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Part I. Economics & Tourism I.c. The “steady state” concept in tourism analysis

Part I. Economics & Tourism I.c. The “steady state” concept in tourism analysis. Tourism dynamics. Economic growth and tourism activity The concept of steady state in the growth theory (Solow). The basic model : (TA: Tourism Arrivals) TA = G {TK ; H ; R}

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Part I. Economics & Tourism I.c. The “steady state” concept in tourism analysis

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  1. Part I. Economics & TourismI.c. The “steady state” concept in tourism analysis • Tourism dynamics

  2. Economic growth and tourism activity The concept of steady state in the growth theory (Solow) The basic model : (TA: Tourism Arrivals) TA = G {TK ; H ; R} With TK: tourism capital, H: human capital and R: Risk TA* = eat . e C Log TA* = a.t + C The « Tourism Steady State » (T.S.S.)

  3. The risk factor in tourism sector • Political: terrorism, war, instability • Technological: crash • Ecological: tsunami • Social: strike in transport companies • Medical: bird flu

  4. International tourist arrivals

  5. Tourism regions (WTO)

  6. Log TA* Log TA Log TA* = at + C C Log TA = a’t + C The tourism steady state [T.S.S]

  7. Log TA* Log TA Log TA* = at + C C T Shock 1 : the level effect • Illustration of the effect of a shock likely to brutally destroy a part of the tourism capital stock (KT), affecting the level of risk perception (R). Many examples may illustrated these effect as the tsunami in Asia, the bird flu in Thailand or Turkey, a terrorism attack in Egypt or in Bali, or the political disturbances in Syria.

  8. Log TA* Log TA Change of effective TA Log TA* = at + C Change of structural TA C T Shock 2: the slope effect • The second category of shock changes structural tourism attractiveness itself. The following graph illustrates an increase of tourism attractiveness:

  9. Log TA* Log TA 2 1 C T Illustration: the Tsunami impact of Thailand TSS • A combination between a level effect [1] and a slope effect [2] :

  10. Conclusion • The TSS theory must enable us to evaluate the impact of various shocks (technological, natural, political…) on the tourism flow ; • The TSS theory must enable us to measure the importance and the duration of the transition periods. • The TSS theory constitutes the first step toward an economic theory of tourism attractiveness.

  11. References • Barro R.J. [1997] Determinant of economic growth: a cross-country empirical study, Cambridge, Mass., the MIT Press. • Caccomo J.L. [2004] « De la fréquentation optimale des destinations », Revue Espaces n° 217, 50-55, Paris. • Eadington W.R. and Redman M. [1991] “Economics and Tourism”, Annals of Tourism Research 18(1). • Solow R.M. [1956] “A contribution to the theory of economic growth”, Quarterly Journal of Economics 70 [1], 65-94. • Valdès B. [1999] Economic Growth. Theory, empirics and policy. Edward Elgar Publisher, Massachusetts.

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