CHAPTER 10

CURRENT TRENDS AND

ISSUES IN THE TOURISM

AND HOSPITALITY INDUSTRY

Learning Objectives

1 Discuss the social and economic changes that suggest a bright

future for the tourism and hospitality industry

2 Be familiar with the specific issues that owner and managers of

the tourism and hospitality establishments are likely to face in

the following areas:

a marketing;

b. legal;

c. human resources operations; and

e. consumer affairs.

3. Identify the steps taken by the owners and managers of tourism

and hospitality entities to address the major issues confronting

the industry

The Bright Future of Tourism

1. Early retirement. At present, many workers retire at earlier age than was the case in previous years.
The social security system provides benefits to workers as young as 62 years of age and many employee
retirement programs are on years of service rather than on age. In some retirement programs,
specifically government programs, it is possible to work 25 or 30 years and receive retirement benefits
at age of 55 or younger. The increasing number of people who retire early is beneficial for the tourism
industry because these people use their time to travel and see the world

2. Longer life span. The average individual can now expect to live beyond the age of 70 and many will
live longer. This is in contrast to earlier generations when the average life span was much less. The
increasing population of older, retired citizens who are richer due to pension programs and are healthier
provides a larger base of potential customers for tourism operations

3. Shorter workweek. In the past, the six day workweek was the standard for most working people. At
present, the five-day workweek is standard and the four-day workweek is becoming common-leaving
several days for other activities. The resulting increase in leisure time, combined with faster and easier
transportation makes possible for many individuals to take weekend vacations and travel to a degree
they could not have made a few years ago. The tourism industry will surely benefit from this increase in
travel

4.Greater disposable income. The average family has more money to spend than before. This is due to
higher wages and two-earner households. A large portion of the additional disposable income is spent
on consumer goods and services. The tourism operations receive an important share of it;

5 Greater mobility. Improved roads and better transportation make it easier to travel every year. The
modern high way system has reduced the time required for automobile travel between any two points.
New planes use new technologies, which enable them to carry more passengers while using less fuel.
These increases in travel have a positive impact ontourism sales; and

6. Smaller families. The average family size has decreased. Thus it is easier for the family to travel and
travel costs less if few family members travel.

Issues in Tourism

Although the future of the tourism industry is bright, it is not without problems. Those pursuing careers
in tourism will find it necessary to obtain knowledge with regard to a number of issues that the industry
must face in the future. Some have been issues for many years, but no final solutions have been found.
Others are emerging Issues brought about by social, economic, and technological change.
These issues can be categorized under the following headings:

1. marketing

2. legal;

3. human resources;

4. operations, and

5. consumer affairs.

PRINCIPLES OF TOURISM (Part 1)

Marketing Issues

The marketing issues are changing demographics, changing vacation patterns, market segmentation,
frequent guests programs, maturation in segments of the fast-food industry, and consolidation.

A. Changing Demographics

The population of developed countries is aging. The median is now 33 years and is projected to increase
in the coming years This is an issue that is significant to the tourism industry. An older population has
preferences that differ from those of a younger population. Thus, service pro videos will find it necessary
to adjust their service products to the changing preferences to the market

Another changing demographic characteristic is the increase in the number of single-parent households.
Single parent households generally have lower levels of discretionary income. To reach this market,
service providers will have to develop new service products that will appeal to this demographic
segment at affordable prices.

A third demographic change is the continuing growth in the number of people traveling for personal,
rather than for business purposes. Approximately 74% of domestic travelers travel primarily for a non
business purpose. This group responsible for the increased percentage of the travel market in the past
45 years and the growth is sure to continue.

The fourth demographic change is the growth in the number of international travelers. One of the
primary reasons is the decreased cost of transportation relative to income, making travel more
affordable to everyone. Another is increased vacation time and a greater number of holidays in many
countries.
B. Changing Vacation Patterns

Citizens of industrialized countries are changing their vacation patterns. The traditional once-a-year
vacation of two weeks or more is declining in popularity. For a growing people, vacations are becoming
shorter and more frequent. At present more people usually plan mini-vacations, adding of their annual
vacation days to a three-day holiday In this way, they manage to get away for a mini-vacation of five
ways while using only two actual vacation days.

C. Market Segmentation

Since 1980, the principal term in tourism marketing has been market segmentation. Until the late 1970s,
lodging establishments attempted to appeal to broad general markets. Their aim was to appeal to a
broad group of potential visitors. In recent years, the success of the limited service properties has led to
the development of other properties intended to appeal to selected market segments. Some of the
types of lodge properties to become apparent include all-suite properties, residence properties, sub-
budget properties, and a variety of budget properties, which differ by their varying services and
amenities.

Examples of market segmentation have been evident in food service in the past ten years. A number of
restaurants that additionally offered extensive something-for-everyone menus have begun to see
reductions in business as customers have chosen to patronize restaurants offering specialized service
products.

As new market segments are identified, properties designed to appeal to those segments are likely to be
developed.

D. Frequent Guest Programs

Because of the proliferation of properties and the increasing competition among them, some lodging
operators have begun to develop programs to gain repeat business. Model on the frequent-flyer
programs, which were successfully used by many airline companies, these plans give credits to regular
guests. They can be redeemed in the form of reduced rates, up amenities. As competition becomes
keener, the number of these grades, free accommodations, free meals, or any of a variety of kinds of
programs will certainly grow. Many believe that these programs will gain in the lodging business the
same favor they have achieved among airline customers.

E. Maturation in Segments of the Fast-food Industry

Segments of the fast-food market are no longer expanding to the extent that was formerly possible. The
demand for hamburger is not growing as fast as it once did, so operators find it necessary to develop
new products to maintain the desired sales levels. At present, establishments that previously offered
few product other than hamburgers now offer pizza, salads, poultry or other meat products. As public
tastes continue to change, food service operators will have to develop specialty products to retain an
adequate share of the market.

F. Consolidation in the Commercial Lodging Industry

Some experts are now predicting that the number of large nationwide lodging companies will decrease
in the coming years that a small number of firms will dominate the lodging industry by acquiring smaller
chains of regional or national properties. This will enable successful companies to obtain the funds
required to expand their operations internationally.

The trend toward consolidation will have a tremendous impact on all commercial lodging operations.
Both independent operation and owners of small chains will find it difficult to compete with heavily
advertised national and international brands.

Legal Issues

The legal issues are liquor liability and ethics in the tourism industry.

A. Liquor Liability

In the past, there was a growing public concern over the increasing number of alcohol-related
automobile accidents. At present, alcohol and the use of drugs is a factor in more than half of all
automobile accidents. This led the public to pressure the levels of blood alcohol in which an individual is
considered state legislatures to act. Legislators have responded by lowering the levels of blood alcohol
in which an individual is considered intoxicated and by increasing penalties on offenders. In addition,
several states have imposed new regulations on the serving of alcoholic beverages. In one state, new
regulations have made the discounting of the prices of drinks-the so-called happy hour-illegal. In several
states, establishments and their owners can be held financially accountable if they serve alcoholic
beverages to an intoxicated individual who causes damage or injury after leaving the establishment. In
some places, this has caused tremendous increase in the cost of liability insurance. This prompted some
bar owners to go out of business. It has also caused some restaurant owners to stop serving alcoholic
beverages. Some restaurant and bar owners have changed their market strategies. They now feature
and promote non-alcoholic drinks. As societal attitudes toward alcoholic drinks continue to change, it
will be necessary for food service and lodging operators to adjust.

B. Ethics in the Tourism Industry

Ethics is an academic discipline that deals with the study the codes of moral conduct practiced by
individuals or groups. Business ethics refers to the application of a particular moral code to
relationships, activities, and discussions made by individuals in business or industry. It is the code that
enables the individual in business to distinguish right from wrong; to differentiate between ethical and
unethical behavior.
Ethics in the tourism industry has been the issue for thousands of years. The business practices of some
operators of tourism establishments are questionable. For example, a manager of new restaurant may
hire twenty waiters but intends to keep only the twelve most able after the second week of operation.
An owner may fail to report all sales on his income tax returns. A tour guide may cheat on his income tax
by failing to report all his tips. Another owner may cheat on his taxes by charging personal expenses to
the business. An employee in the purchasing department may accepts from vendors in return for buying
inferior products. Business ethics is likely to remain forever in the list of tourism issues.

Human Resource Issues

Some of the human resource issues are sexual harassment, employee turnover, employee assistance
plans, and employee empowerment.

A. Sexual Harassment

Sexual harassment may be defined as unwelcome sexual advances, requests for sexual favors, and other
verbal or physical conduct of a sexual nature that take place under any of the following conditions:

1. submission is made a condition of the person's employment

2. submission to or rejection of such conduct is used as a basis for employment discussions affecting the
person: and

3. it unreasonably interferes with the person's work performance or creates an intimidating, hostile

or offensive work environment

Most cases of sexual harassment involve complaints by female about male co-workers or superiors. In
the last ten years the number of these cases has grown because an increasing number of women have
become willing to speak out. Because employers are liable for the actions of their employees at work, it
is very important for employers to take the following steps:

1. institute a strict policy banning all forms of sexual harassment in the workplace;

2. develop appropriate training programs for managers and employees so that all will understand and
become sensitive to the nature of sexual harassment; and

3. establish procedures for handling all complaints promptly fairly, and in a sensitive manner.

B. Employee Turnover

Employee turnover is one of the major issues confronting managers of tourism enterprises. With
turnover rates averaging the problem of losing experienced employees and hiring less approximately
100% per year, managers are always faced with experienced employees as replacements. Faced with
inexperienced replacements, several managers believe they have only two choices-to shoulder the high
training costs associated with developing new employees into efficient workers or to incur the equally
high costs associated with working with untrained employees. Very few realize that there is a third
alternative to retain valuable employees and reduce turnovers. and benefits, reasonable working
conditions, reasonable work schedules, and reasonable treatment of employees by managers. However,
only few managers put these requirements into practice.

Several managers and employees still treat employees as if they were parts of a big wheel rather than
people. They hire workers at the lowest possible wages, fail to provide proper training, then admonish
them for not doing their work correctly. They assign workers schedules without taking into account the
workers' personal preferences, change the schedules of the workers without previous notice, and order
them to report for work on their day off. Then, managers complain about employees who resign to
accept equal jobs with other employers

C Employee Assistance Plans

Employee assistance plans (EAPs) are included in the discussion of major issues in the tourism industry
because they are one of the secular steps to pay attention regarding the problems of their employees.
The problems of those employed in the tourism industry include psychological problems, family issues,
financial problems, legal issues, health, as well as educational issues.

The tourism manager who establishes EAPs to benefit employees will eventually develop a more loyal
work force, one that is willing to make a great effort to attain the operational goals of the enterprise. In
addition, the manager who helps the employees will reduce employee turnover.

Employee Empowerment

In some tourism establishments, managers have developed rules and procedures that employees are
directed to follow. These rule prohibiting free refills on coffee, strict limits on the number include
directives such as inflexible rules about checkout time, of hand towels per guest, or directives
prohibiting substitutions on special dinner menus. These may affect the overall impression of a guest
regarding a particular food service or lodging enterprise. For some guests, these rules may be enough to
make them decide never to return.

Many owners and managers have realized the ineffectiveness of setting strict rules governing every
detail of guest service. Thus they now set policies that are guest-oriented. They empower their
employees to make decisions that will improve the quality of service to guests without having a negative
impact on operations.

Operations Issues

The operation issues include automation, smoking/no smoking areas sanitation and public health, and
recycling solid waste.
A. Automation

Automation is the process of using electronic and mechanical equipment and machinery to complete
some or all of the task associated with a given enterprise. The two primary reason for automating an
enterprise are:

1. to increase the speed of work; and

2. to reduce the cost of work

Automation in the travel industry is here to stay computerization will affect the industry principally in
three areas namely:

1. Communications. Business travelers frequently change their itineraries to suit their changing
requirements. Much time at present is lost in making alternative arrangements through vendors or
distributors from pay phones, hotel rooms, or secretaries phones. Portable Communication Data Units
(PCDUS), a portable telephone or computer allows a business traveler to communicate with any travel
entity from any place including airplanes and rearrange or reconfirm histravel plane;

2 Interactive CRTS. Interactive television is now being used in some cities. Within a few more years,
more cities will be using it. It is possible that much of the order placement process will be shifted to
interactive television. Specific order forms can be programmed into a database that can be accessed by
any number of users. If calls are reduced to one-third by interactive CRTS, travel ors will be reaching
productivity levels of $2.5 million to $5 million per annum each. Hence, the cost of getting a traveler or
hotel, or a car is highly reduced and the profitability of the distribution system as well as the cost to the
traveler is maximized; and

3. Elimination of Tickets. There is no longer a need for the traveler to carry an actual document from an
airplane seat or a hotel reservation. A traveler may place the order about impending trip on his
interactive television, insert his travel card into the appropriate slot on the side of the console all
arrangements and confirmations have been made the computer magnetically codes his card. The
traveler arrives at the airport, goes to the appropriate gate, and as he enters the airplane, right before
he hangs up his carry-on bag, there is a slot into which he simply sticks his card. If the response is
positive, he presses a button and a receipt pops out of the wall.

One of the biggest problems of agents today is how to find the most efficient way to deliver the
traveler's documents. The elimination of tickets has the biggest impact on the distribution system
because the role of the agent as a trustee is eliminated. Consequently, the order-taker-only agent will
also be eliminated.
At present, some food service and lodging establishments have automated to the extent that guests and
customers no longer have direct contact with any staff member. There are lodging operations in which a
guest inserts a credit card in an electronic device, enabling him to check in without speaking to the room
clerk at the desk. Check out can be done through a touch-sensitive screen on the television set in the
guest's room. Food and beverages can be taken from vending machines

It is interesting to note that food service and lodging establishments have tended to maintain the
appearance of service even though automated devices have been installed. For example, some hotels
with automatic elevators have continued to hire personnel to run the elevators. Guests are still given a
high level of a service using more modern and efficient equipment than the older manual elevators. The
technological capacity to automate grows daily and the tourism industry will have to determine the
extent to which it should use the technology.

B. Smoking/Non-Smoking Areas

As more and more customers of tourism entities demand smoke-free areas for dining and smoke-free
sleeping accommodations, the industry will continue to exert efforts to meet these demands. This is
specifically true in places in which legislation orders that appropriate facilities be made available. Hence

restaurants apportion sections of their dining facilities to accommodate the requests of non-smokers.
Some even install or improve ventilation equipment.

Many lodging establishments have set aside accommodations for nonsmokers. In some hotels, smoking
is prohibited in the lobbies, corridors, elevators, and other areas. Airlines have also established non-
smoking areas.

The prohibition of smoking in tourism enterprises is an issue that is of increasing importance to owners
and managers in coming years.

C. Sanitation and Public Health

A very important issue in food service is sanitation. Everybody agrees that all steps be taken to prevent
illnesses that are caused by the manner in which food is handled or to the food itself.
Proper food handling has always been an issue in the industry. Managers must always be sure that food
is bought from responsible vendors Food must be kept at suitable temperature to prevent the growth of
bacteria. It should be placed under proper conditions to prevent infestation by insects or rodents. The
surfaces of equipment must be cleaned very well to ensure that food is not contaminated during
preparation. Washing is a necessity in food service such as the washing of the hands of the employees,
the washing of china, glassware, flatware, pots, and pans that are used in the preparation and service of
food and beverages.

National and local governments apply strict sanitary standards to food and beverage operations. Some
conduct regular inspections and apply sanctions on those found violating the regulations. The sanctions
range from imposing fines, publishing consistent violators. lists of violators in newspapers, and closing
the establishment of

To ensure compliance with local sanitary codes, many food and beverage operators hire consultants to
conduct regular inspections and to help in the immediate correction of any violation. As consumers
become more aware of the potential harm brought about by improperly handled food, preventing
possible violations of local codes will be a significant issue to food and beverage operators.

D. Recycling Solid Waste

In previous years, there has been a gradual closing of the landfills that were used for disposing solid
wastes and a growing awareness of the harmful effects of either burning solid waste or dumping it into
the sea. This has resulted in major waste disposal problems in some places.

In some cities, the cost of removing solid wastes is increasing to the extent that government and citizens
are unable to pay. In many of these areas, separating recyclable plastic, glass, and other items from
other solid wastes greatly decreases the quantities that require disposal.

This trend toward recycling is likely to increase. Many in the tourism industry who have not been
previously affected by this issue will eventually fly is it necessary to adopt a recycling program.

Consumer Affairs Issues

The consumer affairs issues are fire safety, truth in menus, and died nutrition/health.

A. Fire Safety

Fire safety has always been an important issue in the tourism industry. In earlier centuries, taverns, inns,
and hotels which were usually constructed of wood, were regularly destroyed by fire many were burned
to the ground and a large number of people were killed or crippled.
During the twentieth century, hotels, motels, and other lodging establishments have instituted many
changes; among which are improvements in design and construction as well asimprovements in the fire
control systems installed in buildings

Examples are electronic smoke detectors, automatic systems to summon fire departments, better
sprinkler systems, and so on because of these systems, people became safer.

However, a number of dangers associated with fire remains to be considered. In case of fire, guests in
hotels and other lodging operations may face danger from the toxic smoke resulting from the burning of
furniture, fixtures, and fibers produced from man-made materials. In a fire, many the artificial fibers
used in wall coverings, carpets, draperies, and upholstery produce toxic fumes that can be more
dangerous than the fire itself.

Another problem is related to construction. In recent years new buildings were well insulated to
decrease heating and cooling expenses. In some buildings, windows were not designed to be opened.
Temperature and air were controlled by very complicated central systems. In case of fire in such
buildings, there is danger that smoke may spread rapidly throughout the building at present, individual
room ventilation is installed to preempt the danger.

B. Truth in Menus

For food service operators, preparing truthful menus is an ethical practice that should never be violated.
However, a small minority have produced menus that are not accurate indicators of the food served in
their establishments. Some serve U.S. Choice beef when their menu states U.S. Prime beef. Others serve
portions with fewer ounces than the number listed in the menu still others have not used the actual
ingredients suggested by their menus and have substituted one product for another such as turkey for
chicken, margarine for butter, generic products for name brands, and domestic products for imported
ones

In some areas, consumer production laws have been passed so that those who violate the regulations
risk fines and loss of licenses. It is important that those in the tourism industry conduct their operations
ethically in order that consumers will have complete faith in the truth of their menus, the
wholesomeness of their food, and the honesty of their business practices.

C. Diet/Nutrition/Health

Since the public is very much concerned about healthy diets containing less fat and lesser calories, many
food service operators are adjusting their menus to the changing public tastes. Some devoting sections
of their menus to food for the diet conscious are assigning certain menu items for those interested in
10d that is low in sodium and cholesterol. An increasing number of restaurants exert efforts to attract
health-conscious diners. Some have eliminated unhealthy food from their menus.

The trend to healthier dining will surely continue. Successful food service operators will have to give
greater attention to the nutritional content of food in the years to come.

The Future Of Tourism and Hospitality

The World Travel and Tourism Council forecasts that travel and tourism will grow at 40% to 50% in the
next 10 years. This tremendous increase presents great challenges and career opportunities for today's
tourism and hospitality graduates. According to John Naisbitt, the futurist, the global economy of the
twenty-first century will be propelled by three super-service industries namely telecommunications,
information technology, and travel and tourism

The following tourism and hospitality items are but few examples of the wave of the future

1 increased speed and shopping-use of the Internet in developed countries;

2 extended reach in less-developed countries;

3. improved security of personal information;

4. robotic labor sources;

5. reservation systems with more sophisticated, voice activated artificial intelligence;

6. improved navigation systems for rental cars;

7. electronic entertainment venues in rental cars and on planes and cruise ships;

8. upgraded Internet personal digital assistants for operations

9. marketing mass customization;

10. comprehensive branding campaigns for large and small

operators

11. virtual online customer communication;

12. just-in-time seats/rooms/cars inventories

13. electronic travel agents;

15. global anti-terrorist microchip security systems;

16. more nutritional fast-food offerings

17. emphasis on ecotourism; and

18. improved customer relationship marketing information.