Determinants of Tourism Demand

So what are some of the determinants of tourism demand? Well first of all you can only become a tourist, if you have spare money, if you have what the economist call disposable income, if you don’t have that, then your money goes on food and shelter and clothes and you have very little spare income. So after the war what we found is that the initially it was the developed countries, some in Europe and certainly United States and Canada, for example, and South American countries, who hadn’t been affected directly by the war actually begin to generate tourists. That is the people from these countries wanting to travel overseas. The second point is this was absolutely essential. The increase in per capita incomes.

That is as incomes increase then people found they did have disposable income. They had more time and they had more money to spend on things rather than simply on lifetime necessities. The third issue here is also very important. It is a growth of leisure time and holiday entitlement. So for example, if you’re working seven days a week in order to increase your income, How can you spend it on leisure? You got no leisure time. So as these developments took place, then you find that more and more people were spending more money and more time on leisure activities. And this has given rise to what we now call the work-life balance. Fourth point here is the reduced barriers to international travel.

So over the period then what we found was beginning to happen was still needing a visa for every foreign country. More and more countries were negotiating with each other. We’re trying to make travel much easier. And if you look at this then and think about China, So in China you’ve already seen these things happening. You have an increase in per capital incomes. You have a growth in leisure time availability. You’ve gone from the six-day working week to the five-day. But more important, you have the three golden weeks.

So if you put these things together, one of the things we know is that when people’s incomes go up they do two things, One, they want to travel, they want to experience things they never experienced before. Firstly, domestically; secondly, they travel internationally. And the second thing they do is buying cars. So when I first came to China, it was 1992 going to Beijing it was one ring road, now I think there are seven. There was one airport, now I think there are three another and one being built. There were no shared cars on the roads except those belonging to government police and diplomatic cars. Look at the phenomenal change over that period of time,

there are three reasons: growth of per capital income, growth in the availability of leisure time, and reduced barriers to travel, particularly in China, where government has liberalized documentation to allow people to travel outside. So there is now in our society, a greater work-leisure travel. I’ve called this the democratization of travel opportunities. If you go back to the 30s and 40s, the only persons who traveled particularly internationally were wealthy people. It was a wealthy elite who travelled. Now through these changes I’ve suggested to you, and through the growth in particular of things like inclusive tours, and the recognition by government of the economic and social benefits of tourism.

Then what we find that tourism over the 65 years has been consistently a growth industry.