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

  • Rainer Andergassen


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

  • Guido Candela


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

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.

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Paper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 35_10.

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Date of creation: Jan 2010
Date of revision: Jun 2013
Handle: RePEc:rim:rimwps:35_10
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