Economic strategies for sustainable tourism in islands : the case of Tenerife

Abstract

The objective of this chapter is to analyse the issue of 'sustainable development' in an insular tourist-orientated economy, Tenerife. Sustainable tourism development requires the many economic agents involved in tourist-related activities to take cognizance of the insular environment. Our analysis complements the literature on sustainability by introducing some of the elements of both club theory and strategic management in order to appraise the private and the public response to sustainable tourism. Tenerife in the Canary Islands will be used as a reference case study and observations drawn from the recommendations at the 1986 Interoceanic Workshop in Puerto Rico will factor into the conclusions reached in this chapter. The problem, we contend, is simply too many tourists. The solution is tourist capping. We begin with the premiss that public and private strategies for sustainable tourism in islands must achieve a balance between environmental conservation and economic gain. There is an economic trade-off and a consequent opportunity cost in the use of the real resources on the island. Therefore the supply side could be represented by a convex production possibility set (McNutt, 1992) which emphasizes the economic trade-off across economic agents on the island. In other words, an upper limit on the number of visitors to the island must be imposed if the environment is to be maintained. Such a trade-off will inevitably incite rent-seeking behaviour as individual agents seek to protect their particular share of the tourist revenues. In our cursory analysis of the tourism sector in Tenerife we examine the opportunities and threats as well as the strengths and weaknesses of Tenerife's hospitality industry. The concluding section proffers competitive strategies which might serve to develop business strategies in the light of the changing holiday demand patterns which are having an important effect on the current economic situation on the island of Tenerife. According to the Chairman of the Committee on Tourism of the Spanish Employers Association (CEOE), the 1992 summer season on the island was 'an exceptional one'; however, it should not be forgotten that any 'tourism bonanza' in terms of the number of visitors is merely temporary and hence measures are needed if Tenerife's future as a tourist resort is to be assured. Manuel Hermosa, Vice President of the Canarian Government and a former Mayor of Santa Cruz, stated on the occasion of the opening of the International Tourism Fair (Atlantur) that in order for the archipelago's tourism industry to improve the sector must undergo a 'process of reconversion'; furthermore, the economic agents involved must cooperate and a Law of Tourism must be drawn up. We concur with this sentiment.