The tourist area lifecycle and the unit roots test. A new economic perspective for a classic paradigm in tourism.

As many traditional tourist destinations have experienced a slow down in tourist arrivals and expenditure, Butler’s (1980) Tourist Area Life Cycle (TALC) model seems to attract new attention from tourist researchers. The TALC describes the evolution of a tourist area from its discovery to its final stage picturing an evolutionary path represented with an S shaped curve associated to the logistic function. The limits of growth and the shape of the curve represent the existence of congestion problems and upper carrying capacity limits. But the TALC has been repeatedly criticized by its lack of operability and its departures from the anticipated curve. An alternative way to test its existence is to estimate its theoretical logistic curve and test the presence of unit roots. The application of this new technique to Majorca concludes that the evolutionary path predicted by the TALC does not apply in this particular case. Even more, the empirical results could imply that shocks that affect to this destination will have not temporary but permanent effects, encouraging the adoption of pro-active policy measures.