Tourism Industry

Tourism is a typical activity of fashion that the public participate widely and it has grown in importance over recorded human history. Innumerable articles refer tourism as “the world’s largest industry”; policy-makers, analysts, and scholars often speak of the size of the tourism compared to that of other industries (Smith 2004: 26). These series of misleading statement, together with the mass media’s reports (out of context), make the idea that tourism is a single large industry branded into many people’s minds. However, in this essay I will demonstrate that it is a simplistic and misleading idea, which should be replaced by the plural term, “tourism industries”. Moreover, tourism is not the world’s largest industry, but largest service sector.

Is tourism an industry and if not, what is it and how can it be defined? To answer these questions we need to find the definition of industry first. An industry is a group of firms producing products and/or services that are close substitutes for each other(……). To be considered as an industry, it must meet three factors -- individual businesses, revenues of those businesses, and a common product. Now let’s see what tourism is. However, there is no single definition, that is to say no agreement on what tourism should be. There are some reasons: tourism includes a number of diverse sectors (e.g. transport, accommodation, attractions, other services); tourism includes a number of academic subjects -- some argue that as a subject tourism is conceptually weak; difficult to establish strict boundaries around tourism both as a business and as an area of academic study; weak data sources which make comparisons between countries difficult. In addition, tourism definitions can be either conceptual or technical. By conceptual we mean a way of thinking about tourism that helps us to understand this activity. By technical we mean a way of measuring tourism by applying certain criteria (important for statistical, legislative or operational reasons). Conceptual and technical definitions can be either demand side driven or supply side driven. According to WTO (1994), conceptual definition of tourism in demand side is as follows:

Tourism is the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes.

From this definition, tourism can be viewed as “a social phenomenon, not a production activity; the sum total of all expenditures by all tourists, not the receipt of a select group of similar establishments; and an experience or process, not a product” (Davidson 2005: 29). It doesn’t fit the three factors as an industry. So, tourism is not an industry, but much, much more than an industry. In fact, I would claim that tourism is a collection of industries. Leiper (1979: 400) reported tourism in the supply demand as “the tourist industry consists of all those firms, organisations and facilities which are intended to serve the specific needs and wants of tourists”. Under this view, it is clearly that tourism is supported by a number of industries. For example, hotels, restaurants, transportation, and attractions. It is not a single large industry, but are multiple tourism industries. Just as Leiper wrote in Lew, A.’s blog that there are many tourism industries exist. Further more, King and Hyde (1989) remarked that tourism industries can have “distinct identities and little in common”. It can be divided into three types according to the region where tourists visit: inbound tourism, outbound tourism and domestic tourism.

Now let’s discuss if tourism is the largest industry in the world. From Lew’s (2008) blog, it can be seen that tourism is the 6th (6.4%) most important export, after fuels (16%), telecom equipment (10.2%), chemicals (8.8%), automotive products (7.1%) and agricultural products (6.6%), based on WTO’s data (WTO 2007a, 2007b). While there are some different figures found from UNWTO (2008) that tourism represents approximately 7% of total worldwide exports of goods and services; tourism is the fourth most important export after fuels, chemicals and automotive products. So, it need to consider of how this is measured. There are many problems with measurement: domestic & overseas statistics compiled using different methods; very little local data available; comparability between countries difficult (some countries count tourist arrivals while some count visitor arrivals; some use accommodation registers while some use information at point of entry); figures taken from accommodation registers might not include domestic travel and plus double counting might occur of visitors who change accommodation; most tourism data (e.g. expenditure) is estimated from a relatively small sample; much depends on visitors own recall; the UNWTO has developed Satellite Accounting as a way of standardising tourism accounting but not utilized by all countries to date. Thus, it is difficult to identify what is included in the measurement and the place of tourism in the industry. However, tourism indeed includes a large number of diverse service sectors (e.g. transport, accommodation, attractions, other services), which makes up a third of all commercial services, that is, tourism is the world’s largest service sector industry.

From all above, it is easy to get this conclusion that tourism is not an industry but a collection of industries -- multiple industries. Moreover, it is not the world’s largest industry but the world’s largest service sector industry. At last, it is difficult to identify the position of tourism in industry as lack of data and different methods using in the measurement.