Travel and Tourism Development 1 Study Guide PDF

Diploma in Travel and Tourism
Travel and Tourism Development 1
TTD110
Study Guide
Table of Contents
STUDY UNIT 1: INTRODUCTION TO TOURISM ............................................................... 3
1.1 Introduction .............................................................................................................. 3
1.2 Basic Definitions of tourism ...................................................................................... 3
1.3 Interrelationships- Tourism, leisure and recreation ................................................... 5
1.4 Defining Tourists ...................................................................................................... 5
1.5 Significance of tourism ............................................................................................. 6
1.6 Measuring tourism flows .......................................................................................... 6
1.7 Tourist data problems .............................................................................................. 7
1.8 The nature of tourism ............................................................................................... 7
1.9 The tourism system.................................................................................................. 8
1.10 Conclusion ............................................................................................................... 9
1.11 Assessment and activities ...................................................................................... 10
STUDY UNIT 2: THE GEOGRAPHY OF TOURISM ......................................................... 11

2.1 Introduction ............................................................................................................ 11
2.2 The relationship between tourism and geography .................................................. 12
2.3 Core tourism resources and attractions.................................................................. 12
2.4 Examples of core tourism resources and attractor types ........................................ 14
2.5 South Africa’s core tourist attractions and their linkages to tourist flows ................. 14
2.6 How international tourists organise their travel to South Africa ............................... 16
2.7 Conclusion ............................................................................................................. 17
References ....................................................................................................................... 18
STUDY UNIT 3: MANAGING VISITOR ATTRACTIONS ................................................... 19

3.1 Introduction ............................................................................................................ 19
3.2 Defining and categorizing visitor attractions ........................................................... 20
3.3 The role of visitor attractions in the tourism industry............................................... 21
3.4 The management of visitor attractions ................................................................... 22
3.5 Future issues for attractions managers .................................................................. 23
3.6 Summary of the study unit ..................................................................................... 23
References ....................................................................................................................... 24
STUDY UNIT 4: MANAGING TRANSPORT FOR TOURISTS .......................................... 25

4.1 Introduction ............................................................................................................ 25
i
4.2 Modes of Transport ................................................................................................ 26
4.3 Demand for Tourist Transport ................................................................................ 26
4.4 Air transport ........................................................................................................... 26
4.5 Road Transport ...................................................................................................... 29
4.6 Rail Transport ........................................................................................................ 30
4.7 Water Transport ..................................................................................................... 30
4.8 Transport infrastructure .......................................................................................... 31
4.10 Self-assessment and reflection .............................................................................. 32
References ....................................................................................................................... 32
STUDY UNIT 5: MANAGING ACCOMMODATION FOR TOURISTS ............................... 33

5.1 Introduction ............................................................................................................ 33
5.2 The nature of tourist accommodation ..................................................................... 34
5.3 The emergence of the modern ‘no-frills’ product .................................................... 35
5.4 Accommodation Demand ....................................................................................... 35
5.5 Quality and Grading ............................................................................................... 36
References ....................................................................................................................... 39
STUDY UNIT 6: MANAGING TOURISM DISTRIBUTION ................................................. 40

6.1 Introduction ............................................................................................................ 40
6.2 What are Distribution Channels?............................................................................ 41
6.3 Intermediaries in Tourism....................................................................................... 41
6.4 Integration in the tourism industry .......................................................................... 42
6.5 The role and function of tour operators .................................................................. 43
6.6 The role of travel agents ........................................................................................ 44
6.7 The impact of ICT on tourism distribution ............................................................... 45
References ....................................................................................................................... 48
STUDY UNIT 7: THE GOVERNMENT AND TOURISM .................................................... 49
ii
7.1 Introduction ............................................................................................................ 49
7.2 The unique nature of the tourism industry .............................................................. 50
7.3 Tourism public policy framework ............................................................................ 50
7.4 Government involvement in tourism management ................................................. 50
7.5 Government tourism organizations ........................................................................ 51
7.6 Government tourism agencies in South Africa ....................................................... 53
7.7 Destination Marketing Organisations ..................................................................... 54
References ....................................................................................................................... 56
STUDY UNIT 8: TOURISM PLANNING ............................................................................ 58

8.1 Introduction ............................................................................................................ 58
8.2 The importance of tourism planning for a tourism organisation .............................. 58
Our Purpose ..................................................................................................................... 61
8.3 The consequences of unplanned developments in tourism .................................... 63
References ....................................................................................................................... 75
STUDY UNIT 8: MANAGING FINANCE FOR TOURISM .................................................. 77

8.1 Introduction ............................................................................................................ 77
8.2 Financial Planning and budgeting .......................................................................... 78
8.3 Budgeting .............................................................................................................. 78
8.4 Budgetary control ................................................................................................... 79
8.5 Financial ‘Building Blocks’ ...................................................................................... 80
8.6 The importance of cost classification for tourism businesses ................................. 82
8.7 Financial planning .................................................................................................. 82
8.8 Break Even Point (BEP) ......................................................................................... 82
The equation method: Sales/Total revenue = variable costs + fixed costs + net profit ... 83
8.9 Decision making using financial information ........................................................... 83
8.11 Self-assessment and activities ............................................................................... 84
iii
Reference ......................................................................................................................... 84
STUDY UNIT 9: MANAGING THE SOCIO-CULTURAL, ENVIRONMENTAL &

ECONOMIC ..................................................................................................................... 85
9.1 Introduction ............................................................................................................ 85
9.2 The economic impact on tourism ........................................................................... 86
9.3 Measuring the economic impacts on tourism ......................................................... 86
9.4 Calculating the economic impact............................................................................ 87
9.5 The socio-cultural impacts on tourism .................................................................... 88
9.6 The socio-cultural impact of travel on tourists ........................................................ 89
9.7 The environmental impact of tourism ..................................................................... 90
9.8 Managing the environmental impact of tourism ...................................................... 90
References ....................................................................................................................... 92
STUDY UNIT 10: MANAGING TOURISM RESPONSIBLY ............................................... 93

10.1 Introduction ............................................................................................................ 93
10.2 What is meant by managing tourism responsibly? ................................................. 94
10.3 Reasons for managing tourism responsibly............................................................ 94
10.4 The benefits of managing tourism responsibly ....................................................... 94
10.5 Initiatives to promote RTM ..................................................................................... 95
10.6 How to manage tourism responsibly ...................................................................... 96
References ....................................................................................................................... 97
STUDY UNIT 11: THE FUTURE OF TOURISM AND TOURISM TRENDS ...................... 98
11.1 Introduction ............................................................................................................ 98
11.2 Growth of tourism................................................................................................... 98
11.3 Regional travel patterns and trends ....................................................................... 99
11.4 External factors that affect or shape tourism ........................................................ 100
11.5 Tourism Market Trends ........................................................................................ 100
11.6 New Tourism trends ............................................................................................. 101
11.7 Summary of the study unit ................................................................................... 101
iv
References ..................................................................................................................... 102
v
MODULE INFORMATION
Name of programme Diploma in Travel & Tourism
NQF Level 5
Name of module Travel and Tourism Development 1
Credits 20
Module purpose The objective of this course is to ensure that students

understand the purpose and importance of Tourism
Development. The students will be able to analyse tourism as
a system and provide accurate and reliable research
information. Students will be able to distinguish the main
indicators of demand and provide ways in which Tourism and
the environment can work hand in hand. With knowledge
acquired from this module, students will be able to help
improve the livelihood and quality of people living at tourism
destinations. The student will be exposed to the environment,
culture and social issues, which are becoming increasingly
significant in the world of tourism.
Learning Outcomes: At the end of this module learners should be able to

Outline the dimensions of tourism.
• Know the tourism system
• Outline the key concepts in tourism demand
• Identify important motivators in tourism demand
• Identify and understand the critical factors in the growth
of tourism Identify statistics on global tourism trends.
• Identify and list the different types of tourism
development found within the tourism sector Know the
role of transport in destination development
• Identify types of infrastructure and services outlining
the development of tourism at a destination.
• Identify the different types of resources in tourism.
• Identify the function levels in the distribution system.
• Identify the different business forms of tourism
enterprises.
Travel and Tourism Development 1 Study Guide 2019 1

• Know the importance of environmental quality in the
success of tourism development.
• Identify and discuss the positive and negative
environmental impacts of tourism.
Prescribed textbooks and George. R. 2015. Managing Tourism in South Africa. Oxford
other sources
Icons
Think Point
Vocabulary
Self – Check Activity
Case Study
Reading in Prescribed Books
Additional Information
Study Group Discussion
Bright Ideas
2 Travel and Tourism Development 1 Study Guide 2019

STUDY UNIT 1: INTRODUCTION TO TOURISM
1.1 Introduction
1.2 Basic Definitions of tourism
1.2.1 Supply side definition
1.2.2 Demand side definition
1.3 Interrelationships- Tourism, leisure and recreation
1.4 Defining Tourists
1.5 Significance of tourism
1.6 Measuring tourism flows
1.7 Tourist data problems
1.8 The nature of tourism
1.9 The tourism system
1.1 Introduction
Tourism is a global phenomenon and it is indeed the world’s largest and fastest growing
industry. Tourism has major economic, socio-cultural and environmental impacts. It is also a
complex phenomenon which needs to be clearly examined in order to understand its
components. This chapter aims to give the learner a better understanding of the tourism
industry.
Upon successful completion of this unit, students are expected to:
• Define tourism from both supply and demand side

perspectives Define a tourist
• Explain the interrelationships of tourism leisure and
recreation
• Discuss the nature of tourism
• Identify the problems with tourism data
• Explain the significance of tourism
• Explain the tourism system
1.2 Basic Definitions of tourism

Although the term tourism is common, very few people actually understand what is meant by
this term. Even scholars have for years struggled to come to up with a single definition of the

term. To this end we will have a look at some of the more accepted definitions of tourism from
both the demand and supply side.
1.2.1 Demand-side definition:
The UN-WTO describes tourism as: The activities of persons travelling to, and staying in,
places outside their usual environment for not more than one consecutive year for leisure,
business and other purposes not related to the exercise of an activity remunerated from within
the place visited.
The UNWTO has recently further refined the demand-side definition of tourism by highlighting
that ‘tourism is a social, cultural and economic phenomenon which entails the movement of
people to countries or places outside their usual environment for personal or
business/professional purposes. The people are called visitors (which may be either tourists
or excursionists; residents or non-residents) and tourism has to do with their activities, some
of which imply tourism expenditure.
The UNWTO’s definition suggests that tourism is about:
• The movement of people

• Two key elements: the journey to and the stay at the destination
• Activities taking place outside the usual environment
• Movement to destinations which is short-term and temporary
• Movement of people to destinations for purposes other than taking up permanent
residence or employment
It is generally accepted that there are four main categories which constitute the main tourism
as an activity:
• Categories-type of tourism (eg, leisure, business etc)

• Time-duration of visit
• Distance-from actual home to destinations
• Purpose-reason for visit
This definition has however been criticised due to the fact that terms visitors and usual
environment are subjective and ambiguous. Secondly, the residents are more problematic
when a subnational level is in place. This is because separating visitors to a region who have
their place of usual residence within a region from those who come from other regions or
countries is even more ambiguous.
1.2.2 Supply-side definitions:

From the supply side perspective, it is almost impossible to put one definition forward that
would meet all the needs as the scope of tourism suppliers are so varied. Indeed it has been
suggested by many that tourism cannot be seen as an industry.
1.3 Interrelationships- Tourism, leisure and recreation
These terms at first glance may seem closely related to each other. They are in fact. Leisure
can be defined as free time available to the individual when the disciplines of work, sleep and
other basic needs have been met. Recreation on the other hand can be seen as the activities
that happen during leisure time or any pursuit taken up during leisure time other than those to
which people have high commitments. Tourism is more often than not one of these
recreational activities that take place during leisure time. It actually involves visiting for at least
one night for leisure and holiday, business, professional or other tourism purposes (For
example: going on holiday). It is difficult to put a boundary between recreation and tourism. In
actual fact the boundary is not clear, as both activities often share the same environments
and facilities and compete for space. Leisure, recreation and tourism are overlapping concepts
so should be viewed as part of wider concept of leisure.
1.4 Defining Tourists
The UN-WTO defines a tourist as a person who visits a country other than that in which he/she
usually resides for a period of at least 24 hours, and whose purpose may be classified under
one of the following three groups:
• Leisure and holidays

• Other tourism purposes- including studying, health purposes, religious purpose, etc.
• Business and professional
A more comprehensive definition of a tourist from the UNWTO is that it is a person taking a
tourism trip to a main destination outside his or her usual environment, for less than a year for
any main purpose (business, leisure, or other purposes) other than to be employed by a
resident entity in the country or places visited (UNWTO, 2012).
Tourists may further be divided into the following categories.
• Domestic- residents of a country travelling with their country

• International- travel to a country other than that in which they have their usual
residence normally it is travelling across continents.
• Outbound- residents travelling to another country

• Inbound- involving non-residents traveling in the given country
1.5 Significance of tourism
Tourism is regarded as an important or vital source of income for many regions and countries,
and therefore it is of global significance. It contributes to the economic development of many
nations through tourism income. In 2015, international tourist arrival increased by 4.4 % to
reach a total of 1184 million (UNWTO, 2015). In 1950, 25 million people travelled
internationally and by 2012, over 1 billion people travelled between countries and this
represents approximately 2000% growth.
According to the UNWTO, international tourist arrivals worldwide are expected to increase by
3.3% per annum from 2010 to 2030 to reach 1.8 billion by 2030. The total contribution of
Travel & Tourism to GDP was USD7, 170.3bn (9.8% of GDP) in 2015 and it directly supported
107,833,000 jobs (3.6% of total employment) according to Travel & Tourism Economic Impact
report (2016).
Page (2009) explains the significant role of tourism globally:
• Tourism is a discretionary activity

• Tourism is of growing economic significance globally
• Technology, such as the internet, has made researching and booking for holidays and
travel-related products easy
• Global travel is becoming more accessible for all classes of people in the developed
world
In South Africa, tourism is one of the key drivers of the economy, supporting over 1.2 million
jobs or approximately 8% of total employment and generating over 100 billion every year. In
2013, international tourism contributed (directly) R143.5 billion to South Africa’s gross
domestic product (GDP) (SA Tourism, 2014:1). It is well poised to overtake mining as number
1 contributor to the economy. In 2016, the total contribution of travel and tourism to the gross
domestic product (GDP) of South Africa was R402bn (9.3% of GDP). Is also expected to
grow by 2.5% to R412.2bn (9.4% of GDP) in 2017 (World Travel and Tourism Council, 2016).
1.6 Measuring tourism flows
Tourism is essentially a series of flows or movements. It is vitally important for any country
interested in growing its tourism industry to be able to measure these flows to gain information

about the people who visits that country and the reasons why they visit. This is information is
essential for tourism development process as it guides a country on areas which needs some
attention. It enables a country to focus on developing important infrastructure as well as
providing the necessary amenities required for the success of tourism industry.
1.7 Tourist data problems
Inbound tourist arrivals need to be treated with certain scepticism, especially if they are being
used to track historical trends. In recent years the UNWTO tried to standardise definitions and
data collection methodologies. However, a margin of error of results from inconsistences from
country to country in the collection and reporting of international tourists’ arrivals, expenditure
and other tourism related data.
As such, the UNWTO often adjusts country level and aggregate arrival data from year to year
to curb this problem. For instance, according to SA Tourism stats, 99% of tourist arrivals from
Lesotho were for holiday, with only 2% visiting for business purposes and other purposes.
Lesotho has a population of about 1.9 million, yet in 2013 South Africa hosted more than 1.6
million of the so-called holiday makers. This anomaly appears when 100 people from Lesotho
travel over South Africa’s borders 100 times to buy produce will then be counted as 10 000
tourism arrivals.
In addition, many tourists that visit the country are in transit and use it as a hub to travel to
other southern African destinations like Zimbabwe, Namibia or Botswana where they will be
recorded as tourists to SA yet the bulk of tourism expenditure incurred in the final destinations
visited.
Data related problems are more apparent in domestic tourism statistics because domestic
tourism movements are difficult to monitor in most countries, mainly because most domestic
tourists visit friends and relatives (VFR), hence it becomes difficult to gather information as
there are no formal receipts gathered from those visiting friends and relatives.
1.8 The nature of tourism
Tourism is a multi-sectorial, multi-faceted business and encompasses many different sectors

of the economy. Tourism also has some distinctive characteristics which makes it different
from other products, these characteristics include intangibility – it is not a product, and as a
result it cannot be touched but can only be just experienced; heterogeneity – each customer
experiences a service in a different way; inseparability – it cannot be taken home like a

production and consumption can be done at the same time; perishability – once the
opportunity of selling a service at a certain point has forgone, it cannot be resold at a later
point in time. On top of these characteristics, the tourism industry displays the following
features:
• Complexity- destination comprises many different companies and organisations.

• Fragmentation and diversity- a number of activities contribute to form the tourism
industry
• Volatility- tourism demand is not constant can easily change due to prevailing
situations.
• High fixed costs- cost that do not change with production for example rentals, salaries
etc
• Vulnerability-it is easily affected by changes in the environment.
Illustrating the complexity and multi-disciplinary nature of tourism is the Tourism Clock which
states that tourism can be studied from the following approaches:
• Sociology
• Economics
• Psychology
• Anthropology
• Political science
• Geography
• Agriculture and ecology
• Education
• Parks and recreation
• Urban and regional planning
• Business and marketing
• Law and
• Transportation
1.9 The tourism system
A system is defined as a group of interrelated, independent and interacting elements that

together form a single functional structure. The tourism system identifies tourism as being
made up of six elements namely; generating, transit and destination regions, tourists, the

tourism industry and the environment. These are embedded with a modifying external
environment that includes political, social, physical and other systems. The tourism system
thus, consists of several interrelated parts working together to achieve common purposes. It
depends on other parts to work; the whole system can be affected if one system is not properly
functioning. The parts are dynamic-they change all the time. Basically the following are the
parts of the tourism system:
1- Tourists
2. Traveler-generating regions
3. Tourist-destination regions;
4. Transit route regions
5. Tourism industries - range of businesses and organizations involved in delivering the
tourism product.
6. The social, technological, legal, ecological context in which the system is embedded. It
can be diagrammatically illustrated as below:
Figure 1.1: The tourism system
Source Leiper, N 1979- The framework of tourism. Annals of tourism Research, Vol 6(4) 390-
407.
1.10 Conclusion
The chapter provides an overview of the tourism industry. Tourism was clearly defined and
students were also introduced to the problems of tourism data as well as the significance of

tourism to developing nations. The chapter concludes by highlighting the tourism system and
explain the parts of the systems are interrelated. Students can now proceed to the next unit.
1.11 Assessment and activities
Group work
In groups of students are required to explain the global significance of tourism and also explain
the significance of tourism to the South African economy (15)
1. It is sometimes difficult to get accurate tourism data for development purposes. Justify
this statement by explaining the possible problems associated with tourism data (6)
2. Identify the features of tourism which makes it multi-sectorial, and multi-faceted
business (8)
3. Draw your own tourism system adding as much detail as you can think of. Ask you
lecturer for his/her opinion about your system. (15)
4. Define the term tourist and identify the four categories in which tourists can be further
subdivided into (10)
5. Explain why it is difficult to distinguish these three terms; leisure and recreation (6)
References
Baud-Bovy, M. 2002. Tourism and recreation handbook of planning and design. Oxford:
Architectural Press
George. R. 2015. Managing Tourism in South Africa. Oxford
Hall, C. M., Page, S. 2006. The geography of tourism and recreation: environment, place and
space. London; New York: Routledge
Page, S. (2009). Tourism management. Managing for Change. 3rd ed. Oxford:
ButterworthHeinemann/Elsevier.
https://www.statista.com/statistics/209334/total-number-of-international-tourist-arrivals/ (Date
of access: 2 November, 2017) https://www.wttc.org/-
/media/files/reports/economic%20impact%20research/regions%202016/world2016 (Date of
access: 2 November, 2017)

STUDY UNIT 2: THE GEOGRAPHY OF TOURISM
2.1 Introduction
2.2 The relationship between tourism and geography
2.2.1 The tourism system and its geographic components
2.3 Core tourism resources and attractions
2.3.1 Natural tourist attractions
2.3.2 Socio-cultural attraction
2.3.3 Human-made attractions
2.4 Examples of core tourism resources and attractor types
2.5 South Africa’s core tourist attractions and their linkages to tourist flows
2.5.1 International tourists and South African tourist attractions
2.6 How international tourists organise their travel to South Africa
2.6.1 International tourist spending in South Africa
2.6.2 Profile of South Africa’s domestic tourism market
2.6.3 Destination regions of South Africa’s domestic tourists
2.7 Conclusion
2.1 Introduction
Considering the definitions of tourism provided in Unit 1, it becomes clear that tourism involves
the movement of people from one area to another for different activities. Tourism is dependent
upon social, cultural and natural environment which is geography. This then implies that there
is a close link between tourism and geography thus cannot be isolated. In this Unit, the
relationship between the two will be further we explored.
Upon successful completion of this unit, students are expected to:
• Explain the relationship between tourism and geography

• Understand the role of core tourism resources and attractions
• Provide an overview of the geography of core tourism resources and attractions
in South Africa
• Understand current trends in tourist flows of international, regional and domestic
tourism markets

• Understand the link between the geography of a destination region and different
types of tourists
2.2 The relationship between tourism and geography
Geographers are interested in the processes that create and shape all the places that people
live. We might think of this as the mapping of the location of a number of places a tourist might
find interesting and the things they would like to see and explore. The more recently
introduced concept of Geotourism encompasses both cultural and environmental concerns
regarding travel as well as the local impact tourism has upon the communities and their
individual economics and lifestyles. Geotourism is all about conserving a destination’s
geographical character (including natural and human attributes that makes one place different
form another). The next subsection will clearly show that tourism is essentially a geographical
activity.
2.2.1 The tourism system and its geographic components
People travel because they want to experience geographic difference. As discussed in Unit 1,
tourism has three main geographical components highlighted in the tourism system model.
The following geographical components are involved in the tourism system:
• Tourist-generating region-represents where trips begin and the type of tourists.

Generally represents the generating market for tourism
• Transit region-represents those places, routes and areas tourist pass through and
means of transport they use to travel to their destinations. Can also referred to as the
“intermediate zone”
• Tourist-destination region-represents the sharp end of tourism. Where visitors end
their travel experience.
2.3 Core tourism resources and attractions

The core resources and attractions that push tourist to visit a particular place can be linked to
the natural, human made and social cultural characteristics of the destination region. These
core tourism resources and attractions fall into one or more of the following categories:
• Natural
• Human-made

• Socio-cultural
More importantly, core recourses and attractions are the main reasons why people choose to
change their geography and travel to different parts. These categories are explained below;
2.3.1 Natural tourist attractions
These attractions relate to the Physical geography of an area. This implies that tourists travel
to experience different climatic conditions, to experience different landscape (typography,
water mases), and flora and fauna offered by different areas (Ritchie & Chrouch 2003:112).
Being the case, tourism can have both negative and positive impacts on the physical
geography of an area.
2.3.2 Socio-cultural attraction
These attractions play a central role in the attractiveness of any destination. They are very
powerful and important dimensions of destination attractiveness. It has been argued that
social and cultural characteristics of an area were historically the key reasons why people
became tourists in the first place. The elements of social- socio-cultural attractiveness are
diverse and include the following;
• Handicrafts
• Differences in language
• Regional traditions
• Gastronomy or style of food
• Art and music
• History
• Methods of work and technology
• Architecture
• Religion
• Visiting friends and relatives
• Education
• Leisure activities
2.3.3 Human-made attractions
Numerous attractions owe their fame and fortune to the man-made environment (built
attraction). They have been made to overcome the limitation of physical geography. Examples
of this can be seen at places such as Paris, China and the United States. South Africa to, has
great examples of human made attractions such as the Big-Hole in Kimberly and Sun-City.

Casinos, conferences and mega events are also examples of man-made attractions. These
are important to any destination so as to boost its tourism income.
2.4 Examples of core tourism resources and attractor types
According to Ritchie and Crouch (2013: 111-115) there are a number of core resources and
attractors which include a range of natural, human-made and socio-cultural attractions which
are as follows:
• The physical geography of the destination, most particularly the landscapes, scenery,
and climate. In effect, it is the visual and sensual pleasure derived from these elements
that provides some of the most fundamental enjoyments of tourism.
• Aspects of the human geography that are characteristics of the destination, such as
elements related to the culture and history of a destination, provide much of the
intellectual satisfaction that arises from visiting a particular place.
• The scope of special events presented in a destination area creates much of the
dynamics and uniqueness that make a destination more memorable.
• Fundamental to a destination’s success is its infrastructure, such as hotels,
restaurants, museums, and those services that tourists require when travelling to and
around it
• The types of entertainment found at a destination are frequently designed to
complement the different activities and events that a destination offers. Conversely, for
other destinations the strength of the entertainment maybe itself be the primary appeal,
like Disneyland
• The strength of the market ties frequently serves as a major catalyst for destination
visitation that involves human relations
• The blend of different activities available at a destination provides the primary
foundation both the physical and emotional stimulation that excites and challenges the
visitor.
2.5 South Africa’s core tourist attractions and their linkages to

tourist flows
South Africa is fortunate in having an abundance of natural and socio-cultural tourist attractors.
The strength of South Africa as destination lies in the variety of attractions it offers, the
excellent climate, different cultural practices and social practices, a rich history and a range
of unique political features.

It is important to remember that as far as tourist attractors are concerned, different aspects of
SA tourism geography are utilised and experienced by different market segments in different
ways, especially the fact that natural, socio-cultural or human-made attractors have everything
to do with where their home base is.
There are clear links between the geography of the tourist-generating region, the geography
of the transit region, and the geography of tourism destination area. For example, natural
attractions are only of major importance to international tourist while they are of less
significance to the locals.
2.5.1 International tourists and South African tourist attractions
Since the fall of apartheid South Africa has seen an explosion in tourists wanting to visit the
country for various reasons. Figure 3.1 (Chapter 3 of Managing tourism South Africa) shows
us where these visitors originate. There are two groups of international tourist who visit South
Africa. The leisure and recreation market overwhelmingly come from Europe and the United
States where as our business tourists originate more from other parts of Africa.
A total of 10 044 163 international tourists arrived in South Africa in 2016, 12,8% more than
in 2015. The United Kingdom remained the leading source market for overseas arrivals to
South Africa in 2016 (447 840 arrivals) followed by the USA (345 013) and Germany (311
832).
However, from African markets, the bulk of tourists’ arrivals in South Africa came from
intraregional tourists, which are tourists from the SADC region, with the highest number of
tourist coming from Zimbabwe (2 028 881) followed by Lesotho (1 757 058) and Mozambique
(1 268 258). Key overseas markets remained the UK, Germany and the USA.
African markets remain the main source of tourist arrivals to the country, with total Africa main
land markets (Africa air and land) contributing almost 75% to the total arrivals in 2016.
The remaining 25% of South Africa’s International tourist markets are from long-haul
destinations, with the majority from these overseas markets travelling from Europe (60%),
North America (16%) and Asia (13%) in 2016 SAT (2016).
In terms of overseas markets, the following factors are still giving South Africa a competitive
advantage.
• The attractions are centred on unique natural and social features

• The distance, which is referred to as long haul mean tourist spend will be high as they
spend more time in South Africa

• It is marketed as a significant beach resort destination
• Domestic travel which has vastly improved also gives an added advantage to tourists
wishing to travel in between provinces
2.6 How international tourists organise their travel to South Africa
Most people who visit South Africa do so independently. In other words they travel around
without much assistance. Some who travel from Europe or the United States may opt for the
assistance of a tour operator or other forms of help.
Specifically travellers from China, Japan, and France use tour groups, reflecting that travellers
from these countries are not yet that familiar with our country and language barrier also
prevent them from engaging in independent travel (most of these countries are nonEnglish
speaking countries) Travellers from other African countries on the other had done so
completely without help and are called fully independent travellers (FITs).
2.6.1 International tourist spending in South Africa
In South Africa, during the first months of 2016, a R39.3 billion in foreign direct spend was
achieved. Domestic tourist spend R124, 7 billion of total tourism in 2013, while international
visitors contributed 43% which R94, 2 billion. The total spend by African visitors was estimated
47.2 billion (SA Tourism, 2014). This figure could be compared to nearly 23.8 billion
contributed to the tourist economy by air markets. Despite a higher average spend by
international tourists; the African counties still represents five of the most significant source
markets.
2.6.2 Profile of South Africa’s domestic tourism market
Since the demise of Apartheid the South African tourism market has experienced a massive
growth spurt. This is largely due to greater access that the general South African population
has gained to their attractions since the1980’s. The expansion of Black domestic tourism has
contributed greatly to the size of our tourism market. The total domestic tourism spend in 2013
was around R124, 7 billion. However, there was a decline in domestic tourism over the past
two years, with the total number of day trips decreasing from 44,3 million in 2015 to 39,4
million in 2016. Overnight trips decreased from 45,4 million in 2015 to 43,0 million in 2016
(www.tourism.gov.za)
2.6.2 Travel categories of domestic tourists in South Africa

In South Africa the domestic market is dominated by the VFR segment. This is mainly due to
many South African living and working in major centres like Johannesburg and then returning
to rural areas over work-leave periods to where their families still live. Nearly two thirds of all
domestic trips happen for this reason.
Only 16% of domestic trips happen for holiday purposes. Business travel is the third largest
reason.
Some of the most important reasons for domestic trips are for social reason, shopping,
nightlife, and water-based activities. The attractions that South Africans tend to visit tend to
differ from those visited by international visitors.
2.6.3 Destination regions of South Africa’s domestic tourists
The most significant inter-provincial flow happens between Gauteng and KwaZulu-Natal, and
Mpumalanga. Three provinces namely KwaZulu-Natal, Gauteng and the Eastern Cape
account for 64% of all trips and also account for 60% of the destinations for domestic trips.
The Western Cape which is ranked first in terms of destinations for international visitors is
only ranked fourth for domestic trips.
2.7 Conclusion
It was explained in this chapter that, tourism and geography are closely linked and that tourism
is essentially a geographic phenomenon. Tourism core resources were identified and the role
they play in attracting tourists. South Africa’s core tourism attractions were discussed and how
they impact on tourism flows in South Africa. The chapter also looked at how international and
domestic visitors organize their travel to and around South Africa. . Students can now proceed
to the next unit.
Group work:
Work in groups and come up with as many reasons as possible as to why the Western Cape
ranks first as a destination for international visitors but only fourth for domestic travellers (10)
1 Identify as many human-made core tourism resources in South Africa. (15)

2 Identify as many reasons as possible as to why so many of our neighbours are visiting
South Africa.
3 Describe the link between tourism and geography in your own words. (10)
4 Discuss the factors which are giving south Africa a competitive advantage over other
African destinations (15)
Case Study
Read case study 3: Urban tourism in South Africa and answer the following questions
a) Develop a listing of the main urban tourism destinations in South Africa
b) What are the main geographical distinctions between urban and rural or
naturebased tourism?
c) How does the management of tourism in cities differ from that in rural areas?
References
Turner, R & Freiermuth, E. 2017 travel & tourism economic impact 2017 South Africa.
https://www.wttc.org/-/media/files/reports/economic-impact-research/countries-
2017/southafrica2017.pdfhttps://www.gov.za/speeches/international-tourist-arrivals-20-feb-
2017-0000 http://www.statssa.gov.za/publications/Report-03-51-02/Report-03-51-022015.pdf

STUDY UNIT 3: MANAGING VISITOR ATTRACTIONS
3.1 Introduction
3.2 Defining and categorizing visitor attractions
The role of visitor attractions in the tourism industry
3.3.1 Destination growth
3.3.2 Economic impact of visitor attractions
3.3.3 Visitor attractions and the Product area life-cycle
3.4 The management of visitor attractions
3.5 Future issues for attractions managers
3.6 Summary of the study unit
3.1 Introduction
Visitor attractions form one of the main reasons for travelling. As stated by Boniface and
Cooper (2001: 30) ‘attractions are the reasons for existence of tourism; they generate the visit,
give rise to excursion circuits and create an industry of their own’. They play a crucial role in
the development and success of tourism destinations. This poses certain developmental and
managerial issues for any one hoping to create and maintain a successful attraction. In this
chapter we have explained how these visitor attractions should be managed for the perpetual
succession of the tourism industry.
Upon successful completion of this study unit, students are expected to be able to:
• Define visitor attractions

• Understand the role of visitor attractions in the tourism industry
• Apply the concept of the product life-cycle to the management of visitor attractions
• Identify the main issues in managing visitor attractions
• Identify future issues that may impact on visitor attraction management

3.2 Defining and categorizing visitor attractions
A visitor attraction can simply be defined as the primary motivation for tourists to visit a
destination. Another definition of an attraction could be: a designated resource which is
controlled and managed for the enjoyment, amusement, entertainment and education of the
visiting public. In South Africa, we have many well recognised attractions worldwide (Table
mountain, Robben Island Museum, Kruger National Park and many others) which can be used
to attract visitors to the country.
Visitor attractions display the following common features:
• They are managed specifically with the aim of attracting visitors and may or may not
charge a fee.
• They provide the necessary facilities to ensure that the needs and interest of the
visitors are catered for.
• They provide an environment in which people can spend their leisure time and aim to
provide a pleasurable experience.
• They are specifically designed to achieve the above goals.
Visitor attractions can be categorised into four main groups which are;
• Natural attractions- physical environment attractions for example, landscape, flora and
fauna, climate and many others. In South Africa we have so many natural attractions
(Horseshoe Falls in Mpumalanga, Table Mountain in Cape Town, The Kruger National
Park, etc.)
• Built attractions- human-made attractions and are not necessarily constructed for
tourism purposes for example the Union Buildings in Tshwane which are not open to
public and tourist, but are included on tours.
• Cultural attractions- they reflect a particular community. They include historical sites,
religious sites, arts and crafts, museums and galleries
• Social attractions-visitors have an opportunity to be part of the local population in a

specific community. For example farm stays.
More recently unusual tourists’ attractions have also been identified. For example a Mystery
Ghost bus tour in Johannesburg and a visit to the Big Pineapple in Bathurst Eastern Cape.

It is also important to note that these categories do sometimes overlap and it is not always a
simple matter to place an attraction in a box. The Vaal dam is an example. Is it a Natural or
built attraction? Study Table 4.2 in the prescribed text book to understanding more of the
categories of visitor attractions.
3.3 The role of visitor attractions in the tourism industry
As stated earlier, the visitor attraction provides the main reason for people to travel. Without
it there would hardly be a reason for hotels and airlines to exist. A visitor attraction for some
may be seen as a means to make a profit but for others it may be an excuse to conserve rare
or beautiful landscapes, animals or objects for example national parks. The role of visitor
attractions is discussed in the following sub-sections.
3.3.1 Destination Growth
Very often an attraction provides the impetus for further growth. Other businesses and
industries like accommodation and restaurants will often develop due to the presence of an
attraction. This expansion is over time shaped into a well-oiled machine that keeps visitors
satisfied and is called the destination mix or destination amalgam. An attraction may also be
used to create a node on which a destination can start adding more services and facilities and
even further attractions.
To do: List at least five natural attractions that may have been a catalyst for destination
growth.
3.3.2 Economic impact of visitor attractions
Visitor attractions impact heavily on the economies of destinations. They may provide jobs
(both direct and indirect), taxes for local and regional governments and income to local
businesses. They are also a source of foreign currency. Visitor attractions may also lead to
regional and urban development through the provision of new infrastructure which will also be
available for non-tourism uses.
3.3.3 Visitor attractions and the Product area life-cycle (PLC)
Like any other product, tourism products display a life-cycle. The PLC has also been adopted
and applied to visitor attractions and can then be used as a planning tool that can help
managers understand the change in management strategies needed as the attraction moves

through the life-cycle. The PLC is ‘S’ curved and displays the following stages as illustrated in
Figure 4.1:
• Introduction-The visitor’s attraction is new to the market and extensive marketing is

used to attract more visitors.
• Growth-at this stage there is a steady increase in the number of visitors and
competitors normally enter the market at this stage.
• Maturity-at this stage profits and visitor number may not increase and slow down.
Maintenance cost may increase at this stage as the attraction ages and may call for
some renovations.
• Decline-attractions sometimes reach a stage of low sales and low profits. At this stage
attractions can be upgraded and relaunched or closed.
Each stage poses different challenges to managers if they want to keep an attraction fresh
and fashionable. From Figure 4.1 in the textbook we can see that if managers do not adapt to
each stage the attraction will go into decline and eventually out of business.
3.4 The management of visitor attractions
Traditional marketing practice states that the product offering must match the benefits sought
by the consumer. It is the responsibility of the management to ensure that the visitor attraction
matches the benefits sought by the consumer. In order to achieve this, management has to
focus on some key areas which include:
• Marketing- implementation of effective marketing strategies is the key to the success

of all types of visitor attractions. Management has to know how to use all the
promotional tool available to them (see table 4.4 for a list of promotional tools available
to visitor attractions manger)
• Revenue and financial management-management of income and expenses is

essential for the success of an attraction. The income should be enough to cover the
cost even if the site is not-for-profit making. The manager should focus on budgeting,
information management, monitoring of the environment as well as control.
• Human resource management- management should focus on human resources

planning, recruitment and selection, induction and training of staff.

• Visitor management-the flow of visitors to the site must be controlled and ensuring that
ticket revenue is also managed.
• Operations management- involves day to day running of the site so the manager has
to possess communication skills, planning skills, crisis management skills as well as
the ability to perform quality control and quality improvement.
3.5 Future issues for attractions managers
A successful visitor attraction manager will need to always have an eye in the future as trends
are always changing due to the changes in the needs and wants of tourists.
As fashion changes, competitors enter the market, and visitors become more demanding,
therefore the attraction have to adapt to ensure they remain competitive. Dewhurst and
Dewhurst (2006: 293-294) identified the major factors that may affect attractions in the future.
These are:
• Changing visitor demand patterns
• Increase in competition
• Stakeholder expectations
• In this chapter we have defined and categorized visitor attractions
• We looked at the importance of the visitor attraction to the tourism industry.
• We discussed some of the economic impacts visitor attractions have
• Lastly we had a look at the management issues faced by attractions managers
In groups, list the most common and well known natural and cultural attractions in South
Africa. (10)

Answer the following questions to check whether you have achieved all the set
outcomes:
1 Draw the PLC and think of an example of an attraction for each stage (8)
2 A new visitor attraction has been launched and you asked to advise the manager the
promotional tools that he/she can use for marketing the attraction .Provide all the tools
that can be used and explain how they can be used for marketing (20)
3 What is the difference between social and cultural visitor attractions? (10)
4 Differentiate between natural and man-made events giving examples of each (10)
5 Discuss the future trends in visitor attraction management and how technology may
play a part in solving of the some of the current problems (15)
References
Boniface, P. and Cooper, C. 2001. Worldwide Destinations: The Geography of Travel and
Tourism, 3rd edition. Butterworth-Heinemann
Harcombe, DPT. 2009. The economic impacts of tourism

https://www.81.47.175.201/stodomingo/attachments/article/9/EconomicImpactsofTourism.ph
f
Weidenfeld, A & Leask, A. (2013). Exploring the relationship between visitor attractions and
events: definitions and management factors, Current Issues in Tourism, 16:6

STUDY UNIT 4: MANAGING TRANSPORT FOR TOURISTS
4.1 Introduction
4.2 Modes of Transport
4.3 Demand for Tourist Transport
4.4 Air transport
4.4.1 International airline alliances and competition
4.4.2 The Air Transport System
4.4.3 Transport services and types
4.5 Road Transport
4.6 Rail Transport
4.7 Water Transport
4.8 Transport infrastructure
4.1 Introduction
Transportation provides the tourism industry with one of its most important functions as it
establishes a means for people who want to change their geography to do so. Transport is
thus the backbone of tourism. Because of its importance to the tourism industry, it is vital for
anyone who wants to understand tourism to also understand transportation. In this chapter
we explore further the different types of transport available to tourists and also other issues
around transportation such as infrastructure.
Upon successful completion of this study unit, students are expected to be

able to:
• Explain the relationship between transport and the tourism system

• Understand the governance of transport in South Africa
• Understand the role of air-transportation in the tourism industry
• Understand the role of land transportation in the tourism industry
• Understand the role of water-borne transportation in the tourism industry
• Identify the main aspects of the transport infrastructure

4.2 Modes of Transport
The main modes of mechanical transport can be divided in to land, air and water. These modes
of transport can either be offered as complimentary to each other, (Inter-modal) or they can
be in competition with each other. In South Africa transportation infrastructure is regulated and
managed by the Department of Transport (DoT). These different modes of transport are
explained in the next sub-sections.
Examine Figure 5.1 to gain an understanding of the various agencies that make up the DoT.
4.3 Demand for Tourist Transport
In general, tourists will choose a mode of transport based on their purpose of travelling, but
there are other factors which also influences the choice of transport. Price/cost
• Speed/time
• Distance
• Comfort/luxury
• Status and prestige
• Safety
• Frequency and reliability of the service
• Perceptions of the quality of service delivery
• Convenience and accessibility of the service
• Range of services offered (including the terminal)
4.4 Air transport
In South Africa, air transport is governed by the South Africa Civil Aviation Authority (SACAA),
International Air Services Licensing Council (IASLC), Domestic Air Service Licensing Council
(DASLC), Airports Company of South Africa (ACSA) and Air Traffic and Navigation Services
(ATNS). Air transport is usually associated with speed and long distance travel. More than
half of all tourists in the world use air transport as the main means of transport (Zajac, 2016).

It is not always seen as an economical mode of transport but enjoys a competitive advantage
for specific distances depending on the ability of other modes of transport to compete with it
in terms of cost and quality.
The unique features of the air transport include:
• It frequently takes place across national borders and through sovereign airspace
• Safety is of paramount importance
• It has a great significance for a country’s international relations, political prestige and
even defence.
4.4.1 International airline alliances and competition
South African Airways (SAA) is South Africa’s national carrier and in 2006 it joined the Star
Alliance, making it the first African airline to do so. Internationally the airline industry is
dominated by three alliances: Sky Team, One World and Star Alliance. The aim of these
alliances is to provide worldwide coverage through connecting flights with a single ticket. They
also achieve economies of scale through joint purchases of services such as lounges and
check-inn facilities.
4.4.2 The Air Transport System
The SACAA which was established in 1998 plays an important role in the South African Air
transport system. It is responsible for promoting, regulating and enforcing civil aviation safety
and security. This term ‘air transport system’ encompasses all the subsystems needed to meet
the demand for air transport. These subsystems are:
• Aircraft
• Airports
• Air traffic control
• Route services.
These subsystems are interdependent, any problem or challenge in one system can affect the
performance of the whole system to provide satisfactory services.
4.4.3 Transport services and types
Worldwide the demand for air transport has grown for the following reasons:
• Economic growth and increase of wealth of individuals
• The growing importance of international travel

• Greater availability of leisure time
• Technological advances
In air transport we can distinguish between scheduled and non-scheduled services, charter
services, taxi services, helicopter services. Scheduled air transport services are the most
common and it is focused on the demand of the general public and they may be expensive in
terms of other services. Non- scheduled airline services are offered whenever the demand for
such a service is sufficient. Charter airlines fly on routes where they can operate high load
factors typically 85-90%.Taxi services refers to a private charter plane that usually carries
between 4 and 8 passengers. Helicopters normally used by business travellers and are most
ideal for sight-seeing.
Internationally airlines have obtained their five traffic rights, also called ‘The Freedom of the
air’. These are:
• The right of over flight
• The right of an airline to land in a foreign country for technical reasons
• The right of an airline to carry revenue earning traffic from a foreign country to its home
country
• The right of an airline to carry revenue earning traffic from its home country to a foreign
country.
• The right to carry revenue earning traffic between two foreign countries.
However, the operation of international scheduled airline services sometimes necessitates

supplementary rights for which the Two or Five Freedoms Agreements do not make
provisions.
These rights are agreed upon by the contracting states and are referred to as the sixth,
seventh and eighth freedoms. They entail the following:
• The sixth freedom which is the right by an airline to carry traffic to two other countries
using its base as the transit
• The seventh freedom is the right to carry traffic between different countries
• The eighth is the right of an airline to carry traffic between two points in a foreign
country, it is also known as cabotage, or domestic air routes in commercial terms.

The International Air Transport Association (IATA) and International Civil Aviation
Organisation (ICAO) are two of the major international organizations who regulate and enforce
international air transport.
Although air transport plays an important role in tourism, its operation is complex due to the
fact that nations control air space above their area. Thus, it is the duty of the airline to negotiate
for space through which they fly.
4.5 Road Transport
Road transport in South Africa is governed by South Africa National Roads Agency Limited
(SANRAL), Road Traffic Management Corporation (RTMC) and Urban Transport Fund (UTF).
Road transport is available option for tourists who travel shorter distances or when air
transport becomes impractical.
4.5.1 Car Transport
The car dominates road transportation in South Africa and is used by tourists. This is mostly
done by hiring a car from a car-hire company and most rental companies are found at
international airports and South Africa’s major cities. Many multi-national corporations have
set up offices throughout the country like Hertz and Avis. For domestic tourists the car is the
most frequently used mode of transport since public transport is limited at tourist destinations.
However, travelling on South Africa’s roads poses dangers due to the following factors:
• The number of accidents on the road increases during holiday seasons
• Many cars in South Africa are not roadworthy Many drivers tend not to obey the
rules of the road
4.5.2 Bus transport.
Public bus transport is subsidized by the DoT and this makes it a cheap and viable option for
both domestic and international tourists. South Africa’s major centres are well connected by
a number of coach companies like Greyhound and Translux to name but a few. The major
benefits of travelling by bus are:
• It is convenient as it offers door-to-door service
• Schedules and frequency of services are set
• Cost of travel is known before hand

• The trip offers scenic views
• Passengers can interact socially
• Positive physiological effects such as stress of driving are avoided
4.5.3 Taxi transport
In South Africa we distinguish between metered and un-metered taxis. Tourists tend to use
metered taxis. Un-metered taxis or the mini-bus taxi is however widely used by local residents
and regional and domestic travellers.
4.6 Rail Transport
Trains in South Africa are not widely used by tourists as they are seen as a second-rate form
of transportation. South Africa’s rail infrastructure and the train themselves are not seen as
competitive. There are however a few exceptions. The Gautrain, Blue Train and Rovos Rail
offer excellent services to potential travellers.
Spoornet runs most of the long distance passenger services in South Africa including
Shosholoza Meyl, its premier class and the Blue Train. South Africa also has a number of
tourist trains like the Outeniqua Choo-choo which cater specifically for the needs of tourists.
4.7 Water Transport
Water transport is governed by the National Ports Authority (NPA) and South African Maritime
Safety Authority (SAMSA). In South Africa our inland water courses are fairly small and ill-
suited to transport many tourists. For this reason the tourism industry focuses mainly on the
cruising market when it comes to satisfying tourists needs.
This has led to what is called ‘Transport as Tourism’ where the transportation mode becomes
the attraction. The leisure cruise market has seen a considerable growth in recent years both
domestically and internationally. Waterside development both along the coast and along our
inland water courses attracts huge investments every year.
4.7.1 Water transport as ‘transport as tourism’
Water transport is important; not as a means of transportation, but rather as a visitor but as a
visitor attraction. Examples are the cruises, like MSC Cruises which operate on the coast of
South Africa and also have trips to destinations like the Portuguese Islands.

Cruise line operating on international shores have been developed as ‘floating holiday resorts’
which are self-contained in terms of the various visitor attractions on board, therefore,
holistically cruise liners can be defined as ‘transport as tourism’.
The advantage that cruise tourism has is that it provides both accommodation and
transportation with excursions at different ports.
Other advantages include:
• The supporting infrastructure is free since ships are supported by the sea
• Entry into a country’s territorial waters is based on what is known the ‘the right of
innocent passage
• On the open sea, deviations on the course is possible
• Docking fees are relatively low when compared with air transport.
• Propulsion through water requires less power, hence less energy than on land
4.8 Transport infrastructure
The success of transport depends on the infrastructure available; therefore the development
of transport infrastructure should also be incorporated into tourism demands. Transport
infrastructure affects various factors within the broader tourism system, such as:
• Access flow
• Extent of trip-chaining
• Market from which the tourists are drawn
• Special needs of various categories of passengers
• Adequacy of available mode for connecting visitors to destinations.
The most important infrastructure developments that each mode of transport requires are as
follows:
Air transport- Requires airports and air traffic control.
Road and rail- requires road and rail networks and stations and terminuses.
Water- requires harbours.

• In this chapter we have explained that there are various forms of transport and learned
that without transport tourism is impossible.
• We have looked at the different modes of transport available to tourists and the role each
mode plays
• Lastly we examined the infrastructure requirements of each mode of transport.
Tourism is not possible without transport. Discuss this in groups and try to explain the
importance of transport in tourism (10)
4.10 Self-assessment and reflection
outcomes:
1 hat are some of the reasons in your opinion why South Africa’s rail networks are not
extensively used by international tourists? (10)
2 What is the role of IATA when it comes to international air transport? (10)
3 Which factors in influence the demand of transport (10)
4 Explain giving examples what your understanding of the term ‘transport as tourism’
(10)
5 Explain the ways of overcoming burdens posed by flying over different air spaces
(6)
References
Zajac,G 2016. The role of air transport in the development of international tourism. Journal of
International Trade, Logistics and Law, Vol. 2, Num. 1, 2016, 1-8
http://www.economicsdiscussion.net/articles/air-transport-advantages-
anddisadvantages/2179

STUDY UNIT 5: MANAGING ACCOMMODATION FOR
TOURISTS
5.1 Introduction
5.2 The nature of tourist accommodation
5.3 The emergence of the modern ‘no-frills’ product
5.4 Accommodation Demand
5.4.1 Nature of demand
5.4.2 Assessing demand when contemplating new development
5.5.1 Prices for Accommodation
5.5 Quality and Grading
5.1 Introduction
The accommodation sector of the tourism industry plays a vital role in satisfying tourist’s needs
and it the largest sub-sector of the tourism industry. Tourism involves the movement of people
from place to another and their travelling would be incomplete in absence of accommodation
((Cooper, Fletcher, Fyall, Gilbert & Wanhill 2008, 343). The accommodation sector also fulfils
a variety of other needs of tourists besides just providing a roof over their heads. In this chapter
we further explore the role of accommodation in the tourism industry and categorise them.
The chapter also explored the importance of providing a quality experience for the tourist.
Upon successful completion of this study unit, students are expected to be able
to:
• Understand and describe the nature, range and diversity of tourist

accommodation in South Africa
• Explain the nature of the ‘no-frills’ hotel product offering, why it evolved in
South Africa and its profound impact on the hotel industry
• Demonstrate an understanding of the nature of demand for tourist
accommodation and how it manifests in South Africa
• Explain how tourist accommodation is priced
• Discuss the importance of quality, standards and grading to the tourist
accommodation sector

• Explain the challenge of operating tourist accommodation
5.2 The nature of tourist accommodation
When one thinks of tourist accommodation one tends to think of the hotel. There is however,
a wide variety of accommodation available to tourists. According to Statistics South Africa,
accommodation can be categorized as:
• Hotels
• Caravan parks and camping sites
• Guesthouses and guest-farms
• Other accommodation
On the other hand the Tourism Grading Council of South Africa (TGCSA) identifies the
following as forms of accommodation:
• Hotel-provides accommodation to people travelling it has a reception and offers at least

a breakfast room or common eating area.
• Lodge- Located in natural surroundings, charges rates inclusive of all meals and the
experienced offered
• Guesthouse-an existing home or building designed specifically for commercial

enterprise to provide overnight accommodation with public areas for exclusive use of
guest
• Bed and breakfast-a private home where the owner/manager resided in the house, it
provides accommodation with or without en-suite bathroom and breakfast
• Self-catering-this can be a house, cottage, chalet or any form of accommodation and

facilities are provided for guest to cater for themselves
• Backpacker and hostelling- these can be dormitories for guest who are travelling.
• Caravan Park and camping sites-it provides bathing facilities and toilet and space for
guest to provide their own accommodation such as ten or caravan.
Neither of these two classifications is definitive and many other forms of accommodations are
available to the tourist.

5.3 The emergence of the modern ‘no-frills’ product
This type of accommodation emerged in the late 1980’s in response to examples set in the
U.S.A. and Europe. Basically this type of accommodation offers limited services as compared
to other accommodation facilities hence the term ‘no-frills’ product is used. Other services are
normally removed to keep the price low. The first of this kind in South Africa was established
in Randburg (the 123-room city lodge) in 1985. The budget hotel or limited service hotel has
been with us ever since. It offers guests no or very few services other than a place to sleep.
The motivation for this product came from:
• Market pressures
• Rising labour cost and union pressures
• Operational pressures
• Lower risk
• Financial pressures
This type of product requires a relatively small capital outlay and thus leads to a generous
return on investment for the developer.
5.4 Accommodation Demand
5.4.1 Nature of demand
The demand for hotel bedrooms stems from a widely distributed market, nationally and
internationally; whereas the market for the facilities hotel offers will often be generated locally.
Demand for any accommodation establishment is seasonal. Accommodation is usually not
the primary reason for travel and it is the job of the developer to come up with types of
accommodation that will add to the tourist experience. The demand for accommodation is
sometimes seasonal where the demand fluctuates due to the changes of the seasons. It is
curious to note that the person who ends up staying at the accommodation establishment may
not always be the decision maker when it comes to choosing the accommodation type. Think
of a business traveller who stays in a hotel appointed to them by the company they work for.
Or a tour group who stay at a hotel appointed by the tour organizer.

5.4.2 Assessing demand when contemplating new development
We cannot simply build a hotel because we feel like it. We have to establish whether there will
in fact be demand for the hotel we build. A feasibility study is required to establish the demand
and whether it is enough to generate profit. Financial institution normally requires evidence of
a feasibility study to finance such projects. Figure 6.3 shows the feasibility assessment
process. A market study is one of the fundamental steps in conducting a feasibility study.
The purpose of this market study is to assess:
• The expected level of demand
• The seasonality of demand
• The likely mix of demand
• A suitable standard and style of facilities An appropriate tariff structure
5.5.1 Prices for Accommodation
Accommodation products are highly perishable; implying that an unsold room is business lost
forever. It is thus vitally important for the potential developer and manager of accommodation
establishments to price the facilities correctly to draw the maximum number of visitors to keep
occupation rates as high as possible, thus balancing occupancy levels with room rates. We
have to keep in mind that most accommodation establishments have high fixed-costs and the
rate charged must be able to cover these costs. Most hotels thus employ several rate
structures. The implementation of flexible pricing structures is also called yield management
and complex software packages are now available to help monitor yield management in
hotels. Yield management often involves the setting and adjustment of rates that cater for
fluctuations in demand.
5.5 Quality and Grading
Providing good quality of service is often the only aspect that separates one hotel or
establishment from the other. New trends in tourism include a more discerning traveller who
is acutely aware of what they want from the travel experience and poor service is no longer
tolerated by these travellers. To this end providing quality service has been the focus of
mangers in the accommodation sector.

There are three main challenges in tourism which makes difficulty for managers of
accommodation establishments to effectively provide quality services are:
• It is difficult to know if the client is satisfied
• It is impossible to control quality before delivery of the service due to the inseparable
nature of tourism offerings
• Tourists are more experienced and have higher expectations of quality service.
5.5.1 Managing and measuring services
One method that has emerged as a valuable tool in managing service levels is Total Quality
management (TQM). It involves setting up quality standards and benchmarking in all aspects
of the business. It comprises six interrelated elements:
• The institution of recognition-and-reward systems
• The provision of appropriate, skills based education and training
• Effective communication with both guests and staff
• The incalculation of an attitude and commitment in which all staff and managers feel
they are on the same side.
• Documentation of systems and methods and processes Well defined and

communicated goals and targets.
Service quality in any organisation can be monitored using the following ways:
• Quest/customer satisfaction questionnaires
• Ad hoc surveys of customer’s perception
• The use of mystery guest who visits randomly and assess and record particular
aspects of service.
5.5.2 Grading Accommodation in South Africa
Grading of hotels and other accommodation establishments has long been used as a means
of setting standards for these establishments and serves as a useful guide to the tourists
themselves to choose accommodation. In South Africa this is done by the TGCSA. Grading
of establishments is based on a star grading system. 5-star being the highest award and one
star the lowest. The grading is only valid for a year and each establishment is re-assed once

a year. The stars refer to the level of service that can be expected and also the level of facilities
available at the establishment.
There are a number of reasons why an accommodation establishment would fail. The reasons
why some establishments fail are diverse and are not easy to identify. These reasons can be
broadly categorized as follows:
• Faulty product concept-
• Inappropriate financing
• Inept management
• Exogenous events
• Other.
• In this chapter we have explained what is meant by tourist accommodation and looked
at the various categories found.
• We examined the emergence of the no-frills product
• We examined further the concept of accommodation demand
• Lastly we had a look at the importance and role played by quality, standards and grading
in the accommodation sector.
Answer the following questions to check whether you have achieved all the set outcomes:
1 Outline the key characteristics of demand for accommodation (10) 2 What in your
view do the TGCSA use to grade accommodation establishments?
Provide examples. (10)
3 Define the various categories of accommodation found in South Africa (10)

4 What role does pricing play in the management of an accommodation
establishment? (8)
5 In your own words explain the feasibility assessment process. (10)
6 Explain how the ‘no frills’ accommodation product-offering developed in South

Africa (10)
References
Cooper, C., Fletcher, J., Fyall, A., Gilbert, D. & Wanhill Stephen. 2008. Tourism principle and
practice. 4th ed. Harlow, England: Prentice Hall.
www.google.co.za/search?q=no+frills+products+definition&rlz=1C1GGRV_enZA754ZA756&
oq=‘no-frills’+product&aqs=chrome.2.6 www.tourismgrading.co.za/get-graded/whats-in-it-for-
me/grading-criteria-3/ www.sa-venues.com/stargrading.htm

STUDY UNIT 6: MANAGING TOURISM DISTRIBUTION
6.1 Introduction
6.2 What are Distribution Channels?
6.3 Intermediaries in Tourism
6.4 Integration in the tourism industry
6.4.1 Horizontal Integration
6.4.2 Vertical Integration
6.5 The role and function of tour operators
6.6 The role of travel agents
6.7 The impact of ICT on tourism distribution
6.7.1 Global Distribution Systems
6.1 Introduction
The distribution of tourism offerings is unique in many respects. Generally distribution refers
to the way tourism products gets from the suppliers to the consumer. This poses some
interesting challenges to the tourism developer and marketer. In this chapter we explore the
issues surrounding tourism distribution.
Upon successful completion of this study unit, students are expected to be

able to:
• Explain the importance of intermediaries in the distribution of tourism offerings

• Define the nature and structure of intermediation in tourism
• Define the different types of distribution channels that are used for tourism
offerings
• Explain the role of travel agents as a component of the tourism industry
• Identify the functions of travel agents
• Define the role of tour operators
• Explain the function of a tour operator as a component of the tourism industry
• Illustrate the impact of information communication technology on tourism
distribution

6.2 What are Distribution Channels?
Definition: These are a set of Interdependent organizations involved in the process of making
a product or service available to the consumer. In tourism, “distribution channels are groups
of entities between tourism providers and the travellers which act as an intermediary within
the purchasing process” (Kracht and Wang, 2010:45).
The distribution channels used in the tourism industry are illustrated in Figure 7.1. It is clearly
shown that the distribution channels in the tourism industry starts from the principal which
might be a hotel, to the tour operator and from tour operator to the travel agent and final the
consumer. The simplest form of distribution is to sell directly to the consumer: a single level
or unbroken chain. This may be a hotel selling a room to the person who will stay in it. The
second form of distribution is indirect, with longer multi-level channels or broken chains.
Distribution plays an important link in the tourism system by linking tourism supply and
demand.
Tourism Distribution Channel levels
1. Principle
Consumer
Travel Agent
Tour Operator
2. Principle Consumer
3. Principle Travel Agent Consumer
Distribution channels vary according to the size and type of organisation using them. They
describe the system by which an offering or tourism product/service is distributed from the
provider to the consumers. The larger principals use several forms of distribution.
6.3 Intermediaries in Tourism
An intermediary refers to any dealer in the chain of distribution who acts as a link or middleman
between the tourism principle and the consumer. They are useful to both the organisation
and the consumer. The reason why tourism organisation use intermediaries when selling their
tourism offerings is that they offer the following benefits:
• Save costs- cutting cost of dealing directly with customers

• Retailing-it is difficulty for tourism business to have so many outlets’ throughout the
country
• Reduce risk-in terms of inventory for the principal (for example, providing of cars by
car rental companies)
To the consumer intermediaries offer the following benefits:
• Convenience- a third party with expertise will deal with the travel arrangements
• Provide specialist knowledge- they provide expert knowledge regarding the

product/service on offer
• Cost saving-minimising of holiday search cost through the use of intermediaries
• Greater choice-consumer can choose to use internet or intermediaries
• Consumer protection-certain right which are not afforded to the independent traveller
can be granted through the use of intermediaries
• Reduced risk- by receiving sufficient advice and recommendations from

intermediaries
Despite all the above-mentioned benefits they are however some disadvantages of using
intermediaries:
• control issues,
• commission payable,
• the fact that often intermediaries buy in bulk and the principle is then obliged to offer
discount that would otherwise not be the case
• Reduces the chance of the principal business to develop relationships with their
customers.
6.4 Integration in the tourism industry
Integration refers to formal linking arrangement between organizations and can take the form
of mergers, acquisitions, and takeovers. We can distinguish between horizontal integration,
where an element in the distribution chain integrates with another in the same level of the
distribution chain. Vertical integration happens when one element in the distribution chain
integrates with another from a different level in the distribution chain. We can further
distinguish between backwards and forwards vertical integration.

6.4.1 Horizontal Integration (see Figure 7.4)
This occurs when connections are made along the distribution chain, for example, two similar
organisations such as small tour operators that merge or are amalgamated, or when one is
taken over and absorbed by the other. It can also be defined as a strategy in which a firm
acquires similar firms to increase its market share and profits as well as gaining greater control
with an organisation’s own sector. It can also help in reducing operating costs.
6.4.2 Vertical Integration
This is the process whereby an organisation at one level of the distribution chain links with
one another at another level on the vertical axis. An example is when an airline acquires or
forms its own tour operations company. This type of integration can be forward integration or
backward integration.
Integration offers a number of advantages:
• It deters new entrants into the mass market
• It consolidates purchasing power
• It provides greater influence in the sale of package holiday products
• It allows for the possibility of instantly diversifying into emerging and profitable niche
markets
See Figure 7.5 which shows an example of integration in South African tourism industry
6.5 The role and function of tour operators
A tour operator is an individual or organization that arranges domestic, inbound and/or

outbound package tours. Their primary function is to assemble the elements of a holiday into
a single product (holiday package) and then selling it to the public either independently or
through an intermediary. They have played an import role in the growth of international tourism
over the last three decades.
A Holiday package can be divided according to:
• Type of accommodation
• Mode of transport
• International or domestic packages

• Distance (short haul or long haul) Length of holiday
• Destination type
A Tour operator may provide specialist services in so far as they cater for the domestic market,
incoming tourists or specialist tours.
Tour operators may offer the following types of tours:
• Escorted-where a tour guide accompanies the group throughout the tour
• Hosted-the tour manager oversees the all the arrangements of the group but the group
choose their own activities.
• Independent- tourists choose their own transport and activities
Tour operators rely on economies of scale created through bulk buying. This in turn allows
them to sell holidays at attractive prices. The Brochure is often the main marketing tool used
by tour operators. In order to sell the holiday these brochures need to look attractive and
contain the right information which includes:
• The name of the company responsible for the holiday
• Modes of transport used
• Full details of destination
• Duration of each tour
• Details of the price of each tour
• Full conditions of booking
• Details of any insurance coverage
• Details of travel documentation

Sales representatives may be employed to maintain and build their business through travel
agencies. They act as a point of contact between travel agents and tour operators
6.6 The role of travel agents
Travel agents are the retail arm of the tourism industry and offer a convenient sales outlet to
the consumer for their tourism shopping. They act as a source of information to tourists. As
the name agents suggests they do not own the products they sell but merely act as a middle
man between the principle and consumer. For their service to the principle they are paid a
commission. They may also charge a rate for services rendered.

Travel agents, amongst others, perform the following functions:
• Stocking a wide range of brochures
• Planning travel itineraries
• Making reservations
• Promoting merchandise in displays
Calculating tickets and fares
• Advising consumers
• Providing travel advise
• Complaints handling
• Communicating with consumers
• Transmitting tickets to consumers
There are different types of travel agencies:
• Generalists-selling a wide range of offerings or specialists-selling a particular type of

offering
• Multiples, miniples or independents
• Leisure/business
• E-travel agents
6.7 The impact of ICT on tourism distribution
The most alarming impact of ICT has been the disintermediation of travel intermediaries. This
has come about due to the spread and applications of the internet. This makes it unnecessary
for people to use traditional intermediaries such as travel agents thus threatening the
sustainability of traditional intermediaries. It therefore implies that travel agents have to
increase the value that they can offer to clients to keep businesses running. As Indicated by
Laverty (2014) to remain competitive and relevant in this Internet era travel agencies have to
make some adaptations. In a weird twist the same technology that has threatened to make
travel agents obsolete is also helping it to deliver a better service to its customers. Online
travel agents emerged to take advantage of the ICTs as early as 1995.

Information and communication technology also offers a number of functions to travel
intermediaries and consumers, including the following:
• Extranets (a computer that allows controlled access from outside of an organisation’s

intranet
• Office automation, reservation, accounting etc.
• Internal management tools such as management support systems
• Tailor made internal management applications
• e-Tickets
• Search engines, for example, TravelFusion
• Databases and knowledge management systems
• Networking and open distribution offering systems
• Wireless, mobile interactive digital television
Kiosks and touch screen terminals
Travel agencies also now use ICT extensively in their day to day operations, from office
automation to providing information to clients and booking and issuing tickets. All in all
information and communication technology makes the travel more efficient. ICT enhances
consumer satisfaction in several ways which are given below:
• More information and improved entertainment facilities (in-flight entertainment and

information channels
• Improved operational tasks (in-room checkout)
• Personalised services where telephone operators can acknowledge guests by their

names
• Better services as a result of better departmental functioning in companies.
6.7.1 Global Distribution Systems
Even though consumers find it easy to book for flights/ and or accommodation via the internet,
travel agents on the other hand have access to global distribution systems (GDSs) that give
them real time access to a vast range of travel products and services, including flights,
accommodation and car rental.

It is impossible for an end user customer to use the GDS even on the internet because it uses
highly sophisticated software to access and analyse all the all available flights that can be
used to build a specific itinerary to specified criteria, for example, by price, by routing or by
preferred airlines, which all can be done by the GDSs.
GDSs are quicker and easier to use than printed timetables and tariff guides, and are an
essential tool in marketing international tourism.
The GDSs have 3 main functions which are interrelated. These are:
• Information
• Reservation
• Sales
The three biggest global distribution systems are Amadeus, Sabre and Travelport. Most travel
agents in South Africa use Amadeus or Travelport (which is an amalgamation of Worldspan
and Galileo). Amadeus is the market leader in Europe, while Sabre is mostly used in USA and
Travelport leads the market in South America and Canada.
One main disadvantage of the global distribution systems in southern African tourism
organisations is that they operate in a monopolistic market, making it almost impossible for
these countries to develop their own systems. Another disadvantage is that the GDSs are
biased where certain airlines or principals have prioritised other organisations when
information is requested regardless of consumer requirements such as cheaper fares.
• In this chapter we have explained what tourism distribution means and how it happens.
• We have learned about intermediaries in tourism and we focused specifically on travel

agents and tour operators.
• We learned more about integration in tourism
• Lastly we had a look at the impact of ICT on the tourism industry

Name as many uses, current and future, of ICT in tourism as you can think of. (20)
outcomes:
1 State arguments for and against the total disintermediation of travel agents and discuss
this in class. (10)
2 Explain in detail the basic functions of a tour operator (10)
3 Discuss the various distribution channels options available to tourism principles and
state which you would use if ran your own tourism venture. (10) 4 Explain the various
forms of integration in your own words. (12)
5 Differentiate between one-level and two-level tourism distribution channels (4)
6 Should travel agents expand on the range of services they currently retail, if so, what
should they offer? (10)
7 What role do travel agents play in the tourism? (8)
References
Aramendia-Muneta, Ollo- Lopez, A. 2013. ICT impact on tourism industry. International
Journal of Management Cases. pp 87-99
Fountoulaki, P., Leue, M. C., and Jung, T. 2015. Distribution Channels for Travel and Tourism:
The Case of Crete, In Tussyadiah, I. and Inversini, A. (eds), Information and Communication
Technologies in Tourism, Springer International Publishing, Vienna, New
York, pp. 667-680 (ISBN: 978-3-319-14342-2) DOI: 10.1007/978-3-319-14343-9_48
Laverty, S. 2014. Impact of Technology on the Travel Agency Business, Houston Cronical.
http://smallbusiness.chron.com/impacttechnology-travel-agency-business- 57750.html
Walsall, M. 2014. The importance of brochure printing as a marketing tool.

www.b2bmarketing.net/en-gb/resources/blog/importance-brochure-printing-marketing-tool
http://www.tourismexportcouncil.org.nz/distribution-system/

STUDY UNIT 7: THE GOVERNMENT AND TOURISM
7.1 Introduction
7.2 The unique nature of the tourism industry
7.3 Tourism public policy framework
7.4 Government tourism organizations
7.4.1 The World Tourism Organisation
7.4.2 RETOSA
7.5 Government tourism agencies in South Africa
7.5.1 National tourism organizations
7.5.2 Provincial Tourism Authorities
7.5.3 Regional Tourism Organisations
7.5.4 Local Tourism Organisations (LTOs)
7.1 Introduction
The public sector plays a big role in tourism development. No developer can ignore the rules
and regulations set out by governments when planning a development. A conducive
environment for tourism growth is set by governments; they provide infrastructure and the
education required by tourism organisation. Thus the purpose of this chapter is to illustrate
the role that national, provincial and local governments play in the planning and managing of
tourism in a country.
Learning outcomes:
Upon successful completion of this study unit, students are expected to

be able to:
• Explain the role played by government in the planning and promotion of

tourism
• Explain what is meant by tourism public policy
• Illustrate the importance of government involved in all aspects of tourism
• Assess the roles of public sector tourism bodies at international level
• Detail the structure of public sector tourism in South Africa
• Identify and describe the functions of DMO’s in South Africa

7.2 The unique nature of the tourism industry
A number of features of the tourism industry that warrant government involvement can be
identified:
• Traditionally the tourism industry is dominated by SMMEs and relatively few large
multi-national corporations that have market presence
• The fragmented nature of the tourism industry
• Seasonality (variations in demand)
• The geographical spread of tourism
• Tourism is seen as a development tool
7.3 Tourism public policy framework
Public policy-making is the focal point of government activity. It has become an important part
of the system of many governments. Public policy in tourism is a function of three interrelated
issues:
• The intentions of political and other key sectors
• The way in which decisions and non-decisions are made
• The implications of these decisions
The World Travel &Tourism Council states that governments should:
• Show leadership and define management structures that drive new tourism
• Elevate tourism to strategic national level with senior policy making
• Factor tourism into all its policies and decision making
Policies exist at national, provincial and local level in South Africa.
7.4 Government involvement in tourism management
The role of local government is to promote the social, economic, environmental and cultural
well–being of their communities and their involvement in tourism must be related to that (Javier

&. Elazigue, 2011).Tourism as a business should be private sector driven and operated but
there are a number of reasons why governments should be involved in planning and
development, and promoting of tourism:
• Thousands of businesses depend on tourism
• Many core tourist attractions are public goods
• Many activities such as planning, research, transformation and regulation can only be
carried out effectively by government organizations
• The lack of marketing and human resources management expertise
• Social and political reasons need to be taken into account
• The private sector cannot do it alone
Government has six main functions in tourism:
• Coordinating
• Planning-infrastructure development, promotion and marketing of tourism services
• Legislation and regulation- policies and regulations specific to the sector as well as
environmental and conservation issues
• Stimulation-providing financial incentives to tourism players or principals to stimulate

tourism development.
• Promotion- through marketing and promotional campaigns
Also read the section on social tourism in the textbook
7.5 Government tourism organizations
International agencies
• The United Nations World Tourism Organisation: UN-WTO
7.4.1 The World Tourism Organisation
It is a specialised agency of the United Nations; and is the leading international tourism
organisations in the world. It serves as a global forum for tourism policy issues and as a
practical source of tourism know-how. It is responsible for collecting and collating statistical
information on international tourism.

The UNWTO’s programmes include:
1. Assisting member countries, tourist destinations, and businesses to maximise

the positive economic, social and cultural effects of tourism
2. Assisting in the tourism planning as an executing agency of the United

Nations Development (UNDP)
3. Advising on the harmonisation of policies and practices to improve tourism
4. Sponsoring education and training and identifying funding sources
5. Promoting the broader relationships of visitors to the physical and social

environment, by defining ‘sustainability as development which meets the
needs of the present while protecting and enhancing for the future’,
6. Encouraging the implementation of a Global Code of Ethics for Tourism for

the observance of human rights and fundamental freedoms.
• Organisation for Economic Cooperation and Development: OECD
It was founded in 1960 and it is an intergovernmental economic organisation with 35 member

countries, to stimulate economic progress and world trade. It raises awareness of international
issues and fosters international co-operation.
• World Travel & Tourism Council

It is a privately-sponsored group representing the interests of the world’s leading tourism
businesses. It was formed in 1988 and its aim is to maximise the benefits that tourism can
bring to global economy.
• International Air Transport Association: IATA. The aims of IATA are to:
1 ensure safe flying of its member’s aircraft around the globe
2 ensure that people, mail and freight also move around the globe efficiently
3 ticket cost controlling
4 work with governments to set global standards of safety and efficiency
Regional government agencies
• European Travel Commission: ETC- responsible for marketing Europe as a tourism

destination.
• Regional Tourism Organisation of Southern Africa: RETOSA

7.4.2 RETOSA
The 15 countries that make up SADC have come together to promote and develop the region’s
wonderfully diverse tourist attractions. The RETOSA is an association that involves national
tourism organisations, the private sector and local communities. Its objectives are to spread
the benefits of tourism across the region and to protect the region’s environment through
sustainable tourism. The association aims to forge close links with regional and international
airlines servicing the region, and to develop a regional brand.
While recognising that every different country has its own unique environment and culture to
promote, the organisation believes there is much to be gained from a cooperative approach.
In particular the creation of multi-country itineraries will be encouraged, thus proving an
exciting holiday package for the travellers Their marketing activities include:
• Attending travel fairs worldwide
• A travel industry strategy involving seminars, road shows, briefings, media tours
• Corporate promotions aimed at stimulating and attracting conference sports and

incentive business to the region
• Development of a tourism database that is accessible to anyone making enquiries
• Market research and consumer attitude surveys
• Intensive networking wit overseas marketing bodies
7.6 Government tourism agencies in South Africa
Refer to Figure 8.1 in textbook to gain an idea as to the structure of government in tourism in
South Africa. There are five types of government sector tourism agencies with interest in
destination tourism development and promotion in South Africa:
• The ministry of tourism- responsible for government policy and tourism development
• A national tourism organization-whose goal is to increase the number of international

tourist to South Africa
• Nine provincial tourism authorities-for the promotion of individual provinces
• Regional tourism organizations- for the promotion of regions
• Local tourism organizations-for management of services for visitors

Please note that the Department of Environmental affairs and tourism is no more. It is now
simply the Department of Tourism.
Supporting the Department of tourism is:
• Tourism and Hospitality, Education and Training Authority (THETA)
• Provincial Tourism Authorities (PTA)
• MIPTEC (inter provincial technical committee
• Minister and Members of Executive Council (MINMEC)
• The Tourism Grading Council of South Africa ( TGCSA) and
• South African Tourism (SAT)
Tourism is also supported by a small unit in the Department of Trade and Industry. The role
of this unit is to:
• Devise and implement a tourism sector development strategy
• Recruit local and foreign investment into the sector
• Increase exports in tourism
7.7 Destination Marketing Organisations
The promotion of tourism is carried out at national tourism organisation, provincial tourism
authority, regional tourism organization and local tourism organizational level. The term most
commonly used to encompass all these bodies is a Destination Marketing Organisation
(DMO).
Some of the roles of DMO include the following:
• Marketing
• Monitoring services and quality standards
• Coordinating of the tourism industry
• Enhancing community relations
7.5.1 National tourism organizations
The main function of a National Tourist Organisation (NTO) is to influence the perceptions of
a traveller or potential traveller to a country. Typically this is done through marketing efforts
overseas. The NTO for South Africa is South African Tourism- SAT. In the past their main

function as stated was to market South Africa overseas. In recent years this has shifted to
include domestic travellers as well and getting South Africans to explore their own country.
The marketing activities performed by the NTO include:
• Producing promotional material
• Participating in travel trade shows
• Organizing Public Relations events
• Educating the trade seminars, workshops and events in cooperation with tour
operators and partners such as SATOA
• Educating the trade
• Sponsoring events
They also conduct extensive marketing research activities.
7.5.2 Provincial Tourism Authorities (PTA)
As stated earlier there are nine provincial tourism authorities in South Africa. Their main
function is to market the province’s unique selling points and also align themselves with the
policies and frameworks set out by the Department of Tourism.
7.5.3 Regional Tourism Organisations (RTOs)
They are charged with promoting tourism to their respective regions. They are government
agencies and rely on funding from membership fees.
7.5.4 Local Tourism Organisations (LTOs) and Tourism Information Centres (TICs).
LTOs have the role of managing services for visitors through TICs. The TIC then provides a
contact point between LTOs and the visitor. They have the following functions:
• Promote the local tourism authority
• Distribute brochures
• Make bookings
• Provide information.
Generally they provide services to visitors by providing the information required for travel
planning.

• In this chapter we have explained what is meant by government involvement in tourism.
• We looked at government’s role in tourism.
• We looked at international and regional government tourism organizations
• We examined the structure and the role of different government departments and
agencies involved in tourism
• Lastly we had a look at the various government agencies charged with marketing South
African tourism locally and internationally
outcomes:
1 Explain the role of various global inter-governmental organisations such as RETOSA

and UN-WTO (10)
2 Graphically illustrate the structure of government involvement in tourism in
South Africa. 15)
3 Do you think IATA is an important body in tourism? Justify your answer by highlighting
the functions of this body (10)
4 Explain government’s role in national tourism (10)
5 In your view should governments’ involvement in tourism be increased or diminished.

Give reasons for your answer (10)
References
Javier,A.B & Elazigue D. B. 2011.Opportunities and Challenges in Tourism Development

Roles of Local Government Units in the Philippines. 3rd Annual Conference of the Academic
Network of Development Studies in Asia (ANDA)

Lenon,J.J. 2006. Benchmarking national tourism organisation and agencies: understanding
best practices. London: Elsevier.
www.e-unwto.org/toc/unwtotfb/current
https://certifiedexpert.retosa.co.za/en/page/about-us
www.ecgroup.com/documents/South%20Africa%20Master.pdf

STUDY UNIT 8: TOURISM PLANNING
8.1 Introduction
8.2 The importance of tourism planning for a tourism organisation
8.3 The consequences of unplanned developments in tourism
8.3.1 Physical consequences
8.3.2 Human consequences
8.3.3 Organisational consequences
8.1 Introduction
In the previous study unit you have learned that the government plays a huge role in
supporting and planning developments for tourism industry, in this study unit you will gain
insight on role of planning for a tourism business. In order for a tourism organisation to
remain competitive, it is essential that tourism managers plan the development of their
business ( Bennett, Jooste and Strydom 2005: 169).
This section will look at the benefits of planning for tourism as well as the consequences of
an development. It is important that you understand the role of planning and apply this to
practical scenarios. To evaluate whether you have achieved the learning outcomes,
complete the activities at the end of this study unit.
Learning outcomes:
Upon successful completion of this study unit, students are expected to be able to:
• Explain the importance of tourism planning for a tourism organisation
• Evaluate the consequences of planning on an unplanned development.
8.2 The importance of tourism planning for a tourism

organisation
Tourism managers are constantly making decisions to keep up with the changing tourism
environment (George 2015: . Planning, is therefore the first step in laying the foundation to

implement the decisions made as tourism managers decide what should be done. Ultimately,
planning provides a roadmap for all activities of an organisation.
Planning involves defining an organisations goals, establishing strategies for ahcieving this
goals and developing plans to implement the activities (Bennett,Jooste,Strydom 2005: 169).
There are a number of benefits that can be identified with planning for tourism businesses. It
is important to note that tourism organisations Chapter 10 (Managing tourism businesses) of
your textbook briefly highlights the importance of planning and these will be discussed in detail
herein. 8.2.1 Guides in the decision making process
A tourism business does not work in isolation and is confronted with many issues. If there is
a problem, a tourism manager first needs to plan. A skilled tourism manager will know what
they want to achieve in a given time frame. By planning, the decision making process is
more efficient because as a manager you will know how the decision will affect the plans in
the long term (Bennett,Jooste,Strydom 2005: 169).
8.2.2 Promotes future orientated approach
Direction means to give proper information and useful guidance to the people involved in
the tourism business. Direction and planning are interrelated. It is because planning tells us
what to do, how to do it and when to do it. Therefore, planning helps to give a right direction
to achieve success or overcome a problem. Planning forces tourism businesses to plan for
the future as it establishes long and short term business objectives.
8.2.3 Promotes co-operation and team-building
Planning is a holistic approach, just like how tourism is interrelated. Planning involved input
from top, middle and lower management (Refer to Levels of Management in Chapter 10).
Although a tourism manager ma kes a plan for different departments in an organisation, all
departments are working together to achieve the desired goal.
Top management should involve middle management in the planning process. For example,
if a hotel decides to open a new branch in an area and denys the other branch who requires
investment captial, it may please some employees or anger them. The conflict needs to be
managed, it cannot be avoided. The role of management is to put systems and procedures
in place to help managers resolve conflict which all requires planning
(Bennett,Jooste,Strydom 2005: 167).

When a plan is devised it is then communicated to employees. Employees will see how their
work contributes to the success of a business and take pride in their fulfilling their
responsibilities towards the plan. Planning thus ensures that employees trained to deliver
the tourism product to the customers.
This creates synergy which will lead to the plans success. More importantly, because of
proper planning potential conflict can be reduced because clear objectives and goals are
communicated to employees of the tourism business. It is said that a strong organisation is
more susceptible to change and implementation of plans.
More importantly, planning does not only deal with the business itself but also co-operation
of the local community. For example, if you own a hotel in a local area, you need to include
the local community in the development of your plans to encourage co-operation for the
success of the tourism organisation.
8.2.4 Generates performance standards and measurement controls
When a tourism organisation plans they have an idea of the results expected. As a tourism
manager, you need to always keep a tab on the planning, so that you can at anytime refer
to the plan and find out whether you are on track or not.
For example – assume you a manager of Ushaka Marine World and your plan is to attract
more visitors during off peak seasons. Your plan is to sell 1000 tickets in a month through
aggressive marketing strategies. However, if you are at 600, then you need to evaluate the
options to increase sale. Thus, the importance of planning is seen when we know which
factors to observe to evaluate and control the plan (Bennett,Jooste,Strydom 2005: 169).
8.2.5 To remain competitive by using latest technological developments
Tourism is a highly competitive industry, in order to remain competitive, tourism managers

need to constantly keep up-to-date with technology. Tourists are becoming more demanding
(Bennett,Jooste,Strydom 2005: 48). Tourists have new expectations and sometimes want
customised travel experiences.
With more choices available to tourists, they will identify the stronger brands that are
remaining competitive while the weaker brands will be unoticed (Bennett,Jooste,Strydom
2005: 68) Hence, a development plan assists tourism managers to adapt to changes by
researching latest technological developments in the industry.

A technological plan may include, new processes, new systems or a new business
opportunity. These changes can be used in their plans to provide better services that meets
the needs of their customers (Bennett,Jooste,Strydom 2005: 169). For example, a tourism
manager of South African Airways can plan to develop apps to keep abreast of changing
trends in the industry. Another example below shows how Joburg Tourism as included
technology in their plans to remain competitive.
Example 1: Joburg Tourism Website and Mobi App
One of Joburg Tourism’s core mandates is to provide online tourism information, along
with online SMME and association support. In order to embrace international
technological trends and to remain competitive in the digital sphere, Joburg Tourism
has developed a mobile app, while also redeveloping its website to be more user
friendly, appealing and to make it mobi-friendly.
The website will be launching as www.visit.joburg.
Source:https://www.southafrica.net/gl/en/corporate/press/joburg-tourism-lanches-
visitor-information-centre-in-sandton
8.2.6 Facilitates the attainment of organisational goals
Goals are defined as the tourism businesses primary intended accomplishments. Goals
provide target areas of achievement. Planning helps tourism managers to get a realistic
view of what they want to achieve. By proper planning, the goals set out by the organisation
have more chances of success (The importance of planning for an organisation 2018). For
example, a hotel might set a goal that they want to reach a new target market in an area.
Example 2: Flight center: Travel agency
Our Vision
To be the world’s most exciting travel company, delivering an amazing experience to

our people, customers and partners.
Our Purpose
To open up the world for those who want to see. For our people this means our
purpose is to open up their world by helping them develop professionally and
personally. For our customers this means opening up their world through the exciting
medium of well-organised, targeted and great value travel experiences.
Source: https://www.flightcentre.co.za/about-us

They then need a plan to provide direction of achieving the goal (Bennett et al 2005: 170).
Example 2 shows that Flight center accomplishes success through defining their vision that
assists in planning.
8.2.7 Presents a proactive approach to managers
Proactive behaviour involves acting in advance of a future situation, rather than just reacting.
It means taking control and making things happen rather than just adjusting to a situation or
waiting for something to happen. By proper planning, tourism managers are thinking about
future issues and how to manage them. Professor Steven Burgess makes a similar point on
being a proactive manager for planning developments in the example below on.
Example 2:South Africa’s leading managers
South Africas leading managers compete in an econmoy that barely resembles the one
in which they competed decades ago. South Africa is both an emerging econmoy and
transitional society. This requires managers to be innovative, entrepreneruail and market
orientated. Successful managers understand how to respond to the durality of the market
– rich or poor. South Africas leading managers are flexible and honest. They are able to
deal with tough times and overcome obstacles.
Source: Bennett,Jooste,Strydom 2005: 170
8.2.6 Eliminates the danger of crisis management
Even the most successful organisations cannot control the external environment in which
they exists. Unforeseen circumstances such as inflation, crime, recession, uneven
distribution etc. have an impact on the success of a tourism business. Thus, planning
encourages the “what-if” scenarios, where managers put contingency measures or plans
into place (The importance of planning for an organisation 2018).
Planning helps to anticipate these risks. It also helps to take the necessary precautions to
prepare for future uncertainties in advance and thus encourages stability (The importance
of planning for an organisation 2018).
In conclusion, in this section we saw that planning is a blueprint for a tourism business. It is
essential that the planning process is done continuously and is not just a once off plan.

8.3 The consequences of unplanned developments in tourism
When planning is not done by a tourism business, it impacts on four aspects related, this
include the physical, human and organisational (Consequences of unplanned development:
2011). These are discussed in detail below. Please ensure that you learn this section of your
study guide as the textbook isn’t explicit.
8.3.1 Physical consequences
As stated earlier, tourists are becoming more demanding, the percpetion of accommodation
has shifted from being “a place of rest” to a “lesiure experience” ( Bennett, Jooste and
Strydom 2005: 48). Therefore, tourism managers are required to plan their tourism offering
to ensure they meet guests experience. Therefore, pyhscial planning is required for tourism
dvelopments.
The physical environment refers to the surroundings in which the tourism development takes
place. By a lack of proper planning, the following may occur damage or permanent alteration
of the physical environment such as:
• Damage historical cultural landmarks and resources,

• Overcrowding and congestion,
• Pollution and
• Traffic problems (George 2015: 365).
Assume you manage a Museum, there should be attractive plans for landscaping that takes
into consideration facilities such as ample and clean toilets, parking and strategically placed
entrances. Many tourism businesses have only embraced tourism as a business acitivity
however they lack experience in actually planning sustainably. Planning will provide tourism
managers will necessary insight and include sustainability measures, which is a perquisite
for tourism development (Bennett et al 2005: 175).
For example, the unforeseen circumstances, due to a lack of planning, took place in Durban
at the Moses Mabhida Stadium during the Chiefs and Pirates game resulted in a cancellation
of bookings and costed the eThekwini Municipality says the costs of the damage to Moses
Mabhida Stadium after the violent pitch invasion are expected to run into millions of rands.

Boracay reopens to tourism, but its party days are over
The Philippines' famed Boracay island is once more open for business, but
those in search of wild beach parties are in for a letdown.
The island reopened Friday, six months after closing for a cleanup operation to
reverse the fortunes of a destination once labeled a "cesspool" by Philippines
President Rodrigo Duterte.
First arrivals landing on the newly pristine beach made their way to a number of
hotels that, following upgrades to their sewerage, have been approved by the
government, which is laying down the law in an attempt to keep thLast year almost
1.7 million tourists, including a significant number of cruise line passengers, visited
the island during a 10-month period, according to the governmental Philippines
Information Agency.
Among the problems caused by the island's long-running tourism boom were
unregulated development and pipes carrying raw effluence directly into the sea.
In a survey of the island's sewerage facilities prior to the closure, the vast majority
-- 716 of 834 -- of residential and business properties were found to have no
8.3.2discharge
Humanpermit
consequences
and were presumed to be draining waste water directly into the
sea, according to a report by the official Philippines News Agency.
Tourism does not exist in isolation. It also depends of the local community, in which many
of the developments exists. It is essential that tourism developments are planned alongside
Source:
with the local community. A lack of planning will result in human consequences:
https://edition.cnn.com/travel/article/boracay-reopening-restrictions-intl/index.html
• Resource issues between the tourists and local people could threaten tourism activities
within the development. For example, think of a big event that takes place in your city,
how does the event, with an influx of tourists affect you, as a local?
Some of these issues could being an increased in congestion, overcrowding, or even

an increase in crime. Therefore, these socio-cultural implications should be managed
effectively by tourism organiations and support from local authorities.

• If a tourism business does not integrate planning with the local community it could result
in a lack of awareness of the benefits of tourism to the destination area (Consequences
of unplanned development: 2011).
8.3.3 Organisational consequences
The challenge in tourism planning is because many tourism managers have little experience
with planning for tourism development and are reluctant to embark on this (Tourism
development planning), consequently this can result in:
• The lack of not planning proper infrastructure for the accessibility to a tourist’s destination
can result in poor customer service and tourists from visiting an establishment.
• Confusion over what the tourism business want to achieve;
• Lack of acceptance by employees because they are not included in the plans. Thus
leading to a lack of co-ordination and cooperation within departments;
• Failure to capitalise on new marketing opportunities because of not

planning;
• Erosion of market shares due to the actions of competitive destination areas – Saturation
levels of tourism sites and areas need to be anticipated and appropriate
management strategies (Tourism Policy, planning and marketing) with a lack of
planning the tourism offering will reach a stage of decline due to competition.
• Lack of sufficient awareness in prime markets;
• Lack of a clear image of destination area in potential markets;
• Lack of contingency plans in place. As stated earlier, plans should consider the
external environment. The external environment can have detrimental impacts on the
tourism industry. Let’s take the 9/11 attacks on the World Trade Twin Towers in New

York. The negative impacts of unplanned events led to implications of tourism
infrastructure been damaged (16 ways 9/11 changed the way we do business. 2011);
• Lack of support from local public authorities and investors and
• Failure to cope with the changing environment in the tourism industry – employees of an
organization is resistant to change especially after a company’s establishment of success.
In conclusion, poor tourism planning is unorganized, does not take the opportunity to travel and
if tourists decrease, profits decrease. More importantly, the product life cycle indicates that
destinations lose their appeal to tourists if not planned appropriately.
8.3.4 Other consequences
In addition, the lack of tourism planning can result in the:
- Lack of sufficient attractions and event and

- High seasonality (Tourism development planning).
• In this chapter we have explained what is meant by planning in tourism for tourism
businesses.
• Planning is simply means deciding now what you want to do later.
• We examined the importance of planning for tourism businesses to remain competitive.
• Tourism benefits can only be maximised by proper planning.
• Lastly, we had a look at the various consequences of unplanned developments that a
tourism business may face.

Answer the following questions to check whether you have achieved all the set outcomes:
1. “ If you fail to plan, you are planning to fail” – Benjamin Franklin.

With this statement in mind discuss the importance of planning for a tourism business.
(10)

2. “Where no plan is laid, where disposal of time is surrendered merely to the chance of
incidence, chaos will soon reign.”
Do you agree with this statement? Justify your answer (15)
3. Discuss why it is necessary to plan for technology? (5)
4. Assume you own opened a boutique hotel in your local area. Do you think it is important to
include plans that address the high seasonality of the tourism industry? Yes or No? Justify
your answer. (10)
Group discussions:
1. Conduct online searches on tourism businesses that failed to plan or who have done
inadequate planning, discuss in a group the impact their lack of planning had on the
tourism business.
2. As learned in the previous study units, tourism is fragmented and as seasonality issues.
Why do you think it is important for tourism managers to plan in this case?
Think Point
1. Why is planning an important characteristics of a tourism manager.
2. Can tourism managers plan unforeseen events? Why/ why not?
3. Do you think planning can work in a changing environment such as tourism?
4. Think about the thousands of people that are on the beach in Durban during Christmas and
Day of Goodwill.
What do you think is the consequences of not planning for them?
5. Can you think of other consequences of unplanned developments aside from those
mentioned in 8.3?

Case Study
Tsogo Sun ditches R23 billion Casino and Hotel deal

Tsogo Sun [JSE:TSH], the hotel and gaming group has suspended the sale of its casino and
hotel businesses to Hospitality Property Fund [JSE:HPB] after failing to secure enough support
from shareholders.
In July, Tsogo Sun said it would sell a portfolio of seven of its casino and hotel businesses to
Hospitality Property Fund in a shares-and-subscription deal worth R23 billion ($1.72 billion).
It had become clear at the reconvened general meeting held on Monday morning that not
enough shareholders supported the proposed transaction and unbundling, the company said
in a statement. “The sale of shares and subscription agreement has been terminated by
agreement between Tsogo, Hospitality and the remaining parties to that agreement,” Tsogo
said.
Hospitality said in July it would acquire the businesses in a shares and subscription agreement
and Tsogo was set to hold 87% of Hospitality after the transaction.
Tsogo said at the time the sale was part of plans to split into three separately listed divisions
focused on property, gaming and hotel management.
Earlier this year, Tsogo reported that it was slowing investments in expanding existing
businesses and making new acquisitions after debt ballooned. CEO Jacques Booysen said
the company had plans to expand further into Africa.
Source: http://www.sacommercialpropnews.co.za/property-companies-news/8842-
tsogo-sun-ditches-casino-and-hotel-assets-sale.html
Questions based on case study:
1. Why do you think Tsogo suspended it sale of casinos and hotels because of a lack of
stakeholder support? (5)
2. Do you think Tsogo sun is future orientated? Use quotes from the case study to
substantiate your answer. (5)
Has the drought affected tourism?
South Africa can at times can be a very reactive country, meaning we seem to wake up very
late on critical issues.
Over many years we have been hearing about the scarce resource that is water. However,
we have waited until water restrictions in the Western Cape are at level six before making

impactful changes. Thanks to good communication, for example, residential usage has now
dropped to 523 megalitres per day – a vast difference to the 1 130 megalitres per day
recorded in 2014.
For the tourism industry, it’s about communicating to visitors that Cape Town remains open
for business. Tourists are hearing the correct messaging around water from the moment
they arrive to the time they leave, ensuring their impact remains low, however they should
know this before they arrive.
The truth of the matter is that the drought in South Africa will have an impact on the
economy. The South African tourism sector accounts for over 9% of the country’s GDP. A
large portion of this is from visitors to Cape Town. The Western Cape has a challenging road
ahead, but we cannot afford the potential loss of income and jobs as a result. We must also
remember that the water crisis is not limited to the Western Cape, with the Eastern and the
Northern Cape worst hit by the drought. We need to address this at a national level.
This means planning is key. If we had made water our focus five years ago, we wouldn’t be
in this situation now. For our sector, and for everyone, the water crisis in the Western Cape
is a huge wake up call. South Africa, and even the rest of the world, needs to learn from
these events. Recycling water and being water wise will be the new norm for all of us. We
need to protect and preserve our country’s water resources for the long-term.
The developmental state is needed to turn this around to make it conjoined to the National
Development Plan and to cut the deadwood.
South Africa needs the airline for many reasons. The primary ones here include high
unemployment and the weak rand. After SAA virtually handed over its Cape Town-London
route to British Airways, the latter made it profitable. The same can be said about many
domestic airlines for domestic flights.
More needs to be done to work with other airlines within the Southern African Development
Community, and to also enable ease of movement through the simplification of the visa
process, which is cumbersome. All this is linked to the geographical disadvantage of the
country. Being far removed from the centres of international commerce, the country can
nevertheless draw lessons from New Zealand and Australia who have more or less the
same affliction.
SAA cannot go at it alone. The national carrier must be kept in order to ensure South Africa’s
dignity and standing in the world. There is an urgent need to restructure SAA. Employ
competent people to manage it. Avoid appointing politicians’ friends and families onto the
board.

There should be less government intervention. The state ought to create a conducive
environment for SAA to succeed.
South Africa’s national self-image could use a jump-start. There is no better place to start
than at SAA.
Source: https://www.iol.co.za/pretoria-news/national-vision-needed-to-help-saa-soar-again-
18113398
1. Why do you think national vision and strategy is needed for SAA? (10)
2. What were the consequences of not planning for SAA? (10).
3. Why should SAA plan to remain competitive? (5)
4. Why do you think the articles stated that “SAA cannot go at it alone” ? (5)
Can Sun City Shine again ?
In the late 1970s, gambling was the windfall that built Sun City. This cash flow subsidised the
building of the Palace of the Lost City too.
Those were the glory days, something Sun City traded on for years.
In recent years, the magic faded. Hotel occupancies were low, people were gambling
elsewhere.
A combination of factors changed things: democracy in 1994 meant you didn’t have to drive
to Sun City to gamble. “It ran a wonderful race for many years and then it became obsolete
in many respects,” said Sun International chief operating officer Rob Collins, at its relaunch
in December. What it means is mushrooming of urban hotels and the legalisation of
gambling have presented challenges
Overall, gaming revenue in SA has dropped. This means Sun International has been relying
on alternative sources of income — accommodation at its hotels, as well as the hefty
margins in food and beverages.
De Wet Schutte, equity analyst at Avior Research, says this shift was inevitable in post-
apartheid SA.

“When casinos were legalised across the greater SA, post-1994, it meant places like Sun
City lost some of their gambling exclusivity in that sense. In the old dispensation it was one
of the very few places you could gamble and when gambling was legalised 40 casino
licences were made available across SA, with large casinos starting to mushroom in the
main urban centres.”
The big resorts — places like the Wild Coast Sun in what was then Transkei and is now the
Eastern Cape — lost many gambling customers to urban centres. So they had to reinvent
themselves.
It found the money by selling timeshare, as well as internal cash flow, so shareholders had
to pay as little extra as possible.
So how has it changed?
Stephens says it now focuses on attracting families, “adrenaline seekers”, and the business
and event market with facilities.
Two months ago, Sun International unveiled a revamped Sun City – the product of five years
of work and a R1bn makeover. Its old “Sun City Hotel” has been rebranded as the “Soho
hotel” for example.Graeme Stephens, Sun International CEO, says that by 2013, they
realised they either had to fix it up, or consider alternatives — like selling it, or closing it.
“Ultimately, factoring in not only the financial considerations but the brand and employment
considerations, we took the decision to invest over R1bn,” says Stephens.
Source: https://www.businesslive.co.za/fm/features/2017-02-10-will-the-sun-rise-for-sun-city/
Questions based on case study
1. What challenges did Sun City face in terms of planning? (10).
How do you think planning to rebrand the development with assist attracting tourists? (10)

Digital tourism - Pii Digital, leading the industry
Having earned its reputation as the digital agency of choice in delivering custom-designed
digital marketing systems, solutions, technology, products and services to the South African
travel and tourism industry, Pii Digital continues on its path of virtual excellence and
expertise.
Now with a national presence “pinned” across provincial boundaries, the Pii Digital footprint
has left its mark on a growing number of Destination Marketing Organisations (DMO's) as
well as Provincial Marketing Organisations (PMO's) and a City Scale DMO’s. Through the
bespoke development of industry leading travel and tourism technologies, as a digital
specialist of choice to the tourism sector, Pii Digital continues to assist in bolstering travel
and tourism services in South Africa.
Despite similarities drafted across various DMO clients, in isolating their unique needs
regardless of their comparisons, Pii Digital prides themselves on uncompromising service
excellence by adapting technology, design and development to deliver bespoke, fully
digitalised marketing systems and services.
Having already design and developed state-of-the-art bespoke DMO Digital Systems across
their current Travel and Tourism client base, Pii Digital has enabled a growing compliment of
South African destination marketing organisations.
In shaping digital destination marketing systems around the unique needs and objectives of
each of their clients, bespoke DMO developments cater to the management and marketing
of DMO products that include;
• Various Accommodations, categorised by star grading, type, and districts

• Activities including Leisure, Business, Meetings, Events and Conferences
• Hotels, Casinos, Banqueting Hospitality and other Commercial Accommodation
• Restaurants, Boutique Dining, Eateries and Catering Services
• Attractions, Heritage Sites, Places of Interest and Historical Locations
• Travel Packages, Seasonal Offers and Tour Routes
• Tour Operator and Related Service Providers
• Tourism Information Offices, National Parks and Local Authorities.
With their unique knowledge and legacy expertise in the digital travel and tourism space, Pii
Digital are equipped with honed skillsets, technology and pioneering digital proficiencies to
create bespoke destination, provincial and city scale marketing systems that in turn support
DMO’s in positioning their products and associated service provides in a holistic, 360
Incorporated in the development of state-of-the-art digital destination marketing systems,

technologies can cater to (but are not limited to);
• Built in DMS technology

• Integrated databases and content management systems

• The management of inventory, listings, service provider, tourism information and more
across various platforms on a single and centralised interface
• Location based QR code readers native to the destination that allows visitors to
receive landmarked information as they travel
• Discovery mode technology that updates visitors by way of alerts and push
notifications with nearest location based attractions, restaurants, places of interest,
shopping and directions to these sites based on database inputs
• Itinerary and route mapping, favourite-ing and planning
With his sights set on advancing the future of South African Travel and Tourism
Technologies, Marscelle Pillay Founder and CEO of Pii Digital aspires to put to task the ten
years of tried and tested expertise gained in the digital Travel and Tourism sector. “We’d like
to be a first to offer South African clients with functionality that taps into artificial intelligence
capabilities”, says Pillay.
Pillay goes on to explain, “encouraging the South African tourism industry by way of
community driven AI, from listings to bookings, payment gateways and access to location
based travel information, we hope to extend the digital handshake between travellers, South
African destinations and tourism service providers by introducing various technologies
currently deployed abroad”.
In taking the future of South African Tourism to the next level, Pii Digital offers an all-
inclusive digital experience that includes;
• Contemporary Cloud Development
• Deep Dev and Tech Builds
• UI and UX Design
• Content and Social Media
• Digital, Social and Mobile Strategy
• Search Engine Marketing
Continuing on its expansive journey through digital excellence and expertise offering face-
to-face, personalised customer experience across national boundaries, Pii Digital invites
you to join their journey in positioning the South African Travel and Tourism industry on
digital domains, delivering user-friendly, accessible and up to date destination marketing to
the world!
Source: http://www.bizcommunity.com/Article/196/16/184751.html
1. Do you think Marscelle Pillay is a proactive owner. Motivate you answer (15)
2. Why does having a proactive approach help planners? (5)
3. What is Pii Digital goals. How does setting a goals assisit Digital Pii in making their
business successful? (5)

Economic prospects of Gauteng as a tourism destination
The Gauteng Provincial Government has prioritised tourism and tourism skills development
as the main drivers in transforming Gauteng into a competitive global city region. This is in
response to the fact that Gauteng attracts 52% of all international tourists coming to South
Africa which exceeded 7 million in 2006. Domestic tourism in the province also showed
increase of 5,5% in the first two quarters in 2005.
According to Mr M Shilowa, the Gauteng Premier, the number of tourist attractions in

Gauteng increased from 68 in 2001, to 275 in 2005, “employing about 4 500 permanent and
casual workers. More people are visiting the area, over 70 000 per week, and more money
is circulating in the area, in excess of R7,5 million per week.
” Gauteng’s ability to create sustainable jobs will depend on the ability of its economy to
attract investment and increase tourism as the key sectors of growth in the province. That
will enable Gauteng to reach an economic target of 8% growth by the year 2014. In
preparations for the FIFA World Cup in 2010 the province started two major public works,
the ‘Gautrain’ and the African Theme Park in Midrand. Both projects are tourist oriented
aiming at increasing overall tourist attractiveness of Johannesburg, known as the business
destination and as the African ‘power-house’.
The Gautrain is the first metro train in South Africa. It will connect Johannesburg with
Pretoria, and both cities with the Oliver Tambo International Airport. The Gautrain will benefit
residents of Gauteng as it will make travelling between the two cities much easier.
The African Theme Park in Midrand is scheduled to open in late 2008 with a capacity of 25
000 tourists per day. The essence of the project is family fun and entertainment, an African
learning experience and luxury-themed estate living, all within the ethos of African life,
tradition, architecture and culture. It will create close to 110 000 new jobs in Gauteng with a
further 34 000 jobs from outside Gauteng.
Source: Ivanovic 2014:131
Question based on case study:
Describe how Gauteng is using integrated management planning to increase the

attractiveness of Johannesburg for tourists (15).

References
16 ways 9/11 changed the way we do business. 2011. Available:

https://www.forbes.com/sites/brettnelson/2011/09/08/16-ways-911-changed-the-way-we-
do-business/ (Accessed 29 November 2018).
Bennett, J.A., 2005. Managing tourism services: a Southern African perspective. Van Schaik
Publishers.
Consequences of unplanned development. 2011. Available:

http://amausingearth.blogspot.com/2011/12/consequences-of-unplanned-
development.html (Accessed 24 November 2018)
Digital tourism - Pii Digital, leading the industry. 2018. Available:

http://www.bizcommunity.com/Article/196/16/184751.html (Accessed 29 November2018).
Has the drought affected tourism?. 2018. Available:

http://www.businessessentials.co.za/2018/02/28/water-crisis-thebe-tourism/ (Accessed 29
November 2018).
National vision needed to help SAA soar again. 2017. Available:

https://www.businesslive.co.za/fm/features/2017-02-10-will-the-sun-rise-for-sun-city/
(Accessed 29 November2018).
R2.6-Million – Estimated Cost Of Total Damage At Moses Mabhida.2018. Available:

https://www.huffingtonpost.co.za/2018/04/25/r2-6-million-estimated-cost-of-total-damage-
at-moses-mabhida_a_23419720/
The importance of planning for an organisation.2018. Available:

https://smallbusiness.chron.com/importance-planning-organization-1137.html
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https://www.usaid.gov/sites/default/files/documents/2151/DMOworkbook_130318.pdf
(Accessed 29 November 2018).
Tourism Development Planning. Available:

https://dspace.nwu.ac.za/bitstream/handle/10394/13939/Acha-
Anyi_PN_Chapter_3.pdf?sequence=4&isAllowed=y (Accessed 23 November 2018).

Tourism planning consequences and tourism development. Available:
http://www.academia.edu/31451907/Tourism_Planning_Consequences_of_unplanne
d_tourism_development (Accessed 21 November 20180.
Tourism Policy, planning and marketing. Available:

https://repository.up.ac.za/bitstream/handle/2263/29848/03chapters5-6.pdf?sequence=4
(Accessed 29 November 2018).
Tsogo Sun ditches R23 billion Casino and Hotel deal.2018. Available:
http://www.sacommercialpropnews.co.za/property-companies-news/8842-tsogo-sun-
ditches-casino-and-hotel-assets-sale.html

STUDY UNIT 8: MANAGING FINANCE FOR TOURISM
8.1 Introduction
8.2 Financial Planning and budgeting
8.3 Budgeting
8.3.1 The purpose of budgets
8.3.2 The budgeting process
8.4 Budgetary control
8.5 Financial ‘Building Blocks’
8.6 The importance of cost classification for tourism businesses
8.7 Financial planning
8.8 Break Even Point
8.9 Decision making using financial information
8.1 Introduction
Many businesses are great at making profits but facing challenges in managing the finances.
This has resulted in many businesses failing to survive. Tourism managers need to have
knowledge of how to manage finances and have the relevant financial information used in
planning, execute the plan and review their performance. This chapter looks at managing
finances and introduces the learner to some tools that will help ensure the on-going success
of new and established businesses.
Upon successful completion of this study unit, students are expected to:
• Have an understanding of strategic financial planning

• Define a budget and discuss the budgetary control, using variances
• Understand the economic environment a tourism business operates in
• Identify and provide examples of the basics costs elements involved in the running
of tourism businesses
• Classify the basic cost elements according to how they behave, and explain the
significance of cost behaviour in financial planning
• Apply cost-volume-profit analysis principles for financial planning and management
purposes

• Discuss how management helps make decisions such as outsourcing, specials,
discontinuing a service line or segment of the organisation, and the use of scarce
8.2 Financial Planning and budgeting
In a market economy like that of South Africa the main objective of a business is to make a
profit and to create value for the shareholders. A business is expected to take risks in order
to make a profit, the higher the risk it takes, the more profit it realises.
All tourism organisations are expected to decide carefully and specifically how they will
manage themselves, and how resources will be deployed to support the relevant activities
and process that result in the achievement of their goals. The specific course of action taken
is known as a strategy.
Strategic financial planning is the process that should be followed to determine what a
business should become and what strategies it should follow to best achieve its financial
goals.
In order to implement this chosen course, tourism organisations develop clear business plans
that require use of resources, and these resources need to be budgeted for and summarised
as a budget for that current financial year. A budget maybe defined as a detailed plan based
on clearly stated and agreed objectives. The more specific definition form the dictionary is “an
itemised summary of probable expenditures and income for a given period”.
It is an expression in monetary terms of the strategic and tactic planning for the financial year.
8.3 Budgeting
8.3.1 The purpose of budgets
Budgets serve a number of important management functions. These functions include:
• Communication
• Target
• Allocation of resources
• Co-ordination

• Control
8.3.2 The budgeting process
The process starts with identifying the limiting factor relating to the business. Once the limiting
factor has is identified, the rest of the budget can be formulated around that for each building
block of the financial and operation plans, for example, once a hotel estimates the amounts
of bed nights for a period, the resources needed to offer breakfasts will be more easily
estimated.
To express in financial terms, the following requirements are needed:
• Identification of the types of resources needed
• Quantifying the amount of resources needed
• Calculating the total costs of each type of resource
• Summarising the costs to create the financial plan
There are various budgeting approaches a business can follow to translate its strategy into a
financial plan, including:
• Top down budget approach- High level budget is developed at the top with senior
management and individual department will be given amounts and create detailed
budget with their allocation
• Bottom up budget approach- this is where you start with a list or plan or schedule of
the things you want to do and then cost it up to get the total budget
• Historical budget approach- the actual performance of the current period is considered
and is used as the "base" from which to predict the performance in the next budget
period
• Zero based approach- just starting your budget from a zero sum and all expenses must
be justified for each new period.
8.4 Budgetary control
It is defined as the use of a budget to control the activities of an organisation in order to ensure
that activities are not only effectively performed, but also efficiently executed.
It is based on two principles which are effectiveness and efficiency

a) Effectiveness refers to doing the right things
b) Efficiency on the other hand means doing things correctly
Budgetary control requires that the results of the implementation of a budget be monitored
regularly. On a monthly basis, the planned activities and the expected resources they are
expected to consume in a particular month. The difference between planned actual and
resource usage and actual activity and actual usage gives rise to what is known as variance.
A variance is defined as a deviation of actual outcome from the planned outcome. In other
words, this is the difference between the actual cost or revenue and the budgeted cost or
revenue. The purpose of variance reports is to provide management with timely information
with which to assess whether the planned and implemented course of action is yielding the
desired results. This is because variance should be justified in the context of the organisation’s
corporate objectives.
For example in a private game reserve, variance analysis would involve monitoring the
attainment of yearly targets on a monthly basis. This could involve monitoring of overseas
tourist inflow on a monthly basis to evaluate the effectiveness of the marketing campaign.
8.5 Financial ‘Building Blocks’
Tourism organisations develop internal reports and schedules. These are known as
management accounts for the purposes of running and managing their operations.
Management accounts provide far more detail regarding the organisation’s financial activities
than financial statements, and thus, comprise the organisation’s financial information.
Management accounts are used to carry out the following activities;
• Planning
• Decision making
• controlling
As such, management accounts are used by tourism managers for decision making at
strategic, operational and tactical levels.
Since management decisions impact on costs and revenues of organisations, effective

decision making requires that tourism managers:
• Clearly define costs

• Understand the categories into which costs are classified (cost classification)
• Understand how costs respond to changes in activity level (cost behaviour) A)
General cost classification:

1. Direct material-materials that can be directly traced to the final service offering
2. Direct labour-cost of labour that can be physically and conveniently traced to physical
offering
3. Overheads-cost of resources used in the provision of services (electricity, rates etc)
B) Cost classification for predicting cost behaviour: when financial activity levels
change, costs also change.
The following are categories we can classify costs as to help us predict how costs will behave:
1. Fixed costs-cost that remain the same
2. Variable costs-cost that changes in relation to changes in activity level 3. Mixed costs-
consist of both fixed and variable
C) Cost classification for assigning costs to cost objects: here we try and figure out
exactly how much as a business are paying for different cost items.
It enables managers to:
• Establish costs associated with a guest stay.
• Establish the profitability of different products we offer.
• Control our spending costs. Here we can classify costs as Direct or

Indirect/Overhead costs
D) Cost classification for decision making: in order for cost information to aid in
decision making we can divide it into the following categories:
1. Differential costs-difference in cost between two alternative projects in which

management can select
2. Opportunity costs- the value of something that must be given up to acquire or achieve
something else.
3. Sunk costs-costs that have been incurred already.

8.6 The importance of cost classification for tourism businesses
It is important for planning, decision making and control to classify costs correctly. Let us now
discuss how costs respond to changes in activity level.
8.6.1 Cost behaviour
Fixed costs: fixed costs do not change even if the business does not have any guests. They
do not depend on the level of business activity. This does not mean that they never change.
Salary increases are an example of when fixed costs may rise. Due to the realisation of
economies of scale, fixed costs per unit over time will in fact decrease in a business sense.
Variable costs: variable costs do change as business activity fluctuates. These costs behave
differently to fixed costs in that variable costs per unit remain fixed as business levels increase.
8.7 Financial planning
Cost-volume-profit analysis: this is a decision making tool that helps understand the
interrelationship between cost, volume of activity and profit. We achieve this by exploring the
relationship between four variables:
• Cost per product/service
• Revenue from product/service
• Volume of output product/service
• Profit from a product/service
The Contributing margin is the starting point in the analysis between cost-volume and profit.
This is the amount remaining from sales revenue after variable costs have been deducted.
Selling Price per Unit – Variable Costs = Contributing Margin.
8.8 Break Even Point (BEP)
This is the activity level at which a tourism organization is neither making a profit nor a loss.
The BEP helps with the following:
• To see if the organization has the required capacity to produce enough products or
services to break even. In other words is it worth it to invest in a project.

• To determine if there is sufficient demand for the products
• What kind of losses can the business sustain in the short-term There are two methods
of calculating the BEP
The equation method: Sales/Total revenue = variable costs + fixed costs + net profit
The contribution method: Break even units = Fixed costs/contribution margin per
unit.
8.9 Decision making using financial information
Decision making is about making choices about the future. Knowledge of financial information
helps tourism managers to make informed decision about products/service to continue
offering and service to drop. Management should be aware of the relevant cost and relevant
revenues because these influence their future decision making. Management also can use
the principle of opportunity cost to make decision on which project to forego. Thus when
making future decision management should consider these two questions;
• Is this a future cost or a benefit?

• Will the future cash flow change because of this decision?
• In this chapter we have explained the importance of financial management in tourism
• We looked at the building blocks of financial panning
• We looked at the importance and different cost classifications
• We analysed financial planning in further detail
• We then looked at what a budget is and the importance of budgetary control.
• Lastly we looked at how we can improve an organisation’s cash flow

8.11 Self-assessment and activities
Do you think total fixed costs are always fixed? Explain your answer with supporting reasons
that draw from your understanding of the tourism industry (10)
outcomes:
1 What makes costs relevant to management decisions? (10)
2 In your own words explain what BEP is and why it is important. (10)
3 Name all the resources that you think may be budgeted for. (8)
4 Explain the importance of cost classification (10)
5 Explain the contribution margin concept in your own words. (5)
Case Study
Read case study 12 (Sipho Zulu’s African hospitality) and answer the questions that follow
Reference
Weetman P. 2006. Management accounting. London. Prentice Hall
McMillan, E. J. 2009. Budgeting and Financial Management Handbook - 2nd edition.

American Society of Association Executives

STUDY UNIT 9: MANAGING THE SOCIO-CULTURAL,
ENVIRONMENTAL & ECONOMIC
IMPACTS OF TOURISM
9.1 Introduction
9.2 The economic impact on tourism
9.3 Measuring the economic impacts on tourism
9.4 Calculating the economic impact
9.5 The socio-cultural impacts on tourism
9.6 The socio-cultural impact of travel on tourists
9.7 The environmental impact of tourism
9.8 Managing the environmental impact of tourism
9.1 Introduction
Tourism is a global phenomenon. This also means that the implications or impacts of tourism
are felt worldwide. Thus, tourism managers need to understand the potential positive and
negative impacts generated by tourism. In this chapter we further explore these impacts and
the implications of the impacts on an economic, socio-cultural and environmental level.
Upon successful completion of this study unit, students are expected

to:
• Explain the economic impact on tourism

• Demonstrate how to measure the economic impact on tourism
• Explain what is meant by the multiplier effect
• Outline the concepts of linkages and leakages
• Explain the range of social-cultural impacts of tourism

• Discuss the management implications of socio-cultural impacts of
tourism
• Illustrate the various ways in which tourism can impact on the
environment.

9.2 The economic impact on tourism
Tourism accounts for nearly 9% of South Africa’s GDP. This is a measure of the size and
value of all goods and services produced during a specified time period, usually a year. GDP
can be divided onto the Primary sector, the manufacturing sector and the service sector, of
which tourism is a part of the service sector. It is difficult to measure accurately tourism size
because of tourism’s influence on so many other sectors of the economy. In fact tourism
impacts on nearly all sectors of the economy either directly or indirectly.
9.3 Measuring the economic impacts on tourism
Impact/tourism multiplier: this refers to the impact in a monetary value that tourism has on
other sectors of the economy
Linkages: the strength of linkages between different sectors of the economy determines the
size of the impact multiplier. Tourism has incredibly strong linkages to other sectors of the
economy.
Leakages: the effects of leakages diminish the effects of tourism as they travel through the
economy. Simply put, a leakage is when money leaks out of the economic system.
Some of the main sources of leakages include:
• Imported manufactured goods
• Imported inputs
• Currency conversion, banking fees
• Remittance of wages by expatriates
• Management fees or royalties for international franchises
• Payments to overseas companies
• International marketing costs
One answer to leakages is to employ Responsible Tourism Management which seeks to

create strong local linkages and so lessen the effects of leakages.
As stated earlier the tourism multiplier has certain direct and indirect impacts. The size of the
multiplier depends on a number of factors:
• The model or method used to calculate the multiplier

• The size of the economy
• The degree to which backwards and forward linkages exist between different sectors
of the economy
• The population size
• The relation between the number of tourists and the local population
• The share of tourists coming from the major country of origin
• The political system and per capita income
9.4 Calculating the economic impact
The most common model to calculate the economic impact on tourism is the input-output
table. This is the standard method for measuring the spread effects of changes in the final
demand for the product of an industry or sector. Due to the nature of the tourism industry it is
not easy to get the actual or exact figures that illustrate the extent of tourism impacts on the
economy. Unlike other sectors, interrelate with other sectors such as the transport sector.
Other difficulties arise because of:
• Unrealistic assumptions made about the economy
• The rigidity of a model (the input-output analysis) that means that price changes
cannot be taken into account
• Results from such models cannot be compared to impact multipliers calculated for
other countries
Other methods for calculating the economic impacts of tourism include using a Tourism
Satellite Account (TSA), which is an instrument used to calculate the size of the tourism
sector’s contribution to the economy of a country, Information CT-satellite accounts and
Environmental satellite accounts. We can use TSA’s to compare the information to those of
other countries and besides that it enables the measurement of:
• Tourism’s contribution to GDP
• Tourism’s ranking compared to other industries
• Employment figures in tourism
• The volume of investment in tourism

• Tax revenues generated by tourism
• The impact of tourism on the National Balance of Payment Tourism has the following
positive economic benefits:
• Employment
• Skills levels and employee training
• Increased government revenue
• Stimulating regional development and regeneration
• Contribution to local economies
Some of the negative economic impacts of tourism include:
• Inflation/increased living costs
• Opportunity costs
• Over-dependence
• Often rich countries are better able to profit from tourism than poor ones
9.5 The socio-cultural impacts on tourism
Factors influencing socio-cultural change: it is inevitable that when tourists visit an area they
will influence the local population and the other way around. The greater the contrast between
host and visitor the greater the impacts will be. Another important determinant is the type of
visitor.
Other specific factors influencing these impacts include:
• Who the tourists are
• What is the scale of tourism
• The ratio of visitors to residents
• How developed is the tourism industry
• What infrastructure exists for tourism
• The seasonality of tourism
• The extent of foreign ownership
Key socio-cultural impacts resulting from tourism are listed below:
• Crime

• Prostitution and sex
• Gambling
• Rural-urban migration
• Health issues
• Demonstration effect (where locals change their behaviour to imitate those of visitors)
• Language
• Commodification
• Staged authenticity
• Preservation of culture and heritage
• Renewal of cultural pride
• Promotion of peace and cross-cultural understanding between tourists and locals
• Improved infrastructure for the local community
• Provision of community facilities and public services
See Table 15. 4 for indicators of socio cultural impacts of tourism
9.6 The socio-cultural impact of travel on tourists
As stated earlier, tourists are also influenced when they experience different cultures. These
changes could include life-style changes, changes in tastes understanding and appreciations.
They could also change negatively for instance when a foreign visitor contracts a disease from
the destination or if the tourists themselves turn to crime.
Measuring the socio-cultural impact on tourism: these are extremely difficult to quantify and
measure. Some of the impacts are obvious, like crime and prostitution whereas others are
more subtle like the demonstration effect. Some research sources used to gather data include
surveys, observations and secondary sources. One of the most widely used theories that seek
to measure the socio-cultural impacts of tourism is Doxey’s Irridex model (1975). The model
suggests that communities pass through a sequence of reactions as the impacts of an
evolving tourism industry in their area become more pronounced and their perceptions change
with experience (see Table 15.5).
In order to manage these socio-cultural impacts one has to know who the key role players
are. They include:

• Tourists
• Host population
• The tourism industry
• The media
• Government agencies
9.7 The environmental impact of tourism
The environment plays a key role in attracting tourist to a particular destination. In order to
consume the tourism product, tourists have to visit a particular and inevitably their activities
will impact the environment at that particular destination.
The concept of the environment is made up of five aspects which can be affected by tourism:
• Natural environment
• Farmed environment
• Natural resources
• Wildlife
• The built environment
The main environmental costs of tourism are:
• Environmental pollution
• Erosion of land
• Litter
• Traffic congestion
• Loss of natural habitats
• Depletion of natural resources
9.8 Managing the environmental impact of tourism

There are four tools that are widely used to help manage the environmental impacts of tourism:

• Carrying capacity- the maximum number of people who can visit and use a site without
damaging the physical environment. There are four types of carrying capacity that can
be identified; Physical, environmental, psychological and social carrying capacity.
• Visitor and traffic management: hard and soft measures
• Environmental impacts assessment
• Sustainable development
• In this chapter we have explained the economic impact on tourism and how these
impacts are measured.
• We discussed how to calculate the economic impacts
• We identified the socio-cultural impacts of tourism and looked at the factors that influence
change.
• Lastly we identified the environmental impacts of tourism and what can be done to
manage them.
Discuss why tourism is not classified as one industry in economic models. Name at least ten
industries that are included wholly or partially in the tourism industry (15)
outcomes:
1 Does tourism have any positive environmental impacts? (10)
2 How does employing carrying capacity help managers to limit the costs of tourism on the

environment? (10)
3 In your own words define and explain the interrelationship between tourism multipliers,
linkages and leakages. (12)
4 Why are tourists such attractive targets for criminals? (6)
5 Explain why community involvement in tourism development can reduce socio-cultural

Impacts. (8)
6 Explain the positive environmental impacts of tourism (8)
7 Discuss how tourism encourages crime in a destination (10)
References
George. R. 2015. Managing Tourism in South Africa. Oxford George. R. 2011.
Managing Tourism in South Africa. Oxford Abbas, E. 2012. Economic impact of
tourism. https://www.slideshare.net/EmanAbbas/economic-impact-of-tourism-
13613739
Eurostat. 2008. Eurostat Manual of Supply, Use and Input-Output Tables, Collection:
Methodologies and Working Papers, Luxembourg.
Mbaiwa J.E. 2005. The Socio-cultural Impacts of Tourism Development in the Okavango
Delta, Botswana, Journal of Tourism and Cultural Change, 2:3, 163-185, DOI:
10.1080/14766820508668

STUDY UNIT 10: MANAGING TOURISM RESPONSIBLY
10.1 Introduction
10.2 What is meant by managing tourism responsibly?
10.3 Reasons for managing tourism responsibly
10.4 The benefits of managing tourism responsibly
10.5 Initiatives to promote RTM
10.6 How to manage tourism responsibly
10.1 Introduction
Globally there has in recent years been a massive upsurge in corporate Social Responsibility.
The tourism industry has had to adopt the trend for its perpetual succession. This has led to
a more responsible form of tourism that seeks to limit its negative impacts and maximize the
effects of its positive impacts. In this chapter we look at what is meant by responsible tourism
and how it can be achieved.
• Explain what is meant by managing tourism responsibly

• Demonstrate why it is necessary for tourism companies to adopt sustainable
management practices
• Recognize the business opportunities that can be achieved by responsible tourism
management
• Identify the role that tourism plays in addressing national challenges of poverty
alleviation, job creation and inequality
Recognize national and international initiatives that have been introduced to promote
ethical and responsible tourism management
• Explain what management practices are needed to make tourism more responsible

10.2 What is meant by managing tourism responsibly?
The concept underlying principle of Responsible Tourism Management (RTM) is to provide a

superior holiday experience for visitors and improve business opportunities for the tourism
sector and it is necessary for sustainability and profitability of the tourism industry. The
objectives of this approach is to increase the socio-economic benefits to local communities,
including a broader spectrum of stakeholders in decision making, promote the sustainable use
of limited resources and improve the tourism offering to the consumer. See Table 16.1 for
broader underlying principles of RTM. The emphasis of RTM includes:
• Develop a competitive advantage
• Address, monitor, and disclose impacts of tourism development
• Ensure involvement of communities and the establishment of meaningful economic

linkages
• Encourage natural, economic, social, and cultural diversity
• Promote the sustainable use of local resources
10.3 Reasons for managing tourism responsibly
• International trends- Increased pressure from the international activists concerning

Corporate Social Responsibility (CSR).
• Consumer demand-consumers are demanding more responsible products
• Increased business opportunities-respect of culture and nature can help the tourism
business to attract more stakeholders
• Improved risk management
• Corporate recognition of the strategic significance of social and environmental

pressure
10.4 The benefits of managing tourism responsibly
There are some tangible and indirect benefits of responsible tourism management. Some of
them are listed below:

• Increased community support
• Stronger brand positioning-customers are not only concerned about products but are
also willing to pay a premiums for responsible tourism
• Enhanced corporate image and reputation-brand loyalty to those companies which

promote social responsibility
• Attract, motivate and retain employees
• Price premiums
• Appeal to investors
• Industry awards and recognition
• WOM marketing and media coverage- customers are more likely to spread positive
word of mouth if they feel that their visit contributed to the local environment
Diversification of product
10.5 Initiatives to promote RTM
A number of initiatives have been put in place or launched to facilitate the adoption of
responsible, ethical and sustainable tourism management. Listed below are some of the
global and local initiatives.
• Global code of ethics in Tourism founded in 1999.
• Global Sustainable Tourism Council
• Tour Operator’s Initiative (TOI)
• Global Partnership for Sustainable Tourism
• National Tourism Sector and Responsible Tourism Strategy
• National Minimum Standard for Responsible Tourism
• Sustainable certification
• Sustainable tourism organisations
BEE Tourism Charter and Scorecard: Drafted by DEAT in 2005, its aim is to encourage
tourism companies to become BEE compliant and explains the actions that are supposed to
be taken by the tourism organisation in order for them to comply with BEE Charter. The charter
looks at seven areas where organizations can score BEE points. Four of the main ones are:

• Empowerment
• Human resource development
• Indirect empowerment
• Social development
Fair trade in tourism South Africa (FTTSA): a non-profit marketing initiative that promotes
and publicizes fair and responsible business practices by South African businesses. It has a
set of criteria to measure the responsible management of tourism companies which include:
• fair wages and working conditions
• ethical business practices
• respect for human rights, culture and environment
10.6 How to manage tourism responsibly
• Increase local linkages- they increase the multiplier effect thereby retaining any locally
generated tourism income
• Produce a written policy on RTM- See table 16.2 for the 10 components of responsible
management policy
• Government and its role-including offering training facilities, facilitate market access
for small tourism business etc.
• In this chapter we have explained what is meant by RTM.
• We looked at some reasons for managing tourism responsibly
• We examined the benefits of RTM
• We highlighted some national and international initiatives to promote RTM

Lastly we looked at how a business can manage itself more responsibly.
Do you believe tourism in South Africa currently is being managed responsibly? Give
examples for your argument (10)

outcomes:
1 How would increasing local linkages make your business more responsible? (10)
2 How will responsible tourism help South Africa to diversify its tourism offering? Give
examples. (8)
3 Describe the benefits of RTM in detail. (18)
4 What is sustainable development? (5)
References
National Tourism Sector Strategy (NTSS) 2016-2026.

www.tourism.gov.za/AboutNDT/Publications/National%20Tourism%20Sector%20Strategy%
20NTSS%202016-2026.pdf
http://worldtourismforum.org/global/the-importance-of-responsible-tourism-for-the-society

STUDY UNIT 11: THE FUTURE OF TOURISM AND
TOURISM TRENDS
11.1 Introduction
11.2 Growth of tourism
11.3 Regional travel patterns and trends
11.4 External factors that affect or shape tourism
11.5 Tourism Market Trends
11.6 New Tourism trends
11.1 Introduction
In recent years we have seen and experienced so much. South Africa had a space tourist, we
hosted the World cup, the world’s first fully double Decker jumbo jet was launched, there is
talk of space flights becoming almost routine and affordable, we can down load music from
the internet onto our cell-phones and so much more. But, we have also seen wars, famine,
diseases, tsunamis, volcanos, the end of the Concorde and terrorism. All of this impacts on
tourism and illustrates what makes it great and also very fragile. In this chapter we briefly look
at the future of tourism.
• Explain tourism growth and the challenges facing tourism businesses

• Understand domestic, regional and international travel patterns and trends
• Describe the external factors affecting tourism
• Identify key future tourism trends
11.2 Growth of tourism
Tourism has expanded rapidly over the last 50 years. This has been due to economic
globalization, innovations in transport and ICT. These factors have made travel cheap and
accessible one of the key trends in tourism is that this growth is set to continue into the
foreseeable future. According to forecast the future of tourism is actually full of promise.

Table 11.1: Forecasts of international tourist arrivals worldwide and by region
Tourist arrivals (millions)
Regions 2000 2013 2030

Europe 390 563 744
Asia/Pacific 116 248 535
Americas 134 169 284
Africa 27 56 134
Middle East 19 52 149
World 686 1087 1089
Source: UNWTO: 2011 cited in (George, 2015: 440)
11.3 Regional travel patterns and trends
Europe: Europe is the world’s number one destination in terms of visitor numbers. Europe is
also the leader in intra-regional travel. However recent trends suggest that long-haul travel
outside of Europe is on the increase. Since the fall of the Iron-Curtain Eastern European
countries like Russia have also become major destinations.
Asia and the Pacific: the growth of travel in this region has been exceptional and a bright future
is predicted. It was predicted that by 2010 this region would rank second only to Europe in
terms of arrivals. China and its vastly expanding economy and fascinating history and culture
are one of the main destinations in the region. It also has massive potential to produce many
outbound tourists. Australia is also showing healthy growth in its tourism market.
South Asia: the most visited country in this region is India. Strong tourism growth has been
seen throughout the region except in Afghanistan. The top tourist-generating country is
expected to be Japan The America’s: the USA continues to be the world’s third most popular
tourist destination. Although most of these arrivals stem from inter regional travel coming from
Canada and Mexico. South and Central American countries show the most potential for
increased outbound travel.
Africa and the Middle East: Growth in this region is strong and this growth is expected to
continue for the foreseeable future. North Africa is dominated by Egypt. Egypt has strong ties
to the USA but also a strong regional market from other Northern African countries and the
Middle East. South Africa is the region’s most visited destination with tourist numbers
surpassing the 8-million mark in 2006.

11.4 External factors that affect or shape tourism
These factors can be divided into 2 categories
• Factors within our control and
• Factors outside of our control
These factors can be broadly grouped as follows:
• Changing Demographics
• Technological advances and changes- this include developments in information,

developments in transport and developments in destinations
• Political change – will continue to have an impact in tourism
• Sustainability the environment and ethics- as tourism growing by the day sustainability
issues becomes a concern
• Global security, safety and health-majority of tourist will try to avoid destinations which
are perceived to be unsafe.
11.5 Tourism Market Trends

Some of the most profound market trends changes can be summarized as follows:
• The radical changes in consumer preferences
• New tourism destinations
• Growing competition for tourists time
• Slow tourism
• Increases in medical tourism
• A search for new ways of achieving well-being by tourists
• The average level of education is increasing
• Increase in the number of independent travellers
• The emergence of the new upper class
• Changes in business, professional and conference travel
• More adventure travel

• More social conscience travellers
11.6 New Tourism trends
New trends in tourism will continue to emerge adding to the different types of tourism that we
already have. These are termed as special interest tourism (see Figure 17.1)
• Adventure tourism
• Cruise tourism
• Cultural tourism
• Education tourism
• Geo-local tourism
• Medical tourism
• Nostalgia tourism
• Religious tourism
• Responsible and ethical tourism
• Shopping tourism
• Brand tourism
• Urban tourism
• Volunteer tourism

• In this chapter we have explained how tourism has grown over the last 50 years and why
this has happened.
• We had a closer look at travel patterns and trends in different regions of the world
• We investigated what some of the external factors are that shape tourism
• Lastly we discussed some of the major trends emerging in tourism that will shape it into
the future

In class discuss why tourism statistics are important, what kind of statistics exist in tourism
and some of the applications of this information. (25) 11.8 Self-assessment and
activities
outcomes:
1 Explain the external factors that may impact on tourism. (5)

2 Why do you think South Africa is our region’s top destination? (10)
3 Name as many countries that you believe could become global players in the tourism
market in future. Give reasons why you mention them (25)
4 What impact do you believe virtual reality will have on the future of tourism? (5)
References
George. R. 2015. Managing Tourism in South Africa. Oxford George.
R. 2011. Managing Tourism in South Africa. Oxford
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Diploma in Travel and Tourism

Travel and Tourism Development 1

1.2 Basic Definitions of tourism ...................................................................................... 3

1.3 Interrelationships- Tourism, leisure and recreation ................................................... 5

1.4 Defining Tourists ...................................................................................................... 5

1.5 Significance of tourism ............................................................................................. 6

1.6 Measuring tourism flows .......................................................................................... 6

1.7 Tourist data problems .............................................................................................. 7

1.8 The nature of tourism ............................................................................................... 7

1.9 The tourism system.................................................................................................. 8

1.10 Conclusion ............................................................................................................... 9

1.11 Assessment and activities ...................................................................................... 10

STUDY UNIT 2: THE GEOGRAPHY OF TOURISM ......................................................... 11

2.2 The relationship between tourism and geography .................................................. 12

2.3 Core tourism resources and attractions.................................................................. 12

2.4 Examples of core tourism resources and attractor types ........................................ 14

2.7 Conclusion ............................................................................................................. 17

STUDY UNIT 3: MANAGING VISITOR ATTRACTIONS ................................................... 19

3.2 Defining and categorizing visitor attractions ........................................................... 20

3.3 The role of visitor attractions in the tourism industry............................................... 21

3.4 The management of visitor attractions ................................................................... 22

3.5 Future issues for attractions managers .................................................................. 23

3.6 Summary of the study unit ..................................................................................... 23

STUDY UNIT 4: MANAGING TRANSPORT FOR TOURISTS .......................................... 25

4.3 Demand for Tourist Transport ................................................................................ 26

4.4 Air transport ........................................................................................................... 26

4.5 Road Transport ...................................................................................................... 29

4.6 Rail Transport ........................................................................................................ 30

4.7 Water Transport ..................................................................................................... 30

4.8 Transport infrastructure .......................................................................................... 31

4.9 Summary of the study unit ..................................................................................... 32

4.10 Self-assessment and reflection .............................................................................. 32

STUDY UNIT 5: MANAGING ACCOMMODATION FOR TOURISTS ............................... 33

5.2 The nature of tourist accommodation ..................................................................... 34

5.3 The emergence of the modern ‘no-frills’ product .................................................... 35

5.4 Accommodation Demand ....................................................................................... 35

5.5 Quality and Grading ............................................................................................... 36

5.6 Summary of the study unit ..................................................................................... 38

5.7 Self-assessment and reflection .............................................................................. 38

STUDY UNIT 6: MANAGING TOURISM DISTRIBUTION ................................................. 40

6.2 What are Distribution Channels?............................................................................ 41

6.3 Intermediaries in Tourism....................................................................................... 41

6.4 Integration in the tourism industry .......................................................................... 42

6.5 The role and function of tour operators .................................................................. 43

6.6 The role of travel agents ........................................................................................ 44

6.7 The impact of ICT on tourism distribution ............................................................... 45

6.8 Summary of the study unit ..................................................................................... 47

6.9 Self-assessment and reflection .............................................................................. 48

STUDY UNIT 7: THE GOVERNMENT AND TOURISM .................................................... 49

7.2 The unique nature of the tourism industry .............................................................. 50

7.3 Tourism public policy framework ............................................................................ 50

7.4 Government involvement in tourism management ................................................. 50

7.5 Government tourism organizations ........................................................................ 51

7.6 Government tourism agencies in South Africa ....................................................... 53

7.7 Destination Marketing Organisations ..................................................................... 54

7.8 Summary of the study unit ..................................................................................... 56

7.9 Self-assessment and reflection .............................................................................. 56

STUDY UNIT 8: TOURISM PLANNING ............................................................................ 58

8.2 The importance of tourism planning for a tourism organisation .............................. 58