Power laws and the market structure of tourism industry

In this article, we use both graphical and analytical methods to investigate the market structure of one of the world’s fastest growing industries. For the German and Italian datasets, we show that the size distribution of tourism industry is heavy-tailed and consistent with a power-law behavior in its upper tail. Such a behavior seems quite persistent over the time horizon covered by our study, provided that during the period 2004–2009, the shape parameter is always in the vicinity of 2.5 for Germany and 2.6 for Italy. Size of the tourism industry has been proxied by the lodging capacity of hotel establishments: hotels, boarding houses, inns, lodging houses, motels, apartment hotels, touri…

Benford's Law for economic data reliability: The case of tourism flows in Sicily

This paper proposes a data science approach based on Benford's Law to analyse tourist flows – being tourism a relevant economic sector in Sicily. In particular, we are interested in detecting irregular patterns in the numerical data that may represent manipulations, inaccuracies or biases in the self-reported data from tourism organisations. The analysis is carried out by using monthly data for arrivals and overnight stays in hotels, B&Bs, and complementary accommodations in the seven provinces of the island from January 2016 to December 2019. We perform the analysis by employing several statistical tests and through a visual inspection of the difference between the empirical distributi…

The migration–tourism nexus in the EU28

This study explores the nexus between tourism and migration on an intra-European scale over the period 2000–2015. Complex-network analysis and gravity models were the investigation methods preferred. For each year under study, we built two country-to-country networks to map and reveal the connections between states as shaped by migration stocks and tourism flows, respectively. Then, the main determinants of the correlation patterns between the two networks were investigated by several econometric analysis. Results point to a quite similar topological structure for the tourism and migration networks as well as to a significant and reciprocal direct influence between tourism and migration mo…

La simulazione delle dinamiche aziendali: tre approcci a confronto

Mentre in fisica, chimica, biologia ed altre scienze la sperimentazione è il metodo standard per fare ricerca, in molte scienze sociali, condurre un esperimento è impossibile o indesiderabile. Un esperimento consiste nel somministrare un dato trattamento ad un sistema isolato e nell’osservare cosa succede. Il sistema trattato viene confrontato con un altro sistema equivalente che non riceve il trattamento per confrontarne il comportamento. Dal momento che l’unica differenza tra i due sistemi sta proprio nel trattamento subito dal primo, e poiché i due sistemi sono isolati da altre possibili cause di cambiamento, sarà il trattamento a causare, eventualmente, il diverso comportamento dei sue …

A dynamic model to value the economic impact and the economic sustainability of tourism in a resort area

The systemic approach in studying tourism is firmly accepted in literature because of the complexity of the topic both from the supply side (the heterogeneity of goods and services making the tourism product) and the demand side (not every operator in the tourism network chain has a direct contact with tourists). To face this complexity the Input-Output analysis, theorized by Wassily Leontief, is widely used in empirical studies of tourism. Yet, in spite of such a diffusion and importance in tourism literature, the Input-Output models have several limits. In order to overcome some of these limits, the static Input-Output analysis is translated into a dynamic one by making use of System Dyna…

CLUSTERING OF TOURISM PATTERNS WITH SELF-ORGANIZING MAPS: THE CASE OF SICILY

In this paper the Self-Organizing Map algorithm is used for studying whether and which tourism flows in Sicily are synchronized, i.e. which flows show similar patterns in time and space, if any. Synchrony hunting was performed for domestic and international tourists both on a yearly and monthly basis. Local tourism, meaning the holidays spent in Sicily by residents in the island, is also considered but on a yearly basis only. The analysis makes use of time series representing the number of overnight stays in Sicily over the period 2013-2019. Results provide evidence for a domestic market overall more synchronized than the international one, both in time and space. Spatiotemporal patterns f…

Threshold rule and scaling behavior in a multi-agent supply chain

In this paper an agent-based model of self organized criticality is developed in a network economy characterized by lead time and a threshold behavior of firms. Instead of considering the aggregate production of the economy as a whole, we focus on both the propagation and amplification effects of a demand shock in the sectorial productions of a multi-agent supply chain. We study a static network structure representing a relation of firms in a lower-upper stream in an industrial organization. In our model, the individual (R, nQ) policies play an important role in generating a propagation effect across the different layers of the economy, and the propagation turns into the large fluctuations …

A complex network analysis of inbound tourism in Sicily

In this article, the complex dynamics of inbound tourism in Sicily is analyzed for the period 1998–2017. The horizontal visibility graph algorithm is used to transform the overnight stays' time series into a network whose topology is investigated by standard network analysis. Discontinuities in the domestic and international tourism demand were identified in order to detect signals of change and the timing of the directional change in tourism growth. The network degree distribution confirms the complex structure of the destination and reveals the random and thus more unpredictable nature of the international tourism demand in Sicily, compared with a more stable domestic segment. Some policy…

A Dynamic Analysis of Tourism Determinants in Sicily

This study provides an initial analysis of the key determinants of tourism in Sicily. In doing so, it responds to the general lack of a scientific approach in the study and management of tourism in Sicily. By mixing a gravity approach and system dynamics methodology, the attractiveness of Sicily is examined, taking into account both structural and promotional aspects that might affect tourism demand. The results strongly suggest that the island's natural and cultural resources, the road infrastructure and the urban environment are important determinants of tourism demand in Sicily. The findings may be useful for local authorities involved in the development of tourism, and represent a star…

Tourism and Equilibrium Quantities: A dynamic perspective

Hotel chain performance: a gravity-DEA approach

Performance in business management can be measured in terms of competitiveness and efficiency. Generally speaking, competitiveness is a comparative concept of the ability of a firm, sub-sector or country to sell and supply goods and/or services in a given market, as measured by its market share. Particularly in competitive markets, efficiency plays a key role in determining this ability but it is not, by itself, sufficient. Indeed, while competitiveness has more to do with “pursuing the correct strategy” towards the conservation and/or increase of the market share, operational efficiency is mainly a measure of how well the firm, sub-sector or country under study processes inputs to achieve …

Tourism recovery amid COVID-19: The case of Lombardy, Italy

Travel restrictions and social distancing imposed to curb the spread of the new coronavirus have been strongly hitting tourism since March 2020. Tourism forecasting literature addressed the effects of shocks in contexts characterized by a predictable route to recovery. COVID-19 is without precedents. In this article, monthly overnight stays for the period January 2010 to December 2020 are used to estimate the impact of the pandemic in Lombardy, Italy’s most affected region. A model-based approach is implemented, and the number of overnight stays up to December 2023 is forecasted. Four models are compared. Estimation results from an augmented SARIMA model suggest that, provided a new lockdo…

An ACE Wholesale Electricity Market Framework with Bilateral Trading

In this paper, an agent-based simulation model for a hybrid power market structure is presented. A bilateral transaction mechanism is combined with a uniform-pricing auction settlement in order to isolate the impact of medium-term bilateral contracts on market power and spot prices in a competitive wholesale market setting. First we describe the negotiation method for bilateral trading of energy and then introduce a new approach for bidding in the DA market based on the load duration curve. We find that, despite the conventional concerns, the foreclosure effect produced by the bilateral agreement between a generation and a retail business will not necessarily lead to higher prices, and will…

Quantitative methods in tourism and hospitality: a perspective article

Purpose The purpose of this paper is to provide an overview of past perspectives and future trends in tourism and hospitality research. Design/methodology/approach The study grounds the discussion on the timeline evolution of quantitative research methods. Findings Although still under-recognized by scholars, mixed methods represent the future of research in tourism and hospitality. Research limitations/implications The investigation is confined to quantitative methods. Originality/value No other surveys sketch a period of 150 years of quantitative analyses in tourism and hospitality.

An integrated fuzzy-stochastic model for revenue management: The hospitality industry case

Revenue management aims at improving the performance of an organization by selling the right product/service to the right customer at the right time. This task is very dependent on uncontrollable external factors. In the hospitality industry, rooms of the hotel represent perishable assets and fixed capacities at the same time. Therefore, in the case of a stochastic process for customers calling in reservations prior to a particular booking date, a common problem for hotels is to devise a policy for maximizing the total expected profit conditional on the set of bookings. We propose a fuzzy model for the hotel revenue management under an uncertain and vague environment. Fuzziness of objectiv…

Contagion and Bank Runs in a Multi-Agent Financial System

In this work we explore contagion from one institution to another that can stem from the existence of a network of financial contracts. In fact, in modern financial systems, an intricate web of claims and obligations links the balance sheets of a wide variety of intermediaries (banks, for instance) into a network structure of interdependencies that have created an environment for feedback elements to generate amplified responses to shocks to the financial system. Small shocks, which initially affect only a few institutions, can indeed spread by contagion to the rest of the financial sector and cause a crisis in the connected intermediaries. Whether the financial crisis does spread depends c…

An optimized system dynamics approach for a hotel chain management

The proposed model consists of an integrated system dynamics-data envelopment analysis approach to value, in a dynamic framework, the effects over time of the policies implemented according to the relative efficiency analysis. Rooms’ price and competing facilities (the hedonics) are the decision variables to move in order to push the hotels towards a higher relative efficiency at the end of the observation periods. In fact, in competitive markets as tourism, hotels compete for money offering differentiated quality. Moreover, according to the microeconomic theory, a producer of differentiated goods is not a price taker but a price maker. Therefore, we assume that the decision maker of the ho…

E-tourism economics: Editorial for the special issue

The 'power' of tourism in Portugal

The author analyses the upper tail of the distribution of tourism supply in Portugal from 2002 to 2009, using data from the Instituto Nacional de Estatística database. Tourism supply is defined in terms of the lodging capacity of hotel establishments in about 250 tourist destinations. The paper shows that the empirical distribution of tourism supply in Portugal is heavy-tailed and consistent with a power law behaviour in its upper tail. Such behaviour seems to be stable over the years, provided that, for the time horizon covered by the data sets, the scaling parameter is always close to the value of two. The power law hypothesis is tested positively through the use of graphical and analyti…

The contribution of human migration to tourism: The VFR travel between the EU28 member states

This study explores the correlation between human migration and that part of tourism due to people visiting friends and relatives in a foreign country. We first compared the network structure of migration stocks and tourism flows between the 28 member countries of the European Union over the period 2000–2012. Then, we performed several econometric analyses to study the main tourism determinants and the correlations between migration to tourism. The paper derives from the discussion of the results an estimate of the contribution to the overall tourism phenomenon due to visiting friends and relatives. Complex network analysis and gravity models were the investigation methods preferred.

A wholesale electricity market framework with bilateral trading

An agent-based simulation model for a hybrid power market structure is presented. A bilateral transaction mechanism is combined with a uniform-pricing auction settlement in order to isolate the impact of medium-term bilateral contracts on market power and spot prices in a competitive wholesale market setting. First we describe the negotiation method for bilateral trading of energy and then introduce a new approach for bidding in the DA market based on the load duration curve. We find that, despite the conventional concerns, the foreclosure ef- fect produced by the bilateral agreement between a generation and a retail business will not necessarily lead to higher prices, and will be manifeste…

Complexity traits and synchrony of cryptocurrencies price dynamics

AbstractIn this study, we characterized the dynamics and analyzed the degree of synchronization of the time series of daily closing prices and volumes in US$ of three cryptocurrencies, Bitcoin, Ethereum, and Litecoin, over the period September 1,2015–March 31, 2020. Time series were first mapped into a complex network by the horizontal visibility algorithm in order to revel the structure of their temporal characters and dynamics. Then, the synchrony of the time series was investigated to determine the possibility that the cryptocurrencies under study co-bubble simultaneously. Findings reveal similar complex structures for the three virtual currencies in terms of number and internal composit…

Visitor arrivals forecasts amid COVID-19: A perspective from the Africa team

Abstract COVID-19 disrupted international tourism worldwide, subsequently presenting forecasters with a challenging conundrum. In this competition, we predict international arrivals for 20 destinations in two phases: (i) Ex post forecasts pre-COVID; (ii) Ex ante forecasts during and after the pandemic up to end 2021. Our results show that univariate combined with cross-sectional hierarchical forecasting techniques (THieF-ETS) outperform multivariate models pre-COVID. Scenarios were developed based on judgemental adjustment of the THieF-ETS baseline forecasts. Analysts provided a regional view on the most likely path to normal, based on country-specific regulations, macroeconomic conditions,…

The mobility network of European tourists: a longitudinal study and a comparison with geo-located Twitter data

Purpose This paper aims to provide a network study of the structural and dynamical characteristics of tourism flows in Europe from 1995 to 2012. Design/methodology/approach Travels in Europe were studied by following the network science research paradigm and by focusing on the whole network of intra-European tourism destinations. Network analysis was used to map and reveal the pattern of connections between states as shaped by bilateral tourism flows. Data were provided by the United Nations World Tourism Organization, and the data were integrated with tourism data available from national statistical offices of the individual countries, when necessary. Findings For 2012, results obtained f…

On the world distribution of income

In this paper we demonstrate that the size distribution of the world income may be reasonably approximated by a log-normal distribution rather then by a power law, as has previously been believed. This result has been shown to be quite persistent as we move from 1985 to 2011.