Tourism concepts Defining tourism demand

Tourism demand Economist Schedule of the amount of any product

concepts or service that people are willing and Tourism
Concepts

able to buy at each specific price in a

set of possible prices during a specified
Dr. Nimit Chowdhary period of time
Professor
Psychologists Perspective of motivation and behaviour
Indian Institute of Tourism and Travel why people will ask for tourism
Management Geographers The total number of people who travel,
or wish to travel, to use tourist facilities Indian
Institute of
and services at places away from their Tourism and
Travel

places of work and residence Management

September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 2

Approaching tourism demand Three concepts of demand

Economic Idea of elasticity- what happens to z Effective or actual demand
approach quantity demanded when prices and Tourism
Concepts
Tourism
Concepts
z Suppressed demand
other things change!
z No demand
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 Indian Indian
influence participation and possible Institute of
Tourism and
Institute of
Tourism and
participation in tourism! Travel
Management
Travel
Management

September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 3 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 4

1. Effective demand 2. Suppressed demand

z Actual number of participants in tourism z Comprises of people who would like to
Tourism Tourism
or those who are traveling, i.e. de facto Concepts travel but do not travel for some purpose Concepts

tourists z Potential demand refers to those who

z Commonly and easily measured would travel at some future date if
circumstances change, e.g., purchasing
z Bulk of tourism statistics refers to power or leave entitlement may increase
effective demand z Deferred demand is a demand postponed
due to a problem in supply environment,
Indian Indian
Institute of e.g., lack of capacity in accommodation Institute of
Tourism and Tourism and
Travel Travel
Management Management

September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 5 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 6

1
3. No demand Two more concepts
z Those who simply do not wish to travel Substitution of demand
Tourism Tourism
or are unable to travel, constituting a Concepts
Refers to a case when demand for one Concepts

category of no demand activity (say a self catering holiday) is

substituted by another (staying in serviced
accommodation)
Redirection of demand
Where the geographical location of
Indian
demand is changed, e.g., trip to Ooty is Indian
Institute of
Tourism and
redirected to Darjling Institute of
Tourism and
Travel Travel
Management Management

September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 7 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 8

A new tourism supply Indicators of tourism demand

z Might redirect demand from similar Two commonly used indicators of tourism
Tourism Tourism
facility Concepts demand are: Concepts

z Might substitute demand from other z Travel propensity

facility (tourism product) Penetration of tourism trips in a

population
z Might generate new demand
z Demand schedule
Refers to the quantities of a product that
Indian an individual wishes to purchase at Indian
Institute of Institute of
Tourism and
Travel
different prices at a given point in time Tourism and
Travel
Management Management

September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 9 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 10

Indicators of tourism demand Travel propensity

Travel propensity calculations
Net travel propensity Say,
Tourism Tourism

Refers to the percentage of the population Concepts

Out of a population of 10 m inhabitants Concepts

that takes at least one tourism trips in a 3.0m take one trip of one night or more 3.0 X 1 = 3.0 mt
given period of time 1.5m take two trips of one night or more 1.5 X 2 = 3.0 mt
0.4m take three trips one night or more 0.4 X 3 = 1.2 mt
Gross travel propensity
0.2m take four trips of one night or more 0.2 X 4 = 0.8 mt
Total number of tourism trips taken as a
percentage of the population Total
Indian Indian
Institute of
Tourism and 5.1m take at least one trip = 8.0 mt Institute of
Tourism and
Travel Travel
Management mt = million trips Management

September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 11 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 12

2
 Travel propensity Country Potential Generation
calculations Index (CGPI)
Now, z Measure of a country’s potential to
Tourism Tourism
Number of population Concepts generate trips Concepts
Net travel taking at least one trip 5.1 An index of 1 indicates and
= ---------------------------------- X 100 = ------ X 100 = 51%
propensity Total population 10 N e / Nw average capability. Countries
CPGI = ----------- with CGPI more than 1
Pe / Pw generate more tourists
Gross travel Number of total trips 8.0
propensity = ---------------------------------- X 100
Total population
= ------ X 100 = 80%
10
Ne = number of trips generated by the country
Nw = number of trips generated in world
Travel Gross travel propensity
= -----------------------------------
80%
= ------ = 1.57 Indian Pe = population of country Indian
frequency Net travel propensity 51%
Institute of Institute of
Tourism and
Travel Pw = population of world Tourism and
Travel
Management mt = million trips Management

September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 13 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 14

Tourism motivators
Why tourism demand?
Push Factors Facilitators Pull factors
z Ego z Cultural self- z Location
Consumer need Tourism
Concepts
enhancement confidence z Climate Tourism
Concepts
z Ritual inversion z Annual leave z National promotion
Consumer perception z Pilgrimage z Weekends z Retail advertising
of what will satisfy z Wholesale marketing
z Religion z Flextime
need z Special events
If these two Motivation to z Health z Long service z Incentive schemes
agree visit destination z Education leave z Natural environment
Consumer perception Perceived Disposable
z z z Tourist facilities
of the attractions
authenticity income z Tourist attractions
Indian z Conventions/ z Transport z VFR Indian

Actual attractions
Institute of
Tourism and conferences systems z Culture Institute of
Tourism and
Travel
Management
z Man-made Travel
Management

September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 15 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM
environment 16

Ritual inversions Ritual inversions

Geographical Physical/ mental
Mundane to Excitement
Cool climate to Hot climate Tourism
Concepts Stressful to Tranquil
Tourism
Concepts

Inland to Coast Activity to Relaxation

Urban to Rural Modern to Historic
Secular to Religious
Plains to Mountains Saving to Spending
Sparse vegetation to Lush vegetation Formal to Informal
Work to Leisure
Indian Indian
Institute of
Tourism and
Alienation to Communication Institute of
Tourism and
Travel Travel
Management Management

September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 17 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 18

3
 Ritual inversions Determinants of suppressed
Physical/ mental demand
Non-learning to Educational z Travel is expensive and demands a certain
Tourism Tourism
Familiar to Unfamiliar Concepts threshold of income before people can undertake Concepts

Non-artistic to Artistic tourism. It competes with other products for

Cultural norms to New culture available funds.
Separation to Family/ friends z Lack of time may be a problem for some
Frugality to Luxury
individuals- cannot afford to be away from home
Routine to Non-routine
Serious to Fun z Physical limitations (such as ill-health) are a
Restriction to Freedom
Indian
Institute of significant reason for many people not traveling. Indian
Institute of
Tourism and Tourism and
Travel Travel
Management Management

September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 19 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 20

1. TRAVEL STIMULI 2. PERSONAL AND SOCIAL DETERMINANTS OF TRAVEL BEHAVIOUR

Determinants of suppressed Advertising and Socio- Social
Personality Attitudes and
promotion economic influences and
demand status
features
aspirations
values
Travel literature

z Family circumstances such as commitments, Suggestions/ reports

from other travelers MOTIVATIONS DESIRES/ NEEDS EXPECTATIONS
Tourism Tourism
those who are single parents, or have to care for Concepts
Travel trade suggestions
Concepts

elderly relatives may prevent travel. and recommendations

ASSESSMENT/
z Government restrictions such as currency controls 3. EXTERNAL VARIABLES TRAVEL
DESIRES
INFORMATION
SEARCH
COMPARISION
OF TRAVEL
DECISION

and visas may act as a real barrier to travel (both Confidence in travel
trade intermediary
ALTERNATIVES

inbound and outbound) for some countries. Image of destination/

service Attractions/
z Lack of interest/ fear are real barriers for some Previous travel
Cost/ value
relations
amenities
Range of travel
opportunities
offered
individuals Indian
Institute of
experience Indian
Institute of
Tourism and Assessment of objective/ Quality/ quantity Type of travel
Tourism and
Travel subjective risks of travel arrangement
Travel
Management Management
Constraints information offered
September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 21 Septemberof
17,time/
2007 cost (C) Prof. Nimit Chowdhary @IITTM 22
etc. 4. CHARACTERISTICS AND FEATURES OF SERVICE DESTINATION

Case 1: Leading position of Case 1: Leading position of

Europe Europe
z Large segments of population receive relatively z There is a wealth of both natural and man-made
Tourism Tourism
high incomes, resulting in high levels of Concepts attractions Concepts

disposable incomes z Demand for foreign travel is satisfied by a large

z Paid leave from work is normal in European tourist industry and the necessary infrastructure
countries z International travel need not involve great
z High proportions of population of, for example, distances, owing to relatively small countries
Germany, France and UK attach very high priority
to annual foreign holiday and are reluctant to let is Indian
Institute of
Indian
Institute of

go even during recession

Tourism and Tourism and
Travel Travel
Management Management

September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 23 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 24

4
Case 2: Characteristics of Case 2: Characteristics of
generating markets generating markets
z It includes at least one of the four top generators z It depends upon the size of the population of
of international tourism world wide- Germany, US,
Tourism
Concepts generating states and their propensity to travel Tourism
Concepts

Japan and UK z It depends upon ease of travel across the borders

z It includes neighbouring states, as the distance z It depends upon the real and perceived price of trips
and cost involved are relatively small to the destination
z It depends upon the attractiveness of the destination
z It includes countries further afield if, as in the case
between the USA and Western Europe, air travel z It depends upon the social, cultural and historical
links between the countries
is available and at a cost within the reach of large Indian Indian

It depends upon marketing activity and appropriate Tourism

Institute of Institute of
z
segments of the population
Tourism and and
Travel Travel
Management
supply Management

September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 25 September 17, 2007 (C) Prof. Nimit Chowdhary @IITTM 26