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Role of tourism price in attracting international tourists: The case of Japanese inbound tourism from South Korea

a Apparel, Events and Hospitality Management, Iowa State University, Ames, IA, USA

Choong-Ki Lee

b Department of Tourism, Kyung Hee University, 1 Hoegi-dong, Dongdaemun-gu, Seoul 130-70, South Korea

Tourism price has been extensively used to predict tourism demand. However, there is no agreement on the proper indicators of its components. Use of different price indicators may be the reason for researchers’ apparently inconsistent results. The purpose of this study was to identify proper price indicators for the demand model of Japanese inbound tourism from South Korea. After comparing six models, each with different price indicators, the model with relative price and exchange rate but without transport cost was identified as the best model in which relative price, exchange rate, and per capita income were found to be significant.

• The effect of tourism price variables on inbound tourism demand is examined.
• Exchange rates and relative prices separately lead to increase in tourist arrivals.
• Both proxy variables for transport cost appear to have no influence on tourism.
• Price competitiveness can contribute to stimulating international tourism demand.
• Government policy should be developed considering its impact on tourism prices.

1. Introduction

International tourism has experienced sustained expansion over the past six decades, substantially contributing to the world economy. International tourist arrivals reached the unprecedented milestone of 1 billion in 2013 and generated US$476 billion in expenditures ( World Tourism Organization, 2014 ). Accordingly, many researchers have conducted studies on international tourism flows and their major determinants ( Carey, 1991 , Chatziantoniou et al., 2013 , De Vita and Kyaw, 2013 , Garín-Muñoz, 2006 , Law et al., 2004 , Lee, 1996 , Wang, 2009 ).

Tourism demand forecasting is important for effective use of limited resources in both private and public sectors ( Lee et al., 1996 , Song and Witt, 2006 ). Since many tourism products such as airline seats and hotel rooms are perishable, efficient planning based on accurate estimation of demand is critical for successful tourism businesses. An inability to meet demand often leads to business failure in the tourism industry ( Song & Witt, 2006 ). For the public sector, tourism forecasting provides a basis for planning investments in tourism infrastructure such as airports and highways ( Lee, Song, & Mjelde, 2008 ). Since such large-scale infrastructure projects require considerable public funds over the long term, the expected return on investment (ROI) should be spelled out in the planning stages, and ROI is in large part determined by forecasting tourism demand. Accordingly, accurate demand estimation is essential when appraising investment plans’ economic feasibility ( Song & Witt, 2006 ).

Recognizing the importance of tourism demand forecasting, the econometric approach has been widely adopted to predict tourism demand ( Song & Li, 2008 ). In econometric studies of tourism demand, per capita income, tourism price, promotional efforts, and external shocks have been identified as important determinants of tourism demand ( Li et al., 2005 , Lim, 1999 , Song and Li, 2008 ). However, results regarding the effects of price variables (e.g.relative prices, exchange rates, transport cost) on international tourism demand vary widely. Some inconsistent results may be attributable to use of different variables as a proxy for the same tourism price factor. This inconsistent use of price variables suggests that more research needs to be done to identify the price variables that best represent international tourism price.

Given that previous empirical studies yielding the inconclusive results on price effect have been conducted in the context of different countries, proper price variables may be different from destination to destination. Indeed, tourists’ responses to changes in explanatory variables are country-specific and therefore the variables’ elasticity varies by destinations ( Crouch, 1995 , Dwyer et al., 2000 , Gil-Pareja et al., 2007 ). Moreover, recent changes in economic circumstances such as currency depreciation resulting from unconventional monetary policy (US, Eurozone, Japan), shifts in exchange rate policy (Switzerland, Singapore, China), and drastic drops in oil prices triggered by expanded supplies of shale gas may substantially influence the cost of travel to the countries changing international tourism demand. Thus, choosing the proper price variables for the tourist destinations examined could be critical to the accurate estimation of tourism demand for those destinations.

The aim of this study is to address the selection of proper tourism price variables in identifying underlying factors in tourism demand model. Specifically, this study estimates and compares several demand models of Japanese inbound tourism from South Korea (hereafter Korea), each of which includes different price variables. Japanese inbound tourism from Korea was chosen for the following reasons: (1) Korea is the largest tourism market for Japan; and (2) price variables have a clear effect on tourism demand, as shown by the fact that the Japanese yen (JPY) has depreciated against the Korean won (KRW) from the fourth quarter of 2011 to the third quarter of 2014. The findings of this study contribute to a better understanding of price variables when forecasting international tourism demand for a specific country. In addition, because the Japanese government intends to increase its annual tourist arrivals to 20 million by 2020 when Japan hosts the Tokyo Olympics ( Ong, 2014 ), identifying determinants of tourism demand for Japan is of great importance for both policymakers and tourism practitioners.

2. Literature review

Tourism demand studies fall into two categories: qualitative and quantitative ( Peng, Song, & Witt, 2012 ). Quantitative demand studies are dominant in the tourism demand literature ( Song & Turner, 2006 ) and two forecasting approaches are the most commonly used: time-series and econometric ( Song & Li, 2008 ). The time-series approach is useful in that estimation procedures are relatively simple and only one data series is needed for estimation ( Peng et al., 2012 ). In this approach, demand forecasting is performed by analyzing the patterns of past demand movements and then, from that, predicting future movements ( Song & Li, 2008 ). On the other hand, the econometric approach predicts tourism demand based on the causal relationship between dependent (e.g. tourists) and explanatory (e.g. income) variables with sound theoretical basis ( Peng et al., 2012 ). The empirical usefulness of this approach lies in identifying which factors contribute most to tourism demand ( Lee et al., 1996 , Song et al., 2009 ).

2.1. Price factors affecting international tourism demand

In econometric tourism demand studies, several economic factors have been found to be significant determinants of international tourism demand ( Prideaux, 2005 ). Based on classic economic demand theory (i.e. the higher the prices of goods and services, the lower the demand for those products), tourism price has been commonly used in demand models as a primary determinant ( Hui and Yuen, 1998 , Uzama, 2009 ). According to Crouch (1994) , Witt and Witt (1995) , and Webber (2001) , tourism price consists of living cost plus transport cost. Living cost, in turn, has two components: prices of tourism goods and services in the destination country and exchange rates.

In general, prices of tourism goods and services have a negative relationship with tourism demand. The relationship may be sensitive to changes in domestic tourism prices in the origin country and therefore many demand models include prices of destination tourism products relative to the origin country in order to consider the cross-price effect ( Loeb, 1982 , Tan et al., 2002 ). Because price information of tourism goods and services is generally unavailable, consumer price index (CPI) has commonly been used as a proxy for relative prices ( Akis, 1998 , Lee, 1996 , Morley, 1994 ; Muchpondwa & Pumhidzai, 2011 ). Furthermore, actual prices of a destination's tourism products have not been found to be clearly superior to CPI in accounting for tourism demand ( Martin & Witt, 1988 ). Although CPI is most commonly used for relative prices ( Akis, 1998 ), Gil-Pareja et al. (2007) included purchasing power parity in their demand model instead of CPI and Garín-Muñoz (2006) developed her own tourism price index.

Many studies have proved that tourism demand is significantly responsive to changes in relative prices ( Eilat & Einav, 2004 ; Hiemstra & Wong, 2002 ; Patsouratis, Frangouli, & Anastasopoulos, 2005 ; Qu & Lam, 1997 ; Webber, 2001 ). For example, Webber (2001) identified the determinants of tourism demand for Australia in eight tourism markets using Engle and Granger's procedure and Johansen's procedure. The results showed that relative prices had a significantly negative effect on tourist arrivals from six of the eight countries, all but Malaysia and the U.K. Hiemstra and Wong (2002) investigated the outbound tourism from seven major countries to Hong Kong between 1990 and 1998. In the study, autoregressive estimation was employed for seven tourism demand models and relative prices were included only in the demand model for Australia–Hong Kong. The results of the study provided clear evidence of a significant effect of relative prices on tourist arrivals from Australia to Hong Kong. On the other hand, Muchpondwa and Pimhidzai (2011) found no link between relative prices and tourism demand. Lee et al. (1996) showed that the significant effects of relative prices on international tourism demand varied depending on the origin country to country indicating mixed results.

Exchange rates, the other indicator of living cost, have also been frequently examined in tourism demand studies (e.g., De Vita & Kyaw, 2013 ; Di Matteo & Di Matteo, 1996 ; Dritsakis & Gialetaki, 2004 ; Edward, 1995 ; Wang, 2009 ; Yap, 2011 ). When the currency of a country devalues, its tourism becomes more price competitive and therefore travel demand for the country is likely to increase ( De Vita & Kyaw, 2013 ). Conversely, as the value of a country's currency rises, the decreased price competitiveness of its tourism results in a reduction in inbound tourism ( De Vita, 2014 ). However, this view has not always been borne out in international tourism markets. Some researchers (e.g. Di Matteo & Di Matteo, 1996 ; Eilat & Einav, 2004 ; Hiemstra & Wong, 2002 ; Roselló-Villalonga, Aguiló-Pérez, & Riera, 2005 ; Wang, 2009 ) have found evidence that exchange rates have a significant effect on tourism demand, while others (e.g. Hui & Yuen, 1998 ; Muchapondwa & Pimhidzai, 2011 ; Webber, 2001 ) failed to find such evidence. In addition, Lee (1996) developed several demand models for inbound tourism to Korea and the results of exchange rate were inconsistent. These results indicate that the effects of exchange rates are asymmetric across countries and even across different markets in a single country.

It has generally been held that relative prices and exchange rates should be considered in tourism demand models, but it remains controversial whether these two components of living cost should be examined separately or combined as effective relative prices ( Durbarry and Sinclair, 2003 , Gray, 1966 , Tan et al., 2002 ). According to Song and Witt (2000) , price changes in a destination country can be calibrated by movements in exchange rate. Therefore, the destination price level that potential foreign tourists pay attention to is relative prices adjusted by exchange rates. Based on this argument, many researchers (e.g. Chang, Khamkaew, & McAleer, 2010 ; Divisekera, 2003 ; Garín-Muñoz, 2006 ; Kliman, 1981 ) convert relative prices into the currency of an origin country in tourism demand equations. Numerous studies (e.g. De Vita, 2014 ; Divisekera, 2003 ; Durbarry & Sinclair, 2003 ; Hiemstra & Wong, 2002 ) have argued for the significance of effective relative prices. Tan et al. (2002) concluded that effective relative prices were a better measure of living costs for Malaysian and Indonesian tourism. In contrast, Eilat and Einav (2004) and O’Hagan and Harrison (1984) argue that relative prices and exchange rates should enter separately into tourism demand models because it is highly likely that tourists will have more up-to-date information on exchange rates than on relative prices. Accordingly, they are more likely to use exchange rates to estimate cost of travel to the destination. Moreover, it has been noted that responsiveness of tourists to exchange rates is distinctive from their responsiveness to changes in relative prices ( Gray, 1966 , Lee, 1996 , Muchapondwa and Pimhidzai, 2011 ). With this in mind, many researchers (e.g. De Vita & Kyaw, 2013 ; Di Matteo & Di Matteo, 1996 ; Eilat & Einav, 2004 ; Edward, 1995 ; Wang, 2009 ) have included exchange rates as a separate variable in their tourism demand equations.

Transport cost is also a component of tourism price. As transport cost accounts for a large proportion of total travel cost, an increase in transport cost tends to negatively affect destination choice with a subsequent decline in tourism flows ( Covington et al., 1995 , Divisekera, 2003 ). Airfares, oil prices, or distance have been typically used as proxies for transport cost ( Durbarry and Sinclair, 2003 , Kulendran and Witt, 2001 , Song and Witt, 2000 ). Kulendran and Witt (2001) compared the forecasting performance of cointegration and least-squares regression models, indicating that transport cost represented by airfares significantly influenced outbound tourism flows from the U.K. Nelson, Dickey, and Smith (2011) conducted time-series and cross-section analyses to investigate tourism from the US mainland to Hawaii. Airfare was found to be a significant determinant of tourism demand for Hawaii.

Since transport cost changes as a function of fuel costs and geographical distance, oil prices and distance between two countries have been added to demand models as a proxy for transport cost ( Hiemstra & Wong, 2002 ). For example, Wang (2009) employed the autoregressive distributed lag model to identify the determinants of Taiwan's inbound tourism, particularly focusing on the effect of disastrous events. The study reported that oil prices had a significantly negative effect on Taiwan tourism indicating that foreign tourists are less likely to visit Taiwan as transport cost rises. De Vita (2014) used a distance variable to approximate transport cost through a gravity-type tourism demand equation and found distance was significant on tourism demand for 27 countries. The popular use of gravity models in tourism demand studies has allowed extensive investigation of the explanatory power of distance. Such studies include Eryiğit, Kotil and Eryiğit (2010) , Park and Jang (2014) , and Uysal and Crompton (1984) . However, oil prices and distance may be inappropriate for representing transport costs since neither variable considers the other, but both are main elements of the fuel cost function. Airfares are also limited due to complex fare structures and lack of data availability ( Song and Witt, 2000 , Webber, 2001 ).

2.2. Japanese inbound tourism and its relation to Korea

As one contributor to the increasing trend in international tourism, Japanese inbound tourism has increased from 0.7 million arrivals in 1971 to 13.4 million arrivals in 2014 ( Japan National Tourist Organization, 2015 ). Despite occasional crisis events (e.g. the 9/11 terrorist attacks, the outbreak of severe acute respiratory syndrome (SARS), the meltdown of the Fukushima nuclear power plant), Japanese inbound tourism continues to grow. From 1971 to 2014, the annual growth rate was 7.2% on average and the figure has accelerated in recent three years averaging 29.3% along with considerable depreciation of the currency (50.3%). As a result, Japan has the sixth largest international tourism share among Asian countries ( World Tourism Organization, 2014 ).

Three East Asian countries – China, Korea, and Taiwan – accounted for approximately 60% of Japan's inbound tourism market in terms of number of tourist arrivals ( Japan National Tourist Organization, 2014 ). Among these countries, Korea has been the biggest market for Japan for the last two decades. Korean tourists to Japan has increased from 0.7 million in 1990 to 2.5 million in 2013 (see Fig. 1 ) and their share of the Japanese inbound tourism market was between 17.6% and 31.2% ( Japan National Tourist Organization, 2014 ). Despite the importance of Korea in the Japanese tourism industry, few studies have examined the determinants of the Korean demand for Japan tourism.

Korean tourist arrivals to Japan, 1990-2013.

There has been extensive exchange between Korea and Japan and in various areas such as economy, culture, politics, and diplomacy because of their geographic proximity. The major presence of Korea in Japanese tourism may be a result of the strong ties established in the various areas ( Lee, Song, & Bendle, 2010 ). Moreover, due to geographic proximity and the strong ties between the two countries, Koreans are likely to be aware of Japanese economic conditions and thus reasonably responsive to changes in Japanese tourism price. Accordingly, the impact of the different price variables of Japan tourism, whether positive or negative, can be readily captured in relation to Korea.

3. Methodology

3.1. model estimation.

This study developed tourism demand models from Korea to Japan between the first quarter of 2000 and the fourth quarter of 2014. The dependent variable ( RTOUR t ) was the number of Korean tourists divided by the total population of Korea. The use of population as a deflator was done to control for the increase in Korean tourists caused merely by population growth.

Based on classic demand theory in which demand is a function of product price and individual income, two economic variables influencing demand for international tourism were added to the models: per capita income and tourism price. As the most important determinant of international tourism, per capita income is a measure of individual spending power. An increase in individual income is likely to lead to greater spending power creating tourism demand. This variable was calculated as the gross domestic product (GDP) of Korea divided by its population and then converted into real per capita income ( RINCOME t ) by dividing per capita income by Korean CPI.

To investigate the price effect on Japanese inbound tourism from Korea, this study used relative prices, effective relative prices, exchange rates, oil prices, and jet-fuel prices. For the selection of adequate price variables, this study developed and compared six demand models with different price variables as follows:

The first model included relative prices and exchange rates separately to measure living cost in Japan. Relative price ( RPRC t ) was calculated as the ratio of Japanese CPI to Korea CPI and exchange rate ( EXC t ) was measured as the value of JPY per KRW. The second model added oil prices as a proxy for transport cost. Real oil price ( ROIL t ) was computed by dividing crude oil prices per gallon by Korean CPI. The third model used jet-fuel prices as a proxy for transport cost instead of oil prices. Despite the importance of distance in transport cost functions, oil price variable does not reflect the distance between two countries. In addition, crude oil may have different price movement from the jet fuel actually used by aircraft. Thus, this study developed a variable of jet-fuel prices as new proxy for transport cost, since it takes into account both distance and actual fuel price. Real jet-fuel price ( RJET t ) was calculated as (jet-fuel prices per gallon×(distance/average fuel efficiency per seat))/Korean CPI.

In the fourth model, a combined variable, effective relative price ( RPRC t ), was used to represent living cost. Effective relative price ( E RPRC t ) was calculated by adjusting relative price ( RPRC t ) with exchange rate ( EXC t ). The fifth model added real oil price ( ROIL t ) to the explanatory variables used in the fourth model. In the sixth model, real jet-fuel price ( RJET t ) replaced real oil price ( ROIL t ) used in the fifth model.

In addition to the economic variables, five binary dummy variables were included in our models to take into account the effect of special events. To account for the impacts of radiation risk in Fukushima and the visa-free entry (VFE) program, two dummy variables ( DM NUCLEAR , DM VFE ) were added. Since nuclear leakage is a continuing concern and the VFE program is still in place, these dummy variables were coded as one after their starting date (the first quarter of 2006 for VFE and the first quarter of 2011 for Fukushima) and zero before that. Three other events that might affect outbound tourism from Korea – the 2002 Korea–Japan World Cup in the second quarter of 2002, SARS from the fourth quarter of 2002 through the second quarter of 2003, and the global financial crisis from the third quarter of 2008 through the fourth quarter of 2009 – were investigated through the inclusion of three dummy variables ( DM WCUP , DM SARS , and DM ECRISIS ). Finally, seasonal dummy variables ( DM SEA , i ) were added to control for seasonal effects. The base group was the fourth quarter. The expected signs for the variables were: REXC t , RINCOME t , DM VFE , DM SEASON >0 and RPRC t , ERPRC t , ROIL t , RJET t , DM WCUP , DM SARS , DM FCRISIS , DM NUCLEAR <0.

As in most previous tourism demand studies, our models used a double log-linear function. The double log specification allows researchers to interpret the coefficients as elasticity. Preliminarily, serial correlation of the six models was assessed using the Durbin-Watson test and Breusch–Godfrey test. Because both of the tests found serial correlation in all models, this study employed Prais–Winsten estimation, one type of feasible generalized least squares (FGLS), to estimate the six demand models.

3.2. Data sources

The study period was from the first quarter of 2000 to the third quarter of 2014. Quarterly number of Korean tourist arrivals was obtained from the Japan National Tourist Organization (2015) . For computation of explanatory variables, economic indices were acquired from the databases of the Organization for Economic Co-operation and Development (2015) , the Japan Tourism Marketing (2015) , and the Statistics Korea (2015) . Quarterly jet-fuel prices were obtained from the database of the US Department of Transportation (2015) . Data on fuel efficiency per seat was acquired from the websites of two commercial aircraft manufacturers, Boeing and Airbus (see http://www.airbus.com and http://www.boeing.com ). The distance between Korea and Japan was derived from the dataset of Centre d’Etudes Prospectives et d’Informations Internationales (2015) used in previous demand studies (e.g. De Vita, 2014 ; Park & Jang, 2014 ).

Bilateral correlation of variables is shown in Table 1 . While Pearson correlation analysis was performed for continuous variables, the point-biserial correlation method was applied to the pairs of continuous and binary variables. Phi correlation was used when both variables had binary values. Point-biserial correlation and phi correlation are equivalent to Pearson correlation ( Revelle, 2008 , Gould and Rogers, 1992 ). The results showed that none of the explanatory variables were highly correlated indicating that the estimated models did not have multicollinearity problems which can reduce the overall data fit of a model and increase the variance of coefficients, decreasing the model's statistical power ( Hair, Black, Babin, & Anderson, 2010 ).

Correlation analysis.

Note. Pearson coefficients for continuous variables, point-biserial coefficients for pair of continuous and binary variables, phi coefficients for binary variables.

Table 2 summarizes the results of model estimation. The results showed that all six models explained more than 70% of the variance in Korean tourist arrivals to Japan. In terms of R 2 , (Model 1) , (Model 2) , (Model 3) which treated relative price ( RPRC t ) and exchange rate ( EXC t ) separately appeared to provide a better fit to the data than (Model 4) , (Model 5) , (Model 6) which used effective relative price ( ERPRC t ). (Model 1) , (Model 2) , (Model 3) were nested because Model 1 could be obtained from (Model 2) , (Model 3) . Model 4 and (Model 5) , (Model 6) were nested in the same way. Model 1 (or Model 4 ) was the restricted model for the full models of (Model 2) , (Model 3) (or (Model 5) , (Model 6) ). Based on these relationships, rigorous model selection analysis was performed.

Results of model estimation.

Note. RTOUR t is the dependent variable for all six models. * p <0.05; ** p <0.01.

Using a partial F-test, we checked whether the restricted models without a transport cost variable showed a significant difference in overall model fit to data compared to the full models. The partial F-test results revealed no significant differences in overall fit between all nested model pairs (see Table 3 ). This indicates that the removal of transport cost variables from the full models does not significantly change the explained variance in Japanese inbound tourism from Korea. In terms of model parsimony, Model 1 was better than (Model 2) , (Model 3) , and Model 4 was better than (Model 5) , (Model 6) .

Results of partial F -tests.

Note. Model 1 is the restricted model for the full models of Models 2 and 3, and Model 4 is for Models 5 and 6.

Since a partial F-test can be used only for nested models, this study employed Akaike Information Criterion (AIC) to compare nested and un-nested models together ( Burnham and Anderson, 2004 , Cavanaugh, 2012 ). The results of AIC presented in Table 4 showed that the models using relative price ( RPRC t ) and exchange rate ( EXC t ) had relatively lower AIC than the models with effective relative price ( ERPRC t ). Among the models using relative price ( RPRC t ) and exchange rate ( EXC t ), the AIC of Model 1 was the lowest, suggesting that Model 1 offers the best fit to the data, having the smallest information loss.

Results of AIC and BIC.

Since model selection analysis identified Model 1 as the best model, this study presents the coefficient estimation results from Model 1 . The living cost variables represented by relative price ( RPRC t ) and exchange rate ( EXC t ) accounted for a significant amount of the changes in Japanese inbound tourism from Korea. The coefficients show that a 1% decrease in relative price ( RPRC t ) results in a 2.3% increase in Japanese inbound tourism from Korea and that a 1% depreciation in JPY (or a 1% appreciation in KRW) leads to a 0.7% increase in Japanese inbound tourism from South Korea. Real per capita income ( RINCOME t ) also had a significant impact on international tourism demand to Japan from Korea: a 1% increase in Koreans’ individual income results in a 1.2% increase in tourism demand for Japan.

The coefficients of dummy variables for the special events had the expected signs except for the dummy for 2002 World Cup. However, only the dummies for the financial crisis ( DM FCRISIS ) and the Fukushima nuclear disaster ( DM NUCLEAR ) had a significant effect on Japanese inbound tourism from Korea. Seasonal dummy variables were also significant. Specifically, the dummies for the first and the third quarters were significantly positive, implying that Korean tourists visit Japan mainly in summer and winter.

5. Conclusions and implications

This study compared six tourism demand models, each with different price variables, to identify proper price variables affecting Japanese inbound tourism from Korea. Partial F-test based on the nested (or hierarchical) relationship of demand models and AIC analysis were used for model comparison. The results of this study showed that separate inclusion of relative prices and exchange rates was more effective in accounting for the changes in Japanese inbound tourism from Korea than a price variable combining these two price indicators. Model comparison results also showed that exclusion of a transport cost variable did not decrease the explanatory power of the models. This study has several theoretical, methodological, and practical implications.

In terms of theory, the results confirm the view that exchange rates should be treated separately in tourism demand models because exchange rates are often used for destination selection apart from relative prices ( Muchapondwa and Pimhidzai, 2011 , O’Hagan and Harrison, 1984 , Witt and Witt, 1990 ). Some researchers ( Gray, 1966 , Lee, 1996 ) argue that the price level actually recognized in origin countries is highly dependent on exchange rates and therefore foreign tourists’ responses to changes in exchange rates are very different from their responses to relative prices. This view is supported by the argument that when potential tourists cannot obtain updated information on tourism prices, they tend to use the exchange rates, which is readily available to the public ( Muchapondwa and Pimhidzai, 2011 , Webber, 2001 ). Considering this, it is notable that exchange rates are an important consideration in destination selection even though Koreans may be well aware of the prices of Japanese tourism products due to the two countries’ proximity and sustained active relationship. This suggests that it is not easy, even between closely associated countries, for foreign consumers to gain knowledge of destination prices or accurately update their existing price knowledge over time. Either case may lead them to use the current exchange rates in their travel decisions. Thus, this study's significant contribution is to extend existing tourism demand literature by empirically identifying two price variables used for tourism destination choice in the Korea-to-Japan context.

In the identified model, per capita income was significant on Japanese tourism demand from Korea. This result is consistent with previous studies (e.g. Garín-Muñoz, 2006 ; Lee, 1996 ; Webber, 2001 ) which found this variable to be an important determinant of tourism demand. Two separate price variables were also significant determinants. The significant results for relative prices, exchange rates, and per capita income support the application of the classic demand theory to Japanese inbound tourism. The results also indicate that the demand for Japan tourism by Koreans can be effectively estimated without considering transport cost. This implies that changes in transport cost do not affect Japanese inbound tourism from Korea. Two different measures of transport cost, oil price and jet-fuel price, were indeed found to be unrelated to changes in Japanese inbound tourism from Korea in the full models. The results suggest that tourists planning short-haul international travel are less likely to take into account the cost of transport to their destination. As a result, caution should be exercised in including transport cost in modeling the demand for short-haul international travel.

In addition to the theoretical implications previously discussed, this study has important methodological implications. In an attempt to identify proper price variables, this study demonstrated model comparison methods for nested models (partial F-test and AIC) and for un-nested models (AIC) ( Bowerman and O’Connell, 1990 , Burnham and Anderson, 2004 ). By developing new measures of transport cost which consider actual aircraft fuel prices and the distance between two countries, this study tried to address the limitations of using oil price and distance as a sole proxy for transport cost.

Practical implications are also evident from the results of this study. This study found evidence for the significance of per capita income. In other words, outbound tourism from Korea to Japan is sensitive to movements in the Korean economy. This suggests that economic growth in Korea generates a significant increase in the Korean demand for tourism to Japan. Although destination countries have limited ability to influence per capita income of inbound tourists, since it is mainly affected by economic conditions in origin countries, destination countries can still take advantage of this characteristic. For example, when Japanese inbound tourism from Korea shrinks due to a local or global recession, Japan's tourism industry could counter this loss by reallocating their promotional resources to tourism markets experiencing an economic boom or less economy-sensitive markets. To implement this strategy, Japan would need to monitor economic conditions in Korea and its other major tourism markets such as China, Taiwan, and the US.

As discussed earlier, relative prices and exchange rates had a significant effect on Japanese inbound tourism demand from Korea. Combined with the results for other explanatory variables in the most appropriate model, this shows that relative prices contribute the most to Japan's inbound tourism in terms of elasticity and indicates that prices of tourism products are the most important factor in the choice of destination by tourists. Given that prices of tourism products are manageable by destination country or tourism industry to a certain extent, and the importance of price in attracting international tourists to Japan, a solid pricing strategy is critical for the Japanese tourism industry to maintain destination competitiveness. Some researchers (e.g. Bowen, 1998 ; Griffin, Shea & Weaver, 1997 ; Papadopoulos, 1989 ) have emphasized the importance of the price competitiveness of Japanese tourism products with those of neighboring countries such as China and Korea, which provide relatively cheap tourism products. For price competitiveness, the relentless efforts of the private sector, including cost reduction, new technology adoption, and research and development, should be made on a continuous basis ( Blake et al., 2006 , Dwyer and Kim, 2003 ). In the same vein, government is of great importance in providing sustainable price-competitive tourism products. The recent jump in tourist arrivals to Japan, for example, was triggered by a sharp decline in the value of JPY resulting from Japanese prime minister Shinzo Abe's economic policy known as 'Abenomics' ( Ong, 2014 ). This indicates that government economic policy is likely to influence tourism demand by altering economic conditions, which are responsible for the prices of tourism products ( Edward, 1995 , Eilat and Einav, 2004 ). Furthermore, governments could offer tax credits for international tourists’ expenditures ( Dimanche, 2003 ) and tax incentives to tourism firms which undertake extensive overseas marketing campaigns, hold international meetings, and renovate or replace their facilities ( Blake and Sinclair, 2003 , McKehee and Kim, 2004 ). Great care must therefore be taken in formulating tourism and economic policies in order to promote international tourism through price competitiveness and stability.

As with many other tourism demand studies, this study is not without limitations. First, the relatively small subject pair and sample observations may limit the generalizability of the results. Second, although none of the explanatory variables could be excluded due to multicollinearity, the variables may not be totally free from the multicollinearity problem given that significant correlations exist between the variables. One way to overcome the first limitation would be to use panel data. Examining the relationship between different price variables and tourism arrivals in the context of multiple tourism markets would improve the generalizability of the variable selection results. For the second limitation, it would be worthwhile employing dynamic factor analysis, a time-series extension of factor analysis proposed by Geweke (1977) . By applying factor analysis to multivariate time series data, dynamic factor analysis can address the correlation between explanatory variables and data stationarity ( Stock & Watson, 2011 ). Third, this study used primarily economic variables to explain Japanese inbound tourism from Korea. Over the course of their history, politically sensitive issues have arisen between Korean and Japan, such as the use of Korean ‘comfort women’ under Japanese colonial rule and the territorial dispute in the East Sea ( Lee et al., 2010 ). Korean public opinion (or sentiment) regarding these sensitive issues may affect Korean tourism to Japan. Future studies could consider this intangible aspect in modeling tourism demand between Korea and Japan. In addition, it would be interesting to test the effect of jet-fuel prices, our new proxy for transport cost, in different tourism destinations.

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Watch CBS News

Hotel prices soar as tourists flock to see solar eclipse

By Megan Cerullo

Edited By Anne Marie Lee

April 6, 2024 / 5:00 AM EDT / CBS News

Susan Hochman, who for seven years has been planning to travel to see the solar eclipse on April 8 , will be shelling out hundreds of dollars for a one-night stay at a modest hotel room in Saranac Lake, New York, which is in the path of the so-called totality .

She'll be spending $650 to spend one night at a Best Western hotel, where room rates are as low as $99 during less busy periods, according to hotel staff.

"I thought that was crazy," the New York City resident said. "I almost died at the $650 rate the Best Western quoted, but at least I can just stay there the one night that I need."

Hochman booked her accommodations in October of last year. Still, she wishes she had made reservations far earlier. "As much as I had given it forethought, I didn't plan as much in advance as I should have," she said. She called the inflated lodging prices "kooky crazy."

Initially, Hochman had planned to stay at the nearby Saranac Waterfront Lodge, a luxury resort on the lake, with friends. But at $700 a night, with a two-night minimum, the hotel was out of her budget.

The cost for a room with two queen beds and a view of the lake? $2,400. The room rate drops to $1,100 on April 8 on the day of the eclipse, according to the hotel, which added that guests started booking rooms there a year ago.

By contrast, the following night, April 9, the same room costs $131, while on April 15 room rates drop to $111.

The Hampton Inn in Carbondale, Illinois, also situated in the solar eclipse's path , doesn't have any rooms available on either April 7 or 8.

"We've been sold out for months now," the hotel said. A revenue management team sets the hotel's rates, which a spokesperson said "are much higher than usual" for the April event.

$1 billion boost

Eclipse-related tourism could pump as much as $1 billion into local economies. All along the roughly 115-mile-wide stretch of land from Texas to Maine, from where the moon's full blocking of the sun will be momentarily visible, towns are expecting a spike in business as hordes of sky-gazing tourists spend on everything from lodging and dining to souvenirs .

Other types of accommodations, like homes on Airbnb, are also in high demand. There has been a 1,000% increase in searches for stays along the path of totality, according to the home-sharing platform.

Vacasa, another vacation rental management company, told CBS MoneyWatch that tourists appear most eager to watch the eclipse from the state of Texas, based on searches for homes on its site. Vermont is the second most popular destination, followed by Maine.

Average daily rates for homes in Burlington, Vermont, are $506. In Dallas, they're $375.

Airline ticket prices are up, too. The average flight price to Dallas-Fort Worth, landing on April 7, is $1,900, according to travel site Hopper.

For last-minute travelers eager to see the eclipse, Hopper lead economist Hayley Berg offered advice for saving money.

"Consider staying at hotels outside of the path of totality and driving into the path in the afternoon on Monday," she told CBS News. "That way you'll pay a lower rate but can still experience the eclipse."

Kayak, another travel platform, has launched a tool that lets people search for the lowest-cost hotel destinations on the eclipse's path of totality. According to Kayak, hotels are cheapest, on average, in Montreal, Canada, which is also a path city . The best rental car deals on average can also be found in Montreal.

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News Streaming to discuss her reporting.

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Change in the travel price index vs. consumer price index in the U.S. 2022-2023

The travel price index (TPI) published by the U.S. Travel Association includes data on the monthly changes in the consumer price index (CPI) of travel and tourism services in the United States, such as airline fares, lodging, and recreation. Throughout 2022, and particularly in the first half of the year, both the travel and consumer price indexes grew dramatically, with the TPI reporting a staggering 19.4 percent annual increase in May. Meanwhile, in December 2023, the TPI went up by 1.3 percent compared to the previous year, while the CPI experienced a 3.3 percent year-over-year rise.

Year-over-year percentage change in the travel price index vs. consumer price index in the United States from January 2022 to December 2023

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January 2024

United States

January 2022 to December 2023

non-seasonally adjusted figures

The travel price index refers to the following industries: transportation (airline fares, motor fuel, intracity transportation, intercity transportation); lodging (hotels/motels); recreation; food and beverage (alcohol away from home, food away from home). Data prior to December 2023 were previously published by the source. Figures for November 2023 were not available.

Statistics on " Impact of inflation on travel and tourism worldwide "

Change in the travel price index in the U.S. December 2023, by industry
Impact of high prices on travel plans in the U.S. 2023
Share of U.S. travelers changing their holiday plans due to inflation 2023, by income
Consumers who spent less on travel and dining out in the U.S. 2023, by income
Annual average HICP of travel and tourism services in the EU 2019-2023
HICP inflation rate for restaurants and cafés in the EU 2017-2024
Europeans' main concerns about trips within Europe 2023
European travelers most concerned with rising travel costs 2023, by country
Share of Europeans believing that inflation impacted the desire to travel 2023
Reasons to not travel long-haul to Europe worldwide 2023, by country
Annual average CPI inflation rate of travel and tourism services in the UK 2019-2023
Main barriers to taking overnight domestic trips among adults in the UK 2023
Share of Britons thinking that cost of living might impact holiday plans 2023, by age
Main issues for business travel according to travel suppliers worldwide 2024
Main issues for business travel according to travel managers worldwide 2024
Main issues for business travel worldwide 2024, by region

Other statistics that may interest you Impact of inflation on travel and tourism worldwide

Impact on travel in the United States

Premium Statistic Change in the travel price index vs. consumer price index in the U.S. 2022-2023
Premium Statistic Change in the travel price index in the U.S. December 2023, by industry
Premium Statistic Impact of high prices on travel plans in the U.S. 2023
Premium Statistic Share of U.S. travelers changing their holiday plans due to inflation 2023, by income
Premium Statistic Consumers who spent less on travel and dining out in the U.S. 2023, by income

Impact on travel in Europe

Basic Statistic Annual average HICP of travel and tourism services in the EU 2019-2023
Basic Statistic HICP inflation rate of travel and tourism services in the EU 2024
Basic Statistic HICP inflation rate for restaurants and cafés in the EU 2017-2024
Basic Statistic HICP inflation rate for hotels and similar accommodation in the EU 2017-2024
Premium Statistic Europeans' main concerns about trips within Europe 2023
Premium Statistic European travelers most concerned with rising travel costs 2023, by country
Premium Statistic Share of Europeans believing that inflation impacted the desire to travel 2023
Premium Statistic Reasons to not travel long-haul to Europe worldwide 2023, by country

Impact on travel in the United Kingdom

Premium Statistic Annual average CPI inflation rate of travel and tourism services in the UK 2019-2023
Premium Statistic CPI inflation rate of travel and tourism services in the UK 2023
Premium Statistic Main barriers to taking overnight domestic trips among adults in the UK 2023
Premium Statistic Share of Britons thinking that cost of living might impact holiday plans 2023, by age
Premium Statistic Britons' main responses to the impact of cost of living on vacations 2023

Impact on global business travel

Premium Statistic Main issues for business travel according to travel suppliers worldwide 2024
Premium Statistic Main issues for business travel according to travel managers worldwide 2024
Premium Statistic Main issues for business travel worldwide 2024, by region

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Elasticity, demand and supply, tourism

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Crouch, G. 1992 Effect of Income and Price on International Tourism. Annals of Tourism Research 19:643-664.

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Crouch, G. 1994 The Study of International Tourism: A Survey of Practice. Journal of Travel Research 32(4):41-55.

Li, G., H. Song, and S. Witt 2005 Recent Developments in Econometric Modeling and Forecasting. Journal of Travel Research 44:82-99.

Lim, C. 1999 A Meta-Analytic Review of International Tourism Demand. Journal of Travel Research 37:273-284.

Rosselló, J. 2012 Regression Analysis. In Handbook of Research Methods in Tourism, L. Dwyer, A. Gill and N. Seetaram, eds., pp.31-46. Cheltenman: Edward Elgar.

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Song, H., S. Witt, and G. Li 2009 The Advanced Econometrics of Tourism Demand. London: Routledge.

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Jaume Rosselló

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Jafar Jafari

School of Hotel and Tourism Management, The Hong Kong Polytechnic University, Hong Kong, Hong Kong SAR

Honggen Xiao

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Rosselló, J. (2015). Elasticity, demand and supply, tourism. In: Jafari, J., Xiao, H. (eds) Encyclopedia of Tourism. Springer, Cham. https://doi.org/10.1007/978-3-319-01669-6_67-1

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Japan hotel prices near 30-year high as weak yen lures record tourists

The average daily room rate of hotels in Japan for March marked the highest level since August 1997, as the country saw a record number of foreign visitors in March.

Hotel prices in Japan soared to a near three-decade high in March, as the cheap yen and the cherry blossom season attracted a record number of tourists to the country.

A record 3.1 million people visited Japan in March. The yen is hovering at a 34-year low against the dollar, making the country an attractive destination for inbound tourists. The tourism boom has been led by arrivals from South Korea, Taiwan and China in the midst of the cherry blossom season, which traditionally draws in visitors.

Contributing to the spike in hotel prices is a labor shortage in Japan, according to Harumi Taguchi, principal economist at S&P Global Market Intelligence.

"To be able to cover the high occupancy rates with the labor shortage, the hotel rates have to be increased,” she said. "The demand is high from inbound tourists, so it’s an environment where it’s easy to raise the prices.”

The weakening yen has also spurred spending by holidaymakers. Foreign visitors spent ¥1.75 trillion in the January to March period, an increase of 52% from 2019, according to data from the Japan Tourist Agency. Shoppers have been snapping up luxury goods at discounted prices as well.

"Should demand from foreign visitors continue to increase, hotel prices may just keep going up,” said Taguchi. "And with the weak yen, it’s still cheap for foreigners to pay that price.”

In a time of both misinformation and too much information, quality journalism is more crucial than ever. By subscribing, you can help us get the story right.

Space Tourism: Can A Civilian Go To Space?

2021 has been a busy year for private space tourism: overall, more than 15 civilians took a trip to space during this year. In this article, you will learn more about the space tourism industry, its history, and the companies that are most likely to make you a space tourist.

What is space tourism?

Brief history of space tourism, space tourism companies, orbital and suborbital space flights, how much does it cost for a person to go to space, is space tourism worth it, can i become a space tourist, why is space tourism bad for the environment.

Space tourism is human space travel for recreational or leisure purposes . It’s divided into different types, including orbital, suborbital, and lunar space tourism.

However, there are broader definitions for space tourism. According to the Space Tourism Guide , space tourism is a commercial activity related to space that includes going to space as a tourist, watching a rocket launch, going stargazing, or traveling to a space-focused destination.

The first space tourist was Dennis Tito, an American multimillionaire, who spent nearly eight days onboard the International Space Station in April 2001. This trip cost him $20 million and made Tito the first private citizen who purchased his space ticket. Over the next eight years, six more private citizens followed Tito to the International Space Station to become space tourists.

As space tourism became a real thing, dozens of companies entered this industry hoping to capitalize on renewed public interest in space, including Blue Origin in 2000 and Virgin Galactic in 2004. In the 2000s, space tourists were limited to launches aboard Russian Soyuz aircraft and only could go to the ISS. However, everything changed when the other players started to grow up on the market. There are now a variety of destinations and companies for travels to space.

There are now six major space companies that are arranging or planning to arrange touristic flights to space:

Virgin Galactic;
Blue Origin;
Axiom Space;
Space Perspective.

While the first two are focused on suborbital flights, Axiom and Boeing are working on orbital missions. SpaceX, in its turn, is prioritizing lunar tourism in the future. For now, Elon Musk’s company has allowed its Crew Dragon spacecraft to be chartered for orbital flights, as it happened with the Inspiration4 3-day mission . Space Perspective is developing a different balloon-based system to carry customers to the stratosphere and is planning to start its commercial flights in 2024.

Orbital and suborbital flights are very different. Taking an orbital flight means staying in orbit; in other words, going around the planet continually at a very high speed to not fall back to the Earth. Such a trip takes several days, even a week or more. A suborbital flight in its turn is more like a space hop — you blast off, make a huge arc, and eventually fall back to the Earth, never making it into orbit. A flight duration, in this case, ranges from 2 to 3 hours.

Here is an example: a spaceflight takes you to an altitude of 100 km above the Earth. To enter into orbit — make an orbital flight — you would have to gain a speed of about 28,000 km per hour (17,400 mph) or more. But to reach the given altitude and fall back to the Earth — make a suborbital flight — you would have to fly at only 6,000 km per hour (3,700 mph). This flight takes less energy, less fuel; therefore, it is less expensive.

Virgin Galactic: $250,000 for a 2-hour suborbital flight at an altitude of 80 km;
Blue Origin: approximately $300,000 for 12 minutes suborbital flight at an altitude of 100 km;
Axiom Space: $55 million for a 10-day orbital flight;
Space Perspective: $125,000 for a 6-hour flight to the edge of space (32 km above the Earth).

The price depends, but remember that suborbital space flights are always cheaper.

What exactly do you expect from a journey to space? Besides the awesome impressions, here is what you can experience during such a trip:

Weightlessness . Keep in mind that during a suborbital flight you’ll get only a couple of minutes in weightlessness, but it will be truly fascinating .
Space sickness . The symptoms include cold sweating, malaise, loss of appetite, nausea, fatigue, and vomiting. Even experienced astronauts are not immune from it!
G-force . 1G is the acceleration we feel due to the force of gravity; a usual g-force astronauts experience during a rocket launch is around 3gs. To understand how a g-force influences people , watch this video.

For now, the most significant barrier for space tourism is price. But air travel was also once expensive; a one-way ticket cost more than half the price of a new car . Most likely, the price for space travel will reduce overtime as well. For now, you need to be either quite wealthy or win in a competition, as did Sian Proctor, a member of Inspiration4 mission . But before spending thousands of dollars on space travel, here is one more fact you might want to consider.

Rocket launches are harmful to the environment in general. During the burning of rocket fuels, rocket engines release harmful gases and soot particles (also known as black carbon) into the upper atmosphere, resulting in ozone depletion. Think about this: in 2018 black-carbon-producing rockets emitted about the same amount of black carbon as the global aviation industry emits annually.

However, not all space companies use black carbon for fuel. Blue Origin’s New Shepard rocket has a liquid hydrogen-fuelled engine: hydrogen doesn’t emit carbon but simply turns into water vapor when burning.

The main reason why space tourism could be harmful to the environment is its potential popularity. With the rising amount of rocket launches the carbon footprint will only increase — Virgin Galactic alone aims to launch 400 of these flights annually. Meanwhile, the soot released by 1,000 space tourism flights could warm Antarctica by nearly 1°C !

Would you want to become a space tourist? Let us know your opinion on social media and share the article with your friends, if you enjoyed it! Also, the Best Mobile App Awards 2021 is going on right now, and we would very much appreciate it if you would vote for our Sky Tonight app . Simply tap "Vote for this app" in the upper part of the screen. No registration is required!

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Space is all yours—for a hefty price

Commercial spaceflight is now officially a thing. But is it a transcendent opportunity for the masses, or just another way for rich people to show off?

Adam Mann archive page

Private citizens have been buying their way into the heavens for decades. In the 1980s, McDonnell Douglas engineer Charles Walker became the first nongovernment individual to fly in space when his company bought him a seat on three NASA space shuttle missions. In 2001, American entrepreneur Dennis Tito dished out a reported $20 million to fly on a Russian Soyuz rocket to the International Space Station (ISS) and spend eight days floating in microgravity.

But beyond those few flights, nothing much happened.

At least not until last year. After decades of development and several serious accidents, three companies—SpaceX, Blue Origin, and Virgin Galactic—launched their first tourist flights in 2021. William Shatner rode a Blue Origin vehicle to the edge of space in October. Former NFL star and Good Morning America host Michael Strahan took a similar ride in December. Even NASA, which was once hostile to space tourism, has come around and released a pricing policy for private astronaut missions, offering to bring someone to orbit for around $55 million.

Okay, so it’s a new era—but what does it mean? Do these forays represent a future in which even the average person might book a celestial flight and bask in the splendor of Earth from above? Or is this just another way for the ultrawealthy to flash their cash while simultaneously ignoring and exacerbating our existential problems down on the ground? Nearly all those 2021 escapades were the result of efforts by three billionaires: Elon Musk, Jeff Bezos, and Richard Branson. Branson is a mere single-digit billionaire, whereas Bezos and Musk have wealth measured in the hundreds of billions.

“The greatly undue influence of wealth in this country—to me that’s at the heart of my issues with space tourism as it’s unfolding,” says Linda Billings, a communications researcher who consults for NASA and has written about the societal impacts of spaceflight for more than 30 years. “We are so far away from making this available to your so-called average person.”

Each spot on Virgin’s suborbital spaceplane, the cheapest way to space at the moment, will set somebody back $450,000. A single seat on Blue Origin’s initial suborbital launch sold at auction for $28 million, and the undisclosed price tag of SpaceX’s all-civilian Inspiration4 mission, which spent three days in orbit before splashing down off the coast of Florida, has been estimated at $50 million per passenger.

Not only are such flights ridiculously far out of financial reach for the average person, says Billings, but they aren’t achieving any real goals—far from ideal given our terrestrial problems of inequality, environmental collapse, and a global pandemic. “We’re not really learning anything,” she says. “There doesn’t seem to be a whole lot of thought or conscience in the people engaging in these space tourism missions.”

Laura Forczyk, owner of the space consulting firm Astralytical, thinks it’s misguided to focus strictly on the money aspect. “The narrative [last year] was billionaires in space, but it’s so much more than that,” says Forczyk, who wrote the book Becoming Off-Worldly , published in January, in which she interviewed both government and private astronauts about why they go to space.

Forczyk sees the flights as great opportunities to conduct scientific experiments. All three of the commercial tourist companies have carried research projects in the past, studying things like fluid dynamics, plant genetics, and the human body’s reaction to microgravity. And yes, the rich are the target audience, but the passengers on SpaceX’s Inspiration4 included artist and scientist Sian Proctor and data engineer Chris Sembroski, who won their tickets through contests, as well as St. Jude Children’s Research Hospital ambassador Hayley Arceneaux (the trip helped her raise $200 million in donations for the hospital). Blue Origin gave free trips to aviation pioneer Wally Funk, who as a woman had been barred from becoming an Apollo astronaut, and NASA astronaut Alan Shepard’s daughter Laura.

Forczyk also cites Iranian space tourist Anousheh Ansari, who flew to the ISS in 2006. “She talked about how she grew up in a war zone in Iran, and how [the flight] helped her see the world as interconnected,” Forczyk says.

Billings thinks the value of such testimonials is pretty low. “All these people are talking to the press about how wonderful the experience was,” she says. “But to listen to someone else tell you about how exciting it was to climb Mt. Everest doesn’t convey the actual experience.”

As with an Everest trek, there’s the risk of death to consider. Historically, spaceflight has had a fatality rate of just under 4%—roughly 266,000 times greater than for commercial airplanes. Virgin suffered two major disasters during testing, killing a total of four employees and injuring four more. “A high-profile accident will come; it’s inevitable,” says Forczyk. But even that, she predicts, won’t end space tourism. People continue to climb Everest, she notes, despite the danger.

Another question is how space tourism might affect the planet. A 90-minute jaunt on Virgin Galactic’s suborbital spaceplane is roughly as polluting as a 10-hour transatlantic flight. Other calculations suggest that a rocket launch can produce 50 to 75 tons of carbon dioxide per passenger, compared with just a few tons per passenger from a commercial airplane.

Experts warn that even Blue Origin’s New Shepard, which burns hydrogen and oxygen and emits water, could affect the climate since its combustion products are injected high into the stratosphere, where their ultimate impact has yet to be understood.

The Federal Aviation Administration oversees all spaceflight in the US and might strengthen safety and environmental regulations. The agency currently has a moratorium on new regulations until 2023, which was designed to give the nascent industry time to develop before legislators came in with too much red tape. But few lawmakers or citizens are clamoring for more regulation.

“There are a lot of other things for people to worry about than whether or not only billionaires get to fly in space,” says Marcia Smith, the founder and editor of the news website SpacePolicyOnline.com, which covers space programs around the world.

Nobody has yet fully articulated a compelling reason to spend enormous sums on private spaceflight. It may have incidental value for science and engineering, or offer a small number of people a sense of transcendence.

But at the moment, it seems we do it mainly because we think it’s cool.

Amplifying space’s potential with quantum

How to safely watch and photograph the total solar eclipse.

The solar eclipse this Monday, April 8, will be visible to millions. Here’s how to make the most of your experience.

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How scientists are using quantum squeezing to push the limits of their sensors

Fuzziness may rule the quantum realm, but it can be manipulated to our advantage.

Sophia Chen archive page

The race to fix space-weather forecasting before next big solar storm hits

Solar activity can knock satellites off track, raising the risk of collisions. Scientists are hoping improved atmospheric models will help.

Tereza Pultarova archive page

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This popular European city is the latest to increase its tourist tax to battle overtourism

Barcelona is the latest European city to increase its city-wide tourist tax, a slight increase of €0.50 (about $0.53) per night, as the city seeks to curb overtourism.

The new price of €3.25 (about $3.45) was implemented on April 1 as part of the Stays in Tourist Establishments Tax . The bylaw was introduced in 2021, when the tourist tax was €0.75 (around $0.80) per night, and gradually increased the tax each year through 2024. Now, if someone is staying in Barcelona for seven nights, the new total tax amount will be €22.75 (around $24).

“It was the objective sought: to contain the number of tourists and increase tourist income because our model is no longer mass tourism but quality tourism, which adds value to the city,” deputy mayor Jaume Collboni said in March, according to Euronews .

The tax is added to a tourist’s accommodations bill when they stay at official tourist establishments in the city. The money goes toward enhancing the city’s infrastructure, such as improving roads.

Other popular European destinations, such as Amsterdam and Venice, also recently increased tourist taxes for similar reasons.

Learn more: Best travel insurance

Are tourist taxes the future of travel? What to know about the increasing tourist fees worldwide.

“The new and increasing tourist fees across Europe allow cities to fund measures to attract more vacationers, support the local infrastructure and businesses, as well as preventing damages from overtourism,” Tiffany Mealiff, a travel insurance expert at Quotezone , said in a statement to USA TODAY.

However, Barcelona visitors have had to pay a regional tourist tax since 2012, according to Euronews . This tax amount depends on a traveler’s accommodation type, costing more if someone is staying at a luxury hotel than an Airbnb.

Barcelona continues to reign as Spain’s most popular tourist destination. In 2022, Barcelona welcomed 9.7 million tourists , just slightly below pre-pandemic levels in 2019, according to the Barcelona City Council. However, tourists were found to be staying in the city longer than in 2019.

In 2022, the city also sought to cap the number of people in a tour group and ban megaphones by tour guides in an effort to curb the disruptive effects of overtourism.

Travelers planning their European getaway should be mindful of the additional costs that “are often not obvious beforehand,” according to Mealiff, as they plan their trip budgets.

Kathleen Wong is a travel reporter for USA TODAY based in Hawaii. You can reach her at [email protected] .

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Amsterdam to halt hotel construction in bid to control tourism

Dutch authorities said they want to control a city that is overrun with tourism, in their eyes. The effort would also control annual hotel stays.

People celebrate King's Day in the center of Amsterdam

Dutch authorities say the popular city Amsterdam is overrun with tourism. They want to curb it by halting new hotel construction and reducing annual hotel stay numbers there.

New local council rules in Amsterdam would stop properties from raising the limits on numbers of beds and would only allow new hotels to be built if another property closes, Euronews reported .

Celebrations in the city like the recent one for King's Day can bring is big tourist numbers, but they can also bring in littering, increased pickpocketing, alcohol consumption in the streets and noise, Amsterdam's city council said .

Efforts to control tourism numbers are meant to make residents of the city more comfortable.

Nordic countries top happiest places on Earth, while US drops on list

Finland once again topped the list of happiest countries, while the U.S. had a significant drop.

City authorities have also decided to cut the number of riverboat cruises allowed to enter the capital, from about 2,300 that were docked there in 2023 to about 1,150 by 2028, Euronews reported.

Travel publications like Travel Pulse said certain seasons can bring in an overwhelming influx of visitors to the city, which is known for liberal drug policies and its Red-Light district .

In 2023 the World Economic Forum published a report looking at the problem of over-tourism around the globe. In it, leaders spoke about a spike in excessive tourism after the deep lull brought on by the COVID-19 pandemic.

In cities like Barcelona, an energy of anti-tourism sentiment has permeated among residents. The WEF described the surge of tourism as "rapid" and "unyielding."

Governments have been encouraged to be decisive and firm about how they develop policies to response to issues of high tourist demand, the WEF said in the report.

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Trump Media Stock Plunges 18%, Extending Recent Losses

Funds that bet on a fall were set to profit as the parent of Truth Social came under renewed pressure after it registered new shares for a potential sale.

By Matthew Goldstein and Joe Rennison

Shares of former President Donald J. Trump’s social media company plunged on Monday after the company filed to register the potential sale of tens of millions of additional shares.

Trump Media & Technology’s stock fell 18.3 percent, erasing hundreds of millions of dollars from the company’s market value — and putting a dent in Mr. Trump’s majority stake. Since a surge in its first days of trading as Trump Media, which lifted the value of the company to about $8 billion at one point last month, the company’s shares have dropped by around 60 percent.

Trump Media was expected to register the potential sale of new shares after the completion of its merger last month with Digital World Acquisition Corp., a cash-rich shell company known as a SPAC. Companies that merge with SPACs, or special purpose acquisition companies, typically file a registration statement a few weeks after the deal is completed for the sale of additional securities held by early investors.

In the filing, Trump Media — the parent company of Truth Social — registered more than 146 million shares of stock that could be sold, along with 21 million shares that were converted after the exercise of warrants, which enable an investor to buy shares at a preset price. When a SPAC goes public, it issues warrants to investors that can later be converted into shares.

Even though the company said the investors weren’t planning to sell those shares immediately, investors reacted to the notion that if a flood of new shares were to hit the market, they could depress the company’s stock price.

Also included in the filing were an additional 36 million shares given to Mr. Trump as part of an “earnout” bonus based on the company’s stock price. With those additional shares, Mr. Trump has about 115 million shares of Trump Media, or 65 percent of the company’s stock.

Some of the shares registered for sale included stock held by large hedge funds such as Anson Funds, Hudson Bay, Mangrove Partners and Washington Muse Investments, which had acquired discounted shares or warrants from Digital World before the merger with Trump Media. Others, like Millennium Partners and Pentwater Capital, had built up stakes in the company by buying warrants.

Trump Media will not receive any of the proceeds from shares sold by investors, but it could receive tens of millions in cash from the exercise of the warrants.

Trump Media said in a news release on Monday that the filing did not imply that the shareholders listed in the statement were planning to sell shares. The company also noted that the filing did not alter a six-month restriction Mr. Trump and other big shareholders from selling their shares before sometime in late September.

The registration statement must still be reviewed and approved by the Securities and Exchange Commission before any stockholders can sell shares.

Some investors had been betting that Trump Media’s stock price would collapse after the expected share registration was filed, seeking to profit from the move. Fund managers including Marshall Wace and Zazove Associates have been large holders of Trump Media’s warrants, according to regulatory filings. Those warrants have been trading at a much lower price than Trump Media’s shares, in part because they were yet to be registered and also because of the ferocious rally in the stock when it first began trading.

To profit from this difference, the funds shorted the stock, betting that it would fall once the warrants were registered, according to people with knowledge of the funds’ trades. Marshall Wace and Zazove declined to comment.

The trade helped drive a spate of demand from investors looking to bet on a decline in the company’s share price, making Trump Media one of the most shorted stocks in the United States. Even before the filing arrived, Trump Media shares had fallen more than 50 percent since their first day of trading after the merger, amid doubts about Truth Social’s ability to generate revenue and profit.

Last year, Trump Media lost $58 million on revenue of $4.1 million — all of it from advertising on Truth Social.

The warrants have also fallen sharply over the past couple of weeks, down roughly 50 percent since the start of the month.

Short-sellers bet that the price of a stock will fall by borrowing shares of a company and selling them into the market, hoping to buy them back later at a lower price, before returning the shares to the lender and pocketing the difference as profit.

Matthew Unterman of S3 Partners, a research firm, said a potential flood of new shares coming into the market would make it easier for short-sellers to bet against shares of Trump Media. At the moment, he said, Trump Media is one of the more costly stocks to short because the company doesn’t have a large supply of shares available to borrow.

Matthew Goldstein covers Wall Street and white-collar crime and housing issues. More about Matthew Goldstein

Joe Rennison writes about financial markets, a beat that ranges from chronicling the vagaries of the stock market to explaining the often-inscrutable trading decisions of Wall Street insiders. More about Joe Rennison

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COMMENTS

Impact of inflation on travel and tourism worldwide
The sharp rise in consumer prices has, directly and indirectly, also affected travel and tourism, causing a surge in travel-related costs and cutting back the purchasing power of tourists. While ...
Full article: Elasticity of tourism demand by income and price
For international tourism, when using CPI as a basis for developing tourism price data, the tourist price variable at the destination is usually built based on CPI of the country of origin (source market), CPI of the country of arrival and exchange rate between country of origin and arrival country (Cheng, Citation 2012; Dogru et al., Citation ...
The UN Tourism Data Dashboard
International Tourism and COVID-19. Export revenues from international tourism dropped 62% in 2020 and 59% in 2021, versus 2019 (real terms) and then rebounded in 2022, remaining 34% below pre-pandemic levels. The total loss in export revenues from tourism amounts to USD 2.6 trillion for that three-year period. Go to Dashboard.
Travel Price Index (2023-12-20)| U.S. Travel Association
Research: Developed by the U.S. Travel Association, the Travel Price Index (TPI) measures the one-month change in the cost of travel ("travel inflation") away from home in the United States on a seasonally adjusted basis and the 12-month change of the cost of travel away from home in the U.S. on a seasonally unadjusted basis. The TPI is released monthly and is directly comparable to the CPI.
Increase In Travel Is Causing Travel Prices To Rise
The April 2021 U.S. Travel Association Travel Price Index shows a 9.5% year-over-year increase. There's also a 30.1% increase in transportation costs for the same period, primarily because of ...
Global tourism industry
With more and more people traveling, the global tourism industry has boomed over the last decade. For more information, read our topic page on tourism worldwide! ... OPEC oil price annually 1960-2024
Economic Impact Research
WTTC's latest annual research shows: In 2023, the Travel & Tourism sector contributed 9.1% to the global GDP; an increase of 23.2% from 2022 and only 4.1% below the 2019 level. In 2023, there were 27 million new jobs, representing a 9.1% increase compared to 2022, and only 1.4% below the 2019 level.
Travel and Tourism
Travel and Tourism Satellite Account for 2017-2021 The travel and tourism industry—as measured by the real output of goods and services sold directly to visitors—increased 64.4 percent in 2021 after decreasing 50.7 ... Measures how much tourists spend and the prices they pay for lodging, airfare, souvenirs, and other travel-related items. ...
Tourism Demand: Emerging Theoretical and Empirical Issues
By incorporating critical drivers of tourism demand, Ulucak et al., 2020 find that a gravity model is a useful tool for modelling tourism demand and show that the exchange rate and globalization are impacting positively on tourism demand. Ulucak, Yücel and Ilkay find that political uncertainty, inflation, household debt and distance to Turkey ...
Tourism
Tourism has massively increased in recent decades. Aviation has opened up travel from domestic to international. Before the COVID-19 pandemic, the number of international visits had more than doubled since 2000. Tourism can be important for both the travelers and the people in the countries they visit. For visitors, traveling can increase their ...
Role of tourism price in attracting international tourists: The case of
In econometric studies of tourism demand, per capita income, tourism price, promotional efforts, and external shocks have been identified as important determinants of tourism demand (Li et al., 2005, Lim, 1999, Song and Li, 2008). However, results regarding the effects of price variables (e.g.relative prices, exchange rates, transport cost) on ...
How Countries Use Price Elasticity to Shape Tourism
In a similar effort to regulate tourism, Bhutan has taken a unique approach by implementing a "low-volume, high-yield" policy. Tourists visiting Bhutan are required to spend a minimum of $100 ...
Elasticity of tourism demand by income and price: evidence from
cross price on domestic tourism market demand. Association of Southeast Asian Nations (ASEAN) is a political, economic, cultural and social union of countries in Southeast Asia, established on 8 August 1967, originally composed of five countries
Hotel prices soar as tourists flock to see solar eclipse
Eclipse-related tourism could pump as much as $1 billion into local economies. ... The average flight price to Dallas-Fort Worth, landing on April 7, is $1,900, according to travel site Hopper. ...
Price sensitivities of the consumer in a tourist market
The primary purpose of this research was to determine the tourist's price sensitively and the impact on revenues for the small business owner. It was designed to determine demand based on three different price strategies, Every Day Low Price (EDLP), Sale pricing, and Premium pricing. As the tourist is on vacation and often in an unfamiliar ...
Travel price index change by month US 2023
The travel price index (TPI) measures changes in the consumer price index of travel and tourism in the U.S. In December 2023, the TPI rose compared to 2022.
Tourism Demand Elasticities by Income and Prices of International
This study aims to determine tourism demand elasticities by income and prices of regions, as well as total international markets. It is deployed to a total of 10 major source markets and two separate regions, from Asia and intercontinental to Vietnam. The results of data analysis for the period 1995-2019 and using a nonlinear panel ARDL approach show that tourism demand from major Asian ...
Elasticity, demand and supply, tourism
Price elasticity measures the percentage change in tourism demand caused by a percent change in price (y = tourism demand and x = price in expressions 1 and 2). Because this elasticity is almost always negative (it is expected that as price increases demand decreases and vice versa), it is usually expressed in terms of absolute value since the ...
Exchange rate elasticities of international tourism and the role of
In collaborating with Tripadvisor, Laframboise et al. (2014) use the company's hotel price data to construct a "Week at the Beach" index which tracks the nominal cost of a one-week beach holiday in a tourism destination, including the average price of hotels with a three to four "bubble" rating together with more than 80 million ...
Full article: Tourism activity affects house price dynamics? Evidence
2.2. Previous studies on tourism and housing prices. According to Biagi et al. (Citation 2012), studies in the area of tourism that investigate the impact of tourist activities on the housing market are very limited both in number and scope and can be classified into two main strands: (i) hedonic price and (ii) holiday homes.The first strand of literature concerns the hedonic pricing methodology.
Japan hotel prices near 30-year high as weak yen lures record tourists
Hotel prices in Japan soared to a near three-decade high in March, as the cheap yen and the cherry blossom season attracted a record number of tourists to the country. The average daily room rate ...
What Is Space Tourism
For now, the most significant barrier for space tourism is price. But air travel was also once expensive; a one-way ticket cost more than half the price of a new car. Most likely, the price for space travel will reduce overtime as well.
Dubai Mansion Sales Soar as Wealthy Flock to Palm-Shaped Island
Sales of homes with a price tag of $10 million or more climbed 19% in Dubai during the first quarter as the world's ultra-wealthy continue to flock to the Middle East's business and tourism ...
Space tourism is all yours—for a hefty price
Each spot on Virgin's suborbital spaceplane, the cheapest way to space at the moment, will set somebody back $450,000. A single seat on Blue Origin's initial suborbital launch sold at auction ...
What travelers should know about Barcelona's tourist tax increase
The new price of €3.25 (about $3.45) was implemented on April 1 as part of the Stays in Tourist Establishments Tax. The bylaw was introduced in 2021, when the tourist tax was €0.75 (around $0. ...
New Resorts Signify Impressive Growth For Travel And Tourism.
Newport Harbor Island Resort, the sole accommodations on Goat Island, is set to open at the end of April following a $50 million renovation. The renovation marks a new era for the former-Gurney ...
Driving Through Meridian: Spotlighting Neshoba County Tourism
News 11 is spotlighting the tourism industry in the county. The Philadelphia-Neshoba County Tourism Association shares what they are working on. "Tourism in Philadelphia in my opinion is about ...
Amsterdam to halt hotel construction in bid to control tourism
Dutch authorities said they want to control a city that is overrun with tourism, in their eyes. The effort would also control annual hotel stays. ... 2024 could be the year to travel as airfare prices are declining. Last month there was a notable decline in airfare prices, with a 7.1% decrease compared to the same month last year. ...
What's the cheapest way to reach near-space? Ride a balloon
The flights will last around six hours and prices start at $164,000 a ticket. ... There are three types of space tourism companies now vying to open up this experience to the wealthy, the ...
Trump Media Stock Drops 18% After New Filing
The trade helped drive a spate of demand from investors looking to bet on a decline in the company's share price, making Trump Media one of the most shorted stocks in the United States. Even ...