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International Tourism: Real and Monetary Flows

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The Economics of Tourism Destinations

Part of the book series: Springer Texts in Business and Economics ((STBE))

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Abstract

In Chap. 2 we classified tourism flows in international (incoming and outgoing) and domestic tourism. While in statistical terms international tourism was identified by the movement from one country to another for tourism purposes, in this chapter we will highlight that the relevant economic fact linked to international tourism is not the crossing of a border, but the presence (and the fluctuation) of the exchange rate between the home country’s and the destination’s currencies. Hence, from an economic perspective, we are faced with international tourism when tourists (and more generally market operators) are subject to the currency exchange, with all the risks involved with its variation over time.

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Notes

  1. 1.

    For example, in the European market the main airline groups are the strategic alliances Air France/KLM, British Airways/Iberia, and Lufthansa, and the low-cost company Ryanair.

  2. 2.

    As regards the role of ideology in Tourism Economics, with particular reference to the effect of globalization, see Tribe (2011, Chap. 18).

  3. 3.

    For a general discussion on the effects of globalization on poverty, see: Figini and Santarelli (2006) and Lee and Vivarelli (2004). For applications to the tourism sector, see Blake et al. (2008) and Figini and Romaniello (2012).

  4. 4.

    Clearly, the model holds if tourism production does not depend on environmental or cultural resources. In a more realistic but complex setup, the concentration or the diffusion of tourism firms is not only linked to economies of scale and to transport costs but also to the location of natural and cultural goods. Moreover, the structure of the transport network and hubs can make tourists moving easier in certain directions than in others, as underlined in the previous subsection.

  5. 5.

    Since in textbooks and in practice both relationships are used, for completeness we have shown both. We understand that this is confusing, as it confuses many professional agents, but the notation will become more familiar as the study continues.

  6. 6.

    The calculation of the real exchange rate requires the identification of the same good in two different countries: a widespread method refers to a famous product that is found all over the world, the Big Mac from McDonald’s; the weekly magazine The Economist has been computing and publishing for years the real exchange rate using this good, the so-called Big Mac’s Index .

  7. 7.

    Given that the main source of income for the hotel is the ordinary management of reservations, it does not make sense for the hotel to expose itself to such risks, otherwise the hotel would be considered a sort of gambler.

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Authors and Affiliations

  1. Department of Economics, University of Bologna, Bologna, Italy

    Guido Candela & Paolo Figini

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  1. Guido Candela
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  2. Paolo Figini
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Candela, G., Figini, P. (2012). International Tourism: Real and Monetary Flows. In: The Economics of Tourism Destinations. Springer Texts in Business and Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-20874-4_14

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  • DOI: https://doi.org/10.1007/978-3-642-20874-4_14

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