Sustainable tourism entrepreneurship in protected areas. A real options assessment of alternative management options

Tourism entrepreneurship has not received sufficient attention in the context of protected areas (PAs). It needs careful management to avoid conflicts with conservation objectives and positively contribute to regional development. Traditional management approaches based on the strict application of the carrying capacity principle are suboptimal. An adaptive management framework has been demanded, but it has been scarcely adopted in practice or explored in previous research. Moreover, appropriate decision-making tools are lacking. This study proposes a combination of cost-benefit analysis (CBA) and real options analysis (ROA) to support the sustainable tourism entrepreneurship development in PAs under an adaptive management framework. Costs are related to the conservation and restoration activities, and benefits to the use and non-use value placed by visitors on it, measured through visitors' willingness to pay (WTP) for sustainable tourism. The proposed model also embraces uncertainty and flexibility, considering visitors' WTP and tourism demand as the primary sources of uncertainty. Through the analysis of the sustainable tourism management of Ons Island, part of the Marine-Terrestrial National Park of the Atlantic Islands of Galicia, we exemplify the power of a combined CBA-ROA approach and derive implications for policymakers, PA managers, tourism entrepreneurs, and researchers.