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An empirical study of outbound tourism demand in the UK


  • Haiyan Song
  • Peter Romilly
  • Xiaming Liu


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.

Suggested Citation

  • Haiyan Song & Peter Romilly & Xiaming Liu, 2000. "An empirical study of outbound tourism demand in the UK," Applied Economics, Taylor & Francis Journals, vol. 32(5), pages 611-624.
  • Handle: RePEc:taf:applec:v:32:y:2000:i:5:p:611-624
    DOI: 10.1080/000368400322516

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    References listed on IDEAS

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