Destination Marketing: Optimizing Resource Allocation Using Modern Portfolio Theory

2021 ◽  
pp. 004728752110250
Author(s):  
Khairil Johar ◽  
David Tan ◽  
Yun Maung ◽  
Ian Douglas
Keyword(s):  
Tourism Industry ◽  
Demand Elasticity ◽  
Destination Marketing ◽  
Optimization Approach ◽  
Policy Makers ◽  
Inbound Tourism ◽  
Direct Guidance ◽  
Visitor Survey ◽  
Tourism Flows ◽  
Marketing Budget

Despite the significant contribution that tourism generates for national economic health, the tourism industry is challenged by seasonal and periodic volatility in arrivals. This volatility causes inefficiencies in the allocation of a destination’s resources. Policy makers and operators prefer a steady and constant inflow of tourists. Though prior studies have applied a portfolio optimization approach to inbound tourism flows, this study is the first to consider the destination’s marketing budget and each tourism markets’ heterogeneous marketing expenditure–demand elasticity. Our model provides destination marketing organizations with direct guidance as to how to allocate their marketing budget to facilitate portfolio profiles that are efficient from a risk-reward perspective, and that are attainable given budget constraints and known marketing expenditure–demand elasticity patterns. Using Tourism Research Australia International Visitor Survey data, we find that variability in tourism fluctuations can be reduced and inbound tourism numbers/spending significantly increased by implementing smarter (data-driven) marketing budget allocations.

scholarly journals Grey Forecasting of Inbound Tourism to Bali and Financial Loses from the COVID-19

2021 ◽  
Vol 1 (1) ◽  
pp. 48-57
Author(s):  
Irsyad Yoga ◽  
I Gede Agus Yudiarta
Keyword(s):  
Service Providers ◽  
Tourism Industry ◽  
Grey Model ◽  
Forecasting Model ◽  
Financial Loss ◽  
Policy Makers ◽  
Industry Sector ◽  
Grey Forecasting ◽  
Inbound Tourism ◽  
Statistical Agency

Management and planning in the Indonesian tourism industry is an important matter. It involves responding to changes and uncertain conditions, especially in the tourism industry sector in Bali, Indonesia. Bali is a tourist spot that relies on foreign tourists. When a situation is not conducive, such as the COVID-19 outbreak that befell unexpectedly, proper management and planning are challenging without accurate forecasts. The current study used the Even Grey Forecasting model EGM (1,1,α,θ) to forecast the number of tourists to Bali, a famous tourist spot in Indonesia, and the approximate financial loss incurred from the pandemic in 2020 is quantified. These objectives are achieved through the data collected from the Bali statistical agency and analyzed through the grey model and some mathematical computations. The results indicated that the pandemic's impact on inbound tourism was severe, and the economy needs some time to recover. The study reported a loss of more than $7.3 billion to Bali due to the COVID-19 outbreak. It is possibly the first study of its kind, and its findings are important for the policy-makers, Tour & Travel service providers, and tourism-related businesses.  

Prioritizing Strategic Factors of Creative Tourism Industry in Iran by Analytic Network Process (ANP)

2020 ◽  
Vol 24 (5) ◽  
pp. 553-565
Author(s):  
Reza Kiani Mavi ◽  
Hamed Gheibdoust ◽  
Ahmad A. Khanfar
Keyword(s):  
Policy Making ◽  
Analytic Network Process ◽  
Influential Factors ◽  
Tourism Industry ◽  
Policy Makers ◽  
Business Support ◽  
Network Process ◽  
Strategic Factors ◽  
Strategic Policy ◽  
Strategic Policies

Nowadays, it is obvious that creative tourism industry has become very essential for countries and societies; therefore, governments work on constituting policies in order to develop this industry. To be successful in improving creative tourism industry, governments should identify the influential factors and focus on ones that are more important rather than investing a bit on many different factors. Because of the interrelations among factors, this research is aiming to prioritize factors that influence strategic policies of creative tourism industry in Iran using analytic network process (ANP). Data were collected during the period of May 2017 to February 2018. Participants in this research are 13 tourism experts with more than 10 years' experience in the field. Results show that the most influential criterion is "business support" and the most influential subcriterion is "supporting midsize businesses." This study helps policy makers to improve creative tourism by emphasizing on those factors that have high priority from the viewpoint of strategic policy-making.

The Impact of Economic Crisis on Tourism Industry: A Bangladesh Perspective

2016 ◽  
Vol 2 (1) ◽  
Author(s):  
Md. Ziaul Haque
Keyword(s):  
Economic Crisis ◽  
Tourism Industry ◽  
Political Crisis ◽  
Strong Impact ◽  
Negative Consequences ◽  
Policy Makers ◽  
Tourism Product ◽  
International Tourist ◽  
Sustained Recovery ◽  
The Impact

The tourism sector is experiencing numerous challenges as a result of the global economic crisis. After a significant contraction in 2009, tourism rebounded strongly  in  2010  and  in  2011  the  international  tourist  arrivals  and  receipts  are projected to increase substantially. The Tourism industry is expected to show a sustained recovery in 2012. The crisis has particularly strong impact and slightly negative consequences in Bangladesh. The country is undergoing a political crisis, as well, and it seems that the forthcoming elections may be the only solution for the restoration of stability and social peace.  In addition, tourism can be the driving force behind Bangladesh economic recovery. However, for its achievement the country’s policy makers should take several measures towards restructuring and improving the sector. These measures include: enhancement of alternative forms of tourism; environmental protection; creation of quality infrastructure; and boost of competitiveness through a tourism product that offers value for money

The Impact Of Economic Crisis On Tourism Industry: A Bangladesh Perspective

2015 ◽  
Vol 1 (1) ◽  
pp. 15
Author(s):  
Md. Ziaul Haque
Keyword(s):  
Economic Crisis ◽  
Tourism Industry ◽  
Political Crisis ◽  
Strong Impact ◽  
Negative Consequences ◽  
Policy Makers ◽  
Tourism Product ◽  
International Tourist ◽  
Sustained Recovery ◽  
The Impact

The tourism sector is experiencing numerous challenges as a result of the global economic crisis. After a significant contraction in 2009, tourism rebounded strongly  in  2010  and  in  2011  the  international  tourist  arrivals  and  receipts  are projected to increase substantially. The Tourism industry is expected to show a sustained recovery in 2012. The crisis has particularly strong impact and slightly negative consequences in Bangladesh. The country is undergoing a political crisis, as well, and it seems that the forthcoming elections may be the only solution for the restoration of stability and social peace.  In addition, tourism can be the driving force behind Bangladesh economic recovery. However, for its achievement the country’s policy makers should take several measures towards restructuring and improving the sector. These measures include: enhancement of alternative forms of tourism; environmental protection; creation of quality infrastructure; and boost of competitiveness through a tourism product that offers value for money

scholarly journals Tourism Destination Marketing: Academic Knowledge

Encyclopedia ◽  
2020 ◽  
Vol 1 (1) ◽  
pp. 42-56
Author(s):  
Marios Sotiriadis
Keyword(s):  
Tourism Industry ◽  
Destination Marketing ◽  
Tourism Destination ◽  
Academic Knowledge ◽  
Marketing Activities ◽  
Function Domain ◽  
Negative Impacts ◽  
Marketing Principles ◽  
Destination Management Organizations ◽  
Goals And Objectives

A holistic, multi-organization view of marketing or destination management organizations (DMOs) who must muster the best efforts of many partner organizations and individuals (stakeholders) to have the greatest success. Destination marketing is described as “a continuous, sequential process through which a DMO plans, researches, implements, controls and evaluates programs aimed at satisfying tourists’ needs and wants as well as the destination’s and DMO’s visions, goals and objectives”. The effectiveness of marketing activities depends on the efforts and plans of tourism suppliers and other entities. This definition posits that marketing is a managerial function/domain that should be performed in a systematic manner adopting and implementing the appropriate approaches, as well as suitable tools and methods. In doing so, it is believed that a tourism destination (through the organizational structure of a DMO) can attain the expected outputs beneficial to all stakeholders, i.e., the tourism industry, hosting communities/populations, and tourists/visitors. The effective implementation of tourism destination marketing principles and methods constitutes an efficient and smart pillar, a cornerstone to attain a balance/equilibrium between the perceptions and interests, sometimes conflicting, of stakeholders by minimizing the negative impacts and maximizing the benefits resulting from tourism. All the same, it is worth noting that marketing is not a panacea, nor a kind of magic stick.

Measuring the effects of tourists’ relative willingness to spend and third-degree price discrimination on inbound tourism expenditure differentials

2021 ◽  
pp. 135481662110300
Author(s):  
Usamah F Alfarhan ◽  
Khaldoon Nusair ◽  
Hamed Al-Azri ◽  
Saeed Al-Muharrami ◽  
Nan Hua
Keyword(s):  
Price Discrimination ◽  
Profit Maximization ◽  
Tourism Industry ◽  
Theoretical Argument ◽  
Total Expenditure ◽  
Conditional Quantile ◽  
For Profit ◽  
Inbound Tourism ◽  
Tourism Expenditure ◽  
Quantile Estimates

Tourism expenditures are determined by a set of antecedents that reflect tourists’ willingness and ability to spend, and de facto incremental monetary outlays at which willingness and ability is transformed into total expenditures. Based on the neoclassical theoretical argument of utility-constrained expenditure minimization, we extend the current literature by applying a sustainability-based segmentation criterion, namely, the Legatum Prosperity IndexTM to the decomposition of a total expenditure differential into tourists’ relative willingness to spend and an upper bound of third-degree price discrimination, using mean-level and conditional quantile estimates. Our results indicate that understanding the price–quantity composition of international inbound tourism expenditure differentials assists agents in the tourism industry in their quest for profit maximization.

scholarly journals Assortative Matching of Tourists and Destinations: Agents or Algorithms?

2021 ◽  
Vol 13 (4) ◽  
pp. 1987
Author(s):  
Ralf Buckley ◽  
Mary-Ann Cooper
Keyword(s):  
Tourism Industry ◽  
Digital Data ◽  
Share Price ◽  
Academic Disciplines ◽  
Destination Marketing ◽  
Assortative Matching ◽  
Multiple Sources ◽  
Travel Agents ◽  
Price Trends ◽  
Automated Algorithms

We propose that assortative matching, a well-established paradigm in other industry sectors and academic disciplines, can underpin the concept of destination matching. This provides a new foundation to integrate research concepts and terminology in destination marketing and destination choice. We argue that the commercial tourism industry already applies destination matching approaches, with three historical phases. Initially, matching of tourists and destinations relied on the tacit expertise of specialist agents. This still applies in specialist subsectors. For generalist travel and accommodation, human agents were partially replaced by online travel agents, OTAs, which are customised algorithms operating only in the travel sector. These still exist, but their share price trends suggest decreasing significance. Currently, automated assortative algorithms use multiple sources of digital data to push appealing offers to potential purchasers, across all retail sectors. Digital marketing strategies for tourism products, enterprises, and destinations are now just one category of generalised product–purchaser matching, using entirely automated algorithms. Researchers do not have access to proprietary algorithms, but we can identify which components they incorporate by analysing their underlying patents. We propose that theories of destination marketing and choice need to reflect these recent and rapid real-world changes via deliberate analysis of destination matching.

Tourism Productivity Theory and Measurement for Policy Implications: The Case of Australia

2019 ◽  
Vol 59 (2) ◽  
pp. 247-266
Author(s):  
Tien Duc Pham
Keyword(s):  
Labor Productivity ◽  
Holistic Approach ◽  
Tourism Industry ◽  
Policy Implications ◽  
Policy Makers ◽  
Average Growth ◽  
Multifactor Productivity ◽  
Capital Productivity ◽  
Productivity Theory

Tourism productivity measures are quite diverse, not always compatible and usually based partly on labor productivity for hotels and restaurants. This article develops a holistic approach that integrates the principles of the growth accounting framework and tourism satellite account to measure multifactor productivity, labor productivity and capital productivity for the Australian tourism industry. This study shows that tourism has been identified as a reservoir for other industries through the ebbs and flows of labor demands. Compared with the rest of the economy, the average growth of labor productivity—that is, income per unit of labor—for tourism is stagnant, and has reached an unprecedented low, six times below the market sector average, mainly because of low multifactor productivity. The results are valuable for policy makers and the lobbying groups wanting to identify areas of need for policy changes to ensure the healthy long-term growth of tourism.

scholarly journals FORECASTING INTERNATIONAL TOURIST ARRIVALS IN MALAYSIA USING SARIMA AND HOLT-WINTERS MODEL

2020 ◽  
Vol 5 (18) ◽  
pp. 41-51
Author(s):  
Norliana Mohd Lip ◽  
Nur Shafiqah Jumery ◽  
Fatin Amira Ahmad Termizi ◽  
Nurul Atiqa Mulyadi ◽  
Norhasnelly Anuar ◽  
...  
Keyword(s):  
United Kingdom ◽  
Mean Square Error ◽  
Time Series Data ◽  
Tourism Industry ◽  
Series Data ◽  
Percentage Error ◽  
Mean Square ◽  
Public And Private ◽  
The United Kingdom ◽  
Tourism Flows

Tourism can be described as the activities of visitors who make a visit to the main destination outside their usual environment for less than a year for any purpose. The tourism industry has become one of the influential sectors in global economic growth. Thus, tourism forecasting plays an important role in public and private sectors concerning future tourism flows. This study is an attempt to determine the best model in forecasting the international tourist's arrival in Malaysia based on Box-Jenkins and Holt-Winters model. The comparison of the accuracy of the techniques between Box-Jenkins SARIMA and Holt-Winters model was done based on the value of Mean Square Error (MSE), Root Mean Square Error (RMSE) and Mean Absolute Percentage Error (MAPE). The secondary time series data were obtained from the Tourism Malaysia Department, which consists of a number of tourist arrivals from Singapore, Korea, and the United Kingdom from the year 2013 until the year 2017. The findings of this study suggest that the SARIMA and Holt-Winters model are suitable to be used in forecasting tourist arrivals. This study found that the Holt-Winters model is the appropriate model to forecast tourist arrivals from the United Kingdom (UK) and Korea. While SARIMA (1,1,1) (1,1,1)12 is the appropriate model for forecasting tourist arrivals from Singapore.

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