Chapter 7: The Structure and Organization of the Travel and Tourism Industry

Question 1: Why might national and local governments be the provider of tourism attractions?

Answer Guide: The government may own attractions because they are of national or state significance. The government may have inherited them and now have a responsibility to manage them. Attractions such as museums, state palaces or even statues may be managed by government. Additionally, the government may have constructed attractions as part of a development plan to bring tourists to an area. These may have been developed as a catalyst to encourage further development.

Question 2: In this chapter, we highlighted the existence of professional bodies, many of which are populated by individuals working in the tourism industry. What are the benefits of membership of such bodies for the individual? Does the tourism industry more widely benefit from the existence of such organisations?

Answer Guide: Members may benefit from joining professional bodies through the networking opportunities they provide. They may also provide opportunities for continued education about the industry and work as a lobby group which will aid the business interests of some of its members.

The tourism industry more widely can benefit from these organisations because it can encourage coordinated responses to crisis, changes in legislation or market shifts.

Question 3: What is the difference between horizontal and vertical integration?

Answer Guide: Horizontal integration can take several forms. One is the integration of two companies offering similar (and in some cases, potentially competing) products. Two hotels at the same seaside resort may merge, for example, or two airlines operating on similar routes may unite. A second form of horizontal integration occurs between companies offering complementary rather than competing products. An example would be the linking of an airline with a hotel chain. As both of these are principals, they are at the same stage of the chain of distribution and thus their integration is horizontal.

Vertical integration is said to take place when an organization at one level in the chain of distribution unites with one at another level. This integration can be forward (or downward in the direction of the chain) – where a tour operator buys a chain of travel agents or it can be backward (or upward, against the direction of the chain), such as in the case where a tour operator buys an airline.