La Consolacion College Isabela

Burgos Street, Brgy. 4, Municipality of Isabela 6128, Negros Occidental, Philippines

Tel. Nos. +63(34) 3872146
Email: [email protected]

HANDOUTS
IN
THC 1 – MACRO PERSPECTIVE OF TOURISM AND HOSPI-
TALITY

UNIT # 5
TOPIC: THE NATURE OF TOURISM AND HOSPITALITY
Submitted to:

DR. JOHANNA GRACE J. UDTO

Subject Instructor

Submitted by:

GROUP # 1

YEAR AND SECTION: BSHM - 1B

MEMBERS:
Arrawiran, Christian Ted
Bessit, Aron Charles E.
Canicon, Julian Rose L.
Erlano, Cassandra D.
Garcia, Daisy S.
Gaviola, Erjhon G.
Insular, Edlance Gene M.
Lumogdang, Gian Carlo S.
Latoza, John Paul B.
Rivera, Ella C.
La Consolacion College Isabela
Burgos Street, Brgy. 4, Municipality of Isabela 6128, Negros Occidental, Philippines
Tel. Nos. +63(34) 3872146
Email: [email protected]

UNIT 5: THE NATURE OF TOURISM AND HOSPITALITY

Hospitality is a field that focuses on providing accommodation to visitors at hospitality-related
industries, such as hotels, motels, restaurants, cruise ships, country clubs, casinos, and convention
centers, while tourism is focused on providing quality attractions and events to entice tourists to
come.
On the other hand, when we talk about tourism, you articulate your emotions and senses. You
do not just mention the location, the building, and the food. You rave about the experience. For exam-
ple, when you talk about your trip to Tagaytay, you reminisce about the cool temperature; the beauty
of Taal Volcano; the taste of hot bulalo; and the buko pie you bought to bring home to family and
friends.

VISITOR EXPERIENCE
These experiences can inspire return visits, attract new visitors, and contribute to the long-term sus-
tainability of tourist destinations, it may also help the accessibility of information and communication
technologies (ICT’s) for the availability of more options enabling customization of tourism products
and services. Moreover, the shift to a consumer-centric economy has given tourists the opportunities
to co-design, co-produce, and co-evaluate their experiences (Disimulacion, 2018).
In conclusion, it has become imperative for stakeholders to collaborate in the creation of
tourism products and services that will match (and exceed) tourist expectations. Achieving this re-
quires coordination between and among the sectors of tourism which will, in turn, deliver value.

VALUE CHAIN
A value chain shows the most important activities that will deliver value and customer satisfaction. It
is composed of two categories: the primary activities and support activities that work together to
achieve an organizational goal. It also includes the mark on the cost to be incurred in providing the
product and/or service to the customers. (Thompson, Strickland and Gamble, 2010).
In the context of co-creation, co-production, and co-evaluation of tourism and hospitality prod-
ucts and services, the tourist has become a dominant voice in the value chain (Neubolet, 2016). This
has disrupted the traditional value chain through the active participation of the end-user (tourist)
driving the industry. This is the result of the ubiquitous internet, the availability, and accessibility of
information and communication technologies (ICTS).

CO CREATION
Prahalad & Ramaswamy (2004) introduced the concept of value co-creation referring to mutual bene-
fits that can be derived by consumer and the organization. The customer creates value when he is able
to actively participate in designing his experience. On the other hand, the company can generate real-
time feedback, target niche markets, create new products, improve branding, and increase revenues
(Piligrimiene, et al., 2015).

TOURISM VALUE CHAIN

Zhang, et al. (2009) define the tourism supply chain as:
A network of tourism organizations engaged in different activities ranging from the supply of different
components of tourism products/services such as flights and accommodations to the distribution and
marketing of the final tourism product at a specific tourism destination, and involves a wide range of
participants in both the private and public sectors.

TYPES OF ACTIVITIES
Generally, there are two types of activities in a tourism value chain, namely, primary activities and
support activities.
La Consolacion College Isabela
Burgos Street, Brgy. 4, Municipality of Isabela 6128, Negros Occidental, Philippines
Tel. Nos. +63(34) 3872146
Email: [email protected]

PRIMARY ACTIVITIES
These refer to the actual production, sales, and delivery of a tourism product to the customer. These
include the following:

 Itinerary, Information about the tour package inclusions and a contract (Travel agent)
 Air/land and water transport from the origin to their destination and back (Airline, bus and/or
cruise ship companies)
 Accommodations and meals (Hotels and/or resorts)
 Recreational activities (Cultural organizations/outfitters for adventure tours)
SUPPORT ACTIVITIES
These are the manpower, technology, and other resources necessary to facilitate exceptional service.
These include the following:
 Tour Operators
 Computer Reservations System (CRS)
 Global Distribution System (GDS)
 Information and Communications Technologies (ICTs)
 Local Tourism Board

HOSPITALITY VALUE CHAIN

The distinction between core activities and support activities is also applied in the hospitality sector.

PRIMARY ACTIVITIES
These include the following:
 Planning and Development
 Construction
 Marketing (loyalty programs. VIP relations)
 Sales
 Service Delivery (housekeeping, check-in/out, reservations)
 Operations
 Franchise relationships
 Property development
 Evaluation
SUPPORT ACTIVITIES
The following enables the sector to provide the core activities:
 Human Resources (recruitment, hiring, training)
 Maintenance
 Information and Communications Technologies (ICTs)
 Accounting
 Engineering
 Purchasing
 Legal
La Consolacion College Isabela
Burgos Street, Brgy. 4, Municipality of Isabela 6128, Negros Occidental, Philippines
Tel. Nos. +63(34) 3872146
Email: [email protected]

 Research

TOURISM SYSTEM
Tourism consists of several independent, but inter-related sectors, working together to achieve com-
mon objectives. Often presented as a web of inter-relationships, tourism is characterized by inter-de-
pendency, complexity, variety and change. To understand the dynamics involved, there are two funda-
mental ways to study the tourism process. You can analyze it by either looking at tourism as one prod-
uct, or as the totality of other sectors involved.

TOURISM AS ONE COMPOSITE PRODUCT

You can analyze the industry in its totality where each product or service complements the other.
However, the individual components are seen as one composite product.
To illustrate the differences between the two methods, imagine booking a vacation trip to
Paris. Your travel agent will prepare your flight itinerary which includes your airline ticket, seat as-
signment, luggage allowance, and other special requirements She will also reserve the airport trans-
fers, hotel accommodations, and tour package inclusions such as meals at pre-selected restaurants
and entrance fees to theme parks, and concert tickets.
Using the example above, you see the entire tour as one purchase. You perceive all sectors:
transportation, food and beverage, accommodations, and attractions- as one travel purchase.
Thus, if you enjoyed your trip, you will most likely say that the entire vacation (and all the indi-
vidual tourism components) was satisfactory. On the other hand, you may rate it as unsatisfactory
even if only one part of your trip did not meet your expectations.

TOURISM AS SUM OF INTER-RELATED SECTORS

On the other hand, you can view tourism as a sum of inter-related sectors. This means that you rate
each sector individually. Using the same example, you may still enjoy your trip, but the queue to see
the Eiffel Tower took longer than you expected, or that you consider the meals expensive, but not deli-
cious. Thus, your evaluation of your experience will be based on individual aspects of your trip.

SYSTEMS APPROACH
Leiper (1979) states that the five basic elements of the tourism process are as follows:
 Tourists
 Generating regions
 Transit Routes
 Destination regions
 Tourist industry operating within physical, cultural, social, economic, political, and technologi-
cal environments
Goeldner and Ritchie (2012) expanded Leiper's definition to include the processes, activities
and outcomes of tourism wherein the tourist is at the heart of the system. The tourist is seen as the ra-
La Consolacion College Isabela
Burgos Street, Brgy. 4, Municipality of Isabela 6128, Negros Occidental, Philippines
Tel. Nos. +63(34) 3872146
Email: [email protected]

tionale for tourism initiatives. The authors also presented eight tourism operating sectors that oper-
ate within the built environment and are affected by natural resources and the location.
 Attractions
 Accommodations
 Adventure and Outdoor Recreation
 Events
 Food and Beverage Services
 Transportation Tourism Services
Moreover, they state that the tourism system is the result of decisions based on management
strategies and tourism policies which are implemented. Feedback is used to analyze and plan future
action programs. Then the cycle continues as soon as feedback is received and planning begins anew.

TOURISM AS BOTH PRODUCT AND SERVICE

The complexity of the industry comes from its very nature. Tourism is both a product and a service.
The final tourism product enjoyed and experienced by travelers is a result of inputs from several sup-
pliers.

For example, a holiday itinerary usually consists of air, land. rail and/or water transport: meals and
lodging at a hotel, shopping at boutiques, visiting attractions, and possibly a trip to the theater, casino,
and a spa. All these add up to a tourism experience. And this tourism experience is highly intangible.
When tourism is viewed holistically, it is important to try to dissect which elements are tangi-
ble versus those that are intangible. This way, tourism organizations can maximize resources to en-
sure a positive visitor experience.

TANGIBLE TOURISM PRODUCT

In business, examples of tangible assets refer to buildings, machinery, equipment, land and inventory.
These are actual products with a physical existence. Therefore, tangible products are those that you
can see, touch, hear, feel, and taste.
From this definition, examples of "tangible products of a hotel includes the building itself, the
bed, mattress, linen and towels, the restaurants and the meals they serve; as well as the boutiques and
the products they sell.

INTANGIBLE TOURISM PRODUCT

Intangibles have no physical dimensions. Some examples of these are ambiance, brand, perception,
and reputation. More often than not, guests are more affected by the intangible elements and may
evaluate their trip based on these factors such as the following:
 Speed of check-in/check-out process at the front desk
 Friendly, knowledgeable tour guides
 Warmth and hospitality of the flight attendant
 Attention to detail of the conference organizer
 Brand and image
Although tangible assets can easily be quantified and sold; intangibles are generally linked to
customer satisfaction and loyalty. When you add up the memories and your experience at a destina-
tion, your verdict is heavily influenced by the "intangibles." A delay in your flight, a rude waiter, and
an inattentive tour operator may overpower your assessment of your trip.
La Consolacion College Isabela
Burgos Street, Brgy. 4, Municipality of Isabela 6128, Negros Occidental, Philippines
Tel. Nos. +63(34) 3872146
Email: [email protected]

CHARACTERISTICS OF TOURISM AS A SERVICE

The four characteristics of a service - intangibility; inseparability; variability: perishability: and sea-
sonality - add to the challenge of tourism product development, marketing, and distribution.

INTANGIBILITY
It is difficult, if not impossible, to taste, smell, touch, and see the product before it is purchased. Unlike
a product on a shelf that you can physically examine, you will have to rely on available tangible evi-
dence and/or reliable information to convince you of the quality of a tourism product. As a result,
tourism marketers are challenged with selling products with intangible characteristics like dream va-
cations and luxury accommodations.
On the part of the traveler, there is an inherent risk in purchasing a product that it is impossi-
ble to try out in advance. For example, you choose a specific airline based on what you know or what
you have heard. Although you are not purchasing the airline seat but the ability to travel from one
place to another, your decision will depend on your assessment of the airline. Influence from family
and friends may also affect your decision.

INSEPARABILITY
Production, distribution, and consumption happen simultaneously. This means that the tourism prod-
uct is directly linked to the tourism supplier. In a fine dining restaurant, customers expect high-levels
of service in a peaceful and quiet environment. Any distraction such as noise in the kitchen or kitschy
décor will be blamed on the establishment and will be considered inappropriate. In another example,
promoting the high success rate and reasonable fees for cosmetic procedures done in Metro Manila
will help improve the country's image as a destination for medical tourism.

VARIABILITY
Consistency is one of the keys to success in the tourism business. Any discrepancy will be seen as evi-
dence of poor service. This is a common problem with fast-food franchises. Customers have a negative
impression of a branch where the restroom is dirty, and the service is slow. Their perception of this
specific branch will affect their opinion about the entire organization.
On the other hand, the "halo effect" can positively influence decisions. A client selecting a venue
for their conference may decide on the basis of their observations of an ongoing event. However, the
execution of an event is highly dependent on the organizer, not necessarily the venue. Kotler, Bowen
and Makens (2010) stated that a "high degree of contact between the service provider and the guest
means product consistency depends on the service provider's skills and performance at the time of
the exchange."

PERISHABILITY
Unlike most products, services cannot be stored. A resort cannot put unused rooms in a warehouse to
be sold on another day. The concept of perishability is complicated by the seasonality of demand and
the behavior of front-line staff. A tour bus cannot keep its unsold seats during the rainy season to be
marketed during the Christmas holidays. The interaction between guests and the tour escorts can also
impact decisions to book future trips.

SEASONALITY
The unpredictability of demand and supply of tourism products and services affects, not only the
value chain, but the management and operations of enterprises (Evans, 2015). For example, activities
related to skiing heavily depend on climate, weather and topography of a destination. In another ex-
ample, attendance in festivals, which are based on religious and cultural traditions, inevitably lead to
higher hotel rates and overbooked flights.