What are the 5 core tourism businesses?

Core Tourism Businesses

Go, do, buy, eat and sleep.

While the phrase above may sound like a call to go to Dubai to enjoy their fine restaurants and hotels, it is intended as a list of keywords to sum up and help remember the five most important types of businesses in the tourism industry. 

When tourism generates sales revenue for local businesses, it also generates tax revenue for local governments. To estimate the value of tourism as a commercial enterprise, it is important to have a clear understanding of exactly what types of businesses that make up the so-called tourism industry.

The best starting point for assigning the label tourism business to companies is to look at which companies are pocketing most of the tourism expenditures - or put in another way: What types of companies do tourists hand over most of their money to?

One way to answer this question is to say that tourists spend most of their money on satisfying the following wants:

1. they want to go somewhere (transport)
2. they want to do something (attractions)
3. they want to buy something (travel retail)
4. they want to eat something (food & beverage)
5. they want to sleep somewhere (accommodation)

A tourism business is a company that is prepared to provide what tourists want in exchange for money. Tourism businesses that focus on satisfying the five fundamental wants that are listed above, are usually called core tourism businesses. The term tourism principal is used for the same group of companies when the intention is to distinguish them from another main group of tourism businesses called tourism intermediaries (e.g. travel agents and tour operators).

Go

All tourism involves physical movement of people from the place where they normally reside to a destination outside their usual environment. In other words, for tourism to take place, someone needs to go somewhere. Sometimes tourists will use their own means of transport (e.g. car or motorhome), but other times it is necessary to make use of commercial services to get to where one wants to go. The category of businesses that provides this type of services is the transport industry or the transport sector and includes airlines, ferry companies, railway companies, and car rental companies to name but a few. Note that an important section of the transport industry is concerned with transporting goods (freight), but for tourism it is the passenger side of transport that is of primary interest.

Do

When people travel to a destination, it is usually because they have something they want to do there. Often what the tourists want to do at the destination is free (enjoying the scenery or the climate), and sometimes it is even paid for by their employer (business tourism). But there is also a group of companies whose business it is to provide visitors as well as locals with things to do in exchange for money. This category is what we refer to as the attractions industry or attractions sector. Typical examples of such businesses are amusement parks, museums, leisure activity facilitators, entertainment venues etc. It should be noted that non-commercial attractions such as free beaches, parks, cathedrals etc., although an important part of the tourism experience, must be distinguished from the commercial attractions that is the focus here.

Buy

Most people tend to be more willing to buy non-essential goods and artifacts when they are tourists than when they are at home. Travel retail is perhaps the most contested of the categories with regards to whether it should be considered a tourism business or not. Nevertheless, since most tourist spend a significant part of their travel budget on shopping, it makes sense to include travel retail as part of the tourism core businesses - at least goods that would not have been bought if the person were not on a trip. This may include typical travel articles such as luggage, souvenirs, gifts and duty-free goods, but also other items that tourists buy because they are cheaper at the destination than at home. Note that travel retail stands out from the other categories in that it is the only group that sells physical goods rather than services. Since most of the core tourism businesses provide services, however, it is common to think of tourism in general as a service industry.

Eat

Whether at home or away, people need to eat, and because preparing your own food usually gets more difficult when away from your own kitchen, tourists often rely on the food and beverage industry to sustain them during a trip. It is usually the service of preparing and serving food that is included in this category, and restaurants of various types is the most obvious example. Unprepared food bought in the supermarket is usually more expedient to classify under the retail category. Although food and drink may be regarded as more essential than most of the other tourism business categories, expenditures in this group should not be regarded merely as a necessity for survival. For most tourists, the trip is seen as a special occasion where it is deemed acceptable to spend a bit more on food and drink than usual.

Sleep

For all trips that last more than a day, the tourist will need a place to sleep. This may in some instances be provided by friends or family that the tourist is visiting, and other times tourists will bring their own place to sleep in the form of a tent or a mobile home. Often it is necessary to rent a place to spend the night, however, and this is where the accommodation industry comes in. Examples of commercial accommodation include hotels, motels, rented apartments and camping grounds. As these are services that are rarely purchased by non-travelers, accommodation as well as long-distance transport services are probably the types of companies that fit most easily into most people’s concept of tourism businesses.

Frequently the same business entity can meet the tourists' needs in more than one of the categories discussed above. A hotel will usually also provide the guest with a place to eat, and in the case of some resorts, all five of the core products may be provided by the same company. Regardless of whether the various components of the trip are provided by one or several companies, it is paramount for the quality of the total tourism experience that they all keep a high standard and complement each other. Cooperation and partnership between the different types of tourism businesses must therefore be a priority.