ABSTRACT
This chapter discusses the problem in terms of the concepts of the branch of economics most suited to its analysis, public economics. It considers the economic incentives that are currently used in the tourism sector. The chapter explores the conditions under which it might be optimal to restrict tourist numbers and examines how this might be achieved using economic instruments. Large numbers of tourists generate congestion and so reduce the pleasure in visiting an area or in living there. Based largely on EU money, these programmes have sought to develop the Irish tourist industry through direct government spending and also the subsidising of private sector tourism spending. However, given the economic benefits which accrue from tourism, pressure is likely to remain for policies to pursue the maximum as opposed to the optimum. The chapter outlines the standard proposed solutions to peak-load problems and ask whether these proposals are implementable in the tourism context.
