Tourism and Economic Development Issues - Tourism and Development: Concepts and Issues - page 104

as such, they are not traded, have no direct price and do not form any supply.
Only with investment in tourism development, for example, with the devel-
opment of built supply, is their transformation into tourism supply enabled.
Once environmental goods enter the tourism production process and become
part of a tourism product or experience, they become elements of the tourism
supply and the valuation process commences (see Chapter 9). Fabricated
tourism products based on built tourism supply, such as overnight stays,
attract higher demand and thus a hedonic price in the tourist market due to
the presence of the destination's natural or social and cultural attractions.
Accordingly, the valuation is indirect and reflected in higher tourist product
prices. Attractions are given a premium or valuation value (VV) by 'selling'
them in the tourism market.
The theory of the tourism valuation of natural goods - essentially the
theory of local public goods applied to tourism - states that some aspects of
nature and culture may be converted into premium prices 6 if 'sold' on the
tourism market. If the supply is fixed, increased demand translates into
higher prices whereby the valuation value is a premium accruing to a sup-
plier, known as economic rent. Thus, tourist countries, regions and destina-
tions, and the tourism companies operating in such areas, promote
attractions such as a beautiful countryside, pristine beaches, cultural heri-
tage and so on because in tourists' eyes they are part of the tourism supply
(Tschurtschenthaler, 1986: 118). The payment from the 'consumption' of
natural goods is included in the (higher) price of tourism services which
emanates from the greater tourist demand reflecting the attractiveness of
the natural or cultural goods. For example, it was once suggested that British
'green' tourists are willing to pay a premium of £509 for a fortnight's holi-
day in Tropical North Queensland for the unspoiled condition of its natural
environment and if the authorities continue to protect it (Huybers &
Bennett, 2000: 37), though it should be noted that the validity of such asser-
tions has increasingly come into question.
Defenders of this theory claim that the 'selling' of natural and cultural
attractions through premium prices does not reduce the wealth of a country
as is the case, for instance, with raw material exploitation and exports.
Indeed, the fact that certain visitors have experienced a particular country's
attractions may enhance its appeal and therefore increase its value for others
(Ritchie & Crouch, 1993: 35).
Another view on the economic tourism potential of environmental goods
can be derived from the traditional foreign trade theory (Heckscher-Ohlin
theory). This theory claims that the sources of comparative advantages are
factor endowments, labour or capital. Developed industrialised countries are
able to produce industrial goods (capital-intensive production) with lower
capital costs than developing countries and, conversely, developing countries
are able to produce tourism services (labour-intensive production) with lower
factor costs than industrialised countries. The extent to which each will