Week 2 2.0 The Tourism Product-Factors Governing Demand
Week 2 2.0 The Tourism Product-Factors Governing Demand
Week 2 2.0 The Tourism Product-Factors Governing Demand
• Income Levels
In the last 30 years, disposable incomes around the world have shown upward
trends, thus allowing more money for activities like leisure travel. Smaller families
have meant higher allocations per person in the family. More and more women are
entering the workforce and in real terms the cost of travel has fallen. The dramatic
rise of tourism in the last 50 years can be attributed in a large measure to the
combined effect of more leisure time and rise in both real and disposable incomes.
Increasing unionization of labour right from 1930 onwards has reduced the
number of working hours per week. Changing managerial orientations towards
human resources have increased the levels of pay and paid vacation time in most
developed countries. Now people have longer periods of leisure, which could be
allocated to travel.
• Mobility
Better transportation and communication services have made the world a smaller
place, and have brought both exposure and awareness of distant lands to larger
sections of potential tourists across the world. Faster modes of transport have cut
down on travel time, making it easier for people to economically plan and execute
trips abroad.
Benefits:
There are many stages of product development, but they all begin with identifying
a need in the marketplace. Once you have identified the need for a particular
product, you will want to come up with a concept or idea. You will then want to
create a plan for how you will bring your idea to life. Developing products that are
tailored to visitors’ needs will improve the profitability of your tourism business.
Making more products available to tourists will increase the length of time that
they stay in the NWT, increase the amount of money they spend.
1. The physical plant- core of any tourism product; which can be a site natural
resource or facility such as waterfall, wildlife, or resort. It may be fixed
property such as hotel, or mobile equipment such as a cruise ship. Also refers
to conditions of the physical environment such as weather, water quality, and
tourism infrastructure.
2. Service- the technical performance of specific task required to meet the needs
of tourist, such as hotel engaged in management, front desk operation,
housekeeping, maintenance and beverage provisions.
3. Hospitality- “enhance service “ or “something extra”, the attitude or style in
which the task is performed (e.g., sensitivity to the pressure on a business
traveler, encouragement to play for pleasure travelers. Hospitality is an
expression of welcome by local residents to tourist arriving in their
community.
4. Freedom of choice – acceptable range of options in order for the experience to
be satisfactory ; varies with the traveler’s budget , previous experience ,
knowledge , and reliance on a travel agent or pre- package tours.
5. Involvement- participation of consumers in some degree , in the delivery of
service ( physical, intellectual, and /or emotional involvement ); a sence of
engagement , of focusing on the activity –whether for pleasure or business.
This experience can be interpreted as the totality of the travel experience from the
time of preparation to the time the traveler has returned home. Or it can simply mean
what actually happens at the destination.
Tourism product development is defined by the UNWTO and the European Travel
Commission (2011) as a “process whereby the assets of a particular destination are
molded to meet the needs of national and international customer.
For hotels, the DOT has adopted the star rating system for hotels. Resorts, and apartment
hotels, where one star is the lowest and five star –the highest. This is different from the
previous standards where there were only four classes of hotels (economy, standard, first
class, de luxe).
Besides being more detailed, the new accreditation standards also incorporate
environmental aspects and barrier –free access for PWDs. The Certificate of
Accreditation is valid only for two (2) years, and maybe revoked or the classification may
be downgraded in case of non-compliance or misrepresentation or when the
establishment allows itself to be used for prostitution.
1. Five Star: 85-100% achievement (851 to 1,000 points). These properties reflect the
characteristics of luxury and sophistication. The facilities are world class in every
manner and the meticulous service exceeds all guest expectation.
2. Four star: 70-85% achievement (701 to 850 points). These properties offer a very
all areas. Accommodation. There are more spacious public areas, higher quality
facilities and a greater range of services.
3. Three Star: 55-7% achievement (551 to 700 points) These properties offer a very
good level of accommodation. there are more spacious public areas, higher quality
facilities and greater range of services.
4. Two Star: 40-55% achievement (401 to 550 points). These properties appeal to the
tourists seeking more than basic accommodation. They offer expanded facilities
and a higher quality facilities and higher level of comfort.
5. One star: 25-40% achievement 251 to 400 points). These properties appeal to
budget-minded travelers. There is a limited range of facilities and services.
Masip (2006) outlines the process in the tourism product creation. The foundation for the
creation process is the existence of(1) a motivation to travel and (2) resources/attractions
in the destination. The creation process itself consist of developing the specific activities
or experiences. The combined resources, activities, and experiences will now comprise
the tourism supply of the destination. Further steps involve communicating the functional
and emotional benefits of the tourism supply to markets and target audiences through
branding and correct positioning. The end result should be the consumption of the
tourism products.
The process requires the existence of a destination management organization that should
lead, coordinate, structure, develop, and implement the process, taking into account the
triple bottom-line.
1. Identify all tourism assets or resources in your destination. Through research, such
as by site visits and stakeholder consultation, categorize the assets into various
portfolios (e.g., beach, nature, heritage, agri-tourism, ecotourism, sorts, events,
special interest, rural, urban, etc. There are various ways of categorizing tourism
assets.
2. Match the assets with potential markets. One way to select what tourism resource
to prioritize is by listing down potential markets per tourism asset and to see what
resource attracts the most number potential market groups. Another is to evaluate
them by using the VRIO framework where the asset if evaluated according to each
value, rarity, inimitability, and organization (whether or not it is already being
marketed).
3. Make the product more inviting by providing or upgrading the infrastructure
accommodation facilities, and other services.
4. Develop activities around the tourism assets to be marketed. In Ilocos, they
introduced sand boarding and 4x4rides to exploit the opportunities presented by
the sand dunes as an attraction. In beach areas, water sports may be introduced.
Zip lines are another popularity.
5. Develop tour packages focusing on the tourism assets. Tour packages may focus
on one major tourism assets and supplemented by minor assets. The package
maybe made of tourism asset revolving around one theme (e.g., tours to various
places offering gastronomic delights or places with surfing opportunities) or a
variety of assets that complement each other and provide varied experience (e.g.,
in Ilocos, churches, sand dunes, beaches, scenic spots, windmills).
6. Communicate the functional and emotional benefits of the tourism product to the
target markets.
7. Develop a destination marketing organization(DMO). To consolidate all tourism
marketing activities in the destination, a DMO may have to be created. It can be
based on the existing tourism office, made up of both government and private
sector representatives, or composed of the tourism stakeholders in an area.
Relevance
Tourism product development should be done in the context of overall tourism
development strategic planning.
Sustainability
Tourism product development should follow the principles of sustainable tourism
development.
Market Knowledge
To know what kind of tourism products one must develop, there should be a keen
understanding of profile, characteristics, task, and trends of various market segmentation.
In tourism, the following market segments are very important and they require
products and services which are unique to the segment.
a. Leisure tourist
b. Business travelers
c. Conferences attendees
d. Golfers
e. Single women
f. LGBT(lesbian, gay, bisexual, transgender)market
g. Student travelers
h. Backpackers
i. Surfers
j. Families
k. Honeymooners
l. People with disabilities, etc.
Note: If your targeting business travelers, the room must have cable TV, Wi-Fi, Internet,
Telephone( one in the bathroom), laptop etc. If your primary target is leisure tourist, the
room does not have to be that big, for as long as there is shower. Filipino budget leisure
travelers spend whole day sightseeing and shopping. They get a room just to have a
place to stay for the night, do their biological routines, and store everything they
shopped.
Product Knowledge
You must know the full range of tourist resources that your place has to offer.
Take advantage of what you have. Develop activities around the natural assets of your
destination.
Product-market Match
You must be able to identify the tourism products that may satisfy the needs and
wants of the target markets.
Be mindful of what your market are looking for in a tour package. Different
markets will have different sets of expectation that must be meet. As you know,
satisfaction is achieve when such expectations are met by actual delivery of
performance/experience. Adventure tourist from Canada may look for the following
standards:
Attractively sited cabins/accommodations in a lakeside or other attractive
natural setting
Full American plan or housekeeping facilities with restaurants available in
the area
On-site recreational activities, including swimming , boating, hiking
Well kept property, largely in a natural state, with some natural looking
landscaping and flowers where needed
Value added- not just price, but overall value for money.
Identify areas within the destination which are appropriate for specific types of
product development. Develop flagship attractions or hubs. Create the “spokes” around
the hub by bundling a range of attractions and activities, crating tourism routes and
organizing festivals and events.
Variety
Tourist Involvement
Tourist are becoming more and more aware of their responsibilities as travelers
and it gives them more satisfaction if they know how they can contribute to the
preservation of a place’s environmental and cultural integrity.
Stakeholder Participation
Long-term Planning
Dividing a destination into separate TPD zones can be effective in (a) expressing
the strength of each region, thereby creating a set of identities within the country and (b)
spreading the socio-economic benefits of tourism around the whole country.
Investment Promotion
Capacity –building
Planners must ensure that the tourism product mix elements do not create conflict.
It may not be a wise idea, for example, to allow a casino to operate in a destination that is
well –established as a pilgrimage.
Holistic Approach
Tourism products can only succeed if the other elements of the destination are
taken into account (access, accommodation, community attitudes to tourism, etc.).
Mcnulty(2011) added sustainable principles to the above : He says that TPD should:
1. Be authentic and indigenous and reflects the unique attributes of the destination;
2. Have the support of the host community.
3. Respect the natural and socio-cultural environments by not damaging these in any
way;
4. Be differentiated from competitors, avoid’ me too/copycat’ developments; and
5. Be of sufficient scale to make a significant economic contribution, but not so large
and to create high economic leakage.
This steps involve (a ) producing an inventory of tourism resources in a given area and
(b) conducting market research to identify market segments and their respective
characteristics and requirements , and matching the market segments with the resources.
For example, if the city has casino, the obvious match are gamblers. The choice of target
market will also have to into account the impact of the product on the community. As
such, young people may not be allowed to enter the casino. In some countries, casino
complexes are open only to foreigners (example South Korea). A more extensive
product–market matching exercise is to have a grid indicating the resource on the
leftmost column and the list of market segments along the topmost row. After that the
evaluator can check if there is a match between the resource and the market segment.
This is done with all other resources. The resources the most number potential markets
can be prioritized for development.
Chart Sample Product Matching based on the assessment of the product’s potential to the
respective source markets the following are considered good matches (100% to 75%
potential) in the National Tourism Development Plan (NTDP).
Based on the above product- market matches, the first priority should be on developing
sun and beach, nature –based and cultural tourism, followed by shopping, leisure and
entertainment tourism and, health and wellness. MICE and educational tourism can be
considered as niche products. Special interest target markets include honeymooners,
golfers, birdwatchers, and divers (NTDP).
When deciding what new product areas to diversify, the following criteria must be
considered (EGS 2002):
Quality of tourism resources relative to product requirements
Suitability of facilities and accommodations for the market segments that would
be attracted
Anticipated investment required to enter the market
Expected return on investment and likely per visitor yield
Compatibility with existing markets you serve
Your own relevant knowledge –base about the new product area.
Practice Test:
TRUE or FALSE
1. Experience represents things that we can do, see, eat, buy, have, and learn at the
destination.
2. Tourism product development should not be done in the context of overall tourism
development strategic plan.
3. Accreditation is defined by Department of Tourism as a certification issued by
DOT.
4. Accessibility is the presence of adequate transportation, infrastructure and
independent from foreign operators.
5. Freedom of choice is a participation of consumers in some degree, in the delivery
of service.
6. Hospitality is the attitude or style in what the task is perform something extra.
7. Tourism product development means bringing new and innovative products,
experiences and services to the market for tourist to buy.
8. Experience can be interpreted as the totality of travel experience from the time of
preparation only.
9. Tourism Product is a combination of tangible component.
10. One star rate reflect the characteristics of luxury and sophistication of the
properties and world class facilities of the hotel.