Microeconomic determinants of domestic tourism expenditure in India

We attempt to identify the key determinants of domestic tourism expenditure (DTE) in India. Socio-demographic and economic characteristics, travel-related characteristics and other characteristics of visitors play a special role in this regard. NSSO data of 72nd round, 2014-2015, are analysed using OLS and quantile regression model. Based on the quantiles of tourism expenditure, tourists are classified into three broad categories, i.e., low, medium and high spenders. The results show that along with other socio-economic variables like income, household size, and household type, 'religion' is also a significant determinant of tourism expenditures. Among travel-related characteristics, length of stay, travel party size, type of trip, and type of stay are the most influential determinants. Under 'other' characteristics, 'reimbursement claims' influences tourism spending whereas 'region of origin' shows inconsistency. The destination managers and tour operators are, therefore, recommended to consider these characteristics in their decisions-making processes to maximise the economic benefits of tourism spending.