Seasonality, Infrastructures and Economic Growth in Touristic Islands

Abstract

Tourism is the main economic activity in some small islands that have became very dependent on this activity. Sun and beach destinations are characterized by high levels of seasonality, with consequences on unemployment, economic activity diversification and GDP per capita. This paper analyzes the empirical evidence from the Balearic island of Mallorca, one of the most important touristic destinations in Spain. This research has analyzed the existence of correlation between seasonality and unemployment, GDP per capita, housing prices, the paper also examines the importance of location and infrastructure. The variable with a highest explanatory capacity in terms of GDP per capita is the distance to the airport. National and regional governments must consider the importance of infrastructures and the role seasonality plays in economic growth and economic activity diversification; the understanding of these relations will help to develop the most adequate public policies.