Vacation behaviour under high travel cost conditions – A stated preference of revealed preference approach

• Vacationers exhibit substantial diminishing marginal disutility of travel costs.
• The impacts of a substantial increase in travel costs extend well beyond the transportation side of tourism demand.
• Proposes a generalization of the recently proposed SP-off-RP estimation procedure.
• The Generalized SP-off-RP estimation procedure significantly improves model fit.

This paper investigates vacation behaviour under high travel cost conditions. We estimate discrete portfolio vacation choice models on data obtained in a novel free format Stated Preference of Revealed Preference (SP-off-RP) choice experiment. The substantive contribution of this paper is that we develop new insights into vacation behaviour under high travel cost conditions. We find that vacationers exhibit considerable diminishing marginal disutility of vacation travel costs. Furthermore, we have identified significant interactions effects across the following vacation choice dimensions: destination, length of stay, accommodation type and mode of transport. Therefore, a substantial increase in travel costs is likely to have marked consequences for the tourism industry – reaching beyond the transportation side of tourism. Methodological contributions of this paper are twofold: 1) it proposes a choice experiment in which SP alternatives are constructed by pivoting of late consideration set alternatives, rather than only of a chosen alternative, and 2) it proposes, and illustrates the use of, a generalization of a recently proposed SP-off-RP estimation procedure.