Cooperative tax pricing for sustainable tourism

: the case of the Algarve

Abstract

The tourism sector is fundamental for many economies around the world. However, it is also associated with several challenges, one of which is the mass concentration of tourists in popular hubs, resulting in an uneven distribution of not only the benefits but also the bur- dens on local public resources and infrastructure within destinations. In this thesis, we use the case of the region of the Algarve to explore the potential use of tourism taxation to redis- tribute tourism inflows in order to mitigate the issue and turn the sector more sustainable. Tourist consumption patterns and tourism pressure on public water services, wastewater, energy, and solid waste collection were quantified for each municipality, and an algorithm to identify the best pricing strategies was developed. We confirmed the viability of using tourism taxation to reduce discrepancies over the different municipalities’ tourism pressure without compromising the sector’s performance in the region. Furthermore, various factors that should be taken into account when defining pricing policies were identified, such as accommodation prices and price elasticity of tourism demand. We concluded that a coop- erative framework within all local municipal authorities is fundamental to achieve a more equitable distribution of tourism pressure in the region, as a correct price differentiation of tourism taxation is the key to the success of the proposed approach.

Date of Award	23 Jun 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Pedro Afonso Fernandes (Supervisor)