‘Tragedy of the Commons’ in the Tourism Accommodation Industry

Abstract

This paper models the interaction between the tourism accommodation industry and environmental quality – herein considered as a composite common pool resource. Results from the study show that open access generally leads to both economic and environmental overexploitation, that is ‘the tragedy of the commons’. This also affects the overall tourism industry since tourism accommodation and environmental quality perform central roles. This ultimately leads to mass tourism characterized by tourists with low willingness to pay. The results show that, apart from situations where positive externalities on other activities are very significant, or that open access faces binding restrictions (such as land availability), a firm's entry should be limited, based on both efficiency and sustainability.