Tribhuvan University
Faculty of Management
Office of the Dean
Bachelor of Hotel Management (BHM)
Course Description
:This course will enable the students to understand fundamentals of tourism economics, economics of tourism demand and supply, market equilibrium and efficiency in tourism products, production, cost and pricing of tourism products, macroeconomics and tourism industry; and quantitative methods of tourism. Course Learning Outcomes Upon completion of this course, students will able to: - discuss fundamentals of economic principles and their application in the tourism business. - analyze the composition of the tourism industry and its products. - explain the concepts and determinants of leisure and tourism. - describe the concepts, drivers, types, and impact of rural tourism, and also explain the factors influencing rural tourism motivation. - analyze the demand and supply functions for tourism products, and also explain the concepts and measurement of demand and supply elasticities. - discuss market equilibrium and economic efficiency. - describe the concepts of production function and cost and also dif ferentiate business profit and economic profit. - explain the determinants of market structures, profit maximization model, and pricing practices. - explain the macroeconomic issues and effects of tourism on macroeconomic variables. - examine the relationship between the macroeconomic environment and the tourism business. - estimate and forecast tourism demand analyze the private and public projects and factors affecting travel and tourism’s yield and future
Course Objective
:The course aims to provide students with cognitive knowledge and practical skills to understand what constitutes a good economic way of thinking in general and the tourism industry. Course Description This course will enable the students to understand fundamentals of tourism economics, economics of tourism demand and supply, market equilibrium and efficiency in tourism products, production, cost and pricing of tourism products, macroeconomics and tourism industry; and quantitative methods of tourism. Course Learning Outcomes Upon completion of this course, students will able to: - discuss fundamentals of economic principles and their application in the tourism business. - analyze the composition of the tourism industry and its products. - explain the concepts and determinants of leisure and tourism. - describe the concepts, drivers, types, and impact of rural tourism, and also explain the factors influencing rural tourism motivation. - analyze the demand and supply functions for tourism products, and also explain the concepts and measurement of demand and supply elasticities. - discuss market equilibrium and economic efficiency. - describe the concepts of production function and cost and also dif ferentiate business profit and economic profit. - explain the determinants of market structures, profit maximization model, and pricing practices. - explain the macroeconomic issues and effects of tourism on macroeconomic variables. - examine the relationship between the macroeconomic environment and the tourism business. - estimate and forecast tourism demand analyze the private and public projects and factors affecting travel and tourism’s yield and future
Course Contents:
Lecture hours show the approximate classroom time allocated to each unit.
Unit 1. Fundamentals of Tourism Economics
- Fundamentals of economic principles and their application in tourism business: how people make decisions, and how people interact
- Concepts of microeconomics and macroeconomics
- Tourism economics: nature and scope
- Composition of the tourism industry and its product: suppliers’ and tourists’ views
- Concept of free and scarce resources in tourism
- Controlling and rewarding resource use
- Interrelationship between tourism and other sectors of the economy
- Leisure and tou rism: concepts and determinants
- Growth of leisure and tourism in global perspective
- Rural tourism: concepts, drivers, and types
- Factors influencing rural tourism motivation
- ICT and rural tourism
- and Impact of rural tourism.
Unit 2. Economics of Tourism Demand and Supply
- Demand function
- Variables influencing tourism demand
- Levels of c hoices affecting tourism demand
- Factors constraining tourism demands
- Movement along a demand curve and shifts in the demand curve
- Concept and measurement of price, income, and cross -price elasticity of demand for tourism products
- Relationship between price elasticity of demand and revenue
- Supply of tourism products: concepts and determinants
- Supply function
- Movement along a supply curve and shift in the supply curve
- Price elasticity of supply: concepts and measurement.
Unit 3. Market Equilibrium and Efficiency in Tourism Products
- Market equilibrium
- Changes in tourism demand and tourism supply and thei r effects on market equilibrium
- Concept and measurement of economic efficiency
- Effects of tax, subsidy, and price control measures on market equilibrium and economic efficiency.
Unit 4. Production, Cost and Pricing for Tourism Products
- Production function of tourism products : concepts and types
- Concepts of cost : opportunity cost, accounting cost and economic cost, fixed cost and variable cost in tourism industry
- Economic profit and business profit
- Market structure: concepts and characteristics, Firm’s equilibrium and p rofit maximization model
- Pricing practices: price discrimination, cost-plus pricing, incremental cost pricing, bundling, tying, two-part tariffs.
Unit 5. Macroeconomics and Tourism Industry
- Concepts of macroeconomic issues: GDP, GNI, economic growth, inflation, business cycle, balance of payments, foreign exchange rate, unemployment
- Effects of tourism on GDP, employment, economic growth, Balance of Payment (BOP) and foreign exchange rate
- Relationship between macroeconomic environment and tourism business.
Unit 6. Quantitative Methods of Tourism Economics
- Estimation of tourism demand: regression analysis
- Forecasting tourism demand: concepts, steps, and significance, methods of forecasting: survey method and trend projection method
- Analysis of private and public tourism projects
- and Factors affecting travel and tourism’s yields and future.
Suggested Readings:
Bull, A. The Economics of Travel and Tourism, New Delhi: Pearson Longman Tribe, T. The Economics of Recreation, Leisure and Tourism, United Kingdom: Taylor & Francis Mankiw, J. N. Principles of Microeconomics, London: Thomson, South Western Stabler, M, A. M. & Sinclair, T. The Economics of Tourism, London: Thomson, Routledge Adhikari, G. M. Economics of Tourism. Kathmandu, Recent Edition