Tourism Economics

This article focuses on a neglected part of the well-known Balassa–Samuelson (B-S) effect in international trade, namely, the specific role of tourism in equilibrating the purchasing power parities across areas. The article aims to highlight in particular the cultural bias in destination choice by foreign tourists and its importance as a barrier for eradicating economic inequality between countries. We consider international tourism here as a mixed type of tradable service that leads to – short-time, but potentially massive – cross-border movements of people that can impact income redistribution among countries. Our claim is that this short-time movement is positively biased towards culturally closer localities. The recognition of this role of cultural proximity in the tourist choice destination can help fine-tune empirical models of international goods or services to reality. To test our hypothesis, a unique big data set for the EU28 and all the Organisation for Economic Co-operation and Development (OECD) countries (4031 observations on the shares of outbound tourists per country) is composed for the year 2014. We use data from the UN World Tourism Organization, Centre d’Etudes Prospectives et d’Informations Internationales (CEPII, Paris; especially on linguistic proximity), and the six well-known Hofstede indices of cultural dimension: individualism, power–distance relationship, masculinity, uncertainty, indulgence and long-term orientation. To fully specify our tourist destination model, we include also climate-related explanatory variables, reflecting sun, rain and wind differences between sending and recipient countries. Regression analysis with fixed effects and a hierarchical (multilevel) model both lead to consistent empirical estimates. Our results clearly demonstrate that tourism is a significant counter-balancing factor for the B-S effect that seems to be present and related to non-trade sectors and wages across the countries involved. Moreover, we find that linguistic proximity is statistically and economically the most powerful quantitative proxy for cultural factors, which determine the outbound tourists’ destination choice.

We explore the relationship between tourism specialization and structural change in an endogenous growth model, analyzing its implications for both economic growth and tourist flows. We consider a two-sector economic growth model where the development of tourism activities generates a production externality and a structural change, which modifies the resources-use intensity, ultimately affecting tourist flows. We characterize the balanced growth path equilibrium and analyze under which conditions structural change may generate fast economic growth, providing a theoretical support for the empirical evidence on tourism countries. We also show that structural change may alternatively lead to stages of rejuvenation, stagnation, or decline consistently with what advanced by the tourism area life cycle hypothesis. By combining these different results, we also show that an eventual phase of decline generated by structural change does not necessarily have to be interpreted as a poor economic outcome since there might exist a bell-shaped relationship between residents’ income and number of visitors.

The offshoring of services has steadily expanded in recent years and acquired growing importance in certain tourism subsectors. The present study analyses for the first time the offshoring indices and the trend seen in tourism services, based on input–output data (Spanish National Accounts) during the 2000–2007 expansive period. A distinction is made between offshoring associated with international fragmentation of production and offshoring due to a shift from domestic to foreign suppliers. The results point to a relocation of intermediate services to foreign countries in certain tourism subsectors (including travel agencies and air and maritime transport), involving both the international fragmentation of production and a substitution of the source of supply.

Employees’ job satisfaction influences their commitment, affects quality and productivity and is, therefore, crucial for a labour-intensive industry such as tourism. In this article, the determinants of job satisfaction are examined in comparative terms for tourism workers versus those employed in the rest of the service sector. In contrast with previous research, the analysis is not restricted to hospitality workers, includes all types of occupations, and is based on a nationwide representative sample. The explanatory models of job satisfaction are estimated using ordered logit techniques, considering personal and household characteristics as well as objective and subjective job characteristics. The results indicate that job satisfaction is significantly lower among tourism workers and that in some cases notable differences exist between the factors influencing job satisfaction in the tourism sector compared with the rest of the service sector, which might be relevant for managers and policymakers.

This article analyzes the determinants of three types of innovation output—product, process, and organizational, generated by Australian tourism firms. It examines how collaboration, human capital, information technology, funding, firm, and market characteristics impact innovation outcomes. Of the inputs, collaboration for innovation is the one with a positive impact on the three types of innovation outputs. Human capital also contributes to the innovation process. However, its impacts are strongly felt only in the generation of product and organizational innovation. Information and communication technology is vital to the implementation of operational process and organizational innovations, while funding influences the implementation of new operational processes. Of firm and market characteristics, foreign ownership, degree of competition, and firm size have significant impacts on innovation intensity among firms.

This article provides new evidence on the stability of the long-run income elasticity of tourism and travel demand by use of the recently developed smooth time-varying cointegration regression model. The estimations control for relative purchasing power parity of the source country and make use of a specific country dataset where domestic and foreign overnight stays are available over a longer period of time (Switzerland, 1934–2015). Results show that the income elasticity of foreign overnight stays peaks at approximately two in the early 1960s, drops to around one in the early 1980s and from then on remains stable until the end of the sample. Domestic income elasticity reaches its highest levels in the 1930s, then steadily falls towards one in the mid-1960s, and therefrom remains stable until 2015. Different phases in the tourism area life cycle might be a major explanatory factor for variation in income elasticities over time.

In this article, we examine two aspects of the relation between variable intra-week pricing and alpine skiing attendance at three ski resorts in Norway. First, we study what affects the probability of increased skiing frequency during the midweek if the price is reduced in this period compared to the regular (weekend) price. Second, we examine the cannibalization effect from a lower midweek price on the weekend skiing activity. Our results show that the probability of increased midweek skiing at a lower price is significantly influenced by age and income. The probability that cannibalization occurs is significantly influenced by skiing interest and family status.

Tourism policies do not only focus on how to improve arrivals from different tourism markets but also for different tourism activities. However, studies on convergence hypothesis of tourist arrivals, which can provide guidelines on how tourism policies should be conducted, have concentrated on convergence of tourism markets. The main contribution of this study is that in addition to convergence hypothesis in tourism markets, we have considered convergence hypothesis in tourism activities. We focus on Taiwan, and using a recently developed residual augmented least squares unit root test that allows for structural breaks and non-normality, we observe that convergence exists in the 15 major tourism markets and in 4 of the 5 major tourism activities in Taiwan. As a robustness check, we have also used a club convergence approach, and the results provide dominant evidence for club convergence in the tourism sector of Taiwan. The policy implications of the findings are provided within the article.