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There are numerous factors influencing demand from the tourist generating area. These are in terms of economic determinants, social determinants and political determinants.
“An individual may be motivated to travel, the ability to do so will depend on a
number of factors related to both the individual and the supply environment”. (R.K
To begin with, economic determinant includes personal income. Distribution of income and value of currency. Personal income is the availability of the finance. This is the most evident influencing tourism demand. Incomes and expenditures are closely linked and as a result of that when price increases, demand decreases and income increases, demand decreases and income increases, the price remain the same, then demand increases. Distribution of income within a tourist generating region is likely to affect tourism demand and supply. For example, twisted income distribution in India where there are relatively few wealthy and many poor households, is likely to limit the proportion of people who can afford to travel internationally. This people can be famous film stars who go on a holiday.
Furthermore, exchange rates have a far accomplishment influence on tourism demand from generating area and international tourism. It is highly vulnerable to exchange rate variations that vary the cost of a holiday significantly. “It is widely acknowledged that both domestic and international tourism make an ‘economic contribution’ to a destination, that tourism has positive and negative ‘economic impacts’ and that it brings ‘benefits and costs’ to a destination”.( Dwyer L, Forsyth P, and Dwyer ,W .2010). Economical options are often preferred while dealing with cost of travel as more money is needed at the cost of product. Before an individual decides to travel or gets a reason to travel the very first thing to be considered is the money. This will enhance the success of the journey. For example, people will want to enjoy to their optimal level, therefore will chose luxury products which comes at a higher cost. these higher costs are often conversed through competitive prices as supply is high , and sometimes exchange rates supports and as a result tourist from Australia, New Zealand, America get more on their dollar value which simply means the Fiji dollar diminishes, and they have more money to spend in Fiji if Fiji becomes their tourist destination region. Thus, it leads to a change in tourism demand and supply.
Similarly, social element also influences tourism demand. This includes demographic variable. For example, the age structure, a 60 year man would prefer a very discreet area where he can be alone by himself from all the noise and when compared to a 15 year old kid who want to enjoy his holiday with lots of fun and will want to have a blast. Thus, there is a gap which often applies on the type of travel product people chose and the behaviour and the surrounding nature of an individual have a major impact on the demand. The impact of education level can also be a determined of both employment natures and income earning potential for this type of practice. The stage in the family life cycle has a bearing on the availability of time and disposable income available for tourism. Holiday entitlements leads increase in the demand since holidays are being paid and every individual wants to relax and have some time off from their daily life. There are other factor such as home ownership, occupation, ethnic group, crisis, and threats such as terrorism , epidemic diseases and natural disasters such as the tsunami which hit japan recently and it leads t o decrease in tourism demand since people will now try to restructure their houses and use the money which has been saved for a holiday.
Additionally, political elements such as government tax policies and controls on tourist spending influence the tourism demand and supply. There are approaches taken by government to influence demand to a great extent. For example, exchange control, currency export, prohibition, taxation, visa regulations and many more. Many governments have used tourism as a source of tax revenue because when tourist comes to Fiji they are given the tourist price and not the local price and in this way certain percentage of tax being paid goes to government as tax revenue.
Subsequently, the demand at a tourist destination is influenced by economic and political factors. The dominant among these are the “price” of the tourism product and services and its quality. In today’s world every individual is going for cheaper products since the cost of living is very high. In a tourism industry the suppliers have to be very well with the of price their goods but due to price competition and oligopoly companies operating in countries it is required to stay in the price limit. According to Burkart & Medik, 1981, tourism suppliers, such as in the accommodation and transport sectors may well price their goods and services independently, but a close watch on the behaviour of their competitors is clearly necessary. Thus, when there is a lot of competition the price goes down and the customers benefit. In order to control the price of goods and services, the government intervenes in between and gives a fixed price for these companies to operate.
Equally as demand increases it influence the supply level of the tourism industry. This factor is known as the Geographic factor .These factors are mainly seasonality and attraction. Tourism demand goes up and down throughout the year.
“This temporal peaking pattern is called seasonality”. (Norbert Vanhove 2005)”.
The supply is influenced as the seasonal pattern affects the occupancy rate of accommodation. For example, during the peak season, the accommodation is almost full meaning that there is not enough to cater for that season which results in the rise of price. On the other hand, since tourism supply is perishable at off peak season business is lost. In tourism regions, seasonality leads to seasonal employment, and the correlative seasonal unemployment causes welfare problems. Attraction is also one of the key supply elements in the tourism sector.
“Without attractions there is no tourism”. (Vanhove, N)
Primary natural attractions, man-made and purpose built attractions are the elements of ‘attractions’. Good attraction makes a particular place famous which influences supply. For example, Fiji is very famous for white sandy beaches and known as a paradise and hence, a lot of tourists visit Fiji just because of these attractions. The magic of Fiji’s natural beauty is matched only by the world-famous friendliness of its people, and their diverse, captivating culture. Thus, geographic factor also influences the supply in terms of seasonal employment and other attractions.
In addition destination factors are another factor which influences the supply on tourism regions. There are many elements of the destination factors, but the main aspects of destination factors are ‘quality of the products’ and ‘technology’. The quality of the products provides the main image of a particular company. According to Peter Keller &Thomas Beiger, people who has less leisure time has more money therefore prefer expensive high-quality products and services which are to be developed personally and in a timesaving manner.
Media also plays an important part while promoting the products for particular company. For example, at the tourist generating region, rich people looks at the advertisements on the internet and prefer for the high quality expensive product but when reaches the destination region they do not find the products to their expectations. The raise in technology also plays a major part in the supply influence of the tourist regions. Its affluences job which relates to less man power, leads to savings for a particular company. For example, computer reservations systems which replaced manual bookings where by cost and time were saved. On another hand, when high technology advertisements are created in such a way and it leads maximum attraction. For example, three dimensional videos are shot for room views, beaches, corals, mountains to maximise attraction. Thus, technology and media influences the supply of the tourism industry.
To conclude, it is indeed true that where there is a demand, there is supply, and hence sometimes supply do create demand. These are always determined by some factors which influence the demand and supply of the tourism industry. Some of these factors are individual preference, economic factor and others. The supply is also determined by geographic factor, technology, and media. This is very much evident in the tourism industry. Thus, according to Oliver Goldsmith, “Life is a journey that must be traveled no matter how bad the roads and accommodations”.
(Word Limit: Approximately 1234 words)
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