Can the Butler's Tourist Area Cycle of Evolution Be Applied to Find the Maximum Tourism Level? A Comparison of Norway and Iceland to Other OECD Countries

This research seeks to analyze the S-shape of the Butler's tourist area cycle of evolution in order to capture the maximum tourist level. It is the first time this type of economic regression modeling is performed for the Butler's tourist area cycle of evolution, referred to as the tourism area life cycle (TALC) model. Also, this is the very first time the cycle is applied to forecast a potential peak in inbound tourists in a particular country and sample of countries. To capture the non-monotonic relationship of the cycle, a fifth-degree polynomial is put forward, accounting for government, banks, roads, skilled labor, and Internet application. Results indicate that the S-shape of the Butler's tourist area cycle of evolution can be captured with a polynomial function for a range of OECD countries, as well as for Norway and Iceland combined and for Iceland solely. This can be interesting as well as useful for tourism researchers seeking to explain the flow of tourists. The main implication of this study to managers and tourism policy planners is the potential to apply the TALC model to estimate development and potential peaks in the tourism industry in advance, years before the tourist level reaches maturity at the top.