Unit-3

Introduction to tourism demand:

# Introduction to Tourism Demand:

Tourism demand is usually regarded as a measure of visitors’ use of a good or service.
The concept of tourism demand originated from the classical definition of demand in economics,
namely the desire to possess a commodity or to make use of a service, combined with the ability
to purchase it. Tourism demand is a special form of demand in that a tourism product is a bundle
of complementary goods and services. Consumers instead of goods and services are transported,
and tourism consumption occurs simultaneously with tourism production.
Tourism demand is a broad term that covers the factors governing the level of demand,
the spatial characteristics of demand, different types of demand and the motives for making such
demands. Cooper (2004:76) defines demand as “a 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 some specified period of time”
Individual called “tourism” generates tourism demands. This happen in a particular place
called a “tourism destination”. The scale and the magnitude of demand differ with time and
sometimes with seasons. Time demand for tourism services either advances or changes. Such
changes could be due to the emergence of the so-called “new tourism” (Poon, 1994 and 1993).
These tourists want to experience something new and expect high quality service and
value for their money. New tourists bring with them a different level of demand. Another
important issue that has arisen is the increasing significance of tourist seasonality with regard to
periods of high and low tourism demand referred to as peak and low seasons respectively.

# Determinants of tourism:
The majority of tourist visits take place for holiday purpose, but there are certain factors
that are considered as the important indicator for tourism demand. They are as follows:
1. Economic determinants:
 Disposal income: it is referred as the total amount of money available for an
individual or population to spend or save after taxes have been paid. As an economic
measure it is abbreviated DPL.
 GNP per capital: Gross national product (GNP) per capital is the dollar value a
country’s final output of goods and services in a year, divided by its population. It
reflects the average income of a country’s citizens. Knowledge a country’s GNP per
capital is a good first step toward understanding its economic strengths and needs.
 Cost of living: A cost-of-living index is a theoretical price index that measures
relative cost of living over time or regions. The amount of money needed to sustain a
certain level of living, basic expenses such as housing, food, taxes, and healthcare.
Cost of living is often used when comparing how expensive it is to live in one city
versus another.
 Tourism price: To be successful in the marketplace, tourism must be priced
accurately and competitively. This requires a clear understanding of the individual
costs of all product components and their impact on total product price.
 Transportations cost: The expenses a company incurs when it transfers its
inventory or other assets to another location. For example, accompany must pay a
trucking or shipping company. If a company is delivering a product, it may pass on
 the costs to the customer. Alternatively, it may spread its transportation across all
products, or it may simply absorb the costs.
2. Socio-Psychological determinants:
 Demographic factors: Demography includes factors such as population growth;
declining fertility rates, increased longevity, and immigration and labour migration
etc. these factors have significant influence upon tourism.
 Motivations: The primary drivers for travelling are needs to escape from daily
routine, workplace, but also social needs such as meeting other people, experiencing
something unique or unusual.
 Images of destination: Each destination has an image, and some can have a stronger
image than others. In order to develop a competitive position, it is important to create
and transmit a favorable image to potential tourists in target markets.
 Awareness of opportunities: Public’s understanding of the importance of tourism to
the local economy is important to tourism to flourish. Similarly, tourists should also
know the various opportunities available in the destination.
 Life span: Life span relates to tourism area life cycle (TALC) which stares that most
tourist resorts start on a very small scale and get bigger and bigger until stagnation
occurs. TALC has six stages namely 1. Exploration, 2. Involvement, 3. Development,
4. Consolidation, 5. Stagnation, 6. Decline. To stop it from decline, rejuvenation is
required. These six stages are modeled in two dimensions as product life cycle
namely on x axis it is “time” and on y axis this is “visitor” numbers.
3. Exogamous determinants: (business environment)
 Availability of supply resources: The quality and availability of tourism-supply-
resources are a critical element in meeting the needs of the ever-changing and
growing tourism market. As D. Taylor (1980) suggests, if the goods and services
required by the visitor are known, it is possible to list their availability in an area and
determine how well the supply matches the demand.
 Economic growth and stability: The relationship between economic growth and
stability refers to the manner in the political stability of a nation can lead to its
economic growth. This economic growth. This economic growth is instrumental in
attracting tourists.
 Political and social environment: The removal of political barriers and obstacles
always has a marked effect on travel. Increased political stability brings social
harmony thereby opening up new prospects for Travers.
 Recession: Recession is a contraction phase of business cycle. Due to the recession
there is an impact of slowdown in the tourism and overnight domestic visitor and the
wider effect on the overall economy.
 Accessibility: Accessibility tourism is the ongoing endeavor to ensure tourist
destinations, products and services are accessible to all people, regardless of their
physical limitations, disabilities or age. It encompasses publicly and privately owned
tourist locations.

 Motivation and tourism demand:

In a very comprehensive assessment of tourist motivation, Mountinho (1987: 16)
defined motivation as a ‘state of need, a condition that exerts a push on the individual
towards certain types of action that are seen as likely to bring satisfaction’. This means that
 demand is about using tourism as a form of consumption to achieve a level of satisfaction for
an individual, and involves understanding their behavior and actions and what shape these
human characteristics.
There are as many reasons for engaging in tourism, as there are tourists. Different
people participate in tourism for different purposes. Seemingly, every purpose comes with
specific tourism demand. One of the most common demands is for accommodation.
Whatever the intention, tourists should be accommodated in one or another. An important
part of tourism motivation is that of the behavior between the guest and host where the
encounters between the two are described as; visitors who are on the move to enjoy
themselves interacting positively with hosts, who are usually stationary and who have the
function of catering for these visitors.
In conclusion, it is evident that tourism motivations are influenced by many things
particularly images; when these ‘pull’ images are presented, motives lead to motivations.
When there is strong relationship between the tourist’s motivation and the nature of the
destination, the influence image is successful.
The most common reasons for travel away from home are:
 For leisure, recreation and holidays
 To visit friends and relatives
 For business and professional engagements
 For health treatment
 To undertake religious and other pilgrimage’s
 Other more personal motives.

 Intrinsic and extrinsic Motivation:

There is no-embracing theory of tourist motivation due to the problem of simplifying
complex psychological factors and behavior into a universally acceptable theory that can be
tested and proved in various tourism contexts. This is illustrated in table which summarizes
some of the main theoretical approaches developed in motivation research. The different
approaches illustrate that there is no general congruity between the approaches. {I.e. there is
no common agreement or approach} which explain the complexity of trying to derive general
explanations of motivation among tourists. This resulted in a large number of individual
studies of tourist motivation dating back to the 1970s which adopt different theoretical and
conceptual standpoints. One immediate complication is the problem of understanding what
drives an individual to travel.

# CUBERO RAMUMBO CLASSIFICATION OF MOTIVATIONS:

 PHYSICAL MOTIVATIORS: Which are related to physical relaxation and rest,
sporting activities activities and specific medical treatment? All are connected with the
individual’s bodily health and well-being.
 CULTURAL MOTIVATION: Which are connected with the individual’s desire to
travel in order to learn about other countries and their people and their cultural heritage
expressed in art, music, literature, folksong etc.
 INTERPERSONAL MOTIVATION: Which are related to a desire to visit relatives,
friends, of to escape from one’s family, workmates of neighbors, or to meet new people
and forge new friendships, of simply to escape from the routine of every day.
  STATUS AND PRESTIGE MOTIVATORS: Which are identified with the needs of
personal esteem and personal development. These are related to travel for business of
professional interests, for the purpose of education and the pursuit of hobbies.

# Measuring tourism Demand:

Measuring tourism demand, studies firs of all the remaining components of visitors
consumption, mainly, expenditure in kind. Secondly, it intends to guide countries in the
determination and compilation of the other components of total tourism demand.
Tourism demand can be measured in a variety of ways. Kim (1988, p 25) categorized the
measurement criteria for all types of travel and tourism demand into four groups:
 A doer criterion: such as the number of tourist arrivals, the number of tourist visits
and the visit rate;
 A pecuniary criterion: for example the level of tourist expenditure (receipts) and share
of expenditure (receipts) in income;
 A time-consumed criterion: such as tourist-days, tourist-nights; and
 A distance-travelled criterion: for instance, the distance travelled in miles of
kilometers.
Among the above four categories, the doer criterion and pecuniary criterion dominate
international tourism demand studies. Considering statistical availability and consistency
between data sources, tourist arrivals (TA) and tourist expenditure (TE) (receipt) are the most
commonly used demand measures in empirical studies, along with their derivatives, such as the
tourist participation rate derived from tourist arrivals divided by population of the origin country
region (TA_P) and tourist expenditure per capital derived from total tourist expenditure divided
by population (TE_P).

# Possible cause of high and low travel propensity:

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.

Actual or effective demand: It can measure in terms of travel propensity. Travel propensity
measures the percentage of a population that actually engages in tourism.
A useful measure of effective demand in tourism in net travel propensity
Net travel propensity= % 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) * 100 / total population.
Gross Travel Propensity= Gross travel propensity is the total number of tourism trips taken as a
percentage of the population.
= number of total trips) * 100 / total population
Gross travel propensity can exceed 100% as it also takes into account those who make more than
1 trips away from home.
Travel frequency= gross travel propensity / net travel propensity.

WHAT IS MEASURED IN TOURISM DEMAND?

 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)
 Value Statistics
 Measurement of economic value of foreign visitors and outgoing visitors (expenditure)
 International tourism Expenditure
 International tourism receipts
 Leisure trip

 Tourism Statistics:
The trend and transformation in global travel and tourism can be assessed at different, but
interrelated, geographic levels; the global, the regional and the national.

# Global Level:
 Dramatic growth of travel and tourism
 The contribution of travel and tourism to the global economy.
Most commonly, a global perspective on travel and tourism FOCISES UPON TWO
KEY issues:
 The worldwide scale and value of travel and tourism has growth dramatically in terms of
both arrivals and receipts. However, the key point is that, although the annual rate of
growth is slowing, travel and tourism is resilient to external factors. Major events, such as
‘9/11’, have only limited and temporary impacts on overall growth of travel and tourism,
which is forecast to continue in the foreseeable future.
 The contribution of travel and tourism to the global economy. The most powerful
justification for developing tourism is its contribution to national, regional and global
GDP and employment.
However, it is also important of recognize the global patterns of travel and
tourism flows/trends the reasons for them. Specifically, travel and tourism flows are not
equitable (or equally enjoyed by all regions or country); they tend to be regionalized (i.e.
within particular regions) and polarized (i.e. between particular countries). These patterns
are, to an extent, influenced by the historical ‘driver’ of the growth in travel and tourism.
But global tourist flows are also determined by:
  The nature and supply of tourism resources (nature, man-made, cultural) at the global
and national scales.
 Distance between destinations and main generating regions.
 Transport and communication networks
 Climate and climate change
 National and international political economy
 Globalization of the world economy and business.

# Regional level:
Regional perspective on global travel and tourism is concerned with:
 An analysis of the volume and growth of travel and tourism within regions
 Comparisons between regions
As noted, travel and tourism flows are highly regionalized; that is, the most significant flows of
international tourism occur within particular regions.
At the same time, the WTO divides the world into six regions also have their own regional (for
example, PATA, CTO) or sub-regional tourism organizations which collate and disseminate
information, develop regional tourism policies, and soon.
Moreover, many external influences (wars, terrorism, health scares, etc.) are most keenly felt at
the regional level.
Therefore, a regional perspective on global travel and tourism is concerned with:
 An analysis of the volume, value and growth trends and tourism within regions, the
potential for future growth, and regional policies, and
 Comparisons between regions. This the principal means of identifying and explaining
transformations is the patterns of international tourism flows.

# National Level:
Different picture of global tourism:
 How each country is performing relative to other tourism destinations
 The national level it is vital to consider the volume/value of travel and tourism relative to
other national criteria, such as employment or contribution to GDP.
When countries are listed according to the importance of tourism to the national economy, a
very different picture of global tourism emerges
Travel and tourism statistics relating to individual countries are usually complied into annual
league table of the world’s leading tourism generating countries (either by departures or
spending) and tourism destination countries (either by the number of arrivals or tourism receipts)
These provide of course, an indication of how each country is performing relative to other
tourism destinations (that is, their share of global travel and tourism) as well as providing a more
detailed picture of picture of the shifting patterns of tourism flows.

However, at the national level it is also vital to consider the volume/value of travel and tourism
relative to other national criteria, such as employment or contribution to GDP. In other words,
global league tables of the travel and tourism sector in many LEAST DEVELOPED
COUNTRIES (LDCs) is insignificant in global terms but is often the largest economic sector
within the country. Therefore, when countries are listed according to the importance of tourism
to the national economy, a very different picture of global tourism emerges. The WTTC’s
country league tables, accessible on the WTTC website, provide much of the information you
might require.

 Major Tourism Markets of Nepal:

The tourism industry is experiencing a tremendous growth with an ever increasing pressure
from number of destinations. The change of tourism market in Asia requires Nepal to
develop an effective marketing plan and strategy to attract Asian tourists from china, India,
Japan, South Korea and Malaysia. In the Southeast Asian region, several countries,
particularly Thailand, Malaysia and Singapore are competing with each other to be regional
tourism hubs in Southeast Asia.
The rapid economic growth in Thailand, South Korea, Hong Kong and Malaysia has led to a
large increase in national income, and hence disposable personal income. India and china is
by far the most important tourist generating countries for Nepal and there has been a recent
substantial increase in the value of international travel and tourism revenues and holds
promising future prospects.
SN=Destination/site=major places covered:
 Kathmandu and Lalitpur:- KTM and Lalitpur urban areas, Godavari, Hattiban, Gokama.
 Bhaktapur, Nagarkot, Dulikhel:- Nagarkot, Bhaktapur, Dhulikhel, Panauti, Namobuddha
 Pokhara Valley:- pokhara city and nearest surroundings
 Annapurna Region:- Ghandruk route, Ghorepani route, ABC trek, Jomsom,
Lomangthang, Muktinath, Manang, Ghalegaun areas.
 Chitwan Area:- chitwan NP and surroundings, kurintar, bharatpur, Nawalparasi
 Everest region:- jumbesi, Salleri, lukla, Namche, Everest Base Camp.
 Rolwaling, Numbur, sailing:- Charikot, Rolwaling, jiri, shivalaya, Bhandar, number,
Sailung Lubughat (IP Trail)
 Langtang, Helambu Region:- tamang Heritage Trial, Langtang/kanjin trail, Goshaikunda
trail, Chisapani-Helambu region.
 Biratnagar, Jhapa, Ilam, Dharan and Dhankuta:- Biratnagar, Itahari, Kakadbhita, Damak,
Ilam, Phikkal, Dharan, Bhedetar, Fhankuta, Hile.
 Kanchenjunga Region:- Phungling, Suketar, phungling-Ghunsa Route.
 Hetauda, Birgunj, Jnakpur:- Hetauda, Birgung, Phungling-ghunsa route.
 Trishuli, Gorkha, bandipur, Besisahar:- Trishuli, Manakamna, Gorkha, bandipur,
Damauli, Besisahar
 Lumbini, Palpa, Butwal:- Tansen, Butwal, Bhairahawa, Sunauli, Siddharthanagar,
Lumbini
 Nepalgunj, Bardiya and Surket:- Nepalgunj, Gulariya, Thakurdwara, Surkhet.
 Dhangadhi and Mahendranager:- Dhangadhi, Mahendranager, Shuklaohanta.
 Other miscellaneous areas:- Kodari Highway (sindhypalchowk), kakani, Danab,
Khendbari, Sirubari, Barapak.

# Major Tourism Activities:

1. Mountain Climbing: The 800 km stretch of the Nepal Himalayan is the greatest in the
world with eight peaks that rise above 8000m including the highest in the world, Mt.
Everest. Ever since the country open its peaks to climbers in 1994, the Nepal Himalayan
has become a great theater of mountaineering activity and the drama of success and
 failure have provided impetus to thousand of men and women to meet the ultimate
challenge. The Nepal Himalayan has been an attraction to many people, be they saints,
philosophers, researchers or adventures.
2. Trekking: The best way to experience Nepal’s unbeatable combination of natural beauty
and culture riches is to walk through them. One can walk along the beaten trails or virgin
tracks. Along with forests of rhododendron, isolated hamlets, and small mountain
villages, birds, animals, temple, monasteries and breathtaking landscapes, tourist will also
encounter friendly people of different cultures offering a fascinating glimpse of
traditional rural life.
3. Rafting: Rafting is one of the best ways to explore the typical cross section of natural as
well as ethno-cultural heritage of the country. There are numerous rivers in Nepal which
offer excellent rafting or canoeing experience. The Trisuli River (Grade 3+) is one of the
most popular of Nepal’s raftable rivers. An extremely popular sport in Europe, cannoning
is now available in Nepal. Cannoning gives tourist the freedom to explore some of the
most ruggedly beautiful, yet forbidden places in the world.
4. Hot Air Ballooning: Hot air ballooning is a very popular with tourist for it affords the
most spectacular birds-eye view of Katmandu valley and the Himalayan ranges towering
in the background. On a clear day it’s a superb way to view the Himalayan (from over
6000m up), and the view of valley is equally breathtaking.
5. Bungy Jumping: The ultimate thrill of a Bungy Jump can now be experienced in Nepal
at one of the best sites that this sport can boast of anywhere in the world. Nepal’s first
bungy jumping site is situated 160 meter. Over the Bhote Khoshi River, inviting tourist to
experience the ultimate adrenaline rush in the surroundings of this amazing place. The
jump, at 160m is staffed and operated by some of the most experienced jump masters in
the business.

 Emerging Trends and New Thrust Areas OF Nepalese Tourism:

With the world tourism fraternity looking at Nepal with renewed interest, the time for Nepal
has finally arrived with the current tourism boom people across the world are looking at
Nepal as a top destination.
Ministry of tourism should realize that:
 Amenities need to be in place for people to come and enjoy their experience.
 Concerted efforts required in creating awareness through many campaigns.
 Better connectivity and up gradation of tourism infrastructure.
 Making Nepal an accessible destination for tourists across the globe. (E.g. Visa
ease). Effort like a visit Nepal.
Social trends and political developments seem to be the most influencing factors. The
changing nature of tourism system itself is also driving CHANGES INTERNALLY within the
sector.
Technological advancements are also going to affect the tourism industry.
# Emerging Trends and new Thrust Areas of Nepalese Tourism:
Rural Tourism: Rural tourism taking place In rural areas or settlements, providing employment
and income to local, population, and offering individualization holiday products to consumers.
Rural tourism is based on accommodation service which is complemented by additional
service/facilities relying on the local social, cultural and natural resources, which are exploited
according to the principles of sustainable development. It is multi-faceted and may entail
farm/agriculture, cultural, nature, adventure and eco-tourism. As against conventional tourism,
rural tourism has certain typical characteristics like, it is experience oriented; the locations are
sparsely populated; it is predominantly in natural environment; ir meshes with seasonality and
local events and is based on preservation of cultural; heritage and traditions. In Nepal, the
emphasis is on traditions, arts and crafts.
MICE tourism: the “MICE” in the context of travel is an acronym for meetings, incentives,
conferences and Exhibitions/ Events.
It refers to a specialized niche of group tourism dedicated to planning, booking and facilitating
conferences, seminars and other events.
Sometimes referred to as the meetings or events industry, MICE travel involves a number of
components. They include
 Corporate meeting planners;
 Meetings and convention departments of hotels,
 Conference centers or cruise ships;
 Food and beverage managers;
 Logistics firms.
Traditional Wedding Tour: In Nepal provides access to knowledge of the wedding system of
Hindus and Buddhists of the country. The wedding practices of the country are unique and unlike
to rest of the traditions of the world. You can also participate in wedding ceremonies of different
ethnics and castes of Nepal. The particular traditional varies in accordance to caste and ethnicity
of the couple. The traditional way of Nepalese wedding attracts many of the visitors. Some of
them are inspired to so extent that they decide to re-marry in accordance to Nepalese way of
wedding most ceremonies happen in month of Mangsir.
Ecotourism: Ecotourism in Nepal is the main form of tourism in the country aside from the
attractions of Kathmandu and other historical cities. Ecotourism is perhaps nowhere more
relevant than in Nepal. With massive mountains, rolling hills, abundant vegetation and diverse
wildlife- it is little wonder that Nepal is a popular tourist destination and the ideal location for
ecotourism. Eco-tourism in plain is a system of traveling to destinations where nature comes
before anything else. As a traveler you play an important role in the lives of locals by
appreciating their gifts; their nature, society, and culture, and traveling as if you were living and
celebrating your life in that place just like the locals.

Medical: Tourism is the act of traveling abroad to receive medical, dental and cosmetic care.
Medical Tourism is also known as Medical Outsourcing and medical value travel. Significantly
lower costs for best practice care are usually the primary motivation in medical tourism although
some medical tourists go abroad for immediate availability of procedures and for treatments that
are not available in their home country. While abroad, patients also frequently take advantage of
the opportunity to vacation and tour inexpensively in the country they are visiting.

Mountaineering: Nepal is a country well known for its Himalaya Mountains. Among the 10
highest peaks in the world, eight, including the highest peak Mt. Everest, crown this country.
Mountaineering in Nepal is a prime tourism activity proving Nepal the cradle for mountaineers
for ages. Nepal Mountaineering with no substitute. Nepal is the home to the highest mountains in
the world including Mt Everest, Mt Kanchenjunga, Mt Dhaulagiri, Mt Annapurna and many
other peaks famous in the world of mountaineering.
Trekking: Trekking is a form of walking, undertaken with the specific purpose of exploring and
enjoying the scenery. It usually takes place on trails in areas of relatively unspoiled wilderness.
“Trekking is combination of hiking and walking activity in which people take multi-days trips in
rural, un development area. In another words, Trekking is making a journey/trips on foot,
especially to hike through mountainous areas often for multiple days and along lovely mountains
villages and enjoying nature and/or close contact with people in remote mountain villages where
lifestyle sometimes is unchanged since many generations.

Water tourism: It involves traveling to locations specifically to take part in water-based

activities. Water tourism is traveling by boat while on holiday, with the express purpose of
seeking things meant for the water tourist. While water tourism often involves active pursuits,
some water tourist visit islands and coastal regions in order to participate in more leisurely
pursuits such as diving or snorkeling. Tourists often visit well-known destinations such as major
water parks, popular lakes or well renowned beach location but some travel firms market deluxe
vacations to remote regions such as islands in the south pacific.

Ethnic tourism: Nepal is a multi-ethnic, multi-cultural, multi-religious and multi-lingual nation,

pluralism and diversity are its unique and notable features. Ethnic tourism is when travelers
choose to experience first-hand the practices of another culture, and may involve performances,
presentations and attractions portraying or presented by small, often isolated indigenous
communities.

Agro tourism: Agro Tourism is a style of vacation which is normally on farms. This may
include the chance to help with farming tasks the visit. Agro tourism is developing in to a large
part of the tourism industry and will soon be one of the largest sectors of tourism. People are
more interested in how their food is produced and want to meet the producers and talk with them
about what goes into food production. Agro tourism has various different economic and social
cultural aims. The basis of the program is the revitalization of the countryside and reversal of
urban trend. It brings tourists to the countryside instead of over populating cities.