ABSTRACT
People’s tourism demand decisions can be affected by perceived shifts in their finances. This study investigates how perceptions of financial positions can affect people’s decisions to consume tourism, using US households as a study case. The literature has given a prominent role to income as a determinant of tourism demand. However, the effect of income on tourism demand may be mitigated by people’s views about their finances. The study contributes to the literature, among others, by considering the possibility of nonlinear effects in the connection between households’ net financial position and their tourism demand. The methodology includes time-series data decomposition, stationarity, cointegration, and an application of the Limited Information Maximum Likelihood regression method. The results show that financial conditions matter for tourism demand and that tourists are heterogenous consumers that do not automatically react to stimuli such as income. The findings may help regional policymakers manage their destinations more effectively.
Disclosure statement
No potential conflict of interest was reported by the author(s).