Determinants of demand for international tourist flows to Turkey

This article describes the development and findings of a set of models used to identify the most important of the following selected variables influencing international tourist flows to Turkey: per capita income; relative prices; relative exchange rate; promotional expenditure (the Turkish Government has invested a substantial amount in promoting foreign tourism) and ‘special events’, eg political unrest. The demand for travel was measured both by the number of tourists, and by the total tourist expenditure. Data were obtained from secondary sources, and analysis was by least squares multiple regression. Income, price and exchange rate were found to be important factors but the impact of promotional expenditure was minimal     

The Impact of Mexico's Currency Devaluations on Revenue from U.S. Tourists

U.S. visitors to Mexico increased by 120% between 1970 and 1987. Mexico's booming travel industry has increased nominal revenues from the U.S. by 375% and expenditures per tourist by 116% during this time period. Adjusting these data by a ratio index gives a more vivid picture of the impact of inflation and the peso devaluations over time. Trends in U.S. tourist expenditures to Mexico are shown to parallel exactly the movements of the ratio index bases on relative prices and exchange rates. Our modified regression analyses indicate that both real U.S. disposable income and the ratio index are excellent independent variables for the purpose of predicting number and expenditures of U.S. tourists to Mexico. Further, U.S. tourism numbers and expenditures are elastic with respect to each of these variables. The inconsistency between these results and past estimate may be the result of multucollinearity or autocorrelation in their data.     

Modeling Tourist Flows to Indonesia and Malaysia

Summary

The purpose of this study was to examine the major factors that influence the flow patterns of tourists from six important tourist-generating countries to Indonesia and Malaysia. The primary determinants included in the demand models were income, prices, and time trend. Two models that employed different indicators for the price variable were estimated; one with exchange rates in addition to relative prices, whereas the other included only an exchange rate adjusted-relative price variable. Annual time-series data covering the period 1980 to 1997 were used for estimation. The results generally indicated that the factors provide reasonably good explanations for the demand for Indonesian and Malaysian tourism. The measure of thejoint effect of the changes in exchange rates and relative prices also seems to be a better indicator for the price variable for both destination countries. The study has important marketing implications for the tourism industries in Indonesia and Malaysia.     

Devaluation and US tourism expenditure in Mexico

Studies that investigate the factors affecting US tourism expenditures in Mexico generally regard relative prices in these countries as sensitive determinants. The findings of inelasticity of expenditures of American tourists with respect to prices in the Mexican interior and border in several studies published in the 1980s are debatable. This study evaluates the impact of recent peso devaluations by adjusting 1970–1982 US tourism expenditures by an index that combines the Consumer Price Index in dollars, the CPI in pesos, and the exchange rate. The results here clearly indicate that US expenditures in the interior and on the border are price sensitive and have a strong positive trend reaction to devaluation in both nominal and real terms. Border expenditures clearly exceed interior expenditures and are more sensitive to exchange rate changes than expenditures in interior Mexico.     

Evaluation of demand: US tourists to Aruba

This study examines international tourism demand to Aruba from the United States. This is the first empirical attempt to estimate the income, price, and exchange rate elasticities on Aruban tourism. An accurate estimate, understanding, and forecasting of the demand based on appropriate analytical methods is important for both the government and private investors. Tourism demand estimates from either the linear and the double log linear models reveal that the effects of income dominate those of prices and exchange rates. In general, US tourists appeared to be highly sensitive to the income variable and inelastic with respect to price. The exchange rate variable was not significant.     

Demand elasticities of tourism in Singapore

In 1983 the UN Economic and Social Commission for Asia and the Pacific set up a study to investigate the relationship between prices of tourist goods and tourist inflow in Singapore. The analysis was carried out on a “world” level using amalgamated data for 15 nations, also individually for each of the five major tourist-generating countries. Determinants of demand considered were - income, exchange rates, shopping and hotel prices, and local disturbances. Tourism demand is found to be highly income elastic whereas effects of prices and exchange rate movements vary between countries. Two out of three disturbance factors significantly reduced demand.     

Examining the link between meetings,incentive, exhibitions,and conventions (MICE) and tourism demand using generalized methods of moments (GMM): the case of Singapore

ABSTRACT

This study investigates the impact of meetings, incentive, exhibitions, and conventions (MICE) on tourism demand in Singapore over a period of 10 years (2003–2012). Past studies have shown that MICE matters a great deal to host destinations but researchers have rarely conducted any empirical research to verify the significance of this sector to tourism demand. Our study intends to fill the gap by using Difference and System generalized methods of moments (GMM) estimators for dynamic panel models. Tourism demand is measured by tourist arrivals from the top 30 origins, and the influence of real income of the tourist generating country and real exchange rate is also examined. The GMM results show a significant positive relationship between tourism demand and MICE (with international meetings as proxies). Additionally, the findings reveal that tourism demand growth is significantly positive (negative) with respect to changes in income (relative prices). The coefficient of lagged tourist arrivals indicates a high level of habit persistence and revisiting.     

An empirical analysis of the influence of macroeconomic determinants on World tourism demand

This paper considers three econometric models to determine the relationship between macroeconomic variables and tourism demand. Tourism demand is measured by the inbound visitor's population and also by on-the-ground expenditures. The database is an unbalanced panel of 218 countries over the period 1995–2012. There is evidence that an increase in the World's GDP per capita, a depreciation of the national currency, and a decline of relative domestic prices do help boost tourism demand. The World's GDP per capita is more important when explaining arrivals, but relative prices become more important when we use expenditures as the proxy for tourism demand. We cannot reject the hypothesis of a relative prices unitary elasticity of expenditures. Additionally, we have partitioned our data by income level and by Continent. Results are robust in the first partition, but less robust in the second, although the main conclusions still hold. Finally, we draw policy implications from our findings.     

Pooling international tourism in Western Europe

This paper examines potential improvements in measures of international travel demand elasticities by pooling cross sections and time series of travel receipts. International travel receipts for 18 European countries are pooled and estimates of elasticities with respect to income, exchange rates, relative prices, transport costs, and number of terrorism events are computed. Indexes are developed for the purpose of measuring and aggregating transport costs and terrorism. The results show that the responses to changes in these variables are significantly different across countries. When the countries are constrained to have the same elasticities, but the constants are allowed to be different, it is found that all variables affect tourism in the expected direction and are statistically significant.     

Remodeling international tourism demand: Old theory and new evidence

The purpose of this study is to advance the tourism demand theory by excluding simultaneous effects of exchange rates and prices in empirical models, formulating an alternative pricing modus operandi consistent with recent research in the area, and demonstrating the efficacy of the use of an industrial production index (IPI) as a proxy for income. A panel fully modified ordinary least squares (FMOLS) method is employed to estimate the inbound tourism demand for Turkey. Study findings suggest that the inclusion of exchange rates and prices, as mutually exclusive components, can be misleading; the IPI is not a good proxy for income; and country-specific coefficients need to be analyzed to accurately explain determinants of tourism demand for countries in the panel.     

Economics of tourist's consumption behaviour: Some evidence from Australia

This study analyses the consumption behaviour of international tourists from Australia's four major source markets: New Zealand, UK, USA and Japan. A preliminary analysis of their consumption expenditures reveals intriguing similarities as well as diversities in consumption patterns. These are sought to understand in terms of the utility-maximising framework in which observed differences in prices and incomes play a key role. Based on the neoclassical economic theory of consumer behaviour, models incorporating five major components of tourist consumption – Accommodation, Food, Transport, Shopping and Entertainment- are estimated. Overall, the level of tourist consumption is found to be highly sensitive to incomes but less sensitive to prices. The low price sensitivity suggests tourists perceive the commodities as necessities and may also reflect their captivity at the destination, masking the underlying true price sensitivities. An important dimension underlying these findings is the possible lack of information about the destination leading to sub-optimal consumption choices.     

The Determinants of the Travel Demand on International Tourist Arrivals to Thailand

The purpose of this study is to develop a travel demand model of international tourist arrivals to Thailand and to assess the impact of crisis incidents on Thailand's tourism industry. A 20-year (1987–2006) annual time series data of “number of international tourist arrivals”, “exchange rate”, “promotion budget”, and dummy variables of “Asia financial crisis”, “special promotional campaigns”, “SARS” and “tsunami” were used to develop the travel demand model by performing a multiple regression analysis. The results showed that travel demand of international tourist arrivals to Thailand could be explained by “exchange rate”, “promotion budget”, “Asia financial crisis” and “SARS”.     

Modeling Japanese Tourism Demand for Asian Destinations: A Dynamic AIDS Approach

This paper investigates the expenditure allocation of Japanese international tourism in its five major Asian destinations, China, Hong Kong, Korea, Taiwan, and Thailand. The dynamic of linear approximation the almost ideal demand system is used to determine the long-run equilibrium while the short-run dynamics are represented by an error correction mechanism. The empirical results indicate that the changes in market shares of Japanese outbound tourism are significantly influenced by the changes in tourists' expenditure, rather than the changes in relative tourism prices. The results show that Japan expenditure rises, the market share of Taiwan and Thailand declines, while Korea benefits. In addition, price competitiveness is important for Japanese demand for Korea, but is relatively unimportant for the other destinations.     

Co-Integration and Error Correction Estimation to Forecast Tourism in El Salvador

Using co-integration and error correction models, the objective of this study was to systematically analyze the factors affecting the international tourism demand for El Salvador. The results indicate that the degree of responsiveness of tourist arrivals to El Salvador due to a change in income is elastic and quite differs from country to country. Residents from Honduras appeared to be less responsive to prices than residents from the other origin countries. The dynamic specification of error correction models further confirms the majority of the results obtained in the co-integration relationships. The findings are useful for private developers and public tourism planners in El Salvador. Marketing of specific tourism attributes could enable El Salvador to gain comparative advantage over its competitors.     

Do expectations of future wealth increase outbound tourism? Evidence from Korea

As international tourism is generally considered a luxury good, models to date have shared an understanding that demand is dependent on discretionary income. However, consumption theories predict that a shift in demand can be induced without changes in actual earnings when expectations for future income are adjusted. This presumes demand for international tourism can be influenced by “wealth effects” from real estate and financial assets. This study tested for the wealth effect on Korean outbound travelers during the 20 years between 1989 and 2009. Korea is a unique place to examine in that Korean households possess housing assets and financial assets that are traded actively in markets. The results of this study favored the possibility of a significant wealth effect from housing on outbound travel demand, but not from financial assets. This may be explained by data sensitivity and the relative importance of financial assets in the Korean people's wealth portfolios. Implications and suggestions for future research are provided along with the findings of the study.     

An empirical study of inbound tourism demand in China: a copula-GARCH approach

This paper proposes new models for analyzing the volatility and dependence of monthly tourist arrivals to China applying a copula-GARCH approach. A desegregation of the top six origins of China inbound tourists from the period January 1994 to December 2013 is used in this study. The empirical results show that there is a strong seasonal effect in all cases and ?????? some habit persistence on monthly tourist arrival growth rate for South Korea, Russia, the United States (US), and Malaysia. Second, the volatilities of arrival growth rates to China are impacted significantly by their own short- and long-run effects, except for Russia and South Korea. Only short-run shock affects Russian arrivals while only long-run shocks are affecting South Korea arrivals. Third, the conditional dependence among different source countries is found to be positive and significant, but the conditional dependence for all considered pairs is low. Moreover, there is extreme co-movement (tail dependence) between the six major tourism source countries, suggesting the pairwise of international tourist arrivals shows a related increasing or decreasing pattern during extreme events. Implications are discussed and recommendations provided.     

Determinants of a restaurant average meal price: An application of the hedonic pricing model

This study applies the hedonic pricing model to examine important attributes influencing average customer meal prices in restaurants in Seoul, Korea. Data from 185 restaurants were collected via Internet, phone interviews, site inspections, and ZAGAT Survey, and analyzed using OLS regression. The log-linear model was found to be most suitable for the data, and the proposed hedonic model accounted for as much as 73.7% of the variation in meal prices. The results indicate that food quality and décor were important determinants of restaurants’ average meal prices while service was not. Furthermore, the study found that a restaurant's location within the building (1st floor), the types of cuisine served (Japanese and Italian), parking facilities, private dining settings, franchising, and the number of blogger reviews (e-WOM) have significant effects on restaurants’ average meal prices. The model will provide useful information for restaurateurs in deciding effective menu pricing strategies.     

Moderating effect of work–family conflict on the relationship between leader–member exchange and relative deprivation: Links to behavioral outcomes

This study intends to explore the moderator of work–family conflict on the relationship between leader–member exchange and relative deprivation, and simultaneously examine the impact of relative deprivation on employees' behavior (including effort behavior and service sabotage). Questionnaire survey was conducted in 14 international tourist hotels in Taipei. Of the returned sample, 379 questionnaires are effective. The result indicates that high quality leader–member exchange relationship has negative impact on employees' relative deprivation. Also, relative deprivation has significant impact on effort behavior, and service sabotage. Furthermore, work–family conflict is found to have moderating effect on the relationship between leader–member exchange and relative deprivation. This study fills the research gap in the hospitality literature regarding the effect of work–family conflict on the relationships among leader–member exchange, employees' relative deprivation, and work behaviors. It also sheds the light on work–family conflict literature by extending leader–member exchange theory to leader–employee relationship.     

Modeling hotel room price with geographically weighted regression

Insufficient attention has been given to hotel-room-price attributions and its mechanism in the lodging research field till now. This article examines how site and situation factors differently affect lodging industry and room prices. Comparative analysis of four hedonic price models has been conducted to investigate how these attributions influence room price of Beijing's hotels above star three. Spatial autocorrelation in hotel prices and in hedonic room price equation residuals were analyzed in this research too. Some conclusions can be found and summarized: according to the estimated results, for specific locales, the results expressed in a global model might be inaccurate. The fitting coefficient of geographically weighted regression demonstrates the importance of going beyond the global modeling framework when incorporating geographically weighted regression into hedonic price model. At last, an innovative method for determining the influence of a hotel's attributes at market rates on its’ values, or implicit prices was put forward by the authors.