nep-tur New Economics Papers
on Tourism Economics
Issue of 2009‒10‒31
four papers chosen by
Antonello Scorcu
University of Bologna

  1. Quantifying the Impact of Chikungunya and Dengue on Tourism Revenues By Dileep V. Mavalankar; Tapasvi I. Puwar; Tiina M. Murtola; S.S. Vasan
  2. Franchise in Romanian tourism By Bunea-Bontaş, Cristina Aurora; Petre, Mihaela
  3. Valuation of Marine Ecosystem Threshold Effects: Application of Choice Experiments to Value Algal Bloom in the Black Sea Coast of Bulgaria By Taylor, Timothy; Longo, A.
  4. A Preliminary Estimate of Immediate Cost of Chikungunya and Dengue to Gujarat, India By Dileep V. Mavalankar; Tapasvi I. Puwar; Dipti Govil; Tiina M. Murtola; S.S. Vasan

  1. By: Dileep V. Mavalankar; Tapasvi I. Puwar; Tiina M. Murtola; S.S. Vasan
    Abstract: Background Health economists have traditionally quantified the burden of vector-borne diseases (such as chikungunya and dengue) as the sum of the cost of illness and the cost of intervention programmes. The objective of this paper is to predict the order of magnitude of possible reduction in tourism revenues if a major epidemic of chikungunya or dengue were to discourage visits by international tourists, and to prove that even a conservative estimate can be comparable to or even greater than the cost of illness and intervention programmes combined, and therefore should not be ignored in the estimation of the overall burden. Methods We have chosen three Asian economies where the immediate costs of these diseases have been recently calculated: Gujarat (an economically important state of India), Malaysia, and Thailand. Only international tourists from non-endemic countries have been considered to be discouraged, and a 4% annual decline in their numbers has been assumed. Revenues from these tourists have been calculated assuming that tourists from non-endemic countries would spend, on average, the same amount as all international tourists. These assumptions are conservative and consistent with the recent experience of Mauritius and Réunion islands. Non-Resident Indians (NRIs) have been considered half as likely to avoid travel to Gujarat compared to non-Indians. This paper reports inflation-adjusted expenditure figures as 2008 US$, assuming recent market exchange rates of 42.0 INR/US$, 3.22 MYR/US$, 0.68 EUR/US$, and 33.6 THB/US$. Findings A 4% decline in tourists from non-endemic countries would result in a substantial loss of tourism revenues . at least US$ 8 million for Gujarat, US$ 65 million for Malaysia, and US$ 363 million for Thailand. The estimated immediate annual cost of chikungunya and dengue to these economies is US$ 90 million, US$ 133 million, and approximately US$ 127 million respectively, indicating that impact on tourism revenues should not be ignored when calculating the burden of infectious diseases. The impact on Gujarat is relatively less because its share of world tourism receipts is just 0.04%, whereas Malaysia and Thailand have healthy shares of 1.64% and 1.82% respectively. A 4% decline in tourists to Gujarat from other Indian states would amount to US$ 9.6 million loss in domestic tourism revenues to Gujarat. Interpretation This paper shows that potential loss of tourism revenues due to a severe epidemic outbreak could be substantial. In some cases, ignoring this component could seriously underestimate cost-benefit results, forestalling promising interventions that could benefit the society as a whole or leading to inadequate investment of resources in prevention and public-funded control programmes. This would be to the detriment of especially poorer sections of the society, who may not be able to afford treatment costs. At present data are insufficient for us to make more than a preliminary estimate of the magnitude of the potential loss of revenues from tourism due to a major outbreak of chikungunya or dengue.
    Date: 2009–02–10
  2. By: Bunea-Bontaş, Cristina Aurora; Petre, Mihaela
    Abstract: Both on national and international scale, tourism business is improving continuously, by adjusting to the tourists' demands, resulting in modification and adaptation of organization and association forms in this area. One of these is the franchise affiliation, an original way of doing business that combines the entrepreneurs interest in keeping their own undertaking with that belongs to a group with well-known brand which aims to expand on national and international market. This paper will discuss two important areas of the Romanian tourism industry in which franchise agreement is applied: travel agencies franchise and hotel franchise. On a national scale, franchise was adopted as an expanding strategy by the travel agencies, on one hand, notorious tour-operators that has accumulated know-how and has proven its successful applicability, and, on the other hand, small and medium entrepreneurs who saw in the franchise affiliation an opportunity to develop faster and more reliable business. Also, the Romanian hotel owners with financial resources have seen in hotel franchise an easier way to obtain higher profits. In today's competitive and global hotel market, being part of a group of hotels that share a recognized brand and provide quality services might mean the difference between financial success and failure.
    Keywords: franchise; know-how; brand; travel agents franchise; hotel franchise
    JEL: L14 L83 M55
    Date: 2009–05
  3. By: Taylor, Timothy; Longo, A.
    Abstract: Algal bloom arises in part from anthropogenic emissions of nutrients into the coastal zone. Increased interest in water quality in coastal and marine areas stemming from the Water Framework Directive and the Marine Strategy Framework Directive leads to important questions in terms of policies to address nutrient loadings. This paper presents the results from a choice experiment for the valuation of algal blooms in Varna Bay, Bulgaria. Varna Bay is an important tourist destination and a large port city on the Black Sea coast of Bulgaria. Algal bloom events have been experienced frequently in this area. A choice experiment questionnaire was developed to be applied in Varna Bay. The key attributes used were visibility, duration of bloom and the amount of congestion on the beach. The amount of bloom is found to be important - respondents are willing to pay for a program that entails 1 week of algal bloom about 33 Leva (s.e. 8.09) when there is high visibility; 21 Leva (s.e. 5.75) with medium visibility and 9 Leva (s.e. 3.48) with low visibility. Respondents are willing to pay more for programs that offer shorter duration of algal bloom. The marginal price for one metre of extra space between the respondent and the nearest person is equal to 0.38 Leva.
    Keywords: marine ecosystem; threshold effects;
    Date: 2009
  4. By: Dileep V. Mavalankar; Tapasvi I. Puwar; Dipti Govil; Tiina M. Murtola; S.S. Vasan
    Abstract: Background In this working paper, a preliminary estimate of the immediate cost of chikungunya and dengue to the Indian state of Gujarat has been estimated by combining nine earlier studies on major cost factors such as costs of illness and control, and thus building a more comprehensive picture of the immediate cost of these Aedes mosquito-borne diseases to Gujarat. Methods Costs of illness and vector control comprise the immediate cost of chikungunya and dengue. In this working paper, cost of illness has been calculated using the RUHA matrix approach. Using the shares of reported (R) and unreported (U) hospitalised (H) and ambulatory (A) cases of chikungunya and dengue, a RUHA matrix has been constructed for the state of Gujarat. Cost of illness has been estimated by combining this matrix with ambulatory and hospitalisation costs per case and the number of reported cases. For this study, chikungunya and dengue were assumed to be identical from the point of view of disease control and management. Vector control cost includes state and municipal expenditure to prevent/control these diseases, a conservative fraction of the household insecticides market, and private sector cost. Comparisons with Asian countries have been used to estimate a parameter if direct data is unavailable. Monte-Carlo sensitivity analysis was carried out to find out how uncertainties in each cost parameter affected the total cost of chikungunya and dengue. Findings Using Monte-Carlo sensitivity analysis, the immediate cost of chikungunya and dengue to Gujarat has been estimated to be 3.7 (range 1.6-9.0) billion rupees per annum. This is a preliminary estimate; research is in progress to refine key parameters from the Monte-Carlo analysis such as ambulatory cost per case and reporting rate. The emotional and long-term burden of illness and deaths due to these diseases including impact on tourism, education, economic growth, per capita income, FDI, etc. are beyond the scope of this study. Extrapolating from Gujarat to the whole of India (after adjusting for the relative number of cases in each state and differences in state GSDP per capita), the immediate cost of chikungunya and dengue to the whole of India is approximately INR 61 billion (range INR 26-148 billion). Interpretation The annual cost of INR 3.7 billion (range INR 1.6-9.0 billion) translates to approximately INR 66 per capita (range INR 29-159), or US$ 1.6 (range US$ 0.7-3.8) per capita using an exchange rate 42 INR/US$. Comparable cost of dengue is US$ 5.3 in Malaysia and US$ 6.2 in Panama, while Brazil spends US$ 4.3 per capita on dengue prevention alone. The differences in these costs can be partially be explained by roughly five times higher GDP per capita in Malaysia, Panama and Brazil than in Gujarat. However, higher incidence of chikungunya increases the relative cost in Gujarat. As policy makers weigh investments in new technologies and expanded use of existing interventions to control neglected tropical diseases, the economic cost of illness is a major input into decision making. It is hoped that this preliminary estimate will trigger more refined studies on cost of illness as well as cost-effectiveness of vaccines and other interventions to combat these neglected tropical diseases
    Date: 2009–01–27

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