IP Publishing Ltd
December 2009 (Vol 15 No 4)
693 Effect of seasonality treatment on the forecasting performance of tourism demand models
709 The economic contributions of human-powered outdoor recreation to the US economy
735 The economics of US cruise companies’ European brand strategies
753 Tourism in Galicia: domestic and foreign demand
771 An econometric analysis of the effects of tourism growth on municipal revenues and expenditures
803 Impacts of climate change on domestic tourism in the UK: a panel data estimation
813 Price interactions between theme park and tour operator
847 Gender segregation and wage difference in the hospitality industry
867 Research note: The impact of Korean TV dramas on Taiwanese tourism demand for Korea
875 Research note: The convergence hypothesis for tourism markets: evidence from Singapore
891 The Thea Sinclair Award for Journal Article Excellence, 2009
893 Index to Volume 15, 2009
Title: Effect of seasonality treatment on the forecasting performance of tourism demand models
Abstract: This study provides a comprehensive comparison of the performance of the commonly used econometric and time-series models in forecasting seasonal tourism demand. The empirical study is carried out based on the demand for outbound leisure tourism by UK residents to seven destination countries: Australia, Canada, France, Greece, Italy, Spain and the USA. In the modelling exercise, the seasonality of the data is treated using the deterministic seasonal dummies, seasonal unit root test techniques and the unobservable component method. The empirical results suggest that no single forecasting technique is superior to the others in all situations. As far as overall forecast accuracy is concerned, the Johansen maximum likelihood error correction model outperforms the other models. The time-series models also show superior performance in dealing with seasonality. However, the time- varying parameter model performs relatively poorly in forecasting seasonal tourism demand. This empirical evidence suggests that the methods of seasonality treatment affect the forecasting performance of the models and that the pre-test for seasonal unit roots is necessary and can improve forecast accuracy.
Title: The economic contributions of human-powered outdoor recreation to the US economy
Abstract: This paper presents a comprehensive assessment of the economic contributions of the major forms of human-powered outdoor recreation, including trail-based recreation, bicycle-based recreation, paddle-based recreation, snow-based recreation and camp-based recreation. The results show that the combined economic contributions of human-powered recreation to the US economy exceed US$590 billion annually in total gross output, supporting over five million jobs. Other studies estimate that wildlife-based recreation contributes another US$140 billion annually in total gross output to the US economy, making a total contribution of US$730 billion from both human-powered and wildlife-based recreation. Active outdoor recreation not only strengthens the US economy but also improves the quality of life for participants.
Title: The economics of US cruise companies’ European brand strategies
Abstract: Carnival and Royal Caribbean control two-thirds of the global cruise ship capacity. Although they share the same ambition to grow in Europe, they have never shared the same strategy. Carnival adopted a strategy of multiple decentralized local brands, each with its own capacities and prices, while Royal Caribbean chose a global brand, capacity and pricing strategy. However, Royal Caribbean’s acquisition of Pullmantur in Spain, and the subsequent announcements of a dedicated cruise line for France and of a joint venture with TUI in Germany, mark a fundamental strategy change. Using microeconomic modelling, this paper investigates the rationale for that change.
Title: Tourism in Galicia: domestic and foreign demand
Abstract: This paper analyses the main determinants of the demand for tourism in Galicia and quantifies their incidence. The author elaborates two models depending on the origin (domestic or foreign) of the tourists. For domestic demand, a panel of annual data on the 17 regions of origin of tourists during 1999–2006 is used. For international demand, another annual panel is used, comprising data on 24 countries of origin of tourists for the same period. The estimated elasticities suggest that both domestic and foreign tourism in Galicia are very sensitive to income in the origin markets and to prices. Other findings are the dependence of domestic tourism on its own past and the sensitivity of tourism to the celebration of the Holy Year. The results may be of use to professionals and policymakers in their decision-making processes.
Title: An econometric analysis of the effects of tourism growth on municipal revenues and expenditures
Abstract: The major source of change in the tourism industry of New London County, Connecticut, over the past one and a half decades has been the dramatic influx of visitors to the county’s two American Indian casinos: Foxwoods, opened in 1992, and Mohegan Sun, opened in 1996. This study seeks reasonable estimates of municipal-level revenues and expenditures related to tourism growth during 1993–2002, for each of the 21 municipalities in the county. The authors conduct an econometric analysis to separate three factors with different spatial impacts on revenues and expenditures: those due to the residential locations of new tourism employees, those due to the business location of new tourism enterprises and those due to the pattern of increased traffic caused by new visitor travel.
Abstract: This paper investigates the contribution of transportation capital, an often neglected element in the overall attractiveness of Mauritius as a tourist destination. To gauge its effect, the study extends a classical demand for international tourism function to include a proxy of transport infrastructure. Accounting for the possibility of endogeneity and dynamism in tourism modelling, cointegration analysis in a vector autoregressive model is employed to assess the hypothesized link. Results from the analysis show that the stock of transport capital has contributed positively to the number of tourist arrivals in both the short run and the long run. The study thus highlights the importance of transport capital in adding to the value of tourism service and experience.
Title: Impacts of climate change on domestic tourism in the UK: a panel data estimation
Abstract: Climate change is likely to have a significant impact on a number of key economic sectors, including tourism. The authors employ panel data techniques on regional tourist and climatic data in the UK to estimate the influence of temperature, precipitation and sunny conditions on domestic tourism. Significant impacts are found, including lagged relationships. The model is then used to estimate the impact of the hot weather of summer 2003 on domestic tourism in the UK, finding a positive impact on revenues ranging between £14.79 million and £30.32 million.
Title: Price interactions between theme park and tour operator
Abstract: This paper conducts a theoretical investigation into pricing competition and coordination between Hong Kong Disneyland (HKD) and a tour operator. HKD supplies two types of admission ticket to the tour operator: an admission-only ticket and a package ticket that combines admission to the park and one night’s accommodation in its hotels. The tour operator then sells these two types of admission ticket in the target market. A Stackelberg game model is proposed to formulate the leader– follower relationship, with HKD leading and the tour operator following. The equilibrium prices are derived by backward induction. The theoretical results show that HKD can coordinate with the tour operator through a quantity discount schedule. A Nash bargaining game suggests that HKD receives a larger share of the profit growth due to its dominant market power.
Abstract: This study examines the usefulness of the theory of transaction cost economics (TCE) for the online travel market and investigates customer satisfaction and loyalty with the transaction cost over the Internet taken into account. Using structural equation modelling (SEM), the authors identify the relationships among the antecedents (uncertainty, personal security and buying frequency), the mediating variable (transaction costs) and endogenous constructs (customer satisfaction and loyalty). The findings suggest that the satisfaction and loyalty of customers purchasing travel products over the Internet are affected negatively by transaction costs, which are determined by uncertainty, personal security and buying frequency. Moreover, a significantly negative relationship is identified between buying frequency and customer satisfaction.
Title: Gender segregation and wage difference in the hospitality industry
Abstract: This article estimates the contribution of different types of gender segregation to the wage difference between men and women in the hospitality industry. Matched employer–employee data from a sample of hotels and restaurants in Andalusia are used to this end. The data source includes information on 181 hotels and 121 restaurants. Impacts on the wage gap are obtained for two empirical specifications. In the first, equal returns of observable variables are assumed for men and women and, in the second, returns are assumed to be different for each gender. The authors find that industrial and vertical segregation – and to a lesser extent establishment segregation – increase the wage differential. However, horizontal and category segregation help to diminish this, although the impact of the latter is not very substantial. Regarding occupational segregation, women predominate in worst-paid jobs, but their wages drop less than men’s earnings. These estimations are robust to both empirical specifications.
Title: Research note: The impact of Korean TV dramas on Taiwanese tourism demand for Korea
Abstract: This study examines the effects of popular Korean TV dramas on Taiwanese outbound travel to Korea between 1997 and the end of 2005. The popularity of Korean TV dramas began with the drama Fireworks, first shown in Taiwan from July to September 2000. Based on that information, the data were divided into two subsamples: January 1997 to September 2000 and October 2000 to December 2005. The Chow tests revealed a significant structural change in the total number of Taiwanese visitors to Korea between the two sample periods. Additional analyses indicated that a significant structural change was attributable mainly to the increase in pleasure travel, further demonstrating the strong effects of Korean TV series in Taiwan. Empirical results support the concept of film-induced tourism.
Title: Research note: The convergence hypothesis for tourism markets: evidence from Singapore
Abstract: This research note takes a brief empirical look at the convergence hypothesis in terms of long-run convergence and convergence as catching up, using data from Singapore over two periods. The findings suggest that in the recent period, international visitor arrivals in Singapore from either Africa or Europe are catching up with those from Asia. The international visitor arrivals in Singapore from either the Americas or Oceania are converging with those from Asia. The international visitor arrivals in Singapore from Europe are diverging from those of Asia in the earlier period.
Abstract: This study contributes to the existing literature by examining whether the SARS (severe acute respiratory syndrome) health scares had a permanent or transitory effect on tourist arrivals in a transition economy – Cambodia. The findings, which are based on unit root tests with an unknown level shift proposed by Lanne et al (2002) and Saikkonen and Lütkepohl (2002), show that visitor arrivals from Cambodia’s major source markets are stationary. This implies that the SARS crisis had a transitory effect on Cambodia.