Tribhuvan University

Faculty of Management

Office of the Dean

Bachelor of Travel and Tourism Management (BTTM)

Course Title: Tourism Economics

Course Code: TTM 302

Semester: Semester 5

Nature of Course: required

Full Marks: 100

Pass Marks: 50

Credit Hours: 3 Cr.

Curriculum: Recent BTTM syllabus series

Course Description

This course will enable the students to understand the fundamentals of tourism economics, economics of tourism demand, supply, and market equilibrium, production, cost, and pricing for travel and tourism, macroeconomic issues and trave l and tourism, and quantitative methods of tourism economics. Course Learning Outcomes Upon completion of this course, students will be able to: - Discuss the 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 t he demand and supply functions for tourism products, and also explain the concepts and measurement of demand and supply elasticities. - Discuss market equilibrium with government intervention. - Describe the concepts of production function and cost, and also d ifferentiate between business profit and economic profit. - Explain the determinants of market structures, the profit maximization model, and pricing practices in travel and tourism. - explain the macroeconomic issues and effects of tourism on macroeconomic variables. - Examine the relationship between the macroeconomic environment and the travel and tourism business. - Estimate and forecast tourism demand, - Analyze the factors affecting travel and tourism’s yield and future.

Course Objective

The course aims to provide students with cognitive knowledge of basic economic principles and practical skills and capabilities to understand what constitutes a good economic way of thinking in general, and the travel and tourism industry. Course Description This course will enable the students to understand the fundamentals of tourism economics, economics of tourism demand, supply, and market equilibrium, production, cost, and pricing for travel and tourism, macroeconomic issues and trave l and tourism, and quantitative methods of tourism economics. Course Learning Outcomes Upon completion of this course, students will be able to: - Discuss the 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 t he demand and supply functions for tourism products, and also explain the concepts and measurement of demand and supply elasticities. - Discuss market equilibrium with government intervention. - Describe the concepts of production function and cost, and also d ifferentiate between business profit and economic profit. - Explain the determinants of market structures, the profit maximization model, and pricing practices in travel and tourism. - explain the macroeconomic issues and effects of tourism on macroeconomic variables. - Examine the relationship between the macroeconomic environment and the travel and tourism business. - Estimate and forecast tourism demand, - Analyze the factors affecting travel and tourism’s yield and future.

Course Contents:

Lecture hours show the approximate classroom time allocated to each unit.

Fundamentals of economic principles and their application in tourism business: how people make decisions, and how people interact
Tourism economics: nature and scope
Interrelationship between tourism and other sectors of the economy
Leisure and tourism:
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.

Demand function
Variables influencing tourism demand
Levels of choices affecting tourism demand
Factors constrai ning tourism demands
Movement along a demand curve and shifts in the tourism 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
Su pply 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. Market equilibrium
Changes in tourism demand and supply and their effe cts on market equilibrium
Effects of tax, subsidy, and price control measures on market equilibrium.

Production function of tourism products: concepts and types
Concepts of cost: opportunity cost, accounting cost, economic cost, fixed cost, and variable cost in tourism industry
Economic profit and business profit
Market structure: concepts and characteristics, Firm’s equilibrium and profit maximizatio n model
Pricing practices: dynamic pricing, premium pricing, cost -plus pricing, incremental cost pricing, bundling, tying, value -based pricing
Other pricing practices in travel and tour business.

Concepts of macroeconomic issues: GDP, GNP, economic growth, inflation, business cycle, balance of payments, foreign exchange rate, unemployment
Effects of tourism on GDP, employment, economic growth, balance of payments (BOP), and foreign exchange rate
Monetary policy: concepts and instruments
Fiscal policy: concepts and instruments
Relationship between macroeconomic environment and travel and tourism business.

Estimation of tourism demand: regression analysis
Forecasting tourism demand: concepts, steps, and significance
methods of forecasting: survey method and trend projection method
and Factors affecting travel and tourism yields and the future.

Tourism Economics

Syllabus