Benchmarking International Tourism Destinations

Abstract

Industry productivity growth measures the contribution to the growth of the economy that an industry delivers. Benchmarking international tourism destinations in respect of their productivity is often avoided due to the difference in tourism characteristics between destinations. This paper introduces a novel approach to destination benchmarking that is theoretically motivated to account for this problem. The benchmarking framework proposed uses separate groups of countries with similar characteristics to construct a metafrontier that envelops these groups, and as such represents the world tourism industry. The paper confirms that ignoring heterogeneity (that is, differences in destination characteristics) can lead to bias in the productivity rankings of different countries. The results show that North American and European countries lead the world tourism industry in terms of productivity growth, while African countries lag behind. On average, most African countries are also not catching up with the world tourism industry. The outcome is development of a robust and comprehensive benchmarking methodology that can provide governments and national tourism offices with an accurate assessment of their international tourism performance.