Business in tourism & hospitality

BUSINESS
MANAGEMENT IN
TOURISM &
HOSPITALITY
By- Mrs. Himani Nikhil Batheja

The public sector is that part of economic and administrative
life that deals with the delivery of goods and services by and
for the government, whether national, regional or
local/municipal.The public sector in tourism is concerned with
national benefits presented through politics, which can
embrace economic factors like balance of payments and
employment.
The role of the public sector
MRS. HIMANI NIKHIL BATHEJA 3

Governments in the public sector
Tourism is subject to direct
and indirect government
intervention primarily
because of its employment
and income producing
possibilities which is an
integral part of the
machinery of many modern
governments, and of many
government programs in
both developed and lesser-
developed countries. (Lea
1988, Pearce 1992,
Richter1989).

Tourism Policy
Tourism policy is often closely linked to
– Employment opportunities
– Diversification for traditional rural businesses
– Development of infrastructure
– Development of tourism strategy
– Enhanced quality of life
– Cultural preservation
– Inward investment strategies

International organization
■ International agencies such as
the World Tourism Organisation,
the World Bank and UNESCO ;
Known as international
organizations.
■ Influence Tourism planning and
policy.

Supra-National Organization
■ Regional agencies or international.
■ Involving no of country
■ For National interests.
■ United Nations, EU (European Union ), ASEAN (Association
of Southeast Asian Nations ) ,APEC (Asia-Pacific Economic
Cooperation)

National Governments
The Ministry of Tourism
■ Initiate and establish
policy/framework for tourism
development and sustainability
■ Safeguard the industry via
enacting laws and regulations
■ Ensure compliance to regulations
■ Reduce bureaucracy
■ Develop linkages for
sustainability

Government funded agencies
■ Often work in particular policy or geographic area
■ Termed as QUANGOs(quasi-autonomous non government organizations)
■ Some NTO falls into.

Local authorities
■ In democratic system
■ Elected by local community

Tourism Planning Organizations
– Coordination of different functions, such as rights of way and access, conservation,
licensing etc.
– Planning processes and regulation required for developing new facilities
– Legislation and regulation, including licensing, health and safety, food safety and
environmental health
– Entrepreneurship, supporting new businesses, offering favourable business rates and
offering start-up funding
– Stimulation of supply and demand through investment in the activities of a DMP
– Marketing and promotion through a DMP or directly, including promotion of the area as
an investment destination
– Providing benefit to local communities and enhancing civic pride
– Protecting public interest, ensuring communities do not suffer the impacts of tourism
development, but can benefit from them

WHAT IS THE
'PRIVATE SECTOR'
• Part of the economy that is run by individuals and
companies for profit and is not state controlled.
• It encompasses all for-profit businesses that are not owned
or operated by the government.

Types of Private Sector Businesses
Private
Sector
Sole
proprietorships
Partnerships
Businesses
Large
corporations and
multinationals
Professional
and trade
associations
Company
Public
Limited
Company
Private
Limited
Company

Role of private sector
■ Build and manage the required tourist facilities in places of tourist
interests.
■ To undertake industry training and manpower development to
achieve excellence in quality of services.
■ To participate in the preparation of investment guidelines and
marketing strategies and assist in database creation and research.
■ To ensure preservation and protection of tourist attractions and take
lead in green practices
■ Build and operate the required tourist facilities in places of tourist
interests.

Role of private sector
■ To undertake industry training and manpower development to
achieve excellence in quality of services.
■ To participate in the preparation of investment guidelines and
marketing strategies and assist in database creation and research.
■ To ensure preservation and protection of tourist attractions, heritages
and take lead in green practices.

BASIS FOR
COMPARISON
PUBLIC SECTOR PRIVATE SECTOR
Meaning The section of a nation's
economy, which is under the
control of government, whether it
is central, state or local, is known
as the Public Sector.
The section of a nation's
economy, which owned
and controlled by private
individuals or companies
is known as Private
Sector.
Basic objective To serve the citizens of the
country.
Earning Profit
Raises money
from
Public Revenue like tax, duty,
penalty etc.
Issuing shares and
debentures or by taking
loan
Areas Police, Army, Mining, Health,
Manufacturing, Electricity,
Education, Transport,
Telecommunication, Agriculture,
Banking, Insurance, etc.
Finance, Information
Technology, Mining,
Transport, Education,
Telecommunication,
Manufacturing, Banking,
Construction,
Public Vs Private Sector

BASIS FOR
COMPARISON
PUBLIC SECTOR PRIVATE SECTOR
Benefits of
working
Job security, Retirement benefits,
Allowances, Perquisites etc.
Good salary package,
Competitive environment,
Incentives etc.
Basis of Promotion Seniority Merit
Job Stability Yes No
Public Vs Private Sector

INFRASTRUCTURE -
Private Sector-Influenced
Investments• Hotels
• Conference Centers
• Restaurants
• Destination Shopping
• Theme/Amusement Parks
• Sports Facilities
• Golf Courses
• Nightlife
• Gaming

WHY Public-Private Partnership
“PPPs enable the public sector to benefit from commercial dynamism, the ability to
raise finances in an environment of budgetary restrictions, innovations and
efficiencies, harnessed through the introduction of private sector investors who
contribute their own capital, skills and experience.

PUBLIC - PRIVATE PARTNERSHIP WHY
?
 Greater integration of policies and practices relating to tourism planning by the
public and pvt. sector is possible.
 Tourism infrastructure- most critical component can be financed jointly.
 Public private involvement can help development and beautification of tourism
projects
 Guides Private enterprises into areas and programs in which it would be more
successful.

Conclusion
■ Private Sector is progressing faster because promotes quality, not quantity;
it encourages talent. Public Sector is full of reservations like reservations
for minority section, females, a person with a disability and much more,
here nobody sees talent, it is completely ignored and because of this,
competent youths remain unemployed.
■ Public sector enterprises give so many facilities to their employees, which
makes them satisfied that their job is secured, due to which, all the people
are running after it like it is a marathon. However in the Private Sector, your
job is never secured, even if you give years to it, you can be fired anytime
just because of a single mistake.
■ Again in the private sector, where performance is king, the workload is
much, but it keeps you active, this is missing in the public sector due to
which the work sometimes becomes monotonous which creates boredom.
One thing is really good in Private Sector i.e. it is corruption free. In Public
Sector, you have to pay lots of money to the government officers even for a
simple work, for no reason. It is an unending debate, both are good at their
places, if the drawbacks are removed, they will surely prove good for the
economy.

The typical visitor journey

A simplified Tourism Value Chain
Accommodation
Hotels/Lodges/camps
/etc.
Food & Beverages
Restaurants,
Markets, Wholesalers,
retailers
Producers, farmers
Souvenirs
Souvenir shops,
markets, sellers
Ccraftsmen, local
producers
Transportation
Regional & Local
Bus, taxi, car rental,
etc.
Excursions
Guides, tour operators,
travel agencies, etc.

Entrepreneurship can be risky…
■ Sporadic Income (unsure
how much income you’ll
make)
■ Business will fail and lose
investment (you may fail)
■ Possibly liable for debts
(must pay back debt)
■ Harder to find work or start
again (hard to start)
■ Less Security (Not always
sure you’ll have a job)

“When times are bad, you might
lose nearly everything but keep at
it, don’t give up, and you might also
get it back.” – Conrad Hilton

Cesar Ritz’s name dominated the
hotel industry because of his
unique ability to understand the
needs and desires of his wealthy
customers.

He first opened his hotel in
Memphis where it grew
dramatically. - Kemmons Wilson

Barry has been dubbed as the
“King of Hotels” when he founded
the Starwood Hotels and Resorts. -
Barry Sternlicht

Environmentalinfluences
onHospitalityOrganization

BASIS FOR COMPARISON MICRO ENVIRONMENT MACRO ENVIRONMENT
Meaning Micro environment is
defined as the nearby
environment, under which
the firm operates.
Macro environment refers to the general
environment, that can affect the working
of all business enterprises.
Elements COSMIC, i.e. Competitors,
Organization itself,
Suppliers, Market,
Intermediaries and
Customers.
PESTLE, i.e. Population & Demographic,
Economic, Socio-Cultural, Technological,
Legal & Political and Environmental.
Nature of elements Specific General
Are these factors
controllable?
Yes No
Influence Directly and Regularly Indirectly and Distantly

CONCLUSION
Microenvironment and macro environment, both cover the overall environment of business.
So, they are more complementary rather than contradictory. The study of these
environments will help to know the strength, weakness, opportunity and threat of business.

Why environmental Analysis?
Purpose
■ Organizations are
effected by conditions in
the environment.
■ Managers needs to be
aware of these conditions
in order to take
Advantage of
opportunities that can
lead to higher profit.

PESTEL
ANALYSISA PESTEL analysis is a framework or tool used by marketers to
analyze and monitor the macro-environmental (external marketing
environment) factors that have an impact on an organization. The
result of which is used to identify threats and weaknesses which is
used in a SWOT analysis
PESTEL stands for:
P – Political
E – Economic
S – Social
T – Technological
E – Environmental
L – Legal

What is 'SWOT Analysis'
SWOT analysis is a framework used to evaluate a company's competitive position by
identifying its strengths, weaknesses, opportunities and threats. Specifically, SWOT
analysis is a foundational assessment model that measures what an organization can
and cannot do, and its potential opportunities and threats.

SWOT Template
To help you to carry out your analysis, write down answers to the following
questions.
Strengths
• What do you do well?
• What unique resources can you draw
on?
• What do others see as your strengths?
Weaknesses
• What could you improve?
• Where do you have fewer resources
than others?
• What are others likely to see as
weaknesses?
Opportunities
• What opportunities are open to you?
• What trends could you take advantage
of? How can you turn your strengths
into opportunities?
Threats
• What threats could harm you?
• What is your competition doing?
• What threats do your weaknesses
expose you to?

Top challenges faced by hospitality
businesses
■ Growth in the Sector - More Competition
■ Finding & Keeping Valued Customers
■ Changing Food Attitudes
■ Produce Going to Waste
■ Hiring the Best Staff
■ The Costs of Operating: Penalty Rates, Taxes & Fees
■ Social impact of tourism
■ Sex tourism and exploitation of women

Top challenges faced by hospitality
businesses –cont.
■ Trends and issues shaping tourism and hospitality
development
– Lifestyles
– Branding
– Food production and supply
– Technology
– Legislation and regulations

■ The rebirth of local arts and crafts
and traditional cultural activities
– Aboriginal bark painting on bark:
Price
– Vanuatu's Original Bungee
Jumpers: This awe inspiring
ancient tradition, also known as
land diving, is a feat of courage
and Stone Age ingenuity that
gave birth to modern bungee
jumping.
■ The revival of social and cultural life
of local population
■ Renewal of local architectural
traditions
■ Promotion of the need to
conserve areas of aesthetic and
cultural value

Negative Impact
■ Overcrowding
■ Decline of traditional activities
such as farming
■ Regions become over-dependent
on tourism
■ Demonstration effect
– Local people aspire to the
material standard and sex
openness of the tourists
■ Acculturation
– Local culture gradually give
way to foreign culture
– McDonaldization, Coca-
colaization

Globalization
■ Globalization is essentially a process by which an ever tightening network
of ties that cut across national political boundaries connects communities
in a single, interdependent whole, a shrinking world where local differences
are steadily eroded and subsumed within a massive global social order
Mowforth & Mundt, 1998

People InformationMoney TechnologyMaterial

Globalization and Tourism
Affordable air
travel
Increase in
disposable
incomes and
vacation
Information
communication
Increased
familiarity of
people with their
own country
Increased
intention to
travel abroad
Look for
the “new”,
the “other”,
“peripheral”,
and “beyond
the beaten
track”
New
destinations

Negative Impact of Globalization
■ Commodification
– conversion of a destination’s culture into a commodity in response to the
perceived or actual demands of the tourist market
– Loss of authenticity
■ Americanization
■ Homogenization

Traditional
Tourism, Culture and Commodification
Tourist gaze
Performance
Souvenirs
Exotic hotels
Props
Ceremonies
Arts and Crafts
Architecture
Costumes
Staged and
performed
Modified to make it
easily digested or
consumed
Look at or take photos

Case Study: Maasai 馬亞賽
■ Tourists visit Maasai of East Africa
– Dance in Maasai
– Local people pose for photos
– Maasai artwork as souvenirs
Azarya, V. (2004)

Loss of Authenticity
vs. Preservation of Culture
Traditional
culture
Preserved
Modified
Becomes commoditized
and “made for tourists”.
Local people forget its
original meanings
Traditions (e.g.,
ceremonies) are
separated and “made for
locals” and traditional
skills are saved from
oblivion
Loss of authenticity

Forces against Commodification
■ Since 1970, Mardi Gras has become a year-round
“industry”, attracting many tourists in New Orleans, USA
Gotham (2005)

Canadians / tourists wish to taste
Thai food, but not so hot or exotic
Thai food has to
be adapted
Limited flavored
dishes are
offered
Blending of
culture
Loss of
authenticity
Illusion of
homogeneity of
Thai cuisines
Loss of Authenticity in Food due to Commodification
Mainly 13
dishes

Americanization of Food Services
Trans-National
Corporations
manufactured culture
products spreads
throughout the world
Cultural proliferation
People everywhere eat
US food, watch US films,
wear US dresses
Cultural
Americanization
Cities are infused
with American
culture
Cultural
homogenization
Local culture
mixed with foreign
culture; city loses
its identity

Cultural homogenization is not only about food
Fast food
Fast food
Work
orientation 
Familial enjoying
meal together 
Original food style becomes
less original or authentic
Benjamin Barber in “Globalization and Culture”, Cato Policy Report
McDonald’s

Globalization also allows Chinese, Indian and Japanese food to spread to other
parts of the world
Sydney
Kuala Lumpur
Los Angeles

Developing country
Globalization and
International Investment
in Tourism
For developing
countries to
develop
tourism, they
must have
world class
infrastructure
to become
competitive
It may need to
borrow money to
build airports etc.
It may give tax
concessions to
outside
developers to
attract their
investments
The investors may
ask for change of
law before going
ahead with the
development, e.g.,
more lenient
environmental
regulation.

International Investment and Leakage
The Republic of the
Maldives relies on tourism
for its income
Resorts are
mainly funded by
European tour
operators
More than 50% of all labour
is imported.

Pressure of Large Operations on SMEs
International Operations enjoy
economy of scale, concerted
marketing, and efficient use of
computer reservation systems
This puts pressure on local small
and medium enterprises (SME)
B&B
Best
Western
Club Med
American
Express
Thomson
STAR ALLIANCE

Sex Tourism
■ Some tourists travel overseas for sex
■ Americans comprise an estimated 25% of all sex tourists
■ Men mostly choose Asia (Bangkok, Philippines, Indonesia, Sri Lanka), but the
trends has spread to Brazil, Cuba, Costa Rica, Eastern Europe and African countries
(Kenya, Tunisia, South Africa)
■ Women mostly choose Greece, Caribbean Basin, Genoa and Kenya (Africa), Bali
(Indonesia) and Phuket (Thailand)
Omondi (2003)

■ Motivation factors
– Anonymity
– Cheap
– Wish to try something new with a different race
– Buy their egos back
– Fleeing from unhappy relationships at home
■ Supply factors
– Poverty of the prostitutes
– Limited alternative opportunities to improve living
■ Destination factors
– Facilitating infrastructure (nightclubs, hotels)
– Laxity of police control

Trends and Issues
Shaping Tourism
and Hospitality
Development
Branding
Food production
and supply
Technology
Legislation and
regulations
Lifestyles

Hospitality Trends
Location: restaurants and bars will be available everywhere, plus a few
exceptional places being ‘destination’ restaurants
– Bars in Dublin, Ireland
– Meson de Candido, Spain
Jones, P. (2006). Hospitality megatrends.

■ Hospitality products are designed for market segments based on
lifestyle
– Family restaurants, sports bars and boutique hotels

■ Branding
– It is a key factor for companies to stand out from the
competitors
■ Trends in hospitality process design
– Production lining: services are organized on a production-
line basis
– Decoupling: separating back-of-house from front-of-house
activity in place and time
– Customer participation: customers help themselves for
service
■ Sustainability
– Concerned about the environment
■ Security and assets
– Customers expect that hotels are safe places for the guests
and their property

A. Lifestyles
Lifestyle and segmentation
Lifestyle
groups
Different
expectations
Different promotion
Different products
Different places
Different prices
Segmentation

Lifestyle cohorts
■ Baby boomers (born between 1946 and 1964)
– The working ones have less leisure time than other adults
– Continue to travel and go out
– Treating work and personal sacrifice as keys to success
– Occupied with materialistic possessions and money
– Skeptical about advertising
– Prefer “classic” comfort foods
– They seek new places to visit that often are off the beaten path
– They avoid organized tours
Cheung, Harker, & Harker (2008).

Generation X (born between 1965 & 1978)
– Embrace change and dislike stability
– Emphasize work-home balance
– Like material possessions and shopping
– Associate good foods with certain brands
– Those with children are family travellers. They often
stay with friends and relatives when they leave home,
spending less on hotel rooms. They like “packages”
that are reasonably priced and convenient.

Generation Y (born between
1980 & 1995/2000)
– Spend impulsively
– Technologically savvy
– Impatient and requiring
immediate gratification
– Want fast food, but also
healthier foods
– Fans for brands and
fashions

■ Implications
– As new lifestyle
groups emerge,
hospitality products
will be developed to
meet the tastes of
different groups.
■ More boutique hotels
providing unique
experiences
– The baby boomer
market is important
in terms of size, their
propensity to travel
and the willingness to
spend.

Socio-economic Types
■ Budget travellers
– Average income, fewer household assets, average age, but large
in number
– They prefer roadside or budget motels and family restaurants
chains
– They look at value added features, such as kids sleep free at
hotels, free in-room television, discount at restaurants etc.

Adventure travellers
– They have household income and personal
assets above the norm
– They take more domestic and international
travel trips than the average
– They want to explore new places and meet
new and different kinds of people
– Soft adventure group wants more services
and spend more
– Hard adventure types are likely to go to
places without hotels and restaurants

– They are wealthy and take the most trips
and longer trips
– They use travel agents
– They are NOT old
– They need to get rid of stress and seek
new experiences
– They look for excellent service and follow
through
– But this is a small market
Luxury travellers

Factors Influencing What People Eat
Food decisions
Cultural factors
Lifestyle factors
Psychological
factors
Food trends
Asp (1999)

■ Cultural factors
– Classification of what plants and animals are edible
varies according to culture
– Food is used to promote family unity when members
eat together
– Food can indicate ethnic, regional and national
identity
– Food is also used to develop friendships, provide
hospitality, as a gift and for celebration
– Foods that symbolize these functions are consumed

– Sensory attributes
■ Taste
■ Texture
■ Colour
■ Shape, form, size of pieces and
temperature
- Psychological factors
People usually prefer foods
that are
• Familiar
• Considered pleasant
• Usually the ones
eaten

B. Brand■ Brand = the name, associated with one or more items in the product line,
which is used to identify the source or character of the item(s)
Kotler
■ Brand associations
 facilitate memory retrieval
 attitudes / feeling
 credibility and confidence
 differentiate/position
 basis for extension

■ The brands of large and
international hospitality firms
reassure consumers that the
standards and the system will be
the same everywhere
– Hilton, Hyatt, Toyoko Inn
– Starbucks, McDonald’s

C. The Food Supply Chain
Labour
Grower / farmer
Manufacturer, Processor
Distributors, Wholesaler, Broker
Restaurant, Supermarket
Consumer
Labour contractor
Broker

■ Genetically Modified Food
■ Major GM food categories
– Soya beans
– Maize / corn
– Cotton
– Canola

■ Other possible sources of GMO
– Dairy products from cows injected with rbGH (a kind of genetically
engineered hormone).
– Food additives, enzymes, flavorings, and processing agents,
including the sweetener aspartame and rennet used to make
hard cheeses
– Meat, eggs, and dairy products from animals that have eaten GM
feed
– Honey and bee pollen that may have GM sources of pollen
– Contamination or pollination caused by GM seeds or pollen

■ Human health risks
– Many children in the US and Europe have developed life-
threatening allergies to peanuts and other foods. Introducing a
gene into a plant may create a new allergen
– Environmentalists are afraid that GM food may pose health
risks that are not yet discovered

■ European Union
– Consumers distrust biotechnology, its applications, and its regulators
– EU Regulations generally assume that GM foods differ from the risk
associated with other food products
– Precautionary principle
■ North America
– Consumers are much more passive than in the EU
– In Canada and the US, GM foods are regulated in the same manner as
food derived from conventional methods
– Principle of substantive equivalence
Hobbs & Plunkett (2006).

D. Technology
■ Information Communication Technologies / Web 2.0 have great impact on
the marketing of restaurants
■ Tripadvisor and OpenRice.com are some of the famous platform for
community members to share their reviews
Reviews
Ratings
Photos O’Conner (2008)
tripadvisor OpenRice.com

Web 2.0 and Consumer Community
Web 2.0
Platform
customer
customer
Restaurant
customer
customer
customer
customer
Community 
collective bargain
power

Groupon: Collective Buying Power
■ Groupon started in November 2008 in Chicago
■ It features discounts of 50-90% off great restaurants and dining

Good business for the restaurants?
– Groupon customers seldom spend more.
– These customers also seldom come back unless with another
groupon.
– Redemption seems unrestricted by anything other than a time
limit on 'the deal'. Whether a restaurant is equipped to deal with
ALL people redeeming their 50% off Groupons within a short time
is questionable

E. Legislation and Regulation
■ Non-smoking legislation
– Smoking (Public Health) Ordinance (Hong Kong)
– Hong Kong (2007), China (2006; May 2011), France (2008),
Spain (2011)
■ Smoke-free restaurants and bars reduce exposure to
tobacco smoke toxins among hospitality workers and
patrons

■ In China, the law's critics say the
penalties are only empty talk
■ The smokers can easily leave the
scene long before the arrival of
the law enforcement officials
■ Neither the smoking-control
volunteers nor the area's
supervision officials have the right
to detain offenders even if they
refuse to stop smoking.
■ It is complicated and time
consuming for people to dial the
public supervision hotline to
report offenders, and wait for the
law enforcement units to take
over the case

■ According to a review, all of the best designed studies report no
impact or a positive impact of smoke-free restaurant and bar
laws on sales or employment.
■ But studies funded by the bar and restaurant associations and
tobacco companies often find that smoking legislation has a
negative effect on restaurant and bar profits
Scollo, Lal, Hyland and Glantz (2003)

■ Dutiable Commodities (Liquor) Regulations (Cap. 109B)
– No licensee shall permit any person under the age of 18 years to drink
any intoxicating liquor on any licensed premises.
■ In US, research shows young people begin to drink at 11 for boys and at 13
for girls. Youth that begin drinking prior to age 15 are 40% more likely to
become alcoholics.

Minimum Wage Ordinance
■ The Statutory Minimum Wage
came into force on 1 May 2011
and the initial Statutory
Minimum Wage rate is $28 per
hour
What may be the effects on the
workers, the customers and the
employers?

Corporate Social Responsibility
A corporation may be held socially and ethically accountable by an expansive array of
stakeholders such as customers, employees, governments, communities, NGOs,
investors, supply chain members, unions, regulators and media.
Maloni & Brown (2006)

Dimensions of CSR
CSR in the Supply
Chain: Food
Industry
Animal welfare Biotechnology Health and safety
Environment
Labour and
human rights
ProcurementFair tradeCommunity

CSR in the Supply Chain: Food Industry
■ Animal welfare: animals should not endure unnecessary suffering
■ Biotechnology: sensitive to consumer attitudes about the use of
biotechnology
■ Community: volunteering and philanthropy (e.g., McDonald House)
■ Environment: sewage, air pollution, waste disposal, food miles

CSR in the Supply Chain: Food Industry■ Fair trade: should support prices to the suppliers to allow them to avoid
poverty and sustain business longevity
– Starbucks was accused by NGOs for not providing fair trade prices
to coffee suppliers
■ Health and safety: food security, food traceability, healthy lifestyles
■ Labor and human rights: worker registration, minimum wage, employment
terms and conditions disclosure, safety training, work safety
■ Procurement: issues of favoritisms and preferential treatment, bribery, gifts,
obscure contract terms

Food for Thought: 2017 Hospitality Survey
Results Revealed - Australia

What the survey stats say about the current
state of Australia’s hospitality industry
■ Most respondents reported an
increase in competition, which they
put down to a number of factors,
including a thriving foodie culture and
a rise in Australians fulfilling dreams
of opening a hospitality business.
■ Despite further competition, most
hospitality businesses still expect to
increase revenue in the next year.
With their revenue growth, hospitality
businesses plan to invest
predominantly in their staff, proving
that the hospitality industry remains a
strong job creator.

Direct and total contribution of travel
and tourism to the global economy from
2006 to 2017 (in trillion U.S. dollars)

Industry Market Research Report
May 2018
Checking in: Improving global economic conditions and increased travel spending will
boost industry revenue
Over the five years to 2018, the Global Hotels and Resorts industry experienced strong
growth as both consumers and businesses became more confident about their
finances and spent more liberally on luxuries, including travel. This culminated in a
substantial increase in both travel rates and hotel room and occupancy rates, two
indicators of a hotel's performance. Travel spending has also picked up quickly,
especially in emerging economies where tourism is on the rise. Global tourist arrivals
are expected to increase an annualized 4.9% over the five years to 2018 to reach 1.4
billion

What Products & Services Make Up
This Industry?
The Global Hotels & Resorts industry consists of High-end hotel
accommodation, medium-end hotel accommodation, low-end
hotel accommodation and resort accommodation.

COUNTRIES SHOWING STRONG INTERNATIONAL
TRAVEL & TOURISM GROWTH - 2017
Travel & Tourism has been
outpacing the global economy
for the past six years, which is
reflected in the growth figures
for individual countries as well.
Several countries have shown
especially dramatic growth in
visitor exports over this time
period. They have seen
significantly increased inflow of
tourism spending, thanks to
prioritization of tourism,
opening borders, infrastructure
investment, and promotional
efforts, among other factors.

• DIRECT includes only direct
transactions by tourists for
tourism services and products
such as accommodation,
recreation, transportation, and
other related sectors.
• INDIRECT measures the supply
chain impact.
• INDUCED measures the impact
of money spent in the local
economy by employees working
in jobs supported by tourism
both directly and indirectly.
This chart highlights the way in which the economic contribution of Travel &
Tourism spreads far beyond the direct transactions made by tourists. WTTC’s
analysis examines the economic contribution of Travel & Tourism on three
levels:
Adding together the direct, indirect, and induced impacts shows the total economic
impact of Travel & Tourism.

• https://www.wttc.org/-
/media/files/reports/economic-impact-
research/regions-2018/world2018.pdf
• https://www.wttc.org/-
/media/files/reports/economic-impact-
research/documents-2018/global-
economic-impact-and-issues-2018-eng.pdf
Assignment

Challenges impacting
■ Rising costs – though foreign travel is becoming popular, costs are also rising
and this is something organizations across the sector are becoming aware of.
■ Natural disasters – tragic events are out of our hands, however, they often
have a long-lasting impact on a region and can mean tourists stay away for
large periods of time.
■ Changing customer expectations – as competition increases among hotels,
restaurants etc. customers expect more and more and this is something
business owners must cater to effectively.

Opportunities for the sector
■ Developing nations – the tourism sector is
able to give hope to many developing states
and has the power to lift them out of poverty.
■ Multiplier effect – when one sector booms in
a local town, so do others. For example, if a
tourist destination is popular, hotels and
restaurants nearby will be required. This
creates an opportunity for other businesses.
■ Greater technology – a fast-moving sector
such as this should focus on new
technologies to create the best experience
possible for customers

Countries that rely on tourism
■ There are many places around the world that rely on tourism. The majority are
islands in the Caribbean and other places such as the Seychelles or Maldives.
■ Tourism is a sector easily accessible to disadvantaged peoples around the world as
it’s made up of lower-skilled jobs.
■ As we have seen, the hospitality sector has a ripple effect which means plenty of
industries benefit from its success, further raising the income of less developed
nations.

IMPACT OF HOSPITALITY ON THE
ECONOMY
The hospitality sector encompasses accommodation, food, and drink in external
venues, that aren’t a person’s home.
The government specifies that there are different types of impact the hospitality sector
can have on the economy:
■ An example of a direct impact would be the employment that hospitality creates.
■ An indirect impact is the further employment that’s created as a result of
hospitality, for example, jobs created in the supply and delivery industry,
marketing, or in the farming industry.

IMPACT OF HOSPITALITY ON THE
ECONOMY CONT.
■ Overall, the main factor taken into consideration is how much the sector
contributes to a nation’s GDP, the tax it contributes, and the employment it
creates.
■ This data is then used to compare the sector with other industries and
recommendations will be made on how the sector can improve overall.
■ Hospitality is a very popular academic route and is taken seriously in many parts of
the world as every nation wants to be known for delivering a good service. You can
study a range of hospitality courses, from vocational courses to even getting a
degree in the art of fine hospitality.
■ As tourism and travel continues to thrive around the world, so will hospitality.

TAKE A SMALL BUSINESS GLOBAL
■ Physical presence or online presence?
■ Do some market research
■ Research your competitors
■ Finding a partner

CHALLENGES ENTERPRISES FACE WHEN
ENTERING THE INTERNATIONAL MARKET
■ Starting a firm
■ Registering a firm
■ Advantages of going international
■ Challenges of going global

TOURISM AND ITS IMPACT ON THE
GLOBAL ECONOMY
■ Today, the tourism sector employs 292 million
people, which is roughly 1 in every 10 person on
the planet. Reports show that the outlook for the
sector in 2019 is predicted to be positive, with
plenty of more job opportunities.
■ The industry contributes to almost 10% of global
GDP. Depending on how much importance states
give to tourism, it’s estimated between 2-10% of a
nation’s GDP can be made up of tourism.
■ As the industry now focuses on methods of
sustainable tourism, it will enjoy continued growth.

TOURISM AND ITS IMPACT ON THE
GLOBAL ECONOMY - CONT.
■ Tourism leads to the creation of attractions, restaurants,
entertainment, and better services in a community. It has a
positive impact on other industries too: agriculture, transport,
and manufacture. With positive effects on the local community,
standards of living in a local area can also rise. Consumer
spending will also see an increase as more people are attracted
to a particular location.
■ Tourism is one of the biggest sectors in the services industry. Its
size means that whether you choose to remain in Canada after
your studies to work, or you decide to re-locate, there are
established tourism employment opportunities in destinations
as far as Australia, Africa, the Middle East, and more.

Reference
■ M. A Zuberi 2011 “Role of public sector in tourism development” Business recorder
- https://fp.brecorder.com/2011/06/201106201203750/, , p 1.
■ https://www.ibef.org/industry/tourism-hospitality-india/infographic, Latest
update: July, 2018
■ Department of Industrial Policy and Promotion (DIPP)
■ Press Information Bureau (PIB), Union Budget 2018-19
■ World Travel & Tourism Council’s Economic Impact 2017, News Article
■ https://economictimes.indiatimes.com/news/economy/policy/in-25-years-india-
has-never-really-embraced-
reform/articleshow/53374849.cms?utm_source=contentofinterest&utm_medium
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Tourism. September 2018.
■ http://www.shareyouressays.com/knowledge/the-role-of-public-sector-in-
hoteliering-business-in-india/96360
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feste-ed-eventi-in-italia-e-nel-mondo

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hapter3.pdf
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hospitality-sector
■ FICCI Launches Travel Tech Launchpad; Aims To Promote Digitisation
In Travel And Tourism, https://inc42.com/flash-feed/ficci-travel-tech-
launchpad/, Ambika Chopra, December 2016FICCI launches Travel
Tech Launchpad to boost digital drive in travel industry,
https://www.travhq.com/industry/events/ficci-launches-travel-
startup-launchpad-to-boost-digital-drive-in-travel-industry/, Akshay
Sharma, December 2016.
■ World Travel & Tourism Council’s (WTTC’s) Economic Impact 2018,MRS. HIMANI NIKHIL BATHEJA 127

■ Dayananda.K.C * and Prof. D.S.Leelavathi, IOSR Journal Of Humanities And Social
Science (IOSR-JHSS) Volume 21, Issue12, Ver. 1 (December. 2016) PP 37-43 e-
ISSN: 2279-0837, p-ISSN: 2279-0845. www.iosrjournals.org
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50 CEEB Regions”, Vol.11-1, pp37-46.
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hospitality and tourism sector”.
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creation”, Bali,Indonesia.
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publication”.
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■ Incredible India, Economic Times
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■ file:///C:/Users/ASK-025/Desktop/Chp%203.pdf
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■ Vanuatu’s Original Bungee Jumpers
■ https://www.gonomad.com/964-vanuatu-s-original-bungee-jumpers
■ https://en.wikipedia.org/wiki/Bark_painting

■ https://www.statista.com/statistics/233223/travel-and-tourism--
total-economic-contribution-worldwide/
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025/Desktop/Global%20Economic%20Impact%20and%20Issues%2
02017.pdf

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