Tourism Supply

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Tutorial Three chapter 5 & 7
1. Why is an understanding of tourism supply fundamental to the analysis of how the tourism sector is organized and operates? Supply is the result of productive activities and exists to meet the tourism demand. Supply can be classified into three categories: a) Descriptions of industry, its operations, management and marketing. b) The Spatial (geographic development) and interactions which characterise the industry on a local, national and international level (DMOs). c) The Effects resulting from the development of the industry.

Because the supply covers almost every sector of tourism, so it’s of great importance for us to have a good understanding of tourism supply.

2. How do transnational tourism companies impact upon the organization and management of tourism? Transnational companies are those companies which operate in more than one country. And there are four prevailing market situations that a transnational company would have to cope with: a) Perfect competition (an easy market to get into; however not very profitable). b) Contestable markets (products in this market situation are with slightly difference). c) Oligopoly (harder for other to get in, e.g. airline industry). d) Monopoly (the market of one supplier controlled).

The transnational company and tourism have impacts on each other which are like that chain hotels can stimulate the internal business and employment and as tourism being an export industry in where foreign exchange can be earned by host country. On the other hand there are disadvantages like if the head office would be charging the company with high tax rate. Moreover, advantages and disadvantages are showed in the diagram below:

3. What are the principal features of management relevant to the supply of tourism? Tourism is an industry that always changing and developing, the management in tourism industry should be always aware of changing. A tourism organization...
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