Elsevier

Tourism Management

Volume 33, Issue 3, June 2012, Pages 603-610
Tourism Management

The determinants of Italian domestic tourism: A panel data analysis

https://doi.org/10.1016/j.tourman.2011.06.017Get rights and content

Abstract

In this study, a GMM panel data estimation is used to investigate the main determinants of Italian domestic tourism demand as measured by regional bilateral tourism flows. The analysis is developed both at aggregate level and for the two traditional macro-areas of the country, namely Centre-North and South. For the whole nation, the importance of traditional economic variables in determining domestic tourism flows is confirmed. However tourist actual choices appear also to be influenced by past experiences and by regional differences in the quality of the wider environment. Additionally it appears that, for Italian tourists, domestic and international destinations behave as substitutable goods. The sub-sample analysis highlights some interesting differences between macro-areas. In particular, southern tourists appear more responsive to income variations, and less sensitive to prices differentials than their northern counterparts. Moreover, the degree of competition between domestic and outbound trips is higher in the South. Finally, southern tourists seem to be more influenced by environmental attributes while northern tourists are more sensitive to cultural activities.

Highlights

► First contribution analyzing Italian interregional domestic tourism flows determinants. ► Spatial interaction model. ► Habit formation, relative prices and per capita GDP are the main determinants. ► Southern Tourists seem more concerned than northern ones about GDP and environmental quality. ► Domestic and international destinations act as substitutable goods.

Introduction

It is common knowledge that in many countries domestic tourism is dominant with respect to international flows in terms of both size and economic contribution. In spite of that, only recently researchers have started to concentrate on this phenomenon and its economic impact, as well as on its potential for reducing disparities in less developed world areas. It follows that studies on the determinants of tourist choices within national borders are still rare and mainly concentrate on the impact of economic variables. There are, however, some recent contributions that have started to stress the potential role of non-economic factors for the domestic demand of a specific destination area, in the steps of the international tourism literature. Such factors may concern both the quality of local endowment of natural and cultural resources, and the capability of a destination to manage and organize its resources according to competitive strategies.

This paper aims to give a contribution in this line of research. It builds on a regional data set and implements a system GMM dynamic panel data analysis (Arellano and Bover, 1995, Blundell and Bond, 1998) to estimate the main determinants of the Italian domestic tourism in the context of an extended gravity model (Cf., inter al., Khadaroo & Seetanah, 2008). At this scope a large panel of explanatory variables is considered. It includes traditional economic demand-driven variables, such as price, income, and qualitative supply-side factors that can be crucial in determining the comparative advantages of the exporting regions. In particular, the role of culture, environment, public safety and transport infrastructure is explicitly investigated. Another important determinant considered in this paper is the number of trips for overseas destinations aimed to test whether domestic and outbound tourism are characterized by a crowding out effect or can be considered as two independent phenomena. The analysis is firstly performed at aggregate level. Here, the dependent variable is expressed in terms of bilateral tourism flows across the twenty Italian regions, treated both as origin and destination. Then, in consideration of the well-known differences characterizing the Italian economy, the full sample is split into two sub-samples, focusing on the two traditional macro-areas of the country, namely Centre-North and South. The main scope of the disaggregated analysis is to capture differences in tourists’ preferences according to the area of origin. Thus, one sub-sample includes the arrivals from the Centre-North tourists to the twenty Italian regions and, conversely, the other sub-sample comprises the arrivals registered in all regions but originated only from southern regions residents.

With respect to the existing literature, the content of this paper could turn out to be very rich of powerful insights for both tourism management and planning. On the one hand, it gives attention to several items related to the region of destination in terms of supply factors. In this respect, empirical results can be useful for both public authorities and destination management organizations often involved in improving the competitive position of a specific destination. On the other hand, this paper has the advantage of developing a panel data analysis on domestic tourism in terms of interregional bilateral tourism flows. From a technical point of view, the gain of considering a disaggregated data set in terms of robustness of empirical results is well known. There are, however, many other good reasons to believe that such a disaggregated approach can be particularly useful for domestic tourism analysis. First of all, tourism can represent the engine for regional1 development and can be particularly relevant for regions that exhibit low economic growth and high unemployment rates. Secondly, a regional perspective may allow to evaluate how special idiosyncratic regional factors, such as natural endowment, cultural heritage and tourist infrastructure, may influence tourist choices within the same country. Thirdly, at regional level, factors that could bias national comparison, such as fiscal regimes and regulatory structure, do not matter. Finally, a regional approach helps to understand whether domestic tourism reproduces international tourism in a different scale or it is a different phenomenon indeed.

The paper is organized as follows. The following section focuses on recent trends characterizing Italian domestic tourism flows. Section 3 discusses the role of the main determinants of domestic tourism and summarizes the empirical literature for the Italian case. Section 4 presents our empirical model and research strategy. It also provides some descriptive statistics for the variables considered in the study. Then, Section 5 presents our results. Finally, Section 6 draws some conclusions.

Section snippets

Patterns and trends in Italian domestic tourism flows

In Italy, tourism represents one of the most important economic activities.2 Most of this activity is generated by the domestic demand which weights, on average, 57% and 58% for arrivals and nights respectively during the period 1998–2007 (Cf. Table 1). As a result, the economic contribution of the domestic component is dominant with respect to international flows in terms of both

The determinants of domestic tourism flows

There are relatively few investigations on domestic tourism and, therefore, the literature on domestic tourism determinants is quite scant and moves along the lines suggested by international tourism flows studies (Cf., Lim, 1997). According to this literature, the main factors determining tourists’ choices turn out to be both economic and non-economic. Despite being so important, in fact, economic demand-driven variables alone do not adequately explain tourism flows, since several supply-side

The empirical model and research strategy

The aim of this paper is to investigate the main determinants of the domestic tourism flows in Italy, giving particular emphasis to the role of supply-side variables as driving forces of tourists’ choice. In particular, the intent is to test whether destination attributes also matter for the case of the Italian domestic tourism, besides the variables typically used to explain international tourism flows. Furthermore, this study investigates if regional differences in terms of economic factors,

Estimation and results

In this section, the empirical results are presented and discussed at both full-sample and macro-area level. Being equation (1) a dynamic panel regression model with the lagged dependent variable among its regressors, the system GMM estimator has been considered as the appropriate econometric tool to conduct our empirical analysis (Arellano and Bover, 1995, Blundell and Bond, 1998). This estimation technique is particularly suitable to correct the dynamic endogeneity which may be caused by the

Conclusions

Italy is one of the top tourism destinations in the world with a fast growing tourism industry. The largest part of this industry, in terms of consumption, value added and employment, is due to domestic tourism activities. In spite of that, empirical literature on domestic tourism is quite scant and the attention of policy makers is not adequately focused on its determinants. Consequently, this paper investigated the determinants of interregional tourism flows in Italy. The study used a panel

Acknowledgments

Thanks are due to two anonymous referees for helpful comments and suggestions. Usual disclaimers apply. Financial support from Regione Autonoma della Sardegna (LR 7/08/2007, n. 7 under the project “Una rilettura del carattere dualistico dell’economia italiana alla luce dei nuovi schemi interpretativi emersi dal dibattito teorico ed empirico”) is gratefully acknowledged.

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