Probit Model Analysis
Probit Model Analysis
Noora Shrestha
Department of Mathematics and Statistics, P.K. Campus, Tribhuvan University, Kathmandu, Nepal
Subject Areas
Consumer Behavior, Tourism Economy, Applied Statistics
Keywords
Probit Model, Exploratory Factor Analysis, Varimax Rotation, Budget
Traveller, Revisit Intention, Nepal
1. Introduction
Tourism is considered as the major sector that contributes the national economy
of a developing country by creating employment opportunities, generating rev-
enue, and earning foreign currency (Terry, 2006 [1]; Kevin & Irena, 2007 [2]).
Nepal is taken as the naturally beautiful destination for mountaineers, people for
white water rafting, researchers of the animal & bird, rock climbers and adven-
turous people. The tourism in Nepal is largely focused on courageous trekking,
mountaineering and it does attract a reasonable number of tourists including
budget travellers (MoCTCA, 2019 [3]; MoCTCA, 2020 [4]).
Budget travellers or backpackers are independent young travellers who stay
longer than usual length of travel, prefer a low budget for travel and accommo-
dation, and desire to meet both other tourists and locals (Kevin & Irena, 2007)
[2]. Budget travellers are to be found in every village and city of a country
throughout the world (Richards & Wilson, 2004) [5]. They are more distinct
than other tourists, having large range of interest, motivations, cultural diversity,
age, class, and nationality. The foreign currency brought in by budget travellers
often exceeds than the other mainstream tourists and they can approach and
contribute to the marginalized social groups (Maoz, 2007) [6]. According to
tourism statistics of Nepal, in January 2020, there was a record of 39.2% interna-
tional tourists arrival from Asian countries, followed by 26.3% from SAARC
countries, 13.6% from Europe, 9.2% from America and remaining from other
countries (NTB, 2020) [7]. In Nepal, average expenditures per day of budget
travellers were $20 to $30 while the average per day spending of other interna-
tional tourist was $54 in 2017; it was dropped to $44 in 2018. The average length
of stay of overseas tourists in Nepal was 12 to 14 days depending on the season
(MoCTCA, 2020) [4].
In January 2020, the tourist arrival was observed satisfactory resulting 79,686.
These tourists were from the top six countries: India (21.7%), China (15.9%),
USA (8.1%), South Korea (6.3%), Thailand (5.7%), and Myanmar (4.7%). The
revenue generated from tourism in Nepal was $703,179 thousand in 2018
(MoCTCA, 2020) [4]. It was perceived that the tourist influx is high during two
points of the year February to April and September to November, making them
the ultimate seasons for tourist arrival in Nepal. The purpose for travelling to
Nepal was for holiday, trekking, and mountaineering followed by pilgrimage.
The percentage of male tourists was higher than the female in last few years
(MoCTCA, 2020) [4].
Revisit intention has been identified as an extension of satisfaction and a sig-
nificant research topic in tourism studies (Lehto, O’Leary & Morrison, 2004 [8];
Julaimi & Salim, 2016 [9]). Some literatures reveal that satisfied tourists agree
and have the tendency of revisit to the same destination to stay longer, contri-
bute more intensively, and explore new locations (Bake & Crompton, 2000 [10];
Khan, Chelliah & Ahmed, 2017 [11]). The revisit intention is also considered as
willingness to recommend the destination to others by spreading positive word
of mouth (Sonmez & Graefe, 1998 [12]; Pritchard & Howard, 1997 [13]). There
are numerous analyses verifying the positive impact of tourist satisfaction and
perceived attractiveness on repeat tourism (Juaneda, 1996 [14]; Bigne, Sanchez &
Andreu, 2009 [15]; Um, Chon, & Ro, 2006 [16]). The prominence of revisit in-
tention of the traveller for the sustainability of the tourism business has been
well proven by previous literature (Kozak, 2001 [17]; Loi, So, Lo & Fong, 2017
[18]). According to Seetnah et al. 2020 [19], the satisfaction of the tourist with
hotel accommodation quality, cost of living, development level, tourism attrac-
tion, and quality of information were important determinants of both tourist sa-
tisfaction and revisit intention. They conducted study with non-probability sam-
pling method and data was analyzed using probit model.
In Nepal, the tourism promotional activities to attract tourists are largely fo-
cused on limited destination and on the features of tourism such as mountai-
neering, trekking, and jungle safari. There are some tourist destinations where
regular plan, promotion, and attractive packages to the international tourists are
rare. Repeat visitation is very imperative for the tourism industry of Nepal be-
cause these destinations are mainly relying on the loyal repeat visitors. The loyal
visitors will increase their stay and share their experiences to other potential tra-
vellers to visit the destination (Pradhanang, 2000 [20]; Shrestha, 2000 [21];
Hampton, 2010 [22]).
Despite the phenomenal growth seen in January 2020, Nepal’s tourism sector
is far from reaching its peak potential. Although ministry of culture, tourism,
and civil aviation produces tourism statistics every year, there is no precise data
on repeat tourism and budget travellers such as demographic profile, trend and
purpose of visit nevertheless Nepal being a popular budget traveller’s destina-
tion. It is very important to understand that budget travellers immediately are
fun lovers, independent travellers, and contributes to raise the income of local
people. Budget travellers for trekking and adventure rend to consume local
products, and stay in homestay or family owned teahouse, love local food; use
locally owned transport, which in turn brings profit within the local community
rather than the international hotel groups (Hampton, 2010 [22]; Scheyvens &
Russell, 2012 [23]). Hence, the present study intends to provide answers to the
research questions; 1) What are the socio-demographic attributes of the budget
traveller? 2) What are the significant factors influencing budget traveller’s desti-
nation satisfaction characteristics on their revisit intention?
Budget travellers when compared to the mainstream tourists are more likely
to travel low-income countries like Nepal, spend more time in travelling, con-
tribute for cultural sustainability and be ready to endure hardships and inconve-
niences (Pearce, 2008) [24]. The budget travellers’ tourism is most important
and has a positive socio-economic impact for local communities they visit but
Nepalese tourism stakeholders less acknowledge them. By reason of covid-19
pandemic, an international tourism may not resume anytime soon and hence it
is necessary to rethink on the tourism strategy by focusing more on the signifi-
cant factors without compromising the quality.
The aim of the present study is twofold; first, to identify the factors related to
destination features contributing to satisfaction and second, to assess the influ-
ence of these factors on revisit intention of the budget traveller.
ria of the sample were 1) age more than 18 years, 2) visiting in Gandaki province
for over a week, and 3) accommodated in homestay or budget lodges or family
owned teahouses. Questionnaires were distributed during November to Decem-
ber 2019 to the respondent tourists who had been travelling in the same prov-
ince during survey period.
P (Y =
1X)= (
Φ ∑ k =1 β k X k =
K
∫−∞ )
2π exp
Σβ k X k
( ) ( ) −t 2
2π exp
2
dt
P (Y = 0 X ) = 1 − Φ (∑ K
k =1
βk X k )
DOI: 10.4236/oalib.1107210 5 Open Access Library Journal
N. Shrestha
tourists was lower than the average expenditure of the tourist revealed by tour-
ism statistics of Nepal (MoCTCA, 2020) [4]. According to tourism statistics of
Nepal, the average spending per tourist per day was $54 in 2017 and $44 in 2018
for all types of tourists. The average expenditure per person per day of the tour-
ist was found to be $40 in a previous study conducted in the same destination
(Bam & Kunwar, 2020) [26]. Hence, the participants of this study were assumed
to be budget traveller as 92% of them spent less than $40 per person per day
during their visit.
Variables Categories N %
Male 126 63
Gender
Female 74 37
16 - 30 62 31
Age (years) 31 - 45 98 49
46 - 60 40 20
Asian-SAARC 59 29.5
Asian-others 58 29
European 40 20
Region wise
Distribution
Americans 18 9
Oceania 17 8.5
Other 8 4
Holiday 64 32
Adventure 61 30.5
Pilgrimage 20 10
5-9 60 30
15 - 20 72 36
Component
Variables
1 2 3 4
Marginal
Variable Coefficient Std. error. z-statistics
effects
Note: (*), (**), (***) denote significance at the 10%, 5%, and 1% levels, respectively.
prediction rate attained from the binary probit model is 93.5%, which indicates
that this model predicts 93.5% of the cases correctly.
The predictor variables tourist guide service, adventure sports, trekking and
mountaineering, experiencing different lifestyle, behavior & cordiality of local
people, and historic & religious places have statistically significant effect on the
revisit intention of the budget traveller at 10%, 5% and 1% level of significance.
These variables were also found to be important determinants of revisit inten-
tion by previous studies (Kozak, 2001 [17]; Seetanah et al., 2020 [19]; Bam &
Kunwar, 2020 [26]; Mok et al., 1995 [44]). The variables considered in this study
were relevant to the budget travellers visiting Gandaki province but may not be
appropriate to the mainstream tourists visiting other destination. There are very
few studies that considered tourists’ satisfaction and their repeat visit to Nepal.
The finding of this study is consistent with the studies in which predictors hos-
pitality service, qualities of activities around the destination, adventure, behavior
of people, and cost of a stay significantly influenced the tourist overall satisfac-
tion and satisfaction influenced revisit intention (Bigne et al., 2009 [15]; Um et
al., 2006 [16]; Bam & Kunwar, 2020 [26]).
Table 3 also demonstrates the average marginal effects. The marginal effect
for the variable satisfaction with tourist guide service is 0.035; it means the
probability of revisit intention of travellers will increase by 3.5%. According to
marginal effect, for a predictor satisfaction with adventure sports, the probability
of revisiting the destination is increased by 14%. The marginal effect of the vari-
able satisfaction with trekking and mountaineering is 0.074; it indicates that the
probability of revisit intention will increase by 7.4%. The marginal effect of va-
riable satisfaction with experiencing different lifestyle will increase intention of
revisit by 11%. The marginal effect of satisfaction with behavior & cordiality of
local people will increase to revisit intention by 7.2%. The marginal effect value
(0.062) indicates that the budget travellers’ satisfaction with historic & religious
places is 6.2% more likely to have to revisit intention.
To sum up, the present study reveals the male participants were more than the
female to visit Gandaki province of Nepal. The participants of this study were
assumed to be budget travellers. The mean age of participants was 35.7 years.
The majority (80%) of the tourists were from the age group 16 to 45 years. More
than half (58.5%) of the participants were from Asian countries. 30.5% of the
tourist visited for the purpose of adventure including trekking and mountai-
neering. The average length of stay of participants was 12.72 days. The tourists
were considered to be budget travellers as 92% of them spent less than $40 per
person per day during their visit. The socio-demographic findings are consistent
with the Nepal tourism statistics report published in 2020 (MoCTCA, 2020) [4].
Using factor analysis, four components were extracted as a major constructs
associated to the satisfaction of budget travellers. They were people and heritage,
natural environment and beauty, adventure, and tourist information. Similar
constructs were observed in the previous literature (Bigne et al., 2009 [15]; Um
et al., 2006 [16]; Bam & Kunwar, 2020 [26]). The probit model predicts 93.5% of
the cases correctly. The outcome of probit model analysis shows that satisfaction
with destination characteristics such as historic and religious places, experienc-
ing different lifestyle, trekking & mountaineering, adventure sports, and tourist
guide service are realized to significantly influence the probability of revisit in-
tention of budget travellers to Nepal.
4. Conclusions
This study discussed on the satisfaction of budget travellers with various desti-
nation attributes that influence their intention to revisit to Nepal. The findings
of this study disclosed that various features of destination satisfaction included
in the survey questionnaire were extracted by factor analysis into four compo-
nents such as people and heritage, natural environment & beauty, adventure,
and tourist information. The influences of all 13 factors on revisit intention of
budget travellers were examined using binary probit model.
The result of probit model revealed that the predictors of destination satisfac-
tion with tourist guide service, adventure sports, trekking & mountaineering,
experiencing different lifestyle, behavior & cordiality of local people, and historic
& religious places have statistically significant effect on the revisit intention of
the budget traveller. The present study makes use of cross-sectional data with
non-probability sampling method, so it cannot be generalized for the large pop-
ulation. However, the findings of the study will be beneficial to the stakeholders
of tourism industry to make plan and policy.
Conflicts of Interest
The author declares no conflicts of interest regarding the publication of this paper.
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