Insights from analysing tourist expenditure using quantile regression

Like many other small-island tourism destinations, Madeira faces considerable challenges due to its limited resources and mature markets, including decreasing daily expenditures, a dependency on repeat tourists and decreasing length of stay. Product diversification is frequently recommended as a strategic response and rural tourism as a candidate product. The efficacy of rural tourism as a strategy for increasing destination-wide tourism receipts remains, however, largely unproven. The purpose of this study is to examine the determinants of the daily expenditure of tourists staying in the rural interior of Madeira, based on quantile regression analysis. The results suggest that such tourists are rather passive, wishing mainly to rest and relax. As such, their daily expenditures are not appreciably greater than those of coastal tourists who comprise the mainstay of Madeira’s clientele. Quantile analysis nevertheless provides some useful insights for developing strategies to increase their spending, including family groups and first-time tourists.