Tourism Economics

This paper aims to advance the understanding of the micro-economic foundations of tourism demand theory, particularly through bringing out some of the implications of the tour characteristics approach to utility analysis, and also through explicitly linking the micro-economic theory of the individual tourist to the aggregate level demand models as actually estimated. Important implications of the tour characteristics theory are that it yields theoretical rationales for the importance of market segmentation of tourism demand, and for tourism product differentiation. Consideration of the aggregation issues in the particular context of tourism demand shows aggregation to be justified and feasible when the market is segmented. Market segmentation is shown to be theoretically important for good tourism demand models, supporting its generally observed practical usefulness. Alternatively, aggregation can be justified through a random utility argument that assumes independence of individuals' tour decisions.

Paul Omerod's recent book, The Death of Economics, provides the background to this paper. As Omerod's book laments the state of mainstream economics it seems an appropriate time to subject economics for tourism degrees to similar critical scrutiny. There has been a rapid growth in institutions offering degrees in tourism, from none in 1985 to 40 and rising by 1995, and economics has generally been part of the package on offer to students. This paper starts by outlining three serious challenges to economics both as a discipline and as educational knowledge for tourism students. It then examines how the educational package of economics is framed, and from this concludes that economics courses may arise more from accident (or inertia) than design, or that the design may not be appropriate for current needs. It therefore suggests that there is considerable scope for the re-framing of introductory economics for tourism students. In the light of the criticisms of economics expressed in the first section, a model curriculum for tourism economics is proposed, and ways in which such a model might be promoted and developed are explored.

This paper identifies the fragmented nature of accommodation provision in Europe, the majority being in small units. The increasing use by travel agents of Computer Reservation Systems (CRSs) to book hotels is also identified, by the provision of hitherto unpublished statistics. The criteria are detailed by which agents judge the effectiveness of a CRS. Two CRSs which have specialized in small units are described. The needs of both the supply and demand sides are noted and ways in which these may be met are explained. It is suggested that since small hotels are seldom featured on the major Global CRSs, these hotels may lose market share.

The paper studies monthly accommodation numbers data for visitors from five countries: the USA, FR Germany, Norway, Denmark and Finland to Sweden in the period 1978–93. The focus is on the dynamic response of guest-night numbers to changes in the relative destination price level, in the Swedish VAT-rate on tourism services, and to the Chernobyl accident and the Gulf War. The statistical estimations are made using two approaches: (1) transfer function modelling with seasonal ARIMA (SARIMAX) and (2) general-to-specific estimation of autoregressive distributive lags (ARDL) models. Step changes in the price level and tax-rate variables give rise to seasonally oscillating responses. The price-level responses seem to be mixes of own-price and cross-price effects. The results confirm earlier findings of negative Chernobyl-accident effects on incoming tourism and also indicate that negative effects from Gulf War deterrence of long-distant international travel were mitigated by increases in visits from neighbour countries.

There has been an upsurge of interest in ecotourism as a possibly profitable means to ensure sustainable ecological development. However, care is needed in investing in ecotourism because it is not always a worthwhile investment from a private or a social viewpoint. Sometimes such investment is unprofitable and may hinder rather than assist nature conservation. This paper discusses the assessment of private and social returns from ecotourism investment from angles that appear to have been overlooked in the recent literature, and argues that positive private returns can be a prerequisite for achieving the conservational goals of ecotourism. In addition, some limitations involved in applying the user pays principle to ecotourism are noted and offset policies are considered as one possible means to counteract some of the possible adverse environmental consequences of tourism.

This paper examines gender roles in tourism employment in Bali, Indonesia. While tourism has provided both women and men with greater occupational choices, through analyses of employment as front desk workers, as vendors, as kiosk operators and as drivers/guides, it is shown that there is differential access by gender to tourism employment in Bali. Furthermore, in the formal sector, women may be required to have superior qualifications and may be paid less than men in similar positions. At the same time as gaining access to employment outside the home, many women are expected to carry out traditional roles at home and in religious activities.

Tourism activity and economic performance, particularly that in the major tourism generating and receiving countries, are closely linked. The purpose of this section is to provide those indicators which are regarded as being most relevant to international movements and spend. In the first issue of this volume, information relating to the global picture and by region was presented, together with some detail on the most significant nations. Subsequent issues have concentrated on specific world regions – in this case, economic indicators of tourism in the Americas are provided. The main source of data for this edition is the World Tourism Organisation (WTO). Formal definitions associated with the tables presented are often detailed and lengthy and so are not included here. The reader should consult the source material if necessary.