IP Publishing Ltd
June 2009 (Vol 15 No 2)
277 Measuring tourism sustainability: proposal for a composite index
297 Tourism employment and poverty: revisiting the supply curve
323 Modelling and forecasting the UK tourism growth cycle in Algarve
339 Recreational demand functions for different categories of beach visitor
381 Preference heterogeneity in relation to museum services
437 Are all-terrain vehicle riders willing to pay trail user fees to ride on public lands in the USA?
453 Entry fees as an instrument for environmental management: study of a wildlife park in Kerala, India
Title: Measuring tourism sustainability: proposal for a composite index
Abstract: The methodological bases are established for the design of a global composite index, the ST index, to measure tourism sustainability. Tourism sustainability is a fairly complex concept due to its latent, multidimensional and relative nature. A method based on factor loadings is proposed to construct a global tourism sustainability index. After comparing it with various theoretical approaches, the authors apply it to the Spanish system of environmental tourism indicators. The robustness of the proposed ST index is tested by calculating composite correlations between the Euclidean distances of different tourism destinations.
Title: Tourism employment and poverty: revisiting the supply curve
Abstract: The authors argue that the theory of the downward-sloping supply curve for labour is relevant to explanations of labour market behaviour in tourism. The paper is founded on the work of Sharif (1986, 1991, 2000), who questioned the definition of subsistence and argued that, in certain conditions, the initial slope of the curve would be downwards. The authors ask whether tourism development could provide these particular conditions. An important distinction is made between the perception of management of the market being in surplus or abundance. If the downward-sloping supply curve is the case, then the distress selling of labour that it implies would have implications for the quality of tourism products and for the capacity of tourism to alleviate poverty.
Abstract: This study predicts numerical demand growth rates, directional changes and turning points in the growth rate using the single input leading indicator model and assesses its forecasting performance with the ARIMA model and the no-change model. To assess the forecasting performance from the March quarter of 2004 to the December quarter of 2006, models are fitted to the growth rates of Hong Kong inbound tourism demand from selected tourism markets (Australia, Japan, the UK and the USA). Composite leading indicators for the single input leading indicator model are constructed from selected national leading and lagged indicators. To avoid false signals in turning points, a method is specified to identify the correct turning points in tourism demand growth rates. The prediction performance of these models is then examined, based on the mean absolute percentage error, directional change error and turning point error. A statistical procedure is considered to determine whether the actual and predicted directional changes and turning points are independent or associated.
Title: Modelling and forecasting the UK tourism growth cycle in Algarve
Abstract: Over the past three decades, Portugal has developed a strong economic dependence on tourism, which has several implications for the country’s overall economic development. Tourism is an activity that is interrelated strongly with the economic system since Portugal as a whole and specific regions in particular rely on the performance of tourism for their economic activity. Moreover, because economic cycles affect tourism development, it is highly vulnerable to economic fluctuations. Most tourists who visit Portugal are from the European Union, especially Western Europe. Statistics are based on the number of overnight stays in hotel accommodation and other similar establishments. In 2005, the main source markets were the UK (30.7%), Germany (16.5%), Spain (11.5%), the Netherlands (6.8%), France (4.7%), Ireland (3.6%) and Italy (3.1%). These values show that the UK has the greatest share of visitors to Algarve. The purpose of this paper is to propose a modelling approach that best fits the tourism flow pattern in order to support forecasting. The paper contributes to our understanding of the relationship between economic cycles and tourism flows to Portugal (Algarve) and explores the potential of applying the diffusion index model proposed by Stock and Watson (1999, 2002) for tourism demand forecasting.
Title: Recreational demand functions for different categories of beach visitor
Abstract: This paper addresses the estimation of the recreational use value of a beach for different categories of beach visitor and its determinants. According to economic theory, it is generally expected that income and the number of beach visits affect the value of a recreational visit. The recreational value should increase as income increases and should decrease as the number of beach visits increases. Nevertheless, anomalies such as the Veblen effect are admitted. The data used for this research were obtained from a questionnaire carried out in Lido di Dante, a coastal tourist resort in Italy. The contingent valuation method (CVM) in the value of enjoyment (VOE) version was applied. Beach visitors were asked to give a monetary value to informal recreational beach use (such as sunbathing, walking and swimming) in three different scenarios: status quo, erosion and artificial defence. Beach services are modelled in private goods terms, because each individual may make a different number of visits, and different categories of beach visitor (all beach visitors, day visitors and residents, and tourists) are described by presenting their respective use value functions. It is shown that household income explains the recreational beach value of all visitor categories considered, while the number of beach days explains only that of day visitors and residents. The coefficients of these two independent variables do not have the expected sign, thus suggesting that the preferences of beach visitors at Lido di Dante belong to the category of anomalies in the economic theory of demand.
Abstract: Travellers make advanced booking decisions in an imperfect information environment, an environment in which price signalling is likely to occur. This study examines the unique informational role of room rates by suggesting an analytical model of room rates as a signal of quality and sell-out risk and by testing the theory empirically. The findings indicate that, even in advanced booking situations in which consumers might associate price deviations with the hotel’s revenue management policies, prices can still signal quality to the consumers. Moreover, the study demonstrates that in a deal seeking/advanced booking context, there are two additional opposing impacts of the informational role of prices. Customers’ propensity to book increases with higher rates because the perception of the sell- out risk is higher. However, at the same time, customers’ propensity to book decreases because the higher room rate induces a higher expectation of the offer of a better deal.
Title: Preference heterogeneity in relation to museum services
Abstract: Prevailing trends in the management of European museums underline the importance of additional museum services in fostering and encouraging the optimization of cultural assets while facilitating the collection of resources necessary for conservation. This paper considers the case of the archaeological site of Paestum (Salerno) and presents an analysis of individual preferences in relation to specific policies of cultural heritage management, each characterized by the supply of different museum services. Since the diversity of these services can prompt different individual preferences, the analysis allows for heterogeneity of parameters among individuals.
Abstract: The goals of this study are to examine the impact of IT investment announcements on firms’ stock prices and to test the productivity paradox of IT investment in the hospitality industry by adopting event study methodology. The cautious interpretation of the results lends support for a positive link between IT investment announcements and financial performance. Furthermore, this study’s descriptive analysis indicates that the trend of abnormal returns and cumulative abnormal returns shows steady increases over the three-day event windows. This study provides the stepping-stone to solving the IT productivity paradox and offers useful information for IT investment decision making in the hospitality business.
Abstract: Using the travel cost method, the authors measure the recreational trip value of Xinghai Park in Dalian, China. They compare non-linear, truncated Poisson and truncated negative-binomial count data models to estimate recreational trip demand. The economic values of recreational trips in terms of consumer surplus (CS) are derived from each model. They estimate the CS values at between RMB ¥493 (US$64) to RMB ¥562 (US$73) per trip, resulting in a total social welfare estimate in the range from RMB ¥1.08 billion to RMB ¥1.23 billion (US$140 million to US$160 million in 2007).
Abstract: In addition to hiking trails, some peaks have alternative transportation routes such as cog railways, trams or roads to reach the summit. The authors use a count data travel cost model to estimate the recreational demand for traditional and novel means of ascending Pikes Peak in Colorado. Their analysis shows statistically significant differences in the demand curve slopes and in the net willingness to pay (consumer surplus) for three categories of recreationists who take alternative means to ascend the mountain. The more exotic or unique the means of ascent, the higher the visitor benefits are. Cog railway and automobile users and those ascending by hiking receive consumer surpluses of US$98, US$54 and US$31, respectively, per day trip.
Title: Are all-terrain vehicle riders willing to pay trail user fees to ride on public lands in the USA?
Abstract: Some public lands in the USA offer opportunities for all-terrain vehicle (ATV) riding, but few charge trail use fees. In a case study in the US state of Wisconsin, the contingent valuation method was used to examine riders’ willingness to pay (WTP) to ride on public lands. Information on riders’ habits, preferences and responses to a dichotomous choice WTP question were collected via a mail survey. ATV club membership, year-round riding habits and preferences for riding on maintained trails and public land influenced WTP positively. Fee amount, advanced skill level, use of the ATV as a hunting support vehicle and living close to an existing trail had a negative impact on WTP.
Title: Entry fees as an instrument for environmental management: study of a wildlife park in Kerala, India
Abstract: This paper presents a theoretical analysis of the appropriate economic objective for managing tourism in a wildlife park in a developing country so as to conserve the environmental resource and maximize revenue generation on a sustainable basis. It identifies and elaborates the ‘minimization of uncovered cost’ as a reasonable objective for this purpose and develops a simple but theoretically grounded tool to decide whether or not the number of tourists should be increased (by changing the user fees) to achieve that objective. Empirically, the study assesses the potential revenue from tourism and the current position in this regard and uses this information in judging the desirability of increasing fees. On the basis of a ‘willingness to pay’ survey of tourists, it seemed that tourist numbers would be reduced by half if higher entry fees were charged – and the higher fee would not have much effect on total revenue. However, the current institutional structure of the wildlife park, despite well-defined state ownership and strict enforcement of forest regulations, is not conducive to the implementation of this policy of revenue maximization compatible with environmental conservation.
Abstract: Frequently, tourism demand can be disaggregated into different components according to variables such as country of residence, purpose of the trip, type of transport and accommodation. However, researchers generally develop forecasts of the total tourism demand without considering the existence of its disaggregated components, which might have independent behaviour. As an alternative, the disaggregated approach models each component first and then sums these individual forecasts in order to obtain aggregate forecasts of the total tourism demand. This paper compares the aggregated and disaggregated approaches by ex post forecasting international tourist arrivals in Spain. The total tourism demand is disaggregated into 12 different origins. The HEGY test is used to check for regular and seasonal unit roots in each time series and SARIMA models are used to develop single forecasts. This empirical study finds slightly more accurate results using the disaggregated approach in multi-step, out-of-sample forecasting.