slide 3.1 cooper et al: tourism: principles and practice, 3e pearson education limited 2005, ©...

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Cooper et al: Tourism: Principles and Practice, 3e Pearson Education Limited 2005, © retained by authors

Chapter 3Measuring Demand for Tourism

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Learning Outcomes

In this lecture, we review the key issues associated with the measurement of tourism demand and the management of tourism information, to provide you with:

• An understanding of the reasons why we measure both international and domestic demand for tourism;

• A knowledge of the main methods used to measure tourism demand;

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Learning Outcomes

• A review of what is measured in respect of tourism activity;

• An appreciation of the difficulties of researching tourism markets and why tourism statistics must be interpreted with caution; and

• An awareness of the research process and how it might best be implemented in tourism.

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Why Measure InternationalTourism Demand?

• Movements of tourists

• Profile of tourists

• Balance of payments

• Travel Account

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Definitions• In collecting any information on the movement of

travellers, it is essential to decide who is to be included.

• Definitions should be unambiguous(unclear) and easy to understand.

• Definitions should normally be consistent with established usage of the words concerned.

• Definitions should, as far as is reasonably possible, facilitate measurement.

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FigureFigure.. Classification of Classification of international visitorsinternational visitors

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Definitions (cont’d)

Figure 3.1 Classification of international visitors (cont’d)

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FIGURE: LEISURE, RECREATION AND TOURISM

Leisure time

The recreation activity continuum

Work time

Geographical range

Leisure: The time available to an individual when work, sleep and other basic needs have been met.

Recreation: Pursuit engaged upon during leisure timeRecreation: Pursuit engaged upon during leisure time

Home-based Home-based recreationrecreation

DailyDailyleisureleisure TourismTourismDayDay

tripstrips

Home RegionalLocal InternationalNational

Businesstravel

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Key TermsKey Terms• A visitor is a traveler who is included in tourism

statistics, based on his or her purpose of visit, which includes holidays, visiting friends and relatives(VFR), and business.

• A tourist is a visitor who spends at least one night in the country visited.

• A same-day visitor is a visitor who does not spend the night in a collective or private accommodation in the country visited.

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What is Measured – and How?

• Volume statistics

• Value statistics

• Profile statistics

• Census on entry

• Household surveys

• Expenditure surveys

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Measuring Domestic TourismMeasuring Domestic Tourism

This is a difficult and less common activity because:

• No border is crossed• Serviced accommodation is les commonly used

BUT its measurement is used for;

1.1. EconomicEconomic contribution

2.2. Promotion and marketingPromotion and marketing

3.3. Regional developmentRegional development

4.4. Social policiesSocial policies

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Domestic Tourism DataDomestic Tourism DataCollection MethodsCollection Methods

• Household surveys

• En route(on the road) surveys

• Destination surveys

• Supplier surveys

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Some Words of CautionSome Words of Caution

• Tourism statistics are normally estimates, often derived from sample surveys. As such, they are liable to various forms of error, many of which are impossible to quantify.

• For measurements which result from sample surveys, in general the smaller the sample size, the greater is the probable error.

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Some Words of Caution

• Even though the sample size for data relating to a region or country may give rise to acceptable levels of error, analysis of a subset of the data pertaining(related) to a smaller area or region may not be feasible owing to the much reduced sample size.

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Some Words of Caution (cont’dSome Words of Caution (cont’d)• Sample sizeSample size is not everything! The true random is not everything! The true random

sampling of tourists who are, by their very nature, sampling of tourists who are, by their very nature, on the move is not normally possible. A on the move is not normally possible. A sample sample has has to be to be formally and carefully constructedformally and carefully constructed..

• Where methodology in collecting data changes Where methodology in collecting data changes ((even when it is for the bettereven when it is for the better), it is ), it is dangerous to dangerous to compare results.compare results.

• There are serious problems involved in attempting There are serious problems involved in attempting either to compare or to combine figures collected either to compare or to combine figures collected by by different countries or organizationsdifferent countries or organizations.

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But the Uses of TourismBut the Uses of Tourism Statistics are ManyStatistics are Many

• They often provide valuable trend data, where information is produced over a number of time periods.

• They contribute towards a database which may influence decision making, particularly in the areas of marketingmarketing, , and planning and development.and planning and development.

• They enable the effects of decisions or changes to be monitored.

• They enable current data to be viewed in context.

• They provide a means of making forecastsa means of making forecasts.

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And so is the Value of ResearchTourism research allows us to:

• Provide information for decision making;• Keep an organisation in touch with its market;• Identify new markets;• Monitor the performance of certain aspects of a

business;• Draw attention to specific problems;• Monitor customer reaction to a service or facility;• Reduce waste; and• Demonstrate a caring attitude to the customer.

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The Research Process

Figure 3.3 The research process

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Survey Approaches (1)Survey Approaches (1)

Personal Interview

AdvantagesAdvantages:• Initial interest can be aroused(warn) and

visitors may then spend longer at the attraction.

• Complex questioning is possible on, say, visitors' likes and dislikes at the attraction.

• Visual aids and showcards can be used.• Flexibility allows scheduling to be varied

according to say the weather.

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• Shows a caring attitude to the visitors at the attraction.

• Visitors are usually happy to cooperate.Disadvantages:Disadvantages:• Time consuming for interviewer and

visitor.• Administratively difficult scheduling

interviewers etc.• It can be an expensive way to collect

data as interviewers can be costly.

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Survey Approaches (2)Telephone InterviewAdvantages:• Close supervision and control is possible.• Access is easy, call-backs are possible if the

person who visited the attraction is not available.

• Response rates are usually good.• Many interviews are possible in a given

time period.

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Telephone Interview

Disadvantages:Disadvantages:• Visual aids and complex tasks are not

possible.• Only verbal communication is

possible.• Interview is short (people hang up).• For attraction surveys it relies on recall

and the immediacy of the visit is lost.

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Postal SurveyPostal SurveyAdvantages:• Low cost.• No intermediary, so answers are reliable and

visitors would not answer in a certain way to 'please' the interviewer.

• Superior for sensitive questions (confidentiality must be stressed) on say, satisfaction levels with the visit.

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Postal SurveyPostal Survey

Disadvantages:Disadvantages:• Many variables are not controlled, since there is

no interviewer.• Mailing list is needed of visitors to the

attraction.• Response rates are low.• Bias due to non-response.• Detailed or long questionnaires reduce response.

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Survey Approaches (4)

Internet Survey

Advantages

• Substantial cost savings over other survey methods.

• No cost to the respondent in replying.

• Response tends to be very quick.

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Internet Survey

• Instant feedback of undeliverable mail is useful in replacing respondents.

• Useful as a supplement to other survey methods – say, a follow up on an interview at the attraction.

• Good for surveying specific populations such as teachers who have taken groups to the attraction.

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Survey Approaches (4) (cont’d)Survey Approaches (4) (cont’d)

Disadvantages

• Sample bias due to the type of respondent – random sampling is virtually impossiblevirtually impossible.

• Evidence on response rates is contradictorycontradictory.

• Needs high level of expertiseexpertise to construct the survey.

• Ethical issues Ethical issues of sending unsolicited email.

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Managing Tourism KnowledgeManaging Tourism Knowledge (1)

• There is no doubt that in today's 'knowledge economy', the role of information and knowledge is increasingly valued.

• Tourism has been slow to adapt to this new way of thinking and reluctant to recognise knowledge as a key competitive tool for the private sector and a determinant of economic growth for governments.

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Managing Tourism KnowledgeManaging Tourism Knowledge (1)

• One approach is to ensure the effective management of the massive volume of tourism information and statistics that is collected and which has been outlined in this chapter. The tool that is used for this management is known as 'knowledge management' (KM).

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Managing Tourism Knowledge (2)

• The concept of knowledge management (KM) arose in the 1980s and is defined as:

• “the encouragement of people to share knowledge and ideas to create value-adding products and services”.

• Essentially KM is a process by which research information and statistics are transformed into capabilities for an economic sector such as tourism.

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• By adopting a KM approach organisations will increase their opportunity to become more profitable, efficient and competitive; operate more intelligently in the market place; and create learning, networked organisations.

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Figure 3.4 The knowledge value chainSource: Weggeman, 1997

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Managing Tourism Knowledge (4)Managing Tourism Knowledge (4)

Tourism has not adopted a KM approach because:

• Tourism has traditionally been service and product based and most tourism enterprises have been either unaware of, or slow to take up, the opportunities on offer from tourism research.

• The tourism sector is dominated by small-to-medium sized enterprises, which are traditionally research averse(opposite).

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• Tourism research has suffered from a lack of vision both by the bodies that provide money for research and surveys and the tourism industry itself.

• There is a perception that tourism is about play, recreation and having a good time.

• Tourism information has not been used effectively, and there is a reluctance to share information.

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Information overload?Information overload?• Globalisation has exposed tourism organisations

to a wide array(sequence) of organisations and competitors;

• The memory and processing power of information technology allied to the speed of communication of new media;

• The increased professionalism of the tourism sector means that information is sought; and

• Changing organisational forms are creating freelance(writer) employees and knowledge workers.

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But, knowledge has interesting characteristicsBut, knowledge has interesting characteristics::• It can be used without being consumed;• One piece of knowledge can have many

owners;• One piece of knowledge can be in more than

one place at any point in time;• The cost of knowledge is heavily front loaded;

and• Knowledge is unpredictable.

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KM and Singapore Airlines• Singapore Airlines have adopted the principles of a KM

framework in their business operations:• Managing booking information – technology is an

enabling tool for KM. Singapore Airlines have developed a sophisticated yield management and demand forecasting tool that allows them to sell seats on the same flight to different market segments, closely matching supply and demand.

• Sourcing information – KM identifies a range of sources of information for an organisation, including employees, customers and external sources (such as the competition):

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KM and Singapore Airlines (cont’d)

– The company sources ideas and information from its employees by newsletters, networking meetings and a 'staff ideas action scheme'.

– Singapore Airlines has used market research to gauge customer attitudes to service levels. This information is then factored into the operation of the company. In addition, market research is carried out with 'knowledgeable customers' as well as the more traditional approaches of feedback forms and in-flight surveys.

– Finally, Singapore Airlines regularly benchmarks against other service organisations – not just airlines – but also banks and other service delivery groups.

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Chapter end questions

• Why is domestic tourism demand difficult to measure? Explain in brief.

• Draft a checklist of the differences between face to face and telephone interwieving

• Design a brief for a market survey for a tourist attraction to elicit (learn) both to current profile of visitors and their opinions of the attraction.

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