Domestic tourism demand in China’s urban centres: Empirical analyses and marketing implications

Abstract

China’s domestic tourism market makes up more than 90 per cent of the country’s tourist traffic, and contributes more than 70 per cent of total tourism receipts. This study proposed a demand model that examined the relationship between the annual expenditure of urban domestic travellers and per capita GDP. It was found that the demand theory developed in market economies was applicaable in a transit economy like China. Income elasticity of domestic tourism in China’s urban areas was determined to be 0.30. The model also recognised the positive effect of the country’s special economic zones on the domestic demand. Underlying reasons for the study’s findings are discussed. The model can be used to forecast domestic demand from Chinese urban centres. Implications of the study include the suggestion that the demand measurement of expenditure is more appropriate than person trips in the Chinese context and from the perspective of destination marketing.