Does Regional Tourism Benefit from the Official Quality Rating of Tourist Attractions? Evidence from China’s Top-grade Tourist Attraction Accreditations

Abstract

ABSTRACT China National Tourism Administration began to grade the quality of tourist attractions in 2001, which is used by tourist attractions to signal their tourism quality, attract tourists, and thus increase tourism revenue. However, few studies have examined the impact of official quality rating on the regional tourism economy. This paper uses China’s prefectural city panel data from 2000 to 2015 to evaluate the impact of the accreditation of top-grade tourist attractions on the regional tourism economy. Our empirical study with the two-way fixed effects panel data model finds that while top-grade quality ratings promote tourism revenue and tourist arrivals, the effect is heterogeneous: it decreases over time, has become negative since 2007, lasts less than four years, is more statistically significant for domestic tourism and is larger in less developed areas. The results suggest that Chinese tourism administrations should be aware of the costs that official accreditation have for regional tourism economies, as the market has become increasingly competitive.