Griffith University 3203THS Tourism and Hotel Economic Analysis Report

This report provides an economic analysis of the tourism and hotel industries, focusing on market structures, pricing strategies, and the impact of external factors, particularly the COVID-19 pandemic. The report examines how the pandemic has affected demand and supply, leading to revenue management challenges and the potential application of price discrimination. It references relevant economic theories, such as those related to market competition and the factors of production. Furthermore, it discusses the implications for the tourism and hospitality sectors, highlighting potential losses and the need for adaptation in response to changing market conditions. The analysis includes a case study of a cruise ship affected by the pandemic, illustrating real-world consequences and the need for strategic decision-making in the face of crisis.

Running head: TOURISM AND HOTEL ECONOMIC ANALYSIS
TOURISM AND HOTEL ECONOMIC ANALYSIS
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1TOURISM AND HOTEL ECONOMIC ANALYSIS
Summary of the Article
One word which has shattered almost the whole world is Coronavirus. And the same has
affected 81 passengers, who all are stuck on board in the MV Greg Mortimer cruise ship which is
anchored beside the coast of Uruguay (sbs.com.au, 2020). It has been stated in this news that
almost 100 passengers from Australia are present in this ship. Out of 126 passengers and crew
present ion the ship, 81 passengers, as said earlier, has been tested positive, whereas results of 90
other people are awaiting and will be received within 12 to 24 hours. The nationalities of the
affected persons are not disclosed, but it can be noted that there are at least few Australians who
are affected with this disease. Australian nationality has been confirmed to be on board of this
ship, which is stranded in Montevideo for the last two weeks. The affected people are treated in
the hospital of this capital city of Uruguay. The operator of the cruise are working and planning
with the authorities of Uruguay to send the unaffected people to their homes through chartered
flights as early as possible.
References to Economic Theories
The overall demand and supply of the tourism and leisure industry will be affected,
where demand for tour packages and other leisure activities like that of Cruise Travel that is
mentioned in the above discussion will be lessened. All the factors of production will also get
hugely affected due to sudden fall in demand. There will a shift in the demand curve, where
disposable income will be there with the people, but the overall demand to avail the services in
travel and tourism sector across the world will get affected (Sato, 2013). Revenue or Yield
Management will play an integral part in this scenario, through which the authorities who are
having the monopoly power will only be able to increase their revenue earning through following

2TOURISM AND HOTEL ECONOMIC ANALYSIS
the price discrimination policy. They will sell their services to the needy, like to the passengers
who got stuck in this cruise ship for the last 14 days. This will totally be based on the ability and
willingness to pay for the services that they will receive by staying in MV Greg Mortimer (Sica,
2016).
Implications for the Tourism and Hospitality Industry
Coronavirus has hugely affected the global tourism and hospitality sector. Almost all the
nations are adversely affected and it is almost unknown when all the situations will come under
control. In this case, more than 200 people are totally isolated from their native places, but food
and accommodation are getting provided to them, the cost of which is incurred by the tourism
organization who has taken those people on a cruise voyage (Bunakov et al., 2015). Billions of
dollars of loss will be faced by all the people who are engaged with this hospitality and tourism
sector. Demand and supply of this sector are negatively affected due to this pandemic situation
caused by coronavirus across the world. Wages, salaries and production all will be affected due
to this issue, which will lower the demand of tourism and hospitality across the world.

3TOURISM AND HOTEL ECONOMIC ANALYSIS
References
Bunakov, O. A., Zaitseva, N. A., Larionova, A. A., Chudnovskiy, A. D., Zhukova, M. A., &
Zhukov, V. A. (2015). Research on the evolution of management concepts of sustainable
tourism and hospitality development in the regions. Journal of Sustainable
Development, 8(6), 39.
Greg Mortimer: 81 people test positive for COVID-19 on Australian cruise ship off Uruguay.
(2020). Retrieved 6 April 2020, from https://www.sbs.com.au/news/greg-mortimer-81-people-
test-positive-for-covid-19-on-australian-cruise-ship-off-uruguay
Sato, Y. (2013). Rational choice theory. Sociopedia. isa, 2013, 1-10.
Sica, E. (2016). Economic theories of eco-innovations: a comparison between the neoclassical
and evolutionary approaches. International Journal of Innovation and Sustainable
Development, 10(1), 87-102.