Paving the way towards superstar destinations: Models of convex demand for quality

Abstract

This article highlights the importance for urban planning, of the under-researched notion of superstar destinations. Furthermore, it presents and compares destination choice models that generate a convex demand for destination quality, and thereby explain and predict the existence of so-called superstar destinations. When compared to their competition, superstar destinations are much more popular than differences in quality between the superstar and other destinations would suggest at first sight. Although convexity of demand for quality is a known precondition for the existence of superstars, it remains unclear what mechanism might cause this imperfect substitution between different quality levels. The article proposes several choice models that generate a convexity of demand for quality, thereby paving the way for (modelling) the existence of superstar destinations. These models are compared using numerical simulations, which show that each of the proposed models has the potential to generate superstar effects, although for most models the effect decreases for larger choice sets. Results suggest that including reference-dependency into choice models helps overcome this potential limitation, as it leads to superstar effects for larger choice sets typically encountered in real life destination choice situations.