Expenditure-based Segmentation Research Articles

Profiling the package traveler: An expenditure-based segmentation endeavor

An alternative to the specificities of geographic, socio-economic/demographic, and psychographic modes, expenditure-based segmentation, a behavioral approach, provides the ideal avenue for exploring tourist spending patterns and behavior. Reflecting the idiosyncrasies of a small island destination, this study explores tourists' actual spending in the course of their vacations in Cyprus. A two-step cluster analysis is utilized to develop an expenditure-based segmentation profile with the aim of exploring the spending behavior of tourists. Furthermore, econometric modeling reveals each cluster's effect on the relevant expenditure categories, and the net impact of the cost of package on spending at the destination. Noteworthy, expenditure at the destination is dissected into seven categories, thus providing a more thorough overview of tourist behavior. Findings reveal a five-cluster solution that profiles the spending behavior of package travelers, whereas segment comparisons highlight significant implications for local tourism stakeholders, on both the operational and strategic levels. • An expenditure-based segmentation profile of international package travelers is developed. • Tourist expenditure is dissected into specific categories that fall outside the cost of the travel package. • The similarities and differences of the expenditure behavior between the clusters are highlighted. • The net impact of the cost of package on spending at the destination is investigated. • Implications for industry stakeholders are discussed.

Revisit to Expenditure-Based Segmentation: The Case of the US Kids Golf World Championship

The current study segments the youth golf event market based on expenditure of families who participated in the US Kids Golf World Championship. Expenditure was analyzed from the perspective of parents of young golfers who played at the event. Analysis confirmed the existence of three dissimilar groups of spenders that included light spenders, medium spenders, and heavy spenders. These spenders significantly differed in 1) the expenditure variables such as lodging, food & beverage, golf, retail, transportation, and entertainment & recreation, 2) the overall satisfaction with the event, and 3) trip characteristics. The findings help better appreciate the expenditure patterns and characteristics of families who attended the special youth golf event, a market that has hitherto been infrequently addressed in the literature. Marketing implications are discussed for golf event marketers and associated businesses.

Expenditure-based segmentation of freight travel markets: Identifying the determinants of freight transport expenditure for developing marketing strategies

There is a substantial body of literature relating to freight transport sector's economic impact at the macro-level, but less is known about how freight demand gets translated to an establishment's expenditures at the micro-level. This paper addresses this research gap by collecting data about expenditure patterns of establishments and applying market segmentation technique based on finite mixture models. Three latent segments - heavy spenders, medium spenders and light spenders – and their associated profiles are identified. The results indicate that significant differences exist between the three expenditure-based segments of establishments in terms of spending patterns, business size indicators, locational characteristics and freight travel patterns. The heavy spenders tend to be strongly influenced by employment, gross-floor area, business age and fleet ownership levels. The length of haul and truck type choice have a strong incremental effect on the volume of expenditures and larger shipment sizes are associated with expenditure reduction due to economies of scale. The diverging characteristics of expenditure segments emphasizes the need of the logistics providers to “identify their markets” and planners to “identify how demand translates to transport expenditures”. The overall conclusion is that segmenting establishments based on unobservable heterogeneity with respect to their freight transport expenditure is preferable and more informative than treating them as one homogeneous group. The study findings provide important information that planners and logistics providers can utilize in developing effective logistics plans and marketing strategies.

Who are the big-spending beachgoers and what is important for them?

Orientation: Beaches attract millions of visitors every year and this has an impact not only on the economy, the environment and the local community but also on current and future beachgoers. Research purpose: The aim of the article is to use expenditure-based segmentation to gain a greater understanding of beach visitor spending in order to identify different markets and the aspects they deem important. Motivation for the study: Although South Africa has a coastline of approximately 3900 km, little is known about the beachgoer to these beaches. This article contributes to the quantification of the economic benefits stemming from beach tourism and in understanding the factors that drive beach visitation. Research approach/design and method: During 2017/18, beachgoers to eight beaches in South Africa were surveyed and 1138 questionnaires were gathered. Using cluster analysis, four segments of beachgoers were identified. The differences between the various segments were explored by using analysis of variance and Pearson’s chi-square. Main findings: The high-spending markets can be distinguished by language, level of education and age, while sunbathing and relaxation are key beach activities. Six key motives for visiting beaches were identified. High-spending markets tend to visit Blue Flag beaches that offer good bathing conditions. Practical/managerial implications: This research identified four segments of visitors to South African beaches, ranging from low-spending locals to high-spending mixed market beachgoers. There are distinct differences between the segments, but important to all segments are the environment qualities of the beach in terms of both cleanliness and beach safety. Contribution/value-add: The research, therefore, concludes that two the main threats to beach tourism and destinations are (1) pollution of the oceans and (2) global warming.

Why Standardization of Festival Marketing Might be a Cheesy Affair

The purpose of this article is to segment visitors to a cheese festival to identify more appropriate marketing strategies. Segmentation can be based on various characteristics of consumers. One characteristic that has become popular over the last number of years is expenditure-based segmentation, which is an attempt to address issues of festival sustainability. Although this article falls in this cluster, we do not focus on the total spending of festival attendees like most research employing expenditure-based segmentation; we rather focus on the spending of attendees on the main theme of the festival, namely on cheese. Six hundred structured questionnaires were administered at the South African Cheese Festival that was held in the Western Cape during April 2015. Methods used in the analysis include factor analysis and cluster analysis. The main findings are that three clusters were identified with their own unique marketing mix and the clusters can be used as a taxonomy of visitors to this festival, namely mild cheese explorers, mature cheese families, and vintage cheese loyalists. This research has also revealed distinct motives for attending a cheese festival that were not found in previous research. Lastly, this approach is very useful in differentiating markets. This is the first time that cheese festival attendees' cheese expenditure and behavior have been used as segmentation basis and the research thus makes a contribution to literature and practice that strive to gain better insight into cheese tourism.

Expenditure-based segmentation of tourists taking into account unobserved heterogeneity: The case of Venice

Visitors to big tourist cities are very likely heterogeneous and can be classified into different segments, for example, low and high spenders. Previous studies on visitor expenditure-based segmentation seem to have only taken into account observed heterogeneity, usually segmenting tourists based on observed characteristics. In the present study, however, the visitors to Venice, Italy, are segmented with respect to their spending into different groups based on both observed and unobserved heterogeneity using a finite mixture model. The results indicate that the visitors belong to three latent classes with respect to their expenditure. Interestingly, different variables affect expenditure differently depending on the latent class belonging. The overall conclusion is that segmenting tourists into different classes based on unobserved heterogeneity with respect to their spending is preferable and more informative than treating the visitors as one homogeneous group. The approach is also more useful for different types of policymaking.

Characteristics of Green Hotels’ Potential Customers: A Case of Vietnamese Domestic Tourists

Characteristics of Green Hotels’ Potential Customers: A Case of Vietnamese Domestic Tourists

Expenditure-Based Segmentation: A Case Analysis of Attendees to a Youth Festival in South Africa

This case analysis applies expenditure-based segmentation to the Samsung Rage Festival in South Africa, a major youth festival. Results reveal that that expenditure levels are associated with a number of socioeconomic as well as numerous travel characteristics. Overall, it is shown that knowledge of the spending behavior of youth travelers can assist festival administrators in developing programs that reflect the characteristics of the three expenditure segments studied. Directions for further examination in this research stream are provided.

Expenditure-Based Segmentation: Application of Quantile Regression to Analyse the Travel Expenditures of Baby Boomer Households

The substantial size of the senior worldwide population and its demands have drawn considerable attention, making it the ‘silver economy’ or ‘senior’ market. Baby boomers, those born in the years after the Second World War, or more typically between 1946 and 1964, are the specific focus of this research interest. This paper estimates the determinants of travel expenditures in baby boomer senior households in Taiwan. The traditional ordinary least squares (OLS) approach, combined with quantile regression analysis, is adopted to capture both the mean and quantile behaviours of travel expenditures in baby boomer households, using the 2008 Survey of Family Income and Expenditure (SFIE) in Taiwan. The OLS model is used to obtain the average (mean) expenditure behaviour, whereas quantile regression analysis captures the extreme behaviours of the two tails of travel expenditures in baby boomer households. The estimation outcomes have important policy implications for travel marketers and operators in the tourism industry who seek to understand baby boomer senior consumers.

Expenditure-Based Segmentation of a Mountain Destination Tourist Market

ABSTRACT Although tourism is one of the most dynamic economic activities worldwide, few studies have been conducted on the potential role of market segmentation based on visitors' expenditure level at the destination in order to define strategies for maximizing the economic benefits of tourism for local destinations. This study extends the research undertaken in this area by identifying different clusters of visitors, in a Portuguese mountain destination, according to the level and patterns of visitors' expenditure during the visit. Four distinct segments were identified and show statistically significant differences regarding their economic relevance for the destination, sociodemographic profile, and trip behavior. This study contributes to the discussion of analytical marketing tools available in the context of destination planning, aiming at the definition of strategies that may maximize the economic contribution of tourism for local economic development.

Expenditure-based Segmentation of Visitors to the Wacky Wine Festival

The Wacky Wine Festival is the largest wine festival in South Africa with more than 15,000 visitors. An expenditure-based segmentation was completed in order to compile a profile of the low- and high-spenders who visit the Festival with the purpose of identifying the attributes of high-spenders. In order to achieve this, a survey was conducted in June 2010, when 400 questionnaires were administered to visitors at selected wine farms during the course of the festival. The methods used in the analysis included K-means clustering, factor analysis, Chi-Squared and independent t-tests, as well as ANOVA. The results indicate that both socio-demographic and behavioural aspects distinguish the high-spending festino from the low-spender. In particular gender, language, age, occupation, place of origin, group size and length of stay differ significantly between the clusters. In addition, the reasons why high-spenders attend the festival differ from that of low-spenders, with high-spenders placing more emphasis on the intrinsic motives for attending the festival.

An Analysis of Tourists' Expenditure on Winter Sports Events through the Tobit Censorate Model

This study analyses the economic impact of the Biathlon World Cup 2009 in Antholz-Anterselva. The survey concentrates on the immediate, direct and short-term additional revenue brought into the region by foreign sports event spectators. The authors first apply an expenditure-based segmentation technique to data collected during the event to separate respondents according to socio-demographic variables. Second, a Tobit analysis is applied to obtain an expenditure model that is useful in explaining the different determinants of trip expenditures by spectators of the event. The results reveal significant socio-demographic differences between the four expenditure groups. For instance, heavy spenders are composed mainly of mature tourists, arriving for the first time in medium-sized groups. Also, the most important factors in total expenditure are income level, the geographical origin of the spectator and the size of the travel group.

Expenditure-based segmentation of sport tourists

Destinations throughout the USA and world compete against each other for the opportunity to host professional and amateur sporting events. The primary motivation for these destinations is the anticipated economic impact generated by sport tourists' expenditures while attending sporting events. Although the economic impact of sporting events has been widely studied, the analysis of individuals' expenditures has been neglected. Since tourists' expenditures are considered one of the most important variables in the economic analysis of a destination's tourism industry, segmenting tourists based on expenditures is a valuable alternative to more common segmentation approaches. In this study, sport tourists attending a Professional Golfers' Association of America tournament were divided into three groups (low, medium, and high spenders) based on their total per day spending. The mean per day total expenditures of the low-spender segment were $69.21, the medium spenders' mean total per day expenditures were $219.25, and the high-spender segment averaged $759.03 in total per day expenditures. The results indicate that a significant difference exists between the three expenditure-based segments of sport tourist spectators in terms of spending patterns, trip characteristics, and trip preferences. Expenditure-based segmentation of sport tourist spectators provides important information that event organizers and local tourism stakeholders can utilize in developing effective and efficient short- and long-term management and marketing strategies.

Expenditure-based segmentation of visitors to Aardklop National Arts Festival

Competition in the festival market has important implications for South African arts/cultural festivals. To assist a festival to remain sustainable, market segmentation is an effective tool to divide existing and potential markets into homogenous groups based on meaningful characteristics. The aim of this article is to segment visitors (by using visitor expenditure as segmentation method) to one of South Africa's largest arts festivals, namely the Aardklop National Arts Festival held annually in Potchefstroom in the North West province. A questionnaire survey (N=1 671) was conducted annually at the festival and data from 2005 to 2008 were analysed. In the results four expenditure segments were identified and the analysis confirmed significant differences in socio-demographic and behavioural variables/characteristics between these different expenditure groups. Managerial and marketing implications are consequently proposed for the festival organisers.

Understanding travel expenditure by means of market segmentation

Consolidated tourism destinations should expand their market share by focusing on tourism spending instead of number of travellers. This strategy emphasises satisfying the preferences and needs of tourists more dynamically in terms of their expenditure patterns. The purpose of this paper consists of evaluating the usefulness of an expenditure-based segmentation as a relevant instrument of tourism policy in order to increase the economic benefits from travellers to Andalusia. More specifically, by means of decision trees and linear regression statistical techniques, heavy spenders are identified as well as exploring which variables might be considered as the best predictors of travel expenditure. Finally, the implications of the results are discussed, as they may provide practical guidance for tourism practitioners at similar destinations.

Expenditure-based segmentation of visitors to the Tsitsikamma National Park

Purpose and/or objectives: The purpose of this article is to apply expenditure-based segmentation to visitors at the Tsitsikamma National Park. The objective of the research is twofold, to identify the socio-demographic and behavioural variables that influence spending at the Tsitsikamma National Park and to make recommendations on how to attract the high-spending market. Problem investigate: The Tsitsikamma National Park is Africa's oldest and largest marine reserve and plays a vital role in the preservation and conservation of marine fauna and flora. The park is also a popular holiday destination for international and local tourists and therefore plays an important role in the regional economy. Due to the importance of the park to the community and region, the Tsitsikamma National Park needs to attract more high spenders since this will contribute to the sustainability of the park. Expenditure-based segmentation is regarded as the best method for creating a profile of the high-spending market. Design and/or methodology and/or approach: To achieve this, tourist surveys from 2001 to 2008 were used. In total, 593 questionnaires were used in the analysis. Statistical analysis was done by applying K-means clustering and Pearson's chi-square as well as ANOVA analysis. Findings and/or implications: The research revealed that the province of origin, group size, length of stay and accommodation preference have a positive influence on higher spending. Originality and/or value of the research : Even though this type of research has been done for the Kruger National Park, a more innovative approach was followed by using K-means clustering, which is also the first time that this approach was used in determining the high-spending market at the Tsitsikamma National Park. Conclusion: Two distinct markets were identified. These were the high and low spenders where the most significant differences were with regard to province of origin, group size, length of stay and preferred type of accommodation. Interestingly, aspects such as owning a Wild Card (which is a loyalty card) showed no significant difference. The same applied for age, marital status or frequency of visits. Therefore, the results (if one compares this research with that done at the Kruger National Park) confirm that the size of operations and activities available have a dual impact.

Segmenting special interest visitors to a destination region based on the volume of their expenditures: an application to rail-trail users

Various general tourist markets have been successfully segmented based on the volume of tourists’ expenditures in destination areas. However, the approach has been rarely employed in more narrowly defined ‘special interest’ tourist markets. This study tested the viability of expenditure-based segmentation in the case of a special interest market comprised of visitors to a rail-trail in the Black Hills of South Dakota, USA. Nonresident visitors were classified as light, medium, and heavy spenders based on their total expenditures in the region. Although heavy spenders comprised only 33% of the Trail’s market, their spending accounted for 65% of the expenditures of the market as a whole. Compared to their counterparts, heavy spenders were more likely to have been mountain biking aficionados, to have had higher incomes, and to have had longer lengths of stay and greater involvement with recreation in the study region. Findings suggest how heavy spenders can be successfully reached, attracted, and served.

An Analysis of Tourists’ Expenditure of Winter Sport Events through Tobit Censorate Model

The aim of this study is to analyze the economic impact of the Biathlon World Cup 2009 in Antholz-Anterselva. The survey concentrates on the immediate, direct and short-term additional revenue brought into the region by foreign sport event spectators. We first apply an expenditure-based segmentation technique to data collected during the event to separate respondents according to socio-demographic variables. Second, a Tobit analysis is applied to obtain an expenditure model that is useful in explaining the different determinants of trip expenditures by spectators of the event. Results reveal significant socio-demographic differences between the four expenditure groups. For instance, heavy spenders are mainly composed by mature tourists, arriving for the first time in medium groups. We also show that the most important factors of total expenditures are income level, geographic origin of the spectator and the size of the travel group.

Applying Expenditure-based Segmentation on Special-Interest Tourists: The Case of Golf Travelers

Given the growing competition among golf travel destinations and the increasing costs of managing and maintaining related facilities, it is important to investigate and understand the expenditure patterns of golf travelers. The results of this research provide useful information for golf destination marketers in the development of strategies to attract and retain golf travelers. This study uses an expenditure-based segmentation of golf travelers visiting a Southern Gulf region in the United States. The findings indicate that the heavy spenders exhibit clear spending patterns and are responsible for most of the sample’s total expenditures. The heavy spenders also are well differentiated along golfographic and tripographic measures, but not along sociodemographics and information sources used prior to the vacation. The article ends with an assessment of the contributions of the findings both to the literature on travel expenditure and to golf destination marketers.

Expenditure-Based Segmentation and Visitor Profiling at the Quays in Salford, UK

There is a substantial body of literature relating to tourism's economic impact at the macro level, but less is known about tourist expenditure at a micro scale. This paper reports findings from a survey of day-visitor expenditure by category at The Quays in Salford, UK. Expenditure is influenced strongly by the visitor's age, frequency of visitation and visit motivation. Heavy, medium and light expenditure segments and associated profiles are identified. ‘Heavy spenders’ are more likely to be female, in a family group and have shopping as the main motivation for the visit. The implications of the findings are discussed.