Demand and Capacity in Tourism

Demand and Capacity in Tourism

• Demand is the volume of goods and services customers need at a given time.
• Supply is the number of goods or products available for consumption.
• Capacity is an organization's ability to provide services.
• Productivity is an organization's ability to create goods and services efficiently.
• Excess demand occurs when demand exceeds capacity, leading to lost opportunities.
• Demand exceeding optimum capacity results in crowded conditions, lowering service quality.
• Balancing demand and supply at optimum capacity is ideal, achieving customer satisfaction and employee efficiency.

Managing Demand

• Service organizations must understand factors affecting demand and capacity.
• Market segment demand patterns should be analyzed to tailor service specifically.
• Predictable demand cycles require strategies for each phase.
• Random demand fluctuations require flexibility for diverse conditions (weather, disasters, etc.).
• Understanding these patterns helps manage disruptions.

Determining Demand

• Demand forecasting predicts future customer demands using historical data and real-time trends.
• Competitor data analysis helps small businesses establish competitive pricing.
• Monitoring economic factors (local and global) is crucial to adjusting product/service demands.
• Marketing projections aid in adjusting inventory to meet increased demand.

Managing Capacity

• Productive service capacity is the resources an organization uses for service delivery.
• Time constraints influence service production efficiency and profit.
• Service-oriented businesses face concerns about labor costs, especially in fluctuating demand.
• Equipment limitations like facilities and infrastructure can affect capacity.

Strategies for Modifying Demand

• Communicating with customers about peak periods can adjust demand.
• Modifying service delivery timing and location can help disperse demand.
• Incentive programs during off-peak periods can attract customers.
• Prioritizing customer categories (e.g., VIPs, seniors) can be helpful.

Strategies for Adjusting Capacity

• Shifting capacity involves expanding during peak periods and minimizing during downtime.
• Strategies for increasing capacity temporarily include longer operating hours, hiring part-time staff, cross training, or outsourcing.
• Chase demand strategies adjust service resources (people, facilities) to match demand fluctuations.
• Increasing demand to match existing capacity can leverage promotions and service adjustments.
• Strategies for queueing involve different queues (single sequential, parallel, designated) and numbering systems to optimize customer flow.

Differentiating Waiting Customers

• Service organizations can adjust policies based on customer needs, prioritizing urgent matters or high-spending customers.

Explore the concepts of demand, supply, and capacity within the tourism sector. Learn how organizations can manage service delivery by balancing customer needs with operational capabilities. This quiz covers various factors that influence demand and the strategies necessary for effective management.