Tourism concepts

Defining tourism demand
Economist 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 Psychologists Perspective of motivation and behaviour why people will ask for tourism Geographers The total number of people who travel, or wish to travel, to use tourist facilities and services at places away from their places of work and residence
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism demand concepts
Dr. Nimit Chowdhary
Professor

Tourism Concepts

Indian Institute of Tourism and Travel Management

Indian Institute of Tourism and Travel Management
2

Approaching tourism demand
Economic approach Idea of elasticity- what happens to quantity demanded when prices and other things change!
Tourism Concepts

Three concepts of demand
Effective or actual demand Suppressed demand No demand
Tourism Concepts

Psychological What personality traits and external approach influences will affect willingness to buy a tourism product! Geographer’s Brings into perspective determinants of approach demand other than price those will influence participation and possible participation in tourism!
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
3 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
4

1. Effective demand
Actual number of participants in tourism or those who are traveling, i.e. de facto tourists Commonly and easily measured Bulk of tourism statistics refers to effective demand
Tourism Concepts

2. Suppressed demand
Comprises of people who would like to travel but do not travel for some purpose
Potential demand refers to those who would travel at some future date if circumstances change, e.g., purchasing power or leave entitlement may increase Deferred demand is a demand postponed due to a problem in supply environment, e.g., lack of capacity in accommodation
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 5

Indian Institute of Tourism and Travel Management
6

1

3. No demand
Those who simply do not wish to travel or are unable to travel, constituting a category of no demand
Tourism Concepts

Two more concepts
Substitution of demand Refers to a case when demand for one activity (say a self catering holiday) is substituted by another (staying in serviced accommodation) Redirection of demand Where the geographical location of demand is changed, e.g., trip to Ooty is redirected to Darjling
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 7

Indian Institute of Tourism and Travel Management
8

A new tourism supply
Might redirect demand from similar facility Might substitute demand from other facility (tourism product) Might generate new demand
Tourism Concepts

Indicators of tourism demand
Two commonly used indicators of tourism demand are: Travel propensity Penetration of tourism trips in a population Demand schedule Refers to the quantities of a product that an individual wishes to purchase at different prices at a given point in time
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 9

Indian Institute of Tourism and Travel Management
10

Indicators of tourism demand
Travel propensity
Net travel propensity Refers to the percentage of the population that takes at least one tourism trips in a given period of time Gross travel propensity Total number of tourism trips taken as a percentage of the population
Tourism Concepts

Travel propensity calculations
Say, Out of a population of 10 m inhabitants
3.0m take one trip of one night or more 1.5m take two trips of one night or more 0.4m take three trips one night or more 0.2m take four trips of one night or more Total 5.1m take at least one trip
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

3.0 X 1 = 3.0 mt 1.5 X 2 = 3.0 mt 0.4 X 3 = 1.2 mt 0.2 X 4 = 0.8 mt

Indian Institute of Tourism and Travel Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 11

= 8.0 mt
mt = million trips

Indian Institute of Tourism and Travel Management
12

2

Travel propensity calculations
Now,
Net travel propensity Gross travel propensity Travel frequency
September 17, 2007

Country Potential Generation Index (CGPI)
Tourism Concepts

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

Measure of a country’s potential to generate trips
N e / Nw CPGI = ----------Pe / Pw

Tourism Concepts

5.1 = ------ X 100 = 51% 10

An index of 1 indicates and average capability. Countries with CGPI more than 1 generate more tourists

Number of total trips = ---------------------------------- X 100 Total population

8.0 = ------ X 100 = 80% 10

Gross travel propensity = ----------------------------------Net travel propensity

80% = ------ = 1.57 51%

Indian Institute of Tourism and Travel Management
13

Ne Nw Pe Pw

= number of trips generated by the country = number of trips generated in world = population of country = population of world
mt = million trips
(C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
14

(C) Prof. Nimit Chowdhary @IITTM

September 17, 2007

Why tourism demand?
Consumer need Consumer perception of what will satisfy need Consumer perception of the attractions
Indian Institute of Tourism and Travel Management
(C) Prof. Nimit Chowdhary @IITTM 15

Tourism motivators
Push Factors
Tourism Concepts

Facilitators

Pull factors

If these two agree

Motivation to visit destination

Actual attractions
September 17, 2007

Ego enhancement Ritual inversion Pilgrimage Religion Health Education Perceived authenticity Conventions/ conferences
September 17, 2007

Cultural selfconfidence Annual leave Weekends Flextime Long service leave Disposable income Transport systems
(C) Prof. Nimit Chowdhary @IITTM

Location Tourism Climate Concepts National promotion Retail advertising Wholesale marketing Special events Incentive schemes Natural environment Tourist facilities Tourist attractions VFR Indian Institute of Culture Tourism and Travel Man-made Management environment 16

Ritual inversions Geographical
Cool climate Inland Urban Plains Sparse vegetation to to to to to Hot climate Coast Rural Mountains Lush vegetation
Tourism Concepts

Ritual inversions Physical/ mental
Mundane Stressful Activity Modern Secular Saving Formal Work Alienation
September 17, 2007

Indian Institute of Tourism and Travel Management
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 17

to to to to to to to to to

Excitement Tranquil Relaxation Historic Religious Spending Informal Leisure Communication

Tourism Concepts

Indian Institute of Tourism and Travel Management
18

(C) Prof. Nimit Chowdhary @IITTM

3

Ritual inversions Physical/ mental
Non-learning Familiar Non-artistic Cultural norms Separation Frugality Routine Serious Restriction
September 17, 2007

Determinants of suppressed demand
Tourism Concepts

to to to to to to to to to

Educational Unfamiliar Artistic New culture Family/ friends Luxury Non-routine Fun Freedom

Indian Institute of Tourism and Travel Management
19

Travel is expensive and demands a certain threshold of income before people can undertake tourism. It competes with other products for available funds. Lack of time may be a problem for some individuals- cannot afford to be away from home Physical limitations (such as ill-health) are a significant reason for many people not traveling.
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Tourism Concepts

Indian Institute of Tourism and Travel Management
20

(C) Prof. Nimit Chowdhary @IITTM

Determinants of suppressed demand
Family circumstances such as commitments, those who are single parents, or have to care for elderly relatives may prevent travel. Government restrictions such as currency controls and visas may act as a real barrier to travel (both inbound and outbound) for some countries. Lack of interest/ fear are real barriers for some individuals
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

1. TRAVEL STIMULI
Advertising and promotion Travel literature Suggestions/ reports from other travelers Travel trade suggestions and recommendations

2. PERSONAL AND SOCIAL DETERMINANTS OF TRAVEL BEHAVIOUR
Socioeconomic status Personality features Social influences and aspirations Attitudes and values

MOTIVATIONS

DESIRES/ NEEDS

EXPECTATIONS
Tourism Concepts

Tourism Concepts

3. EXTERNAL VARIABLES
Confidence in travel trade intermediary Image of destination/ service
Indian Institute of Tourism and Travel Management
21

TRAVEL DESIRES

INFORMATION SEARCH

ASSESSMENT/ COMPARISION OF TRAVEL ALTERNATIVES

DECISION

Previous travel experience Assessment of objective/ subjective risks Constraints of time/ cost September 17, 2007 etc.

Cost/ value relations Quality/ quantity of travel information

Attractions/ amenities offered

Range of travel opportunities Type of travel arrangement offered
Indian Institute of Tourism and Travel Management
22

(C) Prof. Nimit Chowdhary @IITTM

4. CHARACTERISTICS AND FEATURES OF SERVICE DESTINATION

Case 1: Leading position of Europe
Large segments of population receive relatively high incomes, resulting in high levels of disposable incomes Paid leave from work is normal in European countries High proportions of population of, for example, Germany, France and UK attach very high priority to annual foreign holiday and are reluctant to let is go even during recession
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Case 1: Leading position of Europe
Tourism Concepts

There is a wealth of both natural and man-made attractions Demand for foreign travel is satisfied by a large tourist industry and the necessary infrastructure International travel need not involve great distances, owing to relatively small countries

Tourism Concepts

Indian Institute of Tourism and Travel Management
23 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Indian Institute of Tourism and Travel Management
24

4

Case 2: Characteristics of generating markets
It includes at least one of the four top generators of international tourism world wide- Germany, US, Japan and UK It includes neighbouring states, as the distance and cost involved are relatively small It includes countries further afield if, as in the case between the USA and Western Europe, air travel is available and at a cost within the reach of large segments of the population
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM

Case 2: Characteristics of generating markets
Tourism Concepts

Indian Institute of Tourism and Travel Management
25

It depends upon the size of the population of Tourism generating states and their propensity to travel Concepts It depends upon ease of travel across the borders It depends upon the real and perceived price of trips to the destination It depends upon the attractiveness of the destination It depends upon the social, cultural and historical links between the countries Indian Institute of It depends upon marketing activity and appropriate Tourism and Travel Management supply
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 26

5

Sign up to vote on this title
UsefulNot useful