PPP M3 S1
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This document discusses tourism demand management. It begins by outlining the objectives and introduction. The objectives are to identify the significance of an analytical approach to tourism demand and how approaches have changed since 1945. It then defines tourism demand and lists its components and indicators. It discusses how Uysal (1988) provides three reasons for analyzing tourism demand: for policy and forecasting, balancing supply and demand, and understanding consumer behavior. It outlines how approaches to tourism demand have changed since 1945 from a right to travel to encouraging responsible travel. Finally, it defines tourism demand, lists its components, and discusses demand schedules and elasticity.
PPP M3 S1
- 1. Prof. Cheryl Venan Dias PPP – Module 3 – Session 1
- 2. Objectives After completing this module you will be able to: Identify the significance of an analytical approach to tourism demand Identify how the approaches to the management of demand has changed since 1945 Define the term tourism demand List the components of tourism demand List the indicators of demand Interpret the purpose of demand schedules
- 3. Introduction This session focuses on the key approaches to tourism demand management. The volume of tourist grows and they can now reach the remotest regions of the world. UN’s Universal Declaration of Human Rights encourages every one to travel as a ‘right’, In the present day the travellers are also urged to travel ‘responsibly’. There are large sections of people who want to travel but are unable to do so due to barriers in travel. It is your responsibility to identify these barriers and implement strategies to remove them.
- 4. Analytical Approach Uysal (1988) provides three compelling reasons for analysing tourism demand. 1. It is essential underpinning for policy and forecasting. 2. It provides critical information to allow the balancing of provision of supply and demand at destinations. 3. It allows the tourism industry to better understand consumer behaviour and the tourism marketplace.
- 5. Changes in Tourism Demand Policy makers, for example the United Nations (UN) after the second world war in its Universal Declaration of Human Rights stated that: ‘every one has the right to rest and leisure including.. Periodic holidays with pay’(1948) By 1980 the Manila Declaration on World Tourism declared the ultimate aim of tourism to be: ‘the improvement of the quality of life and the creation of better living conditions for all peoples’ (WTO, 1980) Change in trend is the change from ‘right’ to ‘quality of demand’
- 6. Changes in Tourism Demand Current thought by WTO 1994, states that ‘Tourist share responsibility for conservation of the environment and cultural heritage’’ It has now become essential to manage tourist behaviour through code of ethics, visitor guidelines, and education about responsible tourist behaviour at host destinations. The tourism industry has been called to take further responsibility by reducing the carbon footprint.
- 7. Definition of Tourism Demand Scholars of various subjects and disciplines have defined tourism differently. Economist consider demand to be the 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 a specified period of time. Psychologist view demand from the perspective of motivation and behaviour. Geographers, on the other hand, define tourist demand as ‘The total number of persons who travel, or wish to travel, to use tourist facilities and services at places away from their places of work and residence” Mathieson and Wall, 1982
- 8. Definitions and Approaches The economic approach introduces the idea of elasticity – which describes the relationship between demand and price, or other variables. The geographer’s definition implies a wide range of influences, in addition to price, as determinants of demand and includes not only those who actually participate in tourism but also those who wish to but due to some reason do not. The psychologist delves deeper into the tourist to examine the interaction of personality, environment and demand for tourism.
- 9. Components of Tourism Demand There are three basic components that make up the total demand for tourism: Effective or actual demand: Refers to de facto tourist who are travelling and bulk of tourism statistics depends on this number. Suppressed demand: Potential demand- These people may travel subject to the change in circumstances Examples: Increase in purchasing power, savings, more paid holiday Deferred demand-demand postponed due to a problem in supply environment (deficit) Examples: Lack of capacity in accommodation, weather condition, natural disaster example 2004 Boxing Day Tsunami. When supply conditions are more favourable these may convert into effective demand in future. No demand: These are cause by people who simply do not wish to travel, they spend their income on goods other than tourism.
- 10. Other Influences on Demand Redirect demand from similar facility in the area: Example: Geographical location of demand is changed, a trip to Spain is redirected to Greece because of over- booking of accommodation. Substitute demand from other facilities: Example: Self catering holiday to a fully serviced accommodation. Generate new demand: Opening of new tourism supply – resort, attraction or accommodation.
- 11. Demand Schedule In economic terms, a demand schedule refers to the quantities of a product that an individual wishes to purchase at different prices at a given point in time. The relationship between price and quantity of product demanded is inverse. The higher the price of the product the lower the demand; the lower the price of the product the greater the demand.
- 12. Graph Expression in responsiveness of quantity to price change is known as elasticity of demand: Formula: ei=%Change in quantity / % change in price It is a absolute positive value and can be expressed as 1.0, 2.0 etc and not -.1, -.2 for goods that have their own-price elasticity greater than 1 are called elastic and are luxury goods. When it is less than 1 it is termed as a necessity.
- 13. SEA based questions: Five Mark Questions: 1. State and substantiate your reasons on why its important to analyse tourism demand? 2. Critically evaluate the changes to thoughts on tourism demand starting from the year 1948 3. Make a list of the reasons why an individual may be in the ‘no tourism demand’ category. 4. Draft a press release urging conference delegates to ensure that their travel to your conference is carbon neutral. 5. List the reasons why an individual may fall into the ‘potential tourism demand’ category. 6. Identify 10 reasons why demand for international tourism has grown since 1945. 7. Review the concepts of demand substitution and demand redirection and provide two examples each.
- 14. SEA based questions 10 Mark Questions: 1. How might the market and individual curves for tourism differ form other commodities, such as say food? 2. Critique the concept of ‘responsible tourism consumption’ 3. ‘The UNWTO’s Global Code of Ethics for Tourism is impossible to police’ Discuss the statement. 4. Why is it difficult to come up with a universally agreed definition of tourism demand? 5. Identify and discuss the key barriers to tourism demand that an individual might experience.