Ecotourism development and the heterogeneity of tourists

Abstract

Ecotourism is potentially capable of making biodiversity conservation and ecosystem management economically feasible. Here, we propose a simple model for ecotourism development considering the heterogeneity of tourists, motivated by the case of Jeju Island, South Korea. We analyze the optimal investment in accommodation capacity (i.e., hotels, restaurants, and transportation) and in improving the quality of the environment (i.e., biodiversity, landscape, and cultural activities). “General tourists” are abundant but will not return to the focal site, and their future number is unpredictable, while “loyal tourists” may return to the site if they are attracted by its environmental and/or cultural assets. The analysis shows that the economically profitable policy is either the one with a large investment in accommodation capacity targeting general tourists or the one with a large investment to environmental quality targeting loyal tourists, but an intermediate mixture of these extremes cannot be the optimal. We also discuss “zoning,” in which a site is separated to two areas, and many visitors stay in the first area and visit the second area to enjoy the high-quality environment.