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This article examines the decaying effect of distance decay in outbound air travel from Hong Kong. Distance decay theory predicts that demand will peak at some distance relatively close to a source market and then decline exponentially as distance increases. The standard distance decay relationship is predicated on the assumption of a uniform distribution of tourism products over space. However, as discussed in the article, supply is not distributed evenly, with large areas representing Effective Tourism Exclusion Zones (ETEZ). The effect of these tourism exclusion zones is to distort the standard distance decay curve, accelerating decay rates between the source markets and the inner boundary of the ETEZ and producing a concentration of higher demand at points beyond its outer boundary. In addition, for the Hong Kong market, the ETEZ formed a behavioral barrier between short haul and long travel behavior patterns.
McKercher et al. (Wed,) studied this question.
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