We are IntechOpen, the world's leading publisher of Open Access books Built by scientists, for scientists

4,000+

Open access books available

116,000+

International authors and editors

120M+

Downloads

Our authors are among the

Top 1%

most cited scientists

12.2%

Contributors from top 500 universities

Selection of our books indexed in the Book Citation Index in Web of Science™ Core Collection (BKCI)

### Interested in publishing with us? Contact book.department@intechopen.com

Numbers displayed above are based on latest data collected. For more information visit www.intechopen.com

## **Meet the editor**

Dr. Murat Kasimoğlu is a professor of management. He received doctorate degree from Istanbul University, Faculty of Business. He does project with companies, NGOs and government regarding the management. Dr. Murat Kasimoğlu is also developing project to the various organisations included tourism industry. He teaches Management, Business Strategy at the Undergraduate,

Graduate and Doctorate levels. He has given lectures at the some universities in EU and other developing countries (Finland, Poland, Czech Republic, and Slovakia, Azerbaijan, Ukraine, etc), joined international conferences and published papers in international journals. He has also developed strategic partnerships around the world. He also joined international the programs for developing global strategies.

Contents

**Preface IX** 

Leszek Butowski

Diana Târnăveanu

Chapter 3 **Introduction to Input-Output** 

Tadayuki (Tad) Hara

Chapter 4 **Golden Age of Mass Tourism:** 

**Section 1 Tourism Industry – Development Strategy 1** 

Chapter 1 **Sustainable Tourism – A Model Approach 3** 

Chapter 2 **Knowledge-Based Decisions in Tourism 21** 

**Its History and Development 73**  Erkan Sezgin and Medet Yolal

Ching-Shu Su and Jeou-Shyan Horng

Chapter 7 **New Opportunities for the Tourism Market:** 

Chapter 9 **Mature Tourist Destination: A New Tool to** 

Montserrat Hernández-López

Chapter 5 **Recent Developments in Research and** 

Chapter 6 **Enterprise Proportionalities in the** 

Chapter 8 **The Role of Time in the Global** 

Daan Toerien

**Framework for Analysis of Tourism as an Industry 49** 

**Future Directions of Culinary Tourism: A Review 91** 

**Tourism Sector of South African Towns 113** 

**Senior Tourism and Accessible Tourism 139**  Elisa Alén, Trinidad Domínguez and Nieves Losada

**Tourism Market – A Demand Perspective 167**  Grzegorz Gołembski and Agnieszka Niezgoda

**Forecast Internal Composition of Its Demand 179** 

### Contents

#### **Preface XIII**


X Contents


Contents VII

Chapter 20 **Sustainability in the** 

Chapter 21 **Tourism in Rural Areas:**

Devi Roza Kausar

**Management of World Cultural Heritage 431**

**Foundation, Quality and Experience 441** 

**A Viewpoint of Tourism Stakeholders of Lesvos Island 461** 

Sandra Maria Correia Loureiro

Kostas Rontos, Eleni Kitrinou,

Dimitrios Lagos and Mihail Diakomihalis

Chapter 22 **Islands and Tourism Development:** 


VI Contents

Chapter 10 **Security Measures on the International Tourism 195**

**Section 2 Tourism Industry – Sustainable Development 209**

**of Agrarian Structures and the Rural** 

Chapter 12 **Using Weather-Related Derivative Products** 

M. Fuat Beyazit and Erdogan Koc

Chapter 13 **Tourism Life Cycle Assessment (LCA):**

**Tourism Dynamic in the Czech Republic 211**

**for Tourism and Hospitality Businesses 225** 

**Proposal of a New Methodological Framework for Sustainable Consumption and Production 247**  Camillo De Camillis, Paul Peeters, Luigia Petti and Andrea Raggi

**Methodologies and Their Uses: 1969-2011 269**  Mohammad Nurul Huda Mazumder, Abdullah Al-Mamun, Abul Quasem Al-Amin and Muhammad Mohiuddin

**Tourism System: Assessment of Environmental and Management Constraints Towards Sustainability 295** 

**Tourism Industry from Earthquakes – Impact and Analysis of Mass Media Information 317**

José Cadima Ribeiro and Laurentina Cruz Vareiro

**Development in Small Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 357**

Edwin A. Hernández- Delgado, Carlos E. Ramos-Scharrón, Carmen R. Guerrero-Pérez, Mary Ann Lucking, Ricardo Laureano,

Pablo A. Méndez-Lázaro and Joel O. Meléndez-Díaz

**in the Economic Development of Europe 399**

**Tourism – A Review of Literatures on** 

Valentina Castellani and Serenella Sala

Mitsuyoshi Nagao and Azuma Ohuchi

**Minho-Lima Region (Portugal) 339** 

**of Non-Sustainable Tourism and Urban**

Jesús E. Martínez Marín

Chapter 11 **Heritages and Transformations** 

Pascal Chevalier

Chapter 14 **Economic Impact of** 

Chapter 15 **Carrying Capacity of** 

Chapter 16 **Reputational Damage to** 

Chapter 17 **The Tourist Potential of the** 

Chapter 19 **Nautical Tourism and Its Function** 

Tihomir Luković

Chapter 18 **Long-Term Impacts** 

Chapter 22 **Islands and Tourism Development: A Viewpoint of Tourism Stakeholders of Lesvos Island 461**  Kostas Rontos, Eleni Kitrinou, Dimitrios Lagos and Mihail Diakomihalis

Preface

visionary perspective.

industries...

Today, it is considered good business practice for tourism industries to support their micro and macro environment by means of strategic perspectives. This is necessary because we cannot contemplate companies existing without their environment. If companies do not involve themselves in such undertakings, they are in danger of isolating themselves from the shareholder. That, in turn, creates a problem for mobilizing new ideas and receiving feedback from their environment. In this respect, the contributions of academics from international level together with the private sector and business managers are eagerly awaited on topics and sub-topics within Strategies

The books based on three main sections. First section is Tourism Industry: Micro and Macro Topics For Strategy Development has consisted of eight chapters relate with developing strategies from micro and macro approaches. Second section is Tourism Industry: Macro Perspective has consisted of six chapters relate with macro perspective of tourism industry from different approaches. Third section is Tourism Industry: Different Topics for Strategy Development relate with eclectic topic of tourism industry. Each paper has valuable conurbation to understand industry from

In this book, I am pleased to present many papers from all over the world that discuss the impact of tourism strategies. It is our hope that you will find the opportunity to

Editing a book relies on intensive team work and the contribution of various bodies such as companies and NGO's. Firstly, I am always aware of the contribution of my

Secondly, I would like to express my appreciation for having the chance to work with practitioners whose visions and contribution made me aware of real need of

Thirdly, I am most thankful to the writers of the book. It is a real pleasure to work with you in such an efficient and productive way that I hope we will continue in the future.

for Tourism Industry-Micro and Macro Perspectives.

extend your vision in the light of such scientific discussion.

colleagues, whose vision inspired us to commence this project.

### Preface

Today, it is considered good business practice for tourism industries to support their micro and macro environment by means of strategic perspectives. This is necessary because we cannot contemplate companies existing without their environment. If companies do not involve themselves in such undertakings, they are in danger of isolating themselves from the shareholder. That, in turn, creates a problem for mobilizing new ideas and receiving feedback from their environment. In this respect, the contributions of academics from international level together with the private sector and business managers are eagerly awaited on topics and sub-topics within Strategies for Tourism Industry-Micro and Macro Perspectives.

The books based on three main sections. First section is Tourism Industry: Micro and Macro Topics For Strategy Development has consisted of eight chapters relate with developing strategies from micro and macro approaches. Second section is Tourism Industry: Macro Perspective has consisted of six chapters relate with macro perspective of tourism industry from different approaches. Third section is Tourism Industry: Different Topics for Strategy Development relate with eclectic topic of tourism industry. Each paper has valuable conurbation to understand industry from visionary perspective.

In this book, I am pleased to present many papers from all over the world that discuss the impact of tourism strategies. It is our hope that you will find the opportunity to extend your vision in the light of such scientific discussion.

Editing a book relies on intensive team work and the contribution of various bodies such as companies and NGO's. Firstly, I am always aware of the contribution of my colleagues, whose vision inspired us to commence this project.

Secondly, I would like to express my appreciation for having the chance to work with practitioners whose visions and contribution made me aware of real need of industries...

Thirdly, I am most thankful to the writers of the book. It is a real pleasure to work with you in such an efficient and productive way that I hope we will continue in the future.

#### XIV Preface

Lastly, I owe a great debt to our organizing team who has worked hard to ensure the success of this international book. Without **INTECH publishing** involvement and heart-felt commitment this book would not have come about. In particular, I would like to state my gratitude for the efforts of Maja Kisic and Vana Persen.

> **Prof. Dr. Murat Kasimoğlu** Canakkale Onsekiz Mart University, Department of Management, Turkey

## **Section 1**

**Tourism Industry – Development Strategy** 

**1** 

**Sustainable Tourism –** 

Sustainable tourism, sustainable development through tourism, principles of sustainable development in tourism and tourism development in terms of sustainable tourism, in the literature often treated as names for the same phenomenon, are becoming increasingly interesting for scholars and practicians of tourism from various countries. It results from the fact that sustainable tourism (at least declaratively – on the institutional level) is considered as the most desirable form of tourism development on particular reception areas, especially

Simultaneously, it should be noted that the rich scientific literature concerning sustainable tourism focuses attention primarly on descriptive presentation of its various aspects, with particular emphasis on the idea, the origins and the evolution of the phenomenon as well as terminological issues related to it. The authors pay much attention to reveal the relationships between sustainable tourism (as a form of tourism development) and particular types of tourism (as forms of tourist movement). At the same time, it should be marked that there are skeptical voices, which refer especially to the role that sustainable tourism is ascribed – as a remedy for all the problems of contemporary tourism. It also seems that, taking into consideration the hitherto scientific output related to sustainable tourism, the works devoted the theoretical aspects of sustainable tourism are in minority.

Relatively weak theoretical grounds together with the ambiguity and diversity of views on sustainable tourism as well as the descriptive approach, which dominates in the literature, have prompted the author of this article to make an attempt to render the essence of sustainable tourism in a model approach. When creating the theoretical model of sustainable tourism, the author tried to take into consideration all its main features (and interrelations ocurring among them) and to simultaneously follow certain main principles, i.e.: of completeness, versatility, explicitness and simplicity of the model itself. The author is aware of the fact that attempts to render sustainable tourism in a model approach had already been made, but it seems that they concerned, in majority, its particular aspects, such as the origins of the phenomenon, its relationships with certain forms of tourist movement or relationships between sustainable development and tourism. However the literature lacked a holistic approach which would take into consideration all most important features

those which preserved the most natural and cultural authenticity values.

**1. Introduction** 

of sustainable tourism.

**A Model Approach** 

*Vistula University in Warsaw* 

Leszek Butowski

*Poland* 

### **Sustainable Tourism – A Model Approach**

Leszek Butowski *Vistula University in Warsaw Poland* 

#### **1. Introduction**

Sustainable tourism, sustainable development through tourism, principles of sustainable development in tourism and tourism development in terms of sustainable tourism, in the literature often treated as names for the same phenomenon, are becoming increasingly interesting for scholars and practicians of tourism from various countries. It results from the fact that sustainable tourism (at least declaratively – on the institutional level) is considered as the most desirable form of tourism development on particular reception areas, especially those which preserved the most natural and cultural authenticity values.

Simultaneously, it should be noted that the rich scientific literature concerning sustainable tourism focuses attention primarly on descriptive presentation of its various aspects, with particular emphasis on the idea, the origins and the evolution of the phenomenon as well as terminological issues related to it. The authors pay much attention to reveal the relationships between sustainable tourism (as a form of tourism development) and particular types of tourism (as forms of tourist movement). At the same time, it should be marked that there are skeptical voices, which refer especially to the role that sustainable tourism is ascribed – as a remedy for all the problems of contemporary tourism. It also seems that, taking into consideration the hitherto scientific output related to sustainable tourism, the works devoted the theoretical aspects of sustainable tourism are in minority.

Relatively weak theoretical grounds together with the ambiguity and diversity of views on sustainable tourism as well as the descriptive approach, which dominates in the literature, have prompted the author of this article to make an attempt to render the essence of sustainable tourism in a model approach. When creating the theoretical model of sustainable tourism, the author tried to take into consideration all its main features (and interrelations ocurring among them) and to simultaneously follow certain main principles, i.e.: of completeness, versatility, explicitness and simplicity of the model itself. The author is aware of the fact that attempts to render sustainable tourism in a model approach had already been made, but it seems that they concerned, in majority, its particular aspects, such as the origins of the phenomenon, its relationships with certain forms of tourist movement or relationships between sustainable development and tourism. However the literature lacked a holistic approach which would take into consideration all most important features of sustainable tourism.

Sustainable Tourism – A Model Approach 5

In the same period various conceptions connected with the so called ecotourism began to appear in the international literature. H. Ceballos-Lescuráin (1987) is considered the author of its first definition. At the same time scholars began to introduce terms similar to *ecotourism* or *alternative tourism* such as *green tourism (tourisme vert, nature-based, naturnäher), soft tourism (saufer Tourismus), nature tourism, environmental friendly/environmentally sensible tourism, responsible tourism (angepast), discreet tourism, appriopriate tourism, ecoethnotourism* (Boo, 1990, Cater, Lowman, 1994, Krippendorf et al., 1998; Niezgoda, 2006). It should be noted that the authors of these definitions stressed first of all the (desired) way of cultivating tourism, types of values (mainly natural) and the (small) scale of the phenomenon. They often used the evaluating approach which juxtaposed the 'new' forms of tourism with these

A broad overview of diverse definitions of sustainable tourism was included in R.W. Butler's paper entitled 'Sustainable tourism: a state-of-the-art review' (1999). This author, who is skeptic towards views that sustainable tourism constitutes a panaceum for contemporary tourism's problems, presents his own view on its essence. He claims that sustainable tourism can be seen in two ways (Butler, 2005). Firstly, from the semanticdictionary side, taking into consideration its feature of sustainability as a warranty of longterm survival on the market. According to M. Mika (2008) such an approach seems to be closer to the representatives of the economic party, who stress the problem of selfmaintenance of tourism development. The second way of understanding sustainable tourism by Butler is much closer to the conception of sustainable development. It suggests treating sustainable tourism as a tool for the development of reception areas without breaking the principles of sustainable development. As one may guess, this attitude is closer to the representatives of the natural sciences and the humanities. Butler's views on ambiguity in understanding the term sustainable tourism are supported by A. Niezgoda (2006), who claims that conception of sustainable tourism ocurred as a result of research on interrelations between tourism, environment and development. According to this author sustainable tourism is treated by scholars as a tool for realization of sustainable

Totally different scientific basis of sustainable tourism conception (or sustainable development through tourism) is presented by Bryan H. Farell and Louise Twinning-Ward (2003). In the article entitled 'Reconceptualizing Tourism', published in 2003 in the *Annals of Tourism Research*, they postulate a total change in the methodological approach towards the studies of tourism, sustainable tourism included. These authors criticize strongly the hitherto, according to them most wide-spread, way of conducting research in the field of tourism, which is based on narrow specialization, linear reductionism as well as determinism assuming predictability of phenomena and presence of cause and effect. They claim that such an approach, due to complexity and unpredictability of behaviour of tourist systems and systems influencing tourism, cannot guarantee satisfactory results. Instead, they propose a new paradigm that is based on the interdisciplinary approach encompassing relatively new fields, such as: ecosystem ecology, ecological economics, global change science and complexity theory. These authors assume that natural and social systems do function in a relatively independent and non-linear way and therefore postulate implementation of the complex adaptive systems theory into the studies of tourism. Simultaneously, they introduce the notions of comprehensive tourism system and complex

'old', often identified with mass tourism.

development or a tool for the development of tourism itself.

adaptive tourism systems – CATS.

When constructing the theoretical model of sustainable tourism, the author tried to take into consideration the hitherto output of the Polish and international literature, available thanks to the studies of source materials. It enabled the adoption of main model assumptions, and later on, when implementing the deductive method, also the construction of the model itself basing on them. To that end, the author used the form of the mathematical function and notation.

#### **2. Sustainable tourism – A review of main ideas**

The conception of sustainable tourism refers to the wider conception of sustainable development, which stresses the need of rational management of natural environment resources. The first in the global scale sign of the necessity of change in the general conception of economic development was the report of the Secretary-General of the United Nations U Thant entitled 'Man and His Environment', published in 1969. Significant was also the 1st Report of the Club of Rome entitled 'Limits to Growth', published in 1972. The problems of the threat to the natural environment were the main subject of discussion during the UN conference in Stockholm (the so called Stockholm Conference), organised in the same year. At that time, the term 'sustainable development' was introduced. The next milestone in the worldwide discussion on sustainable development was the publication of the report entitled 'Our Common Future', which contained a summary of the activity of the World Commission on Environment and Development (the so called Bruntland Commission). This document adopted the fundamental, still valid, assumption that sustainable development 'seeks to meet the needs and aspirations of the present without compromising the ability to meet those of the future'. In 1992 in Rio de Janeiro the United Nations Conference on Enrivonment and Development (the so called 'Earth Summit') took place. During that conference two documents, significant from the point of view of the sustainable development conception, were adopted. These were the so called Rio Declaration, containing 27 principles defining rights and duties of nations in the field of sustainable development, and AGENDA 21, the global action plan referring to the actions necessary in order to achieve sustainable development and high life quality (Kowalczyk, 2010; Niezgoda, 2006).

Conceptions of tourism development referring to the principles of sustainable development began to appear in the international literature on a larger scale in the mid 1980s. It should however be noted that as early as 1965 W. Hetzer formulated the definition of the so called *responsible tourism*, which in fact was very close to these principles [Blamey, 2001, as cited in Kowalczyk, 2010]. It seems, though, that the moment which began the discussion on new ways of developing tourism was when the conception of the so called *alternative tourism*<sup>1</sup> arose. J. Krippendorfer, who published in the *Annals of Tourism Research* in 1986 the article entitled 'Tourism in the system of industrial society', is considered the author of its definition. As the name itself suggests, it arose in opposition to the so called mass tourism, viewed by the proponents of this conception as the so called 'bad option'. Alternative tourism, often identified with small-scale tourism and treated as the 'good option', was meant to oppose the 'bad option' (Clarke, 1997; Lanfant, Graburn, 1992; Weaver, 2001).

<sup>1</sup> A. Niezgoda [2006] claims that the conception of alternative tourism stems from the so called Hippie contrculture, which arose in the 1960s in the USA and later spread in Europe. In this context, alternative tourism was meant to be the new way of travelling that would not destroy the environment and authentic relations between people.

When constructing the theoretical model of sustainable tourism, the author tried to take into consideration the hitherto output of the Polish and international literature, available thanks to the studies of source materials. It enabled the adoption of main model assumptions, and later on, when implementing the deductive method, also the construction of the model itself basing on them. To that end, the author used the form of the mathematical function and notation.

The conception of sustainable tourism refers to the wider conception of sustainable development, which stresses the need of rational management of natural environment resources. The first in the global scale sign of the necessity of change in the general conception of economic development was the report of the Secretary-General of the United Nations U Thant entitled 'Man and His Environment', published in 1969. Significant was also the 1st Report of the Club of Rome entitled 'Limits to Growth', published in 1972. The problems of the threat to the natural environment were the main subject of discussion during the UN conference in Stockholm (the so called Stockholm Conference), organised in the same year. At that time, the term 'sustainable development' was introduced. The next milestone in the worldwide discussion on sustainable development was the publication of the report entitled 'Our Common Future', which contained a summary of the activity of the World Commission on Environment and Development (the so called Bruntland Commission). This document adopted the fundamental, still valid, assumption that sustainable development 'seeks to meet the needs and aspirations of the present without compromising the ability to meet those of the future'. In 1992 in Rio de Janeiro the United Nations Conference on Enrivonment and Development (the so called 'Earth Summit') took place. During that conference two documents, significant from the point of view of the sustainable development conception, were adopted. These were the so called Rio Declaration, containing 27 principles defining rights and duties of nations in the field of sustainable development, and AGENDA 21, the global action plan referring to the actions necessary in order to achieve sustainable

Conceptions of tourism development referring to the principles of sustainable development began to appear in the international literature on a larger scale in the mid 1980s. It should however be noted that as early as 1965 W. Hetzer formulated the definition of the so called *responsible tourism*, which in fact was very close to these principles [Blamey, 2001, as cited in Kowalczyk, 2010]. It seems, though, that the moment which began the discussion on new ways of developing tourism was when the conception of the so called *alternative tourism*<sup>1</sup> arose. J. Krippendorfer, who published in the *Annals of Tourism Research* in 1986 the article entitled 'Tourism in the system of industrial society', is considered the author of its definition. As the name itself suggests, it arose in opposition to the so called mass tourism, viewed by the proponents of this conception as the so called 'bad option'. Alternative tourism, often identified with small-scale tourism and treated as the 'good option', was meant to oppose the 'bad option' (Clarke, 1997; Lanfant, Graburn, 1992; Weaver, 2001).

1 A. Niezgoda [2006] claims that the conception of alternative tourism stems from the so called Hippie contrculture, which arose in the 1960s in the USA and later spread in Europe. In this context, alternative tourism was meant to be the new way of travelling that would not destroy the environment and

**2. Sustainable tourism – A review of main ideas** 

development and high life quality (Kowalczyk, 2010; Niezgoda, 2006).

authentic relations between people.

In the same period various conceptions connected with the so called ecotourism began to appear in the international literature. H. Ceballos-Lescuráin (1987) is considered the author of its first definition. At the same time scholars began to introduce terms similar to *ecotourism* or *alternative tourism* such as *green tourism (tourisme vert, nature-based, naturnäher), soft tourism (saufer Tourismus), nature tourism, environmental friendly/environmentally sensible tourism, responsible tourism (angepast), discreet tourism, appriopriate tourism, ecoethnotourism* (Boo, 1990, Cater, Lowman, 1994, Krippendorf et al., 1998; Niezgoda, 2006). It should be noted that the authors of these definitions stressed first of all the (desired) way of cultivating tourism, types of values (mainly natural) and the (small) scale of the phenomenon. They often used the evaluating approach which juxtaposed the 'new' forms of tourism with these 'old', often identified with mass tourism.

A broad overview of diverse definitions of sustainable tourism was included in R.W. Butler's paper entitled 'Sustainable tourism: a state-of-the-art review' (1999). This author, who is skeptic towards views that sustainable tourism constitutes a panaceum for contemporary tourism's problems, presents his own view on its essence. He claims that sustainable tourism can be seen in two ways (Butler, 2005). Firstly, from the semanticdictionary side, taking into consideration its feature of sustainability as a warranty of longterm survival on the market. According to M. Mika (2008) such an approach seems to be closer to the representatives of the economic party, who stress the problem of selfmaintenance of tourism development. The second way of understanding sustainable tourism by Butler is much closer to the conception of sustainable development. It suggests treating sustainable tourism as a tool for the development of reception areas without breaking the principles of sustainable development. As one may guess, this attitude is closer to the representatives of the natural sciences and the humanities. Butler's views on ambiguity in understanding the term sustainable tourism are supported by A. Niezgoda (2006), who claims that conception of sustainable tourism ocurred as a result of research on interrelations between tourism, environment and development. According to this author sustainable tourism is treated by scholars as a tool for realization of sustainable development or a tool for the development of tourism itself.

Totally different scientific basis of sustainable tourism conception (or sustainable development through tourism) is presented by Bryan H. Farell and Louise Twinning-Ward (2003). In the article entitled 'Reconceptualizing Tourism', published in 2003 in the *Annals of Tourism Research*, they postulate a total change in the methodological approach towards the studies of tourism, sustainable tourism included. These authors criticize strongly the hitherto, according to them most wide-spread, way of conducting research in the field of tourism, which is based on narrow specialization, linear reductionism as well as determinism assuming predictability of phenomena and presence of cause and effect. They claim that such an approach, due to complexity and unpredictability of behaviour of tourist systems and systems influencing tourism, cannot guarantee satisfactory results. Instead, they propose a new paradigm that is based on the interdisciplinary approach encompassing relatively new fields, such as: ecosystem ecology, ecological economics, global change science and complexity theory. These authors assume that natural and social systems do function in a relatively independent and non-linear way and therefore postulate implementation of the complex adaptive systems theory into the studies of tourism. Simultaneously, they introduce the notions of comprehensive tourism system and complex adaptive tourism systems – CATS.

Sustainable Tourism – A Model Approach 7

To sum up the deliberation concerning the issue of sustainable development of tourism one should repeat, i.a. after the United Nations World Tourism Organization (2004) that sustainable development should be applicable (as much as possible) to all forms of tourism, including mass tourism. And the principles defining sustainable development in tourism should refer to natural, socio-cultural and economic aspects connected with tourism – by

As it was mentioned, sustainable tourism is an area of interest of many scholars, activists and practicians in various countries. It seems, though, that both in the international and in the Polish literature the descriptive method dominates. It puts stress on explaining the conception of sustainable tourism, which is often done from different scientific positions. Apparent is the evolution of views on its essence. In the first period natural aspects were emphasized first of all – in the context of preserving natural environment resources against the threats of tourism. Now, however, we are dealing with the situation in which economic and socio-cultural aspects are seen as well. To a large extent it is thanks to i.a. the publications of the United Nations World Tourism Organization, which emphasized the necessity of striving for balance in fulfiling needs of all tourism stakeholders functioning within natural and socio-economic environment. The change in the approach towards sustainable tourism during past few decades is also expressed in the abandonment of evaluation of various tourism forms according to these criteria. Nowadays, it is stressed that the principles of sustainable tourism should be taken into consideration in all kinds of tourism, including so unpopular among the 'orthodox activists' mass tourism. This evolution, with the consideration of relations between alternative tourism, ecotourism and mass tourism and their relation to sustainable tourism, is presented i.a. by A. Niezgoda

(2006). In a simpler form it can be presented graphically as in the Figure 1.

tourism. Both situations are ilustrated by bilaterally oriented arrows in Figure 2.

A similar conclusion concerning possibilities of occurrance of undesirable direction of change can be drawn after the analysis of three theoretical models of tourism: 1) of tourist area life cycle (TALC) by R.W. Butler (1980); 2) of tourist space by S. Liszewski (1995), and 3) of changes in the natural environment under the influence of tourism by D. Zaręba (2010).

Model relationships between sustainable tourism and unsustainable tourism (often identified with mass tourism) are an area of interest of other authors as well. Among them are, i.a., D.A. Fennel (1999) and D.B. Weaver (1999), who claim that there is no way to designate a clear boundary between sustainable and unsustainable forms of tourism. The former introduces, in relation to various aspects of tourism (attractions, transportation, accommodation, product), kind of degrees (stages) of sustainable tourism. The latter, in turn, claims that mass tourism (closer to unsustainable tourism) constitutes a kind of continuum of alternative tourism (closer to sustainable tourism), so they cannot be treated as separate, opposing categories. These authors' opinions can lead to two kinds of conclusions. On one hand, it is postulated that the principles of sustainable development should be taken into consideration as much as possible in all forms of tourism (Figure 1). In such a case we deal with the desired direction of change from unsustainable tourism to susainable tourism. On the other hand, assuming D.B. Weaver's point of view on mass tourism (more unsustainable) as a continuum of alternative tourism (more sustainable), one can see a more undesirable direction of change from sustainable tourism to unsustainable

striving to achieve the state of balance between them.

**3. Selected models of sustainable tourism** 

Apart from the broad and varied in views discussion on the essence of sustainable tourism present in numerous scientific publications, also institutional documents devoted to sustainable tourism that are of declarative, explanatory or quasi-normative character are winning wide renown (Table 1). Among numerous publications of this type one should note i.a. the Charter for Sustainable Tourism (adopted in 1995), whose signatories agreed that development under the influence of tourism should refer to the principles of sustainable tourism, which meant that it should take into consideration the long-term needs of the natural environment, affect positively a given economy and be accepted in terms of ethics and culture by local communities. The same document claims that tourism should contribute to sustainable tourism through strict integration with the natural and the antropogenic environment on reception areas. Also in 1995 World Travel and Tourism Council, United Nations World Tourism Organization and Earth Council adopted the document entitled 'Agenda 21 for the Travel and Tourism Industry: Towards Environmentally Sustainable Development'. This document defines i.a. the priorities of sustainable tourism. In 1999 the United Nations World Tourism Organization published the Global Code of Ethics for Tourism, which took into consideration the postulates of sustainable tourism. In 2004 the same organization defined the principles of sustainable tourism as those which refer to all forms of tourism (mass tourism included). At the same time, it was highlighted that in order to ensure a long-term balance the principles of sustainable development in tourism must concern environmental, economic and sociocultural issues to the same degree (Sustainable development of tourism. Conceptual definitions, 2004). Finally, in 2008, during the World Conservation Congress, which took place in Barcelona, the document containing Sustainable Tourism Criteria was adopted.



Apart from the broad and varied in views discussion on the essence of sustainable tourism present in numerous scientific publications, also institutional documents devoted to sustainable tourism that are of declarative, explanatory or quasi-normative character are winning wide renown (Table 1). Among numerous publications of this type one should note i.a. the Charter for Sustainable Tourism (adopted in 1995), whose signatories agreed that development under the influence of tourism should refer to the principles of sustainable tourism, which meant that it should take into consideration the long-term needs of the natural environment, affect positively a given economy and be accepted in terms of ethics and culture by local communities. The same document claims that tourism should contribute to sustainable tourism through strict integration with the natural and the antropogenic environment on reception areas. Also in 1995 World Travel and Tourism Council, United Nations World Tourism Organization and Earth Council adopted the document entitled 'Agenda 21 for the Travel and Tourism Industry: Towards Environmentally Sustainable Development'. This document defines i.a. the priorities of sustainable tourism. In 1999 the United Nations World Tourism Organization published the Global Code of Ethics for Tourism, which took into consideration the postulates of sustainable tourism. In 2004 the same organization defined the principles of sustainable tourism as those which refer to all forms of tourism (mass tourism included). At the same time, it was highlighted that in order to ensure a long-term balance the principles of sustainable development in tourism must concern environmental, economic and sociocultural issues to the same degree (Sustainable development of tourism. Conceptual definitions, 2004). Finally, in 2008, during the World Conservation Congress, which took place in Barcelona, the document containing Sustainable Tourism Criteria was adopted.

**Document Publishing subject Year Place of** 

WTTC, UNWTO, Earth

Tourism UNWTO 1999 Santiago de

tourism. Conceptual definitions UNWTO 2004 Madrid

World Conservation Congress (Rainforest Alliance, UNEP, UNWTO)

International Conference of Environment Ministers on Biodiversity and Tourism

Publishing <sup>2001</sup>

Sustainable Tourism 1995 Lanzarotte,

Council 1995 Madrid (1996)

Charter for Sustainable Tourism World Conference on

The encyclopedia of ecotourism Weaver D.B. (ed.) CABI

Table 1. Selected documents concerning sustainable tourism

Agenda 21 for the Travel and Tourism Industry: Towards Environmentally Sustainable

Development

Criteria

Berlin Declaration

Global Codes of Ethics for

Sustainable development of

Global Sustainable Tourism

**publication** 

Canary Islands

1997 Berlin

Chile

2008 Barcelona

Oxon (UK) – New York (USA)

To sum up the deliberation concerning the issue of sustainable development of tourism one should repeat, i.a. after the United Nations World Tourism Organization (2004) that sustainable development should be applicable (as much as possible) to all forms of tourism, including mass tourism. And the principles defining sustainable development in tourism should refer to natural, socio-cultural and economic aspects connected with tourism – by striving to achieve the state of balance between them.

#### **3. Selected models of sustainable tourism**

As it was mentioned, sustainable tourism is an area of interest of many scholars, activists and practicians in various countries. It seems, though, that both in the international and in the Polish literature the descriptive method dominates. It puts stress on explaining the conception of sustainable tourism, which is often done from different scientific positions. Apparent is the evolution of views on its essence. In the first period natural aspects were emphasized first of all – in the context of preserving natural environment resources against the threats of tourism. Now, however, we are dealing with the situation in which economic and socio-cultural aspects are seen as well. To a large extent it is thanks to i.a. the publications of the United Nations World Tourism Organization, which emphasized the necessity of striving for balance in fulfiling needs of all tourism stakeholders functioning within natural and socio-economic environment. The change in the approach towards sustainable tourism during past few decades is also expressed in the abandonment of evaluation of various tourism forms according to these criteria. Nowadays, it is stressed that the principles of sustainable tourism should be taken into consideration in all kinds of tourism, including so unpopular among the 'orthodox activists' mass tourism. This evolution, with the consideration of relations between alternative tourism, ecotourism and mass tourism and their relation to sustainable tourism, is presented i.a. by A. Niezgoda (2006). In a simpler form it can be presented graphically as in the Figure 1.

Model relationships between sustainable tourism and unsustainable tourism (often identified with mass tourism) are an area of interest of other authors as well. Among them are, i.a., D.A. Fennel (1999) and D.B. Weaver (1999), who claim that there is no way to designate a clear boundary between sustainable and unsustainable forms of tourism. The former introduces, in relation to various aspects of tourism (attractions, transportation, accommodation, product), kind of degrees (stages) of sustainable tourism. The latter, in turn, claims that mass tourism (closer to unsustainable tourism) constitutes a kind of continuum of alternative tourism (closer to sustainable tourism), so they cannot be treated as separate, opposing categories. These authors' opinions can lead to two kinds of conclusions. On one hand, it is postulated that the principles of sustainable development should be taken into consideration as much as possible in all forms of tourism (Figure 1). In such a case we deal with the desired direction of change from unsustainable tourism to susainable tourism. On the other hand, assuming D.B. Weaver's point of view on mass tourism (more unsustainable) as a continuum of alternative tourism (more sustainable), one can see a more undesirable direction of change from sustainable tourism to unsustainable tourism. Both situations are ilustrated by bilaterally oriented arrows in Figure 2.

A similar conclusion concerning possibilities of occurrance of undesirable direction of change can be drawn after the analysis of three theoretical models of tourism: 1) of tourist area life cycle (TALC) by R.W. Butler (1980); 2) of tourist space by S. Liszewski (1995), and 3) of changes in the natural environment under the influence of tourism by D. Zaręba (2010).

Sustainable Tourism – A Model Approach 9

Fig. 2. Sustainable and unsustainable tourism as a continuum of bi-directional changes

tourism as the one that takes into account the principles of sustainable development.

sustainable tourism as the following formula:

Polish scholars also made an attempt to present the essence of sustainable tourism in a model form. These were M. Durydiwka, A. Kowalczyk & S. Kulczyk (2010). These authors assumed that the conception of sustainable tourism (ST) concerns mainly three types of tourism, i.e.: 1) related to the natural environment values (STnatural.); 2) related to the cultural environment values (STcultural); 3) requiring from tourists certain skills (STqualifying). Taking into account these types of tourism they presented the idea of

A model conception of diverse degrees (stages) of development (functioning) of sustainable tourism, in relation to different (in terms of environment and socio-economics) reception areas was proposed also by C. Hunter (1997, as cited in Mika, 2008). This author, after a contrastive analysis of the position of tourism and the position of sustainable development within diverse areas, distinguished four variants of functioning of tourism within sustainable development. This conception can be graphically illustrated with a graph of decreasing function that indicates relationships between tourism and sustainable development (Figure 4). Controversy in Hunter's model lies in the fact that it excludes the possibility of a wide-scale tourism development that would take into account the principles of sustainable development. Therefore, this model undermines the idea of sustainable

Fig. 1. Sustainable tourism and various forms of tourism – the evolution of approach

The curve of dependences occurring between the number of tourists on a given reception area and the time (Butler), the level of tourist space transformation (Liszewski), and the level of the environment devastation (Zaręba) is very similar. After the analysis of the curve in each model (after simplification) one can distinguish 4 stages of changes in the direction from the state of the original balance to the state of a new balance – in transformed, i.e. naturally devastated, environment (Figure 3).

Fig. 1. Sustainable tourism and various forms of tourism – the evolution of approach

naturally devastated, environment (Figure 3).

The curve of dependences occurring between the number of tourists on a given reception area and the time (Butler), the level of tourist space transformation (Liszewski), and the level of the environment devastation (Zaręba) is very similar. After the analysis of the curve in each model (after simplification) one can distinguish 4 stages of changes in the direction from the state of the original balance to the state of a new balance – in transformed, i.e.

Fig. 2. Sustainable and unsustainable tourism as a continuum of bi-directional changes

A model conception of diverse degrees (stages) of development (functioning) of sustainable tourism, in relation to different (in terms of environment and socio-economics) reception areas was proposed also by C. Hunter (1997, as cited in Mika, 2008). This author, after a contrastive analysis of the position of tourism and the position of sustainable development within diverse areas, distinguished four variants of functioning of tourism within sustainable development. This conception can be graphically illustrated with a graph of decreasing function that indicates relationships between tourism and sustainable development (Figure 4). Controversy in Hunter's model lies in the fact that it excludes the possibility of a wide-scale tourism development that would take into account the principles of sustainable development. Therefore, this model undermines the idea of sustainable tourism as the one that takes into account the principles of sustainable development.

Polish scholars also made an attempt to present the essence of sustainable tourism in a model form. These were M. Durydiwka, A. Kowalczyk & S. Kulczyk (2010). These authors assumed that the conception of sustainable tourism (ST) concerns mainly three types of tourism, i.e.: 1) related to the natural environment values (STnatural.); 2) related to the cultural environment values (STcultural); 3) requiring from tourists certain skills (STqualifying). Taking into account these types of tourism they presented the idea of sustainable tourism as the following formula:

Sustainable Tourism – A Model Approach 11

Fig. 4. Variants of functioning of tourism in sustainable development

The model is presented in the graphic (Figure 5) and descriptive form, through a presentation of: purposes and conditions of its construction, main assumptions that the model is based on, adopted variables, model factors of balance and its disturbance (notation), factors affecting variables, and possibilities and restrictions on using the model.

The purpose of the sustainable tourism model construction is to present in a complete, explicit and as simple as possible form the essence of sustainable tourism in the short-term perspective. The author intended the proposed model, designed as a theoretical construct, to render in the most complete way the ideas of sustainable tourism, and at the same time to be appropriate for teaching and guiding purposes as well as to constitute a theoretical basis for detailed application models. The model is intended to be versatile, i.e. to be applicable in all conditions, on every reception area, for every type of tourism. Another condition, which was required in order to meet all the other criteria, was the necessity to use mathematical function dependencies and notation (explicitness of the model). The simplicity of the form, facilitating understanding of the model, is ensured through minimilization of the number of variables and by the graphic illustration of the model. An additional intention of the author was to take into

**4. Theoretical, short-term model of sustainable tourism** 

**4.1 Purposes and conditions of the model's construction** 

$$\begin{aligned} \text{ST} &= \text{STnatal} + \text{STcultual} + \text{STqualifying} + \\ &+ \text{(STnatal / k \ge ST \cdot collutural / k \ge ST \cdotqualifying / k)} \end{aligned} \tag{1}$$

k – the correction factor.

According to its authors, this formula refers to the holistic conception of sustainable tourism, which means that it should be understood as a combination of various forms of tourism, complemented by common objectives, such as: care for the natural environment, limiting the negative effects for local population, bringing economic benefits to reception areas and meeting the needs of tourists.


Fig. 3. Tourism in the function of time, spatial changes, and environmental changes

According to its authors, this formula refers to the holistic conception of sustainable tourism, which means that it should be understood as a combination of various forms of tourism, complemented by common objectives, such as: care for the natural environment, limiting the negative effects for local population, bringing economic benefits to reception

(1)

Types of tourist space by S. Liszewski (1995)

ST STnatural STcultural STqualifying + STnatural /k x ST cultural /k x STqualifying /k 

k – the correction factor.

Conception

Tourist area life cycle by R. Butler (1980)

IV Consolidation and

Changes in the natural environment (based on: D. Zaręba, 2010)

stagnation New balance Urbanization

I Exploration Original balance Exploration II Introduction Threat Penetration III Development Degradation Colonization

Fig. 3. Tourism in the function of time, spatial changes, and environmental changes

Stage

areas and meeting the needs of tourists.


Fig. 4. Variants of functioning of tourism in sustainable development

#### **4. Theoretical, short-term model of sustainable tourism**

The model is presented in the graphic (Figure 5) and descriptive form, through a presentation of: purposes and conditions of its construction, main assumptions that the model is based on, adopted variables, model factors of balance and its disturbance (notation), factors affecting variables, and possibilities and restrictions on using the model.

#### **4.1 Purposes and conditions of the model's construction**

The purpose of the sustainable tourism model construction is to present in a complete, explicit and as simple as possible form the essence of sustainable tourism in the short-term perspective. The author intended the proposed model, designed as a theoretical construct, to render in the most complete way the ideas of sustainable tourism, and at the same time to be appropriate for teaching and guiding purposes as well as to constitute a theoretical basis for detailed application models. The model is intended to be versatile, i.e. to be applicable in all conditions, on every reception area, for every type of tourism. Another condition, which was required in order to meet all the other criteria, was the necessity to use mathematical function dependencies and notation (explicitness of the model). The simplicity of the form, facilitating understanding of the model, is ensured through minimilization of the number of variables and by the graphic illustration of the model. An additional intention of the author was to take into

Sustainable Tourism – A Model Approach 13

3. The author has also assumed an auxiliary assumption concerning the possibility of occurrence of reverse dependency between the benefits reapt by tourists and the benefits reapt by the local community (presented in the graph as a decreasing function), which in sustainable tourism results in the necessity to seek an 'area' of balance in

fulfiling the needs of both groups of stakeholders (auxiliary model – Figure 6).

already devastated environment.

f(x): y = ax + b; a<0, x>0, y>0

sustainable tourism

BLCmin – minimal benefits of the local community (independent variable)

BLCmax – maximal benefits of the local community (dependent variable)

BSLC&T – sustainability between the benefits of the local community and the benefits of tourists

Fig. 6. Auxiliary model – the benefits of tourists and the benefits of the local community in

BTmin – minimal benefits of tourists (independent variable)

BTmax – maximal benefits of tourists (dependent variable)

BUST – unsustainability of the benefits of tourists

BUSLC – unsustainability of the benefits of the local community

where:

model. For, it is obvious that in a long-term perspective, after exceeding the accepted level of degradation it will not be possible to reap further benefits, at the expense of

consideration the possibility of occurrance of change of independent variables and their influence on dependent variables (the dynamic factor). It allows to observe, and especially to project the effects of these changes, in the context of their consequence for sustainable tourism.

Fig. 5. Theoretical (short-term) model of sustainable tourism

#### **4.2 Assumptions for the sustainable tourism model construction**


At the same time, the accepted level of the degradation of the natural and socio-cultural environments, which includes tourist resources of a given reception area (in the wide sense of tourist potential), cannot be exceeded.

2. It has also been assumed that the increase in (short-term) benefits reapt by tourists and the inhabitants of the areas that they visit – related to developing tourism – results in (in principle) the increase in the level of the degradation of the natural and socio-cultural environments. In this context, the degradation can be treated as a kind of an unavoidable environmental cost that must be borne in connection with developing tourism. This assumption indicates the short-term perspective of functioning of the

consideration the possibility of occurrance of change of independent variables and their influence on dependent variables (the dynamic factor). It allows to observe, and especially to project the effects of these changes, in the context of their consequence for sustainable tourism.

Fig. 5. Theoretical (short-term) model of sustainable tourism

groups of stakeholders, i.e.:

of tourist potential), cannot be exceeded.

reap benefits);

(to reap benefits).

**4.2 Assumptions for the sustainable tourism model construction** 

1. The assumed objective of sustainable tourism on a given tourist reception area has been the striving for the state of balance in fulfiling needs (reaping benefits) of two main

tourists – who visit the tourist reception area in order to fulfil their tourist needs (to

 community inhabiting or working in favour of tourism on the reception area (local population, transactors operating tourists, public authorities) – which agrees on or acts in favour of tourism development, because it acknowledges a chance to fulfil its needs

At the same time, the accepted level of the degradation of the natural and socio-cultural environments, which includes tourist resources of a given reception area (in the wide sense

2. It has also been assumed that the increase in (short-term) benefits reapt by tourists and the inhabitants of the areas that they visit – related to developing tourism – results in (in principle) the increase in the level of the degradation of the natural and socio-cultural environments. In this context, the degradation can be treated as a kind of an unavoidable environmental cost that must be borne in connection with developing tourism. This assumption indicates the short-term perspective of functioning of the model. For, it is obvious that in a long-term perspective, after exceeding the accepted level of degradation it will not be possible to reap further benefits, at the expense of already devastated environment.

3. The author has also assumed an auxiliary assumption concerning the possibility of occurrence of reverse dependency between the benefits reapt by tourists and the benefits reapt by the local community (presented in the graph as a decreasing function), which in sustainable tourism results in the necessity to seek an 'area' of balance in fulfiling the needs of both groups of stakeholders (auxiliary model – Figure 6).

f(x): y = ax + b; a<0, x>0, y>0

where:

BLCmin – minimal benefits of the local community (independent variable)

BTmin – minimal benefits of tourists (independent variable)

BLCmax – maximal benefits of the local community (dependent variable)

BTmax – maximal benefits of tourists (dependent variable)

BSLC&T – sustainability between the benefits of the local community and the benefits of tourists

BUSLC – unsustainability of the benefits of the local community

BUST – unsustainability of the benefits of tourists

Fig. 6. Auxiliary model – the benefits of tourists and the benefits of the local community in sustainable tourism

Sustainable Tourism – A Model Approach 15

2. Max accepted degradation (Dmax – independent variable) of both environments denotes the max level of benfits (Bmax – dependent variable) which can be reapt by tourists and the local population in sustainable tourism, i.e. without causing irreversible

│Dmax│-│Dunav│ = 0;

but: │Dmax│ > 0 /\│Dunav│ > 0

Table 3. Model conditions for sustainable tourism

**4.6 Model disruption of sustainability** 

General conditions Component of environment Component of benefits

│Dmax│-│Dunav│ ≥ 0 │Bmax│-│Bmin│ ≥ 0

│Dunav│ ≤ │Dreal│ ≤ │Dmax│ │Bminn│ ≤ │Breal│ ≤ │Bmax│ Minimal conditions Component of environment Component of benefits

│Dunav│ = │Dreal│ = │Dmax│ │Bmin│ = │Breal│ = │Bmax│

General condition

f (ST)= {x: x € [│Bmin│, │Bmax│]; │Bmax│ – │Bmin│ ≥ 0}

Minimal condition

f(ST) = {x: x = │Bmin│; │Bmax│ - │Bmin│ = 0}

│Dreal│ < │Dmax│ It occurs when the real

(Dmax).

Type of disruption Condition Description

│Breal│ < │Bmin│;

f(USTB) = {x: x € [O, │Bmin│]}

│Bmax│-│Bmin│ = 0;

but: │Bmax│ > 0 /\ │Bmin│ > 0

benefits (Breal) are smaller than the minimal benefits (Bmin). At the same time the level of real degradation (Dreal) is lower than the level of accepted degradation

environmental changes.

Sustainable tourism

Sustainable tourism by components

Function f(ST) – describing the existence

sustainable tourism for both components

Lack of balance

(unsustainability) in the component of benefits, balance

Function f(USTB) – describing

(sustainability) in the component of environment.

the lack of balance (unsustainability) in the component of benefits while

maintaining balance (sustainability) in the component of environment.

of

**4.5 Conditions for sustainable tourism** 

#### **4.3 Explanations for the main model**


#### **4.4 Independent and dependent variables used in the model**

In the model there are two pairs of interelated independent and dependent variables.


Table 2. Independent and dependent variables in the model of the sustainable tourism

1. Min accepted benefits (Bmin – independent variable) reapt by tourists and the community that hosts them; they result in certain unavoidable level of degradation (Dunav – dependent variable) of the natural and antropogenic environments on an analysed tourist reception area.

1. Benefits from tourism – benefits reapt by tourists visiting a given reception area and benefits of the local population (including transactors, public authorities and other

 min accepted benefits (Bmin): denotes the minimal accepted level of fulfiling needs of tourists and local population, beneath which the reapt benefits will be evaluated as insufficient; its size is measured with the numerical value of the Bmin point on the Ox

 max benfits (Bmax): denotes the maximal accepted (in sustainable tourism conditions) level of fulfiling needs of both tourists and local population; its size is measured with

real benefits (Breal): the real level of benefits reapt by tourists and local community in

1a. In the component of benefits there are two basic groups of participants (tourists, local community), which can have opposing interests. In order to take into account the level of balance (sustainability) between the benefits of tourists and the benefits of the local community, as an element of general balance (sustainability), the author has produced an auxiliary model of partitive balance (sustainability) in the benefit component (Figure 6). The assumptions of this model have been transferred to the Ox

2. Costs of tourism development – degradation of the natural and antropogenic (social, cultural, economic) environments on a tourist reception area, resulting from developing

 max accepted degradation (Dmax): denotes the highest accepted in sustainable tourism (i.e. not resulting in irreversible changes) level of degradation of both environments; its size is measured with the numerical value of the Dmax point on the Oy axis of the

 unavoidable degradation (Dunav): denotes the level of unavoidable degradation of both environments resulting from developing toursim; its size is measured with the

 real degradation (Dreal): the real level of degradation of the natural and antropogenic environments occurring on a reception area in relation to tourism developing there.

Independent variables Dependent variables

1. Min accepted benefits (Bmin – independent variable) reapt by tourists and the community that hosts them; they result in certain unavoidable level of degradation (Dunav – dependent variable) of the natural and antropogenic environments on an

numerical value of the Dunav point on the Oy axis of the model graph;

In the model there are two pairs of interelated independent and dependent variables.

Min accepted benefits (Bmin) Unavoidable degradation (Dunav)

Table 2. Independent and dependent variables in the model of the sustainable tourism

**4.4 Independent and dependent variables used in the model** 

Max accepted degradation (Dmax) Max benfits (Bmax)

analysed tourist reception area.

the numerical value of the Bmax point in the Ox axis of the model graph;

**4.3 Explanations for the main model** 

axis of the model graph;

axis of the main model.

tourism:

model graph;

organizations), resulting from development of tourism:

relation to tourism developing on a given area.

2. Max accepted degradation (Dmax – independent variable) of both environments denotes the max level of benfits (Bmax – dependent variable) which can be reapt by tourists and the local population in sustainable tourism, i.e. without causing irreversible environmental changes.


#### **4.5 Conditions for sustainable tourism**

Table 3. Model conditions for sustainable tourism

#### **4.6 Model disruption of sustainability**


Sustainable Tourism – A Model Approach 17

min

B

B f dx

**4.8 Implementation of the model – Possibilities and limitations** 

Dmax point on the Oy axis).

max

will depend on: 1) the resistance of the natural and antropogenic environments to the negative influence of tourism, denoted with the location of the Dmax point on the Oy axis of the model graph (independent variable); and 2) the minimal accepted level of benefits that local population and tourists expect to reap, denoted with the location of the Bmin point on the Ox axis of the graph (independent variable). The model tourism sustainable area will depend on one hand on the willingness of both groups of stakeholders to resign from the short-term benefits that they want to reap from tourism (possibly small numerical value of the Bmin point on the Ox axis), on the other hand on the features of the environment that determine its vulnerability to degradation by tourism (possibly high numerical value of the

1. The implementation of the model for the scientific-educational (explanatory) purposes – the model can be used in order to explain the essence and the principles of sustainable tourism, and especially to determine the interrelations occurring between all the stakeholders of tourism and the natural and antropogenic environments in which tourism is being developed. The construction of the model enables analyses of these interrelations in dynamic hold, which reveals consequences for all the tourism stakeholders induced by a change of independent variables used in the model. Another advantage of the model is its versatility, i.e. the fact that it is applicable in relation to all types of tourism (tourist movement) and reception areas. For, in every situation the same factors (determinants), occurring in the model as independent variables determining framework for the development of sustainable tourism, are taken into account. Also, in all analysed cases the assumed model conditions must be fulfilled. Versatility and explicitness of the model manifest themselves also in the utilization of the graphic way of presenting function dependencies and notation that together define

the main assumptions, interrelations and conditions included in the model.

2. The implementation of the model for the purposes of application – the model can be used in order to find out to what extent will the development of various types of tourism on a given reception area fulfil the principles of sustainable tourism. Particular types of tourism should be analysed both in terms of demand, as a form of tourist movement, and in terms of supply, as corresponding types of tourist products (in the widest sense of this term). Practically, one should make an attempt to construct individual models for each type of tourism. This will be possible after choosing appropriate measures (indices) determining the values of particular variables. After building individual model graphs one will be able to compare the obtained ranges (size) of sustainable tourism, characteristic for particular types of tourism. Results of such an analysis may be especially useful in order to determine the types of tourism preferable for a given area – taking into accaount the conditions of sustainable tourism. It seems that the main barrier affecting negatively the application type of implementation of the proposed model of sustainable tourism can be difficulties related to the quantification of the adopted variables in detailed models. It would be easiest to express time in financial


Table 4. Model disruption of sustainability

#### **4.7 Factors affecting independent variables, as determinants of sustainable tourism**


│Dreal│ > │Dmax│,

f(USTC) = {x: x € [│Bmax│, │D│]}

**4.7 Factors affecting independent variables, as determinants of sustainable tourism**  1. The accepted level of degradation (understood as the highest accepted in sustainable tourism, i.e. not causing irreversible changes, level of degradation of the natural and antropogenic environments) depends on the type of ecosystem and features of the social enrivonment occurring on a tourist reception area. In the natural component low level of accepted degradation is characteristic for natural and close to natural ecosystems that are very vurnerable to external stimuli. In turn, higher level of accepted degradation is characteristic for significantly transformed ecosystems which are not carriers of special natural values. In the antropogenic component, the most vulnerable to degradation will be close, traditional communities that do not maintain lively contacts with the outer world. In such a case, in order to fulfil the sustainable tourism

condition, the accepted degradation level should be as low as possible.

2. The expected minimal level of benefits (taking into account the assumptions of the auxiliary model – Figure 6) that both gropus of tourism stakeholders (tourists and local population) expect to reap on a given reception area depends on their expectations of tourism. Although, the lowest accepted level of benefits reapt by permanent residents will depend on the features of that community, such as: age structure, education level, environmental and cultural awareness, system of values, self-esteem, hitherto quality of life, professional activity, expectations of development of local tourist economy, local authorities and elite activity. As far as tourists are considered, the case is similar. The level of minimal benefits that they expect will depend on socio-cultural features of that collectivity. They will constitute the basis for the tourists' subjective assessment of the local tourist product (including, i.a. values, tourist management, prices). This product will have to meet the needs of tourists enough for the tourists to think that for the price they are ready to pay they will get the minimal accepted level of benefits related to

3. Taking into account the above-mentioned model assumptions, the sustainable tourism

│Breal│ > │Bmin│ It occurs when the real

degradation (Dreal) is bigger

degradation (Dmax). At the same time the real benefits (Breal) are bigger than the minimal benefits (Bmin).

than the accepted

Type of disruption Condition Description

Lack of balance

(unsustainability) in the component of environment while maintaining of balance

(sustainability) in the component of benefits.

the lack of balance (unsustainability) in the component of environment while maintaining balance (sustainability) in the component of benefits.

Function f(USTC) – describing

Table 4. Model disruption of sustainability

tourist trip to that location.

area – presented on the graph as:

min max B B f dx

will depend on: 1) the resistance of the natural and antropogenic environments to the negative influence of tourism, denoted with the location of the Dmax point on the Oy axis of the model graph (independent variable); and 2) the minimal accepted level of benefits that local population and tourists expect to reap, denoted with the location of the Bmin point on the Ox axis of the graph (independent variable). The model tourism sustainable area will depend on one hand on the willingness of both groups of stakeholders to resign from the short-term benefits that they want to reap from tourism (possibly small numerical value of the Bmin point on the Ox axis), on the other hand on the features of the environment that determine its vulnerability to degradation by tourism (possibly high numerical value of the Dmax point on the Oy axis).

#### **4.8 Implementation of the model – Possibilities and limitations**


It seems that the main barrier affecting negatively the application type of implementation of the proposed model of sustainable tourism can be difficulties related to the quantification of the adopted variables in detailed models. It would be easiest to express time in financial

Sustainable Tourism – A Model Approach 19

The article presents the theoretical, short-term model of sustainable tourism. It has been designed basing on the adopted assumptions that define the essence of sustainable tourism. They concern striving for the state of balance between the needs of tourists and the needs of local community, while maintaining the values of the natural and socio-cultural environments that occur on reception areas. In other words, the article means that kind of tourism which is satisfactory for tourists and the local population (including transactors working in favour of tourism) and which does not cause irreversible degradation of the

The model is intended to fulfil the criteria of completeness, versatility, explicitness and simplicity. To that and, the author has used the graphic form of mathematical function and notation. The model constructed in this way can be implemented for explanatoryeducational purposes as well as application purposes (after selecting appropriate indices). The author hopes that the theoretical model of sustainable tourism presented in this article will constitute a complement to the output of the studies of sustainable development in

*Agenda 21* (1992). UN Conference on Environment and Development, Rio de Janeiro

*Development* (1996). WTTC, UNWTO, Earth Council

pp. 5–22, CABI Publishing, , Oxon–New York

*Agenda 21 for the Travel and Tourism Industry: Towards Environmentally Sustainable* 

*Berlin Declaration* (1997). International Conference of Environment Ministers on Biodiversity

Blamey R.K. (2001). *Principles of ecotourism*. In: *The encyclopedia of ecotourism*, Weaver (ed.),

Boo E. (1990). *Ecotourism: the potentials and pitfalls, Country case studies*, World Wildlife Fund,

Butler R.W. (1980). The Concept of a Tourist Area Cycle of Evolution: Implication for the

Butler R.W. (1999). Sustainable tourism: a state-of-the-art review, *Tourism Geographies*, 1, 1,

Butler R.W. (2005). Problemy miejsc recepcji turystycznej ze zrównoważonym rozwojem, In:

Cater E., Lowman G. (ed.), (1994) *Ecotourism: a sustainable option?*, Published in association

Ceballos-Lescuráin H. (1987). The future of ecotourism*, Mexico Journal*, January 17, pp. 13–14 *Charter for Sustainable Tourism* (1995). World Conference on Sustainable Tourism, Lanzarotte Clarke J. (1997). A framework of approaches to sustainable tourism, *Journal of Sustainable* 

Durydiwka M., Kowalczyk A. & Kulczyk S. (2010). Definicja i zakres pojęcia 'turystyka

Farrel B.H., Twinning-Ward L. (2004). Reconceptualization Tourism, *Annals of Tourism* 

Fennel D.A. (1999). *Ecotourism. An Introduction*, Routledge, London–New York

zrównoważona', In: *Turystyka zrównoważona*, Kowalczyk (ed.), pp. 21–43,

*Turystyka w badaniach naukowych*, Winiarski, Alejziak, (ed.) pp. 35–48, AWF w

Managment of Resources*, The Canadian Geographer*, 25, pp. 151–170

Krakowie, Wyższa Szkoła Informatyki i Zarządzania w Rzeszowie

with the Royal Geographical Society, Wiley, Chichester, New York

natural and antropogenic environments.

tourism, especially in their theoretical aspects.

and Tourism, Berlin

*Tourism*, 12, 6, pp. 224–233

*Research*, 31, 2, pp. 274–295

Wydawnictwo Naukowe PWN, Warszawa

Washington

pp. 7–25

**6. References** 

values, but this may not always be possible and appropriate. It is also possible to use other indices published i.a. in the publications of the United Nations World Tourism Organization and other organizations (programmes), such as 'Making Tourism More Sustainable' (2005 as cited in Kowalczyk, 2010; *The VISIT initiative*, 2004). When selecting indices one should make sure that they fulfil the criteria for the ideal index of sustainable development as much as possible. These criteria are: 1) simplicity of identification and measurement, 2) natural and/or social, cultural, economic, political significance, 3) stability, 4) simplicity and low cost of measurement, 5) sensitivity and quickness of reaction to changes, 6) intelligibility and explicitness (based on Hughes, 2002, as cited in Kowalczyk, 2010).

At the same time, one should not forget that the variables used in the main model are internally diverse. One group includes netto benefits reapt by both tourists and local population (including transactors), while the other concerns total environmental costs manifesting themselves in the degradation of the natural and antropological environments. In order to determine values of these variables one should consider each of their elements individually and assume an appropriate breakpoint (e.g. according to the assumptions made in the auxiliary model concerning the component of benefits – Figure 6.) One can also consider the solution of application simplication of the entire model. In such a case only one (breakpoint) component of a given variable would be taken to quantification. E.g. for the independent variable 'required benefits' such an operation would include defining the minimal accepted level of benefits reapt by local population and then treating it as the assumed breakpoint level (with the underlying assumption that sole appearance of tourists on a given area testifies of the fact that tourists reap their accepted level of benefits.) The same operation can be used while dealing with the other variable, making the choice of its component dependent of the type of reception area (for sure, for the areas naturally valuable it should be the maximal, accepted for given ecosystems, level of natural environment degradation.)

Another significant problem in the practical implementation of the model is to find the appropriate functional interrelation between assumed variables (costs vs. benefits) in the detailed models, both for breakpoint and for intermediate values, which will decide what the function of sustainable tourism for a given type of tourism on a given reception area will look like. In the main model only the general rule of interrelation between costs and tourist benefits (presented in the graph as an increasing function) was taken into account. It is the ability to determine the shape of the curve through defining the values of variables (breakpoint and intermediate) for various types of tourist movement on a given reception area that will allow the use of the assumptions of the main model on a wider scale for the purpose of application.

Both above-mentioned problems (quantification of variables and finding functional interrelations between them) are important in terms of the application use of the presented model, since they directly affect the ability to define the model size of sustainable tourism.

#### **5. Summary**

Because of the fact that the sustainable tourism literature is dominated by the descriptive style and because it is multidirectional, which leads to ambiguities in defining the phenomenon, the author has made an attempt to construct a theoretical model of sustainable tourism which would render both its essence and main features.

values, but this may not always be possible and appropriate. It is also possible to use other indices published i.a. in the publications of the United Nations World Tourism Organization and other organizations (programmes), such as 'Making Tourism More Sustainable' (2005 as cited in Kowalczyk, 2010; *The VISIT initiative*, 2004). When selecting indices one should make sure that they fulfil the criteria for the ideal index of sustainable development as much as possible. These criteria are: 1) simplicity of identification and measurement, 2) natural and/or social, cultural, economic, political significance, 3) stability, 4) simplicity and low cost of measurement, 5) sensitivity and quickness of reaction to changes, 6) intelligibility

At the same time, one should not forget that the variables used in the main model are internally diverse. One group includes netto benefits reapt by both tourists and local population (including transactors), while the other concerns total environmental costs manifesting themselves in the degradation of the natural and antropological environments. In order to determine values of these variables one should consider each of their elements individually and assume an appropriate breakpoint (e.g. according to the assumptions made in the auxiliary model concerning the component of benefits – Figure 6.) One can also consider the solution of application simplication of the entire model. In such a case only one (breakpoint) component of a given variable would be taken to quantification. E.g. for the independent variable 'required benefits' such an operation would include defining the minimal accepted level of benefits reapt by local population and then treating it as the assumed breakpoint level (with the underlying assumption that sole appearance of tourists on a given area testifies of the fact that tourists reap their accepted level of benefits.) The same operation can be used while dealing with the other variable, making the choice of its component dependent of the type of reception area (for sure, for the areas naturally valuable it should be the maximal, accepted for given

Another significant problem in the practical implementation of the model is to find the appropriate functional interrelation between assumed variables (costs vs. benefits) in the detailed models, both for breakpoint and for intermediate values, which will decide what the function of sustainable tourism for a given type of tourism on a given reception area will look like. In the main model only the general rule of interrelation between costs and tourist benefits (presented in the graph as an increasing function) was taken into account. It is the ability to determine the shape of the curve through defining the values of variables (breakpoint and intermediate) for various types of tourist movement on a given reception area that will allow the use of the assumptions of the main model on a wider scale for the

Both above-mentioned problems (quantification of variables and finding functional interrelations between them) are important in terms of the application use of the presented model, since they directly affect the ability to define the model size of sustainable tourism.

Because of the fact that the sustainable tourism literature is dominated by the descriptive style and because it is multidirectional, which leads to ambiguities in defining the phenomenon, the author has made an attempt to construct a theoretical model of

sustainable tourism which would render both its essence and main features.

and explicitness (based on Hughes, 2002, as cited in Kowalczyk, 2010).

ecosystems, level of natural environment degradation.)

purpose of application.

**5. Summary** 

The article presents the theoretical, short-term model of sustainable tourism. It has been designed basing on the adopted assumptions that define the essence of sustainable tourism. They concern striving for the state of balance between the needs of tourists and the needs of local community, while maintaining the values of the natural and socio-cultural environments that occur on reception areas. In other words, the article means that kind of tourism which is satisfactory for tourists and the local population (including transactors working in favour of tourism) and which does not cause irreversible degradation of the natural and antropogenic environments.

The model is intended to fulfil the criteria of completeness, versatility, explicitness and simplicity. To that and, the author has used the graphic form of mathematical function and notation. The model constructed in this way can be implemented for explanatoryeducational purposes as well as application purposes (after selecting appropriate indices). The author hopes that the theoretical model of sustainable tourism presented in this article will constitute a complement to the output of the studies of sustainable development in tourism, especially in their theoretical aspects.

#### **6. References**

*Agenda 21* (1992). UN Conference on Environment and Development, Rio de Janeiro


Ceballos-Lescuráin H. (1987). The future of ecotourism*, Mexico Journal*, January 17, pp. 13–14


**2** 

Diana Târnăveanu

*Romania* 

*West University of Timişoara* 

*Faculty of Economics and Business Administration* 

*Department of Informatics and Economic Statistics, Timişoara* 

**Knowledge-Based Decisions in Tourism** 

"The world faces mounting changes and challenges which call for innovative strategies and policies. Governments, business and civil society need to devote attention to knowledge management in tourism, to better understand and act upon the forces shaping today's world, especially on the critical issues of development, climate change and governance" said

In the past century, economic sciences have known an explosive evolution, passing from an intuitive, fact-based analysis to an abstract one, based on multi-disciplinary and complex theoretic constructions. It is the era of applying scientific mathematical methods as instruments of argumentation and decision, passing from intuitive axioms to more

In a competitive economy, the success of an organization depends decisively on the quality of their managerial decisions. Alongside the development of business information systems, the decision making process implies a large volume of data and a complex process of analysis and synthesis. This information gathering, processing and analyzing capability

In tourism, modern organizations are confronted by an ever increasing pressure to find new ways to compete effectively in a dynamic global market. Many are turning to e-commerce and virtual structures, such as virtual organizations and virtual team structures, to improve organizational agility and expand into the global market (Baggio&Caporello, 2005). Others adopted knowledge-based tourism business-to-business (B2B) communities solutions, requiring the adoption of a multidimensional, multilevel perspective on system design that incorporates knowledge creation and transformation processes and takes organizational stages of effective technology use into consideration (Gretzel&Fesenmaier, 2004). A recent paper proposes a model of a Knowledge-based System that makes it possible to evaluate an organization at a Knowledge Management Capability Assessment Maturity Level (Andrade, et al., 2010). Contemporary Information and Communication Technologies (ICT) increase

Among the great variety of applications developed for the tourism sector, Decision Support Systems (DSS) can play a fundamental role for their capacity to give organizations the

needed for the decisional process exceeds human capacity by a great margin.

**1. Introduction** 

formalized ones.

UNWTO Secretary-General, Taleb Rifai.

efficiency, reduce costs, and improve customer care.

*Global Codes of Ethics for Tourism* (1999). UNWTO, Santiago de Chile

*Global Sustainable Tourism Criteria* (2008). UNEP, UNWTO, Rainforest Alliance, Barcelona

Hughes G. (2002). Environmental indicators, *Annals of Tourism Research*, 29, 2, pp. 457–477


### **Knowledge-Based Decisions in Tourism**

#### Diana Târnăveanu

*West University of Timişoara Faculty of Economics and Business Administration Department of Informatics and Economic Statistics, Timişoara Romania* 

#### **1. Introduction**

20 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

*Global Sustainable Tourism Criteria* (2008). UNEP, UNWTO, Rainforest Alliance, Barcelona Hughes G. (2002). Environmental indicators, *Annals of Tourism Research*, 29, 2, pp. 457–477 Hunter C. (1997). Sustainable tourism as an adaptive paradigm, *Annals of Tourism Research*,

Kowalczyk A. (ed.), (2010). *Turystyka zrównoważona*, Wydawnictwo Naukowe PWN,

Krippendorf J. (1986). Tourism in the system of industrial society, *Annals of Tourism Research*,

Krippendorf J., Zimmer P. & Glauber H. (1988). *Für einen anderen Tourismus, Problemen-*

Lanfant M.-F., Graburn N. (1992). International tourism reconsidered: the principles of the

*Making tourism more sustainable. A guide for policy makers*. (2005). United Nations

Meadows D.H., Meadows D.L., Randers J. & Behrens W.W. III. (1972). *Limits to Growth*,

Mika M. (2008). Sposoby ograniczenia negatywnego wpływu turystyki, In: *Turystyka*, Kurek

*Nasza wspólna przyszłość* (1991). Raport Światowej Komisji ds. Środowiska i Rozwoju, PWE,

Niezgoda A. (2006). *Obszar recepcji turystycznej w warunkach rozwoju zrównoważonego*,

*Rio Declaration on Environment and Development* (1992). UN Conference on Environment and

*The VISIT initiative. Tourism eco-labelling in Europe – moving the market towards sustainability.*

Weaver D.B. (2001). Ecotourism in the context of other tourism types, In: *The encyclopedia of ecotourism*, Weaver (ed.), CABI Publishing, Oxon–New York, pp. 73–83

alternative, In: *Tourism altenatives: potentials and problems in the development of tourism*, Smith, Eadington (ed.), University of Pennsylvania Press, Philadelphia, pp.

*Global Codes of Ethics for Tourism* (1999). UNWTO, Santiago de Chile

*Perspectiven-Ratschlage*, Fischer Verl., Frankfurt am Main

Liszewski S. (1995). Przestrzeń turystyczna, *Turyzm*, 5, 2. Uniwersytet Łódzki

(ed.), pp. 471–482, Wydawnictwo Naukowe PWN, Warszawa

*Our Common Future* (1987). United Nations Conference on the Human Environment

*Sustainable development of tourism. Conceptual definitions* (2004). UNWTO, Madrid

Zaręba D. (2010). *Ekoturystyka*, Wydawnictwo Naukowe PWN, Warszawa

Environment Programme, World Tourism Organisation

Wydawnictwo Akademii Ekonomicznej w Poznaniu

24, 4, pp. 850–867

13, 4, pp. 517–532

Universe Books

Development, Rio de Janeiro

Thant U. (1969). *Man and his environment*, UN

(2004). ECEAT, ECOTRANS

Warszawa

Warszawa

88–112

"The world faces mounting changes and challenges which call for innovative strategies and policies. Governments, business and civil society need to devote attention to knowledge management in tourism, to better understand and act upon the forces shaping today's world, especially on the critical issues of development, climate change and governance" said UNWTO Secretary-General, Taleb Rifai.

In the past century, economic sciences have known an explosive evolution, passing from an intuitive, fact-based analysis to an abstract one, based on multi-disciplinary and complex theoretic constructions. It is the era of applying scientific mathematical methods as instruments of argumentation and decision, passing from intuitive axioms to more formalized ones.

In a competitive economy, the success of an organization depends decisively on the quality of their managerial decisions. Alongside the development of business information systems, the decision making process implies a large volume of data and a complex process of analysis and synthesis. This information gathering, processing and analyzing capability needed for the decisional process exceeds human capacity by a great margin.

In tourism, modern organizations are confronted by an ever increasing pressure to find new ways to compete effectively in a dynamic global market. Many are turning to e-commerce and virtual structures, such as virtual organizations and virtual team structures, to improve organizational agility and expand into the global market (Baggio&Caporello, 2005). Others adopted knowledge-based tourism business-to-business (B2B) communities solutions, requiring the adoption of a multidimensional, multilevel perspective on system design that incorporates knowledge creation and transformation processes and takes organizational stages of effective technology use into consideration (Gretzel&Fesenmaier, 2004). A recent paper proposes a model of a Knowledge-based System that makes it possible to evaluate an organization at a Knowledge Management Capability Assessment Maturity Level (Andrade, et al., 2010). Contemporary Information and Communication Technologies (ICT) increase efficiency, reduce costs, and improve customer care.

Among the great variety of applications developed for the tourism sector, Decision Support Systems (DSS) can play a fundamental role for their capacity to give organizations the

Knowledge-Based Decisions in Tourism 23

of that organization, adapting to changing enrivonments and increasing the competence of the organization (Niculescu, 2009, Scorta, 2009, as cited in Muntean&Târnăveanu, 2009b). The study and practice of knowledge management has grown rapidly since the 90's, driven by social, economic, and technological trends. Tourism has been slow in adopting this approach due to not only a lack of gearing between researchers and tourism, but also to a "hostile" knowledge adoption environment (Cooper, 2006). The acquisition of this approach would close the gap and also provide both insights and potential applications

**Epistemology** (knowledge theory) is a part of Gnosticism and studies the human knowledge in different sciences; it is a theory of scientific knowledge. Its purpose is the study of knowledge nature, structure and origin, whereas cognotics identifies the cognitive structures and the processes that influence human performance and their embedment in

**Knowledge** is the basic concept in knowledge management. To better understand the concept of knowledge we will present the concepts of data and information, both of which

**Data** can be considered rough facts than can be processed in different types of information. The most important problems are related to the volume and the nature of information. Without **logic** and **reasoning**, data can be completely useless. Therefore quantity is not a determining factor, even if without data an organization can't exist. Most often data is obtained by measuring and observing the system's variables. Processing of data implies organizing, sorting, recording and classifying the data in order to perform calculations and

**Information** is data with meaning, usually processed and formatted. Unlike data, information makes understanding relationships possible. They have meaning, purpose and relevance and can be organized and analyzed from a statistical point of view so that the documents, reports and messages make sense. It is important to notice that information has a semantic content that

**Knowledge** represents a group of information, processes and experiences focused on a particular subject. Knowledge refers to the way people understand a specialized activity domain acquired through study and experience. They are based on learning, thinking and familiarizing with a domain inside a department, division or organizations in general. Knowledge derives from information much like the way information derives from data, including aptitudes, training, perception, experience and common sense. Knowledge implies people interacting with reality and confers intelligence to objects that incorporate it,

Concluding on the differences between data, information and knowledge, we can underline

is not dependant on the physical support through which it is transmitted.

most of the time reducing their size and making them easier to handle.

for tourism.

intelligent systems.

make decisions.

the following:

**data** is an objective and static resource;

**2.1 Data, information, knowledge** 

are often confused with knowledge.

possibility to base all the decisions concerning policies, infrastructure development and stakeholder's progress on sound and rational bases (Baggio&Caporello, 2005).

We noticed time and effort are wasted when information is not at hand. The decisional factor could use some help in making decision based on what-if predictions. Hybrid support systems are systems that result from integrating decision support systems (DSS) with other tools and technologies in order to maximize efficiency of the decisional process. Our proposal is a hybrid system which comprises a combination of a model oriented decision support system (spreadsheet based flexible systems, used in what-if predictions) and knowledge-oriented decision support systems (software modules based on knowledge manipulation) to reach these goals.

One of the main elements in building a knowledge-based system is the representation of knowledge, the quality of cognitive systems being essential to the proper function of a decision support system. Steps have been taken in order to transcend the natural language and achieve a symbolic axiomatic language. We believe that the main direction in reconstructing the economic theory is by using logic and semiotic tools (Târnăveanu, 2010b). The decision modelling system built by us uses the intelligence of a decision support system of an invariant nature. We proposed a formalized axiomatic system, using semantic decision trees. To build a generally valid system (a formalized one) it is necessary to create an interconnected system of variables. We divided this complex system into several trees and used production rules theory. We implemented it in Microsoft Excel 2007, using Visual Basic Application – a powerful tool that uses procedures in order to control Excel's objects behaviour.

We believe we found an original way of representing knowledge with mathematical tools (logic and axioms) in order to elaborate the axiomatic formalized system, using methods such as decision trees and transposing them into production rules, as well as building a decision support system capable of intelligent informing. One of the biggest advantages is the systems' flexibility through its invariant nature. The negative aspects are determined by the fixed form of the interconnected system of variables and the lack of implementing it using a web-based solution. We believe this could be a fertile ground for future research.

#### **2. Knowledge and competitive advantage**

Modern organizations worldwide are slowly discovering that controlling knowledge is a major component of strategic growth and creating a competitive organization. In the second part of the last century, tourism has become one of the most important economic activities in the world (Baggio&Caporarello, 2005). UNWTO expects international arrivals to grow by 4% in 2011, slightly above the long-term average. Information and communication technologies have profound implications for the tourism industry. Organizations use knowledge-driven applications in order to respond quickly to continuously changing market conditions and customer needs.

Knowledge based organizations are intelligent, complex and adaptive systems constituted by networked people, knowledge workers and intelligent agents that together are able to combine knowledge and solve problems, creating business value and adapting the function

possibility to base all the decisions concerning policies, infrastructure development and

We noticed time and effort are wasted when information is not at hand. The decisional factor could use some help in making decision based on what-if predictions. Hybrid support systems are systems that result from integrating decision support systems (DSS) with other tools and technologies in order to maximize efficiency of the decisional process. Our proposal is a hybrid system which comprises a combination of a model oriented decision support system (spreadsheet based flexible systems, used in what-if predictions) and knowledge-oriented decision support systems (software modules based on knowledge

One of the main elements in building a knowledge-based system is the representation of knowledge, the quality of cognitive systems being essential to the proper function of a decision support system. Steps have been taken in order to transcend the natural language and achieve a symbolic axiomatic language. We believe that the main direction in reconstructing the economic theory is by using logic and semiotic tools (Târnăveanu, 2010b). The decision modelling system built by us uses the intelligence of a decision support system of an invariant nature. We proposed a formalized axiomatic system, using semantic decision trees. To build a generally valid system (a formalized one) it is necessary to create an interconnected system of variables. We divided this complex system into several trees and used production rules theory. We implemented it in Microsoft Excel 2007, using Visual Basic Application – a powerful tool that uses

We believe we found an original way of representing knowledge with mathematical tools (logic and axioms) in order to elaborate the axiomatic formalized system, using methods such as decision trees and transposing them into production rules, as well as building a decision support system capable of intelligent informing. One of the biggest advantages is the systems' flexibility through its invariant nature. The negative aspects are determined by the fixed form of the interconnected system of variables and the lack of implementing it using a web-based solution. We believe this could be a fertile ground for future

Modern organizations worldwide are slowly discovering that controlling knowledge is a major component of strategic growth and creating a competitive organization. In the second part of the last century, tourism has become one of the most important economic activities in the world (Baggio&Caporarello, 2005). UNWTO expects international arrivals to grow by 4% in 2011, slightly above the long-term average. Information and communication technologies have profound implications for the tourism industry. Organizations use knowledge-driven applications in order to respond quickly to continuously changing

Knowledge based organizations are intelligent, complex and adaptive systems constituted by networked people, knowledge workers and intelligent agents that together are able to combine knowledge and solve problems, creating business value and adapting the function

stakeholder's progress on sound and rational bases (Baggio&Caporello, 2005).

manipulation) to reach these goals.

research.

procedures in order to control Excel's objects behaviour.

**2. Knowledge and competitive advantage** 

market conditions and customer needs.

of that organization, adapting to changing enrivonments and increasing the competence of the organization (Niculescu, 2009, Scorta, 2009, as cited in Muntean&Târnăveanu, 2009b).

The study and practice of knowledge management has grown rapidly since the 90's, driven by social, economic, and technological trends. Tourism has been slow in adopting this approach due to not only a lack of gearing between researchers and tourism, but also to a "hostile" knowledge adoption environment (Cooper, 2006). The acquisition of this approach would close the gap and also provide both insights and potential applications for tourism.

#### **2.1 Data, information, knowledge**

**Epistemology** (knowledge theory) is a part of Gnosticism and studies the human knowledge in different sciences; it is a theory of scientific knowledge. Its purpose is the study of knowledge nature, structure and origin, whereas cognotics identifies the cognitive structures and the processes that influence human performance and their embedment in intelligent systems.

**Knowledge** is the basic concept in knowledge management. To better understand the concept of knowledge we will present the concepts of data and information, both of which are often confused with knowledge.

**Data** can be considered rough facts than can be processed in different types of information. The most important problems are related to the volume and the nature of information. Without **logic** and **reasoning**, data can be completely useless. Therefore quantity is not a determining factor, even if without data an organization can't exist. Most often data is obtained by measuring and observing the system's variables. Processing of data implies organizing, sorting, recording and classifying the data in order to perform calculations and make decisions.

**Information** is data with meaning, usually processed and formatted. Unlike data, information makes understanding relationships possible. They have meaning, purpose and relevance and can be organized and analyzed from a statistical point of view so that the documents, reports and messages make sense. It is important to notice that information has a semantic content that is not dependant on the physical support through which it is transmitted.

**Knowledge** represents a group of information, processes and experiences focused on a particular subject. Knowledge refers to the way people understand a specialized activity domain acquired through study and experience. They are based on learning, thinking and familiarizing with a domain inside a department, division or organizations in general. Knowledge derives from information much like the way information derives from data, including aptitudes, training, perception, experience and common sense. Knowledge implies people interacting with reality and confers intelligence to objects that incorporate it, most of the time reducing their size and making them easier to handle.

Concluding on the differences between data, information and knowledge, we can underline the following:

**data** is an objective and static resource;

Knowledge-Based Decisions in Tourism 25

decisional alternative from many possible ones. These programs are called **Decision Support Systems** (**DSS**) and their results are precise if all hypotheses are well grounded. The second direction is simulating the thought process of the specialist with the help of a **Knowledge Based Systems** (**KBS**). An evolved KBS should incorporate knowledge pieces capable of explaining the economic phenomenon in all its complexity. The evolution of DSS and KBS depends on the evolution of knowledge representation. In the near future, the problem of unconscious knowledge based on intuition and imagination will be of

Researchers concentrated their efforts in finding techniques of representing knowledge as a way to formulate a problem so that it is easy to solve, and the ways to search for the

The fundamental problem of artificial intelligence is not identifying some efficient techniques, but discovering methods to represent vast quantities of knowledge in a form that allows its efficient usage (Goldstein&Pepert as cited in Zaharia, 2003). The techniques of knowledge representation imply specialized manipulation routines that allow intelligent **inference**. Inference mechanisms refer to the most adequate processing of knowledge with the purpose of deriving new knowledge pieces which are most relevant to solving the problem. **Representing knowledge** implies designing a class of data structures to store the information and developing procedures that allow their intelligent manipulation in order to perform inferences. But a data structure is not knowledge, in the same way that an encyclopaedia does not mean knowledge. We can say that a book is a resource full of knowledge, but without a reader to understand it, it is just ink on paper

Most researchers in the artificial intelligence domain start by assuming that **what is needed to be represented is known**, so the programmer's job is to figure out **how to code the** 

The ability of the system to provide useful information depends on the quality and the

There are many knowledge representation methods; they have been developed over time

they permit usage of many programming languages or expert system generators, and

In order to study economic phenomenons and processes, they have to be organized within a logical structure. This organization could be done with the help of trees (Băileşteanu, 2005). A **binary tree** is a data structure in which each node has, at most, two child nodes, usually distinguished as "left" and "right". Nodes with children are parent nodes, and child nodes

volume of knowledge that is owned and can be used in reasoning processes.

the results obtained can be used in reasoning mechanisms.

and they use problem specific aspects. They all have two common characteristics:

great importance.

(Tacu et al., 1998).

the result is stored;

**2.3.1 Binary trees** 

**information** and **the procedures to follow**.

**2.3 Knowledge representation** 

solutions so that the results could be displayed in real-time.


**Meta-knowledge (wisdom)** represents the highest level of abstraction, encompassing vision and the ability to see beyond the horizon. It is the accumulation of a person's professional experience in an activity domain. Some authors refer to meta-knowledge as being synonym with wisdom.

#### **2.2 Knowledge management**

**Knowledge management** is a new organizational model, constantly improving itself, interdisciplinary and based on knowledge [Dănăiaţă et al., 2006]. It is the sum of all activities that have the purpose of discovering, coding, storing, disseminating, improving and using of knowledge inside an organization. Any organization, regardless of the size or activity profile, can increase its success rate if it uses the intellectual resources of its member adequately. Knowledge management exploits human resources in order to fulfil the objectives of the organization. It involves three factors: human resources, technology (IT infrastructure) and organization's processes.

**Globalisation** takes place in the context of the information society and offers the partakers involved in the business environment vast opportunities. Under these conditions, organizations should develop new business models to stay competitive. Therefore, adopting a knowledge management solution in an organization requires different types of software, intelligent and conventional, systems, tools and the usage of adequate techniques. Knowledge management will become the basic activity on all levels of organizations. An important aspect will be that of **moral** usage of knowledge at the global level, so that we will develop a conscious society.

Romania's chance is in developing technologies based on multidisciplinary scientific knowledge. Some of the European Union's objectives are collaboration, attraction of new resources, forming human resources, promotion of technology transfer on regional level among other such milestones. The competitive advantage in the knowledge based economy will be determined by the continuing capacity of acquiring new abilities (for members of the organization and therefore for the organization itself) and the promptness in effectively exploiting the top knowledge acquired.

In the future economy, an economy based on knowledge, intelligent decision support systems will experience an exponential growth. Technological and organizational knowledge will become as important as scientific knowledge. The first direction is developing programs that assist the economic specialist in choosing the most plausible

 **information** is an ensemble of meaningful data and has a value related to the purpose; **knowledge** is subjective, dynamic, created in the context of the social interaction between an individual and the organization, connected to the context and is relative

**information** is smaller than **knowledge**, being a component of knowledge (like pieces

**knowledge** always contains **expertise**, elements that generate solutions, with economic

**Meta-knowledge (wisdom)** represents the highest level of abstraction, encompassing vision and the ability to see beyond the horizon. It is the accumulation of a person's professional experience in an activity domain. Some authors refer to meta-knowledge as being synonym

**Knowledge management** is a new organizational model, constantly improving itself, interdisciplinary and based on knowledge [Dănăiaţă et al., 2006]. It is the sum of all activities that have the purpose of discovering, coding, storing, disseminating, improving and using of knowledge inside an organization. Any organization, regardless of the size or activity profile, can increase its success rate if it uses the intellectual resources of its member adequately. Knowledge management exploits human resources in order to fulfil the objectives of the organization. It involves three factors: human resources, technology (IT

**Globalisation** takes place in the context of the information society and offers the partakers involved in the business environment vast opportunities. Under these conditions, organizations should develop new business models to stay competitive. Therefore, adopting a knowledge management solution in an organization requires different types of software, intelligent and conventional, systems, tools and the usage of adequate techniques. Knowledge management will become the basic activity on all levels of organizations. An important aspect will be that of **moral** usage of knowledge at the global level, so that we will

Romania's chance is in developing technologies based on multidisciplinary scientific knowledge. Some of the European Union's objectives are collaboration, attraction of new resources, forming human resources, promotion of technology transfer on regional level among other such milestones. The competitive advantage in the knowledge based economy will be determined by the continuing capacity of acquiring new abilities (for members of the organization and therefore for the organization itself) and the promptness in effectively

In the future economy, an economy based on knowledge, intelligent decision support systems will experience an exponential growth. Technological and organizational knowledge will become as important as scientific knowledge. The first direction is developing programs that assist the economic specialist in choosing the most plausible

(being derived from the creative capacity of the individual);

**knowledge** has a longer life than **information**, sometimes unlimited.

of puzzle);

substance;

with wisdom.

**2.2 Knowledge management** 

develop a conscious society.

exploiting the top knowledge acquired.

infrastructure) and organization's processes.

**information** differs from **knowledge** through size, nature and intelligence;

decisional alternative from many possible ones. These programs are called **Decision Support Systems** (**DSS**) and their results are precise if all hypotheses are well grounded. The second direction is simulating the thought process of the specialist with the help of a **Knowledge Based Systems** (**KBS**). An evolved KBS should incorporate knowledge pieces capable of explaining the economic phenomenon in all its complexity. The evolution of DSS and KBS depends on the evolution of knowledge representation. In the near future, the problem of unconscious knowledge based on intuition and imagination will be of great importance.

#### **2.3 Knowledge representation**

Researchers concentrated their efforts in finding techniques of representing knowledge as a way to formulate a problem so that it is easy to solve, and the ways to search for the solutions so that the results could be displayed in real-time.

The fundamental problem of artificial intelligence is not identifying some efficient techniques, but discovering methods to represent vast quantities of knowledge in a form that allows its efficient usage (Goldstein&Pepert as cited in Zaharia, 2003). The techniques of knowledge representation imply specialized manipulation routines that allow intelligent **inference**. Inference mechanisms refer to the most adequate processing of knowledge with the purpose of deriving new knowledge pieces which are most relevant to solving the problem. **Representing knowledge** implies designing a class of data structures to store the information and developing procedures that allow their intelligent manipulation in order to perform inferences. But a data structure is not knowledge, in the same way that an encyclopaedia does not mean knowledge. We can say that a book is a resource full of knowledge, but without a reader to understand it, it is just ink on paper (Tacu et al., 1998).

Most researchers in the artificial intelligence domain start by assuming that **what is needed to be represented is known**, so the programmer's job is to figure out **how to code the information** and **the procedures to follow**.

The ability of the system to provide useful information depends on the quality and the volume of knowledge that is owned and can be used in reasoning processes.

There are many knowledge representation methods; they have been developed over time and they use problem specific aspects. They all have two common characteristics:


#### **2.3.1 Binary trees**

In order to study economic phenomenons and processes, they have to be organized within a logical structure. This organization could be done with the help of trees (Băileşteanu, 2005).

A **binary tree** is a data structure in which each node has, at most, two child nodes, usually distinguished as "left" and "right". Nodes with children are parent nodes, and child nodes

Knowledge-Based Decisions in Tourism 27

T1 and T2 are binary trees. The branches of these trees are oriented downwards. T3 is not a binary tree because it has two roots, and there is a node with two predecessors. T4 is not a

The **semantic tree method** is an automatic method of semantic analysis, which consists of determining the logical values of sub formulas of the given formula. It reduces complexity through the elimination of logical constants (truth-functional connectives and quantifiers) and places sub forumulas of a considered formula on branches of a binary tree. The semantic tree method is a very interesting and universal method. It forms an important part

One of the most efficient of the representation methods is called **production rules.** The idea behind this method is to separate the common calculation components with the purpose of

In 1943, E. Post suggested what he called **rewriting rules**, derived from formal languages. Production rules were built based on those rules. Knowledge is based on three fundamental concepts: **facts**, which is the primary information that describes the elements of the considered domain, **rules**, which describe the how facts can be used and **reasoning** 

A **production rule** has two parts: establishing the condition (IF) and the action (THEN). Sometimes an implication symbol ( →) is used to describe a production rule as an equivalent

Condition (premise) action (conclusion) (2)

IF condition (premise) THEN action (conclusion) (1)

binary tree either, because it has a node with two predecessor nodes.

of the mechanization of reasoning (Bondecka-Krzykowska, 2005).

correctly and efficiently handling the processes in which they are involved.

**strategies** or heuristic methods that express the way in which rules can be used.

Fig. 3. Semantic trees T3 and T4

**2.3.2 Production rules** 

of IF-THEN.

or

The general form of a production rule is:

where both conditions and actions are facts.

may contain references to their parents. Any node in the data structure can be reached by starting at root node and repeatedly following references to either the left or right child.

A binary **tree** is a structure T={X,r}, where X is the set of nodes within T, and r is a binary relation within X so that:


The line that links together each node with its successor is called an **arch** of T. A **final node** is a node without successor. The sequence of arches that link the root with a final node is called a **branch** of T.

Fig. 1. Semantic tree T1

We can notice that x is the root of tree T1, y1 is the successor of y and R1, R2 and R3 are the branches of T1 tree (figure 1).

Fig. 2. Semantic tree T2

In figure 2 – x is the root of T2, t is the successors of y and the predecessor of m; and r, n, o, t, s1, s2, s3, s4, u1, u2, u3, u4, z are final nodes of T2; (y, t) in an arch in T2 and R1...Rij are the branches of T2.

may contain references to their parents. Any node in the data structure can be reached by starting at root node and repeatedly following references to either the left or right child.

A binary **tree** is a structure T={X,r}, where X is the set of nodes within T, and r is a binary

1. if x, y X and x r y, then x is called the **predecessor node** of y and y the **successor node**

2. there is exactly one node in T does not have a predecessor. This node is called the **origin**

The line that links together each node with its successor is called an **arch** of T. A **final node** is a node without successor. The sequence of arches that link the root with a final node is

We can notice that x is the root of tree T1, y1 is the successor of y and R1, R2 and R3 are the

In figure 2 – x is the root of T2, t is the successors of y and the predecessor of m; and r, n, o, t, s1, s2, s3, s4, u1, u2, u3, u4, z are final nodes of T2; (y, t) in an arch in T2 and R1...Rij are the

3. each node that is different than T's root has exactly one predecessor.

relation within X so that:

or **root** of T;

called a **branch** of T.

Fig. 1. Semantic tree T1

Fig. 2. Semantic tree T2

branches of T2.

branches of T1 tree (figure 1).

of x;

Fig. 3. Semantic trees T3 and T4

T1 and T2 are binary trees. The branches of these trees are oriented downwards. T3 is not a binary tree because it has two roots, and there is a node with two predecessors. T4 is not a binary tree either, because it has a node with two predecessor nodes.

The **semantic tree method** is an automatic method of semantic analysis, which consists of determining the logical values of sub formulas of the given formula. It reduces complexity through the elimination of logical constants (truth-functional connectives and quantifiers) and places sub forumulas of a considered formula on branches of a binary tree. The semantic tree method is a very interesting and universal method. It forms an important part of the mechanization of reasoning (Bondecka-Krzykowska, 2005).

#### **2.3.2 Production rules**

One of the most efficient of the representation methods is called **production rules.** The idea behind this method is to separate the common calculation components with the purpose of correctly and efficiently handling the processes in which they are involved.

In 1943, E. Post suggested what he called **rewriting rules**, derived from formal languages. Production rules were built based on those rules. Knowledge is based on three fundamental concepts: **facts**, which is the primary information that describes the elements of the considered domain, **rules**, which describe the how facts can be used and **reasoning strategies** or heuristic methods that express the way in which rules can be used.

A **production rule** has two parts: establishing the condition (IF) and the action (THEN). Sometimes an implication symbol ( →) is used to describe a production rule as an equivalent of IF-THEN.

The general form of a production rule is:

$$\text{IF condition (premine) THEN action (conclusion)}\tag{1}$$

or

$$\text{Condition (premine)} \rightarrow \text{action (conclusion)}\tag{2}$$

where both conditions and actions are facts.

(3)

Knowledge-Based Decisions in Tourism 29

We consider that the area of production rules should to be extended in order to create axioms for economic sciences. This fact was suggested by experience when we observed that the production rule sphere is much more extended than what we found in the available literature. From our point of view, even the calculation of an indicator is a production rule. We consider that when axiomatic research focuses on a problem, all the necessary rules for solving the problem should be presented. In this chapter we present a system of production rules that we consider the principal core that exists in all axiomatic systems

The decision and the context of decision making are two key aspects that characterize the utility of the decision models. Data, information and knowledge are used in the decision making process, corroborated with the manifestation of reasoning based on the intelligence

Starting with the five managerial functions; crowning decision as the umbrella above all other managerial functions, we will detail different types of decisions and the utility and

In the managerial practice of an organization, in the context of intense and comprehensive computerization, decisions and decisional processes are conceived and performed more often with a systemic vision. One of the most important characteristics of a successful

**Decision** can be defined as a line of action, consciously chosen from multiple possible

We can outline the following characteristics: it is a volitional act that always has an ending (its purpose is the fulfilment of an objective); it is a conscious thinking process based on evaluation criteria made by an individual or by a software program, but which requires specific knowledge; it is referring to a future state, even if it is based on information from present or past; is the object of all managers, from superior hierarchical organisms to the ones situated at the bottom of the organizational pyramid; it is the mechanism that turns the organization around and assures integration of all efforts in order to fulfil the objectives.

Lately decision is observed as a passing from methods and procedures based on experience,

**Managerial decision** can be defined as the decision that has direct consequences on decisions and actions of at least another person. It is different from the personal decision in that: managerial decision implies at least two persons: the manager that decides and one or more employees that apply in practice the decision; managerial decision has influences at the group level, does not affect the action of just one employee; managerial action

(Băileșteanu&Târnăveanu, 2006).

**3. Decision support systems in tourism** 

and experience of the decisional factor.

importance of each of these decisions.

**3.1 Decision** 

manager is its ability to make **quality decisions**.

alternatives, in view of an objective (Dănăiață et al., 2006).

intuition and empiric methods to methods based on science.

To be **useful**, the decision has to fulfil some requirements:

determines effects at least at the level of an organization department.

A production rule can be interpreted as: if the premise is true (the facts that compose the premise are confirmed or verified by the facts database), then the fact (or facts) from conclusion are also true and can be added to the facts database.

A more general **production rule** can be written as:


where:


As in the definition of information, rules are usually deduced from other rules, so that the action (conclusion) from one rule can be found in the premise of another rule. In this case, the final action will imply rule linking based on reasoning. Splitting knowledge in fragments or knowledge pieces makes the knowledge database to be organized in a modular way, so it can be **easily updated**.

One of the largest **disadvantages** is that while the system accumulates knowledge, its performance diminishes, and the response time grows exponentially (because of the large number of rules accumulated).

Most times, when solving a problem, an expert will use knowledge that supervises the process in obtaining the solution. This is a superior knowledge and makes use of the problem solving domain in order to determine the best way to solve the problem. Its name is meta-knowledge. Meta-knowledge is represented with the help of **meta-rules**. So a metarule represents a rule that describes how other rules can be used. It determines strategies of usage of specific rules within an applicative domain and ir does not establish any conclusions.

A very important issue is the one of the ratio between **relevance** and **precision**. From the general system theory we know that a system divided into a smaller number of sub-systems has greater relevance but lacks precision; whereas adversely, relevance is diminished and precision frows.

A production rule can be interpreted as: if the premise is true (the facts that compose the premise are confirmed or verified by the facts database), then the fact (or facts) from

> Condition 1 Condition 2

Action 1

 Action 1 Action 2

 (3) Action 2

 ... ELSE

...


As in the definition of information, rules are usually deduced from other rules, so that the action (conclusion) from one rule can be found in the premise of another rule. In this case, the final action will imply rule linking based on reasoning. Splitting knowledge in fragments or knowledge pieces makes the knowledge database to be organized in a modular way, so it

One of the largest **disadvantages** is that while the system accumulates knowledge, its performance diminishes, and the response time grows exponentially (because of the large

Most times, when solving a problem, an expert will use knowledge that supervises the process in obtaining the solution. This is a superior knowledge and makes use of the problem solving domain in order to determine the best way to solve the problem. Its name is meta-knowledge. Meta-knowledge is represented with the help of **meta-rules**. So a metarule represents a rule that describes how other rules can be used. It determines strategies of usage of specific rules within an applicative domain and ir does not establish any

A very important issue is the one of the ratio between **relevance** and **precision**. From the general system theory we know that a system divided into a smaller number of sub-systems has greater relevance but lacks precision; whereas adversely, relevance is diminished and

conclusion are also true and can be added to the facts database.

 ... THEN

IF


hypotheses) are false (Andone&Ţugui, 1999).

A more general **production rule** can be written as:

where:

can be **easily updated**.

conclusions.

precision frows.

number of rules accumulated).

We consider that the area of production rules should to be extended in order to create axioms for economic sciences. This fact was suggested by experience when we observed that the production rule sphere is much more extended than what we found in the available literature. From our point of view, even the calculation of an indicator is a production rule. We consider that when axiomatic research focuses on a problem, all the necessary rules for solving the problem should be presented. In this chapter we present a system of production rules that we consider the principal core that exists in all axiomatic systems (Băileșteanu&Târnăveanu, 2006).

#### **3. Decision support systems in tourism**

The decision and the context of decision making are two key aspects that characterize the utility of the decision models. Data, information and knowledge are used in the decision making process, corroborated with the manifestation of reasoning based on the intelligence and experience of the decisional factor.

Starting with the five managerial functions; crowning decision as the umbrella above all other managerial functions, we will detail different types of decisions and the utility and importance of each of these decisions.

In the managerial practice of an organization, in the context of intense and comprehensive computerization, decisions and decisional processes are conceived and performed more often with a systemic vision. One of the most important characteristics of a successful manager is its ability to make **quality decisions**.

#### **3.1 Decision**

(3)

**Decision** can be defined as a line of action, consciously chosen from multiple possible alternatives, in view of an objective (Dănăiață et al., 2006).

We can outline the following characteristics: it is a volitional act that always has an ending (its purpose is the fulfilment of an objective); it is a conscious thinking process based on evaluation criteria made by an individual or by a software program, but which requires specific knowledge; it is referring to a future state, even if it is based on information from present or past; is the object of all managers, from superior hierarchical organisms to the ones situated at the bottom of the organizational pyramid; it is the mechanism that turns the organization around and assures integration of all efforts in order to fulfil the objectives.

Lately decision is observed as a passing from methods and procedures based on experience, intuition and empiric methods to methods based on science.

**Managerial decision** can be defined as the decision that has direct consequences on decisions and actions of at least another person. It is different from the personal decision in that: managerial decision implies at least two persons: the manager that decides and one or more employees that apply in practice the decision; managerial decision has influences at the group level, does not affect the action of just one employee; managerial action determines effects at least at the level of an organization department.

To be **useful**, the decision has to fulfil some requirements:

Knowledge-Based Decisions in Tourism 31

Fig. 4. The three fundamental roles of information systems (Dănăiaţă, et. al., 2007)

common denominator of operations and modern organization management.

In the middle of the 1950's, **Electronic Data Processing** systems appeared, especially in accounting (because it uses large volumes of data). Their main objective was processing information from a specific area. Data, once stored, started to be processed in order to fulfill managerial demands, adding a new role to the Information System. **Management Information Systems** were born – being oriented to giving information to tactical leadership, in the form of reports and other predefined situations (at the beginning of 1970's). Later, they tried to ease the decisional process, taking over a part of the decisional factor's effort, being obvious that predetermined information products didn't properly respond to all of management's needs. So **Decision Support Systems** appeared. The new role of the Information System is to give managers a prompt and interactive support in their processes of decision making. This help was adapted to decisions and decisional styles of managers and to respond to practical problems in the real world. The 9th decade marks an important progress in developing and applying Artificial Intelligence techniques an in **Business Information Systems**. So, in the middle on the 1980's, **Expert Systems** become popular, from which developed at the end of the century **Knowledge Based Systems**, processing human knowledge. Recent systems include intelligent software agents that can be programmed in order to act when the user desires and functions that adapt to his needs, virtual reality application, advanced robotics, natural language processing and a lot of other applications where artificial intelligence eliminates the need of human intervention, allowing personnel to fulfill more complex tasks. These systems can overtake some of the activities from the older systems, being consultants for users and offering professional advice (with a high level of expertise) in some practical areas. In the middle of the 1990's **Enterprise Resource Planning** appeared. This is a strategic information system adapted to an organization that integrates all the aspects of its activity, including planning, production, sales, resource management, customer relationships, financial management, human resources, marketing – in theory, every function of the organization. ERP's main advantage is the common interface for all the computerized organization functions, their full integration and data sharing necessary for a flexible strategic decisional process. Lastly, the Internet, extranet and the booming development of other interconnected networks , have further determined another change in the role of Information Systems. Therefore, Webready Organizations, based on Internet and Trading Global Systems and E-business are the


Decision is a result of information and knowledge processing made by a person or a group of persons that constitute a decisional organism. They have the necessary authority and are in charge of the efficient use of resources in certain situations and are called **deciders** (Filip, 2007). They need information that is supplied in an efficient and pertinent way by the information system.

#### **3.2 Information systems**

Information systems play three fundamental roles in assuring the success of an organization:


In any moment, information systems designed to support the organization's activity and operational processes send and/or receive data from decision support systems or support for strategies related to competitive advantage systems (Figure 4).

Therefore, organizations take constant care of integration of all their information systems, allowing information to travel freely from one system to another, assuring a greater flexibility and a better support than any individual role.

The concept of Information System is used frequently in the day-to-day speech because of the expansion of using calculation systems in economic and social organization activities.

A modern manager has to make decisions based on a large volume of information, so the Information System is used for storing, processing and generating the information necessary in order to sustain decisions.

 to be **scientifically postulated**, to take into account the actual conditions and the environment to which it refers to, to follow the tendencies of economic systems and their laws, to pay attention to the particularities of the organization in which it will be implemented, and all the internal and external information referring to the decisional

 to be **empowered** – the decider should be that entity (individual or collective) who has the legal right or at least the necessary authority. Best decisions are taken by the people closest to the place of action. Only in extreme cases, when necessary information is required or the gravity of the problem surpasses the competence of the decider,

 **correlated** with the previous decisions regarding the same issue – so it will not create confusion and contravene to prior decisions, to integrate with the strategies and policies

 to be **well-timed**– to be taken exactly when the situation imposes its necessity. Managers should solve multiple managerial problems in a very short time due to the rhythm of the organizational changes. Finding a quick solution to the organization problem doesn't imply that the decision is timely. By decisions' **opportunity** we mean

to be presented in a clear and concise form, easy to understand for the person who will

Decision is a result of information and knowledge processing made by a person or a group of persons that constitute a decisional organism. They have the necessary authority and are in charge of the efficient use of resources in certain situations and are called **deciders** (Filip, 2007). They need information that is supplied in an efficient and pertinent way by the

Information systems play three fundamental roles in assuring the success of an

In any moment, information systems designed to support the organization's activity and operational processes send and/or receive data from decision support systems or support

Therefore, organizations take constant care of integration of all their information systems, allowing information to travel freely from one system to another, assuring a greater

The concept of Information System is used frequently in the day-to-day speech because of the expansion of using calculation systems in economic and social organization activities. A modern manager has to make decisions based on a large volume of information, so the Information System is used for storing, processing and generating the information necessary

managers from a superior hierarchical level should step in;

 support the organization's activity and operational processes; decision support systems (for employees and their managers); support for strategies related to competitive advantage.

for strategies related to competitive advantage systems (Figure 4).

flexibility and a better support than any individual role.

to be well **delimited** to avoid misinterpretation;

obtaining the results in useful time;

problem;

of the organization;

perform it.

information system.

organization:

**3.2 Information systems** 

in order to sustain decisions.

Fig. 4. The three fundamental roles of information systems (Dănăiaţă, et. al., 2007)

In the middle of the 1950's, **Electronic Data Processing** systems appeared, especially in accounting (because it uses large volumes of data). Their main objective was processing information from a specific area. Data, once stored, started to be processed in order to fulfill managerial demands, adding a new role to the Information System. **Management Information Systems** were born – being oriented to giving information to tactical leadership, in the form of reports and other predefined situations (at the beginning of 1970's). Later, they tried to ease the decisional process, taking over a part of the decisional factor's effort, being obvious that predetermined information products didn't properly respond to all of management's needs. So **Decision Support Systems** appeared. The new role of the Information System is to give managers a prompt and interactive support in their processes of decision making. This help was adapted to decisions and decisional styles of managers and to respond to practical problems in the real world. The 9th decade marks an important progress in developing and applying Artificial Intelligence techniques an in **Business Information Systems**. So, in the middle on the 1980's, **Expert Systems** become popular, from which developed at the end of the century **Knowledge Based Systems**, processing human knowledge. Recent systems include intelligent software agents that can be programmed in order to act when the user desires and functions that adapt to his needs, virtual reality application, advanced robotics, natural language processing and a lot of other applications where artificial intelligence eliminates the need of human intervention, allowing personnel to fulfill more complex tasks. These systems can overtake some of the activities from the older systems, being consultants for users and offering professional advice (with a high level of expertise) in some practical areas. In the middle of the 1990's **Enterprise Resource Planning** appeared. This is a strategic information system adapted to an organization that integrates all the aspects of its activity, including planning, production, sales, resource management, customer relationships, financial management, human resources, marketing – in theory, every function of the organization. ERP's main advantage is the common interface for all the computerized organization functions, their full integration and data sharing necessary for a flexible strategic decisional process. Lastly, the Internet, extranet and the booming development of other interconnected networks , have further determined another change in the role of Information Systems. Therefore, Webready Organizations, based on Internet and Trading Global Systems and E-business are the common denominator of operations and modern organization management.

Knowledge-Based Decisions in Tourism 33

to constantly accumulate new knowledge necessary for developing, analysing and

For 30 years, researchers and IT specialists have studied and built a great variety of systems that offer decisional support. Lately, new concepts have emerged, such as business intelligence, on-line analytical processing, knowledge management and technologies such as

 the quality of decisions (the solution is a result of deep analysis, based on analytical models, considering a large number of alternatives in a short period of time); improvement of individual decisional abilities: learning new concepts and methods, deeper understanding of the phenomenon, the transfer of knowledge from costly or

better productivity based on better time-management (the period of time in which a

the lack of human qualities such as: creativity, intuition, imagination, sense of

depending on the cost allocations, the hardware resources can be limited or of

can't solve randomly generated problems – it has a specific purpose, with a restricted

The perception of Romania as a tourist destination is unclear; it does not enjoy a good reputation as an alluring trusting destination for occasional tourists. The re-launching of tourism in Romania as a tourist destination and the attraction of a larger number of foreign tourists could bring supplementary benefits, but would require many necessary changes, in

We found a good example in a paper that presents the main capabilities of a Customer Relationships Management software developed and applied for the customers' portfolio of a Romanian hotel. The multidimensional analysis of the sales applied to the information

 compatibility issues can appear when integrating it in the global informatics system; confusion and differences can appear in the significance of some terms due to cultural

domain and solves a well-defined and delimited range of problems;

Cloud Computing, taking the theory of decision support system to a new level.

From the advantages of using a Decision Support System we underline:

perfecting itself;

**3.3.2 Benefits and limitations** 

cost reduction;

unavailable deciders (experts);

decision is made is shortened); better client and employee satisfaction. From the limitation, we took into account:

responsibility, self-preservation instincts;

insufficient or badly structured documentation.

the tourism manager's opinion (Cândea et al, 2009).

**3.4 Decision support systems in tourism** 

 improved communications; objectivity and impartiality;

insufficient quality;

differences;

to embed both information and models.

#### **3.3 Decision support systems**

The concept of Decision Support Systems (DSS) was defined at the end of the 60's, when everybody used computers without the help of specialists. It defines any information technology focused on supporting the decision process (Târnăveanu, 2010b).

Herbert Simon considered that the main problem in management is organizing the decision making systems on different levels and decisional cores, acknowledging that organizational problems depend on the quality of the relationship between cores, of the pertinence of the established objectives, on the transmitted information and the strong convergence of the behaviours (as cited in Harmon&King, 1992).

Developing support information systems for leaders was determined and favoured by the conjugated action of many influential factors (Filip, 2007): changes in the decision-making environment, acknowledgement of the limits of human deciders, the shape of the behaviour of decisional assistants, the developing of a set of tools specific to decision support and the transposing of these tools into commercial computer products, the evolution of the concept of design for management information systems, information technology and progress in communication, specially the extended use of the Internet and the experience gained from using Information Systems created for decision support.

#### **3.3.1 Characteristics and requirements**

At the organizational level, the impact of new information technology affected the most important area of managerial activity: the decision-making process.

**A Decision Support System** is an information system based on a set of procedures for data processing and reasoning, with the objective of helping the manager in the process of decision-making, coupling intellectual individual resources with computer capabilities. The **objective** of a DSS is to support decisions for all management areas: strategic planning, managerial control, operational control, etc. Its aim is to decrease the effect of the limits and restrictions of the decider through computerized implementations of some of the decision support functions.

We will present the ideal model, defined by a set of characteristics and requirements (Turban as cited in Shahua&Salvolainen, 1994):


The concept of Decision Support Systems (DSS) was defined at the end of the 60's, when everybody used computers without the help of specialists. It defines any information

Herbert Simon considered that the main problem in management is organizing the decision making systems on different levels and decisional cores, acknowledging that organizational problems depend on the quality of the relationship between cores, of the pertinence of the established objectives, on the transmitted information and the strong convergence of the

Developing support information systems for leaders was determined and favoured by the conjugated action of many influential factors (Filip, 2007): changes in the decision-making environment, acknowledgement of the limits of human deciders, the shape of the behaviour of decisional assistants, the developing of a set of tools specific to decision support and the transposing of these tools into commercial computer products, the evolution of the concept of design for management information systems, information technology and progress in communication, specially the extended use of the Internet and the experience gained from

At the organizational level, the impact of new information technology affected the most

**A Decision Support System** is an information system based on a set of procedures for data processing and reasoning, with the objective of helping the manager in the process of decision-making, coupling intellectual individual resources with computer capabilities. The **objective** of a DSS is to support decisions for all management areas: strategic planning, managerial control, operational control, etc. Its aim is to decrease the effect of the limits and restrictions of the decider through computerized implementations of some of the decision

We will present the ideal model, defined by a set of characteristics and requirements

to solve manager's problems when dealing with weakly structured or unstructured

to offer support by combining reasoning and human judgment with computer

technology focused on supporting the decision process (Târnăveanu, 2010b).

**3.3 Decision support systems** 

behaviours (as cited in Harmon&King, 1992).

**3.3.1 Characteristics and requirements** 

(Turban as cited in Shahua&Salvolainen, 1994):

to support individual and group decisions;

to assure total control for the human factor;

to assist all the managerial levels within an organization;

 to combine modules and analytical techniques with traditional functions; to have a user-friendly interface, interactive communication with user; to facilitate learning processes– offering new ways to interpret information;

to be prompt, accurate, clear and to reduce organization's costs;

support functions.

data;

processing;

to be adaptable and flexible;

using Information Systems created for decision support.

important area of managerial activity: the decision-making process.


For 30 years, researchers and IT specialists have studied and built a great variety of systems that offer decisional support. Lately, new concepts have emerged, such as business intelligence, on-line analytical processing, knowledge management and technologies such as Cloud Computing, taking the theory of decision support system to a new level.

#### **3.3.2 Benefits and limitations**

From the advantages of using a Decision Support System we underline:


From the limitation, we took into account:


#### **3.4 Decision support systems in tourism**

The perception of Romania as a tourist destination is unclear; it does not enjoy a good reputation as an alluring trusting destination for occasional tourists. The re-launching of tourism in Romania as a tourist destination and the attraction of a larger number of foreign tourists could bring supplementary benefits, but would require many necessary changes, in the tourism manager's opinion (Cândea et al, 2009).

We found a good example in a paper that presents the main capabilities of a Customer Relationships Management software developed and applied for the customers' portfolio of a Romanian hotel. The multidimensional analysis of the sales applied to the information

Knowledge-Based Decisions in Tourism 35

A marketing decision support system (MDSS) can be of particular importance as it supports organizations in collecting, storing, processing, and disseminating information and the decision-making process by providing forecasts and decision models. Insights into a successful implementation of a MDSS in tourism can be found in the literature (Wöber, 2003). He created TourMIS, an on-line accessible decision support tool for tourism and hospitability management which has been successfully used by more than

From another point of view, the acquisition of knowledge management level may imply a considerable amount of audits. Another article proposes a Knowledge-Based System that makes it possible to evaluate an organization at a Knowledge Management Capability Assessment maturity level. It is very interesting to minimize the cost by paying only for the

Operators in tourism management, compared to other management sectors, are confronted with a vast field of complex aims, requiring different plans of action. The major reason for the poor application of management science is insufficient education of practitioners and the inadequacy of problem solving features of standard software solutions. We consider the development of simple, affordable programs, downloadable for every tourism manager, is the first step in a new era of dialog between research and practice. We noticed different approaches in the literature, all having their benefits and

It is crucial to design and implement Decision Support Systems to assist the manager because of the large quantities of diverse data stored in an organization. For a manager, informatics and the use of information technologies always means formalizing routine activities, those laws of existence and manifestation that can be described. The "casualty" fact is transformed into one that is "standardized", elaborating behavioural conducts possible to use depending of the specificity of the situation occurred. The importance of interpretation is vital, from the information dimension to the strategic one. Information technologies are applied, separately and together, in management and decision modelling. They offer modelling instruments being able to automate the processes. The use of the decision and the context of decision making are two key aspects that characterise the utility of the decision models. In the decision making process are used data, information and knowledge corroborated with the manifestation of reasoning stated by the intelligence and experience of the decisional factor. Artificial intelligence proved its applicability using specific technologies such as expert systems (capable of offering expertise in a specific knowledge domain) and decision support systems (a system that brings together the intellectual resources of a person with the capabilities of a computerized system in order to

We will present an implementation of decision support systems. Based on the knowledge provided of the expert and some historical data, we used binary trees in order to build a formalized axiomatic system. The axioms were transposed into production rules, as

**3.5 An example of a decision support system implementation in tourism** 

1000 users for three years.

some disadvantages.

improve the quality of the decisions).

modules of the decision support system.

truly indispensable authors (Andrade et.al, 2010).

about customers stored in the software's database using OLAP (On-Line Analytical Processing) technique provides a real support for the marketing managers' decision making process. By testing the functions of that software, they revealed the possibility to create a personalized CRM strategy, to determine customers' profitability and to determine the best offer positioning, taking into account the distribution of sales according to the most important segmentation criteria, using OLAP (Micu et al., 2009).

Information and communication technologies have profound implications for the tourism industry. They are being used extensively in a great variety of functions and acount for innumerable applications. Among these, Decision Support Systems can play a fundamental role for their capacity to give organizations and people managing tourist destinations the possibility to base all of the decisions concerning policies, infrastructure development and stakeholders' progress on sound and rational bases. We found a paper that presents an overview of DSS usage in tourism management organizations and portrays a general framework for the design of an effective practical implementation (Baggio&Caporarello, 2004).

Another project (SFIDA) –funded by the European Commission within LIFE – Environment Programme and co-financed by DG Environmental Quality of Regione Lombardia (Italy) has as a main objective to develop a Decision Support System suited to integrate environmental concerns into the definition of a plan for sustainable tourism for three municipalities located close to Lake Garda. The DSS is used to generate information and stimulate participation, making the decision transparent, repeatable and participatory. The components of the DSS support several phases of the planning process, including the environmental and socio-economic analysis, the definition of the plan procedure, the impact representation, the evaluation and comparison of the alternatives, and the management of the conflict among decision-makers (Laniado, et.al, 2004).

One of the articles presents the Illinois Tourism Network (ITN) as an example of interorganizational, knowledge-based tourism information system/community that successfully integrated the management of information and knowledge flows in a way that appeals to tourism organizations in different stages of effective technology use and fosters capacity building among community members (Gretzel&Fesenmaier, 2004).

Another paper presents a Fuzzy based decision support system for E-Tourism investment risk analysis. In general terms, E-tourism is the use of information and communication technology (ICT) in tourism which may allow operating tourism in least variable cost, least time and increasing work efficiency. To demonstrate the effectiveness of the system, factors like investment, human IT skills, E-tourism infrastructure and stability of the regions are considered. (Paudel&Hossain).

Cause and effect analysis influences the effectiveness of decision-making and the consumer behaviour. The complex relationship between cause and effect as well as the fuzzy nature of human life make the cause and effect analysis difficult. This research applies to fuzzy DEMATEL method for group decision-making to gather group ideas and analyze the cause and effect relationship of complex problems in a fuzzy environment. An empirical study applies to the fuzzy DEMATEL method in the service quality of Taiwanese leisure farms. This study used purpose sampling, a total of 215 valid instruments collected from Beijing tourists' perception on service quality (Lin et al., 2009).

about customers stored in the software's database using OLAP (On-Line Analytical Processing) technique provides a real support for the marketing managers' decision making process. By testing the functions of that software, they revealed the possibility to create a personalized CRM strategy, to determine customers' profitability and to determine the best offer positioning, taking into account the distribution of sales according to the most

Information and communication technologies have profound implications for the tourism industry. They are being used extensively in a great variety of functions and acount for innumerable applications. Among these, Decision Support Systems can play a fundamental role for their capacity to give organizations and people managing tourist destinations the possibility to base all of the decisions concerning policies, infrastructure development and stakeholders' progress on sound and rational bases. We found a paper that presents an overview of DSS usage in tourism management organizations and portrays a general framework for the design of an effective practical implementation

Another project (SFIDA) –funded by the European Commission within LIFE – Environment Programme and co-financed by DG Environmental Quality of Regione Lombardia (Italy) has as a main objective to develop a Decision Support System suited to integrate environmental concerns into the definition of a plan for sustainable tourism for three municipalities located close to Lake Garda. The DSS is used to generate information and stimulate participation, making the decision transparent, repeatable and participatory. The components of the DSS support several phases of the planning process, including the environmental and socio-economic analysis, the definition of the plan procedure, the impact representation, the evaluation and comparison of the alternatives, and the management of

One of the articles presents the Illinois Tourism Network (ITN) as an example of interorganizational, knowledge-based tourism information system/community that successfully integrated the management of information and knowledge flows in a way that appeals to tourism organizations in different stages of effective technology use and fosters capacity

Another paper presents a Fuzzy based decision support system for E-Tourism investment risk analysis. In general terms, E-tourism is the use of information and communication technology (ICT) in tourism which may allow operating tourism in least variable cost, least time and increasing work efficiency. To demonstrate the effectiveness of the system, factors like investment, human IT skills, E-tourism infrastructure and stability of the regions are

Cause and effect analysis influences the effectiveness of decision-making and the consumer behaviour. The complex relationship between cause and effect as well as the fuzzy nature of human life make the cause and effect analysis difficult. This research applies to fuzzy DEMATEL method for group decision-making to gather group ideas and analyze the cause and effect relationship of complex problems in a fuzzy environment. An empirical study applies to the fuzzy DEMATEL method in the service quality of Taiwanese leisure farms. This study used purpose sampling, a total of 215 valid instruments collected from Beijing

important segmentation criteria, using OLAP (Micu et al., 2009).

the conflict among decision-makers (Laniado, et.al, 2004).

tourists' perception on service quality (Lin et al., 2009).

building among community members (Gretzel&Fesenmaier, 2004).

(Baggio&Caporarello, 2004).

considered. (Paudel&Hossain).

A marketing decision support system (MDSS) can be of particular importance as it supports organizations in collecting, storing, processing, and disseminating information and the decision-making process by providing forecasts and decision models. Insights into a successful implementation of a MDSS in tourism can be found in the literature (Wöber, 2003). He created TourMIS, an on-line accessible decision support tool for tourism and hospitability management which has been successfully used by more than 1000 users for three years.

From another point of view, the acquisition of knowledge management level may imply a considerable amount of audits. Another article proposes a Knowledge-Based System that makes it possible to evaluate an organization at a Knowledge Management Capability Assessment maturity level. It is very interesting to minimize the cost by paying only for the truly indispensable authors (Andrade et.al, 2010).

Operators in tourism management, compared to other management sectors, are confronted with a vast field of complex aims, requiring different plans of action. The major reason for the poor application of management science is insufficient education of practitioners and the inadequacy of problem solving features of standard software solutions. We consider the development of simple, affordable programs, downloadable for every tourism manager, is the first step in a new era of dialog between research and practice. We noticed different approaches in the literature, all having their benefits and some disadvantages.

#### **3.5 An example of a decision support system implementation in tourism**

It is crucial to design and implement Decision Support Systems to assist the manager because of the large quantities of diverse data stored in an organization. For a manager, informatics and the use of information technologies always means formalizing routine activities, those laws of existence and manifestation that can be described. The "casualty" fact is transformed into one that is "standardized", elaborating behavioural conducts possible to use depending of the specificity of the situation occurred. The importance of interpretation is vital, from the information dimension to the strategic one. Information technologies are applied, separately and together, in management and decision modelling. They offer modelling instruments being able to automate the processes. The use of the decision and the context of decision making are two key aspects that characterise the utility of the decision models. In the decision making process are used data, information and knowledge corroborated with the manifestation of reasoning stated by the intelligence and experience of the decisional factor. Artificial intelligence proved its applicability using specific technologies such as expert systems (capable of offering expertise in a specific knowledge domain) and decision support systems (a system that brings together the intellectual resources of a person with the capabilities of a computerized system in order to improve the quality of the decisions).

We will present an implementation of decision support systems. Based on the knowledge provided of the expert and some historical data, we used binary trees in order to build a formalized axiomatic system. The axioms were transposed into production rules, as modules of the decision support system.

Knowledge-Based Decisions in Tourism 37

A/N = degree of endowment with total assets, Vagr = income from leisure, Valte = income from other activities, Vexpl = operating income, Vfin = financial income, VT = total income, WT = work productivity, rAC = circulating assets capitalization, P = profit, m= P/Vtotale =

As a reasoning method we used deduction (begun at the bottom level, if we change the value of building capacity, how that change affect all the variables until it reaches circulating asset capitalization) and induction (e.g. – setting a target for total asset capitalization, the system will determine the values for all the other variables in order to

An axiomatic system is a system of propositions based on the distinctions between axioms (primary propositions) and theorems (derived propositions). The transition from the primary terms to derived ones assumes the existence of definition and deduction rules. When the interpretation of the symbols is not used, the system is called formalized axiomatic system. An axiom is an obvious proposition that requires no demonstration. Theorems are propositions obtained from axioms or other proposition, obtained using inference rules. Through deduction we understand applying to axioms or propositions

The organization that we studied can be modelled using semantic trees. We used a left-

One important feature is that the system behaves in a dynamic way.

initially considered true inference rules for a finite number of times.

decomposed semantic tree, as can be seen in figure 6.

weighted profit, rAT = P/Atotale = total assets capitalization.

Fig. 5. The system of variables

**3.5.3 The formalized axiomatic system** 

sustain that target).

#### **3.5.1 Premises**

Information and knowledge technologies are two essential tools for the modelling and developing of interactive solutions. Therefore, we focused on identifying their use in decision modelling. We created an intelligent decision making system with the main purpose of providing intelligent informing. Hybrid support systems are systems that result from integrating decision support systems with other tools and technologies in order to maximize efficiency of the decision processes in an organization. Our proposal is a hybrid system, a combination of a decision support system model oriented (flexible systems that use spreadsheets, used in what-if analysis) and decision support systems knowledge oriented (software modules based on artificial intelligence).

We noticed that time and effort are wasted when the information is not at hand, therefore managers could use a little help in making decisions based on what-if predictions. We designed an application to help them simulate a real business situation and see the results immediately. We chose a hotel situated in the western part of Romania, in a beautiful resort called Băile Felix (http://www.bailefelix.net/). The manager wanted to invest and was open to new ideas and to implementing an information system that could help him deal with economic indicators and predict what could happen in the future. The system doesn't take into consideration some indicators like inflation, but we consider it is a good starting point. Also, we want to expand it in the future, so we could apply it to the entire complex of hotels in Băile Felix.

#### **3.5.2 The system of variables**

To build a generally valid system (a formalized one) it is necessary to create an interconnected system of indicators, the advantage being that if the value of one indicator is changing, all the other values of the indicators depending on it will also be changed automatically.

The system sets the targets for three main variables: the income generated from the hotel activities, restaurant and treatment (Vrht); the expenditure for 1000 lei income (C/1000v); the total assets (Atotale). Circulating assets capitalization (rAC) and total asset capitalization (rAT) are the desired indicators, but they depend on these three main indicators.

For those main variables we used the semantic trees presented earlier in order to obtain the axioms which were translated into production rules, then into subroutines. The other variables change their value depending on these main variables.

The relationship between all the variables can be seen in figure 5, where: Vrht = income generated from the hotel, restaurant and treatment, NZT = number of tourist days, Vmzt = average income on a tourist day, Kf = using capacity, Go = occupying level, Kc = touristic built capacity, Cpf = putting to function coefficient, Cf/1000v = fixed expenditures for 1000 lei income, Cv/1000v = variable expenditures for 1000 lei income, aCf/1000v = fixed expenditures 1000 lei income, other than amortization, Cam/1000v = amortization expenditure for 1000 lei income, Cs/1000v = wages expenditures for 1000 lei income, Cfa/1000v = other expenditures for 1000 lei income, Afixe =fixed assets, Acirculante = circulating assets, N =average number of personnel, qzf = Af/N = degree of endowment with fixed assets Af/N, paf/A = Af/Atotale = weight of fixed assets in total assets, qza =

Information and knowledge technologies are two essential tools for the modelling and developing of interactive solutions. Therefore, we focused on identifying their use in decision modelling. We created an intelligent decision making system with the main purpose of providing intelligent informing. Hybrid support systems are systems that result from integrating decision support systems with other tools and technologies in order to maximize efficiency of the decision processes in an organization. Our proposal is a hybrid system, a combination of a decision support system model oriented (flexible systems that use spreadsheets, used in what-if analysis) and decision support systems knowledge

We noticed that time and effort are wasted when the information is not at hand, therefore managers could use a little help in making decisions based on what-if predictions. We designed an application to help them simulate a real business situation and see the results immediately. We chose a hotel situated in the western part of Romania, in a beautiful resort called Băile Felix (http://www.bailefelix.net/). The manager wanted to invest and was open to new ideas and to implementing an information system that could help him deal with economic indicators and predict what could happen in the future. The system doesn't take into consideration some indicators like inflation, but we consider it is a good starting point. Also, we want to expand it in the future, so we could apply it to the entire

To build a generally valid system (a formalized one) it is necessary to create an interconnected system of indicators, the advantage being that if the value of one indicator is changing, all the other values of the indicators depending on it will also be changed

The system sets the targets for three main variables: the income generated from the hotel activities, restaurant and treatment (Vrht); the expenditure for 1000 lei income (C/1000v); the total assets (Atotale). Circulating assets capitalization (rAC) and total asset capitalization

For those main variables we used the semantic trees presented earlier in order to obtain the axioms which were translated into production rules, then into subroutines. The other

The relationship between all the variables can be seen in figure 5, where: Vrht = income generated from the hotel, restaurant and treatment, NZT = number of tourist days, Vmzt = average income on a tourist day, Kf = using capacity, Go = occupying level, Kc = touristic built capacity, Cpf = putting to function coefficient, Cf/1000v = fixed expenditures for 1000 lei income, Cv/1000v = variable expenditures for 1000 lei income, aCf/1000v = fixed expenditures 1000 lei income, other than amortization, Cam/1000v = amortization expenditure for 1000 lei income, Cs/1000v = wages expenditures for 1000 lei income, Cfa/1000v = other expenditures for 1000 lei income, Afixe =fixed assets, Acirculante = circulating assets, N =average number of personnel, qzf = Af/N = degree of endowment with fixed assets Af/N, paf/A = Af/Atotale = weight of fixed assets in total assets, qza =

(rAT) are the desired indicators, but they depend on these three main indicators.

variables change their value depending on these main variables.

oriented (software modules based on artificial intelligence).

complex of hotels in Băile Felix.

**3.5.2 The system of variables** 

automatically.

**3.5.1 Premises** 

A/N = degree of endowment with total assets, Vagr = income from leisure, Valte = income from other activities, Vexpl = operating income, Vfin = financial income, VT = total income, WT = work productivity, rAC = circulating assets capitalization, P = profit, m= P/Vtotale = weighted profit, rAT = P/Atotale = total assets capitalization.

Fig. 5. The system of variables

As a reasoning method we used deduction (begun at the bottom level, if we change the value of building capacity, how that change affect all the variables until it reaches circulating asset capitalization) and induction (e.g. – setting a target for total asset capitalization, the system will determine the values for all the other variables in order to sustain that target).

One important feature is that the system behaves in a dynamic way.

#### **3.5.3 The formalized axiomatic system**

An axiomatic system is a system of propositions based on the distinctions between axioms (primary propositions) and theorems (derived propositions). The transition from the primary terms to derived ones assumes the existence of definition and deduction rules. When the interpretation of the symbols is not used, the system is called formalized axiomatic system. An axiom is an obvious proposition that requires no demonstration. Theorems are propositions obtained from axioms or other proposition, obtained using inference rules. Through deduction we understand applying to axioms or propositions initially considered true inference rules for a finite number of times.

The organization that we studied can be modelled using semantic trees. We used a leftdecomposed semantic tree, as can be seen in figure 6.

Knowledge-Based Decisions in Tourism 39

possibility, ↓ means decrease, stands for "or" (multiple choices), and the Latin letters are

Going down on the left side of the semantic tree, we can depict Figure 9, and relation (5) can

, \*>1, δ>1, δ\*=

where >1, >1, \*=

be obtained.

the change coefficients for each variable.

Fig. 9. Second level of the semantic tree

Fig. 10. The last level of the semantic tree

where >1, 1>1, 11>1, 11\*= <sup>1</sup>

13\*>1.

syllogism:

where >1, >1,

�z↑ → ((y↑\*→x↑) (y↓δ\*→x↑δ) (y↑γ\*→ x↓γ) (y↑→ xc) (yc → x↑)) (4)

, δ\*<1, γ<1, γ≠0, γ\*=

\*\*\* 21 11 22 12 23

, 1\*>1, 2\*=

\*\* \*

12 

1 1 12 11 11 11 12 12 11 12 12 13 c c

, 11\*>1, 12>1, 12\*= <sup>1</sup>

Five theorems can be obtained from relation (1), (2) and (3) using the method of poli-

�

(6)

x ((x x ) (x x ) (x

11 13 12 1 11 12 11 1

11 

x ) (x x ) (x x ))

2 

, 2\*<1, 3\*=

, 12\*<1, 13<1, 13≠0, 13\*= <sup>1</sup>

1 

c c

x ((x x ) (x x ) (x

13 2 1 2 1

>1, 1>1, 2>1, 3≠0, 3<1, 1\*=

Using the same method on the left side, we obtain relation (3):

x ) (x x ) (x x ))

, γ\*>1, ◊ represents

(5)

13 ,

3 , 3\*>1.

Fig. 6. A left decomposed semantic tree

The symbol � represents "must", ↑ represents growth, and the growth coefficient.

Two basic observations can be outlined: if the number of alternatives is reduced, the complexity of the system is also reduced, but the interpretation is easier; the right part of the semantic tree can be also interpreted, so the generality of the system is not reduced.

We chose to represent a product system ×(×(×(x11,x12,x1),x2,x),y,z) where z is a very well determined target: z = f(x11, x12, x2, y) – figure 7.

Fig. 7. Product system

A number of observations can be outlined:


Using the formalized symbols we describe all the possible growth alternatives depicted in the following figure:

Fig. 8. The first level of the semantic tree

The symbol � represents "must", ↑ represents growth, and the growth coefficient.

semantic tree can be also interpreted, so the generality of the system is not reduced.

Two basic observations can be outlined: if the number of alternatives is reduced, the complexity of the system is also reduced, but the interpretation is easier; the right part of the

We chose to represent a product system ×(×(×(x11,x12,x1),x2,x),y,z) where z is a very well

if the number of alternatives is reduced, the complexity of the system is also reduced,

the right part of the semantic tree can be also interpreted, so the generality of the system

Using the formalized symbols we describe all the possible growth alternatives depicted in

Fig. 6. A left decomposed semantic tree

determined target: z = f(x11, x12, x2, y) – figure 7.

A number of observations can be outlined:

but the interpretation is easier;

Fig. 8. The first level of the semantic tree

Fig. 7. Product system

is not reduced.

the following figure:

$$\exists x \uparrow a \to \Diamond \left( (\mathbf{y} \uparrow \beta \mathbf{\hat{\neg}\rightarrow\nuparrow} \beta \mathbf{\hat{\jmath}}) \lor (\mathbf{y} \downarrow \mathbf{\hat{\neg}\rightarrow\nuparrow} \delta \mathbf{\hat{\jmath}}) \lor (\mathbf{y} \uparrow \mathbf{\hat{\neg}\rightarrow\ndownarrow} \mathbf{y}) \lor (\mathbf{y} \uparrow \mathbf{\hat{\neg}\rightarrow\narrow} \mathbf{\hat{\neg}\rightarrow\narrow} \mathbf{\hat{\jmath}}) \lor (\mathbf{y} \uparrow \rightarrow \mathbf{\hat{\neg}\rightarrow\narrow} \mathbf{\hat{\jmath}}) \right) \tag{4}$$

where >1, >1, \*= , \*>1, δ>1, δ\*= , δ\*<1, γ<1, γ≠0, γ\*= , γ\*>1, ◊ represents possibility, ↓ means decrease, stands for "or" (multiple choices), and the Latin letters are the change coefficients for each variable.

Going down on the left side of the semantic tree, we can depict Figure 9, and relation (5) can be obtained.

Fig. 9. Second level of the semantic tree

$$\begin{aligned} \mathsf{Lex}\uparrow\Uprowleft \mathbb{B} &\to \Diamond(\mathsf{x}\_{2}\uparrow\mathbb{B}\_{1}^{\*} \to \mathsf{x}\_{1}\uparrow\mathbb{B}\_{1}) \vee (\mathsf{x}\_{2}\downarrow\mathbb{B}\_{2}^{\*} \to \mathsf{x}\_{1}\uparrow\mathbb{B}\_{2}) \vee (\mathsf{x}\_{2}\uparrow\mathbb{B}\_{3}^{\*} \to \\ \mathsf{Lex}\_{1}\downarrow\mathbb{B}\_{3}) \vee (\mathsf{x}\_{2}\uparrow\mathbb{B} \to \mathsf{x}\_{1}\uparrow) \vee (\mathsf{x}\_{2}\uparrow\to\mathsf{x}\_{1}\uparrow\mathbb{B}) \rangle \end{aligned} \tag{5}$$

where >1, >1, >1, 1>1, 2>1, 3≠0, 3<1, 1\*= 1 , 1\*>1, 2\*= 2 , 2\*<1, 3\*= 3 , 3\*>1.

Using the same method on the left side, we obtain relation (3):

Fig. 10. The last level of the semantic tree

$$\begin{aligned} \left(\mathbf{\color{red}{x}\_{1}\uparrow\texttt{\mathfrak{f}}\_{1}\rightarrow\texttt{\otimes}(\texttt{(x}\_{12}\uparrow\texttt{\mathfrak{f}}\_{11}\texttt{\mathfrak{i}}\rightarrow\texttt{x}\_{11}\uparrow\texttt{\mathfrak{f}}\_{11})\vee(\texttt{x}\_{12}\downarrow\texttt{\mathfrak{f}}\_{12}\texttt{\mathfrak{i}}\rightarrow\texttt{x}\_{11}\uparrow\texttt{\mathfrak{f}}\_{12})\vee(\texttt{x}\_{12}\uparrow\texttt{\mathfrak{f}}\_{13}\texttt{\mathfrak{i}}\rightarrow\\ \rightarrow\texttt{x}\_{11}\downarrow\texttt{\mathfrak{f}}\_{13}\rangle\vee(\texttt{x}\_{12}\uparrow\texttt{\mathfrak{f}}\_{1}\rightarrow\texttt{x}\_{11}\texttt{\mathfrak{i}})\vee(\texttt{x}\_{12}\rightarrow\texttt{x}\_{11}\uparrow\texttt{\mathfrak{f}}\_{1}\texttt{\mathfrak{i}})\end{aligned} \tag{6}$$

where >1, 1>1, 11>1, 11\*= <sup>1</sup> 11 , 11\*>1, 12>1, 12\*= <sup>1</sup> 12 , 12\*<1, 13<1, 13≠0, 13\*= <sup>1</sup> 13 , 13\*>1.

Five theorems can be obtained from relation (1), (2) and (3) using the method of polisyllogism:

$$\Box \mathbf{z} \uparrow \mathbf{a} \to \diamondsuit \text{ (x11\uparrow\beta 11 \& x12\uparrow\beta 11^\* \& x2\uparrow\beta 1^\* \& y\uparrow\beta^\*) \tag{7}$$

Knowledge-Based Decisions in Tourism 41

The application contains 9 sheets and 25 user forms, the interface being a Graphical User Interface (GUI). The DSS is divided into four modules that permit: gathering data,

The first module is called "Introducere date" and permits gathering information or updating

data about the last three years and the initial values of variables for the simulation.

simulations, printing the results and exiting the application – Figure 11.

Fig. 12. Choosing which module to run in order to simulate a real situation

decision support system. The last button exits the information system.

entire algorithm or just one or more modules.

form **Income** – figure 13.

The second option from the menu is called "Simulare", where we used the rules obtained previously in order to generate a possible solution. The form Simulare allows executing the

The last module allows displaying or printing the results obtained when running the

We will present the construction of one of the main modules, the one that starts with the

Fig. 11. The DSS'menu

$$\text{where } \alpha \ge 1, \text{ } \beta \ge 1, \, \beta^\* = \frac{\alpha}{\beta}, \, \beta^\* > 1, \, \beta 1 > 1, \, \beta 1^\* = \frac{\beta}{\beta\_1}, \, \beta 1^\* > 1, \, \beta 1 1 > 1, \, \beta 1 1^\* = \frac{\beta\_1}{\beta\_{11}}, \, \beta 1 1^\* > 1$$

$$\mathsf{T}\mathsf{z}\uparrow\mathsf{a}\to\lozenge\mathsf{0}\left(\mathsf{x}11\uparrow\mathsf{j}12\ \mathsf{x}\times\mathsf{1}2\downarrow\mathsf{j}12^{\*}\ \mathsf{x}\times\mathsf{2}\uparrow\mathsf{j}1^{\*}\ \mathsf{x}\uparrow\mathsf{j}\uparrow\mathsf{j}^{\*}\right)\tag{8}$$

$$\text{where } \alpha \ge 1, \beta \ge 1, \ \beta^\* = \frac{\mathfrak{a}}{\beta}, \ \beta^\* \ge 1, \ \beta 1 \ge 1, \ \beta 1^\* = \frac{\beta}{\beta\_1}, \ \beta 1^\* \ge 1, \ \beta 1 2^\* 1, \ \beta 1 2^\* = \frac{\beta\_1}{\beta\_{12}}, \ \beta 1 2^\* \le 1$$

�z↑ → (x11↓13& x12↑13\* & x2↑1\* & y↑\*) (9)

$$\text{where } \alpha \ge 1, \beta \ge 1, \beta^\* = \frac{\mathfrak{a}}{\beta}, \ \beta^\* \ge 1, \ \beta 1 \ge 1, \ \beta 1^\* = \frac{\beta}{\beta\_1}, \ \beta 1^\* \ge 1, \ \beta 1 \ge 1, \ \beta 1 \ge 0, \ \beta 1 \ge \frac{\beta\_1}{\beta\_{13}}, \ \beta 1 \ge 1$$

$$\text{Tr}\mathbf{z}\uparrow\alpha \to \diamondsuit \text{ (x11c } \& \times \mathbf{12}\uparrow\beta\mathbf{1} \text{ \& x2\uparrow\beta\mathbf{1}\*\;\mathbf{\&}\;y\uparrow\beta\*\text{)}\tag{10}$$

where >1, >1, \*= <sup>β</sup> <sup>α</sup> , \*>1, 1>1, 1\*= β1 <sup>β</sup> , 1\*>1

$$\mathsf{T} \mathsf{L} \mathsf{T} \mathsf{a} \to \mathsf{0} \text{ (x11\uparrow\mathsf{B1} \; \mathsf{61} \, \mathsf{61} \, \mathsf{x12c} \, \mathsf{61} \, \mathsf{x2}\uparrow\mathsf{B1} \, \mathsf{61}\*\mathsf{y}\uparrow\mathsf{B}\*\)\tag{11}$$

where >1, >1, \*= <sup>β</sup> <sup>α</sup> , \*>1, 1>1, 1\*= β1 <sup>β</sup> , 1\*>1.

Through the same method a total number of 105 theorems can be obtained and grouped into one meta-theorem that contains all the possible cases for the growth of z if the operator between the variable is product.

Using meta-theorems deducted in this way, we built a decision support system.

#### **3.5.4 The decision support system**

The model was created based on semantic trees. We divided this complex system into several trees and built rules for each type of tree, based on the operators between the variables. For each of the three sub-modules, the application permits choosing between the following alternatives: we can set the target or we can see the history of the variables (the last three years) and follow the expert opinion. During each interval the user can correct the choice or the expert opinion, based on some external information.

A big advantage is the formalization of the system. That means that instead of income we can use any other variable or indicator, but the operators between the variable must remain the same.

We implemented these concepts in Microsoft Excel 2007, using Visual Basic Application – a powerful tool that uses procedures in order to control the behaviour of Excel objects.

The main advantage of the application is that the user can change the value of each variable, regardless of the moment or the position in the main system of indicators. The results are automatically being re-calculated and displayed right away.

β1

β1

β1

β1

β1

Using meta-theorems deducted in this way, we built a decision support system.

<sup>β</sup> , 1\*>1

<sup>β</sup> , 1\*>1.

Through the same method a total number of 105 theorems can be obtained and grouped into one meta-theorem that contains all the possible cases for the growth of z if the operator

The model was created based on semantic trees. We divided this complex system into several trees and built rules for each type of tree, based on the operators between the variables. For each of the three sub-modules, the application permits choosing between the following alternatives: we can set the target or we can see the history of the variables (the last three years) and follow the expert opinion. During each interval the user can correct the

A big advantage is the formalization of the system. That means that instead of income we can use any other variable or indicator, but the operators between the variable must remain

We implemented these concepts in Microsoft Excel 2007, using Visual Basic Application – a

The main advantage of the application is that the user can change the value of each variable, regardless of the moment or the position in the main system of indicators. The results are

powerful tool that uses procedures in order to control the behaviour of Excel objects.

<sup>α</sup> , \*>1, 1>1, 1\*=

<sup>α</sup> , \*>1, 1>1, 1\*=

<sup>α</sup> , \*>1, 1>1, 1\*=

<sup>α</sup> , \*>1, 1>1, 1\*=

<sup>α</sup> , \*>1, 1>1, 1\*=

choice or the expert opinion, based on some external information.

automatically being re-calculated and displayed right away.

where >1, >1, \*= <sup>β</sup>

where >1, >1, \*= <sup>β</sup>

where >1, >1, \*= <sup>β</sup>

where >1, >1, \*= <sup>β</sup>

where >1, >1, \*= <sup>β</sup>

the same.

between the variable is product.

**3.5.4 The decision support system** 

�z↑ → (x11↑11 & x12↑11\* & x2↑1\* & y↑\*) (7)

�z↑ → (x11↑12 & x12↓12\* & x2↑1\* & y↑\*) (8)

�z↑ → (x11↓13& x12↑13\* & x2↑1\* & y↑\*) (9)

<sup>β</sup> , 1\*>1, 13<1, 13≠0, 13\*=

�z↑ → (x11c & x12↑1 & x2↑1\* & y↑\*) (10)

�z↑ → (x11↑1 & x12c & x2↑1\* & y↑\*) (11)

11 1 β

12 1 β

<sup>β</sup> , 11\*>1

<sup>β</sup> , 12\*<1

13 1 β

<sup>β</sup> , 13\*>1

<sup>β</sup> , 1\*>1, 11>1, 11\*=

<sup>β</sup> , 1\*>1, 12>1, 12\*=

Fig. 11. The DSS'menu

The application contains 9 sheets and 25 user forms, the interface being a Graphical User Interface (GUI). The DSS is divided into four modules that permit: gathering data, simulations, printing the results and exiting the application – Figure 11.

The first module is called "Introducere date" and permits gathering information or updating data about the last three years and the initial values of variables for the simulation.


Fig. 12. Choosing which module to run in order to simulate a real situation

The second option from the menu is called "Simulare", where we used the rules obtained previously in order to generate a possible solution. The form Simulare allows executing the entire algorithm or just one or more modules.

The last module allows displaying or printing the results obtained when running the decision support system. The last button exits the information system.

We will present the construction of one of the main modules, the one that starts with the form **Income** – figure 13.

Knowledge-Based Decisions in Tourism 43

Forma frmVenituri

1

Verificarea conditiilor economice

Afisam Vrht, NZT, Vmzt, KF, GO, KC, CPF

Modificare date de lucru

Modificare date 1

> "Introduceti coeficientul", alfa

NU

Iesire (Iesire)

Introduceti valori supraunitare! alfa>1

STOP

DA

r="C" NU DA

3

Input of the desired value is validated pushing the Ok button, so the system displays the next form – Figure 16. For each variable we also have a history, like in the case of the

Introduceti coeficientul de crestere sau studiati istoricul inainte? (C,I)

I(1)=Vrht(3)/Vrht(2)\*100

Introduceti datele pe cei 3 ani si datele actuale pentru hotelul dorit

I(2)=Vrht(2)/Vrht(1)\*100

2

Fig. 15. Logical design of the process

Introducere coeficient de crestere


Fig. 13. Income form in design mode – choosing the growth coefficient for the income

On the right-hand side we can see the initial values, modifiable data that can be changed to reflect alternate initial conditions. The system calculates the related variables based on the values of the variable it already has, maintaining the economic relationship between the indicators.

This form allows data validations – the initial data must verify the relations (in our case, the economic relations) between the variables.

The user can follow the expert opinion or can insert a value based on his own opinion (C – inserting a value, I – be guided by the expert opinion, based on the firm's history); based on the history and some hypothesis introduced in the system by the expert, the application provides three scenarios: an optimistic one, a pessimistic one and the most probable one, suggesting the option to the user – figure 14;


Fig. 14. The history for the Income variable

The user has to choose a growing coefficient for the income (>1). We present a part of the algorithm, the choosing of the growth coefficient for the Income resulting from hotel activities, restaurant and treatment in Figure 15.

Fig. 13. Income form in design mode – choosing the growth coefficient for the income

indicators.

economic relations) between the variables.

suggesting the option to the user – figure 14;

Fig. 14. The history for the Income variable

activities, restaurant and treatment in Figure 15.

On the right-hand side we can see the initial values, modifiable data that can be changed to reflect alternate initial conditions. The system calculates the related variables based on the values of the variable it already has, maintaining the economic relationship between the

This form allows data validations – the initial data must verify the relations (in our case, the

The user can follow the expert opinion or can insert a value based on his own opinion (C – inserting a value, I – be guided by the expert opinion, based on the firm's history); based on the history and some hypothesis introduced in the system by the expert, the application provides three scenarios: an optimistic one, a pessimistic one and the most probable one,

The user has to choose a growing coefficient for the income (>1). We present a part of the algorithm, the choosing of the growth coefficient for the Income resulting from hotel

Fig. 15. Logical design of the process

Input of the desired value is validated pushing the Ok button, so the system displays the next form – Figure 16. For each variable we also have a history, like in the case of the

Knowledge-Based Decisions in Tourism 45

Our application is universally valid regardless of the considered variables. The only condition is that the relation between variables be one of sum, product, difference or division. The user can make any predictions for growth or decrease coefficients associated to

Sometimes we can come across a situation in which variable expenditure for 1000 lei income is negative, occupying level to be more than 100%, etc. Therefore, before making a selection of the alternatives to be considered, we have to apply the validation estimation, which includes among other rules: income, number of tourist days can't be negative, occupying level has to be more than zero and less or equal to 100, etc. If from these resulted alternatives this situation occurs, we consider them, from an economical point of view, unfeasable, and

Because we consider that tourism managers could benefit from access to the Internet, we are

An evolution in tourism marketing systems is critical in meeting the increasing needs for accurate, reliable and up-to-date information and in supporting knowledge creation and

Information systems studies are the confluence of many domains – information technology, management, marketing, accounting and organizational culture. They can be applied in different domains, one of them being tourism. Tourism has become an extremely dynamic system. In the last years, globalization enabled by technology development and by less expensive travel costs has greatly increased competition (Baggio&Caporarello, 2004). In the future economy, a knowledge-based economy, Decision Support Systems brings together the intellectual resources of experts with computer capabilities in order to improve the quality of the decisions taken (Târnăveanu, 2010a). Our goal was to present innovative concepts and techniques that can help us face mounting changes and challenges in the context of the new economy based on knowledge. Modern companies use knowledgedriven applications in order to respond rapidly to changing market conditions and customer needs. In recognition of the need to use information technology in order to implement Knowledge Management Systems and to transform their organization into a modern one, many organizations developed knowledge portals (Muntean&Târnăveanu, 2009a). This

In the future economy, a knowledge-based economy, decision support systems (DDS) are very rigorous and precise if the hypotheses are well grounded. An important direction of research is simulation of specialist thinking based on a Knowledge Based Systems (KBS). The evolution of DDS and KBS depends on the evolution of knowledge representation. Even though the research in economic knowledge representation is in progress, the cases in which theory is put into practice are very rare, and of limited complexity. An evolved KBS must incorporate knowledge pieces capable of explaining the economic phenomenon in all its complexity. In the near future not only the problem of rational, conscious knowledge will be an issue, but the one of unconscious knowledge based on intuition and imangination will

consequently we do not take them into consideration.

considering an on-line implementation of the decision support system.

learning process within the tourism industry (Gretzel&Fesenmaier, 2004).

the variables.

**4. Conclusions** 

could be a direction to be followed.

join the ranks of isses to be resolved.

Income: e.g. a raise in the income from hotel activities, restaurant and treatment can be sustained only by either number of tourist days (numarul de zile turist), average income (venitul mediu) on a tourist day or both.


Fig. 16. All the possible alternative for this particular case

This form allows going back to the first form to pick another value for Income RHT by checking "Alegerea unui alt coeficient de creştere pentru veniturile RHT" check-box, or using the rules (7), (8), (9), (10), (11) – we can choose one the five options or the last one, inserting a different coefficient, with no help from the expert.

If one of the five options that change the number of tourist days is picked, the system uses the rules built based on axioms and provides the user with an interval in which the value should be placed, so that the specific case selected will be valid. If this indication is not followed, the input is denied.

Finally – taking into account the organization specificity and the management point of view we chose six possible alternatives presented in Figure 17.


Fig. 17. Possible alternatives – predictions for 2013

Income: e.g. a raise in the income from hotel activities, restaurant and treatment can be sustained only by either number of tourist days (numarul de zile turist), average income

This form allows going back to the first form to pick another value for Income RHT by checking "Alegerea unui alt coeficient de creştere pentru veniturile RHT" check-box, or using the rules (7), (8), (9), (10), (11) – we can choose one the five options or the last one,

If one of the five options that change the number of tourist days is picked, the system uses the rules built based on axioms and provides the user with an interval in which the value should be placed, so that the specific case selected will be valid. If this indication is not

Finally – taking into account the organization specificity and the management point of view

(venitul mediu) on a tourist day or both.

Fig. 16. All the possible alternative for this particular case

inserting a different coefficient, with no help from the expert.

we chose six possible alternatives presented in Figure 17.

Fig. 17. Possible alternatives – predictions for 2013

followed, the input is denied.

Our application is universally valid regardless of the considered variables. The only condition is that the relation between variables be one of sum, product, difference or division. The user can make any predictions for growth or decrease coefficients associated to the variables.

Sometimes we can come across a situation in which variable expenditure for 1000 lei income is negative, occupying level to be more than 100%, etc. Therefore, before making a selection of the alternatives to be considered, we have to apply the validation estimation, which includes among other rules: income, number of tourist days can't be negative, occupying level has to be more than zero and less or equal to 100, etc. If from these resulted alternatives this situation occurs, we consider them, from an economical point of view, unfeasable, and consequently we do not take them into consideration.

Because we consider that tourism managers could benefit from access to the Internet, we are considering an on-line implementation of the decision support system.

#### **4. Conclusions**

An evolution in tourism marketing systems is critical in meeting the increasing needs for accurate, reliable and up-to-date information and in supporting knowledge creation and learning process within the tourism industry (Gretzel&Fesenmaier, 2004).

Information systems studies are the confluence of many domains – information technology, management, marketing, accounting and organizational culture. They can be applied in different domains, one of them being tourism. Tourism has become an extremely dynamic system. In the last years, globalization enabled by technology development and by less expensive travel costs has greatly increased competition (Baggio&Caporarello, 2004). In the future economy, a knowledge-based economy, Decision Support Systems brings together the intellectual resources of experts with computer capabilities in order to improve the quality of the decisions taken (Târnăveanu, 2010a). Our goal was to present innovative concepts and techniques that can help us face mounting changes and challenges in the context of the new economy based on knowledge. Modern companies use knowledgedriven applications in order to respond rapidly to changing market conditions and customer needs. In recognition of the need to use information technology in order to implement Knowledge Management Systems and to transform their organization into a modern one, many organizations developed knowledge portals (Muntean&Târnăveanu, 2009a). This could be a direction to be followed.

In the future economy, a knowledge-based economy, decision support systems (DDS) are very rigorous and precise if the hypotheses are well grounded. An important direction of research is simulation of specialist thinking based on a Knowledge Based Systems (KBS). The evolution of DDS and KBS depends on the evolution of knowledge representation. Even though the research in economic knowledge representation is in progress, the cases in which theory is put into practice are very rare, and of limited complexity. An evolved KBS must incorporate knowledge pieces capable of explaining the economic phenomenon in all its complexity. In the near future not only the problem of rational, conscious knowledge will be an issue, but the one of unconscious knowledge based on intuition and imangination will join the ranks of isses to be resolved.

Knowledge-Based Decisions in Tourism 47

Laniado, E., Cappiello, A., Celline, F., Cerioli, R., Hernandez, K. & Laghi A. – A decision

Lin, ZP., Wang, R. & Tseng ML. – Determination of a Cause and Effect Decision Making

*Business and Economics,* Issue 2, Volume 6, 2009, pp. 73-86, ISSN: 1109-9526 Micu, A., Micu, A.-E. & Capatina, A. – OLAP Technique – An It&C Support for Marketing

Muntean, M. & Târnăveanu, D. (2009a) – Information Technology & Organizational

(http://www.wseas.us/elibrary/conferences/2009/rodos/COMPUTERS/COMP

Muntean, M. & Târnăveanu, D. (2009b) – Some Considerations About Collaborative Systems

Radu, I., Ursăcescu, M., Vlădean, D., Cioc, M. & Burlacu, S. (2005) – *Informatică şi* 

Shahua, L., Salvolainen, V. (1994) – Knowledge-Based Technology in Executive Information Systems, *Studies in Informatics and Control*, vol.3, no.4, Dec. 1994, pp.330-345 Tacu, P., Alexandru, Vancea, R., Holan, Ş. & Burciu, A. (1998) – *Inteligenţa artificială. Teorie şi aplicaţii în economie*, ISBN: 973-590-083-1, Editura Economică, Bucureşti Târnăveanu, D. A. (2010a) – Axiomatization – a Fundament for Decision Support Sytem in

Târnăveanu, D. A. (2010b) – A Model of Decission Support System in Economy, *WSEAS* 

 (http://www.wseas.us/e-library/transactions/economics/2010/88-404.pdf) Zaharia, M., Cârstea, C. & Sălăgean, L. (2003) – *Inteligenţa artificială şi sistemele expert în asistarea deciziilor economice*, ISBN: 973-590-870-0, Editura Economică, Bucureşti Wöber, K. – Information Supply in Tourism Management by Marketing Decision Support

2004 (enver.eu/vol\_07/6.Laniado%20&%20Cellina.pdf)

Issue 2, Volume 6, 2009, pp. 63-72, ISSN: 1109-9526

UTERS49.pdf)

SKIMA.pdf)

Bucureşti

10.pdf)

241-255

ISSN: 1109-9526,

support system for sustainable tourism: the SFIDA project, presented in Envirosoft,

Model for Leisure Farm's Service Quality in Taiwan, ), *WSEAS Transactions on* 

Managers Decision-Making Process (Case Study: Sales Multidemnsional Analysis Applied in Hotel Services Industry), *WSEAS Transactions on Business and Economics,* 

Knowledge Management, *Proceedings of the 13th WSEAS International Conference on COMPUTERS*, Rodos, 2009, ISSN:1790-5109, ISBN:978-960-474-099-4, pp.335-339,

Supporting Knowledge Management in Organizations, *WSEAS Transactions on Computers*, Issue 8, Volume 8, August 2009, pp.1378-1387, ISSN: 1109-2750, (http://www.wseas.us/e-library/transactions/computers/2009/29-621.pdf) Paudel, B. & Hossain, M.A. – Fuzzy based Decision Support System for E-tourism

Investment Risk Analysis (eastwest.inf.brad.ac.uk/document/publication/Paudel-

*management – O cale spre performanţă*, ISBN: 973-7787-59-5, Editura Universitară,

Tourism, *Proceedings of the 3rd WSEAS International Conference on Cultural Heritage and Tourism*, Corfu, 2010, ISSN: 1792-4308, ISBN: 978-960-474-205-9, pp.78-82 (http://www.wseas.us/e-library/conferences/2010/Corfu/CUHT/CUHT-

*Transactions on Business and Economics*, Issue 4, Volume 7, October 2010, pp. 444-453,

Systems, *Tourism Management*, Elsevier, Volume 24, Number 3, June 2003 , pp.

#### **5. References**

Andrade, J., Ares, J., Garcia, R., Santiago, R. & Suarez, S. (2010) – A Knowledge-based system for Knowledge Management Capability Assessment Model Evaluation, *WSEAS Transactions on Computers*, Issue 5, Volume 9, May 2010, pp.506-515, ISSN: 1109-2750,

(http://www.wseas.us/e-library/transactions/computers/2010/89-567.pdf)


(http://www.worldses.org/journals/economics/economics-2009.htm)

Cooper, C. (2006) – Knowledge management and tourism. *Annals of Tourism Research*, *33*(1), pp.47-64, Elsevier,

(http://linkinghub.elsevier.com/retrieve/pii/S0160738305000915)


Andrade, J., Ares, J., Garcia, R., Santiago, R. & Suarez, S. (2010) – A Knowledge-based

Baggio, R. & Caporarello, L. (2005) – Decision Support Systems in a Tourism Destination:

Băileşteanu, Gh. & Târnăveanu, D. (2006) – Reprezentarea cunoaşterii. Premisă a

Brândaş C. (2007) – *Sisteme suport de decizie pentru managementul performant. Concepere, proiectare şi implementare*, ISBN: 978-973-602-273-9, Editura Brumar, Timişoara Cândea, M., Stăncioiu, F.A., Mazilu M., Marinescu R.C – The competitiveness of the Tourist

Cooper, C. (2006) – Knowledge management and tourism. *Annals of Tourism Research*, *33*(1),

Bondecka-Krzykowska I. (2005) – Semantic tree method – historical perspective and

Dănăiaţă, D., Hurbean, L., Margea, C. (2008) – Sisteme informatice pentru administraţia publică, ISBN: 978-973-125-170-7, Editura Universităţii de Vest, Timişoara Dănăiaţă, I., Bibu N.A. & Predişcan M. (2006) – *Management. Bazele teoretice*, Second Edition,

Filip F., Gh (2007) – Sisteme suport pentru decizii, ISBN: 978-973-31-2308-8, Editura Tehnică,

Gretzel, U. & Fesenmaier, D. R. (2004) – Implementing a Knowledge-Based Tourism

Harmon P., King. D. (1992) – *Artificial Intelligence in Business Expert Systems*, ISBN: 978-

*Technology&Tourism*, vol. 6, 1098-3058/04, pp.245-255, USA, 2004 (http://tourism.wu-wien.ac.at/jitt/JITT\_6\_4\_Gretzel\_Fesenmaier.pdf)

Marketing Information Systems: The Illinois Tourism Network, *Information* 

*Economics*, Issue 7, Volume 6, 2009, pp.374-384, ISSN: 1109-9526, (http://www.worldses.org/journals/economics/economics-2009.htm)

(http://linkinghub.elsevier.com/retrieve/pii/S0160738305000915)

applications, Annales UMCS Informatica AI 3, pp. 15-25

(www.cse.chalmers.se/edu/course/DAT060/tree.pdf)

ISBN: 973-661-287-2, Editura Mirton, Timişoara

0471808244, John Wiley & Sons, 1992

pp.1-15, (http://www.iby.it/turismo/papers/baggio-dss-tourism.pdf) Băileşteanu, Gh. (2005) – *Semiotică economică*, ISBN: 973-661-528-6, Editura Mirton,

 (http://www.wseas.us/e-library/transactions/computers/2010/89-567.pdf) Andone, I., Ţugui A. (1999) – *Sisteme inteligente în Management, Contabilitate, Finanţe Bănci şi* 

*Marketing*, ISBN: 973-590-198-6, Editura Economică, Bucureşti

system for Knowledge Management Capability Assessment Model Evaluation, *WSEAS Transactions on Computers*, Issue 5, Volume 9, May 2010, pp.506-515, ISSN:

Literature Survey and Model Building, itAIS 2005 – *2nd Conference of the Italian chapter of AIS (Association for Information Systems)*, Verona, Italy, 1-2 December 2005,

axiomatizării deciziei, *Buletin Ştiinţific al Universităţii de Vest Timişoara*, Facultatea de Ştiinţe Economice, Seria: Teoria şi Practica Managementului, Timişoara, anul III,

Destination on the Future Tourism Market, *WSEAS Transactions on Business and* 

**5. References** 

1109-2750,

Timişoara

nr.3, p.20

pp.47-64, Elsevier,

Bucureşti


(http://www.wseas.us/e-library/transactions/economics/2010/88-404.pdf)


**3** 

*1USA 2Japan* 

Tadayuki (Tad) Hara

**Introduction to Input-Output Framework for** 

Input-Output (I-O) is an economic framework which was awarded two Nobel Prizes in Economics, one in 1973 to Dr. Wassily Leontief and the other for its extended Social Accounting Matrix (SAM) to Sir Richard Stone in 1984. The I-O/SAM framework remains as a core component for Computable General Equilibrium (CGE), which cannot function without the data of I-O/SAM. Applications of I-O family have been published not only in the broader social science fields including but not limited to economics, regional science, international development, but also in the tourism field. I-O framework is the foundation of System of National Accounts (SNA), which has been used by all the national governments in the world to measure important data such as gross domestic product (GDP), capital formation etc. Need for studying I-O has been increased significantly for tourism researchers because of a simple fact that a global common recording system to measure economic activities of tourism, officially endorsed by United Nations, World Bank, International Monetary Fund, Organization for Economic Cooperation and Development, to

There are, however, two serious problems for researchers and students of tourism to study the I-O. First, majority, if not all, of applied tourism researchers have never took formal training of how the I-O works, instead they only carry secondary perception that I-O framework is outdated and offers little value to the tourism field. Second, because of the first challenges, they do not have enough formal opportunities to learn about this extremely important framework, without which you cannot "understand" how the I-O and its extended family, such as SAM, CGE and TSA work. This chapter offers the shortest way to learn the minimum required knowledge of I-O framework for hospitality and tourism researchers and students. Technical explanations followed descriptions by Hara (2008).

Dr. Wassily Leontief succeeded in materializing the concept of "Tableau Economique" presented by the French Economist Francois Quesnay, in 1758. Dr. Leontief published the

**1. Introduction** 

name a few, is based on I-O.

**1.1 Brief history** 

**Analysis of Tourism as an Industry** 

*1Rosen College of Hospitality Management, University of Central Florida & Advisory Committee Member on International Trends on Tourism Statistics, <sup>2</sup>Japan Tourism Agency, Ministry of Land, Infrastructure, Transport and Tourism,* 


### **Introduction to Input-Output Framework for Analysis of Tourism as an Industry**

Tadayuki (Tad) Hara

*1Rosen College of Hospitality Management, University of Central Florida & Advisory Committee Member on International Trends on Tourism Statistics, <sup>2</sup>Japan Tourism Agency, Ministry of Land, Infrastructure, Transport and Tourism, 1USA 2Japan* 

**1. Introduction** 

48 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

http://media.unwto.org/en/press-release/2011-05-11/international-tourism-first-results-

http://media.unwto.org/en/press-release/2011-06-22/unwto-executive-council-endorses-

2011-confirm-consolidation-growth

http://www.unwto.org/tourism&mdgsezine/

efforts-better-position-tourism-global-age

Input-Output (I-O) is an economic framework which was awarded two Nobel Prizes in Economics, one in 1973 to Dr. Wassily Leontief and the other for its extended Social Accounting Matrix (SAM) to Sir Richard Stone in 1984. The I-O/SAM framework remains as a core component for Computable General Equilibrium (CGE), which cannot function without the data of I-O/SAM. Applications of I-O family have been published not only in the broader social science fields including but not limited to economics, regional science, international development, but also in the tourism field. I-O framework is the foundation of System of National Accounts (SNA), which has been used by all the national governments in the world to measure important data such as gross domestic product (GDP), capital formation etc. Need for studying I-O has been increased significantly for tourism researchers because of a simple fact that a global common recording system to measure economic activities of tourism, officially endorsed by United Nations, World Bank, International Monetary Fund, Organization for Economic Cooperation and Development, to name a few, is based on I-O.

There are, however, two serious problems for researchers and students of tourism to study the I-O. First, majority, if not all, of applied tourism researchers have never took formal training of how the I-O works, instead they only carry secondary perception that I-O framework is outdated and offers little value to the tourism field. Second, because of the first challenges, they do not have enough formal opportunities to learn about this extremely important framework, without which you cannot "understand" how the I-O and its extended family, such as SAM, CGE and TSA work. This chapter offers the shortest way to learn the minimum required knowledge of I-O framework for hospitality and tourism researchers and students. Technical explanations followed descriptions by Hara (2008).

#### **1.1 Brief history**

Dr. Wassily Leontief succeeded in materializing the concept of "Tableau Economique" presented by the French Economist Francois Quesnay, in 1758. Dr. Leontief published the

Introduction to Input-Output Framework for Analysis of Tourism as an Industry 51

sector, who make apple juice. They purchase your apples (=output) as "intermediate goods" in the inter-industry transactions (agricultural output sold to the manufacturing sector). As for the remaining apples, you decide to take them to the Farmer's Market, where people can

(Apples sold to other industries) + (Apples sold for final demand) = (All the apples

Since this is one of the key concepts, let's look at some examples. Imagine you own the Michelin tire factory. Some sales go to Nissan Motors as intermediate goods - so that Nissan Motor can sell their new cars with tires - and some sales go directly to consumers who want

Now imagine you are a farmer who grows tomatoes. If Peter, a restaurant owner, wants to purchase fresh tomatoes for his restaurant, the purchase is considered as a purchase of intermediate goods, since Peter will not be consuming these tomatoes but will be using them as a necessary ingredient in preparing his final products - tomato salads, tomato pizzas, spaghetti with tomato sauce, etc. When you sell your tomatoes to Nina who purchases the same tomatoes for her own enjoyment, this transaction fulfils her final demand, because she is purchasing tomatoes to satisfy her own final demand to consume fresh, tasty tomatoes.

What about hard-disk manufacturers? They sell some hard-disks to Dell so that it can create a personal computer for you, while they can also sell a hard-disk directly to you, so that you

Does this apply to a hotel environment? If you are the general manager of a 800-room hotel with full occupancy on a given night, all the 800 rooms are sold. Does this mean that all 800 rooms are sold to fulfill the final demand? It is indeed possible that all rooms are sold to fulfill final demands of at least 800 people, but there could also be some rooms which are sold as intermediate goods. If a travel agency purchases a block of rooms for the purpose of selling them as a part of package tour to individuals, the rooms sold to the travel agency are sales of intermediate goods, while the final demand would be satisfied as people purchase an all-inclusive package tour from the travel agent, which includes a hotel room. Also online intermediaries (companies which sell hotel rooms and other travel-related commodities through online transactions with customers), purchase hotel rooms as intermediate inputs and sell them to consumers' final demands. (In the United States, hotel industry's intermediate sales account for more than 1/3 to 2/5 of the total sales, so you can imagine

this concept is highly relevant to understand the current commerce of hotel rooms.)

The Input-Output table is displayed in a two-dimensional matrix format, with rows and columns. Rows show the output for each sector, and columns show the input for each sector.

Now we can look at them in a table format in the next section.

**2.1 Introduction to basic structure of input-output transaction table** 

It is time that we read tables with examples shown in proper sequences.

Intermediate Goods + Final Demand = Total Output (1)

directly purchase them for their own consumption, to satisfy their "final demand".

To put these sentences in a simple equation, we can say that

to purchase tires for their car, i.e. as a final demand.

can upgrade the current 20GB disk to, for example, 1TB.

produced)

U.S. Input-Output table of 1919 and 1929, in 1936 (Leontief, 1951), followed by a series of publications, resulting in the 1973 award of the Nobel Prize in Economics "For the development of the input-output method and for its application to important economic problems."

Dr. Walter Isard started to focus on regional economic impact analysis in the 1940s and initiated a new academic field entitled "Regional Science", which is roughly explained as "Applied Geographical Economics." Regional Science Association International (RSAI) was founded by Dr. Isard in 1954, and many researchers have expanded the depth and width of applied research using quantitative methods to address issues of regional economic analyses. Scholars in this field have contributed a lot towards the development and application of the I-O models, in order to help solve the problems in the world.

Input-Output modeling, "has failed to maintain the interest of academic theorists". (Duchin 1998) While the popularity of stochastic modeling has been high, the Input-Output modeling did not capture the main-stream momentum due to the perception of researchers regarding the absence of stochastic elements. Knowledge on Input-Output modelling became necessary as prerequisite to understand Tourism Satellite Accounts, which is based on the System of National Accounts (SNA), the product of the Input-Output framework to measure activities of the national economy.

#### **2. Concept of simple input-output modeling**

Let's assume that we want to learn about our society, and let's assume that our society consists of three industrial sectors only, namely agriculture, manufacturing and services sectors. Model is a simplified version of the complex society.

#### **[Understanding Intermediate Goods and Final Consumption]**

Assume that you want to purchase an apple juice in a plastic bottle to quench your thirst. Here is the first important question. What does the apple juice bottle consist of? Is it a manufactured product, or an agricultural product? While the plastic bottle is the manufactured product, namely a product made by the manufacturing sector, one important ingredient came from the agricultural sector, the apples. The manufacturing sector purchased the output – namely, the apples - from the agricultural sector, not to be consumed, but to be used as intermediate goods for producing the final product - the apple juice in the plastic bottles. If the manufacturer is the food processing company, they must have bought the empty bottles from another manufacturing sector, thus the manufacturing sector is selling plastic bottles to the other firms within the same manufacturing sector. When a sector purchases required input from other sectors, in order to produce their own goods, the former are called "intermediate goods" and this type of transaction is called "inter-industry transactions". This is in clear contrast with the purchase of the apple juice bottle for your own consumption. Your purchase, unless you try to purchase a bulk to sell to your friends for profit, is deemed as "final consumption", and your purchase is considered as "final demand".

#### **[Understanding Intermediate Transactions, Final Demands and Total Output]**

Imagine now that you are an apple farmer, and that you sell your apples (=output) to two kind of purchasers, only. First of all, you sell some apples (=output) to the manufacturing sector, who make apple juice. They purchase your apples (=output) as "intermediate goods" in the inter-industry transactions (agricultural output sold to the manufacturing sector). As for the remaining apples, you decide to take them to the Farmer's Market, where people can directly purchase them for their own consumption, to satisfy their "final demand".

To put these sentences in a simple equation, we can say that

50 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

U.S. Input-Output table of 1919 and 1929, in 1936 (Leontief, 1951), followed by a series of publications, resulting in the 1973 award of the Nobel Prize in Economics "For the development of the input-output method and for its application to important economic

Dr. Walter Isard started to focus on regional economic impact analysis in the 1940s and initiated a new academic field entitled "Regional Science", which is roughly explained as "Applied Geographical Economics." Regional Science Association International (RSAI) was founded by Dr. Isard in 1954, and many researchers have expanded the depth and width of applied research using quantitative methods to address issues of regional economic analyses. Scholars in this field have contributed a lot towards the development and

Input-Output modeling, "has failed to maintain the interest of academic theorists". (Duchin 1998) While the popularity of stochastic modeling has been high, the Input-Output modeling did not capture the main-stream momentum due to the perception of researchers regarding the absence of stochastic elements. Knowledge on Input-Output modelling became necessary as prerequisite to understand Tourism Satellite Accounts, which is based on the System of National Accounts (SNA), the product of the Input-Output framework to

Let's assume that we want to learn about our society, and let's assume that our society consists of three industrial sectors only, namely agriculture, manufacturing and services

Assume that you want to purchase an apple juice in a plastic bottle to quench your thirst. Here is the first important question. What does the apple juice bottle consist of? Is it a manufactured product, or an agricultural product? While the plastic bottle is the manufactured product, namely a product made by the manufacturing sector, one important ingredient came from the agricultural sector, the apples. The manufacturing sector purchased the output – namely, the apples - from the agricultural sector, not to be consumed, but to be used as intermediate goods for producing the final product - the apple juice in the plastic bottles. If the manufacturer is the food processing company, they must have bought the empty bottles from another manufacturing sector, thus the manufacturing sector is selling plastic bottles to the other firms within the same manufacturing sector. When a sector purchases required input from other sectors, in order to produce their own goods, the former are called "intermediate goods" and this type of transaction is called "inter-industry transactions". This is in clear contrast with the purchase of the apple juice bottle for your own consumption. Your purchase, unless you try to purchase a bulk to sell to your friends for profit, is deemed as "final consumption", and your purchase is considered

**[Understanding Intermediate Transactions, Final Demands and Total Output]** 

Imagine now that you are an apple farmer, and that you sell your apples (=output) to two kind of purchasers, only. First of all, you sell some apples (=output) to the manufacturing

application of the I-O models, in order to help solve the problems in the world.

measure activities of the national economy.

as "final demand".

**2. Concept of simple input-output modeling** 

sectors. Model is a simplified version of the complex society. **[Understanding Intermediate Goods and Final Consumption]** 

problems."

$$\text{Intermediate Goods} + \text{Final Demand} = \text{Total Output} \tag{1}$$

(Apples sold to other industries) + (Apples sold for final demand) = (All the apples produced)

Since this is one of the key concepts, let's look at some examples. Imagine you own the Michelin tire factory. Some sales go to Nissan Motors as intermediate goods - so that Nissan Motor can sell their new cars with tires - and some sales go directly to consumers who want to purchase tires for their car, i.e. as a final demand.

Now imagine you are a farmer who grows tomatoes. If Peter, a restaurant owner, wants to purchase fresh tomatoes for his restaurant, the purchase is considered as a purchase of intermediate goods, since Peter will not be consuming these tomatoes but will be using them as a necessary ingredient in preparing his final products - tomato salads, tomato pizzas, spaghetti with tomato sauce, etc. When you sell your tomatoes to Nina who purchases the same tomatoes for her own enjoyment, this transaction fulfils her final demand, because she is purchasing tomatoes to satisfy her own final demand to consume fresh, tasty tomatoes.

What about hard-disk manufacturers? They sell some hard-disks to Dell so that it can create a personal computer for you, while they can also sell a hard-disk directly to you, so that you can upgrade the current 20GB disk to, for example, 1TB.

Does this apply to a hotel environment? If you are the general manager of a 800-room hotel with full occupancy on a given night, all the 800 rooms are sold. Does this mean that all 800 rooms are sold to fulfill the final demand? It is indeed possible that all rooms are sold to fulfill final demands of at least 800 people, but there could also be some rooms which are sold as intermediate goods. If a travel agency purchases a block of rooms for the purpose of selling them as a part of package tour to individuals, the rooms sold to the travel agency are sales of intermediate goods, while the final demand would be satisfied as people purchase an all-inclusive package tour from the travel agent, which includes a hotel room. Also online intermediaries (companies which sell hotel rooms and other travel-related commodities through online transactions with customers), purchase hotel rooms as intermediate inputs and sell them to consumers' final demands. (In the United States, hotel industry's intermediate sales account for more than 1/3 to 2/5 of the total sales, so you can imagine this concept is highly relevant to understand the current commerce of hotel rooms.)

Now we can look at them in a table format in the next section.

#### **2.1 Introduction to basic structure of input-output transaction table**

The Input-Output table is displayed in a two-dimensional matrix format, with rows and columns. Rows show the output for each sector, and columns show the input for each sector. It is time that we read tables with examples shown in proper sequences.

Introduction to Input-Output Framework for Analysis of Tourism as an Industry 53

This can be interpreted as follows: the internal purchases of the agricultural sector were 1, its purchases from the manufacturing sector were 1, its purchases from the service sector were 2, and its purchases from Value Added were 6, thus making the total agricultural sector's purchases of 10. Value Added consists of labor, capital and imports etc, which we will examine later. This column shows something very useful in order to understand the structure of each industrial sector, because the numbers that you see in the column depict all the required input, with the bottom number showing the total input for the sector, in the

For hospitality students, there is an easier way to understand what the column means: it can be regarded as a list of all the required ingredients for a recipe. Yes, consider it as a recipe! For the agricultural sector, it required 1 ingredient (goods and/or services) from the same sector, 1 ingredient (goods and/or services) from the manufacturing sector, 2 ingredients (goods and/or services) from the service sector, and 6 from value added, which refers to other required "ingredients" such as labor, capital, and imported goods. This amounts to 10

It is great if you noticed that the total output amount equals the total input amount. In this case, the total output of 10, shown in the far right column, equals the total input of 10, shown in the bottom row. In order to produce a total output of 10, the agricultural sector required a total input of 10 (total output = total input) which consists of a total of 4

A review of some basic mathematics involving matrix notations and algebra will make things easier at a later stage. The mathematics component has been reduced to a minimum, albeit essential for hospitality and tourism students, who may even find some of it

At a glance, matrix notations may look threatening to students in hospitality and tourism. However, a minimum level of knowledge is required to conduct series of matrix operations. In order to simplify my explanation, let's use 2 x 2 matrices. This section also follows the

intermediate goods from the industrial sectors and 6 from value added.

**2.2 Necessary steps from transaction table to leontief inverse matrix** 

**2.2.1 Minimum knowledge required for matrix operations for I-O modeling** 

enjoyable. There follow the inserts of these reviews.

explanation made in the Hara (2008).

**[Interpretation of a Column in Transaction Table]** 

course of one year.

required ingredients within a year.

We see that the agricultural sector's column in Table 2 has

Table 1 is a simplified basic structure of the Input-Output framework. Table 2 is the same framework with some numbers. While both the MS-Excel sheet and the explanation of the whole tables in this chapter, I will explain the agricultural sector's numbers both in the row (1st row from top to bottom) and in the column (1st column from left to right), to show you how to read the numbers in Table 2.


Table 1. Input-Output Transaction Table


Table 2. Input-Output Transactions Table with Numbers

#### **[Interpretations of a Row in Transaction Table]**

As you can see, the agricultural sector's row in Table 3-2 runs as follows:

[1 2 1 6 10]

This means that in the course of that year, the agricultural sector's sales within the same sector were 1, its sales to the manufacturing sector were 2, its sales to the service sector were 1, and its sales to Final Demand (FD) were 6, which amounts to a total output of 10. To put the number in equation,


Intermediate goods are sold to the industrial sector as necessary ingredients, or as input for this sector. By looking at the row of the agricultural sector, you can see the destination of this sector's output. In this case, a total of 4 agricultural goods provided the industrial sectors with intermediate goods and the total of 6 went to final demands. This table is called a "transaction table" as it captured actual amount of transactions between sectors. Each industrial sector may have different methods to record their sales volumes, such as numbers of bushels, cars, barrels, or numbers of visitors, attendees, but in the transaction table, it is more convenient to use common monetary values that reflect the exchange of goods and money. Thus, we use common units such as US\$ million or € million.

#### **[Interpretation of a Column in Transaction Table]**

52 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Table 1 is a simplified basic structure of the Input-Output framework. Table 2 is the same framework with some numbers. While both the MS-Excel sheet and the explanation of the whole tables in this chapter, I will explain the agricultural sector's numbers both in the row (1st row from top to bottom) and in the column (1st column from left to right), to show you

how to read the numbers in Table 2.

Table 1. Input-Output Transaction Table

Table 2. Input-Output Transactions Table with Numbers

As you can see, the agricultural sector's row in Table 3-2 runs as follows:

(1 + 2 + 1) + 6 = 10

money. Thus, we use common units such as US\$ million or € million.

Intermediate goods + Final Demand = Total Output

This means that in the course of that year, the agricultural sector's sales within the same sector were 1, its sales to the manufacturing sector were 2, its sales to the service sector were 1, and its sales to Final Demand (FD) were 6, which amounts to a total output of 10. To put

Intermediate goods are sold to the industrial sector as necessary ingredients, or as input for this sector. By looking at the row of the agricultural sector, you can see the destination of this sector's output. In this case, a total of 4 agricultural goods provided the industrial sectors with intermediate goods and the total of 6 went to final demands. This table is called a "transaction table" as it captured actual amount of transactions between sectors. Each industrial sector may have different methods to record their sales volumes, such as numbers of bushels, cars, barrels, or numbers of visitors, attendees, but in the transaction table, it is more convenient to use common monetary values that reflect the exchange of goods and

**[Interpretations of a Row in Transaction Table]** 

[1 2 1 6 10]

the number in equation,

We see that the agricultural sector's column in Table 2 has

This can be interpreted as follows: the internal purchases of the agricultural sector were 1, its purchases from the manufacturing sector were 1, its purchases from the service sector were 2, and its purchases from Value Added were 6, thus making the total agricultural sector's purchases of 10. Value Added consists of labor, capital and imports etc, which we will examine later. This column shows something very useful in order to understand the structure of each industrial sector, because the numbers that you see in the column depict all the required input, with the bottom number showing the total input for the sector, in the course of one year.

For hospitality students, there is an easier way to understand what the column means: it can be regarded as a list of all the required ingredients for a recipe. Yes, consider it as a recipe! For the agricultural sector, it required 1 ingredient (goods and/or services) from the same sector, 1 ingredient (goods and/or services) from the manufacturing sector, 2 ingredients (goods and/or services) from the service sector, and 6 from value added, which refers to other required "ingredients" such as labor, capital, and imported goods. This amounts to 10 required ingredients within a year.

It is great if you noticed that the total output amount equals the total input amount. In this case, the total output of 10, shown in the far right column, equals the total input of 10, shown in the bottom row. In order to produce a total output of 10, the agricultural sector required a total input of 10 (total output = total input) which consists of a total of 4 intermediate goods from the industrial sectors and 6 from value added.

#### **2.2 Necessary steps from transaction table to leontief inverse matrix**

A review of some basic mathematics involving matrix notations and algebra will make things easier at a later stage. The mathematics component has been reduced to a minimum, albeit essential for hospitality and tourism students, who may even find some of it enjoyable. There follow the inserts of these reviews.

#### **2.2.1 Minimum knowledge required for matrix operations for I-O modeling**

At a glance, matrix notations may look threatening to students in hospitality and tourism. However, a minimum level of knowledge is required to conduct series of matrix operations. In order to simplify my explanation, let's use 2 x 2 matrices. This section also follows the explanation made in the Hara (2008).

Introduction to Input-Output Framework for Analysis of Tourism as an Industry 55

If you understand that the outcome of (n x n) x (n x 1) would yield a matrix of (n x 1), you

Let us go back to 2 x 2 matrices, in order to learn the minimum required level of the matrix

, *ab e f B C cd gh* 

How do we calculate B x C? Unfortunately, it is not as straightforward as in the case of

I would recommend that you pick up a pencil and paper to follow the sequence of calculations, so that you may detect some pattern in the sequences. Let's try the following

> , *ab e B D cd f*

In the Input-Output modeling, you can get through the basic level by remembering how to calculate the multiplication matrix of [n x n square matrix] by [n x 1 column vector], which yields [n x 1 column vector]. There reason for this will appear later on in this

What is an inverse? Which inverse do we have to know, in order to understand Input-Output modeling? The multiplicative inverse of x is a certain number which yields 1 when

Now, we have to review some algebra on exponentiation. How much is 2 squared? How

1 1 0.5 <sup>2</sup> <sup>2</sup>

2 22 4 2 222 8 

2 3 (2 x 1 column vector)

(2 x 2 square matrix)

And the result would be

operations of multiplication.

addition or subtraction.

chapter.

**[Inverse of a matrix]** 

much is 2 cubed?

B and E would be (3 x 3) x (3 x 1) a matrix of (3 x 1) B and G would be (3 x 3) x (3 x 3) a matrix of (3 x 3)

are in good shape to proceed with minimum knowledge.

*ae bga f bh B C c e d gc f d h* 

multiplication of B (2 x 2 square matrix) by D (2 x 1 column vector), where

*aeb f B D*

multiplied by x. Inverse of 2 is 1/2, as 2 x 1/2 = 1.

What about <sup>1</sup> 2 ? This can be rewritten as 1

*cedf* 

#### **[Matrix addition]**

We assume that there are two matrices whose numbers of rows and columns are the same. In our case, we have two matrices of B and C, both of which are square matrices of 2 x 2. You can add or subtract the matrices when the numbers of rows and columns are identical.

$$B = \begin{bmatrix} a & b \\ c & d \end{bmatrix}, C = \begin{bmatrix} e & f \\ g & h \end{bmatrix}$$

Then, B + C simply amounts to adding the corresponding elements together.

$$B + C = \begin{bmatrix} a+e & b+f \\ c+g & d+h \end{bmatrix}$$

#### **[Matrix Subtraction]**

What about B – C? Similarly to the addition, corresponding elements of C are subtracted from the elements of B.

$$B - C = \begin{bmatrix} a - e & b - f \\ c - g & d - h \end{bmatrix}$$

So far, matrix operations only look scary but it is not that bad.

#### **[Matrix Multiplication]**

Multiplication operation is not as easy as the previous operations. As a basic rule, one can only multiply a matrix when the number of columns of the matrix to be multiplied is the same as the number of rows in the multiplying matrix. The result of the multiplication yields a matrix whose number of rows equals the number of rows of the multiplied matrix, and whose number of columns equals the number of columns of the multiplying matrix. There follow a few examples.

If B is a 3 x 3 square matrix, which of the following matrix can be used with it?

$$D = \begin{bmatrix} h & i & j \end{bmatrix}\_{\prime}, \; E = \begin{bmatrix} k \\ l \\ m \end{bmatrix}\_{\prime}, \; F = \begin{bmatrix} n & o \\ p & q \end{bmatrix}\_{\prime}, \; G = \begin{bmatrix} r & s & t \\ u & v & w \\ x & y & z \end{bmatrix} ?$$

The answer can be obtained when you identify the numbers of rows and columns of each matrix. D = (1 x 3), E = (3 x 1), F = (2 x 2) and G = (3 x 3).

In other words:

B and D would be (3 x 3) x (1 x 3) Unsuitable B and E would be (3 x 3) x (3 x 1) Suitable (conformable) B and F would be (3 x 3) x (2 x 2) Unsuitable B and G would be (3 x 3) x (3 x 3) Suitable (conformable) And the result would be

54 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

We assume that there are two matrices whose numbers of rows and columns are the same. In our case, we have two matrices of B and C, both of which are square matrices of 2 x 2. You can add or subtract the matrices when the numbers of rows and columns are

> , *ab e f B C cd gh*

*a eb f B C*

What about B – C? Similarly to the addition, corresponding elements of C are subtracted

*a eb f B C*

Multiplication operation is not as easy as the previous operations. As a basic rule, one can only multiply a matrix when the number of columns of the matrix to be multiplied is the same as the number of rows in the multiplying matrix. The result of the multiplication yields a matrix whose number of rows equals the number of rows of the multiplied matrix, and whose number of columns equals the number of columns of the multiplying matrix.

,, , ?

 

The answer can be obtained when you identify the numbers of rows and columns of each

*D hi j E l F G uvw p q*

*k rst n o*

*m xyz*

If B is a 3 x 3 square matrix, which of the following matrix can be used with it?

*c gd h* 

*c gd h* 

Then, B + C simply amounts to adding the corresponding elements together.

So far, matrix operations only look scary but it is not that bad.

matrix. D = (1 x 3), E = (3 x 1), F = (2 x 2) and G = (3 x 3).

B and E would be (3 x 3) x (3 x 1) Suitable (conformable)

B and G would be (3 x 3) x (3 x 3) Suitable (conformable)

B and D would be (3 x 3) x (1 x 3) Unsuitable

B and F would be (3 x 3) x (2 x 2) Unsuitable

**[Matrix addition]** 

**[Matrix Subtraction]** 

from the elements of B.

**[Matrix Multiplication]** 

There follow a few examples.

In other words:

identical.

B and E would be (3 x 3) x (3 x 1) a matrix of (3 x 1) B and G would be (3 x 3) x (3 x 3) a matrix of (3 x 3)

If you understand that the outcome of (n x n) x (n x 1) would yield a matrix of (n x 1), you are in good shape to proceed with minimum knowledge.

Let us go back to 2 x 2 matrices, in order to learn the minimum required level of the matrix operations of multiplication.

$$B = \begin{bmatrix} a & b \\ c & d \end{bmatrix}, \text{ C = } \begin{bmatrix} e & f \\ g & h \end{bmatrix}$$

How do we calculate B x C? Unfortunately, it is not as straightforward as in the case of addition or subtraction.

$$B \times \mathbb{C} = \begin{bmatrix} a \times e + b \times g & a \times f + b \times h \\ c \times e + d \times g & c \times f + d \times h \end{bmatrix} \text{(2 \times 2 square matrix)}$$

I would recommend that you pick up a pencil and paper to follow the sequence of calculations, so that you may detect some pattern in the sequences. Let's try the following multiplication of B (2 x 2 square matrix) by D (2 x 1 column vector), where

$$B = \begin{bmatrix} a & b \\ c & d \end{bmatrix}, \ D = \begin{bmatrix} e \\ f \end{bmatrix}$$

$$B \times D = \begin{bmatrix} a \times e + b \times f \\ c \times e + d \times f \end{bmatrix} \text{(2 \times 1 column vector)}$$

In the Input-Output modeling, you can get through the basic level by remembering how to calculate the multiplication matrix of [n x n square matrix] by [n x 1 column vector], which yields [n x 1 column vector]. There reason for this will appear later on in this chapter.

#### **[Inverse of a matrix]**

What is an inverse? Which inverse do we have to know, in order to understand Input-Output modeling? The multiplicative inverse of x is a certain number which yields 1 when multiplied by x. Inverse of 2 is 1/2, as 2 x 1/2 = 1.

Now, we have to review some algebra on exponentiation. How much is 2 squared? How much is 2 cubed?

$$\begin{aligned} \mathbf{2}^2 &= \mathbf{2} \times \mathbf{2} = \mathbf{4} \\ \mathbf{2}^3 &= \mathbf{2} \times \mathbf{2} \times \mathbf{2} = \mathbf{8} \end{aligned}$$

What about <sup>1</sup> 2 ? This can be rewritten as 1 1 1 0.5 <sup>2</sup> <sup>2</sup>

Introduction to Input-Output Framework for Analysis of Tourism as an Industry 57

(Intermediate goods + Final Demands = Total Output) AX is the portion of Total Output which is traded within the industrial sector as intermediate goods; thus A is greater than 0 but smaller than 1. It is important that you still

When we move the AX to the right side of the equation, the sign before AX changes from

(Final Demands = Total Output – Intermediate Goods) Since we have a common X on the right side of the equation, we pull common X out to make it as follows. As you saw earlier, you may consider the I-matrix as 1 in normal algebra.

(Final Demand = Leftover portion of the Total Output used for the Intermediate Goods) We divide both sides of the equation by the same (I – A), since the equation will hold as long

> 

*Y I AX IA IA*

Erase (I – A) from both numerator and denominator of the fraction on the right side of the

(Final Demand divided by the portion representing leftover used for Intermediate Goods = Total Output)

(If an inverse of the portion representing leftover used for Intermediate Goods is multiplied

We will add two final details to this equation. First of all, we will simply add ∆ ("delta"), which can be read as ∆ = "change in", so that we can make this equation more relevant to Input-Output based economic impact analysis. Secondly, the <sup>1</sup> *I A* part can be read as

 *<sup>Y</sup> <sup>X</sup>*

We recall a rule in algebra regarding inverse notations: , and apply it to equation 6.

remember what we discussed doing equation 3.1 conceptually, in order to proceed.

plus to minus.

equation.

as both sides are divided by the same thing.

by Final Demand, it would equal Total Output)

"the Leontief Inverse Matrix", so that...

AX + Y = X ……. (2)

Y = X – AX…… (3)

Y = (I – A) X….. (4)

(5)

*I A* ….. (6)

<sup>1</sup> *IA YX* (7)

<sup>1</sup> *IA Y X* (8)

If 2 is multiplied by its inverse 0.5, 2 x 0.5 = 1

In the same manner, in a matrix notation, we can say that a square matrix A multiplied by its inverse 1/A or should yield an "Identity Matrix", which is the equivalent of 1 in matrix operations.

The actual calculation of an inverse matrix looks more scary than the multiplication.

$$A = \begin{bmatrix} a & b \\ c & d \end{bmatrix}, \text{ then, } A^{-1} = \frac{1}{a \times d - b \times c} \begin{bmatrix} d & -b \\ -c & a \end{bmatrix}$$

As you can see, a square matrix is not invertible if ad – bc = 0 In other words, when (a x d) minus (b x c) equals zero, you cannot calculate the inverse. So, you may want to make sure that ad – bc ≠ 0 before proceeding with other calculations.

Let's look at one example. If we assume that:

$$A = \begin{bmatrix} 1 & 4 \\ 1 & 3 \end{bmatrix}'$$

what is A-inverse?

$$A^{-1} = \frac{1}{a \times d - b \times c} \begin{bmatrix} d & -b \\ -c & a \end{bmatrix} = \frac{1}{1 \times 3 - 4 \times 1} \begin{bmatrix} 3 & -4 \\ -1 & 1 \end{bmatrix} = \frac{1}{3 - 4} \begin{bmatrix} 3 & -4 \\ -1 & 1 \end{bmatrix} = \begin{bmatrix} -3 & 4 \\ 1 & -1 \end{bmatrix}$$

ad – bc = -1. In other words, it is possible to calculate the inverse of the A matrix.

By definition, A x A-inverse should yield an Identified Matrix (I-Matrix), which works like 1 in normal algebra, similar to the case where 2 x 1/2 = 1 (If a number is multiplied by its multiplicative inverse, the result will be 1). I-matrix is the matrix whose elements are all zeros, except those along the diagonal line from top left to bottom right. Let us verify this by multiplying A by A-inverse while you still recall how to multiply matrices.

$$A \times A^{-1} = \begin{bmatrix} 1 & 4 \\ 1 & 3 \end{bmatrix} \times \begin{bmatrix} -3 & 4 \\ 1 & -1 \end{bmatrix} = \begin{bmatrix} 1 \times -3 + 4 \times 1 & 1 \times 4 + 4 \times -1 \\ 1 \times -3 + 3 \times 1 & 1 \times 4 + 3 \times -1 \end{bmatrix} = \begin{bmatrix} 1 & 0 \\ 0 & 1 \end{bmatrix}$$

When you calculate everything right with your pen and paper, you feel as if you had pulled out a beautiful pigeon (an I-Matrix) out of a hat. This also tells you that an I-Matrix is just like 1 in algebra. You are now ready for learning the I-O modeling. If you are not certain about what we did, please take the time to review the above section, as it is considered an absolute minimum, in order to understand I-O modeling.

#### **2.2.2 Steps alternatively shown in matrix notations**

Based on what we have learned so far, let us put down the process in simple matrix notations.

First of all, we will put down some notations. We use X to represent the total output. Total Output (X) consists of intermediate goods (AX: where 0 < A < 1), and Final Demand (Y). The equation (1) can be expressed as

In the same manner, in a matrix notation, we can say that a square matrix A multiplied by its inverse 1/A or should yield an "Identity Matrix", which is the equivalent of 1 in matrix

<sup>1</sup> <sup>1</sup> , , *a b d b*

*c d adbc c a* 

> 1 4 1 3 *<sup>A</sup>*

<sup>1</sup> 1 11 3 4 3 4 34

By definition, A x A-inverse should yield an Identified Matrix (I-Matrix), which works like 1 in normal algebra, similar to the case where 2 x 1/2 = 1 (If a number is multiplied by its multiplicative inverse, the result will be 1). I-matrix is the matrix whose elements are all zeros, except those along the diagonal line from top left to bottom right. Let us verify this by

> <sup>1</sup> 14 3 4 1 3 4 1 1 4 4 1 1 0 13 1 1 1 3 3114 3 1 01

*A A*

When you calculate everything right with your pen and paper, you feel as if you had pulled out a beautiful pigeon (an I-Matrix) out of a hat. This also tells you that an I-Matrix is just like 1 in algebra. You are now ready for learning the I-O modeling. If you are not certain about what we did, please take the time to review the above section, as it is considered an

Based on what we have learned so far, let us put down the process in simple matrix

First of all, we will put down some notations. We use X to represent the total output. Total Output (X) consists of intermediate goods (AX: where 0 < A < 1), and Final Demand (Y). The

ad – bc = -1. In other words, it is possible to calculate the inverse of the A matrix.

multiplying A by A-inverse while you still recall how to multiply matrices.

,

13 41 3 4 11 11 1 1

As you can see, a square matrix is not invertible if ad – bc = 0 In other words, when (a x d) minus (b x c) equals zero, you cannot calculate the inverse. So, you may want to make sure

The actual calculation of an inverse matrix looks more scary than the multiplication.

*A then A*

that ad – bc ≠ 0 before proceeding with other calculations.

*d b*

absolute minimum, in order to understand I-O modeling.

**2.2.2 Steps alternatively shown in matrix notations** 

*adbc c a*

Let's look at one example. If we assume that:

If 2 is multiplied by its inverse 0.5, 2 x 0.5 = 1

operations.

what is A-inverse?

notations.

equation (1) can be expressed as

*A*

$$\mathbf{A}\mathbf{X} + \mathbf{Y} = \mathbf{X} \dots \dots \tag{2}$$

(Intermediate goods + Final Demands = Total Output)

AX is the portion of Total Output which is traded within the industrial sector as intermediate goods; thus A is greater than 0 but smaller than 1. It is important that you still remember what we discussed doing equation 3.1 conceptually, in order to proceed.

When we move the AX to the right side of the equation, the sign before AX changes from plus to minus.

$$\mathbf{Y} = \mathbf{X} - \mathbf{A}\mathbf{X} \dots \tag{3}$$

#### (Final Demands = Total Output – Intermediate Goods)

Since we have a common X on the right side of the equation, we pull common X out to make it as follows. As you saw earlier, you may consider the I-matrix as 1 in normal algebra.

$$\mathbf{Y} = (\mathbf{I} - \mathbf{A}) \,\, \mathbf{X} ... \,\, \tag{4}$$

(Final Demand = Leftover portion of the Total Output used for the Intermediate Goods)

We divide both sides of the equation by the same (I – A), since the equation will hold as long as both sides are divided by the same thing.

$$\frac{Y}{\left(I - A\right)} = \frac{\left(I - A\right)X}{\left(I - A\right)}\tag{5}$$

Erase (I – A) from both numerator and denominator of the fraction on the right side of the equation.

$$\frac{Y}{\left(I - A\right)} = X \quad \dots \tag{6}$$

(Final Demand divided by the portion representing leftover used for Intermediate Goods = Total Output)

We recall a rule in algebra regarding inverse notations: , and apply it to equation 6.

$$\left(I - A\right)^{-1}Y = X\tag{7}$$

(If an inverse of the portion representing leftover used for Intermediate Goods is multiplied by Final Demand, it would equal Total Output)

We will add two final details to this equation. First of all, we will simply add ∆ ("delta"), which can be read as ∆ = "change in", so that we can make this equation more relevant to Input-Output based economic impact analysis. Secondly, the <sup>1</sup> *I A* part can be read as "the Leontief Inverse Matrix", so that...

$$\left(I - A\right)^{-1} \Delta Y = \Delta X \tag{8}$$

Introduction to Input-Output Framework for Analysis of Tourism as an Industry 59

that the numbers of rows and columns are the same, such as a matrix of 3 x 3), the Value Added row (labor, capital and others such as imports) and the Total Input rows which

This process is rather simple. You take each required input in each column to be divided by

For example, let's take the agricultural sector's column, the first column from the left. The relative input from the agricultural sector within the same sector would be calculated as 1 divided by 10 = 1/10 = 0.1; the relative input from the manufacturing sector to the agricultural sector would be calculated as 1 divided by 10 = 1/10 = 0.1; and the relative input from the service sector to the agricultural sector would be calculated as 2 divided by 10 = 2/10 = 0.2. The relative input from the value added (=labor, capital, imports and others) to the agricultural sector would be calculated as 6 divided by 10 = 6/10 = 0.6. Now, repeat

Once the calculations are complete, you can see all the transaction amounts converted into relative input for each sector's total input. What you see is each sector's relative input to the total input, in relative terms. After the standardization, the table should look like

Now, you select the inter-industry part of the matrix only, in order to get a square matrix (i.e. a matrix in which the number of rows equals the number of columns - in our case, 3 x 3). This standardized square matrix is called an A-matrix. It was obtained by standardizing each transaction amount as required input, in terms of total input, and only leaving the part with elements of the inter-industry square matrix. The A-matrix is shown

this process for the manufacturing sector column and the service sector column.

Table 4. Standardized Transactions Matrix with Inter-industry Columns only

**ii.** Creating a standardized A-matrix from transaction table

consist of the sum of each column.

**i. Standardization process** 

the column total (= Total Input).

Table 4.

in Table 5.

Table 5. A-Matrix

(Leontief Inverse Matrix multiplied by a change in Final Demand yields a change in Total Output)

These are the steps that we would take to reach the famous Leontief Inverse Matrix and subsequent impact analyses.

Recall that the A is (0 < A < 1) and that I is like number 1. So the Leontief Inverse part would be something bigger than 1. Now look at how the model can be applied to a tourism setting.

If ∆Y is the growing amount of tourism expenditures in your region, then due to interindustrial transactions expressed as a Leontief Inverse Matrix, the Total Output of each industrial sector would increase more than the increase in the amount of tourist expenditures. For example, if tourists book hotel rooms, more linen, shampoos, soaps, water, electricity must be purchased by the hotel. Does a tourist spend money only for a hotel room? Tourists use transport services, which means that more gas, oil, and tires will be used, together with gifts, refreshments, and meals. They consume more apple juice, which means that more apples and new empty bottles are required to meet the increased level of Final Demand for various output generated by tourist expenditures.

#### **2.2.3 Simple examples of matrix operations for I-O modeling**

Now that we have covered the conceptual and mathematical parts of the Input-Output modeling, we can resume the matrix presentations of the tables. From the transaction table, we will move step by step towards the Leontief Inverse Matrix, which will enable you to calculate series of multipliers.

Important Concept of "Endogenous versus Exogenous"

First of all, we should learn some concepts related to being inside the model and being outside the model. The word "endogenous" means being inside the model, and the word "exogenous" means being outside of the model. In the input-output modeling, we will retain the inter-industry transactions parts as endogenous, and will leave the Final Demand and Total Output columns aside, as exogenous from further processes, as shown in Table 3.


Table 3. Transactions Table with Inter-Industry Columns only

We now have inter-industry columns only, having taken out the Final Demand and Total Output columns from Table 2. In the sample of Table 3, the matrix has 5 rows and 3 columns (i.e. a 5 x 3 matrix). In other words, we have an inter-industry square matrix (which means that the numbers of rows and columns are the same, such as a matrix of 3 x 3), the Value Added row (labor, capital and others such as imports) and the Total Input rows which consist of the sum of each column.

#### **i. Standardization process**

58 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

(Leontief Inverse Matrix multiplied by a change in Final Demand yields a change in Total Output) These are the steps that we would take to reach the famous Leontief Inverse Matrix and

Recall that the A is (0 < A < 1) and that I is like number 1. So the Leontief Inverse part would be something bigger than 1. Now look at how the model can be applied to a

If ∆Y is the growing amount of tourism expenditures in your region, then due to interindustrial transactions expressed as a Leontief Inverse Matrix, the Total Output of each industrial sector would increase more than the increase in the amount of tourist expenditures. For example, if tourists book hotel rooms, more linen, shampoos, soaps, water, electricity must be purchased by the hotel. Does a tourist spend money only for a hotel room? Tourists use transport services, which means that more gas, oil, and tires will be used, together with gifts, refreshments, and meals. They consume more apple juice, which means that more apples and new empty bottles are required to meet the increased level of

Now that we have covered the conceptual and mathematical parts of the Input-Output modeling, we can resume the matrix presentations of the tables. From the transaction table, we will move step by step towards the Leontief Inverse Matrix, which will enable you to

First of all, we should learn some concepts related to being inside the model and being outside the model. The word "endogenous" means being inside the model, and the word "exogenous" means being outside of the model. In the input-output modeling, we will retain the inter-industry transactions parts as endogenous, and will leave the Final Demand and Total Output columns aside, as exogenous from further processes, as shown

We now have inter-industry columns only, having taken out the Final Demand and Total Output columns from Table 2. In the sample of Table 3, the matrix has 5 rows and 3 columns (i.e. a 5 x 3 matrix). In other words, we have an inter-industry square matrix (which means

Final Demand for various output generated by tourist expenditures.

**2.2.3 Simple examples of matrix operations for I-O modeling** 

Important Concept of "Endogenous versus Exogenous"

Table 3. Transactions Table with Inter-Industry Columns only

subsequent impact analyses.

calculate series of multipliers.

in Table 3.

tourism setting.

This process is rather simple. You take each required input in each column to be divided by the column total (= Total Input).

For example, let's take the agricultural sector's column, the first column from the left. The relative input from the agricultural sector within the same sector would be calculated as 1 divided by 10 = 1/10 = 0.1; the relative input from the manufacturing sector to the agricultural sector would be calculated as 1 divided by 10 = 1/10 = 0.1; and the relative input from the service sector to the agricultural sector would be calculated as 2 divided by 10 = 2/10 = 0.2. The relative input from the value added (=labor, capital, imports and others) to the agricultural sector would be calculated as 6 divided by 10 = 6/10 = 0.6. Now, repeat this process for the manufacturing sector column and the service sector column.

Once the calculations are complete, you can see all the transaction amounts converted into relative input for each sector's total input. What you see is each sector's relative input to the total input, in relative terms. After the standardization, the table should look like Table 4.


Table 4. Standardized Transactions Matrix with Inter-industry Columns only

**ii.** Creating a standardized A-matrix from transaction table

Now, you select the inter-industry part of the matrix only, in order to get a square matrix (i.e. a matrix in which the number of rows equals the number of columns - in our case, 3 x 3). This standardized square matrix is called an A-matrix. It was obtained by standardizing each transaction amount as required input, in terms of total input, and only leaving the part with elements of the inter-industry square matrix. The A-matrix is shown in Table 5.


Table 5. A-Matrix

#### **iii.** Reviewing notation for matrix elements

Although we try to minimize the use of mathematical formulas, allow me to introduce a few which may make our life easier. As you saw in the explanation of the standardization, indicating the intersection between the agricultural sector row and the manufacturing sector column, i.e. of 3rd row and 1st column, takes up a lot of space. We can use the small subscript to be suffixed at the bottom, to display the relevant location in the matrix in the order of rows and columns. Ideally, r and c as "rc" can be used but it is already common to use "ij" to represent relative locations in row and column. By using the notation, the processes of standardization can be expressed as

$$\mathbf{a}\_{ij} = \bigvee\_{\mathbf{X}\_{j}}^{\mathbf{Z}\_{ij}} \Big/ \mathbf{X}\_{j} \tag{9}$$

Introduction to Input-Output Framework for Analysis of Tourism as an Industry 61

Since this part is quite dense, even for a relatively small matrix (3 x 3), you are recommended to refer to step 7 in the example shown in Figure 2, where you will learn how to calculate the inverse matrix in MS-Excel. What you will be calculating here is the famous Leontief Inverse Matrix, as shown in Table 8. For those who still wish to calculate the inverse matrix of 3 x 3 by hand, or who did not suffer too much going through point 3.4.1, the process can be found in any matrix algebra textbook, linear algebra textbook, or through online resources such as Google, Yahoo etc. I will also post one possible calculation process

of 3 x 3 matrix inverse at the end of this chapter, as an appendix.

Table 8. Inverse of the (I – A) Matrix (Leontief Inverse Matrix)

**vi. Calculating an inverse of the (I – A) matrix to create Leontief inverse matrix**

**vii. Using the Leontief Inverse Matrix: Simple Output Multiplier Analyses** 

Output. We can put the combined knowledge into action, as follows:

more specifically, "a final demand column vector".

Let's put the Leontief Inverse Matrix into action. Recall the multiplication rule in matrix algebra that when you have a (n x n) square matrix: it can only be multiplied by a suitable matrix, i.e. one whose number of rows equals n. Also recall equation 3.8, according to which a Leontief Inverse Matrix multiplied by a change in Final Demand yields a change in Total

<sup>1</sup> *IA Y X* (10)

(3 x 3) x (3 x 1) = (3 x 1)

(Leontief Inverse Matrix x Change in Final Demand = Change in Total Output) By introducing the concept of incremental change, we can feed the model with the change in final demand, to see how the economy responds with its total output. The change in final demand is also called a shock, an initial shock, a direct shock, direct effect or direct impact. Using the same industrial sectors in a row as in the Leontief Inverse Matrix, you have a (3 x 1) matrix. Since there is only one column, we can call this matrix as "a column-vector" or,

Table 7. (I –A)-Matrix

This indicates that each standardized element in the A-matrix *ij a* is calculated by having the corresponding elements in the transaction matrix *ij z* divided by the column sum (= total input) of the corresponding column *Xj* . *ij z* represents each element in the transactions table, i.e. the actual amount of transactions recorded in the transaction table, as shown in table 3-2. For example, the cell where the service sector row intersects with the agricultural sector column in the transaction table, or the element at the 3rd row, 1st column, can be expressed simply as 31 *z* , which is 2, and the 31 *a* can be calculated by taking the ( = 2) divided by the sum of the 1st column, which is the Total Input of the agricultural sector *X*<sup>1</sup> (=10), which is 0.2. Transaction tables are thus sometimes called Z-matrices.

#### **iv. Creating an I-matrix (Identity matrix)**

The I-Matrix is the square matrix which works like 1 (one), as we know from algebra, such as 1 x 2 = 2, 0.5 x 2 = 1, 1 – 0.5 = 0.5. Although the I-matrix works like 1, it looks different from 1, as it is a matrix. The I-matrix looks like a square matrix whose elements are all zeros, except for the diagonal elements from top left to bottom right, which has 1s. It is a square matrix where = 0 except when i = j then = 1. Table 6 shows a 3 x 3 I-matrix.


Table 6. I-Matrix table (3 x 3)

#### **v. Subtracting the A-matrix from an I-matrix**

By subtracting an square A-matrix from an square I-Matrix, we will have a (I - A) matrix. In our example, let's subtract the A-Matrix shown in Table 5 from the I-Matrix shown in Table 6. For example, if you look at the first row, first column, the I matrix has 1 and the A matrix has 0.1. Thus, the first row, first column of the (I – A) matrix will have (1 – 0.1) = 0.9. Complete the subtraction work for all the elements. The completed Matrix should look like one shown in Table 7.

Since this part is quite dense, even for a relatively small matrix (3 x 3), you are recommended to refer to step 7 in the example shown in Figure 2, where you will learn how to calculate the inverse matrix in MS-Excel. What you will be calculating here is the famous Leontief Inverse Matrix, as shown in Table 8. For those who still wish to calculate the inverse matrix of 3 x 3 by hand, or who did not suffer too much going through point 3.4.1, the process can be found in any matrix algebra textbook, linear algebra textbook, or through online resources such as Google, Yahoo etc. I will also post one possible calculation process of 3 x 3 matrix inverse at the end of this chapter, as an appendix.


Table 7. (I –A)-Matrix

60 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Although we try to minimize the use of mathematical formulas, allow me to introduce a few which may make our life easier. As you saw in the explanation of the standardization, indicating the intersection between the agricultural sector row and the manufacturing sector column, i.e. of 3rd row and 1st column, takes up a lot of space. We can use the small subscript to be suffixed at the bottom, to display the relevant location in the matrix in the order of rows and columns. Ideally, r and c as "rc" can be used but it is already common to use "ij" to represent relative locations in row and column. By using the notation, the

> *ij ij <sup>j</sup> z*

This indicates that each standardized element in the A-matrix *ij a* is calculated by having the corresponding elements in the transaction matrix *ij z* divided by the column sum (= total input) of the corresponding column *Xj* . *ij z* represents each element in the transactions table, i.e. the actual amount of transactions recorded in the transaction table, as shown in table 3-2. For example, the cell where the service sector row intersects with the agricultural sector column in the transaction table, or the element at the 3rd row, 1st column, can be expressed simply as 31 *z* , which is 2, and the 31 *a* can be calculated by taking the ( = 2) divided by the sum of the 1st column, which is the Total Input of the agricultural sector *X*<sup>1</sup>

The I-Matrix is the square matrix which works like 1 (one), as we know from algebra, such as 1 x 2 = 2, 0.5 x 2 = 1, 1 – 0.5 = 0.5. Although the I-matrix works like 1, it looks different from 1, as it is a matrix. The I-matrix looks like a square matrix whose elements are all zeros, except for the diagonal elements from top left to bottom right, which has 1s. It is a square

By subtracting an square A-matrix from an square I-Matrix, we will have a (I - A) matrix. In our example, let's subtract the A-Matrix shown in Table 5 from the I-Matrix shown in Table 6. For example, if you look at the first row, first column, the I matrix has 1 and the A matrix has 0.1. Thus, the first row, first column of the (I – A) matrix will have (1 – 0.1) = 0.9. Complete the subtraction work for all the elements. The completed Matrix should look like

(=10), which is 0.2. Transaction tables are thus sometimes called Z-matrices.

matrix where = 0 except when i = j then = 1. Table 6 shows a 3 x 3 I-matrix.

*<sup>a</sup> <sup>X</sup>* (9)

**iii.** Reviewing notation for matrix elements

processes of standardization can be expressed as

**iv. Creating an I-matrix (Identity matrix)** 

Table 6. I-Matrix table (3 x 3)

one shown in Table 7.

**v. Subtracting the A-matrix from an I-matrix** 

**vi. Calculating an inverse of the (I – A) matrix to create Leontief inverse matrix**


Table 8. Inverse of the (I – A) Matrix (Leontief Inverse Matrix)

#### **vii. Using the Leontief Inverse Matrix: Simple Output Multiplier Analyses**

Let's put the Leontief Inverse Matrix into action. Recall the multiplication rule in matrix algebra that when you have a (n x n) square matrix: it can only be multiplied by a suitable matrix, i.e. one whose number of rows equals n. Also recall equation 3.8, according to which a Leontief Inverse Matrix multiplied by a change in Final Demand yields a change in Total Output. We can put the combined knowledge into action, as follows:

$$\left(I - A\right)^{-1} \Delta Y = \Delta X$$

$$(\mathbf{3} \times \mathbf{3}) \times (\mathbf{3} \times \mathbf{1}) = (\mathbf{3} \times \mathbf{1})$$

(Leontief Inverse Matrix x Change in Final Demand = Change in Total Output)

By introducing the concept of incremental change, we can feed the model with the change in final demand, to see how the economy responds with its total output. The change in final demand is also called a shock, an initial shock, a direct shock, direct effect or direct impact.

Using the same industrial sectors in a row as in the Leontief Inverse Matrix, you have a (3 x 1) matrix. Since there is only one column, we can call this matrix as "a column-vector" or, more specifically, "a final demand column vector".

Introduction to Input-Output Framework for Analysis of Tourism as an Industry 63

Remember, what you read here is like a recipe book, in that the sense that reading it will not turn you into a good chef. The spread-sheets have been prepared in a way that you can

> **Minimum Knowledge of Matrix Operations For Tourism Industry Analysis**

> > Tad Hara, PhD

concentrate on the actual calculations of what you have read.

1 (Row by Column) Matrix

5 **7** (<--often referred as "column vector")

1 **453** (<--often referred as "row vector")

When R and C are the same, the matrix is called "Square Matrix"

If two matrices A and B are of the same order, we can define a new matrix C as A + B. Matrix addition simply add corresponding elements in the two

(2 x 2) (2 x 2) (2 x 2)

(2 x 2) (2 x 2) (2 x 2)

Fig. 1. Minimum Knowledge of Matrix Operations for Tourism Industry Analysis

**1 MATRIX**

column row 1 2 3 1 **242** 2 **326** 3 **247**

> > 123

Ex: 2 x 2, 3 x 3, 9 x 9, n x n …

matrices A and B to obtain the elements of C.

5 -3 4 2

2 5 2 -3 3 4 -1 4

A = 2 4 B = -3 6 then, C =

Let's use 2 x 2 matrices as examples.

**3. MATRIX SUBTRACTION**

**2. MATRIX ADDITION**

Let's conduct three cases in which we give a positive increase of 1 to each of the three industrial sectors, one by one. In this case, the final demand column vector (numbers will be shown as a column) would be as follows:

$$\begin{array}{ccccc} \text{Case 1} & \begin{bmatrix} 1 \\ 0 \\ 0 \end{bmatrix} & = & \mathbf{Case 2} & \begin{bmatrix} 0 \\ 1 \\ 0 \end{bmatrix} & = & \mathbf{Case 3} & \begin{bmatrix} 0 \\ 0 \\ 1 \end{bmatrix} \\ \end{array} \\ \text{(a) } \begin{bmatrix} 0 \\ 0 \\ 1 \end{bmatrix} \end{array} = ;$$

In Case 1, we assume that the final demand for the agricultural sector's output is increased by 1 (if you prefer to put some meaning, say US\$ 1 million, assuming the I-O transaction table was shown in US\$ million units). In Case 2, we assume that the final demand for the manufacturing sector's output is increased by 1, and in Case 3, we assume that the final demand for the services sector's output is increased by 1.

Following this process, you can calculate the Leontief Inverse Matrix, and the last calculation in which you multiply the Leontief Inverse Matrix by a certain change in final demand , expressed in the column vector, will give you the change in total output.

Figure 1 Output Multipliers Calculations (Type-I)

We will learn how to interpret the results.

$$\left(I - A\right)^{-1} \Delta Y = \Delta X \tag{11}$$

$$(3 \times 3) \times (3 \times 1) = (3 \times 1)$$

(Leontief Inverse Matrix x change in Final Demand = change in Total Output)

The correct calculations would show the result as if you had just extracted each column of the three sectors, one by one. There was a special reason for using the positive 1 as change in Final Demand. Now, take the total output column vectors of each sector and sum up the numbers in the columns. The agricultural sector has 1.75, which means that a change in total output of the industrial sector will be of 1.75, if there is an increase in final demand for the agricultural sector for 1, thanks to your mastery of the required minimum level of matrix operations and series of rigorous calculations. You have an Output Multiplier of 1.75 for the agricultural sector. Repeat the same calculations for the manufacturing sector and the service sector, and you will have 2.40 and 1.66 respectively.

#### **viii. Utilization of MS-Excel**

All the process we conducted in this section can be reconstructed by using a spreadsheet program, such as MS-Excel.

I have two recommendations to make in order to turn your newly acquired knowledge into useful skills. First of all, practice basic sets of matrix operations in MS-Excel sheet called "Minimum Knowledge of Matrix Operations for Tourism Industry Analysis" which I have been using for the last 8 years in the classroom. The sheet is shown as Figure 1, but it is important that you work with these sheets on your PC.

Let's conduct three cases in which we give a positive increase of 1 to each of the three industrial sectors, one by one. In this case, the final demand column vector (numbers will be

In Case 1, we assume that the final demand for the agricultural sector's output is increased by 1 (if you prefer to put some meaning, say US\$ 1 million, assuming the I-O transaction table was shown in US\$ million units). In Case 2, we assume that the final demand for the manufacturing sector's output is increased by 1, and in Case 3, we assume that the final

Following this process, you can calculate the Leontief Inverse Matrix, and the last calculation in which you multiply the Leontief Inverse Matrix by a certain change in final demand , expressed in the column vector, will give you the change in total

(3 x 3) x (3 x 1) = (3 x 1)

(Leontief Inverse Matrix x change in Final Demand = change in Total Output) The correct calculations would show the result as if you had just extracted each column of the three sectors, one by one. There was a special reason for using the positive 1 as change in Final Demand. Now, take the total output column vectors of each sector and sum up the numbers in the columns. The agricultural sector has 1.75, which means that a change in total output of the industrial sector will be of 1.75, if there is an increase in final demand for the agricultural sector for 1, thanks to your mastery of the required minimum level of matrix operations and series of rigorous calculations. You have an Output Multiplier of 1.75 for the agricultural sector. Repeat the same calculations for the manufacturing sector and the

All the process we conducted in this section can be reconstructed by using a spreadsheet

I have two recommendations to make in order to turn your newly acquired knowledge into useful skills. First of all, practice basic sets of matrix operations in MS-Excel sheet called "Minimum Knowledge of Matrix Operations for Tourism Industry Analysis" which I have been using for the last 8 years in the classroom. The sheet is shown as Figure 1, but it is

<sup>1</sup> *IA Y X* (11)

shown as a column) would be as follows:

output.

demand for the services sector's output is increased by 1.

service sector, and you will have 2.40 and 1.66 respectively.

important that you work with these sheets on your PC.

**viii. Utilization of MS-Excel** 

program, such as MS-Excel.

Figure 1 Output Multipliers Calculations (Type-I)

We will learn how to interpret the results.

Remember, what you read here is like a recipe book, in that the sense that reading it will not turn you into a good chef. The spread-sheets have been prepared in a way that you can concentrate on the actual calculations of what you have read.


Fig. 1. Minimum Knowledge of Matrix Operations for Tourism Industry Analysis

Introduction to Input-Output Framework for Analysis of Tourism as an Industry 65

4 (3 x 3) (3 x 1) -->comformable, and the answer should be (3 x 1)

"2 powerd by 2 = 4", "2 powered by 3 = 8". In Excel we write them as "2^2 = 4", "2^3 = 8"

5.0

2 1

*A A I* <sup>1</sup>

2

<sup>1</sup>

<sup>1</sup> <sup>2</sup> <sup>1</sup>

2^1

What is inverse? 2 x 0.5 = 1 So inverse of something makes the something back to 1. What is the inverse of 10? 0.1 0.1 10 1 So 2 x 0.5 = 1, 10 x 0.1 = 1, Y x Y^-1 = 1 ("Y times Y-inverse equals one") Does matrix has an equivalent of an Inverse and number ONE in normal algebra?

1 0 0 Identity matrix can be a square matrix of any size.

0 0 1 It has zeros all over except upper-left to lower-right

1 Hightlight the target matrix space A^-1 = 2 type formula [=minverse()], and move your cursor within the ( ).

(3 x 3) 4 WAIT!, before hitting enter, HOLD DOWN "CTRL" &

Let's check if A-inverse matrix is truly the inverse of A-matrix by A x A^-1 calculation.

1 Hightlight the target matrix space

Fig. 1. Minimum Knowledge of Matrix Operations for Tourism Industry Analysis

Just like 2 x 0.5 becomes 1, A x A^-1 should give us an Identity matrix.

If you get a beautiful identity matrix just above here, the pain is over.

3 click "array" in the formula, highlight the base matrix

"SHIFT" KEYS TOGETHER, then hit the "ENTER" KEY.

2 type formula [=mmult()] and move the cursor within the ( ). 3 click "array1" in the formula, highlight the first matrix, and type ",".

( 3 x 3) 4 then click "array2" in the formula, highlight the second matrix. 5 WAIT!, before hitting enter, HOLD DOWN "CTRL" & "SHIFT" KEYS TOGETHER, then hit the "ENTER" KEY.

1

2^2 2^3

B= 2 C = AB = ?

(3 x 1) Again, let Excel help us.

**5. BASIC ALGEBRA REVIEW**

**6. IDENTITY MATRIX**

**7. INVERSE MATRIX**

A = 1 3 3

(continued)

by hand can be overwhelming?

124 (3 x 3)

You can actually let Excel calculate it by typing that way.

2 powered by minus 1 (-1) creates "inverse" of 2, which is 0.5…….

It is called "Identity Matrix", which is often denoted by capital letter "I"

I = 0 1 0 (2 x 2), (3 x 3), (500 x 500) etc.

( 3 x 3) diagonal where you find 1s.

How about we create an inverse matrix by Excel, because calculation

1 2 3 This is a good old 3 x 3 matrix

How about this? "2^-1" 2^-1 = 1 = 0.5

YES. Let's start from an equivalent of number 1.


Fig. 1. Minimum Knowledge of Matrix Operations for Tourism Industry Analysis (continued)

**4. MATRIX MULTIPLICATION**

Try with 3x3 square matrices!

A= 0 1 3

C =AxB=

(3x3)

(3 x 3)

How about some examples? 242

> 251 (3 x 3)

A = 1 2 1

(continued)

4 2 -4

1 -1 2

1 2 -1 (3 x 3)

Then the target matrix will be (m x p)

A= 1 3 B= 2 4

2 0 13

UseExcel

(2 x 2) (2 x 2) (2 x 2)

1 Hightlight the target matrix space (2X2) 2 type formula [=mmult()], and move the cursor within the ( ). 3 click "array1" in the formula, highlight the first matrix, and type ",". 4 then click "array2" in the formula, highlight the second matrix.

5 WAIT!, before hitting enter, HOLD DOWN "CTRL" & "SHIFT" KEYS TOGETHER, then hit the "ENTER" KEY.

132 How about A x B ? B= -2 -2 2 (follow the procedures above)

One Rule: Matrix A is conformable to another matrix B only when the number of columns of A is equal to the number of rows of B. Then the product AB has the same number of rows as A and the same number of columns as B.

How about this way?--> (m x n) (n x p) are comformable (you can multiply them) when n = n.

Ex: (3 x 3), (3 x 1) matrices--> yes they are comformable, and the answer will be (3 x 1) (27 x 1) (1 x 3) matrices --> yes they are comformable, and the answer will be (27 x 3)

Fig. 1. Minimum Knowledge of Matrix Operations for Tourism Industry Analysis

(1x2)+(3x1) (1x4)+(3x3) (2x2)+(0x1) (2x4)+(0x3)

Excel helps you greatly!


Fig. 1. Minimum Knowledge of Matrix Operations for Tourism Industry Analysis (continued)

Introduction to Input-Output Framework for Analysis of Tourism as an Industry 67

**Introduction to "Input-Output Model" for Tourism Industry Analysis**

**them when we move to SAM)**

**normal algebra.** 

**created I-matrix.**

**1. This is the basic structure of I-O.** 

**the I-O itself.** 

**3. Here, we pick up the whole column under industry columns. Now you see 3 x 3 inter-industry matrix, and below it, Valueadded (labor,capital & others) and the Total Input. At this stage, you may forget about Value Added. (We will study** 

> **5. Take out the Inter-Industry matrix. This is called "A-matrix". You are now ready to start your magic step by step!**

**6. This matrix, with all zeros except along the upper-left~lower-right diagonal line with 1s, is called "I-matrix" (sounds "eye"-matrix). Do not worry, this matrix has the same role as 1 (one) in** 

**7. Follow the formula and let's work on (I-A). Simply subtract A-matrix from our newly** 

**4. Here, look at the table above. You take each entry within the inter-industry matrix and divide them by the column sum. Repeat for all cells in the inter-industry matrix Then the calculation will look like this.** 

**2. We fill in the data based on the macroeconomic data. Often the statistics office of the regional/ state/ national government publish these data, even** 

Total Output

Total Output

AG MNF Serv FD

AG MNF Serv FD

Agriculture 1 2 1 6 10 2 Manufacturing 1 3 2 4 10 Services 2 2 4 12 20

AG MNF Serv

Value Added 6 3 13 Total Input 10 10 20

Agriculture 1 2 1 3 Manufacturing 1 3 2 Services 2 2 4 Value Added 6 3 13 Total Input 10 10 20

Standardized AG MNF Serv Agriculture 0.1 0.2 0.05 Manufacturing 0.1 0.3 0.1 4 Services 0.2 0.2 0.2 Value Added 0.6 0.3 0.65 Total Input 1 1 1

Standardized AG MNF Serv

I-Matrix AG MNF Serv

Manufacturing 0 1 0 Services 0 0 1

(I-A) AG MNF Serv 7 Agriculture 0.9 -0.2 -0.1 =(I-A) Manufacturing -0.1 0.7 -0.1 Services -0.2 -0.2 0.8

5 Manufacturing 0.1 0.3 0.1 Services 0.2 0.2 0.2

Agriculture 0.1 0.2 0.05 =A-Matrix

6 Agriculture 1 0 0 =I-matrix

Fig. 2. MS-Excel Practice Sheet for I-O Modeling

Agriculture 1 Manufacturing Services Value Added Total Input

#### **2.4 Multiplier calculations in the I-O framework**

While the popularity of an economic impact study and the proliferation of its jargon seems to require no further marketing, there are by far fewer people who can actually calculate the necessary process of impact studies than people who talk about them. It would benefit you to understand the process of calculations in order to become a better consumer. In the future, you may work for a tourism organization which outsources such studies to outside consultants; however, if you are familiar with the process, you are likely to ask the right questions on various assumptions hidden behind fancy reports, based on your knowledge of I-O modeling.

#### **2.4.1 Multiplier calculations**

You may have heard of the word "multiplier". However, this calls for a word of caution, as there are various types of multipliers. Unless you calculate them by yourself, or know precisely which multiplier is being discussed, a mere comparison of extracted multipliers across results of different impact studies carried out by different researchers will be misleading. In this section we look at some of the various multipliers.

#### **i. Type I multiplier: Direct impacts and indirect impacts**

Changes in final demand drive the whole economic system. Changes in final demand, as you saw, can be caused by changes in domestic residents', firms', or government's consumer patterns, or by the export of goods and services. In the impact studies environment, the change in final demand can be called direct impact, direct shock, direct effect or initial impact because this is the exogenous shock that stimulates the entire economic system. When the shock is caused by a change in the final demand, the economy responds to it by producing a new level of total output through inter-industry transactions in the regional economy.

In our case, we gave a positive change of 1 in the final demand for agricultural goods, and found the resulting change in total output to be a positive 1.75. The net additional increase was only of 0.75, if we define the net increase as the difference between the initial change in final demand and the resulting change in total output. The simple concept of output multiplier is shown as the change in total output to the change in final demand.

Output Multiplier = *X Y* = change in total output / change in final demand = (direct impact + indirect impact) / direct impact

The combined effect of Direct impacts and Indirect impacts can be put in relative terms by standardizing the direct ( = initial) impact as 1 so that we can view the size of the resulting Total Output in perspective. How large the resulting impact would be in response to the initial impact relatively, is the concept of the multiplier. In our case, a direct impact of 1.00 given to the agricultural sector generates additional indirect impact of 0.75, so that the total impact becomes 1.75. Because the initial impact was 1, the size of the total impact was 1.75 times larger than the direct (initial) impact. In Figure 2, you will see complete MS-Excel worksheet with explanations on how you can do the work in Ms-Excel.

While the popularity of an economic impact study and the proliferation of its jargon seems to require no further marketing, there are by far fewer people who can actually calculate the necessary process of impact studies than people who talk about them. It would benefit you to understand the process of calculations in order to become a better consumer. In the future, you may work for a tourism organization which outsources such studies to outside consultants; however, if you are familiar with the process, you are likely to ask the right questions on various assumptions hidden behind fancy reports, based on your knowledge

You may have heard of the word "multiplier". However, this calls for a word of caution, as there are various types of multipliers. Unless you calculate them by yourself, or know precisely which multiplier is being discussed, a mere comparison of extracted multipliers across results of different impact studies carried out by different researchers will be

Changes in final demand drive the whole economic system. Changes in final demand, as you saw, can be caused by changes in domestic residents', firms', or government's consumer patterns, or by the export of goods and services. In the impact studies environment, the change in final demand can be called direct impact, direct shock, direct effect or initial impact because this is the exogenous shock that stimulates the entire economic system. When the shock is caused by a change in the final demand, the economy responds to it by producing a new level of total output through inter-industry transactions in the regional

In our case, we gave a positive change of 1 in the final demand for agricultural goods, and found the resulting change in total output to be a positive 1.75. The net additional increase was only of 0.75, if we define the net increase as the difference between the initial change in final demand and the resulting change in total output. The simple concept of output

= (direct impact + indirect impact) / direct impact The combined effect of Direct impacts and Indirect impacts can be put in relative terms by standardizing the direct ( = initial) impact as 1 so that we can view the size of the resulting Total Output in perspective. How large the resulting impact would be in response to the initial impact relatively, is the concept of the multiplier. In our case, a direct impact of 1.00 given to the agricultural sector generates additional indirect impact of 0.75, so that the total impact becomes 1.75. Because the initial impact was 1, the size of the total impact was 1.75 times larger than the direct (initial) impact. In Figure 2, you will see complete MS-Excel worksheet with explanations on how you can do the work in Ms-

= change in total output / change in final demand

multiplier is shown as the change in total output to the change in final demand.

*Y*

misleading. In this section we look at some of the various multipliers.

**i. Type I multiplier: Direct impacts and indirect impacts** 

**2.4 Multiplier calculations in the I-O framework** 

of I-O modeling.

economy.

Excel.

**2.4.1 Multiplier calculations** 

Output Multiplier = *X*


Fig. 2. MS-Excel Practice Sheet for I-O Modeling

Introduction to Input-Output Framework for Analysis of Tourism as an Industry 69

sector, at the bottom of the rows and at the end of the columns of the I-O table. The Households' row will then provide their goods and services (such as labor) into each industrial sector, in exchange for receipt of money (income), and the Households' sector in the column will spend some part of its income to purchase output from industrial sector, as necessary input to ensure its existence. This will generate additional monetary flow towards the inter-industry table. While this still falls short of a complete inclusion of all economic transactions within a region or nation, including Households in the I-O structure will yield extra impact, thanks to their additional purchasing activities. An example of the structure is

If you look at the rows, you see the Household row at the bottom as if it were another industrial sector. If you look at the columns, you can see Households (PCE). PCE stands for personal consumption expenditures, which means that Households will spend some portion of their received income to purchase other industrial sector's output. Because of the addition

Type I multipliers are group of multipliers which are based on the usage of the generic structure of the I-O model, without any other non-industrial sector, while Type II multipliers are group of multipliers which utilize the I-O, while including Households as an additional quasi-industrial sector. Type I and Type II distinguish the structure of the I-O being used to calculate several multipliers, as follows. Besides Output Multipliers, which can be calculated in a Type I or Type II environment (using the typical I-O or the I-O including Households), there are other multipliers which can be calculated along Type-I and

As it is the case with any other quantitative modeling, the I-O modeling has its limitations due to its structural design. Knowing its limitations will keep your study within reasonable limits and make you prepared to a series of possible criticism of its limitations, which are as

If the sector produces more than one commodity, the proportion of such multiple commodities productions will remain the same as in the study period. As an example of the

Table 9. A-matrix with Households as an additional industrial sector

of another sector, the Output Multiplier would be higher.

**2.5 Structural limitations of the I-O modeling** 

shown in Table 9.

Type-II structures.

**Homogeneous sector output** 

follows:

Fig. 2. MS-Excel Practice Sheet for I-O Modeling (continued)

The combined effect of Direct impacts and Indirect impacts can be called a Type I (one) Multiplier, which reflects the impact caused by the interdependency within the industrial sectors only. You will soon understand why I say "only".

You may have heard of other multiplier-associated words, such as induced impacts, induced shock, induced effect etc. We will discuss induced impacts when we internalize the Households into the model by turning them into an endogenous sector in the Type-II multipliers.

#### **ii. Type II multipliers: Addition of induced impacts by endogenizing households**

In addition to the Direct and Indirect impact caused by inter-industry transactions in the I-O framework, we can internalize the Households sector as if it were an additional industrial

**from Excel.** 

**().** 

**example, yellow ones)**

**for industry analysis.** 

**(in our exmaple, pink ones)**

**& Control Keys, hit the Enter key.** 

**1.75**

**8. This is the most challenging part. We will have a help** 

**(2) Type "=MINVERSE()" and put the cursol within the** 

**(3) Then, choose the 3 x 3 original matrix as an array.** 

**(4) IMPORTANT TO FOLLOW: While Hold down both Chift**

**This is the Inverse matrix! Now you see the fascinations** 

**(1) Hightlight all the nine cells in the target matrix (where you want to write result of calculation, in our** 

**2.40**

**1.66**

Case 2 0 0.37 delta Y= 1 delta X= 1.55

Case 3 0 0.12 delta Y= 0 delta X= 0.21

The combined effect of Direct impacts and Indirect impacts can be called a Type I (one) Multiplier, which reflects the impact caused by the interdependency within the industrial

You may have heard of other multiplier-associated words, such as induced impacts, induced shock, induced effect etc. We will discuss induced impacts when we internalize the Households into the model by turning them into an endogenous sector in the Type-II

In addition to the Direct and Indirect impact caused by inter-industry transactions in the I-O framework, we can internalize the Households sector as if it were an additional industrial

**ii. Type II multipliers: Addition of induced impacts by endogenizing households** 

0 0.48

1 1.33

(I-A)^-1 AG MNF Serv

Manufacturing 0.22 1.55 0.21 Services 0.35 0.48 1.33

(I-A)^-1 AG MNF Serv

multipliers.

8 Agriculture 1.18 0.37 0.12 =(I-A)^-1

*Leontief Inverse!*

9 Agriculture 1.18 0.37 0.12 Case 1 1 1.18 Manufacturing 0.22 1.55 0.21 delta Y= 0 delta X= 0.22 Services 0.35 0.48 1.33 0 0.35

Fig. 2. MS-Excel Practice Sheet for I-O Modeling (continued)

sectors only. You will soon understand why I say "only".

sector, at the bottom of the rows and at the end of the columns of the I-O table. The Households' row will then provide their goods and services (such as labor) into each industrial sector, in exchange for receipt of money (income), and the Households' sector in the column will spend some part of its income to purchase output from industrial sector, as necessary input to ensure its existence. This will generate additional monetary flow towards the inter-industry table. While this still falls short of a complete inclusion of all economic transactions within a region or nation, including Households in the I-O structure will yield extra impact, thanks to their additional purchasing activities. An example of the structure is shown in Table 9.


Table 9. A-matrix with Households as an additional industrial sector

If you look at the rows, you see the Household row at the bottom as if it were another industrial sector. If you look at the columns, you can see Households (PCE). PCE stands for personal consumption expenditures, which means that Households will spend some portion of their received income to purchase other industrial sector's output. Because of the addition of another sector, the Output Multiplier would be higher.

Type I multipliers are group of multipliers which are based on the usage of the generic structure of the I-O model, without any other non-industrial sector, while Type II multipliers are group of multipliers which utilize the I-O, while including Households as an additional quasi-industrial sector. Type I and Type II distinguish the structure of the I-O being used to calculate several multipliers, as follows. Besides Output Multipliers, which can be calculated in a Type I or Type II environment (using the typical I-O or the I-O including Households), there are other multipliers which can be calculated along Type-I and Type-II structures.

#### **2.5 Structural limitations of the I-O modeling**

As it is the case with any other quantitative modeling, the I-O modeling has its limitations due to its structural design. Knowing its limitations will keep your study within reasonable limits and make you prepared to a series of possible criticism of its limitations, which are as follows:

#### **Homogeneous sector output**

If the sector produces more than one commodity, the proportion of such multiple commodities productions will remain the same as in the study period. As an example of the

Introduction to Input-Output Framework for Analysis of Tourism as an Industry 71

We covered the basic of how the Input-Output model works. The knowledge of how it works will help you understand how the extended models such as Social Accounting Matrix

The very basic concept you should understand can be depicted in simple visible figure, as

When you deal with tourism related economic impact studies, the final demand column vector should represent "all the money tourists spent in the study region" in the form of column vector (n x 1), where n is the number of industrial sectors in the study region's Input-Output data. Because of the tourists' expenditure over multiple industrial outputs, the final demand column vector will typically have numbers in multiple cells, implying that the tourists' expenditure stimulates various industrial sectors in the economy in question. Now

(SAM) functions, and helps you to understand Tourism Satellite Accounts.

we are prepared to proceed to study about Tourism Satellite Accounts.

Fig. 3. Basic Concept of the Simplified Economic Impact Studies

Duchin, Faye. Structural Economics. Washington D.C.: Island Press, 1998.

(I-A)^-1 AG MNF Serv ∆Y (FD) ∆X (TO) Agriculture 1.179 0.371 0.120 **1** 1.18 Manufacturing 0.218 1.550 0.207 **x** delta Y= <sup>0</sup> **=** delta X= 0.22 Services 0.349 0.480 1.332 0 0.35

Hara, Tadayuki. Quantitative Tourism Industry Analysis: Elsevier, London, ISBN 978-0-

(Leontief Inverse Matrix) (FD column vector) **1.75**

**BASIC CONCEPT OF THE ECONOMIC IMPACT STUDIES**

Isard, Walter, and Robert Kuenne. "The Impact of Steel Upon the Greater New York-

Leontief, Wassily. *The Structure of American Economy* 1919-1939 New York: Oxford

Philadelphia Industrial Region." The Review of Economics and Statistics XXXV, no.

**LOCAL ECONOMY (FIXED) x EXOGENOUS SHOCK = RESPONSE OF THE TOTAL OUTPUT**

(change in final demand) (change in total output)

1 became 1.75, so the multiplier = 1.75

**2.6 Final remarks** 

shown in figure 3.

**3. References** 

7506-8499-6, 2008

November (1953): 289-301.

University Press, 1951

hospitality industry, let's look at a full-service hotel. They have rooms department and food and beverage department as core department to generate their products, clean rooms and tasty meals. The proportion of those products is not assumed to change, which means that if the proportion was 70% and 30%, then when the total revenue at the hotel increased from \$100 million to \$150 million, the sales of two departments are assumed to increase from \$70 million and \$30 million to \$105 million to \$45 million as the relative ratio of proportions are fixed.

#### **Fixed commodity input structure**

Similar to Constant Returns to Scale, the ratio of inputs is assumed to remain the same as it was observed in the study period, irrespective of changes in price of some items. In the real world, if the price of furniture from China becomes so attractive, a general manger of a hotel in the Unites States may switch to purchase those instead of those from domestic manufacturing industry in Illinois. If the price of turkey skyrockets for some reason, you may find less turkey dishes at the restaurant. Increase in prices would not cause a huge technical problem for the I-O modelers if the change in prices of goods and services are equally distributed all across the society. That is often not the case, such as the surge of crude oil prices. In the I-O world, exact mixture of intermediate goods will remain fixed despite short-term price fluctuations.

#### **Constant return to scale**

The required input can be put in relative terms as ratios, as we did when transforming the transaction table into the standardized A-Matrix table. That relationship is assumed to continue. If the apple juice factory's input from the agricultural sector is 0.12, when the total output increases by \$1 million, there should be an additional purchase of \$0.12 million of agricultural product (apples). If the increase in total output is of \$100, there should be a \$12 additional purchase of apples. The relationship is assumed to remain linear.

#### **No assumption on supply constraints**

The I-O modeling assumes that the required input is always available without constraints in supply. You can, for example conduct a study of what would happen to a local economy if the number of customers to a popular tourist destination - an ice-cream factory - were to triple in the following year. The model calculates that the required input of sugar, milk, and electricity will increase dramatically, which would stimulate the local economy through industrial interdependency. The model will not ask you whether there will be enough machines in the factory or enough parking spaces and seats for the tourists in that situation, because it will not make any assumption about capacity constraints.

In general, a shock of relatively small changes to the economy in question would have less of a problem, and a shock to relatively larger economic region would create fewer problems in the impact analysis using the I-O framework. Being aware of those structural limitations, mainly deriving from being linear-modeling techniques, you may as well present your arguments in perspective without misleading audiences and readers. It goes without saying that these are not the all limitations of your particular study, as there may be errors that are more specific and applicable to your research in question.

#### **2.6 Final remarks**

70 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

hospitality industry, let's look at a full-service hotel. They have rooms department and food and beverage department as core department to generate their products, clean rooms and tasty meals. The proportion of those products is not assumed to change, which means that if the proportion was 70% and 30%, then when the total revenue at the hotel increased from \$100 million to \$150 million, the sales of two departments are assumed to increase from \$70 million and \$30 million to \$105 million to \$45 million as the relative ratio of proportions are

Similar to Constant Returns to Scale, the ratio of inputs is assumed to remain the same as it was observed in the study period, irrespective of changes in price of some items. In the real world, if the price of furniture from China becomes so attractive, a general manger of a hotel in the Unites States may switch to purchase those instead of those from domestic manufacturing industry in Illinois. If the price of turkey skyrockets for some reason, you may find less turkey dishes at the restaurant. Increase in prices would not cause a huge technical problem for the I-O modelers if the change in prices of goods and services are equally distributed all across the society. That is often not the case, such as the surge of crude oil prices. In the I-O world, exact mixture of intermediate goods will remain fixed

The required input can be put in relative terms as ratios, as we did when transforming the transaction table into the standardized A-Matrix table. That relationship is assumed to continue. If the apple juice factory's input from the agricultural sector is 0.12, when the total output increases by \$1 million, there should be an additional purchase of \$0.12 million of agricultural product (apples). If the increase in total output is of \$100, there should be a \$12

The I-O modeling assumes that the required input is always available without constraints in supply. You can, for example conduct a study of what would happen to a local economy if the number of customers to a popular tourist destination - an ice-cream factory - were to triple in the following year. The model calculates that the required input of sugar, milk, and electricity will increase dramatically, which would stimulate the local economy through industrial interdependency. The model will not ask you whether there will be enough machines in the factory or enough parking spaces and seats for the tourists in that situation,

In general, a shock of relatively small changes to the economy in question would have less of a problem, and a shock to relatively larger economic region would create fewer problems in the impact analysis using the I-O framework. Being aware of those structural limitations, mainly deriving from being linear-modeling techniques, you may as well present your arguments in perspective without misleading audiences and readers. It goes without saying that these are not the all limitations of your particular study, as there may be errors that are

additional purchase of apples. The relationship is assumed to remain linear.

because it will not make any assumption about capacity constraints.

more specific and applicable to your research in question.

fixed.

**Fixed commodity input structure** 

despite short-term price fluctuations.

**No assumption on supply constraints** 

**Constant return to scale** 

We covered the basic of how the Input-Output model works. The knowledge of how it works will help you understand how the extended models such as Social Accounting Matrix (SAM) functions, and helps you to understand Tourism Satellite Accounts.

The very basic concept you should understand can be depicted in simple visible figure, as shown in figure 3.

When you deal with tourism related economic impact studies, the final demand column vector should represent "all the money tourists spent in the study region" in the form of column vector (n x 1), where n is the number of industrial sectors in the study region's Input-Output data. Because of the tourists' expenditure over multiple industrial outputs, the final demand column vector will typically have numbers in multiple cells, implying that the tourists' expenditure stimulates various industrial sectors in the economy in question. Now we are prepared to proceed to study about Tourism Satellite Accounts.


Fig. 3. Basic Concept of the Simplified Economic Impact Studies

#### **3. References**

Duchin, Faye. Structural Economics. Washington D.C.: Island Press, 1998.


**4** 

**Golden Age of Mass Tourism:** 

In the early years of the twentieth century, tourism continued to expand as a consequence of increasing wealth, interest and outgoing attitudes, and improvements in people's transport. Advances in transport allowed people to travel in masses. In fact, mass production and mass consumption was the rationale of that period. Although its roots go back to the eighteenth century, travel was still a novelty for the masses, and the homogeneous character of the demand led to the production of standardized products that could suit everyone. From the 1930s onwards, the growing availability of the motor car stimulated tourism further, and during the interwar years the aircraft began to play a small role in the tourism market as an option for the wealthier classes, particularly in Europe (Swarbrooke & Horner, 2007). Further, the arrival of holiday camps aimed at a growing low income market for holidays was a major development of 1930s, and received widespread acceptance by the public. The instant success of the concept resulted in the construction of similar structures all over the coastal areas and even in inland resorts. Moreover, the allure to the sun in 1960s, from the cool and variable climates of Northern Europe and North America, encouraged the emergence of package tours. As such, the mass characteristic of tourism is strengthened

This chapter aims to outline the development of mass tourism. In other words, it is aimed to reveal the golden age of mass tourism, which has dominated the whole industry between 1950s and 1980s. Initially, the constitutional factors effecting the development of mass tourism will be discussed. Further, developmental factors, namely technology, air transportation, accommodation companies and tour operators will be deliberated in detail.

The term mass tourism is briefly used for pre-scheduled tours for groups of people who travel together with similar purposes (recreation, sightseeing etc.) usually under the organization of tourism professionals. Mass tourism has been misused or confused as holiday tourism in the progress. However, mass tourism is the opposite of 'individual tourism' and both are wider in scope consisting holiday, circuit, and other tourism markets.

Finally, conclusions on the development of mass tourism will be drawn.

Figure 1 indicates the position of mass tourism in the tourism network.

**2. The constitutional factors and conversion process of tourism** 

**1. Introduction** 

further.

**Its History and Development** 

Erkan Sezgin and Medet Yolal

*Anadolu University* 

*Turkey* 

Quesnay, F. ""Tableau Economique" 1758, in Appendix Of "The Disaggregation of the Household Sector in the National Accounts" By Sir Richard Stone in 1985." In Social Accounting Matrices a Basis for Planning, edited by Graham Pyatt and Jefferey I. Round, 281. Washington D.C.: The World Bank,

### **Golden Age of Mass Tourism: Its History and Development**

Erkan Sezgin and Medet Yolal *Anadolu University Turkey* 

#### **1. Introduction**

72 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Quesnay, F. ""Tableau Economique" 1758, in Appendix Of "The Disaggregation of the

Round, 281. Washington D.C.: The World Bank,

Household Sector in the National Accounts" By Sir Richard Stone in 1985." In Social Accounting Matrices a Basis for Planning, edited by Graham Pyatt and Jefferey I.

> In the early years of the twentieth century, tourism continued to expand as a consequence of increasing wealth, interest and outgoing attitudes, and improvements in people's transport. Advances in transport allowed people to travel in masses. In fact, mass production and mass consumption was the rationale of that period. Although its roots go back to the eighteenth century, travel was still a novelty for the masses, and the homogeneous character of the demand led to the production of standardized products that could suit everyone. From the 1930s onwards, the growing availability of the motor car stimulated tourism further, and during the interwar years the aircraft began to play a small role in the tourism market as an option for the wealthier classes, particularly in Europe (Swarbrooke & Horner, 2007). Further, the arrival of holiday camps aimed at a growing low income market for holidays was a major development of 1930s, and received widespread acceptance by the public. The instant success of the concept resulted in the construction of similar structures all over the coastal areas and even in inland resorts. Moreover, the allure to the sun in 1960s, from the cool and variable climates of Northern Europe and North America, encouraged the emergence of package tours. As such, the mass characteristic of tourism is strengthened further.

> This chapter aims to outline the development of mass tourism. In other words, it is aimed to reveal the golden age of mass tourism, which has dominated the whole industry between 1950s and 1980s. Initially, the constitutional factors effecting the development of mass tourism will be discussed. Further, developmental factors, namely technology, air transportation, accommodation companies and tour operators will be deliberated in detail. Finally, conclusions on the development of mass tourism will be drawn.

#### **2. The constitutional factors and conversion process of tourism**

The term mass tourism is briefly used for pre-scheduled tours for groups of people who travel together with similar purposes (recreation, sightseeing etc.) usually under the organization of tourism professionals. Mass tourism has been misused or confused as holiday tourism in the progress. However, mass tourism is the opposite of 'individual tourism' and both are wider in scope consisting holiday, circuit, and other tourism markets. Figure 1 indicates the position of mass tourism in the tourism network.

Golden Age of Mass Tourism: Its History and Development 75

The economic policies in some countries played important roles for the conversion process of the tourism industry. The trade unions forced governments for more flexible working hours and by the year 1939, many European countries agreed on 'salaried holidays' for employees which brought increased prosperity and the need for vacation together (Yale, 1995: p.37). However, the supply for these new types of vacationers was inadequate during 1920's and 1930's. Hotels were quite luxurious and with the upper- income guests in mind (when taking accommodation supply into account). For transportation supply, it could be claimed that the trains and ships were still the more popular vehicles and air transportation was still in its search of progress. One good example was "Zeppelins" which were pioneered by Count Ferdinand von Zeppelin in the early 20th century (Zeppelin, Vikipedia). These huge balloons with passenger cabins underneath carried almost 52,000 people over the Atlantic Ocean by the Second World War (Zeppelin, Vikipedia). However, several zeppelin accidents mostly because of flammable hydrogen gas- undersized these vehicles' popularity. At the time, the aircrafts on the other hand, were not developed enough to carry bulk of passengers. Consequently, railway and maritime transportation were still popular mass carriers, but far more slow carriers than aircrafts and secured time of the new vacationers' salaried holidays. The nature of tourist product has dramatically changed after the Second World War, especially between 1960's and 1980's. While the marketing practice is "customer oriented" nowadays, post-war conditions were completely different and marketing was "sales oriented". There were remarkable supplies for many products across Europe and tourism was not an exception to this. On the other hand, the economical and technological developments that changed tourism in the mentioned period could be summarized as

technical improvements in aircraft production which made it possible to fly further and

spread of television, bringing images of the rest of the world to almost every household

The factors that cleared the way for mass tourism for its golden age are namely technology, production and management related changes in the progress. These constitutional and developmental factors with their sub-factors are shown in Figure 2. However, these factors mentioned in the figure should be taken as a whole in the progress of mass tourism, and it could be said that they are not homogeneous and may vary depending on the continents, trade customs of the continents and countries as well. The very basic two examples for such simulations are Europe and United States of America (USA) which are also identified as the

The hotel chains, airlines, business travels, cruises and short breaks have been the factors that helped development of USA's mass tourism in the progress. However, it is completely a

a greater sense of democracy and equality fostered by the war effort

better packaging of the opportunities by tour operators

fallows (Yale, 1995: 37):

faster

better education

 the greater prosperity of the population at large paid (salaried) holidays for many European workers

a new use of excess aeroplanes after the war

**3. Developmental factors of mass tourism** 

two leading demand markets of the tourism industry.

The continent of Europe and notably England play important roles in the constitution process of industrial tourism. Accordingly, mass tourism initially commenced in England at the second half of the nineteenth century. Mass tourism owes its existence to mainly two specific reasons: the first reason is the development in the transportation technologies and the second is the individual efforts of an English entrepreneur Thomas Cook (Poon, 1993: 30). Using the steam train and ship for transportation, Thomas Cook organized international package tours to three destinations including the Far East, India and America in 1862. By the year 1897, Thomas Cook reached the figure of 20,000 tourists annually (Poon, 1993:.31).

It is not a coincidence that mass tourism was first organized in England by an English entrepreneur. It was the Industrial Revolution above the other reasons that brings 'steam train' in technological dimension and inflexible-heavy 'working hours' in sociological dimensions. However, it would seem appropriate to refer to the second half of the 19th century and even the first half of the 20th century as 'infancy period' of mass tourism. Some authors (Cook, Yale & Marqua, 2006:14) are consistent with the idea and called this period (1800-1944) in the literature as *'mobility era'* while some others (Fuller, 1994; Syratt, 2003) split the period into two, before the First World War and post First World War taking the developments in the car industry and hotel business into a consideration. Middleton and Lickoris (2005:2) credited 1919-1939 as *'new mobility'* claiming that some remarkable developments occurred in the 1920s and 1930s. Weaver and Lawton (2006:66-67) attributed 1880-1950 as *'the post-Cook period'* as a result of Cook and his adaptation of Industrial Revolution technologies and principles to the travel industry. It is worth noting that it is impossible to talk about the 'industrialized mass tourism' apart from some individual enterprises and some technological developments in the mentioned period.

Tourism

Industrial Tourism Unindustrial Tourism

Mass Tourism Individual Tourism

The continent of Europe and notably England play important roles in the constitution process of industrial tourism. Accordingly, mass tourism initially commenced in England at the second half of the nineteenth century. Mass tourism owes its existence to mainly two specific reasons: the first reason is the development in the transportation technologies and the second is the individual efforts of an English entrepreneur Thomas Cook (Poon, 1993: 30). Using the steam train and ship for transportation, Thomas Cook organized international package tours to three destinations including the Far East, India and America in 1862. By the year 1897, Thomas Cook reached the figure of 20,000 tourists

It is not a coincidence that mass tourism was first organized in England by an English entrepreneur. It was the Industrial Revolution above the other reasons that brings 'steam train' in technological dimension and inflexible-heavy 'working hours' in sociological dimensions. However, it would seem appropriate to refer to the second half of the 19th century and even the first half of the 20th century as 'infancy period' of mass tourism. Some authors (Cook, Yale & Marqua, 2006:14) are consistent with the idea and called this period (1800-1944) in the literature as *'mobility era'* while some others (Fuller, 1994; Syratt, 2003) split the period into two, before the First World War and post First World War taking the developments in the car industry and hotel business into a consideration. Middleton and Lickoris (2005:2) credited 1919-1939 as *'new mobility'* claiming that some remarkable developments occurred in the 1920s and 1930s. Weaver and Lawton (2006:66-67) attributed 1880-1950 as *'the post-Cook period'* as a result of Cook and his adaptation of Industrial Revolution technologies and principles to the travel industry. It is worth noting that it is impossible to talk about the 'industrialized mass tourism' apart from some individual

enterprises and some technological developments in the mentioned period.

Tours Others Holiday

Circuit Others

Tours

Circuit

Self Organization

Retail Shopping

Holiday Tours

Tours

Tour Operators and Intermediaries

Package Tour

Fig. 1. Mass Tourism in Tourism Network

annually (Poon, 1993:.31).

The economic policies in some countries played important roles for the conversion process of the tourism industry. The trade unions forced governments for more flexible working hours and by the year 1939, many European countries agreed on 'salaried holidays' for employees which brought increased prosperity and the need for vacation together (Yale, 1995: p.37). However, the supply for these new types of vacationers was inadequate during 1920's and 1930's. Hotels were quite luxurious and with the upper- income guests in mind (when taking accommodation supply into account). For transportation supply, it could be claimed that the trains and ships were still the more popular vehicles and air transportation was still in its search of progress. One good example was "Zeppelins" which were pioneered by Count Ferdinand von Zeppelin in the early 20th century (Zeppelin, Vikipedia). These huge balloons with passenger cabins underneath carried almost 52,000 people over the Atlantic Ocean by the Second World War (Zeppelin, Vikipedia). However, several zeppelin accidents mostly because of flammable hydrogen gas- undersized these vehicles' popularity. At the time, the aircrafts on the other hand, were not developed enough to carry bulk of passengers. Consequently, railway and maritime transportation were still popular mass carriers, but far more slow carriers than aircrafts and secured time of the new vacationers' salaried holidays.

The nature of tourist product has dramatically changed after the Second World War, especially between 1960's and 1980's. While the marketing practice is "customer oriented" nowadays, post-war conditions were completely different and marketing was "sales oriented". There were remarkable supplies for many products across Europe and tourism was not an exception to this. On the other hand, the economical and technological developments that changed tourism in the mentioned period could be summarized as fallows (Yale, 1995: 37):


#### **3. Developmental factors of mass tourism**

The factors that cleared the way for mass tourism for its golden age are namely technology, production and management related changes in the progress. These constitutional and developmental factors with their sub-factors are shown in Figure 2. However, these factors mentioned in the figure should be taken as a whole in the progress of mass tourism, and it could be said that they are not homogeneous and may vary depending on the continents, trade customs of the continents and countries as well. The very basic two examples for such simulations are Europe and United States of America (USA) which are also identified as the two leading demand markets of the tourism industry.

The hotel chains, airlines, business travels, cruises and short breaks have been the factors that helped development of USA's mass tourism in the progress. However, it is completely a

Golden Age of Mass Tourism: Its History and Development 77

These plastic cards and travel cheques surely helped consumers feel more confident especially on vacation. As such, tourists could feel safe in defiance money loses and robbery.

Developmental Factors

Production Charter Flights Cheap Oil Inclusive Tours Scale Economies Mass Production

Management Mass Marketing Horizontal-Vertical Integrations

Mass Tourism

Technology Jet Airplanes Plastic Cards and travel Cheques Computers Reservation Systems

Fig. 2. The Constitutional and Developmental Factors for Mass Tourism in 20th Century

of the tourism business with the help of the communication technologies.

and ARINC (in USA) network consortia (Inkpen, 1998:59).

In the early years of mass tourism, computer technology was still in its infancy. Thus, computers were used mainly for planning and delivery process of the tourist product. In summary, computers were more the facilitators of the golden age of mass tourism. Conversely, today's computers are also identifiers in either production or marketing stages

The most notable impact of the technology in the golden age is linked to the Computer Reservation Systems (CRSs). Starting from the early years (1950s) of mass tourism, firstly airlines and then the hotels with tour operators established their own CRSs. However, the CRSs in the early years were serving dumb terminals without intranet or internet and they were not working synchronously. Moreover, the CRSs of suppliers (airlines, hotels and tour operators) were not thoroughly adaptable for communicating with each other. The communication between airline CRSs and sales offices were provided by SITA (in Europe)

Constitutional Factors Industrial Revolution Salaried Holidays Increased Prosperity

Increased Aircraft Technology Government Promotions

Opportunities Provided for Investors

different story in Europe because of the demographical and economical structures of the continent. The European mass tourism market has grown relatively from richer and more developed European countries' tourism demand for holidays to rather less developed southern (in other words Mediterranean) countries. The necessity for travelling international inside (short-haul) the continent has brought new actors as organizers in tourism, namely *tour operators*. Tour operators, charter flights, and inclusive tours –especially holiday packages- are the identifiers of European mass tourism in the golden age of mass tourism. On the other hand, the common factors that changed the world tourism business and accordingly mass tourism could be summarized as being technology, air transportation, accommodation companies, tour operators, conglomerates and mass consumption depending on holiday needs. These factors are going to be detailed in the following sections.

#### **3.1 Technology**

Technology today is intensively involved in all the industries, manipulating the business world and the tourism industry is not the exception. The impacts of technology are relatively seen on the aircrafts, credit cards and travel cheques, computers and finally reservation systems used in the communication among organizers and intermediaries when the tourism industry's mass tourism age is considered. Tourism is a more 'information flow' friendly industry than 'product flow' and this characteristic is making it more dependent on technologies. As shown in Figure 2, technology has directly affected tourism on four major topics: aircrafts, plastic cards and travel cheques, computers and reservation systems.

Significant technological improvements in aviation and sea transport played a catalytic role in increasing safety record and in reducing substantially the real monetary and time travel outlays (Holloway, 1998). The basic effect of technology on the aircraft technology is related with the Second World War. The war temporarily disrupted commercial flights, but it brought tremendous long-run gains for the development of the air transportation industry, including (Gee, Makens & Choy 1997: 300):


The jumbo jets (Boeing 747, DC 10), which were developed in the late 1960s, flew further with more passengers in shorter time and at a cheaper price. Although it is impossible to compare these jumbo jets' productivity to today's Boeing 777 or Airbus A380 aircrafts by any variable, it shouldn't be forgotten that it was a tremendous invention for the 70s and the mass transportation. As the airline industry grew, so did the tourism industry's dependency on it.

Another technological development in the mentioned period is the credit cards and travel cheques. American Express had announced its first credit card in 1958, followed by the Bank America Card (today's Visa Card) and Master Charge (today's Master Card) (Poon, 1993:43).

different story in Europe because of the demographical and economical structures of the continent. The European mass tourism market has grown relatively from richer and more developed European countries' tourism demand for holidays to rather less developed southern (in other words Mediterranean) countries. The necessity for travelling international inside (short-haul) the continent has brought new actors as organizers in tourism, namely *tour operators*. Tour operators, charter flights, and inclusive tours –especially holiday packages- are the identifiers of European mass tourism in the golden age of mass tourism. On the other hand, the common factors that changed the world tourism business and accordingly mass tourism could be summarized as being technology, air transportation, accommodation companies, tour operators, conglomerates and mass consumption depending on holiday needs. These factors are going to be detailed in the following sections.

Technology today is intensively involved in all the industries, manipulating the business world and the tourism industry is not the exception. The impacts of technology are relatively seen on the aircrafts, credit cards and travel cheques, computers and finally reservation systems used in the communication among organizers and intermediaries when the tourism industry's mass tourism age is considered. Tourism is a more 'information flow' friendly industry than 'product flow' and this characteristic is making it more dependent on technologies. As shown in Figure 2, technology has directly affected tourism on four major topics: aircrafts, plastic cards and travel cheques, computers and reservation systems.

Significant technological improvements in aviation and sea transport played a catalytic role in increasing safety record and in reducing substantially the real monetary and time travel outlays (Holloway, 1998). The basic effect of technology on the aircraft technology is related with the Second World War. The war temporarily disrupted commercial flights, but it brought tremendous long-run gains for the development of the air transportation industry,

 Increased public acquaintance with aviation, as hundreds of thousands of military personnel and civilian employees experienced their first flight during the war;

A large assortment of surplus aircraft design, flying techniques, and other knowledge

The jumbo jets (Boeing 747, DC 10), which were developed in the late 1960s, flew further with more passengers in shorter time and at a cheaper price. Although it is impossible to compare these jumbo jets' productivity to today's Boeing 777 or Airbus A380 aircrafts by any variable, it shouldn't be forgotten that it was a tremendous invention for the 70s and the mass transportation. As the airline industry grew, so did the tourism industry's dependency on it. Another technological development in the mentioned period is the credit cards and travel cheques. American Express had announced its first credit card in 1958, followed by the Bank America Card (today's Visa Card) and Master Charge (today's Master Card) (Poon, 1993:43).

**3.1 Technology** 

including (Gee, Makens & Choy 1997: 300):

Increased knowledge of the weather;

The development of jet aircraft.

The creation of a large body of experienced pilots;

Improved maps and knowledge of foreign terrain;

necessary for advancement of the industry; and

Construction of thousands of airfields in wide parts of the world;

These plastic cards and travel cheques surely helped consumers feel more confident especially on vacation. As such, tourists could feel safe in defiance money loses and robbery.

Fig. 2. The Constitutional and Developmental Factors for Mass Tourism in 20th Century

In the early years of mass tourism, computer technology was still in its infancy. Thus, computers were used mainly for planning and delivery process of the tourist product. In summary, computers were more the facilitators of the golden age of mass tourism. Conversely, today's computers are also identifiers in either production or marketing stages of the tourism business with the help of the communication technologies.

The most notable impact of the technology in the golden age is linked to the Computer Reservation Systems (CRSs). Starting from the early years (1950s) of mass tourism, firstly airlines and then the hotels with tour operators established their own CRSs. However, the CRSs in the early years were serving dumb terminals without intranet or internet and they were not working synchronously. Moreover, the CRSs of suppliers (airlines, hotels and tour operators) were not thoroughly adaptable for communicating with each other. The communication between airline CRSs and sales offices were provided by SITA (in Europe) and ARINC (in USA) network consortia (Inkpen, 1998:59).

Golden Age of Mass Tourism: Its History and Development 79

Mass tourism related to charter flights started, as early as 1950s in Europe, while the first charter flight which was a part of a package tour in USA was operated in 1968 (Doganis, 1998:11). The countries and governments in the globalization progress softened some procedures and limited the difference between schedule and charter flights. The airlines known as 'charter-only' could organize flights with the liberalisations to new destinations that were previously operated only by the scheduled airlines. Surely, consumers were the most benefitted leg of these conversions and liberalisations. Tourists could find more alternatives to more destinations with better services sometimes, and paying less than before. However, this was another blast effect for mass tourism's golden age that more

Distribution channels of the scheduled flights are shown in figure 4. Although, figure 4 indicates today's distribution channels, it was similar in the golden age of mass tourism

Figure 5 demonstrates the distribution channels of charter flights. As can be seen from the figure, it has a much less simple structure when compared to scheduled flights. Todays' new

people could organise their own travel.

Fig. 4. Scheduled Flights Distribution Channels

intermediaries are also mentioned in the figure.

with the exceptions of GDSs and web portals of the suppliers.

The limited use of CRSs dramatically changed after the *Deregulations* of USA in 1978. The new companies, schedules, fares and services have brought the fierce competition among airline companies with this process. Some airline companies went on strategic partnerships and established global distribution systems (GDSs) for marketing purposes via travel agencies. The development of GDS was in the meantime the beginning of the end of mass tourism's golden age with the emergence of the deep impact of the internet world.

Today's four GDSs and their market shares are demonstrated in Figure 3.

Source: Galileo Turkey.

Fig. 3. GDSs' Market Shares around the World

#### **3.2 Air transportation**

Air transportation diversifies from all other transportations in the industrial tourism and it's probably because of the inclusive tours that dominate the industrial tourism movements. In fact, while one of the two most important components of an international package tour is the hotel bed, the other is undoubtedly the aircraft seat.

There are two important developments tied with air transportation regarding the tourism industry and mass tourism. The first one is the foundation of International Air Transport Association (IATA) in 1945 (Sezgin, 2010:3). The foundational goals of IATA were the organization of safe, regular and economic transportation worldwide and providing the coordination among airlines. The obligation for membership has brought standardization in the scheduled air transportation (Walker, 1996: 38). Today, more than 230 airlines –mostly flag carriers- are members of IATA and that constitutes 93 percent of all scheduled flights around the world (Papatheodorou, 2008:50).

The second and more important development of air transportation regarding mass tourism is the charter flights and the equal rights which were given to charter and scheduled companies for the new directions in 1960 (Renshaw, 1997:43). By means of the mentioned rights, monopolist air transportation market has turned out to be more reasonable for tour operators. The flag carriers had to give contingent for inclusive tours to tour operators with the fierce competition.

The limited use of CRSs dramatically changed after the *Deregulations* of USA in 1978. The new companies, schedules, fares and services have brought the fierce competition among airline companies with this process. Some airline companies went on strategic partnerships and established global distribution systems (GDSs) for marketing purposes via travel agencies. The development of GDS was in the meantime the beginning of the end of mass

> Sabre 33%

14% Sabre

Galileo Amadeus Worldspan

Air transportation diversifies from all other transportations in the industrial tourism and it's probably because of the inclusive tours that dominate the industrial tourism movements. In fact, while one of the two most important components of an international package tour is

There are two important developments tied with air transportation regarding the tourism industry and mass tourism. The first one is the foundation of International Air Transport Association (IATA) in 1945 (Sezgin, 2010:3). The foundational goals of IATA were the organization of safe, regular and economic transportation worldwide and providing the coordination among airlines. The obligation for membership has brought standardization in the scheduled air transportation (Walker, 1996: 38). Today, more than 230 airlines –mostly flag carriers- are members of IATA and that constitutes 93 percent of all scheduled flights

The second and more important development of air transportation regarding mass tourism is the charter flights and the equal rights which were given to charter and scheduled companies for the new directions in 1960 (Renshaw, 1997:43). By means of the mentioned rights, monopolist air transportation market has turned out to be more reasonable for tour operators. The flag carriers had to give contingent for inclusive tours to tour operators with

tourism's golden age with the emergence of the deep impact of the internet world.

Galileo 28%

Today's four GDSs and their market shares are demonstrated in Figure 3.

Source: Galileo Turkey.

**3.2 Air transportation** 

the fierce competition.

Fig. 3. GDSs' Market Shares around the World

Amadeus 25%

Worldspan

around the world (Papatheodorou, 2008:50).

the hotel bed, the other is undoubtedly the aircraft seat.

Mass tourism related to charter flights started, as early as 1950s in Europe, while the first charter flight which was a part of a package tour in USA was operated in 1968 (Doganis, 1998:11). The countries and governments in the globalization progress softened some procedures and limited the difference between schedule and charter flights. The airlines known as 'charter-only' could organize flights with the liberalisations to new destinations that were previously operated only by the scheduled airlines. Surely, consumers were the most benefitted leg of these conversions and liberalisations. Tourists could find more alternatives to more destinations with better services sometimes, and paying less than before. However, this was another blast effect for mass tourism's golden age that more people could organise their own travel.

Distribution channels of the scheduled flights are shown in figure 4. Although, figure 4 indicates today's distribution channels, it was similar in the golden age of mass tourism with the exceptions of GDSs and web portals of the suppliers.

Fig. 4. Scheduled Flights Distribution Channels

Figure 5 demonstrates the distribution channels of charter flights. As can be seen from the figure, it has a much less simple structure when compared to scheduled flights. Todays' new intermediaries are also mentioned in the figure.

Golden Age of Mass Tourism: Its History and Development 81

anywhere with a fast, reliable and routine system (Walker, 1996: 78). The increasing number of people travelling resulted in the institutionalization of small, independent hotels converted to multi-partner companies, working with franchise system, benefiting financial instruments such as leasing, management contracts etc. This was followed by flourishing international chain hotels operating in Europe and Asia. Multinational chain hotels in Europe and Asia were so successful that they entered the American market where a fierce

Multinational hotel companies had also made important investments in the developing countries. For the developing countries, tourism was appreciated to be an important medium for increasing employment opportunities and reducing the foreign currency deficit. Consequently, they made some regulations to attract foreign investment. Incentives such as build-operate-transfer, privilege of the profit transfer, financial supports, support for financial projection, capital sharing, exemption of income taxes, investment credits and special exchange rates were offered by the developing countries for the potential investors (Poon, 1993: 37). Overdependence to multinational chain hotels in the developing countries was more intense when compared to developed countries. As a result, some hotel chains like Hilton Corporation and Holiday Inn, succeeding a certain level of standardization expanded their branches all over Europe and other countries targeting business travel and

In the process of mass tourism development in Europe, economically developed Northern European countries are cited to be tourist-generator countries and less developed Southern countries on the coast of Mediterranean are destination countries. The tour operators in the leading countries in the European tourism industry, namely Germany, the UK and France, have invested in tourist attracting countries. The most influential are the hotel investments for the purpose of product standardization. In this vein, tour operators as the first liable body when any inconveniences occur, tried to eliminate possible problems that could be stemmed from the accommodation businesses. In fact, they maintained their audits via their representatives in the destination countries. In the course of time, however, they further undertook hotel ownership and used other methods to increase their role in the

Conclusively, the urban hotels mainly American roots serving to business travellers, and meeting organizations, the holiday camps and the resort hotels common to Mediterranean region specialized in leisure travellers. These were sold as a component of packaged tours. In the globalizing process, urban hotels were urged to diversify their markets and developed integration methods specific to destinations they are located in. For example, Hilton Hotels used franchise or management contracts in the markets they perceived to be economically risky while employing joint venture or direct investment in developed countries. Coastal hotels and holiday camps flourished with the mass tourism development on the continent. The leading conglomerates integrated with the accommodation businesses in popular mass tourism destinations in the Mediterranean region. Aimed at the growing low-income market for holidays, the holiday camps set new standards of comfort, offered 24-hour entertainment at an all-inclusive price, were efficient in operation and originally European (Holloway, 1998). According to Holloway the success of this of all-in entertainment concept was later to be copied by hotels, and the hotel with its leisure complex became a popular development even before the war in the USA. Club Med and

competition existed (Go et al., 1990: 297).

high income markets.

destinations.

Fig. 5. Charter Flights Distribution Channels

#### **3.3 Accommodation companies**

As discussed before, the tour operators in Europe and the chain hotels and airline companies in the USA were the leading determinants in the development of mass tourism. The first American hotel was opened in 1794 (Walker, 1996: 78); taverns and small hotels followed. The expansion of hotels in the USA as in the case of Europe was boosted in the first half of the 20th century till Second World War. This period witnessed the rise of luxury hotels being operated all over the country and they spread to the continent. The chain hotels and the airline companies being the initiator of mass tourism in the USA did not happen accidentally. Different than Europe, the USA had the potential to develop all kinds of tourism apart from cultural tourism. Consequently, the development of tourism was mainly domestic in the USA.

In the early years of the twentieth century, travel continued to expand, encouraged by the increasing wealth, interest and outgoing attitudes of the population, and by the steady improvement in transport. Roads and the railroad transportation determined the development of accommodation businesses till the First World War. This led to the construction of new hotels and motels in destinations and crossroads. The arrival of the airline industry signaled the beginning of the end, not only for long-distance rail services but, more decisively, for the great steamship companies. Air transportation increased the number of urban hotels and the holiday camps both in the continent and the USA.

The Great Depression of 1930s which originated in the USA not only affected the global economy but also the hotel owners and the investors. This resulted in the limited number of new hotel construction till the beginning of 1950s due to precautions taken by the banks and financial companies to overcome the crisis. The economic recovery in the 1950s and the advent of air transportation led to an exponential growth as tourists could travel almost

Airlines

Tour Operators

Bookers

Fig. 5. Charter Flights Distribution Channels

**3.3 Accommodation companies** 

domestic in the USA.

Travel Agencies

Internet Portals (Own Web Sites or Intermediaries)

Consumer

As discussed before, the tour operators in Europe and the chain hotels and airline companies in the USA were the leading determinants in the development of mass tourism. The first American hotel was opened in 1794 (Walker, 1996: 78); taverns and small hotels followed. The expansion of hotels in the USA as in the case of Europe was boosted in the first half of the 20th century till Second World War. This period witnessed the rise of luxury hotels being operated all over the country and they spread to the continent. The chain hotels and the airline companies being the initiator of mass tourism in the USA did not happen accidentally. Different than Europe, the USA had the potential to develop all kinds of tourism apart from cultural tourism. Consequently, the development of tourism was mainly

In the early years of the twentieth century, travel continued to expand, encouraged by the increasing wealth, interest and outgoing attitudes of the population, and by the steady improvement in transport. Roads and the railroad transportation determined the development of accommodation businesses till the First World War. This led to the construction of new hotels and motels in destinations and crossroads. The arrival of the airline industry signaled the beginning of the end, not only for long-distance rail services but, more decisively, for the great steamship companies. Air transportation increased the

The Great Depression of 1930s which originated in the USA not only affected the global economy but also the hotel owners and the investors. This resulted in the limited number of new hotel construction till the beginning of 1950s due to precautions taken by the banks and financial companies to overcome the crisis. The economic recovery in the 1950s and the advent of air transportation led to an exponential growth as tourists could travel almost

number of urban hotels and the holiday camps both in the continent and the USA.

anywhere with a fast, reliable and routine system (Walker, 1996: 78). The increasing number of people travelling resulted in the institutionalization of small, independent hotels converted to multi-partner companies, working with franchise system, benefiting financial instruments such as leasing, management contracts etc. This was followed by flourishing international chain hotels operating in Europe and Asia. Multinational chain hotels in Europe and Asia were so successful that they entered the American market where a fierce competition existed (Go et al., 1990: 297).

Multinational hotel companies had also made important investments in the developing countries. For the developing countries, tourism was appreciated to be an important medium for increasing employment opportunities and reducing the foreign currency deficit. Consequently, they made some regulations to attract foreign investment. Incentives such as build-operate-transfer, privilege of the profit transfer, financial supports, support for financial projection, capital sharing, exemption of income taxes, investment credits and special exchange rates were offered by the developing countries for the potential investors (Poon, 1993: 37). Overdependence to multinational chain hotels in the developing countries was more intense when compared to developed countries. As a result, some hotel chains like Hilton Corporation and Holiday Inn, succeeding a certain level of standardization expanded their branches all over Europe and other countries targeting business travel and high income markets.

In the process of mass tourism development in Europe, economically developed Northern European countries are cited to be tourist-generator countries and less developed Southern countries on the coast of Mediterranean are destination countries. The tour operators in the leading countries in the European tourism industry, namely Germany, the UK and France, have invested in tourist attracting countries. The most influential are the hotel investments for the purpose of product standardization. In this vein, tour operators as the first liable body when any inconveniences occur, tried to eliminate possible problems that could be stemmed from the accommodation businesses. In fact, they maintained their audits via their representatives in the destination countries. In the course of time, however, they further undertook hotel ownership and used other methods to increase their role in the destinations.

Conclusively, the urban hotels mainly American roots serving to business travellers, and meeting organizations, the holiday camps and the resort hotels common to Mediterranean region specialized in leisure travellers. These were sold as a component of packaged tours. In the globalizing process, urban hotels were urged to diversify their markets and developed integration methods specific to destinations they are located in. For example, Hilton Hotels used franchise or management contracts in the markets they perceived to be economically risky while employing joint venture or direct investment in developed countries. Coastal hotels and holiday camps flourished with the mass tourism development on the continent. The leading conglomerates integrated with the accommodation businesses in popular mass tourism destinations in the Mediterranean region. Aimed at the growing low-income market for holidays, the holiday camps set new standards of comfort, offered 24-hour entertainment at an all-inclusive price, were efficient in operation and originally European (Holloway, 1998). According to Holloway the success of this of all-in entertainment concept was later to be copied by hotels, and the hotel with its leisure complex became a popular development even before the war in the USA. Club Med and

Golden Age of Mass Tourism: Its History and Development 83

product, the packaged tour. Such a development boosted tourism investments in Europe and resulted in tour operators to become multinational companies. In order to diminish the risks taken, tour operators also took part in operating and managing coastal resorts and hotels in developing destination countries. However, it was not always possible to control the hospitality units unless an investment was made and the risk was taken. Besides, integrations methods such as franchising, management contracts etc. which eliminates the investment risks were limited for charter operations. Consequently tour operators were faced with heavy investment requirements and managerial costs when they aspired to

Heterogeneity of the tourism products poses difficulties in standardizing the experience. Since the package components are all in different places, standardizing the package tours as the final products of the tour operators is more difficult when compared to other industries. Package components that would be purchased from destination countries may not be at a desired standard due to economic, social and cultural characteristics of destination countries. Besides, fragility of tourism businesses under the threats of undesired actions such as terror, natural disasters and economic crises may require customers to be oriented towards other destinations. Considering such risks, tour operators prefer to integrate with the hospitality principals in destination countries in search for control. Moreover, the hospitality units in the destination countries, especially the resorts and camps in the Mediterranean coasts had limited financial resources to mitigate the under capacity and they represent a homogenous structure. As the controllers of European mass tourism, tour operators obtained other advantages apart from the product standardization as a result of homogenous structure of these hospitality units. Most important, they had the power to stimulate the demand. On the other hand, taking the golden age of mass tourism and demand from tourist generating countries (northern European) to destination countries (Mediterranean) into a consideration, figure 7 demonstrates

Security is a must for a healthier development of the tourism industry at a given destination. As such, any crisis in some destinations like Turkey, Egypt and the former Yugoslavia led dominant European tour operators to shift their reservations to other destinations. On the

control the airline companies or the seat capacity.

the inclusive tour distribution network.

Fig. 7. Inclusive Tour Distribution Network

Robinson Club chains, which were pioneers and being operated in most of the Mediterranean destinations, are still owned by conglomerates. Although the integration methods used by the urban hotel benefited from holiday camps and coastal hotels, direct investment is much more common due to the policies of mass tourism players such as conglomerates and tour operators in Europe.

Source: O'Connor, 1999:110

Fig. 6. Distribution Channels for Accommodation Companies

#### **3.4 Tour operators**

Many of the current day trends in tourism can be dated to the post-war period –particularly the rise in demand for holidays. This period saw a growth in income, leisure time and opportunities for international travel (Page, 2003: 41). Mass tourism is basically developed in forms of package tours from developed western and northern European countries to the Mediterranean. Tour operators in developed countries prepared package tours by making contracts with hospitality principals and airline companies, and offered these tours to consumers in travel agencies via travel literature such as brochures, leaflets etc. As such, tour operators are an important component in the European mass tourism market.

In the course of time, tour operators needed to integrate/merge with airline companies and the hospitality units in destination countries in order to increase their control on their final

Robinson Club chains, which were pioneers and being operated in most of the Mediterranean destinations, are still owned by conglomerates. Although the integration methods used by the urban hotel benefited from holiday camps and coastal hotels, direct investment is much more common due to the policies of mass tourism players such as

Switch

Traditional electronic distribution channels Internet based channels

Fig. 6. Distribution Channels for Accommodation Companies

DMS RTOs

Many of the current day trends in tourism can be dated to the post-war period –particularly the rise in demand for holidays. This period saw a growth in income, leisure time and opportunities for international travel (Page, 2003: 41). Mass tourism is basically developed in forms of package tours from developed western and northern European countries to the Mediterranean. Tour operators in developed countries prepared package tours by making contracts with hospitality principals and airline companies, and offered these tours to consumers in travel agencies via travel literature such as brochures, leaflets etc. As such,

In the course of time, tour operators needed to integrate/merge with airline companies and the hospitality units in destination countries in order to increase their control on their final

tour operators are an important component in the European mass tourism market.

GDSs Travel Agencies

Web

C

U

S

T

O

M

E

R

S

conglomerates and tour operators in Europe.

Hotel CRSs

Third Party

H

O

T

E

L

S

Source: O'Connor, 1999:110

**3.4 Tour operators** 

product, the packaged tour. Such a development boosted tourism investments in Europe and resulted in tour operators to become multinational companies. In order to diminish the risks taken, tour operators also took part in operating and managing coastal resorts and hotels in developing destination countries. However, it was not always possible to control the hospitality units unless an investment was made and the risk was taken. Besides, integrations methods such as franchising, management contracts etc. which eliminates the investment risks were limited for charter operations. Consequently tour operators were faced with heavy investment requirements and managerial costs when they aspired to control the airline companies or the seat capacity.

Heterogeneity of the tourism products poses difficulties in standardizing the experience. Since the package components are all in different places, standardizing the package tours as the final products of the tour operators is more difficult when compared to other industries. Package components that would be purchased from destination countries may not be at a desired standard due to economic, social and cultural characteristics of destination countries. Besides, fragility of tourism businesses under the threats of undesired actions such as terror, natural disasters and economic crises may require customers to be oriented towards other destinations. Considering such risks, tour operators prefer to integrate with the hospitality principals in destination countries in search for control. Moreover, the hospitality units in the destination countries, especially the resorts and camps in the Mediterranean coasts had limited financial resources to mitigate the under capacity and they represent a homogenous structure. As the controllers of European mass tourism, tour operators obtained other advantages apart from the product standardization as a result of homogenous structure of these hospitality units. Most important, they had the power to stimulate the demand. On the other hand, taking the golden age of mass tourism and demand from tourist generating countries (northern European) to destination countries (Mediterranean) into a consideration, figure 7 demonstrates the inclusive tour distribution network.

Fig. 7. Inclusive Tour Distribution Network

Security is a must for a healthier development of the tourism industry at a given destination. As such, any crisis in some destinations like Turkey, Egypt and the former Yugoslavia led dominant European tour operators to shift their reservations to other destinations. On the

Golden Age of Mass Tourism: Its History and Development 85

When they want to enter new markets, outgoing tour operators horizontally integrated with other outgoing tour operators which they already serve and had some market share in those markets. On the other hand, they sometimes horizontally integrated with incoming tour

Today, horizontal integrations are more popular in tourism industry as in the other industries. The main reason of this is globalization and accordingly, the need for brand image. It is easy to observe that the tour operators serving in the golden age of mass tourism did not have such branding priority and they preferred vertical integrations more as multinational companies with different brands. However, horizontal integrations became very popular in the globalization process and some giant European tour operators have accelerated their branding efforts either by integrating with each other or bringing all the companies under the same brand. Europe's largest tour operator, Touristik Union

operators in order to control the operations in destination countries.

International's (TUI) integrated structure is shown in Figure 9.

Fig. 8. Tour Operators' Vertically Integrated Structures in the Golden Age

other hand, large tour operators also tried to help these countries to overcome their crisis by sustaining their operations. For the purpose of eliminating the effects of both political and economical crisis, tour operators should consider some factors (Cavlek, 2002) such as:


Tour operators also stimulate the tourism demand due to pricing policies in the destinations. However, it took tour operators more than half a century to become determinant actors in mass tourism, as they are backed by finance companies, banks and holdings. These financial institutes are multi-national and global firms launching in tourism by integrating tour operators, namely conglomerates.

The capitalist economic environment in the beginning of twentieth century in the USA and the UK provided many companies to institutionalize at an early stage. Such institutionalized and growing firms diversified their product range and reduced the associated risks by investing in diverse industrial sectors. Increasing competition and decreasing profits led these companies strive to enlarge the markets and benefit opportunities in other countries. In search for such strategies they formed conglomerates operating in multi-national markets.

Increasing importance of the conglomerates played a vital role in changing the investment structure and in the development of mass tourism. At present, the largest tourism companies are under the control or ownership of these conglomerates.

#### **3.4.1 Vertical integrations**

Vertical integrations have been applicable in the all levels of the tourism industry's production and distribution levels. Airlines, hotels, travel agencies and even food & beverage companies have integrated with the other suppliers with different purposes in the golden age of mass tourism. However, the majority of vertical integrations in tourism industry are in fact done by tour operators.

As the producers of the final product (inclusive tour), tour operators went to backward vertical integrations for controlling the product components, product standardization and to gain a competitive advantage. Tour operators also went to forward vertical integrations with travel agencies for marketing purposes and for controlling the market.

The vertical integrations in the European tourism industry are both the reason and the consequence of mass tourism. The reasons of why the vertical integrations increased the tourism demand are lowered costs and prices due to integrations (Yarcan, 1996:65). On the other hand, the urge for more vertical integrations is related with controlling the 'seat' and the 'bed' supply and gaining competitive advantages. Figure 8 depicts the structure of vertically integrated tour operators in the golden age of mass tourism.

#### **3.4.2 Horizontal integrations**

Tour operators integrated also horizontally especially for the scale economies. It is expected to increase the production and reduce the cost when the companies operating on the same levels of the production and distribution levels are horizontally integrated (Pender, 2000:233).

other hand, large tour operators also tried to help these countries to overcome their crisis by sustaining their operations. For the purpose of eliminating the effects of both political and

The type, size, estimated duration and the consequences of the crisis in destination

 Government policies in the tourist generating countries about the destinations in crisis. Tour operators also stimulate the tourism demand due to pricing policies in the destinations. However, it took tour operators more than half a century to become determinant actors in mass tourism, as they are backed by finance companies, banks and holdings. These financial institutes are multi-national and global firms launching in tourism

The capitalist economic environment in the beginning of twentieth century in the USA and the UK provided many companies to institutionalize at an early stage. Such institutionalized and growing firms diversified their product range and reduced the associated risks by investing in diverse industrial sectors. Increasing competition and decreasing profits led these companies strive to enlarge the markets and benefit opportunities in other countries. In search

Increasing importance of the conglomerates played a vital role in changing the investment structure and in the development of mass tourism. At present, the largest tourism

Vertical integrations have been applicable in the all levels of the tourism industry's production and distribution levels. Airlines, hotels, travel agencies and even food & beverage companies have integrated with the other suppliers with different purposes in the golden age of mass tourism. However, the majority of vertical integrations in tourism

As the producers of the final product (inclusive tour), tour operators went to backward vertical integrations for controlling the product components, product standardization and to gain a competitive advantage. Tour operators also went to forward vertical integrations

The vertical integrations in the European tourism industry are both the reason and the consequence of mass tourism. The reasons of why the vertical integrations increased the tourism demand are lowered costs and prices due to integrations (Yarcan, 1996:65). On the other hand, the urge for more vertical integrations is related with controlling the 'seat' and the 'bed' supply and gaining competitive advantages. Figure 8 depicts the structure of

Tour operators integrated also horizontally especially for the scale economies. It is expected to increase the production and reduce the cost when the companies operating on the same levels

of the production and distribution levels are horizontally integrated (Pender, 2000:233).

for such strategies they formed conglomerates operating in multi-national markets.

companies are under the control or ownership of these conglomerates.

with travel agencies for marketing purposes and for controlling the market.

vertically integrated tour operators in the golden age of mass tourism.

economical crisis, tour operators should consider some factors (Cavlek, 2002) such as:

countries.

**3.4.1 Vertical integrations** 

**3.4.2 Horizontal integrations** 

industry are in fact done by tour operators.

Their investments in those destinations.

by integrating tour operators, namely conglomerates.

When they want to enter new markets, outgoing tour operators horizontally integrated with other outgoing tour operators which they already serve and had some market share in those markets. On the other hand, they sometimes horizontally integrated with incoming tour operators in order to control the operations in destination countries.

Today, horizontal integrations are more popular in tourism industry as in the other industries. The main reason of this is globalization and accordingly, the need for brand image. It is easy to observe that the tour operators serving in the golden age of mass tourism did not have such branding priority and they preferred vertical integrations more as multinational companies with different brands. However, horizontal integrations became very popular in the globalization process and some giant European tour operators have accelerated their branding efforts either by integrating with each other or bringing all the companies under the same brand. Europe's largest tour operator, Touristik Union International's (TUI) integrated structure is shown in Figure 9.

Fig. 8. Tour Operators' Vertically Integrated Structures in the Golden Age

Golden Age of Mass Tourism: Its History and Development 87

of mass production (Urry, 1990). A changing demand structure also influenced the development of mass tourism after the Second World War. Leisure needs of working classes

Although mass tourism was not customer oriented in the beginning, the tourists were the final consumers of the package tour. Supply was composed of accommodation establishments, tour operators and travel agencies. As a result of increasing production, the potential demand was converted to active demand. The trend was mass production, mass marketing and mass consumption. Consequently consumers drove similar cars, consumed

On the basis of aforementioned reasons it cannot be concluded that mass tourism always expanded in the same direction and manner. Expectedly, wealthier people with higher educational levels were in a way above this trend. However, the masses found mass tourism

The core of mass tourism in Europe is composed of cheaper package tours organized by tour operators and charter flights. Tour operators had representatives in destinations on the basis of research. This led tourists to feel secure while travelling. On the other hand, in the USA the determinants of mass tourism were airline oligopolies and hotel chains. While tours in Europe were towards coastal areas in the Mediterranean, package tours in the USA were basically focused on business travel and domestic travel. As a result, the transportation vehicles in the initial phase of mass tourism were charter flights in Europe, and coach companies or private automobiles in the USA. Even in 1987 three fourth of the transportation in the USA was on highways (Poon, 1993: 50). For these reasons, the role of American hotels was completely different than the hotels included in package tours in Europe. Consequently, motels, highway hotels and urban hotels developed in the USA, while resort hotels and holiday camps were flourishing in European destinations. The

American chain hotels with standardized products spread out around the world.

Another factor that affects different developments in mass tourism in both continents is the paid (salaried) vacations. The average length of paid vacation is two weeks in the USA compared to four weeks in Europe. As a result, Europeans could elect more international travels. On the other hand, weekend vacations and short holidays are more common in the

Although the development of mass tourism experienced different phases in both Europe and the USA, its global development can be examined in two parts. First is the holidays taken by low or middle income individuals. Their holidays are inclined towards sea, sun and sand. The organizers of the holidays are the conglomerates and the tour operators. In international transportation mostly charter airline companies under the control of conglomerates and tour operators are used. The travel related services are mostly held by incoming tour operators under the provision of conglomerates or tour operators or representatives working under the supervision of outgoing tour operators. Accommodation in these packaged tours is offered by homogenous hotels and resorts in the coastal areas offering entertaining and recreational activities. As can be seen, holiday tourism is directed towards low and middle income tourists having two to four week paid holidays. Vacations are realized in resorts or holiday camps closed to the outer environment and hence cheaper

also facilitated the development of mass tourism.

reasonable due to its price levels.

due to higher rate of participation.

USA.

similar food and travelled to similar destinations (Poon, 1993: 39).

Fig. 9. Horizontally and Vertically Integrated Structure of World of TUI Tour Operator

#### **4. Conclusions and reflections of mass consumption in tourism**

Consumers are core to any economic activity, and tourism is not an exception to this. However, the post-war years are slightly different. The focus of business in 50s is the mass production, scale economies, standard products and low prices in the tourism industry as in the case of other industries (Poon, 1993:38). The idea of "selling as much as produced" was common among the businesses due to changes in demand. In short, mass tourism was salesoriented rather than a consumer one. In other words, due to the large number of tourists demonstrating homogenous interests, the tourism product was provided under conditions

Fig. 9. Horizontally and Vertically Integrated Structure of World of TUI Tour Operator

Consumers are core to any economic activity, and tourism is not an exception to this. However, the post-war years are slightly different. The focus of business in 50s is the mass production, scale economies, standard products and low prices in the tourism industry as in the case of other industries (Poon, 1993:38). The idea of "selling as much as produced" was common among the businesses due to changes in demand. In short, mass tourism was salesoriented rather than a consumer one. In other words, due to the large number of tourists demonstrating homogenous interests, the tourism product was provided under conditions

**4. Conclusions and reflections of mass consumption in tourism** 

of mass production (Urry, 1990). A changing demand structure also influenced the development of mass tourism after the Second World War. Leisure needs of working classes also facilitated the development of mass tourism.

Although mass tourism was not customer oriented in the beginning, the tourists were the final consumers of the package tour. Supply was composed of accommodation establishments, tour operators and travel agencies. As a result of increasing production, the potential demand was converted to active demand. The trend was mass production, mass marketing and mass consumption. Consequently consumers drove similar cars, consumed similar food and travelled to similar destinations (Poon, 1993: 39).

On the basis of aforementioned reasons it cannot be concluded that mass tourism always expanded in the same direction and manner. Expectedly, wealthier people with higher educational levels were in a way above this trend. However, the masses found mass tourism reasonable due to its price levels.

The core of mass tourism in Europe is composed of cheaper package tours organized by tour operators and charter flights. Tour operators had representatives in destinations on the basis of research. This led tourists to feel secure while travelling. On the other hand, in the USA the determinants of mass tourism were airline oligopolies and hotel chains. While tours in Europe were towards coastal areas in the Mediterranean, package tours in the USA were basically focused on business travel and domestic travel. As a result, the transportation vehicles in the initial phase of mass tourism were charter flights in Europe, and coach companies or private automobiles in the USA. Even in 1987 three fourth of the transportation in the USA was on highways (Poon, 1993: 50). For these reasons, the role of American hotels was completely different than the hotels included in package tours in Europe. Consequently, motels, highway hotels and urban hotels developed in the USA, while resort hotels and holiday camps were flourishing in European destinations. The American chain hotels with standardized products spread out around the world.

Another factor that affects different developments in mass tourism in both continents is the paid (salaried) vacations. The average length of paid vacation is two weeks in the USA compared to four weeks in Europe. As a result, Europeans could elect more international travels. On the other hand, weekend vacations and short holidays are more common in the USA.

Although the development of mass tourism experienced different phases in both Europe and the USA, its global development can be examined in two parts. First is the holidays taken by low or middle income individuals. Their holidays are inclined towards sea, sun and sand. The organizers of the holidays are the conglomerates and the tour operators. In international transportation mostly charter airline companies under the control of conglomerates and tour operators are used. The travel related services are mostly held by incoming tour operators under the provision of conglomerates or tour operators or representatives working under the supervision of outgoing tour operators. Accommodation in these packaged tours is offered by homogenous hotels and resorts in the coastal areas offering entertaining and recreational activities. As can be seen, holiday tourism is directed towards low and middle income tourists having two to four week paid holidays. Vacations are realized in resorts or holiday camps closed to the outer environment and hence cheaper due to higher rate of participation.

Golden Age of Mass Tourism: Its History and Development 89

Gee, C.Y., Makens, J.C. & Choy, D.J. (1997). *The Travel Industry,* John Wiley & Sons, ISBN

Go, F. , Pyo, S., Uysal, M. & Michalik, B.J. (1990). 'Decision Criteria for Transnational Hotel Expansion'. *Tourism Management,* Vol. 11 No 4, pp. 297-304, ISSN: 0261-5177 Holloway, J.C. (1998). *The Business of Tourism, Fifth Edition,* Longman, ISBN 0-273-70161-4,

Inkpen, G. (1998). *Information Technology for Travel and Tourism*, Addison Wesley Longman

Medlik, S (1996). *Dictionary of Travel, Tourism and Hospitality,* Butterworth-Heinemann, ISBN

Middleton, T.C., & Lickoris, L.J. (2005). *British Tourism: The Remarkable Story of Growth*, Elsevier Butterworth-Heinemann, ISBN 978-0750633741, Great Britain. Miller, J. (1997). 'Travel trends point to market stronghold'. *Hotel & Motel Management,* 

O'Connor, P. (1999). *Electronic Information Distribution in Tourism and Hospitality,* CABI

Page, S.J. (2003). *Tourism management: Managing for change,* Elsevier Butterworth-Heinemann,

Papatheodorou, A. (2008). The Impact of Civil Aviation Regimes on Leisure Travel. In:

Pender, L. (2000). Travel trade and Transport, In:Franchising Hospitality Services, C.

Poon, A. (1993). *Tourism, Technology and Competitive Strategies*, Cabi Publishing, ISBN 978-

Renshaw, M. B. (1997). *The Travel Agent*. Business Education Publishers Ltd., ISBN 978-

Sezgin, E. (2004). *Bilisim Teknolojileri ve Finansal Yaplanma Surecinde Turizm Endustrisi ve Turkiye Turizmi*, Anadolu Universitesi Yay, ISBN 9789750602672, Eskisehir. Sezgin, E. (2010). Temel Bilet Satis Kavramlari ve Tek Yonlu Yolculuklar. In: *Bilet Satis*, E. Sezgin, pp. 2-19 Anadolu Universitesi Yay., ISBN 9789750608131, Eskisehir. Swarbrooke, J. & Horner, S. (2007). *Consumer behaviour in tourism*. Elsevier, ISBN 978-

Syratt, G., & Archer, J. (2003). *Manual of Travel Agency Practice*. Elsevier Butterworth-

Urry, J. (1990). *The Tourist Gaze: Leisure and Travel in Contemporary Societies*. Sage

Walker, J.R. (1996). *Introduction to Hospitality*, Prentice Hall, ISBN 0-13-1995146, New

Weaver, D. & Lawton, L. (2006). *Tourism Management*, John Wiley and Sons Australia, Ltd.,

Yale, P. (1995). *The Business of Tour Operations*. Longman Group Ltd., ISBN 978-0582277977,

*Aviation and Tourism Implications for Leisure Travel*, A. Graham, A. Papatheodorou and P. Frsyth, pp.49-59, Ashgate Publication Ltd., ISBN 978-

Lashley & A. Morrison, pp. 221-238, Butterworth-Heinemann, ISBN 9780750647724,

978-0471287742, New York.

978-0750656504, Oxford.

Ltd., ISBN 978-0582310025, England.

Vol.212 No.8, pp.1-2, ISSN 0018-6082

Publishing, ISBN 0-85199-283-8, Oxon.

ISBN 0-7506-5752-9, Oxford.

0851989501, United Kingdom.

Heinemann, ISBN 978-0750656894, Oxford.

Publications, ISBN 978-0803981836, London.

ISBN 978-0470809549, Singapore.

1901888003, Great Britain.

0750667357, Oxford.

Jersey.

Malaysia.

0754671879, England

United Kingdom

Harlow.

The second structure in mass tourism is cultural tourism. The range of cultural tourism activities include the use of cultural heritage assets such as archaeological sites, museums, castles, palaces, historical buildings, famous buildings, ruins, art, sculpture, crafts, galleries, ethnic communities, religious buildings and other features that represent people and their cultures (Miller, 1997). In a broad sense, cultural tourism also includes activities with a cultural content as parts of trips and visits with a combination of pursuits (Medlik, 1996). The income level of cultural tourists is higher compared to vacationers. Essentially, cultural tours are organized by expert tour operators. Destination services are usually supplied by independent incoming tour operators and the guides employed by these tour operators. The cultural tourists stay in urban hotels. In this sense, a comparison of cultural tourism and holiday tourism under the umbrella of mass tourism is given in Table 1.


(Sezgin, 2004:57)

Table 1. Holiday Tourism and Circuit Tourism Characteristics in Mass Tourism

Mass tourism developed differently in two continents but its managerial structure is fairly similar. Product standardization, branding and homogenous company structure is achieved in both continents. However, these are achieved by chain hotels in the USA and by the conglomerates and tour operators in Europe (Poon, 1993: 50). Whatever the direction of the development is, mass tourism allowed masses to enjoy vacations, entertainments and holidays. Although, Poon (1993) claimed that tourism has changed and converted into 'new tourism', and mass tourism has completed its golden age, it may be concluded that mass tourism is still popular and still the dominator of the industrial tourism as long as new markets emerge.

#### **5. References**


The second structure in mass tourism is cultural tourism. The range of cultural tourism activities include the use of cultural heritage assets such as archaeological sites, museums, castles, palaces, historical buildings, famous buildings, ruins, art, sculpture, crafts, galleries, ethnic communities, religious buildings and other features that represent people and their cultures (Miller, 1997). In a broad sense, cultural tourism also includes activities with a cultural content as parts of trips and visits with a combination of pursuits (Medlik, 1996). The income level of cultural tourists is higher compared to vacationers. Essentially, cultural tours are organized by expert tour operators. Destination services are usually supplied by independent incoming tour operators and the guides employed by these tour operators. The cultural tourists stay in urban hotels. In this sense, a comparison of cultural tourism and

**Consumers Organizers Transportation Destination** 

Charter Airlines

Scheduled Airlines

Conglomerates and Holiday Tour Operators

Specialist Tour Operators

Mass tourism developed differently in two continents but its managerial structure is fairly similar. Product standardization, branding and homogenous company structure is achieved in both continents. However, these are achieved by chain hotels in the USA and by the conglomerates and tour operators in Europe (Poon, 1993: 50). Whatever the direction of the development is, mass tourism allowed masses to enjoy vacations, entertainments and holidays. Although, Poon (1993) claimed that tourism has changed and converted into 'new tourism', and mass tourism has completed its golden age, it may be concluded that mass tourism is still popular and still the dominator of the industrial tourism as long as new

Cavlek, N. (2002). 'Tour Operators and Destination Safety', *Annals of Tourism Research*, Vol. 3

Cook, R. A., Yale, L. J. and J. J. Marqua (2006). *Tourism: the Business of Travel,* Prentice Hall,

Doganis, R. (1998). *Flying of Course "The Economics of International Airlines"*, Routledge, ISBN

Fuller, G. (1994). *Travel Agency Management*, South-Western Publishing Co., ISBN 978-

Table 1. Holiday Tourism and Circuit Tourism Characteristics in Mass Tourism

**Country Services** 

Integrated Incoming Tour Operators and/or Representatives

Independent Incoming Tour Operators

**Accommodation** 

Holiday Villages and Resort Hotels

City Hotels

holiday tourism under the umbrella of mass tourism is given in Table 1.

**Travel Purpose** 

Recreation, Amusement

Travelling, Sightseeing Low and Middle Income

Middle and Upper Income, Senior Citizen Groups

No.29, pp.478-496, ISSN 0160-7383

ISBN 978-0137147298, New Jersey.

978-0415213240, London.

0538706933, Cincinnati, Ohio.

**Holiday Tourism** 

**Circuit Tourism** 

(Sezgin, 2004:57)

markets emerge.

**5. References** 


**5** 

*Taipei* 

**Recent Developments in Research and Future** 

People interested in travelling for gastronomic motivations were increasing gradually (Bessiere, 1998). "Culinary Tourism" was a term first suggested in 1998 (Long, 2003). It expressed the idea of tourists' experiencing the culture of a destination through food. Tourism was a vehicle for the communication of official visions which reflected favourably on the regime and could be harnessed to a hegemonic agenda (Hall & Oehlers, 2000). And, it also conveyed images such as those of racial harmony and outstanding economic progress (Henderson, 2004). From this viewpoint, culinary tourism is a very good tool and method. Food tourism was one constituent of a tourism strategy dedicated to making the best use of scarce resources in an approach for its creativity and adaptability, made necessary by the lack of conventional natural and cultural tourism assets (Teo & Chang, 2000). Namely, it became a viable alternative for new destinations that cannot benefit from "sun, sea, and sand," or natural or cultural resources, or a valid addition to more established destinations. Unlike many other travel activities and attractions, destination's gastronomy was usually available year-round, any time of day and in any weather (Richards, 2002). Gastronomy tourism was a meaningful and possibly a highly loyal market segment, and could also be hypothesized that gastronomy experiences were powerful tools for marketing the destination (Kivela & Crotts, 2005). Food consumption could turn to be a peak touristic experience and could be demonstrated by a newly emerging form of tourism, in which the major, sometimes even sole, motivation to tourism was the tastes of foods that were much more various, with longer range of choices, and different from their daily reservoirs of foods. Such a form of tourism included gastronomic tourism, food festivals, wine tourism, and other food-related events (Quan & Wang, 2004). For this perspective, Hjalager and Corigliano (2000) proposed that Italy had been far more successful in developing the cultural role of gastronomy. Gastronomic tourism had grown significantly in the last few

years, thus improving the economic and social growth of weaker areas.

Kivela and Crotts (2005) identified that gastronomy was inextricably linked to the destination and the destination's image; maybe multidimensional forms which were

**1. Introduction** 

**Directions of Culinary Tourism: A Review** 

Ching-Shu Su1 and Jeou-Shyan Horng2

*2Department of Hospitality Management,* 

*1Graduate Institute of Tourism and Hospitality Management, Jinwen University of Science & Technology, New Taipei City* 

 *De Lin Institute of Technology, Taipei, New Taipei City* 

Yarcan, S. (1996). *Turkiye'de Turizm ve Uluslararasilasma*, Bogazici Uni. Yay., 9789755180847, Istanbul.

Zeppelin, October 17, 2011. Accessed at: < http://en.wikipedia.org/wiki/Zeppelin>.

### **Recent Developments in Research and Future Directions of Culinary Tourism: A Review**

Ching-Shu Su1 and Jeou-Shyan Horng2

*1Graduate Institute of Tourism and Hospitality Management, Jinwen University of Science & Technology, New Taipei City 2Department of Hospitality Management, De Lin Institute of Technology, Taipei, New Taipei City Taipei* 

#### **1. Introduction**

90 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Yarcan, S. (1996). *Turkiye'de Turizm ve Uluslararasilasma*, Bogazici Uni. Yay., 9789755180847,

Zeppelin, October 17, 2011. Accessed at: < http://en.wikipedia.org/wiki/Zeppelin>.

Istanbul.

People interested in travelling for gastronomic motivations were increasing gradually (Bessiere, 1998). "Culinary Tourism" was a term first suggested in 1998 (Long, 2003). It expressed the idea of tourists' experiencing the culture of a destination through food. Tourism was a vehicle for the communication of official visions which reflected favourably on the regime and could be harnessed to a hegemonic agenda (Hall & Oehlers, 2000). And, it also conveyed images such as those of racial harmony and outstanding economic progress (Henderson, 2004). From this viewpoint, culinary tourism is a very good tool and method.

Food tourism was one constituent of a tourism strategy dedicated to making the best use of scarce resources in an approach for its creativity and adaptability, made necessary by the lack of conventional natural and cultural tourism assets (Teo & Chang, 2000). Namely, it became a viable alternative for new destinations that cannot benefit from "sun, sea, and sand," or natural or cultural resources, or a valid addition to more established destinations. Unlike many other travel activities and attractions, destination's gastronomy was usually available year-round, any time of day and in any weather (Richards, 2002). Gastronomy tourism was a meaningful and possibly a highly loyal market segment, and could also be hypothesized that gastronomy experiences were powerful tools for marketing the destination (Kivela & Crotts, 2005). Food consumption could turn to be a peak touristic experience and could be demonstrated by a newly emerging form of tourism, in which the major, sometimes even sole, motivation to tourism was the tastes of foods that were much more various, with longer range of choices, and different from their daily reservoirs of foods. Such a form of tourism included gastronomic tourism, food festivals, wine tourism, and other food-related events (Quan & Wang, 2004). For this perspective, Hjalager and Corigliano (2000) proposed that Italy had been far more successful in developing the cultural role of gastronomy. Gastronomic tourism had grown significantly in the last few years, thus improving the economic and social growth of weaker areas.

Kivela and Crotts (2005) identified that gastronomy was inextricably linked to the destination and the destination's image; maybe multidimensional forms which were

Recent Developments in Research and Future Directions of Culinary Tourism: A Review 93

For the perspective of authenticity, there were two myths brought out by Fox (2007). One such myth was the belief in gastronomic authenticity as based on the juxtaposition of "good old food" and "bad new food". In truth, what was popularly believed to be "old food" seemed not to be old at all. Another common myth was the idea of gastronomic tradition. Throughout history, trade, travel, transport and technology had been affecting the gastronomic identities of regions and countries, continually changing what was generally perceived as customary. These two myths induce us to reflect on the tradition and

Except from the perspective of authenticity, another viewpoint was from strategies and regulations. Hjalager and Corigliano (2000) argued that national economic, agricultural and food policies, rather than tourism policies, determined the standards and development of food for tourists. And, it was proposed that high concentrations of decrease rather than an increase in food standards in restaurants. Being a highly unstable factor, tourists did not have the opportunity to put more permanent consumer pressure on restaurants; this role was reserved for local residents. It revealed that the strategies played an important role for

Besides, Quan and Wang (2004) suggested that food festivals or gastronomic tourism were one of sources that helped enhance the local identity of a destination community, and hence bring about more community participations. Such community participations and supports were one of social conditions for food-related tourism to be sustainable. Thus, there is no reason why local and traditional foods are seen as trivial and should be

The attraction of gastronomy was proposed by previous research (Hjalager, 2002). It mainly comes from enjoyable, unique, and high-quality food and services, better participation in indigenous culture through food, opportunity to purchase and sample unique products that are not readily available in their own country, unique opportunities for discovering new taste sensations, and access to well-coordinated gastronomy-related experiences (Kivela & Crotts, 2006). It was found that experiencing local culture and getting new experience were the main source of attraction. Therefore, McKercher, Okumus and Okumus (2008) suggested that consuming food may be a ubiquitous activity for most visitors. Furthermore, a followup qualitative study was undertaken to determine whether the destination's gastronomy contributed to the quality of visitors' experience, whether visitors would return to the destination because of its gastronomy, and whether culinary travelers represent a distinct market segment of an overall visitor market. Regarding the model of local food consumption, a model constituted of three categories: motivational factors, demographic factors and physiological factors was proposed (Kim, Eves, & Scarles, 2009). And, the attributes that influence the evaluation of travel dining experience were identified: tourists' own food culture, the contextual factor of the dining experience, variety and diversity of food, perception of the destination, service encounter, and tour guide's

However, for foreign tourists, visiting destinations and experiencing different cuisines from their countries could result in anxiety and uncertainty (MacLaurin, 2001). Cohen and Avieli

innovation of local cuisine, and emphasize the importance of local cuisine identity.

regional culinary tourism development.

ignored in tourism development.

performance (Chang, Kivela, & Mak, 2011).

**2.2 The attraction and impediment of cuisine to the tourists** 

clearly understood as yet. Food and beverage could be itself an attraction in a destination, such as Chilli Festival in Singapore food festival, Taste of Chicago, Wine tour in Europe, and Chocolate festival in Suffern, New York, and so on. In these cases, foods either constitute an event attraction or act as the gastronomic part of the attractions in destinations. In other words, the gastronomic experience could become a major, or one of major motivations, for travel (Quan & Wang, 2004). As it can be seen, for some areas, gastronomy has become an important attraction and is influential to their development. Therefore, the issues related to culinary tourism are worth of more attention and contribution in the future.

This study aims to review the researches of culinary and gastronomy tourism since 2000 to explore the significant developments and trends in culinary tourism and gastronomy tourism recently. The results of the review are presented by study subjects involved, research countries involved and research methods employed. Several significant research trends are identified for additional discussions in later sections. It's expected to make much contribution to the future researches and important directions of development.

#### **2. Topical review**

After reviewing recent researches of culinary tourism, according to the research topics, it mainly can be classified to six subjects: *the relationship of food and tourism*, *the attraction and impediment of cuisine to the tourists*, *market segment of culinary tourists*, *the draft of culinary tourism developing strategies*, *exploration of promotion and marketing tools,* and *the application of theories in culinary tourism development*. In the following, it'll be discussed in these six topics.

#### **2.1 The relationship of food and tourism**

The relationship of food and tourism is one of the concerned issues in culinary tourism recently. However, it was explored from different perspectives which include culture, the authenticity of cuisines, strategy, participation and supporting of communities in destinations, and so on. As it can be seen, the relationship of food and tourism contains many dimensions.

Food, as it's well known, is primarily a cultural category. In today's increasingly globalized world, food remained one of the most prominent points of cultural difference among regions and communities, as well as an important cornerstone of cultural identity (Delamont, 1994). Every culture was marked by a characteristic choice of foodstuffs, dishes, and menus, habitually consumed and in popular imagination tied to that culture as spaghetti were tied to Italian, wurst to German, and quiche to French culture. During their holiday, tourists naturally desired to undergo a process of (re)socialization which, among their things, was manifested in their choice of food (usually a preference for local dishes), in a change of cultural practices (participation in local rituals), and emergence of new beliefs (the acceptance of local symbolism) (Fox, 2007). Moreover, "local food" has the potential to enhance the visitor experience by connecting consumers to the region and its perceived culture and heritage (Sims, 2009). Everett and Aitchison (2008) proposed its role of food tourism in sustaining regional identity. Therefore, culinary tourism conveys the culture of destination to tourists, it's an essential element for experiencing local culture.

clearly understood as yet. Food and beverage could be itself an attraction in a destination, such as Chilli Festival in Singapore food festival, Taste of Chicago, Wine tour in Europe, and Chocolate festival in Suffern, New York, and so on. In these cases, foods either constitute an event attraction or act as the gastronomic part of the attractions in destinations. In other words, the gastronomic experience could become a major, or one of major motivations, for travel (Quan & Wang, 2004). As it can be seen, for some areas, gastronomy has become an important attraction and is influential to their development. Therefore, the issues related to culinary tourism are worth of more attention and

This study aims to review the researches of culinary and gastronomy tourism since 2000 to explore the significant developments and trends in culinary tourism and gastronomy tourism recently. The results of the review are presented by study subjects involved, research countries involved and research methods employed. Several significant research trends are identified for additional discussions in later sections. It's expected to make much

After reviewing recent researches of culinary tourism, according to the research topics, it mainly can be classified to six subjects: *the relationship of food and tourism*, *the attraction and impediment of cuisine to the tourists*, *market segment of culinary tourists*, *the draft of culinary tourism developing strategies*, *exploration of promotion and marketing tools,* and *the application of theories in culinary tourism development*. In the following, it'll be discussed in these six topics.

The relationship of food and tourism is one of the concerned issues in culinary tourism recently. However, it was explored from different perspectives which include culture, the authenticity of cuisines, strategy, participation and supporting of communities in destinations, and so on. As it can be seen, the relationship of food and tourism contains

Food, as it's well known, is primarily a cultural category. In today's increasingly globalized world, food remained one of the most prominent points of cultural difference among regions and communities, as well as an important cornerstone of cultural identity (Delamont, 1994). Every culture was marked by a characteristic choice of foodstuffs, dishes, and menus, habitually consumed and in popular imagination tied to that culture as spaghetti were tied to Italian, wurst to German, and quiche to French culture. During their holiday, tourists naturally desired to undergo a process of (re)socialization which, among their things, was manifested in their choice of food (usually a preference for local dishes), in a change of cultural practices (participation in local rituals), and emergence of new beliefs (the acceptance of local symbolism) (Fox, 2007). Moreover, "local food" has the potential to enhance the visitor experience by connecting consumers to the region and its perceived culture and heritage (Sims, 2009). Everett and Aitchison (2008) proposed its role of food tourism in sustaining regional identity. Therefore, culinary tourism conveys the culture of

destination to tourists, it's an essential element for experiencing local culture.

contribution to the future researches and important directions of development.

contribution in the future.

**2. Topical review** 

many dimensions.

**2.1 The relationship of food and tourism** 

For the perspective of authenticity, there were two myths brought out by Fox (2007). One such myth was the belief in gastronomic authenticity as based on the juxtaposition of "good old food" and "bad new food". In truth, what was popularly believed to be "old food" seemed not to be old at all. Another common myth was the idea of gastronomic tradition. Throughout history, trade, travel, transport and technology had been affecting the gastronomic identities of regions and countries, continually changing what was generally perceived as customary. These two myths induce us to reflect on the tradition and innovation of local cuisine, and emphasize the importance of local cuisine identity.

Except from the perspective of authenticity, another viewpoint was from strategies and regulations. Hjalager and Corigliano (2000) argued that national economic, agricultural and food policies, rather than tourism policies, determined the standards and development of food for tourists. And, it was proposed that high concentrations of decrease rather than an increase in food standards in restaurants. Being a highly unstable factor, tourists did not have the opportunity to put more permanent consumer pressure on restaurants; this role was reserved for local residents. It revealed that the strategies played an important role for regional culinary tourism development.

Besides, Quan and Wang (2004) suggested that food festivals or gastronomic tourism were one of sources that helped enhance the local identity of a destination community, and hence bring about more community participations. Such community participations and supports were one of social conditions for food-related tourism to be sustainable. Thus, there is no reason why local and traditional foods are seen as trivial and should be ignored in tourism development.

#### **2.2 The attraction and impediment of cuisine to the tourists**

The attraction of gastronomy was proposed by previous research (Hjalager, 2002). It mainly comes from enjoyable, unique, and high-quality food and services, better participation in indigenous culture through food, opportunity to purchase and sample unique products that are not readily available in their own country, unique opportunities for discovering new taste sensations, and access to well-coordinated gastronomy-related experiences (Kivela & Crotts, 2006). It was found that experiencing local culture and getting new experience were the main source of attraction. Therefore, McKercher, Okumus and Okumus (2008) suggested that consuming food may be a ubiquitous activity for most visitors. Furthermore, a followup qualitative study was undertaken to determine whether the destination's gastronomy contributed to the quality of visitors' experience, whether visitors would return to the destination because of its gastronomy, and whether culinary travelers represent a distinct market segment of an overall visitor market. Regarding the model of local food consumption, a model constituted of three categories: motivational factors, demographic factors and physiological factors was proposed (Kim, Eves, & Scarles, 2009). And, the attributes that influence the evaluation of travel dining experience were identified: tourists' own food culture, the contextual factor of the dining experience, variety and diversity of food, perception of the destination, service encounter, and tour guide's performance (Chang, Kivela, & Mak, 2011).

However, for foreign tourists, visiting destinations and experiencing different cuisines from their countries could result in anxiety and uncertainty (MacLaurin, 2001). Cohen and Avieli

Recent Developments in Research and Future Directions of Culinary Tourism: A Review 95

drafting culinary tourism development by employing SWOT analysis to explore culinary tourism development. Richards (2003) argued that tourists often placed considerable emphasis on how they feel at a destination, and how they experience what the destination offered, by carefully selecting that special restaurant and/or food that might fulfill a particular personal desire. Stewart, Bramble and Ziraldo (2008) argued that in order to attract one-time visitors back to the region of wine and culinary tourism, it's important to

Besides, there are many researches regarding the role of governments or official organizations. Kivela and Crotts (2006) suggested that developing the gastronomy tourism niche for tourists, it wasn't enough to simply offer a gastronomy experience visiting a destination. It was more desirable to make the tourists feel good about the destination. It required an effort on the part of the destination's DMO (Destination Marketing Organization) and gastronomy provided to educate tourists about why the local cuisine and its associated culture were unique to the city. The capacity of government websites to introduce and advertise traditional and local foods, restaurants, gastronomic tours, recipes and culinary cultures was exploreed (Horng & Tsai, 2010). And, du Rand, Heath and Alberts (2003) suggested that nearly half of the DMOs were not applying any specific strategies to promote food tourism, which clearly underlined the need for a product potential and attractiveness audit instrument, appropriate guidelines and a framework to enable DMOs to put in a more concerted effort regarding the

It could influence tourists' choices of destinations through diversified marketing tools (Baloglu, 2000; Gursoy & McCleary, 2004). The pictures and information in marketing medias and marketing tools could facilitate in promoting positive images of destinations. Now the communication tools used in food marketing were diversified, including brochures, pamphlets, internet, advertising initiatives, radio, TV and printed material (du

Regarding the effectiveness of each marketing tools, brochures were used as opposed to other promotional tools since they had been recognized as the most popular medium used by travel and tourism advertisers, and was the key image-creating tool in tourism (Morgan & Pritchard, 2000). The internet had developed rapidly during recent years and could be used as an effective advertising and promotional tool, not least in the tourism and hospitality industry (Wan, 2002). Therefore, recently the researches regarding advertisements and marketing tools which were applied to culinary tourism development

Focused on the research of brochures, Frochot (2003) took France as an example and proposed that regional food and cuisine were extremely important and very diversified across France and it had been a tool used by French regions to differentiate themselves on the global market place. However, if the "French uniqueness" was probably not debatable in terms of food traditions, the study of the brochures within France didn't show a strong disparity among the regions themselves. For the application of web-sites in culinary tourism, Boyne, Hall and Williams (2003) noted that while initiatives to promote local and regional food were often

enhance service through increased service training.

marketing and promotion of food tourism.

Rand, Heath & Alberts, 2003).

**2.5 Exploration of promotion and marketing tools** 

mainly contained the exploration of brochures and web-sites.

(2004) argued that the tourists met some impediments in experiencing local cuisine even when attracted to local cuisine; including hygiene standards, health considerations, communication gaps, and limited knowledge of tourists concerning the local cuisine. It's a good reminding for the development of culinary tourism; and, it's also an un-neglectful factor.

#### **2.3 Market segment of culinary tourists**

Market segmentation was broadly applied and discussed in marketing. The researches focused on culinary tourist segmentation were explored from different perspectives. It included the influential factors of culinary experience (Tse & Crotts, 2005), the satisfaction in restaurants and cuisines (Kivela & Crotts, 2005), and the general classification of culinary tourists (Ignatov & Smith, 2006).

Tse and Crotts (2005) proposed that culinary experience was influenced by national culture, length of stay, age, and repeat visitation. Specifically, respondents from low uncertainty avoidance countries patronized a greater number and diversity of culinary offers when compared to respondents from high uncertainty avoidance countries. Crotts and Pizam (2003) revealed that visitors of different nationalities evaluate identical services in a differential manner, where visitors from large power-distance high-masculinity cosieties (e.g., Japan and Taiwan) reported more critical satisfaction measures than visitors from small power-distance low-masculinity societies (e.g., Australian, Canadian, U.S.A., Europe). Kivela and Crotts (2005) argued that the self-described gastronomy visitors were more involved and purposeful in their restaurant and cuisine choices than the typical visitors and would therefore search out destination's unique and more satisfying gastronomy. And, these gastronomy tourists were more discerning customers as compared to typical leisure visitors. In addition, these self-described gastronomy tourists were more likely to be from Asian countries instead of the West, such evaluations may also have been influenced by national culture.

Moreover, the classification of culinary tourists was segmented clearly; they were food tourists, wine tourists, and food and wine tourists (Ignatov & Smith, 2006). The differences were displayed on gender, educational level, income, the way of experiencing food and the acquirement of travel information. Tikkanen (2007) introduced five sectors of food tourism where the needs and motivations are linked with Maslow's hierarchy of needs. Ryu and Jang (2006) stressed that past behavior had strong influence on tourists' intention of experiencing local cuisine. Focused on culinary events, culinary event attendees were clustered into two segments: food focusers and event seekers (Smith, & Costello, 2009). The presentation of market segmentation was very important to the restaurateurs who would like to attract tourists willing to experience local cuisine.

#### **2.4 The draft of culinary tourism development strategies**

The issues regarding to the relationship of culinary tourism development and national or local strategies were proposed by many researches. It showed that a close relationship existed between both of them. Destinations that already had the advantageous ingredients to support a gastronomy tourism strategy, such resources included unique and/or multiethnic cuisine, creative chefs, unique marine and agricultural products, unique culinary heritage, and so on (Kivela & Crotts, 2006). It provided a practical suggestion for

(2004) argued that the tourists met some impediments in experiencing local cuisine even when attracted to local cuisine; including hygiene standards, health considerations, communication gaps, and limited knowledge of tourists concerning the local cuisine. It's a good reminding for

Market segmentation was broadly applied and discussed in marketing. The researches focused on culinary tourist segmentation were explored from different perspectives. It included the influential factors of culinary experience (Tse & Crotts, 2005), the satisfaction in restaurants and cuisines (Kivela & Crotts, 2005), and the general classification of culinary

Tse and Crotts (2005) proposed that culinary experience was influenced by national culture, length of stay, age, and repeat visitation. Specifically, respondents from low uncertainty avoidance countries patronized a greater number and diversity of culinary offers when compared to respondents from high uncertainty avoidance countries. Crotts and Pizam (2003) revealed that visitors of different nationalities evaluate identical services in a differential manner, where visitors from large power-distance high-masculinity cosieties (e.g., Japan and Taiwan) reported more critical satisfaction measures than visitors from small power-distance low-masculinity societies (e.g., Australian, Canadian, U.S.A., Europe). Kivela and Crotts (2005) argued that the self-described gastronomy visitors were more involved and purposeful in their restaurant and cuisine choices than the typical visitors and would therefore search out destination's unique and more satisfying gastronomy. And, these gastronomy tourists were more discerning customers as compared to typical leisure visitors. In addition, these self-described gastronomy tourists were more likely to be from Asian countries instead of the West, such evaluations

Moreover, the classification of culinary tourists was segmented clearly; they were food tourists, wine tourists, and food and wine tourists (Ignatov & Smith, 2006). The differences were displayed on gender, educational level, income, the way of experiencing food and the acquirement of travel information. Tikkanen (2007) introduced five sectors of food tourism where the needs and motivations are linked with Maslow's hierarchy of needs. Ryu and Jang (2006) stressed that past behavior had strong influence on tourists' intention of experiencing local cuisine. Focused on culinary events, culinary event attendees were clustered into two segments: food focusers and event seekers (Smith, & Costello, 2009). The presentation of market segmentation was very important to the restaurateurs who would

The issues regarding to the relationship of culinary tourism development and national or local strategies were proposed by many researches. It showed that a close relationship existed between both of them. Destinations that already had the advantageous ingredients to support a gastronomy tourism strategy, such resources included unique and/or multiethnic cuisine, creative chefs, unique marine and agricultural products, unique culinary heritage, and so on (Kivela & Crotts, 2006). It provided a practical suggestion for

the development of culinary tourism; and, it's also an un-neglectful factor.

**2.3 Market segment of culinary tourists** 

may also have been influenced by national culture.

like to attract tourists willing to experience local cuisine.

**2.4 The draft of culinary tourism development strategies** 

tourists (Ignatov & Smith, 2006).

drafting culinary tourism development by employing SWOT analysis to explore culinary tourism development. Richards (2003) argued that tourists often placed considerable emphasis on how they feel at a destination, and how they experience what the destination offered, by carefully selecting that special restaurant and/or food that might fulfill a particular personal desire. Stewart, Bramble and Ziraldo (2008) argued that in order to attract one-time visitors back to the region of wine and culinary tourism, it's important to enhance service through increased service training.

Besides, there are many researches regarding the role of governments or official organizations. Kivela and Crotts (2006) suggested that developing the gastronomy tourism niche for tourists, it wasn't enough to simply offer a gastronomy experience visiting a destination. It was more desirable to make the tourists feel good about the destination. It required an effort on the part of the destination's DMO (Destination Marketing Organization) and gastronomy provided to educate tourists about why the local cuisine and its associated culture were unique to the city. The capacity of government websites to introduce and advertise traditional and local foods, restaurants, gastronomic tours, recipes and culinary cultures was exploreed (Horng & Tsai, 2010). And, du Rand, Heath and Alberts (2003) suggested that nearly half of the DMOs were not applying any specific strategies to promote food tourism, which clearly underlined the need for a product potential and attractiveness audit instrument, appropriate guidelines and a framework to enable DMOs to put in a more concerted effort regarding the marketing and promotion of food tourism.

#### **2.5 Exploration of promotion and marketing tools**

It could influence tourists' choices of destinations through diversified marketing tools (Baloglu, 2000; Gursoy & McCleary, 2004). The pictures and information in marketing medias and marketing tools could facilitate in promoting positive images of destinations. Now the communication tools used in food marketing were diversified, including brochures, pamphlets, internet, advertising initiatives, radio, TV and printed material (du Rand, Heath & Alberts, 2003).

Regarding the effectiveness of each marketing tools, brochures were used as opposed to other promotional tools since they had been recognized as the most popular medium used by travel and tourism advertisers, and was the key image-creating tool in tourism (Morgan & Pritchard, 2000). The internet had developed rapidly during recent years and could be used as an effective advertising and promotional tool, not least in the tourism and hospitality industry (Wan, 2002). Therefore, recently the researches regarding advertisements and marketing tools which were applied to culinary tourism development mainly contained the exploration of brochures and web-sites.

Focused on the research of brochures, Frochot (2003) took France as an example and proposed that regional food and cuisine were extremely important and very diversified across France and it had been a tool used by French regions to differentiate themselves on the global market place. However, if the "French uniqueness" was probably not debatable in terms of food traditions, the study of the brochures within France didn't show a strong disparity among the regions themselves. For the application of web-sites in culinary tourism, Boyne, Hall and Williams (2003) noted that while initiatives to promote local and regional food were often

Recent Developments in Research and Future Directions of Culinary Tourism: A Review 97

Asia, some areas such as Hong Kong, Singapore, if gastronomy tourists can be shown to satisfy all the conventional requirements of a unique market segment, it becomes a viable alternative for new destinations that cannot benefit from "sun, sea and sand", or natural or cultural resources, or a valid addition to more established destinations. Here, the discussion

Hong Kong's cuisine is renowned for its exotic fusion of Eastern and Western flavours along with a wide variety of culinary delights. Its cultural blend, proximity to mainland China and reputation for quality have made Hong Kong a Gourmet Paradise. It was indicated that Hong Kong's gastronomy was a significant factor that positively contributed to the respondents' desire to return to Hong Kong (Kivela & Crotts, 2005; 2009). Hong Kong's gastronomy plays a major contributing role in the creation of a high-quality travelling experience and return behavior. Namely, gastronomy is increasingly vital to a whole range of tourism products and

Singaporeans is a cosmopolitan and multicultural city and passionate about food and eating. It's not just East-meets-West when it comes to feasting in Singapore- it is a tasty tale about a country's unique cultural tapestry woven in with its distinct influences to capture the essence of Singapore's multicultural heritage. And, it uniquely distinguishes Singapore as a

Singapore Tourism Board established Food and Beverage Division for the development and marketing of culinary tourism. It takes charge of the market of Singapore cuisine, the development of product and industry, channel management and investment to form it as a destination with a "combining local cuisine, international cuisine, dining experience and nightlife entertainment". Furthermore, Singapore introduced ten "must try" dishes and expected to become the representatives of Singapore cuisine. Additionally, the quality of tourists' dining experience could be improved. Henderson (2004) identified some of the critical connections between food and tourism with specific reference to Singapore where food and eating out is a tourism promotion theme of growing prominence, and policies were shaped within the framework of the country's distinctive features. Singapore is moving towards becoming a higher order food destination (Hjalager, 2002); and, developing a distinctive form of food tourism adapted to the conditions which prevail there

Ashkenazi and Jacob (2000) argued that major factors affecting Japanese food culture were geography, history, climate, religion, and external influences. For Japan, in addition to the tradition of visiting *onsen* (hot springs), one of the major purposes of travel for leisure in Japan concerned the enjoyment of different cuisines. Such culinary tourism also involved the exploration and enjoyment of the variety found in food in relation to regional cultural variations in Japan. And, in Japan, culinary tourism had been a major factor in the

will be focused on the three main areas: Hong Kong, Singapore and Japan.

services that are offered in Hong Kong (Kivela & Crotts, 2005, 2006).

**3.1.1 Hong Kong** 

**3.1.2 Singapore** 

food capital of Asia.

(Henderson, 2004).

development of some regions (Tussyadiah, 2005).

**3.1.3 Japan** 

being developed with an emphasis on the tourism market, and in some cases had developed high-quality web sites. These web sites were less readily accessible to information-seeking consumers than they might otherwise be. It could be found that brochures and web-sites couldn't convey the characteristics of local cuisine efficiently.

For other researches, Tussyadiah (2005) reported that there were three main references used by travelers in Japan, beside travel brochures: travel magazines, television programs, and the internet. And, the media played a very strong role in the direction of Japanese culinary tourism. So, if the media could be well applied to the marketing of culinary tourism, it's very important to the promotion of culinary tourism. As it can be seen, to well apply each kind of marketing tools is very important to culinary tourism promotion of a destination.

#### **2.6 The application of theories in culinary tourism development**

Bourdieu (1984) operated with a model of four basic lifestyles in his work "*Distinction*". Hjalager (2004) proposed this model as sociology of tourism and gastronomy to be applied to tourism research in the future through empirical research; such as which lifestyle segment could be attracted by destinations. Based on this theory, it could infer its implication of tourism and gastronomy. Similarly, by utilizing the theory of social psychology, Ryu and Jang (2006) employed *Theory of Reasoned Action* (TRA) to explore tourists' intention of experiencing local cuisine. In their research, modified TRA model was examined if it could predict tourists' intention of experiencing local cuisine after past behavior was put into TRA model under a simulation context. The results revealed that modified TRA model could predict tourists' intention of experiencing local cuisine; moreover, attitude and past behavior also influenced tourists' behavioral intention. Furthermore, *Theory of Planned Behavior* (TPB) which was developed from *Theory of Reasoned Action* (TRA) could be applied to explore culinary tourists' behavioral intention (Ajzen & Driver, 1992). And, Maslow's hierarchy of needs was utilized to explore the needs and motivations of food tourism, five sectors were introduced (Tikkanen, 2007).

Additionally, by employing marketing physiology or consumer theory (Boyne et al., 2003; Boyne & Hall, 2004), it could facilitate to understand culinary tourists further. It proves that the application of theories of other principles can make much contribution to more deep exploration in culinary tourism.

#### **3. Review of the countries involved**

For the review of the countries which were involved in the researches, it included Hong Kong, Singapore, Japan, China, Thailand, Vietnam and Turkey in Asia. For Europe, United Kingdom, Croatia, France, Italy, Denmark, Sweden were included. Additionally, it also included Canada and the United States in North America and South Africa in Africa. It was found that the way of culinary tourism development of each area was significantly different as a result of its geography, climate, history and culture, and so on.

#### **3.1 Asia**

Unlike many other travel activities and attractions, destination's gastronomy was usually available year-round, any time of day and in any weather (Richards, 2002). Especially in Asia, some areas such as Hong Kong, Singapore, if gastronomy tourists can be shown to satisfy all the conventional requirements of a unique market segment, it becomes a viable alternative for new destinations that cannot benefit from "sun, sea and sand", or natural or cultural resources, or a valid addition to more established destinations. Here, the discussion will be focused on the three main areas: Hong Kong, Singapore and Japan.

#### **3.1.1 Hong Kong**

96 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

being developed with an emphasis on the tourism market, and in some cases had developed high-quality web sites. These web sites were less readily accessible to information-seeking consumers than they might otherwise be. It could be found that brochures and web-sites

For other researches, Tussyadiah (2005) reported that there were three main references used by travelers in Japan, beside travel brochures: travel magazines, television programs, and the internet. And, the media played a very strong role in the direction of Japanese culinary tourism. So, if the media could be well applied to the marketing of culinary tourism, it's very important to the promotion of culinary tourism. As it can be seen, to well apply each kind of marketing tools is very important to culinary tourism promotion of a destination.

Bourdieu (1984) operated with a model of four basic lifestyles in his work "*Distinction*". Hjalager (2004) proposed this model as sociology of tourism and gastronomy to be applied to tourism research in the future through empirical research; such as which lifestyle segment could be attracted by destinations. Based on this theory, it could infer its implication of tourism and gastronomy. Similarly, by utilizing the theory of social psychology, Ryu and Jang (2006) employed *Theory of Reasoned Action* (TRA) to explore tourists' intention of experiencing local cuisine. In their research, modified TRA model was examined if it could predict tourists' intention of experiencing local cuisine after past behavior was put into TRA model under a simulation context. The results revealed that modified TRA model could predict tourists' intention of experiencing local cuisine; moreover, attitude and past behavior also influenced tourists' behavioral intention. Furthermore, *Theory of Planned Behavior* (TPB) which was developed from *Theory of Reasoned Action* (TRA) could be applied to explore culinary tourists' behavioral intention (Ajzen & Driver, 1992). And, Maslow's hierarchy of needs was utilized to explore the needs and motivations of food tourism, five

Additionally, by employing marketing physiology or consumer theory (Boyne et al., 2003; Boyne & Hall, 2004), it could facilitate to understand culinary tourists further. It proves that the application of theories of other principles can make much contribution to more deep

For the review of the countries which were involved in the researches, it included Hong Kong, Singapore, Japan, China, Thailand, Vietnam and Turkey in Asia. For Europe, United Kingdom, Croatia, France, Italy, Denmark, Sweden were included. Additionally, it also included Canada and the United States in North America and South Africa in Africa. It was found that the way of culinary tourism development of each area was significantly different

Unlike many other travel activities and attractions, destination's gastronomy was usually available year-round, any time of day and in any weather (Richards, 2002). Especially in

as a result of its geography, climate, history and culture, and so on.

couldn't convey the characteristics of local cuisine efficiently.

**2.6 The application of theories in culinary tourism development** 

sectors were introduced (Tikkanen, 2007).

**3. Review of the countries involved** 

exploration in culinary tourism.

**3.1 Asia** 

Hong Kong's cuisine is renowned for its exotic fusion of Eastern and Western flavours along with a wide variety of culinary delights. Its cultural blend, proximity to mainland China and reputation for quality have made Hong Kong a Gourmet Paradise. It was indicated that Hong Kong's gastronomy was a significant factor that positively contributed to the respondents' desire to return to Hong Kong (Kivela & Crotts, 2005; 2009). Hong Kong's gastronomy plays a major contributing role in the creation of a high-quality travelling experience and return behavior. Namely, gastronomy is increasingly vital to a whole range of tourism products and services that are offered in Hong Kong (Kivela & Crotts, 2005, 2006).

#### **3.1.2 Singapore**

Singaporeans is a cosmopolitan and multicultural city and passionate about food and eating. It's not just East-meets-West when it comes to feasting in Singapore- it is a tasty tale about a country's unique cultural tapestry woven in with its distinct influences to capture the essence of Singapore's multicultural heritage. And, it uniquely distinguishes Singapore as a food capital of Asia.

Singapore Tourism Board established Food and Beverage Division for the development and marketing of culinary tourism. It takes charge of the market of Singapore cuisine, the development of product and industry, channel management and investment to form it as a destination with a "combining local cuisine, international cuisine, dining experience and nightlife entertainment". Furthermore, Singapore introduced ten "must try" dishes and expected to become the representatives of Singapore cuisine. Additionally, the quality of tourists' dining experience could be improved. Henderson (2004) identified some of the critical connections between food and tourism with specific reference to Singapore where food and eating out is a tourism promotion theme of growing prominence, and policies were shaped within the framework of the country's distinctive features. Singapore is moving towards becoming a higher order food destination (Hjalager, 2002); and, developing a distinctive form of food tourism adapted to the conditions which prevail there (Henderson, 2004).

#### **3.1.3 Japan**

Ashkenazi and Jacob (2000) argued that major factors affecting Japanese food culture were geography, history, climate, religion, and external influences. For Japan, in addition to the tradition of visiting *onsen* (hot springs), one of the major purposes of travel for leisure in Japan concerned the enjoyment of different cuisines. Such culinary tourism also involved the exploration and enjoyment of the variety found in food in relation to regional cultural variations in Japan. And, in Japan, culinary tourism had been a major factor in the development of some regions (Tussyadiah, 2005).

Recent Developments in Research and Future Directions of Culinary Tourism: A Review 99

production is a major economic activity, and the power of the agricultural and food processing industries has in many cases compromised the quality image. In Italy, on the other hand, food policies and traditions, which give a high priority to freshness, intrinsically

Croatia was also a country involved in Europe. The tourism organization of Croatia started to develop strategies and tourism rules and treated traditional cuisine as unique products for the tourists. The tourism marketing strategies from 2001 to 2005 introduced gastronomic heritage to be a multiple role in tourism. Fox (2007) provided an approach towards the reinvention of the gastronomic identity of Croatian tourist destinations, an identity which

For Africa, South Africa was the only one country involved in previous researches. Through a pilot study, du Rand et al. (2003) suggested how food tourism can be marketed successfully and the indicators for future development in South Africa. It revealed that the countries in

To be summed up, gastronomy has played an important role for tourism development in some Asian countries. Some Asian countries own rich gastronomy, it's not only a main

In recent culinary tourism researches, qualitative approach was utilized more frequently than quantitative approach. The methods included literature review, content analysis, indepth interview and semi-structural interview and field study. Literature review was mainly applied in exploring the relationship of food and tourism (Hashimoto & Telfer, 2006; Henderson, 2004; Meler & Cerovic, 2003; Quan & Wang, 2004), gastronomic identity of destinations, cultural elements or the types of culinary tourism (Fox, 2007; Hjalager & Corigliano, 2000; Tussyadiah, 2005). Content analysis was mainly applied in exploring marketing tools, such as the internet applied in culinary tourism promotion (Boyne et al., 2003; Boyne & Hall, 2004), content analysis of brochures (Frochot, 2003), gastronomy applied in marketing activities (Okumus et al., 2007), and government tourism websites

Additionally, Cohen and Avieli (2004) utilized observation, field study and interview to explore the attractions and impediments of food in tourism. Meanwhile, observation and interview were employed by Donovan and Debres (2006) to explore the attraction of barbecue in a festival ---Juneteenth. Tellstom et al. (2006) utilized semi-structured interviews to explore the branding of food products. Molz (2007) combined the analysis of web-sites with interviews to explore the implication of food for travelers. Kim, Eves, and Scarles (2009) employed grounded theory and in-depth interviews to examine the factors influencing consumption of local food and beverages in destinations. By applying qualitative interview, the contribution of the destination's gastronomy to the quality of the travelers' experiences was explored (Kivela & Crotts, 2009), the key challenges in wine and

allow consumers to stay in control of food to a much larger extent than in Denmark.

will be founded on local gastronomic heritage rather than international cuisine.

North America and Europe have stressed to treat food as one of tourism attractions.

attraction for tourism, but also becomes a main factor of development in some areas.

**3.3 Other areas** 

**4. Methodological review** 

**4.1 Qualitative research** 

(Horng & Tsai, 2010).

Besides, in Asia, Turkey was also a country involved in previous researches. Turkey made little reference to marketing strategy, even though its indigenous cuisine was unique and rich (Okumus, Okumus & McKercher, 2007). It's believed that some practical suggestions will be provided for the country with rich gastronomic heritage but not promoting local cuisine, like Turkey.

#### **3.2 North America and Europe**

#### **3.2.1 North America**

For the countries in North America, the countries explored were Canada and the United States. In Canada, Canadian tourism has an established image of "natural" attraction and outdoor activities and is known for its agri- and aquacultural products. More and more destination marketing organizations started to treat culinary tourism as part of the whole marketing strategies. Canadian Tourism Commission (CTC) had been aware that many tourists took food as part of travel experience (Ignatov & Smith, 2006). CTC (2002) has begun developing cuisine as a new tourism product showcasing Canadian diverse cultures and communities (Hashimoto & Telfer, 2006; Ignatov & Smith, 2006), even though it's challenging to compete against well-established gourmet destinations.

For the United States, Donovan and Debres (2006) focused on Juneteenth which originated in Texas as an African-American celebration of the end of slavery and argued that food, and barbecue in particular, was a major attraction of Juneteenth. And, it is proposed that Juneteenth also functions as a culinary tourist event, with barbecue being the major draw. Additionally, Stewart, Bramble and Ziraldo (2008) assist practitioners to continue the forward momentum of wine and culinary sectors in Niagara to present recommendations for future growth and continued success of wine and culinary tourism in the Niagara region.

#### **3.2.2 Europe**

In European countries, the image of France has always been related to food and wine. The images of food products, vineyards and restaurants have traditionally dominated national and regional marketing strategies. No matter in domestic or international markets, food has become a topic in tourism strategies in France. And, regional food and cuisine is extremely important and very diversified and has been a tool used by French regions to differentiate themselves on the global market place. However, most French regions use images of raw products, country products and market scenes to position themselves on the traditional/rural/authentic theme (Frochot, 2003). Additionally, the images of popular Michelin starred restaurants and chefs were seldom presented.

For other countries in Europe, the government departments in the United Kingdom have recognized the linkage between tourism and food, so too have the agencies responsible for the promotion of regional food-related economic sectors. In England and Wales, the government-supported Food From Britain (FFB) organization includes as part of its mission a remit to foster the development of Britain's specialty food and drink sector (Boyne et al., 2003). Further, Hjalager and Corigliano (2000) provided a comparison between Denmark and Italy and illustrated core elements in food cultures. Particularly in Denmark, food production is a major economic activity, and the power of the agricultural and food processing industries has in many cases compromised the quality image. In Italy, on the other hand, food policies and traditions, which give a high priority to freshness, intrinsically allow consumers to stay in control of food to a much larger extent than in Denmark.

Croatia was also a country involved in Europe. The tourism organization of Croatia started to develop strategies and tourism rules and treated traditional cuisine as unique products for the tourists. The tourism marketing strategies from 2001 to 2005 introduced gastronomic heritage to be a multiple role in tourism. Fox (2007) provided an approach towards the reinvention of the gastronomic identity of Croatian tourist destinations, an identity which will be founded on local gastronomic heritage rather than international cuisine.

#### **3.3 Other areas**

98 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Besides, in Asia, Turkey was also a country involved in previous researches. Turkey made little reference to marketing strategy, even though its indigenous cuisine was unique and rich (Okumus, Okumus & McKercher, 2007). It's believed that some practical suggestions will be provided for the country with rich gastronomic heritage but not promoting local

For the countries in North America, the countries explored were Canada and the United States. In Canada, Canadian tourism has an established image of "natural" attraction and outdoor activities and is known for its agri- and aquacultural products. More and more destination marketing organizations started to treat culinary tourism as part of the whole marketing strategies. Canadian Tourism Commission (CTC) had been aware that many tourists took food as part of travel experience (Ignatov & Smith, 2006). CTC (2002) has begun developing cuisine as a new tourism product showcasing Canadian diverse cultures and communities (Hashimoto & Telfer, 2006; Ignatov & Smith, 2006), even though it's

For the United States, Donovan and Debres (2006) focused on Juneteenth which originated in Texas as an African-American celebration of the end of slavery and argued that food, and barbecue in particular, was a major attraction of Juneteenth. And, it is proposed that Juneteenth also functions as a culinary tourist event, with barbecue being the major draw. Additionally, Stewart, Bramble and Ziraldo (2008) assist practitioners to continue the forward momentum of wine and culinary sectors in Niagara to present recommendations for future growth and continued success of wine and culinary tourism

In European countries, the image of France has always been related to food and wine. The images of food products, vineyards and restaurants have traditionally dominated national and regional marketing strategies. No matter in domestic or international markets, food has become a topic in tourism strategies in France. And, regional food and cuisine is extremely important and very diversified and has been a tool used by French regions to differentiate themselves on the global market place. However, most French regions use images of raw products, country products and market scenes to position themselves on the traditional/rural/authentic theme (Frochot, 2003). Additionally, the images of popular

For other countries in Europe, the government departments in the United Kingdom have recognized the linkage between tourism and food, so too have the agencies responsible for the promotion of regional food-related economic sectors. In England and Wales, the government-supported Food From Britain (FFB) organization includes as part of its mission a remit to foster the development of Britain's specialty food and drink sector (Boyne et al., 2003). Further, Hjalager and Corigliano (2000) provided a comparison between Denmark and Italy and illustrated core elements in food cultures. Particularly in Denmark, food

challenging to compete against well-established gourmet destinations.

Michelin starred restaurants and chefs were seldom presented.

cuisine, like Turkey.

**3.2.1 North America** 

in the Niagara region.

**3.2.2 Europe** 

**3.2 North America and Europe** 

For Africa, South Africa was the only one country involved in previous researches. Through a pilot study, du Rand et al. (2003) suggested how food tourism can be marketed successfully and the indicators for future development in South Africa. It revealed that the countries in North America and Europe have stressed to treat food as one of tourism attractions.

To be summed up, gastronomy has played an important role for tourism development in some Asian countries. Some Asian countries own rich gastronomy, it's not only a main attraction for tourism, but also becomes a main factor of development in some areas.

#### **4. Methodological review**

#### **4.1 Qualitative research**

In recent culinary tourism researches, qualitative approach was utilized more frequently than quantitative approach. The methods included literature review, content analysis, indepth interview and semi-structural interview and field study. Literature review was mainly applied in exploring the relationship of food and tourism (Hashimoto & Telfer, 2006; Henderson, 2004; Meler & Cerovic, 2003; Quan & Wang, 2004), gastronomic identity of destinations, cultural elements or the types of culinary tourism (Fox, 2007; Hjalager & Corigliano, 2000; Tussyadiah, 2005). Content analysis was mainly applied in exploring marketing tools, such as the internet applied in culinary tourism promotion (Boyne et al., 2003; Boyne & Hall, 2004), content analysis of brochures (Frochot, 2003), gastronomy applied in marketing activities (Okumus et al., 2007), and government tourism websites (Horng & Tsai, 2010).

Additionally, Cohen and Avieli (2004) utilized observation, field study and interview to explore the attractions and impediments of food in tourism. Meanwhile, observation and interview were employed by Donovan and Debres (2006) to explore the attraction of barbecue in a festival ---Juneteenth. Tellstom et al. (2006) utilized semi-structured interviews to explore the branding of food products. Molz (2007) combined the analysis of web-sites with interviews to explore the implication of food for travelers. Kim, Eves, and Scarles (2009) employed grounded theory and in-depth interviews to examine the factors influencing consumption of local food and beverages in destinations. By applying qualitative interview, the contribution of the destination's gastronomy to the quality of the travelers' experiences was explored (Kivela & Crotts, 2009), the key challenges in wine and

Recent Developments in Research and Future Directions of Culinary Tourism: A Review 101

This perspective conformed to the concept of *supporting consumer experiences* and *peak touristic experiences* proposed by Quan and Wang (2004). The process of making gastronomy be *peak touristic experiences* from *supporting consumer experiences* can have the relationship with destinations become *complementary or inventory* from *disconnected or superficial*. However, perhaps it can start from viewing gastronomic resources itself while exploring the relationship of food and image of a destination. Ignatov and Smith (2006) classified tourism

into four types: facilities, activities, events and organizations (please refer to table 1).

Dining at restaurants Picnics utilizing locally-grown produce Purchasing retail food

and beverages Pick-your own operations Touring Wine regions Agricultural regions City food districts Education/Observation

Cooking schools Wine tasting / education Visiting wineries Observing chef competitions

Reading food, beverage magazines and books

Table 1. General typology of culinary tourism resources

*complementary or inventory*. It's the same as France and Japan.

Note. From "Segmenting Canadian culinary tourists," by E. Ignatov & S. Smith, 2006, *Current Issues in* 

Through the reviewing of countries which promote culinary tourism, as for Asia, activities and events occupied more percentage because dining at restaurants and food festivals are the main attraction in Hong Kong and Singapore. Food has become a focus of media and activities; with the image of destinations, it has formed a relationship of *complementary and inventory*. It's also *peak touristic experiences*. Hence, if gastronomy would like to become main attraction of a destination, it has to make its resource and image become the relationship of

little to connect local cultures and images with the act of eating.

Consumption

Buildings/ Structures Food processing

 Farmers' markets Food Stores Food-related museums Restaurants Land uses Farms Orchards Vineyards Urban restaurant districts

 Wineries Breweries

Routes

 Wine routes Food routes Gourmet trails

*Tourism*, *9* (3), 240.

All over the world, hamburgers and pizzas could be consumed under the same brands. The products and the eating styles were globalized. The emerging fast-food sector did

Facilities Activities Events Organizations

Consumer shows Food and wine shows Cooking equipment, kitchen shows Product launches Restaurant classification / certification systems (e.g. Michelin, Taste of Nova Scotia) Food / wine classification systems (e.g. VQA) Associations (e.g. Cuisine Canada, Slow

Food)

Festivals

 Food festivals Wine festivals Harvest festivals

culinary tourism with practical recommendations were addressed (Stewart, Bramble, & Ziraldo, 2008), the role of food tourism in developing and sustaining regional identities was examined (Everett & Aitchison, 2008). And, on-site participant observation and focus group interviews were conducted to identify the attributes that influence the evaluation of travel dining experience (Chang, Kivela, & Mak, 2011).

#### **4.2 Survey research**

For quantitative researches, most were questionnaire survey. It was focused on tourists' dining experience and perception in destinations. It was expected to understand the role of gastronomy from tourists' perspective (Kivela & Crotts, 2005, 2006; Tse & Crotts, 2005). Ignatov and Smith (2006) utilized telephone surveys and in-depth mail survey to explore culinary tourists' market segmentation. A factor-cluster approach was utilized to segment culinary event attendees into two groups to make contribution to the area of consumer behavior research in culinary tourism (Smith & Costello, 2009). By applying empirical data consisting both of the secondary data and an interview, Tikkanen (2007) explored the sectors of food tourism by using Maslow's hierarchy of needs in the classification.

Additionally, Ryu and Jang (2006) added past behavior into the model of Theory of Reasoned Action (TRA). It tried to examine modified TRA to predict tourists' behavioral intention of experiencing local cuisine and was expected to understand the influential factors.

#### **5. Significant trends and comments**

To synthesize the above, in this research, the following discussion will be proceeded as the issues of *topical review*. Further, to be combined with the review of countries involved, the trends and comments of culinary tourism will be proposed.

#### **5.1 The relationship of food and tourism**

For the relationship of food and tourism, firstly, Hjalager and Corigliano (2000) suggested that food was related to the image of tourist destinations in the following ways.

1. Complementary

The inclusion of food in tourist marketing and management seemed to have increased considerably over the past few decades. Food is used as appealing eye-catchers in brochures, videos and television programs.

2. Inventory

Much of the creation of new tourist products and experiences was based on the heritage resource, for example the opening of historic food factories and visitor centers. Food became the focal point of festivals and special events that attract tourists as well as local residents (Getz, 1991).

3. Superficial

Travelling and local products means sharing the local culture. Tourism was synonymous with amusement and entertainment, but it was also a cultural act, a cognitive and participatory moment related to the environmental context concerned.

4. Disconnected

culinary tourism with practical recommendations were addressed (Stewart, Bramble, & Ziraldo, 2008), the role of food tourism in developing and sustaining regional identities was examined (Everett & Aitchison, 2008). And, on-site participant observation and focus group interviews were conducted to identify the attributes that influence the evaluation of travel

For quantitative researches, most were questionnaire survey. It was focused on tourists' dining experience and perception in destinations. It was expected to understand the role of gastronomy from tourists' perspective (Kivela & Crotts, 2005, 2006; Tse & Crotts, 2005). Ignatov and Smith (2006) utilized telephone surveys and in-depth mail survey to explore culinary tourists' market segmentation. A factor-cluster approach was utilized to segment culinary event attendees into two groups to make contribution to the area of consumer behavior research in culinary tourism (Smith & Costello, 2009). By applying empirical data consisting both of the secondary data and an interview, Tikkanen (2007) explored the sectors

Additionally, Ryu and Jang (2006) added past behavior into the model of Theory of Reasoned Action (TRA). It tried to examine modified TRA to predict tourists' behavioral intention of experiencing local cuisine and was expected to understand the influential

To synthesize the above, in this research, the following discussion will be proceeded as the issues of *topical review*. Further, to be combined with the review of countries involved, the

For the relationship of food and tourism, firstly, Hjalager and Corigliano (2000) suggested

The inclusion of food in tourist marketing and management seemed to have increased considerably over the past few decades. Food is used as appealing eye-catchers in

Much of the creation of new tourist products and experiences was based on the heritage resource, for example the opening of historic food factories and visitor centers. Food became the focal point of festivals and special events that attract tourists as well as local

Travelling and local products means sharing the local culture. Tourism was synonymous with amusement and entertainment, but it was also a cultural act, a cognitive and participatory moment related to the environmental context concerned.

that food was related to the image of tourist destinations in the following ways.

of food tourism by using Maslow's hierarchy of needs in the classification.

dining experience (Chang, Kivela, & Mak, 2011).

**5. Significant trends and comments** 

**5.1 The relationship of food and tourism** 

brochures, videos and television programs.

1. Complementary

residents (Getz, 1991).

2. Inventory

3. Superficial

4. Disconnected

trends and comments of culinary tourism will be proposed.

**4.2 Survey research** 

factors.

All over the world, hamburgers and pizzas could be consumed under the same brands. The products and the eating styles were globalized. The emerging fast-food sector did little to connect local cultures and images with the act of eating.

This perspective conformed to the concept of *supporting consumer experiences* and *peak touristic experiences* proposed by Quan and Wang (2004). The process of making gastronomy be *peak touristic experiences* from *supporting consumer experiences* can have the relationship with destinations become *complementary or inventory* from *disconnected or superficial*. However, perhaps it can start from viewing gastronomic resources itself while exploring the relationship of food and image of a destination. Ignatov and Smith (2006) classified tourism into four types: facilities, activities, events and organizations (please refer to table 1).


Note. From "Segmenting Canadian culinary tourists," by E. Ignatov & S. Smith, 2006, *Current Issues in Tourism*, *9* (3), 240.

Table 1. General typology of culinary tourism resources

Through the reviewing of countries which promote culinary tourism, as for Asia, activities and events occupied more percentage because dining at restaurants and food festivals are the main attraction in Hong Kong and Singapore. Food has become a focus of media and activities; with the image of destinations, it has formed a relationship of *complementary and inventory*. It's also *peak touristic experiences*. Hence, if gastronomy would like to become main attraction of a destination, it has to make its resource and image become the relationship of *complementary or inventory*. It's the same as France and Japan.

Recent Developments in Research and Future Directions of Culinary Tourism: A Review 103

tourists, they could experience local culture through food and get better experience. It will facilitate the gastronomy providers to promote the quality of product and service. For travel

From the relationship of gastronomy and tourism, we understand that we can examine gastronomic resources and types of a destination if we'd like to develop culinary tourism. Moreover, it's important to analyze what benefits or disadvantages it can bring out for the

It could be found that most countries tended to promote the attraction of food in tourism and treat it as an important resource. As what Henderson (2006) argued, enjoyment of and experimentation with food is seen to be a motive underlying much tourist decision making and its marketing and development is considered a route towards attaining a commercial

However, Cohen and Avieli (2004) argued that overemphasizing the attraction of food and ignoring its impediments for developing areas in past literatures. Except for hygiene, communication and limited knowledge of local cuisine, in order to make tourists accept local cuisine more easily, the transformation of local cuisine has become a more important issue. Focused on this issue, the previous researches concerned on authenticity, commercialization of local cuisine, and proposed the missing of traditional cuisine authenticity due to conforming to tourists' dining habits and flavors (Henderson, 2006; du

Cohen and Avieli (2004) argued that for a local cuisine to become a popular attraction in its own right, it has to be filtered through tourism-oriented culinary establishments; only after they are in some ways, and to some degree, transformed. However, the manner of their transformation can not be simply represented on some unidirectional and unidimensional scale. Local foods are transformed on different dimensions and in various ways to suit tourists, and foreign dishes are introduced by tourism into the local cuisine and transformed to suit local tastes. Some may undergo a degree of transformation in order to make the food more acceptable to the tourists without impairing its authenticity. The tourists may be indifferent to other aspects of the product. Not all aspects of the local cuisine are equally relevant to the "authenticity" of the food offered by a tourism-oriented establishment, such as to substitute some ingredients more acceptable to tourists, and, to use modern technologies instead of traditional cooking methods to improve the sanitary conditions. However, for example, the Peking duck of Quan Ju De which is very popular was cooked by electric oven instead of traditional oven. It encountered most consumers' opposition because they couldn't experience the traditional cooking way. On the other side, it could be a

transformation to improve the hygiene condition and product standardization.

commercialization, these issues need to be more concerned.

So, in the developing process of culinary tourism, the authenticity and commercialization of local cuisine still need more exploration. The way of transformation is multidirectional and multidimensional (Cohen & Avieli, 2004). Therefore, what's the direction of transformation, how to be transformed, the level of transformation and its relationship with authenticity and

industries, surely they could benefit from business development and opportunities.

destination; thus, it can develop the suitable types for the destination.

competitive advantage while stimulating rural and urban economies.

Rand et al., 2003).

**5.2 The attraction and impediment of cuisine to the tourists** 

However, if we reviewed the countries which gastronomy hasn't been the main attraction, such as Canada, Croatia and South Africa, the relationship of gastronomy and destination image is still *supporting experiences*. It's also *disconnected or superficial*. But it was found from researches that the government, like Canadian Tourism Commission (CTC), it has begun to create the types of culinary tourism, such as food festival or wine festival. It was expected to gradually change the image and the relationship with gastronomy. From the research in Croatia, South Africa, it was found that the suggestion and strategy of developing gastronomy to be an attraction of tourism had been proposed (Fox, 2007; du Rand et al., 2003). It transformed food consumption to be *peak touristic experience* to promote the relationship of food and destination image.

The reason why some countries placed importance on food as an attraction of tourism could be explored from the benefits brought by key stakeholders--- the tourists, gastronomy providers, residents and community, and travel industry sector (please refer to table 2). For


Note. From "Tourism and gastronomy: gastronomy's influence on how tourists experience a destination," by J. Kivela & J. C. Crotts, 2006, *Journal of Hospitality & Tourism Research*, *30* (3), 375.

Table 2. The benefits of gastronomy tourism

tourists, they could experience local culture through food and get better experience. It will facilitate the gastronomy providers to promote the quality of product and service. For travel industries, surely they could benefit from business development and opportunities.

From the relationship of gastronomy and tourism, we understand that we can examine gastronomic resources and types of a destination if we'd like to develop culinary tourism. Moreover, it's important to analyze what benefits or disadvantages it can bring out for the destination; thus, it can develop the suitable types for the destination.

#### **5.2 The attraction and impediment of cuisine to the tourists**

102 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

However, if we reviewed the countries which gastronomy hasn't been the main attraction, such as Canada, Croatia and South Africa, the relationship of gastronomy and destination image is still *supporting experiences*. It's also *disconnected or superficial*. But it was found from researches that the government, like Canadian Tourism Commission (CTC), it has begun to create the types of culinary tourism, such as food festival or wine festival. It was expected to gradually change the image and the relationship with gastronomy. From the research in Croatia, South Africa, it was found that the suggestion and strategy of developing gastronomy to be an attraction of tourism had been proposed (Fox, 2007; du Rand et al., 2003). It transformed food consumption to be *peak touristic experience* to promote the

The reason why some countries placed importance on food as an attraction of tourism could be explored from the benefits brought by key stakeholders--- the tourists, gastronomy providers, residents and community, and travel industry sector (please refer to table 2). For

> Enjoyable, unique, and high-quality food and services Better participation in indigenous culture through food Opportunity to purchase and sample unique products (e.g., Chinese foods such as teas) that are not readily available in their

Unique opportunities for discovering new taste sensations Access to well-coordinated gastronomy-related experiences

Helps to crystallize the idea that Hong Kong is a premier

Helps raise the quality of business products and services Capitalizes on future dining-out/gastronomy trends

Promotes cross-cultural awareness and understanding

Promotes new business ideas and opportunities vis-à-vis

Takes advantages of regional gastronomy tourist travel Explores new gastronomy tourist markets beyond the region Offers an alternatives selling point for convention and meeting

Provides cooperative marketing and cross-marketing

Provides potential to increase sales, leading to better returns

opportunities, offering more potential impact than businesses can

Provides potential for new and additional business opportunities

Helps local residents to see and understand the economic impact

Offers additional support for the DMO from the new gastronomy-

relationship of food and destination image.

**tourists** 

**gastronomy providers** 

**residents and community** 

**travel industry** 

**sector** 

key stakeholders benefits

own country

afford individually

of tourism

business

Table 2. The benefits of gastronomy tourism

related partners

gastronomy destination as well

Creates new jobs in rural areas

gastronomy-related support services

Note. From "Tourism and gastronomy: gastronomy's influence on how tourists experience a destination," by J. Kivela & J. C. Crotts, 2006, *Journal of Hospitality & Tourism Research*, *30* (3), 375. It could be found that most countries tended to promote the attraction of food in tourism and treat it as an important resource. As what Henderson (2006) argued, enjoyment of and experimentation with food is seen to be a motive underlying much tourist decision making and its marketing and development is considered a route towards attaining a commercial competitive advantage while stimulating rural and urban economies.

However, Cohen and Avieli (2004) argued that overemphasizing the attraction of food and ignoring its impediments for developing areas in past literatures. Except for hygiene, communication and limited knowledge of local cuisine, in order to make tourists accept local cuisine more easily, the transformation of local cuisine has become a more important issue. Focused on this issue, the previous researches concerned on authenticity, commercialization of local cuisine, and proposed the missing of traditional cuisine authenticity due to conforming to tourists' dining habits and flavors (Henderson, 2006; du Rand et al., 2003).

Cohen and Avieli (2004) argued that for a local cuisine to become a popular attraction in its own right, it has to be filtered through tourism-oriented culinary establishments; only after they are in some ways, and to some degree, transformed. However, the manner of their transformation can not be simply represented on some unidirectional and unidimensional scale. Local foods are transformed on different dimensions and in various ways to suit tourists, and foreign dishes are introduced by tourism into the local cuisine and transformed to suit local tastes. Some may undergo a degree of transformation in order to make the food more acceptable to the tourists without impairing its authenticity. The tourists may be indifferent to other aspects of the product. Not all aspects of the local cuisine are equally relevant to the "authenticity" of the food offered by a tourism-oriented establishment, such as to substitute some ingredients more acceptable to tourists, and, to use modern technologies instead of traditional cooking methods to improve the sanitary conditions. However, for example, the Peking duck of Quan Ju De which is very popular was cooked by electric oven instead of traditional oven. It encountered most consumers' opposition because they couldn't experience the traditional cooking way. On the other side, it could be a transformation to improve the hygiene condition and product standardization.

So, in the developing process of culinary tourism, the authenticity and commercialization of local cuisine still need more exploration. The way of transformation is multidirectional and multidimensional (Cohen & Avieli, 2004). Therefore, what's the direction of transformation, how to be transformed, the level of transformation and its relationship with authenticity and commercialization, these issues need to be more concerned.

Recent Developments in Research and Future Directions of Culinary Tourism: A Review 105

Public / private planning for the restaurant sector in new urban / resort developments

Certification and branding of food providers and restaurants, based on various criteria

By utilizing gastronomy tourism development order, it'll facilitate in drafting the strategy.

The application of internet and brochure was proposed by many researches. For the application of internet, some countries and areas devoted themselves on the operation of tourism information web-sites. These web-sites also provided relevant information for the consumers who are leaving for the destination. Even so, it was found that initiatives are often not suitably represented on the web sites of their respectively official local tourist boards. These web sites can either lack the appropriate hyperlinks, or have these "buried" deep within their site where they may not be discovered (Boyne et al., 2003). As it shows, how to apply brochures and internet to create a local cuisine and make it a pull factor for a

Additionally, Tussyadiah (2005) argued that the media play a very strong role in the direction of Japanese culinary tourism. Travelers refer to the media listings when choosing destinations and food. And, the promotional campaigns of many gourmet spots and travel packages in the media reflect the fact that regional variations in cuisine strongly affect the direction of domestic tourism in Japan. There are many food-related programs shown on television, as well as dining and food trip guides on the internet and in travel magazines. Hence, to understand the application and influence of the media is very important to the

Owing to culinary tourism is multidimensional, the application of theories will be helpful to clarify each dimension of culinary tourism; such as the theories of consumer behavior.

Second-order gastronomy tourism development: the horizontal

Third-order gastronomy tourism development: the vertical

Fourth-order gastronomy tourism development: the diagonal

Training fr gastronomy, food science and tourism professionals

Hence, it's beneficial to the sustainable development of culinary tourism.

particular location will be an issue needed to be explored in the future.

**5.6 The application of theories in culinary tourism development** 

Third-order restructuring of the gastronomic food experience

Reinventing, modernizing and commodifying historical food traditions

Implementing and marketing quality standards

Establishing and marketing routes

Research and development (R&D)

 Creating events based on food and tourism Cooking classes and cooking holidays

**5.5 Exploration of promotion and marketing tools** 

and values

Media centres

Demonstration projects

development of culinary tourism.

#### **5.3 Market segment of culinary tourists**

Regarding the segmentation of culinary tourists, firstly, it can be explored from the types of culinary tourists. Hjalager (2004) proposed the model of culinary tourism experiences to predict tourists' attitude and preference from gastronomy-tourism lifestyle. It can be classified into four types of culinary tourists to be recreational, existential, diversionary and experimental. Among them, existential and experimental tourists of rich gastronomy knowledge are the groups with highest possibility to revisit the same destination. The reason is that the destination with unique gastronomy can satisfy their gastronomic experiences.

However, in the recent researches, this classification didn't combine with other segmentation, such as culture, the length of staying, age and revisiting (Tse & Crotts, 2005). Regarding culinary tourist segmentation, Ignatov and Smith (2006) proposed market segments based on three categories of culinary activities: food tourists, wine tourists, and food and wine tourists. If this classification could be combined with other segmentation and proceed further exploration, it's believed that there will be more understanding on culinary tourist segmentation including gastronomic experience seeking, communication method utilized, and product development strategy, and so on.

#### **5.4 The draft of culinary tourism developing strategies**

Creating a local cuisine and making it a pull factor for a particular location can be one effective strategy for tourism development (Tussyadiah, 2005). Regarding the draft of culinary tourism development strategy, the importance of government or destination marketing organization (DMO) has been proposed by many researches (Hjalager & Corigliano, 2000; du Rand et al., 2003; Kivela & Crotts, 2005, 2006; Hashimoto & Telfer, 2006; Henderson, 2006). It contains supporting for culinary tourism development strategy, figuring out beneficial elements and uniqueness of developing culinary tourism and relevant regulations, and so on. However, it's not enough to simply offer a gastronomy experience; gastronomy tourism is also making tourists feel good as a result of their visit to a destination. In order to make tourists feel good about being in a destination, it requires an effort on the part of the destination's DMO and gastronomy providers to educate tourists about why the local cuisine and its associated culture are unique to the destination (Kivela & Crotts, 2006). The first priority is to examine its conditions of developing culinary tourism including verifying its own resources, listing gastronomy assets and analyzing its advantages and disadvantages.

For those countries involved in recent researches, culinary tourism development of each area is belonged to different type and relationship. However, no matter which type or relationship, the gastronomy tourism initiatives proposed by Hjalager (2002) could be utilized to examine the developing period.

First-order gastronomy tourism development: the indigenous


Public / private planning for the restaurant sector in new urban / resort developments

Second-order gastronomy tourism development: the horizontal


Third-order gastronomy tourism development: the vertical


Fourth-order gastronomy tourism development: the diagonal


104 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Regarding the segmentation of culinary tourists, firstly, it can be explored from the types of culinary tourists. Hjalager (2004) proposed the model of culinary tourism experiences to predict tourists' attitude and preference from gastronomy-tourism lifestyle. It can be classified into four types of culinary tourists to be recreational, existential, diversionary and experimental. Among them, existential and experimental tourists of rich gastronomy knowledge are the groups with highest possibility to revisit the same destination. The reason is that the destination with unique gastronomy can satisfy their gastronomic

However, in the recent researches, this classification didn't combine with other segmentation, such as culture, the length of staying, age and revisiting (Tse & Crotts, 2005). Regarding culinary tourist segmentation, Ignatov and Smith (2006) proposed market segments based on three categories of culinary activities: food tourists, wine tourists, and food and wine tourists. If this classification could be combined with other segmentation and proceed further exploration, it's believed that there will be more understanding on culinary tourist segmentation including gastronomic experience seeking, communication method

Creating a local cuisine and making it a pull factor for a particular location can be one effective strategy for tourism development (Tussyadiah, 2005). Regarding the draft of culinary tourism development strategy, the importance of government or destination marketing organization (DMO) has been proposed by many researches (Hjalager & Corigliano, 2000; du Rand et al., 2003; Kivela & Crotts, 2005, 2006; Hashimoto & Telfer, 2006; Henderson, 2006). It contains supporting for culinary tourism development strategy, figuring out beneficial elements and uniqueness of developing culinary tourism and relevant regulations, and so on. However, it's not enough to simply offer a gastronomy experience; gastronomy tourism is also making tourists feel good as a result of their visit to a destination. In order to make tourists feel good about being in a destination, it requires an effort on the part of the destination's DMO and gastronomy providers to educate tourists about why the local cuisine and its associated culture are unique to the destination (Kivela & Crotts, 2006). The first priority is to examine its conditions of developing culinary tourism including verifying its own resources, listing gastronomy assets and analyzing its

For those countries involved in recent researches, culinary tourism development of each area is belonged to different type and relationship. However, no matter which type or relationship, the gastronomy tourism initiatives proposed by Hjalager (2002) could be

Including gastronomic aspects in promotional materials of the region / country

**5.3 Market segment of culinary tourists** 

utilized, and product development strategy, and so on.

advantages and disadvantages.

utilized to examine the developing period.

First-order gastronomy tourism development: the indigenous

 Campaigns for particular products, connected to a region or season Introducing food trade marks with regional features / names, etc Creating tourism appeal for existing food fairs and events

**5.4 The draft of culinary tourism developing strategies** 

experiences.

Demonstration projects

By utilizing gastronomy tourism development order, it'll facilitate in drafting the strategy. Hence, it's beneficial to the sustainable development of culinary tourism.

#### **5.5 Exploration of promotion and marketing tools**

The application of internet and brochure was proposed by many researches. For the application of internet, some countries and areas devoted themselves on the operation of tourism information web-sites. These web-sites also provided relevant information for the consumers who are leaving for the destination. Even so, it was found that initiatives are often not suitably represented on the web sites of their respectively official local tourist boards. These web sites can either lack the appropriate hyperlinks, or have these "buried" deep within their site where they may not be discovered (Boyne et al., 2003). As it shows, how to apply brochures and internet to create a local cuisine and make it a pull factor for a particular location will be an issue needed to be explored in the future.

Additionally, Tussyadiah (2005) argued that the media play a very strong role in the direction of Japanese culinary tourism. Travelers refer to the media listings when choosing destinations and food. And, the promotional campaigns of many gourmet spots and travel packages in the media reflect the fact that regional variations in cuisine strongly affect the direction of domestic tourism in Japan. There are many food-related programs shown on television, as well as dining and food trip guides on the internet and in travel magazines. Hence, to understand the application and influence of the media is very important to the development of culinary tourism.

#### **5.6 The application of theories in culinary tourism development**

Owing to culinary tourism is multidimensional, the application of theories will be helpful to clarify each dimension of culinary tourism; such as the theories of consumer behavior.

Recent Developments in Research and Future Directions of Culinary Tourism: A Review 107

resources of each destination with the types of culinary tourism is the crucial factors of successful strategies. Furthermore, utilizing marketing tools efficiently to form the image of culinary tourism for destinations, like brochure, internet and media, can convey the information. Meanwhile, the information of infusing culture and reducing impediments of experiencing local cuisine is very important to the draft of marketing strategy. Here, after reviewing recent researches, some explorations which were insufficient in recent

1. Regarding the linkage of culinary tourism types and market segmentation, it's short of

2. Culture seemed to be seldom involved in the researches; but, it's an element closely

**\*** *Meibutsu* is a Japanese term for famous products associated with particular regions. *Meibutsu* are usually items of **Japanese regional cuisine**, although the category includes local **handicrafts**. *Meibutsu* typically have a **traditional** character, although contemporary products may qualify as *meibutsu* if they are distinctive and popular. They are often purchased as omiyage (**souvenirs**) to be given as gifts.

The reason is that culinary tourism is quite different from the simple consumption of food and drink during a tourism experience. This term refers to the experience that regionally produced food and drink can provide when they are used to tell a story or to convey some aspect of the culture of the region being visited. Culinary tourism implies transference of knowledge or information about the people, culture, traditions and identity of the place visited. It conveys something that is indigenous, perhaps even unique, to a specific destination (Ignatov & Smith, 2006). Like Japan, what attracts people to search for food in a particular place can be that of the attraction of the food itself: ingredients, presentations, healthiness, freshness and the association of the food with a place of culture. In Japan, there are two factors that have a strong role in determining the culinary tourism pattern: the *meibutsu*\* culture and the seasonal variations (Tussyadiah, 2005). As for Canada, Canada started to join international activities and adopted indigenous or local ingredients to develop local cuisine to showcase its diverse cultures. Moreover, it attracted tourists by food festivals or events, and culinary tourism package through the arrangement of travel agencies (Ignatov & Smith, 2006). To focus on Japan and Canada, both of them display totally different characteristics in dietary culture, and present distinct attraction for culinary tourists. This attraction formed by cultural elements need further exploration and expect to be combined with marketing strategy. Namely, to explore how to utilize brochure, internet and media and infuse cultural elements into these tools is with crucial influence on

Regarding what type of culinary tourism could attract which segment of consumers, it's an issue needed to be clarified. For example, there's much difference between Hong Kong and Canada in the culinary tourism types. In Hong Kong, it emphasized diversified cuisines, restaurants, coffee shops and chefs; whereas, in Canada, it stressed seafood and fresh produce. For the differentiation of the tourists, it's worth of being explored further. Additionally, the practical suggestions of application, design and conveying method of marketing tools for different types are not proposed yet. It's an

researches will be suggested in the followings:

deep exploration in recent researches.

important implication for future research.

culinary tourism promotion in the future.

connected with culinary tourism.

Boyne et al. (2003) proposed a four-fold taxonomy describing types of consumers according to the level of importance of food and gastronomy in their destination decisionmaking processes.


For the types of culinary tourists, some researchers utilized sociology to do further exploration; such as the lifestyle by Bourdieu (1984) --- recreational, existential, diversionary and experimental (Hjalager, 2004). If Bourdieu's (1984) lifestyle could be combined with the four types of culinary tourists by Boyne et al. (2003), it's believed that it will make much contribution to the classification and understanding of culinary tourists.

For the application social psychology, Theory of Reasoned Action (TRA) is to predict an individual's attitude and behavioral intention (Ajzen &Fishbein, 1980). Ryu and Jang (2006) employed TRA to further understand culinary tourists' behavior model, and added variables to modify the model. It can help understanding culinary tourists' behaviors.

Additionally, tourists differ characteristically in their concepts of value for money. In their cognitions of satisfaction, and in their evaluation frameworks, including in all cases in relation to food and dining (Nield, Kozak & LeGrys, 2000). Therefore, the theories of customer satisfaction, service quality or consuming perception will be applied in exploring tourists' consuming perception in restaurants.

#### **6. Summary and general directions for future research**

Through reviewing recent researches of culinary tourism, it can be found that some suggestions had been proposed. However, it revealed that some perspectives needed more deep explorations to be clarified in future researches. Additionally, it showed that some dimensions were not involved in previous researches. In this research, the trend and direction will be explicitly proposed to be referred for future research.

The development of culinary tourism really played an important role for a country or a region. In the developing process, realizing the relationship of gastronomy and a destination and the classification of culinary tourism are the first priority. Some destinations own unique gastronomy, popular restaurants, coffee shops or creative chefs; some areas own characteristic seafood and fresh produce. So, linking the gastronomic

Boyne et al. (2003) proposed a four-fold taxonomy describing types of consumers according to the level of importance of food and gastronomy in their destination decision-

1. Type I consumers: Gastronomy is an important element of their holiday experience and they actively seek information relating to an area's gastronomic heritage and/or the

2. Type II consumers: Gastronomy is also important; however, they require exposure to the food-related tourism information as a precedent to acting upon this-that is, Type II consumers would not actively seek gastronomy-related information in a tourism

3. Type III consumers: Consumers do not attach importance to gastronomy as part of the holiday experience but may do so in the future if they have an enjoyable gastronomic

4. Type IV consumers: Consumers have no interest in gastronomy and will continue to have no interest in gastronomy regardless of the quality or ubiquitousness of

For the types of culinary tourists, some researchers utilized sociology to do further exploration; such as the lifestyle by Bourdieu (1984) --- recreational, existential, diversionary and experimental (Hjalager, 2004). If Bourdieu's (1984) lifestyle could be combined with the four types of culinary tourists by Boyne et al. (2003), it's believed that it will make much

For the application social psychology, Theory of Reasoned Action (TRA) is to predict an individual's attitude and behavioral intention (Ajzen &Fishbein, 1980). Ryu and Jang (2006) employed TRA to further understand culinary tourists' behavior model, and added variables to modify the model. It can help understanding culinary tourists' behaviors.

Additionally, tourists differ characteristically in their concepts of value for money. In their cognitions of satisfaction, and in their evaluation frameworks, including in all cases in relation to food and dining (Nield, Kozak & LeGrys, 2000). Therefore, the theories of customer satisfaction, service quality or consuming perception will be applied in exploring

Through reviewing recent researches of culinary tourism, it can be found that some suggestions had been proposed. However, it revealed that some perspectives needed more deep explorations to be clarified in future researches. Additionally, it showed that some dimensions were not involved in previous researches. In this research, the trend and

The development of culinary tourism really played an important role for a country or a region. In the developing process, realizing the relationship of gastronomy and a destination and the classification of culinary tourism are the first priority. Some destinations own unique gastronomy, popular restaurants, coffee shops or creative chefs; some areas own characteristic seafood and fresh produce. So, linking the gastronomic

nature of the supply of locally-produced or quality food in the area.

contribution to the classification and understanding of culinary tourists.

making processes.

experience.

context but welcome it.

gastronomy-tourism promotional material.

tourists' consuming perception in restaurants.

**6. Summary and general directions for future research** 

direction will be explicitly proposed to be referred for future research.

resources of each destination with the types of culinary tourism is the crucial factors of successful strategies. Furthermore, utilizing marketing tools efficiently to form the image of culinary tourism for destinations, like brochure, internet and media, can convey the information. Meanwhile, the information of infusing culture and reducing impediments of experiencing local cuisine is very important to the draft of marketing strategy. Here, after reviewing recent researches, some explorations which were insufficient in recent researches will be suggested in the followings:


The reason is that culinary tourism is quite different from the simple consumption of food and drink during a tourism experience. This term refers to the experience that regionally produced food and drink can provide when they are used to tell a story or to convey some aspect of the culture of the region being visited. Culinary tourism implies transference of knowledge or information about the people, culture, traditions and identity of the place visited. It conveys something that is indigenous, perhaps even unique, to a specific destination (Ignatov & Smith, 2006). Like Japan, what attracts people to search for food in a particular place can be that of the attraction of the food itself: ingredients, presentations, healthiness, freshness and the association of the food with a place of culture. In Japan, there are two factors that have a strong role in determining the culinary tourism pattern: the *meibutsu*\* culture and the seasonal variations (Tussyadiah, 2005). As for Canada, Canada started to join international activities and adopted indigenous or local ingredients to develop local cuisine to showcase its diverse cultures. Moreover, it attracted tourists by food festivals or events, and culinary tourism package through the arrangement of travel agencies (Ignatov & Smith, 2006). To focus on Japan and Canada, both of them display totally different characteristics in dietary culture, and present distinct attraction for culinary tourists. This attraction formed by cultural elements need further exploration and expect to be combined with marketing strategy. Namely, to explore how to utilize brochure, internet and media and infuse cultural elements into these tools is with crucial influence on culinary tourism promotion in the future.

**<sup>\*</sup>** *Meibutsu* is a Japanese term for famous products associated with particular regions. *Meibutsu* are usually items of **Japanese regional cuisine**, although the category includes local **handicrafts**. *Meibutsu* typically have a **traditional** character, although contemporary products may qualify as *meibutsu* if they are distinctive and popular. They are often purchased as omiyage (**souvenirs**) to be given as gifts.

Recent Developments in Research and Future Directions of Culinary Tourism: A Review 109

Furthermore, some solid theories of other fields such as Social Psychology can be applied to explore culinary tourists' behavioral model. It'll make much contribution to future research. Nowadays, the countries which pay much attention to culinary tourism are increasing gradually. Nevertheless, there are still some unclear questions and under-explored issues. For this specific type of tourism, it will need more efforts to be devoted to and more

Ajzen, I., & Fishbein, M. (1980). Understanding attitudes and predicting social behavior.

Ajzen, I., & Driver, B. L. (1992). Application of the theory of planned behavior to leisure

Ashkenazi, M., & Jacob, J. (2000). *The essence of Japanese cuisine: An essay of food and culture*.

Baloglu, S. (2000). A path-analytical model of visitation intention involving information

Bessiere, J. (1998). Local development and heritage: Traditional food and cuisine as tourist

Bourdieu, P. (1984). *Distinction. A social critique of the judgement of taste*. London: Routledge. Boyne, S., & Hall, D. (2004). Place promotion through food and tourism: Rural branding and

Boyne, S., Hall, D., & Williams, F. (2003). Policy, support and promotion for food-related

Canadian Tourism Commission. (2002). *Acquiring a taste for cuisine tourism: A product* 

Chang, R.C.Y., Kivela, J., & Mak, A.H.N. (2011). Attributes that influence the evaluation of

Cohen, E., & Avieli, N. (2004). Food in tourism attraction and impediment. *Annals of Tourism* 

Crotts, J., & Pizam, A. (2003). The effect of national culture on consumers' evaluation of travel services. *Journal of Tourism, Culture and Communications*, *4* (1), 17-28. Delamont, S. (1994). *Appetites and identities: Introduction to the social anthropology of Western* 

Donovan, A., & Debres, K. (2006). Foods of freedom: Juneteenth as a culinary tourist

du Rand, G. E., Heath, E., & Alberts, N. (2003). The role of local and regional food in

destination marketing: A South African situation analysis. *Journal of Travel &* 

tourism initiatives: A marketing approach to regional development. *Journal of* 

travel dining experience: When East meets West. *Tourism Management*, *32*(2), 307-

sources, socio-psychological motivations and destination images. In A. G. Woodside et al. (Eds.), *Consumer Psychology of Tourism Hospitality and Leisure* (pp.

practical suggestions to be proposed in the future.

Englewood Cliffs, N.J.: Prentice Hall.

63-90). New York: CABI Publishing.

choice. *Journal of Leisure Research*, *24* (3), 207-224.

Philadelphia: University of Pennsylvania Press.

the role of websites. *Place Branding*, *1* (1), 80-92.

*Travel & Tourism Marketing, 14* (3/4), 131-154.

attraction. *Tourism Review International*, *9*, 379-389.

*development strategy*. Ottawa: Author.

*Research*, *31* (4), 755-778.

*Europe*. London: Routledge.

*Tourism Marketing*, *14* (3/4), 97-112.

attractions in rural areas. *Sociologia Ruralis*, *38* (1), 21-34.

**7. References** 

316.

3. More empirical researches will be expected to explore the issues regarding culinary tourism.

The presence of tourists might negatively impact the local culture when developing the food potential of a particular area was argued in previous research (du Rand et al., 2003). That is to say, in order to make tourists accept local cuisine, it's usually changed in the ingredients, cooking ways or presentations; in other word, its transformation (or commercialization). So far, more empirical researches will be expected to explore the issues regarding authenticity and commercialization of local cuisine in culinary tourism; especially for tourists' perception and local residents' perceptions (positive and negative). It's of concern for sustainable development of culinary tourism.

4. Fewer researches explored culinary tourists' consuming perceptions.

The relevant researches regarding tourists' consuming perception of gastronomic experience seem to be insufficient. It can combine consumer perception, service quality with the characteristics of culinary tourism to proceed the researches of culinary tourists. Thus, it will contribute to the improvement of service quality, the quality of the dishes and the dining environment.

In addition, for methodology, there's still much room for qualitative research; especially for the survey of tourists. Perhaps it's a research limitation that it's hard to obtain the tourists as samples; moreover, it's more difficult to survey the tourists with gastronomic experience. There're many dimensions for tourists to experience gastronomy in a destination, such as dining at restaurants, tasting local delicacies or local fresh produce, food festivals or indigenous meals, and so on. It can be focused on each type to proceed more deep exploration and obtain more specific findings.

For the countries involved in recent researches, France which was popular as French cuisine, its brochure conveys gastronomic images which mostly were related to unprepared, natural products, rural products or country life. What the famous fine dining restaurants, delicacy and chefs were not emphasized. Even the Michelin starred restaurants of *Michelin Red Guide* didn't become the emphasis of tourism marketing neither. However, in Hong Kong, Hong Kong Tourism Board introduced the restaurants with *Best of the Best Culinary Award* or *Quality Tourism Services* to the tourists for the reference of choosing the restaurant. Here, an issue induced was what role the restaurant guide should play? If the restaurant guide provide objective reference for tourists? Is the information necessary for tourists? Does it can reduce the impediments for tourists to experience local cuisine according to the restaurant guide? And, how to develop an objective restaurant rating system to offer the guide for culinary tourists, especially in Asia? It's worth of following research in the future.

Finally, since most of recent researches were still focused on exploring one country, crossnational comparison and cross-national populations could be applied in exploring all dimensions of culinary tourism. For cross-national comparison, the strategies of culinary tourism development and the images that the marketing tools convey could be compared. For cross-national populations, it could be employed to compare culinary experience or consumers' behaviors among the tourists of different nationalities in a destination. Furthermore, some solid theories of other fields such as Social Psychology can be applied to explore culinary tourists' behavioral model. It'll make much contribution to future research.

Nowadays, the countries which pay much attention to culinary tourism are increasing gradually. Nevertheless, there are still some unclear questions and under-explored issues. For this specific type of tourism, it will need more efforts to be devoted to and more practical suggestions to be proposed in the future.

#### **7. References**

108 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

3. More empirical researches will be expected to explore the issues regarding culinary

4. Fewer researches explored culinary tourists' consuming perceptions.

The presence of tourists might negatively impact the local culture when developing the food potential of a particular area was argued in previous research (du Rand et al., 2003). That is to say, in order to make tourists accept local cuisine, it's usually changed in the ingredients, cooking ways or presentations; in other word, its transformation (or commercialization). So far, more empirical researches will be expected to explore the issues regarding authenticity and commercialization of local cuisine in culinary tourism; especially for tourists' perception and local residents' perceptions (positive and negative). It's of concern for sustainable development of

The relevant researches regarding tourists' consuming perception of gastronomic experience seem to be insufficient. It can combine consumer perception, service quality with the characteristics of culinary tourism to proceed the researches of culinary tourists. Thus, it will contribute to the improvement of service quality, the quality of the

In addition, for methodology, there's still much room for qualitative research; especially for the survey of tourists. Perhaps it's a research limitation that it's hard to obtain the tourists as samples; moreover, it's more difficult to survey the tourists with gastronomic experience. There're many dimensions for tourists to experience gastronomy in a destination, such as dining at restaurants, tasting local delicacies or local fresh produce, food festivals or indigenous meals, and so on. It can be focused on each type to proceed more deep

For the countries involved in recent researches, France which was popular as French cuisine, its brochure conveys gastronomic images which mostly were related to unprepared, natural products, rural products or country life. What the famous fine dining restaurants, delicacy and chefs were not emphasized. Even the Michelin starred restaurants of *Michelin Red Guide* didn't become the emphasis of tourism marketing neither. However, in Hong Kong, Hong Kong Tourism Board introduced the restaurants with *Best of the Best Culinary Award* or *Quality Tourism Services* to the tourists for the reference of choosing the restaurant. Here, an issue induced was what role the restaurant guide should play? If the restaurant guide provide objective reference for tourists? Is the information necessary for tourists? Does it can reduce the impediments for tourists to experience local cuisine according to the restaurant guide? And, how to develop an objective restaurant rating system to offer the guide for culinary tourists, especially in

Finally, since most of recent researches were still focused on exploring one country, crossnational comparison and cross-national populations could be applied in exploring all dimensions of culinary tourism. For cross-national comparison, the strategies of culinary tourism development and the images that the marketing tools convey could be compared. For cross-national populations, it could be employed to compare culinary experience or consumers' behaviors among the tourists of different nationalities in a destination.

tourism.

culinary tourism.

dishes and the dining environment.

exploration and obtain more specific findings.

Asia? It's worth of following research in the future.


Recent Developments in Research and Future Directions of Culinary Tourism: A Review 111

McKercher, B., Okumus, F., & Okumus, B. (2008). Food tourism as a viable market segment:

Meler, M., & Cerovic, Z. (2003). Food marketing in the function of tourist product

Molz, J. G. (2007). Eating difference: The cosmopolitan mobilities of culinary tourism. *Space* 

Morgan, N., & Pritchard, A. (2000). *Advertising in tourism and leisure*. Oxford: Butterworth-

Nield, K., Kozak, M., & LeGrys, G. (2000). The role of food service in tourist satisfaction.

Okumus, B., Okumus, F., & McKercher, B. (2007). Incorporating local and international

Quan, S., & Wang, N. (2004). Towards a structural model of the tourist experience: An illustration from food experiences in tourism. *Tourism management*, *25,* 297-305. Richards, G. (2002). Gastronomy: an essential ingredient in tourism production and

Ryu, K., & Jang, S. S. (2006). Intention to experience local cuisine in a travel destination: The

Sims, R. (2009). Food, place and authenticity: local food and the sustainable tourism

Smith, S., & Costello, C. (2009). Segmenting visitors to a culinary event: Motivations, travel

Stewart, J.W., Bramble, L., & Ziraldo, D. (2008). Key challenges in wine and culinary tourism

Tellstöm, R., Gustafasson, I.-B., & Mossberg, L. (2006). Consuming heritage: The use of local

Teo, P., & Chang, T. C. (2000). Singapore: Tourism development in a planned context. In C.

Tikkanen, I. (2007). Maslow's hierarchy and food tourism in Finland: five cases. *British Food* 

Tse, P., & Crotts, J. C. (2005). Antecedents of novelty seeking: International visitors'

Tussyadiah, I. P. (2005). A gourmet trip: One direction of domestic tourism in Japan. *Tourism* 

Wan, C.-S. (2002). The web sites of international tourist hotels and wholesalers in Taiwan.

experience. *Journal of Sustainable Tourism*, *17*(3), 321–336.

food culture in branding. *Place Branding*, *2* (2), 130-143.

cuisines in the marketing of tourism destinations: The cases of Hong Kong and

consumption? In A-M. Hjalager & G. Richards (Eds.), *Tourism and Gastronomy* (pp.

modified theory of reasoned action. *Journal of Hospitality & Tourism Research*, *30* (4),

Behavior, and expenditures. *Journal of Hospitality Marketing & Management*, *18*, 44-

with practical recommendations. *International Journal of Contemporary Hospitality* 

M. Hall & S. J. Page (Eds.), *Tourism in South and Southeast Asia* (pp. 117-128).

propensity to experiment across Hong Kong's culinary traditions. *Tourism* 

development. *British Food Journal*, *105* (3), 175-192.

148.

*and Culture*, *10* (1), 77-93.

3-20). London: Routledge.

*Management*, *20*(3), 302-312.

London: Routledge.

*Journal*, *109*(9), 721-734.

*Management*, *26*, 965-968.

*Review International*, *9*, 281-291.

*Tourism Management*, *23* (2), 155-160.

*Hospitality Management*, *19*, 375-384.

Turkey. *Tourism Management*, *28*, 253-261.

Heinemann.

507-516.

67.

It's all how you cook the numbers. *Journal of Travel & Tourism Marketing*, *25*(2), 137-


Everett, S., & Aitchison, C. (2008). The role of food tourism in sustaining regional identity: A

Fox, R. (2007). Reinventing the gastronomic identity of Croatian tourist destinations.

Frochot, I. (2003). An analysis of regional positioning and its associated food images in

Gursoy, D., & McCleary, K. (2004). An integrated model of tourists' information search

Hall, C. M., & Oehlers, A. L. (2000). Tourism and politics in South and Southeast Asia:

Hashimoto, A., & Telfer, D. J. (2006). Selling Canadian culinary tourism: Branding the global

Henderson, J. C. (2004). Food as a tourism resource: A view from Singapore. *Tourism* 

Hjalager, A.-M. (2004). What do tourists eat and why? Toward a sociology of gastronomy

Hjalager, A.-M. (2002). A typology of gastronomy tourism. In A-M. Hjalager & G. Richards

Hjalager, A.-M, Corigliano, M. A. (2000). Food for tourists: Determinants of an image.

Horng, J.-S., & Tsai, C. T. (2010). Government websites for promoting East Asian culinary tourism: A cross-national analysis. *Tourism Management*, *31*(1), 74-85. Ignatov, E., & Smith, S. (2006). Segmenting Canadian culinary tourists. *Current Issues in* 

Kim, Y. G., Eves, A., & Scarles, C. (2009). Building a model of local food consumption on

Kivela, J., & Crotts, J. C. (2005). Gastronomy tourism: A meaningful travel market segment.

Kivela, J., & Crotts, J. C. (2006). Tourism and gastronomy: gastronomy's influence on how

Kivela, J., & Crotts, J. C. (2009). Understanding travelers' experiences of gastronomy

Long, L. M. (2004). Culinary tourism: A folkloristic on eating and otherness. In L. M. Long,

MacLaurin, T. L. (2001). Food safety in travel and tourism. *Journal of Travel Research*, *39* (3),

trips and holidays: A grounded theory approach. *International Journal of Hospitality* 

tourists experience a destination. *Journal of Hospitality & Tourism Research*, *30* (3),

through etymology and narration. *Journal of Hospitality & Tourism Research*,

(Ed.), *Culinary Tourism* (pp. 20-50). Lexington, K.Y.: The University Press of

*International Journal of Hospitality Management*, *26*, 546-559.

Getz, D. (1991). *Festivals, special events, and tourism*. Van Nostrand: New York.

and the regional product. *Tourism Geographies*, *8* (1), 31-55.

(Eds.), *Tourism and Gastronomy* (pp. 21-35). London: Routledge.

*International Journal of Tourism Research*, *2*, 281-293.

*Journal of Culinary Science & Technology*, *4* (2/3), 39-55.

behavior. *Annals of Tourism Research*, *31* (2), 353-373.

*Southeast Asia* (pp. 77-93). London: Routledge.

*Recreation Research*, *29* (3), 69-74.

*Tourism*, *9* (3), 235-255.

354-377.

*33*(2), 161-192.

Kentucky.

332-333.

*Management*, *28*(3), 423-431.

and tourism. *Tourism*, *52* (2), 195-201.

18.

77-96.

case study of Cornwall, South West England. *Journal of Sustainable Tourism*, *16*(2), 1-

French tourism regional brochures. *Journal of Travel & Tourism Marketing*, *14* (3/4),

Political instability and policy. In C. M. Hall & S. J. Page (Eds.), *Tourism in South and* 


**6** 

Daan Toerien

*South Africa* 

**Enterprise Proportionalities in the Tourism** 

*Centre for Development Support, University of the Free State, Bloemfontein* 

Determination of the enterprise structures of towns followed by clustering and ordination techniques yielded important information about the similarities/dissimilarities of Karoo towns in South Africa (Toerien & Seaman, 2010). These techniques also revealed important proportionalities in the enterprise structures of towns (Toerien & Seaman, 2012,a), which are subject to 'island effects' (Toerien & Seaman, 2012,b). The proportionalities manifested as constant and statistically significant proportions between the enterprise numbers of some business sectors and the total enterprise numbers of towns. Such proportionalities obviously

Tourism and hospitality enterprises are the link between attractions/tourism products (supply-side) and tourists (demand-side) in any economy. Knowledge about the enterprise structures of the tourism and hospitality sector of towns is, therefore, important. However, the enterprise structures of this sector in relation to the rest of the enterprises of South African towns have not yet been analysed in any great detail, an issue this chapter addresses

Nel & Hill (2008) used a case study approach in studies of the marginalisation of rural towns in South Africa. Toerien & Seaman (2012b) followed their lead in an analysis of 'island effects' in enterprise development in South African towns. This study also uses a case study approach, focusing on 75 towns in semi-arid and arid South Africa. The primary aim of this chapter is to report on proportionalities in the tourism and hospitality sectors of these towns. In particular, an analysis is presented of the 'proportionality-in-proportionality' phenomenon, which was detected during this study. The practical implications of proportionality phenomena for tourism enterprises and authorities in semi-arid and arid

Context is firstly provided for the enterprise analysis. This consists of a brief overview of the importance of tourism in South Africa and includes considerations of the tourism challenges of small towns in South Africa. It is followed by a discussion of the history of the Karoo, the home of the towns selected for the study. The methodology to identify the enterprise structures of South African towns and their positioning as 'enterprise ecosystems' and 'enterprise islands' are then presented. The similarities/dissimilarities and proportionalities

provide a predictive ability about the enterprise structures of local economies.

**1. Introduction** 

for a group of towns.

South Africa are discussed.

**1.1 Logic of the chapter** 

**Sector of South African Towns** 

http://www.discoverhongkong.com/tc/index.jsp

http://www.visitsingapore.com/publish/stbportal/en/home.html

http://tw.news.yahoo.com/article/url/d/a/080114/1/ru27.html

### **Enterprise Proportionalities in the Tourism Sector of South African Towns**

#### Daan Toerien

*Centre for Development Support, University of the Free State, Bloemfontein South Africa* 

#### **1. Introduction**

112 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

http://www.discoverhongkong.com/tc/index.jsp

http://www.visitsingapore.com/publish/stbportal/en/home.html http://tw.news.yahoo.com/article/url/d/a/080114/1/ru27.html

> Determination of the enterprise structures of towns followed by clustering and ordination techniques yielded important information about the similarities/dissimilarities of Karoo towns in South Africa (Toerien & Seaman, 2010). These techniques also revealed important proportionalities in the enterprise structures of towns (Toerien & Seaman, 2012,a), which are subject to 'island effects' (Toerien & Seaman, 2012,b). The proportionalities manifested as constant and statistically significant proportions between the enterprise numbers of some business sectors and the total enterprise numbers of towns. Such proportionalities obviously provide a predictive ability about the enterprise structures of local economies.

> Tourism and hospitality enterprises are the link between attractions/tourism products (supply-side) and tourists (demand-side) in any economy. Knowledge about the enterprise structures of the tourism and hospitality sector of towns is, therefore, important. However, the enterprise structures of this sector in relation to the rest of the enterprises of South African towns have not yet been analysed in any great detail, an issue this chapter addresses for a group of towns.

> Nel & Hill (2008) used a case study approach in studies of the marginalisation of rural towns in South Africa. Toerien & Seaman (2012b) followed their lead in an analysis of 'island effects' in enterprise development in South African towns. This study also uses a case study approach, focusing on 75 towns in semi-arid and arid South Africa. The primary aim of this chapter is to report on proportionalities in the tourism and hospitality sectors of these towns. In particular, an analysis is presented of the 'proportionality-in-proportionality' phenomenon, which was detected during this study. The practical implications of proportionality phenomena for tourism enterprises and authorities in semi-arid and arid South Africa are discussed.

#### **1.1 Logic of the chapter**

Context is firstly provided for the enterprise analysis. This consists of a brief overview of the importance of tourism in South Africa and includes considerations of the tourism challenges of small towns in South Africa. It is followed by a discussion of the history of the Karoo, the home of the towns selected for the study. The methodology to identify the enterprise structures of South African towns and their positioning as 'enterprise ecosystems' and 'enterprise islands' are then presented. The similarities/dissimilarities and proportionalities

Enterprise Proportionalities in the Tourism Sector of South African Towns 115

trekking, (v) indigenous inhabitants, (vi) oases, and (vii) protected areas. On the supply-side quite a lot is known about the tourism attractions and/or products of the Karoo. Maguire (2009) presented a very useful analysis of the attractions of 58 different Karoo towns and villages. The attractions included: geology and landscapes, including mountain passes; palaeontology, archaeology and rock art; architecture; Anglo-Boer War history; literary tourism; Khoisan struggle sites; natural attractions; agricultural attractions; hunting; astronomy; historical interests; food tourism; missionary and church history; and outdoor

Atkinson (2010) described the many attractions of the region as follows: space, silence, serenity, a long and interesting prehistory and history, spectacular scenery, great hospitality, different cultures juxtaposed, many different heritage assets, excellent food, authenticity coupled to 'immaturity' as a tourist venue that means that much is unspoilt and non-

On the demand-side, Maguire (2009) analysed the tourist profile of the Karoo. It included: drop-ins who sleep over, retirees on self-drive tours, foreign self-drive tourists, bikers of mixed age groups (local and foreign), people that attend events such as motor bike rallies, endurance runs, car rallies, and festivals, people en route to events who extend their trips, tour groups in luxury buses (mostly foreign tourists), smaller tour groups in mini-buses (mix of local and foreign tourists), clubs and special interest groups on outings to places of interest, owners of recreational vehicle owners, hunters, campers, and families with children. Many different people visit the Karoo for a variety of reasons: nature, tranquillity and solitude, friendly people, openness, fresh air, food, heritage, night skies, ambience,

To understand the challenges inherent in an effort to grow the tourism and hospitality sector in arid and semi-arid South Africa, it is necessary to dwell on the general as well as specific problems that face small South African towns, many of which have experienced rapid transformation over the past two decades. This transformation has been assisted by South Africa's re-entry into global markets, changes in transport systems and infrastructure, a greater degree of mechanisation in the farming industry, government policy and global economic change (Centre for Development Support, 2010). As a result many small towns have experienced economic decline and the historical links between commercial farming communities and these small towns have deteriorated. Simultaneously, in-migration of redundant low-skilled farm workers to small towns occurred. This placed considerable

Despite the overall concerns related to small towns, a fair number of them have benefited from tourism since the mid-1990s. Clarens (in the north-eastern Free State Province) and Dullstroom (in Mpumalanga Province) were used as case study towns (Centre for Development Support, 2010) to identify important issues associated with the expansion of the tourism and hospitality sectors in small South African towns. Both Clarens and Dullstroom experienced extensive tourism growth since the early 1990s, mainly as a result of an increasing demand for weekend tourism. This benefited local businesses but an increasing number of farmers also diversified into tourism activities. In addition property developers also moved in. However, by the end of 2010 the growth in tourism in Dullstroom

Risks identified were: (i) small towns may lose their smallness and natural beauty as a result of rapid and uncoordinated development, (ii) there is deterioration of access routes that

had come to a standstill and that of Clarens continued but with definite risks.

commercialised, with a rural charm not available in larger urban tourist venues.

and adventure tourism.

remoteness and cleanness (Atkinson, 2010).

pressure on the existing infrastructure of the towns.

of the enterprise structures of 75 towns from South Africa's semi-arid and arid interior are examined through clustering and multivariate statistical techniques. The tourism-related enterprises of these towns are then considered in greater detail. Proportionalities within this sector, including 'proportionality-in-proportionality' phenomena, receive detailed attention. The results are finally discussed and conclusions drawn.

#### **2. Tourism in South Africa**

International travel to South Africa surged since the end of apartheid (SouthAfrica.info, 2011). In 1994, the year of South Africa's first democratic elections, only 3.9-million foreign visitors arrived in the country. By 2004, international arrivals had increased to 6.7-million. And in 2007 a total of 9.07-million foreigners visited South Africa, an 8.3% increase over 2006. Tourism was identified as an economic sector that could help to provide much needed employment.

In July 2010, the South African Department of Tourism together with South African Tourism and the Tourism Business Council of South Africa launched a National Tourism Sector Strategy (South African Government, 2011) with core objectives to: (i) grow the tourism sector's contribution to the gross domestic product, (ii) achieve transformation, (iii) provide people with development and decent jobs, and, (iv) entrench a culture of travel among South Africans. Specific aims are: (i) to grow tourism's direct contribution to gross domestic product from an estimated R64.5 billion or 3.2% of gross domestic product in 2009 to R125 billion or 3.5% of gross domestic product in 2015 (exchange rate ~ R7 per US\$), (ii) to grow tourism's total (direct and indirect) contribution to gross domestic product from an estimated R173.9 billion or 8.7% in 2009 to R338.2 billion or 9.4% of gross domestic product in 2015, (iii) to increase the number of foreign arrivals from 9.9 million in 2009 to 13.5 million in 2015, (iv) to increase the number of direct jobs supported by the sector from an estimated 575000 in 2009 to 800000 in 2015, and (v) to increase the number of total (direct and indirect) jobs supported by the sector from an estimated 1.4 million in 2009 to 1.9 million in 2015.

These are formidable targets especially because one-third of South Africa is semi-arid to arid (Cowling, 1986). Travellers regularly perceive this area, regularly referred to as the Karoo, as a 'desert', a badland characterized by heat, dust, overgrazing and marginalized people (Milton & Dean, 2010). The Karoo has also been perceived as: (i) being in economic, agricultural and population decline, (ii) being marginalised through its division into four provinces, (iii) having a denuded landscape, and, (iv) having small town decline (Nel & Hill, 2008).

Such perceptions about an arid area are not unique. Desert economies are internationally characterised by having marginal lands for conventional agriculture, and a high proportion of economic activity in the mining, tourism and service industries (Tremblay, 2006). Their populations are relatively small and sparse, resulting in relatively high service delivery costs (Tremblay, 2006). Typically, tourism is presented as a promising but dangerous form of development, of which the impacts on desert communities are imperfectly understood. Yet, this often takes place in contexts where the number of alternatives (to tourism) is limited and where tourism is likely to compete for resources with other more traditional forms of economic activity (Tremblay, 2006).

Weaver (2001) identified seven attributes that are strongly associated with desert tourism: (i) exceptional geological features and climatic conditions, (ii) wildflower and other episodic floral displays, (iii) ancient, large or unusual vegetation, (iv) caravans or other desert

of the enterprise structures of 75 towns from South Africa's semi-arid and arid interior are examined through clustering and multivariate statistical techniques. The tourism-related enterprises of these towns are then considered in greater detail. Proportionalities within this sector, including 'proportionality-in-proportionality' phenomena, receive detailed attention.

International travel to South Africa surged since the end of apartheid (SouthAfrica.info, 2011). In 1994, the year of South Africa's first democratic elections, only 3.9-million foreign visitors arrived in the country. By 2004, international arrivals had increased to 6.7-million. And in 2007 a total of 9.07-million foreigners visited South Africa, an 8.3% increase over 2006. Tourism was identified as an economic sector that could help to provide much needed

In July 2010, the South African Department of Tourism together with South African Tourism and the Tourism Business Council of South Africa launched a National Tourism Sector Strategy (South African Government, 2011) with core objectives to: (i) grow the tourism sector's contribution to the gross domestic product, (ii) achieve transformation, (iii) provide people with development and decent jobs, and, (iv) entrench a culture of travel among South Africans. Specific aims are: (i) to grow tourism's direct contribution to gross domestic product from an estimated R64.5 billion or 3.2% of gross domestic product in 2009 to R125 billion or 3.5% of gross domestic product in 2015 (exchange rate ~ R7 per US\$), (ii) to grow tourism's total (direct and indirect) contribution to gross domestic product from an estimated R173.9 billion or 8.7% in 2009 to R338.2 billion or 9.4% of gross domestic product in 2015, (iii) to increase the number of foreign arrivals from 9.9 million in 2009 to 13.5 million in 2015, (iv) to increase the number of direct jobs supported by the sector from an estimated 575000 in 2009 to 800000 in 2015, and (v) to increase the number of total (direct and indirect) jobs supported by the sector from an estimated 1.4 million in 2009 to 1.9 million in 2015.

These are formidable targets especially because one-third of South Africa is semi-arid to arid (Cowling, 1986). Travellers regularly perceive this area, regularly referred to as the Karoo, as a 'desert', a badland characterized by heat, dust, overgrazing and marginalized people (Milton & Dean, 2010). The Karoo has also been perceived as: (i) being in economic, agricultural and population decline, (ii) being marginalised through its division into four provinces, (iii) having

Such perceptions about an arid area are not unique. Desert economies are internationally characterised by having marginal lands for conventional agriculture, and a high proportion of economic activity in the mining, tourism and service industries (Tremblay, 2006). Their populations are relatively small and sparse, resulting in relatively high service delivery costs (Tremblay, 2006). Typically, tourism is presented as a promising but dangerous form of development, of which the impacts on desert communities are imperfectly understood. Yet, this often takes place in contexts where the number of alternatives (to tourism) is limited and where tourism is likely to compete for resources with other more traditional forms of

Weaver (2001) identified seven attributes that are strongly associated with desert tourism: (i) exceptional geological features and climatic conditions, (ii) wildflower and other episodic floral displays, (iii) ancient, large or unusual vegetation, (iv) caravans or other desert

a denuded landscape, and, (iv) having small town decline (Nel & Hill, 2008).

The results are finally discussed and conclusions drawn.

**2. Tourism in South Africa** 

economic activity (Tremblay, 2006).

employment.

trekking, (v) indigenous inhabitants, (vi) oases, and (vii) protected areas. On the supply-side quite a lot is known about the tourism attractions and/or products of the Karoo. Maguire (2009) presented a very useful analysis of the attractions of 58 different Karoo towns and villages. The attractions included: geology and landscapes, including mountain passes; palaeontology, archaeology and rock art; architecture; Anglo-Boer War history; literary tourism; Khoisan struggle sites; natural attractions; agricultural attractions; hunting; astronomy; historical interests; food tourism; missionary and church history; and outdoor and adventure tourism.

Atkinson (2010) described the many attractions of the region as follows: space, silence, serenity, a long and interesting prehistory and history, spectacular scenery, great hospitality, different cultures juxtaposed, many different heritage assets, excellent food, authenticity coupled to 'immaturity' as a tourist venue that means that much is unspoilt and noncommercialised, with a rural charm not available in larger urban tourist venues.

On the demand-side, Maguire (2009) analysed the tourist profile of the Karoo. It included: drop-ins who sleep over, retirees on self-drive tours, foreign self-drive tourists, bikers of mixed age groups (local and foreign), people that attend events such as motor bike rallies, endurance runs, car rallies, and festivals, people en route to events who extend their trips, tour groups in luxury buses (mostly foreign tourists), smaller tour groups in mini-buses (mix of local and foreign tourists), clubs and special interest groups on outings to places of interest, owners of recreational vehicle owners, hunters, campers, and families with children. Many different people visit the Karoo for a variety of reasons: nature, tranquillity and solitude, friendly people, openness, fresh air, food, heritage, night skies, ambience, remoteness and cleanness (Atkinson, 2010).

To understand the challenges inherent in an effort to grow the tourism and hospitality sector in arid and semi-arid South Africa, it is necessary to dwell on the general as well as specific problems that face small South African towns, many of which have experienced rapid transformation over the past two decades. This transformation has been assisted by South Africa's re-entry into global markets, changes in transport systems and infrastructure, a greater degree of mechanisation in the farming industry, government policy and global economic change (Centre for Development Support, 2010). As a result many small towns have experienced economic decline and the historical links between commercial farming communities and these small towns have deteriorated. Simultaneously, in-migration of redundant low-skilled farm workers to small towns occurred. This placed considerable pressure on the existing infrastructure of the towns.

Despite the overall concerns related to small towns, a fair number of them have benefited from tourism since the mid-1990s. Clarens (in the north-eastern Free State Province) and Dullstroom (in Mpumalanga Province) were used as case study towns (Centre for Development Support, 2010) to identify important issues associated with the expansion of the tourism and hospitality sectors in small South African towns. Both Clarens and Dullstroom experienced extensive tourism growth since the early 1990s, mainly as a result of an increasing demand for weekend tourism. This benefited local businesses but an increasing number of farmers also diversified into tourism activities. In addition property developers also moved in. However, by the end of 2010 the growth in tourism in Dullstroom had come to a standstill and that of Clarens continued but with definite risks.

Risks identified were: (i) small towns may lose their smallness and natural beauty as a result of rapid and uncoordinated development, (ii) there is deterioration of access routes that

Enterprise Proportionalities in the Tourism Sector of South African Towns 117

Cape of Good Hope to provide fresh produce and meat to the crews of their ships, thereby establishing a permanent European presence in the south-western Cape (Giliomee & Mbenga, 2007; Guelke, 1979). Their limited capacity to raise stock soon meant that cattle and sheep had to be sourced from the Khoikhoi (Giliomee & Mbenga, 2007). The Company's thrust into the more distant domains of the Khoikhoi consisted of three distinct, though

A 'trading frontier' to obtain livestock from the Khoikhoi expanded steadily until about 1700. However, the ability of the Khoikhoi to supply enough livestock also became limited (Elphick, 1979). Secondly, the Dutch East India Company started allocating land that had traditionally fallen under Khoikhoi control and allowed free farmers to settle there (Wickins, 1983). The third frontier was one of semi-nomadic European pastoralists (called 'trekboers') who moved inland (Elphick, 1979). The farmers adopted the agricultural technologies of the Khoikhoi, i.e. the herding of fat-tailed sheep and cattle adapted to local conditions. The

Wool production in the south-western Cape was negligible up to the end of the 18th century. During the next fifty years wool farming became the staple economy of the countryside (Burrows, 1994). In 1830 the Cape Colony exported 15 tons of wool and 22000 tons by 1872.

There were no commercial reasons to establish towns in the Karoo (Fransen, 2006). Two other needs drove this. Firstly, the authorities had a need for administrative control and they established drostdys (administrative centres) around which villages and later towns developed. Secondly the farmers' needs for religious services drove the establishment of new parishes. As soon as a church was built, some stands were sold, houses built and

For more than a century since 1850 the Karoo and its towns prospered as a result of wool exports (Wickins, 1983). In time, however, overexploitation of the Karoo followed, which by the mid-twentieth century had caused land degradation that led to much concern (Milton & Dean, 2010; Nel & Hill, 2008). Current national policy is to invest preferentially in the geographical areas in South Africa with the highest potential for economic growth. This led to an economic slump in the Karoo in which the smaller towns struggled in contrast to the larger towns (Nel & Hill 2008). Tourism is increasingly seen as a business sector that can

There is an on-going interest in the role played by evolutionary biology and Darwinism in evolutionary economics (Witt, 2008). Complexity economics, part of evolutionary economics and in contrast to traditional economics, emphasises the influence of entropy on economic systems and the need for energy to reduce entropy and create local order (Beinhocker, 2006). He stated that economic wealth and biological wealth are thermodynamically the same sort of phenomena, i.e. systems of locally low entropy, patterns of order that evolved over time under the constraint of fitness functions. Beinhocker (2006) suggested that enterprises like organisms are subject to Darwinian competition in which the fittest survive. The enterprises present in a town at a specific point in time, therefore, reflect at that time the outcome of the

'trekboers' supplied livestock to the Dutch East India Company.

Sheep farmers in the Karoo were part of the wool production system.

eventually villages and later towns developed (Fransen, 2006).

help Karoo towns to meet their economic challenges (Atkinson, 2010).

**4. South African towns as enterprise ecosystems and islands** 

overlapping, phases (Elphick, 1979).

Darwinian competition.

impacts upon tourist visits, (iii) there are demand peaks in local public services that stretch the organisational and technical capacities of small local authorities, (iv) there are quality deficiencies in the services provided, which contribute to: (a) fewer tourists, (b) entice the entry of national and international tourism operators to the detriment of local enterprises, and, (c) contribute to the over-commercialisation of towns, and, (v) a significant number of the poor in the area might not experience any benefit at all from tourism, an issue that remains politically important (Centre for Development Support**,** 2010).

#### **3. The Karoo and its history**

The semi-arid and arid heartland of South Africa, called the Karoo, is large (Figure 1). It stretches about 600 km from east to west and about 600 km from north to south (Atkinson, 2010) and covers approximately 400,000 km2 (Nel & Hill, 2008). It has different sub-regions: the Nama-Karoo (northern parts), the Klein-Karoo (southern parts), the Great Karoo (central part) and the False Karoo (in the southern Free State) (Atkinson, 2010). The Karoo is a single ecosystem, sub-divided into a winter rainfall and a summer rainfall area (Cowling, 1986). It borders on other arid areas in South Africa, notably the Kalahari, Bushmanland, Namaqualand, and the Richtersveld (Atkinson, 2010).

Fig. 1. Map of semi-arid and arid South Africa and the selected towns indicated as dots.

The sheer size of the Karoo means that it has never been administered as a coherent entity, with its own specific needs (Atkinson, 2010). Before 2000, it was administered by rural Divisional Councils and urban Town Councils in the erstwhile Cape Province and Free State Province. Since 2000, it straddles four provinces, each with its own set of priorities.

The Karoo supported hunter-gatherers for about one million years (Deacon & Deacon 2003) and nomadic Khoikhoi herders for more than 1600 years (Boonzaaier et al, 1996; Giliomee & Mbenga, 2007). In 1652 the Dutch East India Company established a victualing station at the

impacts upon tourist visits, (iii) there are demand peaks in local public services that stretch the organisational and technical capacities of small local authorities, (iv) there are quality deficiencies in the services provided, which contribute to: (a) fewer tourists, (b) entice the entry of national and international tourism operators to the detriment of local enterprises, and, (c) contribute to the over-commercialisation of towns, and, (v) a significant number of the poor in the area might not experience any benefit at all from tourism, an issue that

The semi-arid and arid heartland of South Africa, called the Karoo, is large (Figure 1). It stretches about 600 km from east to west and about 600 km from north to south (Atkinson, 2010) and covers approximately 400,000 km2 (Nel & Hill, 2008). It has different sub-regions: the Nama-Karoo (northern parts), the Klein-Karoo (southern parts), the Great Karoo (central part) and the False Karoo (in the southern Free State) (Atkinson, 2010). The Karoo is a single ecosystem, sub-divided into a winter rainfall and a summer rainfall area (Cowling, 1986). It borders on other arid areas in South Africa, notably the Kalahari, Bushmanland,

Fig. 1. Map of semi-arid and arid South Africa and the selected towns indicated as dots.

Province. Since 2000, it straddles four provinces, each with its own set of priorities.

The sheer size of the Karoo means that it has never been administered as a coherent entity, with its own specific needs (Atkinson, 2010). Before 2000, it was administered by rural Divisional Councils and urban Town Councils in the erstwhile Cape Province and Free State

The Karoo supported hunter-gatherers for about one million years (Deacon & Deacon 2003) and nomadic Khoikhoi herders for more than 1600 years (Boonzaaier et al, 1996; Giliomee & Mbenga, 2007). In 1652 the Dutch East India Company established a victualing station at the

remains politically important (Centre for Development Support**,** 2010).

Namaqualand, and the Richtersveld (Atkinson, 2010).

**3. The Karoo and its history** 

Cape of Good Hope to provide fresh produce and meat to the crews of their ships, thereby establishing a permanent European presence in the south-western Cape (Giliomee & Mbenga, 2007; Guelke, 1979). Their limited capacity to raise stock soon meant that cattle and sheep had to be sourced from the Khoikhoi (Giliomee & Mbenga, 2007). The Company's thrust into the more distant domains of the Khoikhoi consisted of three distinct, though overlapping, phases (Elphick, 1979).

A 'trading frontier' to obtain livestock from the Khoikhoi expanded steadily until about 1700. However, the ability of the Khoikhoi to supply enough livestock also became limited (Elphick, 1979). Secondly, the Dutch East India Company started allocating land that had traditionally fallen under Khoikhoi control and allowed free farmers to settle there (Wickins, 1983). The third frontier was one of semi-nomadic European pastoralists (called 'trekboers') who moved inland (Elphick, 1979). The farmers adopted the agricultural technologies of the Khoikhoi, i.e. the herding of fat-tailed sheep and cattle adapted to local conditions. The 'trekboers' supplied livestock to the Dutch East India Company.

Wool production in the south-western Cape was negligible up to the end of the 18th century. During the next fifty years wool farming became the staple economy of the countryside (Burrows, 1994). In 1830 the Cape Colony exported 15 tons of wool and 22000 tons by 1872. Sheep farmers in the Karoo were part of the wool production system.

There were no commercial reasons to establish towns in the Karoo (Fransen, 2006). Two other needs drove this. Firstly, the authorities had a need for administrative control and they established drostdys (administrative centres) around which villages and later towns developed. Secondly the farmers' needs for religious services drove the establishment of new parishes. As soon as a church was built, some stands were sold, houses built and eventually villages and later towns developed (Fransen, 2006).

For more than a century since 1850 the Karoo and its towns prospered as a result of wool exports (Wickins, 1983). In time, however, overexploitation of the Karoo followed, which by the mid-twentieth century had caused land degradation that led to much concern (Milton & Dean, 2010; Nel & Hill, 2008). Current national policy is to invest preferentially in the geographical areas in South Africa with the highest potential for economic growth. This led to an economic slump in the Karoo in which the smaller towns struggled in contrast to the larger towns (Nel & Hill 2008). Tourism is increasingly seen as a business sector that can help Karoo towns to meet their economic challenges (Atkinson, 2010).

#### **4. South African towns as enterprise ecosystems and islands**

There is an on-going interest in the role played by evolutionary biology and Darwinism in evolutionary economics (Witt, 2008). Complexity economics, part of evolutionary economics and in contrast to traditional economics, emphasises the influence of entropy on economic systems and the need for energy to reduce entropy and create local order (Beinhocker, 2006). He stated that economic wealth and biological wealth are thermodynamically the same sort of phenomena, i.e. systems of locally low entropy, patterns of order that evolved over time under the constraint of fitness functions. Beinhocker (2006) suggested that enterprises like organisms are subject to Darwinian competition in which the fittest survive. The enterprises present in a town at a specific point in time, therefore, reflect at that time the outcome of the Darwinian competition.

Enterprise Proportionalities in the Tourism Sector of South African Towns 119

Aberdeen S1 g 39 Loxton S39 h 7

Bay S2 g 55 Luckhoff S40 h 16 Augrabies S3 g 41 Middelburg (EC) S41 f 161 Barkly West S4 g 77 Montagu S42 d 224 Barrydale S5 d 56 Murraysburg S43 e 21 Beaufort West S6 g 353 Nieu-Bethesda S44 e 21 Bethulie S7 g 43 Nieuwoudtville S45 h 30 Brandvlei S8 h 22 Noupoort S46 i 30 Britstown S9 g 27 Orania S47 g 28 Burgersdorp S10 g 115 Oudtshoorn S48 f 897 Calitzdorp S11 d 54 Pearston S49 h 19 Calvinia S12 g 110 Pella S50 f 8 Carnarvon S13 g 58 Petrusville S51 f 17 Colesberg S14 g 144 Philippolis S52 f 24 Cradock S15 g 296 Philipstown S53 f 15 De Aar S16 g 223 Pofadder S54 h 41 Fauresmith S17 g 22 Prieska S55 g 108 Fraserburg S18 g 33 Prince Albert S56 h 82 Gariepdam S19 g 21 Richmond S57 b 30 Garies S20 g 26 Smithfield S58 g 35 Graaff-Reinet S21 e 329 Somerset East S59 h 191 Griekwastad S22 g 31 Springfontein S60 g 23 Hanover S23 g 22 Steynsburg S61 g 39 Hofmeyr S24 g 17 Steytlerville S62 g 30 Hopetown S25 g 70 Strydenburg S63 h 17 Jacobsdal S26 g 42 Sutherland S64 f 35 Jagersfontein S27 g 28 Tarkastad S65 g 42 Jansenville S28 g 47 Trompsburg S66 g 38 Kakamas S29 g 138 Uniondale S67 f 42 Kathu S30 g 135 Upington S68 g 906 Keimoes S31 g 101 Vanderkloof S69 g 18 Kenhardt S32 h 29 Vanwyksvlei S70 h 8 Klipplaat S33 g 15 Venterstad S71 e 18 Koffiefontein S34 g 43 Victoria West S72 a 74 Ladismith S35 d 88 Vosburg S73 a 16 Laingsburg S36 g 56 Williston S74 a 26 Lime Acres S37 g 42 Willowmore S75 e 49

**enterprises Town No. Source\* No. of** 

**enterprises** 

**Town No. Source\* No. of** 

Loeriesfontein S38 h 29

b = 2002/03, d = 2005/06, f = 2007/08, h = 2009/10

listings and the total number of their enterprises.

a = 2000/01, c= 2004/05, e = 2006/07,g = 2008/09, i= 2010/11

Table 1. The selected towns including their identification numbers, the sources of enterprise

\* Year of telephone directory:

Alexander

Natural ecosystems have been defined as biotic communities or assemblages and their associated physical environments in specific places (Tansley, 1935). Towns also meet the norms of the above definition of ecosystems, i.e. they house assemblages of enterprises in associated physical environments in specific places (Toerien & Seaman, 2010). As a consequence they can be considered to be enterprise ecosystems, a hypothesis that was tested and accepted for South African towns by Toerien & Seaman (2010).

These authors employed clustering and ordination techniques, frequently used in studies of natural ecosystems, to investigate the similarities/dissimilarities of the enterprise structures of 47 Karoo towns. These techniques revealed six different clusters of towns at a correlation coefficient level of 0.65 and the clusters differed significantly (P < 0.05) in some respects. The agricultural products and services, the tourism and hospitality, and the trade sectors were particularly important in defining the clusters. This provided direct evidence that the tourism and hospitality sector is important in defining the characteristics of towns of semiarid and arid South Africa.

Toerien & Marais (2012) used similar techniques to study the enterprise structures of 122 South African towns and villages with enterprise assemblages that ranged in size from eight to 1830 enterprises. They found that there were marked differences in the enterprise assemblages of towns of similar sizes, which suggested that the ways in which they provided services differed markedly.

Toerien & Seaman (2012a) found surprising proportionalities in most business sectors of 125 South African towns. In most business sectors, but not all, the number of enterprises per town was significantly (P < 0.01) correlated with the total number of enterprises per town. Toerien & Seaman (2012b) showed that the Species Equilibrium Model of MacArthur & Wilson (1967), which describes the dynamics of immigrant biological species on islands, is a metaphor for enterprise development in rural South African towns. In short, towns are 'enterprise islands'. Two of their observations are important: (i) there is an equilibrium number of enterprises in a town, which is determined by the population size of the town, and, (ii) there is a balance between the rate at which new enterprises are established in a business sector and the rate at which enterprises disappear from the sector. These observations have numerous implications for local economic development strategies.

#### **5. The enterprise proportionalities of semi-arid and arid region South African towns**

#### **5.1 Methods used**

Toerien & Seaman (2010) showed that a selection of Karoo towns provided a suitable case study for testing the hypothesis that towns are enterprise ecosystems. Nel & Hill (2008) also used case studies to investigate towns of the eastern Cape. Against this background, seventy five towns from semi-arid and arid South Africa (Figure 1, Table 1) were selected for this study. The selection was made to include towns of different origins and different parts of semi-arid and arid South Africa. It included towns from the Little Karoo, the Great Karoo, the Kalahari and Namaqualand. It also included former administrative centres, 'church towns' (*sensu* Fransen, 2006), mission towns, river towns (located along the Orange River) and mining towns. The reason for this selection was to ensure that the tourism and hospitality enterprises of the semi-arid and arid region could be examined in detail.

Natural ecosystems have been defined as biotic communities or assemblages and their associated physical environments in specific places (Tansley, 1935). Towns also meet the norms of the above definition of ecosystems, i.e. they house assemblages of enterprises in associated physical environments in specific places (Toerien & Seaman, 2010). As a consequence they can be considered to be enterprise ecosystems, a hypothesis that was

These authors employed clustering and ordination techniques, frequently used in studies of natural ecosystems, to investigate the similarities/dissimilarities of the enterprise structures of 47 Karoo towns. These techniques revealed six different clusters of towns at a correlation coefficient level of 0.65 and the clusters differed significantly (P < 0.05) in some respects. The agricultural products and services, the tourism and hospitality, and the trade sectors were particularly important in defining the clusters. This provided direct evidence that the tourism and hospitality sector is important in defining the characteristics of towns of semi-

Toerien & Marais (2012) used similar techniques to study the enterprise structures of 122 South African towns and villages with enterprise assemblages that ranged in size from eight to 1830 enterprises. They found that there were marked differences in the enterprise assemblages of towns of similar sizes, which suggested that the ways in which they

Toerien & Seaman (2012a) found surprising proportionalities in most business sectors of 125 South African towns. In most business sectors, but not all, the number of enterprises per town was significantly (P < 0.01) correlated with the total number of enterprises per town. Toerien & Seaman (2012b) showed that the Species Equilibrium Model of MacArthur & Wilson (1967), which describes the dynamics of immigrant biological species on islands, is a metaphor for enterprise development in rural South African towns. In short, towns are 'enterprise islands'. Two of their observations are important: (i) there is an equilibrium number of enterprises in a town, which is determined by the population size of the town, and, (ii) there is a balance between the rate at which new enterprises are established in a business sector and the rate at which enterprises disappear from the sector. These

observations have numerous implications for local economic development strategies.

hospitality enterprises of the semi-arid and arid region could be examined in detail.

**5. The enterprise proportionalities of semi-arid and arid region South African** 

Toerien & Seaman (2010) showed that a selection of Karoo towns provided a suitable case study for testing the hypothesis that towns are enterprise ecosystems. Nel & Hill (2008) also used case studies to investigate towns of the eastern Cape. Against this background, seventy five towns from semi-arid and arid South Africa (Figure 1, Table 1) were selected for this study. The selection was made to include towns of different origins and different parts of semi-arid and arid South Africa. It included towns from the Little Karoo, the Great Karoo, the Kalahari and Namaqualand. It also included former administrative centres, 'church towns' (*sensu* Fransen, 2006), mission towns, river towns (located along the Orange River) and mining towns. The reason for this selection was to ensure that the tourism and

tested and accepted for South African towns by Toerien & Seaman (2010).

arid and arid South Africa.

**towns** 

**5.1 Methods used** 

provided services differed markedly.


\* Year of telephone directory:

a = 2000/01, c= 2004/05, e = 2006/07,g = 2008/09, i= 2010/11

b = 2002/03, d = 2005/06, f = 2007/08, h = 2009/10

Table 1. The selected towns including their identification numbers, the sources of enterprise listings and the total number of their enterprises.

Enterprise Proportionalities in the Tourism Sector of South African Towns 121

The complete linkage option of the PRIMER 6 software was used for clustering purposes. The correlation coefficient similarity matrix formed the input. The cluster order of towns was used to examine the strength of specific towns in specific business sectors, especially the

Principal component analysis is an ordination technique in which samples regarded as points in a high-dimensional variable space are projected onto 'best-fitting' planes (Clarke & Gorley, 2001). The purpose of the new axes is to capture as much of the variability in the original space as possible, and the extent to which the first few principal components allow an accurate representation of the true relationship between the samples in the original highdimensional space is summarised by the "percentage of variation explained" (a ratio of eigenvalues). The PRIMER 6 software was also used for the principal component analysis. The correlation coefficient similarity matrix (see above) formed the input of the principal

The enterprise numbers of South African towns are not normally distributed (Toerien & Seaman, 2011); hence, non-parametric statistical tests were mostly used to examine enterprise structures. Such analyses do not require assumptions about normal distributions of the data but use rank numbers instead. Kruskal-Wallis, Mann-Whitney and Tukey nonparametric comparisons were used to test for the presence of statistically significant differences between identified clusters of towns. WINKS SDA Software (6th edition) obtained from TexaSoft, Cedar Hill was used for this purpose. Cluster 8 with only two

Once it was established that the tourism and hospitality sector was an important differentiator for the selected towns, more detailed analyses were done on this sector. Firstly, the overall structure of the sector was analysed in terms of enterprise numbers and composition. Thereafter the presence of proportionalities in the sector was examined through the use of correlation and regression techniques. To compare clusters with each other non-parametric tests were used where appropriate. Microsoft Excel and WINKS SDA Software (6th edition) obtained from TexaSoft, Cedar Hill were used for this purpose. Where data such as ratios between sector and total number of enterprises proved to be normally distributed, standard ANOVA analyses were used for comparisons of clusters. WINKS SDA Software (6th edition) obtained from TexaSoft, Cedar Hill was also

Eight clusters were identified in the selected towns (Figure 2). Based on their enterprise structures there are clearly definite groups of towns in semi-arid and arid South Africa. To understand which business sectors are important in determining the differences between the

The first five principal components were extracted and the eigenvectors are summarised in Table 3. The tourism and hospitality sector together with the trade sector contributed very

member towns was omitted from these analyses because of its small size.

tourism and hospitality sector.

component analysis.

used for this purpose.

**5.2.1 Cluster analysis of towns** 

**5.2.2 Principal component analysis** 

clusters a principal component analysis was performed.

**5.2 Results** 

The rapid method of Toerien & Seaman (2010) was used to determine the enterprise assemblages of the selected towns. All enterprises listed in telephone directories for the different towns (Table 1) were identified and listed in spread sheets. They were then categorized into 19 major enterprise sectors that included economic drivers (including the tourism and hospitality sector) as well as service providers (Table 2). When it was impossible to deduce the nature of an enterprise from its name in the telephone directory and/or from an Internet search via Google, the entry was not used in subsequent analyses. The identified enterprises in every enterprise sector of each town were counted to develop an enterprise assemblage profile for each town.

The clustering and ordination of enterprise assemblages of differing sizes of different towns required normalisation of the data by expressing the numbers of enterprises in each business sector as a percentage of the total number of enterprises in specific towns. The computer software package PRIMER (Plymouth Routines In Multivariate Ecological Research) obtained from PRIMER-E Ltd, Plymouth was used to examine the similarities/dissimilarities of the enterprise assemblages of the selected towns. Pearson correlation coefficients based on normalised data were calculated between each possible pairing of villages and towns, resulting in a correlation coefficient similarity matrix. The matrix served as input to subsequent analyses.

Cluster analyses aim to find "natural groupings" of samples such that samples within a group are generally more similar to each other than samples in different groups and the results can be presented in dendrograms (Clarke & Warwick, 2001; Clarke & Gorley, 2006).



The complete linkage option of the PRIMER 6 software was used for clustering purposes. The correlation coefficient similarity matrix formed the input. The cluster order of towns was used to examine the strength of specific towns in specific business sectors, especially the tourism and hospitality sector.

Principal component analysis is an ordination technique in which samples regarded as points in a high-dimensional variable space are projected onto 'best-fitting' planes (Clarke & Gorley, 2001). The purpose of the new axes is to capture as much of the variability in the original space as possible, and the extent to which the first few principal components allow an accurate representation of the true relationship between the samples in the original highdimensional space is summarised by the "percentage of variation explained" (a ratio of eigenvalues). The PRIMER 6 software was also used for the principal component analysis. The correlation coefficient similarity matrix (see above) formed the input of the principal component analysis.

The enterprise numbers of South African towns are not normally distributed (Toerien & Seaman, 2011); hence, non-parametric statistical tests were mostly used to examine enterprise structures. Such analyses do not require assumptions about normal distributions of the data but use rank numbers instead. Kruskal-Wallis, Mann-Whitney and Tukey nonparametric comparisons were used to test for the presence of statistically significant differences between identified clusters of towns. WINKS SDA Software (6th edition) obtained from TexaSoft, Cedar Hill was used for this purpose. Cluster 8 with only two member towns was omitted from these analyses because of its small size.

Once it was established that the tourism and hospitality sector was an important differentiator for the selected towns, more detailed analyses were done on this sector. Firstly, the overall structure of the sector was analysed in terms of enterprise numbers and composition. Thereafter the presence of proportionalities in the sector was examined through the use of correlation and regression techniques. To compare clusters with each other non-parametric tests were used where appropriate. Microsoft Excel and WINKS SDA Software (6th edition) obtained from TexaSoft, Cedar Hill were used for this purpose. Where data such as ratios between sector and total number of enterprises proved to be normally distributed, standard ANOVA analyses were used for comparisons of clusters. WINKS SDA Software (6th edition) obtained from TexaSoft, Cedar Hill was also used for this purpose.

#### **5.2 Results**

120 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

The rapid method of Toerien & Seaman (2010) was used to determine the enterprise assemblages of the selected towns. All enterprises listed in telephone directories for the different towns (Table 1) were identified and listed in spread sheets. They were then categorized into 19 major enterprise sectors that included economic drivers (including the tourism and hospitality sector) as well as service providers (Table 2). When it was impossible to deduce the nature of an enterprise from its name in the telephone directory and/or from an Internet search via Google, the entry was not used in subsequent analyses. The identified enterprises in every enterprise sector of each town were counted to develop

The clustering and ordination of enterprise assemblages of differing sizes of different towns required normalisation of the data by expressing the numbers of enterprises in each business sector as a percentage of the total number of enterprises in specific towns. The computer software package PRIMER (Plymouth Routines In Multivariate Ecological Research) obtained from PRIMER-E Ltd, Plymouth was used to examine the similarities/dissimilarities of the enterprise assemblages of the selected towns. Pearson correlation coefficients based on normalised data were calculated between each possible pairing of villages and towns, resulting in a correlation coefficient similarity matrix. The

Cluster analyses aim to find "natural groupings" of samples such that samples within a group are generally more similar to each other than samples in different groups and the results can be presented in dendrograms (Clarke & Warwick, 2001; Clarke & Gorley, 2006).

**Service Sectors** 

**Sector no. Economic Drivers** 

6 Tourism & Hospitality Sector

8 Financial Services Sector 9 Legal Services Sector

14 General Services Sector 15 Professional Services Sector 16 Personal Services Sector 17 Health Services Sector

19 Real Estate Sector

Table 2. The business sectors used in the classification of enterprises.

18 Transport & Earthworks Sector

12 Trade Sector 13 Vehicle Sector

2 Processing Sector 3 Factory Sector 4 Construction Sector 5 Mining Sector

1 Agricultural Products & Services Sector

7 Engineering & Technical Services Sector

10 Telecommunications Services Sector 11 News & Advertising Services Sector

an enterprise assemblage profile for each town.

matrix served as input to subsequent analyses.

#### **5.2.1 Cluster analysis of towns**

Eight clusters were identified in the selected towns (Figure 2). Based on their enterprise structures there are clearly definite groups of towns in semi-arid and arid South Africa. To understand which business sectors are important in determining the differences between the clusters a principal component analysis was performed.

#### **5.2.2 Principal component analysis**

The first five principal components were extracted and the eigenvectors are summarised in Table 3. The tourism and hospitality sector together with the trade sector contributed very

Enterprise Proportionalities in the Tourism Sector of South African Towns 123

Agricultural products & services 0.040 0.693 0.606 0.013 -0.232 Processing sector -0.025 0.086 -0.084 0.022 0.330 Factory sector -0.002 -0.015 -0.013 -0.027 0.015 Construction sector 0.049 -0.082 -0.161 0.033 0.001 Mining sector 0.037 -0.032 -0.030 0.006 0.221 Tourism & hospitality sector -0.894 -0.257 0.157 0.016 -0.184 Engineering & technical services 0.028 0.073 -0.102 -0.067 -0.115 Financial services 0.074 0.057 -0.253 0.400 -0.272 Legal services -0.005 -0.021 0.001 -0.016 -0.071 Telecommunication sector 0.013 0.035 0.042 0.022 0.067 News & advertising sector 0.001 -0.001 -0.007 0.003 0.002 Trade sector 0.402 -0.610 0.457 0.214 -0.277 Vehicle sector 0.019 0.217 -0.469 0.210 -0.273 General Services sector 0.052 -0.018 -0.097 0.327 0.198 Professional services sector 0.010 -0.014 0.145 -0.055 0.528 Personal services sector 0.128 -0.064 -0.173 -0.706 -0.352 Health services sector 0.081 -0.056 -0.015 -0.364 0.192 Transport & earthworks sector 0.026 -0.019 -0.060 -0.040 0.074 Real estate sector -0.035 0.028 0.060 0.010 0.148

Table 3. The eigenvectors constituting the coefficients in the linear combinations of variables

1 150.0 37.8 37.8 2 71.6 18.0 55.8 3 40.9 10.3 66.1 4 33.8 8.5 74.6 5 20.2 5.1 79.7

Table 4. Percentage variation explained by principal components 1 to 5.

**Variation explained (%)** 

**Cumulative variation explained(%)** 

making up principal components 1 to 5.

**Principal Component Eigenvalues**

**Variable PC1 PC2 PC3 PC4 PC5** 

significantly to principal component 1. The opposite signs of their vectors indicated that their influences were opposites, when the one was strong the other tended to be weak.

Principal component 1 explained 37.8 per cent of the variation (Table 4). Principal component 2 explained an additional 10.3 per cent of the variation (Table 4) and the agricultural and trade sectors were its major contributors. Their opposite signs (Table 3) also indicated that when the one was strong the other tended to be weaker. The tourism and hospitality sector and the vehicle sector were medium contributors to this principal component, and in opposite directions. Principal component 3 explained an additional 10.3 per cent of the variation (Table 4) and the agricultural products and services sector, the trade and the vehicle sectors were major contributors to this principal component (Table 3). It is clear that three business sectors, i.e. the tourism and hospitality sector, the agricultural products and services sector and the trade sector contributed by far the most to the differentiation of the towns and in ways that differed from each other (Figure 3).

#### **5.2.3 Testing for statistically significant differences between clusters**

To confirm that these sectors were indeed the main differentiators of the selected towns, further statistical tests were necessary. Kruskal-Wallis analyses and Tukey multiple comparison tests of the normalised data confirmed statistically significant differences between tourism and hospitality enterprises of different clusters (Table 5). This was also the case for the agricultural products and services sector (Table 6) and the trade sector (Table 7).

#### **75 Towns of Semi-arid and Arid South Africa** *Clustered by complete linkage*

Fig. 2. Cluster analysis of the enterprise structures of 75 towns in semi-arid and arid South Africa (town numbers are presented in Table 1).

significantly to principal component 1. The opposite signs of their vectors indicated that their influences were opposites, when the one was strong the other tended to be weak.

Principal component 1 explained 37.8 per cent of the variation (Table 4). Principal component 2 explained an additional 10.3 per cent of the variation (Table 4) and the agricultural and trade sectors were its major contributors. Their opposite signs (Table 3) also indicated that when the one was strong the other tended to be weaker. The tourism and hospitality sector and the vehicle sector were medium contributors to this principal component, and in opposite directions. Principal component 3 explained an additional 10.3 per cent of the variation (Table 4) and the agricultural products and services sector, the trade and the vehicle sectors were major contributors to this principal component (Table 3). It is clear that three business sectors, i.e. the tourism and hospitality sector, the agricultural products and services sector and the trade sector contributed by far the most to the

To confirm that these sectors were indeed the main differentiators of the selected towns, further statistical tests were necessary. Kruskal-Wallis analyses and Tukey multiple comparison tests of the normalised data confirmed statistically significant differences between tourism and hospitality enterprises of different clusters (Table 5). This was also the case for the agricultural products and services sector (Table 6) and the trade sector (Table 7).

> **75 Towns of Semi-arid and Arid South Africa** *Clustered by complete linkage*

Fig. 2. Cluster analysis of the enterprise structures of 75 towns in semi-arid and arid South

Africa (town numbers are presented in Table 1).

S39

1.0

0.8

0.6

0.4

**Correlation**

0.2

0


S24

S50

S68

S29

**1** 

S19

S49

S26

S36

S66

S15

S 3 S47

S 5 S52

S58

S21

S28

S25

S57

S14

S33

S 6

**2** 

S63

S53

S 9 S40

S 1 S75

S59

S37

S34

S74

S48

S45

S72

S69

S56

**Towns**

S41

S20

S46

S60

S73

S65

S70

S11

S12

S30

S16

S17

S42

S27

**3 4 5 6 <sup>7</sup>**

S64

S71

S31

S32

S38

S67

S13

S35

S 8 S55

S22

S 7 S51

S18

S43

S54

S 4

Resemblance: Pearson correlation

S10

S44

S62

S 2 S61

**8** 

S23

differentiation of the towns and in ways that differed from each other (Figure 3).

**5.2.3 Testing for statistically significant differences between clusters** 


Table 3. The eigenvectors constituting the coefficients in the linear combinations of variables making up principal components 1 to 5.


Table 4. Percentage variation explained by principal components 1 to 5.

Enterprise Proportionalities in the Tourism Sector of South African Towns 125

Kruskal-Wallis test: H = 16.99, χ2 = 17.0 with 6 degrees of freedom. Significant at P < 0.01 Tukey multiple comparison

Kruskal-Wallis test: H = 36.68, χ2 = 36.7 with 6 degrees of freedom. Significant at P < 0.001 Tukey multiple comparison

3 2 6 4 7 1 5

Table 6. Kruskal-Wallis analysis and Tukey multiple comparison of the agricultural products and services sectors of clusters 1 to 7. Clusters connected by a continuous line in

5 7 6 1 4 3 2

Table 7. Kruskal-Wallis analysis and Tukey multiple comparison of the trade sector of clusters 1 to 7. Clusters connected by a continuous line in the Tukey comparison do not

**5.2.4 The tourism and hospitality enterprises of semi-arid and arid South African** 

The 75 selected towns had a total of 6441 listed enterprises of which 901 (14 per cent of total) belonged to the tourism and hospitality sector (Table 8). The sector is, therefore, an important but not dominant business sector in these towns. Its importance stemmed partly

Enterprises of the accommodation/conference sub-sector numbered 601 or two-thirds of all enterprises in the tourism and hospitality trade (Table 8). The restaurant sub-sector was next most plentiful (120 enterprises). The enterprises of the 75 towns were not normally distributed; there were more smaller than larger towns. The median town had only 38 enterprises in total. The median enterprise number per town for the tourism and hospitality trade was only six, for the accommodation/conference sub-sector it was four, and for the

Because the tourism and hospitality sector is an important differentiator of the towns of semi-arid and arid South Africa, there should be significant differences between the clusters of towns identified in Figure 2. Toerien & Seaman (2012a) reported the presence of proportionalities in the enterprise structures of 125 South African towns, a phenomenon that was further examined here for the tourism and hospitality sector. Proportionality occurred in the 75 towns as shown by a significant (P < 0.01) correlation and a regression equation that explained almost 86 per cent of the variance (Figure 4). The number of tourism and

the Tukey comparison do not differ significantly at P = 0.05.

from its contribution to the differentiation of towns of the region.

restaurant sub-sector it was one enterprise (Table 8).

**5.2.4.2 Proportionality in the tourism and hospitality sector** 

**towns** 

differ significantly at P = 0.05.

**5.2.4.1 Number of enterprises** 

#### **75 Towns of Semi-arid and Arid South Africa**

**Principal Component No. 1**

Fig. 3. The contributions of the tourism and hospitality sector (V6), the agricultural products and services sector (V1) and the trade sector (V12) to the differentiation of 75 towns of semiarid and arid South Africa.

Different clusters of towns clearly depended in different ways upon the tourism and hospitality sector. However, it was not clear how that impacted precisely upon the enterprise structures of the towns. This required a more detailed examination of the tourism and hospitality sectors of the towns of semi-arid and arid South Africa. The possible presence of proportionalities in the tourism and hospitality sector of the region as well as in the clusters of towns was, therefore, investigated.


Table 5. Kruskal-Wallis analysis and Tukey multiple comparison of the tourism and hospitality sectors of clusters 1 to 7. Clusters connected by a continuous line in the Tukey comparison do not differ significantly at P = 0.05.


Table 6. Kruskal-Wallis analysis and Tukey multiple comparison of the agricultural products and services sectors of clusters 1 to 7. Clusters connected by a continuous line in the Tukey comparison do not differ significantly at P = 0.05.


Table 7. Kruskal-Wallis analysis and Tukey multiple comparison of the trade sector of clusters 1 to 7. Clusters connected by a continuous line in the Tukey comparison do not differ significantly at P = 0.05.

#### **5.2.4 The tourism and hospitality enterprises of semi-arid and arid South African towns**

#### **5.2.4.1 Number of enterprises**

124 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

**V1**

V7V8

V15 V14 V17 V16 V18

V13

**V12**

V10 V11

**75 Towns of Semi-arid and Arid South Africa**

*Principal Component Analysis*

V2

V19

V9

V3 V4 V5

Fig. 3. The contributions of the tourism and hospitality sector (V6), the agricultural products and services sector (V1) and the trade sector (V12) to the differentiation of 75 towns of semi-

**Principal Component No. 1**


Different clusters of towns clearly depended in different ways upon the tourism and hospitality sector. However, it was not clear how that impacted precisely upon the enterprise structures of the towns. This required a more detailed examination of the tourism and hospitality sectors of the towns of semi-arid and arid South Africa. The possible presence of proportionalities in the tourism and hospitality sector of the region as well as in

Kruskal-Wallis test: H = 42.25, χ2 = 42.3 with 6 degrees of freedom. Significant at P < 0.001 Tukey multiple comparison

1 5 2 3 4 6 7

Table 5. Kruskal-Wallis analysis and Tukey multiple comparison of the tourism and hospitality sectors of clusters 1 to 7. Clusters connected by a continuous line in the Tukey

arid and arid South Africa.



**Principal C**

**o**

**mponent no. 2**

0

**V6**

10

20

the clusters of towns was, therefore, investigated.

comparison do not differ significantly at P = 0.05.

The 75 selected towns had a total of 6441 listed enterprises of which 901 (14 per cent of total) belonged to the tourism and hospitality sector (Table 8). The sector is, therefore, an important but not dominant business sector in these towns. Its importance stemmed partly from its contribution to the differentiation of towns of the region.

Enterprises of the accommodation/conference sub-sector numbered 601 or two-thirds of all enterprises in the tourism and hospitality trade (Table 8). The restaurant sub-sector was next most plentiful (120 enterprises). The enterprises of the 75 towns were not normally distributed; there were more smaller than larger towns. The median town had only 38 enterprises in total. The median enterprise number per town for the tourism and hospitality trade was only six, for the accommodation/conference sub-sector it was four, and for the restaurant sub-sector it was one enterprise (Table 8).

#### **5.2.4.2 Proportionality in the tourism and hospitality sector**

Because the tourism and hospitality sector is an important differentiator of the towns of semi-arid and arid South Africa, there should be significant differences between the clusters of towns identified in Figure 2. Toerien & Seaman (2012a) reported the presence of proportionalities in the enterprise structures of 125 South African towns, a phenomenon that was further examined here for the tourism and hospitality sector. Proportionality occurred in the 75 towns as shown by a significant (P < 0.01) correlation and a regression equation that explained almost 86 per cent of the variance (Figure 4). The number of tourism and

Enterprise Proportionalities in the Tourism Sector of South African Towns 127

Regression analyses indicated that this was indeed the case (Table 9). With the exception of cluster 3 all clusters showed statistically significant correlations between the number of enterprises in the tourism and hospitality sector and the total number of enterprises and large parts of variances (> 70 per cent) were explained. Proportionality therefore also

Importantly the slopes of the regression equations varied by a factor of 7, ranging from 0.04 for cluster 1 (equivalent to four per cent of all enterprises) to 0.282 for cluster 6 (equivalent to 28.2 per cent of all enterprises)(Table 9). The 'entrepreneurial space' in all clusters for entrepreneurs in the tourism and hospitality sector is a function of the size of towns but there are marked differences in the proportion that this sector contributes to the total enterprise structures of different clusters (see slopes presented in Table 9 and Table 10). Part of the variation in the data points of Figure 4 is, therefore, due to the different contributions of the cluster regression lines to the regression line for the whole sector (Figure 5). Figure 5 illustrates two important phenomena: (i) there is proportionality of tourism and hospitality enterprises in different clusters with the total number of businesses of towns (note that this is true for clusters with a few such establishments, e.g. cluster 7, or clusters with many such establishments, e.g. cluster 2), and, (ii) there are large differences in the slopes of these regression lines, indicating that the towns of specific clusters are utilising or reacting to

1 0.90 0.040 0.15 80.3 4 0.05 2 0.95 0.117 -0.74 90.7 29 0.01 3 0.33 0.114 0.49 10.7 5 NS 4 0.97 0.175 -1.68 93.3 15 0.01 5 0.95 0.135 -0.76 90.2 4 0.01 6 0.99 0.282 -0.98 98.8 7 0.01 7 0.84 0.225 4.66 70.4 9 0.01 Table 9. Regression analyses of the number of tourism & hospitality enterprises per town (dependent variable) and the total enterprises per town (independent variable) for all

However, are the differences statistically significant? To answer this question the ratios of tourism and hospitality enterprises to total enterprises for the towns of the different clusters were calculated and examined for normality. Once it was known that the ratios were normally distributed within clusters 2, 4, 6 and 7 (the larger clusters), a one-way analysis of variance (ANOVA) was performed to test a null hypothesis that the average mean values across the different clusters were equal. This was followed by a Newman-Keuls multiple

Table 10 summarises the average ratios of the clusters. The ANOVA indicated that the averages were significantly different. The F-value of 37.49 at 56 degrees of freedom was significant at P < 0.001. The Newman-Keuls multiple comparison indicated that the ratio of cluster 7 was significantly higher than the ratios of clusters 2, 4 and 6. The ratio of cluster 6

was significantly higher than those of clusters 2 and 4 (Table 10).

**explained (%) Number Significance** 

extended to groups of towns with similar enterprise structures.

tourism opportunities in very different ways.

clusters of towns (NS = not significant).

comparison test.

**Cluster Correlation Slope Intercept Variance**

hospitality enterprises in towns was clearly related to the size of the total enterprise structures of these towns. The data points of Figure 4 showed quite a bit of scatter which raised the question whether proportionality was also present in the different clusters?


Table 8. The regional total number of tourism and hospitality enterprises in the selected towns.

Fig. 4. Proportionality in the tourism and hospitality sector of 75 semi-arid and arid South African towns.

hospitality enterprises in towns was clearly related to the size of the total enterprise structures of these towns. The data points of Figure 4 showed quite a bit of scatter which raised the question whether proportionality was also present in the different clusters?

**region** 

Total enterprises 6441 38 906 Total tourism & hospitality sector 901 6 134

establishments 601 4 72 Restaurants 120 1 27 Nature reservations/attractions 61 0 16 Tour operators 31 0 7 Roadstalls/coffee shops 29 0 4 Taverns 20 0 5 Museums 18 0 3 Information offices 8 0 1 Rental/reservation agencies 6 0 2 Catering 5 0 1 Health spa 1 0 1 Holiday club 1 0 1

Table 8. The regional total number of tourism and hospitality enterprises in the selected towns.

**y = 0.1179x + 1.8651 R² = 0.8554 r = 0.93, n = 75**

Fig. 4. Proportionality in the tourism and hospitality sector of 75 semi-arid and arid South

**Total number of businesses per town**

**Median no. per town** 

**Maximum no. per town** 

**Enterprises Total no. in** 

Accommodation & conference

African towns.

**0**

**20**

**40**

**60**

**Tourism & hospitality sector**

**(no. of businesses per town)**

**80**

**100**

**120**

**140**

Regression analyses indicated that this was indeed the case (Table 9). With the exception of cluster 3 all clusters showed statistically significant correlations between the number of enterprises in the tourism and hospitality sector and the total number of enterprises and large parts of variances (> 70 per cent) were explained. Proportionality therefore also extended to groups of towns with similar enterprise structures.

Importantly the slopes of the regression equations varied by a factor of 7, ranging from 0.04 for cluster 1 (equivalent to four per cent of all enterprises) to 0.282 for cluster 6 (equivalent to 28.2 per cent of all enterprises)(Table 9). The 'entrepreneurial space' in all clusters for entrepreneurs in the tourism and hospitality sector is a function of the size of towns but there are marked differences in the proportion that this sector contributes to the total enterprise structures of different clusters (see slopes presented in Table 9 and Table 10). Part of the variation in the data points of Figure 4 is, therefore, due to the different contributions of the cluster regression lines to the regression line for the whole sector (Figure 5). Figure 5 illustrates two important phenomena: (i) there is proportionality of tourism and hospitality enterprises in different clusters with the total number of businesses of towns (note that this is true for clusters with a few such establishments, e.g. cluster 7, or clusters with many such establishments, e.g. cluster 2), and, (ii) there are large differences in the slopes of these regression lines, indicating that the towns of specific clusters are utilising or reacting to tourism opportunities in very different ways.


Table 9. Regression analyses of the number of tourism & hospitality enterprises per town (dependent variable) and the total enterprises per town (independent variable) for all clusters of towns (NS = not significant).

However, are the differences statistically significant? To answer this question the ratios of tourism and hospitality enterprises to total enterprises for the towns of the different clusters were calculated and examined for normality. Once it was known that the ratios were normally distributed within clusters 2, 4, 6 and 7 (the larger clusters), a one-way analysis of variance (ANOVA) was performed to test a null hypothesis that the average mean values across the different clusters were equal. This was followed by a Newman-Keuls multiple comparison test.

Table 10 summarises the average ratios of the clusters. The ANOVA indicated that the averages were significantly different. The F-value of 37.49 at 56 degrees of freedom was significant at P < 0.001. The Newman-Keuls multiple comparison indicated that the ratio of cluster 7 was significantly higher than the ratios of clusters 2, 4 and 6. The ratio of cluster 6 was significantly higher than those of clusters 2 and 4 (Table 10).

Enterprise Proportionalities in the Tourism Sector of South African Towns 129

The next question was whether proportionalities also extended to sub-sectors of the tourism and hospitality sector. For this part of the investigation the two most important sub-sectors (representing 80 per cent of all enterprises in this sector [Table 8]) namely: (i) accommodation and conference establishments, and, (ii) restaurants, were investigated.

Some clusters of the accommodation/conference sub-sector exhibited significant proportionality with the total number of enterprises of towns and there were marked differences in the slopes of the regression lines (Table 11, Figure 6). Two clusters (1 and 3)

Were the differences between the ratios of the number of enterprises with accommodation/conference facilities and the total number of enterprises of the clusters of the sub-sector statistically significant? To answer this question the ratios were subjected to

The ratios of cluster 7 were significantly (P < 0.05) higher than those of clusters 1, 2 and 5 but not higher than the rest of the clusters (Table 12). The ratios of cluster 6 were significantly (P < 0.05) higher than those of cluster 1. The results suggested that the 'richness' (reflected in the ratio between sub-sector enterprises and total enterprises) of accommodation/conference facilities in clusters 6 and 7, is quite different to those of the other clusters. Calculation of average ratios for the clusters provided evidence of three tiers of 'richness' of accommodation/conference establishments: (i) below 7.5 per cent (cluster 1 and 5), (ii) ten to 16 per cent (clusters 2, 3 and 4), and (iii) above 25 per cent (clusters 6 and 7) of all enterprises per town. This suggested a progressive economic dependence of some clusters on

**Accommodation/ sub-sector Variance** 

1 0.77 0.022 0.38 60.0 4 NS

2 0.97 0.069 0.08 94.5 29 0.01

3 0.16 0.039 1.60 2.4 5 NS

4 0.96 0.113 -0.57 91.9 15 0.01

5 1.00 0.138 -1.06 99.3 4 0.01

6 0.99 0.218 -0.63 97.5 7 0.01

7 0.80 0.142 4.26 64.3 9 0.01

Table 11. Proportionality of the number of accommodation/conference establishments (dependent variable) with the total number of enterprises (independent variable) in the

**(%) No. P** 

**No. Correlation Slope Intercept explained** 

**5.2.4.3 'Proportionality-in-proportionality' in the tourism and hospitality sector** 

did not show significant proportionalities (Table 11).

accommodation and conference establishments.

**Cluster** 

clusters.

Kruskal-Wallis and Tukey non-parametric comparisons (Table 12).

Fig. 5. The regression lines of tourism and hospitality enterprises of selected clusters in relation to the regression line for the whole tourism and hospitality sector (note: all of the regression lines were statistically significant [P < 0.05]).


Table 10. The average ratios of tourism and hospitality enterprises to total enterprises of the towns of clusters 2, 4, 6 and 7 and the outcome of a Newman-Keuls comparison. Clusters linked by a continuous line are not significantly (P < 0.05) different from one another.

Fig. 5. The regression lines of tourism and hospitality enterprises of selected clusters in relation to the regression line for the whole tourism and hospitality sector (note: all of the

**Cluster 6 Cluster 4**

Averages and standard deviations Cluster Average Standard deviation No. of towns 2 0.1090 0.0442 29 4 0.1417 0.0505 15 6 0.2509 0.0546 7 7 0.3717 0.1398 9

**No. of enterprises per town**

**Cluster 2**

**Sector** 

Newman-Keuls comparison of clusters

Table 10. The average ratios of tourism and hospitality enterprises to total enterprises of the towns of clusters 2, 4, 6 and 7 and the outcome of a Newman-Keuls comparison. Clusters linked by a continuous line are not significantly (P < 0.05) different from one another.

2 4 6 7

**0**

**20**

**40**

**60**

**Tourism and hospitality enterprises**

**(number per town)**

**80**

**100**

**120**

**Cluster 7**

**140**

**160**

regression lines were statistically significant [P < 0.05]).

#### **5.2.4.3 'Proportionality-in-proportionality' in the tourism and hospitality sector**

The next question was whether proportionalities also extended to sub-sectors of the tourism and hospitality sector. For this part of the investigation the two most important sub-sectors (representing 80 per cent of all enterprises in this sector [Table 8]) namely: (i) accommodation and conference establishments, and, (ii) restaurants, were investigated.

Some clusters of the accommodation/conference sub-sector exhibited significant proportionality with the total number of enterprises of towns and there were marked differences in the slopes of the regression lines (Table 11, Figure 6). Two clusters (1 and 3) did not show significant proportionalities (Table 11).

Were the differences between the ratios of the number of enterprises with accommodation/conference facilities and the total number of enterprises of the clusters of the sub-sector statistically significant? To answer this question the ratios were subjected to Kruskal-Wallis and Tukey non-parametric comparisons (Table 12).

The ratios of cluster 7 were significantly (P < 0.05) higher than those of clusters 1, 2 and 5 but not higher than the rest of the clusters (Table 12). The ratios of cluster 6 were significantly (P < 0.05) higher than those of cluster 1. The results suggested that the 'richness' (reflected in the ratio between sub-sector enterprises and total enterprises) of accommodation/conference facilities in clusters 6 and 7, is quite different to those of the other clusters. Calculation of average ratios for the clusters provided evidence of three tiers of 'richness' of accommodation/conference establishments: (i) below 7.5 per cent (cluster 1 and 5), (ii) ten to 16 per cent (clusters 2, 3 and 4), and (iii) above 25 per cent (clusters 6 and 7) of all enterprises per town. This suggested a progressive economic dependence of some clusters on accommodation and conference establishments.


Table 11. Proportionality of the number of accommodation/conference establishments (dependent variable) with the total number of enterprises (independent variable) in the clusters.

Enterprise Proportionalities in the Tourism Sector of South African Towns 131

significant proportionalities between the number of restaurants per cluster town and the total number of enterprises per town. Clusters 2, 4 and 6, however, did have statistically significant proportionalities (Table 13). The slopes of these regression lines were very similar and not significantly different. The restaurant sub-sector behaved quite differently from the

**Restaurant sub-sector Variance** 

**No. Correlation Slope Intercept** 

**(%) N P Cluster** 

Table 13. Proportionality of the number of restaurants (dependent variable) with the total

Taken together the analyses (Tables 5 to 13, Figures 4 to 6) present a picture of the different economic strategies that have developed by design or chance in towns of semi-arid and arid South Africa (Table 14). The towns of clusters 6 and 7 are strong in the tourism and hospitality sector, including the accommodation sub-sector, but weak in the trade sector (Table 14). Hereafter we refer to these towns as 'tourist towns'. However, the presence of two town clusters within the 'tourist town' group indicated that a further division should be made.

The composition of the towns of cluster 6 (Brandvlei, Britstown, Colesberg, Hanover, Laingsburg, Richmond and Vanderkloof) includes towns not known as tourist destinations but which are located on national roads or routes between the south and the north of the country. The strong tourism and hospitality sector (Table 10) and particularly the strong accommodation sub-sector (Tables 11 and 12) of this cluster, suggests that the provision of overnight accommodation to travellers is probably the main tourism focus of these towns.

The towns of cluster 7 were very strong in the tourism and hospitality sector (Table 10). These towns (Augrabies, Barrydale, Calitzdorp, Gariepdam, Nieu-Bethesda, Nieuwoudtville, Philippolis, Prince Albert, and Sutherland) serve a different niche market than the 'tourist overnight towns'; they are are known as weekend and tourist destinations.

The outstanding feature of the towns of cluster 5 is a strong agricultural products and services sector (Table 14). The towns are weak in the tourism and trade sector (Table 5). The cluster includes the towns of Kenhardt, Klipplaat, Loxton and Vosburg, all except Klipplaat being small distant towns of the Great Karoo. Klipplaat is an old railway town in the Eastern Cape which has regressed in step with the demise of steam trains. These

number of enterprises (independent variable) in the respective clusters.

They are here referred to as the 'tourist overnight towns'.

They are here referred to as 'tourist destination towns'.

1 0.0 0.0 0.0 0.0 4 NS 2 0.90 0.021 -0.51 80.5 29 0.01 3 0.73 0.045 -0.95 52.8 5 NS 4 0.81 0.028 -0.41 64.9 15 0.01 5 0.0 0.000 0.00 0.0 4 NS 6 0.94 0.022 -0.15 87.8 7 0.01 7 0.56 0.035 -0.30 31.2 9 NS

**explained** 

accommodation/conference sub-sector.

**5.2.4.4 Overview of results** 


Table 12. Results of Kruskal-Wallis and Tukey multiple comparisons of the ratios between enterprises with accommodation/conference facilities and the total number of enterprises of clusters 1 to 7. Clusters connected by a continuous line in the Tukey comparisons do not differ significantly at P = 0.05.

The accommodation and conference sub-sector also demonstrated the two important phenomena noted for the whole tourism end hospitality sector as a whole, namely: (i) for some clusters there was a proportionality with the total number of enterprises in the towns (or in other words 'proportionality-in-proportionality'), and (ii) the slopes of regression equations differed markedly between clusters, indicating quite different 'richness' patterns (Figure 6, Table 13). Four clusters, i.e. clusters 1, 3, 5 and 7 did not have statistically

Fig. 6. The regression lines of accommodation and conference enterprises of selected clusters in relation to the regression line for the whole tourism and hospitality sector (note: all of the regression lines were statistically significant (P < 0.05).

significant proportionalities between the number of restaurants per cluster town and the total number of enterprises per town. Clusters 2, 4 and 6, however, did have statistically significant proportionalities (Table 13). The slopes of these regression lines were very similar and not significantly different. The restaurant sub-sector behaved quite differently from the accommodation/conference sub-sector.


Table 13. Proportionality of the number of restaurants (dependent variable) with the total number of enterprises (independent variable) in the respective clusters.

#### **5.2.4.4 Overview of results**

130 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Kruskal-Wallis test: H = 38.58, χ2 = 38.6 with 6 degrees of freedom. Significant at P < 0.001 Tukey multiple comparison

Table 12. Results of Kruskal-Wallis and Tukey multiple comparisons of the ratios between enterprises with accommodation/conference facilities and the total number of enterprises of clusters 1 to 7. Clusters connected by a continuous line in the Tukey comparisons do not

The accommodation and conference sub-sector also demonstrated the two important phenomena noted for the whole tourism end hospitality sector as a whole, namely: (i) for some clusters there was a proportionality with the total number of enterprises in the towns (or in other words 'proportionality-in-proportionality'), and (ii) the slopes of regression equations differed markedly between clusters, indicating quite different 'richness' patterns (Figure 6, Table 13). Four clusters, i.e. clusters 1, 3, 5 and 7 did not have statistically

Fig. 6. The regression lines of accommodation and conference enterprises of selected clusters in relation to the regression line for the whole tourism and hospitality sector (note: all of the

regression lines were statistically significant (P < 0.05).

1 5 2 3 4 6 7

differ significantly at P = 0.05.

Taken together the analyses (Tables 5 to 13, Figures 4 to 6) present a picture of the different economic strategies that have developed by design or chance in towns of semi-arid and arid South Africa (Table 14). The towns of clusters 6 and 7 are strong in the tourism and hospitality sector, including the accommodation sub-sector, but weak in the trade sector (Table 14). Hereafter we refer to these towns as 'tourist towns'. However, the presence of two town clusters within the 'tourist town' group indicated that a further division should be made.

The composition of the towns of cluster 6 (Brandvlei, Britstown, Colesberg, Hanover, Laingsburg, Richmond and Vanderkloof) includes towns not known as tourist destinations but which are located on national roads or routes between the south and the north of the country. The strong tourism and hospitality sector (Table 10) and particularly the strong accommodation sub-sector (Tables 11 and 12) of this cluster, suggests that the provision of overnight accommodation to travellers is probably the main tourism focus of these towns. They are here referred to as the 'tourist overnight towns'.

The towns of cluster 7 were very strong in the tourism and hospitality sector (Table 10). These towns (Augrabies, Barrydale, Calitzdorp, Gariepdam, Nieu-Bethesda, Nieuwoudtville, Philippolis, Prince Albert, and Sutherland) serve a different niche market than the 'tourist overnight towns'; they are are known as weekend and tourist destinations. They are here referred to as 'tourist destination towns'.

The outstanding feature of the towns of cluster 5 is a strong agricultural products and services sector (Table 14). The towns are weak in the tourism and trade sector (Table 5). The cluster includes the towns of Kenhardt, Klipplaat, Loxton and Vosburg, all except Klipplaat being small distant towns of the Great Karoo. Klipplaat is an old railway town in the Eastern Cape which has regressed in step with the demise of steam trains. These

Enterprise Proportionalities in the Tourism Sector of South African Towns 133

The only cluster without outstanding business strengths or weaknesses in any sector is cluster 4 (Table 5, 6 and 7) indicating balanced local economies. The towns of this sector (Carnarvon, Calvinia, Fauresmith, Fraserburg, Graaff-Reinet, Jansenville, Keimoes, Montagu, Murraysburg, Orania, Pofadder, Steytlerville, Trompsburg, Uniondale, Victoria West) are a mixture of small and large towns (Table 1) of largely agricultural origin. Some of these towns e.g. Graaff-Reinet and Montagu have significant numbers of tourism and hospitality enterprises; however, the remainder of their economies is also well-developed without any sector dominating. Hereafter these towns are referred to as 'balanced towns'. These towns also serve as a reminder that the economic choices between tourism and other

The towns of clusters 1, 3 and 8 are all small and more defined by business weaknesses than strengths. Cluster 1 towns (Luckhoff, Hopetown, Petrusville and Van Wyksvlei) had on average about 28 enterprises (Table 14), were weak in the tourism sector and had no strengths in any other business sector. Cluster 3 towns (Noupoort, Pearston, Smithfield, Venterstad and Williston) had on average about 26 enterprises (Table 14) and were weak in the agricultural sector. Cluster 8 contained only two towns (Strydenburg and Hofmeyr) with on average 17 enterprises and was too small to include in analyses of strengths and weaknesses. However, its closest neighbours belonged to the two tourism clusters (clusters 6 and 7, Figure 2), suggesting that its towns could potentially develop stronger tourism-based economies. Other equally small towns such as Nieu-Bethesda have

The promotion of tourism has been identified as a key strategy that can lead to economic upliftment, community development and poverty relief in the developing world (Binns & Nel, 2002). As evidenced by the topics discussed at a conference on tourism in the Karoo (Karoo Development Foundation, 2009) tourism is actively promoted as an

The conference covered a wide range of topics that included considerations of tourism assets (Maguire, 2009). Viljoen (2009) discussed tourist routes in the Karoo and Rademeyer (2009) reviewed adventure tourism, Davids (2009) literary tourism and Rubidge (2009) fossil tourism in the Karoo. Rubushe (2009) discussed funding for the preservation of Karoo heritage whilst Ingle (2009) considered the link between the Karoo and space tourism. However, the tourism enterprises and their relation to other enterprises in the towns of the area received scant attention, yet they constitute the link between the supply-side and the

This study focused on the tourism and hospitality enterprises of semi-arid and arid South Africa and used principal component analysis and clustering to reveal eight clusters of towns (Figure 2). Principal component analysis has been used to reveal clusters of towns based on tourism-related characteristics, e.g. tourism marketing in Romania (Kulcsár, 2010). Toerien & Seaman (2010) also reported the presence of a number of clusters of Karoo towns. Understanding the strengths and weaknesses of different clusters could assist in the formulation of better tourism-based strategies for local economic

additional/alternative economic activity for semi-arid and arid South Africa.

demand-side of the tourism industry of the region.

development in South Africa.

business sectors are not based on either the one or the other.

managed to do just that.

**6. Discussion** 

towns clearly have significant interactions with their agricultural hinterlands and hence they are referred to as 'agricultural towns'.

The towns of cluster 2 (Aberdeen, Alexander Bay, Barkly-West, Beaufort-West, Bethulie, Burgersdorp, Cradock, De Aar, Garies, Griekwastad, Jacobsdal, Jagersfontein, Kakamas, Kathu, Koffiefontein, Ladismith, Lime Acres, Loeriesfontein, Middelburg, Oudtshoorn, Pella, Philipstown, Prieska, Somerset East, Springfontein, Steynsburg, Tarkastad, Upington and Willowmore) are a mixture of small and large towns (Table 1) and have different origins, particularly agricultural and mining origins. The outstanding features of their enterprise structures were relatively weak tourism sectors and strong trade sectors (Tables 7, 10 and 14). They are also relatively weak in their agricultural products and services sector (Table 6).

Hereafter they are referred to as 'trader towns'. It is interesting that Oudtshoorn, one of the largest towns in the study area and known for its tourism industry linked to the Kango Caves and the R62 tourist route (Erasmus, 2004) belongs to this cluster. However, it illustrates the extent to which this town has also grown the other parts of its economy and acts as a trading hub to the surrounding area. This serves as a reminder that the economic choices between the tourism and other business sectors are not based on either 'the one or the other', but balanced growth should be pursued.


Table 14. An overview of the strengths and weaknesses and proportionalities of the different clusters (P = the presence of proportionality and NI = not included in comparison).

The only cluster without outstanding business strengths or weaknesses in any sector is cluster 4 (Table 5, 6 and 7) indicating balanced local economies. The towns of this sector (Carnarvon, Calvinia, Fauresmith, Fraserburg, Graaff-Reinet, Jansenville, Keimoes, Montagu, Murraysburg, Orania, Pofadder, Steytlerville, Trompsburg, Uniondale, Victoria West) are a mixture of small and large towns (Table 1) of largely agricultural origin. Some of these towns e.g. Graaff-Reinet and Montagu have significant numbers of tourism and hospitality enterprises; however, the remainder of their economies is also well-developed without any sector dominating. Hereafter these towns are referred to as 'balanced towns'. These towns also serve as a reminder that the economic choices between tourism and other business sectors are not based on either the one or the other.

The towns of clusters 1, 3 and 8 are all small and more defined by business weaknesses than strengths. Cluster 1 towns (Luckhoff, Hopetown, Petrusville and Van Wyksvlei) had on average about 28 enterprises (Table 14), were weak in the tourism sector and had no strengths in any other business sector. Cluster 3 towns (Noupoort, Pearston, Smithfield, Venterstad and Williston) had on average about 26 enterprises (Table 14) and were weak in the agricultural sector. Cluster 8 contained only two towns (Strydenburg and Hofmeyr) with on average 17 enterprises and was too small to include in analyses of strengths and weaknesses. However, its closest neighbours belonged to the two tourism clusters (clusters 6 and 7, Figure 2), suggesting that its towns could potentially develop stronger tourism-based economies. Other equally small towns such as Nieu-Bethesda have managed to do just that.

#### **6. Discussion**

132 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

towns clearly have significant interactions with their agricultural hinterlands and hence

The towns of cluster 2 (Aberdeen, Alexander Bay, Barkly-West, Beaufort-West, Bethulie, Burgersdorp, Cradock, De Aar, Garies, Griekwastad, Jacobsdal, Jagersfontein, Kakamas, Kathu, Koffiefontein, Ladismith, Lime Acres, Loeriesfontein, Middelburg, Oudtshoorn, Pella, Philipstown, Prieska, Somerset East, Springfontein, Steynsburg, Tarkastad, Upington and Willowmore) are a mixture of small and large towns (Table 1) and have different origins, particularly agricultural and mining origins. The outstanding features of their enterprise structures were relatively weak tourism sectors and strong trade sectors (Tables 7, 10 and 14). They are also relatively weak in their agricultural products and

Hereafter they are referred to as 'trader towns'. It is interesting that Oudtshoorn, one of the largest towns in the study area and known for its tourism industry linked to the Kango Caves and the R62 tourist route (Erasmus, 2004) belongs to this cluster. However, it illustrates the extent to which this town has also grown the other parts of its economy and acts as a trading hub to the surrounding area. This serves as a reminder that the economic choices between the tourism and other business sectors are not based on either 'the one or

**Characteristic 1 2 3 4 5 6 7 8** 

No. of towns 4 29 5 15 4 7 9 2

enterprises/town 27.8 145.6 25.6 79.7 16.7 45.6 40.4 17.0

differences Highest Lowest NI

Tourism sector Weak Weak Strong Strong NI

sector Weak Weak Weak Strong Strong NI Restaurant sub-sector No significant differences NI

Products & Services Weak Weak Strong NI Trade sector Strong Weak Weak Weak NI

Tourism sector P P P P P P NI

sub-sector P P P P P NI Restaurant sub-sector P P P NI Table 14. An overview of the strengths and weaknesses and proportionalities of the different

clusters (P = the presence of proportionality and NI = not included in comparison).

they are referred to as 'agricultural towns'.

the other', but balanced growth should be pursued.

**Cluster** 

services sector (Table 6).

**Numbers** 

Significant

**weaknesses** 

Agricultural

**Proportionalities (vs total enterprises)** 

Accommodation

Average no. of

**Sector strengths and** 

Accommodation sub-

The promotion of tourism has been identified as a key strategy that can lead to economic upliftment, community development and poverty relief in the developing world (Binns & Nel, 2002). As evidenced by the topics discussed at a conference on tourism in the Karoo (Karoo Development Foundation, 2009) tourism is actively promoted as an additional/alternative economic activity for semi-arid and arid South Africa.

The conference covered a wide range of topics that included considerations of tourism assets (Maguire, 2009). Viljoen (2009) discussed tourist routes in the Karoo and Rademeyer (2009) reviewed adventure tourism, Davids (2009) literary tourism and Rubidge (2009) fossil tourism in the Karoo. Rubushe (2009) discussed funding for the preservation of Karoo heritage whilst Ingle (2009) considered the link between the Karoo and space tourism. However, the tourism enterprises and their relation to other enterprises in the towns of the area received scant attention, yet they constitute the link between the supply-side and the demand-side of the tourism industry of the region.

This study focused on the tourism and hospitality enterprises of semi-arid and arid South Africa and used principal component analysis and clustering to reveal eight clusters of towns (Figure 2). Principal component analysis has been used to reveal clusters of towns based on tourism-related characteristics, e.g. tourism marketing in Romania (Kulcsár, 2010). Toerien & Seaman (2010) also reported the presence of a number of clusters of Karoo towns. Understanding the strengths and weaknesses of different clusters could assist in the formulation of better tourism-based strategies for local economic development in South Africa.

Enterprise Proportionalities in the Tourism Sector of South African Towns 135

Taken together it is clear that the challenges for the promoters of the South African tourism industry in general but for semi-arid and arid South Africa in particular, are formidable. Atkinson (2009) stated that: "In South Africa little has be done to 'package' and market the many small towns in the rural hinterland. It has always been up to the private sector to develop these tourism products, and due to the difference in economic skills throughout the country there has been a divergence between those towns that 'got it right' and those 'where nothing happens'. In the Karoo, for example, towns such as Prince Albert, Graaff-Reinet and Victoria West are maximising the benefits of their architectural heritage, whereas towns like Loxton and Aberdeen, with fewer entrepreneurial resources, are being left behind". This study has added important additional information about the tourism sector in semi-arid and arid South Africa, which could be used in helping the towns that have been left behind to

Principal component analysis and clustering techniques were very useful and revealed the presence of eight clusters of towns in semi-arid and arid South Africa. The tourism sector has become important in many of these towns; however, the extent to which they are able to

Balanced towns appear to represent the ideal and have built well-developed enterprise structures in all business sectors, thereby reducing the risk of sudden economic shocks. In these towns tourism is important but is matched by other important business sectors. Tourism destination towns with a very high relative number of tourism-based enterprises might have exposed themselves to potential shocks if factors that entice tourist visits diminish in importance as exhibited by Dullstroom and Clarens (Centre for Development Support, 2010). Tourism overnight towns, mostly located on major national roads are dependent on external factors that regulate the flow of visitors from the south to the north or vice versa. They can do little to grow their tourism-based economies unless they move to become more like destination towns. Trading towns and agricultural towns are not very dependent on tourism and their growth opportunities seem to reside in becoming more like

More analyses of this kind are needed to develop a fuller understanding of tourism-based

The Centre for Development Support and the University of the Free State provided financial assistance for this study. Frank Sokolic was responsible for the map of the study area.

Atkinson, D. (2009). The 2010 World Cup and the rural hinterland: Maximising advantage

from mega-events. In: Pillay, U., Tomlinson, R. & Bass, O. (eds) *Development and Dreams: The Urban Legacy of the 2010 Football World Cup*. HSRC Press, ISBN 13: 978-

Annamarie du Preez provided library support and Marie Toerien analytical support.

move ahead.

**7. Conclusions** 

the balanced towns.

**9. References** 

**8. Acknowledgements** 

opportunities for South African towns.

07969-2250-2, Cape Town.

utilise tourism-based opportunities differed.

The number of tourism and hospitality enterprises per town was almost always proportional to the size of the total enterprise structures of towns but the ratio of such businesses to all businesses was determined by the type of cluster to which a town belonged (Table 14). In summary: 'tourism destination towns' have relatively more enterprises in this sector than 'tourism overnight towns', which are stronger than 'balanced towns', which are stronger than 'trading towns', which are stronger than 'agricultural towns'.

This study has also demonstrated a proportionality-in-proportionality phenomenon, something that has not been reported before. For some town clusters there is not just proportionality between the number of tourism enterprises and the total number of enterprises in towns of the cluster, but also between components of the cluster such as the number of accommodation/conference establishments and the total number of enterprises. Interestingly this phenomenon was strong in the accommodation/conference sub-sector but less so for the restaurant sub-sector of some clusters (Table 14).

How should the proportionality phenomena be interpreted? Any answer must deal with two issues: (i) the larger a town the more tourism and hospitality enterprise will be present, and (ii) what is the nature of a town, i.e. is it an agricultural, trading, balanced, overnight or destination town? Both issues seem to deal with the magnitude of 'entrepreneurial space' available for the development of tourism and hospitality enterprises. In other words, according to the nature of a town and its total business sector, there is a limited opportunity (or 'entrepreneurial space') for the establishment of tourism-based enterprises and this space is usually well occupied because if this was not the case, proportionalities would not have been observed.

In the case of the tourism and hospitality sector the entrepreneurial space is probably defined by the amount of money that tourists (mostly from elsewhere) are spending in a town. In addition, this study suggests that the reasons why tourists use the facilities of a town also matter. For example, towns of a particular size that attract mostly overnight tourists can expect to have a lower proportion of enterprises in this sector than similarly sized towns that are weekend destinations. The proportionalities should be considered in plans to build the tourism-based economies of towns of semi-arid and arid South Africa because the systemic nature of the industry as outlined above means that merely wishing for increased tourism will not achieve the desired results.

A number of additional factors must also be taken into account. The Centre for Development Support (2010) identified a number of risks for small South African towns dependent on tourism. Firstly, small attractive towns may lose their smallness and natural beauty as a result of rapid development and over-commercialisation. Secondly, deterioration in the condition of access routes lead to a decrease in visitors. Thirdly, tourists are large consumers of basic services and if towns develop capacity or other constraints in meeting these needs in peak periods, tourism is adversely affected. Fourthly if the quality of the service experienced by tourists fluctuates or deteriorates it either scares off tourists or attracts large national and international tourism enterprises to become part of the local tourism scene, to the detriment of local enterprises. Fifthly, although tourism is often associated with positive local development, international experience has shown that this is not invariably the case and that special efforts should be made to ensure that benefits also accrue to the more marginalised communities.

Taken together it is clear that the challenges for the promoters of the South African tourism industry in general but for semi-arid and arid South Africa in particular, are formidable. Atkinson (2009) stated that: "In South Africa little has be done to 'package' and market the many small towns in the rural hinterland. It has always been up to the private sector to develop these tourism products, and due to the difference in economic skills throughout the country there has been a divergence between those towns that 'got it right' and those 'where nothing happens'. In the Karoo, for example, towns such as Prince Albert, Graaff-Reinet and Victoria West are maximising the benefits of their architectural heritage, whereas towns like Loxton and Aberdeen, with fewer entrepreneurial resources, are being left behind". This study has added important additional information about the tourism sector in semi-arid and arid South Africa, which could be used in helping the towns that have been left behind to move ahead.

#### **7. Conclusions**

134 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

The number of tourism and hospitality enterprises per town was almost always proportional to the size of the total enterprise structures of towns but the ratio of such businesses to all businesses was determined by the type of cluster to which a town belonged (Table 14). In summary: 'tourism destination towns' have relatively more enterprises in this sector than 'tourism overnight towns', which are stronger than 'balanced towns', which are

This study has also demonstrated a proportionality-in-proportionality phenomenon, something that has not been reported before. For some town clusters there is not just proportionality between the number of tourism enterprises and the total number of enterprises in towns of the cluster, but also between components of the cluster such as the number of accommodation/conference establishments and the total number of enterprises. Interestingly this phenomenon was strong in the accommodation/conference sub-sector but

How should the proportionality phenomena be interpreted? Any answer must deal with two issues: (i) the larger a town the more tourism and hospitality enterprise will be present, and (ii) what is the nature of a town, i.e. is it an agricultural, trading, balanced, overnight or destination town? Both issues seem to deal with the magnitude of 'entrepreneurial space' available for the development of tourism and hospitality enterprises. In other words, according to the nature of a town and its total business sector, there is a limited opportunity (or 'entrepreneurial space') for the establishment of tourism-based enterprises and this space is usually well occupied because if this was not the case, proportionalities would not have

In the case of the tourism and hospitality sector the entrepreneurial space is probably defined by the amount of money that tourists (mostly from elsewhere) are spending in a town. In addition, this study suggests that the reasons why tourists use the facilities of a town also matter. For example, towns of a particular size that attract mostly overnight tourists can expect to have a lower proportion of enterprises in this sector than similarly sized towns that are weekend destinations. The proportionalities should be considered in plans to build the tourism-based economies of towns of semi-arid and arid South Africa because the systemic nature of the industry as outlined above means that merely wishing

A number of additional factors must also be taken into account. The Centre for Development Support (2010) identified a number of risks for small South African towns dependent on tourism. Firstly, small attractive towns may lose their smallness and natural beauty as a result of rapid development and over-commercialisation. Secondly, deterioration in the condition of access routes lead to a decrease in visitors. Thirdly, tourists are large consumers of basic services and if towns develop capacity or other constraints in meeting these needs in peak periods, tourism is adversely affected. Fourthly if the quality of the service experienced by tourists fluctuates or deteriorates it either scares off tourists or attracts large national and international tourism enterprises to become part of the local tourism scene, to the detriment of local enterprises. Fifthly, although tourism is often associated with positive local development, international experience has shown that this is not invariably the case and that special efforts should be made to ensure that benefits also

stronger than 'trading towns', which are stronger than 'agricultural towns'.

less so for the restaurant sub-sector of some clusters (Table 14).

for increased tourism will not achieve the desired results.

accrue to the more marginalised communities.

been observed.

Principal component analysis and clustering techniques were very useful and revealed the presence of eight clusters of towns in semi-arid and arid South Africa. The tourism sector has become important in many of these towns; however, the extent to which they are able to utilise tourism-based opportunities differed.

Balanced towns appear to represent the ideal and have built well-developed enterprise structures in all business sectors, thereby reducing the risk of sudden economic shocks. In these towns tourism is important but is matched by other important business sectors. Tourism destination towns with a very high relative number of tourism-based enterprises might have exposed themselves to potential shocks if factors that entice tourist visits diminish in importance as exhibited by Dullstroom and Clarens (Centre for Development Support, 2010). Tourism overnight towns, mostly located on major national roads are dependent on external factors that regulate the flow of visitors from the south to the north or vice versa. They can do little to grow their tourism-based economies unless they move to become more like destination towns. Trading towns and agricultural towns are not very dependent on tourism and their growth opportunities seem to reside in becoming more like the balanced towns.

More analyses of this kind are needed to develop a fuller understanding of tourism-based opportunities for South African towns.

#### **8. Acknowledgements**

The Centre for Development Support and the University of the Free State provided financial assistance for this study. Frank Sokolic was responsible for the map of the study area. Annamarie du Preez provided library support and Marie Toerien analytical support.

#### **9. References**

Atkinson, D. (2009). The 2010 World Cup and the rural hinterland: Maximising advantage from mega-events. In: Pillay, U., Tomlinson, R. & Bass, O. (eds) *Development and Dreams: The Urban Legacy of the 2010 Football World Cup*. HSRC Press, ISBN 13: 978- 07969-2250-2, Cape Town.

Enterprise Proportionalities in the Tourism Sector of South African Towns 137

Kulcsár, E. (2010) Principal component analysis in tourism marketing. *Management &* 

MacArthur, R.R.H. & Wilson, E.O. (1967) *The Theory of Island Biography*, Princeton University

Maguire, J. (2009) Tourism and the heritage assets of the Karoo outback. Presented at The Karoo Development Conference and Trade Fair, Graaff-Reinet, 27 March 2009. Milton, S.J & Dean, W.R.J. (2010) The basis for sustainable business in the Karoo: Bringing

Nel E.L. & Hill T.R. (2008) Marginalisation and demographic change in the semi-arid Karoo, South Africa. *Journal of Arid Environments,* Vol. 72, No. 12, 2264-2274. Rademeyer, C. (2009) Adventure tourism in the Karoo. Presented at *Interprovincial Conference* 

Rubidge, B. (2009) Fossil tourism in the Karoo. Presented at *Interprovincial Conference on* 

Rubushe, S. (2009) Funding to preserve Karoo Heritage. Presented at *Interprovincial* 

SouthAfrica.info (2011) South Africa's tourism industry. Accessed at http://www.south

South African Government (2011). *Tourism.* Accessed at http://www.info. gov.za/aboutsa/

Tansley, A.G. (1935) The use and abuse of vegetational concepts and terms. *Ecology* Vol. 16,

Toerien, D. & Marais, L. (2012) Classification of South African towns revisited. In: *Small* 

Toerien D.F. & Seaman M.T. (2010) The enterprise ecology of towns in the Karoo, South

Toerien D.F. & Seaman M.T. (2011) Ecology, water and enterprise development in selected

Toerien D.F. & Seaman M.T. (2012a) Proportionality in enterprise development of South

Toerien D.F. & Seaman M.T. (2012b) Evidence of island effects in South African enterprise ecosystems, In: *Ecosystems,* Ed. Mahamane A., InTech, Rijeka, (in press). Tremblay, P. (2006) *Desert Tourism Scoping Study.* Report 12 of Charles Darwin University in

Viljoen, F. (2009) Developing routes in the Karoo: What have we learnt about route

conjunction with Curtin University for Desert Knowledge Cooperative Research

marketing? Presented at *Interprovincial Conference on Creative Tourism in the Karoo: Western Cape, Northern Cape, Eastern Cape and Free State*. 5-6 November 2009, De Stijl

*State*. 5-6 November 2009, De Stijl Hotel, Gariep Dam.

*State*. 5-6 November 2009, De Stijl Hotel, Gariep Dam.

*and Free State*. 5-6 November 2009, De Stijl Hotel, Gariep Dam.

Africa. *South African Journal of Science,* Vol 106, No. 1, 24–33.

rural South African towns, *Water SA* Vol. 37, No. 1, 47-56.

African towns. *South African Journal of Science* (accepted).

ecological and economic issues together. *Journal of Development Support* Vol. 2, No.

*on Creative Tourism in the Karoo: Western Cape, Northern Cape, Eastern Cape and Free* 

*Creative Tourism in the Karoo: Western Cape, Northern Cape, Eastern Cape and Free* 

*Conference on Creative Tourism in the Karoo: Western Cape, Northern Cape, Eastern Cape* 

africa.info/ business/economy/sectors/tourism-overview.htm on August 20, 2011.

*Town Geographies in Africa,* in press, Ed. Donaldson, R. & Marais, L., Nova Science

*Marketing* (2010) Vol. 5, No. 2, 151-158.

Press, ISBN 0-691-08836-5, Princeton.

tourism.htm on 20 August 2011.

Publishers, Hauppage, N.Y.

Centre, Alice Springs.

Hotel, Gariep Dam.

No. 3, 284-307.

1, 58-66.


Atkinson, D. (2010) Improving lives, creating opportunities. Presented at the *Heritage in* 

Beinhocker, E.D. (2006) *The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics.* Harvard Business School Press, ISBN 1-57851-777-X, Boston. Boonzaaier, E., Malherbe, C., Smith, A. & Berens, P. (1996) *The Cape Herders: A History of the Khoikhoi in Southern Africa,* David Philip, ISBN 0 86486 311 X, Cape Town. Binns, T. & Nel, E. (2002) Tourism as a local development strategy in South Africa. *The* 

Burrows, E.H. (1994) *Overberg Outspan: A Chronicle of People and Places in the South Western* 

Centre for Development Support (2010). Small Town Tourism Development Risks: Lessons

Clarke K.R. & Gorley R.N. (2006). *PRIMER v6: User Manual/Tutorial*, PRIMER-E Ltd,

Clarke K.R. & Warwick R.M. (2001). *Change in Marine Communities: An Approach to Statistical Analysis and Interpretation*, 2nd ed. PRIMER-E Ltd, Plymouth, United Kingdom Cowling, R. M. 1986. *A Description of the Karoo Biome Project*. South African National

Davids, D. (2009) Literary tourism in the Karoo, Presented at *Interprovincial Conference on* 

Deacon, H.J. & Deacon, J. (2003) *Human Beginnings in South Africa.* David Philip, ISBN-10:

Elphick, R. (1979). The Khoisan to c. 1770. In: *The Shaping of South African Society, 1652 – 1820.*

Erasmus B.P.J. (2004) *Op Pad in Suid-Afrika* (in Afrikaans). 2nd ed., Jonathan Ball, ISBN

Fransen, H. (2006) *Old Towns and Villages of the Cape: A Survey of the Origin and Development of* 

Giliomee, H. & Mbenga, B. (2007) *New History of South Africa.* Tafelberg, ISBN-13: 978 0 624

Guelke, L. (1979) The white settlers, 1652 – 1780, In: *The Shaping of South African Society, 1652* 

Ingle, M. (2009) Ending off with a blast-off: Space tourism in the Karoo. Presented at

from Clarens and Dullstroom. *CDS Policy Lekgotla* No. 3, pp. 1-4.

*State*. 5-6 November 2009, De Stijl Hotel, Gariep Dam.

*Districts of the Cape,* Facsimile Edition*,* Swellendam Trust, ISBN 0 620 12930 1,

Scientific Programmes Report No. 122, Foundation for Research Development,

*Creative Tourism in the Karoo: Western Cape, Northern Cape, Eastern Cape and Free* 

Ed. by R. Elphick & H. Giliomee, pp. 3 – 33, Maskew Miller, ISBN 0 636 00516 X,

*Towns, Villages and Hamlet sat the Cape of Good Hope,* Jonathan Ball Publishers, ISBN

*– 1820.* Ed. by R. Elphick & H. Giliomee, Maskew Miller, ISBN 0 636 00516 X, Cape

*Interprovincial Conference on Creative Tourism in the Karoo: Western Cape, Northern Cape, Eastern Cape and Free State*. 5-6 November 2009, De Stijl Hotel, Gariep Dam. Karoo Development Foundation (2009) *Programme of Interprovincial Conference on Creative* 

*Tourism in the Karoo: Western Cape, Northern Cape, Eastern Cape and Free State*. 5-6

*Geographical Journal* Vol. 168, No.3 , 235–247

Swellendam.

Plymouth, United Kingdom.

ISBN 0 7988 3803 5, Pretoria.

0761990860, Claremont.

186842149X, Jeppetown.

04358 4, Cape Town.

1 86842 227 5, Johannesburg.

November 2009, De Stijl Hotel, Gariep Dam.

Cape Town.

Town.

*Sustainable Development Conference*, 8 & 9 October, 2010, Heritage SA, Graaff-Reinet.


**7** 

*University of Vigo,* 

*Spain* 

**New Opportunities for the Tourism Market:** 

When speaking of trends, people tend to relatives arguments due to their fragile demonstrability. To prepare this chapter, we began with two objectives: first, to analyse trends in the tourism sector and their evolution, and secondly, in juxtaposition, to examine tourism trends from a socio-demographic perspective. Our goal is to deepen our understanding of two types of tourism that are both future trends in the tourism sector, namely, senior tourism and accessible tourism. This paper does not seek to review market niches or narrow market segments, but rather the opening of new tourism segments based on the synergies that can be generated between these segments based on both the potential and real needs of tourists. Accessibility is established as the key link, as older people and people with temporarily or permanently restricted capacities are the direct beneficiaries of accessibility. Indeed, accessibility is considered to be a parameter of quality and usability for tourist attractions and is, therefore, a key determinant of user satisfaction and loyalty. Also, we must not forget that disability is often directly related to the elderly and that, "with increasing age, disability or

Although these segments of tourism have not been very important in the past, their importance is now growing and they have been established as priorities in policy lines of action. For instance, in 2009, the European Commission launched the Calypso 27 project (aligned with the objectives of social tourism), arguing that by increasing the accessibility of disadvantaged populations to tourism, social tourism contributes to achieving the key objectives of the Lisbon Strategy, particularly in terms of economic development and employment. This project has four target groups: senior citizens and retirees, youths, the disabled and families with difficulties (e.g., social, financial). It intends "to correct social inequalities among the population, as these exclude many from tourism and travel, and ensure universal access to vacations, while aiming to generate economic activity and growth in Europe, combat seasonality in tourism, create more and better jobs in the tourism sector

Borja *et al.* (2002) have shown that the segment of adults over 55 years of age will increase the overall volume of tourism the most; these adults are characterised by extensive experience in tourism, making them more demanding consumers and allowing demand to shift away from peak seasons because this is a segment of the population that is often retired. This segment is augmented by disabled people, with whom senior citizens share

restricted capacities also increase in a gradual way" (Burnett, 1996:7).

and strengthen the ties among European citizens."

**1. Introduction** 

**Senior Tourism and Accessible Tourism** 

Elisa Alén, Trinidad Domínguez and Nieves Losada


### **New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism**

Elisa Alén, Trinidad Domínguez and Nieves Losada *University of Vigo, Spain* 

#### **1. Introduction**

138 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Weaver, D.B. (2001) Deserts, grasslands and savannahs. Ed. Weaver, D.B., *The Encyclopaedia* 

Wickins P.L. (1983) Agriculture. In: *Economic History of South Africa*, Ed. Coleman, F.L.,

Witt, U. (2008) What is specific about evolutionary economics? *Journal of Evolutionary* 

*of Ecotourism,* ISBN 0851993680, BI Publishing, Wallingford.

Haum, ISBN 0-7986-0954-0, Pretoria.

*Economics* Vol.18, 547–575

When speaking of trends, people tend to relatives arguments due to their fragile demonstrability. To prepare this chapter, we began with two objectives: first, to analyse trends in the tourism sector and their evolution, and secondly, in juxtaposition, to examine tourism trends from a socio-demographic perspective. Our goal is to deepen our understanding of two types of tourism that are both future trends in the tourism sector, namely, senior tourism and accessible tourism. This paper does not seek to review market niches or narrow market segments, but rather the opening of new tourism segments based on the synergies that can be generated between these segments based on both the potential and real needs of tourists. Accessibility is established as the key link, as older people and people with temporarily or permanently restricted capacities are the direct beneficiaries of accessibility. Indeed, accessibility is considered to be a parameter of quality and usability for tourist attractions and is, therefore, a key determinant of user satisfaction and loyalty. Also, we must not forget that disability is often directly related to the elderly and that, "with increasing age, disability or restricted capacities also increase in a gradual way" (Burnett, 1996:7).

Although these segments of tourism have not been very important in the past, their importance is now growing and they have been established as priorities in policy lines of action. For instance, in 2009, the European Commission launched the Calypso 27 project (aligned with the objectives of social tourism), arguing that by increasing the accessibility of disadvantaged populations to tourism, social tourism contributes to achieving the key objectives of the Lisbon Strategy, particularly in terms of economic development and employment. This project has four target groups: senior citizens and retirees, youths, the disabled and families with difficulties (e.g., social, financial). It intends "to correct social inequalities among the population, as these exclude many from tourism and travel, and ensure universal access to vacations, while aiming to generate economic activity and growth in Europe, combat seasonality in tourism, create more and better jobs in the tourism sector and strengthen the ties among European citizens."

Borja *et al.* (2002) have shown that the segment of adults over 55 years of age will increase the overall volume of tourism the most; these adults are characterised by extensive experience in tourism, making them more demanding consumers and allowing demand to shift away from peak seasons because this is a segment of the population that is often retired. This segment is augmented by disabled people, with whom senior citizens share

New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 141

In Europe, there are already more elderly people (over 65 years old) than children. In 2004, the elderly population (75.4 million) exceeded the younger population (less than 14 years of age) (74 million). This finding follows the trend of the decrease in the latter from 1984 onwards in favour of a greater number of people older than 65 years of age, who now represent one-sixth of the European population (Institute for Family Policy-IPF-2007). When we add the significant decrease in mortality and fertility to this, we observe a remarkable transformation of the population pyramid, setting the European stage for a situation in 2025 in which the maximum width of the pyramid will be comprised of the group between 40

One cannot forget either that family structure has changed, with a reduction in the average household size to 2.4 members in the EU 15 (2000) and the emergence of single-parent families who tend to invest income increases not in having more children but, increasingly,

Clearly, the behavioural habits of tourists are heavily influenced by their socio-demographic contexts, i.e., education level, age, economic activity, environment and lifestyle, with the largest percentage of tourists who travel being those with a higher level of education and

Tourism is also a seasonal activity, occurring mainly during holiday periods: summer, Easter and Christmas, as well as weekends. The primary reasons for tourism are leisure travel and vacations, followed by visits to relatives and friends and, to a lesser degree, work or business and studies. The duration of trips has tended to decrease and ranges from one week to two weeks. Note that short trips abound among young people, while the trip

We can say, therefore, that the tourism industry needs to adapt its offerings to these new

Searching for products that offer more enriching experiences in a shorter period of time.

One of the key elements that can be drawn from the above, both from the perspective of the tourist sector as well as the individual tourist, is the importance of the segment formed by older people that, because of the aging population, will continue to increase steadily. Thus, it is essential to consider senior tourism as crucial to the reformulation of tourism or the range of available products and destinations. In addition, senior tourism is directly linked to accessible tourism because disability is often directly related to the elderly. According to the World Health Organisation (WHO), 35% of people over 65 have

**2.2.2 Habits and leisure behaviour: Current status and trends / forecasts** 

employment positions that include greater responsibilities and salaries.

trends and demographic behaviours, which are mainly characterised by:

Discretionary tourism as an escape for rest, relaxation and leisure.

**3. Senior tourism and accessible tourism – Theoretical bases** 

**2.2.1 Population and family structure: Current situation and trends / forecasts** 

and 60 years old, thus causing the pyramid to rupture.

duration increases for adults over the age of 40.

Combining leisure travel / leisure and work.

some type of disability (Fuguet, 2008).

in the already existing family.

 More holiday periods. Shorter vacations.

common needs, mainly accessibility. Thus, this potential segment of tourists approaches one fifth of the population. Accessibility improvements not only benefit these groups but also pregnant women and those with temporarily restricted capacities, such as children and families. In general, everyone benefits from greater accessibility.

The aim of this study was to determine the profile and behaviour of the elderly traveller and that of those seeking accessible tourism, as well as the market opportunities and profitability that can be generated nationally and at the European level, as it was assumed that these two types of tourists require similar amenities. Initially, we reviewed the existing literature to define and identify those variables that influence or explain tourists' motivations. Subsequently, we carried out a quantitative study in which data were collected from potential tourists. After analysing this data, we concluded that the elderly and tourists concerned with accessibility create a market of significant size both from demographic and economic perspectives and those active policies should be implemented to provide tourist attractions that can be enjoyed by all travellers, on the basis of both quality and social responsibility.

#### **2. New market trends**

#### **2.1 Trends in the tourism sector**

According to the World Tourism Organisation (WTO), some of the 2020 future market trends are: an increase in the number of elderly tourists, a change from active vacations to experience-based holidays and an ever increasingly complex segmentation of the demand to comply with the different objectives or purposes of traditional travel (e.g., travel to destinations, honeymoons with sun and beach access, or cultural or cruise-related products).

Therefore, we can say that, in general, the current trends in tourism demand are conditioned primarily by the following scenarios:


#### **2.2 Socio-demographic trends of tourists**

Studying the evolution of society as a whole makes it easy to set future trends in tourism demand because it also requires the study of the elements linked to individuals' economic situations, both from social and economic perspectives as well as a behavioural perspective.

Two blocks of study were structured for this purpose: population and family structure, and habits of behaviour and leisure. For this analysis, Europe was used as a reference, as it is the continent with the largest number of inbound tourists received both now and in the shortterm future.

#### **2.2.1 Population and family structure: Current situation and trends / forecasts**

In Europe, there are already more elderly people (over 65 years old) than children. In 2004, the elderly population (75.4 million) exceeded the younger population (less than 14 years of age) (74 million). This finding follows the trend of the decrease in the latter from 1984 onwards in favour of a greater number of people older than 65 years of age, who now represent one-sixth of the European population (Institute for Family Policy-IPF-2007). When we add the significant decrease in mortality and fertility to this, we observe a remarkable transformation of the population pyramid, setting the European stage for a situation in 2025 in which the maximum width of the pyramid will be comprised of the group between 40 and 60 years old, thus causing the pyramid to rupture.

One cannot forget either that family structure has changed, with a reduction in the average household size to 2.4 members in the EU 15 (2000) and the emergence of single-parent families who tend to invest income increases not in having more children but, increasingly, in the already existing family.

#### **2.2.2 Habits and leisure behaviour: Current status and trends / forecasts**

Clearly, the behavioural habits of tourists are heavily influenced by their socio-demographic contexts, i.e., education level, age, economic activity, environment and lifestyle, with the largest percentage of tourists who travel being those with a higher level of education and employment positions that include greater responsibilities and salaries.

Tourism is also a seasonal activity, occurring mainly during holiday periods: summer, Easter and Christmas, as well as weekends. The primary reasons for tourism are leisure travel and vacations, followed by visits to relatives and friends and, to a lesser degree, work or business and studies. The duration of trips has tended to decrease and ranges from one week to two weeks. Note that short trips abound among young people, while the trip duration increases for adults over the age of 40.

We can say, therefore, that the tourism industry needs to adapt its offerings to these new trends and demographic behaviours, which are mainly characterised by:


140 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

common needs, mainly accessibility. Thus, this potential segment of tourists approaches one fifth of the population. Accessibility improvements not only benefit these groups but also pregnant women and those with temporarily restricted capacities, such as children and

The aim of this study was to determine the profile and behaviour of the elderly traveller and that of those seeking accessible tourism, as well as the market opportunities and profitability that can be generated nationally and at the European level, as it was assumed that these two types of tourists require similar amenities. Initially, we reviewed the existing literature to define and identify those variables that influence or explain tourists' motivations. Subsequently, we carried out a quantitative study in which data were collected from potential tourists. After analysing this data, we concluded that the elderly and tourists concerned with accessibility create a market of significant size both from demographic and economic perspectives and those active policies should be implemented to provide tourist attractions that can be enjoyed by all travellers, on the basis of both quality and social

According to the World Tourism Organisation (WTO), some of the 2020 future market trends are: an increase in the number of elderly tourists, a change from active vacations to experience-based holidays and an ever increasingly complex segmentation of the demand to comply with the different objectives or purposes of traditional travel (e.g., travel to destinations, honeymoons with sun and beach access, or cultural or cruise-related products). Therefore, we can say that, in general, the current trends in tourism demand are conditioned

The increasing importance, within the overall demand, of the segment of tourists over

More participatory and active holidays, with longer itineraries and itineraries that are

Studying the evolution of society as a whole makes it easy to set future trends in tourism demand because it also requires the study of the elements linked to individuals' economic situations, both from social and economic perspectives as well as a behavioural perspective. Two blocks of study were structured for this purpose: population and family structure, and habits of behaviour and leisure. For this analysis, Europe was used as a reference, as it is the continent with the largest number of inbound tourists received both now and in the short-

families. In general, everyone benefits from greater accessibility.

responsibility.

**2. New market trends** 

55 years of age.

term future.

More segmented markets.

**2.1 Trends in the tourism sector** 

primarily by the following scenarios:

A shortage of time and plenty of money.

managed individually in many cases.

**2.2 Socio-demographic trends of tourists** 

Higher demand in terms of quality and sophistication.

A growing awareness of environmental and sustainability issues.


#### **3. Senior tourism and accessible tourism – Theoretical bases**

One of the key elements that can be drawn from the above, both from the perspective of the tourist sector as well as the individual tourist, is the importance of the segment formed by older people that, because of the aging population, will continue to increase steadily. Thus, it is essential to consider senior tourism as crucial to the reformulation of tourism or the range of available products and destinations. In addition, senior tourism is directly linked to accessible tourism because disability is often directly related to the elderly. According to the World Health Organisation (WHO), 35% of people over 65 have some type of disability (Fuguet, 2008).

New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 143

differentiation between older people and the mature, and begin to consider the possibilities of offerings that are appropriate to the interests and realities of this group. According to García and Martorell (2007), senior citizen tourists are those over 65 years of age. In the Diagnostic Phase of the Plan for Enhancing the Competitiveness (PRC) of the Tourism Cluster in Montevideo (2009), senior citizen tourism is considered to be comprised of groups made up of people over 60 who are mentally and physically self-sufficient and have the time and financial resources to travel and visit a tourist destination. In sum, it may be noted that the ages used to identify senior citizen tourists vary, and we can find four groups of studies: - Those that define a senior citizen as an individual over 50 years of age (Cleaver, 2000; Kim, Wei and Ruys, 2003; Littrell, Paige and Song, 2004; Sellick, 2004; Wang, 2006). - Those that place the senior tourist beyond the age of 55 (Fleischer and Pizam, 2002; Hossain, Bailey and Lubulwa, 2003, Hsu and Lee, 2002; Huang and Tsai, 2003; Reece,



Therefore, the issue of the use of cognitive age – whether subjective or self-perceived – to assess the buying behaviour of the older consumer as an alternative to chronological age arises (Barak and Schiffman, 1981; González *et al.,* 2009; Patterson, 2006; Wilkes, 1992). Grande (1993:56) asserts that "the key age for segmenting the market is the selfperceived age, which is what sets the lifestyle by determining attitudes, interests and opinions." Similarly, Gwinner and Stephens (in Iyer *et al.,* 2008) have shown that cognitive age may explain some consumer behaviours better than other commonly used variables

The lack of consensus suggests an inconsistency in the concept. Le Serre (2008) proposes a new definition based on a review of the available literature on tourism and marketing magazines. He claims that the concept of the senior consumer is characterised by two types of elements: a) those that do not vary, regardless of marketing specialty and of the type of industry in which s/he works; all researchers agree with these intrinsic characteristics of the senior consumer and b) variable elements. The elements that do not change when




With respect to aspects that vary in the definition of the senior consumer, a review of the literature highlights two issues: 1). each definition is intrinsically linked to an approach that

the large number of older people and their purchasing power;

explain the purchasing behaviour of this group (Le Serre, 2008).

and Ruys, 2002; Jang and Wu, 2006; Lee and Tideswell, 2005).

2004; Shim, Gehrt and Siek, 2005).

Brayley, and Searle, 1995).

such as income, education and health.

'senior' meant older;

considering the concept of senior consumers are:

These two types of tourism must adapt and meet the expectations of the new scenario proposed above. At the sector level, great importance is given to the segment of the population over 55 years of age, but not as a niche market, rather as an integrated part of tourism offerings based on elements of quality and environmental sustainability. They are not subject to established periods of enjoyment, but can be variable depending on the user. The characteristics of the product offered can be adapted to different formats and seasonal holiday periods and to very different motivations: leisure, relaxation, pleasure or simply experiences according to the behaviour of the tourist.

Below, a theoretical contextualisation is presented for both types of tourists to outline their main characteristics and their fundamental bases.

#### **3.1 Senior tourism**

Senior tourism is a segment that has not held great importance in the tourism industry, although this trend is changing. The importance of the senior citizen segment in markets, in general, is determined by the process of aging (Norman *et al.,* 2001:115; Szmigin and Carrigan, 2001:1092), which is linked to improvements in the economic status and the health conditions of this group (Gunter, 1998:6). In this sense, some authors suggest that the unprecedented change in the demographic structure of the population will entail a shift in markets (Nedelea and State, 2008). Specifically, these authors point to the baby boomer generation as one that will introduce profound changes in the compositions of markets in the coming decades (Prideaux *et al.,* 2001:211; Ramos, 2005:406). We must remember that the most important factors for an aging population are its increasing life expectancy, lower birth rate and the impact that the baby boomer generation will have on the rest of the population as it ages (Metz and Underwood, 2005:5). Thus, because the baby boomer generation has begun to form part of the mature population, an increase in attention to seniors as consumers has resulted (Norman *et al., 2001:114*). Several years ago, Tongren (1988:138) echoed the importance of this generation and pointed to the desirability of not limiting ourselves to the characteristics of the elderly consumer today, but also to study the buying behaviour of this generation with regard to the products and services they will demand in the near future.

This tourist segment is still considered very new; therefore, there is not much literature that addresses their issues. This leads to a dearth of a description of the concept, as there is no clear definition of it or agreement by authors (Chen, 2009; Le Serre, 2008). This lack of consensus highlights its fragility and its impact on two key issues: from a theoretical view, the lack of a conceptual framework to research the behaviour of the elderly, and from an applied perspective, the lack of suitable tools to identify the senior consumer (Le Serre, 2008). This phenomenon is clearly reflected when analysing the literature. Thus, Hossain, Bailey and Lubulwa (2003: 4) use the term "senior" for those 55 years of age or older, and *non-seniors* are those under 55 but over 15 years of age. In turn, these authors segment seniors into two subgroups*: younger seniors,* from 55 to 64 years old and *older seniors,* 65 and older. On the other hand, Alcaide (2005) states that some companies set the senior age break at 55 years of age, the age at which the consumer begins to sense different needs and forecast and plan for aging. From this age, they are considered as part of the segment of the elderly in the banking system, which begins to differentiate between and specialise treatment for them. Other companies set the boundary at 60, the age that marks the

These two types of tourism must adapt and meet the expectations of the new scenario proposed above. At the sector level, great importance is given to the segment of the population over 55 years of age, but not as a niche market, rather as an integrated part of tourism offerings based on elements of quality and environmental sustainability. They are not subject to established periods of enjoyment, but can be variable depending on the user. The characteristics of the product offered can be adapted to different formats and seasonal holiday periods and to very different motivations: leisure, relaxation, pleasure or

Below, a theoretical contextualisation is presented for both types of tourists to outline their

Senior tourism is a segment that has not held great importance in the tourism industry, although this trend is changing. The importance of the senior citizen segment in markets, in general, is determined by the process of aging (Norman *et al.,* 2001:115; Szmigin and Carrigan, 2001:1092), which is linked to improvements in the economic status and the health conditions of this group (Gunter, 1998:6). In this sense, some authors suggest that the unprecedented change in the demographic structure of the population will entail a shift in markets (Nedelea and State, 2008). Specifically, these authors point to the baby boomer generation as one that will introduce profound changes in the compositions of markets in the coming decades (Prideaux *et al.,* 2001:211; Ramos, 2005:406). We must remember that the most important factors for an aging population are its increasing life expectancy, lower birth rate and the impact that the baby boomer generation will have on the rest of the population as it ages (Metz and Underwood, 2005:5). Thus, because the baby boomer generation has begun to form part of the mature population, an increase in attention to seniors as consumers has resulted (Norman *et al., 2001:114*). Several years ago, Tongren (1988:138) echoed the importance of this generation and pointed to the desirability of not limiting ourselves to the characteristics of the elderly consumer today, but also to study the buying behaviour of this generation with regard to the products and

This tourist segment is still considered very new; therefore, there is not much literature that addresses their issues. This leads to a dearth of a description of the concept, as there is no clear definition of it or agreement by authors (Chen, 2009; Le Serre, 2008). This lack of consensus highlights its fragility and its impact on two key issues: from a theoretical view, the lack of a conceptual framework to research the behaviour of the elderly, and from an applied perspective, the lack of suitable tools to identify the senior consumer (Le Serre, 2008). This phenomenon is clearly reflected when analysing the literature. Thus, Hossain, Bailey and Lubulwa (2003: 4) use the term "senior" for those 55 years of age or older, and *non-seniors* are those under 55 but over 15 years of age. In turn, these authors segment seniors into two subgroups*: younger seniors,* from 55 to 64 years old and *older seniors,* 65 and older. On the other hand, Alcaide (2005) states that some companies set the senior age break at 55 years of age, the age at which the consumer begins to sense different needs and forecast and plan for aging. From this age, they are considered as part of the segment of the elderly in the banking system, which begins to differentiate between and specialise treatment for them. Other companies set the boundary at 60, the age that marks the

simply experiences according to the behaviour of the tourist.

main characteristics and their fundamental bases.

services they will demand in the near future.

**3.1 Senior tourism** 

differentiation between older people and the mature, and begin to consider the possibilities of offerings that are appropriate to the interests and realities of this group. According to García and Martorell (2007), senior citizen tourists are those over 65 years of age. In the Diagnostic Phase of the Plan for Enhancing the Competitiveness (PRC) of the Tourism Cluster in Montevideo (2009), senior citizen tourism is considered to be comprised of groups made up of people over 60 who are mentally and physically self-sufficient and have the time and financial resources to travel and visit a tourist destination. In sum, it may be noted that the ages used to identify senior citizen tourists vary, and we can find four groups of studies:


Therefore, the issue of the use of cognitive age – whether subjective or self-perceived – to assess the buying behaviour of the older consumer as an alternative to chronological age arises (Barak and Schiffman, 1981; González *et al.,* 2009; Patterson, 2006; Wilkes, 1992). Grande (1993:56) asserts that "the key age for segmenting the market is the selfperceived age, which is what sets the lifestyle by determining attitudes, interests and opinions." Similarly, Gwinner and Stephens (in Iyer *et al.,* 2008) have shown that cognitive age may explain some consumer behaviours better than other commonly used variables such as income, education and health.

The lack of consensus suggests an inconsistency in the concept. Le Serre (2008) proposes a new definition based on a review of the available literature on tourism and marketing magazines. He claims that the concept of the senior consumer is characterised by two types of elements: a) those that do not vary, regardless of marketing specialty and of the type of industry in which s/he works; all researchers agree with these intrinsic characteristics of the senior consumer and b) variable elements. The elements that do not change when considering the concept of senior consumers are:


With respect to aspects that vary in the definition of the senior consumer, a review of the literature highlights two issues: 1). each definition is intrinsically linked to an approach that

New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 145

for human development. It recommended the regulation of tourist services to member states, highlighting the most important aspects of tourist accessibility. Pérez and González (2003), note that *accessible tourism* has been conceived from its inception as one that guarantees the use and enjoyment of tourism by people with physical, mental or sensory impairment disabilities, i.e., to facilitate the access of people with disabilities to infrastructure and tourism services. According to Gómez (2002), accessible tourism can be defined as the variety of activities occurring during the free time devoted to tourism by people with restricted capacities, which enables them to fully integrate their functional and psychological perspectives and achieve individual satisfaction and social development. It

In the late 1980s, another term arose to refer to tourism for people with restricted capacities, that is, *tourism for all,* which can be defined as the set of activities oriented towards tourism and leisure that take place in an individual's free time and that all people can access, regardless of varying degrees of ability / disability, achieving full integration and, therefore, an individual and social fulfilment from the interaction of the user with the environment. Its objective is, "to achieve the normalisation of tourism and leisure for all people and contributing to their incorporation as users of tourism infrastructure and services" (Fernández-Villarán, 2007:49). One tries to design tourism for all, i.e., activities that can be enjoyed by individuals without any disability as well as by different groups with specific accessibility needs (physical, mental or sensory) without any differentiation or

There is also the concept of *accessible tourism for all.* Almost identical to tourism for all, this concept "is not based on the separate creation of services for people with disabilities, but aims at the full integration and inclusion of people with special needs, particularly disabled people and elderly people, in the tourism sector" (Leidner, 2006:1). That is, all tourists can be active participants in the tourism sector, regardless of their characteristics,

Other concepts that are also employed in the field of tourism in relation to those with disabilities (although to a lesser degree and with limited significance) are social tourism and quality tourism. *"Social tourism* was created with the objective of making leisure tourism available to a broad segment of the population. All authors agree that, "it is a modality that seeks to promote leisure and conviviality among these disadvantaged groups" (Fernández-Villarán, 2007: 50). This idea is based on providing resources to those groups with limited resources - elderly, young people or people with different abilities - in order allow them to

In relation to quality tourism, it is essential to define the term quality to understand the extent to which it can be applied to tourism based on the disabled user. Quality can be defined from multiple perspectives. One of the most interesting perspectives comes from the discernment of value, defined as a property or a set of properties inherent to a product or service that permits it to be appreciated equally, better or worse than others like it. Meeting the needs and expectations of consumers of products / services is the key to quality, which should not be perceived as a luxury or privilege, but as a tool to differentiate the positioning to competitors. "We will be placed sooner rather than later in a scenario where terms such as: accessible, barrier-free, universal, for all, etc. will stop being used and talk only of *quality* 

travel with the appropriate conditions of economy, accessibility, safety and comfort.

follows that an accessible activity is synonymous with integration.

discrimination among them.

abilities and needs.

allows a differentiation between senior and non-senior consumers, and 2). there is a lack of consensus on the definition of a senior consumer and, consequently, the criteria used to define him or her.

In marketing, two criteria are used: chronological age and retirement. With regard to chronological age, there was a lack of agreement about the age of the onset of the senior segment. Some authors justify why they choose a certain age, but others do not. Even the justifications themselves may differ from each other. These discrepancies make it difficult to compare the results obtained by different studies. In addition, chronological age is a very simple criterion in regards to defining the entire senior segment, which is a very heterogeneous group. Finally, we should also note that there is a dynamic approach linked to historical and cultural circumstances (e.g., medical advances); hence, the economic and social realities can vary over time. Consequently, chronological age is a criterion that must be supplemented. On the other hand, the criterion "retirement" can also create difficulties in comparing results because it changes from one country to another. Although in many countries the legal age of retirement is age 65, this age distinction differs in other countries. For example, in Norway the legal age of retirement is 67, and in Korea and France the legal age of retirement is 60 (Le Serre, 2008). Moreover, under certain circumstances, people may qualify or apply for early retirement or enjoy a pre-retirement. The legal age of retirement may also vary depending on social and political changes. These observations emphasise the cultural dimension of the concept of a senior and suggest that the retirement criterion is too restrictive and the scientific community should supplement it.

There is, therefore, confusion about the definition of tourism activities undertaken by older people derived from the multiplicity of meanings offered by the concept of "older or senior." However, in light of the discussion above, it can be taken as a hypothesis that senior tourism covers a broad spectrum of activities that are done by older people, retired or not retired, 55 years or more, with different income levels. In this sense, it seems logical to consider that senior tourism should not be treated simply as a non-seasonal type of active aging and directed to a minority group, but as a much more extensive activity.

#### **3.2 Accessible tourism**

When talking about *tourism for people with disabilities, or limited or restricted capacities,* one of the biggest problems is the great variety of existing words to convey very similar ideas. "These euphemisms have the effect of depoliticising our own terminology and devaluing one's own vision of ourselves as people with disabilities" (Heumann, 1993:262), sometimes reaching the point of distorting and limiting the meaning, as in the case of the term "accessibility", or simply creating confusion. "The choice of language and labels that emerge from within the disability community creates positive imagery to counter this derogatory and oppressive language used by those outside the culture of disability to describe people with disabilities" (Gilson and Depoy, 2000: 211). An example of this is the variety of terms relating to leisure and recreation by people with partly or wholly restricted capacities.

On September 27, 1980, in Manila (Philippines), the terms tourism and accessibility were first linked by the Manila Declaration, and later elaborated upon by the World Tourism Organisation. This declaration recognised tourism as a fundamental right and key vehicle

allows a differentiation between senior and non-senior consumers, and 2). there is a lack of consensus on the definition of a senior consumer and, consequently, the criteria used to

In marketing, two criteria are used: chronological age and retirement. With regard to chronological age, there was a lack of agreement about the age of the onset of the senior segment. Some authors justify why they choose a certain age, but others do not. Even the justifications themselves may differ from each other. These discrepancies make it difficult to compare the results obtained by different studies. In addition, chronological age is a very simple criterion in regards to defining the entire senior segment, which is a very heterogeneous group. Finally, we should also note that there is a dynamic approach linked to historical and cultural circumstances (e.g., medical advances); hence, the economic and social realities can vary over time. Consequently, chronological age is a criterion that must be supplemented. On the other hand, the criterion "retirement" can also create difficulties in comparing results because it changes from one country to another. Although in many countries the legal age of retirement is age 65, this age distinction differs in other countries. For example, in Norway the legal age of retirement is 67, and in Korea and France the legal age of retirement is 60 (Le Serre, 2008). Moreover, under certain circumstances, people may qualify or apply for early retirement or enjoy a pre-retirement. The legal age of retirement may also vary depending on social and political changes. These observations emphasise the cultural dimension of the concept of a senior and suggest that the retirement

criterion is too restrictive and the scientific community should supplement it.

aging and directed to a minority group, but as a much more extensive activity.

There is, therefore, confusion about the definition of tourism activities undertaken by older people derived from the multiplicity of meanings offered by the concept of "older or senior." However, in light of the discussion above, it can be taken as a hypothesis that senior tourism covers a broad spectrum of activities that are done by older people, retired or not retired, 55 years or more, with different income levels. In this sense, it seems logical to consider that senior tourism should not be treated simply as a non-seasonal type of active

When talking about *tourism for people with disabilities, or limited or restricted capacities,* one of the biggest problems is the great variety of existing words to convey very similar ideas. "These euphemisms have the effect of depoliticising our own terminology and devaluing one's own vision of ourselves as people with disabilities" (Heumann, 1993:262), sometimes reaching the point of distorting and limiting the meaning, as in the case of the term "accessibility", or simply creating confusion. "The choice of language and labels that emerge from within the disability community creates positive imagery to counter this derogatory and oppressive language used by those outside the culture of disability to describe people with disabilities" (Gilson and Depoy, 2000: 211). An example of this is the variety of terms relating to leisure and recreation by people with partly or wholly

On September 27, 1980, in Manila (Philippines), the terms tourism and accessibility were first linked by the Manila Declaration, and later elaborated upon by the World Tourism Organisation. This declaration recognised tourism as a fundamental right and key vehicle

define him or her.

**3.2 Accessible tourism** 

restricted capacities.

for human development. It recommended the regulation of tourist services to member states, highlighting the most important aspects of tourist accessibility. Pérez and González (2003), note that *accessible tourism* has been conceived from its inception as one that guarantees the use and enjoyment of tourism by people with physical, mental or sensory impairment disabilities, i.e., to facilitate the access of people with disabilities to infrastructure and tourism services. According to Gómez (2002), accessible tourism can be defined as the variety of activities occurring during the free time devoted to tourism by people with restricted capacities, which enables them to fully integrate their functional and psychological perspectives and achieve individual satisfaction and social development. It follows that an accessible activity is synonymous with integration.

In the late 1980s, another term arose to refer to tourism for people with restricted capacities, that is, *tourism for all,* which can be defined as the set of activities oriented towards tourism and leisure that take place in an individual's free time and that all people can access, regardless of varying degrees of ability / disability, achieving full integration and, therefore, an individual and social fulfilment from the interaction of the user with the environment. Its objective is, "to achieve the normalisation of tourism and leisure for all people and contributing to their incorporation as users of tourism infrastructure and services" (Fernández-Villarán, 2007:49). One tries to design tourism for all, i.e., activities that can be enjoyed by individuals without any disability as well as by different groups with specific accessibility needs (physical, mental or sensory) without any differentiation or discrimination among them.

There is also the concept of *accessible tourism for all.* Almost identical to tourism for all, this concept "is not based on the separate creation of services for people with disabilities, but aims at the full integration and inclusion of people with special needs, particularly disabled people and elderly people, in the tourism sector" (Leidner, 2006:1). That is, all tourists can be active participants in the tourism sector, regardless of their characteristics, abilities and needs.

Other concepts that are also employed in the field of tourism in relation to those with disabilities (although to a lesser degree and with limited significance) are social tourism and quality tourism. *"Social tourism* was created with the objective of making leisure tourism available to a broad segment of the population. All authors agree that, "it is a modality that seeks to promote leisure and conviviality among these disadvantaged groups" (Fernández-Villarán, 2007: 50). This idea is based on providing resources to those groups with limited resources - elderly, young people or people with different abilities - in order allow them to travel with the appropriate conditions of economy, accessibility, safety and comfort.

In relation to quality tourism, it is essential to define the term quality to understand the extent to which it can be applied to tourism based on the disabled user. Quality can be defined from multiple perspectives. One of the most interesting perspectives comes from the discernment of value, defined as a property or a set of properties inherent to a product or service that permits it to be appreciated equally, better or worse than others like it. Meeting the needs and expectations of consumers of products / services is the key to quality, which should not be perceived as a luxury or privilege, but as a tool to differentiate the positioning to competitors. "We will be placed sooner rather than later in a scenario where terms such as: accessible, barrier-free, universal, for all, etc. will stop being used and talk only of *quality* 

New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 147

*Business opportunity:* with senior tourism and accessible tourism, a competitive advantage is generated. This is not a niche market, but an extension of the tourist segment based on

*Growing market segment through demographic and lifestyle changes:* there is a growing segment of people with disabilities or with restricted capacities and socio-demographic and lifestyle changes anticipate continued growth, mainly driven by: work or traffic accidents, population aging, war, changes in the number of people with disabilities or possible variations in the segment of people affected by diseases with consequences that undermine

*Increased market:* as shown in Tables 1 and 2, the percentage of the market related to people with disabilities and older people, i.e., the direct beneficiaries of accessibility, is very attractive, representing around one fifth of the global population between the two groups. *Shifting away from seasonality:* one of the big problems with the tourism sector in Spain and in countries with similar tourism models is seasonality, i.e., the mass influx of tourists during predetermined periods. Senior and accessible tourism would help to move away from seasonality, as most disabled people do not work. According to Eurostat data, 51% of this segment is not active and receive a disability pension or retirement (Eurostat, 2005). This represents a very attractive market, both due to its size and their availability to travel. A similar case is found with the elderly, who are no longer integrated into the labour market and have occasion and money to enjoy their leisure time. Also, one should not ignore the increase in both state and European initiatives regarding travel programmes for senior citizens and persons with disabilities, which are offered primarily in low-intensity tourism periods. Spain has been a pioneer in its conception of senior tourism as a reality independent of other tourism subsectors (Álvarez, 2006) and has even served as a model for other countries with its IMSERSO (Institute for the Elderly and Social Services) programmes, which attempt to improve the quality of life of older people by increasing their participation in travel and tourism activities, while contributing to the creation or maintenance of

*Competitive and quality tourism:* there are many countries - mainly the Nordic countries, Germany and the United Kingdom - where accessibility is even more evolved. They encourage their citizens to view travel as an activity of daily life and a method of personal fulfilment. Spain is one of the most popular destinations and, thus, should tend towards a quality image. To do this, it is necessary to raise awareness of the quality tourism sector, with the implementation of different standards, such as UNE 17001-2, which certifies the

*Social rights for all*: in 1996, the EU set into motion the first steps that require all states to recognise the rights of persons with disabilities, assuming that the needs of all people are equally important, respecting human diversity as a base for building society and the provisioning of resources to ensure *equal opportunities* for all citizens to participate in social life.

When one speaks of data regarding people with disabilities, the numbers can vary greatly depending on the source (see Table 1). This fact arises from the commentary above, i.e., the

variation in terms of definitions and criteria applied to the term disability.

quality as it increases the supply of goods and services.

capacities (hidden disabilities such as leukaemia, cancer, etc.).

employment in the tourism sector in the low season.

management of systems for restricted accessibility.

**4.2 Demand figures** 

*tourism,* that is, offering a comprehensive service appropriate to each type of client regardless of their particular conditions" (Salgado, 2007:1).

Given the heterogeneity of this group and its broad classification according to the International Classification of Functioning, Disability and Health (ICF) (WHO, 2001), a number of subdivisions marked by common characteristics among them in which disabled people are included were established:

	- *Mobility:* occurs when there is difficulty in maintaining and changing the different positions of the body as well as standing up, lying down, standing, sitting or moving. Those movements involving the use or transportation of various mobility aids and objects are also included.
	- *Apprehension:* sometimes with a considerable amount of stress or anxiety, the person may provoke in him / herself a response that in itself is harmful to the body, creating psychological situations that lead to physical or trauma problems.
	- *Mental illness*: disorders related to different degrees of mental disability.
	- *Intellectual disability:* resulting from difficulty recognising people, objects, orientation in space and time, recalling past events or understanding and executing simple or complex orders.
	- *Visual*: the individual may find it difficult to perceive any image, carry out visual tasks wholly or in detail, or other disabilities related to vision.
	- *Hearing*: the person may have trouble hearing any sound, hearing loud sounds or hearing speech.
	- *Communication or speech*: problems that arise when trying to communicate through speech, alternative languages, unsigned gestures or by conventional reading and writing.
	- *Visceral:* those caused by cardiovascular insufficiency and / or respiratory or kidney dysfunction or problems including enterostomies.
	- *Pathological:* caused by allergies, epilepsy, haemophilia, dwarfism, gigantism, leprosy or similar conditions.

#### **4. Potential and actual market analysis**

#### **4.1 Market opportunity**

Both economic and social yields set market trends from the point of view of supply. One works with what is demanded by the consumer or what is assumed as a market opportunity for one's area of competence. Working with accessibility in the tourism sector results in a number of advantages that can be converted into opportunities that are reflected both in the senior segment of tourists as well as tourists who are disabled or have temporarily restricted capacities. Some of the more important are:

*Business opportunity:* with senior tourism and accessible tourism, a competitive advantage is generated. This is not a niche market, but an extension of the tourist segment based on quality as it increases the supply of goods and services.

*Growing market segment through demographic and lifestyle changes:* there is a growing segment of people with disabilities or with restricted capacities and socio-demographic and lifestyle changes anticipate continued growth, mainly driven by: work or traffic accidents, population aging, war, changes in the number of people with disabilities or possible variations in the segment of people affected by diseases with consequences that undermine capacities (hidden disabilities such as leukaemia, cancer, etc.).

*Increased market:* as shown in Tables 1 and 2, the percentage of the market related to people with disabilities and older people, i.e., the direct beneficiaries of accessibility, is very attractive, representing around one fifth of the global population between the two groups.

*Shifting away from seasonality:* one of the big problems with the tourism sector in Spain and in countries with similar tourism models is seasonality, i.e., the mass influx of tourists during predetermined periods. Senior and accessible tourism would help to move away from seasonality, as most disabled people do not work. According to Eurostat data, 51% of this segment is not active and receive a disability pension or retirement (Eurostat, 2005). This represents a very attractive market, both due to its size and their availability to travel. A similar case is found with the elderly, who are no longer integrated into the labour market and have occasion and money to enjoy their leisure time. Also, one should not ignore the increase in both state and European initiatives regarding travel programmes for senior citizens and persons with disabilities, which are offered primarily in low-intensity tourism periods. Spain has been a pioneer in its conception of senior tourism as a reality independent of other tourism subsectors (Álvarez, 2006) and has even served as a model for other countries with its IMSERSO (Institute for the Elderly and Social Services) programmes, which attempt to improve the quality of life of older people by increasing their participation in travel and tourism activities, while contributing to the creation or maintenance of employment in the tourism sector in the low season.

*Competitive and quality tourism:* there are many countries - mainly the Nordic countries, Germany and the United Kingdom - where accessibility is even more evolved. They encourage their citizens to view travel as an activity of daily life and a method of personal fulfilment. Spain is one of the most popular destinations and, thus, should tend towards a quality image. To do this, it is necessary to raise awareness of the quality tourism sector, with the implementation of different standards, such as UNE 17001-2, which certifies the management of systems for restricted accessibility.

*Social rights for all*: in 1996, the EU set into motion the first steps that require all states to recognise the rights of persons with disabilities, assuming that the needs of all people are equally important, respecting human diversity as a base for building society and the provisioning of resources to ensure *equal opportunities* for all citizens to participate in social life.

#### **4.2 Demand figures**

146 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

*tourism,* that is, offering a comprehensive service appropriate to each type of client

Given the heterogeneity of this group and its broad classification according to the International Classification of Functioning, Disability and Health (ICF) (WHO, 2001), a number of subdivisions marked by common characteristics among them in which disabled

 *Mobility:* occurs when there is difficulty in maintaining and changing the different positions of the body as well as standing up, lying down, standing, sitting or moving. Those movements involving the use or transportation of various mobility

 *Apprehension:* sometimes with a considerable amount of stress or anxiety, the person may provoke in him / herself a response that in itself is harmful to the body, creating psychological situations that lead to physical or trauma problems.

 *Intellectual disability:* resulting from difficulty recognising people, objects, orientation in space and time, recalling past events or understanding and executing

*Visual*: the individual may find it difficult to perceive any image, carry out visual

*Hearing*: the person may have trouble hearing any sound, hearing loud sounds or

 *Communication or speech*: problems that arise when trying to communicate through speech, alternative languages, unsigned gestures or by conventional reading and

*Visceral:* those caused by cardiovascular insufficiency and / or respiratory or

*Pathological:* caused by allergies, epilepsy, haemophilia, dwarfism, gigantism,


Both economic and social yields set market trends from the point of view of supply. One works with what is demanded by the consumer or what is assumed as a market opportunity for one's area of competence. Working with accessibility in the tourism sector results in a number of advantages that can be converted into opportunities that are reflected both in the senior segment of tourists as well as tourists who are disabled or have temporarily restricted




tasks wholly or in detail, or other disabilities related to vision.


kidney dysfunction or problems including enterostomies.

regardless of their particular conditions" (Salgado, 2007:1).

aids and objects are also included.

simple or complex orders.

leprosy or similar conditions.

**4. Potential and actual market analysis** 

capacities. Some of the more important are:

hearing speech.

writing.

such as deaf-mutes.

**4.1 Market opportunity** 

people are included were established:

When one speaks of data regarding people with disabilities, the numbers can vary greatly depending on the source (see Table 1). This fact arises from the commentary above, i.e., the variation in terms of definitions and criteria applied to the term disability.

New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 149

If we now analyse the figures for older people's overall demand (see Table 2), we see that, at the European level, there are older people than children. Furthermore, in 2004, the population over 65 years of age (75.4 million) exceeded that of the population aged 14 years or under (74 million). This continues the trend since 1984 for the decrease in the latter in favour of people over 65, who now account for one sixth of the European population (IPF, 2007). Focusing on Spain, only one in seven Spaniards is young and only 14.5% of the population is under 14, while one out of every six Spaniards is over 65. Spain is one of the notable leaders in the rankings of aging populations. This demographic transition is also reinforced by the low birth rate. By 2020, it is estimated that 20% of the population will be over 64 years of age (IPF, 2006). Spain will be one of those countries that experiences a significant demographic aging in

**Location Estimate % of the population Source or Reference** 

people 12.4% - U.S. Department of

people 16.6% - IPF, 2009

Elderly people, aged 65 years or older without disabilities, comprise 10.9% of the total Spanish population, due to the aging population. Focusing on this segment, we observe that "travel and tourism," which is the second activity they would like to do after "walking", is a

When determining the number of potential tourists who directly benefit from accessibility, we found different sources with different estimates. The potential market for accessibility has been currently estimated at 127.5 million beneficiaries in Europe; this figure includes 7

When we perform a more detailed study of the segment of the population benefiting from the removal of accessibility barriers in Spain (see Table 3), the figure totals 16 million people, thus representing almost 40% of the Spanish population (Ministry of Labour and Social

10% - OMS, 2000

Commerce, 1997


Europe, and one in two people will be at least 55 years of age in 2050.

people 16.8%

desire shared by 60% of women and 46% of men (NSI, 1995).

About 600 million people (in 2025 it is estimated that it will be 1.6 billion people)

**USA** About 31.88 million

**Europe** More than 85 million

**Spain** More than 6.5 million

**Global** 

Table 2. Senior citizens

segments (Buhalis *et al.,* 2005):




Affairs, 2003:28).



Table 1. People with disabilities. Overall demand.

If we now analyse the figures for older people's overall demand (see Table 2), we see that, at the European level, there are older people than children. Furthermore, in 2004, the population over 65 years of age (75.4 million) exceeded that of the population aged 14 years or under (74 million). This continues the trend since 1984 for the decrease in the latter in favour of people over 65, who now account for one sixth of the European population (IPF, 2007). Focusing on Spain, only one in seven Spaniards is young and only 14.5% of the population is under 14, while one out of every six Spaniards is over 65. Spain is one of the notable leaders in the rankings of aging populations. This demographic transition is also reinforced by the low birth rate. By 2020, it is estimated that 20% of the population will be over 64 years of age (IPF, 2006). Spain will be one of those countries that experiences a significant demographic aging in Europe, and one in two people will be at least 55 years of age in 2050.


#### Table 2. Senior citizens

148 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

**POTENTIAL OR OVERALL DEMAND FOR PEOPLE WITH DISABILITIES** 

Almost 54 million people. 21% - U.S. Department of

From 16% to

in 1991. 15.5% - Van Horn, 2002.

in 1993. 18% - Darcy, 1998.

15.7%

20%

From 10% to

From 15% to

From 13% to

From 20% to

17%

**population Source or Reference** 

26% - Stumbo and Pegg, 2005.


Commerce, 1997.






(2003).

(2001).

20% - Pühretmair, 2004.

25% - Stumbo and Pegg, 2005.

**Location Estimate % of the** 

people. From 9% to 13%

**Global** From 600 to 859 million

people.

From 50 to 80 million

**Canada** More than 2.7 million people

**Australia** More than 3 million people

to 64 years)

disability

50 million people in

From 69 to 92 million

From 60 to 80 million disabled and reduced mobility people.

From 92 to 115 million

Table 1. People with disabilities. Overall demand.

people.

people.

Around 45 million people in the EU-25 countries (aged 16

From 45 to 90 million people who have some type of

extended Europe. Aprox. 11%

**USA** 

**Europe** 

Elderly people, aged 65 years or older without disabilities, comprise 10.9% of the total Spanish population, due to the aging population. Focusing on this segment, we observe that "travel and tourism," which is the second activity they would like to do after "walking", is a desire shared by 60% of women and 46% of men (NSI, 1995).

When determining the number of potential tourists who directly benefit from accessibility, we found different sources with different estimates. The potential market for accessibility has been currently estimated at 127.5 million beneficiaries in Europe; this figure includes 7 segments (Buhalis *et al.,* 2005):


When we perform a more detailed study of the segment of the population benefiting from the removal of accessibility barriers in Spain (see Table 3), the figure totals 16 million people, thus representing almost 40% of the Spanish population (Ministry of Labour and Social Affairs, 2003:28).

New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 151

75% of couples without children in which the head of the family is between 51-64 years of age made some kind of trip last year (ITS, 2010) and thus comprise the third most travelled

To study the profile and behaviour of the segments of tourists with disabilities and senior tourists, we have chosen to conduct the analyses separately (despite their similar needs) in

The literature on the segmentation of tourists with disabilities in Europe is scarce; above all, there is mostly public institutional and organisational research, for which a clear statistical

Here, we examine two of the most relevant studies. The first is the Federal Ministry of Economics and Technology of Germany (2004), which conducted a survey of German



The other study is the National Agency for New Technologies, Energy and Environment of



To analyse the segment of Spanish tourists with disabilities, we began with the premise that people with disabilities form a group of users with the widest range of needs and, therefore, requirements. The identification of their profile and behaviour was conducted through quantitative research. Thus, for data collection, a quota sampling was used, dividing the population into distinct subpopulations. The sample population analysed consisted of Spanish tourists with disabilities, with a sample size of 404 valid questionnaires and a confidence level of 95.5%. Using the NSI (1999) and Eurostat (2005) data as the basis, four key elements for structuring the sample were established: gender (male / female), age (17-64 years of age / 65 and over), autonomous region (20 in total) and type of disability (physical,

group as compared with the rest of the Spanish population.

order to establish their behaviours more clearly and concisely.

tourists with disabilities, highlighting the following main conclusions:

Italy (ENEA) (1999). The primary conclusions are summarised below:


operators and / or associations and support agencies.





**5. Profile and behaviour** 

**5.1 Disabled tourists** 

available.

business owners).

mental, sensory and hidden).

methodology was generally applied.


¹ A member is considered to be a person younger than 65 for each family unit, forming part of the collective of beneficiaries from the removal of accessibility barriers due to transitory circumstances. ² Includes people affected by fractures, trauma, sprains and injuries to ligaments and bones. Sources: National Statistical Institute, documents from the Survey on Disabilities, Impairments and Health Status (EDDES), Labour Force Survey (LFS), Hospital Morbidity Survey (EMH) and Accessibility White Paper (Ministry of Labour and Social Affairs, 2002 and 2003).

Table 3. Beneficiaries of the removal of accessibility barriers in Spain

Based on the data, people with disabilities and older people, i.e., the direct beneficiaries of accessibility represent almost a fifth of the world population, totalling between 1.3 and 1.6 billion. In Europe and the United States, the figures are larger, encompassing more than a quarter of the population. Moreover, there is an increasing number of consumers with disabilities and older people who demand goods and tourist services, who together with families with children have increased their number of trips. These three groups have similar needs for accessible tourism (Rains, 2008). According to the European Commission (1996), the approximate figures total 35 million potential overnight travellers and 630 million overnight stays each year (see Table 4). However, as the document itself points out, not everyone is able to experience tourism. In some cases, their disabilities prevent them from travelling and, in others; their economic conditions prevent them from doing so. In contrast, there are other groups that would benefit from accessibility, such as pregnant women, people with transitory physical disabilities, people with temporarily reduced mobility or communication, or families with children, as discussed above.


Table 4. Overall demand of European tourists with disabilities

The WTO estimates that by 2050, the population aged 60 and over will make more than 2 billion international trips as compared to 593 million in 1999 (Patterson, 2006:214). In Spain, 75% of couples without children in which the head of the family is between 51-64 years of age made some kind of trip last year (ITS, 2010) and thus comprise the third most travelled group as compared with the rest of the Spanish population.

### **5. Profile and behaviour**

150 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

People with disabilities 3,528,221 8.8% - INE - EDDES, 1999. People older than 64 years of age 6,434,609 16% - INE - EDDES, 1999. No disability 4,361,957 10.9% - INE - EDDES, 1999. People without disabilities¹ 7,828,635 19.5% - INE-EPA, 1999a. Pregnant women² 209,475 0.5% - INE - EMH, 1997. Temporarily disabled people 515,140 1.3% - INE- EMH, 1997.

Total Spanish population 40,202,160 100% - INE - EDDES, 1999. ¹ A member is considered to be a person younger than 65 for each family unit, forming part of the collective of beneficiaries from the removal of accessibility barriers due to transitory circumstances. ² Includes people affected by fractures, trauma, sprains and injuries to ligaments and bones. Sources: National Statistical Institute, documents from the Survey on Disabilities, Impairments and Health Status (EDDES), Labour Force Survey (LFS), Hospital Morbidity Survey (EMH) and

Based on the data, people with disabilities and older people, i.e., the direct beneficiaries of accessibility represent almost a fifth of the world population, totalling between 1.3 and 1.6 billion. In Europe and the United States, the figures are larger, encompassing more than a quarter of the population. Moreover, there is an increasing number of consumers with disabilities and older people who demand goods and tourist services, who together with families with children have increased their number of trips. These three groups have similar needs for accessible tourism (Rains, 2008). According to the European Commission (1996), the approximate figures total 35 million potential overnight travellers and 630 million overnight stays each year (see Table 4). However, as the document itself points out, not everyone is able to experience tourism. In some cases, their disabilities prevent them from travelling and, in others; their economic conditions prevent them from doing so. In contrast, there are other groups that would benefit from accessibility, such as pregnant women, people with transitory physical disabilities, people with temporarily reduced mobility or

**OVERALL DEMAND** 

The WTO estimates that by 2050, the population aged 60 and over will make more than 2 billion international trips as compared to 593 million in 1999 (Patterson, 2006:214). In Spain,


**population Source or reference** 

**Beneficiaries of accessibility Estimate % of the** 

*Total affected by barriers 15,718,813 39.1%* 

Accessibility White Paper (Ministry of Labour and Social Affairs, 2002 and 2003). Table 3. Beneficiaries of the removal of accessibility barriers in Spain

communication, or families with children, as discussed above.


of 35 million travellers who stay overnight and 630 million hotel nights

Table 4. Overall demand of European tourists with disabilities

domestically. - 22 million local day trips.

annually.

Europe

To study the profile and behaviour of the segments of tourists with disabilities and senior tourists, we have chosen to conduct the analyses separately (despite their similar needs) in order to establish their behaviours more clearly and concisely.

#### **5.1 Disabled tourists**

The literature on the segmentation of tourists with disabilities in Europe is scarce; above all, there is mostly public institutional and organisational research, for which a clear statistical methodology was generally applied.

Here, we examine two of the most relevant studies. The first is the Federal Ministry of Economics and Technology of Germany (2004), which conducted a survey of German tourists with disabilities, highlighting the following main conclusions:


The other study is the National Agency for New Technologies, Energy and Environment of Italy (ENEA) (1999). The primary conclusions are summarised below:


To analyse the segment of Spanish tourists with disabilities, we began with the premise that people with disabilities form a group of users with the widest range of needs and, therefore, requirements. The identification of their profile and behaviour was conducted through quantitative research. Thus, for data collection, a quota sampling was used, dividing the population into distinct subpopulations. The sample population analysed consisted of Spanish tourists with disabilities, with a sample size of 404 valid questionnaires and a confidence level of 95.5%. Using the NSI (1999) and Eurostat (2005) data as the basis, four key elements for structuring the sample were established: gender (male / female), age (17-64 years of age / 65 and over), autonomous region (20 in total) and type of disability (physical, mental, sensory and hidden).


Table 5. Segmentation, behaviours and habits of tourists with disabilities

New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 153

Initially, the main customer segments were established according to their sociodemographic and economic characteristics. Subsequently, we studied the habits and behaviours of tourists with disabilities in Spain by type, as the needs of different groups are not always homogeneous (see Table 5). The results are synthesised in Table 5 and, due to the size of the data sample, exclude secondary and partially relevant aspects. The four groups identified in the table are the result of a cluster analysis that included the socio-demographic

The Spanish tourist with disabilities can be characterised as a user who generally chooses Spain as a destination, mainly looks to relax, travels with his/her family in the summer, stays at hotels and has an average expenditure of between 500 € and 750 € over 5 days. In addition, the segment of people younger than 65 years of age generally takes more than one trip per year given that they love to travel and have a monthly family income of between 1,200 € and 3,000 €. It is surprising that the group that travels the most comprises people with a severe degree of disability, i.e., those who have between 50% and 95% of their capabilities limited. It is important to highlight that the different disability groups all agree that the staff for the tourism sector should be better trained in order to attend to specific user needs. Last but not least, the study shows that architectural as well as human barriers are a constant, with the exception of the group with sensory disabilities, who highlighted

One of the areas most relevant to the elderly is their leisure time, mainly their leisure time dedicated to tourism, which influences their physical, mental and social well-being (Lee and Tideswall, 2005; Vellas, 1986). In fact, it is possible to increase one's life expectancy and counteract the aging process by helping the person stay active. Travelling can also help people avoid loneliness and lack of meaning in the later stages of life, which are some of the main problems that older people have today (Marín, García-González and Troyano, 2006). Among the positive effects of leisure in the life of the elderly, Lee and Tideswell (2005) highlight life satisfaction. Travelling can be an enriching experience for senior citizens as it provides a change in their daily routine and the benefits of new experiences. Tourist activity involves movement / displacement to a different place from the place of residence, a form or manifestation of leisure, discovery, interaction with the environment, intercultural contact and social interaction. Santos (1992:36) found that older consumers spend more of

As the tourist profile of the senior is not clearly established and there are several discussions about their socio-demographic characteristics, it was assumed that they are over 55 years of age, usually retired with pensions or social benefits, and have leisure time to devote to travelling at any time of the year. Delving a little deeper into their socio-demographic


and ignores the changes that are occurring in the role of adult women today.

characteristics of the sample and travel-related variables.

communication and transportation barriers.

their income on travel and less on other things.

characteristics, we suggest that:

**5.2 The senior tourist** 

Initially, the main customer segments were established according to their sociodemographic and economic characteristics. Subsequently, we studied the habits and behaviours of tourists with disabilities in Spain by type, as the needs of different groups are not always homogeneous (see Table 5). The results are synthesised in Table 5 and, due to the size of the data sample, exclude secondary and partially relevant aspects. The four groups identified in the table are the result of a cluster analysis that included the socio-demographic characteristics of the sample and travel-related variables.

The Spanish tourist with disabilities can be characterised as a user who generally chooses Spain as a destination, mainly looks to relax, travels with his/her family in the summer, stays at hotels and has an average expenditure of between 500 € and 750 € over 5 days. In addition, the segment of people younger than 65 years of age generally takes more than one trip per year given that they love to travel and have a monthly family income of between 1,200 € and 3,000 €. It is surprising that the group that travels the most comprises people with a severe degree of disability, i.e., those who have between 50% and 95% of their capabilities limited. It is important to highlight that the different disability groups all agree that the staff for the tourism sector should be better trained in order to attend to specific user needs. Last but not least, the study shows that architectural as well as human barriers are a constant, with the exception of the group with sensory disabilities, who highlighted communication and transportation barriers.

#### **5.2 The senior tourist**

152 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Table 5. Segmentation, behaviours and habits of tourists with disabilities

One of the areas most relevant to the elderly is their leisure time, mainly their leisure time dedicated to tourism, which influences their physical, mental and social well-being (Lee and Tideswall, 2005; Vellas, 1986). In fact, it is possible to increase one's life expectancy and counteract the aging process by helping the person stay active. Travelling can also help people avoid loneliness and lack of meaning in the later stages of life, which are some of the main problems that older people have today (Marín, García-González and Troyano, 2006). Among the positive effects of leisure in the life of the elderly, Lee and Tideswell (2005) highlight life satisfaction. Travelling can be an enriching experience for senior citizens as it provides a change in their daily routine and the benefits of new experiences. Tourist activity involves movement / displacement to a different place from the place of residence, a form or manifestation of leisure, discovery, interaction with the environment, intercultural contact and social interaction. Santos (1992:36) found that older consumers spend more of their income on travel and less on other things.

As the tourist profile of the senior is not clearly established and there are several discussions about their socio-demographic characteristics, it was assumed that they are over 55 years of age, usually retired with pensions or social benefits, and have leisure time to devote to travelling at any time of the year. Delving a little deeper into their socio-demographic characteristics, we suggest that:


New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 155

Spend time with family and friends

Try new things/visit new places

Visit places they have always wanted to visit

**location Senior citizen motivations** 

Travel while health is good

Make the most of free time

Escape the daily routine Interact with other people

The three most important: Rest and relaxation Meet people and socialise

Enjoy natural attractions

Rest and relaxation Occupy free time

of both groups.

in their daily life

Table 6. Research on the motivations of senior citizen tourists

**5.2.2 Behaviour of the senior tourist** 

with the highest incidence are analysed below.

when choosing accommodations.

Be with family and friends

Visit new places and try new things

The two most important motivations are:

The travel patterns and behaviours of senior citizens are very diverse, as was the case with their motivations. Thus, one can observe differences in their choices for food, accommodations, shopping and entertainment, among others (Bai *et al., 2001:148*).Those

 *Type of accommodation.* Keep in mind that the type of accommodation used when travelling will be intrinsically linked to factors such as the reason for travel, income and company. In this regard, senior citizen tourists demonstrate a broad range of selection

There were no significant differences between the motivations

See things during vacations that they would not normally see

Rest and relax

Vacations Visit family

Be with family

**Authors and study** 

Horneman, Carter, Wey

Queensland (Australia)

and Ruys (2002)

Acevedo (2003)

Hossain, Bailey and Lubulwa (2003)

Huang and Tsai (2003)

Tapei and Kaohsiung

Lee and Tideswell (2005)

Brazil

Australia

(Taiwan)

Korea

Chen (2009)

Tainan (Taiwan)


Accordingly, an interesting endeavour is to try to analyse the variables that allow for an understanding of the causes of why an older person travels or not, together with his or her needs, preferences and desires, which are key elements to discern to respond to their needs and enable them to access tourism. Variables such as the sources of information used, type of accommodation, number of people travelling, trip preparation time, travel duration, means of transport used and type of trip help to describe the behaviour of senior tourists, along with data on their motivations and socio-demographic characteristics.

#### **5.2.1 Motivations of senior tourists**

From a theoretical point of view, experts in the field of motivation have stated that motivation is involved in the reasons for our behaviour; an understanding of motivations is essential to understanding the decision-making process of travellers and fundamental to assessing their satisfaction with their tourism experiences (Pearce, 1982; Snepenger, King, Marshall and Uysal, 2006). The following table provides a brief description of the research that has been reviewed on the motivations of senior tourists and broader works in which the variables of motivation or reasons for travel were included in the study.

As can be observed, this market is not homogenous and different reasons can influence the choice of tourist activity. Senior citizens travel for many reasons, especially for: rest and relaxation, socialising, seeing new places and partaking in new experiences (Fleischer and Pizam, 2002). These reasons will depend on many factors including the person's sociocultural context, education and work environment.



depend on the characteristics of an older population (Moschis, 1993).

along with data on their motivations and socio-demographic characteristics.

variables of motivation or reasons for travel were included in the study.

cultural context, education and work environment.

Accordingly, an interesting endeavour is to try to analyse the variables that allow for an understanding of the causes of why an older person travels or not, together with his or her needs, preferences and desires, which are key elements to discern to respond to their needs and enable them to access tourism. Variables such as the sources of information used, type of accommodation, number of people travelling, trip preparation time, travel duration, means of transport used and type of trip help to describe the behaviour of senior tourists,

From a theoretical point of view, experts in the field of motivation have stated that motivation is involved in the reasons for our behaviour; an understanding of motivations is essential to understanding the decision-making process of travellers and fundamental to assessing their satisfaction with their tourism experiences (Pearce, 1982; Snepenger, King, Marshall and Uysal, 2006). The following table provides a brief description of the research that has been reviewed on the motivations of senior tourists and broader works in which the

As can be observed, this market is not homogenous and different reasons can influence the choice of tourist activity. Senior citizens travel for many reasons, especially for: rest and relaxation, socialising, seeing new places and partaking in new experiences (Fleischer and Pizam, 2002). These reasons will depend on many factors including the person's socio-

consumption of senior citizens.

**5.2.1 Motivations of senior tourists** 


Table 6. Research on the motivations of senior citizen tourists

#### **5.2.2 Behaviour of the senior tourist**

The travel patterns and behaviours of senior citizens are very diverse, as was the case with their motivations. Thus, one can observe differences in their choices for food, accommodations, shopping and entertainment, among others (Bai *et al., 2001:148*).Those with the highest incidence are analysed below.

 *Type of accommodation.* Keep in mind that the type of accommodation used when travelling will be intrinsically linked to factors such as the reason for travel, income and company. In this regard, senior citizen tourists demonstrate a broad range of selection when choosing accommodations.

New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 157

 *Sources of information used.* Varying sources of travel information are used. In several studies, there have been a number of interesting conclusions about the sources of information used by older people (Chen, 2009; Cleaver, 2000; Horneman *et al.*, 2002;

 The main source of information for this group is their experience as consumers. The information search process is conditioned by the consumer's income,

These consumers tend to collect information personally, which they then contrast

 Above all, they obtain information through family, friends, acquaintances, neighbours and word of mouth. Ananth, DeMicco, Moreo and Howey (1992) demonstrated that the comments concerning a hotel and its reputation play an important role in decision-making by older travellers when choosing a hotel. Older people also read a lot and listen to the radio. Therefore, the press and radio are very effective means to reach senior citizen tourists. Horneman *et al.* (2002) confirmed that the print media and travel agents were highly valued by this group, and Shim *et al.* (2005) highlighted the importance of mass media as a source

 According to Grande (1993), the information that a company provides through its brochures or catalogues will not be widely read by older people. On the other hand, Ryan (1995) suggested that leaflets are the preferred media chosen by senior citizens and, according to this author, have a strong influence on the chosen

When presenting figures for the potential profitability of the tourism sector associated with offering services to senior citizen tourists and visitors with disabilities, both in Europe and in Spain, it is important to reinforce the idea that this is not a niche offering, but rather expands current segments by differentiating based on accessibility and usability as quality

As already mentioned, not all people with disabilities are able to travel, but according to Van Horn (2002), 70% of Europeans with various accessibility needs are physically and financially able to travel and do so with an average of 0.5 companions per potential traveller. A fact that reinforces this statement is that of 4,000 respondents in the German study, 52% of the respondents travelled with a partner (German Federal Ministry of Economics and Technology, 2004). On average, 59% of European households have a member with a disability and 38% of the population have a friend with a disability (Eurobarometer, 2001). On average, disabled people would take more than one vacation per year, travelling with more family members or friends, if they could find more and better

especially younger ones who prefer to organise their trips themselves.

educational level and degree of socialisation.

**6. Sector Profitability – The cases of Europe and Spain** 

parameters and, thus, increases satisfaction and loyalty among tourists.

information about accessible sites (Buhalis *et al.*, 2005).

with that provided by external media.

Grande, 1993; Shim *et al.*, 2005):

of information.

destination.

2006:146) found relationships between the type of trip chosen and the traveller's employment status and income, among other factors; they suggested that retired senior citizens who depend on a retirement income prefer tour packages because these are cheaper, compared with senior citizens who are still active in the labour market and younger individuals. On the other hand, senior citizens also travel independently,


 *Travel Companions*. Senior citizen tourists are very heterogeneous in this respect and this heterogeneity, as with the previous variable, arises from factors such as family

 *Travel time preparation.* A better understanding of this behavioural variable, along with the source of information used by senior citizens when planning their trips, will be key to creating effective marketing to reach the target population efficiently and at the minimum cost. Some studies, for example, Gitelson and Crompton (1983), have stated that those who travel for longer periods of time and at greater distances plan further in advance. Conversely, those who visit family and friends plan less. Rao, Thomas and Javalgui (1992) found that those involved in more activities and who spend more have a longer planning horizon for their trips, and Fodness and Murray (1997 in Huh, 2006) have suggested that those who enjoy a longer stay, a greater number of destinations, visit more attractions and spend more dedicate more time to planning their trips. *Duration of the trip*. There is a wide disparity of opinions regarding this variable. However, it is commonly believed that senior tourists enjoy a longer stay than the rest of the population (VVAA in Batra, 2009:200). However, Bai *et al.* (1999:76) list the studies of several authors in this regard who note that the length of a senior citizen's trip can range from 1 to 3 nights, 4 to 5 nights or even up to 9 nights. Thus, there is no consensus on the typical duration of the senior citizen's trip, perhaps as a result of the homogeneity with which the collective of older travellers is treated by the tourism market and the lack of unified criteria when segmenting this group, as identified in the

 *Means of transport*. The car, in particular the private car, is the preferred mode of transportation by senior citizens for leisure travel, followed by planes and trains (Javalgi *et al.*, 1992 in Patterson, 2006; Prideaux *et al.*, 2001). However, it should also be noted that the bus is a very recurrent theme in this segment, highlighting its frequency of use as compared to the younger population (Baloglu and Shoemaker, 2001; VVAA in Patterson, 2006). The profile of the senior tourist that uses the bus as a means of transport is, according to Patterson (2006), typically a couple. However, Javalgi *et al.* (Patterson, 2006) have claimed that, after 65 years of age, the popularity of the car as the preferred mode of transportation by senior citizens decreases as age increases, with a tendency towards travel by bus, which is used more as the population ages. However, the means of transport is closely related to other factors related to tourism behaviours. In particular, the type of trip will determine the use of one type of transport or another. Moreover, this choice will also be influenced by the factors such as the

reason for travel and the travel distance and destination (Patterson, 2006).

 *Organisation of travel*. Tour packages are one of the options preferred by the senior citizen versus the non-senior (Javalgi *et al.*, in Bai *et al.*, 2001), mainly for reasons of convenience, security and to have travel companions (Patterson, 2006). This is an alternative travel mode compared to travelling independently, especially for those senior citizens who are single, widowed or divorced (Patterson, 2006). There are many studies linking the package tour to people of advanced ages, using age as the sole criterion of segmentation (Bai *et al.*, 1999). However, some of these studies (Bai *et al.*, 2001; Javalgi *et al*., in Patterson 2006) have shown that age is only one of the variables that explain this behaviour and there are other variables such as sex, income, employment status, and type of companion. In this sense, Javalgi *et al.* (Patterson,

circumstances, income and occupation.

study by the authors.

2006:146) found relationships between the type of trip chosen and the traveller's employment status and income, among other factors; they suggested that retired senior citizens who depend on a retirement income prefer tour packages because these are cheaper, compared with senior citizens who are still active in the labour market and younger individuals. On the other hand, senior citizens also travel independently, especially younger ones who prefer to organise their trips themselves.

	- The main source of information for this group is their experience as consumers.
	- The information search process is conditioned by the consumer's income, educational level and degree of socialisation.
	- These consumers tend to collect information personally, which they then contrast with that provided by external media.
	- Above all, they obtain information through family, friends, acquaintances, neighbours and word of mouth. Ananth, DeMicco, Moreo and Howey (1992) demonstrated that the comments concerning a hotel and its reputation play an important role in decision-making by older travellers when choosing a hotel.
	- Older people also read a lot and listen to the radio. Therefore, the press and radio are very effective means to reach senior citizen tourists. Horneman *et al.* (2002) confirmed that the print media and travel agents were highly valued by this group, and Shim *et al.* (2005) highlighted the importance of mass media as a source of information.
	- According to Grande (1993), the information that a company provides through its brochures or catalogues will not be widely read by older people. On the other hand, Ryan (1995) suggested that leaflets are the preferred media chosen by senior citizens and, according to this author, have a strong influence on the chosen destination.

#### **6. Sector Profitability – The cases of Europe and Spain**

When presenting figures for the potential profitability of the tourism sector associated with offering services to senior citizen tourists and visitors with disabilities, both in Europe and in Spain, it is important to reinforce the idea that this is not a niche offering, but rather expands current segments by differentiating based on accessibility and usability as quality parameters and, thus, increases satisfaction and loyalty among tourists.

As already mentioned, not all people with disabilities are able to travel, but according to Van Horn (2002), 70% of Europeans with various accessibility needs are physically and financially able to travel and do so with an average of 0.5 companions per potential traveller. A fact that reinforces this statement is that of 4,000 respondents in the German study, 52% of the respondents travelled with a partner (German Federal Ministry of Economics and Technology, 2004). On average, 59% of European households have a member with a disability and 38% of the population have a friend with a disability (Eurobarometer, 2001). On average, disabled people would take more than one vacation per year, travelling with more family members or friends, if they could find more and better information about accessible sites (Buhalis *et al.*, 2005).

New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 159

accessibility. By applying the multiplier effect of travel with 2 relatives or friends, we can calculate a potential demand of 32.97 million Spaniards out of a total population of 40.20 million people (according to the original study, i.e., NSI 1999). This is 82% of the population, to which would be added the percentage of people who do not travel; hence, the segment we consider in this scenario includes, directly and indirectly, nearly all of the Spanish population. Therefore, the potential revenue would range from nearly 8,000 million € in the

> **Number of friends and family**

0.5 5.49 million 16.48

million

If the data discussed above are extrapolated to the entire tourism sector, the travel expenditure by the tourist resident in Spain, depending on the scenario chosen, would represent a range between 5.86% of total expenditure by Spanish tourists both nationally and internationally, when including only Spanish tourists with disabilities who travel with 0.5 companions once a year for an average duration of 5 days, up to an estimate of 97.32% of total expenditure by Spanish tourists, which includes all the potential beneficiaries of accessibility, travelling with an average of 2 relatives or friends and taking a trip with an

> **Domestic and international travel expenditure by Spanish residents (Familitur, 2010)**

> > 32,757.28 million €

Table 9. Potential weight of the influence of accessibility on the entire Spanish tourist

3,858.33 million € 11.77% 7,716.66 million € 23.55% 7,968.08 million € 24.32% 15,936.16 million € 48.64% 31,881.99 million € 97.32%

<sup>2</sup>21.98

Table 8. Scenario 2. Potential Spanish tourism market that benefits from increased

**TOTAL potential market of travellers**

million

32.97 million

**Average spending per person and per vacation1** 

> 10 days

> 5 days

> 10 days

> 5 days

**Percentage of potential revenue compared to total expenditure by Spanish tourists** 

5.86%

96.70 €

**Potential revenues from tourism** 

15,936.16 million €

7,968.08 million €

31,881.99 million €

15,936.16 million €

most negative case to 31,881 million € in the most positive case.

**Multiplier effect of friends and family** 

**Overall Demand** 

15.7

**Scenario s** 

\_

+

industry

million 10.99 million

**70% are physically and financially able to travel**

accessibility and the associated tourism revenue

average duration of 10 days each year.

**Potential tourism revenue from beneficiaries of accessibility** 

1,929.16 million €

If we combine all of the elements listed above, we can talk of a beneficiary market of more than 260 million disabled and older people that would generate tourism revenues of 166 billion euros (Eurostat, 2005), as can be seen more clearly in Table 7.


Source: Eurostat, 2005.

Table 7. Potential market of European travellers that would benefit from increased accessibility and the associated tourism revenue.

The estimates presented above could be higher, mainly for two reasons. First, the calculations are based on the assumption that European citizens will take their holiday in Europe, but there are also tourists around the world who choose Europe as a holiday destination who have not been included. The estimate of potential travellers worldwide is between 600 and 900 million people. Second, the numbers cited refer only to people with disabilities or direct beneficiaries of accessibility while, as already mentioned, accessibility benefits all users (Buhalis *et al.*, 2005).

Considering the facts presented above, the ignorance of the market towards the large group of disabled people seems incomprehensible. Nadine Vogel (2006) put forward three main reasons to explain this fact: people are generally uncomfortable with the disabled, the special needs of these groups are considered a "niche" and companies are afraid to "do it wrong".

Thus, the lack of accessibility of the tourism industry in relation to its goods, services and environments can result in three scenarios, (Franco, 1999):


To identify the beneficiaries of accessibility and to identify the potential revenue for the tourism sector in Spain, we drew on the model designed by Eurostat (see Table 7) and the variable studied in the original model proposed by Eurostat, i.e., accessibility beneficiaries: the disabled, elderly, temporarily disabled and those with similar restricted capabilities. This effort was based on the data analysed in Table 3, the results from the quantitative study, that is, an initial demand of 15.7 million people who are beneficiaries of

If we combine all of the elements listed above, we can talk of a beneficiary market of more than 260 million disabled and older people that would generate tourism revenues of 166

> **Number of friends and family**

million

million

The estimates presented above could be higher, mainly for two reasons. First, the calculations are based on the assumption that European citizens will take their holiday in Europe, but there are also tourists around the world who choose Europe as a holiday destination who have not been included. The estimate of potential travellers worldwide is between 600 and 900 million people. Second, the numbers cited refer only to people with disabilities or direct beneficiaries of accessibility while, as already mentioned, accessibility

Considering the facts presented above, the ignorance of the market towards the large group of disabled people seems incomprehensible. Nadine Vogel (2006) put forward three main reasons to explain this fact: people are generally uncomfortable with the disabled, the special needs of

Thus, the lack of accessibility of the tourism industry in relation to its goods, services and




To identify the beneficiaries of accessibility and to identify the potential revenue for the tourism sector in Spain, we drew on the model designed by Eurostat (see Table 7) and the variable studied in the original model proposed by Eurostat, i.e., accessibility beneficiaries: the disabled, elderly, temporarily disabled and those with similar restricted capabilities. This effort was based on the data analysed in Table 3, the results from the quantitative study, that is, an initial demand of 15.7 million people who are beneficiaries of

these groups are considered a "niche" and companies are afraid to "do it wrong".

advantage, but really are not, they will take on costs of non-quality.

environments can result in three scenarios, (Franco, 1999):

0.5 44.7

<sup>2</sup>178.6

Table 7. Potential market of European travellers that would benefit from increased

**TOTAL potential market of travellers**

134

267.9

million 620 €

**Average spending per person and per vacation1** 

million 166 billon €

**Potential revenues from tourism** 

83 billion €

billion euros (Eurostat, 2005), as can be seen more clearly in Table 7.

**Multiplier effect of friends and family** 

**Overall Demand** 

127.5

million 89.3 million

Source: Eurostat, 2005.

**70% are physically and financially able to travel** 

accessibility and the associated tourism revenue.

benefits all users (Buhalis *et al.*, 2005).

offered is of lower quality.

companions).

accessibility. By applying the multiplier effect of travel with 2 relatives or friends, we can calculate a potential demand of 32.97 million Spaniards out of a total population of 40.20 million people (according to the original study, i.e., NSI 1999). This is 82% of the population, to which would be added the percentage of people who do not travel; hence, the segment we consider in this scenario includes, directly and indirectly, nearly all of the Spanish population. Therefore, the potential revenue would range from nearly 8,000 million € in the most negative case to 31,881 million € in the most positive case.


Table 8. Scenario 2. Potential Spanish tourism market that benefits from increased accessibility and the associated tourism revenue

If the data discussed above are extrapolated to the entire tourism sector, the travel expenditure by the tourist resident in Spain, depending on the scenario chosen, would represent a range between 5.86% of total expenditure by Spanish tourists both nationally and internationally, when including only Spanish tourists with disabilities who travel with 0.5 companions once a year for an average duration of 5 days, up to an estimate of 97.32% of total expenditure by Spanish tourists, which includes all the potential beneficiaries of accessibility, travelling with an average of 2 relatives or friends and taking a trip with an average duration of 10 days each year.


Table 9. Potential weight of the influence of accessibility on the entire Spanish tourist industry

New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 161

population of between 1.3 and 1.6 billion worldwide, 135 million in Europe and approximately 10 million in Spain. Understandably, not all of these people are able to travel, either because of health, economic or other limitations, but the data indicate that there is a potential European tourist revenue from beneficiaries of accessibility that varies between 83 and 166 billion € depending on the number of companions. For the specific case of Spain, depending on the length of stay and the number of companions, the figure varies between 8,000 and 16,000 million €. Accessibility, directly and indirectly, benefits everyone, as can be observed by its potential influence on the entire Spanish tourist industry, for which the most positive scenario indicates that this segment of tourism could account for 97.3% of the

The appeal of attracting senior and disabled tourists in order to generate elements for new opportunities has been confirmed. Now, we wait for both the private and the public sectors to begin to develop their interest by increasing the supply of tourism products that meet accessibility parameters by and for all, i.e., increasing the quality of tourism offerings.

This research was made possible by funding from the Xunta de Galicia, project

Acevedo, C.R. (2003). Motivos para viajar: um estúdio com turistas maduros no contexto brasileiro. *FACEP PESQUISA*, Vol.6, No. 3, pp. 78-87, ISSN 1516-6503. Alcaide, J. (2005). ¿Dónde está el Marketing para mayores? *Marketing+Ventas*, nº 205, sept., pp.

Álvarez, C. (2006). Un ejemplo para Europa*. Hosteltur.* 04.05.2009, Available from:

Anken, A.K.; Chaipooopirutana, S. & Combs, H. (2008). Psychographics and Patronage

Bai, B., Jang, S.S., Cai, L.A. & O´Leary, J.T. (2001). Determinants of travel mode choice of senior

Bai, B., Smith, W., Cai, L. & O´LEary, J. (1999). Senior sensitive segments: Looking at travel

Barak, B. & Schiffman L.G. (1981). Cognitive age: A nonchronological age variable. *Advances in* 

Batra, A. (2009). Senior pleasure tourists: examination of their demography, travel experience,

Behaviour of Mature Consumers in Thailand. *International Review of Business Research* 

travelers to the United States. *Journal of Hospitality & Leisure Marketing*, Vol. 8, No.3/4,

behavior. In: K. S. Chon (Ed.), *The Practice of Graduate Research in Hospitality and Tourism* (pp. 75-89). ISBN: 0789007274, New York: The Haworth Hospitality Press. Baloglu, S. & Soemaker, S. (2001). Prediction of senior travelers´ motorcoach use from

demographic, psychological, and psychographic characteristics. *Journal of Travel* 

and travel behavior upon visiting the Bangkok metropolis. *International Journal of Hospitality & Tourism Administration*, Vol. 10, No. 3, pp. 197-212, ISSN: 1525-6499.

potential revenue from travel expenditures made by Spanish tourists.

**8. Acknowledgment** 

46-57, ISSN: 1130-8761.

http://www.hosteltur.com.

pp.147-168, ISSN: 1541-0897.

*Papers*, Vol. 4, No 1, pp. 45-56, ISSN: 1832-9543.

*Research*, Vol. 40, No.1, pp.12-18, ISSN: 1552-6763.

*Consumer Research*, Vol.8, pp.602-606, ISSN: 0098-9258.

09TUR005394PR.

**9. References** 

Both in the low (-) scenarios, as in the highest estimate, the estimated profitability is sufficient for public and private organisations to make an effort to seize the opportunity that is generated by expanding the tourism market and working on the basis of increases in quality and social responsibility.

#### **7. Conclusions**

At the beginning of this chapter, three clear objectives linked to senior tourism and accessible tourism were proposed: to determine the profile and behaviour of tourists from these segments, to identify the potential market opportunities and to estimate the economic revenues for Europe and Spain.

After carrying out this study, it can be concluded that in reference to the user profile and behaviour, there are groups with a range of superior needs who have a common characteristic, accessibility, who are considered to be any person able to use and enjoy products, tourist infrastructure and services. Focusing on the importance of the synergy between the two groups (elderly and disabled), one can establish that their demographic profiles are important but not decisive for the creation of tourism product offerings. Variables such as gender and age do not have a great influence on travellers' priorities, while educational level, occupation and status have a greater weight, as they are part of the lifestyle determinants of these segments. When we instead focus on behavioural elements, we reveal more accurate and determinate actions for establishing possible strategies to increase accessibility. It should be stressed that, for both segments, the main reasons for travel are searching for relaxation and rest, preferably using one's own vehicle (although this also depends on the destination of choice), with two main ranges of trip duration, not more than 3 or 4 days or 9 to 10 days. Accommodation choices are variable, but hotel stays are the most common, and word-of-mouth information is an important source of information for travel arrangements.

In terms of the market opportunities that exist and can be developed in the future, the potential of shifting tourism away from peak seasons is favoured, as most members of these groups do not perform paid work activities and receive some social benefits, which makes it possible for them to travel throughout the year, and they also have the purchasing power to do so. Moreover, in the case of Spain, this tendency is enhanced by the various state-run social programmes that co-finance holidays for the elderly or disabled. Non-seasonal tourism increases revenues and the use of infrastructure throughout the year, boosting destinations and, most importantly, creating jobs. It should be highlighted that these segments are not niche markets, but by expanding the market through improving products and services associated with accessibility, businesses increase their market potential and improve their image by increasing the quality and competitiveness of their tourism offerings.

Once we know how potential tourists who require accessibility behave and determine the opportunities that can be generated for different components of the tourism sector, both private and public, we still need to confirm whether this segment of tourism is attractive enough to make an effort to adapt and capture it through the supply of tourism goods and services. As has been noted, the potential market for elderly and disabled people varies according to the reference source, but if we summarise the data, we can estimate a target population of between 1.3 and 1.6 billion worldwide, 135 million in Europe and approximately 10 million in Spain. Understandably, not all of these people are able to travel, either because of health, economic or other limitations, but the data indicate that there is a potential European tourist revenue from beneficiaries of accessibility that varies between 83 and 166 billion € depending on the number of companions. For the specific case of Spain, depending on the length of stay and the number of companions, the figure varies between 8,000 and 16,000 million €. Accessibility, directly and indirectly, benefits everyone, as can be observed by its potential influence on the entire Spanish tourist industry, for which the most positive scenario indicates that this segment of tourism could account for 97.3% of the potential revenue from travel expenditures made by Spanish tourists.

The appeal of attracting senior and disabled tourists in order to generate elements for new opportunities has been confirmed. Now, we wait for both the private and the public sectors to begin to develop their interest by increasing the supply of tourism products that meet accessibility parameters by and for all, i.e., increasing the quality of tourism offerings.

#### **8. Acknowledgment**

This research was made possible by funding from the Xunta de Galicia, project 09TUR005394PR.

#### **9. References**

160 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Both in the low (-) scenarios, as in the highest estimate, the estimated profitability is sufficient for public and private organisations to make an effort to seize the opportunity that is generated by expanding the tourism market and working on the basis of increases in

At the beginning of this chapter, three clear objectives linked to senior tourism and accessible tourism were proposed: to determine the profile and behaviour of tourists from these segments, to identify the potential market opportunities and to estimate the economic

After carrying out this study, it can be concluded that in reference to the user profile and behaviour, there are groups with a range of superior needs who have a common characteristic, accessibility, who are considered to be any person able to use and enjoy products, tourist infrastructure and services. Focusing on the importance of the synergy between the two groups (elderly and disabled), one can establish that their demographic profiles are important but not decisive for the creation of tourism product offerings. Variables such as gender and age do not have a great influence on travellers' priorities, while educational level, occupation and status have a greater weight, as they are part of the lifestyle determinants of these segments. When we instead focus on behavioural elements, we reveal more accurate and determinate actions for establishing possible strategies to increase accessibility. It should be stressed that, for both segments, the main reasons for travel are searching for relaxation and rest, preferably using one's own vehicle (although this also depends on the destination of choice), with two main ranges of trip duration, not more than 3 or 4 days or 9 to 10 days. Accommodation choices are variable, but hotel stays are the most common, and word-of-mouth information is an important

In terms of the market opportunities that exist and can be developed in the future, the potential of shifting tourism away from peak seasons is favoured, as most members of these groups do not perform paid work activities and receive some social benefits, which makes it possible for them to travel throughout the year, and they also have the purchasing power to do so. Moreover, in the case of Spain, this tendency is enhanced by the various state-run social programmes that co-finance holidays for the elderly or disabled. Non-seasonal tourism increases revenues and the use of infrastructure throughout the year, boosting destinations and, most importantly, creating jobs. It should be highlighted that these segments are not niche markets, but by expanding the market through improving products and services associated with accessibility, businesses increase their market potential and improve their image by increasing the quality and

Once we know how potential tourists who require accessibility behave and determine the opportunities that can be generated for different components of the tourism sector, both private and public, we still need to confirm whether this segment of tourism is attractive enough to make an effort to adapt and capture it through the supply of tourism goods and services. As has been noted, the potential market for elderly and disabled people varies according to the reference source, but if we summarise the data, we can estimate a target

quality and social responsibility.

revenues for Europe and Spain.

source of information for travel arrangements.

competitiveness of their tourism offerings.

**7. Conclusions** 


New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 163

Gerlin, A. (2005): Access Denied. *Time Europe*, Vol. 165, No.15. 30.03.2007, Available from: http://www.time.com/time/europe/magazine/article/0,13005,901050411-

Gilson, S.F. & Depoy, E. (2000). Multiculturalism and Disability: a critical perspectiva.

Gitelson, R.J. & Crompton, J.L. (1983). The Planning Horizons and Sources of Information

González, A.M.; Rodríguez, C.; Miranda, M.R. & Cervantes, M. (2009). Cognitive age as a

Gunter, B. (1998). *Understanding the older consumer: the grey market.* ISBN 9780415186445*,* 

Heumann, J.E. (1993). Bulding our own boats: a personal perspective on disability policy.

Horgan-Jones, M. & Ringaert, L. (2004). Accessible Tourism in Manitoba. 04.03.2007, Available

Horneman, L. Carter, R.W., Wei, S. & Ruys, H. (2002). Profiling the senior traveler: An

Hossain, A., Bailey, G. & Lubulwa, M. (2003). Characteristics and Travel Patterns of Older

Hsu, C.H.C. & Lee, E.J. (2002). Segmentation of Senior Motor coach Travelers. *Journal of Travel* 

Huang, L. & Tsai, H-T. (2003). The study of senior traveler in Taiwan. *Tourism Management,* 

Huh, C. (2006). *A study of changes in patterns of travel behavior over time: a cohort analysis approach.* 

Institute of Touristic Studies (IET) (2010). El turismo español en cifras, 2010. Informe Familitur.

*Americans.* ISBN: 978-1557661197, O. Gostin & H.A. Beyer Eds.

http://www.ttra.com/pub/uploads/AccessibleTourismInManitoba.htm

*Research,* Vol. 40, pp. 364-373, ISSN: 1552-6763.

Tesis Doctoral. Michigan State University. United States.

Institute of Familiary Politic(IPF), (2009). Evolución de la familia europea, 2009. Institute of Familiary Politic (2007). Evolución de la familia europea, 2007. Institute of Familiary Politic (2006). Evolución de la familia europea, 2006.

Vol. 24, pp. 561-574, ISSN: 02615177.

*Tourism and Hospitality Research*, Vol. 3, No. 2, pp.148-164, ISSN: 1750-6182. Grande, I. (1993). El comportamiento de los consumidores por grupos de edad. Implicaciones

*Disability and Society*, Vol. 15, Nº. 2, pp. 207-218, ISSN: 1360-0508.

Ediciones.

ISSN: 1552-6763.

1132-0176.

from :

6763.

Australia.

NIPO: 704-11-175-3.

Routledge. London.

1044655,00.html?promoid=rss\_world

*AEDEM.* Vol.1, pp. 1097-1106, ISBN 84-87600-43-3, Palma de Mallorca: AEDEM

Used by Pleasure Vacationers. *Journal of Travel Research,* January*,* Vol. 21, pp. 2-7,

criterion explaining senior tourists´ motivations. *International Journal of Culture,* 

sobre el diseño del mix de marketing. *Distribución y Consumo*. Nº 12, pp. 40-57, ISSN

*Implementing the Americans with Disabilities Act: rights and responsibilities of all* 

Australian perspective. *Journal of Travel Research*, Vol. 41, No 1, pp. 23, ISSN: 1552-

Australians: Impact of Population Ageing on Tourism. *International Conference on Population Ageing and Health: Modeling our Future*. ISBN: 978-0444530059, Canberra,


http://www.cordis.lu/cost-transport/src/cost-322.htm


http://europa.eu.int/comm/public\_opinion/archives/eb/ebs\_149\_en.pdf


Borja, L.; Casanovas, J.A. & Bosch, A. (2002). *El Consumidor turístico*. ISBN: 8473562976, Pozuelo

Brown, F. (1991). Tourism for all. *Tourism Management*, Vol.12, No. 3, pp. 258-260, ISSN:

Buhalis, D., Eichhorn, V., Michopoulou, E. & Millar, G. (2005). Accessibility market and

Burnett, J.J. (1996). What services marketers need to know about the mobility-disabled consumer. *The Journal of Services Marketing*, Vol. 1º, No. 3, pp. 3-20, ISSN : 0887-6045. Chen, H.W.J. (2009). *Baby Boomers´ and Seniors´ Domestic Travel Motivations: An examination of citizens in Tainan, Taiwan.* Master Thesis. University of Waterloo. Canada. Cleaver, M. (2000). Australian seniors´ use of travel information sources: perceived usefulness

European Commission (1996). *Accesibilidad a Turistas con Discapacidad. Manual para la industria* 

Community Research and Development Information Services (CORDIS) (1995). In: *Cost 322:* 

Darcy, S. (1998). *Anxiety to Access: Tourism Patterns and Experiences of New South Wales People* 

Eurobarometer (2001). Attitudes of Europeans to Disability. In: *Comisión Europea*, 22.04.2007,

Eurostat (2005). Employment of Disabled People in Europe 2002. Catálogo nº KS-NP-05-013-

Eurostat (2003). Employment of Disabled People in Europe in 2002. Catálogo nº: KS-NK-03-

German Federal Ministry of Economics and Technology (2004). Economic Impulses of

Fernández–Villarán, A. (2007). El acceso al turismo para las personas con discapacidad.

Franco, P. (1999). La formación de los profesionales del turismo. *Ocio y equiparación de* 

Fuguet, T. (2008). Europa demanda más accesibilidad. *Editur*, Nª 07, Jul, pp. 10-15, ISSN: 1134-

García M.A. & Martorell, O. (2007). Una reflexión sobre el modelo turístico de las Illes Balears.

Universidad de Deusto 2007, Bilbao, pp.47-59, ISBN: 978-84-9830-096-3. Fleischer, A. & Pizam, A. (2002). Tourism constraints among israelí seniors, *Annals of Tourism* 

*Desafíos y compromisos del turismo: hacia una visión más humana, Congreso UNIJES*,

*oportunidades de las terceras jornadas de la Cátedra de Ocio y Minusvalías*. Coord. Manuel

*Decisiones basadas en el conocimiento y en el papel social de la empresa: XX Congreso anual* 

http://europa.eu.int/comm/public\_opinion/archives/eb/ebs\_149\_en.pdf

*with a physical Disability*. ISBN 0-7313-5500-8, Sydney, NSW: Tourism New South

*del turismo. DG XIII*. Unidad "Turismo", ISBN: 92-827-7298-5.

*Low floor busses*, 06.06.2007, Available from: http://www.cordis.lu/cost-transport/src/cost-322.htm

EN-N, Unión Europea. ISSN 1681-4789.

Accesible Tourism for All. Berlín.

026-EN-N, Unión Europea. ISSN 1024-4352.

*Research,* Vol. 29, No. 1, pp. 106-123, ISSN: 0160-7383.

Cuenca Cabeza, pp. 87-96, ISBN: 9788498309973.

stakeholder análisis. University of Surrey y One Stop Shop for Accesible Tourism in

of word-of-mouth, professional advice, marketer-dominated and generalmedia information. *ANZMAC 2000 Visionary Marketing for the 21 st Century*, pp.1-6, ISBN 0

de Alarcón, Madrid: ESIC.

02615177.

86857 978 5.

Wales.

6469.

Available from:

Europe (OSSATE).

*AEDEM.* Vol.1, pp. 1097-1106, ISBN 84-87600-43-3, Palma de Mallorca: AEDEM Ediciones.


http://www.ttra.com/pub/uploads/AccessibleTourismInManitoba.htm


Institute of Familiary Politic (2006). Evolución de la familia europea, 2006.

New Opportunities for the Tourism Market: Senior Tourism and Accessible Tourism 165

Nedelea, A. y State, M. (2008). The demographic ageing and consumer market. *Ştiinţe* 

Norman, W.C., Daniels, M.J., McGuire, F. & Norman, C.A. (2001). Wither the mature market:

Patterson, I. (2006). *Growing older. Tourism and leisure behaviour of older adults.* ISBN: 978-

Pearce, P.L. (1982). *The Social Psychology of Tourist Behavior*. ISBN: 978-0080257945, Oxford:

Pérez, M.D. & González, D.J. (2003). Turismo Accesible: Hacia un turismo para todos. In:

Prideaux, B.; Wei, S. & Ruys, H. (2001). The senior drive tour market in Australia. *Journal of* 

Pühretmair, F. (2004). It's time to make eTourism accesible. In Miesenberger, K., Klaus, J.,

Rains, R. (2008): 2000 Bali Declaration on Barrier-Free Tourism for people with Disabilities. In:

Reece, W.S. (2004). Are Senior Leisure Travelers Different? *Journal of Travel Research*, Vol. 43,

Ryan, Chris (1995). Learning about tourists from conversations: the over-55s in Majorca.

Salgado, S. (2007). Editorial Polibea", *Turismo@Polibea,* Febrero de 2007, Nº34. In: *Polibea*,

Santos, J.L. (1992). Las nuevas tendencias de los consumidores turistas. *Estudios sobre consumo*,

Sellick, M.C. (2004). Discovery, Connection, Nostalgia: Key Travel Motives within the Senior

Market. *Journal of Travel &Tourism Marketing*, Vol. 17, nNo 1, pp. 55-71, ISSN: 1540-

*Tourism Management,* Vol. 16, No 3, pp. 207-215, ISSN: 02615177.

Available from:: http://www.rollingrains.com/archives/002167.html Rao, S.R., Thomas, E.G., y Javalgui, R.G. (1992). Activity preferences and trip planning

*Vacation Marketing*. Vol. 7, No 3, pp. 209-219, ISSN: 1479-1870.

http://www.worldtourism.org/quality/E/standards2.htm

*MAZARS*, Available from: http://cermi.es/documentos/descargar/Turismo-

Zagler, W. y Burger, D. (Eds.) *Computers helping people with special needs*. 9th Internacional Conference, ICCHP 2004, ISBN : 978-3-540-70539-0, France y Berlín. Qualitas (2004). Conclusions of the 1st International Congress on "Tourism for all". In: *WTO*,

*Report Asia-Pacific Conference on Tourism for People with Disabilities*. 01.04.2008,

behavior of the U.S. outbound pleasure travel market. Journal of Travel Research,

*Economice*, Tom. XVII, Volumul IV- Management and Marketing, pp. 1010-1014.

An empirical examination of the travel motivations of neo-mature and veteranmature markets. *Journal of Hospitality & Leisure Maketing,* Vol. 8 No ¾, pp.113-130,

National Institute of Statistics (1997. Encuesta de Movilidad Hospitalaria (EMH), 1997.

Universitatea din Oradea. Romania. Available from:

marketing/v4- management-and-marketing.pd

ISSN: 1541-0897.

Pergamon.

30(3):3-12.

7306.

accesible/ta.pdf.

25.04.2007, Available from:

No 1, pp. 11-18, ISSN: 1552-6763.

Nº 23, pp. 33-43, ISSN: 0212-9469.

15.01.2008, Available from: www.polibea.com

1845930653, Cambridge. Ed. Cabi.

http://steconomice.uoradea.ro/anale/volume/2008/v4-management-


National Institute of Statistics (1997. Encuesta de Movilidad Hospitalaria (EMH), 1997.

	- marketing/v4- management-and-marketing.pd

164 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Iyer, R., Reisenwitz, T.H. & Eastman, J.K. (2008). The impact of cognitive age on

Jang, S.C.S. y Wu, C.M.E. (2006). Senior´s travel, motivation and the influential factors: An

Kim, J., Wei, S. y Ruys, H. (2003). Segmenting the market of West Australian senior tourist

Lee, S.H. y Tideswell, C. (2005). Understanding attitudes towards leisure travel and the

Le Serre, D. (2008). Who is the senior consumer? Available from: http://www.marketing-

Leidner, R. (2006). Design for all in the economy: The example of tourism accessible for all in Europe. *Newsletter Design For All* Institute of India, Vol. 1 May 2006, No.4. Littrell, M.A., Paige, R.C. & Song, K. (2004). Senior travelers: Tourism activities and shopping behaviors. *Journal of Vacation Marketing*, Vol. 10, No. 4, pp. 348-362, ISSN: 1479-1870. Marín, M., García - González, A.J. & Troyano, Y. (2006). Modelo de ocio activo en las personas

trends-congress.com/2008\_cp/Materiali/Paper/Fr/LeSerre.pdf

ISSN: 1472-1376.

02615177.

02615177.

oportunidades.

de la Salud -EDDES-, 2008.

Salud –EDDES-, 1999.

3761.

249-263, ISSN: 1479-1870.

seniors´lifestyles. Journal of *Marketing Managementl*, Vol.18, No 2, fall, pp. 106-118,

examination of Taiwanese senior. *Tourism Management,* Vol. 27, pp. 306-316, ISSN:

using an artificial neural network. *Tourist Management*, Vol. 24, pp. 25-34, ISSN:

constraints faced by senior Koreans. *Journal of Vacations Marketing*, Vol. 11, No. 3, pp.

mayores: Revisión desde una perspectiva psicosocial. *Revista Internacional de Ciencias Sociales y Humanidades, SOCIOTAM,* Vol. 16, No 19, pp. 147-167, ISSN: 1405-3543. Metz, D. & Underwood, M. (2005). *Older, richer, fitter: identifying the consumer needs of Britain´s ageing population*. ISBN: 978-0862423834*,* Age Concern England. London. Ministry of Labour and Social Affairs (2003). I Plan Nacional de Accesibilidad 2004-20012. Por

un nuevo paradigma, el Diseño para Todos, hacia la plena igualdad de

mature market" *Journal of Consumer Marketing*, Vol. 10, nº 3, pp. 43-53, ISSN: 0736-

Ministry of Labour and Social Affairs (2003). Libro Blanco de Accesibilidad. Por un nuevo paradigma, el Diseño para Todos, hacia la plena igualdad de oportunidades. Ministry of Labour and Social Affairs (2002). Libro verde. La accesibilidad en España.

Moschis, G.P. (1993). "Gerontographics: a scientific approach to analyzing and targeting the

Moschis, G.P. (1992). *Marketing to older consumers: a handbook of information for strategy* 

National Agency for New Technologies, Energy and Environment of Italy (ENEA) (1999).

National Disability Authority (2003). Accessibility and Tourism. In: *Tourism Policy Review* 

National Institute of Statistics (INE), (2008). Encuesta sobre Discapacidad, Deficiencia y Estado

National Institute of Statistics (1999). Encuesta sobre Discapacidad, Deficiencia y Estado de la

Diagnóstico y bases para un plan integral de superación de barreras.

*development.* ISBN: 978-0899307640*,* Quorum Books. Westport.

National Institute of Statistics (1999a). Encuesta de Población Activa (EPA), 1999.

Tourism Services for Accessibility and a Comfortable Stay.

*Group*, 26.02.2007, Available from: http://www.nda.ie/


http://www.worldtourism.org/quality/E/standards2.htm


**8** 

*Poland* 

**A Demand Perspective** 

*The Poznań University of Economics* 

Grzegorz Gołembski and Agnieszka Niezgoda

**The Role of Time in the Global Tourism Market –** 

The earliest western concept of leisure (Greek: scholé) is credited to the Greek philosopher Aristotle who juxtaposed production activities performed from the necessity to labour (e.g. by slaves) with self-actualisation activities fit for free men, such as education, pursuance of arts and philosophy, contemplation, or the performance of political duties (de Grazia 1926). Aristotle was first to point out that time should be used in accordance with the values which

In the modern times leisure has been a subject of reflection by many philosophers and scholars, most often analysed in relation to working time. Among the best known concepts that set a reference point for the reflection on leisure are Marx's theory of alienation of the worker in the capitalist labour system, Max Weber's theory explaining the influence of protestant ethics on the spirit of capitalism (a specific, ascetic attitude based on work ethos and self-discipline in consumption), and "the theory of the leisure class" by Thorstein Veblen arguing that leisure activities, and especially conspicuous consumption, denote

Later leisure theories can therefore be divided, by their relation to working time, into concepts based on separation between work activities and leisure (the contrast hypothesis)

The modern sociological concepts of leisure are constructed on the assumptions of one of the three theoretical paradigms: functionalism, structuralism, and postmodernism (Rojek 1997). Researchers have focused on issues such as: leisure as a factor of social integration and stratification, lifestyles, attitudes and social roles, ethnic identity, social exclusion and deviant leisure, electronic media use for role model creation, and leisure constraints. Recently, leisure has also become a subject of culture and gender studies, and a focal point of the so-called visual and figurative sociology. Many interesting specific concepts have been proposed to portray the "leisure society". However, a unified and cohesive theory of

Tarkowska (2001, p 27) believes that leisure is a historical category referring to a relatively recent past, "associated with the industrial society, having originated along with it, and disappearing – or transforming – along with that society's transformations". In her opinion

leisure is "merely but one form of social time and should be studied as such"

**1. Introduction** 

determine the sense of human existence.

or on unity of work and leisure (the congruence hypothesis).

superordinate social status.

leisure has not yet been developed.


 http://www.toegankelijkheidsbureau.be/docs/Tourism%20for%20All%20Report%2 0Final%20SEP2001b.pdf


http://census.gov.hhes/www/disable/sipp/disable9495


http://www.consultspringboard.com/pdf/AdvertisingAgeArticle-Published.pdf


### **The Role of Time in the Global Tourism Market – A Demand Perspective**

Grzegorz Gołembski and Agnieszka Niezgoda *The Poznań University of Economics Poland* 

#### **1. Introduction**

166 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Shim, S., Gehrt, K.C. & Siek, M. (2005). Attitude and Behavior Regarding Pleasure Travel

Snepenger, D., King, J., Marshall, E. & Uysal, M. (2006). Modeling Iso-Ahola´s Motivation

Stroud, D. (2008). *The 50 plus market: why the future is age neutral when it comes to marketing &* 

Stumbo, N.J. & Pegg, S. (2005). Travellers and Tourists with Disabilities: A Matter of Priorities

Toerisme V. (2001). Tourism for all in the European Union. Status Report on Tourist

Tongren, H.N. (1988). Determinant Behavior Characteristics of Older Consumers. *The Journal of* 

U.S. Department of Commerce (1997). Current Population Report: Americanswith Disabilities:

Van Horn, L. (2002).Travellers with Disabilities: Market Size and Trenes. 03.05.2007, Available

Vellas, P. (1986). *Aspectos psicológicos y sociales del desarrollo del turismo en la tercera edad*.

Vogel, N. (2006). Not Marketing to People with Disabilities? You're Missing Out. Most

 http://www.consultspringboard.com/pdf/AdvertisingAgeArticle-Published.pdf Wang, K. C. (2006). Motivations for Senior Groups Package Tour Tourists. *Journal of Tourism* 

Wilkes, R. E. (1992). A structural modeling approach to the measurement and meaning of cognitive age. *Journal of Consumer Research*, Vol.19, pp.292-301, ISSN: 0093-5301. World Health Organization (WHO) (2001). Clasificación Internacional del Funcionamiento, de

World Tourism Organization (WTO) (2001). Tourism 2020 Vision. Europe. Vol. 4. ISBN: 978-

World Tourism Organization (1980). Declaración Mundial de Manila sobre el Turismo

Zimmer, Z., Braley, R.E. & Searle, M.S. (1995). Weather to go and where to go: identification of

Mundial", del 23 de septiembre de 1980, aprobada por la Confederación Mundial de

important influences on senior´s decisions to travel. *Journal of Travel Research,* Vol. 33,

Marketers are Ignoring Loyal Consumer Segment That has 'Sizable Spending Power".

Primeras Jornadas Técnicas de Turismo y Tercera Edad, Alicante.

*branding strategies.* ISBN: 978- 0749449391, Kogan Page. London.

*Marketing*, Vol. 18, No 2, pp. 69-81, ISSN: 1540-7306.

for all", 2001. 13.03.2007, Available from:

*Consumer Affairs*, Vol.22, No1, ISSN: 1745-6606.

from: http://ncpedp.org/access/isu-travel.htm

In: *Consults Pring Board*, 30.09.2008, Available from:

*Studies*, Vol. 12, No. 2, pp. 119-138, ISSN: 1035-4662.

la Discapacidad y de la Salud (CIDDM-2).

9284403806, UNWTO.

pp. 3-10, ISSN: 1552-6763.

Turismo.

1994-95. In: *US Goverment*, 05.04.2007, Availabe from: http://census.gov.hhes/www/disable/sipp/disable9495

0Final%20SEP2001b.pdf

1552-6763.

among Mature Consumers: A Socialization Perspective. *Journal of Travel & Tourism* 

Theory in the Tourism Context. *Journal of Travel Research*, No 45, pp. 140-149, ISSN:

and Royalties. *Tourism Review Internacional,* Vol. 8, Nº3, pp. 195-209, ISSN: 1544-2721.

Accommodation Schemes in Europe. Meeting of EU Ministers of Tourism, "Tourism

http://www.toegankelijkheidsbureau.be/docs/Tourism%20for%20All%20Report%2

The earliest western concept of leisure (Greek: scholé) is credited to the Greek philosopher Aristotle who juxtaposed production activities performed from the necessity to labour (e.g. by slaves) with self-actualisation activities fit for free men, such as education, pursuance of arts and philosophy, contemplation, or the performance of political duties (de Grazia 1926). Aristotle was first to point out that time should be used in accordance with the values which determine the sense of human existence.

In the modern times leisure has been a subject of reflection by many philosophers and scholars, most often analysed in relation to working time. Among the best known concepts that set a reference point for the reflection on leisure are Marx's theory of alienation of the worker in the capitalist labour system, Max Weber's theory explaining the influence of protestant ethics on the spirit of capitalism (a specific, ascetic attitude based on work ethos and self-discipline in consumption), and "the theory of the leisure class" by Thorstein Veblen arguing that leisure activities, and especially conspicuous consumption, denote superordinate social status.

Later leisure theories can therefore be divided, by their relation to working time, into concepts based on separation between work activities and leisure (the contrast hypothesis) or on unity of work and leisure (the congruence hypothesis).

The modern sociological concepts of leisure are constructed on the assumptions of one of the three theoretical paradigms: functionalism, structuralism, and postmodernism (Rojek 1997). Researchers have focused on issues such as: leisure as a factor of social integration and stratification, lifestyles, attitudes and social roles, ethnic identity, social exclusion and deviant leisure, electronic media use for role model creation, and leisure constraints. Recently, leisure has also become a subject of culture and gender studies, and a focal point of the so-called visual and figurative sociology. Many interesting specific concepts have been proposed to portray the "leisure society". However, a unified and cohesive theory of leisure has not yet been developed.

Tarkowska (2001, p 27) believes that leisure is a historical category referring to a relatively recent past, "associated with the industrial society, having originated along with it, and disappearing – or transforming – along with that society's transformations". In her opinion leisure is "merely but one form of social time and should be studied as such"

The Role of Time in the Global Tourism Market – A Demand Perspective 169

In all leisure concepts free time is closely connected with tourism. In fact, availability of free time is a precondition of pursuing tourist activities. According to Jung (2011), to meet their needs in a well-balanced economy, people both purchase goods and services and have time to make full use of their purchases. The author thinks that rational individuals at every level of work remuneration will choose an optimal number of working hours to both finance their consumption needs and have enough time to enjoy the consumption. Applying this thought to real life with its numerous limitations, such as increased income polarisation observed since the late twentieth century, we find that such optimum is difficult to achieve given that consumers today are usually either money-rich/time-poor or time-rich/money-poor. Gershuny (1995) mischievously suggests that if we were to apply Keynesian approach to demand stimulation we should redistribute time to the richest groups, since deficit of time is

A literature review shows that despite an obvious connection between free time and

The aim of this paper is to show how globalization affects the understanding of time at different stages of human life, and how the changing concepts of time impact tourism

The effects of globalization on people can be succinctly summarized as the shrinking time and space. The impact of globalization on time is expressed both in biological and economic senses. The economic perspective pertains to working time and leisure alike, hence time can be considered from the viewpoint of both the enterprise, and the individual – a client who

The underlying theme of the discussed aspects of time, particularly in reference to the client, is tourism. Given the complexity of the tourism phenomenon, our considerations will be

Tourism demand pertains both to working time (business travel) and leisure (private travel). Hence it is important to show the relationship between changing concepts of time and

We begin with a discussion of the globalisation phenomenon which has raised the significance of economic time, an integral part of the so-called social time. The relationship between processes of globalisation and tourism is reflected in increased business travel. The article explores other interdependencies between the two phenomena. It also presents a typology of tourists according to the time perspective (Seaton 2002). The most prominent feature of this typology is a distinction between "traditional tourist" and "traveller". Considerations on free time and its perception in the society are concluded with a projection

Globalization has a fundamental impact on time use by man. In tourism this is particularly apparent in the planning and realization of travel. The profound and multidimensional transformations effected by globalization are due to many factors, of which the most important is the development of information technology, mobile communications, and

the greatest barrier hindering consumption among the better-off.

**2. Conceptual model of the chapter** 

purchases tourism services.

limited to the demand side.

of future tourism services.

**3. Results** 

tourism demand in both these aspects.

demand both at work ("economic time") and leisure.

tourism, it is difficult to find works dedicated specifically to this relationship.

Among Polish authors who explored the subject of free time, or leisure, were Wnuk-Lipiński (1972), Czajka (1975), and Rogoziński, Cieloch and Kiczyński (1992). According to Czajka (1975), the notion of free time refers to all activities which are performed of an individual's free will for the purpose of relaxation, informal or self-education, and voluntary or community work after having freed oneself from paid work activities, domestic chores, and family and social commitments. In turn, Wnuk-Lipiński (1972) defines leisure as the time remaining at a person's disposal after fulfilling work responsibilities, family and school duties, and meeting one's biological needs.

A somewhat different approach to free time is represented in the work of Rogoziński (1992) who interprets leisure as the time which by virtue of free choice is filled with activities (situations or states) performed for their own sake.

(Buhl 1982) claims that man's life has several dimensions. The rhythm and duration of human life is determined by a person's biological clock and his or her participation in various social groups whose members interact and influence each other. This period of interaction between individuals and groups is known as social time. The economic dimension of time, on the other hand, is construed as the time scale of economic phenomena and processes related to the conversion of nature into goods and services in order to satisfy human needs (Ronek 1997).

It has to be noted that leisure can be defined in strictly sociological, or strictly economic dimensions. In the sociological dimension leisure is usually related to time free from work, duties and compulsion. It is connected with various forms of recreation, relaxation, social life, sports and travelling (Tarkowska 2001, p. 18). The difficulty in defining the phenomenon arises partly from the fact, that in the English language the terms *free time* and *leisure* are often used interchangeably, while in some approaches the two terms are distinct from each other: free time refers to quantifiable periods of time measured by hours and minutes, whereas leisure refers rather to the very activities filling the time away from work and other duties. To find the answer what free time really is we should refer to the classic definitions of leisure by Joffre Dumazedier (Winiarski 2011).

In their empirical studies, Robinson and Godbey (1999, p. 12) accept that free time is the time available after paid work, household work and family care, travelling and commuting, and also sleeping, physiological needs, and personal care and hygiene. The time budget studies conducted by GUS (Main Office of Statistics) in Poland use a similar division of activities, identifying specific classes of activities in line with Eurostat recommendations to enable comparability of data throughout the European Union. The classes of time-use activities are as follows: sleep and physiological needs, paid work, education, household work, travel and commuting, and leisure. The leisure category includes such activities as participation in culture and entertainment, social life, sports and recreation, hobby and games, mass media use, reading, voluntary and community work, passive relaxation, and other pursuits. Leisure is therefore understood as the time used for relaxation, or activities outside daily commitments.

It has to be noted that in some approaches leisure has a broader meaning, e.g. as the time after work which includes such activities as improving one's qualifications, participating in political, community and social life, or child care (such approaches are explored in greater detail by Tarkowska 2001, pp. 20-21).

In all leisure concepts free time is closely connected with tourism. In fact, availability of free time is a precondition of pursuing tourist activities. According to Jung (2011), to meet their needs in a well-balanced economy, people both purchase goods and services and have time to make full use of their purchases. The author thinks that rational individuals at every level of work remuneration will choose an optimal number of working hours to both finance their consumption needs and have enough time to enjoy the consumption. Applying this thought to real life with its numerous limitations, such as increased income polarisation observed since the late twentieth century, we find that such optimum is difficult to achieve given that consumers today are usually either money-rich/time-poor or time-rich/money-poor. Gershuny (1995) mischievously suggests that if we were to apply Keynesian approach to demand stimulation we should redistribute time to the richest groups, since deficit of time is the greatest barrier hindering consumption among the better-off.

A literature review shows that despite an obvious connection between free time and tourism, it is difficult to find works dedicated specifically to this relationship.

#### **2. Conceptual model of the chapter**

168 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Among Polish authors who explored the subject of free time, or leisure, were Wnuk-Lipiński (1972), Czajka (1975), and Rogoziński, Cieloch and Kiczyński (1992). According to Czajka (1975), the notion of free time refers to all activities which are performed of an individual's free will for the purpose of relaxation, informal or self-education, and voluntary or community work after having freed oneself from paid work activities, domestic chores, and family and social commitments. In turn, Wnuk-Lipiński (1972) defines leisure as the time remaining at a person's disposal after fulfilling work responsibilities, family and school

A somewhat different approach to free time is represented in the work of Rogoziński (1992) who interprets leisure as the time which by virtue of free choice is filled with activities

(Buhl 1982) claims that man's life has several dimensions. The rhythm and duration of human life is determined by a person's biological clock and his or her participation in various social groups whose members interact and influence each other. This period of interaction between individuals and groups is known as social time. The economic dimension of time, on the other hand, is construed as the time scale of economic phenomena and processes related to the conversion of nature into goods and services in order to satisfy

It has to be noted that leisure can be defined in strictly sociological, or strictly economic dimensions. In the sociological dimension leisure is usually related to time free from work, duties and compulsion. It is connected with various forms of recreation, relaxation, social life, sports and travelling (Tarkowska 2001, p. 18). The difficulty in defining the phenomenon arises partly from the fact, that in the English language the terms *free time* and *leisure* are often used interchangeably, while in some approaches the two terms are distinct from each other: free time refers to quantifiable periods of time measured by hours and minutes, whereas leisure refers rather to the very activities filling the time away from work and other duties. To find the answer what free time really is we should refer to the classic

In their empirical studies, Robinson and Godbey (1999, p. 12) accept that free time is the time available after paid work, household work and family care, travelling and commuting, and also sleeping, physiological needs, and personal care and hygiene. The time budget studies conducted by GUS (Main Office of Statistics) in Poland use a similar division of activities, identifying specific classes of activities in line with Eurostat recommendations to enable comparability of data throughout the European Union. The classes of time-use activities are as follows: sleep and physiological needs, paid work, education, household work, travel and commuting, and leisure. The leisure category includes such activities as participation in culture and entertainment, social life, sports and recreation, hobby and games, mass media use, reading, voluntary and community work, passive relaxation, and other pursuits. Leisure is therefore understood as the time used for relaxation, or activities

It has to be noted that in some approaches leisure has a broader meaning, e.g. as the time after work which includes such activities as improving one's qualifications, participating in political, community and social life, or child care (such approaches are explored in greater

duties, and meeting one's biological needs.

human needs (Ronek 1997).

outside daily commitments.

detail by Tarkowska 2001, pp. 20-21).

(situations or states) performed for their own sake.

definitions of leisure by Joffre Dumazedier (Winiarski 2011).

The aim of this paper is to show how globalization affects the understanding of time at different stages of human life, and how the changing concepts of time impact tourism demand both at work ("economic time") and leisure.

The effects of globalization on people can be succinctly summarized as the shrinking time and space. The impact of globalization on time is expressed both in biological and economic senses. The economic perspective pertains to working time and leisure alike, hence time can be considered from the viewpoint of both the enterprise, and the individual – a client who purchases tourism services.

The underlying theme of the discussed aspects of time, particularly in reference to the client, is tourism. Given the complexity of the tourism phenomenon, our considerations will be limited to the demand side.

Tourism demand pertains both to working time (business travel) and leisure (private travel). Hence it is important to show the relationship between changing concepts of time and tourism demand in both these aspects.

We begin with a discussion of the globalisation phenomenon which has raised the significance of economic time, an integral part of the so-called social time. The relationship between processes of globalisation and tourism is reflected in increased business travel. The article explores other interdependencies between the two phenomena. It also presents a typology of tourists according to the time perspective (Seaton 2002). The most prominent feature of this typology is a distinction between "traditional tourist" and "traveller". Considerations on free time and its perception in the society are concluded with a projection of future tourism services.

#### **3. Results**

Globalization has a fundamental impact on time use by man. In tourism this is particularly apparent in the planning and realization of travel. The profound and multidimensional transformations effected by globalization are due to many factors, of which the most important is the development of information technology, mobile communications, and

The Role of Time in the Global Tourism Market – A Demand Perspective 171

Working time pertains to activities of man performed in the production of goods and services (Kozioł 2000), and extends beyond the physical presence of employees in the workplace by including the time at which the employee remains at the employer's disposal. The employer's perception of time is oriented towards the company's interests and its main objective – efficiency. The role of time in the efficiency issues can be analysed on two planes. Firstly, time considered in its physical dimension is a production asset in its own right. Secondly, measurement of work time efficiency has a profound impact on productivity (M.

An important role in productivity improvement can be attributed to actions taken during and as a consequence of business travel. There are many forms of business travel, with the frequency and variety of business trips continuing to grow. The range of business travel objectives includes skill improvement events organised by the employer, participation in trade shows, business talks, and meetings. Some jobs, such as auditing of multinational corporations, involve travelling to distant parts of the world. Incentive travel is growing rapidly, as is conference and convention travel. Globalization is indisputably a major standard-setting force in business travel. Business travellers have certain common characteristics, needs and preferences regarding procedures and service levels. The nature of business travel requires a specific time-saving model of services. The necessary services expected by business travellers (in addition to accommodation and food) include efficient communication facilities, access to the Internet, access to specific television channels, availability of major international newspapers, copying and printing facilities, and translation services. It is noteworthy that business travellers often exhibit characteristics of the global client: spatial mobility and extensive international contacts (Niezgoda, Markiewicz, 2007). Apart from general factors mentioned before, the perception and use of time in business travel is affected by the characteristics of this type of demand, such as:


The lower sensitivity of business travel to price fluctuations is to some extent due to the sharing of expenses between the trip organiser, or delegating organisation, and the business traveller ("customer dualism"). It is a fact that expenses incurred by people travelling on business are generally higher compared with leisure tourists, but usually the costs of

It can be said that during an intensive professional career the frequency of travelling on business increases at the expense of time spent in private travel (people increasingly take short breaks from work)1. One effect of globalization is a growing number of tourism offers and their division into mass (unified) propositions, and special interest differentiated

1 According to the World Travel &Tourism Council, 2006, over the period 2001- 2016 business travel will have grown the fastest compared with other types of tourism expenditure. Between 2006 and 2016 the business travel expenditure will increase from USD 11.16 billion to USD 26.91 billion, showing a


Gołembski, 2007).



business travel are covered by the delegating institution.

141% rate of growth; after: G. Golembski, 2007.

packages offering new forms of activities at ever-new destinations.

transportation – air transport in particular. Almost all aspects of human activity - business, finance, trade, labour market, social relations and also tourism-related activities - are subject to these transformations. Globalization affords direct and instant access to almost unlimited variety of tourism offers, allows direct purchase of tickets to all parts of the world, and makes it possible to book services such as hotels, restaurants, cultural attractions, entertainment, and transport in almost all corners of the globe.

For humankind the extent of these transformations is best summarized by the phrase "the shrinking time and space". This is reflected in the diminishing importance of the public space and in the shortening of time distances. With instant communication and unrestricted mobility time loses its traditional dimension. Space is no longer an impediment: distances are not as important as they were in the past. Growing in importance are the "cyber space" and the "new freedom". Today's elites, including tourists, set new standards and values: their ties with specific territories loosen; less restrained by socio-cultural and political spaces they are becoming increasingly ex-territorial. A new social polarization and asymmetry arises between old "territoriality" of societies and "ex-territoriality" of "mobile" elites (M. Golembski, 2007).

As a result, globalization leads to increased importance of economic time, which itself forms part of social time. Time spent at work, as well as time between jobs (a consequence of employee mobility), and time outside work which is used to recover mental and physical strengths, are all parts of economic time. Its importance in the functioning of social structures will continue to grow.

The growing importance of economic time results in consumptive lifestyles. This is a consequence of globalization, particularly relevant to the provision of tourism services driven by worldwide competition between regions, service providers and intermediaries. The new, increasingly sophisticated media, such as the Internet, facilitate creation of new needs, which in turn drive global demand. Thus the accelerated consumption, characteristic of the so-called western civilization, leads to the extension of the biological and economic times of human activity.

The biological clock may differ from conventional measure of time that determines the duration of human life. Scientific progress in medicine, psychology and sociology as well as technological advances can "put back" the biological clock, a phenomenon having profound economic implications. Simultaneously we can observe an accelerated pace of time, mainly in production processes (work time) and consumption. Perception of time and the concept of time use are not uniform across social groups and societies. In some societies time passes at a slow pace in a monotonous rhythm, whereas in others life is dynamic and tumultuous. Time is perceived differently in different cultures. The way members of a given culture perceive and use time says a lot about priorities of that society and its life philosophy (C. Ezzell, 2002).

Even though globalization does not affect perception of time to the same extent in all societies, the direction and the rate of changes have already been set by the leaders: societies which change their perception of time the fastest. It is true that the impact of globalization on the concept of time varies in different cultures, but in the long run globalization tends to blur cultural differences.

Globalization has the greatest impact on the perception of economic time which can be divided into three parts: working time, work-related time which is not physically spent at work, and leisure. Tourism demand, construed as the need to travel beyond one's place of residence, can arise in any of the three divisions of economic time.

transportation – air transport in particular. Almost all aspects of human activity - business, finance, trade, labour market, social relations and also tourism-related activities - are subject to these transformations. Globalization affords direct and instant access to almost unlimited variety of tourism offers, allows direct purchase of tickets to all parts of the world, and makes it possible to book services such as hotels, restaurants, cultural attractions,

For humankind the extent of these transformations is best summarized by the phrase "the shrinking time and space". This is reflected in the diminishing importance of the public space and in the shortening of time distances. With instant communication and unrestricted mobility time loses its traditional dimension. Space is no longer an impediment: distances are not as important as they were in the past. Growing in importance are the "cyber space" and the "new freedom". Today's elites, including tourists, set new standards and values: their ties with specific territories loosen; less restrained by socio-cultural and political spaces they are becoming increasingly ex-territorial. A new social polarization and asymmetry arises between old "territoriality" of societies and "ex-territoriality" of "mobile" elites (M. Golembski, 2007). As a result, globalization leads to increased importance of economic time, which itself forms part of social time. Time spent at work, as well as time between jobs (a consequence of employee mobility), and time outside work which is used to recover mental and physical strengths, are all parts of economic time. Its importance in the functioning of social

The growing importance of economic time results in consumptive lifestyles. This is a consequence of globalization, particularly relevant to the provision of tourism services driven by worldwide competition between regions, service providers and intermediaries. The new, increasingly sophisticated media, such as the Internet, facilitate creation of new needs, which in turn drive global demand. Thus the accelerated consumption, characteristic of the so-called western civilization, leads to the extension of the biological and economic

The biological clock may differ from conventional measure of time that determines the duration of human life. Scientific progress in medicine, psychology and sociology as well as technological advances can "put back" the biological clock, a phenomenon having profound economic implications. Simultaneously we can observe an accelerated pace of time, mainly in production processes (work time) and consumption. Perception of time and the concept of time use are not uniform across social groups and societies. In some societies time passes at a slow pace in a monotonous rhythm, whereas in others life is dynamic and tumultuous. Time is perceived differently in different cultures. The way members of a given culture perceive and use time says a lot about priorities of that society and its life philosophy (C. Ezzell, 2002).

Even though globalization does not affect perception of time to the same extent in all societies, the direction and the rate of changes have already been set by the leaders: societies which change their perception of time the fastest. It is true that the impact of globalization on the concept of time varies in different cultures, but in the long run globalization tends to

Globalization has the greatest impact on the perception of economic time which can be divided into three parts: working time, work-related time which is not physically spent at work, and leisure. Tourism demand, construed as the need to travel beyond one's place of

residence, can arise in any of the three divisions of economic time.

entertainment, and transport in almost all corners of the globe.

structures will continue to grow.

times of human activity.

blur cultural differences.

Working time pertains to activities of man performed in the production of goods and services (Kozioł 2000), and extends beyond the physical presence of employees in the workplace by including the time at which the employee remains at the employer's disposal. The employer's perception of time is oriented towards the company's interests and its main objective – efficiency. The role of time in the efficiency issues can be analysed on two planes. Firstly, time considered in its physical dimension is a production asset in its own right. Secondly, measurement of work time efficiency has a profound impact on productivity (M. Gołembski, 2007).

An important role in productivity improvement can be attributed to actions taken during and as a consequence of business travel. There are many forms of business travel, with the frequency and variety of business trips continuing to grow. The range of business travel objectives includes skill improvement events organised by the employer, participation in trade shows, business talks, and meetings. Some jobs, such as auditing of multinational corporations, involve travelling to distant parts of the world. Incentive travel is growing rapidly, as is conference and convention travel. Globalization is indisputably a major standard-setting force in business travel. Business travellers have certain common characteristics, needs and preferences regarding procedures and service levels. The nature of business travel requires a specific time-saving model of services. The necessary services expected by business travellers (in addition to accommodation and food) include efficient communication facilities, access to the Internet, access to specific television channels, availability of major international newspapers, copying and printing facilities, and translation services. It is noteworthy that business travellers often exhibit characteristics of the global client: spatial mobility and extensive international contacts (Niezgoda, Markiewicz, 2007). Apart from general factors mentioned before, the perception and use of time in business travel is affected by the characteristics of this type of demand, such as:


The lower sensitivity of business travel to price fluctuations is to some extent due to the sharing of expenses between the trip organiser, or delegating organisation, and the business traveller ("customer dualism"). It is a fact that expenses incurred by people travelling on business are generally higher compared with leisure tourists, but usually the costs of business travel are covered by the delegating institution.

It can be said that during an intensive professional career the frequency of travelling on business increases at the expense of time spent in private travel (people increasingly take short breaks from work)1. One effect of globalization is a growing number of tourism offers and their division into mass (unified) propositions, and special interest differentiated packages offering new forms of activities at ever-new destinations.

<sup>1</sup> According to the World Travel &Tourism Council, 2006, over the period 2001- 2016 business travel will have grown the fastest compared with other types of tourism expenditure. Between 2006 and 2016 the business travel expenditure will increase from USD 11.16 billion to USD 26.91 billion, showing a 141% rate of growth; after: G. Golembski, 2007.

The Role of Time in the Global Tourism Market – A Demand Perspective 173

Source: M. Golembski , "Determinants of the use of working time in enterprises of the Wielkopolska province", doctoral dissertation, Poznan 2007, p. 25 , based on G. Cieloch, J. Kuczynski, K. Rogozinski,

Leisure is a complex phenomenon, affected by changes in the perception of time. Historically, time has been perceived as a circular construct consisting of recurring events in human life based on the nature's cycles. In modern societies time is perceived as linear, reflected in the experiencing of the present and looking into the future. This perception

Another phenomenon affecting the perception of time and the use of free time is societies' evolution towards a so-called leisure civilization. This phenomenon is a consequence of changes in individual systems of values influenced by mass media and caused by civilization stresses as well as an increasingly felt desire to relax, divert from every-day

Tourism is a mass phenomenon, therefore in analysing tourism demand and the meaning of time in tourism we must not overlook social processes in their broadest sense (Niezgoda 2004). In tourism literature there are numerous analyses looking into the process of departure from a traditionally construed idealistic "traveller" towards the notion of the "tourist" (Mehmetoglu 2004). The traveller is a person working on a project, for whom journey is a process and a means to greater goals; the tourist, on the other hand, pursues pleasures, new experiences and adventure. The tourist passively awaits events and service. The traveller is active and does not want to be served. Seaton (2002) proposed a new typology of tourists

a. metempsychotic – the tourist presents a non-linear behaviour, and expresses himself in

b. metensomatosic – in the course of a journey the tourist plays multiple roles (a

implies conscious spending and utilisation of time, and a compulsion to save it.

activities, gain new experiences, meet new people, visit new places, etc.

that takes account of the time perspective and social conditioning:

a journey as a precisely defined person, always the same;

chameleon behaviour).

"Free time – consumption time", Warsaw 1992, p. 10.

Fig. 1. The four stages in the process of "arriving" at free time

Business tourism in simple terms can be divided into individual business travel, conference tourism, trade shows, incentive travel, and corporate tourism. Duration of business travel generally depends on factors such as:


The state of national as well as global economy has a great impact on the demand for business travel. Even though demand for business travel is more stable and less dependant on psychosocial factors than private travel, the amount of business travelling usually reflects the fluctuation of economic growth.

Economic time does not refer solely to the time spent physically at work performing duties organized by the employer. This is also work-related time whose scope and organization depends on individual decisions, and includes such activities as job changing, employment seeking, qualifications improvement, and generally providing for one's family. This often requires mobility and involves travelling. To describe the phenomenon of frequent job hunting that involves short periods of joblessness between subsequent employments the economics theory uses the term "frictional unemployment" (Samuelson, Nordhaus 1990). This notion, in the past referring mainly to young people, nowadays has relevance to the entire population in productive age. People need to adjust their qualifications to the demands of fast-changing (due to globalization) labour market, hence a growing individual demand for travel beyond one's place of residence (to attend job interviews, training courses, post-graduation studies). This work-related time plays an increasingly important role in people's lives, particularly in their economic time.

Leisure plays a tremendous and ever-growing role in the social time of a person. Leisure refers to time spent outside work, a period of discretionary time used for resting, pursuing one's interests, enjoying pleasures afforded by the civilization, participating in cultural and entertainment events, etc. Free time can just as well be spent on improving one's qualifications through self-education and thus increasing one's productivity at work time.

Rest and the recovery of a person's physical and mental strengths, supported with activities such as tourism, have a great impact on personal development and productivity at work, since time spent outside work has three basic functions:


Changes brought about by globalization processes have the following consequences for the use of free time and subsequently work productivity:


Business tourism in simple terms can be divided into individual business travel, conference tourism, trade shows, incentive travel, and corporate tourism. Duration of business travel

The state of national as well as global economy has a great impact on the demand for business travel. Even though demand for business travel is more stable and less dependant on psychosocial factors than private travel, the amount of business travelling usually reflects

Economic time does not refer solely to the time spent physically at work performing duties organized by the employer. This is also work-related time whose scope and organization depends on individual decisions, and includes such activities as job changing, employment seeking, qualifications improvement, and generally providing for one's family. This often requires mobility and involves travelling. To describe the phenomenon of frequent job hunting that involves short periods of joblessness between subsequent employments the economics theory uses the term "frictional unemployment" (Samuelson, Nordhaus 1990). This notion, in the past referring mainly to young people, nowadays has relevance to the entire population in productive age. People need to adjust their qualifications to the demands of fast-changing (due to globalization) labour market, hence a growing individual demand for travel beyond one's place of residence (to attend job interviews, training courses, post-graduation studies). This work-related time plays an increasingly important

Leisure plays a tremendous and ever-growing role in the social time of a person. Leisure refers to time spent outside work, a period of discretionary time used for resting, pursuing one's interests, enjoying pleasures afforded by the civilization, participating in cultural and entertainment events, etc. Free time can just as well be spent on improving one's qualifications through self-education and thus increasing one's productivity at work time. Rest and the recovery of a person's physical and mental strengths, supported with activities such as tourism, have a great impact on personal development and productivity at work,


Changes brought about by globalization processes have the following consequences for the

1. The amount of leisure time available to an individual depends on his or her period of life. In productive age and in the time of raising children, availability of free time is limited but the range of activities that one can engage in at leisure is greater (this is particularly relevant to tourism). In post-productive age, which nowadays tends to

2. In productive age, the way free time is used has a great impact on work productivity,

generally depends on factors such as: - the extent of economic globalization - the state of economic welfare

the fluctuation of economic growth.


role in people's lives, particularly in their economic time.

since time spent outside work has three basic functions: - physical regeneration (recovery of physical strength) - entertainment (regeneration of mental strength)

use of free time and subsequently work productivity:

become longer, the amount of free time is greater.

and the efficiency of enterprises and the entire economy.

Source: M. Golembski , "Determinants of the use of working time in enterprises of the Wielkopolska province", doctoral dissertation, Poznan 2007, p. 25 , based on G. Cieloch, J. Kuczynski, K. Rogozinski, "Free time – consumption time", Warsaw 1992, p. 10.

Fig. 1. The four stages in the process of "arriving" at free time

Leisure is a complex phenomenon, affected by changes in the perception of time. Historically, time has been perceived as a circular construct consisting of recurring events in human life based on the nature's cycles. In modern societies time is perceived as linear, reflected in the experiencing of the present and looking into the future. This perception implies conscious spending and utilisation of time, and a compulsion to save it.

Another phenomenon affecting the perception of time and the use of free time is societies' evolution towards a so-called leisure civilization. This phenomenon is a consequence of changes in individual systems of values influenced by mass media and caused by civilization stresses as well as an increasingly felt desire to relax, divert from every-day activities, gain new experiences, meet new people, visit new places, etc.

Tourism is a mass phenomenon, therefore in analysing tourism demand and the meaning of time in tourism we must not overlook social processes in their broadest sense (Niezgoda 2004).

In tourism literature there are numerous analyses looking into the process of departure from a traditionally construed idealistic "traveller" towards the notion of the "tourist" (Mehmetoglu 2004). The traveller is a person working on a project, for whom journey is a process and a means to greater goals; the tourist, on the other hand, pursues pleasures, new experiences and adventure. The tourist passively awaits events and service. The traveller is active and does not want to be served. Seaton (2002) proposed a new typology of tourists that takes account of the time perspective and social conditioning:


The Role of Time in the Global Tourism Market – A Demand Perspective 175

on the manner people spend their free time. The most important developments in this

 full opening of borders with all European countries, and unrestricted use of passports; exchange rate stability for the local currency and systematic adjustment of domestic

 emergence of a free market in tourism leading to proliferation of service providers, tour operators, and tourism offers (transport, tour packages, diversified propositions for

All these changes have been responsible for increased spending on leisure time activities (economic effect) and - above all - resulted in a rapid growth of outbound tourism (tours, stays). In recent years we have also observed a growth in the domestic tourism. Consumption has undergone significant differentiation. On the one hand, people have realised the importance of managing their free time by themselves, on the other hand people are more inclined to follow current trends and fashions, and are more responsive to aggressive

A much greater choice of tourism offers afforded by the free market economy has led to a change in preferences with regard to the way leisure time is arranged. Instead of one leave lasting two or three weeks the Poles prefer several short holidays. This is characteristic of societies that not so long ago espoused market economy. A frequent change of destinations is due to a desire to see as many places as possible in the shortest possible time, in a way to make up for the lost time. Another reason is the responsiveness to massive advertising

The studies made by the authors (Gołembski, Nezgoda 2003) reveal that the longer the holiday the more people consciously plan the order in which they will visit destinations.

The reasons people do not plan their holidays include both the lack of financial stabilisation and little knowledge about the world due to limited travelling experience. With limited and unstable disposable incomes people decide to travel not when they really want to but when they have the money. The lack of knowledge and experience is a result of long isolation and practical inability to travel abroad, as well as limited choice for domestic travel, in the past usually organised for people by their state employers. This is why most Poles do not know

Consequently, travel decisions are largely affected by incidental factors (such as advertisements, opinions expressed by other people, information obtained unexpectedly). It is little wonder, therefore, that in Poland very popular are "last minute" holiday offers.

To evaluate people's readiness to make conscious life-time plans for their holidays, in our recent survey we asked respondents how far into the future they planned their vacations. The Poles are still little aware that their lives can be planned and their lifetime goals can be realised. They underestimate the possibilities to develop their personalities and expand knowledge. After all it would be possible to plan subsequent trips to, say, Egypt, Tunisia,

price structures to those characteristic of free market economies;

opening of the domestic market to foreign providers and investors;

accelerated differentiation of incomes, and polarisation of the society;

total freedom of choice for the buyer, in accordance with market economy rules;

promotions and psychological aspects of choosing the way of spending their free time.

growth and diversification of tourism reception facilities;

growing productivity and efficiency of labour.

campaigns and other promotional activities.

how to plan and organise their holidays.

regard include:

spending leisure time);

According to Seaton, this model highlights individual stages in the motivation process, showing the dynamics of tourist behaviour. People become tourists not because of the desire to satisfy their needs but through a socially conditioned desire for personal development. This development proceeds through culturally-endorsed role-playing. Therefore people should not be asked "where" they want to travel, but "what" they want to be in their journey (Niezgoda 2010, p.26).

#### **4. Discussion**

Beside disposable income, availability of leisure time is the necessary pre-condition to engage in tourist activities. On the other hand, tourism is only one of many possible leisure pursuits. In this paper we will attempt to answer the following questions:


Answers to such questions are particularly important in the countries which have initiated and are continuing a total transformation of their political, economic and social systems. Perceptions of leisure time by people subjected to socio-economic transformations have changed dramatically. In the centrally planned economy, characteristic of totalitarian political systems, leisure time pursuits were seriously limited for the following reasons:


Following 50 years of a totalitarian order, the systemic transformations in Poland have brought about deep socio-economic changes. These changes have made a significant impact

According to Seaton, this model highlights individual stages in the motivation process, showing the dynamics of tourist behaviour. People become tourists not because of the desire to satisfy their needs but through a socially conditioned desire for personal development. This development proceeds through culturally-endorsed role-playing. Therefore people should not be asked "where" they want to travel, but "what" they want to be in their

Beside disposable income, availability of leisure time is the necessary pre-condition to engage in tourist activities. On the other hand, tourism is only one of many possible leisure

What are the risks in arranging one's holidays, selecting a tour operator or choosing a

 Can people plan their holiday destinations far into the future in a sequential manner (such as: this year I will travel to France, next year to Spain, and the following year to

To what degree can people manage their time off work in a conscious, deliberate

Answers to such questions are particularly important in the countries which have initiated and are continuing a total transformation of their political, economic and social systems. Perceptions of leisure time by people subjected to socio-economic transformations have changed dramatically. In the centrally planned economy, characteristic of totalitarian political systems, leisure time pursuits were seriously limited for the following reasons:

 major administrative difficulties in travelling abroad (passports made available to citizens at the sole discretion of authorities; necessity to obtain visas to destination

black market for convertible currencies raising the price of foreign exchange many-fold

 limited possibilities for arranging one's holidays domestically (around 80% of all reception facilities were holiday hostels or camps belonging to state-owned industrial plants, institutions and offices; employees could either make use of those facilities or

producer market for tourism services, resulting in the dearth of offerings and lack of

 a steep decline in the value of the domestic currency, resulting in permanent shortages of goods and services whose prices were fixed by the state (the amount of worthless money in circulation exceeded many-fold the value of goods and services offered in the market);

 existence of privileged social groups (e.g. the ruling party establishment, or certain groups of industrial workers such as coal miners), having priority in the access to more

Following 50 years of a totalitarian order, the systemic transformations in Poland have brought about deep socio-economic changes. These changes have made a significant impact

relative to its real value, and thus making foreign travel uneconomical;

little differences between salaries across all sectors of the economy;

attractive offerings (Szubert-Zarzeczny 2005, Gołembski ed. 2009).

pursuits. In this paper we will attempt to answer the following questions:

What goals can the tourist set for spending his or her free time?

journey (Niezgoda 2010, p.26).

What is leisure time for the tourist?

destination for one's vacations?

manner during their entire life?

stay with their relatives or friends;

choice for the tourist;

**4. Discussion** 

Portugal)?

countries);

on the manner people spend their free time. The most important developments in this regard include:


All these changes have been responsible for increased spending on leisure time activities (economic effect) and - above all - resulted in a rapid growth of outbound tourism (tours, stays). In recent years we have also observed a growth in the domestic tourism. Consumption has undergone significant differentiation. On the one hand, people have realised the importance of managing their free time by themselves, on the other hand people are more inclined to follow current trends and fashions, and are more responsive to aggressive promotions and psychological aspects of choosing the way of spending their free time.

A much greater choice of tourism offers afforded by the free market economy has led to a change in preferences with regard to the way leisure time is arranged. Instead of one leave lasting two or three weeks the Poles prefer several short holidays. This is characteristic of societies that not so long ago espoused market economy. A frequent change of destinations is due to a desire to see as many places as possible in the shortest possible time, in a way to make up for the lost time. Another reason is the responsiveness to massive advertising campaigns and other promotional activities.

The studies made by the authors (Gołembski, Nezgoda 2003) reveal that the longer the holiday the more people consciously plan the order in which they will visit destinations.

The reasons people do not plan their holidays include both the lack of financial stabilisation and little knowledge about the world due to limited travelling experience. With limited and unstable disposable incomes people decide to travel not when they really want to but when they have the money. The lack of knowledge and experience is a result of long isolation and practical inability to travel abroad, as well as limited choice for domestic travel, in the past usually organised for people by their state employers. This is why most Poles do not know how to plan and organise their holidays.

Consequently, travel decisions are largely affected by incidental factors (such as advertisements, opinions expressed by other people, information obtained unexpectedly). It is little wonder, therefore, that in Poland very popular are "last minute" holiday offers.

To evaluate people's readiness to make conscious life-time plans for their holidays, in our recent survey we asked respondents how far into the future they planned their vacations. The Poles are still little aware that their lives can be planned and their lifetime goals can be realised. They underestimate the possibilities to develop their personalities and expand knowledge. After all it would be possible to plan subsequent trips to, say, Egypt, Tunisia,

The Role of Time in the Global Tourism Market – A Demand Perspective 177

needs. Surveys conducted among young people in Poland have revealed that tourism is increasingly regarded as a deliberately chosen lifestyle rather than just a way of spending time (Różycki, Winiarski 2005). Young people want to expand their horizons through tourism. They want to escape the control of their parents and spend time in the company of their peers, experiencing as many pleasurable moments as possible. The surveys have also revealed that young people engaging in tourist activities perform better at school, even though they themselves are not aware of this correlation. For young people the most

Availability of free time is not a sufficient condition for engagement in tourist activities. What is also needed is income which could be spent on discretionary items after satisfying the essential needs, a pool of money enabling the realisation of tourism demand. The personal income variable is positively correlated with the "price of time". In market economy, and in the conditions of globalization, there are many ways of acquiring the same product or service. This, however, entails a trade-off between time and money. Consumers consider and evaluate different ways of satisfying a need, comparing benefits and costs of individual offers or variants of the same offer. In this process time is considered as a value. Hence we can talk about the *price of time*. People on higher incomes usually put a higher price on their time. This is reflected in the behaviour of consumers: those who do not value their time highly are inclined to spend more time looking for cheaper products or services. In tourism practice, people who value their time highly are prepared to pay an intermediary to organise their holidays, whereas people with lower personal incomes are inclined to sacrifice time in order to organise their tourist activities by themselves, saving on the agent's

A large and continuously growing segment of travelling population are "third age" persons – retirees having time on their hands and enjoying substantial discretionary income. This, of course, refers primarily to retired populations in affluent countries, particularly in the aging societies. These people can easily spend a lot of time travelling. The world's division into affluent countries generating substantial tourism flows, and poor countries whose outbound tourism is negligible, produces a gap between populations having time on their hands and

To summarize the discussion we may conclude that despite cultural diversities and differences in affluence between societies, globalization affects all countries, albeit with varied intensity. Cultural differences, however, are going to blur at an accelerated pace. Tourism, a phenomenon of travelling beyond one's place of residence, will continue to grow at a high rate. Owing to globalization, access to tourism offerings becomes almost unlimited. The world is rapidly shrinking: people across the world can book air tickets and hotel rooms directly and instantly by themselves. The intensity of time use will grow – the pace of life is likely to continue accelerating. Tourism demand will be generated equally by individuals and organizations, with the type and intensity of tourism activities becoming more than ever correlated with man's life cycle. The role of tourism for people in productive age will strengthen not only at leisure but also during their working time (incentive travel, training, job interviews, business travel, scientific conferences, and conventions). The structure of leisure tourism demand generated by people in productive age is already changing: breaks from work tend to be shorter but more intensive in terms of activities. Enjoying longer retirement (longer life expectancies), people of post-productive age also increasingly engage in tourist activities during their free time. In a desire to play the roles of "travellers" rather

important thing is to have a good time and enjoy themselves.

commission (Niezgoda, Zmyślony 2006).

populations enjoying purchasing power.

Sicily, Greece and Turkey to increase one's knowledge about the history of European civilisation. The Polish people still do not see such possibilities and do not plan their travel destinations in a purposeful manner long into the future. It can be seen that the various opportunities afforded by the free market of tourism services influence the choices of potential tourists and allow them to plan their holidays in detail. The study shows, however, that people tend to plan only the one forthcoming vacation. The destination is carefully chosen, but it is a short-term planning (up to one year) rather than a life-time scheme.

The paucity of financial means and shortage of time are the reasons why Poles use only a small amount of leisure time for holiday travel. Therefore a correlation between the length of leave and the way it is utilised can only be determined for a small group of people who have substantial amount of disposable income.

The transformation of political system gave people freedom of movement and freedom of choice, but still the deciding factor is the country's level of affluence. The multitude of offers playing on people's imagination has brought about a short term effect of frequent travels and frequent changes of destinations. Financial constraints decide that holidays are short, and destinations not excessively distant.

Twenty years of socio-economic changes have not been quite enough to teach people how to make conscious long-term leisure plans. We can therefore restate the importance of tourist education to raise people's awareness of what leisure time means for them and how important it is to make their lives happier. A special attention must be given to educating tourists about the relationship between self-development, or self-actualisation, and the conscious planning of leisure time. Such opportunity is afforded by the free market which creates conditions for long term leisure planning irrespective of prevailing political systems.

#### **5. Vision for the industry**

Analysis of tourism demand reveals ever-new customer needs. The complex nature of tourism and a wide spectrum of needs that drive tourism demand lead to the emergence of a growing number of market segments and types of tourists in a broader, social sense. People look for variety to satisfy their needs, and at the same time they demand instant access to information and bookings, and the ability to make quick decisions. Globalization and communications development, including universal access to the Internet, have made it easy for tourists to look for suitable offers and book services by themselves. As a result tourists are able to plan their time individually, and more often than before decide to organize travel on their own. Tourists want to use time "effectively" by maximizing the amount of experiences per unit of time, at the same time expecting the best quality of services (Niezgoda 2010).

Tourist destinations, therefore, must deliver a high standard of basic services and a wide variety of ancillary services to satisfy visitors' expectations. The tourist wants to enjoy lots of experiences in the shortest possible time. The tendency to make quick decisions leads to a "chameleon behaviour' (Roth, Schrandt 1992). In the course of one journey tourists can play multiple roles, for example they can use inexpensive accommodation and at the same time a very expensive mode of transport, they can economize on food while purchasing very expensive items of clothing, etc. In response to tourist expectations, on the demand side we can observe a transformation from service-oriented economy to experience-oriented economy. Apart from physical experiences, tourists expect the satisfaction of their spiritual

Sicily, Greece and Turkey to increase one's knowledge about the history of European civilisation. The Polish people still do not see such possibilities and do not plan their travel destinations in a purposeful manner long into the future. It can be seen that the various opportunities afforded by the free market of tourism services influence the choices of potential tourists and allow them to plan their holidays in detail. The study shows, however, that people tend to plan only the one forthcoming vacation. The destination is carefully chosen, but it is a short-term planning (up to one year) rather than a life-time scheme.

The paucity of financial means and shortage of time are the reasons why Poles use only a small amount of leisure time for holiday travel. Therefore a correlation between the length of leave and the way it is utilised can only be determined for a small group of people who

The transformation of political system gave people freedom of movement and freedom of choice, but still the deciding factor is the country's level of affluence. The multitude of offers playing on people's imagination has brought about a short term effect of frequent travels and frequent changes of destinations. Financial constraints decide that holidays are short,

Twenty years of socio-economic changes have not been quite enough to teach people how to make conscious long-term leisure plans. We can therefore restate the importance of tourist education to raise people's awareness of what leisure time means for them and how important it is to make their lives happier. A special attention must be given to educating tourists about the relationship between self-development, or self-actualisation, and the conscious planning of leisure time. Such opportunity is afforded by the free market which creates conditions for long term leisure planning irrespective of prevailing political systems.

Analysis of tourism demand reveals ever-new customer needs. The complex nature of tourism and a wide spectrum of needs that drive tourism demand lead to the emergence of a growing number of market segments and types of tourists in a broader, social sense. People look for variety to satisfy their needs, and at the same time they demand instant access to information and bookings, and the ability to make quick decisions. Globalization and communications development, including universal access to the Internet, have made it easy for tourists to look for suitable offers and book services by themselves. As a result tourists are able to plan their time individually, and more often than before decide to organize travel on their own. Tourists want to use time "effectively" by maximizing the amount of experiences per unit of time, at

Tourist destinations, therefore, must deliver a high standard of basic services and a wide variety of ancillary services to satisfy visitors' expectations. The tourist wants to enjoy lots of experiences in the shortest possible time. The tendency to make quick decisions leads to a "chameleon behaviour' (Roth, Schrandt 1992). In the course of one journey tourists can play multiple roles, for example they can use inexpensive accommodation and at the same time a very expensive mode of transport, they can economize on food while purchasing very expensive items of clothing, etc. In response to tourist expectations, on the demand side we can observe a transformation from service-oriented economy to experience-oriented economy. Apart from physical experiences, tourists expect the satisfaction of their spiritual

the same time expecting the best quality of services (Niezgoda 2010).

have substantial amount of disposable income.

and destinations not excessively distant.

**5. Vision for the industry** 

needs. Surveys conducted among young people in Poland have revealed that tourism is increasingly regarded as a deliberately chosen lifestyle rather than just a way of spending time (Różycki, Winiarski 2005). Young people want to expand their horizons through tourism. They want to escape the control of their parents and spend time in the company of their peers, experiencing as many pleasurable moments as possible. The surveys have also revealed that young people engaging in tourist activities perform better at school, even though they themselves are not aware of this correlation. For young people the most important thing is to have a good time and enjoy themselves.

Availability of free time is not a sufficient condition for engagement in tourist activities. What is also needed is income which could be spent on discretionary items after satisfying the essential needs, a pool of money enabling the realisation of tourism demand. The personal income variable is positively correlated with the "price of time". In market economy, and in the conditions of globalization, there are many ways of acquiring the same product or service. This, however, entails a trade-off between time and money. Consumers consider and evaluate different ways of satisfying a need, comparing benefits and costs of individual offers or variants of the same offer. In this process time is considered as a value. Hence we can talk about the *price of time*. People on higher incomes usually put a higher price on their time. This is reflected in the behaviour of consumers: those who do not value their time highly are inclined to spend more time looking for cheaper products or services. In tourism practice, people who value their time highly are prepared to pay an intermediary to organise their holidays, whereas people with lower personal incomes are inclined to sacrifice time in order to organise their tourist activities by themselves, saving on the agent's commission (Niezgoda, Zmyślony 2006).

A large and continuously growing segment of travelling population are "third age" persons – retirees having time on their hands and enjoying substantial discretionary income. This, of course, refers primarily to retired populations in affluent countries, particularly in the aging societies. These people can easily spend a lot of time travelling. The world's division into affluent countries generating substantial tourism flows, and poor countries whose outbound tourism is negligible, produces a gap between populations having time on their hands and populations enjoying purchasing power.

To summarize the discussion we may conclude that despite cultural diversities and differences in affluence between societies, globalization affects all countries, albeit with varied intensity. Cultural differences, however, are going to blur at an accelerated pace. Tourism, a phenomenon of travelling beyond one's place of residence, will continue to grow at a high rate. Owing to globalization, access to tourism offerings becomes almost unlimited. The world is rapidly shrinking: people across the world can book air tickets and hotel rooms directly and instantly by themselves. The intensity of time use will grow – the pace of life is likely to continue accelerating. Tourism demand will be generated equally by individuals and organizations, with the type and intensity of tourism activities becoming more than ever correlated with man's life cycle. The role of tourism for people in productive age will strengthen not only at leisure but also during their working time (incentive travel, training, job interviews, business travel, scientific conferences, and conventions). The structure of leisure tourism demand generated by people in productive age is already changing: breaks from work tend to be shorter but more intensive in terms of activities. Enjoying longer retirement (longer life expectancies), people of post-productive age also increasingly engage in tourist activities during their free time. In a desire to play the roles of "travellers" rather

**9** 

*Spain* 

Montserrat Hernández-López

*University of La Laguna, Tenerife, Canary Islands* 

**Mature Tourist Destination: A New Tool to** 

**Forecast Internal Composition of Its Demand** 

Tourism activity and its impact on the development and growth of specific economies are undeniable. Although tourism in its origins was considered as a luxury event only enjoyed by the very few, it now has not only been established as an inalienable right for every human being and recognized in the Universal Declaration of Human Rights (1948), but has also found a place in the household budget. The economic analysis of tourism is relatively recent and a review of the literature confirms the imbalance with regard to their different dimensions of tourism economics. Supply in general, specific tourist subsectors and the relationship between the public sector and tourism have received less attention in theoretical and empirical analysis. Demand, expense, forecast and impact multipliers of tourism, however, are areas that continue to be heavily studied. This chapter can now be added to the list of demand studies because it will show how tourist demand forecast can be

carried out with a micro focus. This focus is essential in specific tourist destinations.

It is important to distinguish between new and mature tourist destinations. New destinations are beneficiaries of annual forecasts on tourist expense, number of visitors, number of nightly stays carried out with the help of available statistical-econometric techniques. However, in mature tourist destinations, where tourist demand is consolidated, another type of forecast is absolutely necessary. It is not aggregate, but instead directed towards the internal composition of the demand, that is, individual characteristics from future potential tourists. In this new approach the integrating elements of the tourist supply can be better adjusted to the specific characteristics of those tourists using that supplied service, with the consequential increase in the degree of

Nevertheless, this type of analysis, necessary from a private initiative perspective or a legislative and zoning point of view, must cope with its inherent limitations. On the one hand, the researcher usually must deal with the absence of empirical microeconomic data with a certain degree of depth or detail. Available individual information is usually limited to those that have carried personal interviews to tourists just before returning to their permanent residence, usually performed by official government organisms. But these interviews have just one aim: to obtain average values that synthesize all of the information on tourist expense, type of lodging and number of night stays, among others. Hence, in the majority of cases there is only access to summarized information by tourist groups, which

**1. Introduction** 

satisfaction obtained by the tourist.

than "tourists", they deliberately extend the duration of their trips to enjoy and savour the atmosphere and uniqueness of the visited destinations.

To travel, whether in productive time or retirement, people need disposable income and purchasing power. However, the choice between being a "tourist" who expects to be served during his or her short break and the time-savouring "traveller" depends on personal attitude towards free time.

#### **6. References**


### **Mature Tourist Destination: A New Tool to Forecast Internal Composition of Its Demand**

Montserrat Hernández-López

*University of La Laguna, Tenerife, Canary Islands Spain* 

#### **1. Introduction**

178 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

than "tourists", they deliberately extend the duration of their trips to enjoy and savour the

To travel, whether in productive time or retirement, people need disposable income and purchasing power. However, the choice between being a "tourist" who expects to be served during his or her short break and the time-savouring "traveller" depends on personal

[1] L. Buhl, Struktur und Dynamic des menschlichen Socialiverhaltens, Tubingen, 1982. [2] G. Cieloch, J. Kuczynski, K. Rogoziński, Czas wolny czasem konsumpcji, PWE

[3] S. Czajka, Z problemów czasu wolnego, Instytut Wydawniczy CRZZ, Warszawa 1975 [4] S. De Grazia, Of Time, Work and Leisure, The Twentieth Century Fund, New York 1962

[7] M. Gołembski, Determinanty wykorzystania czasu pracy w przedsiębiorstwach

[9] M. Mehmetoglu, Tourist or Traveller? A Typological Approach, AIEST, Tourism Review,

[10] A. Niezgoda, Społeczne determinanty popytu turystycznego, Problemy Turystyki No.

[11] A. Niezgoda, Nowe trendy w popycie – wyzwanie dla obszarów recepcji turystycznej

[12] A. Niezgoda, E. Markiewicz, Uwarunkowania i cechy marketingu w turystyce

[13] A. Niezgoda, P. Zmyslony, Popyt turystyczny – uwarunkowania i perspektywy

[14] Ch. Rojek, Leisure theory: retrospect and prospect, "Loisir & Societe" [Society and

[15] H. Ronek, Problem czasu w rachunku kosztów przedsiębiorstw przemysłowych,

[16] A. V. Seaton, Tourism as Metempsychosis and Metensomatosis, [in:] The Tourist as a

[19] E. Tarkowska, Czas społeczny a czas wolny: koncepcje i współczesne przemiany, [in:]

[20] R. Winiarski [edit.] Rekreacja i czas wolny, Oficyna Wydawnicza Łośgraf, Warszawa 2011. [21] E. Wnuk-Lipiński, Praca i wypoczynek w budżecie czasu Ossolineum, Wrocław 1972. [22] Tour leader's compendium, collective work edited by. G. Gołembski, Poznan

Kobieta i kultura czasu wolnego, edit. A. Żarnowska, A. Szwarc, DIG Publishers,

rozwoju, Poznan University of Economics Press, Poznań 2003.

metaphor in Social World, CAB International Wallingford 2002. [17] P. Roth, A. Schrandt, Touristik – Marketing, Verlag Franz Vahlen, Munchen 1992. [18] P. Różycki, R. Winiarski, Social factors influencing tourist activity among youths,

województwa wielkopolskiego, Doctoral Dissertation, Poznan University of

[in:] Nauka i dydaktyka w turystyce i rekreacji, S. Tenaś (edit.), Łódzkie

biznesowej, [in:] Turystyka biznesowa, Wyższa Szkoła Turystyki i Hotelarstwa w

atmosphere and uniqueness of the visited destinations.

Publishers, Warszawa 1992.

Economics, Poznan, 2007.

Gdańsku, Gdańsk 2007.

Leisure], vol. 20, No.2, 1997

UMCS, Lublin 1997.

Warszawa 2001.

No. 3, 2004.

[5] C. Ezzell, Zegary kultur, Świat Nauki, No. 11, 2002.

[6] J. Gershuny, Time Keynesianism, "Demos Quarterly", Issue 5, 1995

[8] L. Kozioł, Zarządzanie czasem pracy, Antykwa, Krakow 2000.

1-4, Institute of Tourism, Warszawa 2004.

Towarzystwo Naukowe, Łódź 2010.

AIEST, Tourism Review, No. 1, 2005.

University of Economics Press, Poznań 2007.

attitude towards free time.

**6. References** 

Tourism activity and its impact on the development and growth of specific economies are undeniable. Although tourism in its origins was considered as a luxury event only enjoyed by the very few, it now has not only been established as an inalienable right for every human being and recognized in the Universal Declaration of Human Rights (1948), but has also found a place in the household budget. The economic analysis of tourism is relatively recent and a review of the literature confirms the imbalance with regard to their different dimensions of tourism economics. Supply in general, specific tourist subsectors and the relationship between the public sector and tourism have received less attention in theoretical and empirical analysis. Demand, expense, forecast and impact multipliers of tourism, however, are areas that continue to be heavily studied. This chapter can now be added to the list of demand studies because it will show how tourist demand forecast can be carried out with a micro focus. This focus is essential in specific tourist destinations.

It is important to distinguish between new and mature tourist destinations. New destinations are beneficiaries of annual forecasts on tourist expense, number of visitors, number of nightly stays carried out with the help of available statistical-econometric techniques. However, in mature tourist destinations, where tourist demand is consolidated, another type of forecast is absolutely necessary. It is not aggregate, but instead directed towards the internal composition of the demand, that is, individual characteristics from future potential tourists. In this new approach the integrating elements of the tourist supply can be better adjusted to the specific characteristics of those tourists using that supplied service, with the consequential increase in the degree of satisfaction obtained by the tourist.

Nevertheless, this type of analysis, necessary from a private initiative perspective or a legislative and zoning point of view, must cope with its inherent limitations. On the one hand, the researcher usually must deal with the absence of empirical microeconomic data with a certain degree of depth or detail. Available individual information is usually limited to those that have carried personal interviews to tourists just before returning to their permanent residence, usually performed by official government organisms. But these interviews have just one aim: to obtain average values that synthesize all of the information on tourist expense, type of lodging and number of night stays, among others. Hence, in the majority of cases there is only access to summarized information by tourist groups, which

Mature Tourist Destination: A New Tool to Forecast Internal Composition of Its Demand 181

rates, monetary supply, public income and expenses, inflation, property value speculation, income distribution, consumption habits, professional training, socio– cultural changes, effects on the environment, rural settings and regional development. Bull (1992) reviews the externalities generated by tourism and classifies them from the individual and group perspective. The externalities for individuals are divided into 1) benefits: new transport route connections, new shops and amenities, high property values, evidence of local positive effects (mirage effects); 2) costs: inflation, traffic congestion, noise. Externalities for governments and groups: 1) benefits: tax revenue increases, increase in cultural value, preservation of flora and fauna; 2) costs: maintenance of tourist infrastructure where tourists do not cover these expenses, additional services —

Opportunity costs must be considered and understood for each one of the actions that it causes before the proliferation and potential reach of tourism expansion. Opportunity costs reflect the value that is given up by using resources in the tourist activity and not in other activities. Nevertheless, all of the transformations and mechanisms that are put into place and that are interrelated with regards to the numerous arrivals of visitors to the area complicate the measure of what really generates tourist activity. The inherent difficulties found in the nature of the service industry and actual circumstances may, however, reflect

This fact could be reduced in part if some reliable statistics were available on tourism supply and demand components. Nevertheless, available statistics provide a very limited view of the reality hidden behind this market. A common calculation, especially in areas that have been intentionally developed as tourist destinations, includes figures that are given which evaluate the number of expected foreigner visitors that they will periodically receive. The continuous increase of such a number continues as if it were the only sign of the tourist destination. Nevertheless, as Frechtling stated (1987a, 1987b), in a world of limited resources, the measure of economic profits from tourism in an area without parallel measure of the associated costs of the same, can induce, not only harm to the environment, but also waste public funds or drastically reduce the quality of life of the

Nevertheless, it is necessary to understand the difficulty of establishing a real value of these impacts —positive and negative—, created in most cases from mass tourism, as analyzed by Archer & Cooper (1998), and how these impacts can be transformed spectacularly by the appearance and the quality of the receiving area and the lifestyle of the residents. In spite of all of the inconveniences that could exist in the valuation of this subsector, the transcendence of tourism as an activity with multiplier effects, extremely complicated in terms of control from the supply perspective, and only quantifiable from the demand

In summary, tourism interacts with general economic activity of the receiving area, impacts economic growth of the surroundings where the activity is developed and is influenced by it. These interactions should not be ignored by any tourism planning project, and the project will benefit if in the initial stages of tourism take off is accompanied by good forecasts of the aggregate tourist demand, and, in the case of a mature destination, other types of

perspective, is such that all generalizations that are carried out will still be useful.

disaggregate forecasts on the potential tourist of the destination will be available.

police, healthcare—, destruction of flora and fauna.

that the costs are not always valued as highly as the benefits.

local residents.

necessarily leads to the type of typical aggregate analyses on different identifiable variables of tourist demand. On the other hand, there is an absence of appropriate statistical techniques to aid in the tourist forecast based on individual interviews. These interviews provide information on the changes in the demand composition for a specific destination. Fortunately the development of techniques in the fields of Computational Intelligence and Artificial Intelligence open up new research perspectives. Specifically, genetic algorithms, one such technique in Computational Intelligence, can serve as an appropriate tool in the analysis of the evolution of the characteristics of the potential clients of those tourist services that are offered in a specific destination.

The aim of this chapter is to show that the genetic algorithms can be conveniently adapted in its structure and in its component definitions when performing detailed forecasts on the tourist demand composition which are necessary in a mature tourist destination.

#### **2. Tourist consolidation: The need to stabilize the number of satisfied visitors with the supply**

Tourist activity generates a multiplier effect on the service sector and other sectors in an economy, and this resultant activity in turn drives and diversifies total economic activity. Tourism is frequently an important source of exports for an area, although the goods are not physically exported. Tourists travel to a country to participate in tourist services and the resultant paid currencies make up, in terms of balance of payments, an export of services similar to other goods and services. The export of the tourism sector becomes a source of income and employment for the population that is directly linked to tourism, but it also has an indirect impact on other sectors of the economy that are responsible for providing other produced goods and services in the region. From a strictly economic point of view, in the initial stage of tourism development, tourists expect that their arrival, together with an entrance of foreign currency, to be rapidly redirected to the production or import of those goods and services that are needed by the new visitors. In addition, the entry of foreign currency can be transformed into a source of regional financing for currently needed investments that are required in this non-existent tourist supply —namely lodging, transport, restoration.

In the economic take-off stage, the injection of capital provides an increase in residential income in the tourist area —more jobs, opening or reactivation of business activities—, which translates directly in purchases, taxes on tourist goods and services and income from rentals and lodging, or what is the same, the entrance of foreign currency. On the other hand, the increase in residential salary income can simultaneously convert these residents into tourists in other areas. This transformation, in turn, when added to the needed imports to satisfy tourist demand, non-resident salaries, lost income due to exchange rate in tourist operation transactions paid in the country of origin, tourist promotions carried out in the foreign countries, the expenses in infrastructure improvements, and investments in tourist activities, cause foreign currency exiting.

The result from the consolidated stage of tourism —or the presence of a mature tourist destination— is therefore a set of related effects amongst themselves which are concerned with the degree of dependence of the destination with respect to the exterior, its own tourist development strategy, production, employment, balance of payments, exchange

necessarily leads to the type of typical aggregate analyses on different identifiable variables of tourist demand. On the other hand, there is an absence of appropriate statistical techniques to aid in the tourist forecast based on individual interviews. These interviews provide information on the changes in the demand composition for a specific destination. Fortunately the development of techniques in the fields of Computational Intelligence and Artificial Intelligence open up new research perspectives. Specifically, genetic algorithms, one such technique in Computational Intelligence, can serve as an appropriate tool in the analysis of the evolution of the characteristics of the potential clients of those tourist services

The aim of this chapter is to show that the genetic algorithms can be conveniently adapted in its structure and in its component definitions when performing detailed forecasts on the

**2. Tourist consolidation: The need to stabilize the number of satisfied visitors** 

Tourist activity generates a multiplier effect on the service sector and other sectors in an economy, and this resultant activity in turn drives and diversifies total economic activity. Tourism is frequently an important source of exports for an area, although the goods are not physically exported. Tourists travel to a country to participate in tourist services and the resultant paid currencies make up, in terms of balance of payments, an export of services similar to other goods and services. The export of the tourism sector becomes a source of income and employment for the population that is directly linked to tourism, but it also has an indirect impact on other sectors of the economy that are responsible for providing other produced goods and services in the region. From a strictly economic point of view, in the initial stage of tourism development, tourists expect that their arrival, together with an entrance of foreign currency, to be rapidly redirected to the production or import of those goods and services that are needed by the new visitors. In addition, the entry of foreign currency can be transformed into a source of regional financing for currently needed investments that are required in this non-existent tourist supply —namely lodging,

In the economic take-off stage, the injection of capital provides an increase in residential income in the tourist area —more jobs, opening or reactivation of business activities—, which translates directly in purchases, taxes on tourist goods and services and income from rentals and lodging, or what is the same, the entrance of foreign currency. On the other hand, the increase in residential salary income can simultaneously convert these residents into tourists in other areas. This transformation, in turn, when added to the needed imports to satisfy tourist demand, non-resident salaries, lost income due to exchange rate in tourist operation transactions paid in the country of origin, tourist promotions carried out in the foreign countries, the expenses in infrastructure improvements, and investments in tourist

The result from the consolidated stage of tourism —or the presence of a mature tourist destination— is therefore a set of related effects amongst themselves which are concerned with the degree of dependence of the destination with respect to the exterior, its own tourist development strategy, production, employment, balance of payments, exchange

tourist demand composition which are necessary in a mature tourist destination.

that are offered in a specific destination.

**with the supply** 

transport, restoration.

activities, cause foreign currency exiting.

rates, monetary supply, public income and expenses, inflation, property value speculation, income distribution, consumption habits, professional training, socio– cultural changes, effects on the environment, rural settings and regional development. Bull (1992) reviews the externalities generated by tourism and classifies them from the individual and group perspective. The externalities for individuals are divided into 1) benefits: new transport route connections, new shops and amenities, high property values, evidence of local positive effects (mirage effects); 2) costs: inflation, traffic congestion, noise. Externalities for governments and groups: 1) benefits: tax revenue increases, increase in cultural value, preservation of flora and fauna; 2) costs: maintenance of tourist infrastructure where tourists do not cover these expenses, additional services police, healthcare—, destruction of flora and fauna.

Opportunity costs must be considered and understood for each one of the actions that it causes before the proliferation and potential reach of tourism expansion. Opportunity costs reflect the value that is given up by using resources in the tourist activity and not in other activities. Nevertheless, all of the transformations and mechanisms that are put into place and that are interrelated with regards to the numerous arrivals of visitors to the area complicate the measure of what really generates tourist activity. The inherent difficulties found in the nature of the service industry and actual circumstances may, however, reflect that the costs are not always valued as highly as the benefits.

This fact could be reduced in part if some reliable statistics were available on tourism supply and demand components. Nevertheless, available statistics provide a very limited view of the reality hidden behind this market. A common calculation, especially in areas that have been intentionally developed as tourist destinations, includes figures that are given which evaluate the number of expected foreigner visitors that they will periodically receive. The continuous increase of such a number continues as if it were the only sign of the tourist destination. Nevertheless, as Frechtling stated (1987a, 1987b), in a world of limited resources, the measure of economic profits from tourism in an area without parallel measure of the associated costs of the same, can induce, not only harm to the environment, but also waste public funds or drastically reduce the quality of life of the local residents.

Nevertheless, it is necessary to understand the difficulty of establishing a real value of these impacts —positive and negative—, created in most cases from mass tourism, as analyzed by Archer & Cooper (1998), and how these impacts can be transformed spectacularly by the appearance and the quality of the receiving area and the lifestyle of the residents. In spite of all of the inconveniences that could exist in the valuation of this subsector, the transcendence of tourism as an activity with multiplier effects, extremely complicated in terms of control from the supply perspective, and only quantifiable from the demand perspective, is such that all generalizations that are carried out will still be useful.

In summary, tourism interacts with general economic activity of the receiving area, impacts economic growth of the surroundings where the activity is developed and is influenced by it. These interactions should not be ignored by any tourism planning project, and the project will benefit if in the initial stages of tourism take off is accompanied by good forecasts of the aggregate tourist demand, and, in the case of a mature destination, other types of disaggregate forecasts on the potential tourist of the destination will be available.

Mature Tourist Destination: A New Tool to Forecast Internal Composition of Its Demand 183

techniques. The second criticism of this type of analysis centers on the lack of incorporation of other variables which the forecasting variable depends on. Nevertheless, this absence could be corrected, at least in part by recurring to transference function models, and also to structured time series models (Harvey, 1989). These models recur to more flexible specifications from the typical components from a time series, as opposed to the traditional deterministic formulation, assuming that each one is stochastic (see tourism demand

Causal methods are quantitative methods that look for explanations for one variable based on other variables that it depends on. Among this type of methods there are econometric models using multivariate regression, based on causal relationships derived from theoretical principles. Nevertheless, specification errors and data measurement can limit their estimating ability, producing comparable results with other models that require lesser effort

Qualitative methods introduce judgments and expert opinions in tourism and, in particular, of the economic agents that directly intervene in the market —airlines, hotels, tour operators, etc. These techniques are particularly appropriate when past data are insufficient or inappropriate for the study, or when the changes in a previous non-tested stage convert the past data as inappropriate. Among these methods are the Delphi technique and morphological analysis. The Delphi technique consists in reaching a consensus in a group of expert opinions in the subject to be forecasted. The experts are interviewed and later have access to the responses from the other experts, and are given an opportunity to reevaluate their own opinions until the groups reach a consensus for all of the questions. The objective of morphological analysis is to structure the existing information in an ordered form to determine the most probable outcome. In the first stage the most important variables are identified, in addition to the parameters and constraints which affect them. The relationships of these parameters are then determined in order to compare how they perform when combined with the others. The results of these combinations lead to the calculation of demand levels under different assumptions on the variables (see Kaynak et al., 1994). Criticisms of the subjective methods, especially with the Delphi technique, focus on the need to avoid the possible existence of bias on part of the field interviewers, and specifically, in the problem of the appropriate choice of experts and the analysis of the responses, over-pessimism or over-optimism, or the possible inadequacy of the

The third forecasting method category includes mixed methods, which are based on the assumption that neither the purely quantitative point of view nor the exclusively qualitative perspective can properly forecast in any time-space dimension. That is, the short-term forecast is inclined towards the use of time series, while the mid-term and long-term appear to be more appropriate for some of the subjective methods, in spite of their disadvantages. Some models have developed estimates based on quantitative techniques. Choy (1984), Clewer et al. (1990) and Witt & Witt (1992, 1995) compared the obtained results using quantitative techniques from several different models. From this comparison he came to the following conclusions: 1) It is extremely difficult for any one model to forecast small tourist tendencies. 2) It is not possible to construct one model that is appropriate for all origindestination pairs, nor one set of explanatory variables. 3) In general, ARIMA models and the assumption that the future does not change with respect to past data —naive expectations seems to provide forecasts with high levels of precision, while an analysis of the tendency

analysis using structural equation modelling in Turner & Witt, 2001).

and are less expensive.

technique to a specific problem.

#### **3. Aggregate and disaggregate focus on tourist demand**

A tourist market is considered established when a potential tourist and a tourist supplier contact each other. Tourism supply tries to adapt its offer to the particularities of the potential tourist, and if these are disregarded or unknown, the existing imbalance between both sides of the tourist market of the developed model will cease to exist in the tourist destination. In this case, Say´s Law does not seem to apply, instead demand determines the guidelines of how supply will act. It is clear that additional encouragement in the path towards knowledge of future demand at a specific site is welcome, not only in absolute terms —aggregate tourist demand—, but also in internal composition —disaggregate demand.

Although there is a need by the supplier to know the individual peculiarities of potential tourists, the arrival of an important number of tourists to specific countries or areas in a tourist destination has drawn scientific interest in the quantification and explanation of tourist trends in absolute terms, that is, of aggregate demand. The main objective of the majority of empirical studies on tourist flows does not focus on their explanation of demand but instead on forecasting. Without reliable forecasts of tourist demand it is difficult, if not impossible, to create developmental plans, or to formulate political solutions in tourism.

Tisdell (2000) summarizes the five reasons why the forecast of tourist demand and the number of tourists is important for mature destination: 1) evaluation of tourism projects; 2) influences on relevant tourism strategies, such as price fixing, the grouping of tourist products or the determination of promotional expense levels; 3) assistance to governments when establishing tax charges in appropriate tourist activities; 4) guideline for governments in the provisions of needed infrastructure and public services to attend to tourists and minimize possible social costs that are generated by tourism; 5) significant variations in tourism demand can have important macroeconomic repercussions on employment and inflation.

Thus, taking into account the undeniable importance of the aggregate forecast of tourist demand, the most referenced typology has been to classify the forecasting methods into three categories: quantitative, qualitative and mixed (see recent developments in tourism demand modelling and forecasting in Song & Li, 2008, and Song et al., 2009). Quantitative techniques are methods that obtain the forecasted values of a studied based on its past evolution or on observed relationships among the forecasted variable and explanatory variables. Thus they are divided into univariate analysis of time series and causal methods. Univariate analysis of time series is based on the identification of historical data patterns using statistical methods and the extrapolation of observed behavior in the past (see Li et al., 2005). All causal factors are considered aggregate, and it is assumed that the net result of these variables is what has caused any tendency, seasonality or cyclical behavior that could exist in the data, and that an extrapolation of the tendency, seasonality or cycle would lead to an appropriate forecast. Among these methods are the naive expectations method, global and local trend adjustment methods, and the ARIMA models (see Box et al., 2008).

Witt & Martin (1987) stated that this type of forecast using extrapolation assumes that the factors that are the principal causes of the observed movement in tourist demand and would continue to be so in the future. Consequently, any change in these relationships would probably result in obtained forecasts that were worse than those produced from other

A tourist market is considered established when a potential tourist and a tourist supplier contact each other. Tourism supply tries to adapt its offer to the particularities of the potential tourist, and if these are disregarded or unknown, the existing imbalance between both sides of the tourist market of the developed model will cease to exist in the tourist destination. In this case, Say´s Law does not seem to apply, instead demand determines the guidelines of how supply will act. It is clear that additional encouragement in the path towards knowledge of future demand at a specific site is welcome, not only in absolute terms —aggregate tourist demand—, but also in internal

Although there is a need by the supplier to know the individual peculiarities of potential tourists, the arrival of an important number of tourists to specific countries or areas in a tourist destination has drawn scientific interest in the quantification and explanation of tourist trends in absolute terms, that is, of aggregate demand. The main objective of the majority of empirical studies on tourist flows does not focus on their explanation of demand but instead on forecasting. Without reliable forecasts of tourist demand it is difficult, if not impossible, to create developmental plans, or to formulate political solutions in tourism.

Tisdell (2000) summarizes the five reasons why the forecast of tourist demand and the number of tourists is important for mature destination: 1) evaluation of tourism projects; 2) influences on relevant tourism strategies, such as price fixing, the grouping of tourist products or the determination of promotional expense levels; 3) assistance to governments when establishing tax charges in appropriate tourist activities; 4) guideline for governments in the provisions of needed infrastructure and public services to attend to tourists and minimize possible social costs that are generated by tourism; 5) significant variations in tourism demand can have important macroeconomic repercussions on

Thus, taking into account the undeniable importance of the aggregate forecast of tourist demand, the most referenced typology has been to classify the forecasting methods into three categories: quantitative, qualitative and mixed (see recent developments in tourism demand modelling and forecasting in Song & Li, 2008, and Song et al., 2009). Quantitative techniques are methods that obtain the forecasted values of a studied based on its past evolution or on observed relationships among the forecasted variable and explanatory variables. Thus they are divided into univariate analysis of time series and causal methods. Univariate analysis of time series is based on the identification of historical data patterns using statistical methods and the extrapolation of observed behavior in the past (see Li et al., 2005). All causal factors are considered aggregate, and it is assumed that the net result of these variables is what has caused any tendency, seasonality or cyclical behavior that could exist in the data, and that an extrapolation of the tendency, seasonality or cycle would lead to an appropriate forecast. Among these methods are the naive expectations method, global

and local trend adjustment methods, and the ARIMA models (see Box et al., 2008).

Witt & Martin (1987) stated that this type of forecast using extrapolation assumes that the factors that are the principal causes of the observed movement in tourist demand and would continue to be so in the future. Consequently, any change in these relationships would probably result in obtained forecasts that were worse than those produced from other

**3. Aggregate and disaggregate focus on tourist demand** 

composition —disaggregate demand.

employment and inflation.

techniques. The second criticism of this type of analysis centers on the lack of incorporation of other variables which the forecasting variable depends on. Nevertheless, this absence could be corrected, at least in part by recurring to transference function models, and also to structured time series models (Harvey, 1989). These models recur to more flexible specifications from the typical components from a time series, as opposed to the traditional deterministic formulation, assuming that each one is stochastic (see tourism demand analysis using structural equation modelling in Turner & Witt, 2001).

Causal methods are quantitative methods that look for explanations for one variable based on other variables that it depends on. Among this type of methods there are econometric models using multivariate regression, based on causal relationships derived from theoretical principles. Nevertheless, specification errors and data measurement can limit their estimating ability, producing comparable results with other models that require lesser effort and are less expensive.

Qualitative methods introduce judgments and expert opinions in tourism and, in particular, of the economic agents that directly intervene in the market —airlines, hotels, tour operators, etc. These techniques are particularly appropriate when past data are insufficient or inappropriate for the study, or when the changes in a previous non-tested stage convert the past data as inappropriate. Among these methods are the Delphi technique and morphological analysis. The Delphi technique consists in reaching a consensus in a group of expert opinions in the subject to be forecasted. The experts are interviewed and later have access to the responses from the other experts, and are given an opportunity to reevaluate their own opinions until the groups reach a consensus for all of the questions. The objective of morphological analysis is to structure the existing information in an ordered form to determine the most probable outcome. In the first stage the most important variables are identified, in addition to the parameters and constraints which affect them. The relationships of these parameters are then determined in order to compare how they perform when combined with the others. The results of these combinations lead to the calculation of demand levels under different assumptions on the variables (see Kaynak et al., 1994). Criticisms of the subjective methods, especially with the Delphi technique, focus on the need to avoid the possible existence of bias on part of the field interviewers, and specifically, in the problem of the appropriate choice of experts and the analysis of the responses, over-pessimism or over-optimism, or the possible inadequacy of the technique to a specific problem.

The third forecasting method category includes mixed methods, which are based on the assumption that neither the purely quantitative point of view nor the exclusively qualitative perspective can properly forecast in any time-space dimension. That is, the short-term forecast is inclined towards the use of time series, while the mid-term and long-term appear to be more appropriate for some of the subjective methods, in spite of their disadvantages.

Some models have developed estimates based on quantitative techniques. Choy (1984), Clewer et al. (1990) and Witt & Witt (1992, 1995) compared the obtained results using quantitative techniques from several different models. From this comparison he came to the following conclusions: 1) It is extremely difficult for any one model to forecast small tourist tendencies. 2) It is not possible to construct one model that is appropriate for all origindestination pairs, nor one set of explanatory variables. 3) In general, ARIMA models and the assumption that the future does not change with respect to past data —naive expectations seems to provide forecasts with high levels of precision, while an analysis of the tendency

Mature Tourist Destination: A New Tool to Forecast Internal Composition of Its Demand 185

computer science implementation as a simulation tool to validate theories; from this point of

Although there is a clear use of these approaches for a social science such as Economics, significant communication between economists and researchers in Computational Intelligence remains absent. The main reason for this weak interaction lies in the fact that the tools and the objectives of both lines of research are very divergent. Traditional economic forecasting consists in analyzing economic systems with the help of mathematical theory. Economists use a mathematical representation of the model and try to derive analytical results. In order to make these models analytically tractable, the majority of them use behavioral assumptions that are extremely simple. Mathematical analysis then allows ideas and structural explanations of the similarities and differences in the behavior of different formulated models to be given. However, in most cases, they only allow minimal or local results to be obtained. Forecasts using Computational Intelligence offer a very different approach. It tackles the knowledge of the models that can be efficiently implemented in a computer. Usually the mathematical considerations are of minor importance and the algorithms use subjective arguments and similarities with nature. Usually, the analysis of these implementations is performed comparing with a large number from a real problem. The obtained numerical results are used to construct conjectures considering the execution of the implementation in different contexts. In this way, this approximation allows more complex knowledge models to be used although

the simulations can only suggest, and not prove, some characteristic of the model.

strategies, but also in their behavior when given certain information (Dawid, 1996).

the individual interaction between agents.

Economic models have frequently represented a population of agents based on a single representative individual. This representative individual carries out his opinions making decisions according to a chosen knowledge rule, thus determining the population state for the next period. Nevertheless, if the expected representative individual is interpreted as the expected average of all the individuals, the best response to this expected average is not, in general, the same as the average of the best responses to the individual expectations. An important effect like this cannot be ignored if representative individuals are only considered instead of heterogeneous populations. In addition, the use of a representative individual only allows the knowledge of the population based on the reaction of the same individual to the observed variables of the system, and prevents a model to be formulated that considers

Current experimental research on the behavior of economic agents reveals that these deviate substantially and systematically from the ones with premises including formal rationality produce, at least in some areas. Hence, the use of a technique that could establish similarities with the real behavior of the individuals at the moment decisions are made seems to be the

An artificially intelligent agent —the center of all computational techniques— has greater flexibility than the traditional economic agent. It possesses two obvious advantages over it. In the first place, the artificially intelligent agent is the explicit representation of each individual in the population, which allows that different individuals from a same population have different rules to construct its expectations, and that the researcher can carry out simulations of the evolution of the population under study and observe with detail the behavior of the population faced with new knowledge. The second advantage is that, contrary to the rules found in econometric principles, artificially intelligent agents allow the construction of a basically heterogeneous population of agents that not only differ in their

view, importance is given to the method — how it is done.

curves reveals that relatively inexact forecasts are given. 4) Exponential smoothing and econometric forecasts are good methods in terms of the change in direction of the tourist demand and of the changes in the trends in the one year time horizon. 5) Structural models from time series have been shown to be just better or even more precise than econometric models, especially if the forecasted time period horizon is not greater than two years. What is clear is that no econometric technique from this group is superior to the rest. Nevertheless, Martin & Witt (1987) and Witt & Witt (1995) indicated that econometric models do have a great advantage over other time series models that are summarized by simply focusing on their definition: the causality that is introduced in the initial term is not considered by the second or following terms.

Witt (1993) pointed out his expectation that other techniques would come along with greater precision that were not only useful to forecast the number of visitors from year to year, but also for a longer horizon. Along this same line of research, Tisdell (2000) states that the emphasis in the short and mid-term could be the result of bias in the research introduced by the market and political systems, and some tourist demand models could benefit from alternative forecasts instead of the traditional ones in Economics, such as the life cycle, the analysis of market segmentation, and the introduction of new variables.

To this context we need to add the limitation of the econometric methods that have been developed at present when trying to determine the internal composition of tourist demand, Internal composition is defined as the proportionality of each individual characteristic, in the form of prior information (nationality, number of nightly stays, expenses, type of lodging, age, sex) about the tourists that visit a destination. This type of disaggregate estimate is essential in mature destinations that have reached the consolidation stage, where the determination of future tourist entrants is not so urgent —it is assumed to be stable—, compared to the knowledge of those individual characteristics of the future tourists that would allow tourist supply to be conveniently adapted and thus avoid important imbalances with the demand which could create a tourist reduction in the destination.

Given the absence of valid tools for the type of required forecast, the implementation of proper genetic algorithms to this context can contribute to cover the present void. In the next section we describe the activation procedure of this method and show its utility as a forecasting tool. The procedure uses an explanatory or implicit argument from traditional economic analysis and can provide a disaggregate vision of demand. Furthermore, it allows individual characteristics of the tourist that has the highest level of satisfaction with his stay to be discovered—something not available in other techniques, that is, a potential repeat visitor and one who encourages other to do the same—, a basic element that the now mature destination needs to continue as an active destination.

#### **4. Computational intelligence and its contribution to economic research**

Current developments in information technology have led to a new and dynamic field of research which tackles the understanding and limitations of human behavior. The new area is called Artificial Intelligence, or expert systems, and one of its spinoff branches: Computational Intelligence. Artificial Intelligence is a set of technologies that is able to supply reasoning abilities to a computer that are similar to human intelligence, and importance is given to the use of this technology —what is does. The other branch is called Computational Intelligence and studies the mechanisms of human intelligence that uses any

curves reveals that relatively inexact forecasts are given. 4) Exponential smoothing and econometric forecasts are good methods in terms of the change in direction of the tourist demand and of the changes in the trends in the one year time horizon. 5) Structural models from time series have been shown to be just better or even more precise than econometric models, especially if the forecasted time period horizon is not greater than two years. What is clear is that no econometric technique from this group is superior to the rest. Nevertheless, Martin & Witt (1987) and Witt & Witt (1995) indicated that econometric models do have a great advantage over other time series models that are summarized by simply focusing on their definition: the causality that is introduced in the initial term is not

Witt (1993) pointed out his expectation that other techniques would come along with greater precision that were not only useful to forecast the number of visitors from year to year, but also for a longer horizon. Along this same line of research, Tisdell (2000) states that the emphasis in the short and mid-term could be the result of bias in the research introduced by the market and political systems, and some tourist demand models could benefit from alternative forecasts instead of the traditional ones in Economics, such as the life cycle, the

To this context we need to add the limitation of the econometric methods that have been developed at present when trying to determine the internal composition of tourist demand, Internal composition is defined as the proportionality of each individual characteristic, in the form of prior information (nationality, number of nightly stays, expenses, type of lodging, age, sex) about the tourists that visit a destination. This type of disaggregate estimate is essential in mature destinations that have reached the consolidation stage, where the determination of future tourist entrants is not so urgent —it is assumed to be stable—, compared to the knowledge of those individual characteristics of the future tourists that would allow tourist supply to be conveniently adapted and thus avoid important imbalances with the demand which could create a tourist reduction in the destination.

Given the absence of valid tools for the type of required forecast, the implementation of proper genetic algorithms to this context can contribute to cover the present void. In the next section we describe the activation procedure of this method and show its utility as a forecasting tool. The procedure uses an explanatory or implicit argument from traditional economic analysis and can provide a disaggregate vision of demand. Furthermore, it allows individual characteristics of the tourist that has the highest level of satisfaction with his stay to be discovered—something not available in other techniques, that is, a potential repeat visitor and one who encourages other to do the same—, a basic element that the now mature

**4. Computational intelligence and its contribution to economic research** 

Current developments in information technology have led to a new and dynamic field of research which tackles the understanding and limitations of human behavior. The new area is called Artificial Intelligence, or expert systems, and one of its spinoff branches: Computational Intelligence. Artificial Intelligence is a set of technologies that is able to supply reasoning abilities to a computer that are similar to human intelligence, and importance is given to the use of this technology —what is does. The other branch is called Computational Intelligence and studies the mechanisms of human intelligence that uses any

analysis of market segmentation, and the introduction of new variables.

considered by the second or following terms.

destination needs to continue as an active destination.

computer science implementation as a simulation tool to validate theories; from this point of view, importance is given to the method — how it is done.

Although there is a clear use of these approaches for a social science such as Economics, significant communication between economists and researchers in Computational Intelligence remains absent. The main reason for this weak interaction lies in the fact that the tools and the objectives of both lines of research are very divergent. Traditional economic forecasting consists in analyzing economic systems with the help of mathematical theory. Economists use a mathematical representation of the model and try to derive analytical results. In order to make these models analytically tractable, the majority of them use behavioral assumptions that are extremely simple. Mathematical analysis then allows ideas and structural explanations of the similarities and differences in the behavior of different formulated models to be given. However, in most cases, they only allow minimal or local results to be obtained. Forecasts using Computational Intelligence offer a very different approach. It tackles the knowledge of the models that can be efficiently implemented in a computer. Usually the mathematical considerations are of minor importance and the algorithms use subjective arguments and similarities with nature. Usually, the analysis of these implementations is performed comparing with a large number from a real problem. The obtained numerical results are used to construct conjectures considering the execution of the implementation in different contexts. In this way, this approximation allows more complex knowledge models to be used although the simulations can only suggest, and not prove, some characteristic of the model.

An artificially intelligent agent —the center of all computational techniques— has greater flexibility than the traditional economic agent. It possesses two obvious advantages over it. In the first place, the artificially intelligent agent is the explicit representation of each individual in the population, which allows that different individuals from a same population have different rules to construct its expectations, and that the researcher can carry out simulations of the evolution of the population under study and observe with detail the behavior of the population faced with new knowledge. The second advantage is that, contrary to the rules found in econometric principles, artificially intelligent agents allow the construction of a basically heterogeneous population of agents that not only differ in their strategies, but also in their behavior when given certain information (Dawid, 1996).

Economic models have frequently represented a population of agents based on a single representative individual. This representative individual carries out his opinions making decisions according to a chosen knowledge rule, thus determining the population state for the next period. Nevertheless, if the expected representative individual is interpreted as the expected average of all the individuals, the best response to this expected average is not, in general, the same as the average of the best responses to the individual expectations. An important effect like this cannot be ignored if representative individuals are only considered instead of heterogeneous populations. In addition, the use of a representative individual only allows the knowledge of the population based on the reaction of the same individual to the observed variables of the system, and prevents a model to be formulated that considers the individual interaction between agents.

Current experimental research on the behavior of economic agents reveals that these deviate substantially and systematically from the ones with premises including formal rationality produce, at least in some areas. Hence, the use of a technique that could establish similarities with the real behavior of the individuals at the moment decisions are made seems to be the

Mature Tourist Destination: A New Tool to Forecast Internal Composition of Its Demand 187

Genetic algorithms have been used in economic literature (Arifovic, 1994, 1995; Axelrod, 1984, 1987; Cohen, 1981; Dawid, 1996; Green & Smith, 1987; and Schrodt, 1986, among others); in tourism literature with specific reference to the problem of tourism site location (Hurley et al., 1998); and with forecasting aims (Mahfoud & Mani, 1996). However, the evidence of their application to forecasting aims with real-world data is not as extensive

Specifically, the genetic algorithm as a method to forecast internal composition of tourist demand is based on the following assumptions: 1) Tourist seeks to maximize his degree of satisfaction obtained from his stay. Such satisfaction is a measure of the correspondence between his expectations before the stay and his final perception after the stay: the higher the level, the greater the degree of satisfaction. The degree of satisfaction is a dependent variable from his personal socio-demographic features such as age, country of origin, length of stay, number of visits, type of accommodation, and services hired. 2) If a tourist is satisfied with his stay —his degree of satisfaction is high— he will probably repeat his stay at the same destination, and he will probably communicate his positive experience. This fact can encourage other tourists with similar features and service needs to visit the same destination. 3) If a tourist is not satisfied with his stay —his degree of satisfaction is low he probably will not repeat his stay at the same destination, and he will probably communicate his negative experience. This fact can discourage other tourists, whose features and service needs are similar to the first, from visiting the same destination. 4) The genetic algorithm must be redefined if the consumer preferences and the basic components

Therefore, the genetic algorithm describes the learning and evolution process which is undergone by the tourism population, where the first-visit of a tourist to a given destination is determined by the information received from a travel agency, publicity, or another tourist, and where the second-visit will be conditioned by the degree of satisfaction from the first-visit (Oppermann, 1998). A genetic algorithm application to an actual tourist population has been performed and has allowed for the forecast the specific features of satisfied tourists who will probably define the medium or long-term definitive

The underlying idea of the genetic algorithm application is that, on a population of strings or individuals identified by a characteristics vector —initial population— with a certain average degree of adaptation to the environment, it generates another one —final population— with a greater average quality or degree of adaptation. Specifically, genetic algorithms are an effective method to describe as well as to explain the dynamic process that generates changing populations, focused on maximizing the theoretical fitness function. This function involves defining an objective against which each member is tested for suitability for the environment under consideration. In other words, the genetic algorithms fitness function measures the adaptation of any individual. Therefore, the most important problem-dependent aspect in applying genetic algorithms is finding a suitable function in order to determine the fitness of each one of the population members in the genetic

Once each member in the initial population has been identified by a characteristic vector and their fitness has been evaluated, the question to answer is how the population can be modified with the objective of increasing its average fitness. Usually, the genetic algorithm modifies the

(Hernández-López, 2004, Hernández-López & Cáceres-Hernández, 2007).

of the tourism supply experience significant changes.

tourism pattern of a particular destination.

population as a function of their characteristics.

most suitable. In this sense, the genetic algorithm is the computational technique that incorporates more evolutionary and adaptive theories in its code.

#### **5. Genetic algorithms and their use to estimate internal composition and tourist demand**

Genetic algorithms (Holland, 1975) are considered models of adaptive knowledge and are of particular interest in economics. The interpretation of their different components and parameters from an economic point of view allows theoretical results relative to the behavior of the adaptation process of the agents and additional ideas to be obtained about the relationship between behavior in the model and the characteristics of the knowledge process (Dawid, 1996).

The genetic algorithm is a search algorithm for better solutions —not necessarily optimum ones—, and is especially useful for specific, large scale problems. According to Simon (1982), if this definition is used, the technique found in genetic algorithm is very useful in the economic context since each individual tries to satisfy their needs, and on occasion, can leave feeling satisfied with good actions that are not optimal. If the individual is satisfied he will stop searching for better solutions; otherwise, he will modify some of his actions. Thus, given the adaptive characteristic of the genetic algorithm, the most convenient way to analyze this adaptive behavior of the individual is to formulate a genetic model that allows it to be simulated and analyzed.

Sometimes a solution from a genetic algorithm is optimum and then they are included among optimization methods. Nevertheless, genetic algorithms differ from the traditional optimization procedures in four aspects: a) genetic algorithms work using a codification of the parameters that intervene, not with their own parameters; b) genetic algorithms, starting with a characteristic chain, do not look for only one chain as a solution, but instead a population made up of different chains; c) during their execution genetic algorithms use the information of an associated value for each individual chain; d) genetic algorithms use probabilistic transition rules, not deterministic ones, to guide in the search for solutions.

These four factors contribute to the robustness of the genetic algorithm in specific types of problems and provide an advantage not found in other techniques. Nevertheless, it is also necessary to admit that, in general, the robustness of a genetic algorithm and its efficiency in execution for a particular problem are inversely related, since the more degree of effectiveness of a genetic algorithm in a specific context, the more specialization in this context is necessary. This specialization requires the use of parameters and operators that are especially adapted to the problem at hand, but may not be so appropriate in other contexts (Davis, 1991).

The theoretical foundation of genetic algorithms is based on the genetic processes in training, learning, adaptation and the evolution of biological organisms, especially in the theory of natural selection —or survival of the fittest, according to the expression coined by Charles Darwin (*The Origin of Species*, 1859) —, and in the results of the genetic exchange and the generation of new genetic material by mutation. According to these guidelines, the genetic algorithm is a tool capable of transforming an original population whose artificially intelligent agents are identified by a characteristic vector, to another final population, made up of a specific number of components not necessarily coincidental with the original population, the majority of which have, as expected, similar characteristics to those that, in the original population, were best adapted to the environment and, consequently, most satisfied with it.

most suitable. In this sense, the genetic algorithm is the computational technique that

Genetic algorithms (Holland, 1975) are considered models of adaptive knowledge and are of particular interest in economics. The interpretation of their different components and parameters from an economic point of view allows theoretical results relative to the behavior of the adaptation process of the agents and additional ideas to be obtained about the relationship between behavior in the model and the characteristics of the knowledge

The genetic algorithm is a search algorithm for better solutions —not necessarily optimum ones—, and is especially useful for specific, large scale problems. According to Simon (1982), if this definition is used, the technique found in genetic algorithm is very useful in the economic context since each individual tries to satisfy their needs, and on occasion, can leave feeling satisfied with good actions that are not optimal. If the individual is satisfied he will stop searching for better solutions; otherwise, he will modify some of his actions. Thus, given the adaptive characteristic of the genetic algorithm, the most convenient way to analyze this adaptive behavior of the individual is to formulate a genetic model that allows

Sometimes a solution from a genetic algorithm is optimum and then they are included among optimization methods. Nevertheless, genetic algorithms differ from the traditional optimization procedures in four aspects: a) genetic algorithms work using a codification of the parameters that intervene, not with their own parameters; b) genetic algorithms, starting with a characteristic chain, do not look for only one chain as a solution, but instead a population made up of different chains; c) during their execution genetic algorithms use the information of an associated value for each individual chain; d) genetic algorithms use probabilistic transition rules, not deterministic ones, to guide in the search for solutions.

These four factors contribute to the robustness of the genetic algorithm in specific types of problems and provide an advantage not found in other techniques. Nevertheless, it is also necessary to admit that, in general, the robustness of a genetic algorithm and its efficiency in execution for a particular problem are inversely related, since the more degree of effectiveness of a genetic algorithm in a specific context, the more specialization in this context is necessary. This specialization requires the use of parameters and operators that are especially adapted to

The theoretical foundation of genetic algorithms is based on the genetic processes in training, learning, adaptation and the evolution of biological organisms, especially in the theory of natural selection —or survival of the fittest, according to the expression coined by Charles Darwin (*The Origin of Species*, 1859) —, and in the results of the genetic exchange and the generation of new genetic material by mutation. According to these guidelines, the genetic algorithm is a tool capable of transforming an original population whose artificially intelligent agents are identified by a characteristic vector, to another final population, made up of a specific number of components not necessarily coincidental with the original population, the majority of which have, as expected, similar characteristics to those that, in the original population, were best adapted to the environment and, consequently, most satisfied with it.

the problem at hand, but may not be so appropriate in other contexts (Davis, 1991).

**5. Genetic algorithms and their use to estimate internal composition and** 

incorporates more evolutionary and adaptive theories in its code.

**tourist demand** 

process (Dawid, 1996).

it to be simulated and analyzed.

Genetic algorithms have been used in economic literature (Arifovic, 1994, 1995; Axelrod, 1984, 1987; Cohen, 1981; Dawid, 1996; Green & Smith, 1987; and Schrodt, 1986, among others); in tourism literature with specific reference to the problem of tourism site location (Hurley et al., 1998); and with forecasting aims (Mahfoud & Mani, 1996). However, the evidence of their application to forecasting aims with real-world data is not as extensive (Hernández-López, 2004, Hernández-López & Cáceres-Hernández, 2007).

Specifically, the genetic algorithm as a method to forecast internal composition of tourist demand is based on the following assumptions: 1) Tourist seeks to maximize his degree of satisfaction obtained from his stay. Such satisfaction is a measure of the correspondence between his expectations before the stay and his final perception after the stay: the higher the level, the greater the degree of satisfaction. The degree of satisfaction is a dependent variable from his personal socio-demographic features such as age, country of origin, length of stay, number of visits, type of accommodation, and services hired. 2) If a tourist is satisfied with his stay —his degree of satisfaction is high— he will probably repeat his stay at the same destination, and he will probably communicate his positive experience. This fact can encourage other tourists with similar features and service needs to visit the same destination. 3) If a tourist is not satisfied with his stay —his degree of satisfaction is low he probably will not repeat his stay at the same destination, and he will probably communicate his negative experience. This fact can discourage other tourists, whose features and service needs are similar to the first, from visiting the same destination. 4) The genetic algorithm must be redefined if the consumer preferences and the basic components of the tourism supply experience significant changes.

Therefore, the genetic algorithm describes the learning and evolution process which is undergone by the tourism population, where the first-visit of a tourist to a given destination is determined by the information received from a travel agency, publicity, or another tourist, and where the second-visit will be conditioned by the degree of satisfaction from the first-visit (Oppermann, 1998). A genetic algorithm application to an actual tourist population has been performed and has allowed for the forecast the specific features of satisfied tourists who will probably define the medium or long-term definitive tourism pattern of a particular destination.

The underlying idea of the genetic algorithm application is that, on a population of strings or individuals identified by a characteristics vector —initial population— with a certain average degree of adaptation to the environment, it generates another one —final population— with a greater average quality or degree of adaptation. Specifically, genetic algorithms are an effective method to describe as well as to explain the dynamic process that generates changing populations, focused on maximizing the theoretical fitness function. This function involves defining an objective against which each member is tested for suitability for the environment under consideration. In other words, the genetic algorithms fitness function measures the adaptation of any individual. Therefore, the most important problem-dependent aspect in applying genetic algorithms is finding a suitable function in order to determine the fitness of each one of the population members in the genetic population as a function of their characteristics.

Once each member in the initial population has been identified by a characteristic vector and their fitness has been evaluated, the question to answer is how the population can be modified with the objective of increasing its average fitness. Usually, the genetic algorithm modifies the

Mature Tourist Destination: A New Tool to Forecast Internal Composition of Its Demand 189

The first step in the application of the genetic algorithm consists in formulating a fitness function which provides a value for the utility of the *ith* tourist, *Fi*, based on a set of *k* explanatory variables, X : X ,...,X i i,1 i,k , which represent specific characteristics of such a tourist. Once the fitness function is obtained, the performance of the genetic algorithm

Individuals in the population are identified by structures or bit chains that indicate their characteristics. The algorithm modifies the original population or generation *t* in two phases. In the first phase, individuals from the original population are chosen using a selection operator and an intermediate population is obtained. The probability that an individual is selected is proportional to the value of the fitness function for such an individual. It is likely that the percentage of individuals with similar characteristics who showed a high utility level will increase in the next time period when compared to the previous time period. The expected number of times that an individual is replicated depends on the relationship between the sizes of the original population and the final one. In order to obtain an intermediate population of size *n* the proportional selection operator applies the following procedure. If 1 1,1 1,r : I ,...,I denotes the set of individuals in the original population of size r and W : 1,...,n is the set of n positions where the individuals copied from the original population are located, then the intermediate population 2 2,1 2,n : I ,...,I is obtained through the selection operator 2,j s j I , and is defined as

> i i 1

(1)

F 

<sup>F</sup> P s <sup>j</sup> I P I I p , i 1,...,r, <sup>j</sup> 1,...,n

 

where pi , i 1,...,r , is the probability of copying individual *i* , that is, the quotient of the fitness of individual *i* and the sum of fitness of the *r* individuals in the original population. The intermediate population is obtained by randomly generating the results of *n* multinomial tests of size *r* with probabilities, p1,…,pr. The copies of the individuals from the original population are completed according to a specified number and a new population is obtained with the desired size. If the selection operator is defined in this way it can be said that it modifies the original population by transforming it into a new population with the

In a second phase, an element of heterogeneity should be incorporated in order to the described transformation process adapts to the observed dynamic adjustment in the population. This element of heterogeneity allows individual whose utility level is not so high to survive in addition to the possibility that new individuals will enter into the population. The crossover and mutation operators (Goldberg, 1989) are normally responsible for the resultant richer population because they allow the characteristics that identify the selected individual in the first phase to be modified. The transformation of the population from these two operators depends on the probabilities that are assigned to them. However, it should be noted that the transformations that they produce are completely random and not in any way guided by economic statements. In known social settings the automatic application of these operators can lead to the generation of populations whose individuals are defined by incoherent characteristics. In addition, it is possible that

depends on specific operators which specify change patterns in tourism population.

 <sup>i</sup> 1,i 2,j 1,i i r

hope that this resultant population is characterised by a higher fitness level.

<sup>1</sup> s:W , such that

initial population by iterating through the following two phases. In the first phase, the selection procedure chooses individuals from the initial population according to their fitness values, where higher fitness values result in greater probabilities that an individual will be selected. Therefore, this probability determines the expected number of times this individual will be reproduced as a result of the relationship between the size of both the initial population and the final one. The selected individuals define the intermediate population.

However, if the transformation process described by the genetic algorithm adapts the changes occurring in the genetic population to the real ones, then an element of randomness must be introduced in the algorithm, inasmuch as it will permit both the survival of individuals without excessive fitness and the appearance of new individuals. In fact, in the second phase, this element of randomness is introduced by two operators which modify the characteristics of the individuals belonging to the intermediate population. The first one the crossover operator— involves crossing the two selected individuals at a randomly chosen point. That is, once a point is randomly established in the string using a predetermined probability, the characteristics particular to the right of that point will be exchanged. This technique, the so-called one-point crossover, is the one applied in this research. The second operator —the mutation operator— creates new strings that are similar to current strings. With a predetermined probability, mutation randomly alters some of its characteristics into any of the other values of its rank. It should be noted that the action of the mutation operator could generate a final population with a lower fitness level than the initial one. In order to avoid this undesirable situation, the assumption for mutation probability value has to be sufficiently small.

Most of a genetic algorithms power derives from crossover operators and from simultaneous testing of the strings. The above phases are repeated until the algorithm is halted. The genetic algorithm proceeds for a fixed number of generations or when it satisfies some stopping criterion.

The genetic algorithm code proposed by Hernández-López (2004) is designed according to the simple genetic algorithm of Goldberg (1989) and is specifically adapted to the material in question. Thus, the code developed in this research is a C++ version of Goldberg's simple genetic algorithm with several innovations. Firstly, although genetic algorithms are usually applied to a randomly generated population, a suitable and specific heuristic had to be included in order to allow its application to actual data. Secondly, it was necessary to identify the tourists' features in terms of non-binary strings in order to make the code implementation easier, even though the fitness function was estimated using binary strings. In both cases, the strings were based on the explanatory variables. Finally, the use of the fitness function estimation is another innovation since it is unknown beforehand.

Suppose that a tourist population visits a specific destination and that its composition undergoes changes. An increase is expected in the percentage of individuals with similar characteristics to the tourists with highest utility level. The changes are guided by maximization or simply improvement of a hypothetical fitness function. In this case this fitness function could be defined as the tourist's utility level after the stay. Each tourist could be categorized according to a series of characteristics, such as origin country, length of the stay or type of accommodation. So, given a tourist supply, the utility level could be expressed as a function of these characteristics. Once the fitness function is fitted, the genetic algorithm is able to forecast changes in the internal composition of the population in terms of higher or lower presence of individuals with specific characteristics.

initial population by iterating through the following two phases. In the first phase, the selection procedure chooses individuals from the initial population according to their fitness values, where higher fitness values result in greater probabilities that an individual will be selected. Therefore, this probability determines the expected number of times this individual will be reproduced as a result of the relationship between the size of both the initial population

However, if the transformation process described by the genetic algorithm adapts the changes occurring in the genetic population to the real ones, then an element of randomness must be introduced in the algorithm, inasmuch as it will permit both the survival of individuals without excessive fitness and the appearance of new individuals. In fact, in the second phase, this element of randomness is introduced by two operators which modify the characteristics of the individuals belonging to the intermediate population. The first one the crossover operator— involves crossing the two selected individuals at a randomly chosen point. That is, once a point is randomly established in the string using a predetermined probability, the characteristics particular to the right of that point will be exchanged. This technique, the so-called one-point crossover, is the one applied in this research. The second operator —the mutation operator— creates new strings that are similar to current strings. With a predetermined probability, mutation randomly alters some of its characteristics into any of the other values of its rank. It should be noted that the action of the mutation operator could generate a final population with a lower fitness level than the initial one. In order to avoid this undesirable situation, the assumption for mutation

Most of a genetic algorithms power derives from crossover operators and from simultaneous testing of the strings. The above phases are repeated until the algorithm is halted. The genetic algorithm proceeds for a fixed number of generations or when it satisfies

The genetic algorithm code proposed by Hernández-López (2004) is designed according to the simple genetic algorithm of Goldberg (1989) and is specifically adapted to the material in question. Thus, the code developed in this research is a C++ version of Goldberg's simple genetic algorithm with several innovations. Firstly, although genetic algorithms are usually applied to a randomly generated population, a suitable and specific heuristic had to be included in order to allow its application to actual data. Secondly, it was necessary to identify the tourists' features in terms of non-binary strings in order to make the code implementation easier, even though the fitness function was estimated using binary strings. In both cases, the strings were based on the explanatory variables. Finally, the use of the

Suppose that a tourist population visits a specific destination and that its composition undergoes changes. An increase is expected in the percentage of individuals with similar characteristics to the tourists with highest utility level. The changes are guided by maximization or simply improvement of a hypothetical fitness function. In this case this fitness function could be defined as the tourist's utility level after the stay. Each tourist could be categorized according to a series of characteristics, such as origin country, length of the stay or type of accommodation. So, given a tourist supply, the utility level could be expressed as a function of these characteristics. Once the fitness function is fitted, the genetic algorithm is able to forecast changes in the internal composition of the population in terms

fitness function estimation is another innovation since it is unknown beforehand.

of higher or lower presence of individuals with specific characteristics.

and the final one. The selected individuals define the intermediate population.

probability value has to be sufficiently small.

some stopping criterion.

The first step in the application of the genetic algorithm consists in formulating a fitness function which provides a value for the utility of the *ith* tourist, *Fi*, based on a set of *k* explanatory variables, X : X ,...,X i i,1 i,k , which represent specific characteristics of such a tourist. Once the fitness function is obtained, the performance of the genetic algorithm depends on specific operators which specify change patterns in tourism population.

Individuals in the population are identified by structures or bit chains that indicate their characteristics. The algorithm modifies the original population or generation *t* in two phases. In the first phase, individuals from the original population are chosen using a selection operator and an intermediate population is obtained. The probability that an individual is selected is proportional to the value of the fitness function for such an individual. It is likely that the percentage of individuals with similar characteristics who showed a high utility level will increase in the next time period when compared to the previous time period. The expected number of times that an individual is replicated depends on the relationship between the sizes of the original population and the final one.

In order to obtain an intermediate population of size *n* the proportional selection operator applies the following procedure. If 1 1,1 1,r : I ,...,I denotes the set of individuals in the original population of size r and W : 1,...,n is the set of n positions where the individuals copied from the original population are located, then the intermediate population 2 2,1 2,n : I ,...,I is obtained through the selection operator 2,j s j I , and is defined as <sup>1</sup> s:W , such that

$$\mathbf{P}\left(\mathbf{s}\left(\mathbf{j}\right)=\mathbf{I}\_{1,i}\right) = \mathbf{P}\left(\mathbf{I}\_{2,j} = \mathbf{I}\_{1,i}\right) = \mathbf{p}\_i = \frac{\mathbf{F}\_i}{\sum\_{i}^{\mathbf{r}}\mathbf{F}\_i}, \qquad \mathbf{i} = \mathbf{1}\_i, \dots, \mathbf{r}\_i \; \forall \mathbf{j} = \mathbf{1}\_i, \dots, \mathbf{n} \tag{1}$$

where pi , i 1,...,r , is the probability of copying individual *i* , that is, the quotient of the fitness of individual *i* and the sum of fitness of the *r* individuals in the original population.

The intermediate population is obtained by randomly generating the results of *n* multinomial tests of size *r* with probabilities, p1,…,pr. The copies of the individuals from the original population are completed according to a specified number and a new population is obtained with the desired size. If the selection operator is defined in this way it can be said that it modifies the original population by transforming it into a new population with the hope that this resultant population is characterised by a higher fitness level.

In a second phase, an element of heterogeneity should be incorporated in order to the described transformation process adapts to the observed dynamic adjustment in the population. This element of heterogeneity allows individual whose utility level is not so high to survive in addition to the possibility that new individuals will enter into the population. The crossover and mutation operators (Goldberg, 1989) are normally responsible for the resultant richer population because they allow the characteristics that identify the selected individual in the first phase to be modified. The transformation of the population from these two operators depends on the probabilities that are assigned to them.

However, it should be noted that the transformations that they produce are completely random and not in any way guided by economic statements. In known social settings the automatic application of these operators can lead to the generation of populations whose individuals are defined by incoherent characteristics. In addition, it is possible that

Mature Tourist Destination: A New Tool to Forecast Internal Composition of Its Demand 191

final population can be placed. This final population 3 3,1 3,n : I ,...,I is obtained using the

is the probability that the individual that occupies the th q position in the intermediate population, 2,q I , is transformed or substituted in the final population by an individual whose structure is determined by Ej . If the individual that occupies the th q position in the intermediate population has structure Ei , then p p q,j i,j , that is, the term in the thj column which corresponds to the row of individual i in the transition matrix. In this way a multinomial test of size *m* with probabilities p ,...,p can be performed to determine i,1 i,m which individual. The probabilities are taken from the ith row in the transition matrix.

The forecasting of the new population from the designed genetic algorithm brings us to the next step. Participation percentages of the future tourist population for each group of identified tourists can be estimated by a given characteristic vector. If the individuals from the population are classified in *m* groups, the forecasting performance of the genetic algorithm can be evaluated with an adjusted goodness-of-fit test in terms of the difference between the observed frequency which corresponds to group *i* in the future population, <sup>i</sup> e , and the forecasted frequency for the genetic algorithm that corresponds to the same group, oi , for each of the *m* groups. In fact, the goodness of fit using transition matrix in genetic

A mature tourist destination can support a regional economy. Thus, it is necessary to care for the tourist product that it offers to potential visitors and allows them to create emotional

Potential tourists to the same destination are neither all alike nor their composition is stable. Thus, it would be more appropriate to consider them as a conglomeration of groups in constant evolution and with a very diverse demand. Then, given the rigidity of the tourist supply to adapt to eventual demands, private and public managers of this important economic activity could reap important benefits from fairly accurate knowledge of not just the number of tourists that are going to visit the destination in the near future, but the characteristics of this population related to different countries of origin, holiday length, type of lodging chosen or expenses during their visit. These characteristics identify the tourist and allow the tourist

In this sense, this chapter has shown that genetic algorithms are able to satisfy this need. Under the basic principle that the composition of a tourist population changes as a function of satisfaction with their stay, that is, higher satisfaction generates more tourists with specific features, the genetic algorithm simulates the evolution in the time that specific

A fitness function is therefore needed and defined which allows the degree of satisfaction of a tourist with its characteristics to be compared. The proposed genetic algorithm forecasts the changes in tourist demand of a destination in terms of the frequency that they are

supply to serve them, in a differentiating way, and the demands from main groups.

, q 1,...,n , <sup>j</sup> 1,...,m (2)

transition matrix operator 3,q tm q I , defined as tm(q) : Q E , such that:

algorithm code increases (see Hernández-López & Cáceres-Hernández, 2007).

links with the destination instead of other competing destinations.

components appear or disappear from such a population.

**6. Conclusion** 

P tm q E P I E p <sup>j</sup> 3,q <sup>j</sup> q,j

qualitative information exists that suggests greater likelihood in certain transformations as opposed to others. It would be interesting to introduce this information when the algorithm is being run. A good strategy may be to maintain the selection operator only to determine the intermediate population. Once the copies have been determined a new strategy should be considered. For example, take the case of a middle-aged English tourist who stays at a 5 star hotel. It is more likely that a middle-aged German tourist who stays at a 5 star hotel will replace him instead of a young French tourist who chooses apartments for his holiday. Qualitative information of this type can be explicitly incorporated into a transition matrix, but it will not be considered if the conventional crossover and mutation operators are used instead. It would be ideal to determine the values of probabilities, pij , in a hypothetical transition matrix *M* that indicates, for each individual *i* in the intermediate population from the selection, the probability that such an individual is transformed into individual *j* (Hernández-López & Cáceres-Hernández, 2007).

Suppose that *m* individuals exist whose representative strings or structures E ,...,E 1 m , are different, that is, only m of the n individuals are different in at least one feature. It is assumed that each structure Ei from the original population, or generation *t*, can be transformed into another structure E from the final population, or generation j *t+1*, with probabilities, p , i,j i, j 1,...,m . Of course, p represents the probability that the features of i,j the individual do not change. These probabilities can be placed in a matrix whose *i*th row contain those values p that indicate the probability that the i,j Ei structure is converted into each one of the possible structures, E , j j 1,...,m . Now let me look at the process of determining the transformation probabilities, pij . Suppose that the qualitative information about the real population at moment *t* does not result in substantial changes for the next generation at t 1 . In this case the transition probabilities can be establish by assuming that pi,j is inversely proportional to the number of different characters among Ei and Ej . So, if there is no difference between structures *i* and *j*, pi,j , i, j 1,...,m , while p / i,j i,j , if the differences between Ei and E structures are observed in j i,j different features. Obviously, the value of the parameter depends on the value assigned to parameter in

$$\text{Is such a way that } \sum\_{\mathbf{j}=1}^{\mathbf{m}} \mathbf{p}\_{\mathbf{i},\mathbf{j}} = \mathbf{1} \text{ , } \forall \mathbf{i} = \mathbf{1} \text{...} \text{. m} \text{. } \mathbf{1}$$

The transition matrix should, theoretically, be a square and symmetric matrix whose number of rows and columns coincide with the total number of different possible structures that can be observed in the initial population. Nevertheless, bearing in mind the available information on the population, some structures should not be considered in a real specific application of a large dimension. In the same sense, it could be advisable to exclude the presence of a distinct structure in the final population —period t 1 — which was not observed at moment *t*. According to this hypothesis, the rank of the transition matrix is reduced considerably and the value of changes for different rows in the matrix because it varies as a function of similarities between each observed Ei structure and the remaining observed structures. A formal definition of the transition matrix is then introduced during the execution of the algorithm as follows.

Let 2 2,1 2,n : I ,...,I be a set of *n* individuals from the resultant intermediate population from the copies and let *E* be a set of *m* structures in which each individual in 2 can be transformed. Q : 1,...,n is defined as the set of the *n* positions where individuals from the final population can be placed. This final population 3 3,1 3,n : I ,...,I is obtained using the transition matrix operator 3,q tm q I , defined as tm(q) : Q E , such that:

$$\mathbf{P}\left(\mathbf{t}\mathbf{m}\left(\mathbf{q}\right)=\mathbf{E}\_{\mathbf{j}}\right)=\mathbf{P}\left(\mathbf{I}\_{3,\mathbf{q}}=\mathbf{E}\_{\mathbf{j}}\right)=\mathbf{P}\_{\mathbf{q},\mathbf{j}}\quad\mathbf{q}=\mathbf{1},...,\mathbf{n}\quad\mathbf{j}=\mathbf{1},...,\mathbf{m}\tag{2}$$

is the probability that the individual that occupies the th q position in the intermediate population, 2,q I , is transformed or substituted in the final population by an individual whose structure is determined by Ej . If the individual that occupies the th q position in the intermediate population has structure Ei , then p p q,j i,j , that is, the term in the thj column which corresponds to the row of individual i in the transition matrix. In this way a multinomial test of size *m* with probabilities p ,...,p can be performed to determine i,1 i,m which individual. The probabilities are taken from the ith row in the transition matrix.

The forecasting of the new population from the designed genetic algorithm brings us to the next step. Participation percentages of the future tourist population for each group of identified tourists can be estimated by a given characteristic vector. If the individuals from the population are classified in *m* groups, the forecasting performance of the genetic algorithm can be evaluated with an adjusted goodness-of-fit test in terms of the difference between the observed frequency which corresponds to group *i* in the future population, <sup>i</sup> e , and the forecasted frequency for the genetic algorithm that corresponds to the same group, oi , for each of the *m* groups. In fact, the goodness of fit using transition matrix in genetic algorithm code increases (see Hernández-López & Cáceres-Hernández, 2007).

#### **6. Conclusion**

190 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

qualitative information exists that suggests greater likelihood in certain transformations as opposed to others. It would be interesting to introduce this information when the algorithm is being run. A good strategy may be to maintain the selection operator only to determine the intermediate population. Once the copies have been determined a new strategy should be considered. For example, take the case of a middle-aged English tourist who stays at a 5 star hotel. It is more likely that a middle-aged German tourist who stays at a 5 star hotel will replace him instead of a young French tourist who chooses apartments for his holiday. Qualitative information of this type can be explicitly incorporated into a transition matrix, but it will not be considered if the conventional crossover and mutation operators are used instead. It would be ideal to determine the values of probabilities, pij , in a hypothetical transition matrix *M* that indicates, for each individual *i* in the intermediate population from the selection, the probability that such an individual is transformed into individual *j*

Suppose that *m* individuals exist whose representative strings or structures E ,...,E 1 m , are different, that is, only m of the n individuals are different in at least one feature. It is assumed that each structure Ei from the original population, or generation *t*, can be transformed into another structure E from the final population, or generation j *t+1*, with probabilities, p , i,j i, j 1,...,m . Of course, p represents the probability that the features of i,j the individual do not change. These probabilities can be placed in a matrix whose *i*th row contain those values p that indicate the probability that the i,j Ei structure is converted into each one of the possible structures, E , j j 1,...,m . Now let me look at the process of determining the transformation probabilities, pij . Suppose that the qualitative information about the real population at moment *t* does not result in substantial changes for the next generation at t 1 . In this case the transition probabilities can be establish by assuming that pi,j is inversely proportional to the number of different characters among Ei and Ej . So, if

parameter depends on the value assigned to

The transition matrix should, theoretically, be a square and symmetric matrix whose number of rows and columns coincide with the total number of different possible structures that can be observed in the initial population. Nevertheless, bearing in mind the available information on the population, some structures should not be considered in a real specific application of a large dimension. In the same sense, it could be advisable to exclude the presence of a distinct structure in the final population —period t 1 — which was not observed at moment *t*. According to this hypothesis, the rank of the transition matrix is

varies as a function of similarities between each observed Ei structure and the remaining observed structures. A formal definition of the transition matrix is then introduced during

Let 2 2,1 2,n : I ,...,I be a set of *n* individuals from the resultant intermediate population from the copies and let *E* be a set of *m* structures in which each individual in 2 can be transformed. Q : 1,...,n is defined as the set of the *n* positions where individuals from the

, i, j 1,...,m , while p / i,j

changes for different rows in the matrix because it

 i,j , if

parameter in

different features.

(Hernández-López & Cáceres-Hernández, 2007).

there is no difference between structures *i* and *j*, pi,j

, i 1,...,m .

Obviously, the value of the

m i,j j 1

reduced considerably and the value of

the execution of the algorithm as follows.

p 1

such a way that

the differences between Ei and E structures are observed in j i,j

A mature tourist destination can support a regional economy. Thus, it is necessary to care for the tourist product that it offers to potential visitors and allows them to create emotional links with the destination instead of other competing destinations.

Potential tourists to the same destination are neither all alike nor their composition is stable. Thus, it would be more appropriate to consider them as a conglomeration of groups in constant evolution and with a very diverse demand. Then, given the rigidity of the tourist supply to adapt to eventual demands, private and public managers of this important economic activity could reap important benefits from fairly accurate knowledge of not just the number of tourists that are going to visit the destination in the near future, but the characteristics of this population related to different countries of origin, holiday length, type of lodging chosen or expenses during their visit. These characteristics identify the tourist and allow the tourist supply to serve them, in a differentiating way, and the demands from main groups.

In this sense, this chapter has shown that genetic algorithms are able to satisfy this need. Under the basic principle that the composition of a tourist population changes as a function of satisfaction with their stay, that is, higher satisfaction generates more tourists with specific features, the genetic algorithm simulates the evolution in the time that specific components appear or disappear from such a population.

A fitness function is therefore needed and defined which allows the degree of satisfaction of a tourist with its characteristics to be compared. The proposed genetic algorithm forecasts the changes in tourist demand of a destination in terms of the frequency that they are

Mature Tourist Destination: A New Tool to Forecast Internal Composition of Its Demand 193

The author is grateful to Professor Wanhill, Dr. Alegre-Martín, Dr. Cáceres-Hernández, Dr. López-Martín, Mr Pérez-Pérez, and the anonymous referees for their helpful comments.

Archer, B.H. & Cooper, Ch. (1998). The positive and negative impacts of tourism, In: *Global* 

Arifovic, J. (1994). Genetic algorithm learning and the cobweb model, *Journal of Economic* 

Arifovic, J. (1995). Genetic algorithms and Inflationary Economics, *Journal of Monetary* 

Box, G.E.P.; Jenkins, G.M. & Reinsel, G.C. (2008). *Time Series Analysis: Forecasting and Control* 

Bull, A. (1992). *The economics of travel and tourism*, Halsted Press, John Wiley and Sons, ISBN

Clewer, A.; Pack, A. & Sinclair, M.T. (1990). Forecasting models for tourism demand in city

Cohen, M.D. (1981). The power of parallel thinking, *Journal of Economic Behavior and* 

Davis, L. (1991) (Ed.). *Handbook of Genetic Algorithm*, Van Nostrand Reinhold, ISBN 0-442-

Dawid, H. (1996). *Adaptive Learning by Genetic Algorithms. Analytical Results and Applications* 

Frechtling, D.C. (1987a). Assessing the Impacts of Travel and Tourism —Measuring

Frechtling, D.C. (1987b). Assessing the Impacts of Travel and Tourism —Measuring

Goldberg, D.E. (1989). *Genetic Algorithms in Search Optimization, and machine Learning,*

Greene, D.P. & Smith, S.F. (1987). A genetic system for learning models of consumer choice,

Erlbaum Associates, Inc, Publishers, ISBN 0-8058-0159-6, New Yersey

Axelrod, R. (1984). *The evolution of cooperation*, Basic Books, ISBN 0-465-02122-0, New York Axelrod, R. (1987). The evolution of strategies in the iterated prisioner's dilemma, In: *Genetic* 

*Dynamics and Control*, Vol.18, pp. 3-28, ISSN 0165-1889

(4th ed.), Hoboken, John Wiley, ISBN: 978-0-470-27284-8

*Organization*, Vol.2, pp. 285-306, ISSN 0167-2681

Springer, ISBN 978-3-540-65607-4, New York

Wiley and Sons, ISBN 978-0-471-58248-9, New York

Wiley and Sons, ISBN 978-0-471-58248-9, New York

Addison Wesley, ISBN 0-201-15767-5, Reading, Massachusetts

*Economics*, Vol.36, pp. 219-243, ISSN 0304-3932

*Tourism: Second Edition*, W.F. Theobald (Ed.), pp 63-81, Butterworth-Heinemann,

*Algorithms and Simulated Annealing,* L.D. Davis (Ed.), pp. 32-41, Pitman, ISBN 0-934-

dominated and coastal areas, *Papers of the Regional Science Association*, Vol.69, pp.

*to Economic Models*, Lecture Notes in Economics and Mathematical Systems, 441,

Economic Benefits, In: *Travel, Tourism, and Hospitality Research: A Handbook for Managers and Researchers*, J.R.B. Ritchie & C.R. Goeldner (Eds.)*,* pp. 333-351, John

Economic Costs, In: *Travel, Tourism, and Hospitality Research: A Handbook for Managers and Researchers*, J.R.B. Ritchie & C.R. Goeldner (Eds.), pp. 353-361, John

In: *Genetic Algorithms and their applications: Proceedings of the Second International Conference on Genetic Algorithms*, J.J. Grefenstette (Ed.), pp. 217-223, Lawrence

**7. Acknowledgement** 

ISBN 978-0-750-64022-0, Oxford

978-0-582-80731-0, New York

31-42, ISSN: 1435-5957

00173-8, New York

61344-3, London

**8. References** 

representing individuals with a specific combination of characteristics. In this respect, Hernández-López (2004) offered a design of an adapted version of the well known Goldberg simple genetic algorithm (1989), adapted to the tourism context, which required using a real population of identified individuals by means of non-dichotomy natural attributes such as the initial population.

A genetic algorithm using this implementation contributes clear benefits to the forecast of the internal composition of the tourist demand, but the use of a transition matrix that facilitates the introduction of the economic arguments, such as a guide of the transformations of the chosen individuals in the first stage it has been observed that forecasted results improve. With this objective, Hernández-López & Cáceres-Hernández (2007) implement a genetic algorithm with a transition matrix where traditional cross and mutation genetic operators are substituted by a transition matrix whose elements are the probabilities that any of the structures, or a set of characteristics that define an individual, is transformed into another. In this way, the element of randomness stays in the transformation, however the correspondence can be attained among the expected transformations in a population and the knowledge that it has on it.

In order to conclude, genetic algorithms can be used as a statistic producing tool of a complementary forecast to those obtained with traditional econometric techniques. From a general point of view, the interaction between genetic algorithms and economic analysis presents an advantageous future. The relationship between both of research fields is assured because of the evolutionary theories in economic thought has certainly resurgence in the literature recently. The vision of economic agents that do not pursue optimization in all of its actions, but only in the majority of its cases, that pursue personal characteristics, wishes and objectives only while trying to evolve towards better situations, is something seen in everyday economics and also plays an important role in the basic structure of a genetic algorithm.

The idea developed in this chapter provides opportunities for future research. Firstly, it seems possible to obtain useful information so that the parameters that make up the transition matrix reflect with greater realism the transformation probabilities of some structures in others. This improvement in the transition matrix implies an improvement in the forecasting capacity of the algorithm, and in the measure in which the speed of the implicitly incorporated transformation in these adjusts to the speed of the observed explanatory change in the real population. Note that only the change in the structure of the population of potential tourist service demands have been considered from the tourist service that faces a fixed supply. However, if the supply changes parallel modifications in demand occurs. It is interesting, therefore, to research the formulation of a model that gathers the responses of the demand and the adaptive strategies used in the search for new clients. Along this line, it must be recalled that the change in supply will mean a change in the fitness function, given that the same tourist characteristics will not be associated, in general, to the same level of satisfaction if the environment has changed.

Research in this new area is still in its infancy. Its future could be well linked to the parallel development of statistics and surveys at the local level that propitiate a greater disaggregate understanding of the tourist population expected by tourism suppliers in a destination, without which these types of study cannot contribute meaningful information. More investigations of this type and the use of genetic algorithm in order to know the characteristics of potential tourists in mature destinations are expected in the future.

#### **7. Acknowledgement**

The author is grateful to Professor Wanhill, Dr. Alegre-Martín, Dr. Cáceres-Hernández, Dr. López-Martín, Mr Pérez-Pérez, and the anonymous referees for their helpful comments.

#### **8. References**

192 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

representing individuals with a specific combination of characteristics. In this respect, Hernández-López (2004) offered a design of an adapted version of the well known Goldberg simple genetic algorithm (1989), adapted to the tourism context, which required using a real population of identified individuals by means of non-dichotomy natural attributes such as

A genetic algorithm using this implementation contributes clear benefits to the forecast of the internal composition of the tourist demand, but the use of a transition matrix that facilitates the introduction of the economic arguments, such as a guide of the transformations of the chosen individuals in the first stage it has been observed that forecasted results improve. With this objective, Hernández-López & Cáceres-Hernández (2007) implement a genetic algorithm with a transition matrix where traditional cross and mutation genetic operators are substituted by a transition matrix whose elements are the probabilities that any of the structures, or a set of characteristics that define an individual, is transformed into another. In this way, the element of randomness stays in the transformation, however the correspondence can be attained among the expected

In order to conclude, genetic algorithms can be used as a statistic producing tool of a complementary forecast to those obtained with traditional econometric techniques. From a general point of view, the interaction between genetic algorithms and economic analysis presents an advantageous future. The relationship between both of research fields is assured because of the evolutionary theories in economic thought has certainly resurgence in the literature recently. The vision of economic agents that do not pursue optimization in all of its actions, but only in the majority of its cases, that pursue personal characteristics, wishes and objectives only while trying to evolve towards better situations, is something seen in everyday economics and also plays an important role in the basic structure of a genetic algorithm.

The idea developed in this chapter provides opportunities for future research. Firstly, it seems possible to obtain useful information so that the parameters that make up the transition matrix reflect with greater realism the transformation probabilities of some structures in others. This improvement in the transition matrix implies an improvement in the forecasting capacity of the algorithm, and in the measure in which the speed of the implicitly incorporated transformation in these adjusts to the speed of the observed explanatory change in the real population. Note that only the change in the structure of the population of potential tourist service demands have been considered from the tourist service that faces a fixed supply. However, if the supply changes parallel modifications in demand occurs. It is interesting, therefore, to research the formulation of a model that gathers the responses of the demand and the adaptive strategies used in the search for new clients. Along this line, it must be recalled that the change in supply will mean a change in the fitness function, given that the same tourist characteristics will not be associated, in

Research in this new area is still in its infancy. Its future could be well linked to the parallel development of statistics and surveys at the local level that propitiate a greater disaggregate understanding of the tourist population expected by tourism suppliers in a destination, without which these types of study cannot contribute meaningful information. More investigations of this type and the use of genetic algorithm in order to know the

characteristics of potential tourists in mature destinations are expected in the future.

transformations in a population and the knowledge that it has on it.

general, to the same level of satisfaction if the environment has changed.

the initial population.


**10** 

*Spain* 

Jesús E. Martínez Marín *Technical University of Catalonia* 

*Department of Nautical Sciences & Engineering* 

*Rideport: International Network of Port & Coast's Experts* 

**Security Measures on the International Tourism** 

One of the most important elements of the tourism industry are the cruises. All the vessels and specially the passenger ships are considered vulnerable to the incidents came from the intentionality of the humans. As of September 11- 2001, important changes have come about in security matters, especially for the Western Hemisphere. Ports and vessels, given their vulnerability due to internationalization they represent, are the target for all kinds of

For years now the International Maritime Organisation (IMO) has been establishing measures to prevent act of vandalism, such as piracy and attacks on vessels by insurgents in

However, to consider a port a high-risk location which could be used to perpetrate an attack

When we are talking about security on board, we must consider that since 2004, with the come in to force of the International Ship and Port Facility Security Code (ISPS), as an amendment to the Safety of Life at Sea (SOLAS) Convention (1974/1988), the vessels and the ports must be prepared for "detect security threats and take preventative measures against

On board the passenger's vessels, the prevention must be sometimes, even stricter, due to persons have free movement for all around the vessel. The investigations regarding this matter, comments that the prevention must go to avoid that unexpected action take place

On board the vessels, as all the transportation system, a big numbers of persons are coming on board, so the first measure is precisely avoid the access of a potential conflictive persons during the sea voyage, the problem suppose to be closed a shore before departure and

The problem starts when the next question came: how can be appreciated the intentionality

on society or the port itself is a concept that has gained strength since 9/11.

security incidents affecting ships or port facilities used in international trade".

**2. Vulnerability & risk on board the vessels** 

during the voyage at sea or when in port.

attended by expert staff. (Marí R & Libran A,2003)

**1. Introduction** 

terrorist attacks.

conflict zones.

of a person?


### **Security Measures on the International Tourism**

#### Jesús E. Martínez Marín

*Technical University of Catalonia Department of Nautical Sciences & Engineering Rideport: International Network of Port & Coast's Experts Spain* 

#### **1. Introduction**

194 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Harvey, A.C. (1989). *Forecasting, Structural Time Series Models and the Kalman Filter*,

Hernández-López, M. (2004). Future tourists' characteristics and decisions: The use of

Hernández-López, M. & Cáceres-Hernández, J.J. (2007). Forecasting tourists' characteristics

Holland, J.H. (1975). *Adaptation in natural and artificial systems.* Ann Arbor. The University of

Hurley, S.; Moutinho, L. & Witt, S.F. (1998). Genetic algorithms for tourism marketing, *Annals of Tourism Research*, Vol.25, No.2, pp. 498-514, ISSN 0160-7383 Kaynak, E.; Bloom, J. & Leibold, M. (1994). Using the Delphi technique to predict future

Li, G.; Song, H. &Witt, S.F. (2005). Forecasting tourism demand using econometric models,

Mahfoud, S. & Mani, G. (1996). Financial forecasting using genetic algorithms, *Applied* 

Martin, C.A. & Witt, S.F. (1987). Tourism Demand Forecasting Models: Choice of

Oppermann, M. (1998). Destination threshold potential and the law of repeat visitation, *Journal of Travel Research*, Vol.37, No.23, pp. 131-137, ISSN 0047-2875 Schrodt, P.A. (1986). Predicting International Events, *Byte*, Nov., pp. 177-192, ISSN 0360-5280 Simon, H.A. (1982). *Models of Bounded Rationality,* MIT Press, ISBN 978-0-262-19372-6,

Song, H. & Li, G (2008). Tourism demand modelling and forecasting – a review of recent research, *Tourism Management*, Vol.29, No.2, pp. 203-220, ISSN 0261-5177 Song, H.; Witt, S.F. & Li, G. (2009). *The advanced econometrics of tourism demand*, Routledge,

Tisdell, C. (2000). Introduction: Basic economics of tourism: An overview mainly of Volume

Turner, L.W. & Witt, S.F. (2001) Factors influencing demand for international tourism:

Witt, S.F. & Martin, C.A. (1987). Econometric models for forecasting international tourism demand, *Journal of Travel Research,* Vol.25, No.3, pp. 23-30, ISSN 0047-2875 Witt, S.F. & Witt, C.A. (1992). *Modelling and Forecasting Demand in Tourism*, Academic Press,

Witt, S.F. & Witt, C.A. (1995). Forecasting tourism demand: A review of empirical research, *International Journal of Forecasting*, Vol.11, No.3, pp. 447-475, ISSN 0169-2070 Witt, U. (1993) (ed.). *Evolutionary Economics*, Edward Elgar Publishing, ISBN 978-1-852-

I, In: *The Economics of Tourism,* C. Tisdell (Ed.), Vol.I, pp: xv-xxxix, The International Library of Critical Writings in Economics 121, Edward Elgar Publishing, ISBN 978-

tourism demand analysis using structural equation modelling, *Tourism Economics*,

Costa (Eds.), Butterworth-Heinemann, ISBN 0-7506-6378-2, Oxford

*Artificial Intelligence*, Vol 10, pp. 543-565, ISSN 0883-9514

No.3, pp. 233-246, ISSN 0261-5177

ISBN13 978-0-203-89146-9, New York

Vol.7, No.1, pp. 21-38, ISSN 1354-8166

ISBN 978-0-127-60740-5, London

1-858-98403-2, London

78593-2, London

genetic algorithms as a forecasting method, *Tourism Economics,* Vol.10, No.3, pp.

by a genetic algorithm with a transition matrix, *Tourism Management*, Vol.28, pp.

tourism potential, *Marketing Intelligence & Planning*, Vol.12, No.7, pp.18-29, ISSN

In: *Tourism Management Dynamics: Trends, Management and Tools*, D. Buhalis & C.

appropriate variable to represent tourists' cost of living, *Tourism Management*, Vol.8,

Cambridge University Press, ISBN 978-0-521-40573-7, Cambridge

Michigan Press, ISBN 978-0-262-58111-0, Michigan

245-262, ISSN 1354-8166

290-297, ISSN 0261-5177

0263-4503

Cambridge

One of the most important elements of the tourism industry are the cruises. All the vessels and specially the passenger ships are considered vulnerable to the incidents came from the intentionality of the humans. As of September 11- 2001, important changes have come about in security matters, especially for the Western Hemisphere. Ports and vessels, given their vulnerability due to internationalization they represent, are the target for all kinds of terrorist attacks.

For years now the International Maritime Organisation (IMO) has been establishing measures to prevent act of vandalism, such as piracy and attacks on vessels by insurgents in conflict zones.

However, to consider a port a high-risk location which could be used to perpetrate an attack on society or the port itself is a concept that has gained strength since 9/11.

#### **2. Vulnerability & risk on board the vessels**

When we are talking about security on board, we must consider that since 2004, with the come in to force of the International Ship and Port Facility Security Code (ISPS), as an amendment to the Safety of Life at Sea (SOLAS) Convention (1974/1988), the vessels and the ports must be prepared for "detect security threats and take preventative measures against security incidents affecting ships or port facilities used in international trade".

On board the passenger's vessels, the prevention must be sometimes, even stricter, due to persons have free movement for all around the vessel. The investigations regarding this matter, comments that the prevention must go to avoid that unexpected action take place during the voyage at sea or when in port.

On board the vessels, as all the transportation system, a big numbers of persons are coming on board, so the first measure is precisely avoid the access of a potential conflictive persons during the sea voyage, the problem suppose to be closed a shore before departure and attended by expert staff. (Marí R & Libran A,2003)

The problem starts when the next question came: how can be appreciated the intentionality of a person?

Security Measures on the International Tourism 197

restricting access to areas of ships, systems identification and review of crew and

To prevent external attacks in port, port authorities and port logistics operators must assume the responsibilities of comprehensive port security, hand in hand with law enforcement authorities concerned and the Port Facility Security Officer (PFSO), taking into

Ports must have service attendants, guards at the docks, which are responsible for a second access control, and all appropriate measures, and to maximize the safety of the port's

It is important to understand that these measures, apart from meeting the minimum requirements by international and national regulations should be tailored to each port

As for insider threats, legislation on the subject also specify the constant vigilance that must be on board, led by the Ship Security Officer, in collaboration with the captain and the rest

The newly built ships and bring electronic devices installed first level, which serve to

The shipping companies, shipowners and logistics operators can not cut corners on security,

Bases on the above, the author of this chapter had made and analysis on the vulnerable areas of the Ports, involved deeply on the activity of the tourism; where the visitors are

Considering all these aforementioned areas is vital to do a study about what is happening

Do they have a protection plan in case you want to do a slaughter while the room full of

Is the International Maritime Organization in the event that these places are also

These and other questions have been selected to design a consultation that had being passed to port authorities, port terminals and urban management of the Port, in order to establish:

If people are enjoying the entertainment at these sites may rest assured that they are

If the port's infrastructure are already being considered in current PFSC or not,

passengers, and other measures intended to improve the security of people board. In this vein, having in mind different forms of threats that may suffer ships such as:

Threat to the ship from the outside, both sailing and in port.

Threat of use of the vessel as an instrument of a terrorist act.

according to their uses and customs, as they may vary substantially.

account the vulnerability of ports in terms of security.

of the crew, so of ensuring security along the journey.

because security is not a cost but an investment.

passing the time when are visiting a city.

visitors?

vulnerable to attacks?

protected or not,

monitor different types of threats that can be found on board.

now with these port areas, we may have some questions:

Are there any chances of an attack such facilities how are you?

Criteria to identify if in fact these places are threats or not,

Threat to the ship from the inside.

facilities and ships at berth.

May be, with the experts some cases can be detected, but is impossible to control something that is just theory and the majority of the times, so it's really very difficult.

Talking about security, the protection must be for the passengers, vessel's crew, vessel, and also the personal items, that other people can damage, steal, or destroy. This risk increment when during the voyage is on board a famous or politician, due to sometimes, persons or organisations are looking for the way to affect their lives.

By other hand, the international net of terrorism, is also looking for any time to attack determinate interests, and the tourism Industry, has two main reasons for their intention:


The prevention in all these cases, seeks to prevent any damage, making even be aborted during its planning, so they do not materialize, but once on board, should develop a comprehensive security device that protects both humans as the vessel of any threat.

All these efforts must go hand in hand with intelligence investigations, with the idea to reduce the risk to the minimum.

The vulnerability is the degree of disability that has a security system to detect incidents or threats, therefore, must be periodically reviewed and studied to provide the team in charge with the authentic information and avoid losing control at any time.

The vessels have already identified the risk on determinate matters:


Relating to the security, the risks are determinate as follows:


#### **2.1 Specifics ricks for the passenger ships & ports**

According to statistics, most wanted merchant ships by the crime are, in principle, cruises.

Until the fateful September 11, these ships were the sector that was growing within the travel business.

The International Association of Cruise Lines in New York, represents the world's most important lines, which also has its central headquarters in the United States even do not bear American flag.

Since 1986, cruise lines and the security forces that protect them must comply with relevant legislation required by the International Maritime Organization. These regulations specify the security measures that such vessels must be met, which include security plans,

May be, with the experts some cases can be detected, but is impossible to control something

Talking about security, the protection must be for the passengers, vessel's crew, vessel, and also the personal items, that other people can damage, steal, or destroy. This risk increment when during the voyage is on board a famous or politician, due to sometimes, persons or

By other hand, the international net of terrorism, is also looking for any time to attack determinate interests, and the tourism Industry, has two main reasons for their intention:

The prevention in all these cases, seeks to prevent any damage, making even be aborted during its planning, so they do not materialize, but once on board, should develop a

All these efforts must go hand in hand with intelligence investigations, with the idea to

The vulnerability is the degree of disability that has a security system to detect incidents or threats, therefore, must be periodically reviewed and studied to provide the team in charge

Dangers associated to the transport activity: fire, machinery's risk, marine pollution,

Antisocial Risks: robbery, theft, vandalism, robbery, fraud and scam. Attacks, assaults,

According to statistics, most wanted merchant ships by the crime are, in principle, cruises. Until the fateful September 11, these ships were the sector that was growing within the

The International Association of Cruise Lines in New York, represents the world's most important lines, which also has its central headquarters in the United States even do not

Since 1986, cruise lines and the security forces that protect them must comply with relevant legislation required by the International Maritime Organization. These regulations specify the security measures that such vessels must be met, which include security plans,

comprehensive security device that protects both humans as the vessel of any threat.

that is just theory and the majority of the times, so it's really very difficult.

organisations are looking for the way to affect their lives.

2. The very high economics impact that it has.

reduce the risk to the minimum.

cargo's risk and pests.

travel business.

bear American flag.

1. The Quantity of persons on board, from different nationalities.

with the authentic information and avoid losing control at any time. The vessels have already identified the risk on determinate matters:

Relating to the security, the risks are determinate as follows: Violents actions: Terrorism, guerrillas, kidnapping, piracy.

Social's Problems: Stowaways, Illegal immigration..

**2.1 Specifics ricks for the passenger ships & ports** 

sabotage, extortion, data manipulation, drug trafficking.

Danger at sea: damaged to the hull, stranding, sinking and collision.

restricting access to areas of ships, systems identification and review of crew and passengers, and other measures intended to improve the security of people board.

In this vein, having in mind different forms of threats that may suffer ships such as:


To prevent external attacks in port, port authorities and port logistics operators must assume the responsibilities of comprehensive port security, hand in hand with law enforcement authorities concerned and the Port Facility Security Officer (PFSO), taking into account the vulnerability of ports in terms of security.

Ports must have service attendants, guards at the docks, which are responsible for a second access control, and all appropriate measures, and to maximize the safety of the port's facilities and ships at berth.

It is important to understand that these measures, apart from meeting the minimum requirements by international and national regulations should be tailored to each port according to their uses and customs, as they may vary substantially.

As for insider threats, legislation on the subject also specify the constant vigilance that must be on board, led by the Ship Security Officer, in collaboration with the captain and the rest of the crew, so of ensuring security along the journey.

The newly built ships and bring electronic devices installed first level, which serve to monitor different types of threats that can be found on board.

The shipping companies, shipowners and logistics operators can not cut corners on security, because security is not a cost but an investment.

Bases on the above, the author of this chapter had made and analysis on the vulnerable areas of the Ports, involved deeply on the activity of the tourism; where the visitors are passing the time when are visiting a city.

Considering all these aforementioned areas is vital to do a study about what is happening now with these port areas, we may have some questions:


These and other questions have been selected to design a consultation that had being passed to port authorities, port terminals and urban management of the Port, in order to establish:


Security Measures on the International Tourism 199

Following criteria and considering the limited number of experts in the area decided to

Initially the study included only universe to European ports, however, thanks to the efforts made by contacting various American ports, has enjoyed the cooperation of Spain, Chile, Panama, Costa Rica, Colombia, Venezuela and Argentina, significantly expanding the

One aspect to consider is that the realization of this survey has been possible thanks to academic character research. Sensitive and confidential nature of the data is a major

On the other hand, initially, the goal of this research aimed to survey staff crews of ships, but the non-accessibility, whether for security, political or business related to the subject, made to shift the topic applying the selection criteria outlined above experts in order to make a proposal to improve the current implementation of the ISPS (Martínez J. 2011).

Given these considerations, it is considered as the sampling unit each of the ports where it

The response rate on the number of surveys sent was as follows: 80 % of response received. To perform an analysis of the implications of the results shall be analyzed in detail the

A level of existence of the Port Facility Security Plan, the results indicate that all ports respondents have adopted a Security Plan for the protection for its port facilities in

constraint when conducting surveys on impact issues such as this.

Port Security Knowledge

Fig. 2. Map of Countries under study

geographical impact initially considered.

has been surveyed.

**2.3 Consultation response** 

accordance with the ISPS.

involvement of each of the responses.

Prestige in the maritime and port industries.

contact area 13 experts covering the following regions:

 And most importantly if the port can guarantee the operation of the themselves, and if can attached the existence of PFSC with the leisure activities of these places (if the application if needed- i.e figure 1)

Fig. 1. Port of Puerto Madero (Argentina) , Port's zone dedicated to the visitors.

With the main idea of show the real actual situation of the security on the ports, the main objectives to be met with this survey are:


#### **2.2 Survey & consultation design**

Based on the defined objectives and the geographical area to be covered, the design of the survey seeks to assess the information on vulnerable areas outside the ship-port interface, where tourists make life and carried out activities this important industry.

For the realization of the questions have been studied the most common vulnerabilities in ports, in order to identify and assess whether the port has identified in its security plan and especially the reality on the port facilities to avoid if possible, to carry out an attack and any other threat that endangers human life, facilities, and the environment, an end to the port and surrounding citizenship.

Given the great limitation, issues of confidentiality and secrecy in security issues, the sample of experts was relatively low, however, enables setting us geographic diversity to extract important information on the different regions under the study.

Experts to choose should meet the following characteristics:


Port Security Knowledge

198 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

 And most importantly if the port can guarantee the operation of the themselves, and if can attached the existence of PFSC with the leisure activities of these places (if the

Fig. 1. Port of Puerto Madero (Argentina) , Port's zone dedicated to the visitors.

With the main idea of show the real actual situation of the security on the ports, the main

Evaluate the variables to consider in the analysis of vulnerability of the Port-Tourism

Assess the degree of knowledge in the Ports in relation to the security of the areas in

Evaluate the possibility of integration or cooperation between the ISPS and security of

Based on the defined objectives and the geographical area to be covered, the design of the survey seeks to assess the information on vulnerable areas outside the ship-port interface,

For the realization of the questions have been studied the most common vulnerabilities in ports, in order to identify and assess whether the port has identified in its security plan and especially the reality on the port facilities to avoid if possible, to carry out an attack and any other threat that endangers human life, facilities, and the environment, an end to the port

Given the great limitation, issues of confidentiality and secrecy in security issues, the sample of experts was relatively low, however, enables setting us geographic diversity to extract

where tourists make life and carried out activities this important industry.

important information on the different regions under the study.

Knowledge and mastery of the subject regarding Puerto & tourism.

Experts to choose should meet the following characteristics:

Knowledge of system and port business.

application if needed- i.e figure 1)

objectives to be met with this survey are:

relation with the tourism.

**2.2 Survey & consultation design** 

and surrounding citizenship.

relationship.

these areas.

Prestige in the maritime and port industries.

Following criteria and considering the limited number of experts in the area decided to contact area 13 experts covering the following regions:

Fig. 2. Map of Countries under study

Initially the study included only universe to European ports, however, thanks to the efforts made by contacting various American ports, has enjoyed the cooperation of Spain, Chile, Panama, Costa Rica, Colombia, Venezuela and Argentina, significantly expanding the geographical impact initially considered.

One aspect to consider is that the realization of this survey has been possible thanks to academic character research. Sensitive and confidential nature of the data is a major constraint when conducting surveys on impact issues such as this.

On the other hand, initially, the goal of this research aimed to survey staff crews of ships, but the non-accessibility, whether for security, political or business related to the subject, made to shift the topic applying the selection criteria outlined above experts in order to make a proposal to improve the current implementation of the ISPS (Martínez J. 2011).

Given these considerations, it is considered as the sampling unit each of the ports where it has been surveyed.

#### **2.3 Consultation response**

The response rate on the number of surveys sent was as follows: 80 % of response received.

To perform an analysis of the implications of the results shall be analyzed in detail the involvement of each of the responses.

A level of existence of the Port Facility Security Plan, the results indicate that all ports respondents have adopted a Security Plan for the protection for its port facilities in accordance with the ISPS.

Security Measures on the International Tourism 201

Ironically and fortunately, the majority of respondents considered independently of the previous answers that there are criteria that guarantee the safety of citizens while in the

In this sense, it can be considered as a future line of research in order to identify the degree of knowledge, the real risks and possible implications of an impact on the security of visitors.

In the same context, it highlights the need for further training and knowledge about ISPS and PFSC, because none of its sections provides for the protection of the areas that are port that are intended for tourist purposes, but 80% of respondents stated that the PFSC includes

When analyzing the risk may come from the surrounding areas, 90% believe they are

Is important to emphasize the vast majority recognizes that there are surveillance cameras

But when it comes to prevention, 80% recognized the absence of appropriate technological tools to prevent terrorist attacks. Considering the number of people who annually visit a port with leisure facilities, it follows that the risk in case of terrorist attack can be very large

Given the existing security levels in the ISPS, realizing that the maximum level of protection enabled emergency determined in the ISPS (level 3), the response of respondents implies that 50% of the stores and recreational areas would not change their activity in the event of a terrorist threat; indeed, only 70% of cases recognizing the existence of a warning to visitors

On the other hand it is encouraging that 100% of the claims that there is coordination with

In most cases, the National State would be in charge the security forces followed by the port

Additionally only 60% of cases, the development company or manager of the port city spaces, acknowledges to be doing staff training on port security. This aspect becomes once

In the case of unaccompanied baggage or packages left that could be considered suspicious, 60% confirm that measures are implemented to manage these cases immediately if they occur.

 The existing limitation when conducting surveys on the issue of security and port security, given the sensitivity and confidentiality of the data. However the response rate

All ports respondents have adopted a Port Facility Security Plan in accordance with the

Only 30% acknowledge a high level of compliance with the plan, while 70% admitted to

**3. Important conclusions of the consultation carried on to the experts** 

contingency plans for those areas of recreational use in the event of a risk

vulnerable and risk focus of the port and its spaces.

different agencies at the time to act in case of attack.

again highlight the weakness in the field of prevention.

Attached are the main conclusions deduced from the survey:

case has been positive with 80% for the initial sample.

a medium or poor compliance.

and affects a significant number of lives.

in case of a threat.

authority.

ISPS.

and security devices installed in the spaces of these spaces.

port complex.

This percentage would lose significance if not analyzed according to the following result, in which 90% recognize the existence of criteria for considering an area as vulnerable.

Additionally, 70% admit to turn that port areas related to the city have been considered as vulnerable according to the criteria defined by the Port Authority.

As for the Passenger Terminal 60% consider that they meet the security requirements defined by the ISPS Code, which does not necessarily indicate that compliance for the rest of the tourist areas of the port.

While it is true that 60% of respondents recognized that there is compatibility between the normal routine and port security duties required by the ISPS, the remaining percentage indicated. Given that security should be met for all situations in accordance with the requirements of the ISPS is to understand which are necessary to implement measures to improve this significant percentage trying to reduce or mitigate these risks and incompatibilities. i.e figure 3.

Fig. 3. World Trade Centre of Barcelona- Tourisyic Port Facility

Is important to highlight processes at when one is committed, and presents a risk, the potential field which can affect not only reduces the same but all the processes that relate to it either directly or indirectly, can be placed in a vulnerable position to the whole routine activities.

In considering whether the port areas related to tourism, can represent a threat for 60% of respondents believe they can pose a serious risk to port security. This implies that a high percentage agrees to consider such areas as high risk and likely to have incidents. Once verified that we proceed to analyze the risks inherent in that area.

Based on this study is demonstrated that a large part of the ports surveyed do not have control and monitoring mechanisms for public use spaces. This aspect increases the risk in all the possible actions that can be generated through the direct action of a human being, with all the consequences that are deducted.

This factor is increased to analyze the outcome of the question, in which 70% admitted that the security of port areas related to leisure (not including passenger docks but the other areas such as shops, restaurants, etc.) is not linked to the Integrated Safety Harbor.

This leaves an open space for research and that still does not relate the safety of commercial space port (with modal interchanges of goods) to the security of other spaces that belong to the port area (such as those related to leisure and tourism).

In the same vein, there is not any control to address recreational craft (they do sea's tour on the ports) leaving totally unprotected access to other port facilities. Comparing this situation with the airport security, a loophole is evidence relevant to the detriment of protecting the safety of persons, vessels, ports and cities.

This percentage would lose significance if not analyzed according to the following result, in

Additionally, 70% admit to turn that port areas related to the city have been considered as

As for the Passenger Terminal 60% consider that they meet the security requirements defined by the ISPS Code, which does not necessarily indicate that compliance for the rest of

While it is true that 60% of respondents recognized that there is compatibility between the normal routine and port security duties required by the ISPS, the remaining percentage indicated. Given that security should be met for all situations in accordance with the requirements of the ISPS is to understand which are necessary to implement measures to improve this significant percentage trying to reduce or mitigate these risks and

Is important to highlight processes at when one is committed, and presents a risk, the potential field which can affect not only reduces the same but all the processes that relate to it either directly or indirectly, can be placed in a vulnerable position to the whole routine activities.

In considering whether the port areas related to tourism, can represent a threat for 60% of respondents believe they can pose a serious risk to port security. This implies that a high percentage agrees to consider such areas as high risk and likely to have incidents. Once

Based on this study is demonstrated that a large part of the ports surveyed do not have control and monitoring mechanisms for public use spaces. This aspect increases the risk in all the possible actions that can be generated through the direct action of a human being,

This factor is increased to analyze the outcome of the question, in which 70% admitted that the security of port areas related to leisure (not including passenger docks but the other

This leaves an open space for research and that still does not relate the safety of commercial space port (with modal interchanges of goods) to the security of other spaces that belong to

In the same vein, there is not any control to address recreational craft (they do sea's tour on the ports) leaving totally unprotected access to other port facilities. Comparing this situation with the airport security, a loophole is evidence relevant to the detriment of protecting the

areas such as shops, restaurants, etc.) is not linked to the Integrated Safety Harbor.

which 90% recognize the existence of criteria for considering an area as vulnerable.

vulnerable according to the criteria defined by the Port Authority.

Fig. 3. World Trade Centre of Barcelona- Tourisyic Port Facility

verified that we proceed to analyze the risks inherent in that area.

the port area (such as those related to leisure and tourism).

with all the consequences that are deducted.

safety of persons, vessels, ports and cities.

the tourist areas of the port.

incompatibilities. i.e figure 3.

Ironically and fortunately, the majority of respondents considered independently of the previous answers that there are criteria that guarantee the safety of citizens while in the port complex.

In this sense, it can be considered as a future line of research in order to identify the degree of knowledge, the real risks and possible implications of an impact on the security of visitors.

In the same context, it highlights the need for further training and knowledge about ISPS and PFSC, because none of its sections provides for the protection of the areas that are port that are intended for tourist purposes, but 80% of respondents stated that the PFSC includes contingency plans for those areas of recreational use in the event of a risk

When analyzing the risk may come from the surrounding areas, 90% believe they are vulnerable and risk focus of the port and its spaces.

Is important to emphasize the vast majority recognizes that there are surveillance cameras and security devices installed in the spaces of these spaces.

But when it comes to prevention, 80% recognized the absence of appropriate technological tools to prevent terrorist attacks. Considering the number of people who annually visit a port with leisure facilities, it follows that the risk in case of terrorist attack can be very large and affects a significant number of lives.

Given the existing security levels in the ISPS, realizing that the maximum level of protection enabled emergency determined in the ISPS (level 3), the response of respondents implies that 50% of the stores and recreational areas would not change their activity in the event of a terrorist threat; indeed, only 70% of cases recognizing the existence of a warning to visitors in case of a threat.

On the other hand it is encouraging that 100% of the claims that there is coordination with different agencies at the time to act in case of attack.

In most cases, the National State would be in charge the security forces followed by the port authority.

Additionally only 60% of cases, the development company or manager of the port city spaces, acknowledges to be doing staff training on port security. This aspect becomes once again highlight the weakness in the field of prevention.

In the case of unaccompanied baggage or packages left that could be considered suspicious, 60% confirm that measures are implemented to manage these cases immediately if they occur.

#### **3. Important conclusions of the consultation carried on to the experts**

Attached are the main conclusions deduced from the survey:


Security Measures on the International Tourism 203

 In terms of the anchorage and maneuvering areas Donsol 10% confirmed that they are well protected, and 60% say they are poorly protected or unprotected. The

 The following sections present the same pattern of results. Most find that they are "sufficiently secured". Only 20% believe they are under-protected or unprotected:

 In the case of bridges, roads and rail access, 70% do not consider there is a good level of security. Only 30% think that is quite protected and none of the respondents considered

 In terms of service vessels and equipment and protective systems and surveillance, whose authority belongs to the maritime authorities of the countries despite evidence that a higher level of protection (60% and 80% respectively), cannot be that is at the

 In the waters adjacent to ports, 50% believe they are little or no protection, 40% consider a level of protection means and a minority of 10% is considered as very secure. It's is very important to emphasize that analyzing information by geographic area to which the port belongs dispersion and disparity found in global responses are repeated to be analyzed geographically. That is, different aspects of different degrees of compliance according to the different areas however cannot be said that an area is

One of the best ways to prevent more attacks and attacks on ships is precisely the training of personnel of both ships and ports, which is why the ISPS establishes the obligation to train

These courses are instructed in basic standards of protection for each measured preventives

Moreover, in the specific case of the cruise companies must have action protocols for any additional emergency, such as unaccompanied packages, suspicious people both in port and by ship, measures that allow the passage the crew report any approach that considers

One of the most important measures for prevention are the drills with This accomplishes

Only 20% say that their land access are very well protected

same pattern applies for the berthing areas.

cargo handling equipment

level required by the legislation.

in specific courses to the actors in this business.

 Training course for Ship Security Officers Training Course for Company Officers

Training course for Port Facilities Security Officers

container storage area

this as "Very Sheltered"

**4. Preventing measures** 

Among them we have:

several objectives:

electrical distribution systems and computer systems

"more secure" in general terms that another (Martinez, 2011).

and action in an emergency at different levels has been set in the ISPS.

normal on board, review and inspection of security equipment.

Passenger awareness of the importance of the security the ship

Playing much like the real action protocols ruled the ship's security plan.

commercial port facilities (specialized and multipurpose terminals)

	- Usage by land and sea.
	- Infrastructures.
	- Communications infrastructure and information systems.
	- 60% of respondents felt that this type of port areas may represent a serious risk to port security.
	- 40% of respondents ports have mechanisms to monitor and control what people do at all times when in the port facility dedicated to recreation.
	- 70% recognized that the safety of recreational and tourist areas is not linked to Integrated Port Security.
	- 60% admit to not having control of access for people with weapons to pleasure boats moored in the harbor.
	- 90% considered that the surrounding areas are vulnerable and risk focus of the port and its spaces.
	- Paradoxically, the majority of respondents (80%) consider whether the previous replies that there are criteria that guarantee the safety of people while on this interface port and the city.
	- is recognized by 80% in the absence of appropriate technological tools to prevent terrorist attacks
	- only 60% of cases, the development company or manager of the port city spaces, acknowledges to be doing staff training on port security
	- In 50% of cases, shopping and recreational areas would not change their activity in the event of a terrorist threat at Level 3.
	- 30% of cases have recognized a warning to visitors in case of a threat.
	- 60% confirmed that measures are implemented to manage cases of unaccompanied baggage or packages left that could be considered suspects.

 70% admitted to have measures on the level of surveillance and control in areas considered vulnerable. Additionally, 90% recognized the existence of criteria for

70% said that the Port-city areas have been considered as vulnerable according to the

 40% of respondents recognized that there are inconsistencies between the normal routine and port security duties required by the ISPS, the same percentage recognizes

 For conducting drills and the existence of cooperation with state bodies, the answer is nearly unanimous. It is recognized that periodic drills and with the cooperation of state

In terms of vulnerability / protection of areas of recreational use of the port, these are

60% of respondents felt that this type of port areas may represent a serious risk to

40% of respondents ports have mechanisms to monitor and control what people do

70% recognized that the safety of recreational and tourist areas is not linked to

60% admit to not having control of access for people with weapons to pleasure

90% considered that the surrounding areas are vulnerable and risk focus of the port

 Paradoxically, the majority of respondents (80%) consider whether the previous replies that there are criteria that guarantee the safety of people while on this

is recognized by 80% in the absence of appropriate technological tools to prevent

only 60% of cases, the development company or manager of the port city spaces,

In 50% of cases, shopping and recreational areas would not change their activity in

60% confirmed that measures are implemented to manage cases of unaccompanied

In relation to the structural security of access and connectivity port structures, the

 In relation to the degree of knowledge about PFSC and ISPS requirements, a record of the need for further training and knowledge of both, since none of its sections provide for the protection of public use space and yet 80% of respondents said that the PFSC

includes contingency plans for public use areas at ports in the event of an attack.

acknowledges to be doing staff training on port security With regard to the parameters required by the ISPS warning if:

30% of cases have recognized a warning to visitors in case of a threat.

baggage or packages left that could be considered suspects.

the event of a terrorist threat at Level 3.

conclusions to note are the following:

considering an area as vulnerable.

security's forces.

Infrastructures.

the main conclusions:

port security.

and its spaces.

When it comes to prevention:

terrorist attacks

Integrated Port Security.

boats moored in the harbor.

interface port and the city.

Usage by land and sea.

criteria defined by the Port Authority.

not fulfill all the tasks set by the protection plan.

In 70% of cases are considered that are protected:

Communications infrastructure and information systems.

at all times when in the port facility dedicated to recreation.


#### **4. Preventing measures**

One of the best ways to prevent more attacks and attacks on ships is precisely the training of personnel of both ships and ports, which is why the ISPS establishes the obligation to train in specific courses to the actors in this business.

Among them we have:


These courses are instructed in basic standards of protection for each measured preventives and action in an emergency at different levels has been set in the ISPS.

Moreover, in the specific case of the cruise companies must have action protocols for any additional emergency, such as unaccompanied packages, suspicious people both in port and by ship, measures that allow the passage the crew report any approach that considers normal on board, review and inspection of security equipment.

One of the most important measures for prevention are the drills with This accomplishes several objectives:


Security Measures on the International Tourism 205

commercial heart of time, being since ancient times, places vulnerable not only to the economies of those cities but for their people, since most daily activities of citizens were

With this concept of port cities, it takes the original sense, after the modernization of ports, resulted that these compounds develop purely commercial & logistics activities and gave him back to the city, shutting down their access, limiting visibility even of cities to the seascape.

In this sense a fundamental aspect to consider, which facilitates the proper treatment of the spaces of the tourist or recreational use of the port, is to understand the complexity and variety of conditions that have these areas for processing, which are advantageous to time

They have historical memory and architectural heritage quality and attractive to tourism.

With site-specific differences, worldwide socioeconomic these complexes seem to be moving toward awareness and the need to generate changes in the direction of urban policy to promote a new model of physical organization otherwise accompanying the complex

Thus, as port companies have led to complex social phenomena taking place transfers of activities between the city and harbor, including regional and international scope due to the

In this line and as a result of the transformation and modernization in the scale and technology infrastructure of these complexes and the greater importance to the economy of the international relationship between touristic cities, the port territory has become one of

This space is now preferred, has become the venue in the cities for the location of business centers, shops, residences, hotels, museums and areas of recreational and cultural events, determining a trend that is accentuated and thereby permanently, which today can be considered one of the main causes of growth and development in a large set of cities, is the weight of the transformation of their port renewal areas, so that you can even say that the

However, after the fateful 11-S, the security measures in all aspects, were reinforced and become effective, international laws to ensure protection, first of all shipping to the United

With the entry into force of the ISPS, security measures are restricted only to commercial terminals, even we must recognize that higher priority is given to these measures in the traffic of any port in the world to the United States, and in some cases detracts from the

If we talk about the initiative CSI (Container Security Initiative), launched in 2002 by the U.S. Bureau of Customs and Border Protection (CBP), an agency of the Department of

hope of many cities damaged, it is precisely in the conversion of the port areas.

States, which immediately were taken by the most countries in the world.

Not all ports have space for public use or are not qualified as such,

developed around the harbors.

for inclusion in the PFSC:

Have severe restrictions

nature of the tourism insight.

Are limited and circumscribed,

They are marked by the topography of the sites,

Meet two emblematic elements: earth and water.

conditions of social and economic development.

the most evocative of urban contemporary.

Ports own security outside that territory.


Of all the above points which I consider more important is the awareness by the crew and passengers of the importance of comprehensive security of the ship and her starring role on the detection of any possible threat.

#### **5. Conclusion**

When talking about security and the tourism industry, cruise ships take primary importance as vectors of a large number of people who enjoy the ports and cities.

Ironically port cities as models adapted from "port-city relationship" are not formally integrated in the ISPS, but on the contrary, its internal regulations are protecting these people who enjoy recreational activities in a port.

The threats are real; there is evidence of several bombings and attacks on the ports, as well as the intentions of terrorist networks to attack the port facilities.

The idea is not to create unnecessary alarm, but be on guard against any loophole that has the current security system, which could jeopardize the most important thing there is: human life.

There are many regulations, measures, policies to protect the comprehensive security of cruise ships, ports, tourist areas of port facilities, however, no regulation, all in accordance with the needs of each port.

The standardization of regulations, to create a sense of minimum protection, however, the commitment of local authorities as extremely important, as are the real connoisseurs of the manners and customs of this place.

Safety requires collaboration definitely unrestricted throughout the industry, all players are invited to contribute part of its mission to ensure security.

One of the factors that help and is very important in these cases is the existence of port and logistics communities strengthened, and that based on them, it is easier to create mechanisms of collaboration and rapid response to security forces, and regular training to help workers in the industry know how to react to any eventuality.

In short, security is of utmost importance and effort depends directly on the concatenated all businesses, law enforcement, but especially each person serving in any role, this conglomeration of the tourism industry.

This proposal, based on research, has the idea of precedent among other things, show that the academic-research can and should collaborate in developing proposals that will not only focus toward the traditional trading port, but also focused on new and modern opportunities of sustainable development represents a port for the cities that surround it, which are today known as "Port Cities".

Beyond the figures, the number of TEUs or tons per year, the ports, have a great interaction with people through the tourist industry, which undoubtedly comes from the same source port. As is well known, near the ports, were located the main squares of cities and the

Having the information of the reaction time and assess the possible implications and

Of all the above points which I consider more important is the awareness by the crew and passengers of the importance of comprehensive security of the ship and her starring role on

When talking about security and the tourism industry, cruise ships take primary importance

Ironically port cities as models adapted from "port-city relationship" are not formally integrated in the ISPS, but on the contrary, its internal regulations are protecting these

The threats are real; there is evidence of several bombings and attacks on the ports, as well

The idea is not to create unnecessary alarm, but be on guard against any loophole that has the current security system, which could jeopardize the most important thing there is: human life. There are many regulations, measures, policies to protect the comprehensive security of cruise ships, ports, tourist areas of port facilities, however, no regulation, all in accordance

The standardization of regulations, to create a sense of minimum protection, however, the commitment of local authorities as extremely important, as are the real connoisseurs of the

Safety requires collaboration definitely unrestricted throughout the industry, all players are

One of the factors that help and is very important in these cases is the existence of port and logistics communities strengthened, and that based on them, it is easier to create mechanisms of collaboration and rapid response to security forces, and regular training to

In short, security is of utmost importance and effort depends directly on the concatenated all businesses, law enforcement, but especially each person serving in any role, this

This proposal, based on research, has the idea of precedent among other things, show that the academic-research can and should collaborate in developing proposals that will not only focus toward the traditional trading port, but also focused on new and modern opportunities of sustainable development represents a port for the cities that surround it,

Beyond the figures, the number of TEUs or tons per year, the ports, have a great interaction with people through the tourist industry, which undoubtedly comes from the same source port. As is well known, near the ports, were located the main squares of cities and the

improvements to be updated immediately.

people who enjoy recreational activities in a port.

the detection of any possible threat.

with the needs of each port.

manners and customs of this place.

conglomeration of the tourism industry.

which are today known as "Port Cities".

**5. Conclusion** 

To quantify the degree of knowledge of the crew to a contingency.

as vectors of a large number of people who enjoy the ports and cities.

as the intentions of terrorist networks to attack the port facilities.

invited to contribute part of its mission to ensure security.

help workers in the industry know how to react to any eventuality.

commercial heart of time, being since ancient times, places vulnerable not only to the economies of those cities but for their people, since most daily activities of citizens were developed around the harbors.

With this concept of port cities, it takes the original sense, after the modernization of ports, resulted that these compounds develop purely commercial & logistics activities and gave him back to the city, shutting down their access, limiting visibility even of cities to the seascape.

In this sense a fundamental aspect to consider, which facilitates the proper treatment of the spaces of the tourist or recreational use of the port, is to understand the complexity and variety of conditions that have these areas for processing, which are advantageous to time for inclusion in the PFSC:


With site-specific differences, worldwide socioeconomic these complexes seem to be moving toward awareness and the need to generate changes in the direction of urban policy to promote a new model of physical organization otherwise accompanying the complex conditions of social and economic development.

Thus, as port companies have led to complex social phenomena taking place transfers of activities between the city and harbor, including regional and international scope due to the nature of the tourism insight.

In this line and as a result of the transformation and modernization in the scale and technology infrastructure of these complexes and the greater importance to the economy of the international relationship between touristic cities, the port territory has become one of the most evocative of urban contemporary.

This space is now preferred, has become the venue in the cities for the location of business centers, shops, residences, hotels, museums and areas of recreational and cultural events, determining a trend that is accentuated and thereby permanently, which today can be considered one of the main causes of growth and development in a large set of cities, is the weight of the transformation of their port renewal areas, so that you can even say that the hope of many cities damaged, it is precisely in the conversion of the port areas.

However, after the fateful 11-S, the security measures in all aspects, were reinforced and become effective, international laws to ensure protection, first of all shipping to the United States, which immediately were taken by the most countries in the world.

With the entry into force of the ISPS, security measures are restricted only to commercial terminals, even we must recognize that higher priority is given to these measures in the traffic of any port in the world to the United States, and in some cases detracts from the Ports own security outside that territory.

If we talk about the initiative CSI (Container Security Initiative), launched in 2002 by the U.S. Bureau of Customs and Border Protection (CBP), an agency of the Department of

Security Measures on the International Tourism 207

 Provide all areas of security cameras and create (if not exist) a security team to allow monitoring at all times human movement in these areas, with the intention of ensuring peace and enjoyment of people, which keeps the flow of tourists and

 Placing warning mechanisms that allow citizens to inform authorities and enforcement authorities of the presence of suspicious packages or abandoned, because in these places is not always easy to access safety equipment, assessing the

 In the event that citizens have ports docks with yachts, or, on the other hand, harbor tour boats travel (example in Barcelona of the Swallows), find ways to prevent access to material or armed persons suspect in these vessels, preventing

 On the other hand, we must maintain a permanent monitoring of the security of the port, based on strategic planning in order to get feedback, using their own

 Based on the research of the author intends to create a study commission between the Maritime and Port Authority with recreation development company of the Ports, and the authorities of the port cities, to bring all the security measures they deem appropriate under the particularity of the region-specific ports, as this will allow each port integrated PFSC, according to its specific own security measures

 This fee must design study of specific plans added to the port facility security plan, taking a global view of the port facilities in order to achieve efficiency in following minimum security measures to protect human beings in the areas surrounding

 It is very important that these plans be developed in conjunction with national security agencies, states and / or municipalities, depending on the territorial organization and legislation of each country, and be under constant observation in these areas as well as providing areas farthest from the technological means to respond swiftly to any threat arising in the port city, given the number of lives that

 In line with all previous initiatives should be developed and training plans covering all active figures involved in the port and city relations, with the aim of

ensuring a proper process of prevention beyond the emergency action.

The idea is that this proposal should adhere to the Port Security Plans, being the most easily in its modification and implementation, as well as the last link in the security chain and in the face of users ports, which allows these adjustments have a direct impact on achieving

It should also be included in the concept of interface to all areas within the port are being related to the enjoyment of human beings in their facilities and linked to the development of surrounding communities and the marina, and with this step legally protect these facilities, which would lead to the inclusion of various measures in the port security plan that can

To this must also update the entire platform technology security and protection of these areas, which would generate greater control of possible emergencies, and taking into account that

Evacuation drills in port areas intended for public use.

cooperation of citizens to prevent possible incidents.

water mobility take advantage of any possible threat.

experiences and alien to meet this objective.

and protection that are useful and necessary.

recreational or leisure of the ports.

travel on it.

greater security for citizen's ports.

protect citizens ports.

customers to these spaces.

Homeland Security, in order to "*increase security for containerized cargo shipped to the United States*" is intended to "*extend the area of external security that American borders are the last line of defense and not the first*." (Martinez, 2011)

This assertion can extract multiple reflections, which confirms that these agreements were initially prioritized the protection of U.S. ports, and over time have been extended to the rest of the world so it is fair to point out that the European Union also made likewise creating the ESCS (European Supply Chain Security) and as an example, this initiative in Spain has been called the "Secure Logistics Community," which means not only bring security to the port areas but extend to all steps in the logistics chain, from supply plants to modal transfer points, as a platform for promoting and improving the security of the supply chain, which promotes trade and logistics and agile safe through compliance of international customs regulations and the application of international best practice safety in World Trade.

Understanding both the phenomenon of conversion of port, the various legislative initiatives in international port security and the results of the survey in this study, we should note the following:


To achieve protection of the port shall:

	- Coordinate measures for areas with different characteristics from the point of view of protection.
	- Determine an organizational structure that contributes to improving port security.
	- Establish, on whether case varying measures of the different parts of the port, changing security levels and information obtained from the intelligence services.
	- Join the developers (restorations & leisure's companies) to the Port's plans drills for increase the security.

Homeland Security, in order to "*increase security for containerized cargo shipped to the United States*" is intended to "*extend the area of external security that American borders are the last line of* 

This assertion can extract multiple reflections, which confirms that these agreements were initially prioritized the protection of U.S. ports, and over time have been extended to the rest of the world so it is fair to point out that the European Union also made likewise creating the ESCS (European Supply Chain Security) and as an example, this initiative in Spain has been called the "Secure Logistics Community," which means not only bring security to the port areas but extend to all steps in the logistics chain, from supply plants to modal transfer points, as a platform for promoting and improving the security of the supply chain, which promotes trade and logistics and agile safe through compliance of international customs

Understanding both the phenomenon of conversion of port, the various legislative initiatives in international port security and the results of the survey in this study, we

 First, the great lack of knowledge beyond the Port Authority in Global Business Integration Port, i.e the entities that share services in the ports, not all know the implications and dimensions of a port as a whole, majority being the ancient doctrine that the ports were limited to commercial premises where the transfer occurred modal

 Second, all respondents felt it necessary to include public use areas in Port Protection Plans (PPP), extends the scope of the scenarios in case of increasing the level of security

 Thirdly there were many deficiencies in the current application code itself, leaving open for future research, improvements in implementation thereof, and in particular in relation to visitor use areas, should devise mechanisms to integrate existing security

 Fourth, and related to one of the questions on which further wanted to start this research has shown that the tendency of the Port-city: USOA entertainment, catering, passenger ships, considering the domestic tourism and outside, and the Safety and Security Port System they are compatible, as long as you start developing plans concatenated without affecting any other trend, i.e that the recreational use of certain port areas will not endanger the safety enclosure, and the protection of commercial space (terminal) do not leave the city without the possibility of converting obsolete spaces in modern socio-economic complexes, which are perhaps one of their few

 Define all relevant areas for port security areas including tourism and recreational use; Coordinate measures for areas with different characteristics from the point of view

 Determine an organizational structure that contributes to improving port security. Establish, on whether case varying measures of the different parts of the port, changing security levels and information obtained from the intelligence services. Join the developers (restorations & leisure's companies) to the Port's plans drills for

plans to unify and standardize the protection of the entire port system.

opportunities to generate employment and wealth.

To achieve protection of the port shall:

increase the security.

of protection.

regulations and the application of international best practice safety in World Trade.

*defense and not the first*." (Martinez, 2011)

should note the following:

cargo or passengers.

at the ports.


The idea is that this proposal should adhere to the Port Security Plans, being the most easily in its modification and implementation, as well as the last link in the security chain and in the face of users ports, which allows these adjustments have a direct impact on achieving greater security for citizen's ports.

It should also be included in the concept of interface to all areas within the port are being related to the enjoyment of human beings in their facilities and linked to the development of surrounding communities and the marina, and with this step legally protect these facilities, which would lead to the inclusion of various measures in the port security plan that can protect citizens ports.

To this must also update the entire platform technology security and protection of these areas, which would generate greater control of possible emergencies, and taking into account that

**Section 2** 

**Tourism Industry – Sustainable Development** 

most respondents agreed that their ports do not have the ideal technological protection can be consider that this is also an important point to be agreed improvement in the system.

Moreover, taking advantage of the entry into force of the legislation governing the voluntary audit request by the member states of IMO Resolution: A974.4, adopted on 1 December 2005, at paragraph 19 of the order of day, this regulation will allow states to voluntarily request to audit their management systems (in general) and management of maritime and port security, so that the proposed improvements will help even these audits are overcome every day better conditions, highlighting the improvements in areas that present safety and security do not understand how the citizens port security, and these areas from which you can access port facilities if included, in this way, all that can be added to local marinas with space for public uses, can be evaluated through audits, generating a feedback and evaluation process, which will at all times ensure excellence in the system.

#### **6. Acknowledgment**

I would like to give a special recognition to the experts who have contributed to this study, thanks to them, the assumptions have a theoretical level, have been confirmed including the conclusions drawn from research, can have a real information, contact live with every day of those people that live in the premises for the attention of tourism, motor development of many port cities.

#### **7. References**


## **Section 2**

### **Tourism Industry – Sustainable Development**

208 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

most respondents agreed that their ports do not have the ideal technological protection can be

Moreover, taking advantage of the entry into force of the legislation governing the voluntary audit request by the member states of IMO Resolution: A974.4, adopted on 1 December 2005, at paragraph 19 of the order of day, this regulation will allow states to voluntarily request to audit their management systems (in general) and management of maritime and port security, so that the proposed improvements will help even these audits are overcome every day better conditions, highlighting the improvements in areas that present safety and security do not understand how the citizens port security, and these areas from which you can access port facilities if included, in this way, all that can be added to local marinas with space for public uses, can be evaluated through audits, generating a feedback and evaluation process, which will at all times ensure excellence in the system.

I would like to give a special recognition to the experts who have contributed to this study, thanks to them, the assumptions have a theoretical level, have been confirmed including the conclusions drawn from research, can have a real information, contact live with every day of those people that live in the premises for the attention of tourism, motor development of

Brieze, F.(1989). Brides of Sea. Port Cities of Asia from 16th to the 20th Century. Honolulu,

Hawkes, K. (1989). Maritime Security. Cornell Maritime Press Ed. Vol 1. ISBN: 978-

International Maritime Organisation (1993). Piracy and other crimes. News, Nº 1, pp9-16 ,

International Maritime Organisation (2002). International Ship and Port Facility Security

Marí R & Libran A. (2003). Seguridad Pública en Buques de Pasaje. Universitat Politécnica

Martínez, J. (2009). The security of the citizen's ports. Journal of Maritime Research. ISSN:

Martínez , J. (2011). Proposal to improve the effectiveness of the implementation of the ISPS code in port facilities. Ph.D Thesis, Technical University of Catalonia, Spain.

Parrit, B. (1986). Violence at Sea: A Review of Terrorism, Acts of War, and Piracy, and Countermeasures to Prevent Terrorism. ISBN: 978-9284210336 . Paris, France.

de Catalunya Ed.; ISBN: 9788483016923, Barcelona, Spain. MARÍ, R. (2006). Security of the Port's Facilities. ICG Marge Ed. Barcelona, Spain.

Scovazzi, T. (1994). Elements of international law of the sea, Tecnos Ed. Madrid,

Parrit, B. (1996). Crime at Sea: A Practical Guide. ISBN: 978-1870077323. Paris, France.

consider that this is also an important point to be agreed improvement in the system.

**6. Acknowledgment** 

many port cities.

**7. References** 

USA.

London, UK.

0870333958, Maryland, USA.

Code, 2003 Ed. London, UK.

1697-4840, Cantabria, Spain.

**11** 

**Heritages and Transformations of Agrarian Structures and the Rural Tourism Dynamic** 

Since the early 1990s, understanding the evolutions of the countryside has been of central importance to an analysis of transformations in the economic fabric of the Czech Republic. The major political rupture of 1989 and the country's accession to the European Union in 2004 provoked a wide variety of responses to new market demands (Zrinscka, 1997). The deep social and cultural changes, partially legitimated and accompanied by domestic and European political projects, modified both the uses to which the Czech countryside was put – indeed, it was increasingly affected, to varying degrees depending on the region in question, to residential use, leisure and tourism – and society's views on rural areas themselves. The new uses of the countryside have, to varying extents, transformed local socio-economic systems by orienting a percentage of rural employment, previously dominated by agriculture, towards tourism. While tourism in the Czech countryside is not a new phenomenon, the socio-economic integration of rural areas by means of tourism is now reflected in a markedly increased capacity to accommodate visitors. This process goes hand in hand with improvements in communication infrastructure and the diversification of the offer of tourist products. It is based, particularly in the commercial sector, on a service

Today, at the national level, the tourism and leisure dynamic is marked by strongly contrasting spatial characteristics. Of course, while the differentials between the potential of the countryside and regional cultural heritages are often vital, they do not, on their own, constitute the answer to questions that must take into account other territorial factors (the proximity of the clientele; accessibility to markets; the specific nature of the social, cultural and economic structures of particular regions; the degree to which various actors are involved, etc.). Factors linked to the transformation of agriculture play an important role in a country in which tourism, seen as an aid to overcoming the farming crisis which followed the transition from Socialism in 1989, is closely linked to agriculture, which continues to serve as a pillar and a motor. Due to the strength of this link, tourism has been and continues to be highly sensitive to changes in the agricultural sector. The objective of this

**1. Introduction** 

economy which, at the same time, it helps to boost.

**in the Czech Republic** 

*Maître de Conférences des Universités Laboratoire UMR 5281 ART-Dev Université MONTPELLIER III* 

Pascal Chevalier

*France* 

### **Heritages and Transformations of Agrarian Structures and the Rural Tourism Dynamic in the Czech Republic**

Pascal Chevalier *Maître de Conférences des Universités Laboratoire UMR 5281 ART-Dev Université MONTPELLIER III France* 

#### **1. Introduction**

Since the early 1990s, understanding the evolutions of the countryside has been of central importance to an analysis of transformations in the economic fabric of the Czech Republic. The major political rupture of 1989 and the country's accession to the European Union in 2004 provoked a wide variety of responses to new market demands (Zrinscka, 1997). The deep social and cultural changes, partially legitimated and accompanied by domestic and European political projects, modified both the uses to which the Czech countryside was put – indeed, it was increasingly affected, to varying degrees depending on the region in question, to residential use, leisure and tourism – and society's views on rural areas themselves. The new uses of the countryside have, to varying extents, transformed local socio-economic systems by orienting a percentage of rural employment, previously dominated by agriculture, towards tourism. While tourism in the Czech countryside is not a new phenomenon, the socio-economic integration of rural areas by means of tourism is now reflected in a markedly increased capacity to accommodate visitors. This process goes hand in hand with improvements in communication infrastructure and the diversification of the offer of tourist products. It is based, particularly in the commercial sector, on a service economy which, at the same time, it helps to boost.

Today, at the national level, the tourism and leisure dynamic is marked by strongly contrasting spatial characteristics. Of course, while the differentials between the potential of the countryside and regional cultural heritages are often vital, they do not, on their own, constitute the answer to questions that must take into account other territorial factors (the proximity of the clientele; accessibility to markets; the specific nature of the social, cultural and economic structures of particular regions; the degree to which various actors are involved, etc.). Factors linked to the transformation of agriculture play an important role in a country in which tourism, seen as an aid to overcoming the farming crisis which followed the transition from Socialism in 1989, is closely linked to agriculture, which continues to serve as a pillar and a motor. Due to the strength of this link, tourism has been and continues to be highly sensitive to changes in the agricultural sector. The objective of this

Heritages and Transformations of Agrarian Structures

**2. The function of tourism and spatial contrasts** 

**2.1 The number of tourists varies from region to region** 

family tourism characteristic of certain rural sectors.3

1 Office-Cesky Statisticky Urad (CSU), Employment Dossier, 2006. 2 Office-Cesky Statisticky Urad (CSU), Economic Dossier, 2006.

can be affected by the way in which statistical information is collected.

and the Rural Tourism Dynamic in the Czech Republic 213

In the Czech Republic, as in most European countries, leisure has become, along with health, one of the areas in which expenditure has increased most rapidly. In terms of volume, expenditure on leisure rose by a factor of six between 1989 and 2006,1 significantly more than the 150% increase registered in most Western countries. At the same time, thanks to the fact that the buying power of Czech tourists has increased substantially since the fall of Communism and that many wealthy tourists, essentially from Germany and Austria, are now visiting a country which is cheaper than their own, the leisure industry has, on a yearby-year basis, grown significantly. Thanks to the current popularity of green issues, the Czech countryside is now able to position itself in a rapidly expanding tourist market. Examples of this trend include not only the relatively small increase in the number of traditional tourist facilities such as hotels, but also, and more importantly, to the sharp rise in the number of farms involved in agro-tourism and other forms of rural tourism.2 That said, not all of the Czech Republic's rural regions are outstandingly attractive, and while

these dynamics tend to be spatially extensive, they differ from region to region.

The intensity of tourism is a very useful indicator in terms of gauging the degree of involvement of the Czech countryside in this sector of economic activity. The notion corresponds to the number of overnight stays per 10,000 inhabitants in a specific geographical area. That said, one must be certain of the kind of overnight stays in question: some statistics include non-hotel accommodation (*gîtes*, refuges, camping sites, youth hostels); while others do not. However, such official statistics often overlook various kinds of tourism. For example, in the Czech Republic, there are a large number of second homes – known as *Chalupas* – located in the countryside. In the Socialist period, such homes were generally small, rustic buildings with modest gardens, constructed by their owners, the equivalent to Russian *datchas*. Tourist intensity merely reflects official, national and international figures, which artificially accentuate differences between various regions. In effect, if tourist intensity appears to be very high in some of the country's western regions and very low in others, this is because official tourism, the only kind for which statistics are kept, is more concentrated than the kind of non-hotel-based

Tourist activities are articulated around certain extremely popular destinations, leaving vast tracts of countryside unexploited. This phenomenon reveals highly pronounced spatial contrasts emphasizing the marginalization of vast rural tracts in the eastern, industrial part of the country. In the Novy Jicin and Ostrava regions, where the old mining and manufacturing industries, which are now in deep crisis, have left their mark

3 While elaborating our initial map of tourist intensity, we have, in order to make up for this statistical deficit, modified official figures by using a decimal logarithm, in order to attenuate contrasts and take into account certain tourist sites which, although they attract less visitors, are nevertheless significant in regard to the national average. Here again, the context is very different from one region to another, and

article is to analyze the impact of these transformations on the way in which Czech tourism is now structured. Initially, a summary of Czech tourism will be presented in an attempt to understand the main factors on which it is based. Secondly, we will examine various agricultural and tourism dynamics with a view to analyzing the links between the two activities and understanding how they are articulated.

Map 1. Czech Republic

article is to analyze the impact of these transformations on the way in which Czech tourism is now structured. Initially, a summary of Czech tourism will be presented in an attempt to understand the main factors on which it is based. Secondly, we will examine various agricultural and tourism dynamics with a view to analyzing the links between the two

activities and understanding how they are articulated.

Map 1. Czech Republic

#### **2. The function of tourism and spatial contrasts**

In the Czech Republic, as in most European countries, leisure has become, along with health, one of the areas in which expenditure has increased most rapidly. In terms of volume, expenditure on leisure rose by a factor of six between 1989 and 2006,1 significantly more than the 150% increase registered in most Western countries. At the same time, thanks to the fact that the buying power of Czech tourists has increased substantially since the fall of Communism and that many wealthy tourists, essentially from Germany and Austria, are now visiting a country which is cheaper than their own, the leisure industry has, on a yearby-year basis, grown significantly. Thanks to the current popularity of green issues, the Czech countryside is now able to position itself in a rapidly expanding tourist market. Examples of this trend include not only the relatively small increase in the number of traditional tourist facilities such as hotels, but also, and more importantly, to the sharp rise in the number of farms involved in agro-tourism and other forms of rural tourism.2 That said, not all of the Czech Republic's rural regions are outstandingly attractive, and while these dynamics tend to be spatially extensive, they differ from region to region.

#### **2.1 The number of tourists varies from region to region**

The intensity of tourism is a very useful indicator in terms of gauging the degree of involvement of the Czech countryside in this sector of economic activity. The notion corresponds to the number of overnight stays per 10,000 inhabitants in a specific geographical area. That said, one must be certain of the kind of overnight stays in question: some statistics include non-hotel accommodation (*gîtes*, refuges, camping sites, youth hostels); while others do not. However, such official statistics often overlook various kinds of tourism. For example, in the Czech Republic, there are a large number of second homes – known as *Chalupas* – located in the countryside. In the Socialist period, such homes were generally small, rustic buildings with modest gardens, constructed by their owners, the equivalent to Russian *datchas*. Tourist intensity merely reflects official, national and international figures, which artificially accentuate differences between various regions. In effect, if tourist intensity appears to be very high in some of the country's western regions and very low in others, this is because official tourism, the only kind for which statistics are kept, is more concentrated than the kind of non-hotel-based family tourism characteristic of certain rural sectors.3

Tourist activities are articulated around certain extremely popular destinations, leaving vast tracts of countryside unexploited. This phenomenon reveals highly pronounced spatial contrasts emphasizing the marginalization of vast rural tracts in the eastern, industrial part of the country. In the Novy Jicin and Ostrava regions, where the old mining and manufacturing industries, which are now in deep crisis, have left their mark

<sup>1</sup> Office-Cesky Statisticky Urad (CSU), Employment Dossier, 2006.

<sup>2</sup> Office-Cesky Statisticky Urad (CSU), Economic Dossier, 2006.

<sup>3</sup> While elaborating our initial map of tourist intensity, we have, in order to make up for this statistical deficit, modified official figures by using a decimal logarithm, in order to attenuate contrasts and take into account certain tourist sites which, although they attract less visitors, are nevertheless significant in regard to the national average. Here again, the context is very different from one region to another, and can be affected by the way in which statistical information is collected.

Heritages and Transformations of Agrarian Structures

**2.2 A tourism offer in the process of diversification** 

people, specialized geriatric centres).

and the Rural Tourism Dynamic in the Czech Republic 215

In spite of their modest altitude, the Hercynian Mountains in the Polabí agricultural basin in the Liberec region were, largely thanks to their continental climate, developed as a winter sports destination by the Socialist regime. Indeed, they rivalled, and continue to rival, facilities in the snowier mountains of central Europe (the Polish Carpathians, the High Tatras in Slovakia). Of course, while the transition from socialism to post-socialism had a profoundly destabilizing effect on facilities less able to deal with the growing demands of the clientele, the substantial investments accorded by European and Czech institutions (the Ministry of Tourism and Development), local authorities (Regions, Municipalities) and large German industrial groups have created a range of modern hotels far better able to meet the

standards of contemporary tourists, most of whom are from Austria and Germany.

With a longer history than winter sports, spas and climatism, which essentially date from the mid-19th century, continue to attract visitors to the north-west of the country (the Hradec-Kralové region) and to the southern part of the Czech-Moravian Highlands. As early as 1920, the Elbe Valley attracted over 80,000 visitors per year. Indeed, enthusiasm for these activities never waned, even during the Communist era, when Party leaders came to relax with their families at the Kuks and Dvur Kralové baths. Since the change in the political system – and partially thanks to EU pre-accession structural funds such as SAPARD4 and the LEADER+5 European Initiative Programme – major development projects have transformed and modernized spa towns, considerably diversifying their tourist offer.6 At Marienbad and Karlsbad in northern Bohemia, which boasts the country's oldest baths and the ones busiest during the Socialist period, demand from foreign tourists and an injection of Western capital has boosted the sector. In the Giant Mountains on the Polish border, it is baths specializing in the treatment of illnesses such as rheumatism, which, supported by domestic public-sector policy, have experienced the highest degree of development. In southern Moravia, market demands have obliged local actors (politicians, associations and entrepreneurs) to offer, in their establishments, mixed services (leisure and health) in order to develop parallel markets and boost their clientele. Lastly, in the south of the country and in the White Carpathians, where the country's oldest thermal baths have suffered long-term decline, a substantial architectural heritage and the availability of specialized labour has, thanks to public aid, made it possible to partially reorient services towards new health and social sectors (centres for handicapped

Green and nature-based tourism play a role of central importance in the Czech tourist industry (Majerová, 2000). As in many European countries, changes in consumer habits on the part of the clientele have provided new opportunities to develop forms of tourism more closely associated with the environment. A diverse range of services is offered,

4 One notable objective of the pre-accession SAPARD programme is to resolve prioritary problems linked to the long-term adaptation of the economies of candidate countries and to help them implement

6 As well as the LEADER programme funded by the European Union, there exists a Czech LEADER

the Community *acquis* by emphasizing the Common Agricultural Policy. 5 Liaisons Entre Actions de Développement de l'Economie Rurale

programme funded by the State and directly managed by the Ministry of Agriculture.

on the countryside, the number of overnight stays per 10,000 inhabitants is a little over 900 per year.

Elsewhere, while there is little tourism beyond traditionally popular areas, urban zones and a few outstanding sites (Bohemian Paradise Lake, for example), tourism increases in intensity the nearer one gets to the country's western borders. The regions around Prague, the veritable engine of the Czech tourist industry, have long attracted visitors. In the regions of Beroun, Praha-zapad, Praha-Vychod and Nymburk, tourist intensity is high, with occupancy rates often surpassing, in the communes with the best links to the Czech capital, 20,000 overnight stays per 1,000 inhabitants per year. The same is true for Moravia's traditional tourist areas which, with approximately 30,000 overnight stays per 1,000 inhabitants per year, have a comparable effect on the local socio-economic fabric.

Map 2. Tourist intensity in Czech Republic in 2010

on the countryside, the number of overnight stays per 10,000 inhabitants is a little over

Elsewhere, while there is little tourism beyond traditionally popular areas, urban zones and a few outstanding sites (Bohemian Paradise Lake, for example), tourism increases in intensity the nearer one gets to the country's western borders. The regions around Prague, the veritable engine of the Czech tourist industry, have long attracted visitors. In the regions of Beroun, Praha-zapad, Praha-Vychod and Nymburk, tourist intensity is high, with occupancy rates often surpassing, in the communes with the best links to the Czech capital, 20,000 overnight stays per 1,000 inhabitants per year. The same is true for Moravia's traditional tourist areas which, with approximately 30,000 overnight stays per 1,000

inhabitants per year, have a comparable effect on the local socio-economic fabric.

Map 2. Tourist intensity in Czech Republic in 2010

900 per year.

In spite of their modest altitude, the Hercynian Mountains in the Polabí agricultural basin in the Liberec region were, largely thanks to their continental climate, developed as a winter sports destination by the Socialist regime. Indeed, they rivalled, and continue to rival, facilities in the snowier mountains of central Europe (the Polish Carpathians, the High Tatras in Slovakia). Of course, while the transition from socialism to post-socialism had a profoundly destabilizing effect on facilities less able to deal with the growing demands of the clientele, the substantial investments accorded by European and Czech institutions (the Ministry of Tourism and Development), local authorities (Regions, Municipalities) and large German industrial groups have created a range of modern hotels far better able to meet the standards of contemporary tourists, most of whom are from Austria and Germany.

#### **2.2 A tourism offer in the process of diversification**

With a longer history than winter sports, spas and climatism, which essentially date from the mid-19th century, continue to attract visitors to the north-west of the country (the Hradec-Kralové region) and to the southern part of the Czech-Moravian Highlands. As early as 1920, the Elbe Valley attracted over 80,000 visitors per year. Indeed, enthusiasm for these activities never waned, even during the Communist era, when Party leaders came to relax with their families at the Kuks and Dvur Kralové baths. Since the change in the political system – and partially thanks to EU pre-accession structural funds such as SAPARD4 and the LEADER+5 European Initiative Programme – major development projects have transformed and modernized spa towns, considerably diversifying their tourist offer.6 At Marienbad and Karlsbad in northern Bohemia, which boasts the country's oldest baths and the ones busiest during the Socialist period, demand from foreign tourists and an injection of Western capital has boosted the sector. In the Giant Mountains on the Polish border, it is baths specializing in the treatment of illnesses such as rheumatism, which, supported by domestic public-sector policy, have experienced the highest degree of development. In southern Moravia, market demands have obliged local actors (politicians, associations and entrepreneurs) to offer, in their establishments, mixed services (leisure and health) in order to develop parallel markets and boost their clientele. Lastly, in the south of the country and in the White Carpathians, where the country's oldest thermal baths have suffered long-term decline, a substantial architectural heritage and the availability of specialized labour has, thanks to public aid, made it possible to partially reorient services towards new health and social sectors (centres for handicapped people, specialized geriatric centres).

Green and nature-based tourism play a role of central importance in the Czech tourist industry (Majerová, 2000). As in many European countries, changes in consumer habits on the part of the clientele have provided new opportunities to develop forms of tourism more closely associated with the environment. A diverse range of services is offered,

<sup>4</sup> One notable objective of the pre-accession SAPARD programme is to resolve prioritary problems linked to the long-term adaptation of the economies of candidate countries and to help them implement

the Community *acquis* by emphasizing the Common Agricultural Policy. 5 Liaisons Entre Actions de Développement de l'Economie Rurale

<sup>6</sup> As well as the LEADER programme funded by the European Union, there exists a Czech LEADER programme funded by the State and directly managed by the Ministry of Agriculture.

Heritages and Transformations of Agrarian Structures

and the Rural Tourism Dynamic in the Czech Republic 217

Map 3. Capacity of accomodation (hosting) of the establishments of agrotourism in Czech

In **Type 1** establishments the correlation between the tourist dynamic (expressed in terms of occupancy rates) and the agricultural dynamic (expressed in terms of production value) is one of the lowest in the country (0.29). Tourism, largely independent of farms, is above all oriented towards leisure in relatively traditional establishments such as hotels and hostels, and in social tourism centres (youth hostels). In the highly fertile Polabí Basin, the agricultural sector, which has been modernized, has never provided any kind of service to the tourist industry. A highly profitable sector in which income has risen fourfold in the last ten years, agriculture in the region has never looked to tourism to boost its earning capacity.

**3.1 Central Bohemia: A tourist dynamic independent from agriculture** 

Republic in 2010

albeit with a clear emphasis on *gîte*-style establishments. Here again, according to a pronounced east-west gradient, the offer in *gîtes*, *chambres d'hôtes*-style guest houses, and other types of farm hostels is largely located in the west of the country (Šumava), and in a few scattered areas in Moravia and the Sudetenland. All these areas boast outstanding agricultural landscapes and picturesque natural sites, and offer a range of open air activities (rambling, cycling, equestrian sports, white water rafting, etc.). Teaching farms are also popular; indeed, almost one agro-tourist farm in five7 has, over the course of the last few years, become involved in providing this type of service. Most such farms are located in the provinces surrounding Prague and Brno.

#### **3. The links between tourism and agriculture dynamics**

Since the early 1990s, rural tourism has been closely linked to agriculture, either directly, with farms being used for agro-tourism purposes,8 or indirectly, by means of support and promotion for local products. Indeed, agro-tourism plays a significant role in rural tourism. Generally speaking, in 2005, agro-tourism accounted for over 40% of total occupancy in the Czech tourist industry. In the country's most westerly regions, the occupancy rate was well over 70%. Indeed, in the Klatovy region near the German border, agro-tourism accounted for 80% of the occupancy rate. Due to these close links, rural tourism has been and remains highly dependent on the evolutions of a rapidly evolving agricultural sector. Breaking with the collectivist system which had provided the framework for its development for almost fifty years, the agricultural sector underwent a process of decollectivization which impacted farms, production capacity and the diversification of rural activities in a brutal and sometimes destructive way (Majerová, 2000).

In the second part of the article, the potential links between agricultural and tourism dynamics will be examined with a view to understanding how they are articulated. A multivariant analysis based on a series of tourism and agricultural indices will be applied to establish a map of the Czech Republic in function of the links (or lack of links) between agriculture and tourism. The ensemble of spatial analyses on the basis of which this typology has been developed combine the following criteria:



<sup>7</sup> Office-Cesky Statisticky Urad (CSU), Agricultural Survey, 2006. In the Czech nomenclature, teaching farms are farms which have signed an agreement with schools and social establishments.

<sup>8</sup> In the Czech nomenclature, agro-tourism services refer to tourism and leisure services provided by one or more agriculturalists or members of an enterprise whose headquarters is based at a working farm (in the legal sense of the term). These services concern renting rooms (*chambres d'hôtes* and *gîtes*) and a range of services including teaching farms and catering.

albeit with a clear emphasis on *gîte*-style establishments. Here again, according to a pronounced east-west gradient, the offer in *gîtes*, *chambres d'hôtes*-style guest houses, and other types of farm hostels is largely located in the west of the country (Šumava), and in a few scattered areas in Moravia and the Sudetenland. All these areas boast outstanding agricultural landscapes and picturesque natural sites, and offer a range of open air activities (rambling, cycling, equestrian sports, white water rafting, etc.). Teaching farms are also popular; indeed, almost one agro-tourist farm in five7 has, over the course of the last few years, become involved in providing this type of service. Most such farms are

Since the early 1990s, rural tourism has been closely linked to agriculture, either directly, with farms being used for agro-tourism purposes,8 or indirectly, by means of support and promotion for local products. Indeed, agro-tourism plays a significant role in rural tourism. Generally speaking, in 2005, agro-tourism accounted for over 40% of total occupancy in the Czech tourist industry. In the country's most westerly regions, the occupancy rate was well over 70%. Indeed, in the Klatovy region near the German border, agro-tourism accounted for 80% of the occupancy rate. Due to these close links, rural tourism has been and remains highly dependent on the evolutions of a rapidly evolving agricultural sector. Breaking with the collectivist system which had provided the framework for its development for almost fifty years, the agricultural sector underwent a process of decollectivization which impacted farms, production capacity and the diversification of rural activities in a brutal and

In the second part of the article, the potential links between agricultural and tourism dynamics will be examined with a view to understanding how they are articulated. A multivariant analysis based on a series of tourism and agricultural indices will be applied to establish a map of the Czech Republic in function of the links (or lack of links) between agriculture and tourism. The ensemble of spatial analyses on the basis of which this




7 Office-Cesky Statisticky Urad (CSU), Agricultural Survey, 2006. In the Czech nomenclature, teaching

8 In the Czech nomenclature, agro-tourism services refer to tourism and leisure services provided by one or more agriculturalists or members of an enterprise whose headquarters is based at a working farm (in the legal sense of the term). These services concern renting rooms (*chambres d'hôtes* and *gîtes*)

farms are farms which have signed an agreement with schools and social establishments.

located in the provinces surrounding Prague and Brno.

sometimes destructive way (Majerová, 2000).


in question are full-time or part-time.

and a range of services including teaching farms and catering.

typology has been developed combine the following criteria:

evolution per 100 inhabitants between 1995 and 2005.

hectares) and their evolution between 1995 and 2005. - Productivity of farms and areas in which they specialise.

**3. The links between tourism and agriculture dynamics** 

Map 3. Capacity of accomodation (hosting) of the establishments of agrotourism in Czech Republic in 2010

#### **3.1 Central Bohemia: A tourist dynamic independent from agriculture**

In **Type 1** establishments the correlation between the tourist dynamic (expressed in terms of occupancy rates) and the agricultural dynamic (expressed in terms of production value) is one of the lowest in the country (0.29). Tourism, largely independent of farms, is above all oriented towards leisure in relatively traditional establishments such as hotels and hostels, and in social tourism centres (youth hostels). In the highly fertile Polabí Basin, the agricultural sector, which has been modernized, has never provided any kind of service to the tourist industry. A highly profitable sector in which income has risen fourfold in the last ten years, agriculture in the region has never looked to tourism to boost its earning capacity.

Heritages and Transformations of Agrarian Structures

accommodation, visits to teaching farms and catering.

escape them. Two sub-categories can be observed.

**revenue** 

and the Rural Tourism Dynamic in the Czech Republic 219

In peripheral areas emptied of their German minority populations after the Second World War and repopulated by Czech colonists, the State took it upon itself to promote regions which, while not blessed with areas of outstanding natural beauty, played an important role in controlling the border. In 1989, giant State farms were broken up and taken over by private companies which took on responsibility for managing real estate and non-real estate assets in a region in which there were few requests for the restitution of farm land (the former owners, of German origin, having been expelled). Relatively harsh environmental conditions militated against the creation of individual farms. A large number of companies (most of them specializing in rearing cattle for milk) rapidly fell victim to economic realities. From 1995, poor agricultural yields, financial difficulties and the limited possibilities of economic reconversion led to a large number of farms going bankrupt and selling their production tools to individuals more interested in the potential of architectural and real estate heritage (which had not been destroyed by the Socialist regime) and the region's proximity to Bavaria (a source of tourists), than by its agricultural potential. Today, this heritage, rehabilitated and transformed, partially thanks to the EU's LEADER+ programme9 provides a range of tourist services, including

**3.3 The Czech-Moravian highlands: Rural tourism designed to make up for lost** 

Although a substantial number of farms are involved in tourism, an activity which can be decisive in terms of their survival, in Type 3 establishments, agricultural production is both their *raison d'être* and their main source of income. Here, farmers aim to generate additional revenue, either because income levels have dropped, or because the needs of households have increased. Generally speaking, farmers are primarily motivated by the need to generate fresh revenue enabling them to keep their money-losing farms in business. Sceptical in regard to the Common Agricultural Policy, which proved difficult to adapt to the intensive model after 1989 (a small decrease in the number of people working in agriculture, low added value in terms of production), destabilized by fluctuating yields, and in the absence of sufficient capital to invest in the most profitable production units, Type 3 establishments express a desire for autonomy vis-à-vis global economic approaches which


9 Introduced in 1991-1993, the EU's LEADER 1 initiative, which, at the time, has 12 members, was initially renewed within the framework of the LEADER II programme for a further five years (1995- 1999) in the form of pilot interventions designed to stimulate innovative approaches at the local level, and renewed again in 2000 with the name LEADER+. The programme was gradually rolled out to new member states as they joined the Union. The LEADER initiative takes an innovative approach to the development of rural areas in Europe. Its originality resides first and foremost in its decision-making processes and the projects which derive from them. Using a bottom-up approach, the LEADER method is based on principles of subsidiarity and partnership. Decisions concerning local development strategy

and individual projects are taken by bodies located as close as possible to the sites in question.

#### **3.2 Sumava: Rural tourism replacing an agricultural sector in crisis**

In 1998, tourism in **Type 2** establishment was the heart of economic activity for over 78% of farmers. Tourist services were introduced not so much to diversify agricultural activity with a view to compensating for lost revenue, but simply as a means of developing tourism *per se*. In effect, most farms function according to a commercial logic based on generating profit almost exclusively from tourism. Agriculture, a marginal activity deeply affected by the privatization of State farms, has been largely supplanted by tourism which. Indeed, tourism not only benefits from both natural and man-made advantages (mountainous regions, the wealth of local heritage and culture) but also from the proximity of Bavaria. The relatively unfertile nature of the land having forced farmers into systems of extensive cattle rearing, agriculture often serves merely as a status symbol or a shop window for tourist activities. With a correlation coefficient close to 0.80 between the evolution of the value of agricultural activity and the growth in value of tourism (in volume), agricultural productivity is inversely proportional to that of tourism. While 89% of intensive production units (which account for only 9% of farms) are not involved in agro-tourism, 92% of the most extensive holdings are taking an intensive approach to developing additional tourist services.

Map 4. Links agriculture/tourism

218 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Map 4. Links agriculture/tourism

developing additional tourist services.

**3.2 Sumava: Rural tourism replacing an agricultural sector in crisis** 

In 1998, tourism in **Type 2** establishment was the heart of economic activity for over 78% of farmers. Tourist services were introduced not so much to diversify agricultural activity with a view to compensating for lost revenue, but simply as a means of developing tourism *per se*. In effect, most farms function according to a commercial logic based on generating profit almost exclusively from tourism. Agriculture, a marginal activity deeply affected by the privatization of State farms, has been largely supplanted by tourism which. Indeed, tourism not only benefits from both natural and man-made advantages (mountainous regions, the wealth of local heritage and culture) but also from the proximity of Bavaria. The relatively unfertile nature of the land having forced farmers into systems of extensive cattle rearing, agriculture often serves merely as a status symbol or a shop window for tourist activities. With a correlation coefficient close to 0.80 between the evolution of the value of agricultural activity and the growth in value of tourism (in volume), agricultural productivity is inversely proportional to that of tourism. While 89% of intensive production units (which account for only 9% of farms) are not involved in agro-tourism, 92% of the most extensive holdings are taking an intensive approach to In peripheral areas emptied of their German minority populations after the Second World War and repopulated by Czech colonists, the State took it upon itself to promote regions which, while not blessed with areas of outstanding natural beauty, played an important role in controlling the border. In 1989, giant State farms were broken up and taken over by private companies which took on responsibility for managing real estate and non-real estate assets in a region in which there were few requests for the restitution of farm land (the former owners, of German origin, having been expelled). Relatively harsh environmental conditions militated against the creation of individual farms. A large number of companies (most of them specializing in rearing cattle for milk) rapidly fell victim to economic realities. From 1995, poor agricultural yields, financial difficulties and the limited possibilities of economic reconversion led to a large number of farms going bankrupt and selling their production tools to individuals more interested in the potential of architectural and real estate heritage (which had not been destroyed by the Socialist regime) and the region's proximity to Bavaria (a source of tourists), than by its agricultural potential. Today, this heritage, rehabilitated and transformed, partially thanks to the EU's LEADER+ programme9 provides a range of tourist services, including accommodation, visits to teaching farms and catering.

#### **3.3 The Czech-Moravian highlands: Rural tourism designed to make up for lost revenue**

Although a substantial number of farms are involved in tourism, an activity which can be decisive in terms of their survival, in Type 3 establishments, agricultural production is both their *raison d'être* and their main source of income. Here, farmers aim to generate additional revenue, either because income levels have dropped, or because the needs of households have increased. Generally speaking, farmers are primarily motivated by the need to generate fresh revenue enabling them to keep their money-losing farms in business. Sceptical in regard to the Common Agricultural Policy, which proved difficult to adapt to the intensive model after 1989 (a small decrease in the number of people working in agriculture, low added value in terms of production), destabilized by fluctuating yields, and in the absence of sufficient capital to invest in the most profitable production units, Type 3 establishments express a desire for autonomy vis-à-vis global economic approaches which escape them. Two sub-categories can be observed.


<sup>9</sup> Introduced in 1991-1993, the EU's LEADER 1 initiative, which, at the time, has 12 members, was initially renewed within the framework of the LEADER II programme for a further five years (1995- 1999) in the form of pilot interventions designed to stimulate innovative approaches at the local level, and renewed again in 2000 with the name LEADER+. The programme was gradually rolled out to new member states as they joined the Union. The LEADER initiative takes an innovative approach to the development of rural areas in Europe. Its originality resides first and foremost in its decision-making processes and the projects which derive from them. Using a bottom-up approach, the LEADER method is based on principles of subsidiarity and partnership. Decisions concerning local development strategy and individual projects are taken by bodies located as close as possible to the sites in question.

Heritages and Transformations of Agrarian Structures

farmers, whose place in society has changed substantially.

mechanism for a service economy which it simultaneously helps to boost.

*in Carpathian Europe*, Vol. 3, Rural Areas and Development, Warsaw, 2005, pp. 139-152.

often central to local tourism.11

**4. Conclusion** 

and the Rural Tourism Dynamic in the Czech Republic 221

part of the region (foothills, central hilly areas), more original forms of production were implemented after 1989. Inherited from the few very small private farms that had avoided collectivization (and which already constituted, long before the events of 1989, an alternative to the cooperative, intensive agricultural model), these original approaches are

In the context of economic globalization, both in terms of production and consumerism, in Type 4 enterprises, there has been a spectacular comeback of extensive agricultural production techniques. While in spite of the fact that, due to their still relatively high production costs, Type 4 enterprises have little hold on national and international markets, they are now part of the local tourism dynamic of which they constitute the foundation and from which they derive substantial economic benefits. In this context, local specificity is sought by means of a process of *co-development* involving both agriculture and tourism based on family smallholdings, local resources both human and material, the elaboration of competitive advantages associated with processes of reterritorialization, and the promotion of territorial externalities. This translates into a modification of the notion of the seal of approval, with a broader and more efficient territorialisation of local products. These new links with the territory can assume a variety of aspects ranging from a simple reference to the area in which products are grown, to a closer association with or even an integration into the geographical area in which goods are produced or services delivered. An example of this is the Wine Road in southern Moravia which has, on the one hand, helped to dynamize and professionalize the regional hotel offer, and, on the other, to relaunch wine production by reintroducing direct sales and wine outlets. In all these approaches, the notion of authenticity plays a central role, as it is associated by tourists with local Moravian culture, local people, local products, nature, etc. In this perspective, even if rural areas no longer automatically correspond to the agricultural world, in terms of image, agriculture nevertheless plays an important role in the way in which tourism and heritage are articulated. This context, theoretically favourable to agricultural diversification through tourism, places new demands on

Rural tourism is not a new phenomenon. The socio-economic integration of rural areas by means of the development of tourism is today reflected in the increase in the number of beds available to tourists, the renovation of hotel infrastructure, and the rise in the number of *chambres d'hôtes*. Accompanying improvements in infrastructure and a substantial diversification in the offer of tourist products, it now provides a dependable support

The evolution of consumer habits in terms of choice of rural accommodation, occupancy rates and, above all, the growing interest of agricultural communities in agro-tourism – financially more remunerative than agriculture, a sector profoundly destabilized by the change in political system in the 1990s – have led to a partial conversion of village

11 Doucha (Tomáš), Divila (Emil) and Fischer (Michal), « Land Use and Ownership and the Czech Farm Development », in Floriańczyk (Zbigniew) and Czapiewski (Konrad) (eds), *Rural Development Capacity* 

activities in industry and services means that the problem of agricultural overemployment has only been partially resolved, and a large number of small farms, most of which function in a quasi-autarkic manner, continue to function. These small farms (of an average size of 8 hectares)10 generate a relatively low level of income (less than €4,000 per year on average). Many of them are obliged to practice a form of relatively unprofessional agro-tourism benefitting from little external support. The objective of such establishments is to generate additional revenue from tourism, applying a development strategy based on the diversification of products and clients with a view to protecting themselves against the ups and downs of the agriculture industry. Sometimes designed to cater to the needs of the family, sometimes to generate additional revenue through tourism, these structures tend to function on the individual plot model developed under the Socialist system and to encourage very small-scale agro-tourism (Kučerová, 2004), the dynamic of which remains extremely limited.


#### **3.4 A strong correlation between agricultural and tourist dynamcis in southern Moravia**

**Type 4** establishments are characterized by a significant positive correlation (+0.67) between an agricultural dynamic (production value) which is relatively favourable in economic and social terms (a small decline in the active agricultural population and the maintenance of levels of productivity), and a development of rural tourism (in terms of the number of visitors) largely focused on agro-tourism. In this region, faced by problems of industrial standardization based on the intensive model, a technique frequently applied in the most fertile areas of the central part of the Morava Valley but not used in a large

<sup>10</sup> In 2005, the average size of a farm in the Czech Republic was 26 hectares; however, more than half were under 10 hectares.

agro-tourism (Kučerová, 2004), the dynamic of which remains extremely limited. - *Type 3b*: The regions adjacent to the country's northern border experienced the same series of events as Šumava: the expulsion of the German population, forced collectivization, and the introduction of State farms which marginalized independent farmers on a long-term basis and led to an increase in the number of part-time enterprises. In these last, a form of agro-tourism which, although relatively incoherent and unprofessionalized and only occasionally capable of taking the reality of local markets fully into account, seems, unlike Type 3 establishments, to provide the basis of an activity which, over time, has acquired a specific structure and the ability to diversify. In the regions benefitting from major amenities and a location nearer to the border than Type 2 establishments, occupancy rates have risen considerably since 2000. While the tourism dynamic is still relatively weak, accommodation services are increasingly viewed as part of an innovative strategy applied by agro-tourism entrepreneurs who no longer see agriculture as an entirely profitable business in its own right. At the same time, with the emergence of new localized extensive farms essentially raising cows and sheep, this form of tourism is part of the "re-activation" of a link between the territory and its products (by means of the development of qualitative strategies and the promotion of *terroir* products) which was undermined, during the Communist period, by State farms, but rendered possible by the collapse, in the liberal economic system, of the intensive agricultural

**3.4 A strong correlation between agricultural and tourist dynamcis in southern** 

**Type 4** establishments are characterized by a significant positive correlation (+0.67) between an agricultural dynamic (production value) which is relatively favourable in economic and social terms (a small decline in the active agricultural population and the maintenance of levels of productivity), and a development of rural tourism (in terms of the number of visitors) largely focused on agro-tourism. In this region, faced by problems of industrial standardization based on the intensive model, a technique frequently applied in the most fertile areas of the central part of the Morava Valley but not used in a large

10 In 2005, the average size of a farm in the Czech Republic was 26 hectares; however, more than half

model after 1995.

were under 10 hectares.

**Moravia** 

activities in industry and services means that the problem of agricultural overemployment has only been partially resolved, and a large number of small farms, most of which function in a quasi-autarkic manner, continue to function. These small farms (of an average size of 8 hectares)10 generate a relatively low level of income (less than €4,000 per year on average). Many of them are obliged to practice a form of relatively unprofessional agro-tourism benefitting from little external support. The objective of such establishments is to generate additional revenue from tourism, applying a development strategy based on the diversification of products and clients with a view to protecting themselves against the ups and downs of the agriculture industry. Sometimes designed to cater to the needs of the family, sometimes to generate additional revenue through tourism, these structures tend to function on the individual plot model developed under the Socialist system and to encourage very small-scale part of the region (foothills, central hilly areas), more original forms of production were implemented after 1989. Inherited from the few very small private farms that had avoided collectivization (and which already constituted, long before the events of 1989, an alternative to the cooperative, intensive agricultural model), these original approaches are often central to local tourism.11

In the context of economic globalization, both in terms of production and consumerism, in Type 4 enterprises, there has been a spectacular comeback of extensive agricultural production techniques. While in spite of the fact that, due to their still relatively high production costs, Type 4 enterprises have little hold on national and international markets, they are now part of the local tourism dynamic of which they constitute the foundation and from which they derive substantial economic benefits. In this context, local specificity is sought by means of a process of *co-development* involving both agriculture and tourism based on family smallholdings, local resources both human and material, the elaboration of competitive advantages associated with processes of reterritorialization, and the promotion of territorial externalities. This translates into a modification of the notion of the seal of approval, with a broader and more efficient territorialisation of local products. These new links with the territory can assume a variety of aspects ranging from a simple reference to the area in which products are grown, to a closer association with or even an integration into the geographical area in which goods are produced or services delivered. An example of this is the Wine Road in southern Moravia which has, on the one hand, helped to dynamize and professionalize the regional hotel offer, and, on the other, to relaunch wine production by reintroducing direct sales and wine outlets. In all these approaches, the notion of authenticity plays a central role, as it is associated by tourists with local Moravian culture, local people, local products, nature, etc. In this perspective, even if rural areas no longer automatically correspond to the agricultural world, in terms of image, agriculture nevertheless plays an important role in the way in which tourism and heritage are articulated. This context, theoretically favourable to agricultural diversification through tourism, places new demands on farmers, whose place in society has changed substantially.

#### **4. Conclusion**

Rural tourism is not a new phenomenon. The socio-economic integration of rural areas by means of the development of tourism is today reflected in the increase in the number of beds available to tourists, the renovation of hotel infrastructure, and the rise in the number of *chambres d'hôtes*. Accompanying improvements in infrastructure and a substantial diversification in the offer of tourist products, it now provides a dependable support mechanism for a service economy which it simultaneously helps to boost.

The evolution of consumer habits in terms of choice of rural accommodation, occupancy rates and, above all, the growing interest of agricultural communities in agro-tourism – financially more remunerative than agriculture, a sector profoundly destabilized by the change in political system in the 1990s – have led to a partial conversion of village

<sup>11</sup> Doucha (Tomáš), Divila (Emil) and Fischer (Michal), « Land Use and Ownership and the Czech Farm Development », in Floriańczyk (Zbigniew) and Czapiewski (Konrad) (eds), *Rural Development Capacity in Carpathian Europe*, Vol. 3, Rural Areas and Development, Warsaw, 2005, pp. 139-152.

Heritages and Transformations of Agrarian Structures

future of which is often uncertain.

2008, pp. 143-164.

in Tourism Management, No. 21, 2000

*Agricultural Economics*, No. 50-3, 2004, pp. 94-99.

*Agricultural Economics*, 47, 11, 2001, pp. 481-489.

*European Countryside,* No. 1, 1993, pp. 47-56.

*European Countryside*, No. 10, 2004, pp. 69-80.

Editions aux lieux d'être, Paris, 2007, 190 p.

Collection Itinéraires Géographiques, Paris, 2008:

**5. References** 

59.

and the Rural Tourism Dynamic in the Czech Republic 223

Lastly, other factors are linked to the social structures of rural territories, particularly those in the agricultural sphere. The 1989 transition and accession to the European Union had a profound, long-term effect on agricultural society which, in a new, liberal and competitive economic context was suddenly faced by the problematic of profitability. While in the most fertile areas – those best suited to the intensive model – agricultural production techniques could be modernized in a relatively short space of time thanks to EU funding, elsewhere, in the country's easternmost provinces, the issue of agrarian overpopulation and of the economic viability of farmsteads, which has still not been resolved, is partially occluded by the development of a kind of "default" tourism the

Busby (Graham), Rendle (Samantha), *The Transition from Tourism on Farms to Farm Tourism*,

Chevalier (Pascal), Diversification et mutation des bases économiques dans l'espace rural

Doucha (Tomáš) and Divila (Emil), "Farm Transformation and Restructuring in Czech

Doucha (Tomáš), "Czech Agriculture and the EU accession. A Need for a New Strategy", in

Hudečková (Helena) and Kučerová (Eva), "The Czech Republic in Rural Europe", in

Hudečková (Helena) and Lošták (Michal), "Privatization in Czech Agriculture", in *Eastern* 

Kučerová (Eva), "Rural Anticipation of the Welfare State in the Czech Republic", in *Eastern* 

Marty (Pascal) and Devaux (Sandrine), *Social Movements and Public Action: Lessons from* 

Bignebat (Céline) and Latruffe (Laure) "Vingt ans de réformes foncières en Europe central et orientale: bilan et perspectives", in *Economie rurale,* No, 325-326, 2011, pp.25-38 Maurel (Marie-Claude), Lacquement (Guillaume), Agriculture et ruralité en Europe centrale,

Majerová (Věra), "Four Milestones in the Societal and Economic Development of Czech Agriculture", in *Czech Sociological Review*, Vol. 8, No. 2, 2000, pp. 157-176. Nešpor (Zdenĕk), ""The Son Has Ploughed", But a Foreign Son. Five Case Studies on

*časopis = Czech Sociological Review*, Vol. 42 No. 6, 2006, pp. 1171-1194. Small (L.-A), Simon (Anthony), *Agritourisme et recompositions des campagnes : une innovation* 

Transformation Strategies in Czech Agriculture after 1989", in *Sociologický* 

*inégalitaire*, in Ruralités nords-suds, *inégalités, conflits, innovations*, L'Harmattan,

*Environmental Issues,* Prague, 2009, Editions du CEFRES, 193p.

tchèque, in Revue d'Etudes Comparatives Est/Ouest, De la décollectivisation au développement local en Europe centrale et orientale, Armand Colin, No. 4, vol. 39,

Agriculture. After ten years", in Ieda (Osamu) (ed.) *The New Structure of the Rural Economy of Post-communist Countries*, Slavic Research Center, Sapporo, 2001, p. 43-

economies to tourism and leisure. The rising number of *chambres d'hôtes* in country villages and the development of new forms of agro-tourism, linked in part to a significant increase in the numbers of foreign tourists, estimated at 30% of the total, and whose development factors are often characterized to a greater degree by a particular agricultural and social situation than by more traditional economic and environmental considerations, are today largely responsible for the growth of a kind of tourism marked by a distinct lack of professionalism. A large majority of actors in the agricultural sphere launch themselves into the tourist sector, managed and organized in an entirely different way from agriculture, with either little or no training.

The typology presented above makes it possible to analyze the links between agriculture and tourism. These links can be represented according to a clear east-west gradient; to regions whose dynamics are "independent" the one from the other (Silesia, the Central Moravian plateaux); and to areas in which the two sectors are closely associated with one other (Šumava, Sudètes). This typology, which highlights the existence of contrasting dynamics and relatively close links between the two sectors, is based on a series of different criteria. Some are environmental, concerned both with agricultural potential which, when it is relatively weak, can encourage the practice of palliative agro-tourism, and with the introduction of a whole series of improved amenities (landscapes, local cultures, etc.). The unequal distribution of these factors – or, in other words, nature, the quality and abundance of amenities that can be promoted by agriculture or tourism or both – logically generates a differentiation in the dynamic of various regions, not all of which have the same advantages. That said, the development of the tourist sector is equally correlated to the potential to highlight such factors by introducing adequate facilities and services. Generally speaking, what attracts tourists to a specific area is often a combination of the natural and the artificial, or, in other words, the activities potentially offered by a combination of different facilities. But all this should be addressed by means of a complex analysis involving a number of extra-recreational factors, both negative and positive (fashion trends in agro-tourism, for example).

Other factors are linked to the positioning of specific areas in relation to the rural-urban continuum and to how easily accessible those areas are. Based on "support" farms whose productive output is generally negligible compared to profits derived from tourism (notably in the west of the country), these benefit from the proximity of Bavarian and Austrian cities which provide a steady flow of tourists. Generally speaking, the further away from such cities, the less tourists there are due to factors such as distance and time, distance and price, and distance in terms of the (relatively poor) quality of transport infrastructure.

Other factors are linked to real estate. For example, even though the renovation of agricultural buildings and their conversion into *gîtes* is part of a drive to safeguard architectural heritage, its primary purpose is to increase their economic value. Here again, the unequal distribution of architectural heritage, sometimes conserved by the Communists in the least *"agro-economically"* profitable regions, and sometimes destroyed or transformed as part of the development of giant farms, also introduce an important differentiation in the Czech tourism dynamic, since it would not be true to say that all the country's regions possess an architectural heritage worth saving.

Lastly, other factors are linked to the social structures of rural territories, particularly those in the agricultural sphere. The 1989 transition and accession to the European Union had a profound, long-term effect on agricultural society which, in a new, liberal and competitive economic context was suddenly faced by the problematic of profitability. While in the most fertile areas – those best suited to the intensive model – agricultural production techniques could be modernized in a relatively short space of time thanks to EU funding, elsewhere, in the country's easternmost provinces, the issue of agrarian overpopulation and of the economic viability of farmsteads, which has still not been resolved, is partially occluded by the development of a kind of "default" tourism the future of which is often uncertain.

#### **5. References**

222 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

economies to tourism and leisure. The rising number of *chambres d'hôtes* in country villages and the development of new forms of agro-tourism, linked in part to a significant increase in the numbers of foreign tourists, estimated at 30% of the total, and whose development factors are often characterized to a greater degree by a particular agricultural and social situation than by more traditional economic and environmental considerations, are today largely responsible for the growth of a kind of tourism marked by a distinct lack of professionalism. A large majority of actors in the agricultural sphere launch themselves into the tourist sector, managed and organized in an entirely different way from agriculture,

The typology presented above makes it possible to analyze the links between agriculture and tourism. These links can be represented according to a clear east-west gradient; to regions whose dynamics are "independent" the one from the other (Silesia, the Central Moravian plateaux); and to areas in which the two sectors are closely associated with one other (Šumava, Sudètes). This typology, which highlights the existence of contrasting dynamics and relatively close links between the two sectors, is based on a series of different criteria. Some are environmental, concerned both with agricultural potential which, when it is relatively weak, can encourage the practice of palliative agro-tourism, and with the introduction of a whole series of improved amenities (landscapes, local cultures, etc.). The unequal distribution of these factors – or, in other words, nature, the quality and abundance of amenities that can be promoted by agriculture or tourism or both – logically generates a differentiation in the dynamic of various regions, not all of which have the same advantages. That said, the development of the tourist sector is equally correlated to the potential to highlight such factors by introducing adequate facilities and services. Generally speaking, what attracts tourists to a specific area is often a combination of the natural and the artificial, or, in other words, the activities potentially offered by a combination of different facilities. But all this should be addressed by means of a complex analysis involving a number of extra-recreational factors, both negative and positive (fashion trends

Other factors are linked to the positioning of specific areas in relation to the rural-urban continuum and to how easily accessible those areas are. Based on "support" farms whose productive output is generally negligible compared to profits derived from tourism (notably in the west of the country), these benefit from the proximity of Bavarian and Austrian cities which provide a steady flow of tourists. Generally speaking, the further away from such cities, the less tourists there are due to factors such as distance and time, distance and price, and distance in terms of the (relatively poor) quality of transport

Other factors are linked to real estate. For example, even though the renovation of agricultural buildings and their conversion into *gîtes* is part of a drive to safeguard architectural heritage, its primary purpose is to increase their economic value. Here again, the unequal distribution of architectural heritage, sometimes conserved by the Communists in the least *"agro-economically"* profitable regions, and sometimes destroyed or transformed as part of the development of giant farms, also introduce an important differentiation in the Czech tourism dynamic, since it would not be true to say that all the country's regions

with either little or no training.

in agro-tourism, for example).

possess an architectural heritage worth saving.

infrastructure.


**12** 

*Turkey* 

**Using Weather-Related Derivative Products for** 

Weather risk is a crucial element of overall risk management for a wide variety of businesses (Cao, Li & Wei, 2003) in energy, agriculture, food, tourism and hospitality sectors. Particularly, hospitality businesses such as hotels, restaurants and cafes are highly vulnerable when faced with unexpected weather conditions. For instance in a major metropolitan city like Istanbul, a five-degree-drop in temperature in summer, may cause many city-break tourists to stay

In fact, the global economy is exposed to significant amount of unmanaged weather risks and recent data show that the growth in this market will be substantial in the future. The Meteorological Office in the United Kingdom estimates that 70% of UK firms may be affected by the weather (Met Office, 2001). According to Weather Bill (2008), over 25% of the world economy is weather sensitive, with exposure approaching 50% in a number of countries. According to this study the world output could grow by as much as \$ 258 billion per year if the 68 sampled countries actively hedged their weather risk, which is estimated

Although the growth of the weather derivatives market is largely attributable to the deregulation of the energy sector, other businesses such as supermarket chains, leisure, tourism and entertainment industries, agriculture and even consumers are the potential

By its nature the weather is local and non- traded phenomenon and the market for weather derivatives may remain local and illiquid. The weather derivative products also provide a protection based on the measured values of the weather itself, not on monetary values. In other words, they cover volumetric risks which stem from the weather conditions. These conditions are related to variables including temperature, humidity, rainfall, snowfall, frost or wind, particularly in non-catastrophic nature. Weather derivatives are different from insurance products. While standard insurance instruments insure against high risk low probability events and they require the proof of loss together with the existence of insurable risk, weather derivatives allow payoffs which are free from these limitations and hence

indoors rather than to go out and spend their money in restaurants and cafes.

users of weather derivatives, to hedge against the vagaries of weather.

**1. Introduction** 

to be about \$ 5.8 trillion.

**Tourism and Hospitality Businesses** 

M. Fuat Beyazit1 and Erdogan Koc2

*Department of Mathematical Finance* 

*and Administrative Sciences* 

*1Istanbul Bilgi University,Faculty of Arts and Sciences* 

*2Balikesir University, Bandirma Faculty of Economics* 


### **Using Weather-Related Derivative Products for Tourism and Hospitality Businesses**

M. Fuat Beyazit1 and Erdogan Koc2

*1Istanbul Bilgi University,Faculty of Arts and Sciences Department of Mathematical Finance 2Balikesir University, Bandirma Faculty of Economics and Administrative Sciences Turkey* 

#### **1. Introduction**

224 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Těšitel (Jan), Kušová (Drahomíra) and Bartoš (Michael), "The Role of Tourism in the

*Rural Areas*, Polska Akademia Nauk, IgiPZ, Varsovie, Vol. 1, 2003, pp. 81-92. Zrinscak (Georgette), « Y a-t-il un modèle agraire tchèque ? », in *Enquêtes rurales*, No. 7, 2000,

Zrinscak (Georgette), *Mutations des campagnes tchèques – Une décollectivisation pragmatique,*

Belin, Collection Mappemonde, Paris, 1997, 256 p.

p. 75-96.

Development of Rural Marginal Areas (Region of the Šumava Mts in Czech Republic)", in Bański (Jerzy) and Owsiński (Jan) (eds.), *Alternatives for European* 

> Weather risk is a crucial element of overall risk management for a wide variety of businesses (Cao, Li & Wei, 2003) in energy, agriculture, food, tourism and hospitality sectors. Particularly, hospitality businesses such as hotels, restaurants and cafes are highly vulnerable when faced with unexpected weather conditions. For instance in a major metropolitan city like Istanbul, a five-degree-drop in temperature in summer, may cause many city-break tourists to stay indoors rather than to go out and spend their money in restaurants and cafes.

> In fact, the global economy is exposed to significant amount of unmanaged weather risks and recent data show that the growth in this market will be substantial in the future. The Meteorological Office in the United Kingdom estimates that 70% of UK firms may be affected by the weather (Met Office, 2001). According to Weather Bill (2008), over 25% of the world economy is weather sensitive, with exposure approaching 50% in a number of countries. According to this study the world output could grow by as much as \$ 258 billion per year if the 68 sampled countries actively hedged their weather risk, which is estimated to be about \$ 5.8 trillion.

> Although the growth of the weather derivatives market is largely attributable to the deregulation of the energy sector, other businesses such as supermarket chains, leisure, tourism and entertainment industries, agriculture and even consumers are the potential users of weather derivatives, to hedge against the vagaries of weather.

> By its nature the weather is local and non- traded phenomenon and the market for weather derivatives may remain local and illiquid. The weather derivative products also provide a protection based on the measured values of the weather itself, not on monetary values. In other words, they cover volumetric risks which stem from the weather conditions. These conditions are related to variables including temperature, humidity, rainfall, snowfall, frost or wind, particularly in non-catastrophic nature. Weather derivatives are different from insurance products. While standard insurance instruments insure against high risk low probability events and they require the proof of loss together with the existence of insurable risk, weather derivatives allow payoffs which are free from these limitations and hence

Using Weather-Related Derivative Products for Tourism and Hospitality Businesses 227

for put and call options where the *Θ* is the point value of the payoff and *K* is the predetermined price or strike price of the contract. *P* and *C* denote put and call options respectively. The value of a degree day index, *Θ*, i.e. tick size, is accepted to be \$ 20 in the

There are also contracts written on Cumulative Average Temperatures (CAT) over a

1

*QF X* () ) 

max *QP K X* ( ) ( ,0) 

For instance assume that the level of temperature is over the seasonal average in a particular winter season in a particular location. This means that the HDD is lower than the average. In this case, most probably, gas or energy companies will fail to sell enough energy products and hence will not be able to make adequate profits in that season. Then, it may be a better policy to sell HDD put at strike levels equal to average or slightly above average level of seasonal temperature levels. At the very extreme case individual consumers may buy calls on HDD to protect themselves against inflated gas bills due to the harsh winter conditions causing high HDD. Then, consumers may require calls on HDD at a strike level which is equal to average or slightly below average. In the section 5 an example of HDD option is

For the summer season the paradigm changes. When the temperature degree is close to 18 °C centigrade this will cause a lower CDD and the summer business requiring warmer days will face a decline. This may mean that hospitality businesses such as hotels and restaurants, and energy suppliers, etc. may demand puts on CDD at a strike level equal to average CDD or at a level slightly above average. Similarly, in an extreme case the individuals and energy consumers who are uncomfortable because of the hot weather may demand call on CDD at a strike level equal to average CDD or slightly below the average. In this case they may be in a position to pay higher energy bills due to warm weather, but

Then, the pricing relationship can be written as the present value of an expected value of the

*N N i i X T* 

predetermined period. This can be shown with the following payoff functions where

*<sup>T</sup>* (6)

(7)

*<sup>N</sup>* (8)

*<sup>N</sup>* (9)

*<sup>N</sup>* (10)

*<sup>N</sup>* (11)

or max ( ) ( ,0) *QC X K*

or *QF X K* () )

or max *QC X K* ( ) ( ,0)

CME (Chicago Mercantile Exchange).

for swaps and futures and

for put and call options respectively.

presented for a restaurant –cafe chain.

having to compensate from CDD contract.

specific payoff, plus a risk premium, i.e.:

allow a much greater flexibility both for the seller and the buyer. In addition to that, weather derivatives allow to hedge business risks relating to externalities e.g., good weather conditions somewhere else may influence the crop prices in some other places irrespective of the local weather conditions (Campbell & Diebold, 2005).

Weather derivatives instruments include swaps, futures and options which provide certain pay-offs to its users. This empirical study covers only options on weather temperatures which are bought and sold OTC (Over the Counter) and also traded in organized exchanges.

#### **2. Weather derivative instruments**

The options and futures written on temperatures are primarily based on temperature indices like Heating Degree Days (HDD), Cooling Degree Days (CDD), Cumulative Average Temperature (CAT) and also some Asian indices based on averages, so called Pacific-Rim index.(See F. E. Benth & J.S.Benth 2007 for the details and definitions). In this chapter, HDD and CDD option pricing is particularly examined.

Let *Ti* be the average of daily minimum and maximum temperatures in degrees Celcius on a particular day at a specific location. Then, Cooling Degree Days, (CDD) is defined when the temperature is above some reference level (for example 18*C* for many applications) as a number of the value of max(*Ti* – 18,0) and Heating Degree Days, (HDD) as a number of the value of max(18 - *Ti*,0) , when the temperature is below some reference level. Then, over a period say, one month or winter/summer season or for a period of 45 days etc., accumulated number of heating degree days and cooling degree days are defined as

$$X\_T = \sum\_{i=0}^{T} HDD\_{T-i} \tag{1}$$

$$\text{and/or}$$

0 *T T T i i X CDD* (2)

where *Ti* is defined by

$$T\_{i=} \frac{T\_{\max} + T\_{\min}}{2}$$

Assuming there is a predetermined number of days in terms of temperature, *K* , there might be derivative contracts on these accumulated numbers such as swaps, forwards and options with payoffs (*Q*)

$$Q(F) = \Theta(K - X\_T) \tag{3}$$

$$Q(F) = \Theta(X\_T - K) \tag{4}$$

for future and swap contracts and

$$Q(P) = \Theta\_{\text{max}} (K - X\_{T'}, 0) \tag{5}$$

or max ( ) ( ,0) *QC X K <sup>T</sup>* (6)

for put and call options where the *Θ* is the point value of the payoff and *K* is the predetermined price or strike price of the contract. *P* and *C* denote put and call options respectively. The value of a degree day index, *Θ*, i.e. tick size, is accepted to be \$ 20 in the CME (Chicago Mercantile Exchange).

There are also contracts written on Cumulative Average Temperatures (CAT) over a predetermined period. This can be shown with the following payoff functions where

$$X\_N = \sum\_{i=1}^N T\_i \tag{7}$$

$$Q(F) = \Theta(K - X\_N) \tag{8}$$

226 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

allow a much greater flexibility both for the seller and the buyer. In addition to that, weather derivatives allow to hedge business risks relating to externalities e.g., good weather conditions somewhere else may influence the crop prices in some other places irrespective

Weather derivatives instruments include swaps, futures and options which provide certain pay-offs to its users. This empirical study covers only options on weather temperatures which are bought and sold OTC (Over the Counter) and also traded in organized exchanges.

The options and futures written on temperatures are primarily based on temperature indices like Heating Degree Days (HDD), Cooling Degree Days (CDD), Cumulative Average Temperature (CAT) and also some Asian indices based on averages, so called Pacific-Rim index.(See F. E. Benth & J.S.Benth 2007 for the details and definitions). In this chapter, HDD

Let *Ti* be the average of daily minimum and maximum temperatures in degrees Celcius on a particular day at a specific location. Then, Cooling Degree Days, (CDD) is defined when the temperature is above some reference level (for example 18*C* for many applications) as a number of the value of max(*Ti* – 18,0) and Heating Degree Days, (HDD) as a number of the value of max(18 - *Ti*,0) , when the temperature is below some reference level. Then, over a period say, one month or winter/summer season or for a period of 45 days etc.,

accumulated number of heating degree days and cooling degree days are defined as

0

*T T T i i X CDD* 

0

2 *max min*

Assuming there is a predetermined number of days in terms of temperature, *K* , there might be derivative contracts on these accumulated numbers such as swaps, forwards and options

> () ( ) *QF K X*

max ( ) ( ,0) *QP K X* 

*i T T <sup>T</sup>*

or () ) *QF X K*

for future and swap contracts and

(1)

(2)

*<sup>T</sup>* (3)

*<sup>T</sup>* (4)

*<sup>T</sup>* (5)

*T T T i i X HDD* 

of the local weather conditions (Campbell & Diebold, 2005).

**2. Weather derivative instruments** 

and/or

where *Ti* is defined by

with payoffs (*Q*)

and CDD option pricing is particularly examined.

$$Q(\mathbf{F}) = \Theta(\mathbf{X}\_N - \mathbf{K}) \tag{9}$$

for swaps and futures and

$$Q(P) = \Theta\_{\text{max}}(K - X\_{N'}0) \tag{10}$$

$$\mathbf{Q(C)} = \Theta\_{\text{max}}(\mathbf{X}\_N - \mathbf{K}, \mathbf{0}) \tag{11}$$

for put and call options respectively.

For instance assume that the level of temperature is over the seasonal average in a particular winter season in a particular location. This means that the HDD is lower than the average. In this case, most probably, gas or energy companies will fail to sell enough energy products and hence will not be able to make adequate profits in that season. Then, it may be a better policy to sell HDD put at strike levels equal to average or slightly above average level of seasonal temperature levels. At the very extreme case individual consumers may buy calls on HDD to protect themselves against inflated gas bills due to the harsh winter conditions causing high HDD. Then, consumers may require calls on HDD at a strike level which is equal to average or slightly below average. In the section 5 an example of HDD option is presented for a restaurant –cafe chain.

For the summer season the paradigm changes. When the temperature degree is close to 18 °C centigrade this will cause a lower CDD and the summer business requiring warmer days will face a decline. This may mean that hospitality businesses such as hotels and restaurants, and energy suppliers, etc. may demand puts on CDD at a strike level equal to average CDD or at a level slightly above average. Similarly, in an extreme case the individuals and energy consumers who are uncomfortable because of the hot weather may demand call on CDD at a strike level equal to average CDD or slightly below the average. In this case they may be in a position to pay higher energy bills due to warm weather, but having to compensate from CDD contract.

Then, the pricing relationship can be written as the present value of an expected value of the specific payoff, plus a risk premium, i.e.:

$$\mathbf{27}$$

 . *rt S e EQ* 1 (12) Using Weather-Related Derivative Products for Tourism and Hospitality Businesses 229

intervals repeatedly, if /when the contract period is intentionally kept short. However, this

Actually this methodology is used basically by insurance companies and the probabilistic assessment and statistical analysis is required for the events to be insured. Based on the statistical analysis on historical data a probability is assigned to the insured event, and the insurance premium is calculated accordingly. However, this method is less applicable for weather derivatives for the underlying variables such as temperature, rainfall, snowfall, wind etc. which tend to follow recurrent and predictable patterns (Cao, Li & Wei, 2003). Yet, there is still room for the use of the actuarial method. For instance in the case of weather derivatives, particularly for certain rare events the actuarial method could be used. In a situation where the contract is based on a rare case such as an extreme heat or chill, or

The historical burn analysis method evaluates the contracts based on historical data and the average of realized payoffs in the past. The option premium can be calculated for any period / month / season as long as the one has the relevant data. The simple way of option

c. The index values ( HDD or CDDs of the period) are calculated for the relevant period of

d. Considering the prescribed value of *K* , payoffs are calculated for each year, e.g., for 20 years, the values of HDD call option payoffs as max( ,0) *HDD K <sup>i</sup> i* 1,2.....20 are

e. Then the HDD call option premium is simply computed as the average value of the

f. In general, it might be thought that the more the data go back in the history i.e., the longer the time series used, the better and more reliable is the amount of the option premium. However, as the derivative security's payoff depends on the future behavior of the weather rather than the historical data, it may not be a good idea to use burn analysis in pricing of weather derivatives. Secondly, both methods do not take the risk element into account. The market price of risk associated with the temperature as an underlying variable can be incorporated in dynamic models with future prospects.

As an underlying variable, temperature is forecast by deterministic and stochastic processes in dynamic models setting. Due to the mean reverting feature of weather temperatures, almost all models use Ornstein – Uchlenbeck (OU) process, in addition to stochastic

The deterministic part of the model involves trend and seasonal terms and stochastic part involves stochastic term (Brownian motion) in most applications. The reason is that the

line of reasoning is mostly out of scope for weather derivatives literature.

snowfall, then the method may become applicable.

premium is calculated by following the below sequential steps:

b. The historical data is gathered for the selected period

**3.1 Actuarial method** 

**3.2 Historical burn analysis** 

a. The period is selected

each year

calculated

**3.3 Dynamic models** 

payoffs calculated in (d)

Brownian (and fractional) motion.

where *S, Q*(.), *λ* denotes to price of the option , put or call function and the risk premium, respectively. Starting from the "0" lower bound for the integral a general formula can be stated as

$$S = e^{-rt} \left[ \bigcap\_{0}^{\alpha} Q(\mathbf{x}) p(\mathbf{x}) d\mathbf{x} + \lambda \right] \tag{13}$$

where *p(x)*is the density of the probability distribution function. The derivative security payoffs are presented in continuous setting in Benth and Benth (2007), and J.London( 2007).

A standard weather option can be formulated by specifying the following parameters;


In general, conditions (b) and (c) are determined together according to a risk position of which a business firm is exposed to. The condition (g) means that whether the payoff of the option is limited or capped by a certain amount. These types of contracts are called capped options. The type of weather derivative securities is not limited to the ones mentioned in (b). In addition to these, collars, option combinations like straddles and strangles and some binary options are also traded in the market. The detailed closed-form pricing formulae can be found in Jewson (2003) for various distribution functions of contract payoffs.

The Weather Risk Management Association(WRMA) which represents the weather market reports that the total value of derivative contracts rose to as high as \$ 45.4 billion in 2006, the year after Hurricane Katrina, and amounted \$11.82 billion in 2010. The readers are recommended to refer to www.wrma.org to keep up with various changes taking place in the market, discussions and composition of players in the market.

#### **3. Weather derivative modelling**

There are basically three methods used to estimate the weather behaviour and the parameters of pricing model.


There is also a deterministic method of forecasting weather which can be used to project weather changes up to 10 days in advance. This information can be used within the option or future period and there may be some possibilities to create arbitrage trading over some

<sup>1</sup> Discount factor may only be used for the expectation term as another version of the formula.

intervals repeatedly, if /when the contract period is intentionally kept short. However, this line of reasoning is mostly out of scope for weather derivatives literature.

#### **3.1 Actuarial method**

228 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

where *S, Q*(.), *λ* denotes to price of the option , put or call function and the risk premium, respectively. Starting from the "0" lower bound for the integral a general formula can be

where *p(x)*is the density of the probability distribution function. The derivative security payoffs are presented in continuous setting in Benth and Benth (2007), and J.London( 2007).

In general, conditions (b) and (c) are determined together according to a risk position of which a business firm is exposed to. The condition (g) means that whether the payoff of the option is limited or capped by a certain amount. These types of contracts are called capped options. The type of weather derivative securities is not limited to the ones mentioned in (b). In addition to these, collars, option combinations like straddles and strangles and some binary options are also traded in the market. The detailed closed-form pricing formulae can

The Weather Risk Management Association(WRMA) which represents the weather market reports that the total value of derivative contracts rose to as high as \$ 45.4 billion in 2006, the year after Hurricane Katrina, and amounted \$11.82 billion in 2010. The readers are recommended to refer to www.wrma.org to keep up with various changes taking place in

There are basically three methods used to estimate the weather behaviour and the

There is also a deterministic method of forecasting weather which can be used to project weather changes up to 10 days in advance. This information can be used within the option or future period and there may be some possibilities to create arbitrage trading over some

1 Discount factor may only be used for the expectation term as another version of the formula.

1 (12)

(13)

. *rt S e EQ*

0 ()() *rt S e Q x p x dx*

A standard weather option can be formulated by specifying the following parameters;

a. An official weather station from which the temperature data are obtained

be found in Jewson (2003) for various distribution functions of contract payoffs.

the market, discussions and composition of players in the market.

b. The contract type (e.g., future, swap, call, put) c. The underlying index (e.g., HDD, CDD, CAT)

d. The contract period e. The tick size,

f. The strike level, *K*

**3. Weather derivative modelling** 

parameters of pricing model.

i. Actuarial Method ii. Historical Burn Analysis ii. Dynamic Models

g. The maximum payoff (if any)

stated as

Actually this methodology is used basically by insurance companies and the probabilistic assessment and statistical analysis is required for the events to be insured. Based on the statistical analysis on historical data a probability is assigned to the insured event, and the insurance premium is calculated accordingly. However, this method is less applicable for weather derivatives for the underlying variables such as temperature, rainfall, snowfall, wind etc. which tend to follow recurrent and predictable patterns (Cao, Li & Wei, 2003). Yet, there is still room for the use of the actuarial method. For instance in the case of weather derivatives, particularly for certain rare events the actuarial method could be used. In a situation where the contract is based on a rare case such as an extreme heat or chill, or snowfall, then the method may become applicable.

#### **3.2 Historical burn analysis**

The historical burn analysis method evaluates the contracts based on historical data and the average of realized payoffs in the past. The option premium can be calculated for any period / month / season as long as the one has the relevant data. The simple way of option premium is calculated by following the below sequential steps:


#### **3.3 Dynamic models**

As an underlying variable, temperature is forecast by deterministic and stochastic processes in dynamic models setting. Due to the mean reverting feature of weather temperatures, almost all models use Ornstein – Uchlenbeck (OU) process, in addition to stochastic Brownian (and fractional) motion.

The deterministic part of the model involves trend and seasonal terms and stochastic part involves stochastic term (Brownian motion) in most applications. The reason is that the

Using Weather-Related Derivative Products for Tourism and Hospitality Businesses 231

Another alternative is to use simpler autoregressive (AR) models (See Davis(2000) for the details). These models do not require a complicated variance process and they are faster compared with GARCH models. Campbell & Diebold (2005), and Benth & Benth (2007) apply GARCH method in their papers, Caballero, Jewson & Brix (2002) use Autoregressive Fractional Integrated Moving Average (ARFIMA), Zapranis & Alexandridis (2008) use neural networks and wavelets and Brody, Syroka & Zervos (2002) apply Fractional Brownian Motion (FBM) in estimation of weather temperature for derivatives pricing purpose. For the models based on AR and GARCH Monte- Carlo simulations are applied for

However, Alaton, Djehiche & Stillberger (2002), Benth & Benth (2007), Jewson & Zervos (2003), and Jewson (2003) provide closed form solutions for the expectation in (18) with specific boundary conditions. Jewson (2004) uses kernel densities (normally distributed) as

As an example, for calls and puts based on the specific underlying such as HDD or CDD, the formulae produced in Alaton, Djehiche & Stillberger (2002) are as follows respectively;

( ) <sup>2</sup> () ( )( ) <sup>2</sup>

<sup>2</sup> <sup>2</sup> ( ) ( ) <sup>2</sup> ( ) ( )( ( ) ( )) ( ) <sup>2</sup>

in (19) and (20) are primarily for contracts during winter months which typically represents the period November-March. If the mean temperatures are too close or higher than the reference level, i.e. 18°C, which might be the case for summer months, Monte-Carlo

This section presents an empirical work on CDD and HDD option pricing and aims to compute CDD and HDD prices in large metropolitan city, Istanbul. The data provided by the Turkish Meteorological Office for the periods of 1975 – 2006 covering 11680 (11680 for maximum and 11680 for minimum daily temperature degrees °C) observations over a thirty-

The particular reason for choosing Istanbul as the context of the study is due to its significance in terms of being the financial, cultural and tourism capital of Turkey. It is believed that tourism and hospitality establishments (hotels, restaurants, beaches, cafes, etc.) may significantly benefit from buying weather options for hedging themselves

 

*<sup>n</sup> <sup>n</sup> rt t n n n n*

 

*n*

*<sup>n</sup>* represent the average and variance of the underlying index for the

 

*<sup>n</sup> rt t <sup>n</sup> QC e n n <sup>K</sup> <sup>e</sup>*

*QP e K e e*

 

simulations are recommended to be used, rather than these above formulae.

2

*n*

*n n*

*<sup>n</sup>* is the parameter of the standard normal

(19)

(20)

  and is the cumulative normal distribution. These formulae

pricing derivatives as a complementary tool.

an alternative.

where *<sup>n</sup>* and

distribution

against the weather risk.

relevant period which is shown by *n* ,

*n nn* ( )/ *K* 

**4. Model, data and the research** 

two-year period have been used for analysis.

temperature shows strong seasonal characteristic and recurring patterns. In addition to the mean equation of the model many dynamic models contain the conditional variance term in order to take the changing volatility of temperature into account. These models are called GARCH type models.

Another feature of the weather is that the (average daily) temperature exhibits high autocorrelation i.e., short- term behaviour of the temperature will differ from the long- term behaviour.

Considering all these facts, the following mean and conditional variance equations (Campbell & Diebold, 2005) can be employed respectively;

$$T\_t^m = c\_0 + c\_1 t + \sum\_{p=1}^p \zeta\_p \cos(2\pi p d(t) / 365) + \sum\_{p=1}^p \gamma\_p \sin(2\pi p d(t) / 365) + \sum\_{i=1}^L \rho\_{t-i} T\_{t-i} + \sigma\_t \varepsilon\_t \tag{14}$$

$$\sigma\_t^2 = d\_0 + \sum\_{q=1}^{Q} \delta\_p \cos(2\pi qd(t) / 365) + \sum\_{q=1}^{Q} \lambda\_q \sin(2\pi qd(t) / 365) + \sum\_{s=1}^{N} \beta\_s \sigma\_{t-s}^2 + \sum\_{r=1}^{M} \alpha\_r (\varepsilon\_{t-r} \sigma\_{t-r})^2 \tag{15}$$

,, () *T tdt <sup>t</sup>* , , *p q* represent the daily average temperature, trend term (total number of observations) and number of days in a year (365, showing periodicity), number of lags for mean and variance equations respectively. The other coefficients are the parameters determined by the model including autocorrelation coefficients *t i* .

The estimation process can be decomposed into its sub-components as follows;

Daily Average Temperature = Trend ( 0 1 *c ct* ) + Seasonal ( 1 cos(2 ( ) / 365) *P p p pd t* 1 sin(2 ( ) /365) *P p p pd t* ) +Autocorrelation part ( 1 *L titi i T* ) +Noise term ( *t t* )

After having the estimates of mean temperature for each day in a year, OU mean reversion process can be established by the following stochastic equation;

$$dT\_t = a(T\_t^{\text{wt}} - T\_t)dt + \sigma\_t d\mathcal{W}\_t \tag{16}$$

where, *a* is the speed of mean reversion and *Wt* is the Brownian motion. The solution of the equation is

$$T\_t = (T\_s - T\_s^m)e^{-a(t-s)} + T\_t^m + \int\_s^t e^{-a(t-\tau)} \sigma\_\tau dW\_\tau \tag{17}$$

(See Alaton, Djehiche & Stillberger, 2002 for the details and parameter estimation)

Then the option payoff and the premium can be calculated by discounting the expected payoff of the option based on the underlying index (HDD, CDD, etc.) accordingly as

$$X = e^{-r(T-t)}E[\mathcal{g}(T\_{t'}T\_{t+1}...T\_T)]\tag{18}$$

temperature shows strong seasonal characteristic and recurring patterns. In addition to the mean equation of the model many dynamic models contain the conditional variance term in order to take the changing volatility of temperature into account. These models are called

Another feature of the weather is that the (average daily) temperature exhibits high autocorrelation i.e., short- term behaviour of the temperature will differ from the long- term

Considering all these facts, the following mean and conditional variance equations

*P PL <sup>m</sup>*

1 11 cos(2 ( ) / 365) sin(2 ( ) / 365)

 

(14)

cos(2 ( ) / 365) sin(2 ( ) / 365) ( )

1

*t*

 

(17)

(18)

*s*

*i T*

After having the estimates of mean temperature for each day in a year, OU mean reversion

where, *a* is the speed of mean reversion and *Wt* is the Brownian motion. The solution of the

( ) ( ) ( )

*T T T e T e dW*

Then the option payoff and the premium can be calculated by discounting the expected

<sup>1</sup> [ ( , ...... )] *rT t X e EgT T T tt T*

*t ss t*

(See Alaton, Djehiche & Stillberger, 2002 for the details and parameter estimation)

payoff of the option based on the underlying index (HDD, CDD, etc.) accordingly as

( )

*m m at s a t*

( ) *<sup>m</sup> t t t tt dT a T T dt dW*

*titi*

*L*

*pd t pd t T*

 

> 

*t i* .

) +Noise term (

1

*P p p* 

 

cos(2 ( ) / 365)

(16)

 *pd t*

 *t t* )

*t p p titi tt p pi*

2 2 2

,, () *T tdt <sup>t</sup>* , , *p q* represent the daily average temperature, trend term (total number of observations) and number of days in a year (365, showing periodicity), number of lags for mean and variance equations respectively. The other coefficients are the parameters

 *d t*

(15)

1 1 1 1

*Q Q N M t p q s ts r tr tr q q s r*

The estimation process can be decomposed into its sub-components as follows;

(Campbell & Diebold, 2005) can be employed respectively;

*d qd t q*

determined by the model including autocorrelation coefficients

Daily Average Temperature = Trend ( 0 1 *c ct* ) + Seasonal (

process can be established by the following stochastic equation;

GARCH type models.

0 1

 

sin(2 ( ) /365)

) +Autocorrelation part (

 *pd t*

*T c ct*

0

behaviour.

1

equation is

*P p p* 

Another alternative is to use simpler autoregressive (AR) models (See Davis(2000) for the details). These models do not require a complicated variance process and they are faster compared with GARCH models. Campbell & Diebold (2005), and Benth & Benth (2007) apply GARCH method in their papers, Caballero, Jewson & Brix (2002) use Autoregressive Fractional Integrated Moving Average (ARFIMA), Zapranis & Alexandridis (2008) use neural networks and wavelets and Brody, Syroka & Zervos (2002) apply Fractional Brownian Motion (FBM) in estimation of weather temperature for derivatives pricing purpose. For the models based on AR and GARCH Monte- Carlo simulations are applied for pricing derivatives as a complementary tool.

However, Alaton, Djehiche & Stillberger (2002), Benth & Benth (2007), Jewson & Zervos (2003), and Jewson (2003) provide closed form solutions for the expectation in (18) with specific boundary conditions. Jewson (2004) uses kernel densities (normally distributed) as an alternative.

As an example, for calls and puts based on the specific underlying such as HDD or CDD, the formulae produced in Alaton, Djehiche & Stillberger (2002) are as follows respectively;

$$Q(\mathbf{C}) = e^{-r(t\_n - t)} \left( (\mu\_n - K)\Phi(-\alpha\_n) + \frac{\sigma\_n}{\sqrt{2\pi}} e^{-\frac{\alpha\_n^2}{2}} \right) \tag{19}$$

$$Q(P) = e^{-r(t\_n - t)} \left( (K - \mu\_n)(\Phi(\alpha\_n) - \Phi(-\frac{\mu\_n}{\sigma\_n})) + \frac{\sigma\_n}{\sqrt{2\pi}} (e^{-\frac{\alpha\_n^2}{2}} - e^{-(\frac{\mu\_n}{\sigma\_n})^2}) \right) \tag{20}$$

where *<sup>n</sup>* and *<sup>n</sup>* represent the average and variance of the underlying index for the relevant period which is shown by *n* , *<sup>n</sup>* is the parameter of the standard normal distribution *n nn* ( )/ *K* and is the cumulative normal distribution. These formulae in (19) and (20) are primarily for contracts during winter months which typically represents the period November-March. If the mean temperatures are too close or higher than the reference level, i.e. 18°C, which might be the case for summer months, Monte-Carlo simulations are recommended to be used, rather than these above formulae.

#### **4. Model, data and the research**

This section presents an empirical work on CDD and HDD option pricing and aims to compute CDD and HDD prices in large metropolitan city, Istanbul. The data provided by the Turkish Meteorological Office for the periods of 1975 – 2006 covering 11680 (11680 for maximum and 11680 for minimum daily temperature degrees °C) observations over a thirtytwo-year period have been used for analysis.

The particular reason for choosing Istanbul as the context of the study is due to its significance in terms of being the financial, cultural and tourism capital of Turkey. It is believed that tourism and hospitality establishments (hotels, restaurants, beaches, cafes, etc.) may significantly benefit from buying weather options for hedging themselves against the weather risk.

Using Weather-Related Derivative Products for Tourism and Hospitality Businesses 233

greater than 0.019 which can be regarded as meaningless), so the residuals can be considered as *white noise*. However, E2 and E3 do not meet the positive variance limitations and for the sake of positive unconditional variance the first equation is adopted

Then, assuming the distribution of the differences is normal with mean zero; unconditional

Then, the temperature differences *Di* can be simulated over a certain period by using the

Instead of annual data, had the computations been based on monthly data and monthly equations, which are more realistic when particular periods are considered, a different set of equations would have been computed. Here are the examples for the months of January and

1 0.7943

 

July, which are believed to represent the relevant winter and summer periods.

<sup>1</sup>*a* 0.760904 0.757173 *b* 2.196550 1.365194 **t-Statistic** 36.88670 36.53150 **R-squared** 0.578836 0.574026 **Akaike info criterion** 4.412662 3.461479 **Schwarz criterion** 4.417605 3.466422 **Durbin-Watson stat** 1.627530 1.883939 Table 2. A Summary of Monthly First Order AR Equations for (14) - (All coefficients are

Adding the long term averages to the simulated values according to the following equation

by simulation for the month of January. The average which is very close to historical

Accordingly, the unconditional standard deviation of residuals have been found as 3.385,

As stated above, due to the trade-off between the parameters, fewer numbers of parameters in the equations are preferred. This helps to avoid the possibility of negative unconditional

2.09, and 2.93 for three different periods (January, July and overall) respectively.

2 1.8391 2.9299

.

**January July** 

193.92 and standard deviation, 69.9855 are computed

and standard deviation is the same (assuming

*T*

, (only 8.th order lag is

As for correlations, almost all the coefficients are in between <sup>1</sup> <sup>2</sup>

equation (14) and the unconditional standard deviation 2.93.

31

1 *i i T* 

31

1 18 364.0795 *<sup>i</sup>*

*i n T* 

temperature degree justifies the simulation work.

standard deviation of the residuals is calculated as

meaningful at % 99 confidence level)

no daily value higher than 18 degrees).

*TTD ii i* 1,.....31 *i* , mean

Then, the mean HDD is

parsimoniously.

In this section, pricing issues are discussed, and various models are applied for computing CDD and HDD option prices. The section is divided into four sub sections. In the first sub section pricing is carried out through AR model accompanied by a simulation study, together with option pricing using ADS model as a benchmark.

Second sub-section uses time series for modeling the temperature with GARCH/ARCH features. In the last sub-section, considering the distributional nature of the temperature data, Edgeworth adjusted probability densities are used to compute the option prices.

#### **4.1 AR model and simulation**

Davis (2000) assumes lognormal distribution for accumulated HDDs, and values the payoff function under the physical (objective) probability measure and in an equilibrium setting with reference to Lucas (1978). In this case the prices are Black-Scholes prices with modified drift and yield parameters and with the absence of trading involving both the risk free asset and underlying asset (weather). Davis' (2000) model is based on the relationship between the gas prices and the temperature degrees for HDD modeling.

The drift parameter is retrieved from the model arbitrarily by using the mean of HDD and assuming the option is at the money (Davis, 2000). Alaton et.al (2002) find the option prices as expected values after having computed the first and second moments of the data by using Ornstein – Uhlenbeck process and standard normal density function. Similar to implied volatility measure, Alaton et al. (2002) compute the market risk premium by replacing the market prices with the model prices.

Let's define *DTT iid* as the difference between the daily average temperature and long term (32 years) daily average temperature for *i* 1,.......11680 and 1,....365 *d* . When 365 *i kx* , , *k I* or 1,....32 *k* , *d* returns to 1.

Then, an autoregressive model can be formed as follows;



Table 1. A Summary of AR Model Equations for (14) with 1, 2, and 3 lags. All coefficients are meaningful at % 99 confidence level.

There is no material difference between the equations; however the last equation (third order) has lower standard error (1.789 vs. 1.7924 and 1.8391) and DW statistics (1.9998 vs. 1.9717 and 1.6436).

In this section, pricing issues are discussed, and various models are applied for computing CDD and HDD option prices. The section is divided into four sub sections. In the first sub section pricing is carried out through AR model accompanied by a simulation study,

Second sub-section uses time series for modeling the temperature with GARCH/ARCH features. In the last sub-section, considering the distributional nature of the temperature data, Edgeworth adjusted probability densities are used to compute the option prices.

Davis (2000) assumes lognormal distribution for accumulated HDDs, and values the payoff function under the physical (objective) probability measure and in an equilibrium setting with reference to Lucas (1978). In this case the prices are Black-Scholes prices with modified drift and yield parameters and with the absence of trading involving both the risk free asset and underlying asset (weather). Davis' (2000) model is based on the relationship between

The drift parameter is retrieved from the model arbitrarily by using the mean of HDD and assuming the option is at the money (Davis, 2000). Alaton et.al (2002) find the option prices as expected values after having computed the first and second moments of the data by using Ornstein – Uhlenbeck process and standard normal density function. Similar to implied volatility measure, Alaton et al. (2002) compute the market risk premium by replacing the

Let's define *DTT iid* as the difference between the daily average temperature and long term (32 years) daily average temperature for *i* 1,.......11680 and 1,....365 *d* .

1

<sup>1</sup>*a* 0.794299 0.972473 0.986606 <sup>2</sup> *a* -0.224342 -0.285633 <sup>3</sup> *a* 0.063032 *b* 1.839110 1.792365 1.788953 **R-squared** 0.630888 0.649464 0.650848 **Akaike info criterion** 4.056526 4.005120 4.001395 **Schwarz criterion** 4.057157 4.006382 4.003287 **Durbin-Watson stat** 1.643628 1.971726 1.999835

*k D aD b*

*i k ik i*

 **E1 E2 E3** 

Table 1. A Summary of AR Model Equations for (14) with 1, 2, and 3 lags. All coefficients are

There is no material difference between the equations; however the last equation (third order) has lower standard error (1.789 vs. 1.7924 and 1.8391) and DW statistics (1.9998 vs.

(21)

*n*

together with option pricing using ADS model as a benchmark.

the gas prices and the temperature degrees for HDD modeling.

**4.1 AR model and simulation** 

market prices with the model prices.

meaningful at % 99 confidence level.

1.9717 and 1.6436).

When 365 *i kx* , , *k I* or 1,....32 *k* , *d* returns to 1.

Then, an autoregressive model can be formed as follows;

As for correlations, almost all the coefficients are in between <sup>1</sup> <sup>2</sup> *T* , (only 8.th order lag is

greater than 0.019 which can be regarded as meaningless), so the residuals can be considered as *white noise*. However, E2 and E3 do not meet the positive variance limitations and for the sake of positive unconditional variance the first equation is adopted parsimoniously.

Then, assuming the distribution of the differences is normal with mean zero; unconditional standard deviation of the residuals is calculated as

$$
\sigma = \frac{1.8391}{\sqrt{1 - 0.7943^2}} = 2.9299\dots
$$

Then, the temperature differences *Di* can be simulated over a certain period by using the equation (14) and the unconditional standard deviation 2.93.

Instead of annual data, had the computations been based on monthly data and monthly equations, which are more realistic when particular periods are considered, a different set of equations would have been computed. Here are the examples for the months of January and July, which are believed to represent the relevant winter and summer periods.


Table 2. A Summary of Monthly First Order AR Equations for (14) - (All coefficients are meaningful at % 99 confidence level)

Adding the long term averages to the simulated values according to the following equation

*TTD ii i* 1,.....31 *i* , mean 31 1 *i i T* 193.92 and standard deviation, 69.9855 are computed

by simulation for the month of January. The average which is very close to historical temperature degree justifies the simulation work.

Then, the mean HDD is 31 1 18 364.0795 *<sup>i</sup> i n T* and standard deviation is the same (assuming no daily value higher than 18 degrees).

Accordingly, the unconditional standard deviation of residuals have been found as 3.385, 2.09, and 2.93 for three different periods (January, July and overall) respectively.

As stated above, due to the trade-off between the parameters, fewer numbers of parameters in the equations are preferred. This helps to avoid the possibility of negative unconditional variance. As it may be easily noticed, the standard deviation of residuals in January is almost 61% more than that of July. This may be interpreted as one of the evidences of global warming effect which may have occurred over the period of 32 years in Istanbul.

The normality tests prove that the distribution of residuals of annual data and January, though not normal, can be considered as close to normal as the tails have more density weights compared to normal distribution. This occurrence particularly applies to January and July residuals (See Figure 1a, 1b and 1c). Because of this a special care needs to be paid to pricing particularly when it is for a summer period.

Fig. 1. (a) Histogram of residuals computed by using July data.


Using Weather-Related Derivative Products for Tourism and Hospitality Businesses 235

Series: Residuals Sample 2 11680 Observations 11679

Mean -7.25e-05 Median 0.034291 Maximum 7.133915 Minimum -8.863859 Std. Dev. 1.839110 Skewness -0.150553 Kurtosis 3.834490

Jarque-Bera 382.9927 Probability 0.000000

> **Historical Long Term Average**

> **Historical Long Term Average**

**Number of Simulations: 20,000** 

**No of Simulations: 20,000** 

**unconditional SD of 2.93 unconditional SD of 3.3852** 

**unconditional SD of 2.93 unconditional SD of 2.09** 


The parameters used in simulation study are presented in Table 3 and Table 4 for two

**Historical Long Term Average** 

**Historical Long Term Average** 

**Mean total degrees** 742.35 742.84 742.55 742.84 **SD of total degrees** 69.88 36.90 49.60 36.90 **CDD Mean** 185.16 184.84 184.57 184.84 **Log CDD Mean** 5.1290 2.26 5.1797 2.26 **SD of Log CDD** 0.4903 0.086 0.3026 0.086 Table 4. Statistics of CDD for the Month of July by Using Unconditional SD of 2.93 and 2.09

**Mean total degrees** 193.92 193.53 194.02 193.53 **SD of total degrees** 69.99 40.37 80.44 40.37 **HDD Mean** 364.08 364.47 363.98 364.47 **Log HDD Mean** 5.88 5.89 5.87 5.89 **SD of Log HDD** 0.2023 0.11 0.2417 0.11 Table 3. Statistics of HDD for the Month of January by Using Unconditional SD of 2.93 and

Fig. 1. (c) Histogram of residuals computed by using overall data.

**Number of Simulations: 20,000** 

**No of Simulations: 20,000** 

0

different periods.

3.385.

**Parameter** 

**Parameter** 

400

800

1200

1600

Fig. 1. (b) Histogram of residuals computed by using only January data.

variance. As it may be easily noticed, the standard deviation of residuals in January is almost 61% more than that of July. This may be interpreted as one of the evidences of global

The normality tests prove that the distribution of residuals of annual data and January, though not normal, can be considered as close to normal as the tails have more density weights compared to normal distribution. This occurrence particularly applies to January and July residuals (See Figure 1a, 1b and 1c). Because of this a special care needs to be paid

> Series: Residuals Sample 2 992 Observations 991

Mean -0.000620 Median -0.004877 Maximum 7.085449 Minimum -8.436015 Std. Dev. 2.196550 Skewness -0.141380 Kurtosis 3.790444

Jarque-Bera 29.10055 Probability 0.000000

Mean 0.005902 Median 0.128606 Maximum 4.752139 Minimum -6.697494 Std. Dev. 1.365182 Skewness -0.543268 Kurtosis 4.959596

Jarque-Bera 207.3079 Probability 0.000000

Series: Residuals Sample 2 992 Observations 991

warming effect which may have occurred over the period of 32 years in Istanbul.

to pricing particularly when it is for a summer period.


Fig. 1. (a) Histogram of residuals computed by using July data.


Fig. 1. (b) Histogram of residuals computed by using only January data.

0

0

40

80

120

160

200

20

40

60

80

100

120

Fig. 1. (c) Histogram of residuals computed by using overall data.

The parameters used in simulation study are presented in Table 3 and Table 4 for two different periods.


Table 3. Statistics of HDD for the Month of January by Using Unconditional SD of 2.93 and 3.385.


Table 4. Statistics of CDD for the Month of July by Using Unconditional SD of 2.93 and 2.09

Using Weather-Related Derivative Products for Tourism and Hospitality Businesses 237

All these numbers are re-calculated by ADS formulae (ADS, 2002 p.15, equations 4.17 and 4.19) as presented in Table 6 below. Similarly, the difference is that the standard deviation and mean values of HDD and CDD are used in ADS formulae. The call and put prices of CDD and HDD options are almost the same with the ones computed in the simulation.

> **Call Prices**  *SD* 80.44

224.1 139.41 140.05 0.59 1.33 294.09 75.19 77.79 5.78 8.48 364.08 27.69 31.78 27.69 31.87 434.07 5.78 8.44 75.20 77.95 504.06 0.59 1.32 139.41 140.24

> **Call Prices**  *SD* 69.88

45.4 138.06 139.19 0.32 0.03 115.28 70.53 75.08 5.23 1.80 185.16 19.33 27.65 26.82 19.90 255.04 1.72 5.77 73.97 71.58 324.92 0.03 0.59 137.81 139.19

Table 6. CDD and HDD Call and Put Options with Standard Deviations from the Daily Temperature Model and Historical Parameters for the Month of January (HDD) and July

The reason why two separate standard deviations have been used is due to the different residual unconditional variances (standard deviations), one being for the whole period, and the other one being for that particular month as referred in Table 4 and 5. The different residual unconditional variances used in the simulation produce obviously two different

When AR model with GARCH/ARCH feature is used, the following equations are used for

*P PL <sup>m</sup>*

1 11 cos(2 ( ) / 365) sin(2 ( ) / 365)

 

*pd t pd t T*

*t p p titi tt p pi*

 

2 2 2

 *d t*

cos(2 ( ) / 365) sin(2 ( ) / 365) ( )

1 1 1 1

 

*Q Q N M t p q s ts r tr tr q q s r*

**Put Prices**  *SD* 70

**Put Prices**  *SD* 69.88

> 

> >

 

**Put Prices**  *SD* 80.44

**Put Prices**  *SD* 49.60

**Call Prices**  *SD* 70

**Call Prices**  *SD* 49.60

(CDD). Interest rate is *r pa* 10% . . (continuously compounded).

computing the mean temperature and conditional variances.

*d qd t q*

**Option Strike** 

**HDD** 

**CDD** 

**Prices** 

standard deviations for HDD and CDD.

**4.2 GARCH modeling** 

The mean equation is

0 1

 

as mentioned in 3.3, as (14) and (15).

and the conditional variance equation is

*T c ct*

0

As it is observed in the tables, the only distinguishing characteristic of the data is unconditional standard deviation incorporated into simulation work which is different from historical standard deviation. This figure *does* matter as well, between the summer and winter periods. The summer period shows less variability and has a lower volatility which may have implications for pricing. However, it is obvious that winter temperatures appear to be more volatile.

In conjunction with the above parameters, and considering the 1 ,2 of average CDD and HDD as strike prices, the call and put prices are computed in the following table according to the following expectations:

$$Put = \exp(-rT)E^P\left[\theta(K - X\_T)\right]$$

exp( ) ( ) *<sup>P</sup> Call rT E X K <sup>T</sup>* , where *XT* is CDD or HDD, 1 and with *<sup>P</sup> E* as objective probability measure.

As the simulation work shows for CDD options, the higher the strike prices the higher is the difference between the call prices (maximum difference is at strike in the middle), computed by the two separate residual standard deviations, in terms of absolute and percentage terms(except the highest strike).The reverse is true for puts. For HDD options the higher the strike prices the lower is the difference between the put prices (maximum difference is at strike in the middle) computed by the two separate residual standard deviations and also the reverse is true for calls. The reason for this occurrence is that while the strike increases and puts come closer to deep in the money, the difference between the standard deviations have no significant effect on the prices. However, if puts are deep out of the money , the difference between the standard deviations are important and slight increase in volatility makes a susceptible increase in put prices. The same type of argument can be obviously made for calls.


Table 5. CDD and HDD Call and Put Options computed by simulation, with residual standard deviations ( ) from the daily temperature model for the month of January (HDD) and July (CDD) using equation (14) . Interest rate is *r pa* 10% . . (continuously compounded). All these numbers are re-calculated by ADS formulae (ADS, 2002 p.15, equations 4.17 and 4.19) as presented in Table 6 below. Similarly, the difference is that the standard deviation and mean values of HDD and CDD are used in ADS formulae. The call and put prices of CDD and HDD options are almost the same with the ones computed in the simulation.


Table 6. CDD and HDD Call and Put Options with Standard Deviations from the Daily Temperature Model and Historical Parameters for the Month of January (HDD) and July (CDD). Interest rate is *r pa* 10% . . (continuously compounded).

The reason why two separate standard deviations have been used is due to the different residual unconditional variances (standard deviations), one being for the whole period, and the other one being for that particular month as referred in Table 4 and 5. The different residual unconditional variances used in the simulation produce obviously two different standard deviations for HDD and CDD.

#### **4.2 GARCH modeling**

236 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

As it is observed in the tables, the only distinguishing characteristic of the data is unconditional standard deviation incorporated into simulation work which is different from historical standard deviation. This figure *does* matter as well, between the summer and winter periods. The summer period shows less variability and has a lower volatility which may have implications for pricing. However, it is obvious that winter temperatures

and HDD as strike prices, the call and put prices are computed in the following table

exp( ) ( ) *<sup>P</sup> Put rT E K X* 

As the simulation work shows for CDD options, the higher the strike prices the higher is the difference between the call prices (maximum difference is at strike in the middle), computed by the two separate residual standard deviations, in terms of absolute and percentage terms(except the highest strike).The reverse is true for puts. For HDD options the higher the strike prices the lower is the difference between the put prices (maximum difference is at strike in the middle) computed by the two separate residual standard deviations and also the reverse is true for calls. The reason for this occurrence is that while the strike increases and puts come closer to deep in the money, the difference between the standard deviations have no significant effect on the prices. However, if puts are deep out of the money , the difference between the standard deviations are important and slight increase in volatility makes a susceptible increase in put prices. The same type of argument can be obviously

*<sup>T</sup>* , where *XT* is CDD or HDD, 1

*<sup>T</sup>*

**Call Prices** 

224.1 139.64 141.34 0.57 1.26 294.09 75.20 77.76 5.58 8.58 364.08 28.19 31.28 27.48 32.08 434.07 5.79 8.68 74.72 78.25 504.06 0.66 1.27 139.66 140.10

> **Call Prices**  2.93

) from the daily temperature model for the month of January (HDD)

45.4 138.85 138.26 0.04 0.61 115.28 70.99 75.41 1.82 5.81 185.16 19.33 27.22 19.88 27.64 255.04 1.74 5.56 71.64 76.15 324.92 0.02 0.53 139.00 139.48

3.3852  

**Put Prices**  2.93

**Put Prices**  2.09

and with *<sup>P</sup> E* as objective

of average CDD

**Put Prices** 

**Put Prices**  2.93

3.3852

In conjunction with the above parameters, and considering the 1 ,2

**Call Prices**  2.93

**Call Prices**  2.09

Table 5. CDD and HDD Call and Put Options computed by simulation, with residual

and July (CDD) using equation (14) . Interest rate is *r pa* 10% . . (continuously compounded).

appear to be more volatile.

exp( ) ( ) *<sup>P</sup> Call rT E X K*

probability measure.

made for calls.

**HDD** 

**CDD** 

standard deviations (

**Option Strike** 

**Prices** 

according to the following expectations:

When AR model with GARCH/ARCH feature is used, the following equations are used for computing the mean temperature and conditional variances.

The mean equation is

$$T\_t^m = c\_0 + c\_1 t + \sum\_{p=1}^p \zeta\_p \cos(2\pi p d(t) / 365) + \sum\_{p=1}^p \gamma\_p \sin(2\pi p d(t) / 365) + \sum\_{i=1}^L \rho\_{t-i} T\_{t-i} + \sigma\_t \varepsilon\_t$$

and the conditional variance equation is

$$\sigma\_t^2 = d\_0 + \sum\_{q=1}^{Q} \delta\_p \cos(2\pi qd(t) / 365) + \sum\_{q=1}^{Q} \lambda\_q \sin(2\pi qd(t) / 365) + \sum\_{s=1}^{N} \beta\_s \sigma\_{t-s}^2 + \sum\_{r=1}^{M} \alpha\_r (\varepsilon\_{t-r} \sigma\_{t-r})^2$$

as mentioned in 3.3, as (14) and (15).

Using Weather-Related Derivative Products for Tourism and Hospitality Businesses 239

January for 31 days, where 365 days is replaced by 31 days as shown in equations (14) and

**Simulation number:20,000** 

**Call Prices for July Simulation number:20,000** 

Table 8. Simulation with GARCH. Simulation step 20,000, CPU time: 20 .56 seconds as average. The numbers in brackets are the computations made with the parameters covering

situation is different for the put prices at some higher strike levels.

as the strike level increases, an asymmetry, in favor of put prices, occurs.

2 The results have not been presented here. They may be obtained from the authors.

the asymmetry between the call and put prices increases2.

The call and put prices in Table 8 can be compared with i) the previous computations made in models 4.1 and, ii) the computations shown in the brackets, which have been obtained by using the parameters corresponding to the whole period. In this case when the GARCH/ARCH models are compared with the model in 4.1, it is seen that almost all strike levels of CDD and HDD have produced lower call prices compared to the other models. The

The reason for these biased results is that the equations for calculating January and July prices cannot produce the monthly average standard deviations of 3.38 and 2.10 °C - on a daily basis - for January and July respectively. In other words, simulated temperatures are quite close to averages. Then, since the calls get out of the money and puts get in the money

On the other hand, as the comparison (ii), when the July and January prices are computed by the parameters belonging to the whole period, slightly higher call and slightly lower put

To overcome this problem the parameters of January and July in Table 8 have been replaced by the parameters of the winter (November-March) and summer (May-September) periods in the simulation application. However, when this happens the situation gets worsened and

224.1 136.97 (143.39) 0.00(0.00) 294.09 67.58 (73.78) 0.00 (0.00) 364.08 4.31 (7.41) 6.16 (3.01) 434.07 0.00 (0.00) 71.30 (65.06) 504.06 0.00 (0.00) 140.89 (134.29)

45.4 127.15 (134.85) 0.00 (0.00) 115.28 57.88(65.22) 0.00 (0.00) 185.16 0.23 (1.39) 11.55 (5.48) 255.04 0.00 (0.00) 80.76 (73.36) 324.92 0.00 (0.00) 149.98 (142.65)

**Put Prices for January Simulation number :20,000** 

**Put Prices for July Simulation number :20,000** 

**Option Strike Prices Call Prices for January** 

(15) above.

**HDD** 

**CDD** 

whole year.

prices are found.

The parameters are presented in Table 7 below. The equations are then selected from a set of equations which provide minimum value of Akaike and Schwarz information criteria. Then these parameters are applied to simulation study to compute the option prices.

When the GARCH/ARCH modeling is employed to calculate the option prices, the critical point is that the pricing period on which the mean and conditional variance equations are applied is the same as the period these equations are obtained. In other words, the parameters of GARCH equations found using the whole number of observations causes the smoothing of the data for particular months and periods when they are used in the simulation application. Since the volatility structure is completely different for different months, overall GARCH equations may give biased results for particular periods.


Table 7. GARCH Equations for the average daily temperature of Istanbul using data of 32 years minimum and maximum daily temperatures. The total observation number is 11,680 for the whole period. The January and July periods have both observation numbers of 992.

Table 8 presents the prices of HDD and CDD call and put option prices computed by GARCH modeling of weather temperature for two different periods, namely, July and

The parameters are presented in Table 7 below. The equations are then selected from a set of equations which provide minimum value of Akaike and Schwarz information criteria. Then

When the GARCH/ARCH modeling is employed to calculate the option prices, the critical point is that the pricing period on which the mean and conditional variance equations are applied is the same as the period these equations are obtained. In other words, the parameters of GARCH equations found using the whole number of observations causes the smoothing of the data for particular months and periods when they are used in the simulation application. Since the volatility structure is completely different for different

**Whole period (E1) July E(2) January E(3)** 

these parameters are applied to simulation study to compute the option prices.

months, overall GARCH equations may give biased results for particular periods.

<sup>1</sup>*c* 2.39E-05 0.000709


0.099831

0.066656

*<sup>t</sup>*<sup>1</sup> 0.047640

*<sup>t</sup>*<sup>8</sup> 0.025915

0.539787


<sup>1</sup> 0.485618

<sup>2</sup> -0.101007

1 

2 

1 

2 

*t*3 

1 

2 

<sup>0</sup>*c* 3.028411 6.763988 1.781583


*<sup>t</sup>*<sup>1</sup> 0.961559 0.829327 0.921731

*<sup>t</sup>*<sup>2</sup> -0.251754 -0.126386 -0.200927

 *<sup>t</sup>* 1.818203 1.3385 2.186813 <sup>0</sup> *d* 1.586820 -1.448273 1.322562

<sup>1</sup> 0.411079 0.559813

<sup>1</sup> 0.111593 0.180305 0.171028 **Adjusted** <sup>2</sup> *R* 0.94 0.61 0.60 **Akaike** 3.96 3.38 4.38 **Schwarz** 3.97 3.42 4.41 **DW** 1.96 2.02 1.96 *F* **Statistics (Prob)** 10801.33 (0.0000) 219.60 (0.0000) 244.55(0.0000) Table 7. GARCH Equations for the average daily temperature of Istanbul using data of 32 years minimum and maximum daily temperatures. The total observation number is 11,680 for the whole period. The January and July periods have both observation numbers of 992.

Table 8 presents the prices of HDD and CDD call and put option prices computed by GARCH modeling of weather temperature for two different periods, namely, July and


January for 31 days, where 365 days is replaced by 31 days as shown in equations (14) and (15) above.

Table 8. Simulation with GARCH. Simulation step 20,000, CPU time: 20 .56 seconds as average. The numbers in brackets are the computations made with the parameters covering whole year.

The call and put prices in Table 8 can be compared with i) the previous computations made in models 4.1 and, ii) the computations shown in the brackets, which have been obtained by using the parameters corresponding to the whole period. In this case when the GARCH/ARCH models are compared with the model in 4.1, it is seen that almost all strike levels of CDD and HDD have produced lower call prices compared to the other models. The situation is different for the put prices at some higher strike levels.

The reason for these biased results is that the equations for calculating January and July prices cannot produce the monthly average standard deviations of 3.38 and 2.10 °C - on a daily basis - for January and July respectively. In other words, simulated temperatures are quite close to averages. Then, since the calls get out of the money and puts get in the money as the strike level increases, an asymmetry, in favor of put prices, occurs.

On the other hand, as the comparison (ii), when the July and January prices are computed by the parameters belonging to the whole period, slightly higher call and slightly lower put prices are found.

To overcome this problem the parameters of January and July in Table 8 have been replaced by the parameters of the winter (November-March) and summer (May-September) periods in the simulation application. However, when this happens the situation gets worsened and the asymmetry between the call and put prices increases2.

 2 The results have not been presented here. They may be obtained from the authors.

Using Weather-Related Derivative Products for Tourism and Hospitality Businesses 241

**Call Prices (January)**  *SD* 40.38, 0.086 

**Call Prices (July)**  *SD* 36.90, 0.452, 

Table 9. CDD and HDD call and put option prices by using Edgeworth adjusted densities

instance, strike levels 504.06 and 324.92 and no positive prices are available.

As for HDD prices an opposite asymmetry is observed as expected. Only the deep in the money call has higher price than the prices computed by equation (14), and HDD put prices are lower at all strikes. The reason again stems from the fact that Edgeworth densities give more weighting to lower level of temperature degrees due to its skew. Since the low strikes are more in the money than the higher strikes, this causes an asymmetry in favor of calls. Due to the continuous feature of the closed form formulae, the positive probabilities attributed to deep in the money and deep out of the money options there are positive prices whereas, in GARCH and Edgeworth density models there is no probability assigned to, for

After having found the slightly different prices for different models and different standard deviations, there might be the question of *whether the computation of calls and puts should be seen as part of an ad hoc study*". This is partly true. It is highly recommended to estimate the unconditional standard deviations of residuals of temperature data and, in turn, estimate the standard deviation of CDD and HDD other than the historical ones at first. Then simulation with simple AR model and closed form formulas produce very close values for both contracts. On the other hand, sophisticated GARCH models may produce biased results and cause longer CPU times in simulations. The average CPU time is about 20 seconds per simulation for 20,000 steps. As pointed out by Jewson and Brix (2005) and Dorfleitner and Wimmer (2010) practitioners in general have a tendency to use index models not only because they require not so many parameters but also they are easy to

45.4 132.74 0.00 115.28 63.44 0.00 185.16 9.58 15.44 255.04 0.10 75.26 324.92 0.00 144.46

0.121

224.1 140.36 0.00 294.09 71.04 0.09 364.08 16.94 15.39 434.07 0.13 67.99 504.06 0.00 137.27

**Put Prices (January)**  *SD* 40.38, 0.086 

**Put Prices (July)**  *SD* 36.90, 0.452, 

> 0.121

0.72

0.72

**Option Strike Prices** 

**HDD** 

**CDD** 

for July and January.

understand and implement.

#### **4.3 Edgeworth density adjustment**

The option prices for CDD and HDD have also been calculated using Edgeworth adjusted historical densities. There might be some situations requiring the changes in the prices due to the distributional characteristics of the data, particularly temperature data.

Due to non-normality the pricing needs to be modified by taking into consideration of moments of distribution higher than second order. This is the technique called "Generalized Edgeworth Series Expansion" and has been applied to option pricing by Rubinstein (1994 and 2000) and Jarrow and Rudd (1982). In this chapter Rubinstein's (2000) approach has been adopted. In the model *a x*( ) is the density of normal distribution function which is extracted from historical distribution of temperature data by using first two moments. Then, by using skewness ( ) and kurtosis ( ) measures of the historical data the densities can be modified and adjusted according to the following formula (Stuart & Ord, 1987):

$$f(\mathbf{x}) = \left[1 + (1/6)\xi(\mathbf{x}^3 - 3\mathbf{x}) + (1/24)(\kappa - 3)(\mathbf{x}^4 - 6\mathbf{x}^2 + 3) + \cdots\right]$$

$$(1/72)\xi^2(\mathbf{x}^6 - 15\mathbf{x}^4 + 45\mathbf{x}^2 - 15)\Big]a(\mathbf{x})\tag{22}$$

where *x* and *f* ( ) *x* denote, standard normal variable and Edgeworth density of *a x*( ) respectively.

Accordingly, the adjusted (Edgeworth) densities can be calculated as weights of the put option payoffs during the selected period for the specific strike levels. The skewness and kurtosis adjusted call and put prices can be calculated according to the following formula:

$$C(E) = \exp(-r(t\_n - t)) \frac{1}{\sum\_{j=1}^{N} f\_j(\mathbf{x}) \max(\sum\_{i=1}^{D} X\_i(t\_n) - K, 0)} \tag{23}$$

$$P(E) = \exp(-r(t\_n - t)) \frac{1}{\sum\_{j=1}^{N} f\_j(\mathbf{x}) \max(\mathbf{K} - \sum\_{i=1}^{D} \mathbf{X}\_i(t\_n), \mathbf{0})\_j} \tag{24}$$

In the above formula *K* is the strike price, *N* is the number of observations (*N*=32 years), *D* is the number of days in a particular period which are January and July as example (*D*=31 days) and *Xi* is max( 18,0) *Ti* for CDD and max(18 ,0) *Ti* for HDD.

As it is observed in Table 9 January/July data is left/right skewed as expected. Additionally, it is observed in Table 9 that CDD call and put prices computed by adjusted densities are lower than the prices computed by the equation (14). The reason for this difference is that, the weights or probabilities used in Edgeworth technique become lower at lower temperatures and higher at higher temperatures (strikes) due to its skew and kurtosis values. Since the calls get out of the money and puts get in the money as the temperature degree /strike level increases, this creates an asymmetry in favor of put prices and CDD put Edgeworth price is more than the others at the highest strike.

The option prices for CDD and HDD have also been calculated using Edgeworth adjusted historical densities. There might be some situations requiring the changes in the prices due

Due to non-normality the pricing needs to be modified by taking into consideration of moments of distribution higher than second order. This is the technique called "Generalized Edgeworth Series Expansion" and has been applied to option pricing by Rubinstein (1994 and 2000) and Jarrow and Rudd (1982). In this chapter Rubinstein's (2000) approach has been adopted. In the model *a x*( ) is the density of normal distribution function which is extracted from historical distribution of temperature data by using first two moments. Then,

3 4 <sup>2</sup> *f x*( ) 1 (1 /6) ( 3 ) (1 / 24)( 3)( 6 3)

26 4 2 (1 /72) ( 15 45 15) ( )

where *x* and *f* ( ) *x* denote, standard normal variable and Edgeworth density of *a x*( )

Accordingly, the adjusted (Edgeworth) densities can be calculated as weights of the put option payoffs during the selected period for the specific strike levels. The skewness and kurtosis adjusted call and put prices can be calculated according to the following formula:

> <sup>1</sup> ( ) exp( ( )) ( )max( ( ) ,0) ( )

> <sup>1</sup> ( ) exp( ( )) ( )max( ( ),0) ( )

In the above formula *K* is the strike price, *N* is the number of observations (*N*=32 years), *D* is the number of days in a particular period which are January and July as example (*D*=31

As it is observed in Table 9 January/July data is left/right skewed as expected. Additionally, it is observed in Table 9 that CDD call and put prices computed by adjusted densities are lower than the prices computed by the equation (14). The reason for this difference is that, the weights or probabilities used in Edgeworth technique become lower at lower temperatures and higher at higher temperatures (strikes) due to its skew and kurtosis values. Since the calls get out of the money and puts get in the money as the temperature degree /strike level increases, this creates an asymmetry in favor of put prices and CDD put

*PE rt t f x K Xt*

*CE rt t f x Xt K*

1

1

*j*

days) and *Xi* is max( 18,0) *Ti* for CDD and max(18 ,0) *Ti* for HDD.

Edgeworth price is more than the others at the highest strike.

*j*

*x x x x*

*x x x ax*

 

1 1

1 1

*f x*

*N D n N j i n j j i <sup>j</sup>*

*f x*

*N D n N j i n j j i <sup>j</sup>*

) measures of the historical data the densities can be

(22)

(23)

(24)

to the distributional characteristics of the data, particularly temperature data.

modified and adjusted according to the following formula (Stuart & Ord, 1987):

**4.3 Edgeworth density adjustment** 

) and kurtosis (

by using skewness (

respectively.


Table 9. CDD and HDD call and put option prices by using Edgeworth adjusted densities for July and January.

As for HDD prices an opposite asymmetry is observed as expected. Only the deep in the money call has higher price than the prices computed by equation (14), and HDD put prices are lower at all strikes. The reason again stems from the fact that Edgeworth densities give more weighting to lower level of temperature degrees due to its skew. Since the low strikes are more in the money than the higher strikes, this causes an asymmetry in favor of calls.

Due to the continuous feature of the closed form formulae, the positive probabilities attributed to deep in the money and deep out of the money options there are positive prices whereas, in GARCH and Edgeworth density models there is no probability assigned to, for instance, strike levels 504.06 and 324.92 and no positive prices are available.

After having found the slightly different prices for different models and different standard deviations, there might be the question of *whether the computation of calls and puts should be seen as part of an ad hoc study*". This is partly true. It is highly recommended to estimate the unconditional standard deviations of residuals of temperature data and, in turn, estimate the standard deviation of CDD and HDD other than the historical ones at first. Then simulation with simple AR model and closed form formulas produce very close values for both contracts. On the other hand, sophisticated GARCH models may produce biased results and cause longer CPU times in simulations. The average CPU time is about 20 seconds per simulation for 20,000 steps. As pointed out by Jewson and Brix (2005) and Dorfleitner and Wimmer (2010) practitioners in general have a tendency to use index models not only because they require not so many parameters but also they are easy to understand and implement.

Using Weather-Related Derivative Products for Tourism and Hospitality Businesses 243

**Premium (\$)** 

*HDDCall Simulation* \$28.19( ) -21,142.5 10/32 -266,453 *HDDCall Edgeworth* \$16.94( ) -12,705 11/32 3,547.5 Table 10. HDD example for a restaurant chain hedging against the weather risk in the month

According to the World Tourism Organization (2009) Turkish tourism industry represents 2.5% of world tourism market, in terms of tourist arrivals and tourism revenues earned. As the second largest industry tourism plays a major role in the economy of Turkey. Between 1986 and 2006, tourism industry's contribution to the Turkish Gross Domestic Product (GDP) increased from 2.1% to 5.2% (TURSAB, 2008). Tourism also plays other significant roles in improving Turkey's other macroeconomic indicators. For instance, together with its direct and indirect contribution, tourism represents 17.9% of total employment in Turkey. Additionally, tourism revenues helps close the balance of trade deficit in Turkey, a country with one of the highest balance of trade deficits in the world. Turkey has the seventh largest balance of trade deficit in the world (World Bank, 2010), used to be the third in 1990s, and the contribution of tourism industry in Turkey towards closing balance of trade deficit ranged from 77% in 2001 to 56% in 2003. Moreover, Turkish tourism is important as it has the highest tourism multiplier value in the world (Fletcher, 1995). This means that any development in Turkish tourism may have significant implications for the whole economy. However, alongside these above strengths Turkish tourism industry faces fundamental problems too, which may jeopardize its sustainable development. For instance, Turkish tourism is highly seasonal with about 70% of tourists visiting Turkey between April and September for sun and sea holidays (Koc & Altinay, 2007). On top of seasonality, which requires skills to manage both the peak season and off-season, weather risk creates additional burdens in terms of the sustainability of hospitality businesses such as hotels,

According to Culligan (1992) the tourist's increasing desire for more novel, adventurous, and 'authentic' forms of tourism experience is a function of the decline in utility associated with a decision to simply replicate previous experience. This implies a move away from General Interest Tourism (GIT) towards Special Interest Tourism (SIT) (Brotherton & Himmetoglu, 1997). Krippendorf (1987) argued that fundamental changes occurring in the tourism market in general are in line with the developments of new patterns of tourism consumption. He maintains that in the near future there will be a substantial decline in those tourists for whom hedonism is a dominant travel motive, e.g. as in the case of sun and sea holidays, and for whom tourism is seen purely as a mechanism for recovery [rest] and liberation [escape from the ordinary]. Instead, the travel market will place more emphasis on the environmental and social context in which tourism occurs, and the humanization

**Number of years that the Firm makes profit** 

**Net Hedging Gain/(Cost) for the Firm during 32 years (\$)** 

**Annual** 

**Call Prices and** 

\$750

of January.

restaurants, cafes, etc.

**6. Discussion and vision for the industry** 

As a final check, the third and fourth moments of the data can be taken into account to finetune the option prices by transforming the historical probabilities through the Edgeworth expansion. This may not be so crucial in the context of temperature data, for the temperature data present strong seasonality and long term persistency which particularly may cause less weight in the tails. (Fat tails may be more common for some other weather variables such as rainfall and snowfall.) This is justified with moderate skew and kurtosis parameters as referred in Table 9. As a result of this, Edgeworth adjustments produce higher call prices compared to GARCH model but lower calls compared to AR and closed form formulas. As for puts, Edgeworth prices are always lower than the prices computed by all models except at the very high strikes for CDDs, e.g., 324.92 due to the unique characteristics of the data.

#### **5. Example and the results**

In this section, the financial implications of hedging is presented from the viewpoint of a restaurant-cafe chain purchasing a HDD January call option based on the temperature data of past 32 years.

It is assumed that restaurants or cafés in with a number of restaurants and cafés at various locations is exposed to weather risk and its outdoor business is rather susceptible to the changes in temperature degrees.

Another assumption is that a 1 *C* decrease in weather temperature in January may cause a proportionate decrease in the number of people demanding the services of this particular restaurant or café chain. It is also assumed that this decrease may, in turn, cause \$750 decrease in net operating income based on the supposed value of . ( \$750) Then to hedge against the changes in net operating income, the restaurant chain decides to buy a call option on HDD with a strike of 364.08 (historical average). The idea behind the call purchase is, if the winter gets colder than usually expected, i.e., HDD is above the strike, in spite of lost business due to the harsh winter conditions, the chain compensates the loss with the option payoff, which is the difference between the HDD at the maturity and the strike times \$750 conditioned on the payoff being positive. In case the January HDD is just at the strike or below this level, restaurant chain loses the premium. In Table 10, it is assumed that the chain has bought a HDD January call with the strike of 364.08 during all these 32 years. The prices used in Table 10 are simulation prices (Table 5) and Edgeworth adjusted (Table 9) call prices. Accordingly, the restaurant or the café chain would make an overall loss with simulated (and with very close ADS prices as well) HDD call prices and make a very small profit with Edgeworth adjusted prices over the period. Assuming the risk hedgers are willing to make a loss to a certain extent, the example justifies the employment of such a hedging tool in order to smooth the possible fluctuations in net operating income. However the gap between the overall costs (-\$266,453 and \$3,547.5) points out two important facts. The first one is that there may be opportunities for the business to find better prices in the market. The firm may reduce the total cost by getting quotations between the "model prices" and "(Edgeworth) adjusted" prices depending on the value of 3. Secondly, there have been years, providing the firm with significant amount of positive payoff from the HDD contract which would make the firm close the period with \$ 3,547 profit from \$266,453 loss once again subject to the value of .

<sup>3</sup> Note that the value of = \$750 is an assumed value.


Table 10. HDD example for a restaurant chain hedging against the weather risk in the month of January.

#### **6. Discussion and vision for the industry**

242 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

As a final check, the third and fourth moments of the data can be taken into account to finetune the option prices by transforming the historical probabilities through the Edgeworth expansion. This may not be so crucial in the context of temperature data, for the temperature data present strong seasonality and long term persistency which particularly may cause less weight in the tails. (Fat tails may be more common for some other weather variables such as rainfall and snowfall.) This is justified with moderate skew and kurtosis parameters as referred in Table 9. As a result of this, Edgeworth adjustments produce higher call prices compared to GARCH model but lower calls compared to AR and closed form formulas. As for puts, Edgeworth prices are always lower than the prices computed by all models except at the very high strikes for CDDs, e.g., 324.92 due to the unique characteristics of the data.

In this section, the financial implications of hedging is presented from the viewpoint of a restaurant-cafe chain purchasing a HDD January call option based on the temperature data

It is assumed that restaurants or cafés in with a number of restaurants and cafés at various locations is exposed to weather risk and its outdoor business is rather susceptible to the

a proportionate decrease in the number of people demanding the services of this particular restaurant or café chain. It is also assumed that this decrease may, in turn, cause

to hedge against the changes in net operating income, the restaurant chain decides to buy a call option on HDD with a strike of 364.08 (historical average). The idea behind the call purchase is, if the winter gets colder than usually expected, i.e., HDD is above the strike, in spite of lost business due to the harsh winter conditions, the chain compensates the loss with the option payoff, which is the difference between the HDD at the maturity and the strike times \$750 conditioned on the payoff being positive. In case the January HDD is just at the strike or below this level, restaurant chain loses the premium. In Table 10, it is assumed that the chain has bought a HDD January call with the strike of 364.08 during all these 32 years. The prices used in Table 10 are simulation prices (Table 5) and Edgeworth adjusted (Table 9) call prices. Accordingly, the restaurant or the café chain would make an overall loss with simulated (and with very close ADS prices as well) HDD call prices and make a very small profit with Edgeworth adjusted prices over the period. Assuming the risk hedgers are willing to make a loss to a certain extent, the example justifies the employment of such a hedging tool in order to smooth the possible fluctuations in net operating income. However the gap between the overall costs (-\$266,453 and \$3,547.5) points out two important facts. The first one is that there may be opportunities for the business to find better prices in the market. The firm may reduce the total cost by getting quotations between the "model prices" and "(Edgeworth) adjusted" prices depending on

3. Secondly, there have been years, providing the firm with significant

amount of positive payoff from the HDD contract which would make the firm close the

period with \$ 3,547 profit from \$266,453 loss once again subject to the value of

= \$750 is an assumed value.

\$750 decrease in net operating income based on the supposed value of

decrease in weather temperature in January may cause

 . ( \$750) 

> .

Then

**5. Example and the results** 

changes in temperature degrees. Another assumption is that a 1 *C*

of past 32 years.

the value of

3 Note that the value of

According to the World Tourism Organization (2009) Turkish tourism industry represents 2.5% of world tourism market, in terms of tourist arrivals and tourism revenues earned. As the second largest industry tourism plays a major role in the economy of Turkey. Between 1986 and 2006, tourism industry's contribution to the Turkish Gross Domestic Product (GDP) increased from 2.1% to 5.2% (TURSAB, 2008). Tourism also plays other significant roles in improving Turkey's other macroeconomic indicators. For instance, together with its direct and indirect contribution, tourism represents 17.9% of total employment in Turkey. Additionally, tourism revenues helps close the balance of trade deficit in Turkey, a country with one of the highest balance of trade deficits in the world. Turkey has the seventh largest balance of trade deficit in the world (World Bank, 2010), used to be the third in 1990s, and the contribution of tourism industry in Turkey towards closing balance of trade deficit ranged from 77% in 2001 to 56% in 2003. Moreover, Turkish tourism is important as it has the highest tourism multiplier value in the world (Fletcher, 1995). This means that any development in Turkish tourism may have significant implications for the whole economy.

However, alongside these above strengths Turkish tourism industry faces fundamental problems too, which may jeopardize its sustainable development. For instance, Turkish tourism is highly seasonal with about 70% of tourists visiting Turkey between April and September for sun and sea holidays (Koc & Altinay, 2007). On top of seasonality, which requires skills to manage both the peak season and off-season, weather risk creates additional burdens in terms of the sustainability of hospitality businesses such as hotels, restaurants, cafes, etc.

According to Culligan (1992) the tourist's increasing desire for more novel, adventurous, and 'authentic' forms of tourism experience is a function of the decline in utility associated with a decision to simply replicate previous experience. This implies a move away from General Interest Tourism (GIT) towards Special Interest Tourism (SIT) (Brotherton & Himmetoglu, 1997). Krippendorf (1987) argued that fundamental changes occurring in the tourism market in general are in line with the developments of new patterns of tourism consumption. He maintains that in the near future there will be a substantial decline in those tourists for whom hedonism is a dominant travel motive, e.g. as in the case of sun and sea holidays, and for whom tourism is seen purely as a mechanism for recovery [rest] and liberation [escape from the ordinary]. Instead, the travel market will place more emphasis on the environmental and social context in which tourism occurs, and the humanization

Using Weather-Related Derivative Products for Tourism and Hospitality Businesses 245

(Edgeworth) adjusted prices to take into account the distributional characteristics of the

The key point in pricing of weather derivatives is that the market is incomplete and it is impossible to buy or sell the underlying asset for hedging purposes. For that purpose sellers will try to charge maximum premium in their prices and quotations to avoid potential surprises regarding fluctuations in weather. In weather derivatives markets a ten to twenty percent addition can be made to the premium provided in (12) just like insurance premium

Alaton, P., Djehiche, B. & Stillberger, D.(2002). On modeling and pricing weather

Benth,F.E.,& Benth,J.S.(2007).The volatility of temperature and pricing of weather

Beyazit, F. and Koc, E. (2010), An Analysis of Snow Options for Ski Resort Establishments,

Brotherton,B.,& Himmetoglu,B.(1997). Beyond Destinations -Special interest tourism. Anatolia: An International Journal of Tourism and Hospitality Research, 8(3), 11–30. Caballero R., Jewson S., & Brix A.(2002). Long memory in surface air temperature: Detection,

Campbell, S.D. & Diebold,F.X. (2005). Weather Forecasting for Weather Derivatives, Journal

Cao,M., Li,A., &Wei, J. (2003). Weather Derivatives: A New Class of Financial Instruments. Working Paper, Schulich School of Business,York University, Canada. Chang, C. (2009). To Hedge or Not to Hedge: Revenue Management and Exchange Rate

Culligan,K.(1992).Developing a model of holiday taking behavior, leisure and tourism futures conference proceedings. London: The Henley Centre for Forecasting. Dorfleitner, G.,& Wimmer, M. ( 2010).The pricing of temperature futures at the Chicago

Dorje C.Brody, Syroka J.,& Zervos M. (2002). Dynamical pricing of weather derivatives.

Fletcher, J. (1995). Economics and forecasting the economic impact. In S. F. Witt, & L.

Haktanir, M., & Harris, P. (2005). Performance measurement practice in an independent

Jarrow,R.,&Rudd,A.(1982).Approximate Option Valuation for Arbitrary Stochastic

Jewson S., & Zervos, M. (2003). The Black Scholes equation for weather derivatives. SSRN

hotel context: a case study approach. International Journal of

Processes. Journal of Financial Economics, 10, 347-369.

Mercantile Exchange. Journal of Banking and Finance, Article in Press

Moutinho (Eds.), Tourism marketing management handbook (pp. 457). Englewood

modeling and application to weather derivative valuation. Climate Research, 21,

mark-up, in the light of past experience gained over a period of time.

derivatives. Applied Mathematical Finance, 9(1), 1-20

of the American Statistical Association, 100, March, 6-16.

Risk, Cornell Hospitality Quarterly, 50 (3), 301 - 313

derivatives. Quantitative Finance, 7 (5), 553-561.

Tourism Management, 31(5),676-683.

doi:10.1016/j.jbankfin.2009.12.004.

Quantitative Finance, 2 (3), 189-198.

Contemporary Hospitality Management, 17(1), 39–50.

Cliffs, NJ: Prentice Hall.

working paper.

HDD and CDD data.

**7. References** 

127–140.

of travel activities (Krippendorf, 1987). In other words Krippendorf (1987) argues that there will be a move from GIT to SIT with decreasing utility in hedonistically motivated holidays. Zauhar's (1994) view also supports this trend pointed out by Krippendorf (1987). Zauhar (1994) claims that future projections, with reference to tourism trends, indicate a tendency pattern of breaking free time into a series of blocks, thereby permitting a variety of experiential stays within a single year (Zauhar, 1994). Therefore, based on the above explanations it may be suggested that there will be a decline in the numbers of organized mass tourists who visit Turkey primarily for sun and sea holidays. This means that the growth of Turkish tourism may not be sustainable unless corrective measures are taken both at macro level in terms of public policy and at micro level in terms of effective marketing and actvities financial management. From an effective marketing management diversification of tourism products can be suggested for sustainability in future. However, sustainability also requires financial robustness of tourism and hospitality businesses (Chang, 2009; Beyazit and Koc, 2010).

According to research carried by Haktanir and Harris (2005) there are six key themes in evaluating a hospitality establishment's performance. These are business dynamics, overall performance measures, employee performance measures, customer satisfaction measures, innovative activity measures and financial performance measures. In Turkey financial performance is especially an important issue, particularly due to strong seasonality and low profit margins. Especially coupled with the perishability nature of services (Zeithaml, Parasuraman, & Berry, 1985), tourism businesses usually find it difficult to sustain their existence, yet alone grow.

The particular reason for choosing Istanbul as the context of this study lies in its significance in terms of being the financial, cultural and tourism capital of Turkey. According to World Tourism Organization (2010) in terms of tourist arrivals Istanbul is among the top ten destinations in the world. It is believed that tourism and hospitality establishments (hotels, restaurants, beaches, cafes, etc.) may significantly benefit from buying weather options for hedging themselves against the weather risk.

This study has proposed a mechanism whereby hospitality establishments operating in Istanbul may reduce their vulnerability against the vagaries of weather. Especially, hospitality businesses such as restaurants, cafes and bars are extremely fragile not only due to high levels of seasonality and availability of rather low profit margins, but also due to the extensive adoption of all-inclusive pricing system by hotels and hotel chains.

The findings of the research may be used by hospitality businesses not only in Istanbul, Turkey, but also in other cities in the world as reference. Additionally, apart from tourism and hospitality establishments, many other businesses in various sectors, e.g. in energy, may benefit from the findings of this study.

In the pricing process of CDD and HDD options closed form formulae is recommended due to its simplicity and traceability. However, to be on the safe side AR models provide unconditional variances which may yield higher standard deviation parameters for CDD and HDD than the historical ones, which in turn produce better (higher) prices for the seller. The other model (GARCH) has not produced consistent prices for CDD and HDD options and hence is not recommended. The calculated prices have to be compared with the (Edgeworth) adjusted prices to take into account the distributional characteristics of the HDD and CDD data.

The key point in pricing of weather derivatives is that the market is incomplete and it is impossible to buy or sell the underlying asset for hedging purposes. For that purpose sellers will try to charge maximum premium in their prices and quotations to avoid potential surprises regarding fluctuations in weather. In weather derivatives markets a ten to twenty percent addition can be made to the premium provided in (12) just like insurance premium mark-up, in the light of past experience gained over a period of time.

#### **7. References**

244 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

of travel activities (Krippendorf, 1987). In other words Krippendorf (1987) argues that there will be a move from GIT to SIT with decreasing utility in hedonistically motivated holidays. Zauhar's (1994) view also supports this trend pointed out by Krippendorf (1987). Zauhar (1994) claims that future projections, with reference to tourism trends, indicate a tendency pattern of breaking free time into a series of blocks, thereby permitting a variety of experiential stays within a single year (Zauhar, 1994). Therefore, based on the above explanations it may be suggested that there will be a decline in the numbers of organized mass tourists who visit Turkey primarily for sun and sea holidays. This means that the growth of Turkish tourism may not be sustainable unless corrective measures are taken both at macro level in terms of public policy and at micro level in terms of effective marketing and actvities financial management. From an effective marketing management diversification of tourism products can be suggested for sustainability in future. However, sustainability also requires financial robustness of

According to research carried by Haktanir and Harris (2005) there are six key themes in evaluating a hospitality establishment's performance. These are business dynamics, overall performance measures, employee performance measures, customer satisfaction measures, innovative activity measures and financial performance measures. In Turkey financial performance is especially an important issue, particularly due to strong seasonality and low profit margins. Especially coupled with the perishability nature of services (Zeithaml, Parasuraman, & Berry, 1985), tourism businesses usually find it difficult to sustain their

The particular reason for choosing Istanbul as the context of this study lies in its significance in terms of being the financial, cultural and tourism capital of Turkey. According to World Tourism Organization (2010) in terms of tourist arrivals Istanbul is among the top ten destinations in the world. It is believed that tourism and hospitality establishments (hotels, restaurants, beaches, cafes, etc.) may significantly benefit from buying weather options for

This study has proposed a mechanism whereby hospitality establishments operating in Istanbul may reduce their vulnerability against the vagaries of weather. Especially, hospitality businesses such as restaurants, cafes and bars are extremely fragile not only due to high levels of seasonality and availability of rather low profit margins, but also due to the

The findings of the research may be used by hospitality businesses not only in Istanbul, Turkey, but also in other cities in the world as reference. Additionally, apart from tourism and hospitality establishments, many other businesses in various sectors, e.g. in energy, may

In the pricing process of CDD and HDD options closed form formulae is recommended due to its simplicity and traceability. However, to be on the safe side AR models provide unconditional variances which may yield higher standard deviation parameters for CDD and HDD than the historical ones, which in turn produce better (higher) prices for the seller. The other model (GARCH) has not produced consistent prices for CDD and HDD options and hence is not recommended. The calculated prices have to be compared with the

extensive adoption of all-inclusive pricing system by hotels and hotel chains.

tourism and hospitality businesses (Chang, 2009; Beyazit and Koc, 2010).

existence, yet alone grow.

hedging themselves against the weather risk.

benefit from the findings of this study.


**13** 

*1,2,4Italy* 

*3The Netherlands* 

**Tourism Life Cycle Assessment (LCA):** 

**Proposal of a New Methodological Framework** 

**for Sustainable Consumption and Production** 

1Camillo De Camillis1,2, Paul Peeters3, Luigia Petti4 and Andrea Raggi4

International tourism has become an important part of modern life styles, while it is now one of the largest and fastest growing economic sectors worldwide, even though it appears vulnerable to the occasional economic or global socio-political shocks over the last decade (UNWTO, 2010). Tourism's contribution to the worldwide gross domestic product (GDP) is estimated at some 5% (ibid). However, this strong growth also implies an increase of undesired environmental impacts. Tourism is globally responsible for 5% of all carbon dioxide emissions, the most important greenhouse gas causing climate change (UNWTO UNEP WMO, 2008). However, in terms of radiative forcing, the direct measure for contribution to climate change, tourism could even have a share of up to 12.5% (Scott et al., 2010). Also, the greenhouse gas emissions of tourism are estimated to grow at a rather large rate, although global emissions should be reduced up to 80% by 2050 (e.g. Scott et al., 2010). Finally, it has been shown that the eco-efficiency – the economic contribution per ton emissions – of tourism is rather low (Gössling et al., 2005). These data contradict the rather common view among many researchers in the past, according to which tourism is a low environmental impact industry (McCrory, 2006). Now, it is a shared concept that tourist activities are strongly related to the environment, since, on the one hand, the natural environment itself may be considered as a major input resource to the processes of tourism industries and, on the other hand, the development of tourism as a mass industry may severely increase its overall impact on the environment (Raggi & Petti, 2006a;

\*1The views expressed in the article are personal and do not necessarily reflect an official position of the

*2*

**1. Introduction** 

Romeril, 1989).

European Commission.

*1Dipartimento di Scienze, Università degli Studi "G. d'Annunzio", Pescara* 

*4Dipartimento di Economia, Università degli Studi "G. d'Annunzio", Pescara* 

*European Commission, Joint Research Centre, IES, Ispra\* 3Center for Sustainable Transport and Tourism, NHTV Breda* 

*University of Applied Sciences, Breda,* 


### **Tourism Life Cycle Assessment (LCA): Proposal of a New Methodological Framework for Sustainable Consumption and Production**

1Camillo De Camillis1,2, Paul Peeters3, Luigia Petti4 and Andrea Raggi4 *1Dipartimento di Scienze, Università degli Studi "G. d'Annunzio", Pescara 2 European Commission, Joint Research Centre, IES, Ispra\* 3Center for Sustainable Transport and Tourism, NHTV Breda University of Applied Sciences, Breda, 4Dipartimento di Economia, Università degli Studi "G. d'Annunzio", Pescara 1,2,4Italy 3The Netherlands* 

#### **1. Introduction**

246 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Jewson, S. (2003). Closed-form expressions for the pricing of weather derivatives: Part I, II

Jewson, S. (2004). Closed-form expressions for the pricing of weather derivatives: Part –IV

Jewson, S., & Brix, A. (2005). Weather derivative valuation: the meteorological. Statistical.

Koc, E., & Altinay, G.(2007). An analysis of seasonality in monthly per person tourist

Krippendorf, J. (1987). The holiday makers: Understanding the impact of leisure and travel.

London,J. (2007). Modeling Derivatives Applications in Matlab,C++ and Excel.FT Press New

Rubinstein, M.(2000). On the Relation Between Binomial and Trinomial Option Pricing Models, Working Paper No: 292, University of California, Berkeley. Stuart, A.,&Ord,K. (1987). Kendall's Advanced Theory of Statistics, Oxford University Press,

TURSAB (Turkish Travel Agencies Association), (2008). Various Tourism Statistics [Internet] http://www.tursab.org.tr/content/turkish/istatistikler [Accessed 10.09.2011].

http://www.weatherbill.com/assets/LandingPageDocs/Global-Weather-Sensitivity.pdf World Bank (2010). Country Reports : http://www.worldbank.org.tr/external/default WTO (World Tourism Organization). (2009). Tourism highlights 2009 edition [Internet]. Available from: http://www.world-tourism.org/facts/eng/highlights.htm WTO World Tourism Organization (2010). Tourist Arrival Statistics [Internet]. Available

Zapranis, A.,& Alexandridis, A. (2008). Modelling the Temperature Time-Dependent Speed

Zauhar, J. (1994). Loisirs et Tourisme-convergence ou divergence. Ottowa: Balfour Institute. Zeithaml, V. A., Parasuraman, A., & Berry, L. L. (1985). Problems and strategies in services

of Mean Reversion in the Context of Weather Derivatives Pricing. Applied

from: http://www.worldtourismdirectory.com/news/10275

Lucas, R. E. (1978). Asset Prices in an Exchange Economy, Econometrica, 46, 1429-1445. Met Office (2001). The costs of the weather. [Internet] Available from

Rubinstein, M. (1994). Implied Binomial Trees.The Journal of Finance 49 (3), 771-818.

tourism management. Tourism Management, 28(1), 227–237.

Financial and Mathematical Foundations. Cambridge University Press, Cambridge.

spending in Turkish inbound tourism from a market segmentation perspective

and III – the expected payoff. SSRN working paper.

the kernel density. SSRN working paper.

Oxford: Heinemann Professional Publishing.

http://www.metoffice.com. [Accessed 10.09.2011]

Weatherbill (2011). Global Weather Sensitivity: A comparable study.

Mathematical Finance, 15(4), 355-386.

marketing. Journal of Marketing, 49(2), 33–47.

Jersey

New York.

International tourism has become an important part of modern life styles, while it is now one of the largest and fastest growing economic sectors worldwide, even though it appears vulnerable to the occasional economic or global socio-political shocks over the last decade (UNWTO, 2010). Tourism's contribution to the worldwide gross domestic product (GDP) is estimated at some 5% (ibid). However, this strong growth also implies an increase of undesired environmental impacts. Tourism is globally responsible for 5% of all carbon dioxide emissions, the most important greenhouse gas causing climate change (UNWTO UNEP WMO, 2008). However, in terms of radiative forcing, the direct measure for contribution to climate change, tourism could even have a share of up to 12.5% (Scott et al., 2010). Also, the greenhouse gas emissions of tourism are estimated to grow at a rather large rate, although global emissions should be reduced up to 80% by 2050 (e.g. Scott et al., 2010). Finally, it has been shown that the eco-efficiency – the economic contribution per ton emissions – of tourism is rather low (Gössling et al., 2005). These data contradict the rather common view among many researchers in the past, according to which tourism is a low environmental impact industry (McCrory, 2006). Now, it is a shared concept that tourist activities are strongly related to the environment, since, on the one hand, the natural environment itself may be considered as a major input resource to the processes of tourism industries and, on the other hand, the development of tourism as a mass industry may severely increase its overall impact on the environment (Raggi & Petti, 2006a; Romeril, 1989).

<sup>\*1</sup>The views expressed in the article are personal and do not necessarily reflect an official position of the European Commission.

Tourism Life Cycle Assessment (LCA):

Commission, 2007; Finnveden et al., 2009).

methodologies.

(PAS 99:2006).

Proposal of a New Methodological Framework for Sustainable Consumption and Production 249

Maxwell et al., 2006; Rebitzer & Buxmann, 2005; Rebitzer et al., 2004). Although LCT was initially conceived for products, it can also fit for services (De Camillis et al., 2008; Graedel, 1997; Petti & Tontodonati 2002; Raggi et al., 2008a, 2008b; Raggi & Petti 2006a; Raggi et al., 2005; Rosenblum et al., 2000). One of the major strengths of LCT is its comprehensiveness. This characteristic makes LCT a unique perspective to detect potential shifts of economic, environmental and social burdens from one phase of the life cycle to another, from a certain geographical area to another, and from one sustainability issue to another (European

Several LCT-based methodologies and instruments for sustainable development have already been developed so far. One of the most known is Life Cycle Assessment (LCA), a methodology to assess the potential environmental impact of a product/service in terms of individual environmental impact categories (e.g. global warming, human and environmental toxicity, natural resource depletion, ozone layer depletion, summer smog, etc.) and along its life cycle phases (Pennington et al., 2004; Rebitzer et al., 2004). In fact, all activities involved in a certain product's life cycle result in environmental impacts that in most cases are negative due to consumption of resources, and emissions of harmful substances into the natural environment. The LCA methodology has continued to develop and has become to some extent mature during the last decades. From the first conceptualisations (Heijungs et al., 1992; Consoli et al., 1993), LCA is now an internationally standardised methodology (ISO 14040:2006; ISO 14044:2006) recognised by the European Commission (2003) as the best tool for assessing the life cycle environmental impacts of products. While general guidelines for LCA have been issued by the European Commission (2010), many initiatives have been developing ad hoc sector- and product-specific

Besides LCA, ecodesign is another LCT-based method. Ecodesign – also generally known as Design for Environment (DfE) or Life Cycle Design (LCD) – aims at preventing pollution by supporting product designers during the entire development process of products/services with regard to environmental choices (Fitzgerald et al., 2007; Vezzoli & Sciama, 2006). This

Regarding environmental labelling, three types of options are regulated in international standards (ISO 14020:2000). In this context, considerations from LCA case studies are to be taken into account in setting up criteria for Type I environmental labels (ISO 14024:1999), such as e.g. the EU eco-label. A closer reference to LCA is found in those performanceoriented schemes enabling to come up with Type III environmental declarations (14025:2006), such as e.g. the Environmental Product Declaration (EPD) scheme (EPD, 2011). In these schemes, LCA is the methodology chosen for calculating the environmental performance of products. Finally, findings from LCA case studies might be used for self-

In addition to product labelling options, pieces of information from LCA studies may be used for setting up and maintaining the Environmental Management Systems of those organisations certified or on the way to be certified according to ISO 14001:2004 or EMAS. Equally, findings from LCA case studies may be used for Integrated Management Systems

method has been also standardised (ISO/TR 14062:2002).

declared claims, or Type II environmental labels (ISO 14021:1999).

Given the predictions of an increased role of tourism industries in the world economy, the environmental aspects of, and impacts generated by tourist activities should be accurately considered according to a Life Cycle Thinking (LCT) perspective. This concept has been extensively advocated as the proper way of addressing the challenges linked with sustainable development, and, in particular, with those measures for enhancing sustainable consumption and production. In the framework of sustainable development policies, the "Sustainable Consumption and Production and Sustainable Industrial Policy (SCP) Action Plan" (European Commission, 2008) is a building block in the EU.

In line with this policy, a wide range of environmental instruments have been developed for assessment and labelling/certification purposes of travel and tourist services. This ongoing proliferation of different initiatives shows a high degree of diversity in terms of scope, assessment methodologies and means of communication. Although this proliferation reflects the vast variety of travel and tourist products as well as their complicated nature when it comes to the assessment of the environmental performance, these environmental instruments seem to suffer from a lack of integration and standardisation or quality control. This situation has the potential to confuse or even mislead travellers and the stakeholders within the industry.

This implies three questions we seek to answer in this chapter. Firstly, what environmental instruments and initiatives are currently supporting the application of the European Sustainable Consumption and Production (SCP) Action Plan in the travel and tourism industry? Secondly, what are their key characteristics and how do they stand in relation to Life Cycle Assessment (LCA) principles? And thirdly, how can these instruments be combined into a general framework capable to render this industry low carbon and more sustainable from an environmental point of view?

In this chapter, the topic will be introduced in the first sections. In particular, the key concepts of LCT and its supported methodologies are illustrated in section 2. More information on the application steps of the LCT-oriented environmental assessment methodology (i.e. LCA) is outlined in section 3. The meaning of life cycle in the tourism sector will be investigated in section 4. In order to answer the research questions, a review of the existing environmental instruments in the European travel and tourism industry was made. The review method applied and overview of the existing instruments and initiatives are the subjects of section 5 and 6, respectively. Possible methodological improvements are also outlined for each instrument and initiative in section 6. By proposing linkages among the existing instruments, we finally present in section 7 a new methodological framework for sustainable consumption and production in the travel and tourism sector. This framework includes, *inter alia*, a new platform enabling travellers to plan eco-friendly holidays in Europe.

#### **2. Life Cycle Thinking: Key concepts and methodologies**

Life Cycle Thinking (LCT) is a quantitative approach which aims at taking into account all life cycle phases of a product (e.g. extraction of the raw materials, pre-production processes, production, consumption, end-of-life) in a broad range of methodologies and instruments for sustainability assessment and management (Azapagic & Clift, 1999; European Commission, 2010; Finnveden et al., 2009; Heiskanen, 2002; Hunkeler & Rebitzer, 2005;

Given the predictions of an increased role of tourism industries in the world economy, the environmental aspects of, and impacts generated by tourist activities should be accurately considered according to a Life Cycle Thinking (LCT) perspective. This concept has been extensively advocated as the proper way of addressing the challenges linked with sustainable development, and, in particular, with those measures for enhancing sustainable consumption and production. In the framework of sustainable development policies, the "Sustainable Consumption and Production and Sustainable Industrial Policy (SCP) Action

In line with this policy, a wide range of environmental instruments have been developed for assessment and labelling/certification purposes of travel and tourist services. This ongoing proliferation of different initiatives shows a high degree of diversity in terms of scope, assessment methodologies and means of communication. Although this proliferation reflects the vast variety of travel and tourist products as well as their complicated nature when it comes to the assessment of the environmental performance, these environmental instruments seem to suffer from a lack of integration and standardisation or quality control. This situation has the potential to confuse or even mislead travellers and the stakeholders

This implies three questions we seek to answer in this chapter. Firstly, what environmental instruments and initiatives are currently supporting the application of the European Sustainable Consumption and Production (SCP) Action Plan in the travel and tourism industry? Secondly, what are their key characteristics and how do they stand in relation to Life Cycle Assessment (LCA) principles? And thirdly, how can these instruments be combined into a general framework capable to render this industry low carbon and more

In this chapter, the topic will be introduced in the first sections. In particular, the key concepts of LCT and its supported methodologies are illustrated in section 2. More information on the application steps of the LCT-oriented environmental assessment methodology (i.e. LCA) is outlined in section 3. The meaning of life cycle in the tourism sector will be investigated in section 4. In order to answer the research questions, a review of the existing environmental instruments in the European travel and tourism industry was made. The review method applied and overview of the existing instruments and initiatives are the subjects of section 5 and 6, respectively. Possible methodological improvements are also outlined for each instrument and initiative in section 6. By proposing linkages among the existing instruments, we finally present in section 7 a new methodological framework for sustainable consumption and production in the travel and tourism sector. This framework includes, *inter alia*, a new platform enabling travellers to plan eco-friendly holidays in Europe.

Life Cycle Thinking (LCT) is a quantitative approach which aims at taking into account all life cycle phases of a product (e.g. extraction of the raw materials, pre-production processes, production, consumption, end-of-life) in a broad range of methodologies and instruments for sustainability assessment and management (Azapagic & Clift, 1999; European Commission, 2010; Finnveden et al., 2009; Heiskanen, 2002; Hunkeler & Rebitzer, 2005;

Plan" (European Commission, 2008) is a building block in the EU.

sustainable from an environmental point of view?

**2. Life Cycle Thinking: Key concepts and methodologies** 

within the industry.

Maxwell et al., 2006; Rebitzer & Buxmann, 2005; Rebitzer et al., 2004). Although LCT was initially conceived for products, it can also fit for services (De Camillis et al., 2008; Graedel, 1997; Petti & Tontodonati 2002; Raggi et al., 2008a, 2008b; Raggi & Petti 2006a; Raggi et al., 2005; Rosenblum et al., 2000). One of the major strengths of LCT is its comprehensiveness. This characteristic makes LCT a unique perspective to detect potential shifts of economic, environmental and social burdens from one phase of the life cycle to another, from a certain geographical area to another, and from one sustainability issue to another (European Commission, 2007; Finnveden et al., 2009).

Several LCT-based methodologies and instruments for sustainable development have already been developed so far. One of the most known is Life Cycle Assessment (LCA), a methodology to assess the potential environmental impact of a product/service in terms of individual environmental impact categories (e.g. global warming, human and environmental toxicity, natural resource depletion, ozone layer depletion, summer smog, etc.) and along its life cycle phases (Pennington et al., 2004; Rebitzer et al., 2004). In fact, all activities involved in a certain product's life cycle result in environmental impacts that in most cases are negative due to consumption of resources, and emissions of harmful substances into the natural environment. The LCA methodology has continued to develop and has become to some extent mature during the last decades. From the first conceptualisations (Heijungs et al., 1992; Consoli et al., 1993), LCA is now an internationally standardised methodology (ISO 14040:2006; ISO 14044:2006) recognised by the European Commission (2003) as the best tool for assessing the life cycle environmental impacts of products. While general guidelines for LCA have been issued by the European Commission (2010), many initiatives have been developing ad hoc sector- and product-specific methodologies.

Besides LCA, ecodesign is another LCT-based method. Ecodesign – also generally known as Design for Environment (DfE) or Life Cycle Design (LCD) – aims at preventing pollution by supporting product designers during the entire development process of products/services with regard to environmental choices (Fitzgerald et al., 2007; Vezzoli & Sciama, 2006). This method has been also standardised (ISO/TR 14062:2002).

Regarding environmental labelling, three types of options are regulated in international standards (ISO 14020:2000). In this context, considerations from LCA case studies are to be taken into account in setting up criteria for Type I environmental labels (ISO 14024:1999), such as e.g. the EU eco-label. A closer reference to LCA is found in those performanceoriented schemes enabling to come up with Type III environmental declarations (14025:2006), such as e.g. the Environmental Product Declaration (EPD) scheme (EPD, 2011). In these schemes, LCA is the methodology chosen for calculating the environmental performance of products. Finally, findings from LCA case studies might be used for selfdeclared claims, or Type II environmental labels (ISO 14021:1999).

In addition to product labelling options, pieces of information from LCA studies may be used for setting up and maintaining the Environmental Management Systems of those organisations certified or on the way to be certified according to ISO 14001:2004 or EMAS. Equally, findings from LCA case studies may be used for Integrated Management Systems (PAS 99:2006).

Tourism Life Cycle Assessment (LCA):

and provides some conclusions.

**4. Tourism Life Cycle Assessment in a nutshell** 

**4.1 Identifying the object of the analysis: The tourist product** 

different actors and may be incidental to "non-economic" activities.

Proposal of a New Methodological Framework for Sustainable Consumption and Production 251

Finally, the Life Cycle Interpretation step aims to evaluate the outputs of the LCI and the LCIA steps along the LCA application procedure. This step basically comes up with considerations in relation to the goal and scope of the study, highlights the study limitations

According to a preliminary survey on the use of LCA in the tourism industry (Raggi et al., 2005; Raggi & Petti, 2006b), LCA is still uncommon within the tourism industry and for researchers in the field of Sustainable Tourism (Bramwell & Lane, 2008; Hunter and Shaw, 2007). In order to gain a better understanding of the reasons for such a limited diffusion of LCA and to evaluate the need of specific LCA guidelines for the tourism sector, a critical review of the existing LCA case studies in the sector was carried out by De Camillis et al. (2010a). Furthermore, a case study was conducted on the services provided by an Italian hotel by De Camillis et al. (2010b). In the following section the findings of such efforts are reported to highlight the object of tourism LCA studies, and what life cycle means in this context.

According to the United Nations World Tourism Organization (UNWTO, 2008), "tourism comprises the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes". Even if in the scientific community there is no general consensus on the definition of tourism as a distinct industry (Leiper, 2008; Chadwick, 1994), it can be argued that tourism is a conglomerate of products distinguishable from other industries (Lew et al., 2004). In fact, tourism output is not a simple product but, rather, a wide range of goods and services interacting to fulfil a tourist experience that comprises both tangible parts (e.g. hotel, restaurant, airline) and intangible aspects (e.g. sunset, scenery, mood) (Debbage & Daniels, 1998). The actual purchase and consumption/production of tourist services (e.g. airline ticket, meal, admission ticket) may often be incidental to "non-market" activities, such as independent sightseeing, hiking, or sunbathing (Lew et al., 2004). According to Judd (2006), the actual product of tourism is the tourist's experience which is generated by several social and economic actors. Middleton (1989) observes that the term "tourist product" is used at two different levels: the "specific" level (i.e. a discrete product offered by a single business, such as a sightseeing tour or an airline seat) and the "total" level (i.e. the complete experience of a tourist from the time one leaves home to the time one returns). From these considerations, it can be deduced that a tourist's experience is the outcome of a tourist product at a "total" level. Such a product can be seen as a system whose components (products and services) are the tourist products at a "specific" level, which are provided by

Such actors can vary according to the specific forms of tourist experience concerned (e.g. coastal, urban, cultural, winter, rural). If a tourism form is considered to be a type of tourist experience commoditisation (Graburn, 2004), or in other words a tourist product at a "total" level, several categories of tourist operators can be identified for each tourism form. An inventory of tourist products in the context of certain tourism forms have been created by De Camillis et al. (2010d). For instance, those services delivered by the following organisations can be indexed as tourist products of the cultural tourism form: museum, art

Regarding the economic pillar of sustainability, Life Cycle Costing (LCC) is the reference methodology to investigate costs along the life cycle of products and services (Krozer, 2008; Norris, 2001; Rebitzer & Hunkeler, 2003; Rebitzer & Seuring, 2003; Spengler & Stolting, 2008). Recently, significant efforts to create an LCT-based methodology to assess some social issues have been made by several researchers (Grießhammer et al., 2006; Hauschild et al., 2008; Hunkeler, 2006; Jørgensen et al., 2008; Weidema, 2005; UNEP, 2009). Yet, if compared with the current maturity level of LCA, we must admit that a Societal LCA is still in its infancy. Finally, an overarching LCT-methodology to assess the overall performance of products against the issues related to the three dimensions of sustainability has been conceived by Kloepffer (2008).

#### **3. Life Cycle Assessment: Stepwise application**

According to ISO 14040:2006 and ISO 14044:2006, the procedure to apply LCA is composed of four steps: goal and scope definition, Life Cycle Inventory analysis (LCI), Life Cycle Impact Assessment (LCIA), and Life Cycle Interpretation.

The goal and scope of an LCA study identifies, *inter alia*, the objectives and provides a comprehensive description of the system analysed in terms of "functional unit" and "system boundaries". According to ISO 14044:2006, a "functional unit" is a quantified performance of a product/service system for use as a reference unit of the analysis, and "system boundaries" are unit processes linked each other to perform one or more defined functions. In addition to this, the environmental impact categories and assessment methods are selected in this LCA step according to the purpose of the study.

Right after the goal and scope definition step, LCA practitioners compile an inventory of the environmental loads potentially occurring along the product life cycle phases. These environmental loads basically consist of: consumption of resources, waterborne and airborne emissions, releases into the soil, and waste streams. In this context, such an inventory is called Life Cycle Inventory (LCI). Collecting and elaborating data in LCIs, and fine-tuning LCIs form the second LCA application step called Life Cycle Inventory analysis (LCI).

On the basis of the LCI of the product system analysed, practitioners run the Life Cycle Impact Assessment step (LCIA) to come out with indicators expressing the potential environmental performance of the overall system analysed. More specifically, LCIA includes the following steps: associating environmental loads to the selected impact categories (classification step); calculating figures of the impact category indicators selected in the goal and scope definition (characterization step).

Besides the above-mentioned steps, the following steps are optional:


Finally, the Life Cycle Interpretation step aims to evaluate the outputs of the LCI and the LCIA steps along the LCA application procedure. This step basically comes up with considerations in relation to the goal and scope of the study, highlights the study limitations and provides some conclusions.

#### **4. Tourism Life Cycle Assessment in a nutshell**

250 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Regarding the economic pillar of sustainability, Life Cycle Costing (LCC) is the reference methodology to investigate costs along the life cycle of products and services (Krozer, 2008; Norris, 2001; Rebitzer & Hunkeler, 2003; Rebitzer & Seuring, 2003; Spengler & Stolting, 2008). Recently, significant efforts to create an LCT-based methodology to assess some social issues have been made by several researchers (Grießhammer et al., 2006; Hauschild et al., 2008; Hunkeler, 2006; Jørgensen et al., 2008; Weidema, 2005; UNEP, 2009). Yet, if compared with the current maturity level of LCA, we must admit that a Societal LCA is still in its infancy. Finally, an overarching LCT-methodology to assess the overall performance of products against the issues related to the three dimensions of sustainability has been

According to ISO 14040:2006 and ISO 14044:2006, the procedure to apply LCA is composed of four steps: goal and scope definition, Life Cycle Inventory analysis (LCI), Life Cycle

The goal and scope of an LCA study identifies, *inter alia*, the objectives and provides a comprehensive description of the system analysed in terms of "functional unit" and "system boundaries". According to ISO 14044:2006, a "functional unit" is a quantified performance of a product/service system for use as a reference unit of the analysis, and "system boundaries" are unit processes linked each other to perform one or more defined functions. In addition to this, the environmental impact categories and assessment methods are

Right after the goal and scope definition step, LCA practitioners compile an inventory of the environmental loads potentially occurring along the product life cycle phases. These environmental loads basically consist of: consumption of resources, waterborne and airborne emissions, releases into the soil, and waste streams. In this context, such an inventory is called Life Cycle Inventory (LCI). Collecting and elaborating data in LCIs, and fine-tuning LCIs form

On the basis of the LCI of the product system analysed, practitioners run the Life Cycle Impact Assessment step (LCIA) to come out with indicators expressing the potential environmental performance of the overall system analysed. More specifically, LCIA includes the following steps: associating environmental loads to the selected impact categories (classification step); calculating figures of the impact category indicators selected

 normalization step - the results of the characterization step are normalised to certain reference values (e.g. average environmental pressure of a typical European citizen); grouping - normalised results are sorted according to the characteristics of the impact categories (e.g. global versus regional scale) or/and ranked according to their

weighting step - normalised results are weighted by some importance scores associated

conceived by Kloepffer (2008).

**3. Life Cycle Assessment: Stepwise application** 

Impact Assessment (LCIA), and Life Cycle Interpretation.

selected in this LCA step according to the purpose of the study.

in the goal and scope definition (characterization step).

to each environmental issue by a certain body.

relevancy;

the second LCA application step called Life Cycle Inventory analysis (LCI).

Besides the above-mentioned steps, the following steps are optional:

According to a preliminary survey on the use of LCA in the tourism industry (Raggi et al., 2005; Raggi & Petti, 2006b), LCA is still uncommon within the tourism industry and for researchers in the field of Sustainable Tourism (Bramwell & Lane, 2008; Hunter and Shaw, 2007). In order to gain a better understanding of the reasons for such a limited diffusion of LCA and to evaluate the need of specific LCA guidelines for the tourism sector, a critical review of the existing LCA case studies in the sector was carried out by De Camillis et al. (2010a). Furthermore, a case study was conducted on the services provided by an Italian hotel by De Camillis et al. (2010b). In the following section the findings of such efforts are reported to highlight the object of tourism LCA studies, and what life cycle means in this context.

#### **4.1 Identifying the object of the analysis: The tourist product**

According to the United Nations World Tourism Organization (UNWTO, 2008), "tourism comprises the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes". Even if in the scientific community there is no general consensus on the definition of tourism as a distinct industry (Leiper, 2008; Chadwick, 1994), it can be argued that tourism is a conglomerate of products distinguishable from other industries (Lew et al., 2004). In fact, tourism output is not a simple product but, rather, a wide range of goods and services interacting to fulfil a tourist experience that comprises both tangible parts (e.g. hotel, restaurant, airline) and intangible aspects (e.g. sunset, scenery, mood) (Debbage & Daniels, 1998). The actual purchase and consumption/production of tourist services (e.g. airline ticket, meal, admission ticket) may often be incidental to "non-market" activities, such as independent sightseeing, hiking, or sunbathing (Lew et al., 2004). According to Judd (2006), the actual product of tourism is the tourist's experience which is generated by several social and economic actors. Middleton (1989) observes that the term "tourist product" is used at two different levels: the "specific" level (i.e. a discrete product offered by a single business, such as a sightseeing tour or an airline seat) and the "total" level (i.e. the complete experience of a tourist from the time one leaves home to the time one returns). From these considerations, it can be deduced that a tourist's experience is the outcome of a tourist product at a "total" level. Such a product can be seen as a system whose components (products and services) are the tourist products at a "specific" level, which are provided by different actors and may be incidental to "non-economic" activities.

Such actors can vary according to the specific forms of tourist experience concerned (e.g. coastal, urban, cultural, winter, rural). If a tourism form is considered to be a type of tourist experience commoditisation (Graburn, 2004), or in other words a tourist product at a "total" level, several categories of tourist operators can be identified for each tourism form. An inventory of tourist products in the context of certain tourism forms have been created by De Camillis et al. (2010d). For instance, those services delivered by the following organisations can be indexed as tourist products of the cultural tourism form: museum, art

Tourism Life Cycle Assessment (LCA):

*1. Pre-departure activities: Information acquiring, booking* 

*2. Transport* 

*3. Accommodation* 

Fig. 1. Life cycle of tourist experience

following elements should be considered:

Proposal of a New Methodological Framework for Sustainable Consumption and Production 253

Both these tourist operators and manufacturers assemble "specific" products as components of "total" branded new products. Like those manufacturing companies which are asked to be in line with the principle of Extended Producer Responsibility (EPR)1, travel agencies and tour operators are also increasingly responsible for the impacts of all components of the tourist products they sell, including use of raw materials, processing and production, as well as impacts from transport and distribution (Tapper & Font, 2004). In other words, all "specific" tourist products that contribute to the tourist experience should be included in the system boundaries whenever the assembled product named package holiday is studied.

When the system boundary of specific tourist products is studied individually, the

*5. Transport* 

*6. Post-return activities*

 Consumables and services needed to run the business. For example, when accommodation services are analysed, consumables such as soap, shampoo and other amenities available in the bedrooms for guests should be included in the system boundary. Moreover, supporting services such as e.g. surface cleaning, energy and

<sup>1</sup> EPR focuses on products, and makes producers responsible not only for their own production stage, but also for the whole life cycle of a product. This is based on the assumption that producers have the capacity to (re)design their products to avoid or reduce the related environmental impacts (Li & Geiser, 2004). EPR has been adopted in many OECD countries, as well as in the European Union regulation for packaging waste, end-of-life vehicles, and electrical and electronic equipment waste (Mayers, 2007).

water supply, and waste treatment should be also included;

*4. Tourist activities* 

gallery, exhibition, theatre, concert hall, fair, souvenir shop, tourist organisations involved in sightseeing and guided tours, restaurant, fast food, snack bar.

Apart from the actors mentioned additionally some intermediaries are involved in the tourism production and distribution. Buhalis and Laws (2001) recognise three different types of intermediaries, i.e. outgoing travel agencies (retailers), tour operators (wholesalers) and incoming travel agencies based at destinations (handling). In particular, an outgoing travel agency serves as sales channel for tourist specific activities and wholesalers, generally transport tickets, accommodations and packages from tour operators. Tour operators buy individual tourist services (e.g. transport and accommodation) from their suppliers (e.g. carriers and hotels) and assemble them into holiday packages (Ujma, 2001). Finally, incoming travel agencies plan tour packages on a destination level and act as intermediary between tour operator and specific tourist activities (Buhalis & Laws, 2001), but also sell to individual tourists that do not travel through a tour operator. Indeed, nowadays, also thanks to the Internet, travellers may buy various transport and tourist products at a "specific" level directly from producers or through intermediaries. Tourists also often use various distribution channels for one holiday. For example, they could use an outgoing travel agent for a 'seat only' charter product, and autonomously book accommodation, restaurants and other tourist services (Buhalis & Laws, 2001).

#### **4.2 Understanding the life cycle of tourist products**

From the previous section we learnt that tourism is a complicated system due to the large number of goods and supporting services involved in it. Furthermore, describing the sector is complicated as, scientifically, there is an on-going debate about the definition of tourism. Therefore, applying LCA to calculate the environmental performance of tourist products is often problematic. In particular, these drawbacks have major implications in the "goal and scope definition" step.

As far as holidays are concerned, the boundary of the system to be analysed has been set up in a similar manner across LCA case studies (Chambers, 2004; Corsico, 2007; Sisman, 1994; UK CEED, 1998), ecological footprint studies (Hunter & Shaw, 2007; Peeters & Schouten, 2005), and researches on greenhouse gas (GHGs) emissions (Becken & Hay, 2007; Peeters et al., 2009; UNWTO UNEP WMO, 2008). In particular, Chamber's "door to door" approach (Chamber, 2004), which includes all steps from departure to return back home, was adopted in many cases. Still, the system boundaries of an entire holiday should be defined on a caseby-case basis by considering a tourist experience life cycle (see Figure 1). According to Middleton (1989), a tourist experience generally starts, right after a process of information acquisition, with a booking phase. Before departure, a number of pre-departure activities may take place (e.g. vaccinations, purchase or rental of goods — e.g. clothes — for the holiday). The transport phase includes all movements carried out by tourists from departure to their return home. At destinations, accommodations receive guests for one or more nights, restaurants offer food services and leisure enterprises offer tourist activities. Public services and other supporting services should also be considered to be part of the tourist experience. After the return at home, a final phase includes all the activities to restart the everyday life.

Even if the tourist experience life cycle presented in Figure 1 can be a useful template to study some tourism forms, further considerations are needed for package holidays. In fact, travel agencies and tour operators may be found quite similar to manufacturing companies. Both these tourist operators and manufacturers assemble "specific" products as components of "total" branded new products. Like those manufacturing companies which are asked to be in line with the principle of Extended Producer Responsibility (EPR)1, travel agencies and tour operators are also increasingly responsible for the impacts of all components of the tourist products they sell, including use of raw materials, processing and production, as well as impacts from transport and distribution (Tapper & Font, 2004). In other words, all "specific" tourist products that contribute to the tourist experience should be included in the system boundaries whenever the assembled product named package holiday is studied.

Fig. 1. Life cycle of tourist experience

252 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

gallery, exhibition, theatre, concert hall, fair, souvenir shop, tourist organisations involved

Apart from the actors mentioned additionally some intermediaries are involved in the tourism production and distribution. Buhalis and Laws (2001) recognise three different types of intermediaries, i.e. outgoing travel agencies (retailers), tour operators (wholesalers) and incoming travel agencies based at destinations (handling). In particular, an outgoing travel agency serves as sales channel for tourist specific activities and wholesalers, generally transport tickets, accommodations and packages from tour operators. Tour operators buy individual tourist services (e.g. transport and accommodation) from their suppliers (e.g. carriers and hotels) and assemble them into holiday packages (Ujma, 2001). Finally, incoming travel agencies plan tour packages on a destination level and act as intermediary between tour operator and specific tourist activities (Buhalis & Laws, 2001), but also sell to individual tourists that do not travel through a tour operator. Indeed, nowadays, also thanks to the Internet, travellers may buy various transport and tourist products at a "specific" level directly from producers or through intermediaries. Tourists also often use various distribution channels for one holiday. For example, they could use an outgoing travel agent for a 'seat only' charter product, and autonomously book accommodation,

From the previous section we learnt that tourism is a complicated system due to the large number of goods and supporting services involved in it. Furthermore, describing the sector is complicated as, scientifically, there is an on-going debate about the definition of tourism. Therefore, applying LCA to calculate the environmental performance of tourist products is often problematic. In particular, these drawbacks have major implications in the "goal and

As far as holidays are concerned, the boundary of the system to be analysed has been set up in a similar manner across LCA case studies (Chambers, 2004; Corsico, 2007; Sisman, 1994; UK CEED, 1998), ecological footprint studies (Hunter & Shaw, 2007; Peeters & Schouten, 2005), and researches on greenhouse gas (GHGs) emissions (Becken & Hay, 2007; Peeters et al., 2009; UNWTO UNEP WMO, 2008). In particular, Chamber's "door to door" approach (Chamber, 2004), which includes all steps from departure to return back home, was adopted in many cases. Still, the system boundaries of an entire holiday should be defined on a caseby-case basis by considering a tourist experience life cycle (see Figure 1). According to Middleton (1989), a tourist experience generally starts, right after a process of information acquisition, with a booking phase. Before departure, a number of pre-departure activities may take place (e.g. vaccinations, purchase or rental of goods — e.g. clothes — for the holiday). The transport phase includes all movements carried out by tourists from departure to their return home. At destinations, accommodations receive guests for one or more nights, restaurants offer food services and leisure enterprises offer tourist activities. Public services and other supporting services should also be considered to be part of the tourist experience. After the

return at home, a final phase includes all the activities to restart the everyday life.

Even if the tourist experience life cycle presented in Figure 1 can be a useful template to study some tourism forms, further considerations are needed for package holidays. In fact, travel agencies and tour operators may be found quite similar to manufacturing companies.

in sightseeing and guided tours, restaurant, fast food, snack bar.

restaurants and other tourist services (Buhalis & Laws, 2001).

**4.2 Understanding the life cycle of tourist products** 

scope definition" step.

When the system boundary of specific tourist products is studied individually, the following elements should be considered:

 Consumables and services needed to run the business. For example, when accommodation services are analysed, consumables such as soap, shampoo and other amenities available in the bedrooms for guests should be included in the system boundary. Moreover, supporting services such as e.g. surface cleaning, energy and water supply, and waste treatment should be also included;

 <sup>1</sup> EPR focuses on products, and makes producers responsible not only for their own production stage, but also for the whole life cycle of a product. This is based on the assumption that producers have the capacity to (re)design their products to avoid or reduce the related environmental impacts (Li & Geiser, 2004). EPR has been adopted in many OECD countries, as well as in the European Union regulation for packaging waste, end-of-life vehicles, and electrical and electronic equipment waste (Mayers, 2007).

Tourism Life Cycle Assessment (LCA):

*Reference:* Kusters, 2004;

*Major improvement proposals:* 

structures and camp sites;

Travel agencies and tour operators;

*Users:* Accommodation structures and campsites;

than the EU scheme have been disseminating;

appointed by the European Commission;

*Reference:* European Commission, 2009; European Parliament, 2008;

*Key limitations:* 

**EU eco-label** 

through tour operators and travel agencies;

Kuoni, First Choice, Virgin Holidays, Cosmos); *Websites:* www.its4travel.com, www.travelife.eu;

management strategy can foster sustainability in tourism;

do not actually address the main environmental hot spots;


Proposal of a New Methodological Framework for Sustainable Consumption and Production 255

*Users:* Tour operators and their suppliers: accommodation structures, restaurants, other tourist companies (e.g. providers of tourist activities, such as excursions, leisure, sightseeing, etc.);

*Final stakeholder:* Those tourists who use to book tourist services and whole holiday packages

*Current dissemination:* Pretty widespread amongst tour operators (e.g. TUI, Thomas Cook,

*Project funding detail:* EU LIFE programme, LIFE04 ENV/NL/000661, Tour-Link project -

Demonstrating how an integrated eco-labeling and tour operating supply chain



*What it is*: Type I Environmental label (ISO 14024:1999) eco-label for accommodation

*Final stakeholder:* Those tourists who use to book tourist accommodation autonomously;

*Current dissemination:* More than 300 accommodation structures and 70 campsites have been labelled so far in the EU. In several European Countries, many tourist eco-labels different

*Websites:* http://ec.europa.eu/environment/eco-label/index\_en.htm, www.eco-label.com

*Project funding detail:* ANPA (The Italian Environmental Agency, now called ISPRA) was

into account the findings of a representative number of LCA case studies; - Suppliers of passenger transport should be included in the scope of the initiative; - Reporting the environmental performance of the labelled services may facilitate the

continuous improvement of suppliers' environmental performance; - Tour operators should be audited in order to monitor their improvement path.


Given the large number of services and goods involved in delivering a certain tourist service, simplifications of the system boundary are often needed. Each time a system boundary is simplified by excluding some goods and services from the life cycle of the tourist product analysed, the environmental significance of the excluded unit processes should be assessed case by case by using estimations and extrapolated data.

#### **5. Method**

As the scope of this research was bounded to Europe, sector-specific instruments for sustainable consumption and production in the travel and tourism industry were searched by consulting:


The environmental instruments and initiatives found relevant for the purpose of the research have been screened according to their focus and scope, current dissemination, and how they stand in relation to the LCA principles. On the basis of this screening review, key elements of the methodological framework used as well as limitations and envisaged improvements were detected for each instrument/initiative. Major results of this analysis are shown in the overview reported in section 6. Potential synergies amongst instruments and initiatives were identified with the aim of coming out with a general methodological framework. Section 7 presents the results of this analysis by showing, *inter alia*, how a new platform enabling travellers to plan eco-friendly holidays in Europe could look like.

#### **6. Overview of environmental instruments and initiatives**

The following sector-specific environmental instruments and initiatives were screened because found relevant to build up a new framework for sustainable consumption and production in the travel and tourism sector.

#### **Travelife**

*What it is*: A sustainability management system for tour operators which includes an ecolabelling scheme to qualify tour operator's suppliers (e.g. hotel, holiday village, restaurant);

*Users:* Tour operators and their suppliers: accommodation structures, restaurants, other tourist companies (e.g. providers of tourist activities, such as excursions, leisure, sightseeing, etc.);

*Final stakeholder:* Those tourists who use to book tourist services and whole holiday packages through tour operators and travel agencies;

*Current dissemination:* Pretty widespread amongst tour operators (e.g. TUI, Thomas Cook, Kuoni, First Choice, Virgin Holidays, Cosmos);

*Websites:* www.its4travel.com, www.travelife.eu;

*Reference:* Kusters, 2004;

*Project funding detail:* EU LIFE programme, LIFE04 ENV/NL/000661, Tour-Link project -

Demonstrating how an integrated eco-labeling and tour operating supply chain management strategy can foster sustainability in tourism;

#### *Key limitations:*

254 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

 Capital goods such as e.g. furniture and buildings (e.g. construction, operation, maintenance, demolition/renovation) should be included within the system boundary if their impact is non-negligible. For instance, data concerning the life-cycle-based GHGs emissions of hotel buildings (Floridia, 2007; Sesartic & Stucki, 2007) suggest that the building-related environmental loads should be considered in the LCA of

 Those tourist products along the tourist experience life cycle (see Figure 1) on which the tourist organisation analysed may have a certain influence. For instance, transport services should be included in the system boundary when accommodation services are studied. Hoteliers, in fact, may induce their guests to reach their own structures by

Given the large number of services and goods involved in delivering a certain tourist service, simplifications of the system boundary are often needed. Each time a system boundary is simplified by excluding some goods and services from the life cycle of the tourist product analysed, the environmental significance of the excluded unit processes

As the scope of this research was bounded to Europe, sector-specific instruments for sustainable consumption and production in the travel and tourism industry were searched

 Web-sites of networks for sustainable tourism development, such as the Tour Operators Initiative (www.toinitiative.org), Ecotrans – European Network for Sustainable Tourism Development (www.ecotrans.org), and the DestiNet portal – UN Partnership for

The environmental instruments and initiatives found relevant for the purpose of the research have been screened according to their focus and scope, current dissemination, and how they stand in relation to the LCA principles. On the basis of this screening review, key elements of the methodological framework used as well as limitations and envisaged improvements were detected for each instrument/initiative. Major results of this analysis are shown in the overview reported in section 6. Potential synergies amongst instruments and initiatives were identified with the aim of coming out with a general methodological framework. Section 7 presents the results of this analysis by showing, *inter alia*, how a new

EU-founded projects (e.g. LIFE+ project registry) and linked scientific literature;

platform enabling travellers to plan eco-friendly holidays in Europe could look like.

The following sector-specific environmental instruments and initiatives were screened because found relevant to build up a new framework for sustainable consumption and

*What it is*: A sustainability management system for tour operators which includes an ecolabelling scheme to qualify tour operator's suppliers (e.g. hotel, holiday village, restaurant);

**6. Overview of environmental instruments and initiatives** 

production in the travel and tourism sector.

offering discounts when eco-friendly transport modes are chosen.

should be assessed case by case by using estimations and extrapolated data.

Sustainable Development (http://destinet.eu/).

accommodation services;

**5. Method** 

by consulting:

**Travelife** 


*Major improvement proposals:* 


#### **EU eco-label**

*What it is*: Type I Environmental label (ISO 14024:1999) eco-label for accommodation structures and camp sites;

*Users:* Accommodation structures and campsites;

*Final stakeholder:* Those tourists who use to book tourist accommodation autonomously; Travel agencies and tour operators;

*Current dissemination:* More than 300 accommodation structures and 70 campsites have been labelled so far in the EU. In several European Countries, many tourist eco-labels different than the EU scheme have been disseminating;

*Websites:* http://ec.europa.eu/environment/eco-label/index\_en.htm, www.eco-label.com

*Reference:* European Commission, 2009; European Parliament, 2008;

*Project funding detail:* ANPA (The Italian Environmental Agency, now called ISPRA) was appointed by the European Commission;

Tourism Life Cycle Assessment (LCA):

*Users:* Tourist accommodation structures;

label - www.oe-plus.ch; and so forth.

with their recognisability by tourists;

*Users:* Tourist accommodation structures;

agencies and tour operators;

*Reference:* Hamele et al., 2004;

towards sustainability;

*Key limitations:* 

*Current dissemination:* slightly widespread at the regional scale;

*References:* Buckley, 2002; Font, 2002; Font & Buckley, 2001; Sloan et al., 2009; *Project funding detail:* Many regional scale projects have been carried out so far;

label, and many others);

agencies and tour operators;

*Major improvement proposal:* 

tourism sector.

**Visit** 

*Key limitations:* 

Proposal of a New Methodological Framework for Sustainable Consumption and Production 257

dissemination (e.g. Viabono, Legambiente Turismo, The Green Key, Milieubarometer, Ibex

*Final stakeholder:* Those tourists who use to book their own holidays autonomously; Travel

*Websites:* Viabono - www.viabono.de; Legambiente Turismo - www.legambienteturismo.it; The Green Key - www.green-key.org; Milieubarometer - www.milieubarometer.nl; Ibex




*What it is*: The Voluntary Initiative for Sustainability in Tourism (Visit) is a technical standard setting up the framework according to which credible tourism eco-labels should operate in Europe. The purpose of this initiative was, therefore, to put together tourist labeling under a unique umbrella, also to increase the label recognisability by tourists. Visit

*Final stakeholder:* Those tourists who use to book their own holidays autonomously; Travel

*Project funding detail:* LIFE00 ENV/NL/000810, Visit project - Eco-labels for Sustainable Tourism in Europe: demonstrating how eco-labels can move the European tourism market

*Current dissemination:* Twelve eco-label schemes have joined the Visit initiative so far;

is also the name of the association which manages such a standard.

*Websites:* www.visit21.net; www.ecotrans.org/visit/index.html;

*Key limitations:* 


#### *Major improvement proposal:*


#### **Blue Flag**

*What it is*: a voluntary award for tourist destinations such as beaches and marinas;

#### *Users:* Municipalities;

#### *Final stakeholder*: Tourists;

*Current dissemination:* According to the Blue Flag web-site, in 2011 approximately 3650 beaches and marinas in 46 countries (across Europe, South Africa, Morocco, Tunisia, New Zealand, Brazil, Canada and the Caribbean) were awarded the Blue Flag;

*Websites:* www.blueflag.org ;

#### *Reference*: FEE, 2011;

*Project funding detail:* The Foundation for Environmental Education in Europe (FEEE) presented in 1987 the concept of the Blue Flag to the European Commission, and it was agreed to launch the Blue Flag Programme as one of several "European Year of the Environment" activities in the Community;

*Key limitations:* 


#### *Major improvement proposals:*


#### **Other tourist environmental labels**

*What it is*: Environmental labels and declarations of tourist services. Most labels are "Type I Environmental labels" (ISO 14024:1999) and are characterised by a regional scale dissemination (e.g. Viabono, Legambiente Turismo, The Green Key, Milieubarometer, Ibex label, and many others);

*Users:* Tourist accommodation structures;

*Final stakeholder:* Those tourists who use to book their own holidays autonomously; Travel agencies and tour operators;

*Current dissemination:* slightly widespread at the regional scale;

*Websites:* Viabono - www.viabono.de; Legambiente Turismo - www.legambienteturismo.it; The Green Key - www.green-key.org; Milieubarometer - www.milieubarometer.nl; Ibex label - www.oe-plus.ch; and so forth.

*References:* Buckley, 2002; Font, 2002; Font & Buckley, 2001; Sloan et al., 2009;

*Project funding detail:* Many regional scale projects have been carried out so far;

#### *Key limitations:*

256 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies




*Current dissemination:* According to the Blue Flag web-site, in 2011 approximately 3650 beaches and marinas in 46 countries (across Europe, South Africa, Morocco, Tunisia, New

*Project funding detail:* The Foundation for Environmental Education in Europe (FEEE) presented in 1987 the concept of the Blue Flag to the European Commission, and it was agreed to launch the Blue Flag Programme as one of several "European Year of the



*What it is*: Environmental labels and declarations of tourist services. Most labels are "Type I Environmental labels" (ISO 14024:1999) and are characterised by a regional scale

*What it is*: a voluntary award for tourist destinations such as beaches and marinas;

Zealand, Brazil, Canada and the Caribbean) were awarded the Blue Flag;

tourists. The Visit initiative tried to overcome this limitation.

*Key limitations:* 

schemes;

*Major improvement proposal:* 

tourism sector.

*Users:* Municipalities;

*Reference*: FEE, 2011;

*Key limitations:* 

*Final stakeholder*: Tourists;

*Websites:* www.blueflag.org ;

*Major improvement proposals:* 

Environment" activities in the Community;

criteria seem to be more related to quality issues;

resorts other than beaches and marinas.

**Other tourist environmental labels** 


**Blue Flag** 


*Major improvement proposal:* 


#### **Visit**

*What it is*: The Voluntary Initiative for Sustainability in Tourism (Visit) is a technical standard setting up the framework according to which credible tourism eco-labels should operate in Europe. The purpose of this initiative was, therefore, to put together tourist labeling under a unique umbrella, also to increase the label recognisability by tourists. Visit is also the name of the association which manages such a standard.

*Users:* Tourist accommodation structures;

*Final stakeholder:* Those tourists who use to book their own holidays autonomously; Travel agencies and tour operators;

*Current dissemination:* Twelve eco-label schemes have joined the Visit initiative so far;

*Websites:* www.visit21.net; www.ecotrans.org/visit/index.html;

*Reference:* Hamele et al., 2004;

*Project funding detail:* LIFE00 ENV/NL/000810, Visit project - Eco-labels for Sustainable Tourism in Europe: demonstrating how eco-labels can move the European tourism market towards sustainability;

*Key limitations:* 

Tourism Life Cycle Assessment (LCA):

*Final stakeholder*: Travellers;

*Reference:* Knörr, 2008;

*Key limitations:* 

*Current dissemination*: Unknown; *Website:* www.ecopassenger.com;

transport modes: railway, car and airplane;


**7. Proposal for a new methodological framework** 

infrastructures and vehicles;

environmental indicators;

(European Commission, 2010).

Key elements of this framework are:

LCI database paragraph.

and destinations. *Major improvement proposals:* 

Proposal of a New Methodological Framework for Sustainable Consumption and Production 259






To figure out if instruments are able to support each other and gain mutual benefits, potential synergies were investigated amongst: the existing sector-specific environmental instruments shown in section 6, an eco-design methodology for services (De Camillis et al., 2010c), and environmental performance-based declaration schemes (e.g. the forthcoming European Commission's Product Environmental Footprint, and the International EPD System). On this basis, a new methodological framework for sustainable consumption and



production in the travel and tourism industry was developed (see Figure 2).

*Project funding detail:* Project funded by the International Union of Railways (UIC);


#### *Major improvement proposals:*


#### **TourBench**

*What it is*: A free European monitoring and benchmarking online tool to reduce the environmental burden and costs of tourist accommodation organisations;

*Users:* Hotels and campsites;

*Final stakeholder:* Hotels and campsites;

Current dissemination: Unknown;

*Website:* http://destinet.eu/tools/measurement\_instruments/tb-01-en-pub.pdf;

*References:* Hamele & Eckardt, 2007; Hamele & van der Burgh, 2006;

*Project funding detail:* LIFE programme, LIFE03 ENV/NL/000473, European Monitor and Benchmarking Initiative for Environmental Impacts and Costs in Tourist Accommodation;

#### *Key limitations:*


#### *Major improvement proposals:*


#### **EcoPassenger**

*What it is*: A user-friendly internet tool to cross-compare energy consumption, CO2 and other airborne emissions of alternative transport modes (e.g. planes, cars and trains) for travelling all around Europe;

*Users:* Travellers;

*Final stakeholder*: Travellers;

*Current dissemination*: Unknown;

*Website:* www.ecopassenger.com;

*Reference:* Knörr, 2008;

*Project funding detail:* Project funded by the International Union of Railways (UIC);

#### *Key limitations:*

258 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies






*What it is*: A free European monitoring and benchmarking online tool to reduce the

*Project funding detail:* LIFE programme, LIFE03 ENV/NL/000473, European Monitor and Benchmarking Initiative for Environmental Impacts and Costs in Tourist Accommodation;





*What it is*: A user-friendly internet tool to cross-compare energy consumption, CO2 and other airborne emissions of alternative transport modes (e.g. planes, cars and trains) for

a bit obscure how environmental hot-spots have been identified so far;

should become a mandatory requirement in the Visit standard;

environmental burden and costs of tourist accommodation organisations;

*Website:* http://destinet.eu/tools/measurement\_instruments/tb-01-en-pub.pdf;


*References:* Hamele & Eckardt, 2007; Hamele & van der Burgh, 2006;

providers nor related prices are included in the tool;

thus jeopardising traveller satisfaction.

*Major improvement proposals:* 

*Users:* Hotels and campsites;

*Final stakeholder:* Hotels and campsites; Current dissemination: Unknown;

**TourBench** 

*Key limitations:* 

cycles. **EcoPassenger** 

*Users:* Travellers;

perspective;

*Major improvement proposals:* 

travelling all around Europe;

the schemes to get in Visit;

the existing eco-labels with Visit's logo.


#### *Major improvement proposals:*


#### **7. Proposal for a new methodological framework**

To figure out if instruments are able to support each other and gain mutual benefits, potential synergies were investigated amongst: the existing sector-specific environmental instruments shown in section 6, an eco-design methodology for services (De Camillis et al., 2010c), and environmental performance-based declaration schemes (e.g. the forthcoming European Commission's Product Environmental Footprint, and the International EPD System). On this basis, a new methodological framework for sustainable consumption and production in the travel and tourism industry was developed (see Figure 2).

Key elements of this framework are:


Tourism Life Cycle Assessment (LCA):

services). This might be possible if:

combined);

Proposal of a New Methodological Framework for Sustainable Consumption and Production 261

envisaged. This instrument has the potential to help travellers in planning eco-friendly holidays "from door to door" by indicating the most environmentally-sound destinations, organisations and solutions (i.e transport modes, accommodation services and other tourist



out results according to their environmental performance.

Fig. 2. A possible suite of LCA-based tools for eco-friendly holidays

this way, all tourist organisations are able to quantify the environmental performance of their own tourist products in terms of environmental footprint, and to detect options for improvement by comparing the environmental performance of their own products against a benchmark representing the average environmental performance of the whole product group. This is the product environmental footprint calculator that we proposed above for eco-label assessments. If developed according to a common set of methodological guidelines, this calculator may produce data for environmental labels to compare the environmental performance of tourist products and destinations in a consistent and scientifically sound manner.


If the changes proposed above were implemented, the newly developed methodological framework would be able to support sustainable production and consumption instruments and initiatives in the travel and tourism sector.

In particular, if Figure 2 is read from the top, tourist organisations have the potential to:


If Figure 2 is read from the bottom, the sustainable consumption side of the methodological framework can be identified. In particular, a platform to plan eco-friendly holidays is


If the changes proposed above were implemented, the newly developed methodological framework would be able to support sustainable production and consumption instruments



If Figure 2 is read from the bottom, the sustainable consumption side of the methodological framework can be identified. In particular, a platform to plan eco-friendly holidays is

In particular, if Figure 2 is read from the top, tourist organisations have the potential to:

criteria are fulfilled, the tourist products assessed can then be labelled.

consistent and scientifically sound manner.

Commission, 2010).

and initiatives in the travel and tourism sector.

services developed by De Camillis et al. (2010c).

this way, all tourist organisations are able to quantify the environmental performance of their own tourist products in terms of environmental footprint, and to detect options for improvement by comparing the environmental performance of their own products against a benchmark representing the average environmental performance of the whole product group. This is the product environmental footprint calculator that we proposed above for eco-label assessments. If developed according to a common set of methodological guidelines, this calculator may produce data for environmental labels to compare the environmental performance of tourist products and destinations in a envisaged. This instrument has the potential to help travellers in planning eco-friendly holidays "from door to door" by indicating the most environmentally-sound destinations, organisations and solutions (i.e transport modes, accommodation services and other tourist services). This might be possible if:


Fig. 2. A possible suite of LCA-based tools for eco-friendly holidays

Tourism Life Cycle Assessment (LCA):

pp. 277-292.

URL: www.evirondec.com

Centre, Ispra, Italy.

Denmark.

COM (2008) 397 final.

Sustainability (IES), Ispra, Italy.

database version II, Accessed in October 2011, URL: http://lca.jrc.ec.europa.eu/lcainfohub/datasetArea.vm

*Official Journal of the European Union,* L 237, pp. 1-12*.*

*Journal of Environmental Management,* Vol. 91, No. 1, pp. 1-21.

181.

Proposal of a New Methodological Framework for Sustainable Consumption and Production 263

De Camillis, C., Raggi, A. & Petti, L. (2010a). Tourism LCA: state-of-the-art and perspectives. *The International Journal of Life Cycle Assessment*, Vol. 15, No. 2, pp. 148-155. De Camillis, C., Raggi, A. & Petti, L. (2010b). Life Cycle Assessment in the framework of

De Camillis, C., Raggi, A. & Petti, L. (2010d). Environmental labelling: definition of product

Debbage, K.G. & Daniels, P. (1998). The tourist industry and economic geography: missed

EPD (2011). The International Environmental Product Declaration (EPD) System, Sweden.

European Commission (2007). Carbon Footprint - what it is and how to measure it.

European Commission (2008). Sustainable Consumption and Production Action Plan (SCP).

European Commission (2009). Commission Decision of 9th July 2009 establishing the

European Commission (2011). Reference European Life Cycle Data System (ELCD) core

European Parliament (2008). Regulation (EC) No 1980/2000 of the European Parliament and

FEE (2011). *Blue Flag 2011*, Foundation for Environmental Education, Copenhagen,

Finnveden, G., Hauschild, M.Z., Ekvall, T., Guinée, J., Heijungs, R., Hellweg, S., Koehler, A.,

Fitzgerald, D.P., Herrmann, J.W., Sandborn, P.A., Schmidt, L.C. & Gogoll, T.H. (2007).

European Commission (2003). Integrated Product Policy. COM (2003) 302 final.

sustainable tourism: a preliminary examination of its effectiveness and challenges. *Progress in Industrial Ecology, An International Journal,* Vol. 7, No. 3, pp. 205-218. De Camillis, C., Raggi, A. & Petti, L. (2010c). Ecodesign for services: an innovative

comprehensive method. *International Journal of Sustainable Economy,* Vol. 2, No. 3,

categories in the travel and tourism industry. *Proceedings of the Scientific Workshop of the Italian Network on LCA "La metodologia LCA: approccio proattivo per le tecnologie ambientali. Casi studio ed esperienze applicative"*, Padua, Italy, 22 April 2010, pp. 173-

opportunities, *in* Ioannides, D.& Debbage, K. (ed.) *The Economic Geography of the Tourist Industry: A Supply-side Analysis*, pp. 17-30, Routledge, New York, NY, USA.

European Platform on LCA Newsletter. European Platform on LCA, Joint Research

ecological criteria for the award of the Community eco-label for tourist accommodation service, *Official Journal of the European Union*, L 198, pp. 57-79. European Commission (2010). *International Reference Life Cycle Data System (ILCD) Handbook*,

European Commission, Joint Research Centre (JRC), Institute for Environment and

of the Council of 17 July 2000 on a revised Community eco-label award scheme,

Pennington, D. & Suh, S. (2009). Recent developments in life cycle assessment.

Design for Environment (DfE): Strategies, Practices, Guidelines, Methods, and

#### **8. Conclusion**

In this chapter we outlined a new methodological framework for sustainable consumption and production in the travel and tourism industry. This framework includes, *inter alia*, a proposal for a new platform enabling travellers to plan eco-friendly holidays in Europe.

Learning from the experience of the European Food Sustainable Consumption and Production Round Table co-chaired by the European Commission and food supply chain partners (Peacock et al., 2011), significant improvements of sustainable production and consumption can be achieved if key stakeholders are equally involved in developing and fine-tuning a harmonised framework methodology for the assessment and communication of the environmental performance of products. A similar initiative would be advisable for the travel and tourism industry because the on-going proliferation of environmental assessment methodologies and communication tools has the potential to confuse or even mislead travellers and other stakeholders.

Integration of instruments, synergies among initiatives and general consensus across supply chain partners on methodological and communication aspects are needed to come out with consistent and stronger measures for sustainable consumption and production in the travel and tourism industry.

#### **9. References**


In this chapter we outlined a new methodological framework for sustainable consumption and production in the travel and tourism industry. This framework includes, *inter alia*, a proposal for a new platform enabling travellers to plan eco-friendly holidays in Europe.

Learning from the experience of the European Food Sustainable Consumption and Production Round Table co-chaired by the European Commission and food supply chain partners (Peacock et al., 2011), significant improvements of sustainable production and consumption can be achieved if key stakeholders are equally involved in developing and fine-tuning a harmonised framework methodology for the assessment and communication of the environmental performance of products. A similar initiative would be advisable for the travel and tourism industry because the on-going proliferation of environmental assessment methodologies and communication tools has the potential to confuse or even

Integration of instruments, synergies among initiatives and general consensus across supply chain partners on methodological and communication aspects are needed to come out with consistent and stronger measures for sustainable consumption and production in the travel

Azapagic, A. & Clift, R. (1999). Life cycle assessment and multiobjective optimisation.

Becken, S. & Hay, J.E. (2007). *Tourism and Climate Change: Risks and Opportunities*, Channel

Bramwell, B. & Lane, B. (2008). Priorities in Sustainable Tourism Research. *Journal of* 

Buhalis, D. & Laws, E. (2001). *Tourism Distribution Channels: Practices, Issues and Transformations*, Continuum International Publishing Group, London, UK. Chadwick, R.A. (1994). Concepts, definitions, and measures used in travel and tourism

Chambers, T. (2004). Environmental Assessment of a mass tourism package holiday and a

Corsico, S. (2007). Adattamento della metodologia LCA all'analisi e valutazione degli

De Camillis, C., Petti, L. & Raggi, A. (2008). LCA: a key-tool for Sustainable Tourism?

research, in: J.R.B. Ritchie and C.R. Goeldner (ed), *Travel, Tourism, and Hospitality Research: a Handbook for Managers and Researchers*, pp. 65-80, John Wiley & Sons,

responsible tourism package holiday, using Life Cycle Assessment and Ecological Footprint Analysis. Master of Science Thesis, Environmental Sciences, University of

impatti generati dal turismo: un caso di studio. Final Degree Thesis, Scienze Ambientali, D. Pitea (supervisor), Università degli Studi Milano-Bicocca, Milan,

*Proceedings of the 8th International Conference on EcoBalance*. Tokyo, Japan, 10-12

*Journal of Cleaner Production* Vol. 7, No. 2, pp. 135-143.

View Publications, Clevedon, UK.

New York, NY, USA.

Italy.

East Anglia, Norwich, UK.

December 2008, pp. 485-488.

*Sustainable Tourism,* Vol. 16, No. 1, pp. 1-4.

**8. Conclusion** 

mislead travellers and other stakeholders.

and tourism industry.

**9. References** 


http://lca.jrc.ec.europa.eu/lcainfohub/datasetArea.vm


Tourism Life Cycle Assessment (LCA):

pp. 96-103.

ENV/NL/000661.

Publishing, Oxford, UK.

13, No. 7, pp. 705-715.

No. 3, pp. 113-131.

USA, pp. 186-192.

UK.

pp. 237-251.

Proposal of a New Methodological Framework for Sustainable Consumption and Production 265

Hunter, C. & Shaw, J. (2007). The ecological footprint as a key indicator of sustainable

Jørgensen, A., Le Bocq, A., Nazarkina, L. & Hauschild, M. (2008). Methodologies for social

Judd, D.R. (2006). Commentary: Tracing the commodity chain of global tourism. *Tourism* 

Kloepffer, W. (2008). Life cycle sustainability assessment of products. *The International* 

Knörr, W. (2008). *EcoPassenger: environmental methodology and data*, Ifeu - Institut für Energie-

Krozer, Y. (2008). Life cycle costing for innovations in product chains. *Journal of Cleaner* 

Kusters, N. (2004). Demonstrating how an integrated ecolabeling and tour operating supply

Leiper, N. (2008). Why 'the tourism industry' is misleading as a generic expression: The case

Lew, A.A., Hall, C.M. & Williams, A.M. (2004). *A Companion to Tourism*, Blackwell

Li, L. & Geiser, K. (2004). Environmentally responsible public procurement (ERPP) and its

Maxwell, D., Sheate, W. & van der Vorst, R. (2006). Functional and systems aspects of the

Mayers, K. (2007). Strategic, financial, and design implications of extended producer

McCrory, P. (2006). Take nothing but pictures, leave nothing but footprints...? *British Journal* 

Middleton, V.T.C. (1989). Tourist product, *in* S.F. Witt & L. Moutinho (ed.), *Tourism* 

Misceo, M., Buonamici, R., Buttol, P., Naldesi, L., Grimaldi, F. & Rinaldi, C. (2004). TESPI

Norris, G.A. (2001). Integrating life cycle cost analysis and LCA. *The International Journal of* 

chain management strategy can foster sustainability in tourism, LIFE04

for the plural variation, 'tourism industries'. *Tourism Management*, Vol. 29, No. 2,

implications for integrated product policy (IPP). *Journal of Cleaner Production*, Vol.

sustainable product and service development approach for industry, *Journal of* 

responsibility in Europe: a producer case study. *Journal of Industrial Ecology*, Vol. 11,

*Marketing and Management Handbook*, pp. 573-576, Prentice-Hall, Hemel Hempstead,

(Tool for Environmental Sound Product Innovation): a simplified software tool to support environmentally conscious design in SMEs. *Proceedings of SPIE - Environmentally Conscious Manufacturing IV*, 26-27 October 2004, SPIE—The International Society for Optical Engineering Vol. 5583, Philadelphia, Pennsylvania,

und Umweltforschung Heidelberg GmbH, Heidelberg, Germany.

life cycle assessment. *The International Journal of Life Cycle Assessment,* Vol. 13, No. 2,

tourism, *Tourism Management*, Vol. 28, No. 1, pp. 46-57.

*Journal of Life Cycle Assessment*, Vol. 13, No. 2, pp. 89-95.

*Cleaner Production*, Vol. 14, No. 17, pp. 1466-1479.

*of Sports Medicine*, Vol. 40, No. 7, pp. 893-894.

*Life Cycle Assessment*, Vol. 6, No. 2, pp. 118-120.

*Geographies*, Vol. 8, No. 4, pp. 323-336.

*Production*, Vol. 16, No. 3, pp. 310-321

Tools, *in* Kutz, M. (ed.) *Environmentally Conscious Mechanical Design*, Wiley, London, UK, pp. 1-24.


Floridia, D. (2007). Studio delle metodologie di Life Cycle Assessment applicate al servizio

Font, X. (2002). Environmental certification in tourism and hospitality: progress, process and

Font, X. & Buckley, R. (2001). *Tourism Ecolabelling: Certification and Promotion of Sustainable* 

Gössling, S., Peeters, P. M., Ceron, J. P., Dubois, G., Patterson, T. & Richardson, R. B. (2005). The eco-efficiency of tourism. *Ecological Economics*, Vol. 54,No. 4, pp. 417– 434. Graburn, N.H.H. (2004). The anthropology of tourism, *in* S. Williams (ed.), *Tourism: Critical Concepts in the Social Sciences*, pp. 91-112, Routledge, New York, NY, USA. Graedel, T.E. (1997). Life-cycle assessment in the service industries. *Journal of Industrial* 

Grießhammer, R., Benoît, C., Dreyer, L.C., Flysjö, A., Manhart, A., Mazijn, B., Méthot, A. &

Hamele, H. & Eckardt, S. (2007). *Environmental Initiatives by European Tourism Businesses:* 

Hamele, H., Haas, E., Kusters, N., Hammerl, M., Proctor, J., Pils, M., Vitali, P., Diwok, D.,

Hauschild, M.Z., Dreyer, L.C. & Jørgensen, A. (2008). Assessing social impacts in a life cycle

Heijungs, R., Guinée, J.B., Huppes, G., Lankreijer, R.M., Udo de Haes, H.A., Wegener

Heiskanen, E. (2002). The institutional logic of life cycle thinking. *Journal of Cleaner* 

Hunkeler, D. (2006). Societal LCA methodology and case study. *International Journal of Life* 

Hunkeler, D. & Rebitzer, G. (2005). The future of life cycle assessment. *The International* 

Centre for Environmental Science, Leiden, The Netherlands.

*Journal of Life Cycle Assessment*, Vol. 10, No. 5, pp. 305-308.

*Production,* Vol. 10, No. 5, pp. 427-437.

*Cycle Assessment,* Vol. 11, No. 6, pp. 371-382.

Weidema, B.P. (2006). *Feasibility Study: Integration of Social Aspects into LCA*, United Nations Environment Program, Society of Environmental Toxicology and

*Instruments, Indicators and Practical Examples*, Ecotrans, Saarbrücken, Germany – Universität Stuttgart, Stuttgart, Institute for Energy Research (IER), Germany. Hamele, H. & van der Burgh, R. (2006). *TourBench: Monitoring and Benchmarking of* 

*Environmental Consumption and Cost in Tourist Accommodation Services*, Ecotrans, Saarbrücken, Germany – Universität Stuttgart, Stuttgart, Institute for Energy

Wendenbaum, M., Kuitert, K. & Ouwehand, M. (2004). *The VISIT Initiative: Tourism Eco-labelling in Europe – Moving the Market towards Sustainability*, Ecotrans,

perspective—Lessons learned. *CIRP Annals-Manufacturing Technology,* Vol. 57, No.

Sleeswijk, A., Ansems, A.M.M., Eggels, A.M.M., van Duin, R. & de Goede, H.P. (1992). *Environmental Life-Cycle Assessment of Products: Guide and Backgrounds*,

prospects. *Tourism Management,* Vol. 23, No. 3, pp.197-205.

*Management*, CABI Publishing, New York, NY, USA.

Chemistry Life Cycle Initiative, Freiburg, Germany.

London, UK, pp. 1-24.

Bicocca, Milan, Italy.

*Ecology,* Vol. 1, No. 4, pp. 57-70.

Research (IER), Germany.

Saarbrücken, Germany.

1, pp. 21-24.

Tools, *in* Kutz, M. (ed.) *Environmentally Conscious Mechanical Design*, Wiley,

turistico: il caso di una struttura ricettiva di Abano-Montegrotto. Final Degree Thesis, Scienze Ambientali, D. Pitea (supervisor), Università degli Studi Milano-


Tourism Life Cycle Assessment (LCA):


Switzerland.

Pensacola, USA.

5, No. 1, pp. 65-81.

environment report, Cambridge, UK.

& Development Group, Leeds, UK.

Initiative, UNEP, Paris, France.

Organization, Madrid, Spain.

World Tourism Organization, Madrid, Spain.

Vol. 10, No. 3, pp. 204-208.

Proposal of a New Methodological Framework for Sustainable Consumption and Production 267

Romeril, M. (1989). Tourism and the environment--accord or discord? *Tourism Management*,

Rosenblum, J., Horvath, A. & Hendrickson, C. (2000). Environmental implications of service industries. *Environmental Science and Technology*, Vol. 34, No. 22, pp. 4669-4676. Scott, D., Peeters, P., & Gössling, S. (2010). Can tourism deliver its "aspirational" greenhouse

Sesartic, A. & Stucki, M. (2007). How climate efficient is tourism in Switzerland? An

Consoli, F., Allen, D. Boustead, I., Fava, J., Franklin, W., Jensen, A.A., de Oude, N., Parrish,

Sisman, K. (1994). A life-cycle analysis of a holiday destination: Seychelles. British Airways

Sloan, P., Legrand, W., Tooman, H. & Fendt, J. (2009). Best practices in sustainability:

Spengler, T. & Stolting W. (2008). Life cycle costing for strategic evaluation of

Tapper, R. & Font, X. (2004). Tourism supply chains. Report of a desk research project for

Ujma, D. (2001). Distribution channels for tourism: theory and issues, *in* Buhalis, D., & Laws,

UK CEED (1998). An assessment of the environmental impacts of tourism in St. Lucia.

UNEP (2009). *Guidelines for social life cycle assessment of products*, UNEP/SETAC Life Cycle

UNWTO (2010). *Tourism Highlights* (2010 Edition), United Nations World Tourism

UNWTO (2008). *Tourism Market Trends* (2007 Edition - World Overview), United Nations

UNWTO UNEP WMO (2008). *Climate Change and Tourism: Responding to Global Challenges*,

Vezzoli, C. & Sciama, D. (2006). Life Cycle Design: from general methods to product type

machines. *Journal of Cleaner Production*, Vol. 14, Nos. 15-16, pp. 1319-1325.

specific guidelines and checklists: a method adopted to develop a set of guidelines/checklist handbook for the eco-efficient design of NECTA vending

52, Continuum International Publishing Group, London, UK.

British Airways Environment Report 5:98, Cambridge, UK.

United Nations World Tourism Organization, Madrid, Spain.

Vol. 5, pp 89-107, Emerald Group Publishing Limited, Bingley, UK.

gas emission reduction targets? *Journal of Sustainable Tourism*, Vol. 18, No. 3, pp. 393

assessment of tourism's carbon dioxide emissions in relation to its added value, Diploma Thesis, Imboden & S. Perch-Nielsen (supervisors). ETH, Zurich,

R., Perriman, R. Postlethwaite, D., Quay, B., Seguin J. & Vigon, B. (1993). *Guidelines for Life Cycle Assessment: a code of practice*. SETAC Press, Sesimbra, Portugal, and

German and Estonian hotels, in Chen, J.S. (ed.), *Advances in Hospitality and Leisure*,

remanufacturing systems. *Progress in Industrial Ecology, An International Journal*, Vol.

The Travel Foundation. Leeds Metropolitan University and Environment Business

E. (ed.), *Tourism Distribution Channels: Practices, Issues and Transformations*, pp. 33-


Peacock, N., De Camillis, C., Pennington, D., Aichinger, H., Parenti, A., Brentrup, F., Raggi,

Peeters, P., Gössling, S. & Lane, B. (2009). Moving towards low-carbon tourism: New

Pennington, D.W., Potting, J., Finnveden, G., Lindeijer, E., Jolliet, O., Rydberg, T. & Rebitzer,

Petti, L. & Tontodonati, S. (2002). The use of LCA as a tool to implement EPDs: an

Raggi, A. & Petti, L. (2006a). A newly developed integrated environment-quality approach

Raggi, A. & Petti, L. (2006b). Life Cycle Assessment and tourism services, In: *Workshop "Stato* 

Raggi, A., Sára, B, & Petti, L. (2005). Life Cycle Assessment case studies in small and

Raggi, A., Bruzzi, L. and Bordin, A. (2008a). The Italian LCA Network: objectives and

Raggi, A., Petti, L., De Camillis, C., Bordin, A. and Boatto, T. (2008b). *LCA dei prodotti* 

Rebitzer, G. & Buxmann, K. (2005). The role and implementation of LCA within life cycle

Rebitzer, G., Ekvall, T., Frischknecht, R., Hunkeler, D., Norris, G., Rydberg, T., Schmidt,

Rebitzer, G. & Hunkeler, D. (2003). Life cycle costing in LCM: ambitions, opportunities, and

Rebitzer, G. & Seuring, S. (2003). Methodology and application of life cycle costing. *The International Journal of Life Cycle Assessment*, Vol. 8, No. 2, pp. 110-111.

dell'LCA in Italia: percorsi a confronto". Pescara, Italy, pp. 63-76.

*Environment International*, Vol. 30, No. 5, pp. 701-720.

pp. 189-197.

pp 240-257, Routledge, New York, USA.

*Journal*, Vol. 3, No. 3, pp. 251-271.

*EcoBalance*. Tokyo, Japan, pp. 489-492.

rete/workshop-2006/atti

2005, pp. 171-174.

1335.

256.

*Environment International*, Vol. 30, No. 5, pp. 721-739.

*EcoBalance*, Tsukuba, Japan, 6-8 November 2002, pp. 329-332.

A., Rennaud, J., Sára, B., Schenker, U., Unger, N. & Ziegler, F. (2011). Towards the Harmonised Framework Methodology for the Environmental Assessment of Food and Drink Products. *The International Journal of Life Cycle Assessment*, Vol. 16, No. 3,

opportunities for destinations and tour operators, *in* Gössling, C.M. Hall & D.B. Weaver (ed.), *Tourism Futures: Perspectives on Systems, Restructuring and Innovations,* 

G. (2004). Life cycle assessment Part 2: Current impact assessment practice.

application to hotel services. *Proceedings of the 5th International Conference on* 

for the design of hotel services. *Progress in Industrial Ecology, An International* 

*dell'arte e prospettive degli studi di Life Cycle Assessment in Italia", Bologna, 18 October 2006,* accessed: 20 November 2011, URL: http://www.reteitalianalca.it/la-

medium sized enterprises offering tourist accommodation services, *Proceedings of the 12th SETAC Europe LCA Case Studies Symposium*, Bologna, Italy, 10-11 January

activities of the Working Group on Tourist Services. *8th International Conference on* 

*turistici: stato dell'arte e prospettive*. 2° Workshop della Rete Italiana LCA "Sviluppi

management at Alcan. *Journal of Cleaner Production*, Vol. 13, Nos. 13-14, pp. 1327-

W.P., Suh, S., Weidema, B.P. & Pennington, D.W. (2004). Life cycle assessment Part 1: Framework, goal and scope definition, inventory analysis, and applications.

limitations. *The International Journal of Life Cycle Assessment*, Vol. 8, No. 5, pp. 253-


**Economic Impact of Tourism –** 

**and Their Uses: 1969-2011** 

*1,2,3Malaysia 4Canada* 

**A Review of Literatures on Methodologies** 

Mohammad Nurul Huda Mazumder1,\*, Abdullah Al-Mamun2,

*2Centre for Social Entrepreneurship, Binary University College, Puchong* 

*3Faculty of Economics and Administration, University of Malaya, Kuala Lumpur* 

Tourism-based economic growth and development, a recent strategic phenomenon, has been attracted the attention of government, businesses, policy makers and other stakeholders of world economies. Tourism-based development is playing a pivotal role by contributing significantly to the GDP of developed and developing economies. Besides, it also receives a wide-spread recognition because of its ability to eliminate the disparities in the balance of payment (BOP) conditions by contributing positively to the services account of the BOP. The continuous expansion of the tourism sector made it possible to recognize it as the largest and fastest growing industry, considering either in a country specific or an aggregate global perspective. According to Eadington and Redman (1991), tourism industry is one of the largest and fastest expanding sectors of the world economy, and is thus experiencing an expansion faster than any other industry, exposing a post-industrial society. The economic repercussions of tourism are occurring in extensive latitude, within the evolution of the globalization process (Sugiyarto, Blake & Sinclair, 2003) that is, in turn, helping the acceleration of this industry's

Tourism industry is experiencing tremendous expansion over the years as results of its inclusion into the national economic plan of develop and developing economies of the world. Developing economies have been enacting policies to expand tourism as a source of reliable foreign exchange earnings when traditional foreign exchange earnings sectors contribution becomes limited in GDP. The previously unexplored developing economies are experiencing higher growth in expanding tourism than develop economies. However, the expansion is occurring due to its ability to generate substantial economic impact into economies of the world. Therefore, the objective of this chapter is to review the literatures

**1. Introduction** 

expansion around the globe.

Corresponding author

 \* Abul Quasem Al-Amin3 and Muhammad Mohiuddin4 *1Faculty of Management, Multimedia University, Cyberjaya* 

*4Faculty of Administrative Science, Laval University, Quebec* 

Weidema, B.P. (2005). ISO 14044 also applies to Social LCA. *The International Journal of Life Cycle Assessment*, Vol. 10, No. 6, p. 381. **14** 

### **Economic Impact of Tourism – A Review of Literatures on Methodologies and Their Uses: 1969-2011**

Mohammad Nurul Huda Mazumder1,\*, Abdullah Al-Mamun2, Abul Quasem Al-Amin3 and Muhammad Mohiuddin4

*1Faculty of Management, Multimedia University, Cyberjaya 2Centre for Social Entrepreneurship, Binary University College, Puchong 3Faculty of Economics and Administration, University of Malaya, Kuala Lumpur 4Faculty of Administrative Science, Laval University, Quebec 1,2,3Malaysia 4Canada* 

#### **1. Introduction**

268 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Weidema, B.P. (2005). ISO 14044 also applies to Social LCA. *The International Journal of Life* 

Tourism-based economic growth and development, a recent strategic phenomenon, has been attracted the attention of government, businesses, policy makers and other stakeholders of world economies. Tourism-based development is playing a pivotal role by contributing significantly to the GDP of developed and developing economies. Besides, it also receives a wide-spread recognition because of its ability to eliminate the disparities in the balance of payment (BOP) conditions by contributing positively to the services account of the BOP. The continuous expansion of the tourism sector made it possible to recognize it as the largest and fastest growing industry, considering either in a country specific or an aggregate global perspective. According to Eadington and Redman (1991), tourism industry is one of the largest and fastest expanding sectors of the world economy, and is thus experiencing an expansion faster than any other industry, exposing a post-industrial society. The economic repercussions of tourism are occurring in extensive latitude, within the evolution of the globalization process (Sugiyarto, Blake & Sinclair, 2003) that is, in turn, helping the acceleration of this industry's expansion around the globe.

Tourism industry is experiencing tremendous expansion over the years as results of its inclusion into the national economic plan of develop and developing economies of the world. Developing economies have been enacting policies to expand tourism as a source of reliable foreign exchange earnings when traditional foreign exchange earnings sectors contribution becomes limited in GDP. The previously unexplored developing economies are experiencing higher growth in expanding tourism than develop economies. However, the expansion is occurring due to its ability to generate substantial economic impact into economies of the world. Therefore, the objective of this chapter is to review the literatures

<sup>\*</sup> Corresponding author

Economic Impact of Tourism –

(4) 0.35 for camping visitors.

or country level.

A Review of Literatures on Methodologies and Their Uses: 1969-2011 271

Missouri state economy. To identify the economic significance of secondary effects (indirect and induced effects) of expenditure made by tourist on the Missouri state economy for the year 1967 was the primary objective of the study. The results showed that the indirect effect of business and industrial activity generated per dollar of tourist expenditure was 23.22 cents, while the induced effect was 76.39 cents. This indicates that the induced effect was over three times the size of the indirect effect. The importance of measuring the induced impact was emphasized by the author as induced impact generated major portion of the secondary impact. Total amount of money generated by the secondary effect of tourist spending amounted to \$562,312,000 in which the induced effect accounted for almost 77%. The particular interest of the next study was to estimate the tourist regional income multiplier conducted by Archer and Owen (1971). In fact, this is the first study attempted to estimate regional tourism multipliers. The input-output model was used in measuring various income multipliers of tourism considering the types of tourism sectors as well as different categories of tourists. Archer and Owen argued that the regional economic benefits accruing from different categories of tourists vary due to differences in leakage components. This model allowed the regional leakages in two ways: (1) when local business purchases goods from outside the region; and (2) when consumers spend money outside the region. This model was applied in the county of Anglesey and Gwynedd in North Wales. The income multipliers were estimated as (1) 0.25 for hotel and guesthouse visitors; (2) 0.14 for caravaners; (3) 0.58 for bed and breakfast and farmhouse visitors; and

The tourist regional multiplier model to examine the economy-wide impact of tourism was first developed by Archer and Owen (1971). Later, it was modified by Liu and Var (1982, 1983), Liu et al. (1984), and Liu (1986), Henry and Deane (1997), Fretchling and Horvath (1999), Yan and Wall (2002). In their studies, the basic input-output model was the foundation of deriving sectoral multipliers. Differential tourist multipliers were estimated using the model to gauge the contribution of tourism industry at state, regional

Liu and Var (1982) analyzed differential income and employment multipliers of accommodation industries in terms of their organization characteristics, i.e., location, size, scale, affiliation, and ownership in Victoria, BC., Canada in 1977, using the modified inputoutput model developed by Archer and Owen in 1971. It was hypothesized at the outset that the observed multipliers varies in inverse magnitude with types of industrial organization characteristics mentioned above. In testing whether there are any significant differences between lodging industries and their organizational characteristics or not, ANOVA (One-way analysis of variance) was employed in the study. The tests revealed that the regional income generation effects were statistically significant at the .01 levels by type of ownership. The regional employment generation coefficients and transactions multipliers also appeared to be statistically significant by different type of facilities (e.g., licensed and non-licensed establishment). Liu and Var emphasized that a multiplier analysis should be employed cautiously, taking into account the framework of regional objectives that comply with tourism planning guidelines, as it only explain a part of the total context. They concluded that domestically controlled and possessed lodging establishments ought to be promoted if the objectives were to optimize income. Furthermore, the smaller scale lodging establishments had to be given development priority through some supporting policy

implications if the aims were to support more employment.

on estimating economic impact of tourism, the methodologies used, and their uses held at several locations of the world. In order to attain the objective, papers on economic impact of tourism were collected from all renowned databases, such as, web of knowledge, science direct, proquest, emerald, ebsco premier etc. It was found that a variety of methodological approaches have been practiced by researchers to estimate the economic impact of tourism. To a large extent, these methodological approaches have been chosen to explain elaborately the primary objective of the chosen study and the related purposes of the primary objective. A summary of literatures on economic impact of tourism has been depicted throughout the chapter in order to explore the methodologies used and their uses in estimating the economic impact of tourism.

As tourism generates significant economic impact to an economy, the industry is gaining growing importance from all stakeholders of tourism. There are plethoras of studies attempted to address tourism industry's contribution to an economy. While academic literatures concerning the significance of economic impact of tourism are on the rise, tourism's contribution to the economy and impacts upon the local communities is not satisfactorily acknowledged (Vaughan, et al. 2000) maintaining either industrial classification as a single industry (Fletcher, 1989a) or the system of national accounts. Since the industry is not identified as a single industry and its contribution to the development of economies is not precisely derived, there is a need to conduct economic impact analysis of tourism – as tourism activity cannot be regarded as an isolated economic activity. To estimate and analyze the economic impact of tourism, a number of authors employed several methodologies covering input-output model, Keynesian multiplier model, social accounting matrix model, computable general equilibrium modelling, tourism satellite accounting modelling.

This section introduces several reviews about economic impact related literature on tourism economics. With respect to supporting the overall objectives, there is a need to investigate and gather considerable knowledge and information of what previous studies have covered in estimating economic impact of tourism. In doing so, this chapter reviews economic impact analysis of tourism related literature into five distinctive sections. The first section represents empirical evidences of measuring the economic impacts analysis of tourism that employed input-output technique. Empirical evidence of estimating tourism's economic impact using social accounting matrix is depicted in section two. The third and fourth sections represent the related literature on computable general equilibrium model and Keynesian multiplier model consecutively. The last section discusses the economic impact of tourism using tourism satellite accounting model.

#### **2. Empirical evidence on the economic impact analysis of tourism**

The available literatures on estimating the economic impact of tourism has been delineated in the following section. A number of methods were employed to estimate the economic impact of tourism, such as, input-output model, general equilibrium model, social accounting matrix model, tourism satellite accounting model etc.

#### **2.1 Input-output model**

One of the prominent studies that employed input-output model in estimating the economic impact of tourism was performed by Harmston (1969) using 1963 input-output table of

on estimating economic impact of tourism, the methodologies used, and their uses held at several locations of the world. In order to attain the objective, papers on economic impact of tourism were collected from all renowned databases, such as, web of knowledge, science direct, proquest, emerald, ebsco premier etc. It was found that a variety of methodological approaches have been practiced by researchers to estimate the economic impact of tourism. To a large extent, these methodological approaches have been chosen to explain elaborately the primary objective of the chosen study and the related purposes of the primary objective. A summary of literatures on economic impact of tourism has been depicted throughout the chapter in order to explore the methodologies used and their uses in estimating the

As tourism generates significant economic impact to an economy, the industry is gaining growing importance from all stakeholders of tourism. There are plethoras of studies attempted to address tourism industry's contribution to an economy. While academic literatures concerning the significance of economic impact of tourism are on the rise, tourism's contribution to the economy and impacts upon the local communities is not satisfactorily acknowledged (Vaughan, et al. 2000) maintaining either industrial classification as a single industry (Fletcher, 1989a) or the system of national accounts. Since the industry is not identified as a single industry and its contribution to the development of economies is not precisely derived, there is a need to conduct economic impact analysis of tourism – as tourism activity cannot be regarded as an isolated economic activity. To estimate and analyze the economic impact of tourism, a number of authors employed several methodologies covering input-output model, Keynesian multiplier model, social accounting matrix model, computable

This section introduces several reviews about economic impact related literature on tourism economics. With respect to supporting the overall objectives, there is a need to investigate and gather considerable knowledge and information of what previous studies have covered in estimating economic impact of tourism. In doing so, this chapter reviews economic impact analysis of tourism related literature into five distinctive sections. The first section represents empirical evidences of measuring the economic impacts analysis of tourism that employed input-output technique. Empirical evidence of estimating tourism's economic impact using social accounting matrix is depicted in section two. The third and fourth sections represent the related literature on computable general equilibrium model and Keynesian multiplier model consecutively. The last section discusses the economic impact of

general equilibrium modelling, tourism satellite accounting modelling.

**2. Empirical evidence on the economic impact analysis of tourism** 

accounting matrix model, tourism satellite accounting model etc.

The available literatures on estimating the economic impact of tourism has been delineated in the following section. A number of methods were employed to estimate the economic impact of tourism, such as, input-output model, general equilibrium model, social

One of the prominent studies that employed input-output model in estimating the economic impact of tourism was performed by Harmston (1969) using 1963 input-output table of

tourism using tourism satellite accounting model.

**2.1 Input-output model** 

economic impact of tourism.

Missouri state economy. To identify the economic significance of secondary effects (indirect and induced effects) of expenditure made by tourist on the Missouri state economy for the year 1967 was the primary objective of the study. The results showed that the indirect effect of business and industrial activity generated per dollar of tourist expenditure was 23.22 cents, while the induced effect was 76.39 cents. This indicates that the induced effect was over three times the size of the indirect effect. The importance of measuring the induced impact was emphasized by the author as induced impact generated major portion of the secondary impact. Total amount of money generated by the secondary effect of tourist spending amounted to \$562,312,000 in which the induced effect accounted for almost 77%.

The particular interest of the next study was to estimate the tourist regional income multiplier conducted by Archer and Owen (1971). In fact, this is the first study attempted to estimate regional tourism multipliers. The input-output model was used in measuring various income multipliers of tourism considering the types of tourism sectors as well as different categories of tourists. Archer and Owen argued that the regional economic benefits accruing from different categories of tourists vary due to differences in leakage components. This model allowed the regional leakages in two ways: (1) when local business purchases goods from outside the region; and (2) when consumers spend money outside the region. This model was applied in the county of Anglesey and Gwynedd in North Wales. The income multipliers were estimated as (1) 0.25 for hotel and guesthouse visitors; (2) 0.14 for caravaners; (3) 0.58 for bed and breakfast and farmhouse visitors; and (4) 0.35 for camping visitors.

The tourist regional multiplier model to examine the economy-wide impact of tourism was first developed by Archer and Owen (1971). Later, it was modified by Liu and Var (1982, 1983), Liu et al. (1984), and Liu (1986), Henry and Deane (1997), Fretchling and Horvath (1999), Yan and Wall (2002). In their studies, the basic input-output model was the foundation of deriving sectoral multipliers. Differential tourist multipliers were estimated using the model to gauge the contribution of tourism industry at state, regional or country level.

Liu and Var (1982) analyzed differential income and employment multipliers of accommodation industries in terms of their organization characteristics, i.e., location, size, scale, affiliation, and ownership in Victoria, BC., Canada in 1977, using the modified inputoutput model developed by Archer and Owen in 1971. It was hypothesized at the outset that the observed multipliers varies in inverse magnitude with types of industrial organization characteristics mentioned above. In testing whether there are any significant differences between lodging industries and their organizational characteristics or not, ANOVA (One-way analysis of variance) was employed in the study. The tests revealed that the regional income generation effects were statistically significant at the .01 levels by type of ownership. The regional employment generation coefficients and transactions multipliers also appeared to be statistically significant by different type of facilities (e.g., licensed and non-licensed establishment). Liu and Var emphasized that a multiplier analysis should be employed cautiously, taking into account the framework of regional objectives that comply with tourism planning guidelines, as it only explain a part of the total context. They concluded that domestically controlled and possessed lodging establishments ought to be promoted if the objectives were to optimize income. Furthermore, the smaller scale lodging establishments had to be given development priority through some supporting policy implications if the aims were to support more employment.

Economic Impact of Tourism –

inbound tourism.

expenditures.

income and employment.

A Review of Literatures on Methodologies and Their Uses: 1969-2011 273

suggested that tourism should be promoted in maximizing income, supporting more employment, and generating significant foreign exchange earnings from international

Ruiz (1985) employed input-output technique to investigate tourist expenditures economic impact on Puerto Rican economy in 1980. The study used 110X110 transactions matrix developed by Puerto Rico Planning Board in 1972. The results showed that the output multiplier was 2.08 resulted from per dollar tourist expenditure and the employment multiplier was found to be 142 per million dollar of tourist expenditure in 1980. It was noted that the number of employment declined from 88 full-time jobs in 1972 to 59 full-time jobs in 1979 for the hotel industry. Ruiz mentioned that this reduction was due to an increase in

Liu (1986) used the modified input-output model to estimate the significant economic contributions made by different groups of tourists in generating multipliers for the Hawaiian economy in 1980. Sector multipliers were obtained by using a 63x63 transactions table for 1983. A survey questionnaire of tourist expenditures was prepared to estimate income multipliers yielded by various groups of tourists. According to the findings of the study, income multiplier generated by tourists for Hawaiian economy in 1980 was 0.80; indicating about 80 cents of local household income were generated per dollar of tourist spending. In addition, about 80 jobs were created per one million dollars of tourist

The largest household income multiplier of 0.84 per dollar expenditure of tourists appeared to be generated by Japanese tourists which was 5% more than average income multiplier. The result also showed that the Japanese tourists had the largest income multiplier which was contrary to common belief that the Japanese tourists were likely to generate the least income multiplier for households from per dollar of expenditure. The ground of that belief was due to leakages resulting from purchases of imported luxury goods and businesses controlled by Japanese owners. Japanese tourists made proportionately higher expenditure on retail goods and lower on hotels and restaurants as most of the Japanese tourists were visiting friend and relative (VFR) type of tourists. The findings of the study indicated that Japanese tourists were responsible for the highest direct and induced income multipliers. The employment multiplier was found to be 0.08 indicating that about 80 jobs were created per one million dollar of tourist expenditure. The Japanese visitors and VFR type of tourists appeared to be generating higher employment multiplier than the average by 7% and 12%, respectively. The break-down of the visitor expenditure showed that the Japanese visitors spent about three times as much as did other visitors per day, but less per visit due to the shortest length of stay. Although the Japanese and Canadian tourists contributed largely to the economy in terms of average tourist expenditure, the greatest impact and contributions were made by domestic tourism (mainland USA), accounting for 62% of receipts, and 59% of

Fletcher (1989) attempted to improve some limitations over a conventional input-output model. It was argued that imports should be categorized into competitive and noncompetitive imports. This is because competitive imports are considered as substitutes to the domestic production. Fletcher made an adjustment on the basic input-output model by deducting imports content column from the final demand. The modification was

worker's productivity or the substitution by a more advanced technology.

Liu and Var (1983) used provincial surveys and the modified input-output model to analyze the economic impact of tourism on the Metropolitan Victoria B.C. state of Canadian economy for the year 1977, in terms of output, income, job, import and government revenue. The modified input-output model employed in the previous study was used on the basis of a 13x13 input-output transactions table of the state economy. The multipliers carried out by the study were 1.504 dollar worth of output multiplier, 0.65 cents worth of income multiplier for each dollar of tourist expenditure while the employment multiplier was found to be 0.10 for tourist expenditure per thousand dollars. The estimated government revenue multiplier was 0.21 and the estimated import multiplier was 0.34 per dollar of expenditure made by tourists. Income and employment multipliers were also analyzed for two tourist categories- overnight visitors and day-trippers reflecting that overnight visitors (nonresidents) generated a little more household income than the day-trippers did by a slight difference of 1.5% in regard to the income multiplier. However, the former appeared to create less employment than the latter by 12%. It was also found that the overnight nonresident visitors generated \$71,225 income and 11,114 jobs, while the day-trippers created \$3,183 income and 568 jobs in terms of total tourist expenditure. The income multiplier of the locally-owned hotels and motels was found to be higher than that of outside-owned accommodations. But, the findings indicated that the locally-owned hotel and motels contributed only 26.8% of income generated by total tourist expenditure, while outsideownership contributed largely by 73.2%.

Liu et al. (1984) measured tourist income multipliers of Turkish economy for the year 1981 generated by different types of tourists. The service sectors were found to be yielding high direct but low indirect multipliers, indicating the high wage-intensive nature but low backward linkages. On the other hand, the manufacturing sectors in general yielded high indirect but low direct multipliers, indicating capital-intensive nature and strong intersectoral linkages. The tourist income (value-added) multipliers showed that the domestic excursionists had the largest multiplier (2.03), followed by that of overseas Turkish tourists (2.03) and foreign excursionists (2.02). The income multipliers for the domestic overnight visitors and foreign overnight visitors were found to be 1.97. The results revealed that foreign and domestic excursionists and overseas Turkish tourists generated the high-income multiplier against overnight domestic and international visitors. The study described that this difference in multipliers had occurred due to the expenditure variety of tourists where the earlier tourists had the tendency to make additional spending on purchasing retail goods while these tourists made lower expenditures on hotels and restaurants than the later.

Archer (1985) analyzed economic impact of tourism on the Mauritius economy in 1980. The results showed that the total output multiplier was 0.9639 and the employment multiplier was 49 per 1 million Rs (Rupees). The variation in impacts generated by tourists of each inbound countries indicating that tourists from West Germany, Switzerland, South Africa and the UK made a extensive impact on the economy per visitor. Among the tourists' origin markets, the lower impact was found to be generated by tourists from France. Archer asserted that the high rank in total number of visitors did not necessarily mean the largest economic impact. For instance, visitors from Reunion occupied the largest proportion of total visitors (about 23%), but they generated the lowest income per visitor except Malagasy. Archer concluded that target markets generated reasonably higher economic impact through higher expenditure on tourism related businesses in Mauritius. Therefore, the study

Liu and Var (1983) used provincial surveys and the modified input-output model to analyze the economic impact of tourism on the Metropolitan Victoria B.C. state of Canadian economy for the year 1977, in terms of output, income, job, import and government revenue. The modified input-output model employed in the previous study was used on the basis of a 13x13 input-output transactions table of the state economy. The multipliers carried out by the study were 1.504 dollar worth of output multiplier, 0.65 cents worth of income multiplier for each dollar of tourist expenditure while the employment multiplier was found to be 0.10 for tourist expenditure per thousand dollars. The estimated government revenue multiplier was 0.21 and the estimated import multiplier was 0.34 per dollar of expenditure made by tourists. Income and employment multipliers were also analyzed for two tourist categories- overnight visitors and day-trippers reflecting that overnight visitors (nonresidents) generated a little more household income than the day-trippers did by a slight difference of 1.5% in regard to the income multiplier. However, the former appeared to create less employment than the latter by 12%. It was also found that the overnight nonresident visitors generated \$71,225 income and 11,114 jobs, while the day-trippers created \$3,183 income and 568 jobs in terms of total tourist expenditure. The income multiplier of the locally-owned hotels and motels was found to be higher than that of outside-owned accommodations. But, the findings indicated that the locally-owned hotel and motels contributed only 26.8% of income generated by total tourist expenditure, while outside-

Liu et al. (1984) measured tourist income multipliers of Turkish economy for the year 1981 generated by different types of tourists. The service sectors were found to be yielding high direct but low indirect multipliers, indicating the high wage-intensive nature but low backward linkages. On the other hand, the manufacturing sectors in general yielded high indirect but low direct multipliers, indicating capital-intensive nature and strong intersectoral linkages. The tourist income (value-added) multipliers showed that the domestic excursionists had the largest multiplier (2.03), followed by that of overseas Turkish tourists (2.03) and foreign excursionists (2.02). The income multipliers for the domestic overnight visitors and foreign overnight visitors were found to be 1.97. The results revealed that foreign and domestic excursionists and overseas Turkish tourists generated the high-income multiplier against overnight domestic and international visitors. The study described that this difference in multipliers had occurred due to the expenditure variety of tourists where the earlier tourists had the tendency to make additional spending on purchasing retail goods while these tourists made lower expenditures on

Archer (1985) analyzed economic impact of tourism on the Mauritius economy in 1980. The results showed that the total output multiplier was 0.9639 and the employment multiplier was 49 per 1 million Rs (Rupees). The variation in impacts generated by tourists of each inbound countries indicating that tourists from West Germany, Switzerland, South Africa and the UK made a extensive impact on the economy per visitor. Among the tourists' origin markets, the lower impact was found to be generated by tourists from France. Archer asserted that the high rank in total number of visitors did not necessarily mean the largest economic impact. For instance, visitors from Reunion occupied the largest proportion of total visitors (about 23%), but they generated the lowest income per visitor except Malagasy. Archer concluded that target markets generated reasonably higher economic impact through higher expenditure on tourism related businesses in Mauritius. Therefore, the study

ownership contributed largely by 73.2%.

hotels and restaurants than the later.

suggested that tourism should be promoted in maximizing income, supporting more employment, and generating significant foreign exchange earnings from international inbound tourism.

Ruiz (1985) employed input-output technique to investigate tourist expenditures economic impact on Puerto Rican economy in 1980. The study used 110X110 transactions matrix developed by Puerto Rico Planning Board in 1972. The results showed that the output multiplier was 2.08 resulted from per dollar tourist expenditure and the employment multiplier was found to be 142 per million dollar of tourist expenditure in 1980. It was noted that the number of employment declined from 88 full-time jobs in 1972 to 59 full-time jobs in 1979 for the hotel industry. Ruiz mentioned that this reduction was due to an increase in worker's productivity or the substitution by a more advanced technology.

Liu (1986) used the modified input-output model to estimate the significant economic contributions made by different groups of tourists in generating multipliers for the Hawaiian economy in 1980. Sector multipliers were obtained by using a 63x63 transactions table for 1983. A survey questionnaire of tourist expenditures was prepared to estimate income multipliers yielded by various groups of tourists. According to the findings of the study, income multiplier generated by tourists for Hawaiian economy in 1980 was 0.80; indicating about 80 cents of local household income were generated per dollar of tourist spending. In addition, about 80 jobs were created per one million dollars of tourist expenditures.

The largest household income multiplier of 0.84 per dollar expenditure of tourists appeared to be generated by Japanese tourists which was 5% more than average income multiplier. The result also showed that the Japanese tourists had the largest income multiplier which was contrary to common belief that the Japanese tourists were likely to generate the least income multiplier for households from per dollar of expenditure. The ground of that belief was due to leakages resulting from purchases of imported luxury goods and businesses controlled by Japanese owners. Japanese tourists made proportionately higher expenditure on retail goods and lower on hotels and restaurants as most of the Japanese tourists were visiting friend and relative (VFR) type of tourists. The findings of the study indicated that Japanese tourists were responsible for the highest direct and induced income multipliers. The employment multiplier was found to be 0.08 indicating that about 80 jobs were created per one million dollar of tourist expenditure. The Japanese visitors and VFR type of tourists appeared to be generating higher employment multiplier than the average by 7% and 12%, respectively. The break-down of the visitor expenditure showed that the Japanese visitors spent about three times as much as did other visitors per day, but less per visit due to the shortest length of stay. Although the Japanese and Canadian tourists contributed largely to the economy in terms of average tourist expenditure, the greatest impact and contributions were made by domestic tourism (mainland USA), accounting for 62% of receipts, and 59% of income and employment.

Fletcher (1989) attempted to improve some limitations over a conventional input-output model. It was argued that imports should be categorized into competitive and noncompetitive imports. This is because competitive imports are considered as substitutes to the domestic production. Fletcher made an adjustment on the basic input-output model by deducting imports content column from the final demand. The modification was

Economic Impact of Tourism –

A Review of Literatures on Methodologies and Their Uses: 1969-2011 275

expenditure patterns of foreign visitors, sectoral employment etc. The total output and income multipliers of tourism industry were estimated to be 1.96 and 0.98 per Singapore dollar of tourist expenditure. Trade (shopping) sector retained the highest income multiplier, while transport sector retained the lowest multiplier for each of the tourism related sector. Heng and Low compared the relative economic contribution of tourism industry against manufacturing and export substitute industries. When comparing the income multipliers of different industries, it was found that the income multiplier of tourism industry exhibited the highest income multiplier of 0.98 against 0.57 and 0.40 per Singaporean dollar for the manufacturing and export substitute industries respectively. The employment multiplier was found to be 0.033, implying that tourism supported 33 jobs per million dollars of tourist spending, which was more than doubled and tripled of what the export and manufacturing industries supported. The tourism import leakage appeared to be the lowest with 0.27 compared to the export and manufacturing industries. The results also revealed that tourism promotions should not ignore tourists from low-income countries because there were no significant differences between tourists from developing and underdeveloped countries. Overall, they found that tourism contributed significantly to the economy and tourist earnings were more potent than manufacturing and other export sectors. Khan, Chou and Wong (1990) also utilized input-output analysis using 1983 input-output transactions table in an attempt to measure the impact of tourism on Singapore economy. Khan et al. argued that treating shopping items equally would be misleading since high value items, such as jewellery, cost several times as much as low value items like books. Therefore, the shopping items were categorized into most expensive, moderately-expensive, and the least expensive in nature according to the expenditure pattern of tourists. The study revealed that the contribution of tourism to GDP was 12.5%. The tourism income multiplier appeared to be 0.94, which was lower than the multiplier obtained by Heng and Low (1990) but higher than Bahamas, Fiji, and Cayman Islands. The estimated tourism employment and output multipliers were 33 jobs per million of Singaporean dollars and 1.96 per Singaporean dollar respectively which appeared to be similar to the findings of previous study of Heng

and Low. The import multiplier was estimated to be 0.38 per Singaporean dollar.

Rashid et al. (1993) conducted an inter-sectoral analysis on Malaysian economy concerning tourism impact analysis in which static input-output analysis was the basis of analysis. The study used 1983 input-output table to estimate the impact of tourism on Malaysian economy for the year 1991. Tourist and non-tourist components were categorized from private consumption expenditure column and export column of the final demand sectors of 1983 input-output table. The direct and indirect impacts on sectoral output, employment, commodity taxes, and non-competitive imports were estimated resulting from tourist expenditures which were generated following questionnaire method in 1991. Tourist expenditures were categorized into domestic, Singaporean, and other foreign tourists. It was found that all sectors of the economy were receiving benefit from tourism directly and indirectly. The contribution of tourist expenditure in influencing output, employment, and commodity taxes was found to be varied but still small. The contribution of tourism on the generation of value-added, employment, and commodity taxes was found to be less than 5% of the total but steadily expanding. The Wholesale and retail trade, Hotels and restaurants, Land transportation, Air transportation, and Business and personal services sectors were benefiting largely from tourism. The study concluded that other sectors did have strong technological linkages with other domestic supply sectors; therefore, it required to give

accomplished in order to exhibit the real output of each sector. However, the elastic supply assumption of the input-output model revealed that the supply should be elastic for all economic sectors under study. Fletcher argued that when there were capacity constraints, this assumption might overestimate the true impact of tourism if there was any change in final demand. Fletcher asserted that when some sectors were unable to comply with a certain increase in final demand, an increase in imports of goods and services would result to meet up that increase in final demand. Fletcher further modified the input-output model to avoid this problem. A matrix of capacity constraints was developed and used to the respective processing sectors.

Fletcher claimed that any attempt to modify a basic input-output model might require increases in data requirement. Therefore, he recommended the construction of "hybrid" models which enable researcher to only disaggregate tourism sectors and aggregate the rest of the sectors of the economy into a single processing sector. The model should be utilized when the lack of reliable data prevented the researchers from building a full input-output model though it might decreased the accuracy of the results. Therefore, the author concluded that these models might be suitable only for a small-scale economy.

Fesenmaier, Jones, Um and Ozuna (1989) estimated the economic impacts of outdoor recreation activity on local economies as they were related to freshwater inflows into each of the six estuaries (Sabine-Neches, Trinity-San Jacinto, Lavaca-Tres Palacios, Guadalupe, Nueces and Mission-Aransas, Laguna Madre) which covered the Texas Gulf Coast region. The direction of the study was to analyze the economic impacts of sport fishing, hunting, picnicking, swimming, camping, pleasure boating and sightseeing on the economies of the Texas Gulf Coast region and the state of Texas in the generation of output, employment, income, and state local tax revenue. The state-wide Texas Gulf Coast economic impacts were estimated by using the state-wide expenditure data collected form the entire Texas Gulf Coast and a 1986 input-output model of Texas was developed for this study.

Data were collected following a two-step-strategy which incorporated both telephone and mail surveys. The focus of data collection was based on typical or average tourists' visit(s) to the Texas Gulf Coast during 1986 on each particular place along each estuary. The total expenditure of a typical tourist was grouped into six categories of goods and services (overnight lodging, transportation, grocery store purchases, restaurants and other eating establishments, rental of recreation equipment, and fees for entrance, participation, and guided tours). Their study postulated that tourists' expenditure generated positive impact and the expenditure were found to be varied according to income, occupation, age, date of visitation, and tax revenue over the gulf coast region. Total visitation and resulting expenditures were estimated and processed through input-output analysis. The results showed that the total output impact in 1986 amounted to \$1.19 billion for the Texas Gulf Coast and \$1.91 billion for the state. Also, the results showed that 59% of these impacts resulted from fishing-related travel to this area.

Heng and Low (1990) conducted an input-output study to estimate tourism's economic impacts in Singapore emphasizing on exhibiting the differences between Leontief and Leontief-Keynes multipliers. Differential sectoral multipliers were estimated based on tourists' countries of origin and their purpose of the trip. The 176 input-output sectors were aggregated into 46 sectors with regard to the availability of reliable data, such as

accomplished in order to exhibit the real output of each sector. However, the elastic supply assumption of the input-output model revealed that the supply should be elastic for all economic sectors under study. Fletcher argued that when there were capacity constraints, this assumption might overestimate the true impact of tourism if there was any change in final demand. Fletcher asserted that when some sectors were unable to comply with a certain increase in final demand, an increase in imports of goods and services would result to meet up that increase in final demand. Fletcher further modified the input-output model to avoid this problem. A matrix of capacity constraints was developed and used to the

Fletcher claimed that any attempt to modify a basic input-output model might require increases in data requirement. Therefore, he recommended the construction of "hybrid" models which enable researcher to only disaggregate tourism sectors and aggregate the rest of the sectors of the economy into a single processing sector. The model should be utilized when the lack of reliable data prevented the researchers from building a full input-output model though it might decreased the accuracy of the results. Therefore, the author

Fesenmaier, Jones, Um and Ozuna (1989) estimated the economic impacts of outdoor recreation activity on local economies as they were related to freshwater inflows into each of the six estuaries (Sabine-Neches, Trinity-San Jacinto, Lavaca-Tres Palacios, Guadalupe, Nueces and Mission-Aransas, Laguna Madre) which covered the Texas Gulf Coast region. The direction of the study was to analyze the economic impacts of sport fishing, hunting, picnicking, swimming, camping, pleasure boating and sightseeing on the economies of the Texas Gulf Coast region and the state of Texas in the generation of output, employment, income, and state local tax revenue. The state-wide Texas Gulf Coast economic impacts were estimated by using the state-wide expenditure data collected form the entire Texas Gulf Coast and a 1986 input-output model of Texas was developed for

Data were collected following a two-step-strategy which incorporated both telephone and mail surveys. The focus of data collection was based on typical or average tourists' visit(s) to the Texas Gulf Coast during 1986 on each particular place along each estuary. The total expenditure of a typical tourist was grouped into six categories of goods and services (overnight lodging, transportation, grocery store purchases, restaurants and other eating establishments, rental of recreation equipment, and fees for entrance, participation, and guided tours). Their study postulated that tourists' expenditure generated positive impact and the expenditure were found to be varied according to income, occupation, age, date of visitation, and tax revenue over the gulf coast region. Total visitation and resulting expenditures were estimated and processed through input-output analysis. The results showed that the total output impact in 1986 amounted to \$1.19 billion for the Texas Gulf Coast and \$1.91 billion for the state. Also, the results showed that 59% of these impacts

Heng and Low (1990) conducted an input-output study to estimate tourism's economic impacts in Singapore emphasizing on exhibiting the differences between Leontief and Leontief-Keynes multipliers. Differential sectoral multipliers were estimated based on tourists' countries of origin and their purpose of the trip. The 176 input-output sectors were aggregated into 46 sectors with regard to the availability of reliable data, such as

concluded that these models might be suitable only for a small-scale economy.

respective processing sectors.

this study.

resulted from fishing-related travel to this area.

expenditure patterns of foreign visitors, sectoral employment etc. The total output and income multipliers of tourism industry were estimated to be 1.96 and 0.98 per Singapore dollar of tourist expenditure. Trade (shopping) sector retained the highest income multiplier, while transport sector retained the lowest multiplier for each of the tourism related sector. Heng and Low compared the relative economic contribution of tourism industry against manufacturing and export substitute industries. When comparing the income multipliers of different industries, it was found that the income multiplier of tourism industry exhibited the highest income multiplier of 0.98 against 0.57 and 0.40 per Singaporean dollar for the manufacturing and export substitute industries respectively. The employment multiplier was found to be 0.033, implying that tourism supported 33 jobs per million dollars of tourist spending, which was more than doubled and tripled of what the export and manufacturing industries supported. The tourism import leakage appeared to be the lowest with 0.27 compared to the export and manufacturing industries. The results also revealed that tourism promotions should not ignore tourists from low-income countries because there were no significant differences between tourists from developing and underdeveloped countries. Overall, they found that tourism contributed significantly to the economy and tourist earnings were more potent than manufacturing and other export sectors.

Khan, Chou and Wong (1990) also utilized input-output analysis using 1983 input-output transactions table in an attempt to measure the impact of tourism on Singapore economy. Khan et al. argued that treating shopping items equally would be misleading since high value items, such as jewellery, cost several times as much as low value items like books. Therefore, the shopping items were categorized into most expensive, moderately-expensive, and the least expensive in nature according to the expenditure pattern of tourists. The study revealed that the contribution of tourism to GDP was 12.5%. The tourism income multiplier appeared to be 0.94, which was lower than the multiplier obtained by Heng and Low (1990) but higher than Bahamas, Fiji, and Cayman Islands. The estimated tourism employment and output multipliers were 33 jobs per million of Singaporean dollars and 1.96 per Singaporean dollar respectively which appeared to be similar to the findings of previous study of Heng and Low. The import multiplier was estimated to be 0.38 per Singaporean dollar.

Rashid et al. (1993) conducted an inter-sectoral analysis on Malaysian economy concerning tourism impact analysis in which static input-output analysis was the basis of analysis. The study used 1983 input-output table to estimate the impact of tourism on Malaysian economy for the year 1991. Tourist and non-tourist components were categorized from private consumption expenditure column and export column of the final demand sectors of 1983 input-output table. The direct and indirect impacts on sectoral output, employment, commodity taxes, and non-competitive imports were estimated resulting from tourist expenditures which were generated following questionnaire method in 1991. Tourist expenditures were categorized into domestic, Singaporean, and other foreign tourists. It was found that all sectors of the economy were receiving benefit from tourism directly and indirectly. The contribution of tourist expenditure in influencing output, employment, and commodity taxes was found to be varied but still small. The contribution of tourism on the generation of value-added, employment, and commodity taxes was found to be less than 5% of the total but steadily expanding. The Wholesale and retail trade, Hotels and restaurants, Land transportation, Air transportation, and Business and personal services sectors were benefiting largely from tourism. The study concluded that other sectors did have strong technological linkages with other domestic supply sectors; therefore, it required to give

Economic Impact of Tourism –

gateways of Australia.

attributes, and nature of investments in tourism industry.

A Review of Literatures on Methodologies and Their Uses: 1969-2011 277

Huse, Gustavsen and Almedal (1998) analysed the economic impact of tourism among nine Norwegian small municipalities in terms of sales and employment effects by estimating multipliers of four small municipalities and the results obtained in previous studies for other five small regions. The direct industry, direct spine-off, and secondary effects were estimated to show comparison of multiplier effects on local and regional levels. The secondary effects of tourism were found smaller than direct effects as the study was held for the core municipalities only. The authors found that the magnitude of multipliers were varied resulting different types of impacts depending on the stage of development of the local tourism industry, leading types of tourist attractions, types of tourism product

Mistills and Dwyer (1999) assessed the value-added and employment impact of MICE (meetings, incentives, conventions and exhibition) industry between Australian tourism gateways and non-gateways using input-output analysis. Their study revealed that economic impact of MICE tourism was expected to be larger in gateways than in non-

Frechtling and Horvath (1999) conducted a study on Washington D.C. economy, assessing the economic impact of tourism by employing regional Input-output Modelling System (RIMS II). The estimated implicit final demand output, earnings, and employment multipliers were found to be 1.1841, 0.3478, and 18.0 (jobs generated by per \$1 million of output delivered to final demand) respectively. A total visitor expenditure of \$2,396.4 million generated a total output, earnings, and employment impact of \$2,837.7 million, \$748.6 million, and 38,685. The ratio (or direct-effect) and normal multipliers (or final demand) multipliers were measured to compare the relative contribution of tourism with other sectors of the economy. The normal earnings and employment multipliers were found to be higher than other local industry aggregations. The authors concluded that the use of ratio multipliers was more precise than normal multipliers in observing the inter-industrial linkages with tourism sector. Based on the study, it was found that tourism sector employees tend to spend more of their income on local goods and services or a mixer of both. The magnitude of ratio and normal multipliers of tourism sector represented that

linkages of this sector with local suppliers were higher than the average industry.

Tohamy and Swinscoe (2000) assessed economic impact of tourism in Egypt using inputoutput model to estimate how tourists' expenditure flowed in different economic sectors using input-output tables of 1991/92.. The study revealed that tourism revenue only included earnings from hotel and restaurant services. Therefore, the study unable to provide a complete figure of economic impact of tourism as it did not take into account the expenditures of tourists on other goods and services that tourists purchased during their trip. The estimated primary and secondary impact of expenditure made by international tourists was US\$ 9.6 billion in 1999 which was 11.6 percent of GDP. Total value-added contribution of tourists' expenditure was about 7.5 percent of GDP. In 1999, the direct and secondary employment supported by international tourists' expenditure was 1.2 million and 2.7 million of employment respectively which was representing 7 and 15 percent of total employment respectively. The direct and secondary income effect of inbound tourists' expenditure was US\$670 million and US\$1.4 billion respectively. And, inbound tourism generated LE 3.6 billion of sales and income tax revenue in 1998/99 contributing 5.1 percent of total direct and indirect taxes of that year. Finally, the study translated out that the

simultaneous emphasis to the development of these strategic and non-strategic tourism sectors when designing tourism policy.

Archer (1995) used input-output model to translate the importance of tourism for the Bermudan economy. A summary of visitor arrivals and expenditures illustrated that Barmuda's tourism receipts were declining in the early 1980s until 1992 due to worldwide recession. Input-output models were developed for 1985, 1987 and 1992 where impacts on import, income, employment, and government revenue were measured for specific tourist sectors for overnight and cruise passengers. The study findings revealed that tourism became the principal source of employment although this sector was no longer the main source of foreign exchange and income for the Bermudian economy. The tourism income multiplier rose from 1.095 in 1985 to 1.257 in 1992 and supported 11,500 employments. Archer concluded that Bermudian government should give emphasis on strategic measures to improve the tourism product.

Archer and Fletcher (1996) analyzed the impact of tourists' expenditure's contribution on the generation of income, government revenue, and supporting employment and the balance of payments using input-output model to the Seychelles island economy. The input-output transaction table was disaggregated into 18 sectors. While analyzing the economic impact of tourism by different country of origin tourists, they found that impact varies by visitors' origin. Visitors from Germany, Italy, Switzerland, Ireland, the UK and other European countries were the highest spenders and contributed significantly in generating income and employment.

Andrew (1997) conducted a study in the UK periphery, Cornwall to examine the relationship between the economic development of Cornwall and tourism. The study pointed out that tourism is particularly suitable in places where there was an existence of high unemployment in association with relatively lower wages. Cornwall tourism industry was found to be significantly accommodation-centred and UK tourists account for about 3 millions of tourists annually. A linear programming framework was employed where Leontief coefficients were estimated from an adjusted 1984 input-output table of Cornwall economy. The study's empirical results suggested that if the target was to develop the peripheral economy, and then tourism expansion might not be the right strategy where tourism was led by accommodation-based tourism. The study revealed that in implementing such tourism attitude might affect indigenous industries negatively. The author suggested increasing tourism while simultaneously supporting indigenous industries would be the right choice to favour tourism. The study showed a relationship between the generations of positive external balances and economic development where tourism was contributing significantly to the generation of these external balances. The study asserted that Cornwall's portfolio industries should be given priority when preparing strategic policies for the regional development.

Stynes, Nelson and Lynch (1998) used IMPLAN input-output model in assessing the economic impact of snowmobiling to the state and regional economies in Michigan. They found that the direct income impact of snowmobilers was \$48 million and employment impact was about 2,500. The secondary income impact was \$93 million and 3,800 employments. The study also categorized the expenditure pattern of snowmobilers according to region. The findings of the study showed that Out-of-State snowmobilers generated about one-third of the total impact.

simultaneous emphasis to the development of these strategic and non-strategic tourism

Archer (1995) used input-output model to translate the importance of tourism for the Bermudan economy. A summary of visitor arrivals and expenditures illustrated that Barmuda's tourism receipts were declining in the early 1980s until 1992 due to worldwide recession. Input-output models were developed for 1985, 1987 and 1992 where impacts on import, income, employment, and government revenue were measured for specific tourist sectors for overnight and cruise passengers. The study findings revealed that tourism became the principal source of employment although this sector was no longer the main source of foreign exchange and income for the Bermudian economy. The tourism income multiplier rose from 1.095 in 1985 to 1.257 in 1992 and supported 11,500 employments. Archer concluded that Bermudian government should give emphasis on strategic measures

Archer and Fletcher (1996) analyzed the impact of tourists' expenditure's contribution on the generation of income, government revenue, and supporting employment and the balance of payments using input-output model to the Seychelles island economy. The input-output transaction table was disaggregated into 18 sectors. While analyzing the economic impact of tourism by different country of origin tourists, they found that impact varies by visitors' origin. Visitors from Germany, Italy, Switzerland, Ireland, the UK and other European countries were the highest spenders and contributed significantly in

Andrew (1997) conducted a study in the UK periphery, Cornwall to examine the relationship between the economic development of Cornwall and tourism. The study pointed out that tourism is particularly suitable in places where there was an existence of high unemployment in association with relatively lower wages. Cornwall tourism industry was found to be significantly accommodation-centred and UK tourists account for about 3 millions of tourists annually. A linear programming framework was employed where Leontief coefficients were estimated from an adjusted 1984 input-output table of Cornwall economy. The study's empirical results suggested that if the target was to develop the peripheral economy, and then tourism expansion might not be the right strategy where tourism was led by accommodation-based tourism. The study revealed that in implementing such tourism attitude might affect indigenous industries negatively. The author suggested increasing tourism while simultaneously supporting indigenous industries would be the right choice to favour tourism. The study showed a relationship between the generations of positive external balances and economic development where tourism was contributing significantly to the generation of these external balances. The study asserted that Cornwall's portfolio industries should be given priority when preparing

Stynes, Nelson and Lynch (1998) used IMPLAN input-output model in assessing the economic impact of snowmobiling to the state and regional economies in Michigan. They found that the direct income impact of snowmobilers was \$48 million and employment impact was about 2,500. The secondary income impact was \$93 million and 3,800 employments. The study also categorized the expenditure pattern of snowmobilers according to region. The findings of the study showed that Out-of-State snowmobilers

sectors when designing tourism policy.

to improve the tourism product.

generating income and employment.

strategic policies for the regional development.

generated about one-third of the total impact.

Huse, Gustavsen and Almedal (1998) analysed the economic impact of tourism among nine Norwegian small municipalities in terms of sales and employment effects by estimating multipliers of four small municipalities and the results obtained in previous studies for other five small regions. The direct industry, direct spine-off, and secondary effects were estimated to show comparison of multiplier effects on local and regional levels. The secondary effects of tourism were found smaller than direct effects as the study was held for the core municipalities only. The authors found that the magnitude of multipliers were varied resulting different types of impacts depending on the stage of development of the local tourism industry, leading types of tourist attractions, types of tourism product attributes, and nature of investments in tourism industry.

Mistills and Dwyer (1999) assessed the value-added and employment impact of MICE (meetings, incentives, conventions and exhibition) industry between Australian tourism gateways and non-gateways using input-output analysis. Their study revealed that economic impact of MICE tourism was expected to be larger in gateways than in nongateways of Australia.

Frechtling and Horvath (1999) conducted a study on Washington D.C. economy, assessing the economic impact of tourism by employing regional Input-output Modelling System (RIMS II). The estimated implicit final demand output, earnings, and employment multipliers were found to be 1.1841, 0.3478, and 18.0 (jobs generated by per \$1 million of output delivered to final demand) respectively. A total visitor expenditure of \$2,396.4 million generated a total output, earnings, and employment impact of \$2,837.7 million, \$748.6 million, and 38,685. The ratio (or direct-effect) and normal multipliers (or final demand) multipliers were measured to compare the relative contribution of tourism with other sectors of the economy. The normal earnings and employment multipliers were found to be higher than other local industry aggregations. The authors concluded that the use of ratio multipliers was more precise than normal multipliers in observing the inter-industrial linkages with tourism sector. Based on the study, it was found that tourism sector employees tend to spend more of their income on local goods and services or a mixer of both. The magnitude of ratio and normal multipliers of tourism sector represented that linkages of this sector with local suppliers were higher than the average industry.

Tohamy and Swinscoe (2000) assessed economic impact of tourism in Egypt using inputoutput model to estimate how tourists' expenditure flowed in different economic sectors using input-output tables of 1991/92.. The study revealed that tourism revenue only included earnings from hotel and restaurant services. Therefore, the study unable to provide a complete figure of economic impact of tourism as it did not take into account the expenditures of tourists on other goods and services that tourists purchased during their trip. The estimated primary and secondary impact of expenditure made by international tourists was US\$ 9.6 billion in 1999 which was 11.6 percent of GDP. Total value-added contribution of tourists' expenditure was about 7.5 percent of GDP. In 1999, the direct and secondary employment supported by international tourists' expenditure was 1.2 million and 2.7 million of employment respectively which was representing 7 and 15 percent of total employment respectively. The direct and secondary income effect of inbound tourists' expenditure was US\$670 million and US\$1.4 billion respectively. And, inbound tourism generated LE 3.6 billion of sales and income tax revenue in 1998/99 contributing 5.1 percent of total direct and indirect taxes of that year. Finally, the study translated out that the

Economic Impact of Tourism –

constraints on tourism development in China.

impact accurately.

A Review of Literatures on Methodologies and Their Uses: 1969-2011 279

through which important structural changes made possible. The study was unable to precisely measure the economic impact of tourism since only hotel and restaurant sector was considered. The estimation of total economic impact of tourism was not represented as

Yan and Wall (2002) studied the prospects of domestic and international tourism using a traditional type I input-output model of Chinese economy for the year 1992. The authors excluded the impacts on domestic consumption expenditure from the employed inputoutput model. Multipliers were derived to represent the impact of tourism in the generation of output, income, employment, value-added, and import. The size and diversity of the Chinese economy were the causes of why tourism had an insignificant impact on its economy. This study estimated the impact of tourism on other sectors of the economy and revealed that tourism had insignificant impact on the results of primary sectors as a consequence of weaker linkages of tourism with the primary sectors of Chinese economy. Finally the study concluded that the availability of secondary commodities created

Chhabra, Sills and Cubbage (2003) used input-output model to estimate the impact of Scottish highland games in the economy of North Carolina to represent the significance of festivals to rural economies. Multiplier effects on output, value-added, and labour income were estimated by incorporating tourist survey data to an input-output model for two Scottish festivals held in rural North Carolina. Type I and SAM multipliers were calculated to capture the interdependencies of sectors and the effects of household expenditure induced by changes in labour income. It was found that although increased tourist expenditure generated significant benefits for direct festival related businesses, the total economic impact was found to be insignificant when comparing the festival related activity to total economic activities in two regions. The authors indicated that lack of information and admission fees and leakages out of the region limited the study to estimate the output

Kim, Chon and Chung (2003) used input-output analysis to measure the economic impact of convention tourism in South Korea on the generation of output, employment, income, value-added and import. The authors found that the amount of about \$66 million and \$73 million were born by the total expenditure made by international convention participants and by the providers of conventions respectively. The estimated output, income, employment, tax, and import multipliers were estimated to identify the convention industry's economic contribution against other major export substitute products. Estimated

Sun and Stynes (2004) conducted a study on estimating the economic impacts of visitor expenditure at Pictured Rocks National Lakeshore, Michigan for the year 2001. Input-output analysis was carried out to measure visitor expenditure impacts on personal income, employment, and value-added. The authors found that park visitors spend \$14.8 million in the park which generated \$5.6 million in total as personal income, \$9.2 million as valueadded and generated 470 employments. The estimation biasness and errors, resulting from inconsistent responses and unrepresentative sample data, were elucidated in their study.

Rashid and Bashir (2004) used partial inter-industrial analysis or an open input-output model on measuring impacts of changing tourist profile on Malaysian economy. The basic

economic impact of convention industry was found to be very significant.

the household sector was not included into the model being an endogenous sector.

amount of foreign exchange earnings from inbound tourism could be compared to alternative export competing products of Egypt. The study pointed out that inbound tourism in Egypt was still below potential level, and coordination and effort should be given by both public and private parties to raise international tourism to its potential level.

Kweka, Morrissey and Blake (2001) conducted a study in Tanzania using input-output analysis to identify whether tourism was the key sector for the Tanzanian economy. Direct and indirect impacts of tourism on income, output, employment, and tax revenue were examined. Kweka et al. argued that the growth of tourism industry did not only depend on the productivity level of this industry alone but also on the level of productivity level generated by other industries or sectors. The study emphasized that sectors that benefited from tourism expansion should be identified for policy purpose, as they were likely to enhance the growth impact of tourism. In assessing the interdependence of tourism with other sectors in Tanzanian economy, the study first used static multiplier analysis. Then, the analysis of intra-sector and inter-sector linkages of tourism was carried out through linkage analysis. Finally, the study used a Multi-criteria approach to identify whether tourism can be identified as a key sector.

In addition, the findings of the study revealed that tourism was more import-intensive than other sectors. The study elicited that tourism benefited little from other service sectors compared to linkages with agriculture and manufacturing. This was further evident from its significant output impact. The direct output effect of tourism expenditure amounted TZS (Tanzanian Currency) 21,930 million in 1992 which was 1.7% of total GDP. Total output impact (direct and indirect) was TZS (Tanzanian Currency) 74,012 million which contributed 5.8% on GDP. Intra and inter sectoral impacts resulted from almost zero to 3.2% and from 1.7% to 2.6% of GDP respectively. The results showed that there was an increased output impact of tourism if indirect effects were added. Intra-sector effects were significant when considering indirect effect.

The above study revealed that the employment impact of tourism was insignificant. The differential income multipliers were estimated to represent that tourism had insignificant impact in terms generating income. Tourist spending generated TZS9471.2 millions of direct labour income in 1992 accounted for 0.7% of GDP. The total (direct and indirect) impact created TZS16, 247 millions of labour income which was 1.3% of GDP. The study suspected that lower income resulted from lower wages prevailed in tourism sector. Indirect tax revenue generated by tourism was found to be the second most important sector. Tourist expenditure generated TZS2, 126.5 millions of direct government tax revenue (2.7% of net indirect tax).

The amount of tax revenue reached 3,149.3 million which was 4.1 percent of total net indirect taxes when indirect effects were taken into consideration. The direct and total impact on import was TZS6, 291 million representing 1.6% of total import and 8,410.2 million representing 2.1% of total import. The net foreign exchange earning was 79 cents per tourist at the direct and indirect level as 21 cents went out from the economy through import leakage. At the direct level, 85 cents was generated as the net foreign exchange earnings as 16 cents leaked out of the economy through import leakage. In nominal terms, US\$ 120 million of tourism receipts generated the direct tourism net foreign exchange earnings of US\$102 and the amount increased when indirect effect was to be taken into consideration. The study's overall results implied that the tourism contributed significantly to the Tanzanian economy not only as a foreign currency earner but also acted as an avenue

amount of foreign exchange earnings from inbound tourism could be compared to alternative export competing products of Egypt. The study pointed out that inbound tourism in Egypt was still below potential level, and coordination and effort should be given

Kweka, Morrissey and Blake (2001) conducted a study in Tanzania using input-output analysis to identify whether tourism was the key sector for the Tanzanian economy. Direct and indirect impacts of tourism on income, output, employment, and tax revenue were examined. Kweka et al. argued that the growth of tourism industry did not only depend on the productivity level of this industry alone but also on the level of productivity level generated by other industries or sectors. The study emphasized that sectors that benefited from tourism expansion should be identified for policy purpose, as they were likely to enhance the growth impact of tourism. In assessing the interdependence of tourism with other sectors in Tanzanian economy, the study first used static multiplier analysis. Then, the analysis of intra-sector and inter-sector linkages of tourism was carried out through linkage analysis. Finally, the study used a Multi-criteria approach to identify whether tourism can

In addition, the findings of the study revealed that tourism was more import-intensive than other sectors. The study elicited that tourism benefited little from other service sectors compared to linkages with agriculture and manufacturing. This was further evident from its significant output impact. The direct output effect of tourism expenditure amounted TZS (Tanzanian Currency) 21,930 million in 1992 which was 1.7% of total GDP. Total output impact (direct and indirect) was TZS (Tanzanian Currency) 74,012 million which contributed 5.8% on GDP. Intra and inter sectoral impacts resulted from almost zero to 3.2% and from 1.7% to 2.6% of GDP respectively. The results showed that there was an increased output impact of tourism if indirect effects were added. Intra-sector effects were significant

The above study revealed that the employment impact of tourism was insignificant. The differential income multipliers were estimated to represent that tourism had insignificant impact in terms generating income. Tourist spending generated TZS9471.2 millions of direct labour income in 1992 accounted for 0.7% of GDP. The total (direct and indirect) impact created TZS16, 247 millions of labour income which was 1.3% of GDP. The study suspected that lower income resulted from lower wages prevailed in tourism sector. Indirect tax revenue generated by tourism was found to be the second most important sector. Tourist expenditure generated TZS2, 126.5 millions of direct government tax revenue (2.7% of net indirect tax).

The amount of tax revenue reached 3,149.3 million which was 4.1 percent of total net indirect taxes when indirect effects were taken into consideration. The direct and total impact on import was TZS6, 291 million representing 1.6% of total import and 8,410.2 million representing 2.1% of total import. The net foreign exchange earning was 79 cents per tourist at the direct and indirect level as 21 cents went out from the economy through import leakage. At the direct level, 85 cents was generated as the net foreign exchange earnings as 16 cents leaked out of the economy through import leakage. In nominal terms, US\$ 120 million of tourism receipts generated the direct tourism net foreign exchange earnings of US\$102 and the amount increased when indirect effect was to be taken into consideration. The study's overall results implied that the tourism contributed significantly to the Tanzanian economy not only as a foreign currency earner but also acted as an avenue

by both public and private parties to raise international tourism to its potential level.

be identified as a key sector.

when considering indirect effect.

through which important structural changes made possible. The study was unable to precisely measure the economic impact of tourism since only hotel and restaurant sector was considered. The estimation of total economic impact of tourism was not represented as the household sector was not included into the model being an endogenous sector.

Yan and Wall (2002) studied the prospects of domestic and international tourism using a traditional type I input-output model of Chinese economy for the year 1992. The authors excluded the impacts on domestic consumption expenditure from the employed inputoutput model. Multipliers were derived to represent the impact of tourism in the generation of output, income, employment, value-added, and import. The size and diversity of the Chinese economy were the causes of why tourism had an insignificant impact on its economy. This study estimated the impact of tourism on other sectors of the economy and revealed that tourism had insignificant impact on the results of primary sectors as a consequence of weaker linkages of tourism with the primary sectors of Chinese economy. Finally the study concluded that the availability of secondary commodities created constraints on tourism development in China.

Chhabra, Sills and Cubbage (2003) used input-output model to estimate the impact of Scottish highland games in the economy of North Carolina to represent the significance of festivals to rural economies. Multiplier effects on output, value-added, and labour income were estimated by incorporating tourist survey data to an input-output model for two Scottish festivals held in rural North Carolina. Type I and SAM multipliers were calculated to capture the interdependencies of sectors and the effects of household expenditure induced by changes in labour income. It was found that although increased tourist expenditure generated significant benefits for direct festival related businesses, the total economic impact was found to be insignificant when comparing the festival related activity to total economic activities in two regions. The authors indicated that lack of information and admission fees and leakages out of the region limited the study to estimate the output impact accurately.

Kim, Chon and Chung (2003) used input-output analysis to measure the economic impact of convention tourism in South Korea on the generation of output, employment, income, value-added and import. The authors found that the amount of about \$66 million and \$73 million were born by the total expenditure made by international convention participants and by the providers of conventions respectively. The estimated output, income, employment, tax, and import multipliers were estimated to identify the convention industry's economic contribution against other major export substitute products. Estimated economic impact of convention industry was found to be very significant.

Sun and Stynes (2004) conducted a study on estimating the economic impacts of visitor expenditure at Pictured Rocks National Lakeshore, Michigan for the year 2001. Input-output analysis was carried out to measure visitor expenditure impacts on personal income, employment, and value-added. The authors found that park visitors spend \$14.8 million in the park which generated \$5.6 million in total as personal income, \$9.2 million as valueadded and generated 470 employments. The estimation biasness and errors, resulting from inconsistent responses and unrepresentative sample data, were elucidated in their study.

Rashid and Bashir (2004) used partial inter-industrial analysis or an open input-output model on measuring impacts of changing tourist profile on Malaysian economy. The basic

Economic Impact of Tourism –

transportation sector.

multipliers found in other regions.

A Review of Literatures on Methodologies and Their Uses: 1969-2011 281

value-added contributed 0.22. The estimated multipliers were medium-lower than

It was translated that the demand for intermediate input was found lower because of the weak inter-sectoral linkages between tourism and other sectors of the Canary Island economy which resulted in lower indirect multiplier impact. There were other features that were identified as the reason for lower indirect multiplier impact. Firstly, lack of structural strength, and secondly, tourists spent more on service sectors. The total import multiplier was found to be 0.430 where the direct, indirect, and induced impacts were 0.104, 0.109, and 0.216 respectively. The household consumption direct import multiplier was 0.265 which was two times greater than consumption of non-residents. The study suggested that enhancing the output and income multiplier impact would reduce the leakages generated

Daniels (2004) developed occupation-based input-output modelling to assess the effects of tourist spending in the sporting events of Girls Fastpitch World Series, to the income of different job categories, in Mecklenburg County, North Carolina, USA. Input-output model was applied to estimate employment impact. The estimated employment represented the amount of needed new labour over a year due to a change in final demand. The estimated input-output employment was modified through occupation based modelling to rationally reproduce how much human hours and corresponding wages were generated from occupation because of short-term demand for tourism. The author also identified the occupations that were likely to be affected by a change in the final demand and concluded that full time equivalent salaries of \$15,000-\$40,000 of jobs were most likely affected by the event. Albqami (2004) estimated output, employment, and income multipliers of the Saudi Arabian economy from the economic impact analysis of tourists' expenditure using input-output model. The input-output transaction table of 1997 was disaggregated into nine sectors where tourism sector was included as one of the sectors. The impacts of tourist expenditure on output, income, and employment were measured at direct and indirect level. The share of output, income, and employment was found to be 5% of gross output, a total SR8690 million of income and the service sector received 33% of income from tourism receipts, and the total employment generated from tourism expenditure was 507,114 which was about 12% of total employment. The study concluded that service sector received highest income and employment impact although output impact was relatively lower compared to

Lee and Taylor (2005) conducted a study on the economic impact of 2002 FIFA World Cup in South Korea using input-output model. The output, income, and value-added impact of tourists' expenditure were determined excluding non-event related tourists. The output, income, and value-added impacts of FIFA World Cup in South Korea were \$1.35 billion, \$307 million, and \$713 million respectively. They found that international tourists who visited World Cup in South Korea contributed more to the economy than those who visited for other purposes. The event related tourist expenditure was estimated to be 1.8 times. The authors also concluded that inclusion of non-event inbound tourists' expenditure would

Bashir and Ahmad (2005) investigated the impacts of West Asian tourists' expenditure and analyze the profile of tourists using static closed input-output model. The study found that hotel and restaurants, entertainment, wholesale and retail trade and business services

result significant overestimation of economic impact of an event.

from import of goods and services that was used to satisfy tourist demand.

purpose of their research was devoted to explain the importance of West Asian tourists' economic contribution to tourism industry resulted from the change in the geography of tourist arrivals and their expenditure patterns. The study revealed that the economic impact on changing tourist profile had an impact on domestically produced goods. Through primary impact, tourism activities benefited the businesses and industries that served tourists directly but all sectors of the economy were experiencing benefit from secondary impact. The inbound tourists' expenditure patterns of all types of regional tourists were found to be very similar - spending the biggest proportion of their expenditure on two items namely: (i) hotel and restaurants and (ii) wholesale and retail trade. Tourism expenditure impact on output, import, tax revenue and value-added were measured for Malaysian economy through deriving partial multipliers. The results revealed that there was no direct effect on output of some sectors, and service sectors benefited largely from tourism activities. But the products and manufacturing sectors were getting indirect benefit from tourism activities. In terms of expenditure component, hotel and restaurants as well as wholesale and retail trade were the dominant component. When considering output multipliers, hotel and restaurants sector generated the largest multiplier. According to Rashid and Bashir, strategic planning needed to be adopted in improving the multiplier of hotel and restaurant through inter-industrial linkages so that this sector could be able to meet its requirements from within the domestic economy.

Wiersma, Morris and Robertson (2004) analysed the variation of tourism multipliers using input-output analysis to New Hampshire economy. The authors found that multipliers of tourism vary from region to region. The regions of the state with larger population generated higher output multipliers whereas the regions with lower population generated higher employment multipliers. The output multiplier of tourism at state level was 1.5 and employment multiplier was about 30.07 per million dollars. They concluded that state-level tourism multipliers should not be applied to sub-state level since they vary from region to region. Finally, they suggested paying attention to the misuse of tourism multipliers that might lead to an inefficient distribution of state resources.

Martin (2004) analyzed the role of imports and tourism consumption effects on GDP on the Canary Island economy, Spain. Keynesian Multiplier model and input-output analyses were employed to estimate direct, indirect and induced multipliers impacts of tourists' spending on generation of imports. The study revealed that import leakages from the circular flow system had impacted the economy negatively. The author claimed that his study was unable to determine the inter-sectoral relation of the economy due to the limitations of Keynesian multiplier model. This inability made it impossible to detect the indirect import impact tourism consumption on imports. The study used more efficient input-output model to represent the import impact of tourists' consumption as a replacement for Keynesian method to overcome the main disadvantage of this method. In doing so, input-output model multipliers were determined to represent inter-sectoral relations existed explicitly within the framework of economic system. In Canary Island, tourism consumption was 615 billion Pesetas in 1992. A total of 755 billion Pesetas of output and 484 billion Pesetas of valueadded were generated from tourism consumption which was about 22.8% of GDP. 21.4% GDP of this economy was attributed by the tourist spending. Per unit of expenditure made by tourists generated 1.23 Pesetas of output and 0.79 Pesetas of value-added in the year 1992. Of the total value-added, direct value-added multiplier contributed 0.56 while indirect

purpose of their research was devoted to explain the importance of West Asian tourists' economic contribution to tourism industry resulted from the change in the geography of tourist arrivals and their expenditure patterns. The study revealed that the economic impact on changing tourist profile had an impact on domestically produced goods. Through primary impact, tourism activities benefited the businesses and industries that served tourists directly but all sectors of the economy were experiencing benefit from secondary impact. The inbound tourists' expenditure patterns of all types of regional tourists were found to be very similar - spending the biggest proportion of their expenditure on two items namely: (i) hotel and restaurants and (ii) wholesale and retail trade. Tourism expenditure impact on output, import, tax revenue and value-added were measured for Malaysian economy through deriving partial multipliers. The results revealed that there was no direct effect on output of some sectors, and service sectors benefited largely from tourism activities. But the products and manufacturing sectors were getting indirect benefit from tourism activities. In terms of expenditure component, hotel and restaurants as well as wholesale and retail trade were the dominant component. When considering output multipliers, hotel and restaurants sector generated the largest multiplier. According to Rashid and Bashir, strategic planning needed to be adopted in improving the multiplier of hotel and restaurant through inter-industrial linkages so that this sector could be able to

Wiersma, Morris and Robertson (2004) analysed the variation of tourism multipliers using input-output analysis to New Hampshire economy. The authors found that multipliers of tourism vary from region to region. The regions of the state with larger population generated higher output multipliers whereas the regions with lower population generated higher employment multipliers. The output multiplier of tourism at state level was 1.5 and employment multiplier was about 30.07 per million dollars. They concluded that state-level tourism multipliers should not be applied to sub-state level since they vary from region to region. Finally, they suggested paying attention to the misuse of tourism multipliers that

Martin (2004) analyzed the role of imports and tourism consumption effects on GDP on the Canary Island economy, Spain. Keynesian Multiplier model and input-output analyses were employed to estimate direct, indirect and induced multipliers impacts of tourists' spending on generation of imports. The study revealed that import leakages from the circular flow system had impacted the economy negatively. The author claimed that his study was unable to determine the inter-sectoral relation of the economy due to the limitations of Keynesian multiplier model. This inability made it impossible to detect the indirect import impact tourism consumption on imports. The study used more efficient input-output model to represent the import impact of tourists' consumption as a replacement for Keynesian method to overcome the main disadvantage of this method. In doing so, input-output model multipliers were determined to represent inter-sectoral relations existed explicitly within the framework of economic system. In Canary Island, tourism consumption was 615 billion Pesetas in 1992. A total of 755 billion Pesetas of output and 484 billion Pesetas of valueadded were generated from tourism consumption which was about 22.8% of GDP. 21.4% GDP of this economy was attributed by the tourist spending. Per unit of expenditure made by tourists generated 1.23 Pesetas of output and 0.79 Pesetas of value-added in the year 1992. Of the total value-added, direct value-added multiplier contributed 0.56 while indirect

meet its requirements from within the domestic economy.

might lead to an inefficient distribution of state resources.

value-added contributed 0.22. The estimated multipliers were medium-lower than multipliers found in other regions.

It was translated that the demand for intermediate input was found lower because of the weak inter-sectoral linkages between tourism and other sectors of the Canary Island economy which resulted in lower indirect multiplier impact. There were other features that were identified as the reason for lower indirect multiplier impact. Firstly, lack of structural strength, and secondly, tourists spent more on service sectors. The total import multiplier was found to be 0.430 where the direct, indirect, and induced impacts were 0.104, 0.109, and 0.216 respectively. The household consumption direct import multiplier was 0.265 which was two times greater than consumption of non-residents. The study suggested that enhancing the output and income multiplier impact would reduce the leakages generated from import of goods and services that was used to satisfy tourist demand.

Daniels (2004) developed occupation-based input-output modelling to assess the effects of tourist spending in the sporting events of Girls Fastpitch World Series, to the income of different job categories, in Mecklenburg County, North Carolina, USA. Input-output model was applied to estimate employment impact. The estimated employment represented the amount of needed new labour over a year due to a change in final demand. The estimated input-output employment was modified through occupation based modelling to rationally reproduce how much human hours and corresponding wages were generated from occupation because of short-term demand for tourism. The author also identified the occupations that were likely to be affected by a change in the final demand and concluded that full time equivalent salaries of \$15,000-\$40,000 of jobs were most likely affected by the event.

Albqami (2004) estimated output, employment, and income multipliers of the Saudi Arabian economy from the economic impact analysis of tourists' expenditure using input-output model. The input-output transaction table of 1997 was disaggregated into nine sectors where tourism sector was included as one of the sectors. The impacts of tourist expenditure on output, income, and employment were measured at direct and indirect level. The share of output, income, and employment was found to be 5% of gross output, a total SR8690 million of income and the service sector received 33% of income from tourism receipts, and the total employment generated from tourism expenditure was 507,114 which was about 12% of total employment. The study concluded that service sector received highest income and employment impact although output impact was relatively lower compared to transportation sector.

Lee and Taylor (2005) conducted a study on the economic impact of 2002 FIFA World Cup in South Korea using input-output model. The output, income, and value-added impact of tourists' expenditure were determined excluding non-event related tourists. The output, income, and value-added impacts of FIFA World Cup in South Korea were \$1.35 billion, \$307 million, and \$713 million respectively. They found that international tourists who visited World Cup in South Korea contributed more to the economy than those who visited for other purposes. The event related tourist expenditure was estimated to be 1.8 times. The authors also concluded that inclusion of non-event inbound tourists' expenditure would result significant overestimation of economic impact of an event.

Bashir and Ahmad (2005) investigated the impacts of West Asian tourists' expenditure and analyze the profile of tourists using static closed input-output model. The study found that hotel and restaurants, entertainment, wholesale and retail trade and business services

Economic Impact of Tourism –

stimuli in the economy.

A Review of Literatures on Methodologies and Their Uses: 1969-2011 283

estimated that 80, 000 jobs were directly or indirectly related to tourism in 1990-1991 period. The author simulated 15% increase of international tourists and 2.5% increase of domestic tourists with the potential to increase the Gross State Product (GSP) to \$5.6 billion and 235,000 employments in 2000-2001. Recreation sector, followed by trade, manufacturing, and transport sectors were identified as the major employment providers. The study concluded that more investment in improving the infrastructure would provide additional

Wagner (1997) estimated the economic impact of tourism in Guaraquecaba, north-eastern State of Parana, Brazil using SAM. The finding of the study concluded that the economic impact of tourist expenditure was small due to high import leakages since businesses imported most of their inputs to satisfy tourist demands. Average expenditure of a tourist was \$15.12 per day. The study asserted that a formal employee effort to obtain one minimum salary required 214 tourist-per-days. Approximately 7,500(±2,500) visitor arrivals were estimated to generate

Daniels, Normans and Henry (2004) utilized social accounting matrix (SAM) to estimate household personal income and three other variations of occupation-based model to estimate the effects of a sports tourism event on individual wage in Charleston, South Carolina, USA. The authors argued that social accounting matrix was inappropriate in assessing personal income effects for different households during sports tourism events because of its limitations to weight income by sector. Personal income coefficients were found favouring high income households. Since social accounting matrix did not allow for any particular occupations, wage variations by job category were unable to be measured. Therefore, their study used average full-time equivalent wages which were most precise for sports tourism. The most impacted full

Oosterhaven and Fan (2006) employed social accounting matrix along with input-output technique in estimating the international tourism impact on Chinese economy. The study developed an extended input-output model and related this with Tourism Satellite Account (TSA) and finally aggregated SAM data. The objective of using Type II input-output analysis was to determine direct, indirect, and induced impact of foreign tourist expenditure. The study combined the economy into 17 sectors from input-output table where employment statistics of 9 sectors were adjusted. The findings of the study showed that foreign tourism contributed a small percentage (1.64%) of GDP to the economy. The income and employment impacts were found to be 1.40% and 1.01% respectively which constituted a smaller percentage than GDP of Chinese economy. The authors concluded that foreign tourist expenditure contribution to the economy was insignificant though there was high

Researchers have used computable general equilibrium (CGE) models in tourism impact studies based on availability of data from different countries, such as Hawaii, USA, Spain,

Adams and Parmenter (1995) analysed the economic impact of tourism in Australia by simulating a 10% growth of tourism using computable general equilibrium model for 117 sectors of Australian economy. The results of the study showed that a 10% increase in

\$244,575 value of additional output, 32 fulltime jobs, and a total wage of \$19,425.

time equivalent wage occupations ranged from \$15,000 to \$40,000.

value-added impact indicating future potential of international tourism.

**2.3 Computable general equilibrium (CGE) model** 

Australia and some other countries.

sectors received greater economic gains from tourism. The objective of this study was to examine the impact of inbound tourists' compositional shift from the contiguous countries to West Asian economies tourists. In order to attain the objective 300 survey questionnaires were distributed to tourist's in the Klang Valley region. The response rate was found to be 71 percent. The results from the statistical analysis also revealed that accommodation, shopping, and food and beverages were the three sectors where West Asian tourists made larger expenditure. Based on the findings the study suggested that West Asian tourists would revisit Malaysia if they had the opportunity to explore the emotional and experiential aspect of tourism. Cultural and heritage background, i.e. Batik, should be the unique brand characteristics for Malaysian tourism to expand as well as education tourism. The study also suggested conducting research in identifying the major short and long-haul inbound markets for the betterment of Malaysian tourism industry.

Contini, Scarpellini and Plidori (2009) analyzed the economic impact of agricultural based tourism on the progress of a community, Low-Valdelsa, Italy. Input-output analysis was employed to estimate the income and employment effects of agriculture-based tourism. The authors applied an appropriately modified regional accounting matrix to obtain the objective of the study. The prevailing constraints of agriculture-based tourism's economic impact in obtaining socio-economic development were pointed out and argued. Data were obtained from direct investigation. The authors concluded that the absence of product suppliers' coordination with the service providers was weakening the local product visibility. The authors suggested extending and strengthening particular activity actions along with lifting up the product quality to realize amicable benefit. As a result, agrotourism would have higher impact on the economic development of Low-Valdelsa, Italy.

Schubert and Brida (2009) employed input-output analysis to examine the macroeconomic effects of an increase in the demand for tourism as a result of exogenous inflow of visitors' income and marketing promotion activities of tourism products in a small destination. In addition, a dynamic general equilibrium model was utilized to represent the effects. It was found that there would be a rise in the domestic production and price of services provided to tourists if there was an increase in demand for tourism. The economy would be experiencing a higher stock of capital along with a decline in net foreign possessions since dynamic change takes into account the current account deficit and accumulated capital. Increase in visitors' income would be leading to an increase in wellbeing effect of locals while uncertain changes were appeared to be occurring on the wellbeing and consumption of locals. In addition, the study also concluded that a short-term increase in tourism demand would generate strong changes in real foreign benefit status and agents' consumption.

#### **2.2 Social accounting matrix (SAM)**

Several research fields have used social accounting matrix (SAM) in quantifying the economic impact, such as ecological economics, agricultural economics, economic modelling, development economics, and tourism.

West (1993) used a combination of social accounting matrix with econometric analysis in measuring the significance of tourism in Queensland State economy of Australia. The study results showed that there were sizable economic impacts of tourism on both gross state product and employment. Tourism in Queensland was estimated to generate \$2.1 billion of the gross state product, in addition to \$3 billion initial expenditure made by tourists. It was

sectors received greater economic gains from tourism. The objective of this study was to examine the impact of inbound tourists' compositional shift from the contiguous countries to West Asian economies tourists. In order to attain the objective 300 survey questionnaires were distributed to tourist's in the Klang Valley region. The response rate was found to be 71 percent. The results from the statistical analysis also revealed that accommodation, shopping, and food and beverages were the three sectors where West Asian tourists made larger expenditure. Based on the findings the study suggested that West Asian tourists would revisit Malaysia if they had the opportunity to explore the emotional and experiential aspect of tourism. Cultural and heritage background, i.e. Batik, should be the unique brand characteristics for Malaysian tourism to expand as well as education tourism. The study also suggested conducting research in identifying the major short and long-haul inbound

Contini, Scarpellini and Plidori (2009) analyzed the economic impact of agricultural based tourism on the progress of a community, Low-Valdelsa, Italy. Input-output analysis was employed to estimate the income and employment effects of agriculture-based tourism. The authors applied an appropriately modified regional accounting matrix to obtain the objective of the study. The prevailing constraints of agriculture-based tourism's economic impact in obtaining socio-economic development were pointed out and argued. Data were obtained from direct investigation. The authors concluded that the absence of product suppliers' coordination with the service providers was weakening the local product visibility. The authors suggested extending and strengthening particular activity actions along with lifting up the product quality to realize amicable benefit. As a result, agrotourism would have higher impact on the economic development of Low-Valdelsa, Italy.

Schubert and Brida (2009) employed input-output analysis to examine the macroeconomic effects of an increase in the demand for tourism as a result of exogenous inflow of visitors' income and marketing promotion activities of tourism products in a small destination. In addition, a dynamic general equilibrium model was utilized to represent the effects. It was found that there would be a rise in the domestic production and price of services provided to tourists if there was an increase in demand for tourism. The economy would be experiencing a higher stock of capital along with a decline in net foreign possessions since dynamic change takes into account the current account deficit and accumulated capital. Increase in visitors' income would be leading to an increase in wellbeing effect of locals while uncertain changes were appeared to be occurring on the wellbeing and consumption of locals. In addition, the study also concluded that a short-term increase in tourism demand would generate strong changes in real foreign benefit status and agents' consumption.

Several research fields have used social accounting matrix (SAM) in quantifying the economic impact, such as ecological economics, agricultural economics, economic

West (1993) used a combination of social accounting matrix with econometric analysis in measuring the significance of tourism in Queensland State economy of Australia. The study results showed that there were sizable economic impacts of tourism on both gross state product and employment. Tourism in Queensland was estimated to generate \$2.1 billion of the gross state product, in addition to \$3 billion initial expenditure made by tourists. It was

markets for the betterment of Malaysian tourism industry.

**2.2 Social accounting matrix (SAM)** 

modelling, development economics, and tourism.

estimated that 80, 000 jobs were directly or indirectly related to tourism in 1990-1991 period. The author simulated 15% increase of international tourists and 2.5% increase of domestic tourists with the potential to increase the Gross State Product (GSP) to \$5.6 billion and 235,000 employments in 2000-2001. Recreation sector, followed by trade, manufacturing, and transport sectors were identified as the major employment providers. The study concluded that more investment in improving the infrastructure would provide additional stimuli in the economy.

Wagner (1997) estimated the economic impact of tourism in Guaraquecaba, north-eastern State of Parana, Brazil using SAM. The finding of the study concluded that the economic impact of tourist expenditure was small due to high import leakages since businesses imported most of their inputs to satisfy tourist demands. Average expenditure of a tourist was \$15.12 per day. The study asserted that a formal employee effort to obtain one minimum salary required 214 tourist-per-days. Approximately 7,500(±2,500) visitor arrivals were estimated to generate \$244,575 value of additional output, 32 fulltime jobs, and a total wage of \$19,425.

Daniels, Normans and Henry (2004) utilized social accounting matrix (SAM) to estimate household personal income and three other variations of occupation-based model to estimate the effects of a sports tourism event on individual wage in Charleston, South Carolina, USA. The authors argued that social accounting matrix was inappropriate in assessing personal income effects for different households during sports tourism events because of its limitations to weight income by sector. Personal income coefficients were found favouring high income households. Since social accounting matrix did not allow for any particular occupations, wage variations by job category were unable to be measured. Therefore, their study used average full-time equivalent wages which were most precise for sports tourism. The most impacted full time equivalent wage occupations ranged from \$15,000 to \$40,000.

Oosterhaven and Fan (2006) employed social accounting matrix along with input-output technique in estimating the international tourism impact on Chinese economy. The study developed an extended input-output model and related this with Tourism Satellite Account (TSA) and finally aggregated SAM data. The objective of using Type II input-output analysis was to determine direct, indirect, and induced impact of foreign tourist expenditure. The study combined the economy into 17 sectors from input-output table where employment statistics of 9 sectors were adjusted. The findings of the study showed that foreign tourism contributed a small percentage (1.64%) of GDP to the economy. The income and employment impacts were found to be 1.40% and 1.01% respectively which constituted a smaller percentage than GDP of Chinese economy. The authors concluded that foreign tourist expenditure contribution to the economy was insignificant though there was high value-added impact indicating future potential of international tourism.

#### **2.3 Computable general equilibrium (CGE) model**

Researchers have used computable general equilibrium (CGE) models in tourism impact studies based on availability of data from different countries, such as Hawaii, USA, Spain, Australia and some other countries.

Adams and Parmenter (1995) analysed the economic impact of tourism in Australia by simulating a 10% growth of tourism using computable general equilibrium model for 117 sectors of Australian economy. The results of the study showed that a 10% increase in

Economic Impact of Tourism –

domestic tourists 14,381 jobs.

in income, ₤5 million in output, and 230 employments.

generating GDP/income, employment, and tax revenue.

**2.5 Tourism satellite account (TSA)** 

been discussed in this section.

summarized in table 1.

A Review of Literatures on Methodologies and Their Uses: 1969-2011 285

Eriksen and Ahmt (1999) employed Keynesian income multiplier model under an inputoutput framework to assess the regional tourism effects for each of 16 Danish counties. Different tourism policies were evaluated in terms of employment, GDP and expenditure pattern of tourists. The measurement of tourism impact was conducted by tourist expenditure surveys. The authors found that foreign tourist generated approximately over 47,000 employments which were one half of the employment derived from one-day tourism. The study also estimated the economic impact of domestic tourism by considering foreign and domestic tourism in terms of substitutes of each other and non-substitutes of each other. When foreign and domestic tourism were assumed to be substitutes, the economic impact of tourists generated 61,652 employments where foreign tourists generated 47,271 jobs and

Vaughan et al. (2000) analysed the economic impact of "agro" and "non-agro" tourism in Exmoor National Park, UK, by employing proportional multiplier analysis which was a combination of input-output and traditional Keynesian model. Three surveys had been conducted to collect the data on operational characteristics of businesses, visitors' expenditure and residents' expenditure in the study area. Tourism impacts on the generation of output, income, employment and their distribution among different sectors of the economy were assessed. The study found that Agro-tourist had an impact of ₤1.7 million

In recent years, several researchers used tourism satellite accounting (TSA) model in estimating the economic impact of tourism. Of these studies, Blake et al. (2001), Kuhback and Herauf (2005), Dwyer, Forsyth and Spurr (2007), Smeral (2006), and Ahlert (2007a and 2007b) addressed the issues related to the TSA model that was considered as an extension of input-output model. The latest literature on economic impact on tourism using TSA has

Ahlert (2008) employed the results of TSA to analyze the significance of increased inbound tourism on the German economy on GDP, employment, and tax revenue generation. The study asserted that the options for estimating the economic impact were offered within model-based macroeconomic analysis where structural information could be obtained from tourism satellite accounting framework. TSAs had the ability to show maximum linkages to input-output models as well as to represent results originated from product-specific records. The study emphasized on formulating and using dynamic macroeconomic structural models along with trouble-free input-output approach. Some simulation results were obtained by using INFORGE model in determining the total effects of inbound tourism in

Studies that assessed the contribution of tourism through economic impact analysis are increasing over the years which started in 1960's. The literature is evolving as a consequence of government's stressing the importance to develop the economy by means of developing the tourism industry as tourism injects foreign exchange earnings, helps eliminate balance of payment disparity, generates income for the households, and supports employment generation. The studies that were devoted to estimate impact of tourism on different macroeconomic variables held in different locations around the world have been

tourism would result in exchange rate appreciation, increase in import and decrease in the traditional export sectors production, and declining balance on trade. The authors stated that expansion of tourism in Queensland State would result in negative impact from international tourism. Furthermore, the study suggested that the Queensland State economy should be depended on traditional export sector which was experiencing a declining trend because of an expansion of international tourism.

A study by Zhou, Yanagida, Chakravorty and Leung (1997) estimated visitor expenditure impact on the economy of Hawaii from a 10% reduction of tourist expenditure. The study compared the results generated from computable general equilibrium and input-output model. They stressed that the distribution of a sector's product would be traced through input-output modelling framework using a system of linear equations, whereas computable general equilibrium (CGE) model represented sectoral complex interdependencies unrestricted by the constraint of linearity, which allowed for resource allocation. Social accounting matrices (SAMs) were employed as the primary data requirements for constructing computable general equilibrium model. The authors referred that the findings which were based on input-output model were similar in magnitude to that of the results of computable general equilibrium, however, generally higher for a hypothetical 10% decrease in tourist spending. Their study found that the sectors directly related to tourism represented statistically the largest effects in terms of economic loss. Output reductions in the input-output model were found to be larger than computable general equilibrium model because latter model allowed reallocation of resources. The study illustrated that computable general equilibrium model would represent price effect and variation in output which had a positive relationship with domestic and composite prices.

Blake (2000) estimated the effect of 10% expansion of tourism in Spain using CGE model. The author estimated that a 10% increase in tourism would result in a 0.05% increase in GDP, 0.61% increase in real exchange rate, and a slight increase household consumption, investment and domestic tourism.. The author found that the benefit received from a 10% tourism expansion would offset an increase in imports and decrease in the value of other exports.

Dwyer, Forsyth and Spurr (2005) assessed a special event's economic impact generated from the Qantas Australian Grand Prix in Australia for the year 2000. They employed computable general equilibrium model and compared the result with input-output model. They found out that input-output model represented a greater impact on real output (\$120.1 million) as compared to computable general equilibrium model (\$24.46 million). They also found that the value-added multiplier and employment multipliers were different in undertaking two models which was 0.844 from input-output analysis and 0.267 from CGE model for valueadded. On the other hand, employment multipliers were 11.548 using input-output analysis and 2.5 using CGE model. The study concluded that funding agencies could benefit from such study as the approach would allow them to decide the economic benefits that would outweigh costs and proper utilization of limited funds under the prevailing alternative opportunities.

#### **2.4 Keynesian multiplier model**

Keynesian model was used by several studies although the version of multipliers derived by this model did not consider any leakages from the economy. The studies that employed Keynesian model were limited in numbers compared to input-output analysis.

tourism would result in exchange rate appreciation, increase in import and decrease in the traditional export sectors production, and declining balance on trade. The authors stated that expansion of tourism in Queensland State would result in negative impact from international tourism. Furthermore, the study suggested that the Queensland State economy should be depended on traditional export sector which was experiencing a declining trend

A study by Zhou, Yanagida, Chakravorty and Leung (1997) estimated visitor expenditure impact on the economy of Hawaii from a 10% reduction of tourist expenditure. The study compared the results generated from computable general equilibrium and input-output model. They stressed that the distribution of a sector's product would be traced through input-output modelling framework using a system of linear equations, whereas computable general equilibrium (CGE) model represented sectoral complex interdependencies unrestricted by the constraint of linearity, which allowed for resource allocation. Social accounting matrices (SAMs) were employed as the primary data requirements for constructing computable general equilibrium model. The authors referred that the findings which were based on input-output model were similar in magnitude to that of the results of computable general equilibrium, however, generally higher for a hypothetical 10% decrease in tourist spending. Their study found that the sectors directly related to tourism represented statistically the largest effects in terms of economic loss. Output reductions in the input-output model were found to be larger than computable general equilibrium model because latter model allowed reallocation of resources. The study illustrated that computable general equilibrium model would represent price effect and variation in output

Blake (2000) estimated the effect of 10% expansion of tourism in Spain using CGE model. The author estimated that a 10% increase in tourism would result in a 0.05% increase in GDP, 0.61% increase in real exchange rate, and a slight increase household consumption, investment and domestic tourism.. The author found that the benefit received from a 10% tourism expansion would offset an increase in imports and decrease in the value of other exports.

Dwyer, Forsyth and Spurr (2005) assessed a special event's economic impact generated from the Qantas Australian Grand Prix in Australia for the year 2000. They employed computable general equilibrium model and compared the result with input-output model. They found out that input-output model represented a greater impact on real output (\$120.1 million) as compared to computable general equilibrium model (\$24.46 million). They also found that the value-added multiplier and employment multipliers were different in undertaking two models which was 0.844 from input-output analysis and 0.267 from CGE model for valueadded. On the other hand, employment multipliers were 11.548 using input-output analysis and 2.5 using CGE model. The study concluded that funding agencies could benefit from such study as the approach would allow them to decide the economic benefits that would outweigh costs and proper utilization of limited funds under the prevailing alternative

Keynesian model was used by several studies although the version of multipliers derived by this model did not consider any leakages from the economy. The studies that employed

Keynesian model were limited in numbers compared to input-output analysis.

which had a positive relationship with domestic and composite prices.

because of an expansion of international tourism.

opportunities.

**2.4 Keynesian multiplier model** 

Eriksen and Ahmt (1999) employed Keynesian income multiplier model under an inputoutput framework to assess the regional tourism effects for each of 16 Danish counties. Different tourism policies were evaluated in terms of employment, GDP and expenditure pattern of tourists. The measurement of tourism impact was conducted by tourist expenditure surveys. The authors found that foreign tourist generated approximately over 47,000 employments which were one half of the employment derived from one-day tourism. The study also estimated the economic impact of domestic tourism by considering foreign and domestic tourism in terms of substitutes of each other and non-substitutes of each other. When foreign and domestic tourism were assumed to be substitutes, the economic impact of tourists generated 61,652 employments where foreign tourists generated 47,271 jobs and domestic tourists 14,381 jobs.

Vaughan et al. (2000) analysed the economic impact of "agro" and "non-agro" tourism in Exmoor National Park, UK, by employing proportional multiplier analysis which was a combination of input-output and traditional Keynesian model. Three surveys had been conducted to collect the data on operational characteristics of businesses, visitors' expenditure and residents' expenditure in the study area. Tourism impacts on the generation of output, income, employment and their distribution among different sectors of the economy were assessed. The study found that Agro-tourist had an impact of ₤1.7 million in income, ₤5 million in output, and 230 employments.

#### **2.5 Tourism satellite account (TSA)**

In recent years, several researchers used tourism satellite accounting (TSA) model in estimating the economic impact of tourism. Of these studies, Blake et al. (2001), Kuhback and Herauf (2005), Dwyer, Forsyth and Spurr (2007), Smeral (2006), and Ahlert (2007a and 2007b) addressed the issues related to the TSA model that was considered as an extension of input-output model. The latest literature on economic impact on tourism using TSA has been discussed in this section.

Ahlert (2008) employed the results of TSA to analyze the significance of increased inbound tourism on the German economy on GDP, employment, and tax revenue generation. The study asserted that the options for estimating the economic impact were offered within model-based macroeconomic analysis where structural information could be obtained from tourism satellite accounting framework. TSAs had the ability to show maximum linkages to input-output models as well as to represent results originated from product-specific records. The study emphasized on formulating and using dynamic macroeconomic structural models along with trouble-free input-output approach. Some simulation results were obtained by using INFORGE model in determining the total effects of inbound tourism in generating GDP/income, employment, and tax revenue.

Studies that assessed the contribution of tourism through economic impact analysis are increasing over the years which started in 1960's. The literature is evolving as a consequence of government's stressing the importance to develop the economy by means of developing the tourism industry as tourism injects foreign exchange earnings, helps eliminate balance of payment disparity, generates income for the households, and supports employment generation. The studies that were devoted to estimate impact of tourism on different macroeconomic variables held in different locations around the world have been summarized in table 1.


Economic Impact of Tourism –

Studies Year/ Study Area Nature of Analysis Output Income Employment

A Review of Literatures on Methodologies and Their Uses: 1969-2011 287

Value added Import Govt. Revenue Linkages Analysis Balance of Payment Type of Tourist Type of Sector Archer 1995 (Bermuda) Static I-O x x x x x x Archer, & Fletcher 1996 (Seychelles) Static I-O x x x x Andrew 1997 (Cornwall) Static I-O & LP x x Wagner 1997 (Parana, Brazil) SAM x x x Zhou et al. 1997 (Hawaii) Static CGE & I-O x Stynes, Nelson & Lynch 1998 (Michigan) Static I-O x x x Huse et al. 1998 (Norway) Static I-O x x Mistilis, & Dwyer 1999 (Australia) Static I-O x x Frechtling & Hovath 1999 (Washington, DC.) Static I-O (RIMS II) x x x x Eriksen & Ahmt 1999 (Denmark) Keynesian Multiplier x x x Tohamy & Swinscoe 2000 (Egypt) Static I-O x x x x Blake 2000 (Spain) CGE x Vaughan et al. 2000 (UK) Keynesian & static I-O x x x x Kweka et al. 2001 (Tanzania) Static I-O x x x x x x x Yan & Wall 2002 (China) Type I Static I-O x x x x x Chabra, Sills & Cubbage 2003 (North Carolina) Type I Static I-O & SAM x x x Kim et al. 2003 (South Korea) Static I-O x x x x x x x Sun, & Stynes 2004 (Michigan) Static I-O x x x


Economic Impact of Tourism – A Review of Literatures on Methodologies and Their Uses: 1969-2011 287

286 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Value added Import Govt. Revenue Linkages Analysis Balance of Payment Type of Tourist Type of Sector Harmston 1969 (Missouri) Static I-O x Bryden 1973 (Caribbean) Static I-O x x x Archer et al. 1974 (Gwynedd) Static I-O x x x x Armstrong 1974 (Barbados) Static I-O x Diamond 1976 Turkey Static I-O x Liu & Var 1982 (Victoria, BC.) Static I-O, ANOVA x x x Liu & Var 1983 (Victoria, BC.) Static I-O x x x x x x Liu et al. 1984 (Turkey) Static I-O x x x Archer 1985 (Mauritius) Static I-O x x x Ruiz 1985 (Puerto Rico) Static I-O x x Liu 1986 (Hawaii) Static I-O x x x x Fletcher 1989a Static I-O Fasen-maier, et al. 1989 (Texas) Static I-O x x x x x x Heng & Low 1990 (Singapore) Static I-O & Keynesian Multiplier x x x x x x Khan et al. 1990 (Singapore) Static I-O x x x x x x x West 1993 (Queensland) SAM x x x Rashid et al. 1993 (Malaysia) Static I-O x x x x Adams & Parmenter 1995 (Australia) CGE x

Studies Year/ Study Area Nature of Analysis Output Income Employment


Table 1. List of Literatures on Assessing the Economic Impact of Tourism

Economic Impact of Tourism –

impact analysis in different regions of the world.

A Review of Literatures on Methodologies and Their Uses: 1969-2011 289

The above literature survey translated that most of the studies employed input-output framework in assessing the economic impact of tourism whereas only few studies utilized SAM, CGE, and Keynesian model. The construction base of these models heavily relied on input-output table that also acted as the main requirement of Leontief input-output analysis. Assessing the magnitude of tourism impacts on employment, income, and output was the primary concern of most of the past studies (Tyrrell & Johnston, 2006). Although the determination of multipliers on a wide range of macroeconomic variables could be accomplished through economic impact analysis, most tourism studies focused on estimating output, total value-added, employment, and income multipliers (Kim, Scott, Thigpen & Kim, 1998; Burgan & Mules, 1992; Var & Quayson, 1985; Crompton 1999). Besides, several studies evaluated the contribution of tourism in the balance of payment account of economies while some of the studies were devoted to measure the contribution made by types of tourists. The economic impacts on different sectors of the tourism industry were the subject matter of a number of tourism studies, although not many, whereas only few studies, such as the study of Wiersma et al. (2004), Huse et al. (1998) discussed a comparative tourism economic impacts on several locations. It is also evident from the literature survey that input-output model is an ever-present model in conducting economic

The methods, such as input-output model, computable general equilibrium model, social accounting matrix model, Keynesian multiplier model, TSAs etc., were employed in analyzing economic impacts of tourism, in some way each of the methods needed to utilize input-output table as a foundation in estimating the economic impacts of tourism. It is noticeable from the available tourism literature that input-output model is one of the most widely used methods. The summary of literature in table 1 also reveals that past studies were only able to represent the economic impacts of tourism from a static view point where the derivation of dynamic multipliers of several sectors of tourism industry was particularly excluded. Even the most recent method, TSA model which was considered to be the extension of input-output framework, was unable to estimate the indirect effects and intermediate consumption without making adjustments (Smeral, 2005). Therefore, it only provided the effects generated by the direct economic relationship between guest and producer (Smeral, 2006). Underlying the limitation of TSA, World Tourism Organisation (1999) commented that TSA model essentially provided a kind of static analysis that described the interdependence of tourism sector with the rest of the economy. Input-output model was defined as complementary model that could represent complete information about contribution made by tourism to macroeconomic performance (Smeral, 2005 & 2006). In this context, Ahlert (2008) argued that input-output was the only incomparable method which allowed synchronized documentation of all direct and indirect effects of value-added. By addressing the limitations of the past studies (static analysis) that derive multipliers of the tourism industry using input-output model, Dwyer et al. (2004) developed and approached an alternative technique known as the CGE technique to achieve the best practice for evaluating economic effects of tourism. Nevertheless, the CGE model can also be considered as static model due to its incapability to illustrate the dynamic impact of tourism. In addition, there is an existence of a gap of economic impact of tourism literatures that employ both static and dynamic economic impact analysis of tourism together in order to study the comparative aspects of these two analyses. Forecasting based on static input-

**3. Critical assessment of economic impact literatures of tourism** 

2004 (New Hampshire) Static I-O x x Daniels 2004 (North Carolina) SAM x x Albqami 2004 (Saudi Arabia) Static I-O x x x x Lee and Taylor 2005 (South Korea) Static I-O x x x x Bashir & Ahmad 2005 (Malaysia) Static I-O x x x x x Dwyer et al. 2005 (Australia) Static CGE/I-O x x x Oosterha-ven & Fan 2006 (China) Static I-

O/SAM x x x Gerd Ahlert 2008 (Germany) TSA x x x x Contini et al. 2009 (Italy) Static I-O x x Schubert &

Brida

2009

Static I-O &

Simple

Dynamic

x x

CGE

(Small Destination)

Table 1. List of Literatures on Assessing the Economic Impact of Tourism

Studies Year/ Study Area Nature of Analysis Output Income Employment

Value added Import Govt. Revenue Linkages Analysis Balance of Payment Type of Tourist Type of Sector Rashid, & Bashir 2004 (Malaysia) Static Open I-O x x x x x x Martin 2004 (Spain) Keynesian & Static I-O x x x x Daniels et al. 2004 (South Carolina) SAM x Wiersma et al.

#### **3. Critical assessment of economic impact literatures of tourism**

The above literature survey translated that most of the studies employed input-output framework in assessing the economic impact of tourism whereas only few studies utilized SAM, CGE, and Keynesian model. The construction base of these models heavily relied on input-output table that also acted as the main requirement of Leontief input-output analysis. Assessing the magnitude of tourism impacts on employment, income, and output was the primary concern of most of the past studies (Tyrrell & Johnston, 2006). Although the determination of multipliers on a wide range of macroeconomic variables could be accomplished through economic impact analysis, most tourism studies focused on estimating output, total value-added, employment, and income multipliers (Kim, Scott, Thigpen & Kim, 1998; Burgan & Mules, 1992; Var & Quayson, 1985; Crompton 1999). Besides, several studies evaluated the contribution of tourism in the balance of payment account of economies while some of the studies were devoted to measure the contribution made by types of tourists. The economic impacts on different sectors of the tourism industry were the subject matter of a number of tourism studies, although not many, whereas only few studies, such as the study of Wiersma et al. (2004), Huse et al. (1998) discussed a comparative tourism economic impacts on several locations. It is also evident from the literature survey that input-output model is an ever-present model in conducting economic impact analysis in different regions of the world.

The methods, such as input-output model, computable general equilibrium model, social accounting matrix model, Keynesian multiplier model, TSAs etc., were employed in analyzing economic impacts of tourism, in some way each of the methods needed to utilize input-output table as a foundation in estimating the economic impacts of tourism. It is noticeable from the available tourism literature that input-output model is one of the most widely used methods. The summary of literature in table 1 also reveals that past studies were only able to represent the economic impacts of tourism from a static view point where the derivation of dynamic multipliers of several sectors of tourism industry was particularly excluded. Even the most recent method, TSA model which was considered to be the extension of input-output framework, was unable to estimate the indirect effects and intermediate consumption without making adjustments (Smeral, 2005). Therefore, it only provided the effects generated by the direct economic relationship between guest and producer (Smeral, 2006). Underlying the limitation of TSA, World Tourism Organisation (1999) commented that TSA model essentially provided a kind of static analysis that described the interdependence of tourism sector with the rest of the economy. Input-output model was defined as complementary model that could represent complete information about contribution made by tourism to macroeconomic performance (Smeral, 2005 & 2006). In this context, Ahlert (2008) argued that input-output was the only incomparable method which allowed synchronized documentation of all direct and indirect effects of value-added.

By addressing the limitations of the past studies (static analysis) that derive multipliers of the tourism industry using input-output model, Dwyer et al. (2004) developed and approached an alternative technique known as the CGE technique to achieve the best practice for evaluating economic effects of tourism. Nevertheless, the CGE model can also be considered as static model due to its incapability to illustrate the dynamic impact of tourism. In addition, there is an existence of a gap of economic impact of tourism literatures that employ both static and dynamic economic impact analysis of tourism together in order to study the comparative aspects of these two analyses. Forecasting based on static input-

Economic Impact of Tourism –

**5. References** 

tourism) or changes in economic policy.

*Economics*, 27, 985-994.

*Tourism Research,* 24(3), 721-735.

*Research*, 22(4), 918-930.

289-294.

*Tourism Research, 23*, 32-47.

implications. *Tourism Management,* 6(1), 50-54.

5(6), 149-158.

to derive macroeconomic multipliers for tourism industry.

A Review of Literatures on Methodologies and Their Uses: 1969-2011 291

respective authorities dealing with diversifying tourist attractions. Therefore, using such a method to conduct economic impact analysis can provide valuable information to policymakers about the economic benefit as a result of an increasing economic activity (e. g.

Therefore, the analysis in viewing the contributions of tourism should be concerned with estimating the economic impacts of tourism. For this reason, there is a need to conduct economic impact analysis of tourism in order to identify tourism's performance in the growth and development process of the economy and its contribution in generating output, income, employment, value-added, import, and tax revenue at three different levels (direct, indirect and induced). There are several advantages of input-output analysis as pointed out by Fletcher (1989b) and Daniels (2004). They include: 1) it operates under a general equilibrium framework; 2) it provides a comprehensive view of a given economy; 3) it pays attention on sectoral interdependencies; 4) the structure of this analysis is flexible that allows researchers in making decisions such as aggregation choices; 5) it consider uniform treatment of each sector to reduce subjectivity; 6) it enhances data availability; and 7) it allows impacts of tourism to be viewed at direct, indirect, and induced levels. Therefore, economic impacts studies of tourism should utilize static and dynamic input-output model

Adams, P. D., and Parmenter, B. R. (1995). An applied general equilibrium analysis of the

Ahlert, G. (2007a). The contribution of tourism to employment in Germany - Assessment

Ahlert, G. (2007b). Methodological aspects of preparing the German TSA, empirical findings

Ahlert, G. (2008). Estimating the economic impacts of an increase in inbound tourism on the German economy using TSA results. *Journal of Travel Research*, 47(2), 225-234. Albqami, R. (2004). *Economic Impact of Tourism Sector on Saudi Arabian Economy* [online].

Andrew, B. P. (1997). Tourism and the economic development of Cornwall. *Annals of* 

Archer, B. H. (1985). Tourism in Mauritius: An economic impact study with marketing

Archer, B. (1995). Importance of tourism for the economy of Bermuda. *Annals of Tourism* 

Archer, B., & Fletcher, J. (1996). The economic impact of tourism in the Seychelles. *Annals of* 

Archer, B. H., & Owen, C. (1971). Towards a tourist regional multiplier. *Regional Studies*, 5,

Babcock, M. W. (1993). A survey approach to developing an input-output model. In D. M.

*to economic development* (pp. 57-69). Boulder, CO: Westview.

Otto & T. G. Johnson (Eds.), *Microcomputer-based input-output modelling: Applications* 

and initial reactions. *Tourism Economics,* 13(2), 275-287.

economic effects of tourism in a quite small, quite open economy. *Applied* 

within a TSA employment module & impact analysis. *E-Review of Tourism Research*,

Available: http://www.iioa.org/pdf/Intermediate-2004/501.pdf [2008, February 27]

output analysis has been considered a kind of significantly misleading method in impact studies that should be avoided. Therefore, past studies were unable to provide information in directing policies precisely.

In this context, to overcome the considerable limitation of forecasting reflected in previous studies, it is essential to employ dynamic input-output analysis to estimate dynamic multipliers of tourism industry along with the utilization of static input-output analysis. There is existence of studies that estimated dynamic multipliers using Leontief dynamic input-output analysis. Such as, Liew (1977) estimated the dynamic multipliers for Oklahoma regional economy, USA to demonstrate a comparative study of different sectors dynamic multipliers. The support for using the dynamic input-output analysis to estimate dynamic multipliers is well documented in literature except tourism economics. In this respect, Liew (2000) asserted that dynamic multipliers can be treated as an efficient method to illustrate the consequences of a change in final demand (for example, the expenditure effects by state or federal government). Therefore, policymakers of governments, businesses, and consumers can be benefited from the estimated dynamic multipliers.

Richardson (1972) pointed out that economic policy makers are more attracted to the utilization of dynamic input-output model as it is useful when dimension of forecasting period increase in length. The use of Leontief dynamic input-output model bears significance on the view point of both theoretical and empirical aspects (Liew, 2000). Specifically, the existing literature suggested that there is a lack of studies that has been taken into consideration the economic impact of tourism on a wide range of macroeconomic variables into three distinct directions (direct, indirect, and induced effects) while there is prevailing a clear deficiency of dynamic input-output analysis.

#### **4. Conclusion**

By acknowledging the above literature, it can be admitted that economists and planners have applied different models and techniques for measuring the economic impacts of tourism on regional, local and national economies. The model or technique that is to be used in a particular situation depends upon the objectives of the analysis, the types of problems found in the subject region, data availability, and conditions assumed in the study. It is evident from the literature cited above that input-output model is predominant among the models that are being used to estimate multipliers. Input-output model has become more popular and widely adopted because it is cost effective and simple in comparison with CGE models (Kasimati, 2003). Input-output method has been considered as a useful technique for estimating the complete performance of tourism in terms of direct, indirect, and induced impacts of tourism on generating output, income, employment, value-added, import, and tax revenue. However, this method is considered to be limited to inter-sectoral transactions (Pyatt & Round 1985). Acknowledging the limitations of the method, whether it is exploratory or hypothetical, Babcock (1993) asserted that it will sustain and gain persistent popularity because of its narrative ability and usage adaptability. Although the method has limitations, like other methods, it also has some advantages in measuring the direct, indirect and induced impacts of tourism in terms of its usage flexibility. The method will continue to be a practical tool for conducting economic impact analysis if employed cautiously (Daniels, 2004). Daniels also asserted that the benefits of input-output analysis could be utilized to make strategic policy formulation and useful for community planners, coordinators, respective authorities dealing with diversifying tourist attractions. Therefore, using such a method to conduct economic impact analysis can provide valuable information to policymakers about the economic benefit as a result of an increasing economic activity (e. g. tourism) or changes in economic policy.

Therefore, the analysis in viewing the contributions of tourism should be concerned with estimating the economic impacts of tourism. For this reason, there is a need to conduct economic impact analysis of tourism in order to identify tourism's performance in the growth and development process of the economy and its contribution in generating output, income, employment, value-added, import, and tax revenue at three different levels (direct, indirect and induced). There are several advantages of input-output analysis as pointed out by Fletcher (1989b) and Daniels (2004). They include: 1) it operates under a general equilibrium framework; 2) it provides a comprehensive view of a given economy; 3) it pays attention on sectoral interdependencies; 4) the structure of this analysis is flexible that allows researchers in making decisions such as aggregation choices; 5) it consider uniform treatment of each sector to reduce subjectivity; 6) it enhances data availability; and 7) it allows impacts of tourism to be viewed at direct, indirect, and induced levels. Therefore, economic impacts studies of tourism should utilize static and dynamic input-output model to derive macroeconomic multipliers for tourism industry.

#### **5. References**

290 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

output analysis has been considered a kind of significantly misleading method in impact studies that should be avoided. Therefore, past studies were unable to provide information

In this context, to overcome the considerable limitation of forecasting reflected in previous studies, it is essential to employ dynamic input-output analysis to estimate dynamic multipliers of tourism industry along with the utilization of static input-output analysis. There is existence of studies that estimated dynamic multipliers using Leontief dynamic input-output analysis. Such as, Liew (1977) estimated the dynamic multipliers for Oklahoma regional economy, USA to demonstrate a comparative study of different sectors dynamic multipliers. The support for using the dynamic input-output analysis to estimate dynamic multipliers is well documented in literature except tourism economics. In this respect, Liew (2000) asserted that dynamic multipliers can be treated as an efficient method to illustrate the consequences of a change in final demand (for example, the expenditure effects by state or federal government). Therefore, policymakers of governments, businesses, and

Richardson (1972) pointed out that economic policy makers are more attracted to the utilization of dynamic input-output model as it is useful when dimension of forecasting period increase in length. The use of Leontief dynamic input-output model bears significance on the view point of both theoretical and empirical aspects (Liew, 2000). Specifically, the existing literature suggested that there is a lack of studies that has been taken into consideration the economic impact of tourism on a wide range of macroeconomic variables into three distinct directions (direct, indirect, and induced effects) while there is

By acknowledging the above literature, it can be admitted that economists and planners have applied different models and techniques for measuring the economic impacts of tourism on regional, local and national economies. The model or technique that is to be used in a particular situation depends upon the objectives of the analysis, the types of problems found in the subject region, data availability, and conditions assumed in the study. It is evident from the literature cited above that input-output model is predominant among the models that are being used to estimate multipliers. Input-output model has become more popular and widely adopted because it is cost effective and simple in comparison with CGE models (Kasimati, 2003). Input-output method has been considered as a useful technique for estimating the complete performance of tourism in terms of direct, indirect, and induced impacts of tourism on generating output, income, employment, value-added, import, and tax revenue. However, this method is considered to be limited to inter-sectoral transactions (Pyatt & Round 1985). Acknowledging the limitations of the method, whether it is exploratory or hypothetical, Babcock (1993) asserted that it will sustain and gain persistent popularity because of its narrative ability and usage adaptability. Although the method has limitations, like other methods, it also has some advantages in measuring the direct, indirect and induced impacts of tourism in terms of its usage flexibility. The method will continue to be a practical tool for conducting economic impact analysis if employed cautiously (Daniels, 2004). Daniels also asserted that the benefits of input-output analysis could be utilized to make strategic policy formulation and useful for community planners, coordinators,

consumers can be benefited from the estimated dynamic multipliers.

prevailing a clear deficiency of dynamic input-output analysis.

in directing policies precisely.

**4. Conclusion** 


Economic Impact of Tourism –

*of Tourism Research,* 17(3), 408-409.

*Regional Science*, 11(3), 94-106.

*Travel Research,* 25(1), 2-9.

*Management*, 3(3), 177-187.

*Management,* 5(4), 280-287.

The World Bank Press.

*Tourism Management,* 6(1), 61-65.

*Analysis*, 10(1), 55-64.

99-119.

3(1), 29-39.

*Journal of Travel Research*, 22(2), 8-15.

Paper No. 27.2004) [online]. Available:

*International Journal of Tourism Research*, 8(5), 347-354.

*Festival Management and Event Tourism*, 5, 51-58.

2004. *BEA Survey of Current Business*, 2005(6), 17-29.

http://www.Nottingham.ac.uk/ttri [2008, June 26]

A Review of Literatures on Methodologies and Their Uses: 1969-2011 293

Kasimati, E. (2003). Economic aspects and the summer Olympics: A review of related

Khan, H., Chou, F. S., & Wong, K. C. (1990). Tourism multiplier effects on Singapore. *Annals* 

Kim, C. W., Scott, D., Thigpen, J.F., & Kim, S. (1998). Economic impact of a birding festival.

Kim, S. S., Chon, K., & Chung, K. Y. (2003). Convention industry in South Korea: An

Kuhbach, P. D., & G. A. Herauf (2005). US travel and tourism satellite accounts for 2001-

Kweka, J., Morrissey, O., & Blake, A. (2001). *Is tourism a key sector in Tanzania? Input-output* 

Liew, C. K (1977). Dynamic multipliers for a regional input-output model. *The Annals of* 

Liu, J. C. (1986). Relative economic contributions of visitor groups in Hawaii, *Journal of* 

Liu , J. C., & Var, T., (1982). Differential multipliers for the accommodation sector. *Tourism* 

Liu, J. C., & Var, T., (1983). The economic impact of tourism in metropolitan Victoria, BC.

Liu, J. C., Var, T., & Timur, A. (1984). Tourist income multiplier for Turkey. *Tourism* 

Martin, R.H. (2004). *Impact of tourism consumption on GDP. The role of imports* (FEEM Working

 http://papers.ssrn.com/sol3/papers.cfm?abstract\_id=504505 [2008, December 28]. Mistilis, N., & Dwyer, L. (1999). Tourism gateways and regional economies: The distributional impacts of MICE. *International Journal of Tourism Research*, 1, 441-457. Oosterhaven, J., & Fan, T. (2006). Impact of international tourism on the Chinese economy.

Pyatt, G., & Round, J. (1985). *Social accounting matrices: A basis for planning*. Washington, DC:

Rashid, Z. A., Rahman, A. A. A., Othman, M. S., & Suib, A. (1993). Tourism impact analysis

Rashid, Z. A., & Bashir, M. S. (2004). Economic impacts of changing tourist profile in

Schubert, S. F. & Brida, J. G. (2009). Macroeconomic effects of changes in tourism demand: A

Smeral, E. (2005). The economic impact of tourism: Beyond Satellite Accounts. *Tourism* 

Richardson, H. W. (1972). *Input-output regional econ*omics. New York: John Wiley & Sons. Ruiz, A. L. (1985). Tourism and the economy of Puerto Rico: An input-output approach.

simple dynamic model. *Tourism Economics*, 15(3), 591-613.

– an inter-sectoral analysis of the Malaysian economy. *Jurnal Ekonomy Malaysia*, 27,

Malaysia: An inter-industrial analysis. *ASEAN Journal on Hospitality and Tourism*,

*analysis of income, output, employment and tax Revenue* (Christel Dehaan, Tourism and Travel Research Institute discussion paper 2001/1) [Online]. Available:

research. *The International Journal of Tourism Research*, 5(6), 433-444.

economic impact analysis. *Tourism Management*, 24(5), 533-541.

Bashir, M. S., and Ahmad, N. (2005). Multiplier effects of Malaysia's tourists expenditure patterns [online]. Available:

http://pkukmweb.ukm.my/miora/BIOM/multeffect.pdf [2011, August 13]


Bashir, M. S., and Ahmad, N. (2005). Multiplier effects of Malaysia's tourists expenditure

Blake, A., Durbarry, R., Sinclair, M., & Sugiyarto, G. (2001). *Modelling tourism and travel using* 

Burgan, B., & T. Mules (1992). Economic impact of sporting events. *Annals of Tourism* 

Chhabra, D., Sills, E., & Cubbage, F. W. (2003). The significance of festivals to rural

Contini, C., Scarpellini, P., & Polidori, R. (2009). Agri-tourism and rural development: The

Crompton, J. L. (1999). *Measuring the economic impact of visitors to sports tournaments and special events.* Ashburn, VA: National Recreation and Park Association. Daniels, M. J. (2004). Beyond input-output analysis: Using occupation based modeling to

Daniels, M. J., Normans, W. C., & Henry, M. S. (2004). Estimating income effects of a sport

Dwyer, L., Forsyth, P. & Spurr, R. (2004). Evaluating tourism's economic effects: New and

Dwyer, L., Forsyth, P., & Spurr, R. (2005). Estimating the impacts of special events on an

Eadington, W. R., & Redman, M. (1991). Economics and tourism. *Annals of Tourism Research*,

Eriksen, L., & Ahmt, T. (1999). Measuring and modeling the regional impact of tourism in

Fesenmaier, D.R., Jones, L., Um, S. & Ozuna Jr, T. (1989). Assessing the economic impact

Fletcher, J. E. (1989). Input-output analysis and tourism impact studies. *Annals of Tourism* 

Frechtling, D. C. & Horvath, E. (1999). Estimating the multiplier effects of tourism

Harmston, K. F. (1969). The importance of 1967 tourism to Missouri. *Business and Government* 

Heng, T. M., & Low, L. (1990). Economic impact of tourism in Singapore. *Annals of Tourism* 

Huse, M., Gustavsen, T., & Almedal, S. (1998). Tourism impact comparisons among

Norwegian towns. *Annals of Tourism Research*, 25(3), 721-738.

of outdoor recreation travel to the Texas gulf coast. *Journal of Travel Research,*

expenditures on a local economy through a regional input-output model. *Journal of* 

Denmark. *International Journal of Tourism Research*, 1(5), 313-327.

Carolina. *Journal of Travel Research*, 41(4), 421-427.

Low-Valdelsa, Italy. *Tourism Review*, 64(4), 27-36.

tourism event. *Annals of Tourism Research*, 31(1), 180-199.

old approaches. *Tourism Management*, 25(3), 307-317.

economy. *Journal of Travel Research*, 43(4), 351-359.

Institute Discussion Paper No. 2000-2). Nottingham, UK: University of

*tourism satellite accounts and tourism policy, and forecasting models* (Tourism and Travel Research Institute Discussion Paper No. 2001-4). Nottingham, UK:

economies: Estimating the economic impacts of Scottish highland games in North

estimate wages generated by a sport tourism event. *Journal of Travel Research*, 43(1),

 http://pkukmweb.ukm.my/miora/BIOM/multeffect.pdf [2011, August 13] Blake, A. (2000). *The economic effects of tourism in Spain* (Tourism and Travel Research

patterns [online]. Available:

University of Nottingham.

*Research*, 19(4), 700-710.

Nottingham.

75-82.

18(1), 41-56.

28(1), 18–23.

*Research*, 16(4), 514-529.

*Review,* 10(3), 5-12.

*Research,* 17(2), 246-269.

*Travel Research*, 37(4), 324-332.


http://papers.ssrn.com/sol3/papers.cfm?abstract\_id=504505 [2008, December 28].


**15** 

*Italy* 

**Carrying Capacity of Tourism System:** 

**Constraints Towards Sustainability** 

*University of Milano-Bicocca, Department of Environmental Science,* 

Valentina Castellani and Serenella Sala

**Assessment of Environmental and Management** 

The tourism sector accounts nowadays for about 10% of world GDP (source: World Travel & Tourism Council – WTTC) and it is widely acknowledged that tourism activities depend highly on the quality of natural resources (see, among others, Inskeep, 1991). Thus, the aim of sustainable tourism development plans, in order to reach sustainable development goals, should be the decoupling of economic growth from natural environment depletion, through the definition of more sustainable patterns of production and consumption in tourism activities, as also stated by international and European resolutions about sustainable development (see, for instance, the Reviewed Strategy for Sustainable Development, the Integrated Product Policy, the Action Plan on the Sustainable Consumption and Production

Considering that to reach this goal and to set targets for improvement the basic requirement is to investigate the physical and managing limits of the system, carrying capacity evaluation seems to be a useful concept to support the definition of local management

Moreover, sustainable development, and particularly the development and application of indicators able to measure sustainability of specific activities, require a multidisciplinary approach, that allows us to obtain results for specific aspects (Farrell & Twining-Ward, 2004). As underlined by some authors when referring to the triple bottom line approach (Buckley, 2003; Elkington, 1997), it is necessary to develop new methodologies, which are able to widen and to integrate analysis in a systemic vision, through instruments that allow the evaluation of different aspects in a comprehensive manner. An accurate evaluation of the tourism sector, for instance, necessarily involves aspects related to productive activities (production of goods and services for tourists), the construction and management of tourist facilities (hospitality and leisure structures, management of mobility), consumption of resources (energy consumption, water consumption and wastewater treatment, waste management) and the effects of tourism activities on the quality of life of the local community (availability of services, crowding, pollution). All these aspects are covered by a recent study by the authors (Castellani & Sala, 2012), in which the relevance of integration of

and Sustainable Industrial Policy, the Renewed EU Tourism Policy).

strategies and plans for sustainable tourism.

**1. Introduction** 


http://web4.canr.msu.edu/mgm2/econ/index.htm [2006, May 16]


http://www.fs.fed.us/ne/newtown\_square/publications/technical\_reports/pdfs /2005/326papers/wiersma326.pdf [2007, August 23]


### **Carrying Capacity of Tourism System: Assessment of Environmental and Management Constraints Towards Sustainability**

Valentina Castellani and Serenella Sala *University of Milano-Bicocca, Department of Environmental Science, Italy* 

#### **1. Introduction**

294 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Smeral, E. (2006). Tourism Satellite Accounts: A critical assessment. *Journal of Travel Research*,

Stynes, D., Nelson, C. R., & Lynch, J. A. (1998). *State and regional economic impacts of* 

Sun, Y. Y., & Stynes, D. J. (2004). Economic impact of the pictured rocks national lakeshore

Tohamy, S., & Swinscoe, A. (2000). *The economic impact of tourism in Egypt* (Egyptian Center

Tyrrell, J. T. & Johnston, J. R. (2006). The economic impacts of tourism: A special issue.

UN (1999). *Handbook of input-output table compilation and analysis*. New York: United Nation. Var, T., & Quayson, J. (1985). The multiplier impact of tourism in the Okanagan. *Annals of* 

Vaughan, D. R., Farr, H., & Slee, R. W. (2000). Estimating and interpreting the local

Wagner, J. E. (1997). Estimating the economic impacts of tourism. *Annals of Tourism Research*,

West, G. R. (1993). Economic significance of tourism in Queensland. *Annals of Tourism* 

Wiersma, J., Morris, D., & Robertson, R. (2004). Variations in economic multipliers of the

Yan, M., & Wall, G. (2002). Economic perspectives on tourism in China. *Tourism and* 

Zhou, D., Yanagida, J. F., Chakravorty, U., & Leung, P. (1997). Estimating economic impacts

*Research Symposium*, NE 326, 102-108 [online]. Available:

/2005/326papers/wiersma326.pdf [2007, August 23]

from tourism. *Annals of Tourism Research*, 24(1), 76-89.

economic benefits of visitor spending: An explanation. *Leisure Studies*, 19(2), 95-118.

tourism sector in New Hampshir*e*. *Proceedings of the 2004 North-eastern Recreation* 

http://www.fs.fed.us/ne/newtown\_square/publications/technical\_reports/pdfs

and the estimation Errors. *Proceedings of the 2004 North-eastern Recreation Research* 

http://fama2.us.es:8080/turismo/turismonet1/economia%20del%20turismo/turis mo%20zonal/africa/ECONOMIC%20IMPACT%20OF%20TOURISM%20IN%20EG

http://web4.canr.msu.edu/mgm2/econ/index.htm [2006, May 16] Sugiyarto, G., Blake, A., & Sinclair, M. T. (2003). Tourism and Globalization – Economic

Impact in Indonesia. *Annals of Tourism Research*. 30(3), 683-701.

for Economic Studies Working Paper no. 40) [online]. Available:

*snowmobiling in Michigan* [Online]. Available:

*Symposium*, NE, 326, 98-102.

YPT.PDF [2008, August 18].

*Journal of Travel Research*, 45(3), 3-7.

*Tourism Research*, 12(4), 497-513.

*Hospitality Research*, 3(3), 257-275.

24(3), 592-608.

*Research*, 20(3), 490-504.

45(1), 92-98.

The tourism sector accounts nowadays for about 10% of world GDP (source: World Travel & Tourism Council – WTTC) and it is widely acknowledged that tourism activities depend highly on the quality of natural resources (see, among others, Inskeep, 1991). Thus, the aim of sustainable tourism development plans, in order to reach sustainable development goals, should be the decoupling of economic growth from natural environment depletion, through the definition of more sustainable patterns of production and consumption in tourism activities, as also stated by international and European resolutions about sustainable development (see, for instance, the Reviewed Strategy for Sustainable Development, the Integrated Product Policy, the Action Plan on the Sustainable Consumption and Production and Sustainable Industrial Policy, the Renewed EU Tourism Policy).

Considering that to reach this goal and to set targets for improvement the basic requirement is to investigate the physical and managing limits of the system, carrying capacity evaluation seems to be a useful concept to support the definition of local management strategies and plans for sustainable tourism.

Moreover, sustainable development, and particularly the development and application of indicators able to measure sustainability of specific activities, require a multidisciplinary approach, that allows us to obtain results for specific aspects (Farrell & Twining-Ward, 2004). As underlined by some authors when referring to the triple bottom line approach (Buckley, 2003; Elkington, 1997), it is necessary to develop new methodologies, which are able to widen and to integrate analysis in a systemic vision, through instruments that allow the evaluation of different aspects in a comprehensive manner. An accurate evaluation of the tourism sector, for instance, necessarily involves aspects related to productive activities (production of goods and services for tourists), the construction and management of tourist facilities (hospitality and leisure structures, management of mobility), consumption of resources (energy consumption, water consumption and wastewater treatment, waste management) and the effects of tourism activities on the quality of life of the local community (availability of services, crowding, pollution). All these aspects are covered by a recent study by the authors (Castellani & Sala, 2012), in which the relevance of integration of

Carrying Capacity of Tourism System: Assessment

of Environmental and Management Constraints Towards Sustainability 297

In addition, it is necessary to consider that the impact generated by tourism activities is strictly dependent on the type of tourism which is predominant in the destination and on tourist behaviour. Each tourist visiting the destination generates a different amount of impact (waste production, energy and water consumption, land use, etc) which is dependent on numerous factors, such as the type of activities undertaken during the holiday, the length of stay, etc. Nevertheless, it has to be considered that the type of tourist services available for tourists influence the possibility for them to adopt sustainable behaviours: tourists make consumption choices which are limited by the effective availability of sustainable products and services and are determined by their environmental consciousness and responsibility. This implies that it is not possible to assess the sustainability of a destination in an absolute manner, but it is more useful to define scenarios for the evaluation, considering possible patterns regarding the production

Moreover, considering that even eco-tourism activities generate, undoubtedly, some impact on the area where they take place, to assure a sustainable development of the tourism sector it is necessary that the planning of tourism development of a destination takes into consideration the relationship between tourism activities and the local environment (from natural, economic and social points of view). Therefore, it should be based on a robust analysis of environmental, social and economic conditions of the area and on an evaluation of existing physical, economic and social limits to current and potential development of

As illustrated in section 2, tourism, like every kind of human activity, causes changes in environmental conditions. In order to evaluate the consequences of the impact of tourism activities it is necessary to know the characteristics of the environment where they take place and especially its resilience, which is the magnitude of disturbance that a system can experience before it shifts into a different state of equilibrium (Holling, 1973). Indeed, carrying capacity concept is linked with resilience and rises from the necessity to establish what is the maximum acceptable level of impact for the environment or for one of its

From an ecological perspective, carrying capacity is "the maximum number of individuals of a given species that a given habitat can support without being permanently damaged" (Odum, 1989). If we consider the application of this concept to the relationship between natural and social (or human) systems, we can also define carrying capacity as the ability of natural and man-made systems to support the demands of various uses without degrading the natural, cultural and social environment (Abernethy, 2001; Godschalk & Parker, 1975; Oh et al., 2002). In order to provide useful support to operational approaches oriented to decision-making, carrying capacity should be the scientific concept that helps to identify the maximum

tourist activities, i.e. an assessment of the actual carrying capacity of the destination.

components and the capability of recovery back to the previous condition.

informed about the proper way to behave in such a context.

(tourism offer) and the consumption (tourism demand) sides.

**3. Carrying capacity of tourist systems** 

the use of local resources and services (use of drinkable water and wastewater treatment plants, air pollution, noise pollution, traffic, crowding, etc.). Furthermore, when natural and protected areas are involved, the presence of a high number of visitors can cause disturbance to fauna and flora, especially when visitors are not well

methodologies (e.g. Life Cycle Assessment and Ecological Footprint) in order to answer different planning enquiries is highlighted.

Starting from these considerations, the present research focuses on the evaluation of sustainability in the tourism sector with the aim to develop a method for assessing the physical and environmental carrying capacity of tourism destinations, as a tool to analyze the sustainability of the current situation and to determine to which extent a rise in visitors number could affect the quality of the environment, the availability of resources and the quality of public services. The final aim of the study is to provide results supported by quantitative data, overcoming the qualitative approach, which is more common in tourism carrying capacity evaluation (Prato, 2001).

#### **2. Tourism and sustainability**

Tourism can generate both positive and negative effects on the areas where visiting and leisure activities take place. It can be a positive element for the local economy of the tourist destination, but it can also generate some externalities (positive or, more frequently, negative) that are not included in the local economic balance and that can affect the quality of the visitors' experience (Casagrandi & Rinaldi, 2002; Gössling & Hall, 2005; Mathieson & Wall, 1982; Saarinen, 2006). Therefore, it is important that tourism planning, carried out by local decision makers, assures a good level of conservation of natural resources and mitigates the impacts that tourism necessarily entails.

If managed in a responsible and sustainable way, tourism can be a motivating force for the conservation of local heritage; on the other hand, if the strategy adopted for tourism development has the sole aim of getting large and immediate economic results through the uncontrolled growth of the tourist flow, it will lead to a rapid exploitation of the destination, which, after a short period, will become spoilt and no longer attractive (Khan, 1998; Manning, 2002).

Impacts related to tourism activities can be divided into two main categories (May, 1991).

	- a. loss of soil previously used for agriculture, pasture or other activities;
	- b. necessity to build new roads to connect new tourist structures or to improve and enlarge existing roads to enable them to cope with an increased level of traffic. It is important to consider that these kinds of impact are persistent, because tourist structures, often built on a scale to cope with a wider tourist flow, remain in the territory, even though it is almost empty, during the rest of the year;
	- c. resource consumption and pollution (emissions, waste water and solid waste production).

methodologies (e.g. Life Cycle Assessment and Ecological Footprint) in order to answer

Starting from these considerations, the present research focuses on the evaluation of sustainability in the tourism sector with the aim to develop a method for assessing the physical and environmental carrying capacity of tourism destinations, as a tool to analyze the sustainability of the current situation and to determine to which extent a rise in visitors number could affect the quality of the environment, the availability of resources and the quality of public services. The final aim of the study is to provide results supported by quantitative data, overcoming the qualitative approach, which is more common in tourism

Tourism can generate both positive and negative effects on the areas where visiting and leisure activities take place. It can be a positive element for the local economy of the tourist destination, but it can also generate some externalities (positive or, more frequently, negative) that are not included in the local economic balance and that can affect the quality of the visitors' experience (Casagrandi & Rinaldi, 2002; Gössling & Hall, 2005; Mathieson & Wall, 1982; Saarinen, 2006). Therefore, it is important that tourism planning, carried out by local decision makers, assures a good level of conservation of natural resources and

If managed in a responsible and sustainable way, tourism can be a motivating force for the conservation of local heritage; on the other hand, if the strategy adopted for tourism development has the sole aim of getting large and immediate economic results through the uncontrolled growth of the tourist flow, it will lead to a rapid exploitation of the destination, which, after a short period, will become spoilt and no longer attractive (Khan, 1998;

Impacts related to tourism activities can be divided into two main categories (May, 1991).

a. loss of soil previously used for agriculture, pasture or other activities;

territory, even though it is almost empty, during the rest of the year;

1. Impacts due to the building of hospitality structures (hotels, restaurants, camping sites) and the production of goods and services for tourists; which can be summarized as the:

b. necessity to build new roads to connect new tourist structures or to improve and enlarge existing roads to enable them to cope with an increased level of traffic. It is important to consider that these kinds of impact are persistent, because tourist structures, often built on a scale to cope with a wider tourist flow, remain in the

c. resource consumption and pollution (emissions, waste water and solid waste

2. Impacts due to the presence of tourists and, generally, to their activities in the area. The presence of tourists can generate two main kinds of problem: the production of solid waste and wastewaters (which imply a cost for the collection and disposal systems, which is paid for by the local community and the need for the organisation of a service of collection scaled to the maximum volume generated during the year, i.e. at the peak of the tourist season); and the possibility of conflict between residents and tourists in

different planning enquiries is highlighted.

carrying capacity evaluation (Prato, 2001).

mitigates the impacts that tourism necessarily entails.

**2. Tourism and sustainability** 

Manning, 2002).

production).

the use of local resources and services (use of drinkable water and wastewater treatment plants, air pollution, noise pollution, traffic, crowding, etc.). Furthermore, when natural and protected areas are involved, the presence of a high number of visitors can cause disturbance to fauna and flora, especially when visitors are not well informed about the proper way to behave in such a context.

In addition, it is necessary to consider that the impact generated by tourism activities is strictly dependent on the type of tourism which is predominant in the destination and on tourist behaviour. Each tourist visiting the destination generates a different amount of impact (waste production, energy and water consumption, land use, etc) which is dependent on numerous factors, such as the type of activities undertaken during the holiday, the length of stay, etc. Nevertheless, it has to be considered that the type of tourist services available for tourists influence the possibility for them to adopt sustainable behaviours: tourists make consumption choices which are limited by the effective availability of sustainable products and services and are determined by their environmental consciousness and responsibility. This implies that it is not possible to assess the sustainability of a destination in an absolute manner, but it is more useful to define scenarios for the evaluation, considering possible patterns regarding the production (tourism offer) and the consumption (tourism demand) sides.

Moreover, considering that even eco-tourism activities generate, undoubtedly, some impact on the area where they take place, to assure a sustainable development of the tourism sector it is necessary that the planning of tourism development of a destination takes into consideration the relationship between tourism activities and the local environment (from natural, economic and social points of view). Therefore, it should be based on a robust analysis of environmental, social and economic conditions of the area and on an evaluation of existing physical, economic and social limits to current and potential development of tourist activities, i.e. an assessment of the actual carrying capacity of the destination.

#### **3. Carrying capacity of tourist systems**

As illustrated in section 2, tourism, like every kind of human activity, causes changes in environmental conditions. In order to evaluate the consequences of the impact of tourism activities it is necessary to know the characteristics of the environment where they take place and especially its resilience, which is the magnitude of disturbance that a system can experience before it shifts into a different state of equilibrium (Holling, 1973). Indeed, carrying capacity concept is linked with resilience and rises from the necessity to establish what is the maximum acceptable level of impact for the environment or for one of its components and the capability of recovery back to the previous condition.

From an ecological perspective, carrying capacity is "the maximum number of individuals of a given species that a given habitat can support without being permanently damaged" (Odum, 1989). If we consider the application of this concept to the relationship between natural and social (or human) systems, we can also define carrying capacity as the ability of natural and man-made systems to support the demands of various uses without degrading the natural, cultural and social environment (Abernethy, 2001; Godschalk & Parker, 1975; Oh et al., 2002).

In order to provide useful support to operational approaches oriented to decision-making, carrying capacity should be the scientific concept that helps to identify the maximum

Carrying Capacity of Tourism System: Assessment

rather than scientific theory.

of the destination.

**4. Methodology** 

subjects working on sustainable solutions.

areas.

of Environmental and Management Constraints Towards Sustainability 299

In the research literature there are only a few attempts to make the carrying capacity concept operational, defining a framework in order to obtain numerical standards for the destination, as a management tool that enables decision makers to implement the results of the assessment in the planning process (Clivaz et al., 2004; Huges, 2002; Trumbic, 2005). Moreover, there are several models such as Visitor Impact Management (VIM) (Graefe & Kuss, 1990), Visitor Experience and Resource Protection (VERP) (US Department of the Interior, 1997) and Tourism Optimization Management Model (TOMM) (Manidis Roberts Consultants, 1997), that, even though they represent an attempt to combine scientific expertise and public-held knowledge, to give a quantitative evaluation of the limits existing to tourism development in the destinations, they are more decision-making frameworks

Thus the challenge in tourism carrying capacity research is the definition of a conceptual model that could be applicable to all kinds of tourism areas and that allows to select indicators and to define standards that are relevant for each specific destination. As highlighted by the guidelines developed by UNEP - PAP/RAC (1997), a good method for carrying capacity assessment should be able to: 1) consider the priorities of the area under investigation (e.g. involving decision makers and local experts in the definition of indicators and standards at a local scale); 2) identify local constraints to tourism development, balancing the demand of new tourist infrastructures and the necessity to protect local environment, also because it could represent an important attraction factor; 3) select a set of indicators that can be useful to all tourism sector managers and that can be easily applicable, with well defined sources (i.e. the availability and quality of data should be checked, to assure the possibility of monitoring through time); 4) define scenarios for the development

According to these recommendations, the present study suggests a methodology for tourism carrying capacity assessment focussed on environmental and management issues, applied to two tourist areas in northern Italy, which are characterized by the presence of protected

The methodology developed for this study is based on an evaluative procedure inspired by the DPSIR model (Drivers, Pressures, State, Impacts, Responses), as it is useful to underline which are the drivers of impacts and to define which is the most useful dataset to describe current and future scenarios for the area under investigation. The conceptual DPSIR model, developed by the European Environmental Agency (EEA, 1999), highlights causal links and relationships between human activities, pressures on the environment and impacts on ecosystems and human health. In order to address local policies, the model also includes the responses, i.e. promising measures to reduce the extent of drivers and pressures and improving the state of ecosystems and mitigating impacts. It is possible to identify several kinds of responses involving different actors: planning strategies defined by decision makers, technical solutions (e.g. BAT); education and communication strategies among stakeholders and, finally, the involvement of all local actors in a participatory process, with the aim of defining a commonly shared planning strategy and of building a network of

acceptable level of human activities, population growth, land use and physical development that can be sustained by the area under investigation without causing irreversible damage to the environment. In the field of sustainable development strategies and in spatial planning processes, as it is for sustainable tourism planning, this implies that the evaluation is made considering not only the availability and quality of natural resources, but also the characteristics of the existing infrastructures, land use and tourist facilities (Oh et al., 2005).

Indeed, the purpose of the evaluation of the carrying capacity of a destination is the measurement of the threshold over which alteration due to tourism activities becomes unacceptable for the entire system (composed by natural and man-made resources). The World Tourism Organization has defined Tourism Carrying Capacity as "the maximum number of persons which could visit a location within a given period, such that local environmental, physical, economic, and socio-cultural characteristics are not compromised, and without reducing tourist satisfaction" (WTO, 1999).

This definition of the carrying capacity of a destination led to some attempts to develop quantitative carrying capacity assessment by defining a number of tourists which represents the limit beyond which the degradation of the destination occurs (see, among others, Brown & Turner 1997; Saveriades, 2000).

Nevertheless, this kind of approach highlighted some flaws linked to the concept of tourist carrying capacity intended as a mere application of an ecological carrying capacity concept to tourism destinations, some of which were pointed out by McCool & Lime in 2001:


In the research literature there are only a few attempts to make the carrying capacity concept operational, defining a framework in order to obtain numerical standards for the destination, as a management tool that enables decision makers to implement the results of the assessment in the planning process (Clivaz et al., 2004; Huges, 2002; Trumbic, 2005). Moreover, there are several models such as Visitor Impact Management (VIM) (Graefe & Kuss, 1990), Visitor Experience and Resource Protection (VERP) (US Department of the Interior, 1997) and Tourism Optimization Management Model (TOMM) (Manidis Roberts Consultants, 1997), that, even though they represent an attempt to combine scientific expertise and public-held knowledge, to give a quantitative evaluation of the limits existing to tourism development in the destinations, they are more decision-making frameworks rather than scientific theory.

Thus the challenge in tourism carrying capacity research is the definition of a conceptual model that could be applicable to all kinds of tourism areas and that allows to select indicators and to define standards that are relevant for each specific destination. As highlighted by the guidelines developed by UNEP - PAP/RAC (1997), a good method for carrying capacity assessment should be able to: 1) consider the priorities of the area under investigation (e.g. involving decision makers and local experts in the definition of indicators and standards at a local scale); 2) identify local constraints to tourism development, balancing the demand of new tourist infrastructures and the necessity to protect local environment, also because it could represent an important attraction factor; 3) select a set of indicators that can be useful to all tourism sector managers and that can be easily applicable, with well defined sources (i.e. the availability and quality of data should be checked, to assure the possibility of monitoring through time); 4) define scenarios for the development of the destination.

According to these recommendations, the present study suggests a methodology for tourism carrying capacity assessment focussed on environmental and management issues, applied to two tourist areas in northern Italy, which are characterized by the presence of protected areas.

#### **4. Methodology**

298 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

acceptable level of human activities, population growth, land use and physical development that can be sustained by the area under investigation without causing irreversible damage to the environment. In the field of sustainable development strategies and in spatial planning processes, as it is for sustainable tourism planning, this implies that the evaluation is made considering not only the availability and quality of natural resources, but also the characteristics of the existing infrastructures, land use and tourist facilities (Oh et al., 2005). Indeed, the purpose of the evaluation of the carrying capacity of a destination is the measurement of the threshold over which alteration due to tourism activities becomes unacceptable for the entire system (composed by natural and man-made resources). The World Tourism Organization has defined Tourism Carrying Capacity as "the maximum number of persons which could visit a location within a given period, such that local environmental, physical, economic, and socio-cultural characteristics are not compromised,

This definition of the carrying capacity of a destination led to some attempts to develop quantitative carrying capacity assessment by defining a number of tourists which represents the limit beyond which the degradation of the destination occurs (see, among others, Brown

Nevertheless, this kind of approach highlighted some flaws linked to the concept of tourist carrying capacity intended as a mere application of an ecological carrying capacity concept

1. Tourism destinations are complex systems, which include objective (e.g. availability of resources) and subjective variables (e.g. tourist and local community perceptions)

2. The definition of the maximum number of tourists that can visit the destination without causing permanent damage should entail the possibility to limit access to the destination (but this can be true only for a few kinds of places – e.g. nature reserves and historical sites), otherwise it remains only a theoretical exercise, with no operational

3. The extent of the impacts caused by tourism activities is not uniquely dependent on the number of tourists that visit the area, but also, and maybe in more considerable ways, on their behaviour (Ioannides & Billing, 2005; Wagar, 1974) and by the characteristics of

4. Tourist destinations don't have a unique carrying capacity, but multiple carrying capacities, determined not only by the availability of natural and physical resources, but also by the characteristics of the management system, by the type of tourism that characterises the area, by stakeholders' perceptions (e.g. perception of crowding) and other local conditions (Ioannides & Billing, 2005). Therefore, some authors (see, for instance, Lindberg et al., 1997; McCool & Lime, 2001) suggested a shift from the question "How many is too many" to "How much change from natural conditions are acceptable given the goals and objectives of an area", starting from the Limit of Acceptable Change (LAC) model (Stankey & Cole, 1985). This approach suggests setting the tourism carrying capacity assessment method not just as a scheme aimed at obtaining a unique value, but rather as a framework composed by a set of standards

able to quantitatively define acceptable changes (Ahn et al., 2002).

to tourism destinations, some of which were pointed out by McCool & Lime in 2001:

and without reducing tourist satisfaction" (WTO, 1999).

& Turner 1997; Saveriades, 2000).

(Bimonte & Punzo, 2005).

meaning (Hof & Lime, 1997).

the local offer.

The methodology developed for this study is based on an evaluative procedure inspired by the DPSIR model (Drivers, Pressures, State, Impacts, Responses), as it is useful to underline which are the drivers of impacts and to define which is the most useful dataset to describe current and future scenarios for the area under investigation. The conceptual DPSIR model, developed by the European Environmental Agency (EEA, 1999), highlights causal links and relationships between human activities, pressures on the environment and impacts on ecosystems and human health. In order to address local policies, the model also includes the responses, i.e. promising measures to reduce the extent of drivers and pressures and improving the state of ecosystems and mitigating impacts. It is possible to identify several kinds of responses involving different actors: planning strategies defined by decision makers, technical solutions (e.g. BAT); education and communication strategies among stakeholders and, finally, the involvement of all local actors in a participatory process, with the aim of defining a commonly shared planning strategy and of building a network of subjects working on sustainable solutions.

Carrying Capacity of Tourism System: Assessment

from literature (e.g. hospitality density).

set of drivers identified in step 1;

updated data in the future;

the Delphi method);

6. the collection and processing of local data;

capacity is attributed to the entire issue;

targets b. physical limits

d. literature

of Environmental and Management Constraints Towards Sustainability 301

benchmark values coming from data at national or regional level and values derived

In addition, when it is not possible to find reference values following the previous methods (e.g. for the biodiversity issue, which is quite controversial), the evaluation is made by expert judgement, involving local experts (e.g. park managers), to ensure that indicators (i.e.

The methodology consists of a preliminary analysis of the area to identify existing data sets and to define the typology of the tourist destination; the final aim of this phase is the identification of issues that are more relevant for the development of the tourist destination.

1. the analysis of the issue and characterization of the drivers related to it and the

2. the selection of drivers relevant for the issue referring to the tourism system, from the

4. the definition of quantitative indicators for identified pressures, to measure the (state of the area under investigation with reference to that issue. In the selection of indicators, priority is given to indicators already existing and commonly implemented for tourism activities' analysis and to the availability of data on a local scale to assure the possibility of monitoring results through space (comparison between different destinations) and time (evaluation of trends in the same area); furthermore, for each indicator included in the evaluation scheme, the source of data has to be indicated, to help the collection of

5. the definition of standards for the indicators, considering benchmark values, minimum and maximum, and for the definition of classes of carrying capacity (high, medium and low) for the result. As explained before, the selection of reference values is based on: a. standards determined by international, European and national laws or policy

e. expert judgement (for which the use of standardised method is required, such as

7. the evaluation of the carrying capacity of the issue, based on benchmarking among considered variables. For the evaluation, a precautionary principle is adopted, the worst case is taken into account and if one of the variables is near the limit, low carrying

8. the responses development: processing the results to provide descriptive information about the local situation to decision makers, with the aim of enabling them to select appropriate short or long term solutions for the main problems identified, which can be performed by public and private administrators and by tourists themselves, in a shared responsibility perspective. The development of responses is part of the process but it stands as a separate stage. In fact the development of responses is composed by two steps: the first is the identification of possible actions (from technological solutions to

issues) are not excluded from the evaluation due to methodological problems.

identification of activities which are more relevant in the local situation;

3. the identification of the main pressures generated by the selected driver/s.

Then, for each issue identified, the following steps are implemented:

c. benchmarking with the regional or rational situation

The analysis of tourism sector based on the DPSIR model allows the identification of the main issues related to tourism activities and enables us to address the definition of a framework for tourism carrying capacity assessment (Table 1 shows an analysis of tourism sector based on the DPSIR model).


#### Table 1. DPSIR model for tourism sector

In the conceptual framework presented in this article, the main environmental and socioeconomic aspects of the area are separately taken into account to evaluate the tourism carrying capacity of the destination. The environmental and managing issues related to the daily life of residents and to tourism activities (air quality, water quality and disposability, waste management, land use) are considered and included in the evaluation.

One of the main aims in developing this methodology is to attempt to define thresholds for each indicator which compose the framework: indeed, even if the definition of thresholds is necessarily a choice that implies a certain level of subjectivity, the evaluation of indicators becomes meaningless in absence of reference targets and standards. Some authors highlighted the necessity to link indicators to policy standards and targets to strengthen their role in supporting decision makers (see, for instance, Hammond et al., 1995; Pinter et al., 2005); nevertheless, standards derived from professional norms or regulations are frequently non-existent for some topics, so there is the need to find alternative solutions (PAP/RAC 1997). The methodology presented in this study considers some alternatives for defining reference values when law constraints' standards are not available:


 benchmark values coming from data at national or regional level and values derived from literature (e.g. hospitality density).

In addition, when it is not possible to find reference values following the previous methods (e.g. for the biodiversity issue, which is quite controversial), the evaluation is made by expert judgement, involving local experts (e.g. park managers), to ensure that indicators (i.e. issues) are not excluded from the evaluation due to methodological problems.

The methodology consists of a preliminary analysis of the area to identify existing data sets and to define the typology of the tourist destination; the final aim of this phase is the identification of issues that are more relevant for the development of the tourist destination. Then, for each issue identified, the following steps are implemented:

	- a. standards determined by international, European and national laws or policy targets
	- b. physical limits
	- c. benchmarking with the regional or rational situation
	- d. literature

300 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

The analysis of tourism sector based on the DPSIR model allows the identification of the main issues related to tourism activities and enables us to address the definition of a framework for tourism carrying capacity assessment (Table 1 shows an analysis of tourism

DRIVERS Construction and management of hospitality structures and facilities,

PRESSURES Emissions of air pollutants, use of groundwater resources, emission of

STATE Concentration of pollutant in air and water, groundwater availability,

IMPACTS Loss of biodiversity, disturb of wild species, adverse effects on human

In the conceptual framework presented in this article, the main environmental and socioeconomic aspects of the area are separately taken into account to evaluate the tourism carrying capacity of the destination. The environmental and managing issues related to the daily life of residents and to tourism activities (air quality, water quality and disposability,

One of the main aims in developing this methodology is to attempt to define thresholds for each indicator which compose the framework: indeed, even if the definition of thresholds is necessarily a choice that implies a certain level of subjectivity, the evaluation of indicators becomes meaningless in absence of reference targets and standards. Some authors highlighted the necessity to link indicators to policy standards and targets to strengthen their role in supporting decision makers (see, for instance, Hammond et al., 1995; Pinter et al., 2005); nevertheless, standards derived from professional norms or regulations are frequently non-existent for some topics, so there is the need to find alternative solutions (PAP/RAC 1997). The methodology presented in this study considers some alternatives for

policy targets (e.g. a target for the recycling of solid urban waste production in

 objective physical limits (adopting the precautionary principle, the current structure of the tourism system is taken as a baseline to ensure that no additional impact is generated through the construction of new tourism infrastructures (there are some physical limits that cannot be overcome, e.g. the number of beds available in the system,

RESPONSES Promotion of sustainable tourism: reduction of water and energy

energy, promotion of ecotourism activities.

waste management, land use) are considered and included in the evaluation.

defining reference values when law constraints' standards are not available:

the capacity of wastewater treatment plants, etc.);

pollutants in surface waters, production of solid urban waste, land use and soil erosion, energy consumption, presence of tourists in protected

quantity of solid urban waste, level of urbanization, level of crowding in

consumption, reduction of waste production and increasing of separated waste collection, promotion of public transports, use of renewable

presence of tourists, road traffic.

sector based on the DPSIR model).

areas.

health.

Table 1. DPSIR model for tourism sector

European countries);

natural sites.


Carrying Capacity of Tourism System: Assessment

are fixed.

8) RESPONSES Processing of the results and

5) STATE CLASSES

6) LOCAL RESULT

7) CARRYING CAPACITY

**5. Areas of study** 

of Environmental and Management Constraints Towards Sustainability 303

a. nr of overcoming for PM10 <10: HIGHcarrying capacity

50.: LOW carrying capacity

LOW carrying capacity

carrying capacity

of carrying capacity

30 LOW carrying capacity

LOW carrying capacity

nr of overcoming for PM10: 108 nr of overcoming for NOx: 1

a. PM10: **VERY LOW** b. NOx: **HIGH** 

of carrying capacity

nr of overcoming for PM10 =35: LIMIT

nr of overcoming for PM10 >35 and <

nr of overcoming for PM10 >50: VERY

nr of overcoming for NOx =18: LIMIT

nr of overcoming for NOx >18 and <

nr of overcoming for NOx >30: VERY

Carrying capacity of the issue: **VERY LOW**

To promote public transport and tourist offers for discouraging use of private car by tourists: improvement of existing bikeroutes (included in Eurovelo 7 and 8) and establishment of facilities for bikers along the trails (hotel with special services for bikers, renting stations, etc.) to promote bike tourism and to encourage the use of

bicycles for local connections).

b. nr of overcoming for NOx <10: HIGH

**DPSIR METHODOLOGY LOCAL RESULT** 

On the basis of indicators and limit identified in the previous step, classes of carrying capacity

Analysis of local data about indicators identified.

Carrying capacity assessment, based on classes identified and data collected; carrying capacity level of the entire compartment is assigned according to precautionary principle.

discussion among stakeholders to plan responses, based on scientific assessment, that can be included in the local strategy for

Table 2. Example of assessment for the issue "air" in Oltrepo Mantovano area

Charter for Sustainable Tourism in Protected Areas (Europarc, 1995).

The methodology developed was implemented in two areas of the Lombardy region: Oltrepo Mantovano and Alpi Lepontine Mountain Community (Italian Mountain Communities are administrative clusters of municipalities in mountain areas); the study was performed in order to support these two destinations in the implementation of the European

The European Charter is a process promoted by Europarc (the European Federation of Parks), with the aim of ensuring environmental conservation and promoting economic and

sustainable tourism development.

communication actions) based on the results of scientific assessment; the second is the policy development, based on a participatory process that should involve all stakeholders, aimed to choose adequate actions, providing objectives and targets for each of them. This process encompasses both descriptive, scientific, assessment and policy making, using scientific results as guidelines for action, bridging the gap between science and policy (for a deeper discussion about how to integrate scientific assessment results in the development and monitoring for sustainable tourism development strategies see Castellani & Sala, 2009).

Table 2 shows an example of a detailed scheme, developed for "air" issue in Oltrepo Mantovano area.


Table 2 shows an example of a detailed scheme, developed for "air" issue in Oltrepo

Analysis of data from Inemar Lombardy Region inventory of emission sources: main drivers for Oltrepo Mantovano are: electric power generation (electric power plants), non industrial combustion (heating) and urban traffic, which cause emissions of PM10, CO2, COV, NOx, SO2 and CO.

The emission source most relevant for tourism sector evaluation in Oltrepo Mantovano is emissions due to road traffic, because electric power generation is an industrial activity, not strictly linked with local consumption and heating becomes not relevant during high tourist seasons

Urban traffic generates emissions of PM10,

Regional Environmental Agency (ARPA) monitoring network registers periodically the values of concentration of PM10, CO and NO2; data of COV concentrations are not

a. number of overcoming for PM10

b. number of overcoming for NO2

A limit for CO is not fixed because this pollutant is no longer a problem in Italy.

limit value: 35 days of overcoming/year.

limit value: 35 days of overcoming/year.

concentration in Oltrepo Mantovano;

concentration in Oltrepo Mantovano;

(spring-summer).

CO, COV and NOx.

available.

**DPSIR METHODOLOGY LOCAL RESULT** 

development strategies see Castellani & Sala, 2009).

emissions sources aimed to identify which sources / activities are most relevant in

From the drivers set identified in step 1, selection of drivers which are most relevant for

the area object of the investigation.

tourism sector.

generated by identified

indicators to measure state. Indicator used by European and Italian legislation to evaluate air pollution level is the number of daily overcoming of limit concentration during a year.

3) PRESSURES Selection of main pressures

driver/s.

4) INDICATORS Selection of appropriate

1) DRIVERS Analysis of datasets of

Mantovano area.

2) DRIVERS AND VARIABLES RELEVANT FOR TOURISM SECTOR

communication actions) based on the results of scientific assessment; the second is the policy development, based on a participatory process that should involve all stakeholders, aimed to choose adequate actions, providing objectives and targets for each of them. This process encompasses both descriptive, scientific, assessment and policy making, using scientific results as guidelines for action, bridging the gap between science and policy (for a deeper discussion about how to integrate scientific assessment results in the development and monitoring for sustainable tourism


Table 2. Example of assessment for the issue "air" in Oltrepo Mantovano area

#### **5. Areas of study**

The methodology developed was implemented in two areas of the Lombardy region: Oltrepo Mantovano and Alpi Lepontine Mountain Community (Italian Mountain Communities are administrative clusters of municipalities in mountain areas); the study was performed in order to support these two destinations in the implementation of the European Charter for Sustainable Tourism in Protected Areas (Europarc, 1995).

The European Charter is a process promoted by Europarc (the European Federation of Parks), with the aim of ensuring environmental conservation and promoting economic and

Carrying Capacity of Tourism System: Assessment

destination, following the steps illustrated in section 4.

destinations and the carrying capacity classes defined for each indicator.

the target of 40% by 2010 for separate waste collection);

Air quality: 96/62/EC, "Air quality framework Directive".

& Leon, 2007; Prideaux, 2000).

**6. Results and discussion** 

framework Directive";

kg/d per capita.

**Drinking water supply and consumption** 

**1. water balance (WEI: consumption / availability)**  (L\*residents-1\*d-1) /(L\*residents-1\*d-1)

> **2. daily consumption**  (L\*residents-1\*d-1)

**3. withdrawal / recharge of ground water** (m3\*d-1)/(m3\*d-1)

targets:

of Environmental and Management Constraints Towards Sustainability 305

the destination less attractive for new tourists (Farrell & Twinning-Ward, 2004; Hernandez

Following our methodology, we first carried out a comprehensive analysis of the area, to identify existing data sets and to define the typology of the tourist destination, the general characteristics of the area and its development (Castellani et al., 2007; Trentini et al., 2008). Then, from the results of the analysis, the main environmental and physical aspects of the area were separately taken into account in order to evaluate tourism carrying capacity of the

Table 3 illustrates the indicators which were considered for the evaluation of the two

As explained in section 4, classes of carrying capacity were defined for each indicator in order to allow the comparison of local results with reference standards and to assess the tourism carrying capacity of the destination based on quantitative evaluation. The following paragraphs illustrate in more detail the references considered for the definition of the classes. For the following issues, classes were defined referring to legal limits and policy

 Quality of fresh water – People served by wastewater treatment plants, the ecological state of fresh water and the ecological condition of lakes: 2000/60/EC, "Water

Waste management – Separate waste collection: Regional Law 26/2003 (which defines

 Waste management – Per capita daily production: classes defined considering the average urban solid waste production per capita in Europe (about 600 kg/d per capita in 2008) and the target of the European Campaign for Waste Reduction, which is 100

> <40% L WEI > 40%

**Indicator State - classes Indicator State - classes** 

H WEI < 20% **13. loss of species,** 

M = 1 **15a. tourist buildings** 

H < 150 L\*res-1 **Land use** M 150-250 L\*res-1 **14. hospitality density**

**Quality of fresh water** L < 10%

**Biodiversity**

**disturb**  (total nr of visitors in protected areas\*year-1)

(beds\*1000 residents-1)

(non-hotel structures/total hospitality structures)

L > 1 M 10%-20%

L > 250 L\*res-1 M 10-300

H < 1 L > 300

M 20%<WEI judgement

no classes, expert

H 0-100

H > 20%

social development through the definition of a strategy for sustainable tourism development of the area. Assessing carrying capacity in these areas aims, therefore, to provide a useful tool for decision makers who have to define tourism development policy for the future, while aiming to promote sustainable development and preventing adverse effects on the environmental, economic and social systems of the destinations.

The protected areas of Alpi Lepontine and Oltrepo Mantovano applied to the European Charter in 2006 and were awarded with the Charter certificate in 2008. They are now at the second stage of the process, which is the implementation of the strategy and action plan, and that will be followed by an evaluation by Europarc in 2012, which is necessary to renew the certificate for the following 5 years.

Fig. 1. The two areas of study in Lombardy Region, northern Italy

It is interesting to compare the tourism carrying capacity assessment in the two areas because even if they are now involved in the same planning process, they represent two different stages of the life-cycle of the destination model (Agarwal, 1994; Butler, 1980; Miossec, 1977). Oltrepo Mantovano is a newly emerging destination, not yet well structured, with few tourists arriving in the area, whereas Alpi Lepontine is a more mature destination, even if it shows contrasting aspects (e.g. in the summer season the number of tourists is high in some municipalities near the lakes, but very low or zero in mountainous ones).

The case studies show that the evaluation of the tourism carrying capacity can support the planning process and provide useful information to decision makers both in the case of a newly emerging destination and of a more mature destination. In the first case, it can draw the guidelines for more conscious planning, helping to prevent over-exploitation of resources and a rapid decline of the destination; in the second case, carrying capacity assessment can help to evaluate the possibilities of rejuvenation policies (e.g. investments for promoting a new type of tourist for the destination), to avoid the stagnation and decline phases that can occur when the depletion of natural and physical capital of the area make the destination less attractive for new tourists (Farrell & Twinning-Ward, 2004; Hernandez & Leon, 2007; Prideaux, 2000).

#### **6. Results and discussion**

304 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

social development through the definition of a strategy for sustainable tourism development of the area. Assessing carrying capacity in these areas aims, therefore, to provide a useful tool for decision makers who have to define tourism development policy for the future, while aiming to promote sustainable development and preventing adverse effects on the

The protected areas of Alpi Lepontine and Oltrepo Mantovano applied to the European Charter in 2006 and were awarded with the Charter certificate in 2008. They are now at the second stage of the process, which is the implementation of the strategy and action plan, and that will be followed by an evaluation by Europarc in 2012, which is necessary to renew

environmental, economic and social systems of the destinations.

Fig. 1. The two areas of study in Lombardy Region, northern Italy

It is interesting to compare the tourism carrying capacity assessment in the two areas because even if they are now involved in the same planning process, they represent two different stages of the life-cycle of the destination model (Agarwal, 1994; Butler, 1980; Miossec, 1977). Oltrepo Mantovano is a newly emerging destination, not yet well structured, with few tourists arriving in the area, whereas Alpi Lepontine is a more mature destination, even if it shows contrasting aspects (e.g. in the summer season the number of tourists is high

The case studies show that the evaluation of the tourism carrying capacity can support the planning process and provide useful information to decision makers both in the case of a newly emerging destination and of a more mature destination. In the first case, it can draw the guidelines for more conscious planning, helping to prevent over-exploitation of resources and a rapid decline of the destination; in the second case, carrying capacity assessment can help to evaluate the possibilities of rejuvenation policies (e.g. investments for promoting a new type of tourist for the destination), to avoid the stagnation and decline phases that can occur when the depletion of natural and physical capital of the area make

in some municipalities near the lakes, but very low or zero in mountainous ones).

the certificate for the following 5 years.

Following our methodology, we first carried out a comprehensive analysis of the area, to identify existing data sets and to define the typology of the tourist destination, the general characteristics of the area and its development (Castellani et al., 2007; Trentini et al., 2008).

Then, from the results of the analysis, the main environmental and physical aspects of the area were separately taken into account in order to evaluate tourism carrying capacity of the destination, following the steps illustrated in section 4.

Table 3 illustrates the indicators which were considered for the evaluation of the two destinations and the carrying capacity classes defined for each indicator.

As explained in section 4, classes of carrying capacity were defined for each indicator in order to allow the comparison of local results with reference standards and to assess the tourism carrying capacity of the destination based on quantitative evaluation. The following paragraphs illustrate in more detail the references considered for the definition of the classes. For the following issues, classes were defined referring to legal limits and policy targets:



Air quality: 96/62/EC, "Air quality framework Directive".

Carrying Capacity of Tourism System: Assessment

fourth assessment, 2007);

Chapter Tourism", 2001;

of Environmental and Management Constraints Towards Sustainability 307

Drinking water supply and consumption – the ratio between abstraction and recharge

Benchmark values coming from data at national or regional level and values derived from

 Drinking water supply and consumption – Water balance: the classes are defined considering the Water Exploitation Index (WEI) and its warning threshold of 20%, which distinguishes a non-stressed, from a stressed region, while a threshold of 40% identifies a region where severe stress occurs (source: EEA, Europe's environment,

 Drinking water supply and consumption – daily consumption: classes defined considering that the average domestic water consumption in Europe is around 150-200 L/d per capita, while a tourist can consume on average 300 L/day (source: Freshwater

 Energy consumption: comparison with the national average of energy consumption; Land use - Hospitality density: EEA classification in "Indicator Fact Sheet Signals 2001 –

 Land use - Tourist buildings, a and b: classes defined on the basis of the situation existing in some of the major tourism destinations in Italy; (under 20% of second houses in low density destinations, over 80% in high density destinations such as Alpine ski areas; source: Dossier about second houses in the Alps by Legambiente (2009) and the

Land use - Daily visitors: estimation based on previous studies about the impacts

Use of tourist structures: classes defined considering the average occupancy rate in Italy

 Mobility - ratio of tourists reaching the destination by private car: classes defined starting from European figures about car use for tourism purposes (61% of tourist travel

 Mobility – number of cars in the area/residents: classes defined considering the average car ownership in Europe-15 (0,50 passenger cars/inhabitant; source: Eurostat, year 2006); Mobility – number of vehicles in the tourist peak season: the classes have been defined considering a monitoring study carried out by the Province of Parma on the traffic on roads which are similar to the ones in the two destinations considered ("Analisi sui

 Tourism intensity: the classes are defined considering that the two destinations under evaluation are nature-based destinations, that cannot afford to sustain high-intensity levels of tourists (high density destinations in the Alps have a current level of tourist intensity of around 8, while international, mass-tourism, seaside resorts, such as the

Finally, expert judgement from local experts helped to evaluate the carrying capacity of

by road, source: EEA, Europe's environment, third assessment, 2003);

flussi di traffico in provincia di Parma", Province of Parma, 2001);

Balearic islands, can reach a peak level of tourist intensity of 50).

issues for which it was not possible to identify suitable carrying capacity classes:

Classes defined with reference to the physical limits of the system include:

 Quality of fresh water – designed capacity/actual capacity used; Quality of fresh water – capacity of wastewater treatment plants; Waste management – residual capacity of waste collection system.

literature were used to define classes for the following indicators:

in Europe - Facts, Figures and Maps, UNEP/DEWA, 2004);

3rd report about the state of the Alps by CIPRA (2008);

generated by residential tourists and visitors;

(which is around 30%; source: Eurostat, year 2008);


Table 3. Indicators selected for Tourism Carrying Capacity assessment (Classes: H = high c. capacity; M = medium c. capacity; L = low c. capacity; LL = very low c. capacity)

**4. people served by water purifier**  (people served\*people resident-1) \*100

**5. potential H.E./actual H.E.**  (H.E. = habitant equivalents)

**6. ecological state of fresh water**  (LIM index)

**7. ecological state of lakes**  (correspondence to natural condition)

**8. local energy consumption/national mean energy consumption**  (MWh\*residents-1) / (MWh\*residents-1)

**9. per capita daily production**  (kg\* residents-1\*d-1)

**10. residual capacity of waste collection system** (C = volume of waste collected daily/ volume of waste collectable daily)

> **11. % Separate waste collection**

**12. nr of days exceeding law limits per year** 

**Indicator State - classes Indicator State - classes** 

H 100%-75% **15b. tourist buildings**

H > 1 **16. crowding of** 

M = 1 **17. daily visitors** 

M sufficient **Economic efficiency of**

L bad, poor **18. use of tourist** 

H < 1 **19. % of tourists** 

L > 1Kg\*res-1\*d-1 **21. railway service** 

H > 45% **22. nr of vehicles in** 

H current state = natural state

L current state ≠ natural state

**Energy consumption Mobility** 

**Waste management 20. nr of cars in the** 

H 0.27 Kg\*res-1\*d-1

M 0.28 – 1 Kg\*res-1\*d-1

**Air quality Tourism intensity** 

Law limits: 35 days of exceeding/year PM10, 18 exceeding/year NO2

capacity; M = medium c. capacity; L = low c. capacity; LL = very low c. capacity)

Table 3. Indicators selected for Tourism Carrying Capacity assessment (Classes: H = high c.

(houses not used by residents/total nr of houses)

**natural sites and paths**

(V = nr daily visitors / nr resident tourists)

**tourism sector** 

**structures**  [(overnights\*beds-1) \*365]\*100

**reaching the destination by private car** 

**area/residents** 

(nr of municipalities with railway station/total nr of municipalities)

**tourist season**  (nr vehicles in peak hour)

**23. tourist intensity in high season**  I = (overnights high season\*d-1)\*residents-1

M 35-45% M 100-300 L < 35% L > 300

H C < 0.7 M 0.4-0.7 L 0.7<C<1 L 0-0.3

M = 1 M 40%-70% L > 1 L > 70%

L < 1 M 1 < V < 2

H optimal, good L V > 2

M 74%-50% M 20%-50% L < 50% L > 50%

H < 20%

no classes, expert judgement

H V < 1

H < 20%

M 20% - 40%

L > 40%

H < 40%

H 0-0.3

M 0.3-0.5

L 0.5-0.8

H 0.8-1

H < 100

H I < 0.5 M 0.5 < I < 1 L I > 2

Classes defined with reference to the physical limits of the system include:


Benchmark values coming from data at national or regional level and values derived from literature were used to define classes for the following indicators:


Finally, expert judgement from local experts helped to evaluate the carrying capacity of issues for which it was not possible to identify suitable carrying capacity classes:

Carrying Capacity of Tourism System: Assessment

C = volume of waste collected daily/ volume of waste collectable

daily

**Indicator Unit** 

9. per capita daily production of waste

10. residual capacity of waste collection system

11. % Separate

12. nr of days exceeding law limits per year

13. loss of species, disturb

14. hospitality density

15a. tourist buildings

15b. tourist buildings

paths

16. crowding of natural sites and

17. daily visitors

18. use of tourist structures

19. % of tourists reaching the destination by private car

20. nr of cars in the area / residents

of Environmental and Management Constraints Towards Sustainability 309

kg\* residents-1\*d-1 1.6 H 1.1 H

waste collection % 39.8% M 12.4% LL

4 000-

5 000 <sup>H</sup>

residents-1 13.7 H 419.0 L

Nr of days PM10: 108

Total nr of visitors in protected areas\*year-1

beds\*1000

non-hotel structures/total hospitality structures

V = nr daily visitors /nr resident tourists

[(overnights\*

Nr of

houses not used by residents/total nr of houses

**Oltrepo Mantovano Alpi Lepontine**

n.a. -- n.a. --

NOx: 1 LL PM10: 0

**Source of data Value Carrying capacity Value Carrying** 

NOx: 0 <sup>H</sup>

"Area rilev. Amb": 4 000- 5 000

"Riserva Lago di Piano": > 50 000

54% H 60% H ISTAT

8% H 29% M ISTAT

>2 L n.a. -- Local experts

Level of crowding low H low H Local experts

beds-1)\*365]\*100 30.7% M 7.5% L Provincial

% >70% L >70% L Survey

cars/inhabitants 0.6 L 0.6 L ISTAT

**capacity** 

Provincial waste monitoring office

Provincial waste monitoring office

ARPA (Regional Agency for env. protection)

H Local experts

LL Local experts

Provincial tourism office, ISTAT

tourism office


The application of the methodology to the two areas under investigation provided an overall evaluation of the tourism carrying capacity of the two destinations. Table 4 compares the results for Alpi Lepontine and Oltrepo Mantovano (data refer to year 2005). The table of results also contains some issues for which local value and carrying capacity scores are not mentioned: they were included in the model because they emerged as relevant according to the DPSIR evaluation, but it was not possible to evaluate the carrying capacity for them, because of the lack of available data at local level. The choice of including these issues in the results arises from the consciousness that there is the risk of measuring "what is measurable rather than what is important" (as highlighted by White et al in their review about sustainable indicators for tourism, 2006), thereby providing misleading information for decision makers. On the contrary, our aim was to make decision makers aware of the importance of these topics and the necessity to deepen the current investigation and to provide a collection of data about them.


The application of the methodology to the two areas under investigation provided an overall evaluation of the tourism carrying capacity of the two destinations. Table 4 compares the results for Alpi Lepontine and Oltrepo Mantovano (data refer to year 2005). The table of results also contains some issues for which local value and carrying capacity scores are not mentioned: they were included in the model because they emerged as relevant according to the DPSIR evaluation, but it was not possible to evaluate the carrying capacity for them, because of the lack of available data at local level. The choice of including these issues in the results arises from the consciousness that there is the risk of measuring "what is measurable rather than what is important" (as highlighted by White et al in their review about sustainable indicators for tourism, 2006), thereby providing misleading information for decision makers. On the contrary, our aim was to make decision makers aware of the importance of these topics and the necessity to deepen the current investigation and to

(L\*residents-1\*d-1) n.a. -- n.a.. --

consumption L\*residents-1\*d-1 280.2 L 229.3 M.

**Oltrepo Mantovano Alpi Lepontine**

(m3\*d-1)/(m3\*d-1) 1.3 L n.a. -- Lombardy

H.E./actual H.E. >1 H 1 M Local water

Score of LIM index sufficient M Good H Province


0.8 H 1.4 L

Not applicable (there are no lakes)

**Source of data Value Carrying capacity Value Carrying** 

75% H 95% H Local water

current state ≠ natural state

**capacity** 

ISTAT, National Statistic Institute

resources plan

resources plan

Terna - owner of the National high-voltage Electricity Transmission Grid (2003)

authority

<sup>L</sup>Province authority

(1999)

Region

Biodiversity – loss of species, disturb caused by tourism activities

Land use – crowding of natural sites and paths.

provide a collection of data about them.

(people served\*people resident-1) \*100

potential

Correspondence to natural condition

(MWh\*residents-1) / (MWh\*residents-1)

(L\*residents-1\*d-1)/

**Indicator Unit** 

1. water balance (consumption / availability))

3. withdrawal / recharge of ground water

4. people served by water purifier

6. ecological state of fresh water (LIM index)

7. ecological state

8. mean energy consumption in municipalities / national mean energy consumption

of lakes

5. potential H.E./actual H.E. (H.E. = habitant equivalents)

2. daily


Carrying Capacity of Tourism System: Assessment

national dataset on consumption is no longer available.

a high level of air pollution.

tourism in the areas.

of Environmental and Management Constraints Towards Sustainability 311

Another critical issue in Alpi Lepontine is the separate waste collection system, which includes only 12.4% of the total amount of waste generated in the area. This value is lower than 35%, which is the minimum ratio that was fixed by European and national regulations as a target for 2003 (chosen as a reference because the data refers to the year 2005) and this could be a serious problem, especially in the summer season, when the presence of a lot of

Mobility is a problem for both the destinations; firstly because the number of cars owned by residents is high and, secondly, because, due to the scarcity and the inefficiency of public transport services, most of the tourists reach the areas by private car. This situation affects the quality of the tourist experience and the quality of life for the residents, causing street congestion , noise (that could especially disturb protected areas) and, in Oltrepo Mantovano,

From the methodological point of view, the most critical issues to be evaluated for the tourism carrying capacity assessment seem to be water availability and energy consumption (for which there is a lack of data in the Italian statistic dataset at local level), and the impacts on biodiversity. Available Italian data for local energy consumption refer to 1997, because this was the last year of national management of the energy market. From 1998 there have been various energy suppliers, so the collection of data is now very difficult and a detailed

Besides, measuring the impact of tourism activities on biodiversity requires specific study of the areas under investigation, because every situation has specific characteristics. The assessment of biodiversity loss due to tourism activities requires the definition of a representative species for each kind of impact, considering a multiple stress condition. This information is not yet available, so a periodical, detailed monitoring campaign on the flora and fauna of protected areas should be promoted in order to have reliable data sets at national and local level and investigations on the number and characteristics of tourists should be carried out to obtain more data, which would be useful to measure the disturbance caused by tourism activities and to assess the carrying capacity of the areas. Moreover, it would be interesting to perform a detailed investigation into the seasonality of tourism impacts, measuring indicators with monthly scaled data: the amount of waste generated, for instance, is largely variable between the high and the low season and this can be a problem for decision makers who have to scale the waste management system in a way that ensures the most efficient service (and environmental protection) in both conditions.

Although not completely exhaustive, the results of tourist carrying capacity assessment allow for a comprehensive evaluation of the situation in the destinations and are useful for underlying critical issues to be considered for the definition of policies for sustainable

The results of the carrying capacity assessment were opened to feedback from the stakeholders: they were presented in a forum for consultation involving decision makers, tourism operators and residents and were taken as the basis upon which some responses to the main problems identified were planned. The responses, commonly shared by local administrators, local stakeholders and experts, compose the Action Plan, included in the "Strategy for sustainable tourism" presented at the end of the first phase of the

visitors causes an increase in the volume of waste to be collected and processed.


Table 4. Results of Tourism Carrying Capacity evaluation in Alpi Lepontine and Oltrepo Mantovano

The analysis of results enables researchers and decision makers to comprehensively evaluate the tourist carrying capacity of each area and then to compare the carrying capacity of a newly emerging destination (Oltrepo Mantovano) with the carrying capacity of a more mature one (Alpi Lepontine). This difference is also underlined by the ratio of employees involved in tourism activities. The comparison between the value for Alpi Lepontine (13% in 2005, according to the Regional Statistic Office data), with the value for Oltrepo Mantovano (3% in 2005, according to the Regional Statistic Office data), shows that in the first area tourism is already an important activity for the local economy, while in the second one it is still a marginal activity. The differences about land use are also representative of the different level of development of the two areas: the hospitality density in Alpi Lepontine is considerably higher than in Oltrepo Mantovano, while the difference in the ratio of houses not used by residents (considered as a proxy for the number of second houses, which are not officially recorded) is negligible. Nevertheless, the value of "tourist intensity" puts Alpi Lepontine in the high class of tourism carrying capacity; though it also has to be underlined that the indicator considers the whole area, creating a compensation between the municipalities near the lakes, which have higher tourist intensity, and the mountainous ones, where the intensity is very low. Therefore, to obtain more precise and useful information, it would be necessary to deepen the investigation at the municipality level.

The analysis of tourism carrying capacity regarding natural resources and infrastructures allows for an evaluation of the possibility of development for the destinations in the future; the evaluation is made considering the capacity of the current system of facilities and infrastructures, in the perspective of avoiding new buildings (i.e. excessive urbanization and land use). Data about water availability and consumption, even if not complete, show a problem about abstraction from groundwater sources in Oltrepo Mantovano. The situation is already unsustainable, and could be worsened by an increase in the number of tourists visiting the area. In Alpi Lepontine, however, there is a problem about the capacity of wastewater treatment plants, which are already near their capacity limit and would not be able to assure continuity and quality of service if the volume of water to be treated increased (e.g. in case of an increase in the number of tourists).

**Oltrepo Mantovano Alpi Lepontine**

hour n.a. -- 360 L Estimation

Table 4. Results of Tourism Carrying Capacity evaluation in Alpi Lepontine and Oltrepo

The analysis of results enables researchers and decision makers to comprehensively evaluate the tourist carrying capacity of each area and then to compare the carrying capacity of a newly emerging destination (Oltrepo Mantovano) with the carrying capacity of a more mature one (Alpi Lepontine). This difference is also underlined by the ratio of employees involved in tourism activities. The comparison between the value for Alpi Lepontine (13% in 2005, according to the Regional Statistic Office data), with the value for Oltrepo Mantovano (3% in 2005, according to the Regional Statistic Office data), shows that in the first area tourism is already an important activity for the local economy, while in the second one it is still a marginal activity. The differences about land use are also representative of the different level of development of the two areas: the hospitality density in Alpi Lepontine is considerably higher than in Oltrepo Mantovano, while the difference in the ratio of houses not used by residents (considered as a proxy for the number of second houses, which are not officially recorded) is negligible. Nevertheless, the value of "tourist intensity" puts Alpi Lepontine in the high class of tourism carrying capacity; though it also has to be underlined that the indicator considers the whole area, creating a compensation between the municipalities near the lakes, which have higher tourist intensity, and the mountainous ones, where the intensity is very low. Therefore, to obtain more precise and useful information, it would be necessary to deepen the

The analysis of tourism carrying capacity regarding natural resources and infrastructures allows for an evaluation of the possibility of development for the destinations in the future; the evaluation is made considering the capacity of the current system of facilities and infrastructures, in the perspective of avoiding new buildings (i.e. excessive urbanization and land use). Data about water availability and consumption, even if not complete, show a problem about abstraction from groundwater sources in Oltrepo Mantovano. The situation is already unsustainable, and could be worsened by an increase in the number of tourists visiting the area. In Alpi Lepontine, however, there is a problem about the capacity of wastewater treatment plants, which are already near their capacity limit and would not be able to assure continuity and quality of service if the volume of water to be treated increased

**Source of data Value Carrying capacity Value Carrying** 

0.6 M 0 L Ministry of

0.2\*10-3 H 0.1 H Provincial

**capacity** 

Transports

tourism office

**Indicator Unit** 

nr of

investigation at the municipality level.

(e.g. in case of an increase in the number of tourists).

municipalities with railway station/total nr of municipalities

nr vehicles in peak

I = (overnights high season\*d-1)\* residents-1

21. railway service

23. tourist intensity in high

Mantovano

season

22. nr of vehicles in tourist season

Another critical issue in Alpi Lepontine is the separate waste collection system, which includes only 12.4% of the total amount of waste generated in the area. This value is lower than 35%, which is the minimum ratio that was fixed by European and national regulations as a target for 2003 (chosen as a reference because the data refers to the year 2005) and this could be a serious problem, especially in the summer season, when the presence of a lot of visitors causes an increase in the volume of waste to be collected and processed.

Mobility is a problem for both the destinations; firstly because the number of cars owned by residents is high and, secondly, because, due to the scarcity and the inefficiency of public transport services, most of the tourists reach the areas by private car. This situation affects the quality of the tourist experience and the quality of life for the residents, causing street congestion , noise (that could especially disturb protected areas) and, in Oltrepo Mantovano, a high level of air pollution.

From the methodological point of view, the most critical issues to be evaluated for the tourism carrying capacity assessment seem to be water availability and energy consumption (for which there is a lack of data in the Italian statistic dataset at local level), and the impacts on biodiversity. Available Italian data for local energy consumption refer to 1997, because this was the last year of national management of the energy market. From 1998 there have been various energy suppliers, so the collection of data is now very difficult and a detailed national dataset on consumption is no longer available.

Besides, measuring the impact of tourism activities on biodiversity requires specific study of the areas under investigation, because every situation has specific characteristics. The assessment of biodiversity loss due to tourism activities requires the definition of a representative species for each kind of impact, considering a multiple stress condition. This information is not yet available, so a periodical, detailed monitoring campaign on the flora and fauna of protected areas should be promoted in order to have reliable data sets at national and local level and investigations on the number and characteristics of tourists should be carried out to obtain more data, which would be useful to measure the disturbance caused by tourism activities and to assess the carrying capacity of the areas. Moreover, it would be interesting to perform a detailed investigation into the seasonality of tourism impacts, measuring indicators with monthly scaled data: the amount of waste generated, for instance, is largely variable between the high and the low season and this can be a problem for decision makers who have to scale the waste management system in a way that ensures the most efficient service (and environmental protection) in both conditions.

Although not completely exhaustive, the results of tourist carrying capacity assessment allow for a comprehensive evaluation of the situation in the destinations and are useful for underlying critical issues to be considered for the definition of policies for sustainable tourism in the areas.

The results of the carrying capacity assessment were opened to feedback from the stakeholders: they were presented in a forum for consultation involving decision makers, tourism operators and residents and were taken as the basis upon which some responses to the main problems identified were planned. The responses, commonly shared by local administrators, local stakeholders and experts, compose the Action Plan, included in the "Strategy for sustainable tourism" presented at the end of the first phase of the

Carrying Capacity of Tourism System: Assessment

Wiley and Sons, Chichester.

*Management,* Vol.23, pp. 1–15.

Vol.24, pp. 5–1.

*del Parco di Crea, Torino,* Torino, Italy.

ATS Working Papers Series, Vol.4.

*Conservation Ecology*, Vol.6, No.13.

Tourism in Protected Areas.

the system.

**8. References** 

of Environmental and Management Constraints Towards Sustainability 313

same impact, see sections 2 and 3) and that having a set of information about single issues, to be considered in a comprehensive manner, helps to avoid compensation between different aspects. For instance, considering the indicator "Economic efficiency of tourist structures", it could be argued that increasing the number of beds in the destination (i.e. increasing the number of tourists that can be accommodated) could be a good solution to improve the performance of the system, because it would lead to an increase in the carrying capacity in that issue, but, if we also consider the other aspects, such as "Land use" or "Waste management", it becomes evident that increasing the number of beds would increase the pressure with respect to other issues, thereby reducing the carrying capacity of

Moreover, to evaluate the effectiveness of the policies for development that are defined resulting from the outcome of sustainability evaluation, it could be interesting to extend the assessment of tourism carrying capacity through time, to have a multi-year period of evaluation. Finally, further development of the research could refer to the development of scenarios considering what the situation would be according to existing plans for

Abernethy, V.D. (2001). Carrying capacity: the tradition and policy implications of limits.

Agarwal, S. (1994). The resort cycle revisited: implications for resorts, In: *Progress in Tourism,* 

Ahn B.Y., Lee, B.K., Shafer, S. (2002). Operationalizing sustainability in regional tourism

Beltrame, C., Ciarli, E., Giorgini, E., Maggi, M. (2002). Ires Piemonte (ed.) *Il turismo nell'area* 

Bimonte, S., Punzo, F. (2005). *A proposito di capacità di carico turistica. Una breve analisi teorica*.

Brown, K., Turner, H.K. (1997). Environmental carrying capacity and tourism development in the Maldives and Nepal. *Environmental Conservation,* Vol.24, pp. 316–25. Buckley, R. (2003). Environmental Inputs and Outputs in Ecotourism: Geotourism with a Positive Triple Bottom Line? *Journal of Ecotourism*, Vol.2, No.1, pp. 76-82. Butler, R. (1980). The concept of a tourist area cycle of evolution. *Canadian Geographer*,

Casagrandi, R., Rinaldi, S. (2002). A theoretical approach to tourism sustainability.

Castellani, V., Gusso, G., Lombardo, A., Sala, S., Pitea, D. (2007). *Environmental analysis to* 

Castellani, V., Sala, S. (2010). Sustainable performance index for tourism policy

development. *Tourism Management,* Vol.31, No.6, pp.871-880.

*promote a sustainable tourism. Diagnosis of Alpi Lepontine Mountain Community*. Technical Report for the implementation of European Charter for Sustainable

*Recreation and Hospitality Management,* C. Cooper, A. Lockwood, A. (Eds),. John

planning: an application of the limits of acceptable change framework. *Tourism* 

development in the areas under investigation (e.g. the local structure plan).

*Ethics in Science & Environmental Politics*, Vol.23, pp. 9-18.

implementation of European Charter for Sustainable Tourism in Protected Areas process (Tarelli et al., 2008, Trentini et al., 2008).

The identification of responses to issues, including those which currently have a good carrying capacity score, was carried out in order to prevent possible damages coming from an excessive and uncontrolled tourist development and to address the planning of the entire sector towards sustainability. Clearly, actions developed to be included in a tourist management plan cannot address all the drivers that influence the state of the environment in the destination (e.g. energy generation in Oltrepo Mantovano area). The tourism carrying capacity assessment is intended to support the development of sustainable tourism activities, in order to decouple the economic growth of the tourism sector from its impact on the natural environment in the destination.

#### **7. Conclusion**

The most critical aspect associated with carrying capacity assessment of tourism destination is the complexity of making the carrying capacity concept operational and of providing quantitative results, compared to established thresholds. The present study represents an attempt to quantify the current state of every compartment involved in tourism management and to give a quantity perspective on present and future scenarios of destination development, with the aim of addressing future policies for sustainable tourism.

The application of the methodology to the two destinations in northern Italy highlighted some critical aspects which should be further considered for research; the following paragraph lists some reflections about them:


The choice of not aggregating the indicators to compose a final index of the tourism carrying capacity of the area comes from the consciousness that it is not feasible (or useful) to set a limit to the number of tourists (due also to the fact that not every tourist determines the same impact, see sections 2 and 3) and that having a set of information about single issues, to be considered in a comprehensive manner, helps to avoid compensation between different aspects. For instance, considering the indicator "Economic efficiency of tourist structures", it could be argued that increasing the number of beds in the destination (i.e. increasing the number of tourists that can be accommodated) could be a good solution to improve the performance of the system, because it would lead to an increase in the carrying capacity in that issue, but, if we also consider the other aspects, such as "Land use" or "Waste management", it becomes evident that increasing the number of beds would increase the pressure with respect to other issues, thereby reducing the carrying capacity of the system.

Moreover, to evaluate the effectiveness of the policies for development that are defined resulting from the outcome of sustainability evaluation, it could be interesting to extend the assessment of tourism carrying capacity through time, to have a multi-year period of evaluation. Finally, further development of the research could refer to the development of scenarios considering what the situation would be according to existing plans for development in the areas under investigation (e.g. the local structure plan).

#### **8. References**

312 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

implementation of European Charter for Sustainable Tourism in Protected Areas process

The identification of responses to issues, including those which currently have a good carrying capacity score, was carried out in order to prevent possible damages coming from an excessive and uncontrolled tourist development and to address the planning of the entire sector towards sustainability. Clearly, actions developed to be included in a tourist management plan cannot address all the drivers that influence the state of the environment in the destination (e.g. energy generation in Oltrepo Mantovano area). The tourism carrying capacity assessment is intended to support the development of sustainable tourism activities, in order to decouple the economic growth of the tourism sector from its impact on

The most critical aspect associated with carrying capacity assessment of tourism destination is the complexity of making the carrying capacity concept operational and of providing quantitative results, compared to established thresholds. The present study represents an attempt to quantify the current state of every compartment involved in tourism management and to give a quantity perspective on present and future scenarios of destination development, with the aim of addressing future policies for sustainable tourism. The application of the methodology to the two destinations in northern Italy highlighted some critical aspects which should be further considered for research; the following

 there is the need to define thresholds of sustainability, to be able to evaluate the results of the indicators selected for the assessment, even though in some cases (e.g. when commonly recognized values are not available), it could entail a certain degree of

 in the definition of thresholds, a good solution seems to be the use of legal limits, but these are not available for all issues, so further research is required, especially in the

 the use of multiple sources for data collection and of different methodologies for thresholds' definition, implies a certain degree of uncertainty in the final results that should be validated in order to ensure the repeatability of the assessment through space

 the integration between physical carrying capacity and managing carrying capacity supports decision makers in the planning process, providing useful information about the interaction between physical limits determined by the characteristics of the natural environment and limits of the existing structures of the local tourism system (e.g. the number of beds or the capacity of local wastewater treatment plants), all of which can

The choice of not aggregating the indicators to compose a final index of the tourism carrying capacity of the area comes from the consciousness that it is not feasible (or useful) to set a limit to the number of tourists (due also to the fact that not every tourist determines the

(Tarelli et al., 2008, Trentini et al., 2008).

the natural environment in the destination.

paragraph lists some reflections about them:

field of ecological issues (e.g. biodiversity);

influence the feasibility of some responses.

and time and the comparability of the outcomes;

**7. Conclusion** 

subjectivity;


Carrying Capacity of Tourism System: Assessment

"GEDERI", www.gederi.org.

*Tourism Research*, Vol.24, pp. 461– 465.

Vienna: Bodenkultur University.

0582300614, Harlow.

0878936300 Sunderland.

*Planning,* Vol.73, pp. 1–15.

UNDSD/EGM/ISD/2005/CRP.2.

Centre: Split.

pp. 321-331.

156.

Vol.33, pp. 1121-1140.

Surry Hills: Manidis Roberts Consultants.

Italian national water law, D.lgs 192/99. Gazzetta Ufficiale 145, 1999

of Environmental and Management Constraints Towards Sustainability 315

Ioannides, D., Billing, P. (2005). Seminar paper on Carrying Capacity for Interreg IIIC

Khan, M.M. (1997). Tourism development and dependency theory: mass tourism vs.

Lindberg, K., McCool, S., Stankey, F. (1997). Rethinking Carrying Capacity. *Annals of* 

Manidis Roberts Consultants. (1997). *Developing a Tourism Optimization Management Model* 

Manning, R.E. (2002). How much is too much? Carrying capacity of national parks and

Mathieson, A., Wall, G. (1982). *Tourism: Economic, Physical and Social Impacts*. Longman, ISBN

May, V. (1991). Tourism, the environment, and development: values, sustainability and

McCool, S., Lime, D. (2001). Tourism Carrying Capacity: Tempting Fantasy or Useful

Miossec, J.M. (1977). Un modèle de l'espace touristique*. L'espace géographique: régions,* 

Odum, E. (1989). *Ecology and Our Endangered Life Support Systems*. Sinauer Associates, ISBN

Oh, K., Jeong, Y., Lee, D., Lee, W. (2002). An integrated framework for the assessment of urban carrying capacity, *J. Korea Plan. Assoc*., Vol.37, No.5, pp. 7–26. Oh, K., Jeong, Y., Lee, D., Lee, W., Lee, D., Choi, J. (2005). Determining development density

PAP/RAC. (1997). *Guidelines for carrying capacity assessment for tourism in Mediterranean* 

Pinter, L., Hardi, P., Bartelmus, P. (2005). *Sustainable development Indicators: proposal for a way* 

Prato, T. (2001). Modelling carrying capacity for national parks. *Ecological Economics*, Vol.39,

Prideaux, B. (2000). The resort development spectrum – a new approach to modelling resort

Saarinen, J. (2006). Traditions of sustainability in tourism studies. *Annals of Tourism Research*,

Saveriades, A. (1988). Establishing the social tourism carrying capacity for the tourist resorts

of the East Coast of the Republic of Cyprus. *Tourism Management*, Vol.21, pp. 147–

development. *Tourism Management*, Vol.21, pp. 225–240.

using the Urban Carrying Capacity Assessment System. *Landscape and Urban* 

*coastal areas*. PAP-9/1997/G.1. Priority Actions Programme Regional Activity

*forward*. Discussion paper prepared for the UN-DSD expert group meeting on Indicators of sustainable development, 13-15 December 2005. Document No

stewardship. *Tourism Management*, Vol.12, No.2, pp. 112–118.

Reality? *Journal of Sustainable Tourism*, Vol.9, pp. 372–388.

*environnement, aménagement*, Vol.6, No.1, pp. 41-48.

*(TOMM), A Model to Monitor and Manage Tourism on Kangaroo Island, South Australia*.

protected areas, in: *Monitoring and management of visitor flows in recreational and protected areas*. A. Arnberger, C. Brandenburg, A. Muhar, (Eds) (pp. 306–313)

ecotourism, *Annals of Tourism Research*, Vol.24, No.4, pp. 988–991.


Castellani, V., Sala, S. (2012). Ecological Footprint and Life Cycle Assessment in the

Clivaz, C., Hausser, Y., Michelet, J. (2004). *Tourism monitoring system based on the concept of* 

EEA (1999). *Environmental indicators: typology and overview*. In: Technical report, E. Smeets, R.

Elkington, J. (1997). *Cannibals With Forks: the Triple Bottom Line of 21st Century Business*. New

European Commission. (2008). *Action Plan on the Sustainable Consumption and Production and* 

Europarc Federation. (1995). *European Charter for Sustainable Tourism in Protected Areas*.

European Commission. (2007). *A renewed EU tourism policy: towards a stronger partnership for* 

European Commission. (2009). *Review of the European Union Strategy for Sustainable* 

Farrell, B., Twining-Ward, L. (2004). Reconceptualising tourism. *Annals of Tourism Research*,

Gössling, S., Hall, M. (2005). An Introduction to Tourism and Global Environmental Change,

Graefe, A.R., Kuss, F.R. (1990). *Visitor Impact Management: A Planning Framework*. National

Hammond, A., Adriaanse, A., Rodenburg, E., Bryant, D., Woodward, R. (1995).

Hernández, J., León, C. (2007). The interactions between natural and physical capitals in the tourist lifecycle model, *Ecological Economics*, Vol.62, No.1, pp. 184–193. Hof, M., Lime, D.W. (1997). Visitor experience and resource protection framework in the

Godschalk, D.R., Parker, F.H. (1975). Carrying capacity: a key to environmental planning.

Holling, C.S. (1973). Resilience and stability of ecological systems. *Annual Review of Ecology* 

Hughes, G. (2002). Environmental Indicators. *Annals of Tourism Research*, Vol.29, No.2, pp.

Inskeep, E. (1991). *Tourism planning: An integrated and sustainable development approach*. New

Ogden, UT: USDA Forest Service, Intermountain Research Station.

*Journal of Soil Water Conservation*. Vol.30, pp. 160–165.

INEMAR, www.ambiente.regione.lombardia.it/inemar/inemarhome.htm

*and Systematics*, Vol.4, pp. 1−23.

York: Van Nostrand Reinhold.

457–477.

in: *Tourism and Global Environmental Change*, S. Gössling, M. Hall, (Eds) (pp. 1-33),

*Environmental indicators: a systematic approach to measuring and reporting on environmental policy performance in the context of sustainable development*. World

national park system: rationale, current status, and future direction, *Proceedings – Limits of Acceptable Change and Related Planning Processes: Progress and Future Directions, General Technical Report,* S.F. McCool, D.N. Cole, (Eds), (pp. 29-36).

Working papers of the Finnish Forest Research Institute, Vol.2.

Weterings. (Eds), Vol.25, No.19.

Grafenau: Europarc Federation.

*Development*, COM(2009)400.

Vol.31, No.2, pp. 274–295.

Resources Institute.

*European Tourism*, COM (2007) 621 final.

Routledge, ISBN 0-415-36131-1, London.

Parks and Conservation Association, Washington, DC.

Society Publishers, ISBN 0865713928, Canada.

*Sustainable Industrial Policy*. COM/2008/0397 final.

147

sustainability assessment of tourism activities, *Ecological Indicators*, Vol. 16, pp. 135-

*carrying capacity – the case of the regional natural park Pfyn-Finges (Switzerland)*.

Ioannides, D., Billing, P. (2005). Seminar paper on Carrying Capacity for Interreg IIIC "GEDERI", www.gederi.org.


Italian national water law, D.lgs 192/99. Gazzetta Ufficiale 145, 1999

**16** 

*Japan* 

**Reputational Damage to Tourism Industry** 

In the history of Japan, earthquakes have been a frequent occurrence, and some have caused considerable damage. The most recent major earthquake in Japan was the 2011 Tohoku Earthquake, which resulted in unprecedented damage in the country, including damage to a nuclear power plant. When large-scale earthquake disasters occur, direct physical damage to buildings and human causalities are the most visible result. In addition, neighboring

Reputational damage is a type of secondary economic damage that is caused following an earthquake when tourists avoid visiting neighboring tourist areas near the disaster zone, even though the tourist areas did not receive serious physical damage. Reputational damage can result in massive economic harm to the tourism industry in neighboring areas. The tourism industry is a key industry that has a major impact on the overall economy and on employment creation. Tourism involves various services such as hotel, restaurant, and transportation services, all of which are deeply related to the primary and secondary industries in the area. Therefore, reputational damage in neighboring tourist areas, not only results in significant economic damage, but also hinders the rapid reconstruction of physical damage in the earthquake-affected area, as the ability of the neighboring area to provide financial assistance and human cooperation to the disaster area is reduced. Currently, reputational damage from earthquakes is important social

However, effective measures to counter reputational damage in neighboring tourist areas have not been established. In academic research, the search for measures to counter reputational damage following earthquakes has been few, although some research on the mechanisms of reputational damage and case studies of past incidences have been conducted (Sekiya, 2003; Sano et al., 2007; Todoroki et al., 2009; Takano & Meguro, 2010). Consequently, people working in the tourism industry must carry out measures following an earthquake such as campaigns to attract customers and sales promotions using trial and error to find the most effective strategies. The establishment of effective measures to counter

tourist areas near the disaster zone receive reputational damage.

problem in Japan that must be solved.

reputational damage is required immediately.

**1. Introduction** 

**from Earthquakes – Impact and Analysis** 

*Hokkaido Information University & Hokkai School of Commerce* 

**of Mass Media Information** 

Mitsuyoshi Nagao and Azuma Ohuchi


### **Reputational Damage to Tourism Industry from Earthquakes – Impact and Analysis of Mass Media Information**

Mitsuyoshi Nagao and Azuma Ohuchi *Hokkaido Information University & Hokkai School of Commerce Japan* 

#### **1. Introduction**

316 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Stankey, G.H., Cole, D.N. (1985). *The Limits of Acceptable Change (LAC) System for Wilderness Planning*. USDA Forest Service Intermountain Research Station: Ogden, UT. Tarelli, E., Castellani, V., Leoni, L., Sala, S., (2008). *Via Regina: discovering the past for a* 

Trumbic (2005). Tourism Carrying Capacity Assessment in the Mediterranean coastal

US Department of the Interior. (1997). *The Visitor Experience and Resource Protection (VERP)* 

Wagar, J.A. (1974). Recreational carrying capacity reconsidered. *Journal of Forestry*, Vol.72,

White, V., McCrum, G., Blackstock, K.L., Scott, A. (2006). *Indicators and sustainable tourism:* 

WTO. (1999). *Global code of ethics for tourism*. Proceedings of Thirteenth session of General

European Charter for Sustainable Tourism in Protected Areas.

*literature review.* The Macaulay Institute, Aberdeen.

Louisiana, July 17 – 21, 2005.

Park Service: Denver, CO.

Assembly: Santiago, Chile.

No.5, pp. 274–278.

*sustainable future. Strategy and Action Plan 2008-2012*. Technical report for the implementation of European Charter for Sustainable Tourism in Protected Areas. Trentini, C., Porcelli, M., Maiocchi, S., Cuizzi, D., Lini, D., Castellani, V., Sala, S., (2008).

*Environmental analysis to promote a sustainable tourism. Diagnosis of Oltrepo Mantovano Parks System and related strategy*. Technical Report for the implementation of

destinations, *Proceedings of the 14th Biennial Coastal Zone Conference New Orleans*,

*Framework. A Handbook for Planners and Managers*. Denver Service Center, National

In the history of Japan, earthquakes have been a frequent occurrence, and some have caused considerable damage. The most recent major earthquake in Japan was the 2011 Tohoku Earthquake, which resulted in unprecedented damage in the country, including damage to a nuclear power plant. When large-scale earthquake disasters occur, direct physical damage to buildings and human causalities are the most visible result. In addition, neighboring tourist areas near the disaster zone receive reputational damage.

Reputational damage is a type of secondary economic damage that is caused following an earthquake when tourists avoid visiting neighboring tourist areas near the disaster zone, even though the tourist areas did not receive serious physical damage. Reputational damage can result in massive economic harm to the tourism industry in neighboring areas. The tourism industry is a key industry that has a major impact on the overall economy and on employment creation. Tourism involves various services such as hotel, restaurant, and transportation services, all of which are deeply related to the primary and secondary industries in the area. Therefore, reputational damage in neighboring tourist areas, not only results in significant economic damage, but also hinders the rapid reconstruction of physical damage in the earthquake-affected area, as the ability of the neighboring area to provide financial assistance and human cooperation to the disaster area is reduced. Currently, reputational damage from earthquakes is important social problem in Japan that must be solved.

However, effective measures to counter reputational damage in neighboring tourist areas have not been established. In academic research, the search for measures to counter reputational damage following earthquakes has been few, although some research on the mechanisms of reputational damage and case studies of past incidences have been conducted (Sekiya, 2003; Sano et al., 2007; Todoroki et al., 2009; Takano & Meguro, 2010). Consequently, people working in the tourism industry must carry out measures following an earthquake such as campaigns to attract customers and sales promotions using trial and error to find the most effective strategies. The establishment of effective measures to counter reputational damage is required immediately.

Reputational Damage to Tourism Industry from

discussed.

**2.1 Reputational damage** 

Nuclear Power Plant.

by 20% compared to normal years.

trip cancelations and avoidance of an area.

damage to tourist areas following an earthquake disaster.

**2. Reputational damage to the tourism industry** 

Earthquakes – Impact and Analysis of Mass Media Information 319

In this section, the details of reputational damage are described, specifically with regards to public concerns and fears about tourist areas near earthquake disaster zones. In addition, the occurrence of reputational damage is explained and the potential countermeasures are

Reputational damage has been originally used as a word related to indemnity problem of economic damage that actually safe food or product is recognized as an object receiving radioactive contamination by nuclear accident and then people do not buy them (Sekiya, 2003). However, in addition to nuclear accident, reputational damage currently expresses the idea that an unrelated or undamaged industry is harmed economically because of fear and suspicion on the part of the public that product or service quality or safety is diminished following an accident or event. Recently, food and industrial products received significant reputational damage following the nuclear accident at Fukushima Daiichi

Further, reputational damage to neighboring tourist areas near an earthquake disaster zone recently has been recognized as an important social problem. When earthquake disasters occur, the disaster area incurs physical damage such as human causalities and building collapse, but the neighboring tourist areas that do not receive serious physical damage also receive economic damage from reputational damage. The 2004 Niigata Chuetsu Earthquake is an example of a situation where reputational damage happened in the neighboring tourist areas following an earthquake. In this earthquake, reputational damage occurred to the whole of Niigata prefecture, and then the tourism industry in the prefecture incurred economic damage of about 20 billion Japanese yen. The 2005 Fukuoka Earthquake is another example. In this case, the earthquake reduced the number of tourists in Fukuoka prefecture

Japan is situated in an area where many earthquakes occur. Therefore, in comparison with reputational damage generated by nuclear accident or other events, reputational damage from earthquakes has a high possibility of occurring. Moreover, the tourism industry has a very high possibility of receiving reputational damage compared to other industries. Reputational damage results from the characteristic of tourism, namely, that tourism is recreational and not indispensable for living, and even slight worries or fears can result in

Furthermore, the scale of reputational damage in tourism industry is quite large. The tourism industry is an industry that has a strong economic ripple effect on other industries because it consists of various tourism services such as transportation, accommodation, restaurant, and amusement services. In addition, each tourism service is deeply connected to the primary and secondary industries in the region. Reputational damage to the tourism industry near an earthquake disaster zone also influences employment in the area, which can hinder the rapid recovery of the disaster area because the economic damage to the surrounding area limits the ability to provide human and financial cooperation to the disaster area. For these reasons, Japan must find solutions to the problem of reputational

To establish effective measures to counteract reputational damage, the conditions and trends in information sent by mass media such as newspaper and television must be considered. Media information is an important contributor to the occurrence of reputational damage following an earthquake. Often, a large amount of media information about human causalities and building damage in a disaster area is repeatedly broadcast immediately after an earthquake. Even if measures to counteract reputational damage are performed under such circumstances, they do not work effectively. People do not respond to the measures because the negative media information they have received creates feelings of avoidance toward the neighboring tourist area. However, over time, the amount of media information about earthquake damage lessens and more positive media information such as progress toward recovery in the disaster area begins to be reported by the media. This shift can reduce feelings that the neighboring tourist areas are to be avoided. In this stage, if measures to counter reputational damage are performed, they can be effective because less negative media information exists to influence potential tourists. Thus, careful consideration must be given to the conditions and trends in media information when designing strategies to counter reputational damage following earthquakes.

In this chapter, we discuss the mechanisms by which reputational damage occurs to neighboring tourist areas near earthquake disaster zones (Nagao et al., 2006). In this discussion, we look from the viewpoint of the impact of mass media. Subsequently, we manually analyze the conditions and trends in past media information when reputational damage to neighboring tourist areas have occurred following an earthquake in order to confirm the impact of media information in causing reputational damage (Nagao et al., 2010). Here, we use media information on two earthquakes for the analysis. The first is the 2007 Noto Earthquake and the other is the 2007 Niigata Chuetsu Earthquake. These earthquakes caused serious physical damage to the affected areas, and also resulted in significant economic damage from reputational damage to neighboring tourist areas near the disaster area. We use newspaper and Internet news articles as the target of our investigation. In this analysis, we determine the amount and content of information sent by mass media. Using the results of the analysis, we discuss measures to counteract reputational damage on the basis of the conditions and trends in media information.

Media information changes on a daily basis and must be analyzed immediately to examine its content and identify trends in order to implement measures to counteract reputational damage following earthquakes. It is difficult to perform such information analysis manually because the amount of media information is extremely large when an earthquake occurs. Thus, a method is required that can automatically and accurately analyze media information and then immediately provide the results. We propose an analysis method using information technology (Suto et al., 2009; Nagao et al., 2011). Our method consists of Japanese language morphological analysis, pointwise mutual information/information retrieval (PMI-IR), and so on. The proposed method can analyze the similarity and overall impression in media information to examine content and trends in the data. We apply the proposed method to the media information on the two earthquakes described above in order to confirm its adequacy. Moreover, we discuss an effectiveness of our proposed method by comparing the results of a manual inspection of media information with the result obtained by the proposed method. Finally, from the comparison result, we conclude the potential for measures to counter reputational damage following earthquakes based on the conditions and trends of media information.

#### **2. Reputational damage to the tourism industry**

In this section, the details of reputational damage are described, specifically with regards to public concerns and fears about tourist areas near earthquake disaster zones. In addition, the occurrence of reputational damage is explained and the potential countermeasures are discussed.

#### **2.1 Reputational damage**

318 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

To establish effective measures to counteract reputational damage, the conditions and trends in information sent by mass media such as newspaper and television must be considered. Media information is an important contributor to the occurrence of reputational damage following an earthquake. Often, a large amount of media information about human causalities and building damage in a disaster area is repeatedly broadcast immediately after an earthquake. Even if measures to counteract reputational damage are performed under such circumstances, they do not work effectively. People do not respond to the measures because the negative media information they have received creates feelings of avoidance toward the neighboring tourist area. However, over time, the amount of media information about earthquake damage lessens and more positive media information such as progress toward recovery in the disaster area begins to be reported by the media. This shift can reduce feelings that the neighboring tourist areas are to be avoided. In this stage, if measures to counter reputational damage are performed, they can be effective because less negative media information exists to influence potential tourists. Thus, careful consideration must be given to the conditions and trends in media information when designing strategies

In this chapter, we discuss the mechanisms by which reputational damage occurs to neighboring tourist areas near earthquake disaster zones (Nagao et al., 2006). In this discussion, we look from the viewpoint of the impact of mass media. Subsequently, we manually analyze the conditions and trends in past media information when reputational damage to neighboring tourist areas have occurred following an earthquake in order to confirm the impact of media information in causing reputational damage (Nagao et al., 2010). Here, we use media information on two earthquakes for the analysis. The first is the 2007 Noto Earthquake and the other is the 2007 Niigata Chuetsu Earthquake. These earthquakes caused serious physical damage to the affected areas, and also resulted in significant economic damage from reputational damage to neighboring tourist areas near the disaster area. We use newspaper and Internet news articles as the target of our investigation. In this analysis, we determine the amount and content of information sent by mass media. Using the results of the analysis, we discuss measures to counteract

reputational damage on the basis of the conditions and trends in media information.

Media information changes on a daily basis and must be analyzed immediately to examine its content and identify trends in order to implement measures to counteract reputational damage following earthquakes. It is difficult to perform such information analysis manually because the amount of media information is extremely large when an earthquake occurs. Thus, a method is required that can automatically and accurately analyze media information and then immediately provide the results. We propose an analysis method using information technology (Suto et al., 2009; Nagao et al., 2011). Our method consists of Japanese language morphological analysis, pointwise mutual information/information retrieval (PMI-IR), and so on. The proposed method can analyze the similarity and overall impression in media information to examine content and trends in the data. We apply the proposed method to the media information on the two earthquakes described above in order to confirm its adequacy. Moreover, we discuss an effectiveness of our proposed method by comparing the results of a manual inspection of media information with the result obtained by the proposed method. Finally, from the comparison result, we conclude the potential for measures to counter reputational damage following earthquakes based on

to counter reputational damage following earthquakes.

the conditions and trends of media information.

Reputational damage has been originally used as a word related to indemnity problem of economic damage that actually safe food or product is recognized as an object receiving radioactive contamination by nuclear accident and then people do not buy them (Sekiya, 2003). However, in addition to nuclear accident, reputational damage currently expresses the idea that an unrelated or undamaged industry is harmed economically because of fear and suspicion on the part of the public that product or service quality or safety is diminished following an accident or event. Recently, food and industrial products received significant reputational damage following the nuclear accident at Fukushima Daiichi Nuclear Power Plant.

Further, reputational damage to neighboring tourist areas near an earthquake disaster zone recently has been recognized as an important social problem. When earthquake disasters occur, the disaster area incurs physical damage such as human causalities and building collapse, but the neighboring tourist areas that do not receive serious physical damage also receive economic damage from reputational damage. The 2004 Niigata Chuetsu Earthquake is an example of a situation where reputational damage happened in the neighboring tourist areas following an earthquake. In this earthquake, reputational damage occurred to the whole of Niigata prefecture, and then the tourism industry in the prefecture incurred economic damage of about 20 billion Japanese yen. The 2005 Fukuoka Earthquake is another example. In this case, the earthquake reduced the number of tourists in Fukuoka prefecture by 20% compared to normal years.

Japan is situated in an area where many earthquakes occur. Therefore, in comparison with reputational damage generated by nuclear accident or other events, reputational damage from earthquakes has a high possibility of occurring. Moreover, the tourism industry has a very high possibility of receiving reputational damage compared to other industries. Reputational damage results from the characteristic of tourism, namely, that tourism is recreational and not indispensable for living, and even slight worries or fears can result in trip cancelations and avoidance of an area.

Furthermore, the scale of reputational damage in tourism industry is quite large. The tourism industry is an industry that has a strong economic ripple effect on other industries because it consists of various tourism services such as transportation, accommodation, restaurant, and amusement services. In addition, each tourism service is deeply connected to the primary and secondary industries in the region. Reputational damage to the tourism industry near an earthquake disaster zone also influences employment in the area, which can hinder the rapid recovery of the disaster area because the economic damage to the surrounding area limits the ability to provide human and financial cooperation to the disaster area. For these reasons, Japan must find solutions to the problem of reputational damage to tourist areas following an earthquake disaster.

Reputational Damage to Tourism Industry from

Earthquakes – Impact and Analysis of Mass Media Information 321

between the information reported by the mass media and the public relations campaign,

However, over time, the amount of media information about the earthquake decreased and the content of media information shifted from reports of damage to the progress made toward recovery, which eased feelings of avoidance toward visiting the neighboring tourist areas for sightseeing. If the measures to counter reputational damage were performed in this stage, better results could have been expected because there efforts would not have been obstructed by the negative information in the media about earthquake damage. Thus, clarifying the information sent by mass media should be performed and implementation of public relations strategies should be based on the conditions and trends in media

Against this background, in our research, we analyze media information when earthquake disasters occur. Subsequently, we propose an analysis method of media information using

In our research, we employ the media information for two earthquakes to perform media

The 2007 Noto Earthquake was a massive earthquake that occurred in Japan on March 25, 2007. The Noto Peninsula is located on the west coast of Japan and projects into the Sea of Japan (See Fig. 1). Almost the entire peninsula is located in Ishikawa prefecture.

and a long-term shift away from the consumption ocean products occurred.

information for measure countering reputational damage to be effective.

information technologies to automatically analyze media information.

information analysis. The details of two earthquakes are described below.

**3. Earthquake for media information analysis** 

**3.1 2007 Noto earthquake** 

Fig. 1. Location of earthquakes

Thus far, however, academic research on reputational damage to tourist area has been not actively performed. The few examples of academic studies have looked at the mechanism of reputational damage, conducted survey investigation in the area where reputational damage has occurred, and analyzed past examples of reputational damage. Moreover, there have been few academic studies on measures to counteract reputational damage. Therefore, when reputational damage occurs to neighboring tourist area, people engaged in the tourism industry must rely on trial and error when performing countermeasures such as public relations and campaigns for tourism.

#### **2.2 Precipitating factors and measures to counter reputational damage**

One of major precipitating factors of reputational damage is the information sent by mass media. Reputational damage occurs when mass media sends false or exaggerated information. In addition, reputational damage also can occur even when accurate media information is sent to people. This results from the fact that how receivers of media information respond to information, both true and exaggerated, is itself a cause of reputational damage.

When earthquake disasters occur, information about damage in the disaster area is first sent by the mass media. Serious and disturbing damage in disaster area are repeatedly reported day and night by newspaper, television, radio, and other media. Moreover, in this coverage, the areas with the most serious damage are highlighted. Because of this media focus on the worst hit areas, people incorrectly overestimate the scale of the damage. In addition, although people can approximately ascertain the disaster area, doing so precisely is difficult with only media information. People incorrectly perceive that a wider area than the actual damaged area has received serious damage and is dangerous. Tourist resorts in the area falsely believed to have incurred damage receive reputational damage. Preventing reputational damage is difficult because its causes lie not only in the information sent by mass media but also in the receivers of information. Therefore, countermeasures should be implemented that can effectively limit reputational damage and promote recovery.

To implement effective measures to counter reputational damage, the conditions and trends in media information must be considered, as it is a major factor in causing reputational damage. People feel the need to avoid visiting neighboring tourist areas for sightseeing immediately after an earthquake because media information on damage causes them to overestimate the extent of damage in the wider area around the disaster zone. In such situations, even if strategies such as public relations for tourism promotion are performed, they are not effective. Moreover, people doubt the reliability of information conveyed in these public relations efforts and the measure may have a negative impact. For example, premature measures to counter reputational damage following the 2007 Niigata Chuetsu Earthquake had a negative effect. In this earthquake, a nuclear power plant near the epicenter suffered damage and water containing radiological material flowed from the nuclear power plant into the sea. The mayor undertook a public relations campaign to emphasize that ocean products were harmless. The public relations campaign was performed immediately after the occurrence of earthquake and the damage investigation at the nuclear power plant has not completed yet. For this reason, the public relations efforts had no effect. Moreover, after the campaign, mass media reported many damaged parts and problems at the nuclear power plant. People became suspicious of the discrepancies between the information reported by the mass media and the public relations campaign, and a long-term shift away from the consumption ocean products occurred.

However, over time, the amount of media information about the earthquake decreased and the content of media information shifted from reports of damage to the progress made toward recovery, which eased feelings of avoidance toward visiting the neighboring tourist areas for sightseeing. If the measures to counter reputational damage were performed in this stage, better results could have been expected because there efforts would not have been obstructed by the negative information in the media about earthquake damage. Thus, clarifying the information sent by mass media should be performed and implementation of public relations strategies should be based on the conditions and trends in media information for measure countering reputational damage to be effective.

Against this background, in our research, we analyze media information when earthquake disasters occur. Subsequently, we propose an analysis method of media information using information technologies to automatically analyze media information.

### **3. Earthquake for media information analysis**

In our research, we employ the media information for two earthquakes to perform media information analysis. The details of two earthquakes are described below.

#### **3.1 2007 Noto earthquake**

320 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Thus far, however, academic research on reputational damage to tourist area has been not actively performed. The few examples of academic studies have looked at the mechanism of reputational damage, conducted survey investigation in the area where reputational damage has occurred, and analyzed past examples of reputational damage. Moreover, there have been few academic studies on measures to counteract reputational damage. Therefore, when reputational damage occurs to neighboring tourist area, people engaged in the tourism industry must rely on trial and error when performing countermeasures such as

One of major precipitating factors of reputational damage is the information sent by mass media. Reputational damage occurs when mass media sends false or exaggerated information. In addition, reputational damage also can occur even when accurate media information is sent to people. This results from the fact that how receivers of media information respond to information, both true and exaggerated, is itself a cause of

When earthquake disasters occur, information about damage in the disaster area is first sent by the mass media. Serious and disturbing damage in disaster area are repeatedly reported day and night by newspaper, television, radio, and other media. Moreover, in this coverage, the areas with the most serious damage are highlighted. Because of this media focus on the worst hit areas, people incorrectly overestimate the scale of the damage. In addition, although people can approximately ascertain the disaster area, doing so precisely is difficult with only media information. People incorrectly perceive that a wider area than the actual damaged area has received serious damage and is dangerous. Tourist resorts in the area falsely believed to have incurred damage receive reputational damage. Preventing reputational damage is difficult because its causes lie not only in the information sent by mass media but also in the receivers of information. Therefore, countermeasures should be implemented that can effectively limit

To implement effective measures to counter reputational damage, the conditions and trends in media information must be considered, as it is a major factor in causing reputational damage. People feel the need to avoid visiting neighboring tourist areas for sightseeing immediately after an earthquake because media information on damage causes them to overestimate the extent of damage in the wider area around the disaster zone. In such situations, even if strategies such as public relations for tourism promotion are performed, they are not effective. Moreover, people doubt the reliability of information conveyed in these public relations efforts and the measure may have a negative impact. For example, premature measures to counter reputational damage following the 2007 Niigata Chuetsu Earthquake had a negative effect. In this earthquake, a nuclear power plant near the epicenter suffered damage and water containing radiological material flowed from the nuclear power plant into the sea. The mayor undertook a public relations campaign to emphasize that ocean products were harmless. The public relations campaign was performed immediately after the occurrence of earthquake and the damage investigation at the nuclear power plant has not completed yet. For this reason, the public relations efforts had no effect. Moreover, after the campaign, mass media reported many damaged parts and problems at the nuclear power plant. People became suspicious of the discrepancies

**2.2 Precipitating factors and measures to counter reputational damage** 

public relations and campaigns for tourism.

reputational damage and promote recovery.

reputational damage.

The 2007 Noto Earthquake was a massive earthquake that occurred in Japan on March 25, 2007. The Noto Peninsula is located on the west coast of Japan and projects into the Sea of Japan (See Fig. 1). Almost the entire peninsula is located in Ishikawa prefecture.

Fig. 1. Location of earthquakes

Reputational Damage to Tourism Industry from

Earthquakes – Impact and Analysis of Mass Media Information 323

For the 2007 Niigata Chuetsu Earthquake, we collected earthquake-related articles from MSN Sankei News (sankei.jp.msn.com), Niigata-Nippo Online (www.niigata-nippo.co.jp) and YOMIURI Online. Yomiuri Online and MSN Sankei News are managed by national newspaper publishing companies in Japan, and Chunichi Web and Niigata-Nippo Online are managed by local newspaper publishing companies. In this collection, we treated articles including the name of the earthquake as the disaster-related information. The collection period

We investigated the amount of information in newspapers and web news. To determine the amount of information, we used the amount of page space of earthquake-related articles for printed newspaper and the number of articles for web news. Moreover, we analyzed the contents of articles collected from both media. In this content analysis, we classified the articles into three categories on the basis of whether or not the article gave readers the feelings of avoidance toward visiting neighboring tourist resorts for sightseeing. The articles that prompted feelings of avoidance were classified into the NEGATIVE category. For example, articles that gave damage reports, the number of deaths, and the like were classified in this category. Articles that ease feelings of avoidance were classified into the POSITIVE category. This category included the articles about the progress of recovery, visits of celebrities, and similar topics. Finally, the articles that neither caused nor eased feelings of avoidance were classified into the NEUTRAL category. The articles reported on topics such as the economic and political changes

The analysis results are shown in Fig. 2 through Fig. 5. Figure 2 and Fig. 4 indicate the change in the amount of earthquake-related information in newspapers and web news, respectively, for the two earthquakes. Fig. 3 and Fig. 5 represent the change in the content

was two months from the day of the occurrence of each earthquake.

related to the earthquake were included in this category.

ratio in each category for newspaper and web news, respectively.

Fig. 2. Amount of earthquake-related information in newspapers

**4.2 Analysis results** 

The epicenter of the earthquake was in the Sea of Japan near the Noto peninsula. The magnitude of the earthquake was estimated at 6.9 on the Richter scale. Shaking in the city of Nanao and the town of Anamizu in Ishikawa prefecture was measured as 6 upper on the Japan Meteorological Agency (JMA) seismic intensity scale. The earthquake caused extensive damage to many cities and towns in Ishikawa prefecture and neighboring Toyama prefecture. In terms of human casualties, one person died and at least 279 people were injured in Ishikawa and Toyama prefectures. In terms of property damage, 649 houses were completely destroyed and 26,614 houses were partly destroyed. Lifeline utilities (electricity, water, gas, etc.) were cut off. In addition, all rail service in this area stopped. Following this earthquake, reputational damage was incurred by many tourist areas in Ishikawa prefecture. For example, at the Wakura Hot Spring Resort in Ishikawa prefecture, 66,413 hotel bookings were cancelled during the month following the earthquake. Wajima city in Ishikawa prefecture had 15,526 hotel booking cancelations. Moreover, the tourism-related sales decreased by 20% in the resorts at Kaga Hot Spring in Ishikawa prefecture, which received almost no physical damage and is far from the epicenter.

#### **3.2 2007 Niigata Chuetsu earthquake**

The 2007 Niigata Chuetsu Earthquake occurred on July 16, 2007. Niigata prefecture is located on the western side of Japan along the Sea of Japan (See Fig. 1). Chuetsu is the central area of the three mainland areas of Niigata prefecture. The epicenter of the earthquake was in the Sea of Japan off the coast of Chuetsu. The magnitude of the earthquake was estimated at 6.8 on the Richter scale. Kashiwazaki city, Nagaoka city, and Kariwa village registered the highest seismic intensity, registering 6 upper on the JMA scale. Fifteen deaths and at least 2,315 injuries were reported. In addition, 1,319 buildings were completely destroyed and 40,280 buildings were partly destroyed. Lifeline utilities and various transport facilities were disrupted. Considerable damage resulted from this earthquake and several incidents occurred at the Kashiwazaki-Kariya Nuclear Power Plant. A fire broke out in an electrical transformer and radioactive gases leaked from the nuclear power plant. Many tourist areas in Niigata prefecture experienced significant reputational damage as a result of the public's fears concerning the plant accident. For example, the number of hotel guests in all hot spring resorts in Niigata prefecture was reported to decrease by 40%.

#### **4. Analysis of media information**

We analyze the information sent by mass media following the two earthquakes described above in order to investigate the actual condition of the media information. The analysis method and result are described below.

#### **4.1 Analysis method**

We collected the information on the earthquakes from two types of media — print newspapers and Internet news websites managed by newspaper publishing companies (henceforth, described as web news). For each earthquake, we collected earthquake-related articles from five newspapers, including four national newspapers and one local newspaper. In the analysis of web news, we used two websites for the 2007 Noto Earthquake and three websites for the 2007 Niigata Chuetsu Earthquake, respectively. For the 2007 Noto Earthquake, articles were taken from Chunichi Web (www.chunichi.co.jp) and Yomiuri Online (www.yomiuri.co.jp). For the 2007 Niigata Chuetsu Earthquake, we collected earthquake-related articles from MSN Sankei News (sankei.jp.msn.com), Niigata-Nippo Online (www.niigata-nippo.co.jp) and YOMIURI Online. Yomiuri Online and MSN Sankei News are managed by national newspaper publishing companies in Japan, and Chunichi Web and Niigata-Nippo Online are managed by local newspaper publishing companies. In this collection, we treated articles including the name of the earthquake as the disaster-related information. The collection period was two months from the day of the occurrence of each earthquake.

We investigated the amount of information in newspapers and web news. To determine the amount of information, we used the amount of page space of earthquake-related articles for printed newspaper and the number of articles for web news. Moreover, we analyzed the contents of articles collected from both media. In this content analysis, we classified the articles into three categories on the basis of whether or not the article gave readers the feelings of avoidance toward visiting neighboring tourist resorts for sightseeing. The articles that prompted feelings of avoidance were classified into the NEGATIVE category. For example, articles that gave damage reports, the number of deaths, and the like were classified in this category. Articles that ease feelings of avoidance were classified into the POSITIVE category. This category included the articles about the progress of recovery, visits of celebrities, and similar topics. Finally, the articles that neither caused nor eased feelings of avoidance were classified into the NEUTRAL category. The articles reported on topics such as the economic and political changes related to the earthquake were included in this category.

#### **4.2 Analysis results**

322 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

The epicenter of the earthquake was in the Sea of Japan near the Noto peninsula. The magnitude of the earthquake was estimated at 6.9 on the Richter scale. Shaking in the city of Nanao and the town of Anamizu in Ishikawa prefecture was measured as 6 upper on the Japan Meteorological Agency (JMA) seismic intensity scale. The earthquake caused extensive damage to many cities and towns in Ishikawa prefecture and neighboring Toyama prefecture. In terms of human casualties, one person died and at least 279 people were injured in Ishikawa and Toyama prefectures. In terms of property damage, 649 houses were completely destroyed and 26,614 houses were partly destroyed. Lifeline utilities (electricity, water, gas, etc.) were cut off. In addition, all rail service in this area stopped. Following this earthquake, reputational damage was incurred by many tourist areas in Ishikawa prefecture. For example, at the Wakura Hot Spring Resort in Ishikawa prefecture, 66,413 hotel bookings were cancelled during the month following the earthquake. Wajima city in Ishikawa prefecture had 15,526 hotel booking cancelations. Moreover, the tourism-related sales decreased by 20% in the resorts at Kaga Hot Spring in Ishikawa prefecture, which

The 2007 Niigata Chuetsu Earthquake occurred on July 16, 2007. Niigata prefecture is located on the western side of Japan along the Sea of Japan (See Fig. 1). Chuetsu is the central area of the three mainland areas of Niigata prefecture. The epicenter of the earthquake was in the Sea of Japan off the coast of Chuetsu. The magnitude of the earthquake was estimated at 6.8 on the Richter scale. Kashiwazaki city, Nagaoka city, and Kariwa village registered the highest seismic intensity, registering 6 upper on the JMA scale. Fifteen deaths and at least 2,315 injuries were reported. In addition, 1,319 buildings were completely destroyed and 40,280 buildings were partly destroyed. Lifeline utilities and various transport facilities were disrupted. Considerable damage resulted from this earthquake and several incidents occurred at the Kashiwazaki-Kariya Nuclear Power Plant. A fire broke out in an electrical transformer and radioactive gases leaked from the nuclear power plant. Many tourist areas in Niigata prefecture experienced significant reputational damage as a result of the public's fears concerning the plant accident. For example, the number of hotel guests in all hot spring resorts

We analyze the information sent by mass media following the two earthquakes described above in order to investigate the actual condition of the media information. The analysis

We collected the information on the earthquakes from two types of media — print newspapers and Internet news websites managed by newspaper publishing companies (henceforth, described as web news). For each earthquake, we collected earthquake-related articles from five newspapers, including four national newspapers and one local newspaper. In the analysis of web news, we used two websites for the 2007 Noto Earthquake and three websites for the 2007 Niigata Chuetsu Earthquake, respectively. For the 2007 Noto Earthquake, articles were taken from Chunichi Web (www.chunichi.co.jp) and Yomiuri Online (www.yomiuri.co.jp).

received almost no physical damage and is far from the epicenter.

**3.2 2007 Niigata Chuetsu earthquake** 

in Niigata prefecture was reported to decrease by 40%.

**4. Analysis of media information** 

method and result are described below.

**4.1 Analysis method** 

The analysis results are shown in Fig. 2 through Fig. 5. Figure 2 and Fig. 4 indicate the change in the amount of earthquake-related information in newspapers and web news, respectively, for the two earthquakes. Fig. 3 and Fig. 5 represent the change in the content ratio in each category for newspaper and web news, respectively.

Fig. 2. Amount of earthquake-related information in newspapers

Reputational Damage to Tourism Industry from

Chuetsu Earthquake, respectively.

Fig. 3. Results of content analysis of newspapers

Next, we discuss the results of the analysis of web news. Figure 4 shows the change in the amount of information for web news over time. The maximum amount of information emerged on day following the both earthquakes, which reflects the time that is required to

Earthquakes – Impact and Analysis of Mass Media Information 325

periods in terms of both the amount and content of media information. In regard to the content of media information, we regarded calm periods as when the ratio of NEGATIVE articles is low and the ratio of POSITIVE articles begins to rise. This calm period was identified with consideration of the continuity of the ratios for each category. In the analysis results for newspapers, it was found that the appropriate period for measures to counter reputational damage depended on the calm period in terms of content. Therefore, the calm period was four weeks after the Noto Earthquake, and was about six weeks after the Niigata

In Fig. 2 and Fig. 4, the x-axis represents the number of days elapsed after the earthquake and y-axis represents the amount of information. For newspapers (Fig. 2), the amount of information represents total amount of page space of articles published by the five newspapers. For web news, the amount of information reflects the average number of articles published on websites (Fig. 4). In Fig. 3 and Fig. 5, the top graph indicates the results of the content analysis of articles covering the 2007 Noto Earthquake and the bottom graph indicates the results for the 2007 Niigata Chuetsu Earthquake. In these figures, the x-axis represents the number of days elapsed after the earthquake and the y-axis represents the content ratio in each category. In these charts, the value at the top of the dark bar represents the ratio of NEGATIVE articles and the value of bottom of dark bar represents the ratio of POSITIVE articles, respectively. When the bar is light-colored, the type of content is reversed, with the ratio of POSITIVE articles at the top and NEGATIVE news at the bottom.

First, we discuss the analysis result for newspaper. As shown in Fig. 2, the amount of information on the Noto Earthquake rapidly decreased following the third day after the earthquake, and the amount of information did not increase after this. In the case of the Noto Earthquake, property damage happened over a wide area, but few people died. It is likely that the amount of information decreased because of a lack of fresh news. In the case of Niigata Chuetsu Earthquake, the amount of information dropped steadily over the first week and then increased during the second week. After the first month, the amount of information increased again. After this, the amount of information did not increase, except for an upward tick on the 48th day after the earthquake. This increase after the 48th day resulted because of the tourism public relations advertisements published by government and is an exception to the general trend in newspaper coverage. For this earthquake, prolonged coverage was performed, likely because this earthquake caused unique damage (e.g., the accident in nuclear power plant and stoppage of automobile manufacturing) that had negative impacts on other areas. To compare the two results, when news coverage extended over a long period of time, the summary of the events of the earthquake disaster was reported. In addition, the results show that the continuity of coverage depends on the scale and features of the damage from the earthquake.

In Fig. 3, the content of newspaper articles on the Noto Earthquake can be divided into three periods on the basis of the ratio between the three categories. The first period is from the day of the earthquake through one week after. The second period is between one and about four weeks after the earthquake. The final period is the period more than four weeks from the occurrence. In the first period, the ratio of NEGATIVE articles was continuously high. In the second period, the ratio of POSITIVE articles increased on some days and the ratios of NEGATIVE articles varied. In the final period, the content fell solely into the NEUTRAL category. The result of the content analysis can also be divided into three periods for the Niigata Chuetsu Earthquake. The first period is from the date of the earthquake until 30 days after. The second period is from 30 days to 40 days after the earthquake. The final period is more than 40 days after the earthquake. In the first period, the ratio of NEGATIVE articles was consistently high. In the second period, the ratio of NEGATIVE category decreased. In the third period, the content ratio for each category showed large variation.

We use the results above to discuss the conditions and trends of media information from the viewpoint of countering reputational damage in surrounding areas. It is obvious that the appropriate period to start measures to counter for reputational damage is during calm

In Fig. 2 and Fig. 4, the x-axis represents the number of days elapsed after the earthquake and y-axis represents the amount of information. For newspapers (Fig. 2), the amount of information represents total amount of page space of articles published by the five newspapers. For web news, the amount of information reflects the average number of articles published on websites (Fig. 4). In Fig. 3 and Fig. 5, the top graph indicates the results of the content analysis of articles covering the 2007 Noto Earthquake and the bottom graph indicates the results for the 2007 Niigata Chuetsu Earthquake. In these figures, the x-axis represents the number of days elapsed after the earthquake and the y-axis represents the content ratio in each category. In these charts, the value at the top of the dark bar represents the ratio of NEGATIVE articles and the value of bottom of dark bar represents the ratio of POSITIVE articles, respectively. When the bar is light-colored, the type of content is reversed, with the ratio of POSITIVE articles at the top and NEGATIVE news at the bottom. First, we discuss the analysis result for newspaper. As shown in Fig. 2, the amount of information on the Noto Earthquake rapidly decreased following the third day after the earthquake, and the amount of information did not increase after this. In the case of the Noto Earthquake, property damage happened over a wide area, but few people died. It is likely that the amount of information decreased because of a lack of fresh news. In the case of Niigata Chuetsu Earthquake, the amount of information dropped steadily over the first week and then increased during the second week. After the first month, the amount of information increased again. After this, the amount of information did not increase, except for an upward tick on the 48th day after the earthquake. This increase after the 48th day resulted because of the tourism public relations advertisements published by government and is an exception to the general trend in newspaper coverage. For this earthquake, prolonged coverage was performed, likely because this earthquake caused unique damage (e.g., the accident in nuclear power plant and stoppage of automobile manufacturing) that had negative impacts on other areas. To compare the two results, when news coverage extended over a long period of time, the summary of the events of the earthquake disaster was reported. In addition, the results show that the continuity of coverage depends on the

In Fig. 3, the content of newspaper articles on the Noto Earthquake can be divided into three periods on the basis of the ratio between the three categories. The first period is from the day of the earthquake through one week after. The second period is between one and about four weeks after the earthquake. The final period is the period more than four weeks from the occurrence. In the first period, the ratio of NEGATIVE articles was continuously high. In the second period, the ratio of POSITIVE articles increased on some days and the ratios of NEGATIVE articles varied. In the final period, the content fell solely into the NEUTRAL category. The result of the content analysis can also be divided into three periods for the Niigata Chuetsu Earthquake. The first period is from the date of the earthquake until 30 days after. The second period is from 30 days to 40 days after the earthquake. The final period is more than 40 days after the earthquake. In the first period, the ratio of NEGATIVE articles was consistently high. In the second period, the ratio of NEGATIVE category decreased. In the third period, the content ratio for each category showed large variation.

We use the results above to discuss the conditions and trends of media information from the viewpoint of countering reputational damage in surrounding areas. It is obvious that the appropriate period to start measures to counter for reputational damage is during calm

scale and features of the damage from the earthquake.

periods in terms of both the amount and content of media information. In regard to the content of media information, we regarded calm periods as when the ratio of NEGATIVE articles is low and the ratio of POSITIVE articles begins to rise. This calm period was identified with consideration of the continuity of the ratios for each category. In the analysis results for newspapers, it was found that the appropriate period for measures to counter reputational damage depended on the calm period in terms of content. Therefore, the calm period was four weeks after the Noto Earthquake, and was about six weeks after the Niigata Chuetsu Earthquake, respectively.

Fig. 3. Results of content analysis of newspapers

Next, we discuss the results of the analysis of web news. Figure 4 shows the change in the amount of information for web news over time. The maximum amount of information emerged on day following the both earthquakes, which reflects the time that is required to

Reputational Damage to Tourism Industry from

Fig. 5. Results of content analysis of web news

publication of the web news articles can be expected.

Earthquakes – Impact and Analysis of Mass Media Information 327

For web news, articles about events and affairs are published even if they are not highly topical. In addition, articles are published promptly on the website. Therefore, a strategy of active public relations measures during the calm period of media information is an effective method to counter reputational damage from web news. By performing such measures, the effect of the public relations efforts can be obtained first, and then the ripple effects from the

Moreover, reputational damage from earthquake is specifically connected with the effects of potential visitors hesitating to go sightseeing near the disaster area even if it is safe. Therefore, the public relations campaign must clarify that visiting neighboring tourist areas

for sightseeing contributes to the smooth rehabilitation of the disaster area.

confirm the total damage done by earthquake. Although web news can be quickly posted on the Internet, the maximum value emerged on the next day following the earthquake because it took time to investigate the totality of the damage situation, given that these earthquakes caused damage over large areas. The subsequent slow decrease in web news could be found for both earthquakes although the trend in the amount information in two earthquakes differs over the first two weeks after the earthquake. This overall trend and the amount of information means that web news reach a calm period after two weeks following the earthquake

Fig. 4. Amount of information in web news

In Fig. 5, the calm period in terms of web news content is regarded as when the ratio of NEGATIVE articles is low and the ratio of POSITIVE articles begins to rise. This period corresponds to the period two weeks after the Noto Earthquake. For the Niigata Chuetsu Earthquake, it was about four weeks later. The appropriate period for measures to counteract reputational damage from web news corresponds with the calm period of content of media information in common with the results for newspaper.

Figure 6 summarizes the results for the appropriate period to conduct measures to counteract reputational damage after the two earthquakes. We discuss methods to counter reputational damage from each media on the basis of the analysis results. For newspaper, a large amount of page space dedicated to a story attracts readers' attention, and typically it is difficult for an article to be published if it is not topical. Therefore, to be effective, countermeasures using newspapers should include the placement of public relations advertisements that have a wide enough area to attract a great deal of attention during the calm period of media information. Advertising activity during the calm period influences people without being obstructed by media information that gives negative impressions about visiting neighboring tourist areas for sightseeing. Then the countermeasure can begin to remove negative impressions and build positive impressions about tourism in the areas near the earthquake zone. Moreover, such a strategy is expected to effect people of all ages because newspapers are read by many types of people.

confirm the total damage done by earthquake. Although web news can be quickly posted on the Internet, the maximum value emerged on the next day following the earthquake because it took time to investigate the totality of the damage situation, given that these earthquakes caused damage over large areas. The subsequent slow decrease in web news could be found for both earthquakes although the trend in the amount information in two earthquakes differs over the first two weeks after the earthquake. This overall trend and the amount of information means that web news reach a calm period after two weeks

In Fig. 5, the calm period in terms of web news content is regarded as when the ratio of NEGATIVE articles is low and the ratio of POSITIVE articles begins to rise. This period corresponds to the period two weeks after the Noto Earthquake. For the Niigata Chuetsu Earthquake, it was about four weeks later. The appropriate period for measures to counteract reputational damage from web news corresponds with the calm period of

Figure 6 summarizes the results for the appropriate period to conduct measures to counteract reputational damage after the two earthquakes. We discuss methods to counter reputational damage from each media on the basis of the analysis results. For newspaper, a large amount of page space dedicated to a story attracts readers' attention, and typically it is difficult for an article to be published if it is not topical. Therefore, to be effective, countermeasures using newspapers should include the placement of public relations advertisements that have a wide enough area to attract a great deal of attention during the calm period of media information. Advertising activity during the calm period influences people without being obstructed by media information that gives negative impressions about visiting neighboring tourist areas for sightseeing. Then the countermeasure can begin to remove negative impressions and build positive impressions about tourism in the areas near the earthquake zone. Moreover, such a strategy is expected to effect people of all ages

content of media information in common with the results for newspaper.

because newspapers are read by many types of people.

following the earthquake

Fig. 4. Amount of information in web news

Fig. 5. Results of content analysis of web news

For web news, articles about events and affairs are published even if they are not highly topical. In addition, articles are published promptly on the website. Therefore, a strategy of active public relations measures during the calm period of media information is an effective method to counter reputational damage from web news. By performing such measures, the effect of the public relations efforts can be obtained first, and then the ripple effects from the publication of the web news articles can be expected.

Moreover, reputational damage from earthquake is specifically connected with the effects of potential visitors hesitating to go sightseeing near the disaster area even if it is safe. Therefore, the public relations campaign must clarify that visiting neighboring tourist areas for sightseeing contributes to the smooth rehabilitation of the disaster area.

Reputational Damage to Tourism Industry from

Fig. 7. Overview of proposed method of content anaylsis

nouns (verb, adjectives, numbers, symbols, etc.) are removed.

nouns and the line feed and punctuation information in the text.

**5.3 Association rule mining** 

**5.2 Japanese language morphological analysis** 

Earthquakes – Impact and Analysis of Mass Media Information 329

emphasis of the overall content can be obtained by extracting important words based on χ<sup>2</sup> value. The trend of media information can be appropriately grasped by calculating the similarity from the viewpoints of two criteria. The detail of each step is shown below.

In our method, we use Mecab, an open source Japanese language morphological analysis engine, in order to resolve text information into morphemes (Kudo, 2011). Only nouns are extracted from text information in this operation, and morphemes for words other than

In addition, we connect nouns extracted in the Japanese language morphological analysis that are part of multiword phrases or names. Thus, some continuous nouns are treated as one noun by connecting them. For example, the name "Sapporo city" is normally divided into two nouns—"Sapporo" and "city"— in Japanese language morphological analysis. We link both parts so that "Sapporo city" is treated as one noun. This operation can prevent an excessive resolution of one word and maintain the original meaning of the expression.

After this, a word appearance list is created, consisting of the combinations of nouns and the number of lines on which each noun is included. This operation is based on the extracted

Basically, in our research, the content of media information is analyzed using the frequency of words, including nouns and multiword noun phrases. Namely, frequently appearing

Fig. 6. Summary of media information analysis

#### **5. Method of analysis for media information using information technology**

The contents of media information have been found to be important when determining the calm period for performing the measures to counteract reputational damage. A manual analysis of media information content is not suitable for providing analysis results in real time when an earthquake occurs because the amount of information is extremely large. Therefore, an automatic method of content analysis is required. In this research, we propose an analysis method using information technologies. The details of the proposed method are described below.

#### **5.1 Overview of proposed method**

We propose a method for analyzing trends in the content of media information that compares the similarity of information over time following an earthquake. It is clear that the information about damage and human causalities is repeatedly published immediately after the earthquake and the content gradually shifts to a focus on recovery progress over time. Therefore, our method compares the content of media information immediately after the earthquake with the subsequent content of media information further from the date of the earthquake. The trends in media information are quantified by comparing the results.

An overview of proposed method is shown in Fig. 7. In the proposed method, the media information is analyzed on a daily basis. First, media information is broken down into morphemes, which are the minimum unit in language that has meaning. Association rule mining is then applied to the extracted morphemes and can extract frequently appearing words in the media information. Next, the value of χ2 is calculated on the basis of the co-occurrence frequency of frequently appearing extracted words. By this method, important words in the media information are identified. The similarity of the content is calculated using the rank correlation coefficients of frequently appearing and important words. The trends in media information are quantified by this process.

The proposed method can schematically grasp the overall content of media information by extracting frequently appearing words based on association rule mining. In addition, the

**5. Method of analysis for media information using information technology** 

The contents of media information have been found to be important when determining the calm period for performing the measures to counteract reputational damage. A manual analysis of media information content is not suitable for providing analysis results in real time when an earthquake occurs because the amount of information is extremely large. Therefore, an automatic method of content analysis is required. In this research, we propose an analysis method using information technologies. The details of

We propose a method for analyzing trends in the content of media information that compares the similarity of information over time following an earthquake. It is clear that the information about damage and human causalities is repeatedly published immediately after the earthquake and the content gradually shifts to a focus on recovery progress over time. Therefore, our method compares the content of media information immediately after the earthquake with the subsequent content of media information further from the date of the earthquake. The trends in media information are quantified by comparing the results.

An overview of proposed method is shown in Fig. 7. In the proposed method, the media information is analyzed on a daily basis. First, media information is broken down into morphemes, which are the minimum unit in language that has meaning. Association rule mining is then applied to the extracted morphemes and can extract frequently appearing words in the media information. Next, the value of χ2 is calculated on the basis of the co-occurrence frequency of frequently appearing extracted words. By this method, important words in the media information are identified. The similarity of the content is calculated using the rank correlation coefficients of frequently appearing and important

The proposed method can schematically grasp the overall content of media information by extracting frequently appearing words based on association rule mining. In addition, the

words. The trends in media information are quantified by this process.

Fig. 6. Summary of media information analysis

the proposed method are described below.

**5.1 Overview of proposed method** 

emphasis of the overall content can be obtained by extracting important words based on χ<sup>2</sup> value. The trend of media information can be appropriately grasped by calculating the similarity from the viewpoints of two criteria. The detail of each step is shown below.

Fig. 7. Overview of proposed method of content anaylsis

#### **5.2 Japanese language morphological analysis**

In our method, we use Mecab, an open source Japanese language morphological analysis engine, in order to resolve text information into morphemes (Kudo, 2011). Only nouns are extracted from text information in this operation, and morphemes for words other than nouns (verb, adjectives, numbers, symbols, etc.) are removed.

In addition, we connect nouns extracted in the Japanese language morphological analysis that are part of multiword phrases or names. Thus, some continuous nouns are treated as one noun by connecting them. For example, the name "Sapporo city" is normally divided into two nouns—"Sapporo" and "city"— in Japanese language morphological analysis. We link both parts so that "Sapporo city" is treated as one noun. This operation can prevent an excessive resolution of one word and maintain the original meaning of the expression.

After this, a word appearance list is created, consisting of the combinations of nouns and the number of lines on which each noun is included. This operation is based on the extracted nouns and the line feed and punctuation information in the text.

#### **5.3 Association rule mining**

Basically, in our research, the content of media information is analyzed using the frequency of words, including nouns and multiword noun phrases. Namely, frequently appearing words are extracted by association rule mining in this step. We employ an Apriori algorithm, which is the association rule extraction algorithm proposed by Agawal (Honiden, 2005). In this algorithm, the user decides thresholds for support and confidence, and words having values over the thresholds are extracted.

As the first step in extracting frequently appearing words, the support value is calculated for each word in the word appearance list. The support value represents the probability of occurrence for a word. We calculate the support value by using formula (1). In formula (1), the support value considers the number of words and the number of the word types in the text is calculated, as the probability of occurrence for word is sensitive to these numbers. In the first calculation step in formula (1), *X* equals *Y* because each word consists of one noun.

$$s = P(X \cap Y) \times \frac{I \times N\_{std}}{N \times I\_{std}} \tag{1}$$

Reputational Damage to Tourism Industry from

Earthquakes – Impact and Analysis of Mass Media Information 331

frequently appearing word list is calculated. The value of *χ<sup>2</sup>* is calculated using formula (3), based on the expectation and co-occurrence frequency of the words. If a word co-occurs with a particular word, a relationship between ancillary words likely exists among these words. Thus, a value of *χ2'* is employed that ignores the ancillary relationship. The value of

> <sup>2</sup> ( (, ) ) ( ) *i w w W i w freq i w n p <sup>i</sup>*

2 2 ( (, ) ) ( )' ( ) max *i w*

Media information is collected daily. Thus, a frequently appearing word list and an important word list are created for each day. Kendall's rank correlation coefficients between the frequently appearing word lists and the important word lists are calculated using formula (5). Kendall's rank correlation coefficient for the frequently appearing word lists indicates the recapitulative similarity of media information and for the important word lists

> ( 1) ( 1) 2 2

*<sup>R</sup> nn nn T T* 

1

1

: Combination of words that have an order relation of word i > word j in list x and same order

*Q* ist x and an order

*t t*

*y n j j*

*y j*

*T*

: Combination of words that have an order relation of word i > word j in l

: Number of words with same rank as word i in word list x : Number of words with same rank as word j in word list y

*x n i i <sup>x</sup> i t t <sup>T</sup>* 

*ij ij*

( 1) 2

( 1) 2

*P Q*

*x y*

*freq i w n p i i*

: Total number of co-occurrence between word i and set of frequently appearing word w

*n p*

*w W i w*

*n p*

2

(3)

2

(4)

(5)

(6)

(7)

*χ2'* is calculated by a formula (4). The important word list is created using *χ2'* value.

 

indicates the similarity of content emphasized in the media, respectively.

( , ) : Co-occurrence frequency of word i and w W

: Occurrence probability of frequently appearing word

**5.5 Kendall's rank correlation coefficient** 

*i w*

*n p*

*freq i w*

relation in list y

: Length of list

relation of word j < word i in list y

*ij*

*P*

*ij*

*i j*

*n t t*

: Number of words appearing in text *N*

: Kinds of words appearing in text *I*

: Criterial number of words appearing in text *std N*

: Criterial kinds of words appearing in text *std I*

The values extracted from the media information text on the first day following the earthquake are used as the criterion of word numbers appearing and the criterion of word type appearing in the text. Next, the confidence value for each word is calculated by using formula (2). If the support and confidence values are over fixed thresholds, the word is added to the frequently appearing word list.

$$\mathcal{L} = P(Y \mid X) \tag{2}$$

As the next step, two words in the frequently appearing word list are combined. The support and confidence values for the combined words are calculated, and the words having the values over the thresholds are also added to the frequently appearing word list. The combination of words in the frequently appearing word list is repeated until the combined words satisfying the thresholds are exhausted.

If a combined word consisting of multiple words appears only one time in the text, the combined word is not added to the frequently appearing word list. Moreover, if the support value for a word that is a subset of a combined word equals the support value for the combined word, the subset word is removed from the frequently appearing word list. These operations are performed eliminate the redundancy of words appearing in the list as single and combined words.

#### **5.4 Calculation of the value** *of χ<sup>2</sup>*

The important words in text are often used in conjunction with some particular words. Namely, co-occurrence of words likely becomes an index representing the importance of words in the text. Thus, we analyze the co-occurrence of words in the text in order to grasp the emphasized content in the whole of the media information (Matsuo & Ishizuka, 2002).

A co-occurrence matrix is created from the words in the frequently appearing word list created by association rule mining. The expectation for the frequency of each word in the

words are extracted by association rule mining in this step. We employ an Apriori algorithm, which is the association rule extraction algorithm proposed by Agawal (Honiden, 2005). In this algorithm, the user decides thresholds for support and confidence, and words

As the first step in extracting frequently appearing words, the support value is calculated for each word in the word appearance list. The support value represents the probability of occurrence for a word. We calculate the support value by using formula (1). In formula (1), the support value considers the number of words and the number of the word types in the text is calculated, as the probability of occurrence for word is sensitive to these numbers. In the first calculation step in formula (1), *X* equals *Y* because each word consists of one noun.

( ) *std*

*I N s PX Y*

The values extracted from the media information text on the first day following the earthquake are used as the criterion of word numbers appearing and the criterion of word type appearing in the text. Next, the confidence value for each word is calculated by using formula (2). If the support and confidence values are over fixed thresholds, the word is

As the next step, two words in the frequently appearing word list are combined. The support and confidence values for the combined words are calculated, and the words having the values over the thresholds are also added to the frequently appearing word list. The combination of words in the frequently appearing word list is repeated until the

If a combined word consisting of multiple words appears only one time in the text, the combined word is not added to the frequently appearing word list. Moreover, if the support value for a word that is a subset of a combined word equals the support value for the combined word, the subset word is removed from the frequently appearing word list. These operations are performed eliminate the redundancy of words appearing in the list as single

The important words in text are often used in conjunction with some particular words. Namely, co-occurrence of words likely becomes an index representing the importance of words in the text. Thus, we analyze the co-occurrence of words in the text in order to grasp the emphasized content in the whole of the media information (Matsuo & Ishizuka, 2002). A co-occurrence matrix is created from the words in the frequently appearing word list created by association rule mining. The expectation for the frequency of each word in the

*std*

(1)

*c PY X* (| ) (2)

*N I*

having values over the thresholds are extracted.

: Number of words appearing in text : Kinds of words appearing in text

*std std*

*N I N I*

: Criterial number of words appearing in text : Criterial kinds of words appearing in text

added to the frequently appearing word list.

and combined words.

**5.4 Calculation of the value** *of χ<sup>2</sup>*

combined words satisfying the thresholds are exhausted.

frequently appearing word list is calculated. The value of *χ<sup>2</sup>* is calculated using formula (3), based on the expectation and co-occurrence frequency of the words. If a word co-occurs with a particular word, a relationship between ancillary words likely exists among these words. Thus, a value of *χ2'* is employed that ignores the ancillary relationship. The value of *χ2'* is calculated by a formula (4). The important word list is created using *χ2'* value.

$$\chi^2(i) = \sum\_{\mathbf{w} \in W} \frac{(freq(i, \mathbf{w}) - n\_i p\_w)^2}{n\_i p\_w} \tag{3}$$

$$\chi^2(i)' = \chi^2(i) - \max\_{\text{w} \in W} \left\{ \frac{(freq(i, \text{w}) - n\_i p\_w)^2}{n\_i p\_w} \right\} \tag{4}$$

( , ) : Co-occurrence frequency of word i and w W *freq i w* 

: Total number of co-occurrence between word i and set of frequently appearing word w *i n*

: Occurrence probability of frequently appearing word *w p*

#### **5.5 Kendall's rank correlation coefficient**

Media information is collected daily. Thus, a frequently appearing word list and an important word list are created for each day. Kendall's rank correlation coefficients between the frequently appearing word lists and the important word lists are calculated using formula (5). Kendall's rank correlation coefficient for the frequently appearing word lists indicates the recapitulative similarity of media information and for the important word lists indicates the similarity of content emphasized in the media, respectively.

$$R = \frac{\sum P\_{ij} - \sum Q\_{ij}}{\sqrt{\frac{n(n-1)}{2} - T\_x} \sqrt{\frac{n(n-1)}{2} - T\_y}} \tag{5}$$

$$T\_x = \sum\_{i=1}^{n\_x} \frac{t\_i(t\_i - \mathbf{l})}{2} \tag{6}$$

$$T\_y = \sum\_{j=1}^{n\_y} \frac{t\_j(t\_j - 1)}{2} \tag{7}$$


In the calculation of similarity in the media information, both of the similarities of the recapitulative content and the emphasized content can be considered by using two rank correlation coefficients between the frequently appearing word lists and the important word lists. The similarity between media information is calculated using formula (8).

$$Sim(i,j) = \sqrt{R\_{freq}(i,j)^2} \times (1 + \sqrt{R\_{imp}(i,j)^2} \tag{8}$$

Reputational Damage to Tourism Industry from

results of content classification represented in Fig. 5.

Fig. 8. Trends in media information from web news

Earthquakes – Impact and Analysis of Mass Media Information 333

extracted until the 14th day following the earthquake and then words related to the withdrawal of self-defense forces and other events were extracted from the 14th day and beyond. Moreover, the results obtained by the proposed method corresponded with the

For the Niigata Earthquake, a large decrease in similarity to the media information of the previous day was observed on the 36th day after the earthquake. The similarity to the media information of all previous days decreased on 38th day after the earthquake. We also investigated the frequently appearing word lists and the important word lists in order to strictly check the cause of the decrease. Words relating to the closure of an evacuation center were extracted on 35th day and words relating to criminal activity connected to the earthquake were mainly extracted on 36th day. It is likely that the decrease of similarity to the media information of the previous day resulted because of this difference. Moreover, the trend in words in each list changed from 37th day. However, the words extracted from media information on 37th day after earthquake

( , ) : Similarity between media information of day i and media information of day j ( , ) : Rank correlation coefficient between thefrequently appearing word lists of day i and day j ( , ) : Rank *freq imp Sim i j R ij R ij* correlation coefficient between theimportant word lists of day i and day j

We use the absolute value of the rank correlation coefficient to calculate the similarity between media information. A negative correlation coefficient between lists means that the recapitulative contents of media information are the same and just the quantity of each topic in the media information is different. Therefore, the absolute value is used because it is clear that there is similarity between media information in this case.

The similarity between media information for a given day *i* and the previous day *i-1* is calculated by using the formula (8). In addition, the similarity between media information on a given day *i* and all previous days, (i.e., all days from day *0* to day *i-1)* is calculated and then the average value of these is calculated. The trends in media information are obtained on the basis of the time series analysis of these similarities.

#### **5.6 Experimental method and results**

In this experiment, we used the media information from web news about the Noto and Niigata Chuetsu earthquakes that were used in the previous analysis in order to confirm the validity of our proposed method. The reason why the media information from web news was employed is that it is easy to obtain the media information as digital data. The thresholds of support and confidence in the association rule mining were 0.7 and 0.015. These thresholds were determined by a heuristic method. Moreover, the top 20 words in the frequently appearing word list and the important word list were used to calculate Kendall's rank correlation coefficient.

The result of the media information analysis for each earthquake is shown in Fig. 8. In Fig. 8, if the similarity of media information between each given day and all past days and the similarity of media information between each given day and the previous day are continuously low, the mass media sent information of varying content each day that was different from past trends. Namely, a situation where the two similarity scores are continuously low indicates the turning period when the trend of media information changes.

In the results for the Noto Earthquake, the similarities to media information on all previous days and to of the immediately previous day both decreased on the 14th day after the earthquake. A decrease in similarity was also observed on 43th day after the earthquake. However, the decline on the 43th day was caused by a decrease in the amount of information. We investigated the words in the frequently appearing word lists and the important word lists in order to clarify the cause of decrease in similarity. From this investigation, we found that the words relating to earthquake damage and aftershocks were

In the calculation of similarity in the media information, both of the similarities of the recapitulative content and the emphasized content can be considered by using two rank correlation coefficients between the frequently appearing word lists and the important word

( , ) : Rank correlation coefficient between thefrequently appearing word lists of day i and day j

We use the absolute value of the rank correlation coefficient to calculate the similarity between media information. A negative correlation coefficient between lists means that the recapitulative contents of media information are the same and just the quantity of each topic in the media information is different. Therefore, the absolute value is used because it is clear

The similarity between media information for a given day *i* and the previous day *i-1* is calculated by using the formula (8). In addition, the similarity between media information on a given day *i* and all previous days, (i.e., all days from day *0* to day *i-1)* is calculated and then the average value of these is calculated. The trends in media information are obtained

In this experiment, we used the media information from web news about the Noto and Niigata Chuetsu earthquakes that were used in the previous analysis in order to confirm the validity of our proposed method. The reason why the media information from web news was employed is that it is easy to obtain the media information as digital data. The thresholds of support and confidence in the association rule mining were 0.7 and 0.015. These thresholds were determined by a heuristic method. Moreover, the top 20 words in the frequently appearing word list and the important word list were used to calculate Kendall's

The result of the media information analysis for each earthquake is shown in Fig. 8. In Fig. 8, if the similarity of media information between each given day and all past days and the similarity of media information between each given day and the previous day are continuously low, the mass media sent information of varying content each day that was different from past trends. Namely, a situation where the two similarity scores are continuously low indicates the turning period when the trend of media information changes. In the results for the Noto Earthquake, the similarities to media information on all previous days and to of the immediately previous day both decreased on the 14th day after the earthquake. A decrease in similarity was also observed on 43th day after the earthquake. However, the decline on the 43th day was caused by a decrease in the amount of information. We investigated the words in the frequently appearing word lists and the important word lists in order to clarify the cause of decrease in similarity. From this investigation, we found that the words relating to earthquake damage and aftershocks were

2 2 ( , ) ( , ) (1 ( , ) *freq imp Sim i j R i j R i j* (8)

lists. The similarity between media information is calculated using formula (8).

( , ) : Similarity between media information of day i and media information of day j

*R ij* correlation coefficient between theimportant word lists of day i and day j

that there is similarity between media information in this case.

on the basis of the time series analysis of these similarities.

**5.6 Experimental method and results** 

rank correlation coefficient.

( , ) : Rank

*freq imp*

*Sim i j R ij* extracted until the 14th day following the earthquake and then words related to the withdrawal of self-defense forces and other events were extracted from the 14th day and beyond. Moreover, the results obtained by the proposed method corresponded with the results of content classification represented in Fig. 5.

Fig. 8. Trends in media information from web news

For the Niigata Earthquake, a large decrease in similarity to the media information of the previous day was observed on the 36th day after the earthquake. The similarity to the media information of all previous days decreased on 38th day after the earthquake. We also investigated the frequently appearing word lists and the important word lists in order to strictly check the cause of the decrease. Words relating to the closure of an evacuation center were extracted on 35th day and words relating to criminal activity connected to the earthquake were mainly extracted on 36th day. It is likely that the decrease of similarity to the media information of the previous day resulted because of this difference. Moreover, the trend in words in each list changed from 37th day. However, the words extracted from media information on 37th day after earthquake

Reputational Damage to Tourism Industry from

hit counts in search engine.

values as shown in formula (9).

important word list contain multiple words.

*j k j*

q

*m n*, : Length of list

*p*

*SO F SO I freq*

1 m

*p*

*k n*

*freq* 

*imp*

q 1

Earthquakes – Impact and Analysis of Mass Media Information 335

engine in PMI-IR. Thus, we investigated whether words having positive meanings or words having negative meaning were used together frequently with the words on the frequently appearing word list and the important word list on the basis of the number of

First, a key phrase for the search engine is created. The key phrase consists of a word from the frequently appearing word list or the important word list along with words from the list of words having a modifying relationship extracted by Japanese dependency parsing and the index of words having positive connotations. Information retrieval was conducted using a search engine. The key phrase was entered into the search engine and the number of hit counts was determined. Similarly, the number of hit counts for the key phrase was also determined with an index of words having negative connotations substituted in place of the positive word index. Moreover, the hit counts for the positive and negative index words were investigated, respectively. SO value for the key phrase was calculated by using four

> (" " " ") (" ") ( ) log (" " " ") (" ") *hits Ph Near GW hits BW SO ph hits Ph Near BW hits GW*

In the formula (9), *ph* represents a key phrase consisting of a word in the frequently appearing word list or the important word list and the words having a modifying relationship. Further, *hits("Ph" Near "GW" or "BW")* indicates the hit count from information retrieval using the key phrase, the index word and the NEAR operator. Multiple SO values were calculated for each word in the frequently appearing word list and the important word list because they were present in multiple sentences along with different modifying words. The average SO value is used each word. In addition, the impression level of media information was calculated using formula (10). The impression level of media information is calculated using multiple SO values because the frequently appearing word list and the

1 1

: Sum of support values for all frequently appearing words in word list

\_ : SO value for the jth word in the frequently appearing word list

: Support value for the jth word in the frequently appearing word l

: Importance value for the kth word in the important word list

words in word list

\_ : SO value for the kth word in the important word list

imp : Sum of important values for all important

\_ \_ *n m <sup>j</sup> <sup>k</sup> j k n m j k p q*

*freq imp*

*freq imp IMG SO F SO I*

1 1

ist

(10)

*p q*

(9)

2

partly agreed with the words extracted from media information immediately after the earthquake. For this reason, the large decrease in the similarity to the media information of all previous days was not observed on the 37th day and then emerged on the 38th day. In the results of the media content classification described in Fig. 5, the ratio of POSITIVE articles in the media started increasing from the 33rd day after the earthquake. The result obtained by the proposed method roughly agreed with the classification results of the human analysis of media information.

From these results, it was found that the change in media information could be properly obtained by the proposed method. Therefore, it is likely that effective measures to counter reputational damage could be performed based on the conditions and trends in media information by using our proposed method.

#### **5.7 Discussion**

From the experimental results described above, it was revealed that our proposed method could quantify the transition in media content and then could grasp changes in the trends in media information. In this method, media information such as damage reports was assumed to be widely disseminated immediately after the occurrence of earthquake and then that media information gradually shifts over time to other content such as recovery progress. Namely, a situation where the similarity in media information is low compared to immediately after the earthquake means that the content has shifted, which can lessen the feelings of avoidance toward neighboring tourist area near the disaster zone. However, there is the possibility that media information changes to even worse content, which would further promote the feelings of avoidance toward the neighboring tourist areas. However, it is difficult to judge using our proposed method how changes in media content affect feelings of avoidance toward neighboring tourist areas. A function must be implemented that can analyze whether the contents promote a positive or negative impression of neighboring tourist areas.

In our research, we attempted to add a function to the proposed method that can analyze the impression of media information on the public. In order to judge the impression of media information, we analyzed which frequently appearing words and important words are used in the text to get the connotation of the media information. Namely, the connotation of words was analyzed. Here, we applied dependency parsing software to sentences containing frequently appearing words and important words and then extracted the grammatical relationships. Specifically, nouns, verbs, adjectives, adverbs and conjunctions in the segments including the frequently appearing words or important words were extracted to specify how the words were used in the text. We employed CABOCHA, which is Japanese dependency structure analysis software based on support vector machines, to perform dependency parsing (Kudo & Matsumoto, 2002).

After Japanese dependency parsing, the direction of the meanings for each word was quantified by PMI-IR, which calculates the strength of emotional polar value (Tunney, 2001; Kaji & Kitsuregawa, 2007). Words representing positive things are often used together with other words that have positive meanings. In contrast, words representing negative things are often used together with other words that have negative meanings. The connotation of word was analyzed on the basis of information retrieval using a search

partly agreed with the words extracted from media information immediately after the earthquake. For this reason, the large decrease in the similarity to the media information of all previous days was not observed on the 37th day and then emerged on the 38th day. In the results of the media content classification described in Fig. 5, the ratio of POSITIVE articles in the media started increasing from the 33rd day after the earthquake. The result obtained by the proposed method roughly agreed with the classification results of the

From these results, it was found that the change in media information could be properly obtained by the proposed method. Therefore, it is likely that effective measures to counter reputational damage could be performed based on the conditions and trends in media

From the experimental results described above, it was revealed that our proposed method could quantify the transition in media content and then could grasp changes in the trends in media information. In this method, media information such as damage reports was assumed to be widely disseminated immediately after the occurrence of earthquake and then that media information gradually shifts over time to other content such as recovery progress. Namely, a situation where the similarity in media information is low compared to immediately after the earthquake means that the content has shifted, which can lessen the feelings of avoidance toward neighboring tourist area near the disaster zone. However, there is the possibility that media information changes to even worse content, which would further promote the feelings of avoidance toward the neighboring tourist areas. However, it is difficult to judge using our proposed method how changes in media content affect feelings of avoidance toward neighboring tourist areas. A function must be implemented that can analyze whether the contents promote a positive or negative

In our research, we attempted to add a function to the proposed method that can analyze the impression of media information on the public. In order to judge the impression of media information, we analyzed which frequently appearing words and important words are used in the text to get the connotation of the media information. Namely, the connotation of words was analyzed. Here, we applied dependency parsing software to sentences containing frequently appearing words and important words and then extracted the grammatical relationships. Specifically, nouns, verbs, adjectives, adverbs and conjunctions in the segments including the frequently appearing words or important words were extracted to specify how the words were used in the text. We employed CABOCHA, which is Japanese dependency structure analysis software based on support vector

After Japanese dependency parsing, the direction of the meanings for each word was quantified by PMI-IR, which calculates the strength of emotional polar value (Tunney, 2001; Kaji & Kitsuregawa, 2007). Words representing positive things are often used together with other words that have positive meanings. In contrast, words representing negative things are often used together with other words that have negative meanings. The connotation of word was analyzed on the basis of information retrieval using a search

machines, to perform dependency parsing (Kudo & Matsumoto, 2002).

human analysis of media information.

information by using our proposed method.

impression of neighboring tourist areas.

**5.7 Discussion** 

engine in PMI-IR. Thus, we investigated whether words having positive meanings or words having negative meaning were used together frequently with the words on the frequently appearing word list and the important word list on the basis of the number of hit counts in search engine.

First, a key phrase for the search engine is created. The key phrase consists of a word from the frequently appearing word list or the important word list along with words from the list of words having a modifying relationship extracted by Japanese dependency parsing and the index of words having positive connotations. Information retrieval was conducted using a search engine. The key phrase was entered into the search engine and the number of hit counts was determined. Similarly, the number of hit counts for the key phrase was also determined with an index of words having negative connotations substituted in place of the positive word index. Moreover, the hit counts for the positive and negative index words were investigated, respectively. SO value for the key phrase was calculated by using four values as shown in formula (9).

$$ISO(ph) = \log\_2\left(\frac{hits("Ph"{Naar}""GW") \times hits("BW")}{hits("Ph"{Naar}""BW") \times hits("GW")}\right) \tag{9}$$

In the formula (9), *ph* represents a key phrase consisting of a word in the frequently appearing word list or the important word list and the words having a modifying relationship. Further, *hits("Ph" Near "GW" or "BW")* indicates the hit count from information retrieval using the key phrase, the index word and the NEAR operator. Multiple SO values were calculated for each word in the frequently appearing word list and the important word list because they were present in multiple sentences along with different modifying words. The average SO value is used each word. In addition, the impression level of media information was calculated using formula (10). The impression level of media information is calculated using multiple SO values because the frequently appearing word list and the important word list contain multiple words.

$$IMG = \sum\_{j=1}^{n} \left( SO\\_F\_j \times \frac{freq\_j}{\sum\_{p=1}^{n} freq\_p} \right) \times \sum\_{k=1}^{m} \left( SO\\_I\_k \times \frac{imp\_k}{\sum\_{q=1}^{m} imp\_q} \right) \tag{10}$$

\_ : SO value for the jth word in the frequently appearing word list \_ : SO value for the kth word in the important word list : Support value for the jth word in the frequently appearing word l *j k j SO F SO I freq* ist : Importance value for the kth word in the important word list : Sum of support values for all frequently appearing words in word list *k n p imp freq* 

1 m q q 1 imp : Sum of important values for all important *p* words in word list *m n*, : Length of list

Reputational Damage to Tourism Industry from

2 weeks in early cases and 4 weeks in late cases.

similarity to media information immediately after earthquake.

media information using the proposed method.

that is capable of rating each analyzed word appropriately.

Earthquakes – Impact and Analysis of Mass Media Information 337

The analysis found that the amount of media information was highest immediately after the occurrence of earthquake and that the amount of media information gradually decreased over time, depending on the nature of the damage and the scale of earthquake. Moreover, in terms of the content of media information, negative information promotes feelings of avoidance in the public towards visiting neighboring tourist areas for sightseeing was sent immediately after the earthquake. Over time, the media content gradually shifted towards positive information, which eases the feelings of avoidance. The analysis of media information in newspapers showed that the turning point in media information from negative to positive was 4 weeks from the date of the earthquake in early cases, from which point the amount of media information and its content is suitable for starting measures to counteract reputational damage in surrounding areas. In late cases, the turning point was 6 weeks after the earthquake. On the other hand, the analysis results of web news revealed that turning point in media information was as soon as

The analysis indicated that content analysis of media information was more important when considering when to begin measures to counter reputational damage. However, content analysis has higher cost in comparison with the analysis of amount of media information. Content analysis is difficult to perform manually because the amount of media information is large and analysis must be performed rapidly in order to be effective when planning measures to reduce reputational damage. We proposed an analysis method to realize an automated content analysis of media information. In the proposed method, media information was analyzed on the basis of its characteristics following an earthquake. Media information that has a negative impact on neighboring tourist areas is immediately sent to the public after an earthquake and the content of media information gradually becomes more positive over time. In the analysis, media information was analyzed by comparing the

Moreover, we used the proposed method to analyze media information on the 2007 Niigata Chuetsu Earthquake and the 2007 Noto Earthquake in order to confirm the adequacy of the proposed method. From the experimental results, it was revealed that the similarity between media information immediately after an earthquake was high and that the similarity was then reduced gradually over time. This change indicates that the proposed method could grasp how media information changed over time and how media content promoted or eased feelings of avoidance toward neighboring tourist resorts. Therefore, measures to counter reputational damage could be developed based on the conditions and trends in

However, it was difficult to judge the effect of media content on causing and easing feelings of avoidance in the public. Therefore, we discussed a function that analyzes the impression of media information using Japanese dependency parsing and PMI-IR. From the experimental results, the impression of media information was found to become gradually more positive, although the function's results were different from the results of media information classified by a human. The reason for this difference was likely the lack of flexibility in the selection of index words used to investigate the polar direction of the meaning of a word. Our future work will be to implement dynamic index word selection

We applied the impression analysis to the media information from web news for the Niigata Chuetsu Earthquake. We used Google as the search engine for the impression analysis. Combinations of words having positive or negative connotations were used as index words, such as words that could be considered "good" and "bad" and having to do with "relief" and "fear". The impression values (IMG) were calculated for these combinations, and then the average value was used as the impression level for media information.

Fig. 9. Results of impression analysis of media information

Figure 9 shows the results of the impression analysis. From the experimental result, it was revealed that the impression level of media information had negative values on each day following the earthquake. Immediately after an earthquake, the media information gives a negative impression to people. Therefore, the values for all days are likely to be negative. However, a pattern approximating a curve can be seen in Fig. 9, as a slightly positive increase in the impression level was observed. Namely, the impression level from media information is assumed to indicate a gradual recovery trend. However, these results using the search engine did not completely correspond to the analysis results from media information categorized by humans. In this experiment, as described above we employed two combinations of words, positive and negative, as index words (i.e., "good" and "bad", "relief" and "fear"). It is likely that the appropriate index word for each frequently appearing word and important word are different because the media can use words in various contexts in media information. Therefore, improvement is needed in the impression analysis function to be able to dynamically change index words depending on the word used when investigating the impression. Improving the impression analysis function will be one of our goals in future work.

#### **6. Conclusion**

In this chapter, we discussed the causes of reputational damage in neighboring tourist areas near earthquake disaster zones. In addition, we analyzed the conditions and trends in media information in actual situations where tourism areas incurred reputational damage during earthquake disasters.

We applied the impression analysis to the media information from web news for the Niigata Chuetsu Earthquake. We used Google as the search engine for the impression analysis. Combinations of words having positive or negative connotations were used as index words, such as words that could be considered "good" and "bad" and having to do with "relief" and "fear". The impression values (IMG) were calculated for these combinations, and then the

Figure 9 shows the results of the impression analysis. From the experimental result, it was revealed that the impression level of media information had negative values on each day following the earthquake. Immediately after an earthquake, the media information gives a negative impression to people. Therefore, the values for all days are likely to be negative. However, a pattern approximating a curve can be seen in Fig. 9, as a slightly positive increase in the impression level was observed. Namely, the impression level from media information is assumed to indicate a gradual recovery trend. However, these results using the search engine did not completely correspond to the analysis results from media information categorized by humans. In this experiment, as described above we employed two combinations of words, positive and negative, as index words (i.e., "good" and "bad", "relief" and "fear"). It is likely that the appropriate index word for each frequently appearing word and important word are different because the media can use words in various contexts in media information. Therefore, improvement is needed in the impression analysis function to be able to dynamically change index words depending on the word used when investigating the impression. Improving the impression analysis

In this chapter, we discussed the causes of reputational damage in neighboring tourist areas near earthquake disaster zones. In addition, we analyzed the conditions and trends in media information in actual situations where tourism areas incurred reputational damage during

average value was used as the impression level for media information.

Fig. 9. Results of impression analysis of media information

function will be one of our goals in future work.

**6. Conclusion** 

earthquake disasters.

The analysis found that the amount of media information was highest immediately after the occurrence of earthquake and that the amount of media information gradually decreased over time, depending on the nature of the damage and the scale of earthquake. Moreover, in terms of the content of media information, negative information promotes feelings of avoidance in the public towards visiting neighboring tourist areas for sightseeing was sent immediately after the earthquake. Over time, the media content gradually shifted towards positive information, which eases the feelings of avoidance. The analysis of media information in newspapers showed that the turning point in media information from negative to positive was 4 weeks from the date of the earthquake in early cases, from which point the amount of media information and its content is suitable for starting measures to counteract reputational damage in surrounding areas. In late cases, the turning point was 6 weeks after the earthquake. On the other hand, the analysis results of web news revealed that turning point in media information was as soon as 2 weeks in early cases and 4 weeks in late cases.

The analysis indicated that content analysis of media information was more important when considering when to begin measures to counter reputational damage. However, content analysis has higher cost in comparison with the analysis of amount of media information. Content analysis is difficult to perform manually because the amount of media information is large and analysis must be performed rapidly in order to be effective when planning measures to reduce reputational damage. We proposed an analysis method to realize an automated content analysis of media information. In the proposed method, media information was analyzed on the basis of its characteristics following an earthquake. Media information that has a negative impact on neighboring tourist areas is immediately sent to the public after an earthquake and the content of media information gradually becomes more positive over time. In the analysis, media information was analyzed by comparing the similarity to media information immediately after earthquake.

Moreover, we used the proposed method to analyze media information on the 2007 Niigata Chuetsu Earthquake and the 2007 Noto Earthquake in order to confirm the adequacy of the proposed method. From the experimental results, it was revealed that the similarity between media information immediately after an earthquake was high and that the similarity was then reduced gradually over time. This change indicates that the proposed method could grasp how media information changed over time and how media content promoted or eased feelings of avoidance toward neighboring tourist resorts. Therefore, measures to counter reputational damage could be developed based on the conditions and trends in media information using the proposed method.

However, it was difficult to judge the effect of media content on causing and easing feelings of avoidance in the public. Therefore, we discussed a function that analyzes the impression of media information using Japanese dependency parsing and PMI-IR. From the experimental results, the impression of media information was found to become gradually more positive, although the function's results were different from the results of media information classified by a human. The reason for this difference was likely the lack of flexibility in the selection of index words used to investigate the polar direction of the meaning of a word. Our future work will be to implement dynamic index word selection that is capable of rating each analyzed word appropriately.

**17** 

*Portugal* 

**The Tourist Potential of the** 

**Minho-Lima Region (Portugal)** 

José Cadima Ribeiro1 and Laurentina Cruz Vareiro2 *1School of Economics and Management, University of Minho 2School of Management, Polytechnic Institute of Cávado and Ave* 

It is generally recognised that tourism plays an important role in the economic development of some territories, providing long-term benefits to local economies, primarily when implemented on a sustainable base. The capacity of tourism to establish synergies with other services, such as lodging, food, transport and entertainment for tourists, makes it a

In many developed countries and in many developing ones too, tourism is now a strategic activity. This is the case in Portugal, where tourism has been managed as a strategic cluster by the government since the implementation of the *Economic and Social Development Plan for 2000/2006*. In this document, tourism was officially claimed to be one of the activities pivotal

Tourism, as a socioeconomic activity, does not occur randomly and its success differs from region to region, destination to destination or site to site, depending on the real potential for

To evaluate tourism potential or destination attractiveness, researchers have devised assessment tools from a supply side and/or a demand side perspective (Cha & Uysal, 1995; Ferrario 1979; Formica & Uysal, 2006; Gunn, 1988; Kusen & Tadej, 2003; Leno Cerro, 1992; Smith, 1987; Var et al., 1977). The object of analysis in the supply side perspective is the number and quality of available tourism attractions at a given destination. In the demand side perspective, it is tourists' perceptions and interests in a territory that constitute the centre of the analysis.In some cases, researchers have focused on a single aspect of region

In the case of the Minho-Lima region, an important tourism potential exists in the variety and singularity of the region's resources - the beauty of its landscapes, the architectonic wealth of

Assuming an analysis of the available tourism resources is crucial to defining the tourism vocation of a territory, and, above all, to select the best tourism alternative within the range of available possibilities (Formica & Uysal, 2006; Leno-Cerro, 1993; López-Ochoa & Lufin-

its secular buildings, and the exuberance of its gastronomy and many cultural events**.** 

to achieving economic and social development of the country and its regions.

destination attractiveness (Ritchie & Zins 1978; Sheng & Lo, 2010).

**1. Introduction** 

structuring industry in many economies.

attracting tourists (Formica & Uysal, 2006).

#### **7. References**


### **The Tourist Potential of the Minho-Lima Region (Portugal)**

José Cadima Ribeiro1 and Laurentina Cruz Vareiro2 *1School of Economics and Management, University of Minho 2School of Management, Polytechnic Institute of Cávado and Ave Portugal* 

#### **1. Introduction**

338 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Sekiya, N. (2003). Social Psychology of "Image Contamination" – The Fact of "Image

Sano, H., Yasujima, H., Murakami, K. & Nakamori, T. (2007). Stigmanization in Tourism by

Todoroki, N., Takayama, J. & Nakayama, S. (2009). The structural analysis about the damage

Takano, Y. & Meguro. K. (2010). A Study on the Decrease in Travel and Tourism to Affected

Nagao, M., Kishino, H. & Ohuchi A. (2006). Approach of Echigo-yuzawa on the Mid-Niigata

Echigo-yuzawa-. *Journal of Society for Tourism Informatics*, Vol.2, No.1, 30-40 Nagao, M., Suto, K. & Ohuchi A. (2010). A media information analysis for implementing

Suto, K., Nagao, M. & Ohuchi, A. (2009). A Study of Measure Method against Harmful

Nagao, M. & Ohuchi, A. (2011). Transition and Countermeasure Analysis for Harmful

Kudo, T. (August 2011). MeCab Yet Another Part-of-Speed and Morphological Analyzer,

Honiden, S.(eds.) (2005). Artificial Intelligence, Ohmusha Co. Ltd., ISBN-13: 978-4274201066 Matsuo, Y. & Ishizuka, M. (2002). Keyword Extraction from a Document using Word Co-

Kudo, T. & Matsumoto, Y. (2002). Japanese Dependency Analysis Using Cascaded

Tuney, D. P., (2002). Thumbs Up or Thumbs Down? Semantic Orientation Applied to

Kaji, N. & Kitsuregawa, M. (2007). Building Lexicon for Sentiment Analysis from

*Association for Computational Linguistics (ACL'02)*, 417-424

*Series*, http://iopscience.iop.org/1742-6596/221/1/012004

*Society for Tourism Informatics*, Vol. 5, No.1, 33-44

Contamination" and its Mechanism, *Journal of Japan Society for Disaster Information* 

the Noto Hanto Earthquake in 2007, *Proceedings of 22th National Conference of Japan* 

by rumors opinion poll to tourist, *Proceedings of 39th National Conference of Committee* 

Regions after Natural Disasters, *Annuals of Institute of Industrial Science, University of* 

Earthquake Rumor Damage -Development of General Rules from the Case in

effective countermeasure against harmful rumor, *Journal of Physics: Conference* 

Rumor based on Comparison Analysis of Information related to Disaster, *Journal of* 

Rumor in Sight-Seeing Area, *Journal of The Japanese Society for Artificial Intelligence*,

occurrence Statistical Information, *Journal of The Japanese Society for Artificial* 

Chunking, Journal of Information Processing Society of Japan, Vol.43, No.6, 1834-

Unsupervised Classification of Reviews, *Proceedings of the 40th Annual Meeting of the* 

Automatically Constructed Polar Sentence Corpus, *Letters of The Database Society of* 

**7. References** 

*Studies, No.1*: 78-89

*Institute of Tourism Research*, 347-348

*Tokyo*, Vol.62, No.4, 421-423

Vol. 26, No.3, 264-271

1842

http://mecab.sourceforge.net/

*Intelligence*, Vol.17, No.3, 217-223

*Japan*, Vol.6, No.1, 45-48

*of Infrastructure Planning and Management*, 39-42

It is generally recognised that tourism plays an important role in the economic development of some territories, providing long-term benefits to local economies, primarily when implemented on a sustainable base. The capacity of tourism to establish synergies with other services, such as lodging, food, transport and entertainment for tourists, makes it a structuring industry in many economies.

In many developed countries and in many developing ones too, tourism is now a strategic activity. This is the case in Portugal, where tourism has been managed as a strategic cluster by the government since the implementation of the *Economic and Social Development Plan for 2000/2006*. In this document, tourism was officially claimed to be one of the activities pivotal to achieving economic and social development of the country and its regions.

Tourism, as a socioeconomic activity, does not occur randomly and its success differs from region to region, destination to destination or site to site, depending on the real potential for attracting tourists (Formica & Uysal, 2006).

To evaluate tourism potential or destination attractiveness, researchers have devised assessment tools from a supply side and/or a demand side perspective (Cha & Uysal, 1995; Ferrario 1979; Formica & Uysal, 2006; Gunn, 1988; Kusen & Tadej, 2003; Leno Cerro, 1992; Smith, 1987; Var et al., 1977). The object of analysis in the supply side perspective is the number and quality of available tourism attractions at a given destination. In the demand side perspective, it is tourists' perceptions and interests in a territory that constitute the centre of the analysis.In some cases, researchers have focused on a single aspect of region destination attractiveness (Ritchie & Zins 1978; Sheng & Lo, 2010).

In the case of the Minho-Lima region, an important tourism potential exists in the variety and singularity of the region's resources - the beauty of its landscapes, the architectonic wealth of its secular buildings, and the exuberance of its gastronomy and many cultural events**.** 

Assuming an analysis of the available tourism resources is crucial to defining the tourism vocation of a territory, and, above all, to select the best tourism alternative within the range of available possibilities (Formica & Uysal, 2006; Leno-Cerro, 1993; López-Ochoa & Lufin-

The Tourist Potential of the Minho-Lima Region (Portugal) 341

the set of resources available, and of their nature and level of conservation, as well as the

Even so, the attractiveness of a territory does not depend solely on this supply of resources and infrastructures but, mainly, on the relationship that can be established between the available resources or tourism attractions and the importance given to such attractions by

The evaluation of the tourism potential of all municipalities in the Minho-Lima region aims to establish indicators that can be useful for the private and public actors in planning decisions. Following the findings of the above mentioned authors, namely, that in order to analyze the real value of the tourism potential of a territory one cannot only measure the number of resources and attractions but, most importantly must also, measure their quality, as well as other features like accessibility and equipment endowment, researchers have investigated the use of different indexes to evaluate the potential of tourism destinations. Iatu & Bulai (2011), for example, put forward a general index comprised of the two components "network quality" and "service quality". One major problem of such a formula is the inherent difficulty of finding the values of those variables, in addition to the problem

For the purposes of this paper, we adopt the formula suggested by Leno-Cerro (1992 and 1993) to calculate the Tourist Value Index or Tourism Potential of a certain territory, which

**IPTi = αFri + βFai + δFei** 

Fr, Fa, Fe = values of the "resources", "accessibilities" and "equipments" of the municipality

The weighting factors attributed to each one of the elements in the elaboration of the model are justified by the fact that not all of them have equal importance in the calculation of the

From the tourist point of view, not all the inventoried resources have the same value. This value depends on the nature of the resource (natural, historical, ethnographic) and on its characteristics relating to singularity, availability, etc. Therefore, as discussed above, in order to establish the attractiveness of a place, it is not enough to count the number of resources available. The individual importance of each one and the way it meets the needs

With this aim, we selected the methodology for evaluation of resources suggested by Leno-Cerro (1992 and 1993). This author believes that the tourist value of a particular resource should attend to its nature and singularity, in agreement with the following equation:

of the visitors must also be considered; they must therefore be evaluated.

existence of supporting infrastructures.

of defining the attraction rating index, itself.

IPTi = Tourism Potential Index of the municipality "i".

tourists (Iatu & Bulai, 2011).

is as follows:

α, β, δ = weighting factors.

tourist value of a destination.

**3. Resources value** 

where,

"i".

Varas, 2010), this investigation aims to present a preliminary evaluation of the tourism resources of the Minho-Lima region, as well as an analysis of the complementary elements at this destination. In this particular analysis of tourism potential, we have adopted both the demand and the supply side perspective. In our evaluation of the resources in the region, we have incorporated the opinions of tourists (demand side) and those of the tourism agents (public and private) charged with the design of the territory's promotional materials (supply side), in order to establish a balanced vision of the tourism destination.

In this way, the evaluation of the tourism potential of all municipalities in Minho-Lima aims to establish indicators that can be useful for both private and public use in terms of planning decisions.

The article is organized as follows: in Section 1, we review the concept of tourism potential of a territory and put forward a possible general formula to pursue its evaluation; in Sections 2, 3 and 4, the partial components to use in the general formula, that is, the value of resources, accessibilities and equipment, respectively, are discussed and calculated; the tourism potential index is estimated in the last section, followed by a summary of our final conclusions.

#### **2. Tourism potential evaluation**

The tourism potential or the elements that configure a tourist destination depend, basically, on the amount and quality of the tourism resources, although other aspects such as accessibility or the equipments/infrastructures available also determine this potential (López-Ochoa & Lufin-Varas, 2010; Murphy, 1983; Ritchie & Crouch, 2005). In other words, to characterize a destination it is necessary to evaluate resources (Formica & Uysal, 2006; Gunn, 1988; Kusen & Tadej, 2003; Smith, 1987) as well as to analyze the geographical space that configures this territory, not just as a resource but also as a location factor for those activities (López-Ochoa & Lufin-Varas, 2010; Pardellas & Padín, 2001).

We are all well aware that the resources that attract tourists are limited in number, and vary in their features, distribution and degree of development. Consequently, increasing the tourism attractiveness of a territory implies careful planning of their use, taking into account their nature, diversity and location, and the profile of potential visitors. Empirical data show that tourism activities follow singular space location behaviour. As such, a general location theory can apply to these kinds of studies, but the specificity of particular tourism activities and related service sectors must be considered. In particular, one should account for the circumstance of the consumption of tourism products taking place in the locale where they are produced. This specificity implies, on the one hand, a direct and physical relation between tourism resources and the goods produced from them and, on the other hand, the displacement of tourists from their usual residence to satisfy that demand.

Establishing methods of classification and an inventory of the available resources constitutes a first step in the analysis of tourist potential, but the real value of the potential of a territory is not only measured by the number of attractions it possesses but also by their variety and quality. The use of evaluation techniques will establish a measure of the value of the resources available, and thus, provide support for the decisions taken in planning processes. As underlined by López-Ochoa & Lufin-Varas (2010), any attempt to improve the performance of a tourism industry in any regional context requires the strict identification of the set of resources available, and of their nature and level of conservation, as well as the existence of supporting infrastructures.

Even so, the attractiveness of a territory does not depend solely on this supply of resources and infrastructures but, mainly, on the relationship that can be established between the available resources or tourism attractions and the importance given to such attractions by tourists (Iatu & Bulai, 2011).

The evaluation of the tourism potential of all municipalities in the Minho-Lima region aims to establish indicators that can be useful for the private and public actors in planning decisions. Following the findings of the above mentioned authors, namely, that in order to analyze the real value of the tourism potential of a territory one cannot only measure the number of resources and attractions but, most importantly must also, measure their quality, as well as other features like accessibility and equipment endowment, researchers have investigated the use of different indexes to evaluate the potential of tourism destinations. Iatu & Bulai (2011), for example, put forward a general index comprised of the two components "network quality" and "service quality". One major problem of such a formula is the inherent difficulty of finding the values of those variables, in addition to the problem of defining the attraction rating index, itself.

For the purposes of this paper, we adopt the formula suggested by Leno-Cerro (1992 and 1993) to calculate the Tourist Value Index or Tourism Potential of a certain territory, which is as follows:

#### **IPTi = αFri + βFai + δFei**

where,

340 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Varas, 2010), this investigation aims to present a preliminary evaluation of the tourism resources of the Minho-Lima region, as well as an analysis of the complementary elements at this destination. In this particular analysis of tourism potential, we have adopted both the demand and the supply side perspective. In our evaluation of the resources in the region, we have incorporated the opinions of tourists (demand side) and those of the tourism agents (public and private) charged with the design of the territory's promotional materials (supply

In this way, the evaluation of the tourism potential of all municipalities in Minho-Lima aims to establish indicators that can be useful for both private and public use in terms of

The article is organized as follows: in Section 1, we review the concept of tourism potential of a territory and put forward a possible general formula to pursue its evaluation; in Sections 2, 3 and 4, the partial components to use in the general formula, that is, the value of resources, accessibilities and equipment, respectively, are discussed and calculated; the tourism potential

The tourism potential or the elements that configure a tourist destination depend, basically, on the amount and quality of the tourism resources, although other aspects such as accessibility or the equipments/infrastructures available also determine this potential (López-Ochoa & Lufin-Varas, 2010; Murphy, 1983; Ritchie & Crouch, 2005). In other words, to characterize a destination it is necessary to evaluate resources (Formica & Uysal, 2006; Gunn, 1988; Kusen & Tadej, 2003; Smith, 1987) as well as to analyze the geographical space that configures this territory, not just as a resource but also as a location factor for those

We are all well aware that the resources that attract tourists are limited in number, and vary in their features, distribution and degree of development. Consequently, increasing the tourism attractiveness of a territory implies careful planning of their use, taking into account their nature, diversity and location, and the profile of potential visitors. Empirical data show that tourism activities follow singular space location behaviour. As such, a general location theory can apply to these kinds of studies, but the specificity of particular tourism activities and related service sectors must be considered. In particular, one should account for the circumstance of the consumption of tourism products taking place in the locale where they are produced. This specificity implies, on the one hand, a direct and physical relation between tourism resources and the goods produced from them and, on the other hand, the

Establishing methods of classification and an inventory of the available resources constitutes a first step in the analysis of tourist potential, but the real value of the potential of a territory is not only measured by the number of attractions it possesses but also by their variety and quality. The use of evaluation techniques will establish a measure of the value of the resources available, and thus, provide support for the decisions taken in planning processes. As underlined by López-Ochoa & Lufin-Varas (2010), any attempt to improve the performance of a tourism industry in any regional context requires the strict identification of

index is estimated in the last section, followed by a summary of our final conclusions.

side), in order to establish a balanced vision of the tourism destination.

activities (López-Ochoa & Lufin-Varas, 2010; Pardellas & Padín, 2001).

displacement of tourists from their usual residence to satisfy that demand.

planning decisions.

**2. Tourism potential evaluation** 

IPTi = Tourism Potential Index of the municipality "i".

Fr, Fa, Fe = values of the "resources", "accessibilities" and "equipments" of the municipality "i".

α, β, δ = weighting factors.

The weighting factors attributed to each one of the elements in the elaboration of the model are justified by the fact that not all of them have equal importance in the calculation of the tourist value of a destination.

#### **3. Resources value**

From the tourist point of view, not all the inventoried resources have the same value. This value depends on the nature of the resource (natural, historical, ethnographic) and on its characteristics relating to singularity, availability, etc. Therefore, as discussed above, in order to establish the attractiveness of a place, it is not enough to count the number of resources available. The individual importance of each one and the way it meets the needs of the visitors must also be considered; they must therefore be evaluated.

With this aim, we selected the methodology for evaluation of resources suggested by Leno-Cerro (1992 and 1993). This author believes that the tourist value of a particular resource should attend to its nature and singularity, in agreement with the following equation:

The Tourist Potential of the Minho-Lima Region (Portugal) 343

**Historical Resources** 

**Hierarchy 1** 56 103 **86 245 24,43 Hierarchy 2** 79 314 **166 559 55,73 Hierarchy 3** 21 74 **25 120 11,96 Hierarchy 4** 15 49 **15 79 7,88 Total 171 540 292 1003 100** 

On the other hand, the evaluation of resources implies consideration of a factor that weights the nature of the resource1, given that the ranking does not indicate the tourist value of the resource, but its importance inside its own category. The weighting factor will allow the transformation of that hierarchy into an economic graduation. With this purpose, we made

This approach to the valuation of resources is similar to that followed by the body for the Spatial Planning of the National Territory Romania, in 2008, which adopted a method of applying points (scores) to both quantitative and qualitative data referring to the tourism and infrastructures resources (Iatu & Bulai, 2011). There is of course criticism of these evaluation methods but, as underlined by the before mentioned authors, every system or

Leno-Cerro's proposal (1993) is based on the empirical work done by authors such as Cinelli (1985), Ferrario (1980) and Var et al. (1977). In order to solve the problems arising from the space scope being different to those used in previous studies, Leno-Cerro conducted a

Following this initiative, we tried to obtain these weighting coefficients by questioning the tourists who visit Minho-Lima about their preferences regarding the type of tourism resources. From our analysis of their preferences2 it was possible to estimate the relative importance of tourism resources, by large categories/groups of resources (Table 2) which were then adjusted to a 5 points scale of values, to approximate the scale on which the

1 The establishment of weighting factors is made not for each resource but for major groups of resources, according to their nature, which, in our case, will correspond to the three categories inventoried.

2 This analysis can be found in Vareiro, L., Ribeiro, J. & Pardellas, X. (2009). Preferências dos turistas que visitam o Minho-Lima: Uma análise com base nas preferências declaradas. *Estudos Regionais*, Vol. 22 (3º

**Total % 17,05 53,84 29,11 100** 

use of two different methodologies, which are presented in the next sections.

questionnaire on the Spanish tourists' motivations (Leno-Cerro, 1992).

results are expressed in the supply side analysis (Table 3):

**Ethnographical** 

**Resources Total Total %** 

**Hierarchy/Category Natural** 

method will always raise debate.

**3.2 Demand-based coefficients** 

Quadrimestre): 35-46.

**Resources** 

Table 1. Resources by category and hierarchy, in Minho-Lima

#### **Vri= Jpi\*i**

where,

Vri= tourist value of resource "i" Jpi = primary hierarchy of the resource "i" i = weighting factor, attending to the nature of the resource "i"

Following this methodology, the tourist value of a resource will depend on the hierarchy that it occupies, derived from its importance and/or singularity, as well as on the weighting factor attributed to the category to which it belongs, according to its nature.

However, before progressing with an evaluation of the diverse resources, it is necessary to classify them in large groups. As a preliminary task, they must be classified within homogeneous groups.

Taking into consideration the proposals of Defert (1996), Padín (2004) and Vera (1997), we decided to classify the resources into 3 main categories: RN - natural resources; RH historical resources; and RE - ethnographical resources. Other classifications could be adopted, such as one that differentiates between natural and cultural resources (besides the infrastructural ones), as found in Iatu and Bulai (2011); or Murphy (1983), who advocate a basic distinction between their natural or cultural nature, complemented by the infrastructures and services supplied.

The methodology we follow in this paper allows a greater differentiation of cultural resources, separating those endowed with a more material component from those with a more immaterial component.

#### **3.1 Resources rankings**

An evaluation of resources implies establishing rankings. Those rankings are a function of the importance and singularity of each resource, which can be classified as being of international, national, regional or local interest. This involves, of course, the resources attractiveness to tourists, who are coming from diverse origins and distances (López-Ochoa & Lufin-Varas; 2010).

To approach these hierarchies of resources, we considered the various references we were able to find to them in electronic supports and in published paper materials (that is, brochures, tourist guides, itineraries, etc.). In this procedure (Table1), following other authors, namely Leno-Cerro (1992 and 1993) and López-Ochoa and Lufin-Varas (2010), we attributed a scale of 1 to 4 points to the importance and/or singularity of each of the resources identified, being:

Hierarchy 1: local interest. Hierarchy 2: regional interest. Hierarchy 3: national interest. Hierarchy 4: international interest.

To be of international interest means a tourism resource is capable of attracting international visitors. A similar approach is used to classify resources as being of national, regional or local interest.

**Vri= Jpi\*i** 

Following this methodology, the tourist value of a resource will depend on the hierarchy that it occupies, derived from its importance and/or singularity, as well as on the weighting

However, before progressing with an evaluation of the diverse resources, it is necessary to classify them in large groups. As a preliminary task, they must be classified within

Taking into consideration the proposals of Defert (1996), Padín (2004) and Vera (1997), we decided to classify the resources into 3 main categories: RN - natural resources; RH historical resources; and RE - ethnographical resources. Other classifications could be adopted, such as one that differentiates between natural and cultural resources (besides the infrastructural ones), as found in Iatu and Bulai (2011); or Murphy (1983), who advocate a basic distinction between their natural or cultural nature, complemented by the

The methodology we follow in this paper allows a greater differentiation of cultural resources, separating those endowed with a more material component from those with a

An evaluation of resources implies establishing rankings. Those rankings are a function of the importance and singularity of each resource, which can be classified as being of international, national, regional or local interest. This involves, of course, the resources attractiveness to tourists, who are coming from diverse origins and distances (López-Ochoa

To approach these hierarchies of resources, we considered the various references we were able to find to them in electronic supports and in published paper materials (that is, brochures, tourist guides, itineraries, etc.). In this procedure (Table1), following other authors, namely Leno-Cerro (1992 and 1993) and López-Ochoa and Lufin-Varas (2010), we attributed a scale of 1 to 4 points to the importance and/or singularity of each of the

To be of international interest means a tourism resource is capable of attracting international visitors. A similar approach is used to classify resources as being of national, regional or

where,

Vri= tourist value of resource "i"

homogeneous groups.

Jpi = primary hierarchy of the resource "i"

infrastructures and services supplied.

more immaterial component.

**3.1 Resources rankings** 

& Lufin-Varas; 2010).

resources identified, being: Hierarchy 1: local interest. Hierarchy 2: regional interest. Hierarchy 3: national interest. Hierarchy 4: international interest.

local interest.

i = weighting factor, attending to the nature of the resource "i"

factor attributed to the category to which it belongs, according to its nature.


Table 1. Resources by category and hierarchy, in Minho-Lima

On the other hand, the evaluation of resources implies consideration of a factor that weights the nature of the resource1, given that the ranking does not indicate the tourist value of the resource, but its importance inside its own category. The weighting factor will allow the transformation of that hierarchy into an economic graduation. With this purpose, we made use of two different methodologies, which are presented in the next sections.

This approach to the valuation of resources is similar to that followed by the body for the Spatial Planning of the National Territory Romania, in 2008, which adopted a method of applying points (scores) to both quantitative and qualitative data referring to the tourism and infrastructures resources (Iatu & Bulai, 2011). There is of course criticism of these evaluation methods but, as underlined by the before mentioned authors, every system or method will always raise debate.

#### **3.2 Demand-based coefficients**

Leno-Cerro's proposal (1993) is based on the empirical work done by authors such as Cinelli (1985), Ferrario (1980) and Var et al. (1977). In order to solve the problems arising from the space scope being different to those used in previous studies, Leno-Cerro conducted a questionnaire on the Spanish tourists' motivations (Leno-Cerro, 1992).

Following this initiative, we tried to obtain these weighting coefficients by questioning the tourists who visit Minho-Lima about their preferences regarding the type of tourism resources. From our analysis of their preferences2 it was possible to estimate the relative importance of tourism resources, by large categories/groups of resources (Table 2) which were then adjusted to a 5 points scale of values, to approximate the scale on which the results are expressed in the supply side analysis (Table 3):

 1 The establishment of weighting factors is made not for each resource but for major groups of resources, according to their nature, which, in our case, will correspond to the three categories inventoried.

<sup>2</sup> This analysis can be found in Vareiro, L., Ribeiro, J. & Pardellas, X. (2009). Preferências dos turistas que visitam o Minho-Lima: Uma análise com base nas preferências declaradas. *Estudos Regionais*, Vol. 22 (3º Quadrimestre): 35-46.

The Tourist Potential of the Minho-Lima Region (Portugal) 345

After the estimation of the parameters that define the tourism value of each type of resource, it is possible to evaluate the potential of each municipality in Minho-Lima. The resources factor3 for each municipality is given by the sum of the scores obtained by the **n** resources

Fri = Σ Vri

**Weighed value** 

Arcos de Valdevez 678,74 58,56 1031,07 62,88 Caminha 651,98 56,25 872,66 53,22 Melgaço 451,57 38,96 681,10 41,54 Monção 510,57 44,05 796,71 48,59 Paredes de Coura 480,81 41,48 697,06 42,51 Ponte da Barca 529,51 45,68 774,03 47,21 Ponte de Lima 1034,01 89,21 1564,96 95,44 Valença 592,65 51,13 890,41 54,30 Viana do Castelo 1159,09 100 1639,74 100 V.N. Cerveira 446,01 38,48 578,69 35,29

In order to compare the different factors inside the tourist potential index, we must standardise the values, since they present themselves in different scales. For the purposes of this paper we decided to express the results in a scale from 0 to 100 points, the maximum value corresponding to the one of the municipality that attains the biggest value after the

Even though the coefficients (weighting factors) we obtained by using the two methodologies are quite different, it is interesting to note that the final results obtained in

We should consider these results from two perspectives: the one of the territory's present reality; and the one envisaging the future evolution of the territory. The former depends on the present situation and current characteristic of each municipality included in the analysis,

3 The results shown in Table 4 are the final results; the intermediate calculations and the weighting scales

**(Demand) Vr (Supply) Weighed value** 

**(Supply)** 

**3.4 Results of the resources evaluation** 

Vri= tourist value of each resource of the municipality "i". Fr = value of the "resources" attributes of the municipality "i".

**(Demand)** 

**Minho-Lima 6534,94 9526,43** 

with which it is endowed (Table 4).

**Municipality Vr** 

Table 4. Resources value, by municipality

terms of tourist ranking of the municipalities are similar.

were not incorporated in this paper due to limitations of space.

addition of resources.

where,


Table 2. Demand based resources coefficients

Although the numerical values obtained do not coincide, our results concur with those of the authors mentioned above in identifying the natural resources as those that generate the greater interest among tourist demand, far above the rest.

One possible explanation for this lies in the evolution of the demand in close relation to the change in the hierarchy of motivations of tourists. Recently, there has in fact been a remarkable change in social values, showing a growing concern about the environment, that is, about its preservation and conservation. As a result of this evolution, we have seen an increasing demand and recovery of lesser known destinations, with tourists seeking enjoyment of natural beauty and a more intense contact with nature.

#### **3.3 Supply-based coefficients**

Besides the tourists' opinion, we also decided to consider that of the agents (public and private) charged with the elaboration of the territory's promotional material. From this, we envisaged obtaining a vision of the tourist destination through the eyes of its promoters, that is, from a supply side approach.

Starting from their mention in the various promotional materials, we made an estimation of linear regression (annex1), in order to determine the implicit importance of each category of resources.

We took the number of references made to the resource in the various promotional supports (websites, brochures, tourist guides, itineraries, etc.) as the dependent variable. And, as independent variables, we used: i) the number of natural resources; ii) the number of historical resources; and iii) the number of ethnographical resources existing in each one of the parishes of the municipalities considered in our study.

The results we obtained were:


Table 3. Supply based resources coefficients

As previously mentioned, these coefficients expose the importance that the agents (public and private) responsible for the promotional material consistently give to the built heritage, as well as to the festivals, pilgrimages and gastronomy. This approach to the marketing of the territory is, of course, related to the image the agents think the potential visitors have of the tourism destination and/or the profile of the tourists they envisage attracting to the destination.

#### **3.4 Results of the resources evaluation**

After the estimation of the parameters that define the tourism value of each type of resource, it is possible to evaluate the potential of each municipality in Minho-Lima. The resources factor3 for each municipality is given by the sum of the scores obtained by the **n** resources with which it is endowed (Table 4).

$$\text{Fri} = \Sigma \text{ Vri}$$

where,

344 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Although the numerical values obtained do not coincide, our results concur with those of the authors mentioned above in identifying the natural resources as those that generate the

One possible explanation for this lies in the evolution of the demand in close relation to the change in the hierarchy of motivations of tourists. Recently, there has in fact been a remarkable change in social values, showing a growing concern about the environment, that is, about its preservation and conservation. As a result of this evolution, we have seen an increasing demand and recovery of lesser known destinations, with tourists seeking

Besides the tourists' opinion, we also decided to consider that of the agents (public and private) charged with the elaboration of the territory's promotional material. From this, we envisaged obtaining a vision of the tourist destination through the eyes of its promoters,

Starting from their mention in the various promotional materials, we made an estimation of linear regression (annex1), in order to determine the implicit importance of each category of

We took the number of references made to the resource in the various promotional supports (websites, brochures, tourist guides, itineraries, etc.) as the dependent variable. And, as independent variables, we used: i) the number of natural resources; ii) the number of historical resources; and iii) the number of ethnographical resources existing in each one of

As previously mentioned, these coefficients expose the importance that the agents (public and private) responsible for the promotional material consistently give to the built heritage, as well as to the festivals, pilgrimages and gastronomy. This approach to the marketing of the territory is, of course, related to the image the agents think the potential visitors have of the tourism

destination and/or the profile of the tourists they envisage attracting to the destination.

**- Natural resources:** 49% 5 **- Historical resources:** 32,4% 3,308 **- Ethnographical resources:** 18,6% 1,897

Table 2. Demand based resources coefficients

**3.3 Supply-based coefficients** 

that is, from a supply side approach.

The results we obtained were:

Table 3. Supply based resources coefficients

resources.

greater interest among tourist demand, far above the rest.

the parishes of the municipalities considered in our study.

**- Natural resources:** 2,682 **- Historical resources:** 5,342 **- Ethnographical resources:** 4,493

enjoyment of natural beauty and a more intense contact with nature.

**Relative importance Weighting factors** 

**Weighting factors** 


Vri= tourist value of each resource of the municipality "i". Fr = value of the "resources" attributes of the municipality "i".

Table 4. Resources value, by municipality

In order to compare the different factors inside the tourist potential index, we must standardise the values, since they present themselves in different scales. For the purposes of this paper we decided to express the results in a scale from 0 to 100 points, the maximum value corresponding to the one of the municipality that attains the biggest value after the addition of resources.

Even though the coefficients (weighting factors) we obtained by using the two methodologies are quite different, it is interesting to note that the final results obtained in terms of tourist ranking of the municipalities are similar.

We should consider these results from two perspectives: the one of the territory's present reality; and the one envisaging the future evolution of the territory. The former depends on the present situation and current characteristic of each municipality included in the analysis,

 3 The results shown in Table 4 are the final results; the intermediate calculations and the weighting scales were not incorporated in this paper due to limitations of space.

The Tourist Potential of the Minho-Lima Region (Portugal) 347

Regarding internal accessibility, the type of road infrastructures available to reach each municipality will be the basic element for its estimation, establishing a schematic and

Fig. 1. National Road Plan (PNR): Portugal

Fig. 2. National Road Plan: Minho-Lima

simplified structure based on the following scores:




establishing the potential at the present moment. Accordingly, we could observe large disparities between the better endowed municipalities and others occupying less central geographical positions and being less endowed with natural and historical resources.

The second perspective concerns changes in the initial parameters. This means, in strict terms, the election of planning alternatives with defined objectives for the improvement of the economic and social situation of the municipalities worst placed. It also means that a desirable future scenario should be properly defined.


#### **4. Accessibilities value**

The accessibilities factor refers to the conditions that facilitate or make difficult the tourists' displacement from the emitting markets to the destination.

To calculate this factor properly consider internal and external accessibility should be considered separately. Internal accessibility relates to the real and ideal distance between the municipalities. In this case, there will be a qualitative approach only, through the consideration of the main communication infrastructures and accesses to each of the municipalities.

Given that within the concept of external accessibility, we should capture the space-distance and the space-time vectors, we will assume that the whole area of the study benefits from the same network of high-speed motorways (see Figure 1 and 2), approaching the issue from the point of view of the area's overall accessibility for visitors coming from the remaining domestic and European territory. This is a simplifying hypothesis which we believe is acceptable as a preliminary approach.

In order to obtain an indicator of accessibility for a certain destination, other approaches could be followed. For example, in their empirical research regarding *Autofagasta*, in Chile, López-Ochoa and Lufin-Varas (2010) adopted the Euclidian concept of distance to locate tourism resources vis-à-vis the main town of the region.

The maps shown in the next page (Figures 1 and 2) allow us to conclude that our area under study presents conditions of physical access by motorway similar to those of other better known tourism destinations. This is a favourable factor that should be considered in the planning of the set of tourism offers, as well as in the marketing strategies.

establishing the potential at the present moment. Accordingly, we could observe large disparities between the better endowed municipalities and others occupying less central geographical positions and being less endowed with natural and historical resources.

The second perspective concerns changes in the initial parameters. This means, in strict terms, the election of planning alternatives with defined objectives for the improvement of the economic and social situation of the municipalities worst placed. It also means that a

> **Weighed value (Demand)**

**Vr (Supply)**  **Weighed value (Supply)** 

**(Demand)** 

**Natural Resources** 1685,00 25,78 903,83 9,49

**Historical Resources** 3800,88 58,16 6138,00 64,43

**Ethnographic Resources** 1049,06 16,05 2484,60 26,08

**Total 6534,94 100 9526,43 100** 

The accessibilities factor refers to the conditions that facilitate or make difficult the tourists'

To calculate this factor properly consider internal and external accessibility should be considered separately. Internal accessibility relates to the real and ideal distance between the municipalities. In this case, there will be a qualitative approach only, through the consideration of the main communication infrastructures and accesses to each of the

Given that within the concept of external accessibility, we should capture the space-distance and the space-time vectors, we will assume that the whole area of the study benefits from the same network of high-speed motorways (see Figure 1 and 2), approaching the issue from the point of view of the area's overall accessibility for visitors coming from the remaining domestic and European territory. This is a simplifying hypothesis which we

In order to obtain an indicator of accessibility for a certain destination, other approaches could be followed. For example, in their empirical research regarding *Autofagasta*, in Chile, López-Ochoa and Lufin-Varas (2010) adopted the Euclidian concept of distance to locate

The maps shown in the next page (Figures 1 and 2) allow us to conclude that our area under study presents conditions of physical access by motorway similar to those of other better known tourism destinations. This is a favourable factor that should be considered in the

planning of the set of tourism offers, as well as in the marketing strategies.

desirable future scenario should be properly defined.

**Resource category Vr** 

Table 5. Resources value, by resource category

believe is acceptable as a preliminary approach.

tourism resources vis-à-vis the main town of the region.

displacement from the emitting markets to the destination.

**4. Accessibilities value** 

municipalities.

Fig. 1. National Road Plan (PNR): Portugal

Fig. 2. National Road Plan: Minho-Lima

Regarding internal accessibility, the type of road infrastructures available to reach each municipality will be the basic element for its estimation, establishing a schematic and simplified structure based on the following scores:


The Tourist Potential of the Minho-Lima Region (Portugal) 349

Iti = (aci + ri)/2

Each one of these variables was expressed in a scale of five points, although in this case they can also take the value zero. In Table 7 we can see that the results obtained reflect a widespread lack of tourist infrastructure, particularly in the areas already referred to as

Arcos de Valdevez 3,09 1,4 4,49 2,245

Caminha 4,45 2,4 6,85 3,425

Melgaço 2,14 1,22 3,36 1,68

Monção 0,74 1,84 2,58 1,29

Paredes de Coura 0,41 0,21 0,62 0,31

Ponte da Barca 1,91 1,75 3,66 1,83

Ponte de Lima 2,15 3,66 5,81 2,905

Valença 0,64 2,05 2,69 1,345

Viana do Castelo 5 5 10 5

V. N. Cerveira 1,22 0,93 2,15 1,075

location coefficient was used in a scale of 0 to 5 points, applying the equation:

Estci = number of commercial establishments in the municipality "i".

The retail and wholesale infrastructure was calculated from data of the Commercial Cadastre Database of *DG Trade and Competition*, concerning the number of retail and wholesale establishments in the area of study. For this variable, as in the previous ones, a

Ici = (Estci\*5)/Estcm

Estcm = number of retail and wholesale establishments in the municipality with the

**Iti = (aci+ri)/2** 

**aci ri (aci+ri) Iti** 

aci = accommodation capacity in the municipality "i". ri = restaurants capacity in the municipality "i".

Table 7. Tourist Infrastructures, by municipality

Ici = commercial infrastructure in the municipality "i".

maximum number of commercial establishments.

"poor" in terms of accessibilities.

**Municipality** 

where,

where,


Table 6. Accessibility Value, by municipality

Although we recognise that "great access does not mean great tourism" (Iatu & Bulai, 2011: 173), an analysis of Table 6 shows two differentiated situations: on the one hand, the municipal axis which includes Viana do Castelo, Ponte de Lima and Valença, served by motorways; and, on the another hand, the situation of the municipalities of Melgaço, Monção, Paredes de Coura and V.N. Cerveira, whose internal communication is served mainly by national roads. This second case signifies greater difficulties in terms of accessibility, which is further reinforced if the levels of identification (markers and informative signs) for the destinations and resources on the routes of access are taken into consideration.

#### **5. Equipment value**

The equipment factor is the most complex and also that with smaller specific weight in the final value of the IPT (Pardellas et al., 2005). This factor is defined as a synthetic indicator of three basic elements: the tourism infrastructure; the commercial infrastructure; and the recreational-sport infrastructure, applying the formula:

$$\text{FEi} = \text{f} \text{ (Iti, lci, lrdi)}$$

where,

FEi = equipment factor in the municipality "i".

Iti = tourist infrastructure in the municipality "i".

Ici = commercial infrastructure in the municipality "i".

Irdi = recreational-sport infrastructure in the municipality "i".

Regarding the tourism infrastructure, we considered two variables: lodging services and restaurants4, being defined as:

<sup>4</sup> Leno-Cerro (1993) suggests a third variable in this factor, the number of secondary residences, calculated by approaching the quotient between the number of telephones and its inhabitants. With the proliferation of mobiles, we considered that this variable could adulterate the results.

$$\text{Iħi} = (\text{aci} + \text{ri})/2$$

where,

348 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

**Municipality Total Value Fai** 

Although we recognise that "great access does not mean great tourism" (Iatu & Bulai, 2011: 173), an analysis of Table 6 shows two differentiated situations: on the one hand, the municipal axis which includes Viana do Castelo, Ponte de Lima and Valença, served by motorways; and, on the another hand, the situation of the municipalities of Melgaço, Monção, Paredes de Coura and V.N. Cerveira, whose internal communication is served mainly by national roads. This second case signifies greater difficulties in terms of accessibility, which is further reinforced if the levels of identification (markers and informative signs) for the destinations and resources on the routes of access are taken into

The equipment factor is the most complex and also that with smaller specific weight in the final value of the IPT (Pardellas et al., 2005). This factor is defined as a synthetic indicator of three basic elements: the tourism infrastructure; the commercial infrastructure; and the

FEi = f (Iti, Ici, Irdi)

Regarding the tourism infrastructure, we considered two variables: lodging services and

4 Leno-Cerro (1993) suggests a third variable in this factor, the number of secondary residences, calculated by approaching the quotient between the number of telephones and its inhabitants. With the

proliferation of mobiles, we considered that this variable could adulterate the results.

Arcos de Valdevez 4 80 Caminha 4 80 Melgaço 3 60 Monção 3 60 Paredes de Coura 3 60 Ponte da Barca 4 80 Ponte de Lima 5 100 Valença 5 100 Viana do Castelo 5 100 Vila Nova de Cerveira 3 60

Table 6. Accessibility Value, by municipality

recreational-sport infrastructure, applying the formula:

FEi = equipment factor in the municipality "i". Iti = tourist infrastructure in the municipality "i". Ici = commercial infrastructure in the municipality "i". Irdi = recreational-sport infrastructure in the municipality "i".

restaurants4, being defined as:

consideration.

where,

**5. Equipment value** 

aci = accommodation capacity in the municipality "i". ri = restaurants capacity in the municipality "i".

Each one of these variables was expressed in a scale of five points, although in this case they can also take the value zero. In Table 7 we can see that the results obtained reflect a widespread lack of tourist infrastructure, particularly in the areas already referred to as "poor" in terms of accessibilities.


Table 7. Tourist Infrastructures, by municipality

The retail and wholesale infrastructure was calculated from data of the Commercial Cadastre Database of *DG Trade and Competition*, concerning the number of retail and wholesale establishments in the area of study. For this variable, as in the previous ones, a location coefficient was used in a scale of 0 to 5 points, applying the equation:

$$\text{Ici} = \text{(Estci} \text{``5)} / \text{Estcm}$$

where,

Ici = commercial infrastructure in the municipality "i".

Estci = number of commercial establishments in the municipality "i".

Estcm = number of retail and wholesale establishments in the municipality with the maximum number of commercial establishments.

The Tourist Potential of the Minho-Lima Region (Portugal) 351

Irdi=(Eqrdi\*5)/Eqrdm

Eqrdm = number of recreational-sport establishments in the municipality with the

The three analyzed indicators, tourist infrastructure (It), commercial infrastructure (Ic) and recreational-sport infrastructure (Ird) are synthesized in only one factor (FE), which is the

In this way, the equipment factor is the result of the weighed sum of the values obtained from the individual components. The sum is weighed by the different specific weights of the values, the tourism infrastructure being the one that better reflects the tourism importance of the municipality, marked with a coefficient 2. Thus, the equipment factor is expressed as:

FEi=2Iti + Ici + Irdi

As these variables are expressed in a scale from 0 to 5 points, the theoretical limit of this factor would be between 0 points, for the municipality that does not have any equipment or infrastructure, and 20 points, for the one best endowed. To allow for the comparability of this factor with the others analyzed, these initial results should be transformed into a scale

**Municipality 2Iti Ici Irdi FEi FEiPond** 

Arcos de Valdevez 4,5 1,23 2,14 7,87 39,83 Caminha 6,86 1,10 5 12,96 65,59 Melgaço 3,36 0,43 2,62 6,41 32,44 Monção 2,58 1,46 1,19 5,23 26,47 Paredes de Coura 0,62 0,45 1,43 2,5 12,65 Ponte da Barca 3,66 0,59 2,62 6,87 34,77 Ponte de Lima 5,82 1,87 4,29 11,98 60,63 Valença 2,7 0,50 3,81 7,01 35,48 Viana do Castelo 10 5 4,76 19,76 100 Vila Nova de Cerveira 2,16 0,42 2,62 5,2 26,32

Irdi = recreational-sport infrastructure in the municipality "i".

maximum number of recreational-sport establishments.

third component of the Tourism Potential Index (IPT).

FEi = equipment factor of municipality "i". Iti = tourism infrastructure of municipality "i". Ici = commercial infrastructure of municipality "i". Irdi = recreational-sport infrastructure of municipality "i".

Table 10. Equipment Factor, by municipality

of 0 to 100 points (FEiPond).

Eqrdi = number of recreational-sport establishments in the municipality "i".

where,

where,


Table 8. Commercial Infrastructures, by municipality

It is worth mentioning the strong disparity among the number of retail shops in Viana do Castelo (the more urban municipality) and the other municipalities, with this city obtaining the maximum value (5), against values of just over 0,4 in V.N. Cerveira, Melgaço and Paredes de Coura.

The estimation of the recreational-sport infrastructure is based on the facilities of this type that each municipality possesses, transforming the existent establishments into a scale of 0 to 5 points. The inclusion of this variable in the IPT is justified by the more or less active nature of the tourists who visit the area encompassed in our research.

Analyzing the results obtained using the data from the city councils and RTAM, one can conclude that the scarcity of this type of infrastructure was strongly verified, not only from the tourism point of view, but also if the support to the local population is considered.


Table 9. Recreational-Sport Infrastructure, by municipality

As in the previous variable, a relative location coefficient was used, expressed in a scale of 0 to 5 points, applying the formula:

$$\text{Irdi=(Eqrdċ\*5)/Eqrdċn }$$

where,

350 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

**Municipality Estci Eci**  Arcos de Valdevez 315 1,23 Caminha 283 1,10 Melgaço 111 0,43 Monção 373 1,46 Paredes de Coura 116 0,45 Ponte da Barca 152 0,59 Ponte de Lima 478 1,87 Valença 128 0,50 Viana do Castelo 1281 5 Vila Nova de Cerveira 108 0,42

It is worth mentioning the strong disparity among the number of retail shops in Viana do Castelo (the more urban municipality) and the other municipalities, with this city obtaining the maximum value (5), against values of just over 0,4 in V.N. Cerveira, Melgaço and

The estimation of the recreational-sport infrastructure is based on the facilities of this type that each municipality possesses, transforming the existent establishments into a scale of 0 to 5 points. The inclusion of this variable in the IPT is justified by the more or less active nature

Analyzing the results obtained using the data from the city councils and RTAM, one can conclude that the scarcity of this type of infrastructure was strongly verified, not only from the tourism point of view, but also if the support to the local population is considered.

> **Municipality Eqrdi Erdi**  Arcos de Valdevez 9 2,14 Caminha 21 5 Melgaço 11 2,62 Monção 5 1,19 Paredes de Coura 6 1,43 Ponte da Barca 11 2,62 Ponte de Lima 18 4,29 Valença 16 3,81 Viana do Castelo 20 4,76 Vila Nova de Cerveira 11 2,62

As in the previous variable, a relative location coefficient was used, expressed in a scale of 0

Table 8. Commercial Infrastructures, by municipality

of the tourists who visit the area encompassed in our research.

Table 9. Recreational-Sport Infrastructure, by municipality

to 5 points, applying the formula:

Paredes de Coura.

Irdi = recreational-sport infrastructure in the municipality "i".

Eqrdi = number of recreational-sport establishments in the municipality "i".

Eqrdm = number of recreational-sport establishments in the municipality with the maximum number of recreational-sport establishments.

The three analyzed indicators, tourist infrastructure (It), commercial infrastructure (Ic) and recreational-sport infrastructure (Ird) are synthesized in only one factor (FE), which is the third component of the Tourism Potential Index (IPT).

In this way, the equipment factor is the result of the weighed sum of the values obtained from the individual components. The sum is weighed by the different specific weights of the values, the tourism infrastructure being the one that better reflects the tourism importance of the municipality, marked with a coefficient 2. Thus, the equipment factor is expressed as:

$$\text{FEi=2Iti+Ici+Irdċ}$$

where,

FEi = equipment factor of municipality "i".

Iti = tourism infrastructure of municipality "i".

Ici = commercial infrastructure of municipality "i".

Irdi = recreational-sport infrastructure of municipality "i".

As these variables are expressed in a scale from 0 to 5 points, the theoretical limit of this factor would be between 0 points, for the municipality that does not have any equipment or infrastructure, and 20 points, for the one best endowed. To allow for the comparability of this factor with the others analyzed, these initial results should be transformed into a scale of 0 to 100 points (FEiPond).


Table 10. Equipment Factor, by municipality

The Tourist Potential of the Minho-Lima Region (Portugal) 353

The Tourism Potential Index allows analysing the possibilities for the industry's development and, by extension and integration, for the set of productive activities in a certain territory (Pardellas et al., 2005). In our research, we obtained significant information about the differences among municipalities, and this will allow adjusting the mechanisms and planning alternatives to each situation, modifying those factors considered less

Given the aim of this paper to compare the perspectives of the supply and demand sides on the importance of resources, it is worth underlining here that the results obtained from the

In this study we suggest a new Tourism Potential Index derived from the empirical approach we developed, and supported by established analytical tools and similar investigations previously conducted by other authors. Using this approach, we were able to

The first concerns the high value presented by the resources factor in Viana do Castelo and Ponte de Lima. In the case of Viana do Castelo, this is the result of the municipality's singular endowment of natural resources (sea, river and mountain) and its wealthy ethnographic heritage. In the Ponte de Lima case, the potential comes from the important built heritage, not only civilian but also religious, as well as from the relevant ethnographic resources. In the case of some municipalities in the region, it is worth noting the small importance given to natural resources, even though they are endowed with excellent examples, as is the case of Paredes de Coura, with its Protected Landscape of

A second conclusion concerns the accessibility factor which, due to the simplification adopted in the analyses, presents more elevated values in Ponte de Lima, Valença and Viana, and lower values in the other municipalities. If we add this result to the previous one, we can verify that the rectification of the deficiencies identified at the infrastructures level is a crucial factor for the improvement of the economic position and the tourism potential in

The third concerns the equipments and infrastructures, where the differences are greater between the municipalities under analysis. Partially, this situation is linked to the differences found between the population densities. As a consequence, the highest equipment values are attained by the more urban areas, allowing comparative distances of 2,5 and 19,76 points, if we take the minimum (Paredes de Coura) and maximum (Viana do

Clearly, this factor, on the one hand, highlights the need for public policies, given that it is the factor more easily modifiable in the short-term and, on the other hand, makes clear the market tendency to an asymmetric growth path. This is the result of the circular effect

As a final conclusion, it is possible to say that the analysis mentioned above verified that an important tourism potential exists, but that the consolidation of the territory as a tourist

between (less) offer/(more) production costs and (less) demand.

two different perspectives are very similar, with no impact on the final ranking.

favourable.

**7. Conclusion** 

Corno do Bico.

Castelo) values.

the less favoured territories.

derive a few main conclusions.

#### **6. The tourism potential index**

As previously stated, resources, accessibility and equipments and infrastructures are the factors that strongly determine the tourism value of a particular territory. Although it is difficult to measure the value of a perception, in this paper we intend to attempt this by applying the theoretical concepts suggested by a few authors (Iatu & Bulai, 2011; Leno-Cerro, 1992 and 1993; Pardellas et al., 2005).

At the same time, it is important to keep in mind that not all elements in the index have the same importance in the estimation of this value. In the theoretical formulation, we must, therefore, include weighting factors for the different elements. For the quantification of these weighting coefficients, the basic hypothesis relates to the human intervention level of each one of the factors. As a consequence, the resources will have the highest coefficient because if they did not exist, it would be very difficult to create them. The accessibility factor is the second in importance, since we can improve the quality of the accesses, but it is impossible to reduce the physical distances. Finally, the equipments constitute the less critical factor, since their lack is relatively easy to solve. In this regard, the Tourism Potential Index (IPT) would be expressed by the following equation:

#### IPTi= 1,5 FRi + 1,25FAi + 1,00FEi

Thus, the IPT of a given municipality will vary between a maximum of 375 and 05. To maintain the homogeneity of the scales used in the estimation of each factor, we transformed the index into a scale of 0 to 100 points (IPTiPond), taking the 375 possible points as a basis. The results obtained are presented in Table 11:


Table 11. Tourism Potential Index, by municipality

 5 The result 375 is obtained from: 1,5x100 + 1,25x100 + 1,00x100, which are the maximum values of each one of the factors. The minimum value is close to zero, for each one of the factors.

The Tourism Potential Index allows analysing the possibilities for the industry's development and, by extension and integration, for the set of productive activities in a certain territory (Pardellas et al., 2005). In our research, we obtained significant information about the differences among municipalities, and this will allow adjusting the mechanisms and planning alternatives to each situation, modifying those factors considered less favourable.

Given the aim of this paper to compare the perspectives of the supply and demand sides on the importance of resources, it is worth underlining here that the results obtained from the two different perspectives are very similar, with no impact on the final ranking.

#### **7. Conclusion**

352 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

As previously stated, resources, accessibility and equipments and infrastructures are the factors that strongly determine the tourism value of a particular territory. Although it is difficult to measure the value of a perception, in this paper we intend to attempt this by applying the theoretical concepts suggested by a few authors (Iatu & Bulai, 2011; Leno-

At the same time, it is important to keep in mind that not all elements in the index have the same importance in the estimation of this value. In the theoretical formulation, we must, therefore, include weighting factors for the different elements. For the quantification of these weighting coefficients, the basic hypothesis relates to the human intervention level of each one of the factors. As a consequence, the resources will have the highest coefficient because if they did not exist, it would be very difficult to create them. The accessibility factor is the second in importance, since we can improve the quality of the accesses, but it is impossible to reduce the physical distances. Finally, the equipments constitute the less critical factor, since their lack is relatively easy to solve. In this regard, the Tourism Potential Index (IPT)

IPTi= 1,5 FRi + 1,25FAi + 1,00FEi Thus, the IPT of a given municipality will vary between a maximum of 375 and 05. To maintain the homogeneity of the scales used in the estimation of each factor, we transformed the index into a scale of 0 to 100 points (IPTiPond), taking the 375 possible

**1,25FAi 1,00FEi**

Valdevez 95,06 94,32 100 39,83 234,89 234,15 62,64 62,44 Caminha 87,53 79,83 100 65,59 253,12 245,42 67,50 65,45 Melgaço 60,75 62,31 75 32,44 168,19 169,75 44,85 45,27 Monção 70,97 72,89 75 26,47 172,44 174,36 45,98 46,50

Coura 63,69 63,77 75 12,65 151,34 151,42 40,36 40,38 Ponte da Barca 74,51 70,82 100 34,77 209,28 205,59 55,81 54,82 Ponte de Lima 136,2 143,16 125 60,63 321,83 328,79 85,82 87,68 Valença 81,29 81,45 125 35,48 241,77 241,93 64,47 64,51

Castelo 150 150 125 100 375 375 100 100

Cerveira 59,06 52,94 75 26,32 160,38 154,26 42,77 41,14

5 The result 375 is obtained from: 1,5x100 + 1,25x100 + 1,00x100, which are the maximum values of each

one of the factors. The minimum value is close to zero, for each one of the factors.

Demand Supply Demand Supply Demand Supply

**IPTi IPTiPond** 

**6. The tourism potential index** 

Cerro, 1992 and 1993; Pardellas et al., 2005).

would be expressed by the following equation:

**Municipality** 

Arcos de

Paredes de

Viana do

Vila Nova de

points as a basis. The results obtained are presented in Table 11:

**1,5 Fri** 

Table 11. Tourism Potential Index, by municipality

In this study we suggest a new Tourism Potential Index derived from the empirical approach we developed, and supported by established analytical tools and similar investigations previously conducted by other authors. Using this approach, we were able to derive a few main conclusions.

The first concerns the high value presented by the resources factor in Viana do Castelo and Ponte de Lima. In the case of Viana do Castelo, this is the result of the municipality's singular endowment of natural resources (sea, river and mountain) and its wealthy ethnographic heritage. In the Ponte de Lima case, the potential comes from the important built heritage, not only civilian but also religious, as well as from the relevant ethnographic resources. In the case of some municipalities in the region, it is worth noting the small importance given to natural resources, even though they are endowed with excellent examples, as is the case of Paredes de Coura, with its Protected Landscape of Corno do Bico.

A second conclusion concerns the accessibility factor which, due to the simplification adopted in the analyses, presents more elevated values in Ponte de Lima, Valença and Viana, and lower values in the other municipalities. If we add this result to the previous one, we can verify that the rectification of the deficiencies identified at the infrastructures level is a crucial factor for the improvement of the economic position and the tourism potential in the less favoured territories.

The third concerns the equipments and infrastructures, where the differences are greater between the municipalities under analysis. Partially, this situation is linked to the differences found between the population densities. As a consequence, the highest equipment values are attained by the more urban areas, allowing comparative distances of 2,5 and 19,76 points, if we take the minimum (Paredes de Coura) and maximum (Viana do Castelo) values.

Clearly, this factor, on the one hand, highlights the need for public policies, given that it is the factor more easily modifiable in the short-term and, on the other hand, makes clear the market tendency to an asymmetric growth path. This is the result of the circular effect between (less) offer/(more) production costs and (less) demand.

As a final conclusion, it is possible to say that the analysis mentioned above verified that an important tourism potential exists, but that the consolidation of the territory as a tourist

The Tourist Potential of the Minho-Lima Region (Portugal) 355

**EH TER TN MCAT PC (CETi\*5)/CETm** 

**CETi Aci =** 

**Tourist Infrastructures** 

Valdevez 0,94 1,61 5 0 1,28 8,83 3,09 Caminha 2,2 1,14 0 5 4,36 12,7 4,45 Melgaço 1,14 0,19 3,33 0 1,44 6,1 2,14 Monção 0,92 1,18 0 0 0 2,1 0,74 Paredes de Coura 0,16 1 0 0 0 1,16 0,41 Ponte da Barca 0,16 0,59 3,33 0,09 1,28 5,45 1,91 Ponte de Lima 1,15 5 0 0 0 6,15 2,15 Valença 1,29 0,54 0 0 0 1,83 0,64 Viana do Castelo 5 3,42 0 0,86 5 14,28 5 V. N. Cerveira 1,51 0,18 0 0,83 0,96 3,48 1,22

Minho-Lima 14,47 14,85 11,66 6,78 14,32 62,08

MCAT – Extra-Hotel accommodation capacity weighted by categories.

TER – Tourism establishments' capacity available in rural areas weighted by categories. TN – Tourism establishments' capacity available in natural areas weighted by categories.

Arcos de Valdevez 2416 6383 1,40 Caminha 4145 10931 2,40 Melgaço 2095 5533 1,22 Monção 3126 8367 1,84 Paredes de Coura 337 941 0,21 Ponte da Barca 2795 7960 1,75 Ponte de Lima 5794 16654 3,66 Valença 3361 9356 2,05 Viana do Castelo 7796 22767 5,00 Vila Nova de Cerveira 1444 4226 0,93

**Municipality Capacity CRi Ri = (CRI\*5)/CRm** 

EH – Hotel accommodation capacity weighted by categories.

CETi – Tourist infrastructures capacity weighted by categories.

Annex 2. Tourist Infrastructures Value by Municipalities

Minho-Lima 33309

CRm - Municipality value with higher CRi. Ri - Restaurants value in the municipality "i". Annex 3. Restaurants Value by Municipality

CRi - Restaurant capacity in the municipality "i" weighted by categories.

PC- Camping capacity weighted by categories

CETm – Municipality value with higher CETi. Aci - Accommodation capacity in the municipality "i".

**Municipality** 

Arcos de

destination will imply all the agents, public and private, involved in the different components of the tourism supply, taking action in order to attain a more efficient use of the available endogenous resources. A first step in that direction will be the definition and consequent promotion of an image of the region as common tourism destination.

Although the goals envisaged by this kind of investigation seem to be meritorious, the authors of the article recognize the need to address some of its limitations. To this purpose, we intend to rely less on the Leno-Cerro index in future empirical work and, thus, we intend to explore alternative methodological approaches to appraise the tourism potential of a destination.

Regarding accessibility, we are aware of the need to incorporate the ways in which tourists can access the territory (air transportation, railways, and motorways – by car or bus). With regard to infrastructures, the authors will also seek to determine the weighting factors for each of its internal components (tourism, commercial and recreational-sport infrastructures).

A further limitation of the approach followed for the evaluation of the tourism potential of a territory arises from its supply side bias, that is, the index is derived from looking at the available territorial resources as tourism attractions. This can have the effect of establishing a dangerous relationship between territorial attributes and tourism products and services. To overcome this potential pitfall, we see no alternative apart from simultaneously looking at the demand market and checking what its tendencies are in terms of tourist behaviour and product demand.


#### **8. Annex**

Notes: \*p<0,05; \*\*p<0,01; \*\*\*p<0,001. The values in parenthesis are t-statistics.

\*\* statistically significant at the 0,01 level; \*\*\* statistically significant at the 0,001 level.

Annex 1. Linear regression used to estimate the weighting factors, attending to the nature of the resource

destination will imply all the agents, public and private, involved in the different components of the tourism supply, taking action in order to attain a more efficient use of the available endogenous resources. A first step in that direction will be the definition and

Although the goals envisaged by this kind of investigation seem to be meritorious, the authors of the article recognize the need to address some of its limitations. To this purpose, we intend to rely less on the Leno-Cerro index in future empirical work and, thus, we intend to explore alternative methodological approaches to appraise the tourism

Regarding accessibility, we are aware of the need to incorporate the ways in which tourists can access the territory (air transportation, railways, and motorways – by car or bus). With regard to infrastructures, the authors will also seek to determine the weighting factors for each of its internal components (tourism, commercial and recreational-sport

A further limitation of the approach followed for the evaluation of the tourism potential of a territory arises from its supply side bias, that is, the index is derived from looking at the available territorial resources as tourism attractions. This can have the effect of establishing a dangerous relationship between territorial attributes and tourism products and services. To overcome this potential pitfall, we see no alternative apart from simultaneously looking at the demand market and checking what its tendencies are in

> 2,682 (7,243)\*\*\* 5,342 (40,400)\*\*\* 4,493 (17,272)\*\*\* - 1,394 (-2,822)\*\*

0,965 0,965 2093,805 228

Annex 1. Linear regression used to estimate the weighting factors, attending to the nature of

Dep. Var. Ind. Var. NRef

consequent promotion of an image of the region as common tourism destination.

potential of a destination.

terms of tourist behaviour and product demand.

RN

RH

RE

R2

F N

Constant

Adjusted R2

Notes: \*p<0,05; \*\*p<0,01; \*\*\*p<0,001. The values in parenthesis are t-statistics.

\*\* statistically significant at the 0,01 level; \*\*\* statistically significant at the 0,001 level.

infrastructures).

**8. Annex** 

the resource


EH – Hotel accommodation capacity weighted by categories.

TER – Tourism establishments' capacity available in rural areas weighted by categories.

TN – Tourism establishments' capacity available in natural areas weighted by categories.

MCAT – Extra-Hotel accommodation capacity weighted by categories.

PC- Camping capacity weighted by categories

CETi – Tourist infrastructures capacity weighted by categories.

CETm – Municipality value with higher CETi.

Aci - Accommodation capacity in the municipality "i".

Annex 2. Tourist Infrastructures Value by Municipalities


CRi - Restaurant capacity in the municipality "i" weighted by categories.

CRm - Municipality value with higher CRi.

Ri - Restaurants value in the municipality "i".

Annex 3. Restaurants Value by Municipality

**18** 

**Long-Term Impacts of Non-Sustainable Tourism** 

**Islands Coastal Habitats in a Changing Climate:** 

Ricardo Laureano5, Pablo A. Méndez-Lázaro6 and Joel O. Meléndez-Díaz7

*2Island Resources Foundation & Department of Geography and the Environment,* 

*7Department of Environmental Sciences, University of Puerto Rico-Río Piedras* 

**1.1 Importance of the coastal tourism and urban construction industries in Puerto** 

Characterized by a very high biodiversity that include some of the richest, productive, and fragile ecosystems on earth, tropical coastal areas represent the transitional zone between the land and sea (Cenacchi, 2010). Easy access to these coastal and marine resources, in combination with their natural allure, has made coastal resources highly vulnerable to tourism, population growth, and urban expansion pressures. More than half of today's world population lives in coastal areas (within 200 km from the sea) and this number is on the rise (Hinrichsen, 1998; Creel, 2003). In the particular case of the Commonwealth of Puerto Rico (PR) (Figure 1), about 70% of the island's population of 3.7 million live within close proximity to the sea on municipalities that lie adjacent to the coast (U.S. Census Bureau, 2010). Coastal areas are also those which are most visited by tourists, often presenting the most important economic activity. In the Insular Caribbean for example, tourism is one of the premier economic activities. The construction sector and tourism are two of the most important economic drivers in PR (PRTC, 2008, 2009). Tourism is the largest

**1. Introduction** 

**Rico** 

**and Urban Development in Small Tropical** 

**Lessons Learned from Puerto Rico** 

*5Vegabajeños Impulsando Desarrollo Ambiental Sustentable, Inc.* 

Carmen R. Guerrero-Pérez3, Mary Ann Lucking4,

*1Center for Applied Tropical Ecology and Conservation,* 

*University of Puerto Rico-Medical Sciences Campus* 

*University of Puerto Rico-Río Piedras* 

*3 Instituto para un Desarrollo Sustentable* 

*6Department of Environmental Health,* 

*University of Texas at Austin* 

*4Coralations, Inc.* 

*1,3,4,5,6,7Puerto Rico* 

*2USA* 

Edwin A. Hernández- Delgado1, Carlos E. Ramos-Scharrón2,

#### **9. References**


### **Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico**

Edwin A. Hernández- Delgado1, Carlos E. Ramos-Scharrón2, Carmen R. Guerrero-Pérez3, Mary Ann Lucking4, Ricardo Laureano5, Pablo A. Méndez-Lázaro6 and Joel O. Meléndez-Díaz7 *1Center for Applied Tropical Ecology and Conservation, University of Puerto Rico-Río Piedras 2Island Resources Foundation & Department of Geography and the Environment, University of Texas at Austin 3 Instituto para un Desarrollo Sustentable 4Coralations, Inc. 5Vegabajeños Impulsando Desarrollo Ambiental Sustentable, Inc. 6Department of Environmental Health, University of Puerto Rico-Medical Sciences Campus 7Department of Environmental Sciences, University of Puerto Rico-Río Piedras 1,3,4,5,6,7Puerto Rico 2USA* 

#### **1. Introduction**

356 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Cha, S. & Uysal, M. (1995). Regional Analysis of Tourism Resources: A Case Study of Korea, *Journal of Hospitality Marketing & Management*, 1936-8631, Vol. 2( 3): 61 – 74 Cinelli, A. (1985). Il poténciale turistico, in Corna Pellegrini, G. & Frigerio, A. (eds.), *Turismo* 

Ferrario, F. (1980). *An evaluation of the tourist resources of South Africa*, Col. Etudes et Memoires

Formica, S. & Uysal, M. (2006). Destination attractiveness based on supply and demand evaluations: an analytical framework, *Journal of Travel Research,* Vol. 44(4): 418-430.

Iatu, C. & Bulai, M. (2011). New approach in evaluation tourism attractiveness in the region of Moldavia (Romania), *International Journal of Energy and Environment,* Vol. 5(2): 165-174. Kusen, E. & Tadej, P. (2003). Functional classification of tourism attractions, *Tourism Review* 51

Leno-Cerro, F. (1992). La evaluación del potencial turístico en un proceso de planificación: el

Leno-Cerro, F. (1993). *Técnicas de evaluación del potencial turístico*, Centro de Publicaciones,

López-Ochoa, E. & Lufin-Varas, M. (2010). *Recursos Turísticos regionales: rol de la hierarquía* 

Murphy, P. (1983). Tourism as Community Industry: An Ecological Model of Tourism

Padín, C. (2004). *El desarrollo endógeno local. Estudio de la actividad turística como forma de* 

Ritchie, J. & Crouch, G. (2005). *The competitive destination: a sustainable tourism perspective*, CABI

Ritchie, J., & Zins, M. (1978). Culture as determinant of the attractiveness of a tourism region.

RTAM (2004). Procura turística do Alto Minho, in *Boletim da Região de Turismo do Alto Minho*

Sheng, J. & Lo, A. (2010). Evaluating the Tourism Potential of Public Museums in Hangzhou: A Supply-Side Perspective. *Journal of Travel & Tourism Marketing,* Vol. 27(3): 287-305. Smith, S. (1987). The regional analysis of tourism resources. *Annals of Tourism Research* Vol.

Var, T., Beck, R. & Loftus, P. (1977). Determination of touristic attractiveness of the touristic

areas in British Columbia. *Journal of Travel Research,* Vol. 15(3): 23-29.

Economía Aplicada, Universidad de Vigo, Doctoral thesis not published. Pardellas, X. et al. (2005). Competitividade e innovación no sector turístico: unha nova

*Estudos Estratéxicos do Eixo Atlântico – Libro IV,* Eixo Atlântico, Ourense. Pardellas, X. & Padín, C. (2001). El patrimonio etnográfico y el desarrollo local: el Baixo Miño

*internacional como potenciador de sus áreas vecinas*, Instituto de Economía Aplicada Regional – IDEAR, Observatorio de Turismo Regional de Autofagasta OTRA,

*aprovechamiento de los recursos: aplicación al caso del Baixo Miño*, Departamento de

oportunidade de avaliación dos recursos endóxenos, in Souto, X. *et al* (coord.), *II* 

como destino turístico en Galicia, *Proceedings of IV Congreso de Turismo,* Universidad y

Defert (1966). *La localisation touristique: problèmes théoriques et pratiques*, Gurten, Berna.

(44), Centre de Hautes Etudes Touristiques, Aix-en Provence.

Gunn, C.A. (1988). *Tourism Planning*. Taylor and Francis: New York.

Canal de Castilla, *Estudios Turísticos,* Vol. 16: 49-85.

Ministerio de Industria, Comercio i Turismo, Madrid.

Universidad Católica del Norte, Chile (Working Paper);

Development, *Tourism Management,* Vol. 16(3): 180-193;

*come e perché. Modelo di recerca geografica e psicologica. Il territorio Varesino*, , ASK

**9. References** 

Edizioni, Varese.

(4): 427-442.

Empresa*,* Abril, Castellón.

*Annals of Tourism Research,* Vol. 5(2): 252-267.

Vera, F. (Coord.) (1997), *Análisis territorial del turismo*, Ariel, Barcelona.

Publishing, Oxon.

Vol. 10: 2-11.

14(2):254-273.

#### **1.1 Importance of the coastal tourism and urban construction industries in Puerto Rico**

Characterized by a very high biodiversity that include some of the richest, productive, and fragile ecosystems on earth, tropical coastal areas represent the transitional zone between the land and sea (Cenacchi, 2010). Easy access to these coastal and marine resources, in combination with their natural allure, has made coastal resources highly vulnerable to tourism, population growth, and urban expansion pressures. More than half of today's world population lives in coastal areas (within 200 km from the sea) and this number is on the rise (Hinrichsen, 1998; Creel, 2003). In the particular case of the Commonwealth of Puerto Rico (PR) (Figure 1), about 70% of the island's population of 3.7 million live within close proximity to the sea on municipalities that lie adjacent to the coast (U.S. Census Bureau, 2010). Coastal areas are also those which are most visited by tourists, often presenting the most important economic activity. In the Insular Caribbean for example, tourism is one of the premier economic activities. The construction sector and tourism are two of the most important economic drivers in PR (PRTC, 2008, 2009). Tourism is the largest

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

mountainous areas (Ewel & Whitmore, 1973).

**1.2 Information gaps and objectives** 

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 359

(Dominican Republic and Haiti), and Jamaica (Figure 1). It roughly measures 176 x 62 km, and has about 432 km of coasts. Its population in 2010 was determined at 3.7 millions, a 2.2% reduction in comparison to 2000, which was largely the result of migration of residents to continental U.S. due to the recent economic crisis. The topography of PR can be categorized into three main provinces: the interior-central mountainous region peaking at 1,388 m, the karst province, and the coastal valleys (Monroe, 1977). The continuous influence of the easterly trade winds and the PR's geographic location, and topography, generate a somewhat varied maritime sub-tropical climatological canvas across the island. Monthly minimum and maximum temperatures fluctuate little (~4C) between the relatively cooler months and the warmer summer months, but variations of up to ~9C can be expected at any time between the warmer coastal valleys and the relatively cooler mountainous areas (Colón, 1977). The average annual rainfall is approximately 177 cm, but it may fluctuate from roughly 80 cm in the dry southwestern corner of the island up to about 260 cm in the northeast and western-interior regions (Colón, 1977). The diversity of climatological and topographical conditions have given rise to a six life zones ranging from dry sub-tropical forests in some coastal valleys to rain forests in the higher altitude

Many examples of inadequate approaches implemented by the local tourism and urban development sectors may be cited in PR. These include unprecedented planning strategies and policy changes recently implemented by the local government that may make these practices far from sustainable. Many of these must also be relevant to other tropical island nations and will be discussed in this chapter. We have identified the following: (1) *Old-style, non-participatory, top-down approaches* – tourism and urban housing projects being planned and executed without meaningful participation of local communities (Equations, 2003); (2) *Significant permanent negative environmental impacts* – projects built on top of or immediately adjacent to ecologically sensitive habitats, impacts to threatened or endangered species, destructive activities (i.e., dredging, blasting of coral reefs/seagrasses, wetland filling, deforestation, etc.); (3) *Socio-economic degradation* – globalized, top-down approaches of tourism and urban development has often resulted in social and economic marginalization of base communities, increasing unemployment, crime (Diedrich, 36 2006), drug abuse, prostitution (Cabezas, 2009; Padilla, 2007), child abuse (Equation, 2009), declining quality of life, and impoverished livelihoods; (4) *Lax regulations* – local governments derogate stringent zoning and planning regulations, implement flexible environmental standards and establish fast tracking procedures to facilitate permitting processes without proper evaluation that often favor private interests often over public interests; (5) *Non-sustainable operations* – the only model envisioned by local governments as an expected tool against economic crisis is largely based on a non-sustainable approach (i.e., focused on construction on sensitive sites, rapid revenue often at the expense of the environment, very limited revenue to local communities); (6) *Decision-making processes with significant conflicts of interests and corruption* in many instances government contracted consultants or regulatory agency key personnel are/were also consultants of project developers, or instances where project developers are also significant economic supporters of political parties; (7) *Revenue leakage* – Large portions of the economic revenue of the massive tourism industry often end up on a large transnational company far from the local community; (8) *Construction is often envisioned as the* 

expanding industry that has substantially contributed to increase employment rates around the world, has represented a significant source of revenue (WTTC, 2005, 2011), and is projected to keep expanding over the next decade. The total number of visitors in PR increased from 4.6 million visitors in 1999 to nearly 4.9 million in 2010 (PRTC, 2011). The number of tourists staying on hotels increased by 28% between 1999 and 2010. Total tourism-related employment increased from 30,225 in 1985 to 54,656 in 2010, or by a factor of 81%. The total amount of employees directly working on hotels increased from 7,300 in 1985 to 12,800 in 2010, or a magnitude of 75%. Overall hotel room availability increased by a factor of 27%, from 11,061 in 1999 to 14,076 during 2010. Overall number of hotel facilities increased by a factor of 15%, from 137 in 1999 to 158 during 15 2010. This has evidently triggered a recent large boom in construction of tourism facilities, but also has launched a major increase in urban development along coastal zones, often intermingled with tourism facilities targeting almost exclusively the upper economic classes.

Fig. 1. Geographic location and subdivision of Puerto Rico's tourism regions.

The commonwealth of PR has become an interesting case study of tourism and urban development impacts on a tropical island scenario due to its socio-politic relationship with the United States (U.S.), and its advantageous socio-economic position relation to other Caribbean nations. Also, the local governing bodies on the island have largely claimed that current local tourism development trends are sustainable, but this claim is yet to be fairly tested. PR has embraced a globalized non-sustainable approach of coastal tourism and urban development that include unprecedented planning strategies and policy moves, with poorly addressed long-term environmental and socio-economic impacts.

PR is a subtropical island archipelago located in the northeastern boundary of the Caribbean Sea (18N, 66W). It is the smallest of the Greater Antilles following Cuba, La Hispaniola (Dominican Republic and Haiti), and Jamaica (Figure 1). It roughly measures 176 x 62 km, and has about 432 km of coasts. Its population in 2010 was determined at 3.7 millions, a 2.2% reduction in comparison to 2000, which was largely the result of migration of residents to continental U.S. due to the recent economic crisis. The topography of PR can be categorized into three main provinces: the interior-central mountainous region peaking at 1,388 m, the karst province, and the coastal valleys (Monroe, 1977). The continuous influence of the easterly trade winds and the PR's geographic location, and topography, generate a somewhat varied maritime sub-tropical climatological canvas across the island. Monthly minimum and maximum temperatures fluctuate little (~4C) between the relatively cooler months and the warmer summer months, but variations of up to ~9C can be expected at any time between the warmer coastal valleys and the relatively cooler mountainous areas (Colón, 1977). The average annual rainfall is approximately 177 cm, but it may fluctuate from roughly 80 cm in the dry southwestern corner of the island up to about 260 cm in the northeast and western-interior regions (Colón, 1977). The diversity of climatological and topographical conditions have given rise to a six life zones ranging from dry sub-tropical forests in some coastal valleys to rain forests in the higher altitude mountainous areas (Ewel & Whitmore, 1973).

#### **1.2 Information gaps and objectives**

358 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

expanding industry that has substantially contributed to increase employment rates around the world, has represented a significant source of revenue (WTTC, 2005, 2011), and is projected to keep expanding over the next decade. The total number of visitors in PR increased from 4.6 million visitors in 1999 to nearly 4.9 million in 2010 (PRTC, 2011). The number of tourists staying on hotels increased by 28% between 1999 and 2010. Total tourism-related employment increased from 30,225 in 1985 to 54,656 in 2010, or by a factor of 81%. The total amount of employees directly working on hotels increased from 7,300 in 1985 to 12,800 in 2010, or a magnitude of 75%. Overall hotel room availability increased by a factor of 27%, from 11,061 in 1999 to 14,076 during 2010. Overall number of hotel facilities increased by a factor of 15%, from 137 in 1999 to 158 during 15 2010. This has evidently triggered a recent large boom in construction of tourism facilities, but also has launched a major increase in urban development along coastal zones, often intermingled with tourism

facilities targeting almost exclusively the upper economic classes.

Fig. 1. Geographic location and subdivision of Puerto Rico's tourism regions.

poorly addressed long-term environmental and socio-economic impacts.

The commonwealth of PR has become an interesting case study of tourism and urban development impacts on a tropical island scenario due to its socio-politic relationship with the United States (U.S.), and its advantageous socio-economic position relation to other Caribbean nations. Also, the local governing bodies on the island have largely claimed that current local tourism development trends are sustainable, but this claim is yet to be fairly tested. PR has embraced a globalized non-sustainable approach of coastal tourism and urban development that include unprecedented planning strategies and policy moves, with

PR is a subtropical island archipelago located in the northeastern boundary of the Caribbean Sea (18N, 66W). It is the smallest of the Greater Antilles following Cuba, La Hispaniola Many examples of inadequate approaches implemented by the local tourism and urban development sectors may be cited in PR. These include unprecedented planning strategies and policy changes recently implemented by the local government that may make these practices far from sustainable. Many of these must also be relevant to other tropical island nations and will be discussed in this chapter. We have identified the following: (1) *Old-style, non-participatory, top-down approaches* – tourism and urban housing projects being planned and executed without meaningful participation of local communities (Equations, 2003); (2) *Significant permanent negative environmental impacts* – projects built on top of or immediately adjacent to ecologically sensitive habitats, impacts to threatened or endangered species, destructive activities (i.e., dredging, blasting of coral reefs/seagrasses, wetland filling, deforestation, etc.); (3) *Socio-economic degradation* – globalized, top-down approaches of tourism and urban development has often resulted in social and economic marginalization of base communities, increasing unemployment, crime (Diedrich, 36 2006), drug abuse, prostitution (Cabezas, 2009; Padilla, 2007), child abuse (Equation, 2009), declining quality of life, and impoverished livelihoods; (4) *Lax regulations* – local governments derogate stringent zoning and planning regulations, implement flexible environmental standards and establish fast tracking procedures to facilitate permitting processes without proper evaluation that often favor private interests often over public interests; (5) *Non-sustainable operations* – the only model envisioned by local governments as an expected tool against economic crisis is largely based on a non-sustainable approach (i.e., focused on construction on sensitive sites, rapid revenue often at the expense of the environment, very limited revenue to local communities); (6) *Decision-making processes with significant conflicts of interests and corruption* in many instances government contracted consultants or regulatory agency key personnel are/were also consultants of project developers, or instances where project developers are also significant economic supporters of political parties; (7) *Revenue leakage* – Large portions of the economic revenue of the massive tourism industry often end up on a large transnational company far from the local community; (8) *Construction is often envisioned as the* 

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

resulted in the creation of the first private artificial beach in the island.

is mostly seen as a deterrent to economic development.

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 361

also included the construction of a boardwalk on the water and an underwater steel fence to prevent sharks and barracudas to access the public bathing beach. Important social events were celebrated on the area for several decades. Development of the Escambrón Beach Club also triggered further tourism development on adjacent coastal lands. The luxury Normandie Hotel, the first major art-deco style hotel building on the island, was opened in 1939 adjacent to the Escambrón Beach and to the SJNC. Simultaneously, there was also the construction of significant urbanized areas on the metropolitan area of San Juan, as well as an increasing number of secondary beach homes built by wealthy families across different coastal municipalities of the island, such as Dorado, Vega Baja and Arecibo, along the northern coast. What is peculiar was that this occurred during the peak of the Great Depression. By that time agriculture had shut down significantly on the island and there was a lot of social and political turmoil. Hotel construction and tourism-related development slowed down during World War II and remained so while important political and socio-economic transitions that lead to the declaration of PR as a Commonwealth of the U.S. were taking place. Then, the emblematic Caribe Hilton Hotel, one of the most important hotels existing in PR, was opened in 1949. Historical aerial image analysis suggest that its construction involved also for the first time extensive filling of adjacent coral reef and seagrass bottoms to expand the coastal lands and build part of the hotel facilities. It also

There was a second boom in the tourism and urban construction industries during the early 1950s, after World War II, when important socio-economic changes occurred in PR from an agricultural to an industrial economy with the establishment by the U.S. Congress of the Commonwealth of PR in 1952 and the establishment of the Operation Bootstrap (*Operación Manos a la Obra*) during the administration of then governor Luis Muñoz-Marín (1948-1964). Operation Bootstrap promoted industrialization through several phases: (1) labor-intensive manufacturing; (2) petro-chemical industrialization; and (3) rapid establishment of pharmaceutical industries protected under now extinct federal tax exemptions (Berman-Santana, 1996). Berman-Santana (1996) also established that "one of PR's most important industrial recruitment tools was the less stringent enforcement of environmental protection laws than on the U.S. mainland". According to Dietz (1986), "Operation Bootstrap from its beginning was based, at least implicitly, on the assumption that self-interested behavior does lead to public benefit, and on the further assumption that economic growth benefits all classes and groups – i.e., the 'trickle-down' theory that the benefits of a growing output gradually spread throughout the social hierarchy". Tourism and urban construction impacts on coastal areas in PR have been an expression of this. Benefits have been just measured in terms of economic parameters, while ecological degradation plays an insignificant role and

Tourism was kind of mixed during 1950s and 1960s in between booming construction as it was needed to foment these industries by allowing investors to come to the island and be willing to put their money down. As a consequence, several foreign investors acquired extensive coastal lands and initiated the construction of new hotel complexes in Dorado (west of San Juan) and Fajardo (northeast PR). Also, one of the most dramatic coastal development socio-economic, cultural and political controversies initiated during the 1960s with tourism development projects that were proposed for Piñones Ward in the municipality of Loíza, east of San Juan, right in the midst of a traditionally underserved community, a case study discussed below. Then, following the 1970s, there was also a

*solution to economic constriction* – Construction if often synonymized as progress leading to rapid project approvals without adequate planning and environmental impact evaluations, and to project construction on inadequate sites (i.e., sensitive habitats, soils prone to landslides, lands prone to flooding or vulnerable to coastal flooding or tsunamis); and (9) *Climate change impacts are still largely neglected by many local governments as a significant threat* – many nations, including the Commonwealth of PR, are still yet to adequately accept and much less address the threats faced by increasing climate-related impacts, particularly to coastal habitats where the vast majority of the tourism activities and large housing construction occur. Many of these factors, with very few exceptions, have been poorly addressed in the literature as many could be often considered "taboos" by the tourism and urban construction industries, as well as by local governments that do not want to upset the both industries and risk the possibility of maintaining wealthy revenues, even though the private sector of both industries often obtain the largest economic benefits in comparison to that obtained by local governments.

The main objective of this chapter was to identify most information gaps associated to the above topics in a context of a small over-populated Caribbean island, and in a context of the projected climate change impacts. It was also aimed at reviewing some of the existing literature regarding the impact of tourism and urban development on a tropical coastal scenario and discussing some of the most significant case studies and lesson-learning experiences of the historical non-sustainable approaches used by the tourism and housing construction industry in PR. We also examined some of the current controversies regarding the proposed coastal tourism and housing development expansion strategy in PR, as well as some of the most significant climate-related threats. Finally, we addressed the need to implement an alternative sustainable coastal tourism and housing development model, and made specific recommendations for reviewing and modifying existing strategies in a way that could also be helpful for other tropical countries that share similar situations.

#### **2. Case studies from Puerto Rico: A brief history of coastal tourism and urban development**

#### **2.1 The early stages: 1910s to 1960s**

Coastal tourism and urban development have represented an important and continuously growing economic activity in PR since the late 1910s. However, agriculture following the U.S. takeover of the island in 1898 was the most significant economic activity during the early 20th century. The expansion of coastal tourism offerings in PR was accompanied by a massive urban expansion as the main economic model of the island switched from an agriculture-based economy during the first half of the XX century to an industrial-based one. In year 1919 the Condado Vanderbilt Hotel was built in the capital city of San Juan right in front of the Condado Beach area, representing the first major turning point in the tourism and urban residential boom that occurred in the island. The second most important turning point was the opening of the San Juan Nautical Club (SJNC) in 1930 in the adjacent San Juan Bay. This was the first private marina in PR. The third major episode in coastal tourism development in PR was the opening of the Escambrón Beach Club during 1932. The Escambrón Beach Club was a private club located right at an important public beach in the metropolitan area of San Juan. It involved the construction of the first known breakwater to protect the shoreline from typical strong wave action of the northern coast of the island. It

*solution to economic constriction* – Construction if often synonymized as progress leading to rapid project approvals without adequate planning and environmental impact evaluations, and to project construction on inadequate sites (i.e., sensitive habitats, soils prone to landslides, lands prone to flooding or vulnerable to coastal flooding or tsunamis); and (9) *Climate change impacts are still largely neglected by many local governments as a significant threat* – many nations, including the Commonwealth of PR, are still yet to adequately accept and much less address the threats faced by increasing climate-related impacts, particularly to coastal habitats where the vast majority of the tourism activities and large housing construction occur. Many of these factors, with very few exceptions, have been poorly addressed in the literature as many could be often considered "taboos" by the tourism and urban construction industries, as well as by local governments that do not want to upset the both industries and risk the possibility of maintaining wealthy revenues, even though the private sector of both industries often obtain the largest economic benefits in comparison to

The main objective of this chapter was to identify most information gaps associated to the above topics in a context of a small over-populated Caribbean island, and in a context of the projected climate change impacts. It was also aimed at reviewing some of the existing literature regarding the impact of tourism and urban development on a tropical coastal scenario and discussing some of the most significant case studies and lesson-learning experiences of the historical non-sustainable approaches used by the tourism and housing construction industry in PR. We also examined some of the current controversies regarding the proposed coastal tourism and housing development expansion strategy in PR, as well as some of the most significant climate-related threats. Finally, we addressed the need to implement an alternative sustainable coastal tourism and housing development model, and made specific recommendations for reviewing and modifying existing strategies in a way

that could also be helpful for other tropical countries that share similar situations.

**2. Case studies from Puerto Rico: A brief history of coastal tourism and** 

Coastal tourism and urban development have represented an important and continuously growing economic activity in PR since the late 1910s. However, agriculture following the U.S. takeover of the island in 1898 was the most significant economic activity during the early 20th century. The expansion of coastal tourism offerings in PR was accompanied by a massive urban expansion as the main economic model of the island switched from an agriculture-based economy during the first half of the XX century to an industrial-based one. In year 1919 the Condado Vanderbilt Hotel was built in the capital city of San Juan right in front of the Condado Beach area, representing the first major turning point in the tourism and urban residential boom that occurred in the island. The second most important turning point was the opening of the San Juan Nautical Club (SJNC) in 1930 in the adjacent San Juan Bay. This was the first private marina in PR. The third major episode in coastal tourism development in PR was the opening of the Escambrón Beach Club during 1932. The Escambrón Beach Club was a private club located right at an important public beach in the metropolitan area of San Juan. It involved the construction of the first known breakwater to protect the shoreline from typical strong wave action of the northern coast of the island. It

that obtained by local governments.

**urban development** 

**2.1 The early stages: 1910s to 1960s** 

also included the construction of a boardwalk on the water and an underwater steel fence to prevent sharks and barracudas to access the public bathing beach. Important social events were celebrated on the area for several decades. Development of the Escambrón Beach Club also triggered further tourism development on adjacent coastal lands. The luxury Normandie Hotel, the first major art-deco style hotel building on the island, was opened in 1939 adjacent to the Escambrón Beach and to the SJNC. Simultaneously, there was also the construction of significant urbanized areas on the metropolitan area of San Juan, as well as an increasing number of secondary beach homes built by wealthy families across different coastal municipalities of the island, such as Dorado, Vega Baja and Arecibo, along the northern coast. What is peculiar was that this occurred during the peak of the Great Depression. By that time agriculture had shut down significantly on the island and there was a lot of social and political turmoil. Hotel construction and tourism-related development slowed down during World War II and remained so while important political and socio-economic transitions that lead to the declaration of PR as a Commonwealth of the U.S. were taking place. Then, the emblematic Caribe Hilton Hotel, one of the most important hotels existing in PR, was opened in 1949. Historical aerial image analysis suggest that its construction involved also for the first time extensive filling of adjacent coral reef and seagrass bottoms to expand the coastal lands and build part of the hotel facilities. It also resulted in the creation of the first private artificial beach in the island.

There was a second boom in the tourism and urban construction industries during the early 1950s, after World War II, when important socio-economic changes occurred in PR from an agricultural to an industrial economy with the establishment by the U.S. Congress of the Commonwealth of PR in 1952 and the establishment of the Operation Bootstrap (*Operación Manos a la Obra*) during the administration of then governor Luis Muñoz-Marín (1948-1964). Operation Bootstrap promoted industrialization through several phases: (1) labor-intensive manufacturing; (2) petro-chemical industrialization; and (3) rapid establishment of pharmaceutical industries protected under now extinct federal tax exemptions (Berman-Santana, 1996). Berman-Santana (1996) also established that "one of PR's most important industrial recruitment tools was the less stringent enforcement of environmental protection laws than on the U.S. mainland". According to Dietz (1986), "Operation Bootstrap from its beginning was based, at least implicitly, on the assumption that self-interested behavior does lead to public benefit, and on the further assumption that economic growth benefits all classes and groups – i.e., the 'trickle-down' theory that the benefits of a growing output gradually spread throughout the social hierarchy". Tourism and urban construction impacts on coastal areas in PR have been an expression of this. Benefits have been just measured in terms of economic parameters, while ecological degradation plays an insignificant role and is mostly seen as a deterrent to economic development.

Tourism was kind of mixed during 1950s and 1960s in between booming construction as it was needed to foment these industries by allowing investors to come to the island and be willing to put their money down. As a consequence, several foreign investors acquired extensive coastal lands and initiated the construction of new hotel complexes in Dorado (west of San Juan) and Fajardo (northeast PR). Also, one of the most dramatic coastal development socio-economic, cultural and political controversies initiated during the 1960s with tourism development projects that were proposed for Piñones Ward in the municipality of Loíza, east of San Juan, right in the midst of a traditionally underserved community, a case study discussed below. Then, following the 1970s, there was also a

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

(Martinuzi et al, 2009).

coastal urban coastal rural mountain urban mountain rural

 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000

**Population**

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 363

increased environmental impacts to adjacent estuarine, coastal and marine habitats

 Fig. 2. (A) PR wide trends in population broken down by the number of people living in urban or rural areas and by location relative to the coastline. Population defined as 'coastal' refers to that living in a municipality located along the island's coastline, while those defined

**Number of dwellings**

 - 200,000 400,000 600,000 800,000 1,000,000 1,200,000

1940 1950 1960 1970 1980 1990 2000 2010

coastal mountain

**Year**

as 'mountain' are located away from the coast; (B) Time trends in the total number of dwellings in PR from 1950 to 2000. Dwellings defined as 'coastal' refer to those built on

Fig. 3. Time trends in the proportion of urban land in PR. *RG*: Ramos-González (2001)- Northeastern PR; *L et al*: Lugo et al. (1996)-Guánica; *RS et al*.: Ramos-Scharrón et al (in prep)- Río Fajardo Watershed; *H et al*.: Helmer et al. (2002)- Island-wide assessment; & *M et al*:

While land development on coastal zones is evidently considered to be more prone to induce direct adverse effects on coastal and marine resources, the relatively small size of the watersheds in PR imply that all activities throughout the entire island may indirectly affect downslope marine resources through issues related to water quality. The quality of freshwater that gets eventually delivered to coastal waters is inevitably related to the intensity and extensiveness of land use. Water quality has been found to be inversely correlated with economic development, population density, land use patterns, and other socioeconomic indicators (Biagi, 1965). Therefore, the deterioration of coastal water quality in PR is presumed to have been initiated in the early to mid-1800's when an island-wide deforestation effort cleared the land for various uses including timber extraction, cattle

1930 1940 1950 1960 1970 1980 1990 2000 2010

**Year**

Martinuzzi et al. (2007)- Island-wide assessment.

0% 5% 10% 15% 20% 25% 30% 35%

**Proportion of urban land**

municipalities with a coastline, while those declared as 'mountain' do not.

RG L et al. RS et al. H et al. M et al.

1940 1950 1960 1970 1980 1990 2000 2010

**Year**

significant increase in "internal tourism" activities, which refers to tourism activities carried out by island residents within the PR archipelago. One of the key drivers of increasing urban construction along coastal areas in PR mostly represents internal tourism in the form of secondary homes used for short-term vacationing during weekends and special holidays. Coastal towns such as Dorado, Lajas, and Rincón, are an example of this.

#### **2.2 Changes in political and socio-economic models: The first significant turn of events in urban construction**

The designation of the Commonwealth status of PR represented significant political changes that impacted the socio-economic development of the island. The economic development plan that followed the Great Depression and World War II had some very important consequences in the spatial distribution of the island's population and its land use patterns. An often mentioned repercussion of PR's industrialization program was an abandonment of land for agricultural production and a migration of people from rural areas in the countryside to urban centers (Figure 2a) (Grau et al., 2003). According to the US Census Data, (http://www.censo.gobierno.pr/), while 60% of the island's population lived in rural areas in 1950, these areas came to constitute only 6% of the population in 2000. The proportion of the island's population that lives in municipalities along the island's coastline has increased to roughly 70% from 1950 to 2000. Census data shows that most population growth in PR has occurred in urban centers on coastal municipalities (Figure 3). Whereas coastal urban centers contained roughly 34% of the total population in 1950, the proportion of the population in these areas almost doubled to 67% by 2000. The growth of the urban sector of the population in PR is a combined result of actual displacement of the population to pre-existing urban areas and a consequence of the new high density urban development patterns which have turned what were previously considered rural communities into urbanized areas.

The total number of dwellings (housing units or '*viviendas*' in Spanish) in PR showed a net growth of almost 965,000 units between 1950 and 2000. Roughly 71% of this net increase in dwellings occurred in coastal towns (Figure 2b). Coastal towns had a total of 683,600 more units in 2000 than in 1950, while mountain towns showed a net increase of 281,300 units. The island-wide increase in the rate of growth of individual units was roughly 6,840 additional dwellings per year between 1950 and 1960. This rate significantly increased and peaked between 1970 and 1980 at 28,000 units per year. Rates between 1980 and 2000 remained high at values ranging between 19,500 and 23,000 units per year. The rate of growth in dwellings on coastal areas has been consistently higher than in mountainous areas since 1950, where growth rates have remained between 5,870 and 19,550 units per year. Remote sensing analyses conducted in various parts of PR corroborate the increased rate of growth suggested by the housing census data. Island-wide assessments suggest a slight but still significant increase in urban areas from 10.8% to 11.4% between 1991 and 2000 (Helmer et al., 2002; Matinuzzi et al., 2007). Meanwhile, smaller scale but longer-term studies conducted in the northeastern and southwestern portions of the island suggest a consistent increase in urbanized area over the last several decades. These smaller scale studies indicate that by the early to mid-1990's urbanized zones covered between 3% and 32% of the study areas (Figure 3) (Lugo et al., 1996; Ramos-González, 2001; Ramos-Scharrón et al., in prep.). Studies consistently cite the preferential use of the lowland, low-relief coastal valley areas previously used for agricultural activities and pasture for new urban development (e.g., Helmer, 2004; Torres-Marrero, 2003). In the long run, such trends have also resulted in

significant increase in "internal tourism" activities, which refers to tourism activities carried out by island residents within the PR archipelago. One of the key drivers of increasing urban construction along coastal areas in PR mostly represents internal tourism in the form of secondary homes used for short-term vacationing during weekends and special holidays.

**2.2 Changes in political and socio-economic models: The first significant turn of** 

The designation of the Commonwealth status of PR represented significant political changes that impacted the socio-economic development of the island. The economic development plan that followed the Great Depression and World War II had some very important consequences in the spatial distribution of the island's population and its land use patterns. An often mentioned repercussion of PR's industrialization program was an abandonment of land for agricultural production and a migration of people from rural areas in the countryside to urban centers (Figure 2a) (Grau et al., 2003). According to the US Census Data, (http://www.censo.gobierno.pr/), while 60% of the island's population lived in rural areas in 1950, these areas came to constitute only 6% of the population in 2000. The proportion of the island's population that lives in municipalities along the island's coastline has increased to roughly 70% from 1950 to 2000. Census data shows that most population growth in PR has occurred in urban centers on coastal municipalities (Figure 3). Whereas coastal urban centers contained roughly 34% of the total population in 1950, the proportion of the population in these areas almost doubled to 67% by 2000. The growth of the urban sector of the population in PR is a combined result of actual displacement of the population to pre-existing urban areas and a consequence of the new high density urban development patterns which have turned

The total number of dwellings (housing units or '*viviendas*' in Spanish) in PR showed a net growth of almost 965,000 units between 1950 and 2000. Roughly 71% of this net increase in dwellings occurred in coastal towns (Figure 2b). Coastal towns had a total of 683,600 more units in 2000 than in 1950, while mountain towns showed a net increase of 281,300 units. The island-wide increase in the rate of growth of individual units was roughly 6,840 additional dwellings per year between 1950 and 1960. This rate significantly increased and peaked between 1970 and 1980 at 28,000 units per year. Rates between 1980 and 2000 remained high at values ranging between 19,500 and 23,000 units per year. The rate of growth in dwellings on coastal areas has been consistently higher than in mountainous areas since 1950, where growth rates have remained between 5,870 and 19,550 units per year. Remote sensing analyses conducted in various parts of PR corroborate the increased rate of growth suggested by the housing census data. Island-wide assessments suggest a slight but still significant increase in urban areas from 10.8% to 11.4% between 1991 and 2000 (Helmer et al., 2002; Matinuzzi et al., 2007). Meanwhile, smaller scale but longer-term studies conducted in the northeastern and southwestern portions of the island suggest a consistent increase in urbanized area over the last several decades. These smaller scale studies indicate that by the early to mid-1990's urbanized zones covered between 3% and 32% of the study areas (Figure 3) (Lugo et al., 1996; Ramos-González, 2001; Ramos-Scharrón et al., in prep.). Studies consistently cite the preferential use of the lowland, low-relief coastal valley areas previously used for agricultural activities and pasture for new urban development (e.g., Helmer, 2004; Torres-Marrero, 2003). In the long run, such trends have also resulted in

Coastal towns such as Dorado, Lajas, and Rincón, are an example of this.

what were previously considered rural communities into urbanized areas.

**events in urban construction** 

increased environmental impacts to adjacent estuarine, coastal and marine habitats (Martinuzi et al, 2009).

Fig. 2. (A) PR wide trends in population broken down by the number of people living in urban or rural areas and by location relative to the coastline. Population defined as 'coastal' refers to that living in a municipality located along the island's coastline, while those defined as 'mountain' are located away from the coast; (B) Time trends in the total number of dwellings in PR from 1950 to 2000. Dwellings defined as 'coastal' refer to those built on municipalities with a coastline, while those declared as 'mountain' do not.

Fig. 3. Time trends in the proportion of urban land in PR. *RG*: Ramos-González (2001)- Northeastern PR; *L et al*: Lugo et al. (1996)-Guánica; *RS et al*.: Ramos-Scharrón et al (in prep)- Río Fajardo Watershed; *H et al*.: Helmer et al. (2002)- Island-wide assessment; & *M et al*: Martinuzzi et al. (2007)- Island-wide assessment.

While land development on coastal zones is evidently considered to be more prone to induce direct adverse effects on coastal and marine resources, the relatively small size of the watersheds in PR imply that all activities throughout the entire island may indirectly affect downslope marine resources through issues related to water quality. The quality of freshwater that gets eventually delivered to coastal waters is inevitably related to the intensity and extensiveness of land use. Water quality has been found to be inversely correlated with economic development, population density, land use patterns, and other socioeconomic indicators (Biagi, 1965). Therefore, the deterioration of coastal water quality in PR is presumed to have been initiated in the early to mid-1800's when an island-wide deforestation effort cleared the land for various uses including timber extraction, cattle

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 365

(Gellis et al., 2006; Smith & Abruña, 1955), erosion rates on barren surfaces typical of construction sites and unpaved roads may represent a one to a four-order magnitude increase relative to background rates (Gellis et al., 2006; Ramos-Scharrón, 2010). Therefore, the combination of a very high road density network that increases the incidence of landslides accompanied by a fast pace of land transformation to urban spaces suggests that current sediment yield rates may be among the highest ever experienced on the island. The manifestation of peak sediment yield rates during a period of fast urban expansion has been documented elsewhere (Wolman, 1967), and it appears to be supported locally by the relatively high suspended sediment yields documented for the island (570–1,900 mg/km2/yr) (Larsen & Webb, 2009) and the marine sedimentation record obtained at specific locations (Ryan et al., 2008). Therefore, the combined impacts of increased construction activities, not only along coastal areas, but also across the entire island, with the lack of implementation of the existing land use plans, and the poor implementation of mandatory erosion-sedimentation control regulations have resulted in long-term water

quality degradation by sediments and on declining conditions of coastal ecosystems.

Just minutes away from the San Juan metropolitan area of PR, lies the traditionally underserved community of Piñones with its unique array of cultural, natural, archeological, gastronomic, and recreational resources. With a population of approximately 2,400 residents, Piñones is home to generations of families who have lived in this community for more than 400 years. It extends through 12 km of shoreline and 8,000 acres under the municipality of Loíza. Piñones reflect the richness of the island's Afro-Caribbean culture and traditions, especially in the form of music, food and crafts. It also has an extraordinary diversity of coastal and marine ecosystems, including the largest continuous mangrove forest in PR, estuarine lagoons, channels, swamps and marshes, seasonally bioluminescent waters, native coastal forests, sandy beaches, sand dune formations, coral reefs, and seagrass beds. All these ecosystems serve as habitat for numerous threatened and endangered species. Piñones is also the custodian of more than 120 archeological sites, some of them considered one of PR's oldest archeological remains. The community of Piñones has been historically marginalized by the state and municipal governments through the lack of

Government land use policies toward Piñones gained a new dimension in the 1950s. The industrialization process fostered by Operation Bootstrap (i.e., 'Operación Manos a la Obra') was combined with an aggressive tourism development strategy, especially in the adjacent San Juan metropolitan area to attend the lodging needs of recently established industrial companies as well as the incipient increase in the number of recreational tourists visiting PR. O One of the first impacts was the extraction of the large sand dunes in Piñones during the 1950s to use the material as fill for the wetlands just south of the Piñones' lagoons to build the Luis Muñoz Marín International Airport. The sand extracted from these 10 meter-high sand dunes was also used for the construction of various urbanizations in the metropolitan region adjacent to the coastal zone. This created a permanent problem of shoreline erosion and recurrent coastal flooding (Bush et al., 1995). At that time Piñones became the last frontier to conquer towards the east of the San Juan metropolitan area for residential and tourism purposes. The construction of various residential projects with water-access to the

**2.3 The Piñones case study: A 45-year struggle against massive tourism** 

provision of adequate government services (Guerrero, 2009).

grazing, and agricultural production (Birdsey & Weaver, 1987). Change of sovereignty at the turn of the 20th century from Spain to the U.S. favored the extensive use of all available land for massive sugar cane production under a progressively mechanized and more centralized system that favored the use of coastal valleys and wetlands (Dietz, 1986; Labadie-Eurite, 1949; Martinuzzi et al., 2009) and this resulted in its own new set of water pollutants (Biagi, 1968). Assisted by a deliberately deficient enforcement of environmental safeguards, socioeconomic and political development in PR following World War II explicitly encouraged a move towards industrialization at the expense of agricultural production (Dietz, 1986) and environmental deterioration (Berman-Santana, 1996; Concepción, 1988). Even though implementation of this new economic model allowed for the recuperation of an island-wide forest cover (Grau et al., 2003; Rudel et al., 2000), it also introduced its own new set of water quality issues (Hunter & Arbona, 1995) that have established a legacy of documented stress and detrimental effects on marine ecosystems in various parts of the PR archipelago, largely as a result of eutrophication and sedimentation impacts (e.g., Goenaga & Cintrón, 1979; Goenaga, 1991; Hernández-Delgado, 2005; Hernández-Delgado et al., 2010, Hernández-Delgado & Sandoz-Vera, 2011; Larsen & Webb, 2009; Loya, 1976).

Excess sediment delivery to coastal waters is considered one of the most important sources of stress affecting marine resources worldwide (Rogers, 1990). Among the various affected marine ecosystems, coral reefs stand out as they are particularly susceptible to increased sediment delivery rates (Fabricius, 2005; Rogers, 1990). Terrestrial sediments are considered as a major threat to PR's coral reef systems (Hernández-Delgado, 2005; Larsen & Webb, 2009). Land disturbance in PR associated to the deforestation that began in the 1820's and the extensive use of land for agriculture that lasted until the middle of the 20th century was responsible for significantly increasing the rate of soil erosion on the island through the combination of increased landslide activity and surface erosion (Larsen, 1997). The current geomorphic model for PR suggests that while some watersheds had streamflow regimes competent enough to effectively deliver the sediment into the sea, other catchments the stream capacity was insufficient to transport the sediment and this lead to sediment aggradation (i.e., deposition) which delayed delivery to watershed outlets. This model suggests that aggraded sediment is still being slowly delivered by the stream through geomorphic processes that include upland channel extension on headwater streams and channel widening and deepening adjustments along the lower elevation valleys (Clark & Wilcock, 2000). Therefore, it is believed that some of the sediment that is currently being delivered to coastal waters from some areas in PR is a legacy of cumulative effects that have continuously affected the behavior of watersheds over the last two centuries.

In addition to the legacy of previous land use practices and geomorphic responses, current land use activities are still responsible for increasing erosion and sediment yields to PR coastal waters. Increased delivery of sediments associated to road construction is a very important component in the sediment budget of mountainous areas of the island as roads tend to increase the propensity for slope failure and landsliding (Larsen & Parks, 1997; Larsen & Torres-Sánchez, 1997). Land clearing trends in support of the little remaining agriculture on the island and construction associated to urban sprawl and tourism stand out as some of the most important active sources of terrestrial sediment on the island. It is important to note that empirical research shows that while agricultural activities may induce a tenfold increase in hillslope-scale erosion rates relative to undisturbed conditions

grazing, and agricultural production (Birdsey & Weaver, 1987). Change of sovereignty at the turn of the 20th century from Spain to the U.S. favored the extensive use of all available land for massive sugar cane production under a progressively mechanized and more centralized system that favored the use of coastal valleys and wetlands (Dietz, 1986; Labadie-Eurite, 1949; Martinuzzi et al., 2009) and this resulted in its own new set of water pollutants (Biagi, 1968). Assisted by a deliberately deficient enforcement of environmental safeguards, socioeconomic and political development in PR following World War II explicitly encouraged a move towards industrialization at the expense of agricultural production (Dietz, 1986) and environmental deterioration (Berman-Santana, 1996; Concepción, 1988). Even though implementation of this new economic model allowed for the recuperation of an island-wide forest cover (Grau et al., 2003; Rudel et al., 2000), it also introduced its own new set of water quality issues (Hunter & Arbona, 1995) that have established a legacy of documented stress and detrimental effects on marine ecosystems in various parts of the PR archipelago, largely as a result of eutrophication and sedimentation impacts (e.g., Goenaga & Cintrón, 1979; Goenaga, 1991; Hernández-Delgado, 2005; Hernández-Delgado et al., 2010,

Hernández-Delgado & Sandoz-Vera, 2011; Larsen & Webb, 2009; Loya, 1976).

continuously affected the behavior of watersheds over the last two centuries.

In addition to the legacy of previous land use practices and geomorphic responses, current land use activities are still responsible for increasing erosion and sediment yields to PR coastal waters. Increased delivery of sediments associated to road construction is a very important component in the sediment budget of mountainous areas of the island as roads tend to increase the propensity for slope failure and landsliding (Larsen & Parks, 1997; Larsen & Torres-Sánchez, 1997). Land clearing trends in support of the little remaining agriculture on the island and construction associated to urban sprawl and tourism stand out as some of the most important active sources of terrestrial sediment on the island. It is important to note that empirical research shows that while agricultural activities may induce a tenfold increase in hillslope-scale erosion rates relative to undisturbed conditions

Excess sediment delivery to coastal waters is considered one of the most important sources of stress affecting marine resources worldwide (Rogers, 1990). Among the various affected marine ecosystems, coral reefs stand out as they are particularly susceptible to increased sediment delivery rates (Fabricius, 2005; Rogers, 1990). Terrestrial sediments are considered as a major threat to PR's coral reef systems (Hernández-Delgado, 2005; Larsen & Webb, 2009). Land disturbance in PR associated to the deforestation that began in the 1820's and the extensive use of land for agriculture that lasted until the middle of the 20th century was responsible for significantly increasing the rate of soil erosion on the island through the combination of increased landslide activity and surface erosion (Larsen, 1997). The current geomorphic model for PR suggests that while some watersheds had streamflow regimes competent enough to effectively deliver the sediment into the sea, other catchments the stream capacity was insufficient to transport the sediment and this lead to sediment aggradation (i.e., deposition) which delayed delivery to watershed outlets. This model suggests that aggraded sediment is still being slowly delivered by the stream through geomorphic processes that include upland channel extension on headwater streams and channel widening and deepening adjustments along the lower elevation valleys (Clark & Wilcock, 2000). Therefore, it is believed that some of the sediment that is currently being delivered to coastal waters from some areas in PR is a legacy of cumulative effects that have (Gellis et al., 2006; Smith & Abruña, 1955), erosion rates on barren surfaces typical of construction sites and unpaved roads may represent a one to a four-order magnitude increase relative to background rates (Gellis et al., 2006; Ramos-Scharrón, 2010). Therefore, the combination of a very high road density network that increases the incidence of landslides accompanied by a fast pace of land transformation to urban spaces suggests that current sediment yield rates may be among the highest ever experienced on the island. The manifestation of peak sediment yield rates during a period of fast urban expansion has been documented elsewhere (Wolman, 1967), and it appears to be supported locally by the relatively high suspended sediment yields documented for the island (570–1,900 mg/km2/yr) (Larsen & Webb, 2009) and the marine sedimentation record obtained at specific locations (Ryan et al., 2008). Therefore, the combined impacts of increased construction activities, not only along coastal areas, but also across the entire island, with the lack of implementation of the existing land use plans, and the poor implementation of mandatory erosion-sedimentation control regulations have resulted in long-term water quality degradation by sediments and on declining conditions of coastal ecosystems.

#### **2.3 The Piñones case study: A 45-year struggle against massive tourism**

Just minutes away from the San Juan metropolitan area of PR, lies the traditionally underserved community of Piñones with its unique array of cultural, natural, archeological, gastronomic, and recreational resources. With a population of approximately 2,400 residents, Piñones is home to generations of families who have lived in this community for more than 400 years. It extends through 12 km of shoreline and 8,000 acres under the municipality of Loíza. Piñones reflect the richness of the island's Afro-Caribbean culture and traditions, especially in the form of music, food and crafts. It also has an extraordinary diversity of coastal and marine ecosystems, including the largest continuous mangrove forest in PR, estuarine lagoons, channels, swamps and marshes, seasonally bioluminescent waters, native coastal forests, sandy beaches, sand dune formations, coral reefs, and seagrass beds. All these ecosystems serve as habitat for numerous threatened and endangered species. Piñones is also the custodian of more than 120 archeological sites, some of them considered one of PR's oldest archeological remains. The community of Piñones has been historically marginalized by the state and municipal governments through the lack of provision of adequate government services (Guerrero, 2009).

Government land use policies toward Piñones gained a new dimension in the 1950s. The industrialization process fostered by Operation Bootstrap (i.e., 'Operación Manos a la Obra') was combined with an aggressive tourism development strategy, especially in the adjacent San Juan metropolitan area to attend the lodging needs of recently established industrial companies as well as the incipient increase in the number of recreational tourists visiting PR. O One of the first impacts was the extraction of the large sand dunes in Piñones during the 1950s to use the material as fill for the wetlands just south of the Piñones' lagoons to build the Luis Muñoz Marín International Airport. The sand extracted from these 10 meter-high sand dunes was also used for the construction of various urbanizations in the metropolitan region adjacent to the coastal zone. This created a permanent problem of shoreline erosion and recurrent coastal flooding (Bush et al., 1995). At that time Piñones became the last frontier to conquer towards the east of the San Juan metropolitan area for residential and tourism purposes. The construction of various residential projects with water-access to the

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

lands that belonged to PFZ Properties Inc.

a solomonic solution towards all stakeholders (Mosse, 2004).

<sup>3</sup> *PFZ Properties Inc. v. Russell E. Train et. al.* [393 F. Supp. 1370 (D.D.C. 1975)]

Rico's Mangrove Systems (1978).

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 367

and the Environmental Quality Board (EQB) had approved the sitting permit and the environmental impact statement for PFZ's *Talega Basin* in 1974, the local government also started shifting its perspective towards Piñones by recognizing its ecological singularity. For example, the recently founded Department of Natural Resources published a number of scientific documents that stressed out the uniqueness, extensiveness, and fragility of the Piñones mangrove forest and critiqued the private development proposals that would significantly alter the ecosystem.2 In 1978, the PRPB designated Piñones as a Special Planning Area under the 1972 US Coastal Zone Management Act. It also approved other special designations that promoted natural resource conservation within Piñones, such as new areas designated as a Nature Reserve (1979), Critical Wildlife Area (1979), and proposed new areas to be acquired as a future Nature Reserve (1983), including part of the

During the early 1980s, a new series of residential and tourism development projects proposed in eastern Piñones started their permit acquisition processes, such as Proyecto Caribe from the development company Caribe Associates Ltd. In 1985, PFZ Properties Inc. presented a smaller scale version of its previous project with 3,556 residential and tourism units for government approval, as its 1974 project had been halted by a lawsuit that dragged for years with the U.S. Environmental Protection Agency regarding U.S. Clean Water Act violations.3 The tensions that resulted from the 1980s environment versus development debate regarding future land uses in Piñones moved former governor Rafael Hernández-Colon's administration (1984-1992) on February 1988 to conduct a land use planning exercise that would clearly identify the lands that could be developed and those that would be conserved. As such, the PRPB was charged with the responsibility of leading the development of the Piñones Special Planning Area's Land Use Plan. After seven years of public hearings and revisions between two different government administrations, the Piñones Special Planning Area's Land Use Plan was approved in 1995 under the administration of former governor Pedro Rosselló (1992-2000). Without a doubt, the government was expecting too much from a document that merely listed some community, natural resource, and tourism strategies and included as an appendix a land use zoning map. Based on the reality of the Piñones 20-year debate, the government should have promoted a participatory planning process immersed in conflict resolution to try to find true solution to this extensive debate, if one was available. In the end, government ended up doing what it was used to do, "interventions not implementation", claiming it had achieved

The 1995 Land Use Plan had the goal of "achieving the protection, conservation, and restoration of the different natural systems that compose the Planning Area, and at the same time, promote a limited and ordered ecological-tourism development" (PRPB, 1995: Preface). The state might have claimed this goal, but in essence what it ended up achieving was plotting in a map where hotels could be developed and establishing design and density criteria for constructions. Soon after the approval of the 1995 Land Use Plan and its new permit streamlining process, private companies presented new development proposals

2 The Department of Natural Resources' research studies included: Wildlife Management Proposal for the Piñones State Forest (1974); Unit Plan for the Management of the Piñones Forest (1974); The Master Plan for the Commonwealth Forests of Puerto Rico (Division of Forest Planning) (1976); and Puerto

Piñones lagoons and channels, such as Vistamar Marina in the municipality of Carolina, just east of San Juan, and the establishment of private marinas that required the dredging of La Torrecilla lagoon resulted in significant changes to the lagoon's water circulation, retention, salinity, and sedimentation levels.

During the early 1960s, the government of PR, through the PR Industrial Development Company (PRIDCO), the financial arm of the island's Economic Development Administration, acquired approximately 900 acres in the western part of Piñones to promote the development of massive tourism and recreation projects. Its plans, which included *A General Plan for the Boca de Cangrejos Area* of 1961 and *A Development Plan and Recommended Program for Finca Piñones* of 1968, proposed the construction of thousands of hotel rooms, a convention center, casinos, restaurants, golf courses, tennis courts, and Miami-style marinas throughout Piñones (Adams & Greeley, 1961; OPDAS, Inc., 1968). PRIDCO's investments in western Piñones raised expectations of potential large-scale development in the area fostering other private investors to acquire large tracts of land on the eastern part of Piñones to promote their own tourism and residential projects. As a result, private companies, such as PFZ Properties Inc., acquired more than 1,300 acres on the Monte Grande sector, within the eastern side of Piñones, in 1960. PRIDCO's plans identified Piñones residents as "squatters" and "invaders" that needed to be relocated to San Juan or other parts of the municipality of Loíza. Its plans even established measures to assure that residents were not allowed to construct new houses or conduct renovations within their homes; and were not permitted to inscribe the land title of their property by using the right to *usucapio (Giusti, 1994)*.1 In order to implement its plans, PRIDCO filed an injunction seeking to evict more than 200 families from the western part of Piñones in 1969. The residents responded with a countersuit, aided by the *pro-bono* entity *Servicios Legales de Puerto Rico* (Puerto Rico Legal Services), claiming *usucapio* rights and demanding recognition as formal owners of the land. This lawsuit extended until 1987 when a settlement was reached granting titles to the residents of Piñones through another legal statute that could grant titles to recent squatters, rather than by recognizing the residents' *usucapio* rights. As a result, PRIDCO's plans in western Piñones never materialized or were even implemented. As the community's land title battles with PRIDCO were being solved, PFZ Properties Inc. presented its first development proposal in 1969, *Talega Basin*, which consisted of 8,600 hotel rooms, plus 8,000 residential units in a "concrete city" of seven 30-floor towers with a variety of commercial structures, including a convention center and a large scale marina that required the dredging and filling of most of the property's mangroves and wetlands. The state government did not approve PFZ's first proposal because the proposed construction site did not have the necessary infrastructure (access road, wastewater treatment plant, and flood management controls). However, PFZ resubmitted its proposal for government review in 1973.

The conflicting and contradictory positions in which the government of PR found itself in the Piñones conservation versus development debate were clearly presented in the diverse number of policy determinations, planning exercises, administrative decisions, and research studies conducted by state agencies during the 1970s. While the PR Planning Board (PRPB)

<sup>1 &</sup>quot;Under the PR Civil Code and civil law generally, possession for thirty years is enough for a squatter to become full owner even if the titled owner is recorded in the Property Registry. This is the right of usucapio, which corresponds to the more vaguely defined "adverse possession" of the common law" (Giusti 1994: 860).

Piñones lagoons and channels, such as Vistamar Marina in the municipality of Carolina, just east of San Juan, and the establishment of private marinas that required the dredging of La Torrecilla lagoon resulted in significant changes to the lagoon's water circulation, retention,

During the early 1960s, the government of PR, through the PR Industrial Development Company (PRIDCO), the financial arm of the island's Economic Development Administration, acquired approximately 900 acres in the western part of Piñones to promote the development of massive tourism and recreation projects. Its plans, which included *A General Plan for the Boca de Cangrejos Area* of 1961 and *A Development Plan and Recommended Program for Finca Piñones* of 1968, proposed the construction of thousands of hotel rooms, a convention center, casinos, restaurants, golf courses, tennis courts, and Miami-style marinas throughout Piñones (Adams & Greeley, 1961; OPDAS, Inc., 1968). PRIDCO's investments in western Piñones raised expectations of potential large-scale development in the area fostering other private investors to acquire large tracts of land on the eastern part of Piñones to promote their own tourism and residential projects. As a result, private companies, such as PFZ Properties Inc., acquired more than 1,300 acres on the Monte Grande sector, within the eastern side of Piñones, in 1960. PRIDCO's plans identified Piñones residents as "squatters" and "invaders" that needed to be relocated to San Juan or other parts of the municipality of Loíza. Its plans even established measures to assure that residents were not allowed to construct new houses or conduct renovations within their homes; and were not permitted to inscribe the land title of their property by using the right to *usucapio (Giusti, 1994)*.1 In order to implement its plans, PRIDCO filed an injunction seeking to evict more than 200 families from the western part of Piñones in 1969. The residents responded with a countersuit, aided by the *pro-bono* entity *Servicios Legales de Puerto Rico* (Puerto Rico Legal Services), claiming *usucapio* rights and demanding recognition as formal owners of the land. This lawsuit extended until 1987 when a settlement was reached granting titles to the residents of Piñones through another legal statute that could grant titles to recent squatters, rather than by recognizing the residents' *usucapio* rights. As a result, PRIDCO's plans in western Piñones never materialized or were even implemented. As the community's land title battles with PRIDCO were being solved, PFZ Properties Inc. presented its first development proposal in 1969, *Talega Basin*, which consisted of 8,600 hotel rooms, plus 8,000 residential units in a "concrete city" of seven 30-floor towers with a variety of commercial structures, including a convention center and a large scale marina that required the dredging and filling of most of the property's mangroves and wetlands. The state government did not approve PFZ's first proposal because the proposed construction site did not have the necessary infrastructure (access road, wastewater treatment plant, and flood management controls).

However, PFZ resubmitted its proposal for government review in 1973.

(Giusti 1994: 860).

The conflicting and contradictory positions in which the government of PR found itself in the Piñones conservation versus development debate were clearly presented in the diverse number of policy determinations, planning exercises, administrative decisions, and research studies conducted by state agencies during the 1970s. While the PR Planning Board (PRPB)

1 "Under the PR Civil Code and civil law generally, possession for thirty years is enough for a squatter to become full owner even if the titled owner is recorded in the Property Registry. This is the right of usucapio, which corresponds to the more vaguely defined "adverse possession" of the common law"

salinity, and sedimentation levels.

and the Environmental Quality Board (EQB) had approved the sitting permit and the environmental impact statement for PFZ's *Talega Basin* in 1974, the local government also started shifting its perspective towards Piñones by recognizing its ecological singularity. For example, the recently founded Department of Natural Resources published a number of scientific documents that stressed out the uniqueness, extensiveness, and fragility of the Piñones mangrove forest and critiqued the private development proposals that would significantly alter the ecosystem.2 In 1978, the PRPB designated Piñones as a Special Planning Area under the 1972 US Coastal Zone Management Act. It also approved other special designations that promoted natural resource conservation within Piñones, such as new areas designated as a Nature Reserve (1979), Critical Wildlife Area (1979), and proposed new areas to be acquired as a future Nature Reserve (1983), including part of the lands that belonged to PFZ Properties Inc.

During the early 1980s, a new series of residential and tourism development projects proposed in eastern Piñones started their permit acquisition processes, such as Proyecto Caribe from the development company Caribe Associates Ltd. In 1985, PFZ Properties Inc. presented a smaller scale version of its previous project with 3,556 residential and tourism units for government approval, as its 1974 project had been halted by a lawsuit that dragged for years with the U.S. Environmental Protection Agency regarding U.S. Clean Water Act violations.3 The tensions that resulted from the 1980s environment versus development debate regarding future land uses in Piñones moved former governor Rafael Hernández-Colon's administration (1984-1992) on February 1988 to conduct a land use planning exercise that would clearly identify the lands that could be developed and those that would be conserved. As such, the PRPB was charged with the responsibility of leading the development of the Piñones Special Planning Area's Land Use Plan. After seven years of public hearings and revisions between two different government administrations, the Piñones Special Planning Area's Land Use Plan was approved in 1995 under the administration of former governor Pedro Rosselló (1992-2000). Without a doubt, the government was expecting too much from a document that merely listed some community, natural resource, and tourism strategies and included as an appendix a land use zoning map. Based on the reality of the Piñones 20-year debate, the government should have promoted a participatory planning process immersed in conflict resolution to try to find true solution to this extensive debate, if one was available. In the end, government ended up doing what it was used to do, "interventions not implementation", claiming it had achieved a solomonic solution towards all stakeholders (Mosse, 2004).

The 1995 Land Use Plan had the goal of "achieving the protection, conservation, and restoration of the different natural systems that compose the Planning Area, and at the same time, promote a limited and ordered ecological-tourism development" (PRPB, 1995: Preface). The state might have claimed this goal, but in essence what it ended up achieving was plotting in a map where hotels could be developed and establishing design and density criteria for constructions. Soon after the approval of the 1995 Land Use Plan and its new permit streamlining process, private companies presented new development proposals

<sup>2</sup> The Department of Natural Resources' research studies included: Wildlife Management Proposal for the Piñones State Forest (1974); Unit Plan for the Management of the Piñones Forest (1974); The Master Plan for the Commonwealth Forests of Puerto Rico (Division of Forest Planning) (1976); and Puerto Rico's Mangrove Systems (1978).

<sup>3</sup> *PFZ Properties Inc. v. Russell E. Train et. al.* [393 F. Supp. 1370 (D.D.C. 1975)]

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

seagrass communities due to chronic coastal water quality decline.

later known as Isleta Marina.

erosion.

town of Humacao.

and other facilities.

**industry** 

solid waste production.

*Mansión del Sapo, Fajardo*, pers. comm.).

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 369

1970s – Construction of two apartment buildings and a private marina at Cayo Obispo,

1970s-2000s – Construction of five more large private marinas in Fajardo; physical displacement of residents or displacement from part of their traditional fishing grounds (Miguel "Chan" Dávila, fisher folk and President, *Asociación de Pescadores de Maternillo y* 

Significant physical alteration of coastal morphology and of adjacent coastal coral reef and

Elimination of important essential fish habitats due to dredging, filling, piling, and breakwater construction; changes in littoral drift that caused net increased coastal

The vast majority of registered recreational vessels in PR (>65,000) are nowadays located within the Fajardo area, which has also created dramatic increases in recreational boating pressure, groundings, anchoring impacts on coral reef and seagrass habitats, oil pollution, illegal garbage dumping, recreational overfishing, and illegal coral collection as souvenirs in the past over the island archipelago across the eastern PR shelf (Hernández-Delgado, 2000, 2005), including Arrecifes La Cordillera Natural Reserve, Culebra Island, Vieques

1970s – construction of Palmas del Mar, the first coastal mega-resort in PR, at the eastern

1970s – 2000s – Continued expansion of the 1600+ hectare project that include several hotels, some of them right on Candelero Beach, the second largest private marina in PR, and one of the largest of the entire Caribbean region, several apartment walk up buildings, extensive residential areas, many of them as secondary homes, as well as four golf courses

Significant increase in the local demand for freshwater, as well as increases in sewage and

Public access to the coast became severely limited with a complete prohibition of access to

Another major example of unsustainable tourism and residential development was the unprecedented deforestation and filling of continuous mangrove forest, wetlands and other estuarine habitats carried out during the late 1960s by local investment company, Empresas Díaz, at Punta Miquillo, Río Grande, in northeastern PR (Figure 1). More than 1,000 hectares of coastal wetlands were eliminated and filled for a proposed large-scale tourist resort and residential development named Coco Beach. This also included a major dredging of a deep

some areas, and very limited access to some others due to very stringent rules.

**2.4 The Río Grande case study: A dramatic turn of events for the coastal tourism** 

Island, and even up to the U.S. Virgin Islands, and the British Virgin Islands.

**The Palmas del Mar story: The first large-scale resort** 

before the PRPB and the EQB. As a result of this Plan, the following projects were being considered for Piñones by the late 1990s and early 2000s: (1) 1,320 condo-hotel units, 450 tourism villas, and 225,000 m3 of sand extraction (Proyecto Turístico Caribe); (2) 880 condohotel units, 42 tourism villas, 1,394 parking spaces, various tennis courts and pools, and retail and commercial areas (Costa Serena); (3) 408 hotel units and 102 villas (PDCM Associates); (4) 290 apartments in 9 buildings (Comunidad Santiago); (5) 122 hotel units, 132 cabins, 27 villas, 5 pools and 40,000 m3 of sand extraction (Vacía Talega Village); and (6) 375 tourism units with 2 golf courses (Casa Grande Resort, Caribbean Links). Together, these projects represented the development of more than 4,000 condo-hotel units, apartments, and villas; sand extractions; a population growth of more than 5,000 residents in a community of 2,400 residents; and an increase in infrastructure pressures for public services that were not optimal for the local community (i.e., water supply, wastewater management and treatment, road capacity, etc.) Public agencies quickly approved the environmental and sitting permits for the PFZ Properties Inc. and the Caribe Associates projects, some without even celebrating public hearings. As a response, community groups, such as the Piñones Residents Association and the *Frente Loiceños Unidos* (FLU), presented several environmental lawsuits against these projects, with the assistance of local universities' law clinics, because of their incompliance with environmental and land use laws and regulations. These community entities constantly prevailed in these lawsuits; cases that ended up establishing important environmental law jurisprudence in PR. After these long-awaited sentences, construction companies desisted in continuing with their development proposals as they were originally conceptualized.

The debate of the future land uses in Piñones continued during the decade of 2000, as the public campaigns and strategies to either promote large scale residential-tourism projects or smaller sustainable tourism development initiatives grew stronger. On March 2007, in a surprising turn of events during the traditional Governor's Message of the State, former governor Aníbal Acevedo-Vilá (2004-2008) announced that he had spoken with Joel Katz, PFZ's President, and that the Government of PR had entered into a collaborative agreement with PFZ Properties Inc. in which the state would acquire his lands at a market price value in order to designate them as a Nature Reserve. With the expropriation of the lands that belonged to PFZ Properties Inc., the 45-year old debate of the future land uses in eastern Piñones was put to a partial end. During the final years of this debate, a broad coalition of community residents, environmental and civic organizations, workers' unions, and academics successfully mobilized public support and influenced national political arenas and decisions in halting the construction of large-scale residential and tourism projects in eastern Piñones. Future sustainable tourism initiatives in Piñones should aim to find a common ground where a vision of the community's future can be delineated through participatory planning mechanisms, deliberative dialogues, and inter-sectorial consensus building.

#### **The Fajardo and Palmas del Mar case studies in a nutshell**

#### **The Fajardo story: Displacement of local fishing communities by private marinas**

1960s – Construction of Hotel El Conquistador at Fajardo opened the gate of major tourism development across the northeastern PR zone; raw sewage discharged from hotel caused localized coral mortality at Las Croabas fringing coral reefs.

before the PRPB and the EQB. As a result of this Plan, the following projects were being considered for Piñones by the late 1990s and early 2000s: (1) 1,320 condo-hotel units, 450 tourism villas, and 225,000 m3 of sand extraction (Proyecto Turístico Caribe); (2) 880 condohotel units, 42 tourism villas, 1,394 parking spaces, various tennis courts and pools, and retail and commercial areas (Costa Serena); (3) 408 hotel units and 102 villas (PDCM Associates); (4) 290 apartments in 9 buildings (Comunidad Santiago); (5) 122 hotel units, 132 cabins, 27 villas, 5 pools and 40,000 m3 of sand extraction (Vacía Talega Village); and (6) 375 tourism units with 2 golf courses (Casa Grande Resort, Caribbean Links). Together, these projects represented the development of more than 4,000 condo-hotel units, apartments, and villas; sand extractions; a population growth of more than 5,000 residents in a community of 2,400 residents; and an increase in infrastructure pressures for public services that were not optimal for the local community (i.e., water supply, wastewater management and treatment, road capacity, etc.) Public agencies quickly approved the environmental and sitting permits for the PFZ Properties Inc. and the Caribe Associates projects, some without even celebrating public hearings. As a response, community groups, such as the Piñones Residents Association and the *Frente Loiceños Unidos* (FLU), presented several environmental lawsuits against these projects, with the assistance of local universities' law clinics, because of their incompliance with environmental and land use laws and regulations. These community entities constantly prevailed in these lawsuits; cases that ended up establishing important environmental law jurisprudence in PR. After these long-awaited sentences, construction companies desisted in continuing with their

The debate of the future land uses in Piñones continued during the decade of 2000, as the public campaigns and strategies to either promote large scale residential-tourism projects or smaller sustainable tourism development initiatives grew stronger. On March 2007, in a surprising turn of events during the traditional Governor's Message of the State, former governor Aníbal Acevedo-Vilá (2004-2008) announced that he had spoken with Joel Katz, PFZ's President, and that the Government of PR had entered into a collaborative agreement with PFZ Properties Inc. in which the state would acquire his lands at a market price value in order to designate them as a Nature Reserve. With the expropriation of the lands that belonged to PFZ Properties Inc., the 45-year old debate of the future land uses in eastern Piñones was put to a partial end. During the final years of this debate, a broad coalition of community residents, environmental and civic organizations, workers' unions, and academics successfully mobilized public support and influenced national political arenas and decisions in halting the construction of large-scale residential and tourism projects in eastern Piñones. Future sustainable tourism initiatives in Piñones should aim to find a common ground where a vision of the community's future can be delineated through participatory planning

development proposals as they were originally conceptualized.

mechanisms, deliberative dialogues, and inter-sectorial consensus building.

**The Fajardo story: Displacement of local fishing communities by private marinas**  1960s – Construction of Hotel El Conquistador at Fajardo opened the gate of major tourism development across the northeastern PR zone; raw sewage discharged from hotel caused

**The Fajardo and Palmas del Mar case studies in a nutshell** 

localized coral mortality at Las Croabas fringing coral reefs.

1970s – Construction of two apartment buildings and a private marina at Cayo Obispo, later known as Isleta Marina.

1970s-2000s – Construction of five more large private marinas in Fajardo; physical displacement of residents or displacement from part of their traditional fishing grounds (Miguel "Chan" Dávila, fisher folk and President, *Asociación de Pescadores de Maternillo y Mansión del Sapo, Fajardo*, pers. comm.).

Significant physical alteration of coastal morphology and of adjacent coastal coral reef and seagrass communities due to chronic coastal water quality decline.

Elimination of important essential fish habitats due to dredging, filling, piling, and breakwater construction; changes in littoral drift that caused net increased coastal erosion.

The vast majority of registered recreational vessels in PR (>65,000) are nowadays located within the Fajardo area, which has also created dramatic increases in recreational boating pressure, groundings, anchoring impacts on coral reef and seagrass habitats, oil pollution, illegal garbage dumping, recreational overfishing, and illegal coral collection as souvenirs in the past over the island archipelago across the eastern PR shelf (Hernández-Delgado, 2000, 2005), including Arrecifes La Cordillera Natural Reserve, Culebra Island, Vieques Island, and even up to the U.S. Virgin Islands, and the British Virgin Islands.

#### **The Palmas del Mar story: The first large-scale resort**

1970s – construction of Palmas del Mar, the first coastal mega-resort in PR, at the eastern town of Humacao.

1970s – 2000s – Continued expansion of the 1600+ hectare project that include several hotels, some of them right on Candelero Beach, the second largest private marina in PR, and one of the largest of the entire Caribbean region, several apartment walk up buildings, extensive residential areas, many of them as secondary homes, as well as four golf courses and other facilities.

Significant increase in the local demand for freshwater, as well as increases in sewage and solid waste production.

Public access to the coast became severely limited with a complete prohibition of access to some areas, and very limited access to some others due to very stringent rules.

#### **2.4 The Río Grande case study: A dramatic turn of events for the coastal tourism industry**

Another major example of unsustainable tourism and residential development was the unprecedented deforestation and filling of continuous mangrove forest, wetlands and other estuarine habitats carried out during the late 1960s by local investment company, Empresas Díaz, at Punta Miquillo, Río Grande, in northeastern PR (Figure 1). More than 1,000 hectares of coastal wetlands were eliminated and filled for a proposed large-scale tourist resort and residential development named Coco Beach. This also included a major dredging of a deep

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

**and urban development strategy of Puerto Rico** 

Reserve, Río Grande, to favor tourism and urban construction.

Additional non-sustainable strategies have been also recently implemented in PR, including: (1) inadequate implementation of the highly controversial Ecotourism Law 340 of 1998 that was instead used to foster rapid tourism and urban development on sensitive coastal habitats; (2) inadequate implementation of Sustainable Development Law 267 of 2004 and Law 254 41 of 2006 for the Public Policy for the Sustainable Tourism Development of PR; (3) the most recent change in the political administration resulted in the immediate substitution of the *Master Plan for Tourism and Sustainable Development of PR* by the non-sustainable *PR* 

**tourism and urban expansion plans** 

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 371

**3. Swimming against the current: The still non-sustainable coastal tourism** 

**3.1 Non-sustainable political tactics: Unprecedented changes in land zoning rules, environmental regulations, permitting and decision-making processes to favor** 

The global economic crisis that has characterized the first part of the current century, in combination with the projected impacts associated to climate change, may represent the most critical threats to coastal tourism and urban growth at a global scale. The situation may become more complicated if there is no long-term vision, planning, and a successful implementation of sustainable socio-economic development strategy. In spite of its close political and economic relationship with the U.S., the Commonwealth of PR has been under a constantly changing political atmosphere every four years over the last two decades, but particularly since 1996, when four different administrations alternated between the two main political parties of the island with completely opposite political philosophies have switched power. Though all political administrations have fostered significant tourism and urban development, their plans and strategies have also followed a similarly changing pathway, leading to substantial changes in political tactics which have prevented embracing a sustainable tourism and socio-economic development model. But regardless of their philosophy, all four administrations have managed to maintain a nearly unchanged, nonsustainable approach aimed at rapidly-approving construction activities to sustain the construction sector as one of the principal economic drivers of the island. The most significant changes over the last two decades have included: (1) fast tracking of the government permitting processes, which basically represented the elimination of most steps of the standard bureaucratic burden for developers, particularly those that included public participation through public hearings on regulatory agencies; (2) more flexible state environmental regulations; (3) a massive change of zoning schemes across the coastal zone of the entire island and the island municipalities of Vieques and Culebra; (4) establishment of more flexible uses on each of the existing and new zoning classifications to allow significant construction of tourism and residential projects in areas where previous permitted uses prohibited it; (5) substantial suppression of public participation on planning and decision-making processes; (6) establishment of severe legal limitations through Law 161 of 2009 which created the Office of Permits Management and an Adjudicative Board whose decisions will be considered final to foster permitting fast tracking procedures and halting citizens and communities rights to appeal in court any questionable government decision regarding project approval; (7) adoption and implementation of the regional nonsustainable tourism development plan for the northeast coast as proposed by developers (PRPB, 2006); and (8) the partial elimination of the Río Espíritu Santo Estuary Natural

canal across shallow coral reefs and seagrass communities at adjacent Ensenada Comezón for the construction of a private marina. According to local fishermen, these actions caused an irreversible damage to coastal water quality that resulted in continuous sediment resuspension, degradation of seagrasses, and on a massive coral mortality across adjacent reefs, which induced the collapse of the local fisheries. Recent evaluations of Rio Grande's coral reefs suggest that no recovery has occurred even four decades after the dredging (Hernández-Delgado, 2005, 2009). Due to major economic constraints, only the first stage of the residential component of the project was built during the 1970s and no resorts were built until 2003. In 1985, and during the administration of then governor Rafael Hernández-Colón (1984-1988) the PR Department of Natural and Environmental Resources (PRDNER) designated the entire zone, as well as its adjacent waters, as the Río Espíritu Santo Estuary Natural Reserve (RESENR), recognizing the critical ecological value of the zone and to counter-balance the proposed tourism development of the area. In spite of the public nature of all beaches in PR, coastal access was already extremely limited across the Punta Miquillo and Punta La Picúas zones at Río Grande due to continuous and increasing coastal construction and land segregation, and very stringent access regulations.

However, during the period of 1992 to 1994, under the administration of former governor Pedro Rosselló (1992-2000), an unprecedented fast tracking permitting system was established across several state government agencies aimed at: (1) establishing a smoother and fastest permitting process in government agencies for developers; (2) fostering a boom in residential and tourism construction activity; and (3) eliminating public participation from planning processes, public hearings, etc. In 1995 and after an unprecedented legal action in PR, the PRDNER eliminated the entire Punta Miquillo zone and the RESENR to facilitate tourism development. Further, during 1996, the Northeast Coastal Tourism Development Conceptual Plan was approved and implemented by the PR Planning Board (PRPB, 1996). This was aimed at establishing more flexible zoning schemes aimed at fostering massive 36 tourism construction across northeastern PR, though this strategy was later expanded to the rest of the island. Following these actions, a dramatic boom in tourism and residential projects occurred in many areas of PR, but mostly across the northeastern coastal zone during the late 1990s and early 2000s. During 2003 two large private resorts, the Meliá and Paradisus hotels, were constructed on Punta Miquillo, with four golf courses across the area, and further restricting public access to the coastal zone and establishing a *de facto* private beach. Current plans include the construction of a high-class resort/residential/golf club developed by multi-millionaire investor Donald Trump which also includes a proposed large private inland marina within the Río Espíritu Santo estuary, as well as two artificial beaches that will require the nearly total elimination of remnant fringing seagrass communities. The entire set of activities that have taken place in the Río Grande area represent one of the most dramatic examples where marginalization of local communities, in combination with unprecedented rapid legal changes in planning, zoning and environmental regulations, resulted in establishing a non-sustainable tourism development model which has had permanent negative irreversible impacts on adjacent coastal communities. According to many local fishers, it has also resulted in permanent impacts on the livelihoods of local communities that historically had depended on the coastal resources as means of recreation and income.

canal across shallow coral reefs and seagrass communities at adjacent Ensenada Comezón for the construction of a private marina. According to local fishermen, these actions caused an irreversible damage to coastal water quality that resulted in continuous sediment resuspension, degradation of seagrasses, and on a massive coral mortality across adjacent reefs, which induced the collapse of the local fisheries. Recent evaluations of Rio Grande's coral reefs suggest that no recovery has occurred even four decades after the dredging (Hernández-Delgado, 2005, 2009). Due to major economic constraints, only the first stage of the residential component of the project was built during the 1970s and no resorts were built until 2003. In 1985, and during the administration of then governor Rafael Hernández-Colón (1984-1988) the PR Department of Natural and Environmental Resources (PRDNER) designated the entire zone, as well as its adjacent waters, as the Río Espíritu Santo Estuary Natural Reserve (RESENR), recognizing the critical ecological value of the zone and to counter-balance the proposed tourism development of the area. In spite of the public nature of all beaches in PR, coastal access was already extremely limited across the Punta Miquillo and Punta La Picúas zones at Río Grande due to continuous and increasing coastal construction and land segregation, and very stringent

However, during the period of 1992 to 1994, under the administration of former governor Pedro Rosselló (1992-2000), an unprecedented fast tracking permitting system was established across several state government agencies aimed at: (1) establishing a smoother and fastest permitting process in government agencies for developers; (2) fostering a boom in residential and tourism construction activity; and (3) eliminating public participation from planning processes, public hearings, etc. In 1995 and after an unprecedented legal action in PR, the PRDNER eliminated the entire Punta Miquillo zone and the RESENR to facilitate tourism development. Further, during 1996, the Northeast Coastal Tourism Development Conceptual Plan was approved and implemented by the PR Planning Board (PRPB, 1996). This was aimed at establishing more flexible zoning schemes aimed at fostering massive 36 tourism construction across northeastern PR, though this strategy was later expanded to the rest of the island. Following these actions, a dramatic boom in tourism and residential projects occurred in many areas of PR, but mostly across the northeastern coastal zone during the late 1990s and early 2000s. During 2003 two large private resorts, the Meliá and Paradisus hotels, were constructed on Punta Miquillo, with four golf courses across the area, and further restricting public access to the coastal zone and establishing a *de facto* private beach. Current plans include the construction of a high-class resort/residential/golf club developed by multi-millionaire investor Donald Trump which also includes a proposed large private inland marina within the Río Espíritu Santo estuary, as well as two artificial beaches that will require the nearly total elimination of remnant fringing seagrass communities. The entire set of activities that have taken place in the Río Grande area represent one of the most dramatic examples where marginalization of local communities, in combination with unprecedented rapid legal changes in planning, zoning and environmental regulations, resulted in establishing a non-sustainable tourism development model which has had permanent negative irreversible impacts on adjacent coastal communities. According to many local fishers, it has also resulted in permanent impacts on the livelihoods of local communities that historically had depended on the

access regulations.

coastal resources as means of recreation and income.

#### **3. Swimming against the current: The still non-sustainable coastal tourism and urban development strategy of Puerto Rico**

#### **3.1 Non-sustainable political tactics: Unprecedented changes in land zoning rules, environmental regulations, permitting and decision-making processes to favor tourism and urban expansion plans**

The global economic crisis that has characterized the first part of the current century, in combination with the projected impacts associated to climate change, may represent the most critical threats to coastal tourism and urban growth at a global scale. The situation may become more complicated if there is no long-term vision, planning, and a successful implementation of sustainable socio-economic development strategy. In spite of its close political and economic relationship with the U.S., the Commonwealth of PR has been under a constantly changing political atmosphere every four years over the last two decades, but particularly since 1996, when four different administrations alternated between the two main political parties of the island with completely opposite political philosophies have switched power. Though all political administrations have fostered significant tourism and urban development, their plans and strategies have also followed a similarly changing pathway, leading to substantial changes in political tactics which have prevented embracing a sustainable tourism and socio-economic development model. But regardless of their philosophy, all four administrations have managed to maintain a nearly unchanged, nonsustainable approach aimed at rapidly-approving construction activities to sustain the construction sector as one of the principal economic drivers of the island. The most significant changes over the last two decades have included: (1) fast tracking of the government permitting processes, which basically represented the elimination of most steps of the standard bureaucratic burden for developers, particularly those that included public participation through public hearings on regulatory agencies; (2) more flexible state environmental regulations; (3) a massive change of zoning schemes across the coastal zone of the entire island and the island municipalities of Vieques and Culebra; (4) establishment of more flexible uses on each of the existing and new zoning classifications to allow significant construction of tourism and residential projects in areas where previous permitted uses prohibited it; (5) substantial suppression of public participation on planning and decision-making processes; (6) establishment of severe legal limitations through Law 161 of 2009 which created the Office of Permits Management and an Adjudicative Board whose decisions will be considered final to foster permitting fast tracking procedures and halting citizens and communities rights to appeal in court any questionable government decision regarding project approval; (7) adoption and implementation of the regional nonsustainable tourism development plan for the northeast coast as proposed by developers (PRPB, 2006); and (8) the partial elimination of the Río Espíritu Santo Estuary Natural Reserve, Río Grande, to favor tourism and urban construction.

Additional non-sustainable strategies have been also recently implemented in PR, including: (1) inadequate implementation of the highly controversial Ecotourism Law 340 of 1998 that was instead used to foster rapid tourism and urban development on sensitive coastal habitats; (2) inadequate implementation of Sustainable Development Law 267 of 2004 and Law 254 41 of 2006 for the Public Policy for the Sustainable Tourism Development of PR; (3) the most recent change in the political administration resulted in the immediate substitution of the *Master Plan for Tourism and Sustainable Development of PR* by the non-sustainable *PR* 

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

community livelihoods.

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 373

zone. Total investment of these efforts were estimated in an unprecedented USD7.89bn, from which 32% will be invested in the eastern coast, 22% in the western coast, 21% in the northern coast, 19% in the metropolitan area, and less than 6% and 0.6% will be spent in the southern coast and central mountain range, respectively. Total investment in recently constructed structures reached USD789 millions. Another USD1.21bn are being invested in projects under construction, while and estimated USD5.89bn will be invested in projects still in the permitting process. According to PRTC (Bauzá-Alvarez, pers. comm.), nearly 70% of the proposed new hotels and other lodging facilities will be constructed adjacent to coastal habitats. As a mean, 57% of the structures already built between 2009 and 2011, as well as 85% of those under construction are located in coastal areas. Another 58% of those still under permitting processes will also be located at coastal habitats. From the geographic perspective, 92% of the proposed hotels for the eastern coast will be located on coastal habitats, as well as 86% of those from the northern coast, 68% of the western coast, 51% of the southern coast and 47% of the metropolitan area of San Juan. The proposed strategy has followed a non-sustainable pattern of further exporting massive tourism to coastal areas, with highly sensitive habitats, lack of adequate public participation in the decision-making and often fast-tracked process, without any guarantee to foster the protection of base-

**3.3 The Northeastern Ecological Corridor case study: Conservation efforts vs. yet another reversal by government in favor of tourism and urban construction** 

Covering nearly 3,000 acres between the municipalities of Luquillo and Fajardo, in the northeast coast of PR (Figure 1), the Northeastern Ecological Corridor (NEC) has been recognized by Commonwealth and Federal government agencies, as well as local and international conservation organizations, as one of island's most valuable natural areas and one of the Caribbean's great biodiversity hotspots (PRDNER, 2008). According to the U.S. Fish and Wildlife Service (2002), the NEC's beaches are considered the most important nesting site for critically endangered Leatherback sea turtles 30 in all of PR and their second most important nesting site in all U.S. jurisdiction (just after 31 Sandy Point in Saint Croix, USVI). The NEC also supports an extraordinary array of tropical ecosystems, including coastal forests, wetlands, coral communities, and a bioluminescent lagoon. These are home to more than 50 rare, threatened, endangered, and endemic species. Since the late 1970s, local and federal government agencies had proposed that the NEC be designated as a Natural Reserve (PRPB, 1977; US Department of Commerce and PRDNER, 1978). In 1990, a large part of the NEC was designated as a Coastal Barrier under the US Coastal Barrier Act. In 1992, the PRDNER presented an official designation document to the PRPB proposing its designation as a Natural Reserve. Unfortunately, during the election 39 transition process of 1992, the then recently-elected administration of former 40 governor Pedro Rosselló (1992- 2000) requested that the PRPB not approve the 41 designation of the NEC Natural Reserve as it wanted to promote tourism development in 42 the area. The Roselló administration's new land use vision for the NEC was approved in the 1996 Northeast Coastal Tourism Development Conceptual Plan, which re-zoned certain parts of the NEC to allow for residential and tourism construction (PRPB, 1996), therefore reverting the historical conservation objectives of previous administrations. After the 1996 Northeast Coast Tourism Development Conceptual Plan was approved, two mega resorts were proposed to be constructed in the NEC: (1) Dos Mares Resort - consisting of 3,450 residential and tourist

*Tourism Strategic Plan* 2009-2013; (4) lack of compliance with Law 153 (August 10, 2002) for the Sustainable Development of Vieques and Culebra Islands; (5) elimination of the *Master Plan for the Sustainable Development of Vieques and Culebra Islands*; (6) the elimination of the draft revised and updated version of the *Puerto Rico's Land Use Plan* which proposed the conservation of extensive coastal areas where new large-scale tourism resorts, housing projects, golf courses and/or private marinas are now being either proposed or constructed; (7) the most recent change in the political administration resulted in the immediate elimination of the Climate Change Commission on the House of Representatives (it lasted only about a year and was nearly useless; no public policy was enacted regarding climate change impacts, neither it was replaced with something that might have had better guidelines on which to work on); (8) the failed attempt to enact a proposed new *Coastal Law* that would have allowed extensive tourism and urban construction right on the public domains of the maritime terrestrial zone and on coastal barriers; (9) alteration in the composition of the State Supreme Court to ensure a higher number of judges lined up with the Fortuño's administration philosophy; (10) unprecedented legal decisions at the state court system favoring private constructions on the maritime terrestrial zone, including at public beaches, mangroves and wetland areas; (11) rapid approval of projects mixing urban construction and tourism facilities to foster urbanization across ecologically sensitive coastal areas without full environmental impact evaluation; (12) declaration of tourism emergency in Culebra Island to foster additional construction of hotel rooms under an expedite exception of compliance with existing environmental regulations; (13) the unprecedented total elimination of the Northeastern Corridor Natural Reserve, Luquillo, to favor tourism and urban construction; and (14) According to PR newspaper Primera Hora (Justicia-Doll, October 26, 2011), there has been also a dual role of key personnel of several regulatory agencies as government employees and as consultants for private tourism and construction developers.

#### **3.2 The Puerto Rico tourism strategy, 2009-2013: Perpetuation of the non-sustainable model?**

The administration of governor Luis Fortuño (2008-2012) implemented the very ambitious PR Tourism Strategic Plan 2009-2013 which fostered tourism expansion by focusing on the construction of large resorts and hotels across the coastal zone of the island. A total of 153 new projects were proposed to be completed between 2010 and 2013. In comparison to the existing number of hotels in 2009, this represents an astonishing 97% increase in the number of lodging facilities within only four years. According to Bauzá-Alvarez of the PRTC (pers. comm., 2011), a total of 27 projects were completed between 2009 and 2011 (17%), while 21 were still under construction (14%), and the remaining 105 (69%) were still in 2011 at some stage of the permitting process. A total of 26% of the lodging facilities were proposed on the metropolitan area of San Juan, followed by the eastern coast (25.5%) and the west coast (19%). Based on the PRTC information (Bauzá-Alvarez, pers. comm.), there would be only a 12% increase in hotel structures in the southern coast and 8% in the central zone. This expansion also included the proposed construction of 18,113 new rooms by 2013. This would elevate the total number of rooms available in the island to 32,189, and represents a 129% increase in relation to rooms available in 2009. Approximately 28% of the proposed rooms will be constructed on the metropolitan area, followed by 27% on the east coast and 22% on the west coast. Only 7% will be built in the southern coast and 2% in the central

*Tourism Strategic Plan* 2009-2013; (4) lack of compliance with Law 153 (August 10, 2002) for the Sustainable Development of Vieques and Culebra Islands; (5) elimination of the *Master Plan for the Sustainable Development of Vieques and Culebra Islands*; (6) the elimination of the draft revised and updated version of the *Puerto Rico's Land Use Plan* which proposed the conservation of extensive coastal areas where new large-scale tourism resorts, housing projects, golf courses and/or private marinas are now being either proposed or constructed; (7) the most recent change in the political administration resulted in the immediate elimination of the Climate Change Commission on the House of Representatives (it lasted only about a year and was nearly useless; no public policy was enacted regarding climate change impacts, neither it was replaced with something that might have had better guidelines on which to work on); (8) the failed attempt to enact a proposed new *Coastal Law* that would have allowed extensive tourism and urban construction right on the public domains of the maritime terrestrial zone and on coastal barriers; (9) alteration in the composition of the State Supreme Court to ensure a higher number of judges lined up with the Fortuño's administration philosophy; (10) unprecedented legal decisions at the state court system favoring private constructions on the maritime terrestrial zone, including at public beaches, mangroves and wetland areas; (11) rapid approval of projects mixing urban construction and tourism facilities to foster urbanization across ecologically sensitive coastal areas without full environmental impact evaluation; (12) declaration of tourism emergency in Culebra Island to foster additional construction of hotel rooms under an expedite exception of compliance with existing environmental regulations; (13) the unprecedented total elimination of the Northeastern Corridor Natural Reserve, Luquillo, to favor tourism and urban construction; and (14) According to PR newspaper Primera Hora (Justicia-Doll, October 26, 2011), there has been also a dual role of key personnel of several regulatory agencies as government employees and as consultants for private tourism and construction

**3.2 The Puerto Rico tourism strategy, 2009-2013: Perpetuation of the non-sustainable** 

The administration of governor Luis Fortuño (2008-2012) implemented the very ambitious PR Tourism Strategic Plan 2009-2013 which fostered tourism expansion by focusing on the construction of large resorts and hotels across the coastal zone of the island. A total of 153 new projects were proposed to be completed between 2010 and 2013. In comparison to the existing number of hotels in 2009, this represents an astonishing 97% increase in the number of lodging facilities within only four years. According to Bauzá-Alvarez of the PRTC (pers. comm., 2011), a total of 27 projects were completed between 2009 and 2011 (17%), while 21 were still under construction (14%), and the remaining 105 (69%) were still in 2011 at some stage of the permitting process. A total of 26% of the lodging facilities were proposed on the metropolitan area of San Juan, followed by the eastern coast (25.5%) and the west coast (19%). Based on the PRTC information (Bauzá-Alvarez, pers. comm.), there would be only a 12% increase in hotel structures in the southern coast and 8% in the central zone. This expansion also included the proposed construction of 18,113 new rooms by 2013. This would elevate the total number of rooms available in the island to 32,189, and represents a 129% increase in relation to rooms available in 2009. Approximately 28% of the proposed rooms will be constructed on the metropolitan area, followed by 27% on the east coast and 22% on the west coast. Only 7% will be built in the southern coast and 2% in the central

developers.

**model?** 

zone. Total investment of these efforts were estimated in an unprecedented USD7.89bn, from which 32% will be invested in the eastern coast, 22% in the western coast, 21% in the northern coast, 19% in the metropolitan area, and less than 6% and 0.6% will be spent in the southern coast and central mountain range, respectively. Total investment in recently constructed structures reached USD789 millions. Another USD1.21bn are being invested in projects under construction, while and estimated USD5.89bn will be invested in projects still in the permitting process. According to PRTC (Bauzá-Alvarez, pers. comm.), nearly 70% of the proposed new hotels and other lodging facilities will be constructed adjacent to coastal habitats. As a mean, 57% of the structures already built between 2009 and 2011, as well as 85% of those under construction are located in coastal areas. Another 58% of those still under permitting processes will also be located at coastal habitats. From the geographic perspective, 92% of the proposed hotels for the eastern coast will be located on coastal habitats, as well as 86% of those from the northern coast, 68% of the western coast, 51% of the southern coast and 47% of the metropolitan area of San Juan. The proposed strategy has followed a non-sustainable pattern of further exporting massive tourism to coastal areas, with highly sensitive habitats, lack of adequate public participation in the decision-making and often fast-tracked process, without any guarantee to foster the protection of basecommunity livelihoods.

#### **3.3 The Northeastern Ecological Corridor case study: Conservation efforts vs. yet another reversal by government in favor of tourism and urban construction**

Covering nearly 3,000 acres between the municipalities of Luquillo and Fajardo, in the northeast coast of PR (Figure 1), the Northeastern Ecological Corridor (NEC) has been recognized by Commonwealth and Federal government agencies, as well as local and international conservation organizations, as one of island's most valuable natural areas and one of the Caribbean's great biodiversity hotspots (PRDNER, 2008). According to the U.S. Fish and Wildlife Service (2002), the NEC's beaches are considered the most important nesting site for critically endangered Leatherback sea turtles 30 in all of PR and their second most important nesting site in all U.S. jurisdiction (just after 31 Sandy Point in Saint Croix, USVI). The NEC also supports an extraordinary array of tropical ecosystems, including coastal forests, wetlands, coral communities, and a bioluminescent lagoon. These are home to more than 50 rare, threatened, endangered, and endemic species. Since the late 1970s, local and federal government agencies had proposed that the NEC be designated as a Natural Reserve (PRPB, 1977; US Department of Commerce and PRDNER, 1978). In 1990, a large part of the NEC was designated as a Coastal Barrier under the US Coastal Barrier Act. In 1992, the PRDNER presented an official designation document to the PRPB proposing its designation as a Natural Reserve. Unfortunately, during the election 39 transition process of 1992, the then recently-elected administration of former 40 governor Pedro Rosselló (1992- 2000) requested that the PRPB not approve the 41 designation of the NEC Natural Reserve as it wanted to promote tourism development in 42 the area. The Roselló administration's new land use vision for the NEC was approved in the 1996 Northeast Coastal Tourism Development Conceptual Plan, which re-zoned certain parts of the NEC to allow for residential and tourism construction (PRPB, 1996), therefore reverting the historical conservation objectives of previous administrations. After the 1996 Northeast Coast Tourism Development Conceptual Plan was approved, two mega resorts were proposed to be constructed in the NEC: (1) Dos Mares Resort - consisting of 3,450 residential and tourist

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

extraordinary ecological area to residential and tourism construction.

**zone** 

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 375

Resort, among others. The direct, indirect, and cumulative threats of this new special zoning plan are significant: heavy human use, artificial light and noise, increased run-off, and downstream pollution of future developments will vastly change the character of the undeveloped forests and beaches of the Corridor, will permanently and unavoidably damage important ecosystems and its related species, and will eliminate the NEC's extraordinary recreational, tourism, and economic development potential as a regional, lowimpact ecotourism attraction. The NEC Coalition is currently engaged in continuing its campaign in favor of the NEC, specifically urging the government of PR to reinstate the designation the NEC as a Natural Reserve in its totality and reverse its decision to open this

**3.4 The Dorado-Arecibo northern PR segment: Non–sustainable urban and tourism expansion threaten several natural reserves, coral reefs, and access to the coastal** 

The coastal segment that lies between the municipalities of Dorado and Arecibo along the northern coast of PR (Figure 1) has sustained a dramatic increase in urban development over the last decade, particularly following the completion of highway PR-22, the main transportation artery connecting San Juan with the northern and western portions of the island. In particular, the municipalities of Dorado and Barceloneta experimented a 12.2% and 11.2% population increase during 2010 in relation to 2000 (U.S. Census Bureau, 2010). Also the adjacent town of Toa Alta showed a 15.9% population increase. These figures contrast with the mean 2.2% population loss of the entire island during the same period and suggest the rapid urban expansion trend of the zone. In the case of Dorado and Vega Alta, there has been a boom in urban sprawling (horizontal construction) across the coastal alluvial plain. But most of the recently proposed projects are focused in the construction of tourism resorts with mixed residential components along the shoreline. Examples of these include a failed 300 acre resort named Playa Hermosa at Cibuco Ward, Vega Baja, which would have directly impacted the Cibuco River Swamp and Mangrove Natural Reserve, as well as several traditionally underserved communities and the Maisabel archeological site. During 2002 a very large apartment complex named Chalets de la Playa was built right on the Vega Baja beach named Tractores, with buildings constructed between 70 and only 45 meters from the shoreline. Some of these structures are in open violation of the existing maritime terrestrial zone restrictions for constructing permanent structures within 50 meters off the shoreline. Tractores Beach still supports the largest and more dense thickets of threatened Elkhorn coral, *Acropora palmata* across the northeastern Caribbean (Hernández-Delgado et al., 2011). The apartment complex was built right behind a remnant sand dune, with its concrete fence right on the maritime terrestrial zone, less than 20 m off the shoreline, impeding beach access, and causing recurrent turbid runoff of storm waters from a retention pond located just 28 meters off the shoreline that reach the adjacent Acroporid reefs and cause recurrent coral and benthic invertebrate mortalities. The original project included a proposal to construct an artificial beach that would have included blasting of existing beach rock and rocky bottoms along the shore, the total elimination seagrasses, partial elimination of reef habitats, the construction of several breakwaters and massive sand filling of the area. Even without completing a full environmental impact analysis and completing its permitting process, this proposal even went to the stage of permit application at the U.S. Corps of Engineers, but local communities got organized, strongly opposed, and defeated it.

units, a 9-hole and an 18-hole golf course, among other related facilities in lands within and adjacent to the NEC; (2) San Miguel Resort - consisting of 1,450 residential and hotel units and two golf courses, of 18-holes and 9 holes each, among other related facilities. Over 80% of the units proposed by both projects were exclusively residential, which seriously undermined the developers' claim that these were tourism projects. If constructed, the Dos Mares Resort and the San Miguel Resort would result in massive deforestation, soil erosion, land movement, filling of wetlands, channelization of rivers, and the removal of coastal vegetation, significantly impacting many of the protected species and other living resources that depend on the NEC. The project's golf course maintenance practices would include the use of toxic substances such as herbicides, which could affect the water quality of surface, underground, and coastal waters, including adjacent coral reefs. In addition, both projects would severely limit public access to the NEC's beaches, public lands and other public natural resources, as would further increase the competition for water supplies needed by local communities, and thus potentially affecting the quality of life of thousands of citizens in the eastern region of PR.

As a response to these threats, a coalition of local community and environmental groups, organized under the NEC Coalition, initiated a public campaign to protect the NEC as a Natural Reserve with the vision to promote its economic development through the sustainable construction of eco-hotels and the operation of small-scale nature tourism amenities, as well as the revitalization of adjacent town centers that could serve as gateways to this natural protected area. After 10 years of public campaign, the Coalition celebrated the decision of former governor Aníbal Acevedo-Vilá (2004-2008) of signing an Executive Order on October 2007 that established as public policy the conservation of the NEC as a Nature Reserve while promoting its sustainable tourism development (Commonwealth of Puerto Rico [CPR], 2007). After the approval of this Executive Order, the NEC was officially designated by the PRPB as a Natural Reserve in April 2008, more than three decades after it was originally proposed by the PR Coastal Zone Management Program in 1978 (CPR, 2008). In addition, local agencies presented a Comprehensive Land Use and Management Plan for the NEC through a participatory planning process with the purpose of establishing clear guidelines for the development of outdoor recreational and ecotourism facilities in the area (PRDNER, 2008). This Comprehensive Plan was endorsed by a wide array of Commonwealth and Federal agencies, academic institutions, local community groups, as well as local and international conservation organizations. The USFWS and the National Oceanic and Atmospheric Administration (NOAA) also supported these efforts by assigning more than \$3 million in funding for the acquisition of private lands in the NEC, as a means of strengthening its conservation as a natural protected area.

In spite of this extraordinary conservation story, in another unprecedented action in the legal history of PR, governor Luis Fortuño (2008-2012) eliminated the NEC designation as a Nature Reserve on October 30, 2009. On June 28, 2011, the Fortuño administration approved the new Great Northeastern Reserve, as well as a new Special Land Use Plan that promoted the fragmentation and urban development of the Corridor by allowing the construction of residential-tourism projects within 450 acres of the former Natural Reserve (PRPB and PRDNER, 2011). Coincidentally, these 450 acres coincide perfectly with the urban development footprint of former residential and tourism projects proposed at the NEC, such as the San Miguel Resort, the Dos Mares Resort, Paradise Found Villas, and Seven Seas

units, a 9-hole and an 18-hole golf course, among other related facilities in lands within and adjacent to the NEC; (2) San Miguel Resort - consisting of 1,450 residential and hotel units and two golf courses, of 18-holes and 9 holes each, among other related facilities. Over 80% of the units proposed by both projects were exclusively residential, which seriously undermined the developers' claim that these were tourism projects. If constructed, the Dos Mares Resort and the San Miguel Resort would result in massive deforestation, soil erosion, land movement, filling of wetlands, channelization of rivers, and the removal of coastal vegetation, significantly impacting many of the protected species and other living resources that depend on the NEC. The project's golf course maintenance practices would include the use of toxic substances such as herbicides, which could affect the water quality of surface, underground, and coastal waters, including adjacent coral reefs. In addition, both projects would severely limit public access to the NEC's beaches, public lands and other public natural resources, as would further increase the competition for water supplies needed by local communities, and thus potentially affecting the quality of life of thousands of citizens

As a response to these threats, a coalition of local community and environmental groups, organized under the NEC Coalition, initiated a public campaign to protect the NEC as a Natural Reserve with the vision to promote its economic development through the sustainable construction of eco-hotels and the operation of small-scale nature tourism amenities, as well as the revitalization of adjacent town centers that could serve as gateways to this natural protected area. After 10 years of public campaign, the Coalition celebrated the decision of former governor Aníbal Acevedo-Vilá (2004-2008) of signing an Executive Order on October 2007 that established as public policy the conservation of the NEC as a Nature Reserve while promoting its sustainable tourism development (Commonwealth of Puerto Rico [CPR], 2007). After the approval of this Executive Order, the NEC was officially designated by the PRPB as a Natural Reserve in April 2008, more than three decades after it was originally proposed by the PR Coastal Zone Management Program in 1978 (CPR, 2008). In addition, local agencies presented a Comprehensive Land Use and Management Plan for the NEC through a participatory planning process with the purpose of establishing clear guidelines for the development of outdoor recreational and ecotourism facilities in the area (PRDNER, 2008). This Comprehensive Plan was endorsed by a wide array of Commonwealth and Federal agencies, academic institutions, local community groups, as well as local and international conservation organizations. The USFWS and the National Oceanic and Atmospheric Administration (NOAA) also supported these efforts by assigning more than \$3 million in funding for the acquisition of private lands in the NEC, as a means

In spite of this extraordinary conservation story, in another unprecedented action in the legal history of PR, governor Luis Fortuño (2008-2012) eliminated the NEC designation as a Nature Reserve on October 30, 2009. On June 28, 2011, the Fortuño administration approved the new Great Northeastern Reserve, as well as a new Special Land Use Plan that promoted the fragmentation and urban development of the Corridor by allowing the construction of residential-tourism projects within 450 acres of the former Natural Reserve (PRPB and PRDNER, 2011). Coincidentally, these 450 acres coincide perfectly with the urban development footprint of former residential and tourism projects proposed at the NEC, such as the San Miguel Resort, the Dos Mares Resort, Paradise Found Villas, and Seven Seas

of strengthening its conservation as a natural protected area.

in the eastern region of PR.

Resort, among others. The direct, indirect, and cumulative threats of this new special zoning plan are significant: heavy human use, artificial light and noise, increased run-off, and downstream pollution of future developments will vastly change the character of the undeveloped forests and beaches of the Corridor, will permanently and unavoidably damage important ecosystems and its related species, and will eliminate the NEC's extraordinary recreational, tourism, and economic development potential as a regional, lowimpact ecotourism attraction. The NEC Coalition is currently engaged in continuing its campaign in favor of the NEC, specifically urging the government of PR to reinstate the designation the NEC as a Natural Reserve in its totality and reverse its decision to open this extraordinary ecological area to residential and tourism construction.

#### **3.4 The Dorado-Arecibo northern PR segment: Non–sustainable urban and tourism expansion threaten several natural reserves, coral reefs, and access to the coastal zone**

The coastal segment that lies between the municipalities of Dorado and Arecibo along the northern coast of PR (Figure 1) has sustained a dramatic increase in urban development over the last decade, particularly following the completion of highway PR-22, the main transportation artery connecting San Juan with the northern and western portions of the island. In particular, the municipalities of Dorado and Barceloneta experimented a 12.2% and 11.2% population increase during 2010 in relation to 2000 (U.S. Census Bureau, 2010). Also the adjacent town of Toa Alta showed a 15.9% population increase. These figures contrast with the mean 2.2% population loss of the entire island during the same period and suggest the rapid urban expansion trend of the zone. In the case of Dorado and Vega Alta, there has been a boom in urban sprawling (horizontal construction) across the coastal alluvial plain. But most of the recently proposed projects are focused in the construction of tourism resorts with mixed residential components along the shoreline. Examples of these include a failed 300 acre resort named Playa Hermosa at Cibuco Ward, Vega Baja, which would have directly impacted the Cibuco River Swamp and Mangrove Natural Reserve, as well as several traditionally underserved communities and the Maisabel archeological site. During 2002 a very large apartment complex named Chalets de la Playa was built right on the Vega Baja beach named Tractores, with buildings constructed between 70 and only 45 meters from the shoreline. Some of these structures are in open violation of the existing maritime terrestrial zone restrictions for constructing permanent structures within 50 meters off the shoreline. Tractores Beach still supports the largest and more dense thickets of threatened Elkhorn coral, *Acropora palmata* across the northeastern Caribbean (Hernández-Delgado et al., 2011). The apartment complex was built right behind a remnant sand dune, with its concrete fence right on the maritime terrestrial zone, less than 20 m off the shoreline, impeding beach access, and causing recurrent turbid runoff of storm waters from a retention pond located just 28 meters off the shoreline that reach the adjacent Acroporid reefs and cause recurrent coral and benthic invertebrate mortalities. The original project included a proposal to construct an artificial beach that would have included blasting of existing beach rock and rocky bottoms along the shore, the total elimination seagrasses, partial elimination of reef habitats, the construction of several breakwaters and massive sand filling of the area. Even without completing a full environmental impact analysis and completing its permitting process, this proposal even went to the stage of permit application at the U.S. Corps of Engineers, but local communities got organized, strongly opposed, and defeated it.

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

**A history of bombs, land abuse, and environmental corruption in paradise** 

military target practice in 1975 (Copaken, 2009; Feliciano-Encarnación, 2009).

With strong financial incentives provided by the US Coastal Zone Management Act, the Culebra Segment of the Coastal Zone Management Plan (1976) was created with emphasis to protecting Culebra's stellar coral reefs. In order to receive the Federal funding associated with the coastal zone management plan, the Government of PR agreed to put into place Law 66, 1975 – unprecedented environmental legislation that sought to balance

Culebra is an archipelago composed of 23 islands or cays, located equidistant between the island of PR and the island of St. Thomas, USVI (Figure 1). The main island of Culebra measures about 11 x 7 km, and has roughly 2,000 residents. It was inhabited by pre-Columbian Taíno indians, colonized by Spain in 1880, and then moved under U.S. jurisdiction as spoils of the Spanish-American war in 1898 (Feliciano, 1976). By virtue of a presidential decree, vast extensions of Culebra became property of the U.S. Navy in 1901, becoming a military training facility for nearly eight decades (Delgado-Cintrón, 1989). The U.S. government deprived locals entry for swimming or fishing of much of their own waters because of the military target maneuvers (Feliciano, 1976). The original old town of San Ildefonso de la Culebra was destroyed and wiped out by the U.S. Navy and residents were relocated to different areas of the island. A concerted effort was made by the military to drive residents completely off the island (Feliciano-Encarnación, 2009). For decades, the Culebrenses lived under the constant harassment of restless ship to ground and air to ground bombing activities and artillery practices at any time, women were harassed or sexually abused by military personnel, navigation, fishing and beach recreation were prohibited, and no forms of tourism or urban development existed in the island until the late 1970s. Under the strong leadership of former mayor, the Honorable Don Ramon Feliciano-Encarnación (1958-1980), who was also a fisherman, and with the legal assistance from a young, idealistic Harvard educated lawyer, Richard Copaken, 750 local families in both non-violent and physical protest managed to end the over 70 years of abuse of their islands for international

existed for generations on these areas.

**Culebra Island in a nutshell** 

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 377

archeological sites in PR. Another mega-resort named Island Cove has been proposed for construction along the beach adjacent to this Natural Reserve, while an apartment complex has been proposed right within the maritime terrestrial zone at Peñón de Mera, Arecibo, just off the Arecibo lighthouse, and eight apartment buildings have been also proposed right in front of the local beach called Caza y Pesca, at Arecibo. The northern coastal area of PR has become a very threatening and dangerous example of the consistent, negligent, corrupt, unscrupulous, and often illegal pattern of tourism and residential construction that is being forced in conjunction by private investors, as well as state and municipal governments, even in open violation of existing state and federal regulations, and under an absolute negation of the potential risks of constructing permanent structures along the shoreline in a time of unequivocal climate change and rapid sea level rise (see Titus et al. 2009). Though most, if not all of these approaches have faced strong grassroot and often legal opposition by traditionally underserved communities. However, these actions have not been enough to stop the massive assault to natural coastal resources and to base communities that have

Local insults along Vega Baja beach continued during 2011 when an illegal gas station constructed at only 150 meters from the maritime terrestrial zone, and adjacent to Chalets de la Playa in 2008 was opened after three years of struggle with opposing local communities due to the direct intervention of the PRPB which modified an existing rule that prohibited the construction of gas stations within a given distance from another one. This project never had an environmental impact analysis and originally was constructing a 60 cm wide pipe to discharge oil-polluted storm waters directly atop an *Acropora palmata* reef known as El Eco, but was stopped again by the community organized under non-governmental organization *Vegabajeños Impulsando Desarrollo Ambiental Sustentable* (*VIDAS*) when the pipe was only about 30 meters from the shoreline. The pipeline was removed and substituted by an underground tank which is presumed to leak towards the water table. Due to the porous nature of the underlying rocks, water-borne pollutants are expected to have access to adjacent reefs. Due to the karstic nature of the soils, pollutants should be easily reaching the adjacent reefs. No actions from regulatory agencies have been taken to prevent pollution. In addition, another apartment complex called Vegamar Apartments was proposed right across the maritime terrestrial zone of Sarapa Beach, Vega Baja. In this particular case, *VIDAS*, in collaboration with other representatives from the local communities, took legal action to stop the project which would have impacted about 8 acres of coastal lands and beach access to the most significant surfing beach of the zone, which also harbors important remnant patches of Elkhorn corals. Although the community has prevailed in their legal action, the case was appealed by the developer and is still under review by the PR Supreme Court. For the record, former Vega Baja mayor Edgar Santana (2004-2011) was sentenced to 18 years in prison in 2011 for extortion and bribing several local developers, some of which were associated to several tourism and urban projects across the northern PR region. Also, the municipal government of Manatí was recently proposing the construction of a tourism resort right at the public beach of Los Tubos. These are not only public lands, but also part of the legally-defined buffer zone of Tortuguero Lagoon Natural Reserve. The project did not even made it out to the permitting processes due to the strong opposition of organized local communities and *VIDAS*. As an alternative, the municipal government is currently considering low-impact tourism development alternatives proposed by local residents.

There was also a recent dramatic case of a forced expropriation and destruction of many houses of residents of the traditionally underserved coastal communities of La Boca, Palmas Altas, and Isla del Roque, in Barceloneta, earlier in 2011. The dramatic part of the history is that there was no previous negotiation, administrative or legal actions in the process, and the forced action was ordered by the own mayor of Barceloneta, Sol Luis Fontánez (1986- 2012), who was promoting the privatization of these lands for the construction of tourism resorts and apartment buildings by several private investors. Base communities got eventually organized and took legal action against the municipality to stop further structure demolitions, a process that is still in court. Further, Mayor Fontánez was put into jail in February 2012 with Federal charges of corruption and bribery in agreement with private developers. He is currently waiting full trial. Also, state road PR-681, which runs parallel to the shoreline from Barceloneta to Arecibo, has also become another hot spot for a variety of proposed projects. A very large urbanization was recently approved at flooding and tsunami-prone lands right adjacent to the protected wetlands of Caño Tiburones Natural Reserve, Arecibo. Also another apartment complex has been proposed right adjacent to the beach at Cueva del Indio Natural Reserve, which also harbors one of the most significant archeological sites in PR. Another mega-resort named Island Cove has been proposed for construction along the beach adjacent to this Natural Reserve, while an apartment complex has been proposed right within the maritime terrestrial zone at Peñón de Mera, Arecibo, just off the Arecibo lighthouse, and eight apartment buildings have been also proposed right in front of the local beach called Caza y Pesca, at Arecibo. The northern coastal area of PR has become a very threatening and dangerous example of the consistent, negligent, corrupt, unscrupulous, and often illegal pattern of tourism and residential construction that is being forced in conjunction by private investors, as well as state and municipal governments, even in open violation of existing state and federal regulations, and under an absolute negation of the potential risks of constructing permanent structures along the shoreline in a time of unequivocal climate change and rapid sea level rise (see Titus et al. 2009). Though most, if not all of these approaches have faced strong grassroot and often legal opposition by traditionally underserved communities. However, these actions have not been enough to stop the massive assault to natural coastal resources and to base communities that have existed for generations on these areas.

#### **Culebra Island in a nutshell**

376 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Local insults along Vega Baja beach continued during 2011 when an illegal gas station constructed at only 150 meters from the maritime terrestrial zone, and adjacent to Chalets de la Playa in 2008 was opened after three years of struggle with opposing local communities due to the direct intervention of the PRPB which modified an existing rule that prohibited the construction of gas stations within a given distance from another one. This project never had an environmental impact analysis and originally was constructing a 60 cm wide pipe to discharge oil-polluted storm waters directly atop an *Acropora palmata* reef known as El Eco, but was stopped again by the community organized under non-governmental organization *Vegabajeños Impulsando Desarrollo Ambiental Sustentable* (*VIDAS*) when the pipe was only about 30 meters from the shoreline. The pipeline was removed and substituted by an underground tank which is presumed to leak towards the water table. Due to the porous nature of the underlying rocks, water-borne pollutants are expected to have access to adjacent reefs. Due to the karstic nature of the soils, pollutants should be easily reaching the adjacent reefs. No actions from regulatory agencies have been taken to prevent pollution. In addition, another apartment complex called Vegamar Apartments was proposed right across the maritime terrestrial zone of Sarapa Beach, Vega Baja. In this particular case, *VIDAS*, in collaboration with other representatives from the local communities, took legal action to stop the project which would have impacted about 8 acres of coastal lands and beach access to the most significant surfing beach of the zone, which also harbors important remnant patches of Elkhorn corals. Although the community has prevailed in their legal action, the case was appealed by the developer and is still under review by the PR Supreme Court. For the record, former Vega Baja mayor Edgar Santana (2004-2011) was sentenced to 18 years in prison in 2011 for extortion and bribing several local developers, some of which were associated to several tourism and urban projects across the northern PR region. Also, the municipal government of Manatí was recently proposing the construction of a tourism resort right at the public beach of Los Tubos. These are not only public lands, but also part of the legally-defined buffer zone of Tortuguero Lagoon Natural Reserve. The project did not even made it out to the permitting processes due to the strong opposition of organized local communities and *VIDAS*. As an alternative, the municipal government is currently considering low-impact tourism development alternatives proposed by local residents.

There was also a recent dramatic case of a forced expropriation and destruction of many houses of residents of the traditionally underserved coastal communities of La Boca, Palmas Altas, and Isla del Roque, in Barceloneta, earlier in 2011. The dramatic part of the history is that there was no previous negotiation, administrative or legal actions in the process, and the forced action was ordered by the own mayor of Barceloneta, Sol Luis Fontánez (1986- 2012), who was promoting the privatization of these lands for the construction of tourism resorts and apartment buildings by several private investors. Base communities got eventually organized and took legal action against the municipality to stop further structure demolitions, a process that is still in court. Further, Mayor Fontánez was put into jail in February 2012 with Federal charges of corruption and bribery in agreement with private developers. He is currently waiting full trial. Also, state road PR-681, which runs parallel to the shoreline from Barceloneta to Arecibo, has also become another hot spot for a variety of proposed projects. A very large urbanization was recently approved at flooding and tsunami-prone lands right adjacent to the protected wetlands of Caño Tiburones Natural Reserve, Arecibo. Also another apartment complex has been proposed right adjacent to the beach at Cueva del Indio Natural Reserve, which also harbors one of the most significant

#### **A history of bombs, land abuse, and environmental corruption in paradise**

Culebra is an archipelago composed of 23 islands or cays, located equidistant between the island of PR and the island of St. Thomas, USVI (Figure 1). The main island of Culebra measures about 11 x 7 km, and has roughly 2,000 residents. It was inhabited by pre-Columbian Taíno indians, colonized by Spain in 1880, and then moved under U.S. jurisdiction as spoils of the Spanish-American war in 1898 (Feliciano, 1976). By virtue of a presidential decree, vast extensions of Culebra became property of the U.S. Navy in 1901, becoming a military training facility for nearly eight decades (Delgado-Cintrón, 1989). The U.S. government deprived locals entry for swimming or fishing of much of their own waters because of the military target maneuvers (Feliciano, 1976). The original old town of San Ildefonso de la Culebra was destroyed and wiped out by the U.S. Navy and residents were relocated to different areas of the island. A concerted effort was made by the military to drive residents completely off the island (Feliciano-Encarnación, 2009). For decades, the Culebrenses lived under the constant harassment of restless ship to ground and air to ground bombing activities and artillery practices at any time, women were harassed or sexually abused by military personnel, navigation, fishing and beach recreation were prohibited, and no forms of tourism or urban development existed in the island until the late 1970s. Under the strong leadership of former mayor, the Honorable Don Ramon Feliciano-Encarnación (1958-1980), who was also a fisherman, and with the legal assistance from a young, idealistic Harvard educated lawyer, Richard Copaken, 750 local families in both non-violent and physical protest managed to end the over 70 years of abuse of their islands for international military target practice in 1975 (Copaken, 2009; Feliciano-Encarnación, 2009).

With strong financial incentives provided by the US Coastal Zone Management Act, the Culebra Segment of the Coastal Zone Management Plan (1976) was created with emphasis to protecting Culebra's stellar coral reefs. In order to receive the Federal funding associated with the coastal zone management plan, the Government of PR agreed to put into place Law 66, 1975 – unprecedented environmental legislation that sought to balance

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

development fallen prey to short sighted corruption.

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 379

("Villas of My Native Land") proposed the first access-controlled urbanization for the island and included 110 luxury residences, two hotels and commercial space on less than 94 acres. But in early March 2012, the PR Appeals Court resolved in a lawsuit initiated by local non-governmental organization Coralations that the Planning Board approved the project without complying with the density parameters established for Culebra. These special, low-density zoning parameters were implemented to protect the ecological integrity of the island and her beautiful coral reefs. Therefore, this stopped the project at least as it was originally proposed. There have also been several recurrent attempts to block historical public beach accesses by private owners at Bahía Mosquito, Playa Manzanillo, and the emblematic Playa Flamenco, some of which have resulted in futile legal actions against local residents for alleged trespassing. Further, state and federal regulatory agencies have issued illegal permits for construction in highly sensitive watersheds and steep slopes that have resulted in dramatic impacts from erosion and sedimentation on adjacent coral reefs, seagrass communities and turtle nesting beaches (Ramos-Scharrón et al., 2012). In addition, Cayo Norte, a small private key located north of Culebra, was recently sold in a bid to millionaire investor, Daniel Shelley, who also owns the largest marina in the Caribbean, Marina Puerto del Rey, located in Fajardo, PR. There are already permits approved to initiate development of the cay and to construct a pier. There is fear in the community that a large-scale resort and marina will be constructed on the cay. There certainly will be no hope for Culebra unless meaningful public participation in planning and responsible local and federal agency oversight is restored. Today Culebra has lost much of the natural value it possessed during the past decade, some via direct impacts to coastal resources, to climate change, and other due to lack of meaningful oversight or direct corruption of a legitimate planning process. The island serves as another example in the data base of islands that demonstrate sustainable tourism

**4. The rapid-growing cruise ship industry: Increasing revenues, but for who?**  According to Murray (2005), cruise tourism has been the fastest growing sector of the tourist industry for the past decades. Since 1980, the industry has had an average annual passenger growth rate of 8.1% (Dowling, 2006). Cruise tourism has exploded around the Caribbean during the last two decades (Brida & Zapata-Aguirre, 2008). This growth is expected to continue into the future (CLIA, 2005; Dowling, 2006). However, the economic bonanza attributed to the cruise ship industry can be misleading because they are not corrected for leakage—the occurrence of tourist revenue flowing out of the country in which it was spent, a particular problem for many small islands (Loper, 2005; Squillante et al., 2004). One of the most critical concerns by residents from small island nations is the final destiny of economic revenues associated to the cruise tourism industry. According to Brida and Zapata-Aguirre (2008), more than 50% of land-based activities are sold on board by the own cruise ships. From the value paid by cruisers for on shore activities, the local tour operator is left with a level of only 50% to 25% of that value. Tourism service providers who want to appear in advertisements delivered on board (videos, brochures, etc.) have to pay significant amounts for it. Others incomes provide from private "dream islands", privatized islands property of each cruise line, most often within the territorial waters of developing island nations. This clearly reduces or eliminates the economic benefit to communities not to disembark at the

development to conservation. The plan was based on a low density zoning for Culebra. Law 66, 1975 also created the Culebra Conservation and Development Authority – a board comprised of Federal and local government officials intended to ensure Culebra's future development was locally controlled and sustainable. Culebra Island also got its own Land Use Plan in 1977. Therefore, the island rapidly got unique unprecedented land planning and regulatory tools. By the mid-1980s, and only a decade after the military abuse ended, and under the administration of former mayor Anastacio Soto-Ayala (1980-1996), Culebra enjoyed a steady unemployment rate of only 2%, with 0% involuntary unemployment. A high caliber repeat tourist visited the island specifically to enjoy nature, peace and tranquility, and the unique island culture. While project proposals increased in late 1980s to late 1990s, local government leadership staved off development pressures until the administration changed in 1996. At this time, the local administration of the late mayor, Abraham Peña-Nieves (1996-2000; 2004-2011\*died in October 2011), and under former governor Pedro Rosselló administration (1992-2000), shifted toward a fast tracked project approval and construction, compromising meaningful public participation and the island began feeling the irreparable harm of unplanned coastal tourism development.

The first visible large-scale resorts, Costa Bonita (now Sea Breeze Hotel after the latest of five bankruptcies) and Bahía Marina seeped onto the island without previous meaningful public participation. The area proposed for Costa Bonita was a hillside peninsula bordered by USFWS National Refuge mangrove wetlands, the outskirts of which were being considered for protection as a Federal Bird Sanctuary - Canal de Bruly. All neighboring property owners opposed the change in the protective zoning needed for the project to proceed, but the developer partnered with the PRTC and declared a state of "tourism"emergency. The emergency proclamation declared that Culebra needed more hotel rooms. This allowed a rule of exception to variance, and the protective zoning was eliminated despite public opposition, soil constraints and proximity to Federal Refuge. Coastal mangroves were removed and swimming pools were built inside the salt flats of the project, within the public domains of the maritime terrestrial zone. More significantly, this resort was built on areas considered as having a medium risk for unexploded ordnance (UXO), adjacent to an area investigated for chemical clean up - in an area formerly used as NAVY training grounds. In addition, this development was located on an apparent former Taíno indian village, still lacking an adequate archaeological evaluation.. Over the past decade overall tourism and housing construction on Culebra has largely represented a snake eating its own tail. While the delayed development on the island offered some hope of the incorporation of lessons learned from other islands, lack of municipal leadership and the failure of both local and federal agencies to implement their non-jurisdictional duties of oversight seem to have doomed the future of Culebra to the same short-sighted fate of unsustainable tourism development that harms the coastal resources of other Caribbean islands, including the main island of PR. Further large-scale housing projects, which are hidden under the eco-tourism umbrella, are under different stages in the permitting process. These include the 100 acre resort Villa Mi Terruño, villas at Posada del Coronel, the small resort Villas de Andrades, and the large-scale resort Villas de Carenero, which has also proposed the construction of the first large-scale private marina in Culebra.

In spite of being proposed as "sustainable" and "green", the project called Villa Mi Terruño

development to conservation. The plan was based on a low density zoning for Culebra. Law 66, 1975 also created the Culebra Conservation and Development Authority – a board comprised of Federal and local government officials intended to ensure Culebra's future development was locally controlled and sustainable. Culebra Island also got its own Land Use Plan in 1977. Therefore, the island rapidly got unique unprecedented land planning and regulatory tools. By the mid-1980s, and only a decade after the military abuse ended, and under the administration of former mayor Anastacio Soto-Ayala (1980-1996), Culebra enjoyed a steady unemployment rate of only 2%, with 0% involuntary unemployment. A high caliber repeat tourist visited the island specifically to enjoy nature, peace and tranquility, and the unique island culture. While project proposals increased in late 1980s to late 1990s, local government leadership staved off development pressures until the administration changed in 1996. At this time, the local administration of the late mayor, Abraham Peña-Nieves (1996-2000; 2004-2011\*died in October 2011), and under former governor Pedro Rosselló administration (1992-2000), shifted toward a fast tracked project approval and construction, compromising meaningful public participation and the island

began feeling the irreparable harm of unplanned coastal tourism development.

marina in Culebra.

The first visible large-scale resorts, Costa Bonita (now Sea Breeze Hotel after the latest of five bankruptcies) and Bahía Marina seeped onto the island without previous meaningful public participation. The area proposed for Costa Bonita was a hillside peninsula bordered by USFWS National Refuge mangrove wetlands, the outskirts of which were being considered for protection as a Federal Bird Sanctuary - Canal de Bruly. All neighboring property owners opposed the change in the protective zoning needed for the project to proceed, but the developer partnered with the PRTC and declared a state of "tourism"emergency. The emergency proclamation declared that Culebra needed more hotel rooms. This allowed a rule of exception to variance, and the protective zoning was eliminated despite public opposition, soil constraints and proximity to Federal Refuge. Coastal mangroves were removed and swimming pools were built inside the salt flats of the project, within the public domains of the maritime terrestrial zone. More significantly, this resort was built on areas considered as having a medium risk for unexploded ordnance (UXO), adjacent to an area investigated for chemical clean up - in an area formerly used as NAVY training grounds. In addition, this development was located on an apparent former Taíno indian village, still lacking an adequate archaeological evaluation.. Over the past decade overall tourism and housing construction on Culebra has largely represented a snake eating its own tail. While the delayed development on the island offered some hope of the incorporation of lessons learned from other islands, lack of municipal leadership and the failure of both local and federal agencies to implement their non-jurisdictional duties of oversight seem to have doomed the future of Culebra to the same short-sighted fate of unsustainable tourism development that harms the coastal resources of other Caribbean islands, including the main island of PR. Further large-scale housing projects, which are hidden under the eco-tourism umbrella, are under different stages in the permitting process. These include the 100 acre resort Villa Mi Terruño, villas at Posada del Coronel, the small resort Villas de Andrades, and the large-scale resort Villas de Carenero, which has also proposed the construction of the first large-scale private

In spite of being proposed as "sustainable" and "green", the project called Villa Mi Terruño

("Villas of My Native Land") proposed the first access-controlled urbanization for the island and included 110 luxury residences, two hotels and commercial space on less than 94 acres. But in early March 2012, the PR Appeals Court resolved in a lawsuit initiated by local non-governmental organization Coralations that the Planning Board approved the project without complying with the density parameters established for Culebra. These special, low-density zoning parameters were implemented to protect the ecological integrity of the island and her beautiful coral reefs. Therefore, this stopped the project at least as it was originally proposed. There have also been several recurrent attempts to block historical public beach accesses by private owners at Bahía Mosquito, Playa Manzanillo, and the emblematic Playa Flamenco, some of which have resulted in futile legal actions against local residents for alleged trespassing. Further, state and federal regulatory agencies have issued illegal permits for construction in highly sensitive watersheds and steep slopes that have resulted in dramatic impacts from erosion and sedimentation on adjacent coral reefs, seagrass communities and turtle nesting beaches (Ramos-Scharrón et al., 2012). In addition, Cayo Norte, a small private key located north of Culebra, was recently sold in a bid to millionaire investor, Daniel Shelley, who also owns the largest marina in the Caribbean, Marina Puerto del Rey, located in Fajardo, PR. There are already permits approved to initiate development of the cay and to construct a pier. There is fear in the community that a large-scale resort and marina will be constructed on the cay. There certainly will be no hope for Culebra unless meaningful public participation in planning and responsible local and federal agency oversight is restored. Today Culebra has lost much of the natural value it possessed during the past decade, some via direct impacts to coastal resources, to climate change, and other due to lack of meaningful oversight or direct corruption of a legitimate planning process. The island serves as another example in the data base of islands that demonstrate sustainable tourism development fallen prey to short sighted corruption.

#### **4. The rapid-growing cruise ship industry: Increasing revenues, but for who?**

According to Murray (2005), cruise tourism has been the fastest growing sector of the tourist industry for the past decades. Since 1980, the industry has had an average annual passenger growth rate of 8.1% (Dowling, 2006). Cruise tourism has exploded around the Caribbean during the last two decades (Brida & Zapata-Aguirre, 2008). This growth is expected to continue into the future (CLIA, 2005; Dowling, 2006). However, the economic bonanza attributed to the cruise ship industry can be misleading because they are not corrected for leakage—the occurrence of tourist revenue flowing out of the country in which it was spent, a particular problem for many small islands (Loper, 2005; Squillante et al., 2004). One of the most critical concerns by residents from small island nations is the final destiny of economic revenues associated to the cruise tourism industry. According to Brida and Zapata-Aguirre (2008), more than 50% of land-based activities are sold on board by the own cruise ships. From the value paid by cruisers for on shore activities, the local tour operator is left with a level of only 50% to 25% of that value. Tourism service providers who want to appear in advertisements delivered on board (videos, brochures, etc.) have to pay significant amounts for it. Others incomes provide from private "dream islands", privatized islands property of each cruise line, most often within the territorial waters of developing island nations. This clearly reduces or eliminates the economic benefit to communities not to disembark at the

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 381

often treat local cultures as spectacles for visitors. Ethnic groups are often viewed as a major "exotic" asset in attracting visitors (Pleumarom, 1995). That type of exploitation often generates more revenue to the tourism companies than to local communities (Diedrich, 2006, 2010), and according to McDaniel (2008), "tourism development can become the worst enemy of tourism development: The concept of tourism development being hijacked by for-profit developers without any interest in the conservation of natural resources, in sustainable practices or in fostering community development and integration into the tourism development model". Under such globalized increasing economic pressure, local island governments often feel charged with promoting and further developing their island's tourism

industry and infrastructure because of massive tourism's dominance in the economies.

and academics stopped the proposal in January 2012.

Coastal habitat destruction for the construction of tourism facilities and urban development, dredging, filling, shoreline modification (i.e., beach renourishment, artificial beach and breakwater construction), urban pollution (i.e., stormwaters, sewage, oil), heavy boating, recreational misuse, and overfishing can cause irrevocable damage to the delicate ecosystems of the islands and always contribute to permanent water quality degradation, which in turn cause a aesthetical value decline of local coastal resources for tourism (Goenaga, 1991; Hernández-Delgado, 2005; Hernández-Delgado & Sandoz, 2011). Tourism can harm wildlife endemic to the islands via the indirect introduction of alien invasive species throughout habitat fragmentation, deforestation, and other forms of alterations of native flora and fauna. Alien species can threaten endemic species by competing for habitat space, disrupting the community trophic chain, or introducing foreign disease. Also, tourism pressure can result in significant land degradation. Important land resources include minerals, fossil fuels, fertile soil, forests, wetlands and wildlife. Increased construction of tourism and recreational facilities, as well as residential projects, has increased the pressure on these resources and on scenic landscapes. Direct impact on natural resources, both renewable and nonrenewable, in the provision of tourist facilities can be caused by the use of land for accommodation and other infrastructure provision, and the use of building materials. Forests often suffer negative impacts of tourism due to deforestation caused by fuel wood collection and land clearing for construction of infrastructure. More recently, off-road vehicles have become extremely popular during the recent decade in PR, resulting in localized increases in habitat fragmentation, increased erosion of steep slopes, sedimentation of watersheds, filling of critical habitats for riverine fauna, and oil pollution of nearly pristine rivers. Even the PRDNER approved in December 2011 a private concession to operate off-road "eco-vehicles" to an unexperienced company within the Guánica State Forest, which was also designated in 1982 as a Biosphere Reserve by UNESCO. Permit was issued without public hearings and without environmental impact assessments. But strong opposition by adjacent communities, environmental organizations

Construction of coastal tourism and urban infrastructure in small islands can also exacerbate problems of space, resource availability, and coastal access for local residents to live on, and as well as taking away from the natural beauty of the island itself. The millions of tourists and travelers annually consume local resources such as energy, water and food, which have a significant impact on the local environment and ecosystems. Tourists consume exorbitant amounts of water, electricity, seafood, as well as many imported goods. Under very high consumption rates it may cause shortages and price fluctuations in many resources on small

destination. As a result, unequal revenue distribution has been associated with social and environmental costs to local people (Diedrich, 2006, Diedrich & Buades, 2009), which have also to absorb the socio-economic and environmental burden of massive pulses of visitors to locations which often lack most of the necessary infrastructure to support such level of visitors. Such a wrong economic model drives even some of the alleged green tourism far from sustainability, often creating a situation of environmental injustice. There are also issues of tourist pack behavior. A key impact of cruise tourism is the delivery of substantial numbers of tourists to remote destinations (Davenport & Davenport, 2006), and its consequent localized pollution pulses on port cities that may often lack adequate infrastructure to cope with a high density of people, pollution, etc. Overcrowding caused by this behavior can inconvenience and annoy local residents, causing the locals to alter their daily behavior to avoid the central business district while cruise ships are in port (Loper, 2005). Also, local residents from port cities have complained about deriving little economic benefits but feeling a loss of quality of life on the other (London, 2005). Thus, socio-economic benefits vs. the cost of impacts need to be weighted in the formula, besides considering only the economic revenues, when strategies for expanding the tourism industry are considered by local governments.

Cruise ships operations also generate significant environmental pollution. This results in direct discharges to the marine environment, including sewage, gray waters, hazardous wastes, oily bilge water, ballast water, and solid waste (Brida & Zapata-Aguirre, 2008). Cruise ships often dump this waste, legally or illegally, into international waters, which are carried by currents throughout the Caribbean and Antilles. They also emit air pollutants to the air and water. The environmental costs of the sector are incalculable given that the cruise ship industry is unregulated and impacts are difficult to gauge. Even small-scale incidents such as propeller wash (i.e., Cozumel Island, México, 2005) and anchoring can produce substantial physical damage on coral reefs habitats (Dinsdale & Harriott, 2004; Rogers & Garrison, 2001). This represents an extremely high environmental and socio-economic cost for an operation which is still too far from sustainable. Further, local governments in many small island nations have recently invested large amounts of money in high quality infrastructures to attend the new lines of colossal ships and thousands passengers arrivals but without any assurance that the benefits of attracting cruises to a tourism destination are higher than the costs (Brida & Zapata-Aguirre, 2008). Therefore, the rapidly growing cruise tourism industry is actually forcing local governments from poor small nations to invest money on building new infrastructure to prevent large cruise lines from abandoning the destination.

#### **5. The tourism trade-off in small tropical islands under climate change**

#### **5.1 The globalized tourism industry: Is the enemy within?**

Tourism has irrevocably altered tropical islands in many ways. It is impossible to keep an island completely untouched, but in many cases the coastal tourism and urban development industries have done irreparable harm to fragile natural resources, which often have longterm socio-economic consequences and alter the livelihood of local communities (Diedrich, 2006). Globalized large-scale tourism operations (i.e., cruise ships, hotels, shore-based excursions) affect tropical islands culturally, economically, and environmentally. It may

destination. As a result, unequal revenue distribution has been associated with social and environmental costs to local people (Diedrich, 2006, Diedrich & Buades, 2009), which have also to absorb the socio-economic and environmental burden of massive pulses of visitors to locations which often lack most of the necessary infrastructure to support such level of visitors. Such a wrong economic model drives even some of the alleged green tourism far from sustainability, often creating a situation of environmental injustice. There are also issues of tourist pack behavior. A key impact of cruise tourism is the delivery of substantial numbers of tourists to remote destinations (Davenport & Davenport, 2006), and its consequent localized pollution pulses on port cities that may often lack adequate infrastructure to cope with a high density of people, pollution, etc. Overcrowding caused by this behavior can inconvenience and annoy local residents, causing the locals to alter their daily behavior to avoid the central business district while cruise ships are in port (Loper, 2005). Also, local residents from port cities have complained about deriving little economic benefits but feeling a loss of quality of life on the other (London, 2005). Thus, socio-economic benefits vs. the cost of impacts need to be weighted in the formula, besides considering only the economic revenues, when strategies for expanding the tourism industry are considered

Cruise ships operations also generate significant environmental pollution. This results in direct discharges to the marine environment, including sewage, gray waters, hazardous wastes, oily bilge water, ballast water, and solid waste (Brida & Zapata-Aguirre, 2008). Cruise ships often dump this waste, legally or illegally, into international waters, which are carried by currents throughout the Caribbean and Antilles. They also emit air pollutants to the air and water. The environmental costs of the sector are incalculable given that the cruise ship industry is unregulated and impacts are difficult to gauge. Even small-scale incidents such as propeller wash (i.e., Cozumel Island, México, 2005) and anchoring can produce substantial physical damage on coral reefs habitats (Dinsdale & Harriott, 2004; Rogers & Garrison, 2001). This represents an extremely high environmental and socio-economic cost for an operation which is still too far from sustainable. Further, local governments in many small island nations have recently invested large amounts of money in high quality infrastructures to attend the new lines of colossal ships and thousands passengers arrivals but without any assurance that the benefits of attracting cruises to a tourism destination are higher than the costs (Brida & Zapata-Aguirre, 2008). Therefore, the rapidly growing cruise tourism industry is actually forcing local governments from poor small nations to invest money on building new infrastructure to prevent large cruise lines from abandoning the

**5. The tourism trade-off in small tropical islands under climate change** 

Tourism has irrevocably altered tropical islands in many ways. It is impossible to keep an island completely untouched, but in many cases the coastal tourism and urban development industries have done irreparable harm to fragile natural resources, which often have longterm socio-economic consequences and alter the livelihood of local communities (Diedrich, 2006). Globalized large-scale tourism operations (i.e., cruise ships, hotels, shore-based excursions) affect tropical islands culturally, economically, and environmentally. It may

**5.1 The globalized tourism industry: Is the enemy within?** 

by local governments.

destination.

often treat local cultures as spectacles for visitors. Ethnic groups are often viewed as a major "exotic" asset in attracting visitors (Pleumarom, 1995). That type of exploitation often generates more revenue to the tourism companies than to local communities (Diedrich, 2006, 2010), and according to McDaniel (2008), "tourism development can become the worst enemy of tourism development: The concept of tourism development being hijacked by for-profit developers without any interest in the conservation of natural resources, in sustainable practices or in fostering community development and integration into the tourism development model". Under such globalized increasing economic pressure, local island governments often feel charged with promoting and further developing their island's tourism industry and infrastructure because of massive tourism's dominance in the economies.

Coastal habitat destruction for the construction of tourism facilities and urban development, dredging, filling, shoreline modification (i.e., beach renourishment, artificial beach and breakwater construction), urban pollution (i.e., stormwaters, sewage, oil), heavy boating, recreational misuse, and overfishing can cause irrevocable damage to the delicate ecosystems of the islands and always contribute to permanent water quality degradation, which in turn cause a aesthetical value decline of local coastal resources for tourism (Goenaga, 1991; Hernández-Delgado, 2005; Hernández-Delgado & Sandoz, 2011). Tourism can harm wildlife endemic to the islands via the indirect introduction of alien invasive species throughout habitat fragmentation, deforestation, and other forms of alterations of native flora and fauna. Alien species can threaten endemic species by competing for habitat space, disrupting the community trophic chain, or introducing foreign disease. Also, tourism pressure can result in significant land degradation. Important land resources include minerals, fossil fuels, fertile soil, forests, wetlands and wildlife. Increased construction of tourism and recreational facilities, as well as residential projects, has increased the pressure on these resources and on scenic landscapes. Direct impact on natural resources, both renewable and nonrenewable, in the provision of tourist facilities can be caused by the use of land for accommodation and other infrastructure provision, and the use of building materials. Forests often suffer negative impacts of tourism due to deforestation caused by fuel wood collection and land clearing for construction of infrastructure. More recently, off-road vehicles have become extremely popular during the recent decade in PR, resulting in localized increases in habitat fragmentation, increased erosion of steep slopes, sedimentation of watersheds, filling of critical habitats for riverine fauna, and oil pollution of nearly pristine rivers. Even the PRDNER approved in December 2011 a private concession to operate off-road "eco-vehicles" to an unexperienced company within the Guánica State Forest, which was also designated in 1982 as a Biosphere Reserve by UNESCO. Permit was issued without public hearings and without environmental impact assessments. But strong opposition by adjacent communities, environmental organizations and academics stopped the proposal in January 2012.

Construction of coastal tourism and urban infrastructure in small islands can also exacerbate problems of space, resource availability, and coastal access for local residents to live on, and as well as taking away from the natural beauty of the island itself. The millions of tourists and travelers annually consume local resources such as energy, water and food, which have a significant impact on the local environment and ecosystems. Tourists consume exorbitant amounts of water, electricity, seafood, as well as many imported goods. Under very high consumption rates it may cause shortages and price fluctuations in many resources on small

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

coral reef ecosystems despite good management practices.

In many instances, tourism can also result in socio-cultural and economic impacts which may involve the physical displacement of traditionally underserved small communities, shifting livelihoods and population increases from immigration or, less tangible in the form of changes in morals and traditions, and local increases in crime (Diedrich, 2006) and prostitution (Cabezas, 2009; Padilla, 2007). In some particular places, dramatic social impacts have included child exploitation (Equation, 2009). According to Bruyere et al. (2009), many communities perceive that local base communities receive the least benefits from tourism revenues, and that there is also a lack of representation of local communities in the tourism

**5.2 Can sustainability be reached in a non-participatory globalized model?** 

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 383

The usual rapid economic revenue of non-sustainable, massive tourism activities is often one of the preferred tools for poverty reduction in developing countries, including many small island nations. But massive tourism often involves a chain of socio-cultural, economic, logistic and environmental problems. When nations consider tourism development, the potential for negative consequences is often overshadowed by the lure of economic benefits (Diedrich, 2006). When tourism development gets out of control, negative impacts are most likely to occur. In spite of the substantial economic benefits of the tourism industry, it can have three main types of effects, according to Gormsen (1997): (1) the development of seaside tourism including the changes of socio-economic and settlement patterns; (2) its cultural impact on the local population; and (3) its environmental aspects. Massive tourism may result detrimental on local water supplies, sensitive coastal landscapes, and sociocultural identity. In many cases, tourism has often had significant permanent negative environmental impacts on nearly pristine natural environments, particularly when construction and operation impacts where dismissed by regulatory government officials as non-significant (Equation, 2009). Burak et al. (2004) have documented negative impacts of rapid tourism expansion in coastal habitats that include loss of aesthetic value, rapid population densification, increased construction of multistory buildings adjacent to coastal areas, pollution, and the permanent loss of adjacent fertile agricultural lands. Sewage pollution has been a concern regarding long-term degradation of coral reefs (Hernández-Delgado et al., 2010, 2011; Pastorok & Bilyard, 1985), and regarding risks to recreational users (Bonkosky et al., 2009; Kocasoy, 1989). The construction of coastal resorts and roads, marinas, jetties and other infrastructure often result in significant coastal habitat fragmentation and reduced biodiversity (M'Rabet et al., 2009). There is also increased literature documenting adverse impacts from infilling, sedimentation and over-fishing for marine curios (Hawkins & Roberts, 1994), intertidal trampling on shallow-water coastal habitats (Davenport & Davenport, 2006; Hawkins & Roberts, 1993), and from snorkeling and SCUBA diving on coral reefs (Davenport & Davenport, 2006; Harriott et al., 1997; Hawkins & Roberts, 1992; Hawkins et al., 1999). Davenport and Davenport (2006) also documented the negative impacts of recurrent mechanical beach 'cleaning' (i.e., removal of natural strandlines as well as litter) that is practiced throughout the world's sandy beach resorts, a practice which is also carried out across many known turtle nestling beaches adjacent to hotels and urban zones in PR (Hernández-Delgado, pers. obs.). Further, under extremely high exploitation by massive tourism at some sites, these authors also documented negative impacts from relatively innocuous activities such as swimming, surfing, sailboarding, dinghy sailing and 'extreme sports' (e.g., 'coasteering', kitesurfing), which are marketed for its environmentally-friendly nature, yet causes measurable deterioration in many shallow

islands. Most islands with excessive water consumption often lack significant surface or underground sources of water to meet local pulse demands. Many large tourist resorts can potentially use on average five to ten times more water than residential areas in the Caribbean, and though many have recurred to expensive reverse osmosis to desalinize seawater, many local governments, such as in PR, have given high priority and supply water to tourism facilities and adjacent wealthy residential areas instead of securing a permanent water supply to local traditionally underserved communities. The tourism industry generally overuses water resources for hotels, swimming pools, golf courses and personal use of water by tourists. This can result in water shortages and degradation of water supplies, as well as generating a greater volume of wastewater, particularly, where water-consuming facilities have been established (i.e., golf courses). Golf course maintenance can deplete fresh water resources (Warnken et al., 2001). In recent years golf tourism has increased in popularity and the number of golf courses has grown rapidly, including PR, where there are already 20 golf courses. From these, 50% are located on the northern coast, 25% in the east, 10% in the west and south, respectively, and 5% in the central area. The largest concentration of golf courses is located in the coastal municipality of Dorado, with 5, followed by Río Grande with 4, Humacao with 3, and Fajardo with 2. In addition, at least 4 golf courses have been proposed for the NEC area in Luquillo. If approved, it will result in having a total of 10 golf courses in a 20 km stretch of coastline in northeastern PR. Golf courses require an enormous amount of water every day and, as with other causes of excessive extraction of water, this can result in water scarcity, as well as in significant impacts on adjacent wetlands, mangroves, rivers and coastal waters associated to habitat destruction, water diversification and the use of pesticides and fertilizers (McLean, 1993; Pleumarom, 1992). If the water comes from wells, overpumping can cause saline intrusion into groundwater. Golf resorts are also more and more often situated in or near protected areas or areas where resources are limited, exacerbating their impacts. Snow (1993) estimated that golf courses in humid areas across eastern U.S. may use between 10 and 20 MGY of water to maintain, while those across the arid southwest may require up to 500 MGY, amounts substantially larger than any regular community.

Tourist facilities, as well as large-scale urban development along coastal areas also increase pollution levels. Though many resorts have significantly improved their sewage treatment facilities, often using reclaimed water for irrigation purposes, there are still many areas where sewage is being emptied on adjacent beaches creating a significant threat to swimmers and to adjacent ecosystems from high fecal pollution (Kocasoy, 1995; Bonkosky et al., 2009). Also, ballast water from cruise ships can become a source of microbial contaminants. Many islands still lack adequate sewage treatment facilities, landfills, functional waste recycling programs, efficient sources of energy production or adequate massive transportation infrastructure. Therefore, waste minimization, improved energy efficiency, conservation and management of natural resources, including freshwater resources, wastewater management, hazardous substances transport, land-use planning and integrated coastal and tourism development management (with the integrated participation of local communities in planning and decision-making processes), design for sustainability, and partnerships for sustainable development are critical elements that are still largely lacking in the tourism industry across many small islands, including PR. Failing to recognize these elements will perpetuate the "enemy within" syndrome in the tourism industry.

islands. Most islands with excessive water consumption often lack significant surface or underground sources of water to meet local pulse demands. Many large tourist resorts can potentially use on average five to ten times more water than residential areas in the Caribbean, and though many have recurred to expensive reverse osmosis to desalinize seawater, many local governments, such as in PR, have given high priority and supply water to tourism facilities and adjacent wealthy residential areas instead of securing a permanent water supply to local traditionally underserved communities. The tourism industry generally overuses water resources for hotels, swimming pools, golf courses and personal use of water by tourists. This can result in water shortages and degradation of water supplies, as well as generating a greater volume of wastewater, particularly, where water-consuming facilities have been established (i.e., golf courses). Golf course maintenance can deplete fresh water resources (Warnken et al., 2001). In recent years golf tourism has increased in popularity and the number of golf courses has grown rapidly, including PR, where there are already 20 golf courses. From these, 50% are located on the northern coast, 25% in the east, 10% in the west and south, respectively, and 5% in the central area. The largest concentration of golf courses is located in the coastal municipality of Dorado, with 5, followed by Río Grande with 4, Humacao with 3, and Fajardo with 2. In addition, at least 4 golf courses have been proposed for the NEC area in Luquillo. If approved, it will result in having a total of 10 golf courses in a 20 km stretch of coastline in northeastern PR. Golf courses require an enormous amount of water every day and, as with other causes of excessive extraction of water, this can result in water scarcity, as well as in significant impacts on adjacent wetlands, mangroves, rivers and coastal waters associated to habitat destruction, water diversification and the use of pesticides and fertilizers (McLean, 1993; Pleumarom, 1992). If the water comes from wells, overpumping can cause saline intrusion into groundwater. Golf resorts are also more and more often situated in or near protected areas or areas where resources are limited, exacerbating their impacts. Snow (1993) estimated that golf courses in humid areas across eastern U.S. may use between 10 and 20 MGY of water to maintain, while those across the arid southwest may require up to

500 MGY, amounts substantially larger than any regular community.

industry.

Tourist facilities, as well as large-scale urban development along coastal areas also increase pollution levels. Though many resorts have significantly improved their sewage treatment facilities, often using reclaimed water for irrigation purposes, there are still many areas where sewage is being emptied on adjacent beaches creating a significant threat to swimmers and to adjacent ecosystems from high fecal pollution (Kocasoy, 1995; Bonkosky et al., 2009). Also, ballast water from cruise ships can become a source of microbial contaminants. Many islands still lack adequate sewage treatment facilities, landfills, functional waste recycling programs, efficient sources of energy production or adequate massive transportation infrastructure. Therefore, waste minimization, improved energy efficiency, conservation and management of natural resources, including freshwater resources, wastewater management, hazardous substances transport, land-use planning and integrated coastal and tourism development management (with the integrated participation of local communities in planning and decision-making processes), design for sustainability, and partnerships for sustainable development are critical elements that are still largely lacking in the tourism industry across many small islands, including PR. Failing to recognize these elements will perpetuate the "enemy within" syndrome in the tourism

#### **5.2 Can sustainability be reached in a non-participatory globalized model?**

The usual rapid economic revenue of non-sustainable, massive tourism activities is often one of the preferred tools for poverty reduction in developing countries, including many small island nations. But massive tourism often involves a chain of socio-cultural, economic, logistic and environmental problems. When nations consider tourism development, the potential for negative consequences is often overshadowed by the lure of economic benefits (Diedrich, 2006). When tourism development gets out of control, negative impacts are most likely to occur. In spite of the substantial economic benefits of the tourism industry, it can have three main types of effects, according to Gormsen (1997): (1) the development of seaside tourism including the changes of socio-economic and settlement patterns; (2) its cultural impact on the local population; and (3) its environmental aspects. Massive tourism may result detrimental on local water supplies, sensitive coastal landscapes, and sociocultural identity. In many cases, tourism has often had significant permanent negative environmental impacts on nearly pristine natural environments, particularly when construction and operation impacts where dismissed by regulatory government officials as non-significant (Equation, 2009). Burak et al. (2004) have documented negative impacts of rapid tourism expansion in coastal habitats that include loss of aesthetic value, rapid population densification, increased construction of multistory buildings adjacent to coastal areas, pollution, and the permanent loss of adjacent fertile agricultural lands. Sewage pollution has been a concern regarding long-term degradation of coral reefs (Hernández-Delgado et al., 2010, 2011; Pastorok & Bilyard, 1985), and regarding risks to recreational users (Bonkosky et al., 2009; Kocasoy, 1989). The construction of coastal resorts and roads, marinas, jetties and other infrastructure often result in significant coastal habitat fragmentation and reduced biodiversity (M'Rabet et al., 2009). There is also increased literature documenting adverse impacts from infilling, sedimentation and over-fishing for marine curios (Hawkins & Roberts, 1994), intertidal trampling on shallow-water coastal habitats (Davenport & Davenport, 2006; Hawkins & Roberts, 1993), and from snorkeling and SCUBA diving on coral reefs (Davenport & Davenport, 2006; Harriott et al., 1997; Hawkins & Roberts, 1992; Hawkins et al., 1999). Davenport and Davenport (2006) also documented the negative impacts of recurrent mechanical beach 'cleaning' (i.e., removal of natural strandlines as well as litter) that is practiced throughout the world's sandy beach resorts, a practice which is also carried out across many known turtle nestling beaches adjacent to hotels and urban zones in PR (Hernández-Delgado, pers. obs.). Further, under extremely high exploitation by massive tourism at some sites, these authors also documented negative impacts from relatively innocuous activities such as swimming, surfing, sailboarding, dinghy sailing and 'extreme sports' (e.g., 'coasteering', kitesurfing), which are marketed for its environmentally-friendly nature, yet causes measurable deterioration in many shallow coral reef ecosystems despite good management practices.

In many instances, tourism can also result in socio-cultural and economic impacts which may involve the physical displacement of traditionally underserved small communities, shifting livelihoods and population increases from immigration or, less tangible in the form of changes in morals and traditions, and local increases in crime (Diedrich, 2006) and prostitution (Cabezas, 2009; Padilla, 2007). In some particular places, dramatic social impacts have included child exploitation (Equation, 2009). According to Bruyere et al. (2009), many communities perceive that local base communities receive the least benefits from tourism revenues, and that there is also a lack of representation of local communities in the tourism

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

beachfront properties, a trend that has already occurred in the U.S. (Mills, 2005).

there will be a significant decline in total rainfall across the wider Caribbean.

We have also to pay attention to the different phenomena that control climate at the wider Caribbean regional scale. Large-scale atmospheric events such as the North Atlantic Oscillation (NAO), *El Niño* Southern Oscillation (ENSO), and *La Niña* can have paramount influences in the precipitation patterns on regional and sub-regional scales, which may make difficult the interpretations of climate variability across the Caribbean and South

Climate variability particularly affects rainfall patterns (González-Hidalgo et al. 2002; Peterson et al. 2002) and is an important feature for water resources in the tropics. In the actual debate about climate change, water has become more prominent at the regional and global scale. At the present time, water heads most global political and scientific debates that usually tackle the conflicts about this resource (water geopolitics), its management (man as a hyper-consumer, and the right to have access to water), and water pollution (human activities that may put this resource at risk). Climate change may cause significant fluctuations in the distribution of wind and humidity patterns that may also influence known diurnal rainfall patterns across islands (Roy & Balling, 2005), therefore, producing long-term changes in surface and groundwater availability for local communities as well as for tourist facilities. Méndez-Lázaro (2010) analyzed rainfall trends in PR in the context of climate change, and its relationship with regional and global climate variation in recent decades (1955-2007). The analysis indicated that the precipitation of the island does not show a unique spatio-temporal pattern. However, a slight increase was detected in the southern region, while a decrease was observed in the western region. Overall, regressive tendencies in the wet summer months and increases in the historically drier winter months were more commonly observed. These observations are consistent with those of Neelin et al. (2006) and of Sanderson et al. (2011) which using climate modeling approaches showed that

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 385

resources) these territories are extremely vulnerable to changes and variations in climate, especially precipitation and sea level rise. Although a significant number of island nations across the Caribbean have made substantial advances in terms of adaptive planning strategies to face problems associated to climate change, PR is still way behind on that regards with a government administration that is still in some kind of denial stage of potential threats that the island might face in the near future. The most likely impacts of climate change across the Caribbean may largely affect the coastal tourism and residential construction industries, and may include: (1) increased beach erosion rates and coastal property loss; (2) saline intrusion into coastal aquifers; (3) increased frequency of extreme weather events (i.e., droughts, flash floods and landslides); (4) altered freshwater availability; (5) recurrent massive coral bleaching events and mass coral mortalities similar to those witnessed during 2005 (Hernández-Pacheco et al., 2011; Miller et al. 2006, 2009); (6) less productive agricultural systems and fisheries; (7) changes to biological systems/reduction in biodiversity as it has been already modeled to occur at least for Caribbean coral reefs (Hoegh-Guldberg, 1999); (8) irreversible damage to coastal amenities and infrastructure; (9) reduction in long-haul passengers due to ethical concerns associated to carbon footprint, regulatory taxes, etc.; (10) changes in preferences of the tourism market; (11) declining aesthetical value of coastal areas as a result of coastal erosion and water quality decline; (12) increased costs of mitigating sea level rise for beachfront properties; (13) increased vulnerability of beachfront properties and public infrastructure to hurricanes; and (14) increased cost of insurance for

sector employment. There are also substantial issues of carrying capacity and ecological sensitivity which need to be also kept in mind if tourism is going to become sustainable (Equations, 2009). Most often decisions regarding setting up a tourism strategy, selecting sites for projects, or establishing a carrying capacity or a limit of acceptable change for some tourism activities are often driven by a purely economic decision by private interests, instead of being based on empiric scientific-based and participatory processes. Even worst, planning and decision-making often lack a community-based participatory process. Community-based participation should be fundamental to integrate local stakeholder's vision, interests, perceptions, fears, livelihood, cultural, religious and heritage values in the tourism strategies decision-making processes. Community participation and integration with local government in the planning and decision-making processes has been shown to be paramount to foster compliance and to advance conservation and management of marine protected areas (Appeldoorn & Lindeman, 2003; McConney & Pomeroy, 2003). Perceptions of environmental resources determine not only how a resource is utilized and managed, but also its relative value to the community (Pollnac & Crawford, 2000). The value that a community places on natural resources can have significant implications on how those resources are used and managed. For projects that seek to use coastal resources (i.e., hotels, private marinas, pier development, etc.) it is important to primarily understand which resources a community places values on and which they do not. But local resident perceptions of factors influencing the status of coastal resources are rarely taken into consideration by the tourism industry prior to the construction of any project, particularly in small island scenarios. Cinner & Pollnac (2004) showed that wealthier residents have demonstrated a better understanding of the indirect activities that affect coastal resources while poorer residents were more concerned with meeting basic needs and, thus, may not be able to be concerned with aspects of conservation. Tourism can alter the way local residents or even the government value and use marine ecosystems. According to Diedrich (2006), before tourists discovered Belize, many coastal communities were primarily dependent on fishing and farming for survival. Nowadays, many of these are becoming increasingly dependent on tourism. Local communities subjected to massive tourism have shifted their historical perspectives and values of coral reefs from subsistence to rapid economic revenue from tourism. But there are increasing concerns regarding the impacts of tourism fishing in many areas (Gartiside, 2001), as well as regarding the impacts of tourism in free-ranging marine wildlife, including cetaceans, dolphins, turtles, sharks, rays, etc. (Birtles et al., 2001). In addition, there is frequent political sensitivity and security issues linked to many tourism development activities. In many instances, decisions regarding the approval of tourism projects might be more linked to political influences and politicallydriven decisions instead of sound tourism development strategies implemented through participatory processes. The lack of clear local-based tourism strategies and lack of data and data-based analysis (economic, tourist profile and arrivals, employment and revenues based data) on which such plans and recommendations are made may usually lead to wrong decisions (Equations, 1999) when only globalized approaches are followed.

#### **5.3 Current trends and impacts of climate change in Caribbean tropical islands**

Climate change has become a major concern to humankind, particularly for small island nations. According to the Intergovernmental Panel on Climate Change (IPCC, 2007), due to the weaknesses of islands (geographical isolation, reduced territory and limited natural

sector employment. There are also substantial issues of carrying capacity and ecological sensitivity which need to be also kept in mind if tourism is going to become sustainable (Equations, 2009). Most often decisions regarding setting up a tourism strategy, selecting sites for projects, or establishing a carrying capacity or a limit of acceptable change for some tourism activities are often driven by a purely economic decision by private interests, instead of being based on empiric scientific-based and participatory processes. Even worst, planning and decision-making often lack a community-based participatory process. Community-based participation should be fundamental to integrate local stakeholder's vision, interests, perceptions, fears, livelihood, cultural, religious and heritage values in the tourism strategies decision-making processes. Community participation and integration with local government in the planning and decision-making processes has been shown to be paramount to foster compliance and to advance conservation and management of marine protected areas (Appeldoorn & Lindeman, 2003; McConney & Pomeroy, 2003). Perceptions of environmental resources determine not only how a resource is utilized and managed, but also its relative value to the community (Pollnac & Crawford, 2000). The value that a community places on natural resources can have significant implications on how those resources are used and managed. For projects that seek to use coastal resources (i.e., hotels, private marinas, pier development, etc.) it is important to primarily understand which resources a community places values on and which they do not. But local resident perceptions of factors influencing the status of coastal resources are rarely taken into consideration by the tourism industry prior to the construction of any project, particularly in small island scenarios. Cinner & Pollnac (2004) showed that wealthier residents have demonstrated a better understanding of the indirect activities that affect coastal resources while poorer residents were more concerned with meeting basic needs and, thus, may not be able to be concerned with aspects of conservation. Tourism can alter the way local residents or even the government value and use marine ecosystems. According to Diedrich (2006), before tourists discovered Belize, many coastal communities were primarily dependent on fishing and farming for survival. Nowadays, many of these are becoming increasingly dependent on tourism. Local communities subjected to massive tourism have shifted their historical perspectives and values of coral reefs from subsistence to rapid economic revenue from tourism. But there are increasing concerns regarding the impacts of tourism fishing in many areas (Gartiside, 2001), as well as regarding the impacts of tourism in free-ranging marine wildlife, including cetaceans, dolphins, turtles, sharks, rays, etc. (Birtles et al., 2001). In addition, there is frequent political sensitivity and security issues linked to many tourism development activities. In many instances, decisions regarding the approval of tourism projects might be more linked to political influences and politicallydriven decisions instead of sound tourism development strategies implemented through participatory processes. The lack of clear local-based tourism strategies and lack of data and data-based analysis (economic, tourist profile and arrivals, employment and revenues based data) on which such plans and recommendations are made may usually lead to wrong

decisions (Equations, 1999) when only globalized approaches are followed.

**5.3 Current trends and impacts of climate change in Caribbean tropical islands** 

Climate change has become a major concern to humankind, particularly for small island nations. According to the Intergovernmental Panel on Climate Change (IPCC, 2007), due to the weaknesses of islands (geographical isolation, reduced territory and limited natural resources) these territories are extremely vulnerable to changes and variations in climate, especially precipitation and sea level rise. Although a significant number of island nations across the Caribbean have made substantial advances in terms of adaptive planning strategies to face problems associated to climate change, PR is still way behind on that regards with a government administration that is still in some kind of denial stage of potential threats that the island might face in the near future. The most likely impacts of climate change across the Caribbean may largely affect the coastal tourism and residential construction industries, and may include: (1) increased beach erosion rates and coastal property loss; (2) saline intrusion into coastal aquifers; (3) increased frequency of extreme weather events (i.e., droughts, flash floods and landslides); (4) altered freshwater availability; (5) recurrent massive coral bleaching events and mass coral mortalities similar to those witnessed during 2005 (Hernández-Pacheco et al., 2011; Miller et al. 2006, 2009); (6) less productive agricultural systems and fisheries; (7) changes to biological systems/reduction in biodiversity as it has been already modeled to occur at least for Caribbean coral reefs (Hoegh-Guldberg, 1999); (8) irreversible damage to coastal amenities and infrastructure; (9) reduction in long-haul passengers due to ethical concerns associated to carbon footprint, regulatory taxes, etc.; (10) changes in preferences of the tourism market; (11) declining aesthetical value of coastal areas as a result of coastal erosion and water quality decline; (12) increased costs of mitigating sea level rise for beachfront properties; (13) increased vulnerability of beachfront properties and public infrastructure to hurricanes; and (14) increased cost of insurance for beachfront properties, a trend that has already occurred in the U.S. (Mills, 2005).

Climate variability particularly affects rainfall patterns (González-Hidalgo et al. 2002; Peterson et al. 2002) and is an important feature for water resources in the tropics. In the actual debate about climate change, water has become more prominent at the regional and global scale. At the present time, water heads most global political and scientific debates that usually tackle the conflicts about this resource (water geopolitics), its management (man as a hyper-consumer, and the right to have access to water), and water pollution (human activities that may put this resource at risk). Climate change may cause significant fluctuations in the distribution of wind and humidity patterns that may also influence known diurnal rainfall patterns across islands (Roy & Balling, 2005), therefore, producing long-term changes in surface and groundwater availability for local communities as well as for tourist facilities. Méndez-Lázaro (2010) analyzed rainfall trends in PR in the context of climate change, and its relationship with regional and global climate variation in recent decades (1955-2007). The analysis indicated that the precipitation of the island does not show a unique spatio-temporal pattern. However, a slight increase was detected in the southern region, while a decrease was observed in the western region. Overall, regressive tendencies in the wet summer months and increases in the historically drier winter months were more commonly observed. These observations are consistent with those of Neelin et al. (2006) and of Sanderson et al. (2011) which using climate modeling approaches showed that there will be a significant decline in total rainfall across the wider Caribbean.

We have also to pay attention to the different phenomena that control climate at the wider Caribbean regional scale. Large-scale atmospheric events such as the North Atlantic Oscillation (NAO), *El Niño* Southern Oscillation (ENSO), and *La Niña* can have paramount influences in the precipitation patterns on regional and sub-regional scales, which may make difficult the interpretations of climate variability across the Caribbean and South

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

for wildlife and habitat protection.

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 387

have largely degraded coastal habitats, and caused often unaccounted socio-economic impacts, including the loss of traditional underserved community livelihoods. Experiences throughout the world show that poorly planned and managed tourism that fails to support its environment base will eventually be economically unsustainable. With the potential for selfdestruction, achieving a more sustainable tourism option is the most important issue facing tourism (Whitmore & De Lacy, 2004). Also, if tourism is to sustain itself in the coming years, its best bet would be to address climate change through responsible tourism, encompassing all economic, social and environmental aspects. Pleumarom (1995) suggested that responsible tourism is holistic and it requires commitment to economic, social and environmental principles that reflect the following: (1) a commitment to foster local employment and sourcing (this would help reducing revenue leakage from the community); (2) respect for local cultures and support for community-based development (view local culture as an integrated attraction for visitors and not as a marketing product); (3) protection of natural resources (prevent sacrificing natural resources at the expense of tourism exploitation and urban construction); (4) efficient use of resources (establish limits of acceptable change); (5) responsible waste management (minimize waste production through prevention, reuse and recycling programs); and (6) a commitment to continued improvement (foster basecommunity integration and participation). Considering the combination of long-term cumulative impacts along coastal areas and the threats associated to current climate change trends, there is an imperative need to foster the establishment of an alternative sustainable development model. But according to Hall (2001), sustainable development of coastal tourism, as well as urban development, should be dependent on: (1) good coastal management practices (particularly regarding proper siting of tourism and urban infrastructure, and the provision of public access); (2) clean water and air, and healthy coastal ecosystems; (3) maintaining a safe and secure recreational environment through the management of coastal hazards (such as erosion, storms, floods), and the provision of adequate levels of safety for boaters, swimmers, and other water users; (4) beach restoration efforts that maintain the recreational and amenity values of beaches; and (5) sound policies

Increasing evidence shows that an integrated approach to tourism and urban planning and management should be necessary to achieve sustainable tourism. It is only recently that there has been a growing recognition of the importance of combining the needs of traditional urban management (transportation, land use planning, economic development, etc.) with the need to plan for tourism. Any sustainable approach for development must involve six integrated elements: (1) economic efficiency (tourism and urban construction should be viable, viability of enterprises, satisfaction of demand for product and services); (2) social equity (benefits for local communities, increased local employment, improved life quality, improved local revenue, public participation, respect socio-cultural values, quality employment for the community, establish linkages between local businesses and tourism); (3) environmental conservation (biodiversity conservation and/or preservation, rational use of natural resources, natural resource conservation from an inter-generational perspective); (4) meaningful community-based participation (planning and decision-making processes should be completely participatory in order to be democratic, improved community-based participation on business, co-management of protected areas, stronger community presence and control in tourism/urban development and decision-making rather than having decisions

America (Giannini et al. 2000; Liang, 2004; Ropelewski & Halpert, 1987). Giannini et al. (2000) found that declining sea surface atmospheric pressure in the North Atlantic result in increasing rainfall patterns across the Caribbean by affecting wind patterns across the region, and also indirectly affecting sea surface temperature (SST). This can result in doldrum oceanographic conditions (low winds, slower currents, increased SST) that may further result in significant coral bleaching events and coral mortality events (Eakin et al., 2010; Hernández-Pacheco et al., 2011; Miller et al., 2006, 2009). Giannini et al. (2000) also demonstrated that high pressure positive anomalies across the North Atlantic can cause stronger trade winds, which make the SST get fresher, and produce less rainfall in the Caribbean. However, as soon as the atmospheric conditions are getting back to normal, there is an increase in convection and, at the beginning of the rainy season, precipitation events are getting stronger, especially across the Greater Antilles. Flooding has become more likely during May and June of the first year of the warm-phase, whereas excessive rainfall was also observed in Cuba during the last winter (January-March) of the first year of the ENSO (Giannini et al. 2000). In Costa Rica, the intensification of the Caribbean Trade Winds registered during the summer of the ENSO, as well as the topography, are fundamental factors that increase the precipitation in the Caribbean coast, reducing simultaneously in the Pacific coast (Giannini et al. 2000). Similar to the results and patterns found in PR according to Centella et al. (1999), the annual precipitation in Cuba did not show significant changes in a long period of time, though a slight change was noted in both islands in the precipitation annual behavior, presenting an increase in the winter months and a decrease in the summer months. On the contrary, an important increase of the winter precipitation was registered, and a slight decrease was noted in the summer precipitation. There is also some evidence suggesting that climate change may result in an increased frequency and/or intensity across the Atlantic, particularly following the current increasing SST trends (Mann & Emanuel, 2006; Shapiro & Goldenberg, 1998). There has been an increasing trend in hurricane frequency since 1995 (Nyberg et al., 2007). The combination of strong hurricanes, high SST, and massive coral bleaching has been shown to be detrimental for coral reefs across the Caribbean (Gardner et al., 2005; Wilkinson & Souter, 2008) and given current climate change projections, these combined factors might be detrimental for the Caribbean coastal and marine biodiversity as well (Cambers et al., 2008). Losing coral reefs due to increased environmental degradation, in combination with recurrent massive coral bleaching and mass mortality events may represent losing its tourism and aesthetic value, its food production sustainability, its role as a buffer against greenhouse gas emissions, as a source of natural products with pharmacological value, as well as its role as a natural buffer against wave action and coastal erosion, particularly under current sea level rise trends (Veron et al., 2009). This would imply an increasingly negative economic impact to the tourism industry as there would be an increasing need to establish physical protective measures against coastal erosion (i.e., breakwaters) and to renourish eroding beaches adjacent to hotels. There will also be an increased risk of coastal flooding during hurricanes, which would in turn increase insurance expenses for beachfront properties (Mills, 2005).

#### **6. A sustainable alternative model of tourism development for tropical islands**

Tourism and urban development across coastal areas in PR have followed a non-sustainable model that have caused irreversible negative impacts on a variety of natural resources, and

America (Giannini et al. 2000; Liang, 2004; Ropelewski & Halpert, 1987). Giannini et al. (2000) found that declining sea surface atmospheric pressure in the North Atlantic result in increasing rainfall patterns across the Caribbean by affecting wind patterns across the region, and also indirectly affecting sea surface temperature (SST). This can result in doldrum oceanographic conditions (low winds, slower currents, increased SST) that may further result in significant coral bleaching events and coral mortality events (Eakin et al., 2010; Hernández-Pacheco et al., 2011; Miller et al., 2006, 2009). Giannini et al. (2000) also demonstrated that high pressure positive anomalies across the North Atlantic can cause stronger trade winds, which make the SST get fresher, and produce less rainfall in the Caribbean. However, as soon as the atmospheric conditions are getting back to normal, there is an increase in convection and, at the beginning of the rainy season, precipitation events are getting stronger, especially across the Greater Antilles. Flooding has become more likely during May and June of the first year of the warm-phase, whereas excessive rainfall was also observed in Cuba during the last winter (January-March) of the first year of the ENSO (Giannini et al. 2000). In Costa Rica, the intensification of the Caribbean Trade Winds registered during the summer of the ENSO, as well as the topography, are fundamental factors that increase the precipitation in the Caribbean coast, reducing simultaneously in the Pacific coast (Giannini et al. 2000). Similar to the results and patterns found in PR according to Centella et al. (1999), the annual precipitation in Cuba did not show significant changes in a long period of time, though a slight change was noted in both islands in the precipitation annual behavior, presenting an increase in the winter months and a decrease in the summer months. On the contrary, an important increase of the winter precipitation was registered, and a slight decrease was noted in the summer precipitation. There is also some evidence suggesting that climate change may result in an increased frequency and/or intensity across the Atlantic, particularly following the current increasing SST trends (Mann & Emanuel, 2006; Shapiro & Goldenberg, 1998). There has been an increasing trend in hurricane frequency since 1995 (Nyberg et al., 2007). The combination of strong hurricanes, high SST, and massive coral bleaching has been shown to be detrimental for coral reefs across the Caribbean (Gardner et al., 2005; Wilkinson & Souter, 2008) and given current climate change projections, these combined factors might be detrimental for the Caribbean coastal and marine biodiversity as well (Cambers et al., 2008). Losing coral reefs due to increased environmental degradation, in combination with recurrent massive coral bleaching and mass mortality events may represent losing its tourism and aesthetic value, its food production sustainability, its role as a buffer against greenhouse gas emissions, as a source of natural products with pharmacological value, as well as its role as a natural buffer against wave action and coastal erosion, particularly under current sea level rise trends (Veron et al., 2009). This would imply an increasingly negative economic impact to the tourism industry as there would be an increasing need to establish physical protective measures against coastal erosion (i.e., breakwaters) and to renourish eroding beaches adjacent to hotels. There will also be an increased risk of coastal flooding during hurricanes, which would in turn increase insurance expenses for beachfront properties (Mills, 2005).

**6. A sustainable alternative model of tourism development for tropical** 

Tourism and urban development across coastal areas in PR have followed a non-sustainable model that have caused irreversible negative impacts on a variety of natural resources, and

**islands** 

have largely degraded coastal habitats, and caused often unaccounted socio-economic impacts, including the loss of traditional underserved community livelihoods. Experiences throughout the world show that poorly planned and managed tourism that fails to support its environment base will eventually be economically unsustainable. With the potential for selfdestruction, achieving a more sustainable tourism option is the most important issue facing tourism (Whitmore & De Lacy, 2004). Also, if tourism is to sustain itself in the coming years, its best bet would be to address climate change through responsible tourism, encompassing all economic, social and environmental aspects. Pleumarom (1995) suggested that responsible tourism is holistic and it requires commitment to economic, social and environmental principles that reflect the following: (1) a commitment to foster local employment and sourcing (this would help reducing revenue leakage from the community); (2) respect for local cultures and support for community-based development (view local culture as an integrated attraction for visitors and not as a marketing product); (3) protection of natural resources (prevent sacrificing natural resources at the expense of tourism exploitation and urban construction); (4) efficient use of resources (establish limits of acceptable change); (5) responsible waste management (minimize waste production through prevention, reuse and recycling programs); and (6) a commitment to continued improvement (foster basecommunity integration and participation). Considering the combination of long-term cumulative impacts along coastal areas and the threats associated to current climate change trends, there is an imperative need to foster the establishment of an alternative sustainable development model. But according to Hall (2001), sustainable development of coastal tourism, as well as urban development, should be dependent on: (1) good coastal management practices (particularly regarding proper siting of tourism and urban infrastructure, and the provision of public access); (2) clean water and air, and healthy coastal ecosystems; (3) maintaining a safe and secure recreational environment through the management of coastal hazards (such as erosion, storms, floods), and the provision of adequate levels of safety for boaters, swimmers, and other water users; (4) beach restoration efforts that maintain the recreational and amenity values of beaches; and (5) sound policies for wildlife and habitat protection.

Increasing evidence shows that an integrated approach to tourism and urban planning and management should be necessary to achieve sustainable tourism. It is only recently that there has been a growing recognition of the importance of combining the needs of traditional urban management (transportation, land use planning, economic development, etc.) with the need to plan for tourism. Any sustainable approach for development must involve six integrated elements: (1) economic efficiency (tourism and urban construction should be viable, viability of enterprises, satisfaction of demand for product and services); (2) social equity (benefits for local communities, increased local employment, improved life quality, improved local revenue, public participation, respect socio-cultural values, quality employment for the community, establish linkages between local businesses and tourism); (3) environmental conservation (biodiversity conservation and/or preservation, rational use of natural resources, natural resource conservation from an inter-generational perspective); (4) meaningful community-based participation (planning and decision-making processes should be completely participatory in order to be democratic, improved community-based participation on business, co-management of protected areas, stronger community presence and control in tourism/urban development and decision-making rather than having decisions

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

**7. Conclusions** 

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 389

strong academic institutions and research institutes to foster the development of sound scientific research of long-term impacts). Finally, climate change impacts must be integrated into all viability analysis of any future coastal tourism and urban development project (there is a strong need to address what would be the long-term impacts of climate change for coastal

Coastal tourism and urban development in PR have become a paramount motor of the island's economy. Most of this development during the last two decades has largely relied on a variety of changes in local environmental, planning and zoning regulations which have reduced the burden of permitting processes to developers, but that have also resulted in a dramatic increase in construction in ecologically-sensitive areas, in significantly reduced community participation, and in the creation of a false sense that only through enhanced construction on ecologically-sensitive sites PR will only remain as a competitive tourism destiny. There are significant case studies of how much have inadequately planned tourism and urban construction impacted local coastal communities in PR. In spite of that, the longterm environmental impacts of most tourism and urban construction projects on coastal habitats have still remained largely undocumented. Current construction trends are still following a completely non-sustainable approach, without meaningful community-based participation and integration, and without meaningful revenue retribution to local communities. Further, climate change has already had recent dramatic and irreversible impacts on local coral reefs, and in beachfront property loss due to beach erosion as a result of increased sea level rise. Therefore, it is critical to consider a precautionary alternative approach for future coastal tourism and urban development on the island. We demand the state government of PR enforce their regulatory role by considering the negative and destructive impacts of coastal tourism and urban construction on the environment and local communities. Further, we strongly encourage the government to incorporate local communities in tourism policies and land use planning frameworks, as well as in the implementation of long-term monitoring of coastal tourism and urban construction impacts. There is also a need to set up mechanisms to establish ecological and social carrying capacity, or limits of acceptable change on different locations. We strongly encourage the formulation of policies geared to conserving the natural environment rather than opening them up for relentless exploitation by development tourism or urban construction activities. We strongly recommend the government of PR a moratorium in further fostering nonsustainable coastal construction until an environmentally- and socio-economically sustainable strategy is implemented. All recently approved permits, as well as permit applications still under consideration, should be reanalyzed under more strict parameters to ensure sustainability, as well as meaningful community-based participation. We also demand the immediate adoption of adaptation policies to climate change impacts, particularly of initiatives and measures to reduce the vulnerability of coastal natural and human systems against actual or expected climate change effects. There is still an opportunity to ensure that today's investment in coastal tourism and urban development will not compromise the availability and quality of resources for future generations. Further, there is still a chance to use a precautionary approach in our investment in coastal development to minimize the risk and vulnerability against climate change-related impacts.

areas, as well as to develop and implement a national climate change adaptation plan).

being imposed by external forces); (5) stand by accepted international standards (tourism and urban construction should follow accepted international practices, such as setting setbacks of at least 200 meters from the shoreline to buffer for increasing sea level rise due to climate change; guidelines for tourism and urban development, tourism operations, environmental impact assessment, monitoring of cumulative impacts, and establishing limits to acceptable change should be uniformed); and (6) deal cautiously with risk and uncertainty (in situations where environmental impacts of activities are not known, the preferred option should be to proceed cautiously or not at all, until the likely impacts can be determined and minimized).

Diedrich (2006) made also important recommendations to foster the development of alternative approaches on the tourism industry, where many of them also apply to the urban construction industry. Many of these are very pertinent to PR and include: (1) continue to encourage and facilitate local entrepreneurship and small business development (sustainable tourism can only be achieved in healthy, prospering communities); (2) continue to involve local communities in all stages of tourism planning and development (local resentment towards tourism, which may result from not being involved in the development process can have a negative effect on the experience of the tourist and decrease the competitiveness of the tourism market); (3) increase public infrastructure and pollution mitigation capacity in communities to accommodate growth in tourism and associated coastal development (it is essential that increases in tourism and urban development be accompanied by a growth in amenities and infrastructure necessary to accommodate the additional tourists/residents and the associated waste); (4) establish initiatives to improve environmental standards and develop Best Practices for hotels, tour operators, and land developers (take the appropriate measures to reduce ecological footprint of projects); (5) implement stronger regulations for the sailboat charter industry relating to environmental conduct (minimize recreational impacts on coral reefs and other related habitats); (6) embrace cruise tourism as a real and significant component of the tourism market that, if properly managed, should provide more revenue to local businesses and communities (it is important to take action now to ensure that this type of tourism has minimal negative impacts and generates maximum benefits to PR by minimizing revenue leakage and protecting local businesses); (7) continue to develop and improve conservation and education programs at local and national levels, particularly in relation to Natural Protected Areas (conservation, education and alternative livelihood programs are important for the continued success of sustainable ecotourism); and (8) establish and enforce limits of acceptable change in all Natural Protected Areas (these are important tourism attractions so their effectiveness is not only crucial to preserving their natural resources, but to PR's success as a tourism destination).

We also strongly suggest to recognize that PR is in a critical stage of coastal and urban development where actions today will govern the future of the country as a tourism destination (tourism and urban development has been envisioned as one of the principal solutions to the actual economic crisis, but the proposed model is still far from sustainable; actions being planned and implemented may have a very high cost unless a more sustainable approach is considered). Further, there is still a nearly complete lack of basic scientific research of impacts of the tourism and urban construction industry in PR (most of the information available can be found on contracted environmental impact documents paid by the industry itself, where most of the documents find no significant impacts of projects; there is no evidence of long-term monitoring of impacts; PR should take advantage of its strong academic institutions and research institutes to foster the development of sound scientific research of long-term impacts). Finally, climate change impacts must be integrated into all viability analysis of any future coastal tourism and urban development project (there is a strong need to address what would be the long-term impacts of climate change for coastal areas, as well as to develop and implement a national climate change adaptation plan).

#### **7. Conclusions**

388 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

being imposed by external forces); (5) stand by accepted international standards (tourism and urban construction should follow accepted international practices, such as setting setbacks of at least 200 meters from the shoreline to buffer for increasing sea level rise due to climate change; guidelines for tourism and urban development, tourism operations, environmental impact assessment, monitoring of cumulative impacts, and establishing limits to acceptable change should be uniformed); and (6) deal cautiously with risk and uncertainty (in situations where environmental impacts of activities are not known, the preferred option should be to proceed cautiously or not at all, until the likely impacts can be determined and minimized).

Diedrich (2006) made also important recommendations to foster the development of alternative approaches on the tourism industry, where many of them also apply to the urban construction industry. Many of these are very pertinent to PR and include: (1) continue to encourage and facilitate local entrepreneurship and small business development (sustainable tourism can only be achieved in healthy, prospering communities); (2) continue to involve local communities in all stages of tourism planning and development (local resentment towards tourism, which may result from not being involved in the development process can have a negative effect on the experience of the tourist and decrease the competitiveness of the tourism market); (3) increase public infrastructure and pollution mitigation capacity in communities to accommodate growth in tourism and associated coastal development (it is essential that increases in tourism and urban development be accompanied by a growth in amenities and infrastructure necessary to accommodate the additional tourists/residents and the associated waste); (4) establish initiatives to improve environmental standards and develop Best Practices for hotels, tour operators, and land developers (take the appropriate measures to reduce ecological footprint of projects); (5) implement stronger regulations for the sailboat charter industry relating to environmental conduct (minimize recreational impacts on coral reefs and other related habitats); (6) embrace cruise tourism as a real and significant component of the tourism market that, if properly managed, should provide more revenue to local businesses and communities (it is important to take action now to ensure that this type of tourism has minimal negative impacts and generates maximum benefits to PR by minimizing revenue leakage and protecting local businesses); (7) continue to develop and improve conservation and education programs at local and national levels, particularly in relation to Natural Protected Areas (conservation, education and alternative livelihood programs are important for the continued success of sustainable ecotourism); and (8) establish and enforce limits of acceptable change in all Natural Protected Areas (these are important tourism attractions so their effectiveness is not only crucial to preserving their

We also strongly suggest to recognize that PR is in a critical stage of coastal and urban development where actions today will govern the future of the country as a tourism destination (tourism and urban development has been envisioned as one of the principal solutions to the actual economic crisis, but the proposed model is still far from sustainable; actions being planned and implemented may have a very high cost unless a more sustainable approach is considered). Further, there is still a nearly complete lack of basic scientific research of impacts of the tourism and urban construction industry in PR (most of the information available can be found on contracted environmental impact documents paid by the industry itself, where most of the documents find no significant impacts of projects; there is no evidence of long-term monitoring of impacts; PR should take advantage of its

natural resources, but to PR's success as a tourism destination).

Coastal tourism and urban development in PR have become a paramount motor of the island's economy. Most of this development during the last two decades has largely relied on a variety of changes in local environmental, planning and zoning regulations which have reduced the burden of permitting processes to developers, but that have also resulted in a dramatic increase in construction in ecologically-sensitive areas, in significantly reduced community participation, and in the creation of a false sense that only through enhanced construction on ecologically-sensitive sites PR will only remain as a competitive tourism destiny. There are significant case studies of how much have inadequately planned tourism and urban construction impacted local coastal communities in PR. In spite of that, the longterm environmental impacts of most tourism and urban construction projects on coastal habitats have still remained largely undocumented. Current construction trends are still following a completely non-sustainable approach, without meaningful community-based participation and integration, and without meaningful revenue retribution to local communities. Further, climate change has already had recent dramatic and irreversible impacts on local coral reefs, and in beachfront property loss due to beach erosion as a result of increased sea level rise. Therefore, it is critical to consider a precautionary alternative approach for future coastal tourism and urban development on the island. We demand the state government of PR enforce their regulatory role by considering the negative and destructive impacts of coastal tourism and urban construction on the environment and local communities. Further, we strongly encourage the government to incorporate local communities in tourism policies and land use planning frameworks, as well as in the implementation of long-term monitoring of coastal tourism and urban construction impacts.

There is also a need to set up mechanisms to establish ecological and social carrying capacity, or limits of acceptable change on different locations. We strongly encourage the formulation of policies geared to conserving the natural environment rather than opening them up for relentless exploitation by development tourism or urban construction activities. We strongly recommend the government of PR a moratorium in further fostering nonsustainable coastal construction until an environmentally- and socio-economically sustainable strategy is implemented. All recently approved permits, as well as permit applications still under consideration, should be reanalyzed under more strict parameters to ensure sustainability, as well as meaningful community-based participation. We also demand the immediate adoption of adaptation policies to climate change impacts, particularly of initiatives and measures to reduce the vulnerability of coastal natural and human systems against actual or expected climate change effects. There is still an opportunity to ensure that today's investment in coastal tourism and urban development will not compromise the availability and quality of resources for future generations. Further, there is still a chance to use a precautionary approach in our investment in coastal development to minimize the risk and vulnerability against climate change-related impacts.

Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

policy lending on coastal areas : a World Bank tool kit.

pp. 1-88

1777

135

República de Cuba, pp. 1-166

*Management*, Vol. 47, pp. 479-493

8477-3375-0, pp. 1-480

de Puerto Rico, Río Piedras, PR, pp 45-119

Boletín Administrativo Núm. OE-2007-37

Reference Bureau, Washington, DC, pp. 1-8

Administrativo Núm. OE-20087-22.

January, http://www.cruising.org

Republic. Temple University Press, Philadelphia, PA, pp. 1-218

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 391

Cabezas, A.L. (2009). Economies of Desire- Sex and Tourism in Cuba and the Dominican

Cambers, G., Claro, R., Juman, R., Scott, S. (2008). Climate change impacts on coastal and

Cenacchi, N. (2010). Coastal areas assessing the environmental impact of development

Centella, A., Gutiérrez, T., Limia, M., and Rivero-Jaspe, R. (1999). Climate change scenarios for impact assessment in Cuba. *Climate Research*, Vol. 12, pp. 223–230 Centella, A., Llanes, J., Paz, L., López, C., and Limia, M. (eds.). (2000). *Primera Comunicación* 

Cinner, J.E., and Pollnac, R.B. (2004). Poverty, perceptions and planning : Why

Clark, J.J., and Wilcock,P.R. (2000). Effects of land-use change on channel morphology in

Colón, J.A. (1977). Climatología. In: De Galiñanes, M.T.B. (Ed.), *Geovisión de Puerto Rico-*

Copaken, R.D. (2009). *Target Culebra. How 743 Islanders Took on the Entire U.S. Navy and Won*.

Commonwealth of Puerto Rico [CPR]. (2007). Orden Ejecutiva del Gobernador del Estado

Commonwealth of Puerto Rico [CPR]. (2008). Orden Ejecutiva del Gobernador del Estado

Concepción, C.M. (1988). El conflicto ambiental y su potencial hacia un desarrollo

Creel, L. (2003). Ripple effects: Population and coastal regions. Making the Link, Population

Cruise Lines International Association [CLIA]. (2005). Industry predicts cruising will be

marine biodiversity in the insular Caribbean. Report of Working Group II, Climate Change and Biodiversity in the Insular Caribbean. CANARI Technical Report 382,

*Nacional a la Convención Marco de las Naciones Unidas sobre el Cambio Climático.* 

socioeconomics matter in the management of Mexican reefs. *Ocean and Coastal* 

northeastern Puerto Rico. *Geological Society of America Bulletin*, Vol. 112, pp. 1763-

*Aportaciones Recientes al Estudio de la Geografía*. Editorial Universitaria, Universidad

La Editorial de la Universidad de Puerto Rico, San Juan, Puerto Rico, ISBN 978-0-

Libre Asociado de Puerto Rico para Ordenar a la Junta de Planificación de Puerto Rico a Establecer la Reserva Natural del Corredor Ecológico del Noreste y Ordenar al Departamento de Recursos Naturales y Ambientales Adquirir los Terrenos en ella Comprendidos y para Otros Fines y Propósitos Relacionados. San Juan, PR:

Libre Asociado de Puerto Rico para Crear, Declarar, Designar y Delimitar la Reserva Natural del Corredor Ecológico del Noreste. San Juan, PR: Boletín

alternativo: el caso de Puerto Rico. *Ambiente y Desarrollo*, Vol. IV, No. 1 y 2, pp. 125-

vacation choice in 2005. *Cruise Lines International Association News Release*, 19

But the costs of our errors now will certainly be prohibitive for future generations to mitigate, and it would only be a matter of common sense and political will of present generations to prevent such a risk. After all, the long-term cumulative impact of our wrong decisions would probably result in affecting the tourism value of the island and that would be a very high price for future generations that will also have to cope with increasing pressure from climate change.

#### **8. Acknowledgments**

This publication was possible thanks to partial funding to E.A. Hernández-Delgado provided by the National Science Foundation through grant NSF HRD 0734826 to the Center for Applied Tropical Ecology and Conservation (CATEC) at UPR Río Piedras. We thank Michelle Bauzá-Álvarez and Henry Neumann of the PRTC for providing important updated statistical data from PR.

#### **9. References**


But the costs of our errors now will certainly be prohibitive for future generations to mitigate, and it would only be a matter of common sense and political will of present generations to prevent such a risk. After all, the long-term cumulative impact of our wrong decisions would probably result in affecting the tourism value of the island and that would be a very high price for future generations that will also have to cope with increasing

This publication was possible thanks to partial funding to E.A. Hernández-Delgado provided by the National Science Foundation through grant NSF HRD 0734826 to the Center for Applied Tropical Ecology and Conservation (CATEC) at UPR Río Piedras. We thank Michelle Bauzá-Álvarez and Henry Neumann of the PRTC for providing important

Adams, H. and Greeley, A. (1961). A general plan for the Boca de Cangrejos Area. Prepared for the Puerto Rico Industrial Development Company. February 1961. Berman-Santana, D. (1996). *Kicking Off the Bootstraps- Environment, Development, and* 

Biagi, N. (1965). Puerto Rico's water pollution image. *Water Pollution Federation Journal*, Vol.

Biagi, N. (1968). The sugar industry in Puerto Rico and its relation to the industrial waste problem. *Water Pollution Federation Journal*, Vol. 40, No. 8, Part I, pp. 1423-1433. Birdsey, R.A., and Weaver, P.L. (1987). Forest area trends in Puerto Rico. USDA-US Forest

Birtles, A., Valentine, P., and Curnock, M. (2001) Tourism based on free-ranging marine

Brida, J.G., and Zapata-Aguirre, S. (2008). The impacts of the cruise industry on tourism

Bruyere, B.L., Beh, A.W., and Lelengula, G. (2009). Differences in perceptions of

Burak, S., Doğan, E, and Gazioğlu, C. (2004). Impact of urbanization and tourism on coastal

Bush, D.M., Webb, R.M.T., Hyman, L., González-Liboy, J., and Neal, W.J. (1995). *Living with the Puerto Rico Shore*. Editorial Universidad de Puerto Rico, San Juan, Puerto Rico.

wildlife : Opportunities and responsibilities. Wildlife Tourism Research Report Series No. 11, Status Assessment in Wildlife Tourism in Australia Series, pp. 1-65 Bonkosky, M., Hernández-Delgado, E.A., Sandoz, B., Robledo, I.E., Norat-Ramírez, J., and

Mattei, H. (2009). Detection of spatial fluctuations of non-point source fecal pollution in coral reef surrounding waters in southwestern Puerto Rico using PCR-

destinations. Sustainable tourism as a factor of local development. GRISS Research Unit on Sustainable Development, University of Milano Bicocca, Monza, Italy, 7-

communication, tourism benefits, and management issues in a protected area of

Service, Research Note SO-331, New Orleans, LA, pp. 1-5

based assays. *Marine Pollution Bulletin*, Vol. 58, No. 1, pp. 45-54

rural Kenya. *Environmental Management*, Vol. 43, pp. 49-59

environment. *Ocean and Coastal Management*, Vol. 47, pp. 515-527

*Community Power in Puerto Rico,* The University of Arizona Press, ISBN 0-8165-1590-

pressure from climate change.

updated statistical data from PR.

5, Tucson, AZ

37, No. 3, pp. 381-391

9/11/2008, pp. 1-4

**8. Acknowledgments** 

**9. References** 


Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

12-7, pp. 1-206

1-25

Puerto Rico

PR., pp. 1-190

Albarracín, España, pp. 1-11

Puerto Rico, Fall 2009

*Coastal Management*, Vol. 44, pp. 601-618

54

*Ecology*, Vol. 86, No. 1, pp. 174-184

Rico. *Physical Geography*, Vol. 27, No. 1, pp. 39-69

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 393

Feliciano-Encarnación, R. (2009). *La Victoria de Monchín: Memorias de la Expulsión de la Marina* 

Gardner, T.A., I.M. Côté, J.A. Gill, A. Grant, & A.R. Watkinson. (2005). Hurricanes and

Gartiside, D. (2001) Fishing tourism : Charter boat fishing. Wildlife Tourism Research

Gellis, A.C., Webb, R.M.T., and McIntyre, S.C. (2006). Land-use effects on erosion, sediment

Giannini, A., Kushnir, Y., and Cane, M.A. (2000). Interannual variability of Caribbean rainfall, ENSO, and the Atlantic Ocean. *Journal of Climate*, Vol. 13, pp. 297-311 Giusti-Cordero, J. (1994). Labor, Ecology and History in a Caribbean Sugar Plantation

Goenaga, C. (1991). The state of Puerto Rican corals: An aid to managers. Technical report submitted to the Caribbean Fishery Management Council, San Juan, PR., pp. 1-71 Goenaga, C., and Cintrón, G. (1979). Inventory of the Puerto Rican coral reefs. Report

Gormsen, E. (1997). The impact of tourism on coastal areas. *GeoJournal*, Vol. 42, No. 1, pp. 39-

González-Hidalgo, J.C., Vicente, S.M., De Luis, M., Štěpánek, P., Cuadrat, J.M., and

Grau, H.R., Aide, T.M., Zimmerman, J.K., Thomlinson, J.R., Helmer, E., and Zou X. (2003).

Hall, C.M. (2001). Trends in ocean and coastal tourism: the end of the last frontier? *Ocean and* 

Harriot, V.J., Davis, D., and Banks, S.A. (1997). Recreational diving and its impact in marine protected areas in Eastern Australia. *Ambio*, Vol. 26, No. 3, pp. 173-179 Hawkins, J.P., and Roberts, C.M. (1992). Effects of recreational SCUBA diving on fore-reef slope communities of coral reefs. *Biological Conservation*, Vol. 62, pp. 171-178 Hawkins, J.P., and Roberts, C.M. (1993). Effects of recreational scuba diving on coral reefs : trampling on reef-flat communities. *Journal of Applied Ecology*, Vol. 30, pp. 25-30

postagriculture Puerto Rico. *BioScience*, Vol. 53, No. 12, pp. 1159-1168 Guerrero-Pérez, C. (2009). The Transformation of Environmental and Social Discourses

*de Culebra*. Fundación La Voz del Centro, San Juan, Puerto Rico, ISBN10: 1-933545-

Caribbean coral reefs: Impacts, recovery patterns, and role in long-term decline.

Report Series No. 12, Status Assessment in Wildlife Tourism in Australia Series, pp.

yields, and reservoir sedimentation: A case study in the Lago Loíza Basin, Puerto

Region: Piñones (Loíza), Puerto Rico 1770-1950*.* Ph.D. Dissertation, University of

submitted to the Department of the Department of Natural Resources, San Juan,

Raventós, J. (2002). Reconstrucción estabilidad y Proceso de homogeneizado de series de precipitación en ambientes de elevada variabilidad pluvial. *VII Reunión Nacional de Climatología. Grupo de Clima de la Asociación de Geógrafos Españoles*.

The ecological consequences of socioeconomic and land-use changes in

Through Time: A Look at the 45-year Struggle of the Community of Piñones in


Davenport, J., and Davenport, J.L. (2006). The impact of tourism and personal leisure

Delgado-Cintrón, C. (1989). *Culebra y la Marina de Estados Unidos*, Editorial EDIL, Río

Departamento de Recursos Naturales y Ambientales. (2008). Plan Integral de Usos de

Diedrich, A. (2006). Assessment of the impacts of tourism in coastal communities in Belize. Ph.D. Dissertation, Marine Affairs, University of Rhode Island, pp. 1-297 Diedrich, A. (2010). Cruise ship tourism in Belize: The implications of developing cruise ship

Diedrich, A., and García-Buades, E. (2009). Local perceptions of tourism as indicators of

Dietz, J.L. (1986). *Economic History of Puerto Rico: Institutional Change and Capitalist* 

Dinsdale, E.A., and Harriott, V. (2004). Assessing anchor damage on coral reefs : A case

Dowling, R.K. (2006). The cruising industry. In, *Cruise Ship Tourism*, Dowling, R.K. (ed.),

Eakin,C.M., Morgan, J.A., Smith, T.B., Liu, G., Alvarez-Filip, L., Baca, B., Bouchon, C.,

Equations. (2003). Tourism and displacement: Karnataka's "model" tourism project –

Equations. (2009). Who really benefits from tourism? Equations Critiques on Tourism Development, Equitable Tourism Options, Bangalore, India, pp. 1-75 Ewel, J.J., and Whitmore JL. (1973). The ecological life zones of Puerto Rico and the U.S.

Fabricius, K.E. (2005). Effects of terrestrial runoff on the ecology of corals and coral reefs:

Feliciano, C.C. (1976). *Apuntes y Comentarios de la Colonización y Liberación de la Isla de Culebra*.

review and synthesis. *Marine Pollution Bulletin*, Vol. 50, pp. 125-146

Virgin Islands. U.S. Forest Service Research Paper ITF-18.

Fundación de Culebra, Culebra, PR, pp. 1-278

Pilikula, Investigation Report (Final Draft), Equitable Tourism Options, Bangalore,

destination decline. *Tourism Management*, Vol. 30, pp. 512-521

CAB International, Oxxfordshire, U.K., pp. 3-17

Piedras, Puerto Rico, ISBN :968-6308-16-4, pp. 1-346

Vol. 67, No. 1-2, pp. 280-292

para Vistas Públicas, julio 2008

337

No. 1, pp. 126-130

pone.0013969, pp. 1-10

India, pp. 1-20

transport on coastal environments : A review. *Estuarine, Coastal and Shelf Science*,

Terrenos y Manejo de la Reserva Natural Corredor Ecológico del Noreste. Borrador

tourism in an ecotourism destination. *Ocean and Coastal Management*, 53, pp. 234-244

*Development*, Princeton University Press, ISBN 0-691-07716-9, Princeton, NJ, pp. 1-

study in selection of environmental indicators. *Environmental Management*, Vol. 33,

Brandt, M., Bruckner, A., Cameron, A., Carr, L., Chiappone, M., James, M., Crabbe, C., Day, O., de la Guardia-Llanso, E, DiResta, D., Gilliam, D., Ginsburg, R., Gore, S., Guzmán, H., Hernández-Delgado, E.A., Husain, E., Jeffrey, C., Jones, R., Jordán-Dahlgren, E., Kramer, P., Lang, J., Lirman, D., Mallela, J., Manfrino, C., Maréchal, J.P., Mihaly, J., Miller, J., Mueller, E., Muller, E., Noordeloos, M., Oxenford, H., Ponce-Taylor, D., Quinn, N., Ritchie, K., Rodríguez, S., Rodríguez-Ramírez, A., Romano, S., Samhouri, J., Schmahl, G., Steiner, S., Taylor, M., Walsh, S., Weil, E., and Williams, E. 2010. Caribbean corals in crisis: Record thermal stress, bleaching and mortality in 2005. *Plos One*, Vol. 5, No. 11: e13969. doi:10.1371/journal.


Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

*Environmental Management*, Vol. 19, No. 1, pp. 75-79

Department, University of Colorado, Boulder, CO.

Instrucción, San Juan, PR, pp. 1-31

Vol. 22, pp. 835-848

25, No. 1, pp. 189-208

*to 21, 2005,* p. 4-5

*Eos* Vol. 87, pp. 233–241

257, pp. 75-84

Salamanca, España

pp. 309-331

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 395

Kocasoy, G. (1989). The relationship between coastal tourism, sea pollution and public health : A case study from Turkey. *The Environmentalist*, Vol. 9, No. 4, pp. 245-251 Kocasoy, G. (1995). Effects of tourist population pressure on pollution of coastal seas.

Labadie-Eurite, J. (1949). La mecanización agrícola en Puerto Rico. Departamento de

Larsen, M.C. (1997). Tropical geomorphology and geomorphic work: A study of geomorphic

Larsen, M.C., and Parks, J.E. (1997). How wide is a road? The association of road and mass

Larsen, M.C., and Torres-Sánchez AJ. (1998). The frequency and distribution of recent

Larsen, M.C., and Webb, R.M.T. (2009). Potential effects of runoff, fluvial sediments, and

Liang, A.G. (2004). Cases of heavy precipitation and flash floods in the Caribbean during El

London, J.B. (2005), Public perception and impacts of cruise ship tourism : Key West.

Loper, C. (2005), Overview of the socioeconomic impacts of cruise tourism. *Proceedings of the* 

Loya, Y. (1976). Effects of water turbidity and sedimentation on the community structure of Puerto Rican corals. *Bulletin of Marine Science*, Vol. 26, No. 4, pp. 450-466. Lugo AE, Ramos O, Molina S, Scatena FN. 1996. A fifty-three year record of land use change

Mann, M.E., and Emanuel, K.A. (2006). Atlantic hurricane trends linked to climate change.

Martinuzzi, S., Gould, W.A., and Ramos-González, O.M.(2007). Land development, land

Martinuzzi, S., Gould,W.A., Lugo, A.E., and Medina, E.(2009). Conversion and recovery of

Méndez-Lázaro, P. (2010). Análisis de tendencias hidroclimáticas recientes y transformación

Tropical Forestry, USDA Forest Service, Río Piedras, PR, pp. 1-13

census data. *Landscape and Urban Planning*, Vol. 79, pp. 288-297

http://www.ehow.com/facts\_5561618\_effects-tourism-caribbean.html

Mills, E. (2005). Insurance in a climate of change. *Science*, Vol. 309, pp. 1040-1044

McDaniel, P. (2008). The impacts of tourism on the Caribbean,

Niño winters. *Journal of Hydrometeorology*, Vol. 5, pp. 577-594

processes and sediment and water budgets in montane humid-tropical forested and developed watersheds, Puerto Rico. Ph.D. Dissertation, Geography

wasting in a forested montane environment. *Earth Surface Processes and Landforms*,

landslides in three montane tropical regions of Puerto Rico. *Geomorphology*, Vol. 24,

nutrient discharges on the coral reefs of Puerto Rico. *Journal of Coastal Research*, Vol.

*Proceedings of the 14th Biennial Coastal Zone Conference,New Orleans, Louisiana, July 17* 

*14th Biennial Coastal Zone Conference,New Orleans, Louisiana, July 17 to 21, 2005,* p. 2-3

in the Guánica Forest Biosphere Reserve and its vicinity. International Institute of

use, and urban sprawl in Puerto Rico-Integrating remote sensing and population

Puerto Rican mangroves: 200 years of change. *Forest Ecology and Management*, Vol.

del paisaje en la isla de Puerto Rico. Disertación Doctoral. Universidad de


Hawkins, J.P., Roberts, C.M., Van't Hof, T., De Meyer, K., Tratalos, J., and Aldam, C. (1999)

Hawkins, J.P., and Roberts, C.M. (1994). The growth of coastal tourism in the Red Sea : Present and future effects on coral reefs. *Ambio*, Vol. 23, No. 8, pp. 503-508 Helmer, E.H. (2004). Forest conservation and land development in Puerto Rico. *Landscape* 

Helmer, E.H., Ramos, O., López, T.D.M., Quiñones, M., and Díaz, W. (2002). Mapping the

Hernández-Delgado, E.A.; Sandoz, B.; Bonkosky, M.; Norat-Ramírez, J. and Mattei, H.

Hernández-Delgado, E.A., and Sandoz-Vera, B. (2011). Impactos antropogénicos en los

Hernández-Pacheco, R., Hernández-Delgado, E.A., and Sabat, A.M. (2011). Demographics of

Hinrichsen, D. (1998). The coastal population explosion. *Trends and Future Challenges of U.S.* 

Hoegh-Guldberg, O. (1999). Climate change, coral bleaching and the future of the world's

Hunter, J.M., and Arbona, S.I. (1995). Paradise lost: An introduction to the geography of

Intergovernmental Panel on Climate Change (IPCC). (2007). Climate Change 2007. Working

Justicia-Doll, S. (2011). Denuncian conflicto de interés detrás del Corredor Ecológico del

http://www.primerahora.com/denuncianconflictodeinteresdetrasdelcorredorecol

*Ambientales en las Islas de Puerto Rico*. Ediciones SM, Cataño, pp. 62-72 Hernández-Delgado, E.A., Hutchinson-Delgado, Y.M., Laureano, R., Hernández-Pacheco,

Instituto de Cultura Puertorriqueña, San Juan, PR. pp. 281-356

*of the 11th International Coral Reef Symposium*, pp. 747-751

2, No. 1):art9. 1-13. doi:10.1890/ES10-00065.1, pp. 1-13

*National Ocean and Coastal Policies*, NOAA, pp. 27-29

coral reefs. *Marine and Freshwater Research*, Vol 50, pp. 839-866

*Conservation Biology*, Vol. 13, No. 4, pp. 888-897

*Ecology*, Vol. 19, pp. 29-40

63, pp. 83-92

1355

and Chen, Z., pp. 1-996

ogicodelnoreste-571156.html

Noreste, *Primera Hora*, October 26, 2011,

Effects of recreational scuba diving on Caribbean coral and fish communities.

forest type and land cover of Puerto Rico, a component of the Caribbean Biodiversity Hotspot. *Caribbean Journal of Science*, Vol. 38, No. 3-4, pp. 165-183 Hernández-Delgado, E.A. (2005). Historia natural, caracterización, distribución y estado

actual de los arrecifes de coral Puerto Rico. *In*, R.L. Joglar (Ed.), *Biodiversidad de Puerto Rico: Vertebrados Terrestres y Ecosistemas. Serie Historia Natural*. Editorial

(2010). Impacts of non-point source sewage pollution on Elkhorn coral, *Acropora palmata* (Lamarck), assemblages of the southwestern Puerto Rico shelf. *Proceedings* 

arrecifes de coral. In, J. Seguinot-Barbosa (ed.), *Islas en Extinción: Impactos* 

R., Ruiz-Maldonado, T.M., Oms, J., and Díaz, P.L. (2011). Sediment stress, water turbidity and sewage impacts on threatened Elkhorn coral (*Acropora palmata*) stands at Vega Baja, Puerto Rico. *Proceedings of the Gulf and Caribbean Fisheries Institute*, Vol.

bleaching in the Caribbean reef-building coral *Montastraea annularis*. *Ecosphere*, Vol.

water pollution in Puerto Rico. *Social Science and Medicine*, Vol. 40, No. 10, pp. 1331-

Group I Report. *"The Physical Science Basis"* 978 0521 70596-7 Paperback*.* Edited By: Solomon, S., Qin, D., Manning, M., Marquis, M., Averyt, K., Tignor, M., Miller, L.,


http://www.ehow.com/facts\_5561618\_effects-tourism-caribbean.html


Long-Term Impacts of Non-Sustainable Tourism and Urban Development in Small

51-0176-5, InTech, Available from:

*Ecology Progress Series*, Vol. 62, pp. 185-202

*Marine Science*, Vol. 69, No. 2, pp. 793-803

*Transactions of the Royal Society A*, Vol. 369, pp. 85-98

University of Rhode Island, pp. 1-183

cyclone formation. *Journal of Climatology* Vol. 11, pp. 578–590

pp. 1606-1626

52, No. 3, pp. 386-397

181-188

Rico

pp. 1-5, 10

Tropical Islands Coastal Habitats in a Changing Climate: Lessons Learned from Puerto Rico 397

Ramos-González, O. (2001). Assessing vegetation and land cover changes in northeastern Puerto Rico: 1978-1995. *Caribbean Journal of Science*, Vol. 37, No. 1-2, pp. 95-106 Ramos-Scharrón, C.E. (2010). Sediment production from unpaved roads in a sub-tropical

Ramos-Scharrón, C.E., J.M. Amador, & E.A. Hernández-Delgado. 2012. An Interdisciplinary

 http://www.intechopen.com/articles/show/title/an-interdisciplinary-erosionmitigation-approach-for-coral-reef-protection-a-case-study-from-the-eas Ramos-Scharrón, C.E., Hernández-Delgado, E.A, and Torres-Pulliza, D. in prep. Land use changes in the Río Fajardo watershed in Northeastern Puerto Rico: 1936-2004. Rogers, C.S. (1990). Responses of coral reefs and reef organisms to sedimentation. *Marine* 

Rogers, C.S., and Garrison, V.H. (2001). Ten years after the crime : Lasting effects of damage

Ropelewski, C.F., and Halpert, M.S. (1987). Global and regional scale precipitation patterns

Roy, S.S., and Balling, Jr., R.C. (2005). Harmonic and simple kriging analyses of diurnal

Rudel, T.K.; Perez-Lugo, M. and Zichal, H. (2000). When fields revert to forest: Development

Ryan, K.E., Walsh, J.P., Corbett, D.R., Winter, A. (2008). A record of recent change in

Shapiro, L.J., and Goldenberg, S.B. (1998). Atlantic sea surface temperature and tropical

Smith, R.M., and Abruña, F. 1955. Soil and water conservation research in Puerto Rico, 1938

Snow, J.T. (1993). Dealing with golf's environmental issues. *Wetlands Watch*, Vol. 2, No. 2,

Squillante L.J., Torell, E.C, and Diamond N.K (eds.). (2004). Counting on people? Then who

Titus, J.G., Anderson, K.E., Cahoon, D.R., Gesch, D.B.,Gill, S.K., Gutiérrez, B.T., Thieler, E.R.,

from a cruise ship anchor on a coral reef in St. John, U.S. Virgin Islands. *Bulletin of* 

associated with the El Niño/Southern Oscillation. *Monthly Weather Review*, Vol. 115,

precipitation patterns in Puerto Rico. *Caribbean Journal of Science*, Vol. 41, No. 2, pp.

and spontaneous reforestation in post-war Puerto Rico. *Professional Geographer*, Vol.

terrestrial sedimentation in a coral-reef environment, La Parguera, Puerto Rico: A response to coastal development? *Marine Pollution* Bulletin, Vol. 56, pp. 1177-1183 Sanderson, M.G., Hemming, D.L., and Betts, R.A. (2011). Regional temperature and

precipitation changes under high-end (≥4C) global warming. *Philosophical* 

to 1947. UPR Agricultural Experiment Station, Bulletin No. 124, Río Piedras, Puerto

counts? Teaching cases: The population and gender dimensions of coastal management. Coastal Management Report 2247, Coastal Resources Center,

& Williams, S.J. (2009). Coastal elevations and sensitivity to sea-level rise: A focus

Erosion Mitigation Approach for Coral Reef Protection – A Case Study from the Eastern Caribbean. 127-160. In, A. Cruzado (Ed.), *Marine Ecosystems*, ISBN: 978-953-

dry setting – Southwestern Puerto Rico. *Catena*, Vol. 82, pp. 146-158


Monroe W. (1977). Las divisiones geomórficas de Puerto Rico. In: De Galiñanes, M.T.B.

(Ed.), *Geovisión de Puerto Rico- Aportaciones Recientes al Estudio de la Geografía.*  Editorial Universitaria, Universidad de Puerto Rico, Río Piedras, PR, pp 1-43 Mosse, D. (2004). Is good policy unimplementable? Reflections on the ethnography of aid policy and practice. *Development and* Change, Vol. 35, No. 4, pp. 639-671 Murray, T.J. (2005), The impact of cruise ship tourism on local economies. *Proceedings of the 14th Biennial Coastal Zone Conference, New Orleans, Louisiana, July 17 to 21, 2005,* p. 1 Neelin, J.D., Münnich, M., Su, H., Meyerson, E, and Holloway, C.E. (2006). Tropical drying

trends in global models and observations. *Proceedings of the National Academy of* 

Low Atlantic hurricane activity in the 1970s and 1980s compared to the past 270

Nyberg, J., Malmgren, B.A., Winter, A., Jury, M.A., Kilbourne, K.H, and Quinn, T.M. (2007).

OPDAS, Inc. (1968). A development plan and recommended program for Finca Piñones. Preparado para la Compañía de Fomento Industrial. 18 de julio de 1968 Padilla, M. (2007). Caribbean Pleasure Industry- Tourism, Sexuality, and AIDS in the Dominican Republic. The University of Chicago Press, Chicago, IL, pp. 1-294 Pérez, M. (2002). The place of abandonment: Geography, race, and nature in Puerto Rico.

Peterson, T.C., Taylor, M.A., Demeritte, R., Duncombe, D.L., Burton, S., Thompson, F.,

Pleumarom, A. (1992). Course and effect: Golf tourism in Thailand. *The Ecologist*, Vol. 22,

Pleumarom, A. (1995). Eco-tourism or eco-terrorism? Briefing paper presented to the

Pollnac, R.B., & Crawford, B. (2000). Assessing behavioral aspects of coastal resource use.

Puerto Rico Planning Board [PRPB]. (1977). Áreas Naturales de Puerto Rico. San Juan,

Puerto Rico Planning Board [PRPB]. (1995). Plan de Usos de Terrenos para el Área de

Puerto Rico Planning Board [PRPB]. (1996). Plan Conceptual de Desarrollo Turístico de la

Puerto Rico Planning Board [PRPB], and Puerto Rico Department of Natural and

Puerto Rico Tourism Company [PRTC]. (2008). Plan Maestro para el Desarrollo Turístico Sostenible de Puerto Rico, Compañia de Turismo de Puerto Rico, pp. 1-191 + App Puerto Rico Tourism Company [PRTC]. (2009). Puerto Rico Tourism Strategic Plan : 2009-

Report 2226, Coastal Resources Center, University of Rhode Island

Costa Nordeste de Puerto Rico. San Juan, Puerto Rico.

2013, Compañia de Turismo de Puerto Rico, pp. 1-62

Porter, A., Mercedes, M., Villegas, E., Semexant-Fils, R., Klein-Tank, A., Martis, A., Warner, R., Joyette, A., Mills, W., Alexander, L. and Gleason, B. (2002). Recent changes in climate extreme in the Caribbean region*. Journal of Geophysical Research*,

German Association for Political Economy, April 1995*. Justice Networker, No. 6,* 

Planificación Especial de Piñones. Negociado de Planes de Usos de Terrenos, 14 de

Environmental Resources [PRDNER]. (2011). Plan y Reglamento de Calificación Especial Área de Planificación Especial de la Gran Reserva del Noreste (APEGRN).

*Science USA*, Vol. 103, pp. 6110-6115

years. *Nature*, Vol. 447, pp. 698-702

Vol. 107, No. D21, p. 4106

No. 3, pp. 104-110

*Winter 1995.*

Puerto Rico.

junio de 1995.

Ph.D. Dissertation, University of California, Berkeley.


 http://www.intechopen.com/articles/show/title/an-interdisciplinary-erosionmitigation-approach-for-coral-reef-protection-a-case-study-from-the-eas


**19** 

*Croatia* 

Tihomir Luković *University of Dubrovnik* 

**Nautical Tourism and Its Function in the** 

Tourism as an industry, and nautical tourism as an integral part of it, is an important sector whose indirect effects are more important than the direct, thus supporting the development of many other industries. Within the last 30 years, the three core industries of nautical tourism (the marina, charter and cruise industries) have been continuously showing high growth rates. In this time of crisis, with its lack of inventiveness and investment, nautical tourism and its sectors become a new opportunity for development. Its growth can be clearly seen at local and regional levels, and its constituent parts are becoming potential local economic leaders. This research focuses on the three core segments of nautical tourism (the marina, charter and cruise industries) which have not been sufficiently studied either

The aim of this paper is to demystify these three industries of nautical tourism, to indicate the potential for development, especially in Europe, and to contribute both to the scientific and practical economic thinking on this topic. The goal is to suggest to investors the real and unused potential for development, and the fact that investment in the industry of nautical

Methodologically, decades of research, experience in the economic sector and the analysis and synthesis of research serve as a foundation for this work. An additional groundwork for the conclusions presented in this paper is research into current trends in all aspects of

The basic hypothesis is the following: there is no doubt that all three industries of nautical tourism are highly profitable, especially the marina and cruise industries. The best evidence for this claim is provided by an economic analysis of the current situation, though there is

This paper consists of two main parts. The first relates to the theoretical study, definition and positioning of nautical tourism in the European economies and markets. The second

**Nautical tourism** as a phenomenon is an aspect of tourism in general, from which it has developed as a subtype. The question of defining nautical tourism should thus be considered

**1. Introduction** 

theoretically or economically.

tourism is highly profitable.

still a lack of scientific study regarding this hypothesis.

**2. Concept and definition of nautical tourism** 

part covers specific and practical explanations and analysis.

nautical tourism.

**Economic Development of Europe** 

on the Mid-Atlantic region. Synthesis and Assessment Product 4.1, Report by the U.S. Climate Change Science Program and the Subcommittee on Global Climate Change Research, pp. 1-298


### **Nautical Tourism and Its Function in the Economic Development of Europe**

Tihomir Luković *University of Dubrovnik Croatia* 

#### **1. Introduction**

398 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

US Fish and Wildlife Service. (2002). Comentarios a Declaración de Impacto Ambiental

Veron, J.E.N., Hoegh-Guldberg, O., Lenton, T.M., Lough, J.M., Obura, D.O., Pearce-Kelly, P.,

Warnken, J., and Thompson, D. (2001). Golf course development in a major tourist

Whitmore, M, and De Lacy, T. (2004). Sustainable development and management of tourism

Wilkinson, C., and Souter, D. (2008). Status of Caribbean coral reefs after bleaching and

Wolman, M.G. (1967). A cycle of sedimentation and erosion in urban river channels. *Geografiska Annaler, Series A, Physical Geography*, Vol. 49, No. 2/4, pp. 385-395 World Travel and Tourism Council [WTTC]. (2005). Trinidad and Tobago : The impact of

World Travel and Tourism Council [WTTC]. (2011). Travel and tourism economic impact

U.S. Climate Change Science Program. (2008). The Effects of Climate Change on Agriculture,

and Assessment Product 4.3 ('Effects of Climate Change on Biodiversity'). U.S. Department of Commerce and Puerto Rico Department of Natural Resources. (1978).

Land Resources, Water Resources, and Biodiversity in the United States, Synthesis

Puerto Rico Coastal Management Program and Final Environmental Impact

Rainforest Research Centre, Townsville, Australia, pp. 1-152

travel and tourism on jobs and the economy. pp. 1-49

U.S. Census Bureau. (2010). Data for Puerto Rico., U.S. Census Bureau

Change Research, pp. 1-298

Vol. 58, pp. 1428-1436

Australia, pp. 1-23

2011 : Caribbean. pp. 1-17

Statement.

Ambiental. 30 de enero de 2002.

*Management*, Vol. 27, No. 5, pp. 681-696

on the Mid-Atlantic region. Synthesis and Assessment Product 4.1, Report by the U.S. Climate Change Science Program and the Subcommittee on Global Climate

Preliminar San Miguel-Four Seasons Resort. Sometidos ante la Junta de Calidad

Sheppard, C.R.C., Spalding, M., Stafford-Smith, M.G., and Rogers, A.D. (2009). The coral reef crisis : The critical importance of <350 ppm CO2. *Marine Pollution Bulletin*,

destination : Implications for planning and management. *Environmental* 

in Moreton Bay : Executive Summary. Sustainable Tourism CRC, Brisbane,

hurricanes in 2005. Global Coral Reefs Monitoring Network, and Reef and

Tourism as an industry, and nautical tourism as an integral part of it, is an important sector whose indirect effects are more important than the direct, thus supporting the development of many other industries. Within the last 30 years, the three core industries of nautical tourism (the marina, charter and cruise industries) have been continuously showing high growth rates. In this time of crisis, with its lack of inventiveness and investment, nautical tourism and its sectors become a new opportunity for development. Its growth can be clearly seen at local and regional levels, and its constituent parts are becoming potential local economic leaders. This research focuses on the three core segments of nautical tourism (the marina, charter and cruise industries) which have not been sufficiently studied either theoretically or economically.

The aim of this paper is to demystify these three industries of nautical tourism, to indicate the potential for development, especially in Europe, and to contribute both to the scientific and practical economic thinking on this topic. The goal is to suggest to investors the real and unused potential for development, and the fact that investment in the industry of nautical tourism is highly profitable.

Methodologically, decades of research, experience in the economic sector and the analysis and synthesis of research serve as a foundation for this work. An additional groundwork for the conclusions presented in this paper is research into current trends in all aspects of nautical tourism.

The basic hypothesis is the following: there is no doubt that all three industries of nautical tourism are highly profitable, especially the marina and cruise industries. The best evidence for this claim is provided by an economic analysis of the current situation, though there is still a lack of scientific study regarding this hypothesis.

This paper consists of two main parts. The first relates to the theoretical study, definition and positioning of nautical tourism in the European economies and markets. The second part covers specific and practical explanations and analysis.

#### **2. Concept and definition of nautical tourism**

**Nautical tourism** as a phenomenon is an aspect of tourism in general, from which it has developed as a subtype. The question of defining nautical tourism should thus be considered

Nautical Tourism and Its Function in the Economic Development of Europe 401

2. Boaters do not in general limit themselves to marinas. It should be taken into account that many prefer to anchor in bays, or use ungoverned or private moorings, preferring to retain some independence from commercial facilities. Hence the inclusion of the phrase "*or out of the ports*…". The growth of nautical tourism and the range of activities it involves carry the risk of saturation of coastal regions, and it is important to recognise the values of sustainable development if these areas and their attractions are to be

3. Apart from the essential term "*vessel"*, we inserted "*and other objects associated with nautical tourist activities*" because of the increasing diversification of such activities. Thus, for example, overnight stays while sailing increasingly involve accommodation on a fixed site, which is an integral part of many Mediterranean marinas. Other activities and types of vessels (for example tourist submarines and bathyscaphes) are occasionally available, and they are classified within the field of nautical tourism, as

4. In addition to sports, recreation and entertainment, to cover the whole range of recognised interests we included the term "*and other needs*". This was done because wider motive–based demands are expanding on a daily basis and it is a part of the growing, strategic management of marinas which offers the highest level of quality in

Basically, this definition incorporates all the elements that are generally included in the concept of nautical tourism. Other authors have noted many specific features, but this new definition is closer to the objective phenomena that can be observed across the whole range of nautical tourism activities. However, it should be noted that tourism and nautical tourism are *derived concepts* that represent a range of activities susceptible to change. That is why we say that nautical tourism is a multidisciplinary activity that cannot be unequivocally specified.

In the interests of simplicity and for practical daily usage of the term, we propose a shorter version of the definition: **Nautical tourism is a poly-functional tourist activity with a** 

This simple and practical definition emphasises the main characteristics of nautical tourism that places it in the tourist industry, but involving some measure of seafaring skill and

Considering the above mentioned basic definition of nautical tourism, which states that **nautical tourism is a poly-functional tourist activity with a strong maritime component,** 

6 From reviewed lectures "Nautički turizam" held in 2006 by professor Luković, PhD at the Department

more comprehensive and thus more suitable.

they are associated with marinas in terms of location.

preserved.

nautical tourism.

**strong maritime component**.6

**3. Classification of nautical tourism** 

for economy and business, University of Dubrovnik

knowledge.

shown that *navigation* is not a specific requirement for nautical tourism. Some tourists, for example, may take a charter boat but remain on board without leaving port. Moreover, cruising as a global business and a aspect of nautical tourism is included in this definition, avoiding a restriction to ports only, but introducing vessels as a means in this segment of tourism. Therefore, the word *navigation* is replaced by *use*, which is

in the context of a general definition of tourism. Etymologically, *nautical tourism* is a combination of two notions, *nautical* and *tourism*. The concept of tourism is known and sufficiently studied in many papers1, so there is no need for further analysis. The second term *nautical* developed from the Greek word *naus,* meaning ship, boat or seamanship. In modern terms, *navigation* is a set of practical and theoretical knowledge and skills necessary for a boat skipper to sail safely and successfully from the port of departure to the port of arrival. The term *navigation,* together with the associated term *maritime,* in its broader sense, signifies seafaring. That is the reason why the term *maritime tourism*, and other concepts denoting nautical tourism, such as the English *yachting tourism* or German *nautische Tourismus,* are used in international communication. Apart from these, the term *maritime tourism* has recently become more common, thus stressing the maritime component of nautical tourism. The focus of *yachting tourism* is on the yacht as a symbol of luxury at sea which is perhaps more concerned with symbols of status than an interest in seafaring. This contributes to a clearer definition of the term nautical tourism, which is actually more a part of the tourist, rather than the marine, industry. In practice, especially at universities, nautical tourism is claimed by faculties of both economics and maritime studies, each for their own reasons.

Among various definitions2 of nautical tourism there are several prescriptive ones. Defining nautical tourism may be a matter of concern in the specific context of national legislation, for example in Croatia, which in its *lex specialis* "Act on the Provision of Tourism Services"3 defines nautical tourism and explains what activities can be included under that heading. All these definitions have their particular purpose, so should not be neglected but rather understood and built upon.

It is necessary to create a definition that best suits the scientific and practical needs of research and work in the industry of nautical tourism. Taking the definition of tourism given by the Swiss W.Hunziker and K.Karpf as a starting point, and by using the specifics of nautical tourism practice, it is possible to offer the following definition:

*"Nautical tourism is a sum of poly-functional activities and relations that are caused by the touristsboaters' stay within or out of the ports of nautical tourism, and by the use of vessels or other objects related to the nautical and tourist activities, for the purpose of recreation, sports, entertainment or other needs".*<sup>4</sup>

This definition has elements of a *real, conceptual and nominal* definition, since it clarifies the essence of things, determines the content, and explains the meaning.

Why is this definition acceptable given the circumstances in which nautical tourism occurs?

1. In order to apply the *criteria of comprehensiveness* as much as possible, we avoided the trap of a detailed analysis of nautical and tourist activities. Various analyses5 have

<sup>1</sup> Kunziker, W. i Karpf, K. "Die Grundriss der Allgemeine Fremdenverkehslehre", 1942. Definition is accepted by AIEST and WTO

<sup>2</sup> Luković, T. & Gržetić, Z. "Nautičko turističko tržište u teoriji i praksi Hrvatske i europskog dijela Mediterana", HHI – Croatian Hydrographic Institute Split, Split 2007, page 19.-28.

<sup>3</sup> National "Law on The Provision of Tourism Services" 68/2007, article 44

<sup>4</sup> Luković, T. & Gržetić, Z. "Nautičko turističko tržište u teoriji i praksi Hrvatske i europskog dijela Mediterana", HHI – Croatian Hydrographic Institute Split, Split 2007, page 26.

<sup>5</sup> For example TOMAS NAUTIKA 2007., research for one part of the Mediterranean (Croatian coast of the Adriatic), which is conducted by the Institute for Tourism in Zagreb every three years.

in the context of a general definition of tourism. Etymologically, *nautical tourism* is a combination of two notions, *nautical* and *tourism*. The concept of tourism is known and sufficiently studied in many papers1, so there is no need for further analysis. The second term *nautical* developed from the Greek word *naus,* meaning ship, boat or seamanship. In modern terms, *navigation* is a set of practical and theoretical knowledge and skills necessary for a boat skipper to sail safely and successfully from the port of departure to the port of arrival. The term *navigation,* together with the associated term *maritime,* in its broader sense, signifies seafaring. That is the reason why the term *maritime tourism*, and other concepts denoting nautical tourism, such as the English *yachting tourism* or German *nautische Tourismus,* are used in international communication. Apart from these, the term *maritime tourism* has recently become more common, thus stressing the maritime component of nautical tourism. The focus of *yachting tourism* is on the yacht as a symbol of luxury at sea which is perhaps more concerned with symbols of status than an interest in seafaring. This contributes to a clearer definition of the term nautical tourism, which is actually more a part of the tourist, rather than the marine, industry. In practice, especially at universities, nautical tourism is claimed by

Among various definitions2 of nautical tourism there are several prescriptive ones. Defining nautical tourism may be a matter of concern in the specific context of national legislation, for example in Croatia, which in its *lex specialis* "Act on the Provision of Tourism Services"3 defines nautical tourism and explains what activities can be included under that heading. All these definitions have their particular purpose, so should not be neglected but rather

It is necessary to create a definition that best suits the scientific and practical needs of research and work in the industry of nautical tourism. Taking the definition of tourism given by the Swiss W.Hunziker and K.Karpf as a starting point, and by using the specifics of

*"Nautical tourism is a sum of poly-functional activities and relations that are caused by the touristsboaters' stay within or out of the ports of nautical tourism, and by the use of vessels or other objects related to the nautical and tourist activities, for the purpose of recreation, sports, entertainment or* 

This definition has elements of a *real, conceptual and nominal* definition, since it clarifies the

Why is this definition acceptable given the circumstances in which nautical tourism occurs? 1. In order to apply the *criteria of comprehensiveness* as much as possible, we avoided the trap of a detailed analysis of nautical and tourist activities. Various analyses5 have

1 Kunziker, W. i Karpf, K. "Die Grundriss der Allgemeine Fremdenverkehslehre", 1942. Definition is

4 Luković, T. & Gržetić, Z. "Nautičko turističko tržište u teoriji i praksi Hrvatske i europskog dijela

the Adriatic), which is conducted by the Institute for Tourism in Zagreb every three years.

5 For example TOMAS NAUTIKA 2007., research for one part of the Mediterranean (Croatian coast of

2 Luković, T. & Gržetić, Z. "Nautičko turističko tržište u teoriji i praksi Hrvatske i europskog dijela

faculties of both economics and maritime studies, each for their own reasons.

nautical tourism practice, it is possible to offer the following definition:

essence of things, determines the content, and explains the meaning.

Mediterana", HHI – Croatian Hydrographic Institute Split, Split 2007, page 19.-28. 3 National "Law on The Provision of Tourism Services" 68/2007, article 44

Mediterana", HHI – Croatian Hydrographic Institute Split, Split 2007, page 26.

understood and built upon.

accepted by AIEST and WTO

*other needs".*<sup>4</sup>

shown that *navigation* is not a specific requirement for nautical tourism. Some tourists, for example, may take a charter boat but remain on board without leaving port. Moreover, cruising as a global business and a aspect of nautical tourism is included in this definition, avoiding a restriction to ports only, but introducing vessels as a means in this segment of tourism. Therefore, the word *navigation* is replaced by *use*, which is more comprehensive and thus more suitable.


Basically, this definition incorporates all the elements that are generally included in the concept of nautical tourism. Other authors have noted many specific features, but this new definition is closer to the objective phenomena that can be observed across the whole range of nautical tourism activities. However, it should be noted that tourism and nautical tourism are *derived concepts* that represent a range of activities susceptible to change. That is why we say that nautical tourism is a multidisciplinary activity that cannot be unequivocally specified.

In the interests of simplicity and for practical daily usage of the term, we propose a shorter version of the definition: **Nautical tourism is a poly-functional tourist activity with a strong maritime component**.6

This simple and practical definition emphasises the main characteristics of nautical tourism that places it in the tourist industry, but involving some measure of seafaring skill and knowledge.

#### **3. Classification of nautical tourism**

Considering the above mentioned basic definition of nautical tourism, which states that **nautical tourism is a poly-functional tourist activity with a strong maritime component,** 

 6 From reviewed lectures "Nautički turizam" held in 2006 by professor Luković, PhD at the Department for economy and business, University of Dubrovnik

Nautical Tourism and Its Function in the Economic Development of Europe 403

This classification of nautical tourism, which emphasises its three basic types: (1) marinas, (2) charter and (3) cruising, is justified by the specific characteristics and distinguishing

The state recognised commercial ports of nautical tourism, or more popularly **the marina industry,** are an important part of any European economy, regardless of whether a country has access to the sea or not. The attractions of water are a dominant feature in tourism, hence the justification of the German term "Wassertourismus" or water tourism. Nautical tourism can occur in all the waters of the world, so in addition to the sea, it is present on lakes, rivers and canals, i.e. in both salt and fresh water. An analysis of the marina industry is made more difficult by the lack of a unique European system of marina registration. Different sources provide very different data on the number and capacity of marinas, though that need not

The charter industry, as a subtype of nautical tourism, is generally associated with marinas and it would not exist without them. Charter, in terms of renting and providing services related to work on the vessels, expands the range of its activity, in addition to which hiring a professional skipper is quite common. It is estimated that one charter yacht in five includes the hire of a skipper.9 As far as capital goes, charter is the least developed industry within nautical tourism, while at the same time involving higher uncertainty and risks due to its

In relation to capital, cruising is the most developed industry, not only in the context of nautical tourism, but compared to all other industries. The cruising industry offers a rich and varied range of potential regarding vessels, including 300 large international cruise ships, an increasing number of small luxury cruisers (up to 200 passengers), and about 10,000 local traditional vessels, or 'old-timers'. Potential offers consist of excursions or trips lasting one or several days. Such cruises include ports that may or may not be specialized for the reception of cruise ships, so the cruise industry deserves particular attention in terms of research and economic analysis. With about 20 million passengers on large cruisers in 2011 and about twice as many on traditional old-timers worldwide, and with a ten-year increase in passengers carried of over 2.5 times10, with approximately 150,000 employees working directly in the cruise industry, and twice as many in related industries and with a turnover of 34.1 billion euros in related industries, the cruise industry has a significant role not only in many national economies, but also in the global economy. The European contribution to the global market in 2010 was around 20-30%.11. The continuity of development which has been consistently increasing during the past 30 years, with average annual growth rates of 11%, indicates that this industry has grown considerably faster than national economy averages, and has become

The main features of the three core industries of nautical tourism, differentiating them from other industries are the following: (1) they are strongly connected with the sea and fresh water

affect the general conclusions regarding their importance and role in Europe.

an important industry in the European and global economy.

10 Passenger Shipping Association: Discover Cruises – Annual cruise review, 2006

11 European Cruise Council: "The cruise industry, a leader in Europe's economic recovery", "Contribution of Cruise Tourism to the Economies of Europe", Edition 2011, page 3.

**4. Main features of nautical tourism industries** 

9 http://www.europeancruisecouncil.com

features of these industries.

structure and business methods.

its classification should be observed from the scientific and practical aspect. Such a form of analysis and classification is widely used, and all important studies, such as in Germany7 and England8, have applied it. Since this study is linked to such wider research we suggest that the most appropriate classification of nautical tourism would be as follows:


Source: the author T. Luković

Table 1. Classification of nautical tourism

<sup>7</sup> See: Bonn Institute study – dwif/BTE 2002., see: Luković, T. & Gržetić, Z. "Nautičko turističko tržište u teoriji i praksi Hrvatske i europskog dijela Mediterana", HHI – Croatian Hydrographic Institute Split, Split 2007, page 126.

<sup>8</sup> See: Welsh Enterprise Institute University of Glamorgan Business School: "A Study That Applies the VoE Framework to the Marine and Coast Environment of Wales", 2006, also: Luković, T.: "Sukobljene ili sukladne strategije razvoja europskog nautičkog turizma", "Pomorstvo" University of Rijeka, Scientific Journal of Maritime Research, Vol.23 No.2., Rijeka, December 2009, page 341-356.

its classification should be observed from the scientific and practical aspect. Such a form of analysis and classification is widely used, and all important studies, such as in Germany7 and England8, have applied it. Since this study is linked to such wider research we suggest

**NAUTICAL TOURISM INDUSTRY** 

**SECONDARY MAIN ACTIVITIES ADDITIONA**

**Charter Cruising** 

Cruiser harbours: a. Large cruiser *harbours:* Specialized ports, members of "Med-Cruise" Non-specialized

ports

b. Ports for local traditional craft:

> - Coastal ports used by small settlements - Island ports

Cruisers: . Large world cruisers . Local cruisers (traditional): One-day cruising Severaldays cruising

SUBJECT OF THE STUDY

7 See: Bonn Institute study – dwif/BTE 2002., see: Luković, T. & Gržetić, Z. "Nautičko turističko tržište u teoriji i praksi Hrvatske i europskog dijela Mediterana", HHI – Croatian Hydrographic Institute Split,

8 See: Welsh Enterprise Institute University of Glamorgan Business School: "A Study That Applies the VoE Framework to the Marine and Coast Environment of Wales", 2006, also: Luković, T.: "Sukobljene ili sukladne strategije razvoja europskog nautičkog turizma", "Pomorstvo" University of Rijeka, Scientific

Journal of Maritime Research, Vol.23 No.2., Rijeka, December 2009, page 341-356.

**L** 

Shipbuilding of mega-yachts Shipbuilding of small sailing

vessels Production of equipment for nautical tourism Skipper services Information services Sailing schools Research institutes and educational centres Other services

that the most appropriate classification of nautical tourism would be as follows:

 M otor yachts With skipper Bare boat Sa iling yachts With skipper Bare boat

**Harbours for nautical tourism** 

 Berths Moorings Dry marinas Marinas: 1. Categ ory

5. Category 6. Category 7. Category

Source: the author T. Luković

Split 2007, page 126.

Table 1. Classification of nautical tourism

 Diving Surfing Rafting Diving-bells Rowing Fishing Adventurous "Robinson" tourism Lighthouse tourism Etc.

This classification of nautical tourism, which emphasises its three basic types: (1) marinas, (2) charter and (3) cruising, is justified by the specific characteristics and distinguishing features of these industries.

The state recognised commercial ports of nautical tourism, or more popularly **the marina industry,** are an important part of any European economy, regardless of whether a country has access to the sea or not. The attractions of water are a dominant feature in tourism, hence the justification of the German term "Wassertourismus" or water tourism. Nautical tourism can occur in all the waters of the world, so in addition to the sea, it is present on lakes, rivers and canals, i.e. in both salt and fresh water. An analysis of the marina industry is made more difficult by the lack of a unique European system of marina registration. Different sources provide very different data on the number and capacity of marinas, though that need not affect the general conclusions regarding their importance and role in Europe.

The charter industry, as a subtype of nautical tourism, is generally associated with marinas and it would not exist without them. Charter, in terms of renting and providing services related to work on the vessels, expands the range of its activity, in addition to which hiring a professional skipper is quite common. It is estimated that one charter yacht in five includes the hire of a skipper.9 As far as capital goes, charter is the least developed industry within nautical tourism, while at the same time involving higher uncertainty and risks due to its structure and business methods.

In relation to capital, cruising is the most developed industry, not only in the context of nautical tourism, but compared to all other industries. The cruising industry offers a rich and varied range of potential regarding vessels, including 300 large international cruise ships, an increasing number of small luxury cruisers (up to 200 passengers), and about 10,000 local traditional vessels, or 'old-timers'. Potential offers consist of excursions or trips lasting one or several days. Such cruises include ports that may or may not be specialized for the reception of cruise ships, so the cruise industry deserves particular attention in terms of research and economic analysis. With about 20 million passengers on large cruisers in 2011 and about twice as many on traditional old-timers worldwide, and with a ten-year increase in passengers carried of over 2.5 times10, with approximately 150,000 employees working directly in the cruise industry, and twice as many in related industries and with a turnover of 34.1 billion euros in related industries, the cruise industry has a significant role not only in many national economies, but also in the global economy. The European contribution to the global market in 2010 was around 20-30%.11. The continuity of development which has been consistently increasing during the past 30 years, with average annual growth rates of 11%, indicates that this industry has grown considerably faster than national economy averages, and has become an important industry in the European and global economy.

#### **4. Main features of nautical tourism industries**

The main features of the three core industries of nautical tourism, differentiating them from other industries are the following: (1) they are strongly connected with the sea and fresh water

<sup>9</sup> http://www.europeancruisecouncil.com

<sup>10</sup> Passenger Shipping Association: Discover Cruises – Annual cruise review, 2006

<sup>11</sup> European Cruise Council: "The cruise industry, a leader in Europe's economic recovery",

<sup>&</sup>quot;Contribution of Cruise Tourism to the Economies of Europe", Edition 2011, page 3.

Nautical Tourism and Its Function in the Economic Development of Europe 405

Marinas are the commercially most important ports of nautical tourism, and their general features are worth exploring. It is hard to give specific data on the size, type and capacities of the marina industry in Europe because there is no professional association that would collect, process, research and unify the data, and encourage the development of the industry. We can nevertheless estimate that Europe has about 4,40013 salt water marinas, of which more than 1,60014 are of high quality with 400,0015 berths that meet the highest standards. If we take into account about 600 fresh water marinas, and those belonging to markets for which there is no data, it is estimated that Europe has over 5,000 marinas with more than 500,000 berths. Estimates of the marina industry capital amount to 60 billion euros, taking everything into account, from the berths themselves16 to the supporting facilities. If we add charter capital to this, it is clear that this represents a considerable investment on the mega European economic level. These two nautical industries have been insufficiently investigated, and they stand on their own in terms of development, so the

recreational, with the possibility of using additional sport, recreational and

16 The value of an unfinished investment per berth is about 20,000 euros, but there are additional

17 See: Luković, T. & Gržetić, Z. "Nautičko turističko tržište u teoriji i praksi Hrvatske i europskog dijela

need for further research relevant to their development is evident.

**4.1 The marina & charter industries** 

Marinas can be classified according to17:

entertainment facilities

 standard, with basic conveniences, luxury, with high level of conveniences,

14 ADAC: "Marinaführer, Deutschland, Europa", 2010 15 ADAC: "Marinaführer, Deutschland, Europa", 2010

investments worth five to seven times more than the berth itself.

Mediterana", HHI – Croatian Hydrographic Institute Split, Split 2007, page 74.

a. The level of equipment:

b. Types of construction American type Atlantic type Mediterranean type c. Position of maritime zone

 semi-enclosed enclosed d. Marina ownership private municipal public e. Location sea lake river canal

open

13 www.portbooker.org

activities, and (2) they generally take place under some kind of local concession. In addition to a strong connection with the sea and navigation, the nautical tourism business requires some measure of seafaring skills. The sea and other water bodies are a particular aspect of the destination to which these industries must adapt. Conducting a business under concession has an effect in two ways, depending on whether the concession is (1) direct or (2) indirect. For example, in the marina industry there is a direct concession implemented through a concession contract. In the charter and cruising industries, the concession is indirect or hidden and is implemented through a variety of resources for the maintenance of waterways etc.

In addition to the specific circumstances typical for nautical tourism and its sub-industries, there is a strong element of *seasonality*, which is a characteristic of all types of tourism. This seasonal aspect of the industry demands particular management skills and problem-solving strategies to maintain business continuity. Certainly, the impact of seasonality is not absolutely negative, and although it may show some degree of variation through the subindustries of nautical tourism, but remains always a key feature of the industry.

The connection between the industry and sub-industries of nautical tourism with the destination can create a complex interdependence and mutual impact; this effect is very variable but can be extremely strong. Seen from a market perspective, the nautical tourism market can be considered in terms of *familiarity or novelty*, and it can be classified into:


Some nautical industries influence the development of a certain site or region depending on the market, i.e. the destination which is their focus. That fact refers to all European markets, but with variations in the type and degree of influence. This topic will be analysed further in the text.

Since the charter and marina industries are closely connected, they will be dealt with as such in this paper. This study does not refer to the characteristics of the supply and demand market because they are already well known12, but it will consider some less recognised characteristics of the development of nautical tourism and the economy in general.

 12 Institute for tourism Zagreb: "Tomas nautika 2007" and "Tomas cruising 2006"

#### **4.1 The marina & charter industries**

404 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

activities, and (2) they generally take place under some kind of local concession. In addition to a strong connection with the sea and navigation, the nautical tourism business requires some measure of seafaring skills. The sea and other water bodies are a particular aspect of the destination to which these industries must adapt. Conducting a business under concession has an effect in two ways, depending on whether the concession is (1) direct or (2) indirect. For example, in the marina industry there is a direct concession implemented through a concession contract. In the charter and cruising industries, the concession is indirect or hidden and is implemented through a variety of resources for the maintenance of waterways etc.

In addition to the specific circumstances typical for nautical tourism and its sub-industries, there is a strong element of *seasonality*, which is a characteristic of all types of tourism. This seasonal aspect of the industry demands particular management skills and problem-solving strategies to maintain business continuity. Certainly, the impact of seasonality is not absolutely negative, and although it may show some degree of variation through the sub-

The connection between the industry and sub-industries of nautical tourism with the destination can create a complex interdependence and mutual impact; this effect is very variable but can be extremely strong. Seen from a market perspective, the nautical tourism market can be considered in terms of *familiarity or novelty*, and it can be classified into:

 A market that is new for business and for boaters - the new market; today it is largely theoretical, although there are some parts of Europe without developed tourism and

 A market that is new to boaters, but although recognised by local businesses circumstances have prevented its commercial development – **an effectively new market** (national parks, military zones in Italy and Croatia which have potential as marinas, but to which until recently entry was not permitted; for example particular

 A market that was known to boaters, but for various reasons have not been commercially developed - **potentially new markets** (bays without infrastructure, most

 A market that is developing and expanding its features, and becoming a part of the market supply of nautical tourism – **developing new market** (suitable Italian, Austrian and German lakes, as well as some Mediterranean tourist markets, like Kaštela and

Some nautical industries influence the development of a certain site or region depending on the market, i.e. the destination which is their focus. That fact refers to all European markets, but with variations in the type and degree of influence. This topic will be analysed further in

Since the charter and marina industries are closely connected, they will be dealt with as such in this paper. This study does not refer to the characteristics of the supply and demand market because they are already well known12, but it will consider some less recognised

characteristics of the development of nautical tourism and the economy in general.

12 Institute for tourism Zagreb: "Tomas nautika 2007" and "Tomas cruising 2006"

of the Greek coast without sufficiently developed marina industry).

industries of nautical tourism, but remains always a key feature of the industry.

they are potential new markets.

Skradin in Croatia).

the text.

political destinations like Brijuni in Croatia).

Marinas are the commercially most important ports of nautical tourism, and their general features are worth exploring. It is hard to give specific data on the size, type and capacities of the marina industry in Europe because there is no professional association that would collect, process, research and unify the data, and encourage the development of the industry. We can nevertheless estimate that Europe has about 4,40013 salt water marinas, of which more than 1,60014 are of high quality with 400,0015 berths that meet the highest standards. If we take into account about 600 fresh water marinas, and those belonging to markets for which there is no data, it is estimated that Europe has over 5,000 marinas with more than 500,000 berths. Estimates of the marina industry capital amount to 60 billion euros, taking everything into account, from the berths themselves16 to the supporting facilities. If we add charter capital to this, it is clear that this represents a considerable investment on the mega European economic level. These two nautical industries have been insufficiently investigated, and they stand on their own in terms of development, so the need for further research relevant to their development is evident.

Marinas can be classified according to17:

	- standard, with basic conveniences,
	- luxury, with high level of conveniences,
	- recreational, with the possibility of using additional sport, recreational and entertainment facilities
	- American type
	- Atlantic type
	- Mediterranean type
	- open
	- semi-enclosed
	- enclosed
	- private
	- municipal
	- public
	- sea
	- lake
	- river
	- canal

<sup>13</sup> www.portbooker.org

<sup>14</sup> ADAC: "Marinaführer, Deutschland, Europa", 2010

<sup>15</sup> ADAC: "Marinaführer, Deutschland, Europa", 2010

<sup>16</sup> The value of an unfinished investment per berth is about 20,000 euros, but there are additional investments worth five to seven times more than the berth itself.

<sup>17</sup> See: Luković, T. & Gržetić, Z. "Nautičko turističko tržište u teoriji i praksi Hrvatske i europskog dijela Mediterana", HHI – Croatian Hydrographic Institute Split, Split 2007, page 74.

Nautical Tourism and Its Function in the Economic Development of Europe 407

while a fully equipped berth can reach a price of 40,000€. Marinas belonging to other markets, particularly fresh water marinas, have significantly lower investment costs, and are generally of lower attractiveness. Through descriptive analysis, the ROI (return on investment) in marinas is seen to be between 6 and 8 years, depending on a number of factors. In developed markets the role of the State is to support growth, while local authorities, together with investors, can build a model of sustainable development. In less developed markets, or economies in transition, development is more difficult and

**The charter Industry** is connected with the marina industry through berths and the utilization of marina facilities. The business operations of yacht charter companies are specific and complex. There are a number of small companies on the market operating with one or more vessels, but there are also companies operating with thousands of vessels.

In addition to these two packages, charter companies sometimes hire skippers through skipper associations that operate independent of the charter companies. It is interesting how the demand for these two types of charter seem to reverse every 5 to 7 years, but retain a ratio of about 3:1. Charter company fleets consist of vessels that can be (1) motor and (2) sailing boats. A yacht charter fleet is formed in various ways, but the most common is through the leasing of private yachts provided by owners for charter companies by virtue of a contract. In such cases of leasing, business tends to be very risky, and small companies are often faced with problems. For example, in Croatia in 1996 the demand for boats fell abruptly due to the state of war in Serbia and Kosovo. Companies with charter fleet acquired through leasing could not meet repayments, so practically overnight the banks became owners of a large charter fleet. This problem has eventually been solved, but not

Large charter companies operate in attractive tourist destinations, offering a wide range of yachts and services. Demand tends towards larger vessels regardless of whether sail or motor. If we take into account the definition18 *that a yacht is a vessel longer than 12 metres, and mega-yacht longer than 24 metres (80 feet)*, then there is an increased demand for these types of boats. One advantage of the charter business compared to the marina industry is mobility. Large charter companies can deal with seasonality by moving their fleet from an off-season destination to one where the season is starting. Marinas do not have that possibility. Small charter companies cannot use that strategy of diversification, so they must have other ways to overcome the adverse effects of seasonality. Studies show that on average in 50% of cases charter companies use the services of tourist agencies to rent their vessels.19 The charter industry business, especially with a fleet on lease, is quite difficult, and there are several important principles and rules derived from experience. For instance, a charter company must have about 10 yachts to keep a maintenance team of 10 workers. Likewise, for a charter

without consequences for the development of the charter industry in Croatia.

18 Definitions generally accepted on the Mediterranean (http://www.poslovni.hr )

Croatia", Naše more, Znanstveni časopis za more i pomorstvo, Vol. 58. 1-2, 2011. str. 64-73

19 Gračan, D. & Zadel, Z. & Rudančić-Lugarić, A.: "'Four Stars Charter Quality' in charter service of

disorganized, which places added burdens on the investment.

Charter companies generally offer two alternative packages:

1. Bareboat charter without skipper 10. Vessel charter with skipper.

Each of these classifications suggests its own purpose and context for research. Since the marina industry is a part of almost every national economy, its importance is reflected through the facilities it offers on the market. Analysis of the marina industry points to the considerable variations that occur across destinations and the way in which marinas adapt to them. Given that starting point, the varied role of marinas in Europe can be classified as follows:


Given the above classification and the analysis of marina locations which influence the destination and general development, it can be seen that there are two basic models for the influence of marinas on the destination, i.e. locality and region. That effect is associated with the level of development of a destination, and with the strategic development plan for the marina in the destination. Mutual opportunities and interests of the subjects of development meet here. These two models are both worth researching, and so will both be analysed and explained later.

 a. Empuriabrava–the biggest marina-city in Europe

b. Marina Frapa, the world's best marina in 2006 and 2007

Source: Internet, http://www.immocostabrava.com/en & http://www.marinafrapa.com/hr

Fig. 1. Marinas in Europe (Mediterranean)

An analysis derived from experience and related to the investment capital aspect of the marina industry shows that few experts are aware that when building a marina on the Mediterranean (Mediterranean type) the initial price of an unfinished berth is about 20,000€, while a fully equipped berth can reach a price of 40,000€. Marinas belonging to other markets, particularly fresh water marinas, have significantly lower investment costs, and are generally of lower attractiveness. Through descriptive analysis, the ROI (return on investment) in marinas is seen to be between 6 and 8 years, depending on a number of factors. In developed markets the role of the State is to support growth, while local authorities, together with investors, can build a model of sustainable development. In less developed markets, or economies in transition, development is more difficult and disorganized, which places added burdens on the investment.

**The charter Industry** is connected with the marina industry through berths and the utilization of marina facilities. The business operations of yacht charter companies are specific and complex. There are a number of small companies on the market operating with one or more vessels, but there are also companies operating with thousands of vessels. Charter companies generally offer two alternative packages:


406 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Each of these classifications suggests its own purpose and context for research. Since the marina industry is a part of almost every national economy, its importance is reflected through the facilities it offers on the market. Analysis of the marina industry points to the considerable variations that occur across destinations and the way in which marinas adapt to them. Given that starting point, the varied role of marinas in Europe can be

 marinas that independently develop their potential within their own area (some marinas in Croatia, as well as anchorages and moorings, and Greek marinas) marinas whose facilities extend beyond the usual limitations, thus developing and

 marinas part of whose attraction is their link with a major urban centre (Split, Dubrovnik, Zadar, Italian marinas on the Adriatic coast, city marinas in Greece), marinas that are part of a larger tourist region (Genoa bay, Côte d'Azur, the beginning

marinas that have a sustainable coexistence with industrial and other economic zones

marinas that are linked to wider sports facilities, partly through which they realize their

Given the above classification and the analysis of marina locations which influence the destination and general development, it can be seen that there are two basic models for the influence of marinas on the destination, i.e. locality and region. That effect is associated with the level of development of a destination, and with the strategic development plan for the marina in the destination. Mutual opportunities and interests of the subjects of development meet here. These two models are both worth researching, and so will both be analysed and

> b. Marina Frapa, the world's best marina in 2006 and 2007

commercial potential (the entire Mediterranean coast, especially Spain).

Source: Internet, http://www.immocostabrava.com/en & http://www.marinafrapa.com/hr

An analysis derived from experience and related to the investment capital aspect of the marina industry shows that few experts are aware that when building a marina on the Mediterranean (Mediterranean type) the initial price of an unfinished berth is about 20,000€,

classified as follows:

explained later.

involving the locality (Marina Frapa),

of the Spanish coast in the Mediterranean),

(Spanish marinas in the Mediterranean)

 a. Empuriabrava–the biggest marina-city in Europe

Fig. 1. Marinas in Europe (Mediterranean)

In addition to these two packages, charter companies sometimes hire skippers through skipper associations that operate independent of the charter companies. It is interesting how the demand for these two types of charter seem to reverse every 5 to 7 years, but retain a ratio of about 3:1. Charter company fleets consist of vessels that can be (1) motor and (2) sailing boats. A yacht charter fleet is formed in various ways, but the most common is through the leasing of private yachts provided by owners for charter companies by virtue of a contract. In such cases of leasing, business tends to be very risky, and small companies are often faced with problems. For example, in Croatia in 1996 the demand for boats fell abruptly due to the state of war in Serbia and Kosovo. Companies with charter fleet acquired through leasing could not meet repayments, so practically overnight the banks became owners of a large charter fleet. This problem has eventually been solved, but not without consequences for the development of the charter industry in Croatia.

Large charter companies operate in attractive tourist destinations, offering a wide range of yachts and services. Demand tends towards larger vessels regardless of whether sail or motor. If we take into account the definition18 *that a yacht is a vessel longer than 12 metres, and mega-yacht longer than 24 metres (80 feet)*, then there is an increased demand for these types of boats. One advantage of the charter business compared to the marina industry is mobility. Large charter companies can deal with seasonality by moving their fleet from an off-season destination to one where the season is starting. Marinas do not have that possibility. Small charter companies cannot use that strategy of diversification, so they must have other ways to overcome the adverse effects of seasonality. Studies show that on average in 50% of cases charter companies use the services of tourist agencies to rent their vessels.19 The charter industry business, especially with a fleet on lease, is quite difficult, and there are several important principles and rules derived from experience. For instance, a charter company must have about 10 yachts to keep a maintenance team of 10 workers. Likewise, for a charter

<sup>18</sup> Definitions generally accepted on the Mediterranean (http://www.poslovni.hr )

<sup>19</sup> Gračan, D. & Zadel, Z. & Rudančić-Lugarić, A.: "'Four Stars Charter Quality' in charter service of Croatia", Naše more, Znanstveni časopis za more i pomorstvo, Vol. 58. 1-2, 2011. str. 64-73

Nautical Tourism and Its Function in the Economic Development of Europe 409

of the world production of mega-yachts. Although there are no precise statistical data, more than 60% of mega-yachts are owned by charter companies. The price of yacht charter depends on the size and level of equipment of the boat. For example, a one-week charter of a 17-18 metre yacht costs around 20,000€, while it can costs 60,000€ for a 30 metre megayacht. The charter of large mega-yachts can reach an amount of 200,000€ per week. Viewed in terms of value, the price of mega-yacht charter is determined by its length and the quality of workmanship and equipment installed. There are two types of luxury yacht manufacturers: (1) those in mass production and (2) those producing on commission. The average price of an 18 metre (60 feet) long motor yacht is 1.2 to 2 million euros, depending on the manufacturer and equipment. Yachts produced in the USA, Scandinavia and Great Britain are particularly known for the quality of workmanship. These yachts of a better quality are more expensive, so that a 21 metre yacht can cost from 2 to 3 million euros, while one of 35 to 37 metres in length can cost from 10 to 22 million euros, depending on the manufacturer. A budget analysis shows that the cost of building a yacht does not generally exceed one third of its final price, which means that this is a very lucrative business. 40 to 60 metre yachts generally cost about one million euros per metre, and there are no restrictions on price for yachts longer than that. In the world of mega-yachts, there is a constant demand for bigger and better equipped yachts. In the list of the largest yachts in the world in 2009, the length range varied from the 162 metre motor yacht *Dubai* to the 65 metre *Wedge Too*, the smallest in this category. Of these hundred yachts in the world, twenty are located in the USA, the largest being 138 metres, and the smallest 48.8. Yachts are dispersed across all continents except Africa. On the Adriatic, the largest mega-yachts generally available for charter are the metres (Benetti Classic 34M) or 29 metres long (Sunseeker Predator). The 54

*Skippers and their services* are an important segment in the charter industry options. From the moment the skipper takes the helm he is responsible for the yacht and the people on it. Certified skipper must have experience in all aspects of operating a yacht, must be trained and skilled in navigation and familiar with maritime regulations. The yacht charterers are generally responsible for the itinerary, destination ports, food and other things, although some charter companies offer that as an additional service. An RYA Day Skipper23 or similar certificate with and a VHF radio licence are generally considered a minimum requirement. Certificates that prove a skipper's competence vary from country to country, making it more

The price of a skipper service depends on his qualifications and on the size and value of the yacht he operates. The initial price of skipper with Yacht Master category A licence (for yachts up to 100 GT) is 130€ per day, so the price for a week is about 1,000€. A skipper with Yacht Master Category B licence (yachts up to 500 GT) can negotiate his price per day with the owner or mega yacht charter. Skippers in England command the highest initial price of

23 The RYA was founded in November 1875 as a Yacht Racing Association (YRA). Its primary goal was to standardise the rules determining the measurements of racing boats, so that sailing boats of different classes could compete. The price of membership was then two guineas, and was available for former

24 http://www.vjesnik.hr/Article.aspx?ID=4BC04C74-3D6E-45A6-801B-3CD76F21C4C7

metres long Seagull II stands out as an exception.

difficult to introduce consistency and order in this industry.

and current owners of racing yachts of 10 or more tons.

200 € per day.24


company to break even, yachts must be rented for at least 10 weeks in a season. Anything below that number means operating at a loss.

Source: Malcolm Wood, David Robinson: Market report Italy, 2006

Table 2. Number of mega-yachts over 30 metres in 2005 by country of manufacture

In 2010 there were 6,00020 registered mega-yachts in the world, of which 4,419 were over 30 metres21in length. The direct effects of the charter industry in the global market generate an annual turnover of around one billion dollars.22 Mega-yachts have become a status symbol and their number is constantly increasing. The leading countries involved in mega-yacht building are the USA, Italy and the Netherlands, together accounting for approximately 58%

<sup>20</sup> http://www.nmsc.gov.au/media/pages\_media\_files/files/MS05-Lance%20Cushion%20- %20Superyacht%20Base%20Australia.pdf

<sup>21</sup> http://www.superyachtintelligence.com/vesselsummary.asp

<sup>22</sup> http://www.ezadar.hr/clanak/najam-mega-jahte-i-60000-eura-tjedno

company to break even, yachts must be rented for at least 10 weeks in a season. Anything

**Country of Build No. of Yachts Country of Build No. of Yachts**  Argentina 7 New Zealand 37 Australia 56 Norway 19 Austria 1 Oman 2 Bahamas 1 Philippines 2 Belgium 5 Poland 11 Brazil 11 Portugal 2 Burma 1 Singapore 3 Canada 78 South Africa 10 China 3 Spain 27 Croatia 1 Sweden 26 Denmark 31 Taiwan 10 Egypt 3 Thailand 5 Fiji 2 Turkey 77 Finland 13 UAE ' 1 France 53 UK 171 Germany 145 Ukraine 1 Greece 34 USA 509 Hong Kong 9 USSR 3 Indonesia 5 Yugoslavia 8 Italy 443 Zimbabwe 1 Japan 26 Unknown 29

Netherlands 359 TOTAL 2,243

In 2010 there were 6,00020 registered mega-yachts in the world, of which 4,419 were over 30 metres21in length. The direct effects of the charter industry in the global market generate an annual turnover of around one billion dollars.22 Mega-yachts have become a status symbol and their number is constantly increasing. The leading countries involved in mega-yacht building are the USA, Italy and the Netherlands, together accounting for approximately 58%

Table 2. Number of mega-yachts over 30 metres in 2005 by country of manufacture

20 http://www.nmsc.gov.au/media/pages\_media\_files/files/MS05-Lance%20Cushion%20-

below that number means operating at a loss.

Malaysia 1 Mexico 1

%20Superyacht%20Base%20Australia.pdf

Source: Malcolm Wood, David Robinson: Market report Italy, 2006

21 http://www.superyachtintelligence.com/vesselsummary.asp 22 http://www.ezadar.hr/clanak/najam-mega-jahte-i-60000-eura-tjedno of the world production of mega-yachts. Although there are no precise statistical data, more than 60% of mega-yachts are owned by charter companies. The price of yacht charter depends on the size and level of equipment of the boat. For example, a one-week charter of a 17-18 metre yacht costs around 20,000€, while it can costs 60,000€ for a 30 metre megayacht. The charter of large mega-yachts can reach an amount of 200,000€ per week. Viewed in terms of value, the price of mega-yacht charter is determined by its length and the quality of workmanship and equipment installed. There are two types of luxury yacht manufacturers: (1) those in mass production and (2) those producing on commission. The average price of an 18 metre (60 feet) long motor yacht is 1.2 to 2 million euros, depending on the manufacturer and equipment. Yachts produced in the USA, Scandinavia and Great Britain are particularly known for the quality of workmanship. These yachts of a better quality are more expensive, so that a 21 metre yacht can cost from 2 to 3 million euros, while one of 35 to 37 metres in length can cost from 10 to 22 million euros, depending on the manufacturer. A budget analysis shows that the cost of building a yacht does not generally exceed one third of its final price, which means that this is a very lucrative business. 40 to 60 metre yachts generally cost about one million euros per metre, and there are no restrictions on price for yachts longer than that. In the world of mega-yachts, there is a constant demand for bigger and better equipped yachts. In the list of the largest yachts in the world in 2009, the length range varied from the 162 metre motor yacht *Dubai* to the 65 metre *Wedge Too*, the smallest in this category. Of these hundred yachts in the world, twenty are located in the USA, the largest being 138 metres, and the smallest 48.8. Yachts are dispersed across all continents except Africa. On the Adriatic, the largest mega-yachts generally available for charter are the metres (Benetti Classic 34M) or 29 metres long (Sunseeker Predator). The 54 metres long Seagull II stands out as an exception.

*Skippers and their services* are an important segment in the charter industry options. From the moment the skipper takes the helm he is responsible for the yacht and the people on it. Certified skipper must have experience in all aspects of operating a yacht, must be trained and skilled in navigation and familiar with maritime regulations. The yacht charterers are generally responsible for the itinerary, destination ports, food and other things, although some charter companies offer that as an additional service. An RYA Day Skipper23 or similar certificate with and a VHF radio licence are generally considered a minimum requirement. Certificates that prove a skipper's competence vary from country to country, making it more difficult to introduce consistency and order in this industry.

The price of a skipper service depends on his qualifications and on the size and value of the yacht he operates. The initial price of skipper with Yacht Master category A licence (for yachts up to 100 GT) is 130€ per day, so the price for a week is about 1,000€. A skipper with Yacht Master Category B licence (yachts up to 500 GT) can negotiate his price per day with the owner or mega yacht charter. Skippers in England command the highest initial price of 200 € per day.24

<sup>23</sup> The RYA was founded in November 1875 as a Yacht Racing Association (YRA). Its primary goal was to standardise the rules determining the measurements of racing boats, so that sailing boats of different classes could compete. The price of membership was then two guineas, and was available for former and current owners of racing yachts of 10 or more tons.

<sup>24</sup> http://www.vjesnik.hr/Article.aspx?ID=4BC04C74-3D6E-45A6-801B-3CD76F21C4C7

Nautical Tourism and Its Function in the Economic Development of Europe 411

In relation to the quality of service, cruisers can be divided into four categories according to


Increasingly large and more luxurious cruisers compete in terms of capacity and the diversity of their facilities. Concurrent with the development of large cruisers, there is also an increase in the building of smaller luxury ships with a capacity of around 200 passengers. The price of a package directly depends on the number of passengers, i.e. a larger boat means a lower price. Quality of service plays an important role in pricing, so that, for example, the "Green Star", awarded every year in Miami in recognition of quality is highly

Italian shipyards stand out when it comes to building small luxury cruisers.26 The production of both large and small cruisers for cruise companies and corporations occurs in a highly competitive market. At the same time, the development of cruising in small traditional craft of local types, usually run as part of a small or family business, is becoming more common and is still an unexplored sub-type of the cruise industry. Everywhere in the world, including Europe, there is an expansion of navigation in local and regional waters, and with it what might be called the *small cruising* business. On the seas, rivers, lakes and canals of Europe we find boats that are a product of a hundred or thousand year old culture and environment of a region. The differences are evident, and it is that diversity that is part of the attraction of cruising in the fresh waters and seas of Europe and worldwide. Traditional Mediterranean boats, from Greece, Italy and Croatia to Spain, France, England and the Netherlands and the countries of Northern Europe, differ widely. In the dictionary of maritime cruising such vessels are often referred to as *old-timers*. Their existence and development are important not only for the growth of small enterprises, but also for the preservation of old and forgotten craft and of traditional local shipbuilding and for the preservation of culture and identity. When the variation in construction and design of the old ships replicas that can be seen in all Mediterranean regions are compared with the similar group of old-timers on the Baltic Sea and European coast of Atlantic, then significant differences are evident.27 They all, however, have the same purpose which is to supply the

26 The main world producer of small cruisers are the Italian Fincantieri, then the Finnish and Aker Finnyards and Kvaerner Masa, the German Meyer Werft and the French Chantiers de l'Atlantique. They

are mega-yacht manufacturers and between them built 19 of the 21 mega-yachts built this year. 27 Luković, T.: "Cruising by old timers, a chance for local and regional development in Europe", the first



the quality of lifestyle of the passengers:

with the high-quality service.

valued by the cruise companies.

CRS conference, Bremerhaven, 2009.

passenger welfare.


The successful function of a skipper depends very much on his psychological and personal profile. Not only should he have a thorough knowledge of yacht management, but must also be familiar with the waters he passes through and be able to select appropriate anchorage for the tourists on board, depending on their wishes. The mental qualities of a skipper are key to the success of the charter.

#### **4.2 The cruise industry**

The cruise industry, in a narrow sense, uses two main instruments (1) cruisers, ships specialised for cruising and trips, and (2) ports that provide berths and are connected to attractive destinations.

Cruise ships, specialised for the transport of passengers/tourists, differ according to the type of service to which they are adapted by their size and construction.


Source: The author, Luković T.

Table 3. Basic classification of cruising industry

The cruising tourism industry should be considered in its totality. Manufacturers, without whom the development of the main industry of cruising tourism would be impossible, form secondary or additional activities. Supporting activities make sure that development is successful and with their services they provide assistance.

Cruise ships specialised in passenger/tourist transport differ by the type of service to which they are adapted by their size and construction. In the field of shipbuilding, some shipyards are increasingly oriented and specialized in large and well-equipped cruiser production.

In international waters there are currently about 300 large cruisers which can be classified according to various aspects, but this study will focus on the classification by passenger capacity and quality of service25:

 25 Berlitz "Complete Guide to Cruising & Cruise Ships 2006", Douglas Ward, London, 2006, page 154.


The successful function of a skipper depends very much on his psychological and personal profile. Not only should he have a thorough knowledge of yacht management, but must also be familiar with the waters he passes through and be able to select appropriate anchorage for the tourists on board, depending on their wishes. The mental qualities of a

The cruise industry, in a narrow sense, uses two main instruments (1) cruisers, ships specialised for cruising and trips, and (2) ports that provide berths and are connected to

Cruise ships, specialised for the transport of passengers/tourists, differ according to the

TOURIST CRUISING INDUSTRY

SUBJECT OF RESEARCH

The cruising tourism industry should be considered in its totality. Manufacturers, without whom the development of the main industry of cruising tourism would be impossible, form secondary or additional activities. Supporting activities make sure that development is

Cruise ships specialised in passenger/tourist transport differ by the type of service to which they are adapted by their size and construction. In the field of shipbuilding, some shipyards are increasingly oriented and specialized in large and well-equipped cruiser production.

In international waters there are currently about 300 large cruisers which can be classified according to various aspects, but this study will focus on the classification by passenger

25 Berlitz "Complete Guide to Cruising & Cruise Ships 2006", Douglas Ward, London, 2006, page 154.

MAIN activities Supporting

Specialised tourist agencies Scientific and educational institutions specialised in training Research institutions supporting development Others

Cruisers Ports activities

Specialised ports for large cruise ships, members of MedCruise

Non-specialised ports for large cruise ships

Small ports suitable for small cruisers and local old- timers

type of service to which they are adapted by their size and construction.

Cruisers owned by large companies:  *Large cruisers Small cruisers*

Cruisers owned by small enterprises: *Old- timers for one or several day cruises Small cruisers for one or several day cruises*

skipper are key to the success of the charter.

**4.2 The cruise industry** 

attractive destinations.

Secondary activities

Shipyards for large

Shipyards for small

Shipyards for oldtimer replicas Manufacturers of equipment and special products for cruises and services Others

Source: The author, Luković T.

capacity and quality of service25:

Table 3. Basic classification of cruising industry

successful and with their services they provide assistance.

cruisers

cruisers


In relation to the quality of service, cruisers can be divided into four categories according to the quality of lifestyle of the passengers:



Increasingly large and more luxurious cruisers compete in terms of capacity and the diversity of their facilities. Concurrent with the development of large cruisers, there is also an increase in the building of smaller luxury ships with a capacity of around 200 passengers. The price of a package directly depends on the number of passengers, i.e. a larger boat means a lower price. Quality of service plays an important role in pricing, so that, for example, the "Green Star", awarded every year in Miami in recognition of quality is highly valued by the cruise companies.

Italian shipyards stand out when it comes to building small luxury cruisers.26 The production of both large and small cruisers for cruise companies and corporations occurs in a highly competitive market. At the same time, the development of cruising in small traditional craft of local types, usually run as part of a small or family business, is becoming more common and is still an unexplored sub-type of the cruise industry. Everywhere in the world, including Europe, there is an expansion of navigation in local and regional waters, and with it what might be called the *small cruising* business. On the seas, rivers, lakes and canals of Europe we find boats that are a product of a hundred or thousand year old culture and environment of a region. The differences are evident, and it is that diversity that is part of the attraction of cruising in the fresh waters and seas of Europe and worldwide. Traditional Mediterranean boats, from Greece, Italy and Croatia to Spain, France, England and the Netherlands and the countries of Northern Europe, differ widely. In the dictionary of maritime cruising such vessels are often referred to as *old-timers*. Their existence and development are important not only for the growth of small enterprises, but also for the preservation of old and forgotten craft and of traditional local shipbuilding and for the preservation of culture and identity. When the variation in construction and design of the old ships replicas that can be seen in all Mediterranean regions are compared with the similar group of old-timers on the Baltic Sea and European coast of Atlantic, then significant differences are evident.27 They all, however, have the same purpose which is to supply the

<sup>26</sup> The main world producer of small cruisers are the Italian Fincantieri, then the Finnish and Aker

Finnyards and Kvaerner Masa, the German Meyer Werft and the French Chantiers de l'Atlantique. They are mega-yacht manufacturers and between them built 19 of the 21 mega-yachts built this year.

<sup>27</sup> Luković, T.: "Cruising by old timers, a chance for local and regional development in Europe", the first CRS conference, Bremerhaven, 2009.

market for a cruise with a distinctive attraction. One or several days cruising on an old-timer is a different experience from a cruise on a large or small luxury cruisers.

a. Croatian old timer (Kornati) b. Dutch old timer (Voledam)

Source: Taken by the author Luković, summer 2009

Nautical Tourism and Its Function in the Economic Development of Europe 413

However, a key aspect of this subject remained relatively neglected; that is the destination ports for cruise ships. The tourist cruising business could not exist without such suitable ports. The ports, after the ships themselves, are the second most important factor in cruising. Ports

*Ports specialised for cruise ships* stand out for their efficient organization, and have the role of connecting the passengers/tourists with attractive local destinations. Some non-specialised ports for cruise ships do not recognise this form of tourism as an opportunity for growth, while some other ports are very specifically prepare for and focused on cruising. Specialised ports support the development of destination management for which cruising is an important tourist activity. These ports are a result of an orientation towards tourism of a






World (2008) Mediterranean (2009) Ports passengers calls Ports passengers 1 Consumet 2,569,000 1.008 1 Naples 1,154,742

(USV) 1,847,000 730 2 Civitavecchia 1,082,487

Cayman 1,553,000 570 3 Barcelona 971,226 4 Nassau 1.472,000 687 4 Dubrovnik 901,389 5 St. Maarten 1,346,000 619 5 Balearic Islands 789,509 6 Naples 1,237,000 660 6 Livorno 754,965 7 Juneau 1,024,000 620 7 Tunisian Ports 752,246

9 Livorno 849,000 565 9 Marseille 456,000 10 Dubrovnik 844,000 698 10 Madeira Ports 425,433

Table 4. Top-10 largest world's and Mediterranean ports specialised for big cruise ships

ports 707,929

8 Ketchikan 942,000 502 8 French Riviera

1. ports specialised for the accommodation of large cruisers, and

destination and its management. Such ports have several characteristics:

11. (2) ports that are not specialised for large cruisers.

attractions aimed at cruise passengers,

for this kind of tourism,

from cruisers to attractive local destinations,

Source: The new MedCruise Statistical Reports, 2010 Edition

can be classified as:

business,

vicinity

<sup>2</sup>St. Thomas

<sup>3</sup>Grand

(2008 and 2009)

Fig. 2. Traditional regional cruisers (old-timers) in Europe

In addition to the old boats and their replicas (old-timers), many small and medium family enterprises augment their cruising fleet with small cruisers of a more modern type, and thus become a noteworthy competition to the larger cruising companies. Recognizing the potential for development of the small cruiser market, many larger companies are developing a fleet of new, luxury small cruisers. Some studies28 indicate that in the small cruiser business the fleet and ship capacities are very important, but insufficiently explored, while globally such fleets exceeds the number of 10,000 traditional old cruisers. In general, competition in the cruise ship market becomes more and more dynamic, and new forms of offer become more evident.

Besides large and small cruisers on the European seas, cruising with specialized freshwater cruisers of all sizes is also very important. The largest cruisers on the navigable rivers of Europe exceed 1,500 passengers. Freshwater, like sea cruising, has a supranational character, meaning that some international investors have cruisers sailing on European rivers. Unlike sea cruising, large freshwater cruising is organized and led by such large tourist agencies as TUI. The European Union, as a single market without borders, functions well in the case of river cruising, as European borders are frequently crossed. Such routes pass through Germany (Regensburg - Straubing – Windor – Passau), Austria (Linz – Wachau – Vienna), Hungary, Romania and the port of Salina where the Danube flows into the Black Sea. River and lake cruises are organized as either a one day tour, or as several days cruising, with an average price of 138€ per day29 per person, full board. River cruising in Europe is a highly developed form of tourism, with the tourist companies and crew providing plenty of entertainment and excursions to distinctive destinations during the cruise. In terms of cruising, the busiest navigable rivers are the Danube, Elbe, Weser, Rhine and Main and another.

<sup>28</sup> Luković, T. *ibid*

<sup>29</sup> http://river-cruise-fleet.com & http://www.danube-river.org

However, a key aspect of this subject remained relatively neglected; that is the destination ports for cruise ships. The tourist cruising business could not exist without such suitable ports.

The ports, after the ships themselves, are the second most important factor in cruising. Ports can be classified as:


412 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

market for a cruise with a distinctive attraction. One or several days cruising on an old-timer

a. Croatian old timer (Kornati) b. Dutch old timer (Voledam)

In addition to the old boats and their replicas (old-timers), many small and medium family enterprises augment their cruising fleet with small cruisers of a more modern type, and thus become a noteworthy competition to the larger cruising companies. Recognizing the potential for development of the small cruiser market, many larger companies are developing a fleet of new, luxury small cruisers. Some studies28 indicate that in the small cruiser business the fleet and ship capacities are very important, but insufficiently explored, while globally such fleets exceeds the number of 10,000 traditional old cruisers. In general, competition in the cruise ship market becomes more and more dynamic, and new forms of

Besides large and small cruisers on the European seas, cruising with specialized freshwater cruisers of all sizes is also very important. The largest cruisers on the navigable rivers of Europe exceed 1,500 passengers. Freshwater, like sea cruising, has a supranational character, meaning that some international investors have cruisers sailing on European rivers. Unlike sea cruising, large freshwater cruising is organized and led by such large tourist agencies as TUI. The European Union, as a single market without borders, functions well in the case of river cruising, as European borders are frequently crossed. Such routes pass through Germany (Regensburg - Straubing – Windor – Passau), Austria (Linz – Wachau – Vienna), Hungary, Romania and the port of Salina where the Danube flows into the Black Sea. River and lake cruises are organized as either a one day tour, or as several days cruising, with an average price of 138€ per day29 per person, full board. River cruising in Europe is a highly developed form of tourism, with the tourist companies and crew providing plenty of entertainment and excursions to distinctive destinations during the cruise. In terms of cruising, the busiest navigable rivers are the

is a different experience from a cruise on a large or small luxury cruisers.

Source: Taken by the author Luković, summer 2009

offer become more evident.

28 Luković, T. *ibid*

Fig. 2. Traditional regional cruisers (old-timers) in Europe

Danube, Elbe, Weser, Rhine and Main and another.

29 http://river-cruise-fleet.com & http://www.danube-river.org

*Ports specialised for cruise ships* stand out for their efficient organization, and have the role of connecting the passengers/tourists with attractive local destinations. Some non-specialised ports for cruise ships do not recognise this form of tourism as an opportunity for growth, while some other ports are very specifically prepare for and focused on cruising. Specialised ports support the development of destination management for which cruising is an important tourist activity. These ports are a result of an orientation towards tourism of a destination and its management. Such ports have several characteristics:



Source: The new MedCruise Statistical Reports, 2010 Edition

Table 4. Top-10 largest world's and Mediterranean ports specialised for big cruise ships (2008 and 2009)

Nautical Tourism and Its Function in the Economic Development of Europe 415

collaboration between port, destination and cruiser31 have begun to emerge. This leads to a gradual introduction of some basic elements of successful business cooperation where the satisfaction of the passenger/tourist once more becomes the main priority. Port and destination on the one hand, and the cruise ship on the other, are the places where passengers spend money, and it is in their mutual interest to encourage satisfaction in

The development of cruising in Europe is supported by four international organizations: (1)

1. The *European Cruise Council* (ECC), based in Brussels (Belgium), is an association of leading European cruise companies with 30 permanent and 34 associate members. The ECC is the counterpart of the similar American Cruise Line Industry Association (CLIA) which is partly responsible for the high degree of development of the cruise industry in the Central American market32. The ECC promotes the interests of all cruise operators and collaborates with EU institutions such as the European Commission, the European Parliament, the Council of the EU and their permanent representatives. The ECC also cooperates with the European Maritime Safety Agency (EMSA). The ECC protects the interests of its members through its close connections with other European bodies such as: the European Community Shipowners' Associations (ECSA), the European Sea Ports Organisation (ESPO), and the European Travel Agents and Tour Operators Association (ECTAA). The ECC also promotes the development of the European cruising industry through cooperation with a number of regional bodies,

European Cruise Council, (2) Cruise Europe, (3) MedCruise, and (4) Euroyards.

such as Cruise Baltic, Cruise Europe, Cruise Norway and MedCruise.

between cruising industry bodies and to promote its development.

Community of European Shipyards Associations (CESA).

Second international conference, Cruise Research Society, ICC2, Plymouth, 2010

2. Cruise *Europe*, based in Stryn (Norway), is an association of cruise ship ports in Northern and Western Europe. It is focused on future development and supports and sets standards for the quality of ports by networking between them and conducting

3. *MedCruise*, based in Barcelona (Spain), was founded in Rome in 1996, and it acts as an association of Mediterranean ports specialised for cruise ships. It numbers 55 members with 78 Mediterranean ports, including those in the Black and Red Seas, as well as the ports of the so-called Middle Atlantic. The association has 20 associate members, tourist boards, port agents, and other cruise industry bodies. In such a way the field of interest and work of MedCruise extends to the entire cruising industry. MedCruise is working to increase the efficiency of the cruising industry, and to build sustainable relations

4. *Euroyards*, based in Brussels (Belgium), is an association which gathers leading builders of cruise ships, off-shore and specialized vessels, yachts, ferries, chemical tankers, and specialized cargo ships. Its members employ about 50,000 workers and annually generate a 13 billion euro turnover. All Euroyards shipyards are members of the

The cruising industry, in terms of ports specialized for small cruisers and large cruise ships owned by big companies, is very well organized and has been described as "The Cruise

31 Luković, T. & Božić Fredotović, K.: "Seasonality – factor of crisis or development in cruise tourism.",

32 Ross K. Dowling: "Cruise ship tourism", Cowan University, Australia, CABI, 2006, page 4.

tourists who are then more likely to return.

research for its members.

*Non-specialised ports* for large and small cruisers offer mooring facilities, but all other services are only sporadically organized and depend on what is available at the destination. Reasons for that are numerous and range from the existence of some other locally important activity for the destination to the lack of attraction of the destination. Hence, we notice that the port is a reflection of a destination and it directly relies on it.

The main objective of the cruise business is the same as for all other businesses, profit. As market competition is becoming stronger, various strategic alliances are formed in order to enhance business results. An example of a large, very successful and well organized strategic alliance of cruise companies is "Carnival UK" (http://www.carnivalukgroup.com) which manages 98 large cruise ships.

 a. Cruise passengers try to enter the Old Town of Dubrovnik

b. MSC cruiser in the port of Venice

Source: Internet

Fig. 3. Problems in the cruising season

While cruise companies and strategic alliances fight for better business results, passengers, with their personal motives for travelling, are gradually losing their significance as individuals in the cruising industry, which is becoming a form of mass tourism. Companies, often aggressively, try to restrict the passengers' consumption to what is available on board. Thus the destination, as a primary motive for travelling, is slowly losing its importance. As cruise companies do business in direct competition with each other, it is not only the passengers that become less important, but the destinations also become subordinated to the company profits. At the same time, realizing the developmental and financial possibilities introduced by cruising, ports connected to high-quality destinations develop rapidly and expand facilities that can be offered at both port and destination. Their development is mostly based on financial potential and interests, and is rarely connected to the investments of the big cruise companies. Nevertheless, the development of specialised cruise ship ports, together with the recession, has provoked a new way of thinking and initiated new forms of cooperation and strategic alliances. In particular, as a result of passenger dissatisfaction with the reduced opportunities to experience the destination30, newly organizational forms of

 30 Luković, T. & Božić Fredotović, K.: "Cruiser bids and offers cruise destinations in the competitive or partnership?", Third international conference, Cruise Research Society, ICC3, Dubrovnik, 2011

*Non-specialised ports* for large and small cruisers offer mooring facilities, but all other services are only sporadically organized and depend on what is available at the destination. Reasons for that are numerous and range from the existence of some other locally important activity for the destination to the lack of attraction of the destination. Hence, we notice that the port

The main objective of the cruise business is the same as for all other businesses, profit. As market competition is becoming stronger, various strategic alliances are formed in order to enhance business results. An example of a large, very successful and well organized strategic alliance of cruise companies is "Carnival UK" (http://www.carnivalukgroup.com)

While cruise companies and strategic alliances fight for better business results, passengers, with their personal motives for travelling, are gradually losing their significance as individuals in the cruising industry, which is becoming a form of mass tourism. Companies, often aggressively, try to restrict the passengers' consumption to what is available on board. Thus the destination, as a primary motive for travelling, is slowly losing its importance. As cruise companies do business in direct competition with each other, it is not only the passengers that become less important, but the destinations also become subordinated to the company profits. At the same time, realizing the developmental and financial possibilities introduced by cruising, ports connected to high-quality destinations develop rapidly and expand facilities that can be offered at both port and destination. Their development is mostly based on financial potential and interests, and is rarely connected to the investments of the big cruise companies. Nevertheless, the development of specialised cruise ship ports, together with the recession, has provoked a new way of thinking and initiated new forms of cooperation and strategic alliances. In particular, as a result of passenger dissatisfaction with the reduced opportunities to experience the destination30, newly organizational forms of

30 Luković, T. & Božić Fredotović, K.: "Cruiser bids and offers cruise destinations in the competitive or partnership?", Third international conference, Cruise Research Society, ICC3, Dubrovnik, 2011

b. MSC cruiser in the port of Venice

is a reflection of a destination and it directly relies on it.

which manages 98 large cruise ships.

 a. Cruise passengers try to enter the Old Town of Dubrovnik

Fig. 3. Problems in the cruising season

Source: Internet

collaboration between port, destination and cruiser31 have begun to emerge. This leads to a gradual introduction of some basic elements of successful business cooperation where the satisfaction of the passenger/tourist once more becomes the main priority. Port and destination on the one hand, and the cruise ship on the other, are the places where passengers spend money, and it is in their mutual interest to encourage satisfaction in tourists who are then more likely to return.

The development of cruising in Europe is supported by four international organizations: (1) European Cruise Council, (2) Cruise Europe, (3) MedCruise, and (4) Euroyards.


The cruising industry, in terms of ports specialized for small cruisers and large cruise ships owned by big companies, is very well organized and has been described as "The Cruise

 31 Luković, T. & Božić Fredotović, K.: "Seasonality – factor of crisis or development in cruise tourism.", Second international conference, Cruise Research Society, ICC2, Plymouth, 2010

<sup>32</sup> Ross K. Dowling: "Cruise ship tourism", Cowan University, Australia, CABI, 2006, page 4.

Nautical Tourism and Its Function in the Economic Development of Europe 417

Fig. 4. Separate and common competencies of the main entities in a model of sustainable

A regional concept of the contribution of nautical tourism to the economic development on the mega European level should be viewed in the context of market distribution, and thereby receptive and emitting markets should be distinguished. One of the chief characteristics of such approach is a national framework of GDP, i.e. the specific GDP from tourism. In the *receptive tourist market* economies, GDP exceeds 4% in the economic structure and even reaches an amount in excess of 10%, while in the *emitting tourist economies* it does not exceed 4%. That indicator is variable and has a national character as for big markets, such as the emitting German market, the absolute size of the GDP from tourism far exceeds the same in smaller economies of the receptive tourist market. Nevertheless, this indicator

Since the receptive markets are very active, and they meet all four characteristics of active markets36, they are a potential opportunity for the realization of market demand, and therefore should be studied. In this context, nautical tourism plays an important role in all

35 Luković, T. & Gržetić Z.: "Nautičko turističko tržište u teoriji i praksi Hrvatske i europskog dijela

36 Four conditions of an active market: demand, ability to pay, willingness to consume and free time for

economies that are receptively oriented. That role is manifested in three ways:

development, exemplified by a marina as a leader in local development

Source: T. Luković<sup>35</sup>

consumption.

should be taken into consideration.

Mediterana", HHI Split, Split 2007, page 123.

this way is many times greater than those employed directly in the nautical tourist industry. That kind of development is particularly crucial to the economy of the islands in all the seas of Europe, and particularly for the preservation of the island way of life.

industry, leader in Europe's economic recovery".33 By contrast, the industry of small private cruisers and ports is relatively lacking in organisation and still underdeveloped. It is an area that offers considerable scope for further research and development.

#### **5. The regional concept of sustainable development and the role of nautical tourism**

After the abolition of borders between European countries and the creation of a single market in the EU, the opportunity was created for new models of economic growth of industries and for their unification on a larger scale. That pointed to a new European concept of growth with a prevailing regional market approach. Such a concept, particularly related to general tourism, and thus specifically to nautical tourism, promoted the idea of a destination whose development should be planned and managed. As a result, a new importance was given to destination management, which, in the developed European economies, is an aspect of a decentralized self-governing system of growth. In so doing, the state transfers its authority to lower levels of management, which tends to encourage market-oriented development. That concept is based on the fact that local and regional authorities are more aware than centralised government can be of the particular requirements for development of their market. That concept of strengthening regional and local self-governing requires a developed, functional, and stimulating model of sustainable development. The main bodies, and their responsibility in connecting the varied interests of all parties of the destination, are far more transparently apparent in that model. In this manner, in particular in nautical tourism, visiting sailors and tourists are in the spotlight, which is crucial for a market-oriented development.

The model of sustainable development (Figure 5) shows a case where a marina is a leader of local development, as is quite common in the Mediterranean region34. In the sustainable development model, whose role is to support and integrate ecological and ethical (social and economic) aspects, good communication is a key to success, and it takes place in the context of the rule of law and the personal competencies of the entities.

As previously explained, indirect effects of nautical tourism on regional economic development are considerable, and economic analysis confirms that they are generally much greater than the direct effects. Seen from a macro aspect, nautical tourism contributes to the overall economic development in two ways:


<sup>33</sup> http://www.cruise-norway.no/viewfile.aspx?id=3186

<sup>34</sup> Model explained in Section 4.1.

this way is many times greater than those employed directly in the nautical tourist industry. That kind of development is particularly crucial to the economy of the islands in all the seas of Europe, and particularly for the preservation of the island way of life.

Source: T. Luković<sup>35</sup>

416 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

industry, leader in Europe's economic recovery".33 By contrast, the industry of small private cruisers and ports is relatively lacking in organisation and still underdeveloped. It is an area

**5. The regional concept of sustainable development and the role of nautical** 

After the abolition of borders between European countries and the creation of a single market in the EU, the opportunity was created for new models of economic growth of industries and for their unification on a larger scale. That pointed to a new European concept of growth with a prevailing regional market approach. Such a concept, particularly related to general tourism, and thus specifically to nautical tourism, promoted the idea of a destination whose development should be planned and managed. As a result, a new importance was given to destination management, which, in the developed European economies, is an aspect of a decentralized self-governing system of growth. In so doing, the state transfers its authority to lower levels of management, which tends to encourage market-oriented development. That concept is based on the fact that local and regional authorities are more aware than centralised government can be of the particular requirements for development of their market. That concept of strengthening regional and local self-governing requires a developed, functional, and stimulating model of sustainable development. The main bodies, and their responsibility in connecting the varied interests of all parties of the destination, are far more transparently apparent in that model. In this manner, in particular in nautical tourism, visiting sailors and tourists are in the spotlight,

The model of sustainable development (Figure 5) shows a case where a marina is a leader of local development, as is quite common in the Mediterranean region34. In the sustainable development model, whose role is to support and integrate ecological and ethical (social and economic) aspects, good communication is a key to success, and it takes place in the

As previously explained, indirect effects of nautical tourism on regional economic development are considerable, and economic analysis confirms that they are generally much greater than the direct effects. Seen from a macro aspect, nautical tourism contributes to the

1. the development of nautical tourism being greater than the general rate of economic growth, a relatively significant impact on that general rate is achieved. In that case,

2. the development of nautical tourism affects not only the rapid development of existing activities in a country or region, but also the growth of new activities that are horizontally (excursions, underwater photo safari, customer service etc.) or vertically (small enterprises, shipbuilding etc.) associated with it. In this way, a significant number local inhabitants are employed in various sectors, and their direct or indirect goal is to serve the visiting tourists. Frequently the number of local people employed in

nautical tourism encourages economic development, i.e. its faster growth.

that offers considerable scope for further research and development.

which is crucial for a market-oriented development.

overall economic development in two ways:

33 http://www.cruise-norway.no/viewfile.aspx?id=3186

34 Model explained in Section 4.1.

context of the rule of law and the personal competencies of the entities.

**tourism** 

Fig. 4. Separate and common competencies of the main entities in a model of sustainable development, exemplified by a marina as a leader in local development

A regional concept of the contribution of nautical tourism to the economic development on the mega European level should be viewed in the context of market distribution, and thereby receptive and emitting markets should be distinguished. One of the chief characteristics of such approach is a national framework of GDP, i.e. the specific GDP from tourism. In the *receptive tourist market* economies, GDP exceeds 4% in the economic structure and even reaches an amount in excess of 10%, while in the *emitting tourist economies* it does not exceed 4%. That indicator is variable and has a national character as for big markets, such as the emitting German market, the absolute size of the GDP from tourism far exceeds the same in smaller economies of the receptive tourist market. Nevertheless, this indicator should be taken into consideration.

Since the receptive markets are very active, and they meet all four characteristics of active markets36, they are a potential opportunity for the realization of market demand, and therefore should be studied. In this context, nautical tourism plays an important role in all economies that are receptively oriented. That role is manifested in three ways:

 35 Luković, T. & Gržetić Z.: "Nautičko turističko tržište u teoriji i praksi Hrvatske i europskog dijela Mediterana", HHI Split, Split 2007, page 123.

<sup>36</sup> Four conditions of an active market: demand, ability to pay, willingness to consume and free time for consumption.

Nautical Tourism and Its Function in the Economic Development of Europe 419

It is appropriate to use the classification of the five major markets in Europe for the study of

Once again, it must be stated that data on nautical tourism are scarce, so all available

In the marina industry, Europe has something to boast about. Spain has Empuriabrava on the Costa di Sol, the largest marina-city (over 5000 berths) in Europe. France has the 5-star Port Camargue with 5,010 berths, the highest quality marine, specifically recognised by the ADAC. Italy has the highest number of marinas in the Mediterranean. Greece has the greatest potential for development in nautical tourism considering the length of its indented coast and islands. Dutch marinas and waterways are located below sea level. Marinas in England are among the best of European marina systems. Germany has a number of marinas inland and the on the coast of north Europe. Norway has the highest number of marinas in Europe, and also the most ice-covered marinas. Croatia has the marina Frapa in Rogoznica, the world's best marina in 2006 and 2007. The fact is that there are a lot of reasons for European nautical tourism to be thoroughly studied, so that the quality and achievement of its market diversity

Nautical tourism in the Mediterranean is highly dynamic and developed. *The marina industry* has been developed through a number of marinas, tourist organizations, and all other participants in the industry. The mild Mediterranean climate gives, especially for tourists from the cold North of Europe, the opportunity to go on vacation almost all year round, though the summer season remains particularly popular, so that Mediterranean

Given the scarcity of data on the number of categorized high-quality marinas in the Mediterranean and Europe, we will use the ADAC and other sources. The average size of a

In the Mediterranean there are over 1,000 marinas of all kinds, such as sports marinas,

*The charter industry* can only be estimated from the fact that in the Mediterranean, charter companies have thousands of boats and yachts and approximately 500 mega yachts. Skippers, as active participants in the charter business, have their associations and guilds in some Mediterranean countries, and their activity is therefore gradually acquiring a legal framework. The Mediterranean *cruise industry* stands out in terms of ports for tourists from cruise ships, i.e. in relation to high-quality destinations that attract tourists from around the world. Cruisers under all flags sail into the Mediterranean ports, but the Italian Costa company stands out as a local Mediterranean cruise company. Small and traditional cruising is a developed and

important segment of small business growth in the Mediterranean coastal area.

nautical tourism:

5. The Black Sea

1. The Mediterranean 2. European Atlantic Coast 3. Baltic Sea and Arctic

**6.1 The Mediterranean** 

private, and commercial.

4. European Lakes and Inland Waterways

sources should be used to the maximum.

could be transparently presented on the global demand market.

nautical tourism still has a very strong seasonal character.

marina, in terms of berth number, is 430 berths per marina.


Consequently the European concept of regional development is fully justified, especially in the context of tourism and nautical tourism, and the outcomes are a result of the political and economic market-oriented concept of the European Union. However, the real effects are yet to be observed since the EU, as a single market, is only just beginning to take shape and there are still huge differences between the European national economies of East and West. Still, these discrepancies confirm the hypothesis about the development possibilities in Europe when observed through the economic theory37by which differences in the level of development between countries can be positive and stimulating because they provide new opportunities and thus stimulate growth and the flow of investment to the less developed economy.

#### **6. Nautical and tourist markets in Europe**

The nautical and tourist market of Europe represent a range of differences in terms of the factors that are shaping it. In that context the differences in terms of climate, culture and tradition have special importance.

 37 Thurow, C. Lester: "The Future of Capitalism", William Morrow and Company, Inc, New York, 1996, where this is called a theory of *punctuated equilibrium.*

It is appropriate to use the classification of the five major markets in Europe for the study of nautical tourism:


418 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

 *Nautical tourism, from the perspective of a receptive country,* is an important source of currency inflow. It is considered to be a specific form of export (a so-called invisible export). All the money foreign visitors spend in a country contributes to the balance of payments of the host country. Currency inflow from tourism is particularly important for developing countries, i.e. countries in transition. Some countries, like Croatia, have developed nautical tourism to the extent that they can compete on the competitive international market. In order to achieve better results, most of receptive tourist countries in Europe offer state subsidies which encourage investments in facilities intended for tourist services. These are implemented through various reliefs, grants, benefits, low interest rates and other measures. Still, the real effects come through new investments in the nautical tourism industry which is highly profitable, but unexplored. *Nautical tourism, seen from a social point of view*, facilitates the intermingling of nations and the transfer of information, knowledge, culture and lifestyle. In fact, nautical tourism makes a considerable contribution as foreign tourists and their equipment, such as cameras, attract the interest of local inhabitants, which can initiate some level of cultural interchange of ideas. The impact of tourism in general, and nautical tourism in particular, on the overall development of a certain area or country in a social sense is reflected in the interests and education of young people. That factor of social and economic development is immeasurable, but at its best is certainly a significant factor in

 The *multiplying* effect of tourism should not be neglected: it results from the fact that money spent by tourists does not remain in the place of consumption, but continues to circulate and have a chain effect on economic events. Accordingly, money circulates on the national and supra-national level within an entire economy, flowing from one business to the other, from industry to industry, and the more it circulates the bigger are its economic effects. According to studies in the U.S. economy, a dollar invested in tourism effectively multiplies by a factor of 4.2. In Croatia, the multiplier is 3.2, meaning that the income from foreign tourists is effectively multiplied by a factor of 3.2 in the

Consequently the European concept of regional development is fully justified, especially in the context of tourism and nautical tourism, and the outcomes are a result of the political and economic market-oriented concept of the European Union. However, the real effects are yet to be observed since the EU, as a single market, is only just beginning to take shape and there are still huge differences between the European national economies of East and West. Still, these discrepancies confirm the hypothesis about the development possibilities in Europe when observed through the economic theory37by which differences in the level of development between countries can be positive and stimulating because they provide new opportunities

total economy. A similar effect applies in all receptive European countries.

and thus stimulate growth and the flow of investment to the less developed economy.

The nautical and tourist market of Europe represent a range of differences in terms of the factors that are shaping it. In that context the differences in terms of climate, culture and

37 Thurow, C. Lester: "The Future of Capitalism", William Morrow and Company, Inc, New York, 1996,

the process of social change.

**6. Nautical and tourist markets in Europe** 

where this is called a theory of *punctuated equilibrium.*

tradition have special importance.

Once again, it must be stated that data on nautical tourism are scarce, so all available sources should be used to the maximum.

In the marina industry, Europe has something to boast about. Spain has Empuriabrava on the Costa di Sol, the largest marina-city (over 5000 berths) in Europe. France has the 5-star Port Camargue with 5,010 berths, the highest quality marine, specifically recognised by the ADAC. Italy has the highest number of marinas in the Mediterranean. Greece has the greatest potential for development in nautical tourism considering the length of its indented coast and islands. Dutch marinas and waterways are located below sea level. Marinas in England are among the best of European marina systems. Germany has a number of marinas inland and the on the coast of north Europe. Norway has the highest number of marinas in Europe, and also the most ice-covered marinas. Croatia has the marina Frapa in Rogoznica, the world's best marina in 2006 and 2007. The fact is that there are a lot of reasons for European nautical tourism to be thoroughly studied, so that the quality and achievement of its market diversity could be transparently presented on the global demand market.

#### **6.1 The Mediterranean**

Nautical tourism in the Mediterranean is highly dynamic and developed. *The marina industry* has been developed through a number of marinas, tourist organizations, and all other participants in the industry. The mild Mediterranean climate gives, especially for tourists from the cold North of Europe, the opportunity to go on vacation almost all year round, though the summer season remains particularly popular, so that Mediterranean nautical tourism still has a very strong seasonal character.

Given the scarcity of data on the number of categorized high-quality marinas in the Mediterranean and Europe, we will use the ADAC and other sources. The average size of a marina, in terms of berth number, is 430 berths per marina.

In the Mediterranean there are over 1,000 marinas of all kinds, such as sports marinas, private, and commercial.

*The charter industry* can only be estimated from the fact that in the Mediterranean, charter companies have thousands of boats and yachts and approximately 500 mega yachts. Skippers, as active participants in the charter business, have their associations and guilds in some Mediterranean countries, and their activity is therefore gradually acquiring a legal framework.

The Mediterranean *cruise industry* stands out in terms of ports for tourists from cruise ships, i.e. in relation to high-quality destinations that attract tourists from around the world. Cruisers under all flags sail into the Mediterranean ports, but the Italian Costa company stands out as a local Mediterranean cruise company. Small and traditional cruising is a developed and important segment of small business growth in the Mediterranean coastal area.


Table 5. Marinas on the Mediterranean

Nautical Tourism and Its Function in the Economic Development of Europe 421

The European Atlantic coast is exposed to strong winds and waves, with tides that can vary in the range of over 8 metres. Under these conditions, ports and marinas are built within a strong breakwater system that protects the port from the sea. Consequently, marinas, as well as berths, are constructed in a special way, so the term "Atlantic marinas" is used in the

In this region, nautical tourism is very well developed in spite of the climate, which is a

In relation to the number of marinas and given the climatic conditions, it may seem surprising that there are 486 high category marinas in this part of Europe, as stated by the ADAC. The total capacity of these 486 marinas is 168,408 berths. The average size of marina

*The charter* business functions in the context of marinas, and is most highly developed in the

*Cruising* on large cruise ships is somewhat less developed compared to the Mediterranean, but the English market is a leader regarding educational centres and universities specialised for the training of cruise staff (Plymouth, Southampton etc.). Small, local cruising business

0-100 8 23 5 5 33 26 2 3 7 **112**  101-500 9 71 25 32 69 14 16 16 15 **267**  501-1000 2 22 4 27 16 0 3 6 5 **85** 

<sup>2000</sup>0 0 2 13 2 0 0 1 2 **<sup>20</sup>**

<sup>5000</sup>0 0 0 2 0 0 0 0 0 **<sup>2</sup>** > 5001 0 0 0 0 0 0 0 0 0 **0** 

total\* 4,781 33,282 12,723 51,127 36,151 4,093 6,770 10,344 9,137 **168,408** 

Nautical tourism in the Baltic and Arctic has been developed in a special climatic environment. Countries in that area have the world's highest living standard, which is

\* For England we only have data from ADAC which applies only to marinas on The English Channel

ds (120) Germany (40)

Portugal

(21)

Spain

(26)

Sweden

(29)

**TOTAL** 

**European** 

**Atlantic** 

**(486)**

consequence of the high degree of development of countries in this part of Europe.

**6.2 The European Atlantic coast** 

on that market is 346.5 berths.

1001-

2001-

Berth

Note:

specialized dictionary of nautical tourism.

central and southern regions of this market.

Marinas & Berths Belgium (19) Denmark (116) England\* (36) France (79) Netherlan

Source: the author T. Luković with reference to ADAC.

reflected in the level of development of nautical tourism.

Table 6. European Atlantic coast

**6.3 The Baltic Sea and the Arctic** 

functions in accordance with climatic and other conditions.

#### **6.2 The European Atlantic coast**

420 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Source: The author T. Luković with reference to ADAC.

Table 5. Marinas on the Mediterranean

The European Atlantic coast is exposed to strong winds and waves, with tides that can vary in the range of over 8 metres. Under these conditions, ports and marinas are built within a strong breakwater system that protects the port from the sea. Consequently, marinas, as well as berths, are constructed in a special way, so the term "Atlantic marinas" is used in the specialized dictionary of nautical tourism.

In this region, nautical tourism is very well developed in spite of the climate, which is a consequence of the high degree of development of countries in this part of Europe.

In relation to the number of marinas and given the climatic conditions, it may seem surprising that there are 486 high category marinas in this part of Europe, as stated by the ADAC. The total capacity of these 486 marinas is 168,408 berths. The average size of marina on that market is 346.5 berths.

*The charter* business functions in the context of marinas, and is most highly developed in the central and southern regions of this market.

*Cruising* on large cruise ships is somewhat less developed compared to the Mediterranean, but the English market is a leader regarding educational centres and universities specialised for the training of cruise staff (Plymouth, Southampton etc.). Small, local cruising business functions in accordance with climatic and other conditions.


Note:

\* For England we only have data from ADAC which applies only to marinas on The English Channel Source: the author T. Luković with reference to ADAC.

Table 6. European Atlantic coast

#### **6.3 The Baltic Sea and the Arctic**

Nautical tourism in the Baltic and Arctic has been developed in a special climatic environment. Countries in that area have the world's highest living standard, which is reflected in the level of development of nautical tourism.

 a. Ice-covered marina, Finland b. Cruise port and marina Warnemuende (Germany)

Nautical Tourism and Its Function in the Economic Development of Europe 423

The market of continental nautical tourism in Europe is represented by the supply and demand on the freshwater areas, rivers, lakes and canals. All types of nautical tourism are

As a rule, and almost without exceptions, marinas are organised as clubs, with evident commercialization. They are located in all European countries, but a significant number of countries lack transparent marina statistics. Such countries are Slovakia, the Czech Republic, Hungary, Romania, Moldova, Ukraine, Belarus, Bulgaria, and countries of the eastern Balkans. So the data used in this study give only a vague hint of the real importance of nautical tourism in continental Europe; in other words, they analyze only the western European market. Despite that incomplete data, 623 continental marinas indicate that the largest number of high-quality marinas in Europe is located here. At the same time, the fact that the average capacity of a marina on the continent is 94.6 berths suggests there is room

*Chartering* is not developed so much because sailors tend to have their own boats; only marinas connected to tourist camps or bigger places offer charters. Almost always it is a

a. Cruisers departing from the port Passau b. Marina and cruise port Roebel (Germany)

Fig. 6. Continental nautical tourism in Europe Table 7. Marinas on the largest rivers, lakes

*Cruising* is developed and takes place on all European navigable waterways. The Danube, Elbe and Main are suitable for navigation, so multi-day cruises are more widespread. The fact that Europe abounds with beautiful and historically important destinations makes it ideal for the development of the cruise industry, so it can be said that continental cruising has an international character. Very often, big cruise ships are in the hands of international capital and companies. Large and medium-sized cruise ships offer multi-day cruises throughout the elite destinations of continental Europe, such as Vienna, Budapest, etc. As far as cruise management is concerned, it is important to emphasize one feature typical for the European continent. International sources of capital and owners come from various countries but, with mutual interests regarding capital, are willing to invest in the construction and purchase of cruisers, and they do not do business alone, but make considerable use of travel agencies. TUI agency is specialised for this and it manages most of

the large and medium-sized cruise ships operating on the waterways of Europe.

**6.4 European lakes and inland waterways** 

for future development.

Source: taken by the author Luković, T.

and channels in Europe\*

one-day charter.

equally developed, i.e. marinas and cruising are the focus.

Source: the author Luković, T.

Fig. 5. Baltic marinas


Note:

\* ADAC has not incorporated marinas of some Baltic and Arctic countries; we will therefore complete this classification with marinas regardless of their quality:

Russia – no data Lithuania – 5 Latvia – 29 Estonia – 91 Finland – 155 Norway – 963 Source: the author T. Luković with reference to ADAC.

Table 7. Baltic and Arctic\*

The brevity of the summer and sailing season has led to a small number of high-quality commercial and well-equipped marinas. These marinas are functional and intensively used in summer, but ice-covered in winter. According to ADAC, the average size of a high quality commercial marina is 163.5 berths, which is a relatively small number for Europe. Nevertheless, sailing in Scandinavian countries is very well developed, and the number of boats is almost equal to the number of inhabitants, which is an understandable consequence of the local lifestyle and tradition.

*Chartering* is relatively underdeveloped and seasonal.

*Cruising* is highly developed in terms of both ports for large cruise ships and major cruising companies which operate in all markets of the world.

#### **6.4 European lakes and inland waterways**

422 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

a. Ice-covered marina, Finland b. Cruise port and marina Warnemuende

Poland (14)

Germany (127)

1 0-100 57 10 37 **104**  2 101-500 64 4 24 **92**  3 501-1000 5 0 0 **5**  4 1001-2000 1 0 0 **1**  5 2001-5000 0 0 0 **0**  6 > 5001 0 0 0 **0**  7 Berth total\* 24,525 1,198 7,297 **33,022** 

\* ADAC has not incorporated marinas of some Baltic and Arctic countries; we will therefore complete

The brevity of the summer and sailing season has led to a small number of high-quality commercial and well-equipped marinas. These marinas are functional and intensively used in summer, but ice-covered in winter. According to ADAC, the average size of a high quality commercial marina is 163.5 berths, which is a relatively small number for Europe. Nevertheless, sailing in Scandinavian countries is very well developed, and the number of boats is almost equal to the number of inhabitants, which is an understandable consequence

*Cruising* is highly developed in terms of both ports for large cruise ships and major cruising

Source: the author Luković, T.

Marinas & Berths

this classification with marinas regardless of their quality:

Source: the author T. Luković with reference to ADAC.

*Chartering* is relatively underdeveloped and seasonal.

companies which operate in all markets of the world.

Fig. 5. Baltic marinas

Note:

Russia – no data Lithuania – 5 Latvia – 29 Estonia – 91 Finland – 155 Norway – 963

Table 7. Baltic and Arctic\*

of the local lifestyle and tradition.

(Germany)

Sweden (61)

**TOTAL (202)** 

The market of continental nautical tourism in Europe is represented by the supply and demand on the freshwater areas, rivers, lakes and canals. All types of nautical tourism are equally developed, i.e. marinas and cruising are the focus.

As a rule, and almost without exceptions, marinas are organised as clubs, with evident commercialization. They are located in all European countries, but a significant number of countries lack transparent marina statistics. Such countries are Slovakia, the Czech Republic, Hungary, Romania, Moldova, Ukraine, Belarus, Bulgaria, and countries of the eastern Balkans. So the data used in this study give only a vague hint of the real importance of nautical tourism in continental Europe; in other words, they analyze only the western European market. Despite that incomplete data, 623 continental marinas indicate that the largest number of high-quality marinas in Europe is located here. At the same time, the fact that the average capacity of a marina on the continent is 94.6 berths suggests there is room for future development.

*Chartering* is not developed so much because sailors tend to have their own boats; only marinas connected to tourist camps or bigger places offer charters. Almost always it is a one-day charter.

a. Cruisers departing from the port Passau b. Marina and cruise port Roebel (Germany)

Source: taken by the author Luković, T.

Fig. 6. Continental nautical tourism in Europe Table 7. Marinas on the largest rivers, lakes and channels in Europe\*

*Cruising* is developed and takes place on all European navigable waterways. The Danube, Elbe and Main are suitable for navigation, so multi-day cruises are more widespread. The fact that Europe abounds with beautiful and historically important destinations makes it ideal for the development of the cruise industry, so it can be said that continental cruising has an international character. Very often, big cruise ships are in the hands of international capital and companies. Large and medium-sized cruise ships offer multi-day cruises throughout the elite destinations of continental Europe, such as Vienna, Budapest, etc. As far as cruise management is concerned, it is important to emphasize one feature typical for the European continent. International sources of capital and owners come from various countries but, with mutual interests regarding capital, are willing to invest in the construction and purchase of cruisers, and they do not do business alone, but make considerable use of travel agencies. TUI agency is specialised for this and it manages most of the large and medium-sized cruise ships operating on the waterways of Europe.


Note:

\* Except for countries in Table 7., there is no information on marinas or other aspects of nautical tourism. This particularly applies to the countries of Central and Eastern Europe. Source the author T. Luković with reference to ADAC.

Table 8. Marinas on the largest rivers, lakes and channels in Europe\*

Nautical Tourism and Its Function in the Economic Development of Europe 425

As with to the countries of Central and Eastern Europe, there are no data for the Black sea market. It is a known fact that the Black Sea has highly developed general, as well as nautical, tourism, but unfortunately there are no available data. However, that is not a

Market-oriented research implies a study of supply and demand, its level of development and dynamics of movement, as well as other market characteristics. The previous section dealt with supply in the market of nautical tourism, so in order to have a complete market

Demand is clearly a significant factor and worth quantifying since it determines the opportunities to which suppliers can adapt. Although mostly spontaneously, at least in the marina industry, supply has successfully adapted to demand though it is generally the case that demand still exceeds supply. If analysed from the aspect of economic development, it

In respect of the market, potential for growth of any industry, including nautical tourism, depend on market trends, i.e. on the demand to which supply should be adjusted. In assessing the potential for development, it is necessary to analyse both the supply and the demand. The basic characteristics of supply are presented and quantified in Section 6, while the demand requires further analysis for an assessment of the market. Studies are scarce in the field of analysis of demand, though studies by some European institutes contribute to the knowledge of demand. In Europe there are periodic studies conducted by: the Institute for Tourism in Madrid, the Institute in Bonn, *dwif* consulting GmbH Berlin, and occasionally universities for their state or county, such as the Welsh Enterprise Institute at the University of Glamorgan Business School. Valuable research, such as that by TOMAS-nautical science and TOMAS-cruising, carried out every 2 to 3 years by the Institute for Tourism in Zagreb, should be added to those mentioned above. TOMAS38 studies of demand in nautical tourism

Due to the continuous 30-year-long research in nautical tourism carried out by the Institute for Tourism in Zagreb, it is possible to form some conclusions on the growth of demand in nautical tourism and on the potential supply that adjusts to it. Regarding the results of the demand analysis, and taking into account the fact that in the last 30 years the average annual growth rate of all types of nautical tourism has exceeded 10%, along with the fact that general tourism has shown no signs of "industry fatigue", further growth of marina and

38 Detailed characteristics of the demand in nautical tourism can be seen on these links. 39 http://www.iztzg.hr/UserFiles/Pdf/Tomas/2007\_TOMAS-Nautika\_2007.pdf &

http://www.mint.hr/UserDocsImages/TOMAS2006-cruising.pdf

**7. Development possibilities – Research of demand and specificities of** 

reason not to mention it and thus suggest room for future studies.

means that there is room for new investments in the field of supply.

analysis, it is necessary to look also into the demand.

**7.1 Demand as a growth factor** 

can be found on the websites39.

cruise industry is to be expected.

**6.5 The Black Sea coast** 

**development** 

#### **6.5 The Black Sea coast**

424 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

\* Except for countries in Table 7., there is no information on marinas or other aspects of nautical

tourism. This particularly applies to the countries of Central and Eastern Europe.

Table 8. Marinas on the largest rivers, lakes and channels in Europe\*

Source the author T. Luković with reference to ADAC.

Note:

As with to the countries of Central and Eastern Europe, there are no data for the Black sea market. It is a known fact that the Black Sea has highly developed general, as well as nautical, tourism, but unfortunately there are no available data. However, that is not a reason not to mention it and thus suggest room for future studies.

#### **7. Development possibilities – Research of demand and specificities of development**

Market-oriented research implies a study of supply and demand, its level of development and dynamics of movement, as well as other market characteristics. The previous section dealt with supply in the market of nautical tourism, so in order to have a complete market analysis, it is necessary to look also into the demand.

Demand is clearly a significant factor and worth quantifying since it determines the opportunities to which suppliers can adapt. Although mostly spontaneously, at least in the marina industry, supply has successfully adapted to demand though it is generally the case that demand still exceeds supply. If analysed from the aspect of economic development, it means that there is room for new investments in the field of supply.

#### **7.1 Demand as a growth factor**

In respect of the market, potential for growth of any industry, including nautical tourism, depend on market trends, i.e. on the demand to which supply should be adjusted. In assessing the potential for development, it is necessary to analyse both the supply and the demand. The basic characteristics of supply are presented and quantified in Section 6, while the demand requires further analysis for an assessment of the market. Studies are scarce in the field of analysis of demand, though studies by some European institutes contribute to the knowledge of demand. In Europe there are periodic studies conducted by: the Institute for Tourism in Madrid, the Institute in Bonn, *dwif* consulting GmbH Berlin, and occasionally universities for their state or county, such as the Welsh Enterprise Institute at the University of Glamorgan Business School. Valuable research, such as that by TOMAS-nautical science and TOMAS-cruising, carried out every 2 to 3 years by the Institute for Tourism in Zagreb, should be added to those mentioned above. TOMAS38 studies of demand in nautical tourism can be found on the websites39.

Due to the continuous 30-year-long research in nautical tourism carried out by the Institute for Tourism in Zagreb, it is possible to form some conclusions on the growth of demand in nautical tourism and on the potential supply that adjusts to it. Regarding the results of the demand analysis, and taking into account the fact that in the last 30 years the average annual growth rate of all types of nautical tourism has exceeded 10%, along with the fact that general tourism has shown no signs of "industry fatigue", further growth of marina and cruise industry is to be expected.

 38 Detailed characteristics of the demand in nautical tourism can be seen on these links.

<sup>39</sup> http://www.iztzg.hr/UserFiles/Pdf/Tomas/2007\_TOMAS-Nautika\_2007.pdf &

http://www.mint.hr/UserDocsImages/TOMAS2006-cruising.pdf

Nautical Tourism and Its Function in the Economic Development of Europe 427

economic crisis and efforts to find the way out of it. That model developed spontaneously, under the influence of the market, but many European economies have not yet recognized it, so it remains as a potential source of future development. If we consider the European model of regional and local development, where the planning and support for development is transferred from the state to local and regional government, then the marina phenomenon should be studied as a clear example of the theory being put into

The second model is particularly relevant to strategies of future development in Europe, on the grounds that such development takes a significant role in the promotion of regional development in a way that can be of central interest to local and regional government. An opportunity is thus provided for a strategy of diversification that can extend to the to macro-

All investors are looking at the relevant calculation of ROI (return on investment) before

In a time of global crisis, with a surplus of money in the market of financial capital, the investment risks have become too great. All this has resulted in an increase of interest on investment, and investment has almost stopped. But is the crisis the reason for the lack of investments? The crisis actually offers new opportunities for development in the eyes of a truly visionary manager. The question is *where to invest the significant capital*? Given the situation on the market and according to the predictions of analysts familiar with the situation in nautical tourism, the answer is: "*Immediately invest in nautical tourism."* Someone might say that such an answer is frivolous, but it is valid and justified. Still, we should put that argument aside for potential investors who are willing to pay good money for a serious explanation of

Here we will offer a good example of how a visionary with a good idea can reach the top in spite of numerous obstacles, such as an economy in transition, a country at war, a global crisis, a bad reputation of the country on the international stage, general disorder in the country, a lack of staff, the isolation of the destination, and so on. Common sense would suggest that success in such a context would be only a utopian ideal, but practical reality has demonstrated the opposite, and thus reflects and confirms the development strength of

The owner of the marina, Mr. Franjo Pašalić came to Croatia during the war in 1992. Several years later he invested in the construction of the marina in the almost abandoned locality of Rogoznica, near Šibenik (Croatia). An artificial island was constructed together with the first pontoons which in 1996 accommodated the first yachts in an unfinished marina. Using only reinvested income the marina has developed over the past 10 years and now offers substantial and attractive facilities for visiting sailors. Strategically, the marina has focused on the elite global demand market and today offers facilities of the highest quality. The question is what happened to the destination and the marina over the 10 years of its

investing, and wondering when and how they might recover the invested capital.

economic level of development with an obvious positive potential.

ROI and for the management of investments in nautical tourism.

**The example of the marina Frapa (Rogoznica, Croatia)** 

**7.3 How to get to the top in nautical tourism within 10 years time** 

effective practice.

nautical tourism.

existence in Rogoznica?

#### **7.2 Models of development of the growth of nautical tourism and its role in the economy of Europe**

The question is: *How does the development of nautical tourism affect economic growth in the European economic circumstances?* In practice, there are two basic models of development that have been recorded, studied and quantified in theory:


The first model functions throughout Europe, though particularly in the Mediterranean, wherever a marina is located near a large city. Being a part of the city environment, there is no need for the marina to develop additional facilities of its own because everything is already available in the city. There is only one example where a marina 'conquered' an already developed tourist destination, and achieved a scale that dominates the local tourism environment. That is the Spanish marina 'Empuriabrava' on the Costa Brava which is a project of the Immo-Center Group company. The impact of Empuriabrava is such that the city and destination have completely surrendered to its influence, and it has become a symbol of a whole lifestyle and business in this part of Europe.

 a. marina Baia Des Anges (Nice), operating in conjunction with the hotel complex b. Marina Frapa (Rogoznica) as a local leader

Source: the author Luković, T.

Fig. 7. Models of the role marinas play in the economic development in Europe

The second model, where marina or cruise port is an initiating factor the development of the area, is interesting because of the perspective it offers on growth potential in a time of

The question is: *How does the development of nautical tourism affect economic growth in the European economic circumstances?* In practice, there are two basic models of development that

 Model a. – in this model the marina has no role in development. The marina is just one product of a spectrum of tourism facilities that is stronger in capital and to which it is subjected. This model can be found on the Cote d'Azur, e.g. Nice, which is saturated with tourist facilities. In this model, marinas, charter and cruising serve only to

 Model b. – a marina, or cruise port, acts as a leader in the economic development of the locality or region. This model is widely present in the Mediterranean, but also on all the coasts of Europe. The influence of a marina is crucial in the less-developed areas, and, as in concentric circles, it becomes a centre of extended development. Examples of this model is can be found throughout the Mediterranean, but also in the Baltic, where cruising and marinas have become leaders of development in tourism and the economy in general. The first model functions throughout Europe, though particularly in the Mediterranean, wherever a marina is located near a large city. Being a part of the city environment, there is no need for the marina to develop additional facilities of its own because everything is already available in the city. There is only one example where a marina 'conquered' an already developed tourist destination, and achieved a scale that dominates the local tourism environment. That is the Spanish marina 'Empuriabrava' on the Costa Brava which is a project of the Immo-Center Group company. The impact of Empuriabrava is such that the city and destination have completely surrendered to its influence, and it has become a

b. Marina Frapa (Rogoznica) as a local leader

**7.2 Models of development of the growth of nautical tourism and its role in the** 

have been recorded, studied and quantified in theory:

complement a stronger market, chiefly comprising hotels.

symbol of a whole lifestyle and business in this part of Europe.

Fig. 7. Models of the role marinas play in the economic development in Europe

The second model, where marina or cruise port is an initiating factor the development of the area, is interesting because of the perspective it offers on growth potential in a time of

 a. marina Baia Des Anges (Nice), operating in conjunction with the hotel complex

Source: the author Luković, T.

**economy of Europe** 

economic crisis and efforts to find the way out of it. That model developed spontaneously, under the influence of the market, but many European economies have not yet recognized it, so it remains as a potential source of future development. If we consider the European model of regional and local development, where the planning and support for development is transferred from the state to local and regional government, then the marina phenomenon should be studied as a clear example of the theory being put into effective practice.

The second model is particularly relevant to strategies of future development in Europe, on the grounds that such development takes a significant role in the promotion of regional development in a way that can be of central interest to local and regional government. An opportunity is thus provided for a strategy of diversification that can extend to the to macroeconomic level of development with an obvious positive potential.

#### **7.3 How to get to the top in nautical tourism within 10 years time**

All investors are looking at the relevant calculation of ROI (return on investment) before investing, and wondering when and how they might recover the invested capital.

In a time of global crisis, with a surplus of money in the market of financial capital, the investment risks have become too great. All this has resulted in an increase of interest on investment, and investment has almost stopped. But is the crisis the reason for the lack of investments? The crisis actually offers new opportunities for development in the eyes of a truly visionary manager. The question is *where to invest the significant capital*? Given the situation on the market and according to the predictions of analysts familiar with the situation in nautical tourism, the answer is: "*Immediately invest in nautical tourism."* Someone might say that such an answer is frivolous, but it is valid and justified. Still, we should put that argument aside for potential investors who are willing to pay good money for a serious explanation of ROI and for the management of investments in nautical tourism.

Here we will offer a good example of how a visionary with a good idea can reach the top in spite of numerous obstacles, such as an economy in transition, a country at war, a global crisis, a bad reputation of the country on the international stage, general disorder in the country, a lack of staff, the isolation of the destination, and so on. Common sense would suggest that success in such a context would be only a utopian ideal, but practical reality has demonstrated the opposite, and thus reflects and confirms the development strength of nautical tourism.

#### **The example of the marina Frapa (Rogoznica, Croatia)**

The owner of the marina, Mr. Franjo Pašalić came to Croatia during the war in 1992. Several years later he invested in the construction of the marina in the almost abandoned locality of Rogoznica, near Šibenik (Croatia). An artificial island was constructed together with the first pontoons which in 1996 accommodated the first yachts in an unfinished marina. Using only reinvested income the marina has developed over the past 10 years and now offers substantial and attractive facilities for visiting sailors. Strategically, the marina has focused on the elite global demand market and today offers facilities of the highest quality. The question is what happened to the destination and the marina over the 10 years of its existence in Rogoznica?

Nautical Tourism and Its Function in the Economic Development of Europe 429

In this time of global financial and economic crisis, development in all industries, especially when seen in terms of new investments, has effectively halted. Reluctance to invest and a general lack of confidence have spread to investors, managers and commercial banks. The crisis of ideas and uncertainty over invested capital, along with the increasing challenges that management has to face but cannot adequately respond to, has shaken the global economy. Europe, which has tried to unite its economy and develop its own economic model right from the earliest stage of its unification, is facing serious difficulties and there is

The fact is that every crisis presents new opportunities for development; but it is a fact that has to be recognized and taken advantage of. The industry of nautical tourism has resisted the negative effects of crisis and maintained a rising trend of development. Certainly, changes occur in nautical tourism; for instance trips have become shorter, though more frequent. The capacities of yachts, marinas, cruisers, ports and attractive destinations are being used in better ways, and the demand for "value for money" has

What is currently on offer in nautical tourism meets all these demands, and ensures its development. At the same time, there is still considerable space for investment in marinas, the charter business and cruising throughout Europe, and such investment is capable of realising significant returns that is not dependant on exceptional management. The areas of nautical tourism, particularly marinas and ports for large cruise ships, support an emerging European model of sustainable regional development, in which they can take the role of

Thus nautical tourism demonstrates that this could be seen as much as a crisis of ideas as a real economic crisis. There are two key entities with solutions to offer: visionary investors and managers. The demands they have to face are these: to know more, to learn more, to study more, to see further and better than others, and to develop trust and confidence with hard work. The cognitive skills of investors and managers, together with education, are a response to the crisis and the only way in which solutions to it can be

[2] Berlitz "Complete Guide to Cruising & Cruise Ships 2006", Douglas Ward, London, 2006 [3] Bonn Institute study – dwif/BTE 2004: "Trendmarkt Wassertourismus" BTE

[4] European Cruise Council: "The cruise industry, a leader in Europe's economic recovery", "Contribution of Cruise Tourism to the Economies of Europe", Edition 2011 [5] Gračan, D. & Zadel, Z. & Rudančić-Lugarić, A.: "'Four Stars Charter Quality' in charter

service of Croatia", Naše more, Znanstveni časopis za more i pomorstvo, Vol. 58. 1-

[1] ADAC: "Marinaführer, Deutschland, Europa", Germany 2010

Tourismusmanagement, Regionalentwicklung, 2004.

[6] Institute for Tourism in Zagreb: "Tomas cruising 2006", Zagreb 2007

**8. Conclusion** 

as yet no light at the end of the tunnel.

But is everything so negative?

become more crucial.

local and regional leader.

found.

**9. References** 

2, 2011


Source: research by the author Luković, T.

Table 9. 10 years of marina Frapa in Rogoznica

Although it is hard to believe that in 10 years the life of a practically dead locality can be revived and raised to a high level, nevertheless it has happened here. Maybe it also occurs, if a bit less dramatically, in all localities where a marina or cruise port becomes an economic and development leader. All the local inhabitants are employed, and the destination is generally being rapidly developed.

Marina Frapa has the role of a leader and is a moving force in the development of Rogoznica. Thanks to the marina local development has been dramatically boosted. The scale and quality of the marina initiated the development of the destination, and the Frapa marina has reached the top in the quality of service it offers. As confirmation of these claims, it is worth noting that in 2006, at the world marina contest in Madrid, between 300 marinas from 60 countries, Frapa received the award of the best marina in 2006. The same happened the next year in Switzerland. The organizers then changed the statute so that the award could not go to the same marina three times (!)

This example illustrates how in completely adverse conditions and in a time of global crisis nautical tourism can open up the possibility of genuine economic success.

A similar situation can be seen in Dubrovnik, a town of about 40,000 inhabitants. The cruise port of Gruž (Dubrovnik) is the 10th port in the world in terms of the number of cruise passengers, and the 3rd in the Mediterranean. Due to the developed of cruising, the inhabitants of Dubrovnik have safer jobs and security of livelihood.

This model is present at all places where nautical tourism has been developed, particularly where it is associated with a noteworthy tourist destination. Europe abounds in good destinations, not only on the coasts, but also inland, which indicates the still insufficiently explored development opportunities.

#### **8. Conclusion**

428 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

**Development indicators Before the marina (Year 1996) Marina in business** 

Local population 350 over 2,000 Average age of the population over 70 about 40 No. of employees 30 800

medium-sized companies 10 100 Price of land (per m²) € 10 - 20 € 150 – 300 No. of restaurants 1 8 No. of cafes 2 15 No. of shops 2 9 No. of exchange offices 0 2 No. of medical centres 0 4 Primary schools 0 2

preservation (ecology) preserved preserved

Although it is hard to believe that in 10 years the life of a practically dead locality can be revived and raised to a high level, nevertheless it has happened here. Maybe it also occurs, if a bit less dramatically, in all localities where a marina or cruise port becomes an economic and development leader. All the local inhabitants are employed, and the destination is

Marina Frapa has the role of a leader and is a moving force in the development of Rogoznica. Thanks to the marina local development has been dramatically boosted. The scale and quality of the marina initiated the development of the destination, and the Frapa marina has reached the top in the quality of service it offers. As confirmation of these claims, it is worth noting that in 2006, at the world marina contest in Madrid, between 300 marinas from 60 countries, Frapa received the award of the best marina in 2006. The same happened the next year in Switzerland. The organizers then changed the statute so that the award

This example illustrates how in completely adverse conditions and in a time of global crisis

A similar situation can be seen in Dubrovnik, a town of about 40,000 inhabitants. The cruise port of Gruž (Dubrovnik) is the 10th port in the world in terms of the number of cruise passengers, and the 3rd in the Mediterranean. Due to the developed of cruising, the

This model is present at all places where nautical tourism has been developed, particularly where it is associated with a noteworthy tourist destination. Europe abounds in good destinations, not only on the coasts, but also inland, which indicates the still insufficiently

nautical tourism can open up the possibility of genuine economic success.

inhabitants of Dubrovnik have safer jobs and security of livelihood.

No. of small and

Natural resources

Source: research by the author Luković, T.

generally being rapidly developed.

Table 9. 10 years of marina Frapa in Rogoznica

could not go to the same marina three times (!)

explored development opportunities.

**(Year 2005)** 

In this time of global financial and economic crisis, development in all industries, especially when seen in terms of new investments, has effectively halted. Reluctance to invest and a general lack of confidence have spread to investors, managers and commercial banks. The crisis of ideas and uncertainty over invested capital, along with the increasing challenges that management has to face but cannot adequately respond to, has shaken the global economy. Europe, which has tried to unite its economy and develop its own economic model right from the earliest stage of its unification, is facing serious difficulties and there is as yet no light at the end of the tunnel.

But is everything so negative?

The fact is that every crisis presents new opportunities for development; but it is a fact that has to be recognized and taken advantage of. The industry of nautical tourism has resisted the negative effects of crisis and maintained a rising trend of development. Certainly, changes occur in nautical tourism; for instance trips have become shorter, though more frequent. The capacities of yachts, marinas, cruisers, ports and attractive destinations are being used in better ways, and the demand for "value for money" has become more crucial.

What is currently on offer in nautical tourism meets all these demands, and ensures its development. At the same time, there is still considerable space for investment in marinas, the charter business and cruising throughout Europe, and such investment is capable of realising significant returns that is not dependant on exceptional management. The areas of nautical tourism, particularly marinas and ports for large cruise ships, support an emerging European model of sustainable regional development, in which they can take the role of local and regional leader.

Thus nautical tourism demonstrates that this could be seen as much as a crisis of ideas as a real economic crisis. There are two key entities with solutions to offer: visionary investors and managers. The demands they have to face are these: to know more, to learn more, to study more, to see further and better than others, and to develop trust and confidence with hard work. The cognitive skills of investors and managers, together with education, are a response to the crisis and the only way in which solutions to it can be found.

#### **9. References**


**20** 

**Sustainability in the Management of** 

In tourism, objects with cultural significance are usually among key tourism attractions, including the ones listed under the World Heritage List. Being designated as a World Heritage Site (WHS) for monuments, areas, or natural landscapes, is a privilege because the international visibility of the site as a tourism attraction will likely increase through the promotional and informational activities conducted by the government, tourism industry players and the World Heritage Committee (Drost 1996; Li, Wu and Cai 2008). Timothy and Nyaupane (2009) pointed out that visits to cultural and historical resources have become one

Heritage means something of inheritance or something that has been passed down from previous generations. It can cover historic buildings or monuments as well as natural landscapes. It also covers traditions, knowledge and work of arts – known as intangible heritage. Heritage as defined by Throsby is the different forms of cultural capital1, which represents the community's value of its social, historical, or cultural dimension

UNESCO adopted the Convention Concerning the Protection of the World Cultural and Natural Heritage in 1972. The purpose of the Convention is to ensure the identification, protection, conservation, presentation and transmission to future generations of cultural and natural heritage of outstanding universal value2. The Convention states that the World Heritage Committee (WHC) should coordinate the process of designating the sites through a system known as inscription, which includes an evaluation of the resources by experts against a set of known criteria. The aim of the inscription is to encourage conservation of the resources within designated sites and surrounding buffer zones on a local level and also to foster a sense of collective global responsibility via international cooperation, exchange and

For the Convention to achieve its purpose of ensuring the identification protection, conservation, presentation and transmission of cultural and natural heritage to future

1 Cultural capital as cultural resources with inherent characteristics that usually inspire or give rise to

2 The outstanding universal value is translated into ten criteria for evaluating sites nominated for

of the largest and fastest growing sectors of the tourism industry.

**1. Introduction** 

(Benhamou 2003).

support (Leask 2006).

the production of other cultural goods (Throsby 2003).

inscription on the World Heritage List.

**World Cultural Heritage** 

*Faculty of Tourism, Pancasila University* 

Devi Roza Kausar

*Indonesia* 


#### **Internet:**


### **Sustainability in the Management of World Cultural Heritage**

Devi Roza Kausar

*Faculty of Tourism, Pancasila University Indonesia* 

#### **1. Introduction**

430 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

competitive or partnership?", Third international conference, Cruise Research

cruise tourism.", Second international conference, Cruise Research Society, ICC2,

europskog dijela Mediterana", HHI – Croatian Hydrographic Institute Split, Split

"Pomorstvo" University of Rijeka, Scientific Journal of Maritime Research, Vol.23

[8] Kunziker, W. i Karpf, K. "Die Grundriss der Allgemeine Fremdenverkehslehre", 1942 [9] Luković, T. & Božić Fredotović, K.: "Cruiser bids and offers cruise destinations in the

[10] Luković, T. & Božić Fredotović, K.: "Seasonality – factor of crisis or development in

[11] Luković, T. & Gržetić, Z. "Nautičko turističko tržište u teoriji i praksi Hrvatske i

[12] Luković, T.: "Cruising by old timers, a chance for local and regional development in

[13] Luković, T.: "Sukobljene ili sukladne strategije razvoja europskog nautičkog turizma",

[19] Thurow, C. Lester: "The Future of Capitalism", William Morrow and Company, Inc,

[20] Welsh Enterprise Institute University of Glamorgan Business School: "A Study That

Applies the VoE Framework to the Marine and Coast Environment of Wales", 2006

[16] Passenger Shipping Association: Discover Cruises – Annual cruise review, 2006 [17] Ross K. Dowling: "Cruise ship tourism", Cowan University, Australia, CABI, 2006

[7] Institute for Tourism in Zagreb: TOMAS NAUTIKA 2007., Zagreb, 2008

Europe", the first CRS conference, Bremerhaven, 2009

[7] http://www.nmsc.gov.au/media/pages\_media\_files/files/MS05-

[9] http://www.ezadar.hr/clanak/najam-mega-jahte-i-60000-eura-tjedno

[14] http://www.mint.hr/UserDocsImages/TOMAS2006-cruising.pdf

[8] http://www.superyachtintelligence.com/vesselsummary.asp

[11] http://www.cruise-norway.no/viewfile.aspx?id=3186

Lance%20Cushion%20-%20Superyacht%20Base%20Australia.pdf

[13] http://www.iztzg.hr/UserFiles/Pdf/Tomas/2007\_TOMAS-Nautika\_2007.pdf

[10] http://www.vjesnik.hr/Article.aspx?ID=4BC04C74-3D6E-45A6-801B-3CD76F21C4C7

[14] Malcolm Wood, David Robinson: Market report Italy, 2006 [15] National "Law on The Provision of Tourism Services" 68/2007

[18] The new MedCruise Statistical Reports, 2010 Edition

Society, ICC3, Dubrovnik, 2011

No.2., Rijeka, December 2009

[1] http://www.europeancruisecouncil.com

[4] http://www.immocostabrava.com/en [5] http://www.marinafrapa.com/hr

[12] http://www.carnivalukgroup.com

[15] http://river-cruise-fleet.com [16] http://www.danube-river.org

Plymouth, 2010

New York, 1996

[2] www.bte-tourismus.de [3] www.portbooker.org

[6] http://www.poslovni.hr

**Internet:** 

2007

In tourism, objects with cultural significance are usually among key tourism attractions, including the ones listed under the World Heritage List. Being designated as a World Heritage Site (WHS) for monuments, areas, or natural landscapes, is a privilege because the international visibility of the site as a tourism attraction will likely increase through the promotional and informational activities conducted by the government, tourism industry players and the World Heritage Committee (Drost 1996; Li, Wu and Cai 2008). Timothy and Nyaupane (2009) pointed out that visits to cultural and historical resources have become one of the largest and fastest growing sectors of the tourism industry.

Heritage means something of inheritance or something that has been passed down from previous generations. It can cover historic buildings or monuments as well as natural landscapes. It also covers traditions, knowledge and work of arts – known as intangible heritage. Heritage as defined by Throsby is the different forms of cultural capital1, which represents the community's value of its social, historical, or cultural dimension (Benhamou 2003).

UNESCO adopted the Convention Concerning the Protection of the World Cultural and Natural Heritage in 1972. The purpose of the Convention is to ensure the identification, protection, conservation, presentation and transmission to future generations of cultural and natural heritage of outstanding universal value2. The Convention states that the World Heritage Committee (WHC) should coordinate the process of designating the sites through a system known as inscription, which includes an evaluation of the resources by experts against a set of known criteria. The aim of the inscription is to encourage conservation of the resources within designated sites and surrounding buffer zones on a local level and also to foster a sense of collective global responsibility via international cooperation, exchange and support (Leask 2006).

For the Convention to achieve its purpose of ensuring the identification protection, conservation, presentation and transmission of cultural and natural heritage to future

<sup>1</sup> Cultural capital as cultural resources with inherent characteristics that usually inspire or give rise to the production of other cultural goods (Throsby 2003).

<sup>2</sup> The outstanding universal value is translated into ten criteria for evaluating sites nominated for inscription on the World Heritage List.

Sustainability in the Management of World Cultural Heritage 433

uses the case of Borobudur Temple Compounds World Heritage Site in Central Java, Indonesia, drawing from a research conducted on the heritage site and its vicinities. The research, focusing on the management and conservation of the World Cultural Heritage, and the interactions between the heritage site and the communities, was conducted during 2007 to 2009 with the following data collection methods: survey, focus group interviews, and interviews to representative of organizations that were involved in the management of

The temple compounds are one of the prime tourism attractions in Indonesia. It became a World Heritage Site in 1991, and includes multiple locations, i.e. Borobudur Temple (the main temple); Mendut Temple and Pawon Temple, which are smaller but similar in architecture. Built in the 8th century, these ancient and magnificent Buddhist temples are located in Magelang Regency, Central Java Province. Borobudur Temple has a shape of a stepped pyramid consisting of nine super-imposed terraces and crowned by a huge bellshaped stupa. The lower structure consists of six square terraces. The temple's displays one of the largest ensembles of bas-reliefs describing the life of the Buddha and many other Buddhist stories. In October 2010, eruptions of Mount Merapi (one of the most active volcanoes on earth) caused five to six centimeters thick white ash covering the entrance, stupas and parts of the temple. Borobudur Temple was temporarily closed at the time

Indonesia, which signed the World Heritage Convention in 1989, currently has three cultural WHS and four natural WHS with Borobudur Temple being the most visited WHS in the country. Around 2 million visitors visit the temple every year with an approximately 80% of the visitors are Indonesian nationals. It was listed as World Heritage Site Number

Criteria 1: The site represents a unique artistic achievement, a masterpiece of the

 Criteria 2: The site has exerted great influence, over a span of time, or within a cultural area of the world, on developments in architecture, monumental arts or town-planning

Criteria 6: The site has directly or tangibly associated with events or with ideas or

To accommodate visitors coming to the main temple, Borobudur Temple Recreation Park was built specifically in 1985. The development of the park has resulted in the displacement

the heritage site and surrounding areas.

(Courtesy of Borobudur Heritage Conservation Institute) Fig. 1. Borobudur Temple (Candi Borobudur)

592 in 1991 under the following criteria:

beliefs of outstanding universal significance.

creative genius.

and landscaping.

because of the emergency situation and to allow ash-cleaning activity.

generations, the concept of sustainability needs to be applied in the management of the World Heritage Site. The concept of sustainability is based on the concept of sustainable development that was put forward in 1987 via the work of the United Nations World Commission on Environment and Development (WCED), as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. The Commission's report Our Common Future introduced the idea of sustainability as a means of integrating economic and ecological concerns in long-term development strategies.

While the concept of sustainability that was first presented in the WCED's report emphasized ecological concerns, the idea of sustainability had been extended to the arena of cultural development through the report of the World Commission on Culture and Development (WCCD), Our Creative Diversity. The report promoted the long-term needs of future generations for access to cultural resources (Throsby 2003), hence the notion of cultural sustainability had emerged.

Throsby (2003) argued that although the Brundtland definition of sustainable development provides an encapsulation of the essential concept, it is incomplete as a basis for considering the relationship between sustainability and culture. He suggested six principles in which sustainable management of cultural resources might be assessed: (1) material and non-material well-being; (2) intergenerational equity; (3) intragenerational equity; (4) maintenance of diversity; (5) precautionary principle; and (6) maintenance of cultural systems and recognition of interdependence (Throsby 2003 : 184 - 186). The first five principles were derived from the concept of natural capital and the notion that natural resources should be managed in a way that provides for the needs of the present generation without compromising the capacity of future generations to meet their own needs, as in the Brundtland Report.

The principle of material and non-material well-being implies that the flow of cultural goods and services provides both material benefits in the form of direct utility and non-material benefits in the form of non-market cultural goods whose value can be estimated in economic and cultural terms. Intergenerational equity refers to fairness in the distribution of welfare, utility or resources between generations, which relates directly to preservation and wise utilization of the resources. On the other hand, intragenerational equity refers to fairness in access to cultural resources and to the benefit flowing from them, viewed across social classes and income groups. Maintenance of diversity means the diversity of ideas, beliefs, traditions and values that will lead to the creation of more varied cultural goods, such as artistic works. The principle of precautionary principle states that decisions that may lead to irreversible change should be approached with extreme caution.

The sixth principle, maintenance of cultural systems and recognition of interdependence implies that no part of any system exists independently of other parts. Throsby (2003) proposed that this final principle draws together the entire concept of cultural sustainability since failure in sustaining cultural values that provide people with a sense of identity will place cultural systems in danger.

#### **2. The case of borobudur temple compounds world heritage site**

From this point on, this chapter discusses sustainable management of a World Cultural Heritage in the view of principles of cultural sustainability as identified by Throsby (2003). It

generations, the concept of sustainability needs to be applied in the management of the World Heritage Site. The concept of sustainability is based on the concept of sustainable development that was put forward in 1987 via the work of the United Nations World Commission on Environment and Development (WCED), as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. The Commission's report Our Common Future introduced the idea of sustainability as a means of integrating economic and ecological concerns in long-term

While the concept of sustainability that was first presented in the WCED's report emphasized ecological concerns, the idea of sustainability had been extended to the arena of cultural development through the report of the World Commission on Culture and Development (WCCD), Our Creative Diversity. The report promoted the long-term needs of future generations for access to cultural resources (Throsby 2003), hence the notion of

Throsby (2003) argued that although the Brundtland definition of sustainable development provides an encapsulation of the essential concept, it is incomplete as a basis for considering the relationship between sustainability and culture. He suggested six principles in which sustainable management of cultural resources might be assessed: (1) material and non-material well-being; (2) intergenerational equity; (3) intragenerational equity; (4) maintenance of diversity; (5) precautionary principle; and (6) maintenance of cultural systems and recognition of interdependence (Throsby 2003 : 184 - 186). The first five principles were derived from the concept of natural capital and the notion that natural resources should be managed in a way that provides for the needs of the present generation without compromising the capacity of

The principle of material and non-material well-being implies that the flow of cultural goods and services provides both material benefits in the form of direct utility and non-material benefits in the form of non-market cultural goods whose value can be estimated in economic and cultural terms. Intergenerational equity refers to fairness in the distribution of welfare, utility or resources between generations, which relates directly to preservation and wise utilization of the resources. On the other hand, intragenerational equity refers to fairness in access to cultural resources and to the benefit flowing from them, viewed across social classes and income groups. Maintenance of diversity means the diversity of ideas, beliefs, traditions and values that will lead to the creation of more varied cultural goods, such as artistic works. The principle of precautionary principle states that decisions that may lead to

The sixth principle, maintenance of cultural systems and recognition of interdependence implies that no part of any system exists independently of other parts. Throsby (2003) proposed that this final principle draws together the entire concept of cultural sustainability since failure in sustaining cultural values that provide people with a sense of identity will

From this point on, this chapter discusses sustainable management of a World Cultural Heritage in the view of principles of cultural sustainability as identified by Throsby (2003). It

future generations to meet their own needs, as in the Brundtland Report.

irreversible change should be approached with extreme caution.

**2. The case of borobudur temple compounds world heritage site** 

development strategies.

cultural sustainability had emerged.

place cultural systems in danger.

uses the case of Borobudur Temple Compounds World Heritage Site in Central Java, Indonesia, drawing from a research conducted on the heritage site and its vicinities. The research, focusing on the management and conservation of the World Cultural Heritage, and the interactions between the heritage site and the communities, was conducted during 2007 to 2009 with the following data collection methods: survey, focus group interviews, and interviews to representative of organizations that were involved in the management of the heritage site and surrounding areas.

(Courtesy of Borobudur Heritage Conservation Institute)

#### Fig. 1. Borobudur Temple (Candi Borobudur)

The temple compounds are one of the prime tourism attractions in Indonesia. It became a World Heritage Site in 1991, and includes multiple locations, i.e. Borobudur Temple (the main temple); Mendut Temple and Pawon Temple, which are smaller but similar in architecture. Built in the 8th century, these ancient and magnificent Buddhist temples are located in Magelang Regency, Central Java Province. Borobudur Temple has a shape of a stepped pyramid consisting of nine super-imposed terraces and crowned by a huge bellshaped stupa. The lower structure consists of six square terraces. The temple's displays one of the largest ensembles of bas-reliefs describing the life of the Buddha and many other Buddhist stories. In October 2010, eruptions of Mount Merapi (one of the most active volcanoes on earth) caused five to six centimeters thick white ash covering the entrance, stupas and parts of the temple. Borobudur Temple was temporarily closed at the time because of the emergency situation and to allow ash-cleaning activity.

Indonesia, which signed the World Heritage Convention in 1989, currently has three cultural WHS and four natural WHS with Borobudur Temple being the most visited WHS in the country. Around 2 million visitors visit the temple every year with an approximately 80% of the visitors are Indonesian nationals. It was listed as World Heritage Site Number 592 in 1991 under the following criteria:


To accommodate visitors coming to the main temple, Borobudur Temple Recreation Park was built specifically in 1985. The development of the park has resulted in the displacement

Sustainability in the Management of World Cultural Heritage 435

Domestic Products (GRDP) within the Borobudur District (Kausar 2010). It has stimulated the development of infrastructure in the area and business opportunities over the years, which is indicated from the growing number of shops, restaurants and galleries (ibid). Tourism has contributed also to employment, although the employment is mostly in the informal sector characterized with low and unstable income. Another form of material wellbeing is how the presence of Borobudur Temple has inspired people to make art works,

However, there are still many remaining issues with regards to the economic impacts of tourism in Borobudur. For instance, tourism has not encouraged the growth in the agriculture sector – a sector in which more than 40% of the workforces are involved (Kausar 2010). Growth in the service sector, which has been induced by tourism, is not accompanied by a growth in agriculture sector. The decline in the agriculture sector is evident from the decreasing share of value added from this sector to the district's GRDP in the recent years. This indicates that the growth in the service sector, which has been

Fig. 3. Trend of Sectors' Share to GRDP in Borobudur District and Magelang Regency

Figure 3 shows the comparison sector's shares to GRDP in Borobudur District and Magelang Regency between 2003 – 2007. It is revealed from this figure that decline of agriculture share to GRDP is faster in the Borobudur District than in the Magelang Regency as a whole.

induced by tourism, is not accompanied by growth in the agriculture sector.

which relate to the temple.

(2003 – 2007)

of two villages, with some conflicts arising in the process. The recreation park also includes museums, an audiovisual theatre, kiosks and stalls, area for cultural performances, and car and coach parking.

Many of both the international and domestic tourists use Yogyakarta (43 kilometres from the compounds and the second most important tourism destination in Indonesia) as a base for their visit to the region.3 The length of stay for the majority of visitors is rather short (3 - 4 hours) although there are also visitors (international and domestic) who spend a few days in various accommodations available in the Borobudur vicinity.4 The Local Government of Magelang wants visitors to stay longer and spend more of their travelling expenditure in Borobudur. However, the majority of visitors still generally perceive Borobudur Temple as the only attraction in the area despite efforts from some community members to develop other potential attractions in the rural setting.

Note: This map was created using GMT Software (Wessel and Smith 1991)

Fig. 2. Location of Borobudur Temple Compounds World Heritage Site in Central Java Province; Borobudur Position Relative to the Neighbouring Yogyakarta Province

#### **3. Viewing the principles of cultural sustainability in the management of Borobudur World Heritage**

The first principle as defined by Throsby (2003) is the principle of material and non-material well-being. Material well-being implies the production of material benefits in the form of direct utility to consumers, deriving from economic and cultural value sources (ibid). In the case of Borobudur Temple, the material benefits relate closely with tourism that generates income for communities living in the locality and for the government. Tourism in Borobudur had contributed quite significantly to local government's tax revenue and to the growth of value added from services and tourism related sectors' (such as trade, hotel, and restaurant sector, and transportation and communication sector) shares into Gross Regional

<sup>3</sup> Yogyakarta is renowned for cultural tourism evolving around the Sultanate's palace and remnants of the colonial era in its historic buildings. The city also has other attractions such as beaches in the southern part of the city (and the island of Java) and Merapi highlands in by the infamous Merapi Volcano in the north. 4 Accommodations in the Borobudur vicinity range from a luxurious international chain resort, hotels, guesthouses, and homestays.

of two villages, with some conflicts arising in the process. The recreation park also includes museums, an audiovisual theatre, kiosks and stalls, area for cultural performances, and car

Many of both the international and domestic tourists use Yogyakarta (43 kilometres from the compounds and the second most important tourism destination in Indonesia) as a base for their visit to the region.3 The length of stay for the majority of visitors is rather short (3 - 4 hours) although there are also visitors (international and domestic) who spend a few days in various accommodations available in the Borobudur vicinity.4 The Local Government of Magelang wants visitors to stay longer and spend more of their travelling expenditure in Borobudur. However, the majority of visitors still generally perceive Borobudur Temple as the only attraction in the area despite efforts from some community members to develop

and coach parking.

other potential attractions in the rural setting.

**Borobudur World Heritage** 

guesthouses, and homestays.

Note: This map was created using GMT Software (Wessel and Smith 1991)

Fig. 2. Location of Borobudur Temple Compounds World Heritage Site in Central Java Province; Borobudur Position Relative to the Neighbouring Yogyakarta Province

**3. Viewing the principles of cultural sustainability in the management of** 

The first principle as defined by Throsby (2003) is the principle of material and non-material well-being. Material well-being implies the production of material benefits in the form of direct utility to consumers, deriving from economic and cultural value sources (ibid). In the case of Borobudur Temple, the material benefits relate closely with tourism that generates income for communities living in the locality and for the government. Tourism in Borobudur had contributed quite significantly to local government's tax revenue and to the growth of value added from services and tourism related sectors' (such as trade, hotel, and restaurant sector, and transportation and communication sector) shares into Gross Regional

3 Yogyakarta is renowned for cultural tourism evolving around the Sultanate's palace and remnants of the colonial era in its historic buildings. The city also has other attractions such as beaches in the southern part of the city (and the island of Java) and Merapi highlands in by the infamous Merapi Volcano in the north. 4 Accommodations in the Borobudur vicinity range from a luxurious international chain resort, hotels,

Domestic Products (GRDP) within the Borobudur District (Kausar 2010). It has stimulated the development of infrastructure in the area and business opportunities over the years, which is indicated from the growing number of shops, restaurants and galleries (ibid). Tourism has contributed also to employment, although the employment is mostly in the informal sector characterized with low and unstable income. Another form of material wellbeing is how the presence of Borobudur Temple has inspired people to make art works, which relate to the temple.

However, there are still many remaining issues with regards to the economic impacts of tourism in Borobudur. For instance, tourism has not encouraged the growth in the agriculture sector – a sector in which more than 40% of the workforces are involved (Kausar 2010). Growth in the service sector, which has been induced by tourism, is not accompanied by a growth in agriculture sector. The decline in the agriculture sector is evident from the decreasing share of value added from this sector to the district's GRDP in the recent years. This indicates that the growth in the service sector, which has been induced by tourism, is not accompanied by growth in the agriculture sector.

Fig. 3. Trend of Sectors' Share to GRDP in Borobudur District and Magelang Regency (2003 – 2007)

Figure 3 shows the comparison sector's shares to GRDP in Borobudur District and Magelang Regency between 2003 – 2007. It is revealed from this figure that decline of agriculture share to GRDP is faster in the Borobudur District than in the Magelang Regency as a whole.

Sustainability in the Management of World Cultural Heritage 437

management bodies, especially that of the state-owned company, mandated to manage the recreation park in managing the site and in ensuring tourism benefits for local communities. In 2005, some villages' administrators in Borobudur District also voiced their concerns that the state-owned company had been concentrating tourism within the park without trying to disperse visitors to the nearby villages. Both events indicate that there are some concerns from both the communities and their leaders about the state-owned company's rights to manage tourism in the heritage site. A monitoring mission was carried out by UNESCO's World Heritage Committee and suggested the need to bring more benefits from the heritage site to the wider rural development context (Boccardi et al. 2006). In the last two years (2010 – 2011), however, there are more efforts to improve the livelihoods of rural community in Borobudur, such as through training on the production of snacks and handicrafts. Key organizations in the area with the supports of UNESCO organize these activities. Another recent development is handicraft demo organized by the state-owned company, PT Taman Wisata where handicraft makers participated. Visitors and tourists could even try to create

The fourth principle of sustainable management of cultural resources is the maintenance of diversity. Throsby (2003) stated that diversity of ideas, beliefs, traditions and values would lead to the creation of a more varied culturally valuable artistic works in the future. Artistic works in the form of handicrafts have been flourishing in several villages across Borobudur area with each village having its specialty products. The handicraft industry has been one of the industries that is benefited by tourism in the area and by the flow of information from the outside world that inspires the creation and regeneration of art products while still maintaining their traditional characteristics. Many people working as handicraft makers, however, still expect supports from the organizations involved in the management of the

heritage site and its surrounding areas in the forms of training and access to credits.

The precautionary principle, as the fifth principle, relates closely to the second principle, intergenerational equity. This principle implies that any decision concerning the cultural resources that may lead to irreversible change should be approached with extreme caution. In the case of Borobudur, it is not sufficient to discuss this matter in light of the conservation efforts that are undertaken in the heritage site. Carrying capacity of the temple should always be taken into consideration in managing heritage tourism. In addition, organizations involved in managing the temple and its surrounding must be

Courtesy of Borobudur Heritage Conservation Institute Fig. 4. Communities' puppet show at Borobudur

their own handicrafts during this event.

Non-material well-being relates to the temple's function as a place to worship for Buddhists, a source of pride for the communities, and perhaps a sense of identity – although this last one needs further investigation.

The second principle of intergenerational equity relates directly to preservation and wise utilization of the resources. The restoration of Borobudur Temple began in 1973 and was completed in 1983, under the coordination of UNESCO and involving a national executive agency and an international supervisory committee. A zoning system was then developed, allocating the monument and its surrounding areas into a core conservation zone, a park – designated to accommodate visitors, and surrounding areas in which some regulations are applied. The preservation of the temple is the responsibility of a government agency called Borobudur Heritage Conservation Institute (BHCI), which reports directly to the Central Government. Local government is responsible for managing areas surrounding the park where residents live, whereas a state-owned company manages tourism and recreation inside the recreation park.

With regards to preservation, there are still some problems concerning visitor management. For instance, visitors sometime behave in ways that jeopardize the conservation state that BHCI is trying to maintain. Garbage problem, overcrowding, visitors trying to climb the stupas are some of the daily problems that must be addressed through a better coordination between BHCI and the state-owned company, PT Taman Wisata5.

The third principle, intragenerational equity or fairness in access to cultural resources and to the benefit flowing from them, implies the continuation of multiple uses of cultural resources. This means that heritage sites should not be utilized solely for tourism. However, Millar (2006) argued that universal ownership of WHS by the peoples of the world often results in stressing more on the global interest such as mass tourism at the expense of local people's interest. In the case of Borobudur, the development of Borobudur Recreation Park as an access to the heritage site and as a place to facilitate visitors' needs seems to fulfill global and national interests for conservation, access to the site, and for tourism as an income generator for the country. Survey and interviews that had been done as part of author's study in the area revealed decreasing sense of ownership or feeling of attachment to the site, which may indicate that the exclusive utilization of Borobudur for tourism or tourists is at the expense of other social groups. Indeed the temple does not have much relevance as a place to perform religious rituals for the majority of people living around it who are Muslims. However, old pictures, which are documented by BHCI and stories that are passed down from older generations suggest that a long time ago, Borobudur has been the setting of communities' activities and events. Figure 4 shows puppet (wayang) performed in the field with Borobudur Temple as the background. Nowadays, with fences separating the Borobudur Recreation Park from the communities, Borobudur Temple and its immediate area rarely becomes a place for communities' cultural activities.

Another issue related to the principle of intragenerational equity is the limited impact of tourism that is felt by the communities. This issue has been raised since 2003 when Borobudur was celebrating twentieth anniversary of its restoration (Adishakti 2006). On this occasion, some local community members made a declaration that questioned the role of

<sup>5</sup> The full name of the state-owned company is PT Taman Wisata Candi Borobudur, Prambanan dan Ratu Boko.

Non-material well-being relates to the temple's function as a place to worship for Buddhists, a source of pride for the communities, and perhaps a sense of identity – although this last

The second principle of intergenerational equity relates directly to preservation and wise utilization of the resources. The restoration of Borobudur Temple began in 1973 and was completed in 1983, under the coordination of UNESCO and involving a national executive agency and an international supervisory committee. A zoning system was then developed, allocating the monument and its surrounding areas into a core conservation zone, a park – designated to accommodate visitors, and surrounding areas in which some regulations are applied. The preservation of the temple is the responsibility of a government agency called Borobudur Heritage Conservation Institute (BHCI), which reports directly to the Central Government. Local government is responsible for managing areas surrounding the park where residents live, whereas a state-owned company manages tourism and recreation

With regards to preservation, there are still some problems concerning visitor management. For instance, visitors sometime behave in ways that jeopardize the conservation state that BHCI is trying to maintain. Garbage problem, overcrowding, visitors trying to climb the stupas are some of the daily problems that must be addressed through a better coordination

The third principle, intragenerational equity or fairness in access to cultural resources and to the benefit flowing from them, implies the continuation of multiple uses of cultural resources. This means that heritage sites should not be utilized solely for tourism. However, Millar (2006) argued that universal ownership of WHS by the peoples of the world often results in stressing more on the global interest such as mass tourism at the expense of local people's interest. In the case of Borobudur, the development of Borobudur Recreation Park as an access to the heritage site and as a place to facilitate visitors' needs seems to fulfill global and national interests for conservation, access to the site, and for tourism as an income generator for the country. Survey and interviews that had been done as part of author's study in the area revealed decreasing sense of ownership or feeling of attachment to the site, which may indicate that the exclusive utilization of Borobudur for tourism or tourists is at the expense of other social groups. Indeed the temple does not have much relevance as a place to perform religious rituals for the majority of people living around it who are Muslims. However, old pictures, which are documented by BHCI and stories that are passed down from older generations suggest that a long time ago, Borobudur has been the setting of communities' activities and events. Figure 4 shows puppet (wayang) performed in the field with Borobudur Temple as the background. Nowadays, with fences separating the Borobudur Recreation Park from the communities, Borobudur Temple and its

between BHCI and the state-owned company, PT Taman Wisata5.

immediate area rarely becomes a place for communities' cultural activities.

Another issue related to the principle of intragenerational equity is the limited impact of tourism that is felt by the communities. This issue has been raised since 2003 when Borobudur was celebrating twentieth anniversary of its restoration (Adishakti 2006). On this occasion, some local community members made a declaration that questioned the role of

5 The full name of the state-owned company is PT Taman Wisata Candi Borobudur, Prambanan dan

one needs further investigation.

inside the recreation park.

Ratu Boko.

Courtesy of Borobudur Heritage Conservation Institute Fig. 4. Communities' puppet show at Borobudur

management bodies, especially that of the state-owned company, mandated to manage the recreation park in managing the site and in ensuring tourism benefits for local communities. In 2005, some villages' administrators in Borobudur District also voiced their concerns that the state-owned company had been concentrating tourism within the park without trying to disperse visitors to the nearby villages. Both events indicate that there are some concerns from both the communities and their leaders about the state-owned company's rights to manage tourism in the heritage site. A monitoring mission was carried out by UNESCO's World Heritage Committee and suggested the need to bring more benefits from the heritage site to the wider rural development context (Boccardi et al. 2006). In the last two years (2010 – 2011), however, there are more efforts to improve the livelihoods of rural community in Borobudur, such as through training on the production of snacks and handicrafts. Key organizations in the area with the supports of UNESCO organize these activities. Another recent development is handicraft demo organized by the state-owned company, PT Taman Wisata where handicraft makers participated. Visitors and tourists could even try to create their own handicrafts during this event.

The fourth principle of sustainable management of cultural resources is the maintenance of diversity. Throsby (2003) stated that diversity of ideas, beliefs, traditions and values would lead to the creation of a more varied culturally valuable artistic works in the future. Artistic works in the form of handicrafts have been flourishing in several villages across Borobudur area with each village having its specialty products. The handicraft industry has been one of the industries that is benefited by tourism in the area and by the flow of information from the outside world that inspires the creation and regeneration of art products while still maintaining their traditional characteristics. Many people working as handicraft makers, however, still expect supports from the organizations involved in the management of the heritage site and its surrounding areas in the forms of training and access to credits.

The precautionary principle, as the fifth principle, relates closely to the second principle, intergenerational equity. This principle implies that any decision concerning the cultural resources that may lead to irreversible change should be approached with extreme caution. In the case of Borobudur, it is not sufficient to discuss this matter in light of the conservation efforts that are undertaken in the heritage site. Carrying capacity of the temple should always be taken into consideration in managing heritage tourism. In addition, organizations involved in managing the temple and its surrounding must be

Sustainability in the Management of World Cultural Heritage 439

only on the conservation of physical aspects of the heritage but to other intangible heritage. Conservation related to the physical aspects of the heritage is inherent in the principles of intergenerational equity and precautionary principle. On the other hand the conservation of intangible heritage relates more closely to the intragenerational equity, which allows the continuation of multiple use of the heritage and maintenance of diversity in ideas, beliefs, tradition and values. Communities' access to their heritage, the heritage site's function as a venue for communities' cultural activities will maintain their sense of attachment to the site and will allow the heritage to always function as inspiration of artistic works. The continuous creation and revitalization of artistic works are some of the ways to achieve material well-

being since the artistic works can be used for tourists or visitors consumption.

Fig. 6. Two Reliefs Found in the Walls of Borobudur Temple, One Illustrating Rice Paddy and the Other Illustrating a Farmer with His Cattles. This indicates that agriculture has been

In maintaining cultural systems and recognizing the interdependence amongst elements of the system, it is also paramount to take into account the basic characteristics of local people. The communities in rural Borobudur are basically an agriculture-based society. However, research revealed that tourism has not encouraged the growth in the agriculture sector (Kausar 2001). Agriculture, though still the primary sector in the local economy is growing less than the service sector. Both harvested area and rice production has been decreasing in the Borobudur District. Analysis land use change over the years even pointed out that the conversion of land from rice fields to other purposes accelerated from the mid 1990s, after Borobudur was inscribed in the World Heritage List (Winarni 2006). Leaving out agriculture in a development that is more pursued toward growth in service sector induced by tourism,

It can be concluded from this chapter that the six principles of cultural sustainability is interdependence. The example of Borobudur Temple Compounds World Heritage that is

Courtesy of Borobudur Heritage Conservation Institute

an important sector in the area since many centuries ago.

may threaten the viability of the local cultural system.

**4. Conclusion** 

cautious in determining number of visitors to be targeted. While potential income from tourism is always tempting, the number of visitors that exceeds the carrying capacity will jeopardize the temple's state of conservation. One of the challenges in making decision that adopts the precautionary principle is the fact that each organization involved in the management of the heritage site has differing interests. PT Taman Wisata is more business orientated, while the local government's main interest is contribution of tourism to regional original income, hence it is understandable that two organizations may want more visitors to come in order to raise revenue, profit, and to contribute to local economy. On the other hand, BHCI's as a conservation agency is more concerned about the adverse impact that the visitors may caused to the temple. Having different organizational purposes is a situation that cannot be avoided in a domain where several stakeholders are involved. Therefore improved coordination and collaboration in setting mutual goals while recognizing existing problems is very important (Selin and Beason 1991; Jamal and Getz 1995; Wilson and Boyle 2006).

Courtesy of Candirejo Tourism Village, Borobudur

Fig. 5. Tourism and Cultural Activities in Candirejo Village, Borobudur District

The last principle, maintenance of cultural systems and recognition of interdependence amongst elements of the system, draws together the entire concept of cultural sustainability. Soeroso (2007) and Kausar (2010) suggested that conservation in Borobudur should not focus

cautious in determining number of visitors to be targeted. While potential income from tourism is always tempting, the number of visitors that exceeds the carrying capacity will jeopardize the temple's state of conservation. One of the challenges in making decision that adopts the precautionary principle is the fact that each organization involved in the management of the heritage site has differing interests. PT Taman Wisata is more business orientated, while the local government's main interest is contribution of tourism to regional original income, hence it is understandable that two organizations may want more visitors to come in order to raise revenue, profit, and to contribute to local economy. On the other hand, BHCI's as a conservation agency is more concerned about the adverse impact that the visitors may caused to the temple. Having different organizational purposes is a situation that cannot be avoided in a domain where several stakeholders are involved. Therefore improved coordination and collaboration in setting mutual goals while recognizing existing problems is very important (Selin and Beason 1991; Jamal and

Getz 1995; Wilson and Boyle 2006).

Courtesy of Candirejo Tourism Village, Borobudur

Fig. 5. Tourism and Cultural Activities in Candirejo Village, Borobudur District

The last principle, maintenance of cultural systems and recognition of interdependence amongst elements of the system, draws together the entire concept of cultural sustainability. Soeroso (2007) and Kausar (2010) suggested that conservation in Borobudur should not focus only on the conservation of physical aspects of the heritage but to other intangible heritage. Conservation related to the physical aspects of the heritage is inherent in the principles of intergenerational equity and precautionary principle. On the other hand the conservation of intangible heritage relates more closely to the intragenerational equity, which allows the continuation of multiple use of the heritage and maintenance of diversity in ideas, beliefs, tradition and values. Communities' access to their heritage, the heritage site's function as a venue for communities' cultural activities will maintain their sense of attachment to the site and will allow the heritage to always function as inspiration of artistic works. The continuous creation and revitalization of artistic works are some of the ways to achieve material wellbeing since the artistic works can be used for tourists or visitors consumption.

Courtesy of Borobudur Heritage Conservation Institute

Fig. 6. Two Reliefs Found in the Walls of Borobudur Temple, One Illustrating Rice Paddy and the Other Illustrating a Farmer with His Cattles. This indicates that agriculture has been an important sector in the area since many centuries ago.

In maintaining cultural systems and recognizing the interdependence amongst elements of the system, it is also paramount to take into account the basic characteristics of local people. The communities in rural Borobudur are basically an agriculture-based society. However, research revealed that tourism has not encouraged the growth in the agriculture sector (Kausar 2001). Agriculture, though still the primary sector in the local economy is growing less than the service sector. Both harvested area and rice production has been decreasing in the Borobudur District. Analysis land use change over the years even pointed out that the conversion of land from rice fields to other purposes accelerated from the mid 1990s, after Borobudur was inscribed in the World Heritage List (Winarni 2006). Leaving out agriculture in a development that is more pursued toward growth in service sector induced by tourism, may threaten the viability of the local cultural system.

#### **4. Conclusion**

It can be concluded from this chapter that the six principles of cultural sustainability is interdependence. The example of Borobudur Temple Compounds World Heritage that is

**21** 

**Tourism in Rural Areas:** 

Sandra Maria Correia Loureiro

*University of Aveiro* 

*Portugal* 

**Foundation, Quality and Experience** 

In a post-modern society rural areas and the countryside have grown in both importance and appeal. For this reason, academics and politicians have become interested in understanding the *rural tourism* phenomenon since it was recognized as a development tool of often economically and socially depressed rural areas (e.g., Gilbert, 1989; Blaine & Golan, 1993; Dernoi, 1991; Greffe, 1994; Page & Getz, 1997; Sharpley & Sharpley, 1997; Frochot, 2005). *Rural tourism* is further identified as a potential opportunity to diversify the product portfolio of declining mass tourism destinations (Sharpley, 2002) or to enhance the positioning of these destinations or of countries associated with a comparable image, such

Simultaneously, in the last two decades there has been an increasing tendency for the urban population to choose rural zones for holiday purposes, coinciding with and possibly stimulated by a trend towards splitting holiday periods along the year and an increase in short distance travel (Yagüe, 2002). This market pressure towards the development of new and diversified *rural tourism* products and experiences leads to business opportunities. Together with the chance to integrate these products within a wider economic, social and cultural local and regional basis, they constitute the foundations of the aforementioned

Like urban or seaside tourism, the appeal of *rural tourism* also lies in the range and quality of attractions and facilities. *Rural tourism* should correspondingly adapt to current market mechanisms, which are becoming extremely competitive and are dominated by powerful communication techniques, in a context of strategically developed marketing action

In this vein, the chapter addressed sets out to conceptualize and characterize *rural tourism* in two European Countries (Portugal and Spain), taking into account the principles of quality management and brand quality, as well as tourism experience. The chapter concludes with a proposal for an integrative model of antecedents and outcomes of *rural tourism* experience and quality. The main reason behind the choice of Portugal and Spain lies in the fact that they are pioneers, in particular Portugal, in implementing rural lodging. In fact, the first Manor house or Housing Tourism was launched in 1979 in Covilhã (North Portugal's inland). However, legalization of this type of accommodation only materialized in 1982.

as Portugal, with its "sun and beach" tourism in the Algarve.

development potential (Kastenholz, 2004).

(Moutinho, 1991; Gannon, 1994).

**1. Introduction** 

presented in this chapter suggested that to achieve sustainability, management of a cultural heritage should consider all of the aspects of cultural sustainability. Communities are the actual guardian of the heritage site, thus maintaining communities' sense of ownership and attachment through to the site is crucial for heritage conservation in the long run.

#### **5. References**


### **Tourism in Rural Areas: Foundation, Quality and Experience**

Sandra Maria Correia Loureiro *University of Aveiro Portugal* 

#### **1. Introduction**

440 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

presented in this chapter suggested that to achieve sustainability, management of a cultural heritage should consider all of the aspects of cultural sustainability. Communities are the actual guardian of the heritage site, thus maintaining communities' sense of ownership and

Adishakti, L.T. (2006). Borobudur Heritage Site and Area Management: From temple to

Benhamou, F. (2003). Heritage. In Ruth Towse (ed) A Handbook of Cultural Economics.

Boccardi, Brooks, and Gurung. (2006). Mission Report. Reactive Monitoring Mission to

Drost, A. (1996). Research Notes. Developing sustainable tourism for World Heritage sites.

Jamal, T. and Getz, D. (1995). Collaboration Theory and Community Tourism Planning.

Kausar, D.R.K. (2010). Socio-economic Impacts of Tourism on a World Heritage Site: Case Study of Rural Borobudur, Indonesia. PhD Dissertation. Nagoya: Nagoya University. Leask, A. (2006). World Heritage Designation. In Leask, A. and Fyall, A. (eds) Managing

Li, M., Wu, B., and Cai, L. (2008). Tourism Development of World Heritage Sites in China: A

Millar, S. (2006). Stakeholders and Community Participation. In Leask, A. and Fyall, A. (eds) Managing World Heritage Sites. Oxford: Elsevier Butterworth-Heinemann. Selin, S. and Beason, K. (1991). Interorganizational Relations in Tourism. Annals of Tourism

Soeroso, A. (2006). Valuing Borobudur Heritage Area in a Multi-attribute Framework

Timothy, D.J. and Nyaupane, G.P. (2009). Cultural Heritage and Tourism in the Developing

Throsby, D. (2003). Cultural Sustainability. In Ruth Towse (ed) A Handbook of Cultural Economics. Cheltenham: Edward Elgar Publishing Limited, Cheltenham. Wilson. L. and Boyle, E. (2006). Interorganisational Collaboration at UK World Heritage Sites. Leadership and Organization Development Journal 27(6), pp. 501- 523. Winarni (2006). Assessment of Spatial Changes in Borobudur Temple World Cultural

Environmental Economic Perspective and Its Ecotourism Management Policy Implications. Unpublished PhD Dissertation (in Indonesian). Yogyakarta: Gadjah

World: A Regional Perspective. Contemporary Geographies of Leisure, Tourism

Heritage Site Area. Unpublished Master's Thesis (in Indonesian). Gadjah Mada

saujana heritage and for a better conservation and management of world heritage site. Presentation paper. ICOMOS Indonesia, Indonesian Trust, Center for Heritage Conservation – Department of Architecture & Planning, Gadjah Mada University:

Borobudur Temple Compounds, World Heritage Property, Indonesia (February 18

attachment through to the site is crucial for heritage conservation in the long run.

Cheltenham: Edward Elgar Publishing Limited.

Annals of Tourism Research 23(2): 479-492.

Annals of Tourism Research 22(1): 186-204.

Research 18, pp. 639-652.

University, Yogyakarta.

and Mobility Series. Routledge, Oxon.

Mada University.

World Heritage Sites. Oxford: Butterworth-Heinemann.

Geographic Perspective. Tourism Management 29(2): 308-319.

**5. References** 

Yogyakarta.

– 25, 2006).

In a post-modern society rural areas and the countryside have grown in both importance and appeal. For this reason, academics and politicians have become interested in understanding the *rural tourism* phenomenon since it was recognized as a development tool of often economically and socially depressed rural areas (e.g., Gilbert, 1989; Blaine & Golan, 1993; Dernoi, 1991; Greffe, 1994; Page & Getz, 1997; Sharpley & Sharpley, 1997; Frochot, 2005). *Rural tourism* is further identified as a potential opportunity to diversify the product portfolio of declining mass tourism destinations (Sharpley, 2002) or to enhance the positioning of these destinations or of countries associated with a comparable image, such as Portugal, with its "sun and beach" tourism in the Algarve.

Simultaneously, in the last two decades there has been an increasing tendency for the urban population to choose rural zones for holiday purposes, coinciding with and possibly stimulated by a trend towards splitting holiday periods along the year and an increase in short distance travel (Yagüe, 2002). This market pressure towards the development of new and diversified *rural tourism* products and experiences leads to business opportunities. Together with the chance to integrate these products within a wider economic, social and cultural local and regional basis, they constitute the foundations of the aforementioned development potential (Kastenholz, 2004).

Like urban or seaside tourism, the appeal of *rural tourism* also lies in the range and quality of attractions and facilities. *Rural tourism* should correspondingly adapt to current market mechanisms, which are becoming extremely competitive and are dominated by powerful communication techniques, in a context of strategically developed marketing action (Moutinho, 1991; Gannon, 1994).

In this vein, the chapter addressed sets out to conceptualize and characterize *rural tourism* in two European Countries (Portugal and Spain), taking into account the principles of quality management and brand quality, as well as tourism experience. The chapter concludes with a proposal for an integrative model of antecedents and outcomes of *rural tourism* experience and quality. The main reason behind the choice of Portugal and Spain lies in the fact that they are pioneers, in particular Portugal, in implementing rural lodging. In fact, the first Manor house or Housing Tourism was launched in 1979 in Covilhã (North Portugal's inland). However, legalization of this type of accommodation only materialized in 1982.

Tourism in Rural Areas: Foundation, Quality and Experience 443

In Portugal, *rural tourism* (or TER, which means *tourism in a rural area*) is characterized by an area of scattered and fragmented markets, which include Housing Tourism, Rural Tourism, Agritourism, Country Houses, and Village Tourism. These types or modalities of lodgings share common features: small in size, family-type forms of exploitation, use of existing buildings and structures, situated outside urban centers or in small towns. **Housing Tourism** lodging is made up of manor houses or residences of recognized architectural value, of appropriate size, with a concern for quality furnishings and decor. **Rural Tourism** lodgings are rustic houses typical of the rural area, standing within a settlement or not far away from it. **Agritourism** (farmhouse) shares the particularity of enabling tourists to participate in the farming activities, or complementary forms of animation, enjoyed in the owners' dwelling. **Country Houses** (cottages) are private homes and shelters located in rural areas that provide a hosting service, whether they be used as a dwelling by their owners or not. The fifth type, **Village Tourism**, was recognized in 2001 by the Portuguese General Direction of Tourism, now designated as Turismo de Portugal (TP means Tourism of Portugal). It is characterized by a hosting service provided in a set of at least five private homes within a village and operated in an integrated manner, irrespective of the fact that the home is used as a dwelling by the legitimate owners or not. The Manor house was the first type launched in 1979 in Covilhã (North Portugal's inland). However, legalization of

The number of rural lodgings and accommodation capacity has evolved positively. On average, between 1991 and 2002 the number of lodgings grew at an average recorded rate of 23.7% per year. Although the average annual growth in the number of beds was 30.5%, between 1991 and 1994, it should be noted that there was a more marked variation. In the 2002-2005 period the number of lodgings increased by 21.6% and the number of beds by 15%. In the early Nineties half the number of available beds belonged to Housing Tourism. Figure 1, which displays data from TP (Turismo de Portugal), reveals that the number of rural lodgings remains almost constant at the close of the first decade of the 21th Century.

However, over the last two decades the number of beds related to *rural tourism* has enjoyed a sharper rise. In 2002, the figure stood at 38.1% relative to the number of beds of this modality as compared with 31.4% in the previous period of 1991-1997. In 2005, the relative number of beds regarding Rural Tourism remained constant at 38%. But when it comes to Housing Tourism its relative weight fell to 26.3%. In 2005, Agritourism occupied third place with a relative weight of 17.1%, followed by Country Houses (16.2%) and lastly, Village Tourism (2.4%). With the exception of Village Tourism (previously characterized as being a set of private homes and not specifically the setting of an established unit), the larger lodgings fall under Agritourism, with its average of 12 beds per facility. In 2008, the

The North has been and continues to be the region enjoying the highest accommodation capacity (circa 4600 beds). The Centre occupies second place with circa 2500. Third place goes to the Alentejo, with a supply of circa 1800 beds covering the five types. Data from TP also show that more than two fifths of lodgings, both of Housing Tourism (46.7%) and of Rural Tourism (49.7%), are located in the North. Nearly three fifths of the number of Farmhouse businesses (Agritourism) is divided between the North (32.4%) and the Alentejo (30.3%). Bed and Breakfast facilities are primarily located in the North (28.4%) and Centre (25.0%) and, secondly, in the Azores (19.8%) and Madeira (14.7%). But as the number of

modality of Rural Tourism remained in first place as regards lodging supply.

this type of accommodation was only implemented in 1982.

#### **2. Rural tourism conceptualization**

The reasons that attract people to the rural area have largely to do with the image of rurality, the traditional, romantic idea of a lifestyle that is both plain and simple, the search for peace and solitude, and the increasing interest in free outdoor activities. Thus, the nostalgia for ones origins, the appeal of the most basic aspects of life and the need to restore the old ties with the nature of rural areas prove to be most appealing, especially for those who lead an urban lifestyle, one which is anonymous, congested, highly organized increasingly complex and inhuman (Krippendorf, 1987).

According to EU (European Union) data, one quarter of the EU population moves to the countryside for a holiday. In this way *rural tourism* has been regarded as a factor of tourism development, the enhancement and rebalancing of rural economic and social development, in a word: promoting the sustainability of rural areas. Since joining the European Economic Community in 1986, Portugal and Spain have benefited from programs providing funds to support the development of *rural tourism*. Among programs with the highest incidence on this issue we highlight LEADER I and II. LEADER I figures in the Committee for Agriculture, Fisheries and Rural Development as an alternative for areas affected by the rural community redevelopment Common Agricultural Policy (CAP). The program, developed between 1991 and 1994 signified that a purpose-made local action group would, in an average-sized, previously defined area, develop innovative, integrated programs, approved by the general public. The local group occupies the office of promotion and entertainment, whilst the business area is the ultimate beneficiary of aid. The projects are reviewed by the group itself, which awards and pays aid. Public Administrations play the role of assisting and supervising the program (Mejias, 1995). In June 1994, LEADER II was approved. This program affords Community support in the form of global grants or integrated operational programs to enable the rural actors to undertake changes, in accordance with the following objectives:


Conceptually, *rural tourism* may be regarded as tourism in the countryside, a form that embraces the rural environment as pivotal to the product offered. The Organization for Economic Cooperation and Development (OECD, 1994) defines *rural tourism* as any "tourism taking place in the countryside". In this context, rurality is the "central and unique selling point in the *rural tourism* package" (OECD, 1994, p.15). Lane (1994) suggests that, ideally, *rural tourism* should, apart from being located in rural areas, be functionally rural, small in scale, traditional in character, organically and slowly growing and controlled by the local people.

#### **3. Characterization of rural tourism in portugal**

As an identifying criterion of *rural tourism* in Portugal, it may be said that it is located in a rural area, avails itself of natural factors, social and cultural features specific to each rural area, nature reserves, landscape and the existing values, besides preserving the typical architecture of the site.

The reasons that attract people to the rural area have largely to do with the image of rurality, the traditional, romantic idea of a lifestyle that is both plain and simple, the search for peace and solitude, and the increasing interest in free outdoor activities. Thus, the nostalgia for ones origins, the appeal of the most basic aspects of life and the need to restore the old ties with the nature of rural areas prove to be most appealing, especially for those who lead an urban lifestyle, one which is anonymous, congested, highly organized

According to EU (European Union) data, one quarter of the EU population moves to the countryside for a holiday. In this way *rural tourism* has been regarded as a factor of tourism development, the enhancement and rebalancing of rural economic and social development, in a word: promoting the sustainability of rural areas. Since joining the European Economic Community in 1986, Portugal and Spain have benefited from programs providing funds to support the development of *rural tourism*. Among programs with the highest incidence on this issue we highlight LEADER I and II. LEADER I figures in the Committee for Agriculture, Fisheries and Rural Development as an alternative for areas affected by the rural community redevelopment Common Agricultural Policy (CAP). The program, developed between 1991 and 1994 signified that a purpose-made local action group would, in an average-sized, previously defined area, develop innovative, integrated programs, approved by the general public. The local group occupies the office of promotion and entertainment, whilst the business area is the ultimate beneficiary of aid. The projects are reviewed by the group itself, which awards and pays aid. Public Administrations play the role of assisting and supervising the program (Mejias, 1995). In June 1994, LEADER II was approved. This program affords Community support in the form of global grants or integrated operational programs to enable the rural actors to undertake changes, in

 Acquisition of skills through consultation of the interests of the population concerned; Rural innovation programs which implement projects that contain three basic features: a contributive innovation to the local context, demonstration effect and transferability

Conceptually, *rural tourism* may be regarded as tourism in the countryside, a form that embraces the rural environment as pivotal to the product offered. The Organization for Economic Cooperation and Development (OECD, 1994) defines *rural tourism* as any "tourism taking place in the countryside". In this context, rurality is the "central and unique selling point in the *rural tourism* package" (OECD, 1994, p.15). Lane (1994) suggests that, ideally, *rural tourism* should, apart from being located in rural areas, be functionally rural, small in scale, traditional in character, organically and slowly growing and controlled by the local people.

As an identifying criterion of *rural tourism* in Portugal, it may be said that it is located in a rural area, avails itself of natural factors, social and cultural features specific to each rural area, nature reserves, landscape and the existing values, besides preserving the typical

**2. Rural tourism conceptualization** 

accordance with the following objectives:

**3. Characterization of rural tourism in portugal** 

(Madariaga, 1999).

architecture of the site.

increasingly complex and inhuman (Krippendorf, 1987).

In Portugal, *rural tourism* (or TER, which means *tourism in a rural area*) is characterized by an area of scattered and fragmented markets, which include Housing Tourism, Rural Tourism, Agritourism, Country Houses, and Village Tourism. These types or modalities of lodgings share common features: small in size, family-type forms of exploitation, use of existing buildings and structures, situated outside urban centers or in small towns. **Housing Tourism** lodging is made up of manor houses or residences of recognized architectural value, of appropriate size, with a concern for quality furnishings and decor. **Rural Tourism** lodgings are rustic houses typical of the rural area, standing within a settlement or not far away from it. **Agritourism** (farmhouse) shares the particularity of enabling tourists to participate in the farming activities, or complementary forms of animation, enjoyed in the owners' dwelling. **Country Houses** (cottages) are private homes and shelters located in rural areas that provide a hosting service, whether they be used as a dwelling by their owners or not. The fifth type, **Village Tourism**, was recognized in 2001 by the Portuguese General Direction of Tourism, now designated as Turismo de Portugal (TP means Tourism of Portugal). It is characterized by a hosting service provided in a set of at least five private homes within a village and operated in an integrated manner, irrespective of the fact that the home is used as a dwelling by the legitimate owners or not. The Manor house was the first type launched in 1979 in Covilhã (North Portugal's inland). However, legalization of this type of accommodation was only implemented in 1982.

The number of rural lodgings and accommodation capacity has evolved positively. On average, between 1991 and 2002 the number of lodgings grew at an average recorded rate of 23.7% per year. Although the average annual growth in the number of beds was 30.5%, between 1991 and 1994, it should be noted that there was a more marked variation. In the 2002-2005 period the number of lodgings increased by 21.6% and the number of beds by 15%. In the early Nineties half the number of available beds belonged to Housing Tourism. Figure 1, which displays data from TP (Turismo de Portugal), reveals that the number of rural lodgings remains almost constant at the close of the first decade of the 21th Century.

However, over the last two decades the number of beds related to *rural tourism* has enjoyed a sharper rise. In 2002, the figure stood at 38.1% relative to the number of beds of this modality as compared with 31.4% in the previous period of 1991-1997. In 2005, the relative number of beds regarding Rural Tourism remained constant at 38%. But when it comes to Housing Tourism its relative weight fell to 26.3%. In 2005, Agritourism occupied third place with a relative weight of 17.1%, followed by Country Houses (16.2%) and lastly, Village Tourism (2.4%). With the exception of Village Tourism (previously characterized as being a set of private homes and not specifically the setting of an established unit), the larger lodgings fall under Agritourism, with its average of 12 beds per facility. In 2008, the modality of Rural Tourism remained in first place as regards lodging supply.

The North has been and continues to be the region enjoying the highest accommodation capacity (circa 4600 beds). The Centre occupies second place with circa 2500. Third place goes to the Alentejo, with a supply of circa 1800 beds covering the five types. Data from TP also show that more than two fifths of lodgings, both of Housing Tourism (46.7%) and of Rural Tourism (49.7%), are located in the North. Nearly three fifths of the number of Farmhouse businesses (Agritourism) is divided between the North (32.4%) and the Alentejo (30.3%). Bed and Breakfast facilities are primarily located in the North (28.4%) and Centre (25.0%) and, secondly, in the Azores (19.8%) and Madeira (14.7%). But as the number of

Tourism in Rural Areas: Foundation, Quality and Experience 445

third type called a Rural Hotel (Soret, 1999). As mentioned by Soret (1999), there are other forms of very specific accommodation, sometimes limited to a single autonomous region. Such are the cases of Rural Camping, Rural Tourism Centers or Rural Youth Hostels. The entrepreneurs are mostly rural residents, whose main occupation has been agriculture, livestock breeding or some other profession different from tourism. Before the 80's, Spain did have a traditional form of tourism in rural areas, characterized by second homes and the

The first planned experience in *rural tourism*, which emerged in the 60's of the 20th Century, was named after the program *Vacaciones en Casas de Labranza* (Vacations in Farmhouses) and were intended as a way of revitalizing certain declining rural areas. This program enabled farmers and ranchers to access economic aid with a view to improving their homes and facilities, although it continued to promote this new offer in the marketplace by developing a guide to all Farmhouses. The program lasted several years before disappearing, a victim of a time when the ideal vacation was sun and beach tourism. During that time many townspeople preserved their own homes or ties with rural families, and the intention of many owners who joined the program was purely to

The first consistent experiences of *rural tourism* in Spain resulted from the use of funds provided by the European Economic Community (nowadays, European Union-EU), whose intention is to diversify economic activities in rural areas (Soret, 1999). Application of EU regulations fell to the Ministry of Agriculture of the Autonomous Communities. Initially the development of tourist activities was highly concentrated in certain autonomous regions, namely: the Basque Country, Cataluña and the Balearic Islands. The offer was limited to Agritourism (Farmhouse tourism), i.e. the offer of agro-pastoral and forestry activities, along

In the 1989-1993 period, Spain was, after Ireland, the European Union country to receive most funds for the development of *rural tourism* in the less developed regions and whose GDP (Gross Domestic Product) was less than 75% of the EU average. The EU (European Union) program, Leader I, benefitted 53 rural areas, in particular through the creation and rehabilitation of infrastructure for tourism lodging. Subsequently LEADER II and PRODER (a Spanish venture with similar intentions to LEADER) was approved. These programs also include support for *rural tourism*, although the planned investments were lower than in LEADER I. The agrarian administrations in the autonomous communities in Spain play a key role as regards LEADER II, since they have to bear the main functions of advising, monitoring and supervising the Local Action Groups (Mejias, 1995). They also establish the regulations, the incentive to increase offer through economic aid, and stimulate demand through promotional campaigns. Some governments of the autonomous regions bordering on the coast, conventionally regarded as destinations for sun and beach tourism, saw an opportunity in the rural areas to create a different, diverse tourism market, by associating *rural tourism* with an offer of quality. As an example, Andalucía created Tourist Villas. These accommodations, publicly owned and privately managed, are located near rural and natural

The standards set up by the administrations that were developed enabled Country Houses to be legalized. The first type of *rural tourism* lodging emerged in Catalonia in 1983 with the

use of family homes.

areas of great value.

improve houses for their own use.

with the opportunity for tourists to know more about them.

beds encompassed by this modality is greater, its relative weight in the Alentejo (19.0%) outstrips the center (17.3%) and the Azores (12.8%). Finally, for the years addressed, the month with the highest occupancy rate was August, followed by July. Tourists were almost all of Portuguese origin, and were followed by the Spanish. It is worth noting that English tourists prefer the North whilst German tourists prefer the South.

Fig. 1. Evolution of *rural tourism* accommodation capacity in Portugal

#### **4. Characterization of rural tourism in spain**

In Spain the foundations of this form of tourism are to be found in the 80's of the 20th Century, although its principal development occurred over the 90's - and since then has grown every year. *Rural tourism* has a very different geography to mass tourism of hotels and apart-hotels. The mass tourism of sun and beaches are located along the Mediterranean coast, whereas *rural tourism* spreads to the interior of Spain and is particularly focused on the North, especially in the communities of Cantabria and the Pyrenees. The number of beds for all *rural tourism* lodging represents no more than 2% of the total offer of tourist facilities. Nevertheless, for Spain's image, it is of great strategic value, since its tourist offer becomes more diversified and therefore more attractive.

*Rural tourism* lodgings are defined as establishments or homes *("viviendas*") for tourist accommodation, with or without other ancillary services, and recorded in the corresponding registry of tourism lodging of each Autonomous Community. These lodgings share certain characteristics: they are located in rural areas; they are buildings boasting the architectural typology of the zone or are integrated in farms that maintain active farming and offer a limited number of beds and bedrooms to accommodate guests and meet certain infrastructural and basic equipment requirements.

In Spain there are currently over 30 forms of rural houses in regulated *rural tourism*, although they may be basically grouped into two types of Rural Houses (Cottages) and a

beds encompassed by this modality is greater, its relative weight in the Alentejo (19.0%) outstrips the center (17.3%) and the Azores (12.8%). Finally, for the years addressed, the month with the highest occupancy rate was August, followed by July. Tourists were almost all of Portuguese origin, and were followed by the Spanish. It is worth noting that English

> nº of lodgings nº of beds

1991 1994 1997 2002 2005 2008

In Spain the foundations of this form of tourism are to be found in the 80's of the 20th Century, although its principal development occurred over the 90's - and since then has grown every year. *Rural tourism* has a very different geography to mass tourism of hotels and apart-hotels. The mass tourism of sun and beaches are located along the Mediterranean coast, whereas *rural tourism* spreads to the interior of Spain and is particularly focused on the North, especially in the communities of Cantabria and the Pyrenees. The number of beds for all *rural tourism* lodging represents no more than 2% of the total offer of tourist facilities. Nevertheless, for Spain's image, it is of great strategic value, since its tourist offer becomes

*Rural tourism* lodgings are defined as establishments or homes *("viviendas*") for tourist accommodation, with or without other ancillary services, and recorded in the corresponding registry of tourism lodging of each Autonomous Community. These lodgings share certain characteristics: they are located in rural areas; they are buildings boasting the architectural typology of the zone or are integrated in farms that maintain active farming and offer a limited number of beds and bedrooms to accommodate guests and meet certain

In Spain there are currently over 30 forms of rural houses in regulated *rural tourism*, although they may be basically grouped into two types of Rural Houses (Cottages) and a

Fig. 1. Evolution of *rural tourism* accommodation capacity in Portugal

**4. Characterization of rural tourism in spain** 

more diversified and therefore more attractive.

infrastructural and basic equipment requirements.

tourists prefer the North whilst German tourists prefer the South.

0

2000

4000

6000

8000

10000

12000

14000

third type called a Rural Hotel (Soret, 1999). As mentioned by Soret (1999), there are other forms of very specific accommodation, sometimes limited to a single autonomous region. Such are the cases of Rural Camping, Rural Tourism Centers or Rural Youth Hostels. The entrepreneurs are mostly rural residents, whose main occupation has been agriculture, livestock breeding or some other profession different from tourism. Before the 80's, Spain did have a traditional form of tourism in rural areas, characterized by second homes and the use of family homes.

The first planned experience in *rural tourism*, which emerged in the 60's of the 20th Century, was named after the program *Vacaciones en Casas de Labranza* (Vacations in Farmhouses) and were intended as a way of revitalizing certain declining rural areas. This program enabled farmers and ranchers to access economic aid with a view to improving their homes and facilities, although it continued to promote this new offer in the marketplace by developing a guide to all Farmhouses. The program lasted several years before disappearing, a victim of a time when the ideal vacation was sun and beach tourism. During that time many townspeople preserved their own homes or ties with rural families, and the intention of many owners who joined the program was purely to improve houses for their own use.

The first consistent experiences of *rural tourism* in Spain resulted from the use of funds provided by the European Economic Community (nowadays, European Union-EU), whose intention is to diversify economic activities in rural areas (Soret, 1999). Application of EU regulations fell to the Ministry of Agriculture of the Autonomous Communities. Initially the development of tourist activities was highly concentrated in certain autonomous regions, namely: the Basque Country, Cataluña and the Balearic Islands. The offer was limited to Agritourism (Farmhouse tourism), i.e. the offer of agro-pastoral and forestry activities, along with the opportunity for tourists to know more about them.

In the 1989-1993 period, Spain was, after Ireland, the European Union country to receive most funds for the development of *rural tourism* in the less developed regions and whose GDP (Gross Domestic Product) was less than 75% of the EU average. The EU (European Union) program, Leader I, benefitted 53 rural areas, in particular through the creation and rehabilitation of infrastructure for tourism lodging. Subsequently LEADER II and PRODER (a Spanish venture with similar intentions to LEADER) was approved. These programs also include support for *rural tourism*, although the planned investments were lower than in LEADER I. The agrarian administrations in the autonomous communities in Spain play a key role as regards LEADER II, since they have to bear the main functions of advising, monitoring and supervising the Local Action Groups (Mejias, 1995). They also establish the regulations, the incentive to increase offer through economic aid, and stimulate demand through promotional campaigns. Some governments of the autonomous regions bordering on the coast, conventionally regarded as destinations for sun and beach tourism, saw an opportunity in the rural areas to create a different, diverse tourism market, by associating *rural tourism* with an offer of quality. As an example, Andalucía created Tourist Villas. These accommodations, publicly owned and privately managed, are located near rural and natural areas of great value.

The standards set up by the administrations that were developed enabled Country Houses to be legalized. The first type of *rural tourism* lodging emerged in Catalonia in 1983 with the

Tourism in Rural Areas: Foundation, Quality and Experience 447

nº of lodgings nº of beds

2001 2005 2009

In the early 90's of the 20th century, the economic and political crisis, changes in tastes, the increased demand and new trends in demand and diversification serve as a catalyst in terms of concerns for the quality of tourism businesses. They tended to develop a culture of quality in company management and to use quality tools to improve communication internally, as well as with customers in order to identify their needs and bring the company

Nevertheless, not all the tourism industry has taken advantage of the effort. This initiative requires the deployment of quality in areas of management and human resources to reposition or restructure their businesses in order to increase productivity, improve efficiency and quality of services whilst other businesses exhibit quality only as a cosmetic improvement

The application of quality management in the tourism sector is not without its misgivings and objections, often the result of inertia to change. In this sense, some argue that standardization and certification can be understood as a loss of differentiation and added value of brands. Others argue that this involves an additional burden to the already excessive administrative regulations, in other words, more bureaucracy, beyond the fear of possible interference of public bodies who may not know about the real sector and the

However, management with no regard for the main principles of total quality1 can lead to arbitrariness, abuse, neglect and customer dissatisfaction. The main principles of Total Quality Management are: Leadership (create an environment that ensures its success); Training (regular training since quality-employees should receive regular training in quality methods and concepts); Customer Focus; Decision Making (decisions based on measurements); Methodology and Tools; Continuous Improvement); Company Culture

(work together to improve quality); and Employee Involvement and Empowerment.

or as a panacea for sales. In such cases there are no real, genuine improvements.

Fig. 2. Evolution of *rural tourism* accommodation capacity in Spain

0

**5. Quality in rural tourism** 

constraints of the market.

closer to the tastes and interests of demand.

20000

40000

60000

80000

100000

120000

designation of Residencia Casa-Pagès (Pagès House Residence). Three years later the Aragon Community regulated the mode of Vivenda de Turismo Rural (Villa Rural Tourism). The Basque area was the third region, in the eighties, to follow the footsteps of Catalonia with the Alojamiento turístico-agrícola (Agricultural Tourist Accommodation). This was followed by Navarra (1990), the Balearic Islands and Asturias (1991), Extremadura, Galicia, Murcia and La Rioja (1992), Castilla and León (1993), Castilla-La Mancha and Valencia (1994) and Andalucía (1995).

The growing interest in providing the tourist market segment that embraces the rural interior as an alternative or complement to other destinations led Madariaga (1999) to examine its development from the existing data at international, national (Spain), regional and local level for the year 1994. Fuentes (1995) also conducted an analysis covering 1994 of the key characteristics of demand for *rural tourism* in Spain, through telephone interviews over three months, involving 1466 people living in the different Autonomous Communities. The results of these studies highlight the following:

	- The birthplace or the family residence.
	- The calm, relaxing place
	- The interest in sightseeing, touring, performing outdoor exercises and enjoying the festivals.

Furthermore, data from Spain's National Institute of Statistics (INE) reveal that in 2001 the number of lodgings in *rural tourism* represents a small fraction, i.e. 3.2% (5996) of total lodgings (including hotels, campsites and apartments) and 2% of the total number of "plazas" or beds available. In 2005, there were 9 633 rural lodgings and 83 927 beds (see figure 2).

Over the last two decades, the highest occupancy rate has been July, August, and Holy Week (Easter). The tourists are almost all Spanish, followed by Portuguese and Germans.

designation of Residencia Casa-Pagès (Pagès House Residence). Three years later the Aragon Community regulated the mode of Vivenda de Turismo Rural (Villa Rural Tourism). The Basque area was the third region, in the eighties, to follow the footsteps of Catalonia with the Alojamiento turístico-agrícola (Agricultural Tourist Accommodation). This was followed by Navarra (1990), the Balearic Islands and Asturias (1991), Extremadura, Galicia, Murcia and La Rioja (1992), Castilla and León (1993), Castilla-La Mancha and

The growing interest in providing the tourist market segment that embraces the rural interior as an alternative or complement to other destinations led Madariaga (1999) to examine its development from the existing data at international, national (Spain), regional and local level for the year 1994. Fuentes (1995) also conducted an analysis covering 1994 of the key characteristics of demand for *rural tourism* in Spain, through telephone interviews over three months, involving 1466 people living in the different Autonomous Communities.

The population center with over 100 000 inhabitants and with higher rates of exit to

Tourists from Catalonia and Cantabria use the hotel as the host facility, Aragon tourist

 The hill communities (Aragón, Asturias and Catalonia) and those inland (Andalucía, the Balearic Islands, Cantabria, Castilla-La Mancha, Extremadura and Galicia) are the

1. Given the high percentage of those who have made at least one trip, without considering the residents of urban centers with less than 100 000 inhabitants,

2. Since most tourists made two or more trips to rural areas and 25.6% made three or more

Most tourists belong to the middle and upper social class and have secondary-higher

The interest in sightseeing, touring, performing outdoor exercises and enjoying the

July and August are the months *par excellence* when *rural tourism* is practiced, followed

Most tourists are accommodated in the houses of relatives, or friends, or in second

Furthermore, data from Spain's National Institute of Statistics (INE) reveal that in 2001 the number of lodgings in *rural tourism* represents a small fraction, i.e. 3.2% (5996) of total lodgings (including hotels, campsites and apartments) and 2% of the total number of "plazas" or beds

Over the last two decades, the highest occupancy rate has been July, August, and Holy Week (Easter). The tourists are almost all Spanish, followed by Portuguese and Germans.

available. In 2005, there were 9 633 rural lodgings and 83 927 beds (see figure 2).

rural areas were Catalonia, C. Valencia, Madrid, and the Basque Country.

lodge in Rural Houses, and those of Murcia and Navarre prefer Camping.

Travel to the rural areas tends to be massive, repetitive and heterogeneous

immigrants and foreigners, nor those who travel just for one weekend.

Valencia (1994) and Andalucía (1995).

trips.

The results of these studies highlight the following:

most commonly visited by tourists from rural areas.

3. Because behaviors differ depending on the urban centers

education. Tourists are principally motivated by: The birthplace or the family residence.

The calm, relaxing place

by the period of Holy Week (Easter).

festivals.

homes (homeowners).

Fig. 2. Evolution of *rural tourism* accommodation capacity in Spain

#### **5. Quality in rural tourism**

In the early 90's of the 20th century, the economic and political crisis, changes in tastes, the increased demand and new trends in demand and diversification serve as a catalyst in terms of concerns for the quality of tourism businesses. They tended to develop a culture of quality in company management and to use quality tools to improve communication internally, as well as with customers in order to identify their needs and bring the company closer to the tastes and interests of demand.

Nevertheless, not all the tourism industry has taken advantage of the effort. This initiative requires the deployment of quality in areas of management and human resources to reposition or restructure their businesses in order to increase productivity, improve efficiency and quality of services whilst other businesses exhibit quality only as a cosmetic improvement or as a panacea for sales. In such cases there are no real, genuine improvements.

The application of quality management in the tourism sector is not without its misgivings and objections, often the result of inertia to change. In this sense, some argue that standardization and certification can be understood as a loss of differentiation and added value of brands. Others argue that this involves an additional burden to the already excessive administrative regulations, in other words, more bureaucracy, beyond the fear of possible interference of public bodies who may not know about the real sector and the constraints of the market.

However, management with no regard for the main principles of total quality1 can lead to arbitrariness, abuse, neglect and customer dissatisfaction. The main principles of Total Quality Management are: Leadership (create an environment that ensures its success); Training (regular training since quality-employees should receive regular training in quality methods and concepts); Customer Focus; Decision Making (decisions based on measurements); Methodology and Tools; Continuous Improvement); Company Culture (work together to improve quality); and Employee Involvement and Empowerment.

Tourism in Rural Areas: Foundation, Quality and Experience 449

so on. We can say that when expectations rise, for the same service delivered, the less the

Among all the models developed by academic researchers to measure service quality, the pioneer work of Parasuraman, Zeithaml and Berry (1985, 1988) can be considered as the most popular framework for assessing service quality. Starting with the definition of service quality as the customer's global vision regarding the excellence or superiority of the service, they develop an instrument to measure service quality, namely SERVQUAL, based on a comparison of the previous expectations of the users of the service and their perceptions in relation to the received service. The authors suggest that the reduction or elimination of that

As critics of the SERVQUAL scale, Cronin and Taylor (1992; 1994) proposed the SERVPERF scale, based on performance-only (perception of the result) of the service, without keeping in mind the customers' initial expectations. As for the dimensionality of the service quality construct, Parasunaman, Zeithaml and Berry (1985) propose the existence of five dimensions in their SERVQUAL scale: reliability, responsiveness, empathy, assurance and tangibility. The literature review of the proposed dimensional structures seems to indicate that they differ mainly at aggregation level (Brady and Cronin, 2001). Therefore, some authors mention that service quality is a specific concept of the industry addressed (Babakus and Boller, 1992), suggesting that the number and the nature of the dimensions of service quality are directly related to the service analyzed. In this sense, many researchers have opted to adapt the SERVQUAL scale to the tourist sector or to propose alternative measure scales. In this way, scales for several sectors of business have appeared, such as: LODGSERV for measuring service quality in hotels (Knutson *et al.*, 1990) or LOGQUAL (Getty and Thompson, 1994), or even HOTELQUAL (Falces *et al.*, 1999), DINESERV proposed for restaurants (Stevens *et al.*, 1995), HISTOQUAL for historical houses (Frochot and Hughes,

difference, gap 5, depends on an efficient management of the service firms.

2000) and ECOSERV measuring the quality perceived by eco-tourists (Khan, 2003).

Following this line of research, Loureiro (2006) proposes a scale of 22 items, designated RURALQUAL, based on the SERVQUAL scale of Parasuraman *et al.* (1985, 1988, 1991) for the rural tourist sector, but asks consumers to evaluate performance-only, as proposed by Cronin and Taylor (1992, p. 58-66). The reason supporting this choice was justified by a review of existing studies which appeared to demonstrate the superiority of perception statements only over other existing measures and particularly over the gap measure. Indeed, Cronin and Taylor (1992) demonstrated that the unweighted performance-based measure of service quality (SERVPERF) contributed most to the variation observed in the global measure of service quality. These results have been supported by several other studies (e.g., Armstrong *et al.*, 1997; Suh *et al.,* 1997; Fick & Ritchie, 1991). The use of the performance-only scale is also justified by the dynamic nature of the costumer's expectations and by the increased effort expected of the tourist to complete two questionnaires, one before using the lodging (expectations) and another afterwards (perceptions), which would considerably reduce the number of tourists willing to collaborate in the measure of quality. Table 1 shows the six dimensions of RURALQUAL (see also Loureiro and Miranda, 2008; Loureiro and Miranda, 2009; Loureiro and Kastenhols, 2011). The dimension, called Professionalism, refers to well-presented meals, clean and neat appearance of employees, and their readiness to attend customers in a kind and personalized way. The dimension

perceived quality will be.

Standardization of quality does not mean that every tourist offer should be undifferentiated and homogeneous. Each tourist product, and even each hotel or rural lodging, should have appropriate requirements and mechanisms to achieve customer satisfaction, in a context of continuous improvement. In an environment of market globalization and deregulation, and of increased tourism offer, the frustration of tourist' expectations, which is resolute and informed, leads to a reduction in demand and a loss of competitiveness. Quality is a guarantee of excellence and adds value to products or tourist destinations.

The success of quality policies in rural destinations requires global intervention, i.e., Integrated Quality Management (IQM) at the destination. Thus, each destination will have to define strategies with its key partners to implement good practices and the continuous development of a tool to monitor and evaluate quality in order to adjust the quality policy to the economic, social and environmental context at the destination. Integrated Quality Management has its reference to the European Model for Total Quality- EFQM Excellence Model (European Foundation of Quality Management), which constitutes the basis on which to evaluate companies. However, its merits are focused primarily on the possibility of allowing companies to practice self-assessment and provide organizations with a benchmarking tool. This latter aspect is particularly important as it offers a global comparison of the company with another winner of the Award of Excellence.

#### **5.1 RURALQUAL scale**

Two groups of research have been studying the construct of perceived service quality: the Nordic School and North-American School. The emblematic model of the Nordic School is the Image Model or Perceived Overall Quality (Grönroos, 1990, p. 41), which regards the quality perceived by customers as the result of a comparison of the service image that customers have prior to receiving the service with the image in their mind after experiencing the service. Thus, Grönroos (1990) considers that the quality experienced by a customer is based on two dimensions (technical quality and functional quality), moderated or influenced by the corporate image, which acts as a filter. However, The North-American School (Parasuraman, Zeithaml and Berry, 1988) defines service quality as the customer's assessment of the overall excellence or superiority of the service. The Gaps Model (Parasuraman *et al.*, 1985) proposed four possible gaps that could occur in the process to provide the service. Gap 5 is a function of the four initial gaps, which represents the difference between initial expectations and the perceived service experienced by customers:


Moreover, in both models the service quality perceptions result from a comparison between customer expectations and service performance. The service expectations could influence the image, personal needs, friends' word-of-mouth, firm publicity, own past experience, and

Standardization of quality does not mean that every tourist offer should be undifferentiated and homogeneous. Each tourist product, and even each hotel or rural lodging, should have appropriate requirements and mechanisms to achieve customer satisfaction, in a context of continuous improvement. In an environment of market globalization and deregulation, and of increased tourism offer, the frustration of tourist' expectations, which is resolute and informed, leads to a reduction in demand and a loss of competitiveness. Quality is a

The success of quality policies in rural destinations requires global intervention, i.e., Integrated Quality Management (IQM) at the destination. Thus, each destination will have to define strategies with its key partners to implement good practices and the continuous development of a tool to monitor and evaluate quality in order to adjust the quality policy to the economic, social and environmental context at the destination. Integrated Quality Management has its reference to the European Model for Total Quality- EFQM Excellence Model (European Foundation of Quality Management), which constitutes the basis on which to evaluate companies. However, its merits are focused primarily on the possibility of allowing companies to practice self-assessment and provide organizations with a benchmarking tool. This latter aspect is particularly important as it offers a global

Two groups of research have been studying the construct of perceived service quality: the Nordic School and North-American School. The emblematic model of the Nordic School is the Image Model or Perceived Overall Quality (Grönroos, 1990, p. 41), which regards the quality perceived by customers as the result of a comparison of the service image that customers have prior to receiving the service with the image in their mind after experiencing the service. Thus, Grönroos (1990) considers that the quality experienced by a customer is based on two dimensions (technical quality and functional quality), moderated or influenced by the corporate image, which acts as a filter. However, The North-American School (Parasuraman, Zeithaml and Berry, 1988) defines service quality as the customer's assessment of the overall excellence or superiority of the service. The Gaps Model (Parasuraman *et al.*, 1985) proposed four possible gaps that could occur in the process to provide the service. Gap 5 is a function of the four initial gaps, which represents the difference between initial expectations and the perceived service experienced by customers: GAP 1 - the difference between the customer's expectations and management

GAP 2 - the difference between the firm's quality specifications and management

GAP 3 - is the difference between the quality of the service delivery and quality

GAP 4 - is the difference between the quality of the service delivery and the quality

Moreover, in both models the service quality perceptions result from a comparison between customer expectations and service performance. The service expectations could influence the image, personal needs, friends' word-of-mouth, firm publicity, own past experience, and

perceptions of customer expectations of the service and its quality;

guarantee of excellence and adds value to products or tourist destinations.

comparison of the company with another winner of the Award of Excellence.

**5.1 RURALQUAL scale** 

specifications:

perceptions of customer expectations;

promised in communicating the service.

so on. We can say that when expectations rise, for the same service delivered, the less the perceived quality will be.

Among all the models developed by academic researchers to measure service quality, the pioneer work of Parasuraman, Zeithaml and Berry (1985, 1988) can be considered as the most popular framework for assessing service quality. Starting with the definition of service quality as the customer's global vision regarding the excellence or superiority of the service, they develop an instrument to measure service quality, namely SERVQUAL, based on a comparison of the previous expectations of the users of the service and their perceptions in relation to the received service. The authors suggest that the reduction or elimination of that difference, gap 5, depends on an efficient management of the service firms.

As critics of the SERVQUAL scale, Cronin and Taylor (1992; 1994) proposed the SERVPERF scale, based on performance-only (perception of the result) of the service, without keeping in mind the customers' initial expectations. As for the dimensionality of the service quality construct, Parasunaman, Zeithaml and Berry (1985) propose the existence of five dimensions in their SERVQUAL scale: reliability, responsiveness, empathy, assurance and tangibility. The literature review of the proposed dimensional structures seems to indicate that they differ mainly at aggregation level (Brady and Cronin, 2001). Therefore, some authors mention that service quality is a specific concept of the industry addressed (Babakus and Boller, 1992), suggesting that the number and the nature of the dimensions of service quality are directly related to the service analyzed. In this sense, many researchers have opted to adapt the SERVQUAL scale to the tourist sector or to propose alternative measure scales. In this way, scales for several sectors of business have appeared, such as: LODGSERV for measuring service quality in hotels (Knutson *et al.*, 1990) or LOGQUAL (Getty and Thompson, 1994), or even HOTELQUAL (Falces *et al.*, 1999), DINESERV proposed for restaurants (Stevens *et al.*, 1995), HISTOQUAL for historical houses (Frochot and Hughes, 2000) and ECOSERV measuring the quality perceived by eco-tourists (Khan, 2003).

Following this line of research, Loureiro (2006) proposes a scale of 22 items, designated RURALQUAL, based on the SERVQUAL scale of Parasuraman *et al.* (1985, 1988, 1991) for the rural tourist sector, but asks consumers to evaluate performance-only, as proposed by Cronin and Taylor (1992, p. 58-66). The reason supporting this choice was justified by a review of existing studies which appeared to demonstrate the superiority of perception statements only over other existing measures and particularly over the gap measure. Indeed, Cronin and Taylor (1992) demonstrated that the unweighted performance-based measure of service quality (SERVPERF) contributed most to the variation observed in the global measure of service quality. These results have been supported by several other studies (e.g., Armstrong *et al.*, 1997; Suh *et al.,* 1997; Fick & Ritchie, 1991). The use of the performance-only scale is also justified by the dynamic nature of the costumer's expectations and by the increased effort expected of the tourist to complete two questionnaires, one before using the lodging (expectations) and another afterwards (perceptions), which would considerably reduce the number of tourists willing to collaborate in the measure of quality.

Table 1 shows the six dimensions of RURALQUAL (see also Loureiro and Miranda, 2008; Loureiro and Miranda, 2009; Loureiro and Kastenhols, 2011). The dimension, called Professionalism, refers to well-presented meals, clean and neat appearance of employees, and their readiness to attend customers in a kind and personalized way. The dimension

Tourism in Rural Areas: Foundation, Quality and Experience 451

differentiates the products and can even transfer their identity to consumers in order to involve them. With regard to the firm or company, the brand is a competitive advantage with its own system identity and has commercial value (Aaker, 1996; Kapferer, 1992). A strong brand can sell the product at a higher price and can develop a powerful sense of

In the field of *rural tourism*, the Spanish Tourism Quality Plan (STQ), conceptualized by the Secretary of State for Trade, Tourism and Small and Medium Enterprises (SME) proposes the development of a common methodology for all tourism sub-sectors that are involved in the quality improvement of its products. The plan put into action now, envisages the

1. Support to build systems that ensure the management and quality improvement of goods and services in different sub-sectors in tourism (quality measurement should

2. Support to give rise to a unique brand, the Spanish Tourism Quality brand (the goal is to support recognition of the brand image of Spain as a destination for quality). 3. Support the participation of the Spanish business organizations in the international

According to Navarro (1999), the design of a unique quality identity for the tourism industry signifies the development of a common methodology to offer a similar level of standards, accreditation procedures and certification, and control. The rural lodging that

In Portugal, TURIHAB, a company created in 1983 in Ponte de Lima (the Minho - North of Portugal) by a group of ten owners of rural lodgings, now covers the entire Portuguese territory, with more than 100 rural lodgings, launched a *rural tourism* quality identity. *Solares de Portugal (*Manor Houses*)*. This product, in terms of lodgings, consists of Ancestral Houses (heritage) Farm Houses (Quintas & Herdades) and Rustic Houses. Internationally, TURIHAB promotes rural lodgings and other tourism activities (such as green tours, wine,

**Ancient Houses (heritage)** – Manor houses characterized by a classical architecture, built between the 17th and 18th Century, and houses of heritage value associated with certain periods and movements in history. Ancient houses are filled with ancient furniture and

**Farm Houses** - (Agritourism) are characterized by the existence of a farm, whose main

belonging among employees in a firm or company.

standardization institutions for quality.

Fig. 3. Brand of the Spanish Tourism Quality

refer to the service delivery, facilities and equipment).

achieves the required quality level can employ the "Q" of quality.

paintings and sculptures of famous artists (Housing Tourism).

house could fit into the classical architecture, heritage or rustic character.

following strategies:

and handicrafts).

Reservation includes items reflecting aspects of reservation of the accommodation. The third dimension, referred to as Tangibility, groups items regarding aspects of cleanliness, comfort and acclimatization of rooms, furniture, and other aspects related to the lodging's physical environment. Complementary Benefits includes items referring to the decoration, easy parking and access to the lodging. Rural and Cultural Environment covers items reflecting the possibility of immersion in the region's rural way of life, such as typical gastronomy, fairs, special festivities and other aspects of cultural and recreational interest. Finally, Basic Benefits refers to the natural beauty of the place, the calm setting, the typical architecture, and the employees' awareness of their duties.


Table 1. Dimensions and items of RURALQUAL scale

#### **5.2 Brands for quality in tourism**

According to AMA (2011), a brand can be defined, as "a name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers. The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller. If used for the firm as a whole, the preferred term is trade name". Following such a perspective, a brand adds value for the consumer and the firm, .reduces the perceived risk to purchase the product (good or service), and has a particularly important role when, in advance, it is difficult to evaluate the performance of the product (De Chematony and McDonaid,, 1994). Moreover, a brand, as a reference point, can facilitate recognition and promote customer loyalty. The brand also

Reservation includes items reflecting aspects of reservation of the accommodation. The third dimension, referred to as Tangibility, groups items regarding aspects of cleanliness, comfort and acclimatization of rooms, furniture, and other aspects related to the lodging's physical environment. Complementary Benefits includes items referring to the decoration, easy parking and access to the lodging. Rural and Cultural Environment covers items reflecting the possibility of immersion in the region's rural way of life, such as typical gastronomy, fairs, special festivities and other aspects of cultural and recreational interest. Finally, Basic Benefits refers to the natural beauty of the place, the calm setting, the typical architecture,

> The rural lodging food is well presented and flavoursome. The rural lodging employees have a clean, neat appearance.

Arrival schedules are established but are quite flexible.

The rural lodging facilities are in good condition

The rural lodging has a pleasant temperature. The rural lodging facilities and rooms are clean.

The reservations are confirmed in the most convenient way for the client, other information of interest is also forwarded (e.g. access map).

The rural lodging facilities and rooms have comfortable furniture.

Access to cultural, recreational and/or sports activities is facilitated. In the surrounding region there are fairs, local festivities, and other

The decoration uses materials and objects of local tradition.

The clients are integrated in the region's rural lifestyle. Typical gastronomy of the region is included in the menu.

The lodging employees are aware of their duties. The lodging architecture has the region style.

The lodging is located in a calm place.

The lodging is located in an area of great natural beauty.

According to AMA (2011), a brand can be defined, as "a name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers. The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller. If used for the firm as a whole, the preferred term is trade name". Following such a perspective, a brand adds value for the consumer and the firm, .reduces the perceived risk to purchase the product (good or service), and has a particularly important role when, in advance, it is difficult to evaluate the performance of the product (De Chematony and McDonaid,, 1994). Moreover, a brand, as a reference point, can facilitate recognition and promote customer loyalty. The brand also

The clients are treated cordially and affably. A personalised attention is provided to each client.

Room reservation is easy to make.

Access to the rural lodging is easy. The lodging offers easy parking.

forms of cultural interest.

Table 1. Dimensions and items of RURALQUAL scale

**5.2 Brands for quality in tourism** 

and the employees' awareness of their duties.

Professionalism

Reservation

Tangibility

Complementary Benefits

Rural and Cultural Environment

Basic Benefits

differentiates the products and can even transfer their identity to consumers in order to involve them. With regard to the firm or company, the brand is a competitive advantage with its own system identity and has commercial value (Aaker, 1996; Kapferer, 1992). A strong brand can sell the product at a higher price and can develop a powerful sense of belonging among employees in a firm or company.

In the field of *rural tourism*, the Spanish Tourism Quality Plan (STQ), conceptualized by the Secretary of State for Trade, Tourism and Small and Medium Enterprises (SME) proposes the development of a common methodology for all tourism sub-sectors that are involved in the quality improvement of its products. The plan put into action now, envisages the following strategies:


Fig. 3. Brand of the Spanish Tourism Quality

According to Navarro (1999), the design of a unique quality identity for the tourism industry signifies the development of a common methodology to offer a similar level of standards, accreditation procedures and certification, and control. The rural lodging that achieves the required quality level can employ the "Q" of quality.

In Portugal, TURIHAB, a company created in 1983 in Ponte de Lima (the Minho - North of Portugal) by a group of ten owners of rural lodgings, now covers the entire Portuguese territory, with more than 100 rural lodgings, launched a *rural tourism* quality identity. *Solares de Portugal (*Manor Houses*)*. This product, in terms of lodgings, consists of Ancestral Houses (heritage) Farm Houses (Quintas & Herdades) and Rustic Houses. Internationally, TURIHAB promotes rural lodgings and other tourism activities (such as green tours, wine, and handicrafts).

**Ancient Houses (heritage)** – Manor houses characterized by a classical architecture, built between the 17th and 18th Century, and houses of heritage value associated with certain periods and movements in history. Ancient houses are filled with ancient furniture and paintings and sculptures of famous artists (Housing Tourism).

**Farm Houses** - (Agritourism) are characterized by the existence of a farm, whose main house could fit into the classical architecture, heritage or rustic character.

Tourism in Rural Areas: Foundation, Quality and Experience 453

experience: Sensorial (sense-see, hearing, touch, taste and smell can generate pleasure, excitement, satisfaction, sense of beauty); Emotional (moods, feelings, emotions that can generate affection); Cognitive (related to thinking or conscious mental processes); Pragmatic (resulting from a practical act of doing something); Lifestyle (the system of values and beliefs leads to the adoption of a lifestyle and behaviors); Relational (relationship between a

Customer experience originates from interactions between a customer and a good/service, a company, or part of its organization (LaSalle and Britton, 2003; Shaw and Ivens, 2005) or even a brand. However, customers can relate with other customers during the consumption experience. Therefore, the evaluation depends on the comparison between a customer's

As regards the tourism field, Otto and Ritchie (1996, p. 166) state that the tourist experience "can be described as the subjective mental state felt by participants" implying holistic evaluations of affective expressions and representations of experiential, hedonic and symbolic benefits. The *rural tourism* experience can be regarded in the light of this perspective. Rural tourists come to the countryside to escape urban areas and mass tourism. Thus, the rural experience is the subjective and emotional mental state lived by rural tourists in their interaction with people (friends, family, couple, inhabitants, and service providers)

The process of decision-making and the preparation of *rural tourism* create expectations among potential tourists. The image of *rural tourism* in the tourist's mind prior to each real experience encapsulates the perceptions of *rural tourism* as reflected by the associations (lodging, space, activities, landscape, people, travel, advertising) held in the tourist's memory. So associations are the informational nodes linked to the *rural tourism* mode in

Past experience memories, word-of-mouth, marketing communications (statements, pictures, advertisements posted in destination and lodgings websites; communications in travel agencies, advertisements in newspapers, the radio, TV and so on), and expectations are factors that influence the rural experience. In other words they are precursors of the experience, the pre-experience. In addition, self-expression, attachment to *rural tourism* experience and rural place identity are other constructs that play the role of antecedents of

Self-expression represents the tourist's perception of the degree to which the specific *rural tourism* place or destination enhances one's social self and reflects one's inner self. When the tourist searches for information about a locality, place, rural destination, and lodging, he/she tends to select the place with which he/she identifies himself/herself. The tourist should prefer the rural place that plays a significant role in shaping his/her identity. Thus, tourists tend to identify themselves with rural places that reflect their personality, symbolize the kind of person they are inside, and are consistent with the social group they belong or aspire to.

Attachment per se was first studied in parent-child bonds, but has proven to be a robust theoretical framework for looking at romantic love (Hazan and Zeifman, 1999). In consumer

expectations and the stimuli provided by previously mentioned interactions.

rural places, rural resources, facilities, and rural activities and festivals.

memory and contain the meaning of the rural for tourists.

the *rural tourism* experience and perceived quality.

**7. Integrative model of experience and quality in rural tourism** 

consumer with other people or also with his/her ideal self).

Rustic Houses - are located in rural environment, characterized by using local materials, simple architecture and small size, simple but comfortable furnishings (Rural Tourism).

Fig. 4. Brand of quality of lodgings in rural areas

Following the creation of the brand in Portugal, TURIHAB decided to establish a quality brand at European level, Europe of Traditions. In an initial phase it operated with partner groups in the Netherlands, France, Great Britain and Ireland. Europe of Traditions focuses on personal hospitality and the enjoyment of traditions and culture. Later, Europe of Traditions was extended to Germany, Hungary, and Slovenia. Currently, they are establishing a bridge to Brazil through Europe of Traditions- a transatlantic vision.

#### **6. Rural experience**

The seminal work of Holbrook and Hirschman (1982) offers a new approach to the consumer behavior field, by regarding the consumption experience as a phenomenon directed toward the pursuit of fantasies, feelings and fun. Consumers feel, think, do, and act and emotions play a role in choosing a brand, a store, or a product.

The first decade of the 21st Century marks the appearance of different contributions focused on consumer experience (e.g., Addis and Holbrook, 2001; Carù and Cova, 2003; LaSalle and Britton, 2003; Milligan and Smith, 2002; Ponsonby-Mccabe and Boyle, 2006; Prahalad and Ramaswamy, 2004; Schmitt, 1999; Schmitt, 2003; Shaw and Ivens, 2005; Smith and Wheeler, 2002). Thus, consumer experience is a continuum ranging from experiences that are mainly created by the consumers, to experiences that are developed by companies, passing through experiences that are co-created. In the last situation, companies provide artifacts, contexts, and the right environment to help consumers to create their own experiences (Schmitt, 1999; Carù and Cova, 2003; Carù and Cova, 2007). The consumer molds the artifacts and raw materials to obtain his/her own experience.

In this vein, researchers have been presented with different perspectives of consumer experience with some common dimensions. Schmitt (1999) proposed a model that identifies five experiential facets: sensory experiences (sense); affective experiences (feeling); creative cognitive experiences (thinking); physical experiences, behaviors and lifestyle (acting); and social-identity experiences that result from relating to a reference group or a culture (relating). Fornerino et al. (2006) identify five dimensions of experience: sensorialperceptual, affective and physical-behavioral (i.e., components) and social and cognitive (facets). Later, Gentile, Spiller, and Noci (2007) present six components of consumer

Rustic Houses - are located in rural environment, characterized by using local materials, simple architecture and small size, simple but comfortable furnishings (Rural Tourism).

Following the creation of the brand in Portugal, TURIHAB decided to establish a quality brand at European level, Europe of Traditions. In an initial phase it operated with partner groups in the Netherlands, France, Great Britain and Ireland. Europe of Traditions focuses on personal hospitality and the enjoyment of traditions and culture. Later, Europe of Traditions was extended to Germany, Hungary, and Slovenia. Currently, they are

The seminal work of Holbrook and Hirschman (1982) offers a new approach to the consumer behavior field, by regarding the consumption experience as a phenomenon directed toward the pursuit of fantasies, feelings and fun. Consumers feel, think, do, and act

The first decade of the 21st Century marks the appearance of different contributions focused on consumer experience (e.g., Addis and Holbrook, 2001; Carù and Cova, 2003; LaSalle and Britton, 2003; Milligan and Smith, 2002; Ponsonby-Mccabe and Boyle, 2006; Prahalad and Ramaswamy, 2004; Schmitt, 1999; Schmitt, 2003; Shaw and Ivens, 2005; Smith and Wheeler, 2002). Thus, consumer experience is a continuum ranging from experiences that are mainly created by the consumers, to experiences that are developed by companies, passing through experiences that are co-created. In the last situation, companies provide artifacts, contexts, and the right environment to help consumers to create their own experiences (Schmitt, 1999; Carù and Cova, 2003; Carù and Cova, 2007). The consumer molds the artifacts and raw

In this vein, researchers have been presented with different perspectives of consumer experience with some common dimensions. Schmitt (1999) proposed a model that identifies five experiential facets: sensory experiences (sense); affective experiences (feeling); creative cognitive experiences (thinking); physical experiences, behaviors and lifestyle (acting); and social-identity experiences that result from relating to a reference group or a culture (relating). Fornerino et al. (2006) identify five dimensions of experience: sensorialperceptual, affective and physical-behavioral (i.e., components) and social and cognitive (facets). Later, Gentile, Spiller, and Noci (2007) present six components of consumer

establishing a bridge to Brazil through Europe of Traditions- a transatlantic vision.

and emotions play a role in choosing a brand, a store, or a product.

Fig. 4. Brand of quality of lodgings in rural areas

materials to obtain his/her own experience.

**6. Rural experience** 

experience: Sensorial (sense-see, hearing, touch, taste and smell can generate pleasure, excitement, satisfaction, sense of beauty); Emotional (moods, feelings, emotions that can generate affection); Cognitive (related to thinking or conscious mental processes); Pragmatic (resulting from a practical act of doing something); Lifestyle (the system of values and beliefs leads to the adoption of a lifestyle and behaviors); Relational (relationship between a consumer with other people or also with his/her ideal self).

Customer experience originates from interactions between a customer and a good/service, a company, or part of its organization (LaSalle and Britton, 2003; Shaw and Ivens, 2005) or even a brand. However, customers can relate with other customers during the consumption experience. Therefore, the evaluation depends on the comparison between a customer's expectations and the stimuli provided by previously mentioned interactions.

As regards the tourism field, Otto and Ritchie (1996, p. 166) state that the tourist experience "can be described as the subjective mental state felt by participants" implying holistic evaluations of affective expressions and representations of experiential, hedonic and symbolic benefits. The *rural tourism* experience can be regarded in the light of this perspective. Rural tourists come to the countryside to escape urban areas and mass tourism. Thus, the rural experience is the subjective and emotional mental state lived by rural tourists in their interaction with people (friends, family, couple, inhabitants, and service providers) rural places, rural resources, facilities, and rural activities and festivals.

#### **7. Integrative model of experience and quality in rural tourism**

The process of decision-making and the preparation of *rural tourism* create expectations among potential tourists. The image of *rural tourism* in the tourist's mind prior to each real experience encapsulates the perceptions of *rural tourism* as reflected by the associations (lodging, space, activities, landscape, people, travel, advertising) held in the tourist's memory. So associations are the informational nodes linked to the *rural tourism* mode in memory and contain the meaning of the rural for tourists.

Past experience memories, word-of-mouth, marketing communications (statements, pictures, advertisements posted in destination and lodgings websites; communications in travel agencies, advertisements in newspapers, the radio, TV and so on), and expectations are factors that influence the rural experience. In other words they are precursors of the experience, the pre-experience. In addition, self-expression, attachment to *rural tourism* experience and rural place identity are other constructs that play the role of antecedents of the *rural tourism* experience and perceived quality.

Self-expression represents the tourist's perception of the degree to which the specific *rural tourism* place or destination enhances one's social self and reflects one's inner self. When the tourist searches for information about a locality, place, rural destination, and lodging, he/she tends to select the place with which he/she identifies himself/herself. The tourist should prefer the rural place that plays a significant role in shaping his/her identity. Thus, tourists tend to identify themselves with rural places that reflect their personality, symbolize the kind of person they are inside, and are consistent with the social group they belong or aspire to.

Attachment per se was first studied in parent-child bonds, but has proven to be a robust theoretical framework for looking at romantic love (Hazan and Zeifman, 1999). In consumer

Tourism in Rural Areas: Foundation, Quality and Experience 455

overall emotional and cognitive evaluation or judgment after consumption or experience

Morgan and Hunt (1994, p. 23) define trust as ''confidence in an exchange partners' reliability and integrity''. Therefore, trust is the belief that a party's word or promise is reliable and a party will fulfill its obligation in an exchange relationship. So, the partners could, on the one hand, be the tourist and, on the other hand, the local rural population, entities, and service providers. As Loureiro and Miranda (2008) point out: satisfaction

Loyalty has been regarded as ''a deeply held commitment to re-buy or re-patronize a preferred good/service consistently in the future, thereby causing repetitive same-brand or same brand set purchasing, despite the fact that situational influences and marketing efforts have the potential to cause switching behavior'' (Oliver, 1999, p.34). Several previous studies mention that loyalty may be distinguished among behavioural loyalty, attitudinal loyalty and composite loyalty (considering the aforementioned two constructs). Consequently, in consumer research, the term customer loyalty is often measured by indicators like the "intention to continue buying the same product", "intention to buy more of the same product", and "repeat purchase" (behavioural measures) or "willingness to recommend the product to others" (attitudinal indicator, reflecting product advocacy).Thereby, in the tourism field, behavioural loyalty can be measured as the future likelihood to come back to the destination (Kozak and Rimmington, 2000; Kozak, 2001; Kozak and Beaman, 2006; Yukse, Yukse, and Bilim, 2010; Loureiro and Kastenholz, 2011). Attitudinal loyalty can be regarded as the willingness to recommend the rural place, lodging (Loureiro and

(Bigné et al., 2001; Loureiro and Miranda, 2008; Loureiro and Kastenholz, 2011).

Kastenholz, 2011), or even the experience to others and thus positive advocacy.

and consequences of rural experience and quality in *rural tourism* was proposed.

experience. Thus, the overall image will be positively encoded in their minds.

experience.

**8. Conclusion and implications** 

A favorable experience and a positive service evaluation can lead to a positive overall image. Thus, the overall image in the tourist's mind will be the perceptions about *rural tourism* as reflected by the associations retained in the tourist's memory after living the

In this chapter a literature review was conducted in the field of *rural tourism* regarding characterization of this type of tourism and the presentation of quality, *rural tourism* experience as core concepts. Furthermore, a model showing an overview of the antecedents

This conceptual model will contribute new knowledge to the area of *rural tourism* research. For academic researchers, such knowledge illustrates that the identification with the rural and its characteristics, marketing communication, word-of-mouth, and *rural tourism* attachment can lead to a favorable evaluation of quality and a positive rural experience. When tourists enjoy a good experience, especially if they perceived the experience to be beyond their expectations, then they will be satisfied and trust in the local *rural tourism* population, entities, and facilities, they will be more inclined to return to the place or will try to find a similar *rural tourism*

For rural local official entities, public and private service providers, and even the local population of rural destinations, the anticipated outcomes should offer an insight into the

exercises a positive effect on trust and both influence tourist loyalty.

research, consumer-object bonds have also been widely studied (Kleine, Kleine III, and Allen 1995; Wallendorf and Arnould 1988). Place attachment means an affective bond between people and specific places (Hidalgo and Hernandez, 2001; Williams and Patterson, 1999; Williams and Vaske, 2003) through accumulated experiences in the place (e.g., Stedman, Beckley, Wallace, and Ambard, 2004; Smaldone, Harris, Sanyal, and Lind, 2005; Worster and Abrams, 2005; Ednie, Daigle, and Leahy, 2010).

Fig. 5. Antecedents and consequences of rural experience and quality in *rural tourism*

Place attachment can be regarded as having two distinct dimensions: place identity and place dependence (e.g., Williams et al., 1992; Backlund and Williams, 2003). Therefore, place identity refers to a symbolic or affective attachment to a place. Place dependence can be defined "as a person's assessment of a specific place and the awareness of the facilities and uniqueness and other forms of functionality dependence, and how these can meet the needs and the goals of the tourist" (Hwang, Lee, and Chen, 2005, p.146).

In this vein, attachment to rural experience will be an affective bond or link between the tourist and tourist groups (such as a couple or family), and a *rural tourism* experience. The rural experience involves the rural place, landscape, festivals, rural activities, local population, local official entities, lodgings, restaurants, and other public and private service providers.

Rural tourists who enjoy a good rural experience, perhaps a remarkable one, who favorably evaluate the quality of the place, festivals, rural activities, lodgings, and others facilities will be satisfied. Satisfaction is associated with meeting expectations (through the perception of a "fair service" and the resulting good feeling) (Oliver, 1981). Oliver (1993) demonstrated the existence of significant relationships between positive affective experience (interest and joy) and satisfaction/dissatisfaction responses. Thus, tourist satisfaction can be defined as an

research, consumer-object bonds have also been widely studied (Kleine, Kleine III, and Allen 1995; Wallendorf and Arnould 1988). Place attachment means an affective bond between people and specific places (Hidalgo and Hernandez, 2001; Williams and Patterson, 1999; Williams and Vaske, 2003) through accumulated experiences in the place (e.g., Stedman, Beckley, Wallace, and Ambard, 2004; Smaldone, Harris, Sanyal, and Lind, 2005;

Fig. 5. Antecedents and consequences of rural experience and quality in *rural tourism*

and the goals of the tourist" (Hwang, Lee, and Chen, 2005, p.146).

service providers.

Place attachment can be regarded as having two distinct dimensions: place identity and place dependence (e.g., Williams et al., 1992; Backlund and Williams, 2003). Therefore, place identity refers to a symbolic or affective attachment to a place. Place dependence can be defined "as a person's assessment of a specific place and the awareness of the facilities and uniqueness and other forms of functionality dependence, and how these can meet the needs

In this vein, attachment to rural experience will be an affective bond or link between the tourist and tourist groups (such as a couple or family), and a *rural tourism* experience. The rural experience involves the rural place, landscape, festivals, rural activities, local population, local official entities, lodgings, restaurants, and other public and private

Rural tourists who enjoy a good rural experience, perhaps a remarkable one, who favorably evaluate the quality of the place, festivals, rural activities, lodgings, and others facilities will be satisfied. Satisfaction is associated with meeting expectations (through the perception of a "fair service" and the resulting good feeling) (Oliver, 1981). Oliver (1993) demonstrated the existence of significant relationships between positive affective experience (interest and joy) and satisfaction/dissatisfaction responses. Thus, tourist satisfaction can be defined as an

Worster and Abrams, 2005; Ednie, Daigle, and Leahy, 2010).

overall emotional and cognitive evaluation or judgment after consumption or experience (Bigné et al., 2001; Loureiro and Miranda, 2008; Loureiro and Kastenholz, 2011).

Morgan and Hunt (1994, p. 23) define trust as ''confidence in an exchange partners' reliability and integrity''. Therefore, trust is the belief that a party's word or promise is reliable and a party will fulfill its obligation in an exchange relationship. So, the partners could, on the one hand, be the tourist and, on the other hand, the local rural population, entities, and service providers. As Loureiro and Miranda (2008) point out: satisfaction exercises a positive effect on trust and both influence tourist loyalty.

Loyalty has been regarded as ''a deeply held commitment to re-buy or re-patronize a preferred good/service consistently in the future, thereby causing repetitive same-brand or same brand set purchasing, despite the fact that situational influences and marketing efforts have the potential to cause switching behavior'' (Oliver, 1999, p.34). Several previous studies mention that loyalty may be distinguished among behavioural loyalty, attitudinal loyalty and composite loyalty (considering the aforementioned two constructs). Consequently, in consumer research, the term customer loyalty is often measured by indicators like the "intention to continue buying the same product", "intention to buy more of the same product", and "repeat purchase" (behavioural measures) or "willingness to recommend the product to others" (attitudinal indicator, reflecting product advocacy).Thereby, in the tourism field, behavioural loyalty can be measured as the future likelihood to come back to the destination (Kozak and Rimmington, 2000; Kozak, 2001; Kozak and Beaman, 2006; Yukse, Yukse, and Bilim, 2010; Loureiro and Kastenholz, 2011). Attitudinal loyalty can be regarded as the willingness to recommend the rural place, lodging (Loureiro and Kastenholz, 2011), or even the experience to others and thus positive advocacy.

A favorable experience and a positive service evaluation can lead to a positive overall image. Thus, the overall image in the tourist's mind will be the perceptions about *rural tourism* as reflected by the associations retained in the tourist's memory after living the experience.

#### **8. Conclusion and implications**

In this chapter a literature review was conducted in the field of *rural tourism* regarding characterization of this type of tourism and the presentation of quality, *rural tourism* experience as core concepts. Furthermore, a model showing an overview of the antecedents and consequences of rural experience and quality in *rural tourism* was proposed.

This conceptual model will contribute new knowledge to the area of *rural tourism* research. For academic researchers, such knowledge illustrates that the identification with the rural and its characteristics, marketing communication, word-of-mouth, and *rural tourism* attachment can lead to a favorable evaluation of quality and a positive rural experience. When tourists enjoy a good experience, especially if they perceived the experience to be beyond their expectations, then they will be satisfied and trust in the local *rural tourism* population, entities, and facilities, they will be more inclined to return to the place or will try to find a similar *rural tourism* experience. Thus, the overall image will be positively encoded in their minds.

For rural local official entities, public and private service providers, and even the local population of rural destinations, the anticipated outcomes should offer an insight into the

Tourism in Rural Areas: Foundation, Quality and Experience 457

Dernoi, I. (1991). About Rural and Farm Tourism*. Tourism Recreation Research*, Vol. 16, No. 1,

Ednie, A.J., Daigle, J.J. & Leahy, J.E. (2010). The Development of Recreation Place Attachment

Fick, G. & Ritchie, J. (1991). Measuring service quality in the travel and tourism industry. *Journal of Travel Research*, Vol. 30 (October 1991), pp. 2-9, ISSN 0047-2875 Fornerino, M., Helme-Guizon, A. & de Gaudemaris, C. (2006). Mesurer L'immersion dans

Frochot, I & Hughes, H. (2000). HISTOQUAL: The development of a historic houses assessment scale. *Tourism Management*, Vol. 21, pp. 157-167, ISSN 0261-5177 Frochot, I. (2005). A benefit segmentation of tourists in rural areas: a Scottish perspective.

Fuentes, R. (1995). Análisis de las Principales Características de la Demanda de Turismo Rural en España, *Estudios Turísticos,* No. 127, pp. 19-52, ISSN 0423-5037 Gannon, A. (1994). Rural tourism as a factor in rural community economic development for

Gentile, C., Spiller, N. & Noci, G. (2007). How to Sustain the Customer Experience: An

*European Management Journal,* Vol. 25, No. 5, pp. 395–410, ISSN 0263-2373 Getty, J. M. & Thompson, K. N. (1994). The relationship between quality, satisfaction, and

Gilbert, D. (1989). Rural Tourism and Marketing: Synthesis and New Ways of Working.

Greffe, X. (1994). Is Rural Tourism a Lever for Economic and Social Development? *Journal of* 

Grönroos, C. (1990). *Service Management and Marketing: Managing the Moments of Truth in* 

Hazan, C. & Zeifman, D. (1999). Pair-bonds as attachments: Evaluating the evidence, In:

Shaver (Eds.), pp. 336–354, Guilford, ISBN 1-57230-087-6, New York, USA Hidalgo, M.C. & Hernandez, B. (2001). Place attachment: conceptual and empirical questions. *Journal of Environmental Psychology*, Vol. 21, No. 3, pp. 273-81, ISSN 0272-4944 Holbrook, M.B. & Hirschman, E.C. (1982). The experiential aspects of consumption:

Hwang, S.-N., Lee, C. & Chen, H.-J. (2005). The relationship among tourists' involvement,

Kapferer, J.-N. (1992). *Strategic Brand Management* (1st. Ed.), Kogan Page, ISBN 978-0-7494-

*Tourism Management*, Vol. 10, No. 1, pp. 39–50, ISSN 0261-5177

*Recreation Administration*, Vol. 28, No. 1, pp. 36-51, ISSN 0735-1968

*Tourism Management,* Vol. 26, No. 3, pp. 335-346, ISSN: 0250-8281

*XXIIth Congress de l'AFM*, Nantes, France, May 2006

*Marketing*. Vol. 2, No. 3, pp. 3-22, ISSN 1050-7051

*Sustainable Tourism*, Vol. 2, pp. 23–40, ISSN: 0966-9582

*Management,* Vol. 26, pp. 143–156, ISSN: 0261-5177

on the Maine Coast: User Characteristics and Reasons for Visiting. *Journal of Park and* 

une experience de consommation: Premiers developpements, *Proceedings of the* 

economies transition. *Journal of Sustainable Tourism*, Vol. 1, No. 1-2, pp. 51-60, ISSN:

Overview of Experience Components that Co-create Value With the Customer.

recommending behavior in lodging decisions. *Journal of Hospitality & Leisure* 

*Service Competition*. Lexington Books & Macmillan Inc., ISBN 978-066-9200-35-5,

*Handbook of attachment: Theory, research and clinical applications*, J. Cassidy & P.R.

Consumer fantasy, feelings and fun. *Journal of Consumer Research*, Vol. 9, No. 2, pp.

place attachment an interpretation satisfaction in Taiwan's national parks. *Tourism* 

pp. 3-6, ISSN 0250-8281

0966-9582

Massachusetts, USA

132–140, ISSN 0093-5301

5085-4, London , UK

potential for rural area sustainability to help to provide a good rural experience and offer a good level of service quality.

Future research should test the model on several rural areas in different countries. This comparison between countries should enable one to detect common features, as well as specificities, and refine the model, thus providing a broader insight for both researchers and managers.

#### **9. References**


potential for rural area sustainability to help to provide a good rural experience and offer a

Future research should test the model on several rural areas in different countries. This comparison between countries should enable one to detect common features, as well as specificities, and refine the model, thus providing a broader insight for both researchers

Aaker, D. (1996). *Building Strong Brands,* The Free Press, ISBN 0-02-900151-X, New York,

Addis, M. & Holbrook, M.B. (2001). On the conceptual link between mass customisation and

AMA (2011). http://www.marketingpower.com/\_layouts/Dictionary.aspx?dLetter=B Date

Armstrong, R., Mok, C., Go, F. & Chan, F. (1997). The importance of cross-cultural

Babakus, E. & Boller, G. W. (1992). An empirical assessment of the SERVQUAL scale. *Journal* 

Backlund, E.A. & Williams, D.R. (2003). A Quantitative Synthesis of Place Attachment

Bigné, J., Sanchez, M. & Sanchez, J. (2001). Tourism image, evaluation variables and after

Blaine, T. & Golan, M. (1993). Demand for Rural Tourism: An Exploratory Study. *Annals of* 

Brady, M. K. & Cronin, J. J. (2001). Some new thoughts on conceptualizing perceived service

Carù, A. & Cova, B. (2003). Revisiting consumption experience: A more humble but

Carù, A. & Cova, B. (2007). *Consuming experience*, Routledge, ISBN 0-415-38243-2, London, UK Cronin, J. & Taylor, S. (1992). Measuring Service Quality: A Reexamination and Extension.

Cronin, J. & Taylor, S. (1994). SERVPERF versus SERVQUAL: Reconciling performance-

*Journal of Marketing*, Vol. 58, No.1 (January), pp.125-146, ISSN 0022-2429 de Chematony, L. & McDonald, M. (1994), *Creating powerful brands* (1st. Ed.), Butterworth-

*of Business Research*, Vol. 24, No. 3, pp. 253-268, ISSN 0148-2963

*Tourism Research*, Vol. 20, pp. 770-773, ISSN: 0160-7383

*Journal of Marketing*, Vol.56 (July), pp. 55-68, ISSN 0022-2429

Heinemann, ISBN 978-1-85617-849-5, Oxford, UK

*Behaviour*, Vol. 1, No. 1, pp. 50–66, ISSN 1472-0817

experiential consumption: An explosion of subjectivity. *Journal of Consumer* 

expectations in the measurement of service quality perceptions in the hotel industry. *International Journal of Hospitality Management*, Vol. 16, No. 2, pp. 181-190,

Research: Investigating Past Experience and Place Attachment, paper presented to *North-Eastern Recreation Research Symposium*, Bolton Landing, New York, USA,

purchase behaviour: interrelationship. *Tourism Management*, Vol. 22, No. 6, pp. 607-

quality: a hierarchical approach. *Journal of Marketing*, Vol. 65, (July), pp. 34-49, ISSN

complete view of the concept. *Marketing Theory*, Vol. 3, No. 2, pp. 267–286, ISSN

based and Perceptions-Minus-Expectations Measurement of Service Quality.

good level of service quality.

and managers.

**9. References** 

USA

of access: 08.06.2011

ISSN 0278-4319

April 6-8, 2003

0022-2429

1470-5931

616, ISSN 0261-5177


Tourism in Rural Areas: Foundation, Quality and Experience 459

Navarro, A. (1999). Plan de Calidad Turística Española: antecedentes, desarrollo y puesta en

OECD (1994). *Tourism policy and international tourism in OECD countries 1991-1992,*

Oliver, R. (1981). Measurement and Evaluation of Satisfaction Processes in Retail Settings.

Oliver, R. L. (1993). Cognitive, Affective, and Attribute Bases of the Satisfaction Response.

Oliver, R. (1999). Whence consumer loyalty? *Journal of Marketing*, Vol. 63, pp. 33-44, ISSN

Otto, J. & Ritchie, J. (1995). Exploring the Quality of the Service Experience: A Theoretical

Page, S. J. & Getz, D. (1997). *The Business of Rural Tourism: International Perspectives*. International Thomson Business Press, ISBN 0-415-13511-7, London, UK Parasuraman, A., Zeithaml, V.A. & Berry, L. (1985). A Conceptual model of service quality

Parasuraman, A., Zeithaml, V.A. & Berry, L. (1988). SERVQUAL: A Multiple-item Scale for

Parasuraman, A., Zeithaml, V.A. & Berry, L. (1991). Refinement and Reassessment of the SERVQUAL Scale. *Journal of Retailing*, Vol. 67, No. 4, pp. 420-450, ISSN 0022-4359 Ponsonby-Mccabe, S. & Boyle, E. (2006). Understanding brands as experiential spaces:

Prahalad, C.K. & Ramaswamy, V. (2004). Co-Creation Experiences: The Next Practice in

Schmitt, B. H. (1999). *Experiential marketing: How to get customers to sense feel think act relate to your company and brands*, The Free Press, ISBN 0-684-85423-6, New York, USA Schmitt, B.H. (2003). *Customer Experience Management: A Revolutionary Approach to Connecting with Your Customer*, Wiley and Sons, ISBN 0-471-23774-4, New Jersey, USA Sharpley, R. & Sharpley, J. (1997). *Rural tourism: An introduction*. International Business

Sharpley, R. (2002). Rural tourism and the challenge of tourism diversification: the case of

Shaw, C. & Ivens, J. (2005). *Building Great Customer Experiences*, Palgrave Macmillan , ISBN 1-

Smaldone, D., Harris, C. C., Sanyal & N., Lind, D. (2005). Place attachment and management

Smith, S. & Wheeler, J. (2002). *Managing the Customer Experience*. Prentice Hall, ISBN

of critical park issues in Grand Teton National Park. *Journal of Park and Recreation*

Cyprus. *Tourism Management*, Vol. 23, pp. 233-244, ISSN 0261-5177

*Administration*, Vol. 23, No. 1, pp. 90-114, ISSN 0735-1968

Organization for Economic Co-Operation and Development, ISBN 9-26414-091-3,

*Journal of Consumer Research*, Vol. 20, (December 1993), pp. 418-430, ISSN: 0093-5301

and Empirical Analysis, *Advances in Service Marketing and Management*, Vol. 4, pp.

and its implications for future research. *Journal of Marketing*, Vol. 49, (Fall 1985), pp.

Measuring Consumer Perceptions of Service Quality. *Journal of Retailing*, Vol. 64,

Axiological implications for marketing strategists. *Journal of Strategic Marketing*,

Value Creation. *Journal of Interactive Marketing*, Vol. 18, No. 3, pp. 5–14, ISSN 1094-

marcha. *Estudios Turísticos*, No. 139, pp. 5-14, ISSN 0423-5037

*Journal of Retailing*, Vol. 57, (Fall 1981), pp. 25-48, ISSN: 0022-4359

Paris, France

0022-2429

9968

Press, London, UK

403-93949-7, New York, USA

0273661957, London, UK

37-61, ISSN 1067-5671

41-50, ISSN 0022-2429

(Spring 1988), pp. 12-40, ISSN 0022-4359

Vol. 14, No. 2, pp. 175–189, ISSN 0965-254X


Kastenholz, E. (2004). «Management of Demand» as a Tool in Sustainable Tourist

Khan, M. (2003). ECOSERV: Ecotourists' Quality Expectations, *Annals of Tourism Research*,

Kleine, S. S., Kleine, R. E. III, & Allen, C. T. (1995). How Is a Possession "Me" or "Not Me"?

Knutson, B., Stevens, P., Wullaert, C., Patton, M. & Yokoyama, F. (1990). The Service

Kozak, M. (2001). Repeaters' behavior at two distinct destinations. *Annals of Tourism* 

Kozak, M. & Beaman, J. (2006). Relationship between customer satisfaction and loyalty.

Krippendorf, J. (1987). *Pour une Nouvelle Compréhension des Loisirs et des Voyages*,

Lane, B. (1994). What is rural tourism?. *Journal of Sustainable Tourism,* Vol. 2, No. 1-2, pp. 7–

LaSalle, D. & Britton, T.A. (2003). *Priceless: Turning ordinary products into extraordinary experiences*, Harvard Business School Press, ISBN 1-578-51746-X, Boston, USA Loureiro, S. M. C. & Miranda González, F. J. (2008). The Importance of Quality, Satisfaction,

Loureiro, S. M. C & Miranda González, F. J. (2009). Perceived Quality in Rural lodgings in

Loureiro, S. M. C. & Kastenholz, E. (2011). Corporate reputation, satisfaction, delight, and

*Management*, Vol. 30, No. 3 (September 2011), pp. 575–583, ISSN: 0278-4319 Madariaga, J. G. (1999). Desarrollo del Turismo Rural, In: *Turismo-organización administrativa,* 

Mejias, F. (1995). El Turismo Rural como factor de desarrollo regional, *Seminaria: El* 

Milligan, A. & Smith, S. (2002). *Uncommon Practice: People Who Deliver a Great Brand Experience Harlow*, Financial Times Prentice Hall, ISBN 0-273-65936-7, London, UK Morgan, R. M. & Hunt, S. D. (1994). The commitment- trust theory of relationship marketing. *Journal of Marketing*, Vol. 58, No. 3, pp. 20-38, ISSN 0022-2429 Moutinho, L. (1991). Strategies for Tourism Destination Development: an Investigation of the

Trust, and Image in Relation to Rural Tourist Loyalty. *Journal of Travel & Tourism* 

Spain and Portugal: the RURALQUAL scale. *Portuguese Journal of Management* 

loyalty towards rural lodging units in Portugal. *International Journal of Hospitality* 

*calidad de servicios y competitividad empresarial*, D. Blanquer (Ed.), pp. 569-601, Tirant

*Agroturismo como actividad complementaria de la renta agraria en Extremadura*, ISBN 8-

Role of Small Businesses, In: *Marketing Tourism Places,* Ashworth, G. & Goodall, B., (Eds.), pp. 104-122, Routledge, ISBN 978-041-5038-10-2, London/ New York, USA

*Hospitality Research Journal*, Vol. 14, No. 2, pp. 413-420, ISSN 0741-5095 Kozak, M. & Rimmington, M. (2000). Tourist satisfaction with Mallorca, Spain, as an off-

ISSN: 0966-9582

ISSN 0047-2875

21, ISSN 0966-9582

Lo Blanch, Valencia, Spain

Vol. 30, No. 1, pp. 109-124, ISSN 0160-7383

*Research*, Vol. 28, No. 3, pp. 785–808, ISSN: 0160-7383

L`Harmattan, ISBN 2-85802-739-0, Paris, France

*Studies*, Vol. 14, No. 1, pp. 33-52, ISSN 0872-5284

46009-309-3, Badajoz, Spain, October 19-20, 1995

*Tourism Analysis*, Vol. 11, No. 6, pp. 397–409, ISSN: 1083-5423

*Marketing*, Vol. 25, No. 2, (2008), pp. 117-136, ISSN 1054-8408

Destination Development. *Journal of Sustainable Tourism*, Vol. 12, No. 5, pp. 388-408,

Characterizing Types and an Antecedent of Material Possession Attachment. *Journal of Consumer Research,* Vol. 22, No. 3 (December), pp. 327-343, ISSN 0093-5301

Scoreboard: a service quality measurement tool for the hospitality industry.

season Holiday Destination. *Journal of Travel Research,* Vol. 39, No. 3, pp. 259–268,


**22** 

*Greece* 

**Islands and Tourism Development: A Viewpoint** 

Kostas Rontos1, Eleni Kitrinou1, Dimitrios Lagos2 and Mihail Diakomihalis2

When discussing about island economies and societies, one is always troubled as to the definition and measurement of an "island". In terms of definition, the word *island* relates to the old French loanword *isle*, which itself comes from the Latin word *insula*1. In terms of measurement, the main components of an island seem to be "*smallness*" and "*remoteness*". Because of these components, unique development problems arise in island economies and

*Smallness* can be defined in terms of the physical size (land area), population and GNP (or GDP), or a combination of these variables as attempted by Kakazu (1994), depending upon the purpose of the analysis. *Remoteness*, due to the discontinuity of the geographical space, seems to be the most distinguishable characteristic of all island societies. Kakazu (2007) suggested that, the measurement of an island has to take into consideration additional factors, like "isolation", "migration", and "external sources of income (especially *tourism*)", in

It is noted that the Island Regions of the European Union drafted a Manifesto (2005) that pursued an objective, set in motion by Article 158 of the Treaty of Amsterdam (which article assigned particular importance to reduction of the backwardness of less favoured regions as a means to achieve the goals of economic and social cohesion). They suggested that effective consideration of the *handicaps* faced by EU Island Regions (like: isolation from larger markets, seasonality, loss of high quality human resources, and other structural problems), must be transformed into specific political actions and clear legal provisions, fully integrated in the system of European decisions. They emphasised that the competitive integration of the insular regions is appropriate, in compliance with the framework foreseen by the Lisbon

There is, however, a number of characteristics of island areas, which can be considered as *advantages* over larger areas, such as that: a) they can be model cases for a zero-emission

1 Dictionary.com. http://dictionary.reference.com/browse/Island. Retrieved 2007-03-05.

societies, especially if they are located far from their major markets.

order to better understand, analyse and classify island areas.

Process, based on the advantages of the areas in question.

**1. Introduction** 

**of Tourism Stakeholders of Lesvos Island** 

*2Department of Business Administration, University of the Aegean Chios* 

*3Department of Accounting, Technological Educational Institute of Epirus, Preveza* 

*1Department of Sociology, University of the Aegean* 

*Andromedas & Theofrastou, Mytilene* 


### **Islands and Tourism Development: A Viewpoint of Tourism Stakeholders of Lesvos Island**

Kostas Rontos1, Eleni Kitrinou1, Dimitrios Lagos2 and Mihail Diakomihalis2 *1Department of Sociology, University of the Aegean Andromedas & Theofrastou, Mytilene 2Department of Business Administration, University of the Aegean Chios 3Department of Accounting, Technological Educational Institute of Epirus, Preveza Greece* 

#### **1. Introduction**

460 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

Soret, P. (1999). Turismo Rural y de Naturaleza, In: *50 años del Turismo Español: un análisis* 

Stedman, R. C., Beckley, T., Wallace, S. & Ambard, M. (2004). A picture and 1000 words:

places. *Journal of Leisure Research,* Vol. 36, No. 4, pp. 580-606, ISSN 0022-2216 Stevens, P., Knutson, B. & Paton, M. (1995). Dineserv: A Tool for Measuring Service Quality

Suh, S., Lee, Y., Park, Y. & Shin, G. (1997). The impact of consumer involvement on the

Williams, D. R. & Patterson, M. E. (1999). Environmental psychology: Mapping landscape

Williams, D. R. & Vaske, J. J. (2003). The measurement of place attachment: validity and

Worster, A. M. & Abrams, E. (2005). Sense of place among New England commercial

Yagüe Perales, R. (2002). Rural Tourism in Spain. *Annals of Tourism Research*, Vol. 29, pp.

Yuksel, A., Yuksel, F. & Bilim, Y. (2010). Destination attachment: Effects on customer

Zeithaml, V.A. & Bitner, M.J. (2003). *Services Marketing* (3rd. Ed.), McGraw-Hill, ISBN 0-071-

Estudios Ramón Areces, ISBN 978-848-5942-88-6, Madrid, Spain

*Research*, Vol. 14, No. 4 (March), pp. 531-547, ISSN 0093-5301

pp. 56-60, ISSN 0010-8804

8,Champaign,IL,USA

840, ISSN 0015-749X

525-535, ISSN 1350-4622

1101-1110, ISSN 0160-7383

19914-4, Chicago, IL, USA

31, pp. 274–284, ISSN 0261-5177

*histórico y estructural*, E. Gómez-Luengo San Román, F. Bayón Mariné, M.C. Alonso Sutil & M.A. González De Souza, (Eds.), cap. 31, pp. 721-736, Editorial Centro de

Using resident-employed photography to understand attachment to high amenity

in Restaurants. *Cornell Hotel and Restaurant Administration Quarterly*, Vol. 36, No. 2,

consumers' perception of service quality-focusing on the Korean hotel industry. *Journal of Travel and Tourism Marketing*, Vol. 6, No. 2, pp. 33-52, ISSN 1054-8408 Wallendorf, M. & Arnold, E. J. (1988). My Favorite Things: A Cross-Cultural Inquiry into

Object Attachment, Possessiveness, and Social Linkage. *Journal of Consumer* 

meanings for ecosystem management. In: *Integrating social sciences with ecosystem management: Human dimensions in assessment, policy and management,* H. K. Cordell and J. C. Bergstrom (Eds.), pp. 141-160, Sagamore Press, ISBN 1-571-67247-

generalizability of a psychometric approach. *Forest Science,* Vol. 49, No. 6, pp. 830-

fishermen and organic farmers: implications for socially constructed environmental education. *Environmental Education Research*, Vol. 11, No. 5, pp.

satisfaction and cognitive, affective and conative loyalty. *Tourism Management,* Vol.

When discussing about island economies and societies, one is always troubled as to the definition and measurement of an "island". In terms of definition, the word *island* relates to the old French loanword *isle*, which itself comes from the Latin word *insula*1. In terms of measurement, the main components of an island seem to be "*smallness*" and "*remoteness*". Because of these components, unique development problems arise in island economies and societies, especially if they are located far from their major markets.

*Smallness* can be defined in terms of the physical size (land area), population and GNP (or GDP), or a combination of these variables as attempted by Kakazu (1994), depending upon the purpose of the analysis. *Remoteness*, due to the discontinuity of the geographical space, seems to be the most distinguishable characteristic of all island societies. Kakazu (2007) suggested that, the measurement of an island has to take into consideration additional factors, like "isolation", "migration", and "external sources of income (especially *tourism*)", in order to better understand, analyse and classify island areas.

It is noted that the Island Regions of the European Union drafted a Manifesto (2005) that pursued an objective, set in motion by Article 158 of the Treaty of Amsterdam (which article assigned particular importance to reduction of the backwardness of less favoured regions as a means to achieve the goals of economic and social cohesion). They suggested that effective consideration of the *handicaps* faced by EU Island Regions (like: isolation from larger markets, seasonality, loss of high quality human resources, and other structural problems), must be transformed into specific political actions and clear legal provisions, fully integrated in the system of European decisions. They emphasised that the competitive integration of the insular regions is appropriate, in compliance with the framework foreseen by the Lisbon Process, based on the advantages of the areas in question.

There is, however, a number of characteristics of island areas, which can be considered as *advantages* over larger areas, such as that: a) they can be model cases for a zero-emission

<sup>1</sup> Dictionary.com. http://dictionary.reference.com/browse/Island. Retrieved 2007-03-05.

Islands and Tourism Development: A Viewpoint of Tourism Stakeholders of Lesvos Island 463

Tourism, according to the neoclassical theory of comparative cost, is considered to be integrated into the international labour division system among countries that are more or less developed, i.e. countries that produce industrial products of a high added value and countries the economies of which are based on the production of raw materials, where natural resources are more likely to support tourism development. Consequently, in a free trade environment and based on the principle of the comparative advantage which supports that each region specialises in the manufacture of products that utilise to the maximum those factors available in abundance in the particular region, those destination countries that are less advanced are driven, in terms of their roles as tourism flow destinations, to a

According to the production factor theory developed by Heckscher (1949) and Ohlin (1933), in order for a country to commence a productive process, several necessary factors must be available, which are different for each country or region. The production and sale of tourism products and services is, to a particular extent, labour intensive, whereas the production of industrial products is capital intensive. Thus, industrialised countries or regions with a higher concentration of capital tend to specialise in the production of capital goods, whereas

Contrary to the most orthodox theories of international trade, which presuppose a given offer and focus more on the offer side, the neoclassical theory focuses on the demand side. The theory of demand for a differentiated product between cooperating countries was first proposed by Linder (1961), who pointed out that the international specialisation of a country is to a great degree dependent on internal demand. According to Linder, the development of international tourism is the result of conditions that are created by internal tourism. The comparative advantage of a country stems from the quality of its superstructure and infrastructure, its tourism know-how, its technological level and its natural environment.

The New Economic Geography (Krugman 2001, Rovolis 2002) proposes that in the liberalisation of trade some regions present a particular "threshold" of activity concentration; once they have gone beyond that threshold, however, concentration becomes self-feeding, since businesses in these regions gain important profits, due to the centripetal forces. As a result of this, some regions continue to attract activities and some others keep losing them. Therefore, tourism activity can be easily integrated in this new theoretical approach, due to its "tourism urbanisation" characteristic (Lagos 2001), which favours local

As far as sustainable tourism is concerned, there is a theory supporting that it is possible for all forms of tourism to be transformed into sustainable ones, if they follow the principles of sustainable or viable development (WTO 1993). The term "viable" tourism development describes the type of a well-balanced tourism development adjusted to local social, economic, cultural and environmental structures of each tourist destination, whereas at the same time it also shapes the conditions (services, infrastructure, know-how) for its continuous progress (Kokkosis & Tsartas, 2001). However, practice has shown that mass tourism cannot coexist with sustainable tourism development. These are two diametrically opposed forms of tourism, since viable tourism development automatically means rejection

specialisation of their tourism products (Lagos 1998:55-57, Lagos 2005:105).

developing countries or regions tend to render services, such as tourism.

or regional development.

of mass tourism.

**2. Theoretical frame of tourism development** 

society (Kakazu, 2007), b) they could be benefited from the developments on the sector of Information and Communication Technologies (ICTs) which have the potential to increase the accessibility of insular regions (Kitrinou, 2009), and c) the main advantage of the island areas seems to relate to the fact that, they have enormous potential to develop a *tourism industry,* which is a future-oriented industry and it is becoming the most important source of foreign exchange income for insular regions.

Referring to Greece, island space constitutes an economic, social, cultural and strategic resultant of its national substance and heritage. Roughly 15% of the Greek population lives in the islands, which cover the 19% of the country's land. All over Greece, but especially in the Aegean Archipelago, there are numerous small and medium-sized inhabited islands. For most of them, the basic economic activity for the past three decades has been tourism, which has influenced not only the economic life of the islands, but also their population structure and environmental conditions (Coccossis, 2001; Haralambopoulos and Pizam, 1996; Loukissas, 1982; Mantoglou et al., 1998). Tourism has helped to halt economic problems and population losses through the creation of new jobs, which to an extent balanced the loss of jobs in agriculture and manufacturing, and through increases in the domestic product and income (Coccossis, 2001; Lagos & Gkrimpa, 2000). The fact that many people are occupied in the tourism sector led to population growth and to a reduction of the out-migration rate that had been very high in the Aegean Islands over previous decades (Sophoulis & Assonitis, 1998).

In the aforementioned framework, this paper focuses on the advantage of tourism development, suggesting that tourism industry is becoming the most important source of income and employment for the local economy, especially for island regions. It emphasises that tourism constitutes important factor of regional development, especially in Greece, with positive contribution in the country's economic development and social cohesion, while the Greek islands have enormous potential to develop specific tourism policies, based on their characteristics and comparative advantages. The case of Lesvos Island is considered in detail, in order to investigate the extent to which the tourism stakeholders of the island are willing and able to take the initiative in implementing tourism development policies and investing in tourism projects, based on the EU general development policies for island regions. Also, through the survey results we are going to explore: a) potential statistically significant relationships between the characteristics of the enterprises or the characteristics of the entrepreneurs referring to their beliefs about the development of both sustainable and mass tourism models at the island and b) the factors that are a part of the entrepreneurs' *perceived satisfaction from both the basic and the tourist infrastructure in Lesvos Island.* 

The remaining of the paper is organised as follows: In section 2 a theoretical framework is proposed, highlighting a number of significant features concerning the role and relationship of the public authorities and tourism entrepreneurs in the determination of tourism policy in insular regions. Section 3 presents the specific tourism characteristics of Lesvos Island. Section 4 presents the empirical survey design for the island in question and analyses the collected data. The final section 5 concludes the paper and proposes developmental policies for the island of Lesvos, concerning both the effective tourism policy framework and the appropriate tourism infrastructure and investments in the island.

#### **2. Theoretical frame of tourism development**

462 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

society (Kakazu, 2007), b) they could be benefited from the developments on the sector of Information and Communication Technologies (ICTs) which have the potential to increase the accessibility of insular regions (Kitrinou, 2009), and c) the main advantage of the island areas seems to relate to the fact that, they have enormous potential to develop a *tourism industry,* which is a future-oriented industry and it is becoming the most important source of

Referring to Greece, island space constitutes an economic, social, cultural and strategic resultant of its national substance and heritage. Roughly 15% of the Greek population lives in the islands, which cover the 19% of the country's land. All over Greece, but especially in the Aegean Archipelago, there are numerous small and medium-sized inhabited islands. For most of them, the basic economic activity for the past three decades has been tourism, which has influenced not only the economic life of the islands, but also their population structure and environmental conditions (Coccossis, 2001; Haralambopoulos and Pizam, 1996; Loukissas, 1982; Mantoglou et al., 1998). Tourism has helped to halt economic problems and population losses through the creation of new jobs, which to an extent balanced the loss of jobs in agriculture and manufacturing, and through increases in the domestic product and income (Coccossis, 2001; Lagos & Gkrimpa, 2000). The fact that many people are occupied in the tourism sector led to population growth and to a reduction of the out-migration rate that had been very high in

In the aforementioned framework, this paper focuses on the advantage of tourism development, suggesting that tourism industry is becoming the most important source of income and employment for the local economy, especially for island regions. It emphasises that tourism constitutes important factor of regional development, especially in Greece, with positive contribution in the country's economic development and social cohesion, while the Greek islands have enormous potential to develop specific tourism policies, based on their characteristics and comparative advantages. The case of Lesvos Island is considered in detail, in order to investigate the extent to which the tourism stakeholders of the island are willing and able to take the initiative in implementing tourism development policies and investing in tourism projects, based on the EU general development policies for island regions. Also, through the survey results we are going to explore: a) potential statistically significant relationships between the characteristics of the enterprises or the characteristics of the entrepreneurs referring to their beliefs about the development of both sustainable and mass tourism models at the island and b) the factors that are a part of the entrepreneurs' *perceived satisfaction from both the basic and the tourist* 

The remaining of the paper is organised as follows: In section 2 a theoretical framework is proposed, highlighting a number of significant features concerning the role and relationship of the public authorities and tourism entrepreneurs in the determination of tourism policy in insular regions. Section 3 presents the specific tourism characteristics of Lesvos Island. Section 4 presents the empirical survey design for the island in question and analyses the collected data. The final section 5 concludes the paper and proposes developmental policies for the island of Lesvos, concerning both the effective tourism policy framework and the

appropriate tourism infrastructure and investments in the island.

the Aegean Islands over previous decades (Sophoulis & Assonitis, 1998).

foreign exchange income for insular regions.

*infrastructure in Lesvos Island.* 

Tourism, according to the neoclassical theory of comparative cost, is considered to be integrated into the international labour division system among countries that are more or less developed, i.e. countries that produce industrial products of a high added value and countries the economies of which are based on the production of raw materials, where natural resources are more likely to support tourism development. Consequently, in a free trade environment and based on the principle of the comparative advantage which supports that each region specialises in the manufacture of products that utilise to the maximum those factors available in abundance in the particular region, those destination countries that are less advanced are driven, in terms of their roles as tourism flow destinations, to a specialisation of their tourism products (Lagos 1998:55-57, Lagos 2005:105).

According to the production factor theory developed by Heckscher (1949) and Ohlin (1933), in order for a country to commence a productive process, several necessary factors must be available, which are different for each country or region. The production and sale of tourism products and services is, to a particular extent, labour intensive, whereas the production of industrial products is capital intensive. Thus, industrialised countries or regions with a higher concentration of capital tend to specialise in the production of capital goods, whereas developing countries or regions tend to render services, such as tourism.

Contrary to the most orthodox theories of international trade, which presuppose a given offer and focus more on the offer side, the neoclassical theory focuses on the demand side. The theory of demand for a differentiated product between cooperating countries was first proposed by Linder (1961), who pointed out that the international specialisation of a country is to a great degree dependent on internal demand. According to Linder, the development of international tourism is the result of conditions that are created by internal tourism. The comparative advantage of a country stems from the quality of its superstructure and infrastructure, its tourism know-how, its technological level and its natural environment.

The New Economic Geography (Krugman 2001, Rovolis 2002) proposes that in the liberalisation of trade some regions present a particular "threshold" of activity concentration; once they have gone beyond that threshold, however, concentration becomes self-feeding, since businesses in these regions gain important profits, due to the centripetal forces. As a result of this, some regions continue to attract activities and some others keep losing them. Therefore, tourism activity can be easily integrated in this new theoretical approach, due to its "tourism urbanisation" characteristic (Lagos 2001), which favours local or regional development.

As far as sustainable tourism is concerned, there is a theory supporting that it is possible for all forms of tourism to be transformed into sustainable ones, if they follow the principles of sustainable or viable development (WTO 1993). The term "viable" tourism development describes the type of a well-balanced tourism development adjusted to local social, economic, cultural and environmental structures of each tourist destination, whereas at the same time it also shapes the conditions (services, infrastructure, know-how) for its continuous progress (Kokkosis & Tsartas, 2001). However, practice has shown that mass tourism cannot coexist with sustainable tourism development. These are two diametrically opposed forms of tourism, since viable tourism development automatically means rejection of mass tourism.

Islands and Tourism Development: A Viewpoint of Tourism Stakeholders of Lesvos Island 465

Sfakianakis (2009). They mainly suggest that Greece is still a middle and low-class summer seaside tourist destination, attracting tourists rather from Europe than from Northern America or Asia, while Greek tourists are the ones who have reinforced high-class tourism, due to income increases and their preference for short but qualitative holidays. Furthermore, an analysis about the specific characteristics of the Greek islands and a classification of them

Lesvos Island is the third largest island in Greece (in both land and population size) belongs to the Region of Northern Aegean. The capital of the island is Mitilini that pinpoints the economic growth of the island from the 18th century. Its castle was one of the most powerful in the eastern Mediterranean. It is also noted that the central offices of the Ministry of Aegean, the Regional Authority of Northern Aegean and the Rectorate of University of the Aegean are located at Mytilni. Island's coastline forms two bays in the south - Geras and Kallonis - and a plethora of creeks and capes. The main plains are those of Kalloni, Ippeos, Perama and Eressos and the highest mountains are Lepetymnos, Olympos. Generally the flora and fauna of the island are extremely rich. Today, 1,400 taxa (species and sub-species) of plants have been recorded on the island making Lesvos a "botanic paradise": aromatic, pharmaceutical, ornamental and rare plants, bushes and trees. The island has innumerable beaches to satisfy all its visitors, like Vatera, Varia, Agios Isidoro, Skala Eresou, Molyvos, Thermi and Anaxo. The coastal settlements that are notable for their particular colour are Molyvos (Mithymna) and Plomari with their architecture and natural beauty. Equally notable and peaceful is Sigri with

with regards to the charter arrivals can be found at Spilanis et al (2006).

its petrified forest. A map of Lesvos is following presented:

http://www.lesvosonline.gr/lesvos\_gr/Map/maps/map\_rd.htm)

The climate of Lesvos is mild and healthy: the winter is warm and the sun shines throughout the year. Lesvos is one of the forested islands of the Aegean, apart from the olives groves found everywhere; pines, oaks, chestnuts etc cover a great proportion of its land. The local economy is based on the agricultural production with an emphasis on olive oil production (of exceptionally high quality), cattle-raising (mainly dairy products) and fishing. Additionally, distillery is developed and its main product is the world famous uzo. It is also noted that many of the island's inhabitants are professionally engaged in tourism. The number of hotels and accommodation units has grown significantly in the last three decades. Molyvos is the main tourist place which maintains the market share in quality units, as each hotel is attaining a grade B from the Hellenic National Tourist Organization.

Map 1. Lesvos island (copyright:

Over the past few years, the model of mass tourism experienced a declining yield, both on an international level and in Greece, a fact indicating that the mass consumption of tourism products and services has reached its limit. Tourism industry intensification on numerous islands as well as in coastal areas has brought not only various benefits, but also a series of concerns and problems related especially to tourist destinations bearing a special ecological value.

Today, this model of tourism development experiences a recession. The life cycle theory (Butler 1980) can be useful as an interpretational tool of the crisis of the 4S (Sun, Sand, Sea, Sex) and the "sun lust" model. The life cycle of the product often seems to correspond to the development of tourism product and the democratisation of vacations, where tourism demand addresses lower and lower income classes and is depicted by the 4S model. Therefore the beginning of the crisis can be combined with the crisis of the "4S model". The democratisation of tourism tends to address parts of the population whose income gradually decreases. This process can be made possible due to higher productivity profits attributed to tourism becoming more of a mass activity. Productivity profits have the characteristic of reducing inflexible costs by means of certain artificial factors, such as the use of charter flights and the low-cost accommodation.

Coastal vacation tourism as the traditional development model, no longer satisfies the new demands of tourists. A clear proof of the above is the slow increase in the number of tourists visiting the Mediterranean countries, as well as the low occupancy rates of hotel accommodations.

In the case of a crisis of the structural type, mainly a product of economic concurrence, it is proposed to seek for a long-term model for tourism development, which shall focus on the promotion of quality against quantity and differentiation against homogenisation. So, in juxtaposition to the 4S a new model called 4E is proposed, which stems directly from tourist demands and the tourism product of the region receiving the tourists. This focuses on the following four variables (Varvaresos, 2009):


The proposed tourism development model is now a main strategy for a large number of countries so that they can have access to the "new tourism". The essential difference when compared to the earlier model lies in the general concept related to tourism in the receiving country. Tourism is characterised as an industry, often even as a heavy industry, and thus it requires a great degree of planning.

#### **3. Factors facilitating tourism development of lesvos island**

Greece attracts more than 16 million tourists each year, thus contributing 15% to the nation's Gross Domestic Product Economy. The number of jobs directly or indirectly related to the tourism industry represents the 16.5% of the country's total employment (copyriright: http//:www.statistics.gr). A detailed analysis about the basic variables that represent the development of tourism in Greece during the period 1999–2002 can be found at: Rontos and

Over the past few years, the model of mass tourism experienced a declining yield, both on an international level and in Greece, a fact indicating that the mass consumption of tourism products and services has reached its limit. Tourism industry intensification on numerous islands as well as in coastal areas has brought not only various benefits, but also a series of concerns and problems related especially to tourist destinations bearing a

Today, this model of tourism development experiences a recession. The life cycle theory (Butler 1980) can be useful as an interpretational tool of the crisis of the 4S (Sun, Sand, Sea, Sex) and the "sun lust" model. The life cycle of the product often seems to correspond to the development of tourism product and the democratisation of vacations, where tourism demand addresses lower and lower income classes and is depicted by the 4S model. Therefore the beginning of the crisis can be combined with the crisis of the "4S model". The democratisation of tourism tends to address parts of the population whose income gradually decreases. This process can be made possible due to higher productivity profits attributed to tourism becoming more of a mass activity. Productivity profits have the characteristic of reducing inflexible costs by means of certain artificial factors, such as the

Coastal vacation tourism as the traditional development model, no longer satisfies the new demands of tourists. A clear proof of the above is the slow increase in the number of tourists visiting the Mediterranean countries, as well as the low occupancy rates of hotel

In the case of a crisis of the structural type, mainly a product of economic concurrence, it is proposed to seek for a long-term model for tourism development, which shall focus on the promotion of quality against quantity and differentiation against homogenisation. So, in juxtaposition to the 4S a new model called 4E is proposed, which stems directly from tourist demands and the tourism product of the region receiving the tourists. This focuses on the

The proposed tourism development model is now a main strategy for a large number of countries so that they can have access to the "new tourism". The essential difference when compared to the earlier model lies in the general concept related to tourism in the receiving country. Tourism is characterised as an industry, often even as a heavy industry, and thus it

Greece attracts more than 16 million tourists each year, thus contributing 15% to the nation's Gross Domestic Product Economy. The number of jobs directly or indirectly related to the tourism industry represents the 16.5% of the country's total employment (copyriright: http//:www.statistics.gr). A detailed analysis about the basic variables that represent the development of tourism in Greece during the period 1999–2002 can be found at: Rontos and

**3. Factors facilitating tourism development of lesvos island** 

special ecological value.

accommodations.

use of charter flights and the low-cost accommodation.

following four variables (Varvaresos, 2009):

Educational tourism, culture and history

Environment and clean nature

requires a great degree of planning.

 Events and mega events Entertainment and fun.

Sfakianakis (2009). They mainly suggest that Greece is still a middle and low-class summer seaside tourist destination, attracting tourists rather from Europe than from Northern America or Asia, while Greek tourists are the ones who have reinforced high-class tourism, due to income increases and their preference for short but qualitative holidays. Furthermore, an analysis about the specific characteristics of the Greek islands and a classification of them with regards to the charter arrivals can be found at Spilanis et al (2006).

Lesvos Island is the third largest island in Greece (in both land and population size) belongs to the Region of Northern Aegean. The capital of the island is Mitilini that pinpoints the economic growth of the island from the 18th century. Its castle was one of the most powerful in the eastern Mediterranean. It is also noted that the central offices of the Ministry of Aegean, the Regional Authority of Northern Aegean and the Rectorate of University of the Aegean are located at Mytilni. Island's coastline forms two bays in the south - Geras and Kallonis - and a plethora of creeks and capes. The main plains are those of Kalloni, Ippeos, Perama and Eressos and the highest mountains are Lepetymnos, Olympos. Generally the flora and fauna of the island are extremely rich. Today, 1,400 taxa (species and sub-species) of plants have been recorded on the island making Lesvos a "botanic paradise": aromatic, pharmaceutical, ornamental and rare plants, bushes and trees. The island has innumerable beaches to satisfy all its visitors, like Vatera, Varia, Agios Isidoro, Skala Eresou, Molyvos, Thermi and Anaxo. The coastal settlements that are notable for their particular colour are Molyvos (Mithymna) and Plomari with their architecture and natural beauty. Equally notable and peaceful is Sigri with its petrified forest. A map of Lesvos is following presented:

Map 1. Lesvos island (copyright: http://www.lesvosonline.gr/lesvos\_gr/Map/maps/map\_rd.htm)

The climate of Lesvos is mild and healthy: the winter is warm and the sun shines throughout the year. Lesvos is one of the forested islands of the Aegean, apart from the olives groves found everywhere; pines, oaks, chestnuts etc cover a great proportion of its land. The local economy is based on the agricultural production with an emphasis on olive oil production (of exceptionally high quality), cattle-raising (mainly dairy products) and fishing. Additionally, distillery is developed and its main product is the world famous uzo. It is also noted that many of the island's inhabitants are professionally engaged in tourism.

The number of hotels and accommodation units has grown significantly in the last three decades. Molyvos is the main tourist place which maintains the market share in quality units, as each hotel is attaining a grade B from the Hellenic National Tourist Organization.

Islands and Tourism Development: A Viewpoint of Tourism Stakeholders of Lesvos Island 467

island. Other tourist facilities, like hospitals, banks, sports and transport (bus) facilities play

The island is also rich in religious buildings. There are many monasteries, which exhibit various icons. Of special importance are the old picturesque villages, e.g. Molyvos, and the traditional industries, like olive oil production, ouzo production, leather, and wood carving and pottery industries. Archaeological sites, folk and art museums, Byzantine castles and

A case study concerning the sustainable tourism development at Lesvos Island has been developed by Nijkamp and Verdonkschot (1995). They focused on various sustainable tourism development options, developing a framework applicable to the island in question. This framework included and analysed the following options: exclusive tourism; agritourism; health tourism; adventure/sports-tourism; sea-tourism; cultural-tourism; winter tourism; educational tourism. Then, based on a system's impact analysis, they evaluated the impacts of these options to be: economic, human (or social) and natura1 (or environmental).A set of feasible impact indicators (economic, social and environmental) in the context of Lesvos Island was derived (an application of such impact indicators can be

In summary, it is noted that the attractions of the island seem to play an important role in its tourism development. The Mediterranean climate, the many beaches and bays, the beautiful landscape, and the size of the island offer the advantage of versified tourism with many options. Perhaps this is the reason that, until today, the tourism development of the islands is based on the 4S (sun; sand; sea; sex) and on the "sun lust" model. Nevertheless, the island has enormous potential to additionally develop its tourism product on the basis of a sustainable, 4E (Environment and clean nature; Educational tourism, culture and history; Event and mega event; Εntertainment and fun) model for tourism. In this case, specific tourism developmental policies and plans, together with the appropriate investments will

The empirical study considers the case of Lesvos Island. The aim was to define the tourism entrepreneurs' perceptions about tourism development in the island and to investigate the extent to which the tourism entrepreneurs of the island are willing and able to take the initiative in implementing tourism development policies and investing in tourism projects. A structured questionnaire developed and addressed to entrepreneurs– owners of small sized businesses that are managed by the owners or by a responsible executive in the case of larger businesses (Hotels, Tourism Offices, Restaurants, Cafes, Bars, Tourist Shops, Tourist Boats, etc.). The questionnaire included four parts: the first part concerned about the characteristics of the sample enterprises; the second one about the demographic characteristics of the responded entrepreneurs; at the third part two perceptual scales were developed, referring to the degree of satisfaction of the respondents with regards to basic (port, airport, hospital, marines etc) and tourism infrastructure at the island in question; and the last part of the questionnaire included questions referring to attitudes and perceptions of the entrepreneurs about the application of the 4S band the 4E tourism models at Lesvos Island, and the appropriate policies for sustainable tourism development at the island.

cathedrals, ancient theatres, and Roman aqueducts can also be visited.

found in: Bithas and Nijkamp, 1995; Coccossis et al., 1991; Janssen et al., 1993).

a complementary role at tourist services.

be required.

**4. Data and method** 

In other areas the quality of accommodation tends to be more diversified, while also more lower class accommodation can be found. The average utilization rate of accommodation is low for the island due to the short effective tourist season (June - September). The Graphs 1 and 2 following present the number of beds in hotel lodgings at Lesvos Island and the number of arrivals of foreigners and Greek tourists at the island respectively, during the period 1980- 2009. We can note that the number of beds in hotel lodgings has been continuously increasing within the last three decades. The same increasing trend is noted at the arrivals of both foreigners and Greek tourists, while the number of foreigner tourists at the island is much greater than the number of Greeks, especially from year 1982 and on, which indicates the increasing demand for Lesvos, as a tourism destination, especially from the foreigners.

Graph 1. Number of beds in hotel lodgings at Lesvos Island, during the period 1980-2009

Graph 2. Number of arrivals of foreigners and Greek tourists at Lesvos Island, during the period 1980-2009

It is additionally noted that support services for tourism (such as tourism agencies, tour guides, vehicle rent shops and souvenir shops) are not yet very wel1 developed on the island. Other tourist facilities, like hospitals, banks, sports and transport (bus) facilities play a complementary role at tourist services.

The island is also rich in religious buildings. There are many monasteries, which exhibit various icons. Of special importance are the old picturesque villages, e.g. Molyvos, and the traditional industries, like olive oil production, ouzo production, leather, and wood carving and pottery industries. Archaeological sites, folk and art museums, Byzantine castles and cathedrals, ancient theatres, and Roman aqueducts can also be visited.

A case study concerning the sustainable tourism development at Lesvos Island has been developed by Nijkamp and Verdonkschot (1995). They focused on various sustainable tourism development options, developing a framework applicable to the island in question. This framework included and analysed the following options: exclusive tourism; agritourism; health tourism; adventure/sports-tourism; sea-tourism; cultural-tourism; winter tourism; educational tourism. Then, based on a system's impact analysis, they evaluated the impacts of these options to be: economic, human (or social) and natura1 (or environmental).A set of feasible impact indicators (economic, social and environmental) in the context of Lesvos Island was derived (an application of such impact indicators can be found in: Bithas and Nijkamp, 1995; Coccossis et al., 1991; Janssen et al., 1993).

In summary, it is noted that the attractions of the island seem to play an important role in its tourism development. The Mediterranean climate, the many beaches and bays, the beautiful landscape, and the size of the island offer the advantage of versified tourism with many options. Perhaps this is the reason that, until today, the tourism development of the islands is based on the 4S (sun; sand; sea; sex) and on the "sun lust" model. Nevertheless, the island has enormous potential to additionally develop its tourism product on the basis of a sustainable, 4E (Environment and clean nature; Educational tourism, culture and history; Event and mega event; Εntertainment and fun) model for tourism. In this case, specific tourism developmental policies and plans, together with the appropriate investments will be required.

#### **4. Data and method**

466 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

In other areas the quality of accommodation tends to be more diversified, while also more lower class accommodation can be found. The average utilization rate of accommodation is low for the island due to the short effective tourist season (June - September). The Graphs 1 and 2 following present the number of beds in hotel lodgings at Lesvos Island and the number of arrivals of foreigners and Greek tourists at the island respectively, during the period 1980- 2009. We can note that the number of beds in hotel lodgings has been continuously increasing within the last three decades. The same increasing trend is noted at the arrivals of both foreigners and Greek tourists, while the number of foreigner tourists at the island is much greater than the number of Greeks, especially from year 1982 and on, which indicates the

increasing demand for Lesvos, as a tourism destination, especially from the foreigners.

Graph 1. Number of beds in hotel lodgings at Lesvos Island, during the period 1980-2009

Graph 2. Number of arrivals of foreigners and Greek tourists at Lesvos Island, during the

It is additionally noted that support services for tourism (such as tourism agencies, tour guides, vehicle rent shops and souvenir shops) are not yet very wel1 developed on the

period 1980-2009

The empirical study considers the case of Lesvos Island. The aim was to define the tourism entrepreneurs' perceptions about tourism development in the island and to investigate the extent to which the tourism entrepreneurs of the island are willing and able to take the initiative in implementing tourism development policies and investing in tourism projects. A structured questionnaire developed and addressed to entrepreneurs– owners of small sized businesses that are managed by the owners or by a responsible executive in the case of larger businesses (Hotels, Tourism Offices, Restaurants, Cafes, Bars, Tourist Shops, Tourist Boats, etc.). The questionnaire included four parts: the first part concerned about the characteristics of the sample enterprises; the second one about the demographic characteristics of the responded entrepreneurs; at the third part two perceptual scales were developed, referring to the degree of satisfaction of the respondents with regards to basic (port, airport, hospital, marines etc) and tourism infrastructure at the island in question; and the last part of the questionnaire included questions referring to attitudes and perceptions of the entrepreneurs about the application of the 4S band the 4E tourism models at Lesvos Island, and the appropriate policies for sustainable tourism development at the island.

Islands and Tourism Development: A Viewpoint of Tourism Stakeholders of Lesvos Island 469

The 4S (sun, sea, sand, sex) model of tourism (corresponding to mass tourism) together to the 4E ((Environment, Education, Event, Entertainment). model of tourism were presented to the respondents. It is found that the majority of the sample entrepreneurs (52%) believe that the tourism development of Lesvos Island could partially be based on mass tourism (the 4S model), the 20% believe that the tourism development of the island could completely be based on mass tourism, while a percentage of 28% of the entrepreneurs stated that the development of tourism has not at all to be based on the model of mass tourism. The results

Graph 3. Stakeholders' perceptions about the tourism model of 4S in Lesvos Island

The entrepreneurs who believe that the tourism development of the island could completely be based on mass tourism (20% of the respondents), stated that this could be possible via mainly the improvement of the transport system of the wider Aegean Island area, together to improvements at the tourist services provided by the entrepreneurs, and the public (social) services (mainly health services, administration, telecommunications). They also

Additionally, the 96.2% of the totality of the sample believe that the 4E model of tourism has to be combined to the development of alternative types of tourism in Lesvos Island. To the question how likely are they (in the frame of their enterprises) to make investments in order to improve the 4E model of tourism at the island, the majority (42%) answered "likely".

It is additionally noted that 32% of the entrepreneurs stated that they would extend their company, 27% that they would develop new tourist enterprises, another 29% stated that they would make investments with regards to the human capital of the company (education, additional staff), while the remaining focused at the improvement of the services they currently provide (including the investment in telecommunications infrastructure)

Graph 5 presents the percentages of the respondents who believe that Lesvos Island has enormous potential to develop the following alternative types of tourism (agri-tourism-54,8%, ecotourism- 45,2%, religion tourism-61,5%, medical tourism- 3,1%, cruise/yachting-

**5.2 Stakeholders' perceptions about the tourism models** 

are presented in the following graph:

emphasised the role of the State financing.

61,5%).

Graph 4 presens the frequencies of the relevant likelihood.

The regional entrepreneurs register was used as a sampling frame and the systematic sampling method were implemented to collect data from 104 entrepreneurs activated in tourism sector. The survey took place during April and May of 2010. Well trained enumerators were employed for the data collection.

As concern as statistical analysis, a Crosstab-based Statistical Method (based on Chi-sq. tests) was firstly applied to identify statistically significant relationships between the characteristics of the enterprises or the characteristics of the entrepreneurs referring to their beliefs about the two models of tourism considered (4S and 4E tourism models). Following, a multiple step process is conducted (including reliability and factor analysis) to identify the factors that are a part of the *Perceived satisfaction from both the basic and the tourist infrastructure at Lesvos Island.*

The results are presented in the following paragraphs.

#### **5. Results**

#### **5.1 Sample characteristics**

#### **Characteristics of the sample enterprises**

In the survey sample, the 31,7% of the enterprises are located at the municipality of Mytilene, the 34,6% at the municipality of Mithimna (Molyvos, which is the most touristic place of the Island, and the whole North Aegean region), another 10,6% are located at the municipality of Kalloni, the 9,6% at the municipality of Agiasos, the 7,7% at Thermi, while the remaining 5,8% at Plomari. With regards to the type of the sample enterprises, it is noted that 47,1% are restaurants/café/bar, 15,4% are hotels, 4,8% are rooms for renting, 7,7% are travel agencies, 8,7% are enterprises for renting cars or motos and the 16,3% are shops with traditional products. Referring to the legal type of the companies, the majority (67,3%) are personal enterprises. The 73,1% of the sample companies are family enterprises (the employees are members of the same family). It is also noted that the 59,6% of the companies are open continually (all the seasons of the year), and the 40,4% are open seasonally (specifically in summer time), while the average years that the sample companies are operating is 14, 35 years (st. dev. 13,7years).

#### **Characteristics of the sample entrepreneurs**

The socioeconomic characteristics of the sample entrepreneurs are the following: 58,7% of the respondents are male, while the remaining 41,3% are female. The average age of the survey respondents is 44 years (st. dev. 11 years). Referring to the educational level, the majority of the respondents have a secondary education level (35,6%), following by those having a graduate degree (27,9%), (30%) and by those having a basic education level (27%), a professional diploma (8,7%) and postgraduate degree (1%). Additionally, from those having a graduate degree, the 42% their degree is relevant to tourism. Referring to the totality of the sample, a percentage of 48% have been educated in seminars relevant to tourism. The vast majority of the sample entrepreneurs (67%) believe that the role of the state constraints the development of their tourism company, mainly due to the role of the transport system at the specific island area, deficiencies in basic public services, and lack of advertisement/ promotion of the tourist product of the island in question.

#### **5.2 Stakeholders' perceptions about the tourism models**

468 Visions for Global Tourism Industry – Creating and Sustaining Competitive Strategies

The regional entrepreneurs register was used as a sampling frame and the systematic sampling method were implemented to collect data from 104 entrepreneurs activated in tourism sector. The survey took place during April and May of 2010. Well trained

As concern as statistical analysis, a Crosstab-based Statistical Method (based on Chi-sq. tests) was firstly applied to identify statistically significant relationships between the characteristics of the enterprises or the characteristics of the entrepreneurs referring to their beliefs about the two models of tourism considered (4S and 4E tourism models). Following, a multiple step process is conducted (including reliability and factor analysis) to identify the factors that are a part of the *Perceived satisfaction from both the basic and the tourist* 

In the survey sample, the 31,7% of the enterprises are located at the municipality of Mytilene, the 34,6% at the municipality of Mithimna (Molyvos, which is the most touristic place of the Island, and the whole North Aegean region), another 10,6% are located at the municipality of Kalloni, the 9,6% at the municipality of Agiasos, the 7,7% at Thermi, while the remaining 5,8% at Plomari. With regards to the type of the sample enterprises, it is noted that 47,1% are restaurants/café/bar, 15,4% are hotels, 4,8% are rooms for renting, 7,7% are travel agencies, 8,7% are enterprises for renting cars or motos and the 16,3% are shops with traditional products. Referring to the legal type of the companies, the majority (67,3%) are personal enterprises. The 73,1% of the sample companies are family enterprises (the employees are members of the same family). It is also noted that the 59,6% of the companies are open continually (all the seasons of the year), and the 40,4% are open seasonally (specifically in summer time), while the average years that the sample companies are

The socioeconomic characteristics of the sample entrepreneurs are the following: 58,7% of the respondents are male, while the remaining 41,3% are female. The average age of the survey respondents is 44 years (st. dev. 11 years). Referring to the educational level, the majority of the respondents have a secondary education level (35,6%), following by those having a graduate degree (27,9%), (30%) and by those having a basic education level (27%), a professional diploma (8,7%) and postgraduate degree (1%). Additionally, from those having a graduate degree, the 42% their degree is relevant to tourism. Referring to the totality of the sample, a percentage of 48% have been educated in seminars relevant to tourism. The vast majority of the sample entrepreneurs (67%) believe that the role of the state constraints the development of their tourism company, mainly due to the role of the transport system at the specific island area, deficiencies in basic public services, and lack of

advertisement/ promotion of the tourist product of the island in question.

enumerators were employed for the data collection.

The results are presented in the following paragraphs.

*infrastructure at Lesvos Island.*

**5.1 Sample characteristics** 

**Characteristics of the sample enterprises** 

operating is 14, 35 years (st. dev. 13,7years). **Characteristics of the sample entrepreneurs** 

**5. Results** 

The 4S (sun, sea, sand, sex) model of tourism (corresponding to mass tourism) together to the 4E ((Environment, Education, Event, Entertainment). model of tourism were presented to the respondents. It is found that the majority of the sample entrepreneurs (52%) believe that the tourism development of Lesvos Island could partially be based on mass tourism (the 4S model), the 20% believe that the tourism development of the island could completely be based on mass tourism, while a percentage of 28% of the entrepreneurs stated that the development of tourism has not at all to be based on the model of mass tourism. The results are presented in the following graph:

Graph 3. Stakeholders' perceptions about the tourism model of 4S in Lesvos Island

The entrepreneurs who believe that the tourism development of the island could completely be based on mass tourism (20% of the respondents), stated that this could be possible via mainly the improvement of the transport system of the wider Aegean Island area, together to improvements at the tourist services provided by the entrepreneurs, and the public (social) services (mainly health services, administration, telecommunications). They also emphasised the role of the State financing.

Additionally, the 96.2% of the totality of the sample believe that the 4E model of tourism has to be combined to the development of alternative types of tourism in Lesvos Island. To the question how likely are they (in the frame of their enterprises) to make investments in order to improve the 4E model of tourism at the island, the majority (42%) answered "likely". Graph 4 presens the frequencies of the relevant likelihood.

It is additionally noted that 32% of the entrepreneurs stated that they would extend their company, 27% that they would develop new tourist enterprises, another 29% stated that they would make investments with regards to the human capital of the company (education, additional staff), while the remaining focused at the improvement of the services they currently provide (including the investment in telecommunications infrastructure)

Graph 5 presents the percentages of the respondents who believe that Lesvos Island has enormous potential to develop the following alternative types of tourism (agri-tourism-54,8%, ecotourism- 45,2%, religion tourism-61,5%, medical tourism- 3,1%, cruise/yachting-61,5%).

Islands and Tourism Development: A Viewpoint of Tourism Stakeholders of Lesvos Island 471

Following, a Crosstab-based Statistical Method (based on Chi-sq. tests) is applied in order to identify statistically significant relationships between the characteristics of the enterprises or the characteristics of the entrepreneurs referring to their beliefs about the two models of tourism considered (4S and 4E tourism models). It is noted that no statistically significant relationships found between entrepreneurs with different gender, age group or educational level. This finding suggests that tourism is of significant importance between all the social groups of entrepreneurs in tourism, who are all strongly concerned about the future of the tourism industry at Lesvos Island. Some statistically significant differences found between

a. To the perception if tourism development of Lesvos Island could be based on mass tourism -the 4S model (Chi-sq= 6,011, p=0,05), while, as it is noted from the descriptive statistics presented in the following Table 1 the family enterprises in tourism are more

Family tourism enterprise 17(22,4%) 34(44,7%) 25(32,9% 76(100%)

enterprise 4(14,3) 20(71,4%) 4(14,3%) 28(100%)

Total 21(20,2%) 54(51,9%) 29(27,9%) 104(100%)

Table 1. Stakeholders' perceptions on the appropriateness of 4S tourism model for Lesvos

b. To the perception about agri-tourism development in Lesvos Island (Chi-sq= 5,639, p=0,018). It is noted that the family enterprises are more likely than the non- family ones to perceive that agri-tourism is an appropriate alternative type of tourism that has to be developed in Lesvos Island. Cross-tab descriptive statistics are presented in the

Family tourism enterprise 47(61,8%) 29(38,2%) 76(100%) Non- Family tourism enterprise 10(35,7%) 18(64,3%) 28(100%) Total 57(54,8%) 47(45,2%) 104(100%)

Table 2. Stakeholders' perceptions on Agri-tourism for Lesvos Island

**Do you believe that the 4S model of tourism is the appropriate model for the tourism development in Lesvos Island?**  Completely Partly Not at all Total

> **Agri-tourism has to be developed in Lesvos Island**

Yes No Total

the family and non-family tourism enterprises referring:

**Type of tourism enterprise** 

Non- Family tourism

following Table:

**Type of tourism enterprise** 

Island

likely to reject the 4S model of tourism for Lesvos Island.

Graph 5. Stakeholders' perceptions on the potential to develop alternative types of tourism in Lesvos Island

Graph 4. Stakeholders' perceptions about investments in order to improve the 4E model in

Graph 5. Stakeholders' perceptions on the potential to develop alternative types of tourism

Lesvos Island

in Lesvos Island

Following, a Crosstab-based Statistical Method (based on Chi-sq. tests) is applied in order to identify statistically significant relationships between the characteristics of the enterprises or the characteristics of the entrepreneurs referring to their beliefs about the two models of tourism considered (4S and 4E tourism models). It is noted that no statistically significant relationships found between entrepreneurs with different gender, age group or educational level. This finding suggests that tourism is of significant importance between all the social groups of entrepreneurs in tourism, who are all strongly concerned about the future of the tourism industry at Lesvos Island. Some statistically significant differences found between the family and non-family tourism enterprises referring:

a. To the perception if tourism development of Lesvos Island could be based on mass tourism -the 4S model (Chi-sq= 6,011, p=0,05), while, as it is noted from the descriptive statistics presented in the following Table 1 the family enterprises in tourism are more likely to reject the 4S model of tourism for Lesvos Island.


Table 1. Stakeholders' perceptions on the appropriateness of 4S tourism model for Lesvos Island

b. To the perception about agri-tourism development in Lesvos Island (Chi-sq= 5,639, p=0,018). It is noted that the family enterprises are more likely than the non- family ones to perceive that agri-tourism is an appropriate alternative type of tourism that has to be developed in Lesvos Island. Cross-tab descriptive statistics are presented in the following Table:


Table 2. Stakeholders' perceptions on Agri-tourism for Lesvos Island

Islands and Tourism Development: A Viewpoint of Tourism Stakeholders of Lesvos Island 473

*Regarding the tourism infrastructure at the island, a* 12-item scale of perceptual indicators was developed. A 5-point Likert scale of the level of satisfaction from the respondents regarding the tourist infrastructure in question was used taking the values: (1) extremely dissatisfied;

Reliability analysis of the 13-item scale was conducted. The scale had a Cronbach's alpha of 0.786. Following, exploratory Factor Analysisusing principle component analysis with *varimax* rotation was performed on the 13-item scale to determine the latent structure of the set of variables. The Kaiser-Meyer-Oklin (KMO) statistic was 0.653 indicating the validity of the Factor Analysismethod applied. The solution considered 3 factors accounted for 61,2% of total cumulative variance. The resulted factors were labelled: (1) *Accommodation* (variance explained=27,2%); (2) *Culture* (variance explained=19,5%) and (3) *Leisure* (variance explained=14,5%). Five items loaded on the *first* factor, with factor loadings ranging from .0.581 to 0.783. Three items loaded on the *second* factor, with factor loading ranging from .0.534 to 0.864. Finally, four items loaded on the *third* factor, with factor loadings ranging from 0,444 to 0,790.The perceptual indicators and their factor loadings are presented in the

> *Transport system, health and administration*

Airport ,828 -,076 ,031 Port ,760 -,206 ,364 Road network ,671 ,126 -,326 Health infrastructure ,660 ,214 -,139 Transport system ,571 ,342 ,152 Administration ,352 ,305 ,314 Banking ,104 ,818 -,035 Telecommunications -,058 ,684 ,079 Police ,394 ,491 ,464 Fire station -,163 ,212 ,627 Post office -,099 -,078 ,546 Marines ,499 -,174 ,533 Parking -,070 -,054 -,228

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser

Table 4. Factor Analysismodel of the entrepreneurs' satisfaction of basic infrastructure in

**Factors** 

*Financial and telecommunications infrastructure*

*Infrastructure for communication and quality of life* 

…, (5) extremely satisfied.

following Table:

Normalization.

Lesvos Island

a Rotation converged in 6 iterations.

**Basic Infrastructure** 

In addition, it is found that the entrepreneurs who have completed educational seminars in tourism, are more likely to prefer ecotourism (Ch-sq= 4,51, p=0,033), while they additionally are more likely (than the entrepreneurs who have not completed such seminars) to make investments with regards to the improvement of the human capital of their company (e.g. training), in order to improve the alternative tourism (4E model) in Lesvos Island (Chi-sq= 5,039, p=0,025). The relevant descriptive statistics are presented in the Table following:


Table 3. Stakeholders' perceptions on Ecotourism development and Investments in human capital for Lesvos Island

#### **5.3 Factor analysis models for the perceived satisfaction of tourism entrepreneurs in Lesvos Island regarding both the basic and the tourist infrastructure at the island**

Following, a multiple step process was conducted (including reliability and factor analysis) to identify the factors that are a part of the *Perceived satisfaction from both the basic and the tourist infrastructure at Lesvos Island.* 

*Regarding the basic infrastructure at the island, a* 13-item scale of perceptual indicators was developed. A 5-point Likert scale of the level of satisfaction from the respondents regarding the tourist infrastructure in question was used taking the values: (1) extremely dissatisfied; ..., (5) extremely satisfied.

Reliability analysis of the 13-item scale was conducted. The scale had a Cronbach's alpha of 0.792. Following, exploratory Factor Analysisusing principle component analysis with *varimax* rotation was performed on the 13-item scale to determine the latent structure of the set of variables. The Kaiser-Meyer-Oklin (KMO) statistic was 0.590 indicating the validity of the Factor Analysismethod applied. The solution considered 3 factors accounted for 49,8% of total cumulative variance. The resulted factors were labelled: (1) *Transport system, health and administration* (variance explained=23,6%); (2) *Financial and telecommunications infrastructure* (variance explained=13,7%) and (3) *Infrastructure for communication and quality of life*  (variance explained=12,5%). Six items loaded on the *first* factor, with factor loadings ranging from .0.352 to 0.828. Three items loaded on the *second* factor, with factor loading ranging from .0.491 to 0.818. Finally, four items loaded on the *third* factor, with factor loadings ranging from -0,228 to 0,627. The perceptual indicators and their factor loadings are presented in the following Table:

In addition, it is found that the entrepreneurs who have completed educational seminars in tourism, are more likely to prefer ecotourism (Ch-sq= 4,51, p=0,033), while they additionally are more likely (than the entrepreneurs who have not completed such seminars) to make investments with regards to the improvement of the human capital of their company (e.g. training), in order to improve the alternative tourism (4E model) in Lesvos Island (Chi-sq= 5,039, p=0,025). The relevant descriptive statistics are presented in

**Lesvos Island Investments in human capital** 

Yes No Total Yes No Total

Yes 28(56%) 22(44%) 50(100%) 22(59,5%) 15(40,5%) 37(100%) No 19(35,2%) 35(64,8%) 54(100%) 8(30,8%) 18(69,2%) 26(100%) Total 47(45,2%) 57(54,8%) 104(100%) 30(47,6%) 33(52,4%) 63(100%)

Table 3. Stakeholders' perceptions on Ecotourism development and Investments in human

**5.3 Factor analysis models for the perceived satisfaction of tourism entrepreneurs in Lesvos Island regarding both the basic and the tourist infrastructure at the island** 

Following, a multiple step process was conducted (including reliability and factor analysis) to identify the factors that are a part of the *Perceived satisfaction from both the basic and the* 

*Regarding the basic infrastructure at the island, a* 13-item scale of perceptual indicators was developed. A 5-point Likert scale of the level of satisfaction from the respondents regarding the tourist infrastructure in question was used taking the values: (1) extremely dissatisfied;

Reliability analysis of the 13-item scale was conducted. The scale had a Cronbach's alpha of 0.792. Following, exploratory Factor Analysisusing principle component analysis with *varimax* rotation was performed on the 13-item scale to determine the latent structure of the set of variables. The Kaiser-Meyer-Oklin (KMO) statistic was 0.590 indicating the validity of the Factor Analysismethod applied. The solution considered 3 factors accounted for 49,8% of total cumulative variance. The resulted factors were labelled: (1) *Transport system, health and administration* (variance explained=23,6%); (2) *Financial and telecommunications infrastructure* (variance explained=13,7%) and (3) *Infrastructure for communication and quality of life*  (variance explained=12,5%). Six items loaded on the *first* factor, with factor loadings ranging from .0.352 to 0.828. Three items loaded on the *second* factor, with factor loading ranging from .0.491 to 0.818. Finally, four items loaded on the *third* factor, with factor loadings ranging from -0,228 to 0,627. The perceptual indicators and their factor loadings are

**Ecotourism has to be developed in** 

the Table following:

capital for Lesvos Island

..., (5) extremely satisfied.

presented in the following Table:

*tourist infrastructure at Lesvos Island.* 

**Entrepreneurs who have completed educational seminars in tourism** 

*Regarding the tourism infrastructure at the island, a* 12-item scale of perceptual indicators was developed. A 5-point Likert scale of the level of satisfaction from the respondents regarding the tourist infrastructure in question was used taking the values: (1) extremely dissatisfied; …, (5) extremely satisfied.

Reliability analysis of the 13-item scale was conducted. The scale had a Cronbach's alpha of 0.786. Following, exploratory Factor Analysisusing principle component analysis with *varimax* rotation was performed on the 13-item scale to determine the latent structure of the set of variables. The Kaiser-Meyer-Oklin (KMO) statistic was 0.653 indicating the validity of the Factor Analysismethod applied. The solution considered 3 factors accounted for 61,2% of total cumulative variance. The resulted factors were labelled: (1) *Accommodation* (variance explained=27,2%); (2) *Culture* (variance explained=19,5%) and (3) *Leisure* (variance explained=14,5%). Five items loaded on the *first* factor, with factor loadings ranging from .0.581 to 0.783. Three items loaded on the *second* factor, with factor loading ranging from .0.534 to 0.864. Finally, four items loaded on the *third* factor, with factor loadings ranging from 0,444 to 0,790.The perceptual indicators and their factor loadings are presented in the following Table:


Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

a Rotation converged in 6 iterations.

Table 4. Factor Analysismodel of the entrepreneurs' satisfaction of basic infrastructure in Lesvos Island

Islands and Tourism Development: A Viewpoint of Tourism Stakeholders of Lesvos Island 475

feedback (Kokkosis and Tsartas, 2001). This approach does not relates to mass tourism development, which is based on a 4S (sun, sand, sea, sex) model, or a "sun lust" model of tourism (it is noted that on such models is also based the tourism development in Greece and specifically in Lesvos Island). Based on this suggestion, sustainable tourism development seems to be related to the application of new tourism models, like the so called 4Ε model of tourism (Environment and clean nature, Educational tourism, culture and history, Event and mega event, Entertainment and fun). It is noted that, in order to move from a 4S to a 4E model of tourism, strategic planning and developmental policies for tourism, together to the appropriate investments are required, by taking into account the

This paper considers the case of Lesvos Island in Greece. The attractions of the island that play an important role in its tourism development relate to the island's History and culture; the Mediterranean climate; the many beaches and bays; the beautiful landscape; and offer

A field survey contacted aiming to define the tourism entrepreneurs' perceptions about tourism development at the island and to investigate the extent to which the tourism entrepreneurs of the island are willing and able to take the initiative in implementing tourism development policies and investing in tourism projects. Data were collected from 104 tourism entrepreneurs at Lesvos island, during spring 2010. The data were firstly descriptively analysed, providing the sample characteristics of both enterprises and entrepreneurs. The descriptive findings suggest that the strategic plans for tourism in Lesvos Island: have to potentially combine mass and alternative tourism (4S and 4E models of tourism) in order to develop integrated tourism projects, based on the characteristics of the island, taking into account the principles of sustainability. It is also found that the development and application of new forms of tourism at the island has to focus mainly on medical (therapeutic tourism), cuisse/yachting, religion tourism, agri-tourism and ecotourism. Additionally, it was found that the entrepreneurs who have completed educational seminars in tourism are more "open" to sustainable tourism development in Lesvos Island and they are more likely to make investments to improve the 4E model of tourism, finding suggesting the necessity for the development of seminar courses in tourism

Then, a Crosstab-based Statistical Method (based on Chi-sq. tests) was employed to identify statistically significant relationships between the characteristics of the enterprises or the characteristics of the entrepreneurs referring to their beliefs about the two models of tourism considered (4S and 4E tourism models). The analysis' results suggested that tourism is of significant importance between all the social groups of entrepreneurs in tourism at Lesvos Island, who are all strongly concerned about the future of the tourism

Following, a multiple step process was conducted (including reliability and Factor Analysis methods) to identify the factors that are a part of the Island's tourism entrepreneurs' perceived satisfaction from both **the basic and the tourist infrastructure at Lesvos Island.** The analysis suggested that, regarding the **basic infrastructure** at the island in question, tourism developmental policy at the island has to be based in

specific characteristics and the attractions of each region.

the advantage of versified tourism with many options.

for the entrepreneurs at the island.

industry at Lesvos Island.

improvement of the following systems:


Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a Rotation converged in 6 iterations.

Table 5. Factor Analysismodel of the entrepreneurs' satisfaction of tourist infrastructure in Lesvos Island

#### **6. Conclusions – Policy proposals**

Tourism constitutes important factor of regional development, especially in Greece (where tourism constitutes its heavy industry), with positive contribution in the country's economic development and social cohesion, while the Greek islands have enormous potential to develop specific tourism policies, based on their characteristics and comparative advantages. It is also common place that, on the basis of trade liberalization, there is a critical threshold in which the majority of economic and social activities are concentrated within some specific regions (which take the initiative to implement developmental policies and make investments) and they stay there, due to centripetal forces. Based on this approach, tourism activities could positively affect local or regional development (Lagos, 2001)

When discussing about sustainable tourism development in a region, this relates to the: local, social, economic, cultural and environmental structures of the region- by simultaneously shaping the appropriate services, infrastructure, know- how, for continuing

Restaurants ,783 ,098 ,258

Café/bars ,772 ,269 -,103

Hotels ,720 -,164 ,104

Rooms for renting ,689 -,178 ,286

Places for events ,581 ,149 ,393

Cultural centers ,018 ,864 ,050

Museums -,233 ,794 ,030

Places for accommodation in monasteries ,498 ,608 ,028

Travel agencies ,526 ,534 -,259

Beaches -,037 ,022 ,790

Conference centers ,326 -,147 ,721

Sport places ,198 ,351 ,444

Table 5. Factor Analysismodel of the entrepreneurs' satisfaction of tourist infrastructure in

Tourism constitutes important factor of regional development, especially in Greece (where tourism constitutes its heavy industry), with positive contribution in the country's economic development and social cohesion, while the Greek islands have enormous potential to develop specific tourism policies, based on their characteristics and comparative advantages. It is also common place that, on the basis of trade liberalization, there is a critical threshold in which the majority of economic and social activities are concentrated within some specific regions (which take the initiative to implement developmental policies and make investments) and they stay there, due to centripetal forces. Based on this approach, tourism activities could positively

When discussing about sustainable tourism development in a region, this relates to the: local, social, economic, cultural and environmental structures of the region- by simultaneously shaping the appropriate services, infrastructure, know- how, for continuing

**Factors** 

*Accommodation Culture Leisure*

**Tourism infrastructure** 

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

**6. Conclusions – Policy proposals** 

affect local or regional development (Lagos, 2001)

a Rotation converged in 6 iterations.

Lesvos Island

feedback (Kokkosis and Tsartas, 2001). This approach does not relates to mass tourism development, which is based on a 4S (sun, sand, sea, sex) model, or a "sun lust" model of tourism (it is noted that on such models is also based the tourism development in Greece and specifically in Lesvos Island). Based on this suggestion, sustainable tourism development seems to be related to the application of new tourism models, like the so called 4Ε model of tourism (Environment and clean nature, Educational tourism, culture and history, Event and mega event, Entertainment and fun). It is noted that, in order to move from a 4S to a 4E model of tourism, strategic planning and developmental policies for tourism, together to the appropriate investments are required, by taking into account the specific characteristics and the attractions of each region.

This paper considers the case of Lesvos Island in Greece. The attractions of the island that play an important role in its tourism development relate to the island's History and culture; the Mediterranean climate; the many beaches and bays; the beautiful landscape; and offer the advantage of versified tourism with many options.

A field survey contacted aiming to define the tourism entrepreneurs' perceptions about tourism development at the island and to investigate the extent to which the tourism entrepreneurs of the island are willing and able to take the initiative in implementing tourism development policies and investing in tourism projects. Data were collected from 104 tourism entrepreneurs at Lesvos island, during spring 2010. The data were firstly descriptively analysed, providing the sample characteristics of both enterprises and entrepreneurs. The descriptive findings suggest that the strategic plans for tourism in Lesvos Island: have to potentially combine mass and alternative tourism (4S and 4E models of tourism) in order to develop integrated tourism projects, based on the characteristics of the island, taking into account the principles of sustainability. It is also found that the development and application of new forms of tourism at the island has to focus mainly on medical (therapeutic tourism), cuisse/yachting, religion tourism, agri-tourism and ecotourism. Additionally, it was found that the entrepreneurs who have completed educational seminars in tourism are more "open" to sustainable tourism development in Lesvos Island and they are more likely to make investments to improve the 4E model of tourism, finding suggesting the necessity for the development of seminar courses in tourism for the entrepreneurs at the island.

Then, a Crosstab-based Statistical Method (based on Chi-sq. tests) was employed to identify statistically significant relationships between the characteristics of the enterprises or the characteristics of the entrepreneurs referring to their beliefs about the two models of tourism considered (4S and 4E tourism models). The analysis' results suggested that tourism is of significant importance between all the social groups of entrepreneurs in tourism at Lesvos Island, who are all strongly concerned about the future of the tourism industry at Lesvos Island.

Following, a multiple step process was conducted (including reliability and Factor Analysis methods) to identify the factors that are a part of the Island's tourism entrepreneurs' perceived satisfaction from both **the basic and the tourist infrastructure at Lesvos Island.** The analysis suggested that, regarding the **basic infrastructure** at the island in question, tourism developmental policy at the island has to be based in improvement of the following systems:

Islands and Tourism Development: A Viewpoint of Tourism Stakeholders of Lesvos Island 477

[10] Krugman P (2001). "increasing returns and economic geography", *Journal of Political* 

[11] Lagos D. (2001). "Tourism urbanization as a new form of territorial development".

[12] Lagos, D. (1998). "Tourism as a factor for promoting regional development", Review of Urban and Regional Studies TOPOS No.14 : 47-65. Athens. [In Greek].

[14] Lagos, D. and Gkrimpa, E. (2000). The special and alternative forms of tourism: Their

[18] Mantoglou, A., Hadjibiros, K., Panagopoulos, P. and Varveris, T. (1998). " Sustainable

[19] Nijkamp and Verdonkschot 1995. Sustainable Tourism Development: A Case Study of Lesbos, Research Memorandum 1995-3, Vrije Universiteit *Amsterdam* 

[21] Rontos, K. and Sfakianakis, M.E. (2009). 'Recent development and prospects of

[22] Rovolis A. 2002). "New economic geography and other alternative theoretical

[23] Sophoulis, C.M. and Assonitis, G. (1998). The 'Aegean-Archipelago Project':

[24] Spilanis, I., Karambela, S., Vayanni, H. and Kizos, Th. (2006). A tourism typology for

development programme for the Greekislands", Proceedings of the International Congress on Sustainable Development in the Islands and the Role of Research

qualitative tourism in Greece: a statistical approach', Int. J. Applied Systemic Studies, Vol. 2, No. 3, pp.226–241.Urry, J. (1990). The Tourist Gaze. California,

approaches: Seeking a theoretical frame of economic analysis of space". TOPOS*,*

Sustainable growth for small islands via high value-added activities. Proceedings of the International Congress on Sustainable Development in the Islands and the

the Greek Islands. Proceedings of the *International Conference of Trends, Impacts and Policies on Tourism Development*. Heraklion-Crete: Hellenic Open University [25] Varvaresos S. (2009). "The contribution of Alternative and Special Interest Tourism in

tourism development activities". In M.Soteriades & J. Farsaris (Ed) "lternative

The case of the Aegean Islands", PhD Dissertation, Dep. Of Shipping, Trade and

*TOPOS, Inspection of Spatial Development, Planning and Environment, Vol. 17, pp.* 

contribution to the development of Greekislands and special destinations. Proceedings of the International Scientific Conference on Tourism on Islands and

[8] Kakazu, H. (1994). Sustainable Development of Small Island Economies, Westview [9] Kitrinou, Ε. (2009). «The impact of teleworking on the development of island societies:

Transport, University of the Aegean, Greece (in Greek).

[13] Lagos, D. (2005). *"Tourism Economics"*. Kritiki Press. Athens. [In Greek].

Specific Destinations. Chios, Greece: University of the Aegean. [15] Linder S.B. (1961). "*An Essay on Trade and Transformation",* London: John Wiley. [16] Loukissas, (1982). "Tourism's Regional Development Impacts: a Comparative Analysis of the Greek Islands", Annals of Tourism Research, 9, 523-541. [17] Manifesto of the Island Regions of the European Union (2005), available at:

http://www.insuleur.net/doc/manifesto-ENG.pdf

[20] Ohlin Β (1933). "*Interregional and International Trade*". Macmillan.

Role of Research and Higher Education. Rhodes, Greece

and Higher Education., Rhodes, Greece.

Sage Publications.

vol. 18-19, pp. 5-15 [in Greek]

*Economy*, Vol 99(3), pp. 483-499.

*125-146,* Athens (in Greek).


Regarding the **tourist infrastructure at Lesvos Island**, Factor Analysis indicated that tourism developmental policy has to be based in the emphasis of the following axes:


By concluding, it is common stated that tourism industry is the most important source of foreign exchange income for the island economies. Especially for the Greek islands, their main advantage is the tourism product, which includes the culture, the history, the environment and the geographical location of the islands. Especially Lesvos, the third largest in size Greek island, has enormous potential to develop integrated tourism projects, potentially based on the combination of mass and alternative tourism products. The proposed framework of tourism policy for Lesvos Island is able to contribute to the enrichment and differentiation of the characteristics of the offer of the tourism products, resulting in the improvement of the tourism market of the island and the increase of the role of tourism in the Aegean region's economic development. It is also noted that the cooperation between private and public organisations to promote the common drawing and implementing of tourism policies is necessary.

#### **7. References**


 the transport system of the wider Aegean Island area (including improvements in infrastructure at ports, airports and marines, increase in travel frequency (by both sea and air), reduce travel cost to/from the island.), together to improvements of the health

Regarding the **tourist infrastructure at Lesvos Island**, Factor Analysis indicated that

By concluding, it is common stated that tourism industry is the most important source of foreign exchange income for the island economies. Especially for the Greek islands, their main advantage is the tourism product, which includes the culture, the history, the environment and the geographical location of the islands. Especially Lesvos, the third largest in size Greek island, has enormous potential to develop integrated tourism projects, potentially based on the combination of mass and alternative tourism products. The proposed framework of tourism policy for Lesvos Island is able to contribute to the enrichment and differentiation of the characteristics of the offer of the tourism products, resulting in the improvement of the tourism market of the island and the increase of the role of tourism in the Aegean region's economic development. It is also noted that the cooperation between private and public organisations to promote the common drawing and

[1] Butler, R.W. (1980). "The Concept of Tourism Area Cycle of Evolution: Implications

[2] Coccossis, H. (2001). "Sustainable development and tourism in small islands: Some

[3] Coccosis H., Tsartas P. (2001). "Sustainable tourist development and environment".

[4] Haralambopoulos and Pizam, (1996). Perceived Impacts Of Tourism: The Case of

[5] Heckscher Ε. F. (1949). "The Effect of Foreign Trade on the Distribution of Income."

[6] Janssen, H., M. Kiers and P. Nijkamp, Private and Public Development Strategies for

[7] Kakazu (2007). *Islands' Characteristics and Sustainability,* SPF Seminar oSPF on Self-

(englische Fassung von: "Utrikshan delns verkan pa inkomstfirdelningen", *Ekonomisk Tidsktift,* vol 21, del.2 , pp1-32). Readings in the Theory of International

Sustainable Tourism Development of Island Economies, Research Memorandum

for Management of Resources". *Canadian Geographer*, 24 (1):5-12.

Samos, *Annals* of Tourism *Research,* Vol. 23, No. 3, pp. 503-526

Trade. H.S. Ellis and L.A. Metzler, eds. Macmillan. pp. 272-300

1993-68, Free University Amsterdam, December 1993.

lessons from Greece", Anatolia 12 (1), 53–8.

Kritiki editions, Athens [in Greek].

supporting Economy in Micronesia

tourism developmental policy has to be based in the emphasis of the following axes:

and the administration systems of the island

 Accommodation infrastructure Promotion of the Island's Culture

implementing of tourism policies is necessary.

Leisure activities

**7. References** 

 the financial and telecommunications infrastructure system the communication system (mainly promotion /advertisement )


and Special Interest Tourism". Interbooks editions, Athens, pp.151-171. [in Greek].

[26] WTO ( 1993). "Sustainable Tourism Development: A Guide for Local Planners" Madrid, Spain

[26] WTO ( 1993). "Sustainable Tourism Development: A Guide for Local Planners"

Greek].

Madrid, Spain

and Special Interest Tourism". Interbooks editions, Athens, pp.151-171. [in

### *Edited by Murat Kasimoglu*

We have been witnessing huge competition among the organisations in the business world. Companies, NGO's and governments are looking for innovative ways to compete in the global tourism market. In the classical literature of business the main purpose is to make a profit. However, if purpose only focus on the profit it will not to be easy for them to achieve. Nowadays, it is more important for organisations to discover how to create a strong strategy in order to be more competitive in the marketplace. Increasingly, organisations have been using innovative approaches to strengthen their position. Innovative working enables organisations to make their position much more competitive and being much more value-orientated in the global tourism industry. In this book, we are pleased to present many papers from all over the world that discuss the impact of tourism business strategies from innovative perspectives. This book also will help practitioners and academician to extend their vision in the light of scientific approaches.

Visions for Global Tourism Industry - Creating and Sustaining Competitive Strategies

Visions for Global

Tourism Industry

Creating and Sustaining Competitive Strategies

*Edited by Murat Kasimoglu*

Photo by yurii\_zym / iStock