Demand, supply and market price
- A holiday tour operator, such as Thomson Holidays, will be offering holidays to tourists from the UK to a great variety of resorts and hotels, apartments etc. The range of holidays they each offer is contained in the company’s brochure obtainable from a travel agent. There are a number of such tour operators offering similar packages to UK tourists.
- Use demand and supply analysis to examine the factors that will determine the brochure price of a holiday in Cyprus to tourists from the UK. How will the price of a holiday in any year be affected by shifts in demand and supply and explain what might cause such shifts?
Holiday Bargains
Each year package tour operators offer some cut price holidays through travel agents as ‘ last minute bargain
These holidays will be offered at a discount on the price of the same holiday in the original brochure. The original brochure price will reflect the cost and expected demand for holidays in that year.
Use demand and supply analysis to explain the rationale for these ‘last minute bargains’.
I would say the demand of something directly relates to the price and how the price will be influenced the following year. If a holiday is 'in demand' or popular then it can be offered at a higher price with a relatively safe guarantee that it would sell out. With low demand the price also has to be lowered in order to sell the product. Often direct marketing will affect the supply/demand of a product. A very well advertised or 'hyped' product will obviously sell better than a less well advertised product. Also the popularity of that product (or in this case the destination) will also have a bearing, and also be more popular during different times of the year. The demand for holidays in Cyprus are obviously going to be greater in the summer months when people are on holiday from school/work compared to other times of the year, at the same time the weather and attractions abroad are at their most favourable. Last minute bargains are usually not. They're just advertised as that to encourage sales of products they either want to get rid of quickly or know aren't selling well. E.g. If a hotel has to fill 200 rooms and they know they'll make a profit on 175 of them by selling at £100 per person, then they can offer the remaining 25 rooms at discount to guarantee they'll have a full hotel, from which they'll subsequently generate additional profit from food/drink/entertainment etc.
Tags: Bearing, Brochure Price, Cut Price Holidays, Demand And Supply, Different Times, Direct Marketing, Holiday Bargains, Holiday In Cyprus, Holiday Tour Operator, Holidays In Cyprus, Minute Bargain, Minute Bargains, Package Tour Operators, Popularity, Rationale, Thomson Holidays, Travel Agent, Travel Agents, Uk Tourists, Weather
No clue
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lol your from Trent, Stuart swift
, he said he left a clue in the question.
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hi joey!
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I would say the demand of something directly relates to the price and how the price will be influenced the following year. If a holiday is ‘in demand’ or popular then it can be offered at a higher price with a relatively safe guarantee that it would sell out. With low demand the price also has to be lowered in order to sell the product. Often direct marketing will affect the supply/demand of a product. A very well advertised or ‘hyped’ product will obviously sell better than a less well advertised product. Also the popularity of that product (or in this case the destination) will also have a bearing, and also be more popular during different times of the year. The demand for holidays in Cyprus are obviously going to be greater in the summer months when people are on holiday from school/work compared to other times of the year, at the same time the weather and attractions abroad are at their most favourable. Last minute bargains are usually not. They’re just advertised as that to encourage sales of products they either want to get rid of quickly or know aren’t selling well. E.g. If a hotel has to fill 200 rooms and they know they’ll make a profit on 175 of them by selling at £100 per person, then they can offer the remaining 25 rooms at discount to guarantee they’ll have a full hotel, from which they’ll subsequently generate additional profit from food/drink/entertainment etc.
References :