Asensi Descals, researcher of the Regional Taxation Chair, has recently published an article together with José Ramón Ruiz in the journal “Tourism Economics” about competitive tourism markets and the effect of a tourism tax on producers' incomes.
This article proposes a model for the tourism sector, assuming two markets, one for tourism services and the other for accommodation. These two sectors feed back into each other due to their vertical complementarity.
Furthermore, in the study, the authors provide the best solution to the tourist choice problem, the primary demand for tourism services and the derived demand for overnight stays. Furthermore, it tackles the equilibrium results, assuming perfectly competitive tourism markets, without addressing the externalities caused by tourism activities.
Subsequently, a tax on overnight stays is introduced into the model, analysing its effects on the competitiveness and income of producers in each market. As a result, it is found that reservation prices and the direct and cross-price elasticities of demand for tourism services are the key response elements.
