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Part III: tourism dynamics

Part III: tourism dynamics. Taxonomy of tourism destinations. Travel & tourism: an experience. Tourism consumption is an experience. These experience is an attraction. The perception of these experience is subjective. Quality is not directly observable.

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Part III: tourism dynamics

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  1. Part III: tourism dynamics Taxonomy of tourism destinations

  2. Travel & tourism: an experience • Tourism consumption is an experience. These experience is an attraction. • The perception of these experience is subjective. • Quality is not directly observable.

  3. The marginal decreasing utility principle • According to economic theory, the utility of a good decreases with the consumed quantity. • In tourism, time (duration of holiday) is the quantity unit (Q). • The satisfaction (S) a tourist may benefit from a destination is linked to the duration of the stay (d).

  4. The D-attraction S d d*

  5. The D-attractiveness • In these case, experience is motive by a precise goal (D for discovery). • d* indicates the optimal duration of a stay (it is a satiety point). In these point, S is maximal. • Examples D-attractions: urban tourism, museum, historical sites & monuments, commercial tourism.

  6. The E-attraction S d

  7. The E-attractiveness • The tourist had no precise goal. The experience is evasion (E). • The tourist experience is more “active” and more repetitive. • Examples: domestic tourism (family visit), sport tourism.

  8. The tourism attractiveness: a complex of attraction • A D-attraction or a E-attraction : a combination of several D-attractions.

  9. Tourism attraction: a package S d

  10. Tourism attraction: a package (II) S d

  11. The innovation perspective • The innovator change d* for increasing tourism receipts with the same number of tourists. • The innovator transform a D-attraction into a E-attraction.

  12. Part III. Tourism dynamics Innovation and tourism challenges

  13. Definitions • The distinction invention/innovation (J.A. Schumpeter) • The 3 dimensions of innovation: • new tastes and preferences of the consumers • new technology to increase the productivity • New geographical market

  14. The life cycle theory • The life cycle determine the rhythm of diffusion of a new product COMPETITION DIFFUSION INNOVATION

  15. The logistic curve (S-shaped curve) CMS saturation phase Incubation phase Take-off phase time CMS: the cumulative market share

  16. The diffusion process • The incubation phase: the R&D period. • The take-off phase: the success of innovation. • The saturation phase: the market limit.

  17. The phases classification

  18. The market evolution : a sequence of different life cycles R&D R&D

  19. The tourism market evolution Spatial tourism ? Cultural tourism Eco-tourism Sea & sun tourism Sustainable trend TIME

  20. Life cycle examples in tourism

  21. R&D: definition and function • In the industry, innovation (new product and new technology) is an economic but stochastic (random) output : New product capital ? Labor, skills New technology

  22. Public and private R&D • Traditionally, public R&D finance fundamental research to increase the collective knowledge (science). • Firms use the knowledge to develop new product or new technology: applied research.

  23. Recent evolution and challenges • Private companies or organizations (foundations) finances scientific research: • scientific program are more expensive; • Public budget are limited; • The Nobel price example. • Knowledge = intellectual property ? • The role of Patent: definition & function

  24. The dynamical interactions Invention & knowledge innovation Market pull Productivity push PRIVATE R&D PROFIT Economicgrowth Private revenues Public R&D Fiscal revenue

  25. The R&D management • R&D activities faces 4 questions: • determine the global level of R&D • Select (evaluate) the different research program • Anticipate the market evolution • Allocate the budget for each project.

  26. The tourism R&D • In tourism, research concern the conception of a new tourism package. • A new tourism site or destination is always the result of the application and development of a new idea. • Give examples of new ideas or concepts in tourism.

  27. The R&D tourism: 6 phases 1. Selecting the site Research phase Technical dimension 2. Information research 3. Creation of a partner network And data base Development phase 4. Prototype elaboration Marketing dimension 5. Economicevaluation 6. edition

  28. Part. III: Tourism dynamics The tourism market: a dynamical perspective.

  29. The role of externalities • What is externalities ? • Externalities influence the tourism demand. • 2 kind of externalities: • Positive (knowledge, fashion, security, peace) • Negative (pollution).

  30. Tourism demand curve with externalities Price Negative externalities Positive externalities Tourism arrivals TA*

  31. MARKET ANALYSIS • In the first phase, externalities are positive: tourists attract tourists (fashion). • In these case, TA is an indicator of quality (because quality is not directly observable). • In the second phase, externalities are negative: tourists repulse tourists (saturation, pollution, acculturation).

  32. Equilibrium market with externalities Price The supply curve with high fixed costs TA1 TA2 Tourism arrivals

  33. EQUILIBRIUM ANALYSIS • TA1 is not stable • TA2 is stable but not sustainable (because superior to TA*) • The objective of innovation: to obtain a stable AND sustainable equilibrium: • the product-innovation move the demand curve (a negative demand shock); • the process-innovation move the supply curve (a negative supply shock).

  34. A negative demand shock: change the mentality and preference Price TA* TA2 Tourism arrivals TA* TA2

  35. A negative supply shock: legal restriction to protect environment Price TA* TA2 TA* TA2 Tourism arrivals

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