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An empirical study of outbound tourism demand in the UK

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Author Info

  • Haiyan Song
  • Peter Romilly
  • Xiaming Liu

Abstract

A general to specific methodology is used to construct UK demand for outbound tourism models to twelve destinations. A tourism destination preference index is introduced to take into account social, cultural and psychological influences on tourists' decisions concerning their overseas holiday destinations. The tests support the existence of a cointegration relationship for each of 11 UK overseas holiday destinations. The corresponding error correction models are estimated. The empirical results show that the long-run income elasticities for all destinations range from 1.70 to 3.90 with an average of 2.367. The lowest and highest short-run income elasticities are 1.05 and 3.78 respectively, with an average of 2.216. The estimates of the income elasticities imply that overseas holidays are highly income elastic while the own-price elasticities suggest that the demand for UK outbound tourism is relatively own-price inelastic. In terms of the significance of substitution prices in the regression equations, Ireland is the favourite substitute destination for UK outbound tourists. Ex post forecasts over a period of six years are generated from the ECM models and the results compared with those of a naive model, an AR(1) model, an ARMA(p,q) model, and a VAR model. The forecasting performance criteria show that the ECM model has the best overall forecasting performance for UK outbound tourism.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 32 (2000)
Issue (Month): 5 ()
Pages: 611-624

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Handle: RePEc:taf:applec:v:32:y:2000:i:5:p:611-624

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Citations

RePEc Biblio mentions

As found on the RePEc Biblio, the curated bibliography for Economics:
  1. > Industrial Organization > Industry studies > Sports, recreation and tourism > Tourism
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Cited by:
  1. Lucian Cernat & Julien Gourdon, 2011. "Is the concept of sustainable tourism sustainable? Developing the Sustainable Tourism Benchmarking Tool," Working Papers halshs-00557121, HAL.
  2. Pulina, M. & O'Brien, R.J., 2002. "Monthly, annual and quarterly frequencies: a comparison of models for tourism in Sardinia and bounded rationality," Discussion Paper Series In Economics And Econometrics 0206, Economics Division, School of Social Sciences, University of Southampton.
  3. Naudé, Wim & Saayman, Andrea, 2005. "Determinants of tourist arrivals in Africa: a panel data regression analysis," MPRA Paper 16479, University Library of Munich, Germany.
  4. Ferda Halicioglu, 2005. "An Ardl Model Of Aggregate Tourism Demand For Turkey," International Trade 0503005, EconWPA.
  5. Halicioglu, Ferda, 2008. "An Econometric Analysis of Aggregate Outbound Tourism Demand of Turkey," MPRA Paper 6765, University Library of Munich, Germany, revised 2008.
  6. Haiyan Song & Egon Smeral & Gang Li & Jason L. Chen, 2008. "Tourism Forecasting: Accuracy of Alternative Econometric Models Revisited," WIFO Working Papers 326, WIFO.
  7. M. Pulina, 2003. "Quantitative forecasting for Tourisme: OLS and ARIMAX approaches," Working Paper CRENoS 200303, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  8. repec:wyi:journl:002126 is not listed on IDEAS
  9. repec:wyi:journl:002100 is not listed on IDEAS
  10. Allison Zhou & Carl Bonham & Byron Gangnes, 2007. "Modeling the supply and demand for tourism: a fully identified VECM approach," Working Papers 200717, University of Hawaii at Manoa, Department of Economics.
  11. Salih Katircioğlu & Sami Fethi & Hamit Caner, 2014. "Testing the higher education-led growth hypothesis in a small island: an empirical investigation from a new version of the Solow growth model," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(2), pages 729-744, March.
  12. William Maloney & Gabriel V. Montes Rojas, 2005. "How elastic are sea, sand and sun? Dynamic panel estimates of the demand for tourism," Applied Economics Letters, Taylor & Francis Journals, vol. 12(5), pages 277-280.
  13. Bonham, Carl & Gangnes, Byron & Zhou, Ting, 2009. "Modeling tourism: A fully identified VECM approach," International Journal of Forecasting, Elsevier, vol. 25(3), pages 531-549, July.
  14. repec:wyi:journl:002105 is not listed on IDEAS
  15. Song, Haiyan & Witt, Stephen F. & Jensen, Thomas C., 2003. "Tourism forecasting: accuracy of alternative econometric models," International Journal of Forecasting, Elsevier, vol. 19(1), pages 123-141.

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