These limitations become increasing

These limitations become increasingly binding the greater the simulated change in demand. Although real world production relationships are most probably non-linear, it is not unreasonable to approximate these with linear specifications as long as the changes from the starting point remain relatively small. On the other hand, simulations that involve drastic changes from the means are likely to have poor predictive abilities.Despite of these limitations, an understanding of the caveats can help the analyst to overcome the weaknesses.Depending on the characteristics of the area of concern and on the tourist spending patterns, the assumptions at the base of I-O analysis could bias the values of the derived tourism multipliers (Fletcher, 1989; Briassoulis, 1991). As already noticed, for the employment multiplier values to hold true, it must be assumed that an increase in final demand will result in each sector increasing their demand for labour in a linear way. This will only be reasonable if every sector is operating at full utilization. Any underutilization will mean that sectors can expand output without resorting to employing additional staff. In the short run it is likely that most sectors will meet additional demand by either better utilization of existing personnel or by increasing over-time. In such cases, the employment multiplier will over-estimate the effects on employment. This can be particularly critical in the case of tourism, where the restaurant & hotel industry is typically characterized by capacity under-utilization (reflected in hotel occupancy rates lower than 100%). This means that additional tourists can be accommodated by existing hotels and restaurants with only a marginal increase in employment and in the inputs required from the other sectors of local economy. Further difficulties inherent to the assessment of employment impacts are related to seasonality problems (particularly important for sun&beach tourism) and to the fact that it is very common in tourismrelated establishments that many people employed in tourism also hold another job and part-time employment.Furthermore, it is also quite conceivable that some industries will not be able to respond to an increase in demand (particularly in the short-term run) and any increase in demand will need to be met by an increase in imports rather than an increase in the level of output of the domestic industries.