Comparative advantage, tourism

The principle of comparative advantage was originally introduced by David Ricardo as a response to Adam Smith’s principle of absolute advantage. Most of people and countries are not the absolutely best in the world at anything, but this does not prevent them from producing and engaging in trade, hence the principle of comparative advantage.

Some scholars use competitiveness and comparative advantage interchangeably, whereas some insist on a difference between them. For example, whereas “comparative advantages constitute the resources available to a destination, competitive advantages relate to a destination’s ability to use these resources effectively over the long-term” (Crouch and Ritchie 1999:143). In other words, comparative advantage relates only to factor endowment or what is given by nature to each country, while tourism competitiveness may have a multiplicity of sources, including the effectiveness of suppliers, the presence and qualities of infrastructure, the ability of a destination...