Estimating Congestion Costs and Segmenting Motivations for Recreational Festivals

Abstract

This paper aims to evaluate the willingness to pay (WTP) of visitors to reduce congestion and to segment the market of visitors by motivations. A double-bounded dichotomous choice contingent valuation method and survival analysis are adopted to estimate congestion costs for tourists. Analysis of variance is used to test the satisfaction and the WTP of tourists among the segmented motivation groups. Exploratory factor analysis method is conducted to extract four major factorial dimensions, and cluster analysis was performed to identify the characteristics of visitors' motivations into three clusters. The average amount that a tourist is willing to pay to mitigate congestion is US$2.22. The most important market segmentation is the “pursuit of multiple goals”, which has the largest segment of the market. Festival managers need to mitigate overcrowding and identify the segmentation information to develop effective strategies and to refine advertising campaigns to attract more people.

Keywords:

• leisure motivation
• contingent valuation method
• scope effect
• congestion cost