The tourism industry, also known as the travel industry, is linked to the idea of people travelling to other locations, either domestically or internationally, for leisure, social or business purposes. It is closely connected to the hotel industry, the hospitality industry and the transport industry, and much of it is based around keeping tourists happy, occupied and equipped with the things they need during their time away from home.
Extra: How the Coronavirus Pandemic Has Impacted the Tourism Industry
What is the Tourism Industry?
So, what is the tourism industry? First, it is important to define what is meant by the ‘tourism industry’. Essentially, it refers to all activity related to the short-term movement of people to locations away from where they usually reside. It is one of the world’s largest industries and the economies of many nations are driven, to a large extent, by their tourist trade.
It is also a wide-ranging industry, which includes the hotel industry, the transport industry and a number of additional industries or sectors. It is vital to understand that the tourist industry is linked to movement to different locations, based not only on leisure, but also business and some additional travel motivators.
With that being said, according to the most common definitions, the tourism industry does not cover activities related to travel where the person intends to stay in their destination for longer than one year. As an example, this means that expatriates and long-term international students are not technically classed as tourists.
In simple terms, a tourist is a person travelling to another location, away from their usual social environment, for business, pleasure or social reasons. By most accepted definitions, to be classed as a tourist, a person needs to stay at that location for longer than 24 hours, but for no longer than one year.
Tourists may be motivated to travel by a range of different factors, such as refreshment of body and mind, or the pursuit of excitement, entertainment or pleasure. Alternatively, travellers may be driven by cultural curiosity, self-improvement, business, or by a desire to visit friends and family, or to form new relationships.
While business travellers are usually classed as tourists, it is worth noting that many definitions of the word exclude those who travel with the intention of making an income in the place that they travel to.
What Are the Benefits of the Tourism Industry?
Tourism offers a wide range of benefits, including economic benefits for countries attracting a large number of visitors, due to the money they spend not only on their actual stay, but also in local businesses. It also provides a large number of jobs for people working in the transport and hospitality industry, among others.
Moreover, tourism has the potential to improve relationships between nation-states or businesses, to create opportunities for entertainment and recreation, and to improve the value of a currency. It can also open up cultural exchange opportunities, while for tourists, it can lead to improved happiness, well-being and education.
What Are the Sectors Within the Tourism Industry?
The transportation sector is concerned with helping tourists to get where they need to go, via the provision of transport. This may include providing them with the means to get to their intended holiday destination in the first place, but may also include assisting them with getting around after they arrive at their destination.
Included within this sector are services related to road, rail, air and sea travel.
The airline industry plays a vital role in the modern travel industry, providing passengers with access to both domestic and overseas flights, allowing them to quickly reach their intended destinations via commercial aircraft. Airline services are generally divided into scheduled and chartered flights.
For many tourists, having access to a car is an important part of their tourist experience, ensuring they have the freedom to explore and travel freely. Car rental services provide this kind of access and often operate in close proximity to airports, or even in partnership with particular airlines or travel companies.
As the name suggests, the water transport sub-section is concerned with movement across the water. This includes things like ocean liners and ferry transport, where the objective is usually to get passengers from A to B, but also includes cruise liners, where being on the cruise liner itself forms the main part of the travel experience.
Coach and bus services are an important part of the tourism industry, offering long-distance travel, assisting airport passengers with travel to their accommodation, taking groups of tourists on day trips to local attractions or popular tourist destinations, and offering access to other nearby towns and cities.
Rail travel has played a key role in the tourism industry since the 19th century and continues to do so. Railways not only provide a means for travellers to get to their destination, but over ground and underground rail services also provide options for navigating many of the major towns and cities that tourists visit as well.
A new element of the transport sector – and one that will become increasingly important in the years ahead – involves the use of spacecraft to carry tourists into space. Indeed, Virgin Galactic, recently sent the VSS Unity spaceplane into outer space and is planning to offer commercial flights to ‘space tourists’ in the near future.
The accommodation sector is central to the travel and hospitality industry, because people travelling to different areas require somewhere to stay, rest, sleep and unwind. In fact, by many definitions, a tourist is only classed as such if their stay exceeds 24 hours and they use some form of overnight accommodation.
Within this subsection, there are a number of different components, ranging from the hotel industry to camping, hostels and cruises. These sub-sections are explained in greater detail below:
Hotels are the most obvious and popular form of accommodation for tourists and the hotel industry is inextricably linked to the tourism industry. Put simply, hotels provide paid lodgings for guests. With that being said, aside from beds and other essential facilities, the services they provide can vary quite drastically.
In more recent times, shared accommodation has emerged as a major option for tourists. One of the most popular services offering shared accommodation is Airbnb, where users are able to list spare rooms and rent them out to travellers on a short-term basis. These could be individual, private rooms, or common areas shared with others.
A hostel is typically a lower-priced accommodation option, suitable for those operating on a lesser budget, or those who are attempting to reduce their travel costs. It is a form of sociable accommodation, where multiple guests will rent beds in a shared space, typically with communal bathroom and kitchen facilities.
Camping is the practice of staying outdoors overnight, in a tent or similar type of shelter. While tourists may opt to camp in public areas, commercial camp sites are extremely popular and often more convenient. These commercial sites will typically charge for access, but will also provide additional facilities or utilities.
Bed & Breakfast
B&B accommodation offers a small number of rooms for guests and offers overnight stays and breakfast in the morning. In most cases, guests will have a private bedroom and bathroom, although bathroom facilities are sometimes shared. The owners or hosts of these establishments will often live in the bed & breakfast too.
Cruises also come under the accommodation sector, because cruise liners serve as a form of accommodation in their own right. Typically, on a cruise, travellers will be allocated their own cabin and the cruise itself will last a set length of time, with tourists staying on the cruise ship for the majority of the duration.
Farmhouse Accommodation and Agri-Tourism
Travellers are increasingly willing to stay in farmhouse accommodation, usually on a self-catering basis. This is linked to the idea of agri-tourism, where tourists visit farms, learn about the work that goes on there, and sometimes even participate in the daily work themselves as part of the travel experience.
Finally, time-share accommodation, also known as vacation ownership accommodation, refers to accommodation where ownership or usage rights are divided between multiple individuals. These individuals are allotted their own time frame – typically a week or two weeks out of the year – where they have the right to use the property.
3) Food and Beverage
The food and beverage sector has an interesting role within the tourism industry, providing tourists with essential refreshments at all stages of their travel experience, including during travel, when spending time in their chosen accommodation, and when they are out and about exploring the location they have travelled to.
In addition to catering for travellers’ basic requirements, however, the food and beverage sector also offers them opportunities to socialise, meet new people and enjoy themselves.
Restaurants or eateries provide one of the main ways in which tourists eat food and socialise on their travels. This category includes everything from fast-food restaurants like McDonald’s and KFC, through to family restaurants, and luxury restaurants offering high-end cuisine.
Catering is usually recognised as the provision of food services at more remote locations. Within this sub-section would be the various food and drink offerings found at hotels and other accommodation types, as well as on planes, cruise ships or trains. It also includes offerings at many tourist attractions or entertainment sites.
Bars and cafés are an important part of the local economy in many travel destinations, offering tourists a more relaxed location to consume refreshments, drink alcohol and socialise with locals or other tourists. They tend to be smaller than restaurants and may have a theme or serve a fairly general range of products.
Nightclubs are one of the single most essential parts of the food and beverage sector, providing travellers with entertainment during the night and actually attracting many tourists to some destinations in the first place. Indeed, some travel hotspots base their entire industry around the nightlife that is on offer there.
Some tourists travel to new locations in the pursuit of entertainment. Such travellers may be drawn to entertainment options that are not available in their home location, or they may simply require more general entertainment, which would be accessible almost anywhere in the world, as part of their trip.
Entertainment attractions or venues are sometimes the main things drawing travellers to a particular tourist location. On the other hand, many other entertainment offerings are set up to capitalise on existing tourism.
Casinos are an entertainment facility centred around gambling activities. The majority of these activities are games of chance, although casinos do also offer games where there is some element of skill involved. Additionally, casinos are commonly connected to hotels and may offer further entertainment, such as music or comedy performances.
In the modern travel and hospitality industry, tourist information exists both online and offline. Examples of online tourist information include informational websites highlighting local attractions, tourist sites or facilities. Meanwhile, offline services include tourist information centres and literature produced by the tourist board.
The retail industry and the travel industry are closely connected and most major tourist destinations will also provide shopping facilities. Shopping can even, in some cases, attract tourists in the first place, while the shopping sub-section of the entertainment sector also includes things like duty-free shopping and local market trading.
Tourist Guides & Tours
Tourist guides provide tourists with access to organised tours of local attractions, landmarks, educational buildings and other places of interest. In doing so, they are able to offer assistance, expert insight, and context, often making the experience more enjoyable, convenient and worthwhile for the tourist(s).
5) Connected Industries
Finally, there are also a number of industries that are either directly or indirectly connected to the tourism industry. These include industries based on actually connecting customers with travel services, as well as industries based on providing customers with important information that can assist them in their travels.
Some of the most notable related industries are detailed in greater depth below:
Financial services can be linked to the travel industry in a number of ways, with the most obvious being the provision of insurance products, which offer financial protection in emergency situations, or in cases where medical treatment is needed. Additionally, financial services may be connected to things like currency exchanges.
Travel agents sell travel or tourism-related products to customers on behalf of suppliers. They generally receive a commission from suppliers and also offer travellers advice on the best travel products to suit their particular needs or preferences. Some travel agents also offer business travel services.
Tour operators tend to sell package holidays, which combine multiple travel and tour services into a single product. A package holiday might, for example, include charging tourists for flights, airport transfers, a hotel stay, and services from a local rep. It could also include holiday experiences or a set itinerary.
Online Travel Agencies (OTAs)
Online travel agencies, or OTAs, offer similar services to other travel agents, although these services are delivered over the internet, providing more of a self-service experience. Some of the most popular OTAs include Expedia, Booking.com, Kayak and lastminute.com. These OTAs may also double as metasearch engines.
Tourism organisations are essentially organisations that exist to look out for the tourism industry and act on its behalf. They may have influence over national tourism policies, might lobby governments in the interests of the tourism industry, and could also work to bring the various sectors together.
Finally, the travel industry also increasingly includes an educational component, with many people travelling to attend conferences or exhibitions, which are often centred around specialised topics. Additionally, schools and training programmes form part of this sub-section of the travel and hotel industry.
Video Tourism Industry: Tourism and Economic Development
Travel agencies can be essential for maximising the number of customers a travel company reaches and attracts bookings from. However, different agencies specialise in different areas in the tourism industry and appeal to different types of customers. With this in mind, it is important to work with the right travel agency to further your strategic objectives.
Read “Travel Agencies: Find the Right Travel Agency to Boost Bookings” and you will be able to find out more about the value of travel agencies and access a list of some of the main platforms to try to partner with.
The Latest Tourism Marketing Tips
From social media sites to remarketing, the world of the Internet offers hundreds of ways for the travel and tourism businesses to connect with their niche audience. Just as the travelling needs and behaviour of tourists have changed, so has the way tourism businesses market their services. This is where tourism marketing plays an important role as an effective strategy to promote touristic services, such as hotels, restaurants, transportation, and destinations. To help guide you to make the right decisions regarding your tourism marketing plans, take a look at this article, ‘Tourism Marketing’.
Trends in Tourism: What You Need to Know
Tourism has evolved faster than ever before as the modern traveller is now caring more about their carbon footprint and their travelling needs. For businesses, emerging tourism trends are extremely important in order to remain relevant in this fast-changing industry. In the article ‘Tourism Trends: Opportunities for The Tourism Industry’, get to know all the latest trends that are playing a major role in the tourism industry.
The Emerging Technology Trends in the Tourism Industry
Technology has played a vital role in the tourism industry for over a decade now by helping businesses minimise costs, improve efficiency, and enhance the customer experience. Businesses as well as customers can highly benefit from technology trends for improved reservations, guest services, and communication. ‘Key Technology Trends Emerging in the Travel & Tourism Industry’ is an informative guide that explains the key tech trends in the tourism sector.
Revenue Management & Tourism Industry
Revenue management is highly relevant in the tourism industry as well as in airlines, restaurants, coaches, railway, cruises, and car rentals. This concept is about increasing profits and generating more revenue. Income growth can be multiplied in the hospitality sector if revenue management is adopted by all the company’s departments. After all, it’s all about selling the service to the right customer at the right time. The best examples of revenue management and its importance can be found in this article, ‘Revenue Management; clearly explained!’.
The tourism industry has a wide and deep impact on many other sectors that it’s involved in. From the infrastructure and the country’s economy to the cultural and social environment, tourism plays a vital role that you may not otherwise get in other industries. Working in tourism management opens up a world of new opportunities that are few and far between in other sectors. To get your career in the tourism industry started, make sure you read the article, ‘Tourism Management: All You Need to Know About Tourism’.
The tourism industry is extremely diverse, but plays an essential role in the economic prosperity of many countries. Tourists are typically defined as people travelling to locations away from their home, on a short-term basis, for non-financial reasons, and the tourism industry encompasses all services connected to this process.
How the Coronavirus Pandemic Has Impacted the Tourism Industry
The current COVID-19 global pandemic has redefined the term “business as usual” in regards to the tourism industry. As partial and even full lockdowns are now becoming commonplace, travel restrictions have likewise taken effect across the globe. This can be seen in the number of national and international events which have been cancelled. Examples include the UEFA Euro 2020, the 2020 Olympic games and the ITB Berlin Travel Trade show.
We also need to take into account the effect that COVID-19 has had upon the business sector. Organisations are now forced to deal with travel-related uncertainty and workers are understandably concerned about the current employment status. These scenarios have led to the cancellation of countless business-related trips. It is also not surprising that the number of individuals who plan on booking holidays will continue to decrease throughout 2020 and well into 2021.
We have therefore seen a knock-on effect in regards to tourism-related businesses. Airlines have been forced to reduce their flights by as much as 50 per cent. Restaurants and similar establishments are faring even worse; some experiencing a fall in occupancy rates by a staggering 90 per cent. A growing number are being forced to permanently close their doors.
Unfortunately, this revenue loss is further exacerbated due to ongoing operational costs. Countless firms within the travel industry are dealing with substantial cash flow problems and as such a global pandemic has never occurred on this scale, the ultimate outcome is far from certain.
In the category “Corona” you find a selection of tips which helps businesses operating in the hospitality and travel industry to recover and prepare for better times.
Want to Learn More About Related Industries?
The hospitality industry is part of the travel industry and the hotel industry is part of the hospitality industry. All of these industries have in common that they are large service industries in the world and increasingly important in the modern age. But what is the difference between the travel and tourism industry? And what are all hospitality sectors within the hospitality industry? In the following articles, you learn more about related industries.
More Tips to Grow Your Business
Revfine.com is a knowledge platform for the hotel, hospitality and travel industry with practical tips to optimise revenue. Hospitality & travel professionals use our tips to increase revenue, innovate processes and improve customer experience. You can find all travel industry tips in the categories Marketing & Distribution and Technology & Software.