Travel Method Cost - Case Study Example

Travel Method Cost Summary Yeulu Mountain Park is a recreational project in China, which is putting into practice the Travelling Cost Method (TCM) in its daily operations. TCM is an operational technique employed by established business organizations to make an approximation of all the non-market advantages (Karasin 34). The following is an analysis of the recreational value that is offered by Yeulu Mountain Park in China. The assessment provided involves an assessment of the involved players, effectiveness, efficiency, involved parties, costs structure, as well as the effectiveness. A small section of the analysis dwells on certain suggestions that are likely to bring improvements, especially in the above-identified areas. There are certain variables that significantly determine the achievement of the project’s desired results. Such factors include the entrance fee, entrance fee income, the potential trips to be registered annually, trips to be lost annually. Such variables are analyzed and their respective contributions to the success of the TCM (Parsons 300). In general, the analysis evaluates the Travel Cost Method as technique of providing recreational value of Yeulu Mountain Park. The goal is to provide important data for stating a better entrance fee. Case Analysis The population under target in the analysis is Yeulu Mountain Park visitors. The visitors are very many to incorporate in the study. A representative sample is therefore considered. As discussed above, there are two groups of visitors in the park, the foreign (non-local) visitors and the native (local) visitors. In the questionnaire used being considered for the analysis, 200 respondents were chosen to make the represent the views of the entire population if visitors. Each in the sample represented unit for analysis in the structured questionnaire. The sampling technique used in the analysis is stratified random sampling. It involves sampling every subpopulation separately to increase the estimation accuracy. The data used in the analysis was collected from Yeulu Mountain, Changsha city of China, in July 2007. Direct interviews were the collection method used. It assisted in improving accuracy as no data was left out of the questionnaire. It helped to ensure that the data used in the case analysis was complete. From experience, it has been confirmed that the entrance fee income obtained is dependent on the set entrance fee. The entrance fee income can be maximized by the amount of the fee placed on, by the National Park’s management. The demand function of the Park’s travel cost is approximated by using the primary data on the travel cost (Clawson 56). The model utilizes the Poisson regression model as well as the study information obtained directly on-ground. Being an analysis involving traveling and expenditure, cost items must be analyzed. A journey to the park was found to comprise the following; • Transport costs • Accommodation expenses • Access fee • Time costs • Other expenditures The total trip costs were, therefore, taken to be a function of; transport costs, accommodation expenses, access fee, the time costs and other expenditures. The traveling costs comprise all expenses on traveling to from Changsha and the expenses of traveling to and from the park. The total travel costs for the park are divided into two portions (Changsha Price Bureau Web). These parts are; • The traffic expenses to and from the park in Changsha • The travel expenditure to be paid to the park. The travel expenditure to be paid to the park is obtained using the travel cost to be paid to Changsha, over the number of nights spent in Changsha. The result is then multiplied by the that of the park in each trip to Changsha. For the non-foreigners, traffic expense inside Changsha alone is considered in the estimation and computation of the total travel cost. The dimensions considered in obtaining the traffic expenses inside Changsha are equal for both the non-foreigners and foreigners. It is estimated on or after the center of Changsha city to the south gate of Yuelu Mountain Park. The total distance of travel to the park, inside Changsha, is calculated as the linear distance beginning at the middle of Changsha city to the park. The process is made possible by using Google earth. The about way is 8km, and the distance in one direction is 4km. It is perfectly symmetrical in terms of the distances to be covered to and from the place. Yeulu Mountain National Park can be accessed by using alternative ways like, foot, bus, private vehicle, cycling in a bike, using an electric bike, or by hiring a taxi. Here we only have to consider the expense of bus, private car, and taxi. A bus ticket from the city center to Yuelu Mountain Park goes for € 0.1 per passenger, on average, for a one-way journey. A two-way journey is, therefore, € 0.2. The cost of hiring a taxi is: € 0.3 for the first one kilometer, every € 0.1 per half kilometer is added for the following two kilometers, after the first 3 kilometers, every kilometer adds € 0.18. All the passengers having privately owned have their total travel cost computed by the fuel price. The amount of fuel used changes greatly from various models of cars. In most cases, the range within which it lies is from 0.06 to 0.1 liters for every kilometer. In a moderate way of perception, every car uses almost 0.08 liter petrol for every kilometer. According to Tour Resource Department of Yuelu Mountain Park 2007, the average petrol price in 2007 is € 0.446 for every liter. The travel cost is hence found by taking the fuel costs per kilometer. The costs figure is multiplied by the trip distance covered around. Parsons (270) notes that each recreation trip consumes some time either on traveling or on entertainment. (Cesario 714) observes that the trip cost, time cost comprises the time taken in traveling to and from the site and time taken on the site. Discussion There is a probability that some number of trips will be lost every new year. The probable number of trips that are likely to be lost (to the Mountain National Park) is known by assessing the views and intentions of native respondents, of visiting the Mountain Park. The interview is conducted by persons belonging to different age groups. The travel cost demand function is constructed by utilizing the primary information on the trip costs. The average access value for every trip is approximated to be € 0.75 for every local person. The corresponding average access value for every trip, for each foreigner, is approximated to be € 0.75.The figures make a combined access value of € 20.43 million every year. On the basis of the travel cost demand function, an entrance fee of € 5.43 would maximize the revenue collected from the visitors (Tour Resource Department of Yuelu Mountain Park Web). It therefore, implies that a figure that exceeds the double of the prevailing entrance fee would be effective. The result could potentially be utilized when deciding on the entrance fees. In the coming years, the park management should ascertain deeply the visitors purpose and motive of visit or evading the park. Averagely, the income per month for foreign visitors is relatively higher. It is € 205.5, which is higher than that of the native visitors that was€ 133.5. Comparatively, Changsha citizens’ median monthly income in 2007 was € 134.61 (Statistical Information of Changsha Web). Therefore, the higher the visitors earn the more trips they will create to the park. The age coefficient for the native visitors is positive and significant. It is which demonstrates the older they are, the more trips they will take to the park. It is because many old persons like exercising regularly in the park. Some of the retired chaps even come daily. Every traveler’s average expenditure when making a trip to Yuelu Mountain Park sums to about € 26.05. It includes the actual spending and time costs. The figure is computed as per the applicable travel cost data provided by the respondents. Travelers spend almost 15.46% of their monthly earnings on park leisure. Among the foreign visitors interviewed, about 21.15% of their earnings are planned for leisure expenditures. The natives used only 6.7% of their total earnings on park trips. It is lesser than that of foreign visitors by three (Statistical Information of Changsha Web). The department of tourism resource of the park said the total number of trips taken to the park in 2006 was about 1054000. Of all these, 746000 were natives while 308000 were foreign visitors (Tour Resource Department of Yuelu Mountain Park 2007). Suggestions. Whenever the cost surveys are conducted, the respondents should be handled differently. It is because different the respondents who visit the Yeulu Mountain National Park use various kinds of cars. It is, thus, rather impractical for them to submit detailed information on their expenditure by themselves. Because the recreation at the park is considered to be part of the trip, the total trip costs of the park should always be apportioned, through putting the weights together. Since visiting the park is mostly influenced by the entire trip plan, the computation of the weights must be done with an understanding of the implications. It has been established that some visitors make multiple purpose trips to the park (Clawson 73). It means their visits to the park could be aside decisions as they are traveling their loved ones. So in case a change is made to the entire trip; then they are most likely to cancel their plans for visiting the park. So the weight of their intended destinations on the entire trip decreases because Yeulu Mountain Park remains the biggest site in Changsha. Apart from the travel costs like the lodging costs and the respondents’ expenditures in the park, all the other expenses should be asked directly in the questionnaire. All the foreign visitors are supposed to give the information on their alternative destinations inside the entire trip. It should be effected in an methodical way. The data needed for travel cost computation need to be obtained by way of a questionnaire. Two parts of weights should be included in computing each trip costs and time costs for park recreation (Cesario 719). It helps to solve the complication of multiple purpose trips as it will ensure the allocation of destination weights to the trip costs and the time costs. Such allotment helps in getting the cost percentage that go to the park. In conclusion, the approximated consumer surpluses together with the suggested entrance fee have to be implemented with a lot of care and consideration for the suggestions to be impactful. Caution must be observed because the truncation of the on-site survey information is not catered for in the Poisson model estimations of the analysis. The data needed for travel cost computation need to be obtained by way of a questionnaire. Works Cited Cesario, F. 2009. Value of time in recreation benefit studies. Land Economics 55: 711-722. Reprint. Tour Resource Department of Yuelu Mountain Park 2007. Annual Report of Yuelu Mountain Park Tour, 2006. Unpublished manuscript. Parsons, G. R. 2003. The travel cost model. In Champ, Patricia A.; Boyle, Kevin J. & Brown, Thomas C. (Eds.): A Primer on Nonmarket Valuation. p. 269-329. Karasin, L. 2006. The Travel Cost Method: Background, Summary, Explanation and Discussion. Unpublished manuscript. Changsha Price Bureau 2005. Meeting of holding court of the entrance fee of Yuelu Mountain Park [Internet site]. Available on web: http://www.csprice.com/admin/list.asp?id=3844 [Cited 14 March 2008]. Clawson, M. 2011. Methods of measuring the demand for and value of outdoor recreation. Reprint No. 10. Resources for the Future. Statistical Information of Changsha 2008. Statistical communiqué on National economy and social development of Changsha in 2007. [Internet site]. Available from: http://www.cstj.gov.cn/html/2008/04/20080401155231-1.htm [Cited 17 April 2008]. Read More