Spatial Displacement and Sustainable Heritage Tourism

Transcription

1 TI /2 Tinbergen Institute Disussion Paer Satial Dislaement and Sustainable Heritage Tourism Silvia Caserta Antonio Paolo Russo

2 Tinbergen Institute The Tinbergen Institute is the institute for eonomi researh of the Erasmus Universiteit Rotterdam, Universiteit van Amsterdam and Vrije Universiteit Amsterdam. Tinbergen Institute Amsterdam Keizersgraht EG Amsterdam The Netherlands Tel.: 3.( Fax: 3.( Tinbergen Institute Rotterdam Burg. Oudlaan PA Rotterdam The Netherlands Tel.: 3.( Fax: 3.( Most TI disussion aers an be downloaded at htt://

3 MORE MEANS WORSE Asymmetri information, satial dislaement and sustainable heritage tourism Silvia Caserta Antonio Paolo Russo Tinbergen Institute, Erasmus University Rotterdam Abstrat This aer analyses the market transformations in heritage tourism destinations when exessive tourism demand determines the emergene of a lass of exursionists among visitors. Building on the aroah of Keane (997 and Shairo (983, our model highlights some imortant dimensions of sustainable tourism develoment. The lesser aaity of exursionists to learn the true quality of the tourist goods inreases the onveniene for roduers to ut bak on quality. To ontinue to serve high quality goods and kee u the reutation of the destination as demand ontinues to grow, roduers need to gain a mark-u on rie that might not be sustained in a ometitive market. Hene the deline in high-aying demand segments whih are inreasingly susbstituted by visitors with lesser quality exetations. In the end, the dynamis exlained with this aroah are onsistent with and reresent an eonomi reinterretation of the lass of evolutionary models known as destination life yle, when they are alied to heritage ities. The regulator ahieves a sustainable growth if it ould enfore quality or information standards. However, the roess should be managed at a satial level that is rarely mathed by formal administrative ometenies. Traditional tourism strategies are seldom suessful when they try to revent exessive growth by disouraging daily visits. This model hels to identify alternative and more aroriate oliy instruments. Keywords: Sustainable tourism, heritage tourism, exursionists, quality, reutation.

4 . Introdution The rogressive enlargement of the satial sale of tourism ativity is a reurrent feature of tourism develoment in historial sites and heritage ities. The inreasing oularity of ultural tourism brings about develoment and hysial transformation in historial ities, but it faes the onstraint laed by the limited and inflexible nature of entral remises and resoures. As a onsequene, the tourism industry though rivileging roximity to the entral assets is ushed to exand and diffuse in tourist regions that ould be oneived as funtional regions with reset to the entral destination areas. Suh satial dynamis are by no means without onsequenes for the viability of ities, and the sustainability of the roess of hange is questioned. The ossibility for tourist destinations to stagnate and deline after growth and maturity is exliitly onsidered in the lass of evolutionary models known as destination life-yle, introdued in geograhi studies by Christaller (963 and made oular as a onetual sheme for tourism develoment by Butler (980. Aording to this model, the different stages of develoment are the result of hanges in the demand as determined by exessive ressure on environmental and soial assets. Desite its widesread influene in tourism studies, the deterministi nature of the life-yle and its unlear onsideration of demand-suly interation has attrated ritiism whih is best enasulated in Haywood (986, 998. However, even as desritive models, life-yles have never been very oular with regard to urban tourism, and in artiular heritage tourism. One reason may be that the late develoment of ultural tourism (omared to leisure and 3S vaations does not offer many examles of omlete yles to be observed and analysed. Moreover, the very meaning of deline is in this ase ambiguous: heritage destinations do have euliar harateristis that make the straightforward aliation of the life-yle sheme not as redible as in other ontexts. The ultural assets inherited from the ast are irreroduible and highly seifi to the loal historial ontext and ultural and identity. Demand is therefore relatively inelasti and it is diffiult to gras how in ratie a deline in tourism an our. Yet, there are lear signs that tourism might beome unsustainable for many heritage destinations. The huge inrease in visitors/residents ratios, as well as the on-going banalisation of tourism roduts, indiate that tourism is growing too muh, and in an unbalaned way. Exessive eonomi and hysial ressure from tourist affets other urban funtions whih are vital for tourism itself to endure as an eonomi systems, suh as the maintenane of a lively soial fabri and the reservation of ultural assets. In the end, this may ause tourism itself to stagnate and deline, as it is foreseen by the life-yle sheme: a real drama for ities that have develoed inreasingly deendent on tourism eonomy. So far, this is nothing new for the lifeyle suorters. However, to be made oerational as a normative tool, the life yle needs to be eonomially founded and made fit to reresent the euliar ontext of heritage destinations. Russo (200 rooses to analyse the sustainability of tourism develoment in heritage ities in a satial setting. The life-yle dynamis may be oneived as the result of a ersistent inrease in the share of exursionists among visitors. These have a euliar visitation attern that in ratie suorts the deline in 2

5 the quality of tourist roduts, a further stimulus to the deentralisation of tourist flows. This viious irle may ersist until tourist regions beome so large reset to inner ities that the reeits from tourism are hardly internalised and reinvested in the maintenane of the quality and integrity of ultural resoures. A ermanent deline of tourist attrativeness for the whole urban region may then follow. This artile fouses on the eonomi mehanism that is at the ore of the roess desribed above, that of quality deline. What are the inentives for a highly visited heritage destination to suly high-quality tourism servies? This issue of quality and riing of tourist destinations has been addressed by Keane (996, 997, utilising the toolkit of reutation models develoed by Shairo (983. In his works, Keane rightly suggests that information asymmetries between visitors and roduers may lead to a loss of ometitiveness of tourist destinations. However, his analysis misses the imortant distintion between different lasses of visitors, as it is assumed that all onsumers have the same aess to information. This aer extends Keane's analysis onsidering distint tyes of onsumers. A entral assumtion of the model resented here is that the satial harateristis of a visit to a ity (daily exursions as oosed to entral overnight stays influene the market behaviour of the agents. This mehanism, whih oerates through the informational asymmetries generated by the redution of time budgets, has imortant onsequenes on the sustainability of tourism develoment. In this setting, it an be shown that reeated urhases of the exeriene good may not be enough to sustain high quality roduts. This formalisation fits well in the ontext of heritage destinations, roviding some foundation to the life-yle dynamis, based on simle market arguments than to hard-to-identify externalities. The next setion lays the bases of the model roosed in Setion Three. In Setion Four the imliations of the model are studied, while Setion Five refers bak to the general roblem of tourism develoment and Setion Six onludes with some oliy suggestions. 2. Assumtions We intend to analyse the determinants of riing and quality in a heritage ity. The following assumtions on the market and satial struture of the loal tourist market are made for simliity of exosition. Our heritage ity onsists of a ore, or historial entre, where all the rimary attrations (non reroduible, non transferable, sulied in given quantity and quality are loated; and of a erihery, or tourist region, that does not ossess historial features but may aommodate hotels and other tourist failities. The erihery is defined in funtional terms as the area that serves the tourist funtions of the ore. As long as it aommodates tourists, and earns their revenues, it is art of the tourist system entred on the ore, no matter what its extension is. In ratie, the tourist region extends over the territory that hosts for more than 24 hours or two suessive nights visitors who send a art of their time in the historial entre. Therefore, all the seondary origins of a journey to a tourist destination are inluded.,2 That is, all those destinations hosting false and indiret exursionists as defined by van der Borg and Gotti (995. Indiret exursionists to a destination are triers who visit it from another vaation site 3

6 DECISION OF VISITING THE CITY Deends on quality of the rimary resoures (heritage. As long as it is onstant, demand grows exogenously with world tourist demand ACCOMMODATION Consumed in the entre or in the erihery Pries: monoolisti (from roximity to resoures or imerfet ometition Quantity: onstrained in the entre, infinite in the erihery. Quality: given or assumed lower in the entre CULTURAL PRODUCTS Consumed in the entre Pries: free-market or belowost (non rofit Quantity: onstant Quality: deends on state/region transfers TOURIST GOODS Consumed in the entre Pries: monoolisti (from roximity to resoures or imerfet ometition Quantity: infinite Quality: deends on roduers strategi behaviour Fig. - Consumtion in the heritage ity The ity attrats a yearly flow of visitors. A visit to the ity imlies a sequene of deisions (Fig.. The reliminary deision whether to visit the ity or not deends on the quantity and quality of its ultural and historial attrations. At this stage, we assume suh onditions as given, and the yearly rate of inrease in tourist demand is given by world trends. As tourist flows are growing almost everywhere, we an assume that there is an inreasing number of visitors that every year hooses a ertain ity as their destination. Then, visitors must deide uon the aommodation. They an hoose to stay in a entral aommodation and visit the ity as tourists, or to stay in a eriheral aommodation within the region and visit the ity as day triers. The visitors who hoose an aommodation in the entre are alled tourists or entral visitors (CV. Those who hoose a eriheral aommodation are alled exursionists (EV: to visit the ity, they behave just like ommuters, reahing the destination during the day and going bak to their aommodation site at night. In hoosing whether to visit the ore and go bak to that site within the day. False exursionists visit the ity as the main destination of their journey, but send the night somewhere else. The visitation attern of the two ategories of exursionists, who add to the real day triers oming from and returning to their habitual lae of residene, is quite different. The former visit the ity in one day and are tyially only marginally motivated by ultural reasons; the latter may organise their visit in more days and their rimary interest is related in the ity's heritage and attrations. 2 The theoretial limits to the extension of suh region deend on ommuting time: one annot visit a entral loation if the time needed to reah it takes more than the time-budget available. Therefore, given a rest time of A hours and a minimum duration of the visit of B hours, the tourist region has a maximum width of S, whih omrehends all the destinations from where you an reah the ore in less than t = 24 A B hours. 4

7 as tourists or exursionists, visitors trade off the higher hotel ries in roximity to the resoures, with the lower ries of the erihery, disounting also for the transort osts. In the end they hoose entral or eriheral aommodation aording to their budget; moreover, beause of limited aaity, they are subjeted to a first ome first served rule. In fat, the tourist aaity of the historial ore is limited by hysial sae. The ossibility to enlarge the tourist funtion building skysraers or reonverting rivate houses into hotels, et. is sare, so that there is a maximum number of tourists that an be aommodated in the entre. Often this maximum is regulated, in other ases it is left to the free market. This onstraint on tourism outlets in the entre determines a loation monooly, or a highly imerfet market, for hotels and other failities in the ity entre 3. In the erihery, aaity an be exanded without limits. Therefore, aommodation ries are higher in the entre and deline with distane from the entre. The latter urhase deision regards the tourist akage itself. The akage omrehends the rimary roduts (heritage and other ultural attrations, and seondary or aessory tourist goods like restaurants, sightseeing, transort, souvenirs, et. The ultural heritage is sold at ost (or below ost, as in the ase of merit goods sold by subsidised institutions, and has onstant quality. The tourist goods are sold in the entre in a monoolisti market 4. The monoolist, in addition to setting the rie, also deides uon the quality to be rodued. The overall quality of the tourist exeriene, therefore, deends on the given quality of the heritage or ultural ontent of the visit, and on a variable omonent that deends on the market strategy of the suliers. Therefore, even if the quality of the historial assets is given and it is not ontrolled by tourist suliers, the quality of the akage may deteriorate if tourist goods of low quality are sulied. In reality, the given omonent of quality of the heritage is affeted in the long term by the amount of finanial means that are hannelled in the maintenane of the heritage. Inreasingly, ities have to ount on their own resoures to rodue suh means: they will ome from the tourist market and from the ontributions of taxayers. We will disuss in the last setion how this may affet the long-term outome of develoment. In the model, however, we will fous on a short-term horizon in whih the quality ontent of rimary roduts does not hange. All the visitors, tourists and exursionists, urhase the tourist akage during their visit. It is assumed that they have erfet information about the ultural heritage, but imerfet information about tourist goods that are tyial exeriene goods. Exursionists are different from tourists, in that they an alloate less of their time 3 Sinlair and Stabler (997: introdue the distintion between a loal market and inter-ity ometition. Oerators in both markets may have varying degrees of market ower. In the intra-ity ometition, ometition is strong where there is no historial loalised entre and leisure attrations are diffused (e.g. holiday resorts, mountain resorts, sa, while roximity to historial attrations in heritage ities guarantee a ertain degree of loation monoolisti ower. Intra-ity ometition is harsher in leisure tourist market where destinations are highly substitutable one another, whereas it is lesser in ultural tourism, where destinations have a high degree of uniqueness due to the euliar nature of historial and man-made resoures. 4 The assumed monoolisti market struture is due to the loation advantages enjoyed by suliers in a situation where the land in roximity of the main tourist attrations is limited. Even without assuming ollusion on the roduers site, they obviously oerate in a highly imerfet ometitive environment; it an therefore be hyothesised that they at as if they were monoolists. Keane (997, utilising the ontestable markets framework, finds that the same results are obtained in a ometitive setting. 5

8 budget to visiting the ore, and beause they do not make use of the failities (like servies offered by entral hotels where tourists get free information and oortunities to build u their visiting itinerary. More generally, visitors that ome just for the day visit only the most entral attrations (and onsume a limited amount of tourist goods beause those are the only ones that fit in their tight time shedule and money budget, and beause in doing just what all the others do they redue searh osts to a minimum 5. Hene, they have more roblems of assessing the true quality of the goods on offer, beause they have fewer oortunities to learn from omarison, both in terms of number of daily urhases and in terms of variety of laes. If the time-eriod is the daily visit to the ity, they need more daily visits to learn what overnight visitors an learn in a one-day visit. This exaggeration aroximates suffiiently well the fat that there is a ertain asymmetry in the learning aaity between tourists and exursionists, whih is onfirmed by the satial analysis of visits erformed in seleted tourist destinations (ICARE 997. One entral assumtion of this aer, therefore, is that exursions to a ity imly a limited aaity to learn basi features of the ity's tourist rodut (of whih quality is an imortant omonent with reset to rolonged or entral visits. One visitors learn (via diret observation and onsumtion the quality of the tourist akage, they deide if they will reeat the urhase or not. Beause the quality of the rimary roduts is given, the real deision variable is the quality of the tourist goods. For simliity, we assume that a mehanism of roagation of the monoolist's reutation takes lae by word-of-mouth. The introdution of reeat urhases (in this set-u not from reeat visitors, but from the ones who have been informed by friends and relatives reresents a ruial inentive for a roduer to suly a fair level of quality. In fat, given the tyial transient nature of onsumtion in the tourism industry, a moral hazard roblem on the roduer's side is easily deteted. In this framework, reeat urhases may avoid the moral-hazard roblem only if the monoolist has built a reutation for high quality. The lassial model of Shairo (983, extended to a monoolisti set-u by Tirole (997, is based on the onet that the osts assoiated with the future loss of sales have to exeed the urrent ost savings of utting quality. In this way a mehanism is reated that revents the monoolist from sulying hea quality in eah eriod. However, reeat urhases indue high quality rovision only if two onditions are met: onsumers learn the quality of the urhased objet quikly enough; 2 they urhase many times (Tirole 997: 2. The formal develoment of model resented next (based on Shairo 983, Tirole 997, and Keane 997 suggests that these onditions may fail to be satisfied when satial dislaement of tourist ativities is onsidered. 3. The model The market for tourist akages is suh that the monoolist an hange the sulied quality in eah eriod, where the number of eriods is infinite, t=, 2,. There are two levels of quality s: s 0 = 0 (low quality and s = (high quality. The existene of a minimum quality is neessary for the existene of the market; it an be oneived as 5 This oint is made in Towse (99. This author refers to the ase of art ities, taking Venie as a symboli examle. Searh osts are assumed to be osts inurred by visitors to gather information about the exat loation, ontent and aess of the ultural-tourist suly. 6

9 the minimum quality level under whih onsumers will be able to detet the fallaies of the rodut just by insetion, that is, before the urhase. Therefore, if a lower quality than the minimum is sold, nobody would buy it. Everybody is interested in buying one unit of the tourist goods, whose rodution osts is 0 if s = s 0 and if s = s, with > 0, and the ost funtion is inreasing in quality. Equivalently, the rie for the high quality good is and 0 for the low quality. Visitors are divided in two grous: CV (entral visitors, or tourists, and EV (exursionists. They are all haraterised by a taste arameter θ, in suh a way that utility of onsumtion of the tourist goods, exressed in eah eriod, is: U θ s = 0 if one buys at rie otherwise Assuming that all visitors refer high quality, for any given rie, a visitor with a high θ is more willing to ay to aquire high quality. Alternatively, θ is interreted as the inverse of the marginal rate of substitution between inome and quality. Consequently, visitors with a high initial wealth have a higher θ, beause they have a lower marginal utility of inome (Tirole, 997: 97. The taste arameter is distributed on the oulation aording to a umulative distribution funtion F(θ, on [0, ]. This means that F(θ is the erentage of tourists with a taste arameter less than θ. Hene a visitor with arameter θ buys the tourist akage of quality s at rie if his taste arameter is suh that θ s. For a visitor to buy the high quality rodut we need to have θ. The total oulation of visitors is normalised to, of whih a erentage is made of tourists and a erentage ( is made of exursionists. Exursionists are different from tourists in the time, after urhase, that they need to learn the quality of the tourist good. Seifially: if the reutation of the monoolist at time t is defined as the exeted quality at time t: E(s t R t then we assume that tourists are suh that R t =R CV t = st n, and for exursionists R t =R EV t = st n, with n < n. Here n and n reresent the time lag between the sale of an item and the adjustment of reutation on the basis of the disovered quality. This means that exursionists are defined as those who need more time to learn the true quality. CV Let us assume, for simliity, that the tourists learn the quality in one eriod, i.e. R t = s t - while it takes n eriod to the exursionists, i.e. R EV t = s t - n, with n>. CV Moreover R = and R EV =, imlying that the eonomy starts with high quality and high exetations. The interest rate er unit of time is i, so that the one-eriod interest rate is r = e -i - and therefore the disount rate for time eriod is e i = r In general, we look for an equilibrium rie suh that the following strategies are otimal: Visitors base their exetations of quality on the monoolist's reutation, and 7

10 8 2 The monoolist begins selling high quality (s= at rie and ontinues to do this in the following eriods. If he should deviate, starting to sell low quality (s=0, the onsumers would not buy anymore. Given the monoolist s strategy (i.e. in every eriod he hooses the quality of the revious eriod, the onsumers strategy is otimal. Given the onsumers strategy, the following hold for the monoolist: in ase he follows the above defined strategy, his rofit is: in ase he deviates from this strategy, his rofit is: Then, a neessary ondition for a equilibrium (that is, a neessary ondition for the otimality of the strategy ursued by the monoolist is that whih imlies: The above inequality suggests that the monoolist has an inentive to suly high quality roduts only if he an earn a quality remium. 4. Analysis of the quality remium Let us define Then the variable 0 ( ( ( (...] [ ( (...] [ ( 2 2 = = ( ( ( = ( 0 ( ( ( the disount rate to be onsidered for EV is ( and where n r r = = ( ( ( = k ( ( ( ( ( = k k m

11 orresonds to a mark-u variable and it an be used as a measure for the differene between rie and ost for high quality tourist goods. The equilibrium equation beomes: m ( - 0 As an immediate onsequene we an dedue that, keeing the erentage of entral tourists and exursionists onstant, qualities higher than the minimum one have a higher rie than their rodution osts and that the quality-remium is greater for higher qualities. Moreover, an inrease of the minimum quality level rodues a redution of the quality-remium. In the extreme ase in whih =, that is if all visitors were tourists, the ondition redues to: - r( - 0 and if = 0, that is if all visitors were exursionists, it beomes: - [(r n ] ]( - 0 These exressions 6 show that the remium required to sustain an equilibrium with high quality is larger in the ase in whih there is only a oulation of exursionists omared to that needed in the ase of only tourists, and it is larger the longer their learning time. It is so, beause a longer learning time imlies a longer time to detet the diminished quality, giving the monoolist greater inentive for utting quality. Moreover, the ase in whih there are only entral tourists reresents a lower bound for the level of the mark-u. It an now be analysed how m hanges when the share of tourists hanges and when the learning time n of the exursionists hanges. In the first ase we have that the derivative of m = m(, n with reset to is m m = = ( ( ( [ ( ( ( ] 2 < 0 This exression imlies that when dereases the mark-u will beome higher. In fat, a greater erentage of exursionists inreases the rofit that a firm an make by milking its reutation, hene it inreases the quality remium. m Fig. 2 The quality remium m as a funtion of the share of entral visitors 6 These orresond to the two ases analysed in Shairo (983: 667;

12 For examle, if we fix n = 3 and r = the diagram of m as a funtion of is desribed in Fig. 2. It an be also shown that the first derivative of m is inreasing with reset to n, imlying that a longer learning time on the exursionists side, rodues a higher mark-u, the exlanation being as before. Again, fixing r = and = ½, the relation between the two variables is desribed in Fig. 3. m n n Fig. 3 The quality remium m as a funtion of the exursionists' learning time Different rie-quality shedule rodues different welfare effets 7. As m rises, for instane, as a result of the gradual inrease in the share of exursionists [ ], onsumers would substitute towards lower quality goods as the rie for high quality goods inreases. Moreover, some onsumers would sto buying the good altogether. On the ontrary, as m falls there are welfare gains for onsumers, sine this orresonds to a redution in information osts assoiated with establishing a reutation as high quality roduer. This an be ahieved if information asymmetries between roduer and onsumers were reoued, or, as in the ontext of this aer, if the learning roblem assoiated to visiting ities as exursionists were mitigated by an information rovision rogram. For instane, roviding information on tourist routes, labelling high quality roduers, or romoting E-ommere for some tourist ommodity would imrove the aaity of any visitor whatever their mode of visiting the ity to detet low quality and avoid urhasing it. It is the ase to note that even reduing the share of exursionists may ahieve the same objetives, but in fat this has revealed an imratiable oliy otion for most Euroean heritage ities (Van der Borg and Gotti 995. It must also be added that the er aita welfare gains from redutions in m through information oliies would be greater for those to whom quality is more imortant. This is artiularly imortant for heritage ities as it is hoed that high quality tourists are also more willing to reward the true value of the heritage assets. Further welfare gains an be ahieved by setting minimum quality standards through ertifiation, atents, et. Shairo argues that for a onvenient s 0 this strategy may ahieve non-ambiguous outomes. However, he also highlights that inreasing minimum quality standards rodues a net aital loss for roduers who have already established a reutation as high quality rodues, hene the likely resistane from the industry. Anyway, the fous of our study stands not so muh in the welfare of visitors, as in the aaity of heritage ities to sustain unbalaned 7 The analysis of the welfare effets is derived from Shairo (983. 0

13 atterns of tourist growth in an inreasingly ometitive market. The onsequenes of inertial growth and oliy intervention are analysed in the next setion. 5. Conditions for sustainable tourism develoment in heritage ities and oliy otions Our version of Keane s (and Shairo s aroah to the issue of quality in tourism destinations has highlighted that in a zero intervention senario, with tourism ressure growing unbounded in guise of day tris, it beomes inreasingly rofitable for a roduer to suly low-quality goods. As a onsequene, either the market disaears, or a remium rie must be aid so that the osts of building a reutation as high quality roduer are overed. Therefore, enduring tourism develoment imlies that the rie of high-quality tourist goods is rather high. To the extent to whih tourism develoment is omatible with the develoment of a diverse and wealthy loal eonomy, this outome is sustainable. We an assume that it is unlikely that tourists deide to substitute exensive heritage destinations with heaer ometitors, as it haens in the Caribbean resorts examle of Keane 8. However, suh an outome is not sustainable in the long term if the meaning of sustainability is broader than the mere viability of tourism as an otion to develoment (Hunter, 997. In fat, the inflationary tendeny assoiated to tourism growth via the qualityremium mehanism learly has onsequenes on the entire urban eonomy. It is reasonable to assume that tourists budgets have some kind of uer limit: tourist ries annot grow indefinitely. Whereas a few suerstar destinations would be able to attrat afiionados millionaires however ostly they are, in the majority of ases, above a ertain rie threshold, ometing destinations would ontend a ity's market share offering similar exerienes at heaer ries. Then roduers would antiiate a ossible ontration of the market lowering quality. At this oint, the ity must reinvent itself as a low-quality tourist destination, hoing to attrat tourists with a lower referene arameter and ahieving in this way lower market ries that sustain the exansion ath. From this oint of view, the dynamis of the life yle an be seen as ourring for eah market segment at a time. The deline of a destination as a tourist destination for a seifi segment oinides with the take off for a lowerquality segment, with a lower willingness to ay. As quality delines, the destination loses aeal for high-quality visitors (as Shairo finds in his model and the ity sirals down towards heaer quality standards. The destination ontinues to be heavily visited, but its market rofile downgrades. In some way, this onlusion is onsistent both with Plog's syhograhis aroah 9 to destinations develoment. However, even though markets an substitute one another, ities are not indifferent among them. First, quality delines are refleted in worsening onditions for residents, whose demand basin overlas with that of tourists for many elements of the tourist akage (e.g. food. If the tourist / resident ratio is high, residents will bear a widesread deline in quality. This is ommonly observed in tourist ities where the 8 More in general, the oint that standard demand theory is inadequate in exlaining the destination hoies of visitors is made by Paatheodorou ( Plog (994 utilises the toolbox from syhograhi analysis, desribing the evolution in the erformane of tourist ities as the result of the hanging omosition of the visitors motivations, from syhoentri to alloentri attitudes.

14 residents have to turn to suburban shoing malls and non-tourist areas for daily urhases. Seondly, if a tourist ity wishes to diversify its eonomy and beome less deendent from a highly unstable industry as tourism, it should rojet an image of an attrative and qualitative lae where to invest (Van den Berg and Braun, 999. However, this is not an otion at hand due to the dynamis analysed in the model. The reutation of heritage ities is more often than not that of laes with very high oortunity osts that do not sell value for the money they ask. Tourist reeits Time / market segments High-senders Low-senders Overnight stays Time / market segments Fig. 4 The life-yle as a suession of market segments with dereasing urhasing ower An alternative exlanation of heritage tourism unsustainability refers to the onsideration that low-quality demand segments have a lower aaity to ay for the rimary roduts, the heritage attrations. Therefore, it is the total reeits of the heritage industry to erform a life-yle ath 0 (Fig. 4, rather than the total number 0 The idea of rofit yles as a maroeonomi aroah to tourism develoment is also suorted by researhers suh as Haywood (986, Debbage (990 and Ioannides (992. In our setting, though, general and setor maroeonomi trends are negleted, and loal fators assume a greater imortane. 2

15 of visitors. The heritage is then restored, reserved and made aessible to visitors as long as a omlementary industry earns good money; 2 visitors are willing to alloate a art of their budget on ultural visits. Its aaity to generate revenues is high as long as the destination is oular among high sending and high demanding tourists, and rogressively delines as these give way to less sohistiated visitors. And sine tourism demand is originally generated by a high quality ultural environment, this rogressive loss of value generation aaity from the heritage with less and less money reinvested in onservation and inreasing deendeny from external funding and transfer feeds a generalised loss of attration aaity for the tourist destination as a whole. The model an be onveniently enrihed to desribe how visitors substitute ultural with non-ultural goods within their tourist akage when the ries of non ultural goods inrease. In fat these two goods are very imerfet substitutes; when the rie of the first inreases, the quantity urhased an derease only to a limited extent, e.g. eonomising on foods and beverages. Visitors may then deide just to stroll around the ity rather than visiting museums or attending erformanes for whih a rie is aid. Conversely, if the rodution of high quality goods requires too high a rie in order to be sustainable (for instane, due to the numerial ressure from exursionists, roduers will ut on quality. Thus, only those with a low taste arameter (and a lower willingness to ay onsume the good, while those with high taste arameter may exit the market. These long-term extensions learly require a higher level of sohistiation in the modelling of demand, and we leave it to further researh. The imortant thing to note is that when the quality mehanism oerates, the finaning of the heritage industry beomes less and less deendent on loally generated revenue and inreasingly deendent on external soures and transfers. The framework in whih ultural oliies oerate beomes inreasingly rigid and in an age of rogressive deentralisation and resonsibilisation of loal autonomies it is more and more diffiult to raise the money to reserve monuments and sites. In other words, and turning the argument uside down, it is suggested that seial transfers aorded by national states to heritage reservation, like the one on whih Venie an ount (50 billions of Euro eah year, in the long term may reresent a safety net that indue irresonsible behaviour from tourism oerators and the boundless exansion of tourism regions. Were the same amount of money utilised to subsidise a high-quality tourist rodution, the results in terms of sustainability ould imrove signifiantly. 6. Final remarks This artile fouses on the onsequenes of inreasing tourist ressure on heritage destinations. The very nature of heritage destinations where the suly of entral aommodation is limited guarantees that the exansion of demand has marked satial features, as it may haen in the erihery of entral, histori areas. To sustain a high-quality tourist market, ries have to inrease aordingly. This is due to a entral assumtion of this aer, the lesser aaity of non-entral visitors, or exursionists, to learn the true quality of the tourist goods. The sustainability of this roess is dubious, if the reation of the market is taken into aount: visitors an substitute exensive tourist goods with inexensive exerienes, or hange destination 3

16 altogether. This learly affets the viability of heritage reservation, and the attration aaity of the area with it. This reinterretation of the destination life-yle, based on strategi behaviour of agents in the tourist market, is onsistent with the euliar harateristis of heritage ities. It also yields lear indiations for oliy. In his enlightening disussion of the relation between the sustainability of tourism and sustainable develoment, Hunter (997 suggests that the relation between the endurane of tourism develoment is too often and too simlistially equated to the general notion of sustainability of develoment for a tourist destination. Instead, he rooses that that sustainable tourism is a aradigm that deends on (adats to the ontexts in whih it is alied. He onludes that in «old and develoed tourism areas», where tourism has beome dominant in the loal eonomy, sustainability an be ahieved by a rodut-led tourism develoment strategy. However, our disussion highlights that in rinile, if the ressure from the global exansion of demand for ultural tourism ontinues to inrease, endurane of tourism an be ahieved only at the exenses of quality. This is ertainly inomatible with the reservation of the ultural assets on whih tourism develoment is based. Therefore, a riority in tourism develoment oliies should be the maintenane of quality through effetive destination management. Quality labelling and tourism signalling may ahieve desirable outomes in this sense; further oortunities are given by tehnologial develoments as e-ommere and tele-booking, whih erode roximity and information advantages by monoolists. The availability of digital tehnologies to interret and make aessible the ultural suly at no ost for the ities is a romising alternative to hard and uninformed visits. Suh aliations and their widesread integration might bring about an enormous inrease in the value generated by the heritage. At the same time, the market ower of obtrusive tourism ommere in historial entres is redued, as well as the deendeny of heritage reservation on unstable external revenue soures, is mitigated. More generally, a re-distributive mehanism between entral and eriheral loations in tourism regions is ertainly a more effiient way to fund heritage reservation and ultural develoment strategies than deendene on lum sum transfers from the national budget. Referenes Ashworth, Gregory John, and J.E. Tunbridge (990, The Tourist-Histori City, Belhaven Press, London. Butler, Rihard W. (980, The Conet of a Tourist Area Cyle of Evolution: Imliations for the Management of Resoures, Canadian Geograher 24 (: 5-2. Christaller, Walter (963, Some onsiderations on tourism loations in Euroe: the eriheral regions underdeveloed ountries rereation areas, Regional Siene Assoiation Paers 2: 03. Debbage, Keith (990, Oligooly and the resort yle in the Bahamas, Annals of Tourism Researh 7(4: Haywood, K. Mihael (986, Can the tourist-area life-yle be made oerational?, Tourism Management, 6:

17 Haywood, K. Mihael (998, Eonomi business yles and the tourism life-yle onet, in The Eonomi Geograhy of the Tourism Industry. Ed. by D. Ioannides and K. G. Debbage, Routledge, London and New York. Hunter, Colin (997, Sustainable tourism as an adative aradigm, Annals of Tourism Researh 24 (4: ICARE - International Center for Art Eonomis (997, Aliazione della Telematia alla Gestione dei Flussi di Visitatori. Researh Center Teleom Italia S. Salvador, mimeo. Ioannides, Dimitri (992, Tourism develoment agents: the Cyriot resort yle, Annals of Tourism Researh 9 (4: Keane, Mihael J. (996, Sustaining Quality in Tourism Destinations: an Eonomi Model with an Aliation, Alied Eonomis 28 (2: Keane, Mihael J. (997, Quality and Priing in Tourism Destinations, Annals of Tourism Researh 24 (: Paatheodorou, Andreas (200, Why eole travel to different laes, Annals of Tourism Researh 28 (: Plog, Stanley C. (994 Develoing and using yhograhis in tourism researh, in Travel, tourism and hositality researh, 2nd ed.. Ed. by J. R. B. Rithie and C. R. Goeldner, Wiley, NY. Russo, Antonio P. (200, The «viious irle» of tourism develoment in heritage destinations, Annals of Tourism Researh 29 (. Shairo, Carl (983, Premiums for high quality as returns to reutations, The Quarterly Journal of Eonomis 98: Sinlair, M.Thea and Mihael Stabler (997, The eonomis of tourism. Routledge, London. Tirole, Jean (997, The theory of industrial organization. MIT Press, Cambridge. Towse, Ruth (99, Venie as a Suerstar. Paer Presented at the Conferene on «The Eonomis of the Cities of Art», 3-5 May 99, Venie, mimeo. Van den Berg, Leo, and Erik Braun (999, Urban ometitiveness, marketing and the need for organising aaity Urban Studies 36 (5-6: Van der Borg, Jan and Giusee Gotti (995, Tourism and Cities of Art. UNESCO/ROSTE Tehnial Reort n. 20, Venie. 5