Transcript 2.01 Powerpoint Notesx - kosteen

2.01-Understand the impact of the
hospitality and tourism
destinations on an economy.
MS. OSTEEN
Economic Conditions
 Many hospitality businesses rise and fall
with the economy.
 During a recession or contraction, when
the economy slows down, the hospitality
industry is one of the first to suffer.
 During an expansion, the economy grows
and does well, but hospitality is one of the
last industries to benefit.
Economic Conditions
 Economic conditions greatly influence the
demand in the travel and tourism industry.
 Travel and Tourism goes through economic
highs and lows-goes through cycles.
 When visitors visit hospitality and tourism
businesses the local economy thrives.
Economic Conditions
 Recession-Spending
on necessities vs. wants.
Examples: Not going to restaurants, attractions
and no spending money for vacations. (offseason = higher unemployment)
 Peak Stage-More $$ to spend on
luxurious/desirable items.
Examples: Vacations, visiting restaurants or
other attractions.
Economic Multiplier
 Economic multiplier – an effect in economics in
which an increase in spending produces an
increase in national income and consumption
greater than the initial amount spent.
 Tourism not only creates jobs it also encourages
growth in a specific industry. This is known as the
multiplier effect which in its simplest form is how
many times money spent by a tourist circulates
through a country's economy.
 Example: Tourist spend money at local attractions-employees at the
attraction earn money and spend their income on local restaurants and
stores.
Supply and Demand
 Supply - The total amount of a product
(good or service) available for purchase at
any specified price.
 Demand - Desire for certain good
or service supported by
the capacity to purchase it.
 Example:
A band touring in Charlotte will bring
the demand for hotel rooms within the city.
Globalization
 Globalization- process in which the
economies of different nations becomes
interrelated.
 Travel
among different countries
strengthens national economies.
 Attracting tourist improve infrastructure.
 Increase in travel and tourism increases
more employee opportunities.
Globalization
 Economic problems in one country can
affect others around the world.
 Transnational corporations have
offices in countries around the world.
 Tourism facilities are being developed
nationally and internationally.
Transnational corporation
 Transnational corporation –
corporation that has major
operations in several countries.
Example:
Major hotel chain has 710
hotels in 64 countries.
Trends for the Future
 Four trends affecting businesses are:
 demographic
 social
trends
trends
 lifestyle trends
 technology trends
 Hospitality professionals stay informed
about trends so that they can better serve
their customers’ needs and wants.
Demographic Trends
 Demographics is the study of a population’s
characteristics, such as age, income, or
ethnic origin
 Two demographic trends that affect the
hospitality industry:
 more
retirees
 more young people traveling in small groups
Social Trends
 A social trend is a change in the
structure or beliefs of a society
 Two social trends that affect the
hospitality industry:
 changes
in family structure
 acceptance of gaming
Lifestyle Trends
 A lifestyle trend is a change in the
way people live their lives
 Three lifestyle trends that affect the
hospitality industry:
 concern
for health
 impulse buying
 desire to learn and have new experiences
Technology Trends
 Two technology trends that affect the
hospitality industry:
 customers’
use of the Internet and mobile
computing to obtain information and make
reservations
 businesses’ use of software to manage
information about guests, employees, and
finances
Infrastructure
 Tourism helps build infrastructure.
 Tourists
add money to a TDA by buying
lodging, food, and other goods and services
 Tourists benefit their home economy by
buying transportation and other goods and
services
National Tourism Marketing
 National tourism offices work to
attract international tourists to their
country.
 The amount of money spent in a destination is
influenced by the location of the travelers’
country of origin.
 The U.S. Travel Association (USTA) promotes
travel to and within the United States with
marketing campaigns such as Brand USA.
Inbound/Outbound
 Inbound
 Arriving
(such as passengers), or coming in
(such as a flow).
 Return leg of a journey
 Outbound
 Leaving
(such as passengers), or going out
(such as a flow).
 Departing leg of a journey
Transient
 Staying only a short time, not
permanently
 Guest
at a hotel are “transient”