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Lesson 5 : Tourism Economics

By: Ms. Jinky Rose Gino-gino

Tourism demand & supply

Tourism Demand

Tourism Supply

*Number of person who travel or wish to travel & use tourist facilities & services at places away from their places of work/ residence. ( Cooper, 1993)

*Key elements of tourism industry by the host governments & destinations.

6 Components of Tourism By: Edward Innskeep

Components of tourism
By: Edward Innskeep

Attractions & Activities

1. Attractions & Activities

*Natural *Historical *Cultural *Events *Recreation or Special Interest *Entertainment Attractions

* Golf, Swimming, Tennis, Hiking, Biking, Snow Sports, Sight-seeing, Mountaineering, Spelunking, Bird watching, Whale watching, Scuba diving.

Attractions & Activities


2. Transportation

* Types *Passenger *Tourist

* Modes -Land -Water - Air


3. Infrastructure
}Water supply }Electric power }Proper waste disposal }Telecommunications }Roads }Airports }Seaports


4. Accommodations
*Hotel *Motel * Bed & Breakfast *Hostels * Apartelles *Resorts *Home stay * Campgrounds

Tourist Facilities & Services

5.Other Tourist Facilities & Services

*F&B *Postal Services *Medical Facilities *Banking & Money Exchange Services * Personal Services * Retail Shops * Souvenirs & Crafts

Institutional Elements

6. Institutional Elements

* Education & training of persons

working in tourism industry *Government & Tourism Agencies

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9 Pillars of Tourism by: Ritchie & Goeldner

9 Pillars of Tourism
by: Ritchie & Goeldner

Attraction Sector

Transportation Sector

Accommodation Sector


ervice/ F& B ector

Travel Trade Sector

Tourism Sector

Events Sector

Entertainment Sector

Adventure & Recreation Sector

Systems approach

Whole Tourism Systems & Their Environments

How they help us understand tourism

What are whole tourism systems?

} Real WTS are people, places, organisation that interact in certain roles when tourism happens. } Models of WTS are representations of real WTS, frameworks for researching and studying tourism in a comprehensive and systematic manner.

What ar

d ls

A model is a representation of reality, used to guide thoughts, and often action, in relation to some sort of ideal or actual phenomena.

The Matterhorn, in Europe, & a model of it, in Disneyland

Examples of types of mo els

Fashion models represent designed styles in body shapes, clothing, hairdressing These are normative models ideals for observers aspirations, dreams or distractions

What ar s st


d ls

They show the elementary components necessary for a particular system to exist.

Not all models are systemic, even some that are described as systems

What is a System?

A system is a set of parts, of elements, that are connected to one another by at least one distinguishing principle (Jordan 1981, p 24)

A simple whole tourism system & its environments (Leiper 1979, 2004)

The reasoning in Leipers mo el for i entifying the elements in whole tourism systems }What is necessary for tourism to occur?
}Whatever is necessary can be thought of as an element in WTS. Anything not necessary is not an element.

The reasoning for i entifying elements in Leipers mo el of WTS

} Are hotels necessary for tourism to


} No. Without hotels, tourism would occur, although in different forms. } Therefore, hotels are not elements in WTS

Many things are not ne essary for tourism to exist, thus not elements in WTS
} } } } } } } } } } } } Theme parks, travel agents, tour operators Airlines, motor vehicles, cruise ships Motels, caravan parks, casinos Annual leave, long weekends, holiday pay Ecological awareness Hospitality National tourism organisations Governmental Ministers of Tourism Professors of Tourism, Schools of Tourism Research Advertisements, marketing campaigns, TV Brands

When tourism o urs, at least one of ea h of these items exists, in an interrelate pro ess.
} a person who becomes a tourist } who departs from a tourist generating place } travels along a transit route } and visits a tourist destination place } using services of a tourism industry


ts i

r WT

} At least one tourist } One tourist generating place (where trips begin and end) } At least one tourist destination place } At least one transit route } At least one tourism industry

At least one tourist is ne essary for tourism to o


A tourist generating place is necessary for tourism to occur

A transit route (a pla e where travelling, not visiting, is the major a tivity of tourists) is ne essary for tourism to o ur

A tourist estination, with some attra tive attribute, is ne essary for tourism to o ur

At least one tourism in ustry is ne essary for tourism to o ur

} At r

ri i i ti (ii) i t rt ri r i i

tr i ll ti f tl tt r , i (i) tr t i f r t r ti tri l tr t i f r r ti it t t. tri r t t ri t r i ri t .

ri t

} T t

Organisations in tourism industries: Disneyland in USA, Louvre in France

Are tourism in ustries really ne essary for tourism to o ur?

From one perspective, no.

Fully independent tourists might make no use of any service on offer from tourism industries. This is DIY tourism.


Ind nd nt t ris cc rs hen t rists nor all ant to avoid:

}being with dependent tourists }using services on offer from tourism-related businesses Thus, tourism industries are factors shaping all tourism, to some extent and in different ways dependence or avoidance.

Its the onne tion of tourists with pla es that makes a pla e a tourist estination

A pla e be omes a tourist estination only if a tourist visits

If t t t t t t B t B t t

When tourism o urs, at least one of ea h of these five items exists, in an interrelate pro ess.
} a tourist, } a tourist generating place - where trips begin and end, } a tourist destination place, } a transit route, } a tourism industry.

How an these elements be es ribe in mo els?

One way is to begin by describing, in a diagram, the abstract of a tourists itinerary, which will show geographical elements, then adding human and organisational elements

Eight geographi al elements in a trip with two estinations (Leiper 2004)

A simple whole tourism system & its environments (Leiper 2004)

Ockhams Razor, a useful principle for theories

When stating a theory, do not include more details than are needed to understand the theory.

} Keep to essentials

} Tourism systems are open systems, they interact with environments } Environments are surrounding conditions, which may affect a system and/or be affected by it. } Physical, social, cultural, economic, political, technical, legal etc.

Examples of environments affecting WTS

Spectacular scenery, a feature of the physical environment, can be vital for a places role as a tourist destination

Political policies of governments can be vital in determining flows of tourists out of generating regions and into destinations.

Examples of WTS affecting environments

International tourists returning to their home countries bring new information & changed attitudes that affect social and culture environments there.

Expenditure by tourists in Australia supports more than 200,000 jobs

Too many tourists walking on sand have damaged ancient rock art at Uluru (Ayers Rock)

Uses of this mo el of WTS

} It reminds us of all the elementary things that make up tourism. } It enables us to see how the elements interrelate to make tourism happen. } It reminds us that environments help shape the elements of WTS and are, in turn, affected by those elements.

Uses of this

odel of WT

} The model can be overlaid on a map for applications to actual places in itineraries } A place can be viewed and studied as (i) a generating place, (ii) a point in transit and/or (iii) a destination } The model reminds us that one place can have three different roles as geographical elements in different WTS

Uses of this mo el of WTS: as a theoretical construct for general stu ies an research on tourism

A mo el for inter isciplinary stu ies of tourism

Uses of this

odel of WT

}It enables any discipline or mix of disciplines to be applied in research or studying tourism }By not favouring any particular aspect of tourism, the model facilitates unbiased and objective research

Limits or weaknesses in Leipers mo el of WTS

} It ignores differences among different forms of tourism } It ignores the major differences occurring in WTS with different levels of industrialisation (i.e. packaged tourism as against DIY independent tourism)

Limits or weaknesses in Leipers model of WTS

} It leaves out most of the details that characterise all real world examples of tourism. } However, this is a limit, not a weakness

Other mo els of tourism from

} Gunn (1972 etc) } Mill & Morrison (1985 etc) } Stear (1992 etc) } Cooper et al (1992 etc) and others

Clare Gunns mo el of The Tourism System

Gunns M del
Its a linear m del, is not systemic Gunn described tourism as a closed system, which is not the case. It is however a valuable model for emphasising the vital function of attractions.

Five elements in a WTS

} Tourists } Traveller (or tourist) generating regions } Transit routes } Tourist destination regions } Tourism industries The five elements interact with each other to form a WTS, and also interact with environments: they are affected by, and have effects on, their environments.