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THM 202 TOURISM ECONOMICS

THM 202 TOURISM ECONOMICS. Key Concepts. Tourism System Disciplines and study areas of tourism Tourism Industry / Tourism Sector Geographical elements Demand side and supply side definitions Interrelationship and classification Leisure and Recreation Tourists

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THM 202 TOURISM ECONOMICS

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  1. THM 202 TOURISM ECONOMICS

  2. Key Concepts • Tourism System • Disciplines and study areas of tourism • Tourism Industry / Tourism Sector • Geographical elements • Demand side and supply side definitions • Interrelationship and classification • Leisure and Recreation • Tourists • Leisure and Business Tourism • Destination, Transit Point/Stopover, • Tourist Generator

  3. THE SUBJECT OF TOURISM • Although tourism activity is a relatively new development in historical terms, its impact on economies, environments and societies is significant enough for the subject of tourism to deserve academic consideration.

  4. THE SUBJECT OF TOURISM • The popularity of tourism as a subject, and recognition of its importance by governmentshas accelerated the study of tourism. • Academic interest for tourism (increasing numbers of both journals and textbooks) leads professionalism in the tourism sector.

  5. ISSUES RELATED TO TOURISM AS AN AREA OF STUDY • The subject area is bedeviled (confused) by conceptual weakness and fuzziness. • The subject encompasses a number of diverse sectors and academic subjects. • Tourism suffers from a particularly weak set of data sources - in terms of both comparability and quality. • While traditional approaches have tended to reduce tourism a set of activities or transactions, more recent authors have stressed post-modern frameworks. • Tourism suffer from an image problem in academic circles.

  6. A TOURISM SYSTEM • It is important to provide an organizingframework for the study of tourism. • Individual disciplines view the activity of tourism as an application of their own ideas and concepts. • An alternative is to take a multidisciplinary, or even an interdisciplinaryapproach.

  7. A TOURISM SYSTEM • As an organizing framework, the model suggested in 1979 and updated in 1990 could be adopted. • This model nearly takes into account many of the issues identified above by considering the activities of tourists, allowing industry sectors to be located and providing the geographical element which is inherent(natural) to all travel.

  8. FIGURE 1: STUDY OF TOURISM AND CHOICE OF DISCIPLINE AND APPROACH 1: Sociology of tourism – Sociology 2: Economic implications of tourism – Economics 3: Tourism motivation – Psychology 4: Host-guest relationship – Anthropology 5: World without border – Political science 6: Geography of tourism – Geography 7: Design with nature – Ecology 8: Rural tourism – Agriculture 9: Recreation management – Parks and recreation 10: Tourism planning and development – Urban and regional planning 11: Marketing of tourism – Marketing 12: Tourism laws – Law 13: Management of tourism organizations – Business 14: Fundamentals of transportation – Transportation 15: Role of hospitality in tourism – Hotel and restaurant administration 16: Tourism education – Education O Tourism course O Department or discipline

  9. FIGURE 2: BASIC TOURISM SYSTEM Traveler- Generating Region Tourist Destination Region Departing travelers Transit route region Returningtravelers Environments: Human, socio-cultural, economical,technological, physical, political, legal, etc. Location of travelers, tourists, and of the travel and tourism industry

  10. There are three basic elements of T.System model: • Tourists • Geographical elements a)Traveler-generating region: The tourist searches for information, makes the booking and departs. b)Tourist destination region: The raison d’etre for tourism; the full impact of tourism is felt and planning and management strategies are implemented. c)Transit route region: It represents the short period of travel to reach the destination and includes the intermediate places visited en route. • Tourism industry: It includes the range of businesses and organizations involved in delivering the tourism product.

  11. FIGURE 3: GEOGRAPHICAL ELEMENTS IN A TOURISM SYSTEM WITH TWO DESTINATIONS TDR2 TR3 TGR TR2 TDR1 TR1 TGR: Traveler-generating region TR: Transit route TDR: Tourist destination region

  12. Tourism System Model Each of the element in tourism system interacts, not only to deliver the tourism product, but also in terms of transactions and impacts, and the differing contexts within which tourism occurs.Demand for tourism industry in the generating region is inherently(naturally) volatile, seasonal and irrational.This demand is satisfied by a destination region where supply is fragmented and inflexible.

  13. ADVANTAGES OF SYSTEM MODEL • General applicability and simplicity • The ability to incorporate interdisciplinary approaches to tourism • The possibility to use of the model at any scale or level of generalization • Flexibility to allow incorporation of different forms of tourism • Demonstrating that all the elements of tourism are related and interact

  14. Working definitions in travel and tourism • Tourism can be thought as a whole range of individuals, businesses, organizations and places which combine in some way to deliver a travel experience. • Tourism is a multidimensional, multifaceted activity which touches many lives and many different economic activities.

  15. Working definitions in travel and tourism • Therefore, it is difficult to define. It is a reflection of the complexity of tourism, but it is also indicative of its immaturity in the field of study. • Definitions of tourism can be thought of as either: • Demand-side definitions; or • Supply-side definitions.

  16. DEMAND-SIDE DEFINITIONS OF TOURISM From a conceptual point of view; tourism can be defined as: “The activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes.”

  17. DEMAND-SIDE DEFINITIONS OF TOURISM • This definition conveys the essential nature of tourism: • Tourism arises out of a movement of people to, and their stay in, various places and destinations. • There are two elements in tourism –thejourneyto the destination and the stay (including activities) at the destination. • The journey and stay take place outside the usual environment or normal place of residence and work.

  18. DEMAND-SIDE DEFINITIONS OF TOURISM • The movement to destination is temporary and short term in character –the intention is to return within a few days, weeks or months. • Destinations are visited for purposes other than taking up permanent residence or employment in the places visited

  19. DEMAND-SIDE DEFINITIONS OF TOURISM From a technical point of view; attempts to define tourism have been led by the need to isolate tourism trips from other forms of travel for statistical purposes. These technical definitions demand that an activity has to pass certain tests before it counts as tourism.

  20. DEMAND-SIDE DEFINITIONS OF TOURISM • Such tests include the following: • Minimum length of stay – one night (visitors who do not stay overnight are termed same day visitors or excursionists). • Maximum length of stay – one year. • Strict purpose of visit categories. • A distance consideration is sometimes included on the ground of delineating the term “usual environment” – the WTO recommendation is 160kilometers.

  21. SUPPLY-SIDE DEFINITIONS OF TOURISM There are two basic approaches to defining the tourism sector – the conceptual or descriptive and the technical. From the conceptual point of view, authors suggest: “The tourist industry consists of all those firms, organizations and facilities which are intended to serve the specific needs and wants of tourists.”

  22. SUPPLY-SIDE DEFINITIONS OF TOURISM A major problem concerning technical supply-side definitions is the fact that there is a spectrum of tourism businesses, from those who are wholly serving tourists to those who also serve local residents and other markets.

  23. SUPPLY-SIDE DEFINITIONS OF TOURISM • One approach to the problem is to classify businesses into two types: • Tier 1: Businesses that would not be able to survive without tourism. • Tier 2: Businesses that could survive without tourism, but in a diminished form. Percentage of revenue from tourists: ~ 10-90% ~0-100% Examples: Restaurants, taxis, local attractions Airlines, hotels, national parks Tier 2 Tier 1

  24. SUPPLY-SIDE DEFINITIONS OF TOURISM • This approach is consistent with other industrial sectors, allows the size of tourism industry to be gauged using standard industrial classifications (SICs). • Because there is no SIC for tourism, it is an important development. • The WTO has taken this further by developing a Standard International Classification of Tourism Activities (SICTA). • The SICTA adopts the idea of part involvement with tourism or total dedication to tourism. • ISIC Classification.pdf

  25. INTERRELATIONSHIPS AND CLASSIFICATIONS Not only are the elements of tourism all interlinked, but also tourism has close relationships with other activities and concepts. For example most tourism throughout the world is leisure activity and it is important to locate tourism in the spectrum of leisure activities.

  26. INTERRELATIONSHIPS AND CLASSIFICATIONS • Leisure can be defined as a combined measure of time and attitude of mind to create periods of time when other obligations are at a minimum. • Recreationcan be defined as the pursuits engaged in during leisure time and an activity spectrum can be identified with, at one end the scale, recreation around the home, through to tourism where an overnight stay is involved.

  27. FIGURE 5: LEISURE, RECREATION AND TOURISM Leisure: The time available to an individual when work, sleep and other basic needs have been met. Recreation: Pursuit engaged upon during leisure time Home-based recreation Daily leisure Day trips Tourism Business travel Home Local Regional National International

  28. TOURISTS In practice tourists represent a heterogeneous, not a homogeneous, group with different personalities, demographics and experiences. Tourists can be classified in two basic ways which relate to the nature of their trip:

  29. TOURISTS • Domestic and international tourists. Domestic tourism refers to travel by residents within their country of residence. There are rarely currency, language or visa implications, and domestic tourism is more difficult to measure than international tourism. International tourism involves travel outside the country of residence and there may be currency, language and visa implications.

  30. TOURISTS • 2. Purpose of visit category. Conventionally three categories are used: • Leisure and recreation – including holiday, sports and cultural tourism and visiting friends and relatives (VFR); • Other tourism purposes – including study and health tourism; • Business and professional – including meetings, conferences, missions, incentive and business tourism. • These categories are used for statistical purposes and they are also useful for the marketing of tourism.

  31. TOURISTS For statistical purposes, the most widely accepted baseline definitions for international visitors were first agreed upon by the United Nations Conference on International Travel and Tourism, in Rome in 1963. Visitors were divided into 2 categories: Tourists–temporaryvisitors to country staying at least 24 hours, for the purposes of leisure or business Excursionists–temporaryvisitors staying in a country less than 24 hours, for the same purposes, but excluding transit passengers.

  32. TOURISTS • Leisure tourism is normally held to travel for recreation or holiday, sport, health, religion or study. The majority of the world's tourists are vacationers, but one could still include here visiting sports teams or Muslims on pilgrimage to Mecca. • Business tourism can include businessmen traveling, presumably on expenses, conventiondelegates. Business travelers are generally less numerous than vacationers, but as will be seen later, usually spend more per head.

  33. TOURISTS • Most countries include an upper limit length of stay, such as three months, on their definitions of 'international tourist', and this may be related to the length of tourist visas or other permits granted. • It is also possible to use most of the above framework to define 'domestic tourists', although there is a problem in deciding how far a person must travel away from home to be regarded as a tourist or an excursionist.

  34. TOURISTS Adestination may be a country, region or city which visitors travel as their main object. They may only visit a single destination, or travel on a multi-destination tour. A transit pointor a stopover is a point which usually for transport or connection reasons, may be visited, but not as a main object of travel. The country, region or city where visitors normally live is often known as a generator or generating area; this will be the market.

  35. ...End of chapter slides

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