Strategies to manage demand supply imbalance in tourism

Strategies to manage demand-supply imbalance in tourism Tourism is a seasonal industry and there are many factors that contribute to this seasonality. Not only does the environment of the host nation, but the policies of the host Government and several other factors work together for this seasonality in the industry. Though it gives an opportunity to the host country to earn large sums of foreign exchange and offers employment to the masses in the country; but the challenges associated to this seasonality cannot be ignored. During peak seasons, the major tourist destinations in any country are often flooded with the tourists but the situation gets reversed as soon as the season passes. So, the demand and supply never reach a continuum. However, both these situations confront the host countries with problems in the fields of human resources, finance, environment, culture and infrastructure. These challenges put a question mark on the net benefits that host countries fetch from the promotional efforts they make to attract tourists from across the world. So, there must be some solutions that can help the host country to overcome these challenges arising out of demand-supply imbalance in tourism. The three prominent solutions would be diversifying the tourists’ traffic, promoting alternate tourism and reducing dependence on international tourists.

Diversification of tourists’ traffic

There are often only a few destinations in every country that are promoted as tourist destinations. Mostly the places with a scenic beauty or those that are of historical and cultural significance are designated to be the ‘tourist destinations’. But this idea can be stated as the base of all the problems related to seasonality of tourism. This tagging of the destinations results into such a large traffic inflow to these places that is often unmanageable for the authorities and at the same time troubles the locals. When there no such tagging of the places, the tourists’ traffic would spread throughout the country and this would solve the problem of seasonality to a great extent. So, the solution lies in diversifying the tourists’ traffic to other not-so-popular destinations in the country. This can be done in a number of ways including:

  1. Offering heavy discounts on the hotels, restaurants, and sight-seeing etc.
  2. Providing strong infrastructural support to the tourists at such places
  3. Organizing various fairs and events
  4. Designing special packages offering customized solutions
  5. Promoting local festivals and culture of these destinations
  6. Offering ease in conveyance means by initiating special trains, buses, and flights
  7. Relaxing the regulatory norms in such areas

Promoting alternate tourism

Leisure is not the only end for most of the people planning for a tour. There is a need to understand this fact and promote alternate tourism serving to other needs of the tourists. These may include the needs for availing medical treatment or higher education. Promoting medical tourism and introducing special short-term educational courses during sleek seasons would ensure stability in the tourist inflow to some extent. Medicine and educational needs often do not depend on the season and can prove to be good sources of earning during sleek seasons.

Reducing dependence on international tourists

A common mistake that most countries commit is that they focus their attention on attracting international tourists to the country. This adds to the seasonality of the industry because travelling abroad needs huge sums of money and other arrangements. The tourists therefore prefer to travel during the peak seasons of the host country when they can get the best value of their money. Hence, the solution lies in providing special offers to the locals during sleek seasons so as to increase their traffic during such times ensuring regularity of earnings and employment.

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Ankita Agarwal

Ankita is working with the editorial board of Project Guru as a Research Analyst and Writer. With Masters in Commerce and Business Studies, Ankita learned much of what she knows about management through experience. She has previously worked in various financial institutions like Birla Global, HDFC Ltd. and Citi Financial. She is self-motivated and writes for the Knowledge Tank section of Project Guru. She has authored more than 80 articles so far in Human Resources Management, Strategic Management, Finance and Marketing. She likes to pen her thoughts about the latest issues gripping these areas across the world.

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