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The purpose of this report is to survey the current state of the UK tourism market. This report examines the historical evolution of the travel and tourism industry in the UK, from ancient time to present in case of importance of being informed about, the history will lead us to understand the situation better and clearer and also it tries to clarify the current structure of the travel and tourism industry in the UK. Since we are facing many effects that economic policies have on different industries, the report also investigates the influence of both local and international agencies as well as global and national economic policy on tourism industry. The other section which has been explained in the current report is the effects of supply and demand on travel and tourism industry; it’s important to be discussed because of the clear vision it’ll give us in planning for the industry. Finally it should be noticed that all industries have some pros and cons and knowing them gives planners and managers to avoid making repetitive wrong decisions therefore I will describe what the positive and negative impacts are on local and the globe by tourism industry.
History and structure of the travel and tourism industry
Since Persian king Darius the Great has made the first generation of roads and accommodation facilities for commuting, thousands of years has been past, it’s easy to find the footsteps of Egyptians and Romans as ancient travellers, Wikipedia (July 2010) comments that Wealthy people have always travelled to distant parts of the world, to see great buildings, works of art, learn new languages, experience new cultures and to taste different cuisines. Long ago, at the time of the Roman Republic, places such as Baiae were popular coastal resorts for the rich. However, we have different concept of travelling and tourism today.
The word tourism was used by 1811 and tourist by 1780 also the word tour was used by 14th century (Merriam-Webster’s 11th collegiate dictionary).
Nowadays based on UNWTO 1993, tourism is defined as: The activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes.
The UK was always one of the pathfinders in history of tourism industry, since many of new travelling system has founded or developed by the UK such as The Elizabethan traveller in the renaissance or the first-ever excursions by Thomas cook, Cox & kings company.
The industry revolution and economic growth formed today’s tourism, as a result of social changes and massive demands for having leisure and recreation in the new born industrial societies.
Wikipedia (July 2010) claims that: “Leisure travel was associated with the Industrial Revolution in the United Kingdom – the first European country to promote leisure time to the increasing industrial population. Initially, this applied to the owners of the machinery of production, the economic oligarchy, the factory owners and the traders. These comprised the new middle class”.
The need for services led the companies to be founded, 2008 marked the 250th anniversary of the foundation of Cox & Kings, the longest established travel company in the world. Cox & Kings (2010)
In the other words, we were facing Democratization of Tourism which has been described by John Urry. How has it occurred?
Sharply (2006) noted that: an historical analysis of tourism development identifies three main periods within which specific forms of tourism can be identified:
1600-1800: a period which witnessed the rise and fall of the ‘Grand Tour’, as well as the popularity of spas as the first example of resort-based tourism e.g. tourism in the Lake District which dates back to 1698, when many visitors travelled to the Lake District for the education and the pleasure of the journey.
1800-1900: during this period, seaside resorts emerged and grew rapidly. The latter half of the 19th century also saw the birth and development of the ‘package tour’, with Thomas Cook being widely considered as the originator of the concept.
1900 onwards: a period initially defined by increasing domestic tourism but, since the 1960s, by the rapid growth of international mass tourism.
The world has experienced a noticeable fluctuation on almost every thing while World War II, the tourism wasn’t apart and had major shifts; Industries have increasingly become global in the Post-World War II period. Infrastructures and transportation have faced fundamental changes, some of them are:
Using motor couches
Increase in car ownership
Increase in leisure time
More disposable income and paid holiday
Jet aircrafts developed
Computerized reservation systems
Introduction of holiday camps
Low cost airlines
Long haul destinations
Nowadays tourism is affected mostly by new social attitude of government and people toward terrorism after 9/11, financial recession in 2009 and growth of the internet and Medias.
Travel and tourism industry is really complicated and usually is considered as umbrella industry, since its dependence on a lot of factors and sectors which are working together, therefore every section should work correctly in order to be successful.
This industry encompasses transportation system, accommodations, tour operators, travel agencies, cruise lines, adventure companies, receptive operators, convention bureaus and so on.
According to Rowe et al (2002), Travel and tourism is able to be discussed in several categories, but we basically classify it in these three types that are presented by Diagram1:
Travel and Tourism
Domestic tourism is when people from a country take holidays, short breaks and day trip in their own homeland. Like a couple who take a two days break to visit their relatives in their own country.
Inbound tourism is when some people enter to another country form their home country. Like a business group which enter England in order to attend a conference.
Outbound tourism this terms is used when the people travel form their own country to visit the other part of the world for leisure or baseness. Like an Iranian family who goes to The U.S just for leisure.
In the chart below the number of both inbound and outbound tourism in the UK have been compared since 2008: National Statistic Online (2010)
Figure2 Source: National Statistic Online
There is also another model suggested by Leiper in 1990, according to Cooper et al, (2008) there are three basic elements of Leiper’s model:
Tourists are different in what their goals are and what they are traveling for but they are the first ring of this chain.
Tourist destination region
Tourist route region
The tourism sector
Some of the tourism sector includes:
International or national tourism organizations e.g.: UNWTO, Visitbritainâ€¦
Transportation system e.g. airlines, rail system, ocean liners, rental cars, buses â€¦
Accommodations e.g. hotels, B&Bs, time share complex, campingâ€¦
Tour operators, wholesalers, travel agencies, adventure companies, receptive operators, convention bureaus…
Visitor’s attractions e.g. museums, ancient monuments, landscapes…
Let’s put Leiper’s model in practice with an example, a British young couple is traveling to Brazil in order to spend their honeymoon in Rio; Rio is famous for its great beaches. They fly by British Air Line, and booked a five star hotel at the beach through the internet. This package was designed by Travel to Heaven which is a wholesaler but they have bought it from a travel agency near their home in Sheffield. They are going to take the train to London since the flight is form Heathrow air port.
A young couple is tourist.
Sheffield (England) is tourist generating region.
Rio (Brazil) is tourist destination region.
Taking the train from Sheffield and flying form Heathrow forms transit route region.
Tourism elements are particularly Travel to Heaven, a small travel agency, a five star hotel, catering, national and international organizations, and so on.
Tourism and travel Industry sometimes get impact of Integrations in companies which are an important occurrence; firstly we have to know that there are two kinds of integration, Horizontal and Vertical.
According to Travel and Tourism Publishing (2010):
Vertical integration in the travel industry is when a company has control over other companies that are at different levels in the chain of distribution or in different sectors for instance, TUI Travel UK owns Thomson and First Choice tour operating businesses, and the Thomson and First Choice travel agency chains.
Thomas Cook AG (a German group) owns the Thomas Cook and MyTravel tour operating companies (including Airtours), plus the Thomas Cook and Going Places chains of travel agencies.
Horizontal integration is when a company owns or has control over a number of companies at the same level in the distribution chain or the same industry sector for instance, many tour operating businesses that are now part of the ‘big two’ were originally independent companies, e.g. Neilson and Club 18-30 (now part of the Thomas Cook Group), and Something Special and the Holiday Cottages Group (now merged with Thomson).
These examples have made significant fluctuations in this industry both locally and globally.
The influence of local and national governments and international agencies on the travel and tourism industry
The nature of tourism industry as one of the world’s largest industries, employing approximately 235 million people and generating over 9.2 per cent of world GDP, due to its complex structure and its involvement in hundreds of different unit, cause it to be affected by the local and national governments as well as tourism organizations and agencies both domestically and globally.
Figure 1 from Charles et al (2006) shows, all of these functions must be carried out with a high degree of cooperative interaction between the public and private sectors.
Figure 4 Source: Tourism principle, practice and philosophies
Organizations which lead tourism and travel industry are classified in four levels; some of these organizations are briefly described below, in addition it should be mentioned that Iran and Turkey have been selected as samples about national organizations.
International organizations and agencies
UNWTO: The World Tourism Organization (UNWTO/OMT) is a specialized agency of the united â€Žnations and the leading international organization in the field of tourism. It serves as a â€Žglobal forum for tourism policy issues and a practical source of tourism know-how.â€Ž UNWTO (September 2010).
WTTC: The World Travel & Tourism Council (WTTC) is the forum for business leaders in the Travel & Tourism industry. With Chief Executives of some one hundred of the world’s leading Travel & Tourism companies as its Members, WTTC has a unique mandate and overview on all matters related to Travel & Tourism. WTTC (September 2010).
IATA: It is an international trade body, created over 60 years ago by a group of airlines. Today, IATA represents some 230 airlines comprising 93% of scheduled international air traffic. The organization also represents leads and serves the airline industry in general. IATA (September 2010)
Other organizations which have direct or indirect roles in tourism such as; WHO, IFC, IBRD, ICAO, UNESCO, OECD and so on
PATA: The Pacific Asia Travel Association is a not-for-profit membership association dedicated to building responsible travel to, from and within the Pacific Asia Region. PATA (September 2010)
ETC: The European Travel Commission (ETC) is an association of National Tourism Organizations (NTOs). It was created in 1948 to promote Europe as a destination to long-haul tourism markets. Visiteurope (September 2010)
ICHTO: Iran Cultural Heritage and Tourism Organization is responsible for culture heritage, handy crafts and tourism. Museums, hospitality sectors, catering services. Managing private sectors encircle organization duties.
KULTUR: Republic of Turkey Ministry of Culture and Tourism is a national organization which is in charge of tourism in Turkey.
GCHTO: Guilan Culture Heritage and Tourism Organization is a local organization that acts in Guilan province located in north of Iran.
THA: Tehran Hotels Association, this association works to develop hotels and manage hospitality issues in Tehran the capital of Iran. Every province has its own association.
These organizations are in charge of leading, managing, developing and making polices for expanding sustainable tourism criteria. Interrelate between these organizations is very crucial, since they are managing a massive industry.
For example UNWTO is well-known for its unique statistics and surveys, also Charles et al (2006) declare that UNWTO “has a central and decisive role in promoting the development of responsible, sustainable, and universally accessible tourism, with the aim of contributing to economic development, international understanding, peace, prosperity, and universal respect for and observance of human rights and fundamental freedoms. In pursuing this aim, WTO pays particular attention to the interests of the developing countries in the field of tourism. “
It’s not only this organization involve in different regional projects, for instance the project of Silk road an ancient 12,000 Km form Asia to Europe. UNWTO is working on poverty soothing and omission through sustainable tourism, protecting children from sexual exploitation in tourism, crisis management, ecotourism, and safety and security.
A good example for cooperation between all these organizations in different levels can be Rural Heritage Museum of Guilan this museum has been founded in 2005 with approximately four million dollars investment, it’s now in seventh phase. It’s the first eco-museum in Iran. UNESCO, ICOM (international council of museum), university of Tehran, ICHTO, GCHTO, Financial sponsors and local communities involved in founding this museum as an unique experience in Iran.
Here in this part of the report we are going to investigate what are the influences of these sectors on tourism; in addition the condition of these organizations and their effects will be examined in Iran.
Naturally role of the government in totalitarian systems and communist regimes is more than the other sectors, because in these kinds of systems almost everything in all levels is controlled by the government. In addition finding suitable information based on reliable statistic is a troublesome action indeed.
There are lots of outcomes can be identified in Iran during last few decades, for instance since Islamic revolution, Iran has faced fundamental fluctuations in politics, ideology, international relationship, economy and so on.
All of these elements obviously influenced tourism industry, for example after the revolution many western countries weren’t interested to visit Iran mainly, because of the black face that the totalitarian regime of Iran had and also because of eight years war among Iran and Iraq which made the region unsafe, also partly because of limitation in social freedom for example in clothing or drinking.
Political Issues and policies
Sanctions after sanctions is what shows how bitter is the situation of Iran’s policy in international community; however in tourism destinations and attractions in the world ranking, Iran is in top twenties but in multi billion dollar tourism business it’s just near the finish line.
It’s hard to approve that you are not a terrorist as an ordinary citizen of Iran when you are preparing to travel to other countries; the process for getting visa is a pain due to political policy which Iran has and the feedback of the international community.
Traveling to Iran form some countries is hard and sometimes impossible, for instance Israel and the United States.
Political stability was threatened by 2009 presidential race and deception in the result which ends with Green Movement protests. This has decreased all domestic, outbound and inbound tourism, thus the investment in privet sector has declined.
Economic Issues and policies
The effect of economic issues is mostly touchable in domestic and outbound tourism not inbounds.
Cutting taxes is an encouraging policy offered by government in order to increase privet sector role in tourism.
Investing in tourism industry due to interest rate, inflation and economic stability ties with high risk, the interest rate in Iran is about 15% – 25% and the inflation is usually more than 12% and mostly about 20%.
Inbound tourism is benefiting with cheaper expenses thanks to the currency power, one $ US is about 10,000 IRR.
Traveling by personal cars has been dramatically fall as a result of the policy of using Intelligent Fuel Cards that has been done by the government to reduce the petrol consumption in Iran.
Other issues and policies
Getting justification in order to run a business for private sector in Iran is a complicated and inexplicable process. A person who wants to invest in tourism fields should pass many filters and tests which aren’t necessarily relevant to the travel and tourism industry.
There was a gradual rise in government employee’s travel by offering Expedition Cards from the government sector. People can use it to decrease their expenses while traveling.
Educating and encouraging people to travel by advertising through the public Medias has made a fluctuation.
Producing statistics and information is forgotten by authorities, and practically there isn’t any reliable information about tourism industry.
The new policy of government is to invest in health tourism thanks to Iran’s great infrastructure and substructure in this case.
Investigate the effects of supply and demand on the travel and tourism industry
Planning for enormous industries such tourism is much more vital today, so there should be a wise vision of what we have as facts and what is forecasted for the future. In addition analyzing supply and demand is a consequential procedure in a flourishing industry.
As it’s been mentioned in the first task there are some models which illustrate structure of tourism, but it also can be defined with this two components; Cooper et al (2008)
Since demand-side has an immense influence on supply-side, even we can say that supply is a function of demand, demand as a key factor of tourism industry will be discussed in this task.
Indeed definition of demand is varying in the different subjects for example the explanation of demand in Economy may is differ with the definition in Psychology or Geography. But let’s clarify according to Page (2007) tourism demand has been defined in numerous ways, including:
The total number of persons who travel, or wish to travel, to use tourist facilities and services at places away from their places of work and residence;
The relationship between individuals’ motivation [to travel] and their ability to do so;
The schedule of the amount of any product or service which people are willing and able to buy at each specific price in a set of possible prices during a specified period of time.
Each of these definitions in tourism has some elements according to cooper et al (2008) there are three elements in tourism demand:
Effective or actual demand is the number of people participating in tourism, commonly expressed as the number of travelers. For instance thousands of people went to see World Cup in South Africa.
Suppressed demand, which consists of the proportion of the population who are unable to travel because of, circumstances e.g. lack of purchasing power or lack of holidays. There were some people that liked to go and involve in World Cup but due to some circumstances like lack of money they couldn’t make it.
No demand includes those members of the population who have no desire to travel and those who are unable to travel due to family commitments or illness or they choose to spend their income on the other things rather than tourism. About the World Cup my brother is not interested in football at all so he should be in no demand category. Or may be some people are banded to enter South Africa so they are potentially categorized in no demand.
As you can see all three elements can be explained in both geographical regions discussed by Leiper’s model.
This may be an interesting question that: Why do people go on holiday? So let’s see what motivations are, and what forms demand to travel. Knowing this is absolutely significant as a result of the importance of demand role in enhancement of tourism.
Tourism demand determinants are different and a lot but most of the experts, despite of new determinants like globalization and environmentalism, believe that Uysel 1998 has explained these factors wisely. Figure 6 is his model in demand determinants.
For better understanding let’s have some examples, through these samples some of these determinants will be discussed, imagine an archeologist wants to visit Ancient Iran Museum to see Cyrus the great cylinder which is the first human right declaration that had kept in British museum beforehand. She wasn’t able to go to Britain because it was not affordable for her for many reasons like: her disposable income wasn’t enough, tourism price is high and exchange rate is dramatically upward but now she can easily see it (Economical determinants).
Also if even she was able to pay for this travel she wasn’t able to leave Iran, due to social and psychological reasons for example her father doesn’t let her daughter leave Iran before she gets married, also she didn’t have enough time for spending, and she is afraid of flying and so on (Social psychological determinants).
Or think about an adventurous group interested in mount climbing and intend to go to Himalaya mountain range. Both Afghanistan and Nepal are good but due to war, terrorism, level of development in infrastructure and superstructure Nepal’s chance is more than Afghanistan (Exogenous determinants).
Figure 6 Source: Reproduce form Tourism management managing for change
Increasing tourism demand is led by two types of factors, Internal and External; external factors are those related to surrounding of person such as income and social condition. Internal factors are base on individual needs like health education and personal interests.
In addition demand changes under many other circumstances through consumer behavior and decision process, cooper et al (2008) claim that decision making process as a system made up of four basic elements:
Energizers of demand. These are the forces and influences that collectively create the motivation to travel or go on holiday.
Effectors of demand. The information process and subsequent purchase decisions are influenced by the tourist’s knowledge and perceptions of particular places, destinations or experiences. These are the pull factors which lead the tourist to making particular travel choices.
Roles and the decision-making process. Here, the important role is that of the family member who normally involved in the different stage of purchase process and the final resolution of decisions about when, where ad how the group will consume the tourism product.
Determinants of demand. A variety of economic, social and psychological factors determine particular choices or ‘filter out’ inappropriate products. These include tangible or descriptive demand factors, such as:
â€¢ Employment and income
â€¢ Paid holiday entitlement
â€¢ Education levels
â€¢ Demographic variables: age, gender, race, stage in the family life cycle.
In the other hand studying demand can clarify vital data which are main requirements for contriving future plans including:
Number of visitors arrived
Means of transportation
Length of staying
Type of accommodation
Money expenditure and so on
These data and lots of other details can be deriving by analyzing the demand statistics and information.
Now that there is a very good perception of demand in tourism we have to see what direct and indirect influences it has on supply, or in the other word how supply changes to meet demand. Some examples will clarify how the system is.
Globalization has changed the globe in many ways Medias, internet and satellites are playing a massive role in forming tourism demand these days and of course supply side used this as an opportunity. Internet booking, international ads, online packages and virtual tours are all important for demand side and tourists. Thanks to these changes, now there are lots of online sites which serve consumers before making a decision. These web sites and TV ads are very important to conceptualize tourists mind beforehand. It’s significant since it influences consumer behavior based on determinants that we discussed in advance.
The number of visitors during a year is different, for example during summer only a few people wants to visit Sahara desert or in the winter many people intend to go ski in Europe. Low season and High season are tow different concept which supply side should be aware of, the policies for these two occasions should be different, for example offering lower price services to attract people in low season may is one of the strategies. Also in the high season setting new flights can be helpful in order to cover all visitors.
Environmentalism as a new issue has changed the world view of point about many things, for example hotels try to be greener in order to pull more customers toward. Or tour packages to North Pole have been established as a result of increasing pattern of demand to visit ice melting phenomenon and being informed of what is going on in reality.
Tourism is a rapidly growing phenomenon and has become one of the largest industries in the
world. The impact of tourism is extremely varied. On one hand, it plays an important and certainly
positive role in the socio-economic and political development in destination countries by, for instance,
offering new employment opportunities. Also, in certain instances, it may contribute to a broader
cultural understanding by creating awareness, respecting the diversity of cultures and ways of life. On
the other hand, as a tool to create jobs, it has not fulfilled its expectations. At the same time, complaints
from tourist destinations concerning massive negative impacts upon environment, culture and residents’
ways of life have given rise to a demand for a more sustainable development in tourism. Different
parties will have to be involved in the process of developing sustainable tourism. This section focuses
on what the tourism industry itself can do in order to increase its sustainability, defines three major
problems, and suggests possible tourism initiatives to help solve these problems. Other problems
should also be included in the discussion for it to become exhaustive.
Wikipedia (July 2010)
(Merriam-Webster’s 11th collegiate dictionary)
Word Tourism Organization 1993.
Rowe et al (2002),
National Statistic Online (2010) [online] http://www.statistics.gov.uk/cci/nugget.asp?id=352[Accessed: 20 July 2010]
Cooper et al, 2008
Cox & Kings (2010) Centuries of Experience [online]http://www.coxandkings.co.uk/aboutus-history.aspx, [Accessed: 20 July 2010]
Travel and Tourism Publishing (2010) [online] www.tandtpublishing.co.uk/acatalog/pdf/unit12ppt.ppt [[Accessed: 27 July 2010]
wttc (September 2010)
IATA (September 2010)
PATA (September 2010)
Charles et al (2006)
Impact of tourism, UN PDF
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