ASIA PACIFIC COLLEGE OF ADVANCED STUDIES, INC.

City of Balanga, Bataan

FACULTY-IN-CHARGE : MIKAELLA S. LEGASPI

COURSE CODE AND TITLE : THM 4 MICRO PERSPECTIVE OF TOURISM AND HOSPITALITY

LEARNING OUTCOME :
● Understand tourism effects in economy, society, culture and environment.
● Enumerate the positive and the negative impacts of tourism to other sectors

Course Outline 01: Impact of Tourism

● Economic effects of tourism
● Negative economic effects of tourism
● Social impacts of tourism
● Impact of tourism on culture
● Environmental impacts of tourism

THE ECONOMIC EFFECTS

1. TOURISM INCOME
○ Generally, it comes from wages, salaries, interest, rent, and profits.
○ It is also generated from interest, rent, and profits in tourism and hospitality businesses.
○ Income is also obtained from direct taxation or indirect taxation.
○ Tourism and hospitality are both income generators and income redistributors.
○ The sum of all income in a country is called NATIONAL INCOME.
○ MULTIPLIERS are means of estimating how much extra income is produced in an economy as a
result of the initial spending or injection of cash.

2. EMPLOYMENT
There are three types of employment generated by tourism and hospitality:
○ Direct - generated from providing goods and services directly to tourists in hotels, restaurants,
bars, nightclubs, and the like.
○ Indirect - positions that are associated with other tourism-related activities but are used by
both local residents and tourists.
○ Induced employment - people working in position only peripherally related to tourism but
generated because of it.

3. BALANCE OF PAYMENT
○ Is an accounting of the flow of goods, services and funds in and out of the country during a
given period.
○ If a country pays or agrees to pay more money than it receives - deficit
○ If it receives more money than it sends or exports –surplus

4. INVESTMENT AND DEVELOPMENT

○ Accelerator concept
 ASIA PACIFIC COLLEGE OF ADVANCED STUDIES, INC.
City of Balanga, Bataan

○ The accelerator theory is an economic postulation that states that when either demand or
income rises, investment expenditure rises as well. According to the theory, when there is
excess demand, businesses can either reduce demand by raising prices or increase investment
to meet the level of demand.

NEGATIVE ECONOMIC ASPECTS OF TOURISM

1. High inflation and land speculation destination
2. High leakages from the economies of developing countries
3. Low returns on investments because of seasonal fluctuations in demand; and
4. Overdependence on tourism and hospitality

SOCIAL IMPACTS OF TOURISM

The social impacts of tourism and hospitality refer to the changes in the quality of life of
residents of tourist destinations. The objective of social tourism is to ensure that tourism is accessible
to all people.

HOST - VISITOR INTERACTIONS

Smith (1997), categorized tourists into several types and outlined her views on the intensity of
interaction between the tourists (visitors) and the local residents (hosts).

● Explorer
● Elite - "the jet-setter.“
● Offbeat
● Unusual Tourist
● Incipient Mass Tourist
● Mass Tourist
● Charter Tourist

POSITIVE SOCIAL EFFECTS OF TOURISM

1. SOCIAL CHANGE AND MULTICULTURAL UNDERSTANDING

● One of the most important benefits of tourism is the bringing together of diverse people to help
them understand one another.
● The more isolated the country visited, the more significant the social changes are likely to be.

2. ADAPTATION TO THE REALITIES OF MODERN LIFE AND IMPROVEMENT OF THE HOST COUNTRY’S
LIFESTYLE
● Tourism promotes progress and modernization through exposure to other attitudes and values.
It brings about improvement in facilities and services as well as improvements in the lifestyle
and quality of life of the residents of the host country.

3. USAGE OF FOREIGN LANGUAGE

● Brings people in contact with those of other language groups.
● Visitors to other destinations often want to learn language to improve the quality of future
experiences.
 ASIA PACIFIC COLLEGE OF ADVANCED STUDIES, INC.
City of Balanga, Bataan

● Many popular tourist destinations have developed short-term language courses to assist
visitors.

4. IMPROVED HEALTH CONDITION AND DISEASE CONTROL

● The desire of tourists for high quality public health facilities can contribute to the maintenance
and improvement of those facilities in destination areas and provide additional sources of
revenue which, in turn, can be invested in upgrading water and sewage disposal facilities.

NEGATIVE SOCIAL EFFECTS OF TOURISM

1. SOCIAL SATURATION
● The presence of large numbers of tourists in particular places at specific times results in
saturation or congestion of facilities and services and competition for limited resources.
● Thus, saturation or congestion brought about by tourism is often cited as a social cost.

2. CHANGES IN SOCIAL STRUCTURE, BEHAVIOR AND ROLES

● Tourism changes the traditional forms of employment which results in lowering of the status of
agricultural workers, migration of the population and the breaking up of families.

3. COMMUNITY PROBLEMS
● Prostitution, often called the oldest profession, certainly existed before the growth of mass
tourism.
● An increase in visitors increases criminal activity. Wealthy tourists present tempting targets.

IMPACT OF TOURISM ON CULTURE

● ACCULTURATION - Defined as those changes that occur in a culture through borrowing from other
cultures.
● CULTURAL CONVERGENCE - Is the tendency of world cultures to become more alike.

POSITIVE IMPACT OF TOURISM ON CULTURE

1. INTERCULTURAL COMMUNICATION
● Mobility, which is a prerequisite of tourism, is necessary for different social groups,
nationalities, and cultures to meet and interact.
● Cross-cultural communication between tourists and their hosts may promote changes in local
culture while preserving or revitalizing local ethnic and cultural identity.

2. RENAISSANCE OF NATIVE CULTURE

● Tourism may be important to the host country to remind its people of its history and culture.
● Folk culture festivals are organized to attract visitors.
● Traditional art forms have been revived in several countries.

NEGATIVE IMPACT OF TOURISM ON CULTURE

 ASIA PACIFIC COLLEGE OF ADVANCED STUDIES, INC.
City of Balanga, Bataan

1. DESTRUCTION OF A COUNTRY’S WORK OF ART

● The local residents resent tourists who think they have a right to the country’s art.
● The increasing demand for artifacts has led to changes in its form and functions as art objects.

ENVIRONMENTAL IMPACT OF TOURISM

The history of tourism and hospitality closely shows that the environment has contributed to
the birth and progress of tourism and hospitality. The term "environment" connotes both human and
physical characteristics.

POSITIVE ENVIRONMENTAL IMPACT OF TOURISM

Tourism and hospitality has created environmental awareness in two ways:
● Contact with scenic areas has raised man's awareness of the earth's beauty and made it easier
for him to see and enjoy it with minimum damage; and
● Environmental awareness has been heightened by mass tourism which caused direct and
indirect destruction.

1. CONSERVATION
● Conservation and Preservation of the environment not only benefit the local area but they also
determine the future of tourism.
● Local residents benefit from the preservation.
● Tourism, for as long as it attract tourists, will continue to be a socio economic and cultural asset

2. DEVELOPMENT OF ATTRACTIONS
● Several countries around the world are identifying areas which have the potential to attract
tourists.
● High mountain areas have been developed .

3. HISTORIC PRESERVATION
● Many historical sites in both urban and rural areas have been preserved to attract tourists.
● This restoration and rejuvenation process is occuring throughout the world and serves as a
major characteristic of an area intended to impress tourists.

4. RESIDENT BENEFITS
● Results of conservation and preservation can be enjoyed by the local community as well as by
the tourist.
● The development of a coastal resort allows free access to tourists and local residents.

NEGATIVE ENVIRONMENTAL IMPACT OF TOURISM

1. ENVIRONMENTAL CONFLICTS
Some of the problems affecting the quality of the environment are:
● destruction of the vegetation
● pollution (air, water and noise); and
● destruction of wildlife
 ASIA PACIFIC COLLEGE OF ADVANCED STUDIES, INC.
City of Balanga, Bataan

2. GEOLOGICAL CONFLICTS
● Tourism and hospitality affects geological formations. Some tourists collect minerals, rocks,
fossils, and corals from tourist attractions. Others destroy natural formations by vandalizing.

3. RESIDENT CONFLICTS
● Number of conflicts frequently occur between residents and tourists or tourist developers.
● The increasing value of lands often forces residents to move away from the area.
● Conflicts between tourists and local residents may also arise because of damage to the area
brought about by littering, vandalism, and traffic congestion.

With the growth of tourism, the economic, social, cultural and environmental impact of tourism on the
community may be both positive and negative.

With proper planning, controlled development and the implementation of appropriate guidelines, the negative
impacts of tourism can be greatly reduced. It is imperative that policy makers and planners understand the
advantages and disadvantages of tourism and seek better tools to evaluate them.
 ASIA PACIFIC COLLEGE OF ADVANCED STUDIES, INC.
City of Balanga, Bataan

LEARNING OUTCOME :
● Define Tourism marketing and its characteristics
● Explain the strategic marketing process

Course Outline 01: Tourism Marketing

● Definition of Marketing
● Uniqueness of Tourism Marketing
● Marketing Orientation
● Marketing Segmentation
● Strategic Marketing Process

MARKETING

● Marketing consists of all those activities necessary to bring a product or service from the manufacturer
to the end user.
1. The product and or service itself
2. The methods of distribution
3. The methods of pricing
4. The methods of promotion
5. The form of selling
6. The form of advertising
● Concerning tourism, marketing is the systematic process by which an organization tries to maximize the
satisfaction of tourist demand through research, forecasting, and the selection of tourism products and
services to meet that demand.
● Another definition is, it is a management philosophy which, in the light of tourist demand. makes it.
possible through research, forecasting and selection to place tourism products on the market in line
with the organization's purpose for the greatest benefit.

UNIQUENESS OF TOURISM MARKETING

1. Tourism is a Service
● An intangible experience is being sold, not a physical good that can be inspected before it is
bought.
2. Service provided is usually composed of several components
● Composed of transportation, lodging, food and beverage, attractions, activities, and the like.
The degree of success of any component influences the success of the other components.
3. Travel intermediaries are necessity
● Because most tourist services are located far from their potential customers, specialized
intermediaries or organizations are necessary to bridge the gap between the producer and the
tourist.
4. Demand is highly elastic, seasonal in character, and subject to changes in taste and fashion.
● There are a number of options available to consumers to satisfy a wide variety of tastes.
 ASIA PACIFIC COLLEGE OF ADVANCED STUDIES, INC.
City of Balanga, Bataan

MARKETING ORIENTATION

Before embarking on a program to market tourism in general or a specific tourism product or service in
particular, it is necessary to develop a philosophy or orientation to guide one’s marketing effort.

● PRODUCT ORIENTATION
Emphasizes the products or services that are available. It may be successful if there is a surplus
of demand over supply. Thus, the destination which offers the best product will get the tourist.

● CONSUMER ORIENTATION
When there is more supply than demand, the consumer orientation is used. It places the needs
and wants of the tourist foremost in the mind of the marketer who seeks to provide a product or
service that will satisfy those needs and wants.

● SOCIETAL ORIENTATION OR SOCIETAL MARKETING APPROACH

Which focuses on the satisfaction of tourist needs and wants while respecting the long-term
interests of the community.

All the marketing activities will be guided by the philosophy of those responsible for the marketing
campaign. It is essential that any marketing effort have an agreed upon philosophy to guide the further
development and marketing efforts of any destination.

MARKET SEGMENTATION

The second aspect of the definition of tourism marketing is the selection of tourism demand. It is a
universally accepted way of analyzing demand. It is the grouping together of people with similar needs and
wants for the purpose of serving the market better.

4 Criteria that have been developed by which market segment

can be constructed :

1. Socioeconomic
● It is the most commonly used at present due to
the ease of collecting data, the comparability of
such information through census as well as media
data, and the fact that such data is easy to
understand and apply.
2. Product-related
● A major advantage of product related criteria is
that the information gained is directly related to
the particular product in question.
 ASIA PACIFIC COLLEGE OF ADVANCED STUDIES, INC.
City of Balanga, Bataan

3. Psychographic
● This segmentation technique , although expensive and difficult, is useful in describing segments.
Information about an individual’s attitudes, interests, and opinions give a much closer picture of
the segment being described.
4. Geographic
● Geographic considerations are very important in tourism. At present, destinations use
geographically-based studies to identify primary, secondary, and in some cases, tertiary
markets.
● The process of selection and the corresponding decisions to develop a marketing program
suitable to meet the needs of these segments is known as positioning.

STRATEGIC MARKETING PROCESS

A strategic marketing process can be divided into three elements:

1. Market Planning
2. Target market selection
3. The marketing mix selection

MARKETING PLANNING PROCESS

In marketing planning, the objectives are stated and the methods of attaining them are identified. There are
seven steps in the market planning process. These are:

1. Collection of Data
● Data can be collected in two ways-from secondary sources and from primary sources. The
second method is expensive and time consuming.
2. Analysis of Data
● Data is usually organized and interpreted. This requires a great amount of skill and
understanding.
3. Identification of alternative strategies for reaching the desired goal
● In most cases, there are several ways to arrive at a desired goal.
4. Cost-benefit analysis
● The cost benefit analysis of several methods for reaching the goals would indicate which of the
alternatives or combination of them would be best from a financial standpoint.
5. Selecting alternatives and plan formation
● After the variables and cost-benefit for each are identified, it is decided which one should be
carried out by the other organizations.
6. Control procedures
● These are methods which analyze the progress made in achieving the goals of the project.
7. Plan information
● Putting into effect the plan of action and supervising it.
 ASIA PACIFIC COLLEGE OF ADVANCED STUDIES, INC.
City of Balanga, Bataan

TARGET MARKETS

Tourism USA suggested four steps in identifying target markets. These are:

1. Estimate the approval of an area's attractions. This includes the degree of interest of the tourist in the
area and the length of time the tourist will spend visiting it.
2. Estimate the distance in both travel time and travel costs. The greater the attraction, the longer the
distance potential tourists will travel.
3. Identify the potential target markets geographically by locating the population clusters within the
maximum distance determined from the estimated travel time and lure of the attraction.
4. Identify the actual and potential competition in the target market.

BEHAVIORAL CHARACTERISTICS OF TARGET MARKETS

● The behavioral characteristics of potential travelers is very important in identifying target markets.
People travel for different reasons
● Once the target markets have been defined, the segments must be studied to know why these people
travel to a specific location. Research can determine the behavior target markets that would be best
suited for the particular product and match the attractions with those who are most likely to enjoy
them and let the tourists know their existence through promotion.

SELECTING A MARKETING STRATEGY

There are six steps in determining a marketing strategy. These are:

1. Identifying the market segment

2. Determining the preferences of the market segment
3. Determining what influences the segment most - price, product, image, sales persuasion, customer
service, product availability, among others
4. Realizing the importance of two clients - the traveler and the travel intermediary such as travel agent or
tour operator
5. Determining the marketing mix that will influence the segment identified
6. Establishing a price policy that will maximize profits by balancing the number of tourists with the
capacity of the attraction.

MARKETING MIX

Marketing mix is the combination of elements - product, price, promotion and distribution that interact
and complement each other to attain the objectives of the market plan.

1. PRODUCT
● A vacation consists of several parts or products such as transportation, accommodation, food
and beverage, sightseeing, entertainment and souvenirs. Thus, each provider is interdependent
upon the others to offer an attractive and satisfying vacation experience.
 ASIA PACIFIC COLLEGE OF ADVANCED STUDIES, INC.
City of Balanga, Bataan

● The philosophy of a consumer marketing orientation suggests that products should satisfy the
needs and wants of the customer. It is necessary to select a target market and then provide
products or services that will satisfy its needs.

There are several criteria that should be met in deciding to provide a product or service.

1. There should be a heavy demand for the product or service from at least one important
segment with the possibility of additional business from other segments of the market.
2. New products or services should suit the general image of the destination area and complement
existing ones.
3. New products and services should be offered in accordance with available supply of manpower,
money, and natural resources.
4. Any added products or services should contribute to the profit and/or growth of the entire
destination.

2. PRICE
● Price is the result of supply and demand. When supply exceeds demand, price tends to
decrease. When demand exceeds supply, price tends to increase.
● Price is influenced by competition. If the product and services of an agency are similar to those
of its competitors, its price will be similar to theirs. However, if its products and services are
unique, it can charge more than its competitors.
● Price is also related to the needs of the market segment that is served. If a destination is
perceived by the members of the market segment as serving their needs and wants, they will be
willing to pay a higher price.

References:

https://www.slideshare.net/MthokozisiMasukuJohn/characteristics-of-a-tourism-product

https://egyankosh.ac.in/bitstream/123456789/70001/3/Unit-12.pdf
https://www.coursehero.com/file/149470055/Characteristics-of-a-Tourism-Productpdf/
https://serp-p.pids.gov.ph/feature/public/index-view?feauredtype_id=1&slug=tourism-and-hospitality-industr
y