Tourists' Willingness to Pay for holiday trip characteristics: A Discrete Choice Experiment

This article studies the marginal rates of substitution and Willingness to Pay for holiday trip characteristics. Using a Discrete Choice Experiment, we examine how much individuals from four cities in Northern Spain are willing to pay for accommodation, mode of transport, travel time and length of stay. We estimate a Latent Class Model that accounts for taste heterogeneity based on sociodemographic characteristics. The welfare loss due to a tourism daily tax is also examined. Our results show that respondents place positive utility to travelling by plane, high-quality accommodation and longer stays. Specifically, they are willing to pay euro170 more for plane travelling with respect to the use of car, euro120 for staying at a four-star hotel relative to an apartment and euro760 for a 10-day trip relative to a 3-day one. A daily tax of euro1 per person would produce a larger welfare loss in coastal destinations.

Automated summary

This article investigates the marginal rates of substitution and Willingness to Pay for holiday trip characteristics. It uses a Discrete Choice Experiment to examine individuals' preferences and payment preferences for various aspects of a holiday trip. The results demonstrate that respondents value plane travel, high-quality accommodation, and longer stays. Additionally, the study explores the welfare loss caused by a tourism daily tax, finding that coastal destinations experience a greater loss.