Travel and Tourism Sector

Task 3- Effects of supply and demand on the travel and tourism sector


      There is a large variety of factors which can influence the demand for tourism. Some of the factors which influence tourism demand are: demographics, technological, influence of currency exchange rate, economic factors, political factors and globalization. The aim of this paper is to explain factors affecting tourism demand in the travel and tourism in UK, and to describe how supply has changed to meet the effects of demand in the travel and tourism sector in UK.

P3.1 Explain factors affecting tourism demand in the travel and tourism industry in UK

      An understanding of tourism demand is essential to estimate future demand. The information is important for managers and accurate predictions in tourism are essential for making decisions, in both government and industry levels.

      Any person may be motivated to travel but the ability to do that will depend on a number of factors related to both the individual and the supply environment (Cooper et al, 2008)

Determinants at the individual scale

There we can differentiate two groups of factors:

    • Lifestyle determinants of tourism demand which include: income, employment, holiday entitlement, educational reasons and mobility

    • Life cycle determinants where the age and the domestic circumstances of an individual can affect the amount and the type of tourism demanded (Cooper et al, 2008)

  Income and employment are closely linked and has important influences on both the level and the nature of tourism demanded by a person (Cooper et al, 2008). Because tourism is an expensive activity which needs a certain amount of income before participation is possible, an unemployed individual may not have enough money to spend on travel. In the same category can be a person with small discretionary income (the income left over the tax, spending on basics of life and housing) When the discretionary...