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The business and finance of tourism and recreation

ISSN 1354-8166 (print); 2044-0375 (online)


Editor: Stephen Wanhill,
Professor of Tourism Economics,
University of Limerick,
and Emeritus Professor of Tourism
Research, Bournemouth University

This journal is covered by Thomson Reuters in the Social Sciences Citation Index (SSCI) and Current Contents/Social and Behavioral Sciences. Impact Factor: 0.573. 5-Year Impact Factor: 0.901. (2013 Journal Citation Reports® Social Sciences Edition, Thomson Reuters, 2014.)

This journal is indexed in Scopus

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Editorial coverage

Tourism Economics, published quarterly, covers the business aspects of tourism in the wider context. It takes account of constraints on development, such as social and community interests and the sustainable use of tourism and recreation resources, and inputs into the production process. The definition of tourism used includes tourist trips taken for all purposes, embracing both stay and day visitors.

Articles address the components of the tourism product (accommodation; restaurants; merchandizing; attractions; transport; entertainment; tourist activities); and the economic organization of tourism at micro and macro levels (market structure; role of public/private sectors; community interests; strategic planning; marketing; finance; economic development).

Core subject areas:

  • forecasting
  • public policy (strategies, fiscal and other intervention policies)
  • economic development
  • market structures and competition
  • sources of capital provision
  • labour economics (quality and productivity issues)
  • business aspects of marketing
  • private and public sector interaction
  • economic appraisal at sector and project level
  • mathematical modelling
  • developments in the components of the product
  • structure of the tourism industry (including such issues as ownership, corporate size, international operations, etc)
  • regional economic effects of tourism developments
  • analysis of international data on tourism, such as WTO statistics

Submissions - Notes for authors

Please send papers by e-mail to Professor Stephen Wanhill, c/o  JEdmondson(at)ippublishing.com (this address is obtainable by clicking on Professor Wanhill's name in the preceding sentence). Receipt of your paper will be acknowledged by e-mail and it will then be forwarded to Professor Wanhill.

Length and presentation of contributions

 Papers will normally be about 5,000 words long. However, this is by no means inflexible and substantially shorter or longer papers will be considered where appropriate. Research notes and shorter report-style pieces will also be considered (1,500-2,000 words).

Submissions should be double-spaced. They can be sent to the editor either by e-mail or post c/o the publisher (details above). The publisher will send an acknowledgement on receipt of submissions. Electronic versions must be in Word (postal submissions should include one hard copy and a disk or CD).

The title page should contain full names and addresses of the authors and their affiliations. As this page will not be forwarded to referees, the title of the article (without authors) should be repeated on the first page of the text.

An abstract should be provided, comprising 100-150 words. Between 3 and 6 keywords should appear below the abstract, highlighting the main topics of the paper. The text should be organized under appropriate cross-headings (not numbered paragraphs) and where possible these should be not more than 800 words apart.

References should follow the Harvard system. That is, they should be shown within the text as the author's surname (or authors' surnames) followed by a comma and the year of publication, all in round brackets: for example, (Smith, 1998). For textual citations, where there are two authors please use the word 'and', not the ampersand (thus: '(Smith and Jones, 2012)'. Where there are more than two authors, please use the first-named author only, followed by 'et al' in italics (thus: Smith et al, 2012). At the end of the article a bibliographical list should be supplied, organized alphabetically by author (surnames followed by initials - all authors should be named). Bibliographic information should be given in the order indicated by the following examples:

Articles: Figini, P., and Vici, L. (2010), ‘Tourism and growth in a cross section of countries’, Tourism Economics, Vol 16, No 4, December 2010.

Books: Dwyer, L., Forsyth, P., and Dwyer, W. (2010), Tourism Economics and Policy, Channel View, Bristol.

Notes should be numbered consecutively in the text and typed in plain text at the end of the paper (not as footnotes on text pages).

Tables and illustrations should be presented separately at the end of the text. Authors should bear in mind that, in the print version of the journal, illustrations will be reproduced in black and white.

Prior Publication

Articles are received on the understanding that they are original contributions, and have not been published officially, either in print or electronic form, or submitted for publication elsewhere. In this respect, ‘discussion’ or ‘working’ papers, conference presentations and proceedings are not considered to be official publications, unless they have been formally deemed so by conference organizers, or presented as edited works through recognized publishing channels. If in doubt, authors are asked to draw the attention of the Editor to any prior dissemination of the paper in their letter of submission. Please note that articles should not be posted on personal Websites or social networking sites before or after submission.

Refereeing

All papers, other than research notes and reports, will be subject to a 'double blind' review - i.e. the anonymity of both authors and referees will be maintained throughout the refereeing process. There will be a minimum of two referees for each paper. Papers by authors who are not academics (such as submissions from industry) will also be subject to review before acceptance, but their distinct nature and aims will be fully taken into account.

Copyright

Authors will be asked to assign copyright, where possible, to IP Publishing Ltd. Relevant authors’ rights are protected.

Author Checklist for Final versions

Editorial Board

Editor: Stephen Wanhill, Professor of Tourism Economics, University of Limerick, and Emeritus Professor of Tourism Research, Bournemouth University, c/o IP Publishing Ltd, 4th Floor, Hamilton House, Mabledon Place, Bloomsbury, London WC1H 9BB, UK.

Special Advisers
  • Professor John Fletcher, International Centre for Tourism and Hospitality Research,
    Bournemouth University, UK
  • Professor William C. Gartner, Tourism Center,
    University of Minnesota, USA
  • Professor J. Mazanec, MODUL University
    Vienna, Austria
  • Professor Lindsay W. Turner, School of Applied Economics
    Victoria University, Australia

Editorial Advisory Board

  • Professor Eugeni Aguiló
    Universitat de les Illes Balears, Spain
  • Dr Albert Assaf
    University of Massachusetts-Amherst, USA
  • Professor Esteban Bardolet
    Universitat de les Illes Balears, Spain
  • Professor Carlos Pestana Barros
    Technical University of Lisbon, Portugal
  • Professor Juan Gabriel Brida
    Free University of Bolzano, Italy
  • Professor Nevenka Čavlek
    University of Zagreb, Croatia
  • Professor Jim Deegan
    University of Limerick, Ireland
  • Dr Sarath Divisekera
    Victoria University of Technology, Australia
  • Professor Larry Dwyer
    University of New South Wales, Australia
  • Professor Peter Forsyth
    Monash University, Australia
  • Professor D.C. Frechtling
    The George Washington University, USA
  • Dr Twan Huybers
    University of New South Wales, Australia
  • Dr Stanislav Ivanov
    International University College, Bulgaria
  • Professor Carson L. Jenkins
    University of Strathclyde, UK
  • Professor Woo Gon (Woody) Kim
    Florida State University, USA
  • Professor Brian King
    The Hong Kong Polytechnic University, Hong Kong
  • Professor Adele Ladkin
    Bournemouth University, UK
  • Dr Peter Morrell
    Cranfield University, UK
  • Professor Yasuo Ohe
    Chiba University, Japan
  • Professor Andrea Saayman
    North-West University, South Africa
  • Dr Mondher Sahli
    Victoria University of Wellington, New Zealand
  • Dr Neelu Seetaram
    Bournemouth University, UK
  • Professor Egon Smeral
    MODUL University, Austria
  • Professor Haiyan Song
    Hong Kong Polytechnic University, Hong Kong SAR, PR China
  • Professor Natalie Stoeckl
    James Cook University, Australia
  • Dr Brian Terry
    Terry & Partners, UK
  • Professor John Westlake
    Prince of Songkla University, Thailand

Vol 21 No 1 February 2015

SPECIAL ISSUE: CURRENT RESEARCH IN TOURISM ECONOMICS
Guest Editors: Tanja Mihalic and Larry Dwyer

5 Introduction

9 Determinants in tourist expenditure composition – the role of airline types

Berta Ferrer-Rosell, Germà Coenders and Esther Martínez-Garcia

33 Impact analysis of demand-driven shocks in Turkey’s tourism industry within the framework of the social accounting matrix

Hasan Gül and Selim Çağatay

49 An ARDL bounds test approach to modelling tourist expenditure in South Africa

Andrea Saayman and Melville Saayman

67 Keeping mental budgets: visitors’ spending at a Christmas market

Juan Gabriel Brida and Oksana Tokarchuk

83 Pricing visitor preferences for temporary art exhibitions

Massimiliano Castellani, Pierpaolo Pattitoni and Laura Vici

105 Gibrat’s Law and the impact of ownership: a case study of Croatia’s hotel industry

Neven Ivandić

121 The impact of innovation on firms’ performance: an analysis of the hotel sector in Majorca

María Tugores and Dolores García

141 Indebtedness of the tourism sector in Mediterranean countries

Daša Farčnik, Kir Kuščer and Domen Trobec

159 Tourism and poverty reduction: an economic sector analysis for Costa Rica and Nicaragua

Manuel Vanegas Sr, William Gartner and Benjamin Senauer

183 Economic growth and environment: tourism as a trigger for green growth

Simone Marsiglio

205 Why do tourists persist in visiting the same destination?

Antónia Correia, Andreas H. Zins and Francisco Silva

223 Optimal overbooking limits for a hotel with three room types and with upgrade and downgrade constraints

Stanislav H. Ivanov

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Title: Determinants in tourist expenditure composition – the role of airline types

Author(s): Berta Ferrer-Rosell, Germà Coenders and Esther Martínez-Garcia

Abstract: The reduction in transportation costs when travelling with a low-cost airline (LCA) seems to have modified the composition of the trip budget. An understanding of expenditure composition when comparing LCA and legacy airline travellers is vital for destination marketers. Using micro official statistics data for air travellers to Spain in 2010 and the compositional data analysis (CODA) methodology, this study analyses the determinants of trip budget composition and its differences between airline types. The authors consider transportation expenses, as well as basic (accommodation and food) and discretionary (activities, shopping, etc) at-destination expenses. Log-ratios of budget share are fitted to a MANOVA, with travellers’ attributes as explanatory factors along with the moderating effect of the airline type. Among the findings are that high-income LCA travellers spend relatively more at the destination, LCA tourists travelling with friends have a larger share of discretionary expenses, and highly educated travellers have a larger share of discretionary expenses for both airline types.

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Title: Impact analysis of demand-driven shocks in Turkey’s tourism industry within the framework of the social accounting matrix

Author(s): Hasan Gül and Selim Çağatay

Abstract: The ‘Incentives Programme for the Tourism Industry in Turkey’ foresees a high growth rate in inbound tourism revenues in the next 10 years. This study analyses the impact of various shocks on inbound tourism demand for Turkey. First, domestic and inbound tourism activities are separated by using the information provided in input–output tables and tourism satellite accounts. Second, social accounting matrix-based price multipliers are calculated to carry out analyses in which inbound tourism is included explicitly as one industry. The policy shocks involve a fall in energy prices and in the tax rate on tourism output. Hence, an upward pressure on inbound tourism demand is targeted via price changes in both the supply and demand sides of the industry. The empirical findings show that inter-industry effects are larger than the effects on inbound tourism, revealing that ‘price’ alone is not a satisfactory policy instrument for promoting the tourism industry. In other words, neither of the shocks employed is sufficiently influential to enable the tourism industry to reach the targets envisaged.

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Title: ARDL bounds test approach to modelling tourist expenditure in South Africa

Author(s): Andrea Saayman and Melville Saayman

Abstract: This research follows micro-economic theory, according to which demand for a product is influenced by price, substitute prices and income, to determine the sensitivity of inbound tourist expenditure in South Africa to changes in these variables. Tourist expenditure per person per day from different origins forms the dependent variable. Using quarterly time-series data from 2003 to 2010, this article models inbound tourist expenditure from key source markets for the country. Previous research based on arrivals finds that South Africa is a relatively price-insensitive destination. However, this research shows that this is not the case for all markets. It mostly confirms the income elasticity of South Africa as a destination.

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Title: Keeping mental budgets: visitors’ spending at a Christmas market

Author(s): Juan Gabriel Brida and Oksana Tokarchuk

Abstract: One of the main concerns of tourism managers lies in stimulating tourists’ spending at their destinations. Numerous studies investigating the determinants of tourists’ expenditure limit their investigation to the actual expenditure of tourists. This paper extends the existing literature on tourists’ spending by introducing mental accounts theory. Mental budgets set the limit on the expenditure on a particular category of goods in order to avoid overspending in situations in which a rational approach to spending is not possible. The authors apply this theory to a case of visitors’ spending at a Christmas market in Merano. Data were analysed with the Heckman selection model to understand the determinants of mental budgets and the actual spending of visitors and to study how well their intentions are met by their real behaviour. The findings of the paper indicate that the mental budget is an important component for the analysis of tourists’ expenditure.

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Title: Pricing visitor preferences for temporary art exhibitions

Author(s): Massimiliano Castellani, Pierpaolo Pattitoni and Laura Vici

Abstract: This paper focuses on the initiatives that museum managers may implement to maximize the profits of museums located in tourist destinations and that host temporary art exhibitions. These initiatives have direct effects on visitor demand and indirect effects on the tourist destination. Classifying visitors into residents, excursionists and tourists, the authors evaluate their preferences and willingness to pay for managerial initiatives. They focus specifically on for-profit museums that host temporary exhibitions in medium and small tourist destinations. Visitor preferences are priced through discrete choice experiments submitted to a sample of (actual and potential) visitors to Castel Sismondo Museum in Rimini, Italy.

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Title: Gibrat’s Law and the impact of ownership: a case study of Croatia’s hotel industry

Author(s): Neven Ivandić

Abstract: This paper tests the hypothesis that in conditions of economic transition Gibrat’s Law of proportionate growth holds, regardless of the type of firm ownership. The hypothesis is tested on a population of Croatian hotel companies, divided into three ownership type groups, operating continuously from 1998 to 2008. The developed dynamic multiple linear regression model of Croatian hotel firms evaluated by the two step Arellano–Bond estimator is used as a basis for analysis. Estimation of model parameters suggests that the dynamics of firms in transition conditions are not just a reflection of random effects, but are also affected by size and ownership factors. The results show that smaller companies grow more rapidly than larger ones and that growth varies depending on firm ownership, with slower growth in state-owned firms.

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Title: The impact of innovation on firms’ performance: an analysis of the hotel sector in Majorca

Author(s): María Tugores and Dolores García

Abstract: Studies of the role of innovation in the survival opportunities of firms and in their financial performance are scarce regarding services, and the hospitality sector in particular. This paper expands the research in this field. First, the determinants of environmental and non-environmental innovations are analysed separately. Common factors are found to have different impacts on innovations of a different nature. Second, the role of varying innovation practices in hotel performance is studied. Non- environmental innovations and only some particular environmental innovations are found to have a positive impact on hotel performance, and to contribute to an understanding of their relative performance, even when controlling for quality or human capital variables. These results highlight the convenience of discriminating among innovation measures to guide hotel policies more efficiently. They also suggest that the environmental regulator may be required to intervene for those innovative measures that do not translate into hotels’ self-interest, from a performance point of view.

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Title: Indebtedness of the tourism sector in Mediterranean countries

Author(s): Daša Farčnik, Kir Kuščer and Domen Trobec

Abstract: Although the economies of Mediterranean countries were very negatively affected by the global and financial crisis, little attention has been devoted to their sector-specific performance, especially tourism. Tourism is a key sector in these countries, so the consequences of the crisis should be explored and tools to improve the sector’s performance provided. This paper therefore focuses on the influence of the indebtedness process on tourism sector performance in selected Mediterranean countries (Bosnia and Herzegovina, Croatia, Greece, Italy, Macedonia, Montenegro, Portugal, Serbia, Slovenia and Spain). Using data from firms’ financial statements for 2006–2010, the tourism sector is compared to all non-tourism sector with a focus on the indebtedness process and the functioning of the financial accelerator as the key obstacle to future performance. Furthermore, the paper investigates investments in core activities and financial assets as the main drivers of debt accumulation in the boom and bust periods.

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Title: Tourism and poverty reduction: an economic sector analysis for Costa Rica and Nicaragua

Author(s): Manuel Vanegas Sr, William Gartner and Benjamin Senauer

Abstract: Although the economies of Mediterranean countries were very negatively affected by the global and financial crisis, little attention has been devoted to their sector-specific performance, especially tourism. Tourism is a key sector in these countries, so the consequences of the crisis should be explored and tools to improve the sector’s performance provided. This paper therefore focuses on the influence of the indebtedness process on tourism sector performance in selected Mediterranean countries (Bosnia and Herzegovina, Croatia, Greece, Italy, Macedonia, Montenegro, Portugal, Serbia, Slovenia and Spain). Using data from firms’ financial statements for 2006–2010, the tourism sector is compared to all non-tourism sector with a focus on the indebtedness process and the functioning of the financial accelerator as the key obstacle to future performance. Furthermore, the paper investigates investments in core activities and financial assets as the main drivers of debt accumulation in the boom and bust periods.

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Title: Economic growth and environment: tourism as a trigger for green growth

Author(s): Simone Marsiglio

Abstract: The paper analyses the implications of tourism activities for economic growth and environmental assets, focusing especially on small island countries. The author develops a stylized dynamic economic model in which tourism is the trigger of the incentive mechanism leading to abatement activities and economic growth. The basic idea is that tourists choose the location to visit according to a number of factors (including environmental quality) which are affected by residents’ choices. If residents engage in environmental protection activities, it then may be possible for environmentally based tourism economies to reach a smooth development process. The author shows that the (sustainable) balanced growth path is the only viable equilibrium, and along such a path consumption grows while environmental quality rises. Tourists’ preferences crucially affect the long- run outcome, since economic and environmental growth rates increase with the green preference and decrease with the grey preference and crowding aversion parameters. Thus, if tourism specialization is to be the pathway to development, green tourism will need to be promoted.

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Title: Why do tourists persist in visiting the same destination?

Author(s): Antónia Correia, Andreas H. Zins and Francisco Silva

Abstract: Capturing and retaining tourists are the main driving forces behind tourism marketing research. Nevertheless, research on how to retain tourists and why they persist in repeating the same destination is not consensual. Following the early work of Ehrenberg and the recency–frequency– monetary value paradigm, this study applies a Poisson distribution model to estimate the past frequency of revisiting Portugal based on information collected from international repeat visitors surveyed at all airports of Portugal in 2012. Results from estimating the model show mixed effects for recency, country of origin and destination region. Recommendation behaviour could not be identified as an explanatory variable for past visitation frequency.

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Title: Optimal overbooking limits for a hotel with three room types and with upgrade and downgrade constraints

Author(s): Stanislav H. Ivanov

Abstract: This paper develops a mathematical model for optimal overbooking limits for a three-room- type hotel. It is assumed that the hotel has low-, medium- and high-price rooms, and that upgrades and downgrades are possible but in one step only; that is, low-price rooms can be upgraded only to medium-price ones, high-price rooms can be downgraded to medium-price only, while medium-price rooms can be both downgraded to low-priced and upgraded to high-price. The optimal level of overbookings for each room type is calculated with the help of the expected marginal revenue technique. The paper identifies all possible combinations between the overbooking levels of each room type and the actual number of cancellations, no shows and early departures the hotel can face, and formulates the costs of the overbookings in each of these combinations.

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