Transcript Part III: tourism dynamics

Part III: tourism
dynamics
Taxonomy of tourism destinations
Travel & tourism: an experience

Tourism consumption is an experience.
These experience is an attraction.

The perception of these experience is

Quality is not directly observable.
subjective.
The marginal decreasing utility
principle
According to economic theory, the utility
of a good decreases with the consumed
quantity.
 In tourism, time (duration of holiday) is
the quantity unit (Q).
 The satisfaction (S) a tourist may benefit
from a destination is linked to the duration
of the stay (d).

The D-attraction
S
d
d*
The D-attractiveness

In these case, experience is motive by a precise
goal (D for discovery).

d* indicates the optimal duration of a stay (it is
a satiety point). In these point, S is maximal.

Examples
D-attractions:
museum, historical sites
commercial tourism.
urban
tourism,
& monuments,
The E-attraction
S
d
The E-attractiveness

The tourist had no precise goal. The
experience is evasion (E).

The tourist experience is more “active”
and more repetitive.

Examples: domestic tourism (family visit),
sport tourism.
The tourism attractiveness: a
complex of attraction

A D-attraction or a E-attraction : a
combination of several D-attractions.
Tourism attraction: a package
S
d
Tourism attraction: a package (II)
S
d
The innovation perspective

The innovator change d* for increasing
tourism receipts with the same number of
tourists.

The innovator transform a D-attraction
into a E-attraction.
Part III. Tourism
dynamics
Innovation and tourism challenges
COMPETITION
INNOVATION
Definitions

The distinction invention/innovation (J.A.
Schumpeter)

The 3 dimensions of innovation:
– new tastes and preferences of the consumers
– new technology to increase the productivity
– New geographical market
The life cycle theory

The life cycle determine the rhythm of
diffusion of a new product
INNOVATION
COMPETITION
DIFFUSION
The logistic curve (S-shaped curve)
CMS
Incubation
phase
Take-off phase
CMS: the cumulative market share
saturation phase
time
The diffusion process

The incubation phase: the R&D period.

The take-off
innovation.

The saturation phase: the market limit.
phase:
the
success
of
The phases classification
Incubation
Firms
number
-
Take-off
+
Existence of Quality/price
Nature of
information the product ratio
and its utility
saturation
-
price
The market evolution : a sequence
of different life cycles
R&D
The tourism market evolution
Spatial tourism ?
Cultural tourism
Eco-tourism
Sea & sun tourism
Sustainable trend
TIME
Life cycle examples in tourism
incubation
Take-off
saturation
Sea & sun in
the 50s
Eco-tourism in
the 70s
Sport tourism in
the 90s
Spatial tourism
in 2000
Sea & sun in Sea & sun in
the 60-70s
the 90Ss
Eco-tourism in
the 80s
Fluvial tourism
in 90s
Attraction park
in the 90s
R&D: definition and function

In the industry, innovation (new product
and new technology) is an economic but
stochastic (random) output :
New product
capital
?
Labor, skills
New technology
Public and private R&D

Traditionally,
public
R&D
finance
fundamental research to increase the
collective knowledge (science).

Firms use the knowledge to develop new
product or new technology: applied
research.
Recent evolution and challenges

Private companies or
organizations
(foundations) finances scientific research:
– scientific program are more expensive;
– Public budget are limited;
– The Nobel price example.


Knowledge = intellectual property ?
The role of Patent: definition & function
The dynamical interactions
Invention &
knowledge
innovation
PRIVATE R&D
PROFIT
Market pull
Private revenues
Public R&D
Fiscal revenue
Productivity
push
Economic growth
The R&D management

R&D activities faces 4 questions:
– determine the global level of R&D
– Select (evaluate) the different research
program
– Anticipate the market evolution
– Allocate the budget for each project.
The tourism R&D

In tourism, research concern the
conception of a new tourism package.

A new tourism site or destination is always
the result of the application and
development of a new idea.

Give examples of new ideas or concepts in
tourism.
The R&D tourism: 6 phases
1. Selecting the site
Research
phase
2. Information research
Technical
dimension
3. Creation of a partner network
And data base
4. Prototype elaboration
Development
phase
5. Economic evaluation
6. edition
Marketing
dimension
Part. III: Tourism
dynamics
The tourism market: a dynamical
perspective.
The role of externalities

What is externalities ?

Externalities
demand.

2 kind of externalities:
influence
the
tourism
– Positive (knowledge, fashion, security, peace)
– Negative (pollution).
Tourism demand curve with
externalities
Price
Negative externalities
Positive
externalities
TA*
Tourism arrivals
MARKET ANALYSIS
In the first phase, externalities are
positive: tourists attract tourists (fashion).
 In these case, TA is an indicator of quality
(because
quality
is
not
directly
observable).


In the second phase, externalities are
negative:
tourists
repulse
tourists
(saturation, pollution, acculturation).
Equilibrium market with
externalities
Price
The supply curve with high fixed costs
TA1
TA2
Tourism arrivals
EQUILIBRIUM ANALYSIS
TA1 is not stable
 TA2 is stable but not sustainable (because
superior to TA*)
 The objective of innovation: to obtain a
stable AND sustainable equilibrium:

– the product-innovation move the demand
curve (a negative demand shock);
– the process-innovation move the supply
curve (a negative supply shock).
A negative demand shock: change
the mentality and preference
Price
TA2
TA*
TA2
TA*
Tourism arrivals
A negative supply shock: legal
restriction to protect environment
Price
TA2
TA* TA2
TA*
Tourism arrivals