Sectoral productivity and destination competitiveness

Abstract

To improve the quality of life of destination communities in the context of an expanding global economy, tourist destinations must sharpen their competitive advantages through increased productivity. In this study, we investigate the effect of sectoral productivity on destination competitiveness, using Hong Kong as an example. The competitiveness of a destination is measured by tourism-contributed quality of life relative to that of competing destinations. An autoregressive distributed lag model with error correction mechanism is used to model the relationship between destination competitiveness and various sectoral productivities. The productivity effects of several related sectors are identified through an empirical econometric analysis and the results show that destination competitiveness is more dependent on the productivities of core tourism sectors than those of other sectors.