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Aspects to justify public tourism promotion An economic perspective

Aspects to justify public tourism promotion An economic perspective In its efforts to foster tourism development the state has the choice of either giving direct grants or stimulating specipc investments and promoting cooperation through lowinterest loans. In either case, the effort is aimed to improve the supply and preserve the competitive capacity of destinations. Public funds also flow into national and regional tourism organisations NTOs and RTOs established to coordinate and market tourism products and destinations. State promotion of tourism constitute an intervention in the market mechanism which needs to be expressly justified in a market economy context. Market failure, transaction costs and the growthstimulating effect of promoting innovation and knowledge are the fundamental conditions for state intervention necessary conditions, even though by themselves they are not sufficient to justify intervention. This also requires a costbenefit analysis a state measure is advantageous only when it causes an improvement in the overall economic welfare sufficient condition. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Tourism Review Emerald Publishing

Aspects to justify public tourism promotion An economic perspective

Smeral, Egon
Tourism Review , Volume 61 (3): 9 – Mar 1, 2006
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References (2)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1660-5373
DOI
10.1108/eb058474
Publisher site
See Article on Publisher Site

Abstract

In its efforts to foster tourism development the state has the choice of either giving direct grants or stimulating specipc investments and promoting cooperation through lowinterest loans. In either case, the effort is aimed to improve the supply and preserve the competitive capacity of destinations. Public funds also flow into national and regional tourism organisations NTOs and RTOs established to coordinate and market tourism products and destinations. State promotion of tourism constitute an intervention in the market mechanism which needs to be expressly justified in a market economy context. Market failure, transaction costs and the growthstimulating effect of promoting innovation and knowledge are the fundamental conditions for state intervention necessary conditions, even though by themselves they are not sufficient to justify intervention. This also requires a costbenefit analysis a state measure is advantageous only when it causes an improvement in the overall economic welfare sufficient condition.

Journal

Tourism Review – Emerald Publishing

Published: Mar 1, 2006

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