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Measuring the Economic Impact of Australian Tourism Marketing Expenditure

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  • Nada Kulendran
  • Sarath Divisekera

Abstract

The objective of this study is to quantify the effects of marketing expenditure by the Australian Tourist Commission (ATC). Cointegration analysis and a dynamic modelling approach are used to estimate the elasticity estimates of income, price, price of substitute, cost of travel and marketing expenditure for Australia's four major tourism markets, USA, Japan, UK and New Zealand. ATC marketing expenditure has a positive effect on international tourism demand and the magnitude of the effect varies from country to country. In promoting international visitor arrivals to Australia, not only ATC and non-ATC marketing but the word-of-mouth effect and visitor satisfaction leading to repeat visits also play an important role. The performance of the ATC marketing strategy measured in dollar return per dollar invested in the international tourism marketing is higher in the New Zealand market, followed by the UK, Japan and US markets. The estimated overall average dollar return per dollar invested in international tourism marketing is 8:1.

Suggested Citation

  • Nada Kulendran & Sarath Divisekera, 2007. "Measuring the Economic Impact of Australian Tourism Marketing Expenditure," Tourism Economics, , vol. 13(2), pages 261-274, June.
    • Handle: RePEc:sae:toueco:v:13:y:2007:i:2:p:261-274
    DOI: 10.5367/000000007780823212
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    References listed on IDEAS

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    1. N. Kulendran, 1996. "Modelling Quarterly Tourist Flows to Australia Using Cointegration Analysis," Tourism Economics, , vol. 2(3), pages 203-222, September.
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    3. Kulendran, N. & King, Maxwell L., 1997. "Forecasting international quarterly tourist flows using error-correction and time-series models," International Journal of Forecasting, Elsevier, vol. 13(3), pages 319-327, September.
    4. Banerjee, Anindya & Dolado, Juan J. & Galbraith, John W. & Hendry, David, 1993. "Co-integration, Error Correction, and the Econometric Analysis of Non-Stationary Data," OUP Catalogue, Oxford University Press, number 9780198288107, Decembrie.
    5. Divisekera, Sarath, 1995. "An Econometric Model of International Visitor Flows to Australia," Australian Economic Papers, Wiley Blackwell, vol. 34(65), pages 291-308, December.
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    Citations

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    Cited by:

    1. Fateh Habibi, 2015. "Iranian Tourism Demand for Malaysia: A Bound Test Approach," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 19(1), pages 63-80, Winter.
    2. Dutta, Nabamita & Kar, Saibal, 2018. "Relating rule of law and budgetary allocation for tourism: Does per capita income growth make a difference for Indian states?," Economic Modelling, Elsevier, vol. 71(C), pages 263-271.
    3. Giovanni De Luca & Monica Rosciano, 2020. "Quantile Dependence in Tourism Demand Time Series: Evidence in the Southern Italy Market," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    4. Yap, Ghialy & Allen, David, 2011. "Investigating other leading indicators influencing Australian domestic tourism demand," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 81(7), pages 1365-1374.
    5. Jaume Rosselló-Nadal & Jianan HE, 2020. "Tourist arrivals versus tourist expenditures in modelling tourism demand," Tourism Economics, , vol. 26(8), pages 1311-1326, December.
    6. Forsyth, Peter & Dwyer, Larry & Spurr, Ray & Pham, Tien, 2014. "The impacts of Australia's departure tax: Tourism versus the economy?," Tourism Management, Elsevier, vol. 40(C), pages 126-136.
    7. Habibi, Fateh & Abdul Rahim, Khalid & Chin, Lee, 2008. "United Kingdom and United States Tourism Demand for Malaysia:A Cointegration Analysis," MPRA Paper 13590, University Library of Munich, Germany.
    8. Seetaram, Neelu, 2010. "Computing airfare elasticities or opening Pandora's box," Research in Transportation Economics, Elsevier, vol. 26(1), pages 27-36.
    9. Wai Hong Kan Tsui & Faruk Balli, 2017. "International arrivals forecasting for Australian airports and the impact of tourism marketing expenditure," Tourism Economics, , vol. 23(2), pages 403-428, March.
    10. Muhammad Shafiullah & Luke Emeka Okafor & Usman Khalid, 2019. "Determinants of international tourism demand: Evidence from Australian states and territories," Tourism Economics, , vol. 25(2), pages 274-296, March.
    11. repec:ebl:ecbull:v:6:y:2008:i:45:p:1-16 is not listed on IDEAS
    12. Saroja Selvanathan & Maneka Jayasinghe & Eliyathamby A. Selvanathan, 2023. "Deteriorating Australia-China relations and prospects for the Australian tourism industry: A dynamic demand analysis," Tourism Economics, , vol. 29(8), pages 2012-2031, December.
    13. Divisekera, Sarath, 2010. "Economics of tourist's consumption behaviour: Some evidence from Australia," Tourism Management, Elsevier, vol. 31(5), pages 629-636.

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