First-time, first-repeat and multiple-repeat visitors: a conditional counterfactual quantile expenditure decomposition analysis

Abstract

We adapt a conditional counterfactual quantile decomposition structure to identify the contributions of relative consumption behaviours and potential market imperfections to observed expenditure differentials between first-time, first-repeat and multiple-repeat visitors to an emerging destination. This letter advances the discussion on the expenditure consequences of visitation frequency, with a parametric assessment of the contribution of market imperfections, such as visitors’ limited information and firms’ market power. Applicable to virtually any a priori segmentation, this approach offers a tool for the assessment of existing segmentation strategies, in pursuit of a more efficient resource allocation in the tourism industry, especially during high seasons.