Modeling of development of a tourist cluster on the basis of Leontief's matrix

Table of contents: The Kazakh-American Free University Academic Journal №5 - 2013

Authors:
Kaigorodtsev A., Kazakh-American Free University, Kazakhstan
Granetskiy Vladimir, East Kazakhstan State Technical University in honor of D. Serikbayev, Kazakhstan

Problem statement. In a lot of countries tourism as one of the high-yielding interbranch complexes plays a significant role in the formation of gross domestic product, the creation of additional jobs, the activation of the external trade balance. At the same time, countries with transitive economy do not use its tourist potential to the full extent. Tourism development in these countries should be carried out in a comprehensive, systematic manner, based on the multidisciplinary nature of the tourism industry which includes not only the activities of tour operators and travel agents, but also the scope of supply, trade, accommodation and hospitality, transportation system, services and communications and other related activities. This fact suggests that increasing of the efficiency and competitiveness of business entities engaged in tourism is possible on a cluster basis. At the same time, for the formation of the tourism cluster business model it is advisable to use both traditional and innovative methods.

Analysis of recent research and publications. Economics and tourism management issues are discussed in numerous works of russian and foreign scientists and economists such as Darowski L., Strilchuk J., Provost C. (2006), Diamantis D.(1999), Donohoe, H.M., Needham, R.D. (2006), Hutchinson-Jafar L.(2012), Mantel R. (2013), Minnaert L., Maitlandb R., Millera G. (2011), Nigg S. (2011), Shvets Y.V. (2005) and others.

Unresolved earlier parts of the overall problem. Despite significant theoretical and methodological framework the problem of systematic development of tourism on a cluster basis is poorly studied, and therefore provides to scientists ample opportunities for innovations, theoretical understanding and methodological basing of the ways to increase the efficiency and competitiveness of the tourism industry.

Goal of the study. The goal of this article is justification of the conceptual approach to the development of tourism cluster business model based on Leontyev's model.

Study highlights. Countries with transitive economy such as Kazakhstan, Russia and Ukraine have the necessary resources for the development of domestic and incoming tourism which include favorable climatic conditions, availability of water and balneological resources, rich landscape and recreational potential and distinctive historical and cultural heritage, unique museum complex of international importance. However, existing tourism potential of these countries is not used in full, causing them to lag behind the world leaders in of the tourism field (table 1).

Table 1 – Travel and Tourism Competitiveness Report

Country

Generalize index

Normative base of travel and tourism

Business climate and infrastructure

Human, cultural and natural resources

1 Switzerland

5,66

5,94

5,42

5,63

3 Germany

5,39

5,57

5,29

5,31

3 Austria

5,39

4,80

5,11

5,24

4 Spain

5,38

5,48

5,30

5,36

5 Great Britain

5,38

5,44

5,13

5,57

6 USA

5,32

4,95

5,36

5,65

7 France

5,31

5,56

5,18

5,20

8 Canada

5,28

5,27

5,17

5,39

9 Sweden

5,24

5,54

4,89

5,30

10 Singapore

5,23

5,74

5,31

4,64

63 Russia

4,16

4,24

4,22

4,02

76 Ukraine

3,98

4,73

3,62

3,59

88 Kazakhstan

3,82

4,66

3,48

3,30

140 Haiti

2,59

2,93

2,39

2,44

Note – composed by the authors according to the information of the World Economic Forum (2013). Travel and Tourism Competitiveness Report.

Implementation of the potential of countries with transitive economy is only possible upon the condition of using systematic approach to solving problems hindering the development of tourism, which are the following:

- administrative barriers (protracted procedures for obtaining permits in the border areas, lengthy registration procedures of foreign tourists);

- inefficient promotion of tourist product on the world market;

- insufficient funding;

- lack of tourism infrastructure according to international standards, including the poor condition of roads, lack of communication;

- lack of coordination of intra-industry and inter-agency activities on the development of tourism infrastructure;

- lack of qualified specialists, including guides who speak foreign languages.

According to WTO and the World Travel & Tourism Council, for every job created in the tourism industry accounts for five to nine jobs that appear in other industries. Tourism directly or indirectly affects the development of 32 industries and promotes the development of the country's infrastructure. This indicates the desirability and feasibility of the development of tourism cluster.

Cluster is a sustainable territorial and sectoral partnership united by innovation program of advanced manufacturing, engineering and management technologies to increase the competitiveness of its participants.

Clusters affect competitiveness as they:

- increase productivity of firms and industries;

- create opportunities for innovation and productivity growth;

- stimulate and facilitate the formation of a new business that supports innovation and expansion of a cluster [9].

The national policy on creation and development of tourist clusters should be based on the following principles:

- anticipatory goal setting taking into account the dynamics of changes in the external environment;

- multilevel government regulation;

- creation of clusters according to competitive advantages;

- attraction of direct investments;

- development of specialized factors;

- development of progressive factors;

- interaction of conjugate countries;

- prevention of crime, economic, financial, information expansion of certain social and economic groups [10, p. 78-81].

For diversified (horizontal) cluster "input-output" model is suitable and for vertical cluster – Wassily Leontief’s problem [5].

Vertical cluster can be represented as "cascade waterfalls", on each of its sites (kind of activity) cash flow is added. This value chain (VC) is shown schematically in Figure 1.

Note – composed by the authors.

Figure 1 – Scheme of the vertical cluster as a "cascade waterfalls"

Initially, we have 5 activities of this cluster: travel agencies, transportation, hotels, catering facilities and leisure sphere.

Based on expert judgment define the structure of the gross product of the cluster, profitability and wage share in the self-cost of each unit (Table 2).

According to the experts catering facilities and hotel complexes have the largest share in the gross output of the tourism cluster (about 60%).

Table 2 – Structure of the tourism cluster and its characteristics

Tentative example of vertical cluster is shown in Table 3. Here every activity (redistribution) fully carries the cost for the next stage of development as in the Leontyev's model.

As the initial data accept the fact when a 1000 tourists have been sold tours at the price of 1000 conventional units (c.u.) which costs include all five types of service. The total gross product of the tourism cluster will make up 1000 thousand c.u., and revenues for the first revision of its functioning will be 100 thousand c.u.. In Table 2, the structure of the gross output of this conglomerate is presented.

Table 3 – The traditional Leontyev's model of a "cascade waterfalls"

ths c.u.

Determine cost of each repartition of a cluster by the following formula:

(1)

where

Зi – cost of repartition;

Ri – profitability of repartition;

i – repartition of a cluster (i=1,2,3,4,5);

GPi – gross product of repartition.

On the basis of table 2 data define material inputs (past labour) and wage share (living labour) on the each stage of cluster functioning:

Vi = Зi х αi

Сi = Зi – Vi, (2)

where

Vi –wage of i repartition;

Ci –material costs of i repartition;

αi –wage share of i stage of repartition.

Make calculation of the 1st repartition of a cluster:

Further, summarize all the calculations in Table 3, finding rates for the traditional problem by the accepted pattern:

З2 = = = 120 ths c. u.

V2 = 17%

С2 = 83% = 100 ths. c.u

According to traditional model the sum of gross revenue will make 633,9 ths c.u.:

GPclus =С1+V∑ + m∑ = 34,8 +325,1 + 308,8 = 668,3 ths c.u.

or

GPclus = С1 + VC1= 34,8 + 633,9 = 668,7 ths c.u.

However, the tourism cluster operates on a different scheme, where tourist traffic plays the role of a continuous stream which also operates on a "cascade waterfalls" approach, but value flows of each of the cluster do not intersect.

Table 4 presents a modified model applicable for the tourism cluster.

As can be seen from Table 4, the gross product of the tourism cluster is 1000 thousand c.u. unlike traditional cluster where this value is 633.9 thousand c.u. If calculate gross product of the traditional model by the new scheme, the value of gross domestic product is 1552,6 thousand c.u. The difference in this model is due to the presence of double counting (918.7 – 34.8 = 883.9 thousand c.u.).

Table 4 – A modified model of the tourism cluster

ths. c.u.

Conclusion. The study concluded the need of cluster development of tourism in the countries with transitive economy, provided justification for a conceptual approach to the development of tourism cluster business model based on the Leontief’s model.

REFERENCES

1. Darowski L., Strilchuk J., Provost C. (2006) “Negative Impact of Tourism on Hawaii Natives and Environment”, Lethbridge Undergraduate Research Journal. 2006. Volume 1. Number 2. [Online] DOI. Available at: http://www. lurj. org/ article.php/volln2/hawaii.xml/.

2. Donohoe, H.M., Needham, R.D. (2006) ´Ecotourism: The evolving contemporary definition´, Journal of Ecotourism, 5(3), 192–210.

3. Diamantis D.(1999) ‘The concept of ecotourism: evolution and trends’, Current Issues in Tourism, Vol. 2, № 2-3. – p. 93.

4. Hutchinson-Jafar L. (ed.) (2012) ‘UNHCR project brings light, security and fuel-efficient cooking to refugees’, in Earth Conscious, Trinidad and Tobago: Caribbean PR Agency. – p. 34.

5. Leontief Wassily (1986). Input – output economics. 2nd. ed. – Oxford University Press, 1986. – 436 P.

6. Mantel R. (2013) SPA tourism management in Kazakhstan, Russia and Armenia: current economic situation and investment climate. Actual Problems of Economics, Vol. 2, № 2, 2013. – pp. 75-83.

7. Minnaert L., Maitlandb R., Millera G. (2011) ‘What is social tourism?’, Current Issues in Tourism, Vol. 14, Issue 5, 2011, Special Issue: Social Tourism: Perspectives and Potential. DOI: 10. 1080/ 13683500. 2011.568051, pp. 403-415.

8. Nigg S. (2011). Changing travel booking patterns in European travel agencies, pp. 19-26, in Conrady, R.; Buck, M. (Eds.). Trends and Issues in Global Tourism 2011. 1st Edition. 2011, XXIV, 342 p. London: Springer-Verlag London Ltd.

9. Porter Michael (1990).Competitive Advantage of Nations. – New York: Free Press, 1990. – 896 p.

10. Shvets Yu.V. (2005). Public administration by a tourist cluster. Modern scientific messenger, Vol. 1, 2005.– pp. 77-84.

11. World Economic Forum (2013). Travel and Tourism Competitiveness Report 2013. at: http://www3. weforum. org/docs/WEF_TT_Competitiveness_Report_2013.pdf.



Table of contents: The Kazakh-American Free University Academic Journal №5 - 2013

  
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