Modelling dependence between tourism demand and exchange rate using the copula-based GARCH model

This paper investigates dependence between tourism demand and exchange rate, using the case of China, and from a new perspective by using copula–GARCH models. The empirical results show that the volatility of exchange rate is not a determinant factor in fluctuation of China's inbound tourism demand from the countries being studied. Furthermore, only Russia exhibits risk-adverse behaviour with extreme SUR depreciation, or CNY appreciation associated with an extreme decline in arrivals. Third, introducing the tail dependence and dynamic dependence between growth rates of tourism demand and exchange rate add much to the explanatory ability of the model. The findings of this study have important implications for destination manager and travel agent as it helps to understand the impact of exchange rates on China inbound tourism demand and provide a complementary academic approach on evaluating the role of exchange rates in the international tourism demand model.     

The determinants of inbound tourism to Malaysia: a panel data analysis

Malaysia has experienced a significant increase in tourist arrivals over the past 10 years. The challenge is to sustain this growth and therefore it is important to understand the factors influencing inbound tourism to Malaysia. This paper investigates the economic and non-economic determinants of international tourist flows to Malaysia using the generalized method of moment. The annual panel data set includes the number of arrivals from 33 countries during the period 2000–2012, and the number of possible explanatory variables. It is found that habit persistence (word of mouth), income, hotel room and political stability have a positive impact on tourism demand for Malaysia. Also, results indicate that the estimated coefficients of substitute tourism price in the model are negative. This implies that the five alternative destinations are complementary destinations to Malaysia. In addition, the dummy variable for Visit Malaysia Year in 2007 and severe acute respiratory syndrome in 2003 had positive and negative impacts on tourism demand for Malaysia, respectively.     

Congestion affecting the dynamic of tourism demand: evidence from the most popular destinations in Spain

In this study, we propose a dynamic econometric model for tourism demand which takes into account the implications of the Tourism Area Life Cycle (TALC) theory on tourism demand. Unlike other dynamic models, in our specification the effect of the lagged demand on the current tourism demand is not constant, but dependent on congestion. We estimate the model using disaggregated data from the most visited Spanish municipalities for the period 2006–2015. Two panel data estimations are carried out: one with the coastal tourist resorts and the other one with the inland municipalities. The results show that tourism congestion reduces the positive previous tourist effect on current arrivals, suggesting that increasing congestion could worsen the attraction of a tourist destination. Congestion is more negatively perceived in inland destinations than coastal ones. Finally, a strong persistence in tourism demand for coastal destinations is shown.     

A case study: The impact of low-cost carriers on inbound tourism of Saudi Arabia

This study investigates the impact of low-cost carriers (LCCs) on Saudi Arabia's tourism demand. It also provides an understanding of the relationship between air transport development and tourism development in the Gulf region. The Box–Jenkins SARIMA-X models were employed to model and forecast international tourist arrivals to Saudi Arabia, using monthly international tourist arrivals to Saudi Arabia from July 2010 to December 2015. The forecasting models were significantly accurate, with lower values of MAPE, MAP, and RMSE. The findings suggest that an increase in airline capacity, religious travel, and airline competition are associated with the increasing international tourist arrivals to Saudi Arabia. This also indicates that there is a positive relationship between air transport development and tourism development. Further aviation liberalisation in the Gulf region is discussed to give opportunities for the region's LCCs to increase their share of the increasing air travel demand, thereby enhancing tourism development.     

Tourism demand: a panel data approach

This paper estimates the coefficients of the determinants of international tourism demand for the period 1995–2014 in the USA using the gravity framework. The analysis is based on a panel dataset of tourist arrivals among 14 countries using autoregressive distributed lag methods. The results show real gross domestic product, consumer price index, real exchange rate and certain specific events have a significant impact on international tourism demand. The income elasticity suggests that tourism is non-luxury goods, and prices and real exchange rate have negative relation to tourist arrivals. We also find that tourism transport infrastructure is a significant determinant of tourist arrivals into USA. This implies that infrastructure to reinforce taste formation is important to attract more international tourists to USA. In addition, results also suggest implications for public and private tourism authorities.     

Modelling the volatility of international visitor arrivals to New Zealand

International visitor arrivals are considered to be a major source of foreign exchange, tourism-related employment and other tourism-related activities. This study used SARIMAX/(E)GARCH volatility models to forecast visitor arrivals by air transport to New Zealand from its eight key tourist source markets (Australia, Canada, China, Japan, South Korea, Germany, the United Kingdom (UK) and the United States (US)) and control macroeconomic factors together with global and regional structural changes. The empirical models reveal that the macroeconomic factors contributed at various levels to different markets, and the models we provided made accurate and reliable forecasts for visitor arrivals by air transport from all studied markets. The results from the markets for Germany, Japan, South Korea and the UK showed that significantly negative tourism demand shocks increased the volatility of tourism arrivals, more than positive tourism demand shocks of equal magnitude. Accordingly, the findings of this study will allow policy-makers in the New Zealand tourism sector and other stakeholders (e.g. airline management) to better understand the impacts on the volatility of visitor arrivals to New Zealand.     

Estimating Tourist Demand through Cointegration Analysis: Swedish Data

The purpose of this paper is to use co-integration analysis to estimate the long-run relationship between monthly tourist flows to Sweden from American, European and Scandinavian countries. Also, the factors that influence arrivals, such as income, price, exchange rate, the Chernobyl nuclear accident and the 1991 Gulf War are estimated. An econometric model approach of cointegration analysis is adopted to estimate the effect of the above factors on the number of visitors to Sweden and the area No.6 in Sweden (SW:6). Monthly time-series data for the period 1980-1998 were used. The estimated model does not indicate any statistically significant effect of the Chernobyl nuclear accident, or the 1991 Gulf War on international tourism demand. On the other hand, the estimated model does indicate statistically significant effect of income, exchange rate and the consumer price index (CPI) on international tourism demand. The estimation and diagnostic testing strategy supports the specification of the model.     

Taiwan's international tourism: a time series analysis with calendar effects and joint outlier adjustments

In this paper, we examine monthly tourist arrivals from Japan, Hong Kong and the USA between January 1971 and December 2008. Our purpose is to find events or variables that affect Taiwan's international tourism. We find that the Chinese New Year has a positive effect on tourist arrivals from Hong Kong, but negative effects for other countries. Through outlier detection, we obtain a better understanding of the effects of non‐recurring events that have impacted Taiwan's international tourism. Using transfer function model with automatic outlier detection and adjustment, we find that the exchange rate influences tourist arrivals from Japan and Hong Kong. Copyright © 2010 John Wiley & Sons, Ltd.     

Modelling international tourism demand and volatility in small island tourism economies

Small island tourism economies (SITEs) vary in their size, land area, location, narrow resource bases, economic development, overwhelming reliance on tourism and consistent inflow of foreign direct investment for economic growth. Small island tourism economics differ in their ethnic diversity, political systems, economic and environmental vulnerability, ecological fragility and the risks facing investors. Owing to natural disasters, ethnic conflicts, crime and the threat of global terrorism, there have been dramatic changes in the arrivals of international tourists to SITEs. These variations in international tourism demand to SITEs, particularly the conditional variance (or volatility) in international tourist arrivals, have not previously been analysed in the tourism research literature. An examination of the conditional volatility of international tourist arrivals is essential for policy analysis and marketing purposes. This paper models the conditional mean and conditional variance of the logarithm of monthly international tourist arrivals and the growth rate (or log‐difference) in the monthly international tourist arrivals for six SITEs, namely Barbados, Cyprus, Dominica, Fiji, Maldives and Seychelles. Diagnostic checks of the regularity conditions of the logarithm of monthly international tourist arrivals and their growth rates suggest that the estimated univariate models of trends and volatility are statistically adequate. Therefore, the estimated models are appropriate for purposes of public and private sector management of tourism. Copyright © 2005 John Wiley & Sons, Ltd.     

Gravitational force exerted by Brazilian tourist destinations on foreign air travelers

This article analyses the context of international tourist flows by air and tourism in Brazil, by applying the principles of the gravity model. The study includes 13 Brazilian international airports that served 108 origin-destination pairs, which accounted for 80.14% of the total tourist flows by air in 2012. In the statistical analysis applied, the dependent variable Ft is the tourist flow between the country of origin and the Brazilian state of destination. To approximate an explanatory equation, we formulated a linear function that was able to support, in 31.7% of the cases, the dependence of the international tourist flows with the variables considered in the linear regression performed. The conclusion is that the assumptions considered in this study only partially explain the gravitational force exerted by Brazilian tourist destinations, so there is a need to refine the model by including other variables that can influence the flows by air of international tourists.     

Aviation’s inclusion in international climate policy regimes: Implications for the Caribbean tourism industry

Nations with tourism dependant economies are becoming increasingly concerned about the inclusion of aviation in greenhouse gas mitigation policy for international bunker fuels and more recently adaptation policy proposals. The central concern is that such policies will increase the cost of traveling by air, therefore reducing visitor arrivals to long-haul, tourism-dependent destinations, often small island developing states. This study used a tourism arrivals model to examine the implications of currently proposed climate policies for the world’s most tourism dependant region – the Caribbean. Results indicate that under current proposals for both mitigation and adaptation focused climate policy, reductions in tourist arrivals from the major markets of Europe and North America would be negligible versus business as usual growth projections Only under the most stringent mitigation policy scenario. Which may portend a post-2020 policy regime, is a significant decrease in tourist arrivals predicted. Of the climate policies assessed, the adaptation policy had the potential to provide greater economic benefits to the Caribbean region.     

Does Tourism Really Lead to Peace? A Global View

There has been much rhetoric about tourism's role in promoting world peace. This research takes a global perspective examining the relationship between peace and tourism across 111 different countries using a panel data model using two indicators, international tourist arrivals and the Institute for Economics and Peace's Global Peace Index. The results indicate that tourism is the beneficiary of peace rather than grounds for peace. Peace is most important to tourism in medium income destinations but still important for high income nations. No relationship exists between peace and tourism arrivals for low income nations. Copyright © 2015 John Wiley & Sons, Ltd.     

Are tourist arrivals stationary? Evidence from BRIC countries

In this study, we attempted to analyse whether the shocks to tourist arrivals in BRIC countries are temporary or permanent, by analysing the stationary characteristics of the data in panel framework. We found that, for Brazil, Russia and India, tourist arrivals are stationary process, whereas for China it is non-stationary process. This implies that shocks to the tourism sector in Brazil, Russia and India have only temporary effect, whereas the shocks to China's tourism sector have permanent effects.     

Tourism in the Middle East: Conflicts,Crises and Economic Diversification,Some Critical Issues

This paper briefly examines tourism activity over a 60‐year period in the UNWTO Middle East region together with Israel and Iran. The region has been subject to political turmoil over that period, and its tourist arrivals have not fully capitalized on the potential that the region holds. The region has a wealth of heritage, a climate conducive to tourism and a range of leisure resources that should provide a comparative and competitive advantage to its tourism industry. This paper examines the vulnerability of tourism in the region as countries try to diversify their economies away from energy dependence. Copyright © 2012 John Wiley & Sons, Ltd.     

Sustainable Tourism or Sustainable Development? Financial Crisis,Ecotourism, and the 'Amazing Thailand' Campaign

Although the issues of sustainable tourism and sustainable development are receiving increasing attention from tourists, government planners and scholars, few studies have examined their overlap, tensions and complex linkages in practice. In southern Thailand, the sustainability of tourism, defined as the ongoing growth and survival of the tourism industry, has compromised the ecological sustainability of key tourism destinations sites. The recent financial crisis has forced the Thai government to sacrifice long-term sustainability for the sake of quick, and desperately needed foreign exchange. The 'Amazing Thailand' promotional campaign, which aims to attract 17 million tourists over 1998 and 1999, promises to exacerbate further the environmental degradation of tourism destinations in southern Thailand by pushing for enhanced tourist numbers. Ironically, by changing the composition of tourist arrivals (and in particular, attracting more European and North American tourists) the currency devaluations associated with the Asian financial crisis may simultaneously boost demand for nature-based tourist activities in southern Thailand while also adding stress to ecologically deteriorating destinations.     

Impact of economic policy on international tourism demand: the case of Abenomics

Since the 2008 global financial crisis and resulting recession, many countries have been following unconventional monetary policies. Little information is known on how these policies may influence tourism demand. This study starts to fill this gap by investigating the impact of the Japanese economic policy known as Abenomics on South Koreans’ travel to Japan, the largest inbound market for Japan. Per capita gross domestic product, relative prices, and exchange rates are significant determinants of Japanese inbound tourism. As these variables have been influenced by Abenomics, one can infer that Abenomics is associated with a significant increase in tourist arrivals from South Korea. Findings highlight the importance of government economic policy in stimulating international tourism demand through its impact on the economy.     

The effect of LCCs operations and scheduled services deregulation on air charter business in Japan

Recent aviation deregulation is producing structural changes within leisure industries in many parts of the world. This paper reviews the development of low cost carriers (LCCs) and assesses its effects on both of domestic and international charter markets in Japan since 2007. Furthermore, this paper analyzes the effect of scheduled services deregulation on international tourism to Japanese regional areas in relation to charter services. The results suggest that in the domestic market, LCC operations have seldom impacted charter traffic due to the differences in target markets and routes. In the international market, LCCs launched scheduled services to Japan but mainly on high demand routes. The deregulation of scheduled services led to a passenger shift from charters to newly scheduled flights and a concentration of tourist arrivals in regional centres. It also led to a decline in international tourist arrivals in some remote destinations. This paper indicates a current trend in which charter business is still an important sector in aviation and leisure markets.     

Is there growth impact of tourism? Evidence from selected small island states

This study investigates the growth impact of international tourist arrivals on carbon emissions in selected small island states via Environmental Kuznets Curve (EKC) hypothesis. The study employed a panel-based multivariate model for seven small islands between the periods of 1995 and 2013 to evaluate the long-run equilibrium relationships between international tourism and carbon emissions through the channels of energy consumption and economic growth. Findings from the panel cointegration results show the existence of a long-run equilibrium relationship between the variables of interest. International tourist arrivals have a negatively significant impact on carbon dioxide emissions in the long run. Thus, we infer that the law of diminishing marginal returns with regard to tourism-induced EKC hypothesis holds in the case of small island states.     

Terrorism and tourism demand: a case study of Lebanon,Turkey and Israel

Using a seemingly unrelated regression (SUR) model, this paper examines the impact of domestic and transnational terrorism on tourism demand (as measured by visitor arrivals) to Lebanon, Turkey and Israel. The distinguishing feature of this paper is that we use a dynamic framework that takes into account (i) the intensity of terrorism and (ii) the associated spillover effects. The empirical results, based on monthly data from 1995 to 2007, reveal that terrorism in one country affects visitor arrivals not only to that country but also to other countries. We find that tourists view Lebanese and Turkish tourism markets as substitutes. Terrorism in Israel, of all types (i.e. domestic or transnational) and intensities, affects visitor arrivals to Lebanon and Turkey. In overall terms, terrorism has a much larger negative impact on visitor arrivals to Lebanon.     

Is the tourism‐led growth hypothesis valid for malaysia? a view from disaggregated tourism markets

This research note attempts to re‐investigate the validity of tourism‐led growth hypothesis for Malaysia based on the data set of 12 different tourism markets from January 1995 to February 2009. The error‐correction modelling‐based cointegration test shows that economic growth and international tourist arrivals are cointegrated for all tourism markets. Nevertheless, the Granger causality results demonstrate that not all international tourism markets Granger‐cause economic growth. Therefore, identification of potential tourism markets is vital for implementing effective tourism marketing policies. Copyright © 2010 John Wiley & Sons, Ltd.