Author： Álvarez-Albelo Armen D. Hernández-Martín Raúl
Publisher： IP Publishing Ltd
ISSN： 1354-8166
Source： Tourism Economics, Vol.18, Iss.4, 2012-08, pp. : 691-710
Disclaimer: Any content in publications that violate the sovereignty, the constitution or regulations of the PRC is not accepted or approved by CNPIEC.
Abstract
Tourism countries tend to face congestion externalities, which lead to over-production. Transport services produced in the countries of origin and tourism services provided at the destination are highly complementary, so these economies also tend to face coordination failures between firms, which result in under-production. Moreover, the presence of foreign firms poses the question of how much profit is retained by the destination. This paper analyses the joint effects of these problems on the destination's welfare, and the policies implemented to address them. Direct selling and bundling by foreign tour operators emerge as possible market arrangements. Four main results are obtained. First, in the direct selling situation the optimal policy depends on the relative importance of the problems. Second, tour operators always lead to over-production. Third, the presence of a single tour operator is not the solution to congestion. Finally, the switch from several tour operators to a single one is welfare reducing.
Related content
The Political Economy of Tourism in Cambodia
Asia Pacific Journal of Tourism Research, Vol. 13, Iss. 3, 2008-09 ,pp. :
Access to resources
Recommend
Tourism's Role in the Global Economy
By Lew Alan
Tourism Geographies, Vol. 13, Iss. 1, 2011-02 ,pp. :
Oil, the global economy and tourism
Tourism Review, Vol. 66, Iss. 3, 2011-09 ,pp. :
Tourism in The Gambia: problems and proposals
By Thompson C. O'Hare G. Evans K.
Tourism Management, Vol. 16, Iss. 8, 1995-12 ,pp. :