Externalities - Economics of Nuisance Tourism

This article highlights the negative externalities associated with so-called nuisance tourism in Amsterdam and the effects of a campaign conducted by the city's authorities that has reduced the number of stag parties coming to the city.

Please read: Amsterdam welcomes decline of nuisance tourism after ‘stay away’ drive

It's a question of striking a balance: tourism will have a positive multiplier effect, but if the size of the market failure is larger than this, then tourism is a net 'bad'. And even then, this is just an economic argument and Amsterdam will have taken a number of other factors into account in making this decision.

"Nuisance tourism" is a term used to describe tourism that causes problems or negative impacts on local communities and the environment. In Amsterdam, this can include:

• Overcrowding and congestion, particularly in popular tourist areas like the Red Light District or the city center.
• Excessive noise and partying, particularly from large groups of tourists staying in short-term rental accommodation.
• Pollution and littering, particularly in areas that are popular with tourists.
• Disrespectful behavior towards local residents, including public drunkenness, public urination, and vandalism.
• Amsterdam has seen a significant increase in tourism in recent years, with over 18 million visitors in 2019. This has led to growing concerns about the impact of tourism on local communities and the environment.
• The city has introduced a range of measures to control nuisance tourism, including limits on the number of tourists in certain areas, restrictions on short-term rentals, and increased enforcement of laws against antisocial behavior.