Segmenting Luxury Tourists Using Income and Expenditure: A Typology and Determinants from International Visitor Data

Abstract

Understanding luxury tourists required a more comprehensive approach than traditional expenditure-based segmentation, which often overlooked travelers’ financial capacity. This study therefore aimed to develop and validate a new typology of luxury tourists by jointly analyzing income and expenditure patterns using the International Visitor Survey of South Korea. The study addressed the need to capture both tourists’ economic capability and consumption behavior to enhance the precision of market segmentation and support sustainable destination management. Using the Jenks natural breaks classification and logistic regression, four distinct tourist types were identified: economy, spurious, scrooge, and premier, each reflecting unique combinations of income and expenditure. The results revealed that age, nationality, occupation, and trip purpose significantly influenced tourists’ classification. Younger and middle-aged professionals from East Asia were more likely to belong to high-income and high-expenditure groups, whereas Western tourists tended to spend more relative to their income. This income–expenditure typology advanced theoretical understanding of luxury tourism segmentation and provided practical insights for destination marketing organizations. The findings offered new insights for understanding how the alignment between tourists’ financial capacity and spending behavior can redefine strategies for sustainable and inclusive tourism development.