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Tourist Expenditure and Quality: Why Repeat Tourists Can Spend Less than First-Timers

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  • Joaquín Alegre
  • Magdalena Cladera

Abstract

In the tourism and marketing literature, repeat visitation/repeat purchasing is assumed to be desirable behaviour. However, consumer expenditure might decrease with purchase repetition. Thus, expenditure by repeat visitors could actually be lower than that of first-timers. This result can be explained using limited information models and consumers' perceptions of prices as a signal of product/service quality. This paper estimates the effect that quality as a motivation may have on tourist expenditure, distinguishing between first-time and repeat visitors. The hypothesis is that quality as a motivation has a higher positive effect on tourist expenditure for first-timers than it does for repeat visitors. It is more likely for new visitors to regard higher prices as a signal of higher quality than repeat visitors, given their greater uncertainty about the characteristics of the destination.

Suggested Citation

  • Joaquín Alegre & Magdalena Cladera, 2010. "Tourist Expenditure and Quality: Why Repeat Tourists Can Spend Less than First-Timers," Tourism Economics, , vol. 16(3), pages 517-533, September.
    • Handle: RePEc:sae:toueco:v:16:y:2010:i:3:p:517-533
    DOI: 10.5367/000000010792278419
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    References listed on IDEAS

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    1. Faruk Urak & Nihat Küçük & Abdulbaki Bilgiç & Steven T Yen, 2023. "Modeling censored tourism expenditures in Turkey with non-normal and heteroscedastic errors: An application of the inverse hyperbolic sine double-hurdle model," Tourism Economics, , vol. 29(3), pages 718-741, May.
    2. Alexandr Vetitnev & Nadezhda Bobina & Olga Zelenskaya, 2016. "Analysis of Tourists’ Expenditures at the 2014 Sochi Olympic Games," International Review of Management and Marketing, Econjournals, vol. 6(2), pages 227-232.
    3. Abbruzzo, Antonino & Brida, Juan Gabriel & Scuderi, Raffaele, 2014. "Determinants of individual tourist expenditure as a network: Empirical findings from Uruguay," Tourism Management, Elsevier, vol. 43(C), pages 36-45.
    4. Reza Mortazavi & Magdalena Lundberg, 2020. "Expenditure-based segmentation of tourists taking into account unobserved heterogeneity: The case of Venice," Tourism Economics, , vol. 26(3), pages 475-499, May.
    5. Antonio García-Sánchez & Ester Fernández-Rubio & M. Dolores Collado, 2013. "Daily Expenses of Foreign Tourists, Length of Stay and Activities: Evidence from Spain," Tourism Economics, , vol. 19(3), pages 613-630, June.
    6. Brida, Juan Gabriel & Scuderi, Raffaele, 2012. "Determinants of tourist expenditure: a review of microeconometric models," MPRA Paper 38468, University Library of Munich, Germany.
    7. Pierpaolo D’Urso & Marta Disegna & Riccardo Massari, 2020. "Satisfaction and Tourism Expenditure Behaviour," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(3), pages 1081-1106, June.
    8. Julio Vena-Oya & José-Alberto Castañeda-García & Miguel-à ngel Rodríguez-Molina, 2022. "Determinants of the Likelihood of Tourist Spending in Cultural Micro-Destinations: Type, Timing, and Distance of the Activity as Predictors," SAGE Open, , vol. 12(3), pages 21582440221, September.
    9. Chang, Kuo-Liang & Chen, Chiang-Ming & Meyer, Timothy J., 2013. "A comparison study of travel expenditure and consumption choices between first-time and repeat visitors," Tourism Management, Elsevier, vol. 35(C), pages 275-277.
    10. Robert Štefko & Jozef Džuka & Eva Litavcová & Darina Ňakatova & Martin Lačný, 2020. "Psychological Characteristics of a Tourist as Predictors of Expenditures: An Analytical Review and Proposal of the Predictive Model," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 14(3), September.
    11. Mayer Marius & Vogt Luisa, 2016. "Economic effects of tourism and its influencing factors: An overview focusing on the spending determinants of visitors," Zeitschrift für Tourismuswissenschaft, De Gruyter, vol. 8(2), pages 169-198, November.
    12. Engström, Truls & Kipperberg, Gorm, 2015. "Decomposing the heterogeneous discretionary spending of international visitors to Fjord Norway," Tourism Management, Elsevier, vol. 51(C), pages 131-141.
    13. Lee, Seul Ki & Sok (Frank) Jee, Won & Funk, Daniel C. & Jordan, Jeremy S., 2015. "Analysis of attendees' expenditure patterns to recurring annual events: Examining the joint effects of repeat attendance and travel distance," Tourism Management, Elsevier, vol. 46(C), pages 177-186.

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