CHAID algorithm as an appropriate analytical method for tourism market segmentation

Abstract

Studies of the segmentation of the tourism markets have traditionally been undertaken by regression methods. The need to have a significant number of segments and qualifying variables has led, however, to the use of other procedures of multivariate analysis. CHAID (Chi-square Automatic Interaction Detection), which is more complex than other multivariate techniques, has rarely been used. This study applies the traditional methods of multivariate analysis and CHAID to the same population of tourists visiting a particular destination to compare the quality of the information obtained on tourism market segmentation. The results suggest that the analysis based on CHAID matches the nature of the problem studied better than those provided by discriminant analysis.

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