Part III: tourism dynamics Taxonomy of tourism destinations

Travel & tourism: an experience Tourism consumption is an experience. These experience is an attraction. Tourism consumption is an experience. These experience is an attraction. The perception of these experience is subjective. The perception of these experience is subjective. Quality is not directly observable. Quality is not directly observable.

The marginal decreasing utility principle According to economic theory, the utility of a good decreases with the consumed quantity. According to economic theory, the utility of a good decreases with the consumed quantity. In tourism, time (duration of holiday) is the quantity unit (Q). In tourism, time (duration of holiday) is the quantity unit (Q). The satisfaction (S) a tourist may benefit from a destination is linked to the duration of the stay (d). The satisfaction (S) a tourist may benefit from a destination is linked to the duration of the stay (d).

The D-attraction S d d*

The D-attractiveness In these case, experience is motive by a precise goal (D for discovery). In these case, experience is motive by a precise goal (D for discovery). d* indicates the optimal duration of a stay (it is a satiety point). In these point, S is maximal. d* indicates the optimal duration of a stay (it is a satiety point). In these point, S is maximal. Examples D-attractions: urban tourism, museum, historical sites & monuments, commercial tourism. Examples D-attractions: urban tourism, museum, historical sites & monuments, commercial tourism.

The E-attraction S d

The E-attractiveness The tourist had no precise goal. The experience is evasion (E). The tourist had no precise goal. The experience is evasion (E). The tourist experience is more “active” and more repetitive. The tourist experience is more “active” and more repetitive. Examples: domestic tourism (family visit), sport tourism. Examples: domestic tourism (family visit), sport tourism.

The tourism attractiveness: a complex of attraction A D-attraction or a E-attraction : a combination of several D-attractions. A D-attraction or a E-attraction : a combination of several D-attractions.

Tourism attraction: a package S d

Tourism attraction: a package (II) S d

The innovation perspective The innovator change d* for increasing tourism receipts with the same number of tourists. The innovator change d* for increasing tourism receipts with the same number of tourists. The innovator transform a D-attraction into a E-attraction. The innovator transform a D-attraction into a E-attraction.

Part III. Tourism dynamics Innovation and tourism challenges

COMPETITIONINNOVATION

Definitions The distinction invention/innovation (J.A. Schumpeter) The distinction invention/innovation (J.A. Schumpeter) The 3 dimensions of innovation: The 3 dimensions of innovation: – new tastes and preferences of the consumers –new technology to increase the productivity –New geographical market

The life cycle theory The life cycle determine the rhythm of diffusion of a new product The life cycle determine the rhythm of diffusion of a new product INNOVATION COMPETITION DIFFUSION

The logistic curve (S-shaped curve) time CMS CMS: the cumulative market share Incubation phase Take-off phase saturation phase

The diffusion process The incubation phase: the R&D period. The incubation phase: the R&D period. The take-off phase: the success of innovation. The take-off phase: the success of innovation. The saturation phase: the market limit. The saturation phase: the market limit.

The phases classification IncubationTake-offsaturation Firms number -+- Nature of information Existence of the product and its utility Quality/price ratio price

The market evolution : a sequence of different life cycles R&D

The tourism market evolution Sea & sun tourism Eco-tourism Cultural tourism Spatial tourism ? TIME Sustainable trend

Life cycle examples in tourism incubationTake-offsaturation Sea & sun in the 50s Sea & sun in the 60-70s Sea & sun in the 90Ss Eco-tourism in the 70s Eco-tourism in the 80s Sport tourism in the 90s Fluvial tourism in 90s Spatial tourism in 2000 Attraction park in the 90s

R&D: definition and function In the industry, innovation (new product and new technology) is an economic but stochastic (random) output : In the industry, innovation (new product and new technology) is an economic but stochastic (random) output : capital Labor, skills ? New product New technology

Public and private R&D Traditionally, public R&D finance fundamental research to increase the collective knowledge (science). Traditionally, public R&D finance fundamental research to increase the collective knowledge (science). Firms use the knowledge to develop new product or new technology: applied research. Firms use the knowledge to develop new product or new technology: applied research.

Recent evolution and challenges Private companies or organizations (foundations) finances scientific research: Private companies or organizations (foundations) finances scientific research: – scientific program are more expensive; –Public budget are limited; –The Nobel price example. Knowledge = intellectual property ? Knowledge = intellectual property ? The role of Patent: definition & function The role of Patent: definition & function

The dynamical interactions Invention & knowledge innovation Productivity push Market pull Economic growth Fiscal revenue Public R&D Private revenues PROFIT PRIVATE R&D

The R&D management R&D activities faces 4 questions: R&D activities faces 4 questions: – determine the global level of R&D –Select (evaluate) the different research program –Anticipate the market evolution –Allocate the budget for each project.

The tourism R&D In tourism, research concern the conception of a new tourism package. In tourism, research concern the conception of a new tourism package. A new tourism site or destination is always the result of the application and development of a new idea. A new tourism site or destination is always the result of the application and development of a new idea. Give examples of new ideas or concepts in tourism. Give examples of new ideas or concepts in tourism.

The R&D tourism: 6 phases 1. Selecting the site 2. Information research 3. Creation of a partner network And data base 4. Prototype elaboration 5. Economic evaluation 6. edition Research phase Development phase Technical dimension Marketing dimension

Part. III: Tourism dynamics The tourism market: a dynamical perspective.

The role of externalities What is externalities ? What is externalities ? Externalities influence the tourism demand. Externalities influence the tourism demand. 2 kind of externalities: 2 kind of externalities: –Positive (knowledge, fashion, security, peace) –Negative (pollution).

Tourism demand curve with externalities Price Tourism arrivals TA* Positive externalities Negative externalities

MARKET ANALYSIS In the first phase, externalities are positive: tourists attract tourists (fashion). In the first phase, externalities are positive: tourists attract tourists (fashion). In these case, TA is an indicator of quality (because quality is not directly observable). In these case, TA is an indicator of quality (because quality is not directly observable). In the second phase, externalities are negative: tourists repulse tourists (saturation, pollution, acculturation). In the second phase, externalities are negative: tourists repulse tourists (saturation, pollution, acculturation).

Equilibrium market with externalities Price Tourism arrivals The supply curve with high fixed costs TA1TA2

EQUILIBRIUM ANALYSIS TA1 is not stable TA1 is not stable TA2 is stable but not sustainable (because superior to TA*) TA2 is stable but not sustainable (because superior to TA*) The objective of innovation: to obtain a stable AND sustainable equilibrium: The objective of innovation: to obtain a stable AND sustainable equilibrium: – the product-innovation move the demand curve (a negative demand shock); – the process-innovation move the supply curve (a negative supply shock).

A negative demand shock: change the mentality and preference Price Tourism arrivals TA2TA* TA2

A negative supply shock: legal restriction to protect environment Price Tourism arrivals TA2TA* TA2