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Primary Factors Affecting Tourism Demand Tourism Essay

Paper Type: Free Essay Subject: Tourism
Wordcount: 2511 words Published: 1st Jan 2015

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Primary factors affecting tourism demand are the economy with matters ranging from the exchange rate to job losses.Politics,the growth in size of the EU,environment and taxation.Crisis and threats including earth quakes,epidemics and terrorism.Demographic change with a shifting age structure,effects of migration and the rise of educational levels.Technology and it effects on transportation,communication and information.There is change in consumer attitudes and for the industry itself,product standardization,the growth of information channels,and pricing strategies.

The realisation of deciding to have a holiday is dependent in large part on the individual’s economic position and freedom to make the journey.External factors proving influential to this need would be freedom,fitness,time and money.The behaviour trend includes a host of factors including an internal state of mind relating to the motive and the capacity to make the journey.Emerging factors may be useful to examine as they will become somewhat predictable and constant in their evolution.Power relating to market concerns lies with the consumer.The prospective tourist.

The enlargement of the EU is especially important.Its size has grown some 25%,its population by some 20% and the GDP by 5% over the years.The general process of political maturation spanning over twenty years has influenced changing tourism demand.Media coverage influences a seed bed of latent interest in the recently inaugurated members of the community.Most prospective travellers are now able to see the world as their oyster.The holiday destinations therefore have become intensely competitive.Yet barriers to immediate progress remain especially for the countries of Eastern Europe.Here low investment rates,undeveloped infrastructure for the countryside,a poor transport system with third rate hotels and cuisine are capped by weak tourism marketing.

Image is a vital ingredient to the tourist destination.Their is prevailing ignorance of the new member countries.Destinations are chosen usually by motive matching.Here the enlargement of the EU has had remarkably little effect on the consumer,so it seems that only a transformation in marketing strategy management is going to improve matters.There will be significant change for the EU in source markets and the upswing of a rising welfare.The impulses undoubtedly come from the south and east with the traditional source markets such as Germany being saturated.

Demographic considerations have made their appearance and are now featuring as a focus for online debates and deliberations.Society consists of an older population with increasing life expectancy;and there is a decline in the number of children because of an increased proportion of the population divorcing and living separately.Traditional family patterns are dissolving.Also becoming influential is a rise in educational levels,the changing role of women in society and a more vibrant society due to admixture from migratory patterns.Yet tourists,people,are not going to alter their travel behaviour as they turn 60 or because of retirement.Patterns are adhered to originating from earlier years.Because of this it is possible to cater for future requirements in tourism for such a population.The generation of ‘baby boomers’is likely to be super active in their endeavour to satisfy themselves on prospective travel horizons.There will be senior trips accommodating to individual tailoring.Consider Germany as an example.The age group of 70-80 will rise more than 50% by 2018.Alterations of family numbers will become slow in maturation but this allows the industry to maintain orientation and supply a strong focus for needs and expectations of destination.Older people are becoming increasingly involved with their younger forebears and this will require adjustment.Factors to consider here are higher spending,longer stays,and other destination choices.The kids trip being a standard incurs its own behaviour pattern.More flight trips and usage of more tour operators.Playmates will be needed so this is another feature that the destination will have to meet.It is clear therefore that the changing nature of demography has impacts that will reflect in tourism demand.

The very important pre-trip phase involving the search for information and deciding upon the tourism product has as an emerging factor the skilled consumer with low involvement.This situation has produced interchangeable products.Distinctions of destination and tour operator is not a contentious issue with information overload these days.What happens to us all is an agreeable solution.Just a number of aspects for the required products from a few information sources.Arguing is not necessary and therefore the position is that of ‘low involvement’.And so the actual position is that of convenience together with experience helping ones orientation;variety being a feature which of course is sought by everyone.Our personal experiences and emotional banks have now become part of the product on offer promised by the producer.

Price orientation has become a dominant feature.This has been induced by strategy within the industry.The selling of quality trips for remarkably low prices in the hope of higher market shares is likely to result in a high turnover with probably a lower profit.But convenience and product quality rank with the consumer and so the phenomenon of induced price orientation continues to spiral.Yet it is the consumer who is more flexible than the industry itself.If one destination doesn’t turn out as I expected I can go to another.I don’t honestly have too much fancy for flying so I take the train or road network.There is contingency with the availability of an alternative even if more inconvenient;I can still get there.Consuming,drinking is fun not a necessity.There is no sense of lack because everything now is available on the market.But this means it becomes impractical to predict individual behaviour,yet it is becoming an importance to have at ones disposal as far as the industry is concerned the most accurate figures possible.Such market conditions,with decidedly knowledgeable consumers and vast resources in the field are presenting a serious challenge to the marketing departments.The problem has become even more intense and difficult;with globalization and a computer based technology tending to incline to standardization but tourism demand and products are becoming more differentiated and fragmentized.There are winter sports,field trips and holidays for the family.Expectations involve both quality and difference.With such standardization and differentiation this imposes more pressure without; in effect guaranteeing an increased demand or turn-over.

Without the consumer the service industries along with tourism go nowhere.This fact relates not only tourism but for any policies to do with tourism.Destinations have to become switched on,alerted, to realise they have become truly involved with intense competition.It is not sufficient simply to have a reliable product or for the consumer to realise this.There has to be the correct placement with the correct set and shrewd judgement is required for doing so.Here travel operators and agencies can assist in the phenomenon of the information overload providing well-timed guidance and convenience within the information jungle.Yet the politics involved has to pinpoint inconsistency and contradictions within the set of proposed objectives and establish solutions and priorities.Financial support should be discriminative here not everybody necessarily being acceptable as to the validity of following such objectives.Social balance of resources may be variable and indeed there could be a widening gap developing but tourism does require a broad base of comfortable incomed people with time and money.Any kind of vision is going to accomodate pan-european,national,regional and local needs.All the different levels of destination and industry segmentation will have to be linked somehow.

There are two categories of circumstances requiring priority of action.Either supply exceeds demand or the opposite of demand exceeding supply.Strategies adopted are tailored to meet circumstances arising either on a daily,weekly,seasonal or a long term basis.With demand being low either at below capacity or only at certain periods there is a variety of strategy engaged.Product modification and diversification with adjustment of distribution channels if needs be to strengthen.There has to be identification of alternative or even new sources of demand and price discounting.Reappraisal of promotional strategy.An example of the application of all these would be the Caribbean destinations responding to low levels of occupancy during a summer period.VFR is promoted to domiciles as the holidays usually fall within the summer period.While casinos as attractions are being promoted on some of the islands within the group.

Another condition is the necessity to reduce costs because it is not possible to increase the desired demand factor.To reduce fixed and variable costs in the hotel sector for example it may be necessary not only to reduce the rooms available but whole wings or even the hotel itself.Again this is prevalent in the Caribbean.Airlines can reduce plane quota available or rent them to other companies.

Redistribution becomes necessary as the demand for a product is no longer self-sustaining.Converting factors for hotels might consist of fusing two rooms into one or the provision of no-smoking rooms.Conventional hotel rooms are being transformed into time-share units being an example of long-term adaptive strategy.Or for the airline industry the conversion of scheduled flights into charter itineries.These are examples of adaptive supply redistribution.

When demand exceeds capacity additional charging for such resources incurs increased pricing for seating or rooms so gaining extra revenue per unit.Theme parks with ever increasing clientele but negative impaction can resort themselves to significantly higher entrance charges.

Then,responding to higher demand level, destination management may expand the current capacity factor.The hotels again being an example with additional infrastructure being acquired.Cot facilities are often available to increase the room capacity.Portable accommodation in the southern hemisphere is quite attractive and popular.Resort communities in the slack season make use of their surveillance staff to accommodate for the daily and weekly pattern of demands by supplying patrolled beaches.

The Caribbean again may be referred to as an example of the transference of demand at times of excess to periods of low demand.Differential seasonal pricing is an attempt to redistribute demand following from a high winter demand to a low summer one.

Accomodation forms an integral part of the tourist destination.The range is wide.From five-star luxury apartments to bed and breakfast;but all contributing to the experience of the destination.So the accommodation sector is a vital element in the supply of services and products to the tourist.

Supply of accommodation with easy access and amenities contribute to the pulling influence of the destination,its attraction;the only limitation being that of ones own personal budgeting which at times might well be variable.The concept of relative value becomes therefore a primary consideration for finalisation of destination choice for the prospective tourist.Income levels rule the volume of demand whereas relative prices will determine actual choice of such a destination.Exchange rates apart from cost format will influence price levels so if the dollar proves to be stronger compared with European currencies then more US visitors will appear in Europe because it is cheaper.With floating exchange rates this proves not to be so influential as in the past.Complications are bound to arise and it is therefore generally the case that volume for demand is linked to real income levels, real discretionary income.Precisely, it is elasticity of demand regarding income and how the exchange rate’s effect on prices influences this.

The exchange rate itself reflects the general well-being of the country concerned.Yet what constitutes economic data for the country involved has little meaning to the tourist who actually is only interested in relative prices for consumption items e.g.accomodation,shopping etc.Attempts are effected to install a ‘value-for-money’ concept whereby tour operators for example cost such items as bottle of wine to provide a means of comparison with the purchase of like items within the home country.This concept of value-for-money is useful regarding holiday expenditure.Affluent countries such as France and Britain have significant tourist outflows to quite poor countries such as Greece and Portugal.

Quality of amenities at the host destination including accommodation will influence demand.A certain aggregate of tourists will have to be present for a sufficiently powerful stimulus to further the demand flow.There should be a range of attractions for a certain degree of market differentiation to be existent.

With the all-inclusive tour the actual nature of the decision making process has changed;effectively the tour operator becomes the interpreter and coordinator of demand.Their specialised knowledge proves to be particularly useful here.Markets are known to exist for a certain price banding.As noted in this report the potential tourist is becoming exceedingly knowledgeable about such matters in some instances being able to displace such a function.

It has become necessary to examine tourist motivation over a period of time.Only partial explanations are expected in a field strewn with inconsistencies.Essentially the reason(s) for motivation must revolve around a person’s personal preference,experience and the social and economic circumstances.Hopefully the understanding of tourist motivation will enable us to realise why it is that some destinations hold a heightened attraction compared to others and why decline occurs with changing tastes and fashions providing a greater knowledge of the world and its requirements than was so for earlier industry forecasting.


Cooper,C et al (2005) Tourism:Principles and practice.FT Prentice Hall

Page S. (2006) Tourism Management: Managing for Change Butterworth-Heinemann

Tribe John (1995) The Economics Of Leisure And Tourism.Butterworth-Heinemann

Weaver D and Oppermann M (2000) Tourism Management. John Wiley

Holloway JC. (2006) The Business of Tourism


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