The economics of second-home tourism: Are there expenditure reallocation effects from accommodation savings?

Abstract

Second-home tourism is a popular tourism activity by which people spend leisure time away from home at second residences. Given the budget constraint, savings from not having to pay for the accommodation might produce expenditure reallocation effects on other items. This paper examines the differences in expenditure between tourists who stay at market accommodations versus those at second homes considering distinct categories. Using microdata for around 37,000 tourists in Spain travelling in the summer periods of 2017, 2018 and 2019, we estimate Craggit-type regressions to study potential reallocation effects in recreational activities, bars and restaurants, and other items including purchases at supermarkets and goods for personal care. We find that tourists at second homes spend significantly less in bars and restaurants, tourism activities and other items. There is no evidence of reallocation effects in expenditure at destination, suggesting that the economic contribution of second-home tourism is lower than typically assumed.