Discuss about the Opportunity Cost In Tourism Industry.
Opportunity cost in Tourism Industry
Opportunity cost is the concept that can be used in the tourism management and this will be having positive impact on the tourism management as well. Opportunity cost has a positive impact on the tourism industry as it helps in understanding the opportunity that has been lost. It helps in providing a proper understanding about the reality while selecting different options as well.
In tourism industry, when a person enters as to travel to a particular destination, there are different options that are available to that person while selecting for a particular destination. When the person will choose a particular destination, then he/she will be losing the opportunity for other destinations and this will help in understanding the real scenario of the entire situation.
While choosing a particular destination, it is the responsibility of the customer as well as the tours and travel manager to identify and understand the different issues that can occur while selecting a particular destination. This will help in understanding the different relative prices of other destinations the individuals want to travel. This will help in gaining proper competitive advantage and gain positive outcomes as well in the tourism industry.
Example of positive outcomes of opportunity cost in tourism industry
Opportunity cost is defined as the concept wherein in order to receive an opportunity for one particular destination, there will be a loss of opportunity of another destination (Mok, Sparks and Kadampully 2013). This is in relation to the tourism industry as well as management. There are different advantages as well as disadvantages of the tourism management. The advantages are it helps in providing awareness about the opportunity that has been lost by the customers who planned to travel to a specific destination. Secondly, it will help in understanding the different relative prices of the other alternatives that has been shortlisted by the customers in order to permanently select a destination to travel.
Furthermore, there are different disadvantages of the tourism management as well wherein this takes a lot of time in order to calculate as well as consider. With proper implementation of time that is required it will help in understanding the different options or the alternatives carefully, however there are situations when there is limited time available and then time becomes a huge constraint for the tourism management as well as for the customers as well (Waligo, Clarke and Hawkins 2013).
A customer went to a travel and Tourism Company named Adventure Tours situated in Melbourne, Australia. The respective individual wanted to travel to a particular destination with the family members in United States of America within a budget of $1, 00,000. The tourism manager helped him with different kinds of alternatives for different places in the world. The manager helped the customer by providing him the brochure for different places that covers within the budget that has been provided to him by the client. This helped the customer in getting a brief about the different places and he had ample scope to decide on the respective place he wants to travel. This is the case of opportunity that has been provided to him wherein he understood the different aspects of different places clearly from the manager of the respective tourism company.
The customer has been provided with ample opportunities about different destinations and this helped him in selecting a destination based upon his budget. Furthermore, from the various options that has been provided to him, he had the opportunity to select a particular destination and reject others. In this scenario, the customer lost the opportunity of the other travel destinations in order to choose a particular destination.
From this particular example, it can be analyzed that opportunity cost helps and have positive outcome in the tourism industry as well. The opportunity cost has positive outcome in the different industries in different ways, however there are different disadvantages in the opportunity costs aspects in tourism management as there will be time constraints at times when there are only few options available for the customers in the organization to select a particular destination as there are huge bookings going on for that specific destinations (Medlik 2016).
Example of negative outcomes of opportunity cost in tourism industry
There are negative impacts of opportunity costs on the entire tourism industry as well wherein there is lack of time and lack of accounting as well in this particular sector.
A particular customer went to Adventure Tours, Melbourne, Australia wherein he wanted several options for travelling to a particular destination in United States of America wherein he had a budget constraint and he can only spend around $90,000. The manager helped the customer with different destinations that are available in the rate that has been mentioned by the customer. However, the manager has clarified that there are only few tickets left and there is only some time left for the tickets to be sold out. The customer had no other option but to select a destination without getting proper consultation from his family members with whom he was planning to travel to United States of America. In this case, there is lack of availability of time in making a sound decision about the destination by the customer. There is lack of accounting as well in the tourism business management as well as that can prove negative for the entire tourism business in the future (Mahadevan 2014).
Summarization of positive and negative impacts of opportunity costs on Tourism management
Therefore, this can be learnt that opportunity costs can have both positive as well as negative impacts on the tourism management. Opportunity costs has a positive effect on the entire tourism management as there are different options available for the customers who are planning to travel to different destinations and they are availing various options for selecting a particular destination as well.
On the other hand, there are negative impacts of tourism management as well wherein there will be constraint of time and lack of accountability that can have huge impact on the entire tourism management as well as the tourism sector.
Therefore, opportunity costs are useful when the particular individuals or customers are planning to travel to a particular destination within a fixed budget and they have different options available for them as well. On the other hand, the time constraint can have a negative impact on the tourism management.
Mahadevan, R., 2014. Understanding senior self-drive tourism in Australia using a contingency behavior model. Journal of Travel Research, 53(2), pp.252-259.
Medlik, S. ed., 2016. Managing tourism. Elsevier.
Mok, C., Sparks, B. and Kadampully, J., 2013. Service quality management in hospitality, tourism, and leisure. Routledge.
Waligo, V.M., Clarke, J. and Hawkins, R., 2013. Implementing sustainable tourism: A multi-stakeholder involvement management framework. Tourism management, 36, pp.342-353.