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Determinants of Tourism

The document discusses the determinants of demand and supply in tourism. It outlines several approaches to studying tourism demand from economic, psychological, and geographic perspectives. Tourism demand depends on individual factors like income, age, and education level as well as economic factors like cost of travel and exchange rates. Tourism supply comprises infrastructure, attractions, transportation, accommodation, and services available at a destination. Both demand and supply are influenced by a variety of economic, political, geographic, technological, social, and legal factors. Effective tourism planning requires consideration of a destination's natural resources, investment opportunities, workforce, policies, accessibility, and complementary services.

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Vinay Punia
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843 views22 pages

Determinants of Tourism

The document discusses the determinants of demand and supply in tourism. It outlines several approaches to studying tourism demand from economic, psychological, and geographic perspectives. Tourism demand depends on individual factors like income, age, and education level as well as economic factors like cost of travel and exchange rates. Tourism supply comprises infrastructure, attractions, transportation, accommodation, and services available at a destination. Both demand and supply are influenced by a variety of economic, political, geographic, technological, social, and legal factors. Effective tourism planning requires consideration of a destination's natural resources, investment opportunities, workforce, policies, accessibility, and complementary services.

Uploaded by

Vinay Punia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Determinants of Demand and

Supply in Tourism
TOURISM DEMAND
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- Demand measured in
monetary returns gained within a period
of time. Price, elasticity, quality, revenue
and expenditure.
 Psychologists- Demand related to
motivation, behavior, personality and
environment.
 Geographers- Demand based on
geographic boundaries, demographics.
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.
TRAVEL PROPENSITY –
LIKELIHOOD TO TRAVEL
 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
HIGH AND LOW TRAVEL
PROPENCITY
High Travel Propensity Low Travel Propensity
High Education Low Education
More Awareness Low Awareness
More Income Low Income
Private Vehicle No ownership of Vehicle
Better Travel Facilitation Poor Travel Facilitation
Good Exchange Rate Poor Exchange Rate
Shorter Travel Distance Long Travel Distance
Low Travel Cost High Travel Cost
Young Age Old Age
FACTORS DETERMINING
TOURISM DEMAND
1. Individual
2. Economic
3. Geographic
4. Destination
5. Political
INDIVIDUAL FACTORS
 Educat ion 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
GEOGRAPHIC FACTORS
 Seasonality
 Accessibility,location and distance
 Attractions Available
 Urban or Rural population or
Economy
DESTINATION FACTORS
 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
CHARACTERISTICS OF TOURISM
DEMAND
 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
TOURISM SUPPLY
The supply of all assets, services
and goods to be enjoyed or bought
by visitors and occasioned by the
journeys of visitors.
COMPONENTS OF TOURISM
SUPPLY
 Infrastructure (telecommunications,
accommodation and transport)
 Superstructure ( include facilities
constructed primarily to support visitation
and visitor activities. )
 Attractions (theme parks, museums,
buildings, ski-slopes)
 Marketing/Promotion and
Destination Image
TOURISM SUPPLY

Tourism supply is a composite product


involving transport, accommodation,
catering, natural resources,
entertainment, and other facilities and
services, such as shops and banks,
travel agents and tour operators.
FACTORS AFFECTING TOURISM
SUPPLY
1. Economic
2. Political
3. Geographical
4. Legal
5. Technological
6. Social
Components of Tourism Supply (supply chain)

Tourists Area of Transport Tourists Destination


Origin

Tourism Product

Product
Tourists Demand ACCOMMODATION Package Supplier

Associated Services

Tourism
Government NGOs Services Tour Guides
Operators
+ Drivers
SUPPLY COMPONENTS
 Natural or environmental resources
( physiographic of the area, landforms, flora,
fauna, water bodies, air quality and similar
natural phenomena)
 Built or man-made resources
( infrastructure, superstructure)
 Transportation
 Hospitality and cultural resources
( friendliness, courtesy, sincere interest and
willingness to serve and to be better
acquainted with visitors )
DEMAND-SUPPLY LINK

Demand Marketing and Promotion Supply Receiving


Generating Origin Destination
TOURISM DESTINATION
PLANNING
 The availability of natural resources and
attractions
 The availability of investment funds
 A skilled human resource base
 Government policy that supports tourism
 Destination accessibility
 The presence of complementary services
and facilities and infrastructure
Thank you

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