International Demand and Country Risk Analysis
Chapter 4: Economic Profiles, Tourism Composition and Trends in Country Risk in Small Island Tourism Economies
1 4.1 INTRODUCTION This chapter provides a detailed assessment of the economic profiles of the twenty SITEs mentioned in Chapter 2. It has already been established that these countries are relatively small in population, GDP and land area, among other measures. Considering these features, some SITEs are diversified in a unique way, while others are struggling with one or two dominant economic activities. This chapter assesses the main economic activities in these SITEs, and examines the importance of their primary economic activities to economic welfare. In general, tourism is the dominant economic activity for each of these SITEs. Considering the importance of inbound tourism demand, we analyse the composition of international tourists who visit six of these SITEs using the available data. It is well known that the trends in tourism earnings coincide with the economic trends of the tourism source countries. The principal tourism source countries are the G7 countries, and any adverse economic impacts in these tourism sources can affect the trends in international tourist arrivals, and hence tourism earnings. Moreover, new and emerging source countries appear as globalisation and democratisation continue at current rates of progress. The break-up of the former Soviet Union created new and relatively wealthy economies which have become new tourism sources to some SITEs. In time, these source markets will begin to influence tourism earnings across SITEs and, as a result, the composition of the tourism source base will be affected. The threat of terrorism, global conflicts, and rising oil prices, among others,...
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