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Chapter 3. Tourist Demand. Tourist Demand. by Pro. Jin Ciping Bachelor of Science in Tourism Management (H54050020) Nanchang University School of Economy and Management

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chapter 3
Chapter 3

Tourist Demand

tourist demand
Tourist Demand


Pro. Jin Ciping

Bachelor of Science in Tourism Management


Nanchang University

School of Economy and Management

Department of Tourism Management

learning outcomes
Learning outcomes
  • Recognize different forms of tourist demand
  • Understand the range of factors influencing tourism demand at the destination and generating areas





1 tourist demand


* Elements of Tourism Demand

* Factors impacting tourism demand

* Factors influencing demand from the

tourist generating area and the destination


introduction why do tourists travel
INTRODUCTIONWhy do tourists travel?

1. Researchers ask the questions when studying:

  • Tourist motivation
  • Tourist demand
  • Tourist supply

2. The question is one of challenges facing research

definition of tourist demand 2
Definition of tourist demand(2)
  • Pearce:

It is a relationship between individuals’ motivation to travel and their ability to do so.

  • It is a simple, but clear definition
2 elements of tourist demand

*Aggregate (Total) demand

*Suppressed demand

*No demand

aggregate demand 1
Aggregate demand(1)
  • It means effective or actual demand, referring to the precise number of tourists.
  • What is the precise number of tourists?

Tribe 1995:

“ effective demand refers to not only the desire for a tourist product but also the demand is real and supported by cash”.

aggregate demand 2
Aggregate demand(2)
  • It is that it is neither too much nor too small.
  • Too much will lead to the result that demand exceeds supply.
  • It will make people consider the retail discount.
suppressed demand 1
Suppressed demand(1)
  • Cooper 1998:

It can be subdivided into two----- potential demand and deferred (delay )demand.

  • Both the demands mean that the group of people don’t travel for some reason, but their feature of that reason is quite different
suppressed demand 2
Suppressed demand(2)

Potential demand group

  • This group can’t travel because of individual reasons --- no more income , or no longer holiday
  • They are likely to become actual demand group when circumstances allow.
suppressed demand 3
Suppressed demand(3)

Deferred demand group

The group can’t travel because of the supply:

﹡accommodation shortage

﹡transportation difficulties

﹡weather prevent people from raveling to

their chosen destination, etc.

no demand
No demand
  • Notevery one participates in tourism, maybe the people in this group don’t travel. The reasons are:

﹡a lack of money ( maybe just for their living)

﹡an unwillingness or

﹡inability to find the time necessary

  • Cost effectiveness shows this group become tourists.
no demand survey
No demand survey

Swarbrooke1999 took a survey of no demand group. The answers are several forms:

﹡ Yes

﹡ No


3 factors impacting tourist demand

Three major types of factors

*Economic determinants

*Social and psychological determinants

*Exogenous determinants

factors influencing demand from the tourist generating area
Factors influencing demand from the tourist generating area
  • Personal Income
  • Distribution of Income
  • Holiday Entitlements
  • Value of Currency /Exchange Rates
  • Government Tax Policies and Controls on Tourist Spending
  • Demographic variables
personal income 1
Personal income (1)

It depends on economic development of a city, region, or country. The faster the economy grows in a region, the more income a person can get.

personal income 2
Personal income(2)
  • The increase or decrease of personal income both influence the demand for tourism
  • The more income a person can get, the more kinds of products he or she is able to buy.
  • When economy is good, more demand, when economy is bad, less demand.
distribution of income 1
Distribution of income(1)
  • Within a tourist generating nation, how incomes are distributed is also likely to affect tourism demand.
  • Skewed (Unbalanced) income distribution is likely to limit the proportion of people who can afford to travel internationally.
distribution of income 2
Distribution of income(2)
  • where the people are all having a better life, a more equal and reasonable income distribution brings a chance of major people to the international travel.
  • In the wealthy developed countries, a more equal income distribution may result in a high overall level of tourism demand.
distribution of income 4
Distribution of income(4)

The National Statistics Office in Britain, 1999


Couldn’t afford a week holiday

6/10,Portugal in household


distribution of income 5
Distribution of income(5)
  • Holidaymaking is not evenly distributed across all social groups, or geographically, within countries. ( such as unemployment ).
  • All these make tourist activities inaccessible to everybody,, and every area.
holiday entitlements 1
Holiday entitlements(1)
  • Longer holiday is a promise to make people travel.
  • Since 1950’s, esp. 1980’s, the state governments, esp. the governments in the developed world made longer holiday lawful
holiday entitlements 2
Holiday entitlements(2)









120 days


holiday entitlements 3
Holiday entitlements(3)

Types of holidays:

  • Public holidays
  • Summer and winter holidays (in school)
  • Days off ( weekend)
  • Holiday for compensation ( in factory or company )
  • Traditional holidays ( France, etc.)
holiday entitlements 4
Holiday entitlements(4)

In China, a survey suggestion for the days to be holidays:

  • Women’ Day
  • The Mid-autumn Festival
  • The Dragon Boating Festival
value of currency exchange rates 1
Value of currency/ Exchange rates(1)
  • A destination’s exchange rate has a far reaching influence on tourism demand from a generating area.
  • In a word, international tourism is highly susceptible to exchange rate fluctuations that can alter the cost of a holiday considerably.
exchange rates 2
Exchange rates(2)

Crouch 1994: the impact of an unfavorable exchange rate includes:

﹡less travel abroad

﹡ a reduction in expenditure of length of stay (in

the destination)

﹡ changes in the method or length of travel time

﹡ a reduction in spending by business travelers

exchange rates 3
Exchange rates(3)

Sandbach 1999:

  • A movement in exchange rate of currency of at least 10% can’t impact tourist demand.
  • A movement in this change of 20% can seriously change of tourism demand.
exchange rates 4
Exchange rates(4)

What is the exchange rate of CNY to pound, Euro, or US dollars today?

  • £= pound
  • ¢= Euro
  • $= US dollar
  • CNY= Chinese yuan
government tax policies and controls on tourist spending 1
Government tax policies and controls on tourist spending (1)

1. Government can set policies to encourage or

discourage tourism:

﹡currency control

﹡currency export prohibition

﹡taxation of tourists and residents

﹡visa regulations (restricting the length of tourist’s

stay in a country )

government tax policies and controls on tourist spending 2
Government tax policies and controls on tourist spending (2)

2. Its fiscal and control policies can change tourist flow, and specific destinations gain or lose potential profitability

encouraging tourism 1
Encouraging tourism (1)
  • Japan advances tourism:

﹡relaxing currency exchange policy

﹡simple entry formation

  • China:

﹡relaxing currency exchange policy

﹡simple entry formation

﹡sign the international tourism with over 60


encouraging tourism 2
Encouraging tourism (2)

European Community states:

  • Shengen visa
  • Duty-free goods refund policy for foreigners (OP)
discouraging tourism 1
Discouraging tourism (1)

Some governments restrict their nationals to take

more currency the tourist destinations to prevent


  • In China now, a traveler can be allowed to exchange CNY to ¢2,400 based on his or her passport visa.
  • Now, still over 100 countries limit their nationals more currency to travel outside their countries.
discouraging tourism 2
Discouraging tourism (2)

In the 1980’s The UK government and US government allowed their nationals to bring back from the foreign destinations the goods from $500 to$100.Thay collected duty on the travelers who brought the goods that the price was higher than that.

discouraging tourism 3
Discouraging tourism (3)

Many governments have used tourism as a source of tax revenue.

Bull 1995: notes 3

﹡taxes on commercial tourism products

﹡taxes imposed on consumers in the act of


﹡user-pays charges

demographical variables 1
Demographical variables(1)

1. A range of demographical variables affect demand, Major factors:

  • Education
  • Age
  • New migrants

2. Demographical factors (e.g. ethnicity) are very important in the determination of patterns of tourism demand.

demographical variables 2 education
Demographical variables(2)Education

Education impacts decide the types of employment and the potential increase of income, which determine different types of tourist demand.

demographical variables 3 age
Demographical variables(3)Age
  • Age determines different demand of destinations.
  • The young and the old choose their own tourist destinations
demographical variables 4 new migrants
Demographical variables(4)New migrants
  • More people who moved out of their own communities periodically come back to visit their relatives and friends, which add type of tourist demand.
  • Travel patterns of Chinese New Zealanders is an example
explain the study case 1
Explain the study case (1)

1. What pattern of tourism demand does migration make? Why?

VFR (visiting friends and relatives) generates international tourism, esp. to China

2. Migration forms generates ethnic reunion travel ( market )

explain the study case 2
Explain the study case (2)

3. Ostrowski 1991( sociologist):

‘ethnic tourism is foreign travel to an ancestral home without the intention of permanent settlement, emigration or remigration, or undertaking temporary work’

4. China is a dominant destination for Chinese New Zealanders.---- Table 3.3 above

4 factors influencing demand at the tourist destination area
  • Price
  • Competition
  • Government controls at tourism destination
  • Demand for tourist products is very important to the survival of the tourism Industry. The recognition of barriers to demand leads the businessmen to price products against the competition and to engage in promotional efforts.
  • Factors influencing tourist demand are various, which the tourism industry can’t control with its own
topic discussion
Topic discussion
  • Outline the different types of demand
  • What are the major factors influencing tourist demand at the generating areas?