Chapter 02

Introduction:

The hospitality industry is just one part of many industries that contribute to the economic
impact of travel and tourism. We will also look at how businesses in this industry work
together. Finally, we will discuss why people travel, how travel and tourism affect society,
sustainable development, and ecotourism.
 The Changing World
The world has experienced constant change throughout history, but the most dramatic shifts occurred
after World War II. Technological advancements, especially since the 1950s, have transformed our lives
from agricultural to industrial to information-based societies. These technologies enable faster travel,
efficient manufacturing, and instant global communication through the Internet, smartphones, and
social media. Global population is growing and aging, which means more people will have the means to
travel and engage in leisure activities. With more households having dual incomes, there's increased
disposable income for vacations, although these tend to be shorter and more frequent. Seasonal travel
patterns are less strict now due to climate-controlled attractions and flexible vacation schedules.
Concerns about pollution and over-development have encouraged interest in sustainable tourism,
where travelers seek eco-friendly destinations like the Amazon rainforests or Alaskan glaciers. Younger
generations are driving adventure tourism, seeking remote and challenging destinations
 The Nature of the Travel and Tourism Industry
• The travel and tourism industry include a variety of businesses and services that cater to travelers, as defined by the National
Tourism Policy Act of 1981 and further clarified by Douglas Fretchling. These include transportation, accommodation, food
and beverage services, and various facilities that support travel activities. The hospitality industry, which includes hotels,
resorts, and restaurants, is a significant part of this wider sector. Measuring the exact size of the travel and tourism industry is
complex due to the diverse range of businesses involved. While certain sectors like airlines and resorts primarily serve
travelers, others such as gift shops and gas stations cater to both travelers and locals, making exact economic assessment
challenging. Economists estimate the industry's size by aggregating the revenues of its essential businesses. However, this
approach doesn't capture the full economic impact, which includes indirect benefits like employment generation, tax
revenues, and local business profits. This broader impact is known as the multiplier effect, where expenses by travelers
motivate additional income within the local economy. Despite these measurement difficulties, the industry's scale is
important. In 2013, international tourism recorded over a billion arrivals globally, generating $1.159 trillion in spending. Major
tourist destinations included France, the United States, Spain, and China. Despite obstacles during the global economic
decline in 2008, travel and tourism has since recovered and is projected to grow increasingly, contributing significantly to
global employment with about 8.7% of the world's workforce employed in the sector.
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 Interrelationships Within the Travel and Tourism
Industry
The travel and tourism industry is unique because its different parts work closely together to meet travelers' needs. Here are
some key aspects:

Recreation: This includes leisure activities like beach vacations, ski trips, and adventurous pursuits such as white-water rafting.
Popular destinations like the Caribbean, Disney World, and national parks benefit greatly from recreational travel.

Culture: Many people travel to learn about different cultures, history, art, and religion. Famous sites like Normandy's beaches,
Italy's Vatican City, and Kenya's national parks attract travelers interested in educational and cultural experiences. Events like
the Salzburg Music Festival and Mardi Gras in Rio de Janeiro are also major draws for cultural tourism.

Business: Business travel is a significant part of the industry, involving individuals attending meetings, conventions, and
conferences. Increasingly, business trips are combined with leisure activities, with events held at resort hotels, theme parks,
and cruise ships.
Visiting Friends and Relatives (VFR): Many travels involve visiting friends and family, though
this category has less economic impact compared to recreational or business travel.

Health: Medical tourism is a growing segment where people travel for medical treatment,
diagnostics, or wellness services at places like the Mayo Clinic or Canyon Ranch. This type of
travel has a notable economic impact as it involves spending on healthcare services and
accommodations.

These different types of travel often overlap, and destinations and businesses within the
industry collaborate to offer a range of experiences and services that cater to diverse traveler
interests and needs.
 Psychographic Research
Psychographic research focuses on understanding people's behaviors, lifestyles, and values rather than just demographic factors
like age or gender. This type of research is valuable for businesses in the travel industry because it helps them adapt their
offerings and marketing strategies to match what different types of travelers are looking for. For example, consider the
psychographic segments identified for potential travelers to Bermuda:

Price and Sights Group: These travelers are primarily interested in getting the most value for their money. They prefer budget-
friendly options that allow them to see a lot of different places or attractions. They are likely to choose economical trips and
hotels that offer basic accommodations close to major attractions.

Sun and Surf Group: This group seeks vacations placed around relaxation and enjoying natural beauty. They prioritize
destinations with good weather, sunny beaches, and clear waters. They are willing to spend for a location that potentials a
beautiful beach experience and full opportunities for swimming and sunbathing.

Quality Group: For these travelers, the quality of their vacation experience is important. They view their vacation as a reward
for hard work and seek expensive accommodations, exceptional service, pleasure-loving dining, and high-level entertainment.
They are willing to pay more for top-tier experiences that offer treating and exclusiveness.
Psychographic research assists destinations and businesses understand these preferences and
modify their offerings accordingly. For example, resorts might focus on upgrading their
service standards and amenities to attract the Quality Group, while destinations could
emphasize their natural beauty and weather conditions to appeal to the Sun and Surf Group.
In today's travel landscape, technological ability is also serious among consumers. Travelers
use online platforms to research and book trips, seeking the best deals and experiences. This
consumer mindset pushes hospitality providers to innovate and differentiate their offerings.
Average experiences are no longer acceptable—travelers expect excellence and uniqueness in
their accommodations, dining, and overall travel experiences. In summary, psychographic
research provides insights into traveler motivations and preferences, guiding businesses in
the travel industry to create convincing and differentiated offerings that meet the evolving
demands of modern travelers
 The Social Impact of Travel
Hotels, restaurants, and attractions can greatly influence and change life in a community. For example, Huatulco, Mexico, was a
small town until Club Med decided to build there. Walt Disney World has significantly changed Orlando and Florida forever.
Travelers bring money and jobs to any destination, but they can also bring problems. With more travelers, communities need
more public services like police, firefighters, water treatment plants, and garbage disposal. This can increase the cost of living for
residents. Crime may go up. New airports bring pollution and noise; new hotels and shopping areas change the local landscape.
Residents might lose access to beaches and other public areas.

Because of these issues, many people feel their communities have been negatively affected by travelers and don't support more
tourism development. Some areas are unsure about the benefits of tourism and haven't actively tried to attract tourists or build
facilities for them. Other communities, like Monroe County, Florida (where Key West is located), feel they have allowed too
much development and are now trying to limit it. In developing and Third World countries, there are additional problems. One
is the huge economic gap between the travelers who stay in luxury resorts and the employees who see new lifestyles and
behaviors for the first time. Locals often try to imitate the clothing and spending habits of visitors. This can erode local culture
and traditional values. Racial tensions can also arise from these conditions. Another major problem is the seasonality of tourism.
When the tourist season is over, many people may be out of work.
 Sustainable Tourism Development
One solution to some of the problems produced by tourism is sustainable tourism development. This approach
lies between uncontrolled tourism growth and government actions to control tourism. The World Tourism
Organization says that "sustainability principles refer to the environment, economic, and socio-cultural aspects
of tourism development, and a suitable balance must be established between these three dimensions to
guarantee its long-term sustainability.” Tourism that has a low impact on a place's environment and culture and
conserves the ecosystem while creating jobs and income is considered sustainable tourism. Examples of
responsible measures include controlling the number of visitors to parks to minimize damage to plants and
animals and limiting car traffic at cultural sites to reduce air pollution and overcrowding.

There is a growing understanding that if tourism is to increase in any location, there must be a balance between
the needs of the visitors, the tourism industry, the local community, and the environment. A sustainable tourism
development program protects and improves a place's natural resources, conserves local culture, promotes
cultural understanding, and benefits the economy of the community and its residents.