Demand shifts due to a change in tastes
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Headline from:
Agence France Presse as reported on Yahoo! News
Tourism's slow recovery along Indian Ocean's tsunami-hit beaches
Sun Jun 19, 4:33 PM ET
"Along the famous white sands of Phuket's Patong beach, stray dogs outnumber tourists, who six months after the tsunami are still staying away from the once packed shore."
A tsunami hit the beaches of Thailand in December of 2004 and it is believed that half of the victims were foreigners visiting for the holidays.
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"'This June we have an average occupancy rate of less than 20 percent, compared to nearly 60 percent last year in the provinces of Phuket, Phang Nga, Krabi' along the Andaman coast, says Napasorn Kakai, assistant director at the Tourism Authority of Thailand (TAT) in Phuket."1
Now occupancy rates are a ratio of the percent of rooms booked divided by the total rooms available. The tsunami destroyed over 50 percent of the hotels in Phang Nga province. For occupany rates to decrese, it must be that the decrease in the supply of hotel rooms is less than the decrease in the demand for hotel rooms.
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How to shift the demand curve to the right?
"The best way to recover is to advertise 'attractive promotional packages to send the message Phuket is the best value for money,' Phuket tourism official Kitti says. This is exactly what the province plans to do for the next three months. As for Napasorn, she insists an early warning system now operating is crucial in reassuring foreign tourists."2
1Copyright © 2005 Agence France Presse. All rights reserved.
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