Modelling tourist expenditure at origin and destination

Abstract

This article proposes a model of foreign tourist expenditure, based on expenditure in the country of origin (i.e. reservation of accommodation and transport) and on goods and services at the destination. The study focuses on two measures reflecting the two types of expenditure: the tourist budget share and the difference in growth rates between expenditure at origin and at destination. The random nature of each of these variables is taken into account. The tourist budget share is determined using a fractional response model, based on the beta distribution. This approach allows us to accommodate certain aspects of the empirical budget share distribution, such as skewness, and to represent the results as bounded between 0 and 1, but also to include covariates. The empirical analysis was conducted using data obtained by the Canary Islands Tourist Expenditure Survey, focusing on German and British tourists in particular. The results obtained show that the fractional regression model proposed represents the behaviour of the relevant variables reasonably well and surpasses the performance of the linear regression model.

Tourist tax to promote rentals of low-emission vehicles

“…Among the variables reflecting vacation characteristics, positive significant coefficients were obtained for group size and booking in advance. According to Gómez-Déniz et al (2020), although tourists who travel in a group often obtain a slight reduction in cost, they spend more at the destination, which supports the results of our analysis. Following Brida et al (2013) regarding the effect of group size on tourism expenditure, it seems reasonable to assume that when the total rental cost of a car depends on the number of people travelling together, the per capita expenditure will decrease as the number of travellers increases.…”

“…These two variables were also considered separately by Gómez-Déniz et al (2020), who suggest that each may produce different effects. In this respect, Aguiló et al (2017) observed a negative relationship between daily expenditure on transport at the destination and the reason for the trip, when this was to spend most of the time at the beach.…”

Modeling expenditure differentials of international tourists by targeted utility: A synthesized theoretical and quantile decomposition approach

“…Within a related context, Gómez‐Déniz et al. (2020) analyze the expenditures of British and German tourists to the Canary Islands via a fractional response model, while differentiating between tourists’ budget shares at the country of origin and destination. Results confirm that the use of low‐cost carriers increases budget shares at the destination.…”

A Microeconomics Analysis of the Per Diem Expenditure of British Travellers

“…The most recent studies on the British tourists focus on the British consumer's willingness to pay for tourism taxation (Seetaram, Song, Ye & Page, 2018). Song, Seetaram & Ye (2019) study the budget allocation of British travellers and Gómez-Déniz, Pérez-Rodríguez & Boza-Chirino (2019) analyse the expenditure patterns of British tourists in Canary Islands.…”

“…This is one of the first studies which perform the analysis on British outbound expenditure and unlike previous studies the results are not destination specific. For example, Gómez-Déniz et al(2019) provide insights on British behaviour relevant to Cyprus. Traditionally, the literature on tourism demand is largely dominated by studies of inbound expenditure (tourism export).…”