# **Vc. Exchange rate and price competition**

The increasing spending per tourist in STP reflects the REER appreciation and can also be linked to high airfares. In order to evaluate this dynamic, consider the evolution of the real exchange rates; in particular, evaluate the relative trends in prices and exchange rates with respect to the euro-euro zone (RER_EURO), the US dollar-US (RER_US), and the British pound-UK (RER_POUND). This analysis is done for the 1999-2016 period for STP (Figure 18), for the five countries of comparison (Figure 19 to Figure 21), and the 2016 values for a larger comparison group (Figure 22 to Figure 24). All the figures indicate that STP’s currency has appreciated the most in the relevant comparison group. Note, however, that the average spending per tourist includes the air ticket; therefore, a high expenditure in STP could be a reflection of comparably more expensive tickets to STP due to low airlift competition rather than actual high-spending tourists. As discussed above, a more detailed data set on how tourists spend their money would be needed to separate expenditures by categories.

# **Vd. Digital presence and Instagram posts**

ICT and digital marketing allow countries to reach potential tourists in a more direct way and can be a boost for niche destinations. Many tourism destinations have taken to the social media and social networks to market their products, reaching markets previously inaccessible to them.<sup>11</sup> This can be particularly more intense in the type of tourism that STP wants to promote, “discovery” tourism, targeting travelers who are looking for lesser known destinations that offer attractions like nature, culture, etc. with strong emphasis on environmental protection and positive social impact.

The collected digital presence data proved to be very volatile, and only Belize and the Maldives showed some persistent improvement in this metric. Following the relatively new literature about the digital presence effects on tourism and other industries, consider now the Instagram posts. As discussed above, these correspond to daily data, aggregated on a monthly basis that mentions a given country. Figure 25 reports the evolution of posts for 2016 to the latest 2018 available data. The series are very volatile and, therefore, it is difficult to extract clear trends and patterns. This may signal that it is difficult to maintain a consistent digital presence or a great influence of one-off factors such as campaigns or events. From the data, some preliminary conclusions can be extracted. First, there is a significant increment in volume for all destinations (but only Belize and Maldives seem to have achieved some persistent digital presence). There is, however, a relative decline for the latest data collected. Second, STP has a considerable increment around 2018, when it reaches the numbers of other locations with many posts. This is not maintained for subsequent periods, however. Unfortunately, the frequency and nature of the data cannot be used to further investigate the effect of digital footprints on tourist arrivals or to relate measures. The digital presence cannot be used in the subsequent regression analysis because the tourism data set only has observations up to 2016, and, therefore, it overlaps with this data in only one year.

> 11 The OECD Tourism Trends and Policies 2018 recognizes that the increased use of digital means is a recent trend: “ _An increasing focus on digital strategies, with digital platforms opening new partnership opportunities and routes to market with reduced costs compared to traditional marketing approaches_ ”.

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