Demand analysis in Irish tourism

Abstract

This paper attempts to test conventionally believed hypotheses on a body of relevant data. The study is primarily based on examining the nature of Irish export tourism demand from four of its main generating countries: Britain, the USA, France and Germany. The work of various authors is drawn upon in an attempt to give an overview of the use of economic theory in analysing tourism demand. The study centers on the use of regression analysis using time series data (1968-1992) to estimate the quantitative relationship between the level of visitor arrivals to Ireland and those variables expected to influence the former. The main tenets of the theory of demand has provided a basis for the regression model. While the relevance of the exogenous variables presented seems clear, in effect, they should be accompanied by some carefully organised quantitative evidence in order to present a more precise indication of which factors are likely to be operative for a particular origindestination visit data set. Much attention is focused on the actual construction of each of the variables for the regression models as this can obviously have significant implications for the interpretation of parameter estimates. Overall, the results suggest that price and income factors were among the most important explanatory variables determining tourism demand levels to Ireland. An analysis of the subsequent elasticity values has important significance particularly, in light of past and present tourism policy initiatives.