PAMANTASAN NG LUNGSOD NG MAYNILA

PLM Business School

Department of Hospitality Management ITM 1204 MICRO PERSPECTIVE OF TOURISM AND HOSPITALITY

Module 9: THE MICE INDUSTRY: MEANING AND IMPORTANCE

MODULE OBJECTIVES By the end of the module students will:

1. explain the meaning and importance of the MICE industry;

2. describe the evolution of the MICE industry;
3. clarify the difference between meeting, incentives, conventions, and exhibitions;
4. discuss the key players in the MICE industry;
5. describe the emerging trends in the MICE industry; and
6. explain the employment opportunities in the MICE industry.

I. The MICE Industry: Meaning and Importance The meetings, incentives, conventions, and exhibitions (MICE) industry is one of the fastest growing and
lucrative area of the tourism and hospitality industry. It includes different areas such as conferences,
meetings, incentives, exhibitions, and trade shows. The MICE industry has been traditionally regarded
as part of the tourism and hospitality industry with activities that involve both tourists and non-tourists.

One of the significant features of the MICE industry is its potential to attract national and international
visitors. Visitors to MICE events are considered participants, delegates, or attendees. MICE events
provide additional benefits to the country in the form of business opportunities, education, and
training. Many of these events are related to business and professional activities. MICE activities usually
occur outside the peak season of leisure travel. Hence, they are advantageous to hotels, resorts, and
restaurants in offsetting the low and off-peak business periods.

The MICE industry today is recognized as an important business activity for corporations and
associations. It is also an important market segment for suppliers of services to these customers. At
present, the convention attendee spends appropriately 50% more than the leisure traveler. It is for this
reason that great emphasis has been placed on attracting meetings and conventions to cities all over
the world. More than one million meetings, conferences, and conventions are attended by 81 million
people every year, contributing more than $50 billion annually to the economy. Even in a slow
economy, companies continue to meet. The demand and spending by corporations does not decrease.
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II. The Evolution of the Meetings, Incentives, The meetings, incentives, conventions, and exhibitions industry (MICE) is young, relative to the tourism
Convention and Exhibition (MICE) Industry and hospitality industry as a whole. Before 1960, persons traveling to conventions either drove or
traveled by train. With the introduction of the Boeing 707 in 1958, the airplane provided am affordable
and fast alternative to cars and trains. The "jet age" stimulated business and leisure travel.

The intense construction of hotels and convention centers began in the 1970s. The features added to
attract the convention participants were the removal of interior posts, barrier-free space, flexible walls,
and improved lighting.

In the 1980s, cities began to build convention centers to host large conventions and expositions. The
largest convention center was built in 1989 with approximately one million square feet of flexible
meeting space.

III. Meetings, Incentives, Conventions, and Meetings are conferences, workshops, seminars, or other events designed to bring people together in
Exhibitions order to exchange information.

The following are forms of meeting:

1. Clinic— a workshop where attendees learn by doing. It involves small groups who interact with
each other individually.
2. Forum — an assembly for a discussion of the group's common concerns, featuring a panel of
experts who take opposite sides of an issue.
3. Seminar — a gathering of professionals who work together under the guidance of a discussion
leader.
4. Symposium — a meeting where a subject is discussed by experts and a consensus of the group
is gathered.
5. Workshop—a small group led by a trainer concentrating on skill enhancement.
6. Conference — a formal meeting of professionals for exchange of opinions and information.
7. Convention — a large meeting of people assembled for a common purpose.
8. Colloquium — an informal discussion on group-selected topics.
9. Panel — consists of two more speakers stating their viewpoints.
10. Lecture — a meeting in which an expert speaker addresses an audience.

Meetings are usually organized by corporations, associations, or social, military, educational, religious,
and fraternal groups (SMERF). The reasons for holding a meeting can range from the presentation of a
new sales plan to a total quality management workshop. The number of people attending a meeting can
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vary. Successful meetings require a great deal of careful planning and organization.

Meetings are set up according to the wishes of the client. The three types of meeting setups are theater
style, classroom style, and boardroom style. Theater style is intended for a large audience that does not
need plenty of notes or documents. Classroom setups are used when the participants need to take
notes or refer to documents. The boardroom setup is intended for a small number of people.

Expositions or exhibitions are events designed to bring together suppliers of products and services who
will demonstrate their products and services to the attendees in order to make sales or establish
contacts. Expositions need several hundred thousand square feet of space, divided into booths for
individual manufacturers or their representatives.

Conventions are usually larger meetings which include some form of exposition or trade show. Several
associations have one or more conventions per year. These conventions raise a large part of the
association's budget.

A typical convention has the following format:

1. Welcome registration
2. Introduction of the president of the association
3. President's welcome speech
4. First keynote address by a speaker
5. Exposition booths open
6. Several workshops or presentation on specific topics
7. Luncheon
8. More workshops and presentations
9. Demonstration of special topics
10. Vendors' private receptions
11. Dinner
12. Convention center closes

Conventions are not always held in convention centers. Majority are held in large hotels for a three- to
five-day period.

Incentives are rewards for achievement used by corporations to motivate employee to higher sales
efforts. It may be in the form of goods or trips to glamorous and exotic places.

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 Incentive managers devise programs which involve employee competition and gives rewards to the
highest achiever. Travel rewards are one of the best incentives. Merchandise is another incentive.
Creativity is very important in the incentives business. Incentive managers must continuously come up
with new ideas to motivate employees to improve their performances. Planning an incentive involves
the following:

1. Setting specific goals

2. Measuring performance
3. Communicating standards to participants
4. Choosing rewards appropriate to the participants
5. Celebrating achievements

IV. Key Players in the MICE Industry The major players in the MICE industry are the convention and visitor’s bureau (CVBs), meeting
planners and their clients, convention centers, specialized services, and exhibitions.

A. Meeting Planners

Meeting planners may be independent contractors who offer their services to associations and
corporations as the need arises or they may be full-time employees of corporations or associations.

The professional meeting planner makes hotel and meeting bookings and ensures that the services
contracted have been delivered. The following are the activities of the meeting planner:

1. Plan meeting agenda

2. Establish meeting objectives
3. Predict attendance
4. Set meeting budget
5. Select meeting site
6. Select meeting facility
7. Select hotel(s)
8. Negotiate contacts
9. Plan exhibitions
10. Prepare exhibitor correspondence and packet
11. Create marketing plan
12. Plan travel to and from site
13. Arrange ground transportation
14. Organize shipping
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 15. Organize audiovisual needs

On-site Activities

1. Conduct pre-event briefing

2. Prepare executive plan
3. Move people in/out
4. Troubleshoot
5. Approve invoices

Post-meeting Activities

1. Debrief
2. Evaluate
3. Provide recognition and appreciation
4. Arrange shipping
5. Plan for next year

The meeting planner has several interactions with hotels. These include negotiating the room blocks
and rates. Escorting clients on site inspections gives the hotel an opportunity to show their facilities and
services. The most important interaction is with the catering/ bouquet/conference department
associates especially the services manager and captains because these frontline associates can make or
break a meeting.

B. Convention and Visitors Bureau (CVB)

The convention and visitors bureau (CVBs) is a major player in the MICE market. The CVB is a nonprofit
organization that represents an urban area that tries to solicit business to pleasure-seeking visitors. It
represents the various industry sectors— transportation, hotels and motels, restaurants, attractions,
and suppliers. It has the following responsibilities:

1. To encourage groups to hold meetings, conventions, and trade shows in the area it represents;
2. To assist groups with meeting preparations and give support throughout the meeting;
3. To encourage tourists to participate in historical, cultural, and recreational opportunities
offered by the city; and
4. To develop and promote the image of the community it represents.

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The result of these four responsibilities is to increase the revenues of the city's tourist industry. Bureaus
compete for business at trade shows where interested visitor industry groups gather to do business.

C. Convention Centers

Convention centers are large facilities where meetings and expositions are held. Parking, information
services, business centers, and food and beverage facilities are included in the centers. Convention
centers are usually corporations owned by the city or state governments and operated by a board of
appointed representatives from several groups who have a vested interest in the successful operation
of the center. The board appoints a president or general manager to run the center according to its
mission, goals, and objectives.

Convention centers have several exposition and meeting rooms to accommodate large and small
events. The centers generate revenue from the rental of space which is divided into booths. One booth
is about 100 square feet. Additional revenue comes from the sale of food and beverages, concession
stand rentals, and vending machines. Many centers have their own subcontractors who handle staging,
construction, lighting, audiovisual, electrical, and communications.

An example of a convention center is the Rhode Island Conventions Center which is an $82-million
center. A convention center can generate millions of dollars into the economy of the city in which it is
located.
Event Management

The events in large convention centers are planned many years in advance. The convention and visitors
bureau is responsible for the booking of conventions more than 18 months ahead. The marketing and
sales teams of the convention and visitors bureau and the convention centers work closely with each
other. As soon as the booking becomes definite, the senior event manager assigns an event manager to
work with the client throughout the pre-event, event, and post-event.

A contract is written based on the event profile. It is the event document which stipulates in writing all
the client's requirements and gives important information such as which company will act as decorator
subcontractor to install carpets and set up booths. After the contract has been signed and returned by
the client, the event manager will make follow-up calls for six months before the event to finalize
security, business services, and catering arrangements. The event manager is the key contact between
the center and the client.

D. Specialized Services
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Several companies offer specialized services such as transportation, entertainment, audiovisual, escorts
and tour guides, convention setup, and destination management.

Professional Associations

Since the MICE industry has grown, several professional associations have emerged. These are the
following:

A. Convention Industry Council

The Convention Industry Council (CIC) was founded in 1949 as an umbrella organization for four
professional associations which represent hotels, convention centers, and association executives. Their
purpose was to address the professional concerns of all industry groups and offer certification of
meeting professionals or CMP. At present, the CIC members consist of 30 national and international
organizations representing 81,000 individuals, as well as 13,000 companies and properties.

B. European Meetings Industry Liaison Group

It is also called the European Alliance of the CIC. It is composed of five groups, namely: International
Association of Conference Interpreters, the International Congress and Convention Association, the
International Association of Professional Congress Organizers, Meeting Professionals International, and
the European Federation of Conference Towns.

C. International Association of Professional Congress Organizers (IACPCO)

The IAPCO was founded in 1968. Its headquarters is in Belgium. It has members from 52 companies as
well as individual members. Majority of the members are from Europe but there are members from
Australia, the USA, Canada, Latin America, and Middle East.

D. International Congress and Convention Association (ICCA)

ICCA was founded in 1963. Its headquarters is in the Netherlands. The ICCA has very strict guidelines
which require members to conduct meetings in at least four different continents. It has members from
100 countries which include convention centers, travel agents, airlines, and other industry related
services companies.

E. International Federation of Conference Towns

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Like the ICCA, it has very specific membership guidelines which require cities to have:

1. Conference facilities that can accommodate at least 300 participants;

2. Proper equipment;
3. Traditional meeting services;
4. Satisfactory hotel accommodations for at least 300 participants;
5. Necessary transportation;
6. Team of experts in conference organizations; and
7. Proof that it has hosted at least five international conferences for the past three years.

F. International Association of Convention and Visitors Bureaus (IACVB)

The IACVB originated in the United States. It has several international members. Their most common
services are destination information services, supplies networks, and housing assistance programs.

G. Professional Convention Management Association and Meeting Professionals International

(PCMA and MPI)

The PCMA and MPI are professional associations for industry professionals. They provide education
programs and have excellent publications and resources.

H. Foundation for International Meeting (FIM)

The FIM was established in 1983. It is focused on MICE industry organizations which conduct
international meetings. FIM offers several educational travel opportunities and a unique trade mission
program that links members with their counterparts in other countries.

I. American Society of Association Executives (ASAE)

The ASAE was established in 1920. The headquarters is in Washington, D.C. It has more than 35,000
individual members who manage professional; trade, and philanthropic associations which serve more
than 287 million people and companies worldwide.

Convention and Special Events Management Companies

There are several types of companies or organizations that provide special events management
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services. The following are companies which provide convention and special events management
services:

1. Destination management companies

2. Independent meeting management companies
3. Travel management companies
4. Special events professionals, public relation firms
5. Government entities and tourism offices

Destination Management Companies (DMCs)

Destination management companies are private companies that offer services primarily for inbound
customers. The corresponding European service provider is known as Professional Convention
Organizer (PCO). The primary responsibility of DMCs is to expose their clients to opportunities available
in the surrounding area, and prepare a proposal describing the preferred events and costs, selecting and
organizing the special events for the convention attendees. As soon as they are selected as the DMC for
the inbound group, they will organize the event, secure the site, obtain permits, and hire suppliers such
as the caterer, decorators, bands, and entertainment.

Independent Meeting Management Companies

These companies provide services to Outbound groups. When the independent meeting planner
conducts a meeting away from the home city, he or she will hire the DMC in the host city because
destination management requires experts from the local area. When the independent meeting planner
is in his or her home territory, he or she will provide services to inbound groups to maximize profits.

Travel Management Companies

Large travel management companies organize destination management companies as part of their
larger travel services product offerings. Large travel management companies are similar to the national
chain operations.

Major Event Producers

Major event producers are another type of destination management company. These companies
produce sophisticated and highly technical events such as the Super Bowl and Olympics, and political

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 events such as the Democrat and Republican National Conventions and presidential inaugurations.
These are usually high tech, high visibility, and many have components that are dangerous without
proper precautions. A high level of technical knowledge is required to organize this type of extravagant
events.

Special Events Market

Special events are very important to the attendees of meetings, conventions, and incentive programs.
They encourage networking among attendees, build camaraderie within the group, and provide
memories that last for years. Special events during a convention are the most memorable part of the
program. It gives status to the sponsoring organization. Companies that provide destination services are
very creative and imaginative. They focus on festivity and amusement.

Types of Events in the Special Events Market

The following are the types of events included in the special events market:

1. Corporate events — incentive programs, product introductions, building openings, recognition

events, anniversaries, retirement, groundbreaking, and ribbon cuttings.
2. Meeting, conventions, expositions — opening ceremonies, gala dinner, dances, opening
receptions, awards ceremonies, theme events, trade shows, and expositions.
3. Public events — parades, fireworks, displays, festivals, fairs, inaugurations/ swearing in
ceremonies, holiday observances, military ceremonies, and sporting events.
4. Retail events — grand openings, promotions, celebrity appearances, and seasonal promotions.
5. Social/private events — weddings, anniversaries, graduations, reunions, funerals, memorials,
births, christening, charity balls, runs, and auctions.

V. Emerging Trends There are many developments that will shape the MICE industry. Two of the leading factors are changes
in communication systems, specifically the Internet and its diverse applications, and the changing
character of nations into a global community. The Internet provides an accessible format for virtual
meetings and exhibitions, video conferencing, and online education. This connection to the cyber world
from the home or office makes Europe, Asia, and America accessible to the local tourist office. Many
corporations have already started the process of globalization. At present, smaller organizations and
individuals can equally participate in global integration.

VI. Employment Opportunities in the MICE Industry There are many employment opportunities in the meetings, incentives, conventions, and exhibitions

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 industry. The main qualifications are education and practical experience. Persons who possess these
qualifications will have no trouble finding a job in the MICE industry.

The following are the job opportunities in the MICE industry:

1. Director of Convention Services

2. Convention Service Manager
3. Director of Group Sales
4. Director of Food and Beverage
5. Director of Catering Operations/Sales
6. Director of Marketing
7. Hospitality Coordinator (Room Service)
8. Director of Human Resources
9. Resident Manager
10. Director of National Accounts

Chapter Activities 1. Mr. Jim Reyes is a successful travel agency manager. He was visited by a tourism graduate who
would like to become a travel agent. What advice should Mr. Reyes offer?
2. Evaluate the job satisfaction in your chosen career.
3. Meeting planners must learn how to deal with all kinds of people. Suppose you are the meeting
planner. At the meeting, there is one participant who monopolizes speakers with questions
after each event. Other attendees feel frustrated and come to you to complain. How would you
handle the situation?

REFERENCES Romeo D. Lim, Micro Perspective of Tourism and Hospitality, Mindshapers Company, Inc., 2019

Micro Perspective of Tourism and Hospitality, 3G E-Learning LLC, 2019

Zenaida Lansangan-Cruz, Micro Perspective of Tourism and Hospitality, REX Bookstore, 2019

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PAMANTASAN NG LUNGSOD NG MAYNILA
PLM Business School
Department of Hospitality Management ITM 1204 MICRO PERSPECTIVE OF TOURISM AND HOSPITALITY

Module 10: TOURISM MARKETING

MODULE OBJECTIVES By the end of the module students will:

1. define marketing;
2. clarify the uniqueness of tourism marketing;
3. explain the importance of marketing orientation, market segmentation, and product life cycle to
tourism marketing; and
4. discuss the elements of the strategic marketing process.

I. Definition of Marketing Marketing consists of all those activities necessary to bring a product or service from the manufacturer to
the end user. These activities include:

1. The product or service itself;

2. The methods of distribution;
3. The methods of pricing;
4. The methods of promotion;
5. The form of selling; and
6. The form of advertising.

In relation to tourism, marketing is the systematic process by which an organization tries to maximize the
satisfaction of tourist demand through research, forecasting, and the selection of tourism products and
services to meet that demand. Another definition is it is a management philosophy which, in the light of
tourist demand, makes it possible through research, forecasting, and selection to place tourism products on
the market in line with the organization's purpose for the greatest benefit. This definition suggests three
things. First, it shows that marketing balances the needs of the tourist with the needs of the organization or
destination. This can be explained by an examination of the development of an appropriate orientation.
Second, it emphasizes tourism research which leads to the selection of tourism demand. The concept of
market segmentation is useful at this point. Third, the concepts of the product life cycle and positioning are
useful to stress the proper placement of tourism products on the market and to suggest the suitable
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 marketing policy and strategies which result from that decision.

II. Uniqueness of Tourism Marketing Although the theories and methods of marketing tourism are the same as those of other products, there
are some unique qualities. Tourism is a service. An intangible experience is being sold, not a physical good
that can be inspected before it is bought. For example, a consumer does not buy a bed or a beach but buys
a night's lodging in a hotel at the seashore. Because it is a service, production and consumption take place
at the same time. In manufacturing, goods are produced, stored, sold, shipped, and delivered. The
inventory for tourism is a seat on a plane, a hotel room, a nice beach, or a beautiful or an excellent place
for scuba diving. Unlike manufactured goods, if the inventory is not sold, it is not sold forever,
Manufactured goods can be stored, and while sometimes perishable, they generally are not lost if not sold
on a given day. Tourism supply cannot be stored. Unlike a can of food which, if not sold one day, can be
sold the next day. Airline seats, hotel rooms, or restaurant seats not sold today lose that particular sale
forever. This means that market forecasting and research are extremely important. Producers should
effectively plan the proper amount of facilities and after developing them, use them as completely as
possible.

A second significant characteristic of tourism is that the service provided is usually composed of several
components such as transportation, lodging, food and beverage, attractions, activities, and the like. The
degree of success of any one component influences the success of the other components. Travelers who
have a poor experience on an airline to a particular destination may choose a different airline next time or
suggest to friends and relatives that the trip was not worthwhile, or the destination is not worth visiting.

The third characteristic of the tourism product is that travel intermediaries are a necessity. Because most
tourist services are located far from their potential customers, specialized intermediaries or organizations
are necessary to bridge the gap between the producer and the tourist. While in most industries the
producers exert much control over every stage in the development and delivery of the product, in tourism,
travel intermediaries exercise much influence over the services offered, dictating to whom, when, and at
what price they are sold.

The fourth characteristic of tourism is that the demand is highly elastic, seasonal in character, and subject
to changes in taste and fashion. There are a number of options available to consumers to satisfy a wide
variety of tastes. Sun, sea, and sand, for example, can be found in many places around the world. They
offer many choices to the prospective traveler.

III. Marketing Orientation Before embarking on a program to market tourism in general or a specific tourism product or service in
particular, it is necessary to develop a philosophy or orientation to guide one's marketing efforts. Some
destination areas have marketing efforts that are guided by product orientation. A product orientation
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 emphasizes the products or services that are available. It may be successful if there is a surplus of demand
over supply, Thus, the destination which offers the best product will get the tourist. The old adage that
reflects this is "build a better mousetrap, and the world will beat a path to your door."

When there is more supply than demand, the consumer orientation is used. Consumer orientation places
the needs and wants of the tourist foremost in the mind of the marketer who seeks to provide a product or
service that will satisfy those needs and wants. It involves serving breakfast when the tourist wants it rather
than when it is convenient for management, as well as providing an experience tourist need and want
rather than what the marketer feels they should need or want.

Another orientation is the societal-marketing approach or societal orientation which focuses on the
satisfaction of tourist needs and wants while respecting the long-term interests of the community.

All marketing activities will be guided by the philosophy of those responsible for the marketing campaign. It
is essential that any marketing effort has an agreed-upon philosophy to guide the further development and
marketing efforts of any destination.
IV. Marketing Segmentation The second aspect of the definition of tourism marketing is the selection of tourism demand. Market
segmentation is a universally accepted way of analyzing demand. It is the grouping together of people with
similar needs and wants for the purpose of serving the market better.

Segmentation is based on four assumptions. First, the market for a product or service, such as a vacation; is
made up of particular segments whose members have particular needs and preferences related to the
product or service being marketed. Second, these potential tourists can be grouped into segments whose
members have similar characteristics. Third, a single product offering such as a trip to Baguio will appeal to
some segments of the market more than others. Fourth, some firms and organizations can improve their
marketing efforts by developing specific product offerings to reach specific segments of the market. A
cruise package will be suitable to one part of the market, but a historical tour may be more suitable to
another.

Table 6 shows the four criteria that have been developed by which a market segment can be constructed.
These are:

1. Socioeconomic;
2. Product-related;
3. Psychographic; and
4. Geographic.

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 Table 6. Recreation and Tourism Market Segmentation Bases

Socioeconomic and Demographic

Variables Product-Related Variables

Age Recreation activity

Education Equipment type
Sex Volume usage
Income Brand loyalty
Family size Benefit expectations
Family life cycle Length of stay
Social class Transportation mode
Home ownership Experience preferences
Second home ownership Participation patterns
Race or ethnic group
Occupation

Psychographic Variables Geographic Variables

Personality traits Region

Lifestyle Market area
Attitudes, interests, opinions Urban, suburban, rural
Motivations City size
Population density
Source: Stynes, Daniel J. "Market Segmentation in Recreation and Tourism," 1997.

Socioeconomic or Demographic Segmentation

Socioeconomic criteria are the most commonly used at present due to the ease of collecting data, the
comparability of such information through census, as well as media data, and the fact that such data is easy
to understand and apply. Age and income are very successful predictors of recreation participation.
However, the changing nature of society makes it impossible to rely only on demographic data as a means
of devising marketing strategy.

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 Product-Related Segmentation

A major advantage of product-related criteria is that the information gained is directly related to the
particular product in question. A major defect in some studies is that the information is acquired from the
potential tourist that deals with general benefits obtained or, in the case of psychographic segmentation,
from general attitudes about types of products and services rather than specific products and services.

Psychographic Segmentation

This segmentation technique, although expensive and difficult, is useful in describing segments. It can best
be used in highly specialized and extensively developed markets to supplement the information gained
from simpler analysis. Demographic data may be likened to the bones of a skeleton while psychographic
data is to the flesh. The bones form the basis of the structure, but it is only by covering the form with flesh
that the features become recognizable. Information about an individual's attitudes, interests, and opinions
give a much closer picture of the segment being described.

Geographic Segmentation

Geographic considerations are very important in tourism. At present, destinations use geographically based
studies to identify primary, secondary, and in some cases, tertiary markets. State and national tourist
offices use geographic segmentation to determine the extent of their promotional efforts.

After identifying the market segments, it is necessary to select which segments the destination would like
to attract and serve. This decision can be made only after analyzing which market segments will bring the
greatest benefit to the destination. The segments chosen become the target market. The process of
selection and the corresponding decisions to develop a marketing program suitable to meet the needs of
these segments is known as positioning.

V. Product Life Cycle The concept of the product life cycle is useful to the markets as an additional guide on what strategies
should be used in choosing, attracting, and serving target markets. It suggests that a product, service, or
destination moves through distinct stages. Specific marketing strategies on price, product, promotion, and
distribution are developed within the context of a market planning approach.

Figures 8 and 9 show the stages that a new product goes from inception to decline. These are:

1. Introduction
2. Growth
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 3. Maturity
4. Saturation
5. Decline

Because of the rapid change of consumer lifestyle and technological changes, the life cycle for products and
services become shorter, but the product life cycle remains as a useful concept for strategic planning. Each
stage of the product life cycle has certain marketing requirements.

1. Introduction

The introductory phase of the product life cycle requires high promotional expenses and visibility. The most
opportune time to advertise a product or service is when it is new. Operation in this period is characterized
by high cost, low sales volume, and an advertising program which aims to encourage primary demand. At
this stage of the life cycle, there will be a high incidence of failures.

2. Growth

In the growth period, the product or service is accepted by consumers. Market acceptance means that both
sales and profits increase rapidly, making the market attractive to competitors, Promotion emphasizes
selective buying motives by trade names rather than the number of outlets handling the product or service
increase. More competitors enter the marketplace.

3. Maturity
At this stage, the mature product is well-established in the marketplace. Sales increase but at a slower rate.
Many outlets are selling the product or service. They are very competitive especially with regard to price.
Companies try to find out ways to hold on to their share of the market.

4. Saturation
At this stage, sales volume reaches its peak. The product or service has penetrated the marketplace to its
highest degree. Mass production lowered the prices to make it available to everyone.

5. Decline
In the decline stage, advertising expenses are lower. There are few competitors.

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 Figure 8. Lazer's Product Life Cycle
Source: Mill and Morrison. The Tourism System, 1998

Figure 9. Plog's Destination Life Cycle

Source: Mill and Morrison. The Tourism System, 1998

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VI. Strategic Marketing Process A strategic marketing process can be divided into three elements:

1. Market planning;
2. Target market selection; and
3. The marketing mix selection.

Market Planning Process

In market planning, the objectives are stated and the methods of attaining them are identified. There are
seven steps in the market planning process. These are:

1. Collection of data — Data can be collected in two ways—from secondary sources and from primary
sources. The second method is expensive and time-consuming. Since many organizations are not
skilled to do market research planning, they usually ask the help of other organizations or people
who are experts in it.
2. Analysis of data — Data is usually organized and interpreted. This requires a great amount of skill
and understanding. At present, computers shorten the process of organizing and interpreting
data.
3. Identification of alternative strategies for reaching the desired goal — In most cases, there are
several ways to arrive at a desired goal. For example, an airline company wanting to increase its
percentage of occupied seats may adopt several alternatives. First, it can create a special fare with
certain restrictions such as the seven-day advance buying. Second, it can create a special fare based
on age such as discounted fare for those below 21 years of age. Third, special contracts for surplus
seats may be arranged with groups.
4. Cost-benefit analysis — The cost-benefit analysis of several methods for reaching the goals would
indicate which of the alternatives or combination of them would be best from a financial
standpoint. Some elements are not quantifiable such as the goodwill and improved attitude toward
the company that a program can generate. Frequent flyer programs which airlines offer are
quantifiable since discounts for mileage flown can be computed.
5. Selecting alternatives and plan formation — After the variables and cost benefit for each are
identified, it is then decided which one should be carried out by the other organizations. A plan of
action, including the responsibilities of the members of the organization, can then be established.
6. Control procedures — These are methods which analyze the progress made in achieving the goals
of the project.
7. Plan information — Putting into effect the plan of action and supervising it.

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Target Markets

Tourism USA suggested four steps in identifying target markets. These are:

1. Estimate the approval of an area's attractions. This includes the degree of interest of the tourist on
the area and the length of time the tourist will spend visiting it. For example, a three-day festival
would be more important than a one-day festival. A Disney-type theme park would create more
interest than a crocodile farm;
2. Estimate the distance in both travel time and travel costs. The greater the attraction, the longer the
distance potential tourists will travel;
3. Identify the potential target markets geographically by locating the population clusters within the
maximum distance determined from the estimated travel time and lure of the attraction; and
4. Identify the actual and potential competition in the target market.

Behavioral Characteristics of Target Markets

The behavioral characteristic of potential travelers is very important in identifying target markets. People
travel for different reasons. Some people are interested in historical or cultural activities such as museums
and monuments; others prefer sports events or entertainment, while still others prefer the sun, sea, and
sand, Once the target markets have been defined, the segments must be studied to know why these
people travel to a specific location. Research can determine the behavioral target markets that would be
best suited for the particular product and match the attractions with those who are most likely to enjoy
them and let the tourists know their existence through promotion.

Selecting a Marketing Strategy

There are six steps in determining a marketing strategy. These are:

1. Identifying the market segment;

2. Determining the preferences of the market segment;
3. Determining what influences the segment most—price, product, image, sales persuasion, customer
service, product availability, among others;
4. Realizing the importance of two clients—the traveler and the travel intermediary such as the travel
agent or tour operator;
5. Determining the marketing mix that will influence the segment identified; and
6. Establishing a price policy that will maximize profits by balancing the number of tourists with the
capacity of the attraction.
9
Marketing Mix

The marketing mix is the combination of elements—product, price, promotion, and distribution that
interact and complement each other to attain the objectives of the market plan.

1. Product

A vacation consists of several parts or products such as transportation, accommodation, food and
beverage, sightseeing, entertainment, and souvenirs. Several providers will offer one or more of these
products or services. Thus, each provider is interdependent upon the others to offer an attractive and
satisfying vacation experience. The philosophy of a consumer marketing orientation suggests that products
should satisfy the needs and wants of the customer. It is necessary to select a target market and then
provide products or services that will satisfy its needs.

There are several criteria that should be met in deciding to provide a product or service. First, there should
be a heavy demand for the product or service from at least one important segment with the possibility of
additional business from other segments of the market. Second, new products and services should suit the
general image of the destination area and complement existing ones. Third, new products and services
should be offered in accordance with available supply of manpower, money, and natural resources. Fourth,
any added product or service should contribute to the profit and/or growth of the entire destination.

2. Price

Price is the result of supply and demand. When supply exceeds demand, price tends to decrease. When
demand exceeds supply, price tends to increase. For example, higher prices are charged during the peak
seasons. While lower prices are changed during off-seasons, prices are usually lower for destinations that
are open the whole year while destinations that are not open the whole year have higher price rates.

Price is influenced by competition. If products and services of an agency are similar to those of its
competitors, its price will be similar to theirs. However, if its products and services are unique, it can charge
more than its competitors.

Price is also related to the needs of the market segment that is served. If a destination is perceived by the
members of the market segment as serving their needs and wants, they will be willing to pay a higher price.

The remaining two elements of the marketing mix which are promotion and distribution will be discussed
in the next two chapters.
10
Chapter Activities 1. Research on the marketing implications of each stage in the product life cycle.
2. Create a vacation package that might be marketed in your area. How would you market it? To whom?
3. If you are a restaurant manager in a popular resort area, how do you decide on the price levels of your
meals?

REFERENCES Romeo D. Lim, Micro Perspective of Tourism and Hospitality, Mindshapers Company, Inc., 2019

Micro Perspective of Tourism and Hospitality, 3G E-Learning LLC, 2019

Zenaida Lansangan-Cruz, Micro Perspective of Tourism and Hospitality, REX Bookstore, 2019

11
PAMANTASAN NG LUNGSOD NG MAYNILA
PLM Business School
Department of Hospitality Management ITM 1204 MICRO PERSPECTIVE OF TOURISM AND HOSPITALITY

Module 11: TOURISM PROMOTION

MODULE OBJECTIVES By the end of the module students will:

1. define tourism promotion;

2. explain the relation between promotion and communication;
3. describe the relationship between promotion and the traveler's buying process;
4. illustrate the relationship of promotion to marketing;
5. discuss the importance of promotion planning and budgeting;
6. explain the major types of promotion mix; and
7. clarify the major issues of promotion.

I. Meaning of Tourism Promotion Tourism promotion means stimulating sales through the dissemination of information. It means trying to
encourage actual and potential customers to travel. According to Wahab (1997), the objectives of
promotion are:

1. To make the tourist product widely known;

2. To make it very attractive in order to encourage many people to try it; and
3. To make the message attractive without being dishonest.

II. Promotion and Communication Good promotion is good communication. Essentially, developing the promotional mix is an exercise in
communication. The communication system is made up of the sender, receiver, and a message.

The sender (the travel organization) transmits certain information that will change people's attitudes and
create in them a desire to use the product or service. The receiver is the potential tourist. The message
can be verbal (radio), visual (press advertising, television, film shows, exhibitions, periodicals), or written
(periodicals, brochures, press advertising), For communication to take place, there should be a common
understanding between the sender of the message and the receiver of the message.

The end goal of promotion is behavior modification. its task is to initiate a purchase where none has
1
 been made before initiating a change in purchase behavior by having the tourist buy a different
destination package, or to reinforce existing behavior by having the tourist continue to buy the brand
being promoted. The goal is accomplished through messages that seek to inform, persuade, or remind
the customers.

Information promotion is more important during the early stages of the product life cycle when owners
of new resorts and other attractions will seek promotional outlets to inform the public of the facilities
and amenities that would make their vacation experience worthwhile.

Persuasive promotion is used when an attraction is in its early stage of growth, so its owners put very
much promotional effort in devising persuasive messages and sending them through several channels.

Reminder promotion is important upon reaching a mature stage. Owners will then remind people of
their positive experiences through messages that will• serve to jog the memory and keep the product in
the public's mind.

III. Promotion and Traveler’s Buying Process The relationship between the goals of promotion and the buying process of the traveler is explained in
Figure 10. To achieve the goal of behavior modification, the three types of promotion described are
used. Informative promotion is important to the tourist at the attention and comprehension stages of
the buying process. Persuasive promotion tries to change attitudes, develops intentions to buy, and then
initiates the purchase. Reminder promotion is used after the purchase has been made.

2
 Figure 10. Goals of Promotion and the Traveler's Buying Process
Source: Mill and Morrison. The Tourism System, 1998.

IV. Relationship of Promotion to Marketing Marketing is a total process which includes all elements from production and product improvement to
the final exchange of a product or service for something of value; whereas promotion is one of the major
elements in the marketing mix. Promotion is one of the major tools used in marketing a tourist product.
It is the responsibility of people involved in promotion to devise methods of communication that will
make the greatest number of potential consumers aware of their product.

V. Promotion Planning Promotion planning determines the objectives or goals the organization should strive to accomplish and
the plan of action to attain these goals. According to Schmoll (1997), the following are the results of the
planning process:

1. The objectives of promotion that are consistent with the general marketing;
2. The identification of the market group to which the promotion is targeted;
3. The identification of the specific advertising, sales support, and public relations programs to be
organized;
4. The budget allocation to the various market segments and target groups; and
5. The methods to be used to control and assess the effectiveness of the promotion.
3
Goals

Goals are important in developing promotional strategies. To be effective, goals must be specific,
quantifiable, measurable, realistically attainable, and time-bound. They should be quantitative so that
they can be measured to determine if the outcome is achieved. They should have a specific time period
in which they are to be completed. They should be written clearly and concisely and be as specific as
possible. Examples of goals are:

1. To create and measure the awareness level of a particular tourist attraction in a specific market;
2. To communicate a specific tourism appeal in your promotion to a specific market and then
determine how many people can recall it; and
3. To communicate a basic campaign theme to a specific market and then determine how many
people can restate the premise without aided recall.

Market Targets

A common theme is necessary in establishing a market target. Promotion would be useless if the plan
assumed that all people have the same travel inclinations. It is also important to understand that travel
companies cannot provide services for the whole population. It is mandatory that a promotion plan
recognizes both characteristics of marketing.

Segmentation provides the necessary guidelines for isolating target markets. It identifies people
according to their socioeconomic status, social influences, personality features, attitudes, values,
motivations, and expectations. Certain markets are not compatible for the same destination. For
example, a business traveler who would like to rest at night will not book in a hotel hosting a large
convention. Some markets have a competitive advantage over others and no amount of promotion can
counteract that advantage. Other markets may require more funds than the available promotion budget
can allocate for that market segment. Finally, the market segment may have a limited life and therefore
not justify the promotional effort.

The Message

The message which is chosen for the advertisement follows the goals and objectives of the promotion
plan. It should be understandable, distinctive, and believable. It is promoted in various ways to make it
visible until it becomes very familiar to potential customers. Its purpose is to create an awareness of the
attraction.
4
VI. Promotion Mix Promotion mix is the tool that conveys the message to the customers. The major types of promotion mix
are:

1. Advertising — Any form of paid-for, non-personal presentation and promotion of ideas,

products, or services by a specific sponsor using some form of mass media;
2. Personal selling — An oral presentation to one or more prospective customers on a face-to-face
basis;
3. Sales promotion — Activities, other than advertising and personal selling, that stimulate a
purchase;
4. Sales promotions — These are directed toward the consumer or toward intermediaries.
Examples are displays, shows, exhibitions, demonstrations, contests, giveaways; and
5. Public relations — The presentation of ideas, goods, or services about an organization using
mass media. Unlike advertising, it is not paid for. It is designed to create a favorable image of the
product, service, or business unit.

Advertising

Advertising uses several forms to attract attention, arouse interest, convey information, and encourage
the potential tourist to act in a specific manner. Some forms of advertising are newspapers, direct mails,
television, magazines, radio, yellow pages, outdoor advertising, novelties, directories, and display
materials such as posters, cardboard stands, window displays, dispensers for sales literature, and many
more.

The advantages of newspaper advertising are: it facilitates geographic segmentation because markets for
distribution can be clearly defined; the cost of newspaper advertising is relatively low; most newspapers
are daily newspapers; newspapers have extensive coverage; it is quick and advertisements are easy to
schedule, and most Sunday editions have a travel section.

The major disadvantage of newspapers is the quality of the advertisements and the short life span.

Direct mail, although expensive, ranks high as an advertising medium. Direct mail materials are sent to
people who will most likely use the service offered. Names are obtained from mailing lists of travel
magazines, from passport applications, tour operators, airport flight insurance companies, and frequent
flyer program participants, among others. The effectiveness of direct mail can be measured if it requires
a response by return mail or phone.

5
Brochures, leaflets, travel catalogs, and sales letters are often used in direct mail. Brochures are smaller
in size than a travel catalog but offer more information than a leaflet or folder. Brochures, especially for
cruise companies, can be very expensive and are used as sales tools by travel agents since they provide
detailed information about cabins, prices, schedules, and other things. Illustrated travel catalogs
present a complete travel program with lists of many destinations, services, accommodations, activities,
excursions, and information about the destinations. They are also used as sales tools by travel agents
although not much for direct mail as they are expensive to publish. Travel catalogs for large companies
are usually issued twice a year. Some of them contain two hundred pages.

Leaflets or folders are usually single sheet which provide minimum information. Sales letters are similar.
However, they are more flexible since they are sometimes used with travel catalogs, brochures, or
folders to personalize the mail contact.

Television is a very effective audio and visual medium when wider coverage is required. It is an expensive
medium, so only large organizations use it. Although most people spend much time watching television,
they have difficulty recalling the commercials. Thus, television makes use of repetition in order to
strengthen memory retention.

Magazines offer high-quality print and graphics. They are kept longer than newspapers and are used in
waiting rooms. Magazine audiences are segmented according to the kinds of magazines they read. Thus,
they facilitate advertising to a specific interest group.

Radio is more flexible and cost-efficient compared to other forms of mass media. It allows some interest
segmentation since radio stations have segmented their own markets according to the program they air.
Radio advertising can also be useful in destination regions, so that messages can reach tourists already in
the area or those traveling in the area.

The Yellow Pages gives information to those requiring service. A tourist in a

destination area might use the Yellow Pages to look for a service such as a restaurant or other tourist-
related establishments. The Yellow Pages is used to attract shoppers in both the origin area and in the
destination area.

Outdoor advertising is usually seen in three areas: first, in areas with high visibility like public
transportation vehicles such as buses and taxis; second, on benches particularly along public
transportation routes; third, billboards along highways to make travelers aware of hotels, restaurants,
service stations, and campgrounds. In cities, billboards and signs are seen along major transportation
routes to and from airports and other major roads used by local residents. Outdoor advertising is not
6
suitable for long and complicated messages. Much of the communication is through symbols and
pictures rather than words.
Point-of-sale advertising uses windows, floor displays, counter displays, and literature racks. The main
purpose of point-of-sale advertising is to remind customers of the advertising messages and themes
communicated to the media. It offers opportunities for variety in artwork, size, color, and material used.
Like outdoor advertising, point-of-sale advertising only holds the attention of the customers for a short
time; hence, the message must be short and clear.

Websites

Websites have become one of the most powerful means of directly communicating with persons in the
marketplace. They are specifically valuable to small- and medium sized tourism operators who, in the
past, found it difficult to send information about their products and services to their potential customers.

Sales Promotion

Sales promotions such as free tickets to special events, trade shows, exhibits, and free trips have become
very common at present. A common sales promotion is the familiarization trip. This is used by airlines,
hotels, and destination areas to draw attention to their services or the development of a new service.

Travel shows are also a common form of sales promotion. Travel agencies and tour operators gather
travelers together to promote a special tour. Food, from simple refreshments to formal dinners, are
served. Fairs, conferences, and conventions bring together prospective tourists for a specified time
where displays, slide shows, short films, posters, brochures, and leaflets are available. Films which
feature travel destinations, cruises, and other forms of travel are basic elements of travel shows.

Other sales promotions are local contests, parades, receptions, open houses, reunions, seminars, special
events, speeches, and joint offers between banks and department stores.

Public Relations

The objective of public relations is to build a strong positive image of an organization for the public.
There are three principal characteristics of public relations:

1. It communicates to potential customers in methods other than normally paid advertisement

channels or direct sales effort;
2. It recreates a public awareness in order to enhance advertising and sales; and
7
 3. It creates a positive image for a product, service, or destination in the minds of those who make
public opinion such as journalists, travel writers, and those who act as intermediaries such as
travel agents and tour operators.
The major form of public relations is news release. Other forms are public appearance in radio and
television talk shows. However, since the publicity is not paid for, there is no guarantee that it will be
carried in the media or that it will be in the form that the company has requested. Print news releases
are more acceptable to newspapers than magazines.

Other Forms of Promotion

In addition to the major forms of sales promotion, there are sales gimmicks that are worth mentioning.
For example, the sale of souvenirs and other mementos whose purpose is to. promote or stimulate sales
and generate income. Souvenirs and mementos help remind tourists of a pleasant vacation and a good
experience.

Budgeting

Table 7 shows how the tourist promotion budget for the different segments of the travel industry is
divided. It can be seen that the major part of the promotion budget goes to advertising.

The principal costs in the budgeting process are the cost per message, the cost per reader, and the cost
of repeated messages.

A single message has seldom sufficient impact. Thus, a television or radio spot must be aired many times.
The number of times a message is shown is considered part of the cost. In constructing a budget, the
impact, appeal, retention, reader shift, and costs of advertising are taken into account.

Table 7. Tourist Promotion Budgets

Type Advertising Sales Support Public Relations

Travel Trade (Travel 60% 35% 5%

Agents, Tour
Operators)
Air Carriers 65% 25% 10%

8
 Hotels, Motels 70% 20% 10%
National Tourist 70 – 80% 15 – 25% 5 -10%
Officers

Source: Schmoll, G. A. "Tourism Promotion." London: Tourism International Press, 1997.

VII. Major Issue of Promotion The major considerations of promotion are accuracy and reliability of information on one hand and false
and misleading advertising on the other. Promotion techniques use words that evoke emotion and
create awareness of a product or service.

Superlatives such as exotic, outstanding, superior, the best, the largest, and deluxe are usually used. In
many instances, the travel agency creates a high expectation of an attraction that it oversells it, thereby
creating problems.

False, deceptive, and misleading advertisement can lead to legal action by national governments. Some
examples of unfair or deceptive practices are:

1. False, oral, or written statement, which has the capacity or tendency of misleading consumers
made in connection with the offer for sale, lease, rental, or loan of consumers goods or services;
2. Representations that consumer goods or consumer services have a sponsorship, approval,
characteristic, ingredient, use, benefit, or quality which they do not have; consumer goods or
consumer services are of a particular standard, quality, grade, style, or model which they are not;
3. Failure to state a material fact if the failure deceives or tends to deceive;
4. Disparagement of the goods, service, or business of another by false or misleading
representation of material fact; and
5. Advertisement or offer of consumer goods or consumer services without the intention to sell
them as advertised.

Examples of false and misleading advertisement are brochures which suggest that a hotel has rooms
facing a beautiful view of the beach when in reality it is only the hotel, not the rooms that have a view of
the beach. The statement that "after dinner, we will go to a culture show" is not clear because it does
not state whether it is part of the tour or optional.

Chapter Activities 1. Research on the appropriate advertising media for each of the following:
a. A family restaurant
b. A resort hotel

9
 c. A luxury hotel
d. A fast-food restaurant
2. Create an advertising program for a cruise company.
3. As a resort hotel manager, would you advertise your destination area along with your individual
resort property? Why or why not?
REFERENCES Romeo D. Lim, Micro Perspective of Tourism and Hospitality, Mindshapers Company, Inc., 2019

Micro Perspective of Tourism and Hospitality, 3G E-Learning LLC, 2019

Zenaida Lansangan-Cruz, Micro Perspective of Tourism and Hospitality, REX Bookstore, 2019

10
PAMANTASAN NG LUNGSOD NG MAYNILA
PLM Business School
Department of Hospitality Management ITM 1204 MICRO PERSPECTIVE OF TOURISM AND HOSPITALITY

Module 12: TOURISM DISTRIBUTION CHANNEL

MODULE OBJECTIVES By the end of the module students will:

1. define tourism distribution channel;

2. describe the types of travel intermediaries;
3. discuss the functions of specialty intermediaries;
4. compare travel agents with tour operators;
5. describe the distribution channel;
6. explain the relation of distribution to marketing; and
7. discuss the distribution strategies.

I. Meaning of Tourism Distribution Channel The tourism distribution channel produces the link between the suppliers of travel services and the
consumer. It is a system of distribution that makes the product available. Robert McIntosh defined it as
"an operating structure, system, or linkage of various combinations of travel organizations through
which a producer of travel products describes and confirms travel arrangements to the buyer." This has
a twofold purpose—to make sure that potential travelers can obtain the information they need in
choosing a vacation or trip and to make the necessary reservations. Distribution may be direct or
indirect. Direct distribution occurs when the producer sells directly to the consumer; indirect
distribution takes place when the sale to the consumer is made through an intermediary (See Figure
11).

Unlike manufacturing products, tourist products cannot be packaged and shipped to the consumer nor
can it be held in inventory. The hotel room or airline seat must be sold every day in each flight or trip.
Sale lost today is lost forever. In tourism, more than in other industries, sales intermediaries or
individuals who operate between the producer and consumer are necessary. The major function of
intermediaries is the packaging of a number of complementary travel products in order to achieve a
vacation experience for the consumer. A retail travel agent may book an airline seat, a hotel room,
sightseeing tours, and a rented car, and offer this vacation to the tourist. A tour operator may assemble
the above components into a tour to be promoted in a brochure and sold through retail travel agents.
1
Thus, the distribution system aims to get the necessary information to the consumer to make a sale and
allow the sale to be made or confined.

In most industries other than tourism, the supplier or producer has full control over the product—its
pricing, its quality, and the manner in which it is distributed and promoted. In the tourism industry, the
distributing sector is much stronger. The intermediaries mentioned above have a greater power to
influence and to direct consumer demand than their counterparts in other industries. The distributors
control so much demand and have so much bargaining power over the suppliers of tourist products that
they are in a position to influence pricing, product policies, and promotional activities.

The success of tourist service providers depends on their ability to promote and advertise as well as
their ability to gain access to the intermediaries. The WTO has identified the following functions which
intermediaries perform on behalf of producers:

1. Intermediaries can achieve better results in the field of distribution and selling than the
producer himself through specialization. They have direct contact with the markets and
potential customers which would be difficult and more costly for the producer;
2. Intermediaries assemble the heterogeneous service of different producers into a "package" of
services that is meaningful and attractive to the customer; and
3. Intermediaries not only create a complete package of tourist services but also sources of
information about destinations, types of services, and their advantages and disadvantages,
thus, giving the potential tourist a wide range of choice and alternatives.

2
 Figure 11. Tourism Distribution System
Adapted from: Wahab, Salah, L.J. Crampon, and L.M. Rothfield. Tourism Marketing.
London: Tourism international Press, 1996

II. Travel Intermediaries There are three types of travel intermediaries: travel agents (wholesale and retail), tour operators, and
specialty channels.

A. Travel Agents

A travel agent arranges travel services from suppliers such as airlines, bus companies, railroads, cruise
ship companies, car rental agencies, hotels, and sightseeing operators. In general, there are two types
of travel agents—wholesale and retail.

1. Wholesale travel agents or wholesalers organize tour packages which are sold to the public
through a network or retail agents. They do not deal directly with the consumer and they may
or may not operate the tours it markets. Many times, wholesalers enter into a contract with a
tour operator for all or certain land arrangements. Wholesale travel agents may organize tour
packages sold under the agency's name or they combine the land packages assembled by a
ground operator with air transportation to form new packages.

3
 2. Retail travel agents sell travel services directly to the consumer. They handle the actual sale of
tours, air tickets, and other travel services. They are compensated by the supplier or wholesaler
for the sales he or she made. The consumer does not pay any fee for the services of the retail
agents. The retail travel agents are important to the traveler because they act as impartial and
independent businessmen who recommend the best offer. They represent an outlet for the
products and services of suppliers and wholesalers since it would be expensive, if not
impossible, to establish a company system of distribution nationwide.

B. Tour Operators

Tour operators deliver the services specified in an advertised tour package. The services offered by a
tour operator may vary from basic airfare, transfers, hotels, meals, and sightseeing, to entertainment.
Some tour operators own buses, hotels, or other facilities or they may obtain ground services from a
contractor such as specific hotels, bus companies, restaurants, car rental companies, or attractions.

In some cases, the services of a tour operator are developed for and marketed directly to the general
public. In other instances, they are organized according to the specification of a wholesale travel agent
who markets them under the agency's name through the retail agents of the agency or through airlines.

A tour operator usually offers several tour packages in a single season. A tour package is a combination
of two or more travel service components put together and sold as a single unit. Packages may be for
individuals or groups and may be escorted or unescorted.

Tour operators who are referred to as ground operators normally provide services at the destination
only and they do not package transportation to or from the destination. Their services usually include
hotel transfers, overnight accommodations, sightseeing, and sometimes, special arrangements which
collectively are called land arrangements. Ground operators who specialize in services for incoming
visitors particularly tourists from foreign countries are called receiving agents or inbound agents.

The success of many foreign travel destinations depends on inbound agents. Foreign inbound tour
operators often specialize by the FIT (Foreign Independent Travelers) or GIT (Group Inclusive Tour)
market. The FIT market has become highly segmented by interest areas in many parts of the world.
Thus, there is a need for specialized tour operators.

C. Specialty Intermediaries

Specialty intermediaries include incentive travel firms, meeting and convention planners, hotel
4
 representatives, interline representatives, association executives, corporate travel firms, travel
consultants, motor coach brokers, and the like. These intermediaries may represent either buyers or
suppliers and have the power to influence how, where, and when the travel product will be distributed.

Specialty intermediaries may receive commission fees from clients or serve as salaried employees who
offer travel services on behalf of their organizations. The following are examples of specialty
intermediaries:

1. Incentive Travel Company — The incentive travel company may either sell its professional
services of planning, promoting, and executing an incentive travel program for a buyer or act as
an intermediary for both buyer and suppliers. Incentive travel is given to members of a sales
force who have reached their quotas and received bonuses in the form of travel. Incentive
travel requires a greater knowledge of destinations and services available than business travel
which deals primarily with hotels and transportation facilities. Thus, incentive travel companies
were established to meet this special need.
2. Meeting and Convention Planners and Destination Planners — Meeting and convention
planners specialize in planning and organizing meetings mainly for corporate clients and
professional associations. Many of the meeting planners have credentials as Professional
Congress Organizers (PCO) or Certified Meeting Professionals (CMP) and are members of
Meeting and Planners International, a professional and educational organization for those who
manage meetings. Destination planners are independent professionals who help meeting and
convention planners. They organize support activities such as city tours, limousine service or
fleet bus service, and special events.
3. Corporate Travel Firms — Corporate travel firms specialize in handling corporate travel
accounts. There are two ways of handling corporate travel accounts. The first is for a
corporation to work with a travel agent. The second is for a corporation to establish its own
travel agency. The advantage of the first option is that it offers not only an established market
but also increases worker productivity because once a business relationship is established,
there will be less shopping to be done. Thus, one agent can handle more business. The main
advantages of the second option are convenience and service. Corporations are now allowed to
negotiate discounted fares for large amounts of travel with several airlines.
4. Motor Coach Brokers — These intermediaries organize motor coach tours to full-time
professionals.

III. Distribution Channels There are three distribution channels. These are:

1. Product supplier-consumer channel — This is direct distribution without going through

5
 intermediaries. It is the direct selling of airline tickets and hotel rooms to the consumer.
2. Product supplier-travel agent-consumer channel — This is the most popular form of buying
services and products in the tourism industry. It is through an intermediary in the form of a
travel agent who provides products and services to the consumer; and
3. Product supplier-tour operator-consumer channel —The tour operator strives to create
demand. He or she makes arrangements with the suppliers such as block booking on airlines,
hotels, restaurants, and attractions to produce a travel package which is sold to the travel agent
or directly to the consumer. Demand can be produced by tour operators who buy blocks of a
service or product and sell the package at a reduced price. The bulk purchases generate a
lower price than an individual purchase. Thus, a tourist who travels with a group pays less than
an individual tourist who buys each component of a trip separately.

Types of Distribution Channels

Distribution channels have three classifications: consensus channels; vertically integrated channels
controlled by intermediaries/retail travel agents; and the vertically-coordinated channels led by
producers/tours operators.

1. Consensus Channels
In a consensus channel, no part of the channel exercises control over the system. The several
participants in the system work together for their mutual interest. Distribution channels of this
type are found in North America and the United Kingdom.

2. Vertically-integrated Channels
In a vertically-integrated channel, the functions of production and retail distribution are owned
and/or controlled by a single company. Since tour operators have emerged from the retail
travel agency business, vertically integrated channels controlled by retail travel agents are
usually found in the United Kingdom, West Germany, and North America.

A tour operator may exert control over the entire channel activity through retail outlet
ownership and organization of the channel. This system is usually found in West Germany
where tour wholesalers’ control not only their own chain of retail outlets which deal exclusively
with the products of one wholesaler but also their own system of direct mail distribution.

3. Vertically-Coordinated Channels
In a vertically-coordinated channel, the tour operator's control over the channel comes from
contractual or financial commitments with retail agents. Franchising is an example of such a
6
 system. In West Germany, franchising is a large part of travel distribution. The franchisor of a
particular company agrees to retail only through certain retail outlets and to promote no other
methods of distribution. The retail franchise benefits from the marketing activities of the
franchisor.

IV. Relation of Distribution to Marketing The distribution system is part of the marketing mix. Once marketing objectives and the appropriate
targets have been established, an appropriate mix is determined. The chosen marketing mix will reach
the market segments and fulfill its objectives. The system of distribution selected will affect parts of the
marketing mix.

The product offered may be modified. If airline seats are distributed through a tour operator, the
schedules and seating arrangements may have to be adjusted to meet the needs of the intermediary.

The promotion strategy may also change once the retail have agent does not carry any inventory, there
is little or no incentive for the agent to promote a specific destination. The burden will fall on the
supplier. However, a wholesaler carries an inventory of airline seats and hotel beds. Thus, the
wholesaler has an investment in terms of reservations in the destination and will share in promoting the
destination in order to sell tours to make profit. For the supplier, the promotional burden is shared.
Joint or cooperative advertising may be proper.

The pricing policy of the supplier will also change depending on the decision to distribute directly or
indirectly. When a tour wholesaler buys in bulk such as 100 rooms per night for three months, a lower
rate per room will be charged.

V. Strategies There are three strategies, namely: intensive distribution, exclusive distribution, and selective
distribution. An extensive distribution strategy involves maximizing the exposure of the travel product
by distributing through all available intermediaries. Exclusive distribution occurs when a supplier or
wholesaler limits the channels and outlets for the products. Selective distribution is a strategy which is
between intensive and exclusive distribution.

The characteristics of the product can determine the appropriate distribution channel. Selective or
exclusive distribution is suitable for products that have a high unit price are not bought frequently and
have a price that is not subject to price cutting.

Another consideration in selecting a strategy is the power exerted within the channel. The amount of
channel power depends on the degree of concentration. The fewer tour wholesalers a destination goes
through, the greater the power these few wholesalers have over the destination and the more demands
7
 they can make on the destination. Also, the more wholesalers, the higher the cost of selling to and
servicing them.

Chapter Activities 1. Prepare a complete incentive travel package to a desirable location as a reward for employees
in your organization who have exceeded the corporate goal. Select a travel destination, mode of
travel to the destination, local transportation, accommodations, and restaurants in the area for
this travel incentive package.
2. As president of a newly formed tour company, you must now decide if your tours will be
marketed through retail travel agents or whether you should sell them directly to the
consumers. Identify the advantages and disadvantages of each alternative.
3. You are a marketing director for a cruise line which operates luxurious ships with excellent
service and cuisine. How would you identify the most promising distributors?

REFERENCES Romeo D. Lim, Micro Perspective of Tourism and Hospitality, Mindshapers Company, Inc., 2019

Micro Perspective of Tourism and Hospitality, 3G E-Learning LLC, 2019

Zenaida Lansangan-Cruz, Micro Perspective of Tourism and Hospitality, REX Bookstore, 2019

8
PAMANTASAN NG LUNGSOD NG MAYNILA
PLM Business School
Department of Hospitality Management ITM 1204 MICRO PERSPECTIVE OF TOURISM AND HOSPITALITY

Module 13: TOURISM PLANNING

MODULE OBJECTIVES By the end of the module students will:

1. define planning;
2. explain the reasons for tourism planning;
3. discuss the consequences of inadequate or poor planning process;
4. compare tourism in developed countries with that of developing countries;
5. clarify the roles and responsibilities of tourism planning;
6. explain the barriers to planning; and
7. analyze the tourism planning process.

I. Meaning of Planning Planning is a dynamic process of determining goals, systematically selecting alternative courses of
actions to achieve those goals, implementing the chosen alternatives, and evaluating the choice to
determine if it is successful. The planning process regards the environment which includes political,
physical, social, and economic elements as interrelated and interdependent components which should
be taken into account in considering the future of a destination area.

II. Reasons for Tourism Planning Tourism planning is greatly needed. The stagnation and decline of a destination or attraction may be
due to the lack of planning or poor planning. According to the destination life cycle concept as defined
by Plog (1973), destination areas tend to rise and fall in popularity according to the whims of those in
the predominant "psychographic" groups to which they appeal at different stages in their development
histories. This concept is similar to the product life cycle and product adoption curve ideas discussed in
most marketing textbooks. The only difference is that it relates certain personality profiles to the
destination area's stages of growth. Thus, a new and/ or exotic destination tends to appeal first to Plog's
allocentric group—the innovators in the travel market who look for less-crowded and unique
destinations. As the destination area becomes more widely publicized and better known, it loses its
appeal to the allocentrics. They are replaced by the midcentrics who greatly outnumber the allocentrics
in the population. Plog believes that the midcentric appeal stage in the destination area's history is
similar to the maturity phase of the product life cycle when sales volumes are at their peak. At this
1
 point, the destination area can be said to have mass market appeal. Eventually, as time progresses, this
destination area also loses its appeal to the midcentrics, who are then replaced by the psychocentrics
who, like the allocentrics, represent a much smaller proportion of the population. According to Plog, the
psychocentric stage is the final point in the destination area's life cycle because it has lost its appeal to
both the market innovators and the mass market. One of the most important messages of Plog's
hypothesis is that destination areas can "carry with them the potential seeds of their own destruction if
they allow themselves to become overcommercialized and to discard the unique appeals which made
them popular in the first place."

Although Plog's concept appears to suggest that all destination areas eventually suffer the same fate,
the years of experience gained since it was publicized show that there have been several exceptions to
this rule. This experience indicates that destination life cycles can be extended if change is anticipated
and if steps are taken to adapt to change.

The first step would be to hold development to a particular level in order to maintain the integrity of
the area. The second would be to have a rigid development plan to which developers must confirm. The
third would be to develop new attractions to stimulate new growth.

III. Consequences of Lack of Tourism Flaming or Poor The following are the symptoms of inadequate or poor tourism planning:
Tourism Planning
A. Physical Impacts

1. Damage or permanent alteration of the physical environment;

2. Damage or permanent alteration of historical/cultural landmarks and resources;
3. Overcrowding and congestion;
4. Pollution; and
5. Traffic problems.

B. Human Impacts
1. Less accessibility to services and tourist attractions for local residents resulting in local
resentment;
2. Dislike of tourists by local residents;
3. Loss of cultural identities;
4. Lack of education of tourism employees in skills and hospitality; and
5. Lack of awareness of the benefits of tourism to the destination area.

C. Marketing Impacts
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 1. Failure to capitalize on new marketing opportunities;
2. Erosion of market shares due to the actions of competitive destination areas;
3. Lack of sufficient awareness in prime markets;
4. Lack of a clear image of destination area in potential markets;
5. Lack of cooperative advertising among individual operators; and
6. Inadequate capitalization in packaging opportunities.

D. Organizational Impacts
1. Fragmental approach to the marketing and development of tourism, often involving
"competitive splinter groups";
2. Lack of cooperation among individual operators;
3. Inadequate representation of the tourism industry's interests;
4. Lack of support from local public authorities; and
5. Failure to act on important issues, problems, and opportunities of common interest to the
industry.

E. Other Impacts
1. Lack of sufficient attractions and events;
2. High seasonality and short lengths of stay;
3. Poor or deteriorating quality of facilities and services; and
4. Poor or inadequate travel information services.

IV. Tourism Planning in Developed Countries In general, planning for tourists is less difficult in developed countries than it is in developing ones.
Planning is important and should provide a quality environment for both tourists and residents. The
planning process for tourism development is the same as in city or regional planning. Most problems
involve policy decisions on alternative land uses for the health and welfare of the citizens in countries
with less control over the economic sector. Guidelines and ordinances can restrict private development
to prescribed areas, while in others, all developments can be directed by the central government.

The encouragement of tourism is an important responsibility of government organizations. Target

countries or states can be identified as potential tourist generators through research and market
analysis. Proper planning includes government assistance in direct advertising to attract tourists.

In developed countries, planning a construction of infrastructure facilities is a must, particularly in areas

that do not have them. For regions that have existing infrastructure, the planning process should
include alternatives to improve or further develop it.

3
V. Tourism in Developing Countries Tourism is important in bringing the much-needed foreign currency to developing countries. Mexico
and Spain for example have benefited very much from tourism. For a number of countries such as
Malta, Morocco, Tunisia, and Cyprus, tourism receipts contributed largely to the national income. Other
advantages are increased employment opportunities and the development of infrastructure. Roads,
water, and Sewage systems provided for tourists also help local industries. Government involvement in
tourism planning is important not only for developing infrastructure but also in determining the cultural
impact of tourism on the environment and people. An ill-planned tourism industry will create problems
of visual monotony, uniformity, and the leveling of the landscape. Thus, it is necessary for governments
to be involved in all stages of tourism, from preliminary planning to market promotion. If private
investment is lacking, the state should become involved.

Planning in developing countries should consider the cultural impact of tourism on the area. Many
times, the culture may be so fragile that tourism can greatly influence it, particularly in developing
countries. In a developing society, people tend to adopt the lifestyle of the tourists changing their
clothing, food, and other customs. in this way, the local culture is greatly influenced or altered.

VI. Roles and Responsibilities for Tourism Planning In communist countries, all planning is done by the national government. In democratic countries, the
government and the private sector play a valid role in the tourism planning. Experience shows that the
process of joint participation and close cooperation of the private and government sector produces the
best results and those plans are more likely to be successfully implemented if the private sector is
actively involved in the planning process.

Tourism planning should take place at many levels within a country. The starting point for the tourism
planning process in any country should be the development of a national tourism policy. This policy
represents the basic foundation from which more specific goals, strategies, objectives, and plans are
developed. Thus, all planning efforts should be complementary to the national tourism policy. All
tourism plans should be given time spans and should be reviewed and modified at the expiration of
their time spans. Since change is inevitable and continuous, it follows that tourism policy making and
planning have to be dynamic processes. Because policies tend to be more broadscale than tourism
plans, they are usually valid for a greater number of years. The life span of a tourism plan does not
usually exceed five years.

VII. Barriers to Planning The following are the barriers to tourism planning and the problems associated with it:

1. Many people are against planning in principle, particularly within the free-enterprise system.
Many businessmen view tourism planning as an encroachment into their domain and are
skeptical of its real value;
4
 2. It is expensive. Effective tourism planning must be based upon detailed resource analysis and
market research;
3. The tourism industry is complex and diverse. A large number of government departments have
activities that impinge on tourism. Unlike the automobile manufacturing business, the tourism
industry cannot be readily identified. Although the frontline recipients of tourist expenditures
such as hotels, airlines, resorts, restaurants, and commercial attractions are obvious, others like
retail stores and banks are not normally seen as part of the tourism industry. Another
complication is that many tourism businesses receive their income both from visitors and from
local residents; and
4. Tourism is characterized by few large businesses and various smaller enterprises. There is also
the tendency for individual operators to consider themselves as being in the hotel industry or
restaurant industry rather than accepting their broader role in the tourism industry.

Despite these barriers to tourism planning, an increasing number of plans are produced each year
around the world. There are indications that tourism planning will be given a higher priority in the
future and that more destinations will become involved in this important process.

VIII. The Tourism Planning Process Planning is an ongoing process that must keep up with the changing character of the world and of the
destination area. The planning procedure follows a step-by-step pattern.

There are five essential steps in the tourism planning process:

1. Background analysis phase;
2. Detailed research and analysis phase;
3. Synthesis phase;
4. Goal-setting, strategy selection, and objective-setting phase; and
5. Plan development phase.

Background Analysis

The first step in the tourism planning process is a situational analysis that provides the basic direction
for the succeeding steps. This is the logical launching point for most tourism plans since most
destination areas, whether they are countries, states, provinces, regions, or local communities, have
some existing tourism activity and regulatory/policy framework for the industry.

In establishing a national tourism plan, the national tourism policy must first be considered and
interpreted. If a state or province has a tourism policy, it should be carefully reviewed at the start of the
plan. Tourism policy goals are usually classified into four, namely: economic, consumer/social,
5
resource/environmental, and government operations.

There is a hierarchy of goals and objectives in tourism policy making and planning. The tourism policy
goal or goals are the long-term targets in the destination area that provide the frame and rationale for
supporting goals and objectives. At each level in the hierarchy, the goals and objectives become more
specific and more action-oriented. Existing programs or activities of both the public and private sector
organizations should also be identified in the background analysis.

The background analysis should produce an inventory or list of the area's tourism resource components.
Table 8 shows the categorization of the tourism resource components and their subcomponents. These
resource components and subcomponents constitute the existing tourism product of the destination
area.

Table 8. Categorization of Tourism Resource Components

Component Subcomponent

Natural Features Landscapes

Scenery
Unique features
Flora and fauna
Buildings

Historical and Cultural Features Sites

Themes
Communities/subcommunities
Attractions

Tourist Operations and Facilities Accommodations

Food service
Events
Information centers

Hospitality Services Reservation systems

Commercial stores and services (banks, retail stores)
6
 Transportation systems (road, rail, airport)
Underground services
Population and workforce
Ethnic community

Human Resources Attitude toward tourism

Employment/unemployment Industries

General Socioeconomic Economic conditions

Social problems
Land ownership

Present Land Uses Planning and zoning regulations

Future growth and development

Source: The Economic Planning Group of Canada

The third step in the background analysis is a description of existing tourism demand in the destination
area using readily available secondary or published sources of information. Ideally, this information
gives a profile of demand along the following lines.

Modes of travel to and within the destination area and past usage volumes (aircraft, bus, train, ship,
private automobile):

1. Visitation volumes and patterns by month or season;

2. Geographical origins of tourists;
3. Geographical destinations of tourists;
4. Tourists’ demographics such as age, income, education, occupation, and travel party
composition;
5. Trip purposes;
6. Activity participation;
7. Market segments (families with children, singles, tour groups, business groups);
8. Lengths of stay in the area;
9. Tourist expenditure within the area; and
10. Usage of facilities such as accommodation, attractions, events, and recreational facilities.

7
The final step in the background analysis is a review of the major strengths, weaknesses, and problems
and issues within the destination area's existing tourism industry. It should be introspective, critical, and
objective. It should involve various individuals, including public sector, tourism officials, selected
tourism industry operators, and selected representatives from tourism industry organizations. Their
opinions will provide a degree of objectivity and broad industry experience that may not be readily
available in the area itself.

Detailed Research and Analysis

A valid tourism plan cannot be formulated without research. Research should be concentrated in four
distinct areas, namely: resources, markets, activities, and competition.

Using the inventory of tourism resource components as base, the first step in the resource analysis
involves the preparation of maps identifying the location of major resources. The capacities of the
various tourism resources are then measured. Although the capacities of some of the tourism resource
components are easily measured such as guest rooms, restaurant seats, camp sites, and golf courses,
the capacities of others such as boating in lakes and rivers, beaches, and historical landmarks are not.

The last stage of the resource analysis is the resource classification. This is a ranking or grading of the
scope of appeal of the tourism resources of the destination area. Thus, the individual resources or zones
within the destination are described as being of international, national, regional, or local significance or
as having international, national, regional, or local market appeal.

The second component of the detailed research step is the activity analysis. Activities include all the
things the tourist can do while visiting the destination area, ranging from recreational pursuits like
skiing, to more passive pursuits such as shopping and sightseeing. It is necessary to classify the activities
according to their range of appeal. It is also important to identify the months of the year in which these
activities can be pursued. Because many destination areas suffer from the problem of seasonality, this
part of the analysis helps determine those activities that will generate demand outside of peak periods.

A good tourism plan will include some original research on the existing and potential markets for the
destination area. The original research carries out one or more surveys of existing tourists and potential
tourists. Surveys of existing tourists are normally carried on while they are within the destination area.
Normally, the personal interview technique is used either at exit/entry points or at important tourism
facilities.

A variety of survey techniques can be utilized to research potential markets. These include personal
8
interviews, group sessions, telephone interviews, and mailout and mail-back questionnaires. They can
be directed toward the individual pleasure travelers in a specific geographic market (household surveys)
or aimed at the channels of distribution (tour wholesalers/operators and travel agents) and other travel
influences (convention planners, club/affinity group executives, corporate travel departments). This
research helps determine the attitude toward future travel to the destination area, levels of awareness
of the area's tourism resource components, images of the area, the major competitive destinations, and
the steps needed to attract potential visitors. It can also provide an opportunity to "market test" new
tourist attractions/packaging/activity ideas.

A tourism plan must consider the competitive advantages and future plans of other areas as well as its
own. Destination areas closer to a prime market are called intervening opportunities because the
tourist must pass them to reach the subject destination area.

The detailed market research can assist in identifying the most competitive destinations, their individual
strengths and weaknesses, and the steps to be taken to make the subject destination area unique
among its competitors.

Synthesis

The third step of the tourism planning process is where major conclusions regarding the previous work
are formulated. It is one of the most important and creative steps in the process. A comprehensive
tourism plan will produce conclusions on five distinct subjects:

1. Tourism development;
2. Tourism marketing;
3. Tourism industry organization;
4. Tourism awareness; and
5. Other tourism support services and activities.

The first step in the synthesis phase is the preparation of position statements on each of the five
subjects. The position statement indicates "where we are now" with respect to development marketing,
industry organization, awareness, and other support services. One of the participating groups is given
the responsibility of preparing preliminary position statements, usually either the tourism consultants
or the public sector tourism officials. These are then reviewed and discussed by all participants and a
consensus is reached on the final wording of the statements. Position statements may be expressed in
one sentence or documented in several pages.

9
The second step is to determine "where we would like to be" or the desired future situation. It is useful
for the destination area to verbalize these desired states in terms of tourism development, marketing,
industry organization, awareness, and support services.

Tourism plans provide the "bridge" between the present situation in a destination area. They provide
the means to an end.

Goal Setting, Strategy Selection, and Objective Setting

The fourth step in the tourism planning process is to define the planning goals, strategies, and
objectives. They must be complementary to policy goals and objectives.

In Ontario, Canada, the major policy goal for tourism was "to stimulate employment, income, and
economic development through the systematic improvement, development, and marketing of Ontario's
tourism industry." This can be classified as an economy-oriented approach to tourism. Another
destination area suffering from overcrowding, or a too rapid pace of development may have chosen a
more conservation-oriented approach. A tourism plan has a relatively short life span of usually five
years. Planning goals should be achieved within that period. A destination area with an economy-
oriented policy approach may want to obtain the maximum economic impact from tourism within the
life span of the plan. This area will probably adopt a planning goal that emphasizes the development
and marketing of specific resource components which are likely to produce the greatest economic
return within the planning period.

Once the planning goals have been set, there are various approaches or strategies that can be
employed to achieve them. Within a specific destination area, different approaches or strategies may be
used for the sub-areas within it. Some sub-areas may have economy-oriented strategies.

The tourism plan objectives come logically from the selected strategy.

Figure 12 provides an example of a region within Ontario showing the linkage among goals, strategy,
and plan objectives.

Planning Goal No. 1

To increase the economic benefits of tourism within the Atikokan area
Strategy Components
1. Attach a high priority to tourism as an economic activity;

10
 2. Broaden the market appeal of the area and increase visitation to the area;
3. Spread demand more evenly throughout the year;
4. Diversify the range of activities/opportunities available to visitors;
5. Make the area a primary destination point for a greater number of visitors;
6. Encourage stopovers by other visitors who might otherwise pass by;
7. Decrease the dependence on US pleasure travel markets;
8. Increase the penetration of Canadian and overseas markets;
9. Encourage one or two new developments of an intermediate scale; and
10. Improve, modernize existing businesses.

Plan Objectives Related to Goal No. 1

1. To create new images of what the Atikokan area has to offer to visitors, that is, much more
than fishing and hunting;
2. To develop and promote new attractions, facilities, and events that appeal to a broad range
of interests;
3. To develop and promote new travel/recreational opportunities associated with the major
activities of destination and pass-through visitors;
4. To increase the visitor’s market's awareness of the area's facilities, services, activities,
attractions, and events;
5. To increase awareness of the activities/opportunities afforded by the Atikokan area;
6. To develop means of communication to stimulate visitors already within the area to take
advantage of its tourism/recreational opportunities;
7. To increase per capita visitor expenditures by capturing those segments of the visitor
markets that have higher-than-average expenditures on vacation travel, by increasing
average lengths of stay and providing more "spending opportunities;"
8. To improve the quality of existing tourism facilities/services in order to increase repeat
patronage and to enhance positive word-of-mouth advertising;
9. To develop facilities and services that can used during off-peak periods; and
10. To develop vacation packages that can be sold year-round or during a specific season.

Figure 12. Linkage of Planning Goals, Strategy, and Plan Objectives

Source: Mill and Morrison. The Tourism System, 1998.

Plan Development

The last step of the tourism planning process is the development of the plan. The plan includes the
11
 actions needed to achieve the objectives, implement the strategy, and satisfy the planning goals. A
comprehensive plan deals with the development, marketing, industry organization, awareness, and
support services. It takes each of the plan objectives and specifies the following:

1. The programs and actions required to achieve each plan objective;

2. The roles and responsibilities of the public and private sector in carrying out these programs
and actions;
3. The specific development and marketing concepts and opportunities that will help achieve
certain objectives;
4. The funds required to carry out specific programs and actions;
5. The sources of these funds;
6. The timetable for carrying out specific programs and actions within the plan; and
7. The method for monitoring the success of the plan on a periodic basis during its term.

Once the tourism plan has been laid out in detail, it is then written in formal reports, either by a private
tourism consulting firm or by public sector tourism officials. The tourism plan reports are presented in
two parts. The first is the summary report containing the plan itself, while the second is a more detailed
technical report containing all the research, findings, and conclusions produced during the planning
process. The reports are usually prepared in draft. These are then reviewed and revised by public and
private sector representatives before they are finalized for publication.

Chapter Activities 1. The tourism minister of a developing country is anxious to prepare a tourism policy for tourism
development. As a planning adviser, list 10 recommendations that you would want to be
included in this policy. Support each.
2. Research on the results of good planning in a specific area.
3. Conduct a study on the purposes of a post-implementation planning review.

REFERENCES Romeo D. Lim, Micro Perspective of Tourism and Hospitality, Mindshapers Company, Inc., 2019

Micro Perspective of Tourism and Hospitality, 3G E-Learning LLC, 2019

Zenaida Lansangan-Cruz, Micro Perspective of Tourism and Hospitality, REX Bookstore, 2019

12
PAMANTASAN NG LUNGSOD NG MAYNILA
PLM Business School
Department of Hospitality Management ITM 1204 MICRO PERSPECTIVE OF TOURISM AND HOSPITALITY

Module 14: TOURISM DEVELOPMENT

MODULE OBJECTIVES By the end of the module students will:

1. determine the relation between tourism planning and tourism;

2. explain the roles of the public and private sector in tourism development;
3. describe the characteristics of individual tourism development projects;
4. discuss the steps in the tourism project evaluation and analysis system;
5. clarify the role of government financing incentives in tourism development; and
6. analyze the private sector financing for tourism development.

I. The Relation Between Tourism Planning and The tourism planning process is designed to produce goals, strategies, and objectives for the destination
Tourism Development area related to tourism development, marketing, industry organization, awareness, and other support
activities. The tourism development plan, on the other hand, provides overall guidelines for development,
outlines broad development concepts, and identifies individual development opportunities worthy of ill-
depth analysis through feasibility studies and cost-benefit analysis.

In carrying out tourism development in a destination area, it is necessary to first establish overall
development guidelines to be sure that when development occurs, it complies with area's economic,
social/cultural, and environmental policies and goals. It is also important to provide specific guidelines
describing the basic characteristics of the scale quality and types of development it wishes to accomplish.

II. The Roles of the Government and Private Sector The government and private sectors have important roles in tourism developments. The role of the private
in Tourism Development sectors is more limited and more clear-cut. Its principal role is to provide tourism facilities and services to the
traveling public while maximizing financial returns. The center of the private sectors' involvement in tourism
development is the entrepreneurial role. It involves idea generation, development, project implementation,
financial risk-taking and investment, and the management of operations. The private sectors provide
specialized technical skills required in the development process through tourism consultants, market
research firms, economists, architects, engineers, designers, and project managers and builders. They also
provide a large proportion of the capital funds for investment in tourism projects through its financial
1
 institutions, corporate leaders, and individual citizens.

Nonprofit private organizations also play an important role in tourism development in many destinations.
These organizations include chambers of commerce, travel associations, foundations, historical and cultural
societies, recreation and sports associations, religious groups, and the like. The roles played by these groups
vary but typically, they operate attractions such as historical/cultural centers, museums, art galleries,
recreation, and community halls.

The most important and widely accepted function of the government in tourism development is to act as
catalyst and to complement the effects of the private sectors including nonprofit organizations. The World
Tourism Organization (WTO) points out that as a general principle, the government should not do what the
private sector is able and willing to do.

Although this is a generally accepted principle, instances of overlapping activities and conflict between the
public and private sectors arise due to the following reasons:

1. The private sector is not willing to finance the development of the project because of its limited
profit potential. The government however has given the project high priority due to its regional
economic contributions or its pivotal role in encouraging tourism activity;
2. An existing tourism facility that is bankrupt cannot be sold in the market. Thus, the government feels
obliged to buy the facility;
3. The government stands to provide low-cost vacation opportunities for disadvantaged groups such as
the poor, the sick, and the aged. This is often called "social tourism;" and
4. The government wants to encourage private sector development by initiating new types of
development through "demonstration" or "pilot projects."

III. Characteristics of Individual Tourism Individual tourism development projects are generated either through the tourism planning process or by
Development Projects the private sector. In destinations without tourism plans, the public sector may identify development
opportunities for private sector investment. All individual tourism development opportunities must be
carefully researched and analyzed before their construction.

Potential tourism development projects have some basic differences. The first is their capability to generate
financial profits. Some projects such as hotels and commercial attractions are profit generators, while
others, such as travel information centers and infrastructure facilities are usually not. Although the latter
facilities do not generate direct revenues, they are essential components of the tourism product of the
destination area. Profit-generating projects are the subjects of cost-benefit analysis.

2
 Tourism development includes many elements. Some include projects that involve building construction
such as superstructures; others require only human resources and equipment such as guided canoe trips
which are under the category of programming and events.

The nine criteria which will assist a government agency in identifying desirable projects are the following:

1. Economic Contributions — The project creates a significant level of income and employment
benefits;
2. Environmental Impact—The project is developed in compliance with existing legislation and
regulations governing the conservation and protection of the environment;
3. Social/Cultural Impact — The project does not jeopardize the social wellbeing of the citizens;
4. Competitive Impact — The project complements rather than competes with the existing tourism
business without seriously jeopardizing the financial viability of any individual enterprise;
5. Tourism Impact — The project adds to the destination's tourism potential by creating an attraction,
by improving the area's capacity to receive and cater to visitors, or by being beneficial to the tourism
industry;
6. Developer and Operator Capabilities — The developer and the operator of the project must be
capable of developing and operating the business successfully;
7. Compliance with Policies, Plans, and Programs — The project complies with the tourism policies,
plans, and programs of the destination;
8. Equity Contributions — The project is profit-generating, and the investors have enough equity to
include in the venture; and
9. Feasibility — The project is profit-generating, and it is economically feasible.

IV. Steps in the Tourism Project Evaluation and 1. Pre-feasibility Study;

Analysis System 2. Site Analysis;
3. Market Analysis;
4. Economic Feasibility Analysis;
5. Cost-benefit Analysis;
6. Government Financial Incentives in Tourism Development; and
7. Private Sector Financing for Tourism Development.

Pre-feasibility Study

A pre-feasibility study determines the justification of a more detailed economic feasibility study of a project
and the subjects which the detailed study should tackle. The four principal objectives of a pre-feasibility
study are to determine whether:
3
 1. The available information is adequately detailed to show that the project will not be viable or will
not be attractive to investors or lenders;
2. The available information indicates that the project is so promising that an investment decision can
be made on the basis of the pre-feasibility study alone and that detailed study is no longer needed;
and
3. Certain aspects of the project are so critical to its viability that they must be analyzed as part of the
detailed economic feasibility study.

A pre-feasibility study can be completed by private developers, by a government, or by private consulting

organizations on behalf of the developers and/or a government agency.

Site Analysis

A large proportion of tourism-related projects require physical site location. An economic feasibility study
can either specify a site or determine if any appropriate site exists within a geographic area.

The criteria for site selection and evaluation vary according to the type of tourism project under
consideration. For example, an urban hotel requires proximity to a concentration of industry and commerce.
Likewise, a motor hotel requires proximity to highways, while the placement of tennis courts is dictated by
the wind and sun conditions of the site.

Tourism project site criteria are divided into three categories. These are:

1. Market-related site criteria;

2. Criteria related to the physical characteristics of sites; and
3. Other criteria.

Figure 13 provides a master list of individual criteria within each of the categories.

4
5
 Figure 13. Master List of Tourism Site Selection Criteria
Source: Checklist of Factors Determining the Selection of Sites for Tourism Development. Madrid, Spain:
World Tourism Organization, undated.

The market-related site criteria normally include the site's proximity to potential markets, transportation
facilities, accommodation, restaurants, and shopping centers. The selection requires a knowledge of the
particular business type, experience, and a broad knowledge of construction/site engineering. Ideally, a
multi-disciplined team consisting of a specialized tourism consultant, landscape architect, and architect
should be used for this purpose.

6
Market Analysis

The market analysis of an economic feasibility study is often the most expensive and time-consuming
element of the whole study process. The cost and time required are directly dependent on the combination
of original and secondary research used. Secondary research involves an analysis of available published
sources of information and is less costly than original research. Market surveys aimed at producing new
information and conclusions regarding the project are classified as original or primary research. Pre-
feasibility studies can be based only on secondary research, but detailed economic feasibility studies must
contain a mixture of both secondary and original research.

The market analysis usually begins with the collection and review of secondary sources of information since
it gives a clear picture of the type and scope of original market research needed. An analysis of secondary
sources in tourism can be both time-consuming and exhausting unless the researcher is familiar with the
major tourism-related bibliographies and institutions where major tourism library sources are located.

As soon as the review of secondary sources of information is completed, a plan of original research is drawn
up and implemented. This involves carrying out a variety of surveys and requires the researchers to have a
thorough understanding of marketing research techniques. The most common methods are:

A. Questionnaire method

1. Personal interview
2. Telephone
3. Mail

B. Focus-group or Delphic method

The questionnaire method is the most frequent project feasibility study. Questions are directed to potential
users of the project or to the owners or management of competitive or similar enterprises. The three major
advantages of the questionnaire method are versatility, speed, and cost. Questionnaires are versatile
because they can be used in almost every research problem. This method is usually faster and cheaper than
the observational method because the latter involves observing and studying the behavior of people,
objects, and occurrences rather than questioning for the same information.

The questionnaire method has some disadvantages. The first is that the respondents may either refuse to be
interviewed or may refuse to answer specific questions. Mail questionnaire surveys usually have low-
response rates with as much as 90% of the questionnaires not being returned, while personal and telephone
7
questionnaire surveys usually have higher response rates. A second disadvantage of this method is that a
respondent may be willing to answer but may not be able to provide accurate answers to some of the
questions, A third limitation is that the respondent may intentionally supply incorrect or inaccurate
information.

The focus-group method involves bringing together a small group of persons, usually five to 20 in one place,
to focus on the particular research subject. The research team supplies an experienced focus-group leader.
The objectives of the sessions are to enable the group to reach a consensus on questions or statements
posed by the leader. Each participant may have some common affinity such as being convention meeting
planners, travel agents, tour operators, tour wholesalers, or club executives. This method overcomes some
of the major drawbacks of the questionnaire method, since focus-group participants tend to interact with
one another and because there is a greater opportunity to explore individual preferences and attitudes.

The Delphi method is another research technique often associated with forecasting but can also be applied
to an individual tourism project. It is also called knowledgeable-panel method because it assembles a team
of experts in a particular field which also serves as a sounding board on alternative approaches ideas or
concepts. The Delphi groups need not meet physically but individual participants are required to give their
responses to a variety of written propositions prepared by researchers.

In economic feasibility studies and evaluations of noncommercial projects, it is often necessary to forecast
demand for either the project itself or for the destination area in general or for both. The different
forecasting techniques available to the researchers are:

A. Extrapolation
1. Linear
2. Exponential
3. Cyclical

B. Covariation

C. Correlation

D. Summation

E. Tests

8
F. Calculating Methods
1. Calculation by inches
2. Calculation by sales potential
3. Calculation by unit sales
4. Calculation by elasticity coefficient
5. Calculation by models

G. Guesstimate
1. Individual
2. Group
a. Committee
b. Delphi process

Forecasts are generally divided into four-time spans. These are short-term (one day to two years), medium-
term (two to five years), long-term (five to 15 years), and futurism (over 15 years).

With regard to the individual tourism project and the evaluation of its economic feasibility, the forecasting of
the potential market demand usually covers the medium-term to long-term forecasts which is the first to 15
years of operation. This is appropriate because most commercial tourism projects operate to reach their full
financial and operating potential within the first five years of operation and pay back their investor's equity
within 10 years.

Economic Feasibility Analysis

The economic feasibility analysis determines the capability of a project in producing satisfactory financial
return for its investors. This step consists of seven distinct steps:
1. Description of components, scale and sizes, and quality levels required to capture the potential
market demand;
2. Specification of unit prices and rates;
3. Estimation of revenues, market and demand levels, and unit prices and rates;
4. Estimation of operating unit and profits;
5. Preparation of capital budget;
6. Estimation of capital expenses, net income, and cash flow; and
7. Calculation of rate of return on investment.

The forecast of potential market demand and expressed desires and expectations of persons interviewed
provide the key inputs in describing a detailed project concept. The project concept describes the
9
components, scale, sizes, and quality levels of facilities and services needed to satisfy the potential demand
discovered. Then, unit prices and rates are prepared.

The next two steps are usually referred to as the production of forecast income statements that indicate the
estimated revenues, operating expenses, and operating profits for the project. When estimating revenues,
the total potential demand must be broken down into segments and the applicable unit prizes and rates and
units must be multiplied against the resulting volumes in each segment. The operating expenses include
costs incurred directly in operating the project such as the cost of food and merchandise for resale, the cost
of labor, the cost of marketing, the cost of energy, and the cost of repairs and maintenance. Publications
which contain industry average performance statistics can help in estimating these operating costs. There is
greater individual accuracy when the forecaster is familiar with the type of business under consideration and
when detailed staffing schedules and other operating standards are developed for the project.

There are other expenses that the project will encounter, and these are all related to the capital investment
in the development. In order to estimate the expenses, a capital budget should be prepared first. A capital
budget is a detailed itemized budget of the capital investment required by the project. For a tourism project,
these items will normally include building construction cost, professional fees, infrastructure cost,
recreational facility costs, furniture, fixture, equipment costs, contingencies, and the like. The most realistic
capital budgets are usually produced by a multi-disciplined team consisting of tourism consultants, civil
engineers, architects, and landscape architects. The capital budget is first prepared by identifying all the
capital costs to be encountered, then pricing out each item. A contingency factor, normally between 10 to
20%, is added to some items to cover unforeseen cost overruns or items overlooked. After the capital
budget has been completed, the capital-related expenses for the project can be calculated. These include
financing charges on long-term debt, depreciation, municipal taxes, and insurance premiums on fixed assets.
When these expenses have in turn been estimated, they are deducted from the forecast-operating levels to
give net income figures and cash flow forecasts. The net income and cash flow projections generally cover
the useful life of the project which for most tourism enterprise, does not usually exceed 15 to 20 years of
operation.

The final step in the process uses one or more financial techniques to measure the rate of return produced
by the forecast net income and cash flow levels. Majority of experts favor the time value yardsticks,
especially the net present value and internal rate of return techniques. These two methods are based on the
present value concept which implies that money has a time value. Thus, a dollar received today is worth
more than a dollar received a year from today since the dollars received in profits in earlier years are more
valuable than those earned in late years. Both the net present value and internal rate of return techniques
use cash flow figures as a basis for their projection and discount the value of future cash flows at certain
assumed rates of returns.
10
Based on the rates of the return predicted through the use of one or more of these financial analysis
techniques, a decision is reached whether the project under consideration is economically feasible. If the
rate is less than the requirement of investors, the project is considered not feasible and vice versa.

Cost-Benefit Analysis

Commercial projects found to be economically feasible may or may not have to be further analyzed using
the cost-benefit analysis techniques. Cost-benefit analyses are usually carried out by or on behalf of
government agencies. They help these agencies measure and weigh all the costs and benefits of alternative
projects. In this way, the agencies will be able to determine which project will produce the largest net
benefit for their economies and for their society. However, the size of the return of the capital of private
investors cannot be the only basis for the government support because the government agency has no
economic, environmental, and social/cultural responsibilities that have to be considered before giving
financial incentives or other support or approval to a project. For example, a proposed casino may generate
high profits for the investors, but the government agency refuses to support the project because it feels that
such project will determine the social well-being of its destination area. The agency has developed some
criteria to rank projects against each other and support those with the highest rankings. As discussed earlier
in this chapter, the following criteria were advised for government screening purposes:

1. Economic contributions;
2. Environmental impact;
3. Social/cultural impact;
4. Competitive impact;
5. Tourism impact;
6. Developer and operator capabilities;
7. Compliance with policies, plans, and programs;
8. Equity contributions; and
9. Feasibility.

Some of the factors related to the above criteria can be measured quantitatively; others cannot. For
example, the economic contributions of a project can be forecasted numerically but the social/cultural
impacts cannot.

Thus, a cost-benefit analysis should weigh the quantifiable and unquantifiable costs and benefits of a
tourism project against each other. If the results of the cost-benefit analysis are positive, some project
developers may apply for government financial incentives, others may go ahead without government
11
assistance.

Role of Government Financial Incentives in Tourism Development

One of the major problems of tourism projects is getting financing needed for their development. Many
tourism projects have been proven to be economically feasible but have not been developed because of the
lack of the right amount of type of financing. The number of government agencies which provide specific
financial incentives for tourism projects have increased rapidly in recent years. These agencies play their dual
roles as stimulators and entrepreneurs.

Government financial incentives for tourism projects are classified into two categories, namely: fiscal
incentives and direct and indirect incentives. Fiscal incentives are special allowances for income tax and
other tax purposes. Direct and indirect incentives include several programs aimed at easing the financial
requirements of tourism projects. The main objective of most of these incentive programs is to help
businesses carry out tourism development projects that may have been abandoned or delayed because of
lack of assistance. The following is a list of financial incentives provided by government agencies to tourism
projects:

Fiscal Incentives

1. Tax holidays — The government agency defers the payment of income taxes or other taxes for a
predetermined time period;
2. Remission of tariffs — The government agency relaxes or removes import duties on goods and
services required by the project; and
3. Tax reductions — The government agency lowers the normal tax rates that would have been paid by
the project.

Direct and Indirect Incentives

1. Non-refundable grants — Reduce the capital budget of a project;

2. Low-interest loans — Reduce the amount of interest that the project must pay during its operating
life;
3. Interest rebates — The government agency rebates a portion of the project's interest costs during
its operating life;
4. Forgivable loans — The government agency loans funds to the project and then "forgives" all or part
of these over an agreed time period;
5. Loan guarantees — The government agency guarantees a loan or loans given to a project by a
12
 private financial institution;
6. Working capital loans — The government agency loans funds to meet the working capital needs of a
project;
7. Equity participation — The government agency buys some of the available shares in the project and
therefore becomes an equity investor;
8. Training grants — The government agency provides a non-refundable grant to the project for staff
training purposes;
9. Infrastructure assistance — The government agency assumes the costs of some or all 'Of the
infrastructure required for the project;
10. Leasebacks — The government agency purchases lands, buildings, or equipment and then leases
them to the project; and
11. Land donations — The government agency donates land free of charge to the project.

Not all projects requesting financial help receive it because most of the government agencies which provide
financial incentives usually receive more application for assistance than their budgets can handle.

Private Sector Financing for Tourism

Development

Although governments continue to play a greater role in providing financing to tourism projects, it is the
private sector that generally supplies majority of the financing. The private sector ranges from individual
citizens to major institutional lenders such as banks, trust companies, credit unions, insurance companies,
and other commercial finance companies. Before lending money to a tourism project, a private. financing
agency usually requires that the following points be accomplished:

1. Previous management experience in tourism and an established credit record within the
management development team;
2. Proof of economic feasibility via an independent economic feasibility study;
3. Adequate collateral or security for the fund to be borrowed;
4. Adequate equity capital to be invested by the owners of the projects; and
5. Proof of stability in the tourism industry in which the project will function.

Tourism projects require equity as well as borrowed capital from owners and investors. These individuals are
the risk takers in the development, and they are rewarded with profits from their investment.

13
 Detailed Design and Construction

In the last stages of the tourism development project, several levels of architectural designs and drawings
are prepared. The procedures include the following:
1. Preparation of preliminary architectural concepts;
2. Preparation of preliminary architectural design;
3. Preparation of final architectural design; and
4. Construction.

In each of the three stages, the drawings become more detailed and exact. When the final drawings have
been approved, the construction of the project may start.

Chapter Activities 1. Conduct a study on how to rejuvenate declining destinations.

2. Create a plan for a new destination.
3. Research on why destination areas rise and fall in popularity.

REFERENCES Romeo D. Lim, Micro Perspective of Tourism and Hospitality, Mindshapers Company, Inc., 2019

Micro Perspective of Tourism and Hospitality, 3G E-Learning LLC, 2019

Zenaida Lansangan-Cruz, Micro Perspective of Tourism and Hospitality, REX Bookstore, 2019

14
PAMANTASAN NG LUNGSOD NG MAYNILA
PLM Business School
Department of Hospitality Management ITM 1204 MICRO PERSPECTIVE OF TOURISM AND HOSPITALITY

Module 15: EMPLOYMENT OPPORTUNITIES AND QUALIFICATIONS IN THE TOURISM AND HOSPITALITY INDUSTRY

MODULE OBJECTIVES By the end of the module students will:

1. describe the available jobs in the airline industry;

2. discuss the employment opportunities in hotels and motels;
3. clarify the career opportunities in the travel agency;
4. explain the job opportunities in the cruise line industry;
5. be familiar with the available jobs in motor coaches;
6. describe the career fields in the car rental industry; and
7. explain the employment opportunities in the gaming and entertainment industry.

I. Employment Opportunities in Tourism At present, tourism has acquired the distinction of being one of the world's largest Industries. It
consists of many components such as transportation, accommodations, food service, tourist
destinations, tourist attractions travel brokers, as well as travel related services.
Since tourism is a diverse and complex industry, each sector offers several career and
employment opportunities.

The following is a list and description of the jobs in the large field.

Airlines

Airline employment is exciting and attractive to the adventurous, whether in the air or on the
ground servicing the carriers between flights. Salary levels are relatively high in the airlines.
Short-term economic stresses may cause some problems, but long-term prospects for airline
careers are bright. Some of the jobs in the airline are flight attendants, ticket agents,
reservation agents, clerks, airline food service jobs, flight dispatcher, operation or station ramp

1
agents, sales managers and district sales managers, airline lounge receptionists, airplane flight
attendant supervisors, ramp flight attendants, crew schedulers, flight crew time clerks, flight
reservations managers, gate agents, gate services supervisors, ground hosts or hostesses,
passenger service representatives, reservations agents, senior reservation agents, ticketing
clerks, aircraft log clerks, airport attendants, flight information expediters, airport managers,
station managers, chief airport guides, and traffic agents.

A. Flight Attendant

The position of flight attendant has evolved from the career that was once called "stewardess,"
"hostess," or "steward." In the past, employees who filled this position were young, female,
unmarried, attractive, and required to be nurses. After a lawsuit filed by a young man claiming
he was denied a steward position because of his sex, the airlines had to consider both men and
women for the position, thus the evolution of the flight attendant.

The primary responsibility of the flight attendant is to see to it that the passengers are
comfortable. Travelers often form their impressions of the airline—whether positive or
negative—on their experiences with the flight attendant.

The flight attendant performs several personal services conducive to the safety and comfort of
airline passengers during flight, greets passengers, verifies tickets, records destinations and
assigns seats, explains use of safety belts, oxygen masks, and life jackets, and serves previously
prepared meals and beverages.

He or she observes passengers to detect signs of discomfort and issues palliatives to relieve
them of ailments such as airsickness and insomnia; answers questions regarding the
performance of aircraft, stopovers, and flight schedules; and performs other personal services
such as distributing reading material and pointing out places of interest.

The work of the flight attendant is demanding and tiring. Some international flights last more
than twelve hours. The ability to remain calm and pleasant, coupled with the physical stamina
necessary to remain on duty for several hours, are primary requirements for flight attendants.

2
Flight attendants are no longer required to be unmarried. However, they are required to live in
the city designated by the airline. The flight attendant is required to be average to tall in height
to be able to reach the pillows, blankets, and small luggage that are stored overhead. The
attendant's weight must be proportional to his or her height.

Excellent English language skills are required. If one works on an airline with international
routes, a second language is an asset. General health should be excellent since the flight
attendant must be physically ready to cope with all emergencies. All airlines stress the
importance of good appearance. Various airlines provide individual training programs for flight
attendants.

Advancement from the flight attendant position depends on seniority and merit. Nonflying
positions into which flight attendants may be promoted include instructor, customer service
director, and recruiting representative. Flight attendants may also become members of an
airline's advertising and public relations staff.

The primary benefit of a flight attendant's work is the availability of free or reduced travel rate.
Many airlines offer this benefit not only to their own employees, but also to employees of
competitive airlines. Thus, the choices of trips of flight attendants are not limited to their own
employer's routes but include the routes by other carriers that have exchange agreements
with their employer.

B. Ticket Agents, Reservation Agents, Clerks

Reservation agents and clerks who work for major carriers work in large central offices where
they become the link between telephone inquiries and the computer terminal. The agents
answer questions on flight schedules and seat availability and make reservations. Their work
brings them in telephone contact with the general public, travel agents, as well as their own
company's ticket agents.

Ticket agents work at airport ticket counters and in central city ticket offices. Their duties
include answering questions about fares and schedules, handing out timetables and literature,
checking with the reservation agent on seat availability and selling tickets. In addition, they
check baggage, add excess weight charges if necessary, and issue boarding passes. Ticket
3
agents are in direct contact with the public. Thus, they must be pleasant and present a
professional appearance. They wear uniforms that represent their carrier employer.
Possibilities of advancement to other positions are improved if one has college-level courses in
traffic management and other phases of transportation.

C. Airline Food Service

This is a behind-the-scene position but an essential one in the airline industry. Airlines have
finally recognized the need for quality meals to attract potential passengers. Travelers now
expect a meal on board or at least a snack if the flight is short. Many airlines even plan
international meals characteristic of the destination or of the airline itself. An airline may have
its own food service division or arrange for a private catering service to prepare in-flight meals.

The prerequisite for a position in airline food service is educational training in food service or
practical experience in the hotel or restaurant field.

D. Flight Dispatcher

The flight dispatcher gives permission for aircraft of, specific airlines to takeoff. For example,
PAL's flight dispatcher oversees all PAL carriers at a given airport. The dispatcher evaluates all
factors of the flight including the airplane's status, the crew, weather information, and other
details. Constant communication between the dispatcher and crew keeps the crew informed of
any delays at the airport caused by weather or crowded airspace conditions.

E. Operations Agents, Station Ramp Agents

The responsibilities of operations and station ramp agents are the supervision and loading of
baggage and cargo. Cargo weight must be evenly distributed by these agents with the
corresponding list of members and passengers recorded. They coordinate the transfer of
baggage for connecting flights while taking on new luggage at stopover airports. These agents
are also responsible for announcing arrivals and departures.

F. Sales Manager/District Sales Manager

4
Sales managers and district sales managers oversee ticket and reservation offices, supervise
sales representatives, and promote traffic on their airlines. They maintain contact with local
travel agents and tour operators to keep them informed on the latest airline promotions. Their
relationship often means a discount to the travel agents or operators for their clients.
However, the sales manager will maintain a profit for the airline on the basis of volume in these
cases.

G. Airlines Lounge Receptionist

The airline receptionist admits members and guests to the airline lounge; serves beverages and
snacks; opens the door to the lounge in response to the sound of a buzzer; verifies membership
cards; admits and seats members and guests; answers questions regarding scheduled flights
and terminal facilities; and verifies passenger reservations.

In addition, the airline lounge receptionist accompanies passengers to departure gates,

restrooms, and other terminal facilities; relays requests for paging and telephone services;
opens cans, bottles, and packages; brews coffee and arranges pastry nuts and appetizers on
serving trays; removes used ash trays, glasses, and dishes from tables; and picks up trash.

H. Flight Attendant Supervisor

The flight attendant supervisor supervises and coordinates activities of flight attendants,
assigns duties and areas of work to flight attendants; observes activities of employees to
evaluate work performance and maintains personnel records; explains and demonstrates
methods and procedures for performing tasks; and prepares evaluation reports on the
performance of employees.

l. Ramp Flight Attendant

The ramp flight attendant checks flight attendant's conformity to personal appearance
standards and performance of preflight duties during the boarding stage of scheduled airline
flights and compiles reports of findings; and inspects appearance and grooming of personnel
for conformity to company standards.

5
He or she consolidates trip reports and daily checklists of information regarding work
performed, emergency equipment, safety procedures, and appearance standards for use by
supervisor; prepares flight register and schedules to indicate assignments; and notifies
personnel of changes in schedules.

J. Crew Scheduler

The crew scheduler compiles duty rosters of flight crews and maintains records of crew
members' flying time; schedules airline flights; prepares flight register which crew members
sign to indicate their preference and availability for flights and time they wish to be called
before each flight; types names of crew members in the flight schedule in the order of seniority
to indicate flights to which crew members are assigned, posts names of extra crew members in
the order of seniority on reserve list, and selects replacement when needed.

The crew scheduler computes and logs cumulative flying time for crew members and removes
crew members' names from flight schedules when their flying time limit has been reached and
may notify crew members of assignments, using the telephone.

K. Flight-Crew-Time Clerk

The flight-crew-time clerk compiles flight time records of flight officers for the payroll and crew
scheduling departments to ensure accuracy of payroll and legality of flights and posts data such
as time in flight, type of aircraft, mileage flown, weight of aircraft, and flight time records using
posting machines.

The flight-crew-time clerk also reviews union agreements to ascertain payroll factors such as
meal expense allowance, billeting allotment, and rates of pay; computes pay; compares figures
with flight officer's log to detect and reconcile discrepancies; notifies crew schedulers of total
accumulated flight time of each officer; and submits pay records to payroll section.

L. Flight Reservations Manager

The flight reservations manager directs and coordinates, through subordinate supervisory
personnel, flight reservation activities for certified commercial or transport companies; reviews
6
flight reservation reports; and conducts comparative studies with other airline reservations to
develop methods and procedures designed to improve operating efficiency and increase
reservations for company flights.

The flight reservations manager interprets and implements, through supervisory personnel,
company policies and procedures regarding customer relations and contact with the public,
analyzes economic statistics as applied to air transportation and other factors such as weather
conditions, special flight rates, and package deals to estimate future volume of flight
reservations; directs investigation of customer complaints regarding reservation service; and
prepares correspondence designed to improve customer relations.

M. Gate Agent

The gate agent assists passengers and checks flight tickets at entrance gates or stations when
boarding or disembarking airplanes of commercial airlines and examines passenger tickets to
ensure that passengers have the correct flights or seats or directs passengers to correct
boarding areas, using passenger manifests, seating charts, and flight schedules.

The gate agent verifies names on passenger manifests or separate portions of passenger's
ticket and stamps or marks ticket or issues boarding passes to authorize passengers to board
the airplane and’ assists elderly, disabled, or young passengers to board or depart from
airplanes such as moving passengers in wheelchairs.

N. Gate Services Supervisor

The gate services supervisor supervises, and coordinates activities of workers engaged in
admitting departing passengers to the aircraft and assisting passengers to disembark at
terminal exits of commercial airlines; reviews flight schedules, and passenger manifests;
observes workers to ensure that services to passengers are performed courteously and
correctly.

O. Ground Host/Hostess
The ground host or hostess renders personal services to passengers in airline terminals to
facilitate movement of passengers through terminals and create goodwill, greets, and
7
welcomes passengers to the terminals; answers questions and advises passengers concerning
flight schedules and accommodations such as arrival or departure time, location of concourses,
and gates selection of seats on aircraft; assembles and forwards luggage to departing flights;
guides and escorts foreign-speaking passengers to designated gates for boarding of aircraft.

P. Passenger Service Representative

The passenger service representative renders a variety of personal services to airline

passengers requiring other than normal services, such as taking care of company officials,
distinguished persons, foreign-speaking passengers, invalids, and unaccompanied children;
greets and escorts distinguished persons to lounges or waiting areas, transports special
passengers between lobby and boarding areas, using electric carts; gives aid to sick or injured
passengers and obtains medical assistance, assists elderly persons and unaccompanied children
in claiming personal belongings and baggage; prepares baby food for mothers with infants.

Q. Reservations Agent

The reservations agent makes and confirms reservations and routing for passengers on
scheduled airline flights; arranges reservations and routing for passengers at the request of
ticket agents or customers, using timetables, airline manuals, reference guides, and tariff
books; types requested flight number on keyboard of online computer reservation systems and
scans screens to determine space availability; telephones customers or ticket agents to advise
changes in flight plans or to cancel or confirm reservations.

R. Senior Reservations Agent

The senior reservations agent supervises and coordinates activities of workers engaged in
reserving seat space for passengers on scheduled airline flights; assigns workers to tasks in
accordance with abilities and personnel requirements; observes work procedures, monitors
telephone calls, and reviews completed work to ensure adherence to quality and efficiency
standards and to rules and regulations; writes revisions to procedure guides and memoranda
describing changes in reservations methods flight schedules, and rates; records teletypewriter
messages and telephones passenger service personnel to obtain information regarding flight
cancellations and schedule changes and to determine disposition of passengers holding
8
reservations on cancelled or rescheduled flights.

S. Ticketing Clerk

The ticketing clerk compiles and records information to assemble airline tickets for transmittal
or mailing to passengers; reads coded data on booking card to ascertain destination, carrier,
flight number, type of accommodation, and en route stopovers; selects ticket blank, invoice,
and customer account card; compiles, computes, and records identification and fare data using
tariff manuals, rate tables, flight schedules, and pen or ticket imprinter; separates and files
copies of completed tickets; clips completed tickets and invoices to booking cards and routes to
other workers for teletype transmittal or mails tickets to customers.

T. Aircraft Log Clerk

The aircraft log clerk keeps records of usage and time intervals between inspection and
maintenance of designated airplane parts; compiles data from flight schedules; computes and
posts amount of time airplanes and individual parts are in use daily using calculating machines,
maintains card files for individual parts with notations of time used and facts taken from
inspection records; notifies inspection department when parts and airplanes approach date for
inspection including accumulated time and routing schedules; prepares reports on schedule
delays caused by mechanical difficulties to be filed with the Federal Aviation Administration
(FAA) in the USA and with the Civil Aeronautics Board in the Philippines.

U. Airport Attendant

The airport attendant periodically inspects buildings and hangars to detect fire hazards and
violations of airport regulations; examines firefighting equipment to detect malfunction and
fills depleted fire extinguishers; performs minor repairs on fire trucks and tractors; patrols
airfield to ensure security of aircraft and facilities; records airport data such as the number of
planes stored in hangars, plane landings and departures, and number of passengers carried on
planes.

V. Flight Information Expediter

9
The flight information expediter determines flight times of airplanes and transmits information
to flight operations and Air Traffic Command Centers; evaluates data, such as weather
conditions, flight plans, ramp delays, and en route stopovers to determine arrival and
departure times for each flight using aids such as weather charts, slide rule, and computer;
transmits identity and type of airplane, flight locations, time of arrival and departure, and
names of crew members to Air Traffic Command to obtain clearance for flight over restricted
areas; notifies relevant departments of airlines of pending arrival of inbound flights to ensure
that personnel are available to load or unload fuel, baggage, and cargo.

W. Airport Manager

The airport manager plans, directs, and coordinates, through subordinate personnel, activities
concerned with construction and maintenance of airport facilities and operation of airport in
accordance with governmental agency or commission policies and regulations; consults with
commission members, government officials or representatives of airlines to discuss and plan
such matters as design and development of airport facilities, formulation of operating rules,
regulations, and procedures of aircraft landing, taxiing and takeoff patterns for various types of
aircraft; negotiates with representatives of airlines, utility companies, or individuals for
acquisition of property for development of airport, lease of airport buildings and facilities, or
use of rights-of-way over private property; inspects airport facilities such as runways, buildings,
beacons and lighting, automotive or construction equipment; formulates procedures to be
used in case of aircraft accidents, fire, and other emergencies.

The airport manager coordinates activities of personnel involved in the repair and maintenance
of airport facilities, buildings, and equipment to minimize interruption of airport operations;
directs personnel in investigating violations of aerial or ground traffic regulations; reviews
investigation reports; and initiates actions to be taken against violators.

X. Station Manager

The station manager directs and coordinates airline station activities at transport stations
located at airports to provide services for scheduled flight operations;' reviews station activity
reports to ascertain data required for planning station operations; directs preparation of work
schedules to obtain maximum utilization of manpower and facilities; coordinates activities of
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passenger reservations and ticketing, passenger services, ramp and cargo services, and
dispatching of aircraft to ensure operations to meet company and government policies and
regulations; directs preparation of passenger lists, cargo manifests, and plans for storage of
cargo and baggage aboard aircraft.

Y. Chief Airport Guide

The chief airport guide supervises and coordinates activities of workers engaged in conducting
guided tours at airport; arranges tour according to interests of groups such as school children,
foreign visitors and civic or private organizations; schedules tours to avoid interruption of
airport operations and minimize congestion; and assigns workers to guide tours.

Z. Traffic Agent

The traffic agent solicits freight business from industrial and commercial firms and passenger
travel business from travel agencies, schools, clubs, and other organizations; explains available
routes, land limits, and special equipment available; quotes fares, schedules, and available
itineraries offered to groups by company; acts as liaison between shipper and carrier to obtain
information for settling compliments; and distributes descriptive pamphlets.

Travel Agencies

The travel agency is a legally appointed agent, representing the principal in a certain
geographic area. The agency acts as a broker, arid brings the buyer and seller together for the
other suppliers such as hotels, car rentals, ground operators, and tour companies.

There are several jobs that exist in the travel agency such as travel agent, tour operator, travel
information center supervisor, travel clerk, travel counselor, tourist information assistant,
reservation clerk, and tour guide.

A. Travel Agent

The travel agent plans itineraries and arranges accommodations and other travel services for customers
of travel agency; converses with customers to determine destination, mode of transportation, travel
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dates, financial considerations, and accommodations required; plans or describes and sells itinerary
package tour; gives customer brochures and publication concerning travel and containing information
regarding local customs, points of interest, and special events occurring in various locations or foreign
country, regulations such as consular requirements, rates of monetary exchange, and currency
limitations; computes cost of travel and accommodations or quotes costs of package tours; and books
customer on transportation carrier and makes hotel reservations.

B. Travel Information Center Supervisor

The travel information center supervisor supervises and coordinates activities of workers engaged in
greeting and welcoming motorists at state highway information centers; provides information such as
directions, road conditions, and vehicular travel regulations; and provides maps, brochures, and
pamphlets to assist motorists in locating points of interest or in reaching destinations.

C. Tour Operator

The tour operator is the wholesale agent of the travel industry. The primary function of the wholesaler
is the design of tours and travel packages on a large scale, marketing these packages to the retail travel
agent and the major airline carriers. Tour operators range from the very large to small independent
operators specializing in specific geographic regions. The travel benefits available to the tour operator
are similar to those of the travel agent, free or reduced air travel, and trips as potential promotable
destinations are frequently available.

D. Tourist Information Assistant

The tourist information assistant provides information and other services to tourists at an information
center; assists tourists in planning itineraries and advises them of traffic regulations; and gives
information on resorts, historical sights, scenic areas and other tourist attractions.

E. Tour Guide

The tour guide escorts visitors around the city or town; describes points of interest along the route of
tour using public address system or megaphone; may collect fees or tickets and plan refreshment and
rest stops and may be required to speak a foreign language when communicating with foreign visitors.

Hotels and Motels

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The following are the descriptions of hotel/motel-related jobs based on material in the Dictionary of
Occupational Titles published by the US Department of Labor.

A. Manager of a Hotel or Motel

He or she manages a hotel or motel to ensure efficient and profitable operations; establishes standards
for personnel administration and performance, service to patrons, room rates, advertising publicity,
credit, food selection and service and type of patronage to be solicited; plans dining room, bar, and
banquet operations; allocates funds, authorizes expenditures and assists in planning budgets for
departments; hires personnel; and delegates authority and assigns responsibilities to department
heads.

B. Lodging Facilities Manager

He or she manages and maintains temporary or permanent lodging facilities such as small apartment
houses, small hotels, trailer parks, and boat marinas; purchases supplies and arranges for outside
services such as fuel delivery, laundry, maintenance and repair, and trash collection; cleans public areas
such as entrances, halls, and laundry rooms; and makes minor electrical, plumbing, and structural
repairs.

C. Hotel Clerk

He or she performs a combination of duties for guests of hotels, motels, motor lodges, or condominium
hotels; registers and assigns rooms to guests; issues room keys; transmits and receives messages;
answers inquiries pertaining to hotel services, registration of guests, shopping dining, entertainment,
and travel directions; keeps records of room availability and guests' accounts, and computes bills and
collects payments.

D. Sales Representative

He or she contacts representatives of government, business, and social groups to solicit business for
hotels, motels, or resorts; selects prospective customers by receiving information concerning functions
such as sales meetings, conventions, training classes, or routine travel by organization members; calls
prospects, outlines types of service offered, and quotes prices; and verifies reservations by letter or
draws up contracts.
Cruise Lines

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A. Cruise Line Director

He or she is responsible for all daily activities, planning, entertainment, and port of call information for
passengers. This requires a strong background in the entertainment field, an exceptional ability to work
well with people, and the ability to handle administrative details.

B. Documentation Supervisor

He or she supervises, and coordinates activities of workers engaged in preparing shipping documents
and related reports, and in classifying and rating cargo according to established tariff rates; reviews
ship's schedules and booking records to plan and schedule work activities; and assigns rating activities
to workers and reviews rating.

C. Chief Steward/Stewardess

The chief steward or stewardess supervises and coordinates activities of personnel in the steward's
department aboard a passenger vessel; supervises workers engaged in housekeeping and meal serving;
arranges space for shipboard recreation activities; inspects passenger areas for cleanliness; and
observes services rendered by steward personnel for conformity to company standards.

D. Social Director
He or she plans and organizes recreational activities and creates a friendly atmosphere for guests in
hotels or resorts or for passengers on board ships, greets new arrivals, introduces them to other guests,
acquaints them with recreation facilities, and encourages them to participate in group activities.

E. Booking Supervisor

He or she supervises, and coordinates activities of workers engaged in booking shipments of cargo on
ships and keeping booking control records to ensure maximum utilization of cargo spaces; reviews
records of bookings, studies plan of cargo spaces to determine type of tonnage that can be booked on
each ship to obtain maximum revenue, and utilize available cargo space; and assigns booking duties to
workers.

Motor Coaches

The following are descriptions of motor coach-related jobs, based on material in the Dictionary

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of Occupational Titles published by the US Department of Labor.

A. Bus Dispatcher

He or she dispatches long-distance buses according to schedule, and oversees bus drivers and
bus attendants while they are at the terminal; issues orders for station departure of buses at
specified hours or according to schedule; arranges for extra buses and drivers in case of
accidents or heavy traffic; and announces incoming and outgoing buses over public address
systems in the bus terminal.

B. Bus Attendant

He or she renders a variety of personal services to bus passengers to make their trip pleasant;
welcomes passengers boarding the bus; adjusts seating arrangements to accommodate
passengers when requested; answers questions about bus schedules, travel routes, and bus
services; points out places of interest; and distributes newspapers, magazines, pillows, and
blankets.

C. Dispatcher Clerk

He or she schedules work for bus crew or individual workers and keeps time records; enters
names of workers on assignment sheet for each trip on the basis of seniority; notifies workers
of assignment, establishes availability, and assigns replacement crew when needed.

Car Rental Companies

A. Sales Rental Agent

The sales rental agent greets customers and helps them find suitable cars for their needs. Since
their position requires public contact, the sales rental agents must possess a pleasant and
outgoing personalities and have an overall good appearance. Agents are trained in
computerized reservations and billing procedures, as well as communication skills such as
proper telephone manners and customer relations.
B. Reservation Agent
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Reservation agents work directly over the phone with requests from airline reservation clerks,
travel agents, and the general public. They check the availability of cars in the city requested
and take all pertinent information including a credit card number to secure the reservation.

C. Car Rental Sales Representative

The car rental sales representative promotes car rental services to the business. traveler
segment. Others deal with travel agents and airlines with the goal of increasing sales through
the establishment of corporate package deals on a large volume basis.

D. Automobile Rental Clerk

He or she rents automobiles to customers at airports, hotels, marinas, and other locations;
talks to customers to determine type of automobile desired and accessories such as power-
steering or air-conditioning, location where car is to be picked up and returned, and number of
days repaired; examines customer's driver's license and determines amount of deposit
required; quotes cost of rental based on per-day and per-mile rates; completes rental contract
and obtains customer's signature and deposit; and computes rental charges based on rental
time, miles traveled, type of car rented, taxes, and other incidental charges incurred.

Gaming Entertainment Industry

Career opportunities in the gaming entertainment industry are unlimited. They are divided into
five career tracks, namely: hotel operations, food and beverage operations, casino operations,
retail operations, and entertainment operations.

A. Hotel Operations

The career opportunities in gaming entertainment hotel operations are very similar to the
career opportunities in the full-service hotel industry. The only exception is that food and
beverage can be a separate division and not part of the hotel operations. The rooms and guest
services departments offer the most opportunities for students of hospitality management.

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B. Food and Beverage Operations

There are many career opportunities in restaurant management and the culinary arts. Gaming
entertainment industry has many food and beverage outlets including restaurants, hotel room
service, banquets and conventions, and retail outlets. There are many executive-level
management positions in both front and back-of-the-house food and beverage operations in
gaming entertainment operations.

C. Casino Operations

Casino operations are divided into five functional areas: gaming operation staff, casino service
staff, marketing staff; human resources Staff and finance and administration staff. Gaming
operation staff includes slot machine technicians, table-game dealers, and table-game
supervisors.

Casino service staff includes security, purchasing, maintenance, and facility engineers.
Marketing staff includes public relations, market research,
and advertising professionals. Human resources staff includes employee relations,
compensation, staffing, and training specialists. Finance and administration staff includes
lawyers, accounts payable, audit, payroll, and income control specialists. There are career
opportunities in the five functional areas.

D. Retail Operations

The increased emphasis on non-gaming sources of revenue in gaming entertainment business

demands an expertise in all aspects of retail operations, from store design and layout to
product selection, merchandising, and sales control. Career opportunities exist in retail
operations.

E. Entertainment Operations

Because of the emphasis on entertainment, there exists career Opportunities for those
interested in stage and theater production, lighting and box office management, and talent
management and booking.
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Chapter Activities 1. Select the jobs from those described in this chapter which you think you would like to be
employed after completing the tourism course. Why did you select these jobs?

2. Analyze your current program of study. Determine whether or not you will need additional
study beyond that provided by the program in order to qualify for any of the jobs you selected.

REFERENCES Romeo D. Lim, Micro Perspective of Tourism and Hospitality, Mindshapers Company, Inc., 2019

Micro Perspective of Tourism and Hospitality, 3G E-Learning LLC, 2019

Zenaida Lansangan-Cruz, Micro Perspective of Tourism and Hospitality, REX Bookstore, 2019

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