Question 1

Demand for tourism is income elastic because:

Accepted Answer

Income elastic means that changes in income will result in a greater change in demand. Tourism is a discretionary expense, meaning that people will only spend money on it if they have enough income left over after covering basic necessities. Therefore, as income increases, people are more likely to spend more on tourism, making demand income elastic.

Question 2

Seasonal fluctuations in demand are a problem in most areas. A recommended method of leveling out demand is to:

Accepted Answer

Increasing multiple-use possibilities allows for the area to be utilized in different ways during the off-season, which can help distribute demand more evenly throughout the year. This can include activities such as skiing or other winter sports during the winter months, and hiking or water sports during the summer months. This helps to create a more consistent demand, reducing the impact of seasonal fluctuations. The other options do not address the issue of demand fluctuation and may even exacerbate the problem.

Question 3

Which of the following is true when measuring demand through tax collections?

Accepted Answer

To accurately measure demand through tax collections, it is necessary to separate taxable purchases made by tourists from those made by local residents, as local people pay the same taxes as tourists.

Question 4

From the standpoint of general recognition of tourism's importance in an area, which measure of demand is the most meaningful?

Accepted Answer

The amount of money spent in the area reflects the economic impact of tourism and therefore the level of recognition of its importance. It takes into account all the purchases made by tourists, including lodging, meals, attractions, shopping, etc. This measure provides a comprehensive view of the tourism demand and its contribution to the local economy.

Question 5

The best method of forecasting tourism demand is:

Accepted Answer

The Delphi method combined with mathematical models is considered the best approach for forecasting tourism demand because it incorporates expert judgment through iterative rounds of questionnaires (Delphi) and uses mathematical models to analyze and predict trends, offering a comprehensive and adaptable forecasting method.

Question 6

When we consider demand in tourism, what do we mean?

Accepted Answer

Demand in tourism refers to the number of people who are willing and able to pay for a particular travel experience or product at a given price. It takes into account factors such as affordability, personal preferences, and availability of alternatives.

Question 7

Which of the following does not directly affect the demand for travel to a particular destination?

Accepted Answer

The income level of the host region does not directly affect the demand for travel to that destination. Demand for travel is more directly influenced by factors such as the income of tourists, quality of service at the destination, economic distance between origin and destination areas, and host government policies, rather than the income level of the host region itself.

Question 8

What is meant by elasticity of demand for travel?

Accepted Answer

The answer of What is meant by elasticity of demand...

Question 9

Visitor days as a measure of demand is:

Accepted Answer

Visitor days as a measure of demand is calculated by multiplying the number of visitor arrivals by the average length of stay.

Question 10

Tourism is the backbone of the economy of Nirvana. The industry is given top priority by the government that recognizes the high stakes involved. Given only data on annual arrivals of tourists to Nirvana, which method of projecting future demand should be recommended?

Accepted Answer

Trend analysis is the best method to project future demand based on the given data on annual arrivals of tourists. As tourism is the backbone of the economy of Nirvana and given the high stakes involved, trend analysis can be cost-effective and provide valuable insights into the future demand for tourism in Nirvana. Multiple regression, simple regression, and computer simulation may require larger research budgets and may not be necessary for this specific scenario.

Question 11

Which of the following is true regarding aggregate demand for international pleasure travel?

Accepted Answer

International travel expenditures are price-sensitive because travelers can choose to travel domestically instead or choose a cheaper destination. However, the other options are not necessarily true. While the traveler may wish to maximize utility, they may not always be subject to budget constraints. Additionally, expenditures may create cross-elasticities of travel demand but not necessarily substantial ones. Finally, future demand for international pleasure travel is difficult to accurately forecast due to external factors such as changes in economies, global events, and natural disasters.

Question 12

Which of the following is not a viable method for forecasting tourism demand?

Accepted Answer

Critical path analysis is a method used to plan and manage complex projects, not forecasting tourism demand. A viable method for forecasting tourism demand could be time series analysis, gravitation model, computer simulation, or multiple regression.

Question 13

Which is the most meaningful measure of demand?

Accepted Answer

The amount spent is the most meaningful measure of demand as it directly reflects the economic impact and financial contribution of visitors to a destination.

Quiz 13: Measuring and Forecasting Demand