How do prosperity and aspiration underlie leisure tourism expenditure patterns?

Usamah F. Alfarhan*, Hossein Olya, Khaldoon Nusair

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

This research advances the current knowledge of tourism expenditure by adapting a new analytical approach to understand expenditure differentials along their conditional distributions, based on multiple segmentation criteria. Using data from survey and secondary sources, we approximate tourists’ required utilities via prosperity at their countries of residence, a macro-level criterion, and individual-travel aspirations, a micro-level criterion. Subsequently, expenditure differentials between more and less prosperous/aspired tourists are decomposed into two components. First, group differences in expenditure covariates that represent tourists’ relative consumption behaviors and, second, differences in the estimated returns to those covariates, measuring potential third-degree price discrimination. Our results guide policy makers in the tourism industry to develop pricing strategies capable of generating mark-ups within all viable segmentations.

Original languageEnglish
JournalTourism Economics
DOIs
Publication statusAccepted/In press - 2022

Keywords

  • aspiration
  • conditional quantile regression
  • expenditure decomposition
  • prosperity

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Tourism, Leisure and Hospitality Management

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