Wildlife viewing: The impact of money-back guarantees

DOI HANDLE Web Site Web Site 1 Citations 55 References Open Access
  • Kubo, Takahiro
    Center for Environmental Biology and Ecosystem Studies, National Institute for Environmental Studies (NIES)
  • Mieno, Taro
    Agricultural Economics, Robert B. Daugherty Water for Food Global Institute Faculty Fellow, 209 Filley Hall, University of Nebraska-Lincoln
  • Kuriyama, Koichi
    Division of Natural Resource Economics, Graduate School of Agriculture, Kyoto University

Abstract

Wildlife sightings are not always guaranteed. To address this risk, tour operators often offer a money-back guarantee as a refund mechanism. However, studies have overlooked the influences of such refund mechanisms on tourists' tour participation decisions and tourism revenue. We conducted choice experiments to examine the impact of such mechanisms using a case of Amami rabbit tourism in Japan. We found that the guarantee significantly influences the tourists’ decision-making and tour revenue. In particular, we found that the expected tourist participation rate and tour guide revenue vary drastically depending on the probability of the rabbit encounter. The maximum expected revenue from the tour with a 90% chance was about 20 times larger than that with a 10% chance. This indicates that conserving wildlife to maintain the sighting probability raises tour benefits, creating a win-win situation by balancing conservation and tourism development.

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