Showing papers in "Tourism Economics in 2007"

Tourism, Capital Good Imports and Economic Growth: Theory and Evidence for Spain

Abstract: Exports are generally assumed to promote long-term growth through two main channels The first, known as the export-led growth (ELG) hypothesis, is by enhancing economy-wide efficiency This mechan

How fast are small tourism countries growing? Evidence from the data for 1980-2003.

Abstract: This paper analyses the empirical relationship between growth, country size and tourism specialization by using a data set covering the period 1980�2003. It finds that tourism countries are small and grow significantly faster than all the other subgroups considered in the analysis. Tourism appears to be an independent determining factor for growth: controlling for initial per capita income and for trade openness does not weaken the positive correlation between tourism specialization and growth. Another finding of the paper is that small states are fast growing only when they are highly specialized in tourism. In contrast with some previous conclusions in the literature, smallness per se is not good for growth.

The Relationship between Foreign Direct Investment and Tourism: Empirical Evidence from China:

Abstract: This paper investigates the causal link between foreign direct investment and tourism in China by employing the Granger causality test under a VAR framework proposed by Zapata and Rambaldi (1997). Only a one-directional causality is found from foreign direct investment to tourism. This explains the rapid growth in the tourism market in China during the past decade.

Coastal tourism and 'Dutch disease' in a small island economy.

Abstract: Using the embryonic ‘Dutch disease’ literature on tourism, this paper examines the economy-wide effects of an inbound tourism boom on a small open island economy. It illustrates a range of new find...

Estimating the economic value and impacts of recreational trails: a case study of the Virginia Creeper Rail Trail.

Abstract: Many communities are interested in developing and maintaining recreational trails to benefit trail users and as tourist attractions to stimulate economic growth. In this paper, a study is described which estimates the net economic value to trail users and the local economic impacts of the Virginia Creeper Rail Trail in south-western Virginia, USA. The monetary valuation results suggest that the trail is a highly valuable asset to the people who enjoy using it and to local businesses who benefit from trail-related tourist expenditures. The integrated valuation methodology and results can facilitate quantification of recreational trail economic benefits in other locations.

Analysis of foreign tourism demand for Croatian destinations: long-run elasticity estimates

Abstract: Given that tourism is a significant source of export revenues for Croatia, it is vital for policymakers to understand the factors affecting foreign tourism demand for Croatian destinations. This st...

Employment, Pay and Discrimination in the Tourism Industry:

Abstract: Using a large administratively matched employer–employee data set, we analyse the gender wage gap in the Portuguese tourism labour market. As background, employment and pay in the tourism industry are thoroughly characterized. Using the Oaxaca–Blinder decomposition of the gender wage gap, we find that 45% of the gap is due to differences in attributes of male and female workers in tourism. Our estimate of the coefficient of discrimination in the tourism industry (8.4%) puts it well below the non-tourism average (15.8%). We argue that this is due to the fact that minimum wage legislation provides an effective protection to low-wage earners, which is especially important in low-wage industries such as tourism.

Measuring the Impact of Tourism on Economic Growth

Abstract: This paper presents a methodology for measuring the contribution of tourism to an economy's growth, which is tested with data for Cyprus, Greece and Spain. The authors use the growth of real GDP per capita as a measure of economic growth and disaggregate it into economic growth generated by tourism and economic growth generated by other industries. The methodology is compared with other existing methodologies; namely, Tourism Satellite Account, Computable General Equilibrium models and econometric modelling of economic growth.

Cruising for colones: cruise tourism economics in Costa Rica

Abstract: This study provides an overview of cruise tourism economics in Costa Rica. We focus on cruise passenger demographics, preferences and purchase behaviour, and crew purchase behaviour juxtaposed against information from the broader Costa Rican tourism sector. Costa Rica's cruise tourists are motivated by similar features as are other tourists and tend to visit at the same time as the broader tourism industry peaks. They are older and less wealthy, and spend less time and money than the average tourist, raising some concerns as to whether cruise tourism in Costa Rica should be encouraged.

Public goods in tourism municipalities: formal analysis, empirical evidence and implications for sustainable development

Abstract: This paper formally analyses the effects that public goods (in a broad sense) have on tourists and private tourism firms. By approaching the tourism product as a bundle of characteristics, the paper shows how the supply of public goods in tourism municipalities positively affects both the tourists' utility functions and the private firms' production functions. Some implications of this fact regarding the sustainability of tourism are discussed. By means of hedonic methods, empirical evidence of location on prices for hotels on Catalonia's coast (Spain) is provided.

Golf Tourism Repeat Choice Behaviour in the Algarve: A Mixed Logit Approach

Abstract: This paper focuses on the behavioural intention of repeater golf tourists in the Algarve. The analysis employs a questionnaire undertaken in 2004 to ascertain the significant characteristics of the returning golf-playing tourist. A random parameter logit model is used to analyse which characteristics (for example, individual characteristics, motivations, tripographic variables, and the most quoted attributes of golf destinations) are associated with the probability of golf tourists playing in the Algarve to return to this Portuguese tourist region, taking into account uncontrolled heterogeneity of the data. This model outperforms the standard logit model. Some policy implications are presented.

Tourism Specialization and Environmental Sustainability in a Dynamic Economy

Abstract: This study focuses on the dynamic behaviour of a small open economy specialized in tourism based on natural resources. The author analyses the steady-state properties in two scenarios, with and without public abatement expenditures, and a unique local saddle-point equilibrium is found for both cases. The analysis of the dynamics provides an alternative explanation for the observed positive growth performance of small open tourism-based economies and for the worldwide increases in tourist inflows, which are seen as transitional phenomena towards the path to the steady state. Moreover, in defining the conditions under which tourism development, improvements in environmental quality and economic growth can simultaneously occur, the model provides theoretical microfoundations for sustainable tourism. Finally, in both scenarios, the author analyses the issue of market failures, taking into account two different kinds of externality and finding the respective optimal tax rates that will induce private agents to...

Measuring the Economic Impact of Australian Tourism Marketing Expenditure

Abstract: The objective of this study is to quantify the effects of marketing expenditure by the Australian Tourist Commission (ATC). Cointegration analysis and a dynamic modelling approach are used to estimate the elasticity estimates of income, price, price of substitute, cost of travel and marketing expenditure for Australia’s four major tourism markets, USA, Japan, UK and New Zealand. ATC marketing expenditure has a positive effect on international tourism demand and the magnitude of the effect varies from country to country. In promoting international visitor arrivals to Australia, not only ATC and non-ATC marketing but the word-of-mouth effect and visitor satisfaction leading to repeat visits also play an important role. The performance of the ATC marketing strategy measured in dollar return per dollar invested in the international tourism marketing is higher in the New Zealand market, followed by the UK, Japan and US markets. The estimated overall average dollar return per dollar invested in international tourism marketing is 8:1.

Contrasting the uses of TSAs and CGE models: Measuring tourism yield and productivity

Abstract: Tourism satellite accounts (TSAs) and computable general equilibrium (CGE) models are used increasingly in tourism analysis, though they have distinctly different functions. These are illustrated by means of two examples. The first of these involves developing measures of profitability and productivity of the Australian tourism industry – the national TSA was used to provide the database for this exercise. The second involves measuring the yield of different types of tourists to the tourism industry and the economy as a whole. TSAs provide an appropriate technique to estimate economic yield at the industry level, while the CGE approach is used to estimate the yield to the economy as a whole.

Foreign Investment in Tourism and Small Island Developing States

Abstract: This paper presents evidence from a global study of the scale and impact of foreign investment in tourism, highlighting the implications for small island developing states (SIDS). It draws upon findings from a two-year United Nations Conference for Trade and Development (UNCTAD) research and policy analysis project based on a global survey of transnational hotel groups with a presence in developing countries and in-depth case studies of domestic and international investment in tourism in twelve countries. The project aimed to provide empirical evidence to help policymaking in developing countries that wish to benefit more from tourism foreign direct investment (FDI). It does not favour foreign investment above domestic investment, but aims simply to provide more information on an aspect which is increasingly a policy priority for developing countries and which is not frequently addressed in empirical terms in the literature.

'Tragedy of the commons' in the tourism accommodation industry

Abstract: This paper models the interaction between the tourism accommodation industry and environmental quality - herein considered as a composite common pool resource. Results from the study show that open access generally leads to both economic and environmental overexploitation, that is 'the tragedy of the commons'. This also affects the overall tourism industry since tourism accommodation and environmental quality perform central roles. This ultimately leads to mass tourism characterized by tourists with low willingness to pay. The results show that, apart from situations where positive externalities on other activities are very significant, or that open access faces binding restrictions (such as land availability), a firm's entry should be limited, based on both efficiency and sustainability.

Environmental quality and optimal investment in tourism infrastructures: a small island perspective.

Abstract: As tourism is becoming one of the most important sectors of the world economy, the number of small islands trying to develop a competitive tourist activity is increasing and this strategy appears as growth enhancing. In most cases, it relies on the environmental quality of the destination, but also on lodging infrastructures and related services that tourists deserve in order to enjoy a good experience. This paper explores the intertemporal trade-off between investments and environmental quality preservation needed to ensure tourism profitability in the long run. It highlights the possible cyclical evolution of environmental quality, tourist infrastructures, investments and visitor numbers, considering both the central planner and the market solutions.

Resource dependency, costs and revenues of a street festival

Abstract: The financial position of a tourism-oriented street festival in Sweden is examined within the context of resource dependency and stakeholder management theory, focused on testing two hypotheses derived from this theoretical base. Data from a five-year period revealed how costs associated with the strongest stakeholders (that is, with the greatest bargaining power) greatly increased relative to costs associated with weak stakeholders. The festival was also more able to increase its revenues from weak stakeholders than from those in strong bargaining positions. Conclusions are drawn on how this case confirms and elaborates upon theory, particularly by applying it to the festival sector. Management implications are also drawn on how festival organizations should manage relationships when they hold strong or weak positions relative to stakeholders.

The Determinants of Cluster Activities in the Australian Wine and Tourism Industries

Abstract: This paper discusses wine and tourism clusters and the recent innovation of wine tourism in which businesses operate within both industries. The concept of micro-clusters is examined in terms of trust, networking, collaboration and other activities, all of which are argued to depend on the concepts of game theory and sunk costs. The study involved both interviews and a questionnaire. Conceptual variables are created from the questionnaire responses using factor analysis. The determinants of cluster activities are modelled using regression analysis. The effects of industry, place and respondents' entrepreneurial characteristics are used as exogenous variables. The study finds that industry does seem to be more important than place in the determination of networking and cooperative cluster activities, and that members of the wine tourism industry participate more in these activities than members of the tourism or hospitality industries. The addition of three variables that embody the entrepreneurial charact...

Research note: Does transport infrastructure matter in overall tourism development? Evidence from a sample of island economies

Abstract: This paper focuses on investigating the importance of transportation infrastructure in the overall attractiveness of a destination. It extends a classical demand for international tourism function to include transport infrastructure, as measured by proxies of land and air transport, as additional and separate inputs in a panel data framework for the case of island economies. Due to the possibility of reputation effects in tourism, the study also employs dynamic panel data estimates for a sample of island economies. Results from the analysis show tourists are sensitive to both types of transport infrastructure. Disaggregated studies further show that this is more pronounced for top and renowned island destination cases. The study also confirms the existence of persistence effects and repeat tourism for the latter destinations.

The Tourism Industry as an Alternative for the GCC Oil-Based Rentier Economies:

Abstract: During the past four decades, the tourism industry has emerged as one of the leading industries worldwide. This article examines its development in the Gulf Cooperation Council (GCC) countries. The article looks at, first, the main factors that led the GCC rulers to select tourism as a major catalyst for enhancing economic development and diversification. Further, it examines the GCC comparative advantages in the global tourism arena and then analyses Dubai's tourism development as an example of both the potential as well as the costs of having a well-established tourism industry in the Arabian Gulf region. Finally, it considers the major barriers to further GCC tourism development. The main conclusion of the article is that, although tourism development may provide a viable economic solution to some of the major socio-economic problems currently facing the GCC oil rental countries, one should not disregard the fundamental barriers and risks to further GCC tourism development, first and foremost in the area of increasing dependence on foreign labour.

Factors affecting systematic risk in the US restaurant industry.

Abstract: This study examines the effects of the financial ratios on systematic risk in the restaurant industry. The effects of those determinants on risk were also compared between the quick-service and full-service segments. The study used 58 publicly traded restaurant firms listed in COMPUSTAT within the category of eating and drinking places (SIC code 5812). To explain systematic risk, six financial variables were included in the study: profitability, leverage, efficiency, liquidity, growth and firm size. The most significant financial variables that affect systematic risk were profitability (return on investment), leverage and liquidity.

Research Report: Evaluating Short-Term Tourism Economic Effects in Confined Economies – Conceptual and Empirical Considerations:

Abstract: Given the necessary involvement of government with the tourism product, accountability for government's expenditures of tax dollars is of increasing importance. This paper discusses the literature for three types of analyses that governments can use to ascertain the effectiveness of their spending of tax dollars to promote a tourism destination. The shortcomings and benefits for each method are discussed. Conclusions based on the type of method chosen require that the user understand the specific context, time horizon and their need for the study. For the case study presented in this paper, the context of a confined area, the time horizon of short-term and the need of finding out the economic impact of tourism for Kissimmee/St Cloud, the I-O/SAM method is deemed optimal. A case study of Kissimmee/St Cloud, along with the results of the economic impact, is presented. Results of the study show that taxpayers are receiving a substantial return on their tax investment for the tax dollars spent.

Research report: The lingering effect of colonialism on tourist movements

Abstract: This short study examines the lasting effects of colonial ties on tourist movements between nations and their current and former possessions. The study examines 56 jurisdictions in six geographical regions that were once colonies of or remain the possessions of eight nations. Residents of Europe and America show a preference for travel to destinations with strong historical/political ties and an equally strong aversion to travel to jurisdictions where no such connection exists. Likewise, destinations rely heavily on former colonizers as a key source of visitors, especially from long-haul markets. Such a pattern is not evident among either source European markets without a strong colonial history or destination countries without a colonial past. The lingering effects of colonialism are especially noticeable among French and Dutch tourists. The study suggests that 'colonialism' may need to be included as a variable in models of tourist movements.

Resorts, Culture, and Music: The Cape Breton Tourism Cluster:

Abstract: Cape Breton, Nova Scotia, Canada saw rapid growth in heavy industry at the turn of the 20th century. The industries were in severe decline by the 1960s. To stabilize economic shrinkage as a result of job losses in coal and steel, the federal government, through two Crown corporations, developed strategies to create a fully stratified tourism cluster. The research examines the growth of the tourism cluster in Cape Breton, noting early investments in infrastructure, large-scale programmes to attract private investment, recognition of the role of cultural tourism and the development of a segmented marketing programme.

Yield measures for special interest Australian inbound tourism markets

Abstract: Until recently, much of the focus within the tourism industry has been on visitor numbers rather than yield. Although there has been much said about the need to move beyond visitation numbers to more meaningful measures of yield, this has been little more than rhetoric. However, the term 'profitless volume' which has been used since the early 1990s demonstrates a growing recognition of the fact that tourism visitor numbers are not an ideal measure of tourism performance... A key theme of the Federal Government's Tourism White Paper (2004) is that in order to attract visitors and generate repeat visitation, Australia's tourism industry must earn a reputation for high quality, value and variety. To this end, Australian tourism stakeholders should bepro-active in developing new and innovative products and experiences with a focus on developing' high-yield' niche markets. A focus on 'yield' is important in improving the profitability of the tourism industry and enhancing Australia's tourism competitiveness.

Tourism and Empirical Applications of International Trade Theory: A Multi-Country Analysis

Abstract: This paper examines the application of quantitative techniques to further our understanding of international trade theory with respect to tourism flows. The analyses are based on the construction of Balassa and Grubel–Lloyd Indices, as well as the construction of dynamic indices. The results of the analyses suggest that international trade theory has much to offer the study of international tourism flows. Many countries seem to specialize as both exporters and importers of tourism services. The analyses also explore the theoretical assertion that intra-industry trade is likely to be of importance in understanding international tourism flows.

Research Note: Modelling Tourism Demand – an Econometric Analysis of North American Tourist Expenditure in Ireland, 1985–2004:

Abstract: The monetary contribution of inbound North American tourism to the Irish exchequer is economically substantial, generating more tourist revenue earnings per capita in Ireland than visitors from any other country. The purpose of this paper is to present a macroeconometric analysis of North American tourist expenditure in Ireland, thus providing an insight into the effects on expenditure patterns of the adjustment of key macroeconomic variables. Using an econometric causal model, key macroeconomic and demographic variables are regressed on real expenditure of the North American, US and Canadian regions. Among the main findings, it is revealed that the real exchange rate variable and the over-45 age cohort exert a positive and statistically significant result in the case of all three regions. The paper acknowledges that appropriate strategies are required to maximize the potential of those subsectors providing the greatest 'value for entry' from an Irish tourism perspective to enable the future proliferation of inbound revenues for the tourism industry.

Methodological aspects of preparing the German TSA, empirical findings and initial reactions

Abstract: In 2003, the Institute of Economic Structures Research (GWS mbH) developed a tourism satellite account (TSA) for the Federal Republic of Germany relating to the year 2000. The TSA framework facilitates systematic measurement of the direct economic impact of tourism activities. This paper provides a comprehensive review of the German TSA calculation procedure. It explains how the data of tourism statistics can be consistently combined with the national accounts framework. In 2000, the gross value added of tourism activities of private households in Germany amounted to nearly �57.5 billion, corresponding to a share of 3.2% of the total gross value added. In the final part of the paper, some initial reactions and objections to the results are discussed.

Impact of Tourism Infrastructure on Regional Development: The Implantation of a Center Parcs Resort in Northern France:

Abstract: This paper assesses the impact of the implantation of a major recreational resort (670 new direct jobs planned) on the local economy of an isolated rural area in northern France. To estimate the induced effects, an original hybrid model combining Keynesian and economic base theory was used to take into account the predominant role of the first wave of spending in the tourism sector. At the local level, this resort has the potential to create between at least 70 and 80 indirect and induced jobs, provided support is lent by synergy in local policymaking (especially in training and habitat).