Abstract
This paper aims to advance the understanding of the micro-economic foundations of tourism demand theory, particularly through bringing out some of the implications of the tour characteristics approach to utility analysis, and also through explicitly linking the micro-economic theory of the individual tourist to the aggregate level demand models as actually estimated. Important implications of the tour characteristics theory are that it yields theoretical rationales for the importance of market segmentation of tourism demand, and for tourism product differentiation. Consideration of the aggregation issues in the particular context of tourism demand shows aggregation to be justified and feasible when the market is segmented. Market segmentation is shown to be theoretically important for good tourism demand models, supporting its generally observed practical usefulness. Alternatively, aggregation can be justified through a random utility argument that assumes independence of individuals' tour decisions.
Get full access to this article
View all access options for this article.