How important are prices in long-haul travel? Evidence from New Zealand

Puneet Vatsa; Faruk Balli

doi:10.1177/13548166231215382

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How important are prices in long-haul travel? Evidence from New Zealand

Journal article

Open access

Peer reviewed

How important are prices in long-haul travel? Evidence from New Zealand

Puneet Vatsa and Faruk Balli

Tourism Economics, Vol.30(6), pp.1492-1507

2024

DOI: https://doi.org/10.1177/13548166231215382

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Abstract

income elasticity

price elasticity

tourism demand

New Zealand

ARDL

Tourism demand theory postulates that tourists' incomes, prices in destination countries, and prices in tourists' countries of origin are key determinants of tourism demand-but must this hold for long-haul travel? We find the answer to be no. By analyzing three international tourist archetypes arriving in New Zealand, a remote island nation, from seven countries, we demonstrate that neither incomes nor prices affect tourism demand in the short run. In the long run, some evidence suggests that tourism demand is income-sensitive; however, it remains insensitive to price changes. We also show that estimates of price elasticities are sensitive to how models are specified and should be interpreted cautiously. The results of this study are broadly relevant to long-haul destinations worldwide.

Details

Title: How important are prices in long-haul travel? Evidence from New Zealand
Authors: Puneet Vatsa - Lincoln University
Faruk Balli (Corresponding Author) - Massey University
Publication details: Tourism Economics, Vol.30(6), pp.1492-1507
Publisher: Sage Publications Ltd.
Date published: 2024
DOI: 10.1177/13548166231215382
ISSN: 2044-0375; 1354-8166
Copyright note: © The Author(s) 2023. This article is distributed under the terms of the Creative Commons Attribution 4.0 License (https://creativecommons.org/licenses/by/4.0/) which permits any use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access page (https://us.sagepub.com/en-us/nam/open-access-at-sage).
Organisation Unit: School of Business and Creative Industries
Language: English
Record Identifier: 991148737802621
Output Type: Journal article

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Collaboration types: Domestic collaboration; International collaboration
Web Of Science research areas: Economics; Hospitality, Leisure, Sport & Tourism

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