Demographic change, tourism expenditure and life cycle behaviour

• Life cycle theory is used to investigate the effect of demographic dynamics on tourism demand.
• Tourism consumption is analysed by means of hurdle models and cohort techniques.
• Older cohorts are inclined to travel but they have a low propensity to spend on tourism.
• Age has a negative effect on the desire to travel but a positive effect on tourism expenditure.
• Demographic aspects affect domestic and international tourism differently.

The paper explores how demographic changes in human populations may impact on tourism decision-making of households over their life cycle. By means of hurdle models, the study focuses respectively on the decision to travel domestically or abroad and investigates if statistically significant differences exist as to the impact of age and cohort on the decision to travel and tourism expenditure. Using a vast dataset on Italian Household Expenditures over the period 1997–2007 the empirical results show that demographic aspects do have a strong effect on the tourism behaviour of families and that cohort and age effects act differently on the decision of households to make a trip and on how much they spend on tourism. Age has a negative effect on the desire to travel but a positive effect on tourism expenditure. On the other hand, older cohorts are inclined to travel but they have a low propensity to spend on tourism. Relevant differences in income elasticity along the life cycle of households have also been found. Finally, age and cohort aspects have a different effect on the decision as to whether to travel nationally or internationally.