The UK travel and tourism industry

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The UK Travel and Tourism industry                                         Page 3

Public sector                                                                        Page 4

Private sector                                                                        Page 5

Voluntary sector                                                                 Page 6

Tour operators                                                                        Page 7

TUI profiles                                                                        Page 7-8

Vertical/ horizontal integration                                                Page 8-9

Different types of tour operators                                                 Page 10

The Association of British Travel Agents (ABTA)                                Page 11-13

Federation of Tour Operators (FTO)                                                 Page 13-14

The impact that technology has had on tour operators                        Page 14

Travel agent                                                                         Page 15-17

The Guild of Business Travel Agents                                                Page 17

Airlines and Airports                                                                Page 18-24

Accommodation                                                                 Page 25-26

Bibliography                                                                        Page 27

The UK Travel and Tourism Industry

        The Travel and Tourism Industry has grown rapidly since the Second World War and is now said to be one of the world’s largest industries. The tourism industry is very fragmented, employing up to 1.7 million people who help provide a vast range of products, services and facilities to cater for the needs of their customers.  

The structure of the UK travel and tourism industry

The table above shows that the tourists are the focus of tourist activity in the UK, therefore without tourists there would be no need for an industry. The core elements of the industry: destinations, transportations, accommodation and attractions are supplied by different commercial and non-commercial providers, ranging from big companies such as Virgin Holidays and British Midland Airways, to local councils which provide leisure facilities and tourist information services for visitors.

The travel and tourism industry is divided into the following sectors:

Public Sector

The services provided by the Public sector are provided for the public and paid for, collectively, through government. Their operation is ultimately accountable to elected bodies, including local councils and Parliament. Most public services are non-profit-making.

Local authorities are by far the largest providers of local public leisure and tourism facilities and services such as:

  • Museums and art galleries
  • Leisure centres and swimming pools
  • Youth and community centres
  • Parks, gardens and allotments
  • Playing fields and sports pitches
  • Public halls and conference centres
  • Tourist information centres
  • Catering services
  • Children’s play schemes and summer play schemes
  • Libraries.

Most local authority leisure and tourism facilities and services are subsidised by local taxes, including council tax and business rates. Public sector orgainsations sometimes make profits but do not have profitability as their main objective. This is why a public sector facility may offer certain groups of people, such as the unemployed or those on low incomes, free or subsidised admission.

Visit Britain is an example of a Public Sector. Visit Britain was set up on the 1st April 2003 to market Britain overseas and in England to the British. They operate in over 25 offices overseas covering 31 key markets. Visit Britain  is funded by the Department of culture, media and sport (DCMS). DCMS funded 35.5 million for 2003/2004 and an additional 15 million from funding partnerships.  

The goals of Visit Britain include:

  • Overseas customers: To promote Britain overseas as a tourist destination, generating additional tourism revenue throughout Britain and throughout the year.
  • Domestic customers: To grow the value of the domestic market by encouraging key audiences to take additional and/or longer in England.
  • Governments: To provide advice to Government on matters affecting tourism and contribute to wider Government objectives.
  • Strategic tourist board parents: To work in partnership with the national and regional tourist boards to build the British tourism industry.
  • Staff: To achieve all goals by making efficient and effective use of resources and try being open, accessible, professional, accountable and responsive.

 

Private Sector

The private sector is made up of a variety of commercial operators owned by individuals or companies, whose main aim is to generate profits from the services and products, which they provide for their customers. The main activities of the private sector in the travel and tourism industries are in the fields of:

  • Retail sales
  • Catering and accommodation
  • Entertainment
  • Travel services
  • Tourism.

Many travel and tourism organisations such as Rank, Granada, Ladbrokes, Thomas Cook and Virgin are household names and make a major contribution to the wealth of the United Kingdom. Travel and tourism facilities commonly provided by the private sector include golf course, theme parks, health and fitness clubs, travel agencies, restaurants and hotels.

Many private sector organisations are now also involved in the management of public facilities on behalf of public sector organisations. However private sector companies are unlikely to get involved in the non-profit- making areas of the travel and tourism industries.

The following table shows the United Kingdom’s largest leisure companies, and gives a brief explanation of their activities and interests.

Voluntary Sector

Voluntary sector organisations are managed and operated largely by volunteers. They are often non-profit-making or charitable, such as local sports clubs and travel clubs. This gives them some financial advantage that may include rate and VAT relief, relief from income tax on investments, bank deposits and covenants. Voluntary sector organisations that register as charities have to satisfy certain conditions. Their objectives must be charitable, non-profit-making, for the advancement of education or for other purposes beneficial to the community.  

 

It is estimated that there are mare than 200 national voluntary travel and tourism groups in the UK, with a combined membership of over eight million people. These include:

  • Youth and community groups
  • Sports clubs and associations
  • Conservation and heritage groups
  • Touring groups
  • Social clubs
  • Animal welfare and wildlife conservation groups

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Tour Operators

Tour operators create, make arrangements for the various elements that compromise holiday packages by contracting with transport carriers (airlines, ferry and coach companies) and accommodation providers (hotels, self-catering venues and caravan and camping site) and operate tailor-made tours and travel programmes which they market to the customer either through travel agencies or directly via websites, TV adverts and call centres. Once the package holiday have been put together and advertised in brochures, it is the tour operator’s job to ensure that holidays are run properly and deal with any problems and emergencies which may arise. The four major tour operators are Thomson, Thomas Cook, My Travel and First Choice, these are known as TUI. They are all vertically integrated, i.e. they operate at more that one level of the holiday chain, providing air travel, tour operator, call centre and travel agency services. These companies have a variety of well known tour operating brands including Horizon, Sky tours, Portland. These companies also own travel agencies and charter airlines: Thomson owns Lunn Poly and Britannia Airways.  The remainder of the market is shared by small and medium sized operators, many serving specialist segments of the market, e.g. wine tour or single holidays.

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The large tour operators have many thousands of employees working in a range of functions such as marketing, operations, sales, administration, IT, contracts and product development; they also employ significant numbers of representatives located on the spot in each resort to provide information and support to holidaymakers. Smaller tour operators employ a handful of people who perform a wide range of duties. Couriers or tour guides are usually engaged on a self-employed basis to accompany groups of holidaymakers on tours.  

TUI Profiles

Tour operations                 Agencies                         Airlines

Thomson holidays                Lunn Poly-750 outlets                Thomson-31 aircraft

Budget travel (Ireland)         The ...

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