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Development Strategies for Tourism Destinations: Tourism Sophistication vs. Resource Investments

Author

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  • Rainer Andergassen

    () (Department of Economics, University of Bologna, Italy; RCEA, Italy)

  • Guido Candela

    () (Department of Economics, University of Bologna, Italy; RCEA, Italy)

Abstract

This paper investigates the effectiveness of development strategies for tourism destinations. We show that resource investments unambiguously increase tourism revenues and that increasing the degree of tourism sophistication, that is increasing the variety of tourism related goods and services, increases tourism activity and decreases the perceived quality of the destination’s resource endowment, leading to an ambiguous effect on tourism revenues. We disentangle these two effects and characterize situations where increasing the degree of tourism sophistication is a viable development strategy and where it is impracticable without resource investment.

Suggested Citation

  • Rainer Andergassen & Guido Candela, 2010. "Development Strategies for Tourism Destinations: Tourism Sophistication vs. Resource Investments," Working Paper series 35_10, Rimini Centre for Economic Analysis, revised Jun 2013.
  • Handle: RePEc:rim:rimwps:35_10
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    Cited by:

    1. repec:eee:touman:v:37:y:2013:i:c:p:86-98 is not listed on IDEAS
    2. Rakela Thano, 2013. "Touristic Investments in Saranda Region," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 3(2), pages 1-9, April.
    3. Rakela Thano, 2013. "Touristic Investments In Saranda Region," Romanian Economic Business Review, Romanian-American University, vol. 8(2), pages 117-130, June.

    More about this item

    Keywords

    Tourism destination; tourism sophistication; resource investments; tourism demand; development strategy;

    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

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