The economic impact of the tourism moratoria in the Canary Islands 2003–2017

Abstract

In the early 2000s, the Parliament of the Canary Islands passed a series of tourism moratoria to restrict the growth in tourism supply. Even though the effects of moratoria have been covered in the literature, there is little quantitative evidence about their economic impact on the destinations, particularly in relation to the goal of increasing the quality of the accommodation supply. In order to fill this gap, this paper employs both regression and computable general equilibrium (CGE) methods to estimate the economic impact of the increased 5-star capacity acquired by the Canary Islands during the three moratoria periods between 2003 and 2017. The regression results show that the successive moratoria had a significant impact on the 5-star hotel supply in the Islands, while the CGE model translates the extra capacity into a positive impact on social welfare, with output increases in the sectors that complement tourism activity.

Keywords:

• Sustainable tourism
• mature destinations
• tourism moratoria
• dynamic computable general equilibrium
• difference- in-differences analysis

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Huelva is located west of the Strait of Gibraltar, thus facing the Atlantic Ocean, and does not strictly have a Mediterranean coastline. However, it is considered comparable to the other coastal provinces in Andalusia.

2 The elasticities are shown in Appendix.

3 An alternative specification with lagged CPI did not yield a significant coefficient either.

Additional information

Notes on contributors

Federico Inchausti-Sintes

Federico Inchausti-Sintes holds a PhD in Economics. He is lecturer at the University of Las Palmas de Gran Canaria. He has carried out international research projects for the Inter-American Development Bank and has been involved in H2020 projects. His research interest is tourism economics and macroeconomics. He has published papers in leading journals such as Annals of Tourism Research, Tourism management, or Tourism Economics.

Augusto Voltes-Dorta

Augusto Voltes-Dorta holds a PhD in Economics from the University of Las Palmas de Gran Canaria (Spain), and an MSc in Airport Planning and Management from Cranfield University (UK). He is currently Senior Lecturer in Business Economics at the University of Edinburgh Business School. His main research interests include airport economics, air transport connectivity and regulation. In the area of tourism, he has investigated the impact of tourism activity on municipal budgets, as well as the impact of ETA’s dissolution on Spain’s domestic tourism. He has published in many peer-reviewed journals such as Transportation Research Parts A, B, and E, as well as in Tourism Management.