Tourism degrowth: quantification of its economic impact

Maria Sard and Elisabeth Valle ()

Current Issues in Tourism, 2024, vol. 27, issue 22, 3786-3801

Abstract: The decision to restrict tourist arrivals must be carefully tailored to the unique circumstances and objectives of each destination. This paper aims to assess the economic impacts of limiting tourist arrivals in an overcrowded destination like the Balearic Islands. It also aims to analyze the necessary increase in tourism expenditure to counterbalance the decline in GDP. Using the input-output methodology, we will simulate different scenarios to evaluate the effects of implementing limits on tourist arrivals. In the least restrictive scenario, setting a limit of 2.5 million tourist arrivals per month in 2017 would have affected only July and August, resulting in a 2.56% decline in arrivals. This reduction in tourism consumption would have led to a 0.72% decrease in production and a 0.66% decrease in value added, both directly and indirectly. Considering direct, indirect, and induced effects, overall production would have decreased by 1.09%, and value added by 1.07%. However, by simulating a 1% increase in average tourist spending in real terms, we could offset the decrease in tourist numbers and avoid the undesired impact on the GDP. These findings shed light on the economic impacts of tourism degrowth and explore demarketing strategies to foster more sustainable tourism destinations.

Date: 2024
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DOI: 10.1080/13683500.2024.2316201

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