Modelling Tourism Flows from Europe to Australia

Abstract

The period since 1980 has seen unprecedented interest in Australia by Europeans, particularly from the UK, Germany and Italy. The importance of these nations, as well as of Europe as a whole, in terms of providing tourists to Australia, is the focus of this paper. More specifically, our aim is to generate demand models which seek to explain what determines tourism flows to Australia from Europe. To this end we build models of tourism demand which take into consideration the factors influencing tourism suggested by the literature. Our aim is to model total tourism flows from all European countries, as well as from the three largest providers of European visitors to Australia. Furthermore, we break down ‘total visits' into those visits for ‘holiday reasons' and ‘visiting relatives’; this gives us 12 different models to consider. Our analysis leads us to conclude that, in the case of all visits, whereas there is little difference between the all-Europe model and the UK model, there are important differences between these two models and the Germany and Italy models. A different pattern of results emerges when models of ‘holiday visits' and ‘visiting relatives' are regression tested for the all-Europe and country-specific models. The all-Europe models are then used for forecasting purposes and achieve mixed success.