Assessing the impact of tourist attractions through the integration of causal inference and demand-side economic analysis: A case study of the Sensoria experience museum in Holzminden, Germany

TL;DR

This study combines causal inference and demand-side economic analysis to evaluate the Sensoria museum's impact on local tourism, revealing significant short-term economic benefits in Holzminden, Germany.

Contribution

It introduces a novel integrated approach using difference-in-differences and economic analysis to assess tourism attraction impacts.

Findings

4,691 additional overnight stays in the first year

Approximately 0.56 million EUR increase in gross turnover

Positive effects from city events on tourism demand

Abstract

This research note investigates the impact of the experience museum Sensoria, opened in September 2024 in Holzminden, Germany, on local tourism demand and related direct and indirect effects. To this end, the study employs a novel approach by combining causal inference and demand-side economic analysis. A difference-in-differences approach is employed to quantify the number of additional guest overnight stays in the treatment city; the results are converted into industry-specific expenditures, from which the direct and indirect effects of Sensoria are determined. A positive and significant impact which corresponds to 4,691 additional overnight stays can be detected in the first year of operation of the new tourist attraction, resulting in an additional gross turnover of approximately 0.56 million EUR across the hospitality and retail industries and other services. The direct effects and indirect effects amount to approximately 0.23 and 0.21 million EUR, respectively. However, long-term effects cannot (yet) be determined. Additionally, positive effects from small and large events in the cities studied can be demonstrated. This brief study demonstrates that combining the two approaches mentioned holds promise, yet requires a more in-depth analysis, for which suggestions are also discussed regarding how it could be conducted.