Tourism Economics

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ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATION – OCTOBER 2013
B.COM – I SEMESTER (TRAVEL AND TOURISM)
TOURISM ECONOMICS
Duration: 3 Hours Max. Marks: 100
SECTION – A
I) Answer ALL the following questions. (10 x2=10)
1. Define tourism Economics.
2. What is a demand schedule? Give an example.
3. Mention four exceptions to the law of demand.
4. What do mean by Economies of Scale?
5. “Fixed cost is constant irrespective of the output produced.” True or false?
Give reasons.
6. Mention the difference between Average revenue and Marginal revenue..
7. State two conditions for a firm to attain equilibrium.
8. What is tourism product?
9. Explain Monopolistic Competition.
10. Give four determinants of supply.
Section – B
II) Answer any FOUR out of 6 questions. (4 x 5 = 20)
11. The rent of 5 rooms in Lake View Resort in Munnar was Rs 1000 ( Rs 200 for
each room). Due to off season the prices dropped to Rs 100 for each room but
the number of rooms demanded increased to 10 rooms. Calculate the
elasticity of demand.
12. Explain the indicators of Effective Tourism Demand.
13. Graphically explain any two importance of time element in the price theory.
14. Elaborate on the short run equilibrium under Monopolistic competition.
15. Breifly explain few tools of monetary policy taken up by the government.
16. Explain the elasticity of demand with help of graphs.
Section – C
III) Answer any THREE out of FIVE questions. (3 x 15 = 45)
17. Throw light upon the pricing approaches used in the Tourism Industry.
18. Explain in detail Economies and Diseconomies of Scale.
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19. Describe the different phases of a Business Cycle.
20. Elaborate the Impact of Tourism on the Economy of the country.
21. Write short notes on: (5 marks each)
a) Tourism Product b) Perfect Competition c) Fiscal Policy
Section – D
IV) Compulsory Case study (1 x 15 = 15)
“Incredible India”
Tourism is a major industry in India and the Ministry of Tourism launched a
campaign to promote Incredible India as a tourist destination in 2002. The phrase
“Incredible India” was adopted as a slogan by the ministry. It formulated an
integrated communication strategy with the aim of promoting India as a destination
of choice for the discerning traveler. This campaign was a success and it lead to great
results. However success is not always the case. Before 2002, the Indian government
regularly formulated policies and prepared pamphlets and brochures for the
promotion of tourism, however, it did not produce the desired results for the Indian
tourism industry.
Reasons for the success of the New “Incredible India” campaign was, that it
projected India as an attractive tourist destination by showcasing different aspects of
Indian culture and history like yoga, spirituality, etc. The campaign was conducted
globally and received appreciation from tourism industry observers and travellers
alike. It is valid to note that it was not only, the campaign that could have made a
difference to the Indian tourism. Along with them portraying India as Incredible,
they also had to ensure that it was truly so. The situation at the tourism destinations
was despicable before 2002. A majority of the tourist destinations, in India lacked
proper civic amenities and facilities. Also the historic attractions were not properly
maintained and were not projected in a manner that was pleasing. For Example the
painting at the Ellora and Ajantha caves were not properly lit, thus making it
difficult for the tourists to admire the beautiful work of art. Additionally the tourists
like to shop, however the destinations lacked specialty stores, retail services and
personal care services.
The Ministry of tourism thus decided that there had to be a change in the overall
appearance of the Indian tourism industry. The government of India knew that a
large chunk of money had potential to flow into the country through tourism. They
thus decided to invest in an ad campaign as well as in bettering tourism
destinations. Thus better roads were laid in and around tourist hot spots. Civic
amenities were provided at convenient locations. A team was established to ensure
cleanliness. Shopping areas were set up that sold products that were original to the
region.
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And this effort truly did make an impact. According to spending data released by
Visa Asia Pacific 4 in March 2006, India has emerged as the fastest-growing market
in the Asia-Pacific in terms of international tourist spending. The data revealed that
international tourists spent US$ 372 million in India in the fourth quarter (October–
December) of 2005, 25% more than in the fourth quarter of 2004.
Questions:
1. Define what is demand? With reference to the above case project the
importance of promotion and demand for tourism products.
2. What could be the drivers that made the government to focus on the tourism
sector?
3. Do you feel that the steps taken by the government are sufficient to ensure
that there is a sustained growth in Indian tourism? Validate your answer.
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1. JOSEPHS COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – OCTOBER 2014

B.Com (Travel & Tourism) – I SEMESTER

 TOURISM ECONOMICS

Duration: 3 Hours                                                                                       Max. Marks: 100

SECTION – A

1. Answer ALL the questions. Each carries 2 marks.                                       (2 x 10 =20)

 

1. Define Tourism Economics.
2. With the help of a table and diagram show Market demand.
3. Define Fiscal Policy.
4. Explain the concept of Marginal revenue.
5. Mention any two socio-cultural impacts of tourism.
6. What is Tourism demand?
7. Differentiate between stock and supply.
8. Explain the term sustainable tourism.
9. What do you understand by the term Production?
10. Write any four common features of tourism products?

 

SECTION – B

1. Answer any FOUR Each carries 5 marks.                               (4×5=20)                          

 

11. What do you understand by the terms Micro and Macroeconomics? Differentiate between the Micro and Macroeconomics.

 

12. Explain with the help of diagrams what will happen in the following cases:
13. When this year we face extreme winters, how will the pullovers market be affected.
14. In summer the supply of cold drinks increases.

 

13. Discuss the various phases of Business Cycles.

 

14. What is money cost of production? Also explain the relationship between AC and MC.

 

15. Discuss the positive and negative economic impact of tourism.

 

16. What do you understand by fixed and flexible exchange rates? Discuss the case for and against each of them.

 

 

 

SECTION – C

III)      Answer any THREE questions.    Each carries 15 marks.                    (3×15=45)

 

17. Suppose an industry is characterized by the following characteristics: single seller, large number of buyers, barriers to entry and exit. Explain how the firm and industry will attain equilibrium in the short and long run. Also, decide the type of market this is.

 

18. What do you understand by the term demand forecasting? Discuss the various methods of tourism demand forecasting.

 

19. Define Monetary Policy. What are the various tools of Monetary Policy used to control the market?

 

20. What do you understand by the term Environmental Impact Assessment? Discuss the various steps involved in EIA.

 

21. Discuss the various economies and diseconomies of production.

 

SECTION – D

1. IV) Case study- Compulsory questions.     (15 marks)

 

22. Goa – West India. Tourism gone wrong

Fact file

Situated on the west coast of India, approximately 400 kilometres south of Bombay. Goa’s coastal strip is approximately 100 kilometres long boasting idyllic sandy beaches and blue crystal seas.

Traditional industries included fishing, rice growing and toddy tapping – where an alcoholic drink is fermented from the sap of the coconut palm.

Literacy rate 77% – high for India.

Number of tourist visitors now exceeds 1 million annually – about 20% are arrivals from overseas.

Tourist season is from October through to May when average temperatures range from 31-34 degrees Celsius. Heavy rain prevents tourism from June to September.

Growth

Tourism has grown dramatically in the last four decades.

Until 1986 tourism was limited to Indian tourists, backpackers and the very wealthy. There were relatively few hotels and local people owned these. Backpackers could rent rooms from local families so increasing their cultural experience and injecting money into the local economy. Tourism is largely limited to the North of Goa. Tourists would total less than half a million with fewer than 30 000 from overseas.

The consequences for the environment, culture and economy were minimal and often positive.

1986 saw the arrival of the first package holidays from Europe. A new demand for three and four star hotels with pools and gardens starts to put pressure on the environment. Tourism begins to spread south and numbers soon exceed 1million with more than 200 000 from overseas. Local people and action groups are starting to become concerned about the effects of tourism on the economy, environment and culture. In 1987 locals express their concerns when they great tourists at the airport with cow dung and posters telling them to go home.

Tourism in Goa has continued to grow despite the protests of locals and action groups. Foreign tourists are being encouraged as they spend more than Indian tourists. Multinational companies increasing the likelihood of leakage are building more and more hotels. Numbers of foreign tourists are expected to rise to 350 000. There are plans to build new communication links including airports and railway stations which will open up more regions of Goa pushing tourism further north and south.

Consequences of tourism in Goa

Economy:

Largely negative although government ministers say that tourism has greatly improved the economy without the environmental consequences of traditional heavy industry.

Leakage:

There is considerable leakage of money out of the Goan economy. Foreign companies or nationals from outside Goa own the majority of large hotels.

Decline of traditional industry:

Local industries have in many situations been forced into decline. Toddy tapping is struggling as deforestation makes way for hotels and pool. Valuable farm- land is also lost and in some instances locals claim they have been forced from the land.

Fishing has been badly hit by trawlers but also the tradition of drying fish on the beach has been banned because the smell upsets tourists.

Land prices:

These have rocketed in recent years as speculators continue to force them up.

Anything positive?:

Hotel management courses set up by the local government are giving more of the local unemployed the skills to fill higher paid jobs in the industry.

Tourism has had a positive effect on many businesses including… bars and restaurants, boutiques, construction, cinemas, bakeries – the key issue is whether the growth in the economy is proportional to the growth in tourism.

Environment:

Huge pressures are placed on the environment by the pressures of tourism. Hotels with pools and gardens replace farmland and mangrove swamps.  In summary tourism in Goa is in grave danger of destroying the very thing it is trying to sell.

 

Questions:

1. What has gone wrong with tourism in Goa?
2. What are the positive and negative impacts of tourism in Goa?
3. What would you suggest to make Tourism Sustainable in Goa?