Submitted by Malcom A. Noden
One of the persistent issues about the flow of tourism in and to any destination involves something known as seasonality. This refers to the ebb and flow of visitors according to the season of the year. Periodicity is what happens to that flow within any given period or season, and is related to shifts in arrivals according to the day of the week and/or the week of the month. And so it is that we here in Amelia Island categorize our visitor arrivals as being in, “peak season”, (May through August); the “shoulder seasons” (April-September & October), and the “off season” (November through April).
The causes of both seasonality and periodicity are many and varied. One of the larger known causes of seasonality is the public school calendar which, although it was first set in the 19th. Century in large part to accommodate the need for child labor on the farm has only slightly changed over the past 150 years. The other major contributor is the seasonal shift in weather patterns in both supply and demand markets. Periodicity is in large part driven by national and regional holidays and variations in the business cycle.
Within the overall visitor demand flows in each of those seasonal periods, there are periods of higher and lower demand and these comprise what is known as periodicity. For Amelia Island it is very clear from all the available data that our highest level in the flow of visitors, i.e. our “peak season demand”, occurs in the summer months, and typically starts with the Memorial Day weekend in May, and lasts until about Labor Day in the beginning of September. Within that four month period, as with all the other seasons, we have several demand shifts or periodic variations, particularly at weekends and certain weeks in the very peak of the summer season, such as the Memorial Day, and July 4 celebrations.
So what? Well here’s the rub. The variations in seasonal demand are quite significant to us here in the community. When seasonal visitor demand decreases, a lot of our local tourism dependent businesses, such as hotels, restaurants, gift shops, taxi services, sightseeing boats, golf courses, etc., experience a steep drop in business, and this has both direct and indirect effects upon our local economy. Examples of these direct effects include the seasonal layoffs of workers and reduction of room tax revenues for the city. The indirect effects include an overall reduction in the business revenues of those individuals and companies that supply goods and services to the firms that cater directly to tourists, such as wholesale food vendors, baby sitter services, and other similar goods and human service providers. In short, lower demand means, among many other things, equals increased unemployment and reduced tax collections.
So what to do? Well the traditional means of dealing with fewer tourists is by discounting the costs of coming here and staying here. What tourism businesses do is to provide price incentives to encourage the off season traveler with discounts and other associated benefits.
The nature of this response by suppliers to perceived reductions in demand doesn’t require a degree in rocket science or even economics. However, knowing when and how much to discount prices is a learned art form, and even the experts, to their dismay occasionally get it wrong. In economic terms the question of measuring the responsiveness to discounting is known as price elasticity. Simply phrased most tourism products and service are price elastic, which means that increases in demand volume can be purchased by lower prices.
From the perspective of our local community, reductions in demand means fewer tourists and, let’s be honest about it, it does give us a breather from the crowds on the road; in our favorite eating places, and at the beach. Occasional quiet times for us are not all bad.
Perhaps our unspoken attitude oscillation about tourists can best be summarized by a Portuguese proverb; “Visits always give pleasure – if not the arrival, the departure.”
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Editor’s Note Malcolm A. Noden, who is the (Retired) Senior Lecturer in Management, Economics, Marketing and Tourism at the School of Hotel Administration, at Cornell University, is a well known expert in the applied economics of hospitality and tourism policy, promotion and development.
During his thirty-two year tenure at the Hotel School at Cornell, Mr. Noden was the Chair of the Academic Integrity Hearing Board, and served as an advisor to several successive Deans on various international education outreach programs. He taught several courses including, Resort & Condominium Management, Airline Management, Franchising, and two Tourism policy and development seminars. Noden’s publications include a series of articles detailing the Federal tax and partnership consequences of the Tax Reform Act of 1986, in the Cornell Hotel & Restaurant Quarterly, in which new forms of ownership and asset based management, were explored.
Previous to his Cornell experience he served for many years in the operational aspects of the travel industry having been both an owner, and a manager of wholesale and retail travel agencies in the United States. He has had managerial experience in large international agencies as Thomas Cook & Sons, Ltd. and American Express Company, Inc. He lives with his wife Barbara, a retired physical therapist, on Amelia Island, Florida.
June 24, 2013 1:36 p.m.