Abstract
This study examines the determinants of international travel flows in inclusive tours based on data-sets of outbound travel from Britain. The study focuses on institutional difference and air transport deregulation as such determinants. The regression analysis shows that institutional difference represents a positive impact on the travel flows in inclusive tours. This result implies that travelers may internalize and reduce transaction costs related to visiting institutionally different and unfamiliar countries by joining inclusive tours. The analysis also demonstrates that the travel flows in individual tours may be affected by air transport deregulation, while such flows in inclusive tours may not be.
