Nonconstant reputation effect in a dynamic tourism demand model for Spain

ABSTRACT Following the ideas of the Tourism Area Life Cycle (TALC) theory, we propose a dynamic econometric model for tourism demand where the reputation effect (the effect of the lagged demand on the current tourism demand) is not constant, but dependent on congestion. We test the model using panel data from Spanish regions during the period 2000-2013. Two estimations are performed depending on whether the tourists’ origin is domestic or international. The results show that the reputation effect is not constant in both estimates, supporting the idea that tourism congestion influences tourist arrivals in Spain