Generally the tourism industry has a unique business environment, which affects all the competitors. According to Porter, the bargaining power of the customers (buyers). This force shows the strength in the bargaining position, particularly the price, which the buyers have over their suppliers. 

Tourism refers to the provision of the transportation, accommodation, recreation, food, and the related services both for the domestic and the overseas travelers. It involves travelling for all purposes, including recreational and business.

Threat of Substitute Goods

In the Tourism industry there is usually higher chances to start a new business and progress successfully. The firms appear in all price ranges, with variations in the levels of service and the amenities. The constant challenge will always be to get the customers to choose your services over the competitor. With the technological advancements the Internet makes the overall market to be more efficient while expanding the size of the potential market and creating the new substitution threats.

The threat is that another firm chain may erode the customer base with a newly formulated Internet approach or the marketing campaign. According to Porter the development of a value chain process analysis, supported by the collaborative event management, the structuring and sharing of the customer focused value chain data, powerfully enhances the performance of the value chains and of the electronic commerce.

The Tourists who are the major consumers in the Tourism, Leisure and Hospitality industry are more and more capable of making use of the technological advancements in the means of communication such as the internet to increase their bargaining power