Unit 1

INTRODUCTION TO TOURISM

INTRODUCTION The concept of Tourism is based on making travel from one place to
another comfortable, in terms of travel, food and accommodation. The studies carried out
in the field of tourism reveal that travel and tourism had been an important social activity
of human beings from times immemorial. Man has been fascinated by travel to distant
places from the earliest historic period but modern tourism, which is distinguishable by its
mass character, started only in the 1950’s and since 1970’s it continues to grow
exponentially. By 1990, tourism ripened into the world’s third most important industry
and by 1995.tourism evolved into one of the largest and fastest expanding industries of
the world, which makes up a higher contribution to the value of world exports than all
other sectors, except crude petroleum and petroleum products.
TOURISM: THE BASIC CONCEPT The concept of Tourism is based on travelling
from one place to another comfortable, in terms of travel, food and accommodation. In
the early days, people travelled from their home to places of worship, on a pilgrimage or
to escape persecution. They also travelled for reasons such as famine. The Puritans left
England to escape the harassment of Queen Mary. Similarly, the Irish left Ireland in large
numbers because the potato crop was afflicted by blight and people had no food to eat.
However, things have changed since then, with rapid advances in science and technology
and a greater sense of tolerance. Nowadays, people travel more for pleasure than to
escape famine or religious persecution.
Early man travelled under compulsion, primarily to satisfy his biological needs. In
later ages, the emergence of various empires led to travel for political, business and
religious purposes. Travelling in olden times was difficult due to lack of proper transport
facilities, safety and comfort en route. Time and cost were the other major constraints.
Travel became a little organised for religious purposes. The development of roadside
sarais, inns and dharamshalas made business travel, political visits and journey for the
sake of knowledge easier.
As technology and science advanced in leaps and bounds coupled with
industrialisation, it led to economic and social progress. The spread of education also
fostered a desire to travel. There was great progress in the air transport industry and
tourist facilities, which led to the phenomenal growth of tourism. 880 million people have
travelled in the year 2009, ranking tourism as one of the largest, if not the largest
industries of the world. Tourism contributes to the development of understanding among
people, provides employment, creates foreign exchange and raises the standard of living.
For many countries, it has become one of the main forms of sustaining their economy.
Tourism is concerned with pleasure, holidays and travel. These motivating factors make
people leave their usual place of work and residence for short-term temporary visits to
other places.
Modern tourism is one of the most striking phenomena of our times and offers us an
opportunity to enrich humanity and to identify what may be termed as goals for a better
life and a better society. As an industry, the impact of tourism is manifold. The tourism
industry nourishes a country’s economy, stimulates the process of development, restores
the cultural heritage and helps in maintaining international peace and understanding.
Tourism at present is India’s third largest export industry. 5 The most significant feature
of the tourism industry is the capacity to generate large-scale employment opportunities,
even in backward areas, especially for women - both educated and uneducated. Another
important feature of tourism is that it contributes to the national integration of the people
who live in different regions of the country with diverse cultures and languages.
TOURISM: MEANING AND DEFINITION It is difficult to define tourism exactly.
For some, tourism is an industry; for some, it is an activity. If an industry is defined as a
collection of a number of firms that produce similar goods and services in competition
with each other, then tourism cannot be conceived as an industry, because tourism offers
complementary services. Tourism is not an industry; it would be better to call it an
activity. It is an activity that takes place when people move to another place for leisure or
for business and stay there for at least 24 hours. Tourism and travel are not synonyms. All
tourism involves travel but not all travel is tourism. All tourism occurs during leisure time
but not all leisure is given to tourist pursuits. Tourism means the business of providing
information, transportation, accommodation and other services to travellers. The travel
and tourism industry is made up of companies that provide services to all types of
travellers, whether travelling for business or pleasure. Tourism moves people from one
region of the world to another. It may be said to be a ‘dream machine’. It helps realise a
dream or fantasy of the tourist.
Tourism is unique. It involves an industry without smoke, education without a classroom,
integration without legislation and diplomacy without formality. Francis Bacon aptly
remarked, "Travel in the young sort is a part of education and in the elder, a part of
experience”. Tourism, as a form of education, is a part of civilised existence. Tourism
allows people to escape from their routine humdrum of life. Mark Twain said, “Even
heaven can be boring after a while”. Thus, the human animal needs change if it is to
operate at optimum levels; travel provides that change. However, the level of satisfaction
achieved from tourism depends on the age, health, energy and background of the
individual. The younger and better educated travel more than the elderly and the less
educated. There are three reasons that necessitate the accurate definition of tourism:
1. In order to describe tourism phenomenon systematically for the purposes of study, it is
necessary to define what it covers.
2. In order to measure any phenomenon statistically, it must be defined clearly.
3. Definition of tourism is also necessary for legislative and administrative purposes since
legislation may apply to certain activities alone and not to others.
Although travelling is perhaps as old as the human civilisation itself, one of the earliest
available definitions of tourism was provided by Hermann V. Schullard, an Austrian
economist, as late as in 1910. He defined tourism as “the sum total of operators mainly
of an economic nature, which directly relate to the entry, stay and movement of
foreigners inside and outside a certain country, city or region”. A couple of Swiss
Professors, Hunziker and Krapf, provided a more technical definition in 1942. They
believed that tourism is the totality of the relationship and phenomena arising from the
travel and stay of strangers, if the stay does not imply the establishment of a permanent
residence and is not connected with a remunerated activity. Burkart, A.J. and S. Medik
provided yet another definition of tourism by saying: “Tourism denotes the temporary,
short-term movement of people to destinations outside the place where they
normally live and work including their activities during their stay at these
destinations”.
To achieve these ends is not new but tourism is of a relatively modern origin. Tourism
is distinguishable by its mass character from the travel undertaken in the past. This is
largely a post World War II phenomenon. Until recently, only affluent people participated
in tourism. Increased leisure, higher incomes and greatly enhanced mobility have
combined to enable more people to participate in tourism. Revolution in transport,
technological progress and the emergence of a middle class with time and money to spare
for recreation, has led to the growth of tourism, ‘the modern holiday industry’. Thus,
 tourism is no longer the prerogative of a few but is an accepted part of life of a large
number of people.
In Sanskrit literature, there are three terms for tourism with the suffix ‘atana’,
meaning leaving home for some other place. These are:
• Paryatana: going out for pleasure and knowledge
• Deshatana: going out of the country primarily for economic gains
• Tirthatana: going out to places of religions merit
According to the Oxford Dictionary, tourism is ‘travelling for pleasure’. It
involves discretionary use of time and money. On the other side, a completely different
social aspect of tourism can be described as “A social movement with a view to rest,
diversion and satisfaction of cultural need”. From this social aspect of the definition, an
all encompassing most general definition of tourism can be derived. Tourism can be
considered as “Exploration of all that is unknown in all spheres of human activity and in
all aspects of nature”.
An amalgamation of these definitions brings out the following distinct elements of
tourism:
1. Involvement of travel by non-residents
2. Stay of temporary nature in the area visited
3. Stay not strictly connected with any activity involving earnings The word tourism
relates to tour derived from the Latin Word ‘Tornus’, which means a tool for making a
circle. Tour is also a Hebrew word derived from the term ‘Torah’, which means learning,
studying or searching. Thus, tour means an attempt by a traveller to discover something
about a place.

THE TOURIST

The ‘League of Nations’ did some pioneering work in providing a statistically measurable
definition of a tourist. It defined the term ‘foreign tourist’ as “Any person visiting a country,
other than that in which he usually resides, for a period of at least 24 hours”.

The following persons are considered tourists within this definition:

1. Persons travelling for pleasure, for domestic reasons, for health etc.

2. Persons travelling to meetings or in a representative capacity of any kind (scientific,

administrative, diplomatic, religions, sports etc.)
3. Persons travelling for business purposes.

4. Persons arriving in the course of sea cruise, even when they stay for less than 24 hours.

The following categories were not to be recognised as tourists:

1. Persons arriving, with or without a contract of work, to take up an occupation or engage in

any business activity in the country

2. Persons coming to establish a residence in the country, a student or young person bonding
with an establishment or school

3. Residents in a frontier zone and persons domiciled in one country and working in an
adjoining country

4. Travellers passing through a country without stopping even if the journey takes more than
24 hours.

The International Union of Official Travel Organizations (IUOTO) in 1963 has described a
‘visitor’ as any person visiting a country other than that in which he has his usual place of
residence, for any reason other than following an occupation remunerated from within the
country visited.

This definition covers the following:

1. Tourists, i.e. temporary visitors staying at least twenty four hours in the country visited and
the purposes of whose journey can be classified under one of the following headings: •
Leisure (recreation, holiday, health, study, religions and sport) • Business, family, mission,
meeting

2. Excursionists, i.e. temporary visitors staying less than twenty four hours in the country
visited (including travellers on cruises).

In India, statistics does not include the following: • Nationals of Pakistan and
Bangladesh • Nationals of Nepal entering India through land routes • All foreigners
entering India from Bhutan by land.

TYPES OF TOURISTS

There are different types of tourists:

 Intrinsic Tourists: They are into holidaying for the sake of enjoyment
 Extrinsic Tourists: They have reward oriented motivation. These tourists are susceptible to
the activities where performance is evaluated.

 Adventurers: They give very little importance to relaxation. They are always up to
exploring places and taking challenges. Mainly youths and singles from both genders
carrying zest of life largely contribute to this type of tourism.
 Budget Travelers: They are economy-oriented tourists. Their touring decisions about
places, travelling mode, and other related factors are largely dependent on their
financial status.
 Homebodies: They are mainly relaxed tourists. They do not get into adventure. The
tourists aged above 45 to 50 years belong to this type. The busy professionals under
45 years also belong to this type.
 Moderates: They plan their tour ahead, have a high inclination towards tourism but
they do not get into sports or adventure activities.
 Vacationers: They plan touring during vacations such as summer break or Christmas
break. They are not always sure of where and why they wish to visit.

PSYCHOLOGICAL DIMENSIONS AND THE MOTIVATIONS OF TRAVEL:

The fast-paced growth and emerging dimensions in Indian tourism and challenges posed are
due to globalisation and liberalisation. The new trends in the tourism markets compel all the
destinations to develop new products and product strengths with their own unique attractions
that motivate tourists to undertake travel. On tracing the history of travel over the centuries, it
is quite evident that the main motives for travel have not changed much over the years. These
have remained the same; only the scope and the intensity of travel have changed.

All those factors that create a desire in a person to travel to place other than his usual
residence can be understood as Travel Motivators. They are the internal psychological
influences affecting individual choices. Motivations for travel incorporate a broad range of
human experiences and behaviours. A brief list of travel motivations might include rest and
relaxation, recreation, excitement, social interaction with friends and relations, adventure,
physical challenges and escape from routine work and stress. As stated earlier, during the post
World War II period, mass tourism received much impetus, which also saw an increase in the
studies conducted in the subject of travel motivators. Basic travel motivators may be grouped
into the following four categories.

 Physical Motivators
 These are associated with physical relaxation and rest, sporting activities and specific
medical treatment. All are connected with an individual’s bodily health and well-being.

 Cultural Motivators

These are connected with an individual’s desire to travel, in order to learn about other
countries people in those countries and their cultural heritage, expressed in art, music,
literature, folklore etc.

 Interpersonal Motivators

These are related to the desire to visit relatives, friends; to escape from one’s family,
workmates or neighbours; to meet new people and forge new friendships or simply to escape
from the routine and stress of everyday life.

 Status and Prestige Motivators

These are identified with the needs of personal esteem and personal development. These are
related to travel for business or professional interests, for the purpose of education and the
pursuit of hobbies.

The above discussed categories can be further sub-divided and explained under the following
heads in order to facilitate in depth the understanding as to why increasing number of people
are undertaking travel in the modern world today:

1. Pleasure

2. Relaxation

3. Health

4. Participation in sports

5. Curiosity and Culture

6. Ethnic and family

7. Spiritual and Religious

8. Status and prestige

9. Professional or business

Some of the motivations cited with respect to modern tourism can be enumerated as follows:
1. The discovery of places and countries with different geographies, lifestyles, cultures and
language for the purpose of studies or for sheer enjoyment is a prime motivation.

2. Divine service as a travel-motivating force subsists in journeys to sacred religious places

and pilgrimages.

3. Participation in events of religious or secular authority manifests itself today in the form
of travel to political meetings and ceremonies.

4. Rest, relaxation, medical care or treatment of diseases may be the objects of travel to
different places where there is natural or medical care.

5. Travel for the enjoyment of the beauties of the landscape has undergone modifications,
both in the conception of what is beautiful and in the expression of sentiment.

Another very important motive behind travel can be enjoyment or participation in sporting
activities. This includes travel for the sake of travelling or the joy felt in motion. In fact, this
is only one sports activity, projected on the travel screen, in addition to the numerous other
motive forces connected with sports for which landscape and nature provide the setting for
the best possible practice and exercise.

TOURISM: TYPES, FORMS, PRODUCTS AND ATTRACTIONS

Tourism industry has seen unprecedented growth in various countries of the world,
especially in the last 25 years. The trends continued to show remarkable increase, especially
in the case of International Tourism, in spite of temporary fluctuations and slowdowns due to
economic and political reasons. In the year 2000, there were an estimated 698 million
international tourists and 1.6 billion international tourists are forecast by 2020. Expansion of
tourism affects all regions, including remote and sensitive areas such as islands, coasts and
new mountain areas as well as species, rich and protected areas and urban areas.

Further, it is important to note that environment based tourism is a growing segment

in tourism industry. The statistics of tourism growth underline the large and growing
pressures that tourism is placing on the environment and biodiversity. The quality of the
environment, both natural and man-made, is essential to tourism. However, tourism's
relationship with the environment is complex. It involves many activities that can have
adverse environmental effects.
 The causes for these impacts can be attributed to construction and development of
large-scale infrastructure and superstructure facilities such as airports, hotels, commercial and
entertainment complexes etc. The negative impacts of tourism development can gradually
destroy the environmental resources on which it depends.

On the other hand, tourism has the potential to create beneficial effects on the
environment by contributing to environmental protection and conservation. Tourism has
proven to have positive impacts too in certain aspects by way of increasing awareness on the
importance of environmental conservation by financing conservation and protection projects
in some areas, thereby increasing their economic significance.

FORMS OF TOURISM

Tourism can be described as the activities of persons travelling to and/or staying in places
outside their usual environment for leisure, business or other purposes (including visits to
friends and relatives). Tourism may be planned and/or organised in two main ways:

1. Self-Organised Tour: Here, the tourist himself organises the tour and makes necessary
arrangements and reservations for the tour directly or with the help of a provider of tourism
services, such as either a tour operator or a travel agency.

2. Pre-Packaged Tour: A package tour is a pre-arranged combination of not fewer than two
of tourism services when sold or offered for sale at an inclusive price and when the service
covers a period of more than 24 hours or includes overnight accommodation when transport,
accommodation and other tourism services are not ancillary to transport or accommodation
and accounting for a significant proportion of the package tour.

 Mass Tourism It involves tourism of organized large groups of people to special

tourist locations. It is a traditional way where the daily program is fixed by the tour
organizer. It is a social activity. The tourists generally desire for souvenirs and site-
seeing. For example, religious places, theme parks, boat cruises, resort towns.
 Alternative Tourism It includes individually organized tours to find first-hand
information about a place, local culture, and environment. For example, biking tour
planned by an individual while accommodation is catered for on the go.
 Business: It is touring for conducting business transactions, attending business
meetings, workshops, or conferences. The objective of business tourism is mainly
professional.
  Pleasure: It includes tourism for improving one’s physical or spiritual well-being. For
example, vacation at a Yoga or rehabilitation center.
 Nature: It is tourism at places famous for pristine nature and serene beauty. The main
objective is to experience and enjoy nature such as farms and wildlife.
 Ecotourism is a part of nature tourism. Cultural: This type of tourism has an
objective of understanding the local history of the place, foods, local productions, and
local culture. Social: It includes tours conducted among relatives, friends, and others.
 Recreational Tourism: It includes travelling to escape from routine life. This is often
done for enjoyment, amusement, or pleasure. For example, Camping or beach visit.
 Active Tourism: It is conducted with a clear objective such as climbing a mountain,
touring around the world, or learning local culinary arts or languages.
 Sports Tourism: It is tourism for attending some sports event such as World Cup
Cricket Match, FIFA, or Olympics.
 Religious Tourism: It involves travelling to places of religious significance such as
Vaishno Devi in Jammu-Kashmir and Golden Temple at Amritsar (India), Mecca in
Saudi Arabia, Bethlehem, and other such places.
 Health or Medical Tourism: It involves travelling to improve one’s health. It is with
the objective of visiting weight-loss camps, naturopathy centers, and health resorts.
 Adventure Tourism: It involves tourism for adventurous activities such as rock
climbing, bungee jumping, sky-diving, hiking, horse-riding, surfing, rafting, or skiing.

Factors Affecting Tourism

There are many factors that influence the running of the tourism industry. Some show
immediate effect while, there are also factors which affect in the long run.

 Environment at Destination: Tourism is in its best form when the destination boasts
of conducive climate. In contrast, any undesired changes in the environment such as
high winds, flash floods, drought, and extreme climate can affect tourism adversely.
For example, during harsh summer months in India, people prefer to travel to colder
climate regions like hill stations.
 Economy of the Country: When a country is undergoing economic turbulence and
when people are facing unemployment issues, tourism is affected adversely. On the
contrary, when a country’s economy is doing well and people can afford to spend
money on leisure, tourism progresses.
  Historical or Cultural Importance of Destination: The place or destination of
travel affects the tourism business to a great extent. If the destination is of great
historical or cultural significance then tourists will certainly like to visit the place for
seeing monuments, castles, forts, ancient architecture, sculptures, caves, antic
paintings and utensils, clothes, weapons, ornaments, and other allied heritage. For
example, the world famous places of historical and cultural importance are Taj Mahal
(India), Pyramids of Gaza (Egypt), Began City (Burma), Acropolis (Athens, Greece).
 Research Importance of Destination: There are tourists who visit places with the
objective of studies and exploration. Need for research promotes tourism.
Archeologists, Geologists, Oceanographers, Biologists and Zoologists, Architects,
and People researching Arts and Cultures seek places that have great significance in
the field of research.
 Religious Importance of Destination: The places of religious importance or worship
are always flooded with tourists. At these places, tourism is at its peak at particular
time periods in a year. The tourists often go on pilgrimage to find inner peace and
invoke blessings of the deities they worship and to cleanse their sins before death. For
example, Mecca, Bethlehem, Kashi.
 Technology :Internet has penetrated to almost every corner of the world. Tourists are
enjoying the benefits of Internet. While planning a tour, the tourists try to get the idea
about the places they are going to visit, the quality of amenities and services, and the
attractions at the destination. After visiting a destination, the experienced tourists
share their opinions on various platforms of the Internet. Thus, the reviews of
experienced tourists shared on the internet work as guidelines for the following
tourists. Hence, just like a double-edged sword, the Internet can boost as well as bring
down the tourism business.

Destination Awareness

Destination is the basic component of tourism. Identifying and capturing the essence of the
place is vital for the tourism business to do well. If an attractive place is turned into a
destination, the place generates high revenue from tourism. Today, Destination Management
is an important subject in tourism studies. It focusses on the development and management of
destinations to provide highly satisfying experience to the visitors without hampering the
local culture and environment.
What is a Tourist Destination? A tourist destination can be a city, town, or other area. It is
dependent on the revenues accruing from tourism. It is marketed or markets itself as a place
for tourists to visit. It may contain more than one tourist attractions. For example, Roros,
Norway is a destination with the label of mining town since last 85 years.

How Can a Destination Attract Tourists? A tourist destination has certain characteristics
that attract tourists to spend time there. It can attract tourists for its inherent or exhibited
natural or cultural value, historical significance, flora and fauna, natural or built beauty,
offering leisure, adventure and amusement. The following factors shape the destination
appeal:

The following factors shape the destination appeal:

The Five A’s

The following five A’s define the tourist needs and demands:

Accessibility It is the ability to reach to a place of destination by opting one or multiple

means of transportation. The transportation should be timely, convenient, inexpensive, and
safe. Today there are various means of transportation like airlines, railways, surface
transportation, and water transportation.

Accommodation It is a place where the tourists can avail food and shelter on payment.
Today, a wide range of accommodations are available ranging from a basic budget
accommodation to elite class seven-star hotel suites.

Attraction It is a place of interest where tourists visit, typically for its inherent or exhibited,
natural or cultural value, historical significance, or natural or artificial beauty. The attraction
creates a desire to travel to a specific tourist destination. They also offer leisure, comfort,
adventure, or amusement. For example, Paris draws tourists by offering Fashion as attraction.

Activities Activities are what the tourists perform for fun and amusement. For example,
boating, scuba diving, canoeing, camel riding, and visiting a place.

Amenities Amenities refer to the beneficial services offered to the tourists like visitor
information centers, telecommunications, roads, drinking water, toilet blocks, garbage bins,
etc.
Types of Tourist Destinations:

There are various types of destinations as given below:

 Centered Destination It is the most common type of tourist destination, where

tourists spend most of their time on occasional excursions to nearby places of
attraction. For example, Andaman Island is a centered destination.
 Base Destination It refers to that type of destination where tourists need to travel and
explore surrounding region. For example, Sossusvlei Desert Camp of Sesriem is a
base destination from where tourists can explore the nearby desert mountain dunes
and Sesriem river canyon.
 Multi-Centre Destination Here the destination comprises two or more destinations
of equal importance. For example, India is a multi-center destination where each
Indian state or region offers different culture, nature, and culinary experience.
 Touring Destination A touring destination refers to a place to visit as part of linear
itinerary.
 Transit Destination It is a place of a brief halt en-route while the tourists are heading
towards the final destination. For example, Abu Dhabi is a transit destination where
tourists take a short break for going to Cape Town, South Africa.

STRUCTURE AND COMPONENTS OF TOURISM INDUSTRY

As we are aware that tourism product is an amalgam of various services, which collectively
offers the final product to the end user i.e. tourist. Before we move further, let us have a quick
recap of various components of tourism product, which will help us in conceptualising the
tourism industry. In case of tourism product, various components (attraction, accessibility
accommodation, amenities, activities, local residents, tourist etc.) work closely together to
give desired results. But, these components also require the backing of infrastructure,
superstructure, sound information and good governance to manage the tourism successfully.

The six main components of tourism product are:

1) Attraction

2) Accessibility

3) Accommodation

4) Activities
5) Amenities

6) Available package

1) Attraction: are the main pull factors which draw tourists to travel to the destination. They
may be natural or man-made and add to cultural or social aspects of a destination.

2) Accessibility: comprises the modes of transportation (land, air or water) and facilities
present at the tourism destination.

3) Accommodation: provides the lodging, food and other services to the tourist. They may
comprise the hotel property or other supplementary types of accommodation.

4) Activities : cover a range of actions a tourist can get involved in a tourism destination such
as mountaineering, trekking, rock climbing, caving, camping, fishing, bungee jumping,
mountain biking etc. These activities in tourism have reached great levels owing to enhanced
awareness in health and fitness.

5) Amenities : are the various services and facilities a visitor needs at a tourism destination. It
is vital for the tourism and include very basic to advance facilities such as convenience
facilities, signage, emergency facilities, postal services, shopping, theatre, parking etc. It at
sometimes is also referred to as “pleasantness” of a destination.

6) Available package : comprise the sum total of tourist services arranged individually or in
combination by the travel agent or tour operator. Depending upon the various types of
tourism the packages also can be of different types and variably priced depending on the
tourist services included.

Constituents of Tourism Industry

The tourism industry is a vast industry made up of business and organizations that
provide goods and services to meet the distinctive needs of tourists. These businesses and
organizations are related to virtually all areas of the economy making tourism a very huge
industry. Because of the economic impacts involved, profits, employment generation, earning
of foreign exchange etc., more and more countries are declaring tourism as an industry;
adopting policies and making plans for it; forming regulations and giving incentives. It is also
worth mentioning here that in many developed countries tourism is now being referred to as a
service industry. This is so because these countries have reached a stage of perfection in
terms of infrastructural development and the emphasis is on the: consumption of services. On
the contrary the developing countries are still struggling to create infrastructural facilities.

The tourism industry comprises many sectors or sub-industries such as the hospitality
industry, transport industry, attractions, and entertainment. All these sectors are
interconnected and integrated. They work with one another to some extent in providing goods
and services as their survival depends on each other. Tourism is a chain of linkages and
modern tourism is a result of the intermixing and combined Organizations’ efforts of the
various constituents.

Constituents of Tourism Industry: The tourism industry is the outcome of the

combined efforts of various sub-industries or sectors which provide tourism related services.

Large multinational companies (MNCs), small business houses, and individuals

working as guides at tourist spots, all constitute the tourism industry. Some of the constituents
are located at the destination itself, such as hotels, attractions, guides, shops, local transport,
etc; some are encountered en route like customs, transport, foreign exchange moneychangers;
while others are available at the place of origin of the journey, such as consulate for visa and
travel agents. The tourism industry can be classified into two broad categories or sectors
namely the main constituents and the secondary constituents as shown in table:
 The tourism industry, as we can see, covers a very wide range of industries and
services also referred to as sectors of the tourism industry. The Government of India has
realized the tremendous scope of this industry in expanding the economy, and is offering
incentives and conducting formal training programmes for service providers to give a boost
to tourism in our country. Tourism industry is the one that deals with the tourists as
consumers, the money spent by them, and the resources rendering various goods and services
which facilitate the composition of the tourism product. This industry has been named as a
‘smokeless industry’ because unlike other industries it is invisible and non-polluting. The
tourism industry is an extraordinarily complex integration of many industries spread over
many sectors. Tourism is an umbrella industry containing a set of inter-related business
participants. For example, industries like Transport (Air, water and surface), Accommodation
(Hotels, Motels, and Supplementary Accommodations), and Travel Companies, (Tour
Operators/ Travel Agents), Recreation and Entertainment Institutions, Handicrafts business,
etc and the provision of the many goods and services demanded by tourists.

Main Constituents

 Transport Industry : Transport is a fundamental component of the tourism industry.

Transport is a precondition for travel: it facilitates mobility and the movement of tourists
from their place of origin to their destination and back. Transport is frequently neglected in
the analysis of tourism, often being relegated to a passive element of the tourist experience.
Yet transport remains as an essential service element of tourism, and in some cases it can
form the focus of the tourism experience such as cruising and scenic train journeys. Various
forms of transport have been associated with the development of tourism and technological
developments in transport combined with the rise in personal disposable income have led to
the expansion of both domestic and international tourism.
 Hospitality Industry: The hospitality industry is a broad category of fields within the service
industry that includes lodging, restaurants, and additional fields within the tourism industry.
The hospitality industry is a several billion dollar industry that mostly depends on the
availability of leisure time and disposable income. A hospitality unit such as a restaurant,
hotel, or even an amusement park consists of multiple groups such as facility maintenance,
direct operations (servers, housekeepers, porters, kitchen workers, bartenders, etc.),
management, marketing, and human resources.
 Travel Agents and Tour Operators: Retailing tourism products to consumers is a key
element in the production, selling and distribution of tourism services where different
organizations link the supply to the source of demand. To connect supply and demand,
tourism industry has to communicate trade and interact with the tourist and it does this
through the distribution channel using intermediaries who seek to cooperate to sell a
product. Tour operators are the organisers and providers of package holidays. They make
contracts with hoteliers, airlines and ground transport companies then print brochures
advertising the holidays that they have assembled. Travel agents are those who sell travel in
the form of booking tickets for the travel over different forms of transports. It is estimated
that there are some 7,000 travel agency shops ranging size from the multiples, with several
hundred outlets each, to the individual shop. Some travel agents also undertake tour
operating - be it on a small scale, eg a local agent packaging a group holiday for a local
club, or on a larger scale - most famously by the legendary Thomas Cook, who was the first
tour operator, and Sir Henry Lunn (Lunn Poly) who is widely credited with “inventing”
skiing as a leisure activity. Agents can also sell the ‘components’ (flights, ferry bookings,
car hire etc) for those who travel independently
Travel agents are being classified on the basis of the type of services they cater to the
customers as:
➢ Inplant Travel Agents where a branch of a travel agency is set up in the premises of
corporate offices to cater to the travel requirements of their employees. ➢ Full Service
Agents which is functioned in the market area fulfilling all sort of travel requirements all
types of customers.
➢ Commercial Group Agents which is offering the services to the corporate sectors by
establishing their business somewhere in the market suitable to them.
➢ Incentive Travel Agents who mainly looking after the travel requirements of the
incentive travellers. They mainly concentrate their business with the employees whose
travel expenses are met by their company. For instance, central government employees are
concerned; they have LTC (Leave Travel Concession) which can be availed once in three
years. These type of agents are specialised in the various formalities and procedures of
travel of this kind.
➢ Online Agents- This is a recent addition to the travel agency business and they cater to a
global market by offering their services through online. This makes a large segment in the
travel and tourism business as more and more customers are depending on internet to get
their needs fulfilled.
As we have many categories of travel agents as described above, tour operators are also
classified into many depending on the scope of their service.
 ➢ Inbound Tour Operators are the one who make packages for the foreigners to visit our
country. They offer different types of packages based on the interest of their clients
including the destinations of tourist’s interest.
➢ Outbound Tour Operators are making packages for out going tourist, the one who
interest in visiting foreign countries. This is little more difficult than handling foreigners in
our state because they should be aware of all travel formalities and places of interest in a
foreign country.
➢ Domestic Tour Operators are those who make travel arrangement and packages for the
domestic tourists to visit different places of interest in their country.
➢ Ground Operators are the one who deal with the arrangement of ground services as the
tourist reach to a particular destination such as arranging transfers, arranging meals, guide
services etc.
➢ Specialist Tour Operators are the one who specialized in special types of packages. Its a
niche market where they try to satisfy a group of special interest tourists such as people who
visit places for bird watching, expedition, adventure sports etc.

 Guides and Escorts Guides are those who stay at the tourist destination and explain the
importance of the destination to the tourist. Escorts travel with the tour group and serve as a
guide where ever they go. It is another inevitable element of tourism industry where there is a
high demand for qualified tourist’s guides. Most of the guides we see today at different tourist
places are not able enough to impart the authentic and real knowledge to the visitors. Able
and experienced guides are paid high by major companies. There is a regional level training
programme being conducted by Dept. of Tourism, Govt. of India to supply adequate number
of qualified guides. After the training, based on their performance in the evaluation, they are
being licensed by the government and the license is issued for 3 years. After every three
years, they need to renew the license. A person can serve as a licensed guide till the age of 65
in India. T

 Tourism Organizations Various national and international travel organizations play an

integral role in the growth and development of tourism industry. Organizations such as
IATA, ICAO, WTO, PATA, IATO, TAAI, DOT etc. have been established and performing
excellently in their own spheres to make sure that the industry is growing towards a
meaningful end.
 Secondary Constituents Secondary constituents as listed in table are those form the second
part of the constituents of tourism industry. The secondary constituents are secondary only
on the list of priorities for the formations of tourism industry. However, they are highly
essential from the individual (or) tourist point of view. The readers are advised to take a
second – look at the table and put them in the shoes of the tourists so as to feel the
importance of the items listed as the secondary constituents. Among the lists there, local
transport is of paramount importance. It is very easy to reach Agra from anywhere in the
world but it is more important to have a pleasant transfer from the entry point ( say airport /
railway station / bus stand) to the Taj Mahal to have a memorable experience of tourism. In
the same way, a tourist may have enough of money in his bank account and also hold a valid
A.T.M card but if there is no A.T.M at the tourist destination he may not be able to pay his
bills immediately. Thus, the secondary constituents play a major role in the tourism industry.

TRAVEL AGENCY AND TOUR OPERATOR

A travel agency is an integral part of the travel and tourism industry, primarily acting as a
bridge between the travel/tourism service providers and the customers. The primary
function of a travel agency is to enable the selling of tourism products by bringing together
the sellers, i.e., travel services like accommodations, airlines, transport services, tour
operators, and buyers. According to the Ministry of Tourism (GoI), “a Travel Agent /
Agency (TA) is the one who makes arrangements of tickets for travel by air, rail, ship,
passport, visa, etc. It may also arrange accommodation, tours, entertainment, and other
tourism-related services”. The history of travel agencies dates back to the 19th century
when Sir Thomas Cook set up the world’s first travel agency in 1845. A tour operator
assembles tourism products and services and makes value additions. Unlike a travel agency,
a tour operator takes care of the different aspects of the tour ranging from accommodation
to transport services and sells it as a package.

Types and Forms of Travel Agency Business

The services offered by travel agencies vary from one agent to another. Hence, travel
agencies can be classified into various types based on the nature of their function,
specialization, geographical coverage, size, business form, and tourism flows.

Classification Based on the Nature of Function:

a) Wholesale Travel Agency: A wholesale travel agency buys travel services like airline
seats or hotel rooms in bulk for a specific period and designs tour packages. Wholesale
travel agencies that establish tie-ups with airlines or hotels are authorized to sell the airlines’
seats or the hotel rooms on the organization’s behalf. The primary job of a wholesale agency
is to design travel itineraries. The tour packages developed by the wholesale travel agencies
are sold to the retail travel agencies. In some cases, the wholesale travel agencies are also in
charge of retailing by selling their products directly to their outlets.
b) Retail Travel Agency: Airlines Reporting Corporation (ARC) defines a retail travel
agency as “a business that performs the following functions: quotes fares, rates, make
reservations, arrange travel tickets and accommodation, arrange travel insurance, foreign
currency, documents and accepts payments.” Retail travel agency sells the tourism products
directly to the end-users at their outlets. They usually charge a certain percentage of the
product’s price as commission which serves as their primary source of income. Retail
agencies play a crucial role in dealing directly with consumers and producers/ wholesalers.
Since it acts as an intermediary, retail travel agencies follow itineraries pre-designed by
wholesalers. They also provide travel information to the customers by furnishing travel
literature and offering travel-related advice.
Classification Based on the Size of Business:
a) Small Scale Travel Agency: It refers to travel agencies with not more than 50
employees and managed or owned independently. In many countries, these small-scale
travel agencies together hold a significant market share. They focus only on a narrower
range of products.
b) Large Scale Travel Agency: Large-scale travel agencies offer a wide range of tourism
products and house different departments specializing in various segments. C
c) Medium Scale Travel Agency: In most cases, these types of travel agencies are a
successful extension of small-scale travel agencies with an employee range of 50-150.

Classification Based on Business Model:

a) Offline Travel Agency: Offline travel agency sells tour packages and other travel-related
services or products in a traditional business setting, i.e., a sale takes place based on the in
person exchange between the consumer and the travel agency.

b) Online Travel Agency: Unlike offline agencies, online travel agencies sell tourism
products and services to the end-users through the internet. Online travel agencies surpass
the market share of their offline counterparts due to the increasing number of customers
opting for online purchasing. For example, MakeMyTrip.Com is one of the leading online
Indian travel companies offering a wide range of tourism products ranging from flight
tickets and accommodation to tour packages.

Types and Forms of Tour Operators

a) Inbound Tour Operators: Inbound tour operators deal with foreign tourists and make
arrangements in the host country. For example, a group of European tourists visiting India
through a travel company in India that a tour operator handles all the travel services. This
falls under the inbound tour operator category.

b) Outbound Tour Operators: They deal with international travelers. For example, an
Indian-based outbound tour operator takes care of the travel arrangements of Indian tourists
who are willing to visit foreign countries.

c) Domestic Tour Operators: This category of tour operators designs and sells tour
packages within the country of operation. Domestic tourism is a booming sector in India,
with a rising number of citizens opting for tours within the boundary of the nation.

d) Ground Operators: Ground operators handle the tour arrangements of a particular

destination operating from the same region. They are also called ‘destination management
companies’ or ‘reception operators. They chiefly do the ground travel arrangements on
behalf of travel companies that do not have branches operating in the region.

 Differences between Travel Agency and Tour Operator

Tour operator Travel agency

1. It operates as a wholesaler. 1. It operates as a retailer.
2. It acts as a principalagent who takes 2. It acts as a local agent that confirms and
responsibility for the package they create. reconfirms the services.
3. It plans, arranges, sells, advertises, and 3. It does not usually design or create the
operates its tour packages. holiday packages they sell.
4. Tour operators sell tour packages 4. It sells package tours on behalf of the
directly to the clients or use the services of tour operator.
travel agents to do so. 5. It less tends to perform ground services.
5. It more tends to perform ground 6. The size of the business is comparatively
services.
 6. The size of the business is large small.
7. It offers a variety of tour programs. 7. It deals with one specific component of
8. It modifies the tour itinerary and the travel product.
program. 8. It follows the tour itinerary.
9. It has variables but limited revenue and 9. Revenue is fixed and pre-determined by
gross profit suppliers.

7.3 OPERATIONS AND FUNCTIONS OF TRAVEL AGENCY BUSINESs

Before dwelling into the details regarding the steps involved in setting up a travel agency, it
is vital to be familiar with the travel agency’s functions and operations. With the rapid
advancements in transport systems and the accessibility of tourism services availed by a
broad section of the customers, the kind of services undertaken by the travel agencies has
grown widely. However, it cannot be said that each travel agency offers all these services.
The essential functions of the travel agency are listed below
 Dissemination of Information: A potential customer would like to be aware of the various
aspects of their tour. The prospects of a consumer buying a product from a travel agency
majorly depend on how well a travel agent possesses knowledge about the product and how
efficiently it is being conveyed to the consumer.
 Ticket Reservation: Ticketing is a primary function of travel agencies
and tour operators. It involves reservation and issuing airline, railways,
cruise, and bus tickets to clients. Though ticketing in earlier days was a
tedious job due to the complexity of airfares, the Global Distribution
System (GDS) and Computer Reservation System's (CRS) introduction
and advancements have made it a manageable job. While ticketing was
done either through telephone requisitions or in-person visitations to
travel agencies, many travel agencies have facilitated the provisions for
online purchasing.
 Itinerary Preparation: A typical itinerary consists of information
regarding the tour duration, accommodation details, sightseeing, and
other activities involved in the tour. A well-prepared and proof-checked
itinerary increases the chances of product sales. It is also equally
important to have different types of itineraries, thereby providing the
customers with options.
  Tour Packaging and Costing: Planning the tour packages and
deciding their cost is another important travel agency function. Tour
Packaging demands expertise on the particular type of tour and
destination. After assembling various components and designing a tour
package, the travel agency fixes its monetary value and makes it
available in the market.
 Liaison with Service Providers: Since enabling tourism services
requires bringing various travel components together, travel agencies
coordinate with multiple suppliers. These include airlines, hotels, car
rentals, and transportation companies.
 Provision of Travel Insurance: Travel Insurance is issued to cover the
different types of risks during travel, such as lost baggage,
cancellations, and accidents. Travel agencies offer insurance services
along with other tourism products.
 Foreign Currency: Provision and exchange of foreign currencies are
dealt with by a separate travel agency department. The agencies
purchase foreign currencies on behalf of their customers, thus saving a
lot of time on the process. Companies like Thomas Cook India further
ease the foreign currency exchange process by offering online forex
services and introducing Forex Travel Cards.

ORGANIZATIONAL STRUCTURE OF TRAVEL AGENCY :Organizational structure

is a setup that reflects how organizational activities should be carried out to meet its goals and
objectives. Apart from this, the organizational structure also outlines the flow of
communication channels within and between various levels of the organization. It ensures the
effective management of an organization. The size of a travel agency and the type of business
that it handles determine the organizational structure. Travel agencies with largescale
operations have a formal organizational structure, whereas the organization structure is
limited to small and medium-scale travel businesses.

Following the growth of the travel business, its organizational structure should be modified
and updated. For example, after its merge with Thomas Cook, TCI has undergone a
significant modification in its organizational structure. Similarly, when a travel agency
expands its business, its organizational structure also expands with the inclusion of
departments required to meet the updated organizational goals.
For an organization's structure to be effective, it should have the following characteristics.

 A good organizational structure should be flexible to accommodate alternations when

the need arises.
 There should be a clear flow of authority which in turn ensures proper delegation of
power and responsibilities.
 A less complex organizational structure with minimum managerial levels avoids
mismanagement and confusion

Figure 1 shows a detailed organizational structure of a large-scale travel agency. The chart
depicts the hierarchical structure of the agency where the authority rests with the Chairman or
CEO, who makes the major decisions for the organization while in large establishments the
top hierarchical position rests the Board of Directors consisting of more than one top-level
position who collectively makes the decisions. However, only the headquarters of the large
travel agencies are more likely to house all these departments. In retail outlets and small-scale
travel agencies, generally, there would be only a few sections overlooking the operations
based on the nature of business. No one size fits all approach in formulating organizational
structure. Hence, it varies from one travel agency to another based on the business’ size,
nature of business, and type of services.
The process of travel decision making: a conceptual framework