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The Economics of Local Tourist Systems

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  • Candela, Guido
  • Figini, Paolo
  • Scorcu, Antonello E.

Abstract

In this paper we analyse the Local Tourist System (LTS) as a particular case of Marshallian Industrial District. The LTS allows the identification of more effective policy tools for managing tourism. First, through the concept of LTS, the policy maker can take into account the complexity of tourism, characterised by a strong heterogeneity of goods, services and subjects involved; second, LTS helps promote a stronger co-ordination between the public and the private sector, by identifying a homogeneous territory and recognising its importance in tourists' decisions; third, through the LTS the policymaker can analyze the externalities and promotes the idea of collaborating networks in a context of local development. In the LTS framework, the anticommon problem can be analysed and contrasted. As the tourist has to buy different but intertwined goods which compose the holiday package, the failure in one of the markets can lead to the overall failure of the package. A LTS policy has to: i) co-ordinate the price policy of the different firms supplying 'single components' of the tourist product; ii) fix the price of the whole product; iii) impute a price to each component. We demonstrate that, through price policy co-ordination and under general conditions, the LTS can increase the size of tourism and the firms' profits, thereby reaching a more effective and efficient target in tourism policy. The recent introduction of LTS in the Italian legislation can be seen as a positive attempt of improving co-ordination in a complex sector such as tourism.

Suggested Citation

  • Candela, Guido & Figini, Paolo & Scorcu, Antonello E., 2005. "The Economics of Local Tourist Systems," Natural Resources Management Working Papers 12130, Fondazione Eni Enrico Mattei (FEEM).
  • Handle: RePEc:ags:feemnr:12130
    DOI: 10.22004/ag.econ.12130
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    References listed on IDEAS

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    1. Michael McAleer & Riaz Shareef & Bernardo da Veiga, 2005. "Risk Management of Daily Tourist Tax Revenues for the Maldives," Working Papers 2005.137, Fondazione Eni Enrico Mattei.
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    Cited by:

    1. Bruno Marques & Jean Claude Mado & Vincent Valmorin & J Velin, 2018. "Optimal Tourism Product [Produit Touristique Optimal]," Working Papers hal-01687976, HAL.
    2. 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.
    3. Oliver Fritz, 2016. "Tourismusförderungen in Wien," WIFO Studies, WIFO, number 59381, April.
    4. Bruno Marques, 2016. "Tourisme-Transport : Capacity Coordination [Tourisme-Transport : Capacité De Coordination]," Working Papers hal-01265798, HAL.

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    More about this item

    Keywords

    Resource /Energy Economics and Policy;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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