Part III: tourism Part III: tourism dynamicsdynamics

Taxonomy of tourism Taxonomy of tourism destinationsdestinations

Travel & tourism: an Travel & tourism: an experienceexperience

Tourism consumption is an Tourism consumption is an experience. experience. These experience is anThese experience is an attraction.attraction.

The perception of these experience is The perception of these experience is subjective.subjective.

Quality is not directly observable.Quality is not directly observable.

The marginal decreasing utility The marginal decreasing utility principleprinciple

According to economic theory, the According to economic theory, the utility of a good decreases with the utility of a good decreases with the consumed quantity.consumed quantity.

In tourism, time (duration of holiday) In tourism, time (duration of holiday) is the quantity unit (Q).is the quantity unit (Q).

The satisfaction (S) a tourist may The satisfaction (S) a tourist may benefit from a destination is linked to benefit from a destination is linked to the duration of the stay (d).the duration of the stay (d).

The D-attractionThe D-attractionS

dd*

The D-attractivenessThe D-attractiveness

In these case, experience is motive by a In these case, experience is motive by a precise goal (D for discovery).precise goal (D for discovery).

d* indicates the optimal duration of a stay d* indicates the optimal duration of a stay (it is a satiety point). In these point, S is (it is a satiety point). In these point, S is maximal.maximal.

Examples D-attractions: urban tourism, Examples D-attractions: urban tourism, museum, historical sites & monuments, museum, historical sites & monuments, commercial tourism.commercial tourism.

The E-attractionThe E-attractionS

d

The E-attractivenessThe E-attractiveness

The tourist had no precise goal. The The tourist had no precise goal. The experience is evasion (E).experience is evasion (E).

The tourist experience is more The tourist experience is more “active” and more repetitive.“active” and more repetitive.

Examples: domestic tourism (family Examples: domestic tourism (family visit), sport tourism.visit), sport tourism.

The tourism attractiveness: a The tourism attractiveness: a complex of attractioncomplex of attraction

A D-attraction or a E-attraction : a A D-attraction or a E-attraction : a combination of several D-attractions.combination of several D-attractions.

Tourism attraction: a Tourism attraction: a packagepackage

S

d

Tourism attraction: a package Tourism attraction: a package (II)(II)

S

d

The innovation perspectiveThe innovation perspective

The innovator change d* for The innovator change d* for increasing tourism receipts with the increasing tourism receipts with the same number of touristssame number of tourists..

The innovator transform a D-The innovator transform a D-attraction into a E-attraction.attraction into a E-attraction.

Part III. Tourism Part III. Tourism dynamicsdynamics

Innovation and tourism Innovation and tourism challengeschallenges

COMPETITION INNOVATION

DefinitionsDefinitions

The distinction invention/innovation The distinction invention/innovation (J.A. Schumpeter)(J.A. Schumpeter)

The 3 dimensions of innovation:The 3 dimensions of innovation:– new tastes and preferences of the new tastes and preferences of the

consumersconsumers– new technology to increase the new technology to increase the

productivityproductivity– New geographical marketNew geographical market

The life cycle theoryThe life cycle theory

The life cycle determine the rhythm The life cycle determine the rhythm of diffusion of a new productof diffusion of a new product

INNOVATION COMPETITION DIFFUSION

The logistic curve (S-shaped The logistic curve (S-shaped curve)curve)

time

CMS

CMS: the cumulative market share

Incubationphase

Take-off phase saturation phase

The diffusion processThe diffusion process

The incubation phase: the R&D The incubation phase: the R&D period.period.

The take-off phase: the success of The take-off phase: the success of innovation.innovation.

The saturation phase: the market The saturation phase: the market limit.limit.

The phases classificationThe phases classification

IncubationIncubation Take-offTake-off saturationsaturation

Firms Firms numbernumber

-- ++ --

Nature of Nature of informatioinformationn

Existence of Existence of the product the product and its and its utilityutility

Quality/Quality/price ratioprice ratio

priceprice

The market evolution : a The market evolution : a sequence of different life sequence of different life

cyclescycles

R&DR&D

The tourism market The tourism market evolutionevolution

Sea & sun tourism

Eco-tourism

Cultural tourism

Spatial tourism ?

TIME

Sustainable trend

Life cycle examples in Life cycle examples in tourismtourism

incubationincubation Take-offTake-off saturationsaturation

Sea & sun in Sea & sun in the 50sthe 50s

Sea & sun in Sea & sun in the 60-70sthe 60-70s

Sea & sun in Sea & sun in the 90Ssthe 90Ss

Eco-tourism in Eco-tourism in the 70sthe 70s

Eco-tourism in Eco-tourism in the 80sthe 80s

Sport tourism Sport tourism in the 90sin the 90s

Fluvial Fluvial tourism in 90stourism in 90s

Spatial Spatial tourism in tourism in 20002000

Attraction Attraction park in the park in the 90s90s

R&D: definition and functionR&D: definition and function

In the industry, innovation (new In the industry, innovation (new product and new technology) is an product and new technology) is an economiceconomic but but stochasticstochastic (random) (random) output :output :

capital

Labor, skills

?

New product

New technology

Public and private R&DPublic and private R&D

Traditionally, public R&D finance Traditionally, public R&D finance fundamental researchfundamental research to increase the to increase the collective knowledge (science).collective knowledge (science).

Firms use the knowledge to develop Firms use the knowledge to develop new product or new technology: new product or new technology: applied researchapplied research..

Recent evolution and Recent evolution and challengeschallenges

Private companies or organizations Private companies or organizations (foundations) finances scientific (foundations) finances scientific research:research:– scientific program are more expensive;scientific program are more expensive;– Public budget are limited;Public budget are limited;– The Nobel price example.The Nobel price example.

Knowledge = intellectual property ?Knowledge = intellectual property ?

The role of Patent: definition & functionThe role of Patent: definition & function

The dynamical interactionsThe dynamical interactions

Invention &knowledge

innovation

Productivitypush

Market pull

Economic growth

Fiscal revenuePublic R&D

Private revenuesPROFIT

PRIVATE R&D

The R&D managementThe R&D management

R&D activities faces 4 questions:R&D activities faces 4 questions:– determine the global level of R&Ddetermine the global level of R&D– Select (evaluate) the different research Select (evaluate) the different research

programprogram– Anticipate the market evolutionAnticipate the market evolution– Allocate the budget for each project.Allocate the budget for each project.

The tourism R&DThe tourism R&D

In tourism, research concern the In tourism, research concern the conception of a new tourism package.conception of a new tourism package.

A new tourism site or destination is A new tourism site or destination is always the result of the application always the result of the application and development of a new idea.and development of a new idea.

Give examples of new ideas or Give examples of new ideas or concepts in tourism.concepts in tourism.

The R&D tourism: 6 phasesThe R&D tourism: 6 phases

1. Selecting the site

2. Information research

3. Creation of a partner networkAnd data base

4. Prototype elaboration

5. Economic evaluation

6. edition

Researchphase

Developmentphase

Technicaldimension

Marketingdimension

Part. III: Tourism Part. III: Tourism dynamicsdynamics

The tourism market: a The tourism market: a dynamical perspective.dynamical perspective.

The role of externalitiesThe role of externalities

What is externalities ?What is externalities ?

Externalities influence the tourism Externalities influence the tourism demand.demand.

2 kind of externalities:2 kind of externalities:– Positive (knowledge, fashion, security, Positive (knowledge, fashion, security,

peace)peace)– Negative (pollution).Negative (pollution).

Tourism demand curve with Tourism demand curve with externalitiesexternalities

Price

Tourism arrivalsTA*

Positiveexternalities

Negative externalities

MARKET ANALYSISMARKET ANALYSIS

In the first phase, externalities are In the first phase, externalities are positive: tourists attract tourists positive: tourists attract tourists (fashion).(fashion).

In these case, TA is an indicator of In these case, TA is an indicator of quality (because quality is not directly quality (because quality is not directly observable).observable).

In the second phase, externalities are In the second phase, externalities are negative: tourists repulse tourists negative: tourists repulse tourists (saturation, pollution, acculturation).(saturation, pollution, acculturation).

Equilibrium market with Equilibrium market with externalitiesexternalities

Price

Tourism arrivals

The supply curve with high fixed costs

TA1 TA2

EQUILIBRIUM ANALYSISEQUILIBRIUM ANALYSIS

TA1 is not stableTA1 is not stable TA2 is stable but not sustainable TA2 is stable but not sustainable

(because superior to TA*)(because superior to TA*) The objective of innovation: to obtain The objective of innovation: to obtain

a a stablestable AND AND sustainablesustainable equilibrium: equilibrium:– the product-innovation move the the product-innovation move the

demand curve (a negative demand demand curve (a negative demand shock);shock);

– the process-innovation move the supply the process-innovation move the supply curve (a negative supply shock).curve (a negative supply shock).

A negative demand shock: A negative demand shock: change the mentality and change the mentality and

preferencepreferencePrice

Tourism arrivalsTA2TA*

TA*TA2

A negative supply shock: legal A negative supply shock: legal restriction to protect restriction to protect

environmentenvironmentPrice

Tourism arrivalsTA2TA*

TA*TA2