Sun,sand and September 11: a model of tourism demand for the Maldives

Tourism is a key source of income for many small island economies, and so it is important to understand its determinants in such countries. We estimate a tourism demand model for the Maldives’ five main source markets and find that, in addition to the usual foreign income and own price variables, the cost of travel and of visiting alternative destinations (often missing from studies of this nature) almost always have a significant role. In addition, the country’s own marketing efforts prove effective at influencing demand. Finally, we find evidence the War on Terror has persistently depressed demand from some markets.