Characteristics of Tourism Industry
The tourism industry is highly inflexible in terms of capacity. The number of beds in a hotel or seats on a flight is fixed so it is not possible to meet sudden upsurges in demand similarly restaurants tables, hotels beds and flights seats remain empty and unused in periods of low demand.
Ã¼ Inventory / Perishability
It is related to the fact that travel products are intended to be consumed as they are produced. For example, an airline has seats to sell on each flight; a hotel has rooms to sell for each night. If the airline is not able to sell all its seats on its flight, or a hotel is not able to sell its rooms for the night then the opportunity to sell the product is lost forever. Service sector cannot keep inventory like products. To overcome this problem, the travel industry has come up with various marketing strategies. One is to overbook. An airline overbooks its seats to a certain extent in anticipation that even though certain customers do not turn up but the flight will be fully seated. Another strategy is multiple distributions. For example a customer can buy an airline ticket from an airline, tour operator or from a travel agent. The chances of perishability are reduced. If the tourist cannot visit the place, the opportunity is lost. Hence, this becomes one of its important characteristics.
A general norm is that in Travel and Tourism industry the product or the package of the tourism can be standardized i.e. for example of 2 days 3 night in so and so hotel, but the actual experience of consuming this package is highly inconsistent. We hear a lot of travel stories which becomes a portrayal of a lot of bad experiences for example the tourist guide may not be good, the hotels lodging and boarding was bad etc. Therefore there is high level of inconsistency prevailing.
Travel products cannot be touched as they include flight experience on an airplane, cruise on an ocean liner, a nightâ€™s rest in a hotel, view of the mountains, a visit to a museum, a good time in a night club and much more. These products are experiences. Once they have taken place they can only be recalled and relished. The tangible products on an airplane, a bed in a hotel, food in a restaurant are used to create the experience but these are not what the customer is seeking. The customer wants intangible experience like pleasure, excitement, relaxation, etc. The tangible products that are purchased provide the access to intangibles.
Most travel products are produced and consumed at the same place and at the same time. This is the opposite of the tangible products, which are produced at a different place and time and consumed at a different place and time. In contrast, most travel products are sold first and then, then simultaneously produced and consumed. For example, an airline passenger consumes the flight as it is being produced, and a hotel guest uses a hotel room as it is being made available for the nightâ€™s sleep. Thus there is simultaneous consumption and production. This creates certain interdependence between suppliers and customers as the interaction between the supplier and customer takes place on the supplierâ€™s premises. The interaction shapes the travel experience. For example, the customers could not take the cruise home with them; in fact they have to leave their home.
Ã¼ Fixed location
Tourism destinations are fixed locations so effort must be taken in communicating the facility to the potential consumer.
Ã¼ Relatively large financial Investments
Every modern tourist establishment and facility requires large investment, frequently over a long time scale. This means that the level of risk and the rate of return are critically important to tourism management.
Tourism Services are high contact services, as people interact with people at virtually EVERY stage of the way. Tourism services are very people-oriented services, and the service people are plenty and have high contact with the consumers. The consumer interacts with a myriad of service people starting from when he books his ticket and throughout the course of his holiday.