LEARNING MODULE SURIGAO STATE COLLEGE OF TECHNOLOGY

LEARNING MODULE

IN

TPC 8
TOUR AND TRAVEL MANAGEMENT

COLLEGE OF TECHNOLOGY
Bachelor of Science in Hospitality Management

Prepared By:

STEPHINEJANE E. MUSICO, MBA

KENNETH CHARLS E. FEROL

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TABLE OF CONTENTS

Page
Number

MODULE 2 The Travel Market Sectors

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MODULE 2

I. TITLE: THE TRAVEL MARKET SECTORS

II. TOPIC: 1. Luxury Market

2. Business Travel Market
3. Mass Market
4. Cruise Market
5. Rail Market
6. Niche Market and Special interest tourism

III. TIME FRAME: 3 hours

IV. INTRODUCTION:

Like any market, the travel industry has divided itself into different sectors and has
different types of companies. The first section introduces you to the travel market and
its lingo. It then helps you think about what your business will do for your customers.

V. OBJECTIVES/ INTENDED LEARNING OUTCOMES:

In this lesson, learners will be able to distinguish the salient characteristics of the
various sectors of the travel market.

VI. LEARNING ACTIVITIES:

Travel Market is the prospective travel consumer of a travel component or a tour

package, at the point of origin, while the destination is the place to visited or
experienced within a geographical area of operation.

Travel Market Sectors

1. Luxury
2. Business Travel
3. Mass Market
4. Cruise
5. Rail
6. Niche

1. Luxury Travel Market Sector

The global luxury travel market size was valued at $891 billion in 2018 and is expected,
grow at a *CAGR of 7.9% during 2019–2026. Luxury travel services covers
most desirable and premium experience in terms of luxurious accommodations,
convenient transport facilities, and authentic travel experience. The service
providers aim to provide outstanding services to its travelers.

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* Compound annual growth rate (CAGR) is the rate of return that would be required
for an investment to grow from its beginning balance to its ending balance,
assuming the profits were reinvested at the end of each year of the
investment's lifespan.
Private jet planes, spas, special menus, private island rentals, and private yacht are
some of the unique services offered by the stakeholders to the travelers.
Travelers, nowadays, focus on experimenting with destinations to gain
experience in terms of cultures, foods, and other experiences. To gain a
valuable and unforgettable experience, people increasingly opt for unique trips,
which include cultural visit, cruising, and adventure activities.

Baby boomers aged between 51 and 69 years dominate the luxury travel market,
primarily on account of the relatively higher number of annual visits, higher
disposable income & savings, priority to "travel" in this age group, and fewer
health constraints as compared to silver hair population (69 and above age
group). Baby boomers spend the most on their travelling as travel is considered
to be the most preferred leisure activity among this age group. Europe and
Caribbean are the popular travel destinations among these travelers. Second
Honeymoon, Eco tourism, medical tourism, adventure tourism, bucket list, and
passion tourism are some of their major objectives for travelling.

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Luxury Travel Key Market Segments:

By Type of Tour
✔ Customized & Private Vacation
✔ Adventure & Safari
✔ Cruise/Ship Expedition
✔ Small Group Journey
✔ Celebration & Special Event
✔ Culinary Travel & Shopping
By Age Group
✔ Millennial (21–30)
✔ Generation X (31–40)
✔ Baby Boomers (41–60)
✔ Silver Hair (60 and above)
By Type Of Traveller
✔ Absolute Luxury
✔ Aspiring Luxury
✔ Accessible Luxury
By Region
✔ North America
✔ U.S.
✔ Canada
✔ Mexico
✔ Europe
✔ Germany
✔ France
✔ Spain
✔ Italy
✔ Rest of Europe
✔ Asia-Pacific

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✔ China
✔ Singapore
✔ India
✔ Rest of Asia-Pacific
✔ LAMEA (Latin America, Middle East and Africa)
✔ Latin America
✔ Middle-East
✔ Africa
Market Players in the Luxury Sector:
✔ Abercrombie & Kent USA, LLC
✔ Cox & Kings Ltd
✔ Travcoa
✔ Micato Safaris
✔ Ker & Downey
✔ Tauck
✔ Thomas Cook Group PLC
✔ Scott Dunn Ltd.
✔ Kensington Tours
✔ Butterfield & Robinson Inc.
✔ TUI Group
✔ Zicasso, Inc.
✔ Black Tomato
✔ Backroads
✔ Lindblad Expeditions
✔ Exodus travels

2. Business Travel
The Business Travel Market size is expected to reach $1,657 billion by 2023,
registering a CAGR of 4.1% during the forecast period. Substantial development
of the travel & tourism sector has fostered the demand for business travel.
Rise in travel & tourism has intensified the demand for business travel market.
Moreover, increase in globalization of businesses and continued growth of SMEs
supplement the market growth. In addition, increase in infrastructural
investments by regional governments and rapid growth in travel retail market
are anticipated to fuel the growth of the global market during the forecast
period. However, increased adoption of technology impedes the market growth,
as the SMEs prefer video conferencing over traveling.

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Business travel is an integral part of the corporate sector. The activities in the
corporate sector are driven by profit maximization motives. Client meetings,
brand & product promotions, business expansion, employee training, and
incentives are some of activities involved in business travel. Thus, frequent
corporate domestic and international trips have supplemented the corporate
travel market growth.

Major companies profiled in the report include Airbnb Inc., American Express Travel,
Expedia Inc., BCD Travel, Carlson Wagonlit Travel, Flight Centre Travel Group,
Hogg Robinson Group, The Priceline Group, Fareportal, Inc. (travelong inc.),
and Wexas Travel.

Business Travel Market Key Segments:

By Service
✔ Transportation
✔ Food & Lodging
✔ Recreation Activity
✔ By Industry
✔ Government
✔ Corporate
By Traveler
✔ Group
✔ Solo
By Geography
✔ North America
✔ U.S.

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✔ Canada
✔ Mexico
✔ Europe
✔ UK
✔ Italy
✔ France
✔ Germany
✔ Spain
✔ Rest of Europe
✔ Asia-Pacific
✔ China
✔ India
✔ Japan
✔ Rest of Asia-Pacific
✔ LAMEA
✔ Latin America
✔ Middle East
✔ Africa

3. Mass Market

The term "mass market" refers to a market for goods produced on a large scale for a
significant number of end consumers. The mass market differs from the niche
market in that the former focuses on consumers with a wide variety of
backgrounds with no identifiable preferences and expectations in a large
market segment.

See: https://www.youtube.com/watch?v=TpDa6vIQZqQ

The mass market is the sector by which mass tourism appeals to. Mass tourism refers
to the movement of a large number of organized tourists to popular holiday
destinations for recreational purposes. It is a phenomenon which is
characterized by the use of standardized package products and mass
consumption. Conceptually, this type of tourism features standardized leisure
products and experiences packaged for mass tourists (Poon 1993).

4. Cruise
Cruise is currently the fastest growing sector in tourism with market increase felt over
the 7 regions: Australasia / Brazil / Europe / North America / Asia / Canada /
UK & Ireland

Cruise tourism takes place on a ship dedicated to leisure. Cruise ships are viewed as
floating resorts and often resemble entire cities at sea. These vessels typically

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transport guests to multiple destinations (ports) and can either be a round trip
(finish where they start) or a point-to-point (one-way) voyage. “Cruises to
nowhere” take passengers on 1–3-day trips without any ports of call and usually
focus on gambling activities while underway. Approximately one half of all
cruises are 6–8 days in length, one third are 1–5 days, 16 % are 9–17 days,
and approximately 1 % are 18 days or longer (CLIA 2012). According to Cruise
Market Watch (2013), the majority of passengers worldwide are either North
American (60.5 %) or European (27.0 %), with an emerging Asian market (6.5
%). The typical cruiser is likely to be married, over 40 years old, and have an
annual income of over US$75,000.

Cruise Lines International Association Inc., the world’s largest cruise industry
trade association, has released the 2019 Cruise Trends and State of the Cruise
Industry Outlook. The report offers a look at the trends impacting cruise travel
in the coming year and beyond as well as the overall global economic impact.

As of 2019, there are more than 50 cruise lines representing more than 95 percent of
global cruise capacity, with over 25000 travel agent members worldwide.

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For full 2019 CRUISE TRENDS & INDUSTRY OUTLOOK, see

https://cruising.org/news-and-research/-/media/CLIA/Research/CLIA-2019-
State-of-the-Industry.pdf

5. Rail

Rails are the most important components of rail track system. The development of rail
market has a close relationship with railway industry, which is one of the major
solutions of passengers and freight transport. In recent years, the global rail
market enjoyed a growth rate as high as 5% (production). The global Rail
market is valued at 660 million US$ in 2018 is expected to reach 890 million
US$ by the end of 2025, growing at a CAGR of 4.3% during 2019-2025.

The concept encapsulates the experience, and/or symbolic consumption, related to

traveling by train (including the experience of railway architecture such as
stations, tunnels, and viaducts) and visiting railway museums. Rail operation
has transcended into contemporary tourism studies, interlacing the topic to a
variety of substantiated discourses, including railway heritage (Conlin and Bird
2014), attractions management, slow tourism, nostalgia and backpacking
(Johnson 2010).

Rail Market segment:

✔ Heavy Rail
✔ Light Rail

Segments by Distance Travelled:

✔ Medium-Distance Passenger Transport
✔ Long-Distance Passenger Transport

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✔ Short-Distance Passenger Transport

By Market Players:
✔ East Japan Railway
✔ MTR Hong Kong
✔ Central Japan Railway
✔ West Japan Railway
✔ Canadian Pacific Railway

6. Niche Market
A niche market is a segment of a larger market that has its own demands and
preferences. Companies focus on niche markets to better cater to a specific
consumer than competitors who target a broad audience. Catering to the
unique demands that mainstream providers aren't addressing, businesses
pursue niche markets to build loyalty and revenue with a largely-overlooked
audience.

The key to establishing a niche market is research. By diligently researching niche

markets, a business can determine what unique segments already exist, and
explore where new ones could be successfully developed. Once you've found a
potential niche market, it's essential to think about whether it can become
profitable.

If it's a niche market with no competition, it could be that businesses have already
found it not to be profitable or worth the effort. If there are a small number of
similar products or services, that could be a sign that your idea is potentially
profitable. The trick to capitalizing on a niche market is to find or develop a
segment that has accessible customers, room for growth, and no dominant
competition.

You can define a niche based on many factors, but some common ways are:
✔ Values
✔ Interests and hobbies
✔ Geography
✔ Price
✔ Income
✔ Quality

Special interest tourism (SIT) appeals to the niche markets. It is the provision of
customized tourism activities that caters to the specific interests of groups
and individuals. In this case, tourism is undertaken to satisfy a particular
interest or need.

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The range of special interest tours is enormous. It may range from a women’s only
trek down the Larapinta Track in outback Australia to a bike tour of one of
France's wine growing regions where it is possible to meet those responsible
for the production of the wine being sampled, or from gay-only resorts to whale
watching in Antarctica.

Some of the most popular special interest tourism products include the following:

1. Agri-tourism (aka agro-tourism or farm-based tourism)- involves activities

such as fruit-picking. Tourists may go on tours of working farms or on established
tourist routes such as brandy or wine routes.
2. Ancestry tourism- Tourists travel to destinations with the aim of learning more
about and possibly tracing their ancestors.
3. Architourism (or architectural tourism)- Tourists are attracted by the design
and buildings of a destination.
4. Avitourism (or birding tourism)- Birdwatching is a popular hobby all over the
world. Southern Africa is one of the richest birding regions, with a network of
birding routes. BirdLife South Africa, a membership-based non-profit organisation,
represents the birding tourism sector in South Africa.
5. Battlefields tourism- Tours to former battlefields have grown in popularity.
Popular battlefields sites in South Africa include Isandlwana in KwaZulu-Natal and
the Western Front (Normandy, the Somme) in Europe.
6. Eco-tourism (or wildlife tourism)- Tourists view the flora or the game of an
area. This includes whale-watching.
7. Gambling tourism- Tourists visit casino destinations and holiday in gambling
cities that have many casinos.
8. Gastronomy tourism (or food tourism)- “Foodies” visit a destination in order
to experience cuisine and food festivals. Gastronomy tourism is defined as travel
that has food as the primary factor of influence in travel behaviour and in the
decision-making process.
9. Lighthouse tourism- Tourists visit and sometimes stay in lighthouses that
provide accommodation for tourists.
10. Military tourism- Tourists who visit war memorials, battlefields, forts and war
museums.
11. Nostalgia tourism- Tourists return to a destination for sentimental reasons. For
example, they go back to a destination where they had a memorable childhood
holiday, or where they lived or studied in their younger years.
12. Voluntourism (Volunteer travel or volunteering)- Voluntourism is a form of
tourism in which travelers participate in voluntary work, typically for a charity or

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cause. A good example of

volunteer programs in the
wildlife conservation space
is Ashia Cheetah
Sanctuary.

Their reciting of Benjamin

Franklin’s famous quote:
“Tell me and I’ll forget;
Show me and I may
remember; Involve me and
I’ll understand”
encapsulates the ethos behind voluntourism.
13. Wedding tourism- This involves honeymooners and couples who travel to
destinations to have their wedding ceremonies. Wedding tourists tend to travel in
quite large numbers.
14. Art Tourism- Art tourism is a term that is used when people travel in order to
visit, explore and engage in activities related to art. It includes travelling to art
festivals, art galleries, music concerts, and dance and book festivals, and to explore
the homes of famous artists, musicians, writers, and poets.
15. Film Tourism- Film tourism is a growing phenomenon worldwide, motivated by
both the growth of the entertainment industry and the increase in international
travel. Film-induced tourism explores the effects that film and TV-productions have
on the travel decisions made when potential tourists plan their upcoming holiday
or visit to a destination.

VII. SELF-EVALUATION
Fill up the notes below with appropriate answers based on module reading activity
and live lecture.

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VIII. REVIEW OF CONCEPTS:

For many tour operators the desire to sell tours crafted for a specific subset of travelers
is not a new one; the idea of selling something as specific as ‘Halal friendly
Cape Town itineraries’ simply seemed to be far too narrow to be a viable
business strategy. Today, we have reached a point where travel is more
accessible, the world is more connected and the ability for a tour operator to
profit by selling to an extremely specific niche is finally possible.

So why must tour operators take notice and think about refining their target market
segments?
1. Stand out from the crowd: Creating a unique, niche offering will mean that your
business will be memorable and stick in the minds of people who fit your target
demographic.
2. Less competition – higher visibility: A quick search for the term ‘tour operator’
returns 233,000,000 results. Having a niche means the keywords that potential
customers are using to search for your business are narrower and there is less
competition.
3. Referrals: An avid cyclist who was delighted by their recent tailor-made cycling
tour will no doubt leap at the opportunity to rave about their fabulous travel
experience at their next local cycling meet. Customer referrals are the most
powerful way to promote your business.
4. Marketing Focus: This means that your messaging can be more specific and
directed to a highly targeted demographic. Communicating with potential
customers also becomes much more meaningful.
5. Be Impactful: Taking time to understand what advertising mechanisms work
(and more importantly, which ones don’t work) for your niche will mean less of
your budget is wasted on advertising with less impactful methods.
6. Tailor made travel: Not only will you gain customer trust but you will strengthen
your brand perception by consistently crafting tailor made itineraries and
delivering your customers meaningful travel experiences.
7. People love working with experts: Whether it be wine tasting in the Bordeaux
region, dog sledding in Scandinavia, motorbiking through India, or cloud 9
surfing in Siargao, Philippines, chances are there are people out there wanting
to share your passion and more specifically your expert knowledge.

III. REFERENCES

Allied Market Research. (2017). Allied Market Research.

https://www.alliedmarketresearch.com/business-travel-market

Allied Market Research. (2019). Allied Market Research.

https://www.alliedmarketresearch.com/luxury-travel-market

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Davis, C. (2009, June 19). 8 Thriving Travel Markets. Entrepreneur.

https://www.entrepreneur.com/article/202350https://www.facebook.com/thebala
ncecom.

(2020). What Is a Niche Market? The Balance Small Business.

https://www.thebalancesmb.com/niche-market-definition-for-business-2947188

Global And Regional Rail Transportation Industry Production Sales And

Consumption Status And Prospects Professional Market – Industry Reports. (2020).
Industryresearch.biz. https://www.industryresearch.biz/2020-2025-global-and-
regional-rail-transportation-industry-production-sales-and-consumption-status-
and-prospects-professional-market-15340452

Industry Research. (2020, March 2). Global Rail Market 2020 Growing Rapidly with
Recent Developments, Industry Size, Share, On-Going Trends, Demand, Revenue,
Key Findings and Latest Technology, Forecast Research Report 2025.
GlobeNewswire News Room. https://www.globenewswire.com/news-
release/2020/03/02/1993370/0/en/Global-Rail-Market-2020-Growing-Rapidly-
with-Recent-Developments-Industry-Size-Share-On-Going-Trends-Demand-
Revenue-Key-Findings-and-Latest-Technology-Forecast-Research-Report-
2025.html#:~:text=The%20global%20Rail%20market%20is,4.3%25%20during
%202019%2D2025.
Jensen, M. T., & Bird, G. R. (2016). Rail tourism. Encyclopedia of Tourism, 774–
775. https://doi.org/10.1007/978-3-319-01384-8_485

Naumov, N., & Green, D. (2016). Mass tourism. Encyclopedia of Tourism, 594–
595. https://doi.org/10.1007/978-3-319-01384-8_378

Petrick, J. F., & Durko, A. (2016). Cruise tourism. Encyclopedia of Tourism, 206–
208. https://doi.org/10.1007/978-3-319-01384-8_42

References 2019 CRUISE TRENDS & INDUSTRY OUTLOOK. (2019).

Https://Cruising.org/. https://cruising.org/news-and-research/-
/media/CLIA/Research/CLIA-2019-State-of-the-Industry.pdf

References Hollar, C. (2017). What Is Mass Market In Tourism? [YouTube Video].

In YouTube. https://www.youtube.com/watch?v=TpDa6vIQZqQ

Special Interest Tourism. (2021). Acsedu.co.uk.

https://www.acsedu.co.uk/Info/Hospitality-and-Tourism/Tourism/Special-
Interest-Tourism.aspx

Specialty tourism. (2019). CEOpedia | Management Online.

https://ceopedia.org/index.php/Specialty_tourism

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Tourism Tattler. (2019, October 21). 31 Niche Tourism Groups. Tourism Tattler;
Tourism Tattler. https://www.tourismtattler.com/articles/niche-tourism/31-niche-
tourism-groups/

Travel Market | TheTravel Network Group. (2011). Thetravelnetworkgroup.co.uk.

https://www.thetravelnetworkgroup.co.uk/travel-business-guide/travel-market

MODULE 2

PRE-TEST:

Discuss the following questions. Write your answer in a short bond paper.

1. How does the travel industry work?

2. What is the largest rail company?

POST-TEST:

Discuss the following questions. Write your answer in a short bond paper.

1.What is the largest luxury market in the world?

2. Is the rail industry an oligopoly?

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