Part III: tourism dynamics

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Part III tourism dynamics

• Taxonomy of tourism destinations

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Travel tourism an experience

• Tourism consumption is an experience. These
  experience is an attraction.
• The perception of these experience is subjective.
• Quality is not directly observable.

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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).

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The D-attraction
S
d
d
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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 urban tourism, museum,
  historical sites monuments, commercial tourism.

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The E-attraction
S
d
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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.

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The tourism attractiveness a complex of
attraction

• A D-attraction or a E-attraction a combination
  of several D-attractions.

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Tourism attraction a package
S
d
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Tourism attraction a package (II)
S
d
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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.

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Part III. Tourism dynamics

• Innovation and tourism challenges

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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

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The life cycle theory

• The life cycle determine the rhythm of diffusion
  of a new product

COMPETITION
DIFFUSION
INNOVATION
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The logistic curve (S-shaped curve)
CMS
saturation phase
Incubation phase
Take-off phase
time
CMS the cumulative market share
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The diffusion process

• The incubation phase the RD period.
• The take-off phase the success of innovation.
• The saturation phase the market limit.

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The phases classification
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The market evolution a sequence of different
life cycles
RD
RD
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The tourism market evolution
Spatial tourism ?
Cultural tourism
Eco-tourism
Sea sun tourism
Sustainable trend
TIME
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Life cycle examples in tourism
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RD 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
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Public and private RD

• Traditionally, public RD finance fundamental
  research to increase the collective knowledge
  (science).
• Firms use the knowledge to develop new product or
  new technology applied research.

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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

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The dynamical interactions
Invention knowledge
innovation
Productivity push
Market pull
PRIVATE RD
PROFIT
Economic growth
Private revenues
Public RD
Fiscal revenue
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The RD management

• RD activities faces 4 questions
• determine the global level of RD
• Select (evaluate) the different research program
• Anticipate the market evolution
• Allocate the budget for each project.

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The tourism RD

• 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.

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The RD tourism 6 phases
1. Selecting the site
Research phase
Technical dimension
2. Information research
3. Creation of a partner network And data base
Development phase
4. Prototype elaboration
Marketing dimension
5. Economic evaluation
6. edition
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Part. III Tourism dynamics

• The tourism market a dynamical perspective.

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The role of externalities

• What is externalities ?
• Externalities influence the tourism demand.
• 2 kind of externalities
• Positive (knowledge, fashion, security, peace)
• Negative (pollution).

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Tourism demand curve with externalities
Price
Negative externalities
Positive externalities
Tourism arrivals
TA
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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).

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Equilibrium market with externalities
Price
The supply curve with high fixed costs
TA1
TA2
Tourism arrivals
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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).

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A negative demand shock change the mentality and
preference
Price
TA
TA2
Tourism arrivals
TA2
TA
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A negative supply shock legal restriction to
protect environment
Price
TA
TA2
TA2
TA
Tourism arrivals