TOURISM AND SUSTAINABLE ECONOMIC DEVELOPMENT

TOURISM AND SUSTAINABLE ECONOMIC DEVELOPMENT

edited by

Amedeo Fossati Department of Economics and Fiscal Studies

University of Genova, Italy

and

Giorgio Panella Department of Public Economics

University of Pavia, Italy

~.

" Springer Science+Business Media, LLC

Library of Congress Cataloging-in-PubUcation

Tourism and sustainable economic development I edited by Amedeo Fossati and Giorgio Panella. p. cm.

"Papers presented at a conference on Tourism and sustainable economic development held in Imperia, Italy, on 29th May 1998" -Pref. Includes bibliographical references ISBN 978-1-4613-6940-0 ISBN 978-1-4615-4321-3 (eBook) DOI 10.1007/978-1-4615-4321-3

1. Tourism-Economic aspects-Congresses. 2. Sustainable development-Congresses. I. Fossati, Amedeo, 1937- II. Panella, Giorgio. G155.Al T58938 2000 338.4'791--dc21 00-055992

Copyright c 2000 by Springer Science+Business Media New York Originally published by Kluwer Academic Publishers, New York in 2000 Softcover reprint ofthe hardcover lst edition 2000 This printing is a digital duplication of the original edition.

Ali rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo-copying, recording, or otherwise, without the prior written permission of the publisher, with the exception of any material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work.

Printed on acid-free paper.

CONTENTS

List of Contributors Introduction Preface and Acknowledgements

PART I Tourism and sustainable development: theory and planning

1. Tourism and sustainable development: a theoretical

vii ix

xiii

framework 3 A. Fossati and G. Panella

2. Tourism, marketing and telecommunication: a road towards regional development 37 P. Nijkamp

3. Why are tourism countries small and fast-growing? 57 A. Lanza and F. Pigliaru

4. The strategic importance of the cultural sector for sustainable urban tourism 71

A.P. Russo and J. Van der Borg

5. The management of cultural goods: sustainable and unsustainable development of art cities 99 G. Mossetto

6. The provision of amenities by agriculture and rural tourism 117 F. Bonnieux and P. Rainelli

PART II Instruments and policies 143

7. Economic instruments for sustainable tourism development 145 A. Markandya

8. Land markets and transfer of development rights: some examples in France, Italy, and the United States 159 V. Renard

vi

9. Tourism development through the quality area plans M. Antonioli Corigliano

10. Social expectations and sustainable tourism development: the territorial pact F. Losurdo

11. The impact of climate change on flows of British tourists D. Maddison

INDEX

191

209

233

251

LIST OF CONTRIBUTORS

Magda ANTONIOLI CORIGLIANO Bocconi University, Italy e-mail: magda.antonioli@uni-bocconi.it

Fran~ois BONNIEUX INRA, Rennes, France e-mail: bonnieux@roazhon.inra.fr

Amedeo FOSSA TI University of Genova, Italy e-mail: fossati@economia.unige.it

Alessandro LANZA International Energy Agency, Paris, France, and University College, London e-mail: lanza@iea.org

Franco LOSURDO University of Bari, Italy e-mail: f.losurdo@lex.uniba.it

David MADDISON Centre for Social and Economic Research on the Global Environment University College, London e-mail: d.maddison@ucl.ac.uk

Anil MARKANDY A University of Bath, United Kingdom e-mail: hssam@bath.ac.uk

Gianfranco MOSSETTO University Ca' Foscari, Venezia, Italy e-mail: nexa@doge.it

Peter NIJKAMP Free University, Amsterdam, The Netherlands e-mail: pnijkamp@econ.vu.nl

viii

Giorgio PANELLA University of Pavia, Italy e-mail: panella@unipv.it

Francesco PIGLIARU University ofCagliari, Italy and University of London, U.K. e-mail: pigliaru@unica.it;fp@soas.ac.uk

Pierre RAINELLI INRA Unite d'economie et sociologie rurales, Rennes, France e-mail: rainelli@roazhon.inra.fr

Vincent RENARD Ecole Poly technique, Centre Nationale de Recherche Scientifique, Paris, France e-mail: renard@poly.polytechnique.fr

Antonio Paolo RUSSO Erasmus University, Rotterdam, The Netherlands e-mail: russo@few.eur.nl

Jan Van Der BORG Ca' Foscari University,Venezia, Italy e-mail: vdborg@helios.unive.it

INTRODUCTION

For many countries tourism is an industry of great economic significance; tourism is seen as a main instrument for regional development, as it stimulates new economic activities. Tourism may have a positive economic impact on the balance of payments, on employment, on gross income and production, but it may also have negative effects, particularly on the environment. Unplanned and uncontrolled tourism growth can result in such a deterioration of the environment that tourist growth can be compromised: we are left with the phenomenon known as "tourism destroys tourism". The environment, being the major source of tourist products, should therefore be protected in order to have further growth of tourism and economic development in the future: sustainable tourism and sustainable economic development should be reflected upon.

Questions arise as to whether it is possible to keep on developing tourism in a certain area without negative or irreversible influences on the environment. Should we promote tourism and in so doing accept a certain degree of environmental deterioration, or should we give priority to environmental protection and accept less revenue from tourism? The answer hinges on the links between tourism and the environment and vice versa. A good deal of tourism relies upon resources or assets that either cannot be reproduced or cannot easily be reproduced. This is especially true with regard to tourism based on the natural environment as well as on historical­cultural heritage.

This book provides a theoretical framework for these problems, as well as practical illustrations on the following topics:

• the conditions under which specialization in tourism is not harmful for economic growth;

• the trade-offs, if any, between tourism development and economic growth;

• the need for government intervention and the various policy options and instruments available to policy makers.

The book comprises two parts. The first part presents general views on tourism and sustainable economic development, and some opinions on the relationship between tourism and the environment. Some of the basic concepts implicit in sustainability are examined in relation to regional

x

development, urban tourism, art cities and rural tourism. The second part concentrates on strategies and policy instruments.

In the first chapter, Amedeo Fossati and Giorgio Panella describe the positive and adverse effects of tourism activities and the conditions under which sustainable development can be achieved. In defining these conditions economists have found it useful to differentiate between strong and weak sustainability. Strong sustainability tends to stress the limits to substitutability because of the importance of irreversibility, particularly with regard to certain critical aspects of natural capital. Weak sustainability, on the other hand, requires only that the total capital stock be maintained, allowing substitution between man-made and natural components. This distinction is important in order to define the strategies to apply in relation to tourism and economic development. The transmission to future generations of a quantity of natural capital that provides a sustained yield of economic and environmental services, including amenities, is relevant. Translating sustainability goals into action necessitates changing economic policies to maintain natural capital.

The subject has been further developed by Peter Nijkamp. He argues that a balance has to be found between economic growth and ecological preservation of tourist areas. The level of tourist expenditures is to be evaluated against the social costs of the sector concerned. He offers some numerical results on a meta-analytical experiment on tourist income multipliers in various tourist areas.

The role of natural resources as a main factor of economic development has been further analysed by Alessandro Lanza and Francesco Pigliaru. Cross-country data for 1985-95 on tourism specialisation and economic growth reveal the following data: i) many tourism countries have grown faster compared to other countries; and ii) they are small. A two-sector endogenous growth model to obtain explanatory hypotheses about these findings has been used. In particular, the conditions required for small countries to specialise in tourism and enter a faster growth path have been analysed. The suggestion is that what matters is a country's relative endowment of a natural resource, rather than its absolute size.

This topic has also been analysed in relation to cultural tourism and art cities. The contribution by Paolo Russo and Jan van den Borg presents some guidelines for the management of tourism development in heritage cities in the context of sustainable tourism. It is argued that the organisation of the cultural sector and the quality of intersectorial links represent key organisational issues for these cities to find a place on the map of the new

xi

economic geography of Europe. At the same time, they provide a fascinating way to escape the "vicious circle" of tourism specialisation. This policy change requires an integral approach to cultural planning, with several actors being involved in its management. Examples of such policies are given for the cities of Antwerp and Venice. The Belgian city has proved successful in combining a strategy of industrial recovery with a new impulse to the tourism sector, while in the Italian town the re-organisation of the cultural system faced with the massive pressure of tourist flows has just begun to gain consensus and strength.

Gianfranco Mossetto also turns his attention to the management of art cities. The cities of art may be identified according to the specific link between their culture (and art) and their economy. One can thus consider "economy-dependent" and "culture-dependent" models, and among these, expansion and decadent (or implosive) models. The management of these cities, and therefore, their development and decongestion policies have different consequences in each situation. They may even have accelerated decadence in a context of harmful dependence of the city economy on its past culture. The usual subsidisation, as practised in Italy, proves to be a very limited and indeterminate tool.

The need for environmental goods is examined in relation to rural tourism by Fran(j:ois Bonnieux and Pierre Rainelli. The chapter, which is the last in the first part of the book, draws attention to the relationship between rural tourism and sustainable agriculture since the major part of rural amenities are provided by agriculture. The chapter provides a general framework to assess rural amenities according to their nature and how they can be captured by local communities. An illustrative example deals with sport-fishing in Lower Normandy.

The second part of the book concentrates on strategies and policy instruments. The purpose is to concisely define and bring together some policies which appear to be necessary, and whose implementation is required if we are to reconcile tourism development with the protection and conservation of the environment. Some analytical tools for policy making with regard to tourism and the environment are developed. As will become clear, there are many gaps in our knowledge that need to be filled if we are to be successful in controlling tourism in a way that puts this important industry onto a sustainable development path.

The chapter by Anil Markandya is an attempt to better understand the kind of instruments to be used, how market structure is a relevant factor in determining the levels at which controls are set, and the key parameters that

xii

determine the levels of the market based instruments. He discusses the main sources of externality in tourism and the lack of empirical estimates of parameters that measure such external effects. He also outlines some of the important stylised facts about the tourism industry, and provides a discussion on the private market equilibria for such an industry including the relation between such equilibria and the social optimum. Then, some simulations for an industry that supplies tourism services under monopolistic and monopolistically competitive conditions are reported. Finally, some further developments that need to be made in order to analyse more complex and more interesting conditions are discussed.

A tool often suggested nowadays to internalise externalities efficiently is the definition of property rights. A right is a permit from a government or public authority to perform actions. This instrument has strong proponents and opponents; it is important to carry out a careful analysis of the achievements of tradable rights in their specific objectives and social context. In chapter 8, Vincent Renard reviews the property rights approach to land management, and examines how this approach has been used in different countries.

Further instruments and policy options have been examined by Magda Antonioli Corigliano. She states that, apart from providing environmentally­oriented suggestions for territorial planning and taking into consideration the interactions with different types of tourism, it is important to consider the concept of area quality (or product area) referred to a specific tourist destination. Since a tourist product is the result of the co-production of different actors, it mainly consists of immaterial components. The tourist product is often determined by trust and experience and it is perceived and assessed by the single tourist comprehensively. Thus, the tourist destination is the ideal level to define and control a quality process as it is closer to the tourist's experience. The quality strategy of the "tourist district" is achieved by adopting and implementing a Quality Plan. It is paramount that the different suppliers adopt joint and co-ordinated actions, as operators do not necessarily achieve homogenous results.

In chapter 10, Franco Losurdo analyses the problem of coordinating the different subjects and the projects defined at local level. He starts from the concept that sustainable tourism development is an objective that should be territorialised in order to be pursued in practice. As carrying capacity varies considerably at local level, a model of sustainable development should be defined taking into consideration local conditions. Territorial pacts can be used for this purpose. Important are the conditions under which a territorial

xiii

pact may be a useful instrument for a sustainable tourism development policy.

Finally, in the last chapter David Maddison investigates the impact of climate change on the chosen destinations of British tourists. Destinations are characterised in terms of "attractors" including climate variables, travel and accommodation costs. These and other variables are used to explain the current observed pattern of overseas travel in terms of a model based upon the idea of utility maximisation. The approach permits the trade-offs between climate and holiday expenditure to be analysed, and effectively identifies the "optimal" climate for generating tourism. The findings are used to predict the impact of various change scenarios on popular tourist destinations.

PREFACE AND ACKNOWLEDEGMENTS

This book publishes a selection of the papers and communications presented at the conference on Tourism and Sustainable Economic Development held in Imperia, Italy, on 29th May 1998, organised by the Institute of Public Finance of the University of Genova and the Polo Universitario Imperiese.

The conference was funded by the Fondazione Cassa di Risparmio di Genova ed Imperia, the Amministrazione Provinciale di Imperia and the Casino of Sanremo. The editors are particularly grateful to these institutions. They would also like to express their appreciation to Bernadette Burke for revising the English language version.