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Managerial economics
 

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Managerial Economics for Tourism Management.

   

Section 1

The concept of managerial economics


Asst.Prof. Komsan Suriya
Faculty of Economics, Chiang Mai University December 18, 2008



 The concept of managerial economics will be briefed with its objective, focus, task, element, equipments, difference from microeconomics, and tools.

1. Objective of managerial economics
 Apply economic theory to decision making in practical business or transactional problems.

2. Focus of managerial economics
 The focus is at choices. An essential sentence in managerial economics is ?Another option is??.

3. Task of managerial economics
 Evaluate the tradeoffs among choices.
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Managerial Economics for Tourism Management.

Section 2

Questions in tourism management


Asst.Prof. Komsan Suriya
Faculty of Economics, Chiang Mai University December 19, 2008


When asking about tourism management, it is a question about what to be managed. Tourism management is management of transactions related to tourism activities. They are not only business activities but also non-profit activities such as national or provincial tourism promotion. Important transactions should be listed first. Then ranking of the importance in terms of value of the transactions should be made. This is a concept of value stream. Each transaction contains value. Different value is in each transaction. Thus, we will find out what are those 20 percent of transactions which contain 80 percent of the value according to the Pareto rule of 20 and 80.
 
An activity is a value stream. Many transactions are involved in a value stream. Each transaction contains its own value. The highest valuable transaction should be investigated first. Less valuable transactions will be investigated later.
 
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Managerial Economics for Tourism Management.

   

Section 4

Specific topics related to green tourism management


Asst.Prof. Komsan Suriya
Faculty of Economics, Chiang Mai University December 19, 2008


Green tourism is more than ecotourism. Ecotourism is an environmental friendly tourism. Green tourism requires seven green parts according to Tourism Authority of Thailand (TAT) in 2008. The seven parts are listed below.
 
1. Green heart
  Positive attitude, right perception and appreciation toward the environmental friendliness and the concern of the danger threatened by the global warming should be in hearts of all operators in the tourism industry.
 
2. Green logistics
  Transportation between tourism sites and accommodations should reduce the emission of green house gases, save energy and use non-fossil fuel energy.
 
3. Green attraction
  Attractions should be managed in accordance to the policy of sustainable tourism especially the commitment in environmental preservation and reduction of green house gases.
 
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Managerial Economics for Tourism Management.
   

Section 3

Specific topics related to the management of community-based tourism


Asst.Prof. Komsan Suriya
Faculty of Economics, Chiang Mai University December 19, 2008

 
Community-based tourism (CBT) is a kind of tourism organized by people in community. Villagers get involved in management, hospitality, and income distribution. Its product is a combination of ecotourism and cultural learning. It aims at the widest income distribution to people in the community.
 
CBT is different from mass tourism. Mass tourism consists of enterprises in many sectors such as tour operator, accommodation, food and beverage, entertainment and transportation. A tour operator rent vehicles, book hotels, buy tickets for shows, and link these functions to serve tourists. The tour operator needs not to invest in assets because enterprises in other sectors invest instead.
 
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Managerial Economics for Tourism Management.

   

Section 5

Tourism and poverty reduction


Asst.Prof. Komsan Suriya
Faculty of Economics, Chiang Mai University December 19, 2008


Tourism generates a lot of money to a country. Some countries earn from tourism more than from commodities exports. An idea is that if the tourism income can be shared to the poor, it will be so good to them to become richer and get out of poverty.
 
The idea of pro-poor tourism was emerged to find out how to share tourism income to the poor. Some great expectations even hope for a larger portion of income goes to the poor rather than the rich.

The idea remains an idea when the real world situation indicates that the rich control tourism industry. The poor hardly participate in the industry. The poorest of the poor are even much harder to share tourism income. Although literatures such as my Ph.D. thesis showed that poor households participating in tourism will be richer and able to get out of poverty, there is no clear idea how to enhance, empower and encourage the poor to participate in tourism.
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