RPTS Exam 2

• Water:
• Sails to Steam (1838=15 day crossing)
• Cruising (1957)
• Ferries (up to 42 mph)

• Rails:
• US Highway act (1956), jet service, post office (1967)
• International: Channel, Eurailpass (Japan, Russia, India)

• Automobiles (Model T in 1908)
• -84% of all over-night travelers
• -Car rentals increasing (75% business)

• Motorcoaches:
• -1980=12%, now only 6% of interstate
• -1982 Bus Reform Act (less interstate, more intercity)

• Passenger Service (1919 London/Paris)
• -1926 (LA to SLC)

• Jet Service (1952 London/Johannesburg)
• -1958 (NYC to Miami)

• Past 20 years=70% reduction in price
• Frequent flyer: 1981 American Airlines

• Load Factor
• -# of revenue pax miles/# of available seat miles

• Prior to:
• No Price competition
• Difficult to fly to new cities or discontinue
• Civil Aeronautic Board
• Tour Business not allowed
• Point to point flights
• Hub and Spokes
• Bottlenecks at Hubs

• Result of:
• Complex Pricing
• --(multiple tiers)
• --Fewer Airlines
• Package tours
• Sabre

Before 1957, steam engine boats allowed for point to point ocean crossings that allowed for travelers to arrive at their destination on time. Then the jet engine was invented and limited ocean transportation. Today, cruise ship crossings are limited to repositioning cruises (the transfer of a ship from one cruising area to another to take advantage of seasonality of demand).

The largest growth in cruising occurred with the invention of steam powered ships in the 1830's. This began a new age of dependable scheduled service and transatlantic passenger travel grew rapidly until until the invention of the jet engine in 1957.

Prior to the Airline Derregulation Act of 1978, airlines wanting to begin services had to apply to the Civil Aeronautics Board 90 days in advance and receive formal approval to discontinue service to a city. The CAB was eliminated in 1978 to facilitate the move to a competitive market and the US Department of transportation assumed responsibilities of overseeing airlines.

Yield Management= Allocating capacity to customers at the right price to maximize profits

• Results in:
• Saving seats for business travelers
• overbooking flights
• cheap fares late (priceline.com)

• Works best when:
• Capacity is fixed
• Demand can be separated into segments
• Inventory is perishable
• Services can be sold in advance
• Demand fluctuates (holidays)
• Marginal sales costs are low (1 seat), but marginal capacity costs are high (1 plane)

In the 1940's, automobile and the number of miles traveled by car increased. Then, the Trans-Canada Highway Act of 1949 and the US Federal Aid Highway Act of 1956 enables provinces ad states to build major highway systems. Also, domestic jet passenger service became available. The railroads did not maintain their tracks or customer services. Lastly, in 1967 the post office stopped shipping mail by rain. The railroads began to concentrate on moving freight.

Tourists must rely on many different forms of transportation to reach their final destinations.

# of revenue pax miles/ # of available seat miles

The primary airline route pattern in the US; Airlines select hubs near major metropolitan areas where passenger, administrative, and maintenance activities can be concentrated and quickly rerouted to their final destinations; airlines funnel traffic to spoke routes for smaller markets

The hub-and-spoke system allows for airlines to math the size of aircraft serving the market to the demand from the market

Allocating capacity to customers at the right price to maximize profits

The Deregulation Act of 1978 was enacted to create a freely competitive market that would provide needed air service more efficiently. it eliminated the CAB and lessened restrictions on airlines, replacing it with the DOT. Deregulation made pricing more complex, allowed airlines to offer packaged tours, run travel agencies, and develop new ways of selling tickets- any airline that cold meet safety standards could have air routes.

• Bed and Breakfast (B&B)- originally called "pensions"
• -started in small towns

• Time-shares/condos: typically 2 weeks
• -Exchange options: rental pools- condos are released by their owners for rental purposes and are managed by lodging facilities

• Conference Centers
• -Eisenhower (Columbia University)

• Campgrounds and RVS
• -Important for seasonal destinations

• Tremont House in Boston (1829)- First hotel in the US
• Statler Hotel in Buffalo (1908)

1929: 85% of all Hotels went bankrupt

• Motels (started by WWII prosperity)
• -increased auto traffic
• -started as small wooden structures
• -holiday inns (1952) = Standardized

In order to attract and retain guest marketers must pay attention to their needs and specialize their accommodations according to them. A broad array of strategies are needed to attract and maintain a loyal following. Marketers have developed a variety of brands within hotel chains to meet specific market segments.

Camp grounds VS RV parks

• 1= Functional, clean and comfortable
• --Basic but modest

• 2= enhancements in quality
• --Target budget oriented traveler

• 3= marked upgrade in attributes/services
• --offer a degree of sophistication

• 4= upscale facilities and amenities
• --high level of service an hospitality

5= properties are renowned (flawless)

• Chains
• -Groups of properties affiliated with each other
• -Parent Co. may own, franchise or contract
• --Interstate=Marriott, Hilton, Westin, Hampton

• Referall Associations (Best Western)
• -Operating autonomy + affiliation benefits
• -No design specifications, only name

Sources of reservations

Traditions (tree and key/ribbon)

• Sources of revenue
• -Rooms 66.5%, food 20.5%

• Profitability based on Yield Management
• -Rack rate vs. long term contracts (airlines)
• -Multiplier effect must be accounted for

Role of Technology

• Profitability based on Yield Management
• -rack rate vs long term contracts (airlines)
• -multiplier effect must be accounted for

Chain operations refer to groups of properties that are affiliated with each other and have common ownership and/or management control and oversight. Chains operations can be created in a variety of different ways- one of these is franchise agreements. Parent companies may own franchise, or contract their properties. the benefits of chain operations include:

• -Increase purchasing power
• -lower costs of operations
• -common signage and advertising
• -expanded access to centralized reservation systems
• --greater support from professional staff functions such as sales and marketing, finance, and accounting, and human resource management
• -shared database information provides opportunities for cross-selling brands

management information systems that combine data from multiple properties

Performance measures that are used by similar types of businesses to monitor key operations

facilities that are owned and operated as single units with no chain affiliation or common identification

Ratio comparing the total amount of rooms occupied for a given time period to the total number of rooms available for rent

the first hotel in the US (Boston 1829)

Throughout history, travel has introduced visitors to new tastes, and these discoveries continue today. Visiting new places allows us to expand our discovery of food and appreciation of new cultures, ceremonies, and traditions. The influence of food on travel and tourism can be traced back all the way to the Greek/Roman empires. Flavorful spices and herbs were sought by the early adventurers. The Greeks brought home food related treasures from their conquests in Egypt, Persia, Babylon, and India- the common cook in the Roman Empire then was a male Greek slave. Travel decrease until the Grand Tour era where food culture was again spread throughout Europe. Europeans retuned from the America with new native foods. Immigrants brought their favorite food/drinks to the New World which were combined with the new foods creating a distinct regional cuisine. Food/beverage now drive many travel choices.

Example: Oktoberfest & Fiesta

Rhythm= the coordination of each required task or activity

Timing= the sequencing of each task and activity to produce desired results

Flow= the combination of rhythm and timing resulting in a smooth, efficient operation

• Create a desire image/define market
• Attract desire businesses
• Create new business opportunities
• -wine tasting, themes, brunches

Competition in the F&B industry is fierce, with owners and managers facing the added problems of operating on very thin profit margins. This is why the food industry has the highest failure rate. People become finically involved in the F&B industry for the wrong reasons and have false beliefs that they know how to run a restaurant:

• -They crave social recognition
• -they enjoy dining out and thing they know how to deliver the dining experience
• -they have gained status as accomplished cooks at dinner parties

these people fail to realize the long hours and complex problems that come along with the F&B industry. While profit margins are shrinking, controllable costs such as payroll, employee benefits, food costs, and taxes are being driven up by inflation and government policies.

Food quality and food costs are results of effective purchasing. Purchasing is more than simply ordering and receiving F&B products, you must have a great knowledge to make effective purchasing decisions. The purchaser must understand the effects the menu, preparation methods, ingredients, shelf-life, storage facilities, equipment, skill level of staff, and guest expectations have on production and service delivery.

• point of sale systems
• -integrated into management info systems to improve food service efficiency and profitability. they basically provide much better and up to date info on sales and profits

Companies must consider storage and shelf life when purchasing inventory and food in order to better control food costs and increase profits

Agreements directing a majority of purchases to one purveyor. Meaning companies agree to buy a majority of their supplies from one vendor who in turn groups all item into broad categories and then allows negotiation of price on the broad categories..buy in bulk=lower prices

The amount or quality produces or returned after the preparation, processing, or cooking of a product or recipe

adding a percentage cost of a goo or service to arrive at a selling price. Perpetual Inventory

Attractions= permanent, natural or constructed

Venues= Location of events

Events= Temporary attractions

• Part-tim workers are less trained and less committed
• More money is spent using long term workers when there is less income coming in. Wage scales

• Target persons with flexible schedules
• Complimentary amenities (ski/biking)
• Discount season passes at end of season

Thanksgiving, Christmas/New Years, Washington Bday week, College Spring break, Easter, Memorial Day

Yellowstone National Park in 1872

the period of time between high and low or closed seasons when demand for services decreases

Location of Events

Permanent, natural or constructed

People who have permission to run a business within a resort

Temporary gathering places for the exhibition of products and services, often accompanied by entertainment and F&B services

far from the maddening crown, links to the past, seasonal delights, spotlight on sporting activities, year round playgrounds, and bright lights and city sights.

Seasonal weather patterns

• 1. Easy access
• 2. Natural attractions
• 3. Employment opportunities (long-time vs part-time)

• Young adults are the fastest growing demographic
• 3-4 day cruises are the fastest growing type

1. how can more visitors be attracted during less popular shoulder seasons and be encouraged to spend more time/money during their visits?

2. how an large numbers of employees be recruited and trained to deliver high quality customer service?

3. how can cash flow be managed so that enough money is available to meet payroll and other operational expenses during the busy period while retaining funds to meet maintenance on a year round basis?

periods when tourism activities are either increasing toward peak levels or declining from peak levels, also called "shoulder seasons"

resorts which offer alternative activities to offset the seasonality of their primary attractions

Guests are charged one price for a package if services such as accomidations, food, and activities

tourism that takes place in large cities, where hotels and other facilities and services have become an integrated part of urban activites

• Production Orientation:
• -produce goods efficiently
• -customer needs play a small role
• -production vs. satisfaction

• Sales Orientation
• -Market by improving sales effort
• -doesnt account for changes in trends

• Marketing Orientation
• -customer oriented=customer satisfaction
• -changing product to math customer

• Societal Orientation:
• -addresses societal concerns beyond consumer
• -certain products/services may not be in the best interest of the consumer or society

• Traditionally- selling a product/service- having an object and selling it.
• Selling doesnt account for differences in the market place.
• Different Desires, Does not work.

Today- Marketing is everything you do to satisfy your customer, find out exactly what they want.

Your ability to keep up with market changes (dont keep up=decline; keep up=stagnation; keep ahead=rejuvinate)

• Business Objective:
• -simple, measurable, realistic

• Analyzing Marketing Conditions:
• -demography, social/cultural, technology, economy, politics, natural environment

• Analyzing the Competition:
• -who, what, where, and how are they

• Identifying Target Markets=Market Mix:
• -substantial, exploitable, identifiable, durable

• Marketing Strategy- Marketing Mix:
• -established Target market objectives
• -positioning (5 d's)
• **document, decide, differentiate, design, deliver

• Budget Allocation:
• -needs to be flexible in case of change

• Implementation & Evaluation:
• -easy if plain is thorough
• -evaluation is continuous

• Point of Reference:
• -tells who, to do what, when

• Key Market Focus:
• -targeting promotion to reduce expenses

• Integrates Objectives and Priorities:
• -clarifies where to allocate resources

• Criteria for Success:
• -can compare goals/objectives to resources

• Continuity:
• -staff and management may come and go, but plan stays

Document: write down al we are and can be

Decide: what we can be good at and not

Differentiate- from all others

Design- the product

Deliver- to the consumer via media

• Tourist and Employee:
• -Service quality/marketing
• -goal is satisfaction and repeat visitation
• -1st contact starts service cycle
• -controlled with: appearance, conduct principles, incentives, knowledge of goals, constant training

• Tourist and Tourist:
• -can be a bother or an attractions
• --dependent upon motives
• -target market compatibility
• -establish norms of acceptable behavior
• --desire to be with others "like themselves"
• -reduce conflict=comfort=satisfaction

• Tourist and Setting Interactions:
• -Design and Appearance (image)
• --caring, professional, success & quality
• --should be attractive and functional
• -Atmosphere & Orientation
• --self regulating=staff appearance
• --should orient not disorient

• Tourist and Community Interactions:
• -all attributes contribute to satisfaction

• "Selling" employees on their purpose to:
• -foster a customer orientation
• -recruit and retain quality employees

• Customer Service Philosophy
• -process of going "the extra mile"
• -enforced with policy and training

• Create Job Value:
• -a)content, b) relationships, & c) conditions

• internal marketing=marketing to employees
• interactive marketing=takes place on site

can compare goals/objectives to result