tourism supply and demand

Tourism demand determinants- made simple

Understanding tourism demand is vital if we are to create and maintain an efficient, profitable and sustainable tourism industry. But what are the major tourism demand determinants that organisations need to consider? Read on to find out….

What are tourism demand determinants?

Tourism demand- life cycle stage, social structures, population and ageing, tourism demand- the changing economy, tourism demand- education, tourism demand- modern generations and technology, tourism demand- money rich, time poor, tourism demand- fashion, tourism demand- further reading.

The determinants of demand are factors that cause fluctuations in the economic demand for a product or a service. This is important to consider both in the travel and tourism industry as well as in other industries. Ultimately, we need to understand what demand is and do our best to meet that demand. For example, nowadays less people are in search of the traditional package holiday and are instead seeking niche tourism experiences. In response to this, many tour operators have adapted the products that they offer to suit the demands of the tourists- instead of selling predominantly beach and ski holidays, many are now offering the likes of adventure tourism trips and wellness tourism retreats.

Tourism is demand-driven, so to understand current trends in tourism we must understand how patterns of demand are changing. Demographic and social changes are seen as major influences on, in particular, international tourism . Dwyer (2005) argues that several types of demographic variables are changing in ways that will influence future demand for tourism and the specific types of tourism experience that will be preferred.

There are many tourism demand determinants to consider, but the major ones include:

• Life cycle changes
• Ageing population    
• Education    
• Employment    
• Time    
• The pleasure industry

The life cycle stage is always an important determinant in tourism demand, because people of different ages tend to have different demands! Here are some typical demands that we may expect from different age groups-              

• Children – Will the American version of summer camp become more popular around the world as both parents work longer hours
• Adolescents – Are at the peak of their leisure needs but lack both the freedom and the money to indulge these needs– will this change? If so, how?
• Young people – these represent 20% of the market and the likes of backpacker tourism is assuming ever-greater importance. Young people are taking more gap years and volunteer tourism is growing in popularity. The adventure tourism market is to a large extent driven by ages 17-35.
• Families- Many families are now choosing to travel further afield and for longer than before, educational tourism and slow tourism are growing in popularity.
• Elderly people- As we grow older we tend to have more time and more money to spend on travel. Cruise tourism remains popular with elderly people, but older people are also embracing a range of alternative tourism forms too.

Tourism Economics and Policy

• Larry Dwyer , Peter Forsyth and Wayne Dwyer
• X / Twitter

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• Language: English
• Publisher: Channel View Publications
• Copyright year: 2010
• Main content: 872
• Keywords: Tourism economics ; Tourism demand ; Tourism forecasting ; Tourism policy ; Tourism management ; Tourism policy analysis ; Economic analysis ; Destination competitiveness
• Published: October 27, 2010
• ISBN: 9781845411534

Tourism Supply and Demand

• First Online: 30 September 2017

Cite this chapter

• Mark Anthony Camilleri 2  

Part of the book series: Tourism, Hospitality & Event Management ((THEM))

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The demand for tourism products may be affected by the marketing mix elements, including the nature of the product or service, its distribution, its promotional strategies and its price. Price is the only element in the marketing mix which actually produces revenue. However, the setting of a price is not an easy task, as there are a number of pricing strategies which any travel business may apply, including; prestige pricing, penetration pricing ; cost-based pricing ; differential pricing and uniform pricing . Moreover, there are a number of factors which will influence what type of pricing strategy could be employed. Such factors include; corporate objectives; the marketing objectives, and the organisations’ cost levels, among other matters. This chapter explains the various approaches which may be utilised when setting prices. Ultimately, the customers themselves will decide whether the product that is being supplied to them will meet or exceed their expectations.

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Department of Corporate Communication, University of Malta, Msida, Malta

Mark Anthony Camilleri

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Camilleri, M.A. (2018). Tourism Supply and Demand. In: Travel Marketing, Tourism Economics and the Airline Product. Tourism, Hospitality & Event Management. Springer, Cham. https://doi.org/10.1007/978-3-319-49849-2_8

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Trade in value-added

The goods and services we buy are composed of inputs from various countries around the world. However, the flows of goods and services within these global production chains are not always reflected in conventional measures of international trade. The development of measures of Trade in Value-Added (TiVA) addresses this issue by considering the value added by each country in the production of goods and services that are consumed worldwide. TiVA indicators are designed to better inform policy makers by providing new insights into the commercial relations between nations.

• Inter-Country Input-Output (ICIO) tables
• TiVA indicators guide

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Trade in Value-Added (TiVA) indicators provide insights into:

• Domestic and foreign value added content of gross exports by exporting industry
• Services content of gross exports by exporting industry, by type of service and value added origin
• Participation in global value chains (GVCs) via intermediate imports embodied in exports (backward linkages) and domestic value added in partners’ exports and final demand (forward linkages)
• Industrial activity's global orientation, i.e. the share of industry value added that meets foreign final demand
• Country and industry origins of value added in final demand, including the origin of value added in final consumption (by households and government) and in gross fixed capital formation (investment by businesses)
• Bilateral trade relationships based on flows of value added embodied in domestic final demand
• Inter-regional and intra-regional relationships
• Domestic value added content of imports

TiVA indicators

TiVA indicators are derived from OECD Inter-Country Input-Output (ICIO) tables . These are constructed using statistics compiled from national, regional and international sources according to the 2008 System of National Accounts (2008 SNA), and use an industry list based on the International Standard Industrial Classification Revision 4 (ISIC Rev.4).

The TiVA database is organized in sets of indicators:

• Principal indicators (levels and shares)
• Origin of value added in gross exports
• Origin of value added in final demand
• Origin of value added in gross imports
• Origin of value added in gross exports by value added origin country and final destination

TiVA indicators are expressed in USD millions at current prices, in the case of monetary values, or as percentages for ratios and shares.

TiVA 2023 edition

The 2023 edition of TiVA provides indicators for 76 economies (including all OECD, EU, G20 and ASEAN economies) over the period 1995-2020. Compared to the previous 2021 edition of TiVA, 10 new countries are now included: Bangladesh, Belarus, Cameroon, Côte d'Ivoire, Egypt, Jordan, Nigeria, Pakistan, Senegal and Ukraine. The industry list now has new codes, to conform to a new standard for all OECD databases with an economic activity dimension, although its coverage remains unchanged with 45 unique economic activities organised in a hierarchy, with aggregates for total manufactures and total services.

Note on recent TiVA estimates

The TiVA estimates for the most recent years should be interpreted with caution. Harmonised national Supply and Use Tables (SUTs) and Input-Output Tables (IOTs) are key inputs in the construction of ICIO tables from which TiVA indicators are calculated. Availability of official SUTs and IOTs is therefore a major determinant of inclusion in the published TiVA database. While some large economies (such as China, Japan and the United States) have already published SUTs for 2020, many countries publish SUTs with a time lag of 3 to 5 years. Therefore, to produce ICIO tables for more recent years, the latest available harmonised SUTs are extrapolated under constraints coming from National Accounts (SNA) time series up to 2020, and further adjusted using Balance of Payments statistics and bilateral trade in goods and services, also up to 2020. An important implicit assumption is that countries’ industry input and output structures in extrapolated SUTs are similar to the structures of the latest available SUTs. This is a reasonable assumption in the absence of global or regional economic shocks. However, in 2020, the COVID pandemic and related lockdowns hit certain activities disproportionally (such as transport; accommodation and food services; arts, entertainment and sporting events) and the timing and the pace of recovery varied across countries and sectors.The magnitude of these changes and the extent to which they affect core TIVA indicators needs to be investigated further. As countries update and revise their annual SNA statistics from 2020 onwards and publish more recent SUTs and benchmark IOTs, a clearer understanding of the economic impact of COVID will emerge and the ICIO tables and TiVA indicators should reflect this. 

TiVA country notes

Oecd member countries.

• Netherlands
• New Zealand
• Switzerland
• United Kingdom
• United States

Non-member economies

• Brunei Darussalam
• China, People's Republic of
• Côte d'Ivoire
• European Union
• Hong Kong, China
• Philippines
• Saudi Arabia
• South Africa

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