Exploring the Hospitality Industry, 4th Edition Class Notes

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Instructor’s ManualExploring the HospitalityIndustryFourth editionJOHN R. WALKERMcKibbon Professor Emeritus of Hotel and Restaurant ManagementUniversity ofSouth Florida Sarasota—Manatee and Fulbright Senior Specialist

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CONTENTS1.Hospitality Spirit12.Tourism153.Lodging334.Lodging Operations495.Cruising646.Restaurants787.Restaurant Operations918.Managed Services1059.Beverages12310.Clubs14211.Theme Parks and Attractions15412.Gaming Entertainment16613.Meetings, Conventions, and Expositions17814.Event Management194

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1Chapter OneHospitality SpiritI.Learning OutcomesAfter reading and studying this chapter, the students should be able to do thefollowing:Describe the interrelated nature of hospitality and tourism.Describe the characteristics of the hospitality industry.Summarize the Stephen Hall Code of Ethics for the hospitality and tourismindustry.Explain why service is so important to success in the hospitality industriesand how to perfect it.Determine and prepare yourself for a career path in the hospitality andtourism industry.II. Lecture ConceptsLearning Outcome 1Describe the interrelated nature of hospitality and tourism.The pineapple has enjoyed a rich and romantic heritage as a symbol ofwelcome, friendship, and hospitality.Since its introduction, the pineapple hasbeen internationally recognized as a symbol of hospitality, and a sign offriendliness, warmth, and cheer.The hospitality and tourism industry is the largest and fastest growingindustry in the world. The career options are endless and include positions inrestaurants, resorts, casino’s, cruise ships,theme parks, and many, manymore.The scope of the industry can be represented by the use of an umbrella thatcovers the many segments of the industry (Figures 1-2 and 1-3).CheckYour Knowledge (Page 5)1. Name three possible careers in the hospitality industry.Answer:Chef, general manager, director of marketing, executive housekeeper, or directorof human resources are just a few. The many facets of management leave the doorwide open for a career in any area and in any country around the world. The list ofcareer opportunities is limitless. (Page 3)

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22. What four broad industry segments are encompassed by the hospitalityand tourism industry?Answer:Travel, Lodging, Event Management, Restaurants, and Recreation are broadcategories of the industry. (Page 7)3. Hotels, motels, and resorts are locations where you might work in whichindustry segment of hospitality and tourism?Answer:The lodging industry incorporates career opportunities such as Front Desk,Housekeeping, Food and Beverage, Meetings, and Convention Management.(Page 3)PowerPoint Chapter 1 Slides 4–7Classroom ActivityHave students brainstorm a list of the different types of perishable items that areoffered by the hospitality industry. Remind them that this includes more than justhotel rooms. Possible items may include seats on an airplane, hospital beds,students not on a meal plan in schools, etc. Discuss what the ramifications are to thebusiness from not filling the hotel (for example) on a daily, weekly, or annual basis.Learning Outcome 2Identify the characteristics of the hospitality industry.Common characteristics of positions within the industry include long hours,including evenings, weekends, and holidays; businesses that are often open365 days a year; and a variety of shifts designed to address guest andbusiness needs.The career path within the industry is varied but typically begins as anhourly employee in an entry level position with the potential to work up to asenior executive position over several years.The industry constantly strives forguest satisfaction.The primary product produced in the hospitality industry isintangible; whileguests may receive a finished product such as a meal in a restaurant, the realproduct is service—something that cannot be seen or touched but somethingguests know if it is missing.As we produce our product, be it service or a menu item, we need the guest’sinput. This is calledinseparabilityof production and consumption.Perishabilityis another trait of the industry, whether referring to the shelf lifeof food or unsold rooms in a hotel’s inventory—if the product is not sold,then revenue is lost.

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3With over 75 million visitors a year to the United States, the hospitalityindustry has become aGlobal Villageembracingdiversityandinclusionofboth associates and guests.Hilton is built on the foundation of promoting inclusiveness by creating adiverse workforce through attracting and recruiting the best and brightesttalent.Classroom ActivityDiscuss possible career paths within the industry. Have students research positionswithin the hospitality field that interest them. Usehttp://www.bls.govorhttp://jobs.hilton.com/index.php as a starting point to research potential salaries,educational background, and growth for that position.Check Your Knowledge (Page 9)1. Describe the four shifts in the hospitality industry.Answer:Morning shift: 7:00 a.m.–3:00 p.m. This is the early shift and may begin an hour orso earlier or later but typically is 8 hours.Mid-shift: 10:00 a.m.–7:00 p.m. Great for experience and is typically covered bythose who need minimum supervision such as shift supervisors. This shift requirescoordination between the morning and evening shifts.Evening shift: 3:00 p.m.–11:00 p.m. This is particularly common in hotels and foodand beverage employees.Graveyard shift: 11:00 p.m.–7:30 a.m. Often referred to as the Night Audit, this shiftoften involves several accounting functions that are best performed during slowerbusiness times and operations. (Page 6)2. Explainhow the hospitality product is perishable.Answer:Perishability is one of the unique dimensions of the hospitality industry. Forexample, we have 1,400 guest rooms in inventory that are available to sell, but weonly sell 1,200. What happens with the 200 unsold guest rooms? Nothing! We havepermanently lost revenue from those rooms. (Page 6)3.How is increasing globalism driving change inthe industry?Answer:In order to remain competitive, the tourism and hospitality sector must continue todiversify if the needs of these new guests are to be met. This trend must continuein order to increase the skills, sensitivity, and cultural norming necessary to servelarger and rapidly growing new groups of affluent tourists.(Page 6)

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4PowerPoint Chapter 1 Slides 8–11Learning Outcome 3Summarize the Stephen Hall Code of Ethics for the hospitality and tourism industry.When making decisions, there are three key ethical categories that need to beaddressed:oIs it legal?oIs it balanced?oHow will it make me feel about myself?Ethics are a set of moral principles and values that people use to answerquestions about right and wrong.Ethics are also part of each individual’s value system, and there will bedifferences because each individual is different.At the core is the recognition that all people’s rights are important andshould not be violated.In many cases, situational ethics are applied instead of using moral absolutes.Decisions are made in each situation regarding whether it is right to steal, lie,drink and drive, etc.Throughout history, there have been many different sources, which haveserved as ethical guides.Stephen Hall, a pioneer of ethics in hospitality, has developed a code of ethicsfor the hospitality and tourism industry. His eleven-point code pinpoints theessence of ethics and morality as it relates to how we treat our guests andour employees. It simply says that we will be fair and equitable at all times.Classroom ActivitiesOption 1: Discovering new cultures.Investigate the World Fact Book athttps://www.cia.gov/library/publications/the-world-factbook/index.htmland find a non–English speaking country that has avastly different cultural environment. How is the country different? Is it a place youwould like to visit? Why or why not?Option 2: Present students with several different ethical situations commonlyexperienced in the hospitality industry. Have them role play various responses tothese situations and discuss why they selected the response they did.Possible ethical situations might include the following:Selecting avendor who offers free tickets to the “big” gameCatching an employee stealing from the cash registerLying on a job application

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5Check Your Knowledge (Page 10)1. Define ethics.Answer:Ethics is a set of moral principles and values that people use to answer questionsabout right and wrong. Ethics then are the moral principles that govern a person’sbehavior, and this includes a value system with established standards of behaviorand rights and wrongs. (Page 9)2. Summarize Hall’s ethical code.Answer:His eleven-point code pinpoints the essence of ethics and morality as it relates tohow we treat our guests and our employees. It simply says that we will be fair andequitable at all times. (Page 10)3. Present an industry-specific ethical question.Answer:A question might be: Is overbooking hotel rooms and airline seats ethical? How farwill we go to benefit our investors? (Page 6)PowerPoint Chapter 1 Slides 12–15Learning Outcome 4Explain why service is so important to success in the hospitality industries and howto perfect it.Providing great service is the core of the hospitality industry. Providing goodservice is not an easy task—it is not taught in schools, and many businessesdon’t feel they have the time to teach how to provide good service.Good service includes many elements including listening, anticipating theneeds of the guest, making eye contact, and much more. Relying more on theguest’s needs than on technology.Service providers are often not motivated to provide good service, and thereasons vary from person to person. According to Karl Albrech, there are“Seven Deadly Sins of Service,” which include:oApathyoBrush-offoColdnessoCondescensionoRoboticsoRule bookoRunaroundApproximately 70% of American and Canadian economies are engaged inservice industries.

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6In order to offer exceptional service everyone must understand who theguest is and embrace the concept of teamwork.Internal guests are staff members some of whom work in the back of thehouse (or behind the scenes) and provide support to the staff members in thefront of the house who take care of the external guests (or customer).For success in service, there are many elements that must be addressedincluding:oFocus on the guestoUnderstand the role of guest serviceoWeave a service culture into the company’s education and trainingsystemsoEmphasize “high touch” over “high tech”oThrive on change—constantly strive to improve the guest experienceBuild guest loyalty—it’s much more expensive to attract new gueststhan it isto retain current guests.“We buy loyalty with service.”Moments of Truth occur whenever a guest has an interaction with anemployee in the hospitality industry. Thousands of these occur every day,and the guest is constantly reassessing their view of the establishment basedon these brief encounters.Effective leaders understand that the landscape is constantly changing—ourguests, technology, product, and competition—and that with change comessome resistance.Empowered employees feel responsible for their jobs and the organization’ssuccess.Total Quality Management (TQM) is a participatory process that empowersemployees at all levels to work in groups to establish guest serviceexpectations and determine the best ways to meet those needs.The underlying premise is those doing the job daily have first-handknowledge of the problems and challenges that are faced and may also haveworkable solutions.TQM is a continuous process that works best when managers are also goodleaders.Benefits of a successful TQM program include cost reductions, increasedguest and employee satisfaction, and increased profits.In order to be successful, TQM must have support at all levels of theorganization.Empowerment is a feeling of partnership, with employees feeling responsiblefor their jobs and for the success of the organization.Companies that empower their employees encourage them to:oSpeak out about their problems and concernsoTake responsibility for their actionsoConsider themselves a network of professionalsoHave the authority to make their own decisions when serving guestsTo empower employees, managers must be willing to delegate and take risksin addition to fostering a learning environment.

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7The Malcolm Baldrige National Quality Award is the highest honor acompany can achieve.The Disney Approach to Guest ServiceSome companies, such as Disney and the Ritz Carlton, excel at providingexceptional service.The Disney mission statement is “We Create Happiness”; everything thatoccurs within the Disney environment is focused on achieving the missionstatement.Walt Disney had a simple philosophy when it came to his theme parkbusiness, which was to base everything on quality, service, and show. Toreinforce the service concept, customers are referred to as guests andemployees are called cast members. This simple change in how people arereferred to helps to set the expectations for how the guests will be treatedduring their stay.A fundamental element of the Disney training is the tradition and standardsof guest service that are the core of the company. Elements of service rangefrom all employees wearing a nametag with their first name on it to allowingcast members to use their “Personal Touch.”The Disney Service Model itself is based on these elements:oIt begins with a smileoMake eye contact and use body languageoRespect and welcome all guestsoValue the magicoInitiate guest contactoCreative service solutionsoEnd with a “thank you”All new managers receive additional technical training beyond the servicetraining that is provided to every cast member.Guest feedback through surveys and other methods of data collection helpDisney to continually improve the guest experience.Disney also recognizes the importance of recognizing and rewarding goodperformance from cast members and has found that non-cash recognitioncan be very powerful.Check Your Knowledge (Page 18)1.What are the seven deadly sins of service?Answer:In his best-selling bookAtAmerica’s Service, by Karl Albrecht, the"Seven DeadlySins of Service” are:ApathyBrush-offColdness

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8CondescensionRoboticsRule BookRunaround (Page 10)2.How do the front-of–the-house and the back-of-the-house cooperate togive outstanding service to each guest?Answer:Some corporations adopt the expression, “If you’re not serving the guest, you hadbetter be serving someone who is.” This is the essence of teamwork; someone intheback of the houseis serving someone in thefront of the house, who is serving theguest. Teamwork creates a positive environment to work in and reduces staffturnover. Most importantly, it helps to achieve the common goal of guestsatisfaction. Without teamwork, success in hospitality is difficult, if not impossible,to achieve. (Page 11)3.Contrast total quality management (TQM) and quality control (QC).Answer:TQM is a participatory process that empowers all levels of employees to work ingroups (teams) to establish guest service expectations and determine the best wayto meet or exceed those expectations.TQM works best when top executives and managers take responsibility for theprocess and works best when they are good leaders.QC focuses on error detection and is more product oriented than service oriented.(Page 15)PowerPoint Chapter 1 Slides 16–29Classroom ActivitiesOption 1: Ask students to share experiences of good and bad service they havereceived during travels or while visiting local establishments. In the sharing ofexperiences, ask the students to explain what made the experience good or bad intheir opinion. Lead a discussion regarding the role of perception and service.Option 2: What is a Moment of Truth? Give an example of a moment of truth youexperienced when service was excellent. When service was fair. When service waspoor. What made the difference in each of these situations? If you were the manager,how would you improve the guest experience so they did not experience poorservice?

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9Learning Outcome 5Determine and prepare yourself for a career path in the hospitality and tourismindustry.Is the Hospitality Industry for You?It is important to keep an open mind and take advantage of the opportunitiespresented. Progressing in a hospitality career is not always a straight linefrom one position to the next but instead may include working in a variety ofdepartments and capacities.It is also important to set career goals; this will help you make decisions onyour career path.The most important element of success in the hospitality industry is a serviceattitude.Personal characteristics such as honesty, hard work, team player, beingprepared to work long hours when necessary, cope with stress, goodcommunication skills, and a strong desire to exceed guest expectations arecritical for success.Recruiters look for service-oriented people.Recruiters also look for leadership characteristics.“Leading is the process by which a person with vision is able to influence theactivities and outcomes of others in a desired way.”Good leaders have good habits.Leading by example includes finding good mentors, don’t be a complainer,make people feel important, avoid arguments, and many others all focusedon the internal and external guest.Self-Assessment and Personal PhilosophyAs you evaluate potential career options within the industry, it is importantto conduct a self-assessment. Use this as an opportunity to measure yourpersonal and professional strengths and weaknesses as they apply to yourchosen career goals.Developing a personal work philosophy is also important. What do youbelieve? How will this impact the way you work with others?Having a professional demeanor and appearance are also critical to successin this industry. Dressing appropriately for the workplace and using goodmanners will take you far.It is important that students start now with their development of leadershipskills by getting involved in on-campus activities.Involvement in professional organizations and associations will demonstrateyour commitment to a leadership role.

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10Check Your Knowledge (Page 21)1. What is a career path?Answer:A career path is the career progression available within each segment of thehospitality industry. A career path does not always go in a straight line, which issometimes described as a career ladder. (Page 19)2. Why is cross-training valuable?Answer:The key is“progression”through several areas to gain valuable experience and beable to“walk the talk.”Become an expert in each area before moving on. Advancingtoo quickly can be damaging. (Page 19)3.What are five attributes beneficial for a career in hospitality?Answer:There are many qualities that are beneficial to a career in hospitality includinghonesty, hard work, being a team player, willing to work long hours, able to copewith stress, good decision-making skills, good communication skills, dedication toproviding exceptional service, and having a desire to exceed guest expectations.(Page 20)PowerPoint Chapter 1 Slides 30–34Classroom ActivityOption 1: Invite the Director of Human Resources from a mid- to large-sized hotelcompany (or similar) to speak to the class about career opportunities with thecompany or in the industry. Have the guest speaker share their own journey toreach their position.Option 2: Have students explore some of the possible paths presented at two orthree local hotels or resorts. Investigate common pathways to General Manager andexecutive positions within the hotel group or chain.Option 3: Have students research the service philosophies of two different hotel orrestaurant companies. Create a chart listing the differences and similarities betweencompanies. Based on the service philosophy, choose which company you wouldprefer to work for and answer the question, “Why?”

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11Additional TopicsTrends in Hospitality (Page 22)Sustainability, or“greening”of hotelsGlobalizationTravelers are more concerned about safety and securityMore diverse employee populationFocus on serviceTechnology that improves guest services and cost controlsMore frequent legal issuesChanging demographicsGuests are concerned about health issuesGuests are more aware of technology services; better informedIII. Key Terms (Page 24)Affirmative actionAssembly managementBack of the houseBed and breakfastCateringCross-trainingDiversityEconomyEmpowermentEnglish common lawEqual opportunityEthicsExternal customerGlobalismGlobal villageGovernmentGuest satisfactionHotelsInclusionInseparabilityIntangibleInternal customerNational Restaurant Association (NRA)PerishabilityPhilosophyQuality controlResortsRevenueService industry

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12Total Quality Management (TQM)Value systemVoucherIV. Answer to the Case StudyBeing Promoted from Within (Page 23)Discussion Questions and possible replies:1.What are some possible reasons for thecarelessness of Tom’scolleagues?Being promoted from within initiates a new set of protocols for a newsupervisor. The friendly, relaxed attitude with coworkers will no longer workwith a new subordinate/supervisor relationship. Tom needs to adopt a newattitude toward his staff in order to reestablish the respect required tomaintain standards.2.How should Tom assess the current situation?A good cook doesn’t always make the best supervisor. Tom’s position may beon the line with the lax conditions and he needs to reestablish the workingconditions swiftly. It may be time for a meeting with the staff to inform themof the situation and then following up with strict enforcement. His staff maynot like the new Tom, but with fair and equitable enforcement, Tom may gainthe respect of the crew.3.If you were Tom’s supervisor, what advice would you have given himbefore he started his new position?Tell him to establish his position early with strict enforcement of thestandards. It may also be time to stop associating with the crew off hours.Management requires a new set of characteristics, and Tom will need toswitch gears to succeed.4.How can Tom regain his confidence in leadership, while still receivingrespect from others?His new position, along with the new responsibility and authority, willrequire a change in attitude toward his subordinates; his old friends. Friendsmay well take advantage of one another or not pay attention to their“oldbuddy”even though he’s in a position of authority. Perhaps a formal meetingwith the“new”staff would be appropriate. Understanding that authorityneeds to be exercised immediately would be a good start.5.If you were being supervised by Tom, and frustrated by the way hechooses to manage the kitchen, would you address him directly? If so,how?It would be appropriate to meet with Tom as soon as possible. There may besimple misunderstanding with his newly acquired tone and the way heexpresses authority. It may be completely different, and the relationshipsthat once were may no longer exist. He needs to make it clear that this is newrelationship.

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13V.Answers to the Review Questions (Page 24)1.Explain how hospitality and tourism are related.Answer:Travelers have a tendency to travel to places that are hospitable.The relationship between hospitality and tourism is inseparabledue to simultaneous production and consumption of the serviceproduct. Every guest/traveler has unique demands and each mustbe treated differently to satisfy their needs.It doesn’t matter whether the guest chooses a Fairmont hotel or aJ. W. Marriott or a McDonald’s or a Morton’s Steakhouse; the ideais that hospitality plays a role in satisfying the guest’sdemands,whether they are making this choice in Cleveland or in Paris.(Page 3)2.Describe the fundamental characteristics of the hospitality industry.Answer:Several characteristics of the hospitality industry are:a.Theindustryisconstantlystrivingforguestsatisfaction,leading to guest loyalty.b.Service spirit; the concept of people being glad to do somethingextra to make the guest’s experience memorable.c.Advancementopportunities;thehospitalityandtourismindustry is the largest and fastest growing industry in theworld.d.It is a 24/7 operation; there is a tendency to work longerhours, plus the work week is never the same. (Pages 5–7)3.What are three categories of questions that need to be answered tomake ethical decisions?Answer:a.Is it legal? Will I be violating civil law or company policy? Also,will I get fired if I accept it, allow it, or do it?b.Is it balanced? Is it fair to all concerned in both the short termand the long term? Does it promote win–win relationships?c.How will it make me feel about myself? Will it make me proud?Would I feel good if my family knew about it? (Page 9)4.Explain how Disney provides exemplary guest service?Answer:It begins with a smile. This is the universal language of hospitalityand service.

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14Make eye contact and use body language. This means stance,approach, and gestures.Respect and welcome all guests. This means being friendly, helpful,and going out ofone’sway to exceed guests’ expectations.Value the magic. This means that when they’re onstage castmembers are totally focused on creating the magic of Disneyland.Initiate guest contact. Cast members are reminded to activelyinitiate guest contact. Disney calls this being aggressively friendly.Creative service solutions. For example, one Disneyland Hotel castmember recently became aware of a little boy who had come fromthe Midwest with his parents to enjoy the park and then left earlybecause he was ill. The cast member approached the supervisorwith an idea to send the child chicken soup, a character plush toy,and a get-well card from Mickey. The supervisor loved the idea,and all cast members are now allowed to set up thesearrangements in similar situations without a supervisor’sapproval. (Page 17)5.Define a career goal for yourself. What experiences and personalqualities do you need to cultivate to succeed in your goal?Answer:Student answers will vary.

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15Chapter TwoTourismI.Learning OutcomesAfter reading and studying this chapter, the students should be able to do thefollowing:Explain the nature of tourismin today’s world.Describe the economic impact of tourism.Compare the different methods of tourist travel.List the important international and domestic tourism organizations.Compare the major promoters of tourism and describe how they promotetourism.Compare and contrast the major types of travel.Describe the sociocultural impact of tourism and changing concepts in theindustry.II. Lecture ConceptsLearning Outcome 1Explain the nature of tourism in today’s world.Historically, it is difficult to trace when tourism actually began as centuriesago few people traveled for business and pleasure in the same way we dotoday.Populations have been traveling for thousands of years for either commerceor pleasure. Today, changes in the industry continue as technology bringsabout new methods of travel including the railroads, automobiles, andairplanes.Tourism is a dynamic, evolving, consumer-driven force, which is also theworld’s largest industry if you include all the interrelated components underone umbrella.The travel and tourism umbrella includes the following industries: travel;lodging, conventions, expositions, meetings, and events; restaurants andmanaged services and recreation.The United Nations World Tourism Organization (UNWTO) is vested by theUnited Nations with a role of promoting tourism around the globe.The UNWTO defines tourism as “Tourism comprises the activities of personstraveling to and staying in places outside their usual environment for notmore than one consecutive year for leisure, business, and other purposes.”

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16Tourism is sometimes categorized by the following factors:oGeographyoOwnershipoFunctionoIndustryoMotiveThe UNWTO supports sustainable tourism (also referred to as ecotourism) isresponsible tourism.Sustainable tourism is defined as “responsible travel to natural areas thatconserves the environment and sustains the well-being of the local people.”Check Your Knowledge (Page 30)1. How does the UNWTO stimulate growth in International Tourism?Answer:The United Nations World Tourism Organization (UNWTO) encouragesgovernments, in partnership with the private sector, local authorities, andnongovernmental organizations, to play a vital role in tourism. The UNWTO helpscountries throughout the world to maximize the positive impacts of tourism, whileminimizing its possible negative consequences on the environment and societies.(Pages 27–28)2. What are the five classifications of tourism?Answer:Tourism can be classified in the following ways:Inbound International Tourism: visits to a country by nonresidents of the country.Outbound International Tourism: visits by residents of a country to another country.Internal Tourism: visits by tourists of a country to their own country.Domestic Tourism: inbound international plus internal tourists.National Tourism: internal tourists plus outbound international tourists. (Page 28)3. How would you explain the interdependency of tourism segments?Answer:Hotel guests need to travel to reach the hotel. They eat in nearby restaurants andvisit attractions. Each segment is, to an extent, dependent on the others for business.(Page 29)PowerPoint Chapter 2 Slides 4–14Classroom ActivitiesUsing resources found in the text and online, research a country that is considered amain travel destination for someone interested in sustainable tourism. Why did youchoose this destination? What are some of the impacts that tourism to thisdestination may have on the local culture (consider economic, environmental,and/or cultural). Share your findings with the class.

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17Learning Outcome 2Describe the economic impact of tourism.Tourism provides many benefits and is one of the world’s most importantsources for employment. It stimulates investment in the infrastructure,which helps to improve the living conditions of both local people andtourists.As the world’s largest industry, tourism provides the following globalprospects:oThe opening of borders between nationsoAn increase in both disposable income and vacations (leisure travel)oReasonably priced airfaresoAn increase in the number of people with more time and moneyoMore people with the urge to travelTourism and travel generate, directly and indirectly, 10 percent of the globalgross domestic product (GDP), investment, and employment. The industry isforecast to continue growing over the next decade.Based on available data, it is projected that the top tourist arrivaldestinations will be Europe, East Asia and the Pacific, and the Americas.These are followed by Africa, the Middle East, and South Asia.The continued growth of the industry presents many career prospects forstudents who will be graduating from hospitality management programs.Due to the interdependency of the industry, this appears to also be a fairlystable industry.Tourism has been growing at around 3.1 percent a year, faster than the widereconomy.Leisure travelers generate the most spending.Tourists bring new money into local economies, which has an impact beyondtheir initial spending. The money is recycled through the economy topurchase more goods and is spent by employees locally. This is known as theMultiplier Effect.PowerPoint Chapter Slides 15–17Learning Outcome 3Compare the different methods of tourist travel.Travel by AirAir travel can make travel easier and more convenient and allows access toremote locations that many could not visit in the past.Reasonable airfares provide more travelers an affordable travel opportunity.Hotels, cruise lines, and rental car agencies depend on air travelers to filltheir rooms or book their services and also rely on these travelers to helpwith their profits.

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18Many U.S. airlines have formed partnerships in order to increase access toareas not serviced by their airline.The hub-and-spoke system allows passengers to travel from one smaller cityto another via one or more hubs.The hubs allow passengers easier access to connecting flights.The two main benefits of the hub-and-spoke system are:oMore cities can be serviced by the airlines.oAirlines can maximize passenger loads from smaller cities and reducefuel costs.Classroom ActivityVisit several of the different travel sites found online and get prices for a round-tripairline ticket between two cities within the United States using the followingparameters:More than 60 days out30–59 days out15–29 days out7–14 days outNext dayCompare the prices and create a visual presentation to share with the class.Conduct the same research but substitute a European or Asian destination for one ofthe cities.Discuss the differences you found in prices and reflect on why domestic travel mayor may not be different than foreign travel.Travel by RailRail travel played a major role in influencing the building of towns and citiesduring the height of the locomotive age.Rail travel was a major force in the development of hotels near rail depots andhelped opening up the American West.Another factor that led to the development of railroads within the United Stateswas the need to move goods and people from one part of the country to another.Rail travel made long distance travel available to the masses, and it wasaffordable and much quicker than sailing or traveling by horse and carriage.Travel by rail began to decline in the United States in the 1920s as car (and tosome extent)andbus travel gained in popularity.By the 1960s most long-distance travel had been replaced by airplanes.In Europe and Asia, rail travel continues to play a major role as high-speednetworks are well developed.oThe Eurostar connects Great Britain to mainland Europe.oFrance uses TGV trains that serve over 150 cities in France and travel atspeeds of 200 mph.oJapan has the bullet train system, which services Tokyo and Osaka in 3hours and 10 minutes, covering 550 miles.

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19Another popular option for many in Europe is the Eurail pass, which allowsvisitors to purchase a pass for first class rail service among several Europeancountries for one lump sum.oThe Eurail pass is only sold outside of Europe.oSimilar passes can also be found in Australia, India, Canada, and China.Maglev trains, currently being built in Shanghai, may represent the future of railtravel, reaching speeds of over 300 mph, and are propelled by magnetic forces.Classroom ActivityResearch the Maglev train and discuss the economic feasibility of building thesetypes of systems. What are the potential benefits of this type of train travel? Whatare the potential limitations or drawbacks? Explain your rationale.Travel by CarThe internal combustion engine was invented in Germany but quicklybecame an American obsession.For traveling short and medium distances, the car is still one of the mostconvenient forms of transportation. It is not uncommon for an Americandriver to drive 20,000 miles or more per year.Car travel is the largest of all segments of ground travel.Advantages to car travel include:oEasy accessibility to areas that otherwise could not be reached, i.e.,mountain resorts, ski lodges, remote beaches, etc.oTravel by car is generally economical, even with rising gas prices.In the Americas there are two primary automobile associations, which setindustry standards, lobby political parties to enforce stricter safety laws, andprovide many roadside services for members. The two associations in NorthAmerica are:oAmerican Automobile Association (AAA) in the United StatesoCanadian Automobile Association (CAA) in CanadaThe rental car industry also plays a major role in ground travel with over5,000 rental car companies operating in the United States.The four largest rental car companies are:oHertzoAvisoNationaloBudgetThese companies do 50 percent of their business with corporate accounts,while leisure travelers account for about 30 percent of their business.Other business is generated by insurance sales and provides a good source ofprofit for the rental car companies.

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20Classroom ActivityResearch the programs and special offers that one of the major rental car companiesoffer to:Corporate accountsLeisure travelersInsurance companies (if this data is available)Explore any frequent traveler programs they may offer and compare these specialrates to those offered to corporate accounts. Include any promotions or tie-ins tohotel companies or airlines.After completing your research, discuss the benefits of partnering with other travel-related businesses to build rental car sales.Travel by BusBus travel still plays a role in the travel and tourism industry, especially thetour and charter bus segment.oSome bus companies also offer destination management, incentiveprograms, and meeting planning services.The primary reasons travelers choose bus travel are convenience andeconomy.Bus travel does not just cover charter and tours but also includes:oLocal route serviceoCommuter servicesoAirport serviceoUrban and rapid transitGray Line is one of the oldest tour bus operations, having been founded in1910. It is a franchise operation based in Colorado.The company is known for its sightseeing services; however, they also offerpackage tours, customized stores, even meeting and convention services.Motor Coach Associations play an important role in promoting travel by bus.Check Your Knowledge (Page 35)1. How do airline alliances positively impact the airline industry as a whole?Answer:The airline industry forms strategic alliances to provide their passengers with easierticketing and transportation access to destinations in other countries not offered byU.S. airlines. Airlines have access to other airlines’passengers, thus enabling them tobe more efficient. (Page 32)2. What is the hub-and-spoke system?Answer:It is a method that enables passengers to travel from one smaller city to anothersmaller city via a hub or even two hubs. Similarly, passengers may originate theirtravel from a small city and use a hub to reach connecting flights to destinations

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21throughout the world. The two main benefits of the hub-and-spoke system are: (1)Airlines can service more cities at a lower cost and (2) airlines can maximizepassenger loads from small cities, thereby saving fuel.(Page 32)3. Describe the advantages of train, bus, and car travel.Answer:The bus is a good choice for cost-conscious travelers. Auto is most convenient forshort distances. Trains will get you there quickly in heavily packed areas. Airplaneswill be the choice for long distances. (Page 33)PowerPoint Chapter 2 Slides 19–31Learning Outcome 4List the important international and domestic tourism organizations.Tourism is an international ambassador that fosters goodwill andintercultural cooperation and understanding among people throughout theworld.Governments become involved in tourism decisions because tourism can alsoinclude travel across international borders and governments regulate theentrance and exit of all who enter their countries.There are several international tourism organizations that play a major rolein the development of travel and tourism including:oThe United Nations World Tourism Organization (UNWTO)The most widely recognized tourism organization on theplanetIt is the sole organization to represent all national and officialtourism interests of all its members.oThe International Air Transportation Association (IATA)The global organization that regulates almost all of theinternational airlinesThe IATA is involved in maintaining the stability of rates andfares of the airlines.oThe International Civil Aviation OrganizationCoordinates all aspects of civil aviation and is closely involvedin the formation of international standards and practicesoThe Pacific Area Travel Association (PATA)Represents 34 countries in Asia and the PacificoOther organizations that are involved in international tourism buthave other interests and responsibilities as well:The World Bank (WB)The United Nations Development ProgramThe Organization for Economic Cooperation and Development

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22In addition to the international tourism organizations, there are many groupsand departments within the country that are involved with promotingtourism within the United States:oThe National Tourism OrganizationAdvocates tourism development within worldwide countriesoThe Travel Industry of America (TIA)The main body for promoting and developing tourism withinthe United StatesThe mission of the TIA is to benefit the entire U.S. travelindustry by unifying its goals, coordinating private sectorefforts, and promoting and encouraging travel.oState Offices of TourismThese are offices tasked with developing and promotingtourism within each individual state.oCity Level Offices of Tourism and Convention CentersMany cities have created Convention and Visitors’Bureaus(CVBs) with the primary responsibility of attracting andretaining visitors to the city.Most CVBs are funded by the transient occupancy tax (TOT),which is charged to hotel guests.Check Your Knowledge (Page 38)1. How do airline alliances positively impact the airline industry as a whole?Answer:The airline industry forms strategic alliances to provide their passengers with easierticketing and transportation access to destinations in other countries not offered byU.S. airlines. Airlines have access to other airlines’passengers, thus enabling them tobe more efficient. (Page 32)2. Why does it make sense to regulate international airlines?Answer:Several international organizations have several goals in mind; to work together tostandardize air travel worldwide to make it easier and cost efficient for travelers.(Page 37)3. How do convention andvisitors’bureaus function?Answer:CVBs act on behalf of the local city to attract tourism. Their main purpose is to usetheir funding (TOT taxes) to find and retain tourists—to spend money. (Page 37)PowerPoint Chapter 2 Slides 32–36Classroom ActivitiesResearch the role of the convention andvisitors’bureau in your town. If your towndoes not have a CVB, research what organization in your town is responsible for

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23promoting tourism. Compare the role of the local CVB to the state office of tourism.What responsibilities are similar? What responsibilities are different? What do youthink happens to offices of tourism during difficult economic times? Explain.Learning Outcome 5Compare the major promoters of tourism and describe how they promote tourism.Promoters of tourism can take many forms ranging from nationalorganizations to independent travel agencies. Some of the main promotersof tourism are:oTour OperatorsA tour operator is a professional manager/escort who takes agroup of people on an organized tour following a planneditinerary.Tours may be conducted locally, such as a walking tour of areaarchitecture or may include a safari or tour of major Europeancities (for example).The National Tour Association is the leading business forprofessionals serving the tourist industry.oTravel AgenciesA travel agent acts as the travel counselor and sells on behalf ofairlines, cruise lines, rail and bus transportation, hotels, etc.The agent works as a broker bringing together the buyer(client) and seller (supplier).Travel agents serve their clients in a number of ways,providing helpful information about locations, vacationpackages, and more.The American Society of Travel Agents (ASTA) has over 20,000members in more than 165 countries.The number of bookings made through travel agents hassubstantially decreased over the last decade as the rise inonline bookings for all types of travel has increased.oTravel CorporationsAmerican Express (AMEX) is a corporation that also has aworldwide travel services division.The majority of AMEX Travel Services revenue is generated bybusiness travel on corporate accounts.Business contracts are set up individually based on annualtravel expenses.oCorporate Travel ManagerThe corporate travel manager works within a largecorporation to arrange travel for those who need it.Often, a bid process is used to find the best rates for theservices needed by the company.oTravel and Tour Wholesalers

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24This form of travel promotion gained prominence in the 1960swhen airlines had empty seats and wanted to sell them. Theyworked with wholesalers who would buy blocks of seats andcreate tours around these destinations. These packages werethen sold to travelers.There are three key types of tour wholesalers: independent,airlines working with tour wholesaler, and retail travel agentsdeveloping packages on their own.oCertified Travel Counselor (CTC)This is a professional designation awarded to those who havepassed an industry examination (administered by the ICTA)and who have 5 years of full-time experience in a travel agencyor in the marketing and promotion of travel.oNational Offices of Tourism (NOT)These organizations seek to improve the economy of thecountry they represent by increasing the number of visitors tothe country.oDestination Management Companies (DMCs)This is a service organization that provides a wide range ofprograms and services to meet a client needs.DMCs work closely with hotels; sometimes the DMCs also bookrooms or work with the hotel on organizing theme parties orother special events.A DMC does everything from greeting guests at the airport toproviding transportation to the hotel, organizing events andmore, depending on the budget.Check Your Knowledge (Page 41)1. Describe the services offered by a tour operator.Answer:A tour/trip is taken by a group of people traveling together, with a professionaltour manager/escort, following a planned itinerary.Vacation packages include a combination of two or more travel services: hotel, carrental, and air transportation, offered at a package price.(Pages38–39)2. How has the job of a travel agent changed in the last 20 years?Answer:The travel agent acts as a broker,bringing together the traveler and the tourindustry such as air, cruise lines, hotels,and auto rental companies. Due to theincreasing number of online bookings for all types of travel and hotelaccommodations, bookings have decreased substantially in the last 20 years. Thetravel agent adjusts by charging the traveler a fee for its services.(Page 39)

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25PowerPoint Chapter 2 Slides 37–40Classroom ActivitiesInvite a local travel agent or manager from a destination management company tospeak to the class regarding the changing demands of the industry.Learning Outcome 6Compare and contrast the major types of travel.Pleasure Travel comprises about 79% of domestic travel; leisure, recreation,holidays, and visiting family and friends.Travel is likely to increase in the coming years as we see:oLonger life spansoFlexible working hoursoEarly retirementsoGreater ease of traveloTendency to take shorter, more frequent tripsoIncrease in the standard of livingBusiness travel has declined in recent years. Businesses are cutting back ontheir business trips, yet business travelers are the most frequent guests ofmid- to high-priced hotels and resorts.More business travelers are making their own travel arrangements, and thisis having an effect on costs.Increased security around the world is also negatively affecting travel plans.3. Describe recent trends in corporate travel.Answer:Travel by corporations is constantly increasing, and with the ease of onlinebookings, travel is becoming more of a“keyboard”activity rather than bookingthrough travel agents or corporate travel managers.(Page 40)Check Your Knowledge (Page 43)1. What four basic considerations have emerged as factors influencing travel?Answer:Leisure, recreation, holidays, and visiting family and friends (Page 41)2. What are the main reasons peopletravel?Answer:For pleasure; about 79%For business (Pages 41–44)

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26PowerPoint Chapter 2 Slides 41–43Learning Outcome 7Describe the sociocultural impact of tourism and changing concepts in the industry.From a social and cultural perspective, tourism can leave both positive andnegative impacts on communities.Undoubtedly, tourism has made significant contributions to internationalunderstanding.World tourism organizations recognize that tourism is a means of enhancinginternational understanding, peace, prosperity, and universal respect for, andobservance of, human rights and fundamental freedom for all withoutdistinction as to race, sex, language, or religion.Seeing how others live is an interest of many tourists, and the exchange ofsociocultural values and activities is rewarding.The competitiveness of international destinations is based on such attributesas service quality, as well as the value for the price, safety, security,entertainment, weather, infrastructure, and natural environment.Political stability is also important in determining the desirability of adestination for international tourism.Sustainable tourism is also changing the landscape:oSustainable tourism includes infrastructure (roads, water, sewage,communications, and stores).oSuperstructure is the facilities built to accommodate tourists, such asairports, cruise line terminals, convention centers, hotels, andrestaurants.oEcotourism is“responsible tourism.”o“Environmentally responsible travel and visitation to relativelyundisturbed natural areas, that promotes conservation, has lownegative visitor impact, and provides beneficially activesocioeconomic involvement of local populations.”Cultural tourism is defined as tourist visits “motivated wholly or in part byinterest in the historical, artistic, scientific, or lifestyle/ heritage offerings of acommunity, region, group, or institution.”3. What are the reasons for the increase in travel?Answer:Longer life spansFlexible working hoursEarly retirementsGreater ease of travelTendency to take shorter, more frequent tripsIncrease in the standard of living(Pages41–42)

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27Tourism enhances the arts and crafts of a destination by providing newmarkets for artisans, often reviving a fading art or craft and fostering thedevelopment of traditional forms.Tourism that respects natural and built environments, in short, the heritageof the people and place, is called heritage tourism.PowerPoint Chapter 2 Slides 44–46Additional TopicsTrendsThere are several trends that can be noted within the travel and tourismindustry. Some of these are:oThe number of tourist arrivals will increase by about 4% per year.oChinese market will continue to rise.oMillennials are looking for adventure.oEcotourism will increase in importance.oGreen tourism will also increase.oGovernments will recognize the importance of tourism.oMarketing partnerships and corporate alliances will continue toincrease.oEmployment prospects will continue to improve.oMore environmentally friendly vehicles will be introduced along withmore hybrid vehicles.Check Your Knowledge (Page 48)1. Explain the concept of sustainable tourism.Answer:Improving the quality of an areas environment and resources—physical andsociocultural. Sustainable tourism includes infrastructure (roads, water, sewage,communications, and stores). Its purpose is to improve and sustain the tourism industry ina specific area.(Page 44)2. Define ecotourism.Answer:Ecotourism is“responsible tourism.”“Environmentally responsible travel and visitation to relativelyundisturbed natural areas,that promotes conservation, has low negative visitor impact, and provides beneficiallyactive socioeconomic involvement of local populations.”(Page 44)3. Apart from creating an ambience in the hotels, what purpose does thedisplay of local arts and crafts achieve?Answer:Provides a new market for local artisans, often reviving the fading art and craftmarket, increasing local employment, and supporting infrastructure (and taxes).(Page 47)

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28oGPS systems are becoming more standard in the industry.oRental companies are making it easier to bypass check-ins and usingself-service kiosks for speedier and 24/7 rentals.oTourism partnerships are developing,such as Greyhound’s Meet andGreet with cruise ships.oWebsite group specials are increasing cost-effective travel methods.oGreen Initiatives are becoming more important to reduce globalemissions.oGlobal athletics are drivers of tourism.oCulinary tourism is becoming more prominent.III. Key TermsAmerican Society of Travel Agents (ASTA)Business travelersCarbon footprintCertified Travel Counselor (CTC)Computer Reservation Systems (CRS)Convention and Visitors’Bureaus (CVBs)Corporate Travel ManagerCost per available seat mile (CASM)Cultural tourismEcosystemsEcotourismEcotouristsEnvironmental tourismEthical travelGeotourismGreen initiativesGreen tourismHeritage tourismHub-and-spoke systemInfrastructureInstitute of certified Travel Agents (ICTA)InterdependencyInternational Air Transportation Association (IATA)International Civil Aviation Organization (ICAO)Leisure travelersMultiplier effectNational Tourism Organization (NTO)Nature tourismOrganization for Economic Cooperation and Development (OECD)Pacifica Area Travel Association (PATA)Pleasure travelResponsible tourismSuperstructureSustainable tourism

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