As in any market, tourism consists of a demand and a supply side. The supply side could be referred to those in the tourism industry that supply all goods and services to domestic and foreign visitors at a destination.
Mill and Morrison (1992: 263) refer to a destination as a mix of interdependent variables. This destination mix can also be referred to as an amalgam state Cooper, Fletcher, Shepherd, Gilbert and Wanhill (1998: 103). The components of this amalgam are characterised as the four
As, namely: attractions, amenities (accommodation, food and beverage providers,
entertainment and other services), access (local transport, transport terminal and so forth) and ancillary services (local organisation providing services to the visitors i.e. information bureaux, local and national tourism boards, etc.). The complete mix has to be present for the destination to operate and the complete tourist experience to be delivered. In the light of a destination being an amalgam, there are a number of implications. The quality of each component of the amalgam and the delivery of the tourism service of these components has a direct impact on the success or failure of a destination. Thus, the complementarity of the destination components is difficult to control by destination managers, given the fragmented nature of the SMMTEs.
Tourism is a service sector with a particularly complex product that depends on an extremely fragmented supply. Each link in the chain (travel retailers, travel wholesalers, carriers, hoteliers, restaurateurs, etc.) offers an element of the overall product. The tourist destination is the main place of consumption of the tourist services and therefore, the location and place of activity of tourist businesses. Tourists identify the product with both the businesses providing the service and the destination visited (EU, 2001: 5).
The demand side refers to, conversely, the tourism markets and buyers of the tourism products and services, namely the tourist as the consumer. Tourism supply, indicates Haydam (1997: 2),
is directly affected by and dependent upon tourism demand. It is emphasised however by Rutherford (2006: 140) that often SMMTE owners find themselves in a catch-twenty situation: “do they wait for increased demand to take place before increasing the supply (in which nothing could happen), or do they increase supply in the hope that demand will increase (in which case the risk involved could increase considerably)”.
Economic activities are divided, writes Keyser (2002: 140), into primary, secondary and tertiary sectors. The tertiary sector could also be called the service sector or industry where the tourism industry can be regarded as part of the service sector. The tourism industry, state Keyser (2009: 196-7), Haydam (1996: 2), Rogerson (2007b: 4) and Rogerson (2005: 5), is not a distinguishable economic division, as formally classified in terms of the International Standard Industrial Classifications (SIC), but is made up of several major economic divisions (i.e. trade, hotels, finance, public sector, etc.), group divisions (i.e. retail), sub-group divisions (i.e. retail trade) and specialised divisions (i.e. restaurants). Seven main sectors are described by Tassiopoulos (2008: 11) that constitute the tourism industry; these are graphically depicted in Figure 2.3, and refer to the tourism industry as a range of businesses and organisations involved in the delivery of the tourism products, or offerings, to the tourist. The test for inclusion of an enterprise is the main source of revenue of the said enterprise (Keyser, 2009: 200).
Accommodation & Catering Sector
Travel Wholesale & Retail Sector
Public Sector Support Services
Recreation, Leisure & Attractions Sector Transportation Sector Private Sector Support Services Tourism Industry Events Sector
Figure 2.3: The tourism industry sectors
Source: Tassiopoulos (2008: 11)
One important consequence, according to Rogerson (2007b: 4), of this situation is that there is often considerable uncertainty concerning the precise boundaries of the tourism industry and economy, including what constitutes an SMMTE. It is however evident, states Rogerson (2005a), that the aforementioned tourism industry sub-sectors (as depicted in Figure 2.3) are essentially only the tip of the tourism economic iceberg. The measurement of the broader tourism economy needs to recognise the associated sectors in manufacturing, construction and services which are related and benefit from the growth of the tourism industry. The tourism economy as well as tourism industry are graphically depicted in Figure 2.4.
In general, the tourism industry could thus be described as those businesses, individuals and organisations that are involved directly, or closely, with the visitor industry. A consequence of the tourism sector that has not been formally classified in terms of the SIC is that there is often considerable uncertainty, concerning the precise boundaries of the tourism economy and how
to measure its economic impact for employment creation or contribution to the Gross Domestic Product in South Africa.
Figure 2.4: The structure of the tourism economic iceberg: industry and economy
Source: adapted from Tassiopoulos (2008: 11)
Local definitions and measurement of the boundaries and impact of tourism have been influenced by the system of Tourism Satellite Accounts (TSA) following the international standards of the World Tourism Organisation (UNWTO) which are designed to improve tourism statistics on a global scale. The TSA draws a distinction between the narrow tourism industry and the wider tourism economy. The narrow tourism industry comprises of transport, accommodation, catering, entertainment and related activities. The measurement of the economic performance of the wider tourism economy requires recognition of the associated sectors in manufacturing, construction and services which are linked to and benefit the growth of the tourism industry (Rogerson, 2005: 5).
Food and beverage supply; laundry service oil/gas supply; printing / publishing; utilities; financial services; sanitation services;
furnishing and equipment suppliers; security services; rental car manufacturing; transport administration; ship building; aircraft manufacturing; resort development; glass products iron/steel; computers; concrete; mining; plastics; chemicals; textiles; metal
products; wood.
Private sector tourism support services; public
sector tourism support services; events; accommodation and catering; recreation, leisure
and attractions; transportation; travel wholesale and retail services
Tourism industry
Tourism economy