Step 9 Monitoring and Evaluation
3.2 MODELS OF TOURISM PLANNING AND DEVELOPMENT
3.2.2 Visitor Demand Model
Several statistical methods or econometric analyses can be used to project demand and thus embark on proper tourism planning for the future (Goeldner & Ritchie (2009). The following models require a degree of statistical or mathematical sophistication, familiarity with computers, and a clear understanding of the purpose and limitations of such projections (Goeldner & Ritchie, 2009:648). Firstly, the Trend
Visitors and Community (Underpins the whole structure)
Tourism operators and suppliers
Suppliers of products & experiences
Collaboration and communication
Local Government
Local marketing within the region
Local visitor services (VIC’s)
Local product development
Regional Tourism Organisations
Regional marketing outside the region
Regional website cooperative advertising
Visiting journalists, promotion shows
Industry training
Coordinating regional research
Regional tourism planning and development Local Tourism Organisations
Local visitor activities and issues (VIC’s)
Service standards
Liaison with local community/operators
State Tourism Organisations
State marketing
State development
State leadership
State policy and coordination
State/Territory Local visitor activities (VIC’s)
Service standards
Liaison with local community/operators
State marketing & development
State leadership & coordination
State policy & coordination
Dept. Of Tourism, Regional Development and Industry
Regional Economic Development Organisations
National Tourism Industry Council
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Analysis Method involves the interpretation of historical demand data. For instance, if a record of the number of tourist arrivals in an area on an annual basis is available, and then demand for future years can be projected using this information
The first step is to plot the available data on the graph: time (in years) against the tourist arrivals. Once this has been done, a linear trend can be established which best captures the changes in demand levels in the past. Demand projections for future years are made by extending the trend line up to the relevant year and reading the demand estimate off the graph. The advantage of using trend analysis is that the data needed is basic and easy to obtain. Only one data series is required: visitor arrivals or some other measure of demand on a quarterly or on an annual basis for the past few years. In addition, the method is simple and does not require a great deal of mathematical sophistication. Characteristically, however, the simplicity of the model is to a large extent a trade-off for the usefulness of the results. For instance, the future demand estimates obtained in this manner should be interpreted with a great deal of caution, because, trend analysis does not explain demand in any way, if demand changes from year to year, this would be expectedly because of changes in the components of demand. Trend analysis does not acknowledge the influence that these variables have on demand levels and, therefore, cannot explain why it changed. To extrapolate from a linear trend is to assume that past growth trends will continue without change. Such an assumption is tentative at best. Estimates based on a constant rate tend to become very unrealistic in rather short periods of time, due to the nature of compounding (Goeldner & Ritchie, 2009:649).
Secondly, there is a Simple Regression: Line Least Squares Method Plots whereby information on demand levels for past years is plotted against one important determinant of demand, being income prices. Through the application of a statistical technique called least squares regression, a straight line is used to explain the relationship between demand and the particular variable being considered, such as income levels for tourists. Income being the major determinant of demand, simple regression explains demand to some extent. It is superior to trend analysis for this reason. Besides, the methodology is still relatively simple and can be presented
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visually, and data needed for this method are relatively easy to collect. Thus, this method is suitable for this research investigation.
Thirdly, the Multiple Regression Method is the major draw back of simple regression in that only one variable can be considered at a time. In reality, demand is affected by all the factors that influence propensity and resistance. It may not be feasible to include all these variables at one time, but it is certainly practical to isolate a few that are particularly relevant to determining demand and deal with these in one model.
The Multiple Regression is one way to do this. It is essentially the same as simple regression, except that now more than one variable can be used to explain demand (Goeldner & Ritchie, 2009:650).
According to Bramwell (2004:77) in the 1980s and 1990s there were the first studies of the social, economic and political impacts of tourism growth. These studies demonstrated that many problems exist at the local level and they also identified the intense scepticism of locals about this development model. Researchers therefore, have developed range of strategic tourism planning models as a way of explaining the developmental potential of tourism destinations in various situations. These models have been tested around the world as means of better understanding of the impacts of tourism on communities and to develop appropriate strategies for managing developments (Murphy & Murphy, 2004:34).
On the other hand, understanding the number of visitors and their use of infrastructure/amenities while visiting South Africa and its regions (visitor demand), is essential to enable effective planning for tourism by local authorities, Provincial Tourism bodies and businesses which focus on the tourism industry (NDT, 2008:23).
Figure 3.2 provides a visitor demand model that indicates the components that must be considered when planning for a destination to enable tourism planners to check what they know about visitors to South Africa and ways to obtain data on the current and future numbers of visitors to the destination. An essential starting point in understanding the needs of visitors is to have a clear definition of what is meant by the visitor industry. In general terms the visitor industry is understood to include
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international and domestic overnight and day excursionists and all the types of tourists visiting a destination must be understood to ensure proper planning for their demands as indicated in Figure 3.2 (NDT, 2008)
FIGURE 3.2: VISITOR DEMAND MODEL FOR A DESTINATION
Source: (NDT, 2008)
International Visitor to South Africa
International and Domestic Visitor Arrivals to a Region/ Destination to SA
Purpose of Visit
Visiting Friends and Relatives/
VFR
Holiday/
Leisure
Business Other
Services/ Facilities Utilised
Accommodation
Activities
Infrastructure
Transport
Attractions
Amenities
Length of Stay (Nights)
Visitor Satisfaction
Economic Impact
87 3.2.3 Project Development Model
Project development models deal with specific projects and rational decision making through identification of goals, evaluation of alternatives and selection of optimal choices is advocated. A number of principles and fundamentals need to be applied to the development of tourism projects. A combined modelling framework consisting of goal modelling, process modelling and business modelling is essential for project development models (Persson, 2009:115). Figure 3.3 highlights key fundamental principles which are crucial in modelling planning, development, coordination and management of tourism projects.
FIGURE 3.3: TOURISM PRINCIPLES FOR DEVELOPMENT
Source: Urban Economics Property Limited (2010)
The development of the tourism sector will be only one of the numbers of options for development before government, since government resources will inevitably be inadequate for all competing claims upon them. In view of this, the proposed investment in tourism (projects) must be justified in terms of anticipated contribution to the economic development of the country (Bhatia, 2002:230). The tourism principles presented in Figure 3.3 imply that any tourism project proposed for
Tourism Development Tourism as a
system Linkages with
LED
Demand driven sector
Private sector driven, government
facilitated
Sustainable development
Responsible Development
Tourism clustering
Tourism competitive
advantage
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development must be developed in the context of the tourism system of a destination, link to other local economic development initiatives, be demand driven, be developed in a sustainable manner and consider tourism clustering as much as possible to enhance tourism competitiveness of a destination. Tourism principles proposed in Figure 3.3 must therefore always be considered when developing tourism projects in KwaZulu-Natal.
There are also very critical tourism product elements, indicated in Figure 3.4, that need to be considered in the product development model. Drawing from the value creation system in destinations, there are strong relations and dependencies through complementarity and externalities between the elements of the core system and surrounding elements (Walder et al, 2006:33). The project development model can therefore be used in all kinds of tourism projects, including but not limited to those indicated in Figure 3.3.
FIGURE 3.4: TOURISM PRODUCT DEVELOPMENT ELEMENTS
Source: NDT (2008)
ACTIVITIES
ACCOMMODATION
TRANSPORT
RESTAURANTS ENTERTAINMENT
RETAIL ATTRACTIONS
TOURISM PRODUCT
89 3.2.4 Management/ Marketing models
The management and marketing model relates to management and marketing, looking especially to such topics as the marketing environment, design criteria, and information flows. The idea that marketing decisions can be supported with analytical, mathematical models took off in the sixties of the last century (Wierenga, 2008:3). Although there was a lot of initial optimism, it turned out that the availability of marketing models does not automatically imply that these models are actually used for marketing decision making in practice. The acceptance and use of marketing decision models has been a continuing problem. This has created a stream of research on the bottlenecks for the implementation and use of marketing models in practice and how to overcome them (Wierenga, 2008:9)
KwaZulu-Natal as a tourist destination is competing with other destinations regionally and in the world therefore there should be strong tourism marketing initiatives based on tried and tested marketing models.