Small Island Tourism Economies Research Articles

Is Caribbean tourism in overdrive? Investigating the antecedents and effects of overtourism in sovereign and nonsovereign small island tourism economies (SITEs)

PurposeDrawing on theories of development economics and sustainable tourism, this research explores the differences between sovereign and nonsovereign small island tourism economies (SITEs) and identifies the antecedents and effects of overtourism in the Caribbean.Design/methodology/approachThe research design is based on a comparative case study of selected Caribbean SITEs. Case study research involves a detailed empirical inquiry that investigates a contemporary phenomenon within its real-life context. The main purpose of a case study is to provide a contextual analysis of the conditions and processes involved in the phenomenon under study. A comparative case study is an appropriate research methodology to explore new multi-faceted concepts with limited empirical evidence.FindingsThe results confirm previous studies that nonsovereign SITEs have a distinctive overdrive toward tourism specialization. Moreover, the findings indicate that overtourism is driven by both global and domestic policy factors and generates significant economic volatility, social inequality and ecological stress. The paper discusses the tourism policy implications of the evolving economic disconnectedness, environmental decay and social tensions in SITEs in the Caribbean.Originality/valuePolicy recommendations are presented for transitioning toward a more inclusive development and strengthening the resilience of small island tourism development in the Caribbean.

Over the Caribbean Top: Community Well-Being and Over-Tourism in Small Island Tourism Economies.

The Caribbean is one of the most tourism-intense regions of the world with rising levels of over-tourism, especially in dependent small island tourism economies (SITE). More critically, mounting socio-ecological pressures are compounded by increasing climate change and enduring social vulnerabilities, thereby challenging traditional policies and paradigms of growth and sustainability. Drawing on previous studies of inclusive development and community well-being, this research paper frames and extends the phenomenon of over-tourism from a political economic perspective. Based on a historical account of small island tourism development, an in-depth case study of Aruba is presented. Recognized internationally as the ‘One Happy Island’ and one of the most tourism-dependent small island economies, the findings yield a contextualized understanding of the complex and dynamic nature of over-tourism, and identify the main antecedents and effects of over-tourism. The study discusses the evolving economic disconnectedness, environmental decay, social inequality, and institutional failures. The findings describe the role of institutional capture and policy drift which stem primarily from political as well as market forces, and have resulted in a gradual marginalization of community well-being and agency. The paper proposes an extended conceptualization of over-tourism in small island tourism economies by explicitly recognizing that the crux of the over-tourism conundrum in SITE is political in nature and institutional by nurture. Recommendations are provided for transitioning towards community-driven development by building capabilities and pathways for innovation, internalization, and institutionalization in order to strengthen the resilience of small island tourism development.

In search of inclusive tourism in the Caribbean: insights from Aruba

PurposeThe purpose of this paper is to explore the evolution of inclusive tourism in a small-island tourism economy of the Caribbean. Dubbed the “One Happy Island” in the Caribbean, the operationalization and development of direct and indirect channels of inclusive tourism are studied and discussed to foster policy guidance and future studies.Design/methodology/approachBased on an in-depth case study of Aruba, the findings yield significant insights on the unfolding of inclusive tourism within the context of a maturing small-island tourism economy in Aruba. A mix of historical socioeconomic analysis in conjunction with community resident perspectives provides an expanded framing of small-island inclusive tourism development.FindingsIn mature, small-island tourism economies such as Aruba, social and ecological disparities are particularly evident and over an extended period have exceeded direct economic contribution. The case study reveals an Aruban community experiencing significant negative socioecological impacts and subsequent diminishing economic contribution and well-being. Concerns about environmental pollution and destruction, the loss of quality of life and income equality, in addition to over construction and crowding, indicate a growing animosity toward tourism and further tourism growth.Research limitations/implicationsBased on previous studies, this study provides an extended framing of small-island inclusive tourism, which opens opportunities for further testing and validation across other small-island tourism economies. It provides a conceptual critique of classical tourism growth maxims in small-island developing states.Originality/valueThe paper provides rich historical insights using an in-depth case study approach that extends the concept and evolution of inclusive tourism in mature, small-island tourism destinations, especially in the Caribbean, thus providing a contemporary framing of inclusive tourism.

Sustainability and Resilience in Caribbean Tourism Economies: A Critical Inquiry

Despite the growth of tourism in the Caribbean, sustainable tourism studies of island societies remain fragmented and inconsistent. In this article, we provide a critical inquiry into sustainability and resilience in small island tourism economies in the Caribbean from an emic perspective, contending that current models are incompatible with understanding sustainable tourism in small island economies, let alone guiding scholars and policymakers in pursuit of strengthening resilience. We question the scientific status quo emphasizing linear modeling and steady state economics and call for a critical reconsideration of adaptation and resilience within small island economies.

Combining Tourism Economic Account and Tourism Employment Module for a best measurement of tourism at a sub-national level

For more than 15 years, the World tourism organization and other major multilateral organizations have worked on the development of reliable tools for assessing tourism related to others economic activities in a country: the tourism satellite account. Its implementation at a sub-national level is a challenging endeavour and requires going beyond this framework. A regional tourism economic account is a good answer to the demand for regional tourism economic data and to highlight the problematic of employment with a tourism employment module. This combination sheds a new light on the role of tourism in creating, preserving and diversifying jobs in the economy. We developed a regional tourism economic account (RTEA), based on the supply-side, in order to take advantage of the existence a system of regional accounts and to respond to the lack of domestic tourism data. All these developments have been applied in a French overseas region, Reunion Island. The results show their feasibility. The others ultra-peripheral regions of European Union, others European islands and more generally small island tourism economies can benefit from this experience, (i.e. all regions in which a system of regional account has been implented).

Immigration-dependent extensive growth in small island tourism economies: the cases of Aruba and Sint Maarten

Aruba and Sint Maarten are two countries within the Kingdom of the Netherlands, situated in the Caribbean. Both have embarked on a dedicated tourism-driven and highly immigration-dependent development model starting in the 1970s and 1980s, making them typical examples of ‘Small Island Tourist Economies’ or SITEs. This article focuses on one aspect of the quality of their development, which is whether this high-volume strategy has resulted in increased productivity. To that end, the development of several tourism volume indicators is compared to real gross domestic product (GDP) growth. Using real per capita GDP as an indicator, an assessment is made of labour productivity growth. Production volume has increased enormously through foreign investments and immigration, while productivity has remained stagnant. Given the intrinsic limitations of the two island territories, to achieve a sustainable strategy, Aruba and Sint Maarten need to limit production volume while attracting more productive investments and...

Modelling international tourism demand and uncertainty in Maldives and Seychelles: A portfolio approach

Maldives and Seychelles in the Indian Ocean are small island tourism economies (SITEs), both of which have relatively small populations, territorial sizes, land area and narrow productive bases. The two SITEs are surrounded by vast ocean and have an overwhelming reliance on international tourism for economic development. Variations in international tourist arrivals to these two SITEs have been affected by unanticipated oil shocks, natural disasters, crime and global terrorism, among others. An accurate assessment of the variations in international tourist arrivals, particularly the conditional volatility, is essential for policy and marketing purposes. The conditional mean and conditional variance of the weekly international tourist arrivals to Maldives and Seychelles from 1 January 1994 to 31 December 2003 for the five main tourist source countries are modelled. Multivariate models of uncertainty are estimated and tested. An assessment and interpretation of the estimates are made for policy makers and tour operators to reach optimal decisions on the basis of a portfolio approach to international tourism demand. The paper assesses four sets of country spillover effects between Maldives and Seychelles, namely (i) the own country effects for Maldives and Seychelles; (ii) the country spillover effects from the remaining four countries within each of Maldives and Seychelles; (iii) the own country spillover effects between Maldives and Seychelles; and (iv) the cross-country spillover effects between Maldives and Seychelles. The empirical results for both Maldives and Seychelles are discussed in terms of each of these components.

Modelling international tourism and country risk spillovers for Cyprus and Malta

Small Island Tourism Economies (SITEs) are developing sovereign countries that rely on tourism as a source of exports, and need a consistent inflow of foreign investment in order to facilitate economic growth. Access to international capital markets helps SITEs smooth out their consumption over time, while absorbing adverse domestic production shocks. This paper provides a comparison of tourism growth, country risk returns and their associated volatilities (or uncertainty) for 2 SITEs, namely Cyprus and Malta. Monthly data are available for both international tourist arrivals and composite country risk ratings compiled by the International Country Risk Guide (ICRG) for the period May 1986 to May 2002. The time-varying conditional variances of tourism growth and country risk returns for the 2 SITEs are analysed using multivariate models of conditional volatility. Empirical results show that Cyprus and Malta are complementary destinations for international tourists. Changes to tourism patterns in Cyprus lead to changes to tourism patterns in Malta. Hence, tour operators and national tourism promotion authorities in Cyprus and Malta should collaborate closely in marketing and promoting joint tourism products. Moreover, foreign entities interested in investing in the tourism sectors of Cyprus and Malta should consider investment projects that span a long period of time. The performance of the tourism sector and the associated composite risk are independent of each other for the two countries. However, there is a direct relationship between the tourism sectors of Cyprus and Malta and their respective country risk settings.

Tourism, congestion, taxation, and strategic interaction

This paper examines the strategic interaction between firms and governments in two Small Island Tourism Economies (SITEs). In a situation where congestion can threaten the viability of tourism industries in SITEs, we highlight the role of two factors that determine the distribution of tourists across SITEs: whether the tourism market is vertically or horizontally differentiated, and the extent to which tourists care about congestion. Under these circumstances, counterintuitive results are possible: congestion in a SITE may rise in response to tourists caring more about congestion in the SITE. Moreover, maximising tourism tax revenue emerges as a dominant strategy for governments.

Risk Management of Daily Tourist Tax Revenues for the Maldives

International tourism is the principal economic activity for Small Island Tourism Economies (SITEs). There is a strongly predictable component of international tourism, specifically the government revenue received from taxes on international tourists, but it is difficult to predict the number of international tourist arrivals which, in turn, determines the magnitude of tax revenue receipts. A framework is presented for risk management of daily tourist tax revenues for the Maldives, which is a unique SITE because it relies entirely on tourism for its economic and social development. As these receipts from international tourism are significant financial assets to the economies of SITEs, the time-varying volatility of international tourist arrivals and their growth rate is analogous to the volatility (or dynamic risk) in financial returns. In this paper, the volatility in the levels and growth rates of daily international tourist arrivals is investigated.

Modelling international tourism demand and volatility in small island tourism economies

AbstractSmall island tourism economies (SITEs) vary in their size, land area, location, narrow resource bases, economic development, overwhelming reliance on tourism and consistent inflow of foreign direct investment for economic growth. Small island tourism economics differ in their ethnic diversity, political systems, economic and environmental vulnerability, ecological fragility and the risks facing investors. Owing to natural disasters, ethnic conflicts, crime and the threat of global terrorism, there have been dramatic changes in the arrivals of international tourists to SITEs. These variations in international tourism demand to SITEs, particularly the conditional variance (or volatility) in international tourist arrivals, have not previously been analysed in the tourism research literature. An examination of the conditional volatility of international tourist arrivals is essential for policy analysis and marketing purposes. This paper models the conditional mean and conditional variance of the logarithm of monthly international tourist arrivals and the growth rate (or log‐difference) in the monthly international tourist arrivals for six SITEs, namely Barbados, Cyprus, Dominica, Fiji, Maldives and Seychelles. Diagnostic checks of the regularity conditions of the logarithm of monthly international tourist arrivals and their growth rates suggest that the estimated univariate models of trends and volatility are statistically adequate. Therefore, the estimated models are appropriate for purposes of public and private sector management of tourism. Copyright © 2005 John Wiley & Sons, Ltd.

Modelling Country Risk and Uncertainty in Small Island Tourism Economies

Small island tourism economies (SITEs) differ significantly from each other in many respects, such as their size, location, political systems, historical experience, economic prospects, ecological fragility, and vulnerability to ethnic conflicts, crime and the threat of global terrorism. Given these differences, a careful analysis of country risk (or uncertainty) and its components for SITEs is of substantial interest to private tourism operators and foreign direct investors in the tourism and hospitality industry, tourism commissions and governments. This paper provides a comparison of country risk ratings, risk returns and their associated volatilities (or uncertainty) for six SITEs for which monthly data compiled by the International Country Risk Guide are available. Monthly economic, financial, political and composite country risk returns are used to estimate univariate symmetric and asymmetric models of uncertainty. The empirical results provide a comparative assessment of the country risk returns and uncertainty for the six SITEs.

Small island tourism economies and country risk ratings

During the last two decades, there has been a growing fascination with the livelihood of islands with small populations and territories which overwhelmingly rely on tourism as a source of exports. The small island tourism economies (SITEs) analyzed in this paper were colonised, and had depended heavily on financial aid from their former colonists for infrastructure development that has declined dramatically since the collapse of the Soviet Union. These economies are developing countries which need a consistent inflow of foreign direct investment to maintain economic growth. They have limited resources, are perceived to suffer from frequent natural disasters, and the international financial community considers them to be risky entities. For this reason, the paper provides a comparison of monthly country risk ratings compiled by the ICRG for six SITEs from 1984 to 2001 and analyses the relationship between country risk and economic growth for these six SITEs using annual data from 1985 to 2000. The economic growth rate is positively correlated with risk ratings in only 13 of the 24 cases. This is a surprising result as the country risk literature asserts that increases in risk ratings are noticeably influenced by higher economic growth rates, and vice versa.

Country Risk Ratings of Small Island Tourism Economies

Over the last twenty years, there has been a growing fascination within public and academic circles about the livelihood of islands with small populations and territory which are present in each of the world's great oceans. The Small Island Tourism Economies analysed in this paper vary profoundly in their size, land area, and location. Moreover, they have depended heavily on financial aid from their former colonists for infrastructure development, which has declined dramatically since the collapse of Communism. These economies also differ in their narrow natural resource bases on land and in water, in their prospects for self reliance in economic development, and their overwhelming reliance on tourism as a source of exports. These economies are developing countries which need a consistent inflow of foreign direct investment to maintain economic growth. Such sovereign island economies differ in the extent to which they are home to a multitude of ethnic diversity, political systems, historical experience, economic and environmental vulnerability, ecological fragility, the types of risks facing private investors, and in the extent to which they are perceived as, or perceive themselves to be, insular and peripheral. In spite of the vast diversity as well as similarities, researchers are fascinated by the world of small island economies, and are intrigued by their unique features which cannot be addressed through a generalised set of rules. This paper analyses the geographical, historical, economic, tourism-oriented and institutional characteristics, as well as vulnerability to changes in the international economic, financial and political climates, of twenty Small Island Tourism Economies. The snapshot images provide a comparative assessment of the international country risk ratings, and highlight the importance of economic, financial and political risk ratings as components of a composite risk rating for Small Island Tourism Economies.