Determinants of Demand Determinants of Demand and Supply in Tourismand Supply in Tourism

TOURISM DEMANDTOURISM DEMAND

The total number of persons who The total number of persons who travel, or wish to travel, to use travel, or wish to travel, to use

tourists facilities and services at tourists facilities and services at places away from their places of places away from their places of

work or residencework or residence

APPROACHES TO STUDY APPROACHES TO STUDY TOURISM DEMAND TOURISM DEMAND

Economists-Economists- Demand measured in Demand measured in monetary returns gained within a monetary returns gained within a period of time. Price, elasticity, period of time. Price, elasticity, quality, revenue and expenditure.quality, revenue and expenditure.

Psychologists-Psychologists- Demand related to Demand related to motivation, behavior, personality and motivation, behavior, personality and environment.environment.

Geographers-Geographers- Demand based on Demand based on geographic boundaries, demographics.geographic boundaries, demographics.

TYPES OF DEMANDTYPES OF DEMANDEffective or Actual Demand-Effective or Actual Demand- People People

actually traveling at a point of timeactually traveling at a point of time..Potential Demand-Potential Demand- People who could People who could

travel if motivated.travel if motivated.Deferred/Postponed Demand-Deferred/Postponed Demand- People People

who wish to travel, but are not traveling who wish to travel, but are not traveling presently due to temporary reasons, of presently due to temporary reasons, of self or supply end.self or supply end.

Suppressed Demand –Suppressed Demand – People not People not interested in travel. interested in travel.

TRAVEL PROPENSITY – TRAVEL PROPENSITY – LIKELIHOOD TO TRAVEL LIKELIHOOD TO TRAVEL

Net Travel Propensity-Net Travel Propensity- Percentage of Percentage of population of the overall population who makes at population of the overall population who makes at least one trip during a given period of time. least one trip during a given period of time.

= = Number of population taking at least one trip Number of population taking at least one trip X 100X 100

total populationtotal population

Gross Travel Propensity-Gross Travel Propensity- Total number of Total number of trips undertaken as a percentage of the population.trips undertaken as a percentage of the population.

= = Number of Total TripsNumber of Total Trips X100 X100

Total PopulationTotal Population

HIGH AND LOW TRAVEL HIGH AND LOW TRAVEL PROPENCITYPROPENCITY

High Travel PropensityHigh Travel PropensityHigh EducationHigh EducationMore AwarenessMore AwarenessMore IncomeMore IncomePrivate VehiclePrivate VehicleBetter Travel Better Travel FacilitationFacilitationGood Exchange RateGood Exchange RateShorter Travel Shorter Travel DistanceDistanceLow Travel CostLow Travel CostYoung AgeYoung Age

Low Travel Low Travel PropensityPropensityLow EducationLow EducationLow AwarenessLow AwarenessLow IncomeLow IncomeNo ownership of No ownership of VehicleVehiclePoor Travel FacilitationPoor Travel FacilitationPoor Exchange RatePoor Exchange RateLong Travel DistanceLong Travel DistanceHigh Travel CostHigh Travel CostOld AgeOld Age

FACTORS DETERMINING FACTORS DETERMINING TOURISM DEMANDTOURISM DEMAND

1.1. IndividualIndividual

2.2. EconomicEconomic

3.3. GeographicGeographic

4.4. DestinationDestination

5.5. PoliticalPolitical

INDIVIDUAL FACTORSINDIVIDUAL FACTORS

EducatEducation and Awarenession and Awareness MobilityMobility Age, Gender, ReligionAge, Gender, Religion Income and employment, disposable Income and employment, disposable

income, household income, DINKSincome, household income, DINKS Paid holidayPaid holiday Family InfluenceFamily Influence Nature of Family-joint, nuclearNature of Family-joint, nuclear VALSVALS Stage of Family Life CycleStage of Family Life Cycle Gap Year OpportunitiesGap Year Opportunities

ECONOMIC FACTORSECONOMIC FACTORS

Cost of TravelCost of TravelCost of ProductsCost of ProductsCompetitive PricesCompetitive PricesExchange RateExchange Rate

GEOGRAPHIC FACTORSGEOGRAPHIC FACTORS

SeasonalitySeasonalityAccessibility, location and Accessibility, location and

distancedistanceAttractions AvailableAttractions AvailableUrban or Rural population or Urban or Rural population or

Economy Economy

DESTINATION FACTORSDESTINATION FACTORS

Image – organic and inducedImage – organic and induced Promotion: travel channels, Promotion: travel channels,

awareness, dealsawareness, deals Technology and developmentTechnology and development CRS technologyCRS technology Development LevelDevelopment Level CredibilityCredibility Safety and Security Safety and Security Attraction and EventsAttraction and Events Quality of ProductQuality of Product Travel FormalitiesTravel Formalities

POLITICAL FACTORSPOLITICAL FACTORS

Government regulation on Government regulation on supply and touristssupply and tourists

Visas, formalities, health checks, Visas, formalities, health checks, currency, prohibitionscurrency, prohibitions

Transport regulation, Transport regulation, accessibility, bilateral accessibility, bilateral agreementsagreements

CHARACTERISTICS OF TOURISM CHARACTERISTICS OF TOURISM DEMANDDEMAND

Planned demandPlanned demand Involves a lot of expenditureInvolves a lot of expenditure There is no tangible return or There is no tangible return or

purchasepurchase Highly price elasticHighly price elastic Can be price inelastic tooCan be price inelastic too SeasonalitySeasonality Is not subject to law of diminishing Is not subject to law of diminishing

returnsreturns Changing demand patterns Changing demand patterns

TOURISM SUPPLYTOURISM SUPPLY

The supply of all assets, services The supply of all assets, services and goods to be enjoyed or and goods to be enjoyed or

bought by visitors and occasioned bought by visitors and occasioned by the journeys of visitors.by the journeys of visitors.

COMPONENTS OF TOURISM COMPONENTS OF TOURISM SUPPLYSUPPLY

InfrastructureInfrastructure (telecommunications, (telecommunications, accommodation and transport)accommodation and transport)

Superstructure Superstructure ((include facilities constructed primarily to support visitation and visitor activities.))

Attractions Attractions (theme parks, museums, (theme parks, museums, buildings, ski-slopes)buildings, ski-slopes)

Marketing/Promotion and Marketing/Promotion and Destination ImageDestination Image

TOURISM SUPPLYTOURISM SUPPLY

Tourism supply is a composite Tourism supply is a composite product involving transport, product involving transport,

accommodation, catering, natural accommodation, catering, natural resources, entertainment, and other resources, entertainment, and other

facilities and services, such as facilities and services, such as shops and banks, travel agents and shops and banks, travel agents and

tour operators.tour operators.

FACTORS AFFECTING TOURISM FACTORS AFFECTING TOURISM SUPPLYSUPPLY

1.1. Economic Economic

2.2. PoliticalPolitical

3.3. GeographicalGeographical

4.4. LegalLegal

5.5. TechnologicalTechnological

6.6. SocialSocial

Tourism Product

TransportTourists Area of Origin

Tourists Destination

Tourists DemandProduct Package Supplier

Associated Services

Government NGOsTourism

OperatorsServices Tour Guides

+ Drivers

ACCOMMODATION

Components of Tourism Supply (supply chain)

SUPPLY COMPONENTSNatural or environmental resources Natural or environmental resources

((physiographic of the area, landforms, flora, fauna, water bodies, air quality and similar natural phenomena)

Built or man-made resourcesBuilt or man-made resources ((infrastructure, superstructure)infrastructure, superstructure)

TransportationTransportationHospitality and cultural resources Hospitality and cultural resources

((friendliness, courtesy, sincere interest and willingness to serve and to be better acquainted with visitors))

DEMAND-SUPPLY LINKDEMAND-SUPPLY LINK

Demand Generating Origin

Supply ReceivingDestination

Marketing and Promotion

TOURISM DESTINATION TOURISM DESTINATION PLANNING PLANNING

The availability of natural resources The availability of natural resources and attractionsand attractions

The availability of investment fundsThe availability of investment funds A skilled human resource baseA skilled human resource base Government policy that supports Government policy that supports

tourismtourism Destination accessibilityDestination accessibility The presence of complementary The presence of complementary

services and facilities and services and facilities and infrastructureinfrastructure

Thank youThank you