This study examines the economic parameters underlying the ex post
demand for Australian tourism goods and services from ten source
markets in Asia, Europe and North America. The results suggest that
demand for the five broad commodity aggregates – accommodation,
food, transport, shopping and entertainment – representing the key
consumption by tourists, is price-inelastic, implying that all goods
are necessities from the tourist’s point of view. This result is
consistent with the empirical reality that, once he or she has arrived
in a destination, a tourist is bound to consume the available goods
and services. A second important finding is the apparent
complementarity of demands. This indicates that tourists tend to
purchase a bundle of goods and services, all of which are necessary
for the maximization of utility from visitation. The analysis also
suggests that the underlying price elasticities exhibited through
cross-price elasticity values have important implications for how
price sensitivities can be better understood.