Vol 20 No 3 June 2014
Abstract: In this study, using the Spanish domestic and outbound tourism survey FAMILITUR, an inter-regional tourism flows analysis is carried out for the period 2004–2008. The degree of concentration of origin–destination trips is calculated in order to obtain the market share of the distribution of regional trips. An intra-regional perspective is also presented to confirm other divergences in terms of the region’s capacity of attraction for its own residents. Finally, a ‘gravity’ model of domestic travel flows between the 17 Spanish autonomous communities is estimated to characterize the variables that affect Spaniards’ tourism flows.
Abstract: The traditional use of location quotients to determine the cluster of local industries that produce products and services primarily for export is outdated in that it uses employment ratios only. A better approach uses the total dollars spent locally. Combined with absolute levels of employment, this research shows that the tourism and hospitality industry cluster is very different from those selected traditionally. Dollars-spent-locally uses data from local input–output tables and presents a more accurate profile of the interrelationships among tourism and hospitality industries. The authors illustrate this more accurate approach for one area using current cross-sectional industry data.
Abstract: The authors, using discrete choice experiments, study the economic valuation of corporate social responsibility (CSR) policy measures in sun-and-beach tourist destination demand. They also examine the role of the status quo effect on CSR actions in tourist destinations. The status quo effect occurs because people generally place much more value on avoiding a loss than on acquiring a gain. Visitors to Cartagena de Indias (Colombia) were presented with alternative profiles of CSR measures and were given one of two treatments that varied according to the definition of the status quo alternative and the valuation question. The design of the experiments enabled the authors to compare the respondents’ willingness to pay (WTP) a higher price for their holiday in a destination that has in place several CSR measures and willingness to accept (WTA) a lower price for the same destination with a lower CSR profile. The data are modelled using a flexible approach that allows for the consideration of alternative decision rules in the visitor’s decision process. The results show that tourists care about CSR attributes and are likely to make their vacation choices on the basis of such attributes. Moreover, in this context the standard economic theory assumption of preferences symmetry is not satisfied. In other words, the cost of not implementing CSR actions is higher than the benefits of implementing them. When a destination increases CSR actions the number of visitors and their WTP for their visit are likely to increase, but at substantially lower rates than the WTP for alternative destinations (WTA) when the destination reduces its CSR actions. These results may explain why conventional studies find ambiguous effects of CSR action on tourist choice.
Abstract: The ability to portray accurately the regional economic impacts of short-term tourism demand rests on the resemblances between the long-run input–output (IO) technical coefficients and a short-term production function of business sectors. The purpose of this research was to investigate the stability of cost structure by capacity utilization in the tourism industry, using the accommodation sector in Taiwan as an example. Panel data consisting of firm-level financial information based on 13 individual cost categories from 2000 to 2009 were analysed to reveal the magnitude and direction of cost structure changes with respect to occupancy rate. The results indicated that income multipliers and profit multipliers fluctuated substantially but compensated for each other, while IO technical coefficients were very stable. In a situation involving a tourism event, type I and type II sales multipliers and the value added multipliers of the accommodation sector remained relatively stable, but the standard income multipliers were greatly overestimated, or underestimated for tourism recession scenarios. Applying a regional IO model to estimate short-term tourism demand should therefore take into consideration the substitution pattern between personal income and business profits.
Abstract: This paper investigates the relationship between tourism specialization and output volatility in a sample of 34 small island developing states (SIDS). The initial results suggest that there is a positive relationship between tourism and output volatility. Then, to test whether or not the impact of tourism is uniform across SIDS, the author divides the sample of SIDS by their regional groupings. The positive relationship between tourism specialization and volatility seems to be isolated to states in the Asia and Pacific region; that is, the region with the lowest level of tourism specialization on average. However, an evaluation of the fluctuations in tourism receipts indicates that the average volatility of tourism is highest in this region. This implies that the impact of tourism on economic volatility depends greatly on the level of volatility in tourism and, to a lesser extent, on the level of specialization.
Abstract: The literature has documented a significant effect of monetary policy changes on hospitality stock returns. Extending the current hospitality literature, this paper tests asymmetric effects of Federal Reserve (Fed) monetary policy changes on long-term US hospitality index returns (HIRs) in bull and bear markets. Monetary policy changes are measured by directional changes in the discount rate (dr) and in the federal funds rate (ffr). This study uses a Markov regime-switching model of stock returns to identify bull and bear stock market conditions. The test results bring new evidence to the hospitality literature. The significant effects of both dr and ffr on all five HIRs exist only in bear markets over the 36-year period from January 1973 to May 2008. In addition, after controlling for all three different macroeconomic conditions, asymmetry in the impact of both dr and ffr remains robust in bear markets, but not in business cycle contractions or under tight credit market conditions. The findings support the credit channel of monetary policy transmission mechanism by showing that characteristics of hospitality sectors interact with stock market conditions to determine the impact of Fed policy changes on HIRs.
Abstract: Chief executive officer (CEO) resignations are of interest to shareholders. The market typically responds to such changes in relation to the gain or loss of human capital. This study investigates the issue of whether or not resignations of hospitality industry CEOs convey new and relevant information to the public markets. The study examines 32 resignations from 26 firms over a 12-year period and finds that CEO resignations from hospitality firms convey new and relevant information to the financial markets, albeit in a delayed manner. Findings also suggest information symmetry, indicating that investors can be confident that hospitality stocks are traded fairly in the capital markets.
Abstract: Market power studies tend to concentrate on seller power, but in several value chains buyer power is an equally important topic. An example is large tour operators’ dealings with a fragmented accommodation industry at a tourist destination. The authors present a framework for testing for the degree of oligopsony power exerted by tour operators, where exchange rates play an important role in identifying the model. The empirical framework was applied to demand for hotel accommodation in Northern Norway. The results indicate that European tour operators have oligopsony power in relation to the regional hotel industry, with a markdown of over 24%.
Abstract: This paper estimates Thailand’s long-run tourism demand elasticities for a set of origin countries by applying dynamic ordinary least squares. A detailed analysis of the potential competing destinations for each origin country is performed to ensure a precise coefficient for the substituting elasticity. A long-run static model of time varying parameter is then used to analyse the effects on the estimation of a potential structural change caused by the 1997 economic crisis and the subsequent change in exchange rate policy. The results show that there are different demand elasticities for each origin market and that own price elasticity is lower than substituting price elasticity for most origin countries. These findings indicate that price-setting strategies should be specific for each origin market and that information about prices in competing destinations needs to be considered. Moreover, the results show that there was a structural change in 1997 that severely affected the estimation.
Abstract: More and more students in Europe are willing to travel abroad for their higher education. This student mobility is considered as a type of tourist activity and the term ‘international academic tourism’ is applied to it. This paper presents an empirical analysis, using the system generalized method of moments estimator for dynamic panel data models. The purpose is to analyse the economic and other determinants of tourism demand in the European Region Action Scheme for the Mobility of University Students (Erasmus) based on inbound student and work placement mobility data during the exchange period from 2000 to 2010. The econometric results suggest that tourism demand is mainly driven by factors that are not strictly economic, such as relevant aspects of the destination chosen and preferences related to travel, the role of the tertiary education sector and the contribution of the Erasmus student mobility programme in the destination country. These findings have important implications for tourism policymakers.
Abstract: The objective of this study is to identify the factors that influence the purchasing behaviour of rural tourists in relation to four types of direct farm markets in South Korea: pick-your-own markets, on-farm markets, farmers’ markets and online markets after visitation. The estimation results obtained from a binomial logistic regression model were used to identify the characteristics of those tourists most likely to opt for each type of direct farm market. A field survey was used to collect data from 437 visitors to rural areas in South Korea. The results show that various factors differentially affect tourists’ decisions to visit specific areas or to visit each type of direct farm market. The findings indicate that the people most likely to buy in pick-your-own markets tend to be wealthier or male, whereas married women and people who live in metropolitan areas are more likely to visit on-farm markets.
Abstract: This paper empirically examines the relationship between service quality and market structure using metropolitan-level panel data from the Taiwanese hotel industry. The empirical results indicate, first, that the influence of market structure on room service quality is U-shaped – high and low levels of market concentration lead to better service quality; and, second, that market structure is positively associated with food and beverage service quality.
Abstract: This paper exploits a Markov regime-switching model to study the business cycle of the hotel industry (BCHI) in Taiwan from January 1999 to September 2011. The aggregate hotel room sales earnings are used to examine the business cycle of the Taiwanese hotel industry. The Markov regime-switching model detects two distinct regimes of the BCHI: a high-growth regime (HGR) and a low-growth regime (LGR). The average growth rate of HGR (LGR) is 4.12% (0.35%). The corresponding standard deviation in the two regimes is 5.60% and 0.30%, implying that LGR is more stable than HGR. The probability of the hotel industry staying in LGR (HGR) is 97% (66%) and the expected duration of HGR (LGR) is about 3 (39) months. Moreover, this study shows that the tourism market growth is significant in causing the hotel industry to stay in the HGR. The empirical findings provide useful information and policy implications for government tourism policymakers and tourist hotel managers.