Why Is Demand Important in Tourism

Topics: Tourism, Greater Toronto Area, Cruise ship Pages: 4 (1226 words) Published: October 28, 2012
In the ever-growing tourism industry, where every single decision made matters, demand plays a huge role on its development. “All tourism-related business, such as airlines, tour operators, hotels, cruise ship lines, and many other recreational facilities provided are interested in the demand of their products by tourists, because the failure to meet market demand leads to management failure” (Song, Witt, & Li, 2008). The data required to succeed in the industry is collected from visitors, information such as their preferences, accommodation, amount they want to spend, and so on. Though accurate information cannot be obtained, because of the lacking of sufficient equipment to measure demand and the different ways people travel nowadays, research must be carried out to know more or less tourism demand. Following, there will be deeper examination of the importance of demand, the used methods to identify demand and how the figures help “reliably forecasting future sales or revenues to determine if a company’s project proposal will be financially reasonable” (Goeldner & Ritchie, 2011).

Demand in tourism can be related to the willingness of a person to travel and it can be calculated by knowing the things that encourage them and at the same time the determinants that persuade them against traveling to a destination. Consequence of not recognizing the demand of a service can lead to a company’s malfunction. Simply put, a corporation decides to focus on something specifically and spend a large amount of money doing so but without researching, it may end up failing if there is another firm that is known as the best in offering the same service or product. Customers will go to the one they recognize rather than try a new product. Therefore, if not being the best, a company better differentiate itself. Similarly, measuring demand provides sales figures to a firm for it to make final decisions, so as to increase or decrease its product or service, for example,...

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Haiyan, S., Stephen, W., & Gang, L. (2009). The Advanced Econometrics of Tourism Demand. New York: Routledge.
Kamlesh, C. (2010). Importance of demand analysis in business decision. Retrieved from http://economicsworlds.blogspot.ca/2010/04/importance-of-demand-analysis-in.html
Tourism Phenomenon. (2011). Measuring demand in tourism. Retrieved from http://tourismphenomenon.blogspot.ca/2011/09/measuring-demand-in-tourism.html
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