history and structure of the travel and tourism industry

Introduction

Tourism is seen as one of the main industries in the world. “The World Travel and Tourism Council (2001) indicated that tourism creates more than ten percent of the global economic output and 1 in 10 jobs worldwide”.

“Tourism starts with the wealthy, with images of prestigious visits to seaside resorts and spas, Grand Tours and the activities of business enterprisers such as Thomas Cook” (Towner, 1995).

This paper describes the history and structure of the travel and tourism industry, the influence of local and national governments and international agencies, local and national economic policy, the effects of supply and demand on the travel and tourism industry and the positive and negative impacts of tourism.

History

Based on my perception, I would categorize the history of travel & tourism industry in three different time bands as follows:

• Before 1945
• 1945-1979
• 1980 to current day

Before 1945

In ancient times and approximately till the end of the 16th century people were living in agricultural communities was stationary, seldom moving from the local area and rural community. “Even with the beginning of the industrial revolution, which was making a slow start in the 18th century in urban and factory development, a richer ‘elite’ class alone enjoyed leisure and travel, while the workers worked in situ. Indeed as industrialization got under way leisure time or holidays where they existed tended to decrease” (Lickorish, Jenkins, 1997)

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Prior to the 1950s, tourism was an industry which was inconsistent; hotels, transport operators, tour operators, travel agents, all tended to work separately. Hotels were mainly in the business to sell bed nights. Railways and airlines were in the business to sell seats, Travel agents, were selling travel and holidays however in each case they tended to work very much independently.

Up until 1946, i.e. the period between the world wars, much of international travel was for the privileged, wealthy and elite groups in society.

“Thomas Cook introduced the first package tour in 1841, but in fact by that time the railways (The first passenger railway (Liverpool and Manchester) opened in 1830) themselves were offering excursion trips, for a traffic which they had not originally expected to carry. The first objective had been carriage of freight, and secondly the provision of faster transport for the current stagecoach travelers at far from cheap prices. The popularity of cheap excursion fares for special events was not expected” (Lickorish, Jenkins, 1997)

1945-1979

If we look at the year 1945 as the year in which the development of the main growth in the tourism industry started, we can construct some general explanation concerning to the changes which one can differentiate in the tourism industry.

From the mid-1950s onwards, mainly in the UK, the development of tour operators started changing the character of the industry from individual business activities to more integrated activities. “Hotels, for example, were beginning to see customers as wanting a range of services rather than simply buying accommodation. So hotels began to develop shopping arcades and later to offer secretarial centers in order to increase the spend of guests within the hotel complex. Transport operators, particularly in the airline business, saw the sale of transport services as being integral to a much wider need. Airlines offered insurance and accommodation booking for travelers” (Lickorish, Jenkins, 1997)

From 1950 onwards a combination of factors, such as increase in free time availability, increase in paid holidays, improvement of package tours, and growth in air transport – all combined to offer a wider possible holiday-taking market. This market was different regarding socioeconomic groups from the pre-1950 era.

1980 to current day

By the 1980s several airlines were offering full travel services such as arrangements for holidays, medical services, hiring car, etc.

By 1990 the formation of the tourism industry, especially in the United Kingdom and Europe, was effected by the development of a number of very big companies. “In the USA, American anti-trust laws discouraged, if not prohibited, the development of large integrated companies”. The experience of American in operational tour has been very different from Europe, mainly compared with the United Kingdom (Lickorish, Jenkins, 1997).

Air travel improved even more rapidly. Nevertheless, this is only piece of the story, as nonscheduled traffic (charter services) increased considerably as well. “Making up an estimated 18 per cent of total movement by the 1980s and 50 per cent or more on European routes, where the charter traffic took over the greater part of the holiday movement, as tour operators developed their own services” (Lickorish, Jenkins, 1997)

Future

The tourism business is likely to make important help to global economic development in the twenty first century. The cultural trade and understanding that is brought about through tourism is causing a more peaceful and internationalized universal society. Besides contributing to the expansion and renovation of local economies and communities, tourism development is playing an important role in both enhancing education and improving the position of the tourism business aimed at nurturing the next generation of those ready to take on the tourism business.

The Structure of Travel & Tourism Industry

This is the Leiper’s model:

There are 5 key elements of a tourism system

1. Departing Travelers
2. Traveler Generating Region
3. Transit Route Region
4. Tourist Destination Region
5. Returning Travelers

The first is the tourist (the human component), the next 3 components are geographical and organizational and relate to transport, tourist activities and the tourism industry which offers services, goods and facilities for tourists. The last is self explanatory.

And the environment: Economic, Technological, Physical, Political, Socio-cultural, legal, etc.

There are some contemporary influences:

1. Changing actions and motivations of markets
2. Changing patterns of tourist flows
3. Require for planned tourism expansion
4. Force for sustainable tourism expansion
5. Concern for social, cultural and economic impacts of tourism

The influence of local and national governments and international agencies

The position of government is an essential and multipart side of travel and tourism industry, involving policies. State involvement in the trade is a fairly recent practice for central government.

In general the state recognizes that the duties of the public sector must cover such matters as health, safety, fair trading and consumer interests and infrastructure in transport such as roads, railways and ports. These are all matters of direct concern to the resident population. There is a mixed record in the provision of leisure facilities, environmental protection and conservation which includes responsibility for the unique cultural heritage, an important part of Europe’s visitor attractions (Lickorish, Jenkins, 1997).

The state tourism agency, tourist board or government department will have an important role to play in advising on the strategy, offering opportunities to consult and cooperate with a dispersed private sector, and preparing a destination marketing strategy based on an identification of the appropriate markets and their needs and wishes (Lickorish, Jenkins, 1997).

Based on periodic surveys of the government role by the WTO, the OECD and individual countries, the principal functions of a Ministry of Tourism or of agencies under government control can be summarized as:

1. Research, statistics and planning.
2. Marketing.
3. Development of tourism resources.
4. Regulation, including trade regulation.
5. Training and education.
6. Facilitation/liberalization.

Local governments

At the local level the regional or local authority has a role similar to that of the central government and in many ways a more comprehensive and important one. Indeed, in the early days of mass travel stimulated by the growth of the railway network, public sector intervention in tourism was solely at the local level. There were no national tourism organizations.

The growth of large resorts, pioneered in Britain at the main seaside canters, encouraged the development of local tourism administrations to carry out the responsibilities of the host destination (Lickorish, Jenkins, 1997).

International organizations

There are a number of international bodies, both governmental and nongovernmental, with tourism interests. Government bodies reflect the national government’s interest in, and political will regarding, tourism intervention. In the industrialized countries, the tourism priority tends to be low. Because of the wide range of tourism activity the number of organizations with some concern or responsibility is great, but coordination and often cooperation as at the national level is weak. Furthermore, consultation with industry and operating sectors is often inadequate, as the sector’s voice is weak. The main sector industry bodies inevitably present the case of their own trade, sometimes as in modes of transport in a competitive situation. Thus the collective tourism approach is hard to organize and sustain, even when cooperation at the operating level is effective (Lickorish, Jenkins, 1997).

United Nations World Tourism Organization

The World Tourism Organization (UNWTO/OMT) is a specialized agency of the United ?Nations and the leading international organization in the field of tourism. It serves as a ?global forum for tourism policy issues and a practical source of tourism know-how (UNWTO 2007:1).?

The World Tourism Organization plays a role in promoting the development of responsible, ?sustainable and universally accessible tourism, paying particular attention to the ?interests of developing countries?. The Organization encourages the implementation ?of the Global Code of Ethics for Tourism, with a view to ensuring that member ?countries, tourist destinations and businesses maximize the positive economic, ?social and cultural effects of tourism and fully reap its benefits, while minimizing its ?negative social and environmental impacts (www.wikipedia.org).

The WTO has made efforts recently to strengthen its links with commercial and non-government partners through its system of affiliate membership which should help in the provision of practical guidance and as a basis for cooperative action (Lickorish, Jenkins, 1997).

Impact of political change on the travel and tourism industry

Tourism growth in many countries has not been this high, in particular those countries were faced with a range of political unstableness that have made happen to hold back development in tourism.

The political aspects of tourism are interwoven with its economic consequences…tourism is not only a “continuation of politics” but an integral part of the world’s political economy. In short, tourism is, or can be, a tool used not only for economic but for political means” (Edgell, 1990).

IRAN

Tourism in Iran before the accession of the theocracy was characterized by a significant numbers of visitors traveling to Iran for its diverse attractions, boasting cultural splendors and a diverse and beautiful landscape suitable for a range of activities. Tourism declined dramatically during the Iran-Iraq War in the 1980s but has subsequently revived.

Since the Iranian revolution in 1979, the majority of visitors to Iran have been religious pilgrims and businesspeople. Official figures do not distinguish between those traveling to Iran for business and those coming for pleasure, and they also include a large number of Diaspora Iranians returning to visit their families in Iran or making pilgrimages to holy Shia sites near Mashhad and elsewhere. Despite the international tensions, the government continues to project strong rises in visitor numbers and tourism revenue over the forecast period, and to talk of projects to build an additional 100 hotels, for example, to expand its currently limited stock.

In the early 2000s the industry still faced serious limitations in infrastructure, communications, regulatory norms, and personnel training. In late 2003 there were about 640 hotels in Iran and around 63,000 beds. Officials state that Iran has in recent years earned about US$1bn a year from tourism. Iran currently ranks 68th in tourism revenues worldwide. Iran with attractive natural and historical sites is rated among the 10 most touristic countries in the world. Close to 1.8% of national employment is generated in the tourism sector which is slated to increase to 10% in the next five years. Weak advertising, unstable regional conditions, a poor public image in some parts of the world, and absence of efficient planning schemes in the tourism sector have all hindered the growth of (www.wikipedia.org).

CHINA

After Mao’s death, one of the most senior officials who had advocated private plots in the early 1960s, Deng Xiaoping, initiated gradual market reforms that abolished the communes and collectivized industries of Mao, replacing them with the free-market system. Deng’s reforms vastly improved the standard of living of the Chinese people, the competitiveness of the Chinese economy, and caused China to become one of the fastest growing and most important economies in the world. It also led to one of the most rapid industrializations in world history. For this achievement he is sometimes known as “The Venerated Deng”. As a result of Deng’s reforms, China is widely regarded as a returning superpower.

Tourism in China has greatly expanded over the last few decades. The emergence of a newly rich middle class and an easing of restrictions on movement by the Chinese authorities are both fueling this travel boom. China has become one of the world’s most-watched and hottest outbound tourist markets. The world is on the cusp of a sustained Chinese outbound tourism boom.

China is the world’s fourth largest country for inbound tourism. The number of overseas tourists was 55 million in 2007. Foreign exchange income was 41.9 billion U.S. dollars, the world’s fifth largest in 2007. The number of domestic tourists totaled 1.61 billion, with a total income of 777.1 billion yuan.

According to the WTO, in 2020, China will become the largest tourist country and the fourth largest for overseas travel. In terms of total outbound travel spending, China is currently ranked fifth and is expected to be the fastest growing in the world from 2006 to 2015, jumping into the number two slot for total travel spending by 2015 (www.wikipedia.org).

The effects of supply and demand on the travel and tourism industry

Most studies modeling the demand for tourism have either used visitor arrivals or tourism earnings as a dependent variable (Narayan, 2002). Tourism demand is base on which all tourism related business decisions eventually rest. Companies and governments as a point incase, tour operators, hotels, airlines, and leisure facility providers are interested in the demand for their products by tourists. The accomplishment of many businesses depends completely on the status of tourism demand, and final management collapse is pretty often because of the collapse to meet market demand.

Influencing Factors

As we all experience the change around us the questions arises how these developments will have an impact on tourism demand. To name just a few categories:

• Economy (e.g. from BIP over exchange rates to perceived risk of loosing the job)
• Politics (e.g. the enlargement of the EU, taxation, environment)
• Crisis and threats (e.g. terrorism, epidemic diseases, earth quakes)
• Demographic Change (e.g. age structure, migration, educational level)
• Technology (e.g. transport, communication, information)

In addition we have to take into account the influences coming from general changes in consumer attitudes and, finally, the tourism industry itself, of course influencing the demand side of tourism (e.g. standardization of products, information channels, (over) capacities and price strategies).

All these factors are linked to each other (Lohmann 2004).

How can these factors have an impact?

Holiday demand is driven by needs, motives, and expectations, its realization depends on the individual economic situation and the freedom to travel.

Thus:

• External factors may have an impact on tourism demand by affecting the ability to travel (freedom, time, money, fitness) and the motivation to do so.
• Consumer Behavior is not a reaction on a single factor but on the whole set of influencing external factors. In addition it is driven by internal factors (e.g. motives, abilities etc.). Thus, the impact of a change in a single external factor is limited

Most of the external factors seem to be in favor for a sound development of tourism demand in Europe in the years to come. However, there are no signs for a general boom (Lohmann 2004).

Supply

While many tourism studies are focused on the demand side of tourism that is, the tourist, the supply side of the industry is often overlooked.

Supply is seen as being modeled by five independent components: attractions, transportation, services, information and promotion. Most important component is the tourism attraction (Gunn, C. A. 1997).

The supply of recreation and tourism is a complex combination of natural amenities, recreational sites, access, and private sector business activity which is influenced by an array of factors that act to provide opportunities that satisfy leisure-based travel demands. Measures of recreational site density that account for both physical/geographic size and population, or social capacity are used as key explanatory variables in models of tourism dependence (Marcouiller, Prey, 2004).

The Positive and Negative Social and Environmental Impacts of Tourism

The range impacts of Tourism include economic, socio-cultural and environmental impacts. Impacts could be negative and positive, but should never be undervalued. The conception of sustainability is factored into these tourism impacts, when the size of the impacts turns out to be large enough to intensely change socio-cultural, environmental and economic areas of a tourist destination.

Socially tourism has a great influence on the host societies. Tourism can be both a source of international amity, peace and understanding and a destroyer and corrupter of indigenous cultures, a source of ecological destruction, an assault of people’s privacy, dignity, and authenticity.

Here are possible positive effects of tourism:

• Developing positive attitudes towards each other
• Learning about each other’s culture and customs
• Reducing negative perceptions and stereotypes
• Developing friendships
• Developing pride, appreciation, understanding, respect, and tolerance for each other’s culture
• Increasing self-esteem of hosts and tourists
• Psychological satisfaction with interaction

So, social contacts between tourists and local people may result in mutual appreciation, understanding, tolerance, awareness, learning, family bonding respect, and liking. Residents are educated about the outside world without leaving their homes, while their visitors significantly learn about a distinctive culture. Local communities are benefited through contribution by tourism to the improvement of the social infrastructure like schools, libraries, health care institutions, internet cafes, and so on. Besides, if local culture is the base for attracting tourists to the region, it helps to preserve the local traditions and handicrafts which maybe were on the link of the extinction.

For example in Uzbekistan, particularly in such famous regions as

Samarqand, Buhara, and Horezm tourists contribute significantly to the preservation of traditional handcrafting wood carving, hammered copper work, handmade silk and carpets, and of course to preservation and maintenance of architectural and historical monuments.

Since Uzbekistan proclaimed its independence in 1991 many museums and monuments were renovated or opened to promote the national culture and traditions. Growing interest in this culture makes the local people proud of their way of life.

On the other side tourism can increase tension, hostility, and suspicion.

Claims of tourism as a vital force for peace are exaggerated. Indeed there is little evidence that tourism is drawing the world together (Robinson 1999). In this context economic and social impacts on the local community depend on how much of the incomes generated by tourists go to the host communities. In most all-inclusive package tours more than 80% of travelers’ fees go to the airlines, hotels and other international companies, not to local businessmen and workers.

On the other hand large hotel chain restaurants often import food to satisfy foreign visitors and rarely employ local staff for senior management positions, preventing local farmers and workers from reaping the benefit of their presence.

Tourism has the power to affect cultural change. Successful development of a resource can lead to numerous negative impacts. Among these are overdevelopment, assimilation, conflict, and artificial reconstruction. While presenting a culture to tourists may help preserve the culture, it can also dilute or even destroy it. The point is to promote tourism in the region so that it would both give incomes and create respect for the local tradition and culture.

There are also both negative and positive impacts of tourism on the local ecology. Tourism often grows into mass-tourism. It leads to the over consumption, pollution, and lack of resources.

However, from the ecological point of view tourism is often more acceptable and preferable than any other industrial production, as it is environmentally friendlier (Batir Mirbabayev, Malika Shagazatova, 2007).

Conclusion

Tourism is widely believed to be the most rapidly growing industry in both developing and developed countries, consider tourism as one means for creating new jobs and reducing unemployment in different regions (Balali, 2009).

The history of tourism is one of lumpy expansion, periods of massive growth interrupted by periods of recessions and stagnation (Lickorish, Jenkins, 1997).

International travel and tourism is the backbone of globalization and enriches the world in many ways: It promotes economic growth, increases trade, advances development, and creates higher disposable incomes.

It also strengthens communities, and, by bringing together people from diverse regions and backgrounds, advances the goals of peace and global understanding. These benefits hold true for developing, emerging, and industrialized countries, and they provide a major platform on which other industries can build (Gross, 2007).