Economics and Tourism Development
Write 8 pages with APA style on Economics and Tourism Development. It seems that the richer class of Japanese tourists do not mind little fluctuations in the luxury items, though it is not the same with the relatively lower-income group of tourists who consider even a slight rise in price as a setback. Hence, it is important that the Japanese are convinced about the intrinsic features of a commodity to induce them to pay high for a good.Thirdly, it had been noted that Japanese tourists tend to repeat their travel destinations provided they feel secure enough to do so. The most important factor which guides their decision is the extent to which they feel safe around beaches and hotels (Dougan, 2007, p. 87).2. The implication of the unit price elasticity of demand is that the Japanese tourists are neither too sensitive towards price fluctuations and nor could they be regarded as insensitive. Actually, the primary area of confusion is that while some posh regions in Guam such as Tumon, attract high consumption demand from tourists, it is not so for many other regions in the province. In Tumon, tourists are found to buy luxury items at soaring high prices despite which prove their preference towards luxury items and hence insensitivity towards price fluctuations. However, in Guam’s K-Mart where many regular consumer goods are available at discounts, do not receive as many buyers as the former region. Thus, the latter region displays a greater degree of price elasticity of demand. It is due to the conjunction of both kinds of goods – luxury and regular, within the same consumption basket that the price elasticity of demand, in this case, has been evaluated as close to unity.A probable solution to the problem could be to segregate the consumption baskets for two types of commodities. However, the prime issue is that Guam does not even have a proper consumption basket on the basis if which CPI could be measured properly. This might also lead to a miscalculation of the actual price elasticity of demand.4. The income elasticity of demand had been found to be more influential than price elasticity. The Japanese are found to be highly sensitive to fluctuations in their levels of income rather than the price level ruling over the region where they are touring. For instance, the number of visits by Japanese tourists was lowered during periods of recession prevailing in Japan. However, the demand for ultra-expensive luxury and branded items being sold in Tumon, the prime tourist center in Guam was little affected by a slight change in the price of commodities. .
