Description
THE CASE ANALYSIS OF USING
DEMAND BEHAVIOUR IN LANGKAWI
AS A TOUR MANAGER
LOGO
THE CASE ANALYSIS OF USING DEMAND BEHAVIOUR IN LANGKAWI AS A TOUR MANAGER
SEEG 5013 MANAGERIAL ECONOMICS
Prepared by: Abdul Rasid Bin Ahmad 807252 Mohamed Azlan Bin Ashaari 812364 Smaoun Saad 813061 Syed Azlan AlJaffree Bin Syed Khadzil 813481 Wan Mohd Dhaiyudeen Helmy Bin Wan Mohar 814398
13 Rejab 1434 Hijri (May 23rd, 2013); Thursday
1
LOGO
Brief Contents
1
2 3 4 5
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Introduction of Langkawi as “Jewel of Kedah”
Factors Influencing Demand in Tourism The Law of Demand Demand and Elasticity Marketing & Promotion Strategy Summary and Conclusion
6
SEEG 5013 MANAGERIAL ECONOMICS
2
LOGO Introduction of Langkawi as “Jewel of Kedah”
?
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
?
?
?
?
Langkawi, officially known as Langkawi, the Jewel of Kedah (Malay: Langkawi Permata Kedah) is an archipelago of 104 islands in the Andaman Sea, some 30km off the mainland coast of northwestern Malaysia which is adjacent to the Thailand border. On July 15, 2008, Sultan Abdul Halim of Kedah had consented to the change of name to “Langkawi Permata Kedah” in conjunction with his Golden Jubilee Celebration. The main Island has a land mass of 32,000 hectares and covers almost 25km north to south and even more from east to west. Of the 99 islands, only 4 are inhabited. Pulau Langkawi, Pulau Rebak, Pulau Tuba and Pulau Dayang Bunting. Langkawi has a population of approximately 99,000 people. 90% of whom are Malays. Pulau Langkawi is the main island, with a population of 64,792. The archipelago is inter-denominational and the religious demographics are as follows: Islam by the Malays, Hinduism by the Indians, Christianism by Chinese, Buddhism by Chinese and Thais.
SEEG 5013 MANAGERIAL ECONOMICS
3
LOGO Introduction of Langkawi as “Jewel of Kedah” (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
? Geologically, Langkawi is made up of three different rocks: sandstone, limestone and marble. The primary focal point of Langkawi Geopark, the 550-million-year-old Mount Machincang is made up of sandstone. Pulau Dayang Bunting (Pregnant Maiden Island) has a high composition of marble. Limestone found in other parts of Langkawi has contributed to the establishment of a cement factory, the only heavy industry on the island. ? On June 1, 2007, Langkawi Island was given a World Geopark status by UNESCO. These three parks (as above) are the most popular tourism area within Langkawi Geopark. ? Langkawi also is a duty-free island.
SEEG 5013 MANAGERIAL ECONOMICS
4
LOGO
Factors Influencing Demand in Tourism
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
? Demand behaviour in tourism sector refers to the willingness and ability of consumers to buy different amounts of a tourism product at different prices during any one period of time. ? Following standard theory, the demand for any good or service can be expected to be influenced by a myriad of price and non-price factors. ? The market demand function for a product or service is the relationship between the quantity demanded of the product and the various factors that influence this quantity. ? For tourism demand it is useful to distinguish between the demand for travel to a destination (such as visitor arrivals and expenditure) and the demand for particular tourism related products or services within the destination (such as hotel rooms, restaurant meals, tours or sunglasses).
SEEG 5013 MANAGERIAL ECONOMICS
5
LOGO
Factors Influencing Demand in Tourism (Cont..)
?
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Qualitative Factors Affecting International Tourism Demand
Tourists’ demographic attributes which may affect leisure time availability or similar constraints including; ? Gender, age, education level, employment, profession; ? Household size (composition of household, and child / children age); ? Trip motive or frequency; Destination attractiveness (climate, culture, history, & natural environment). Special events (Olympic Games, World Cup, Religious Festivals, LIMA, etc). Political events (terrorism, political unrest, currency crises, grounding aircraft strike, oil crises). Natural events (tsunami, hurricanes, SARS, Avian Flu, Northern lights) etc. Such factors have varying relevance depending on the specific destination.
? ? ?
? ?
SEEG 5013 MANAGERIAL ECONOMICS
6
LOGO
The Law of Demand
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
? Economic theory suggests that price and demand in tourism have an inverse relationship. As its price falls, the quantity demanded for a tourism product should rise, and as its price rises, the quantity demanded should fall. ? This negative relationship (commonly called the Law of Demand) captures the income effect and substitution effect evident in buyer behaviour.
? Income effect: as the price of a tourism product falls, its price relative to consumer income falls and consumers can afford more of the tourism product given the same income. ? Substitution effect: consumers can buy more of this now relatively cheaper tourism product substituting it for other now relatively more expensive products.
? As an example; manipulate room rates.
SEEG 5013 MANAGERIAL ECONOMICS
7
LOGO
The Law of Demand (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Price versus Non-Price Factors
? Price factors: The cost of tourism to the visitor includes the cost of transport services to and from the destination and the cost of ground content (accommodation, tour services, shopping, entertainment etc.).
? The prices paid by an international tourist who must convert one currency into another will also be influenced by prevailing exchange rates, and prices in the destination as compared to prices in their home country.
? Non-price factors: These include socio-economic and demographic factors such as population, income in origin country, education, occupation, availability of leisure time, immigration stock and the like and qualitative factors including consumer tastes, tourist appeal, destination image, quality of tourist services, tourist preferences, special events, destination marketing and promotion, cultural ties, weather conditions, random shocks and so on.
SEEG 5013 MANAGERIAL ECONOMICS
8
LOGO
The Law of Demand (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Demand for a Tourism Product
? The most important variables affecting the demand for any good include the price of the good (Px), consumers income (Y), the number of consumers in the market (N), the price of related products (substitutes Ps and complements Pc), consumer tastes (T), level of marketing / promotion expenditure (M), and other variables such as consumer price expectations, interest rates, and so on. ? Thus, we can specify the following general function of the demand for the commodity (Qx) measured in physical units, where the dots at the end of the equation refer to the other determinants of demand that are specific to the particular firm and product. ? In a tourism context, Qx might refer to visitor numbers, car rentals, tickets to attractions, number of airline passengers, numbers of Tshirts sold, swim suits, hotel rooms demanded, etc.
SEEG 5013 MANAGERIAL ECONOMICS
9
LOGO
The Law of Demand (Cont…)
? ?
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Changes in Quantity Demanded and in Demand
A change in quantity demanded of a product or service results from a change in its price and can be represented by a shift along the demand curve. A change in demand results from changes in the non-price influences on tourism demand. These factors cause the entire demand curve to shift left or right, indicating a reduction or increase in demand at any given price.
Price $ (per unit) less quantity demanded as price rises rise in price decrease increase in demand in demand Price $ (per unit)
fall in price
more quantity demanded as price falls
Quantity demanded Figure 2.1a: price and quantity demanded
Quantity demanded Figure 2.1b: non-price and demand
SEEG 5013 MANAGERIAL ECONOMICS
10
LOGO
Demand and Elasticity
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
1. Elasticity describes the sensitivity of one variable to changes in another variable.
2. Elasticity measures how much one variable changes in direct response to changes in another variable.
5
Characteristics of Elasticity in Demand
Demand and Elasticity in Tourism Sector
3. Sensitivity to price change
5. Generally, hotel accommodation is an elastic.
4. Inelastic - less sensitive; Elastic - more sensitive
SEEG 5013 MANAGERIAL ECONOMICS
11
LOGO
Demand and Elasticity (Cont…)
FOUR (4) MAIN TYPES OF ELASTICITY MEASURES 2. Income elasticity: The extent to which demand for a tourism product changes because of changes in the level of consumer income.
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
1. Price elasticity: The extent to which demand for a tourism product changes because of a change in the price of that product itself.
3. Cross price elasticity: The extent to which demand for a tourism product changes because of changes in the price of substitute goods and complementary goods.
12
4. Marketing elasticity: The responsiveness of sales to changes in marketing/advertising expenditures.
SEEG 5013 MANAGERIAL ECONOMICS
LOGO
Demand and Elasticity (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
3 Luxury or Necessity 4 Time 2 Price Relative to Income
5 Expectations of Price Change
5
Determinants of Price Elasticity For A Tourism Product
1 Availability of Substitutes
SEEG 5013 MANAGERIAL ECONOMICS
13
LOGO
Demand and Elasticity (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Elasticity, Demand Curve and Total Revenue
? Reduces TR if demand is elastic (? >1) ? Leaves TR unchanged if the elasticity is unity (? =1) ? Increases TR if demand is inelastic (? <1)
SEEG 5013 MANAGERIAL ECONOMICS
14
LOGO
Marketing & Promotion Strategy
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
? The extent to which marketing and promotion expenditure influence demand in tourism sector in Langkawi is difficult to measure. ? Data permitting, a useful measure of marketing effectiveness, based on estimated elasticities, is the return on marketing expenditure. ? Typically, researchers use the marketing budget of national tourism offices as a proxy. There are, however, great difficulties in modeling the impact of marketing and of separating its effect from the other major influences on tourism demand. ? Even if marketing expenditure can be estimated accurately across different origin countries (often difficult to do), marketing expenditure per se does not indicate that the promotion is effective. Different nationalities and cultures are likely to respond differently to marketing and different destinations vary in their ability to use marketing effectively to attract tourists.
SEEG 5013 MANAGERIAL ECONOMICS
15
LOGO
Marketing & Promotion Strategy (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Marketing and Promotion Strategic Plan of Tourism in Langkawi
? ? ? ? Focus on Quality and Services in several areas. Promote more and variety food & beverage also souvenirs. Link-up with car rental or transportation providers and tourist guides. Off-Season strategy: ? Government agencies, companies etc. ? Foreigners during their holiday season.
SEEG 5013 MANAGERIAL ECONOMICS
16
LOGO
Summary & Conclusion
?
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
?
?
?
As a tour manager in Langkawi’s Island, the demand behaviour analysis in tourism sector has helps them to set a pricing strategy during peak season and off season especially in accommodation and transportation sector. Many tourists or visitors came and visited Langkawi’s Island especially on the month of September till December. As most of tourism players in Langkawi’s Island using this peak season to maximize their profit by setting up high prices for their products or services, they take the opportunities but by providing better quality products or services to tourists or visitors which value for the price they pay for. In the meantime, in order to support the overwhelming tourism demand during peak season, they should increase the supply for accommodation and transportation, in which I really look forward for an elastic price demand curve. They hope that the price of their services can be lower down as the demand increases. The illustration shown that the strategy to managing the seasonality’s impact on supply and demand in tourism of accommodation and transportation:
SEEG 5013 MANAGERIAL ECONOMICS
17
LOGO
Summary & Conclusion (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
SEEG 5013 MANAGERIAL ECONOMICS
18
LOGO
SEEG 5013 MANAGERIAL ECONOMICS
19
doc_688156617.pptx
THE CASE ANALYSIS OF USING
DEMAND BEHAVIOUR IN LANGKAWI
AS A TOUR MANAGER
LOGO
THE CASE ANALYSIS OF USING DEMAND BEHAVIOUR IN LANGKAWI AS A TOUR MANAGER
SEEG 5013 MANAGERIAL ECONOMICS
Prepared by: Abdul Rasid Bin Ahmad 807252 Mohamed Azlan Bin Ashaari 812364 Smaoun Saad 813061 Syed Azlan AlJaffree Bin Syed Khadzil 813481 Wan Mohd Dhaiyudeen Helmy Bin Wan Mohar 814398
13 Rejab 1434 Hijri (May 23rd, 2013); Thursday
1
LOGO
Brief Contents
1
2 3 4 5
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Introduction of Langkawi as “Jewel of Kedah”
Factors Influencing Demand in Tourism The Law of Demand Demand and Elasticity Marketing & Promotion Strategy Summary and Conclusion
6
SEEG 5013 MANAGERIAL ECONOMICS
2
LOGO Introduction of Langkawi as “Jewel of Kedah”
?
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
?
?
?
?
Langkawi, officially known as Langkawi, the Jewel of Kedah (Malay: Langkawi Permata Kedah) is an archipelago of 104 islands in the Andaman Sea, some 30km off the mainland coast of northwestern Malaysia which is adjacent to the Thailand border. On July 15, 2008, Sultan Abdul Halim of Kedah had consented to the change of name to “Langkawi Permata Kedah” in conjunction with his Golden Jubilee Celebration. The main Island has a land mass of 32,000 hectares and covers almost 25km north to south and even more from east to west. Of the 99 islands, only 4 are inhabited. Pulau Langkawi, Pulau Rebak, Pulau Tuba and Pulau Dayang Bunting. Langkawi has a population of approximately 99,000 people. 90% of whom are Malays. Pulau Langkawi is the main island, with a population of 64,792. The archipelago is inter-denominational and the religious demographics are as follows: Islam by the Malays, Hinduism by the Indians, Christianism by Chinese, Buddhism by Chinese and Thais.
SEEG 5013 MANAGERIAL ECONOMICS
3
LOGO Introduction of Langkawi as “Jewel of Kedah” (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
? Geologically, Langkawi is made up of three different rocks: sandstone, limestone and marble. The primary focal point of Langkawi Geopark, the 550-million-year-old Mount Machincang is made up of sandstone. Pulau Dayang Bunting (Pregnant Maiden Island) has a high composition of marble. Limestone found in other parts of Langkawi has contributed to the establishment of a cement factory, the only heavy industry on the island. ? On June 1, 2007, Langkawi Island was given a World Geopark status by UNESCO. These three parks (as above) are the most popular tourism area within Langkawi Geopark. ? Langkawi also is a duty-free island.
SEEG 5013 MANAGERIAL ECONOMICS
4
LOGO
Factors Influencing Demand in Tourism
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
? Demand behaviour in tourism sector refers to the willingness and ability of consumers to buy different amounts of a tourism product at different prices during any one period of time. ? Following standard theory, the demand for any good or service can be expected to be influenced by a myriad of price and non-price factors. ? The market demand function for a product or service is the relationship between the quantity demanded of the product and the various factors that influence this quantity. ? For tourism demand it is useful to distinguish between the demand for travel to a destination (such as visitor arrivals and expenditure) and the demand for particular tourism related products or services within the destination (such as hotel rooms, restaurant meals, tours or sunglasses).
SEEG 5013 MANAGERIAL ECONOMICS
5
LOGO
Factors Influencing Demand in Tourism (Cont..)
?
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Qualitative Factors Affecting International Tourism Demand
Tourists’ demographic attributes which may affect leisure time availability or similar constraints including; ? Gender, age, education level, employment, profession; ? Household size (composition of household, and child / children age); ? Trip motive or frequency; Destination attractiveness (climate, culture, history, & natural environment). Special events (Olympic Games, World Cup, Religious Festivals, LIMA, etc). Political events (terrorism, political unrest, currency crises, grounding aircraft strike, oil crises). Natural events (tsunami, hurricanes, SARS, Avian Flu, Northern lights) etc. Such factors have varying relevance depending on the specific destination.
? ? ?
? ?
SEEG 5013 MANAGERIAL ECONOMICS
6
LOGO
The Law of Demand
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
? Economic theory suggests that price and demand in tourism have an inverse relationship. As its price falls, the quantity demanded for a tourism product should rise, and as its price rises, the quantity demanded should fall. ? This negative relationship (commonly called the Law of Demand) captures the income effect and substitution effect evident in buyer behaviour.
? Income effect: as the price of a tourism product falls, its price relative to consumer income falls and consumers can afford more of the tourism product given the same income. ? Substitution effect: consumers can buy more of this now relatively cheaper tourism product substituting it for other now relatively more expensive products.
? As an example; manipulate room rates.
SEEG 5013 MANAGERIAL ECONOMICS
7
LOGO
The Law of Demand (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Price versus Non-Price Factors
? Price factors: The cost of tourism to the visitor includes the cost of transport services to and from the destination and the cost of ground content (accommodation, tour services, shopping, entertainment etc.).
? The prices paid by an international tourist who must convert one currency into another will also be influenced by prevailing exchange rates, and prices in the destination as compared to prices in their home country.
? Non-price factors: These include socio-economic and demographic factors such as population, income in origin country, education, occupation, availability of leisure time, immigration stock and the like and qualitative factors including consumer tastes, tourist appeal, destination image, quality of tourist services, tourist preferences, special events, destination marketing and promotion, cultural ties, weather conditions, random shocks and so on.
SEEG 5013 MANAGERIAL ECONOMICS
8
LOGO
The Law of Demand (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Demand for a Tourism Product
? The most important variables affecting the demand for any good include the price of the good (Px), consumers income (Y), the number of consumers in the market (N), the price of related products (substitutes Ps and complements Pc), consumer tastes (T), level of marketing / promotion expenditure (M), and other variables such as consumer price expectations, interest rates, and so on. ? Thus, we can specify the following general function of the demand for the commodity (Qx) measured in physical units, where the dots at the end of the equation refer to the other determinants of demand that are specific to the particular firm and product. ? In a tourism context, Qx might refer to visitor numbers, car rentals, tickets to attractions, number of airline passengers, numbers of Tshirts sold, swim suits, hotel rooms demanded, etc.
SEEG 5013 MANAGERIAL ECONOMICS
9
LOGO
The Law of Demand (Cont…)
? ?
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Changes in Quantity Demanded and in Demand
A change in quantity demanded of a product or service results from a change in its price and can be represented by a shift along the demand curve. A change in demand results from changes in the non-price influences on tourism demand. These factors cause the entire demand curve to shift left or right, indicating a reduction or increase in demand at any given price.
Price $ (per unit) less quantity demanded as price rises rise in price decrease increase in demand in demand Price $ (per unit)
fall in price
more quantity demanded as price falls
Quantity demanded Figure 2.1a: price and quantity demanded
Quantity demanded Figure 2.1b: non-price and demand
SEEG 5013 MANAGERIAL ECONOMICS
10
LOGO
Demand and Elasticity
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
1. Elasticity describes the sensitivity of one variable to changes in another variable.
2. Elasticity measures how much one variable changes in direct response to changes in another variable.
5
Characteristics of Elasticity in Demand
Demand and Elasticity in Tourism Sector
3. Sensitivity to price change
5. Generally, hotel accommodation is an elastic.
4. Inelastic - less sensitive; Elastic - more sensitive
SEEG 5013 MANAGERIAL ECONOMICS
11
LOGO
Demand and Elasticity (Cont…)
FOUR (4) MAIN TYPES OF ELASTICITY MEASURES 2. Income elasticity: The extent to which demand for a tourism product changes because of changes in the level of consumer income.
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
1. Price elasticity: The extent to which demand for a tourism product changes because of a change in the price of that product itself.
3. Cross price elasticity: The extent to which demand for a tourism product changes because of changes in the price of substitute goods and complementary goods.
12
4. Marketing elasticity: The responsiveness of sales to changes in marketing/advertising expenditures.
SEEG 5013 MANAGERIAL ECONOMICS
LOGO
Demand and Elasticity (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
3 Luxury or Necessity 4 Time 2 Price Relative to Income
5 Expectations of Price Change
5
Determinants of Price Elasticity For A Tourism Product
1 Availability of Substitutes
SEEG 5013 MANAGERIAL ECONOMICS
13
LOGO
Demand and Elasticity (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Elasticity, Demand Curve and Total Revenue
? Reduces TR if demand is elastic (? >1) ? Leaves TR unchanged if the elasticity is unity (? =1) ? Increases TR if demand is inelastic (? <1)
SEEG 5013 MANAGERIAL ECONOMICS
14
LOGO
Marketing & Promotion Strategy
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
? The extent to which marketing and promotion expenditure influence demand in tourism sector in Langkawi is difficult to measure. ? Data permitting, a useful measure of marketing effectiveness, based on estimated elasticities, is the return on marketing expenditure. ? Typically, researchers use the marketing budget of national tourism offices as a proxy. There are, however, great difficulties in modeling the impact of marketing and of separating its effect from the other major influences on tourism demand. ? Even if marketing expenditure can be estimated accurately across different origin countries (often difficult to do), marketing expenditure per se does not indicate that the promotion is effective. Different nationalities and cultures are likely to respond differently to marketing and different destinations vary in their ability to use marketing effectively to attract tourists.
SEEG 5013 MANAGERIAL ECONOMICS
15
LOGO
Marketing & Promotion Strategy (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
Marketing and Promotion Strategic Plan of Tourism in Langkawi
? ? ? ? Focus on Quality and Services in several areas. Promote more and variety food & beverage also souvenirs. Link-up with car rental or transportation providers and tourist guides. Off-Season strategy: ? Government agencies, companies etc. ? Foreigners during their holiday season.
SEEG 5013 MANAGERIAL ECONOMICS
16
LOGO
Summary & Conclusion
?
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
?
?
?
As a tour manager in Langkawi’s Island, the demand behaviour analysis in tourism sector has helps them to set a pricing strategy during peak season and off season especially in accommodation and transportation sector. Many tourists or visitors came and visited Langkawi’s Island especially on the month of September till December. As most of tourism players in Langkawi’s Island using this peak season to maximize their profit by setting up high prices for their products or services, they take the opportunities but by providing better quality products or services to tourists or visitors which value for the price they pay for. In the meantime, in order to support the overwhelming tourism demand during peak season, they should increase the supply for accommodation and transportation, in which I really look forward for an elastic price demand curve. They hope that the price of their services can be lower down as the demand increases. The illustration shown that the strategy to managing the seasonality’s impact on supply and demand in tourism of accommodation and transportation:
SEEG 5013 MANAGERIAL ECONOMICS
17
LOGO
Summary & Conclusion (Cont…)
The Case Analysis of Using Tourism Demand Behaviour in Langkawi
Langkawi – “Jewel of Kedah”
SEEG 5013 MANAGERIAL ECONOMICS
18
LOGO
SEEG 5013 MANAGERIAL ECONOMICS
19
doc_688156617.pptx