Inbound Tourism Modelling, Gothenburg Case

Abstract

Abstract This thesis research project focuses on the description of the determinants and the tourism demand function in the Gothenburg region as a destination, measured by guest night production and using the general to specific modeling approach from the top five markets: Sweden, Norway, UK, USA and Germany. Norway is used as a substitute destination with the aim to observe effects in the demand function of Gothenburg. Furthermore, through the demand function we derive the own-price, cross-price and income elasticities from these five origins markets. We work with an annualized times series data from 1982 to 2013. The main findings are related to the domestic and regional markets in Gothenburg. If the price in Gothenburg increases by 1%, the domestic demand decreases by 0.7%. If the price in the complementary destination Norway increases, the domestic demand in Gothenburg is low affected. Nevertheless, the Norwegian market decreases the overnight demand in Gothenburg by 0.35%, due to a 1% increase in Gothenburg´s prices.