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On the economic rationality of fluctuations in tourism frequentation at nature-based destination

Giannoni, Sauveur (2011): On the economic rationality of fluctuations in tourism frequentation at nature-based destination.

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Abstract

The aim of this paper is to answer a simple question: Are fluctuations, and especially temporary decline, in frequentation always harmful for the pro�t of a tourism destination? I propose a simple model for a nature-based destination, in which the willingness to pay of a tourist for the destination depends on the stock of natural assets, and I show using simulations that there exists a rational economic incentive to experience a decrease in frequentation for a while in order to let the stock of natural assets regenerates. This is an idea already emphasized by Greiner et al. (2001) and Kort et al.(2002). I show that anyway the optimal behavior of a pro�fit-maximizing representative tourism �firm would generally lead to a monotonic frequentation path. This apparent contradiction is due to the fact that the level of frequentation is not, in the real world, set at its optimal level. Yet it could be good news if at some point, when the stock of natural assets is low, frequentation declines for a while.

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