IDEAS home Printed from https://ideas.repec.org/a/eee/touman/v37y2013icp86-98.html
   My bibliography  Save this article

An economic model for tourism destinations: Product sophistication and price coordination

Author

Listed:
  • Andergassen, Rainer
  • Candela, Guido
  • Figini, Paolo

Abstract

The paper models the optimal development strategy of a tourism destination by identifying and analyzing two key economic features: i) the long-term choice of whether to invest in the enhancing of natural and/or cultural resources (which act as common goods in the destination) or to increase the degree of sophistication of the tourism product (here intended as the variety of complementary services to accommodation that are demanded by tourists); ii) the short-term choice of whether or not to implement price coordination among local firms, a problem stemming from the anticommon nature of the tourism product. We build a two-stage model for the tourism destination, thus identifying the optimal degree of sophistication of the tourism product and the optimal institutional arrangement in terms of coordination. This approach helps shed light on the rationale underlying the development path taken by different destinations, thus overcoming some of the limits of existing literature and providing a simple taxonomy for the observed diversity of real-world destinations. Accordingly, we provide a classification of destinations based on the type of coordination and on whether the primary resource is natural, cultural or organizational.

Suggested Citation

  • Andergassen, Rainer & Candela, Guido & Figini, Paolo, 2013. "An economic model for tourism destinations: Product sophistication and price coordination," Tourism Management, Elsevier, vol. 37(C), pages 86-98.
  • Handle: RePEc:eee:touman:v:37:y:2013:i:c:p:86-98
    DOI: 10.1016/j.tourman.2012.10.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0261517712001938
    Download Restriction: no

    File URL: https://libkey.io/10.1016/j.tourman.2012.10.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Rainer Andergassen & Guido Candela, 2012. "Development Strategies for Tourism Destinations: Tourism Sophistication vs. Resource Investments," Economia politica, Società editrice il Mulino, issue 2, pages 173-192.
    2. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    3. Francesco Parisi & Norbert Schulz & Ben Depoorter, 2004. "Simultaneous and Sequential Anticommons," European Journal of Law and Economics, Springer, vol. 17(2), pages 175-190, March.
    4. Sauveur Giannoni & Marie-Antoinette Maupertuis, 2007. "Environmental Quality and Optimal Investment in Tourism Infrastructures: A Small Island Perspective," Tourism Economics, , vol. 13(4), pages 499-513, December.
    5. Fabio Cerina, 2007. "Tourism Specialization and Environmental Sustainability in a Dynamic Economy," Tourism Economics, , vol. 13(4), pages 553-582, December.
    6. Guido Candela & Paolo Figini, 2010. "Destination Unknown. Is there any Economics Beyond Tourism Areas?," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 2(3), pages 256-271, September.
    7. Paolo Figini & Laura Vici, 2010. "Tourism and Growth in a Cross Section of Countries," Tourism Economics, , vol. 16(4), pages 789-805, December.
    8. Rainer Andergassen & Guido Candela, 2013. "Less Developed Countries, Tourism Investments and Local Economic Development," Review of Development Economics, Wiley Blackwell, vol. 17(1), pages 16-33, February.
    9. Tiago Neves Sequeira & Paulo Macas Nunes, 2008. "Does tourism influence economic growth? A dynamic panel data approach," Applied Economics, Taylor & Francis Journals, vol. 40(18), pages 2431-2441.
    10. Guido Candela & Paolo Figini, 2012. "The Economics of Tourism Destinations," Springer Texts in Business and Economics, Springer, edition 127, number 978-3-642-20874-4, April.
    11. G.M. Peter Swann, 2010. "The Rise, Fall and Renaissance of the Resort: A Simple Economic Model," Tourism Economics, , vol. 16(1), pages 45-62, March.
    12. Parisi, Francesco & Schulz, Norbert & Depoorter, Ben, 2005. "Duality in Property: Commons and Anticommons," International Review of Law and Economics, Elsevier, vol. 25(4), pages 578-591, December.
    13. Rinaldo Brau & Alessandro Lanza (ed.), 2008. "Tourism and Sustainable Economic Development," Books, Edward Elgar Publishing, number 12972.
    14. Rinaldo Brau & A. Lanza & F. Pigliaru, 2006. "How fast are small tourist countries growing? The 1980-2003 evidence," Working Paper CRENoS 200614, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    15. Brau, Rinaldo & Lanza, Alessandro & Pigliaru, Francesco, 2007. "How Fast are Small Tourism Countries Growing? Evidence from the Data for 1980–2003," MPRA Paper 82776, University Library of Munich, Germany.
    16. Carmen D. Álvarez-Albelo & Raúl Hernández-Martín, 2009. "The commons and anti-commons problems in the tourism economy," Working Papers XREAP2009-16, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2009.
    17. Andreas Papatheodorou, 2003. "Modelling Tourism Development: A Synthetic Approach," Tourism Economics, , vol. 9(4), pages 407-430, December.
    18. Guido Candela & Paolo Figini & Antonello E. Scorcu, 2009. "Destination Management and Tourists’ Choice with a Two-Part Tariff Price of the Holiday," Rivista di Politica Economica, SIPI Spa, vol. 99(2), pages 107-125, April-Jun.
    19. Guido Candela & Paolo Figini, 2012. "The Economics of Tourism Destinations," Springer Texts in Business and Economics, in: The Economics of Tourism Destinations, edition 127, chapter 0, pages 73-130, Springer.
    20. Rinaldo Brau & Alessandro Lanza & Francesco Pigliaru, 2007. "How Fast are Small Tourism Countries Growing? Evidence from the Data for 1980–2003," Tourism Economics, , vol. 13(4), pages 603-613, December.
    21. Álvaro Matias & Peter Nijkamp & Paulo Neto (ed.), 2007. "Advances in Modern Tourism Research," Springer Books, Springer, number 978-3-7908-1718-8, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jose Antonio Filipe & Tolga Genc, 2019. "Modelling an Idle Building Case through SWOT Analysis and Fuzzy DEMATEL – A Study on Anti-Commons," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 167-185.
    2. Rainer Andergassen & Guido Candela & Paolo Figini, 2017. "The management of tourism destinations," Tourism Economics, , vol. 23(1), pages 49-65, February.
    3. Bruno Marques & Jean Claude Mado & Vincent Valmorin & J Velin, 2018. "Optimal Tourism Product [Produit Touristique Optimal]," Working Papers hal-01687976, HAL.
    4. Luan Chen & Eric Ng & Shyh-Chang Huang & Wei-Ta Fang, 2017. "A Self-Evaluation System of Quality Planning for Tourist Attractions in Taiwan: An Integrated AHP-Delphi Approach from Career Professionals," Sustainability, MDPI, vol. 9(10), pages 1-18, September.
    5. Della Corte, Valentina & Aria, Massimo, 2016. "Coopetition and sustainable competitive advantage. The case of tourist destinations," Tourism Management, Elsevier, vol. 54(C), pages 524-540.
    6. Tolga Genç & José António Filipe, 2016. "A fuzzy MCDM approach for choosing a tourism destination in Portugal," International Journal of Business and Systems Research, Inderscience Enterprises Ltd, vol. 10(1), pages 23-44.
    7. Carmen D à lvarez-Albelo & José A Martínez-González, 2024. "Should antitrust regulators be wary of inter-firm coordination agreements through a tourism destination card?," Tourism Economics, , vol. 30(2), pages 324-344, March.
    8. José António Filipe, 2014. "Tourism Destinations: A Methodological Discussion on Commons and Anti-commons. The ‘Ammaia’ Project’s Locale Impact," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 4(2), pages 725-725.
    9. Ma, Mingcao & Weng, Jin & Yu, Larry, 2015. "Market size, scale economies, and tourism market structure: A case of historic water town tourism in China," Tourism Management, Elsevier, vol. 49(C), pages 119-137.
    10. Bruno Marques, 2016. "Transport-Tourism: Capacity Coordination [Tourisme-Transport : Capacite De Coordination]," Working Papers hal-01265818, HAL.
    11. Silvia Emili & Paolo Figini & Andrea Guizzardi, 2020. "Modelling international monthly tourism demand at the micro destination level with climate indicators and web-traffic data," Tourism Economics, , vol. 26(7), pages 1129-1151, November.
    12. José António Filipe, 2014. "Tourism Destinations and Local Rental: A Discussion around Bureaucracy and Anticommons. Algarve Case (Portugal)," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 4(4), pages 821-821.
    13. Jorge Luis Ramos García & Juan Pedro Ibarra Michel, 2017. "Social Prosperity Perception in Cultural Tourism Destinations: the Case of Peña de Bernal, Huejotzingo and Yuanhuitlán, México," Traektoriâ Nauki = Path of Science, Altezoro, s.r.o. & Dialog, vol. 3(4(21)), pages 7.1-7.9, April.
    14. Juan Ignacio Pulido-Fernández & María de la Cruz Pulido-Fernández, 2018. "Proposal for an Indicators System of Tourism Governance at Tourism Destination Level," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(2), pages 695-743, June.
    15. Ante Mandić & Lidija Petrić, 2021. "The impacts of location and attributes of protected natural areas on hotel prices: implications for sustainable tourism development," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 833-863, January.
    16. Chia-Wen Lee & Ching Li, 2019. "The Process of Constructing a Health Tourism Destination Index," IJERPH, MDPI, vol. 16(22), pages 1-11, November.
    17. Guido Candela & Massimiliano Castellani & Maurizio Mussoni, 2015. "Keynesian Policies for Tourism: Taxation without Coordination," Tourism Economics, , vol. 21(3), pages 527-541, June.
    18. Bruno Marques, 2016. "Tourisme-Transport : Capacity Coordination [Tourisme-Transport : Capacité De Coordination]," Working Papers hal-01265798, HAL.
    19. Petr Štumpf & Jitka Mattyašovská & Adriana Krištùfková, 2021. "Restart of Hospitality and Tourism: System Dynamics and Scenario-Based Modelling," Academica Turistica - Tourism and Innovation Journal, University of Primorska Press, vol. 14(2), pages 125-136.
    20. Romain Cruse & Bruno Marques, 2013. "Bénéfices et bénéficiaires de l’activité de croisière en Dominique," Documents de Travail 2013-16, CEREGMIA, Université des Antilles et de la Guyane.
    21. Elisabeth Kastenholz & Celeste Eusébio & Maria João Carneiro, 2016. "Purchase of local products within the rural tourist experience context," Tourism Economics, , vol. 22(4), pages 729-748, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rainer Andergassen & Guido Candela & Paolo Figini, 2017. "The management of tourism destinations," Tourism Economics, , vol. 23(1), pages 49-65, February.
    2. José António Filipe, 2014. "Tourism Destinations and Local Rental: A Discussion around Bureaucracy and Anticommons. Algarve Case (Portugal)," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 4(4), pages 821-821.
    3. José António Filipe, 2014. "Tourism Destinations: A Methodological Discussion on Commons and Anti-commons. The ‘Ammaia’ Project’s Locale Impact," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 4(2), pages 725-725.
    4. Chu, Angus C. & Liao, Chih-Hsing & Xu, Rongxin & Chen, Ping-Ho, 2024. "Dynamic effects of tourism shocks on innovation in an open-economy Schumpeterian growth model," Economic Modelling, Elsevier, vol. 131(C).
    5. Raffaele Paci & Emanuela Marrocu, 2014. "Tourism and regional growth in Europe," Papers in Regional Science, Wiley Blackwell, vol. 93, pages 25-50, November.
    6. Simone Marsiglio, 2018. "On the implications of tourism specialization and structural change in tourism destinations," Tourism Economics, , vol. 24(8), pages 945-962, December.
    7. Jorge V Pérez-Rodríguez & Heiko Rachinger & María Santana-Gallego, 2022. "Does tourism promote economic growth? A fractionally integrated heterogeneous panel data analysis," Tourism Economics, , vol. 28(5), pages 1355-1376, August.
    8. Aistov, Andrey & Nikolaeva, Tatiana, 2019. "Tourism-led growth hypothesis," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 56, pages 5-24.
    9. Ming-Chieh Wang & Chang-Sheng Wang, 2018. "Tourism, the environment, and energy policies," Tourism Economics, , vol. 24(7), pages 821-838, November.
    10. Dutta, Nabamita & Kar, Saibal, 2018. "Relating rule of law and budgetary allocation for tourism: Does per capita income growth make a difference for Indian states?," Economic Modelling, Elsevier, vol. 71(C), pages 263-271.
    11. José Manuel Ordóñez-de-Haro & Jordi Perdiguero & Juan-Luis Jiménez, 2020. "Fuel prices at petrol stations in touristic cities," Tourism Economics, , vol. 26(1), pages 45-69, February.
    12. Guido Candela & Massimiliano Castellani & Maurizio Mussoni, 2015. "Keynesian Policies for Tourism: Taxation without Coordination," Tourism Economics, , vol. 21(3), pages 527-541, June.
    13. Rinaldo Brau & Adriana Di Liberto & Francesco Pigliaru, 2011. "Tourism and Development: A Recent Phenomenon Built on Old (Institutional) Roots?," The World Economy, Wiley Blackwell, vol. 34(3), pages 444-472, March.
    14. Guido Candela & Paolo Figini, 2010. "Destination Unknown. Is there any Economics Beyond Tourism Areas?," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 2(3), pages 256-271, September.
    15. Juan Gabriel Brida & Lionello F. Punzo & Wiston Adrián Risso, 2011. "Research Note: Tourism as a Factor of Growth – the Case of Brazil," Tourism Economics, , vol. 17(6), pages 1375-1386, December.
    16. Robertico Croes & Manuel A. Rivera, 2017. "Tourism’s potential to benefit the poor," Tourism Economics, , vol. 23(1), pages 29-48, February.
    17. Theodore Panagiotidis & Maurizio Mussoni & Georgios Voucharas, 2023. "How Important is Tourism for Growth?," Working Paper series 23-13, Rimini Centre for Economic Analysis.
    18. Paolo Figini & Laura Vici, 2010. "Tourism and Growth in a Cross Section of Countries," Tourism Economics, , vol. 16(4), pages 789-805, December.
    19. Salahodjaev, Raufhon & Safarova, Nilufar, 2015. "Do foreign visitors reward post-communist countries? A panel evidence for tourism-growth nexus," MPRA Paper 66215, University Library of Munich, Germany.
    20. Azeez, Rasheed Oluwaseyi, 2019. "Is Tourism a Sustainable Haven for Economic Growth in North African Countries? An Evidence From Panel Analysis," MPRA Paper 93449, University Library of Munich, Germany.

    More about this item

    Keywords

    Tourism destination; Product variety; Natural resources; Price coordination; Development strategy;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:touman:v:37:y:2013:i:c:p:86-98. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/tourism-management .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.