TRAVEL & TOURISM INDUSTRY STRUCTURES :TRAVEL & TOURISM INDUSTRY STRUCTURES BTEC National Travel & Tourism


THE TRAVEL & TOURISM INDUSTRY :THE TRAVEL & TOURISM INDUSTRY Travel and tourism is one of the world’s largest industries. It is also one of the most fragmented. The two aspects of the industry can be viewed separately, as many of the players are involved in both Let’s look at each part of the industry on its own.


TRAVEL INDUSTRY :TRAVEL INDUSTRY


DISTRIBUTORS :DISTRIBUTORS


DISTRIBUTORS :DISTRIBUTORS The people, groups or firms that deliver the products and services of travel to consumers. These include: travel agents (business and leisure) travel operators selling direct to the consumer firms selling on the Internet call centres handling customer service


REGULATORY BODIES :REGULATORY BODIES


REGULATORY BODIES :REGULATORY BODIES Organisations set up to oversee the industry, either: Trade associations such as ABTA (Association of British Travel Agents) or Statutory bodies such as the CAA (Civil Aviation Authority)


PUBLIC SECTOR ORGANISATIONS :PUBLIC SECTOR ORGANISATIONS


PUBLIC SECTOR ORGANISATIONS :PUBLIC SECTOR ORGANISATIONS Government departments with responsibility for the industry: Department for Transport (DfT) Department for Culture, Media & Sport (DCMS) Foreign and Commonwealth Office (FCO)


TRANSPORT :TRANSPORT


TRANSPORT :TRANSPORT Delivery of travel products and services by: Road Air Sea Rail


OTHER INDUSTRY PLAYERS :OTHER INDUSTRY PLAYERS


OTHER INDUSTRY PLAYERS :OTHER INDUSTRY PLAYERS Insurance firms and car hire companies: Insurers provide cover for goods, services and people Car hire providers meeting onward travel needs of business and leisure customers


TOURISM INDUSTRY :TOURISM INDUSTRY


ACCOMMODATION, TOUR OPERATORS & DISTRIBUTORS :ACCOMMODATION, TOUR OPERATORS & DISTRIBUTORS Providing the ‘nuts and bolts’ of the industry: Hotels, villas, apartments, B&B, camping parks Packages of travel tours to popular locations Selling the travel product/service to individual and business consumers


TOUR OPERATORS :TOUR OPERATORS Four dominant firms TUI (Thomson) First Choice MyTravel Thomas Cook All vertically integrated, operating at more than one level in market


TOUR DISTRIBUTORS :TOUR DISTRIBUTORS Usually includes business and leisure travel agents: Some large and well-known Some small and independent Others in niche parts of market Can you think of examples of each?


TOURISM AGENCIES :TOURISM AGENCIES Tourist boards and offices: Promoting Britain to overseas customers (Visit Britain) Promoting regions of the UK to overseas and domestic customers (Visit Northumbria) Providing information to customers (Tourist Information Centres)


CONFERENCE/EXHIBITION ORGANISERS :CONFERENCE/EXHIBITION ORGANISERS The importance of location Value and service at venues The role of sponsorship Customer care


REGULATORY BODIES :REGULATORY BODIES Consortium of Independent Tour Operators Federation of Tour Operators People1st (Skills Council for Tourism, Hospitality and Leisure) Regional Development Agencies (RDAs)


PUBLIC SECTOR ORGANISATIONS :PUBLIC SECTOR ORGANISATIONS DCMS Visit Britain Regional Development Agencies FCO English Heritage


OTHER INDUSTRY PLAYERS :OTHER INDUSTRY PLAYERS The Tourism Alliance represents industry views to the government Other firms in industry, such as insurance companies and car hire firms


FINANCIAL SYSTEMS IN TRAVEL AND TOURISM :FINANCIAL SYSTEMS IN TRAVEL AND TOURISM


Slide 24:As with any business, those organisations in the travel and tourism industry need to manage their finances in order to: Receive payments Make payments Record financial activities Keep systems secure Handle currency conversions Make tax returns


IMPACT ON BUSINESS :IMPACT ON BUSINESS Some of these systems have a direct impact on the activities of the organisation, for example, in currency conversions: Ensuring that foreign currency payments and receipts are effectively managed Keeping up-to-date with exchange rate movements Anticipating demand for travel products and services based on exchange rate movements


EXCHANGE RATE MOVEMENTS :EXCHANGE RATE MOVEMENTS Tour operators and travel agencies have experienced the effects of exchange rate movements in recent years in the following ways: The fall in value of the US $ compared to UK £ This has meant that a holiday or air ticket priced in US $ is less expensive today than a year ago If UK travellers want to visit the USA, they will have to use fewer UK £s to pay for a travel product or service that’s priced in US $ The Activity associated with this lesson contains more for you to do on this point


POLITICAL CHANGES :POLITICAL CHANGES Large-scale political changes also have an impact on travel and tourism organisations’ financial systems:   Enlargement of the European Union in 2004 from 15 to 25 members Causes demand for travel to these new member states to rise


POLITICAL CHANGES :POLITICAL CHANGES Travel organisations may have targeted some of these new EU destinations For example, low-costs airlines have opened new routes to cities in the new member states But changes to the tax systems in some of these new EU states may have a negative impact on demand and supply of travel products and services


HR REQUIREMENTS FOR EMERGING TRAVEL INDUSTRY :HR REQUIREMENTS FOR EMERGING TRAVEL INDUSTRY Specialized professionals in the fields of incoming, domestic and outgoing tourism. Challenges on industry professionals: innovating traditional business structures, achieving higher quality standards and delivering solutions for diversified product demands. Crucial skills will be a strong and creative exposure to customer service, a high degree of destination knowledge, product innovation and organization skills according to international standards. Travel professionals will have to be able to realize and adjust to frequent new trends and changes more than anywhere else in the world. The most critical professional profile in the tourism industry in the coming years are related to business and sales development (direct, retail and online). As new niche markets are evolving (MICE, cruises, etc.), specialized travel professionals need to be qualified in time.


SPECIFIC HR ISSUES IN TRAVEL INDUSTRY 1 - RETENTION :SPECIFIC HR ISSUES IN TRAVEL INDUSTRY 1 - RETENTION Travel industry = People’s business Fierce competition for qualified travel professionals Compensation, benefits & incentives Perspectives for professional advancement and the future of the company as a whole


SPECIFIC HR ISSUES IN TRAVEL INDUSTRY 2 - DEVELOPMENT :SPECIFIC HR ISSUES IN TRAVEL INDUSTRY 2 - DEVELOPMENT Commitment through monetary benefits as an essential prerequisite Training (language, management & IT skills) Improvements on destination knowledge: - familiarization trips within China and abroad - training in TUI DMCs overseas Personal career planning Partnerships with universities to affect the development of travel professionals as early as possible Team building


Slide 32:TRAVEL & HOSPITALITY IS DEPENDENT ON THESE 4 FACTORS


Slide 33:FLOW CHART OF BOOKINGS