Transcript document

Tourism and Hotel economics
THM102
week 7
Title:
Introduction to Tourism
Learning Objectives: TOURISM DEMAND &
SUPPLY
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Be able to define demand and supply
Understand the different approaches to demand
Explain the concepts for supply and demand
Describe the propensity of Travel
Be able to explain the four factors which determine travel
Consider the characteristics and measurement of demand
Outline the components of supply
Be able to briefly describe the six factors of supply
Appreciate the link between supply and demand
Types and forms of Travel
Possible Exam questions
TOURISM DEMAND
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Mathieson and Well (1982) – The total
number of persons who travel, or wish to
travel, to use tourists facilities and services
at places away from their places of work
or residence
APPROACHES TO STUDY TOURISM
DEMAND
Economists- Tourism demand is measured
in monetary returns gained within a period
of time. Price, elasticity, quality. Revenue
and Expenditure
 Psychologists- Demand relates to
motivation and behavior, personality,
environment
 Geographers- Demand based on
geographic boundaries, demographics.
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TYPES OF DEMAND
Effective or Actual Demand- People
actually traveling at a point of time.
 Potential Demand- People who could
travel if motivated
 Deferred/Postponed Demand- People
who wish to travel, but are not traveling
presently due to temporary reasons, of
self or supply end
 Suppressed Demand – People not
interested in travel
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CONCEPTS RELATED TO DEMAND
Demand Substitution- Demand for
one activity is substituted by
another. E.g. Camping to leisure
cruise
 Demand Redirection- Demand
redirected to another product. Spain
to greece
 Demand Generation- Creation of new
demand on creation of new products
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TRAVEL PROPENSITY – LIKELIHOOD
TO TRAVEL
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=
Net Travel Propensity- Percentage of
population of the overall population who
makes at least one trip during a given period
of time.
Number of population taking at least one trip X 100
total population
 Gross Travel Propensity- Total number of trips undertaken
as a percentage of the population.
= Number of Total Trips X100
Total Population
TRAVEL FREQUENCY
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Travel Frequency =
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Country Potential Generation Index (CPGI)
CPGI = Ne/Nw
Pe/Pw
Ne = Number of trips generated by country
Nw = Number of trips generated in the world
Pe = Population of the country
Pw = Population of the world
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Gross Travel Propensity
Net Travel Propensity
HIGH AND LOW TRAVEL
PROPENCITY
High Travel Propensity
High Education
More Awareness
More Income
Private Vehicle
Better Travel Facilitation
Good Exchange Rate
Shorter Travel Distance
Low Travel Cost
Young Age
Low Travel Propensity
Low
Education
Low Awareness
Low Income
No ownership of Vehicle
Poor Travel Facilitation
Poor Exchange Rate
Long Travel Distance
High Travel Cost
Old Age
FACTORS DETERMINING TOURISM
DEMAND
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2.
3.
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Individual
Economic
Geographic
Destination
INDIVIDUAL FACTORS
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Education and Awareness
Mobility
Age, Gender, Religion
Income and employment, disposable
income, household income, DINKS
Paid holiday
Family Influence
Nature of Family-joint, nuclear
VALS
Stage of Family Life Cycle
Gap Year Opportunities
ECONOMIC FACTORS
Cost of Travel
 Cost of Products
 Competitive Prices
 Exchange Rate
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GEOGRAPHIC FACTORS
Seasonality
 Accessibility, location and distance
 Attractions Available
 Urban or Rural population or
Economy
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DESTINATION FACTORS
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Image – organic and induced
Promotion: travel channels, awareness,
deals
Technology and development
CRS technology
Development Level
Credibility
Safety and Security
Attraction and Events
Quality of Product
Travel Formalities
POLITICAL FACTORS
Government regulation on supply
and tourists
 Visas, formalities, health checks,
currency, prohibitions
 Transport regulation, accessibility,
bilateral agreements
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CHARACTERISTICS OF TOURISM
DEMAND
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planned demand
Involves a lot of expenditure
There is no tangible return or purchase
Highly price elastic
Can be price inelastic too
Seasonality
Is not subject to law of diminishing
returns
Changing demand patterns
MEASUREMENT OF TOURISM
DEMAND
Household Surveys
 En route Surveys
 Destination Surveys
 Surveys of Suppliers
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COMPONENTS OF TOURISM SUPPLY
Infrastructure
 Superstructure
 Attractions
 Marketing/Promotion and Destination
Image
Tourism Supply includes TOP and ROP
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FACTORS AFFECTING TOURISM
SUPPLY
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2.
3.
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Economic
Political
Geographical
Legal
Technological
Social
DEMAND-SUPPLY LINK
Demand
Generating Origin
Marketing and Promotion
Supply Receiving
Destination
TYPES and FORMS of TOURISM
TYPES
1. Political Boundary
 National/Domestic/Intra
 International
 Regional
2. Distance Travelers
 Long Haul
 Short Haul
3. Direction
 Inbound
 Outbound
4. Pattern of Level
 FIT
 GIT
5. Interest
 Mass/ Conventional
 Alternate
FORMS
 Historical
 Cultural
 Religious/Pilgrimage
 Educational
 Sports
 Heritage
 Youth
 Entertainment
 Shopping
 Political
 Social
 Sociological
 Medical/Health
 Relaxation
 Ethnic
 Adventure
TYPES and FORMS of TOURISM
TYPES
6. Planning
 Rural
 Urban
7. Location
 Mountain, Beach, Desert, City,
Space
8. Time
 Seasonal
 Year round
FORMS
 Nature/ wildlife
 Business/ Convention
Possible Exam Questions
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Define demand
Outline the different approaches to demand
Explain the concepts for demand
Describe the propensity of Travel
Explain in detail the four factors which determine travel
Describe the characteristics of demand
Outline the components of supply
Briefly describe the six factors of supply
Explain the link between supply and demand
Outline the types and forms of Travel