Understanding relationships among travel expenditure, activities, and seasons: An approach to efficient travel segment mixes using financial portfolio theory
Abstract
The overall goals of this research were two-fold. One was to verify causal relationships among travel expenditure, activities, and seasons. The other was to identify efficient travel segment mixes that allow destination tourism policy-makers and marketers to efficiently plan, develop, and market their destinations so that they can have greater and more stable tourism receipts. A few multivariate statistical techniques were used to achieve the goals. Path analysis was employed to test the hypothesized causal relationships among travel expenditure, activities, and seasons, and verified that there are significant relationships among the three variables. Cluster Analysis and Quadratic Programming were then conducted to find the French outbound travel activity segments and efficient travel segment mixes. A Hierarchical cluster analysis, using activity factor scores as the basis for the clustering, produced five distinct segments with similar activity participation patterns. The segments were labeled as “shopping and dining”, “nature and local lifestyle”, “culture and entertainment”, “touring and sightseeing”, and “passive” segments. Monthly tourism receipts were calculated for each of the five segments. With the variance-covariance matrix of the tourism receipts across the five segments, Quadratic Programming identified the efficient segment mixes. In addition, based on Financial Portfolio Theory, a Tourism Efficient Frontier was drawn from the set of efficient travel segment mixes. One of the most unique contributions of this research is that it demonstrated how to obtain a Tourism Efficient Frontier of a destination and how to interpret the Frontier for the tourism development and marketing. The Frontier can function as a map of the expected tourism receipts and the risk, and once a target point on the Frontier is selected, the efficient segment mixes can be obtained to achieve the point. The Financial Portfolio Model suggests making explicit the range of travel segment mixes associated with different tourism receipt-risk trade-offs and quantifying the changes that are required to attain them. In conclusion, destination policy-makers and marketers can select a receipt-risk combination on the basis of the destination life cycle status and direct their development and marketing strategies toward the achievement of the segment mix that will bring it about.
Degree
Ph.D.
Advisors
Morrison, Purdue University.
Subject Area
Marketing|Recreation
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