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136 demand
�Illustrates the use of Delphi; a subsequent note
in the same journal issue comments on this
article.)
Smith, S.L.J. �1996) Tourism Analysis, 2nd edn,
Harlow: Longman, 143±8. �Describes the stepby-step
procedures used to make a Delphi
forecast.)
demand
STEPHEN SMITH, CANADA
People have needs for goods and services and they
are willing to pay for them. These goods and
services are provided and sold by companies
forming the supply sector. The willingness and
ability of consumers to fulfil their needs constitutes
the demand for these goods and services. The
buyers and sellers constitute the demand and
supply sectors. These two meet in a market
�whereas public goods are indivisibly distributed
throughout the society by the state). The higher the
price, the less consumers are willing to buy the
product. Correspondingly, the lower the price, the
less attractive the deal is from the suppliers' point
of view. The interaction between buyers and sellers
in the market determines the price and quantity at
which the products are sold. In other words,
neither the supply sector nor the demand sector
alone dictates the price of the product or the
quantity exchanged. The interaction will eventually
lead to a market equilibrium, meaning that a
balance is found between the supply of and
demand for the product.
The products provided by the supply sector
consist of physical goods and immaterial services.
Physical goods are transported from the site of
production and made available to the consumers
through distribution channels. Services, in contrast,
are intangibles, and are simultaneously
produced and consumed in the market. The
process of creating a product/service and making
it available in the market by the supply sector
entails product planning, marketing, pricing
and other activities enhancing its sales.
In tourism, the concept of demand may be
extended to cover individuals' needs for consuming
and experiencing places. Tourists buy souvenirs
and clothes and use services such as accommodation
and amusement parks �see theme park).
However, their major motive may lie in the
destination itself, as a tourist in Paris or Rome
might like to experience the local atmosphere and
become part of the host community. The
consumption of tourism places manifests itself as
the tourist's subjective experience.
Tourism demand is the total of people participating
in tourism activities, presented as the
number of tourist arrivals or departures, amount
of money spent or other statistics. Tourists have a
demand for goods, services and places that are
marketed as individual products and product
packages. A package tour is a pre-purchased set
of products including transportation, activities
and other services. The tourist may buy a trip
from a tour operator that has created an array of
package tours in co-operation with airlines or other
traffic contractors, hotels, motels or even subcontractors.
The desire for any goods and services relates to
changes in the demand and supply sectors, and
their interaction. As to tourist buyers, they easily
react to an increase or decrease in their personal
disposable income and its distribution, time
budgets and other personal motives �see push/
pull factors). There may also be more general
changes in the demand generating area, such as
economic depression and political uncertainty.
Changes among the sellers instead refer to
variations in the price level compared to rival
destinations, business environment, transportation
connections and product assortment, among other
factors. The contact between the buyers and sellers
�demand and supply sectors) is sensitive to tourist
promotion, attainability and marketing �see also
promotion, place).
Reactions of demand to economic changes are
expressed as elasticities. The income elasticity of
demand compares the percentage change in
quantity demanded in relation to an equal change
in disposable income. A ratio of less than one
represents an income-inelastic situation where
consumers react weakly to changes in their income.
A ratio of greater than one portrays an opposite
situation where buyers react more easily to changes
in their disposable income. Tourism has been
found to be relatively income-elastic when