Value added is only part of the production function. The case study presented in t paper focused on the changes in employment and income ratios. To obtain comprehensive insights between business operations and capacity utilization, relationships between the Leontief technical coefficients (type I sale multipliers) and capacity utilization should be included. Empirical data are needed to establish elasticity between 1) price change capacity utilization, and 2) intermediate input usage and cap
utilization, the likely pattern is an increase in output price and proportionally lower cost p unit output. These patterns would lead to reduced type I sales multipliers and larger v added components. The joint influence on the type II sales multipliers however is undetermined as it depends on the nature of each industry.
The examination of varying economic ratios should be extended to other servic sectors, especially for food and beverage services, transportation, and entertainment services. These three sectors have characteristics similar to accommodations in terms of product perishability and pricin
utilization and the value added components. Modifying the value added components fo multiple sectors simultaneously is also encouraged, so that the joint effects on the res the economy can be modeled.
The third perspective deserving further discussion is the flexibility of product switching and capacity creation in tourism operation, such as offering flexible flight
schedules or converting ski resorts into golf courses in the summer. Service diversification, cross-training employees or creating adjustable capacity allows firms to offer multiple goods within idle capacity or when faced with a dramatic increase in demand. Governments in Taiwan, for example, eagerly promote MICE industry (Meeting, Incentive, Convention, and Exhibition) to the accommodation sector as an approach to combat seasonal demand of leisure travel. The measurement of capacity utilization of the hotel operation, theref goes beyond typical “occupancy rate” as lodging sales is compensated by
r t of
s ore, conference and anqueting business. Considering the economic transferability of resources, there is no single standard definition of capacity association with CU and I-O
ost b
utilization and the
multipliers would be much more complex than suggested in this paper.
5. Conclusion
Demand fluctuation is the nature of the tourism industries. Standard I-O analysis is insufficient to reflect the changing cost structures of services due to capacity utilization.
Especially in the process of tourism policy evaluation, the proposed scenarios may contain a variety of supply and demand conditions which should be evaluated from the perspective of the final demand changes as well as the resulting modification of I-O structures. The c structure and economic ratios in the accommodation sector, for example, presented in the
Input-Output table, would be different for two consecutive years; one with an average 50%
occupancy rate and the other with an average 70% while assuming other factors remain constant. The precision of estimation can be improved when these two scenarios (50% vs.
70% occupancy rate) are each applied with distinct I-O multipliers. It is therefore impo to incorporate a mechanism that will reflect the market dynamics into the I-O structu
rtant res in
rms o emand
rmined
pply/demand ratios for tourism industries. By integrating capacity utilization to the I-O
from Dr. Daniel Stynes at Michigan State niversity, Dr. Ariel Rodriguez at University of Florida and two anonymous referees are highly appreciated. Financial support ational Science Council under
Allen, M f consumer services. Long Range Planning,
Archer sm multipliers: The state of art. Cardiff: University of Wales Press.
te f price factor, input ratio, and labor efficiency based on different supply and d levels. Under the proposed model, tourism economic impacts will then be dete simultaneously by final demand changes as well as the level of capacity utilization.
For tourism industries, one of the critical problems in impact estimates is the potential biases in analyzing short term events or policies that will change the su
model, the approach suggested here offers an intermediate level of modeling that corrects some of the biases of standard I-O models with minimal increases in complexity.
Acknowledgements: Constructive comments U
from the Taiwan N NSC 94-2420-H-390-006 is acknowledged.
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