Tourism expenditure and all-inclusive packages - the case of a mature Mediterranean destination

Nowadays, all-inclusive packages represent one of the top holiday choices for tourists visiting mature Mediterranean sun-and-sand destinations. Compared to other types of board, all-inclusive packages suppose a change in the way tourists purchase services. This research note analyses the changing patterns of expenditure caused by all-inclusive packages. For that purpose, an empirical analysis is applied to the case of the Balearic Islands, one of the leading Mediterranean destinations. The main findings are twofold: first, compared to other types of board, all-inclusive packages lead to a reduction in the destination's revenue from tourism. Second, all-inclusive packages are causing a significant change in the distribution of tourist expenditure among economic agents. In particular, compared to other types of board, spending in the country of origin is higher for all-inclusive tourists, while spending in the destination is substantially lower.