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Economics Gr. 12 T1 W7: MACROECONOMICS: THE FOREIGN EXCHANGE MARKET

Economics Grade 12 Term 1 Wk7 Lesson: MACROECONOMICS: THE FOREIGN EXCHANGE MARKET

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AP®︎/College Macroeconomics

Course: ap®︎/college macroeconomics   >   unit 6.

• Currency exchange introduction
• Supply and demand curves in foreign exchange

Lesson summary: the foreign exchange market

• The foreign exchange market

Lesson summary

• A currency is being bought and sold, rather than a good or service
• The currency being bought and sold is being bought with a different currency.

Key takeaways

Why the demand for a currency is downward sloping, the equilibrium exchange rate is the interaction of the supply of a currency and the demand for a currency, key graphical models, common misperceptions.

• We are used to thinking about buying things with a currency, so many new learners are confused about what the price should be in the market for a currency. Buthe price of an orange is never given in oranges; it’s given in some other currency. Just like an orange, a dollar can’t be bought with itself, but instead it needs to be bought with some other currency.
• A common misperception is to confuse 1) the things that cause shifts in the supply or demand of a currency with 2) changes in quantity supplied or quantity demanded. To keep this straight, ask yourself “why is this change happening?” If a change is happening in response to a change in the exchange rate, then you are moving along a curve. If a change is happening in response to something else, the entire curve shifts.
• It might seem like a time saver to take short-cuts on labeling graphs, but this is never a good idea. Take your time labeling the foreign exchange market carefully using the elements of a market:
• Demand - the demand for the currency that is being exchanged
• Supply - the supply of the currency that is being exchanged
• Quantity - the quantity of the currency that is being exchanged
• Price - some other currency that is being used to buy the currency that is being exchanged

Questions for review

• China and Ghana are major trading partners. The currency of China is the y u a n ‍   and the currency of Ghana is the c e d i ‍   . In a correctly labeled graph of the foreign exchange market for the cedi, show the impact of an increase in imports from Ghana to China. Then, explain what is going on in your graph. I tried my best. Can I check my work? In order for China to import more goods from Ghana, it will need more cedi to buy Ghanian goods. Therefore, the demand for the cedi will increase. As a result of an increase in the demand for the cedi, the exchange rate of yuan per cedi will increase (in other words, it will take more yuan to buy each cedi).
• List 3 things that would cause the exchange rate of the U.S. dollar, in terms of Yen, to increase.

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Foreign Exchange Rate Notes Class 12 PDF

• Post author: Anuj Kumar
• Post published: 30 December 2021
• Post category: Commerce
• Post comments: 0 Comments

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Table of Contents

• 1 Download Foreign Exchange Rate Class 12 Notes PDF
• 2 Foreign Exchange Rate Class 12 Notes PDF
• 3 Foreign Exchange Rate Class 12 MCQ Questions PDF
• 4 Foreign Exchange Rate Class 12 Mcq Questions and Answers PDF
• 5 Foreign Exchange Rate Class 12 Questions and Answers PDF
• 6 Foreign Exchange Rate Class 12 Important Questions PDF
• 7.1 Concept of Foreign Exchange
• 7.2 Foreign Exchange Rate
• 7.3 Functions of Foreign Exchange Market
• 7.4 Sources of Demand of Foreign Exchange

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Macroeconomics Class 12

• Introduction to Macroeconomics
• National Income Accounting
• Methods of Calculating National Income
• Money and Banking
• Aggregate Demand and Aggregate Supply
• Short Run Equilibrium Output

Foreign Exchange Rate

• Government Budget and the Economy
• Balance of Payments

Indian Economy Class 12

• Indian Economy on the Eve of Independence
• Indian Economy 1950 to 1990
• Economic Reforms Since 1991
• Liberalisation Privatisation and Globalisation
• Human Capital Formation in India
• Rural Development
• Employment and Unemployment
• Infrastructure
• Environment and Sustainable Development
• Comparative Development Experiences of India and Its Neighbours

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Foreign Exchange Rate Notes Class 12

Concept of foreign exchange.

Foreign exchange refers to all the currencies of the rest of the world other than the domestic currency of the country. For example, in India, the US dollar is the foreign exchange.

The rate at which one currency is exchanged for another is called Foreign Exchange Rate. n other words, the foreign exchange rate is the price of one currency stated in terms of another currency. For example, if one U.S dollar is exchanged for 60 Indian rupees, then the rate of exchange is 1$ = Rs. 60 or 1 Rs = 1/60 or 0.0166 U.S. dollar.

The foreign exchange market is the market where the national currencies are converted, exchanged, or traded for one another.

Functions of Foreign Exchange Market

• Transfer Function: Transfer function refers to transferring purchasing power among countries.
• Credit Function: It implies the provision of credit in terms of foreign exchange for the export and import of goods and services across different countries of the world.
• Hedging Function: The hedging function pertains to protecting against foreign exchange risks. Where Hedging is an activity that is designed to minimize the risk of loss.

Sources of Demand of Foreign Exchange

The demand (or outflow) for foreign exchange comes from the people who need it to make payments in foreign currencies. It is demanded by the domestic residents for the following reasons:

• Imports of Goods and Services: When India imports goods and services, foreign exchange is demanded to make the payment for imports of goods and services.
• Tourism: Foreign exchange is demanded to meet expenditure incurred in foreign tours.
• Unilateral Transfers Sent Abroad: Foreign exchange is required for making unilateral transfers like sending gifts to other countries.
• Purchase of Assets in Foreign Countries: It is demanded to make payment for the purchase of assets, like land, shares, bonds, etc. in foreign countries.
• Repayment of loans to Foreigners: As and when we have to pay interest and repay the loans to foreign lenders, we require foreign exchange.
• Speculation: Demand for foreign exchange arises when people want to make gains from the appreciation of the currency.

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Commerce Aspirant » Economics Class 12 » Foreign Exchange Rate Class 12 Notes

Foreign Exchange Rate Class 12 Notes

Introduction of cbse exchange rate class 12.

In foreign exchange rate class 12, we will study about the foreign exchange rates, depreciation and appreciation of currencies, determination of foreign exchange rate and foreign exchange markets.

Every country has their own currency to exchange goods and services. But the currency of one country is not acceptable in the other country. For this purpose, we need foreign exchange rate to convert the domestic currency into foreign currency.

FOREIGN EXCHANGE RATE

It is the exchange rate at which one currency is exchanged for other currency in the exchange rate market. It represents the price of one currency in terms of other currency.

This exchange rate depends upon the demand and supply of foreign exchange with other countries indulged in exchanging. For example, the value of $1 is equals to Rs. 76.

DEPRECIATION V/S APPRECIATION

Currency depreciation.

• It refers to decrease in the value of domestic currency in relation to the foreign currency.
• It means the value of domestic currency is less than the value of foreign currency and domestic currency is required in more number to buy the foreign currency.
• It is caused because of (1) increase in demand, or (2) decrease in supply.
• Due to depreciation of domestic currency, the exports will rise because the domestic currency becomes relatively cheaper and the foreign country will purchase more from the domestic country.
• The imports will fall because the domestic country need to pay more currency to buy same amount of goods and services.

Currency Appreciation

• It refers to increase in the value of domestic currency in relation to the foreign currency.
• It means the value of domestic currency is more than the value of foreign currency and domestic currency is required in less number to buy foreign currency.
• It is caused because of (1) decrease in demand, or (2) increase in supply.
• Due to appreciation of domestic currency, the exports will fall because domestic currency becomes relatively expensive and foreign country will purchase less from domestic country.
• The imports will rise because the domestic country will be able to buy more with the same amount of currency.

TYPES OF EXCHANGE RATE SYSTEMS

There are 3 types of Foreign Exchange Rate Systems:

• Fixed exchange rate system
• Flexible exchange rate system

Manages floating exchange rate system

Fixed exchange rate sysytem.

• It refers to the system in which exchange rate for the currency is fixed by the government. The main aim of this system is to fix the exchange rate and ensure stability in foreign exchange.
• In this system, each country keeps something as a common unit, such as gold or any other precious metal, as some external standard. With the help of this, the exchange rate with the other country is determined by the value of difference between the external unit kept by both the countries.
• When the value of currency is fixed in terms of other currency, it is known as parity value .
• Fixed exchange rate is of two types:
• Gold Standard System : In this system, the value of all the currencies is measured by keeping something as a common unit. In this system, the common unit is taken as gold. Each country keeps the amount of gold they have and the excess and deficit of gold between the countries decides the foreign exchange rate.
• Adjustable Peg System : In this system, the value of currencies is pegged or fixed to a major currency. Under this system ,all the currencies were pegged to US dollars at a fixed exchange rate.
• This gives rise to the devaluation and revaluation of domestic currency. Devaluation refers to the decrease in the value of domestic currency intentionally done by the government. Revaluation refers to increase in the value of domestic currency intentionally done by the government.

FLEXIBLE EXCHANGE RATE SYSTEM

• It refers to a system in which exchange rate is determined by the forces of demand and supply of the foreign currencies in the foreign exchange market.
• This system of exchange is also called ‘Floating Exchange Rate’.
• There is no intervention of the government in fixing the exchange rate.
• This gives rise to the depreciation and appreciation of domestic currency in the foreign exchange market.
• In this system of exchange, the foreign exchange rate keeps on changing continuously.

FIXED EXCHNAGE RATE SYSTEM V/S FLEXIBLE EXCHNAGE RATE SYSTEM

• It refers to a system in which exchange rate is determined by the market forces of demand and supply but there is some interference of the Central banking fixing the foreign exchange rate in the foreign exchange market.
• It a hybrid of fixed exchange rate and flexible exchange rate system.
• It is also known as ‘Dirty Floating’ as it is done by the RBI to maintain the forex rate within the desired target value.
• The rate is freely determined by the market forces but the RBI intervenes in between to restrict the fluctuations in the exchange rate when it exceeds the limit.

DEMAND AND SUPPLY OF FOREIGN EXCHANGE

Demand and supply of foreign exchange happens when the countries want to trade their goods and services internationally. This causes deprecation or appreciation of currencies as well.

DEMAND FOR FOREIGN EXCHANGE

The demand of foreign exchange arises when the people need foreign exchange to purchase goods or services from other countries. The demand for foreign exchange arises because of the following reasons:

• Imports of goods and services: Foreign exchange is required to make payment for the goods or services purchased from other country.
• Unilateral transfers to rest of the world: Foreign exchange is required to send gifts or money to the person living abroad.
• Tourism: Foreign exchange is required to meet the expenses made during the foreign tours.
• Speculations: Foreign exchange is required when people want to gain money from the speculative activities or currency appreciation.
• Purchase of Assets in foreign country: Foreign exchange is required to make payments for the purchase of land, building, shares, debentures, bonds, etc…. in foreign countries.

There exists a negative relation between foreign exchange rate and demand for foreign exchange. The Demand curve of the foreign exchange is ‘DOWNWARD SLOPING’ because of inverse relation between demand of foreign exchange and foreign exchange rate. When the foreign exchange rate decreases, people demand more of foreign exchange. When the foreign exchange rate rises, its demand decreases.

SUPPLY OF FOREIGN EXCHANGE

The supply of foreign exchange arises when people demand for the foreign exchange to purchase goods or services form their country. The supply for foreign exchange arises because of the following reasons:

• Export of goods and services: Foreign exchange is earned when goods or services are purchased form the domestic country.
• Foreign investment: When the foreign country makes investment in domestic country, the foreign exchange comes to the domestic country.
• Speculations: Supply of foreign exchange comes when the foreign countries speculate on the value of foreign currency.
• Unilateral transfers from abroad: Supply of foreign exchange increases when the foreign country gives remittance to domestic country in form of gifts or transfers.

There exists a positive relationship between foreign exchange rate and supply of foreign exchange. When the foreign exchange rate decreases, its supply also falls. When foreign exchange rate rises, its supply also increases.

DETERMINATION OF FOREIGN EXCHNAGE RATE

• Foreign exchange rate is determined by the flexible exchange rate system. In this, the forces of demand and supply meet together to determine the foreign exchange rate.
• The point of equilibrium where demand curve of foreign exchange meets supply curve of foreign exchange is the point of foreign exchange rate.
• If the exchange rate rises, the demand for forex falls and the supply for forex rises. In this case, there will be excess supply. This situation pushes the exchange rate downwards and foreign exchange rate falls.
• If exchange rate falls, the demand for forex rises and supply for forex falls. This will lead to excess demand. This situation pushes the exchange rate upwards and foreign exchange rate rises.

CHANGES IN EXCHANGE RATE

The equilibrium exchange rate is changed due to changes in the demand and supply of foreign exchange rate.

CHANGE IN DEMAND

Change in demand may be because of either ‘increase in demand’ or ‘decrease in demand’.

• Increase in supply: Due to increase in supply, the supply curve will shift  leftwards. As a result of this, the exchange rate will fall. Due to the fall in exchange rate, the domestic currency will be appreciated.
• Decrease in supply: Due to decrease in supply, the supply curve will shift  rightwards. As a result of this, the exchange rate will rise. Due to the increase in exchange rate, the domestic currency will be depreciated.

Change in Supply Curve of Foreign Exchange

Change in supply may be because of either ‘increase in supply’ or ‘decrease in supply’.

• Increase in supply: Due to increase in supply, the supply curve will shift to leftwards. As a result of this, the exchange rate will fall. Due to the fall in exchange rate, the domestic currency will be appreciated.
• Decrease in supply: Due to decrease in supply, the supply curve will shift to rightwards. As a result of this, the exchange rate will rise. Due to the increase in exchange rate, the domestic currency will be depreciated.

FOREIGN EXCHNAGE MARKET

Foreign exchange market is the market where the foreign currencies are bought and sold. The foreign exchange market is not a place but a system where the exchange rate is determined and foreign currencies are exchanged.

The buyers and sellers of foreign currency includes individual, firms, commercial banks, central bank and foreign exchange brokers.

FUNCTIONS OF FOREIGN EXCHANGE MARKET

Foreign exchange market performs the following functions:

• Transfer function : This function transfers the purchasing power between the countries involving in purchasing and selling of foreign exchange.
• Credit function: It provides credit to the foreign countries in terms of foreign currency for the purpose of international payments.
• Hedging functions: This functions of foreign exchange market provides security form the risk of fluctuation of prices in the foreign exchange market. When seller and buyer enter into an agreement for a future date at the current year price, it is called hedging. This is done to avoid the losses that might be caused due to exchange rate variation.

TYPES OF FOREIGN EXCHNAGE MARKET:

Foreign exchange markets can be classified into two types: Spot and Forward.

• Spot market: Spot market is a market in which the exchange of currencies is done immediately. This market is of daily nature and deals only in on the spot transactions. The rate of exchange at which transactions in spot market are dealt is known as spot exchange rate or current exchange rate .
• Forward market: Forward market refers to the market in which the exchange of currencies is fixed for a future date at the current rate of foreign exchange. Generally, the international transactions are fixed upon an early date and completed on a future date. This is done to minimize the risk of uncertainty and to make profits for speculative purpose. The exchange rate at which the transactions in this market are done is called forward exchange rate .

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Economics Project Class 12 (Foreign Exchange Markets)

This is a more theoretical project than needed. If you are referring to this then please do add so me data and more graphs. Read less

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• 1. 1) COVER PAGE 2) CERTIFICATE 3) ACKNOWLEDGMENT I am extremely overwhelmed in all the humbleness and gratefulness to acknowledge my depth to all those who have helped me put all those ideas well above the level of simplicity and into something concrete. I would like to express my special thanks of gratitude to my teacher Mrs. Modini Srinivas who gave me the golden opportunity to do this wonderful project which helped me in a lot of research and made me more knowledgeable on the topic than before. To complete this project without the help of my teachers and friends & family’s support was next to impossible. Thank you for everything.
• 2. INTRODUCTION The foreign exchange market is a global decentralized or over- the-counter market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of trading volume, it is by far the largest market in the world with an average daily volume of above 5 trillion US Dollars. Foreign exchange market is the market in which foreign currencies are bought and sold. One sells goods abroad on a rate which is completely determined by this market. The buyers and sellers include individuals, firms, foreign exchange brokers, commercial banks and the central bank. Like any other market, foreign exchange market is a system, not a place. The currencies are sold in the market like any other securities. The transactions in this market are not confined to only one or few foreign currencies. In fact, there are a large number of foreign currencies which are traded, converted and exchanged in the foreign exchange market. Tonnes of people make a living out of the trading in the foreign exchange markets.
• 3. 1.1 AIM & OBJECTIVES 1.2 RELEVANCE TO THE SUBJECT Foreign exchange is the trading of different currencies or units of account. It is important because the exchange rate, the price of one currency in terms of another, helps to determine a nation’s economic health and hence the well being of all the people residing it. 1.3 METHODOLOGY OF THE STUDY 2.0 PROJECT DETAILS: 2.1 HISTORY The Foreign Exchange Market was evolved from the Bretton Woods System, which was a system of payments based on USD, which defined all the currencies in relation of the USD. It was towards the end of the World War II which made the US Dollar more stable and was effectively the world currency, a currency to which other currencies were pegged. The US Dollar was serving as the price of gold as it was considered “as good as gold”. This system went on from 1944 to 1971 when the Bretton Woods Agreement broke down and the modern foreign exchange was born.
• 4. 2.2 TYPES OF FOREIGN EXCHANGE RATES: [A]Floating rates: The floating rate is one of the primary reasons for fluctuation of currency in foreign exchange market. This is one of the most important common and main type of exchange rate. Under this all the economies of developed countries allow their currency to flow freely. When the value of the currency becomes low it makes the imports more as it becomes cheaper for the exporters, so the countries domestic goods and services are demanded more in foreign buyers. The country can withstand the fluctuation only if the economy is strong. When the country’s economy is able to meet the demand, only then it can adjust between the Foreign trade and domestic trade automatically. [B]Fixed Rates Fixed exchange rates are used to attract the foreign investments and to promote foreign trade. This type of rate is used only by small developed countries. The purpose of fixed exchange rate system is to keep a currency’s value within a narrow band. Fixed exchange rates provide greater certainty for exporters and importers and help the government maintain low inflation. On the other hand, monetary policy of the country becomes ineffective. The exchange value of the currency does not move. This Normally reduces the country’s currency against foreign currencies.
• 5. [C]Pegged Rates Pegged exchange rates are common for underdeveloped countries and developing countries. It means that the currency of that particular economy is pegged to some other currency or a bunch of other currencies. This makes their currency more stable as the other currencies. The Indian Rupee was once pegged to the British Pound Sterling and the US dollar as well. [D]Managed Floating A managed floating exchange rate is a regime that allows an issuing central bank to intervene regularly in Foreign Exchange markets in order to change the direction of the currency's float and shore up its balance of payments in excessively volatile periods. This regime is also known as a “dirty float”.
• 6. 2.3WHY IS THE FOREIGN EXCHANGE MARKET UNIQUE? 1) Its huge trading volume is one of the highest in the whole world and is representing the largest asset class in the world leading to high liquidity. 2) It’s geographical dispersion- it is spread across each and every economy in the world. 3) It is functioning 24 hours except for the weekends 4) A variety of factors affect the exchange rates. 5) As such, it is considered the closest to the ideal market of perfect competition. 2.4 ADVANTAGES AND DISADVANTAGES OF FOREIGN EXCHANGE MARKET. Advantages 1) The forex market is extremely liquid; hence it’s rapidly growing popularity. Currencies may be converted when bought or sold without causing too much movement in the price and keeping losses to a minimum. 2) As there is no central bank, trading can take place anywhere in the world and operates on a 24-hour basis apart from weekends. 3) An investor needs only small amounts of capital compared with other investments. Forex trading is outstanding in this regard. 4) It is an unregulated market, meaning that there is no trade commission overseeing transactions and there are no restrictions on trade.
• 7. 5) In common with futures, forex is traded using a “good faith deposit” rather than a loan. The interest rate spread is an attractive advantage. Disadvantages 1) The major risk is that one counterparty fails to deliver the currency involved in a very large transaction. In theory at least, such a failure could bring ruin to the forex market as a whole. 2) Investors need a lot of capital to make good profits because the profit margins on small-scale trades are very low. 2.5 FINANCIAL INSTRUMENTS FOR FOREIGN EXCHANGE MARKETS Simply stated, a Financial Instrument is any type of a financial medium such as bills of exchange, bonds, currencies, stocks, etc., that are used for borrowing purposes in financial markets. When you are discussing the forex market, the following entities are designated as financial instruments: [A]Forwards: It the agreement established between two parties wherein they purchase, sell, or trade an asset at a pre-agreed upon price is called a forward or a forward contract. Normally, there is no exchange of money until a pre-established future date has been arrived at. Forwards are normally performed as a hedging instrument used to either deter or alleviate risk in the investment activity.
• 8. [B]Futures: It is a forward transaction that contains standard contract sizes and maturity dates are considered futures. Futures are traded on exchanges that have been created for that purpose exclusively. Just like with commodity markets, a future in the forex market normally designates a contract length of 3 months in duration. Interest amounts are also included in a futures contract. [C]Options: Options are derivatives (financial instruments whose values fluctuate based on underlying variables) wherein the owner has the right to, but is not necessarily obligated to, exchange one currency for another at a pre-agreed upon rate and a specified date. When you talk about options in any form (stock market, forex, or any other market), the forex market is the deepest and largest, as well as the most liquid market of any options in the world. [D]Spot: Where futures contracts normally employ a 3-month timeframe, spot transactions encompass a 48-hour delivery transaction period. [E]Swap: Currency swaps are the most common type of forward transactions. A swap is a trade between two parties wherein they exchange currencies for a pre-determined length of time. The transaction then is reversed at a pre-agreed upon future date. Currency swaps can be negotiated to mature up to 30 years in the future, and involve the swapping of the principle amount. Interest rates are not "netted" since they are denominated in different currencies. All of these instruments are used by almost each exporter or importer one way or other in order to assist the hedging activities. Let us understand this with the help of an example: A is an Importer from India and imports goods worth of $10000 from The United States of America. A doesn’t want to bear any foreign exchange rate fluctuation risk.
• 9. A goes to a bank(say HDFC Ltd.) and buys $10000 from there. The bank will charge a nominal fee in exchange of the service and A will have to pay the amount according to the current exchange rate i.e. 75 amounting to Rs. 7,50,000.Let us assume that the payment terms are of 3 months. News are that the rupee might get depreciated in the next few moths to Rs 80 a Dollar. But as A has bought $10000 from HDFC Ltd. from say futures market, He doesn’t have to worry about the fluctuation. After three months, A’s client will receive money from the importer and get the money booked as per the exchange rate earlier, i.e. 750,000 Rs. This is the way people hedge their Accrued Incomes… 2.6 VARIOUS PARTICIPANTS OF THE FOREIGN EXCHANGE MARKET: Governments: Governments have requirements for foreign currency, such as paying staff salaries and local bills for embassies abroad, or for arraigning a foreign currency credit line, most often in dollars, for industrial or agricultural development in the third world, interest on which, as well as the capital sum, must periodically be paid. Foreign exchange rates concern governments because changes affect the value of product and financial instruments, which affects the health of a nation’s markets and financial systems. Banks: There are different types of banks, all of which engage in the foreign exchange market to greater or lesser extent. Some work to signal desired movement in the market without causing overt change, while some aggressively manage their reserves by
• 10. making speculative risks. The vast majority, however, use their knowledge and expertise is assessing market trends for speculative gain for their clients. Brokerage Houses: These exist primarily to bring buyer and seller together at a mutually agreed price. The broker is not allowed to take a position and must act purely as a liaison. Brokers receive a commission from both sides of the transaction, which varies according to currency handled. The use of human brokers has decreased due mostly to the rise of the interbank electronic brokerage systems. International Monetary Market: The International Monetary Market (IMM) in Chicago trades currencies for relatively small contract amounts for only four specific maturities a year. Originally designed for the small investor, the IMM has grown since the early 1970s, and the major banks, who once dismissed the IMM, have found that it pays to keep in touch with its developments, as it is often a market leader. Money Managers: These tend to be large New York commission houses that are often very aggressive players in the foreign exchange market. While they act on behalf of their clients, they also deal on their own account and are not limited to one time zone, but deal around the world through their agents. Corporations: Corporations are the actual end-users of the foreign exchange market. With the exception only of the central banks, corporate players are the ones who affect supply and demand. Since the corporations come to the market to offset currency exposure they permanently change the liquidity of the currencies being dealt with.
• 11. Retail Clients: This includes smaller companies, hedge funds, companies specializing in investment services linked by foreign currency funds or equities, fixed income brokers, the financing of aid programs by registered worldwide charities and private individuals. Retail investors trade foreign exchange using highly leveraged margin accounts. The amount of their trading in total volume and in individual trade amounts is dwarfed by the corporation’s anointer bank markets. Exchange Brokers: Services of brokers are used to some extent, Forex market has some practices and tradition depending on this the residing in other countries are utilised. Local brokers can conduct Forex transactions as per the rules and regulations of the Forex governing body of their respective country. Overseas Forex market: The Forex market operates all around the clock and the market day initiates with Tokyo and followed by Bahrain Singapore, India, Frankfurt, Paris, London, New York, and Sydney before things are back with Tokyo the next day Speculators: In order to make profit on the account of favourable exchange rate, speculators buy foreign currency if it is expected to appreciate and sell foreign currency if it is expected to depreciate. They follow the practice of delaying covering exposures and not offering a cover till the time cash flow is materialized. Other financial institutions involved in the foreign exchange market include: 1. Stock brokers Commodity 2. Firms Insurance 3. Companies Charities 4. Private Institutions & Individuals
• 12. 2.7CHARACTERISTICS OF THE FOREX MARKETS: Changing Wealth: The ratios between the currencies of two countries are exchange rates in forex. If one currency loss its value in the market and at the same time the value of the currency increases this causes the fluctuations in the exchange rate in foreign exchange market. For Example, over 20 years ago a single US dollar bought 360 Japanese Yen, whereas at present 1 US dollar buys 110 Japanese Yen; this explains that the Japanese Yen has risen in value, and the US dollar has decreased in value (relative to the Yen). This is said to be a shift in wealth, as a fixed amount of Japanese Yen can now purchase many more goods than two decades ago. No Centralized Market: The foreign exchange market does not have a centralized market like a stock exchange. Brokers in the foreign exchange market are not approved by a governing agency. Business network and operation market of foreign exchange takes place without any unification in transaction. Foreign exchange currency trading has been reformed into a non-formal and global network organization it consists of advanced information system. Trader of forex should not be a member of any organization. Circulation of work: Foreign exchange market has member from all the countries, each country has different geographical positions so forex operates all around the clock on working days (i.e.) Monday to Friday every week. Because the time in Australia is different than in European countries, this kind of 24 hours operation, free from any time is an ideal environment for investors. For instance, a
• 13. trader may buy the Japanese Yen in the morning at the New York market, and in the night if the Japanese Yen rises in the Hong Kong market, the trader can sell in the Hong Kong market. More number of opportunities is available for the forex traders. In FOREX market most trading takes place in only a few currencies; the U.S. Dollar ($), European Currency Unit (€), Japanese Yen (¥), British Pound Sterling (£), Swiss Franc 2.8 FACTORS AFFECTING MOVEMENT OF EXCHANGE RATES Aside from factors such as interest rates and inflation, exchange rate is one of the most important determinants of a country's relative level of economic health. Exchange rates play a vital role in a country's level of trade, which is critical to every free market economy in the world. For this reason, exchange rates are among the most watched analyzed and governmentally manipulated economic measures. But exchange rates matter on a smaller scale as well: they impact the real return of an investor's portfolio. Here we look at some of the major forces behind exchange rate movements. Before we look at these forces, we should sketch out how exchange rate movements affect a nation's trading
• 14. relationships with other nations. A higher currency makes a country's exports more expensive and imports cheaper in foreign markets; a lower currency makes a country's exports cheaper and its imports more expensive in foreign markets. A higher exchange rate can be expected to lower the country's balance of trade, while a lower exchange rate would increase it. Numerous factors determine exchange rates, and all are related to the trading relationship between two countries. Remember, exchange rates are relative, and are expressed as a comparison of the currencies of two countries. The following are some of the principal determinants of the exchange rate between two countries. Note that these factors are in no particular order; like many aspects of economics, the relative importance of these factors is subject to much debate. Differentials in Inflation: As a general rule, a country with a consistently lower inflation rate exhibits a rising currency value, as its purchasing power increases relative to other currencies. During the last half of the twentieth century, the countries with low inflation included Japan, Germany and Switzerland, while the U.S. and Canada achieved low inflation only later. Those countries with higher inflation typically see depreciation in their currency in relation to the currencies of their trading partners. This is also usually accompanied by higher interest rates. Differentials in Interest Rates: Interest rates, inflation and exchange rates are all highly correlated. By manipulating interest rates, central banks exert influence over both inflation and exchange rates, and changing interest rates impact inflation and currency values. Higher interest rates offer lenders in an economy a higher return relative to other countries. Therefore, higher interest rates attract foreign capital
• 15. and cause the exchange rate to rise. The impact of higher interest rates is mitigated, however, if inflation in the country is much higher than in others, or if additional factors serve to drive the currency down. The opposite relationship exists for decreasing interest rates - that is, lower interest rates tend to decrease exchange rates. Current-Account Deficits: The current account is the balance of trade between a country and its trading partners, reflecting all payments between countries for goods, services, interest and dividends. A deficit in the current account shows the country is spending more on foreign trade than it is earning, and that it is borrowing capital from foreign sources to make up the deficit. In other words, the country requires more foreign currency than it receives through sales of exports, and it supplies more of its own currency than foreigners demand for its products. The excess demand for foreign currency lowers the country's exchange rate until domestic goods and services are cheap enough for foreigners, and foreign assets are too expensive to generate sales for domestic interests. Public Debt: Countries will engage in large-scale deficit financing to pay for public sector projects and governmental funding. While such activity stimulates the domestic economy, nations with large public deficits and debts are less attractive to foreign investors. The reason? A large debt encourages inflation, and if inflation is high, the debt will be serviced and ultimately paid off with cheaper real dollars in the future. In the worst case scenario, a government may print money to pay part of a large debt, but increasing the money supply inevitably causes inflation. Moreover, if a government is not able to service its deficit through domestic means (selling domestic bonds, increasing the money supply), then it must increase the supply of securities for sale to foreigners, thereby lowering their prices. Finally, a large debt may
• 16. prove worrisome to foreigners if they believe the country risks defaulting on its obligations. Foreigners will be less willing to own securities denominated in that currency if the risk of default is great. For this reason, the country's debt rating (as determined by Moody's or Standard& Poor's, for example) is a crucial determinant of its exchange rate. Terms of Trade: Trade of goods and services between countries is the major reason for the demand and supply of foreign currencies. A ratio comparing export prices to import prices, the terms of trade is related to current accounts and the balance of payments. If the price of a country's exports rises by a greater rate than that of its imports, its terms of trade have favourably improved. Increasing terms of trade shows greater demand for the country's exports. This, in turn, results in rising revenues from exports, which provides increased demand for the country's currency (and an increase in the currency's value). If the price of exports rises by a smaller rate than that of its imports, the currency's value will decrease in relation to its trading partners. This is a typical case for underdeveloped countries which rely on imports for development needs. The current account balance (deficit or surplus) thus reflects the strength and weakness of the domestic currency.
• 17. FUNDAMENTAL FACTORS VIZ. POLITICAL STABILITY AND ECONOMIC PERFORMANCE: Fundamental factors include all such events that affect the basic economic and fiscal policies of the concerned government. These factors normally affect the long-term exchange rates of any currency. On short-term basis on many occasions, these factors are found to be rather inactive unless the market attention has turned to fundamentals. However, in the long run exchange rates of all the currencies are linked to fundamental causes. The fundamental factors are basic economic policies followed by the government in relation to inflation, balance of payment position, unemployment, capacity utilization, trends in import and export, etc. Normally, other things remaining constant the currencies of the countries that follow the sound economic policies will always be stronger. Similar for the countries which are having balance of payment surplus, the exchange rate will always be favorable. Conversely, for countries facing balance of payment deficit, the exchange rate will be adverse. Continuous and ever growing deficit in balance of payment indicates over valuation of the currency concerned and the dis-equilibrium created can be remedied through devaluation. Foreign investors inevitably seek out stable countries with strong economic performance in which to invest their capital. A country with such positive attributes will draw investment funds away from other countries perceived to have more political and economic risk. Political turmoil, for example, can cause a loss of confidence in a currency and a movement of capital to the currencies of more stable countries.
• 18. Political and Psychological factors: Political and psychological factors are believed to have an influence on exchange rates. Many currencies have a tradition of behaving in a particular way for e.g. Swiss Franc as a refuge currency. The US Dollar is also considered a safer haven currency whenever there is a political crisis anywhere in the world. Speculation: Speculation or the anticipation of the market participants many a times is the prime reason for exchange rate movements. The total foreign exchange turnover worldwide is many times the actual goods and services related turnover indicating the grip of speculators over the market. Those speculators anticipate the events even before the actual data is out and position themselves accordingly in order to take advantage when the actual data confirms the anticipations. The initial positioning and final profit taking make exchange rates volatile. These speculators many times concentrate only on one factor affecting the exchange rate and as a result the market psychology tends to concentrate only on that factor neglecting all other factors that have equal bearing on the exchange rate movement. Under these circumstances even when all other factors may indicate negative impact on the exchange rate of the currency if the one factor that the market is concentrating comes out positive the currency strengthens. Capital Movement: The phenomenon of capital movement affecting the exchange rate has a very recent origin. Huge surplus of petroleum exporting countries due to sudden spurt in the oil prices could not be utilized by these countries for home consumption entirely and needed to be invested elsewhere productively. Movement of these Petro
• 19. dollars, started Affecting the exchange rates of various currencies. Capital tended to move from lower yielding to higher yielding currencies and as a result the exchange rates moved. International investments in the form of Foreign direct investment (FDI) and Foreign Institutional Investments (FII) have become the most important factors affecting the Exchange rate in today’s open world economy. Countries which attract large capital Inflows through foreign investments, will witness an appreciation in its domestic currency as its demand rises. Outflow of capital would mean a depreciation of domestic currency. Intervention: Exchange rates are also influenced in no small measure by expectation of changes in regulation relating to exchange markets and official intervention. Official intervention can smoothen an otherwise disorderly market but it is also the experience that if the authorities attempt half-heartedly to counter the market sentiments through intervention in the market, ultimately more steep and sudden exchange rate swings can occur. In the second quarter of 1985 the movement of exchange rates of major currencies reflected the change in the US policy in favour of coordinate exchange market intervention as a measure to bring down the value of dollar. Stock Exchange Operations: Stock exchange operations in foreign securities, debentures, stocks and shares, influence the demand and supply of related currencies, thus influencing their exchange rate. Political Factors: Political scenario of the country ultimately decides the strength of the country. Stable efficient government at the centre will encourage positive development in the country, creating success up investor confidence and a good image in the international market. An economy with a strong, positive image will obviously
• 20. have a strong domestic currency. This is the reason why speculations raise considerably during the parliament elections, with various predictions of the future government and its policies. In 1998, the Indian rupee depreciated against the dollar due to the American sanctions after India conducted the Pokhran nuclear test. Others: The turnover of the market is not entirely trade related and hence the funds placed at the disposal of foreign exchange dealers by various banks, the amount which the dealers can raise in various ways, banks' attitude towards keeping open position during the course of a day, at the end of the day, on the eve of weekends and holidays ,window dressing operations as at the end of the half year to year, end of the month considerations to cover operations for the returns that the banks have to submit the central monetary authorities etc. all affect the exchange rate movement of the currencies. Value of a currency is thus not a simple result of its demand and supply, but a complex mix of multiple factors influencing the demand and supply. It’s a tight rope walk for any country to maintain a strong, stable currency, with policies taking care of conflicting demands like inflation and export promotion, welcoming foreign investments and avoiding an appreciation of the domestic currency, all at the same time.
• 21. 2.9 SOME IMPORTANT CURRENCIES: No doubt, all currencies are important but some of the currencies are the ones which are traded the most around the world. These include: The US Dollar ($)- It is the most traded currency on the planet and it is paired with every other major currency in the world and often used as an intermediary in triangular (three way) transactions. It is unofficially the global currency. Some countries even use USD as their official currency (termed as dollarization of their currency). In 1991- 1 USD=22.74 and currently 1 USD = 74 The Euro ()- It is the second most traded currency in the world and it serves most of the eurozone nations. Many nations in Africa and Europe peg their currencies to Euro. A key feature of this currency is that in forex market euro adds liquidity to any currency pair which it trades. The Japanese Yen- It is the most traded Asian Currency and it measures the overall health of the pan Pacific Region. In late 1999 and 2000s Japan had a very low inflation rate leading to more and more FDIs and FIIs and traders borrowed the Japanese Yen and then invested in other higher yielding currencies. The British Pound- It is the fourth most traded currency in the world. Although the U.K. was an official member of the European Union, the country never adopted the euro as its official currency for a variety of reasons, namely historic pride in the pound and maintaining control of domestic interest $ € ¥ £
• 22. rates. Forex traders will often estimate the value of the British pound based on the overall strength of the British economy and political stability of its government. The Canadian Dollar: Also known as loonie, the Canadian Dollar is probably the world's foremost commodity currency, meaning that it often moves in step with the commodities markets—notably crude oil, precious metals, and minerals. With Canada being such a large exporter of such commodities, the loonie often reacts to movements in underlying commodities prices, especially that of crude oil. The Swiss Franc: Last is the Swiss franc, which, much like Switzerland, is viewed by many as a "neutral" currency. More accurately, the Swiss franc is considered a safe haven within the forex market, primarily due to the fact that the franc tends to move differently than more volatile commodity currencies, such as the Canadian and Australian dollars. The Swiss National Bank has actually been known to be quite active in the forex market to ensure that the franc trades within a relatively tight range, to reduce volatility, and to keep interest rates in check. C$ ₣
• 23. 3.0 FOREIGN EXCHANGE IN 1991 IN INDIA AFTER LIBERALIZATION, GLOBALIZATION AND PRIVATIZATION. In 1991, India faced huge economic crises which led India to adapt the new economic policy. The crises made India under poor economic policies and resulted in huge trade deficits. The value of the Indian Rupee was very low in the foreign exchange market due to the same reason. The economy’s foreign exchange reserves had dried up and the country was about to go into debt. The reserves were supportive for 3 weeks’ worth of imports. Pledging the gold reserves of a country was a thing to do of the last resort but we had no other option. In an attempt to seek an economic bailout from the IMF, the Indian government airlifted its national gold reserves. To understand more deeply the change in foreign exchange reserves from 1991 to 2018, let us compare the value of rupee in 1990(before liberalisaiton),1991(aftfer liberalisation) and 2018 with the respective value of a U.S. Dollar. On the back of the page, a chart is fixed comparing different values of INR and USD. In 1991 (before liberalisation) the trade deficits with the other economies like China and US and Britain were very high. To correct the adverse Balance of Payments, devaluation of the Indian Rupee was taken into consideration. Devaluation means reduction in the external value of the domestic currency while internal value of the domestic currency remains constant.
• 24. The economic crisis of 1991 is claimed to be the toughest time in the Indian economy. The fiscal deficit during this time was 7.8% of the GDP and nearly 40% of total revenue collected by the government was spent on paying the interest on the debt. In addition, the inflationary rate was 14% and that made the situation even worse. The value of the Rupee had been devalued to Rs. 24.58 per one US Dollar which at that time was a very high value for a dollar. India had faced a great amount to economic regression in the years 1990-91 and had to adapt the new economic policy as well as the foreign trade policy. The license raj was no more. The economy was now open for all types of foreign investments. The Gulf war also had a huge impact as the prices of oil touched the sky. India was still dependent on the Arab countries for Oil and it imported a lot of Oil from there. Due to the war, India had to spend 700 crores more on oil than it usually did and the foreign exchange reserves were about to get over in about only seven days. The value of the Indian Rupee was very low as it depreciated a lot. But after the pledging of gold reserves as well as the help given to the US Army during the Gulf War made us eligible for borrowing money from International Institutions such as the IMF (because US has an 80% vote in the IMF) and other central banks from countries like Japan. On the other hand, In 2018, India had a very high trade deficit but is comparatively much more stable than that in the 1991 economic crisis. India imports from 173 countries in 2018 and exports in 126 countries.
• 25. 1972-92 With the breaking down of the Bretton Woods System, India moved towards the pegged exchange rate system. The Indian Rupee was linked (Pegged) to U.K. Pound Sterling.This pegging of currency to another country’s currency results in a fixed exchange rate system. It maintains stability among the trading partners. However, although a currency peg can minimize fluctuation, at the same time it increases the imbalances between countries. Therefore, in 1975, Rupee was pegged to a basket of currencies. This was done to ensure the stability of Rupee and avoid weaknesses associated with a single currency. During 1990 and 1991, India faced a major Balance of Payment (BoP) crisis. The Soviet Union was an important trade partner of India in 1960s. As the Soviet Union started to crack in the 1980s, India’s exports went down significantly. Also, due to the Gulf crisis in 1990, the prices of crude oil (an important import for India) started touching the skies in prices. Those are two of many reasons that led India to the BoP crisis of 1991. As our exports to the Soviet Union declined rapidly and the prices of imports including Crude Oil rose sharply, India faced huge BoP deficits - i.e. Imports were way higher than the Exports- This led the country to near bankruptcy. Therefore, India was forced to borrow money from the International Monetary Fund (IMF) against the country’s gold reserves. The crisis certainly did not develop overnight. It is believed that the roots of this crisis in India developed during 1979-81. During that period, India suffered a severe drought as well as the tremors of the global oil shock caused by the Islamic revolution in Iran. As a result of the BoP crisis, foreign exchange reserves had fallen to low levels that weren’t enough to pay for even a month of imports. The policymakers discussed various ways to deal with the crisis that eventually led to liberalization of the economy. Another way to deal with the situation was devaluation of the rupee.
• 26. Devaluation implies to a decrease in exchange rate. This leads to an increase in exports and hence the inflow of foreign currency increases. Therefore, on July 1 1991, as a part of its daily adjustments to the currency, RBI decreased the exchange rate by 9%. Two days later, i.e. on 3rd July 1991, it was pegged down by another 11%. In an article in the Indian Express on 10 November 2015, C. Rangarajan, the then deputy governor of RBI, explained that this move of was planned and well documented and the project was code-named ‘hop, skip, and jump’. With this, the pegged exchange rate system ended and India moved towards a market determined exchange rate system. 1992-Today There was a two-step devaluation of Rupee in 1991 by the RBI which ended the pegged exchange rate system and marked the beginning of the market determined exchange rate system. The Liberalized Exchange Rate Management System (LERMS) was introduced to ease the transition from one system to another. LERMS began from March 1, 1992. Under this system, Rupee was made partially convertible. This partial convertibility of Rupee is known as the dual exchange system. Since India was going through a period of deficit, it was risky to impose full convertibility of the Rupee. LERMS was set up to boost the foreign exchange earnings to improve the BoP. The RBI made foreign exchange available at a low price and hence it was used for essential imports like crude oil. All other imports were financed at the market-based exchange rate. Since LERMS was only a transitional mechanism, it was removed in 1993 and the market exchange rate system was introduced. That means that the 60:40 ratio was removed and 100% of the foreign exchange receipt was now converted at the market based exchange rate. Also, in 1994, the current account was made fully convertible. Thus when Rupee became a floating currency, the
• 27. current account of India was made fully convertible, but the capital account was only partially convertible. This was done to protect the domestic market from foreign competition. Since, most of the developed countries have fully convertible capital accounts, India is also planning to move towards it. There is an ongoing discussion on the pros and cons of moving towards full capital account convertibility to ensure that India benefits from this move.

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Via Afrika Tourism - Tourism Grade 12 Study Guides

Topic 1 domestic, regional and international tourism.

Overview This topic introduces you to tourism and the impact of global events on the tourism industry as well as the positive and negative effects for a country of hosting an event of global significance. In this topic you will learn about:

Global events of international significance

• The positive and negative impact of global events on international tourism
• The impact of hosting a global event on domestic tourism in the host country
• The impact of hosting a global event on the economy of the host country
• The advantages and disadvantages of hosting global events for the host country
• Political situations and unforeseen occurrences of international significance
• The impact of these situations and occurrences on international tourism and the economy of the affected country.
• Definition of a global event
• Types of events
• The impact of global events on international tourism
• The impact of hosting a global event on the host country
• The advantages and disadvantages for the host country

Political situations and unforeseen occurrences of international significance The concepts Examples of recent political situations Examples of unforeseen occurrences The impact of political situations and unforeseen occurrences on international tourism and the economy of the affected country

Unit 1 Global events of international significance

1. what is a global event.

A global event is an organised event involving people from countries from around the world. There are many different types of global events and they can attract a lot of media attention.

1.1 Sporting events Sports tourism refers to travel which involves either viewing or participating in a sporting event staying apart from their usual environment. Sport tourism is a fast growing sector of the global travel industry and equates to 600 billion dollars a year. Sport event tourism refers to the visitors who visit a city to watch events.  An example of this would be during the Olympics. Each Olympic host city receives an immense amount of tourism. Examples of major international sporting events include:

• The Olympic Games is the largest sporting event in the world.
• The FIFA Soccer World Cup is the second largest sporting event in the world.
• The Tour de France cycling event is the third largest sporting event in the world and is held mainly in France.
• Wimbledon is a prestigious annual international tennis championship played in the London suburb of Wimbledon.
• The Comrades Marathon is the world’s largest ultra-marathon. It takes place annually in May or June between Pietermaritzburg and Durban in KwaZulu-Natal.

1.2 Other events The G8 Summit: This forum is for the governments of eight of the world's largest economies France, the United States of America, the United Kingdom, Russia, Germany, Japan, Italy, and Canada (It excludes, however, two of the actual eight : China, 2nd, and Brazil, 7th). In recent years the ‘Plus Five’ countries Brazil, the People’s Republic of China, India, Mexico, and South Africa, have participated as guests. Summits on climate change: Summits on climate change try to find ways to cut down on global carbon emissions and pollution. In 2000 the Southern African Economic Summit was held in Durban. In 2011 the UN Climate Change Summit was also held in Durban. Tourism Indaba: The word indaba is an isiZulu word meaning ‘a meeting of elders’ but is used as a general term for meetings, exhibitions, and conferences. The Tourism Indaba is South Africa’s tourism showcase. It is the largest incoming travel trade exhibition in Africa and is held annually.

2. The impact of global events on international tourism

2.1 Positive impacts

• Short term economic benefits include higher spending at hotels, restaurants and shops, and the creation of temporary jobs
• Longer-term economic benefits include increased international tourism and increased investment resulting from improved global name recognition due to media coverage.
• Creates a positive impact on the long term association people have with the host.

2.2 Negative impacts

• It might take a long time for the country to pay off the debt incurred in hosting the event.
• Facilities, such as sports stadiums, that are especially built for the event may not be suitable for domestic use after the event.
• Other facilities built to host the international tourists who attended the event may stand empty if the number of tourists declines after the event.

3. The impact of hosting a global event on the host country

The legacy left behind after the event can improve the long-term well-being and lifestyle of citizens in the host country. This contributes enormously to nation building as we saw in South Africa when we hosted the 2010 FIFA World Cup.

3.1 Impact on domestic tourism in the host country Domestic tourism slows down in the host country during a major global event such as the Olympic Games, FIFA World Cup or Tour de France because during a global event foreign tourists displace local tourists from the most popular tourist attractions.

3.2 The impact on the economy of the host country Hosting global events can have the following positive impacts:

• Generation of foreign exchange income
• The multiplier effect as money spent by a tourist circulates through the economy
• Development of infrastructure in the host country
• Job creation
• Future growth in international tourism.

Hosting global events can have the following negative impacts:

• Facilities built for the event, may not be suitable for domestic use after the event
• During the event, domestic tourism in the host country normally slows down
• Pollution of areas in and around the places used during the event
• Possible security risks
• It might take a long time for the country to pay off this debt
• Construction workers involved in building roads and other facilities in preparation for the event could lose their jobs once the construction work is completed.

Unit 2 Political situations and unforeseen occurrences of international significance

1. concepts.

1.1 Political situations Political situations are events that are linked to the political circumstances within a country or region for example civil war or terrorism.

1.2 Unforeseen occurrences Unforeseen occurrences are events that happen without any warning such as earthquakes and natural disasters.

2. Examples of recent political situations

A tourists perceptions of political instability and safety in a country will affect their decisions about whether or not to travel there.

2.1 Civil war A civil war is a war between opposing groups of citizens of the same country. Civil wars have recently occurred in Libya, Egypt, Somalia and Kenya.

2.2 Terrorism Terrorism is the use of violent acts to achieve a political goal. One of the most significant terrorist attacks in recent years was the September 11, 2001 attacks on the World Trade Centre in New York.

2.3 General unrest Unrest is an uneasy or troubled condition. General unrest in Zimbabwe has stopped almost all of the tourism into that country.

3. Examples of unforeseen occurrences

3.1 Tsunamis A tsunami is a series of very large ocean waves caused by an underwater earthquake or volcanic eruption which damage infrastructure, buildings, attractions, ports, coastlines and beaches.

3.2 Earthquakes An earthquake is a sudden and violent shaking of the ground caused by movements within the earth’s crust or volcanic activity, and can cause great destruction.

3.3 Natural disasters A natural disaster is an event caused by the forces of nature such as a tornado and can cause great destruction.

3.4 Global recession A global recession is a period of general economic decline around the world and has a direct impact on tourism demand because people have less disposable income to spend.

3.5 Diseases A disease is an abnormal condition which interrupts the normal bodily functions leading to feelings of pain and weakness. Diseases such as malaria, yellow fever, and more recently bird flu and swine flu, not only make travelling fearful of visiting certain areas.

3.6 Accidents Transport accidents can have a negative impact on tourist numbers as they affect the safety image of a destination.

3.7 Economic upsets Tourism establishments such as hotels and tourist attractions can experience economic upsets when they have financial trouble or difficulty as a result of low visitor numbers.

4. The impact of political situations and unforeseen occurrences on international tourism and the economy of the affected country

The impact of reduced tourism on a country’s economy can be disastrous: it may lead to increased unemployment, homelessness, deflation, crime, and other social and economic problems. Examples include:

• Travellers who have already booked will may cancel their trips
• Tourists who haven’t yet booked trips to affected areas delay their bookings or may go elsewhere
• Tour operators avoid booking trips to affected countries
• Airlines suspend their flights to affected areas.
• What do you understand by the phrase global event ? (4)
• Name two of the biggest sporting events in the world? (4)
• What do you understand by the phrase tourism indaba? (6)
• List six positive effects for a country hosting a global event?  (12)
• List six possible negative impacts for a country hosting a global event? (12)
• Name three examples of political instability and safety in a country which might affect a tourists decisions about whether or not to travel there? (6)
• Give an example of an unforeseen circumstance that could affect tourism?  (2)
• Give 4 examples of the impact of political situations and unforeseen occurrences on tourism?(8)
• Give 4 examples of diseases that may make people fearful of travelling to certain areas? (4)
• Explain what the phrase tsunami means? (4)

Topic 2 Map work and tour planning

Planning is very important in any industry and more so in the tourism industry than most because attention to detail makes the difference between a successfully planned our and an unsuccessful one.

In this topic you will learn about:

Tour plans and route planning

• Compiling a day-by-day itinerary

Compiling a tour budget

• The concepts World Health Organisation, health certificates, travel clinics, compulsory and recommended vaccinations
• Health and safety precautions for tourists travelling to high-risk destinations
• Required travel documentation for tourists travelling between countries
• Customs regulations when departing from or arriving in South Africa
• The concepts duty free goods, prohibited goods, green channel, red channel, to declare, travel allowances
• World time zones and daylight saving time
• The impact of time zones and daylight saving on travel planning
• Calculating arrival and departure times with and without daylight saving time
• Jet lag and jet fatigue.
• Developing tour plans
• Factors influencing the development of a budget
• A basic tour budget

Travel documentation

• Required travel documents
• An international driver’s permit (IDP)
• Completing an application form
• Customs regulations

World time zones

• Introduction to a world time zone map
• Daylight saving time (DST)
• The impact of time zones and DST on
• travel planning and travelling

Compiling a day by day itinerary

• The main aspects of an itinerary
• Requirements of logical itinerary planning
• Drawing up itineraries according to different scenarios
• Vaccination required for entering / leaving areas of high risk
• TB and HIV and AIDS risks for inbound tourists
• Recommended health precautions when visiting health risk areas

2. Safety of tourists

• Reasons why the safety of tourists in South Africa is important
• General safety precautions for tourists

Calculations of world times when travelling between countries

• Calculating arrival, departure and flying time
• Jet lag and jet fatigue

Unit 1 Tour plans and route planning

1. developing tour plans.

People travel for many different reasons. Whatever the reason if it is well planned it is more likely to be successful.

1.1 What is a tour plan? A good tour plan should indicate:

• The route the tour will follow
• The length of the tour
• The mode of transport
• The type of accommodation
• The meals and drinks offered
• The places of interest and attractions visited
• Leisure time for the tourist
• The dates of the tour
• Cost of the tour (budget).

1.1.1 Types of tours Packaged tour : Is also known as an inclusive tour because the price is all-inclusive. The itinerary for a packaged tour is planned in advance. Escorted packaged tour: A tour guide escorts the tour and takes care of all services from the beginning to the end of the tour. Group packaged tour: These tours are popular with first time travellers and for tourists who prefer to travel in a group. The itinerary is set and cannot be changed and because the tour was organised for large groups of tourists makes the tour more affordable. Independent packaged tour: These tours are planned to meet the individual needs of the tourist and are flexible and can be changed if necessary. Scheduled tours : Scheduled tours have a timetable with set departure and arrival times.

1.3 Tourists profiles A tourist profile is a summary of personal information and facts relevant to the tourist’s wants and expectations. The tourist profile helps the travel agent plan a tour and make sure that the needs of the tourist are met.

1.4 Available budget A tour budget is calculated using the costs of the different tour components. They include:

• Accommodation
• Meals included in the tour
• Attractions, including entrance fees, permits and optional extras
• Additional costs, including airport tax, service charge, etc...

1.5 Available time When developing a tour plan, it is important to consider how much time a tourist has available. Steps need to be taken to avoid wasting time while also ensuring tourists have adequate leisure and relaxation time.

2. Route planning

Route planning involves choosing the best way to travel to all the destinations identified in the tour plan. The distances between the places visited en route must be taken into account. The following will help to develop a logical route plan:

• Knowledge of the geography of the region
• A variety of maps
• Distance tables to determine distances between major cities
• Computers or smart phones
• Tour brochures, travel guidebooks, and travel magazines.

3. Choice of transport and accommodation to suit customers needs and preferences

3.1 Transport Tour plans use a variety of transport options for each leg of a tour. Examples include cars, buses, planes, etc... A customer’s choice of transport may also be influenced by how environment friendly they are. They might take into account by these facts:

• Fuel emissions from motorised vehicles are harmful to the environment
• Aircraft emit CO2 and other greenhouse gases into the upper atmosphere
• Oil, black water, greywater, rubbish, hazardous waste, ballast water, diesel and CO2 from cruise liners pollute the sea and harm coral reefs and marine life.

3.2 Accommodation Most countries offer a wide range of accommodation options ranging from luxury safari lodges to backpackers hostels. The type of establishment chosen by the tourist is influenced by a combination of factors, including:

• The type of accommodation required
• The quality of accommodation required
• The desired location
• The availability of the accommodation
• Their budget.

4. Choice of tourist attractions and activities to suit tourists profiles

4.1 Attractions When planning a tour the interests and preferences of the customers will determine the choice of attractions. The attractions offered on a tour plan are often one of the main reasons why a customer will select one tour plan above another.

4.2 Activities The popularity of a tour plan depends on the activities that are available at the attraction sites and destinations. Tourists enjoy and remember a tour if they participate in and experience these activities.

Unit 2 Compiling a day-by-day itinerary

A tour plan gives general information about a tour. The specific, detailed information is presented in an itinerary which is a written day-by-day schedule of the dates, times, transport, accommodation, and activities that will make up the trip. There are three different types of itineraries:

• Specific itineraries are drawn up with a target market in mind
• A general itinerary appeals to the overall market
• A personal itinerary is drawn up for an individual tourist.

1. The main aspects of an itinerary

The main aspects to be considered in an itinerary are:

• Attractions (natural and human-made)
• Activities (at natural and human-made attractions)
• Stops for meals and refreshments.

2. Factors to consider when drawing up an itinerary

Factors to consider when drawing up an itinerary include:

• Tour objectives
• Tourists needs and preferences
• Tour information
• Tour sequence
• Tour budget.

3. Drawing up itineraries according to different scenarios

3.1 Presentation of an itinerary

• The layout of the itinerary must be neat, clear and interesting
• Use the 24-hour clock to indicate time
• Write the itinerary as if you were talking to the tourist
• Do not make promises you cannot guarantee
• Mention interesting facts
• Use adjectives to describe places.

3.2 Format of an itinerary A general itinerary may be presented in paragraph form or in tabular form.

Unit 3 Compiling a tour budget

A tour budget is a document that specifies all the costs of a tour and helps you plan accordingly. Establishing what the tour will cost is important as the cost will determine who will be able to afford to go on it.

1. Factors influencing the development of a budget

The development of a tour budget is dependent on a combination of factors such as:

• The type of tour
• The tour group
• Sundry expenses.

2. A basic tour budget

A basic tour budget shows what the tour will cost, what this includes and excludes and the cost of the optional extras. 

Unit 4 Health and safety

In order to reduce the risk of contracting a disease, tourists should obtain advice on the possible health risks in the areas to which they are travelling. Other possible health risks include the effects of unusual climatic conditions, contact with insects and animals, and physical injuries.

1. Concepts related to health

1.1 World Health Organisation (WHO) The WHO is a specialized agency of the United Nations (UN) that is concerned with international public health. It was established on 7 April 1948, with headquarters in Geneva, Switzerland. Since its creation, WHO has been responsible for playing a leading role in the eradication of smallpox. Its current priorities include communicable diseases, in particular, HIV/AIDS, malaria and tuberculosis;  the mitigation of the effects of non-communicable diseases; sexual and reproductive health, development, and aging; nutrition, food security and healthy eating; occupational health; substance abuse; and drive the development of reporting, publications, and networking.

1.2 Health certificates Global travel on this scale exposes tourists to a range of health risks. Many of these risks can be reduced by taking precautions before the start of a journey. A health certificate is an official document that is issued and signed by a health authority. It confirms that an individual has received the vaccine or prophylactic as indicated on the certificate.

1.3 Travel clinics The spread of infectious diseases from one part of the world to another is not something new but it remains a concern. Travel clinics providing up-to-date specialised international travel healthcare.

1.4 Vaccinations Millions of deaths have been avoided because of worldwide immunisation programmes against infectious diseases. For tourists this is important as safe and effective vaccines help to reduce the possibility of contracting a disease when travelling to high-risk destinations. Compulsory vaccinations: The WHO decides which vaccinations are compulsory. Recommended vaccinations: These vaccinations are not enforced but are recommended as a precaution.

2. Precautions to take when travelling to high-risk destinations

Destinations are considered high-risk if they are in regions that pose a threat to the health of the tourist. Areas where malaria, bilharzia and cholera are found are high-risk destinations. 

2.1 A region known to have malaria Malaria is a potentially fatal disease transmitted by the bite of mosquitoes.  Precautions that can take when travelling in malaria-infested areas include:

• Taking anti-malarial prophylactics
• Avoiding being outdoors at night
• Wearing clothing that conceals as much of the body as practical
• Spraying sleeping areas with mosquito repellent
• Sleeping under a mosquito net
• Burning insecticide coils or using electronic vaporizing mats
• Avoiding still water areas and dark damp places.

2.2 A region known to have bilharzia Bilharzia is also known as schistosomiasis and is caused by parasites that contaminate fresh water, especially when infected people urinate or defecate in the water. Precautions are necessary when travelling in areas known to have bilharzia:

• Avoid swimming or wading in dams and rivers
• Drink only boiled or filtered water
• Bath in hot water that is at least 65 °C, to destroy possible parasites on the skin
• Dry vigorously with a towel to prevent the parasite from penetrating the skin.

2.3 A region known to have cholera Cholera is a bacterial disease transmitted mainly through contamination of food and water in areas where there is poor sanitation and hygiene. Tourists in areas where cholera has occurred should observe the following precautions:

• Drinking water should be boiled, sterilised or filtered
• Foods must be well cooked and eaten hot
• Avoid undercooked or raw fish and shellfish
• Avoid local salads as they may carry cholera-infected water
• Avoid foods and beverages from street vendors
• Swim only in chlorinated swimming pools.

3. Vaccinations required for entering/leaving areas of high risk

Proof of vaccination is often required for tourists travelling into or from countries with a high risk of an infectious disease. An example is a yellow fever vaccination.

4. TB and HIV and AIDS risks for inbound tourists

4.1 The risk of TB for inbound tourists Tuberculosis (TB) is a preventable and curable infectious bacterial disease. It is prevalent in South Africa. Examples of behaviours of inbound tourists that increase their likelihood of being exposed to the risk of TB include:

• Traveling on a flight lasting longer than eight hours while being seated within two rows of an infected passenger
• Using overcrowded, public transport and accommodation options
• Spending time in poorly ventilated and overcrowded environments, such as indoor events and festivals.

4.2 The risk of HIV and AIDS for inbound tourists Tourists must be aware of the risk of HIV and AIDS when they travel as there is no vaccine available to prevent infection.

5. Recommended health precautions when visiting health risk areas

The WHO recommends six general health precautions for tourists visiting health risk areas. Their six ‘I’s’ are:

• Insects: Have repellents and medication available
• Ingestion: Drink bottled water and eat uncontaminated food
• Indiscretion: Prevent HIV
• Injury: Carry a traveller’s first aid kit. Apply sun block
• Immersion: Avoid swimming in fresh water rivers and dams
• Insurance: Use preventative medicine and have medical insurance.

The safety of tourists when they are in South Africa is important for the following reasons:

• Tourism generates income
• Tourism creates jobs
• Infrastructure development
• Community development.

Unit 5 Travel documentation

Tourists need travel documents to gain entry into a country for security, health, safety, and identification. These documents change from country to country.

1. Required travel documents

The following travel documents are required for entry into a country:

• Health certificates for certain countries.

1.1 Valid passport A passport is an official government document that certifies one's identity and citizenship and permits a citizen to travel abroad. There are different kinds of passports:

• Tourist passports that consist of 32 pages
• Maxi tourist passports with 48 pages for frequent travellers
• Official passports
• Diplomatic passports
• Temporary passports.

An official passport is  issued to someone who is travelling internationally on official business for the country and is usually a different colour from regular passports. A diplomatic passport is issued to someone who will travel internationally on official state business such as diplomats and consuls when they are posted to foreign countries. A temporary passport is issued to South African citizens who have applied for a regular passport but need to travel urgently before the regular passport can be issued.

1.2 Visa A visa is an endorsement on a passport indicating that the holder is allowed to enter, leave, or stay for a specified period of time in a country. A visa application must usually be made before departure as visas are not often issued at ports of entry. Examples of different kinds of visas are:

• Visitor visas
• Transit visas
• Diplomatic visas
• Courtesy visas
• Official visas.

1.3 Health certificates A health certificate is an official document that is issued and signed by a health authority which confirms that an individual has received the vaccine as indicated on the certificate.

1.4 Requirements for tourists travelling between countries Tourists must have proof of the following before travelling between countries:

• A valid passport
• A valid visa
• Sufficient funds to cover their stay in the country
• A return ticket, or onward ticket to another country
• International law requires travellers crossing the borders of countries where yellow fever is endemic, to have a yellow fever vaccination.

2. An international driver’s permit (IDP)

An IDP is a document recognized by many countries which allows the permit-holder to drive a private motor vehicle in that country. The Automobile Association of South Africa (AA) has the authority to issue the permit. An IDP can be obtained directly from any AA Autoshop or AA Travel Experience Store in South Africa.

3. Passports

3.1 Requirements for obtaining a passport To apply for a passport the following is required in South Africa:

• An identity number
• Two passport photographs
• Fingerprints must be taken if aged 16 years or older
• A fee dependent on the type of passport applied for.

4.1 Requirements for obtaining a visa The basic requirements to qualify for a visa include:

• A valid, acceptable passport
• Sufficient funds for the duration of the stay
• A return or onward travel ticket
• Identity photographs, as per requirement of the country for which application is made
• Blank pages in the passport as per requirement of country
• A yellow fever certificate if the applicant passes through a high risk area
• A statement and/or documentation confirming the purpose and duration of the visit
• Payment of the prescribed fee in the currency of the country in which the application is made
• In the case of children, proof of guardianship or custody, or consent from the guardian must be provided
• A completed visa application form. 

5. Concepts

All travellers arriving at South Africa’s ports of entry, whether by land, sea or air, are required to pass through immigration control before collecting their baggage. The South African Department of Home Affairs provides this service. Travellers then pass through customs control where their baggage may be X-rayed or examined by customs officers. After passing through immigration control travellers collect their baggage. They then have a choice of two channels. By selecting the green channel, a traveller indicates that they have no goods to declare, in other words, they have no prohibited or restricted goods, and no goods in excess of the duty free allowances.

5.1 Duty free goods Duty free goods are those goods that travellers are allowed to bring into South Africa without paying customs duty or value-added tax (VAT).

5.2 Prohibited goods Prohibited goods refer to those goods that travellers are not allowed, by law, to bring into South Africa such as illegal drugs.

5.3 Travel allowances This refers to how much money a traveller is allowed to take out of South Africa. These transactions are subject to exchange control regulations, governed by the South African Reserve Bank.

Unit 6 Time zones

1.1 Time zone The phrase time zone refers to any of the 24 longitudinal divisions of the earth's surface in which a standard time is kept, the primary division being that bisected by the Greenwich meridian. Each zone is 15° of longitude in width, with local variations, and observes a clock time one hour earlier than the zone immediately to the east. Most countries have only one time zone, for example, South African. More than one time zone may apply if countries extend across many degrees of longitude.

1.2 UTC (Universal Time Coordinate) UTC is the primary time standard by which the world regulates clocks and time. It is one of several closely related successors to Greenwich Mean Time (GMT).

1.3 Greenwich The 0º line of longitude passes through Greenwich in London, England. This line divides Earth into the Western and Eastern Hemispheres and is also known as the prime meridian.

1.4 Hemispheres Earth is divided into the Northern and Southern Hemispheres by the equator, and the Eastern and Western Hemispheres by the Greenwich Meridian.

1.5 Equator The equator is the 0º line of latitude. It is located at equal distance from the North and South Poles and divides Earth into the Northern and Southern Hemispheres.

1.6 Seasons Seasons are the four divisions of the year: spring, summer, autumn and winter. The four seasons are the result of Earth’s changing position with the sun.

1.7 Standard time The local time at the standard meridian of a country is called standard time. Standard time is the same for all places in that particular country and is calculated from Greenwich.

1.8 Local time Local time is the specific time at any given place. is the time everyone in an area agrees upon as the local time.

1.9 The International Date Line (IDL) The International Date Line (IDL) is an imaginary line on the Earth’s surface at 180° longitude.

1.10 The 24-hour clock The 24-hour clock is a convention of time keeping in which the day runs from midnight to midnight and is divided into 24 hours, indicated by the hours passed since midnight, from 0 to 23. This system is the most commonly used time notation in the world today.

1.11 Latitude and longitude A geographic coordinate system is a coordinate system that enables every location on the Earth to be specified by a set of numbers. They lie east and west of the Greenwich Meridian and divide the world into 24 time zones.

2. Introduction to a world time zone map

3. daylight saving time (dst).

DST is a way of making better use of daylight by setting the clock ahead during summer months (thus losing one hour) when DST starts, and setting it back again one hour in the winter months (thus gaining one hour) when DST ends. Reasons for implementing daylight saving time are:

• Some countries feel they can make better use of the extra daylight in the evenings.
• Some countries are of the opinion that fewer road accidents and injuries occur because of better visibility.
• The extra hour of daylight in the evening can give children more time for social activities.
• The extra hour of daylight in the evening may boost the tourism industry as it creates an opportunity to increase participation in outdoor activities.
• It can help to save energy and reduce artificial lighting during the evening hours.

4. The impact of time zones and DST on travel planning and travelling

Time zone differences must be taken into account during long flights eastward or westward because an hour is lost for each time zone that is crossed when flying eastwards. Travellers must be familiar with the time changes, especially when flying east or west across time zones. They must know when a country has DST and whether they will be crossing the International Date Line as this can affect the times of flight changes, catching trains, etc...

Unit 7 Calculations of world times when travelling between countries

1. calculating arrival, departure and flying time.

1.1 Determining the time and day in a different time zone Step 1: Locate the place for which you already know the time and day on a time zone map. Step 2: Locate the place for which you wish to know the time and the day of the week on a time zone map. Step 3: Count the time zones between the two places Step 4: Calculate the time by either adding or subtracting an hour for each time zone, depending on whether you are moving east or west. Step 5: If you have crossed the International Date Line, identify the day.

1.2 Calculating arrival, departure and flying time Time difference calculations are also important when calculating arrival, departure, and flying times.

1.3 Calculating time using DST When DST applies to countries one has to add an hour to the time zone for countries to the east and subtract an hour for countries to the west.

2. Jet lag and jet fatigue

2.1 Definition of jet lag Jet lag is a general feeling of fatigue and disorientation often experienced by travellers by jet aircraft who cross several time zones in relatively few hours.

2.2 Symptoms of jet lag The main cause of jet lag is the inability of the body to immediately adjust to the time in a different zone. Other factors that contribute to jet lag are:

• The food and drinks consumed during the flight
• Cabin pressure, which causes leg swelling and tiredness
• Stale air in the plane, which cause tiredness, irritability and headaches
• Lack of exercise during the flight
• Lack of sleep during the flight.

2.3 How to minimise and ease the effects of jet lag Before the flight, travellers should make sure:

• They are in good physical shape and that they eat correctly before their trip.
• They are well informed about any medical condition from which they suffer.
• They begin adjusting their bodies to the new time zone before they leave if their stay in the destination time zone will last more than a few days.
• They try to go to sleep and get up earlier if they are travelling east.
• They get a good night’s sleep the night before departure.

During the flight, travellers should make sure:

• They do not drink alcoholic beverages the day before their flight, during the flight, or the day after the flight.
• They do not drink caffeinated beverages before, during, or just after a flight
• They drink plenty of water to offset the effects of the dry air in the plane.
• They do not eat too much on the plane
• They exercise their legs from time to time while they are seated for their flight
• They get up and walk around every hour or two.
• They do not take sleeping pills.
• They do not nap for more than an hour at a time.
• They break up long-haul trips across many time zones, if feasible, with a stay in a city about halfway to their destination.
• They wear comfortable clothes and shoes.
• They make use of sleeping aids.

After the flight travellers should make sure:

• They try and get at least an hour’s worth of sunlight as soon as possible after reaching their destination if they are travelling west.
• They check, on arrival, whether beds and bathroom facilities at their accommodation are satisfactory
• They adapt to the local schedule as quickly as possible to help their bodies adjust faster.
• They try to establish sleeping patterns according to the time at their destination without resorting to sleeping pills.
• List 5 different types of tours?  (10)
• What does the phrase tourist profile mean?  (4)
• Name 5 requirements for tourists travelling between countries? (10)
• What are the requirements for obtaining a passport in South Africa?  (8)
• What does the phrase daylight saving time mean? (4)
• What does the phrase time zone mean? (4)
• What does the phrase jet lag mean?   (4)
• Name 4 things travellers can do during the flight to minimise jet lag? (8)
• What does the phrase hemisphere mean? (4)
• List the 5 steps that can be taken to determining the time and day in a different time zone? (10)

This topic examines the different world famous icons of different countries, their locations and why they are tourist attractions. In this topic you will learn about:

• The difference between a tourist attraction and an icon
• The reasons why specific tourism attractions are regarded as icons
• Profiles and statistics of tourists visiting these icons
• The economic significance of icons for a country or area
• World famous icons and attractions in different countries of the world
• The location of the world famous icons and attractions on a map
• The reasons why these attractions are considered to be world famous icons
• Interesting facts about these icons. 

Units 1-4 Famous world icons and attractions

• The difference between tourist attractions and icons
• Reasons why some attractions become icons
• Profiles of tourists visiting icons
• Statistics of tourists visiting icons
• Famous world icons

Successful tourist attractions

• Factors contributing to the success of a tourist attraction
• Characteristics of a successful tourist attraction 

In your learner book units 1-4 of topic 1 term 2 deal with the different icons that are tourist attractions in different countries. You need to make sure that you know what icon belongs to which country.

1. The difference between tourist attractions and icons

Tourist attractions are places that tourists like to visit, such as national parks and heritage sites. An icon is a tourist attraction that is world famous and comes to represent or be symbolic of the country or city in which it is located. Icons can be human-made or natural. A World Heritage Site is a place such as a forest, mountain, lake, desert, monument, building, complex, or city that is listed by UNESCO as being of special cultural or physical significance.

2. Reasons why some attractions become icons

Icons are unique and tourists find them fascinating because they are the only one of their kind in the world. Many icons are also proclaimed as World Heritage Sites by UNESCO because of their special cultural or physical significance.  Sometimes an icon provides a sense of identity, such as the Vatican City to people of the Catholic faith. An icon may be linked to famous people such as Robben Island and Nelson Mandela.

2.1 The economic significance of icons for a country Tourism icons are used by the tourism industry as pull factors and are often included in tour packages and can therefore make a significant economic contribution to a country or region where they are located. Businesses involved in the tourism industry are interrelated and dependent on each other. For this reason the economic benefits of tourism reach almost everyone in the region in some way. This is called the multiplier effect which is an effect in economics in which an increase in spending produces an increase in national/regional income and consumption greater than the initial increase.

3. Profiles of tourists visiting icons

Different types of tourists will visit different types of icons, depending mainly on their interests, age, professions and income. A young adventurous tourist might climb Mount Everest while an older wealthier tourist might relax on the beaches of the French Rivera.

4. Statistics of tourists visiting icons

The numbers of tourists visiting icons are used to plan:

• Marketing strategies
• The time and level of maintenance and upkeep of the icon
• Restrictions to protect icons from possible damage caused by mass tourism.

Examples of famous world icons include: Australia: Sydney Opera House, Ayers Rock/Uluru-Kata Tjuta National Park. Brazil: The Statue of Christ the Redeemer Canada: Niagara Falls Italy: The Colosseum, The Leaning Tower of Pisa, Venice, Vatican City Egypt: The Great Pyramids of Giza, The Sphinx Germany: Berlin Wall and the Brandenburg Gate, The Black Forest China: The Great Wall of China Israel: The Dome of the Rock, The Wailing Wall Greece: The Parthenon India: The Taj Mahal Turkey: The Blue Mosque France: The Eiffel Tower, The French Riviera Japan: Mount Fuji Mexico: Chichén Itzá (Yucatan) Jordan: Petra Nepal: Mount Everest Saudi Arabia: Mecca Switzerland: The Swiss Alps Netherlands: Mill Network at Kinderdijk, Elshout Peru: Machu Picchu (Cuzcu) Poland: Auschwitz Concentration Camp Portugal: The Algarve Spain: Alcazar of Segovia, Bullfights Thailand: Floating markets Russia: The Kremlin, Red Square United Kingdom: Big Ben, Buckingham Palace, Tower of London, London Bridge United States of America: The Statue of Liberty, The Grand Canyon.

Unit 5 Factors contributing to the success of tourist attractions

Attractions form a key component of the tourism industry. They draw local and international tourists to cities and regions and motivate tourists to visit a destination. Successful tourist attractions are those that:

• Continue to attract tourists
• Give enough information about the attraction where applicable
• Provide for the needs of tourists
• Meet the interests of the tourists
• Are easily accessible
• Are well maintained
• Provide a safe experience for tourists.

1. Factors that make a tourist attraction successful

The five main areas in attraction management that impact on the success of an attraction are:

• Income and financial management
• Human resources
• visitor management
• Operation management.

1.1 Marketing of tourism products locally and /or internationally Successful marketing strategies are key to the success of tourist attractions. It is important that the marketing technique that is used will improve visitor numbers, and stimulate out of season and seasonal visits. Furthermore, the strategy must create a brand awareness and help to reach the budgeted income. The strategy must make the tourist attraction stand out from all other available options.

1.2 Sustainable and responsible management plans Sustainable and responsible management entails sound management of both the financial and environmental aspects of the tourist attraction.

1.2.1 Environmental management The environment on which the attraction is dependent for its existence must be looked after and developed.

1.2.2 Financial management Financial management issues that must be well managed to ensure the success of an attraction are:

• External issues such as inflation and tax laws
• Controlling costs and income.

1.3 Efficiency and ethical behaviour of staff and management Labour costs will make up a significant portion of the budgeted costs. It is therefore important that staff are managed well and that they are efficient and behave ethically. To ensure this, good staff planning and training are needed. Good induction programmes and continuous training are important to make sure that staff obtains the skills needed.

1.4 Positive experience of visitors To ensure positive visitor experiences it is important that:

• Visitor numbers are controlled
• Opening hours are convenient
• Pricing is right
• Pathways are clear and signage is displayed
• Informative brochures and leaflets are available.

1.5 Safety and crime prevention The safety and security of tourists is the highest priority of any tourist attraction and a well co-ordinated strategy must be developed to protect tourists and make them feel safe.

1.6 General appearance and upkeep of the attraction A successful attraction should have a pleasing and clean appearance. This means that regular maintenance of the facilities must take place.

1.7 Considering the needs of people with disabilities Tourism attractions should be accessible to all including people with disabilities.

1.8 Universal access Tourists have different needs. To be successful an attraction should have universal access. In other words it must be accessible to a wide range of tourists. Key aspects that make an attraction accessible include:

• Transport to the attraction
• Transport at the attraction
• Toilet facilities
• Information
• Support facilities and services.

2. Characteristics of a successful tourist attraction

These include:

• Actual number of visitors exceeds the target number of visitors
• Repeat visits
• Income generated exceeds target figures
• Positive impact on local community and environment.
• What is the difference between tourist attractions and icons?  (4)
• What is the reason why some attractions become icons? (2)
• Give an  example of an icon linked to a famous person? (2)
• Give 10 examples of famous world icons (20)
• List 4 characteristics of a successful tourist attraction (8)
• What does the phrase multiplier effect mean?  (4)
• Name two things that can be done to ensure staff obtain the skills needed to do their jobs properly?  (4)
• Name 7 things that make an attraction accessible? (14)
• Is the general appearance and upkeep of an attraction important?  (2)
• What are the five main areas in attraction management that impact on the success of an attraction?  (10)

Topic 2 Foreign Exchange

When tourists travel to another country they have to exchange their own currency for that of the country they are visiting in order to buy things such as food, gifts or pay for accommodation. The rate at which one currency can be exchanged for another affects not only the decisions made by tourists to visit a particular country but also the amount of foreign currency earned by a country.

• The term GDP and its benefits to the economy
• The multiplier effect and its link to the GDP
• The concepts of a weak and strong rand
• The relative strength and relative weakness of a currency
• How to interpret a currency rate sheet
• How to convert major currencies
• The difference between bank selling rate (BSR) and bank buying rate (BBR)
• The effect of exchange rates on international tourism
• Fluctuations in exchange rates.

Exchange rate conversions

• Conversion of major currencies to understand
• the buying power of different currencies
• Differentiation between bank selling rate and bank buying rate

Exchange rates and the economy

• Gross domestic product (GDP) and its benefits to our economy 
• The multiplier effect and its link to the GDP  
• The concept ‘strong’ and ‘weak’ rand 
• The relative strength and weakness of a currency at specific times

The impact of exchange rates on tourism

• Effect of exchange rates on international tourism and its influence on South African travel patterns
• Fluctuations in the exchange rate

Unit 1 Foreign exchange

The phrase foreign exchange refers to the exchange of one currency for another, or the conversion of one currency into another currency. Foreign exchange also refers to the global market where currencies are traded virtually around-the-clock. The term foreign exchange is usually abbreviated as "forex".

1. Gross domestic product (GDP) and its benefits to our economy

The GDP is a measure of a country’s national income. GDP is a measure of all the goods and services produced domestically, usually in a period of one calendar year. The components included are consumer spending, investment made by industry, value of exports minus value of imports, and government spending. Our economy is diversified with key economic sectors contributing to the GDP, including:

• Agriculture and fisheries
• vehicle manufacturing
• food processing
• Clothing and textiles
• Telecommunication
• Financial and business services
• Transportation
• Wholesale and retail trade.

If there are more goods and services produced in a year than in the previous year, we say there has been growth in the GDP. If GDP is increasing the economy is in good health and the nation is progressing and standards of living are improving.

2. The multiplier effect and its link to the GDP

The multiplier effect refers to the increase in final income arising from any new injection of spending. Every time there is an injection of new demand into the circular flow there is likely to be a multiplier effect. This is because an injection of extra income leads to more spending, which creates more income, and so on.

2.1 The tourism multiplier effect Tourism not only creates jobs in the tourism industry, it also encourages growth in other sectors of industry. This is known as the tourism multiplier effect. Simply stated, this is how many times money spent by a tourist circulates through a country’s economy.

2.2 The multiplier effect and the GDP The multiplier effect is an effect in which an increase in spending produces an increase in national income and consumption greater than the initial amount spent. Therefore the tourism multiplier affects GDP and is very important for South Africa because we need to grow the economy and create more jobs.

3. The concept ‘strong’ and ‘weak’ rand

Strong currency, also known as a hard currency, refers to a currency when it is worth more relative to other currencies. A weak currency, also known as a soft currency, is a currency whose value has depreciated significantly over time against other currencies and will fluctuate erratically or depreciate against other currencies. A weak currency is often the result of political or fiscal instability in the country. The terms strong rand and weak rand are used in the foreign exchange market to describe the value and strength of the South African Rand against other currencies. When one unit of our currency trades for more units of another currency, it is known as a strong rand.

4. The relative strength and weakness of a currency at specific times

Some of the effects of a weak currency:

• A weak currency is good for nations that have more exports than imports because their exports will become cheaper for foreign buyers.
• A weak currency will stimulate manufacturing and exports to areas with a stronger currency.
• There will be an increase in manufacturing and job creation if the demand for exports increases.
• More foreign tourists will be able to afford to visit countries with weak currencies as it will increase their purchasing power.
• Imports become more expensive for the countries with weak currencies.
• Higher prices of foreign products increase the cost of living in countries with weak currencies.
• Purchasing power weakens for people in countries with weak currencies.
• A weak currency has a negative effect for people planning to travel to areas with a strong currency.

Effects of a strong currency:

• Imports become cheaper for the countries with strong currencies.
• Imported products and services, especially fuel, become more affordable.
• Exports become more expensive. Countries with strong currencies will export less as the demand will decrease.
• Domestic manufacturing will decrease as there is less demand from both the domestic and foreign markets.
• Fewer foreign tourists will be able to afford to visit countries with strong currencies as it will decrease their purchasing power.
• Purchasing power strengthens for people in countries with strong currencies.
• A strong currency has a positive effect for people planning to travel to areas with a weak currency.

5. How to interpret a currency rate sheet

Currency rates, also known as foreign exchange rates or simply exchange rates, tell how much of one currency you need to purchase a unit of another currency. In order to calculate a foreign exchange rate follow these steps:

• Identify the exchange rate of the currency you need and find the ISO code. For example, the currency code of the rand is ZAR, while that of the US Dollar is USD.
• Look up the exchange rate for your two currencies.
• Calculate the exchange rate by looking at a currency pair (two currencies). The first currency in the pair, known as the base currency, is the transaction currency and the second currency is the payment currency.

Unit 2 Foreign exchange (part 2)

7. Differentiation between bank selling rate and bank buying rate In the trading world of the currency exchange markets, a different buying rate and selling rate will be quoted. Exchange rates are quoted in two different rates:

• The bank buying rate
• The bank selling rate.

The buying rate (BBR) is the rate at which the exchange bank will buy a currency. The selling rate (BSR) is the rate at which the exchange bank will sell a currency. The quoted rates will include an allowance for a dealer’s margin (profit) in trading. Alternatively the profit may be recovered in the form of a commission. Banks perform a vital role in foreign currency exchange transactions. Banks trade in international currencies in order to make a profit.

8. Effect of exchange rates on international tourism and its influence on South African travel patterns Exchange rates can impact the tourism industry either negatively or positively. A fall in the value of the South African rand has a twofold effect:

• It makes international travel for South Africans more expensive
• It makes travelling in South Africa cheaper for foreign tourists.

Tourist travel patterns are influenced by the exchange rates as they affect the tourist’s purchasing power. Tourists visiting South Africa from another country will have more or less money to spend depending on the exchange rate.

9. Fluctuations in the exchange rate Factors that determine exchange rates are:

• Interest rates
• Trade balance
• Terms of trade
• Government debt
• Political and economic instability
• Employment outlook of a country.
• What does the phrase foreign exchange mean? (4)
• What does the phrase Gross Domestic Product mean?(4)
• What do you understand by the phrases strong and weak currencies ? (4)
• Name three effects of a weak currency? (6)
• List the different factors that determine exchange rates? (14)
• List two effects a fall in the value of the South African rand has on tourism? (4)
• Name the two ways exchange rates are quoted? (4)
• What are the steps that need to be taken to determine an exchange rate? (6)
• List three effects of a strong currency?  (6)
• What is the multiplier effect and its link to the GDP? (4)
• Forms of payment when travelling internationally including:
• Electronic fund transfers (EFT)
• Telegraphic transfers (SWIFT transfers)
• Bank drafts
• Internet payments
• Foreign bank notes (cash)
• Credit cards (Visa, MasterCard, American Express, Diners Club)
• Traveller’s cheques
• Preloaded foreign currency debit cards such as Cash Passport Card/Travel Wallet/International Travel Card
• The advantages and disadvantages of each form of payment
• Interpreting statistics regarding inbound international tourism including:
• Foreign arrivals to South Africa and how the arrival statistics can determine foreign market share
• Most visited provinces in South Africa
• Length of stay in each province
• Average expenditure per tourist
• Activities undertaken whilst in South Africa.

Forms of payment when travelling internationally

• Electronic fund transfers
• Telegraphic transfers (SWIFT
• Bank draft s
• Foreign bank notes
• Credit cards
• Preloaded foreign currency debit cards

Foreign Market Share Concepts Foreign arrivals to South Africa Most visited provinces in South Africa Length of stay in each province Average expenditure per tourist Activities undertaken whilst in South Africa

Unit 1 Forms of payment when travelling internationally

There are several methods tourists can use to pay for goods and services when travelling in a foreign country. Each method of payment has its advantages and disadvantages and tourists need to do research before deciding which method is best suited to them.

1. Electronic fund transfers (EFT) An EFT is the electronic exchange, transfer of money from one account to another, either within a single financial institution or across multiple institutions, through computer- based systems. Its advantages are:

• It is safe and secure
• It is efficient and fast
• It is less expensive than paper cheque payments and collections
• Money can be transferred throughout the world.

Its disadvantages are:

• Funds will only show on a beneficiary’s account if the transaction is done before a specific time of the day, otherwise it will only show the next day.
• Funds might be transferred to or from a person’s account on the incorrect date.
• It may be difficult to cancel an EFT.

2. Telegraphic transfers (SWIFT transfers) Telegraphic transfers  are a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office. Wire transfer systems are intended to provide more individualized transactions than bulk payment systems. Its advantages are:

• If you are stuck overseas without cash, someone at home can send you money electronically within a day
• You do not need Internet banking as the banks send the information directly to each other.
• Fees can be high.

3. Bank drafts A banker's draft (also called a cashier's check) is a cheque where the funds are taken directly from the financial institution rather than the individual drawer's account. Its advantages are:

• It is one of the safest ways to send money abroad.
• Bank fees and charges can be high
• Drafts need to be physically sent by mail or courier, so they may take a few weeks to reach the recipient.
• The recipient cannot cash the draft unless he has a bank account in which to deposit it.

4. Internet payments Internet payments describe any online payment (on the internet) for a product or service. Its advantages are:

• They can save time
• No need to stand in long queues to pay a bill
• People can log into their accounts at any time to get an up-to-date statement of their transactions
• Low transaction costs/fees.
• No internet access can cause late payments
• There is no direct contact with the business from which a product or service is purchased
• Computer crimes may result in money being stolen
• Criminals record a user’s keystrokes and then use this information to illegally access accounts.

5. Foreign Bank notes Foreign bank notes are cash (coins and notes) that the tourist uses in the country that they are visiting. Its advantages are:

• It’s useful to have cash on hand for immediate expenses.
• This is the most risky form of payment as if cash is stolen or lost it cannot be recovered.

6. Credit Cards A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual's credit rating. Its advantages are:

• Cards can be used to buy expensive items. The debt can be paid off over time
• They avoid having to carry large amounts of cash
• Most businesses accept credit cards as a form of payment.
• Some businesses do not accept credit cards
• It is easy to overspend and incur debt
• Transaction costs are charged every time you use the card
• Illegal copying of information from the magnetic strip of a card may give criminals access to an account (card skimming)
• Interest rates are high.

7. Preloaded foreign currency debit cards These cards, issued by all major banks, are preloaded with foreign currency before tourists travel and are also known as ‘cash passports’. Its advantages are:

• There is no chance of running into debt
• The money loaded onto the card is safe
• Activation of the card is protected by a PIN.
• Bank fees may be high
• Some cards charge a fee when you use them to make a purchase or withdraw money
• A lack of Internet access may make it difficult to load foreign currency onto the cards.

8. Traveller’s cheques A traveller’s cheque is a cheque issued by a financial institution that can be used as a form of payment and, if necessary, exchanged for cash. Its advantages are:

• They are refunded if lost or stolen
• They are available in all major currencies and can be exchanged at most hotels, restaurants and shops around the world
• They are useful as currency if a tourist is unable to find a functioning ATM.
• The exchange rate for traveller’s cheques is not as favourable as the interbank rate that tourists get when using a credit or debit card
• Nowadays few shops and businesses accept traveller’s cheques for the purchase of goods
• There are bank charges and fees for converting cash into traveller’s cheques.

Unit 2 Foreign market share

1.1 Inbound tourists Inbound tourists are incoming tourists, ie - people travelling to South Africa.

1.2 Foreign market share Foreign market share is the portion of the inbound tourism market that a specific country controls and includes both the number of tourists and the amount they spend. The two main categories of foreign markets are:

• Land markets: Countries where at least 60% of arrivals from the country arrive by land. For South Africa land markets are Botswana, Lesotho, Mozambique, Malawi, Namibia, Swaziland, Zambia and Zimbabwe.
• Air markets: Those countries where at least 60% of arrivals from the country arrive by air.

1.3 Arrival statistics Arrival statistics indicate the numbers of international tourists that arrive in South Africa. These numbers are collected, classified, analysed and interpreted.

2. Foreign arrivals to South Africa

Foreign tourist arrivals vary from year to year. We use the phrase source markets  to describe the main areas from which these tourists come from. One of South Africa's source markets is Europe. Examples of emerging foreign markets are India and China.

• What does the abbreviation EFT stand for? (2)
• List four advantages of using  EFTs. (8)
• What is a telegraphic transfer or SWIFT transfer? (4)
• Name one advantage of using a telegraphic transfer? (2)
• List four advantages of using the internet to make payments? (8)
• List four disadvantages of using the internet to make payments? (8)
• Explain what a credit card is? (4)
• List three advantages of using a credit card to make payments? (6)
• Explain the phrase foreign market share ? (4)
• The two main categories of foreign markets are? (4) 

Topic 2 Marketing

International tourists visiting South Africa form a vital part of our economy. In this topic you will learn about:

• The importance of marketing South Africa internationally
• The core business of South African Tourism
• Opportunities for marketing South Africa internationally
• How SAT’s marketing activities are funded
• The concept of branding and South Africa’s brand logo
• Local travel shows such as the Tourism Indaba and the Getaway show as
• Opportunities to promote South Africa and the Southern African region to the world.

Marketing South Africa

• The importance of marketing South Africa internationally
• The core business of South African Tourism
• Opportunities for marketing South Africa internationally
• Funding SAT’s international marketing initiatives: the role of Tourism Marketing Levy South Africa (TOMSA)
• South Africa’s brand logo
• Opportunities to promote South Africa and the Southern African region to the world

Unit 1 Marketing South Africa as a tourism destination

1. The importance of marketing South Africa internationally Tourism is a very important part of South Africa’s economy. In order to ensure that tourism continues to grow, South Africa must be actively marketed to international tourists as a tourism  destination. There are two main objectives in marketing South Africa as a  destination:

• Increase in annual volume of foreign arrivals to South Africa
• Increase in international awareness of South Africa as a travel destination.

2. The core business of South African Tourism (SAT) SAT has been specifically tasked with marketing South Africa as a destination, both domestically and internationally and can be described as a National Destination Marketing Organisation (DMO).

2.1 Marketing South Africa internationally as a tourism destination of choice SAT undertakes a number of marketing activities. These include:

• Participation in major travel shows both locally and internationally
• Advertising, public relations and direct mailing campaigns
• Holding educational work sessions with the international partners of South Africa’s travel industry.

SAT divides the international market into segments to identify the most important markets on which to focus. SAT categorises market segments as core markets, investment markets, tactical markets, watch-list markets, markets of strategic importance and strategic air link or hub markets. Core markets are the most important and receive the most attention.

2.2 Maintaining and enhancing the standard of facilities and services in the industry The product aspect of marketing is one of the five Ps of the marketing mix. Since facilities and services form the basis of the tourism product, the quality of these facilities and services needs to be maintained or, if necessary, improved. One of the ways in which SAT can do this is through the Tourism Grading Council of South Africa (TGCSA). The TGCSA evaluates accommodation establishments, such as guesthouses and hotels, and awards them a star grading. Other initiatives to ensure that the standard of facilities and services are improved include:

• Welcome Awards
• The Emerging Tourism Entrepreneur of the Year Award (ETEYA).

2.3 Coordinating the marketing activities of role players in the industry SAT spends a large amount of time and money on marketing South Africa as a destination. Other tourism organisations should use the marketing done by SAT as a platform for their own marketing initiatives. Marketing efforts should be coordinated so that they align with the strategy and positioning of South African Tourism. For this reason SAT works closely with other Direct Marketing Organisations (DMOs) at both provincial and local levels. SAT coordinates the marketing efforts of the different provinces and cities with the national marketing efforts.

3. Opportunities for marketing South Africa internationally Tourism intermediaries are very important in generating tourism business for a destination. International travel trade shows and expos are hosted around the world. The two best known of these are the International Tourism Exchange (ITB) in Berlin and the World Travel Market (WTM) in London.

3.1 ITB (Berlin) The ITB takes place annually in March. ITB draws more than 170 000 visitors, including 108 000 trade visitors, and over 10 000 exhibitors from 180 countries.

3.2 World Travel Market (London) The idea is to create opportunities for a wide variety of people from the global travel trade to meet, network, negotiate and conduct business under one roof. This is an annual event that normally takes place in November.

4. Funding SAT’s international marketing initiatives: the role of Tourism Marketing Levy South Africa (TOMSA) SAT needs a great deal of funding because international marketing is expensive. Tourism Marketing Levy South Africa (TOMSA) was set up in 1998 to raise additional funds for the marketing of destination South Africa. It is a private sector initiative. South African Tourism (SAT) makes use of these funds to promote the country as a preferred tourist destination, both locally and internationally. The TOMSA levy is 1% of each confirmed booking. The collection of the TOMSA levy by tourism businesses is voluntary. The amounts paid are not the same as paying a tax to the business. The tourist pays the levies and the business just acts as a collector of the levies. These levies are paid to the Tourism Business Council of South Africa (TBCSA), which administrates TOMSA.

6. Opportunities to promote South Africa and the Southern African region to the world 6.1 Tourism Indaba This is owned by SAT and is one of the largest tourism marketing events on the African calendar. Indaba can be compared to other ‘must visit’ events of its kind on the global calendar, such as the WTM and ITB. This tourism trade event showcases a wide variety of Southern Africa’s best tourism products, and attracts international visitors and media from across the world. Indaba takes place annually over four days normally in mid-May. It attracts well over 13 000 delegates from the travel, tourism, and related industries.

6.2 The Getaway Show The Getaway Show takes place annually both in the Western Cape, usually during March/April, and in Gauteng during August/September. The show is organised by the publishers of Getaway magazine and includes a wide variety of exhibitors, including outdoor equipment companies, safari tour operators, and tourist destinations in Southern Africa.

• What are the two main objectives in marketing South Africa as a destination? (4)
• What is the core business of South African Tourism (SAT)?  (2)
• Name three marketing activities that SAT undertakes? (6)
• What are the segments that SAT divides the market into? (14)
• Name two international trade expos that SAT participates in? (4)
• Name two local trade expos that promote South Africa? (4)
• Explain how SAT is funded?  (8)

Topic 3 Sustainable and responsible tourism

• The concept and background of the triple bottom line approach
• How tourism businesses can act responsibly (environmentally, economically and socially)
• Codes of conduct for tourist behaviour (social, economic and environmental)
• How a destination can attract tourists who are conscious of the triple bottom line
• How Fair Trade in Tourism South Africa contributes to responsible and sustainable practices
• How to make use of case studies of companies that practise the triple bottom-line approach.

The three pillars of sustainable tourism

• Environmental impacts (planet)
• Economic impacts (profit)
• Social impacts (people)

Responsible tourism and tourists

• How can a tourism destination attract environmentally (people, planet, profit) conscious tourists?
• The contribution of Fair Trade in Tourism South Africa (FTTSA) towards encouraging responsible and sustainable practices
• Case studies of companies that practice the triple bottom-line approach 

Unit 1 The three pillars of sustainable tourism

1. the concept and background of the triple bottom line approach.

The phrase bottom line refers to the bottom line of a financial statement, called the income statement. This line shows how much profit a company has made in a particular period. As international tourism continues to grow, governments have realised that tourism has more than just an economic impact on a country. Tourism also has social (people) and environmental (planet) impacts. These two aspects are added to the economic (profit) aspect to form the triple bottom line approach. If profit was the only objective, human and natural resources could be exploited so balanced approach is required.

2. Environmental impacts (planet)

2.1 Resource management (energy and water) Resource management refers to the way in which scarce and limited resources are managed. It is important that tourism businesses reduce their energy usage to help reduce pollution and protect our limited resources. Simple things like switching off unused appliances and lights that have been left on help conserve electricity.  The supply of fresh water is limited and large parts of South Africa receive little rain and are very dry. We need to conserve water to ensure that there is enough water for everyone. Simple things like fixing leaking taps help conserve water.

2.2 Waste management Waste management refers to the management of the amount of waste generated by a tourism business. It is important that tourism businesses manage their waste since waste has a negative environmental impact. The three Rs can be applied to manage waste - reduce, re-use and re-cycle.

2.3 Litter control Litter control is the reduction or avoidance of litter. Tourists should be encouraged not to litter. Tourism organisations should ensure that they provide enough rubbish bins, and encourage tourists to place litter in the correct bins for recycling. They should also encourage tourists to reduce, re-use and recycle.

2.4 Pollution control Tourism organisations should use environmentally friendly products where possible. This is done through pollution control. Pollution should be reduced or completely avoided. This will ensure that fewer harmful chemicals that pollute the ground and water are produced. Certain types of waste, for example, used motor oil and fluorescent tube lights, should be handled by professional waste management companies.

2.5 Environmentally friendly building Environmentally friendly building is the construction and design of new buildings, such as hotels, which are designed to have the minimal negative impact on the environment both during building and once operational.

2.6 Promotion of indigenous flora and control of alien invasive plants in grounds and gardens Alien invasive plants are plants that do not naturally occur in a particular area. They often grow out of control, affecting the indigenous flora. It is better to use indigenous plants when planning a garden, for example, for a new hotel, as they use less water and are part of our natural heritage.

3. Economic impacts (profit)

If tourism businesses do well, they have a positive economic impact on a destination. Tourism businesses have an important role to play in the responsible and sustainable management of tourism.

3.2 Responsible attitude of a tourism business towards the people and the environment it affects Tourism businesses must realise that their businesses are about more than just profit. They have a responsibility towards the community and the environment in which they operate. The most important aspect of this responsible attitude of a tourism business is that they do not exploit people or the environment for profit.

3.3 Ways to manage economic impacts

• Ownership: It is very important that government encourages and promotes local tourism business ownership.
• Employment: Employing local residents is important to ensure that the economic benefits remain at the destination.
• Procurement of local goods and services: Through the procurement of local goods (buying) from local suppliers, they are sharing the economic benefits of tourism with the other businesses at the destination.

4. Social impacts (people)

4.1 Positive and negative effects of tourism on local communities, culture and heritage Tourism can have both positive and negative impacts on communities, and their culture and heritage. Examples of positive effects include:

• Tourism creates an awareness of different traditions, cultures, and art forms.
• Tourism creates understanding between people of different cultures.
• Local communities absorb new ideas, interests, and values from tourists.
• Cultural heritage is preserved and money can be raised for the maintenance of cultural sites and museums.
• The local community learn to take pride in their culture.
• The money generated can be used to uplift the community.

Examples of negative effects include:

• Crime and violence may increase.
• Cultural changes may occur as the locals may adopt the culture of tourists instead of valuing their own culture and heritage.
• The money generated by tourism may not feed back into the local community.
• There may be racial tension between tourists and locals.
• There may be negative tourist behaviour such as public drunkenness.
• Tension may arise between tourists and locals if locals are denied access to culturally significant places.
• Sometimes privacy is not respected, sacred sites are invaded, and cultural ceremonies are exploited.

4.2 Corporate social investment (CSI) Corporate social investment involves a contribution by a business (corporate) to the community in which it operates and can take many forms.

Unit 2 Responsible tourism and tourists

1. codes of conduct for tourist behaviour (social, economic and environmental).

Most responsible tourism guidelines and handbooks focus on what tourism businesses should do to be more sustainable. There are also several organisations that have created lists of ways in which tourists can be more responsible travellers.

2. How can a tourism destination attract environmentally (people, planet, profit) conscious tourists?

People all over the world are becoming more concerned with sustainability. As a result, tourists are more concerned about whether tourism businesses are implementing responsible tourism practices. Tourism destinations can attract the right type of tourists by marketing the destination as a responsible tourism destination.

3. The contribution of Fair Trade in Tourism South Africa (FTTSA) towards encouraging responsible and sustainable practices

Fair Trade in Tourism South Africa (FFTSA) is a nongovernmental organisation (NGO) that promotes sustainable tourism development and responsible tourism management. FFTSA promotes sustainable and responsible tourism by:

• Creating awareness of sustainable tourism issues
• Researching better ways of implementing and planning sustainable tourism
• Advocacy of sustainable tourism issues to tourism authorities
• Building capacity through training
• facilitating a tourism Fair Trade certification programme, the first of its kind in the world.
• Explain what the phrase bottom line means? (4)
• Explain what the phrase triple bottom line means? (4)
• Name two things you can do to help water and energy management?  (4)
• What are the three R's in waste management?  (6)
• Explain what the phrase environmentally friendly building means?  (4)
• List three ways in which Fair Trade promotes sustainable and responsible tourism. (6)
• What is meant by the term Corporate Social Investment? (4)

Topic 4 Culture and heritage

• The concept of a World Heritage Site
• The role of UNESCO
• The logo and main functions of UNESCO
• The types of World Heritage Site
• Descriptions of the World Heritage Sites in South Africa
• The location of the World Heritage Sites in South Africa
• How the World Heritage Sites meet UNESCO’s criteria
• The value of the World Heritage Sites to South African tourism.

World Heritage Sites

• The concept of World Heritage Sites
• Types of World Heritage Sites
• The World Heritage Sites in South Africa
• The value of the World Heritage Sites to South Africa’s tourism industry

Unit 1 World heritage sites

1. concept: world heritage sites.

Heritage is the legacy preserved by past generations for future generations. In order to be given World Heritage status, sites must have outstanding natural, cultural or historical value and meet at least one of UNESCO’s ten selection criteria. A country can apply to the UNESCO World Heritage Committee for a site to be proclaimed a World Heritage Site. A place that is declared a World Heritage Site is proclaimed by the Minister of Environmental Affairs and Tourism by notice in the Government Gazette and thereafter included in the World Heritage List. An example is Robben Island.

2. The role of UNESCO

The United Nations Educational, Scientific and Cultural Organisation (UNESCO) is a leading international organisation responsible for the protection and development of heritage.

2.1 UNESCO logo and main functions The main functions of UNESCO are in five major areas. These are:

• Natural sciences
• Social and human sciences
• Communication and information.

Examples of UNESCO sponsored projects include literacy and teacher-training programs.

3. Types of World Heritage Sites

The three types of World Heritage Sites are: Cultural: Sites accorded the status on the basis of their tangible and intangible cultural heritage Natural: Sites accorded status on the basis of their natural heritage Mixed:  Sites accorded status on the basis of both cultural and natural heritage.

4. The World Heritage Sites in South Africa

There are eight heritage sites in the country that are inscribed in the World Heritage List because of their unique cultural and natural value to all humanity. They are:

• Mapungubwe Cultural Landscape
• Cradle of Humankind
• Richtersveld Cultural and Botanical Landscape
• Robben Island
• iSimangaliso (Greater St Lucia) Wetland Park
• Vredefort Dome
• uKhahlamba/Drakensberg Park
• Cape Floral Region.

5. The value of the World Heritage Sites to South Africa’s tourism industry

They are valuable in the following ways:

• They bring an awareness of the existence of the sites to both domestic and foreign markets.
• They increase the economic value of the provinces in which they are located as they attract both domestic and foreign visitors.
• They bring income into the establishments in the area of World Heritage Sites through provision of services such as accommodation, transport, food, drink, souvenirs and entry fees.
• They encourage close working relationships between tourism organisations and establishments in managing World Heritage Site destinations in order to improve the quality of visitor experience.
• They contribute to a sense of ownership and pride of cultural and natural heritage in the local community.
• They create job opportunities as increased visitor numbers result in increased demand for services.
• They result in the improvement of the infrastructure that provides access to the sites.
• What is the concept behind World Heritage Sites?  (8)
• What is the role of UNESCO?  (2)
• What are the three types of World Heritage Sites? (6)
• What are the eight World Heritage Sites in South Africa? (16)

Topic 5 Communication and customer care

• The concept of customer feedback
• The purpose of obtaining customer feedback
• Methods to obtain customer feedback including surveys, questionnaires, feedback cads, follow-up calls, SMS messages and web-based responses
• How to analyse feedback including studying and capturing feedback, identifying common complaints , deciding on an action and starting the intervention process
• The impact of the service delivered on an organisation and its profitability.

Methods of obtaining customer feedback and measuring customer feedback

• Concept: Customer feedback
• Purpose of obtaining customer feedback
• Methods to obtain customer feedback
• Analysing customer feedback
• The impact of service delivery on an organisation’s business profitability

Unit 1 Methods to obtain customer feedback and measure customer satisfaction

1. concept: customer feedback.

Customer feedback  is information coming directly from customers about the satisfaction or dissatisfaction they feel with a product or a service. Customer comments and complaints given to a  company are an important resource for improving and addressing the needs and wants of the customer. The information is procured through written or oral surveys, online forms, emails, letters,  or phone calls from the customer to the company.

2. Purpose of obtaining customer feedback

The top four reasons for getting customer feedback are:

• External performance feedback
• Retaining customers
• Advance warning in customer trends.

3. Methods to obtain customer feedback

There are a number of methods available for companies to use to do this, such as:

• Questionnaires
• Feedback cards
• Follow-up calls
• SMS messages on cell phones
• Web-based responses.

4. Analysing customer feedback

The following steps can be taken to analyse customer feedback:

• Study the feedback
• Identify most common complaints
• Decide on an action plan
• Start the intervention process.

5. The impact of service delivery on an organisation’s business profitability

The impacts that good service delivery have on an organisation’s business profitability include:

• Increased sales
• Customer loyalty
• Enhanced public image
• More effective employees
• Motivated staff members
• Reduced marketing costs.
• Explain what the phrase customer feedback means? (4)
• What are the top four reasons for getting customer feedback? (8)
• List six methods a company can use to obtain customer feedback? (12)
• What steps need to be taken to analyse customer feedback? (8)
• List six advantages that good service delivery have on an organisation’s business profitability? (12)

Topic 1 Tourism sectors

• Factors influencing a company’s professional image
• The importance of the image of company staff
• Basic conditions of employment in the tourism industry
• Contracts of employment
• The purpose and value of a code of conduct. 

Professional image in the tourism industry

• Factors contributing to a professional image in the tourism industry
• The image of company staff

Conditions of employment

• Information contained in an employment contract
• Basic conditions of employment in a tourism field

The purpose and value of a code of conduct

• Purpose of a code of conduct
• Value of a code of conduct
• Examples of codes of conduct 

Unit 1 Professional image in the tourism industry

It is important that people in the tourism industry portray a professional image. The image of a tourism business and its staff is of great importance when dealing with tourists from various countries, cultures and personal backgrounds.

1. Factors contributing to a professional image in the tourism industry

The following factors contribute towards the professional image of a company:

• Company image
• Company staff
• Physical appearance and product packaging
• Company customer policies
• Marketing material
• Company environmental policies.

2. The image of staff in the tourism industry

Tourists expect professionalism from tourism employees, who must be presentable, efficient and well trained. If service providers are unprofessional, it creates a poor image. Staff must have a professional image which includes:

• Appropriate dress code
• Good personal hygiene and grooming
• Interaction with customers
• Good communication skills.

Unit 2 Conditions of employment

Conditions of employment refer to the terms under which an employer has employed a person. Conditions of employment cover a broad spectrum of work related issues. Employees should read these conditions very carefully before signing a contract to avoid any misunderstandings or disagreements. The Employment Act applies to all employers and workers, but excludes:

• The National Defence Force
• The National Intelligence Agency
• The South African Secret Service
• Unpaid volunteers working for charity.

1. Information contained in an employment contract

The following details are normally included in an employment contract:

• Employer and employee details
• Employment details
• Payment details
• Leave details
• Notice/contract period.

2. Basic conditions of employment in a tourism field

The Basic Conditions of Employment Act stipulates that: 

• Workers are not allowed to work more than 45 hours a week or nine hours a day.
• Employees cannot be forced to work overtime, and by agreement for no more than ten hours a week.
• Overtime must be paid at 1,5 times the normal wage.
• Employees must have a meal break of one hour after five hours of work.
• Employees must have a daily rest period of 12 consecutive hours and a weekly rest period of 36 consecutive hours.
• Employees who work occasionally on Sunday must be paid double, and those who normally work on a Sunday must be paid 1,5 times the normal wage.
• Employees cannot be forced to work on a public holiday, and must be paid double if they agree to.
• Employees are entitled to 21 consecutive days' annual leave or, by agreement, one day for every 17 days worked.
• Employees cannot receive money instead of holidays, except when they leave the company.
• Employees are entitled to six weeks' paid sick leave in a 36-month period.
• Pregnant employees are entitled to four consecutive months of maternity leave, although they do not have to be paid during this time.
• Full-time employees are entitled to three days of paid family responsibility leave per year, but an employer can ask for reasonable proof of the circumstances.

Unit 3 The purpose and value of a code of conduct

A code of conduct is a set of rules outlining the responsibilities of or proper practices for an individual, party or business. The code of conduct thus takes the aims and objectives of the organisation into account. The code of conduct contains procedures to follow in certain situations and requires certain behaviours.

1. Purpose of a code of conduct

A code of conduct:

• Spells out the expected conduct of staff in their performance of duties
• Offers guidance for staff members faced with ethical challenges
• Guides behaviour
• Helps businesses ensure that employees act responsibly
• Protects businesses from lawsuits and ensures good workplace and public relations
• Acts as a public face for the business, identifying the ethics of the organisation to the outside world
• Is used as a reference for a business’ proposed course of action, or for when this course of action is questioned.

2. Value of a code of conduct

• Creates a cooperative and collaborative atmosphere
• Assists in promoting integrity in the workplace
• Creates agreed upon behaviours and methods of operation for the business
• Leads to improved company performance if linked to the aims and objectives of the company
• Promotes a good company culture as employees know what behaviour is expected of them
• Assists in the development of good communication between employer and employees
• States the company’s unique set of values and beliefs
• Can be used to create publicity and attract new customers.

3. Examples of codes of conduct

3.1 South African National Parks The Board of SANParks is highly committed to a policy of fair dealing and integrity in the conduct of their business. Their commitment is based on the belief that all activities should be conducted honestly, fairly and legally. The primary purpose of the code is a positive one: to promote exemplary conduct.

3.2 Southern Africa Tourism Services Association (SATSA) The SATSA Code of Conduct aims to ensure that the public receive the best possible service from members. The association wishes to maintain and enhance their reputation, standing and good name.

• List six factors that contribute towards the professional image of a company? (12)
• List five factors that contribute towards the professional image of staff? (10)
• The Employment Act applies to all employers and workers, but excludes who? (8)
• Which details are normally included in an employment contract? (10)
• The Basic Conditions of Employment Act stipulates that workers should not work more than how many hours per week?  (2)
• The Basic Conditions of Employment Act stipulates that workers should be paid what rate for overtime? (2)
• Explain what the phrase code of conduct means?  (4)
• Give two examples of organisations in South Africa that have  codes of conduct?  (4)
• A global event is an organised event involving people from countries from around the world. There are many different types of global events and they can attract a lot of media attention.(4)
• The Olympic Games is the largest sporting event in the world, the FIFA Soccer World Cup is the second largest sporting event in the world, the Tour de France cycling event is the third largest sporting event in the world and is held mainly in France. (4)
• The word indaba is an isiZulu word meaning ‘a meeting of elders’ but is used as a general term for meetings, exhibitions, and conferences. The Tourism Indaba is South Africa’s tourism showcase. It is the largest incoming travel trade exhibition in Africa and is held annually.(6)
• Generation of foreign exchange income, investment, the multiplier effect as money spent by a tourist circulates through the economy, development of infrastructure in the host country, job creation, future growth in international tourism.  (12)
• Facilities built for the event, may not be suitable for domestic use after the event, during the event, domestic tourism in the host country normally slows down, pollution of areas in and around the places used during the event, possible security risks, it might take a long time for the country to pay off this debt, construction workers involved in building roads and other facilities in preparation for the event could lose their jobs once the construction work is completed. (12)
• Civil war, terrorism, general unrest. (6)
• Natural disasters, diseases, Tsunamis, earthquakes, Global recession, accidents. (2)
• Travellers who have already booked will may cancel their trips. Tourists who haven’t yet booked trips to affected areas delay their bookings,  or may go elsewhere. Tour operators avoid booking trips to affected countries. Airlines suspend their flights to affected areas. (8)
• Malaria, yellow fever, bird flu, swine flu.   (4)
• A tsunami is a series of very large ocean waves caused by an underwater earthquake or volcanic eruption which damage infrastructure, buildings, attractions, ports, coastlines and beaches.(4)
• Packaged tour, Escorted packaged tour, Group packaged tour, Independent packaged tour, Scheduled tours.  (10)
• A tourist profile is a summary of personal information and facts relevant to the tourist’s wants and expectations. The tourist profile helps the travel agent plan a tour and make sure that the needs of the tourist are met.   (4)
• A valid passport, a valid visa, sufficient funds to cover their stay in the country, a return ticket, or onward ticket to another country, international law requires travellers crossing the borders of countries where yellow fever is endemic, to have a yellow fever vaccination. (10)
• An identity number, two passport photographs, fingerprints must be taken if aged 16 years or older, a fee dependent on the type of passport applied for. (8)
• DST is a way of making better use of daylight by setting the clock ahead during summer months (thus losing one hour) when DST starts, and setting it back again one hour in the winter months (thus gaining one hour) when DST ends.  (4)
• The phrase time zone refers to any of the 24 longitudinal divisions of the earth's surface in which a standard time is kept, the primary division being that bisected by the Greenwich meridian. Each zone is 15° of longitude in width, with local variations, and observes a clock time one hour earlier than the zone immediately to the east. (4)
• Jet lag is a general feeling of fatigue and disorientation often experienced by travellers by jet aircraft who cross several time zones in relatively few hours.  (4)
• They do not drink alcoholic beverages the day before their flight, during the flight, or the day after the flight, They do not drink caffeinated beverages before, during, or just after a flight, They drink plenty of water to offset the effects of the dry air in the plane, They do not eat too much on the plane, They exercise their legs from time to time while they are seated for their flight, They get up and walk around every hour or two, They do not take sleeping pills, They do not nap for more than an hour at a time, They break up long-haul trips across many time zones, if feasible, with a stay in a city about halfway to their destination, They wear comfortable clothes and shoes, They make use of sleeping aids. (8)
• Earth is divided into the Northern and Southern Hemispheres by the equator, and the Eastern and Western Hemispheres by the Greenwich Meridian.(4)
• Step 1: Locate the place for which you already know the time and day on a time zone map. Step 2: Locate the place for which you wish to know the time and the day of the week on a time zone map. Step 3: Count the time zones between the two places Step 4: Calculate the time by either adding or subtracting an hour for each time zone, depending on whether you are moving east or west. Step 5: If you have crossed the International Date Line, identify the day. (10) 
• Tourist attractions are places that tourists like to visit, such as national parks and heritage sites. An icon is a tourist attraction that is world famous and comes to represent or be symbolic of the country or city in which it is located.  (4)
• Icons are unique and tourists find them fascinating because they are the only one of their kind in the world.  (2)
• Robben Island and Nelson Mandela.   (2)
• (Students can list any ten of the following below) Australia: Sydney Opera House, Ayers Rock/Uluru-Kata Tjuta National Park. Brazil: The Statue of Christ the Redeemer Canada: Niagara Falls Italy: The Colosseum, The Leaning Tower of Pisa, Venice, Vatican City Egypt: The Great Pyramids of Giza, The Sphinx Germany: Berlin Wall and the Brandenburg Gate, The Black Forest China: The Great Wall of China Israel: The Dome of the Rock, The Wailing Wall Greece: The Parthenon India: The Taj Mahal Turkey: The Blue Mosque France: The Eiffel Tower, The French Riviera Japan: Mount Fuji Mexico: Chichén Itzá (Yucatan) Jordan: Petra Nepal: Mount Everest Saudi Arabia: Mecca Switzerland: The Swiss Alps Netherlands: Mill Network at Kinderdijk, Elshout Peru: Machu Picchu (Cuzcu) Poland: Auschwitz Concentration Camp Portugal: The Algarve Spain: Alcazar of Segovia, Bullfights Thailand: Floating markets Russia: The Kremlin, Red Square United Kingdom: Big Ben, Buckingham Palace, Tower of London, London Bridge United States of America: The Statue of Liberty, The Grand Canyon.  (20)
• Actual number of visitors exceeds the target number of visitors, repeat visits, income generated exceeds target figures, positive impact on local community and environment.  (8)
• Is an effect in economics in which an increase in spending produces an increase in national/regional income and consumption greater than the initial increase. (4)
• Good induction programmes and continuous training.(4)
• Transport to the attraction, Transport at the attraction, Parking, Accommodation, Toilet facilities, Information, Support facilities and services.  (14)
• Marketing, Income and financial management, Human resources, visitor management, Operation management.  (10)
• The phrase foreign exchange refers to the exchange of one currency for another, or the conversion of one currency into another currency. Foreign exchange also refers to the global market where currencies are traded virtually around-the-clock. The term foreign exchange is usually abbreviated as "forex".   (4)
• The GDP is a measure of a given country’s national income. GDP is a measure of all the goods and services produced domestically, usually in a period of one calendar year. The components included are consumer spending, investment made by industry, value of exports minus value of imports, and government spending. (4)
• Strong currency, also known as a hard currency, refers to a currency when it is worth more relative to other currencies. A weak currency, also known as a soft currency, is a currency with value that has depreciated significantly over time against other currencies and will fluctuate erratically or depreciate against other currencies. (4)
• A weak currency is good for nations that have more exports than imports because their exports will become cheaper for foreign buyers.
• A weak currency will stimulate manufacturing and export to areas with stronger currency.
• There will be an increase in manufacturing and job creation if the demand for exports increases.
• More foreign tourists will be able to afford to visit countries with weak currencies as it will increase their purchasing power.
• Higher prices of foreign products increase the cost of living in countries with weak currencies.
• A weak currency has a negative effect for people planning to travel to areas with a strong currency. (6)
• Inflation, Interest rates, Trade balance, Terms of trade, Government debt,  Political and economic instability, Employment outlook of a country. (14)
• It makes international travel for South Africans more expensive, It makes travelling in South Africa cheaper for foreign tourists.(4)
• The bank buying rate, The bank selling rate.(4)
• Step 1: Identify the exchange rate of the currency you need and find the ISO code. For example, the currency code of the rand is ZAR, while that of the US Dollar is USD. Step 2: Look up the exchange rate for your two currencies. Step 3: Calculate the exchange rate by looking at a currency pair (two currencies). The first currency in the pair, known as the base currency, is the transaction currency and the second currency is the payment currency. (6)
• Exports become more expensive. Countries with strong currencies will export less as the demand will decrease.
• Domestic manufacturing will decrease as there is less demand from both the domestic and foreign markets.
• Fewer foreign tourists will be able to afford to visit countries with strong currencies as it will decrease their purchasing power.
• A strong currency has a positive effect for people planning to travel to areas with a weak currency.  (6)
• Every time there is an injection of new demand into the circular flow there is likely to be a multiplier effect. This is because an injection of extra income leads to more spending, which creates more income, and so on. The multiplier effect refers to the increase in final income arising from any new injection of spending. (4)
• Electronic fund transfer   (2)
• It is safe and secure, It is efficient and fast, It is less expensive than paper cheque payments and collections, Money can be transferred throughout the world. (8)
• Telegraphic transfers  are a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office. Wire transfer systems are intended to provide more individualized transactions than bulk payment systems.  (4)
• (One of the two listed below) If you are stuck overseas without cash, someone at home can send you money electronically within a day OR You do not need Internet banking as the banks send the information directly to each other. (2)
• They can save time, No need to stand in long queues to pay a bill, People can log into their accounts at any time to get an up-to-date statement of their transactions, Low transaction costs/fees. (8)
• No internet access can cause late payments, There is no direct contact with the business from which a product or service is purchased, Computer crimes may result in money being stolen, Criminals record a user’s keystrokes and then use this information to illegally access accounts. (8)
• A card issued by a financial company giving the holder an option to borrow funds, usually at point of sale. Credit cards charge interest and are primarily used for short-term financing. Interest usually begins one month after a purchase is made and borrowing limits are pre-set according to the individual's credit rating.  (4)
• Cards can be used to buy expensive items as the debt can be paid off over time, They avoid having to carry large amounts of cash, Most businesses accept credit cards as a form of payment.(6)
• Foreign market share is the portion of the inbound tourism market that a specific country controls and includes both the number of tourists and the amount they spend. (4)
• Land markets and air markets.(4)
• Increase in annual volume of foreign arrivals to South Africa and increase in international awareness of South Africa as a travel destination. (4)
• Marketing South Africa as a destination, both domestically and internationally.  (2)
• Participation in major travel shows both locally and internationally, Advertising, public relations and direct mailing campaigns, Holding educational work sessions with the international partners of South Africa’s travel industry.   (6)
• Core markets, investment markets, tactical markets, watch-list markets, markets of strategic importance and strategic air link or hub markets.  (14)
• ITB (Berlin) and the World Travel Market (London)  (4)
• Tourism Indaba and the Getaway Show.  (4)
• SAT needs a great deal of funding because international marketing is expensive. Tourism Marketing Levy South Africa (TOMSA) was set up in 1998 to raise additional funds for the marketing of destination South Africa. It is a private sector initiative. South African Tourism (SAT) makes use of these funds to promote the country as a preferred tourist destination, both locally and internationally. The TOMSA levy is 1% of each confirmed booking. The collection of the TOMSA levy by tourism businesses is voluntary. The amounts paid are not the same as paying a tax to the business. The tourist pays the levies and the business just acts as a collector of the levies. These levies are paid to the Tourism Business Council of South Africa (TBCSA), which administrates TOMSA. (8)
• The phrase bottom line refers to the bottom line of a financial statement, called the income statement. This line shows how much profit a company has made in a particular period.(4)
• As international tourism continues to grow, governments have realised that tourism has more than just an economic impact on a country. Tourism also has social (people) and environmental (planet) impacts. These two aspects are added to the economic (profit) aspect to form the triple bottom line approach. If profit was the only objective, human and natural resources could be exploited so  balanced approach is required.  (4)
• Turning of unused appliances and fixing leaking taps.   (4)
• Reduce, re-use and re-cycle.  (6)
• Environmentally friendly building is the construction and design of new buildings, such as hotels, which are designed to have the minimal negative impact on the environment both during building and once operational.   (4)
• (Any three below) Creating awareness of sustainable tourism issues, Researching better ways of implementing and planning sustainable tourism, Advocacy of sustainable tourism issues to tourism authorities, Building capacity through training, facilitating a tourism Fair Trade certification programme, the first of its kind in the world.   (6)
• Corporate social investment is how companies help their communities. They set aside money, time or expertise for local nonprofit organizations to use to provide solutions for significant social problems.   (4)
• Heritage is the legacy preserved by past generations for future generations. In order to be given World Heritage status, sites must have outstanding natural, cultural or historical value and meet at least one of UNESCO’s ten selection criteria. A country can apply to the UNESCO World Heritage Committee for a site to be proclaimed a World Heritage Site. A place that is declared a World Heritage Site is proclaimed by the Minister of Environmental Affairs and Tourism by notice in the Government Gazette and thereafter included in the World Heritage List. An example is Robben Island. (8)
• UNESCO is responsible for the protection and development of heritage.  (2)
• Cultural: sites accorded the status on the basis of their tangible and intangible cultural heritage Natural: sites accorded status on the basis of their natural heritage Mixed:  sites accorded status on the basis of both cultural and natural heritage.(6)
• Mapungubwe Cultural Landscape, Cradle of Humankind, Richtersveld Cultural and Botanical Landscape, Robben Island, iSimangaliso (Greater St Lucia) Wetland Park, Vredefort Dome, uKhahlamba/Drakensberg Park, Cape Floral Region. (16)
• Customer feedback  is information coming directly from customers about the satisfaction or dissatisfaction they feel with a product or a service. Customer comments and complaints given to a company are an important resource for improving and addressing the needs and wants of the customer. The information is procured through written or oral surveys, online forms, emails, letters, or phone calls from the customer to the company. (4)
• Innovation, External performance feedback, Retaining customers, Advance warning in customer trends.  (8)
• Surveys, Questionnaires, Feedback cards, Follow-up calls, SMS messages on cell phones, Web-based responses.  (12)
• Study the feedback, Identify most common complaints, Decide on an action plan, Start the intervention process. (8)
• Increased sales, Customer loyalty, Enhanced public image, More effective employees, Motivated staff members, Reduced marketing costs.(12)
• Company image, Company staff, Physical appearance and product packaging, Company customer policies, Marketing material, Company environmental policies.(12)
• Uniforms, Appropriate dress code, Good personal hygiene and grooming, Interaction with customers, Good communication skills.  (10)
• The National Defence Force, The National Intelligence Agency, The South African Secret Service, Unpaid volunteers working for charity. (8)
• Employer and employee details, Employment details, Payment details, Leave details, Notice/contract period. (10)
• Workers are not allowed to work more than 45 hours a week or nine hours a day. (2)
• Overtime must be paid at 1,5 times the normal wage.  (2)
• A code of conduct is a set of rules outlining the responsibilities of or proper practices for an individual, party or business. The code of conduct thus takes the aims and objectives of the organisation into account. The code of conduct contains procedures to follow in certain situations and requires certain behaviours.(4)
• South African National Parks and the Southern Africa Tourism Services Association (SATSA). (4)

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