Tourism Economics

Climate variables such as temperature and precipitation play a crucial role on tourism flows worldwide. This places tourism at the forefront of the economic sectors to be affected by climate change. In this article, we address the impacts of climate change on the arrivals of inbound tourists to Portugal, a south European country where tourism is a core economic sector. The economic dimension of the impacts, in terms of gross domestic product (GDP) and employment, is then assessed. This is achieved by combining a world gravity model of tourism flows with an input–output model. The results show that under standard climate change scenarios from the Intergovernmental Panel on Climate Change, Portugal will experience a significant increase in temperature leading to a decrease of inbound tourism arrivals between 2.5% and 5.2%. This decrease in tourist arrivals is expected to reduce Portuguese GDP between 0.19% and 0.40%.

As a consequence of the international financial crisis in 2007, the region of Algarve, where tourism plays an important economic and social role, suffered a decrease in tourism demand, while unemployment increased sharply. Although tourism activities registered a quick recovery, unemployment levels continued to grow. This article examines the impacts of tourism activities on the sectorial structure of the regional economy, using a Bayesian vector autoregressive model. The results reveal that tourism growth did not automatically create the expected positive impacts on the economic performance of the other sectors, as was expressed by the objectives defined in the regional development strategies over the last two decades. The positive impacts of tourism were concentrated in the production of non-tradable goods and the construction sector, leading to a significant reduction of the weight of the tradable sector within the regional economy, similar to a process of deindustrialization described as the ‘Dutch disease’. The decline of construction activities after 2007 has led to a significant increase of regional unemployment, although tourism growth has returned to ‘pre-crisis’ levels, revealing the lack of regional resilience.

Tourism has been regarded as a leading sector for the 21st century due to its so-claimed contribution to economic growth and development of a country. Among others, the so-called effects arise due to the creation of direct and indirect income and employment opportunities, easing balance of payment constraints, improvement of transfer of technology and knowledge and encouragement of foreign direct investment. In this line of the literature, the leakages of tourism activities and their weak linkages with the local and national economy are ignored. To outlay the leakages, it is necessary to examine in-depth the precise nature of leakages as well as the way they occur. This study investigates leakages of hotel industry for Marmaris, Turkey, by using data obtained by a self-generated semi-structured questionnaire applied to the managers of four- and five-star hotels. The findings indicate that the main leakages occur due to ownership characteristics of tourism agents/operators and through import.

Rural tourism is frequently considered a development tool for rural areas. In particular, demand for local products may stimulate local economy and is simultaneously an important part of the tourist experience. Little is known, however, of the role of local product purchase within and as a result of the rural tourist experience. The present article addresses this gap by analysing the impact of the tourist experience on (a) the decision to purchase local products and (b) the amount of respective expenditures made, based on survey data on rural tourists in Portugal. Results reveal a positive impact of the knowledge, sensorial and interaction dimensions of the tourist experience in both models, and length of stay, age, place attachment and nationality also play a role.

In this article we contribute to the analysis of innovation in the tourism industry and more specifically to understanding the role of innovation on the hotel occupancy. Furthermore, we discuss how the growth in hotel occupancy due to innovation increases, directly and indirectly, production, added value and employment in other sectors of the economy. In this way, we calculated the total impact on the Balearic economy of an innovation process in the Balearic hotel industry as well as the specific effects on different economic sectors. Positive and significant impact on potential growth was found with added value of between 1.6% and 2.2%. The micro–macro model presented in this work justifies implementing policies promoting innovation in the hotel industry.

The article develops a Keynesian style short-run model of a two-sector economy, comprising an industrial sector and a tourism sector. Industrial goods can be consumed, invested, exported, and imported. Tourism services produced in the tourism sector are consumed by foreigners and domestic residents. The two sectors are linked via consumption of domestic residents, which, in the Keynesian tradition, depends positively on disposable income, and via investment. An increase in sectoral production (industrial and tourism sector) stimulates consumption and investment expenditures. Output is completely demand determined, and resulting in unemployment in case of a lack of demand is Keynesian. Via the production function, changes in sectoral outputs translate into changes in unemployment. Focusing on the short run, prices are held constant. The article provides a graphical apparatus to analyze different types of sectoral demand shocks. We investigate an increase in foreigners’ demand for domestically produced tourism services (inbound tourism). Depending on the exchange rate regime or monetary policy, sectoral outputs and unemployment rates may move in tandem or in opposite directions. Our results support the popular view that tourism can reduce unemployment.

Revenue management aims at improving the performance of an organization by selling the right product/service to the right customer at the right time. This task is very dependent on uncontrollable external factors. In the hospitality industry, rooms of the hotel represent perishable assets and fixed capacities at the same time. Therefore, in the case of a stochastic process for customers calling in reservations prior to a particular booking date, a common problem for hotels is to devise a policy for maximizing the total expected profit conditional on the set of bookings. We propose a fuzzy model for the hotel revenue management under an uncertain and vague environment. Fuzziness of objective and constraint functions have been incorporated into a stochastic booking model considering multiple-day stays to show the effect of uncertainty on the optimal demand. By changing the relaxation parameters of the objective function, we have found a set of optimal solutions with, in most of the cases, a value of the objective function equal to the optimal solution of the stochastic model, providing several alternative optimal room allocations.

In a heterogeneous tourist market, segmentation is a valuable marketing tool to focus attention on the most advantageous clusters of visitors. In an ecotourism destination, the attractiveness of tourists may be defined by their ecological awareness, but also their (potential) economic impact, since there is a need to balance ecological sustainability and economic viability. This article proposes a model-based latent class analysis of visitors’ preferences and choices in order to identify different demand clusters in the Shiretoko Peninsula, Japan. The method yields four distinct clusters, each differing in motivations, information search and activities undertaken. We also describe how our approach can be used to make informed decisions about management strategies on tourist heterogeneity in order to maximize benefits for the local economy.

This article tests whether the willingness-to-pay (WTP) of cruise tourists is affected by multivariables, namely regional level variables, socio-demographic variables, cruise perception variables, cruise motivations and cruise preferences. Our research aims to measure the influence of the multivariables on the WTP of cruise tourists, in order to trace the determinants of WTP. Using a censored regression model, the following variables are found to be highly associated with the WTP of cruise tourists: income, education, family structure, occupation, cruise experience, cruise duration and cruise preferences. The results of the modelling not only fill in existing research gaps in the theory of WTP but also shed new light on the comparison of multiple regions in terms of the difference of WTP of cruise tourists. A latent cluster analysis is further conducted to identify market segments with different cruise WTPs, and this knowledge can be used to improve the marketing performance of cruise companies in the growing Asian markets.

We evaluate the determinants of the two different types of tourists’ expenditure behaviour at a musical festival: the expenditure per day in the city of the event and expenses in the enclosure during the event. We prove that the domestic tourists who live out of the town of the event and foreigners who came purposely for the event spend more in the enclosure. Comparing the expenditures in the city, foreigners spend more in town than the nationals who came from out of the city. Four distinct factors of satisfaction emerged in the application of the factorial analysis: organization of the festival, kind of music, conditions of the enclosure and accessibility to the venue. It was also found that the most satisfied with the event also have a higher propensity to spend more on the enclosure and in the city. This research reveals an important framework for event managers and for politicians. The results of this study will be important for the promotion and dissemination by the event organization to the extent that marketing campaigns should be directed to the identification of socio-demographic characteristics of the tourists, the factors of satisfaction and the lovers of the event that positively contribute to the expenditure in the city and in the enclosure. The results may be of interest to politicians, as the event, if properly assessed and planned, can be used as important marketing strategy in cities where it occurs. Moreover, this kind of event is already part of an itinerary tourism tour and for this reason, its social, cultural and economic importance will have to be properly assessed.

The aim of this article is to model the decisions of tourists and a monopolist firm when weather forecasts are available. Before deciding whether to go on holiday or not, but after the firm has decided and posted its price, tourists can look at weather forecasts. Our results show that the price chosen by the firm and the corresponding equilibrium profit are decreasing as a function of the accuracy of weather forecasts. Consumers, instead, are better off, the more accurate weather forecasts become. Managerial and policy implications are also derived.

Over the past decades, leisure travel has become increasingly popular in older segments of the world population, as a consequence of global factors such as a rise in life expectancy, improved health conditions, a higher disposable income and increased availability of discretionary time in retirement age. Consequently, researchers have become more interested in studying the motivations for travel of seniors. A number of questions may be raised or have been addressed in the recent past: What are the main factors explaining the travelling choices of seniors? Are their travel motivations different from the ones of the general population, which have been widely studied in the past? Are geographical differences in terms of motivations comparable between different age groups? Why is senior tourism a topic of particular interest with regard to Asia? In order to answer such questions, in this article, we provide a review of the literature on the travel motivations of seniors. On the basis of 29 articles published between 1988 and 2015 on the topic, we present a qualitative and meta-analytic assessment of past findings, by investigating the dimensions of travel motivations most frequently identified in past seniors surveys. Finally, we discuss a research agenda for further analysis of senior travel motivations and for the integration of this branch of travel research within the wider framework of senior tourism analysis and management.