| By: |
Sauveur Giannoni (Laboratoire Lieux, Identités, eSpaces et Activités (LISA));
Juan M. Hernà ndez (Universidad de Las Palmas de Gran Canaria);
Jorge Pérez-Rodriguez (Universidad de Las Palmas de Gran Canaria) |
| Abstract: |
Academic literature on the relationship between tourism and eco- nomic growth
expands steadily. This literature supports the Tourism-Led Growth Hypothesis
(TLG). Although it seems obvious that tourism-led growth is possible only if a
destination does not experience stagnation in demand, no previous theoretical
paper addresses the crucial issue of the compatibility between TLG and the
potential occurrence of a stagnation phase in the destination. The aim of this
paper is to fill this gap and to provide a framework of tourism-led growth
accounting for the possibility of rejuvenation strate- gies. A model of growth
for a tourism-based economy is built following Romer (1986). Two theoretical
results are obtained. Provided some conditions are satisfied, it is possible
to identify a market- segment compatible with sustained growth. A stagnating
destination can switch to a new market segment for which the level of welfare
is higher in the long-run. The common practice that consists in upgrading the
quality of supply to focus on new markets is supported as a suitable practice
in order to achieve optimal welfare. Conclusions of the model are tested with
real data from two Spanish archipelagos, Canary and Balearic islands.
Empirical results points to clear success of the reorientation strategy in the
Balearics. The case of Canary islands is controversial since the reorientation
strategy was not simultaneously implemented in the territory. |
| Keywords: |
tourism-led growth, learning-by-doing, market-segment, re- juvenation |
| Date: |
2017–03 |
| URL: |
http://d.repec.org/n?u=RePEc:lia:wpaper:003&r=tur |