More Means Worse: Asymmetric Information, Spatial Displacement and Sustainable Heritage Tourism

Abstract

This paper analyses the market transformation in heritage tourism destinations when excessive tourism demand determines the emergence of a class of excursionists among visitors. Building on the approach of Keane (1997) and Shapiro (1983), some important dimensions of sustainable tourism development are highlighted. The lesser capacity of excursionists to learn the true quality of the tourist goods provides an opportunity for producers to cut back on quality. To serve high quality goods and keep up the reputation of the destination, producers need to gain a mark-up on price that might not be sustained in a competitive market. Hence the decline in ``high-paying'' demand segments, increasingly substituted by visitors with lesser quality expectations, has significant consequences on the use and preservation of the heritage. The proposed formulation allows the identification of appropriate policy instruments to reverse this process.