Destination Management System

Chapter 3

TOURISM INDUSTRY

The Tourism industry is by definition a global industry with a worldwide network of producers, suppliers, and intermediaries. There are a few large multinational airlines, tour operators, hotel chain and theme parks. The tourism enterprise-overwhelming majority is small or medium size business. This is particularly true in the case of Morocco destination.

GLOBAL CHARACTERISTICS

> Global industry (Tourists= 698 millions, Expenditures = $476 billions) > Air Transport liberalization =New entrants

> Highly competitive

> Capital-intensive industry

> Information based industry

> 9 dominants players: Developed countries (USA, France, Italy, Spain, United Kingdom, Germany, etc.) with 51% of worldwide total receipts.

> Less Developed Countries with 12.3 % of total receipts with China
leading with 23 millions arrivals and 2.3 % of total world receipts.

CORE CHARACTERISTICS

The industry is by essence an information intensive service industry that has historically struggled under the weight of fragmented supply chains, which results in complex and often-inefficient business processing. Firstly it is heterogeneous and hence relies most exclusively upon representations and descriptions (information in printed and audiovisual format) by the travel trade and other intermediaries for its ability to attract consumers. Unlike durable goods, intangible tourism services cannot be physically displayed or inspected at the point of sale before purchasing. Hence, they are normally bought before the time of use and away from the place of their consumption (Buhalis, 1996). Tourism products are particularly difficult to describe due to their multi-national and cultural character. Different cultures, cuisine, customs, constitute the context, whereas the content is represented by geographical locality, lodging amenities and attractions/activities. So the information provided through images portrayed by media, promotional materials and word of mouth is highly critical for provision and distribution of tourism products. Tourism products require a great degree of commitment and cannot be replaced, should consumers being not satisfied with their attributes. Therefore timely and accurate information is the key success to successful satisfaction of the demand (Buhalis, 1994). Furthermore success will depend on the quick identification of the consumer needs and the interaction with prospective clients, by using comprehensive, personalized and up to date

media to convey this information and to design that specific product that will satisfy today's more experienced consumer.

MARKET CHARACTERISTICS

Until today's new ITs' driven competitive environment, few players in the various sectors of the tourist industry understood the importance of cooperation and networking because of the fragmented nature of the travel market. In particular DMOs and the travel trade still do not collaborate adequately to represent their destination globally to foreign markets. The public sector and private sector are in fact addressing tourists' needs separately without a system that can enable the creation of a value chain that strengthens the performance of the destination in a synergic manner. On the contrary conflicts are created by the dissimilar objectives and interest of various stakeholders, thus hurting the destination in general.

Consumers		Tourist

DMOs Intermediaries

Suppliers

GOV. BODIES

NTO

RTO

Primary Supplier

T.O CRS/

GDS

Travel Agent

Hotel
Chain

Airlines

Figure 1. Stylized View of the Tourism and Travel Market (Werthner 1993)

Figure 1 represents a functional and structural view of the tourism and travel market. It differentiates between the supply and the demand side and the different intermediaries. Links mark the relationship as well as the flow of information. On the supply side, primary suppliers are hotels, restaurants, cultural or sport event organizers, etc, which are mostly Small and Medium Tourism Enterprises (SMTEs). Tour Operators (TOs) can be seen as product aggregators whereas Travel Agents, act as information brokers, providing the consumer with relevant information and booking facilities. Computerized Reservation Systems (CRSs) and Global Distribution Systems (GDSs) cover airlines offering as well as other products such as packages holidays. They provide the main links to TOs and to travel agents. Whereas the intermediaries on the right side are the commercial link between supplier and consumer, the left side is relevant for destination management and planning entities such as DMOs (National Tourist Offices (NTOs) and Regional Tourist Offices (RTO)) that are not involved in the booking process.

Table 5

Pre Internet Tourism

Countries	Producers	Intermediaries	Consumers
D E S T I N A T I O N	Hotels Restaurants Airlines Provisions Entertainment Recreations	Hotel Chain Tour Operator Travel Agent GDS/CRS Tourism associations	Tourists
		DMO

Source: UNCTAD, 2000