Modeling Tourism Demand Dynamics

This article applies a combination of a diffusion model and a traditional tourism demand model for visitor demand estimation. The diffusion model assumes that information is transmitted to a society’s potential consumers through various different information channels. The traditional model suggests, however, that tourism, according to economic theory, depends mainly on fares, income, exchange rates, and dummy variables. Using data for tourists to the Balearic Islands, we found evidence that individuals undergo a prior process of acquiring information before deciding to visit a particular destination.