Tourism industry is one of the fastest growing industries. Large numbers of trends in the tourism industry have emerged in the last few decades. People are spending a lot on the tourism services especially the ones that give them life time experience. These trends play a very vital role in influencing the demand and supply in the tourism market (Bethapudi, 2013). Tourism has special characteristics in its demand and supply which is different from others. It is essential that companies in the industry understands the trends and make their plans accordingly so as to maintain this demand and supply balance. For this a thorough research is required. This report highlights the four major trends in the tourism industry and the society as well as the ways in which it influences their demand and supply in tourism.
Four major trends in the industry
Tourism industry has expanded with a very high speed and has become a large contributor to the GDP of various nations. There are many tourist destinations coming up in the world. With such an expansion in the tourism industry it has become essential for the organisations to understand the trends in society related to tourism (Xiang, Wang, O’Leary & Fesenmaier, 2015). The major four trends and their impact on demand and supply are as follows:
Sole travellers: There is an increase in the number of people that prefers to travel alone. Previously, it was considered that people love to travel in group but now the trend has changed. Sole travelling is also increasing in the form of some kind of business trips where the people extend their trip by travelling to some places in the city or country. People these days want to experience new things irrespective of the fact that whether they are alone or in a group. They just want to steal the moments and experiences. The highest numbers of people that prefer sole travelling are youngsters (Lemelin, Dawson & Stewart, 2013). This can also be understood by the fact that people are living alone and most of them do not have time. In the busy life whenever they find some time they choose travelling.
This trend has huge impact on the demand and supply. This is because of the fact that people are demanding for the travel packages which is for one person. This has increased the demand of people who want private services that too at low cost (Medlik, 2016). In order to fulfil these demands companies are building infrastructure that supports sole travellers.
Online booking: With the advancements in technology, it has been seen that there is an increase in the number of people who chooses online booking over other forms of booking. This increase in the numbers can be attributed by the fact that online bookings are easier to make with almost no additional charges. People usually search about any services online then they check the reviews about the services and then take decisions accordingly. In the coming years this trend is going to increase. This is because there will be advancements in the mobile technology and at the same time data usage is also going to increase (Bizirgianni & Dionysopoulou, 2013). Such an environment is going to influence both companies and customers.
It is having higher impact on the demand and supply of the company’s product and services. Online booking has increased the number of customers. It is due to the reason that people can easily make choices from different catalogues present in front of them. They can easily switch to different services providers (Schänzel & Yeoman, 2015). This has reduced the number of third parties like distributors of the company. The suppliers also get to know about the plans and requirements of people and hence can keep themselves ready with their plans.
Business and educational tour: This is also an increasing trend in the tourism industry. The number of people that are opting for educational tour has also increased. This is also because there is an increase in the number of people who are opting for studying in abroad destinations as well as explorers are also increasing (Smith, 2014). This can be highly seen in the people that are studying different types of cultures as they want to take live experience about different cultures. Universities are sending their students for such kinds of trips. Along with this there are many employees of multinational and local firms that go to different destinations on business tours. This is increasing as the companies are funding such kinds of tours so as to motivate their employees.
This has impact on the demand and supply as in the coming years this is also going to increase as management finds it an effective way to motivate their employees. In future there will be some SME are also going to practice this. The tourism company will have to be ready with such plans that attract more companies to send people on trips. This will reduce the overall cost of the tour as the numbers of people in such trips are larger as compared to sole travellers.
Adventure tour: The most significant changes can be noticed in the case of adventure tourism. This trend has changed the travelling behaviour of people worldwide. There is huge number of people especially the population that are young who prefer such kind of tour plans. They want to do this so as to have an exciting experience. According to Adventure travel trade association, the numbers of people that are choosing riskier tour plans have increased by 45%. Adventure tourism has surpassed almost all the trends in the industry which can be seen with the fact that alone in 2018 there is an increase of 20% in booking of adventure travel plans (Shabada, 2018). Along with the adventure destinations, urban adventures are also making its mark in the industry like experiencing challenging activities in the city.
It is also influencing the demand and supply of the tourism industry. This can be understood by the fact that companies had to develop many tourism destinations that can be give new experiences to the travellers. The first and foremost priority of the companies is that they must ensure the safety and security of the tourists (Steinbrink, Frenzel & Koens, 2012). For this companies need to invest in large amount especially checking the fact that competition has increased and any kind of failure can result in loss of company’s image. Most of the places that provide adventure tourism are natural and are subjected to natural calamities and hence countries also need to build infrastructure that supports safety in adventure tourism.
Special characteristic of demand and supply in tourism
Demand and supply in tourism has many characteristics. The special characteristic is that its demand supply depends on the seasonality (Jayawardena, Pollard, Chort, Choi & Kibicho, 2013). There are many factors that influences demand for example weather, holidays, seasons etc. For such things company needs to be ready with their resources. Special thing about it is that most of the resources of the company stay vacant in some seasons while in some seasons there is scarcity of the resources. It is a challenge for the supplier to maintain a balance between the demand and the supply. If not done properly company may experience great loss. Tour operators must have the adequate resource so as to handle huge amount of customers in peak season (Moutinho, Ballantyne & Rate, 2011). This is a time when the changes of over demand could arise. If the company increases its base resources like transportation, lodging facilities then in the lean seasons there is a chance that company will experience loss. Most of the time firms tackle this situation with the help of price elasticity. They reduce prices in the lean season so as to attract people at the tourist places while they increase the prices in the peak season so as to achieve profits. These profits help them in maintaining the losses they have faced in the lean seasons. This needs a large amount of strategic planning at the ground level and at the same time companies also need to make strategic alliances with local partners so as to provide services at lower costs. This is extremely important when there is huge change in the demand patterns which could involve a whole lot of expenditures (Boniface, Cooper & Cooper, 2016). Apart from this the demand and supply in tourism is not subjected to law of diminishing returns.
From the above based report it can be concluded that there is an increase in the number of customers coming to the tourism industry. It is one of the fastest growing industries all across the globe. This is also because many new kinds of trends are emerging in the market. The four major trends in the industry are sole travellers, online booking, educational and business tours as well as adventure tour. All these trends have impact on the demand and supply of the industry. The special characteristics about the industry’s demand and supply are seasonality, huge deviations in demand patterns and the fact that it the demand and supply in the tourism industry is not subjected to law of diminishing returns.
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