The global tourism market is a big industry based on people’s desire to travel, enjoy and create adventure. This market is shaped by customer demand which is characterized by the levels, types and spatial characteristics of demand. Tourists are the primary demand source in the tourism sector. People may visit places for business, holidays or other purposes and may stay for long or short periods. The tourism industry can be devided into three market segments depending on the type of tourists. Local tourists come from within a particular country and include small groups of people seeking daytime services(Ageeva & Foroudi, 2019). Regional tourists are international travelers who come from nearby countries. They range from small family groups to large ones. Regional tourism demand is periodical. International tourists come in small groups, are mostly influenced by the desire to explore and have a high turnover rate(Liu et al., 2019). Tourism in South Africa is growing fast and is mostly characterized by regional visitors although the number of visitors from other continents is also increasing substantially.
Tourism supply describes the elements and resources that attract and make tourists comfortable. This includes infrastructure and reception services. Accommodation, telecommunication and transportation services make up infrastructure; whereas reception services involve visitor managers, travel agencies, and tourist offices(Inkson & Minnaert, 2018). Tourist products are supplied by the hospitality, transport, and attraction businesses. Hospitality forms the most significant part of the tourism suppliers with products ranging from entertainment, food and accommodation. The government and NGOs also play a role in the tourism supply market.
The supply and demand theory explains the relationship between tourism demand and supply for a particular product, for example, accommodation. The demand law describes the unwillingness of customers to buy an economic good when its price increases. The law of supply says that suppliers will offer more tourist products to the buyers when the price rises(Buechner, 2018). Product prices depend on production costs and other factors such as labor and overhead costs. In this market mechanism, customers are the source of demand. If buyers wish to purchase more products than the available supply, the price goes up. On the other hand, prices fall when the supply is high but customers are only willing to purchase less. Essentially, the rise in the price of tourism products increases supply but reduces willingness of tourists to buy. The supply and demand equilibrium are however difficult to achieve due to the dynamic nature of the tourism industry.
Post-Pandemic Tourism Demand
The COVID-19 pandemic negatively impacted the tourism industry. The easing of COVID-19 restrictions has positively affected the demand for hotel accommodation. During the pandemic, hotel bookings reduced as people were encouraged to stay at home to reduce infections. Now that people are allowed to travel, the demand for hotel accommodation is on the rise. Various hotels experience demand differently, for example, economy hotels have higher demand compered to luxury hotels because of the price factor. Customers are more price sensitive to price and will opt to cheaper hotels.
Travel and social restrictions prevented tourism operations and led to the closure of many destinations. However, as the restrictions were eased, the industry is slowly pulling back to its initial state. This is all thanks to consumer willingness to experience outdoors and social interactions. The industry in certainly changing to adapt to the new market trends. For example, the pandemic is not over yet and customers are aware of this fact. Therefore, demand has shifted to destinations with minimal COVID-19 infections and assured safety(Park & Lehto, 2021). Hotel owners compete on providing the safest products that customers are willing to purchase.
Domestic tourism is thriving after the pandemic. The travel restrictions left many travelers stranded in tourist destinations during the pandemic. This has increased caution among travelers on the destinations they are willing to visit. Tourists prefer to travel domestically or regionally as opposed pre-pandemic periods. Also, governments are increasing their support for domestic tourism thus encouraging more customers to opt for domestic tourism(Yuni, 2020). By offering financial and policy support, countries are reviving their domestic tourist sites to generate revenue. Domestic destinations like theme parks, local hotels, open-air activities and beaches are now receiving more local tourists. Hence, the pandemic encouraged the growth of domestic tourism and increased its preference among customers. It also added to the innovation level to create international experiences thus attracting more customers. Therefore, the demand for domestic tourism has increased due to the increase in quality and variety in product supply.
The post-pandemic economic climate is significantly affecting the demand for tourism by reducing the availability of disposable income. The pandemic left many financially pressed from job layoffs to losses in business. Consumers are therefore trying to recover financially(Kovzanadze, 2020). There is high demand for low-priced tourist destinations and tourism products. People are willing to travel but on budget. High inflation rates fueled by rise in fuel prices have also worsened the global economic situation and influenced consumer spending behavior. Thus, tourists are less willing to purchase expensive products and will prefer cheaper accommodation options. Suppliers thus compete by providing offers to tourists to reduce product prices and those with quality affordable products receive more customers. Therefore, the bad economic climate has affected customer purchasing power thus reducing demand.
References
Ageeva, E., & Foroudi, P. (2019). Tourists’ destination image through regional tourism: From supply and demand sides perspectives. Journal of Business Research, 101, 334–348.
Buechner, M. N. (2018). A comment on the law of supply and demand. Journal of Philosophical Economics, 11(2), 67–80.
Inkson, C., & Minnaert, L. (2018). Tourism management: An introduction. Sage.
Kovzanadze, I. (2020). Economic Challenges During COVID-19 and Post-Pandemic Era. Economics and Business, 27–33.
Liu, J., Pan, H., & Zheng, S. (2019). Tourism development, environment and policies: Differences between domestic and international tourists. Sustainability, 11(5), 1390.
Park, S., & Lehto, X. (2021). Understanding the opaque priority of safety measures and hotel customer choices after the COVID-19 pandemic: An application of discrete choice analysis. Journal of Travel & Tourism Marketing, 38(7), 653–665.
Yuni, L. H. K. (2020). Analysis of domestic tourist travel preferences post-Covid-19 pandemic. Journal of Applied Sciences in Travel and Hospitality, 3(2), 80–88.
