THE SUSTAINABLE DEVELOPMENT OF HERITAGE CITIES AND THEIR REGIONS

Analysis, Policy, Governance

ISBN 90 5170 670 7 Cover design: Crasborn Graphic Designers bno, Valkenburg a.d. Geul This book is no. 304 of the Tinbergen Institute Research Series, established through cooperation between Thela Thesis and the Tinbergen Institute. A list of books which already appeared in the series can be found in the back.

THE SUSTAINABLE DEVELOPMENT OF HERITAGE CITIES AND THEIR REGIONS

Analysis, Policy, Governance

De duurzame ontwikkeling van historische steden en hun regio’s

Thesis

to obtain the degree of Doctor from the Erasmus University Rotterdam

by command of the Rector Magnificus

Prof.dr.ir. J.H. van Bemmel

and according to the Decision of the Doctorate Board

The public defence shall be held on

Thursday 19 December 2002 at 13:30 hrs. by

Antonio Russo

born in Venice, Italy

Doctoral Committee Promotor: Prof.dr. L. van den Berg Other members: Prof.dr. J. van der Borg Prof.dr. M.P. van Dijk Prof.dr. A. Klamer

What is the dullest and bluntest of pains, such that my eyes never close without feeling it there? What abject despair demands an end to all things of infinity? If we have gained, how do we now meet the cost? What have we bargained, and what have we lost? What have we relinquished, never even knowing it was there?

Peter Hammill

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Foreword There is peculiar story about Rotterdam that is worth mentioning before somebody brings it out. When I came here as an exchange student, ten years ago, I run away after 24 hours. I thought the city was truly terrible and the campus inhospitable. Since then, Rotterdam has changed into a fantastic place. This change is possibly the most fascinating thing about my experience here: being able to sense transformation on a daily basis, seeing beauty emerging from chaos, and at the same time, coming in closer contact with one of the most diverse urban societies in Europe.

The Erasmus University and its Department of Regional Economics (my window at the 12th floor in particular…) have been ideal observation points to understand more of this change. Now, if there is a city that changes very slowly or not at all, this is my hometown Venice. This contrast has been source of such intellectual stimulus that eventually I have been led to write this dissertation, which, I hope, offers some interesting contribution for building the Venice of the future, one where I would like to go back and settle.

There are a few people that truly made this possible. Chronologically, the first was Jan van der Borg, for explaining me patiently that Rotterdam was not so bad. Now it’s me telling him. Then my Father: for physically bringing me here. And never leaving me. My Mother and my Grandma for their love and support. I hope that what I have accomplished here will repay you of my distance.

To a selected number of distinguished persons I am grateful for the things I have learned. Leo van den Berg has been a splendid teacher without ever making this too heavy. You have to be trained for the EURICUR way of life, but then you have fun! The colleagues, and I wish to mention in particular Erik Braun and Willem van Winden, for sharing the burden and having good ideas. Meine Peter van Dijk has pushed me to interesting places. Paolo Costa was a teacher without even talking to me – reading the news is sufficient. Other precious encounters have enriched my Eramsus experience. I wish to thank Ron Lee, Frank Go, Ruth Towse, for serious and less serious chit-chat, and Ankimon Vernede for helping in all possible ways.

The world of tourism and cultural studies is a great one. Several people here and there listened to me with the right face, and I always love to listen to them. They are: Nini Scaramuzzi; Franco Bianchini; Michele Trimarchi; Richard Butler; Priscilla Boniface; Noam Shoval; Arjo Klamer. I owe in particular to Myriam Jansen-Verbeke for the warm and constant attention to my work.

This work is the compendium of many years of research. Apart from my work at the Erasmus University, I have taken profit of collaborations with: the City of Venice; the University of Venice Ca’ Foscari, and in particular CISET and ICARE research centres; Fondazione ENI Enrico Mattei; Consorzio Venezia Ricerche; UNESCO Venice Office; and the Department for Technical Services – Italian Government Presidency.

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There are friends who have little or nothing to do with my work and this is precisely why they helped a lot in these years. Andrea Ganzaroli has shared my gastronomic and musical deliriums (which are not over…) and YET he managed to take his PhD. A true master. Max Vianello destroyed my 1999 but it was worth. Enrico Diecidue is my style benchmark. Sabina Tattara and Giuliano Mingardo have been delicious flatmates, and let me go to sleep early so that I could finish this. Silvia Caserta and Marcel de Heide for knowing Dutch, fixing the pipes and suggesting the best roti’s in town. Patricia Kandelaars for showing me a bright side of native females. Mariangela Lavanga for being so inspiring. Anna Mignosa for the recipes. Marisa de Brito for the bacalau that never materialised. Short-but-sweet, the trip fellows: Marco Benacchio, Martino Tattara, Gianni Brandani, Federica Beraldo, Lorenzo Caroleo, Davina Mamprin, Clara Bosco, Eric Porras, Nicolò Giacomuzzi-Moore, Alessandro Fasiolo.

I spent a fortune in telephone bills, but this made it all easier. Some Italian friends without whom I would have been lost: Federico, Emiliano, Mariapaola, Valentina. Polla, you were never far away. And Giovanna, my best friend, and mother of the nicest dog in the world.

Finally, there are people who arrive and everything changes. Laura is one of the surprises of my Rotterdam time, the least expected, but the most appreciated.

A. P. R., Rotterdam, September 2002

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Contents

11 –– IINNTTRROODDUUCCTTIIOONN.................................................................................................................................................................................................................... 11 1.1 BACKGROUND......................................................................................................... 2 1.2 PROBLEM STATEMENT AND OBJECTIVES OF THE RESEARCH....................................... 3 1.3 STRUCTURE OF THE WORK ....................................................................................... 4

22 –– UURRBBAANN TTOOUURRIISSMM,, CCUULLTTUURREE,, SSUUSSTTAAIINNAABBLLEE DDEEVVEELLOOPPMMEENNTT:: LLIITTEERRAATTUURREE RREEVVIIEEWW AANNDD SSTTAATTEE OOFF TTHHEE AARRTT ........................................................................................................ 77

2.1 INTRODUCTION ....................................................................................................... 7 2.2 THE SUSTAINABLE DEVELOPMENT OF TOURIST DESTINATIONS: CONCEPTS AND

DEFINITIONS ........................................................................................................... 8 2.3 THE TOURIST MARKET ........................................................................................... 13 2.4 DYNAMIC PROPERTIES OF TOURIST SYSTEMS .......................................................... 33 2.5 FROM VISITOR MANAGEMENT TO INTEGRAL URBAN POLICIES IN HERITAGE CITIES.... 45 2.6 OPEN ISSUES AND CONTINUATION OF THE RESEARCH .............................................. 54

33 –– MMOODDEELLLLIINNGG TTOOUURRIISSMM DDEEVVEELLOOPPMMEENNTT IINN TTHHEE HHEERRIITTAAGGEE CCIITTYY.. TTHHEE ““VVIICCIIOOUUSS CCIIRRCCLLEE”” OOFF TTOOUURRIISSMM DDEEVVEELLOOPPMMEENNTT .............................................................................................. 5599

3.1 INTRODUCTION ..................................................................................................... 59 3.2 THE VICIOUS CIRCLE: A MODEL OF THE SPATIAL DEVELOPMENT OF TOURISM IN

HERITAGE CITIES AND THEIR REGIONS ................................................................... 60 3.3 QUALITY, REPUTATION AND COMPETITIVENESS OF THE HERITAGE CITY: A FORMAL

ANALYSIS ............................................................................................................ 67 3.4 THE SUSTAINABILITY OF TOURISM DEVELOPMENT IN HERITAGE CITIES .................... 75 3.5 CONCLUSIONS AND CONTINUATION OF THE WORK .................................................. 80

44 –– SSUUSSTTAAIINNAABBLLEE TTOOUURRIISSMM MMAANNAAGGEEMMEENNTT AANNDD UURRBBAANN PPOOLLIICCYY IINN HHEERRIITTAAGGEE CCIITTIIEESS .................................................................................................................................................................................................................. 8833

4.1 MANAGING TOURISM IN THE SPACE....................................................................... 83 4.2 A “DECISION SUPPORT SYSTEM” FOR SUSTAINABLE TOURISM IN HERITAGE CITIES.. 93 4.3 TOURISM AND URBAN REGENERATION. TOWARDS THE “CULTURAL-TOURIST

CLUSTER” ............................................................................................................. 97 4.4 GOVERNANCE AND NETWORKING FOR SUSTAINABLE TOURISM.............................. 107 4.4 SYNTHESIS AND PROSECUTION OF THE RESEARCH................................................. 116

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55 –– AA CCAASSEE SSTTUUDDYY OOFF TTOOUURRIISSMM DDEEVVEELLOOPPMMEENNTT:: VVEENNIICCEE AANNDD IITTSS RREEGGIIOONN.................................................................................................................................................................................................................................................................................... 111177

5.1 INTRODUCTION ................................................................................................... 117 5.2 VENICE: CONTEXT OF THE ANALYSIS.................................................................... 123 5.3 VENICE AND TOURISM DEVELOPMENT .................................................................. 132 5.4 A NEW APPROACH TO TOURIST POLICY FOR A SUSTAINABLE VENICE ..................... 178

66 –– SSUUMMMMAARRYY AANNDD CCOONNCCLLUUSSIIOONNSS .................................................................................................................................................. 119999

AANNNNEEXX TTOO CCHH.. 55 ...................................................................................................................................................................................................................... 220033

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NNEEDDEERRLLAANNDDSSEE SSAAMMEENNVVAATTTTIINNGG ........................................................................................................................................................ 222211

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Picture yourself on a normal, sunny day in the centre of Venice. You need some food and a new drill to do some work in your flat. First, you go out in the street. Most likely, you meet a crowd of tourists; who, depending on the time of the day, will all be walking to right or to left. Should it be morning, then they are all walking to the left towards St. Mark’s square. Of course your food store is to the right. You wait in vain for the tidal wave to stop, but it doesn’t. Long queues of Japanese kids with cameras are staring at you: just another of the rare animals inhabiting the Venetian zoo. When you finally make your way in the narrow calle by pushing in a not-very-polite way (sometimes you’ll have to scream to these people to let you through), you walk to the food store only to find that the little cakes you wanted to buy would cost you a fortune. Visitors don’t seem to mind, and buy a plenty; but you do mind, and moreover you find the quality has decreased much lately. Then you look for the hardware shop at the corner and you find it has been closed down (since last November, didn’t you know?) and replaced by a “speciality shop” selling carnival masks. No use for repairing your scaffolds. You learn that your drills are sold only in Mestre, which is a 30-minute journey by bus – if you are lucky with the traffic. You may well do without your scaffold, after all: you live in the most beautiful city in the world!

Now imagine you are one of those Japanese tourists with cameras. You have travelled 30,000 back and forth for your dream journey to Venice. You have got only five days of vacation from your boss, three full days to spend in Italy, one of which in Florence (the tour operator added it without your knowing that it was so far away). You have to squeeze it all in those 48 hours, churches, palaces, exhibitions, concerts, gondolas and all. At the end, what you will remember most is the fierce expression of that Venetian looking at you in that narrow street; the plastic taste of your € 300 lobster in the restaurant facing St. Mark’s square (there should have been better ones, but where? no tourist indications in Japanese on that website…), and the short duration of your gondola tour. You don’t know why, then, you are so full of handicraft glass gifts to bring to your friends. And you still haven’t completely realised what the elegant man hassling you all through your visit to the St. Mark cathedral and its mosaics really wanted from you. OK, Venice was so beautiful, but what about going to Australia next year? Maybe, there, lobsters are cheaper…

Are these familiar stories to the reader? In my case, I sympathise with the first person and feel some pity for the second. But more importantly I am worried for my city, Venice or wherever else these two characters may be staged. How did it come to be so bad? And how long will it be until the first person decides to move away from Venice to eat better cakes and be able to repair his scaffold easily, if needed? How long will it take for the Japanese visitor to realise that he can rent a DVD about Venice when he wants, but there are many other convenient and cosy places where he can enjoy pleasant cultural experiences?

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This work is an attempt at building more knowledge on these questions. The problems with the development of tourism are often trivially exposed, but this just shows that tourism and its effects essentially regard everybody in a community. We will now dismiss the clothes of our attractive characters and put on those of the scientist. We wish to be useful. We would like Mr. Venetian to feel at home in his city, and to be proud of it. And Mr. Tourist to be forever enthusiastic about his idea to visit Venice. Maybe next year Mr Tourist will be at Mr. Venetian’s place for dinner, and they may share their views on beauty and culture, drinking good wine and tasting delicious pastry, instead of fighting for a way out of the calle.

1.1 Background

Tourism is an important resource for cities and metropolitan regions. It provides solid opportunities for economic growth that are not limited to direct employment and revenue generation. Through their strategies to develop tourism cities seek to strengthen their capacity to compete in the global economy. A visitor-friendly environment enhances the quality of life of a place – and consequently its capacity to attract new and strategic functions, contributing to general goals of urban development.

The cultural resources of a city are important elements of urban competitiveness. In fact, a culturally stimulating environment is not only attractive for visitors but also for new citizens and firms. Apart from their ethical value, historical buildings, monuments and sights contribute to the atmosphere of the city, providing prestige and value to the urban environment. Cultural attractions, local amenities and a creative environment score high in the preferences of agents in the new service class (Dziembowska-Kowalska and Funck 2000), and influence the development plans of companies and multinationals. This feeds a process in which tourism is the engine of economic regeneration. Cities in transition can develop tourism strategies to become post-industrial metropolises, based on quality, mixed functions, cultural diversity.

For those reasons, an increasing number of cities invest heavily in promoting their historical and cultural resources and making them accessible to residents and visitors. In doing so, however, they risk an unbalanced and short-lived development. The experience of many European cities with tourism management suggests that the results of such efforts are often unsatisfactory. Tourism develops unbridled employment of heritage and cultural destinations, with increasingly negative consequences in terms of costs and lost opportunities for development as living and working locations. As a strategy for urban growth is has been proved unviable in the long term.

This is especially a problem for those cities whose mass is small with respect to the flow of visitors that it attracts – think of the small and medium sized “stars” of European urban tourism, such as Bruges, Salzburg, Toledo, and Venice. They neither possess a sufficiently diverse economic base that spreads and absorbs the effects of tourism, nor are so small that a tourism mono-culture would be a sustainable and self-sufficient option for development. Not only the socio-economic profile of entire communities, for which tourism is far too often the only source of wealth, is at, stake in this process. Perhaps even worse is the risk that as a result of the loss of competitiveness of tourism, the very opportunities for the protection of the cultural heritage are eroded. To the extent that this patrimony represents an element of foundation of the civil society and the collective memory of the past, its loss would be

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disrupting. And yet, history offers several examples of cities and communities declining to the point of “dying” as social entities.

The challenge for such cities is to develop as thriving and attractive places without missing the opportunities offered by tourism. Hence the need for an integral policy that prevents the worse effects of tourism development, allowing the urban economy to grow harmoniously, and preserves in the process the valuable assets on which such growth is based, according to the general principles of sustainability.

Cities and urban regions are complex systems; any change in its component parts is likely to have profound repercussions in other domains, influencing the welfare and quality of life of various groups of citizens, or the power and legitimacy of organisations. While the expectation is that development makes the city as a whole better off, this is not always the case. In some cases, development processes just develop outside the city, leading to mere redistribution of welfare across the space, in a zero-sum game in which there are “winners” and “losers”.

Tourism is a typical case of such complexity. Tourism policy includes governing this complexity. It is not surprising, then, that traditional approaches are in increasing hardships to get hold of the pressure of tourism. Government responses are often inadequate and narrow-sighted, the tools utilised blunt and obsolete, and the scope for traditional policy approaches increasingly limited. The formulation of a policy agenda that systematically tackles the matter of unsustainable tourism demands a deeper understanding of the nature and the relations between the elements involved in the processes triggered by tourism development.

1.2 Problem statement and objectives of the research

This doctoral dissertation addresses a key problem of contemporary urbanism, which is the harmonisation of tourism growth with the imperatives of sustainable development on the local scale. This is done by focusing on a particular type of tourist destination, the historical or heritage city. In such places, many of the problems with tourism development are encapsulated and are even more dramatic than elsewhere, from the competition for the use of the urban resources, to the impacts of the tourism valorisation and the consequences of the use of the heritage for commercial purposes.

Although an extensive body of literature in various disciplines addresses tourism sustainability, the outcome in terms of practical suggestions for policy is poor. Tourism management often seems to miss the point, treating tourism as a sector “isolated” from other functions performed by the city, rather than as an engine of harmonious, synergetic regional development. More importantly, tourism development is seldom managed at the appropriate territorial scale. The peculiar nature of the resources on which heritage tourism is based, and the extreme complexity of the environment with which tourism strategies have to cope, contribute to the incapacity of traditional policy approaches fully to grasp and govern the process.

This thesis's main goal is to set up an analytical framework for the evaluation of tourism development and to design appropriate strategic action. This apparatus is founded on a comprehensive explanation of the evolution of regional tourism systems. Our main research question is therefore the following.

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How can tourism development be turned from a threat to heritage cities, into an opportunity for sustainable economic development? Related or associated questions are:

−= Is urban tourism likely to develop in a cyclical pattern, as is observed in other types of destination? Is it possible to conceptualise the development of tourism with a general model?

−= Which factors are relevant for explaining the (un)sustainable development of tourism?

−= Does this model represent a theoretical advancement or a refinement with respect to existing models and descriptions of tourism development?

−= Is it possible to derive an appropriate policy scheme (or decision system) based on that model?

−= What are the main obstacles to the implementation of tourism management policies? How does tourism governance affect the competitiveness of cities and their regions?

1.3 Structure of the work

To answer such questions, we will start by revising the state of the art in terms of theories and studies of urban tourism development. The literature review presented in Chapter 2 discusses a number of themes in the study of tourism development, such as the concept of sustainability, the structure of the tourist market, and the functional region. It then focuses on the most important theories and analytic tools that describe the dynamic properties of tourist systems and urban systems in general. One such tool is the “destination life cycle”, a widely-used schema that may apply also to urban destinations. However, in order to be utilised as a policy tool, this scheme arguably needs some fundamental analytic refinements. To that aim, the work of urban management theorists is discussed and adapted to the matter under investigation.

The second part of the thesis presents the author's original contribution to a theoretical conceptualisation of tourism dynamics and policy. Chapter 3 introduces a model of tourism development of heritage cities and their regions, the “vicious circle of tourism development”. Unsustainable tourism is described as the result of a spatial mismatch in the organisation, valorisation and pricing of the cultural assets and attractions. The model consists of a mechanism of transmission, or a sequence of cause-effect relations, that lead from the spatial enlargement of the relevant region around heritage cities – or “functional tourist regions” – to their loss of attractiveness. The analysis comprehends a formal analysis of pricing and quality of tourist goods, a crucial element of the development process.

So conceptualised, patterns of tourism development are immediately connected to policy. A framework for policy is proposed in Chapter 4, consisting in simple rules to guide tourism development at different stages of evolution and territorial levels. However, policy is not only about content but also about process. The organisational conditions for effective policy design and implementation have to be identified. In that respect, tourism should not be treated as an isolated sector, but as an essential ingredient of the urban economy, characterised by a high degree of complexity and a dense network of relationship among players and spatial levels.

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In the third part of the thesis, Chapter 5 presents a case study of the city of Venice, a typical and problematic context, possibly the most famous heritage destination in the world. The main variables and trends in the spatial-economic structure of the tourist market of that city are considered, and indications are derived on the validity of the relationships of which the vicious circle model consists. In the light of the policy framework formulated in Chapter 4, it is interesting to evaluate the shortcomings of tourist policy as it has been carried out in Venice for years. Emerging opportunities resulting from changing organisational conditions and fundamental advances in the technology, will also be assessed.

Chapter 6 concludes, taking the discussion to a general level and providing answers to the research questions, based on the theory and empirical evidence presented in the thesis.

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This chapter reviews the existing literature on tourism development in heritage cities and its sustainability. A number of unsatisfactory explanations to the problem and open issues are identified, and a research agenda for this study is set accordingly. Section 2.1 introduces the complexity of this body of literature and section 2.2 aims at reconstructing a definition of sustainable urban tourism. Section 2.3 reviews the main accounts on tourist systems, whereas section 2.4 moves to a dynamic setting reviewing a number of theoretical approaches to the problem of sustainable tourism development in cities. Section 2.6 reconnects with policy issues and section 2.6 sets forward a research agenda addressing unsolved questions.

2.1 Introduction

Scholars from various disciplines have engaged in tourism studies. This reflects the transversal nature of tourism. Geographers see tourism as a peculiar type of organisation of the territory; sociologists as a major activity of individuals and groups, shaped and nurtured by fashions, trends, and social structures; economists as an industry or sector. Culture experts and historians see it as a threat to the integrity of the heritage, or an opportunity for its discovery and valorisation. Each of these disciplines adopts a particular focus in its approach. It is typical of economic science to deliver suggestions to policymakers and organisations on how to achieve their goals. Regional economists generally care for the maximisation of the welfare of a population, and their analysis serves to formulate policy recommendations. That is also our approach.

This investigation into strategies for sustainable tourism starts from a preliminary question, which permeates much of the existing literature and the main differences in approach within it. Is tourism an objective, or a means to economic development, to be discarded if the main goals are impossible to achieve? Though the second option seems more reasonable, it can hardly be argued that people should not be free to travel, and respond in that way to a basic human instinct, one that has opened the way for many fundamental advances of mankind. However, international travel does have serious consequences that may jeopardise, rather than favour, the development of localities and the welfare of local communities. Landscapes, objects or art, monuments, are damaged or harmed by excessive tourist pressure. Tourism destinations get overcrowded, banalised, abandoned by local residents, and end up losing their original attractiveness for substantial parts of the tourist market. At the same time, works of art and historical sites that are excluded from the existing tourist routes, are hardly cared for

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or valorised. Often, examples of over- and under-exploitation are found in the same region, or even within the boundaries of a municipal administration. Then the issue for a city is whether it should try to regulate tourism, and if so, how.

Tourism represents a way of linking the preservation of the heritage assets with the performance of the urban economy. It is fascinating to explore that relation. Yet, few sound explanations have been given of the processes behind undesirable outcomes, apart from very general arguments based on "market failures", "product cycles", or "changing preferences". The development of urban tourism remains in a sort of "scientific vacuum", which Cazes and Potier (1996) attribute to the difficulty of establishing disciplinary boundaries in the study of the phenomena. Because all the disciplines having to do with city, culture and trade are in principle entitled to have their say on tourism development, none really has delved deep into the matter. Much work is done at the level of such international organisations as UNESCO or UNDP, but they have done little more than providing long lists of "best practice" and case studies. It is somewhat surprising to find that in the top publications in the field, Annals of Tourism Research and Tourism Management, in the last ten years only a small number of articles have been devoted to the urban heritage tourism. However, any mayor of an historical city in Western Europe is likely to put visitor management at the top of his political agenda, together with closely associated issues such as economic regeneration, traffic and environmental control, and infrastructure projects. Policy practice calls for more scientific elaboration, but science hardly responds.

Hence the feeling is that there is work of reunification and operationalisation to be done regarding the study of tourism development, namely, reunification of many reasonable suggestions, concepts and indications coming from different disciplines in a unique framework of analysis; and operationalisation of this framework as a ready-to-use policy tool for decision makers. Our line of reasoning develops as follows. First we take into consideration a guiding principle that should orient our research, sustainability. We propose a notion of “sustainability of tourism development” that is the most meaningful for our goals, indicating which issues are the most relevant to the research in the field of tourism development. In this light, the state of the art of analysing urban tourism development is illustrated: the main variables, their dynamic interplay and the actors concerned. Secondly, we also look further at theories that allow us to take a step forward on the way to an integral and comprehensive urban policy, such as the organisational theories that are an integral part of modern urban management science. The review of these bodies of literature allows us to identify open and unsolved questions, to whose solution we hope to offer an original contribution in the subsequent chapters.

2.2 The sustainable development of tourist destinations: concepts and definitions

The main objective of this thesis is to propose a comprehensive strategy to make cities come to terms with their tourism. We intend to deliver suggestions on how they can remain thriving communities in the future, maintaining their valuable cultural assets. To that end, we want tourism development to be sustainable. It is not our intention to revive here the lengthy debate on sustainable development; but rather to highlight how this concept links with that of the development of local tourism.

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2.2.1 Defining sustainability

Sustainability is the property of systems to grow and self-propagate, adapting and evolving as a consequence of external shocks and interaction (and possibly conflict) between its component parts1. Worsening environmental and social conditions at a global level (rising sea level, thinning ozone layer, increasing air pollution, exploding regional divergence) have stimulated a long-lasting debate on the necessity to get development on sustainable tracks. This discussion culminated in the United Nations' Environmental Conference of Rio de Janeiro in 1992, and produced a wide-ranging policy programme to guide the action of international and local institutions. For instance, Local Agenda 21, a community involvement programme launched after Rio 1992, is now standard practice for urban planning in most countries in the world.

The well-known Bruntland report (World Commission on Environment and Development 1987) provides this definition of sustainable development:

«.. sustainable development is that kind of development which fits the needs of the present generation without affecting the capacity of the future generations to satisfy their needs.»

This general definition motivates a specific notion of sustainable economic growth. This is possible when the welfare created at any moment in time is also used for environmental investment (technological progress, recycling, etc.) that reconstitutes the capital stock wasted in the process. The idea is that our possibilities of growth are not determined by market forces alone, but also by some difficult-to-grasp constraint related to the needs of the future generations. Mere Pareto-efficiency does not guarantee long-lasting economic development. Moral and equity considerations become integral to the concept of economic efficiency 2. Since we don't actually know what the future generations will need or like, it is assumed that any decision should be based on a cautionary principle: our consumption possibilities should be constrained by the maintenance of the capital stock necessary for future consumption. Thus, we ignore changes in taste (people becoming less demanding) or technological breakthroughs that are very difficult to forecast.

An operational refinement of the Bruntland definition has been produced by ICLEI (International Council for Local Environmental Initiatives 1991):

« … durable and sustainable development is that kind of development which allows to deliver basic environmental, social and economic facilities to every member of a community without threatening the operational performance of the

1 If a system is not sustainable, then perturbations may lead to decline in the performance and eventually to the death of the system. If a system is sustainable or resilient, it may change and adapt but in fact it remains (Prigogine and Stengers 1984, quoted by Innes and Booher 1999). 2 According to Nijkamp and Ouwersloot (1997), the objectives of sustainability are those of «directing decisions of public bodies and private actors towards a joint state of the economy (or society at large) and the ecology, such that the needs of the future generations are fulfilled without eroding the ecological basis for a proper welfare and activity level of these generations». They therefore identify a set of minimum (or critical) conditions to be fulfilled in any regional development initiatives.

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natural, built and social environmental systems on which the supply of those facilities depends.»

This definition, more clearly intended as a normative concept to guide local policy action, stresses the notions of supply of facilities, as dependent on the productive systems involved, and the “community” dimension. Reference is made both to the overall performance of the system (the future performance: the system has to be durable as well) and to the subjects that have to take advantage of the development, which are all the (present and future) members of a community. There is no general indication, no global concept: all that we require is that our children and their children are able to use the basic facilities provided in our community with at least the same quality level that we enjoy. Moreover, it is stressed that we should not wait for other people in other countries or other ages to act in a sustainable way: we should opt independently for sustainable solutions. «Think global, act local» is the slogan of sustainable development: do in your own community what is needed to preserve the environment, and if everyone does that, the result will be global sustainable development. Sustainability must not be about aims. Innes and Booher (1999), drawing on complexity theory and its applications to policy science like in Giddens (1994) and Mattoon (1995), suggest that sustainability is about process and not a particular vision or criterion; there is possibly no endpoint for an adaptive system or an ideal outcome. Hence, rather than at an ideal state, sustainability hints at a tension, a “way of doing”. Such an approach fits the characteristics of policy making in contemporary societies well3.

These various ways of looking at sustainability have something in common: they deal with the dynamic properties of systems, and they involve some kind of normative principle: unsustainable development should be avoided. Today sustainability is an established (though possibly abused) concept in scientific theory and in policy circles, though there still exist fundamental divisions as to the “degree” of sustainability that could be optimally reached, and about the conditions that may favour sustainable development. Sustainability is applied very loosely as a reference concept, often with little theoretic substance, but that is not necessarily the point. “Sustainable hotels”, “sustainable cities”, the “sustainable TVs”, may seem naïve or banal concepts but have the advantage of giving a very direct notion of the systemic and ethical values that each of these assets has for the local societies and the world at large. That is why the recent debate on sustainable cities is so relevant. Thinking of cities as micro-systems, we focus on the contribution that cities offer to a more sustainable world.

2.2.2 Sustainable cities

According to much of the existing literature on sustainability, global sustainable development requires that cities are sustainable. Cities are so relevant to modern economy and society that it is argued that their performance determines the destiny of entire regions (Van den Berg et al. 1982: xxi). They are the places where unbalance in the use of resources is most evident (they consume more resources than they generate), but at the same time they are the centres of economic and societal innovation. Therefore, in cities the antidotes of unsustainable development are to be found. This double role of cities (the origin of - and the solution to - 3 As argued by R. Butler (1991), the relations between “means” and “ends” are often undetermined, and policy is seen as a continuous flow adapting existing “solutions” to processes.

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sustainable development) is not contested. What is debated is the degree to which urban development may bring about sustainable development, and the form that it should take. Haughton and Hunter (1994), in their extensive review of urban sustainability issues, suggest that sustainability is not so much a question of size and density as a matter of internal organisation of the city. Cities are subject to processes of change (Van den Berg 1987), and much of this change occurs to the detriment of the natural, cultural and social environments. Therefore policies that attack and guide such change processes are «central to improving the urban environment» (Haughton and Hunter 1994: 80).

Martinotti (1997) analyses urban sustainability from a slightly different point of view. He identifies globalisation as a major force that may make the development path of cities unsustainable, but warns that «the global economy puts in motion an ever-increasing mobility not only of capital and goods, but also of people, and as cities are, after all, made of people, this is deeply affecting the social morphology of the new metropolis». Thus he invites us to acknowledge that the development of the contemporary metropolis and its sustainability is determined by the capacity to accommodate an evolution in population groups: from the traditional residents to city users to metropolitan transient citizens. In the metropolitan societies, three “urban layers” and their populations coexist and interact: the town, the first-generation metropolis, and the network city or world city. In the world city, the development of places is determined by a host of actors, as tourists, businessmen and congressmen, who bear little or no relation to institutional and economic mechanisms of representation. They neither vote nor pay taxes to cover the costs that their activities generate in the places where they “pass”. In this de facto de-franchising of the city user, according to Martinotti, lies the potentially unsustainable development of cities, which are subject to global forces but are nailed to “the local”, for instance by local governments unwilling to give up any of their power. This notion of sustainable urban development can be articulated in a careful analysis of the economic sub-systems that insist on an urban environment.

2.2.3 The sustainability of tourism development

Tourism is without doubt an important economic sector. In 1999, the Travel and Tourism sector generated (directly and indirectly) 11% of the world GDP; 200 million jobs; 8% of total employment; and is due to generate 5.5 million new jobs per year until 2010 (WTTC 2000). However, tourism is also a very peculiar industry, as far as production, organisation, value-generation and consumption are concerned; the implications for sustainability are indeed relevant. Hunter (1997) highlights that the relation between the endurance of tourism development is too often and too simplistically equated to the general notion of sustainability of development for a tourist destination. In fact he proposes that the sustainability of tourism should be conceived of as an “adaptive paradigm” that depends on the socio-cultural characteristics of places and on the alternative opportunities for development at hand. From that point of view, the sustainability of tourism development depends on the interaction between tourist activity and the resources on which such development is based, along different dimensions. These are:

A. Economic. Tourism might be a powerful way to boost local economies and, in principle, a very good way to valorise cultural resources, as people from all the world are willing to experience them and pay for their use. However, not always is the tourist system organised in

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such a way as to guarantee the (re)production of the resources on which it is based; in other words, a long-lasting business model for sustainable tourism might not exist.

B. Physical-ecological. The primary resources on which tourism is based can be physically affected, eroded, or destroyed beyond remedy because of excessive and unregulated tourist pressure on sites. In line with the general economic principles of the optimum use of (partially) non-reproducible resources, the challenge is how to put to value cultural resources without endangering their integrity to the critical point where the overall utility from consuming (or experiencing) these assets is affected.

C. Socio-cultural. Monuments, traditions, and landscapes, are not there by chance, but because of specific cultural conditions regarding the organisation of the local society and economy. Moreover there are ethical values attached to these resources, such as collective memory, national identity, taste. Now, to the extent that the local identity is changed or affected by the development of tourism, not only is the capital stock of cultural assets unlikely to increase, but the very conditions for the preservation of the existing assets are likely to vanish. Thus, in order to maintain the “cultural capital” of places, tourism must be respectful of local identity, and original cultural production should be nurtured.

Sustainability is discussed in the tourism economic literature primarily in association with recreational carrying capacity. Some authors believe that there is a maximum level of tourism or recreation use intrinsic to an area (such as a national park, wilderness or other tourist destination), beyond which the system is harmed beyond recovery, or unable to continue delivering the same level of utility to its stakeholders. In his discussion of indicators of sustainable tourism, Manning (1996) defines resiliency as a factor that, when combined with other factors (e.g., physical characteristics of the area, the type of use, etc.) creates the composite indicator called "carrying capacity". R.W. Butler (1991) describes the "capability to withstand disturbance" as one factor that helps to mitigate the tendency to violate the environmental carrying capacity of the land. If we accept the notion offered by Pigram (1990) that «sustainable tourism is essentially an exercise in sustainable resource management» and that the "fragility" of an area is an indicator of this, then sustainability becomes an important factor in determining tourism development policies. To the extent that this might be an implicit outcome of unguided development, the implication is that policies, or external interventions, are needed to re-bring the system towards a sustainable path. Such policies are different from case to case, as the “paradigm” notion of Hunter (1997) suggests, because different are the ways in which tourism development affects the local resources. It is reasonable to expect that the effects vary according to the nature of tourist destinations (e.g. urban rather than rural, resource-based rather than man-made, etc.).

Heritage tourism, which is at the centre of this study, is no exception. However, most accounts of tourism development are limited to impact analysis, and merely focus on economic values. Instead, sustainability requires a more sophisticated analytic approach that grasps the full dynamic implications of tourism activity. These can only be fetched looking at the structure of the market, nature of the resources involved, the geographic scale at which tourism activity takes place, the stakeholders involved, the development of tourism. In the continuation of this chapter, we intend to investigate how all these aspects are articulated in tourism research, how they relate to one another, whether it is possible to have a working definition of sustainable tourism that takes all of them into account in an integral way, and to set up a research agenda accordingly.

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2.3 The tourist market

As for every market, we can characterise tourism by its component parts (demand and supply), by the items exchanged (quantities of goods and services and prices paid), and by the contextual conditions in which the exchange takes place. All this constitutes a tourist system. Fig. 2.1 suggests that the consumption of a tourist product involves a sequence of decisions.

The complexity of the “encounter” between demand and supply in the tourist system springs from:

•= The heterogeneity of the demand side

•= The spatial articulation of the supply side

•= The peculiarity of the process of production

•= The impossibility to fix a price for part of the commodities that are sold in the tourist package

•= The peculiarity of the act of consumption of tourist products

Fig. 2.1 – The tourist system

FINAL DEMAND (visitors)

SUPPLY SYSTEM

GLOBAL INDUSTRY (tour operators, carriers)

LOCAL INDUSTRY )private operators, institutions)

PRIMARY RESOURCES (cultural heritage, landscape, atmosphere)

purchase of travel

Purchase/consumption of tourist products

“Pro-sumption” of primary products

Prices, quantities, qualities

MARKET

In this section, those aspects are discussed. The illustration of the main assumptions and findings in the literature enable us to identify the boundaries of a framework for sustainable heritage tourism.

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2.3.1 Visitors' demand, types and impacts

On one side we find consumers, or visitors. These are not special or different people: they are consumers who associate their act of consumption with the circumstance of travelling to a place that is different from their usual residence. Urry (1990) talks about «tourist gaze» to describe the attitude of a traveller who “sees things” from a (cultural) distance.

Depending on their relation with the visited locality, visitors are classified as tourists or otherwise. Hall and Page (1999: 59-67) extend the definition of tourism to take into account purpose of travel (e.g. business travel, holiday makers, visiting friends and relatives, etc.), the time dimension involved, and those situations in which «[visitors] may or may not be included as tourists», such as cruise passengers, in-transit travellers, excursionists, etc. The World Tourism Organisation (1995) officially counts as tourist a person who spends at least one night or 24 hours in a locality different from his or her habitual residence. This definition is relevant for statistical reasons and captures some important features of the economic impact of tourism4. On one hand the statistical emphasis on "overnight stays" makes sense from an economic point of view, since the greatest part of the traveller's budget is spent on facilities located in the overnight-stay places (e.g. hotel, dinner, transport, etc.). On the other, the fact of visiting a city albeit for less than 24 hours is not without consequences, hence the necessity to enhance the scale of observation of tourism impacts with respect to the local dimension 5.

Tab. 2.i – Economic and socio-cultural externalities from tourism. Adapted from Fossati and Panella (2000: 8-10).

Type of Externality Nature Example

Production externalities The production of tourist services implies the joint production of public goods (final or intermediate) having a negative utility

Jet engine noise in the vicinity of an airport represents a negative externality for the local residents, and depends on the volume of tourist activity

Consumption externalities The consumption of tourist services implies the joint production of public goods (final or intermediate) having a negative utility

Crowding outside a museum or on the way to a main attraction provokes traffic congestion for residents

Environmental externalities

The production and consumption of tourist services reduces the quality of the environment

In the proximity of a crowded beach, the water quality is worse

Socio-cultural externalities

The level of tourist activity affects (positively or negatively) the socio-cultural features of the place

A heavily visited rural region may experience loss of cultural identity or erosion of local traditions

4 For instance, a traveller who visits Bruges during a sunny day of July, but spends the night before in Brussels and the following night in Middelburg, is officially counted as a tourist of Brussels and Middelburg, but not as a visitor of Bruges. 5 Indeed Cazes and Potier (1996) propose to relax the strict WTO typology in urban tourism to account for the regional tourist mobility.

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During the visit, visitors purchase all sorts of goods. The economic leverage implied by the addition to the locally-generated demand may be strong. Visitors usually have a greater propensity to spend than the resident population. A typical problem exists for the calculation of the economic impact of tourism: part of the supply is not produced locally, and part of the revenues from tourism is not spent locally. Hence there is a structural degree of "leakage" from the tourist system, which depends on the attributes of the destination. One is the relative extension of the destination area compared to its "demand basin". The smaller the destination compared to the mass of tourist demand that puts pressure on it, the greater is the amount of non-indigenous demand that has to be pumped into the local system to satisfy the consumption necessities of visitors. Hence the necessity to define the scale and character of tourist activity in a region.

Visits also imply costs, which are not necessarily borne by the visitor himself. They may range from the negative externalities imposed by visitors on other visitors (reduction of the quality of the tourist experience due to congestion) and on the resident population, to other less evident consequences. In tab. 2.i a taxonomy of externalities deriving from tourism is proposed. Other economic and spatial effects are not strictly externalities from the economic point of view, such as the inflation of prices and rents in a tourist city, or the transformations in the job market. The stronger the tourist pressure, the heavier the external costs imposed on a locality.

One may question if there is a limit, a threshold to such costs determined by the physical features of the destination. This is a complex matter that is addressed by introducing a very important distinction in the visitor market: that between overnight staying tourists and commuting visitors who don't spend the night in the locality visited, or excursionists.

Tab. 2.ii – Categories of visitors to a destination

Category of visitors Characteristics 6

Tourists Staying in the destination overnight or spending more than 24 hours in the destination

Excursionists, divided into:

Staying in the destination less than 24 hours and not spending the night there

Day trippers ("real" excursionists)

Leave in the morning from their hometown to return there in the evening

"False" excursionists The destination is the main motivation for their journey, but they spend the night in another place (different from their home location)

Indirect excursionists Tourists to another destination who include a short visit to the city as part of their vacation

Passing excursionists Spend the night before the visit to the destination and the night after in different places

6 The general definitions of tourists and excursionists are official definitions of WTO. The definition of different excursionists’ types is recurrent in the urban tourism literature (e.g. Van der Borg 1991, and Costa 1993).

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The reasons for a proportion of visitors to be excursionists are various, and determine different profiles of visitors with specific impacts. First of all, the potential demand for tourist beds in a city may be too large to be accommodated. Thus, a share of visitors is "forced" out of the destination. They would visit it by commuting from another destination located in the "periphery" of the tourist system. Other visitors choose peripheral accommodation sites on budget considerations – beds in the city centre are just too expensive. Van der Borg (1991) calls "commuting" visitors false excursionists. These visitors spend a considerable part of their budget outside the central area, but continue to impose costs on the historical assets. However, other categories of excursionists, such as indirect excursionists, passing excursionists, and true excursionists, have different features regarding their motivation, their behaviour and the logistics of their visit. These categories are defined in Table 2.ii.

False excursionists resemble overnight staying tourists in many respects. The motivation of their travel is to visit the main destination; they may organise their visit in more days (the reference to short trips therefore is just a statistic device), and their consumption pattern will probably be biased towards cultural consumption and high-quality goods. Indirect and passage excursionists, especially those who stay at seaside or mountain resorts and therefore are not in principle "cultural" tourists, will be less motivated and informed on the city's cultural/tourist assets and less prepared to pay for access to cultural institutions. The character of their occasional visits will lead them to consume anything easily found in the short time available; therefore they rely on "signals" to make their consumption choices. Real excursionists are in between these two categories. In principle, they are motivated by culture, but having to compress their visit in a short time, they will mostly behave like indirect excursionists 7.

It is quite clear that the structure of the destination affects to a certain degree the visitor mix. Small historical centres with old buildings that can hardly be reconverted to tourist use, will have a structural share of excursionists, while larger cities can in principle accommodate more of their visitors as tourists. In these cases as well, however, there is a portion of excursionists who would remain excursionists anyway. Hence the strategies of visitor management for categories of visitors with different motivations are quite different.

As far as visitors' impact is concerned, staying tourists are limited by the accommodation capacity of the city and – to a certain extent – generate the finance needed to cover the associated costs. It could be argued that overnight stays are “self-regulating” both from a physical and an economic point of view. Harder to regulate are those who do not stay in the city. Excursions are also less predictable (no information are available in advance, as with hotel bookings); finally, excursionists don’t make use of such facilities as restrooms and hotel waste services. For all these reasons, day-trips impose higher management costs on cities, demanding appropriate measures. Despite the importance of having precise statistics on the total amount of visitors, collecting data on excursionists tends to be difficult and costly, so that only staying tourists are regularly monitored. In consideration of the fact that the share of

7 The “return” pattern of excursions matters to this respect (Darnell and Johnson 2001). Excursionists who come to the destination again after a first visit learn how to make choices correctly or to diversify their itineraries. However, surveys and empirical studies show that the share of “first timers” to heritage attractions is generally high.

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excursionists in the total of visitors in many art cities in Europe may reach 80%, it is easily understood why the management of visitors’ flows is so difficult.

A key problem for the allocation of costs and benefits arising from tourism is that tourist demand is directed to facilities and premises that are also utilised by the resident population, so that there is a certain degree of overlapping between “indigenous” and “imported” demand. As far as urban space, general services and access routes are concerned, use competition may be a problem. The degree of competition varies according to the nature of places and the mass of the resident population, making the task of assessing tourist impact even more difficult (Indovina 1988).

Economically, cultural tourism generates high revenues and employment, for cultural tourists typically tend to spend more than other visitors; moreover, cultural consumption is usually geared to locally produced resources. Cultural visits, in the broad sense, imply that visitors are interested in all aspects of the place - food, music, traditional products - and prepared to pay for it. Therefore, the economy activated by cultural tourism is such that a high proportion of revenues stays in the local community, compared for example to leisure and business tourism, where tourists consume a high proportion of goods and services that are imported into the locality to replicate domestic consumption patterns. In that way, the tourist economy tends to add to the local mass of products, increasing the opportunities of consumption of the local community rather than substituting local specialities with possible adverse effects on the local society. From that point of view, the generation of indirect benefits to the local community may be even more important than the revenues accruing to the tourist industry.

However, the impact of tourism extends beyond the financial realm, and has to be carefully evaluated when comparing it with the different costs. Tourism provides cities and metropolitan regions with opportunities that are not restricted to direct employment and revenue generation, and depend crucially on the type of tourist activity. Cultural tourism, defined by Richards as «the consumption of art, heritage, folklore, and a whole range of cultural manifestations by tourists» (Richards 1996: 22), is an expanding segment of the visitor market. Unlike other leisure activities, it appears to have the most desirable features for a city, as it promises all sort of positive spin-offs for the local society (Hughes 1987). The process of cultural production activates specialised services – in particular in the field of personal services, information-intensive services, hi-tech, all those pertaining to the “creative industries” – that are highly relevant to the contemporary urban economy. From that point of view, cultural tourism can be seen as a lever to other urban functions that would hardly be maintained in its absence.

The impact of culture as an intangible ingredient of the city's attractiveness should also be considered. A lively and culturally stimulating place is an attractive place for new citizens, firms and business that attach great importance to quality-of-life elements in their location choices (Dziembowska-Kowalska and Funck 2000). In some cases, cultural events represent a “breakthrough” in the way cities utilise their cultural potential, and have become a spearhead of urban revitalisation strategies. From the environmental point of view, cultural tourism is essentially a clean industry, and, as such, it is highly recommendable that cities and regions reconvert former industrial districts and polluted areas into cultural and tourist facilities, such as for example museums, exposition parks and sports grounds. In fact, tourists consume cultural services but are also sensitive to the quality of the environment in which hhe consumption occurs and to the general aesthetic features of the place.

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Last but not least, cultural tourism adds personal enrichment both to the local and to the host community, and therefore has ethical value. The valorisation, conservation and protection of the heritage that the tourist use allows – through the necessary mise en valeur – provides the local community with a range of assets that, apart from their economic use, help to shape its identity and inner cohesion. In principle, tourism represents a powerful tool to bring together different cultures and systems of values, bringing about cultural empathy between guest and host communities, with increased understanding and tolerance as a result. Thus, cultural and heritage tourism could be a vector for world peace, and as such it is promoted by such international organisations as UNESCO and UNDP (cf. UNESCO Universal Declaration on Cultural Diversity8).

2.3.2 Tourist supply

The points that differentiate tourism from other industries are many. The first is that rather than selling a homogeneous product in a single market, tourist goods are to a large extent produced in specific industries (e.g. the travel industry, the food industry, the leisure and cultural industry, etc.). They are defined "tourist goods" only to the extent that they are purchased by consumers who happen to be tourists or travellers. Because most of the commodities and services purchased by tourists are available to non-tourists as well, the boundaries of the supply network are extremely blurred. Leiper (1990) describes this difficulty with a paradox: to call tourism an industry would be the same to call "red-headed" an industry that mainly sells its products to people with red hair. Therefore it is better conceived of as a system or a sector (Sinclair and Stabler 1997).

Fig. 2.2 – The "iceberg" of the tourist industries and economy according to WTTC. Source: www.wttc.org.

8 On-line document: http://www.unesco.org/culture/pluralism/diversity/html_eng/index_en.shtml; see also the declarations of the International institute of Peace Through Tourism, www.iipt.org.

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Others, like Smith (1998), recur to a demand-driven categorisation to identify an "accounting system" for the tourist industry. He defines as tourist industries those industries that would cease to exist in the absence of tourism. The tourist industry activates an economy which is far larger than the industry itself: the rule of thumb suggests that if the share of receipts for an industry that is generated by tourist demand exceeds 15%, then that industry is to be included in the tourist economy. Fig. 2.2 utilises the metaphor of the iceberg to describe this distinction. The WTTC, one of the leading sector organisations, has made this definition official, producing statistics and reports based on it ("Tourist Satellite Accounts"). They distinguish the "travel and tourism industry" – that directly supplies goods and services to travellers, from the "travel and tourism economy", which groups all the intermediate sectors that serve the T&T industry and are thereby indirectly affected by tourist activity, like the media and food industries.

Apart from definitional aspects, this querelle has some substantial importance in terms of the structure of the markets. According to the "SCP paradigm" that dominated industrial economics studies until the 1980s – still a valid approach in macroeconomic studies of the tourist industry, according to Sinclair and Stabler (1997) – the peculiar structure of the sub-sectors of the industry would determine their performance in terms of prices and consumer satisfaction. In fact, in imperfectly competitive situations where firms have a degree of control over the market, pricing and output strategies can be implemented 9. Tremblay (1998) argues that the co-ordination between the different sectors constituting the tourist system determines the capacity of tourism to perform like an "industry", and identifies major obstacles to complete industrialisation, both of cultural and practical nature. The difficulty of defining it as an industry determines a problem of measurement and hence of assessing its magnitude in the local economy; and of deciding what is tourism and what is not.

Other difficulties with the tourist supply lie in the exact definition of the process of production. The creation of a tourist product involves four steps (Smith 1998). The process begins with primary inputs or resources such as land, labour and capital, which are not produced or are inherited from the past. These are put on the market for tourist consumption only when they are processed and transformed into intermediate inputs, such as parks, convention facilities, exhibition halls, "cultural quarters". Further processing by tourist operators yields intermediate outputs (e.g. artistic performances, guided tours, festival and events). Finally, it is the visitor himself who takes the intermediate outputs and processes them into final outputs or experiences. The consumer is therefore an integral part of the process of production ("prosumer").

However, it should be clear that tourism is a full-fledged sector, whether or not it can be conceived of as an industry. The peculiarities of tourism are not only definitional. The nature of tourist commodities is also singular. Tourists consume - or “prosume” - a complete set of goods and services, so that the tourist product is called a "composite good", involving transport, accommodation, catering, natural and man-made resources, entertainment and other services such as banking, shopping, travel intermediation, etc. (Economides and Salop 1992;

9 Sinclair and Stabler (1997: 97) stress that tourism supply, to this respect, is an interesting case «as it displays, through the instability of some sectors, a measure of immaturity (…) so that the outcomes are often less predictable than in mature and stable markets».

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Campaner 2000). Tourist goods exhibit "complementarity" characteristics as well as "network" characteristics: a visit to a museum cannot be done without consuming a coach trip or a meal at a restaurant; must be supported by a bank system; and is usually completed by a visit to other museums on the same site, or other cultural-historical attraction and sights.

Some of these goods or services represent the main motivation for the travel or vacation (e.g. an art city and its monuments, an exhibition or a performance, a spa centre, attending a congress, etc.), while some others are consumed in an accessory way. This brings us to the necessity to define exactly the tourist supply of an urban destination, or the "urban tourist product"10. Jansen-Verbeke (1986) identifies a primary tourist product that consists of recreational and cultural goods and facilities, a secondary product that is accessory to the primary or in any case depends on the existence of the primary (i.e. travel agents, souvenir shops, etc.); and a conditional product that determines the accessibility and the fruition of the former. While it is impossible or highly impractical to consume primary goods without consuming also the secondary and complementary products, it should be recognised that thetwo categories are supplied according to very different market structures, locations and rules, as the SCP framework suggests. The main point of differentiation is that whereas primary products are typically supplied or their preservation subsidised as merit goods in the public interest, secondary products are produced and sold in a more or less competitive market. Finally, conditional or accessory goods may be supplied in the public (e.g. police, roads) or private (media, research) sector. This difference affects crucially the sustainability of tourism in localities, as will be seen in the next chapter.

Co-ordination in the supply of the various elements of the tourist product is therefore necessary, as well as a comprehensive approach to destination management. However, the stakeholders who determine the quality and pricing of the different components of the tourist product are different, respond to different interests, and their strategies are most of the time conflicting, making such coordination difficult. Moreover, a diversification in strategies does not occur only on a vertical, industrial level. An important factor of differentiation within the industry regards the geographical aspects.

2.3.3 The destination and its region: the tourist space

So far we have implicitly assumed that place matters. Tourism is an inherently spatial phenomenon, in that it involves the movement of people and goods from a certain number of origins to a destination. To that spatial extension of the visitors' physical flow corresponds a spatial stretch of the tourist industry, whose chain of value exhibits marked territorial articulation. This spatial fragmentation – the outcome of restructuring and strategic response within and around the tourist industry – influences the development of places in a singular way.

The tourist supply system is organised in space, according to the nature of the commodities and the production processes involved (Smith 1998). The consumption or prosumption of

10 Dietvorst (1995) recurs to a demand-side definition; the tourist recreational complex consists of the facilities and places that are accessed by tourists and recreationists. This definition is clearly different from supply-side concepts like the cluster, which instead focuses on functional links between components or agents of the tourist system.

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tourist goods is therefore spatially articulated, and involves a certain extent of strategic behaviour (Ioannides and Debbage 1998).

The spatial level of tourist activity is a fundamental dimension of sustainability. In fact, it has bearings on the physical capacity of the place to absorb the potential demand without the primary resources being damaged; on the long-term financial performance of the local tourist industry; and on the factors that determine a positive relation between cultural tourism and the competitiveness of the local economy.

The “Urban Tourism” product and heritage tourism

The different components of the local tourist industry are organised in space according to their nature. The clustering of individual historical and cultural attractions in restricted portions of the urban space is a typical outcome of the historical evolution of European centres. Tourism development focuses on a few favoured sites. Towse (1991) explains the different destiny of historical assets with similar aesthetic and qualitative content as the result of a process of polarisation in the tourist use of a good, which depends on information problems. Utilising the “superstar” theory of Rosen (1981), in her model of the tourist city visitors with scarce information about the cultural supply go to the most crowded and central attractions, in order to cut on search costs. They assume that the most visited attractions are the most worthy of a visit; and originally those very attractions are visited for an “accidental” advantage they may possess, such as centrality. Therefore, attractions that are central earn more than they “deserve” (or more than can be possibly explained by economic arguments), whereas peripheral jewels remain underdeveloped. The same can be said of whole cities. There will be “superstars” that thrive on a reputation earned in another context, and beautiful places that do not acquire a sufficient mass in terms of notoriety to become tourist destinations.

Ashworth and Tunbridge (1990:75-91) evaluate the importance of tourist-historical attractions to work as development poles for the tourist sector, and find statistical associations. The spatial pattern of facility locations for each destination can be described in terms of the degree and type of clustering and by associations with different industries fulfilling the visitors' needs. For instance, culture-related facilities cluster in historical districts owing to the animation function especially during the night, making city centres lively even when shopping hours are over. This demands a certain separation from residential districts. On the production side, management economies may arise from clustering (Ashworth and Tunbridge 1990:110). Even the new cultural producers, whose activity is in principle footloose, tend to agglomerate in inner cities and create “cultural neighbourhoods” (Wynne 1992). Other studies confirm that culture-related activities are concentrated in urban areas, and that such concentration (contrary to other information-intensive industries) increases with time (Heilbrun 1992).

A fundamental characteristic of tourist consumption is that it is not reducible to the consumption of tangible or valuable goods and services, but comes along with the enjoyment of such special “contextual” features as environmental, aesthetic or relational amenities. Though they are seldom the main reason for travelling, the utility derived by visitors in consuming the primary products is enhanced – and hence their willingness to pay – by a satisfactory utility derived from the consumption of the other components of the tourist product. To give an example, we are less willing to visit a beautiful cathedral or to access a

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beach if the weather is terrible, or if the attendants are unfriendly. In the case of heritage tourism, the quality of the experience is easily spoilt if the context in which the consumption takes place is not satisfactory, causing a loss of attractiveness for the locality. «The Parthenon is overrun not only with tourists, but with surly guards and aggressive hustlers» (Fainstein and Judd 1999).

As far as certain kinds of popular culture are concerned, complementary services may become "primary tourist goods" themselves, but – as new technologies allow the de-materialisation of the cultural content of the visit – they are also de-territorialised, that is, they could be consumed anywhere; the place where they are consumed in practice is not relevant at all 11. For other, more traditional kinds of tourism, the territory, or the "local" dimension, remains essential: a particular landscape, a monument or a famous museum can be experienced in one place only, and originates a flow of tourists to that destination. What is more important, they could not be transferred or duplicated somewhere else, and this is what makes some places very attractive for tourists. This is a significant point for this thesis, which mainly deals with the kind of tourism that is interested in historical (irreproducible) or cultural (largely non-standardised) goods. Heritage tourism can therefore be defined as the form of tourism that is generated by the remains or the memoirs of the past (Yale 1991, quoted in Poria et al. 2001), from tangible objects and sites to intangible attributes of a locality (the atmosphere, the history, the symbolic and spiritual values). The implication is that when heritage is reproduced in a different context, it may lose part of its value for tourism 12.

To arrive at an operational definition of the “local level”, it is necessary to consider a significant administrative delimitation. The municipal level is the most interesting, because it captures well the physical structure of many European heritage cities, where the cultural assets are often included within an historical wall system. Moreover, the municipal level is clearly relevant from the point of view of tourism management. Most costs imposed by tourists are transformed in taxes and prices imposed on a municipal base.

The global articulation of the tourist chain

The tourist industry is undergoing rapid restructuring, with multinational conglomerates shaping the industry and dominating whole parts of it (Fainstein and Judd 1999: 10). Decisions influencing local and regional tourist development, promotion and investment are increasingly taken elsewhere, where the international capital is concentrated. The strategic policy of tour operators, airlines, international hotel chains and multinationals like Mc Donald and Disney, shape the tourist images of cities. The cultural identity of places is influenced by

11 Thus, Urry (1990: 147), though observing that post-modern tourists demand "authenticity", recognises that they are «playful» and aware that tourism is «just a game», and questions if after all it would be possible to construct a post-modern tourist site around «absolutely any object». 12 In that respect, an interesting querelle regarding the definition of heritage is worth reporting. Poria et al. (2001) argue that definitions of heritage tourism based on the historical attributes of places are misleading for the management of sites, and instead propose an alternative definition based on the motivations of visitors. This helps for instance to distinguish different kinds of visitors according to their attitude (perceptions, appreciation, significance) towards the heritage. Garrod and Fyall (2001) criticise this definition for (among other things) being tautological and neglecting the necessity of management policies to regulate the flows of those who visit a site though not being heritage tourists as defined by Poria et al., and they conclude: «in qualitative research, the absence of precise definitions can be often a virtue rather than a vice».

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prevailing socio-cultural models such as the liberal-capitalistic one, resulting in standardisation of the cityscapes and modifying the quality of life regimes for local populations everywhere in the world.

Globalisation diminishes the capacity of local forces (entrepreneurs and governments) to control – and benefit from – tourism development, causing it to be unbalanced, and ultimately unsuccessful. On one hand, the exclusion from the distribution of wealth generated by tourism generates resentment in local communities, who feel expropriated from the exploitation of resources that they feel they own. This is something that adds to the social inequity of “divided cities” analysed by Fainstein et al. (1992): a class split in “access” to knowledge, local resources, revenues, etc. On one hand a global business community who controls resources and communication flows, and increasingly forges the urban landscapes with the signs, symbols, stereotyped places; on the other the multitudes of “excluded”, invisible and disconnected.

In the long run, the standardised global city may clash with the search for authenticity and uniqueness that motivates the contemporary traveller. True, multinational corporations have learnt that lesson and are able to provide “standardised” or “industrialised authenticity” (Britton 1991), but the results of cultural homogeneisation are far-fetching, for example competition to attract visitors and business is pushed to extremes. In an age in which absolute advantage is reputed more important than comparative advantages (Jensen-Butler in Jensen-Butler et al. 1997), small differences in the characteristics and qualities of places have decisive influence of location (and travel) choices.

Ioannides and Debbage (1998) discuss the outcome of these contrasting trends in the framework of flexible production, which is emerging as the dominating structure in the industry (not yet post-Fordist), allowing consumers some autonomy in shaping their own travel experience. Through sophisticated reservation systems (CRS), airlines can manipulate the production decisions of local agents. Tour operators influence the market by negotiating enormous packaged deals between all principal suppliers. These authors doubt that the “spatial fixity” of parts of the tourist chain is culturally significant, with important consequences in terms of economic fitness of the destinations. Ioannides (1998) describes what are in practice the factors that connect the global part of the chain to places-destinations. The connection between the “global” and the “local” industry takes place when tourist packages are assembled by tour operators and distributed by travel agents (in the markets of origin, such as suburban areas and small centres in the US), and come to include local resources and experiences.

Lafferty and van Fossen (2001) highlight the difficulties of completely integrating production chains between the local and the global level, and even within the global industries. Different entrepreneurial cultures may leave the tourist system incompletely industrialised, as is the case of the unsuccessful mergers between international hotel chains and airlines. In that context, different parts of the industry organise along different economic and cultural coordinates. Airlines maintained a strong “Fordist”, hierarchical culture even after the deregulatory trend, unfit to be articulated in the local networks. The hotel industry on the contrary, characterised by hi-touch, labour-intensive production, is an ideal ground for post-Fordist arrangements (or pre-Fordist for non-hotel, small-size firms) where the local dimension retains a certain weight. The sector, in fact, is increasingly divided between chains

24

and small and medium businesses. The former operate mainly in an oligopolistic market, the latter are in a competitive market where contextual, “environmental” qualities are crucial.

The tourist region

In heritage destinations, while core products are (relatively) immobile because of their largely irreproducible nature, the complementary activities are free to relocate in a wide “tourist region”. Tourist regions can be broadly defined as the areas involved in the tourist function of a certain destination. This means that each heritage city has “its” tourist region, more or less extensive, and tourist regions of different destinations may overlap.

Tourist regions have architectural, cultural and functional links with the heritage city, which reflect a “leakage” of the tourist function over the city boundaries. Tourist facilities are located along the main communication links between a city and its hinterland; the countryside becomes scattered with hotels, prestigious reseaux, and green and recreational attractions; peripheral train stations and airports are utilised as "alternative gateways”, less congested or cheaper than the main ones. As pointed out by Miossec (1976: 4), «the tourist space is both a transversed and an occupied place». What is more important, tourist regions are spaces in which the tourist function can develop when the central resources are saturated, and the global demand continues to increase. When it is not possible to second the growing demand by building new hotels and facilities (or reconverting old buildings) in the city centre, the growth has to occur first at the city boundaries, and then at greater distances from the city. Thus, the area of activity of tourism comes to “outsize” the city itself, diffusing in the surrounding territory. This process “bends” the economic space around the heritage city, involving larger and larger portions of the territory in the production of a tourist product that is still centred in the heritage city, but is not necessarily purchased or consumed there. The development of tourism has then become a process of “regionalisation” of tourism.

Miossec (1976) analyses the growth of tourism in regions, identifying typical patterns. In his analyis, the “centre” of the tourist region, the heritage city, is distinguished from the “periphery” merely in functional terms. It is the “epicentre” of the visitors’ flows, the main reason for travelling; however, it shares only partially in the financial flow that is involved in the physical one. In practice, within tourist regions, relations and mobility patterns are blurred and complex. For instance, the presence of another destination in its proximity determines a certain “sharing” of the visitors’ flow, with some visitors visiting both cities and spending the night in either or both places. In such cases, a “functional complementarity” among different visitor groups is activated. For instance, heritage tourists may be attracted by the leisure attractions found in nearby resorts, and holidaymakers may take a day off from “sea and sand” duties if the weather is bad, and seize the opportunity for a cultural trip.

The enlargement of tourist regions with the involvement in the local tourist products of resources located farther away from the core, presents to the visitors an attractive alternative to central sojourns, for a number of reasons. First, the price gradient generated by proximity to central resources is such that visitors face a real trade-off between prices and distance. That aspect is discussed by Rispoli and Van der Borg (1988). Less wealthy visitors may afford only non-central accommodation. Secondly, competition between suppliers in the periphery of a tourist system is based on other elements than easy access to the primary products; consequently one expects to find a higher level of service. That has been confirmed by

25

empirical research. Lastly, peripheral facilities are often more accessible by car than the central ones.

The resulting spatial configuration of the tourist system is described in Fig. 2.3, where the local level of the system is distinguished from the global environment in which the production of tourism takes place. Between these two levels, the regional level is the relevant one for the development of tourism. While the consumption of primary goods takes place locally, clearly the supply system is organised across the territory and involves also a regional articulation of the demand side. The spatial scale of activity as well as the conditions of exchange, are themselves altered in the development of tourism, and that dynamism is a crucial aspect for tourism sustainability in the analysis presented in Ch. 3 and ff.

Fig. 2.3 – The tourist system in the global-local nexus

DESTINATION (local)

FINAL DEMAND (visitors)

SUPPLY SYSTEM

GLOBAL INDUSTRY )tour operators, carriers)

LOCAL INDUSTRY )private operators, institutions)

PRIMARY RESOURCES (cultural heritage, landscape, atmosphere)

purchase of travel

Purchase/consumption of tourist products

“Pro-sumption” of primary products

Prices, quantities, qualities

THE

TOU

RIS

T SY

STEM

NO PLACE (global)

2.3.4 The Stakeholders of Tourism Development: Decision-Makers, Citizens, Corporations, Tourists

There are at least three different communities involved in the production, delivery and consumption of tourist commodities: the private sector and its organisations; the citizens and the democratic institutions of representation; and the visitors themselves. A “horizontal” typology can then be proposed according to their degree of “localism”, which can be the very local (e.g. the level of municipal administrations), the meso-local (regional, provincial or national), and the no-place or global level that increasingly characterises the international economic activities like the tourism industry. In this way, a 9-entry matrix can be constructed

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that covers the whole range of stakeholders involved in the tourist system (Fig. 2.4). This typology reflects the double concern of this study.

On one hand, we highlight that the tourist space is not exhausted in the local-global polarity, but that there exist a regional space that is relevant as a strategic space, as argued in the previous section. On the other, we stress that not only the industry (and not only the global industry, as part of the literature seems to imply) is behaving strategically, but that local communities and their governments, as well as visitors, by their behaviour affect the organisation and performance of the tourist system in a locality, determining its sustainability.

The local population has an obvious interest in the enjoyment of the economic and social benefits brought by tourism. Among these benefits are the revenues from visitors’ expenditure, the job opportunities especially for lower skills (the ones most severely struck by unfavourable economic conditions), and a relatively high availability of services and commodities that are normally found in larger cities, such as theatres, events, education courses, etc. They also bear most of the typical costs caused by tourist activity, such as higher than average prices and taxes, as well as the negative externalities seen earlier. Of course, the distribution of costs and benefits from tourism among the local population is highly uneven. A part of the population, those who are actively employed in the tourist sector, enjoys most of the benefits. Given that much of the tourist economy is hardly formal and lends itself very easily to forms of fiscal elusion and “black market”, the polarisation may acquire acute features. This may in some cases lead to a strong aversion of the local residents towards tourism, seen as a nuisance and a source of higher costs. In most cases, the situation is less polarised and even the local residents who are not involved in tourism are ready to acknowledge the benefits accrued by tourism, much as they are aware of the threats to the local environment (Van der Borg 1993; Russo 2002 b).

Fig. 2.4 - Stakeholders in a local tourist system

citizens and institutions private sector consumers

loca

l local population; city council

local business community; chamber of

commerce; hotel association; etc.

local cultural consumers

regi

onal

population of neighbouring cities

and provinces; provincial and

regional governments

regional tourist board, transport

companies

daily shoppers, schools, regional

cultural consumers

glob

al

world population, ethnic and cultural groups with roots in

local community

travel and tourism industry corporations

national and international visitors

PLAC

E R

EFER

ENC

E

actors

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Still, local residents have the power to block or hamper initiatives for the development of tourism when they perceive a possible disadvantage due to the imposition of further costs. Normally the control is exercised through democratically elected institutions. In some cases, the outcome of the process of mediation is a more balanced and sustainable development (as was the case with the decision not to hold the Expo 2000 in Venice after the opposition of a substantial proportion of the population and local institutions, allied with prominent international organisations such as UNESCO). In other cases, important opportunities for development may be missed for lack of information on the distribution of the benefits, or because of a natural scepticism among the community about the capacity of the institutions to maintain control. Local institutions often have a very difficult task in mediating between interest groups and lobbies connected with the tourist economy, the legitimate stances from the non-profit cultural sector, the pressure from development-adverse organisations of the community (e.g. environmental groups), and the pressure coming from “outsiders” like corporations and regional and national governments.

In some cases, to keep pace with sustainable development it might be necessary to overlook some of the local stances (e.g. pressure for changes in the land use and zoning) and instead adopt an outsiders' view that attaches more value to the preservation of the historical assets. In fact, it must be acknowledged that the world population at large has an interest in the preservation of historical landmarks and art objects. This may be true when they bear a link with the historical heritage of the place because of ethnic or cultural ties. For instance, the American Jews are interested in the preservation of historical sites in Israel and the memoirs of the Shoah in Europe. Graham et al. (1998) treat this topic in depth, arguing that in fact tourism is also about “contention” between the stakeholders of history, and heritage preservation and interpretation is a political issue that sometimes has to be negotiated at a level higher than the local. Hence the existence of organisations like the World Heritage List of UNESCO, whose goal is to preserve, make accessible and promote the landmarks of the history of civilisation to the benefit of all present and future generations. In such cases, local institutions may “pilfer” development policies for opportunistic interests, forgetting what is best for the community at large.

Between these two populations, the local and the world community, it should be recognised that there exist an intermediate level, the regional population and their government organisations, which bears special interests with respect to the tourism development in a locality. They may be thriving because of proximity to the historical city while contributing very little to its preservation; on the other hand, they bear some very special costs such as providing infrastructure and land to "corridors" of accessibility to the region without seeing much of the socio-cultural benefits that tourism brings to the central areas 13.

Talking about the private sector, the same spatial segmentation applies to local operators, whose interests overlap to some extent with those of the resident population; a regional tourist industry that participates in the generation of costs and benefits in the system. But, what is more relevant, one finds a wide, placeless industry that more often than not "sets the rules" of 13 One is reminded, for instance, of the low profile of peripheral communities to important cultural and art centres where airport and HST facilities are located, like e.g. Zaventem in the Brussels region, Amstelveen in the Amsterdam region, or Lyon-Satolas. These suburban communities aspire to a better balance in their role as providers of an essential element of the tourist package, and pressure towards regional governments to attenuate some of the worst effect like noise and traffic pollution.

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the whole game through international corporate strategies. In general, the tourist industry is seen as fragmented and poorly articulated (Van der Borg et al. 1998). The actors with "industrial" characteristics, such as international tour operators, air carriers and international hotel chains, have weak roots in the local business communities (Shaw and Williams 1998). They are able to influence decisions at the national and international levels, and determine tourism development in highly-specialised tourist resorts (Debbage 1990), but seldom do they play a role in regional and metropolitan planning. Local business communities, on the other hand, are not likely to look actively for partnerships with non-local actors. Although these forms of “diagonal partnerships” (Poon 1993) are becoming an increasingly important way to improve the response of the tourist industry to local conditions through strategic product placement, they do not seem to be sufficiently developed in Europe, especially not in the urban tourist market.

However, the business community involved in the process of “tourismification” of the space is wider than the travel and tourism sector. The benefits that the private sector expects from an improved capacity of the city to attract international business and leisure travellers are high. The positive impact of international exposure for the business community are clearly shown by the increased interest of the public sector in investing in flagship projects. A high level of tourist activity brings about a lively and stimulating cultural environment, which is an increasingly important attraction factor for skilled labour and companies. The private sector is thus likely to support a strategy of urban development based on the organisation of "tourist places", such as shopping malls, congress and meeting facilities, top-sport complexes, cultural districts, and other amenities; an improved international accessibility; and the promotion of the tourist resources through dedicated agencies.

Last, also among visitors there are noticeable differences according to taste, budget, and a number of other variables; these differences will be explored more in detail in the analytic section of this dissertation. However, if one looks merely at the geographical scale of travels, the fact emerges that a heritage city can exist both as a destination for international and domestic holidays, and as a regional centre for shoppers and recreationists that are not necessarily interested in cultural assets and tourist facilities, but nevertheless make use of shared resources (terminals, access roads, parking space). Hence the necessity of taking into account this important flow of city users (as well as comparable segments such as daily commuters and students), as the planning of tourism may offer opportunities for mixed-use solutions. It may be added – and will be argued later in more depth - that a festive city, one that produces new culture and is socially sustainable, is also attractive for its citizens and those of the surrounding areas. We imply that management strategies do not necessarily end with the international promotion of the tourist city, but need to consider as well the local community, with its distinct characteristics, which may have a different attitude to, and a different willingness to pay for, these activities.

2.3.5 Conditions of exchange

Now that the organisation of demand and supply for a tourist destination, as well as the interests at stake for different actors have been described, we will focus on the process of exchange, that is, the mechanism by which demand and supply come in contact and tourist commodities are exchanged. The characteristics of the exchange are crucial for the sustainability of tourism development. In fact, in the process a value is generated and

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exchanged; the allocation of this value determines the long-term efficiency and equity of the process of production and consumption of tourist goods.

The actual conditions of exchange in the tourist market are determined to a large extent by the nature of the goods exchanged and of the environment in which the exchange takes place. The nature of the goods affects the structure of the market, and hence the pricing strategies of the different actors involved in the tourist production chain; the environment affects the location decisions of operators and visitors. These elements are important aspects of the sustainability of tourism development in a location. Pricing and market strategies of the operators affect the long-term consistency and economic fitness of the industry; location choices affect the spatial-economic configuration of the activity and hence the boundaries of the "relevant region".

The tourist market is characterised by imperfect competition, and imperfect information regarding specific goods like the secondary products. The competitive setting is made imperfect by several factors. First of all, tourist operators may exploit location advantages. Since space in the proximity of a main attraction or sight is limited, the operators who are located there enjoy to some extent a “natural monopolistic power” that generates a location rent. The higher prices that they charge reflect higher costs (e.g. higher rent paid for the premise, higher cost of permit), but are mainly due to the fact that a non-priced “environmental quality” – proximity to a central attraction – is sold together with the main commodity. More in general, Gravelle and Rees (1992: 270) justify the assumption of monopolistic behaviour for such operators (in their example restaurants) arguing that they can discriminate with respect to quality, location, ambience, etc., to the point that lowering or increasing the price would not affect their market share.

Sinclair and Stabler (1997: 72-73) introduce the distinction between competition in a local market and that between different destinations. Operators in both markets may have varying degrees of market power. Intra-city competition is strong where there is no historical localised centre and leisure attractions are diffused (e.g. holiday resorts, mountain resorts, spa), while proximity to historical attractions in heritage cities guarantees a certain degree of location monopolistic power. Inter-city competition is harsher in the leisure tourist market where destinations are highly substitutable, whereas it is less intense in cultural tourism, in which destinations have a high degree of uniqueness due to the peculiar nature of the historical and man-made resources. Thus, a reasonable assumption is that operators in historical cities, even in the absence of collusion on the producers' site, may act “as if” they were monopolists in restricted portions of the urban space. Some extent of collusion in the market could still be found, determined by the fact that spatial competition can be high at the inter-city level. This means that cities vie with one another as tourist destinations, but within cities, the single operators behave as a cohesive industry fixing prices and quality standards.

The nature of the market determines not only particular pricing strategies, but also quality, and both aspects may affect the destination’s competitiveness and tourism sustainability. In fact, many of the commodities that make up the tourist product are experience goods. In economic theory, experience goods are those commodities whose quality can be learnt only through consumption. Sinclair and Stabler (1997) define experience goods «as goods that cannot be stored and cannot be examined prior to purchase». This characteristic is found to varying extents in the different components of the tourist product.

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An important question is how explicitly the different operators are able or willing to "signal" the quality of the good that they sell. If the true quality of the product is not signalled, in situations of imperfect information visitors may change their consumption pattern, as in the notorious Akerlof model (applied to consumer services of the touristic type, for instance in Laffont 1989), with possible repercussions on the very existence of a market for tourist goods. Signalling is made possible though a variety of techniques, for instance publishing upgraded listings, price bills or assessments in tourist guides. Hotel and restaurant associations offer to their members to be listed and evaluated according to standard parameters. It is difficult, though, to know in advance the quality of the goods offered by retail shops, guides, private transport, and the like. In some cases, the uncertainty remains also after the experience, if no comparative assessment is possible (for instance for lack of alternatives – as in the case of public transport – or lack of opportunities). In addition, tourist goods are necessarily consumed in the destination. Therefore, consumers are likely to rely for their choice heavily on psychological inputs, such as expectations, and informational inputs, such as “word of mouth” and reputation (Keane 1996).

The quality of substantial parts of the “primary product” is more or less given, the more so in the heritage city in which monuments and art objects are the central attractions. Quality can be objectively assessed and displayed in tourist guides and other tools on which visitors generally base their visit; good indicators in that regard are the “uniqueness” of the heritage and its state of conservation 14. However, we suggest that the global assessment of the quality of the heritage depends on the quality of the other elements of the package, which are only partially known before consumption. That is, a person may know that a certain historical compound is a valuable object to visit, but once he is there and finds that the streets are full of cheap and smelly food stalls, and that the cathedral can hardly be accessed because of congestion or unfriendly visitor services, his appreciation of the overall quality of the experience will be diminished. The problem of the inconsistency between individual behaviour and social optima reflects a wider problem tied up with the public or semi-public nature of most tourist attractions. Part of the tourist product (mainly the primary goods) is not produced or sold, but is freely available. For instance, the “historical character” of a place. Economic theory illustrates the problems of pricing public goods (Samuelson 1954). Even when a price could in fact be charged because the fruition of the cultural service presents the characteristics of excludability (e.g. a visit to a monument or a museum), equity considerations (e.g. guaranteeing access to culture to disadvantaged citizens) may suggest that pricing is political rather than reflective of the costs incurred in providing the service.

The non-priced goods justify the development of a tourist industry, whose existence relies to a large extent on the continued provision to travellers of the same quantity and quality of services. However, when no price is paid for these goods (because it has been fixed on market considerations, or its payment is impossible/non economic), the resulting allocation of

14 The “value” of the heritage can be calculated though various techniques, among which contingent evaluation (cf. Carson et al. 1995) or restoration costs (Frey 1997). This is just one of the dimensions on which the “attractiveness” of the heritage can be assessed; there are other cultural, subjective and contingent elements that play a role. For instance, the fact of being the legacy of a “dominant” cultural age (as argued by Graham et al. 1998), or the inclusion in visible societal landmarks, like a movie or a book, or finally because of the immediate peril which it might incur.

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quantities within the tourist package is not the most efficient (Fossati and Panella 2000). Complementary products may be over-supplied, giving rise to diseconomies that spoil the quality of primary goods. Keane (1996, 1997) explicitly includes quality in the pricing behaviour of tourist operators, showing that in a market characterised by asymmetrical information, operators charge a mark-up to continue to supply high-quality goods. This may lead to a decrease of the overall competitiveness of the destination; it is typically the the dilemma of tourism that eats itself described by many authors and implicit in the class of evolutionary models of tourism known as "life-cycle", to be analysed further-on in this chapter.

An important consideration in this respect is that even if primary goods are not produced but inherited from the past, or if their provision is priced out of equity considerations, still their conservation is costly, and the necessary finance should come out of central transfers and grants. However, in an era of increased attention for the cost-effectiveness of expenditure, decentralisation, and deregulation, the heritage is under pressure to generate itself the means of its own preservation. It means that, increasingly, equity considerations give way to economic efficiency, whenever prices are paid to access the attractions. In the cases when attractions are not paid for, as happens with non-excludable or intangible assets, the problem becomes how to “internalise” the costs of the preservation of the heritage in the economy generated by tourism in a destination, or in simple words, how to tax tourist revenues in such a way that the quality of the stock of primary resources is maintained.

Each stakeholder is an “actor” of tourism development, because with his behaviour, he or she affects the outcome of the process. It is important, then, to recognise that each actor decides strategically; and that strategies are not limited to simple decisions such as whether or not to buy or to sell, but also to more dynamically relevant decisions such as the choice of location within the tourist region, or the quality sold/purchased. Hence we will introduce a new element into the tourist system that is crucial for its dynamic properties, and thus for its sustainability: the strategic space. Fig. 2.5 describes the connection between the static and the dynamic dimensions of tourism. For instance, tourist businesses, through restructuring within the chain of value, can increase or reduce the “leakage” of resources out of the local economic system. Moreover, by modifying their behaviour with respect to quantities, qualities and prices, they affect the market for the primary products, altering the competitiveness of the destination. However, on the demand side as well, strategic choices are important for the long-term performance of the destination. These may regard the division of the budget between primary and secondary products, the organisation of the travel (length of stay, central / peripheral accommodation), and the patterns of consumption. Finally, the government adopts strategic decisions regarding regulation or taxing; and the community itself is an important player in a dynamic context; for instance, by relocating from more touristic to less touristic areas, it affects the social characteristics of the place.

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Fig. 2.5 – The tourist system and the strategic space

DESTINATION (local)

FINAL DEMAND (visitors)

SUPPLY SYSTEM

GLOBAL INDUSTRY )tour operators, carriers)

LOCAL INDUSTRY )private operators, institutions)

PRIMARY RESOURCES (cultural heritage, landscape, atmosphere)

purchase of travel

Purchase/consumption of tourist products

“Pro-sumption” of primary products

Prices, quantities, qualities

THE

TOU

RIS

T SY

STEM

NO PLACE (global)

Strategic space for demand side

Strategic space for supply side

Change travel decisions

Change consumption decisions (quantity, quality)

Change consumption location (core vs. periphery)

Change industry configuration (vertical (dis) integration, merging)

Change industry strategy (pricing, supply, quality, location) TH

E ST

RA

TEG

IC S

PAC

E

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2.4 Dynamic properties of tourist systems

In the last section, we have highlighted a number of features that may bring unbalanced growth and disruption to the tourist system. First of all, the array of externalities which are associated to distinct configurations of the market. Next, the strategic inconsistencies between different stakeholders involved in the production of tourist goods, for instance between heritage managers and conservators and the hospitality and transport industries. Finally, the spatial articulation of the tourist market, where areas of costs increasingly diverge from the areas benefiting from tourism, as the visitors’ demand is not completely satisfied by central producers. Such phenomena are likely to affect the main dimensions along which sustainability can be measured, the physical, the economic, and the socio-cultural.

The progressive disruption of the physical, economic and socio-cultural environment that leads to an unsustainable outcome of tourism development is a dynamic, evolutionary process. Presumably, when the number of visitors to a site exceeds a certain threshold (the carrying capacity), a system undergoes critical changes (Pearce and Turner 1990). However, the “objective function” of the carrying capacity, as well as the mechanism through which it operates, varies according to the angle of observation, reflecting the “undetermined” nature of tourism (Lindberg, Mc Cool, and Stankey 1997). Different authors from various disciplines have commented and theorised on such processes. Their efforts, though, have not led to an integral framework for policy. We wish to present their main findings, highlighting the consequences in terms of management and policy.

2.4.1 Concept and applications of physical carrying capacity

The consequence of physical damage to historical assets is quite obvious. In some cases, the damages suffered by monuments under heavy visitation pressure have forced site managers to extreme measures, because there were signs of visitors’ dissatisfaction (as in the case of Pamukkale in Turkey, documented by Yuksel et al. 1999). However, most of the time, access to sites has been restricted even before the damage could become manifest, as in the famous case of the Lascaux caves in France (Deprest 1997). In this line of reasoning, the concept of physical carrying capacity can be elaborated – the maximum number of people that can be admitted to a site per day, or hour, or at one time, without any irreparable damage to the physical characteristics of the site being inflicted (Glasson et al. 1995). Many sites such as churches and museums have calculated these numbers and regulated their admission policy accordingly. For instance, the admission policy to the Alhambra, Granada, is dictated by an accurate calculus of the carrying capacity of the different spaces of which this monument consists (Patronato de la Alhambra y Generalife 1999). However, historical sites and heritage cities present some features that make the straightforward application of the concept of physical carrying capacity problematic; and even the consequences of the violation are not immediately easy to grasp.

First of all, heritage cities are mainly collections of objects and sites. Each of them has a certain carrying capacity, but then, what is the total physical capacity of the city? A criterion would be that of setting the capacity equal to the minimum capacity of any of the objects included for which there is no possibility of limiting the visit (e.g. a square or a church), to prevent any possibility that the excessive flow may cause any damage. However, it is evident that this would lead to very low numbers, and that the concept of capacity is greatly

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dependent on flow management and access policies. That is, if the visitors' flow could be dispersed throughout the site, and if access to any component of the site could be regulated, the capacity of the city would be greatly increased.

Therefore, the definition of carrying capacity in a heritage city is problematic. Of course, there is a maximum to the number that could be let into a city without great trouble for the integrity of the city, as happens in Venice on the occasion of the main events. But the exact evaluation of these numbers and the exact relation with the integrity of the single assets is still blurred. Therefore, the attention of planners should turn to a different approach to carrying capacities and visiting thresholds, according to which the “destination” is regarded as an economic unit, inserted in a mechanism of production and transfer of value. In fact, the economic or socio-economic carrying capacity turns out to be a much more popular concept than the physical one in studies of urban tourism.

2.4.2 The tourist city as a dynamic economic system

From multipliers to socio-economic carrying capacities and life-cycles

The economic impacts of tourism are normally assessed through multiplier analysis. This analytic technique is concerned with «the way in which tourism expenditure filters though the economy» (Pearce 1989: 205). By different measures, it is possible to evaluate how much direct revenue (or jobs, or sales) is generated by a unit expenditure on tourist goods; how much revenue is indirectly generated in the value chain of tourist production; and how much of this revenue is spend for other goods and services locally. The measures are direct, indirect and induced tourist multipliers. Intuitively, tourist economies that have a stronger impact on the local economy are more sustainable than those for which “production costs” exceed the benefits.

Direct and indirect multipliers depend on the structure of the local economy and on the composition of tourist demand. The greater the share of tourist goods that are produced locally, the higher the multiplier. On the other hand, if the local economy is structurally an import economy, the tourist multipliers will be lower. Therefore, the larger the economic mass of the area in question, the larger the expected share of tourist income that remains in the place: that's why, intuitively, tourist revenues are proportionally higher in London than in an African archipelago. Thus a first criticism that can be raised to multiplier analysis is that it is heavily influenced by the size of the study area; the larger the study area, the higher the multiplier. With regard to indirect multipliers, their magnitude will depend on the structure of inter-industrial linkages at the local scale. If the chain of value of tourism is completely local, then the indirect benefits generated by tourism are retained in the area. Input-output tables are utilised to evaluate indirect effects, even though they are seldom available at the local level, so direct measurement through sample observation and estimates are used instead. As regards induced benefits, they depend crucially on the characteristics of the human resources: a pool of seasonal workers in a beach resort produces less induced revenue than the local workforce of a cultural city.

These instruments, sophisticated as they could be, are hardly precise given the fact that for fiscal reasons much of the locally generated revenue is not accounted for. Moreover, it is generally difficult to identify a relevant region of observation: Hall and Page (1999: 123) recognise that though the spatial scale is an important component of an analysis of tourism

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impact, geographers have not played a major role in the development of these techniques. There are other reasons for considering tourism multipliers incomplete instruments for the analysis of tourism sustainability. They overlook normative considerations and ultimately proceed from a belief that more is always better – more total income, more production, more growth, etc. (Tooman 1997). The distribution of the benefits and costs that arise from tourist activities is not taken into consideration, nor are the opportunity costs that are hidden in the calculus15. To build a framework for policy, multipliers are certainly a precious tool, as they provide a “snapshot” of the magnitudes at stake. However, they are clearly insufficient to determine whether a tourist system is sustainable. In other words, they have little to say about the dynamic properties of tourist systems.

Sustainability, from an economic point of view, hints at the capacity of a system to remain competitive in the long-term, contributing to the development of the locality. If tourism is an economic sector of the city which to a large extent determines – and, as often happens with heritage cities, totally dominates – the performance of the local economy, we seek a development path for the tourist sector (or life-cycle) that is as smooth and long-lasting as possible. Excessive fluctuation, as well as stagnation and decline, are certainly negative for the local economy, which would be exposed to shocks and recession from national and international factors that are hardly under the control of local policy. The product mix is also important, because mono-functional economies are structurally more fragile that diversified ones. Thus, observing the performance of the tourism industry alone is not sufficient. The analysis of tourism sustainability has to be conveniently enlarged to consider synergies and conflicts between tourism and other sectors of the economy. We also need benchmark measures to use for policy, as a complete system of indicators that alerts tourist managers whenever the system is going out of the sustainable path.

As a first step, the concept of economic impact must be made dynamic, considering in an integral way the cause-effect relations between the variables involved in the process of tourism development. Many other variables than revenues or jobs alone are crucial in that respect, such as consumer satisfaction, quality, investment, etc. A framework of analysis like the destination cycle, and associated policy tools like capacity thresholds, may enrich the description of a tourist system in a dynamic setting.

Life-cycles and carrying capacities

The destination life-cycle diagram is widely utilised to describe the cyclic fluctuations that characterise the evolution of a tourist destination (for exhaustive reviews of this literature, see Deprest 1997; Da Conceiçao Gonçalves and Roque 1997). The suggestion is that, as any other product, tourist destinations go through a process of “birth” and “decline”. The diagram is indeed an adaptation to tourism studies of the concept of product life-cycle extensively applied in business science. However, the implications, especially on the normative side, are far-fetching, as we are dealing with non-reproducible resources and entire economies rather than with a firm and a consumer group.

15 An attempt to model opportunity costs is due to Prud’Homme (1986), but it has never been made an operational tool for policy.

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Its original formulation, introduced in geographic studies by Christaller (1963) and made popular as a conceptual frame for tourism development by R.W. Butler (1980), uses as an indicator the absolute number of tourists (Fig. 2.6). In the earlier stages of development, the destination attracts visitors that are essentially “pioneers”. That flow may never reach a sufficient mass to be economically relevant, but if it does, investments are started in tourist infrastructure, services and promotion, and the city becomes a destination for overnight stays. The destination eventually enters a stage of take-off, in which the material and immaterial benefits accrued by tourism increase dramatically and the local economy gets boosting.

Fig. 2.6 - The destination life-cycle according to R. W. Butler (1980)

When tourists reach a certain critical level, the rate of growth decreases and then stagnates. If at that stage policy does not intervene with appropriate strategies, like the “rejuvenation” of the product mix, decline may follow. Different interpretations have been given for the emergence of the stagnation and decline stages. Butler’s original formulation considers the modification in the qualities of the place. Emerging external costs affect the quality of the visitors’ experience, and induce a downturn in the propensity to visit the site. Plog (1973, 1994) argues that different social or “attitudinal” groups are likely to react in different ways to changes in place qualities, so that the destination is popular at successive stages to different segments. Therefore the resulting cycle highlights the popularity of the destination at first to an elite of “psychocentric” pioneers, and later to the mass tourist market made up of “mid-centric” to “allocentric” visitors. When the environmental quality deteriorates as a result of overcrowding and banalisation due to practices of mass tourism, the cycle is complete and the destination goes “out of fashion”. This formulation of the cycle has been utilised to explain the rise and fall of popular seaside resorts in the US and UK, like Atlantic City or Brighton.

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Prudeaux (2000) finds that rather than a life-cycle, it is more appropriate to talk about a development spectrum that results from the super-imposition of different stages of development in different markets.

Other authors (Ioannides 1992; Haywood 1986) argue that stagnation and decline may be the consequence of changes on the supply side of the industry, putting the accent on the short-term – and to a certain extent, short-sighted – nature of tourist businesses, and hence, inherently unsustainable. There are those who believe that as tourism consolidates and the maturity stage is reached, sensible changes in the industrial organisation of tourism come about, with non-local actors and corporate giants coming to dominate the production of tourist goods. These actors lack a sense of place and are less likely to internalise environmental concerns in their strategy, with a rapid loss of quality in the destination as the result. The resulting cycle is rather a “profit” cycle of the tourist businesses.

Fig. 2.7: The destination life cycle re-interpreted: visitor mix and spatial allocation of costs and benefits from tourism development in a site. Adapted from Van der Borg (1991).

Finally, some authors focus on the changes in the spatial organisation of the tourist system (Debbage 1990; Gormsen 1981; Miossec 1976; Van der Borg 1991) and the repercussions on the performance of the destination within tourist regions. The original model can be accordingly extended by a qualitative element, that is the kind of visitor that is attracted to the

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town (Van der Borg 1991). A close scrutiny of the characteristic of the visitors’ flow in cities at different stages of their life-cycle suggests that not only the absolute number of visitors is changing, but also their mix, with major consequences in terms of associated costs and benefits in the space.

In the upper part of Fig. 2.7, this “revisited” version of the tourist life-cycle plan is presented. Each stage of the life cycle can be associated to a specific spatial distribution of the costs and benefits arising from the tourist activities (lower part of Fig. 2.7). At the first stage, the area benefiting from tourism is different from the newly-discovered destination. As development proceeds (e.g. with the building of hotels) the two regions almost coincide. Municipalities are able to cover the costs generated by tourism with the receipts from tourism that at this stage are concentrated in the locality. At a later stage, the tourist revenues are diffused to the rest of the region as a result of the emergence of a functional tourist region, while costs remain concentrated. If the core enters the declining stage, such costs may diffuse to the rest of the region. The spatial interpretation of the life-cycle dynamics is relevant because it makes it clear that the origins of the stagnation and decline of tourism have to be looked for in the pattern of expansion of tourism itself.

The socio-economic carrying capacity: an operational approach

A complementary concept to the life-cycle scheme is that of economic or socio-economic carrying capacity. This concept has been derived, and adapted to recreation studies, from biology, and in particular from studies of the behaviour of herds. In the original context, the carrying capacity of a pasture represents the optimum number of animals that should be let in so that their reproduction means are guaranteed. Translated in terms of tourism, this concept implies that above a certain level of use, the development of tourism becomes economically (or socio-economically) unsustainable. The critical level needs not be that of physical disruption, hence the concept of economic carrying capacity is generally more restrictive than that of physical carrying capacity. The link with the life-cycle is immediate: the carrying capacity of a tourist system is the threshold above which the generalised costs from tourism development start to outweigh the benefits, provoking a decline in the performance of the tourist economy. According to Martin and Uysal (1990: 329), the challenge for tourist managers is to keep flows below the threshold of carrying capacity, which they define as «the number of visitors that an area can accommodate before negative impacts occur».

Obviously, since the life-cycle can be interpreted differently, so can the carrying capacity concept. The definition itself suggests that this concept has to do with levels of utility, or social efficiency. The choice of the utility or objective function to be maximised depends on the approach. Generally, when the utility is that of the visitors, we speak of economic carrying capacity, while when we consider a more comprehensive maximandus (the urban economy), the concept is that of socio-economic carrying capacity.

Krutilla and Fisher (1985) define economic carrying capacity as the maximum number of visitors that can be accommodated in a site at a constant quality of their experience. Then if the carrying capacity is violated the visitors’ experience decreases, leading to a decline in the willingness to pay for the tourist product. This way of defining carrying capacity is attractive, but it entails some operational problems. The first is that every destination is likely to attract a mix of visitors with heterogeneous tastes, hence the difficulty of aggregating levels of utility. Secondly, the link between visitors’ satisfaction and willingness to pay is a tenuous one, when

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information asymmetries and reputation effects are taken into consideration (this point is made by Canestrelli and Costa 1991: 299). Therefore the economic carrying capacity is difficult to use as a regulatory tool for practices of tourist management.

The alternative concept of socio-economic carrying capacity is based on the rationale that in a tourist city, two population groups co-exist: one that derives income from the tourist industry, and one that is not connected with tourism but that uses the same facilities or “sub-systems” as visitors, and hence suffers decreased utility when the use of such facilities by visitors is excessive. The challenge for tourist planners is therefore that of maximising the utility of the first group under the constraint of a constant level of utility of the second group. Following this approach, Costa and Van der Borg (1988) and then Canestrelli and Costa (1991) define the carrying capacity as the number of visitors – tourists or excursionists – that can be admitted without affecting the capacity of the city to deliver the services that are demanded by different population groups (residents and tourists). A method is proposed to calculate these numbers, which has been experimentally applied in the case of Venice. The authors define an objective function of the tourism industry, a set of constraints, and three groups of “users” – tourists staying in hotel accommodations, tourists staying in non-hotel accommodations, and excursionists – who contribute to the tourist revenues and utilise the constraining sub-systems to different levels.

The maximisation of the objective function under the set of constraints yields the optimum values for each group of visitors (and hence the optimum “mix”). Moreover, it identifies which constraints are binding, and the shadow-prices attached to each. In short, this exercise of linear programming (or “fuzzy” as in Canestrelli and Costa 1991) allows us to recognise the “cost” of violations of the carrying capacity for each group of visitors to a city, and hence gives clear indications for policy: either the number of visitors in each group to be kept below the optimum threshold through regulatory tools, or the binding constraints to be loosened so that capacity is enlarged. In the case study of Ch. 5 we will analyse the results of this exercise in the case of Venice, but as expected - the “problematic” visitors’ group can be anticipated to turn out to be the excursionists. Their use of the city’s resources erodes the utility both of other visitors, and of the resident group that does not live on tourism.

2.4.3 Social and cultural aspects of the development of heritage tourism

The physical and economic interpretation of carrying capacity, and the associated concept of destination life-cycle, assume that the attractiveness of a destination depends on its attributes, and erosions in that stock due to excessive visitation – either affecting its physical integrity or its economic value – are likely to compromise the destination’s performance in the future. However, so far, only physical assets and the economic values that they generate, have been taken into consideration, rather than the process aspects of the heritage, or the conditions for the regeneration of the cultural capital.

In that context, it should be recognised that the stock of cultural attributes – of the tangible and intangible type – is anything but static. Culture – and the way in which it gets embodied in monuments and objects of art – is inherently a dynamic concept that is linked with power relations, struggles, social and economic change. Culture needs populations and diversity. There is a “cultural” aspect in urban development that cannot be overlooked. A social context produces a culture that is transmitted to the future. That’s why today we travel to places like Bruges or Venice: to admire a unique cultural landscape that was forged in ages by thriving –

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and once powerful – communities. Moving forwards along the wheel of history, we can say that societies that are fully aware of their heritage are most likely to conserve it for the future. In other words, they can develop organisational models that allow the valorisation and preservation of works of art.

We are now focusing more clearly on “cultural tourism” and “heritage tourism”, as we emphasise the nature of the resources that attract visitors in these sites. At the same time, we are clearly enlarging the scope of life-cycle considerations to the conditions for maintaining the qualities of places. This concept overlaps with physical integrity in a blurred way: earthquakes and wars leave visible scars on the monuments and art objects, as the cases of Assisi and Dubrovnik demonstrate, but they would not prevent tourists from going there, because the “cultural context” is still there, and guarantees the endurance of the city’s attractiveness for cultural tourism. Two elements assume crucial importance in that respect: the existence of a local society that acts as the herald and custodian of the heritage, affirming a cultural context; and the existence of a “business model” for financing its conservation. These are in all respects problematic issues.

Population dynamics and tourism cycles

To start with the population, this is often “given” in the models of destination life-cycle. However, authors like Butler (1980) and Getz (1992) recognise that tourism development affects also the social base of communities. From mere carrying-capacity considerations (the utility of the resident population competes with, and may be affected by, visitors’ flows), to more complex models of social change and confrontation between different groups, the population is affected by – and may affect – tourism performance in an area. Cultural tourists have spending and behavioural patterns that may differ greatly from those of the host community. At times this fosters local development, since confrontation with other uses and cultures increases the sense of belonging, the knowledge and the experience of the host community. The opposite may also occur, when cultural friction provokes the erosion of traditional features and disturbance of the local way of life. The negative effects of tourism may also provoke irritation and diffidence (Doxey 1975) among the local population, making them unwilling to open themselves to innovation and integration. A conservative attitude of the local community is a strong brake on development.

While these studies have flourished in reference to exotic destinations where social confrontation is radical (e.g. Holder 1991), it is more difficult to evaluate social change in contexts in which host and guest communities are more “similar”. The accent in these cases is rather on the “access to the resources” of the population groups, and it is epitomised by the “crowding-out” effect (Prud’homme 1986), when the tourism-oriented activities substitute the resident-oriented ones in the economic and social mix of functions available in the city.

More in general, such conflicts can be inscribed in models of population change like that in Martinotti (1993). Yet, few authors have analysed the full implications of social displacement of local communities by the tourism performance of destinations. The classical framework of Tiebout (1956) gives a glimpse of what may happen: when the utility of certain resident groups is affected: they just leave, in pursuit of the jobs, the low tax rates and the high quality of life that is less and less available in the centres flooded by tourism. It is not surprising then that in many tourist cities whose economy is strongly dependent on tourism, the population is declining: it is the case of Venice but also of Bruges, Salzburg, etc. In these situations,

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visitor/resident ratios increase exponentially; and urban sustainability, which also depends on social balance and access to resources, is under threat.

According to classic economic principles, this process should be self-regulating. There is a threshold in terms of local mass over which the city becomes less attractive for visitors (Glasson 1993); hence, in when that threshold is approached, presumably the industry would be pushed to restructure itself to maintain profit margins, and the process of social decline would be slowed down. However, this feedback is very slow to be set in motion. Van der Borg (1991) comments that by the time it starts to produce its effects, the local economy may already be seriously harmed, so that recovery is almost impossible. A sort of path dependence is also ensured by the lack of feedback at the production stage between assemblers and distributors of the tourist product. In fact, while the latter are local, atomised and partly unaware of belonging to the tourist industry, the former are structured, often non-local and sector-optimising (Van der Borg et al. 1998).

The cultural supply as a dynamic stock

What are the social bases for the (re)production of culture and the maintenance of tourist attractiveness through time? The cultural heritage that starts with creativity, which allows human expressions to take artistic forms. The process of cultural accumulation need not be consciously “artistic”: a cultural landscape, like a battlefield, an old factory, or a canal system, is the result of human activity, but nevertheless it shapes the territory, makes it attractive for visitors and symbolically valuable to the local community, or to the inheritors of the history that it embodies.

Culture, then, is “consumed” in a variety of ways. In some cases, cultural expressions are “reproduced” for an audience (it is the case of performing arts). In others, that are central to this study, it is “accessed” and provides utility to consumers – visitors who enter a museum, visit a church, or take a canal tour. The process of consumption may also imply some degree of consumption of the physical stock, when use levels are excessive. For instance, the breath of visitors in a museum, or their treading on a church’s tiled pavement, may spoil the integrity of the assets in the long run, and lead to an irreparable loss. In most cases, though, no perceptive physical damage is provoked by visiting– e.g. too many visitors on a battlefield hardly take away the symbolic meaning that is attached to it.

Two matters emerge in that context:

•= the type of demand that is directed to cultural assets is likely to interfere with the process of production, valorisation and consumption;

•= preservation is costly, and its financing depends on the commitment of communities to it.

As regards the first matter, tourism determines a strong focus on consumption: culture comes to be identified almost completely with the industry of cultural consumption. This “extrovert” nature of tourism (Bendixen 1997) is a different paradigm from the introvert character of cultural production in centuries, which has flourished and accumulated not to be consumed by tourists but as an expression of political power, religious belief and industrial crafts. The risk is high that in this new paradigm artistic creativity stagnates and perishes, replaced with a fast-food cultural model which leaves almost nothing to collective memory and identity.

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Culture as a process may become unsustainable when it gets disconnected from the societal and economic contexts that determine it (Throsby 1994). Cultural tourism therefore becomes mere attraction to the past and the preserved, an attitude that writers as Balzac and Nietzsche would equate with necrophilia, the love for the dead (Maleuvre 1999).

To fit in a sustainable system, cultural consumption cannot be severed from the process of artistic or creative expression, which in recent times has been organised and made economically significant (a necessary condition in capitalistic societies) in cultural industries. The social aspect and the cultural aspect are strictly related: if the local community is disrupted or chased away in the process of tourist valorisation of places, this results in an erosion of the cultural capital of places.

Since the capacity to preserve and further the heritage is also connected to the value attached to it by the local population, the process of erosion may soon diminish the attractiveness of places for tourist purposes. Hence, tourism development may prove culturally unsustainable. We can then devise a third interpretation of the concept of carrying capacity, the social carrying capacity as the threshold above which excessive use of cultural destinations erodes the social basis needed for the preservation and reproduction of the cultural assets that determine the destination’s attractiveness. Clearly, this is much more difficult to define in exact terms and to use as an instrument for tourist planning than physical or economic capacities, nevertheless we believe that this dimension should be kept central when elaborating models of tourist management.

As Graham et al. (1998) pointed out, the very process of identification and “appropriation” of the heritage may be a source of conflict. The contest for heritage according to these authors takes place on ethnic, geographical or social grounds, but we can easily re-phrase the cultural question at a regional scale: why should a community pay for the preservation of the heritage in another community (even if the former community is in the “tourist region” of the latter, and therefore, shares in the benefits generated by it)? It is clearly a puzzle that depends on the institutional context in which tourism is developed, and we leave it in the background to analyse it more thoroughly in spatial terms in the following chapters.

2.4.4 The validity of the life-cycle / carrying capacity approach for policy

The life-cycle theory is complementary to the multiplier analysis as it provides a “reduced form” of the dynamic relations that are implied in tourism development. It gives an idea of “what to expect” from a certain structure of the tourist economy and its relations with the local context, be it economic, environmental, or social. A certain score of the tourist economy today may imply that in the future things are going better (earlier stages of the life-cycle), or worse (latest stages of the life-cycle). The life-cycle also encompasses evolutionary considerations, because it subsumes that congestion, social irritation and environmental decline feed back on the mechanism, provoking a decrease in the attraction capacity of a locality when the tourist pressure becomes too high.

Despite its widespread influence in tourism studies, the destination cycle has attracted criticism, which is best encapsulated in Haywood (1986 1998). Part of the literature points to the “deterministic” nature of the model that does not leave any room for different outcomes in the development process (Prideaux 2000), or to the unclear consideration of demand-supply interaction (Haywood 1986). However, the most unattractive aspect of the destination cycle

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for many authors is its poor use as a tool for policy. The simple description of the life-cycle dynamics does not capture the economic nature of the linkages that make the cycle self-propelling. The diagram prescribes that policy should act proactively to smooth the fluctuations of the cycle and prevent the decline, but it is not clear how these objectives should be achieved, nor which variables should be the object of regulation at each stage. That point is held in particular consideration for the prosecution of this research. We adhere to the remark made by Haywood (1992:353): decision-makers need to know what strategic moves are appropriate in each specific situation, and the destination cycle has no immediate prescriptive implication unless it explicitly takes into consideration the characteristic of places and resources.

Heritage destinations, indeed, have peculiar characteristics that make the straightforward application of the life-cycle framework not as credible as in other contexts. Even as purely descriptive models, destination cycles have never been very popular with regard to urban tourism. One reason may be that the late development of this form of tourism (compared to other forms of recreational and “3S” travel) does not offer many examples of complete cycles to be observed and analysed. The literature focuses on applications regarding beach resorts and other “new” products (for instance Debbage 1990; Holder 1991; Knowles and Curtis 1999; Prideaux 2000). Little attention is given to urban tourism, and even less to heritage tourism (Garrod and Fyall 2000). As far as heritage tourism is concerned, the very meaning of “decline” is ambiguous. The cultural assets inherited from the past are irreproducible and highly specific to the local historical context and cultural and identity. Demand is therefore relatively inelastic and it is difficult to grasp how in practice a “decline” in tourism can occur. However, impacts from tourism on heritage cities are perceptible (Van den Borg and Gotti 1995). Cities like Venice and Bruges have tripled their visitor/resident ratios in the last few years. Residents and taxpayers, more than anybody else, know what it means to live in a world-famous tourist city. Conflicts and emergencies arising from excessive tourist pressure are reported on a daily basis, and constantly influence the political debate. The dangers of a possible stagnation and decline of tourism, of which everybody regularly sees the signs, are held high and demand ready action; which however, appears untimely, highly contentious, and ultimately ineffective. If decline has not set in on a large scale for heritage cities (at it has, for instance, in the case of seaside, health and mountain destinations), it may just be a matter of time. Mass cultural tourism is a relatively young industry, it is in full swing, and what happened 100 years ago in Brighton 20 years ago in Atlantic city, or in the last decade in Marbella, might happen tomorrow or in ten years’ time in Florence, York or Salzburg.

The concept of carrying capacity, which has the advantage of being instantly understood by public opinion (a threshold not to be exceeded), is criticised as being an instrument with little practical use. The criticism regards:

a) the concept itself. In its most meaningful definition, it is an apparent tautology, since it implies that the carrying capacity is that level of tourist pressure, which, if surpassed, causes damage to the capacity of the city to sustain tourist experience. This means that, if you observe a decline in the tourist experience (fuzzy as this concept may be) at a certain moment in time, you have violated the carrying capacity: hence the poor use of the concept as a tool for a priori policy formulation.

b) the way it has been operationalised. Often, there is confusion between a physical and a socio-economic threshold. Presumably, for the city as a whole, the latter is encountered

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before the former. However, for the single monument, asset or good, the concept of socio-economic carrying capacity has little meaning and we must revert to the physical sense of the term. Therefore, aggregating the physical capacity of a complex of monuments and sites may yield a total capacity which is inconsistent with that of the city as a whole.

Canestrelli and Costa (1991) offer a method for overcoming the problems in a). However, their calculation of the socio-economic carrying capacity depends crucially on the choice of the objective function. Though their method allows the consideration of opportunity costs, still it assumes that there is one sector whose performance must be maximised while the others act as “constraints”. In sum, , there are some unsatisfactory aspects to it:

•= no consideration of the synergies that can be activated from tourism; opportunity costs are only “negative”;

•= no consideration of quality: we know, for instance, how many lunches could be served in the optimum situation, but we don’t know whether as a result of the market structure, these lunches will be bad or good;

•= no consideration of time dynamics. Constraints have in fact a dynamic structure, especially if they regard non-reproducible resources. If violations occur in one period, in the next period the violated sub-system might deliver lower levels of utility 16.

It should be added that no author actually defines the exact link between carrying- capacity violations and life-cycle. Is carrying capacity the point beyond which, if repeatedly violated, the visitors’ flows start to decline? Or rather is it for tourist receipts to perform a cyclic path, affecting the performance of the urban economy? That is completely unclear, and contradicted by empirical observation. In cities as Bruges or Venice, visitors’ flows – both in the resident tourists’ segment and in the excursionists’ segment – are still increasing, even at increasing rates, but carrying capacity – at least the socio-economic one according to the approach of Canestrelli and Costa – is violated for many of a year’s days. Martin and Uysal (1990) suggest that each stage in the life-cycle will reveal different capacity thresholds, and requires distinct policy responses. Getz (1992: 754) offers indeed some general rule for policy, but its finding from the case study of Niagara Falls (p. 768) seems to confirm that each place is specific and that “rejuvenation” as an antidote to decline should be seen more as a “state of mind” of tourist planners than as a specific recipe for development. Hence, we are not in the position of giving clear indications for a long-term strategic policy to tourist planners, based on the notion of carrying capacity alone.

Finally, carrying capacity is a variable concept in that it might be managed. To respect the thresholds, one might regulate demand or just act to expand capacity (Deprest 1997). The extra degree of freedom hides an ambiguity: is tourism development an end in itself? Once we

16 For instance, if more than the prescribed number of visitors prescribed are let in St. Mark’ Cathedral in period t0 – one of the constraints in the example of Canestrelli and Costa – we can expect that in t1 the very structure of the constraint will change. Since Canestrelli and Costa utilise St. Mark only as a “representative constraint” for the whole heritage sector, but in fact the exercise should take into consideration other attractions and events that occasionally experience congestion, the same story holds for additional constraints of the same type.

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manage to expand capacity, we obtain a schedule of capacities/optima; the exact choice of the policy target becomes a political decision. Could these difficulties be taken care of by a refinement of the calculation of the carrying capacity for the heritage city, then the effort would probably be prohibitive and the simplicity of the original formulation would be lost. This is not to say that we should do without carrying capacity as a policy tool, but rather that we must be aware of its limitations. In particular, that the dynamic link with the destination life-cycle has to be made clearer. If the basic idea of sustainable tourism is that development has to be harmoniously connected with other urban functions, clearly destination cycles and carrying capacities are only a part of the picture.

In addition, one vital matter has been completely left out of the destination-cycles literature: the fact that unsustainable tourism development may come not only from an abuse of the heritage, but also from its insufficient use. The ESPON project of the European Commission has in fact proceeded to map the European space By a number of indicators, to analyse the “sustainable use” of the heritage. The study explicitly considers situations in which, in face of a large number of historical assets in a region, the tourist flows have lower-than-average impact on the local economy (van der Borg, Russo et al. 2000). The heritage, to be preserved and expected to contribute to the development of a local society and its economy, has to be inserted in a successful model of economic valorisation (Van der Borg, Russo et al. 2000). In turn, that depends crucially on conditions that are not to be found in the tourist sector alone, such as the entrepreneurial attitude of the local population, the structure of governance, the general urban development strategy. The rationale is that when the cultural richness of the region does not generate sufficient tourist business, the resources for the preservation of the heritage are less likely to be found. This approach underscores that even though physical impact remain a focus of the management of sustainable tourism, there should be more attention to the question how to link closer heritage preservation to an integrated and balanced tourism development. As Gartner (2002) puts it,

«… Whether one believes in product life-cycle to explain the rise and fall of consumer acceptance, or not, it is clear that demand for culturally-based tourism products, which is reported to have increased substantially in recent times, is still lower than the supply of products. In this situation, other factors such as service, value added, niche marketing take on greater importance.»

2.5 From visitor management to integral urban policies in heritage cities

The destination life-cycle literature suggests that tourist policy should operate proactively to smooth the fluctuations of the cycle and prevent or delay decline, for instance investing in hospitality at the starting phases, preparing solutions for traffic congestion before it becomes manifest, or differentiating the product mix at the maturity stages. On the assumption that there is indeed a tendency for tourism in heritage cities to follow this life-cycle path (proving which is indeed one of the objectives of this dissertation), several associated matters remain to be discussed: when exactly does tourism policy have to operate, and with what instruments; what variables / factors have to be regulated; how do tourism cycles affect the rest of the urban policy?

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However, the literature on tourist policy does not provide a framework to deal with such matters with sufficient generality. Tourism studies are characterised by a proliferation of case studies, in which specific prescriptions may be given, and the angle is most of the time that of “too much tourism”. The most interesting indications regarding tourist policy are in terms of process: how to organise the decision-making process and what actors to involve (Sautter and Leisen 1999; Boniface 2001; Maitland 2002). With some exceptions17 they end by suggesting that the decisions concerning tourism and the heritage should come from an ample consultation of the community and all relevant actors, under the leadership of the local government, in close co-operation with different local administrations. As to the object of policy changes, it is seldom defined in exact terms or translated into a clear programme.

One clear problem in that context is that hardly any studies of tourism cross the conventional boundaries that separate them from general urban policy and management. In that field, methodologies for policy design and implementation are much more advanced, and the dialogue between academy and planners is more intense, as witness many reports of the European Commission. Tourism is clearly an urban issue, and as such, it should be addressed as a fundamental component of regeneration or development policy, while in fact the tendency is to separate it from the rest of the urban agenda and deal with it in a compartimentalised way.

A critical analysis of the literature suggests that general theories of urban development, and policy frameworks based on such theories, may give clearer indications for tourist policy than the study of tourism alone. In the latter, sophisticated as they may be, the multiple, complex and dynamic connections that exist between tourism and the rest of the urban economy are not given sufficient relevance. On the other hand, given the transversal, complex nature of tourism, and the strength of the sector in terms of growth and impact, urban policy can greatly profit from an explicit incorporation of tourism analysis. In other words, universal, durable solutions to the “crisis” that is affecting many tourist cities of culture in Europe demand a move from visitor management to integral urban policies. In that light, we now present one noteworthy stream of analytic and empirical research, which could be usefully integrated in studies of sustainable tourism.

2.5.1 Urban life cycles, actors and policies

Cities can be described as dynamic systems, which flourish, stagnate and decline according to the evolving behaviour of the main actors in the urban arena: households, firms, and the government.

Van den Berg et al. (1982) and Van den Berg (1987) describe thoroughly the patterns of interaction between these groups. The dynamism of the system is provided by the influence of technological progress and socio-economic factors such as demographic changes and education, and by the chain of actions and reactions that urban actors provoke with their behaviour. Each of these groups maximise a welfare function that depends on an attraction 17 Knowles and Curtis (1999) are among the most recent. Sinclair and Stabler (1997: 151-152) give many examples in which “new growth” economic theory have led to political decisions at the national levels that are indirectly affecting the tourism industry.

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potential. This is defined in spatial terms (accessibility to services, goods and jobs, product markets, environmental quality and housing) and also accounts for the levels of aspiration expressed by each group. Through (re)location decisions, households and firms continuously affect the steady state of the system; the governments adapt to these changes, or fosters them in the desired direction. For instance they can influence the location choices through housing and environmental policies, or acting on transport costs and hence accessibility, bringing forth changes in the modal-split and commuting decisions. Firms are also responding to evolutions in the market potentials and in exogenous factors like technological progress; on the other hand, by investing in an urban region, they create jobs and taxable income and hence influence in their turn the behaviour of households and government.

s tages of urbanisa t ion1 2 3 4 5 6 7 8

Units

of p

opul

atio

n

FUR

CORE

RING

Fig. 2.8 – Population size of the core, ring, and functional urban region (FUR) in different stages of urban development. (Source: Van den Berg et al. 1982) 18

The spatial dynamics of urban systems is largely determined by the development of welfare and location potentials. Van den Berg et al. (1982) elaborate a theory of life-cycle of urban development based on the interactions between actors and the evolution in the potentials, which has been confirmed by empirical observations of the growth rates of (and within) the largest European metropolitan areas. According to this analytic framework, modern 18 This diagram of the urban life-cycle in Fig. 2.8 identifies four stages and eight sub-stages of urbanisation. In each stage, the population growth in the core and in the ring is alternatively positive or negative. It should be noted that in the first part of the “reurbanisation stage” (7th sub-stage), both the core and the ring are losing population in absolute terms, but the (negative) rate of growth of the core is lower than in the ring, marking a “relative centralisation” with in the urban region. In this stage, the jobs in the ring might grow in absolute number. In the 8th sub-stage, the core starts to gain population in absolute terms, pushing the urban region towards an “absolute centralisation”. The functional urban region (FUR) is defined by Van den Berg et al. (1982) as the region that generates 90% of the jobs in the area.

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urbanisation was triggered by the location choices of firms that aimed at proximity to resources and goods markets. As a result, households that were simply “followers” in the job market were attracted into cities. That explains the rise of the great conurbations in the industrialising Europe of the 19th century, like the British and Belgian mining and steel cities, the German manufacturing centres and the Dutch and Scandinavian ports.

Factors such as generalised rise in the welfare, the evolving lifestyles and the greater appreciation for quality of life, and the availability of public and private transport at lower cost, led to a stage of sub-urbanisation. Households relocated to the urban periphery and the soft rings of cities increased in mass, as happened almost everywhere in post-war Western Europe. Proximity to the jobs was no longer an aspiration if fast commuting was available. Firms themselves would choose to relocate to peripheral locations where land was cheaper. This led to a rise in the competitive position of peripheral centres with respect to the central city. Faced with increasing traffic congestion, households would look for jobs at increasing distances from the city centre. At this stage, jobs followed workers; firms could pay lower salaries if they relocated to peripheral centres. Non-radial transit was provided, allowing greater mobility within the urban region, and that led to a proliferation of urban centres. De-urbanisation – marking the loss of relevance of central cities in terms of jobs and population – affected urban Europe in the 1960s and the 1970s, in the spread pattern typical of the North-American urban landscape, where central cities are often concentrations of problems, as cheap housing attracts marginal groups, migrants, and unemployed. This in turn led to the degradation of the central housing stock, where old buildings were left to decay. Severe crises struck city centres, most notably in Anglo-Saxon countries, where the legacy of industrialisation was more important and households kept their preference for suburban life. In this period, commentators would talk about the oncoming “death of cities”, as if the very reasons for the survival of metropolises as a form of organisation of human life had definitively disappeared. However, several factors are allowing central cities to become relevant again in the contemporary global economy. The first is the necessity for firms in the service sector to enjoy the intangible benefits of proximity. Service-sector companies are low space users and they settle in relatively cheap central business districts. The increase in importance of single-person households and “transient citizens” like students and professionals also leads to the re-population and regeneration of old urban centres. The greater attention paid to leisure and cultural recreation in the emerging knowledge society reinforces the spectacularisation of the urban landscape, with the organisation of high-quality meeting places and “quartiers latins” in city centres. All this raises the attractiveness of the cities for other urban actors as well, such as the international business elite and the international visitors, who appreciate the liveliness and diversity of the urban environment. Increased international mobility and greater appreciation and awareness of the heritage makes visitors interested in urban centres, where works of art and monuments are concentrated. Re-urbanisation is happening in European centres that have successfully completed the transition to a service economy. Cities with global status like London, Paris, Milan and Amsterdam were at the forefront of this “renaissance” of urban centres versus unattractive and dull peripheries. Other cities that are still strongly dependent on manufacturing industry are less advanced on this path. That is the case of many British centres as well as port cities like Rotterdam and Antwerp and the capital cities in the ex-Eastern Bloc. The trends described are confirmed by recent empirical work

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(cf. the contributions of Cheshire and Mackensen in Summers et al. 1999; Martinotti 1997: 40-ff.).

Authors like Thompson (1995: 11-21) warn against the danger of an excessive service specialisation in global city centres, pushed by the global market economy, where instead a diversified economic base with an industrial base had better be maintained. Such a development is seen by Van den Berg (1999:556) as a desirable outcome of the urbanisation process, to the extent that it leads to a better balance of functions and social groups on the metropolitan level. The so-called model of a harmonious city is then achieved (Klaassen 1989), where commuting flows are minimised and mixed functions guarantee social cohesion and economic viability in every part of the urban fabric, which is a condition for sustainable urban development. The revitalisation of city centres and their spatial de-concentration can go hand in hand at the last stage of urbanisation.

2.5.2 The role of governments: from pro-cyclical to anti-cyclical policy

The role of governments at each stage of the urbanisation cycle is crucial and is an integral part of the model itself. Even the absence or untimeliness of intervention is consistent with the urban development model. In this case, policy is “pro-cyclical”, leading to a sharper development cycle. A good example is provided by the proliferation of “dormitory suburbs” at the city fringes in the 1950s, which ultimately led to the “escape” of many families from cities as soon as conditions allowed. The same mistake was made with the idea of moving universities into campuses located at great distances from the city centres (notably in France). It was a consequence of the social and political tension created by the movements of 1968 (cf. Dubet and Sembel 1994), which took a great proportion of city users – often a crucial source of vitality and dynamism for the local society – out of the city centres. The government choices are to a certain extent endogenously dependent on the consequences of their past actions, owing to the mechanism of democratic representations. That is to say, if one peculiar social group is expelled from the city administrations, the voters will represent a social block with different characteristics. This can act as a counterbalancing mechanism, but can also lead to a vicious reinforcement of the existing trend, through increased social polarisation19. This further element of dynamism is particularly relevant in the case of tourism, as will be argued later.

Clearly, governments also have a decisive role in favouring the re-urbanisation of European cities. The future of the urban areas according to Van den Berg et al. (1987) depends significantly on their ability to anticipate and accommodate the changes inherent in the transition to the knowledge society and European integration. These include:

•= the growing importance of the quality of living,

•= the fast-intensifying spatial interaction among European cities with respect to goods, people, information;

19 According to Martinotti (1997: 56), classes formed in the industrial urbanism that were bound to the city through municipal welfare system as an "institutional compromise”, broke this “pact” evading to suburban residential areas, provoking the fiscal crises that hit European cities in the 60s and the 70s. This promises to get worse in second generation metropoles, whose users are further unbound from the municipal fiscal policies and from political accountability, calling for a completely new urban fiscal structure.

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•= the increasing economic competition among European cities and regions;

•= the diminishing influence of national governments.

These authors have elaborated a comprehensive framework for urban policy (pp. 106-ff.), identifying the instruments that the different actors may utilise to promote their objectives. In particular, the governments – through spatial and marketing policies – can boost the factors that make cities, and especially inner cities, competitive and attractive places for firms and households. In that context, instead of competition at the metropolitan level between centre and peripheral FURs, the government can favour co-operation and integration in functions. Urban areas may then evolve as polycentric metropolitan regions with a concentration of information-intensive activity in the city centre.

In the knowledge society, the traditional urban hierarchies based on central-place theory are challenged. This organisation was firmly based on the transport and markets of physical goods, and on demographic concentration. Moreover, the very idea of local hierarchies was associated with the notion of nation states and closed, national markets (Ohmae 1995). Today, most production and consumption flows are virtual, people travel and commute very easily, preferences and goods are utterly heterogeneous. Needless to say, trade occurs at a global scale and nation states have become less relevant. Networks, rather than hierarchies, emerge as an eminent form of organisation of the society and of the economy. Cities become relevant to the extent that they occupy an important position in the networks of economic exchange, and this in turn demands communication capacity, interaction, trust even in an increasingly competitive environment.

By adopting a policy of urban revitalisation, local governments may upgrade their city's attractiveness for the “market partners”, that is for inhabitants, business companies, visitors and investors, and become new winners in the restructuring of the European geography of power. It is important that cities don't just follow the trend, but are able to anticipate it so as to maintain their advantages as external conditions change. They can do so by giving priority to environmental quality, providing the facilities and amenities that may attract business and households to the inner cities, improving the accessibility of inner cities, giving more attention to inter-city connections, meeting the increasing need for collaboration with the private sector in restricted policy areas. The urban life-cycle framework suggests that development efforts have to be re-directed towards stimulating those activities for which they offer a competitive location environment. The attraction of financial, economic and human resources becomes a stringent condition for local development. City marketing, described by Kotler (1993) as the fine-tuning of demand and supply at the city level, is a fundamental element to cope with these new demands, for one thing since it allows the cities to become more customer-oriented, ready to «give service to, and mind the interests of, the town's citizens» (Van den Berg and Braun 1999).

2.5.3 Tourism development and urban policy

The conventional framework of the urban life-cycle is limited to the interrelations between firms, households, and government. However, the picture could be enlarged to consider other categories of city users, such as tourists, business travellers or migrants, who utilise the city's resources and evaluate the urban amenities in a different way from the resident population.

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Indeed, Martinotti (1993, 1997) has developed his theory of “four populations” looking at the transformations caused by the overlapping use of the city by population groups with different characteristics. Tourists have peculiar features that are likely to bring about urban change in the framework of Van den Berg et al. (1982) and Van den Berg (1987).

Given the relatively recent emergence of tourism as a mass practice, it makes little sense to analyse it as a factor at the earlier stages of urbanisation. Tourism development may play a role as an agent of decentralisation, and possibly as a factor of revitalisation of urban centres. It has already been mentioned that by processes of crowding-out, tourism may chase residents and consumer services out of the city centres. The refurbishment of central premises for new uses is unprofitable, compared to the tourist use that can be made of the same buildings. The high maintenance costs will ultimately push advanced service jobs out of the city centre, favouring the disurbanisation of the local economy. Though heritage cities may not possess a sufficient mass to be high in the urban hierarchy in the first place, cities like Venice or Bruges are to all intents and purposes global cities, because the “demand basin” for them – especially in relation with their cultural and tourist amenities – is the whole world. But their status of “cities” is at stake. They have lost out population to their rings. Increasingly, they are challenged by other centres in the region (e.g. Padua and Gand in our example) as locations for such high-rank functions as administrative offices, financial services, education, and press. Governments can counterbalance that tendency through appropriate actions. However, a difficulty is that many of the instruments on hand to make inner cities more attractive in the framework of Van den Berg (1987) (for instance, improving accessibility and investing in urban amenities) may ultimately increase their attractiveness to visitors as well, with undesirable consequences. In that case, other instruments have to be utilised, such as incentives to housing, and especially industrial location policies that attack the tourist mono-culture, giving to “weaker” sectors the opportunity to take off.

The next step for urban management is to build on the potential from tourism to achieve a sustainable and competitive structure of the economy. Heritage cities have status, cultural capital, and often good international accessibility, but for tourism to become a real lever for a dynamic, value-generating economy, its organisation must be restructured and its potential liberated. Culture is an important element in the knowledge society, and indeed Van den Berg, Van den Borg and Van der Meer (1995) analyse how the leisure function of cities may enhance the soft elements that are the critical pre-condition for regeneration and inter-regional competitiveness. However, in heritage cities, these same functions are metabolised in a mass tourist market that is hardly compatible with the generation of development opportunities. Instead, the relation should be turned upside down. Culture should enrich the city, and a sustainable tourism is a formidable medium for value generation. Needless to say, rather than competition between sectors, it is synergies that should be looked for.

Tourism can be both an “illness” and a “medicine” for European heritage cities. Proactive cities may utilise explicit tourism strategies – regarding specific components of the tourist mix, like culture and hospitality – to revitalise the city centres.

2.5.4 Governance and organising capacity in tourist cities

Governmental action, however, faces a number of challenges. The matter of policy changes in open systems, characterised by a multitude of stakeholders, has been treated by various

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authors (Nelson 1989; Kooiman 1993; Crosby 1996). The inertia of organisations may explain the incapacity of policymakers to foster change. Moreover, with their passive resistance, or by explicit opposition, non-formal actors who nevertheless detain effective power on the regulated subjects (Stokman et al. 1999) can prevent governments from achieving their objectives. Therefore, in situations characterised by a multitude of actors with diverging objectives, top-down planning is doomed to failure at the implementation stage.

The consequences of ineffective governance in a complex decisional context have been described with particular strength by authors such as Grant (1994), Van den Berg et al. (1997) and Flyvbjerg (1998). The last author analyses the ways in which a plurality of stakeholders may influence development to their advantage. Van den Berg et al. (1997) recommend the creation of strategic networks at intra-city and inter-city levels, and embrace the notion of governance as the guiding organisation principle. Rather than executors of public policy, governments should be facilitators in a development process that involves other actors20.

performance

public private sector sector

vision and strategy

- leadership- political support- societal support- spatial-economic conditions

strategic networks

Fig. 2.9 – Theoretical framework of organising capacity. Source: Van den Berg, Braun, Van der Meer 1997.

The success depends crucially on the “organising capacity” of the urban government. Van den Berg et al. (1997) define as «organising capacity» the ability to enlist all actors involved, and with their help generate new ideas and develop and implement a policy designed to respond

20 In this approach, networks are conceptualised as pluri-centric forms of governance in contrast to multi-centric (market) and hierarchical forms (state) (Van Kersbergen and van Waarden 2001: 18).

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to fundamental changes and create conditions for sustainable development (Fig. 2.9). This conceptual scheme refers to the ability of the governments to “adapt” their governance styles to a society which is ever more complex, diverse and dynamic (Kooiman 1993), and to foster policy changes in the desired direction to achieve general public goals. That is done mainly by formulating a vision of the city which is acceptable to any of the actors involved, translating it into a strategy when favourable spatial-economic conditions are present, ensuring to it a broad political and social support, and implementing it. For this process to be effective and durable, some of these actors – not necessarily within the public sector – are required to obtain acknowledged and trusted leadership.

The formation of public-private partnerships in relation to development projects constitutes the bulk of this approach, as it represents a way to articulate different attitudes and possibly conflicting interests around common objectives. In this way, responsibilities are shared and the financial means for costly investments can be raised, maintaining some extent of public control and accountability on market-driven development (Bramezza and Van Klink 1994). This approach to urban regeneration has been very popular throughout Europe, even though the forms of such partnerships and the degree of success in achieving the original objectives vary enormously (Bianchini et al. 1992; Bailey 1994; Bassett 1996) 21.

Against this background, to take into account the decisional complexity of the tourist city is vital. Tourism development mobilises different – and often conflicting – interests, which need to be composed in a vision shared and accepted by all the influential stakeholders. The economic strength of the categories involved in tourism development is such that any effort at regulating tourism without their co-operation is hopeless (Boniface 2001). Such complexity casts a spell on the straightforward application of visitor management tools. For instance, the destination-cycle model foresees that decline should follow a stage of stagnation, and it prescribes anticipatory action to prevent decline, “rejuvenating the product” when the first signs of stagnation are visible. However, many of the heritage destinations “under stress” are still strongly growing in quantitative terms, though such indicators as the visitor-resident ratios may be alarming. In that context, to organise momentum for a policy change, and to act in conflict with stakeholders of consolidated interests, is politically hard. Instead, a heterogeneous tourist sector, at the maturity stage of the life-cycle (when tourism profits are at their peak) are are likely to put in place hit-and-run strategies aiming at attracting more and more tourists, reinforcing pro-cyclically the unsustainable tendencies and leading cities’ destinations towards decline.

Today, the more sophisticated businesses are ready to recognise that quality of life and social balance are important factors for their own success (Mattoon 1995; Van den Berg, Braun and Otgaar 2000), while some environmentalists agree that a thriving economy offers resources to protect and restore the environment, heritage included. However, in some cases neither business nor environmental interests are unanimous or comfortable with such views and are

21 The literature on «growth machine» (originated by Logan and Molotch 1987) suggests that growth objectives are inherently conflicting with social goals, because it is the result of a coalition of interests that maximises the profitability of private development projects. . «(…) always ready to oppose cultural and political development contrary to their interests (for example, black nationalism and communal cults), rentiers and their associates encourage activities that will connect feelings of community (…) to the goal of local growth» (Logan and Molotch 1987, p. 61). See also Eisinger (2000) in relation to urban tourism. Van den Berg, van der Borg and Russo (2002) are critical towards the possibility to apply this argument to urban tourism policies in Europe.

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not ready to take joint action to achieve these objectives (Innes and Booher 1999). Innes and Booher (1999: 142) suggest that thinking of urban development in terms of complex systems may dissolve that apparent paradox, offering a workable approach to planners in formulating policy objectives. That is particularly true of heritage sites, where lack of commitment to the public sphere derives among other things from scarce awareness and from the pre-industrial nature of many tourist businesses (Van der Borg et al. 1998), and where cultural stakeholders are fundamentally adverse to the “economic use” of the heritage (Garrod and Fyall 2000). It is not by chance, then, that “the big shots” in the industry (like Shell22, McDonalds23 and international hotel chains – cf. Go and Grover 2000) are more willing to embrace environment-friendly strategies than the small operators. However, tourism governance requires a more integral capacity to bring all local and non-local actors together in the achievement of sustainability. We will take up this challenge in the next chapters.

2.6 Open issues and continuation of the research

At this stage, the scope of the problem of tourism development in heritage sites should have become clearer. We can therefore articulate the research questions in a more detailed investigation agenda. The existing literature gives a number of useful indications, but does not provide a clear framework of analysis and an easy-to-use policy scheme for sustainable tourism in heritage cities. Therefore, further elaboration and empirical evidence are needed.

A very wide range of themes has been presented in this chapter. Let us recapitulate the main lessons learnt from the literature, which will serve us as points of departure for the continuation of the research.

2.6.1 Sustainable development of tourism in heritage cities: a synthesis

A. Sustainable development requires the achievement of basic conditions that ensure the durability of the physical, economic and socio-cultural systems in which it is inserted. Cities are critical places for the achievement of these objectives, given their complexity and diversity.

B. Tourism, as any other economic sector, affects urban development as far as it uses natural and capital stocks, generates and exchanges values, and interferes with the organisation of the society and its cultural texture. Indeed, it is a highly unstable system, exposed to shocks and evolution in fashions, lifestyles, organisation.

C. The very nature of the tourist market guarantees that unsustainable processes take place. Tourism is transversal to many other urban industries, and its demand overlaps with locally generated demand, producing a new valorisation dynamic in the city that comes to alter its socio-economic texture, as it affects different groups to different degrees. The supply side is

22 The website of shell, www.shell.com, section: “our strategy”, reports: «… Profits are also a vital part of our ability to contribute to society and meet the economic, environmental and social requirements of sustainable development.» 23 According to Fortune (http://www.fortune.com/lists/mostadmired), this corporation ranks first in the Food Service industry for “social responsibility”.

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heterogeneous and barely industrialised, making co-ordination and self-regulation of development processes difficult.

D. The tourist system is also organised along spatial lines. There are at least three spatial levels that need to be taken into consideration in the analysis of tourism development. The first is the “urban centre”, intended as the location of the assets that attract visitors – in our study, the cultural heritage. The second is the “no-place” character of the global tourist industry, increasingly disconnected from the destination regions. Finally, “tourist regions” are the spaces in which the tourist industry centred on a destination can organise itself. The tourist destination is a “global-local nexus” (Chang et al. 1996), a place where local resources of a fragile nature are subjected to global forces and tensions.

E. Stakeholders of tourism development are to be found at each of these three levels, both in the public and in the private sectors. They can influence the development of the locality, through deliberate actions and strategies, for instance investments, price-setting, or location decisions. Visitors, too, may affect the performance and integrity of places by deciding the patterns of their visit.

F. The sustainable development of the heritage city demands that primary assets are preserved; that this contributes to the long-term competitiveness of the city's economy; and that the mechanism of cultural and social reproduction that keeps the city lively and attractive is maintained through time. The destination cycle signals that the second condition may not be assured. The concepts of physical and social carrying capacities stress that there are limits also to the other two conditions.

G. Thus, we need a policy framework that ensures sustainability to the development of tourism, at all the relevant levels. Such a framework, however, is missing. Destination-cycle theory offers some useful prescriptions, but its use and significance are doubtful in the case of heritage cities.

H. More insight is offered by the urban life-cycle development theory. Tourism development can be seen as an integral element of that framework for analysis. Anti-cyclical policy should prevent tourism from leading to urban decline. Instead it should bring forth the conditions that make tourism become a durable contribution to the city's revitalisation.

I. In doing this, the decisional complexity of the tourist city has to be taken into consideration. This demands a governance approach that facilitates the emergence of strategic networks of decision-makers, and the formation of partnership between stakeholders with apparently diverging interests in the realisation of the policy programmes.

2.6.2 Matters open to investigation

The existing literature about the analysis of the dynamic relations in tourism does not display sufficient understanding of the development process of heritage cities to formulate adequate policy prescriptions. Thus further investigation into the matter is needed. On one hand, the works on destinations (like, for instance, Jansen-Verbeke 1986 and Dietvorst 1995) accurately describe the relations between the local resources (as organised and sold by local operators) and the way (and the times, as in Dietvorst) in which they are used and consumed by visitors. However, they neglect the fact that changes in the spatial organisation of resources can have an impact on the modes of their use, and hence on the sustainability of tourism. On the other

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hand, works on the global industry (e.g. Ioannides and Debbage 1998) reflect a concern for the local impact of the international conglomerates’ strategy and are dynamic in nature, but they leave little space for local policy, as they hardly consider the strategic behaviour of local operators or visitors. More in general, the physical, economic and socio-cultural spheres are analysed separately, leading to different policy prescriptions according to the disciplinary approach.

Instead, there are relevant interrelations that we wish to investigate. A holistic approach to tourism policy has to take this complexity into consideration, and utilise it in order to explain the observed trends through the elaboration of conceptual models. Some of the arguments put forward in the literature to motivate the likeliness of a life-cycle in a destination’s the tourist performance are reasonable, and fit well the specific configuration of tourist systems centred on heritage cities. The spatial interpretation of life-cycles (Miossec 1976, Debbage 1990, Van der Borg 1991), which stresses the inherent changes in the mobility patterns and focuses on tourist regions, is particularly interesting. In fact, the attitudes of different visitors towards the destination are affected by their spatial behaviour, if nothing else, because they affect their budget allocation and time organisation. The importance of strategic behaviour on the supply side is stressed by authors such as Haywood (1986 1998), Ioannides (1992), Ioannides and Debbage (1998), who however merely focus on corporate plans. Their approach may explain the development of exotic destinations, but is dubious in the case of heritage cities in Western Europe. The strategic behaviour of local operators is clearly more relevant in the case of mature heritage cities. The systemic relations and interplay between spatial aspects and market structures have hardly been explored, nor explicitly put at the centre stage in the explanation of the decline in the cycle. We will instead focus on the endogenous nature of the space-market link, which promises a wealth of implications in terms of strategic planning and policy action.

The concept of “periphery”, as in the cited work of Miossec, is particularly appropriate to describe the spatial relations that underlie the development model of heritage cities. It will therefore be elaborated to connect more systematically the analysis of tourism development with strategic planning. We stress in fact that the concept of strategy in the context of heritage cities is closely linked to the regional or metropolitan scale. In the region, both demand and supply have a certain freedom to re-organise their behaviour, escaping the constraints posed by the “local” dimension.

Analytic tools are needed to understand how the strategic decisions of the players in the tourist market may lead to a “regionalisation” of tourism around the heritage city; and how this affects the long-term competitiveness of the destination area.

To that end, the following questions must be addressed: �� What is the relevant level of observation for tourism development in heritage cities (e.g.,

how is the “relevant region” defined)?

�� What is the relevant capacity threshold for unsustainable heritage tourism?

�� How do violations of the capacity lead to dynamic changes in the behaviour of players in the location / market strategies?

�� How do such strategic decisions affect the long-term tourism competitiveness of the destinations?

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�� Can these results be generalised? Do these findings enrich the existing literature on tourism development?

In Chapter Three, we will propose a model of tourism development that enables us to answer these questions. Once we have the analytic framework available, we can build a policy theory, or a decision support system for tourism management. This equipment, to be presented in Chapter Four, is based on the recognition that tourism development needs to be managed in accordance with a plurality of actors at different spatial scales. It is peculiar that few tourism scholars have looked for the elements that guarantee effectiveness in policy action related with tourism development. In fact, we feel that contention in tourism development is a field of analysis that promises to shed sensible light on subjects of public governance.

Both the analytic apparatus and the policy theory will be illustrated utilising a real-word case study of international fame, the City of Venice. It will then be possible to analyse whether the assumptions of the model hold and the main findings are confirmed by reality. Moreover, in the light of the policy theory presented, it will be possible to evaluate the shortcomings of the “traditional” approach to policy and propose corrective actions or thorough policy restructuring.

33333333 MMooddeelllliinngg ttoouurriissmm ddeevveellooppmmeenntt iinn tthhee hheerriittaaggee cciittyy.. TThhee ““vviicciioouuss cciirrccllee”” ooff ttoouurriissmm ddeevveellooppmmeenntt

In this chapter, we will propose a theoretical model of tourism development in heritage cities, which addresses the relation between spatial development and changes in the tourist market. Section 3.1 sets the research objective and section 3.2 introduces an original conceptualisation of tourism development in heritage cities, the vicious circle model. Section 3.3 proposes an analytic development of that model, and section 3.4 discusses its implications for sustainability. Section 3.5 concludes.

3.1 Introduction

In our exposition of the literature on the sustainability of tourism development, a spatial-economic dimension has been identified. Our investigation will take this concept as a point of departure. According to authors like Miossec (1976) and Van der Borg (1991), tourism is perhaps not a sustainable option for development because its effect on the spatial organisation of the interested regions is such that it creates more costs than benefits. Other urban functions – which an urban system provides to its residents and users – are made more expensive, and ultimately displaced, when confronted with the competition of tourism (Van der Borg 1991, Canestrelli and Costa 1991). In the long run, such changes in the urban system are likely to lead to a decline of tourism, as foreseen by the general model of the destination cycle.

The standard theory prescribes that administrations should act pro-actively, anticipating and smoothing the fluctuations of the cycle. However, as argued in section 2.4, the literature on destination cycles does not provide a sound economic explanation for the self-feeding nature of the cycle and the emergence of decline. Therefore, the indications on how to prevent such decline and increase the long-term viability of the tourist system are poor: the development process in every peculiar context is seen as depending on a number of specific factor, and no general policy rule is easily identified (Prideaux 2000). To become an operational tool, the destination-cycle model needs to be made fit to represent the peculiar context of heritage destinations (Hunter 1997). Indeed, the framework of the destination cycle has seldom been applied to historical cities, which display peculiar relations between the spatial organisation of tourism, the quality of tourist products, and the general dynamics of the regional economy.

The purpose of this chapter is to overcome such weaknesses and fill the gaps. The intention is to explain why a “decline” can be expected from unbridled tourism development in heritage cities. To that aim, a sound analytic description of the mechanism that leads from excessive tourism to unsustainable urban development is needed.

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3.2 The vicious circle: a model of the spatial development of tourism in heritage cities and their regions 24

Tourists are attracted to heritage cities because they hope to enjoy a “tourist experience”, which materially takes place through the aggregate consumption of a set of goods and services, among which the cultural assets. Such assets are virtually irreproducible and remarkably concentrated in historical centres. The quality of the experience is spoiled not only by the physical stress imposed by tourism, but also by the declining quality of the environment in which the act of consumption takes place, and that of the auxiliary facilities.

Our argument is that these peculiar cities, with an institutional context whose administrative boundaries seldom coincide with their economic or functional ones (Bauer 1997), have a life-cycle development distinctly of their own. Of course, this argument may well be extended to other destinations of cultural tourism, such as historical neighbourhoods in large metropolitan regions or isolated monuments and sites. However, it is in middle-sized European heritage cities that the full development of the cycle follows the most significant tracts. Ashworth and Tunbridge (1990:77) point out that such cities are not sufficiently large to spread tourism across a large resource base, and not so small that tourism is self-contained in a “museified city” structure. As a consequence, its growth does represent a threat to other urban functions. Therefore the focus analysis is restricted to such medium-size European cities.

3.2.1 Context and Definitions

Following with this argument, before presenting a model of tourism development, two concepts treated in rather general terms in the literature need to be exactly defined, namely, the “heritage city” and its “functional tourist region” (FTR), terms that will be utilised throughout the rest of the study.

The heritage city

The heritage city is the main character of this study, but so far has only been referred to in general terms. In principle, the definition of tourist-historical city of Ashworth and Tunbridge (1990) is appropriate: the heritage city could be conceived of as the functional space emerged as a result of the superimposition of two distinct but interdependent patterns of urban development, the “historical city” and the “tourist city”. However, Ashworth and Tunbridge’s approach tends to focus on a particular portion of the city space, analysing its evolution independently from the rest of the regional structure and allowing only for a certain dependency of the development process on “initial conditions”. Our approach instead is focused more on the structural characteristics of the inner historical city, and the way in which they shape the functional relations with the urban environment, and are transformed themselves by the resulting “tourismification” of the urban space.

A heritage city can be conceived of as a specific urban environment, more or less concentrated in distinct historical neighbourhoods. It is integrated in yet separated from its hinterland on many levels, such as the administrative cover and the physical fabric. This separation may be evidenced by a physical discontinuity between the inner city and its 24 section 3.2. is based on Russo (2002a).

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“periphery”, which may take the shape of a landscape delimitation (as in the case of such (pen)insular spaces as Venice, Dubrovnik; a wall system as in Rothenburg, Corfu, etc.; or a system of canals: Amsterdam, Bruges25. The discontinuity helps to identify the boundaries of the tourist area of the city, that is, the part of the city where visitors spend most of their time-budget. Our definition is distinctively different from that of tourist complex given by such authors as Ashworth and Tunbridge (1990), Pearce (1995), or Hall and Page (1999), who include areas of no historical interest (e.g. hotel districts and theme parks).

The socio-economic features of the heritage city are also relevant and to a large extent the result of its physical structure. Heritage cities are middle-sized cities or towns where the process of “disenfranchising” between the tourist complex and the economic CBD, analysed by Ashworth and Tunbridge (1990), is not complete and probably never will be, because of the insufficient “mass” of the indigenous city economy compared to tourism.

The heritage city is then specified more closely by the character of historical assets and by the prevailing model of visiting. Historical assets are diffused throughout the inner city, even though some resources may be concentrated in distinct areas, largely as a result of the typical mediaeval urban pattern. Main squares – originally the site of the main city market –, a main shopping street and a castle area are the places where most tourists are likely to stroll to and meet. Palaces, cathedrals and other historical sites are accessible to visitors while often retaining their public functions. People also enjoy strolling from one sight to another, because of the general historical atmosphere of the city, deriving from its physical fabric, sights and markets, and from additional “atmospheric” elements that may be original, or the result of a manipulation of symbols and images. The city’s cultural-tourist supply is largely centred on the visiting, interpretation and representation of the heritage that is physically at hand. Other forms of tourism, such as eco-tourism, “young” tourism and business tourism – which would require extending tourist infrastructure to non-central parts of the urban region – are seldom integrated in the tourist product. Indeed, the touristification of the space only concerns the inner historical city. Even though cities adopt strategies to attract new segments on demographic considerations, their “core” business is represented by cultural recreationists.

Tourist regions and “functional tourist regions”

Tourist regions can be thought of as the areas involved in the tourist function of a certain destination. It means that each heritage city has “its own” tourist region, more or less extended, and that tourist regions of different destinations may overlap. Within tourist regions, relations and mobility patterns are therefore blurred and complex. Tourist regions are defined in many different ways in the literature.However, in our approach a restriction and simplification of the field of observation is needed.

We define a Functional Tourist Region (henceforth: FTR) as the area where tourists who are mainly motivated to visit the heritage city, are hosted overnight.

25 In other cases, there is some continuity between historical neighbourhoods (possibly of different periods), but historical areas are clearly identified as “touristic” by common perception and / or as a result of communication strategies (e.g. the Old City of Lyon, the old neighbourhood of Delftshaven in Rotterdam, the Old City of Stockholm).

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Such an area serves almost exclusively the tourist system centred on the destination under study, whereas indirect excursionists can be accommodated in alternative tourist destinations not functionally dependent on the main destination but functionally autonomous. In practice, the tourist region extends over the territory that hosts for more than 24 hours (or two successive nights) visitors who would spend part of their time in the historical centre, hence all false and passing excursionists as defined in Chapter 2, Tab. 2.ii. Therefore, all the secondary origins of a journey to a tourist destination are included26. The theoretical limits to the extension of FTRs depend on commuting time: one cannot visit a central location if the time needed to reach it takes more than the time-budget available 27.

FTRs therefore present themselves as hinterland areas with no tourist attractiveness per se 28, but providing accommodation facilities and other tourist services for visitors to a main destination. Such facilities may be clustered in peripheral neighbourhoods and municipalities, main communication nodes such as airports and high-speed-train station areas, and neighbouring regional centres and metropolitan areas, or they can be scattered in rural areas. The more attractive the main destination and the more limited the space available for tourist accommodation there, the more extended FTRs will be. Actually, the presence of favourable tourist settings in the proximity (e.g. recreational resorts or metropolitan areas) may accentuate the regional spread. Even when tourist regions include places with a tourist vocation that differs from that of the main urban destination (e.g. coastal tourism, mountain tourism, congresses and conventions), that capacity becomes easily integrated in the tourist system that gravitates around the historical city (Vio 1988). In some cases, this is the result of a strategy of peripheral operators who in this way can diversify their tourist products and extend the tourist seasons accordingly to cater for other market segments. Bauer (1997) highlights that the functional and relational delimitations of a tourist territory – defined as a space appropriated by certain actors – are largely independent from institutional or administrative boundaries. Rather, they reflect the different perceptions of the actors involved, and their strategic interaction.

3.2.2 Steps of operation of the vicious circle

We propose now a model, an analytic framework to describe how excessive tourism determines an unsustainable development of the destination.

The “vicious circle” model should not be confused with the destination cycle; rather, it provides a spatial-economic modelling of the “decline” step of the destination cycle. We are not concerned in this study with the “starting process”. In fact, we assume that tourism is a viable industry in the beginning, and we focus our attention on the maturity step of the tourist industry, better to understand the determinants and the consequences of change within a region. The matter of tourist promotion and “starters”, however, is not discarded and will be 26 That is, all those destinations hosting false and indirect excursionists as defined above. 27 Therefore, given a “rest time” of A hours and a “minimum duration of the visit” of B hours, the tourist region has a maximum width of S, which comprehends all the destinations from where you can reach the core in less than t = 24 – A – B hours. 28 FTRs may in fact include interesting historical assets and markers, and may represent rich cultural landscapes with a distinct character with respect to the main destination; however, their tourist potential depends mainly from their functional proximity with the central destination.

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taken up later when strategies for sustainable tourism are analysed. Another point of distinction is that the time horizon of life-cycles tends to be rather long, whereas the vicious circle operates immediately once a threshold is reached in the development process, provided that the conditions are there.

The model consists of a series of logical steps, leading from the enlargement of a destination’s FTR, to changes in the market structure and in the behaviour of visitors, and feeding back to the competitiveness of the destination. As a starting point, or necessary condition for the development of this model, we need a threshold, easily detected. Tourism may grow “undisturbed” in a city (in terms of physical flows, or pressure levels) until some critical level of tourist development is reached. Beyond that point, problems begin. Our “relevant threshold” is a first visible sign of excessive tourism growth, the saturation of the central supply of facilities.

expansion of tourist region (increaseof divergence between area of costsand area of benefits)

high share of excursionists;shorter visits

A

only central attractions arevisited; congestion increases;

B

down-grading ofquality of products

poor return ofcultural system

C

D

Fig. 3.1 - The vicious circle” of tourism development in heritage destinations

The tourist capacity of the historical core is limited. The opportunities to enlarge the tourist function – building skyscrapers or reconverting private houses into hotels, etc. – are scarce. Therefore there is a maximum number of tourists that can be accommodated in the centre, and not all who wish to spend the night in the city centre within a given price category can do so. Often this maximum is regulated, in other cases it is left to the free market. Roads, public transport, parking places, etc. cannot be expanded beyond certain limits. These facilities are necessary to the tourist function of the city but also to other resident-oriented activities. When they do not operate efficiently, the marginal running cost of such functions is due to increase. People may have to fall back on private transport – which imposes other external costs on the city – or transport becomes more time-expensive, etc. It should be stressed that the “carrying capacity” thresholds considered in Ch. 2.4 may not be the most relevant factor to explain the

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changes in the tourist market that are central to our model. The use of the accommodation-capacity threshold instead suggests an immediate endogenous link with the spatial character of the visits, and moreover is very easy to use for planning purposes. We have highlighted in Ch. 2 that in historical cities the socio-economic carrying capacity is likely to be violated at lower levels than the physical. However, even before getting to the point of physical or “economic” saturation, the complementary industry will start to grow more dispersed, in particular those activities for which centrality becomes increasingly costly, such as new hotels, recreation areas and transport facilities.

First step of the “vicious circle” (Fig. 3.1 -A). As the tourism demand for a destination increases over the historical centre's accommodation capacity, tourism activity spreads over its boundaries, determining the emergence of a Functional Tourist Region.

The first step of the “vicious circle” springs from the incapacity of the heritage city to limit the growth of tourism in accordance with its physical resources. The complementary product is much more mobile than the primary assets, and the administrative boundaries of the city are to a large extent insensitive to these dynamics. The functional tourist region – the area in which the visitors to the central attractions are hosted – tends to become larger, overstepping the boundaries of the municipality, as in the classic scheme of Miossec (1976). However, if the city is a very attractive one – as is the case of principal European cultural destinations like Venice, Bruges or Salzburg – it might as well exceed regional or even national boundaries. The «metropolisation» of tourism advocated by Marchena Gómez (1995) occurs in an unplanned and unmanageable way, lacking a complementary decentralisation of the cultural infrastructure (assumed given with the historical fabric of the city). That brings with it two major consequences.

Second step of the “vicious circle” (Fig. 3.1.-B). Due to the progressive enlargement of FTRs, an increased share of visitors is made of excursionists. More of the tourist expenditure leaks out of the city's boundaries. Excursionists tend to concentrate in space and in time, so that congestion increases, as well as the costs associated to it.

First of all, the share of day-trippers among the overall number of visitors increases. Among these, the number of would-be tourists who turn into false excursionists because they can’t find a place in the city centre or because it is too expensive for their limited budgets, is getting higher and higher. Secondly, the flexibility of the visits decreases. On one hand, day trips are typically more sensitive to weather conditions and “special occasions”, so that their seasonal pattern is more pronounced. On the other, visitors who commute have less time for retrieving “tacit” information about the cultural and the complementary products. Consequently they tend to be (i) less aware of the qualitative content of the tourist goods and (ii) less exposed to traditional information tools (guides, signals, press). Therefore, they tend to concentrate in space, since the centrally located attractions are reached (and experienced) with a minimum level of information. This point is made in Towse (1991:3-4). She refers to the case of art cities, taking Venice as a symbolic example. Search costs are assumed to be the costs incurred

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by visitors to gather information about the exact location, content and access of the cultural-tourist supply. In tourist gatherings around “superstar” attractions, such costs are minimised. A further phase of the vicious circle is now entered. Day trips produce more congestion than overnight stays, and since their share in the total number of visits increases, external costs associated with congestion rise more than they would if the accommodation capacity of the city centre could be increased freely.

A reasonable assumption is that the differential cost of urban facilities (e.g. the tax level) explains the tendency of the resident population to abandon a central location when they can get better services elsewhere, as in the classical framework of Tiebout (1956). It fact, arguably the problems of tourism development are exacerbated as the socio-economic mass of the city gets thinner, and there would be ever fewer resources that can be deployed to balance the rising costs. An example of such “hidden costs” is the price of waste collection, typically a cost generated by a different population from the one who bears it. In the case of small tourist cities, it might even be larger. In a sense, this extra-cost should be balanced by the benefit that the city – or at least some residents – gains from tourist activity. In reality, the costs of waste collection and others of this kind, such as higher consumption prices – imply a drastic redistribution of wealth29.

However, the imposition of external costs on the residents is not central to the present analysis. More relevant to the argument of this study is the impact of an inefficient organisation of the visits on the performance of the cultural tourist industry. The combined effect of congestion and lack of information is that some cultural resources receive less attention than they deserve, while some others are over-utilised. On the whole, far fewer visitors can enjoy the cultural heritage than the city could afford, and the quality of the tourists’ experience is eroded by various impediments and time lost in queues

Third step of the “vicious circle” (Fig. 3.1.-C). Higher congestion of central facilities and tourist assets brings about quality deterioration. Central tourist suppliers enjoy higher location rents and information asymmetries; the cultural system is utilised inefficiently, with consequences on the quality of the services supplied. At the same time, residents are pushed out of the city by increasing congestion costs.

The incapacity of the heritage city to benefit from tourism in proportion to the growth of tourism is at the basis of the next phase of the vicious circle. The excessive concentration of the visits and the dispersion of the “selling points” associated with the emergence of day-trips have a negative effect on the performance of the attractions. In fact, the resources needed for the maintenance of the heritage, for innovations in the products, and for implementing information and marketing strategies are to a large extent no longer in the control of the local institutions. That is particularly true in an era of decreasing transfers from central

29 Van der Borg and Russo (1997) show how, while the cost of waste collection produced by residents and tourists in Venice has decreased by 5% in seven years, the overall cost of collecting waste has actually increased by almost 10% in the same period. This gap is seen to depend on the growth in the number of consumers that are neither residents nor tourists: the excursionists. Similar indicators are obtained in the same study for travel and parking congestion.

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governments. Even if monuments and historical sites are reasonably considered public goods that should be subsidised, the conservation standards are rather low and presumably tourism should produce extra revenue to be channelled into heritage protection.

But there is another, subtler mechanism at work: as the share of day-trippers increases, tourism demand becomes less elastic with respect to quality. This is the central mechanism of the model proposed, and it will be analysed in formal terms in the next section.

Because visitors on the whole are insufficiently informed about quality, the suppliers of tourist goods in the city centre will be able to curtail the quality content of their products to increase their market share. They may lose some “sophisticated” customers, but appeal to visitors less concerned with quality and much more sensitive to prices. In the end, in a typical process of adverse selection, only low-quality suppliers are left in the market. Whereas at the initial stages of growth the economic strength of tourism caused the displacement of other economic activities, at this later stage tourism tends to crowd out itself, replacing high-quality products with cheap and standardised ones. At that point, the tourism space undergoes what has come to be termed “McDonaldisation” (Ritzer 1998). Not only is the capacity of products to match the demand of a certain segment of tourism compromised, but the whole aesthetic quality of the landscape and the system of cultural values embodied in the city is in jeopardy.

Fourth step of the “vicious circle” (Fig. 3.1.-D). A reduced quality of the tourist products is reflected in a higher propensity towards “non central” visits. Would-be tourists that are informed on the bad quality of tourist products spend less in the city centre, and feed the vicious circle creating further disconnection between the area where costs are imposed and the area that captures the benefits from tourism.

The consequence of this decline in quality is a strong feedback to the very origin of such mechanisms. At the fourth and last phase of the vicious cycle, we can observe the full implications of the dispersion of tourist activities that occurred first. With products getting increasingly banal, and congestion making it more costly for visitors to choose the central accommodations, they will find it more and more convenient to consume non-central facilities. The visitors set the cost of distance of against the prices and the quality of the complementary facilities. The budget of visitors is reallocated between the goods forming the tourist package in such a way that as many goods as possible are purchased “outside”, to save money and escape possible “quality traps”. Indeed, more and more of those who still wish to visit the city will choose a peripheral accommodation, thus feeding the dynamics of the vicious circle.

The circle is now complete. The expansion of the tourist region beyond the “natural” boundaries of the city centre, due first and foremost to the growth in demand, in the end causes that very expansion to continue. Mark once more that the steps of the model’s operation are only logically sequential, but in fact may occur simultaneously right from the moment of saturation of the accommodation capacity in the city centre.

This result is to some extent surprising. Contrary to the prevailing arguments in the literature, the loss in competitiveness of the tourist product in heritage cities is neither made to depend on evolving fashions, or market sizes, to which an immediate response may come in term of product rejuvenation – indeed, a story that may apply to the case of destinations like sea

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resorts or other speciality tourism. Rather, it is induced by the process of formation of “functional tourist regions” around heritage centres and by the consequent emergence of distortions in the market (asymmetric information, reductions of time budgets). The spatial issues are at centre stage here, and they should be managed at a scale larger than the very local. An important point is that the quality itself of the primary tourist attraction – the heritage – depends in the long term on the market structure and functioning. Heritage preservation and its “sustainable use” are very much dependent on the very structure of the tourist region, and can be influenced by it. Another interesting feature of this conceptual framework is that the decline can be to some extent avoided if there is some mechanism to co-ordinate the strategy of the tourism industry with the performance of heritage and other non-profit cultural attractions. This possibility will be discussed later in sections 4.2 and 4.3.

This model is expected to apply in a variety of contexts, and in particular in situations in which the “local mass” is negligible with respect to “global pressure” of tourism, and in which the supply is difficult to reorganise on the spatial scale. To be immediately connected to policy, this theoretical scheme needs to be founded in a formal analysis that identifies the critical variables and their interrelations. That is done in the next section, which also introduces the subject of long-term equilibrium, or sustainability, of tourism development in heritage cities.

3.3 Quality, reputation and competitiveness of the heritage city: a formal analysis 30

This section focuses on the economic mechanism that is at the core of the process described above, that of quality decline (step “C” of the vicious circle). What are the incentives for a much-visited heritage destination to supply high-quality tourist goods?

The problem of quality and pricing in tourist destinations has been addressed by Keane (1996, 1997), who made use of the toolkit of reputation models developed by Shapiro (1983). In his works, Keane shows that information asymmetries between visitors and producers may lead to a loss of competitiveness of tourist destinations. However, his analysis misses the important distinctions between different classes of visitors, as it assumes that all consumers have the same access to information, and also that between primary heritage products generally supplied by non-for profit organisations or publicly available and secondary or complementary goods supplied by the tourist industry.

We now extend Keane's framework, explicitly considering distinctions among visitor types and tourist goods. Following the framework of the “vicious circle” exposed in the previous section, a central assumption is that the spatial characteristics of a visit to a city (daily excursions as opposed to “central” overnight stays) influence the market behaviour of the agents. In that setting, it can be shown that repeated purchases of tourist goods may not be enough to sustain high quality. That mechanism, which operates through the informational asymmetries generated by a reduction of time budgets, has important consequences for the competitiveness of the destination. In fact, a decline in the capacity of the cultural assets to earn the resources needed for their preservation and valorisation may ensue.

30 section 3.3. is largely based on Caserta and Russo (2002).

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3.3.1 Assumptions

Our heritage city consists of a core, or historical centre, where all the primary attractions (non reproducible, non transferable, supplied in a given quantity and quality) are located, and of a periphery, the functional tourist region, which boasts no historical features but may offer hotels and other tourist facilities. The FTR has been defined as the area that serves the tourist functions of the core. As long as it accommodates tourists and earns their revenues, it is part of the tourist system centred in the core, no matter what its extension is.

Market structure

The city attracts a yearly flow of visitors. A visit to the city implies a sequence of decisions (Fig. 3.2). The fundamental decision whether to visit the city or not depends on the quantity and quality of its cultural and historical attractions, which we define as primary tourist goods. At this stage, we assume such conditions as given, and the yearly rate of increase in tourist demand is given by world trends. We may assume that an increasing number of visitors who every year choose a certain city as their destination. The primary goods are sold at cost (or below cost, as is often true of merit goods offered by subsidised institutions). Such assets 31 are central to a traveller’s choice of destination. The demand for heritage goods is relatively inelastic because they are so very unique. One decides to go to Venice because he is yearning to see its wonderful canals and museums, rather than elsewhere, Rome for instance, which has different attractions.

However, to be consumed, primary goods need to be combined with secondary or accessory tourist goods. Presumably secondary goods are sold in a monopolistic market; their providers act “as if” they were monopolists in restricted portions of the urban space 32. Keane (1997), utilising the contestable markets framework, finds that the same results are obtained in a competitive setting.

The monopolist, in addition to setting the price, also decides the quality to be produced. The overall quality of the tourist experience, therefore, depends on the “given” quality of the heritage or cultural content of the visit and on a variable component whose quality depends on the market strategy of the suppliers. Therefore, even if the quality of the historical assets is given and is not controlled by tourist suppliers, the quality of the experience may deteriorate if the secondary goods are of a mean quality.

In reality, in the long term the quality of the heritage is also affected by the amount of funds channelled to the maintenance of the heritage. Increasingly, cities have to rely on their own resources to produce such means, that is to say, on the revenues from the tourist market and the taxpayers. In the next section we will discuss how this may affect the long-term outcome of development. In the model, however, we will focus on a short-term horizon in which the quality content of primary products does not change. 31 They do not need to be single-standing physical assets, like monuments or art objects; heritage may also consist of sets of goods (e.g. art collections, historical neighbourhoods or landscapes) or even intangible qualities, like a cosy atmosphere, a colourful square, etc. 32 Gravelle and Rees (1992: 270) justify the assumption of monopolistic behaviour for such operators (in their example, restaurants) arguing that they can discriminate with respect to quality, location, ambience, etc., to the point that lowering or increasing the price would not affect their market share.

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Fig. 3.2 - Consumption in the heritage city

DECISION TO VISIT THE CITY

Depends on quality of the primary resources (heritage). As long as quality is constant, demand grows exogenously with world tourist demand

ACCOMODATION Prices: monopolistic (from proximity to resources) or ‘imperfect competition’ Quantity: constrained in the centre, infinite in the periphery Quality: given or assumed lower in the centre

Consumed in the centre or in the periphery

CULTURAL PRODUCTS

Prices: free market of below-cost (non profit) Quantity: constant Quality: depends on state/region transfers Consumed in the

centre

TOURIST GOODS

Prices: monopolistic (from proximity to resources) or ‘imperfect competition’ Quantity: infinite Quality: depends on producers’ strategic behaviour

Consumed in the centre

Finally, visitors must decide upon their accommodation. They can choose either to stay at a central accommodation and visit the city as “tourists”, or at a peripheral accommodation within the region and visit the city as “day trippers”. The visitors who have chosen to stay in the centre are called tourists or central visitors (CV). Those who have chosen peripheral accommodations are called excursionists (EV): they behave just like commuters, reaching the city some time during the day and going back to their accommodation site at night. When deciding whether to visit the core as tourists or excursionists, visitors trade off the higher prices of hotels near the resources with the lower prices of the periphery, taking account also of the transport costs. In the end visitors choose central or peripheral accommodation according to their budget; besides, because of limited capacity, they are subject to the “first come first served” rule.

Information

Visitors, tourists as well as excursionists, all consume both primary and secondary goods during their visit. Presumably, they are perfectly informed about the cultural heritage – this information is commonly available in tourist guides, press articles, educational programmes, etc. – but less so about the secondary goods, which are typical “experience goods” (Tirole 1997: 106). Tourists have all day to explore the city and compare the goods on offer, whereas excursionists have to give up part of their time to commuting to and from the destination, more so as the tourist region gets larger. They will have just enough time to take in the most

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central attractions, the ones that fit in their tight time schedule and money budget. As to secondary products, the odds are that they just consume what the others consume and go where the others go in a sort of “bandwagon effect”, as argued by Towse (1991), not spending time and money on searching and comparing the goods and the places where they are sold. Thus, excursionists, unlike tourists, are unable to assess the true quality of the secondary goods on offer. Such differences in the attitudes of tourists and excursionists are induced by the difference in the spatial organisation of the visits, which is itself a result of the structural characteristics of the heritage city.

Once visitors have learnt (by direct observation and consumption) the quality of the experience, they will decide whether or not they will repeat the purchase. Because the quality of the primary products is given, the real decision variable is the quality of the secondary goods. For simplicity, we assume that the monopolist's reputation is propagated by “word-of-mouth”. The introduction of repeat purchases (in this formulation not made by repeat visitors but by people who have been informed by friends and relatives) represents a crucial incentive for a producer to supply fair quality.

In fact, given the typical transient nature of consumption in the tourist industry, a moral hazard problem on the producer's side jumps to the eye. In our framework, repeat purchases can avoid the moral-hazard problem only if the monopolist has built up a reputation for high quality. The classical model of Shapiro (1983), extended to a monopolistic set-up by Tirole (1997), is based on the concept that the costs associated with the future loss of sales have to exceed the current cost savings made by cutting on quality. A mechanism is thus created that prevents the monopolist from supplying cheap quality in each period. However, repeat purchases induce the provision of high quality only if two conditions are met: 1) that consumers learn the quality of the purchased object quickly enough; and 2) that they purchase many times (Tirole 1997: 112). The formal development of the model to be presented (based on Shapiro 1983, Tirole 1997, and Keane 1997) suggests that these conditions may fail to be satisfied when the spatial displacement of tourist activities is considered.

3.3.2 The model

The market for tourist commodities is such that the monopolist can change the supplied quality in each of an infinite number of periods, t=1 2,… . There are two levels of quality s: s0 = 0 (low quality) and s1 = 1 (high quality). A minimum quality is necessary for the existence of the market; it can be conceived of as the minimum quality level below which consumers will be able to detect the fallacies of the product just by inspection, that is, before the purchase. Therefore, if a quality lower than the minimum were offered for sale, nobody would buy it. Everybody is interested in buying one unit of tourist goods, whose production cost is c0 if s = s0 and c1 if s = s1 , with c1 > c0, with the cost function increasing with quality. Equivalently, the price for the high quality good is p1 and p0 for the low quality.

Visitors are divided into two groups: CV (central visitors, or tourists), and EV (excursionists). They are all characterised by a taste parameter θ, in such a way that utility of consumption of the tourist goods, expressed in each period, is:

�� −

=goodt any tourisbuy not does he if 0

priceat good tourist ofunit one buys one if ppsU

θ.

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On the assumption that all visitors prefer high quality, at any given price, a visitor with a high θ is more willing to pay to acquire high quality. Alternatively, θ is interpreted as the inverse of the marginal rate of substitution between income and quality. Consequently, visitors with high initial wealth have a higher θ because they have a lower marginal utility of income (Tirole 1997: 97). The taste parameter is distributed across the population according to a cumulative distribution function F(θ ), on [0, +∞]. This means that F(θ ) is the percentage of tourists with a taste parameter less than θ. Hence, a visitor with parameter θ buys the tourist package of quality s at price p if his taste parameter is such that θ s ≥ p. For a visitor to buy the high quality product we need to have θ ≥ p1 . The total population of visitors is normalised to 1, of which a percentage λ is made up of tourists and a percentage (1 – λ) is made up of excursionists. Excursionists are different from tourists in the time, after purchase, that they need to “learn” the quality of the tourist good. Specifically, the reputation of the monopolist at time t is defined as the expected quality at time t, that is E(st)≡ Rt. Then, we assume that tourists are such that Rt =Rt

CV= 'nts − , and for excursionists Rt =RtEV = ''nts − , with n' < n''. Here

n' and n'' represent the time lag between the sale of an item and the adjustment of reputation on the basis of the discovered quality. This means that excursionists are defined as those who need more time to learn the true quality. The learning time also depends on the configuration of the tourist region: if the region tends to become wider, the time budget of excursionists is on average shorter, and so their capacity of learning the true quality of the goods on offer diminishes. So, as tourism demand expands, the “information gap” between tourists and excursionists will tend to become wider, with important consequences for the long-term properties of the model.

Let us assume, for simplicity, that the tourists learn the quality in one period, i.e. RtCV = st - 1

while it takes n periods for the excursionists, i.e. RtEV = st - n, with n>1. Moreover R1

CV =1 and R1

EV =1, implying that the economy starts with high quality and high expectations. The interest rate per unit of time is i, so that the one-period interest rate is r = e-i - 1 and therefore

the discount rate per time period is δ≡+

=−

re i

11 .

In general, we are looking for an equilibrium price such that the following strategies are optimum:

a) visitors base their expectations of quality on the monopolist's reputation;

b) the monopolist begins selling high quality (s=1) at price p1 and continues to do so is in the following periods. If he should deviate, starting to sell low quality (s=0), consumers would not buy any more.

Given the monopolist's strategy (i.e. in every period to choose the quality of the previous period), the consumers' strategy is optimum. Given the consumers' strategy, the following equations hold for the monopolist: if he follows the above defined strategy, his profit is:

(1) )(

11)(

1

...]1[))(1(...]1[)(

1111

211

211

cpcp

cpcp

−−−+−

−=

=+++⋅−−++++⋅−

σλ

δλ

σσλδδλ

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EVfor considered be toratediscount theis )1(

1 and 1

1 where nrr +=

+= σδ

if he deviates from this strategy, his profit is:

(2) 010101 ))(1()( cpcpcp −=−−+− λλ .

A necessary condition for equilibrium (that is, for the optimality of the strategy pursued by the monopolist) is, then, that the profit in the first case (expression (1)) be higher than the one in the second case (expression (2)):

(3) 011111 )(11)(

1cpcpcp −≥−

−−+−

− σλ

δλ

which, after rearranging terms, becomes:

(4) ( )0111 )(1)1)(1( cpcp −⋅

−+−−−≥−

σδλδσδ .

The above inequality suggests that the monopolist33 has an incentive to supply high-quality products only if he can earn a “quality premium”, represented by the left-hand side of expression (4).

3.3.3 Analysis of the quality premium

Let us simplify the notation. Define the variable k as follows

(5) )(1

)1)(1(σδλδ

σδ−+−

−−≡k .

Then the variable

(6) )1)(1()(1

)1)(1(1 σδσδλδ

σδ−−−−+−

−−=−

≡k

km

corresponds to a mark-up variable, and it can be used as a measure for the difference between price and cost for high-quality tourist goods. In fact, substituting (6) into (4) we can rewrite the equilibrium expression (4) as:

(7) )(p 011 1 ccmc −+≥

33 It is worth noting that in an oligopolistic formulation expression (4) would still hold. Moreover, if we add the hypothesis that new entry into market segments is unattractive, then expression (4) would be also an upper bound on the price of high quality goods (see Shapiro 1983: 667-667).

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which means that high quality goods sell (at least) at a price above their production cost, by an amount equal to m(c1-c0), which corresponds to the quality premium. Hence, expression (7) provides a lower bound for the supply price of products of high quality. As an immediate consequence we can deduce that an increase of the minimum quality level produces a reduction of the quality premium because m(c1-c0) decreases, ceteris paribus, when c0 increases.

In the extreme case in which λ = 1, that is if all visitors were tourists, condition (7) reduces to:

(8) )(p 011 1 ccrc −≥−

and if λ = 0, that is if all visitors were excursionists, it becomes:

(9) )(]r)[(1 p 01n

1 1 ccc −+≥− .

These expressions34 show that the premium required to sustain an equilibrium with high quality is larger when there is only a population of excursionists compared to that needed in the case of only tourists; it is also larger the longer their “learning time”. This is so because a longer learning time implies a longer time to detect the diminished quality, giving the monopolist greater incentive for cutting quality. Moreover, the case where there are only central tourists represents a lower bound for the level of the mark-up m.

One can now analyse how m changes when the share λ of tourists changes and when the learning time n of the excursionists changes. In the first case, the derivative of m = m(λ, n) with respect to λ is

(10) [ ] 0)1)(1()(1

))(1)(1(2 <

−−−−+−−−−−=

∂∂=

σδσδλδσδσδ

λλmm .

This expression implies that when λ decreases the mark-up will become higher. In fact, a greater percentage of excursionists increases the profit that a firm can make by milking its reputation, hence it increases the quality premium.

0.005

0.0055

0.006

0.0065

0.007

0.0075

0.008

1 2 3 4 5n

Fig. 3.3 – The quality premium m as a function of the share of central visitors

34 These expressions correspond to the two cases analysed in Shapiro (1983: 667-672).

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For example, if we fix n = 3 and r = 0.005, m as a function of λ is described in Fig. 3.3. It can be similarly shown that the first derivative of m is increasing with respect to n, implying that a longer “learning” time for excursionists produces a higher mark-up. Fixing r = 0.005 and λ = ½, the relation between the two variables is described in Fig. 3.4.

0.006

0.008

0.01

0.012

0.014

0 0.2 0.4 0.6 0.8 1

Fig. 3.4 – The quality premium m as a function of the excursionists' learning time

Different price-quality schedules produce different welfare effects, as in Shapiro (1983). As m rises as a result of the gradual increase in the share of excursionists (1 – λ), consumers substitute towards lower quality goods as the price for high quality goods increases. Moreover, some consumers would stop buying the good altogether. On the other hand, as m falls there are welfare gains for consumers, since this corresponds to a reduction in information costs associated with establishing a reputation as a high quality producer. This can be achieved if information asymmetries between producers and consumers were recouped, or if the learning problem associated with visiting cities as excursionists were mitigated. As will be discussed later, a targeted information strategy or a “labelling” system signalling high-quality producers would improve the capacity of any visitor – whatever their mode of visiting the city – to detect low quality and avoid purchasing it. Note that reducing the share of excursionists may achieve the same objectives, but this has been revealed to be an impracticable policy option for most European heritage cities (Van der Borg and Gotti 1995). Mark also that the per capita welfare gains from reductions in m through information policies would be greater for those to whom quality is more important. This is particularly important for heritage cities as hopefully “high-quality tourists” are also more willing to reward the true value of the heritage assets. Further welfare gains can be achieved by setting minimum quality standards through certification, patents, etc. Shapiro (1983) argues that for a convenient s0 this strategy may achieve non-ambiguous outcomes. However, he also points out that increasing minimum quality standards produces a net capital loss for producers who have already established a reputation as high-quality producers, which makes resistance from the industry likely. Anyway, the focus of our study is not so much on the welfare of visitors as on the capacity of heritage cities to sustain unbalanced patterns of tourist growth in an increasingly competitive market. The consequences of inertial growth and policy intervention are analysed in the next section.

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3.4 The sustainability of tourism development in heritage cities

The model presented above suggests a dynamic relation between the spatial characteristics of the tourist system centred on a heritage destination and its market features. As tourism demand expands, low quality is likely to set in, bringing with it decisive changes in the mode of tourist consumption. We have assumed throughout the analysis that the heritage maintains its attractiveness and therefore tourist demand continues to be stimulated. However, a reasonable assumption is that the change of tourist products also influences the capacity of the site to attract visitors, or at least some segments of them. The sustainability of tourism development requires that localities be able to attract a consistent flow of tourist receipts in a durable way. To the extent that costs or events associated with tourism development make this impossible or unlikely, tourism development in its present form has to be considered unsustainable, and substantial changes are needed. In fact, the discussion of the long-term trends that follow from our model may be reconnected to the general concept of sustainability.

3.4.1 Steady-state properties of the vicious circle

According to the “vicious circle” scheme, the location of visitors within the tourist region is determined in the end by such variables as the price and quality of the tourist package and the increase in tourism demand. Prices and qualities are determined in the model of section 3.3 by the visiting pattern. In fact, in the model both the learning process and the consumption behaviour of visitors are made to depend on the persistent pressure of tourism demand that finally influences the spatial and market structure of the tourist system.

The expansion of the tourist region and the increase in prices would continue as long as tourism demand increases. The model assumes that in the short term this process is exogenously given by world tourist trends. When the market does get saturated, i.e. the rate of growth of demand approaches zero, then it is reasonable to assume that the system would converge towards a steady state, which corresponds to a certain extension of the tourist region. In equilibrium, we expect the spreading forces (congestion, prices) and the agglomerating forces (proximity to central attractions) to match exactly. A further expansion would not be justified, and the visitors’ flow is “optimally” divided between tourists and excursionists (Fig. 3.5).

However, a steady state with such characteristics is unlikely to emerge. For one thing, it is questionable that the growth rate of tourism for a heritage destination of prime importance would “exogenously” decline to zero. New origin markets continuously develop, new target groups are addressed, technological and economic progress makes it easier for people to travel. Therefore, even when old disaffected markets decline, they are progressively replaced by new ones, with different profiles. The assumption is then warranted that the increase in the demand is to some extent persistent.

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Historicalcentre

Tourismregion

Persistent increase in tourismdemand expansion of tourismregion decline in quality of centraltourist products

Historicalcentre

Tourismregion

Decline in demand increase = regionalequilibrium in prices/quality andextension of tourism region

tourists

excursionists

Fig. 3.5 – Steady-state characteristics of the FTR

For another, the pattern of dispersion of the tourist activities in the medium-long term is generally not matched by an adequate revision of the administrative boundaries of the central municipality. Even if there is a temporary equilibrium in the sense that the industry has no incentive to relocate further, in the absence of re-distributive policies the social costs engendered by tourists will still be borne by the residents. If the spatial dispersion of the tourist activities in the “steady state” is such that insufficient resources are channelled to the maintenance and upgrading of the primary product, i.e. the cultural heritage, then the demand for tourism in the region as a whole is expected to decline. Consequently, we can figure out that – if uncontrolled – the vicious circle will determine a continuous decline of the attractiveness of the central area, which may turn into an absolute decline in the performance of the tourist industry if and when the quality content and the accessibility fall below some critical threshold.

In practice, such a catastrophic outcome depends on the structure of the cultural tourist system: namely, the structure of mobility, the quality of information, the location pattern of the primary products, the structure of local finance, etc. This argument represents a spatial-economic rationale to the assertion that «…the damage caused in this way to the image and the reputation of the city may well be irrecoverable. And since these resources do play a key role in the initial step of the cycle, it could reasonably be doubted that the city might be able to recover its position as a tourism attraction in a later step» (Van der Borg and Gotti 1995:28).

We now turn back to the model exposed in section 3.3 to articulate such assertions in more detail. Our version of Keane’s (and Shapiro’s) approach to the matter of quality in tourist destinations has highlighted that in a “zero-intervention scenario”, with tourist pressure growing unboundedly because of day trips, it becomes increasingly profitable for a producer to supply low-quality goods. As a consequence, either the market disappears or a premium price must be paid so that the costs of building a reputation as a high-quality producer are covered. Therefore, to endure tourism development implies that the price of high-quality

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tourist goods is rather high: the increasing share of excursionists (1 – λ) and the lengthening learning time n that is associated with a wider “tourist region” combine to push up the mark-up. In fact, it is to some extent unlikely that tourists will decide to replace expensive heritage destinations with cheaper competitors, as happens in Keane's example of Caribbean resorts. To the extent to which tourist visits are compatible with the integrity of primary heritage assets, the outcome may well be sustainable by the definition of “tourism sustainability” given earlier, that is, a lasting capacity to contribute to local welfare.

However, the assumption is reasonable that tourists’ budgets have some upper limit: tourist prices cannot grow boundlessly in the face of increasing demand. Whereas a few “superstar” destinations, however costly, would always attract millionaire aficionados, in the majority of cases, above a certain price threshold destinations would have to compete for their market share by offering similar experiences at cheaper prices. Producers would then anticipate a possible contraction of the market by lowering average quality. At that point, the city must “reinvent” itself as a low-quality tourist destination, hoping to attract tourists with a lower preference parameter and in this way achieve lower market prices that sustain the expansion path.

In that vein of thought, life-cycle dynamics can be seen as operating within each market-segment. The maturity of a destination for a specific segment coincides with the take-off for a lower-quality segment, with a lesser willingness to pay. As quality declines, the destination loses appeal for high-quality visitors (as Shapiro finds in his model) and the city spirals down towards cheaper quality standards. The destination continues to be heavily visited, but its market profile downgrades. In some way, that conclusion is consistent both with recent re-interpretations of the life-cycle mechanism (as Ioannides 1992 and Haywood 1998) and with the “psychographics” approach to destination development (Plog 1973).

Tourism development is unsustainable because ultimately it affects the competitive position of cities and regions. This pattern of tourism development affects the entire urban economy. In other words, though markets can substitute for one another, their impact on urban sustainability is not the same. First, quality declines are reflected in worsening conditions for residents, whose demand basin overlaps with that of tourists for many elements of the tourist package (e.g. food). If the visitor/resident ratio is high, residents’ welfare will be strongly eroded. That is commonly observed in tourist cities in which the residents have to turn to suburban shopping malls and non-tourist areas for their daily purchases. Secondly, if a tourist city wishes to diversify its economy and become less dependent on a highly unstable industry like tourism, it should project an image of an attractive and convenient location that sells value for money (Van den Berg and Braun 1999). However, this option may not be available owing to the dynamics analysed in the model. What we find instead in heritage cities is a highly contentious environment where opportunity costs are high and values are inflated by the pressure of the tourist economy (see for instance several case studies presented in Ashworth and Tunbridge 1990; Jansen-Verbeke 1990; Van der Borg and Gotti 1995).

Here, it easy to see a direct connection with the urban life-cycle theory of Van den Berg et al. (1982). If not properly managed, tourism accelerates the process of suburbanisation of the population and jobs, taking away mass and importance to the inner cities. As the city’s rings do not possess the location factors needed to develop a viable tourist industry (attractiveness), de-urbanisation may then ensue for an important part of the local economy. This process may explain why cities like Venice have de-urbanised in the last decades at an unusual pace, and

78

why they find it so hard to regenerate their economy. In fact, tourism imposes usage pressures and market structures that may be incompatible with the development of strategic “soft” functions, the engines of urban development in the global economic environment. We will come back to the link between life-cycles and sustainable tourism in the next chapter, where we will examine the requirements of an integral tourist policy.

Tourism development is unsustainable because ultimately it affects the integrity and the quality of the heritage. A complementary explanation of the unsustainability of heritage tourism requires that the production of “heritage services” is brought into the picture. So far, we have assumed that the quality of the heritage as well as the process of making it accessible to the public, are not determined in the model but are a given. However, in the long term that need not remain so: the state of conservation of the heritage and the “services” that it renders to visitors depend to varying degrees on the generation of revenues that are reinvested in the heritage itself:

•= at the level of the individual monument and sight (for instance, in the case of a private- property historical building);

•= at an aggregate level (e.g. the State that reinvests the receipts from visits in the national museums to improve the services or enlarge the collections);

•= at a more conventional, “systemic” level (the public sector that reinvests hotel taxes to raise the landscape quality – e.g. by cleaning the water – in the surroundings of a famous tourist sight).

Clearly, a substantial portion of the funds to preserve the heritage come from central, lump-sum transfers, but that “safety” is increasingly in jeopardy at stake (for instance, as a result of the on-going decentralisation of fiscal policies in most EU countries). One can observe that in times of economic downturns, the first cutbacks regard such sorts of public expenditure, with increasing relevance according to the list above.

Now, low-quality demand segments are less willing to pay for the primary products, the heritage attractions. The capacity of the heritage to generate revenues is therefore great as long as the destination is popular among high-spenders, and progressively declines as these give way to less sophisticated visitors (even if the absolute number of visitors should stay the same or even increase). Therefore, it is the total receipts of the heritage industry that follow a life-cycle path, rather than the total number of visitors (Fig. 3.6). So, the heritage is restored, preserved and made accessible to visitors as long as 1) a complementary industry earns good money, and some redistribution mechanism operates between the primary sector and the complementary sector; and 2) visitors are willing to allocate a portion of their budget to “cultural visits”. A destination's capacity to generate revenues is high as long as it is popular among free-spending and demanding tourists, but progressively declines as these tourists give way to less sophisticated visitors. And since demand for tourism is originally generated by a high-quality cultural environment, the progressive loss of value-generation capacity of the heritage – with less and less money reinvested in conservation and increasing dependency on external funding and transfers – feeds a generalised loss of attraction capacity for the tourist destination as a whole.

79

Touristreceipts

Overnight stays

time

time

High-spenders Low-spenders

Fig. 3.6 – Tourist receipts (above) and absolute numbers (below) in heritage destinations

The model could be enriched to describe how visitors substitute “non-cultural” goods for “cultural” goods within their tourist package when the price of non-cultural goods increases. In fact, these two goods are imperfect substitutes; when the price of the first increases, the quantity purchased can decrease only to a limited extent, e.g. by economising on foods and beverages. Visitors may then decide just to stroll around the city, rather than visit museums or attend performances for which a price is asked. Conversely, if the production of high quality goods requires too high a price in order to be sustainable (for instance, because of the numerical pressure from excursionists), producers would cut quality. Thus, only those with a low taste parameter (and a lesser willingness to pay) would consume the good, while those with a high taste parameter may exit the market.

A formal steady–state analysis would require a higher level of sophistication in the modelling of demand and is left to further research. The important thing to note is that, when the quality mechanism operates, the financing of the heritage industry becomes less and less dependent on locally generated revenue and increasingly on external sources and transfers. The framework in which cultural policies operate becomes increasingly rigid and – in an age of progressive decentralisation and local autonomy and responsibility – to raise the money to preserve monuments and sites becomes more and more difficult. The argument can be turned upside down to derive an immediate policy indication. In the long term, “special transfers” accorded by national states to heritage preservation, may represent a “safety net” that induces both irresponsible behaviour from tourist operators and a boundless expansion of tourist regions.

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In his enlightening discussion of the relation between the sustainability of tourism and sustainable development, Hunter (1997) suggests that the endurance of tourism development is too often and too simplistically equated to the general notion of sustainable development for a tourist destination. Instead, he proposes that sustainable tourism is a paradigm that depends on (adapts to) the contexts in which it is applied. He concludes that in «old and developed tourism areas», where tourism has come to dominate the local economy, sustainability can be achieved by a product-led strategy of tourism development. However, our discussion highlights that, in principle, if the pressure from the global expansion of demand for cultural tourism continues to increase, the endurance of tourism can be achieved only at the expense of quality.

3.5 Conclusions and continuation of the work

The approach to tourism development presented here is based on the traditional assumption that tourism develops cyclically; destinations that today thrive because of tourism, might be in a crisis in the future, if the process of growth is not properly managed. The vicious circle model represents a spatial-economic theory of decline in tourism development that is consistent with the peculiar characteristics of heritage cities.

Is this a reasonable story for European destinations of heritage tourism? Whereas there is a vast literature about life-cycles in islands, seaside resorts, rural areas, mountain destinations and natural parks – as summarised in Ch. 2 –, the empirical evidence regarding heritage cities is scarce and, anyway, does not yield unequivocal indications. Many destinations did experience stagnation or decline after a step of take-off and one of maturity, but the peculiarity of the contexts might have influenced the events to a great extent. In some cases, though, the threshold of carrying capacity is likely to have been violated, and the most negative impacts of tourism development have started to be experienced. In cities like Salzburg, Toledo, Venice, Bruges, increasing pressure from tourism (as captured by simple visitor / resident ratios) is perceived as a source of instability for the local society and economy. These communities are wondering whether they are really profiting from tourism development – something that until recently had been taken for granted–, and how the process of tourism growth could be managed in such a way that some room is left for alternative developments. . Needless to say, such policy changes have strong opponents and are extremely risky. Tourism looks like an “easy” cash-maker and is therefore supported by important sectors of the local community. Moreover, mass cultural tourism is exploding now for the first time in history, so that little can be said about the possible consequences of the present patterns of growth.

The model suggests that increases in demand lead to changes in the market structure and in the behaviour of all actors involved, to the point that the preservation of the heritage is at stake and the competitiveness of the destination declines. In broad terms, tourism development in heritage cities – if unmanaged – is not sustainable. The pressure for unsustainable development is there as long as the tourist demand is not satisfied in the local hospitality market, and tourism is developing in expanding FTRs; and as long as information asymmetries and restrictions in time budgets persist; and the supply of heritage and other cultural products “depends” on revenues that are generated within the secondary industry, or on external transfers.

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The indications for policy follow rather straightforwardly from the structure of the model. The mechanism on which the vicious circle is based can be systematically attacked with simple anticipatory policy rules. They may range from mere strategies of visitor management to more comprehensive programmes for the restructuring and marketing of a city’s cultural supply. However, the complexity of the relations at stake demands a careful analysis of the policy process and of the actors involved. The conditions that enable policy makers to implement policy effectively are also critical, as are the urban and industrial contexts in which policies operate. These conditions are described in the next chapter.

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In this chapter we utilise the analytic apparatus presented in the previous chapter to deal with policy matters. In the first part (section 4.1), each step of the vicious circle is associated to policy interventions that are likely to break up the mechanism, bringing development back on a sustainable path. To that end, policy makers need to know precisely whether the vicious circle is active, and which variables are likely to be critical in the process. A “decision-support system” can be derived from the structure of the vicious circle model to manage tourism in a timely, integral, and sustainable way (section 4.2). Such a comprehensive approach to tourist policy can be calibrated to fit the contexts of a variety of cities at different development stages.

In section 4.3 we will consider how the sustainable development of tourism may contribute to urban regeneration. In that light, we can analyse the shortcomings of “traditional” approaches to tourist policy, and [propose instead the notion of “cultural cluster” as one in which synergies between tourism and the regional economy can be activated at many levels. The development of a cultural cluster depends crucially on the capacity of policymakers to achieve a change in the relations and governance of the tourist sector. Issues regarding policymaking and implementation will be addressed in section 4.4. Information and communication technologies are tools that may dramatically improve the conditions for strategic networking, as they instil cultural empathy among once disconnected sections of the tourist system, at the local and global scale.

4.1 Managing Tourism in the Space

The vicious circle scheme develops in steps. When the critical threshold of the accommodation capacity of the city is violated, increasing demand levels lead to changes in the spatial and market structure of the tourist industry, which ultimately cause a decline of its competitiveness and – in the long-run – affect urban sustainability. The key concept is that the dispersion of tourism in the periphery of a heritage destination cannot be sustained, as it implies a change in the budgets and expenditure behaviour of visitors. However, such change can hardly be avoided. The question then is how to manage the growth of tourist regions while minimising the negative effects, and instead exploiting the opportunities opened by the involvement of larger portions of territory in the provision of tourist products. To sum up, we need to pass from the management of visitors’ flows in a destination, to a more comprehensive, integral approach to metropolitan or regional management and marketing.

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4.1.1 First step: carrying capacities and tourism management

The first step of the vicious circle is associated with the saturation of the city’s accommodation capacity. Pressure from tourist flows on the accommodation sector will not be perceivable until occupation rates are at their maximum level (usually an occupation rate higher than 80% is interpreted as such to allow for a structural vacancy level). A strong market will cause prices to increase, and even before hotels and other accommodation are full up, some visitors will be driven to change their plans and stay overnight at a certain distance from the destination (or give up their travel plans altogether). As a result of this simple market mechanism, a segmentation of the market would ensue. Visitors with lower budgets will tend to give up central accommodation, and start to visit the city as excursionists.

The literature (e.g. Deprest 1997) suggests that it would be possible to act both on the capacity and on the flows themselves to achieve compatibility between demand and supply. However, demand-side or supply-side strategies would be appropriate, depending on the source of pressure and the structure of the destination. It is useful then to distinguish different instruments (cf. Tab. 6.i).

In the initial stages of a destination life-cycle, when tourism development is relatively young, there might be room for enlarging the city's accommodation capacity, either through the conversion of historical buildings for tourist activity, or through new building activity at the edge of historical neighbourhoods. The initiative for such supply-driven policies at this stage comes mainly from local private ventures in expansion, or from outsiders who see market opportunities in the city. In that way, the revenues from tourist activity increase and become internalised in the local economy.

At the “maturity” stage, consolidated tourism growth and internal market articulation may require making room for emerging visitor segments that would be excluded from the existing accommodation structure. Thus, investments could be channelled to the provision of adequate facilities for low-budget, young, active, and environmentally aware tourists and groups. This softer form of supply-side policy requires a certain degree of public intervention, as private operators might be unwilling to invest in the diversification of the supply structure in a stage where profits from traditional sectors are high and possibly growing. For more profitable market segments (e.g. health and spa facilities) the organisation of such projects might be the result of public-private partnerships. As a result, the public sector may solve a typical market-failure problem by increasing the overall level of profitability of the local tourist industry, which is now able to “capture” some market segments offering facilities that would not otherwise be supplied.

.

Tab. 4.i - The first step of the vicious circle and tourism m

anagement strategies

Type of policy Context

Implem

entation Initiative

Outcom

e Im

pacts

Hard supply-side

policies Take-off and grow

ing stages of destination life-cycle

Re-conversion of

historical buildings; new

building activity at city's edge

Private; public sector has to prepare urban planning tools (e.g, city m

asterplan and conservation fram

ework)

Increased accom

modation

capacity; increased mass

of local tourism

economy

Increased tourist pressure on city centre from

overnight staying visitors, low

er stress from

excursionists

Soft supply-side policies

Maturity stage of

destination life-cycle D

iversification of accom

modation

opportunities through adaptation of buildings for specific m

arket segm

ents

Public-private, to be achieved w

ith partnerships (PPPs), tendering and m

arket operations

More diverse

accomm

odation structure

Increased capacity of the destination to accom

modate

different segments, low

er stress from

excursionists, higher degree of involvem

ent of public sector in tourism

activity

Soft demand-side

policies Excessive crow

ding, strong seasonal and spatial concentration of visits

Incentives to more

sustainable visitation through, e.g., traffic regulation, decentralised attractions and events, strategic m

arketing

Public, mainly soft

managem

ent tools, pricing policies, m

arketing. Require the

co-ordination of tourism

stakeholders

Less concentrated visitation in tim

e and space

Less obtrusive visits, dim

inished traffic and pedestrian congestion, low

er costs associated to seasonality; higher tourist traffic in non-central, residential areas

Hard dem

and-side policies

Excessive crowding,

saturation of "physical carrying capacity” of the site

Regulation, zoning,

quotas on access Public; requires policing and enclosing (sections of) the city centre

Limited num

ber of visits to the city centre

Self-selected visitors flows,

often drives weaker segm

ents out of the m

arket, possible im

pediments for com

muters

and residents, difficult enforcem

ent in intermediate

situations

86

On those considerations, tourism management must revert to demand-side strategies. The number of tourists that visit the destination can be regulated or limited so that demand in excess of the accommodation capacity does not translate into more day-trips 35. In a softer approach, demand-side policies may seek to limit the impacts from excessive visiting through active management strategies. The assumption is that visitors can be hosted in the city centre above the accommodation capacity, provided it is possible to avoid or ease the most negative aspects of tourist pressure, such as traffic and pedestrian congestion. A variety of tools are available, depending on the source of the problems. Thus, traffic congestion from inflow and outflow of tourist vehicles in the city can be managed through a strict traffic plan including access and parking pricing. Pedestrian congestion can be eased by providing pedestrian areas, passageways and decentralised itineraries. Such strategies recognise that visitors’ flows could in fact be managed, or encouraged to utilise the city's resources and public spaces in a more “tolerable” way.

Specific problems are represented by the management of seasonal flows, and by daily peaks in visiting. Such problems may be a concern specifically for medium-small destinations that attract visitors only in particular periods of the year, and less so for large cities that receive a constant inflow of visitors throughout the year. Concentration problems, whether occurring in the span of the year or during the day, may be solved through wise destination management. In the former case, a policy of events, as well as marketing campaigns promoting off-season visits, can help to spread the pattern. If congestion is essentially a daily matter, traffic regulations and plans that spread the physical impacts from inflows and outflows of tourists can improve the capacity of the city to accept great numbers of visitors. In some cases, increasing the number of entry points to an historical neighbourhood can ease the traffic pressure on some streets and passageways to the benefit of commuters and residents. decentralisation of some tourist attractions may also help to achieve a better spatial balance in tourist congestion. Though most visitors would go on visiting central areas in the daytime, an increased spatial complexity of the tourist supply would break down simple visiting patterns and resolve the most acute traffic problems (see Figg. 4.1 a-c, where thicker arrows correspond to heavier traffic flows).

Options for policy could be severely limited by the structural features of the heritage city. If, for instance, the destination is an island, or it is connected to its outskirts only through a limited number of fixed links (as is the case in Venice and in walled towns with just a few city gates), the mobility patterns are a to a large extent a “given”. The existence of one “big” attraction compared to other less known cultural and tourist assets is not easily dealt with either by standard marketing efforts. If tourist pressure continues to violate the physical carrying capacity, damages to the physical sphere of the urban fabric may start to show, such as wearing and erosion of the monuments, accidents, confrontation between hosts and guests, noise, etc. In these cases, tourism management is forced to regulate and control excessive tourist pressure through hard tools such as zoning, prohibiting and limiting the access to central areas or districts. But these instruments are difficult to enforce in practice because of most urban resources are non-excludible, both practically and legally.

35 It can nevertheless be decided whether some structural level of extra-visits from those who do not stay in the city overnight is tolerable, as the exercise of Canestrelli and Costa (1991) suggests.

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Fig. 4.1 a – Visitor mobility with one central tourist area and a limited number of entry points

Entry point

Entry point

Main square, tourist compound

Fig. 4.1 b – Visitor mobility with one central tourist area and more entry points

Entry point

Entry point

Main square, tourist compound

Entry point

Entry point

Fig. 4.1 c – Visitor mobility with different attractive locations and more entry points

Entry point

Entry point

Main square, tourist compound

Entry point

Entry point

Decentralised attraction

Decentralised attraction

Decentralised attraction

88

Moreover, as will be argued later, to regulate tourist flows in this way is politically problematic and determines some unwanted side-effects (impeded resident and commuter mobility, lack of empathy between host and guest communities, discard of weaker visitor groups, bad publicity for the city, etc.) that may be as harmful to the city's development as tourist pressure itself.

“Traditional” tourism management generally ends there. The general belief is that preventing visitor flows from exercising excessive pressure on the city’s physical and intangible environment achieves a more sustainable urban development. However, this belief does not take into account the strategic reaction of the players – visitors, operators, and institutions.

4.1.2 Second step: spatial partnerships for the management of the tourist region

The second step of the vicious circle comes into action as far as the regionalisation of tourism implied by the saturation of the accommodation capacity in the first step of the circle has not been eased through appropriate policies. In that case, the regional diffusion of tourist activity determines the mode of visiting the city. Smaller, compact and mono-nuclear tourist regions generate less problems to heritage centres, because time-budget and information asymmetries are more limited in that context. However, this is not always the case. The existence of attraction poles within the region creates distinct spatial patterns within FTRs, with the formation of secondary destination areas and complex interactions among the FTRs. To manage such spatial relations within regions is more complicated than to manage tourist flows within the city, because it involves:

•= long-term development processes, indirectly and seemingly hardly correlated, in different places and under different jurisdictions;

•= a plurality of different, and possibly conflicting, objectives of public bodies at different levels;

•= a number of local and non-local private operators;

A heritage city may moreover have poor negotiation power in comparison to to larger administrations when it comes to regional planning. However, governance is evolving towards ways that enable even smaller administrations to achieve some regional objectives, for instance, through the establishment of territorial pacts or public-public partnerships and the organisation of thematic “authorities”. Within metropolitan areas, a priority would be to manage tourist traffic (both incoming and moving around the area) with a plurality of objectives:

•= guaranteeing high standards of quality for visitors, in particular international visitors;

•= effectively connecting the various nodes of tourist activity (historical centre, airport, station, main accommodation districts, cultural centres in the hinterland);

•= supporting the organisation of “regional cultural itineraries”;

•= separating tourist traffic from resident traffic, price-discriminating visitors who are more willing to pay than local residents;

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•= creating a network of “information points” (for instance, at bus stops or at ticket-presale points) supplying news on tourist attractions, events, and special offers, and allowing advance bookings.

Such actions, which need some form of partnership arrangement between the administrations involved, would be helpful towards more sustainable visitor mobility within the region. Seasonal variations in capacity would not affect the normal operating cost of a resident-oriented transport system. Moreover, the financial burden of organising access to the centre of the FTR would be redistributed among the administrations involved. Finally, the system would make it possible for visitors to acquire some advance information about their visit, linking it to travelling decisions and making it easier to consider “peripheral” visits.

Other regional partnerships would be helpful to achieve “spatial management” objectives, such as the set-up of a regional marketing corporation promoting peripheral or less known cultural assets. Partnerships for regional branding are quite common in destination areas where there is a plurality of complementary centres. They make it possible to reach the mass required to propose sophisticated and diverse products (think of some “food and wine” destination regions in Italy and France, for instance). In the case of a mono-nuclear tourist region, such partnerships are less easy to organise because of the inherent divergence in objectives between administrations. However, strong leadership from the heritage city could convince other administrations to join in, even if it means though participating in some of the investment costs, thus achieving a higher profile as tourist sub-destinations within a regional system. More in general, regional planning could greatly enhance the “spatial balance” of tourist regions, identifying particular areas that would be fit for developing accommodation and other attractions in close connection with the heritage city. The regional authority could facilitate business ventures in these regions with fiscal and financial instruments, provided such business contributes to the general management objectives of the FTR. Such special tourist zones could be located close to the main tourist transport links to the city, thus greatly enhancing the efficiency of visits to the centre.

4.1.3 Third step: quality and performance of the tourist industry

If regional unbalances persist, and the functional basin that serves a heritage centre is diffused and ill-organised, asymmetric information and strong constraints on the time budgets are likely to emerge. A policy of information and quality management can then help to prevent a “quality cutback” response from tourist operators. The aim should be to break the endogenous mechanism that first transforms excursions into uninformed visits and next lowers the quality profile of the destination, as analysed in the reputation model of Ch. 3.3. The city thus regains scope to offer higher levels of quality (or lower prices for given levels of quality) whatever the visitors' mix. There are two types of policy that can alter or reduce the effects of information asymmetries: (i) Regulation; (ii) Information policies.

Administrations can enforce or favour high quality with the appropriate regulatory instruments. The most common are the patenting of operators and the fixation of quality labels. In the first case, only operators who abide by minimum levels of quality, or accept a price list for items of given quality, are given the opportunity to stay in the market. In the framework of the reputation model of Ch. 3.3, this is equivalent to fixing some “minimum quality”. In the model, increasing the minimum quality (s0), and the associated cost of

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production (c0) would reduce the mark-up that is necessary to sustain a high-quality strategy. In the long-term setting, it means that the decision to lower quality will happen later in time. That is to say, in the short term, the result of enforcing minimum quality is to make the destination competitive, but in the long term, this strategy could be not sustainable if the information remains asymmetrical. A more promising alternative is to induce the supply of high quality by labelling. Labels are commonly used as a signalling tool: they reduce the uncertainty among consumers by enabling them to distinguish high quality from low quality prior to the purchase. In that way, producers induce segmentation both in demand and supply between high-quality and low-quality operators. By granting labels to those operators who accept to provide high-quality goods at given price levels, the city administration prevents the tourist market from re-orienting towards low quality as a generalised profit-maximising strategy. The problem in this case is to define and control quality levels; the monitoring costs could be very high especially in face of a wide variety of products that only in part are considered “tourist goods”.

An alternative strategy to favour high quality is that of recouping the information asymmetries by supplying information to visitors with limited time-budgets. The city planners can organise information campaigns that may be addressing the following themes: �� Efficient organisation of itineraries (including advanced booking). An interactive system,

either human or computer-aided, may provide tourists at information kiosks and main terminals with tailor-made information on cultural attractions, recreation, walking tours, transport and events, given their preference, profiles, time and budget availability. The system achieves the redirection of part of the visitor flow towards those attractions or transport modes that would otherwise have been discarded for lack of information.

�� Traffic information. Signalling situations of high congestion by specific attractions and supplying a list of less crowded alternatives with the help of information points, digital screens or more sophisticated WAP and GMS technology would prevent excessive congestion on peak days, achieving an “intelligent” redistribution of the visitor flows on the territory.

�� Pricing and quality. Public authorities can make the pricing strategies of tourist operators more transparent, publishing prices in guides and on promotional web-sites. Visitors are thus able to make informed consumption choices, getting to know less central but more convenient outlets and activities. Obviously, this requires to a large extent the co-operation of the operators who need to accept having their prices published.

4.1.4 Fourth step: integrated management and cultural planning

In the last step, the assumption is that the vicious circle is exercising its full effects. Faced with the generalised decline of tourism quality in the centre, visitors reallocate their time and financial budget. They can do this by day-tripping to the city rather than staying there for the night. In that way they contribute to the dynamics of the vicious circle. Visitors do that because they compare the utility derived from saving on accommodation with the utility derived from being in the centre, which is a function of the overall perceived quality of their experience. Therefore, raising the level of utility from the consumption of central tourist goods would redress the balance towards central stay-overs, preventing the feedback mechanism from operating. Given that the private sector’s strategies are largely out of the

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control of the public sector, the challenge is then how to make sure that the cultural system becomes more efficient and conducive to a balanced organisation of the visits on the territory.

The idea is that if the cultural system works as a catalyst for a sustainable use of the city, rather than passively adapting to the impulses coming from the ill-functioning tourist market, all the steps of the vicious circle mechanism are attacked simultaneously. This matter is also connected with the revenue-generating capacity of the cultural system. In section 3.4 it was argued that the long-term scenario of tourism development is highly dependent on contextual conditions that determine the resilience of the system. The financial fitness of the cultural system is one such condition. The argument goes as follows. If the managers of heritage could turn its intrinsic qualities to account, generating the revenue needed for its preservation and promotion independently from central transfers and revenue redistribution within the tourist economy, then the historical centres would remain attractive even in the face of quality decline in the tourist market. Moreover, there would ensue a self-selection of the visitor mix towards those high-paying, quality-rewarding visitors that are also the ones more likely to choose central accommodations for their visits. It would be an endogenous “brake” to quality decline in the model of section 3.3. However, the historical heritage, because of its characteristics of merit good, is clearly the weakest link in the chain. Therefore, strategies that support a strong performance of the cultural assets of the city have to be diverse and complex. We may list the most promising:

•= Strengthening the “systemic” nature of the cultural sector. A co-ordinated marketing strategy and communication increase the efficiency in the provision of cultural products of different nature, addressing target markets in a coherent way. This requires the formation of partnerships between the main owner and managing institutions of the cultural assets. Commercial strategies could be made more coherent even in the absence of such agreements. For instance, promoting off-season events or ticketing main and peripheral attractions with the help of multiple pass cards, would yield a more balanced spatial organisation of the visits, increasing the profitability of peripheral attractions. The unified financial management of the cultural system would permit to some extent an internal redistribution of resources towards the weaker segments of the cultural supply, allowing a higher degree of innovation within the system.

•= Diversifying the cultural supply. This would increase the city’s appeal for visitor segments that at present are not attracted or less willing to pay for visiting the existing attractions. Coupling heritage with other forms of cultural production could achieve desirable results. Think of selling “traditional” heritage in combination with visual and performing arts, or hosting cultural producers in under-utilised historical buildings. Organising thematic events where “new” forms of cultural production are promoted in combination with the historical features of the destination could channel the interest attention of new segments of the visitor market towards the destination. It is the case of heritage cities like Bruges or Weimar hosting the European cultural capital event.

•= Increasing the quality and service levels in museums and other cultural resources. Cultural attractions have a value that needs to be transformed into financial resources, generating the resources that are needed for their conservation and for opening them to all social groups. One good way to do this is to organise around the core cultural supply the supply of additional elements that are charged for at market prices: cafeterias, art galleries and bookshops, electronic archive services, etc. For instance, many museums now allow

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“virtual visitors” of the Internet to access the digital reproductions of their collections and to download some of the documents for a fee. In that way, the capacity of the heritage to generate value is greatly enhanced, because the demand basin becomes “global”, and is no longer associated with a physical visit. Indeed, timing and congestion are no longer constraints on access. Rather than chasing people away from museums, such strategies are in fact likely to make culture familiar to some segments of the demand that are hardly accustomed to museum visits. Their chances of becoming cultural tourists in the future will be enhanced. Facilities for accessing the heritage and the collections must be excellent, such as good lighting, multilingual explanations, comfortable facilities, flexible terms for groups and families, advanced booking, highly segmented pricing with rebates for disadvantaged groups, facilities for the elderly and disabled, a friendly environment. All these elements draw visitors closer to collections and attractions, increasing their willingness to pay and enhancing the revenue-generation capacity of the heritage.

•= Increasing the capacity of visitors to interpret and assimilate culture. The assumption is that visitors who are aware of the cultural and symbolic value of the heritage are more willing to reward it. Moreover, an integral comprehension of the role of specific cultural assets in the construction of the city as an historical and cultural place increases by association the curiosity towards other parts of the heritage, adding value to the whole system. Therefore, city planners should care about informing visitors prior and during their visit by printed and electronic means. To signal the heritage and highlight its contextual links with respect to itineraries and other assets is also important for raising the awareness of visitors. The media have the precious task of informing the public of the importance and context of a special event or a recent discovery. Interpretation centres are physical places where the visitor can have access to the information. However, it is not always easy to draw visitors there, so it might be opportune to deliver such information in creative ways (see the example of the Virtual Heritage of Venice, in section 5.4.2).

•= Developing cultural attractions in strategic locations, even in the periphery of the tourist region. The location of cultural assets, facilities and information points is crucial to a revenue-generating strategy. Concentrating all these facilities in one spot of the historical centre will reduce the opportunities of visitors to go around and check different locations, and is likely to generate congestion. In bottleneck situations, part of the potential for revenue generation is lost and people just wander around without actually visiting anything. So, the non-fixed elements of the cultural cluster should be relocated throughout the city in strategic positions wherever there is a high probability of increasing the economic impacts. New museums, theatres, and workshops for artists can be established in locations at the city’s edge, for instance in abandoned industrial premises, in order to enlarge the cultural landscape in a city centre and regenerate marginal areas. However, cultural attractions should also be developed in the periphery of the tourist region, allowing for a certain “thematic” link with the main destination. In that way, the cultural function is dispersed in space, in association with the physiological dispersion of tourist facilities due to the constraints of the central resources. If tourist benefits cannot be kept concentrated in a centre, it is a reasonable suggestion that costs should also in some way be spread across a larger area. However, this should not be the main argument for decentralising the cultural supply, the less so since it would be opposed by free-riding administrations unwilling to take over the burden of unnecessary (from their point of view) investments. Rather, they should be convinced that they have something to gain

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from becoming tourist attractions themselves, participating in a regional system organised on many poles. In fact, it could be argued that a multi-polar cultural cluster is certainly to be preferred to a functionally fragmented region with a cultural agglomeration in the centre and an anonymous and merely rent-exploiting periphery. The positive influence of peripheral tourist attractions on the quality of life of the regional residents should be clearly communicated.

4.2 A “Decision Support System” for sustainable tourism in heritage cities

If the problems with tourism development in a destination could be exactly associated with a step of operation of the vicious circle, it would be relatively simple to pursue specific policies directed at breaking the link that feeds the mechanism. For instance, step A of the vicious circle reveals crucial in all those situations in which saturation is easily reached. In a similar fashion, prescriptions can be derived to address the subsequent steps of operation of the vicious circle. Before proceeding in that vein, we need to call attention to some methodological subjects. One fundamental assumption following from the structure of the vicious circle is that if the transmission mechanism between two successive steps of operation is broken, the cycle will be prevented from exercising its full effects, and decline can be avoided or delayed. It is then necessary to have a method on hand to “interpret” a certain stage in a destination’s development in the context of the vicious circle framework, and to derive a “policy rule”.

4.2.1 Necessity and sufficiency of the vicious circle framework

First, it must be ascertained whether this approach satisfies a necessary condition. Could unsustainable tourism develop in situations that are not treated in the vicious circle scheme? We have to be pragmatic in answering this question. We are likely to fail covering the whole range of possibilities with unsustainable tourism development. If we consider the two angles on sustainability that we have for the moment kept in the background, the physical-ecological and the socio-cultural, we may find situations in which spatial-economic arguments are not the main issue 36. On the other hand, the field of observation can be conveniently restricted to a certain typology of cities and a certain geographical context, with little loss of scientific poignancy. Therefore, when confronted with the typical tourist-historical city in Western Europe, it can be reasonably argued that spatial questions issues are “the” node of sustainability. Cultural or ecological matters are no less important, but they can be re-formulated in spatial terms and

36 This is the case of destinations that are ravaged by prostitution, or of places with a strong regional or ethnic identity that gets depleted when faced with the pressure of global tourism. Sites in different parts of the world are struck by sustainability problems that are to a large extent independent from the spatial characteristics of tourism development. For instance, heritage cities on the southern bank of the Mediterranean basin cannot put to value their heritage because of a shortage of primary resources (e.g. water) for a viable tourism development, and because confronted with cultural friction between host and guest communities. South Asian and Latin American cities often solve the cultural confrontation problem through the “ghettoisaton” of tourism, a spatial response itself to the tensions generated by tourism development, that however brings forward cultural impoverishment and alienation. Metropolitan areas and coastal resorts may particularly suffer from the negative externalities imposed by tourism activity to other sectors of the economy.

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attacked along the lines of spatial management. For instance, cultural impoverishment is strongly linked to a poor impact of the tourist economy on the local socio-economic environment. If local resources are not put to account, and tourism does not bring benefit to the social fabric, social disruption, displacement and emigration may ensue, with serious consequences for the cultural liveliness of places. Environmental problems may be connected to excessive traffic from intense tourist commuting. And so forth.

Another question refers to the sufficiency of this approach and requires further argumentation. It is obviously an artifice to associate every heritage destination with a peculiar step in the operation of the vicious circle, and to assess the intensity with which the mechanism may operate. Most cities would experience more than one – if not all – of the phenomena associated with each step of operation. The challenge is then to assess which one is stringent: which one, when broken, leads to a sustainable path of tourism development. And, should that not be possible, to set up a complex policy response that targets more than one link of the vicious circle.

4.2.2 The Pressure-State-Response model

The Organisation for Economic Co-operation and Development (OECD), in its widely-utilised guidelines for the construction of environmental indicators, proposes a general framework, the State-Pressure-Response model (PSR). This model is based on the causality principle: human activities exert pressure on the environment and change its qualitative and quantitative aspects (state). Society and the eco-system respond to these changes through systemic modifications and with general economic and sector policies (OECD 1993: 9), which feed back to the characteristics of the system and pressure factors.

The PSR framework can be adapted to the problem investigated by this thesis. The vicious circle can indeed be conceived of as a complex sequence of strategic reactions following from pressure factors on the state of the tourist system. Figure 4.1 highlights the parallel structures of the vicious circle scheme and the PSR framework. In the first step, tourist demand that cannot be accommodated in the existing capacity levels (state) becomes excursionism, through the emergence of a Functional Tourist Region (response). Because of this, in the second step, the resulting information and time budgets of visitors (state) are eroded to the point that operators strategically change their behaviour to increase their profits (response). In the third step, as price-to-quality ratios come to increase (state), visitors modify accordingly their consumption decisions (response) allocating more of their budgets to secondary goods and subtracting from cultural consumption. In the fourth step, the destination specialises in low-quality / low-budget market segments; “central”’ visits become less attractive than peripheral ones (state), leading in the fourth step of the vicious circle to a wider, more dispersed tourist region. Ever-lowering time budgets and a lesser appreciation for quality (as in the model of section 3.3) mean that fewer and fewer resources are channelled into the heritage. Because the maintenance of the quality of the system depends on the resources channelled into the heritage, which are endogenously determined by the endogenous evolution in visitors’ behaviour, a persisting vicious circle that alters more and more the spatial organisation of the tourism activity in the region would ultimately deplete the very property that makes the destination competitive.

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Controlling pressure factors

Adapting system state Organising and chanelling response

POLICY

Tourist pressure Accommodation capacity Emergence of FTR

Tourist attractiveness of site

Tourist pressure Time and space pattern of visits

Tourist pressure

PRESSURE STATE RESPONSE

Price / quality of tourist experience

Resources channeled into heritage preservation / competitiveness of the tourist region

STE

P 1

STEP

2

STE

P 3

STE

P 4

Changes in consumer behaviour

Changes in market structure (quality, prices, location)

Tourist pressure Competitiveness of “core”vs. “ring”

Structure of FTR

Fig. 4.1 - The vicious circle adapted to the PSR framework

Policy (lower part of Fig. 4.1) has a complex role. It can intervene with on pressure factors – for instance regulating the flows or redistributing their pressure on space and time. It can modify the state of the system so as to make it more viable for tourist frequentation, for instance enlarging capacities or reorganising the supply of tourist assets in the space. Finally,

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it can guide and channel the response of players to a desired pattern, for instance providing incentives for less concentrated and more informed visits, or restructuring the administrative system that regulates tourism management and cultural policy.

Described like this, the vicious circle model lends itself to be “measured”. The activity of each step of operation of the vicious circle is signalled by some indicators, in terms of pressure factors, alterations to the state and response levels. In Section 5.4, after empirical observation, we will identify the most useful and handy. We will look for measures to assess whether one or more of these steps of operation are in fact active, and how the variables concerned vary in response to such pressure. The analysis of selected portions of the territory with the help of indicators represents a useful tool to test the assumptions of the model presented and connect it to policy objectives. Innes and Booher (1999) argue that the development and dissemination of indicators should be seen as a standard element of urban governance, improving cohesion between players and achieving the required adaptability of the system to the impulses coming from a dynamic environment. This requires widespread agreement upon their reliability and meaningfulness. The judgement can come from experts' opinions or result from a local discussion with the actors involved.

The spatial scale of the measurement – that is the boundaries of the area to be monitored and the punctuality of the unit of observation – should be defined carefully. Our approach requires that a regional database is available that contains details of the inner city as an administrative unit, and possibly neighbourhood- or area-disaggregated data. GIS technology may provide the information needed at the relevant spatial scale, allowing an immediately understandable representation of the values. However, seldom do official registered data correspond to the adequate administrative scale; so that in most cases recourse must be taken to occasional survey data. In building a set of indicators, reference can be made to the extensive literature and experience developed in Local Agenda 21 projects. Once the most relevant information has been selected, it can be reduced to a workable set of significant measures. Complex synthetic indexes can be built by aggregation and combination of basic indicators, to make he benchmarking apparatus more manageable.

4.2.3 A backward-operating policy rule

The idea of a “Decision Support System” to guide policy efforts in a systematic way, through a learning process that utilises a reduced number of information, is gaining ground in management research. Policymakers need tools to interpret standardised information, and to prepare timely action, in a user-friendly, easy-to-understand way.

The causal structure of the vicious circle suggests an iterative use of the indicators along the lines of the PSR model. We propose a backwards-operating policy framework. In this scheme, the first thing to evaluate is whether the fourth step of operation is active, by analysing the relevant indicators. If it is, a policy programme aiming at reversing such an unfavourable trend can be implemented. The plan may range from a thorough “rejuvenation” policy – as suggested by life-cycle theorists – to measures that re-address the spatial balance of the costs and benefits arising from tourist activity. The success of such a programme does not imply that the pressure towards unsustainable tourism is definitively eased. If the third step of operation is also active, the pressure for a spatially unsustainable tourism development will still be there, demanding further action.

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The argument can be applied backwards until the original source of spatial instability of tourism development is reached. Now, life-cycle theorists would just be concerned with preventing decline, addressing the declining stage of the cycle, and suggesting only that tourism policy should be anti-cyclical in the previous stages of growth and expansion. A more integral approach, on the contrary, enables policymakers to address development problems right from the beginning in a truly proactive way.

At any step of the circle, strategic action can prevent the mechanism from operating, thus keeping tourism development within the limits of sustainability. As we have highlighted before, not all the links in the vicious circle will be active at the same time, and tourist policy should focus on the “most advanced” level. If a city is already experiencing problems with the capacity of its attraction (for instance, stagnation in the tourist receipts, or other signals like a decrease in repeat rates), then all four links of the circle might be active. In that case, policy must address all of them with an integral programme that includes reforms in the cultural management system, controls on market structure and performance, regional management of accessibility and hospitality development, and the “normal” measures of tourism management such as controls and active management of the carrying capacity and the seasonal pattern of peaks.

Policymakers should be aware that even if no sign of decline is manifest, there may still be a tension from the first three steps of the vicious circle that ought to be dealt with to prevent decline at a later stage. Therefore, destinations in which:

- the share of excursionists is high, and/or

- the quality profile of tourist products is low, and/or

- the system of cultural attractions has low performance levels,

should be alert and attack such problems in conformity with the framework given by the vicious circle mechanism. Conversely, note that a persistent violation of the carrying capacity is perfectly compatible with “some form” of sustainable tourism, as long as it does not translate into a declining quality of tourist products.

Indeed, rather than as a cycle, the process of tourism development could be more conveniently interpreted as a “development spectrum” (Prideaux 2000) or a “paradigm” (Hunter 1997), depending crucially on the strategies of agents involved in tourism development (Haywood 1986), and calling for a variety of policy responses. A foreseeable recession of tourism must be counteracted by a backward attack on all the nodes of the vicious circle until the original source of pressure is identified and solved. The pressure towards unsustainability corresponding to the activity of one of the first three steps of operation, is eased through specific and appropriate tools. After the policy intervention, its effectiveness would be indicated by a decline in the value of pressure indicators and a change in the value of response indicators.

4.3 Tourism and urban regeneration. Towards the “cultural-tourist cluster”

In the first part of this chapter we have proposed a framework for tourism management. The methodology has been derived from the vicious circle scheme: a policy attacking the subsequent steps that bring about unsustainable tourism development, prevents the

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mechanism from exercising its full effects. The decision support system presented in this section 4.3 is a simple set of rules based on easy-to-measure indicators.

We now wish to raise our policy theory to a higher level. How can tourism turn from a source of instability for the urban economy into an element of urban regeneration? From section 2.5 we know that Van den Berg (1987) and Van den Berg et al. (1995) consider tourism a strategic element for the regeneration of city centres, because it is synergetic to the enhancement of the quality of life, and to the development of those soft factors of attractiveness that are the most relevant in the contemporary organisation of the economy.

However, the conditions for a balanced and sustainable integration of the cultural-tourist function in the urban environment are often missing. The vicious circle illustrates how unsustainable dynamics may ensue. The relations within the tourist system may inherently produce unsustainable developments. So, parts of the tourist chain have to be restructured for tourism to become an engine of urban regeneration. That is particularly true of heritage cities that do not have sufficient mass and diversity in functions. The policy approach is critical. Sectoral, top-down approaches are clearly unfit, because they do not take the complex interrelations between tourism and the local economy and society in due consideration.

The policy theory based on the vicious circle can also be used to highlight the consequences of partial or misplaced approaches to tourist policy. It serves to demonstrate what are the main organisational barriers to be overcome to make tourist policy effective. Against such traditional approaches we propose a “synergetic” model of urban management. The concept of “cultural cluster” illuminates how synergies may develop at all levels of the regional economy. The challenge is to integrate traditional approaches to sustainable tourism (largely based on regulation and logistics) in a new strategy that fosters co-operation and cohesion between the agents involved, building “incubators” for resource-based development.

4.3.1 Why traditional approaches fail: demand- and supply-side policies

The objective of the regulation of visitors’ flows is to smooth out the stress created by tourism, and to reduce the congestion in destinations. In the last few decades, that approach has been a popular and immediate reaction to the huge increase of mass-tourism in heritage destinations, as captured for instance by stress ratios. Zoning and restrictions were popular among Western-European cities in the years of “hard planning”, from the 1970s to the mid-1980s. Cities adopted master-plans that dealt with tourism as a sector to be isolated from others, both physically and functionally. The implicit goal of that policy was to prevent tourism from conflicting with the residents' quality of life, minimise the occasions of “confrontation” and reduce the costs of tourism management. Whole quarters of the inner cities were given up to tourism development (an exemplar illustration is the “concentration model” in Bruges (Jansen-Verbeke 1990)), while others were reserved to residential use. Though such “segregation of functions” is not unreasonable in some situations, visitor management through regulation has had limited success (Van der Borg and Gotti 1995). In fact, it relies on three somewhat unrealistic assumptions and a major weak point. These assumptions are:

(a) the greatest part of visitors are “staying” (residential) tourists, so that regulating the number and location of accommodation automatically constrains tourist demand;

(b) visitors are sensitive to price barriers;

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(c) restrictions are fully enforceable.

All these three statements have proved wrong or seriously faulty. The 1980s saw the boom of short trips and the popularity of “commuting visits” as evolving transport technology shortened travelling times. As a result, limiting accommodation capacity and visitor facilities is no longer a constraint for demand, which is free to expand almost boundlessly in tourist regions reaching beyond regional or national borders. In that context, policies aiming at regulating the flows by focusing only on central capacity paradoxically select against the most sustainable form of tourism, the paying, residential one, while favouring the more mobile (and costly) crowds of day trippers. That was typically the problem with important heritage cities such as Venice and Bruges. We should add that not every type of zoning or enclosing is allowed or enforceable: national constitutions guarantee free access for all citizens to historical places. Besides, soft management tools, wherever they have been applied – like differential pricing and traffic restrictions – have been easily side-stepped by excursionists, who walk, consume packed lunches, and visit only those cultural attractions that are for freely accessible. The patenting policies introduced in some countries are very clumsy; infractions are easily dodged and barely sanctioned.

When reviewed in the light of the vicious circle framework, such policies are observed in fact to restrict the carrying capacity of a city rather than enlarging it, and to reduce the flexibility of visitor management strategies. Rationing the supply does not guarantee that those who do gain access to the resources are those that the city would welcome most; indeed, the odds are that they are not. Even when tourism management does attack the problem of capacity, focusing on the first step while if the city faces one of the last steps of the vicious circle, the result can only be only would ineffective or counter-productive. In fact, the existence of a wide tourist region represents a “degree of freedom” for visitors to escape, for instance, differential pricing that is not implemented at a wider regional scale. In general, strategic behaviour – both on the demand and on the supply side – would make regulation ineffective. In other words, traditional demand regulation does not take into account the main aspects on which the vicious circle model is based: the “regional dimension” of tourism development, the strategic behaviour of the players (on both the demand and the supply side), and the high degree of segmentation in the tourist market. Hence the need to address the complete circle; demand-side policies should be carried out at the appropriate spatial scale (step B) with instruments that neutralise strategic response (step C).

However, there is a higher-order weakness in policies based on restrictions. For cities that wish to compete on different markets, it is increasingly inappropriate to present the bad side of their face, which could discourage and repel potential visitors. To give an example: how can a city hope to attract business travellers while at the same time making it difficult for them freely to move and consume the city's resources? And can a city justify itself as a convenient residential location if its reputation is that of an expensive, awkward place for strangers? Increasingly, the feeling is that the marketing of a city's potential has to involve all the elements that contribute to its quality and image; its visitor-friendliness (Russo and Van der Borg 2002) is a crucial one.

For all these reasons, some active city managers and tourism authorities in Europe and elsewhere have recently focused on supply-side policies. The rationale is that if it is very difficult to enforce tourist demand, appropriate organisation and branding of the tourist products would stimulate developments in “valuable” markets. Tourist demand is no longer

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taken as given, but as something that must be bred in time and guided; the quality of information and the means of their diffusion have become the critical element of a tourist strategy (Laws et al. 1998: 2).

Reasonable as this attitude may be, some criticism is warranted regarding the feasibility and sufficiency of this new approach. In fact it presumes that tourism policy can plunge wholeheartedly into “promotion” without any attempt to attack the elements of distortion in the market by some form of intervention or re-structuring. Such an approach requires resources to be available for investments in new attractions, that there is capacity to plan and co-ordinate tourist growth, and that efforts are made towards a customer-oriented communication strategy. Needless to say, these elements are often lacking in local administrations. Their budgets for culture and promotion are shrinking, and their marketing orientation is generally poor (Garrod and Fyall 2000). Only a few cities in Europe have been effective in organising new routes and products with a significant impact on the composition and spending pattern of the visitors' flow (among which Antwerp, Bilbao, Naples). Most cities cannot even persuade private and public cultural institutions to co-ordinate calendars and events.

Supply-side policies could indeed prevent the vicious circle developing to its full effects (step D), but they do little to attack the underlying factors that generate excessive tourist pressure. At the very least, cultural management should also deal with the re-organisation of the cultural industry across space, which is impossible without a higher level of co-ordination between local administrations in the necessary financing and accessibility management.

A final argument is that the sustainability of tourism is not sufficient for urban sustainability. That is to say, even if a city is very successful with its tourist sector, and manages to increase the receipts from tourism while maintaining a high quality level of products and attractions, this does not guarantee that other sectors will score well. In fact, they may well be crowded-out by well-paying, revenue-generating tourist activities, again exposing tourism itself to the unstable structural economics that contribute to a sharp life-cycle.

4.3.2 Restructuring the tourism-city relation

Tourism should not develop in a void. Efforts should be made to link it closely with the growth of other sectors of the economy and the society, with for instance care for an equitable distribution of the resources generated in tourism and a balanced functional mix of the city. Hunter (1997) highlights that some form of “bias” towards the tourist economy should not a priori be ruled out, as long as it does not conflict with the very elements that make a city attractive. However, even in the case of the tourist-historical cities of Ashworth and Tunbridge (1990) – in which some tourist functions are perfectly consistent with the maintenance of an attractive historical city fabric – the fact should be recognised that poor integration of tourism in the urban economy and weaknesses in the development of other sectors may lead to disruption. On one hand, maintaining a strong “internal” demand reduces the degree of disturbance in the market by reducing the inflationary tendencies associated with step C of the vicious circle. On the other, the development of alternative sectors is clearly expedient to the diversification of the supply and the generation of additional value. Information and communication technologies (ICT), for instance, offer plenty of opportunities for “restructuring” cultural attractions towards a more sustainable business model (Buhalis 1997).

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Policies aiming at harmonising the growth of tourism with the general development of the economy of the heritage city imply the endorsement of a “synergetic”, integral development model, with the following characteristics:

- it focuses on the entire chain of value of cultural tourism;

- it manages tourism development at the appropriate spatial scale;

- it seeks to maximise the impact of tourism on the other sectors of the urban economy;

- it is instrumental to the development of high added-value sectors;

- it aims at optimising quality rather than maximising quantities;

- it generates the conditions for the development of self-regulating networks of entrepreneurs, rather than regulating tourism in a top-down approach

The problem of restructuring the links between players within the chain of value of cultural tourism can be approached with the help of some arguments from the theory of industrial organisation. Organisations see networks and inter-firm co-operation as a convenient arrangement in the face of increasing volatility of the markets and rapid technological change (Van den Berg, Braun, and Van Winden 2001), and accordingly base their location and strategic decisions. Clusters can be defined as networks of organisations evolved by distribution of work, whose production processes are closely linked through the exchange of goods, services and knowledge. The term “cluster” refers explicitly to the local and regional dimension of networks. The suggestion is, in a nutshell, that a clustered organisation of production may lead to positive technological and financial externalities, due to the traded and untraded (e.g. ideas, skills, information) flows between organisations (Van Dijk and Sverrisson 2002). While the former crucially depend on a certain degree of co-operation of the actors involved in the regional production, the latter are also present in a strongly competitive environment (Krugman 1991). Three forms of inter-organisation relationships that characterise industrial districts are recurrent in clusters:

•= vertical (dis-)integration between economic units placed at different stages of the chain of value, which improves the competitive advantages of chains through entry barriers and uncertainty minimisation;

•= horizontal co-ordination between units placed at the same stage of the production process (strategic alliances), which leads to cost efficiencies;

•= diagonal alliances, by which economic units operating in different production processes co-operate to realise complex products and services (product differentiation, globalisation).

Obviously, more realistic forms of cluster organisation derive from combinations of these basic categories, on different scales 37.

37 Moreover, in the case of flexible industries – such as the information-intensive sector of cultural services – their evolution is consistent with the different stages of the life cycle of an industry (Audretsch and Feldman 1995).

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Now, in view of the spreading and “banalising” tendency that is associated with tourism development, a reorganisation of the cultural sector in heritage cities along the lines of the “cluster economy” would seem desirable. Heritage cities would at first sight seem natural contexts for the development of clusters in which the cultural tourist sector is organised in a network of entrepreneurs that “makes mass” to take full profit of the great market potential of central areas and delivers high-quality, high added-value commodities. Authors like Heilbrun (1992), Dziembowska-Kowalska and Funck (2000), Hitters and Richards (2002), have analysed the location strategies of cultural operators in cities, and found evidence of a strong propensity to concentration. Clustering in city centres, they affect the attraction capacity and competitiveness of the historical centres, triggering a virtuous stage of development of the urban economy (Wynne 1992; Lavanga 2001).

A stage of urban development can be envisaged, in which tendencies to myopic behaviour and spatial dispersion are overcome, and tourism becomes instead the spearhead of regeneration strategies that revive the importance of historical urban centres as innovative and attractive milieus. However, the fact that clustering refers not only to co-ordination in the industry but also to physical contiguity should be a reason for concern in the light of the analysis of tourism development carried out so far. In fact, “concentration” of tourist attractions was one of the aspects that is believed to cause malfunctioning, and we have argued in this chapter that in the last steps of the vicious circle development cultural activities should be dispersed throughout the region to achieve a more balanced use of the territory. Therefore, the matter of industry location should be handled with attention. If cultural clusters are developed on a “metropolitan” scale, the arguments for tourism restructuring would still hold, the more so given the range of opportunities for interaction and co-ordination offered by new communication technologies that make physical proximity not so important. Indeed, Scott (1991, quoted by Van Dijk and Sverrisson 2002) is prone to define clusters as features of social networks topologies 38.

It is time to consider whether a cluster of cultural activities can be identified in the typical “heritage tourism” destinations and their regions, and to what extent, if present, it is beneficial to urban sustainability. Authors like Britton (1991) and Tremblay (1998) argue that the tourism industry is only “partially” industrialised. Another suggestion is that the cultural-tourist industry at present resembles more the “Fordist” paradigm (possibly evolving towards more flexible production arrangements in some parts of the filière, determining a “neo-Fordist” environment), than the post-industrial flexible, innovative and consumer-oriented model that characterises successful cities and regions in the global economy (Ioannides and Debbage 1998; Russo and Van der Borg 2000; Shaw and Williams 1998; Van der Borg et al. 1998). This peculiar structure of production relationships is determined by the very nature of historical cities. We recur again to the model of tourist-historical cities of Ashworth and Tunbridge (1990) to argue that in such places, a substantial part of the tourist economy is not embedded in an economic environment in transition towards post-Fordism. At the same time, it is not self-sufficient enough to be completely moulded by the strategic behaviour of

38 Physical proximity is only one among other possible relationships (van Dijk and Sverrisson 2002); the example of virtual communities of producers on the Internet illustrates how the concept of “proximity” is also in evolution.

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international actors – as would happen, for instance, in the case of a theme park or a leisure resort (Haywood 1998).

The economic weight of the packagers of tourist goods dominates the process of production, offering little chance of co-ordination to local distributors, hardly organised and hyper-specialised. To offer a package including a gondola tour in Venice is still more profitable to the industry than to offer “alternative itineraries” or visits to niche museums as long as there is no strategic co-ordination between them and the local cultural sector. The latter is not prone to forming strategic alliances with the tourism industry for a variety of reasons. First, its “mission” is not explicitly commercial, and cultural producers are reluctant to enter a global market where they feel they may lose control of the quality and property of their artistic production. The same applies to museum organisations, especially in the public sector. Secondly, non-profit industries – for instance those providing access and interpretation of public goods such as historical assets – lack motivation for product innovation and market strengthening. Thirdly, international actors hardly see the advantage of investing in alternative attractions, as the image of the destination is clearly geared to the “historical” character of the experience, and space for new developments in inner cities may be scarce. On the whole, the “primary tourist sector” proves not suitable to face the challenges of international competition and to maintain the comparative advantages enjoyed by heritage cities. This may eventually weaken the social and economic bases of the local economy. In terms of cluster viability, heritage cities are not a conducive environment for the dissemination of knowledge from fledged and trans-national companies, as in the model of Malmberg et al. (1996, quoted by Van den Berg, Braun, and Van Winden 2001). The concentration of cultural-tourist activities proceeds at the expense of innovation and social cohesion; in such circumstances, a crucial component of the cluster economy as described in the works of Bianchini and Parkinson (1993) and Zukin (1995) cannot emerge.

4.3.3 The cultural-tourist cluster: framework of development

We have already argued that the implementation of tourism management strategies requires a higher level of co-ordination in the industry, at all levels of the filière and in the territory. So, a major concern for policymakers should be how to support the restructuring of the links within the industry to bring forth a more co-operative, flexible, innovative, and spatially balanced organisation of cultural tourism. Fig. 4.2 illustrates the potential linkages within the cultural industry and between it and the rest of the environment.

The first set of relations (A in the horizontal block arrows) to be re-shaped in the cultural cluster are the intra-industrial linkages – defined as strategic alliances – among the actors in the cultural sector. Co-operation and process co-ordination can be established between the various fields of cultural production. These include heritage sites, the performing and visual art organisations, the institutions behind “minority” cultures, the creative industries of hi-tech and hi-touch, such as design, fashion, software developers, and the events industry, as a whole set of mass-mediatic and logistic organisers. There is a wide variety of possible combinations and linkages between these fields. For example, new technologies are applied for the creation of services or products that are supplied together with the traditional visit to the cultural attractions to elicit cultural content (“virtual” access to the heritage, audio-visual and multimedia supports to cultural experiences, etc.). The system of traditional attractions can supply attractive locations for congress and meetings; the same venues can host and deliver

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the sub-cultural production to large audiences, achieving the diversification of the target of cultural tourism. Hi-touch industries can support pooled markets that are highly attractive for business tourism, and events (e.g. fashion, music and fairs); design and software can be utilised for developing new and highly specialised niche segments. Cinema festivals can present the output of local schools or organise special sessions about local culture and landscapes.

tourism distribution, tourism agents,commercial offices of museums, sellingpoints, etc.

business sector and facilities,representation (headquarterfunction), congress sector

tourism/travel industry

education, R&D,libraries, archives

public administration,urban management &service and transport

public sector and no profit

banking, insurance,telecommunications,advertisement, press

strategic, global, command functions

B C

cultural industry

traditional culturalattractions (fine arts,architecture, culturalheritage)

new cultures (hi-tech & hi-touch,sub-culture, pop)

events industry,sports,performing arts,cinema

A A

B B

Fig. 4.2 - Restructuring the links in the cultural-tourist cluster

The proximity of these activities is fundamental, for the open circulation of the human skills from one sector to the other and the reciprocal evolutionary “contamination” it implies (the fast growing cultural district of global cities offer plenty of examples: the East End of London, the Village and more recently Tribeca and Nolita in New York, Kreuzberg and Mitte in Berlin, etc.). It appears that the “relational” aspects of the cluster may be more substantial than the market and cost factors (Hitters and Richards 2002). However, specialisation according to different “orientations” can result in a wider territorial articulation of the cultural

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sector. We can indeed imagine that traditional arts can be concentrated in high-status historical neighbourhoods while newer, younger forms of cultural production are fit for location in peripheral areas, where they find suitable spaces (old warehouses, former production locations) and scenarios. In that way, they contribute to the revitalisation of marginal neighbourhoods, bridging peripheral communities and central sections of the city and extending the “spectacularisation” of the city to the whole urban agglomeration.

The second set of relations (B in Fig. 4.2) are the vertical linkages identifying supplier-producer-consumer co-operation at any level of the chain of value of local cultural production regarding product development from the basic inputs (education, research), the administration and the services to the distribution (in and outside the traditional tourist channels) of the assembled cultural product. The formation of partnerships and multi-purpose co-operation arrangements are central. Strategic product disintegration (as opposed to a trend towards integration that increases the economic “rationality” of the enterprise but undermines its socio-cultural embeddedness) allows the cultural cluster to adapt to the changing nature of the tourist market. The issue is the “glocalisation” of the value chain of tourism, with a closer co-operation between trans-national operators and local dealers who also act as fundamental “brokers” between the tourist market and the local communities, increasing the cultural sustainability of tourism development. Obviously in this case physical proximity is less important and the spatial articulation of the value chain is clearly fit for a regional diffusion. “Functional specialisation” should be avoided; however, elements of the supply chain should be present across the territory to prevent rigid functional relationships leading to the vicious circle dynamics. Instead, the chain should be restructured as a regional cluster where primary, secondary and ancillary products are disseminated throughout the region.

The third direction of networking (C in Fig. 4.2) regards the formation of diagonal partnerships between the cultural industry and other strategic sectors. In that way other industries seek to diversify their product lines, adapting to the local conditions (Poon 1993; Buhalis 1999). From the point of view of local businesses, such partnerships can be seen as successful efforts to reach a global market through non-local linkages, taking advantage of the knowledge that trans-national corporations instil in the local environment once they get rooted there. Again, there is room for a spatial management of these alliances. To the extent that some TNCs engaged in the production of travel services find it convenient to open representation offices in historical inner cities, this can positively affect the image of the city as a representation site for international, command functions. In the end, this may be a stimulus for attracting other global functions possibly disconnected from tourism, bringing forth a more diverse and global economy against the dangers of a tourist “mono-culture”.

Now that the potentially virtuous relations between agents of the local economy have been identified, we now turn to the policies that may favour the formation of clusters.

Promote the concentration of cultural producers

Dispersion may not be an item for discussion when we are talking about heritage cities (whose population can be as low as 68,000, as in Venice). However, advanced producer services are more likely to find a relevant demand basin in industrial rings than in the inner city, which tends to be less dynamic, accessible and flexible especially at the later stages of the urbanisation cycle. As a consequence, small and medium-size companies face a location dilemma: follow the market (and disperse to elsewhere in the region), or keep to a

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concentrated pattern? Producer services – especially if interesting for the cultural specialisation of the city – should be given the opportunity to find favourable locations in the city centre, through financial incentives, physical investment in easily accessible lots, and flexible land-use regulations. Hopefully, in this way the conditions can be generated for strategic inter-form alliances and knowledge sharing in the cluster. The regeneration of former industrial areas such as cultural quarters or meeting centres is a typical element of contemporary urban planning in metropolitan areas 39.

Promote knowledge creation and circulation

University research should be directly linked with the pattern of urban production and provide a continuous input in terms of best practices and innovative management models. In principle, sub-cultures and new cultures should integrate the educational programmes of higher vocational schools and human-science academies; business applied to arts and non-profit institutions should receive due attention. R&D in the same fields should be publicly supported to sustain urban growth; organic links should be organised between policies of culture and policies of training, education, research and development (Bianchini and Parkinson 1993). To tie knowledge to places is indeed one of the great challenges for contemporary urban areas, and demands a comprehensive approach to education and economic development.

One should not underestimate, then, the importance of training for tourism management (Comacchio and Van der Borg 1996). An educated workforce and an entrepreneurial community are essential conditions for mature destinations to deliver high-quality products and to sustain tourism growth without losing out to more competitive destinations where prices are lower. Knowledge circulation is also favoured by information policies (for instance, with the institutions of “city portals” in the World Wide Web for local firms and citizens), and by a labour regulation that favours mobility but also gives incentives to local firms and workers.

Promote the local ownership of cultural production and consumption facilities

Vertical and diagonal integration in the cultural industries means that cultural supply may be incorporated in the strategy of large companies (e.g. financial and banking corporations). For instance, small record labels, which often act as R&D centres in the music industry, spotting and cultivating new trends and styles, are eventually affiliated to the major multinationals. The resulting problem is that «cultural production and consumption are increasingly externally owned and controlled, thus failing to achieve the regeneration objective for a locality» (Williams 1997: 141). Much emphasis will need to be spent to find ways in which indigenous enterprises can be supported and developed; at the same time denser inter-industrial linkages will result, with increasing employment multipliers (indirect and induced).

The municipality should set standards with the introduction of a “locality certification” to original local products; public offices and services should be designed to meet the requirements of the industry. A public policy for patent protection in the development of new cultural products and the delivery of innovative services, though limiting the extent of

39 It is also gaining ground also in historical cities such as Venice or Bruges, where agglomerations of cultural businesses and attractions are being developed in, namely, the old potters’ district and the Giudecca island.

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competition, can increase the stimuli for innovation and foster the realisation of advanced organisational forms between producers.

4.4 Governance and networking for sustainable tourism

The framework for policy proposed in section 4.2 attacks the conditions that may lead to unsustainable development. In section 4.3 the argument was that the development of cultural clusters can ultimately offset such tendencies, making tourism an integral element in regeneration strategies. Knowing what to do, however, is not sufficient to achieve sustainable tourism. Especially in moving from policymaking to policy implementation, other conditions should be taken into account; the decisional environment is of crucial importance. Lundvall and Johnson (1994) pointed out that in the passage from a hierarchical, Fordist economy to an open and complex knowledge society, the know how and who matter more than the know what and why. This means that in the governance sphere the organisational aspects become at least as relevant as the political agenda itself. For public organisations, to empower those units that can do the proper job may be better than doing it themselves. Rather than rowing, governments should steer for the pursuit of the common good (Osborne and Gaebler 1992). The matter of governance is then not restricted to public administrations, but one for all the players who have the interest, the skills and non-codified knowledge, to contribute to. However, as Grant (1994) and Flyvberg (1998) have powerfully demonstrated, in this complexity the common good can easily get lost, and particular, vested interests may prevail. A special ability is required from public organisations to bring the right actors together, set the rules, and control the outcomes.

In particular, the public management strategies for the development of “creative clusters” have gained recent attention (Hitters and Richards 2002). The transformations that should take place within cultural tourism have been sketched, but more light needs to be shed on the organisations and conditions that may support this restructuring more effectively. First, a number of conditions may facilitate policy changes at the local level, bringing about a style of governance more conducive to the development of cultural-tourist clusters. Secondly, the relations between the local and global dimensions of cultural tourism development need to be restructured, and the regional-metropolitan level is a strategic space for such restructuring. Finally, the widespread adoption of tools such as ICT for the management and organisation of the cultural-tourist cluster may strongly support this process, making it easier for local and non local actors to be connected, and favouring the restructuring of the local heritage industry.

4.4.1 Organising change: conditions and actors

For tourism to be sustainable in the long term, there must be the capacity to enact policy changes that anticipate and counter-balance the spontaneous trends at each step of the vicious circle and at each relevant spatial level. However, this is not to be taken for granted.

Heritage cities are particularly critical grounds for matters of governance, because of the likeliness of confrontation between groups with diverging interests (outsiders vs. residents; resource-protectionists vs. speculators; high-quality operators vs. “hit and run” businesses; etc.). Our argument of Ch. 3 stresses that such conflicts are also spatially articulated. The functional tourist region is in fact a “strategic space” where sustainable development is challenged and possibly re-composed. The local, regional and global dimensions all call in a

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variety of players, administrations and organisations that are to various degrees involved in the decision-making process. It has already been pointed out how strategic behaviour from players is likely to erode the long-term competitiveness of the city. What conditions, then, may bring about a more conducive context for policy changes, and enhance the governance of tourism development? We will use the scheme developed by Van den Berg et al. (1997: 4-15) to answer that question (cf. Fig. 2.9, p. 52).

Setting the vision and strategy

The elaboration of a vision for the heritage city and its region as a high-quality, sustainable tourist destination area is a critical first step, enabling local governments to organise diverging interests and inertial administrations around a common, shared strategy. The public sector can steer the development process by guaranteeing the primacy of collective goods in policy goals. At the same time, the private sector – including non-local actors – can develop a sense of social responsibility, acknowledging the strategic importance of a visitor-friendly, high-quality and attractive environment for competitiveness (Van den Berg, Braun and Otgaar 2000). A pre-requisite is a strong capacity among local governments to communicate the problems and present envisaged solutions – the creation of forums and audits to involve a large number of citizens, institutions and the business community in the decision-making process can prove strategically important.

Unfortunately, the progress with vision creation and bottom-up government practices that has been adopted by a number of local governments in complex policy fields like the environment, is not commonly observed in the domain of culture and tourism. The fragmentation of responsibilities on matters of tourism makes the task particularly difficult. Diverging interests can emerge even within the administration, for instance between transport and culture, so it is hard for a city to speak with a single voice. The problems are exasperated when moved to a horizontal, regional scale where adjacent local governments are more likely to compete than to collaborate for sustainable tourism, and a centralised government that manages the whole system on the adequate spatial scale is virtually non-existent. The private sector as well seldom presents itself as a cohesive interlocutor.

It is necessary, then, to identify clear objectives for tourism policy, which ought to prevail over particular interests. The discussion forums in which such matters are debated are fundamental for ideas to come up. They may range from informal, bilateral meetings to more structured and recurrent discussions. On such occasions, policy-makers emerge, in the sense that those who have the skills, power and information to contribute, have a chance to become partners or subsidiaries of the governing bodies for a number of strategic actions. The community should be given an incentive to participate actively so that envisaged solutions receive the necessary societal support at the implementation stage and the information on tourism policy is disseminated more effectively. The Local Agenda 21 programmes carried out in many cities in Europe and elsewhere offer examples of how to organise an open, participatory discussion on local priorities and strategies for sustainable development.

The organisation of events like the European Cultural Capital Year might be an ideal opportunity to start a wide-range discussion of a focused objective. On such occasions, cities are confronted with the challenge of restructuring the cultural sector of the city to make it attractive for international visitors. The momentum created by the event itself is important for the formulation of a clear vision of the city as a cultural cluster; strategic networks may then

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emerge to carry out specific projects. However, from experience, the post-event stage has to be carefully managed in order to lend continuity to the organisational improvements. In fact, cities like Glasgow, Antwerp, and Lisbon have been particularly successful in that respect. More recently, cities like Rotterdam and Bruges have frankly utilised the ECC event to change their image as cultural destinations and restructure the local networks of cultural operators.

Leadership and strategic networks

In a network perspective, a critical success factor for the development of a cultural-tourist cluster is the existence of at least one partner who takes the lead in formulating and communicating the opportunities, identifying compatible partners, setting the agenda, and facilitating the process of drawing up strategic and operational plans. A strong leadership guarantees both the easy start-up and the continuity of the process. Policy leaders generally come from the public sector. In the case of heritage cities, key people are expected to come from the world of education and research in human sciences. Art, culture and philosophy scholars may be particularly good at “reading” the role of culture in the organisation of the local society and economy, and translating it into real growth opportunities.

In other industries, it can be more straightforward to progress from individual projects to a critical mass of work that includes projects or contracts at varying stages in their production cycle. That seems to be less frequent in the cultural industries, perhaps owing to the small scale and the self-employed character of typical cultural businesses (Hitters 2000). The organisations of cultural tourism producers tend to be highly unstable: planning is hardly done at the industry level. Governments can do little to promote co-operation if the local environment is poorly cohesive: they have to convince each single player involved of the advantages of a high-quality tourism development based on culture. On a higher level, new facilities and institutional arrangements can be planned to serve as “mediators”, increasing the “connectedness” of the cultural system and providing elicitation and dissemination of the cultural contents generated locally.

Capacity building also requires human skills and entrepreneurial capacity. Decision-makers have to be professionally trained to grasp the complexity of such contexts as tourism destinations, and organise the strategic networks in which the vision concerning the development strategy for the community is built, and implemented. Local entrepreneurs have to learn to consider the local environment as a resource to valorise through business opportunities, but not to destroy. For that reason, it is critical that local higher education institutions are sensitive to the problems and requirements of the local community. That is not always the case. Because in most European countries higher education is linked to national powers, the institutional contexts have often caused cities and universities to be “deaf” to each other.

Spatial-economic conditions

The pressure for policy change and strategic market planning does not always come – or is perceived as such – until particular spatial-economic conditions justify the need to consider opportunities and threats for the urban economy in the face of the new challenges. In other words, favourable contexts or the lack of external pressure may hide the necessity for action and delay the consideration of recovery policies. Of course, this depends on the overall

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situation of the local economy and the relative size of the tourist and cultural sector. The more tourism-dependent the local economy, the more the local authorities should be aware of the necessity of control for the sustainability of the development path and if necessary correcting the route. Heritage cities are a clear example of a context under the threat of unsustainable dynamics triggered by tourism. A successful tourist sector may paradoxically delay alerting signals, so that it becomes particularly important for the local authority to monitor at any time the exact allocation and spatial distribution of the costs and benefits associated with tourism.

However, a more general problem makes itself felt. Local governments are an expression of citizens, and a portion of the residents – sometimes the majority – are interested in short-run policies, pushing to the extremes the intrusion of the tourism industry. On the other hand, the most progressive and dynamic groups of city users (such as the students and the business people, not to mention the future generations) have no say in the political game nor are they financially affected by policy decisions.

Political and societal support

The administrative system should be designed to meet the challenges of the complex dynamics of the global economy and society. Ever more frequently it becomes apparent that the organisation of the local political process does not always meet such requirements. The experience with networking styles of government may be at its infant stage. The conflict is shifted from general aims to procedures, and more and more the political forces represented in the local institutions fight – united but pointlessly – against the "enemy" represented by superior government layers and private-sector formal and informal organisations.

In that respect, loose forms of governance may make the difference. Hitters and Richards (2002) analyse what kinds of organisation and management approaches support creative and “sustainable” clusters. They conclude that unplanned, bottom-up clustering initiatives may be more appropriate to maintain some blend in functions and high level of embeddedness with the local socio-economic environment, which is functional for the integration of cultural clusters in urban regeneration strategies.

The last element to consider is the societal support to sustainable cultural policies. This is not ensured for the same reasons as described before: the city users to which the bulk of the reforming effort is directed, such as skilled workers, students, new citizens, tourists, have no voice in the formal institutions, though they control a considerable part of the economic power. On the other hand, the residents perceive this as a danger of "invasion" or "colonisation", and react by upholding conservative principles against change. To ensure political and societal support, the policy leaders should act in two directions: first communicating clearly and thoroughly their project, secondly granting some membership right to those they want to attract, for instance making some of them (e.g. university students, full-time non-resident workers) participants in democratic consultations. In softer terms, they would be wise to organise recurrent surveys of the visitors' (tourist and non-tourist) expectations, perceptions and impressions about the locality, in order to possess the information needed to redefine the product offered by a marketing approach.

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4.4.2 Building cultural empathy in the tourism market 40

Organising capacity can coagulate local interests around a vision of a sustainable destination, but how to deal with an industry that is increasingly global and at the same time powerful in shaping local destinies? To facilitate change and bring about fruitful alliances at all levels of the filière of tourism, it is necessary to establish a “common ground”, a cultural empathy regarding the ultimate aims of tourism development and the constraints to which it is subjected.

The challenge is how to convince both insiders and outsiders that their primary concern should be the preservation of the place’s qualities through time. When the focus is shifted to the regionalisation of tourism, the question is how to restructure tourism governance to make it accountable for a larger territory. To the extent that the collaboration of tourism with other sectors of the economy may spur on regeneration, governance is about supporting incubators for local development.

Like any industry, tourism needs profits and investments to grow. However, neither commercial interests nor government entities have the capacity to achieve a reconciliation of the inherently conflicting heritage and tourism. Indeed, authors such as Haywood (1998) and Ioannides (1992) are inclined to link the performance pattern of destinations to the private strategies of multi-national companies. In that context, the feeling is that the very foundations of tourism – and primarily the cohesion within the industry and between it and the host communities – have to change. A solution must be derived from the negotiation between the key players representing both the public and private sectors. As Orbasli (2000) indicates, the relations between the tourism players are both very complex and different from country to country,

«… particularly in respect of the location of power, control and decision making. The total cast of urban management involves numerous players in a variety of roles, from a wide range of disciplines and backgrounds and often with conflicting interests and agendas. (…) The relationships between individual or collective decision-makers can turn to one of conflict or tension. Conflicts originate from known dichotomies and from differing objectives often closely linked to accountability structures» (Orbasli 2000).

The decision-making process involves outsiders (boardroom) and insiders, local agents of change with an understanding of the local environment. A delicate balance has to be struck between insiders and outsiders for effective management, in order to maximise the benefits from development. Education is a key factor that stimulates and empowers local communities to the “wise” use of the heritage. Only insiders can be fully aware of the risks of an unbalanced use of the cultural assets. At the same time, the cultural empathy that is implied by cultural tourism needs to be expressed. Knowledge and pride of their own heritage, as well as the recognition of opportunities that the encounter with guests offer, are also a product of discourse and self-recognition. The same item, consumed or experienced by unaware or fully acknowledged visitors, has its value drastically changed and influences in a completely different way the configuration of the market.

40 This section is largely based on Go, Lee, Russo (2002).

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The way in which the information is put together and brought to the visitor is crucial. Increasingly, visitors wish to be part of the process of elicitation and elaboration of contents, rather than being told what they must see or like. Interactivity – or the involvement of visitors and locals in the co-determination and appreciation of culture as a living process, rather than the sterile identification of the present with the past, as most of the times heritage tourism is (mis)understood (Trotter 2001) – is thus a crucial requirement for holistic, sustainable tourist experience. The host-guest encounter or “hospitality”, whilst complex in nature, represents an «institutional device to cut down the time needed to merge cultures, and to integrate alien mindsets and costumes» (Ciborra and Lanzara 1999).

Through education and ethics, the cultural identity (as embodied in the heritage) and the local skills become assets for development. The valorisation process involves several actors, who can be listed according to their degrees of “insidership”. The natural insider is the host community, who is directly invested by the indirect effects of the process of tourism development – in positive and negative ways. However, they can be severely limited from enjoying the direct benefits of revenue and job generation by the extent to which the tourism industry is disconnected from or poorly articulated in, the “local”. Outsiders are found both within the private sector as well as the regulators; governments and public bodies may be less concerned with the local than with the regional / national relevance of tourist activity.

Insiders and outsiders express a variety of interests that are often hard to reconcile, with the consequence that more adaptive, connected and culturally cohesive organisations impose their own strategies. However, cultural empathy resulting from an ethical, informed use of the assets, shifts the interest of private organisations. Quality is the dimension along which the big “quantities” of mass tourism become unnecessary even to the greediest operator. The process of putting together and supplying high cultural services is one in which considerable skills and “localised” knowledge are required. The local operators have an advantage on the anonymous, ubiquitous tour packager, because they are part of the culture that is being reproduced (Shaw and Williams 1998). They can be conceived of as the “heritage industry”, in charge of preserving, transmitting, processing and accumulating the cultural capital. This industry, small in size, information-intensive and creative, is made up of “heritage entrepreneurs” deeply embedded in the very social and knowledge environment in which the cultural capital was accumulated through the ages. For Richards and Hall (2000:1), «the rationale of sustainable tourism development (…) rests on the assurance of renewable economic, social and cultural benefits to the community and its environment». They are responsible for keeping cultural tourism linked to the economic production of cultural contents. In that way, local culture becomes a generator of value and is kept alive41.

In a network perspective, a critical success factor for the model sketched above is the existence of at least one partner who takes the lead in formulating and communicating the opportunities, identifying compatible partners, setting the agenda, and facilitating the process of formulating the strategy and operational plans. We will refer to this role as the Heritage Entrepreneur, who is the engine behind the partnership dynamics. The Heritage Enterprise enhances economic growth and the quality of local life by balancing the interests of three

41 However, as Dahles (2000) points out, to identify the conditions under which the small and medium sector operators become real engines of local development requires a deeper understanding of the social meanings embodied in the production, exchange and consumption of the tourism product.

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major stakeholders: residents who want to raise their standard of living through economic growth and safeguard their quality of life through environmental and heritage preservation; visitors who seek a memorable experience, mainly for recreational purposes; the travel and hospitality industry seeking to maximise profits.

The travel industry, in its turn, has to be connected to such heritage entrepreneurs. Enlarging the range and ‘depth’ of experiences available to visitors, and empowering local economic operators, does not mean reducing the profitability of the industry, but rather, redesigning the system of value generation and commercialisation of the cultural assets, in order to grant durability to the economic enterprise of tourism. In that process, the great players of international tourism should recognise the convenience of taking a step back from frontline operations, and connect with local entrepreneurs in designing local strategies and delivering the cultural contents. Such restructuring within the chain of value of tourism achieves greater efficiency and equity on both the local and the global scale. In fact, it provides wider opportunities of development to locals, contributing to a greater cultural understanding that is a necessary condition for cohesion and sustainability.

All this should start from the recognition that local and global concerns are inextricably intertwined. Because tourism increases the value of local assets enormously, it generates the finance that are needed to keep such cultures alive, at the same time providing the basis for personal fulfilment and – consequently – the conditions for continuous cultural and social vivacity. If successfully inserted in a process of tourism valorisation, heritage – and with it local identity and pride – is kept alive. From the standpoint of cultural life, tourism that is both “need-led” and “demand-led” stands the best chance of benefiting the host culture, because it builds on the local uniqueness and seeks solutions that are compatible to the “sense of place” and responsive to the needs of the local community. What is more important in the context of this study, it allows “marginal” players in the globalisation process to become relevant again, establishing a comparative advantage deriving from “uniqueness”, “distinction”, “knowledge”.

4.4.3 Information and communication technologies for restructuring tourism

The discussion in this chapter has highlighted that a key problem in building a sustainable tourist cluster is the lack of cultural empathy among a) tourists; b) tour operators; c) local tourism/cultural organisations; d) local hospitality providers. The relations that deserve special attention as the most challenging are: - a ↔↔↔↔ c: how can tourists be brought to greater cultural awareness and appreciation? - d ↔↔↔↔ a: how can local hospitality providers (in particular SME's) get a better marketing

empathy with their clients?

Beyond diverging economic interests and differences in roles, it is believed that mutual understanding can be increased with the proper educational and relational tools, which may exploit the possibilities offered by information and communication technologies (ICT). The multi-system nature of ICT appears promising as an instrument to stimulate positive side-effects to tourism development and to improve the co-ordination of the involved actors and institutions. It is crucial to that effect that the ICT apparatus is diffused to the tourist sector as a whole, connecting cultural producers and linking the local network to the tourist industry.

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ICT applications may be developed at various levels. In the framework of Buhalis (1997), ICT re-engineers the functions of intra-organisation, inter-organisations and customer relations, bringing the three dimensions closer together with enormous impact on costs, productivity and quality (Fig. 4.3). By allowing a direct contact through web, information kiosks or emerging intermediation platforms like interactive digital TV and mobile technology (Buhalis and Licata 2002) between networks of producers and customers, ICT facilitates smart packaging and marketing of the destination. In intra-organisation operations, ICT booking and information devices learn the profiles of visitors and their preferences. When used for a high-level segmentation of the market; the system suggests personalised products and itineraries, and offers the opportunity for advance bookings, special offers, and interactive information retrieval. Finally, back-office operations are made smarter as ICT allow joint marketing initiatives and co-ordination between firms, through systems that support integration at different levels of the chain.

Fig. 4.3 – Tourism and information technologies; strategic framework for integration. Source: Buhalis 1997.

In the scope of our study, ICT facilitate both front-office and back-office operations. The former enhance the discriminatory power of both the demand and the supply side, making quality cuts a less profitable strategy for the sector. Firms are instead pushed to compete by uniqueness and content. Un-intermediated marketing relations between producers and visitors erode the “information” and “location” rents on which most of the sub-economy of the

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heritage city thrives; small, peripheral operators can compete with larger, better located incumbents if they can offer more convenient products and a smarter packaging. In the end, the decisional scheme of heritage tourists is also restructured: secondary products can be chosen after, and in function of, the elected itinerary. Therefore, by packaging itineraries and cultural products, destinations can modify the location behaviour of the hospitality industry, leading to a more balanced tourist region. Restructured back-office operations, where information can be exchanged along and across chains, may lead to a more cohesive and integrated industry. The key suggestion is that both culture and IT are embedded, respectively, in a local community and a global network, as opposed to disjointed processes. Computer network technology has revolutionised the management and control of distributed locations of labour across a greater geographic area for trans-national corporations (Souza and Stutz 1994: 255).

The relation between cultural tourism and ICT represents an almost unrivalled opportunity to enhance the performance of business and host communities. The high mobility of ICT capital and its inherently knowledge-based nature allow lower-income cities and regions to “leapfrog” stages in traditional economic development, through investment in human resources. In the process, ICT may favour the reconciliation of heritage and tourism, supporting a process of creative encounter between host and guest communities, through the empowerment of local operators and the building of trust and empathy between individuals and groups within the tourist industry. By this approach, local cultures can “grow” in response to the stimuli coming from the global market – sophistication, participation, interaction, not disjointed, by a creative reinterpretation of traditions and community values. Building on such growth, a virtuous cycle of development is ultimately triggered involving larger regions and interregional networks. Utilising the ICT infrastructure, heritage cities are helped to become more strategic and entrepreneurial in managing their futures. This implies a partnership structure that has the potential to connect and empower actors to share information and to co-operate.

This process is expected to produce a variety of outcomes, which we can synthetically group in guest satisfaction, profitability, and sustainability. These three dimensions of yield result from the encounter of the demand side with the local culture. At the centre there is still the tourist – yet he is no longer a passive recipient of strategies formulated over his head, but rather an aware, active player in the process of co-determination and reward of the cultural values. Guest satisfaction results from the intensity and quality of the cultural experience. Satisfaction is also clearly connected with profitability, through the mediation of perception and commercial strategies – hence the importance of co-operation at different levels in destination marketing. A development that generates profits guaranteeing high levels of tourist satisfaction is sustainable. Sustainability also hinges on identity and environment as ‘constraints’ to growth, but the reproduction of heritage is one dimension of tourist attractiveness, as stressed above, and the environment is a part of a local culture the awareness of which is strengthened in the education process. The generation of employment resulting from sustainable tourism development represents the dynamic feature of cultural empathy between host and guest community: the more connected the two groups, the better chances for locals to develop and put to use their cultural assets and skills, thus triggering a virtuous cycle of growth.

The people, place and visual character that make up host community environments increasingly resemble a non-renewable resource and require careful management to protect,

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conserve and enhance both cultural and economic value through tourism development among other means. And cultural heritage conservation and economic development need not conflict: as long as cultural heritage is integrated in the urban setting, and basic conditions for a balanced tourism development are assured, as suggested in the initial part of this chapter. While the economic-development objectives of the tourism industry often impinge on heritage resources, their conservation is in the best interests of all the participants to the “cultural-tourist cluster”. Today, the essential technologies for the broader application of system dynamics are coming available. In the city of tomorrow, the virtual heritage entrepreneurs could be inextricably integrated in the urban context and interfacing with numerous “glocal” stakeholders.

4.5 Synthesis and prosecution of the research

The lessons derived from this chapter can be summarised in the following statements:

A. Accurate policy actions may bring forward a more sustainable development of heritage cities, acting in an anticipatory way to interrupt the mechanism of the vicious circle whenever the conditions require it.

B. The P-S-R model of OECD is a blueprint for policy. Once indicators are available that signal the “activity” of the four steps of the vicious circle, a backwards-operating policy rule can be applied: any step of the circle that induces pressure towards unsustainable development has to be attacked, until the original source of instability is dealt with.

C. To turn tourism into a real opportunity of regeneration for heritage cities pointing at a relevant role in the knowledge economy, the cultural-tourist sector and its governance have to be restructured. The “cultural-tourist cluster” is an organisational blueprint in which local operators are empowered and synergies are activated at all levels. The metropolitan or regional dimension of the cluster is crucial.

D. To govern the complexity of the heritage city, and foster the critical changes in the tourist system, policymakers need organising capacity. Moreover, cultural empathy should be instilled between insiders and outsiders participating in the tourist system. Advanced relational tools utilising ICT may facilitate those processes and make culture a sustainable business model for the city of tomorrow.

These statements follow directly from the analytic apparatus presented in the previous chapters, and from the applications of concepts such as “clusters” and “organising capacity” to the matter under investigation. However, our theoretical assumptions need to be validated. In the next chapter, we will do that by looking for circumstantial evidence that the relations sketched in the vicious circle model hold against the empirical evidence from a case study.

To the extent that these relations are indeed observed, and the development process in a world-famous tourist destination like Venice can be interpreted in the light of the model, we will be able to answer the research questions presented in the first chapter.

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In this chapter, the “vicious circle” model presented in Ch. 3 and the associated policy framework of Ch. 4 will be illustrated against observations and analysis of tourism development in the city of Venice, Italy. Section 5.1 motivates the choice of Venice as a case study for this research, and sets the investigation agenda. A number of methodological and analytic questions are raised. The structure of the case study reflects the logical framework introduced in the previous chapters. Therefore, after a presentation of the context and problems of the city under investigation (section 5.2), we will look for evidence that the “vicious circle” is operating, and identify the role of key-variables in the process (section 5.3). Finally, in section 5.4 we will assess the shortcomings of tourist policy in recent years, suggesting policy changes that both solve the fundamental problems of tourism development, and prepare the ground for a full integration of tourism in the regeneration strategies of the city.

5.1 Introduction

5.1.1 Objective of the empirical study

This chapter has a double objective. The first is to observe in a real-life case the relations that are subsumed in the vicious circle. Our model includes a number of “steps” or a logical sequence of cause-effect relations between spatial and market variables in the tourist system. By looking for circumstantial evidence that these relations are holding in the case of a famous tourist city like Venice, we expect to generalise some of the model’s implications, providing answers to the research questions into which the existing literature does not offer sufficient insight.

In synthesis, we would like to validate the following assumptions:

a) When the accommodation capacity of the heritage city reaches a stage of saturation, its functional tourist region (FTR) grows and expands at increasing distances from the centre of the region.

b) The structure of the FTR is influenced by the existence of other attraction poles in the same area, and in its turn affects the structure of visitors’ flows in the heritage city: their mix, their logistic behaviour, their time budgets, and their information sets.

c) Faced with evolving patterns of consumers’ behaviour as determined by information sets and logistic characteristics, the supply reorganises itself strategically, through pricing,

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quality and location decisions. The structure of the tourist industry ultimately affects the performance of the local cultural system, determining patterns of use and expenditure.

d) In the end, the diminished quality of the tourist supply feeds back to the very competitiveness of the destination area.

Secondly, the development trends of Venice can be interpreted and benchmarked, and predictions for the future can be derived. In that light, past and recent policy initiatives can be reviewed critically, and a consistent policy agenda may be drawn up for the future. Matters of governance, institutional capacity and the use of technology are also addressed.

5.1.2 Choice of method: case study

The method chosen to validate the vicious circle model is the “case study”, a form of descriptive research that focuses on a small part rather than the whole of the universe of the phenomenon under investigation. In our case, we study in depth the development of tourism in one particular heritage city rather than a generality or a wide sample of cities. A case study aims at holistic understanding of an event using inductive logic, i.e. reasoning from specific to more general terms. This analytic method is particularly suitable for social-science research when comparable experimental data are hardly available. In fact, we look for “circumstantial evidence” to prove that the assumptions of the vicious circle hold. In particular, we wish to observe empirically the actual working of the mechanism of transmission in four steps from the enlargement of a tourist region to its decrease in competitiveness.

As a mere logical framework, the vicious circle model lends itself poorly to statistical validation. The process is a complex one, depending on the interplay of some different variables – spatial, economic, behavioural –, and is largely dependent on the specific structural and historical characteristics of the area where it is developing. Thus, this type of comprehensive understanding requires an in-depth description of the circumstances and an interpretation of the social and economic background. Case-study analysis gives importance to qualitative rather than quantitative information. Therefore, not only (or necessarily) does it address the “how much” or “what” questions, but also, and especially, focuses on the “how” and “why” questions.

The uses that may be made of findings from the case-study analysis are manifold. First, the model can be generalised. By providing evidence for the variables that we have hypothesised as relevant in the vicious circle model, we wish to build an analytic apparatus that could be reproduced and utilised in different circumstances. Secondly, some elements that are overlooked in the construction of a theoretical model, might acquire greater importance and be integrated in the model. Finally, the case study itself can be interpreted in the light of the general laws that we try to validate. In this vein, since the vicious circle is a dynamic model, we can formulate predictions or “scenarios” about the future development of the area under investigation. This matter has autonomous interest because it happens to be a highly contested issue in the case under investigation.

Case studies are likely to be much more convincing and accurate if they are based on several different sources of information, by a corroborating rule (CSU 2002). That conclusion is echoed among many researchers. Selfe (1985, quoted in CSU 2002) argues that because «methods of indirect observation provide only an incomplete reflection of the complex set of

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processes involved in composing, a combination of several such methods should be used to gather data in any one study». The case-study approach offers other points of strength. It is a comparatively flexible method of scientific research, which allows researchers some freedom to discover and address questions as they arise in the experiments. In addition, the looser format of case studies allows researchers to begin with broad questions and narrow their focus as their experiment progresses rather than attempt to predict every possible outcome before the experiment is conducted. Moreover, by seeking to understand as much as possible about a single subject, case studies specialise in “deep data”, or “thick description” – information based on particular contexts that can give research results a more human face. That emphasis can help bridge the gap between abstract research and concrete practice by allowing researchers to compare their firsthand observations with the quantitative results obtained through other methods of research. However, case-study detractors have pointed out a number of weak points that we will keep in mind in developing our story: case studies are difficult to generalise because of inherent subjectivity and because qualitative data – which are indeed part of our analysis – include ethical concerns and interpretative biases that may hinder the accuracy of the analysis.

The choice of a single-case study is dictated by opportunity – the detail and comprehensiveness of the data available for Venice did not allow any meaningful comparison with other cities – but it also has scientific validity. As long as the empirical observations do not contradict the theoretical assumptions, these may be supposed to hold in general. The specific choice of Venice, a true “worst case” of tourism development, has some advantages, as will be argued later.

In our research, there is one specific contestable point that needs to be singled out. We will be analysing and relating events with different time profiles. Some of these data are cross-sectional (e.g. the data on the industry), using information from the most recent census and various surveys; they have been collected at different moments in time according to their spatial reference. Others (e.g. data on visitors) are presented in their historical trends, utilising complete series or successive surveys. Finally, qualitative information is presented, as much as possible, in its historical development. To some extent, this heterogeneity could affect the consistency of our search for cause-effect relations. However, our research does not focus on time dynamics. Rather than a historical path of development, we are looking for clues that, to the extent that the accommodation capacity of the city is saturated and a FTR emerges, and given a certain organisation of the industry on the territory, the subsequent steps of the vicious circle model are likely to follow.

5.1.3 Choice of Venice as a case study

Venice has been chosen as a case study for the following reasons, illustrating the main assumptions from the analytic and policy framework of this dissertation.

a) the case’s susceptibility to generalisation

b) the quality of the data set

c) the intrinsic interest

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Susceptibility to generalisation

When we look for indications that the theoretical model holds, we wish to obtain evidence strong enough to be of general validity in different contexts. In that respect, the obvious peculiarity of Venice is not regarded as a limit to its use as a case study. True, the structure of the city-island in the middle of the lagoon, the delicate interrelations between its historical role, its environment and its cultural heritage, and its internationally established romantic image, make the attraction power of Venice unique, and all its problems more dramatic.

Nevertheless, the uniqueness of the city can be put in perspective. Venice encapsulates and exasperates problems that are recurrent in many other heritage destinations, although to lesser degrees. In that sense, the case of Venice may offer both a testing ground and a worst-case scenario for the implications of the vicious circle developments. No other city in Europe is subject to such pressure from tourism as Venice, nor perhaps are the consequences for sustainability anywhere so serious. It means that any other city that wants to revert to more sustainable tourism development can look at Venice as an example; in terms of policy targets, they can regard the most telling indicators of tourism development derived from this study as benchmark values. At a more general level, Venice also offers a unique example of do’s and don’ts with tourism policy. Though we adhere to the idea that to a large extent every case is unique, the case of Venice represents a convenient application of the policy framework developed in the previous chapter. Any other city can then utilise this apparatus and calibrate it to its specific contexts. What the case of Venice could teach to other cities is how to make policy; what variables to monitor, at what spatial level, what rules to follow, what would be the most likely obstacles to policy, what strategies are the most effective and promising.

Quality of the data set

Tourism in Venice is also a widely studied field. That fact contributes to the availability of a data set that allows us to verify a number of assumptions and arguments of the theoretical framework of analysis. Such a possibility is quite rare in a context in which information on tourism is scarce, difficult to reconstruct, and generally of poor quality. When the scope of analysis is extended to dimensions that escape the standard statistical accounts of the tourist sector, for instance consumers’ behaviour, market structure, quality, and the like, the effort to reconstruct and integrate very different piece of information from a number of heterogeneous sources can be daunting. However, we are confident that the data collected are sufficient to prove some our statements and to proceed to a fuller knowledge of tourism development in heritage cities.

Intrinsic interest

Another fact to recognise is that Venice is an interesting case per se on comparability considerations. Venice offers a palette of everything that the cultural heritage of an enormous range of civilisations has left on this continent. Even if the theoretical apparatus built in the previous chapters sufficed only to find out how to contribute to a sustainable Venice, that would already be an important achievement, because of the importance that Venice bears as a recipient of ten centuries of history, a meeting place of cultures, a bridge between west and east, the cradle of the modern concepts of democracy, multi-culturalism and military power.

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In Venice, the abstract concept of cultural texture is given substance. Every important moment and event in the history of the city has left a patrimony of monuments, objects, symbols, words and costumes that have became integrated with and superimposed on one another to form a completely unique cultural environment and to shape a distinctive social identity. From the religious temples erected to the saints that were patronising powerful families and military leaders in their battles for domination in the Mediterranean, to the precious glass and carvings adorning their palaces, from the paintings commissioned to the greatest European masters to the symphonies of Vivaldi and the plays of Goldoni, from the Napoleonic and Austro-Hungaric memoirs of modernity, arriving at last at the contemporary, politicised working-class culture that transpires in the modernism of Italian painters, in the tumultuous Venetian society of the post-war years, the history of Venice is all in its cultural heritage. And today, this history is in peril, both of being “loved to death” by the untold millions of visitors in an embrace that is as deadly as hardly avoidable, and of dying once and for all with its city, which retains very little of its ancient power and aura. This danger can be practically related to several dimensions. A study that we shall proceed to illustrate has revealed that if the “sustainable use of the heritage” is in some way measured and mapped, the assets of Venice are in fact at such high risk as few others in Europe.

The «Study Programme for European Spatial Planning» (SPESP) was conducted in co-operation between the 15 EC member states in the year 1999, as one of the activities foreseen by the document on «European Spatial Development Perspectives» (ESDP), discussed by EU Ministers for Spatial Planning in June 1997. One of the study's objectives was to identify and categorise areas considered “at risk” for the sustainability of their cultural heritage. This had to be achieved through selecting and measuring indicators, and suggest possible strategic directions, which should be followed up and elaborated in policy terms. Methodological and practical matters are described in detail in Nordregio (2000).

Despite the approximations relative to the scale of measurement, the description of the “European cultural space” according to four indicators42 enables policy makers to identify the areas of potential crisis for a sustainable use of heritage. Particularly interesting is the experiment of combining the indicators so that it becomes possible to classify the European territory in areas where the use of heritage is sustainable and where it is not (see the map obtained in this way in Fig. 5.1). To that end, the areas that score best on the first indicator are selected, and for each of them the scores on indicator 2 and 3 are analysed. The use of heritage is sustainable if the pressure remains low while “touristicity” (indicator 3) is above average. Problems with non-sustainability will arise either where pressure on heritage is extremely high or where the availability of heritage is abundant but the touristicity (and hence the pressure) remains below average.

42 These are: i) absolute concentration of historical assets in a region; ii) relative concentration (assets per sq km) of historical assets in a region; iii) tourist pressure on site (visitors / resident ratio); iv) “touristicity” of site (tourist beds / households).

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Fig. 5.1 - Sustainability of use of the European heritage Year 2000. Source: Nordregio 2000.

In not many NUTS 3 regions do sustainability problems seem to be of particular urgency. This does not, however, exclude the possibility of excessive pressure on specific sites. The presence of some over- and under-exploited areas has, of course, policy implications. Moreover, the proximity of non-cultural but already developed regions (for instance some coastal or mountain areas) is very likely to intensely cultural regions with a low accommodation capacity generates an intense flow of excursionists. That information can be utilised by planners to identify the right spatial scale for the management of regional assets.

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However, the scarcity of homogeneous data concerning the cultural assets forbids a more thorough reading of such complex phenomena. For instance, data about excursionism – one of the worst sources of strain and costs for the heritage sites – are missing from the SPESP study, which relies on official Eurostat data only. However, at the level of a single case study, this important information, as well as many others, can be taken into account. For the objectives of this dissertation, the choice has been to focus on a case of “critical” exposition to unsustainable heritage visits.

In the light of the SPESP study, Venice and its province may be considered a real “worse-case scenario” in terms of tourism development. The area scores among the most at risk in terms of the “sustainable use” of the cultural assets. Moreover, it has one of the highest visitor-resident ratios among NUTS 3 territories in Europe, which means that in principle it stands the highest chances that the events modelled in the vicious circle will develop. This indicator is an objective parameter of tourism development in an area; whenever tourist activity increases, this parameter is very likely to increase as well. Thus, different destinations at different stages of their tourism-development cycle will be characterised by different values of this parameter, but by similar trends, which makes their dynamic comparison possible. They tend to undergo the same events at different moments in time, which explains their structural differences.

From that point of view, the assumption is warranted that this is the ideal resting ground for the model’s assumptions. If the model is useful to understand tourism development in Venice, it can be utilised to interpret what is happening in other destinations with a lower comparable profile, and to formulate predictions of what would happen in the event of increasing tourist pressure.

5.2 Venice: context of the analysis

Tourism in Venice is certainly not a new theme for research. The tradition of tourist studies regarding the city began at the end of the 1970s (COSES 1979) and was lively at the end of the 1980s, when it had to be decided whether Venice could stand the organisation of a mega-event like Expo 2000. Finally, it experienced a new impetus in the 1990s, when the necessity to find a new productive vocation for the city, after the dismantling of most port and industrial activities, required new research efforts based on the concept of “sustainability”. A new growth model was looked for, compatible with the geo-physical characteristics of the city. In that light, the question whether tourism represents a “brake” or rather a “leverage” to socio-economic regeneration, started to be investigated.

The present study connects to such literature, but looks at the problem in a slightly different perspective, with a closer focus on its spatial features and their implications. In a period in which there is talk of reshaping the city's governance at the metropolitan level to deal with its problems on the appropriate scale, the regional interrelations between tourism, culture, and general economic development are a strong theme to go on with.

5.2.1 Territory and population: a region «in pieces»

Venice is the capital city and administrative centre of the Veneto Region, in the heart of the Italian North-East, a macro-area that represents a strong economic sub-system with peculiar characteristics. The Municipality of Venice extends over to 189.4 km2, partly in islands

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located in the middle of the lagoon43, with the historical centre occupying a major cluster of islands totalling 7.6 km2. The rest of the municipal territory comprehends a section facing the sea (“littoral”, two main islands plus an inland neighbourhood that is now seceded) stretching over 48 km2, and a main inland section of 134 km2, which includes a middle-sized city in its own rights, Mestre – 150,000 inhabitants – and Marghera, a smaller town but a major industrial and port area. The municipality of Venice with its main administrative articulations is described in Fig. 5.2 while Fig. 5.3 portrays the historical centre.

Beach area and islandsHistorical Center

Mainland city, port andindustrial area

Fig. 5.2 - Municipality of Venice with main subdivisions

Venice is a well-known international attraction, possibly the most famous tourist city in the world. Yet it is hardly known that its historical centre (henceforth: Venice Historical Centre or Venice HC) in the heart of the lagoon is a “problem area”, whereas its unattractive inland settlement is well integrated in a booming regional economy. With young households pushed out of the centre by inaccessible housing prices and lack of specialised jobs, the population in Venice historical centre declined from 170,000 to 70,000 in half a century.

43 The biggest in Italy, the Venice Lagoon extends over 550 km2, and is connected to the sea through three mouths (Lido, Malamocco, Chioggia).

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Road-rail terminal

S. Mark's SquareMain tourist routes

Fig. 5.3 - The Historical Centre of Venice (subdivided into 21 “census zones”), tourist routes and main attractions

The chart in Fig. 5.4 describes the demographic evolution in the last half of a century. The population path follows a typical pattern that is found in many European metropolitan areas (cf. Klaassen et al. 1989). The city grows in size as long as the availability of jobs in the manufacturing industry attracts population from the hinterland; then it starts to decline, first in relative terms (only in the core), then in absolute terms. This occurred during the 1970s, when the oil crisis and changing social patterns eroded the importance of heavy industry. The urban life-cycle theory foresees that employment and, to a certain extent, population might increase again to the extent that cities are able to re-market themselves as attractive service centres (Van den Berg et al. 1982). In the case of Venice, the re-urbanisation stage seems yet far away. The Historical Centre has declined ever since the end of World War II at an average yearly rate of 2%, steering towards 1% in the last decade. The inland areas replicate the general pattern, stabilising towards 170,000 inhabitants in the last two decades; the littoral keeps its size almost constant at around 50,000, dropping to 35,000 after the secession of Cavallino neighbourhood in 1999. Provincial data (Fig. 5.5 and Tab A.i in the Annex) reveal that the City of Venice loses population to the rest of the province, both to neighbouring and non-neighbouring municipalities. The province of Venice itself grows slowly compared to adjacent areas, such as the wealthy manufacturing provinces of Treviso and Vicenza.

Environmental problems undermine the very durability of the city, chasing away scared investors, inhabitants and economic operators who bear the high cost of environmental degradation. The “high water” (floodings) – increasing in frequency and impact owing to the on-going erosion of the lagoon bottom – may provide an unexpected thrill to curious tourists, but is a real drama for households and economic activities. Tourism cannot be blamed as the

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sole responsible for the deterioration of the delicate lagoon environment, which is rather the result of global phenomena (the rising sea level and air pollution) and inappropriate decisions in the past. Yet, it certainly tends to worsen existing trends. The limited number of “entry points” to the old city causes structural traffic on the only road link to the mainland, high levels of air and water pollution, plus heavy stress along the main pedestrian connections between such points and the main tourist area of St. Mark44.

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Fig. 5.4 - Population structure in different Sections of Venice Municipality. Years 1951-1999.

The province of Venice has the highest emission rate of CO per km2 in the Veneto Region (ARPAV 2000), a symptom of traffic stress that goes together with one of the lowest rate of green places per capita (only 12.35 m2 per resident in the city of Venice). While in general the noise level in the old city is low owing to the absence of cars, the disturbance crowding in tourist areas can be unnerving, not to mention the physical damages to historical buildings provoked by heavy water traffic. The concentration of a huge tourist population in a limited space clearly increases the social and environmental pressure on the city's resources and affects the “normal” functions that the city is supposed to deliver to its citizens. As a result, many of them prefer to relocate in cleaner and quieter residential suburbs, aggravating the socio-economic trends of the city. Of course, the very integrity of monuments, historical buildings and landscapes is in peril in this situation.

44 Van der Borg and Russo (1997) highlight some dimensions of the environmental stress caused by tourist traffic.

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38 .2 % 37 .5 % 36 .6 % 36 . 3% 36. 0% 35 .8%

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V enezi a P rov in ce of V enice - Ne ighbo uring m unic ip . P rov ince of Ve nice - Non Ne ighbo uring m unicip .

Fig. 5.5 - Population structure in the province of Venice, years 1990-1998

Economy: from «Serenissima» to «McVenice»

Whereas the historical centre and the smaller islands surrounding it concentrate the beauty and wealth inherited from Venice’s millenary status of main centre of commerce, artistic production and military power of the Mediterranean, today the economic heart of the region is found in its “back garden”. The metropolitan area nicknamed «Pa-Tre-Ve» comprehends the city of Venice, and extends to the neighbouring province cities of Padua and Treviso. The former is an art city and main service centre, the seat of one of the most prestigious Italian universities. The latter is a smaller historical city, mostly famous for being at the heart of an industrial district (Benetton's and Stefanel's headquarters and main factories are located here) with a very distinguished image in international markets.

The economy of the area is gradually shifting away from the port-driven industry. Since the 1930s, when the city could count on an industrial area of prime importance and location, many things have changed. The restructuring of the Italian heavy industry and the huge environmental problems caused by petrochemical productions have caused a downward drift in the competitiveness of the mainport Marghera. Fortunately, rather than provoking a real crisis in employment, this decline has gone hand in hand with a spatial dispersion of economic activity and a structural break in production, from heavy, polluting and state-supported industry to a highly competitive service economy driven by SME. For that reason, the unemployment rate in the area continues to be one of the lowest in Italy, reaching full employment in some municipalities, and averaging 5.1% at the provincial level. The abundance of employment opportunities attracts many immigrant workers to the area – especially from North African and Eastern European countries – with minor socio-cultural impacts as compared with other Italian regions characterised by strong in-migration. The provinces neighbouring Venice are part of the so-called “economic miracle” of the third Italy, though with distinctive characteristics, and with emerging problems that could cause a loss of

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competitiveness in the long term – the most important of which is the inadequate quality of the regional infrastructure and human resources45. Despite such worrisome perspectives, the “north-east” economy is still looked at as a success story.

In that context, the historical core of Venice is having problems finding its role. Without considering indirect multipliers, tourism accounts for 30% of jobs and 24% of economic units in the historical centre - see Figg. 5.6 a - d). However, it is hardly a lever for urban development. Excluded from the “large network” of international trade that made the Serenissima republic great, and progressively disconnected from the booming backyard economy which is obnoxious to its ancient splendour, Venice experienced a meagre growth in service economy around 1% in the decade 1981-1991, as compared to increases of 20 to 40% in the surrounding cities (Rullani and Micelli 2000). The trend is persistent, and, today, one of the problems that the local government has to solve – apart from the day-to-day emergence caused by tourism, environment and physical degradation – is how to “reinvent” the city's economic vocation, providing a solid alternative to the arguably volatile and harmful tourist economy. There is no lack of initiatives in that sense: the regeneration of waterfront areas, such as the famous Arsenal and the Giudecca island, for maritime-connected functions; the launch of research and knowledge-dissemination centres like the Science Park VEGA and the Venice International University; a new impetus to modern architecture and planning, a renovated effort to market the existing resources to international investors. These projects offer development opportunities, and contribute to the refurbishment of the obsolete image of Venice as a production and investment location.

However, the problem today is to convince the community at large – and in particular the population that lives of tourism – that Venice should have something else to offer. Tourism could indeed become a lever for the economic regeneration of the city, but to do so, it needs thorough restructuring. In section 4.4 we suggested that the conditions for the development of a “cultural tourist cluster” have to be brought about with a proactive urban policy. This cannot be achieved only through regulation, as argued in section 4.5, but involves a more integral change in the governance model of the city.

45 Commentator G. Stella, in his best-seller book Schei (“monies”), talks of three deficits that plague the rapid welfare growth in rural-industrial Veneto region: the deficit of culture, the deficit of infrastructure, and the deficit of policy, which constitute three forms of “isolation” of this area respect to the rest of the macro-regional economy.

Fig. 5.6 a - d – Structure of production and employm

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Cultural heritage

The historical centre of Venice has through centuries remained in good physical shape. All the building interventions had been soundly planned, so that all the best that the European architecture had to offer in the last ten centuries can be stated to have found its place there. Sights, monuments, attractions and events are too many to be counted, and indeed, most of the tourists coming to Venice are drawn not so much by the individual attractions as by the city as a whole, and by the atmosphere that characterises it.

MUSEA AND GALLERIES International interest (5-4 stars)National interest (3-2 stars) Local-regional interst (0-1 stars)

open for visit (payment or free aceess):International interest (5-4 stars)National interest (3-2 stars)

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OTHER MONUMENTS, CHURCHES, PALACES, SIGHTS

boat connection tominor islands

To: Lido, Casino, Littoral resorts

St. Mark's area

Fig. 5.7 - Localisation of the main cultural attractions in Venice historical centre

The map in Fig. 5.7 gives a first idea of the distribution of resources across the territory. It also highlights the relevance and access modes of the main listed assets. The majority of tourists visit the monuments grouped around the St. Mark’s square, such as the Cathedral, the Doge’s Palace and the tower. It is not surprising, therefore, that the routes linking the entry terminals with St. Mark are congested every day. Moreover, there are numerous museums and galleries of great importance in Venice: the galleries of the Accademia, the Peggy Guggenheim Museum, the Foundation Querini Stampalia, Ca’ Rezzonico and the School of San Rocco, plus many minor institutions managed by public and private parties. Palazzo Grassi, run by a giant private corporation, hosts a couple of exhibitions of international

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significance every year. Events such as the Carnival, the Biennale, the Historical Boat Races and the Film Festival, which are all held at fixed times of the year, attract a multitude of visitors to the historical centre. Boat trips to the smaller islands are often sold as a fixed part of a packaged tour in Venice.

Tab. 5.i - The main cultural institutions in the Historical Centre of Venice. Management structures and levels of visitation. Source: elaboration on Zago 1996

Institute Managing

institution Visits Year Typology

Accademia Galleries State 314,604 1997 art Franchetti Gallery State 35,045 1993 art Oriental Arts Museum State 4,735 1993 art National Archaeology Museum State 79,926 2000 archaeology Dukes' Palaces State 1,230,834 2000 art Historical Naval Museum State 39.641 2000 specialised Goldoni's House Municipality 10,000 1993 specialised Ca' Pesaro (Museum of Modern Art) Municipality 16,185 1993 art Ca' Rezzonico (Museum of venetian '700) Municipality 120,619 1998 art Fortuny Palace Municipality 47,429 1993 specialised Mocenigo Palace Municipality 19,389 2000 art Museum of Natural History Municipality 13,695 1993 technical Correr Museum Municipality 170,773 2000 art Bevilaqua la Masa Foundation Municipality n.c. art Peggy Guggenheim Collection Private 266,404 2000 art Ca' del Duca Private n.c. art Cini Palace Gallery Private 2,146 art Querini Stampalia Foundation Private 26,059 2000 art Hellenic Museum of Byzantine Studies Private 7,127 1993 art Hebraic Art Museum Private 83,336 2000 specialised Museum of Torcello Province of

Venice 7,665 2000 archaeology

Murano Glass Museum Municipality 106,464 2000 specialised Burano Lace Museum Municipality 28,405 2000 specialised Scuola of S. Maria del Carmelo (Carmini) Private 19,935 2000 art Scuola Grande di S. Rocco Church 103,664 2000 art Scuola Dalmata Church 30,643 1993 art Scuola Grande di S. Giovanni Evangelista Church n.c. art Diocese Museum S. Apollonia Church n.c. specialised St. Mark Tower Museum Church 921,550 1993 specialised P. Manfrediniana Church n.c. specialised Golden Pala and Treasure of St. Mark Church 428,450 1993 specialised

A tentative listing of attractions, including the level of visiting and property structures, is presented in Tab. 5.i. However, the mere visitors' figures may not be particularly significant, for one thing because most of the attractions do not charge visitors and in most cases no not even count visits, and for another because the “attraction number one” remains the city itself, where you can take a glance at a complex and intriguing cultural landscape, without necessarily visiting any of its component assets.

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Apart from central attractions, other beautiful and historically significant areas of the historical centre attract fewer but motivated visitors, like the Giudecca, Burano and Torcello islands, the Jewish Ghetto, the Cannaregio churches and canals. The lagoon itself represents a cultural landscape of tremendous natural-historical attractiveness, not to mention the small islands that witnessed the birth of the Venetian civilisation as far as 13 centuries ago. Only a few visitors look for cultural suggestions in the province, which presents the image of a highly urbanised and relatively unattractive rural district. However, the area is scattered with a valuable “diffused heritage” connected with the historic role of Venice – the Villas of the ancient Venetian aristocracy, the hunting mansions, the monasteries and fortresses, not to mention Roman remains pre-dating the Venetian civilisation – which are hardly valorised for tourism (Scaramuzzi 2000). Moreover, the neighbouring art cities of Padua and Treviso host important religious and artistic assets. Despite the efforts of the Province, organising itineraries and activities in the territory, the impression remains – confirmed by available data – that hurried visitors just “pass through” this metropolitan heritage on their way to Venice without really seeing it (cf. the map of the cultural attractiveness in the region in Figg. 5.25-26).

The challenge for the city is how to valorise such an enormous heritage. Cultural tourism has the potential to generate the value that is needed both to preserve the heritage and to foster a new cycle of development, based on culture-intensive and “intangible” knowledge. However, that does not apply to this case. To say the least, the potential offered by culture is not properly exploited by mass tourism; anyway, that model affects the very integrity and durability of such heritage. The next section analyses in depth the pattern of tourism development and its connection with cultural resources.

5.3 Venice and tourism development

At the end of the 1970s, the changes in the structure of the Italian economy and a renewed interest in urban planning brought about wide-ranging reflection on the options at hand for the development of Venice. One issue of the debate was the necessity to quantify the tolerance of the city with regard to tourism, as it seemed clear that tourism could become unsustainable and compromise the endurance of the city's functionality and economic soundness. Canestrelli and Costa (1991) estimated the optimum level and composition of the visitors’ flow compatible with the full functionality of the different sub-systems used by citizens and tourists alike (transports, waste collection, access to cultural institutions, etc.): the socio-economic carrying capacity.

To do this, they maximised a tourist-revenue function built up as the sum of the financial contributions of each type of visitors, under a set of “fuzzy” constraints representing the various sub-systems connected with the tourist function (e.g. parking places, hotel rooms, waste collection capacity, etc.). The outcome was a set of optimum values for the flow composition, and a measure of the “tightness” of the constraints under different hypotheses. The exercise suggests that Venice could absorb a total number of about 22,500 visitors, but only a maximum of 10,700 of these should be excursionists. The approach might be criticised

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46, but it provided for the first time a clear benchmark for visitor management. Moreover, it has made it clear that the system-Venice, and not just the hotel sector, is not indifferent between excursionists and tourists, given their different profiles in terms of externalities generated. Finally, it is immediately relevant for policy: by identifying the sub-systems that are under pressure at different visiting levels, the system implicitly suggests the short-term priorities. For instance, calibration on 1989 data yielded a clear indication: enlarging accommodation capacity in the city centre would increase the profits in the industry without affecting other sub-systems, while increasing the capacity of public transport would have no influence on the system at all.

The violation of the carrying capacity, however defined, is the first step towards the dynamics of the “vicious circle” model described earlier. In a static setting, it indicates the variables that should be monitored, and identifies a system of limits. However, a dynamic and integral policy scheme must be based on the thorough comprehension of the whole process of change that is triggered by the violation of the carrying capacity.

5.3.1 Step 1 of the Vicious Circle

In this section, we describe how the Functional Tourist Region expands, in the face of persisting demand increases beyond the accommodation capacity of the city. Our aim is to test our suggestion that as a result of insufficient central capacity the territory gets specialised, with peripheral areas playing the role of “buffer zones” within the FTR.

Tourists and excursionists: an overview

For at least one decade, the accommodation capacity of the Historical Centre of Venice has been used virtually to the full. As a consequence, the FTR has surpassed by far the provincial scale, generating a volume of day-trippers exceeding what is compatible with socio-economic sustainability. Indeed, the thresholds determined by Costa and Van der Borg (1988) and Canestrelli and Costa (1991), were surpassed on 156 days in 1987. The number of yearly violations has been increasing since then, despite any attempt to level the peaks through regulation and planning.

While information on overnight stays is publicly available, data on excursionists are collected in a non-systematic way, and by different methods. For the sake of comparability, we have utilised information from the most recent wide-range survey that estimated excursionists, that of 1996-1997 (Manente and Andreatta 1998). Table 5.ii reveals the absolute and relative dimension of each visitor category. The estimated share of excursionists accounts for more than two thirds of the visitors' flow, and for more than four fifths of the flow of domestic tourists. Among foreign excursionists, the majority are false and passing excursionists, but indirect excursionists count almost a million. Real excursionists are numerous among domestic visitors. All in all, these figures indicate that a substantial proportion of the visitors whose main motivation is to spend some time in the city, do not actually sleep in Venice.

46 For instance, no environmental constraints are utilised; the setting is a static one, where constraints are always the same; and the objective function represents only one of the functions of the city; an appropriate extension of this model would utilise a system of objective functions with a wider set of dynamic constraints.

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Tab. 5.ii – Visitors types and origins in Venice 1996

Abs. v. domestic foreigners totalTourists 634,292 2,653,823 3,288,115 Real exc. 2,589,083 119,124 2,708,207 Indirect exc. 266,788 921,375 1,188,163 False + passing exc. 1,404,057 2,097,478 3,501,535 Total excursionists 4,259,928 3,137,977 7,397,905 TOTAL VISITORS 4,894,220 5,791,800 10,686,020 % domestic foreigners totalTourists 13.0 45.8 30.8 Real exc. 60.8 3.8 36.6 Indirect exc. 6.3 29.4 16.1 False + passing exc. 33.0 66.8 47.3 Total excursionists 87.0 54.2 69.2 TOTAL VISITORS 100.0 100.0 100.0

Source: own elaboration on Manente and Andreatta (1998).

The lack of consistent and organised data on excursionists makes it difficult to analyse recent trends in more detail. Their evolution in time has been estimated with some accuracy with the help of econometric models (Manente and Rizzi 1993). However, the figures are highly idiosyncratic, and the estimates of different groups are affected by supply-side constraints (e.g. capacity in the historical centre)47. Overnight stays in the Municipality and in the Historical Centre were growing almost constantly from 1951 to 1998, when the secession of the Cavallino seaside district meant that the city lost almost the half of its tourist stays. The Historical Centre intercepted an almost constant share of one third of this flow, while the rest was accommodated in the other areas of the municipality (Fig. 5.8). Overnight stays still increase at a yearly rate of 3%, saturating the hotel supply in the Historical Centre for prolonged periods of the year (Fig. 5.9). However, the growth of day trips is even higher. In the decade 1989-1999 the excursions to Venice are estimated to have increased by 25%, whereas the total accommodation capacity of the city only increased by 1%. Rispoli and Van der Borg (1988) link the sustained growth of the day-tripper segment to the price structure. A portion of them finds it more convenient to stay in the periphery of the tourist region. Accommodation prices for a given category decrease constantly with the distance from Venice’s historical centre (Van der Borg and Russo 1997): a room in a four-star hotel in Padua costs about one third of one in Venice. The 40-km distance can easily be covered by train or motorcar in less than half an hour – the time it would take a visitor of Paris or Rome to get to the centre from a hotel in the outskirts. Such an enormous difference in price 47 In the rest of this work, we will consider two different data sets regarding excursionists. The first has estimated excursionists’ monthly figures based on the last comprehensive visitor survey conducted in 1994. The excursionists’ flow has been estimated utilising an ARIMA model that uses as independent variables the overnight stays in various excursions-generating locations throughout the tourist region, calibrated according to the information collected with exploratory survey. The second set is based on a smaller scale survey conducted in 12 months between 1996 and 1997, and is mainly utilised here to distinguish at a higher detail the origin, location patterns and itineraries of visitors.

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explains the emergence of that curious character, the “false” day-tripper, who wants to visit Venice but prefers to spend the night in the city’s environs.

With a view to the almost constant saturation of the supply, the accommodation capacity is being enlarged, especially in the non-hotel market that has been deregulated. The recent strategies of tour operators, targeting different demand segments through off-season offers and events, stimulate further growth. Table A.ii in the Annex displays the historical trend in occupation rates. It shows that while the historical centre approaches full occupation (an average occupation rate of 80% is generally estimated as such), peripheral sites also increase their occupation rates both in the opening days and through the year.

Excursions are free to grow without the supply-side constraint that characterises overnight stays. Fig 5.9 charts the estimated excursions to the city centre against other relevant series, in terms of growth rates. The data, encompassing the last five years, show that local trends are quite stable48, while excursions in the historical centre are still growing at rates three times those of the overnight visits. The yearly growth rates for the overnight stays in the historical centre have stabilises around 4% in the last decade, the same magnitude as before the economic and political turmoil of the early 1980s, when growth has been occasionally negative. Recent growth rates in the seaside area clearly reflect the separation of the Cavallino borough, which grew faster than the other parts of the city all through the 1990s. Provincial and regional data display the high variability that characterises leisure and recreational tourism compared to urban tourism, but they all seem to converge around a structural 30% rate of growth. That represents an enormous pressure for the historical centre in terms of potential daily visits.

48 The series have been smoothed to eliminate seasonal variations. The “flatness” of the excursions estimates’ trend depends on the modelling procedure to estimate such data.

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An interesting experiment is to relate such flows to the territorial variables involved. “Pressure” and “Stress” indicators can be obtained from such data if divided into the territorial extension of areas of concern and the relative resident population. The long-term trends of pressure and stress in various parts of the city are presented in Figg. 5.10 and 5.11. The pressure indicator shows that tourists weigh on the historical city resources (public spaces, roads, facilities, etc.) at a factor almost eight times higher than the municipal average. That value used to be even higher a couple of decades ago. There are signs that the industry reacts to the strong concentration of tourist flows in the centre – and to the impossibility to expand the tourist function further –, spreading tourism in the region, and especially to seaside resorts where there is plenty of non-utilised capacity in off-season months49.

49 If the figures on excursions are added to this picture, the pressure on the historical centre becomes more than 25 times higher than in the city as a whole.

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The stress indicator shows that residents of the historical centre are confronted with a number of tourists per km2 that is 33 times the municipal average (more than 100 times when excursionists are counted). The value for the seaside area is around 13, but high tourist stress is natural in seaside destinations (where the population is scarce and the economic structure of the place is almost entirely touristic). Instead, such heavy stress on densely populated and economically complex areas such as an urban centre creates huge problems. On average, the city receives every day a number of visitors that equals almost half the resident population (to which a number of 7,500 students and almost 10,000 daily commuters must be added). At a first glance, this means that the “management costs” of the city borne by the city residents and taxpayers are almost twice those in a situation without tourism. That broad picture has to be confronted in some way with the benefits arising from tourist activity and their allocation.

Visitors' flows have a strong seasonal pattern. This pattern is mainly driven by daily visits: both real and indirect excursions are concentrated in the high season. Indirect excursionists are mainly summer vacationers, while real excursionists are particularly numerous during the months of May and September. The seasonal variability of overnight stays in the historical centre is less sharp, reflecting a typical trend of art cities, where short breaks are popular even off-season. The trend regarding false excursionists parallels the one of overnight stays. Whenever there is room left in the Historical Centre, the number of visitors who choose to come as excursionists gets smaller, and it grows when the capacity in the centre is saturated. Clearly, the hinterland of Venice works as a “buffer zone”. Non-central locations are chosen on budget or convenience considerations, but during peak months, that might be the only way to visit Venice.

Strong seasonal patterns are conceived of as a “cost” as they involve sunk costs for the provision of facilities (e.g. police, water treatment, waste collection), with excess capacity off-season. Moreover, they may imply huge congestion costs in peak days. Wide differences between high and low seasons are organic in seaside destinations, though these are trying to extend the season by organising off-season events. Visitors' flows are also more stable in cities than in the rest of the FTR (the more so when only overnight stays are considered), on account of a “bottleneck” factor. When capacity is saturated in central areas, overnight stays leak out to neighbouring areas. Therefore, the historical centre exhibits a seasonal variation of a factor 8, compared to a factor 250 for the rest of the Province, part of which is explained by excess capacity in neighbouring seaside resorts (cf. Tab. A.iii in the Annex).

STEP 1 TESTED. As a result of the on-going increase in the number of excursionists, and of the strategy of tour operators, the boundaries of the FTR are moving outwards to comprehend a wider portion of the territory around Venice. In the “periphery” of the FTR, visitor segments with a more limited budget can be accommodated. Thus a substantial share of visitors become false excursionists.

5.3.2 Step 2 of the Vicious Circle

In this section, we wish to describe how an enlargement of FTRs determines a compression of time-budgets and information sets available to visitors in the Historical Centre. The phenomenon is associated with a specialisation of the territory’s tourist function in relation to different categories of visitors. The role of cultural assets in attracting tourist flows and activity is also examined.

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Spatial analysis of the Venetian tourist region

Tourist Region “Venice-seasideresorts”

Tourist Region “Alpine”

Tourist Region “Garda-Verona”

Tourist Region “Padua-Spa”

Tourist region “Asiago”

Fig. 5.12 - Accommodation capacity in the Municipalities of Veneto region and “functional tourist regions”

As an attraction pole, Venice “competes” with other areas that are possibly specialised in different products. The map in Fig. 5.12 describes the accommodation capacity of the Region of Veneto. At least three main tourist destination areas can be identified. The first, centred on Venice, is certainly the most complex: it includes an art city with limited capacity and a very strong attractiveness, and a seaside-resort area with a large accommodation capacity spread across a wide territory. The second is the alpine destination area centred on the popular resort of Cortina, and the third is the lake holiday district of Garda, again associated with the art city of Verona. Minor resort areas are the spa region south of Padua, with a fair accommodation capacity that increasingly intercepts the regional business and congress tourism in off-season months, and the alpine district of Asiago to the North West. Obviously, these attraction poles are to a large extent complementary in attracting a visitor flow. For our purposes, we wish to delimit the Functional Tourist Region (FTR) of Venice as the area that generates a substantial

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share of the day-trips to the main destination. One way to achieve that delimitation is to look at the price structure50. The assumption is that in a FTR, accommodation prices would decline with the distance from the centre: the main reason for staying in the region is the access to Venice, which is less and less easy as the distance increases, leading to decreases in the reservation price of visitors.

Fig. 5.13 - Hotel price structure within Venice FTR

Prices in 1,000 ITL 2001, weighted average per acc. category.

The scatterplot in Fig. 5.13 synthesises the information on the price structure of hotels. The U-shaped form of the relation between prices and distances from Venice indicates that the “proximity effect” with the centre of the FTR decays until another consistent FTR is met, centred on the Verona-Garda Lake region. The association between prices and distances from Venice is strong (and significant, as indicated in Tab. A.iv in the Annex), despite the presence of important destinations within the FTR, such as the beach resorts of Jesolo and Caorle, where more than half of the accommodation capacity of the Province is concentrated. Thus, it can be said that the weight of Venice as a tourist attraction is such that it imposes a hotel price pattern on the whole FTR.

However, there are important differences among such excursionist types that are worth taking into consideration. Utilising data from a 1997 survey51, it is possible to reconstruct a map of

50 This exercise is restricted to the Veneto region, though in this way we miss an increasingly important source of daily visits, those coming from Croatian and Slovenian costs with daily boat tours, for which consistent data are not available.

distance from Venice in minutes of travel

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age

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l roo

m p

rice

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Padova

Verona

141

“tourist mobility” in the region. Real excursionists, or day-trippers, account for a minor share of the sample. That is due to the difficulty of distinguishing visitors from simple shoppers or commuters from neighbouring towns. However, the data reveal the existence of a “catchment area” for real excursionists that spans the whole north of Italy and the neighbouring countries of Slovenia and Austria. The map in Fig. 5.14 describes the main origin locations of such types of flow.

place of origin of “real excursionists” origina ting> 2% of excursionists' flow

place of origin of “real excursionists” origina ting1% < x < 2% of excursionists' flow

place of origin of “real excursionists” origina ting< 1% of excursionists' flow

ORIGIN FREQ. PERC.Within province* 4 4.2%Other provinces in RegionVeneto

48 50.5%

North-East (Regions Friuli-Trentino)

7 7.4%

Other Northern Italian Regions(Lombardia-Piedmont-Friuli-Vald'Aosta-Emilia R.)

34 35.8%

Rest of Italy 0 0.0%Foreign Countries 2 2.1%TOTAL 95

* only visitors who declared themselves 'tourists'.

Fig. 5.14 - Origin locations of “real” excursionists. Source: ICARE 1997.

The relevant region for day-trips, as discussed earlier, is “naturally bounded” by travel time. However, other types of excursionists escape this constraint spending the night “close enough” to the destination. The main overnight locations for false and indirect excursionists are described in Fig. 5.15, where different typologies are represented in different colours.

While absolute numbers are not significant because of the small sample size, it is interesting to notice how the territory become specialised in these different visitors' typologies. Indirect excursionists appear to be hosted in areas that include amenities for other kinds of tourism than the cultural, and false excursionists in areas with no particular attractions but the proximity to the main destination and a favourable distance/price ratio. In Fig. 5.16 the data from the 1997 survey are organised in such a way as to bring the weight of the proximity to Venice to the fore: darker colours imply that a greater proportion of tourists in that area are taking excursions to the main or secondary destination of their journey, that is, the historical centre of Venice. As expected, such shares decline with the distance. This confirms the existence of a FTR for the main destination Venice, with complex characteristics.

51 Data on a sample of 1,500 visitors were collected from November 1996 to October 1997 in selected areas of the city centre and by the main exit terminals. The results of this research commissioned by Telecom Italy appear in au unpublished report on the Venetian cultural supply and consumption behaviour (ICARE 1997).

142

The structure of this region and its main features are fundamental to determining the sustainability of tourism development in the main destination, as argued in Ch. 3. It is therefore necessary to analyse the structure in more detail by taking into account some indicators of the supply side. The maps that follow provide a description of the “supply side” of tourism in the tourist region. The indicators have been constructed by processing data on the accommodation supply and price structure within the province of Venice. The spatial units of analysis are the Municipality of Venice (subdivided into Historical Centre and Islands, Littoral, Mestre and Marghera), plus the 53 other Municipalities in the Province, and the rest of the Region of Veneto52 (unit of analysis: Provinces and APT's). A first important piece of information is the capacity of a city to host visitors. This supply-side indicator gives an idea of the “maturity” of a tourist destination, approximating the economic importance of tourist activity in a site. The maps in Figg. 5.17-5.18 illustrate that the weight of capacity within the province is mainly centred on the city of Venice and on the north-eastern (and to a minor degree southern) seaside areas.53 When non-hotel accommodation is taken into consideration, the weight shifts towards the seaside area, where most camp parks are located54.

52 Price data for the rest of the Province regard provincial capitals only. When relevant, information will be given regarding areas or cities outside the regions. 53 The capacity indexes are built from number of tourist beds (n. of beds = x); the index is given by the formula Icap=ln[x+1]. A zero value corresponds to a zero value of the indicator. The other indexes have been built in the same fashion utilising the relevant variables. 54 A spatial association index has been calculated for each municipality within the province The index G*, developed by Getis and Ord (1992) allows the identification of the local trends in the spatial distribution of a variable. The index calculated on capacity data indicate that this is agglomerated on the axis between Venice and the seaside resorts. The G* index calculated for intensity data reveals that tourist intensity within the region is clustered on the main destination Venice.

Fig. 5.15 - O

rigin of day trips to Venice by “false” and “indirect” excursionists.

Elaboration on 1997 survey data

Fig. 5.16 - Share of excursions to V

enice on total tourist stays. Elaboration on 1997 survey data

Fig. 5.17 – H

otel capacity (n. of hotel beds) in the Municipalities of the Province

and in the APT

s of Veneto R

egion

Fig. 5.18 – T

otal capacity (n. of tourist beds) in the Municipalities of the Province

and in the APT

s of Veneto R

egion

Fig. 5.19 – Index of hotel intensity (hotel beds per km

2 in the spatial units)

Fig. 5.20 – Index of total intensity (tourist beds per km

2 in the spatial units)

TOU

RIS

TICIT

Y index*

1> 2.5

22 < x < 2.5

31 < x < 2

40.5 < x < 1

5< 0.5

* total tourist beds per

inhabitant/km

2

legenda

Fig. 5.21– T

ouristicity index (total intensity per resident in the spatial units)

Fig. 5.22 – Price index of accomm

odation. Venice H

C = 100; w

eighted averages per accom

modation category.

147

It is interesting, then, to cross capacity data with territorial variables. As a first experiment, we have reproduced a tourist-intensity indicator, the ratio of tourist beds per km2 within municipal territories (and APTs for out-of-province units). The picture is now more complex. Venice and the closest seaside resorts display the higher values as regards both hotel (Fig. 5.19) and total (Fig. 5.20) intensity, but now other areas emerge as tourist-intensive: smaller districts clustered on the Brenta area along the Venice-Padua axis, the spa district, the Garda region and the Alpine resorts. To add a social dimension to this analysis, a touristicity indicator has been built, which considers tourist intensity per resident. Now the situation is such that, with 27 tourist beds/km2 on each resident, the Historical Centre of Venice displays values 35 times the regional average (0.7) and 173 times the median value of the provincial distribution (0.15). Areas with high values are identified, such as the Garda region and the Asiago mountain district in the North-Western part of the Region (Fig. 5.21).

Fig. 5.22 takes into consideration the resulting price structure (weighted averages per accommodation type and category). The higher the touristicity, the higher the expected tourist prices: much-visited places tend to be more expensive. In fact, the relation between touristicity and prices is evidence that the process described in section 3.3 may be at work. The more “congested” the tourist market, the easier for tourist suppliers to capture proximity and information rents. Indeed, the data illustrate the territorial structure of the price-distance gradient in the Venice tourist region. Provinces along the Venice-Garda axis appear homogeneous in the price structure.

Fig. 5.23 - Moran's I scatterplot of accommodation intensity in the Municipalities within the province of Venice. Logarithmic scale.

To confirm that intuitive conclusion, we recur to Moran's I, that is a measure of spatial auto-correlation and allows the identification of outliers 55. When performed on intensity data (Fig. 5.23), the association appears weak. The association is convincingly stronger when performed on price data (Fig. 5.24). This comparative experiment allows the conclusion that whereas 55 Moran's I charts the value of a variable in a spatial unit with the average of the respective values in neighbouring units; the more inclined the interpolation curve, the stronger the spatial association between neighbouring units.

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tourist capacity is located according to idiosyncratic patterns (it is clustered around areas of attraction that are determined by historical and natural circumstances), the price structure is strongly determined by the market pressure on main attraction areas. Even if within resorts, prices may vary according to distances from the main assets (e.g. the beach in a seaside area), price differentials between clusters of attraction within a tourist region are influenced by tourist intensity, where tourist rents not only depend on location, but also on other market distortions such as that examined in Ch. 3, like information asymmetries and quality strategies. That conclusion is confirmed by the correlation between the data sets on prices and the capacity indexes, displayed in Tab. A.v in the Annex. These data suggest that, whereas there is no significant relation between the price levels and the quantity of tourist beds present in the area, the relation is rather strong when the density of tourist beds in the area is taken into account.

Fig. 5.24 - Moran's I scatterplot of accommodation price in the Municipalities within the province of Venice.

Cultural attractiveness and regional structure

What is the role of cultural assets and other tourist attractions in determining the structure of the tourist region as described in the previous section? That question is crucial in the scope of this analysis because it enables us to: i) assess the weight of historical and cultural assets as a location factor for tourist activity,

and

ii) identify areas of excessive pressure on the heritage and areas that have a potential to attract more cultural tourists.

Average weighted price per double room

3002001000

Mea

n ad

jace

nt p

rice

of a

ccom

mod

atio

n

300

200

100

0

Noventa di Piave

Chioggia

Cavarzere

Campagnalupia

Venice HC

Fig. 5.25 - Cultural attractiveness of the m

unicipalities in the Provincial territory. Source: TO

UR

ING

CLU

B A

TLAS 2001.

attra

ctio

n

ind

ex*

1>

62

5.5

< x <

6

34

.3 <

x <

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.5 <

x <

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3.5

leg

en

da

* log

cu

m. a

ttrac

tion

of c

ultu

ral

asse

ts pe

r squ

are

km

Fig. 5.26 - Cultural attractiveness of Tourist Prom

otion Districts (A

PTs) in the R

egional territory. Source: TOU

RIN

G C

LUB A

TLAS 2001.

150

The maps in Figg. 5.25 and 5.26 describe the presence of historical and cultural assets in – notably – the provincial and regional territories (divided into APTs)56. The maps highlight the primacy of the Historical Centre of Venice in attracting tourist flows. The municipality ranking second, the historical port of Chioggia, has a cultural-attraction index (cf. footnote) that is almost 20 times less than Venice. On the regional scale, the APT of Venice (which includes non-cultural areas such as Mestre and Marghera) counts at least twice as attractive as any of the others. It is important, however, to take the different spatial extensions of the units considered into account. An index of cultural intensity can be developed (the density of tourist assets, or attraction per km2). Tab. A.vi in the Annex displays the ranking of spatial units according to the two indexes.

The cultural attractiveness of the region is positively correlated with certain attributes of the tourist market (Tab. 5.iii 2nd and 3rd columns). Cultural assets appear concentrated in densely populated areas, which hints at the “urban” nature of the heritage. Within the Province, tourist supply is concentrated in heritage-rich urban areas, where tourist activity captures the rents from the proximity to primary tourist products. The concentration also brings a pressure on the market structure with it, which is reflected in higher accommodation prices. Taking into account cultural intensity hardly changes the picture. It is worth noting that cultural assets become more dispersed at increasing distances from Venice, which confirms the historical link between heritage and power in a markedly “urban” civilisation like the Venetian.

When the spatial scale of this analysis is enlarged (Tab. 5.iii, 4th and 5th columns), the relation between the location of cultural assets and variables of tourism development loses significance, but that is probably due to the roughness of the spatial units considered. Venice again appears to be the focal point of a wide cultural region. Cultural assets again get dispersed at increasing distances from the regional capital, despite the presence of art cities like Verona and Vicenza in the periphery of the region. The tendency of cultural assets to be concentrated in urban areas is again confirmed. A new relationship emerges between the cultural endowment and the quality of accommodation: “cultural regions” offer on average better quality standards than other recreation districts.

56 Our data base on cultural assets includes four different types of resources, that are listed in three separate data sources (1) Museums – source: http://www.regione.veneto.it /cultura/musei.htm; (2) Churches and religious institutions – source: Red Guides TCI “Guida d’Italia. Veneto” and “Guida d’Italia. Venezia”, Touring Club Italiano 1992 1985; (3) Villas and Palaces – source: http://www.veneto.net/ville-venete.htm; (4) Monuments and sights – source: Guide Rosse TCI “Guida d’Italia. Veneto” and “Guida d’Italia. Venezia”, Touring Club Italiano 1992 1985.

Among the lists of churches and monuments, only the main have been included, those with a value of 3 or 4 according to the criteria specified below. The individual assets have been attributed a cultural attraction index according to the categories utilised by Touring Club Italy in its authoritative Red Guides. In the Data Base each category has been associated with a value, from 1 to 4. In the case in which a church or monument contains one or more elements with an attraction index superior to that of the assets in its generality, the higher value is extended to the assets itself.

151

Tab 5.iii - Correlation structure between cultural attractiveness and tourism variables

Municipalities within Province of Venice

APTs in Region Veneto

Cultural attractiveness

Cultural intensity Cultural attractiveness

Cultural intensity

(Cum. n. of stars) (Stars per km2) (Cum. n. of stars) (Stars per km2)

distance from Venice HC in km 0 – – 0 –

distance from Venice HC in min 0 – – – – –

surface square km 0 0 0 0

pop 1998 (+) (+) (+) 0

Capacity (accommodation beds) 0 0 0 0

Tourist intensity (accommodation beds per km2)

++ (++) 0 0

Touristicy (Accommodation beds per km2 per resident)

++ (++) 0 0

Average category 0 0 0 +

Average weighted price per double room

++ ++ N.A. N.A.

Overnight stays 1998 0 0 0 ++

Tourist pressure (Overnight stays per km2)

0 0 0 0

Tourist stress (Overnight stays per km2 per resident)

0 0 0 0

population density 1998 ++ (++) ++ (+)

Legenda:

+ / –: Positive / negative correlation is significant at the 0.05 level (2-tailed). ++ / – –: Positive / negative correlation is significant at the 0.01 level (2-tailed). (+ / –): Positive / negative correlation is significant but trivial 0 : no significant correlation

The relation between cultural richness and overnight stays is better analysed through a scatter-plot (Fig. 5.27). Two types of relation are identified. One regards art cities, in which accommodation capacity and cultural assets are positively correlated, and another regards recreation district areas, where that relation does not hold. The diagram also highlights the

152

existence of a large group of sites within the Province with some attraction capacity where the tourist infrastructure is not really developed.

Cultural attractiveness (Cum. n. of stars)

500400300200100 0

Cap

acity

(acc

omm

odat

ion

beds

)

70000

60000

50000

40000

30000

20000

10000

0

Caorle

Chioggia

Mestre Eraclea

Bibione

Jesolo

Cavallino

Padova

Vicenza

Verona

Venezia

ART CITIES

RECREATION RESORTS

Fig. 5.27 - Cultural clusters and recreation districts in the Veneto Region

At the APT level, this pattern is replicated (Fig. 5.28, but three groups of destination areas emerge. A group of “recreational” APTs builds a substantial tourist activity on their natural assets and man-made infrastructure; basically these destinations do not need cultural attraction to develop as tourist locations, though they certainly benefit from the presence of important cultural destinations in their proximity. Among cultural districts, Venice seems the only one that is really able to put to value the complementarity between its cultural attractiveness and the proximity to other significant recreational areas. Finally, a group of districts display a fair cultural attractiveness but are clearly underdeveloped from the tourist point of view. Among these are such main art cities as Padua and Verona.

153

Cultural attractiveness (Cum. n. of stars)

600500400300200100 0

Cap

acity

(a

ccom

mod

atio

n140000

120000

100000

80000

60000

40000

20000

0

APT 14 Rovigo APT 13 Verona

APT 12 Ga rda

APT 11 Alt. Di Asiag

APT 10 VicenzaAPT 09 Terme

APT 08 Padova

APT 07 Chiogg ia

APT 06 Venezia

APT 05 Jesolo e Erac

APT 04 Bib ione e

APT 03 Treviso

APT 02 Belluno

APT 01 Cortina

Fig. 5.28 - Cultural clusters and recreation districts (APTs) in the Veneto Region

Time budget analysis

In terms of spatial organisation of the visits, it is interesting to analyse the itineraries of visitors. The hypothesis is that different visitor profiles are likely to follow different visiting rules. The time-budget constraints, as well as the character of the visitor, seem to influence to a large extent the choice of itineraries. Once in Venice, visitors with strict time budgets limit their visits to attractions located in the most central areas (St. Mark's square – Dukes' Palace), with possible extensions to the smaller islands in the lagoon, which are usually offered as a packaged trip starting from St. Mark's docks. With more time available, visitors diversify their itinerary, considering other areas and kinds of attractions, ranging from on-going temporary exhibitions like Biennale, to events like the Carnival, or other churches and museums. The maps in Figg. 5.29 a - d provide a profile of itinerary decisions according to the duration of the stay in Venice. In high season, daily visits are shorter, and are undertaken mostly from seaside areas. During the off-season months the origin of day trips is more varied. These are also the months chosen with preference by false excursionists. A comparison of the intentions of visits prior to the visit itself and the visits actually made, indicates that visitors “give up” eccentric attractions in favour of more central ones, or those that are placed along the main routes that lead them from the entrance terminals to St. Mark's square.

Fig. 5.29 a - d – Tim

e budget analysis of cultural visits in Venice.

155

Visitors are more likely to “discover” attractions that they didn't explicitly wish to visit before their arrival in Venice, the closer the location of such attractions is to the main tourist routes. Location, and not intrinsic cultural motives, guide the visiting patterns, and that trend is reinforced as time is shorter and information scarcer. The impact on the cultural system is a serious mismatch between potential capacity and actual visiting on a territorial basis. Fig. 5.30 describes the resulting pattern of inflows and outflows during a typical peak day in Venice. The data, again, come from the 1997 survey. 60-70% of this enormous flow of people (and vehicles) is concentrated in a couple of hours in the morning and another couple of hours in the afternoon. The average duration of a daily trip is about eight hours (three fifths of the visits being shorter). Moreover, the greatest share of this flow approaches Venice through its only road/rail connection with the mainland, provoking congestion on the main routes connecting that terminal to the central areas.

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Fig. 5.30 - Daily pattern of visits to Venice in a non-working day. Source: ICARE 1997

STEP 2 TESTED. The FTR of Venice gets specialised in different visitor segments. A large share of them is composed by false excursionists whose main motivation is to visit Venice, but choose to stay in areas where accommodation is less expensive and more easily available. As a result, the time budgets available for their visits to Venice are compressed, and this determines a concentration of the visits in space and time.

5.3.3 Step 3 of the Vicious Circle

In this section, we wish to describe how the compression of the visitors’ time budgets and information sets causes inefficiency in the visits to the cultural supply of the city, and provides an incentive for strategic quality cuts in the market for complementary tourist commodities.

156

Cultural consumption

Visitors make use of urban facilities, subtracting a significant portion of them from use by the Venetians, especially on peak days and on the occasion of mega-events57. The imposition of impediments and external costs on the residents is not central to the present analysis. However, since the excessive cost of urban facilities is a significant factor to explain the massive loss of population suffered in the last 50 years, it is not difficult to see how the problems of tourism development are exacerbated as the socio-economic mass of the city gets thinner.

Instead, we will focus on another aspect that directly influences the vicious circle. An inefficient organisation of the visits is supposed to affect the performance of the cultural tourism industry negatively. As a result of the combined effect of congestion and lack of information, some cultural resources are under-utilised while some others are overcrowded. On the whole, far fewer visitors are able to enjoy the cultural heritage than the city could afford; the quality of the tourists’ experience is eroded by various impediments and time lost in queues. Apparently, the set of cultural resources in Venice is not working as a real “system”, fragmented as it is among a host of management and ownership bodies, without a common strategy or a unique selling point. Zago (1996) counts at least ten institutions, public or private, directly responsible for the museums of Venice (Tab. 5.i). Only one out of four visitors comes to Venice to visit something in particular; the same percentage ever pays to get into a cultural institution during their visit (ICARE 1997).

Data relative to 18 main museums58 and 13 churches show that on average one out of 4.4 visitors buys a ticket to one of such museums and one out of 55.7 enters a church where you have to pay for it (Fig. 5.31). In aggregate, visitation rates decrease in time. Fig. 5.32 describes the extent of the mismatch between visits to the city (grey bars) and visits to its main cultural institutions, such as the centrally-located Doges' Palace, the Guggenheim collection and the Accademia Art Gallery, possibly one of the greatest collection of Italian renaissance arts.

There are two possible reasons for such friction in the match between demand for and supply of culture. One is that the cultural system cannot absorb the enormous inflow of visitors who, confronted with that face to crowded museums and monuments, prefer to visit “freely” available assets like the landscapes and sights. Another reason is that the information needed for an effective visit to cultural institutions is lacking, so that “informed” visits are difficult to organise. The result is overcrowding in central and “famous” places hand-in-hand with under-utilisation and scarce interest for less immediately appreciable resources. In the second case,

57 Indovina (1988) analyses the concurrent use of the urban land of Venice by residents and other categories of city users such as daily commuters, students and tourists, and finds that the public space in the historical centre of Venice is used by tourists for the 34% (against 49.3% of residents’ use 12.6% of commuters’, 4.1% of students’). This figure increases to 56.9% if only the most central areas are considered, and to 66.9% in the period July-October. 58 These are official monthly data on visits and opening times among 18 of the main museums in the Historical Centre with permanent collections and 13 churches belonging to the Chorus network. Among the main cultural attractions, St. Mark's Cathedral and annexes missing from this sample, as well as the Tower of St. Mark's, and some main cultural events on a temporary basis like the Biennial Expositions of Arts and Cinema Festival, and the exhibitions at Palazzo Grassi.

157

appropriate cultural planning and communication policies would improve the capacity of the cultural system to internalise the benefits from the extraordinary international demand. Two indicators – originally developed by Funari and Simionato (1996) – can help to address this problem. The availability index refers to the share of hours in the total of a day or a year during which it is possible to visit a museum or other attraction. Obviously, the available time for visitors is limited by hours of rest, so that an index of around 50% should be considered a maximum. This indicator is clearly policy-driven, and depends on decisions that may have nothing to do with pressure and demand (personnel regulations, restoration, hosting of temporary events and exhibitions, etc.). However, the diagram in Fig. 5.33 shows that in the recent years there has been an attempt to adapt the opening times to the loops and reels of visitors' flows. That strategy is also favoured by the reorganised management of religious institutions, through the institution of an association (“Chorus”) that provides visitor services and a standard commercial platform for the most important Venetian churches.

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Visitation rates (visits in cultural institutions per visitor in HC of Venice)

museum

schurches

Linear (museum

s)Linear (churches)

Fig. 5.31 - Visitation rates in the m

useums and churches of V

enice HC

and linear trends. Y

ears 1995-2000.

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istsA

ccad

em

iaP

egg

y Gu

ggen

heim

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llectio

nM

use

o d

i Pa

lazzo

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cale

Fig. 5.32 - Visits to the city and visits to the m

ain cultural institutions, Year 2000.

Logarithmic scale.

0.000

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Visitors (1,000)

res. tourists in HC

est. excursionistsaggregate m

useums

churches"central" m

useums

"peripheral" museum

s

Fig. 5.33 - Visits in V

enice and availability indexes for main cultural attractions.

Years 1995-2000.

0 50

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250Jan-95Mar-95May-95Jul-95Sep-95Nov-95Jan-96Mar-96May-96Jul-96Sep-96Nov-96Jan-97Mar-97May-97Jul-97Sep-97

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Visits to Venice

res. tourists in HC

est. excursionistsaggregate m

useums

churches"central" m

useums

"peripheral" museum

s

Fig. 5.34 - Visits in V

enice (right Y axis) and crow

ding indexes (left Y axis) for

main cultural attraction categories. M

onthly data, years 1995-2000.

159

The second indicator (crowding index) renders the space available per visitor-hour in the ensemble of cultural institutions considered. This indicator can be interpreted as a measure of comfort for visitors (the higher the index, the higher the quality of the visit). However, it could also be a measure of performance of the cultural institutions: given the available space, organisations should try to fill them with visitors subject to the constraint of a “comfortable” visit. Therefore, this indicator should be neither too high nor too low. In fact, the sequence in Fig. 5.34 displays a pronounced seasonal variability. Whereas crowding gets more intense in peak periods, the index seems sensitive to variations in the overnight stays and less so with respect to excursions, revealing that the excursionists' flow might be less willing to visit cultural manifestations than overnight staying tourists. That is confirmed by statistical analysis: regressions of the museum visits run on tourists' and excursionists’ flows in the period 1995-200059 show that the visits to museums are influenced by overnight stays in the city and exhibit a certain time persistency. Excursions have a minor (positive) influence on central visits, but a negative effect on the visits to peripheral museums. A closer analysis of the visitors’ mix suggests that while overnight-stayers actually visit museums with a stable attitude (the visiting rate is the same in peak periods for overnight stays and off-peak), the excursionists are more variable (the visiting rates are significantly higher off-peak for day visits). Since intuitively we would expect visits to any museums to be higher when visits to the city increase, this information needs to be interpreted. One possible reason for this divergence is that whereas the cultural motivation is strong for overnight staying tourists, excursionists are more easily discouraged from cultural visits when the city is crowded, the more so since many of them are actually “one-day-off” vacationers. Thus, when the city is actually crowded – as occurs during the months of July-September, when day visits reach their peak (cf. Fig. A1 in the Annex), central, easy-to-find museums are visited up to their capacity within the constraint of the time-budget by the median visitor. However, peripheral attractions are more difficult to find and appear less attractive.

A closer investigation of the seasonal pattern of visits to the cultural institutions reveals that there are specific periods of the year in which over-crowding occurs. Typically, the winter

59 Linear regression is impossible because of the auto-correlation of residuals that signals the presence of an auto-regressive component. Therefore we estimated an AR(1) model as the following:

Ct = a1Ct-1+ a2Tt+ a3Et+ν,

where C = visits to cultural institutions, T = overnight stays, E = excursionists, ai, i=1,2,3 are the regression parameters, ν is a standard error and t is the time notation (months). The maximum likelihood estimates referring to the model for visits to the "central" museums (those insisting in the St. Mark's area and main corridors) are the following (t statistics in parenthesis, * indicates 0.05 significance).

)1.1(*)02.14(*)88.3(1 01.0346.043.0 tttt ETCC ++= −

Excursionists are therefore insignificant at the .05 significance level. The fit of the model is given by the log likelihood –2LogL = -807.52. The estimate of the model for the "peripheral" museums (all the others) yields these results:

*)03.2(*)90.14(*)61.6(1 02.032.063.0

−− −+= tttt ETCC

This time, excursionists are negatively significant at the .05 significance level. The fit of the model is given by the log likelihood –2LogL = -794.76.

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months of December-January display a generalised fall in the visits, while in the spring months of April and May the museums and churches of Venice tend to be overcrowded. However, interestingly, in the summer months – when excursions reach their peak – only the central museums around St. Mark are crowded, while later in the year (in the “cultural months” of October-November), peripheral attractions tend to be crowded while central museums are used below their capacity. This confirms a somewhat cliché profiling of visitors: the typical summer vacationers, with less time available and scarcely motivated by the abundant cultural supply, tend to limit their visits to the “superstar” attractions, while “cultural visitors” who choose other periods for their visits, are rather attracted by alternative, specialised resources.

The conclusion may be that even if Venice markets itself as an art city of major importance, the return of its cultural system is disappointing. The city attracts too many visitors that are not drawn by its many cultural institutions, nor have the practical possibility to visit them. Overcrowding of the most central and popular attractions often goes together with under-utilisation of the peripheral or more specialised assets, but at many times of the year the performance of the cultural system could certainly be improved.

The hospitality sector

The analysis of the accommodation structure within the Historical Centre provides insight into the factors affecting the vicious circle operation. The maps that follow hereafter present the territorial structure of three variables regarding accommodation, such as the total (hotel + non hotel) capacity in number of beds, the average weighted price and the price / quality ratio (price per “star”). The scale is that of the finest administrative sub-division available, that of 1991 census zones.

From Fig. 5.35, a concentration of hotels in two main areas emerges: the surroundings of St. Mark's square and the access area close to the Railway Station in the north-western part of the Historical Centre, where more than two thirds of the total hotel capacity are found. The price structure (mapped in Fig. 5.37) highlights some interesting peculiarities, which confirm to some extent the findings from the wider-scale regional analysis. In the St. Mark area, the high density of hotels translates into a higher price structure, due to the proximity to the most visited monuments and sites. In this area, the best hotels were opened in times when mass tourism was not yet there, and maintained a status and reputation advantage that allows them to charge the higher prices. The hotels built in the years of the “mass-tourism boom” position themselves at lower quality standards (see Fig. 5.36), and compete on other variables such as price and accessibility or the offer of modern facilities; they target a segment of travellers less attracted by traditional charm. These hotels are found especially in the proximity of the rail-road terminals, where the average number of “stars” is around 2.22 compared with more than three in the areas surrounding St. Mark.

The most recent trends show a significant diversification in the strategies pursued in the hotel sector. Newer hotels, and most noticeably non-hotel accommodation – such as guesthouses and bed and breakfast, which have increased in number following the deregulation act of 1999 – have detected expansion opportunities in less central and accessible areas of the HC. These areas are now appreciated by residential visitors, confronted with the congestion of central areas; the new facilities can thus charge high prices, enjoying a lower “location

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competition”, and at the same time boasting style and “cosiness”. Fig. 5.39 highlights how non-hotel accommodation is markedly located outside the “tourist districts” where it offers highly competitive prices (fig. 5.40) compared to hotel accommodation. The distribution of this accommodation capacity in the Historical Centre is highly skewed, revealing a “young” sector where a limited number of pioneer operators have entered the market at limited initial cost (e.g. making a couple of spare rooms available to tourists), especially in areas that act as “buffer zones” for the more congested central areas and corridors. Interesting information comes from the mapping of price/quality ratios in Fig. 5.38. This indicator discloses a highly mixed picture. Popular central areas such as those neighbouring St. Mark can charge higher prices for the same levels of quality. The same is true of areas where hotels are “isolated”. Other areas emerge as good price-for-quality and relatively un-congested districts, such as Salute, S. Apostoli and S. Stefano. In the rail-road terminal area quality sells cheap on account of the abundance of outlets that compete on accessibility at the expense of the quality of location. Finally, still other areas are cheaper options for overnight stays, owing to a mix of elements such as an appeal to specific well-informed market segments (as is the case of S. Margherita, which appeals especially to the “scientific travel” segment because of its proximity to the city’s universities).

Fig. 5.35 - Hotel capacity in the H

istorical Centre of V

enice, Year 2001, C

ensus Zones 1991

Skewness of distribution:

2.334

12345

legendahotel capacity

x ≥ 425200 < x ≤ 425140 < x ≤ 20060 < x ≤ 140

x ≤ 60* n. beds in hotel accom

modation

Fig. 5.36 - Hotel quality (av. n. of stars) in the H

istorical Centre of V

enice, Year 2001, C

ensus Zones 1991

Skewness of distribution:

0.154

12345

legendahotel quality4 < x ≤ 53 < x ≤ 42 < x ≤ 31 < x ≤ 2

x ≤ 1* av. n. of "stars"

Fig. 5.37 - Prices of hotel accomm

odation (double room) in the H

istorical Centre of V

enice, Year 2001, C

ensus Zones 1991.

Skewness of distribution: 3.143

12345

legendahotel pricex ≥ 400

193 < x ≤ 400143 < x ≤ 193120 < x ≤ 142

x ≤ 120* a

v. pric

e of a d

oub

le ro

om in EURO

Fig. 5.38 - Price-to-quality ratios (av. price of stars) in the Historical C

entre of Venice, Y

ear 2001, Census Z

ones 1991

Skewness of distribution:

4.606

12345* p

rice of a double room

/ stars

x ≤ 120120 < x ≤ 142143 < x ≤ 193193 < x ≤ 400

x ≥ 400price/quality index

legenda

Fig. 5.39 - Non-H

otel capacity (n. of beds) in the Historical C

entre of Venice, Y

ear 2001, Census Zones 1991

Skewness of distribution:

9.334

12345

13 < x ≤ 248 < x ≤ 14

x ≤ 8* estim

ated n. of bed

s in non-hotel accomm

odation

legendanon-hotel acc. capacity

x ≥ 3524 < x ≤ 35

Fig. 5.40 - Prices of non-hotel accomm

odation (double room) in the H

istorical Centre of V

enice, Year 2001, C

ensus Zones 1991

Skewness of distribution: 4.158

12345

legendanon-hotel price index

x ≥ 160100 < x ≤ 16090 < x ≤ 100

x ≤ 90not available

* estima

ted

n. of b

eds in non-hotel a

ccom

mo

da

tion

168

In conclusion, this analysis brings to the fore some interesting features in the accommodation market, which is a substantial part of the tourist system and one of the industries that – with its location and pricing behaviour – may contribute to the vicious circle development. First, proximity to the main cultural and landscape attractions, such as the main monuments and the lagoon, is a powerful location factor and allows operators to charge higher prices for given levels of quality. At the same time, two other location factors are increasingly important. One is accessibility; hotels and rooms for rent are developing around the main access terminals (rail, road and more recently water) and in those areas compete on price and “visibility”. The second is uniqueness and style; new, cheaper hotels are developed in areas not easily reached by mass tourism, and compete on the qualities of the external environment. In that way they can charge lower prices, and they attract those “allocentric” tourists that are less easily charmed by the buzz of being “close”. Such tourists behave in a similar way as false excursionists who give up central locations for the periphery.

The decline in the quality of the Venetian tourist product

Not just the hospitality sector has re-oriented its quality / price standards to meet a less informed and sophisticated demand. The decline in the quality of commercial outlets is even more unbridled. The result of such a process – which could escape any control or regulation targeting specific goods or categories – is a dramatic simplification of the economic base of the city, and is the more serious because it involves more directly the welfare of the residents.

Tab. 5.iv - Composition of the hospitality industry in Venice

TOURISM INDUSTRY

Accommodation Hotels, B&B, guesthouses, hostels, camp-parks

Catering Restaurants, bars, cafés, banquets, fast-food Entertainment Discos, festival halls, amusement parks, circus, cinemas Culture Museums, exhibition halls, theatres and auditoriums, art galleries, gardens Other facilities Welfare services, beach and health facilities TRANSPORT AND TRAVEL

Public and private transport Road transport companies, water transport (public and private), rail

Travel industry Travel agents, tour operators, guides

“PARA-TOURISM”

Commerce outlets Souvenirs, “Venetian specialities” Street vendors Food and beverage, leather, textiles Artisan outlets Art objects, glass workshops, lace

The “tourist cluster” of the city includes several sectors, as pointed out in the previous chapters. For the sake of our analysis, we include the categories listed below in Tab. 5.iv, distinguishing three branches, which we define as “tourist industry”, “transport and travel”, and “para-tourism”. With the last branch we identify those commerce activities or ancillary

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products that are generally directed to satisfying a visitor-generated demand, such as souvenir shops, glass and lace shops, etc. This sub-division helps us to make some important qualitative distinctions between those activities that are usually associated with the overnight-staying demand (such as accommodation and catering) and those that are observed to flourish in combination with heavy shares of day-trippers and groups among visitors. We will first consider the overall distribution of the “tourist industry”, excluding the accommodation sector that has already been evaluated earlier.

Fig. 5.41 illustrates the tendency of the secondary products to cluster around the main attraction areas. Restaurants and bars plus some other elements of the hospitality function such as travel agents and guides are found by the entry terminals to the Historical Centre and the linking corridors, though they are also present in considerable amounts in other parts of the city. This reflects the “transversality” of the industry, which targets not only the visitor group but also categories of city users such as businessmen, commuting workers and students. The indicator refers to the number of full-time employees and reflects only in part the dimension of an industry that relies heavily on part-time and seasonal workers, not to mention the informal jobs. Moreover, recall that these figures portray the situation at the moment of the last census in 1991.

The map in Fig. 5.42 on the other hand captures the location pattern of the so-called para-tourism sector. These activities are virtually absent from those parts of the city that are not touched by mass visitor flow. It should be noticed how the Rialto area, once a popular grocery market for residents, is becoming an increasingly “para-touristic” area owing to its location exactly midway on the main corridor between St. Mark's and the rail-road terminal. Less and less fish or vegetables can be found in the market stalls nowadays, and more and more souvenirs and pricey food and beverages.

Indeed, in a dynamic perspective, it is interesting to analyse the evolution these sectors have undergone in the last few years. In particular, we wish to see if there is a change in the absolute and relative weight of these sectors, which would be indicative of a re-orientation of the hospitality industry in response to the changes in the tourist market. Venice has for many years now experienced the replacement of activities targeting the resident population with tourism-oriented activities, a process already described by Prud'homme (1986).

Fig. 5.41 - Jobs in the tourism industry (excl. accom

modation) in the H

istorical Centre of V

enice, Year 2001, C

ensus Zones 1991

Skewness of distribution:

13.865

12345

legenda

tourism industry jobs

x ≥ 36070 < x ≤ 36018 < x ≤ 708 < x ≤ 18

x ≤ 8* n. em

ployees in tourism sector (excl. hotel and

transport)

Fig. 5.42 - Jobs in the “para-tourism” industry in the H

istorical Centre of V

enice, Year 2001, C

ensus Zones 1991

Skewness of distribution:

13.865

12345

legenda

para-tourism industry jobs

x ≥ 40090 < x ≤ 40021 < x ≤ 909 < x ≤ 21

x ≤ 9* n. o

f job

s in "pa

ra-tourism

" secto

r

172

However, this process has increased in complexity and occurs in several ways:

•= As a consequence of competition on the land market, a tourist activity can “buy out” a resident activity because the tourist market has a greater ´capacity to pay “than the local market. Think of a vegetable stall at the market that changes to selling plastic gondolas, or a house that is transformed in a hotel or put on the rental market. It is the classic type of crowding-out described by Prud'Homme.

•= A tourist activity “fills in” an empty space left by a closed down resident activity. Picture a restaurant that opens in an area of the city where the local demand is thin while a new market impulse is generated by the visitors' demand (e.g. the district surrounding the Biennale premises or the University area). In that sense, tourism development can be seen as a regeneration strategy for distressed areas. However, the danger is real that in fact its open the way to speculation on the real-estate market: owners would not invest in care for and preservation of buildings (some with historical value) because they expect to sell out to the tourist market, and in that way a large part of the built stock remains empty or declines.

•= A shop selling items that satisfy a resident demand diversifies or substitutes its supply to encompass goods that are attractive to tourists. For instance, a bakery that also sells cans of coca-cola or pizza slices. We refer to this as the touristification of supply.

•= More recently, a different kind of substitution has begun to emerge, within the tourist industry, with respect to quality. For instance, a luxury restaurant closes down and is replaced by a fast-food, or a hotel “loses a star”, or a traditional artisan is replaced by a souvenir vendor. We refer to this phenomenon as quality substitution.

The magnitude of such phenomena can be reconstructed with the help of surveys and studies of the recent changes in the commerce structure of Venice, on different territorial scales (Tabs. A.vii a – b in the Annex; cf. Van der Borg and Russo 1997b for the full analysis). At the city level, the data indicate a certain de-concentration of the tourist industry, with hotels and restaurants growing in the inland city possibly as a consequence of the enlarged scale of the Venetian tourist region. Within the Historical Centre, the analysis provides evidence of a further concentration of tourist activities in the most central areas of Venice’s historical centre. The map in Fig. 5.43 synthesises this information, highlighting in red the areas where a strong concentration of tourist assets is accompanied by a proliferation of para-tourist outlets, which are remarkably the same ones to which daily visitors flock because of their strict time budgets. Most tellingly, a noteworthy displacement is observed of activities related to the cultural, high-quality visits by others that are oriented to the low-elasticity segment of the visitors’ flow. In those areas, the main tourist routes of Venice are scattered with souvenir shops, pizza outlets and street vendors. The most renowned artisans, the good restaurants and the small typical shops are disappearing at a fast pace. Yellow areas remain relatively “free” from such ancillary activities, though changes have to be expected when new entry terminals will be opened, connecting the Historical Centre to the inland and littoral areas through water transport.

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Fig. 5.43 - “Touristicity” of different areas within Venice historical centre, according to the structure of tourist industry

This tourism-driven reorientation of the supply ends up curtailing the welfare of the residents, who must suffer the decrease in quality of the products sold: another factor that may explain the persistent outflow of residents from the centre of Venice. A second consequence is that, faced with the decline in quality of the Venetian tourist supply, an increasing number of potential tourists will be pushed to become commuters or to neglect the “cultural” motivation.

STEP 3 TESTED. The compression of time budgets and information sets associated with the extension of the FTR brings forward a change in the Venetian tourist product, affecting it at least from three points of view. a) The primary cultural products are used less efficiently, reducing the performance of the cultural system. b) Hotels compete on accessibility, lowering quality or increasing price / quality ratios; other accommodation compete on quality and “peripherality”. c) Other secondary products of lower quality (para-tourism) are concentrated along the main mobility axes and in these areas compete with higher quality outlets, reducing the overall quality of the tourist products.

5.3.4 Step 4 of the vicious circle

In this section, we discuss the possibility that the fourth and last stage of the Vicious Circle is active in the case of Venice, and if so, whether this is indeed reflected in a loss of competitiveness of the Venetian tourist system and in an unsustainable burden on the local economy.

174

Visitors’ behaviour and location choices

The data to validate the hypothesis of a feedback from quality cuts to visiting modes are scarce and fragmented. Yet, various sources (such as Costa and Manente 1995; ICARE 1998; Manente and Rizzi 1993; Scaramuzzi 1988; Van der Borg and Russo 1998, and numerous newspaper articles) provide evidence that:

•= even on peak days, the hotel rooms in the upper categories are not fully occupied, and this occurs with increasing frequency. It may be a clue that the demand for hospitality in the Historical Centre of Venice is becoming more elastic with respect to prices and quality.

•= The number of “repeat visitors” is decreasing60. Though the literature interprets an increase in repeat visits as a sign of decline of a destination (the destination is not able to capture virgin market segments and keeps on “picking” in the same origin market), it is our opinion that this judgement depends very much on the context. In the case of Venice, a decrease in interest from the “traditional”, high-paying segments and a simultaneous expansion of new origin markets – as encapsulated in the life-cycle interpretation provided in Ch. 3 – does not prove to be an improvement as far as the new market segments have a lesser capacity to pay and a less sustainable logistic behaviour.

•= The share of “group visits” with respect to individual tourists is increasing. The most recent information (Tab. A.ix in the Annex) estimates group visits at 32% of the total. This form of visit is especially popular among Asians (among which group visits total 82%) and Eastern Europeans (60%).

•= Tour operators are selling packages including daily visits to Venice that include overnight stays at increasingly distant locations (Verona, Bologna, Ravenna beaches). In particular, the analysis of Costa and Manente (1995:67) indicates that “repeat” visitors are the most likely to spend the night in the hinterland of Venice: those who have already visited the city, on their return are likely to come as “false excursionists”. A number of interviews with local travel agents clarified that there is a relation between the type of clientele and the location that is offered, especially to groups and other price-sensitive visitor types.

Such “clues” indicate that the prevalence of day trips as a means to visit Venice is less and less linked to the saturation of central accommodation, but rather the result of a decision which takes into consideration some of the perceived “costs” of sleeping in Venice, of which poor quality and accessibility are increasingly important components. As the concept of vicious circle suggests, the elements of distortion in the tourist use of the city become self-feeding, creating further distortions.

60 This information is particularly difficult to obtain due to the infrequency of the surveys made to the purpose, and to heterogeneity of the methodologies utilised through the years. We could nevertheless use two surveys of 1990 and 1997 (cf. Tab. A.viii in the Appendix). Taking into account the differences in the sample structures, we gather that on the share of repeat visitors is declining.

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Budget allocation, expenditure and leakage

The spatial allocation of costs and benefits determined by such choices is a crucial factor in the mode under investigation. In broad terms, a substantial part of the benefits tend to be “footloose”. Visitors purchase a tourist package including a visit to the main destination, or a hotel room in a site that may not be the main destination of their journey. When they indeed travel to the main destination, they spend part of their budget there, but impose costs as well. Cross-analysing the information of the previous sections with the available information on the excursionists' expenditure patterns, we get a broader picture of the financial “leakage” from Venice to the rest of the FTR. The extent of the economic leakage provoked by the expansion of the tourist region, with high-budget tourists accounting for only 35% of stays and day-trippers progressively increasing their share in the last ten years. Estimates (Manente and Rizzi 1993) suggest that the expenditure of a tourist is on average more than double that of an excursionist, and more than three times higher than that of a “real” day tripper (Tab. 5.v).

Tab. 5.v - Average daily expenditure of different visitor types (in USD 1994 = 1 LIT: 1600 USD)

domestic Foreigners (EU)

foreigners (overseas)

TOTAL

Staying visitors (tourists) 165.8 156.4 210.5 179.4

Excursionists 62.1 77.0 - 68.4

'real' excursionists 52.8 66.8 - 53.5

'false' excursionists 77.0 77.7 - 77.4

'indirect' excursionists 56.5 64.3 - 62.5

'passing' excursionists 106.6 111.6 - 110.0

Source: Elab. CISET in paper CISET 19/98

The difference in expenditure profiles is not only explained in terms of accommodation (which in the case of all types of excursionist but the “real” ones, is found in other destinations within the tourist region). In fact, expenditure in accommodation accounts for 45% of the daily expenditure of overnight staying visitors; however, the expenditure for other entries is almost always higher in the case of overnight staying visitors, as Tab. 5.vi shows. Only “recreation” expenditure, which includes visits to cultural assets, is more or less the same among all visitor categories. The variation among visitor types with respect to the propensity and composition of their expenditure is explained by the position that a visit to Venice has in determining their journey. False and passing excursionists are the most likely to be “cultural” tourists: they have chosen Venice as the main destination of their journey, and their expenditure profile replicates that of staying tourists. Domestic excursionists, possibly better informed, spend less on local transport and more on attractions. Real excursionists save money by bringing food with them and not caring about shopping, but they are willing to spend more in recreation and attractions. Their profile is similar to that of indirect excursionists.

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Tab. 5.vi - Average daily expenditure index per different visitor types and origins. Total tourists = 100 per each expenditure entry

TOTAL TOURISTS

“real” excursionists “false” excursionists “indirect” excursionists

“passing” excursionists

domestic foreigners domestic foreigners domestic foreigners domestic foreigners

Accommodation 100 0 0 0 0 0 0 0 0Food 100 44 88 88 88 44 58 101 101Local transport 100 47 65 56 77 56 77 120 144Recreation 100 151 92 111 92 111 92 100 100Shopping 100 58 41 67 68 69 72 117 130Other 100 119 48 119 48 119 48 119 33

TOTAL 100 29 37 43 43 31 36 59 62

Source: Own elab. from CISET 19/98

Recall that these are “daily” averages; tourists staying more days multiply their expenditure by the number of days (which is on average 2.73). However, the decision to visit the city as a tourist or as an excursionist does not seem to have an impact in terms of “cultural consumption”. Low-budget visitors (in terms of both time and money) consume the relatively price-inelastic cultural goods (in most cases priced on market considerations) and save money for items whose quality and quantity they can select.

This analysis, when linked to the information available on the origin of day trips to Venice, allows reconstructing to what extent excursions affect the spatial “balance” of costs and benefits originated by tourism in Venice. There is a mass of visitors that account for 70% of the daily volume of visits, but spend only 30%-40% of their budget in the city. The rest is spent in an area that takes in all the Region of Veneto and possibly to neighbouring regions, such as Friuli, Emilia Romagna and cross-border areas such as Istria and Sud-Tirol. As we have seen in Fig. 5.16, the extent of such leakage is proportional to the distance; however, the conclusion is that a substantial part of the attractiveness of the seaside resorts is their proximity to Venice. Moreover, their efforts to spread tourist flows in time prolonging the “season” seem to depend crucially on the possibility of combining the package with a daily visit to the historical city. Excursionists cost more to the city that overnight staying visitors, for a variety of reasons, among which the “inefficiency” that is implied in their mode of visiting, and the fact that – having no hotel room at their disposal – they use more of the “publicly available resources” such as dustbins, public spaces and restrooms, local transport, etc. On the other hand, they make little profit to the city, and especially spend less on those items (shopping, hotels, restaurants, attractions) that represent the “qualitative” part of the tourist supply.

STEP 4 TESTED. Though we don’t dispose of data that give evidence of a feedback from the decline in quality of the tourist products to the location and expenditure choices of visitors, a number of clues suggest that visitors and tour operators are indeed reacting to the transformations on the demand side by spending less on cultural products in the city and more in secondary products outside of the city. As a consequence, the city is less of competitive, and the resources necessary to conserve the primary products leak out of the city’s economy.

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5.3.5 Tourism development in Venice: synthesis and long-term trends

The various analyses carried out in this case study seem to reflect fairly well the assumptions of the vicious circle model of tourism development. The case of Venice exemplifies a situation in which the accommodation capacity of the city is insufficient to host the mass of visitors that wish to see the city, in almost every period of the year. Many visitors have to resort to accommodation in the periphery of the region, in the proximity of the city but also at farther distances. This mode of visiting the city, being a visitor but not residing in the city for the night, is also popular among other categories of visitors, like backpackers and low-budget travellers, those who planned a multi-destination visit – e.g. Venice plus another art city in the North-East area of Italy – and those who have specific requirements regarding accessibility, landscape amenities or quality. Finally, it is typically a case for seaside vacationers who take advantage of the proximity of Venice to spend a day in the city.

This heterogeneity of visitors’ experiences and their logistics is reflected in the multi-faceted specialisation of the regional territory. Some areas of the hinterland, whose function is that of “buffer areas” with respect to the main destination area, have a price/quality structure that replicates that of the historical centre, where the most appreciated element is the proximity to the attractions of the city. Other areas have intrinsic factors of attractiveness (e.g. the sea, cultural assets or amenities), and therefore display an “autonomous” market structure within the system pivoted on Venice. Among these, some areas possess a mature industry where competition is based on prices and accessibility (e.g. the seaside areas). Others (e.g. the Brenta Riviera, the Portogruaro Municipality, the south bank of the lagoon) do have elements of attractiveness that are not exploited by the development of a local tourist industry.

In that context, such heterogeneity is “compressed” when it comes to visiting the city. Because of the limitation of time and information that is inherent in the “excursionists” mode of visiting the city, the itineraries of the visitors are scarcely diversified, and episodes of simultaneous overcrowding of the central attractions and under-utilisation of the “peripheral” heritage are observed. The proximity to the central attractions (that is generally matched by good quality standards) supports rent extraction from the tourist operators, but because of the enormous crowding of central areas, other location factors become attractive (especially for hotels and restaurants), such as external accessibility and “isolation”.

The overall consequence of these dynamics is:

•= a leakage of tourist expenditure from the centre of the tourist region to the periphery, that goes together with a concentration of costs;

•= a decline in the quality of the tourist system (cutting back on quality pays);

•= a loss of relevance of the system of cultural attractions as “revenue generators”;

•= polarisation of the city and the regional territory according to the main factors affecting the tourist market, such as accessibility and quality.

In the long term, these elements may bring forth a reduction in the attraction capacity of the destination area, to the extent that tourists would react negatively to such elements as the physical degradation of monuments, the aesthetic decline in open urban spaces and outlets, the loss of diversity in the cultural supply, and the increased “suburbanisation” of tourist

178

services and facilities. In particular, these factors are likely to affect those visitor segments that have a higher propensity to pay for a cultural experience but are more sensitive to cultural and environmental quality.

Tab. 5.vii - Growth rates of overnight stays in Venice tourism region (1951-2000)

period pre-1950 1950-1975 1975-2000 2000-?

core ++ + = –

periphery = + ++ +

In conclusion, there is evidence that the present growth – mainly pushed by day-trips – may eventually turn to stagnation and decline, to the extent that the declining quality of the tourist products reduces the attractiveness of the city for visitors. The life-cycle of Venice as a tourist destination can be interpreted, then, as a historical evolution from a stage in which visitors were mainly attracted in the central areas, to a stage in which there is a relative spread in the region, and eventually to a stage of absolute dispersion. In the scheme of Tab. 5.vii, after the first two stages of growth, the dynamics of the vicious circle exert their effects, leading to stagnation and to a possible decline in visiting.

5.4 A new approach to tourist policy for a sustainable Venice

The analysis in section 5.3 identifies a number of elements of distortion and self-destruction in the Venetian tourist system. However, it also hints at opportunities for change and sustainable development. In this section, we will analyse the shortcomings of tourist policy in Venice when benchmarked against the framework developed in this thesis, and give recommendations on how to bring cultural tourism back to the centre stage as an engine of urban regeneration. Restructuring tourist policy requires first and foremost coming to terms with the factors that may determine a decline in the competitiveness of the tourist product. With straightforward application of the policy rule presented in section 4.3, some corrective actions can be proposed.

5.4.1 Tourist policy in Venice: benchmark and recommendations

In the case of Venice, the vicious circle has probably developed to the full. In section 5.3 we presented evidence that the first three steps are active, and clues that the feedback mechanism that represents the last step of the cycle may be working. Policy therefore should attack integrally all of the steps of development of the vicious circle:

•= to contain the expansion of the “tourist region”, favouring overnight stays;

•= to rationalise the mode of tourist use of – and access to – the city;

•= to interrupt or limit the decline of quality of tourist products;

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•= to organise and market culture in such a way as to increase the value generated and sold in the tourist system.

Regulation vs. selection: towards a policy of incentives

The immense potential demand for Venice as a destination exceeds the accommodation capacity of the city, whatever the expansion expected for the next years. That is a given fact, and if tourist policy insists on trying to regulate the tidal wave of visitors by putting up barriers, the outcomes will remain disappointing. In fact, the first attempts to regulate the tourist flows resulted in a more or less explicit policy of restrictions. The number of tourist beds in the Historical Centre has been limited by regulation to 11,000. Moreover, whole portions of the city space have been virtually secluded to tourism, as access routes to the Historical Centre continue to be limited and largely command the mobility patterns inside it.

Instead, the city should seek to extend enhance its hospitality in a qualitative sense, targeting especially those segments that are most likely to appreciate the cultural richness of the city, or – thinking forward – the young persons that could be turned into the high-spending cultural visitors of tomorrow. Today, the limits to the accommodation capacity of the city work as a “regulation mode” indiscriminately towards all visitor types. When hotels are full, or the main attractions of the city are over-congested, visitors who are really curious and attracted by the cultural supply of the city are chased away in the same fashion as occasional, uninformed visitors. The bad reputation of Venice as far as prices (and treatment) in restaurants, gondolas and other tourist facilities are concerned, also represents an informal means of regulation. The unwanted result of these measures has been further to push the “excursionist” mode of use of the city, reducing the reach of “formal” regulation tools. The problem of managing the visitors’ flows, as suggested in section 4.1, can be dealt either by adopting a demand-side approach, a supply-side approach, or a systemic, or “synergetic” approach that explicitly considers the environmental and organisational variables along with the tourist market itself. For too long, tourism policy in Venice has insisted on the first of these options only, merely relying on management tools of the “hard” type, with noticeably poor results.

The poor return of an approach all focusing on demand regulation – perhaps hiding the lack of any approach whatsoever – has started to be acknowledged by decision-makers and sectors of the public opinion since not more than a decade. However, it would probably never have reached the top of the political agenda were it not for a series of accidental events. First of all, the boom of day visits from former communist countries occurred in the late 1980s. The new flows would spend practically nothing, pushed congestion to the extreme, and produced a lot of waste, for which Venetians came to pay the highest collection tax rate in Italy. The public resentment, misunderstood at that time for “tourist racism”, made it decisively clear and substantial that not all tourism is good and that tourism may change for the worse if unguided, hence the necessity of sound tourist marketing and management policies. The argument was reinforced by two dramatic incidents: the concert of Pink Floyd off St. Mark Square in 1989 – the event attracted a crowd of more than 100,000 without adequate facilities for resting, sleeping or restoring being set up, paralysing the city for days – and the fire that destroyed the city's prestigious theatre La Fenice in 1995. Another threatening mass event, the International Expo 2000 advocated by part of the then-ruling political forces as a “last chance” for modernisation, was finally turned down after the mobilisation of the public opinion, supported by national and international organisations. It was then finally accepted that the management

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of tourism had to change, that the cultural heritage was a precious resource demanding preservation, and that tourism had to be a lever and not an impediment to other activities. More regulation seems intuitively the wrong way to instil more efficiency in the visits.

However, sustainable tourism, as is now accepted by various commentators, does not require passing from excessive regulation to no rules at all, but wise and integral management tools, centred on the resources that Venice already possesses, and based on sound strategic planning. The recent deregulation of the private bed & breakfast market seems the right move in the direction of intercepting a share of visitors who would not otherwise have the means for an overnight stay in the city, at the same time recuperating a part of the ample idle housing stock of Venice with a new economic function. A policy of incentives and differential pricing, like the one timidly started by the city with such initiatives as the Venice Card (described later) and the imposition of tickets on undesirable means of reaching the city (big boats and coaches), is finally consistent with the idea of a “selective marketing” of the city’ attractiveness.

From “city vs. hinterland” to “cultural region”

The policy rule of section 4.2 prescribes that if the first step of the vicious circle is active, a destination should consider the consequences (the enlargement of FTRs), and proactively seek to minimise the unbalances in the territorial organisation of tourism. The expansion of the tourist region that attended the explosion of day-trips was unaccompanied by any attempt of planning the development of a destination area around Venice. Neighbouring municipalities just behaved like free riders, investing in the hospitality sector but not in primary products or place amenities. That entailed a “bi-polar” structure of the region, where culture is concentrated in the Historical Centre of Venice, while accommodation (the “for-profit” side of the market) is dispersed. As a consequence, there are strong, one-way mobility flows from the centre to the periphery.

No kind of agreement or partnership for the regulation and management of visitors’ flows has been even attempted for many years. Indeed, the motive for making regional partnerships is there; it hinges on the development of “cultural regions” where the tensions between centre and periphery can be recomposed. In the case of the Veneto region, it is impossible or undesirable to “close” the city off from its hinterland; it is possible, however, to “spread” the cultural content over a larger portion of territory. The implication is that actors and institutions, both private and public, which so far have been completely passive in the system, merely exploiting their proximity and price-competitiveness to Venice to intercept part of the tourist flow, are led to take on some of the management and investment costs especially regarding culture. In change, they can enjoy some of the intangible benefits accruing to tourist destinations, such as a better socio-cultural environment and a higher “exposure” to the flows of knowledge and goods associated with international tourism.

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Eraclea Lido / Estuary Inland areas VeniceFiesso d'Artico Caorle Chioggia PadovaIesolo TrevisoBibione VeronaCavallino-Treporti VicenzaQuarto d'Altino Dolo Mira BellunoSpinea Noale RovigoSalzano StraMeoloMiranoSan Donà di PiaveMarcon Santa Maria di Sala PortogruaroScorze'Annone VenetoCampagnalupiaCavarzereFossalta di PiaveFossòGruaroNoventa di PiaveSanto Stino di LivenzaVigonovoMartellago Concordia SagittariaCampolongo MaggioreCamponogaraCeggiaCinto CaomaggioreConaFossalta di PortogruaroMusile di PiavePianigaPramaggioreTeglio VenetoTorre di Mosto

VERY LOW LOW HIGH VERY HIGH

tour

ist i

nten

sity

cultural attractiveness

VERY HIGH

HIGH

LOW

VERY LOW

POTENTIAL FOR DIVERSIFICATION OF TOURISMSUPPLY

POTENTIAL FOR VALORIZATION OF CULTURALHERITAGE

Fig. 5.44 a - Cultural attractiveness, tourist intensity and potential for tourist tress. Municipalities in Province of Venice and other provincial capital cities in Veneto region.

Legenda: Very high touristicity High touristicity Low touristicity Very low touristicity

APT 04 Bibione e Caorle APT 12 Garda APT 06 Venezia

APT 05 Jesolo e Eraclea

APT 07 Chioggia APT 09 Terme euganee

APT 11 Alt. Di AsiagoAPT 01 Cortina APT 02 BellunoAPT 14 Rovigo

APT 03 Treviso APT 08 PadovaAPT 10 VicenzaAPT 13 Verona

VERY LOW LOW HIGH VERY HIGHcultural attractiveness

VERY HIGH

HIGH

LOW

VERY LOWtour

ist i

nten

sity

POTENTIAL FOR DIVERSIFICATION OF TOURISMSUPPLY

POTENTIAL FOR VALORIZATION OFCULTURAL HERITAGE

Fig. 5.44 b - Cultural attractiveness, tourist intensity and potential for tourist tress. APTs in Veneto region.

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However, costs and benefits from such partnerships would be carefully assessed, and are open to misperceptions. “Tangible” costs will inevitably weigh more than intangible benefits in the decision-making process. Moreover, economically the hinterland of Venice is wealthy enough not to have a decisive interest in a different development paradigm. This may explain why experiments like ALATA (described in section 5.4.2) have failed. The lesson is that governance considerations play a crucial role in the implementation of sustainable tourist strategies. One is the organising capacity to persuade these actors to share responsibility in the system management; and to communicate clearly and effectively the benefits expected from the regional partnerships.

But what may be in practice a development strategy regarding the Venice FTR as a whole? The data on culture presented in sub-section 5.3.2 can be crossed with tourism indicators to highlight weaknesses and opportunities with respect to the valorisation and use of the heritage. The diagrams in Figg. 5.44 a - b organise the information regarding tourist intensity and cultural attractiveness, notably for the Province and the Region. A “matrix of opportunities” is thus obtained, assessing the potential for development of 16 groups of cities/APTs. The information regarding the touristicity – and hence the potential for tourist stress – can be added to the analysis. The darker cells identify areas with a higher-than-average potential stress. These areas seem to be concentrated in the upper-left part of the diagram; they mostly identify “recreation” districts.

Areas where tourism is underdeveloped in spite of their cultural attractiveness appear in the lower right region of the matrix in Fig. 5.44 b. Those among such areas that do not suffer from tourist stress (the lighter-shaded boxes) can put forward strategies to promote their cultural relevance and variety (orange-dotted region), improving their infrastructure for cultural tourism. As a result, they may expect to improve their market performance and to contribute at the same time to a better balance of cultural tourist flows on the territory.

The areas included in the blue-dotted region have a high attraction capacity that is not connected with their cultural resources. However, they can utilise their strong market position and their proximity to main cultural destinations to diversify their product mix, developing new cultural attractions to be promoted in conjunction with existing central assets. In that way, such sites may prolong their “season”, hoping to increase their market profile for higher-paying visitors. At the same time, they help to rationalise the cultural supply on the territory, making it possible to spread the pressure on central assets 61.

Information and quality: towards a policy of “signals”

Following with this account according to the vicious circle scheme, the decline in quality in the Venetian complementary tourist market went on, unbridled, favoured by relaxed national regulations on patents and land use. Social elements played a role in accelerating these processes. A fact often mentioned is that the social base of the historical city is declining. Many workers in the industry are in fact not residents of Venice, and this reduces the local multiplier effect, perhaps making it likelier for operators to contribute to the generation of 61 The analysis of APTs (Fig. 5.44 b) is more accurate because at this level, the actual visitor flows are known and hence tourist stress is exactly defined. Again, a number of areas in the orange region should decidedly point to increase their market performance in cultural tourism, while other areas in the blue region could “use” culture to diversity and strengthen their position in the recreation market.

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negative externalities. Since they are not citizens themselves, operators do not care about the costs to preserve the aesthetic quality of the landscape, and they tend to abuse the resources that they are not charged for – hence glossy window shops, noisy vending activities, restaurants that occupy more public space than they are allowed, etc.

The administrations in Venice have so far adopted a “follower” approach in this process, for instance regularising or tolerating illegal activities, limiting the possibility of changed use, or finally subsidising the location of non-tourist activities. Little has been done, however, to eliminate the source of quality declines. Virtually no label system has ever been implemented; little attention has been devoted to information policies; and no attempt has been made to promote the “quality” segment of the hospitality market.

True, the availability of powerful information tools is relatively recent, and with it the range of strategies that can be deployed. However, the city could have done more in the past to prevent the proliferation of businesses and behaviour that are largely unsustainable and that cannot be easily dismantled at this stage. Moreover, the theme of tourism development has hardly been tackled at the relevant territorial level. In the Venetian system, the functions related to tourism management are sharply divided. The city does the regulation, the region provides much of the infrastructure, and the province takes care of the promotion. In sub-section 4.1.3 we listed some actions that are likely to diminish “information asymmetries” and to mitigate the incentives for operators to cut on quality. Let us put these actions in the Venetian context.

- Fixation of quality standard with the concession of a “quality label” to outlets selling typical artisan products (carnival masks, textiles, crafts, art glass), provided they are produced in the region.

- Publication of official listings of prices for guided tours, boat trips, restaurant meals, and diffusion of this information via the Internet and the main tourist brochures (allowing a link with pre-booking facilities for instance through the Venice Card).

- Efficient organisation of itineraries. Today, visitors access Venice by road and boat by a limited number of entry points. However, before getting to Venice they don’t find any “information” terminal that allows them to put together an informed experience. These terminals can be easily set up at the main access points (e.g. train, bus and boat stations by the seaside resorts, rest areas along the motorways, park areas). They can be interactive ICT-aided touch-screens that help visitors to compose an itinerary according to their own profiles (with children / age / groups/ etc.), their time budget, their preferred themes, and their willingness to visit museums, galleries and events. The admission tickets could be purchased in advance with suggested visiting times to reduce congestion at peak days. The system can also work out a list of “convenient” facilities and labelled outlets along these routes, and promote alternative cultural and accommodation opportunities. Finally, it provides information on facilities like restrooms, banks, and police stations, and prints it all on a small map. During their visits, visitors are constantly informed and guided through their GMS.

Redefining the Venetian cultural product

The cultural system of Venice is clearly malfunctioning in terms of marketing, co-ordination and commercial policies for the historical heritage. Once a clear and effective policy for the

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management of visitors in space and time is developed, the relevance of the cultural system may be expected to grow. Our analysis stresses that the “cultural crisis” of Venice is largely determined by the configuration of the tourist market. The question is simple: the Venetian cultural supply is so vast that in principle it could satisfy the demands of a public with quite different preferences, if it were adequately informed, had the possibility to book their visits, would be in the position fully to interpret and appreciate what is on display, and could combine their own visit with opportunities for leisure and entertainment. When access to the city becomes problematic, the very interest for its cultural supply diminishes, as well as the willingness to pay for it. Thus, the capacity of the most central cultural institutions becomes a bottleneck to the whole network. A yearly-congested Dukes’ Palace may well cause a leakage of visits to some adjacent attractions (as is shown by survey data in ICARE 1997), but it is also likely to decrease the proportion of tourists coming – or returning – to Venice for a cultural visit. In that way, the competitiveness of the city as a tourist destination is seriously affected, as suggested by the vicious circle model. This is a matter of for visitor management and strategic marketing. The challenge faced by the government is to select one or more targets, provide information and incentives for “aware” visits, and spatially manage tourist and cultural resources in such a way that the quality of the tourist experience is enhanced.

However, the development of a cluster economy based on culture – and hence the idea that the cultural tourism can become a lever for urban regeneration – puts an additional accent on content and on the network organisation of the cultural sector. In that respect, points of concern should be the loss of relevance of the Biennale as a centre for arts production, the mis-management and loss of the Fenice Theatre, the incapacity of local higher education to produce the necessary pool of intellectual and entrepreneurial capital in the field of culture.

In that vein of reasoning, the “cultural branding” of the city should be strengthened and extended to newer products. Venice hosts plenty of prestigious institutions, like Biennale and the Guggenheim Foundation, which should have been given a more prominent role in supporting local artists and a lively cultural scene. The link between “high-art” and “underground culture” in Venice remains problematic, for lack of interest as well as physical resources to make new cultural production more visible. However, the City Hall can play a role in putting together these two realities, through making a wise use of locations for art. Today, the Biennale gardens and facilities are under-utilised. Cultural events targeting the young, locals and students, are staged in inadequate spaces and are short of funding. The city administration needs to realise that a tourism-led regeneration requires stronger support to such initiatives. The paradox of a city that is the Italian capital of cinema, but where only a couple of cinema halls are available in the Historical Centre, is telling.

These considerations extend to modern architecture. Just because Venice is a jewel as far as monumental heritage is concerned, it may well be a perfect setting for modern, top-quality architecture project, whose challenge would be to integrate harmoniously in the millenary texture, adding a dynamic image to it. It is not by chance that Venice hosts the prestigious Biennale of Architecture expo. All the best architects would love to use Venice as a show case of their skills, and the city can make the best out of this interest. So far, a “conservationist” attitude has prevailed, but opinions are now changing. It should be pointed out that this perspective is fully consistent with the image of a city that is able to diversify and enhance its cultural image to appeal to a whole world, at the same time putting its attractiveness at the service of a living community.

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Possibly, a new momentum has to be reached for a proactive cultural policy cycle. Bidding for hosting the Cultural Capital Event in 10 years’ time could be a good opportunity to achieve the change. The theme of the programme could be: «Re-inventing Venice». The bid would not be trivial. Hosting an event of that nature would for a city with consolidated world fame as a tourist destination mean to put itself in question, and to look for a new way to survive in the global world. In other cases, a bid for a similar event, successful or not, has been useful as a platform for sharing ideas and unite forces for a new development stage of a city 62. The survival of Venice is praised by many throughout the world, and the debate on its future has high intellectual relevance, so that the impact of such an event is likely to be perceptible.

5.4.2 Indicators for sustainable tourism in Venice

How to monitor and utilise the relevant information in the vicious circle model circle for progress towards sustainable Venice? Which indicators may “signal” that any step of the vicious circle is active? The “Decision Support System” of section 4.2 offers a template to use market and territorial data in order to calibrate policy consistently and effectively63. In our study of Venice we have measured many dimensions that contribute to form this judgement; we proceed highlighting the most relevant information that should be regularly monitored and utilised for tourist policy. The main measures are sub-divided in state, pressure and response indicators according to their nature, following the OECD suggestions. They are recapitulated in tables 5.viii – xi.

Step one – indicators of violation of the carrying capacity

Venice should keep its daily visitor flow as much as possible below the threshold of its accommodation capacity, achieving at the same time reasonably high occupation rates. The combination of these two measures means that the city makes the best out of its attraction potential, covering much of the management the costs from tourism without excessive leakage from the local economy. An important parameter in this account is the accommodation supply. In the last years, the deregulation act regarding the private room market has expanded the tourist capacity of the city to a sensible degree, and this process might go on as the idle housing stock in Venice is still conspicuous.

Today, occupation rates are almost to the full capacity though there are sensible variations among price categories. The number of excursionists however is persistently above the thresholds calculated by Canestrelli and Costa (1991). A target for tourism management in Venice is to decrease the number of those who come as daily visitors and “internalise” them in the overnight market. Any improvement in this sense could be observed through a reduction of the daily share of excursionists and a simultaneous increase in the occupation 62 Among the most recent, the cases of Glasgow and Antwerp, documented in Van den Berg et al. (1995), and Bruges (Russo 2002b). 63 In the context of the preparatory study for the Local Agenda 21 programme for Venice, a restricted list of indicators has indeed been identified, addressing the different aspects of sustainability (bio-diversity, use of physical resources, economic development, socio-cultural development, etc.). The city made little use of this information, however; and tourism in particular has stayed largely “unmeasured”. See various contributions in Musu 2000.

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rates. It is important to mark that increasing violations of the accommodation capacity would provoke a rise in the number of excursionists.

Tab. 5.viii - Indicators of “step 1” of the vicious circle

Indicator P-S-R Specifications / Time range Target

Demand Pressure Tourist demand can be measured in absolute (n. of yearly visitor arrivals) or in relative terms (tourist pressure, tourist stress)

Bring pressure to “acceptable” levels

Accommodation capacity State Per category; monthly Increase

Occupation rates Response Per category; monthly Keep high but under maximum (≤ 80%).

Yearly violations of carrying capacity

Response Per type of visitor; n. of days per year

Reduce

Step two – indicators of congestion/concentration

Congestion in the inner city determines the second step of operation of the circle. Though the specific characteristics of the FTRs influence the degree of concentration of the visitor flows, good indicators of it may be the time-span in which most of the daily arrivals and departures occurs, and the degree of spatial concentration of the visitors’ flows. A better spread over the day and over the territory is to be preferred, as is suggested in Tab. 5.ix. Both measures are derived from a monitoring of arrivals and departures through regular visitor surveys. Clearly, the location of tourist attractions in the territory and the number and location of entry points to the city may influence this outcome. A consequence of excessive concentration is the presence of congestions and strong reductions in the time and information budgets of visitors.

Tab. 5.ix - Indicators of “step 2” of the vicious circle

Indicator P-S-R Specifications / Time range Target

Number of entry points to the city

State N. of water / road / rail terminals Expand and spread over the territory in the historical centre

Time-budgets State Average duration of visits in n. oh hours

Expand

Concentration in time Response Time-span of top 80% arrivals in daily distribution

Increase

Concentration in space Response N. and location of attractions visited daily

Increase and spread over territory

Step three – indicators of quality

The failure to manage visitors flows in space and time, and consequently the reduction of time and information available to visitors, brings with it a number of consequences with the quality

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both in the primary and in the secondary tourist goods on offer. Eroded time budgets affect the performance of the cultural system and also imply a lesser capacity of the visitors to learn the quality of the goods. As a result, the cultural system performs worse than in its potential, and suppliers have an advantage if they lower quality to increase short-term profits. Both these outcomes have consequences for the competitiveness for the city as a destination. The main quality measures regarding culture and the tourist market to be kept under control are listed in Tab. 5.x. For what regards culture, availability and crowding indexes may get worse as a result of increased congestion.

Tab. 5.x - Indicators of “step 3” of the vicious circle

Indicator P-S-R Specifications / Time range Target

Quality of the cultural system

State Crowding index. Daily and monthly measures

Reduce in more congested attractions and keep in balance over the cultural system

Price-quality ratios State Prices of goods of given quality Keep quality above minimum level / price quality rations in line with national average

Quality of tourist product Response Extent of supply in given quality category (e.g. Hotel rooms and restaurants per category)

Maintain high quality, keep a diverse range of categories

Performance of cultural system

Response Availability index Keep high

The mark-up of the model exposed in Section 3.3 can be captured in terms of a price differential between tourist prices in the destinations and the price of the same items in other destinations that are not subject to the life-cycle dynamics, for equal levels of quality. This can be done relatively easily with respect to goods that are classified according to their quality, like for instance hotels or restaurants. As a result of profitable quality-cuts, high-quality suppliers will be driven out of the market. Alternatively, one has to look for simpler measures (n. of hotel rooms in a certain category, n. of restaurants in a certain category, diversification of the commercial supply etc.).

Step four – indicators of performance of the cultural system

The worsened conditions of the cultural system negatively affect the overall attraction capacity for the whole destination area. Some “signals” may indicate that the last step of the vicious circle operates, like a shift of hotel occupancy from the centre to the periphery (with the hotel price gradient becoming flatter), a decrease in the rate of “return” tourists, or a decrease of average duration of stays (especially in higher category hotels). Declining occupation rates and low return rates in the centre of the tourist system associated with increasing occupation rates in the periphery would be evidence of a loss of economic relevance of the centre with respect to the periphery. All such measures are indicative of a bad “state” of the system. A number of “contextual” factors may increase the likeliness of this

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outcome, like the extension of Venice’s FTR over the municipal of provincial boundaries, and the system of regional redistribution of resources from tourism to heritage preservation.

Tab. 5.xi - Indicators of “step 4” of the vicious circle

Indicator P-S-R Specifications / Time range Target

Rate of “returns” State Per visitor category; yearly rates Increase

Average duration of stay

State Of overnight staying tourists Increase

Extension of FTR Response To be compared with institutional structure of area involved

Match with tourism management authority

Reading and using the data – a PSR model for Venice

The data listed in Tabs. 5.viii – 5.xi can be collected and utilised as a monitoring and decision system at every stage of the planning process, as suggested by the PSR model. In Fig. 5.45, the PSR model has been adapted to the context of Venice. The “pressure factor” in this system is the persisting violation of demand over the threshold of central accommodation capacity. This pressure determines the emergence of a FTR (step 1), which affects the time and information budgets of visitors (step 2) and hence the quality of the products on offer (step 3), both the primary (cultural system) and the secondary (tourist goods). This means that “central” visits lose their attractiveness and high-paying visitors are disaffected with the destination. The ensuing increase in the extension of the FTR (step 4) feeds back on the tourist pressure; mark, though, that persisting pressure may come from visitor segments with less desirable characteristics for the city, such as a lower willingness to pay for culture and a lesser awareness of its value.

Urban managers should seek to reduce the pressure from tourism, at the same time easing the conditions that transform this pressure in a source of instability and ultimately loss of competitiveness for the tourism economy. Hence the policy process should have integral features. It should proceed backwards: given the high levels of tourism demand, they should start by reducing the endogenous “disaffection” of high-paying demand segments by promoting and selling the cultural supply in a more effective way. Then it should make sure that quality is maintained; and that tourist flows are spread over a large destination area. Any change of the response indicators in the desired direction may give the measure of the success achieved.

Given the “exogenous” nature of tourism demand increases (which are largely independent from the “endogenous” nature of their mix and behaviour), we expect the source of pressure to be persistent. Hence, the process of monitoring and managing tourism according to the scheme in Fig. 5.45 has virtually no end. However well tourism may be managed, the increasing world trends of tourism will always create a pressure for unsustainable development. The tools that Venice can use to reduce the negative impacts of the present 12 million visitors could be inadequate if, in ten years’ time, the visitors to Venice will count 20 million, and there is no realistic way to stop the process. To solve structurally the conflicts and tensions that are implicit in the tourism development of a heritage city like Venice, a restructuring of the cultural tourist sector should be sought for, as claimed in Section 4.3.

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Tourist pressure Accommodation capacity High occupation rates / high number of yearly violations

Tourist attractiveness of site

Tourist pressure Time and information budgets

Tourist pressure

PRESSURE STATE RESPONSE

Market conditions for primary and secondary goods

STE

P 1

STE

P 2

STEP

3

STE

P 4

Lower availability of culture, worsened quality conditions

Increased congestion and concentration in time

Tourist pressure Attractiveness of Venice Historical Centre

Larger / less specialised FTR

Fig. 5.45 – A Pressure-State-Response model for Venice

5.4.3 Towards a “district economy”: new challenges and opportunities

Restructuring the cultural cluster in Venice can be the start of a new cycle of development, where tourism is a real lever to growth and not an impediment or a source of unbalance. The rest of the economy may then be regenerated as well. That may be a long and painful process, because it has to do with structural problems and global trends that are hardly in the control of city planners. Moreover, the organising capacity to accomplish a thorough change in policy orientation – though greatly improved in the last few years – might still be insufficient. The poor advancement in community-involvement programmes like Local 21 Agenda, the recurrent political crises, the declining confidence in politicians64, the increased power of groups up-holding sectarian and populist stances, the continuous bureaucratic impediments to the realisation of a wide-range revitalisation programme, the distance between the political colour of Venice and that of its region – these are all elements that add up to great difficulty

64 Only 50.7% of Venetians took part to the ballot for the recent election of the Mayor - an all-time low.

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in the capacity to change and implement a vision for a 21st century, post-fordist, sustainable Venice.

In the last three or four years the pressure to find sustainable and enduring solutions to the crisis of Venice has further increased, inspiring a wealth of initiatives. We present here, in chronological order65, a list of newspaper headings that is illustrative of recent trends in tourism, urban policy and the political environment.

The municipality becomes a company. Approved by the city government a reorganisation plan. (22/9/2000) Hit by stroke in the St. Mark’s cathedral. Rescue impeded by crowd. (12/10/2000) Glass «mafia» 25 m € per year. A new enquiry for racket activities. There’s no defence. (11-12/10/2000) Low-budget restoration? Not profitable anymore (14/10/2000) Segregated visitors and foreign lobbies. Tourist expenditure flees abroad. (14/10/2000) A multimedia archive at the Arsenal: the proposal of mayor Costa (18/10/2002) “We will grow, if the city backs up restructuring”. Rector Rispoli appeals for more modern and adequate higher education services. (4/11/2000) New stadium project launched. (18/11/2000) Marghera, land sanitation started. Historical agreement for the environment (29/11/2000) Expensive meals? You get a fine. Hit on restaurants, many appeal to court. (29/11/2000) The University of Architecture occupies the Historical Warehouses. The Mayor: Venice needs to understand that transformation is vital. (5/12/2000) The Alderman for Strategic planning: “Much museum culture, too little new economy. A problem to everybody” (19/12/2000) In Venice, bread 3 times more expensive than in Naples. High rents and flour distribution monopoly blamed. (20/12/2000) Life costs: Venice first in Italy. Prices increase 3.3% in 2000 against a 2.8% national average. (21/12/2000) Down with Calatrava’s bridge. The right-wing opposition: an expensive and useless project. (18/01/2001) Tronchetto, all changes. The City plans mall and new theatre in the run-down parking island of the city. (18/01/2001) The neighbourhood council: yes to Calatrava’s bridge. Enough with “old times mythology”. (26/01/2001) A card too much. Crisis between mayor and deputy mayor for the “Venice card”. (17/02/2001) “I decide”. Costa rushes on Venice Card. (17/02/2001) Calatrava’s bridge will happen. Agreement with Communists, the project goes to Council. (20/02/2001) It will become a world theatre. Costa estimates 0.3 m visitors per year and receipts for 18 m€ for Fenice theatre, due to re-open in 2003. (7/03/2002) Funds for “people mover” available. It will link road and ship terminals. (11/03/2001)

65 From various issues of the local newspaper “La Nuova Venezia”, on-line edition: http://www.nuovavenezia.it

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“Yes” in Venice, but not for real. Tour operators offer packages including fake wedding in Venice, puppet-mayor included. (11/03/2001) Head of hotel association calls: “Enough with low-quality tourism”. (24/04/2001) In the holy year, +5% overnight stays and +2.3% arrivals. More than 3 m arrivals, Germans decrease. (8/06/2001) Tourism, the real Holy Year is now. No low season anymore, inadequate services for welcoming the tourist invasion. Mayor: “Flows must be managed”. (8/06/2001) Biennale effect, the city fills up. Hotel managers cheer: “We need to divert excess customers in the mainland, they are educated and respectful visitors who care about the city”. (1/06/2001) Booming rents after deregulation of boarding houses. The new regional law affects residents and students’ housing markets. (20/05/2001) Venice, the cultural laboratory. The city invaded by music and exhibitions. (5/06/2001) Sport will give new life to the ex-gasometer. A project of the Provincial administration, municipal back-up is needed. (19/06/2001) Supporters will stop construction. No to the hypermarket-stadium. (12/07/2001) Stadium: breakdown between Venice A.C. president and Mayor. The City Hall: we’ll tender construction to others. (18/07/2001) The “Other City” of former Deputy-Mayor. Retailers, artisans, hoteliers join new lobby-foundation. (22/07/2001) Hot nights at S. Margherita. Local residents complain for noisy students’ square. “Yes to get-togethers, no to confusion”. (29/07/2001) Tourism, € 1,000 m “evaded”. Unions point their finger on “black” work and unpaid taxes in Venice. (7/08/2001) Venice repopulated, but with “foreigners”. In the Historical Centre 1,200 more inhabitants in one year: they all come from outside. (20/09/2001) Food retail, a spiralling fall. A new study: residents’ decrease, so long to traditional shops. (13/09/2001) A new law to defend shops. T-shirt and souvenir sales forbidden in Rialto, Castello, St. Margherita. St. Mark’s area exempted. (13/09/2001) The effects of 11 September: the Americans disappear. In total, 30% decrease in stays (11/10/2001) Small hotels grow, but just. Fight against bureaucracy: the hunt for skilled workers. (11/10/2001) Entrance ticket for visitors. It will apply to coach groups and tourist boats. It will bring € 10 M to the City cash. (20/12/2001) Venice Card: already controversial. The first criticism: “it is useless, better to limit access”. (15/01/2001) City invaded by 130,000 at Carnival. Riots in public boats, pickpockets arrested. Venetians turn against masks, police intervene. (11/02/2002) The Venice metropolitan area. A new plan: province abolished, new municipalities, competence for lagoon area unified. (13/02/2002) Tourism, a factory of waste. More than a third of the waste is produced by visitors. The City will spend additional € 11 m in collection this year. Venice is “for sale”. Tourist coach ticket starts today: prices range from 30 to 150 € per day. Controversy and doubts on the City Hall decision. (25/03/2002) A ticket to defend Venice. President of Region: “a hateful toll”. Retailers’ campaign against levy. (26/03/2002) Ticket extended to tourist boats. 10 checkpoints. Hoteliers withdraw appeal against coach ticket. (21/05/2002)

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City Hall opens “venture window” for investors in lagoon mega-projects. “Family jewels” on the market. (23/05/2002)

Reading between the lines gives us a flavour of the threats and opportunities for a sustainable relationship between the city and its tourism. The main themes can be synthesised as follows:

•= The Jubilee of the “Holy Year” 2000 led to a structural increase of visitors’ flows to the city, now invading the city almost on a daily basis.

•= As a consequence, strong regulatory measures have been taken, like the imposition of an entry ticket on group visitors and to some regulation of the supply-side transformation.

•= A pro-active city government is looking for ways to restructure the city’s economy, strongly upholding culture and new economy (and their mutual relation) in great attention, despite the opposition of interest groups and lobbies.

•= A host of new infrastructure and cultural projects have been launched to serve groups of new users and refresh the image of the city.

The new projects may finally trigger off a virtuous process, as they are likely to improve the spatial and industrial configuration of various elements in the Venetian tourist system. On the marketing side, the promotion and commercialisation of most cultural assets as an integrated system has been accepted, overcoming a long-lasting fragmentation in the management and ownership structure of cultural goods (common ticketing, co-ordination of events, web-sites, creation of marketing structures, etc.). Pro-active cultural marketing is a new thing for a city that used to consider its international fame sufficient to attract a steadily growing visitors’ flow. Moreover, an effort is being made to link the existing resources through advanced communication technologies, with the provision of on-line archive services and information facilities. Internal accessibility will be enhanced with the rationalisation of water transport, the diversification of access points to the HC and the creation of alternative itineraries. The municipality is planning a number of alternative water routes to connect the Historical Centre to access terminals in inland areas. An increasing number of day-trippers already use boats run by private companies to disembark island. In the absence of such facilities as signposts or kiosks, this would result in a simple shift of crowds from one part to the other. However, the city is by now convinced that the spatial management of the tourist flows must be pursued through an integral approach that also considers the accessibility and strategic location of the cultural supply.

Nowadays, more attention is paid to the quality and variety of cultural products. Prestigious projects (museums, concert-halls, meeting venues) have been launched, and modern architecture will add to the complex fabric of the city, providing a precious infrastructure for product diversification. On the regulation side, the 11,000-barrier to the expansion of tourist accommodation has finally been overcome. The Regional Law Nr. 49 of 1999 has deregulated the rent of private rooms, putting on the “legal” market a largely idle stock. But what is more important: it enlarges substantially the accommodation capacity that addresses the lower section of the visitor market, which is indeed the one that is more likely to “relocate” in the periphery of the region, triggering excursionism and spatial unbalance.

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Clearly, there is a shift towards a regulation policy based on “incentives”, with fees being charged to visitors coming to the city by coach or boats, which are reputedly less sustainable ways to visit the city than overnight stays. More in general, these measures represent a move towards the self-reinforcing dynamics of a “cultural cluster”. There is the attempt to bring together the existing resources, “make mass”, and sell it in an intelligent way, fully consistent with what is being done on the “demand side”. Those visitors who are interested in the treasures and lifestyle of the city are given preferred access, and put in situations where they can enjoy their cultural experience to the full.

An interesting point is that the application of ICT is making the difference in this new approach, permitting a smarter, wiser and ultimately more sustainable approach to visitor management. Moreover, it is based on the same technological platform that also allows the cultural-tourist cluster to evolve towards more flexible and effective organisation forms. The double layer of restructuring is proceeding at different speeds, with front-office applications opening the path, and back-office restructuring expected to follow. A first step in that direction has been taken by the Municipality, which has formed a public-private partnership for the electronic ticketing of four museums, the Cathedral and the Tower in St. Mark. Even if limited in scope, this project has opened a path which, if successful, can easily be extended to other levels of flow regulation, such as transport, terminals, the hotel and restaurant sector.

In particular, three “technological” projects represent natural extensions and refinements of this approach. Though not completely successful, they indicate what important role ICT may play in the reconfiguration of Venice’s tourism.

Visitor management in the tourist region: the ALATA system

ALATA (High-Adriatic Partnership for a Sustainable Tourism) was set up as a system for the management of the visitors’ flow accruing to the North-Eastern region of Italy on the occasion of the religious celebrations for the Holy Year of 2000. There was some concern that an excessive number of non-organised pilgrims on their way to Rome would cause intolerable congestion at the tourist destination. Venice was expecting an estimated additional flow of three million visitors motivated by the event. Hence the opportunity was seized to divert this flow to peripheral but well-equipped destinations with some cultural or religious attractiveness. In sum, the project's aim was to realise a telecom infrastructure and software for the collection, management, certification and redistribution of information among visitors' flows on the High Adriatic territory, as an input to just-in-time provision of facilities for welcoming, assisting, accommodating pilgrims and tourists and dealing with possible emergencies.

The system connected the existing transport, hotel, and catering structure by realising the “links” and providing dedicated facilities. The ALATA web site is a portal where the information on the destination area could be retrieved, allowing on-line reservation of accommodation and events. Whenever the central destination (Venice) reaches saturation or other, peripheral attractions have something to offer, that information becomes public and the incoming visitors can modify their itinerary accordingly, finding all the information that they need in one same "mall". Even though the system had to operate in an emergency situation during the year of the event (which in the end attracted fewer tourists than were expected), the ultimate aim of the ALATA partnership was to utilise this system in the “normal state”. The project was expected to achieve the multiple objective of co-ordination at the spatial level and

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promotion of selected facilities and attractions. It enlarges the spatial scale of Venice as a destination area, involving administrations that so far had played a passive role in the system, to become engaged, for one thing for the purpose of the organisation and management of the visits.

Yet, two year after the Holy Year, the momentum to keep actors with diverging interests together has vanished. The visitors’ flows went back to their structural trends and mix, so that they are hardly attracted by anything else but Venice. The motive to co-ordinate core and periphery of the system has lost impetus and, though it would be necessary to continue this experiment in order to achieve a more sustainable tourist system, the partnership has virtually disbanded. The front-office activities of ALATA are not funded anymore and back-office operations are hardly seen as necessary. The cause of this unfortunate outcome can be traced to the political problems of co-ordination between municipal administrations with different political colours, which had to finance the system from their ordinary budgets. In the circumstances, all those involved preferred promoting their individual place to supporting the whole system. Moreover, while in 1997 Internet was not far diffused; currently it is easier for small private operators to set up an information and booking system more competitive than ALATA. At present, the actors who have remained in the ALATA partnership are trying to reposition the service. ALATA provides the operation and booking system for the Venice Card and other local services, but obviously its potential extends to a wider territory. The challenge is to make it become commercially self-sufficient, which could be effected through a market-mediated relation with the operators in the system. However, in that new model ALATA risks losing its main advantage on the market for public-sector services, which means, for instance, selling museum services on line. That is a product that can really “bend” the tourist market.

Smart Cards for Tourist Reservations: the Venice Card

A second project that more closely focuses on the “cluster” characteristics of the cultural tourist system is Venice Card. This project had a long gestation. In origin, it developed as a project called CALYPSO, financed by the European Community (DG XIII). It foresaw the realisation of a smart card, providing a fan of services to citizens in a co-ordinated and user-friendly way, integrating payments and banking services, urban transport, student services, any kind of bookings and information to city users. The card was supposed to work as a “pass” (utilising “contact-less” technology) to access a variety of facilities and functions. CALYPSO has been on trial in four European cities (including Paris, Konstanz and Lisbon). In Venice, partners in the project are the main public and private operators in the field of transport, banking, municipal services, the universities, the museums and a consortium that manages the religious heritage. The development of this project foresees the issue of two types of card, one for local users and one for tourists, which can be “charged” with services and electronic money the very moment the visitors book their visit and receive the card.

The number of Cards issued is to be equal to the tolerance threshold, to be periodically determined. In that way, motivated cultural tourists get a better deal because they can more easily discover what is on offer, and then arrange their itineraries, expediently benefiting from free parking, access to limited-number events, reduced time in queues, reductions of transport fares, etc. At the same time, the city is better off because it attracts relatively high-spending and well-organised tourists. Incentives for advance-bookers represent a «juridically feasible

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and socially acceptable formula for having the visit to a heritage city paid for» (Di Monte and Scaramuzzi 1997), which, combined with telecom facilities, yields an intelligent way to market the city selectively and spatially/seasonally smooth the peaks. Overcoming the barriers to entry would make it possible to draw on the position rent on which such a large part of the Venetian tourist sub-economy lives, thus increasing the quality of the tourist experience.

The tourist card, called Venice Card and managed by a private company (of which the City is the principal shareholder), has been eventually introduced in 2001. Venice Card focuses «on the promotion of specific types of cultural consumption and their integration with other aspects of the service economy». The Card is purchased by tourists when they send in the booking for their accommodation, and physically collected upon arrival at the city’s terminals. However, the first version of the card is not a “smart card”, but a normal ticket, which works as a marketing tool but hardly achieves any logistic/management objective, and is insufficiently “flexible” for different kinds of tourist to compose their own itineraries in an interactive environment. That is due to the difficulty to get all the stakeholders to participate in the system right from the start, and to the related delay in putting up the necessary infrastructure. The Venice Card’s managing company has therefore opted for a two-step introduction, hoping to build up the consensus for the “smart” version of the card.

The “virtual heritage” of Venice

A third and last example (much less advanced in the implementation compared to the previous two) of the potential represented by ICT for sustainable tourism is the project of a “Virtual Museum”, which is being considered by the City Department of Museums. This facility should be located in the inland part of town, as a real “gateway” to the city's heritage. It will serve the city' cultural system as an integrated centre of cultural mediation and interpretation of the heritage, providing seamless access to the digital image of the resources that one can materially visit in the city, as well as live experiences with the history and environment of Venice. Looking at the heritage at such a spectacular and original angle, visitors come to understand the context in which this heritage has developed. In that way, the quality of their tourist experience improves enormously, as they are able to establish connections and organise their real visit around various themes and suggestions, thus escaping the “tourist bandwagon” cliché. The virtual museum has the potential to affect in the desired way the logistic structure of the visits and the behaviour of visitors – e.g. the willingness to pay for cultural resources and the return patterns. Finally, in the intentions of the planners, the “virtual museum” may become an incubator for local entrepreneurs in the media, design and cultural industries, generating precious knowledge and technical support for the development of an applied hi-tech vocation for the historical city.

The Virtual Museum project promises to bring forth a new attitude of visitors towards the cultural heritage of Venice, increasing its attractiveness and comprehensibility, and hence its capacity to generate value, while at the same time making tourists more curious and less predictable in the organisation of their cultural itineraries.

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5.4.4 Final remarks

As of today, the Historical Centre of Venice faces a persistent decline in its importance as an economic and administrative centre. Mass tourism, though generating jobs and revenues, indirectly contributes to the aggravation of such phenomena, imposing all sorts of external costs and eroding the socio-economic vitality of the city. It is unfortunate that not only is today’s excessive and uninformed tourism harmful to the local economy and society, but the very organisational foundations of a sustainable tourism development are hardly there. A shared and consistent vision of the city’s destiny is lacking, at least among the most influential stakeholders in the private sector. The City Hall does not have a strong and effective leadership in policy-making. An integral strategic policy to put the city’s cultural richness to good account is only now emerging through endless constrains and second thoughts.

However, most importantly, there seems to be no social consensus for a new stage of urban policy based on sustainable cultural tourism. Despite its indisputable weight in the local economy, tourism is blamed as the main culprit of the city's economic and political decline. At the same time, the city seems unable to survive without it, or to give a chance to other opportunities. Today, the faint illusion that tourism could restore Venice to the apogee of its economic power has faded once and for all. Obviously, there are two populations living in Venice as far as tourism is concerned. One, billing an estimated 900 M€ of yearly cash-flow from tourism (850 M€ in the historical centre alone), is hardly living and spending in the old city, and more often than not pays very little taxes on its enormous turnover66. The other is bearing and resenting the daily costs of a city invaded by tourism. The same disbelief aroused by tourism today seems to regard other activities reputed “snobbish” and not caring enough for the economic viability of its citizens, such as research and cultural institutions, the only growing sectors in the scanty island panorama.

The challenge is not to do away with tourism; which would be unwise and politically unacceptable, to say the least. It is how to manage tourism and the rest of the economy in accordance with the city’s aspirations, values and physical structure. The vision of Venice as the “meeting place” of an economically thriving region, infrastructure node and education centre, capital of culture and artistic production, patronised by well-educated and informed visitors, is gaining ground among the circles of scholars and sensible politicians. However, that promising future has to face the reality of a city that is sold for cheap to the huge crowds of visitors, and is abandoned on a daily basis by institutions and companies.

The projects recently undertaken by the city and its partner institutions have addressed the dimensions of sustainable tourism development analysed before, namely the spatial and the industrial level. In particular, the ICT projects are illustrative of the opportunities and threats for a policy change with respect to tourism management. ALATA might have helped to spread tourism in a more efficient and rational way across the territory, realising a soft demand regulation and associating it with high-quality services. Venice Card instead favours an “integral” approach to the management of cultural tourism, integrating the infrastructure for visitor service, lowering the “information barriers” which foster quality decline, and 66 According to the trade unions, tourism officially generates a turnover of almost 1,500 M€ in the province, but at least other 500 M€ are “submerged”. One out of every 5 employees does not have a regular work contract, and these are mostly “black” part time jobs (La Nuova Venezia, 7/08/2001).

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granting full access to cultural production and events, side-stepping the bottleneck represented by an intermediary sector which is not keen to invest in “novelty”. The points of integration and reciprocal self-reinforcement between the two projects are immediate. If ALATA would work as a “regional” infrastructure for the delivery of the Venice Card services (the more so once it will adopt the CALYPSO contactless technology), the cultural supply of Venice could extend to the whole tourist region. The “regional cultural cluster” could involve the tourist attractions in a wide territory, further improving the efficiency in the organisation of tourism.

However, these aspirations have only partly been fulfilled. The partiality of the approach is due to the lack of a sound organising capacity of the key policy makers; for instance, no leading regional actor was available to persuade all the relevant levels of government to revive the ALATA partnership. In short, though the “software” was excellent, the orgware, that is the capacity to make the system work, was still insufficient: this is perfect example of how in policy-making the governance process is as important as the elaboration of the content. For the future, sounder attempt at building a cohesive network of participants will be required. If the metropolitan-authority project is finally approved, that might be a decisional platform to engage in this sort of negotiation with the “outsiders” in the system.

To trigger a virtuous cycle of development that valorises the city's immense cultural heritage and prestige, it must be fully understood how the spiral of economic and social decline works, and what is the role of tourism in that process. Once the conditions for a sustainable tourism development are created, important synergies can be established with other “growth sectors”. The relations with the hinterland of Venice, economically wealthy but “passive” with respect to cultural tourism, are a critical point in such a restructuring process. Hopefully, this work has offered some insight to that effect.

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Tourism is both a threat and an opportunity for the sustainable development of cities. Heritage cities are urban areas where threats are greater than elsewhere, and at the same time tourism may possibly offer the only opportunity for a transition to the knowledge economy.

Arguably, the literature on tourism development is wide enough to provide sufficient answers to this dilemma in terms of management policy. However, that is not the case. Today, an increasing number of cities find themselves locked in a dangerous situation. They see tourism generating more problems than benefits to the local community, and at the same time they can hardly use the potential offered by culture to fulfil their ambition of entering the knowledge economy.

This work proposes a new interpretation of the relations between tourism development and the performance of culture, which is so poor as to have a negative effect on the competitiveness of cities and the opportunities for urban regeneration. The focus is on the spatial development of tourism in “Functional Tourist Regions”. Aspects of tourism development such as the changes in the visitors market and the decline in destination cycles are analysed in their interplay. My strongest assumption is that asymmetries in information, which result from the regionalisation of tourism, are at the base of an unbalanced development of inner city centres, a "heart" that pumps for a whole region, but cannot provide quality to their customers and diffused benefits to themselves. The consequence of short and uninformed visits – an outcome of the enlargement of FTRs – is a very change in the market behaviour of tourist operators, which ultimately affects the quality of the tourist experience and the possibility for the local economy to generate the resources that are needed for its heritage conservation.

The formalisation of a model (the “vicious circle”) to analyse the consequences of tourism development in and around heritage cities provides a ready-to-use framework for calibrating policy aiming at redressing these unbalances. According to this “decision support system”, visitor management should be proactive; and have a regional scope as well as an integral character.

The thesis then moves one step forward. Once tourism is prevented from becoming a source of unbalance, how does it become an engine for development of cities that wish to find a place in the knowledge economy? Heritage cities have status, cultural capital, and often a good international accessibility, but for tourism to become a real lever for a dynamic, value-generating economy, the organisation of tourism must be restructured and its potential

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liberated. Culture is an important element in the knowledge society, but in heritage cities, it is metabolised in a mass tourist market that is hardly compatible with the generation of development opportunities. Instead, this relation should be turned upside down. Culture should enrich the city, and sustainable tourism is a formidable medium for value generation. Cultural entrepreneurs represent the link – to be strengthened and actively supported by urban policy – between the "global" dimension of the tourism network and the "local" pool of resources that are available to heritage cities. The application of information and communication technologies (ICT) improves dramatically the possibility of managing visitors' flows and empower cultural entrepreneurs. Integrating tourism management with regional marketing in a comprehensive development strategy requires an innovative, integral governance approach. It should be based on capacity building and partnerships between actors with interests that may diverge, but can be reunited in the vision of a multi-polar regional cluster.

The last chapter has presented an example of tourism development of a heritage destination and its region, possibly the most famous tourist city of the world. The aims of the case study were to provide empirical evidence for the sequence of pressures and responses that we have conceptualised in the vicious circle; and to use this model to interpret and generalise these empirical findings. Relating our analysis with the research questions of Ch. 1, we find the following:

1. Is urban tourism likely to develop in a cyclical pattern? Our theoretical analysis supports the assumption that the cyclical pattern of tourism development holds in the case of heritage cities, where complete cycles have hardly been observed. The rationale is in the vicious circle model. Heritage cities present typical features that make the development of the vicious circle more likely. However, the model can be extended to all urban destinations in which the accommodation capacity is rather limited and the region presents alternative hospitality facilities.

2. What factors are relevant to explaining the (un)sustainable development of tourism? The vicious circle model is a mechanism of transmission in four steps from the diffusion of tourism activity in the FTR of a heritage city, to the decline in the attractiveness of a tourist region. The four steps (the first three of which were observed in the empirical case) can be conceived of as a logical sequence of cause-effect relations. Relevant variables to determine the full development of the vicious circle are: the accommodation capacity of the city vis-à-vis the tourist demand; the spatial configuration of the FTR; the extent of information asymmetries between demand and supply sides; the organisation of the cultural sector of the city; and the existence and effectiveness of a regional mechanism of governance of the cultural tourism system.

3. Does this model represent a theoretical advancement or a refinement with respect to existing models and descriptions of tourism development?

The vicious circle model represents indeed a theoretical advancement over existing models and descriptions of tourism development, because it links the structural characteristics of the destination to the functioning of the tourist market. The mechanism of transmission is also endogenously determined by the strategic behaviour of the actors involved in the tourist

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system, rather than by evolutions in the preferences and tastes of consumers. According to the vicious circle logical framework, unsustainable tourism is unavoidable if increases in the demand for tourism are persistent. To revert to a more sustainable path, traditional, top-down regulation is hardly practical, and short-lived as a management tool.

4. Is it possible to derive an appropriate policy scheme (or decision system) based on that model?

The structure of the vicious circle model, in which different factors explain subsequent steps towards unsustainable development, easily connects to a framework for policy. The Decision Support System illustrated in section 4.2, based on the PSR framework, allows policymakers to pursue sustainable tourism in an integral way, once they have a system of indicators in hand. That policy rule also allows benchmarking past and present strategies to identify possible mistakes. The analysis of Ch. 4 highlights that traditional tourist policy focuses mainly on the initial step of the vicious circle (e.g. enlarging the carrying capacity and / or constraining the flows) but hardly attacks the subsequent steps, namely, the declines in quality and the poor performance of cultural institutions. From the structure of the Decision Support System it follows that the only way to prevent structurally unsustainable tourism is to restructure the role and organisation of the cultural system. The “cultural-tourism cluster” is an organisational template for culture to develop in fruitful synergy with tourism and other sectors of the urban economy. In the cultural-tourism cluster, the conditions are established for a strategy of urban regeneration in which tourism plays a key role.

5. What are the main obstacles to the implementation of tourism-management policies? The various actions and strategies within the policy framework involve several players, territorial levels and interests, which may be hard to bring together. Hence the difficulty of implementing programmes of tourism regeneration. In particular, it is believed that the three spatial layers of relevance to tourism – the local, the global and the regional – are now largely disconnected and generating all sorts of conflicts in the process of industrialisation, commercialisation and management of a locality. Instead, the theoretical and empirical analysis suggests that they need to be rejoined for tourism to remain an element of sustainable strategy in urban development. The decision-making process should be restructured accordingly, and made more flexible and integral. The policy leaders must be able to form partnerships with all the concerned players in the private sector and in society, at the relevant territorial levels. The involvement of all the relevant levels of governments and business partners demands the identification and effective communication of a “business model” that makes sustainable tourism desirable for everybody. The concept of a metropolitan or regional cultural-tourist cluster is one in which ample portions of the FTR take an active role in the organisation of tourism, expected to benefit the host communities and to reconcile cultural and economic development. Apart from working as effective management tools, ICT are also likely to improve the governance process, as they enhance the networked nature of the cultural tourism system, facilitate back-office communication flows, and instil cultural empathy between once-disconnected sections of the industry and the market.

To the most general question, namely, whether tourism development can be turned from a threat to heritage cities, into an opportunity for their sustainable economic development, our

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study provides a positive answer. Tourism does contribute to urban regeneration to the extent that it becomes a lever, and not an obstacle, to the development of a high-quality economic environment. The heritage and culture of a city are fundamental elements of its attractiveness and competitiveness, and should become the focus of a new style of governance stimulating innovation, value-generation, market-orientation, empathy-building and entrepreneurship.

The case study of Venice offers an exemplary illustration of the analytic developments of the model. It is a heritage city (possibly the most famous in the world) that is developing a regional tourist product without the ability to contain the associated costs. In the end, the full implications of the vicious circle can be seen at work: from the erosion of the visitors' opportunities to enjoy pleasurable experiences, to the re-orientation of the market, and ultimately the feedback on the performance of the primary cultural assets. What is under threat in Venice – 250 years ago one of the most powerful and populated cities in Europe – is culture in the broadest sense. Though the primary issue is heritage preservation, both citizens and visitors presumably want the city to remain a living entity, and not be transformed into an empty stage, where the sterile representation of an act of consumption – tourism – is performed. Our model has been used to revise critically what has been done so far to try and contain the tide of an exploding tourism economy, and to assess whether a number of recent projects are going in the right direction.

This dissertation leaves a number of specific questions open for further research. On the analytical side, the formal modelling of decision-making regarding accommodation and budget allocation could contribute to a more precise calibration of visitor-management policies. However, we think that the most promising developments from the investigation regard the use of ICT to foster a more sustainable cultural tourism in a complex environment. The study of the design, use and implications of information systems for a better management of tourist systems is a research field in expansion. Our study offers an analytic and organisational template within which ICT can be seen to expose their full potential. The ICT projects examined in the case of Venice are good examples. However, a more in-depth study of the cognitive processes that lead to travel decisions, and of the requirements in terms of content, technology, system design, financing and governance for ICT as a tool for sustainable tourism, may follow.

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AAnnnneexx ttoo CChh.. 55

Tab. A.i - Population structure in Veneto Region. Years 1992-1998. Source: our elaboration on ISTAT 2001.

1992 1995 1996 1997 1998 A -Venice HC 1.7% 1.6% 1.6% 1.5% 1.5% B - Inland areas 4.3% 4.1% 4.1% 4.0% 4.0% C - Estuary 1.1% 1.0% 1.0% 1.0% 1.0%

D - Municipality of Venice (A+B+C)

7.0% 6.7% 6.7% 6.6% 6.5%

E - Province of Venice –Neighbouring municip.

3.0% 3.0% 3.0% 3.0% 3.0%

F - Province of Venice – Non Neighbouring municip.

8.7% 8.7% 8.7% 8.7% 8.7%

G - Province of Venice (D+E+F) 18.8% 18.4% 18.4% 18.3% 18.2% H - Prov. Padova 18.7% 18.8% 18.8% 18.8% 18.8% I - Prov. Treviso 17.0% 17.1% 17.2% 17.2% 17.3%

K - PA-TRE-VE Metropolitan region (G+I+H)

54.5% 54.4% 54.3% 54.3% 54.3%

L - Prov. Rovigo 5.6% 5.5% 5.5% 5.5% 5.4% M - Prov. Verona 18.0% 18.1% 18.1% 18.1% 18.2% N - Prov. Vicenza 17.1% 17.2% 17.3% 17.3% 17.4% O - Prov. Belluno 4.8% 4.8% 4.8% 4.7% 4.7%

Grand Total Veneto Region (sum K:O)

100.0% 100.0% 100.0% 100.0% 100.0%

Tab. A.ii - Gross and net hotel occupation rates at various locations in the province of Venice, years 1977 and 1996-1998. Gross rate: share of beds occupied over one year. Net rate: share of beds occupied over the opening days. Source: Comune di Venezia and COSES, (1998).

Year 1977 1996 1997 1998

Occupation rates gross net gross net gross net gross net

Venice HC 0.48 0.58 0.71 0.77 0.72 0.77 0.74 0.80 Inland areas 0.44 0.47 0.67 0.70 0.65 0.68 0.69 0.71 Brenta Riviera 0.48 0.50 0.53 0.54 0.50 0.52 Lido 0.24 0.47 0.40 0.54 0.42 0.53 0.44 0.57 Cavallino 0.18 0.59 0.37 0.57 0.35 0.49 0.31 0.48 Jesolo 0.32 0.61 0.30 0.55 0.31 0.61 Eraclea 0.22 0.47 0.20 0.38 0.21 0.40 Bibione 0.25 0.69 0.23 0.61 0.25 0.63 Caorle 0.28 0.51 0.27 0.47 0.27 0.48 Chioggia 0.28 0.40 0.27 0.34 0.28 0.38 Total Province 0.39 0.62

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Tab. A.iii - Seasonal variations in visitors' flows at different territorial levels (monthly standard deviations for each year, divided by 1,000).

total stays in HC (+ lido)

excursionists to HC total stays in APT Ve (excl. HC + Lido)

total stays in Province (excl. HC + Lido)

Total stays APTs 'seaside' (4+5+7)

Total stays APT 12 Garda

1995 8.3% 29.0% 75.2% 273.7% 65.9% 22.5%1996 8.3% 29.1% 68.4% 259.4% 60.8% 21.4%1997 8.8% 29.6% 68.1% 250.5% 57.2% 20.4%1998 8.6% 30.5% 68.7% 255.2% 58.7% 22.3%

Tab. A.iv - Correlation structure between distance from the centre of the FTR and the average hotel price

distance from Venice in minutes of travel

average hotel bed price

Pearson Correlation 1 -0.50

Sig. (2-tailed) . 0.00

distance from Venice in minutes of travel

N 53 41Pearson Correlation -0.50 1Sig. (2-tailed) 0.00 .

average hotel bed price

N 41 41

** Correlation is significant at the 0.01 level (2-tailed).

Tab. A.v – Correlation between average accommodation prices and capacity data. Municipal units within province of Venice and provincial capitals for other provinces in Region Veneto. Correlation Price-Total Capacity -0.0303

Correlation Price-Capacity per km2 0.5154

Correlation Price-Capacity / km2 per resident 0.2415

205

Tab. A.vi - Attraction indexes in selected regional territorial units. Subdivisions of Venice municipal territory and Tourism Promotion Districts in Veneto Region. Source: own elaboration on TCI data.

Territory Cultural attraction index* Cultural intensity index**

Venice 490 59.24 Lido 3 0.13 Mestre 9 0.07

Rest of APT 6 29 0.01 TOTAL APT 6 VENEZIA 531 0.51 APT 01 CORTINA 33 0.02 APT 02 BELLUNO 79 0.05 APT 03 TREVISO 194 0.08 APT 04 BIBIONE E CAORLE 18 0.03 APT 05 JESOLO E ERACLEA 6 0.01 APT 07 CHIOGGIA 18 0.05 APT 08 PADOVA 202 0.11 APT 09 TERME EUGANEE 69 0.20 APT 10 VICENZA 276 0.12 APT 11 ALT. DI ASIAGO 2 0.00 APT 12 GARDA 29 0.05 APT 13 VERONA 280 0.11 APT 14 ROVIGO 66 0.04

* number of ‘stars’ of cultural assets in the territorial unit

** number of ‘starts’ per square km in the territorial unit

206

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

Jan-9

5

Mar-95

May-95

Jul-9

5

Sep-95

Nov-95

Jan-9

6

Mar-96

May-96

Jul-9

6

Sep-96

Nov-96

Jan-9

7

Mar-97

May-97

Jul-9

7

Sep-97

Nov-97

Jan-9

8

Mar-98

May-98

Jul-9

8

Sep-98

Nov-98

Jan-9

9

Mar-99

May-99

Jul-9

9

Sep-99

Nov-99

Jan-0

0

Mar-00

May-00

Jul-0

0

Sep-00

Nov-00

Fig. A1 - Peaks in visitation to Venice HC. Monthly data, years 1995-2000.

Brown bars: overnight stays. Blue bars: excursions. Dotted lines indicate the third quartile of the yearly distribution. Visitors' flows exceeding the dotted lines each year may be considered "peak" periods.

Tab. A

.vii a : Structure and dynamics of tourism

, municipal territory of V

enice, years 1991-1996.

Cod.

1

Population 2

Tour. Em

ployees on pop.

3 Tour.

Employees

on total empl.

4 PARATU

R index*

5 Increase

tour.units91-96

6 Increase

PARATUR

units 91-96

1 S.M

arco, Castello, S.Elena

24,643 34.01%

34.16%

0.3633.79%

50.82%

2 C

annaregio 20,639

15.52%

29.83%0.34

33.97%38.74%

3 D

orsoduro, S.Polo, S.Croce

22,489 10.92%

15.84%

0.3735.76%

30.95%

4 G

iudecca, Saccafisola 6,903

2.81%

15.23%0.05

171.43%500.00%

(7) M

urano 5,473

27.11%

49.27%0.84

27.27%57.96%

I H

ISTO

RIC

AL

CE

NT

RE

80,147

19.61%

28.54%0.41

37.10%46.26%

5 Lido, A

lberoni, Malam

occo 19,060

4.65%

23.39%0.11

35.04%87.50%

6 Pellestrina, S.Pietro in V

olta 4,882

2.60%

15.10%0.19

5.88%0.00%

9 C

avallino, Treporti 10,890

4.22%

21.89%0.13

43.45%157.14%

II SE

ASID

E

34,832 4.23%

21.89%

0.1237.46%

114.63%8, (7)

Burano, M

azzorbo, Torcello, S.Erasm

o 5,175

2.92%

29.61%0.31

66.67%191.67%

III L

AG

OO

N - IN

NE

R ISL

ES

5,175 2.92%

29.61%

0.3166.67%

191.67%10

Favaro Veneto, C

ampalto

25,044 1.59%

8.66%

0.2837.21%

63.64%

11 C

arpenedo, Bissuola

41,422 0.96%

7.45%

0.1336.26%

100.00%

12 Terraglio

4,010 2.54%

4.82%

0.1036.84%

200.00%13

S.Lorenzo, XX

V A

prile 25,739

5.10%

9.28%0.37

15.14%5.34%

14 C

ipressina, Zelarino, Trivignano

14,815 1.00%

6.76%

0.4330.56%

25.93%

15 Piave 1866

25,447 9.46%

15.26%

0.10107.45%

450.00%

16 C

hirignago, Gazzera

21,584 0.61%

4.43%

0.0054.76%

+

18 M

alcontenta 2,407

2.33%

7.67%0.00

6.67%+

(17) M

arghera città, Catene

28,475 1.89%

6.28%

0.2967.89%

51.11%

IV

MA

INL

AN

D

188,943 2.91%

9.73%

0.2649.68%

62.96%17

Ind, areaMarghera

204 38.73%

0.39%

0.0027.78%

+

V

POR

T A

ND

IND

UST

RIA

L A

RE

A

204 38.73%

0.39%

0.0027.78%

+

TOT

AL M

UN

. TERR

ITO

RY

309,301

7.41%

16.48%0.27

42.08%55.38%

*: units supplying goods included in 'paratourism' on total tourism

supply +: zero units in base year 1991

Tab. A

.vii b : Structure and dynamics of tourism

, Historical C

entre of Venice, years 1991-1996.

Cod.

1

Population 2

Tour. Employees

on pop.

3 Tour. Em

ployees on total em

pl.

4 PARATU

R index*

5 Increase

tour.units91-96

6 Increase

PARATUR units

91-96

Z1 R

ialto 5,950

16.35%19.05%

0.5323.77%

24.32%

Z2 S. G

iacomo

3,142 2.42%

7.87%0.14

84.21%100.00%

Z3 Frari

4,044 10.71%

21.30%0.18

37.29%40.28%

Z4 S. M

argherita 4,141

24.08%20.36%

0.1643.37%

50.51%

Z5 S.Stefano

3,535 127.86%

48.70%0.25

16.82%21.13%

Z6 S. L

uca 1,116

148.30%27.60%

0.5337.11%

39.13%

Z7 S. C

anciano 3,417

5.50%13.13%

0.3334.29%

38.46%

Z8 SS. A

postoli 3,304

8.54%20.27%

0.1666.67%

106.25%

Z9 S. A

lvise 4,609

0.95%4.03%

0.1038.89%

35.00%

Z10 S. Leonardo

9,309 28.89%

39.42%0.40

27.48%25.23%

Z11 S. M

arta 4,768

6.67%7.37%

0.3028.57%

26.67%

Z12 Salute

1,154 6.07%

22.65%0.14

16.67%14.29%

Z13 S.M

. Form

osa 3,860

16.63%30.34%

0.3846.15%

48.63%

Z14 S. Francesco

2,370 18.86%

18.43%0.07

46.15%85.71%

Z15 B

ragora 4,107

13.66%49.60%

0.2043.18%

52.73%

Z16 V

ia G

aribaldi 6,365

1.98%15.14%

0.2733.33%

42.22%

Z17 S. Elena

2,427 0.74%

4.95%0.00

14.29%28.57%

Z18 Sacca Fisola

1,965 0.66%

5.56%0.00

175.00%175.00%

Z19 S. E

ufemia

1,875 1.33%

6.56%0.20

325.00%320.00%

Z20 R

edentore 3,216

4.85%16.88%

0.00123.08%

138.46%

Z21 M

urano 5,473

27.11%49.27%

0.8327.27%

52.63%

TOT

AL H

IST. C

EN

TR

E

80,14719.61%

28.55%0.41

37.02%40.75%

Source : own elaboration on C

ensus 1991and 1996 data; taken from V

an der Borg, R

usso 1997 b. Darker

cells indicate figures above column average.

208

Tab. A.viii - repeat visits in different period in Venice

Year of the survey

Sample structure Duration of survey

% repeat Main differences

1990 > 6,500 interviews among visitors in S. Mark's square

12 months 47.7% “Real” excursionists 89% repeat, transit 39%, overnight staying tourists 44%

1996-1997 1,500 interviews among visitors in S. Mark's square

12 months 24.4% foreigners11%, domestic61%; “Real" 77%, false and indirect 15%, passing 16,7%, overnight staying 24%

2000 400 interviews among “non visitors” of museums

4 months 42.75% Foreigners 32%, domestic 74%; “Real" 65%, false 38%, indirect 35%, overnight staying 35%

Tab. A.ix - Organised and non-organised visits in Venice 1996-1997 survey data. Domestic Foreigner Total

Individual visits 82.5 61.6 67.3

Organised visits (group) 17.5 38.4 32.7

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NNeeddeerrllaannddssee SSaammeennvvaattttiinngg

DE DUURZAME ONTWIKKELING VAN HISTORISCHE STEDEN EN HUN REGIO’S. Analyse, beleid, bewind Toerisme is enerzijds een bedreiging voor de duurzame ontwikkeling van steden, maar schept er anderzijds ook kansen voor. De meest bedreigde stedelijke gebieden zijn die historische steden, steden met kostbaar stedelijk erfgoed. Toch zou toeristische ontwikkeling voor die steden wel eens de enige toegang kunnen zijn naar de kenniseconomie. Een groeiend aantal steden voelt zich op het ogenblik beklemd in een gevaarlijke situatie. Het is duidelijk dat het toerisme voor de plaatselijke gemeenschap meer problemen dan baten oplevert; anderzijds slagen zulke steden er niet of nauwelijks in hun culturele potentieel in te zetten om hun ambitie - toetreding tot de kenniseconomie – te verwezenlijken. Nu zou men kunnen redeneren dat er toch uit alles wat er al over de ontwikkeling van het toerisme geschreven is, wel een vorm van beheer valt af te leiden waarmee het dilemma kan worden opgelost. Dat is echter niet het geval.

Er is behoefte aan een theorie over de ontwikkeling van toerisme waaruit kant-en-klare beleidsregels kunnen worden afgeleid. Kort samengevat gaat het om de volgende vragen. Als we aannemen dat het uiteindelijke doel van stedelijke politiek de duurzame economische ontwikkeling van de stad is, kunnen we dan zeggen dat toerisme tot dat doel bijdraagt, en zo ja, in hoeverre? En kan er dan een model van toeristische ontwikkeling worden opgesteld dat meer kans op duurzaamheid geeft dan het huidige patroon van “niet door enige kennis gehinderd”, “onnadenkend” massatoerisme? Om die vragen te beantwoorden wordt in dit proefschrift niet alleen de betekenis van stedelijke duurzaamheid op zich onderzocht, maar wordt er ook gekeken hoe de toeristische markt in elkaar zit en wat de dynamische eigenschappen zijn van toeristische stelsels. De literatuur geeft voldoende inzicht in de redenen waarom toerisme misschien geen duurzame optie voor ontwikkeling is, maar de normatieve aanwijzingen die uit de talrijke geschriften naar voren komen, zijn over het algemeen niet veel waard.

Tot dusver is in de theoretische werken over de ontwikkeling van toerisme niet consequent onderzocht welke relaties de toeristische sector in de stad genereert. En toch zijn juist die relaties van eminent belang voor het toeristische beleid: hoe werkt het toerisme in op het vermogen van de vele toeristische actoren om hun belangen te behartigen, en op de algehele concurrentiekracht van een stad. In rapporten over modellen van de stedelijke levenscyclus vinden wij een bruikbaar kader voor het analyseren van de elementen die steden van het ene stadium van urbanisatie naar het volgende leiden. In de postindustriële, zich herstellende, met de gehele wereld verbonden, klantgerichte stad zijn de kwaliteit van de leefomgeving, toegankelijkheid, aantrekkelijkheid, vrijetijdsbeleving en cultuur de elementen die de overgang tot stand helpen brengen en die de eigenheid van de stad bepalen. De toeristische functie van de stad heeft duidelijk raakpunten met al deze elementen. In dit proefschrift willen wij die raakpunten stelselmatig onderzoeken.

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Om te beginnen het verband tussen de ontwikkeling van het toerisme en de culturele prestaties op een nieuwe manier uitgelegd. Dit verband is zeer zwak en heeft een slechte invloed op de concurrentiekracht van steden en de kansen voor stedelijk herstel. De aandacht wordt in het bijzonder gericht op de ruimtelijke ontwikkeling van het toerisme in de gewesten, oftewel de “Functionele Toeristische Regio’s”. Bepaalde aspecten van de toeristische ontwikkeling, zoals de veranderingen op de bezoekersmarkt en de neergang in bestemmingscycli, worden ontleed in hun onderlinge samenhang. Onze sterkste stelling is dat de ongelijkheid in de voorlichting die voortvloeit uit de regionalisatie van het toerisme, op haar beurt leidt tot onevenwichtige ontwikkeling van binnensteden: er is een ‘hart’ dat pompt voor een heel gewest maar geen kwaliteit kan leveren aan de eigen klanten, en slechts schaarse baten oplevert voor de binnensteden zelf.

Met de ontwikkeling van een formeel model (de “vicieuze cirkel”) om de gevolgen van toeristische ontwikkeling in en om historische steden te analyseren, wordt een kant-en-klaar kader opgetrokken dat kan dienen om een beleid uit te stippelen waarmee de onevenwichtigheid kan worden verholpen. Volgens zo’n “stelsel ter ondersteuning van de besluitvorming” zou het beheer van de toeristenstroom pro-actief, regionaal van bereik en integraal van aard moeten zijn.

Het proefschrift gaat nog een stap verder. Als er eenmaal bereikt is dat het toerisme niet langer de oorzaak is van onevenwichtige ontwikkeling, rijst de vraag hoe het vervolgens dan een motor kan worden voor de ontwikkeling van steden die zich een plaats in de kenniseconomie willen veroveren. Historische steden genieten status en bezitten cultureel kapitaal, en zijn vaak goed internationaal bereikbaar, maar om een echte hefboom voor een dynamische, waardenscheppende economie te worden moet het toerisme nieuw gestructureerd worden en moet het potentieel ervan worden vrijgemaakt. Cultuur is een zwaarwegend onderdeel van de kennismaatschappij, maar in historische steden is de cultuur ondergesneeuwd op een markt van massatoerisme die moeilijk valt te verenigen met het scheppen van ontwikkelingskansen. De relatie zou eigenlijk omgekeerd moeten zijn. De cultuur zou de stad moeten verrijken, en duurzaam toerisme is een zeer krachtig middel om waarden te scheppen. Culturele ondernemers vormen de schakel – die door het stedelijk beleid actief versterkt en gesteund zou moeten worden– tussen de ‘wereldomspannende” afmetingen van het toeristische netwerk en de “plaatselijke” hulpbronnen die historische steden ter beschikking staan. Door de toepassing van informatie- en communicatietechnieken (ICT) wordt het een stuk makkelijker bezoekersstromen in de hand te houden en culturele ondernemers goede kansen te verschaffen.

Om toeristisch beheer en regionale marktbewerking te integreren tot een alomvattende ontwikkelingsstrategie is innovatieve, integrale bewindvoering noodzakelijk. Het bewind moet steunen op de opbouw van vermogen en op samenwerkingsverbanden tussen actoren wier belangen misschien uiteenlopen, maar die elkaar kunnen vinden in de visie van een multipolair regionaal cluster.

De case-studie van Venetië illustreert de analytische ontwikkeling van het model voortreffelijk. Venetië is een historische stad (misschien wel de beroemdste ter wereld), waar zich een regionaal toeristisch product aan het ontwikkelend is zonder dat men erin slaagt de daarmee verbonden kosten in de hand te houden. Uit deze case-studie blijkt waartoe dit ontwikkelingsmodel ten slotte kan leiden: hoe de kans van de bezoekers om van mooie

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ervaringen te genieten aan erosie ten prooi valt, hoe de markt zich anders gaat richten, en ten slotte wat de terugslag is op de primaire culturele bezittingen.

Venetië is ook een stad met een lange traditie van analyse en beleid op het gebied van toerisme. Ons model kan worden gebruikt om kritisch te herzien wat er tot dusver is gedaan om de vloedgolf van een exploderende toeristische economie te keren, en om vast te stellen of het met de recente projecten de goede kant uitgaat.

The Tinbergen Institute is the Institute for Economic Research, which was founded in 1987 by the Faculties of Economics and Econometrics of the Erasmus Universiteit Rotterdam, Universiteit van Amsterdam and Vrije Universiteit Amsterdam. The Institute is named after the late Professor Jan Tinbergen, Dutch Nobel Prize laureate in economics in 1969. The Tinbergen Institute is located in Amsterdam and Rotterdam. The following books recently appeared in the Tinbergen Institute Research Series:

250. A.B. BERKELAAR, Strategic asset allocation and asset pricing. 251. B.J. VAN PRAAG, Earnings management; Empirical evidence on value

relevance and income smoothing. 252. E. PEEK, Discretion in financial reporting and properties of analysts'

earnings forecasts. 253. N. JONKER, Job performance and career prospects of auditors. 254. M.J.G. BUN, Accurate statistical analysis in dynamic panel data models. 255. P.C. VERHOEF, Analyzing customer relationships: Linking relational

constructs and marketing instruments to customer behavior. 256. C.S. BOS, Time varying parameter models for inflation and exchange rates. 257. A. HEYMA, Dynamic models of labour force retirement; An empirical

analysis of early exit in the Netherlands. 258. S. DEZELAN, The impact of institutional investors on equity markets and

their liquidity. 259. D.J. DEKKER, Network perspectives on tasks in account management. 260. F.G. VAN OORT, Agglomeration, economic growth and innovation. Spatial

analyses of knowledge externalities in the Netherlands. 261. U. KOCK, Social benefits and the flow approach to the labor market. 262. D.J. BEZEMER, Structural change in Central European agriculture. Studies

from the Czech and Slovak Republics. 263. D.P.J. BOTMAN, Globalization, heterogeneity, and imperfect information. 264. H.C. VAN DER BLONK, Changing the order, ordering the change. The

evolution of MIS at the Dutch railways. 265. K. GERXHANI, The informal sector in transition. Tax evasion in an

institutional vacuum. 266. R.A.J. BOSMAN, Emotions and economic behavior. An experimental

investigation.

267. A.P. VAN VUUREN, Empirical analysis of job search using novel types of data.

268. H. VAN DE VELDEN, An experimental approach to expectation formation in dynamic economic systems.

269. L. MOERS, Institution, economic performance and transition. 270. N.K. BOOTS, Rare event simulation in models with heavy-tailed random

variables. 271. P.J.M. MEERSMANS, Optimization of container handling systems. 272. J.G. VAN ROOIJEN, Flexibility in financial accounting; income strategies

and earnings management in the Netherlands. 273. D. ARNOLDUS, Family, family firm, and strategy. Six Dutch family firms in

the food industry 1880-1970. 274. J.-P.P.E.F. BOSELIE, Human resource management, work systems and

performance: A theoretical-empirical approach. 275. V.A. KARAMYCHEV, Essays on adverse selection: A dynamic perspective. 276. A.J. MENKVELD, Fragmented markets: Trading and price discovery. 277. D. ZEROM GODEFAY, Nonparametric prediction: Some selected topics. 278. T. DE GRAAFF, Migration, ethnic minorities and network externalities. 279. A. ZORLU, Absorption of immigrants in European labour markets. The

Netherlands, United Kingdom and Norway. 280. B. JACOBS, Public finance and human capital. 281. PH. CUMPERAYOT, International financial markets: Risk and extremes. 282. E.M. BAZSA-OLDENKAMP, Decision support for inventory systems with

complete backlogging. 283. M.A.J. THEEBE, Housing market risks. 284. V. SADIRAJ, Essays on political and experimental economics. 285. J. LOEF, Incongruity between ads and consumer expectations of advertising. 286. J.J.J. JONKER, Target selection and optimal mail strategy in direct

marketing. 287. S. CASERTA, Extreme values in auctions and risk analysis. 288. W.H. DAAL, A term structure model of interest rates and forward premia:

An alternative approach. 289. H.K. CHAO, Representation and structure: The methodology of econometric

models of consumption. 290. J. DALHUISEN, The economics of sustainable water use. Comparisons and

lessons from urban areas. 291. P. DE BRUIN, Essays on modeling nonlinear time series.

292. J. ARDTS, All is well that begins well: A longitudinal study of organisational socialisation.

293. J.E.M. VAN NIEROP, Advanced choice models. 294. D.J. VAN VUUREN, The market for passenger transport by train. An

empirical analysis. 295. A. FERRER CARBONELL, Quantitative analysis of well-being with

economic applications. 296. L.M. VINHAS DE SOUZA, Beyond transition: Essays on the monetary

integration of the accession countries in Eastern Europe. 297. J. LEVIN, Essays in the economics of education. 298. E. WIERSMA, Non-financial performance measures: An empirical analysis

of a change in a firm’s performance measurement system. 299. M. MEKONNEN AKALU, Projects for shareholder value: A capital

budgeting perspective. 300. S. ROSSETTO, Optimal timing of strategic financial decisions. 301. P.W. VAN FOREEST, Essays in financial economics. 302. A. SIEGMANN, Optimal financial decision making under loss averse

preferences. 303. A. VAN DER HORST, Government interference in a dynamic economy.