The Key to Understanding the Tourism Industry

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Tourism is one of the most exciting and progressive industries in many well-known countries around the world. Tourism is also big business. Because of tourism impacts on almost every industry. The total real output, including direct and indirect expenditure worth, the popularity of tourism industry is increasing day by day.

Concept of Tourism

The Product

For example; with beauty and diversity, New South Wales has a wide range of experiences for international and domestic visitors. Tourists enjoy the big city buzz of Sydney, its great restaurants and shopping, the beauty of its world-famous harbour. They can then step away to soak up the local flavours of regional of New South Wales. Visitors can laze on a beach, hike in the fresh mountain air, the journey to the red outback, soothe their soul in one of the World Heritage national parks, take a leisurely drive through the State’s lush farm regions or stop in the quirky towns and cosmopolitan centres. Along the way visitors will be amazed at what they find – fine food and wine trails, lively festivals, Aboriginal heritage tours, amazing landscapes and friendly locals.

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As a result, tourism products come in all shapes and sizes – from five-star hotels to boutique bed and breakfasts or trendy backpacker resorts. They also include iconic attractions such as the Sydney Opera House and Harbour Bridge, activities such as horse-riding, sea kayaking and rainforest tours, not forgetting ski, surf or circus schools, museums and galleries, aquariums, wineries, zoos and lots, lots more.

One of the challenges facing the tourism industry (and in particular tourism operators) is to develop and package tourism products in a way that people want, maintaining New South Wales’ position as a premier tourist destination, as well as ensuring a viable business for the operator.

Tourism Is Everyone’s Business

Everyone gains from properly managed tourism. These benefits can be especially significant in regional areas by diversifying the area’s economic base and expanding the employment market.

In its broadest sense, the tourism industry is the total of all businesses that directly provide goods or services to facilitate business, pleasure and leisure activities away from the home environment. The chart below demonstrates the impact within our economy and community when someone goes on holiday. As you can see it is significant.

Tourism System

Before developing a tourism product it is useful to understand how the tourism system operates. The following Information shows the basic components involved:

The Consumer

In the tourism system, the consumer is the most important element as the consumer is the reason tourism products and services exist. Everyone working in tourism must ensure that the consumer is fundamental to all business and planning decisions.

Consumers have many choices about how to spend their money and leisure time. If they choose to spend their money on a holiday, they will then determine their budget, decide how much time they have available and what types of activities they would like to do while away. Then they will begin to select a destination, decide how they will travel there and make reservations accordingly through a travel agent, wholesaler, over the Internet or directly from the tour operator.

Travel Experiences

The travel experience relates to how the consumer travels to the destination and the experience they have along the way. The choices can include air, car, boat, coach, train, motorbike, hiking or a combination of the above. The mode of travel affects the type of experience, for example flying to a destination is a very different experience to driving.

A destination can suffer if transport options, links and support services are limited or below standard. Issues such as the variety of attractions, facilities and accommodation available en route, the road quality, signage and frequency of transport services, can all affect the quality of the travel experience.

Holiday Experiences

When consumers decide to take a particular type of holiday they have expectations of the experience they will have. This could relate to the quality of accommodation, service and food, the range and cost of activities available, the length of time they have, the weather, etc. Their satisfaction will be based on how well the holiday met their initial expectations or exceeded them.

Marketing Your Business

Marketing refers to a multi-faceted, on-going process that any successful business is continually working through. It includes activities such as: researching the market, your consumers and products; evaluating research data; developing your business and products; developing your own skills; and promoting, advertising or working with the media to raise awareness of your product and generate sales.

Marketing is often described as ‘the four Ps’: product, place, price and promotion. The product includes the physical attributes of the product, branding and packaging. The place is about distribution: the agencies, channels and institutions used to give consumers easy access to purchasing your product. The price must meet both the consumer’s and your needs. Promotion is explaining destinations, products and services to consumers to help them choose their holiday.

Promotion can use a range of media such as print (magazines, newspapers, brochures, posters displayed on billboards, bus stops, the sides of buses, trains etc), television, radio, direct mail, Internet, etc. Providing a holiday package as a prize for a competition or even staying in touch with customers provides promotion of your product.

Consumer Decision Making

The above information assists in understanding the process consumers work through in deciding about taking a holiday. It is important to understand this process because it influences all stages of the previously discussed model, especially the marketing/promotion element.


Going on a holiday allows people to take a break from their normal life, whether it’s restful idleness in scenic spots or extreme sports in challenging terrain, on their own, with a partner or friends, or in a large group.


Consumers may have a recognised or unrecognised need for a holiday. Promoting a holiday destination, product or service can help consumers recognise they need a holiday, then raise their awareness of the choices available.


If the consumer is positively aware of a destination, product or service they are more likely to be motivated to visit.


Promotional information helps the consumer decide how to get there, and what they want to do.


If a product delivers what has been promoted, the consumer is likely to be satisfied and have a quality holiday experience and vice versa.

Word of Mouth

Consumers share their holiday experiences with friends, family and colleagues. Their word of mouth raises awareness of the destination, product(s) and service(s) with potential future consumers.

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