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Anatolia: An International Journal of Tourism and Hospitality Research Volume 17, Number 2, pp. xx-xx. 2006 Copyright © 2006 anatolia Printed in Turkey. All rights reserved 1303-2917/06 $20.00 + 0.00 Expenditure Patterns by Travel Party Size: British and German Tourists on Crete, Greece MARIOS D. SOTERIADES STAVROS E. ARVANITIS Department of Tourism TEI of Crete P.O.Box 1939 GR – 71004, Iraklion Crete Greece E-mail: [email protected] Department of Accounting TEI of Crete P.O.Box 1939 GR – 71004, Iraklion Crete Greece E-mail: [email protected] ABSTRACT Inbound visitors are the largest group of tourists to Crete, Greece. Given the importance of inbound pleasure tourism, a deeper understanding of expenditure patterns is vital for policy planners and destination marketers. Using the 2003 Exit Survey data, this study investigates the spending behaviour of British and German pleasure visitors to Crete. The analysis of two key variables - nationality and travel party size - were found to make a significant contribution to explaining expenditure level variations (p<.05), and have a considerable influence on expenditure distribution and spending patterns. These findings could be used for expenditurebased segmentation; policy and marketing implications are also derived. Key words: Expenditure patterns, German and British pleasure tourists, travel party size, Crete. Marios D. Soteriades is Associate Professor and Head of the Department of Tourism Industry, Technological Educational Institute of Crete, Greece. He received his MSc in Hospitality Management in 1982 and his PhD in Tourism Management in 2000 from the Université de Nice – Sophia Antipolis, Nice, France. He has undertaken a variety of research and consultancy projects for both the public and private sectors. He is the author of three books and three distance learning manuals on aspects of hospitality management and marketing. His research and writing interests include hospitality and tourism management and marketing. Stavros E. Arvanitis is Lecturer in the Department of Accounting, Technological Educational Institute of Crete, Greece. He received his BSc degree in Economics in 1985 from the University of Thessalonica, Greece and an MSc in Mathematical Economics & Econometrics in 1988 from the Université d’Aix-Marseille III, France. His is currently conducting doctoral research in applied econometrics at the University of Piraeus, Greece. His research interests focus on statistical analysis and econometrics and he has published journal articles in these areas. Volume 17 n Number 2 n Winter 2006 n 5 Expenditure Patterns by Travel Party Size: British and German Tourists on Crete, Greece INTRODUCTION There is strong marketing interest in the understanding of tourists’ expenditure and activities during their visit to a particular destination. Travel expenditure pa�erns are vital to destination planners, marketers, and business managers. Studies of spending pa�erns help identify the factors influencing consumption behaviour among market segments. A great deal of tourist expenditure research has been motivated by the documentation of the economic impacts of tourism on the host country. With the continuing growth of international tourism and tourist spending, research interests have also extended to those of consumer behaviour. However, such studies are still limited, and there is a lack of supporting empirical work in tourism spending behaviour literature. Understanding the expenditure pa�erns and activities of tourists during their visit to a particular destination is a key issue in strategic planning and marketing. In a competitive business environment, destination marketers constantly a�empt to expand their market share by seeking visitors who are heavy spenders. The purpose of this study is to provide insights that will improve our understanding of tourism expenditure pa�erns. The study was motivated by the need for an in-depth empirical analysis of pleasure tourists’ expenditure in a mass tourism destination. To that end, analysis has been carried out to examine whether certain variables affect expenditure volume and distribution. The study’s objectives are thus as follows: 1) to investigate German and British tourists’ consumption behaviour in terms of expenditure pa�erns; 2) to examine whether clear differences exist in overall spending and expense categories (i.e. package; catering; local transportation; products and services); and 3) to examine whether two variables – nationality and travel party size - influence pleasure tourists’ expenditure pa�erns. LITERATURE REVIEW From the perspective of the host countries and regions, tourism research to date has focused on the definition of factors influencing tourist expenditure level and composition (Soteriades and Varvaressos 2004). A clear definition of visitor consumption is needed before the relevant literature is reviewed. The World Tourism Organization defines visitor consumption (or tourist expenditure) as “the total consumption expenditure made by a visitor or on behalf of a visitor for or during his/her trip and stay at a destination and which expenditure is related to that trip and which trip is undertaken outside the usual environment of the tourist” (UN and WTO 1993). It has been recommended that inbound tourism expenditures should be classified under the headings of accommodation, food and drink, transport, recreation and entertainment, and shopping within the host country (WTO 1991). The various factors influencing the level and distribution of tourists’ expenditure have been examined in research projects and studies. Expenditure surveys should be able to capture tourist characteristics and behaviour (spending pa�erns), permi�ing a rich 2 n Anatolia: An International Journal of Tourism and Hospitality Research Marios D. Soteriades - Stavros E. Arvanitis and comprehensive analysis of data. The results of such analyses are o�en useful to policy makers and marketers. A review of past studies on tourism expenditure offers some insights into the preoccupations of researchers. Related Research Sheldon (1994) argued that tourism expenditure research falls into two general categories. The first category focuses on methodologies used to measure and document spending by tourists, the aim being to determine the economic significance of tourism in an economy. The second category focuses on the creation of tourism expenditure models to be�er explain and understand the volume and nature of tourist spending. The present study focuses on the latter, by using data to analyze the level and distribution of inbound tourists’ spending. Effect of tourist characteristics on expenditures: The issue of tourist characteristics affecting expenditures has been analysed in several studies. According to the findings of these studies, factors distinguishing consumers according to their expenditure level fall into two categories: (a) Socio-demographic characteristics including: nationality/country of origin; educational and marital status; socio-professional category; sex and age group (Pizam and Reichel 1979; Woodside, Cook and Mindak 1987; Pizam and Sussmann 1995; Legoherel 1998; Juaneda and Sastre 1999; Becken and Gnoth 2004). (b) Travel-related factors including: travel party size; length of stay; visit purpose / travel motive; previous visits; and travel mode (Mak, Moncur and Yonamine 1977; Uysal, McDonald and O’Leary 1988; Spo�s and Mahoney 1991; Legoherel 1998; Mok and Iverson 2000; Jang, Ismail and Ham 2001; Becken and Gnoth 2004; Soteriades, Arvanitis and Varvaressos 2005). Hsieh, Lang and O’Leary (1997) argued that for foreign travel markets, travel-related characteristics often contribute to an explanation of total expenditure more than socio-demographic factors. Their study suggested that travel party size is one of the most important factors positively affecting the level of travel expenditure. Tourist expenditure distribution: Some other studies have analysed the categories of goods that tourists tend to purchase, as well as spending levels in each category (i.e. accommodation, catering, transportation, entertainment / recreation, and shopping) on vacation in a destination. Factors affecting leisure travel expenditure pa�erns for products and services include: income; nationality; education level; employment status; number of children; age group; and marital status (Cai, Hong and Morrison 1995; Cai 1998; Kincade and Woodard 2001, among others). Evidence shows that demographic, socioeconomic and cultural factors have a varying effect on each of these expenditure categories. Research evidence indicates that there is a lack of supporting empirical work in tourism spending behaviour. More research work is needed to be�er understand expenditure pa�erns of specific tourism segments. There is also a need for a more in-depth understanding of spending pa�erns on holidays Volume 17 n Number 2 n Winter 2006 n 3 Expenditure Patterns by Travel Party Size: British and German Tourists on Crete, Greece (Perez and Juaneda 2000). Furthermore, the review of literature indicates that the ma majority of studies to date have been conducted in the US and Asian – Pacific region. Other than recent studies investigating tourism expenditure on the Spanish islands (Juaneda and Sastre 1999; Perez and Juaneda 2000; Díaz-Pérez, Bethencourt-Cejas and Álvarez-González 2005), li�le research has been done regarding Europeans’ spending behaviour on holiday. We believe that more expenditure studies should be conducted in Europe in order to gain insight into the factors affecting expenditure pa�erns within a leisure tourism destination. Such studies could provide detailed information to assist policy planners and marketers in decision-making. This study constitutes an a�empt in this direction. It focuses on inbound tourism expenditure pa�erns in a wellestablished Mediterranean destination. Inbound Tourism to Crete The analysis of tourism expenditure within Crete, the most popular Greek destination, is of considerable interest. Crete is a traditional mass destination in the Mediterranean, whose economy depends mainly on tourism. The historical, cultural and natural resources, as well as the climatic conditions on the island have contributed to mass tourism development, which has had a considerable economic impact. Table 1 shows the evolution of inbound tourism flows since 1995. The following conclusions can be drawn from this table. The total number of tourist arrivals between 1995 and 2004 rose by an accumulative yearly average of 2.1%. Nevertheless, the trend is subject to fluctuation. One should note that there is an increase in arrivals when the share of charter flights rises. This is a�ributable to the dependency on the large European tour operators. It is estimated that (a) while saturation point has not been reached, loss of competitiveness does pose a problem; (b) Crete faces all the typical structural Table 1. Inbound tourist arrivals in Crete, years 1995 to 2004 Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Inbound tourist Arrivals Charter flight arrivals (share in percent) 1,971,013 1,855,554 2,061,784 2,213,478 2,565,621 2,470,435 2,508,233 2,390,597 2,529,896 2,385,562 95.82 94.91 95.58 95.53 95.50 93.24 95.45 93.76 95.32 94.18 Source: Greek National Statistics Service (www.statistics.gr), 2005 4 n Anatolia: An International Journal of Tourism and Hospitality Research Share of Total Greek tourist flows (in percent) 18.40 18.97 18.62 17.73 20.35 18.21 19.18 18.25 18.11 18.45 Marios D. Soteriades - Stavros E. Arvanitis and organizational problems of Greek tourism that have their roots mainly in planning, marketing and management of tourism development (Bastakis, Buhalis and Butler 2004), resulting in a poor quality product. Further growth of tourism in Crete is sustainable under certain conditions. The main issue is not growth in quantitative terms (more tourists), but in terms of profitability, i.e. increased income for the regional economy. This can only be achieved by a�racting and catering for the appropriate tourist segments (Perez and Juaneda 2000). The main type of tourism to Crete is pleasure tourism, i.e. popular-package tours involving substantially sized groups. These groups are primarily seeking sun-sea-sand and sporting activities, a change and rest. The main source markets are Western European countries, representing 93% of total tourism flows. The British and German markets are the principal demand markets, rating at about 64% (C.A.A. 2005). METHODOLOGY With the exception of studies relating to the Balearic Islands (see 2.2 above), li�le research has been carried out into the expenditure of European tourists on vacation in the Mediterranean. To fill this gap, the objectives of this study are to examine expenditure pa�erns of European pleasure holidaymakers visiting Crete and investigate whether certain factors affect expenditure level and composition of pleasure tourists within the destination. To this end, two important variables, namely Nationality and Travel party size, have been investigated. It is worth noting that the study’s aims are similar to that performed by Juaneda and Sastre (1999) for the Balearic Islands, in which the researchers tried to identify differences among German and British tourists including demographic profiles; and that conducted by Díaz-Pérez et al. (2005) for the Canary Islands. The Balearic and Canary Islands have similar features to Crete; i.e. mass tourism destinations offering a package leisure product. The present study differs from that performed by Perez and Juaneda (2000), in which the objective was to analyse tourism expenditure and determine relevant pa�erns in the Balearic Islands for different market segments. In that particular case, use was made of regression models to distinguish between expenditure made in the origin country and at the destination. The data used is derived from a survey carried out by the Technological Educational Institute (TEI) of Crete. An exit sample survey first conducted during 1998 was repeated in 2003. The method used was a recall questionnaire administered to a total of 3,202 foreign tourists. Total expenditure included prepaid and local expenditures as follows: a) Prepaid expenditures including airfare, hotel, meals, airport transfers, which are purchased mainly as a package tour; b) Local expenditures were any expenses not prepaid, which could include meals, organized tours, shopping, local transportation, and entertainment. Spending was classified in five categories, namely: package; catering (food and drink); local transports (organized tours, car and motor hire); Volume 17 n Number 2 n Winter 2006 n 5 Expenditure Patterns by Travel Party Size: British and German Tourists on Crete, Greece products (gi�s, souvenirs and other purchases); and services (entertainment, recreation and other spending). The approach of this study was to use a data set of inbound visitors gathered in 2003 (this being the most recent survey). Main variables of the data set are shown in Table 2. From Table 2 the following profile of the inbound tourists may be derived: The visitors to Crete are mainly British and Germans (67.7%). A substantial share (43.5%) of these visitors take their holidays during the high season. Tourism season in Crete usually lasts seven months – from April to October – and is divided into three subperiods as follows: Low season (April; first half of May; and October); Medium season (second half of May; June; and second half of September); and High season (July; August; and first half of September). They belong mainly to the 26-35 age group (30.4%), travel mainly as couples (58.3%) and stay an average of 10.7 days (10 overnights). It is worth noting that the length of stay falls into three different durations: One week (i.e. 4 to 8 days); Two weeks (9 to 16 days); and Three weeks (17 to 23 days). The subjects mainly choose hotel accommodation (45.3%) in three or four star hotels (65.2%), opting principally for self-catering and half board (46.9% and 30.4% respectively); 59.7% of them had visited Crete once and a very high proportion (64.7%) was fully satisfied and intended to come back on holiday (47.4%). Finally, expenditure was distributed as follows: 44.5% on package, 24.7% on products, 15.2% on catering, 11.3% on local transport, and 4.3% on services. DISCUSSION OF FINDINGS Analysis of Variance (ANOVA) was performed to examine tourist expenditure. The purpose was to investigate whether two crucial factors – Nationality (British and German) and Travel party size (single, couple and family) – influence expenditure volume and composition. The results are presented herein (Tables 3 and 4). In Table 3, the survey’s findings are classified using the travel party size of inbound tourists as the criterion. It can be seen that those travelling in couple are the biggest group (58.3%), followed by those taking their holidays as a family (30.9%) and the singles (10.8%). More specifically, the tourist profiles of the three groups are as follows: • Couples: They preferred to take their holidays during high or medium season (40.4% and 39.0% respectively), they were 26 to 35 years of age (61.4%) and their length of stay was two weeks. They choose hotel accommodation (45.4%) of three stars (36.0%) and the arrangement was mainly self-catering (45.5%). 64.2% of this group had been to Crete on vacation in the past, 64.5% were fully satisfied and 43.8% stated their intention to return in the future. Regarding the use of local transport, findings showed that 30.0% participated in organized excursions, 40.3% rented a self-drive car, 17.5% hired a motorcycle and 24.6% made a journey by sea. Mean expenditure per person per trip was 937.36 euros. • Singles: they mainly visited Crete during the medium season (43.5%), they were principally 26 to 35 years of age (67.0%) and they stayed for a week (48.1%). 6 n Anatolia: An International Journal of Tourism and Hospitality Research Marios D. Soteriades - Stavros E. Arvanitis Table 2. Key demographic and trip-related variables for inbound Variables Groups Proportion of inbound tourists (%) Nationality / Country of residence British German Swedish Dutch French Others 41.7% 26.0% 5.5% 5.2% 3.0% 18.6% Visit Period Low season Medium season High season 19.0% 37.5% 43.5% Age Group 16-25 years 26-35 36-45 46-55 56 years and + 22.3% 30.4% 19.9% 17.0% 10.4% Travel Party Size Single Couple Family 10.8% 58.3% 30.9% Length of Stay One week Two weeks Three weeks Mean/median Accommodation Type a Hotel Apartment Rented rooms Campground Other type (villas and bungalows) 45.3% 37.1% 12.6% 1.6% 3.4% Accommodation Category Deluxe Four star Three star Two star One star 10.3% 30.3% 34.9% 21.6% 2.8% Terms of accommodation Self catering Bed & Breakfast Half board Full board 46.9% 21.2% 30.4% 1.5% Degree of satisfaction Fully Quite Partially Not at all N/O (no opinion) 64.7% 28.9% 2.6% 1.1% 2.7% Intention to repeat visit Yes No Eventually N/O 47.4% 5.1% 44.7% 2.8% Volume 17 35.1% 55.6% 9.3% 10,7 days n Number 2 n Winter 2006 n 7 Expenditure Patterns by Travel Party Size: British and German Tourists on Crete, Greece Table 2. Key demographic and trip-related variables for inbound Continued) Variables Groups Proportion of inbound tourists (%) Previous visits to Crete b Once Twice Three Four More than four N/O Expenditure Total: 3,228,642.57 € Package: 1,438,851.59 € Catering: 489,922.62 € Transports: 363,420.37 € Products: 796,620.55 € Services: 139,827.43 € 59.7% 19.5% 6.6% 6.5% 4.8% 3.0% 100.0% 44.5% 15.2% 11.3% 24.7% 4.3% Note. a Accommodation Type: this item includes all types of officially classified establishments; i.e. (hotels, apartments, self-catering rooms, campings, villas, bungalows). Unofficially operating accommodation establishments were excluded. b Tourists who had never visited Crete before were classified under “N/O”. They choose hotel accommodation (39.7%) in three star hotels (40.0%), with a preference for self-catering (53.6%). 49.6% of them had been to Crete at least once in the past; they were fully satisfied (58.8%) and 53.6% stated that they were intending to come back for holidays. With regard to local transport, results showed that a small proportion of single visitors used them; only 16.2% participated in organized excursions, 23.8% rented a self-drive car, 12.8% hired a motorcycle, and 16.2% made a journey by sea. Their mean expenditure was 877.11€. • Families: they preferred to travel during the high season (51.6%), the majority was between 36 and 55 years (54.0%) and their trip lasted two weeks (62.0%). They mainly choose hotel or apartment (46.9% and 44.8% respectively) in four star hotels (36.0%), preferring self-catering (47.3%). 54.7% of them had previously visited Crete once; they were fully satisfied (67.2%) and 52.1% stated that they intended to revisit the island. Regarding the use of local transport, it emerged that 26.7% participated in organized excursions; a significant proportion (52.7%) rented a self-drive car, 7.2% hired a motorcycle and 19.0% made a journey by sea. The families’ mean expenditure per trip / person was 1,188.43€. Regarding the composition of the mean expenditure, a further study was conducted by performing Duncan’s test. Findings are shown in Tables 4a, 4b and 4c. These tables show, on one hand, the mean expenditure distribution with regard to the various categories (package, catering, local transports, products and services) for the whole sample and for the two nationalities (Germans and British), as well as with regard to travel party size (single, couple and family), and on the other, the statistical significance of the mean expenditure per spending category regarding the party size, by applying one-way ANOVA. 8 n Anatolia: An International Journal of Tourism and Hospitality Research Marios D. Soteriades - Stavros E. Arvanitis Table 3. Party size groups and descriptive variables Descriptive Variables Travel Party Size Groups Couple N = 1,868 (58.3%) Family N = 989 (30.9%) Single N=345 (10.8%) Nationality: British German Other nationalities Total 41.3% 27.6% 31.1% 100.0% 45.0% 20.3% 34.7% 100.0% 34.5% 34.2% 31.3% 100.0% Visit Period: High season Medium season Low season Total 40.4% 39.0% 20.6% 100.0% 51.6% 32.6% 15.8% 100.0% 36.8% 43.5% 19.7% 100.0% Length of Stay: One week Two weeks Three weeks Total 35.3% 56.1% 8.6% 100.0% 30.1% 62.0% 7.9% 100.0% 48.1% 34.8% 17.1% 100.0% Age Group: 16-25 years 26-35 36-45 46-55 56 years and + Total 27.6% 33.8% 14.0% 15.1% 9.5% 100.0% 10.2% 20.9% 31.7% 22.9% 14.3% 100.0% 28.4% 38.6% 18.3% 10.4% 4.3% 100.0% Accommodation Type: Hotel Apartment Rented rooms Campground Other Total 45.5% 35.5% 14.1% 2.1% 2.8% 100.0% 46.9% 44.8% 4.6% 0.3% 3.4% 100.0% 39.7% 23.8% 27.5% 2.3% 6.7% 100.0% Accommodation Category: Deluxe Four star Three star Two star One star Total 7.8% 28.8% 36.0% 23.9% 3.5% 100.0% 16.7% 36.0% 31.2% 14.9% 1.2% 100.0% 5.8% 21.7% 40.0% 29.0% 3.5% 100.0% Terms of accommodation: Self catering Half board Bed & Breakfast Full board Total 45.5% 29.4% 23.7% 1.4% 100.0% 47.3% 33.8% 17.1% 1.8% 100.0% 53.6% 25.5% 20.0% 0.9% 100.0% Volume 17 n Number 2 n Winter 2006 n 9 Expenditure Patterns by Travel Party Size: British and German Tourists on Crete, Greece Table 3. Party size groups and descriptive variables (Countinuied) Descriptive Variables Travel Party Size Groups Couple N = 1,868 (58.3%) Family N = 989 (30.9%) Single N=345 (10.8%) Use of local transport: Self drive car Rented motorcycle Sea travel Air travel Organized excursions 40.3% (151.50 €) 17.5% (56.10 €) 24.6% (24.00 €) 1.2% (80.00 €) 30.0% (51.00 €) 52.7% (186.53 €) 7.2% (60.70 €) 19.0% (24.50 €) 1.3% (91.00 €) 26.7% (55.50 €) 23.8% (116.60 €) 12.8% (66.70 €) 16.2% (18.40 €) 1.4% (70.00 €) 16.2% (50.30 €) Degree of satisfaction Fully Quite Partially Not at all N/O Total 64.5% 29.8% 2.1% 1.0% 2.6% 100.0% 67.2% 27.0% 3.0% 0.8% 2.0% 100.0% 58.8% 29.3% 4.3% 2.7% 4.9% 100.0% Intention to repeat visit Yes Eventually No N/O Total 43.8% 48.3% 5.2% 2.7% 100.0% 52.1% 41.3% 4.6% 2.0% 100.0% 53.6% 35.1% 5.5% 5.8% 100.0% Previous visits to Crete Once Twice Three Four More than 4 times Total 64.2% 19.5% 4.9% 5.0% 6.4% 100.0% 54.7% 20.1% 9.3% 7.6% 8.3% 100.0% 49.6% 17.4% 7.8% 11.0% 14.2% 100.0% 1,750,992.19 € 1,175,048.72 € 302,601.65 € Expenditure Total expenditure In Table 4a, the mean expenditure of the whole sample was found to be 1,008.32€, comprising 44.5% for package, 15.2% for catering, 11.3% for local transport, 24.7% for products, and 4.3% for services. The composition of mean spending made by visitors taking holidays as a couple and as a family do not seem to significantly differentiate from total mean expenditure. On the contrary, the mean spending of singles was significantly variable with regard to the catering and local transport categories. In other words, single holidaymakers spent more on catering and less on transport; this means less mobility within the destination. Turning to the tourists’ nationality (Tables 4b and 4c), the mean expenditure of Germans was 1,070.90€ and that of Britons 1,037.71€. This expenditure was higher than the average for all nationalities included in the sample, and had a variable distribution by category. It seems that German 10 n Anatolia: An International Journal of Tourism and Hospitality Research Volume 17 Products Services 261.10 53.97 130.30 Local Transport 449.36 177.57 a 1,008.32 (in €) Mean All 24.7% 4.3% 11.3% 15.2% 44.5% 100.00% Distribution (per cent) Tourists Catering Package Total (Mean) Expenditure 235.39 52.54 90.50 196.73 382.79 870.45 Mean (€) 25.0% 4.3% 7.4% 19.7% 43.6% 100.00% Distribution (%) Single 238.36 51.57 123.85 160.68 420.44 935.63 Mean (€) 24.2% 4.5% 11.6% 14.8% 44.9% 100.00% Distribution (%) Couple Party Size 312.10 58.90 153.17 203.15 527.21 1,182.70 (€) Mean 25.3% 4.1% 11.7% 14.5% 44.4% 100.00% Distribution (%) Family F(2,3048)=23.0; p<0.000 F(2,2588)=3.22; p<0.040 F(2,786)=31.92; p<0.000 F(2,2756)=12.55; p<0.000 F(2,3199)=55.73; p<0.000 F(2,3199)=75.68; p<0.000 All effects results n Couple - Family (p=0.000)* Single – Family (p=0.000)* Single – Couple (p=0.850) Couple - Family (p=0.102) Single – Family (p=0.133) Single – Couple (p=0.819) Couple - Family (p=0.000)* Single – Family (p=0.000)* Single – Couple (p=0.000)* Couple - Family (p=0,000)* Single – Family (p=0.602) Single – Couple (p=0.003)* Couple - Family (p=0.000)* Single – Family (p=0.000)* Single – Couple (p=0.015)* Couple - Family (p=0.000)* Single – Family (p=0.000)* Single – Couple (p=0.048)* Duncan’s test 1 – way ANOVA Analysis Marios D. Soteriades - Stavros E. Arvanitis Table 4a. Distribution of mean expenditure per trip – Total of tourists a This category includes international transport, transfer, accommodation , commissions and other expenditures. * Statistically significant coefficient for ?=5%. Number 2 n Winter 2006 n 11 12 n 56.86 231.78 Services Products 151.02 Local Transport 517.12 175.91 a 1,070.90 (in €) Mean German 20.40% 4.39% 12.78% 14.14% 48.29% 100.00% Distribution (per cent) (N = 834) Catering Package Total (Mean) Expenditure 216.55 59.31 108.51 204.79 422.74 931.26 Mean (€) 21.48% 4.86% 8.89% 19.38% 45.39% 10.00% Distribution (%) Single 203.65 52.10 146.94 148.80 488.59 984.88 Mean (€) 19.43% 4.38% 13.73% 12.85% 49.61% 100.00% Distribution (%) Couple Party Size 310.94 67.30 181.03 226.31 645.64 1,373.29 (€) Mean 21.74% 4.22% 12.59% 14.43% 47.01% 100.00% Distribution (%) Family F(2,783)=11.94; p<0.000 F(2,686)=3.50; p<0.031 F(2,753)=9.90; p<0.000 F(2,753)=9.90; p<0.000 F(2,715)=8.73; p<0.000 F(2,831)=38.96; p<0.000 All effects results Anatolia: An International Journal of Tourism and Hospitality Research Couple - Family (p=0.000)* Single – Family (p=0.000)* Single – Couple (p=0.636) Couple - Family (p=0.048)* Single – Family (p=0.274) Single – Couple (p=0.323) Couple - Family (p=0.019)* Single – Family (p=0.000)* Single – Couple (p=0.008)* Couple - Family (p=0,019)* Single – Family (p=0.000)* Single – Couple (p=0.008)* Couple - Family (p=0.002)* Single – Family (p=0.369) Single – Couple (p=0.019)* Couple - Family (p=0.000)* Single – Family (p=0.000)* Single – Couple (p=0.345) Duncan’s test 1 – way ANOVA Analysis Expenditure Patterns by Travel Party Size: British and German Tourists on Crete, Greece Table 4b. Distribution of mean expenditure per trip – German tourists a This category includes international transport, transfer, accommodation, commissions and other expenditures. * Statistically significant coefficient for ?=5%. a Volume 17 n Products Services Local Transport Catering Package Total (Mean) Expenditure Mean 301.63 58.34 122.83 192.35 428.42 1,037.71 (in €) British 28.11% 4.47% 9.99% 16.12% 41.29% 100.00% Distribution (per cent) (N = 1,335) 276.38 57.70 71.83 218.72 318.36 863.68 Mean (€) 30.93% 4.21% 5.87% 22.13% 36.86% 100.00% Distribution (%) Single 277.67 54.23 109.00 176.08 393.41 950.90 Mean (€) 28.14% 4.59% 9.63% 16.26% 41.37% 100.00% Distribution (%) Couple Party Size 349.43 65.43 156.38 214.11 518.52 1,234.66 Mean (€) 27.54% 4.36% 11.24% 14.81% 42.00% 100.00% Distribution (%) Family F(2,1288)=8.87; p<0.000 F(2,1059)=2.68; p<0.069 F(2,1124)=30.14; p<0.000 F(2,1158)=4.31; p<0.014 F(2,1332)=38.00; p<0.000 F(2,1332)=39.79; p<0.000 All effects results Number 2 Couple - Family (p=0.006)* Single – Family (p=0.008)* Single – Couple (p=0.961) Couple - Family (p=0.186) Single – Family (p=0.332) Single – Couple (p=0.663) Couple - Family (p=0.000)* Single – Family (p=0.000)* Single – Couple (p=0.002)* Couple - Family (p=0,075) Single – Family (p=0.829) Single – Couple (p=0.059) Couple - Family (p=0.000)* Single – Family (p=0.000)* Single – Couple (p=0.003)* Couple - Family (p=0.000)* Single – Family (p=0.000)* Single – Couple (p=0.091) Duncan’s test 1 – way ANOVA Analysis Marios D. Soteriades - Stavros E. Arvanitis Table 4c. Distribution of mean expenditure per trip – British tourists a This category includes international transport, transfer, accommodation , commissions and other expenditures. * Statistically significant coefficient for ?=5%. n Winter 2006 n 13 Expenditure Patterns by Travel Party Size: British and German Tourists on Crete, Greece visitors spent more on package (48.29%) and local transport (12.78%), while British tourists spent more on catering (16.12%) and products (28.11%). Table 4a also presents the results of statistical analysis (Duncan’s test) for each spending category of the whole sample (British and Germans) with regard to the party size factor (single, couple, family). These results indicate that statistically significant variations are identified in all spending categories, except for ‘catering’ as regards single - family groups (p>.05); ‘product’ as regards single- couple (p>.05); and the ‘services’ as regards single – couple (p>.05), single – family (p>.05), and couple – family (p>.05). The statistically significant variations in the various spending categories show that: (a) on average, families spent more than singles and couples on package and local transport; couples have higher expenditure than singles in terms of average spending per person; (b) the singles and families’ average spending on catering is higher than that of couples; (c) the families’ average spending on products is higher than that of singles and couples, always in terms of average expenditure per person. Considering the nationality factor, findings indicate that statistically significant variations between the groups with regard to both mean expenditure and average spending on various categories are presented as follows: • German tourists (Table 4b): The singles’ average spending on holidays does not vary from that of couples (p>.05). Insignificant differences were also identified in the following cases: average spending on package between single and family groups (p>.05); spending on services between single and couple groups (p>.05) and single – family (p>.05); and spending on products between single – couple groups (p>.05). On the other hand, in all other cases, findings indicate that statistically significant variations existed; i.e. (a) the average spending of families members on package, catering, local transport and products seems to be higher than that of singles and couples; (b) those tourists taking their holidays with their companion spent more on package than singles; and persons visiting Crete with their family spent more than couples; (c) singles spent more on catering than those on vacation with their companion; (d) average spending on transport of those visiting Crete with their companion is higher than that of singles; (e) average spending on services seems to have a statistically marginal variation between couple – family groups, meaning that the members of families spent more in this category than couples. • British visitors (Table 4c): findings indicate that the average expenditure of singles on holidays is not statistically variable from that of couples (p>.05). The same is valid in the following cases: average spending on catering between single – couple groups (p>.05), single – family (p>.05), and couple – family (p>.05); average spending on services between single – couple groups (p>.05), single – family (p>.05), and couple – family (p>.05); and average spending on products between single – couple groups (p>.05). However, in all other cases statistically significant variations were identified: (a) The families’ average spending on holidays, package, transport and products is higher than that 14 n Anatolia: An International Journal of Tourism and Hospitality Research a Products Services Local Transport Catering Package Total Mean Expenditure F(2,2163)=61.45; p<0.000 Interaction 1 X 2: F(2,1873)=1.30; F(1,1877)=19.38; p<0.000 Interaction 1 X 2: British – German (1): F(2,1877)=0.54; F(1,1745)=0.01; Interaction 1 X 2: British – German (1): F(2,1745)=0.15; F(1,2071)=13.27; p<0.000 Interaction 1 X 2: British – German (1): F(2,2071)=0.75; Interaction 1 X 2: p<0.474 F(2,2071)=19.53; p<0.000 Travel party (2): p<0.858 F(2,1745)=5.72; p<0.003 Travel party (2): p<0.920 p<0.585 F(2,1877)=33.44; p<0.000 Travel party (2): p<0.272 F(2,1873)=12.96; p<0.000 Travel party (2): p<0.461 F(1,1873)=0.54; British – German (1): p<0.560 F(1,2163)=46.41; p<0.000 F(2,2163)=0.58; Travel party (2): Interaction 1 X 2: British – German (1): F(2,2163)=75.75; p<0.000 F(2,2163)=39.79; p<0.202 Travel party (2): p<0.011 F(1,2163)=6.45; British – German (1): (p=0.000)* (p=0.000)* British Family – German Family (p=0.617) British Family – German Family (p=0.810) (p=0.784) British Family – German Family British Couple – German Couple British Couple – German Couple British Family – German Family (p=0.011)* (p=0.159) (p=0.028)* (p=0.836) British Single – German Single British Single – German Single (p=0.004)* (p=0.058) (p=0.005)* British Couple – German Couple British Family – German Family British Single – German Single British Couple – German Couple (p=0.230) (p=0.568) British Single – German Single British Couple – German Couple (p=0.000)* British Single – German Single British Couple – German Couple (p=0.534) British Family – German Family (p=0.011)* (p=0.216) Duncan’s test: Interaction 1 X 2 British Single – German Single 2 – way ANOVA Analysis with factors: Nationality (1) and Party Size (2) All effects results Marios D. Soteriades - Stavros E. Arvanitis Table 5. Distribution of mean expenditure per trip – Two variables’ interaction effect a This category includes international transport, transfer, accommodation , commissions and other expenditures. * Statistically significant coefficient for ?=5%. Volume 17 n Number 2 n Winter 2006 n 15 Expenditure Patterns by Travel Party Size: British and German Tourists on Crete, Greece of single and couple groups; (b) persons visiting Crete with their companion spent more than singles on package and transport. Table 5 shows the results of 2-way ANOVA and Duncan’s test analysis, which were aimed at identifying statistically significant variation. Mean expenditure per spending category is reported for the two variables under consideration. More specifically, the mean expenditure of German tourists taking their holidays with their family was found to be statistically variable from that of similarly sized British parties (p<.05). German tourists, regardless of their party size, were found to spend more on their package than British ones (p<.05). On the contrary, mean expenditure for catering was found to not be significantly variable between the two nationalities and the various groups. With regard to the average spending on transport, a statistically significant variation was observed between British single – German single (p<.05) and British couple – German couple (p<.05), on average, the la�er spent more than the former. The mean expenditure for services was found to be insignificantly variable between the two nationalities and the various groups. Finally, mean expenditure for products was significantly variable between the two nationalities and the various groups; i.e. British single – German single (p<.05) and British couple – German couple (p<.05), on average, the former spent more than the la�er. CONCLUSIONS AND IMPLICATIONS This study has examined the influence of two crucial factors - nationality and travel party size – on the expenditure pa�erns of pleasure visitors to the island of Crete. Analysis of variance was performed to test variations in mean expenditure per trip and per person as well as in spending categories. Clear differences were identified in the consumption behaviour of the two main market segments (German and British), in the spending pa�erns of the party size groups, as well as in their overall expenditure. The major findings of the statistical analysis could be summarized as follows. Party size has a significant influence on spending pa�erns of the inbound pleasure tourists. The three travel party groups – singles, couples and families – present specific consumption characteristics regarding the visit period, age group, length of stay, accommodation type, category and terms, degree of satisfaction and use of local transport (mobility within the destination). All these factors affect the expenditure level; the families’ members being the high spenders and the singles the low ones (in terms of mean expenditure per person). Clear differences were also found in spending structure. Mean expenditure distribution in the various spending categories was analyzed in relation to nationality (Germans and British) and party size. It emerged that the expenditure pa�ern of the two nationalities was variable in terms of expenditure level and composition. These results are consistent with previous studies (Juaneda and Sastre 1999; Díaz-Pérez, Bethencourt-Cejas and Álvarez-González 2005). The interaction of the two variables - nationality and travel party size - significantly influenced the distribution of mean spending. Significant variations 16 n Anatolia: An International Journal of Tourism and Hospitality Research Marios D. Soteriades - Stavros E. Arvanitis (more than five per cent) were identified in the various spending categories between the two nationalities and among the various groups. Findings indicated that nationality of pleasure tourists, party size and the interaction of these two factors have a significant influence on the average expenditure within a destination. Both factors significantly influenced both mean spending and its distribution, leading to specific expenditure pa�erns. These findings confirm the importance of nationality and travel party size as key factors in tourist spending pa�erns (Pizam and Sussmann 1995; Hsieh, Lang and O’Leary 1997; Becken and Gnoth 2004). That being said, there are certain limitations to the scope of the present study. The analysis has exclusively considered mean expenditure level and distribution in relation to certain factors. To overcome this limitation, future research may correlate expenditure to other factors such as visit period, accommodation type and category, terms of accommodation, and degree of satisfaction. Additionally, expenditure analysis has only been performed on the two main markets to Crete, and should be repeated for other key markets, such as Scandinavia. An additional issue deserving further research is expenditure per night spent at the destination. It is also recommended that similar studies be performed in other Mediterranean destinations presenting the same characteristics as Crete. Findings from such studies could be compared and conclusions verified. A number of policy and marketing implications for tourism planners and destination marketers can be drawn from this study. Mature tourist destinations such as Crete are usually tightly controlled by tour operators (TOs). The la�er have their own corporate strategies which are not always compatible with those of destinations (Papatheodorou 2003). The main issue for destinations and local tourist businesses is not the absolute level of tourism expenditure, but what actually is consumed within the destination. The dependency on the German and British powerful TOs lead to about 50% of tourist expenditure being spent on the package in the country of origin. Obviously, a holiday package encompasses international transport, accommodation, transfer, commissions, and other expenditures. Therefore, only a part of this expenditure becomes tourism income for the host economy. From a destination’s perspective, the strategies of tourism policy should seek an increase in per capita expenditure resulting in more benefits to the host economy (Perez and Juaneda 2000). Within this framework, tourism policy should support regional tourism businesses in order to strengthen their bargaining power visà-vis large European TOs and enhance destination competitiveness (Bastakis, Buhalis and Butler 2004). In this regard, a number of initiatives on both the micro (enterprise) and macro (island) level could be considered and implemented. The destination’s competitiveness must be based on a reorientation towards be�er quality and more varied holiday products, while the ‘sun and sand tourism’ model must be adapted within the framework of sustainable development (Perez, Alegre and Sard 2005) by implementing adequate policies and using adequate planning and marketing tools. Within this framework, the following plans and Volume 17 n Number 2 n Winter 2006 n 17 Expenditure Patterns by Travel Party Size: British and German Tourists on Crete, Greece actions should be considered in the fields of tourism planning and marketing: Guidelines for a regional product innovation policy focussing on both profitable market segments and guidelines for accommodation supply and support should be developed and made available to local businesses. Investment is needed in accommodation renovation and tourism related services. Furthermore, tourism product diversification and upgrading should aim at rendering the area more a�ractive to market segments that are not exclusively seeking to consume sun and sea at low cost; the number of available recreational activities should be increased. General and tourism-specific regional infrastructure should be improved, while more profitable market segments should be detected and captured. Communication strategy and plans should target ‘quality tourists’ in terms of their spending power. Marketing strategies to induce more spending from inbound tourists are needed. These should provide more opportunities for visitors to spend, together with redesigned services and facilities to be�er meet their needs and requirements. Finally, the marketing efforts of local enterprises should be facilitated. The ultimate goal of this study was to assist destination planners and marketers in be�er understanding market segments in terms of profitability so as to cater more efficiently for their needs. In a mass leisure destination such as Crete, the above outlined strategic suggestions could contribute to enhancing the destination’s competitiveness and achieving a reasonable level of gradual independency from TOs. As such, they are critical to the success of regional tourism related facilities. REFERENCES Bastakis, C., Buhalis, D. and Butler, R. (2004). 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Submi�ed : 02 January 2006 Resubmi�ed : 24 April 2006 Resubmi�ed : 26 June 2006 Accepted : 07 July 2006 Refereed anonymously Volume 17 n Number 2 n Winter 2006 n 19