The key role of destination characteristics on tourism demand elasticities. A dynamic threshold model

Abstract

This paper analyses tourism demand elasticity to its main drivers. Unlike previous studies, it postulates that elasticities vary within a country or region. Since the latter typically comprise destinations with different historical, natural and cultural resources, which in turn attracts different segment of tourists, the paper hypotheses that demand elasticities depend on destination type. To test this hypothesis, it analysed tourism demand in Tuscany, a famous destination in Italy. We employed a dynamic panel threshold model, which allows for asymmetric effects of the regressors depending on destination type. The model was estimated using panel data disaggregated by the 10 provinces of Tuscany and the 11 main countries of tourist origin. They confirm that demand elasticities vary by destination type and provide insights for implementing destination-specific policies.