Small Island Destinations and International Tourism: Market Concentration and Distance Vulnerabilities

Many countries and regions could be susceptible to several types of vulnerabilities. This study investigates the vulnerability of small island destinations with a view to international tourism. Specifically, the study assesses the vulnerability of these r

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Small Island Destinations and International Tourism: Market Concentration and Distance Vulnerabilities Jorge R. Ridderstaat and Peter Nijkamp

9.1

Introduction

This study investigates the vulnerability of small island destinations (with a population of less than 1.5 million) to international tourism, considering that small island destinations operate almost exclusively in international markets (Reid and Reid 1997). Vulnerability is defined by Nelson et al. (2007) as the susceptibility of a system to perturbations and their ability to adapt to these distresses. There are many types of vulnerabilities that can affect a country or region. The International Monetary Fund, for example, looks at several indicators of external and domestic origin to assess the soundness of the public sector of countries (http://imf.org/ external/np/exr/facts/vul.htm). They also look at indicators to assess a country’s ability to avert liquidity crises or their sensitivity to market risk (including changes to interest rates and exchange rates). Besides economic vulnerability, countries may also be exposed to risks related to climate change, natural hazards (e.g., hurricanes and earthquakes), wars, terrorism, and health disasters (e.g., cholera), to name a few. These vulnerabilities can cause shockwaves that could threaten the development of nations or regions. Each country, in principle, inhibits its own set of vulnerabilities, and certain groups of territories could have similar susceptibility issues, small island destinations being such a collectivity. Small island destinations are conventionally experiencing several challenges, including problems of remoteness, geographical dispersion, susceptibility to natural and man-made disasters, fragility of

J.R. Ridderstaat (*) Research Department, Central Bank of Aruba, Oranjestad, Aruba e-mail: [email protected] P. Nijkamp Faculty of Economics and Business Administration, Free University Amsterdam, Amsterdam, The Netherlands © Springer Science+Business Media Singapore 2016 M. Ishihara et al. (eds.), Self-determinable Development of Small Islands, DOI 10.1007/978-981-10-0132-1_9

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ecosystems, constraints on transport and communication, and lack of natural resources, for instance (Brigulio 1995; Nijkamp and Verdonkschot 1995; Encontre 1999; Hampton and Christensen 2007; Nunkoo and Ramkissoon 2010; Croes 2011; Seetanah 2011; Ridderstaat 2015). These face-offs make small islands vulnerable to forces outside their control, which could threaten the economies of these nations or regions (Brigulio 1995). Export concentration is typically pronounced in the case of small states (Brigulio et al. 2009), with tourism as a prominent export activity for many small island destinations (De Albuquerque and McElroy 1992). Islands often attract tourist numbers far exceeding their population (Hall 2010); in many instances tourism is one, if not the most, important contributor to the economy and labor of these islands (Sharpley 2003; Hampton and Christensen 2007).