Research note: Modelling tourism demand - An econometric analysis of North American tourist expenditure in Ireland, 1985-2004

Abstract

The monetary contribution of inbound North American tourism to the Irish exchequer is economically substantial, generating more tourist revenue earnings per capita in Ireland than visitors from any other country. The purpose of this paper is to present a macroeconometric analysis of North American tourist expenditure in Ireland, thus providing an insight into the effects on expenditure patterns of the adjustment of key macroeconomic variables. Using an econometric causal model, key macroeconomic and demographic variables are regressed on real expenditure of the North American, US and Canadian regions. Among the main findings, it is revealed that the real exchange rate variable and the over-45 age cohort exert a positive and statistically significant result in the case of all three regions. The paper acknowledges that appropriate strategies are required to maximize the potential of those subsectors providing the greatest 'value for entry' from an Irish tourism perspective to enable the future proliferation of inbound revenues for the tourism industry.