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Abstract
This paper reviews prior applications of structural equation modeling to tourism demand forecasting in seven prominent tourism and service journals over a twelve-year period, 1998-2009. Having identified the applications over time at both the individual and aggregate demand levels, this paper discusses essential methodological issues related to structural equation modeling as it applies to tourism demand modeling. It then assesses the quality of previous applications in terms of six methodological issues: (1) data characteristics and sample size; (2) model identification; (3) overall model fit; (4) reliability and validity; (5) model re-specification; and (6) reporting. Based on this analysis, the discussion identifies several methodological problems in the use of SEM in tourism demand modeling and suggests specific avenues for improvement.
Keywords: Tourist demand, tourist behavior intention, structural equation modeling, SEM.
Introduction
Tourism has become a major force in today's world economy. The travel and tourism industry is one of the largest single employers and, in many countries is the largest contributor to the services export sector, significantly affecting balance of payments (Papatheodorou, 1999). According to the World Travel and Tourism Council, more than 255 million people (or 11.1% of total jobs worldwide) are employed in tourism related activities (WTTC, 2008). Furthermore, since the 1940s, international travel has transformed from being an activity solely for the rich into an activity for the population at large (Ioannides & Debbage, 1997). According to the World Tourism Organisation, almost 922 million people travelled abroad for tourism in 2008, generating more thanUS$944 billion in revenues. Considered as a whole, these expenditures accounted for nearly two percent of the world's gross national product (UNWTO, 2009).
Accompanying this growth in international tourism is increased interest in tourism research (Song & Li, 2008). The topic of demand modeling and forecasting has attracted the attention of both academics and practitioners as an important area of inquiry within tourism (see e.g., Archer, 1987; Van doom, 1982; Witt & Witt, 1992; Witt & Song, 2000; Li, Song, & Witt, 2005). Accurately forecasting demand is essential for efficient planning by airlines, shipping companies, railways, hoteliers, tour operators, food and catering establishments, and other sectors connected with tourism (Crouch, 1995). Li et al., (2005) argue that the need to forecast accurately is especially acute because the...