The Concept of Tourism Supply - Essay Example

Table of Contents Introduction…………………………….……………………………………3 The Concept of Tourism Supply…………………………………………….3 Issues Related to Supply in the Tourism Industry.......................…................4 Sectors in the Tourism Supply……………………………………………….5 Summary………………………………………………………………………8 References……………………………………………………………………..9 Introduction Tourism supply is a complex phenomenon derived from the summation of the value of tourism products offered by an industry. Technically, the value of products’ sales is derived after the total supply is multiplied by the corresponding tourism/ product ratio. Song (2012) refers to tourism supply as the direct result of every good and service that is significant in meeting the demand of tourism consumption. Tourism supply is complex in nature due to its non-mobility of location in an otherwise globalized edge in its activities. As such, technology that links transport of the consumers with relevant information is useful in forming inter-sectoral linkages in the tourism industry. Mostly, different sectors are involved in tourism supply. Concept of Tourism Supply Tourism supply, as a component, refers to the aggregate of all businesses that are involved in providing services to enhance pleasure and leisure in the visited environment. Tourism supply is classified into four components namely transportation, built environment, cultural resources and hospitality. The natural resources include the air, flora and fauna, natural beauty, terrain and water supply. Transportation incorporates items such as airplanes, ships, buses and other infrastructure that involve delivery. The transportation component is linked with the built environment in a complementary manner because the built environment involves the roads, water supply systems, parks, hotels and communication networks. In addition, the hospitality and cultural component summarizes the people as the resource in facilitating successful tourism from their history, courtesy, friendliness and the welcoming spirit (Sinha 2008). Every component is as important as the next in facilitating tourism supply. The process, of producing tourism products, involves input of land, capital and labor, facilities, output of services toward the final output of different experiences. The tourism industry is distinct in that it is consumed by a population that is mobile while the accompanying supply elements are fixed geographically at different locations in different quantities and quality. As a result, businesses should sink a greater amount of capital costs into incorporating different forms of tourism services and centers of production that the destinations appeal to the tourists. There lies its complex nature in crossing the link between the different sectors to accomplish success in creating and offering the required services. The above-mentioned components are usually required separately and/or jointly by a consumer and consumed in a sequence. The complex nature of the tourism supply component is not made any easier by the features that it is associated with. Firstly, the services are intangible as the visitors are not able to examine its quality levels before consumption. Moreover, the final product that is involved in service delivery relies heavily on the competence of the human resources alongside the appeal of the natural resources. Issues Related to Supply in the Tourism Industry The major issues that affect the tourism supply are issues involving the image and the business environment. Generally, the issues are from the complex nature of tourism supply as discussed above. As explained, the image associated with a destination influences the visitors’ attraction. As a result, businesses should take note of its influence before offering goods and services. For example, Pacific Islands’ appeal is as a direct result of marketing the place and its environs as a green and peaceful destination with its beautiful scenery, landscapes and its diversity in offering the best outlet for summer sports to health-related tourism. From the image created, tourism destination and its associated products are able to be integrated within the key element that tourists associate with the destination (Euromonitor International 2014). The business environment also bears heavily on tourism supply. Most governments will allow tourism to operate in a free market economy while the business operates in a perfect market. In other destinations, the government intervenes to assist the sector in marketing and infrastructure. In the case where the government intervenes through its agencies, supply will always tend to be higher than demand. The individual businesses’’ concern is the level of competition that they face in their daily activities alongside government regulation in influencing their provision of activities. This indicates that the business environment and the market conditions are the platforms on which tourism operates on despite their static nature. Due to the ever-evolving consumer trends, fashion and preferences for the visitors presents a challenge to tourism supply. Sectors in the Tourism Supply The tourism supply chain is composed of different sector that are all critical to the success of the tourism sector. Partnerships between the different sectors form an attractive site for visitors because their interests are considered in every aspect of business. Therefore, the supply chain is involved with how the different interests are linked to form a method of specific delivery. There are various forms of partnerships between the sectors in how businesses enter into contracts to supply services to the visitors. Generally, tourism supply is offered by the public, private and not-for-public sectors. Accommodation is vital in tourism supply. In various areas of destinations, it acts as the most significant element for travelling visitors as it doubles up as a place for entertainment and business meetings. In many destinations, accommodation is marketed as part of the general experience. Consequently, accommodation acts as a capital intensive sector in the tourism industry. On the business-side of it, accommodation greatly influences the type of services provided from the human resources attracted by different areas. At a global scale, the accommodation rooms in the restaurant sector intended for visitors is in the excess of 20 million worldwide with a 4% growth rate annually. Europe, Asia, and the U.S.A dominate with this market. In other regions, the private sector owns the rooms (World Tourism Organization 2013). Therefore, it is evident that the accommodation sector is vital in the supply of services for tourists. However, accommodation today being affected by the stiff competition witnessed in the business, new trends in technology and the gradual increase of online-booking in various hotels. The public sector is involved in facilitating tourism infrastructure. In many destination areas, the authorities are responsible for managing resources such as water, roads and other facilities that are used by visitors and residents. At the national level, the national governments are also involved in the decision-making with regard to infrastructure. In other countries, the national government has teamed up with the private sector to facilitate the provision of necessary infrastructure to complement the tourism industry. In addition, the state can also decide to intervene directly through the laws and regulations, support through policies and direct involvement in providing infrastructure. The transport sector has always been critical in tourism supply. It links the visitors from the areas of origin to the destinations. As a result, transport acts as a form of promoting international tourism. In its provision, it enables the tourists to consume the intended products and services that they were attracted to. Not only does the transport sector become so important in facilitating the trips to the destination, but it also acts as a tourist attraction in itself. For example, some visitors will choose to use the road so as to experience more destinations. Nowadays, the transport sector has placed itself strategically by forming formal partnerships with various resorts so that visitors are always guided accordingly on the best services. Different business links are coming together to enhance the supply chain. For example, the expansion of terminals in airports is associated with the increase in tourism activities. In United Kingdom, Heathrow Airport expanded its Terminal 5 to support the future projections in tourism activities. The World Tourism Organization (W.T.O) estimates that tourism and general travel will account for over 13% of worldwide G.D.P by 2015. This indicates just how much transport will be needed to facilitate service delivery (World Tourism Organization 2010). The private sector is another significant actor in the service delivery within the tourism sector. It is involved in the provision of retail services in the tourism supply sector. In North America, 72% of the activities in the restaurant sectors is dominated by the private sector mostly ran by families. However, in bigger destinations such as Japan, retail growth of 15% occurred in 2005 attributed to the involvement of the private sector (Page 2011). The effectiveness of the private sector in the supply of tourism is attached to government involvement in the provision of an enabling environment that encourages the private sector to invest in the industry. Summary Tourism supply is a complex phenomenon that requires its principles and element to be based on the needs of the consumers. As stated, it consists of all the goods, as well as services that are involved in the delivery of tourism products. As a result, many businesses have to act strategically to facilitate the link between the consumers and their services. The United Nations World Tourist Organization (UNWTO) has already forecasted a growth of between 4% and 5% in the growth of international arrivals worldwide. It is recommended that the use of information technology combined with brand creation is a better step to facilitate supply of tourism services. The use of IT enhances understanding on how the supply will be matched to demand in the transport sector. It also increases cooperation between the different sectors involved in tourism supply. The major difference between tourism supply chains from other sectors is that the visitors have to travel to the purchased product. The product, in the tourism sector, has a high service component attached to its value through the involvement of various sectors in the immediate production of required services. The different sectors have to form a link that focuses on the consumer through the business strategies that will act swiftly to the ever-changing fashions, tastes and preferences of consumers. As a result, managing the supply chain to make sure that the visitors’ services are delivered is vital and requires a higher level of management on the part of the sectors. Bibliography Euromonitor International. (2014). World tourism data and statistics. London: Euromonitor International. Page, S. (2011). Tourism management: an introduction. Oxford: Butterworth-Heinemann. Sinha, P. C. (2008). Tourism management. New Delhi: Anmol Publications. Song, H. (2012). Tourism supply chain management. Abingdon, Oxon: Routledge. World Tourism Organization. (2013). Compendium of tourism statistics. Data 2008-2012 Data 2008-2012. Madrid: World Tourism Organization. World Tourism Organization. (2010). Measuring tourism supply. Madrid: WTO. Read More