Tourism: Principles, Practices, Philosophies
Part Four: Tourism Supply, Demand, Planning and Development
Learning Objectives
• Understand the concept of
demand and its application
and importance in tourism
development planning
• Understand the factors
determining the magnitude
and fluctuations of demand
• Become able to apply various
methods to measure and
forecast demand
11th Edition - 2009
Chapter 13: Measuring and Forecasting Demand
Tourism: Principles, Practices, Philosophies
Part Four: Tourism Supply, Demand, Planning and Development
Vital Demand Data
1. Number of visitors
2. Means of transportation
used by visitors to arrive
at destination
3. Length of stay and type
of accommodations used
4. Amount of money spent
by visitors
11th Edition - 2009
Chapter 13: Measuring and Forecasting Demand
Tourism: Principles, Practices, Philosophies
Part Four: Tourism Supply, Demand, Planning and Development
Demand to a Destination
Demand for travel to a particular
destination is a function of the propensity
of the individual to travel and the
reciprocal of the resistant of the link
between origin and destination areas
Demand = f(propensity, resistance)
Propensity depends on:
Resistance depends on:
•Psychographics
•Economic distance
•Demographics
•Cultural distance
(socioeconomic status)
•Marketing effectiveness
•Cost of tourist services
•Quality of service
•Seasonality
11th Edition - 2009
Chapter 13: Measuring and Forecasting Demand
Tourism: Principles, Practices, Philosophies
Part Four: Tourism Supply, Demand, Planning and Development
Measures of Actual
Demand
1. Visitor arrivals

Number of people arriving at a
destination who stay for 24 hours
or longer
2. Visitor - days or - nights

= no. of visitors x avg. no. of days
or nights at destination
3. Amounts spent

= no. of visitor - days or - nights
x avg. expenditure per day/night
11th Edition - 2009
Chapter 13: Measuring and Forecasting Demand
Tourism: Principles, Practices, Philosophies
Part Four: Tourism Supply, Demand, Planning and Development
Projection Methodology
Several statistical methods or
econometric analysis can be used
to project demand
• Trend analysis method
• Simple Regression — Linear least
square method
• Multiple Regression — Linear least
squares method
• Computer simulations and models
• Executive Judgement (Delphi) method
11th Edition - 2009
Chapter 13: Measuring and Forecasting Demand
Tourism: Principles, Practices, Philosophies
Part Four: Tourism Supply, Demand, Planning and Development
Economic Distance
Economic distance relates to the time and cost involved in
traveling from the origin to the destination area and back. The
higher the economic distance, the higher the resistance for that
destination and, consequently, the lower the demand. It follows,
conversely, that between any origin and destination point, if the
travel time or travel cost can be reduced, demand will increase.
Many excellent examples of this are available, such as the
introduction of the jet plane in 1959 and the introduction of the
wide - bodied jets in the late 1960s. Jet planes first cut travel
time between California and Hawaii, for example, from twelve
hours to five hours, and demand grew dramatically. A similar
surge in demand was experienced with the introduction of the
wide - bodied planes for transatlantic flights. The introduction of
these planes cut the travel cost by almost 50 percent between
the United States and most countries on the European
continent.
Cultural Distance
Cultural distance refers to the extent to which the culture of the
area from which the tourist originates differs from the culture of
the host region. In general, the greater the cultural distance,
the greater will be the resistance. In some cases, however, the
relationship might be the opposite. For example, the higher the
cultural distance between particular origin and destination
areas, the more an allocentric person may wish to travel to that
destination, to experience this extreme difference.
11th Edition - 2009
Chapter 13: Measuring and Forecasting Demand
© John Wiley & Sons, Inc, 2009