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Exploring the Hospitality Industry, 4th Edition Class Notes

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    Instructor’s Manual Exploring the Hospitality Industry Fourth edition JOHN R. WALKER McKibbon Professor Emeritus of Hotel and Restaurant Management University of South Florida Sarasota — Manatee and Fulbright Senior Specialist

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    CONTENTS 1. Hospitality Spirit 1 2. Tourism 15 3. Lodging 33 4. Lodging Operations 49 5. Cruising 64 6. Restaurants 78 7. Restaurant Operations 91 8. Managed Services 105 9. Beverages 123 10. Clubs 142 11. Theme Parks and Attractions 154 12. Gaming Entertainment 166 13. Meetings, Conventions, and Expositions 178 14. Event Management 194

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    1 Chapter One Hospitality Spirit I. Learning Outcomes After reading and studying this chapter, the students should be able to do the following:  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 tourism industry.  Explain why service is so important to success in the hospitality industries and how to perfect it.  Determine and prepare yourself for a career path in the hospitality and tourism industry. II. Lecture Concepts Learning Outcome 1 Describe the interrelated nature of hospitality and tourism.  The pineapple has enjoyed a rich and romantic heritage as a symbol of welcome, friendship, and hospitality. Since its introduction, the pineapple has been internationally recognized as a symbol of hospitality, and a sign of friendliness, warmth, and cheer.  The hospitality and tourism industry is the largest and fastest growing industry in the world. The career options are endless and include positions in restaurants, resorts , casino’s, cruise ships, theme parks, and many, many more.  The scope of the industry can be represented by the use of an umbrella that covers the many segments of the industry (Figures 1-2 and 1-3). Check Your Knowledge (Page 5) 1. Name three possible careers in the hospitality industry. Answer: Chef, general manager, director of marketing, executive housekeeper, or director of human resources are just a few. The many facets of management leave the door wide open for a career in any area and in any country around the world. The list of career opportunities is limitless. (Page 3)

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    2 2. What four broad industry segments are encompassed by the hospitali ty and tourism industry? Answer: Travel, Lodging, Event Management, Restaurants, and Recreation are broad categories of the industry. (Page 7) 3. Hotels, motels, and resorts are locations where you might work in which industry segment of hospitality and t ourism? 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 – 7 Classroom Activity Have students brainstorm a list of the different types of perishable items that are offered by the hospitality industry. Remind them that this includes more than just hotel 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 the business from not filling the hotel (for example) on a daily, weekly, or annual basis. Learning Outcome 2 Identify 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 open 365 days a year; and a variety of shifts designed to address guest and business needs.  The career path within the industry is varied but typically begins as an hourly employee in an entry level position with the potential to work up to a senior executive position over several years.  The industry constantly strives for guest satisfaction.  The primary product produced in the hospitality industry is intangible ; while guests may receive a finished product such as a meal in a restaurant, the real product is service — something that cannot be seen or touched but something guests know if it is missing.  As we produce our prod uct, be it service or a menu item, we need the guest’s input. This is called inseparability of production and consumption.  Perishability is another trait of the industry, whether referring to the shelf life of 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 hospitality industry has become a Global Village embracing diversity and inclusion of both associates and guests.  Hilton is built on the foundation of promoting inclusiveness by creating a diverse workforce through attracting and recruiting the best and brightest talent. Classroom Activity Discuss possible career paths within the industry. Have students research positions within the hospitality field that interest them. Use http://www.bls.gov or http://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. D escribe 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 or so 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 by those who need minimum supervision such as shift supervisors. This shift requires coordination between the morning and evening shifts. Evening shift : 3:00 p.m. – 11:00 p.m. This is particularly common in hotels and food and beverage employees. Graveyard shift : 11:00 p.m. – 7:30 a.m. Often referred to as the Night Audit, this shift often involves several accounting functions that are best performed during slower business times and operations. (Page 6) 2 . Explain how the hospitality product is perishable . Answer: Perishability is one of the unique dimensions of the hospitality industry. For example, we have 1,400 guest rooms in inventory that are available to sell, but we only sell 1,200. What happens with the 200 unsold guest rooms? Nothing! We have permanently lost revenue from those rooms. (Page 6) 3 . How is increasing globalism driving change in the industry? Answer: In order to remain competitive, the tourism and hospitality sector must continue to diversify if the needs of these new guests are to be met. This trend must continue in order to increase the skills, sensitivity, and cultural norming necessary to serve larger and rapidly growing new groups of affluent tourists. (Page 6)

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    4 PowerPoint Chapter 1 Slides 8 – 11 Learning Outcome 3 Summarize the Stephen Hall Code of Ethics for the hospitality and tourism industry.  When making decisions, there are three key ethical categories that need to be addressed: o Is it legal? o Is it balanced? o How will it make me feel about myself?  Ethics are a set of moral principles and values that people use to answer questions about right and wrong.  Ethics are also part of each individual ’ s value system, and there will be differences because each individual is different.  At the core is the recognition that all people’s rights are important and should 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 have served as ethical guides.  Stephen Hall, a pioneer of ethics in hospitality, has developed a code of ethics for the hospitality and tourism industry. His eleven-point code pinpoints the essence of ethics and morality as it relates to how we treat our guests and our employees. It simply says that we will be fair and equitable at all times. Classroom Activities Option 1: Discovering new cultures. Investigate the World Fact Book at https://www.cia.gov/library/publications/the- world-factbook/index.html and find a non – English speaking country that has a vastly different cultural environment. How is the country different? Is it a place you would like to visit? Why or why not? Option 2: Present students with several different ethical situations commonly experienced in the hospitality industry. Have them role play various responses to these situations and discuss why they selected the response they did. Possible ethical situations might include the following:  Selecting a vendor 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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    5 Check Your Knowledge (Page 10) 1. Define ethics. Answer: Ethics is a set of moral principles and values that people use to answer questions about right and wrong. Ethics then are the moral principles that govern a person’s behavior, and this includes a value system with established standards of behavior and 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 to how we treat our guests and our employees. It simply says that we will be fair and equitable at all times. (Page 10) 3. Present an industry - specific ethical quest ion. Answer: A question might be: Is overbooking hotel rooms and airline seats ethical? How far will we go to benefit our investors? (Page 6) PowerPoint Chapter 1 Slides 12 – 15 Learning Outcome 4 Explain why service is so important to success in the hospitality industries and how to perfect it.  Providing great service is the core of the hospitality industry. Providing good service is not an easy task — it is not taught in schools, and many businesses don’t feel they have the time to teach how to provid e good service.  Good service includes many elements including listening, anticipating the needs of the guest, making eye contact, and much more. Relying more on the guest’s needs than on technology.  Service providers are often not motivated to provide good service, and the reasons vary from person to person. According to Karl Albrech, there are “Seven Deadly Sins of Service , ” which include: o Apathy o Brush-off o Coldness o Condescension o Robotics o Rule book o Runaround  Approximately 70% of American and Canadian economies are engaged in service industries.

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    6  In order to offer exceptional service everyone must understand who the guest is and embrace the concept of teamwork.  Internal guests are staff members some of whom work in the back of the house (or behind the scenes) and provide support to the staff members in the front of the house who take care of the external guests (or customer).  For success in service, there are many elements that must be addressed including: o Focus on the guest o Understand the role of guest service o Weave a service culture into the company’s education and training systems o Emphasize “high touch” over “high tech” o Thrive on change — constantly strive to improve the guest experience  Build guest loyalty —it’s much more expensive to attract new guests than it is to retain current guests. “We buy loyalty with service.”  Moments of Truth occur whenever a guest has an interaction with an employee in the hospitality industry. Thousands of these occur every day, and the guest is constantly reassessing their view of the establishment based on these brief encounters.  Effective leaders understand that the landscape is constantly changing — our guests, technology, product, and competition — and that with change comes some resistance.  Empowered employees feel responsible for their jobs and the organization ’ s success.  Total Quality Management (TQM) is a participatory process that empowers employees at all levels to work in groups to establish guest service expectations and determine the best ways to meet those needs.  The underlying premise is those doing the job daily have first-hand knowledge of the problems and challenges that are faced and may also have workable solutions.  TQM is a continuous process that works best when managers are also good leaders.  Benefits of a successful TQM program include cost reductions, increased guest and employee satisfaction, and increased profits.  In order to be successful, TQM must have support at all levels of the organization.  Empowerment is a feeling of partnership, with employees feeling responsible for their jobs and for the success of the organization.  Companies that empower their employees encourage them to: o Speak out about their problems and concerns o Take responsibility for their actions o Consider themselves a network of professionals o Have the authority to make their own decisions when serving guests  To empower employees, managers must be willing to delegate and take risks in addition to fostering a learning environment.

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    7  The Malcolm Baldrige National Quality Award is the highest honor a company can achieve. The Disney Approach to Guest Service  Some companies, such as Disney and the Ritz Carlton, excel at providing exceptional service.  The Disney mission statement is “We Create Happiness” ; everything that occurs within the Disney environment is focused on achieving the mission statement.  Walt Disney had a simple philosophy when it came to his theme park business, which was to base everything on quality, service, and show. To reinforce the service concept, customers are referred to as guests and employees are called cast members. This simple change in how people are referred to helps to set the expectations for how the guests will be treated during their stay.  A fundamental element of the Disney training is the tradition and standards of guest service that are the core of the company. Elements of service range from all employees wearing a nametag with their first name on it to allowing cast members to use their “Personal Touch . ”  The Disney Service Model itself is based on these elements: o It begins with a smile o Make eye contact and use body language o Respect and welcome all guests o Value the magic o Initiate guest contact o Creative service solutions o End with a “thank you”  All new managers receive additional technical training beyond the service training that is provided to every cast member.  Guest feedback through surveys and other methods of data collection help Disney to continually improve the guest experience.  Disney also recognizes the importance of recognizing and rewarding good performance from cast members and has found that non-cash recognition can be very powerful. Check Your Knowledge (Page 18) 1. What are the seven deadly sins of service? Answer: In his best-selling book At America’s Service , by Karl Albrecht, the " Seven Deadly Sins of Service” are: Apathy Brush-off Coldness

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    8 Condescension Robotics Rule Book Runaround (Page 10) 2. How do the front-of – the-house and the back-of-the-house cooperate to give outstanding service to each guest? Answer: Some corpo rations adopt the expression, “If you’re not serving the guest, you had better be serving someone who is.” This is the essence of teamwork; someone in the back of the house is serving someone in the front of the house , who is serving the guest. Teamwork creates a positive environment to work in and reduces staff turnover. Most importantly, it helps to achieve the common goal of guest satisfaction. 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 in groups (teams) to establish guest service expectations and determine the best way to meet or exceed those expectations. TQM works best when top executives and managers take responsibility for the process 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 – 29 Classroom Activities Option 1: Ask students to share experiences of good and bad service they have received during travels or while visiting local establishments. In the sharing of experiences, ask the students to explain what made the experience good or bad in their 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 you experienced when service was excellent. When service was fair. When service was poor. 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 poor service?

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    9 Learning Outcome 5 Determine and prepare yourself for a career path in the hospitality and tourism industry. Is the Hospitality Industry for You?  It is important to keep an open mind and take advantage of the opportunities presented. Progressing in a hospitality career is not always a straight line from one position to the next but instead may include working in a variety of departments and capacities.  It is also important to set career goals; this will help you make decisions on your career path.  The most important element of success in the hospitality industry is a service attitude.  Personal characteristics such as honesty, hard work, team player, being prepared to work long hours when necessary, cope with stress, good communication skills, and a strong desire to exceed guest expectations are critical 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 the activities 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 focused on the internal and external guest. Self-Assessment and Personal Philosophy  As you evaluate potential career options within the industry, it is important to conduct a self-assessment. Use this as an opportunity to measure your personal and professional strengths and weaknesses as they apply to your chosen career goals.  Developing a personal work philosophy is also important. What do you believe? How will this impact the way you work with others?  Having a professional demeanor and appearance are also critical to success in this industry. Dressing appropriately for the workplace and using good manners will take you far.  It is important that students start now with their development of leadership skills by getting involved in on-campus activities.  Involvement in professional organizations and associations will demonstrate your commitment to a leadership role.

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    10 Check Your Knowledge (Page 21 ) 1. What is a career path? Answer: A career path is the career progression available within each segment of the hospitality industry. A career path does not always go in a straight line, which is sometimes 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 be able to “ walk the talk. ” Become an expert in each area before moving on. Advancing too 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 including honesty, hard work, being a team player, willing to work long hours, able to cope with stress, good decision-making skills, good communication skills, dedication to providing exceptional service, and having a desire to exceed guest expectations. (Page 20) PowerPoint Chapter 1 Slides 30 – 34 Classroom Activity Option 1: Invite the Director of Human Resources from a mid- to large-sized hotel company (or similar) to speak to the class about career opportunities with the company or in the industry. Have the guest speaker share their own journey to reach their position. Option 2: Have students explore some of the possible paths presented at two or three local hotels or resorts. Investigate common pathways to General Manager and executive positions within the hotel group or chain. Option 3: Have students research the service philosophies of two different hotel or restaurant companies. Create a chart listing the differences and similarities between companies. Based on the service philosophy, choose which company you would prefer to work for and answer the question, “Why?”

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    11 Additional Topics Trends 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 informed III. Key Terms (Page 24) Affirmative action Assembly management Back of the house Bed and breakfast Catering Cross-training Diversity Economy Empowerment English common law Equal opportunity Ethics External customer Globalism Global village Government Guest satisfaction Hotels Inclusion Inseparability Intangible Internal customer National Restaurant Association (NRA) Perishability Philosophy Quality control Resorts Revenue Service industry

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    12 Total Quality Management (TQM) Value system Voucher IV. Answer to the Case Study Being Promoted from Within (Page 23) Discussion Questions and possible replies: 1. What are some possible reasons for the carelessness of Tom’s colleagues? Being promoted from within initiates a new set of protocols for a new supervisor. The friendly, relaxed attitude with coworkers will no longer work with a new subordinate/supervisor relationship. Tom needs to adopt a new attitude toward his staff in order to reestablish the respect required to maintain standards. 2. How should Tom assess the current situation? A good cook doesn’t always make the best supervisor. Tom’s position may be on the line with the lax conditions and he needs to reestablish the working conditions swiftly. It may be time for a meeting with the staff to inform them of the situation and then following up with strict enforcement. His staff may not like the new Tom, but with fair and equitable enforcement, Tom may gain the respect of the crew. 3. If you were Tom’s supervisor, what advice would you have given him before he started his new position? Tell him to establish his position early with strict enforcement of the standards. It may also be time to stop associating with the crew off hours. Management requires a new set of characteristics, and Tom will need to switch gears to succeed. 4. How can Tom regain his confidence in leadership, while still receiving respect from others? His new position, along with the new responsibility and authority, will require a change in attitude toward his subordinates; his old friends. Friends may well take advantage of one another or not pay attention to their “ old buddy ” even though he’s in a position of authority. Perhaps a formal meeting with the “ new ” staff would be appropriate. Understanding that authority needs to be exercised immediately would be a good start. 5. If you were being supervised by Tom, and frustrated by the way he chooses 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 be simple misunderstanding with his newly acquired tone and the way he expresses authority. It may be completely different, and the relationships that once were may no longer exist. He needs to make it clear that this is new relationship.

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    13 V. 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 inseparable due to simultaneous production and consumption of the service product. Every guest/traveler has unique demands and each must be treated differently to satisfy their needs. It doesn’t matter whether the guest chooses a Fairmont hotel or a J. W. Marriott or a McDonald’s or a Morton’s Steakhouse ; the idea is that hospitality plays a role in satisfying the guest ’s demands, 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. The industry is constantly striving for guest satisfaction, leading to guest loyalty. b. Service spirit; the concept of people being glad to do something extra to make the guest’s experience memorable. c. Advancement opportunities; the hospitality and tourism industry is the largest and fastest growing industry in the world. d. It is a 24/7 operation; there is a tendency to work longer hours, plus the work week is never the same. (Pages 5 – 7) 3. What are three categories of questions that need to be answered to make 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 term and 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 hospitality and service.

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    14 Make 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 of one’s way to exceed guests ’ expectations. Value the magic . This means that when they’re onstage cast members are totally focused on creating the magic of Disneyland. Initiate guest contact . Cast members are reminded to actively initiate guest contact. Disney calls this being aggressively friendly. Creative service solutions . For example, one Disneyland Hotel cast member recently became aware of a little boy who had come from the Midwest with his parents to enjoy the park and then left early because he was ill. The cast member approached the supervisor with 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 these arrangements in similar situations without a super visor’s approval. (Page 17) 5. Define a career goal for yourself. What experiences and personal qualities do you need to cultivate to succeed in your goal? Answer : Student answers will vary.

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    15 Chapter Two Tourism I. Learning Outcomes After reading and studying this chapter, the students should be able to do the following:  Explain the nature of tourism in 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 promote tourism.  Compare and contrast the major types of travel.  Describe the sociocultural impact of tourism and changing concepts in the industry. II. Lecture Concepts Learning Outcome 1 Explain the nature of tourism in today’s world.  Historically, it is difficult to trace when tourism actually began as centuries ago few people traveled for business and pleasure in the same way we do today.  Populations have been traveling for thousands of years for either commerce or pleasure. Today, changes in the industry continue as technology brings about new methods of travel including the railroads, automobiles, and airplanes.  Tourism is a dynamic, evolving, consumer-driven force, which is also the world’s largest industry if you include all the interrelated components under one umbrella.  The travel and tourism umbrella includes the following industries: travel; lodging, conventions, expositions, meetings, and events; restaurants and managed services and recreation.  The United Nations World Tourism Organization (UNWTO) is vested by the United Nations with a role of promoting tourism around the globe.  The UN WTO defines tourism as “ Tourism comprises the activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, busi ness, and other purposes.”

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    16  Tourism is sometimes categorized by the following factors: o Geography o Ownership o Function o Industry o Motive  The UNWTO supports sustainable tourism (also referred to as ecotourism) is responsible tourism.  Sustainable tourism is defi ned as “responsible travel to natural areas that conserves 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) encourages governments, in partnership with the private sector, local authorities, and nongovernmental organizations, to play a vital role in tourism. The UNWTO helps countries throughout the world to maximize the positive impacts of tourism, while minimizing 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 and visit attractions. Each segment is, to an extent, dependent on the others for business. (Page 29) PowerPoint Chapter 2 Slides 4 – 14 Classroom Activities Using resources found in the text and online, research a country that is considered a main travel destination for someone interested in sustainable tourism. Why did you choose this destination? What are some of the impacts that tourism to this destination may have on the local culture (consider economic, environmental, and/or cultural). Share your findings with the class.

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    17 Learning Outcome 2 Describe the economic impact of tourism.  Tourism provides many benefits and is one of the world’s most important sources for employment. It stimulates investment in the infrastructure, which helps to improve the living conditions of both local people and tourists.  As the world’s largest industry, tourism provides the following global prospects: o The opening of borders between nations o An increase in both disposable income and vacations (leisure travel) o Reasonably priced airfares o An increase in the number of people with more time and money o More people with the urge to travel  Tourism and travel generate, directly and indirectly, 10 percent of the global gross domestic product (GDP), investment, and employment. The industry is forecast to continue growing over the next decade.  Based on available data, it is projected that the top tourist arrival destinations 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 for students who will be graduating from hospitality management programs.  Due to the interdependency of the industry, this appears to also be a fairly stable industry.  Tourism has been growing at around 3.1 percent a year, faster than the wider economy.  Leisure travelers generate the most spending.  Tourists bring new money into local economies, which has an impact beyond their initial spending. The money is recycled through the economy to purchase more goods and is spent by employees locally. This is known as the Multiplier Effect. PowerPoint Chapter Slides 15 – 17 Learning Outcome 3 Compare the different methods of tourist travel. Travel by Air  Air travel can make travel easier and more convenient and allows access to remote 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 fill their rooms or book their services and also rely on these travelers to help with their profits.

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    18  Many U.S. airlines have formed partnerships in order to increase access to areas not serviced by their airline.  The hub-and-spoke system allows passengers to travel from one smaller city to 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: o More cities can be serviced by the airlines. o Airlines can maximize passenger loads from smaller cities and reduce fuel costs. Classroom Activity Visit several of the different travel sites found online and get prices for a round-trip airline ticket between two cities within the United States using the following parameters:  More than 60 days out  30 – 59 days out  15 – 29 days out  7 – 14 days out  Next day Compare 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 of the cities. Discuss the differences you found in prices and reflect on why domestic travel may or may not be different than foreign travel. Travel by Rail  Rail travel played a major role in influencing the building of towns and cities during the height of the locomotive age.  Rail travel was a major force in the development of hotels near rail depots and helped opening up the American West.  Another factor that led to the development of railroads within the United States was 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 was affordable 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 to some extent) and bus 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-speed networks are well developed. o The Eurostar connects Great Britain to mainland Europe. o France uses TGV trains that serve over 150 cities in France and travel at speeds of 200 mph. o Japan has the bullet train system, which services Tokyo and Osaka in 3 hours and 10 minutes, covering 550 miles.

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    19  Another popular option for many in Europe is the Eurail pass, which allows visitors to purchase a pass for first class rail service among several European countries for one lump sum. o The Eurail pass is only sold outside of Europe. o Similar passes can also be found in Australia, India, Canada, and China.  Maglev trains, currently being built in Shanghai, may represent the future of rail travel, reaching speeds of over 300 mph, and are propelled by magnetic forces. Classroom Activity Research the Maglev train and discuss the economic feasibility of building these types of systems. What are the potential benefits of this type of train travel? What are the potential limitations or drawbacks? Explain your rationale. Travel by Car  The internal combustion engine was invented in Germany but quickly became an American obsession.  For traveling short and medium distances, the car is still one of the most convenient forms of transportation. It is not uncommon for an American driver 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: o Easy accessibility to areas that otherwise could not be reached, i.e., mountain resorts, ski lodges, remote beaches, etc. o Travel by car is generally economical, even with rising gas prices.  In the Americas there are two primary automobile associations, which set industry standards, lobby political parties to enforce stricter safety laws, and provide many roadside services for members. The two associations in North America are: o American Automobile Association (AAA) in the United States o Canadian Automobile Association (CAA) in Canada  The rental car industry also plays a major role in ground travel with over 5,000 rental car companies operating in the United States.  The four largest rental car companies are: o Hertz o Avis o National o Budget  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 of profit for the rental car companies.

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    20 Classroom Activity Research the programs and special offers that one of the major rental car companies offer to:  Corporate accounts  Leisure travelers  Insurance companies (if this data is available) Explore any frequent traveler programs they may offer and compare these special rates to those offered to corporate accounts. Include any promotions or tie-ins to hotel 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 the tour and charter bus segment. o Some bus companies also offer destination management, incentive programs, and meeting planning services.  The primary reasons travelers choose bus travel are convenience and economy.  Bus travel does not just cover charter and tours but also includes: o Local route service o Commuter services o Airport service o Urban and rapid transit  Gray Line is one of the oldest tour bus operations, having been founded in 1910. It is a franchise operation based in Colorado.  The company is known for its sightseeing services; however, they also offer package 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 easier ticketing and transportation access to destinations in other countries not offered by U.S. airlines. Airlines have access to other airlines ’ passengers, thus enabling them to be 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 another smaller city via a hub or even two hubs. Similarly, passengers may originate their travel from a small city and use a hub to reach connecting flights to destinations

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    21 throughout 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 maximize passenger 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 for short distances. Trains will get you there quickly in heavily packed areas. Airplanes will be the choice for long distances. (Page 33) PowerPoint Chapter 2 Slides 19 – 31 Learning Outcome 4 List the important international and domestic tourism organizations.  Tourism is an international ambassador that fosters goodwill and intercultural cooperation and understanding among people throughout the world.  Governments become involved in tourism decisions because tourism can also include travel across international borders and governments regulate the entrance and exit of all who enter their countries.  There are several international tourism organizations that play a major role in the development of travel and tourism including: o The United Nations World Tourism Organization (UNWTO)  The most widely recognized tourism organization on the planet  It is the sole organization to represent all national and official tourism interests of all its members. o The International Air Transportation Association (IATA)  The global organization that regulates almost all of the international airlines  The IATA is involved in maintaining the stability of rates and fares of the airlines. o The International Civil Aviation Organization  Coordinates all aspects of civil aviation and is closely involved in the formation of international standards and practices o The Pacific Area Travel Association (PATA)  Represents 34 countries in Asia and the Pacific o Other organizations that are involved in international tourism but have 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 groups and departments within the country that are involved with promoting tourism within the United States: o The National Tourism Organization  Advocates tourism development within worldwide countries o The Travel Industry of America (TIA)  The main body for promoting and developing tourism within the United States  The mission of the TIA is to benefit the entire U.S. travel industry by unifying its goals, coordinating private sector efforts, and promoting and encouraging travel. o State Offices of Tourism  These are offices tasked with developing and promoting tourism within each individual state. o City Level Offices of Tourism and Convention Centers  Many cities have created Convention and Visitors ’ Bureaus (CVBs) with the primary responsibility of attracting and retaining 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 easier ticketing and transportation access to destinations in other countries not offered by U.S. airlines. Airlines have access to other airlines ’ passengers, thus enabling them to be 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 to standardize air travel worldwide to make it easier and cost efficient for travelers. (Page 37) 3. How do convention and visitors’ bureaus function? Answer: CVBs act on behalf of the local city to attract tourism. Their main purpose is to use their funding (TOT taxes) to find and retain tourists — to spend money. (Page 37) PowerPoint Chapter 2 Slides 32 – 36 Classroom Activities Research the role of the convention and visitors’ bureau in your town. If your town does not have a CVB, research what organization in your town is responsible for

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    23 promoting tourism. Compare the role of the local CVB to the state office of tourism. What responsibilities are similar? What responsibilities are different? What do you think happens to offices of tourism during difficult economic times? Explain. Learning Outcome 5 Compare the major promoters of tourism and describe how they promote tourism.  Promoters of tourism can take many forms ranging from national organizations to independent travel agencies. Some of the main promoters of tourism are: o Tour Operators  A tour operator is a professional manager/escort who takes a group of people on an organized tour following a planned itinerary.  Tours may be conducted locally, such as a walking tour of area architecture or may include a safari or tour of major European cities (for example).  The National Tour Association is the leading business for professionals serving the tourist industry. o Travel Agencies  A travel agent acts as the travel counselor and sells on behalf of airlines, 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, vacation packages, and more.  The American Society of Travel Agents (ASTA) has over 20,000 members in more than 165 countries.  The number of bookings made through travel agents has substantially decreased over the last decade as the rise in online bookings for all types of travel has increased. o Travel Corporations  American Express (AMEX) is a corporation that also has a worldwide travel services division.  The majority of AMEX Travel Services revenue is generated by business travel on corporate accounts.  Business contracts are set up individually based on annual travel expenses. o Corporate Travel Manager  The corporate travel manager works within a large corporation to arrange travel for those who need it.  Often, a bid process is used to find the best rates for the services needed by the company. o Travel and Tour Wholesalers

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    24  This form of travel promotion gained prominence in the 1960s when airlines had empty seats and wanted to sell them. They worked with wholesalers who would buy blocks of seats and create tours around these destinations. These packages were then sold to travelers.  There are three key types of tour wholesalers: independent, airlines working with tour wholesaler, and retail travel agents developing packages on their own. o Certified Travel Counselor (CTC)  This is a professional designation awarded to those who have passed an industry examination (administered by the ICTA) and who have 5 years of full-time experience in a travel agency or in the marketing and promotion of travel. o National Offices of Tourism (NOT)  These organizations seek to improve the economy of the country they represent by increasing the number of visitors to the country. o Destination Management Companies (DMCs)  This is a service organization that provides a wide range of programs and services to meet a client needs.  DMCs work closely with hotels; sometimes the DMCs also book rooms or work with the hotel on organizing theme parties or other special events.  A DMC does everything from greeting guests at the airport to providing transportation to the hotel, organizing events and more, 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 professional tour manager/escort, following a planned itinerary. Vacation packages include a combination of two or more travel services: hotel, car rental, and air transportation, offered at a package price. (Page s 38 – 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 tour industry such as air, cruis e lines, hotels , and auto rental companies. Due to the increasing number of online bookings for all types of travel and hotel accommodations, bookings have decreased substantially in the last 20 years. The travel agent adjusts by charging the traveler a fe e for its services. (Page 39)

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    25 PowerPoint Chapter 2 Slides 37 – 40 Classroom Activities Invite a local travel agent or manager from a destination management company to speak to the class regarding the changing demands of the industry. Learning Outcome 6 Compare 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: o Longer life spans o Flexible working hours o Early retirements o Greater ease of travel o Tendency to take shorter, more frequent trips o Increase in the standard of living  Business travel has declined in recent years. Businesses are cutting back on their business trips, yet business travelers are the most frequent guests of mid- to high-priced hotels and resorts.  More business travelers are making their own travel arrangements, and this is 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 online bookings, travel is becoming more of a “ keyboard ” activity rather than booking through 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 people travel? Answer: For pleasure; about 79% For business (Pages 41 – 44)

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    26 PowerPoint Chapter 2 Slides 41 – 43 Learning Outcome 7 Describe the sociocultural impact of tourism and changing concepts in the industry.  From a social and cultural perspective, tourism can leave both positive and negative impacts on communities.  Undoubtedly, tourism has made significant contributions to international understanding.  World tourism organizations recognize that tourism is a means of enhancing international understanding, peace, prosperity, and universal respect for, and observance of, human rights and fundamental freedom for all without distinction as to race, sex, language, or religion.  Seeing how others live is an interest of many tourists, and the exchange of sociocultural values and activities is rewarding.  The competitiveness of international destinations is based on such attributes as 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 a destination for international tourism.  Sustainable tourism is also changing the landscape: o Sustainable tourism includes infrastructure (roads, water, sewage, communications, and stores). o Superstructure is the facilities built to accommodate tourists, such as airports, cruise line terminals, convention centers, hotels, and restaurants. o Ecotourism is “ responsible tourism. ” o “Environmentally responsible travel and visitation to relatively undisturbed natural areas, that promotes conservation, has low negative visitor impact, and provides beneficially active socioeconomic involvement of local popula tions.”  Cultural tourism is defined as tourist visits “motivated wholly or in part by interest in the historical, artistic, scientific, or lifestyle/ heritage offerings of a community, region, group, or institution. ” 3. What are the reasons for the increase in travel? Answer: Longer life spans Flexible working hours Early retirements Greater ease of travel Tendency to take shorter, more frequent trips Increase in the standard of living (Page s 41 – 42)

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    27  Tourism enhances the arts and crafts of a destination by providing new markets for artisans, often reviving a fading art or craft and fostering the development of traditional forms.  Tourism that respects natural and built environments, in short, the heritage of the people and place, is called heritage tourism. PowerPoint Chapter 2 Slides 44 – 46 Additional Topics Trends  There are several trends that can be noted within the travel and tourism industry. Some of these are: o The number of tourist arrivals will increase by about 4% per year. o Chinese market will continue to rise. o Millennials are looking for adventure. o Ecotourism will increase in importance. o Green tourism will also increase. o Governments will recognize the importance of tourism. o Marketing partnerships and corporate alliances will continue to increase. o Employment prospects will continue to improve. o More environmentally friendly vehicles will be introduced along with more 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 and sociocultural. Sustainable tourism includes infrastructure (roads, water, sewag e, communications, and stores). Its purpose is to improve and sustain the tourism industry in a specific area. (Page 44) 2. Define ecotourism. Answer: Ecotourism is “ responsible tourism. ” “Environmentally responsible travel and visitation to relatively undisturbed natural areas, that promotes conservation, has low negative visitor impact, and provides beneficially active socioeconomic involvement of local populations . ” (Page 44) 3. Apart from creating an ambience in the hotels, what purpose does the dis play of local arts and crafts achieve? Answer: Provides a new market for local artisans, often reviving the fading art and craft market, increasing local employment, and supporting infrastructure (and taxes). (Page 47)

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    28 o GPS systems are becoming more standard in the industry. o Rental companies are making it easier to bypass check-ins and using self-service kiosks for speedier and 24/7 rentals. o Tourism partnerships are developing, such as Greyhound’s Meet and Greet with cruise ships. o Website group specials are increasing cost-effective travel methods. o Green Initiatives are becoming more important to reduce global emissions. o Global athletics are drivers of tourism. o Culinary tourism is becoming more prominent. III. Key Terms American Society of Travel Agents (ASTA) Business travelers Carbon footprint Certified Travel Counselor (CTC) Computer Reservation Systems (CRS) Convention and Visitors ’ Bureaus (CVBs) Corporate Travel Manager Cost per available seat mile (CASM) Cultural tourism Ecosystems Ecotourism Ecotourists Environmental tourism Ethical travel Geotourism Green initiatives Green tourism Heritage tourism Hub-and-spoke system Infrastructure Institute of certified Travel Agents (ICTA) Interdependency International Air Transportation Association (IATA) International Civil Aviation Organization (ICAO) Leisure travelers Multiplier effect National Tourism Organization (NTO) Nature tourism Organization for Economic Cooperation and Development (OECD) Pacifica Area Travel Association (PATA) Pleasure travel Responsible tourism Superstructure Sustainable tourism

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