Setting incentives to manage tourism in the Galapagos Islands: A choice experiment approach

Cesar Viteri ()
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Cesar Viteri: Department of Resource Economics, University of Massachusetts

No 201124, Working Papers from Latin American and Caribbean Environmental Economics Program

Abstract: This study contributes to the discussion of managing tourism in a Galapagos National Park in a developing country (Galapagos, Ecuador) by providing quantitative data about preferences of tourists and potential impacts on park revenues resulting from price discrimination. Our data are from 300 choice experiments conducted in the summer of 2009, in which four attributes of a tour of the Galapagos are described: tour length, depth of naturalist experience, level of protection of the Galapagos against invasive species, and price. On average the Galapagos tourist would be willing to pay for a higher level of protection, which is slightly less than 2.5 times the cost of the base case. The mean marginal willingness to pay for an in-depth trip is 1.79 times more than the cost of the overview provided in the base case. By predicting demand under alternative pricing scenarios, we are offering a scenario describing how these values could be leveraged by the tourism manager. The relatively inelastic demand suggests the potential for tourism managers to modify the access fees in order to shift the distribution of length of trips while not affecting revenues.

Pages: 35 pages
Date: 2011, Revised 2011
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