Measurement and decomposition of seasonal demand for tourism in Norway
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1 Measurement and decomposition of seasonal demand for tourism in Norway Nigel Halpern Molde University College, Norway 11th Global Forum on Tourism Statistics, Reykjavík, Iceland November 2012
2 Value of tourism in Norway, million overnights Total expenditure NOK 106 billion ( 14bn) 3.3 per cent GDP 2.2 million FTEs (6.3 per cent employment)
3 Soria Moria Declaration National strategies will be developed within 5 industries where Norway has expertise or special advantage Tourism is one of those 5 industries One of the main tasks involved in the development of tourism in Norway is: To ensure that further growth is converted into increased value creation and greater profitability (Ministry of Trade and Industry, 2005; p8)
4 National focus on seasonality The industry is characterised by strong fluctuations in demand, as it is highly seasonal.. It is characterised by high labour turnover because of the strong seasonal fluctuations in employment. Attracting staff with the required competence at all levels is therefore a challenge for tourism enterprises. It is also a challenge to develop a profitable travel and tourism industry.. The development of year-round tourism may therefore be the correct strategy in certain cases for improving profitability (Ministry of Trade & Industry, 2005; p9) Priority no.2 (p23) offered 250,000 for projects in developing & marketing year-round tourism
5 Regional focus on seasonality Møre & Romsdal Tourism Programme million in 5 priority areas HA1 Season lengthening / accessibility HA2 Direct routes HA3 Marketing HA4 Product packaging / development HA5 Competence
6 Guest nights Tourism demand,
7 Study objectives Support counter-seasonal strategies by Measuring seasonal concentration Identify current & year-on-year changes Measuring the relative effect of different markets Identify & target markets that reduce seasonal concentration
8 Data collection National & regional Published by SSB Monthly overnights Nationality (47 markets) Accommodation (4) Purpose of travel (3)
9 Measuring seasonal concentration Coefficient of seasonal variation Equal to the std.dev. seasonal indices where the index (index=100) is the average no. of guest nights each month Seasonality ratio Ratio between max. guest nights in a month versus the average monthly guest nights Gini coefficient Prefered as the first two don t take account of skewness of distribution and are influenced by extreme values (Wanhill & Yacomis, 1980)
10 Gini coefficient & the Lorenz curve Gini measures inequality Among values of a frequency distribution Common applications Income inequality Spatial concentration Temporal concentration Difference in demand each month in a year 0 = perfect equality 1 = perfect inequality
11 Seasonal concentration in Norway
12 Decomposing seasonal concentration Measures the contribution of individual markets Contribution is dependent on 3 factors Gini coefficient of the market Correlation coefficient for monthly demand (total v market) Market share of the market Can subsequently calculate relative effects i.e. a proportional increment in market x changes seasonal concentration by x%
13 Market Nationality* Gini Market share Gini correlation Contribution to concentration RME % Domestic 0,204 0,730 0,989 0, International 0,390 0,270 0,978 0, Germany 0,568 0,055 0,987 0,123 6,8 -Sweden 0,212 0,032 0,884 0,024-0,8 -Denmark 0,405 0,029 0,116 0,005-2,4 -Netherlands 0,627 0,026 0,991 0,063 3,8 -Great Britain 0,150 0,018 0,936 0,010-0,8 -United States 0,394 0,011 0,991 0,017 0,6 -France 0,553 0,011 0,991 0,023 1,3 -Spain 0,581 0,009 0,975 0,020 1,1 -Poland 0,228 0,008 0,925 0,007-0,1 -Italy 0,532 0,007 0,946 0,014 0,7 -Russia 0,464 0,006 0,877 0,010 0,4 -Finland 0,439 0,005 0,945 0,008 0,3 Hotels & similar 0,150 0,660 0,976 0,387-27,3 Accom. Campsites 0,520 0,278 0,979 0,566 28,8 Cabins 0,236 0,049 0,648 0,030-1,9 Hostels 0,347 0,012 0,995 0,017 0,5 Purpose Course & conference 0,164 0,133 0,020 0,003-13,0 Business 0,077 0,379 0,743 0,145-23,4 Holiday & leisure 0,273 0,489 0,959 0,852 36,3
14 Changes in market share Share of overnights (%) Market Change RME % Domestic International Hotels & similar 67,6 66,0-1,6-27,3 Campsites 29,3 27,8-1,5 28,8 Cabins 1,5 4,9 3,4-1,9 Hostels 1,6 1,2-0,3 0,5 Course & conference 15,1 13,3-1,8-13,0 Business 32,4 37,9 5,4-23,4 Holiday & leisure 52,5 48,9-3,6 36,3
15 % change in share of guest nights ( ) Growth - seasonality matrix Positive growth & reduce seasonality Business 8,0 Domestic 6,0 4,0 Cabins 2,0 Positive growth & increase seasonality 0, Hostels Campsites -2,0 Hotels & similar Negative growth & reduce seasonality Bubble size = market share (2011) Course & conference -4,0-6,0-8,0 % relative marginal effect (2011) International Holiday & leisure Negative growth & increase seasonality
16 % change in share of guest nights ( ) Top 10 international markets Positive growth & reduce seasonality DK SW 16,0 14,0 12,0 10,0 8,0 DE Positive growth & increase seasonality 6,0 NL UK 4,0 US FR 2,0 ES PL IT 0, Bubble size = market share (2011) % relative marginal effect (2011)
17 Summary Gini - measure & benchmark seasonal concentration Decomposition - identify & target reducing markets / simulate outcomes Study limitations 3 broad types of tourist characteristic & no product features Generalised at national-level but more relevant at local-level Assumes no constraints i.e. climatic or permanent structural characteristics
18 Thank you for your attention Questions..? Photo: Trollstigen 18 May 2005
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