Implications of a long-term increase in oil prices for tourism

It is expected that global oil prices will increase in the future. Assessing the overall economic impacts on tourism is difficult, as oil price rises will be concomitant with global changes in other commodity prices, exchange rates, and incomes. A general equilibrium perspective is therefore presented in this paper. The model couples a global general equilibrium model with a purpose-built CGE model of New Zealand, which focuses on describing tourism supply and demand in some detail. The results indicate a decrease in real gross national disposable income of 1.7% for a doubling of oil price and a 9% reduction in the real value of tourism exports. As a result of segment-specific price increases and differing income and exchange rate effects and elasticities, the reduction in demand for tourism in New Zealand by 18 segments differs substantially. The greatest reduction in demand is observed for tourists from the United Kingdom.     

Economics of tourism investment in data scarce countries

Ex-ante economic impact analyses are required to demonstrate the development impact and viability of multilateral loans. These assessments are often performed under tight timelines, in data scarce environments and with limited opportunity for primary data collection. This paper develops a framework for assessing tourism interventions under these challenging conditions and evaluates a US$15 million tourism investment in Belize. This paper contributes to the literature by: (i) developing a generalizable approach to building economy-wide models in data scarce environments; (ii) generating realistic expectations of agent responses with quasi-contingent valuation and auto-regressive integrated moving average methods. Applying the first economy-wide model for Belize, results show that the investment would stimulate GDP by 3% and reduce unemployment from 12% to 10% by 2040.     

The economic impact of tourism in SIDS

Small Island Developing States (SIDS) are faced with many challenges to economic development. Tourism is seen as a viable, and sometimes, only means of economic growth. This research compares the economic impact of tourism to seven SIDS. The research employs input output analysis, linkage analysis and a CGE model to assess the macroeconomic and sectoral impacts of increased tourism in these islands. The findings show that the transportation sector remains a key sector. The tourism income multipliers show that tourism generates a large amount of economic activity but the income that remains in the destinations is often very small. The results show that taking advantage of economies of scale maybe a way to maximize the benefits from tourism.     

Appraising the Economic Impact of the “Opening up to Mainland Chinese Tourist Arrivals” Policy on Taiwan with a Tourism-CGE Model

The purpose of this study is to establish a tourism-CGE model to appraise the “opening up to Mainland Chinese tourist arrivals” policy on Taiwan. Using the model, this study suggests that the multiplier effect of the Mainland Chinese tourists’ expenditure in Taiwan is 1.378, which is slightly lower than that for tourists from Japan and Korea. With 1,000 (3,000) Mainland Chinese tourist arrivals per day, labour demand for about 48,000 (144,000) people would be created, along with 38,146 (114,463) million New Taiwan dollars volume of product, which would account for about 0.354% (1.063%) of annual GDP growth. The results also reveal that the policy would not necessarily contribute positively to every industry, and industrial restructuring might occur. Finally, some tourism policy recommendations are discussed.     

Taxing tourism: enhancing or reducing welfare?

Using a modified simple general equilibrium model of international trade, the theoretical construct proposed by this research note shows that taxing tourism may increase or decrease economic benefit depending on the destination's market power. Yet, from a social point of view, taxing tourism can be welfare-enhancing, as externalities of rapid tourism growth should be internalized. Therefore, a social rather than a private optimum should be pursued via taxing tourism in order to guarantee sustainable tourism. From political economy perspectives, however, the actual taxation policies may not be welfare-enhancing, as they heavily depend on the political system and power relations in the destination.