Demand: Propensity

Predisposition to travel. Psycho-graphic: Motivation, interact, hobbies Demographics: Socioeconomic status Marketing effectiveness

Demand: Resistance

Economic distance: time and cost involved in travel Cultural distance + = Stronger resistant or Cost of services + Quality of services + Seasonality ( High season, lower resistance? )

Why measure demand?

To plan for: Revenue Utilization of: (Resources) Very critical to know demand Roads and transportation associated facilities Accommodation establishment Food and beverage establishment Attractions, etc.

How do you measure demand?

How many visitors arrivals? Most popular way to measure demand public vs. private transportation mode How long will they stay (visitors - nights) (and in what types of accommodation)?

How do you measure demand 2?

How much money will they spend? This says more than arrivals Most difficult data to collect Surveys Sales and taxes

Tourism Demand

What?

Forecasting Projection Estimate of future level of demand Mostly is about how to measure arrivals Why? Planning and budgeting purposes Forecasting: The prediction of future states from knowledge of current and past patterns of

Definition

observations.

Some view forecasting Attempt to quantify demand in future time period. as The demand could be expressed in: Hotel revenue Cruise passengers Room night sales Human resource needs Food consumption The Need for Forecasting Forecasts are needed for marketing, production, and financial planning.

In the tourism industry, like most other service sectors, the need to forecast accurately is especially acute because of the perishable nature of the product.

Quantitative Techniques

1. Time Series Models: e.g. Trend Analysis Based upon the premise that what has happened in the past has some relevance to the future. Forecasts are obtained by analyzing trends in the data, and extrapolating these into the future. Independent variable: TIME Dependent variable: tourist arrivals, restaurant diners, theme park guests, etc. A trend line is established, and then is projected out to some future period.

Quantitative Techniques

2. Regression Analysis: How they are linked related Exploring the relationship (not causality) of one variable and other factors. For example, the demand for air travel will be a function of: The travelers' level of income The cost of the destination critical The cost of travel in alternative modes of transportation

Qualitative Techniques

These techniques are used when: Data are insufficient or unreliable.

("Educated guesses") It is impossible to construct a numerical model. Time is insufficient to initiate and implement a quantitative analysis Qualitative Executive Opinion: usually based on experience.

Techniques

Delphi Studies (method): Round-up of expert opinions on the likelihood of a possible future. (Picture as a future)

Scenario Analysis: Outline of a situation which could be developed given the known facts and trends. (Developing Plan)