. But, what is involved in gathering these data? The
answer is research. Research is a simple idea. It is the systematic investigation of a topic,
often including the collection of information for a set goal. The term research is used
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to describe both a process and the product of that process. Research means to design,
gather, analyze, and report information; and it also means the output of that process.
Objectivity in the research process is necessary to ensure (it is hoped) that conclu-
sions derived are based on fact rather than hearsay, opinion, or emotion. The bits of
information collected during the research process are called data, a plural Greek word.
So, when using the word data, always use it with a plural verb form. For example, you
would say, “The data reveal a tendency, not the data reveals a tendency.”
The term research thus encompasses a mind-boggling array of data and methods
that can be used in decision making. Differing information needs require differing
methods of data collection and analysis. Some data are routinely collected and readily
available, such as sales and cost information or census information collected by gov-
ernments. This routinely and readily available information is called secondary data.
However, most needs for information are very specific and data need to be gathered
for a unique purpose. This type of data is called primary data.
Some research is called applied and other research is called basic. Applied research
is used as input for making specific decisions. Basic research is conducted to expand
knowledge on some subject, not to use the information directly for problem solving.
Much of the applied tourism research done is what we call proprietary research, mean-
ing an organization funds the research and holds onto the information, not sharing it.
Most of the basic research conducted in the field of tourism is published and therefore
shared and is termed public research. With this background in mind, let’s take a look
at the what, who, when, where, and how of research.
Types of Tourism Research

Research comes in four forms: descriptive research, experimental research, predictive
research, and simulative research or modeling. We next describe each type of these briefly.
DESCRIPTIVE RESEARCH. This involves the collection of information to describe

aspects of the tourism industry or phenomenon. Such aspects include the size and positive
and negative impacts of tourism, the number of tourists at different locations and during
differing seasons, the characteristics and behaviors of tourists, the number of jobs within
each sector of the industry, the amount of taxes directly paid by tourists and industry
members, inventories of the tourism industry in terms of number of sector members, and
list of attractions and recreational resources; the possibilities for descriptive research are
endless. Data collected by individual tourism enterprises are a form of descriptive research:
for example, number of rooms rented, length of stay, table turnover rate, and so on.
FYI THE HONG KONG DEMAND FORECASTING SYSTEM

To u r i s m i nve s t m e n t , e s p e c i a l l y important part of project planning and ation facility providers can also be
investment in destination infrastruc- appraisal. The automated demand generated on a sector-by-sector basis.
tures, such as airports, highways, forecasting system developed by The system is automated. Busi-
and rail-links, requires long-term a team of tourism researchers at nesses that subscribe to the system may
financial commitments and the sunk The Hong Kong Polytechnic Univer- conduct their own scenario analysis on
costs can be very high if the invest- sity provides forecast of future tour- demand forecasts for their products and
ment projects fail to fulfill their design ist arrivals to Hong Kong as well as services. They can generate forecasts
capacities. Therefore, the prediction their expenditures at the destination. based on tourists’ country of origin, for
of long-term demand for tourism- Demands on airlines, tour operators, different frequencies (e.g., monthly, quar-
related infrastructure often forms an hotels, cruise ship lines, and recre- terly, annually), and over different periods.
Source: From Hong Kong Tourism Demand Forecasting System, published by Hong Kong Tourism Board, http://www.tourismforecasting
.net/hktdfs/.
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ourism 407
Table 14.4 Sequential steps in the Research Process

Step 1—Establish the need for research
Step 2—Define the problem
Step 3—Establish research objectives
Step 4—Determine research design
Step 5—Identify information types and sources
Step 6—Determine methods of accessing/acquiring data
Step 7—Design data collection forms
Step 8—Determine sample plan and size
Step 9—Collect data
Step 10—Analyze data
Step 11—Prepare and present the final research report
Source: Adapted from Burns, Alvin C., and Bush, Ronald F. (2003). Marketing Research, Online Research
Applications. Upper Saddle River, NJ: Prentice Hall, p. 28.
EXPERIMENTAL RESEARCH. When you hear the term experiment, you probably
think of laboratory science experiments, but tourism organizations can and do con-
duct experiments to learn about the effect of one variable on one or more other vari-
ables. How will a price change affect demand for rooms or airline seats? Will running
an ad in one magazine result in more inquiries to the visitor center than the same ad
in a different magazine? Will a particular sales technique results in higher revenue? We
will discuss experimental research a bit more later.
PREDICTIVE RESEARCH. Because in many tourism businesses demand varies

greatly, predicting or forecasting demand is critical, especially to smooth operations.
Most operational decisions are based on the demand expected for any time period.
Staffing, purchases, and cash flow needs are all dependent on service demand. There-
fore, predictive research is necessary to ensure cost-effective, quality operations
whether we are thinking of a restaurant, a hotel, a museum, or an amusement park.
Tourism managers and researchers try to predict the future by looking at patterns of
the past and making best guesses about the future.
SIMULATIVE RESEARCH/MODELING. To help in making longer-term decisions

about the future, some tourism organizations try to model or simulate it. By making
certain assumptions based on data descriptive of the past or based on likely scenar-
ios, estimates about the likelihood of various occurrences in the future can be made.
Managers can simulate what will happen under different circumstances, particularly
with the aid of computer technology. Using spreadsheets and other computer-assisted,
awe-inspiring number-crunching powers, decision makers can generate specific levels
of demand and other information that they then use to aid them in making longer-term
decisions. For example, simulation would help determine the wisdom of investment
and development of land tracts contiguous to a ski resort, addition of another tower to
a hotel property, or relocation of the regional airport.
Who Conducts Tourism Research?

Research can be conducted by three different types of researchers. Much of the day-to-
day information gathering and analysis activities that occur are conducted by employ-
ees of tourism suppliers, and government or public/private entities. We call this in-house
research. However, some research requires special high-level skills that often are not avail-
able within most tourism organizations. In these cases, tourism suppliers, governments,
M14_COOK1670_06_GE_C14.indd 407 16/05/17 3:24 PM

and other entities will hire research consultants or research firms to conduct the research
for them. These specialists utilize a formal research process to focus their efforts and help
ensure that the information and reports they provide clients will be objective, accurate,
and unbiased. See Table 14.4 for the flowchart of the research process.
Basic research, with the goal of furthering knowledge about the entire phenomenon
of tourism, is most often conducted by academic researchers and is sometimes funded
by tourism companies or trade associations. Your professor and other faculty at your
school likely conduct research of this type, using the 11-step process listed in Table 14.4.
Results of this basic hospitality and tourism research are published in research journals
and therefore made available to all who are interested in reading them.
Who Needs and Uses Tourism Research?

Public policy makers, those who make decisions in governmental bodies or in public/
private organizations, use tourism research because they are entrusted with making
informed decisions about spending tax monies. Tourism research provides them with
important information so they can decide (1) how much to invest in infrastructure to
encourage/support tourism development; (2) how much money to spend on marketing
to attract tourists to the community, region, or nation; (3) whether to make public/
private investments to generate more tourism, such as investments in stadiums, conven-
tion centers, and/or events (fairs, festivals, tournaments, hallmark events); and (4) the
size of positive and negative impacts to the area’s economy, natural environment, and
culture. One of the most important techniques in this area is called economic impact
analysis (EIA). EIA methods are used to compare alternative investments and to deter-
mine which is likely to yield the most benefit to the community, region, or nation.
Governments also use tourism research in their role as owners/managers of many
tourism resources, especially attractions (e.g., national parks, historic sites). Govern-
ment employees responsible for the stewardship of these precious resources face many
of the same challenges of private-sector tourism managers, discussed next.
Tourism supplier firms, whether commercial or nonprofit, use research infor-
mation for a variety of strategic/planning, tactical, and operational decision-making
needs. Examples of these needs are (1) demand forecasting (determining the level
of demand for any period of time, whether the hour, shift, day, week, season, or
year); (2) marketing decisions (promotion, price, product, and place tactical deci-
sions) used to create and smooth demand throughout the year; (3) management/
operational decisions to ensure cost-effective yet consumer-satisfying performance;
and (4) financial decisions concerning the use and source of funds.
When, Where, and How Is Tourism

Research Conducted?
Actually, some forms of tourism research are conducted continually. Countries throughout
the world collect economic information year after year to track the levels of and changes
in tourism activities. To a limited extent some states/provinces and cities do likewise.
Many companies or industry trade organizations, such as the Air Transport Association,
routinely collect information on their business or industry and then disseminate this
information to decision makers within the company or to their organization members.
The how of tourism research is represented in Table 14.4, but we should go into
a little more detail. On rare occasions, tourism researchers conduct experiments in
which one variable is manipulated and the results of one or more other variables are
then measured. This form of research is necessary to determine causation of effects.
Because of all the variables that interplay in any tourism-related action, experiments
are very difficult to conduct and are therefore used less often by tourism researchers.
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ourism 409
Data collection is sometimes conducted through observation. Human or electronic

counters that record the number of visitors to an entry point produce tourist counts.
With the aid of satellite tracking devices, tourist movement within a city or attraction
can be observed. Most commonly, however, tourism data are collected from tourists
directly. Sometimes this information is collected prior to the tourists’ visiting an area,
sometimes during the trip, and often after the trip is complete. This direct consumer
surveying can be conducted in the consumer’s home, but in the tourism industry it
is frequently conducted at visitor welcome centers, tourist attractions, or at border
entry/departure locations such as border crossing points and international airports.
By using interviewers in person or over the phone or by using paper-and-pencil/
mobile device surveys or online surveys, answers from tourists are acquired to a wide
variety of questions of interest to tourism researchers and decision makers. The Inter-
net is playing an increasingly greater role in the collection of information because the
majority of potential travelers regularly use the Internet today. Surveys can be quickly
and cost effectively developed and distributed over the Web. They can be fun and easy
to respond to, and very importantly, answers are immediately translated into bits of
data that can be statistically analyzed at any minute in time.
Tourism Research Is Hard to Do

Now that you know more about tourism research, you may realize that the nature of the
industry makes tourism research especially challenging to do and to coordinate. Its large
number of organizations, both big and small, and its many sectors make a snapshot of the
tourism world hard to come by, let alone a full-blown analysis of its many facets. Data
collection from so many organizations is a practical impossibility. Few consistent reporting
requirements, except for quasi-regulated sectors, such as airlines, exist to make the task
easier. Consumer research in tourism is difficult because consumers experience a set of ser-
vices away from their homes, and frequently on a short-term basis (as opposed to long-term
hometown-based service relationships such as those between consumer and bank or con-
sumer and dentist). The breadth of issues to be researched is also mind-boggling because
tourism by its nature strongly affects an area economically, culturally, and environmentally.
Because of tourism’s wide reach (and frankly its intrinsic excitement), research-
ers from a wide range of disciplines focus their eyes and efforts on its study. Tourism
is studied by academics and others in the fields of marketing and business, sociology
and psychology, history and anthropology, geography and political science, planning
and design, and even futurism. Even experts from the hard sciences are studying
tourism because of its effects on nature and the Earth.
Conclusion
It seems that the more things change, the more they stay in our rapidly changing world. We hope you decide to
the same. We may not follow the practice of sticking a fresh become a part of this excitement. You can build a bright
pineapple on the front fence, as the old New England ship professional future by dedicating yourself to lifelong learn-
captains did as a symbol of hospitality, but the welcoming ing and a never-ending desire to improve your knowledge,
touch provided by service employees will remain a key fac- skills, and abilities continually. If you would like to become
tor to service success in this growing industry in which the a part of the growing cadre of tourism professionals, start
number of jobs created by tourism organizations is projected planning your job search now! For more information on
to continue increasing in record numbers for years to come. how to enter and succeed in your desired career field, see
You have made a great start in developing a sound Cook and Cook. 48 We hope that you have enjoyed the
foundation for becoming a professional member of the journey through our exploration of the tourism industry,
tourism industry or an informed consumer of tourism and we hope to see you as industry professionals in our
services. There will always be new things to do and learn future travels.
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You Decide
Microsegmentation, grouping consumers into smaller To appeal to these lower-income segments, some tourism
market segments than those more commonly used in the suppliers are offering special financing services.
past, has been employed by more and more companies as The Princess Cruise Line is now offering its own
markets have become saturated. Many companies have “Love Boat Loan Cruise Financing” plan. Its slogan
found sales growth difficult to come by: To gain increased for the plan is “Bringing Your Dream Vacation within
sales, consumers must be won away from competitors. Reach.” Prospective passengers unable to afford a cruise
The best way to win a customer is to satisfy the customer’s owing to a lack of savings are encouraged to “spread the
unique needs better than a competitor does. cost over two, three, or four years, into very manageable
By grouping customers into more specific groups, monthly payments.” Clients can even include onboard
firms can better fulfill customer needs. As the tourism spending for drinks, shore excursions, and shopping as
industry becomes more competitive, tourism suppliers have part of the loan. Interested customers simply call an 800
begun focusing on the needs of less traditional segments of number to apply: “There is absolutely no paperwork to
potential travelers. For example, instead of targeting the fill out and you will communicate by phone directly with
business segment, a hotel company might target the young, the bank.” Interest rates vary from 15% to 27%, depend-
technologically savvy, traveling saleswoman subsegment of ing on the individual’s credit history and desired payment
the business and professional market. schedule.
A subsegment that is being targeted more and more For decades, travelers have been able to play before
is the less-affluent counterpart of other segments, such they pay. Banks have long offered vacation loans and credit
as the low-income mature traveler or the low-income card companies encourage purchasing travel services on
young-family subsegment. Lower-income travelers rep- credit. Tourism company-based financing is just one more
resent potential growth for travel providers because they means that customers can use to gratify their vacation
have not been able to afford many of the travel services desires now and pay later. Should tourism service suppliers
that other, more affluent travelers have been purchasing. encourage customers to “travel now and pay later”?
Net Tour
To get you started on exploring Internet links for this www.exodus.co.uk
chapter, please see www.virgingalactic.com/
www.spaceadventures.com medicaltourism.com
www.sath.org www.ttra.com
adventuretravel.com www.slow-tourism.net
lake-express.com www.my420tours.com
www.exploreworldwide.com
1. Based on your knowledge of the tourism industry, 4. Why will the number of suppliers in the tourism indus-
what future services do you think will be developed to try decrease, and how will this consolidation of suppliers
serve mass markets or specific market niches? take place?
2. Based on your knowledge of the tourism industry, 5. Will advances in technology replace the need for the
which of the following groups holds the most prom- human touch in the tourism industry?
ise for future growth—mature travelers, international 6. What are the main types of tourism research conducted
travelers, or business and professional travelers? by governments and tourism suppliers?
3. As speeds and efficiencies in trains and airplanes
increase, do you think that travelers will shift their
trips to one or the other of these transportation modes?

1. Conduct an Internet search and list the recent trends 2. Arrange an interview with an experienced travel
in tourism-related activities. Do you think these agent. Ask what changes he or she has observed in
trends will continue? Why or why not? (Students the tourism industry in the past five years. Some
may enter “World Travel Trends” in the search bar areas you might ask questions about include changes
of the ITB homepage to access ITB World Travel in business and professional travel, ecotourism,
Trends reports.) international travel, and technology.
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ourism 411
3. Choose a tourism service supplier and outline how 5. Interview a manager of a tourism business to determine
mass customization and microsegmentation could be what he or she thinks will be some of the major challenges
used to improve customer service. Give examples to facing his or her sector of the industry in the future. Are
justify your answer. any changes being made to meet these challenges, such as
4. Interview a friend or relative who you think is a mem- EFR, greater automation, subcontracting, and so forth?
ber of the adventure tourism segment. Ask about his 6. Find an article that discusses the future of tourism.
or her most recent vacation. Also ask why he or she Summarize the changes that are predicted.
participates in extreme activities and what benefits he 7. Try to plan a two-day travel itinerary for someone who
or she derives from these activities. is wheelchair bound. The trip includes travel on train
or plane, an overnight stay, and a visit to an attraction.
Glossary
Adventure tourism Tourism that involves activities with Real estate tourism Travel time spent gaining in-depth
an above-average element of physical risk. knowledge and perspectives about the area from
Age cohort A generation affected by common experiences. scheduled meetings with local experts while searching
Biometrics Technologies for identifying and verifying an out potential investment opportunities.
individual’s physiological characteristics such as finger- Research The systematic investigation of a topic, often
prints, handprints, facial features, and irises. including the collection of information for a set goal.
Configured (rooms) Rooms with a well-planned design Single supplement The additional charge added to the
developed to meet user needs for efficiency and price of a tour or cruise when a traveler does not
effectiveness. share accommodations with another traveler; often,
Cooperative alliances Long-term relationships that 25% to 100% of the double occupancy rate is added
enhance operating efficiencies, profitability, and market to arrive at a single occupancy rate.
share for all parties. Single traveler A person who lives alone and travels with
Efficient foodservice response (EFR) Partnership agree- or without a companion.
ments created among manufacturers, distributors, and Slow tourism Trips with a slower pace during which
foodservice operators to lower food costs and improve travelers step back from everyday experiences, allowing
the quality of service. time and opportunities for immersion.
Extreme tourism A subset of adventure tourism; encom- Subcontracting The hiring of another organization to
passes activities that involve above-average elements of perform one or more operational functions or services.
physical challenge and risk. Subsegments A group within a larger market segment;
Mass customization The production of a good or service sometimes called a “microsegment.”
to fulfill the unique needs of an individual buyer. Virtual conferencing Meetings among geographically
Medical tourism Travel to other countries to receive dispersed individuals using video, sound, and data
medical treatments. transmission technologies so that participants can see
Microsegmentation The process of identifying and serving and interact with each other.
small subsegments of the market. Vocation tourism Trips during which travelers take time
Pacific Rim The land masses that have a Pacific Ocean to experience possible new careers before actually
coastline. making career changes.
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19. Woehler, L. (2004). The rediscovery of slowness, or 39. Garrett, E. (1999). Tad Smith, futurist. Management
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In Klaus Weiermair and Christine Mathies, eds., The 40. Dash, J. (2000, January 2). Future treks. Denver
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41. Giebelhausen, M., Robinson, S. G., Sirianni, N. J.,
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Leisure Studies, 22, 147–167. in crisis. Cambridge, MA: CABI Publishing.
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Hudson, ed., Sport and Adventure Tourism ment in tourism: Management needs and research
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konen, H. (2007). The future of pensions and 44. Pizam, A. (1999). Life and tourism in the year 2050.
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PART III
Integrated Cases
It’s Not a Bird House
Coping with Crisis
Any City Can be a Tourist Destination
Struggling to Serve the Cannabis Tour Niche
413
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IT’S NOT A BIRD HOUSE

Lorie A. Tuma and Roy A. Cook
INTRODUCTION
The Purple Martin. The name of this organization may make it sound like a bird house,
but it’s not, it’s is more like a nest. A nest of ideas, dreams, and a vision of hope to
make a difference. The Purple Martin may be home to unique bird houses that attract a
most sought after colony of endangered swallows called purple martins as they descend
on this pristine stretch of Lake Huron shoreline each year, the Purple Martin is much
more. It began with the desire to offer foster children and their siblings an opportunity
to escape the hustle and bustle of the difficulties so many faced in their daily problems.
With a vision of providing an environment of safety and warmth for at-risk children,
this 501(c)(3) organization was founded by philanthropic entrepreneur Cindy Vezinau
and had become a Rogers City, Michigan, fixture and beacon of hope.
From a very humble start on a shoestring budget, the Purple Martin had success-
fully grown into fulfilling its mission, but its future was still to be determined. How
could the outreach of the Purple Martin continue to grow and be communicated and
how could its stakeholders continue to be engaged?
A BUCOLIC SETTING WITH A VIBE

Rogers City, Michigan, with a population of 2819, was a picturesque lake front town,
reminiscent of a Norman Rockwell painting. Located along the shoreline of Lake Huron
approximately 50 miles south of the famous Mackinac Bridge, Rogers City, was endowed
with scenic beauty and natural resources that attracted a beehive of summer visitors and
activities. Not far from Rogers City, visitors could find the 40 Mile Point Lighthouse; Hoeft
State Park, a heavily wooded park with a mile of the sandy Lake Huron shoreline; Harbor
Springs and Petoskey is just an hour away and the Presque Isle and Great Lake Sailors
Museum. Local citizens took pride in their city and all the surrounding area had to offer.
The city had been successful in hosting a large nautical summer festival each year
to showcase all the city and the area had to offer visitors. In addition, Rogers City had
been thrust on to the stage of international publicity when a group of college students
descended in the middle of main street in 2012 and became a flash mob by performing
“The Hustle.” This event was recorded and soon through the power of social media
had gained over 30,000 viewers, and the attention of every form of mass media. Even
with this new notoriety, the citizens of Rogers City still took pride in the peace and
solitude their little town offered visitors. Some of the most prized visitors, both birds
and people, were those who came to stay in the Purple Martin Inn.
Since Rogers City gained its instant notoriety with that 2012 flash mob, Cindy has
kept the spirit of the Purple Martin alive by replicating the flash mob and involving
citizens in a second event, titled, “Purple Martin Mania.” She secured authorization
from city council members to shut down the four corners of the main street once again
for a public dance, and more than 200 citizens participated.
This event was actually duplicated for three consecutive years until the state re-
moved the street light and city ordinances prevented the shutdown on the four corners.
So Cindy moved the event down the street to the Beach Pavilion (which offers shelter
and public bathrooms). This continued to be the site where Purple Martin Mania activ-
ities and fundraisers took place.
Other Purple Martin Mania events that evolved over time included sidewalk chalk,
a dance, pet parade, and a county-wide art contest for school children. The winner of the
contest picture was used for the official poster for the Purple Martin Mania event. The
first, second, and third place winners receive prizes and their pictures were displayed in
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ourism 415
the Presque Isle Library for locals to judge and enjoy. The event was filmed by a profes-
sional videographer, which was entered into a contest with the Michigan Municipality
League and was recognized as a unique initiative. In addition, building on the purple
theme, purple lights, purple martin themed décor, and wish balloons could be found
throughout the city. Citizens of Rogers City continued to gather each year to launch
balloons in an effort to demonstrate support for this initiative and hope for their future.
THE PURPLE MARTIN INN

The idea for the Purple Martin was created shortly after Cindy discovered a piece of
property on Lake Huron. On a whim, she purchased it within 24 hours, and then
found herself trying to decide what to do with it. She ultimately received guidance to
turn it into a tourist facility of some sort to allow others to enjoy the beauty of the
area, utilizing her experience in tourism.
The Purple Martin Inn Nature Center and Lakeside Inn was the start of this
endeavor and was named after a conglomeration of birdhouses built on the site to
attract nesting purple martins. The building originally housed a commercial laundry
facility serving the laundry needs of lake freighters that once plied the Great Lakes.
This building had fallen into disrepair from lack of use and had been scheduled for
demolition, but through the visionary efforts of founder Cindy.
As a child, Cindy spent of many her summers in Rogers City and wanted chil-
dren to experience the same safety, cleanliness, and enjoyment of Pure Michigan
that she had. The Purple Martin was a place where you could smell the flow-
ers, gaze at the stars, and not be afraid. She understood that foster children fear
the unknown more than anything, and safety was what they needed. One of the
most simple pleasures she had always enjoyed was giving these children a word of
encouragement or hope, and according to Cindy, they held onto that dearly.
CINDY VEZINAU AN ENTREPRENEUR WITH A PASSION

After graduating from high school, Cindy backpacked across Europe, returned to the
United States and decided to start looking for a job. She worked in travel agencies and
was approached by Eastern Airlines and was hired as a liaison between the airline com-
puter reservation system and travel agencies and corporations housing airline software.
She then transferred to Continental Airlines, and ultimately Northwest World Airlines
World Vacations. Northwest Airlines merged with Delta Air Lines and she has worked
the last 20 years with Delta Vacations.
In Cindy’s current position, she works with the travel agency community and as
an educator who delivers high-level training at Delta Vacations University and was a
frequent contributor on radio stations throughout the state.
Her practical industry experience has always revolved around tourism. She has
traveled the world over but still admits—Rogers City is the best place on the planet.
Cindy was passionate about her vision and when speaking about the value of the Purple
Martin experience, she always noted that, “All these children need is love” and promot-
ing the theme “Nature Plus Nurture Equals Future.”
FULFILLING A MISSION
Although she had focused much of her initial attention on renovations and starting up
a business, she still felt compelled to serve the community. A few months after pur-
chasing the property she was listening to the radio while driving and overheard a radio
broadcast that was discussing the peril of foster children and the need to help them. She
called the station, tracked down the speaker, and set up a meeting immediately. Jeannie
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Fowler, was the Michiganian of the Year, and also has the nonprofit “Big Family” in
Detroit. Cindy added, “I didn’t go out looking for this . . . it came to me.” And, Jeannie
proved to be the perfect mentor as she taught Cindy everything she needed to know
related to all of the operational aspects of running a non-profit organization. This was
the beginning of the Purple Martin for kids, a non-profit endeavor.
Now the vision was clear. First, to build the Inn showcasing the area and to help the
community. Second, as an additional part of that vision, to help at-risk children in foster
housing to have hope, safety and lasting experiences. However, faced with the restric-
tions of laws that specifically limit the general public from having exposure to foster chil-
dren, the building had evolved into a funding source to send children to a summer camp.
Initially the Purple Martin Inn was created as a safe haven to connect foster chil-
dren with their parents/siblings. However, as it evolved, she decided to create a camp
that offered innovative activities in the area that fostered community partnerships.
This also reinforced an important fact and feeling she desired to communicate to
these foster children who came to Rogers City. She wanted demonstrate to them that
the citizens of Rogers City truly cared for them and were advocating for them.
The Purple Martin Inn has grown exponentially mostly due to the fact that it has
attracted a loyal following because it was built “green.” Whenever possible, she and
the purple people, as she called them, people who believed in her vision, used recycled,
reclaimed, and repurposed materials in every phase of the renovation process. In addition
to her focus on sustainability, she also focused on nature. A second floor was added with
picture windows overlooking the lake and an unobstructed view of the Purple Martins. It
now attracts clientele seeking a unique experience in a clean, pristine location. She believed
the Purple Martin Inn would bring more jobs and people to the area, which would result in
additional economic development. Instead of hearing citizens say “the town is dying,” she
believed she would hear them say, “this town is amazing” and have pride in where they live.
FUNDRAISING ON A SHOESTRING
The Purple Martin was like many small non-profits, an idea that was founded on a
shoestring with a big mission. Realizing the constraints of a limited budget, Cindy
turned to her network of friends to raise awareness and supporting funds for her proj-
ect. In her quest for recognition and funds, she had the premonition of tapping the
developing talents of college students and their desire to create social change. These
students soon caught her enthusiasm, initially creating that first flash mob sensation
and then over the years other students have followed and developed a variety of suc-
cessful friend raising, fundraising, and recognition programs.
It is amazing how students and other people have come up with so many creative alter-
natives to raise funds—everything from raffle tickets, to basket sales, to restaurant events.
Because of what they have accomplished, people are now coming to her saying, “we have
heard about what you are doing—we want to help you as well.” Cindy has received money
regularly now because the word is out and people want to support her mission. However,
with increased funding, comes an opportunity to serve more children, which is followed
by an additional increase in the need for more funding to serve the needs of more children.
The Purple Martin Inn, now operated as an air b&b, allowed marketing to inter-
national and domestic visitors alike was not originally about a place you would find
in a brochure, it was the type of destination you most likely found out about from
others. It was a destination that required people to put their cell phone down and un-
wind. When they entered the doors, they were removed from the hurriedness of life,
and given an opportunity to “let it go.” Although the word was now out about the
Purple Martin Inn, it was still a place focused on nature and relaxation. Now, when
Cindy has the time to step back and look at her success, she often wonders how can
these ventures and the growth of the community be sustained?
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COPING WITH CRISIS

Edwin C. Leonard, Jr. and Roy A. Cook
INTRODUCTION
Imagine a company celebrating 120 years of continuous service. With uniformed con-
ductors, engineers, and authentic coal-fired steam engines, the historic Durango &
Silverton Narrow Gauge (D&SNG) Railroad, Inc. fully expected to continue delighting
tourists by providing this historic and scenic ride for years to come. As the number
one tourist attraction for both Durango and Silverton, Colorado, the train had become
a mainstay for both economies. Now, imagine being in charge of this operation and
facing a crisis decision in the midst of poor economic times and soft tourism demand.
For most tourism-related industries, 2001 was a dismal year. Even prior to 9/11,
many companies were experiencing both declining revenues and increasing operat-
ing expenses. Unfortunately, the end-result for most service providers in the tourism
industry was worse than projected revenue and visitor numbers. It was a simple case
of supply and demand; the supply of tourism venues continued to expand, while the
uncertain economy and terrorism fears caused travelers to scale back their plans for
venturing out. The stock market peaked in March of 2000 and tumbled dramatically
to multi-year lows, making consumers even more financially conservative with their
leisure expenditures. People with extra cash were reluctant to part with it.
The tourism industry in Southwest Colorado was feeling the economic pains of
the slow-down in tourism like the rest of the country. In the midst of this gloomy
scenario, some good news came to the local tourism economy. Newspaper headlines
screamed the news: “Thomas the Tank Engine is coming to Durango, June 15–23 to
travel on the historic D&SNG Railroad, Inc.” With records set for lack of snow and
rainfall, the drought-conscious Durango business owners needed a shot in the arm that
increased tourism could bring. Thomas’s popularity, due to its own web site, books,
toys, videos, movie, Public Broadcasting System (PBS), and Nickelodeon television fea-
tures, was expected to draw thousands of new visitors to Durango. For $14 per person
(nonrefundable tickets), visitors could experience “A Day Out With Thomas.” Every
45 minutes, the D&SNG coaches were expected to transport thousands of visitors on
a 30-minute ride.
Since the train was the main destination attraction in the region, this added venue
came at a good time for many of the local tourism businesses that were starving for cus-
tomers. Train riders typically stayed in Durango, the largest town in the region, while
participating in other activities, such as visiting Mesa Verde National Park and enjoying
a variety of outdoor activities. While Durango served as the station for the train, one
town in the region was even more dependent on the train than any other—Silverton.
SILVERTON AND THE D&SNG

The small mountain town of Silverton, population 720, was especially dependent on
the day-trippers that flooded into the town with each scheduled train. These passengers
had two and a half hours to sightsee, eat, and shop in this historic mining town before
boarding for the return trip to Durango.
In its continuing efforts to promote tourism, the Silverton Chamber of Commerce
hailed 2002 as The International Year of the Mountains. Noted events included the
31st Annual Iron Horse Bicycle Classic where riders from all over the world come to
race the D&SNG as it chugged along the 45 scenic miles of twisting mountain tracks
passing through the San Juan National Forest between Durango and Silverton. An
announcement from the Silverton, Colorado Chamber of Commerce extolled the vir-
tues of Silverton.
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Nestled high in the heart of the San Juan Mountains, the Town of Silverton’s
unique mining history, Victorian charm, and unequaled natural beauty provide an
ideal base for your summer or winter explorations. Accessible by the scenic Narrow
Gauge Railroad, this old west town sits at an elevation of 9,318 feet, surrounded by
public lands waiting for you and your family to discover (www.silverton.org).
Because Silverton was never the victim of a major fire, as so many mining camps were,
the buildings have been preserved, many of them with original furnishings, fixtures, stamped
tin ceilings, and polished, mirror back bars. It’s a friendly place to visit (Retzler, 2002).
The town provided visitors an opportunity to see how miners and their families
lived over a hundred years ago in this 9,318 foot high mountain valley. The Mayflower
Gold Mill, a National Historic Landmark, allowed tourists to see how miners got gold
out of the hard rock ores. While accessible by a winding drive via U.S. Highway 550,
most visitors took the three to three and a half hour trip via the D&SNG. According to
some, the train is Silverton’s bread and butter.
Operating daily from May to October, the D&SNG offered riders the opportunity
to enjoy views of unparalleled beauty and an unforgettable steam train experience. The
train hauls over 200,000 people a year from Durango to Silverton with nearly 40% of
those passengers traveling in June and July on four daily trains. The average round-trip
fare was about $65.00 per person. In addition, the railroad employed 80 full-time and
145 seasonal employees. While hundreds of thousands of visitors choose to drive the
50-mile high alpine road linking Durango and Silverton, the train experience has con-
tinued to serve as a major tourism attraction.
THE SPARK
The drought had become so severe that the moisture content in live trees had dropped
to less than would be found in kiln-dried lumber in a lumber yard. What started as
a spark in the tinder-dry forests north of Durango changed into a roaring inferno as
a wildfire jumped control lines and raced toward the top of Missionary Ridge to the
northeast of Durango, consuming 6,000 acres on the first day. Silverton lies due north
of Durango, and if the fire continued to burn out of control, both the rail and road
links between the two towns would be engulfed in smoke. Everyone intently watched
the skies as a shift in wind could bring the fire toward Durango (Clay, 2002).
Because of the heavy smoke produced by the fire, air quality in parts of the San Juan
Basin, which included Durango, became unhealthy for the sensitive—the elderly, chil-
dren under seven, and those with respiratory problems (Aguilera, 2002). Other attrac-
tions also began to suffer. Instead of playing golf at Tamarron Resort (ranked in the
top 50 resort courses in the nation by Golf Digest) just north of Durango or playing in
the river (kayaking, tubing, or rafting), most tourists took their activities inside as dense
smoke obscured the Sun. Tourism activities and expenditures were evaporating as the
fire and smoke spread, and concerns over additional fires in the tinder dry region flared.
THE CRISIS
The chance of accidental fires was all too real. Several small fires had already been
started by stray cinders from passing D&SNG trains. In response to this threat, water
tankers with small fire-fighting crews were scheduled to travel behind every train as a
precautionary measure.
By mid-afternoon, Wednesday, June 19, 2002, D&SNG railroad Chief Executive
Officer Allen Harper found himself caught between a rock and a hard place as the fire
danger increased. See Figure 1 for a timeline of events. Continuing to run the coal-
fired trains in the isolated tinder dry mountains could cause additional fires, and fire-
fighting resources were already stretched.
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ourism 419
January 1–June 15, 2002—Serious snow or rain clouds wanted. The area known as the Four Corners
(bordering Colorado, New Mexico, Arizona, and Utah) was in the midst of a severe record-breaking
drought.
June 8–August 8, 2002—The peak tourist season for the towns of Durango and Silverton, Colorado.
Sunday, June 9, 2002, Day One—A spark ignited dry timber north of Durango and the soon to be
“Missionary Ridge Fire” began burning out of control, consuming over 6,000 acres in less than six
hours.
Saturday, June 15, 2002, Day Six—the fire has consumed almost 20,000 acres.
Tuesday, June 18, 2002, Day Nine—A spark from the D&SNG started a fire just north of Durango.
The fire burned about an acre of land before being put out by two water-carrying helicopters pulled
away from the Missionary Ridge fire. This fire was controlled within a couple of hours (Schober,
2002), but the main fire races ahead uncontrolled for four miles, reaching a size of over 50,000 acres
by the end of the day.
Wednesday, June 19, 2002, Day Ten—The Second Annual Adventure Xstream scheduled on the Animas
River paralleling the D&SNG for Saturday, June 22, was cancelled due to the wildfires raging north
of Durango.
Thursday, June 20, 2002, Day Eleven—President Bush declared a major disaster for Colorado, thereby
making funds available to help homeowners, renters, business owners, and employees affected by the
Missionary Ridge fire (Greenhill, 2002).
Friday, June 21, 2002, Day Twelve—Summer officially arrives. The Missionary Ridge fire near Durango
continued to rage out of control, burning almost 60,000 acres.
1. Structures burned: 33 residences and 26 other structures
2. Evacuations: 1,760 homes
3. Percent contained: 25
4. Firefighters: 1,263
5. Firefighting costs: $8.01 million (The Denver Post, 2002)
FIGURE 1
Timeline of Events.
Yet business owners who feared lost revenues if the trains were idled urged man-
agement to keep the trains running. At the same time, managers of the San Juan
National Forest were considering closing some or all of the 2,107,554-acre forest.
Harper had spent several hours talking with Silverton business owners who were
dependent on train passengers for tourist dollars. They urged him to keep the train
running. In addition, business owners from hotels and restaurants to jeep tour com-
panies, fly fishing outfitters, and others in Durango also attempted to persuade him to
keep the trains running. Yet, many residents who had no apparent interest in tourism
and local officials urged him to close operations.
Earlier in the day, Harper and senior vice president Jeff Jackson rode a pop car (a
small two-person rail vehicle) behind the morning train to Silverton to observe first-
hand the railroad’s expanded fire prevention measures. On that trip, Harper had seen
four small fires that were ignited by smokestack cinders and personally stomped one
out himself. By noon, the mountain valley close to the railroad’s main line between
Durango and Silverton was filled with smoke from the advancing Missionary Ridge
fire (Schober, 2002). Harper, who had flown in from his office in Florida when the fire
started, returned to his hotel room and weighed his options.
He knew he had to make a decision and announce it soon. Should he listen to
local businesses, stay fully staffed and keep the trains running? Should he listen to con-
cerned citizens and fire fighting officials and temporarily cease all operations and lay
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off employees? Should he limit service to only the Thomas the Tank runs that stayed
close to Durango in open areas away from the forests? If he did decide to suspend
operations, how should he deal with customers who had already made reservations
and planned their vacation travels around a ride on the D&SNG? Could local, state, or
federal officials pre-empt his decision and order a shutdown for safety reasons?
References
Aguilera, E. (2002). Homes fall victim to sudden flare-up. The Denver Post, June 21,
p. 18A.
Clay, A., Deputy Chief of Operations, Durango Fire and Rescue Authority, Durango,
Colorado, Interview, July 9, 2002.
Greenhill, J. (2002). 21 subdivisions now threatened. The Durango Herald,
June 20, p. 1A.
Retzler, K. (2002). Spectacular Silverton, Colorado. San Juan Silver Stage, Spring, p. 23.
Schober, B. (2002). Train will suspend trips to Silverton. The Durango Herald, June
20, pp. 1A, 10A.
The Denver Post. (2002). June 21, pp. 1A, 16A, 18A. www.silverton.org.
This case was prepared by Edwin C. Leonard, Jr. of Indiana University–Purdue Fort Wayne and Roy A.
Cook of Fort Lewis College and is intended to be used as a basis for class discussion. The views represented
here are those of the authors and do not necessarily reflect the views of the Society for Case Research.
Authors’ views are based on their own professional judgments. “Coping with Crisis” by Roy Cook and
Edwin Leonard, Jr. (2003).
ANY CITY CAN BE A TOURIST DESTINATION

Roy A. Cook and Barbara H. Nemecek
INTRODUCTION
Tourists are naturally attracted to destinations that are easy to access, are blessed with
natural beauty, have well developed entertainment offerings, or offer consistently mild
climates. What do you do if you are in a location that is devoid of all of these obvious
attractors?
That was the question faced by decision makers in Wichita Falls, Texas. When the
city leaders first embarked on their attempts to lure tourists to this secondary Texas
city there was a great deal of skepticism, “. . . . because of the area’s perception as a
sleepy, remote city with few amenities and scorching summers.” (City of Wichita Falls,
Vision 20/20 Plan, July 2008, p. 33) Wichita Falls was not known for its location,
beauty, noteworthy attractions, dining, or recreation opportunities.
BACKGROUND INFORMATION
Wichita Falls is a secondary city with a population of a little over 100,000 located in
the Panhandle Plains of Texas. It is the focus of commerce in the region as it serves
as the county seat and home for many governmental offices for Wichita County. In
addition to governmental services, the city is an agricultural trading center and home
to many independent oil and gas operations and Sheppard Air Force base, the training
center for NATO pilots. Aside from these traffic drivers, there is little else that serves as
natural attractions as the city sits in the nondescript high Texas plains, about 130 miles
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ourism 421
west of the Dallas-Fort Worth Metroplex, 225 miles southeast of Amarillo, Texas; and
140 miles south of Oklahoma City, Oklahoma.
FROM ECONOMIC POWERHOUSE TO MEDIOCRITY

The early days were filled with excitement and economic vitality. As Wichita Falls
entered the 20th century, it was the crossroads for six railroads, setting itself up as
a transportation and supply center for a large geographic area serving Northwestern
Texas and Southeastern Oklahoma. If the railroads didn’t create enough excitement for
this High Plains Texas city, the discovery of oil in the early 1900s ushered in another
gusher of economic activity. Oil companies and the related activities surrounding a
boom town atmosphere created a thriving and vibrant city.
However, it seems like all good things must come to an end, and it finally did in the
1960s. As oil production declined in importance, wildcatters and producers switched
their attention to other areas. So, the city switched its economic focus and looked to
industry for new growth. Enter a new organization, the Industrial Development, Inc.
(the precursor to the present-day Board of Commerce and Industry).
Things again looked promising as new businesses were successfully recruited bring-
ing in new or expanded manufacturing facilities and employment opportunities. Once
again, the future looked bright. But, just like in the past, these new economic activities
began to evaporate. By the 1980s, manufacturing plant closures combined with a severe
decline in oil prices came as a double economic whammy. It must have seemed to many
residents that every time things started to look up that the future soon looked gloomy.
In the face of these setbacks, city leaders were not deterred. Throughout the 1990s
and 2000s, Wichita Falls continued to seek economic diversification. Although these
efforts resulted in some growth of the manufacturing sector, the economy remained
relatively dependent on both the oil sector and government. The city began hosting
more and more events, but it didn’t seem as though anyone was thinking about tourism
as being an economic engine.
The economic picture continued to deteriorate as the gravitational pull and regional
transportation linkages with both the Dallas-Fort Worth Metroplex and Oklahoma
City continued to increase in importance. In the shadow of these two giants it seemed
like Wichita Fall’s prominence as a regional trade center were destined to continue
fading.
To compete successfully in this changing environment, Wichita Falls was forced to
carve out a niche for itself and capitalize on the amenities and assets it could offer that
other cities in the region could not. Part of this future was now dependent on recogniz-
ing and developing tourism products that would showcase the city and draw in visitors
(City of Wichita Falls, Vision 20/20 Plan, July 2008).
PLANNING FOR THE FUTURE

Wichita Falls elected a new mayor in 2005. He promised that the city would put into
action some type of plan that would revitalize the city. With the downsizing of the larg-
est employer in Wichita Falls, Sheppard Air Force Base, the area economy had taken
a major downturn. There was considerable disagreement among the various stake-
holder groups of the City—City Council, Economic Development Offices, Chamber
of Commerce, and Downtown Council—on how they should proceed to revitalize the
economy of Wichita Falls. The new mayor held numerous “Town Hall Meetings” with
all the stakeholder groups. He hired a new City Manager, and a consultant to work
on City Planning and Priorities. He established an Office of Economic Adjustment to
assist the city in dealing with the Air Force base downsizing and resultant loss of jobs
and dollars flowing into the economy.
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After much study, discussion, and debate, the major stakeholders came together
and developed a strategic plan, “Wichita Falls—Vision 20/20, City of Wichita Falls,”
in July 2008. The vision statement: “A Vibrant Regional Center, Attractive to Talent
and Investment” had three goals:
1. Develop, retain, attract, and engage talent,
2. Diversify and grow the economic base, and
3. Promote and enhance Wichita Falls’ quality of place.
The Plan focused on development of four key areas and was supported with spe-
cific strategies. The key areas of focus were the downtown (central business district),
attracting talent, business development, and image and marketing. First, the down-
town area was badly in need of revitalization. Changes in commercial development
patterns in conjunction with a weakening of the city’s oil sector had resulted in decline
and decay of a once thriving downtown commercial center. Second, attracting and
nurturing talent was perhaps the most fundamental issue facing the city in its efforts to
create a long-term sustainable economic vitality. Third, the assessment of industry con-
sidered the full complement of economic activities, ranging from traditional industrial
employers to services, as well as the physical infrastructure and the business climate to
support those activities. Opportunities for expansion of existing companies, the poten-
tial of entrepreneurship, and the importance of the service sector were recognized as
building blocks for sustainability and growth. Finally, there was a need to improve the
community’s image—both internally and externally. It was difficult to draw people to
Wichita Falls, but it was soon recognized that if they liked it when they visited, they
would come again or even relocate.
Table 1 shows the strategies that were designed to support each of the key areas
of concern.
All of these activities resulted in the completion of the “Vision 20/20 Plan” in July
2008—naming Wichita Falls “The Gateway to Texas.”
TAKING INVENTORY AND LAYING THE FOUNDATION

FOR INCREASED TOURISM TRAFFIC
Although there is little in the way of natural beauty or urban amenities to attract visi-
tors, the city had a number of features that could be developed as attractors:
• The city’s downtown baroque architecture (built during the 1930’s oil boom)
could be revived and utilized,
• The people of the city, with training and confidence in what there is to see and do,
could serve as ambassadors,
• There is a lake, hiking trails, a wildlife refuge and parks (all still needed further
development), and
• There are many events and gatherings.
Of particular importance to tourism development was the large number of events
held throughout the year as shown in Table 2.
Wichita Falls is also home to Midwestern State University, which hosts a number
of cultural and athletic events, and the city also hosts the WildCats, a National Hockey
League minor league team. In addition, visitors will find a water park, including a
Wichita Falls Water Falls (built with Niagara Falls rock), and a variety of museums
and historic buildings. While in Wichita Falls, visitors can choose from 26 lodging
properties with a total of 2,200 rooms. Wichita Falls is mainly a drive market, but the
city has minimal and improving air service.
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ourism 423
Table 1 Strategies Developed to Support Plans for Development and Growth

Strategies developed to revitalize the downtown area
1. Formalize tools for promoting revitalization.
2. Support the establishment of “anchors.”
3. Use residential development as a primary catalyst.
4. Develop a retail strategy emphasizing “destination” retail.
5. Target professional services, company headquarters, and entrepreneurship to
alleviate the surplus of office space downtown and surplus of office workers in
Wichita Falls.
Strategies developed to attract talent
1. Re-establish ties to former residents.
2. Initiate and maintain a Sheppard Air Force Base veterans’ inventory.
3. Continue supporting educational excellence.
4. Align economic development and education programs—K-12, vocational, 2-year,
4-year.
5. Develop new generations of leaders.
6. Continue efforts of Workforce Development Task Force.
Strategies developed to support business development
1. Expand healthcare cluster.
2. Enhance professional services cluster.
3. Continue the development of industry clusters in the region.
4. Continue business retention and expansion activities.
5. Promote entrepreneurship in the region.
6. Foster regionalism.
7. Continue to pursue new missions for Sheppard Air Force Base.
8. Encourage growth in the tourism sector.
Strategies developed to support image and marketing
1. Commission a community-wide marketing and image plan.
2. Designate an individual to manage the city-wide marketing campaign.
3. Initiate a local positive image campaign.
4. Continue to build awareness of the region among decision makers in target
industries and site selectors.
5. Maximize the impression of Wichita Falls to visitors.
6. Continue city-wide beautification initiatives.
Table 2 Yearly Events

Red River Wine Festival Rodeo
Western Swing Music Festival Ballet Theater
Texas-Oklahoma Oil Bowl Downtown Strolls
Texas Ranch Roundup and Festival Wichita Falls Symphony
Hotter ’N Hell Hundred Bike Race Kemp Center for the Arts
Downtown City Lights Festival Cajun Fest
Midwest State Univ.—Burns Lights Display Cinco de Mayo Celebration
St. Patrick’s Day Celebration Texoma Golf Tournament
Zombie Crawl Falls Fest
Red Dirt Fest Tornado Alley Racquetball Tournament
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Faced with location and amenity challenges, key tourism stakeholders set about
to participate in repositioning the city as a tourism destination. Because tourism is a
conglomeration of many industries and needs the coordination of a wide variety of
enterprises and agencies are needed, planning was never easy.
The first order of business was to hire a director for the project, and then work
with the stakeholder groups, each of which had their own marketing plan, to develop
an “Overarching Brand” for Wichita Falls. All groups agreed to work together on
one primary project—this included the Board of Commercialization and Industry
(Chamber including the Economic Development Corporation), the Downtown Wichita
Falls Association, and the City of Wichita Falls. To support these efforts a fundraising
campaign was launched and gathered $1,500,000 with $500,000 allocated to fund
projects and programs in each of the first three years.
The meetings, discussions and the development of a plan took over a year and
involved input from over 2000 people in the community. They spent a great deal
of time defining “who” Wichita Falls was, and “what” they wanted to be. The end
result was a logo, a brand, and a marketing plan for the community. This campaign
was called “Pride in the Falls”—Blue Skies—Green Spaces—Golden Opportunities.
Planning began in 2009 and the new campaign was rolled out in 2010. Many of the
first campaign items touted: “Best of ____________ (you fill in the blank).” Or, slogans
like, “Quirky, interesting people and places—only a couple of hours from _________”
(you fill in the blank). Another idea that gathered a lot of attention among residents
was the T-Shirt Campaign. These tee-shirts sported slogans such as, “We’re Not in
Kansas—Never Were: Wichita Falls, TX,” “Red Draw—Not an Art Project: Wichita
Falls, TX,” and “It’s OK to have a cow: Wichita Falls, TX.”
A key component of the initial campaign was to focus on general marketing
communications—to tell the story to its own citizens first, selling them on the
excitement of Wichita Falls. Sixty percent of the funding for the first campaign was
directed internally, while 40% was directed externally to tell the story outside the
community and draw people to Wichita Falls. This portion of the campaign was
directed particularly toward Texas and southern Oklahoma. Ads were placed on buses,
in magazines and in brochures.
Wichita Falls flags were sold to local residents and businesses. A publicity campaign
was launched promoting the fact that the city had been named the “6th Best Value
of Living” in the U.S. Literature was placed in the hotels and restaurants. The overall
tagline was “Blue Skies—Golden Opportunities,” and the Chamber promoted “Hard
working—Easy Living” featuring well known local leaders, the CVB promoted “Find
Yourself in the Falls,” and the Downtown Association promoted “Downtown Proud.”
The campaign was designed to build a “fulfilling sense of community”—potential
financial opportunities and entrepreneurial possibilities comparable to bigger cities
for newcomers, and a sense of community in the welcoming fellowship for temporary
residents—military-based personnel and academics. An ad campaign was launched:
“Troups First—First in our Hearts, First in Line” which gained national attention and
awards.
There were Public Relations Placements and Signature Events, all with organized
and coordinated marketing pieces. An initial area of concentration was to bring back,
revitalize and grow the older events the city had been known for like the Oil Bowl
and the Ranch Round-up. This was followed by the development of some new events
particularly concentrating on downtown development and regional sports activities.
“Because of a general lack of awareness of events, activities and attractions, a portal
site with a common community calendar was developed. For the first time, one, easy-
to-use calendar generated from a variety of organizations and sites existed for the cit-
izens of Wichita Falls.” (The Visual Brand, Wichita Falls, Texas, 2011, Texas, p. 8).
Overall the promotional messages concentrated on (1) Quality of Life in Wichita Falls,
(2) Tourism and Events, and (3) the Image of Wichita Falls.
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ourism 425
CONTINUING THE CAMPAIGN

During the second year of the campaign (2011), the promotions became less generic and
more specific. The ads touted the importance of the city and Sheppard Air Force Base.
One of the television ads: “Troops First” gained national attention, and won an award
for excellence. Another series of ads were addressed to “Fly Wichita Falls” when jet ser-
vice was added to the local airport. Air traffic increased solidly with this campaign. Pride
Promotions included some Texas stars in the campaign—Willie Nelson, etc. The number
of sunny days in Wichita Falls was touted, its importance as an Air Force training center
was highlighted, and the “golden opportunities for business” were showcased. The cam-
paign’s promotional concentrations were reversed for this stage of the campaign with
40% of the message being directed internally and 60% directed externally.
Throughout the campaign, the “Theme and Logo” were developed and utilized in:
• Advertisements—print in newspapers and magazines across the state, and on high-
ways north, south and west,
• Media—either event advertising or personal testimonials on quality of life of
Wichita Falls residents,
• Brochures and all collateral materials,
• Buses, utility box covers, etc.,
• Signage throughout community, and
• Events.
The new brand depicted a partial drawing of the northern Texas border, with a
star placed where Wichita Falls is located. The “Blue Skies—Golden Opportunities”
tagline was used throughout.
Other promotional activities were directed at building differentiators for the city
into advertising and promotions. One targeted message was designed to help the city
become known as the “Extreme Sports Capital of Texas.” Other examples of these
efforts include hosting the:
• Oil Bowl (High School Football “All Star” game between Texas and Oklahoma),
• Hotter ’N’ Hell Hundred (100 mile bike race over 100 degrees—25,000 atten-
dance), and
• Zombie Crawl (downtown evening stroll) and a Zombie 5K.
In the latest phase of the campaign, the emphasis has been on setting up focused
events. Each of these events has an underlying theme, “Extreme Wichita Falls Events.”
To reinforce this theme, there is a certification and stamp given out by the city to event
organizers and planners. If the event has something unusual or distinctive, it can get
the “stamp” of “Extreme Wichita Falls” which can then be used in their promotional
literature. For example, landing a new semi-professional football team—the “Wichita
Falls Nighthawks” is a perfect example of what city planner are trying to accomplish
with this new theme. In Texas, where football reigns supreme, this type of event can
become a major draw. The celebrity guest for the family event “kick off” was legend-
ary quarterback and family-values spokesperson, Tim Tebo, so the organizers sought
out and were granted the City stamp: “Extreme Wichita Falls.”
THE RESULTS
With a great deal of focus on bringing tourists to the city and hard work, the skeptics
were proved wrong and Wichita Falls saw an increase in tourism traffic. With a great
deal of focus on bringing tourists to the city and hard work the skeptics who thought,
“Why would anyone come to Wichita Falls?” were proved wrong and the city saw an
increase in tourism traffic.
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One simple metric that can measure this increase was the change in lodging tax
receipts. These receipts increased from $1,429,656 in 2009 to $1,564,204 in 2011.
This is was an over 9% increase during extremely difficult economic times. In addition,
there are many other tangible and intangible benefits that can be cited to demonstrate
the success of the campaign.
Since launching the “Pride in the Falls” campaign, the city has experienced an
increase in tourist visits. Some of the initial results of the campaign include:
• Four percent of citizens surveyed said they noticed an increase in community pride,
• Texas Governor Rick Perry made a special trip to Wichita Falls to recognize the
campaign,
• Seven regional and state-wide awards have been received for the campaign,
• Positive press in National Geographic Traveler, Travel + Leisure, Texas Monthly,
Bike Magazine, American Cowboy Magazine, Outside, USA Today, The Wall
Street Journal, plus many more, and
• This was just the beginning.
WHAT WE CAN LEARN

As the Mayor and the people directly involved in the “Pride in the Falls” campaign
regularly state, “This campaign was designed to build brand awareness exclusive of
job creation.” The aim of the campaign was to build a “favorable environment” for
positive developments in the community. Therefore, comprehensive tracking through
the tourism industry was not done. But, the taskforce believed the campaign had a very
positive effect on the community and its development. Since launching the “Pride in the
Fall” campaign, the city has experienced an increase in tourist visits, and number of
events and attendance at these events has been up overall.
There is general consensus that the “Pride in the Falls” campaign has had a positive ef-
fect and should be continued. Everyone was pleased with the effect the campaign had upon
all the community constituent groups and how they learned to work together for increased
effectiveness in all their organizations. The citizens of Wichita Falls demonstrated that any
city, no matter what the obstacles, can be a destination. What can be learned from their
experiences and applied to other city’s seeking to attract the export income of tourism?
References
City of Wichita Falls, Vision 20/20 Plan, July 2008.
The Visual Brand, Wichita Falls, Texas, 2011, a presentation.
STRUGGLING TO SERVE THE CANNABIS TOUR NICHE

Lorraine L. Taylor and Deborah L. Walker
INTRODUCTION
“What a great entrepreneurial opportunity,” John Mace thought. Now that recre-
ational marijuana was legal in Colorado, and several local distributors had opened for
business. John thought that he could take advantage of this new market by offering
tours to bring visitors to a local growing facility and a retail shop. His “cannabis tour”
would be a great addition to the local tourism industry and he could be a “cannabis
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ourism 427
concierge” who provided information and education to tourists in addition to trans-

portation to the locations. After all, John lived in an area where tourists loved to visit;
the city of Durango in the mountains of southwest Colorado.
Durango was a small resort city of nearly 18,000 residents. As the county seat and
home to a small liberal arts college, it was the governmental, retail, and cultural “hub
city” of southwestern Colorado. People visited the city for a variety of reasons and it
seemed that it was always bustling with activity. Through careful preservation of its
historic western architecture, the city boasted a vibrant downtown filled with the arts,
shopping, and nightlife.
The area provided abundant opportunities for biking, skiing, hiking, white water raft-
ing, kayaking, hunting, and fishing. In addition, the city was home to the historic Durango
and Silverton Narrow Gauge Railroad and was situated within easy driving distance of
Mesa Verde National Park and the historic mining towns of Silverton and Ouray, Colorado.
The city’s outdoor recreation opportunities and the surrounding mountain scen-
ery were wonderful attributes. However, in addition to all of these attractions, many
residents considered the city’s best attribute to be its family oriented atmosphere. To
many, this formed the bedrock of the residents’ quality of life. It also was seen as one
of the reasons that the area attracted tourists.
COMPANY INFORMATION
The operation for High Up Tours and Transportation began very simply. The business
was completely mobile and John was the only employee who drove a single luxury
van. John would pick up tourists from the airport or their hotel and transport them
to a retail marijuana shop and growing facility while providing commentary about the
industry and the laws and regulations that govern the purchasing and consumption of
cannabis for non-residents. What made John’s business different from other transpor-
tation and tour companies was his love of the mountains and his personal touches. As
he explained on his website, “With us, you’re not just getting a driver and a ride, but
a guide who was completely invested in providing you with a remarkable experience.”
As a one-man show, John gave every customer his own personal service.
John received his bachelor’s degree in Communications and began a career in
marketing and brand management. He gained experience in the alcohol and tobacco
industries and was a territory manager in Durango, Colorado, when Amendment 64 was
passed initiating the legalization of recreational marijuana. John had an entrepreneurial
spirit and realized the potential for marijuana tourism as a new niche segment. John
began building relationships with local growing facilities and recreational shops and
started High Up Tours to be designed around his new “cannabis tour.”
In anticipation of the potential for a new market of marijuana tourists, John lev-
eraged his relationships in the community to partner with retail stores that sold recre-
ational marijuana as well as a location where the plants were grown locally. He designed
the cannabis tour to include transportation to the store and the grow site and also his
guidance as a cannabis concierge to not only make recommendations for local marijuana
businesses but also to act as an educational guide and inform tourists of regulations and
laws to keep them safe while purchasing and consuming marijuana in Colorado. As
start-up with a limited marketing budget, John’s marketing strategy was exclusive to
promotions on his website as well as identifying potential partners within the local tour-
ism industry who could build packages for tourists that included cannabis tours.
Despite the potential for marijuana tourism to make a positive impact on the econo-
my in Durango, John was surprised how hesitant tourism businesses were to partner with
High Up Tours. Purgatory, the local ski resort, and the historic Durango and Silverton
Narrow Gauge Railroad were two of the top attractions in the area and both declined
an invitation to partner with High Up Tours because of its association with marijuana.
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John had perhaps been blinded by the potential of legal marijuana as a motivator
for tourism and had not considered the potential conflicts within the existing tourism
community when he started his cannabis tour business. But he soon discovered that
being associated with a product that, although legal in the state of Colorado, was still
considered illegal by Federal standards, posed its own business problems. Furthermore,
marijuana use was still seen as anti-family, dangerous and not something that a whole-
some vacation would include. He tried to break into the local tourist market by team-
ing up with the destination management organization that promoted tourism in the
area but he was soon met with resistance. Should John continue to pursue the potential
target markets for his cannabis tour? How might he navigate the conflicts from within
the existing tourism community?
THE INDUSTRY—CANNABIS TOURISM

Although cannabis tourism was growing, city and state tourism boards still shied
away from promoting marijuana as an attraction. Marijuana lounges were against the
law, and hotels were quick to provide their no-smoking policies when someone asks
about using a marijuana vaporizer in their room or smoking a joint on a hotel balcony
(PotGuide.com).
According to the Colorado Pot Guide:
“Marijuana tourism is a huge industry in Colorado. While more and more
hotels and lodging providers are starting to accommodate the cannabis tourism
market segment, it is still early enough in the game that many commercial
lodging providers are still defining their policies or are hesitant to publicly market
themselves as marijuana friendly” (ColoradoPotGuide.com). As lodging properties
struggled with how to accommodate 420 guests, private accommodations were
filling the gap.
Although Durango had not seen dramatic growth in cannabis tours, other areas in
Colorado had. Cannabis tours were seen as a popular option to gain insight into the
industry and get a behind the scenes look into specifics into industry operations. Many
tourists who came to Colorado had no information about buying marijuana, or even
about consuming it. These tours could be a way to educate the new consumer. Tour
companies across the state offered visits to commercial marijuana grow operations,
glassblowing demonstrations, recreational dispensary visits and more.
The tour companies all offered unique tours with their own perspective on the can-
nabis industry in Colorado. Some tour companies primarily focused on group tours in
a large limo bus, while others, such as High Up Tours and Transportation, focused on
smaller groups or private concierge style services.
TOURISM IN DURANGO, COLORADO

In 2014, Durango received recognition for several awards. These awards included Top
Value Ski Spot in North America by Trip Advisor, Top Ten Western Town by True
West Magazine, and were included on the lists for Best Motorcycle Trip and Best U.S.
Cycling Town by USA Today’s Reader’s Choice.
There were two visitors’ centers in the area and nearly 150,000 visits from tour-
ists were recorded in 2014 in addition to over 450,000 visits to the tourism web-
site and over 40,000 requests for hard copies of the travel planner. Geographically,
Durango had identified that most visitors drive in from the key target markets from
other areas of Colorado (Denver, Grand Junction, Colorado Springs), New Mexico
(Albuquerque, Farmington, Santa Fe), Texas (Dallas, Houston, Austin, Amarillo,
Lubbock), and Arizona (Phoenix, Flagstaff, Sedona). The only origin cities with direct
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ourism 429
flights to Durango were Denver, Dallas, and Phoenix (Durango Area Tourism Office
Community Briefing 2015).
Local tourism data showed that Durango was continuing to be a popular
attraction. The number of enplanements had increased 0.81% from 191,980 passen-
gers in 2013 to 193,537 passengers in 2014 (La Plata County Airport). Another im-
portant tourist attraction in Durango was the Durango and Silverton Narrow Gauge
Railroad. Ridership on the train increased by 9.8% from 2014 to 2015 (Durango and
Silverton Narrow Gauge Railroad). Mesa Verde National Park, a little over an hour
from Durango, had 501,563 visitors in 2014, up 8.9% from 2013 (U.S. National Park
Service). Furthermore, Durango’s lodger’s tax revenue increased by 11.6% from 2013
to 2014 (City of Durango, Colorado).
THE CONSUMER AND MARKET DEMAND

As of January 1, 2014, recreational marijuana possession and sale were legal in
Colorado, within certain limits. All buyers must be 21, and the Department of Revenue
regulated all licensing. While Colorado residents may have medical marijuana cards
allowing them to purchase at a lower tax rate and at a greater number of locations, out-
of-state visitors must purchase from retail marijuana vendors exclusively. There were
different limits for sales to residents of the state of Colorado than to tourists from other
states or countries. In a single transaction from a recreational marijuana store, residents
may purchase 28 grams (or one ounce) while tourists may only purchase 7 ounces.
However, the possession of marijuana was the same for both residents and tour-
ists. No one may have more than 28 grams (or one ounce) in possession. This meant
that it is legal for tourists to visit more than one shop and make multiple purchases of
7 grams to add up to their 28 grams (or one ounce) of possession. However, tourists
must consume their purchases while they were in the state of Colorado as it was illegal
to cross state borders into a state that had not legalized recreational marijuana. For
both residents and tourists, it was illegal to consume marijuana on public property.
According to Carrie Roberts, founder of 420 Intel Agency, a Colorado-based mar-
ijuana mystery shopping company, the fastest-growing demographic shopping at mari-
juana dispensaries was 35- to 50-year-old women as well as people born from 1946 to
1964—the boomer generation. Roberts also reported that older adults had the dispos-
able income needed to purchase marijuana. “The average dispensary customer spends
$156 a month,” she said (Louisville BizBlog).
A study prepared for the Colorado Department of Revenue by The Marijuana Policy
Group found that purchases by out-of-state visitors represented about 44% of metro
area retail sales and about 90% of retail sales in heavily visited mountain communities
(such as Durango). Visitor demand was most prevalent in the state’s mountain counties,
where combined medical and retail marijuana sales more than doubled after retail sales
were legalized in January, 2014 (Market Size and Demand for Marijuana in Colorado).
Tourist destinations had a high ratio of visitors to residents, so the inception of
the retail market services a large amount of marijuana demand by tourists. In a 2015
study, on average tourists spent more money per transaction when purchasing recre-
ational marijuana ($104) compared to local residents ($65). While local residents had
smaller transactions and were mostly purchasing bud, tourists were more likely to pur-
chase a variety of products in addition to bud (hash, edibles, topicals, concentrates).
Tourists relied on the internet for information about where to purchase marijuana and
chose the store based primarily on location while residents relied on word-of-mouth for
information and were more concerned with service and product quality when deciding
on the store where they would make their purchases (Profiling Marijuana Tourists).
Retail prices in mountain communities were 50%–100% higher than prices for sim-
ilar marijuana strains in metropolitan areas such as Denver. The price difference was
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most pronounced for small purchases. For example, a single gram serving near Keystone,
Colorado (a resort mountain area) cost $14.00, whereas the same gram for an identical
strain cost $7.00 in Denver (Market Size and Demand for Marijuana in Colorado).
The Marijuana Policy Group study also estimated that annualized marijuana de-
mand for tourists was between 2.15 and 2.54 tons of marijuana (2014). However, this
figure was expected to increase as more counties and tax districts began permitting
retail store fronts. The study estimated that tourist demand for marijuana in the moun-
tain areas would double within the next couple of years (Market Size and Demand for
Marijuana in Colorado).
According to Harvard University economist, Jeffrey Miron, in 2016, another 5 to
10 states will likely consider legalization of recreational marijuana—possibly Arizona,
California, Delaware, Hawaii, Maine, Maryland, Massachusetts, Montana, Nevada,
New York, Rhode Island, and Vermont. Opinion polls showed that marijuana legal-
ization now commanded majority support across the country (Why Congress should
legalize pot).
If and when this happens, visitor demand in Colorado should begin to decline as
people are able to buy marijuana in other destinations or at home. But all of this is
uncertain and for the immediate future, demand should remain strong.
THE COMPETITION
There were plenty of companies in the area offering tours: Durango Artisanal Tours,
Durango Rivertrippers & Adventure Tours, Mild to Wild Rafting & Jeep Trail Tours,
Southwest Raft and Jeep, 4 Corners Whitewater, Durango Rafting Company, Outlaw
River and Jeep Tours, Flexible Flyers Rafting, Hermosa Day Tours, Mountain Waters
Rafting & Adventure Co Day Tours, Redmond Classic Tours, Wilderness Journey.
However, only one other had taken the step to offer cannabis tours (Durango Artisanal
Tours). John thought that with just one competitor, he could still profit from having a
“first mover advantage.” Durango Artisanal driving tours, which was similar to John’s
scenic tours, was priced from $140 to $160 per person (six person maximum, four person
minimum). John’s comparable tours were priced to give larger groups a large discount.
The price for one to two people was $349. Three to six people could do the tour for $399.
While John initially started High Up Tours to operate cannabis tours exclusively,
he soon realized that cannabis tours were only slowly growing in popularity and he
was missing opportunities to provide basic transportation services or include other tour
segments such as brewery tours and scenic tours. His competition in the basic transpor-
tation business included Animas Transportation, Buck Horn Limousine, Cortez Cab,
Durango Cab, Mountain Limo, Purgatory Resort, Redmond Classic Tours, Silverton
Shuttle, Telluride Express, Tellurides, and Wilderness Journeys. His target market was
difficult to define and he saw a wide range of demographics but regardless of their
age and income, cannabis was only an “appetizer” to these tourists and they wanted
to experience more of what Colorado had to offer during their visit. Based on this
observation, John made changes to his business model to offer a wider variety of tours
and transportation services. John saw an immediate financial return when he began to
promote brewery tours, scenic tours, and airport transfers. Within a few months, he
estimated that only 20% of his business was coming from cannabis tours.
THE CONTROVERSY
As a Destination Management Organization, The Colorado Tourism Office (CTO)
had been closely monitoring how the legalization of marijuana impacted tourism in
the state. The CTO acknowledged that marijuana tourists were a new market that
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ourism 431
encouraged the growth of marijuana tourism related businesses and opportunities for
entrepreneurs such as John.
Tours of growing facilities and stores were increasing around the state, as well as
companies that partnered with hotels to provide vaporizers to hotel guests wishing to
consume marijuana while staying at the hotel. Marijuana resorts were developing into re-
treats where tourists could participate in marijuana related activities during their vacation
after making their purchases at licensed retail stores. Despite the potential for growth,
there were marketing regulations in place that restricted the inclusion of marijuana pro-
motion in any marketing material that specifically targeted tourists from out of state.
In 2014, there were over 71 million visitors to Colorado bringing in $18 billion into
the economy and supporting more than 150,000 jobs (Colorado Budget Committee).
A concern of the CTO was that preliminary research showed that marijuana tourists
were a very small segment compared to other target markets, such as the family seg-
ment. Colorado offered opportunities to participate in outdoor recreation activities
year round and a shift toward the perception of Colorado as a marijuana tourism
destination had the potential to turn away their very profitable family target market.
After all, family oriented tourists could choose other states where recreational mari-
juana was still illegal as destinations for skiing in the winter and rafting and hiking in
the summer. Based on the desire to protect the future of the family friendly market, the
CTO took the stance that they would not actively promote recreational marijuana in
any of their initiatives to improve and increase tourism in the area.
Many towns and regions of Colorado had smaller Destination Management
Organizations that followed the lead of the CTO. Andrea Seid, the Sales & Marketing
Manager for the Durango Area Tourism Office (DATO), had the responsibility to iden-
tify target markets and reach them with marketing messages about why they should
visit the Durango area. Andrea was a respected professional who had worked in the
tourism industry in Durango for over a decade. She had been closely following what
was happening with marijuana tourism and had been careful to follow the direction of
the CTO and exclude any promotion of marijuana in her marketing material. Her mar-
keting budget came directly from the allocation of Lodger’s Tax and she was commit-
ted to aligning with the CTO’s position to be responsible about spending public dollars.
Andrea was also the gatekeeper for all businesses requesting a listing on the DATO
website. Many tourists searched online for information about the Durango area and
are at some point directed to the DATO website, as it contains a variety of useful
information to travelers. Having a listing on the DATO website was free to local busi-
nesses in the tourism industry. A relatively new and unique challenge that Andrea was
encountering was the job of evaluating whether businesses were related to marijuana
before approving their listing that could link tourists to a website with content promot-
ing marijuana.
John initially reached out to DATO to request that his business be listed and linked
on the website when he was primarily focused on cannabis tours. His request at that
time was denied because the DATO board was firm on their stance that they did not
actively promote marijuana tourism.
After being in operation for a few months, John started to realize that canna-
bis tours were a very small niche compared to other tourist activities offered in the
Durango area. He realized that recreational marijuana was only “an appetizer” for
most tourists; it was not the primary reason why they were visiting. He decided to
expand his business to also include scenic tours, brewery tours, and airport trans-
portation. He found that these services, despite facing area competition, brought in
more revenue than the cannabis tours had brought in. John figured this expansion and
rebranding would make him eligible for a listing on the DATO website. But when he
reached out to Andrea Seid, his request was denied again.
M14_COOK1670_06_GE_C14.indd 431 16/05/17 3:24 PM

JOHN’S DECISION
After a series of heated email exchanges John and Andrea eventually came to an agree-
ment that his business would be listed on the DATO website after all of the marijuana
related content was removed. John realized that this decision was bigger than just the
website listing. If the scenic tours, brewery tours, and airport transportation services
were more profitable, should John consider abandoning cannabis tours altogether and
put all of his resources into his other services? If it was worth it for him to remove the
marijuana content from his website in order to get a listing through DATO, was he
even in the cannabis tour business anymore?
It seemed like an easy decision but on second thought, he had been the first can-
nabis tour business to operate in Durango. He also thought that as more and more
people got used to the idea of legal marijuana, the stigma of it being dangerous and
anti-family might fade. Furthermore, more states were considering legalizing recre-
ational marijuana. This trend could eventually lead to federal legalization, which could
also change how people viewed marijuana use. He was not sure he wanted to give up
his “first in the market” position just yet.
Clearly, the next step for John was an important one. Should he continue to oper-
ate the cannabis side of his business or simply stick to brewery tours, regional scenic
tours, and airport pickup services?
M14_COOK1670_06_GE_C14.indd 432 16/05/17 3:24 PM

GLOSSARY
A Banquet A food and beverage function designed, priced,
à la carte A menu in which each item is priced and pre- and produced for a client usually for a single event or
pared separately. occasion.
Accommodations Loosely defined as establishments Banquet event order (BEO) A contract for a meeting
engaged primarily in providing lodging space to the or other special occasion that details the date, the
general public. sequence of events, special needs, foods and beverages,
Accounting A service activity of business designed to prices, and guaranteed quantities.
accumulate, measure, and communicate financial Benchmarks Performance measures that are used by simi-
information to various decision makers. lar types of businesses to monitor key operations.
Adventure tourism Tourism that involves activities with Berths Beds on a ship.
an above-average element of physical risk. Best available rate (BAR) A guaranteed price that the
Age cohort A generation affected by common guest is quoted the lowest available rate for a night’s stay.
experiences. Biometrics Technologies for identifying and verifying
Air Transport Association (ATA) A domestic association an individual’s physiological characteristics such as
that provides a format for discussing safety and service fingerprints, handprints, facial features, and irises.
issues and promotes the advancement of technology. Blogs Online journals composed of links and postings in
Airlines Reporting Corporation (ARC) The clearing- reverse chronological order.
house for receiving commission payments for airline Booking A reservation.
ticket sales. Botanical gardens Gardens dedicated to the preserva-
Airport code A three-letter designation used to identify tion, display, and study of growing plants.
specific airports. Break-even The level at which total sales equals total costs.
All-inclusive Single price for all or nearly all major ser- Brigade A team of foodservice employees, for example,
vices provided in a tour, resort, or cruise package. the service brigade (all service personnel) or the kitchen
Allocentrics See Venturers. brigade (all kitchen personnel), in which each member
Amenities Goods and services provided with accommo- is assigned a set of specific tasks.
dations that contribute to guest comfort. Bumping The process of denying boarding to airline
Amtrak The marketing name for the National Railroad passengers with confirmed reservations due to over-
Passenger Corporation, which is a combination of the booking (overselling) the flight.
passenger rail services of U.S. railroads. Business An organization operated with the objective of
Appropriations Funding provided through governmen- making a profit from the sale of goods and services.
tal entities. Business travel Travel-related activities associated with
Aquaculture The farming and cultivation of water commerce and industry.
plants, fish, and crustaceans, such as kelp, salmon, cat-
fish, oysters, and shrimp, in large quantities for human C
consumption. Call centers Centralized locations designed and managed
Attractions Natural locations, objects, or constructed to handle large volumes of incoming telephone inqui-
facilities that have a special appeal to both tourists and ries, in many cases on a 24/7 basis.
local visitors. CANRAILPASS Allows 12 days of economy class travel
Authenticity An item or activity that is original and gen- within a 30-day period anywhere VIA Rail goes in
uine to the origins of culture. Canada.
Available seat miles (ASMs) The distance traveled multi- Carrying capacity A key concept in environmental
plied by the number of seats available. impact analysis that relates to the amount of use an
environment is capable of sustaining under certain
B circumstances.
Banks of flights The process of coordinating flight Cartography The science or art of making maps and
schedules so that aircraft arrive and depart during interpreting mapped patterns of physical and human
similar time periods. geography.
433
Z01_COOK1670_06_GE_GLOS.indd 433 15/05/17 9:39 AM

434 Glossary
Catering A department within a restaurant, hotel, or Cooperative alliances Long-term relationships that
resort property that is charged with selling and planning enhance operating efficiencies, profitability, and mar-
special meetings and food and beverage events. ket share for all parties.
Chain operations Groups of properties that are affiliated Cost per key Cost to construct and furnish each hotel room.
with one another and have common ownership and/or Cost–benefit analysis A method used to determine the
management control and oversight. relative impact of a development, in which total costs
Circle-trip flight A flight plan that includes return to and total benefits are estimated and then compared.
city of origin but via different routing or airline. Cruise director The person who plans and operates pas-
Code-share An agreement allowing a regional/commuter senger entertainment and activities onboard a cruise ship.
airline to share the same two-digit code of a cooperat- Cuisine A French term pertaining to a specific style of
ing primary carrier in the computer reservation system. cooking (such as Asian cuisine), or a country’s food in
Commissary Central storage area where food and sup- general (such as Mexican cuisine).
plies are received and kept until requisitioned. Culinary The creative arts and crafts of preparing foods.
Commissions The percentage paid to a sales agent Culinary tourists/tours Travel for unique eating and
(travel agent) by tourism suppliers for booking travel drinking experiences in the context of the local culture.
arrangements. Culture The practices of a society; its customary beliefs,
Comparative advantage The benefits of one alternative social roles, and material objects.
relative to another. Curator Person in charge of a museum.
Computer reservation systems (CRSs) Computer hard- Customer Relationship Management Understanding
ware and software that allow travel agents to tap into customer needs and building relationships by analyz-
global distribution systems. ing databases of information from multiple sources
Concessionaires Individuals or companies who have been including websites, emails, social media, and other cus-
granted the right to provide a particular service such as tomer touch points to increase sales and profitability.
food service, guide service, sanitation service, or gift shop.
Concessions Retail outlets offering goods and services D
to customers in self-contained settings such as airports, Data Facts and figures.
museums, stadiums, and zoos. Data mining Analyzing information stored in computer
Concierge services Services provided by employees who databases with the help of statistical techniques to
specialize in meeting the special requests of guests and uncover hidden relationships and patterns.
provide guest services such as making reservations and Deck The equivalent on a ship to a floor or story of a hotel.
supplying information. Demographic segmentation Dividing consumer mar-
Configured (rooms) Rooms with a well-planned design kets based on demographic data such as age, educa-
developed to meet user needs for efficiency and tion, income, gender, religion, race, nationality, and
effectiveness. occupation.
Connecting flight A flight plan that includes a change of Demographics Characteristics used to classify consum-
aircraft and flight number. ers on the basis of criteria such as age, education,
Consolidators Wholesalers who buy excess inventory income, gender, and occupation.
of unsold airline tickets and then resell these tickets Demonstration effect Display of material goods and
at discounted prices through travel agents or, in some wealth by tourists leading to envy by local residents
cases, directly to travelers. based on either the perception or the reality of being
Consortium An affiliation of privately owned companies to less fortunate.
improve business operations and gain the necessary vol- Dependables Travelers who seek the comforts of famil-
ume of business that can lead to improved profitability. iar surroundings.
Constituent groups Subgroups of citizens with a set of Destination image The detailed impression an individual
common needs or wants. or target segment has of a specific destination.
Consumer behavior The study of consumer character- Destination Marketing Organizations (DMOs) Organi-
istics and the processes involved when individuals or zations that are dedicated to promoting tourism activi-
groups select, purchase, and use goods, services, or ties in a town, city, county, province, or region.
experiences to satisfy wants and needs. Destination resorts Properties that are relatively self-
Contribution margin What is left of the sales price after contained and provide a wide range of recreational
deducting operating costs. and other leisure-time activities.
Convenience charges Additional charges added to basic Destination vision An inspirational portrait of the ideal
services that are designed to increase profitability. future that the destination hopes to bring about at some
Convention and visitors bureau An organization whose defined future time (usually in 5, 10, 20, or 50 years).
mission is to develop tourism to an area by attracting Direct flight A flight plan that includes one or more inter-
both professional and leisure travelers. mediate stops but no change of aircraft or flight number.
Convention center A property developed to serve the Disembark To go ashore from a ship.
special needs of groups, especially regarding meetings Disposable income Household income after paying
and trade shows. taxes that is available for personal use.

Glossary 435
Distressed inventory Tourism services that have not Eurailpass Allows unlimited travel for non-European
been sold as the date of use approaches. tourists for varying periods of time throughout Austria,
Docent A museum guide. Belgium, Denmark, Finland, France, Germany, Greece,
Domestic independent tour (DIT) Customized domestic Ireland, Italy, Luxembourg, the Netherlands, Norway,
tour including many elements, designed and planned to Portugal, Spain, Sweden, and Switzerland.
fulfill the particular needs of a traveler; may be designed Events Special occasions and scheduled activities.
by a travel agent or by a wholesaler in consultation with Exchange rate The number of units of one currency nec-
the traveler’s agent. essary to be exchanged to obtain a unit of another cur-
Dynamic packaging The ability to aggregate multiple rency; for example, 121 Japanese yen for U.S. $1.00.
tourism service supplier offerings (e.g., air, hotel, and Expatriate A citizen of one nation who lives in a nation
car) in real time into a package. of which he or she is not a citizen.
Expected quality The level of quality that a consumer
E predicts he or she will receive from a good or service.
Ecological capacity The maximum level of users that Expected script The set of steps and statements that a
an area can accommodate before ecological damage is guest expects to occur during a service encounter.
incurred. Export A good or service produced in one country and
Ecological tourism (more commonly called ecotour- purchased by a resident of another country; the oppo-
ism) A form of tourism that focuses on environmen- site of “import.”
tal and cultural preservation. Extreme tourism A subset of adventure tourism; encom-
Economics The study of the choices people make in passes activities that involve above-average elements of
using scarce resources to meet needs. physical challenge and risk.
Economies of scale Savings in time, money, or other
resources organizations enjoy as the result of purchas- F
ing and/or selling in large quantities, specialization at Facilitating goods Tangible items that support or accom-
a particular job or function, and the use of specialized pany a service being provided.
machinery. Fairs Temporary gathering places for the exhibition of
Ecotourism A form of tourism that focuses on environ- products and services, often accompanied by entertain-
mental and cultural preservation. ment and food and beverage services.
Ecotourists Leisure travelers who prefer to visit less pop- Familiarization trips (also called “fams” or “fam trips”)
ular, more primitive destinations. Trips offered by governmental tourism agencies,
Ecotravelers Travelers who visit sensitive, natural, and hotels, resorts, and tour operators at low or no cost
cultural environments to observe and learn about a to acquaint travel salespeople (typically travel agents)
very different culture and environment and participate with the products and services they offer.
in low-impact sports activities. Federal Aviation Administration (FAA) Agency within
Efficient foodservice response (EFR) Partnership agree- the DOT charged with ensuring air safety and promot-
ments created among manufacturers, distributors, and ing the growth of aviation.
foodservice operators to lower food costs and improve Fee simple Right of ownership evidenced by the trans-
the quality of service. fer of a certificate of title. The buyer has the right to
Elastic demand A change in the quantity of goods or services sell, lease, or bequeath the property or interest (as in a
used in a proportion that is greater than changes in prices. timeshare).
Embark To go onboard a ship. Festival A time of celebration, with scheduled activities.
Employee turnover A number of employees who leave Feudal system A system of political organization, prevail-
their jobs because they intentionally miss work, quit, ing in Europe from the 9th to about the 15th century, in
or are terminated. which ownership of all land was vested in kings or queens.
Enterprise resource planning (ERP) system A system Financial resources The amount of money available for
designed to combine all information sources, subsys- a given project through the use of debt and equity.
tems, and processes from various locations into one uni- Fleet utilization Percentage of time transportation vehi-
fied system. cles are used for revenue-producing purposes.
Enterprise systems Computer systems that provide for Focus group An in-depth interview about a topic
collaboration and communication of data storage and among 8 to 12 people, with a researcher (called a
retrieval across multiple departments and organiza- “moderator”) leading the discussion.
tional units. Folio A form used to record a guest’s hotel.
Entrepreneurial Assuming the risks of a personally Foreign independent tour (FIT) Customized foreign tour
owned business. including many elements, designed and planned to ful-
Environmental capacity The limit on the number of fill the particular needs of a traveler; may be designed
users that an area can accommodate before visitors by a travel agent or by a wholesaler in consultation
perceive a decline in the desirability of the area. with the traveler’s agent.
Escorted tour An all-inclusive tour with a structured Franchise A license to operate a tourism service busi-
itinerary and a guide who accompanies the guests. ness such as a travel agency or hotel with the benefit of

436 Glossary
trademarks, training, standardized supplies, operating Inclusive price A single price for a package of services
manual, and procedures of the franchiser. A contrac- such as accommodations, food, and activities.
tual agreement providing for the use of a recognized Independent properties Facilities that are owned and
brand name, access to a central reservation system, operated as single units with no chain affiliation or
training, documented operating procedures, quan- common identification.
tity purchasing discounts, and technical assistance in Independent tour A tour that allows the flexibility to
return for royalties and fees. travel independently while taking advantage of prear-
ranged services and rates based on volume discounts.
G Induced information Information and messaging that is
Galley The kitchen or food preparation area of a ship. controlled by the supplier.
Geographic segmentation Dividing consumer mar- Inelastic demand A change in the quantity of goods or
kets along different geographical boundaries such as services used that is not in direct proportion to changes
nations, states, and communities. in prices.
Geotourism Tourism that sustains or enhances the Information technology Computer systems that provide
geographic character of the place being visited, for the storage and retrieval of data.
including its environment, culture, aesthetics, heritage, Infrastructure The foundation utilities and other systems
and the well-being of its residents. necessary for an economy, such as roads, electricity,
Global distribution systems (GDSs) Worldwide interor- and water and sewage systems.
ganization information systems that travel agencies use Intermediary Firms that help tourism suppliers locate
in selling tourism services. customers and make sales to them, including tour
Gross gambling revenues (GGR) The amount wagered operators and travel agencies.
minus the winnings returned to players. Intermodal A trip requiring the use of two or more
Gross registered tons (GRT) A measure of the interior forms of transportation.
size of a ship determined by volume of public space. International Air Transport Association (IATA) Associa-
Ground transfers Short-distance transportation between tion for airlines offering international air service that pro-
service providers, most frequently provided as part of vides a means of resolving problems for mutual benefit.
a tour. Involuntarily denied boarding A situation that occurs
when airline passengers with confirmed reservations
H are denied boarding on scheduled flights due to over-
Hard ecotourist Physically active travelers with a strong booking. Passengers may either voluntarily give up
environmental commitment who seek specialized trips their reserved space or be involuntarily denied board-
with an emphasis on personal experiences. ing in exchange for compensation.
Heritage attractions Places, structures, and activities Itinerary A detailed schedule of a trip.
with historical and cultural significance.
Heterogeneous Having differing characteristics and needs. J
Homogeneous Having similar characteristics and needs. Joint venture Combined efforts of two or more partners,
Host community A town or a city that welcome visitors usually organizations.
and provide them with desired services.
Hosted tour A tour in which a host is available at each L
major tour destination to welcome guests, solve prob- Leakage Purchasing power that is spent on imports to
lems, and answer questions. an area, resulting in a transfer of income out of the
Hotel personnel All individuals responsible for the care local economy.
and service of cruise ship passengers. Learning curve The rate at which people learn over time.
Hub-and-spoke system The primary airline route pattern Learning organization An organization committed
in the United States. By designating primary hubs, airlines to identifying best practices and creating systems to
are able to funnel traffic into these centers to feed their achieve high-quality standards.
trunk point-to-point routes between major market cities. LEED An alliteration for Leadership in Energy and
Human (cultural) geography The human activities that Environmental Design, a certification program spon-
shape the face of a location and shared experiences, sored by the nonprofit U.S. Green Building Council
including the cultural aspects of language, religion, and recognizing sustainable practice in building design,
political and social structures. construction, and renovation.
Leg The segment of a flight between two consecutive
I stops.
Import A good or service purchased in one country but Legacy carrier Established and comprehensive carriers offer-
produced in another country; the opposite of “export.” ing varying classes of services with global networks that
Incentive tour operators Tour operators who specialize in include alliance partners, which allow passengers to earn
organizing, promoting, and conducting incentive tours. and redeem frequent-flier miles across these networks.
Incentive travel Motivational programs designed to create Leisure activities Activities performed during one’s free
competition, with the winner(s) receiving travel awards. time away from work.

Glossary 437
Leisure travel Travel for personal interest and enjoyment. venues. Each revenue center at these destinations could
Lifestyle A mode of living that is identified by how peo- operate as a separate business venture.
ple spend their time (activities), what they consider Microsegmentation The process of identifying and serv-
important in their environment (interests), and what ing small subsegments of the market.
they think of themselves and the world around them Missionary sales Sales calls made by individuals to retail
(opinions). travel agencies and other tourism industry intermediaries
Limited stakes Legislative limits placed on the dollar amount to answer questions and educate them about the compa-
that can be wagered on any single bet (typically $5). ny’s services so that they may be sold more effectively.
Line of credit An agreement with a bank in which loans Model A simple representation showing how important
are automatically made up to an established limit. features of a system fit together.
Load factor The number of revenue passenger miles Multiplier concept The additional economic activity that
(RPMs) divided by the number of available seat miles results when money is spent and re-spent in a region
(ASMs). on the purchase of local goods and services.
Lodging Facilities designed and operated for the pur- Museum According to the International Council of
pose of providing travelers with a temporary place to Museums: a non-profit-making, permanent institution,
stay. in the service of society and its development, and open
to the public, which acquires, conserves, researches,
M communicates, and exhibits, for the purposes of
Management The distinct processes of planning, orga- study, education, and enjoyment, material evidence of
nizing, directing, and controlling people and other humans and their environment.
resources to achieve organizational objectives effi-
ciently and effectively. N
Management contracts Operating agreements with man- National monument A landmark, structure, or other
agement companies to conduct day-to-day operations object of historic or scientific interest.
for a specific property or properties. National park A large natural place having a wide vari-
Management information systems (MIS) Computer- ety of attributes.
based systems designed to collect and store data and National preserve An area in which Congress has per-
then provide information for planning, decision mak- mitted continued public hunting, trapping, and oil/gas
ing, and problem solving. exploration and extraction.
Market segmentation Dividing a broad market into National scenic trail A linear parkland.
smaller and distinct groups of buyers—each group Nature-based tourism Travel to unspoiled places to
with similar needs, characteristics, or behaviors. experience the natural world.
Market share The percent of the total market for a good Night audit An accounting function performed in hotels
or service that a single company has. at the close of each business day to ensure the correct
Marketing communications Any communication posting of all revenues.
between a marketer and a consumer. Nonprofit tourism association An organization that
Marketing concept An overall organizational philoso- exists to support the tourism industry of an area and
phy that is focused on understanding and meeting the often promotes the area as a destination.
needs of customers. Nonstop flight A flight between two cities with no inter-
Marketing mix Those things that an organization can mediate stops.
do to influence the demand for its goods or services.
It consists of four variables, often called the four Ps of O
marketing: product, price, place, and promotion. Objective A specific target for which measurable results
Markup Adding a percentage to the cost of a good or can be obtained.
service to arrive at a selling price. Occupancy rate Ratio comparing the total number of
Mass customization The production of a good or service rooms occupied for a given time period to the total
to fulfill the unique needs of an individual buyer. number of rooms available for rent.
Mass tourism Twentieth-century phenomenon whereby One-level distribution channels The simplest form of
the working and middle classes began traveling in large distribution, in which the supplier deals directly with
numbers for leisure purposes. the consumer without the services of intermediaries.
Mature travelers People aged 55 and older; also called One-way flight A flight plan that includes no return to
“senior citizens.” city of origin.
Medical tourism Travel to other countries to receive Open-jaw A round-trip that allows the passenger to uti-
medical treatments. lize different points of origin or return.
Meeting planner An individual who specializes in plan- Optimal arousal theory Level of arousal or level of
ning and coordinating all the details of meetings, con- activity at which different segments of tourists feel
ferences, or events. most comfortable.
Megaresort A destination resort containing multiple Orientation Also called “on-boarding” is a process
facilities and world-class attractions and entertainment designed to help new employees become acquainted

438 Glossary
with the organization and understand the expectations Properties Individual accommodations and lodging
the organization and their supervisor have for them. facilities.
Overbooking Accepting more reservations than there Property management system (PMS) A unified system
is capacity to serve those customers making the used to manage sales and marketing, reservations, front
reservations (e.g., accepting reservations for more office operations, POS systems, telecommunications,
passengers than there are available seats on an back office operations, and revenue management.
aircraft or for more rooms than there are in a hotel). Psychocentrics See Dependables.
Confirming more reservations for rooms than can be Psychographic segmentation Dividing consumer markets
provided during a specified time period. into groups based on lifestyle and personality profiles.
Overrides Additional bonuses offered to travel agen- Psychographics Consumer psychological characteristics
cies beyond their usual commission to encourage the that can be quantified, including lifestyle and person-
agency to sell more tickets. ality information.
Public/private organizations Organizations made up
P of private and public members, usually to coordinate
Pacific Rim The land masses that have a Pacific Ocean efforts between government and private businesses.
coastline. Purchase order A contract that specifies the item(s)
Passenger facility charge A charge added to airline tick- wanted, including a brief description of quality and
ets for enplanement. The monies collected are to be grade, the number desired, and the price.
used for airport improvements. Purser A ship official responsible for papers, accounts,
Pension A small inn or boarding house similar to a B&B. and the comfort and welfare of passengers.
Per diem Maximum travel expense amount that will be Purveyors Food-service supplier.
reimbursed on a per day basis. Push The act of pushing an aircraft away from the gate
Perceived quality The level of quality a consumer perfor departure. The term is used to indicate the length
ceives following the consumption of a good or service. of time necessary to unload, fuel, service, and reload
Perpetual inventory A system of tracking inventory on a an aircraft between time of arrival and departure.
continual basis so that current information on the level
of stock is always available. R
Personal selling A communications process that includes Rack rate The standard quoted rate for one night’s
discovering customer needs, finding the appropriate lodging.
services to meet these needs, and then persuading cus- Real estate tourism Travel time spent gaining in-depth
tomers to purchase these services. knowledge and perspectives about the area from
Physical capacity The number of users that can be scheduled meetings with local experts while searching
accommodated in an area. out potential investment opportunities.
Physical geography The natural features of our planet, Receptive service operator (RSO) (ground operator) A
including such things as climate, land masses, bodies of local company that specializes in handling the needs of
water, and resources. groups traveling to its location.
Pilgrimage Travel to a holy place or shrine. Recreational activities Activities and experiences people
Plate presentation The process of arranging menu offer- pursue for personal enjoyment.
ings in a visually appealing fashion. Reduction The result of boiling a liquid (usually stock,
Point-of-sale (POS) systems Systems designed to record wine, or a sauce mixture) rapidly until the volume is
and track customer orders, process debit and credit reduced by evaporation, thereby thickening the consis-
cards, manage inventory, and connect to other systems tency and intensifying the flavor.
in a network. Referral organizations Associations formed to conduct
Point-to-point Direct travel between two destinations. advertising and marketing programs and generate res-
Policy A general statement that provides direction for ervations and referrals for member properties.
individuals within an organization. Regional geography The components of geography that
Prime vendor agreements Agreements directing a major- focus on regional landscapes, cultures, economies, and
ity of purchases to one purveyor. political and social systems.
Privatization The action of converting a government- Rental pools Groups of condominium units that are
owned business to private ownership. released by their owners for rental purposes and are
Product-related segmentation Dividing consumer mar- managed by lodging companies.
kets according to characteristics such as the amount Repositioning cruise The transfer of a ship from one
of use or benefits consumers expect to derive from the cruising area to another to take advantage of the sea-
service. sonality of demand.
Professional travel Travel by individuals to attend meet- Research The systematic investigation of a topic, often
ings and conventions. including the collection of information for a set goal.
Profits Revenues in excess of expenses representing the Resort destinations Communities or areas that contain
financial performance and the ultimate measure of the attractions, entertainment, and supporting facilities
financial success of a business. needed to draw and host tourists.

Glossary 439
Resorts Destination locations that are distinguished by Shopping tourism Shopping is the main purpose of the trip.
the combination of attractions and amenities for the Shoulder season The period of time between high and
express purpose of attracting and serving large num- low or closed seasons when demand for services
bers of visitors. decreases.
Restitution An amount of money or other item given to Single supplement The additional charge added to the
make up for some mistake or wrongdoing. price of a tour or cruise when a traveler does not share
Return on investment (ROI) A measure of management’s accommodations with another traveler; often, 25% to
efficiency, showing the return on all of an organization’s 100% of the double occupancy rate is added to arrive
assets. at a single occupancy rate.
Revenue management (yield management) The process of Single traveler A person who lives alone and travels with
allocating the right type of capacity to the right kind of or without a companion.
customer at the right price so as to maximize revenue Slow tourism Trips with a slower pace during which
or yield. travelers step back from everyday experiences, allow-
Revenue passenger miles (RPMs) One seat on an ing time and opportunities for immersion.
airplane, railroad, or motorcoach traveling one mile SMERF An acronym for the market comprising social,
with a revenue-producing passenger. military, educational, religious, and fraternal groups.
Right-to-use A type of lease in which legal title does not Social carrying capacity The number of outsiders to an
pass to the buyer. The buyer has the right to occupy area that can be accepted without having damaging
and utilize the facilities for a particular time period. psychological effects on the locals of the area.
Rolling hubs Connecting flights are spread over longer Social networking Individuals tied together by a com-
periods of time to reduce congestion and facility and mon interest or theme who share bookmarked Web
equipment demands. links and conversations.
Round-trip flight A flight plan that includes return to Society A community, nation, or broad grouping of peo-
city of origin via identical routing. ple who have common traditions, institutions, activi-
Royalties Payment (usually a percentage of sales) for the ties, and interests.
use of a franchiser’s brand name and operating systems. Soft ecotourist Physically passive travelers with moderate
Russian service A style of service in which the entrée, environmental commitment who seek multipurpose trips
vegetables, and starches are served by the waitstaff with an emphasis on interpretation and physical comfort.
directly from a platter to a guest’s plate. Spa resorts A resort property dedicated to fitness and
the development of healthy lifestyles.
S Space ratio A statistical measure of the GRT of a ship to
Seat (table) turnover The number of successive diners the number of passenger it can carry.
sitting in one seat or at one table during each dining Special-interest tourism (SIT) Tourism undertaken for a
period, breakfast, lunch, and dinner. distinct and specific personal reason.
Secondary seasons Periods when tourism activities are Specification A detailed written description of a proce-
either increasing toward peak levels or declining from dure or ingredient.
peak levels; also called “shoulder seasons.” Spoke routes Air service provided from smaller sec-
Service encounter A single episode during which a cus- ondary markets to feed passengers into primary hub
tomer and service personnel interact; often also called markets.
a “moment of truth.” Sport tourism Travel to participate in, watch, or visit
Service expectations The quality level of the five dimen- sporting events, venues, and attractions.
sions of service expected by a customer. Sports tourism visitors People who travel to participate
Service guarantee Providing assurances in writing that in or view sporting activities.
the level of service promised is provided and, if not, Standard A predetermined procedure or amount of an
what specific responses will be made in correct to the ingredient.
service failure and make the customer whole. Staterooms Guest rooms on a ship. Also called cabins.
Service recovery The process of reversing a service problem. Station A designated work area or department in a
Service script Learned patterns of behavior that guide kitchen.
interactions during a service encounter. Stock The strained liquid that is the result of cooking
Services The performance of actions or efforts on behalf vegetables, meat, or fish and other seasonings and
of another. ingredients in water.
Servicescape The physical (tangible) aspects of the ser- Strategic grouping Groups that share common interests.
vice encounter. Subcontracting The hiring of another organization to
Sex tourism Travel to a foreign country usually by males perform one or more operational functions or services.
from developed countries to underdeveloped or devel- Subsegments A group within a larger market segment;
oping countries for the purpose of engaging in sex, sometimes called a “microsegment.”
especially with children. Superstructure The facilities needed to serve the spe-
Ship personnel All individuals responsible for the safety cific needs of tourists, such as hotels, restaurants, and
and navigation of cruise ships. attractions.

440 Glossary
Supervisors Individuals who are responsible for day-to- Travel clubs Membership organizations designed to
day operations, other employees’ job performance, and serve the needs of last-minute leisure travelers at bar-
provide recommendations to managers on personnel gain prices.
issues. Triple bottom line Measuring tourism success in terms
Sustainable tourism Tourism activities and development of maximizing positive impacts and minimizing
that do not endanger the economic, social, cultural, or negative impacts on the economy, environment, and
environmental assets of a destination. local residents.
Trunk routes Point-to-point air service between primary
T hub markets.
Table d’hôte French term referring to a menu offering a Two-level distribution channels Distribution channels in
complete meal at a fixed price (prix fixe). which an additional channel member, such as a travel
Target market (target segment) A group of people agent, serves as an intermediary between the supplier
sharing common characteristics that an organization and the consumer.
attempts to serve by designing strategies to meet the
group’s specific needs. U
Technology The use of new knowledge and tools to U.S. Department of Transportation (DOT) Organiza-
improve productivity and systems. tion within the U.S. government charged with estab-
Teleconferencing A meeting that allows people to lishing the nation’s overall transportation policy,
remain in several locations but come together and including highway planning, development, and con-
communicate through a combination of television and struction; urban mass transit; railroads; aviation; and
telephone connections. waterways.
Terminals Facilities where passengers embark and dis- Upgrades Receiving a better class of service or facility
embark transportation services. than was paid for, such as moving from coach to
Three-level distribution channels Distribution chan- first class.
nels in which two or more channel members, such as Urban tourism Tourism that takes place in large cities,
tour operators or wholesalers serve as intermediaries where hotels and other facilities and services have
between the supplier and the consumer. become an integral part of urban activities.
Timeshare Either ownership or the right to occupy and
use a vacation home for a specific period of time. V
Tour A product that includes at least two of the follow- Venturers Travelers who seek adventure.
ing elements: transportation, accommodations, meals, Venue The location of an event or attraction.
entertainment, attractions, and sightseeing activities. VFR Visits to friends and relatives.
It can vary widely in the number of elements included VIA Rail Canada The marketing name for Canada’s
and in the structure of the itinerary. passenger train network, which is a combination of the
Tour operator A business entity engaged in the plan- passenger rail services of Canadian railroads.
ning, preparing, marketing, making of reservations, Virtual conferencing Meetings among geographically
and, at times, operating vacation tours. dispersed individuals using video, sound, and data
Tour package Two or more travel services put together transmission technologies so that participants can see
by a tour operator, such as air transportation, accom- and interact with each other.
modations, meals, ground transportation, and Vocation tourism Trips during which travelers take time
attractions. to experience possible new careers before actually
Tourism The temporary movement of people to desti- making career changes.
nations outside their normal places of work and res- Voluntourism A trip that combines travel activities with
idence, the activities undertaken during their stay in charitable work.
those destinations, and the facilities created to cater to
their needs. W
Tourism planning A continual process of research- and- Wildlife tourism Travel to observe animals, birds, and
development decisions to create and sustain tourism in fish in their native habitats without altering their
a region. behaviors.
Tourism policy A master plan formulated by a govern- World Heritage Sites Sites identified for preservation
ment (national, state/provincial, local) to aid in guid- because of special cultural or heritage interest by the
ing the development of sustainable tourism industries United Nations Educational, Scientific and Cultural
within its jurisdiction. Organization (UNESCO).
Tourism Satellite Accounts Methodological framework
Y
that uses common classifications and definitions to
Yield The amount or quantity produced or returned
measure economic impacts of tourism on a national after the preparation, processing, or cooking of a prod-
basis. uct or recipe.
Travel agent A sales specialist in tourism services.

INDEX
AAA. See American Automobile Association Alcoholic beverages, 233–235. See also Banff National Park, 248, 335, 347
Accessibility Food and beverage Bankruptcy, of airlines, 298
of cruise ships, 390 Alliances, between airlines, 400–401 Banks of flights, 182
for mature travelers, 389–390 All-inclusive tour, 107 Banquet event order (BEO), 227–228
Accommodations, 212 Allocentrics, of tourists, 58–59 Banquets, 227
high-end, 197 Amenities, of timeshares, 195 BAR. See Best available rate
hotels as, 198–200 American Airlines, 178–179 B&B. See Bed and breakfasts
lodging as, 191–192, 198 American Automobile Association (AAA), Beacons, for bluetooth, 137
in service packages, 191 173 Bed and breakfasts (B&B), 191–192, 194, 240
Accounting, in finance, 41 American Express, 108 Bell Laboratories, 143
Activities. See also Sporting activities Americans with Disabilities Act, 389 Belongingness, as need, 57–58
entertainment, 242–243, 242f, 243t Amtrak, 169–170 Benchmarks, in classification systems, 201
leisure, 241, 262–263 Amusement parks BEO. See Banquet event order
recreational, 241 as commercial attractions, 252–253 Berths, on cruise ships, 285
tourism, 317–318 revenue of, 254t Best available rate (BAR), 210–211
Adults-only communities, 386 Appian Way, 24 Best Western, 206
Adventure tourism, 368, 392–393, 393t Appropriations, for National Park Service, Beverages. See also Bars; Food and beverage
Adventurous/education traveler, 64 249 alcoholic, 233–235
Affect, in destination image, 330 Aquaculture, 219 automation of, 233–234
Age cohort, 385 Aquariums, 246–247 operations, 233–234
Airbnb, 194 ARC. See Airlines Reporting Corporation profits from, 233
Airbus, 300–301 Arden House, 197 BIE. See International Bureau of Exhibitions
Airline Deregulation Act (1978), 179 Arrivals, at destination, 317 Biometrics, 403
Airlines, 21, 68, 398–399 ASEAN. See Association of Southeast Asian Blogs, 123, 142
alliances between, 400–401 Nations Bluetooth, beacons for, 137
bankruptcy of, 298 ASMs. See Available seat miles Booking, Internet for, 194
discounter, 293–298 Association of Southeast Asian Nations Botanical gardens, 249
distribution in, 139–140 (ASEAN), 401 Boutique hotels, 203
hub-and-spoke system of, 181–183, Assurance, of services, 89 Break-even, in occupancy rates, 210
293–294 ATA. See Air Transport Association Brigade system, for foodservice operations, 224
industry, 293–301 Atlantis Resort, 287t Buffalo Statler Hotel, 198–199
as intermodal, 165 Atrium, of hotels, 200 Bumped, 185
major, 293–298 ATSA. See Aviation Transportation Security Bus. See Intercity bus travel
in online distribution, 139–140 Act Business
operating expenses of, 179–180, 180f Attraction. See also Heritage attractions hospitality, 18
passenger, 178–179, 183–185 botanical gardens as, 249 of tourism, 39–43, 336
point-to-point, 294 demand for, 245 Business travel
profits of, 298 employees of, 244–245 needs of, 69
regional, 182 entertainment, 243t segment, 68–70
regulations on, 295–296 event as, 243 in tourism industry, 28, 65, 68–69, 69t
revenue management of, 144–146, 297 industrial, 352 virtual conferencing and, 390–391
risk factors for, 297 line of credit for, 245 Business traveler, 65
rolling hubs for, 182–183 live entertainment as, 260 Bus Regulatory Reform Act (1982), 175
after September 11, 297–298, 300 natural, 241, 248–249, 346, 368
terminology of, 183 seasons for, 244, 271 CAB. See Civil Aeronautics Board
tickets, online, 299 for tourists, 243 Cab drivers, 89
in tourism industry, 178–183 trains as, 172 Call centers, 109
upgrade, 69 Authenticity, in culture, 353 Campers, 197–198
Airlines Reporting Corporation (ARC), Autobahn, 172 Campgrounds, 197–198
114, 169 Automation, in beverage operations, Canadian Tourism Commission, 279, 288
Air pollution, 347 233–234 CANRAILPASS, 170
Airport Automobiles Capacity, in revenue management, 143
concessions, 184 highway and, 172–175 Career, in tourism, 17–18
employees of, 185 in transportation, 172–175, 399 Carême, Marie-Antoine, 221
profit of, 184 Available seat miles (ASMs), 145, 179 Caribbean Islands, 320
terminals, 183 Aviation Transportation Security Act Carnival, 121
Airport code, 183 (ATSA) (2001), 295–296 Car rental companies, 69, 173–175
Air Transport Association (ATA), 178 Carrying capacity
Air Transportation Safety and System Baby boomers, 385–387 determining, 344–346
Stabilization Act (2001), 295 Back-of-the-house services, 208 of environment, 342–344
Á la carte restaurant, 221 The Bacterial Danger Zone, 232 physical, social, 343
441
Z02_COOK1670_06_GE_IDX.indd 441 06/06/17 5:38 PM

442 Index
Cartography, 30–32 Cost-benefit analysis, of tourism, 327 Demographic segmentation, 63

Carver, George Washington, 219 Cost per key, 210 Demonstration effect, 353–354
Casino, 328 Credit cards, 27, 108 Department of Homeland Security, 295
gambling, 254–255 Crime, 355 Department of Transportation, U.S.
resorts, 286–287 Crisis events, 326, 403 (DOT), 181
revenue of, 257t CRS. See Computer reservation system Dependables, in travel, 58–59, 61
Catering, 227 CRSs. See Central reservation systems Design, 346
CBT. See Community-based tourism (CBT) Cruise director, 281 of menus, 222–224, 224t
Center for Disease Control and Prevention, Cruise lines, 110, 137, 191, 272, 326 Destination, 21–22, 289
233 future of, 397–398 arrivals at, 317
Central reservation systems (CRSs), 140 inclusive price of, 282, 285 classifying, 269–273, 270f
Certification, environmental passengers, 280, 282, 285–286, 398 on continents, 30t
for ecotourism, 371–373 pricing, 286 geography of, 268
LEED as, 375–376 profits of, 286 immersion in, 385
Certification for Sustainable Tourism repositioning, 168 pilgrimages to, 273
(CST), 372 ship categories of, 280–281 positioning of, 331
Chain operations trends in, 286 in psychocentric-allocentric model,
of hotels/motels, 202, 205–206 for vacations, 279 58–60
marketing for, 206 Cruise ships. See also Megaships resorts, 269, 272
ownership of, 205–206 accessibility of, 390 seasonality of, 271
parent companies of, 205 berths on, 285 secondary seasons of, 274
Chambers of commerce, 122 categories of, 280–281 strategic grouping of, 271
Channels, distribution. See One-level director of, 281 tourism supplier and, 268
distribution channels; Three-level distri- galley on, 285 urban areas as, 287–288
bution channels; Two-level distribution itinerary of, 185 vision, 330
channels purser of, 281 weather in, 272–274
Charter/tour groups, motorcoach for, 175 as resorts, 281 Destination image, 330–331
Checkout penalties, 212 space ration of, 281 Destination marketing organizations
Circle-trip, 183 staff of, 281 (DMOs), 330
Civil Aeronautics Board (CAB), 179, 181 staterooms on, 282 Diners Club, 27
Classification systems, for hotels, 200–201 weather patterns and, 282 Direct service, 183
Client, in personal selling, 124–126 Crusades, 25 Disabilities, 389–390
Climate change, 348, 363–364. See also CST. See Certification for Sustainable Tourism Discounter airlines, 293–298
Environment; Weather patterns CTO. See Colorado Tourism Office Disembarking, 280
Closing, in personal selling, 125, 125t Cuisine, 219, 221 Disney, 61, 92, 125, 325
Code-share agreement, 182 La Cuisine Classique (Carême), 221 as amusement park, 252
Coffee, 235 Culinary as resort, 195
Cognition, in destination image, 330 heritage, 220–228 Distillation, 233
Commercial attractions history, 219 Distressed inventory, 68
amusement parks as, 252–253 tours, 218, 228, 235–236 Distribution
theme parks as, 253–254 Cultural geography. See Human geography airlines and, 139–140
Commissary, 225 Culture, 349. See also Multiculturalism channels, 108–120
Commissions authenticity in, 353 of hotels, 140–141
for intermediary, 108 company, 153 intermediary in, 140
by travel agents, 113 society and, 350–352 Internet in, 139–141
Communication in tourism, 37–38, 43, 350–356 multiple, 121
Internet in, 138–139, 139t Curators, of museums, 246 DITs. See Domestic independent tours
marketing, 88 Currency, exchange rate of, 319 DMOs. See Destination marketing
Communication technology, 391 Customer. See also National Customer organizations
Community-based tourism (CBT), 326 Satisfaction Index Docents, in museums, 246
Commuter airlines. See Regional carriers employee and, 94–95 Domestic independent tours (DITs), 116
Company culture, 153 loyalty, 179 Domestic travel, 320–322
Comparative advantage, in economics, 318 needs, wants of, 94–95 DOT. See Department of Transportation,
Computer reservation system (CRS), 105 Customer relationship management, 123 U.S.
Conation, in destination image, 330 Customer satisfaction Durango Area Tourism Office (DATO),
Concessionaires, 249 quality and, 90–91 431–432
Concessions, 184 service for, 98 Durango & Silverton Narrow Gauge
Concierge service, of hotels, 201 Customization, mass, 396–397 (D&SNG), 417–420
Condos, 195–197 Dynamic packaging, 118, 144
Configuration, of rooms, 397 Dark Ages, 219
Connecting service, 183 Dark sky tourism, 347 Ecological capacity, 343
Consolidation, in tourism industry, 399–401 Data, 20, 126, 136–137 Economic impact analysis (EIA), 323–325,
Consolidators, 117 Data mining, 136t, 137 408
Consortium, of travel agencies, 114 DATO. See Durango Area Tourism Office Economics, 22
Constituent groups, 335–336 Day-trippers, 256 comparative advantage in, 318
Consultant, travel agent as, 110 Decision leakage in, 321–322, 324, 353
Consumer behavior, 51 of destination, 51–54 linkage in, 324
Consumer orientation, in marketing, 39 in travel, 51–52, 52f multiplier concept in, 319–324, 321f,
Continents, 30t Decks, of megaships, 280 336
Contribution margin, of rooms, 226 Demand politics and, 327–328, 336
Convenience charges, 42 for attractions, 245 of tourism industry, 325–327, 336
Convention and visitors bureaus, 331 low, 195–196 Economies of scale, 181
Convention centers, 331–333, 333t, 334 in revenue management, 143 Ecotechniques, 367, 369
Conversion ability, 113–114 Demographics, 63 Ecotourism, 348, 369–370, 377, 394
Cook, Thomas, 26, 106, 110 baby boomers in, 385 certification for, 371–373
Cooperative alliances, 400 ethnic diversity of, 387 in industry, 378

Index 443
in mass tourism, 374–375 Export royalties of, 204

nature-based, 368 in multiplier concept, 320 for travel agency, 114
principles of, 367 tourism industry as, 355 French Hotel Star System, 204
suppliers, 374 Extended-stay guest, 200, 200t French Revolution, 220
terms for, 368t External information search, 53 Frequent-flier miles, 179
Ecotourism Society of Kenya, 372 Extreme tourism, 394 Front office, of lodging property, 208
Ecotourists, 367, 369 Front-of-the-house services, 208
Ecotravelers, 367 FAA. See Federal Aviation Administration FTIs. See Foreign independent tours
Efficiency, operating, 133–136 Facebook, 142 Galley, of cruise ship, 285
Efficient foodservice response (EFR), 401 Facilitating goods, in services, 82 Gaming, 254–257, 256t
Egyptian Kingdoms, 24 FACT, 94 GDP. See Gross Domestic Product
EIA. See Economic impact analysis Fair Labor Standards Act (FLSA), 151 GDS. See Global Distribution System
Eisenhower, Dwight D., 197 Fairs, as heritage attractions, 249–251 General Manager (GM), 208
Elastic demands, 68 Familiarization trips, 105, 122 Geo-based technology, 137–138
Embarking, 280 Family getaway traveler, 64 Geographic information systems (GIS), 32
Emergency Wartime Supplemental Family vacationers, 256 Geographic segmentation, 62–63
Appropriations, 295 Farm-to-folk, 370 Geography
Empathy, in quality, 90, 91 F&B. See Food and beverage of destination, 268
Empire Era, tourism in, 22–24 Federal Aid Highway Act (1956), 169 human, 37–38
Employees Federal Aviation Administration (FAA), maps in, 30
of airports, 185 181, 295 physical, 34–35
at attractions, 244–245 Federal Reserve, 298 regional, 38–39
customer and, 94–95 Fees, of hotels, 204–205 in tourism, 29–30
human resources and, 91–93 Fee simple, 195 GIS. See Geographic information systems
orientation for, 92–93 Ferris wheel, 252–253 Global Distribution System (GDS), 111, 140,
peak performance of, 93 Festivals 206
productivity, 230 as heritage attractions, 249–251 Globe, 30–31
service by, 207–209 in seasons, 251 GM. See General Manager
in teams, 95 Feudal system, 24 Golden Weeks, 345
turnover, 229–230 Finance, 41–43, 42f Golf resorts, 276
Enhancements, of service, 401–404 Financial resources, 318 green fees of, 278
Enterprise, 173 Five Forces Model, 300 meeting planners and, 277
Enterprise resource planning systems (ERP), Five-step approach, 66–67 Goode’s homolosine projection, 31–32, 32f
132, 134 Fleet utilization, 173 Goods/services continuum, 82f
Enterprise systems, 135–136 Flow, in foodservice, 224–225 Government
Entertainment activities, 242–243, 242f, FLSA. See Fair Labor Standards Act regulations, 295
243t. See also Live entertainment Focus groups, 288 tourism and, 122, 328–330, 334
Entrepreneurism Folios, of guests, 135 GRAMPIES, 392
in sustainability, 378 Follow-up, in personal selling, 125 Grand Tour Era, 25–26, 219
tourism industry and, 325 Food and beverage (F&B), 217 Gray Line, 176
Environment. See also Strategic events, 219 Greek Empire, 24
environmental assessments; World foodservice operations in, 220–225, Green fees, 278
Commission on Environment and 235–236 Green tourism, 368. See also Ecotourism;
Development in history, 218–219, 222t Sustainability
carrying capacity of, 342–344 managers of, 225 Greenwashers, 372
in tourism, 341–343, 346–348, 356 marketing, 227 Greyhound Lines, 175–176
tourists and, 371 payroll in, 229–230 Gross Domestic Product (GDP), 296
Environmental degradation, of tourism, 43, profits in, 228–229 Gross gambling revenues (GGR), 255
344, 347, 368 purchasing in, 230–231 Gross registered tons (GRT), 280
Environmental movement, 367 at resorts, 226 Ground transfers, 116
Equator, 32, 35 of restaurant, 220–221 GRT. See Gross registered tons
ERP. See Enterprise resource planning technology in, 219–220 Guests, 192t
systems yields in, 220 expectations of, 221–224
Escoffier, George Auguste, 221, 224 Foodservice operations extended-stay, 200t
Escorted tour, 116 banquets in, 227 folios of, 135
Esteem, as need, 58 brigade system for, 224 needs, 206–209
E-table, 139 catering by, 227 services for, 91, 208, 222–224, 402–403
Ethnicity, in demographics, 387 EFR in, 401 Guided tours, 117
Etiquette, 227 in F&B, 220–225, 235–236
Eurailpass, 171 managers, 224–226 Handheld devices, 136
Euro, 319 mobile, 224 Hard ecotourist, 369
Eurobus, 176–177 prime vendor agreements of, 231 Harrah’s, 137
Event planners, 117–120 purveyors in, 231 Harvey, Fred, 168–169
Events rhythm, timing, flow in, 224–225 Hemispheres, 35
as attractions, 243 safety in, 231–232, 232t Heritage, culinary, 220–228
crisis, 326, 403 seat/table turn over in, 229 Heritage attractions
for F&B, 219 sustainability in, 370 aquariums, zoos as, 246–247
Exchange rate, of currency, 319 Food Station, 302–306 botanical gardens as, 249
Expatriate, 354 Ford, Henry, 26, 172 fairs, festivals as, 249–251
Expectations, of guests, 221–224 Forecasting, 406 historical sites as, 245–246, 352t
Expected quality, 90 Foreign independent tours (FTIs), 116 museums as, 245–246
Expected script, in service, 96 Foster, Ward G., 110 parks, preserves as, 247–249
Expenditures. See Tourism expenditure Franchise religious sites as, 273
Expenses, in restaurants, 230t for hotels/motels, 202, 204–205 World Heritage Sites as, 245

444 Index
Heterogeneous market, 62 Inelastic demands, 68 Lifestyle, in psychographic segmentation,

High rollers, in gaming, 256 Infomediaries, 113 63–64
High-speed trains, 169–170 Information technology, 109, 132 Light pollution, 347
High Up Tours and Transportation, 427–432 Infrastructure, 49, 319, 346 Limited-stakes gaming, 255
Highway, automobile and, 172–175 Innovators, in marketing, 59 Line of credit, for attractions, 245
Hilton, James, 96 Inns, 191 Linkage, in economics, 324
Historical sites, as heritage attractions, Insurance, trip-interruption, 121 Live entertainment
245–246, 352t Intangibles, 82 as attraction, 260
History, of tourism, 22–28 Integrated resorts, 287 performing arts as, 261–262
Hi-tech dining experience, 139 Intercity bus travel, 175–176 sporting activities as, 260–261
Holiday Inn, 140, 199 Intermediary Load factor, 145
Holiday resorts, 272 commission for, 108 Local residents, tourism and, 365–366
Homogeneous market, 62 in distribution, 140 Locators, of maps, 33
Hospitality, 43 in tourism services, 106–108 Lodging, 194–195
business, 18 Intermodal transportation, 165, 166f as accommodations, 191–192, 198
quality and, 83 International Airline Travel Agency properties in, 200, 202–203, 206, 208,
Host community Network (IATAN), 114 209f, 210–212
resources of, 349–350, 350f International Air Transport Association rack rate of, 210
sustainability of, 375 (IATA), 178 room layouts in, 203f
in tourism, 28, 349 International Bureau of Exhibitions (BIE), terminology, 202
Hosted tour, 116 250 Logistics, 173–174
Hostel, 191 International Date Line, 33 Longitude, 32
Hotels, 21, 190–191 International Events Management Body of Low rollers, 255
accommodations, 198–200 Knowledge, 118 Low-stakes/new adopters, in gaming, 256
atriums of, 200 International Pow Wow, 122
best practices for, 201 International tourism, 44–45, 316–317, Maasdam, MS, 282f, 283f–284f
boutique, 203 316t, 317t Major airlines, 293–298
chain operations, 202, 205–206 International travel, 28, 316–317 Mall of America, 258–259
classifications of, 200–201 International Year of Ecotourism, 367 Malls, 258–259
concierge service of, 201 Internet, 27, 113, 118, 123, 137 Management. See also Revenue
distribution of, 140–141 for airline tickets, 299 management
fees of, 204–205 B&B booking for, 194 in F&B, 225
franchise, 202, 204–205 in communication, 138–139, 139t of foodservice operations, 224–226
French Hotel Star System, 204 in distribution, 139–141 of natural attraction, 346
global reach of, 193–194, 193t for special needs, 390 of properties, 208
historic, 201 in tourism industry, 141, 294 quality, 94
marketing, 136 user-generated content of, 142 supporting teams, 96, 224
modular, 404 Interstate Commerce Commission (ICC), in tourism, 40–41, 94t
occupancy rates of, 210 175 Management contracts, 202, 205
operating fees for, 204t, 206 Interstate highway system, 172–173 Management information systems (MIS), 143
perfect sell for, 212 Interstate Hotels & Resorts, 205 in efficiency, 133–136
ratings systems for, 201 Inventory, in revenue management, 143 features of, 134t
reservations, 206–207 Involuntarily denied boarding, 185 PMS in, 135–136, 147
sustainability in, 373–376, 373t Irridex, 365–366 POS systems in, 134–135
terminology of, 202t Itinerary Maps, 30–34, 34f
timeshares and, 196 of cruise ship, 285 Mardi Gras, 251, 318
Hub-and-spoke system, 181–183, 181f, by travel agent, 111 Marijuana tourism, 396, 426–432
293–294 Marketing
Human geography, 37–38 Japan Rail Pass, 176 for chain operations, 206
Human resources Jiuzhai Valley National Park, 347 communications, 88
employees and, 91–93 Jobs, 18, 328 concept, 39, 61
learning organizations for, 92 Joint ventures, convention centers as, 334 consumer behavior in, 51
in quality, 91 data in, 136–137
Hyatt Hotels, 199–200 Kitchen, stations in, 221, 224 F&B, 227
KOPEL, 329 hotels, 136
IATA. See International Air Transport innovators in, 59
Association Labor unions, 93, 298 lodging properties, 206
IATAN. See International Airline Travel Landforms, on relief maps, 35 multiple distribution in, 121
Agency Network Langkawi Geopark, 368 orientations, 39
ICC. See Interstate Commerce Commission Latitude, 32 personal selling in, 122
Icehotel, 200 LAUGH, 98 in tourism, 39–40
Illnesses, food-borne, 231–232 Laws, for alcoholic beverages, 234–235 travel, 140
Inamo, 139 Leakage, in economics, 321–322, 324, 353 Market segmentation
Incentive travelers, 70, 120 Learning curve, 132 bases, 62
Inclusive price, of cruise lines, 282, 285 Learning organizations, 92 five-step approach in, 66–67
Independent properties, for lodging, 202–203 LEED certification, 375–376 future of, 384–385
Independent tour, 116 Legacy carriers, 181 heterogeneous, homogeneous, 62
Indexes, of maps, 33 Legends, of maps, 33 needs, wants in, 62, 65–67
Indirect effects, of tourism expenditures, 322 Legs, revenue management for, 145–146, 146f resorts in, 288
Induced information, 53, 55 Leisure in revenue management, 143
Industrial attractions, 352 activities, 241, 262–263 Market share, quality in, 84
Industrial Revolution, 269 tourism as, 26, 28, 68, 241, 288, Markups, 113
Industry. See also Tourism industry 386–387 Marriott International, 69–70, 114
airlines, 293–301 Leverage, in finance, 42–43 Maslow’s hierarchy of needs, 55–58, 57f
ecotourism, 378 Liability, of alcoholic beverages, 234 Mass customization, 396–397

Index 445
Mass tourism, 356 of guests, 206–209 Physical geography, 34–35

concerns about, 362–363 in market segmentation, 62, 65–67 Physiological needs, 57
ecotourism in, 374–375 of tourists, 51 Pilgrimages, 273
in Modern Era, 26–27 of visitors, 40 Planet, mass tourism and, 363
planet and, 363 Night audit, 135 Planning. See Event planners; Meeting
profit and, 363 Noise pollution, 347 planners; Tourism planning
Mature travelers Non-alcoholic beverages, 235 Plate presentation, 222–223
accessibility for, 389–390 Nonprofit tourism associations, 334 Plog, Stanley, 58–59, 61, 64
baby boomers as, 385 Nonstop service, 183 PMS. See Property management system
segment, 71–73, 72t NTO. See National tourism organization Point-of-sale systems (POS), 132, 134–135
Medical tourism, 394–395 Point-to-point
Meeting planners Objectives, in tourism planning, 334 airlines, 294
golf and, 277 Occupancy rates, 210 travel, 168
in three-level distribution channels, Oceanarium, 247 Policy, tourism, 329–330, 335t
118–120, 119t Off-road vehicles, 368 Politics
tourism suppliers and, 120 Olympic Games, 260, 329 constituent groups in, 335–336
Megaresort, 287 One-level distribution channels, 108–109 economics and, 327–328, 336
Megaships One-way trips, 183 in travel, 22
decks of, 280 Online travel agencies (OTAs), 110–111, Pollution, 347
GRT of, 280 113–114, 140–141 Polo, Marco, 25f, 218
Membership, in referral organization, 206 Ontario Mills Mall, 259 Population projections, 386f
Menus, design, 222–224, 224t Open-jaw trip, 183 Porter, Michael, 300
Mercator projection, 31f Opera, 262 Portman, John, 199–200
Meteorology, 35 Operating expenses POS. See Point-of-sale systems
Microsegmentation, 396–397 of airlines, 179–180, 180f Positioning, of destination, 331
Microtel Inns and Suites, 390 in hotels/motels, 204t, 206 Positive break, from script, 96
Middle Ages, 24–25, 219, 250 Optimal arousal theory, 56 Precipitation, 36f
Millennial, 389 Organized labor, 93 Preserves, 247–249, 343t
MIS. See Management information systems Orientation, 92–93 Pricing, on cruise lines, 286
Missionary sales, 123 Orient Express, 171 Prime meridian, 32
Mistakes, in service, 98–99 OTA. See Online travel agencies Prime vendor agreements, 231
Mobile apps, 131, 136, 142, 178 Our Native Village eco-resort, 374 Privatization, 329
Mobile foodservice units, 224 Outsourcing, 91 Problem solving, in service, 98–99
Mobility Era, in tourism, 26 Overbooking, 185, 212 Production orientation, in marketing, 39
Modern Era, in tourism, 26–28 Overcrowding, 348 Productivity, 230
Modular hotels, 404 Overrides, of travel agencies, 113–114 Product knowledge, in personal selling, 124
Monsieur Boulanger, 220 Owners Product-related segmentation, 64–65
Motels, 198–199 of chain operations, 205–206 Professional travel, 28, 68
chain operations, 202, 205–206 of property, 205 Profits
classifications of, 200–201 of timeshares, 196–197, 196t of airlines, 298
franchise, 202, 204–205 of airports, 184
operating fees for, 204, 206 Pacific Rim, 391 in beverage operations, 233
Motorcoaches Packaging, dynamic, 118 of cruise lines, 286
for tours, 176 Parent companies, 205 in F&B, 228–229
for transportation, 175–177 Parks, 247–249 in finance, 41–42
Multiculturalism, 96 Parmentier, Antoine-August, 219 of gaming, 257
Multiple distribution, in marketing, 121 Passenger. See also Revenue passenger miles of lodging properties, 210–211
Multiplier concept of airlines, 178–179, 183–185 mass tourism and, 363
in domestic travel, 320–322 of cruise lines, 280, 282, 285–286, 398 in service, 91
in economics, 319–324, 321f, 336 rail service, 168–172 of travel agencies, 113
expenditures in, 319–320 transportation, 185 Promotion, of tourism, 330–334
in export, 320 Passenger facility charges, 328–329 Promotional packages, 21
Mulu National Park, 369 Payroll, 229–230 Properties
Museums, 245–246 Pearce, P.L., 58–59 lodging, 200, 206, 208, 209f, 210–212
Pegasus Solutions, 114 management contracts for, 202, 205
National Customer Satisfaction Index, 89 Pensions, 192 management of, 208
National Heritage Board (NHB), Singapore, Perceived quality, 90 marketing, 206
246 Per diem rates, 211 organization of, 207–208
National monument, 248–249 Perfect sell, for hotels, 212 owners, 205
National park, 248–249, 343t Performing arts, 261–262 profits of, 210–211
National Park Service, U.S., 248t, 249f, 347 Perfuming, in alcoholic beverages, 233 revenue management for, 212
National Park System, U.S., 342 Perpetual inventory, of bars, 234 Property management system (PMS)
National preserve, 248–249 Personality, 63 enterprise systems in, 135–136
National Restaurant Association, 233, 405 Personal selling as MIS, 135–136, 147
National scenic trail, 248–249 client in, 124–126 Psychocentric-allocentric model, 58–60, 59t
National tourism organization (NTO), 330, closing, 125, 125t Psychocentrics, of tourists, 58–59
401 in customer relationship management, Psychographic segmentation, 60f, 63–64,
National Trust for Places of Historic 123 64t
Interest or Natural Beauty, 343 follow-up in, 125 Public/private organizations, 331–334
Natural attractions, 241, 248–249, 346, in marketing, 122 Pullman coach, 168
368 product knowledge in, 124 Pull motivation, 55–56
Nature-based tourism, 368 relationships in, 126 Purchase order, 231
Needs. See also Maslow’s hierarchy of needs sales presentation in, 124–125 Purchasing, 230–231
of business travelers, 69 Philadelphia Zoo, 246–247 Purser, 281
of customer, 94–95 Physical capacity, 343 Purveyors, 231

446 Index
Push, by regional airlines, 182 Revenue, 254t, 257t. See also Gross gam- incentive travelers in, 70
Push motivation, 55–56 bling revenues; Travel Revenue, U.S. mature travelers, 71–73, 72t
Revenue management, 147. See also needs, wants in, 62, 65–67
Taxes process, 67t
Quality
of airlines, 144–146, 297 product-related, 64–65
customer satisfaction and, 90–91
capacity in, 143 psychographic, 63–64
defining, 83–84, 84f
dynamic packaging in, 144 special-interest travelers, 73–75
empathy in, 90–91
inventory in, 143 target markets in, 67
hospitality and, 83
for leg, 145–146, 146f Self-actualization, as need, 58
human resources in, 91
for lodging properties, 212 Self-service technology, 136
management, 94
market segments in, 143 September 11, 2001, 295
in market share, 84
by tourism supplier, 145 airlines industry after, 297–298, 300
model for, 87–90
Revenue passenger miles (RPMs), 145 tourism and, 326–327
service encounters and, 87–88
RFIDs. See Radio frequency identification Service
specifications in, 85
devices assurances of, 89
standards in, 85
Rhythm, in foodservice, 224–225 back-of-the-house, 208
of tourism suppliers, 86–87
Right-to-use timeshare, 195 connecting, 183
value in, 84
Ritz, Caesar, 221 customer satisfaction in, 98
Ritz-Carlton, 397 direct, 183
Rack rate, 210 RJs. See Regional jets by employees, 207–209
Radio frequency identification devices Robinson projection, 31–32, 32f enhancements of, 401–404
(RFIDs), 133 ROI. See Return on investment expected script in, 96
Rail service, 168–172, 172t, 182 Roller coasters, 252 facilitating goods in, 82
Rates, 211 Rolling hubs, for airlines, 182–183 front-of-the-house, 208
Ratings systems, for hotels, 201 Roman Empire, 24, 269, 341 goods and, 82
Real estate tourism, 395 Romantics, 64 for guests, 91, 208, 222–224, 402–403
Receptive service operator (RSO), 115 Room layouts, in lodging, 203f intermediaries in, 106–108
Recovery, in service, 98 Rooms mistakes in, 98–99
Recreational activities, 241 configured, 397 packages, 191
Reductions, 224 contribution margin of, 226 problem solving in, 98–99
Referral organizations smart, 404 profit in, 91
for B&Bs, 194 Roosevelt, Theodore, 342 recovery, 98
membership in, 206 Roundtrip, 183 reliability of, 88
Regional carriers Royal Montreal Club, 276 responsiveness in, 89
airline, 182 Royalties, of franchise, 204 in revenue management, 143
push by, 182 RPMs. See Revenue passenger miles tangibles in, 88–89
for transportation, 175–176 RSO. See Receptive service operator teams for, 95–96, 98, 224
Regional geography, 38–39 Russian service, 224 as theater, 85–87, 86t, 125
Regional jets (RJs), 182–183 RV parks, 197–198 tourism and, 18, 75, 100, 106–108, 268
Regulations, government, 295–296 Service encounter
Relationships, in personal selling, 126 Safety, in foodservice, 231–232, 232t scripts in, 86, 96
Reliability, of services, 88 Safety needs, 57 servicescape of, 88
Relief maps, landforms on, 35 Saga, 73 as theater, 87f
Religious sites, 273 Sale, closing, 125 in tourism industry, 85
Renaissance, 25 Sales orientation, in marketing, 39 Service expectations, quality and, 87–88
Rental cars, 174t Sales presentation, in personal selling, Service guarantee, 99–100
Rental pool, in condos, 197 124–125 Service quality model, 87–90, 88f
Repositioning cruises, 168 Sanya, Hainan Island, 275 Servicescape, 88
Research, tourism, 405–409, 407t Satisfaction guarantee, 161 Service scripts
Reservations, 140–141, 206–207, 207t Satisfaction outcomes, 90f breaking from, 97–98
Resort, 21, 197 Savoy Hotel, 221 in encounter, 86, 96
casino, 286–287 SBI. See Strategic Business Insights SERVQUAL, 88
climate change and, 363–364 Scales, of maps, 33–34 ServSafe, 233
communities, 346 Scenic impact, 346 Sex tourism, 354–355
components of, 278t Scenic railroads, 171–172 Shopping
cruise ships as, 281 SEAs. See Strategic environmental malls, 258
destinations, 269, 272 assessments tourism, 259
F&B of, 226 Seasons travel for, 258
holiday, 272 for attractions, 244, 271 Shoulder seasons, 226
integrated, 287 climate and, 35–37 Shuttles, for tourists, 184
market segmentation in, 288 climate change and, 363–364 Singapore Airlines, 96, 227
ski, 225, 387–388 of destinations, 271 Single traveler, 387
snow holiday, 275–276, 276t festivals in, 251 Sinus-Milieus®, 65
spa, 278–279 shoulder, 226 SIT. See Special-interest tourism
winter sports, 388 for travel industry, 296 SKINs. See Spend Kids’ Inheritance Now
Responsiveness, in services, 89 Seat or table turns over, 229 Ski resort, 225, 387–388
Restaurant, 302–306 Secondary seasons, for destinations, 274 Slow tourism, 391–392
à la carte, 221 Security, 403 Small and medium-sized enterprises (SMEs),
failure rate of, 228–229 Segmentation, in tourism, 61, 115, 396. 378
F&B in, 220–221 See also Market segmentation; Smart rooms, 404
income/expense of, 230t Microsegmentation SMERFs, 70–71
inspection, 231 business travel, 68–70 SMEs. See Small and medium-sized enterprises
success of, 229t demographic, 63 Smith Travel Research, 201
Restitution, in service guarantees, 100 of gaming, 255–257 Snow holiday resorts, 275–276, 276t
Return on investment (ROI), 42 geographic, 62–63 Social carrying capacity, 343
Z02_COOK1670_06_GE_IDX.indd 446 12/06/17 11:10 AM

Index 447
Social media, 126 Technology marketing in, 39–40

Social networking, 142 in air travel, 399 medical, 394–395
Society, 349, 355–356 communication, 391 in Middle Ages, 24–25
culture and, 350–352 defining, 132 milestones in, 23t
Soft ecotourist, 369 in F&B, 219–220 in Mobility Era, 26
Songkran Festival, Thailand, 251 geo-based, 137–138 model, 20–22, 21f
SOP. See Standardized operating procedures information, 109, 132 Modern Era in, 26–28
Southwest Airlines, 183, 294, 297–298 in rail service, 169–170 nature-based, 368
Spa, 269, 271 for self-service, 136 optimal arousal theory of, 56
resort, 278–279 in tourism industry, 29, 132f, 145, 147 policy, 329–330, 335t
staffing, 279t Teleconferencing, 69 politics and, 327–331
Space ratio, of ships, 281 Terrorism, 326–327, 403. See also promotion, 330–334
Space tourism, 395–396 September 11, 2001 real estate, 395
Special-interest tourism (SIT), 73–75, 74t Theater, services as, 85–87, 86t, 125 research, 405–409
Special needs, 389–390 Theme parks services and, 18, 75, 82, 106–108, 268
Specifications, in quality, 85 as commercial attractions, 253–254 sex, 354–355
Spend Kids’ Inheritance Now (SKINs), 385 older visitors and, 389 shopping, 259
Spoke routes, 181 revenue of, 254 slow, 391–392
Sporting activities Three-level distribution channels space, 395–396
in golf resorts, 276–278 consolidators, travel clubs in, 117 special-interest, 73–75
as live entertainment, 260–261 event planners in, 117–120 sport, 261
in snow holiday resorts, 275–276 meeting planners in, 118–120, 119t sustainability in, 361–362, 366f
Sports tourism visitors tour operators in, 114–116, 115t taxes in, 328–329, 328t, 336,
in SIT, 74–75 Tickets, airline, 299 350–351
types of, 75t Time, of travel, 165–167, 165t, 167t, travel in, 29
Sport tourism, 261 171t urban, 269, 287–288
Staffing. See also Employees Timeshares vocation, 395
cruise ships, 281 amenities of, 195 wildlife, 370–371
of spas, 279t hotels and, 196 wine, 220
Standardized operating procedures (SOP), owners, 196–197, 196t as worldwide, 18
204–205 right-to-use, 195 Tourism boards, 122
Standards, in quality, 85 Timing, in foodservice, 224–225 Tourism development, stages of, 364f
Staterooms, 282 Tipping, 286 Tourism expenditure
Stations, in kitchen, 221, 224 Tour EIA of, 323–325
Steam-powered ships, 168 all-inclusive, 107 as import, 320
Stocks, 224 by Cook, 106 indirect effects of, 322
Strategic Business Insights (SBI), 65 culinary, 218, 228, 235–236 multiplier concept in, 319–320
Strategic environmental assessments (SEAs), defined, 115 tracking, 322–323
348 motorcoach for, 176 of visitors, 20
Strategic grouping, for destinations, 271 types of, 116 Tourism industry, 17–20, 20t, 61
Subcontracting, 401 Tour guides, 136 airlines in, 178–183
Subsegments, 396 Tourism. See also Ecotourism; Mass business travel in, 28, 65, 68–69, 69t
SuperDevoluy, 195 tourism; Segmentation, in tourism consolidation in, 399–401
SuperShuttle, 178 activities, 317–318 crises and, 326
Superstructure facilities, 329, 346 adventure, 368, 392–393, 393t economics of, 325–327, 336
Supervisors, peak performance and, 93 business, 39–43, 336 ecotourism in, 378
Supplier. See Tourism supplier career in, 17–18 entrepreneurship in, 325
Surveillance, 403 climate change and, 348, 363–365 as export, 355
Sustainability, 348, 404–405 cost-benefit analysis of, 327 GDP and, 296
entrepreneurship in, 378 culture, 37–38, 43, 350–356 Internet in, 141, 294
in foodservice, 370 dark sky, 347 service encounter in, 85
of host community, 375 data, 20 technology in, 29, 132f, 145, 147
in hotels, 373–376, 373t defined, 19–20, 19f Tourism markets
in tourism, 361–362, 366f environmental degradation of, 43, 344, adventure, 392–393
UNWTO on, 362 347, 368 emerging, 391–396
in wildlife tourism, 370–371 environment in, 341–343, 346–348, marijuana, 396
356 medical tourism, 394–395
Table d’hôte, 221 extreme, 394 slow tourism in, 391–392
Taco Bell, 94 finance in, 41–43 space in, 395–396
Taft, William, 27 future of, 384 Tourism planning, 334–335
Taman Negara National Park, 347 geography in, 29–30 SEAs in, 348
Tangibles, in services, 88–89 governments and, 122, 328–330, 334 for visitors, 345
Tapas, 221, 223 in Grand Tour Era, 25–26 Tourism promoters, 20–21
Target markets growth, 43–44 Tourism Satellite Accounts (TSA), 323
in segmentation, 67 history, 22–28 Tourism supplier, 20–21
for travel agencies, 111 host community in, 28, 349 data mining by, 137
Taxes, in tourism, 328–329, 328t, 336, infrastructure for, 319, 346, 349 destination and, 268
350–351 international, 44–45, 316–317, 316t, in ecotourism, 374
Taxis, 177 317t induced information of, 53, 55
TCP. See Travel Career Patterns jobs, 18, 328 intermediaries for, 106–108
Tea, 235 as leisure activity, 26, 28, 68, 241, 288, meeting planner and, 120
Teams 386–387 one-level distribution channels in,
employees in, 95 local residents and, 365–366 108–109
management supporting, 96, 224 management in, 40–41, 94t quality of, 86–87
service, 95–96, 98, 224 marijuana, 396, 426–432 revenue management by, 145

448 Index
Tourists itinerary by, 111 Venues, for entertainment, 243

attractions for, 243 markups by, 113 VIA Rail Canada, 169
culinary, 218 online, 110 Virtual conferencing, 390–391
environmentally friendly, 371 overrides of, 113–114 Virtual trip, 22
gaming for, 257 profitability of, 113 Visitors. See also Convention and visitors
motivation of, 55–58 questions for, 113t bureaus; Tourists
psychocentrics, allocentrics of, 58–59 role of, 111t to museums, 246
shuttles for, 184 target market for, 111 needs of, 40
travelers and, 377 tour packages by, 111, 115 older, 389
wants, needs of, 51 in two-level distribution channels, planning for, 345
Tour operators 109–114 to theme parks, 389
incentive, 120 types of, 112t tourism expenditure of, 20
packages by, 114–115 Travel Career Patterns (TCP), 58, 59f Vocation tourism, 395
in three-level distribution channels, Travel clubs, 117 Voluntary tax, 255
114–116, 115t Traveler, 351. See also Ecotravelers Volunteerism, 370
Tour packages adventurous/education, 64
independent, 116 business, 65 Wanderlust, 26
by tour operators, 114–115 disabilities of, 389–390 Wants
by travel agents, 111, 115 family getaway, 64 of customer, 94–95
types of, 116 international, 316–317 in market segmentation, 62, 65–67
Trade associations, 122 single, 387 of tourists, travelers, 51
Trade shows, 332f tourists and, 377 Water
Trains. See also Rail service Travel industry transportation, 35, 168
as attractions, 172 GDP and, 296 travel, 167–168
Trans-Canada Highway, 172 projected growth of, 299 WCED. See World Commission on
Trans-Canada Highway Act (1949), 169 as seasonal, 296 Environment and Development
Transportation, 21, 27–28, 398 trends, 298–300 WCTT. See World Travel and Tourism
by automobile, 172–175, 399 Tremont House, 198 Council
intermodal, 165, 166f Trip, length of, 54 Weather patterns, 35, 271
modes of, 173t Trip-cancellation, insurance and, 121 cruise ships and, 282
motorcoaches for, 175–177 Triple bottom line, 342 in destinations, 272–274
passenger, 185 Trolley parks, 252 West Edmonton Mall, 260
rail service for, 168–169 Tropical climate, 37 Westinghouse, George, 26
time of, 165–167 Trunk routes, 181 What You See Is What You Get
water, 35, 168 TSA. See Tourism Satellite Accounts (WYSWYG), 141
Transportation Security Administration, 24 hour clock, 167f White House, 243–244, 244f, 271
295 Twitter, 142 Wholesalers, tour, 115, 117, 120
Travel. See also Business travel Two-level distribution channels, WHSs. See World Heritage Sites
age cohort to, 385 109–114 Wildlife tourism, 370–371
awards, 121t Wilson, Kimmons, 199
clubs, 117 Ultimate Scuba, 307 Wine tourism, 220
decisions in, 51–53, 52f Ultra-lightweight vehicles (ULVs), 175 Winter sports resorts, 388
dependables in, 58–59, 61 United Airlines, 142, 299–300 World Commission on Environment and
domestic, 320–322 United Nations Educational, Scientific and Development (WCED), 362
economic changes in, 22 Cultural Organization (UNESCO), World Heritage Sites (WHSs), 245, 274
intercity bus, 175 348 World’s Fair, 250, 252
international, 28, 316–317 United Nations World Tourism Organization World Tourism Organization. See
marketing, 140 (UNWTO), 19–20, 44–45, 316–317, United Nations World Tourism
motivations, 56t 323, 348 Organization
point-to-point, 168 on international tourism, 44–45 World Trade Organization, 301
politics in, 22 on sustainability, 362 World Travel and Tourism Council (WCTT),
professional, 28, 68 UNWTO. See United Nations World 18–20
reasons for, 28f Tourism Organization World War II, 26–27
to religious sites, 273 Upgrades, airline, 69 World Wide Opportunities on Organic
for shopping, 258 Upside Down, 302–306 Farms (WWOOF), 370
theory of, 55 Urban tourism, 269, 287–288 Wright, Orville and Wilbur, 26
time, 165–167, 165t, 167t, 171t U.S. Green Building Council, 375 WWOOF. See World Wide Opportunities
in tourism, 29 User-generated content, 142 on Organic Farms
venturers in, 58–59, 61 Utell, 206
by water, 167–168 Yield management, 143
Travel agents Vacation days, 26–27 Yields, 220
commissions by, 113 Vacations, 279 Yosemite National Park, 347
consortium of, 114 Value, in quality, 84
as consultants, 110 Vegetation, 35 Zion National Park, 347
franchise of, 114 Venturers, in travel, 58–59, 61 Zoos, 246–247

GLOBAL GLOBAL
EDITION EDITION
For these Global Editions, the editorial team at Pearson has Tourism
Tourism: The Business of Hospitality and Travel

collaborated with educators across the world to address a wide range
of subjects and requirements, equipping students with the best possible The Business of Hospitality and Travel

learning tools. This Global Edition preserves the cutting-edge approach SIXTH EDITION
and pedagogy of the original, but also features alterations, customization,
and adaptation from the North American version. Roy A. Cook • Cathy H. C. Hsu • Lorraine L. Taylor
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purchased this book within the United States or Canada,

Pearson Global Edition

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A01_COOK1670_06_GE_FM.indd 1 24/05/17 10:35 AM

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and Associated Companies throughout the world

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A01_COOK1670_06_GE_FM.indd 2 13/06/17 11:39 AM

To my wife, Gwen, who continues to support and encourage

To my husband, Thomas Sun, for his TLC and support.

To my parents, Robert and Harriet, from whom I inherited

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A01_COOK1670_06_GE_FM.indd 4 24/05/17 10:35 AM

Summary 76 One Stop Does It All! 105

SERVICE SUPPLIERS TOGETHER 104 Providing Customer Convenience

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Internet and Travel Product Distribution 139 Summary 185

A01_COOK1670_06_GE_FM.indd 6 24/05/17 10:35 AM

Sometimes It’s More Difficult Museums and Historical Sites 245

A01_COOK1670_06_GE_FM.indd 7 24/05/17 10:35 AM

Net Tour 289 Summary 336

A01_COOK1670_06_GE_FM.indd 8 24/05/17 10:35 AM

Introduction 362 Vocation and Real Estate Tourism 395

A01_COOK1670_06_GE_FM.indd 9 24/05/17 10:35 AM

New to the Sixth Edition

A01_COOK1670_06_GE_FM.indd 10 24/05/17 10:35 AM

Who Should Use This Book

How the Text Is Organized

A01_COOK1670_06_GE_FM.indd 11 24/05/17 10:35 AM

A01_COOK1670_06_GE_FM.indd 12 24/05/17 10:35 AM

Global Edition Acknowledgments

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A01_COOK1670_06_GE_FM.indd 14 24/05/17 10:35 AM

2 Marketing to the Traveling Public

3 Delivering Quality Tourism Services

4 Bringing Travelers and Tourism Service Suppliers

5 Capturing Technology’s Competitive Advantages

An integrated model of tourism.

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M01B_COOK1670_06_GE_C01.indd 16 13/05/17 10:25 AM

Tourism’s Challenges and Opportunities Net Tour

Tourism is a Worldwide and Growing Phenomenon. Prasit Rodphan/Shutterstock

Could a Career in Tourism Be in Your Future?

M01B_COOK1670_06_GE_C01.indd 17 01/06/17 9:27 AM

His decision to embark on an MBA with a tourism management specialization at a

Services and Tourism

M01B_COOK1670_06_GE_C01.indd 18 01/06/17 9:28 AM

Food and beverage

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Table 1.1 Components of the Tourism Industry

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The History of Travel and Tourism