Tourism Research Methods

Approaches to Tourism Demand and Forecasting

Types of Research

Basic versus applied Cross-sectional versus longitudinal Qualitative versus quantitative Primary versus secondary

Basic Research

Basic research is a pure research It is useful for specific issues The Knowledge is expressed in general

laws, theories or models. Associated with universities Induction and deduction

Induction / Deduction

In induction repeated observations and analysis of data leads to the formulation of theories or models that links these observation in a meaningful way.

Deduction begins with an existing theory or model and applies this to a particular situations to see whether it is valid in that case or not.

Induction moves from the specific to general Deduction moves the general to specific

Testing induction and deduction methods

Applied Research Applied research is directed towards specific practical problems

and outcomes It is associated with product development, identification of

target markets, community reaction towards It is associated with Government, Non-governmental

organizations and private organizations. If it is industry based the results must be kept confidential

Eg: Plog’s psychographic segmentation

Cross Sectional Research

Cross Sectional Research is a snapshot approach that describes a situation essentially at one point of time.

Longitudinal Research It is also called as trend research Several time periods with several snapshots. Survey of the Same respondents from one time period to

the next. Ability to monitor the changing behaviour of a given

sample Eg. A same question may be asked before and after

( Consumers who have already booked a trip to a particular location.

Qualitative Research Qualitative research can be initially defined as

a mode of research that does not place its emphasis on statistics or statistical analysis.

Small number of observations or respondents, but they are in depth

This method is suitable for the situations, where little is known about the subject matter

Eg: Select a group of 10 residents from any destination and conduct an in depth interview with each to see what they think about the tourism sector in their community.

Quantitative Research

Quantitative Research relies on the collection of statistics that are then analyzed through a variety of statistical techniques.

The quantitative research techniques typically are data condensers

It involves a very rigorous process of hypothesis formulation, observations, data collections, data analysis, rejections or acceptance of hypothesis.

Primary Research

Primary research the data are collected directly by the researcher and did not exists prior to their collection

Survey

Characteristic of three ideal survey types

Secondary Research

Academic Journals Academic books Statistical Compilations Trade publications News papers and Magazines Internet Topographical maps and remotely sensed

images

Comparative Studies

Analysis of a problem in two or more places Cross national context To benefit form other country or place Solve the specific problems Eg. Under what circumstances does the

development of a tourist industry result in deterioration of environmental quality in a host country

Demand forecasting – A Broad Overview

“Market demand for a product class is the total volume which would be bought by a defined customer group in a defined location in a defined time period under defined environmental conditions and marketing efforts and at a given price”

Organizations Sales Forecast

The organization’s sales forecast is the expected level of company sales based on a chosen marketing plans and assumed environmental conditions.

Uses of Forecasts Short term ( 3-6-12 months) planning for

production, manpower, raw materials, inventory etc., and for raising necessary working capital

Medium term(1 -3 Years) Planning for addition of balancing equipment and marginal expansion

Long term( 5 – 10 Years) Planning for substantial expansion, setting up of new units, Diversification, location of raw materials from the long term point of view

Forecasting Stages

Forecast of Environment

Industry forecast

Organization / Company Sales Forecast

Grouping of demand forecasting

All demand forecasts can be grouped broadly under three heads, Those based on :

(i) What people say – Future

(ii) What people do – present

(iii) What people have done – past

Forecasting Techniques

Forecasting methods falling under the three broad groups of techniques are as follows.

(i) Based on what people say

(ii) Based on what people Do

(iii) Based on what people have done

Based on what people say

Survey of Buyer’s intentions Sales Force Composite Method Jury of the executive opinion method Expert opinion method End use method Delphi Technique

Based on what people do

Putting the product to a market test to elicit buyers’ responses and using them to make projections of demand

Based on what people have done

Trend methods Time series Analysis Exponential smoothing models Regression models ( simple, Multiple Log form and

Non-long form Econometric models Input-out put models Historical Analogy method Geographical Analogy method

Based on what people say Survey of Buyer’s intentions

a forecasting technique in which known purchasers of a product are asked to predict their requirements for a given future period 

Sales Force Composite Method

method of forecasting future demand for a product by adding together what each member of the sales force expects to be able to sell in his or her territory

Jury of the executive opinion method

a forecasting method based on the opinions of senior management 

Expert opinion method

a sales forecasting method in which outside specialists or industry experts - economists, academics, management consultants, advertising executives, etc - are asked to assist in the preparation of the sales forecast

Delphi Technique

The Delphi method is a systematic, interactive forecasting method which relies on a panel of independent experts. The carefully selected experts answer questionnaires in two or more rounds. After each round, a facilitator provides an anonymous summary of the experts’ forecasts from the previous round as well as the reasons they provided for their judgments

Based on what people do Product testing method

exposing consumers to a new product, in final or prototype form, so that they might compare it to their usual brand and rate it, the results of product testing will indicate to the company whether further evaluation of the product in test markets is desirable, see concept development and testing and new product development.

Based on What people have done Trend Method

a forecasting method in which likely

future sales are estimated by statistical analysis of previous sales patterns

Time Series Analysis

time management technique in which the amount of time allocated to each job activity is recorded and later reviewed in order to plan for more productive use of the available time, see time management.

Exponential Smoothing Models

a quantitative technique for sales forecasting using historical data weighted to favour the most recent information

Regression Models

In statistics, a mathematical method of modeling the relationships among three or more variables. It is used to predict the value of one variable given the values of the others. For example, a model might estimate sales based on age and gender. A regression analysis yields an equation that expresses the relationship.

Econometric Models

An econometric model is one of the tools economists use to forecast future developments in the economy. In the simplest terms, econometricians measure past relationships among such variables as consumer spending, household income, tax rates, interest rates,employment, and the like, and then try to forecast how changes in some variables will affect the future course of others.

Input-output Models

The Input-output model of economics uses a matrix representation of a nation's (or a region's) economy to predict the effect of changes in one industry on others and by consumers, government, and foreign suppliers on the economy.

Historical Analogy Method

an approach to sales forecasting in which the past sales results of a similar product are used to predict the likely sales of a similar new product.

Geographical Analogy method

a distinctive characteristic of the industrial market, the industrial market tends to be more geographically concentrated than the consumer market