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Understanding Tourism Demand

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Understanding Tourism Demand

  1. 1. Prepared by:- Syed Zeshan Hyder UNDERSTANDING TOURISM DEMAND
  2. 2. TOURISM DEMAND  “The expenditure made by on or behalf of the visitor before, during or after the trip and which expenditure is related to the trip and which trip is undertaken outside the usual environment of the visitor”.  Tourism demand refers to the willingness and ability of consumers to buy different amounts of a tourism product at different prices during any one period of time.  The market demand function for a product or service is the relationship between the quantity demanded of the product and the various factors that influence this quantity.
  3. 3. MEASURING TOURISM DEMAND How many visitors arrived?  By what means of transportation?  How long they stayed and in what type of accommodation?  How much money was spent?
  4. 4. DETERMINANTS OF DEMAND FOR TOURISM  Although an individual may be motivated to travel, the ability to do so will depend on a number of factors related to both the individual and the supply environment.  Lifestyle (income, employment, holiday entitlement, educational attainment and mobility)  Life cycle (age and domestic circumstances)
  5. 5. LIFESTYLE AND LIFE CYCLE DETERMINANTS  Income and Employment -Gross income and Discretionary income -Switching demands  Paid Holiday Entitlement -Increase in leisure time  Education and Mobility -Knowledge and awareness -Car ownership
  6. 6. LIFESTYLE AND LIFE CYCLE DETERMINANTS  Race and Gender - whites, blacks, males, females, business people  Age
  7. 7. DEMAND FOR INTERNATIONAL TOURISM BALANCE OF PAYMENTS 1. Outbound Tourism – negative effect on resident country and positive on country visited 2. Inbound Tourism – positive effect on country visited and negative effect on resident country
  8. 8. DEMAND FOR DOMESTIC TOURISM  UNWTO reported in 1984 “there are relatively few countries that collect domestic travel and tourism statistics” WHY?
  9. 9. CONCEPTS OF DEMAND MEASUREMENT Product Level – total product, tourism items Geographical Level – world, country or destination Time-level – present, short, medium or long term
  10. 10. LEVELS OF MARKET DEFINITION  Total market – sum of actual and potential customers  Potential Market – consumers that profess interest  Served Market – part of the available market  Penetrated Market – set of consumers who actually purchase tourist products
  11. 11. When destination management is not satisfied with the present demand? Lowering the price to have growth in the available market Extension of the served market Promotion campaign within the potential market
  12. 12. WHAT IS MEASURED IN TOURISM DEMAND? Volume Statistics Value Statistics Visitor Profile
  13. 13. VOLUME STATISTICS  Total number of individual tourist arrivals and the total number of tourist departures  No. of trips = (no. of individuals) (no. of trips per individual)  Total tourist nights = (no. of trips) (average length of stay)
  14. 14.  Arrival in accommodation establishment  Business trip  Country of residence  Domestic tourism  Duration of trip  Inbound tourism  Internal Tourism  International Tourism  Outbound Tourism  Domestic Tourism  National Tourism
  15. 15. TRAVELLERS NOT INCLUDED IN THE TOURISM STATISTICS  Border Workers  Immigrants  Nomads  Transit Passengers  Refugees  Members of Armed Forces  Consulates  Diplomats
  16. 16. VALUE STATISTICS Measurement of economic value of foreign visitors and outgoing visitors (expenditure) International Tourism Expenditure International Tourism Receipts Leisure trip
  17. 17. VISITOR PROFILE  Visitor Name Origin and Destination  Age Mode of Transportation  Sex Purpose of Visit  Group Type Length of Stay  Nationality Accommodation used  Occupation Activities  Income Tour or independently organized
  18. 18. TOURISM MARKET TRENDS  Clear tendency toward shorter stays  Greater fragmentation of holidays  Higher demand for customized holidays due to advanced IT  Increased no. of senior tourists  Sustainable development  Emerging destinations  Segmentation of demand
  19. 19. Now let’s Measure Demand  D = f (propensity , resistance) Propensity = person’s predisposition to travel = how willing is the person to travel = what types of travel experiences he/she prefers Resistance = relative attractiveness of various destinations
  20. 20. FACTORS UNDER RESISTANCE INCLUDE:  Economic Distance – time and cost involved in traveling  Cultural Distance – extent of cultural differences  Cost of Services  Quality of Service  Seasonality

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