Federico Boffa

The Internet and seasonality: a theoretical and empirical analysis of vertically differentiated accommodation structures.

The authors study the impact of online booking on seasonality across various types of accommodation. They first build a theoretical model on vertical differentiation and seasonality, and show that, if the impact of the Internet on search costs is homogenous for hotels with different quality levels, then the increase in seasonality as a result of ICT development is greater for low-quality accommodations. On the other hand, if the Internet is more spread among high-quality firms than among low-quality ones, then the Internet-induced increase in seasonality is larger for high-quality establishments. The papers empirical analysis, which differentiates the impact of the Internet on seasonality between ‘hotels and similar establishments’ and ‘other types of accommodation’, finds that ICT has a positive effect on seasonality in both instances, but that the impact is quantitatively larger for ‘hotels and similar establishments’.

Fragmented Ownership and Second Homes in Tourism Resorts

ABSTRACT In spite of the generally accepted view that second homes induce a higher seasonality and a lower occupancy rate than hotels, they persistently prevail in many tourism destinations. This paper introduces a mechanism to illustrate and analyze the decision problem of constructing second homes or hotels. We introduce a two period game with two players representing a developer of buildings in a tourism destination D and a tourist T. D owns a piece of land and faces two alternatives: to construct a hotel or to build a second home. T has to choose between buying a second home or renting a hotel room. Another ingredient of the model is an externality mechanism representing the value placed by tourists on the probability of finding an available place at the destination. The paper shows the persistence of sub-optimal equilibria in the game, in which the land is allocated to a socially inefficient use (second homes rather than hotels). We show that a necessary condition for such inefficiency to emerge is that the related externality cannot be internalized. This occurs under a regime of dispersed ownership.

A Way Towards Relaunching Growth: Becoming Essential along the Supply Chain

Our paper analyzes the growth potential of the Italian industrial system, in order to devise a more efficient allocation of the limited available public resources for R&D. Our focus lies mainly on two topics. At first, in the current global economic environment, enhancing the value of goods and services produced is a priority over abating production costs. Secondly, supply chains play an increasingly significant role in the market for high-tech goods and services. Hence, the economic development of any geographical areas is likely to require the specialization in some of the nodes of the supply chain rather than the presence in all of its stages. Therefore, being essential in the links of the chain that display the most prominent growth potential is key to economic development. Two theoretical models conceptualize the idea of essentiality and examine its welfare implications. Then, we illustrate some economic and statistical indicators that enable us to proxy the degree of essentiality of a given sector. We use these indicators to actually measure the essentiality level across sectors of the Italian economy. Based on the results, we draw policy implications on the criteria to allocate public funds for R&D.