An empirical study of outbound tourism demand in the UK

Haiyan Song*, Peter Romilly, Xiaming Liu

*Corresponding author for this work

Research output: Contribution to journalArticle

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.

Original languageEnglish
Pages (from-to)611-624
Number of pages14
JournalApplied Economics
Volume32
Issue number5
DOIs
Publication statusPublished - 1 Jan 2000

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Tourism demand
Empirical study
Destination
Income elasticity
Holidays
Tourism
Tourists
Forecasting performance
Extracellular matrix
Substitute
Income
Performance criteria
Methodology
Short-run
General-to-specific
Error correction model
Autoregressive moving average
Social accounts
Ireland
Tourism destination

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Song, Haiyan ; Romilly, Peter ; Liu, Xiaming. / An empirical study of outbound tourism demand in the UK. In: Applied Economics. 2000 ; Vol. 32, No. 5. pp. 611-624.
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An empirical study of outbound tourism demand in the UK. / Song, Haiyan; Romilly, Peter; Liu, Xiaming.

In: Applied Economics, Vol. 32, No. 5, 01.01.2000, p. 611-624.

Research output: Contribution to journalArticle

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