11 tourism demand trends

Monday, April 10, 2023 Dr. Nimit Chowdhary

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Tourism demand trends

Dr. Nimit Chowdhary Professor

Indian Institute of Tourism and Travel Management


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Changing face of travel consumer

• More affluent, measured in disposable income per capita, ownership of property and household facilities.

• Better educated and more interested in continuing education.

• More healthy and interested in more active pursuits.

• Older, with a particular shift in the number and attitudes of the more active over-fifties.


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• More leisured in terms of hours of work and holiday entitlement, having regard also to early retirement.

• More traveled, for work and business as well as for holidays and leisure, increasing numbers with frequent international travel experience.

• More exposed to the media and information generally


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• More computer literate with ownership of personal computers (PCs) and access to internet growing exponentially.

• More heterogeneous and individualistic in their demands and expectations.

• More culturally diverse in terms of ethnic origin as well as their range of lifestyle choices.


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Determinants of tourism demand

• Economic factors and comparative prices• Demographic, including education• Geographic• Socio-cultural attitudes to tourism• Mobility• Government/ regulatory• Media communications• Information and communication

technology


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Economic factors

• 30 major countries of origin accounted for over 90% of world traveling spending

• Top 10 alone account for 2/3rd of spending and nights.

• These are countries with highest per capita income.

• Developed and growing economies also sustain business travel and trips (more than 50%)


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Economic factors

• Relationship between changes in real disposable incomes and volume of trips and expenditure away from home.

• Increase in real incomes since 1990s has led to increase in expenditure on travel and tourism (income elasticity) .

• China and India are fast emerging as tourism markets and suppliers owing to rapid economic growth


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Economic factors

• Comparative prices are a major determinant of volume of demand.

• Price is cost to customers in terms of money, time and effort.

• Spending will depend upon comparative price and disposable income of tourist.

• East Asia, China and BRIC are therefore increasingly attracting more tourists.


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Demographic factors

• Developed world- one- and two- person household, late marriages, with fewer children– Divorce, single parent, – Small households means more households – Affluent old age people (26% Europeans are

over 50 years of age)

• Developing world- greater women involvement, two-income households, more disposable incomes


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Demographic factors

• Rise in life expectancy– Greater proportion of older population– New demand for leisure and travel– Health care and nursing– Quality of life

• Structural shifts in communities– Development of new towns and cities

• Education- higher the education, more the amount of travel


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Geographic factors

• Climatic and scenic attractions• Willingness and affordability to demand

destination of choice.• Urban areas generate more tourism

compared to rural areas- for multiple reasons

• Geographical pockets of heritage, culture and arts offer tourism products

• Eco-tourism, and ecological constructs as tourism products


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Social factors

• Increased no. of women in work force

• Working women and resulting two-income households

• Quality of life

• International mobility leads to more sophisticated consumer tastes

• Greater complexity of life

• Increased competition in life


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Changing attitudes

• Attitudes towards tourism are a subset of wider view on the desired quality of life and how to achieve it.

Examples of attitudes in America and Europe

• Therapeutic value in lying on the beech and sun

• Holidays are ‘rights’ and necessities for relieving stress rather than luxuries


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Changing attitudes

Examples of attitudes in America and Europe

• Longer holiday entitlement in twentieth century has lead to consumers taking several holidays in a year

• Scandinavia & N. Europe- people having a second home

• That holiday products should be environmentally sustainable


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Personal mobility factor

• Superior roads and infrastructure• More people having cars and four wheelers• Most hotels, nearly all self-catering

establishments, restaurants, and great majority of visitor attractions and entertainment in America and Europe are dependent on travelers by car

• Congestion has increased and governments are favoring public transport


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Government/ regulatory framework

All governments impose laws and regulations to safeguard health and safety of their populations and to control the use of land and buildings; most impose penalties for non-compliance


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Governments intervene:• To ensure fair competition between

supplier- check monopolistic tendencies• To ensure that customers have choices

and rights against suppliers• To influence such market patterns as

governments control- timing of holiday• To ensure that proposed projects do not

damage the environment


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Politico-legal changes:

• Governments creating infrastructure for services (led by EU)

• Internationalization

• Governments consciously (rather aggressively) promoting tourism


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Transport regulation

• Air transport– What routes can be flown

– Which Airline can fly, number of flights, slots available at airports, the capacity of seats on routes, prices that can be charged

• Bi-lateral agreements between countries

• Asian highway project

• Train and rail link with Pakistan

• Rights to sell ‘duty free’ items


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Tour operations and hotels• Regulatory framework

• Licensing of tour operators and hotels

• Licensing for bar

• Example of Bhutan

• Taxation

• Control and grading of hotels


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• Regulation for the environment

• CRS


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Information and communication technology

• Increasing promotion and distribution of products on www.

• Multimedia information provision in customers’ homes enhancing promotional possibilities

• Switch to direct marketing, reducing the traditional role of travel intermediaries

• Customer database development and its role in marketing information systems


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Information and communication technology

• Power to develop customized products for consumers

• Relationship marketing with repeat buyers and other targeted customers/ stakeholders

• Creation of virtual enterprises- “Make my trip”, networks of micro-businesses

• Major opportunities for access to international markets at low costs


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Travel propensity

Low propensity characteristics

High propensity characteristics

• Low income per household

• High income per household

• Single parent household

• Two parents (employed) household

• Rural-community dweller

• Large-city dweller

• Educated to minimum age

• Degree or other higher education level


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Travel propensity

Low propensity characteristics

High propensity characteristics

• Older people (80+) • Young people and ‘empty nesters’

• No access to private transport

• Two or more cars in the household

• Three or less weeks’ paid holiday

• Six or more weeks’ paid holiday

• No access to internet

• Access at work and at home