Seasonality of demand

Abstract

Fluctuation in demand is a troublesome area for managers in the service economy (Zeithaml, Parasuraman and Berry 1985). Over the annual cycle, the greatest fluctuation in demand for tourism occurs due to changes in the seasons (Sasser 1976). Such fluctuations have been termed seasonality of demand (SOD). For many firms competing successfully in tourism, SOD constrains profitability, while for other firms it may determine their survival. Consequently, understanding and adjusting to SOD dominates many of the decisions made by tourism managers (Soesilo and Mings 1987). This study reports on the seasonality of demand faced by tourism businesses in Alaska. First, the investigation examines the level of SOD confronted by these tourism businesses. Currently the literature does not provide an empirical assessment of the level of SOD found for a cross section of firms in a tourism region. Secondly, organizational, environmental, and demand structure variables of the firms are correlated with the level of SOD. This portion of the analysis endeavors to describe which factors relate to levels of SOD. Data and Method. Travel businesses within the state of Alaska comprised the universe for the study. The marketing manager or owner of a tourism business was contacted by telephone during normal business hours in March 1987. Out of the 187 firms participating in the study, 179 provided sufficient information for the study. In the survey, the level of SOD for each firm was measured using the percent of revenue generated during the peak summer months. The three major types of independent variables (organizational, environmental, and demand structures) were measured either as dummy variables or as continuous variables. Findings. Table 1 shows the frequency distribution which monitors the level