Domestic Tourism Destination Choices- A

Choice Modelling Analysis

Assignment 3Group 3

Hari Hara Sharan Nagalur Subraveti

Kasun Dilhara Wimalasena

Kento Usui

Muhammad Abdullah

Twan Huybers - School of Business, The University of New South Wales

Introduction

This paper is about the Destination Choices in Domestic Tourism and the determinants of these destination choices.

Discreet Choice Modelling is applied to investigate various factors concerning the destination choice.

Results obtained from the Nested Logit Model was used to understand the importance of the various destination and trip attributes as well as respondent characteristics.

These results were used to simulate the effects on destinations’ market shares resulting from changes in the attributes

Stated Preference (SP) surveys was chosen in this paper over Revealed Preference(RP) survey because: experimental design used in SP survey determines

variability;

non-collinearity of choice determinants;

to avoid the potential for selection bias associated with destination choice surveys.

Survey Design and Data

Exploratory analyses of destination choices were carried out through series of focus groups in Melbourne

Focus group discussions yielded a set of destinations

trip attributes Selected Destinations

Attributes &

Levels

(various socio-demographics and attitudinal characteristic of respondents also asked in the questionnaire)

Potential respondents were approached at three geographically dispersed shopping malls across Melbourne in August 2002.

The screening criteria They were recruited if : they were contemplating a short break holiday within

the next 3 months;

they were major decision maker within their travel party.

Methodology Used

To avoid the restriction of IID assumption, nested logit model was used instead of multinomial logit model.

Estimation Results

The utility function for each destination consisted of alternative specific constants (ASC) , destination attributes and respondents’ socio-economic and attitudinal characteristics.

A choice model with choice frequencies as dependent variables and ASCs as independent variables was estimated.

The log likelihood ratio test, t-test, goodness of fit indices show that the overall fit of the model used appeared good.

The effects of most attribute levels are statistically significantly different between destinations. (e.g. home base, own vehicle etc.)

Some attribute levels apply to each destination equally. (e.g. Age, Income etc.)

Various characteristics like season, mode, socio-demographic characteristics and its effects on the significance of the utilities of the destination choices were studied.

Market Share Simulation

Base Case

Estimation Results of Market Share

Problem Similarities

Aim of the research paper and our project is basically the same i.e. the factors impacting the destination choices of tourists.

Discrete Choice Modelling was used to analyze the destination choices.

The investigation of destination choices is based on the analysis of the stated choice of the respondents.

The fractional factorial design was used to construct different choice sets for the survey.

Implications to Own Research

The results from the paper reflects that the respondent characteristics such as age and gender also significantly impact the destination choice. Hence, this can be considered in formulating utility functions for each restaurant.

The simulation results illustrate how the choice modelling tools can be used by the analyst for policy recommendations. The same can be considered to improve the condition of the restaurants.

Thank You