Structure of Tourism Industry & Key Historical Developments

In this essay I shall discuss further about structure of the travel, tourism & hospitality industries with some examples of horizontal integration and vertical integration and also about the key historical developments that brings about socio- economic (leisure time, income/holiday taking, car ownership), technological (transportation) , and business development (airlines/air travel, tour operators, travel agent) that completely with examples. Last but not least, it ends with summaries. 2. ) Industry structure To begin with, what is industry structure?

It is structures that consist of integration which are horizontal integration and vertical integration and also comprise of tourism sectors partnership which are private sector, etc. Figurer . Show how tourism arks 7017 tourism/travelogues/rest By making connection which is combining part to make it works together is integration. For examples, to achieve success in hospitality it was all about integration that offering the better data quality in delivery, optimal connectivity, good business management and improved margins.

It is by integration to combine all the things together to earn benefit for company. Besides, there are 3 types of integration which are horizontal integration, forward vertical integration and backward vertical integration. Firstly, definition of horizontal integration is to take over their imitators or buy out the competitors company so it could control the industry to make it same level as they want. For an instance, when asset took over Go!

In 2002, it was a case of one budget airline taking over another no-frills airline. Although the two companies became one, they could have retained their different brand names. However, vertical integration is more into the backward supplier take over or forward integration distributor so it could control the materials which related to product that hard to makes competitor to compete so consumers would have no reason to complain about the different prices.

Whereas, the backward vertical integration are take over supplier and forward vertical integration are take over the distributor of its product. Some good example for backward vertical integration are tour operator buy/ own elements of package holiday and purchasing an airline, hotel group whereas the example of forward vertical integration is tour operator buying/creating own travel agencies. Figurer. Diagram of horizontal integration Figurer. Source page: http://www. Telltale. Com/forum/feathered. PH? Did=1076 Figurer. Graphic represent vertical integration Figurer. Source page: http://microeconomics. Brooks. Immemorial-Merger 2. 2 Private and Public Sectors Private sector is usually made up of organizations which are “private”, and this means they are not owned by nor part by government. All are small business, profit or non- profit, charitable organization, and middle to large entrepreneurship, are considers as private sector.

Also that private sector is profitable organization who aim to make profit from their business, for example; Hilton hotels. Public sector is basically composed as an organization which are owned or controlled by government and also it is managed by government which are play different roles to each country by establish, provide and distribute facilities that needed to increase the tourism in these countries. Also define as non-profitable organizations who aim to provide education and services to people, for example tourism information.

Besides, the is those who are in public sector are usually supply to the public and they are not competing with any other organization for profit, on the other hand that private sector are those who are competing with other organization and have a goal to overtaking their competitor to gain profit. 2. 3 Voluntary Sector Voluntary sector is consist of all activities and services which provided as a lingering, which is refer to unpaid work and also describe as a non-profitable organization who rely on sponsorship and membership income.

Besides, in the tourism industry volunteering can offered in relation to sport tourism, religion/ culture tourism, among others. In generally, to express the support for community, city or neighbor people tend to do voluntary Job by helping visitors especially during local celebration or event, for example the Olympic games, another is educational and cultural activities for foundations, museums, schools or research centre, many f which are often financed on the base of private donations. This sector also called as third sector, in reference to private sector and public sector. . ) Key Historical developments Socio-economic Leisure time was classify as time available for ease and relaxation, it is a time when are not require to have work, paid leave entitlement, free from duties and responsible, all of which are different between every country. Leisure travel is a kind of travel that is not related to business or study. Leisure travel is a great way to take advantage of extended leisure time, such as vacation weeks, school breaks or detriment. There are many competing claims for leisure time and discretionary income in the vicinity of home.

However, leisure time is important for tourism as it is increase, the tourist industry of the country will be increase as well. Graphs . The graph shows Finland leisure trips abroad, cumulative accumulation monthly 2009- 2010, and preliminary data Graphs . Source: Finnish Travel, Statistics Finland Graphs. The graph shows that Russian citizen who went on holiday abroad which is on holiday means that their leisure time, therefore leisure time is important to tourism. Graphs. Source page: http://into. Org. /news/geography-of-leisure-and-tourism/ Compare the relation between domestic tourism and income of resident in China. Tablet . Domestic Tourism Source: Compiled by National Bureau of Statistic of China, China statistic yearbook 2009. Since the tables show an uptrend which explains that when the income of resident increases the development as well as the domestic of tourism was increased. Tourism are become more and more popular as the income of people increased. The ownership of car on the road are rising since sass as the production started to make small, lighted, and cheaper transport for wider the market.

Not surprised that private ownership car has become one of the popular travel habits than any other. It provides traveler a particular freedom movement, with the increased opportunities of to take a pleasure tour as well as longer trips. Besides, car ownership are more likely take into direct cost for motoring trip only, rather than the full cost. Thus, private car or car transport are ideal over the travelers and public transport. Graph 3 shows that global car ownership from 2000 to the prediction till 2040 are going to keep on increasing.

Graph 3 Source: Goldman Cash/Economist 4. Technological transportation In this fast pace society technology is very common to everyone which are nowadays technology are fast way more advance than we realize. Whereby the fastest improve of technology is transportation. There 4 common transportations today which are: Air travel has changed the way people view time and distance. Nowadays, air transport has become the most important contribution to the tourism industry. We find the airline industry has grown from a miniature to a giant.

While the world airline industry is huge, it is facing many challenges. Such as, low-cost carriers are rowing, threatening the major carriers, and making a return to profitability a more difficult task. Air transportation is still the main supplier for tourism industry which is because it effectively connects countries together and the facilities that it provides. However, there are many kinds of airlines nowadays from the usual to unusual which means the incredibly advance, for an instance; AWAY, MDI 1, 8777 and 8787 etc.

In future technology will become more and more advance as well as the today air transport. Sea transport is an oceanic organization group involved in design, build, owning and operation of industrial vessels. Although ships have been a means of transportation since early times, the cruise industry is young. Its purpose is really to provide a resort experience rather than point to point transportation. Though the modern day of transport which by built up the big ships in order to enlarge the passenger liner.

As inside the cruise it has everything, such as hotel, swimming pool, cafe, luxury restaurants, sport centre, movie theatre, etc. By the combination of development of tourism industry sea transportation has become more popular among the people. Though, growth has affected not only passenger and ship capacity, but the ports of embarkation as well. Still, the cruise industry performance and satisfaction are the leader for the rest of the travel industry. Most of the travel in the world takes place in the automobile.

In the United States, auto travel is a basic part of the travel industry with the great majority, 79 percent of US domestic person-trips being taken by car, truck, camper/REV, or rental car. Affordability, flexibility and convenience make auto travel the most known-well mode of transportation all over the world. The road transportation has played an even ore important role in travel because of the trend is to change air travel to road travel and to take trips closer to home. Besides, people’s attitudes are very favorable toward travel by road transportation.

The key feature of road transportation is immediate accessibility and convenience. Rail transportation improves a lot. Railways began reappearing in Europe after the Dark Ages. The earliest known record of a railway in Europe from this period is a stained-glass window in the Minster of Firebug in Barrels in Germany, dating from around 1350. Consequently, ultramodern railway systems with high speed trains operate in many countries, handling passenger traffic in an economical and efficient manner and providing an alternative to air travel.

France and Japan are well-known for their high speed trains. Whereby France has been willing to sponsor its rail system whereas Japan continues to improve and expand its famous “bullet train”. Therefore, for tourism industry it could be another good development on it. 5. ) Business development Air travel continues a large and growing industry. It makes easy the economy growth, world trade, international investment and tourism and therefore it became centre of liberation in taking place of many others industries.

Business travel has also grown as companies become increasingly international in terms of their investments, their supply and production chains and their customers. In the comparison of air travel from decades ago and today, business travel was way much different compared to today which means that today air travel was way convenience, easy and fast to get. Some example is that internet, it helps people to book tickets directly, check on the airfare anytime, choose own convenience seats, etc, which is all are easy and fast.

These all was not available in many years ago but now. The fast growths of world trade in goods, services and international direct investment have also contributed to growth in business travel (Boeing, 2000). In order to understand how For profitable transport aircraft manufacturers, the customers are the airlines. For business aircraft, military programs, or recreational aircraft, the market performs pretty differently. Thus, the airlines have to identify the need for radical change to make sure their survival and prosperity.

Many have tried to reduce the cost insistently in order to cut the ability growth and to increase load factors. At a time of endowed economic growth, such actions have returned the industry as a whole to success: DATA airlines’ profits were $ban in 1996, less than 2% of total income. The below of the level DATA believes is needed to reduce their debt, build reserves and maintain the investment level. In addition, many airlines remain unprofitable. 5. 2 Tour Operator Tour operators are defines as business organization engaged in planning, preparing, and marketing and operating vacation tour.

They may work with all part of the tourism industry to negotiate tariff, block space, and coordinate many details found in tour package at an comprehensive price. These tour businesses holds a certain charm for many people who like to travel and think that they would like to arrange and package travel and tourism services for others. However, it becomes quite critical for successful tour operator to control cost, competitively price the packages they offer, and market these packages to the appropriate target market.

Collect a package that interests consumers and then pricing it competitively becomes a tricky issue since tour operators must work with a very thin mark-up, usually 20% or less. Getting out the word on tour packages is also challenge as most tour operators must develop heir marketing operation on limited budget. Therefore, market segmentation and targeting are crucial to continued success. 5. 3 Travel Agent As the technology has changed, travel agencies still provide important sales and information links between tourism service supplier and the traveling public.

Whether through personal touch or online point and click border, travel agent act as a focus around which much if not most of the sales and reservation activity in the travel industry centre. Travel agencies have now become the department stores of the tourism industry. Individuals filling the travel agent role offer a wide variety of revises, including provide information to travelers, making reservations, ticketing, and securing other services and travel related document for them. The travel agents become better than before, they organize everything that the customer needs.

Thus, tourist do not need to worry lose themselves when they travel to new place. The numbers of china tourists who travel with travel agents increase 150 million to 260 million from 2006 to 2009. That means people are willing and interesting to go to travel, because travel is easier than before. 6. ) Conclusion Overall, tourism industry is defined as industry that deals with people who travel room their own country to another country in order to trip. Likewise, in tourism industry transportation (e. G. Air, sea, road and rail) plays the most important role. As the leisure time, incomes, etc.

Whereas, business development of the air travel has make easy the economy, world trade, international investment, and tourism. Besides, tour operator and travel agencies has also make tourist increase because of the easy travel that they offer. Whereby, through this process of the assignment I did learnt a lot which are from collecting data by looking for a good point seems easy actually is not as easy as I thought. Needed a lot of time to understand and write it to the easy way whereas there are many different definitions so it was quite complicated at the first time of doing it.