Travel and tourism – Demand

Business travel and tourism demand is influenced by a broad range of factors found in both the generating region and the destination. These factors tend to focus on the forces that will influence demand between a specific generating region and a particular destination. They also give an indication of the factors that will influence demand overall in any particular generating region. However, this is a highly generalized picture and specific factors will influence the demand for particular forms of business tourism such as incentive travel and training courses. Let us now look at how the market can be subdivided and segmented.

Seasonality

It is often said that one of the advantages of business travel and tourism is that it is less seasonal than leisure tourism. While the season is longer and less pronounced than leisure tourism, business travel still does have an element of seasonality. In general it is an activity which takes place outside the summer holiday months, in the Northern Hemisphere at least, and is predominantly a Monday to Friday activity. It is now time for us to move on to look at the geographical pattern of demand for business travel and tourism.

Regions of the world

Here we will concentrate on the issue of demand in what are probably the two leading business tourism areas of the world, namely, Europe and Asia. The European business travel market O’Brien, in 1998, published an interesting paper on the situation in the European business travel market in 1997 and 1998, using a variety of sources. The main conclusions of his work were as follows:

1 Europe, in 1998 accounted for an estimated 47 per cent of all business trips (international and domestic) throughout the world.

2 The split of revenues from business travel in Europe in 1998 were estimated to be: Western Europe $180.2 billion; Eastern Europe $5.8 billion.

3 The top four business travel markets in Europe in terms of expenditure in 1998 were, in descending order of importance: France; Italy; Germany and the UK. France had a 17 per cent share of all European expenditure on business travel in 1998.

4 Business travel expenditure as a percentage of all travel expenditure varied from 13 per cent in Germany to 37 per cent in Turkey.

5 The highest proportion of outbound business travel in 1998 came from the UK market.

Future projections of demand

As we saw from the example of Asia, forecasting future demand in business travel and tourism is fraught with problems and made very difficult by unforeseen circumstances.

Nevertheless, attempts are always being made to forecast the future of demand in this sector.

O’Brien (1998) estimated that the European business travel market would grow, annually, by 3.7 per cent in real terms from US$186 billion in 1998 to US$380 billion by 2010. Whether this becomes reality will depend upon the way the European economy develops and the success or otherwise of the single European currency, the Euro. It will also depend on how the political and economic situation evolves in Eastern Europe.

 Conclusion

1 The business travel market is a complex and fragmented market which is constantly changing.

2 Europe currently dominates the global business travel market.

3 There are significant national differences in the nature of the business travel market.

4 Predicting the future of demand in business travel is difficulty and risky. Nevertheless, overall, it seems that business travel and tourism is a buoyant, growing market across the world. In the next chapter we will look at the supply side of business travel and tourism.

This article is about:

• tourism demand
• what is tourism demand
• travel and tourism
• demand for travel and tourism