The size and scope of the global tourism and hospitality industry
Analyse the size, nature and sub-sectors of the global tourism and hospitality industry 3
Analyse the role of stakeholders of the industry 3
Explain the history of the tourism and hospitality industry 4
Analyse the inter-relationships and links between tourism and other sectors 5
The food and accommodation sub-sectors within the global tourism and hospitality industry
Characterize the distinctions between different types of accommodation and their operation 5
Characterize the distinctions between different types of food operations 6
Analyse the factors affecting accommodation location decisions 6
Analyse the effectiveness of transport and distribution systems 7
The issues and influences affecting the global tourism and hospitality industry
Review the development of the industry and the reasons for change 8
Evaluate the impact of government activity and political issues 9
Define the contribution of the industry on the economy and its impacts 9
Evaluate the effect of trends in modern lifestyle habits 10
Evaluate the way in which external factors affect the industry and organizations within it 10
The growth of global tourism and hospitality brands
Define the characteristics and uses of branding 11
Analyse the development of global tourism and hospitality brands 11
Analyse the benefits of branding and brand loyalty 12
Explain the use of tourism and hospitality globalization strategies and their risks 13
Global tourism is also referred as international tourism and according to Wikipedia (2018), international tourism refers to tourism that crosses national borders.
The size and scope of the global tourism and hospitality industry
Analyse the size, nature and subsectors of the global tourism and hospitality industry
Global tourism is one of the largest industries around the globe. Arrivals of tourists internationally as increased by 5% in 2013, recording 1087 million arrivals and the receipts reached US$ 1159 billion worldwide in 2013 (UNWTO, 2013 cited in Slideshare.net, by Pena, 2018).
The industry is seasonal that is the demand changes according to the seasons of a particular destination. The tourism industry is sensitive to some factors like the political factors for example wars and crime will reduce the movement of tourists. Also the holidays and the products are perishable which means they can expire.
The sub-sectors are:
Public sector include all the government related organizations that maintain the tourism standards for the tourism and hospitality industry like the Zimbabwe Tourism Authority (ZTA).
Private sector they are individually owned and their main aim is to make profits like the owners of the hotels, lodges
Commercial sector focuses on making profit.
Catering sector is there to provide food and beverages to the tourists.
Analyse the role of stakeholders of the industry
Stakeholders help in creating employment as well as business opportunities. Income has been earned and also foreign currency has been generated through tourism products and activities. More so, they help in infrastructure development in favor of tourism like roads, airports.
Stakeholders in the tourism industry includes:
Customers came and buy tourism products to satisfy their needs and wants.
Employees are there to offer good services to the visitors so as to meet customers’ needs and wants.
International organizations like:
United Nation World Tourism Organization deals with the statistics and market research and the promotion of sustainable tourism policies (UNWTO, 2018).
International Air Transport Association supports airline activities and standardizing of prices, tickets and airway bills.
International Civil Aviation Organization standardize practices concerning air navigation, its infrastructure and flight inspection (Wikipedia, 2018).
Explain the history of the tourism and hospitality industry
According to the English Magazine (2018), the tourism history dates back as early as 2000BC when wealthy citizens of ancient Rome would spend their summers away from their towns. Greeks also travel around the same time to their gods. They were no proper roads during that time and this made travelling difficult. They used Roman coins as they were the acceptable form of currency for foreign exchange.
In the 17th to the 19th century horse raiding was a popular mode of transport. During these time roads were poorly surfaced and could not support fast and better transportation. Young men were send on a Grand Tour with their tutors for better education and new skills. Business opportunities for catering and entertainment grew. There was also the rise of the sea side resorts and also entertainment was provided. Railways were also built and the railway companies were promoting excursions. Steamships were introduced and they carry goods in bulk, mail and also people.
In the 20th century, there was the development of private car ownership which made the mid-class to be able to travel. This led to the development of motels which cater the needs of the travelers. Around this time the tourism acts were met and the government policies changed in favor of tourism.
Analyse the inter-relationships and links between tourism and other sectors
Tourism industry has inter-relationships and links with other sectors like:
Agricultural sector provides farm products like vegetables, fruits, meats to different food operations in the tourism industry so that they can provide different dishes, wines to the tourists.
Trade unions are there to promote and support the rights of the workers in the industry (The Economic Times, 2018).
Transport sector provide easy movement of people from one destination to the other. It also helps in transporting goods in the industry.
Arts and culture industry is there to entertain tourists through cultural dances and holding festivals like Victoria Falls Carnival where people from different regions showcases their cultures and dances.
Banking sector helps visitors with the foreign currency exchange.
The food and accommodation sub-sectors within the global tourism and hospitality industry
Characterize the distinctions between different types of accommodation and their operations
Accommodation can either be serviced in which catering is offered like in hotels, motels or non-serviced where there is self-catering like hostels. There are different types of accommodation (Luxury Accommodation, 2018) which includes:
Hotels – they are widely recognized for providing accommodation like Hotel Santa Lucia in Venice, Holiday Inn Hotels. They can be rated from one star hotels to five star hotels according to their service quality.
Bed and Breakfast – usually they are small lodges which offer overnight accommodation and breakfast only.
Hostels – they are budget accommodation were guest would rent a bed and would share another amenity like bathroom, kitchen.
Motels – these are hotels designed for motorists and is situated along the main roads. Usually has a parking space.
Holiday centres – these are camps which provide chalets as accommodation and also entertainment at a lower cost.
Timeshare – is when an apartment is owned by several owners and all of them has the right to use the accommodation for a given period of the year.
Characterize the distinctions between different types of food operations
Food operations has the responsibility to provide food and beverages to the customers. They are commercial sectors like restaurants and non-commercial sectors like institutions. Food operations include:
Restaurants sell food and drinks and they offer take-away, home delivery of customers can be served at their tables in the restaurant. There are different types of restaurants like family restaurants which can accommodate many people including children and also provide a parking space for the customers. Exclusive restaurants offer five star services and are usually located in five star hotels.
Fast food outlets are small shops which has limited sitting area and usually located in the CBD like Nandos. They offer meals like chicken, fish, chips, pizza which are easy to cook and to serve the customers.
Travel catering is the provision of food and drinks to people who are travelling like in trains, buses.
Catering and banqueting is when the food is served at the same time and on the premises. They cater for weddings, festivals, conference centres etc.
Analyse the factors affecting accommodation location decisions
According to the Expertsmind.com (2018), factors affecting the location decisions are:
The accommodation should be located where there are no political, cultural and economic situations because this will affect the business.
Safety requirements – the location should not be near explosive factories which may cause harm to the people.
There should be enough space for expansion in the future.
Local laws and regulations should be regarded while selecting a location.
Climate and suitability of land should be considered. If there are climatic conditions which are not favorable they will have to use suitable building techniques to overcome the conditions.
Availability of services like drainage systems, water, electricity and communication network are to be considered in selecting a location for accommodation.
The cost of the site should be reasonable for the accommodation that is going to be built.
Market proximity should be considered for the accommodation location. The location should be close to the market to reduce transport costs, the deliveries will be quick, react quickly to the service problems and respond to changes in demand.
Availability of labor and skills can affect the location decision because locals provide cheap labor than those who are hired from other places.
Analyse the effectiveness of transport and distribution systems
Transport systems are there to help travelers and goods to reach their destinations. There are four means of transport which are road, rail, water and air transport. Road transport there are cars, coaches which are cheap and can provide door to door services. It is faster than the water transport but however it can be affected congestion.
Rail transport carry goods in bulk and electrical trains are very fast. It cannot be affected by weather and they are no congestion but however they do not provide door to door services.
Water transport is the slowest mode of transport and cannot be accessed by some destinations which are landlocked like Zimbabwe. Also if can be affected by bad weather. However, it can accommodate many people according to the size of the ship and they carry goods in bulk.
Air transport is the fastest mode of transport, and it can be used for both domestic and global transportation. However, it can be affected by weather and does not offer door to door services.
The movement of products from the producer to the consumer is called the distribution chain. It can be either direct or indirect distribution. Direct distribution is when the tourism products are sold directly from the producer to the tourist and indirect distribution is when the products are sold through intermediaries which are the tour operator and the travel agent. The tour operator can create packages which will be cheap to the visitors. Indirect distribution saves time and cost and the intermediaries help in boosting the sales. However, there will be loss of communication between the consumer and the product supplier.
The issues and influences affecting the global tourism and hospitality industry
Review the development of the industry and the reason for change
There is development in transport systems, people now own their cars and this has made people to move to different destinations with their families during their own times. Car hire services are now provided to the visitors and there are also coaches to help them reach their destinations.
Development of technology has increased and this enables tourists to choose different destinations online before they travel. People can now book online for their reservations for accommodation and airlines bookings. The service providers are now able to advertise their products through the internet and social medias like Facebook, emails to lure more customers. Also the customers are able to buy their packages direct from the service providers and this saves time.
Infrastructure development allows tourists to visit more in different destinations of their choice. Roads have been improved for the destinations to be easily accessible. Airports are now available in the major destinations and also hotels, lodges, motels and many more have been built to accommodate guests.
Changes in business practices has created employment in the industry. It also encourages sustainable tourism and ecotourism hence strengthening the economy.
Evaluate the impact of government activity and political issues
Government activities in the tourism industry include:
Government creates the legal framework and impose regulations which the tourism businesses must follow.
Government give financial assistance to the tourism industry and this can attract tourism investment.
It also helps in infrastructure development like hotels, roads, health services, this benefits the industry and the local people.
It also improves transport systems and also good communication networks.
Government makes sure there is political stability in the country.
Some of the political issues leads to the downfall of tourism like in countries with political instabilities people will be afraid to visit those countries and this will cause the decline of the industry. The trade blocs promote tourism because they can reduce the visa restrictions among the member countries and this will promote the traveling of people form one-member country to another like the Southern African Development Community (SADC) a regional trade bloc.
Define the contribution of the industry on the economy and its impacts
Tourism and hospitality industry is one of the largest industries in the world. The industry generates employment and the jobs can either be direct like facilities that offer tourism products and services directly for example in hotels or indirect jobs in the informal sector like street vendors and guards. Foreign currency is earned as tourists come from different destinations to spend their money on different activities and services. Infrastructure development which also benefits the locals like the transport systems, communication networks, water supply and health services.
However, mostly developing countries suffer from leakages because of cost of imported goods like wines and coffee. Tourism is seasonal which causes under employment. Inflation can be caused by too many tourists who visit remote destinations and this causes the products and services to increase in prices. People from different destinations may bring in diseases and some will be involved in crimes.
Evaluate the effect of trends in modern lifestyle habits
People are now practicing sustainable tourism and this trend helped tourists to make positive impact on the environment (Wikipedia, 2018). Mostly in developed countries people have high discretionary income and this has made them to participate in tourism and travel more often than people with low discretionary income. The products and services in the tourism industry are now sold online. People are now able to make online bookings and this has changed the modern lifestyles. People now have money to spend in tourism because of the tax reduction by the government however, people can be discouraged from travelling to countries with government instability.
Evaluate the way in which external factors affect the industry and organizations within it
The external factors affecting the tourism industry includes:
Economic factors – high interest rate affect the potential customers in the industry hence the demand for tourism decreases. Also when there is inflation it becomes difficult for tourism businesses to budget and plan ahead. Exchange rates can also affect the industry whereby low value currency makes it difficult for the tourism operators to raw materials.
Political factors – regulations created by the government may reduce profitability in the industry for example high tourism levies and high taxes can reduce profit of the tourism operators. However, tax breaks can attract more tourism investment in a country.
Socio-cultural factors – developed countries which have high discretionary income have a greater demand for tourism and developing countries also have a greater demand for tourism because of their population which is expanding.
Technological factors – it has led to the disintermediation of intermediaries and new products are being created through technology.
Sustainability – is when tourists visit a place and make positive impact on the environment (Wikipedia, 2018) while protecting opportunities for the future
Corporate Social Responsibility – it is responsible for the use of natural and cultural resources and the lowering of pollution and waste.
The growth of global tourism and hospitality
Define the characteristics and uses of branding
According to the Business Dictionary.com (2018), branding is the process of creating a unique name, image or design for a product in the consumers’ mind through advertising with a consistent theme.
DeMers (2013) in Forbes.com (2018), state that characteristics and uses of branding include:
Uniqueness should be achieved so as to distinguish it from other brands.
Brands should have a target on the types of customers who are likely to purchase the products and services under the brand.
Brands should always remain consistent throughout their existence.
The brand should provide exposure through multiple channels in order to reach many customers.
Leadership should be available so as to guide the workers on the vision of the brand and also to solve complaints.
The brand should be able to offer customers’ needs and wants.
Analyse the development of global tourism and hospitality brands
Brands were used as a mark to identify goods by the people in the past. According to Holland (2017), pottery makers used different symbols to show the owner, materials and where the ceramic goods were produced. Also the Egyptians branded their bricks which were used to build the pyramids. Long ago people draw signs and symbols in caves to show their ownership to the goods. Brands were also used to show the quality of the product during the rise of mass production. Trade fairs were being held by the traders to show their products and services to the potential customers.
In the 1960s people now used mass media to advertise their branded products (Shadel, 2014). This paved way to mass production whereby companies were now able to produce a large quantity of goods. Customers had more choices to choose from a wide selection of branded products. This was the rise of brand loyalty whereby customers buy certain branded products repeatedly and this made their customers to spread good word of mouth about the products and this lures more customers.
In the present day, tourism producers now use internet to create adverts, logos and also the use of social media to advertise their branded products and services in the industry. These logos distinguish the value and the quality of the company’s products from that of the competitors.
Analyse the benefits of branding and brand loyalty
Branding helps to create loyalty and this makes the brand name to be well recognized because of the word of mouth which will be spread by the customers. Brands create a large image so that the customers will be sure that the brand will still exist in more years to come (Brandxpress blog.net, 2018). If the tourism business has a strong brand, it allows it to work together with different products and customers for a particular product will buy other products because of the brand (Brandxpress blog.net, 2018). An image of experience and reliability can be created by the brand because of the quality products and services they offer. Also the brand helps to show the value and quality of the products and services of the business.
Brand loyalty can be defined as the customers’ emotionally charged decision to buy the same brand repeatedly (Gunelius, 2018). Loyal customers will always purchase the branded products and also spread positive word of mouth the people around them.
Explain the use of tourism and hospitality globalization strategies and their risks
Globalization strategies in tourism and hospitality industry includes:
Strategic alliance is an agreement between two organizations that have decided to share resources to undertake specific mutually beneficial project (Investopedia, 2018). The alliance agreement can help both organizations to expand their market or even developing new markets. However, the strategic alliance agreement can cause conflicts between the organizations as they operate differently.
Franchising is being done in the tourism industry whereby an organization agrees to give another organization its trade name to use following its processes and procedures like Holiday Inn Hotels. It is easy to advertise since the brand name has its loyal customers already. However, some branches may not follow the standards of the main branch.
Acquisitions are being done so as to increase the market share, growth may be expected with the stakeholders and it decrease competition. However, problems may be created in the managing resources, and competencies and integration problems maybe caused (blogspot.com,2010).
Management contracts are also being signed in the tourism industry for the responsibilities of recruiting and training of the staff and also marketing the products and services of the organization. However, conflicts may rise in price changes and also discounts.
Globally, joint ventures are being arranged and they are only temporary and the losses, costs and profits can be shared among the companies but however, there can be lack of communication amongst the companies.
The tourism and hospitality industry create employment globally and this reduces poverty. The global tourism industry also contributes to the gross domestic product. Also it contributes to the development of infrastructure like transport systems, water supply, communication networks and improving the health service in favor of tourism but this also benefit the locals.
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