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09 Tourism Demand and Supply

These notes have been gathered from live lectures (when permitted), th...
Course

Fundamentals of Tourism and Hospitality (THMGT101)

24 Documents
Students shared 24 documents in this course
Academic year: 2020/2021
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Emma Bradley
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THMGT101 – Tourism

Demand and Supply

Determinants of Tourism

Demand

What is demand?

“A schedule of the amount of any product or service that people are willing and able to buy at each specific price in a set of possible prices during some specified period of time.”

Vital tourism demand data

 Number of visitors.  Means of transportation used by the visitors to arrive at destination.  Length of stay and the type of accommodations used.  Amount of money spent by visitors.

The factors of demand

“Demand for travel to a particular destination is a function of the propensity of the individual to travel and the reciprocal of the resistant of the link between origin and destination areas.

Demand = f (propensity, resistance)

PROPENSITY  Psychographics  Demographics  Marketing effectiveness

RESISTANCE  Economic distance  Cultural distance  Cost of tourist services  Quality of service  Seasonality

Propensity

 Propensity – willingness to travel.  Directly related to demand.

 Depends on: o Psychographics  Activities, interests, hobbies, opinions, needs, values, attitudes, personality traits, lifestyles. o Demographics  Gender, age, income level, marital status, employment status, ethnicity, knowledge of languages, mobility, disabilities, home ownership, and even location. o Marketing effectiveness

Resistance

 Resistance – unwillingness to travel.  Inversely related to demand.

 Depends on: o Economic distance  Time and cost of traveling. o Cultural distance  Allocentrics/ventures.  Psychocentrics/dependables.  Hofstede’ cultural dimensions. o Cost of tourist services o Quality of service  Destination image.  Actual experience. o Seasonality

Measuring Tourism

Demand

Types of tourism demand

EFFECTIVE/ACTUAL TOURISM DEMAND

The actual number of tourists, which is the most commonly studied and most interesting measure of tourism demand for tourism managers and business operators.

SUPPRESSED TOURISM DEMAND

The segment of the population who does not travel because of certain constraints.

 Potential tourism demand: due to demand-side constraints.  Deferred tourism demand: due to supply-side constraints.

 Interpretation of historical demand data.  Plots year verse one variable. o (ex. Years, and arrivals.)  Basic, simple, and easy to obtain the data.  However, info may not be useful. o Does not explain demand. o Assume growth without change.

Simple regression

 Explain the relationship between demand and a specific variable (ex. Price, income).  Plot a linear relationship between two variables.  Simple and easy to collect.  Only takes one variable into consideration.

Multiple regression

 Similar to simple regression except it takes multiple variables into consideration when predicting demand.  Produces a higher level of explanation (but not perfect).  Can’t produce a linear graph.  Data is harder to interpret and collect.

Computer simulation and

models

 Computer model is that simulate tourist demand.  Comprehensive and can accurately measure several factors.  Uses multiple regression.  Complex, hard to interpret and collect data.  Need special training and resources.

Executive judgement method

 Also called “Delphi method”.  Systematic survey of tourism experts.  Personal judgement based on experience. o E., UNWTO, 250-plus experts.  Can take variables into consideration, but hard to measure them.

Matching Supply with

Demand

Task analysis

  1. Identification of present demand.
  2. Quantitative and qualitative inventory of existing supply.
  3. Adequacy of present supply with present demand.
  4. Examination of present markets and the socioeconomic trends.
  5. Forecast of tourism demand.
  6. Matching supply with anticipated demand.

Matching supply with demand

Supply functions are always constrained by demand.

R – (T x P x L) / (S x N)  R = hotel rooms demanded per night  T = number of tourists  P = percent staying in a hotel  L = average length of stay  N = average number of persons per room  S = number of days per year in business (dependent on 100% occupancy)

Fluctuating demand

PERISHABLE

 Seasonality and peaks and valley.

MULTIPLE USE

PRICE DIFFERENTIAL  Shifts demand away from the peak season.

ORGANISE EVENTS, FESTIVALS, CONCENTIONS DURING THE OFF SEASON

CLOSE SOME FACILITIES TO REDUCE COST DURING THE OFF SEASON

HIRE SEASONAL WORKERS

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09 Tourism Demand and Supply

Course: Fundamentals of Tourism and Hospitality (THMGT101)

24 Documents
Students shared 24 documents in this course

University: University of Waikato

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Semester A Fundamentals of Tourism and Hospitality Topic 09
THMGT101 – Tourism
Demand and Supply
Determinants of Tourism
Demand
What is demand?
“A schedule of the amount of any product or service that people are willing and able to buy at
each specific price in a set of possible prices during some specified period of time.”
Vital tourism demand data
Number of visitors.
Means of transportation used by the visitors to arrive at destination.
Length of stay and the type of accommodations used.
Amount of money spent by visitors.
The factors of demand
“Demand for travel to a particular destination is a function of the propensity of the individual to
travel and the reciprocal of the resistant of the link between origin and destination areas.
Demand = f (propensity, resistance)
PROPENSITY
Psychographics
Demographics
Marketing effectiveness
RESISTANCE
Economic distance
Cultural distance
Cost of tourist services
Quality of service
Seasonality
Propensity

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