The “Power” of Tourism in Portugal

In this paper we analyze the upper tail of the distribution of tourism supply in Portugal, from 2002 to 2009, using data belonging to the Instituto Nacional de Estatística database. Tourism supply is defined in terms of lodging capacity of hotel establishments in about 250 tourism destinations. It is shown that the empirical distribution of tourism supply in Portugal is heavy-tailed and consistent with a power law behavior in its upper tail. Such behavior seems to be stable over the years, provided that for the time horizon covered by our data sets, the scaling parameter is always close to the value of 2. The power law hypothesis is positively tested by making use of graphical and analytical methods.