Chinese Outbound Tourist Preferences for All-Inclusive Group Package Tours: A Latent Class Choice Model

Abstract

Extensive studies were conducted to understand package tour participants, but little is known about the selection and trade-off for a specific tour versus another. A stated choice experiment was conducted in this study with 270 prospective mainland Chinese outbound tourists, aiming to identify their heterogeneous preferences for package tours that involved eight attributes, each with varying levels. To identify the sources of preference heterogeneity, a latent class choice model was estimated to segment each of the three predetermined budget groups into two subgroups, and profile these subgroups by sociodemographic characteristics and consumption values. Different preference patterns for tour attributes were revealed among the subgroups, whereas majority of the respondents reported common preferences for fewer designated shops and direct flights. The results provide researchers and practitioners with innovative insights into the preferences and trade-offs of mainland Chinese package tour participants, as well as practical guidance for package tour design and pricing.