Tourism & Macroeconomics: Employment, Demand & Key Factors

Posted on Dec 2, 2024 in Economy

Tourism Demand

Tourism demand is the amount of tourist goods and services consumers are willing to buy at a particular time and place, at a certain price.

  • Influencing demand: Income, prices, prices of other goods, tastes and fashion, government, advertising, etc.
  • Influencing tourism demand: Seasonality (weather, time of year), hotel type and customer, time lag between demand and consumption, uncertainties, transportation, large upfront payments, and time itself.
  • A trip is an example of tourist demand, which is not immediate – price, destination, time, hotel category, transportation, etc., all play a role.
  • Income Effects: Changes due to income (price).

Macroeconomics

Macroeconomics studies phenomena that affect the whole economy.

  • Its objective is to have a simplified view of how the economy functions as efficiently as possible.

Key Macroeconomic Issues

  • Fostering growth and productivity (GDP/GNP values of final goods and services)
  • Unemployment and unemployment rate (employment is the main source of income)
  • Inflation (CPI)
  • Balance of payments and exchange rate (large debt may cause a crisis)
  • Government deficit and income

Employment

Overall level of employment

  • Salary governs the amount of work and supply.
  • Basic macroeconomic problem
  • Overview of short and long-term unemployment and its causes
  • INE measures unemployment.

Workforce Survey

Collects data from the workforce and their categories (employed, unemployed), as well as the rest of the population (inactive).

  • Variables: Gender, age, marital status, nationality, education
  • Assets: Rare skills, occupation, industry, professional status
  • Occupied (employees + self-employed): Hours worked, working conditions. Employees work in exchange for wages.
  • Unemployed: Time and job search
  • Inactive: Under 16 years old, retired, mobility issues
  • Unemployed: Willing to accept a job if available
  • Active Population: Of working age, able and willing to work
  • Inactive Population: Of working age but not willing to work

Natural Causes of Unemployment

  • Frictional: Workers take time to find a job that best suits them.
    • Brief periods of unemployment
    • Job search process
    • Leaving old jobs for better ones
  • Structural: Number of existing jobs is insufficient to cover labor demand.
    • Common among 16-20 year-olds
    • Long periods of unemployment

Reasons for Unemployment

  • Large proportion of workers receiving wages above minimum wage
  • Unemployment generated at wages higher than equilibrium wage
  • Trade unions and collective bargaining
  • Increased productivity (higher wages, more efficiency)

Wage Effects

Higher Salary -> More Work

  • Positive connection between wages and health
  • Reduces employee turnover
  • Incentivizes harder work
  • Firms that pay more are more attractive

Other Types of Unemployment

  • Seasonal Unemployment: Due to seasonal variations
  • Cyclical Unemployment: Deviation from the natural rate; short-term, due to economic fluctuations

Costs of Unemployment

  • Production below potential
  • Negative economic and psychological effects
  • Unemployment benefit payments

Unemployment Calculations

  • Unemployment Rate = (Unemployed / Active Population) * 100
  • Activity Rate = Active Population / Adult Population
  • Natural Unemployment Rate: Normal long-term rate around which the unemployment rate fluctuates

Tourism Types

  • Domestic Tourism: Travel within the country
  • Inbound Tourism: Non-residents visiting the country
  • Outbound Tourism: Residents traveling to another country

Tourism Classifications

  • Domestic Tourism: Internal + Receptor
  • National Tourism: Internal + Emitter
  • International Tourism: Receiver + Emitter

Visitor Definitions

  • Internal Visitor: Stays in one country and travels for less than 1 year to a place within their country.
    • Tourists: Stay at least one night
    • Day trippers: Do not stay overnight
  • Tourism: Activities during journeys and stays outside the usual environment for less than 1 year
  • Traveler: Travels between 2 or more places

Occupancy Rate

  • Net Occupancy: (Total overnight stays / Total available rooms) * Number of nights per month

Population

Active Population = Employed + Unemployed Population

Utility Rates

  • Rate of Employees/Self-Employed = (Employed + Self-Employed) / Active Population * 100