Key indicators for willingness to pay/tourism elasticity

Results from the project

Stefan Gössling, Professor, Department of Service Management at Lund University

What is the research project about?
“The project is actually about both economics and sustainability. The amount of time tourists spend in a destination is becoming increasingly short (largely due to the development of low-price airlines), and greater efforts are required in order to maintain the same level of income. Shorter stays are also a problem from a sustainability perspective – in this respect we ought to make fewer journeys and stay for longer in one place. We will be studying which indicators influence tourists’ willingness to pay, their average length of stay and how they choose the timing of their visit, e.g. which season. We refer to this as tourism elasticity. In this way we can learn more about how we can “get” more out of tourism as well as the margins that exist.

“Investigations are normally carried out regarding how much tourists actually spend during their stay, although they do not look at how much more they could have spent if they had had the opportunity. We carried out a study on Barbados a couple of years ago in which we asked: Have you spent as much as you had planned, more, or less? More than half had spent less than planned, i.e. they had set aside holiday money which they did not then use. We assume that the same applies at Swedish destinations. There is probably unused potential here.”

How will you proceed?
“Our aim is to use a questionnaire to interview 2,000 tourists, both Swedish and international, at various locations around the country from May to September. We have two of the world’s leading experts working with us in the project: Larry Dwyer, tourism economist, and Alan Fyall, marketing expert. They will be planning the project together with us, and ensuring that we select the best possible scientific method.”

How can the hospitality sector benefit from this research?
“Our hope is that it will be possible to use this knowledge to increase tourism income. By knowing more about tourists’ willingness to pay and their attitude to travel, it will be possible to work more strategically and adapt the offering, the packaging and the marketing to specific target groups. I also hope that we can help the sector to think along new lines. At present we often use the number of travellers as a measure of success, although more travellers is not necessarily better. I believe that it is good for the hospitality sector – as well as from a sustainability perspective – to consider whether instead we can get more out of each traveller or steer them in other ways.”

What is the main challenge in the project?
“I actually consider the funding to be the biggest challenge. The project is wide ranging, and we will be collecting and analysing large amounts of data. Our hope is that the sector may be interested in being involved in financing parts of the project once we are up and running.”

Describe yourself in brief:
“I am a Professor at the Department of Service Management at Lund University and at the School of Business and Economics at Linnæus University. I work in areas such as sustainable tourism, economics, tax issues and policy formulation.”

Project facts

Project

Key indicators for willingness to pay/tourism elasticity

Research organization

Lund University

Project Manager

Stefan Gössling, Professor

Members

Jan-Henrik Nilsson, Associate Professor of Cultural Geography and Economic Geography, Department of Service Management, Lund University, Larry Dwyer, Professor of Travel and Tourism Economics, Australia, and Alan Fyall Rosen, College of Hospitality Management, University of Central Florida

Period

Jan 013 – Dec 2014

Amount

SEK 1,200,000

Läs om projektet på svenska »

Stefan_Gossling_2

Stefan Gössling

Projektledare

Foto: Lunds universitet

Ann-Christin Andersson

Projektdeltagare

Foto: Anders Olsson, Linnéuniversitetet