DISCLOSING THE UNNOTICED POWER OF MARKET SEGMENTS IN THE TOURISM GROWTH NEXUS DISCUSSION

The present study aims at investigating the tourism growth nexus by launching a new approach when conceptualizing tourism expansion. We add to the relevant discussion in two specific ways. First, we claim that tourism is a heterogeneous economic activity and launch the concept of market segments when searching for cointegrating and causality relationships at the interface of tourism and economy, an issue that goes unnoticed and an approach that is not tested so far. We define them in two different ways: business tourism spending and leisure tourism spending. In the analysis, we also take into consideration capital investment spending as well as internal consumption within the tourism industry. Second, we apply second-generation panel data analysis within the Eurozone economic space, which is insufficiently investigated within the concept of tourism growth nexus discussion. Research findings indicate that a unidirectional causality relationship running from business tourism spending to economic growth is present. Hence, if business tourism spending increases (decreases) then economic growth will increase (decrease) too. Additionally, changes to leisure tourism spending will cause changes to economic growth in the same direction and vice versa. Internal travel and tourism consumption as well as capital investment spending within the travel and tourism sector form a feedback hypothesis with economic growth meaning that they are mutually influenced when changes occur. Practical implications indicate that a friendly and attractive tourism ecosystem in terms of investments and innovations will enhance sustainable economic growth and tourism demand in the long run.