For example the UK in 2006 had 185.5 million
international arrivals or departures from UK airports, 61%
of which were arrivals or departures by UK residents and
39% by overseas residents or passengers transferring
and transiting. Of these passengers 77% were travelling
on short-haul trips to Europe, 9% transatlantic and 14%
other long-haul. Using the elasticities in table 3 an
average price elasticity for UK inbound and outbound
travel can be derived of -1.0.
Njegovan (2006) found that UK residents travelling
overseas for leisure had a price elasticity of -0.7 to -0.8.
Business travel will be less elastic. So a conservative
estimate for the price elasticity (P
e
) of inbound travel by
overseas residents can be derived as follows