Tourism and Recreation
Scope
Tourism and Recreation tests tourism systems, travel products, hospitality operations, event planning, sustainability, and pricing. Questions often require interpreting a tour package, calculating a break-even price, or choosing a sustainable destination practice.
Core rules
- Tourism involves demand, supply, transport, accommodation, attractions, and intermediaries; a change in one part affects the system.
- Fixed costs do not change with the number of travelers; variable costs change per traveler.
- Break-even price covers total cost; target profit must be added before dividing by expected participants.
- Seasonality affects capacity, staffing, and pricing, so peak and off-peak plans differ.
- Sustainable tourism balances visitor experience, community benefit, and environmental protection.
Worked example
A tour has fixed costs of 1,000,000, variable cost of 50,000 per person, 20 expected participants, and a target profit of 200,000. Total variable cost = 20 x 50,000 = 1,000,000. Total cost = 2,000,000. Required revenue = 2,000,000 + 200,000 = 2,200,000. Price per person = 2,200,000 / 20 = 110,000. Reasoning: add target profit to total cost, then divide by participants.
Traps
Confusing revenue with profit overstates success. Treating fixed costs as per-person costs distorts pricing. Ignoring seasonality produces unrealistic staffing and cash-flow plans. Overbooking without a recovery plan damages reputation and consumer trust.