Investment valuation of natural tourist attractions under the uncertainty of multiple unexpected events: an ROV method

This study applies the real options valuation (ROV) method with a jump process to consider the uncertainty of multiple unexpected events (UEs) when building investment valuation models for natural tourist attractions (NTAs). Unlike previous studies, this investigation considers multiple UEs from a pre-events, micro-level perspective. In considering both homogeneous and heterogeneous UE scenarios, certain conclusions can be drawn, so long as the project value of an NTA is known. In assessing diverse scenarios, it can be generally predicted that the greater the UE effects, the higher the degree of uncertainty; also, the more extensive the damage caused by UEs and the more frequent their occurrence, the greater the expense of an investment opportunity, and the longer the wait until the optimal time for investment. In assessing both homogeneous and heterogeneous UE scenarios, this study finds that investments should be valued differently under each type of scenario. In determining the optimal time to invest in NTAs that face differing types of UEs, strategic delay is found to be advantageous in many cases.