Soft Skills for Tourism Business

This self-paced course will help you to explore different soft skills which include interpersonal skills as well as personal characteristics. You will find out how they can help you interact and work with other people. You will discover a wide range of skills as diverse as teamwork, time management, empathy and communication that are required to be successful in the tourism and hospitality sector. 

Who is this course for? 

The course is intended for anyone working in the tourism and hospitality sector and anyone interested in the topic. 

What will you learn? 

• You will learn 10 essential soft skills and their relevance in the tourism industry for business success
• You will get information on soft skills regarding problem solving, task management and communication through cultural awareness and sensitivity 
• You will learn the process required for application of each of these skills
• You will practice these soft skills via various activities and scenarios to prepare you better

How much time do you need to invest? It will take you about 1 hour to complete this course.

Keywords: Sustainability, tourism, management, soft skills, communication, problem solving, task management

Course Certificate: The platform will automatically generate a certificate of participation and an Open Badge once you have finished all modules of the course and passed the questions in the assessment with 80%. If you would like to learn more about Open Badges, please click here.

Course Developers:  Commissioned and developed by GIZ Sector Project Cooperation with the Private Sector – Component Sustainable Development through Tourism. For developer information compare course imprint.

Introduction to Soft Skills for Tourism Business

In this section you will learn 10 essential soft skills and their relevance in the tourism industry for business success and get information on soft skills regarding problem solving, task management and communication through cultural awareness and sensitivity.

Lesson 1: Introduction

What are soft skills? 

Soft skills are essential for every tourism professional. They help towards better interaction and understanding among people. Soft skills include interpersonal skills as well as personal characteristics that help interaction with other people. A wide range of skills, as diverse as teamwork, time management, empathy and communication, fall under the term ‘soft skills’. 

Why do you need soft skills?

Lesson

Hi there, my name is Ruth Kamau. And I’m the owner of iKhaya Lodge & Conference Centre in Dunkley Square, Cape Town, South Africa. For the past 15 years, I’ve been working in the hospitality industry in Cape Town. 

Many times when people start a business, they start it with a family member, or a really close friend. Because, you know, you trust them, you know them. My brother Macharia is the co-owner of iKhaya Lodge & Conference Centre. Now we have a unique relationship in the sense that we were friends…from when we were like, way, way back. So, when he came across this space in Cape Town, he said to me, You know what? I think I’ve found what we were looking for. And here I am 15 odd years later.

Now, if there’s a place where you need soft skills, it’s in the family. And when you run a business together, wow, you know, you really put yourselves to the test. So, it helps that we love each other, but beyond that, we have to run a business together. And beyond that, we have to understand that the business is…it’s an animal on its own, and it grows in its own space. Soft skills are personal attributes that make it possible for you…to effectively and harmoniously interact with other people. And they’re vitally important in everyday day-to-day life. Even in a relationship, actually, you need soft skills with your partner. I suppose if I was to flag the three key soft skills that one would probably require is leadership, teamwork and empathy.

In the hospitality industry, it becomes vitally important, because when people are paying for a service, they actually expect you to go the extra mile. And in real terms, perhaps that’s one of the biggest challenges about the hospitality industry, because it’s the one place that people come to get spoiled, to get pampered, to feel special. So, soft skills then end up embracing such a large context of personal attributes. 

And in that it was very quickly evident that it’s important also to multitask in soft skills, so that everybody begins to understand everybody’s roles, and sometimes help in. And that makes everyone feel like they belong. And that is what makes a team really cohesive. 

So, I know from experience that human resources are really important in order to grow your team, and to lead with passion. But it’s also really important, because that’s the way to make your business sustainable. If people are turning over all the time in your business, it’s going to be hard because you keep losing all the knowledge that you put in people. And also you don’t get to build on what you’ve already put in. So, to get a good team, to lead with passion, and to make your business sustainable, human resources are a bedrock, and they can’t be taken too lightly.

As Ruth Kamau said in the film: almost all interactions with other people require some level of soft skills. It might be negotiating to win a new contract with one of your partners, presenting a new idea to your team, networking to enhance your business, etc.

Employers and customers alike appreciate the importance of soft skills. Research has consistently shown that employers nowadays give priority to soft skills when hiring, as these skills make it easier to form relationships with people, create trust and lead teams.  

Thus for the tourism business, improving soft skills will:

Productivity

Increase Productivity as employees manage their time better to complete tasks.

Teamwork 

Improve Teamwork as people will work better together through effective communication.

Employee satisfaction

Improve employee satisfaction and thus improve retention rates as employees trust leadership that is empathetic and willing to listen.

New clients

Attract new clients as cultural awareness will reduce stereotyping and biases and enhance understanding of differing needs.

It is therefore vital to develop these skills if you want to progress in the tourism profession as they will set you apart from your competitors.

Lesson 2: Leadership Skills

The importance of Leadership Skills cannot be underestimated. The recent economic situation with the Covid restrictions has hit the tourism industry hard and customers come to you because of decisions you have taken as a leader. You, as a leader, can make or break the business. 

Leadership skills are important in the tourism industry as there are many stakeholders involved and they often need your guidance to proceed in the right direction. For some, leadership comes naturally but, for others, it needs to be developed. Ruth Kamau

What is Leadership?

Leadership is the art of motivating a group of people to work toward achieving a common goal. Leadership is the process of a person (or a designated group of people) leading others. This can be in an organisation, a small business, a group of friends or even in a family.

Qualities needed as a leader in tourism

1. People Skills

These are a set of soft skills that will ensure that your team, partners and customers are happy to work with you, which, in turn, will help your business thrive.

2. Business Skills

These are a set of hard skills like IT, familiarity with the software used in the tourism industry, financial literacy, knowledge of legal documents, setting policies & processes, etc.

Soft people skills for good leaders

Empathetic

You have the team members’ best interests at heart and want to see them progress in their lives. When you win, they win too.

Trusted

You can be trusted by your team. They know that you will not let them down. Should things not go according to plan despite best efforts, you will not blame them but will take collective responsibility. You praise them for their accomplishments and do not take all the credit.

Fair and without bias

Everyone in your team gets equal opportunities based on their area of expertise. You are not biased based on their personal likes/dislikes or their diversity issues.

Respectful

You respect each of your team-members and they, in turn, respect you. Thus, it is mutual respect.

Clear communicator

You are a clear communicator so your team understands your vision and how to work towards it.

Delegate

You do not believe in micro-management or abusing your power, so you delegate tasks to your team members (provided they have the correct skill-sets) and encourage them to achieve their highest potential.

Enjoy life

You believe in celebrating and making the workplace a more enjoyable place to work. You understand that the workplace is a big part of your own and your team’s life.

Positive attitude

You constantly display a positive ‘can-do’ attitude and continuously encourage the team, even in tough times.

Professional and timely

You are professional and timely in your various commitments and expect the same from your team.

Problem solver

You are a problem-solver and flexible in your approach, Creativity and strategy finding solutions that benefit all.  

Complete the sentence

“A good leader should always ………..”

What you write to complete the sentence will tell you a lot about your preferred leadership style.

We will discuss five overarching styles of leadership. You can blend them in order to find a style that suits you. Also remember that the style you use depends on the task at hand. 

Leadership styles

Authoritarian Leadership Style

You are like a commander who instructs people and expects them to follow your instructions without question. In emergencies, this style of leadership is required as time is of the essence and there is no margin for discussion.

Participative Leadership Style

You consult your team on the process and outcome and, together, conclude what should be done.

Delegative Leadership Style

You empower your team to make decisions and to inform you about them.

Situational Leadership Style

A situation arises that demands that you take charge and follow one or more of the above three leadership styles in order to resolve the situation.

Coaching Leadership Style

The leader is like a coach who trains and encourages his team to work towards the set goal. The leader knows much more than his team members, thus his team looks up to him as a mentor.

Self-reflection

• Do you have a preferred leadership style? Think of examples where you see a repeat pattern of your leadership style.
• How does your team respond to your leadership style?
• Does your business and team demand a certain style? 

Lesson 3: Teamwork Skills

Teamwork is an essential part of most businesses, especially in the tourism industry. Even if you work alone, your team consists of your partners and other service providers. You are co-dependent on them. 

Teamwork is vital if you want to work well with colleagues and teammates. You can be part of a team at work as well as in your personal life.

What is a successful team?

A successful team is one where everyone’s unique skills and strengths help to achieve a shared goal in the most effective way.

Why are teamwork skills important? 

Motivation

• Teamwork motivates unity in the workplace — a teamwork environment fosters friendship and loyalty. You will often find that many of your colleagues are also your mates after work.
• These close-knit relationships motivate employees and help them to work harder, cooperate and be supportive of one another.
• Teamwork provides opportunities for learning. You can learn from each other’s mistakes and also gain new skill sets from more experienced colleagues.  

Perspective

• Teamwork offers different perspectives and ways of problem-solving — good teamwork encourages diversity of thought and creativity in approaches to challenges. A good team environment allows individuals to brainstorm collectively which, in turn, increases their ability to problem-solve and arrive at solutions more efficiently and effectively.
• Teamwork allows for innovation and healthy competition in order to accomplish team goals.
• Team effort increases output because quick feedback and multiple skill sets are there to support your work. You can design, plan and implement much more efficiently when a team is functioning well.

Unity

• Different experiences and strengths add to the depth of the team, increase the accountability of each team member towards the team and help to make effective decisions faster.
• Teamwork promotes collaboration and relies on the various strengths present within the team, thus allowing for new opportunities.

Now that you understand the importance of teamwork, let’s see how you can become a really good team-player and contribute effectively to your team.

Team-player qualities

What qualities must you have to be a good team-player? 

As you go through the list below, ask yourself: “Which of these qualities do I bring to my team? Which qualities do I need to develop?” 

10 Qualities: Self-assessment

Rate yourself from 1-5 (1 is lowest and 5 is highest) as you go through the 10 Qualities. At the end, you will see the areas you need to improve on.

Write down your score for each quality and add up at the end.

Quality 1: Be professional and knowledgeable

You must be professional and knowledgeable about the area of your work and the business as a whole. You must also be able to absorb useful information around you. 

You must always be willing to learn. Knowing what you already know is not enough in today’s world that is full of competition. You should be willing to learn new skills, traits or whatever is needed to help your team succeed. Broaden your knowledge by reading, watching informative videos or working with a coach.

Do you have this quality? Give yourself points from 1 to 5 for this.

Quality 2: Be generous

You should be generous and ready to share your knowledge and expertise with other people. An efficient team player recognises that sharing knowledge about certain projects can lead to better results. 

After all, two minds are better than one. Do not hesitate to impart your knowledge to your colleagues if it helps solve a problem.

Do you have this quality? Give yourself points from 1 to 5 for this.

Quality 3: Be a clear communicator

You must be a clear communicator and ensure that your team members understand what you are conveying. Break down your communication into small bites if it helps your team.

Do you have this quality? Give yourself points from 1 to 5 for this.

Quality 4: Be open and accepting of others suggestions

You must be open and accepting of others suggestions even if you feel you have the best solution. Be adaptive and flexible to other people’s working styles and capabilities, giving them the opportunity to adjust. 

Sometimes an unexpected suggestion from a team member may provide a whole new concept.

Do you have this quality? Give yourself points from 1 to 5 for this.

Quality 5: Contribute your thoughts and be willing to speak up

One of the dangers of being a part of a close-knit team is that you might be afraid to speak up against the majority. This can lead to all team members agreeing outwardly even though they personally disagree in their minds. 

You should always contribute your thoughts and be willing to speak up if you think it will be beneficial to the team.

Do you have this quality? Give yourself points from 1 to 5 for this.

Quality 6: Avoid aggressive competitiveness

Avoid aggressive competitiveness or jealousy. Focus on the success of your team and your business. Do not encourage negative thoughts.  

Do you have this quality? Give yourself points from 1 to 5 for this.

 

Quality 7: Be willing to help

Always be willing to help your team members and gain their trust. Your listening and empathetic skills will make you a desirable team member. Asking your colleagues if they need help and lending a hand when needed can earn big points for you in the team.

Do you have this quality? Give yourself points from 1 to 5 for this

Quality 8: Treat your team with respect

Always treat each individual member of your team with respect. Be a colleague first, even if you are the manager. This will help build a strong and healthy relationship of mutual respect with your co-workers.

Do you have this quality? Give yourself points from 1 to 5 for this.

Quality 9: Be dependable

Be dependable – when you say you will do something, the team should be able to rely on you to complete the task. Do it responsibly and to the best of your ability.

Do you have this quality? Give yourself points from 1 to 5 for this.

Quality 10: Accept your mistakes

Last but not least – have the humility to accept your mistakes. If you are a good team player, you will back off when it becomes clear that you are not on the right path. 

If you believe that your team is making a mistake, you should bring up the issue when the time is right. Being stubborn is not a quality of a good team player.

Do you have this quality? Give yourself points from 1 to 5 for this.

Feedback Exercise

Now add up your points on the 10 Qualities of a Good Team Player. If you score 40 or above, you are doing well but there is always room for improvement. If you score less, look at where you scored 3 points or less and work harder on these areas. So, what was your score?  

Lesson 4: Empathy Skills

“Nobody cares how much you know until they know how much you care.” Theodore Roosevelt

What is empathy?

Empathy is the ability to relate to the thoughts, emotions or experiences of others. It is more than simple sympathy, which is being able to understand and support others with compassion or sensitivity.

It entails understanding their feelings, needs and challenges by putting yourself in their shoes.

Empathy makes you a better service provider as you understand your clients and can customise your tourism product to suit their needs. This can give you a competitive edge over other operators and helps increase your business. It will also help you gain your colleagues’ trust and even help you in your personal life.

Why is empathy useful for your business?

Working Relationships

• The success of most businesses and certainly all tourism-related businesses is highly dependent on the relationships forged. Empathy generates an interest in and appreciation of others, paving the way for more productive working relationships.
• As a leader, if you are empathetic towards your co-workers, they will respect you more as they will feel that you genuinely care for them. They will be willing to assist, as opposed to simply following rules and policies.
• You will also see an increase in loyalty from your team members — you are there for them and they are there for you. This will help build the trusted team that you need for your business success.

Business Success

• Because they feel your empathy, the team is more willing to take risks for the betterment of the business. They trust that if, for some reason, a plan fails, they will not be singled out and blamed.
• By listening to teammates about why a task did not go according to plan, you can figure out the root cause of the problem.
• If empathy is encouraged in your workplace, you can build a culture of honesty and openness which is good for emotional well-being and consequently good for the business.

Being empathetic makes you privy to information that can prepare you for potential challenges. Thanks to your empathetic skills, your team members will feel that you are able to understand the difficulties they are facing. They will share their problems openly with you and, with this information, you can plan alternatives so that the business does not suffer.  Ruth Kamau

How to show empathy

Make time

Make time for the other person.

Do not choose a time or place to talk where you might get distracted.

Listen attentively

Listen attentively and focus only on the individual with the issue.

Show interest in what he/she is sharing. Show that you care.

Avoid quick feedback

Do not be in a rush to give opinions or solutions.

Sometimes showing empathy simply means listening.

The person you are listening to will respond positively when he/she feels that they are being heard and that their issues are being recognised.

Do not be judgmental

If you do feel emotions rise within you, ask yourself why.

Acknowledgement

Acknowledge their pain/fear. It helps them to just know that someone else understands. Share how you feel about their issue. Show genuine concern.

Encouragement

Be encouraging, but realistic, that something positive will result.

Do not be condescending or give generic statements like “it happens – no big deal” or “this is nothing … you don’t know what happened to me…”. Even if their problem is not really serious, you must not make them feel foolish.

Supportive

Be supportive. Offer to be there and ensure that you are available.

Ask them how else you can help. Gently suggest alternatives only if appropriate.

Body language

Display positive body language of listening and caring. Lean towards them but maintain a comfortable distance, depending on how close you are to the person.

The tourism industry is a people-oriented industry. Empathy is one of the most important soft skills for success with team members and clients alike. 

 

Soft Skills for Problem Solving and Task Management

Lesson 1: Task Management Skills

What is task management?

Task Management Skills are important for running projects. Tasks, by nature, are the parts that are needed to complete the project. The basics of task management are to capture, organise and assign everything that needs to be done in order to complete a project.

Task management can be part of project and process management. Task management means the project or process is broken down into small tasks. Therefore, it can be seen as the basis for efficient workflow in an organization.

Description

Let’s talk about glorious task management. You know, they say the devil is in the detail. Well, I like to say that success lies in the detail, and that’s how I look at task management. It’s not easy, but it needs to be done. For instance, we are having a function, right. And every function is unique. Everybody wants something bespoke about their function. So what we do is, you know, normally we receive a phone call, or an email, and it will say “Hello, team iKhaya Lodge. We would like to hold a function for 50 people, on X date from, and we want to know if you’re available”. And so we normally reply, “Thank you very much, we’re excited that you’d like to have your function at our venue. Could you give us a little bit more information?”. 

And then begins the task management. The task management requires: What date is it? How many people? From what time? Are there dietary requirements? You know, will you be having entertainment? Should we provide entertainment? So you list them off, one by one, to guide the client into responding to you accurately. Because the more information you have. when you’re managing the task, the better. 

I suppose, if you think about it in the simplest terms, task management is seeing something from beginning to end. And then, because you know that you have to replicate it, you create a list that you follow through, and then you have a process in place. And that saves a lot of time. And that’s another thing about task management, actually. It’s a time saver. Because you don’t have to reinvent the wheel every time you need to do something. 

You either perfect it, or vary it, but ultimately what you have, are systems and processes in place, that are designed by your task management. So, it’s really cool. 

Have faith in yourself. Have faith in your dream. Look, if everything was so easy, we could all do everything. It’s because things are not that easy, that it takes passion. So, if you believe it, you can be it, but then you need faith and passion. The first five years are hectic. There are going to be huge highs. And then there are going to be these awful lows, when you’re scraping the bottom of the barrel, and you’re asking yourself, why on earth did I do this? 

You need to also make sure that you have the right people around you. That’s sometimes easier said than done, because the right people around you, even before you start hiring people, it’s the people who you associate with. It could be family. It could be friends. If you are hiring people, boy, it’s working. Because it means you’re replicating yourself. It means you need that extra support to make your dream come true. Hire the right people. Listen to them. Talk with them, not to them. So remember. Believe in yourself. Have faith. Keep the positive vibe around you. Hire right. Be passionate and have fun. It will work. 

As Ruth Kamau explained in the film: Task management means managing a task from beginning to end. It involves planning, testing, tracking and reporting. 

Information must be provided so that you or any team member understands the priority of the task, the due date, the people involved, the budget, the next steps, etc.

Why is task management important for your business?

Running projects efficiently and effectively

Task management is required for running projects efficiently and effectively. It is an important aspect of Project Management because it follows every task thoroughly including planning, analysing, evaluating and reporting about the particular task progress.

Effective allocation of resources

It helps with the effective allocation of resources, be it manpower, time, budget, etc. This, in turn, helps reduce waste and increases your profits.

Prioritise tasks

Task management helps to prioritise tasks that must be finished, as well as tasks that can wait. It thus relieves the team from undue pressure and increases productivity. It also helps timeliness especially if you have limited resources.

Deliver on time

Task management helps both you and your team to deliver on time as you can monitor progress daily through the Task Management System — be it online or manual.

Monitor the financial situation

Task management helps monitor the financial situation for each task in the project and helps you to stay within budget. If you know that you are unexpectedly going over-budget in one area, you can try and reduce expenses in another area. This is possible because you are looking at the task as a whole which gives a complete picture.

Motivator for you and your team

Breaking big projects down into specific tasks can be a huge motivator for you and your team as there is a sense of accomplishment as each task is completed.

10 Soft skills for task management

Rate yourself 1-5 (1 being the worst and 5 being the best) on the 10 soft skills listed above for task management.

Step 1: Allocate your resources wisely

You must allocate your resources wisely, be it manpower, budget, time, equipment, venue, etc. Your business has limited resources, so the use of unnecessary resources increases costs and reduces your profit. 

However, not allocating enough resources can have the reverse effect. Your team will feel stretched, the materials may be compromised and in the end, the delivery of the task may not be timely nor of the expected quality.

Step 2: Connect individual tasks to the expected project outcome

The goal of the project must always be in sync with the task at hand. Otherwise, the end result can be misaligned and useless.

Step 3: Monitor closely and have a complete picture

As the Task Leader, you must monitor closely and have a complete picture of each task at all times, from start to finish – the resources allocated, the progress being made, the deliverables being met (or not), the available manpower, etc.  

Step 4: Be patient and proactive

Most projects do not go as initially planned. Situations change. Availability of various resources can change. You must be patient and not get emotional about it. Be proactive in anticipating such situations and be willing to handle risks. Be prepared for the unexpected. If a staff member is sick or if a product is unavailable, you must accept that this is part of the risk and unpredictability of a project or task. Be ready to make calculated adjustments for sudden changes and do not let them perturb you.

Step 5: Prioritise tasks

You must prioritise tasks based on their importance and urgency. Be flexible and adapt. If a task is no longer relevant due to a change in priority, discard it. 

Task management focuses on how to manage tasks that exist but also means that some tasks need to be eliminated

Step 6: Communicate clearly and regularly

Communicate clearly and regularly with your team regarding task updates. They do not appreciate being kept in the dark and will become demotivated if they are not sure of what is going on

Step 7: Communicate clearly and regularly

Communicate clearly and regularly with your team regarding task updates. They do not appreciate being kept in the dark and will become demotivated if they are not sure of what is going on

Step 8: Stay involved

Stay involved with the team even if you have delegated the tasks. You need to follow up consistently to ensure that targets are being met. Avoid micro-managing though.

Step 9: Stay focused

There can be many distractions that take your attention. One single task, not completed on time or below standard, can affect the entire project quality. 

Step 10: Be tech savvy

There are many software options available for task management. Some are free. Depending on your budget, choose a system that suits your needs. For teams involving multiple offices locally or globally, an online Task Management System is recommended.

Self-directed exercise

Which areas do you need to improve on?

Set a target and create a schedule and budget to improve the areas where you had a low score. 

Monitor and evaluate your progress – much like the task management process itself.

Lesson 2: Problem Solving Skills

Problem solving is one of the most desirable soft skills in the tourism industry because there are so many unpredictable elements that constitute a tourism package. It is about being able to identify an issue and find innovative ways to solve the challenge. Ruth Kamau

What is problem-solving

Problem solving is a skill that helps you resolve issues quickly and effectively. You will be able to identify problems and implement solutions. This is a very desirable skill in any industry as it makes you reliable, dependable and an innovative member of the team. By solving problems, you increase business effectiveness and profitability.

The 8 Steps for Problem Solving

 

Step 1: Identify the Issue

• You must have clarity about the problem/challenge/issue.
• Different people have different perspectives on what the issue is because each is looking at it from their own point of view.
• You can get better information about the issue through data gathering and data analysis.

Step 2: Understand the interests of everyone involved

• A good problem solver will want a win-win outcome for all. What are the interests of each member? Interests are the needs that you want to satisfy by finding a solution.
• Don’t lose perspective by getting attached to one particular solution.
• This is a time for active listening.
• Set aside any conflict that you may have with the other party and listen in order to understand.

Step 3: List the possible solutions

• Brainstorming is a good tool. You can brainstorm with the inner circle and the outer circle, and even with yourself in order to find possible solutions.
• There should be no judgment or evaluation of what is doable or the restrictions of any potential solution. Ideas should be collected. This non-judgemental setting allows for creativity of ideas for possible solutions.

Step 4: Evaluation of potential solutions

• Each of the potential ideas collected in the step above is evaluated and the pros and cons considered.

Step 5: Selection of a solution(s)

• After having considered each suggested idea and discussed its possibilities, it is time to choose one solution, or a combination of ideas, to create a solution.
• Ensure that it satisfies each stakeholder to some extent.
• Formally record the selected solution.

Step 6: Implementation

• Once a solution has been found, it can be put into action.
• Personnel involved must be informed of any changes to the Standard Operating Procedure (SOP) that they are used to.
• This step involves other skills that you will cover – Task Management & Time Management.

Step 7: Monitor & assess effectiveness

• The newly implemented solution must be monitored over a period of time and its effectiveness measured.
• Encourage feedback from all the stakeholders.
• It should not cause similar or new problems.

Step 8: Restart process if required

If the problem continues or new issues arise, the plan may be changed mid-stream by starting the Problem Solving Process again.

Traits of a good problem solver

• Analytical and a good researcher
• Innovative and creative
• Adaptable and flexible
• Level headed without an air of arrogance
• Willing to take risks and initiate new solutions
• Resilient in the face of failure and treats it as new opportunity
• Team-player as well as a leader
• Good communicator

Problem-solving exercise

Issue

After complaints about insensitivity and bias from a couple of customers, you want your employees to get trained in Cross-Cultural Communication. However, they feel that their communication skills are good enough and they say that they are too busy. You have set aside resources and arranged for a trainer who has just informed you that the signup rate for the training program is really low.

Which of the possible solutions below will you choose?

Make it compulsory

Possible. but the downside is team members may feel that they were forced to do the training and may be disinterested during the session.

Give them a reward for attending

Possible, but downside is it is not sustainable as employees will expect rewards for attending all training. It will also cost your business.

Communicate the issue and need for training

Best solution. You can make the training a team-bonding event — not just a training event.

Lesson 3: Time Management Skills

“Time is really the only capital any human has, and the only thing he can’t afford to lose.”   Albert Einstein

Time Management Skills are simply the ability to manage your time well. Time management is the process of planning and controlling how much time is spent on specific activities. Good time management skills will enable you to complete more in a shorter period of time, lower your stress and be more efficient and effective for your business success.

Time is an extremely perishable commodity. No one understands that better than the tourism industry. Time means money and greater profitability for the business. Thus it is important to understand and practise good time management.

Benefits of time management skills

You get ‘extra’ time

If you practise good time management, you will find that you have more time for other business activities or even personal hobbies and recreation. You will have more time for your colleagues, friends and family.

Your stress is reduced

Planning your day, making a task schedule and following it reduces anxiety that you may have spent too much time on something and, as a result, may have missed out on something else that was important. Your time scheduler, calendar or your to-do list will reduce worry as you will see things being crossed out. It will give you a sense of achievement to have accomplished those tasks on time.

You maximise the business opportunities

You maximise the business opportunities for perishable products that are time-bound. If you manage time well, you will have more turnaround for tourism products like hotel rooms, transportation, guide services, etc. This will increase sales and up your business profits.

You accomplish your tasks and goals

You can accomplish your tasks and goals by structuring your work based on time. For example, if you decide to create your company website and you schedule each step over a period of time, it will help you to accomplish the various steps as per your schedule and you will complete your website on time.

You are professional and respectful of other people’s’ time

If you schedule and manage your time well, you will complete tasks on time and will come across as a professional. You will also be seen as someone who values other people’s time and this respect will encourage people to work with you.

Steps for Effective Time Management

Step 1: Set goals

Having a clear vision and setting goals is the first step to becoming a good time manager.

Goal-setting helps you understand your end goal and what exactly you need to prioritise to accomplish it.

Setting short-, medium– and long-term goals also helps with time allocation.

Your goals should be SMART – Specific, Measurable, Attainable, Relevant and Timely. 

Step 2: Plan and schedule your work

A fundamental part of time management is basic planning – your day, your meetings, your calls, even your personal commitments.

Being organised will help maintain a clear picture of what you need to complete and when.

Make ‘Must-Do’ lists alongside ‘To-Do’ lists. Use a scheduler or a calendar to keep track of your tasks and commitments. Set a time limit for each task and try and stick to it.

Step 3: Prioritise

Prioritising your responsibilities is key to being a good time manager.

There are many ways to prioritise what you need to accomplish. For instance, you may decide to complete fast, simple tasks first followed by longer, more involved ones.

Or, you might prioritise your tasks starting with the most time-sensitive.

You might also decide to address tasks that are the most lucrative for the business, especially if you foresee time or resource limits.

Step 4: Delegate

You may be a perfectionist who likes to do everything yourself. However, good time management entails delegation.

It can be difficult to say “no” when someone asks you to do something, but you can delegate it to a trusted colleague.

It is important to set boundaries in order to accomplish your goals.

Step 5: Do not procrastinate

Procrastination means putting off until later. Regularly delaying or postponing tasks on your schedule will mean that they will start to pile up.

This means that you then have to let something else go in order to complete the task or that the task will not be good quality because of lack of time.

There is a famous quote “Do today what you have to do tomorrow, and do now what you need to do today…”

Step 6: Avoid distractions

It is easy to become distracted, especially if the tasks are difficult, long or uninteresting (but important).

For effective time management, stay focused and stick to your schedule. Do not allow distractions to rule your day. 

Step 7: Do not get stressed

Good time management means that your mental health is not compromised.

Sometimes stress is unavoidable, but handling it in a positive way helps you stay motivated.

It is imperative that you schedule small breaks throughout the day (to just stare into space and stop worrying).

Step 8: Review your timelines regularly

You should constantly be aware of the timelines for each task as well as the overall projects.

Schedulers like Gantt Charts or Excel Spreadsheets can help you to stay on top of your time commitments.

If you miss a deadline or know that a project is taking longer than expected, check if you can squeeze extra time from your schedule.

However, if you do expect delays, communicate this clearly and as soon as possible to all stakeholders.

• Important and Urgent: Do these tasks right away.
• Important but not Urgent: Decide when to do these tasks.
• Urgent but Not Important: Delegate these tasks if possible.
• Not Urgent and not Important: Assess the need for these tasks and possibly set them aside to do later. 

Implications of poor time management

Poor workflow

The inability to plan ahead or stick to your schedule means poor efficiency. If your work-plan is weak, tasks will not be completed in sequence. This will entail wasting time and may result in non-accomplishment of goals and lower productivity for the business. 

Getting easily distracted and wasting time

For example, chatting with friends on social media while trying to complete a task. Time is perishable — if you waste it, you will not get it back. It will mean delays in accomplishing your tasks, which is unprofessional. 

Not having control

A poorly planned schedule, or indeed no schedule at all, will leave you wondering what you should do next and how much time it will take. This lack of clear, accessible information can cause increased stress levels.

Poor quality of work

Poor time management can mean very little time to complete certain tasks, which can compromise the quality of your work. This could damage your reputation as a professional as well as trust in your business.

Cultural effect on time management

Punctuality

Punctuality has different connotations across the globe. For example, if you have a meeting at 10am, some cultures will see 9.45am as being on time, some will see 9.55am as being punctual, and others will see 10am as 10am. Some cultures find it quite acceptable to arrive a few minutes late and others even find a delay of a few hours acceptable. 

Be ready to adapt

Some cultures view time as more flexible and see schedules and deadlines as restrictive and inflexible.  Delay is accepted, not seen as a negative and often even expected. 

Be ready to adapt to the culture of the person you are interacting with or else make your expectations on time clear to them at the beginning. 

Lesson 4: Stress Management Skills

The tourism industry is a demanding one. You will probably be stressed often so this needs as much attention as any other skill. You are more productive when you are not stressed. 

To manage your mental health better, here are some practical tips

1. Exercise regularly

working out regularly is one of the best ways to relax your body and mind. Walk, exercise, yoga or playing sports will enhance your mood and improve your circulation.

How often do you exercise per week?

• Often enough
• Not often enough
• Still trying to start

2. Stretch your muscles

Loosen your tense muscles with a massage, hot bath or simply by stretching.

When was the last time you treated yourself to a massage?

• Just recently
• A long time ago
• Yet to find time for one

3. Practise deep breathing

Inhaling and exhaling with prolonged breaths for 5 minutes helps to ease tension.

Go on, try it now.

4. Eat well

Eat healthy foods. Fast food can be a treat once in a while but not on a regular basis. Good nutrition will give your body a release from stress.

How often in the week do you rely on fast food?

• Very often
• Not so often
• Seldom eat fast food

5. Sleep well

Regular sleep is important but it is often difficult in the tourism profession. Try to ensure the minimum 8 hours of sleep so your body can rest and recover.

Compared to friends in other industries, how much sleep do you usually get?

• More than my friends
• About the same as my friends
• Less than my friends

6. Regular breaks

Schedule regular breaks in your day: this will give you time for yourself – meditation, coffee break, banter with friends, etc.

Now that you can manage yourself better, take time for your favourite ‘break-activity’ before moving on to the next topic on communication skills.

Communication through Cultural Awareness and Sensitivity

Lesson 1: Effective Communication Skills

You should communicate clearly and be able to answer queries that your customers may have about your products and services. Good communication is also necessary for effective negotiations. Within your business, effective communication can help to foster a good working relationship with your team. This, in turn, improves morale and efficiency. Ruth Kamau

Effective communication is a vital tool for any business owner. Successfully getting your point across can mean the difference between sealing the deal or missing out. 

There are two broad categories of oral communication:

1. Verbal Communication
2. Non-Verbal Communication

Verbal communication

Also known as oral communication skills, verbal business communication skills involve spoken interaction in the workplace. Statistics show that the average person speaks around 7,000 words each day. For hospitality and tourism workers, this number can be even higher as there is a lot of communication with the various stakeholders. 

Correct verbal communication brings great rewards to your organisation. But it can also be hazardous to your business if approached in the wrong way. The words you use are important, but equally important is the way you express them.

How to communicate verbally effectively

Use positive language

You are more likely to achieve positive outcomes when you use positive, rather than negative language. Positive language is helpful and encouraging, it suggests alternatives and offers solutions to problems. It is language that stresses positive actions and consequences.

Use ‘I’ statements

‘I’ statements, rather than ‘you’ statements, often yield better results in verbal exchanges. For example, ‘I need more information in order to make a decision’ sounds much better than ‘You need to give me more information before I can make a decision’. The reason the ‘I’ statement sounds better is because you are saying what you need rather than telling someone what they should do.

Be assertive rather than aggressive

Assertiveness (often through the use of ‘I’ statements) means stating what you plan to do. Aggression is usually perceived as hostile or unfriendly behaviour. It often uses the word ‘you’.  When talking to employees, they are more likely to respond to requests rather than to orders. Consistent assertiveness shows others that you are confident and open to suggestions but you won’t be taken advantage of.  

Be mindful of your tone

The same sentence can be conveyed and understood in entirely different ways based on the way in which it is said. The people you speak to can be motivated by a positive speaking style, but can easily be put off by a negative style.

You should always try to speak with a positive voice — avoid monotone responses or talking too quickly or too slowly. Be as clear as possible, and try to engage the listener. This is far more likely to promote the response you are after.

Ask relevant Questions

The more you find out about a person’s needs, wants, interests and situation, the easier it is to reach win-win outcomes. People also tend to respond well when they feel their opinion is being genuinely sought by another person. You will have more success when using a range of question types in a conversation.

Listen Actively

It is one thing to ask good questions — it is another to take on board the answers. You can often be distracted by your own thoughts, feelings and opinions and so you tend to hear what you want to hear or what you expect to hear.

Non-verbal communication

A large part of communication occurs through non-verbal cues in conversations. This includes body language, the way you look at others during conversations and the facial expressions used.

How to communicate non-verbally effectively

1. Body language

There are 2 main aspects of body language to consider:

• posture — how you sit or stand during a conversation is important. Your posture should be open, with your body turned to face the other person when possible. 
• gestures — simple gestures such as nodding your head or opening your palms can have a positive effect on a conversation. Maintaining eye contact is very important.

Negative body language creates a negative impression and tends to impede progress. Negative body language that you should avoid include clenched fists, folded arms, rolling eyes or arched eyebrows, shrugs and shuffles, imitation of the other person’s actions, finger pointing.

2. Eye contact

Looking people in the eye when talking to them is a good way to let them know you are listening and interested in what they have to say. Eye contact can also convey sincerity and confidence which is very important in business situations.

Not looking the other party in the eye can make you appear disinterested, nervous or even shifty. Try to maintain eye contact and focus on whoever you are talking to, whether they are a customer, client or employee.

However, be careful not to frighten them with an unwavering stare.

3. Facial expressions

Our faces are extremely expressive and often give our emotions away before we even have a chance to say what we feel. It is important to keep your facial expressions positive during a business conversation.

Smiling is very important — a simple, natural smile helps the other party to relax during a conversation. Avoid negative facial expressions such as frowning or scowling, glaring, blankness, sneering, pouting, etc.

Cultural influence on communication

Different cultures have their own nuances when it comes to communication. It is therefore very important in the tourism business that you learn which culture you are interacting with and adapt your communication style accordingly.

Some cultures prefer direct Communication

These are cultures that believe that communication should be short and precise. They call a spade a spade. They tend to also be individualistic cultures with a preference for the use of “I” in their conversations. Cultures that do not communicate in this way may find them rude or blunt. For example, “I don’t like this tour” when asked to give feedback on a tour.

Some cultures prefer indirect Communication

These are cultures that have a much gentler approach to communication. They use a roundabout approach especially if something negative needs to be expressed. For example, “We have been on better tours…” when asked to give feedback on a tour they did not like.

Indirect Communicators believe in the ‘concept of face’ – a metaphor for dignity. They are therefore very careful not to let anyone lose face.

Some cultures are expressive and show emotion openly

They tend to use a loud voice, a higher pitch and a lot of expressive facial and body language, like their hands. Cultures who do not practise this can find them to be very dramatic.

Some cultures hide their emotions when communicating

There is very little undulating of the voice which is generally quiet and low pitched. Body language and facial expressions are minimal. They can come across as monotonous, boring and uninterested

Because you run a tourism business, you will come across many different cultures from around the globe. It is therefore important to take a few minutes to figure out the cultural preferences involved in order to have effective communication and to avoid any misunderstandings.

Lesson 2: Effective Listening Skills

Listening Skills are an extremely important part of good Communication Skills. For the tourism industry they are even more crucial as they help you provide better quality service to meet the needs of customers, colleagues and business partners. 

Hearing and listening

Do you know that hearing and listening are not the same? There is a big difference between listening and hearing. 

Hearing is easier because it is an involuntary physical ability involving the ears receiving sound waves. You hear sounds all the time (unless there is a hearing impairment) and it is effortless.

However, listening involves conscious effort. You not only receive the sound vibrations in your ear, you must use your brain to make cognitive sense of what is being said, process the information and respond as appropriate. It is intentional and requires a lot of effort. 

• Hearing is accidental, involuntary and effortless.
• Listening is focused, voluntary and intentional

Listening techniques

Technique 1: Ensure that you have a comfortable setting

It must not be noisy. If the conversation contains confidential information, ensure that there is privacy so that you don’t need to talk in a low voice and possibly strain to hear.

Technique 2: Minimise distractions

Put your phone away and ensure you do not have other urgent tasks that might mean you have to interrupt the conversation. Give the speaker your undivided attention.

Technique 3: Face the speaker directly and ensure eye contact

Display positive body language by sitting straight and leaning a bit towards the speaker. This indicates that you are interested. Slouching and looking away gives the opposite impression.

Technique 4: Show that you are listening

Show that you are listening while the speaker is talking, and acknowledge what they are saying. This can be through facial expressions, nodding, saying “mmm” or “right”, etc.

Technique 5: Do not form judgments

Do not form judgments or get distracted by thinking of something to say as soon as the speaker pauses. Do not be in a hurry to give advice or share your own experiences. When the time is right, then by all means do so, but listen first.

Technique 6: Do not interrupt the speaker even if you disagree

Do not interrupt the speaker even if you disagree with what is being said. If it is important enough, you can bring up your point after the speaker has finished. Talk less, listen more.

Technique 7: Be comfortable with silences

Be comfortable with silences especially in therapeutic or empathetic listening. The speaker may be emotional and will need a patient ear. Another example of when there may be slower speech and silences is when there is a language issue. 

The speaker might be trying to find the right words. Do not be in a rush to cover the silence or provide an answer as it may unnerve the speaker and make them more conscious of their lack of language.

Technique 8: Seek clarification

Seek clarification when necessary. Ask good questions and do not try to guess information. We will discuss what constitutes good questions shortly.

Technique 9: Engage in active listening

This involves not just listening word for word to what the speaker is saying — it is about being able to grasp the entire meaning of the conversation. Often, there are implied nuances or hidden meanings and, if you are an active listener, you will be able to catch them. 

This means you are a more effective listener as it is not only what they are saying, but also the idea/concepts behind the speech. Empathetic listening often calls for this. Active listening should be used for critical and informational listening too.

Asking the right questions

There are different types of questions you may ask for clarity in active listening. Use a good blend of the following types of questions depending on the situation. 

Open questions

Questions which require a person to elaborate or explain. This helps to build a rapport and encourages them to open up. Well-chosen open questions encourage responses to questions you might not have thought to ask. 

For example, “How has the hotel improved in the last few years?” “What are the new attractions in Destination A?”

Closed questions

Questions that require a short, specific answer, such as ‘yes’ or ‘no’.  For example, “Are you happy with the tour package proposal?” 

These questions are good for finding out facts, limiting or guiding a discussion in a particular way and gathering specific information from which you can generate an open question

Probing questions

Targeted questions designed to develop a more specific understanding of the other party’s view on a matter. 

For example: “How could I change my offer so that this proposal will be a win-win for both of us?

Confirmation questions

When you need to be sure the other party understands your message. “What benefits do you think this proposal will bring to your organisation in the next year?”

Just as there are good questioning styles to help understand the whole picture, there are also questioning styles to avoid. These include:

• Destructive questions — “So you’re saying it’s my fault?”
• Leading or manipulative questions — “You’ll have that done by tomorrow, right?”
• Multiple questions at once — “When will you want it? Or don’t you want it? You can’t get it anywhere else can you?”

Now you know how to get the right answers. But the bigger question for business effectiveness is – Are you ready to really listen?

Lesson 3: Negotiation Skills

Negotiation Skills are very useful in formal and informal ways. In formal ways, they help to get the best deal possible for transport, hotels, tours, guides, etc. They also assist with setting the selling price with your customer so that your business maximises its profit. Informally, negotiation skills help in your day-to-day interactions. Ruth Kamau

What is negotiation?

Negotiation is a process where two or more parties with different needs discuss an issue to find a mutually acceptable solution. 

Negotiation can be formal and informal. 

• Formal negotiation helps you get the best possible deal for your business through negotiated contracts with various stakeholders and service providers and thus helps you increase your profit.
• Informal negotiation helps your daily interaction with the people around you. It can be very subtle and unobtrusive but it makes the people involved feel that they got what they wanted. 

How do you negotiate successfully?

There must be both give and take when negotiating. Remember that good and sustainable negotiation means that all parties feel that they have ‘won’ something.  You should be willing to make concessions on issues that are small for you but important for the other party. 

You should not be aggressive.  Remain polite and courteous at all times regardless of the differences the other party brings.

How can you go about the Negotiation Process successfully?

 

Step 1: Introduction

Introduce yourself courteously and engage in small talk to build a relationship.

Do not appear nervous. Appear confident in a reassuring way, not in an arrogant way.

Step 2: Explanation

Explain and share your agenda with the other party/parties.

Step 3: First offer

Make your first offer. Explain your offer clearly. Talk about it in a collaborative way, using “We” rather than “I”.

Step 4: Listen

Listen to their first offer but do not accept it straight away.

Check your agenda and objectives. Does their offer satisfy these?

Step 5: Counter-proposal

If their offer doesn’t satisfy your needs, counter-propose.

Give alternatives. Explain your rationale instead of appearing stubborn and inflexible.

Step 6: Listen

Listen to their counter-offer.

Repeat it out loud for clarity of understanding for all parties concerned.

Step 7: Consider compromises

Be creative when problem-solving and thinking of win-win solutions. 

Consider compromises and remember that negotiation is a give and take process.

Step 8: Follow up

Once both parties are happy with the outcome, follow up promptly on the commitments you have made.

Negotiation skills

Assertive

Assertive, but never aggressive, in your communication — written, verbal and non-verbal.

Creative

Creative in finding solutions and alternatives that will benefit both parties.

Honest

Honest because trust is a big factor in negotiating. If either party loses trust, it is very difficult to reach a win-win outcome.

Knowledgeable

Knowledgeable of your needs and desired outcomes as well as the other party’s desires prior to the start of the negotiation.

A clear communicator

A clear communicator highlighting what you want and what you are willing to give to the other party.

A good planner

A good planner who has an agenda and does not deviate from it despite the flexible approach.

A good listener

A good listener who asks lots of “What?” and “Why?” questions and pays attention to detail. Remember to record them (through audio, video or written records).

Now that you’ve completed this unit, you can use your soft skills to make your tourism business a success.

Module 8: Calculations for Tourism

This course gives an introduction into the topic of calculations by explaining the terms expenses, income and profit and its application. Further, by using the stakeholder groups of tour operators, hotel managers and food shop owners, important aspects of calculations are described including expenses, profit or loss, discounts, currency and ingredient conversion, commission, costing, markup and selling price conversion and daily profit. 

Who is this course for? 

The course is intended for tourism professionals in management positions, and anyone interested in the topic.

What will you learn? 

• You will learn how to explain the value of online media in promoting a tourism business
• You will learn how to generate leads through online resources appropriate to the tourism business
• You will learn how to create an e-marketing plan

Keywords: Sustainability, tourism, management, calculations, expenses, budget

 

Profit and Loss

Have you ever wondered how expenses, income and profit are actually calculated and what needs to be taken into account to ensure the survival of your business? In this first section, you will learn why digital numeracy is critical for tourism businesses and you will be introduced to the concepts of profit and loss. 

Lesson 1: Introduction

Let us introduce you to…

• Thabo: He wants to start a tour guiding business using his new minivan
• Samba: He runs a guest house
• Eshe: She has a food stall near a popular tourist attraction in South Africa

Profit and loss

How do Thabo, Eshe or Samba know if their businesses will make enough money to stay in business? Should they just wait until the end of the month to see if they have money left or if they owe money?

No, that’s a bad idea. You need to know ahead of time.  One way a business can measure its success is by calculating its profit or loss.

One way a business can measure its success is by calculating its profit or loss.

Profit 

Profit is when you make more money than you spend. Of course, that’s what we want.

Loss

Loss is when you spend more money than you make. That’s a problem.

How do we calculate Profit or Loss? Well firstly, you need to understand Income and Expenses.

Income and expenses

Income or Revenue: Income or revenue is the total amount of money a business has generated over a set period of time — e.g. one month or one year.

Expenses: Expenses are the amounts of money spent to generate that revenue — on things like equipment, electricity, advertising and wages.

Calculating profit/loss is easy, it’s just Income minus Expenses.

So you sold a product for $10 and it cost you $4 to make and sell. Did you make a profit or a loss?

• I made $6 profit.
• I made $4 profit.
• I made a loss of $6.

As long as your income is greater than your expenses, then you’re making a profit. Break-even is when your income is equal to your expenses — you haven’t made a profit or a loss.

Lesson 2: Expenses

Remember Thabo? 

He wants to start a tour guiding business using his new minivan to take tourists to the local villages and handicraft markets in his area. He needs to understand:

1. Fixed and variable expenses
2. Profit and loss
3. Discounts

Fixed and variable expenses

Fixed Expenses: A fixed expense is a cost that occurs regularly and the cost does not vary from month to month. Examples include rent, insurance, loan repayments (e.g. for vehicles or machinery) and wages.

Variable Expenses: A variable expense is a cost that occurs regularly but the cost varies from month to month.Examples include electricity, groceries, gas, etc.

Thabo has to repay the loan for his minivan by paying back a fixed amount each month — regardless of how much or little he uses the van. This is a fixed expense.

Gas (petrol or diesel) is a variable expense — the more tours that Thabo has and therefore the further he drives, the more he has to pay for gas.

Let’s have a look at how Thabo’s expenses can vary

Thabo’s fixed expenses

He has to pay $200 per month on his vehicle loan.

Thabo’s variable expenses

His petrol costs him $50 per trip.

If he has 10 trips per month, then petrol will cost him $500 but if he has 30 trips per month, then petrol will cost him $1500 per month.

Trips	Fixed expenses	Variable expenses	Total expenses
10 trips	$200	$500	$700
30 trips	$200	$1500	$1700

So the more trips he has, the more his expenses are — but of course, he is also generating more money.

Lesson 3: Profit or loss

In order to work out if a business will make a profit or loss, you need to add up all the expenses and then subtract them from the income.

Thabo’s business costs

Thabo has even more fixed expenses for his minivan than just paying back the loan. The fixed expenses have to be paid regardless if he has any tours or not. Let’s take a look.

Item	Fixed monthly cost	Variable cost per trip
Minivan repayment	$200
Advertising	$50
Wages	$500
Cleaning	$50
Beverages	$30
Petrol		$50
Total	$830	(variable)

Profit or loss

Thabo expects to offer at least 10 trips per month with an average of 4 tourists per trip.

If he charges $100 per tourist, will he make a profit or a loss for the month?

Thabo’s income and expenses for the month

Income

10 trips x 4 tourists x $100 per tour = $4,000

Expenses

Fixed: $830

Variable: 10 trips x $50 = $500

Total expenses: $1,330

Income – Expenses = Profit/Loss

Now that we know both his income and his monthly expenses, we can work out whether he will make a profit or loss for the month:

$4,000 – $1,330 = $2,670

I would make a profit of $2670 for the month. Thabo

Test your knowledge

In his first month, Thabo only makes 5 trips with 2 tourists each.  Using the fixed and variable costs above, answer the following questions:

What are Thabo’s total costs for the month?

• $1330
• $1080 
• $250

What is Thabo’s income for the month?

• $4000
• $1000 
• $2500
• $500

What profit or loss did Thabo make for the month if his income was $1000 and his expenses were $1080?

• $2080 profit
• $80 loss
• $80 profit
• $ 2080 loss

Lesson 4: Discounts

A discount is a deduction on the usual price of a product or service. In other words, the customer pays less than the full price for the product or service.

In order to attract more customers, Thabo offers a 20% discount for groups of 5 or more. Let’s see how to work this out:

If his tours cost $100 per person, then the full price for 5 people would be $500.

Now let’s work out the discount:

20% of $500 = 0.2 x 500 = $100. 

The discount is $100 and the price for 5 people would be $500 – $100 = $400.

Let’s have a look at the pricing:

Number of people	Full price	Total incl. discount
1	$100	$100
2	$200	$200
3	$300	$300
4	$400	$400
5	$500	$400

Can you see that the total price for 5 people is the same as for 4 people? This means that for every 4 people buying a tour, the 5th person’s tour is for free.

Test your knowledge

A food stall offers a 10% discount on meals to customers who pay cash rather than by credit card. If a customer’s meal comes to $30, how much do they need to pay?

• $10
• $20
• $23
• $27

A guesthouse offers a 15% discount when guests stay for more than 5 nights. Their rooms cost $100 per night. How much must the guest pay to stay for 6 nights?

• $585
• $510
• $500
• $485

Lesson 5: Calculating with Thabo

 

Description

10 tours are booked with Thabo this month. Four guests have registered for each tour. That makes $4,000 in revenue for the month. But wait… that’s just the revenue. What about the expenses? 

Thabo has to spend some of the revenue to finance his business. For example, he has to pay the loan from the bank, and the advertising for his tours, the cleaning of his minivan and the beverages for his guests. Thabo spends $50 on petrol per tour. That’s $500 for ten tours. Quite a lot … Of course, Thabo also has to pay himself a salary. 

Will there be anything left of the revenue at all? Something remains… that is Thabo’s profit, or what he has actually earned after expenses.

Costing and Price

How do you set sustainable and realistic prices for your services? This section will show you how to take different kind of costs into account while calculating your prices.

Lesson 1: Currency conversion

Samba, you may remember, runs a guest house and has to deal with international currencies such as the US dollar and the EU euro, as well as his own local currency.

While the quickest way to convert between currencies is online using Google, understanding how this works is important.

In most cases a country’s exchange rate keeps changing, so you need to make sure that you use up-to-date currency conversion information.

Let’s look at a couple of examples to explain how this works:

Guests want to pay in US dollars

Samba charges 40,000 CFA Francs per room per night. He has US tourists that want to pay in US dollars. How much should he charge?

He looks up the latest exchange rate and finds that the exchange rate at the time can be shown compared to either 1 USD or 1 CFA Franc:

• 1 CFA Franc = 0.00185913 USD or
• 1 USD = 538.173 CFA Franc

To find out how many US dollars is equivalent to 40,000 CFA we need to multiply 40,000 CFA Franc by 0.00185913 = $74.36

Alternatively we can divide 40,000 by 538.173 = $74.35

Samba offers currency exchange

Samba charges his guest $75 USD for 1 night’s stay and they pay him $100 USD cash. He provides change in CFA Francs. How much change does he need to give them?

• $100 – $75 = $25
• $25 divided by 0.00185913 = 13,447.15 CFA Franc

Test your knowledge

A guesthouse in South Africa charges R1 000 (South African Rand) per room per night. A tourist wants to pay in US dollars ($).  How much must they pay if the exchange rate is:

1 USD = R 14.61

• $68.45
• $1461
• $985.39
• $72.30

Lesson 2: Commission

Samba advertises his hotel on a online booking platform, which attracts many international tourists to his hotel. The booking platform charges a 15% commission on all bookings made by them. Samba needs to work out what his income is after the deduction of the 15% commission.

He receives a booking from the platform for a room for 5 nights at $150 per night.

1. How much does the guest pay for the room for 5 nights
2. How much commission does the booking platform charge?
3. What is Samba’s income after commission?

How much does the guest pay for the room for 5 nights?

$150 x 5 = $750

 

How much commission does Booking.com charge?

15% of $750 = 0.15 x 750 = $112.50

 

What is Samba’s income after commission?

$750 – $112.50 = $637.50

Test your knowledge

Over a month, Samba receives bookings totalling 75 room nights at $150 per night from (opens in a new tab) the booking platform.  What is Samba’s income for the month after the 15% commission?

• $9562.50
• $1687.50
• $11,250
• $7456.50

Lesson 3: Calculating with Samba

Description

Samba’s guests are ready to leave. They had a very nice stay and would like to pay now. Samba charges 40,000 CFA Francs per night. Samba’s guests would like to pay in dollars. That is no problem for Samba. He researches the current currency conversion rate on the internet. He knows that he has to divide 40,000 by 538.173. And he charges his guests $74.35 US Dollars. 

After the guests have left, a new booking comes in via the booking platform. The room was rented for $150. Samba knows he won’t get the full $150 because the booking platform takes a 15% commission. Once the $22.50 is deducted, he is left with $127.50 in the end. That’s a good result. 

 

Conversion and commission

In most cases a country’s exchange rate keeps changing, so you need to make sure that you use up-to-date currency conversion information for billing international clients. Plus, as many tourism businesses work with booking platforms, you also need to understand the basic principes of commission to run a successful business in tourism.

Lesson 1: Ingredient conversion

Eshe has a food stall near a popular tourist attraction in South Africa where she sells local delicacies to tourists passing by. Her main food item is a fried bread roll filled with curried mince, called “Vetkoek”.

In order to run her business successfully, Eshe will need to answer the questions below, and in the following lessons we will show her how:

1. How many cups/tablespoons/teaspoons does she need per ingredient?
2. How much does it cost to make each vetkoek?
3. What is her profit markup?
4. What is her daily profit?

Ingredient conversion

Eshe’s recipe is in grams (g) and kilograms (kg), but she doesn’t have a scale. Instead she uses cups, tablespoons and teaspoons for measuring. 

Do you know how to convert from grams (g) to kilogram (kg)? 1000 g = 1 kg.

Vetkoek recipe (per 20)

1 kg flour
10 g salt
50 g sugar
10 g instant dry yeast
750 ml lukewarm water
Cooking oil

Here are the conversions that she needs to know:

Flour: 125 g = 1 cup
Salt: 5 g = 1 teaspoon
Sugar: 25 g = 1 tablespoon
Water: 250 ml = 1 cup

How many cups of flour does Eshe need for 1 batch of vetkoek?

12.5 cups

8 cups

5 cups

4 cups

How many cups of water does Eshe need for 1 batch of vetkoek?

3 cups

7.5 cups

2.5 cups

How many teaspoons of salt does Eshe need for 1 batch of vetkoek?

2 tsp

5 tsp

10 tsp

Lesson 2: Costing

In order to know how much she can sell her vetkoek for, Eshe needs to know how much it costs to make them. 

We’ll start off working out how much it costs to make one batch of 20.  Eshe buys her goods in bulk as this offers better value — it works out cheaper for her this way.

Note: The local currency is called the South African Rand (R)  and Eshe will buy and sell in R.

Vetkoek ingredients (for 20):
1 kg flour
10 g salt
50 g sugar
10 g instant dry yeast
750 ml lukewarm water
Cooking oil

Bulk prices:
Flour: 10 kg for R100
Salt: 1 kg for R20
Sugar: 5 kg for R100
Yeast: R5 per 10 g sachet
negligible
Oil: R100 for 5 litre

Flour:
If 10 kg = R100 then 1 kg = 1 ÷ 10th x R100 = R10

Salt:
If 1 kg = R20 then 10 g = 10 ÷ 1000 x R20 = R0.20

Sugar:
If 5 kg = R100 then 50 g = 50 ÷ 5000 x R100 = R1

Yeast:
R5

Cooking oil:
3 cups cooking oil for frying is used for every 5 batches.
If 5 l costs R100 then 750 ml = 750 ÷ 5000 x 100 = R15
If oil for 5 batches costs R15 then oil for 1 batch costs R3

How much does 1 vetkoek cost?

Total for 20 vetkoek

Flour: R10

Salt: R0.20

Sugar: R1

Yeast: R5

Cooking oil: R3

Total: R19.20

Total for 1 vetkoek

1 vetkoek costs R19.20 ÷ 20 = R0.96 or roughly R1 each.

Total for 1 vetkoek with filling

Curried mince costs R5

In total, each vetkoek costs R1 plus R5 = R6

Remember that Eshe will have other costs that we haven’t considered here — e.g. the cost of her kitchen machinery and the cost of wages if she has to pay someone to help her make or sell her vetkoek.

These indirect costs are usually about 15% of the direct costs. So we need to add 15% of R6 to the price: 15 ÷ 100 x 6 = R0.90

If Eshe charges R6.90 per vetkoek, she w

If Eshe charges R6.90 per vetkoek, she will

have made a profit

have made a loss

reach break-even

Lesson 3: Markup and selling price

Eshe’s costs are R6.90 per vetkoek. If she adds a 50% markup, how much would she charge per vetkoek?

50% of R6.90 = R3.45
R6.90 + R3.45 = R10.35

Eshe decides to sell her vetkoek for R10 each as this is an easy price to handle. 

Eshe sells one vetkoek for R10. How much profit does she make if the cost is R6.90?

R3.10

R2.80

R3.50

If a food item costs R30 to make, what is the selling price with a 50% markup?

R150

R45

R80

Lesson 4: Daily profit

 

Today Eshe has made 100 vetkoek, but she has 8 left over at the end of the day that she has to give away.

Today Eshe has made 100 vetkoek, but she has 8 left over at the end of the day that she has to give away.

What is her income for the day?

92 vetkoek sold at R10 each = R920

What are her costs for the day?

100 vetkoek at R6.90 = R690

What is Eshe’s profit for the day?

R920 – R690 = R230

If she makes 100 vetkoek, how many must Eshe sell at R10 each to breakeven if they costs R6.90 each?

100

69

31

92

Lesson 5: Calculating with Eshe

Description

Eshe is about to make her famous vetkoek. She needs flour for the dough, as well as salt, sugar, yeast and cooking oil. For a batch of vetkoek, Eshe spends 19.20 Rand on the dough. This means that for one vetkoek that is 0.96 Rand for the dough, well rounded up to 1 Rand. But that was just the dough, now the minced meat is added. That costs 5 Rand per vetkoek. So all together that is 6 Rand for one vetkoek. 

Now the indirect costs are added on a pro rata basis. That includes kitchen equipment, electricity and so on. 

And now the markup. That is usually 50% of the costs. All in all, that is 10.35 Rand per vetkoek. Well, to round it off, 10 Rand.

Now that you have successfully completed this unit, you can apply the calculation examples to your own tourism business.