critical issue in tourism jean-louis caccomo economist at perpignan via domitia university
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Critical Issue in Tourism
Jean-Louis CACCOMO
Economist at Perpignan Via Domitia University
PART I. Economics and Tourism
Basic economic tools and concepts
Tourism and environment
Political and institutional stability
Economic growthClimate and ecological environment
Tourism potential
Question : Comment on the different links between tourism and environment
Structural conditions
Tourism depends on economic development and open, free societies
These conditions are very localized but diffuse with globalization.
Tourism as a market
Free time
Tourism and growth
Income
Productivity
Economic growth Tourism demand
Power oftravelling
The market analysis
The main laws (supply, demand, equilibrium)
The definition of shocks Exercises : illustrate different kind of
possible shock with the following table.
Market shock in international tourism : make the corresponding graph.
Nature of shock
Economic effect
Example
Positive supply shock
P – and Q + Technological innovation
Positive demand shock
P + and Q + Fashion, tastes
Negative supply shock
P + and Q - Taxes, legal restriction
Negative demand shock
P – and Q - Terrorism, war
Example of adaptation process
Technologicalinnovation
Decreasingprice
Increasingquantity
1
2
1. Causality (like the demand law, or the supply law)2. Correlation: price and quantity are both affected by technological shock3. Question : give the difference between the demand law or the supply lawAnd the equilibrium law
The Price effect
The price-elasticity measure the sensitivity of supply or demand (Q) to a change in price (P).
Price (P), receipt (R) and elasticity ()
The income effect
The income elasticity of tourism demand
- Definition- Give the mathematical formulation- the distinction between primary/luxury good :
for luxury good, income elasticity of demand exceed 1.
Question : In which category do you range tourism goods & services ?
Real world demand elasticities in international tourism
International travel is a luxury good with income elasticities of demand exceeding 1.
Consumers appear to be more price sensitive to the cost transportation and currency change rather to destination price.
Demand for international travel is generally not very responsive to the promotional or marketing expenditures of national tourist offices.
The Maslow pyramid (1954)
The basic concept is that the higher needs (tourism) in this hierarchy only come into focus once all the needs that are lower down in the pyramid are mainly or entirely satisfied.
Growth forces create upward movement in the hierarchy.
How does the Maslow pyramid illustrates the connection between income and demand ?
Exercises
Exercises 1 and 2
Public and private interactions in tourism supply
Tourism goods& services
Private components(tourism strategy)
Public components(tourism policy)
Transportation
Hospitality
entertainment & services
Heritage, climate
Institutions
Infrastructure
Generic information
Question: Describe the objective of each area
Dynamical interactions
The state producespublic
Good & services
Firms combinespublic input with
privates inputTo create wealth
Wealth increasing
Public sector Private sector
TaxesRevenue
References
Bull A. [1995] The Economics of travel and tourism. Longman Australia Ltd.
Caccomo J.L., Solonandrasana B. [2006] L’innovation dans l’industrie touristique. Deuxième édition, L’Harmattan, Paris.
Caccomo J.L. [2005] L’épopée de l’innovation, L’Harmattan, Paris.
Crouch G.I. [1995] « A meta-Analysis of tourism demand », Annals of Tourism Research, vol. 22,103-118.
Medlik S. [1995] Managing Tourism. Butterworth-Heinemann Ltd, Oxford.
Pizam A., Mansfeld Y. [1999] Consumer behaviour in travel and tourism. The Haworth Hospitality Press, New York and London.
Tisdell C. [2000] The Economics of Tourism. Edward Elgar Publishing Limited, Massachusetts.
Tribe J. [1995] The Economics of Leisure and tourism. Butterworth-Heinemann Ltd, Oxford.
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