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Tourism industry dictionary

Provided by Business Partners Ltd, South Africa's leading investor in SMEs


passports.jpgIf you're new to the tourism industry or are still weighing your options, you may want to brush up on some of the jargon you'll here from colleagues, potential business partners and service providers. Here is a list of the most common terms and words used.

Business Traveller: A tourist who is travelling to attend a business meeting, conference, seminar or workshop. Their needs are often a little different to the recreational traveller.

Commission: An agreed amount paid to an agency (e.g. travel agent, wholesaler, inbound operator) for selling your particular tourism product. This is usually a percentage of the Gross Selling Price or RACK rate.

Competitive advantage: A benefit that sets you apart from other competitors. It can be gained by offering consumers greater value, such as better service, superior product, cheaper prices, etc.

Consumer benefit: An advantage that a consumer believes they are receiving by purchasing your product.

Customer driven: A strategy or action undertaken as a result of customer demand.

Distribution channels: A group of intermediaries involved in ensuring a product or service reaches the consumer, e.g. travel agents or a wholesaler network.

Demand generators: The motivation behind a person's wants that are backed up by buying power. In other words, the things that drives someone to make certain purchases.

High Season: The time of the year when tourists are most likely to travel, such as the summer months in South Africa; also known as Peak Season.

Hospitality (accommodation) deals with provision of accommodation, e.g. bed and breakfast, guesthouse, self catering, youth backpacker hostels, motel, hotel, etc.

Hospitality (food and beverages) are establishments that primarily provides food services to domestic and international guests, such as restaurants, pubs and taverns, fast food outlets, etc.

Inbound operator: Co-ordinates travel arrangements in South Africa on behalf of overseas wholesalers and retail travel agents. This usually involves planning the South African itinerary, costing the various components (transfers, accommodation, sightseeing etc), negotiating prices and arranging payments. Commission levels can be up to 30%.

General Public Liability Insurance: This type of insurance covers your liability against potential injury inflicted on other persons or damage to their property while in your care or on your premises as a result of your proven negligence.

Gross Selling Price or RACK rates: The price at which products are sold to the consumer or "man in the street". Commissions, discounts or seasonal specials may still be deducted from this price.

GSA or General Sales Agent: This agent has sole rights to distribute particular products, goods or services in a region or country.

Low Season: The time/season when tourist are unlikely to travel, also known as the off-peak season. For example, overseas tourists are less likely to travel in their summer months.

Marketing strategies: The reasoning by which a business hopes to achieve its marketing objectives. A marketing strategy consists of specific initiatives used to target appropriate markets.

Market trends: Patterns in the marketplace that are dictated by consumer behaviour. For example, the German market travels to South Africa in our summer months.

Market segments/sector: A specific group of consumers who share common characteristics like age, sex, wealth, interests. 

Nett Price or Standard Tour Operator (STO) Rates: The total cost to you of your product, including all overheads, consumable and marketing costs plus a profit margin. Additional allowance for a commission structure should still be added on top of this figure.

Package: The combination of two or more components, which is sold at a better price than if a consumer bought them separately. It may include airfares, accommodation, road transfers, touring attractions, restaurants, entrance fees, etc.

Passenger Liability Insurance covers your liability against potential injury if you are in an accident while transporting passengers (on land, sea and air).

Product: Anything that a tourist may use while travelling, that gives them the requirement or experience that they are looking for.

Professional Indemnity Insurance indemnifies you against all sums you may become legally liable to pay arising from any claims made by a customer as a result of neglect, error or breach of contract in the conduct of your business.

Tourist: A person who travels away from home, staying away for at least one night. A domestic tourist is from South Africa, while a regional tourist is from other parts of Africa. An international or overseas tourist is from other parts of the world. They have markedly different travel and expenditure patterns from the first two.

Tourist Guide: A suitably qualified and licensed person who is paid to conduct tours, provide a commentary and explain numerous points and items of interest. This person has intimate knowledge of the area and all aspects related to travelling and touring in a given region.

Travel Agent or Retailer: An intermediary that sells products to consumers for agreed commissions – usually a minimum of 10% of the Gross, RACK or retail price.

Value Added Services: Services that are added to the selling price at no extra cost to the buyer, but there is a perceived extra benefit in the cost, such as free breakfast included with overnight accommodation.

Wholesalers: Operators that package products together and sell it through retail travel agency outlets for agreed commission levels. These commissions are generally a minimum of 20%.

Source: Southern African Tourism Services Association

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