Vol 20 No 4 August 2014
Abstract: Currently, there are opposing views concerning the capacity of economic growth resulting from the expansion of tourism activity to influence an increase in the level of a country’s economic development. In recent years a school of thought has been consolidating that there is no automatic relationship between the two, but that certain circumstances must occur in the structural foundations of a country for such a link to be made. The investment climate plays a decisive role in the economic development of a society. The aim of this paper is to identify, through a country-level empirical analysis, which specific factors related to the investment climate promote or hinder the transformation of tourism growth into an improvement of the living conditions of the population. The end result is that, in those countries with lower levels of development, the lack of an appropriate investment climate complicates this relationship (unlike in developed countries). Thus, continuing to invest in tourism in these countries without first solving the issues affecting the investment climate will lead to a failure of such investment.
Abstract: This paper examines variations in wages for tourism and tourism-associated industries in the USA for the period 2004–2009. It critically assesses the extent to which tourism and tourism-associated activities conform to their low-wage stereotype and finds this to be true in general, but not universally. It then considers the possibility that wages in US tourism and tourism-associated industries can be explained by observable characteristics of these industries. Recent research suggests that the use of wage data at the level of highly detailed occupations is an effective alternative to other ways of capturing underlying skill differences. Accordingly, data from the US Occupational Employment Statistics (OES) were used to provide this detail. The results strongly support the importance of difference in wages between occupations in understanding differences between industries. They also support the importance of a number of industry characteristics, including profitability, multi-factor productivity and demand growth. The paper also considers the relevance of an industry wage premium or discount for tourism and tourism-associated activities in the USA over the same period. It estimates an industry wage model separately for five individual occupations across all industries that employ for the occupation concerned. The analysis shows that workers in the two more highly paid occupations exhibit evidence of a tourism and tourism-associated discount but that workers in the three more lowly paid occupations exhibit a tourism and tourism-associated wage premium.
Abstract: The authors study and test one of the possible organizational solutions to the problem of asymmetric information between sellers and buyers: sellers (firms) use intermediaries’ reputations instead of their own as a way to provide credible information to potential buyers concerning the true quality of their product. More specifically, the authors test the role of intermediaries in the hotel industry as providers of reputation regarding the true quality of a hotel establishment. The empirical results support their hypotheses by showing that reliance on an intermediary (a tour operator and a travel agency) in the distribution of the capacity of accommodation of a hotel establishment is: (i) higher for high-quality hotels (which face more acute problems from asymmetric information); and (ii) lower for establishments belonging to large and reputable hotel chains (which are themselves capable of building their own reputation and brand name).
Abstract: Trade contacts in the intermediate market, or intermediate trade contacts (ITC), are transactional capital resources. They are measured by business-to-business purchases or sales. The objective of this work is to evaluate the impact of ITC sales on the sustained competitive advantage of hotels and restaurants, ‘HotRests’, in EU countries. In a resource-based view framework, only valuable (above-normal) and rare (concentrated) ITC become relevant. Using EU input–output tables and applying the supply-driven model, the relationships between the multiplier and the valuable and rare resources are identified. The main finding is that ‘HotRests’ have the opportunity to manage their business-to-business relationships as a resource asset-flow to speed up innovation processes and defend their competitive advantage.
Abstract: Although Spain is among the world’s most visited tourist destinations, not all Spanish regions receive the same flow or number of tourists, and the type of visitor varies from one region to another. This paper analyses the structure of the tourism industry across the six most important tourist regions in Spain. Its main aim is to identify the most relevant factors for each of these regions, explaining the differences between them not only in terms of the number of tourists they receive but also in terms of tourist behaviour. The authors select two theoretical models empirically validated in previous studies: Porter’s Diamond model, which helps to explain why the tourism industry is more competitive in some Spanish regions than in others, and the theory of tourist districts, which clarifies why the tourism industry tends to develop in very specific geographical areas.
Abstract: A sample of 28 prestige hotels on the Algarve (Portugal) is analysed to compare the results of the data envelopment analysis and stochastic frontier approach techniques in order to measure cost, allocative and technical efficiencies. The results suggest that efficiencies are similar when they are calculated by these two models. Companies with five-star hotels, hotels with golf courses and owners of only one hotel have higher efficiency levels than their peers. One explanation for this evidence is that these models express themselves through cost or production technologies, allowing them a better fit.
Abstract: More than 60,000 divers annually visit Sodwana Bay in KwaZulu-Natal, South Africa, one of the world’s top diving sites. A survey was conducted during March and April 2012 to identify factors that influence the spending behaviour of divers. Data from 402 questionnaires provided information about spending per person, socio-demographic profile, diving behaviour and motives, and environmental awareness. A quantile regression approach was used to analyse the determinants of spending. The inclusion of environmental awareness as a factor that might influence spending behaviour is an advance on previous studies of determinants of spending, and this factor was found to increase spending significantly. Knowledge about the relationship between environmental awareness and spending could be valuable for policy aimed at both economic and ecological sustainability.
Abstract: The authors show that the terrorist attacks of September 11, 2001 caused a permanent structural break in NYC’s leisure and hospitality labour market. This structural break is visible from both an interrupted time-series perspective and a comparison with NYC’s overall economic development. Assuming that the labour market dynamics of the leisure and hospitality industry mirror a city’s feel in the hedonism–asceticism spectrum, the authors conclude that the 9/11 terrorist attacks have permanently shifted ‘New York’s state of mind’ from hedonism towards asceticism. These results suggest that greater attention must be given to the formulation of effective industry marketing strategies in response to the legacy of urban terrorism.
Abstract: This paper compares the differences between the monetary measures of willingness to accept and willingness to pay (WTP) for changes in climate change risk. The empirical evidence comes from tourists in the Canary Islands. The modelling approach utilizes a Bayesian mixture of normal distribution model that allows the authors to consider heterogeneity across both WTP and willingness to accept (WTA) question formats. The results show that the WTP for lower risks is lower than the WTA higher risks, and that the disparity between these measures depends on the market segments, the specific climate change risk and the characteristics of the individuals.
Abstract: This paper examines whether the performance of corporate social responsibility (CSR) affects the cost of equity capital for the tourism industry, and whether there are any regional and cultural differences in this respect. Using data from a global sample of tourism-related firms, the authors find that, on average, CSR performance is associated with a lower cost of equity for firms in Western countries, but not for firms in Asian countries. The results suggest that there are different concerns with regard to CSR investment for tourism-related firms in different regions, due to the variations in investors’ perceptions, culture, institutional environment and managerial beliefs.
Abstract: This study examines the tourism-led growth hypothesis (TLGH) in Vietnam during the period 1992–2011. The authors use two-step procedures to test the hypothesis. They first apply cointegration and the Granger causality test to identify the relationships between tourism earning and gross domestic product (GDP). Second, they use growth decomposition methodology to measure the contribution of tourism to economic growth. The results indicate that it is worthwhile for the government to implement economic policies to stimulate economic growth through the tourism sector in Vietnam.
Abstract: There is an increasing strand of literature on tourism expenditure which draws microdata from national household budget surveys (HBS). In this paper the authors discuss the fact that, owing to tourists’ seasonal preferences, papers based on HBS that do not use spending information covering the whole year for each household are seasonally biased. The authors show that this bias occurs as a result of either the design of the HBS or inadequate treatment of the data by researchers. When the bias occurs, tourism expenditure estimates are misleading. Analysing the issue in detail, the authors argue that it underestimates the participation rate and exerts a downward bias on income elasticity values. These hypotheses are tested empirically with Spanish microdata, showing that the seasonal bias severely affects the results obtained. In this regard, previous literature on tourism expenditure affected by this seasonal bias should be revisited.
Abstract: The authors reformulate the hedonic price approach by taking into account market disequilibrium in the hotel market. In the reformulated model, the imbalance between room supply and demand is incorporated into the hedonic price function. The hedonic price function for a hotel facing market disequilibrium is then estimated using data from a national panel of international tourist hotels in Taiwan during the period 1996–2008. They find that market disequilibrium has a positive and significant effect on room rates of tourist hotels in Taiwan; that is, an increase in excess demand may significantly raise the room rates. The effects of other physical attributes of hotels on room rates are also discussed.
Abstract: The authors confirm a non-monotonic relationship between international tourism and economic growth, using China’s province-level panel data from 1987 to 2010. Two endogenous cut-off points of the efficiency of international tourism in economic growth are identified. When the degree of tourism specialization is lower than 1.80% or between 1.80% and 2.04%, international tourism has a significant positive impact on economic growth, but the magnitude of the impact is weaker in the latter case. When the degree of tourism specialization exceeds 2.04%, an insignificant negative relationship between tourism and economic growth emerges. This suggests that tourism-led economic growth may not be sustained at high levels of tourism specialization.