Factors Influencing Demand for International Tourism: Tourism Demand Analysis Using Structural Equation Modelling, Revisited

Previous work on the application of structural equation modelling to tourism demand analysis is extended by examining more varied origin–destination pairs, in particular those involving longer travel distances and fewer direct economic ties. The main potential economic determinants of international tourist flows disaggregated into holidays, business visits and visits to friends and relatives (VFR) are examined simultaneously using structural equation modelling. The tourist flows studied are inbound tourism to New Zealand from Australia, Japan, the UK and USA. The empirical results show that international trade plays the major role in influencing business tourism demand, retail sales are the major influence on the demand for foreign holidays, and new private car registrations are the major determinant of VFR tourism demand. Comparison of the previous and current studies demonstrates the consistent importance of international trade in influencing business tourism, and origin income and destination price in influencing VFR tourism.