Modelling inbound international tourism demand in small Pacific Island countries

Abstract

In this study, we estimate inbound international tourism demand models at the individual source market-destination and overall destination levels for Fiji, Cook Islands, Tonga and Vanuatu from 2002Q1 to 2016Q2 and Samoa from 2002Q4 to 2015Q3. Tourism demand is measured by visitor arrivals, tourism prices, the source country's real GDP, tourism prices in substitute destinations, seasonality and structural breaks, all of which are considered plausible determinants. The models are estimated using the ARDL-bounds approach, structural breaks are identified using the Bai and Perron break test, and seasonality is tested using the US Census Bureau's X-13 ARIMA-SEATS methodology. The study is important because it presents new evidence on price, income, and substitute price sensitivity, word of mouth, seasonality, and structural-breaks effects in Pacific island destinations.

Modelling inbound international tourism demand in Australia: Lessons from the pandemics

“…Non‐economic factors have been explored in the literature to include how external shockwaves may affect tourism demand. These include seasonality behaviour, political unrest, wars, terrorism, diseases and tourism‐related policies (Sio‐Chong and So ( 2020 ), Ridderstaat et al ( 2014 ); Kumar et al, 2020 ).…”

“…Following the useful and distinct index on economic policy uncertainty (EPU) postulated by Baker et al ( 2016 ) the paper explores how during uncertainty travel plans get significantly affected. Kumar et al ( 2020 ) observe that tourism demand is affected not only by prices and income but factors like economic instability, disasters and diseases that also affect tourism. So, the paper adds to the on going debate on how both economic and non‐economic factors are crucial drivers of tourism demand.…”

Impact of Investment in Tourism Infrastructure Development on Attracting International Visitors: A Nonlinear Panel ARDL Approach Using Vietnam’s Data

“…Song et al (2003, p. 365) state that "one of the advantages of the general ARDL is that a modern econometric technique, known as error correction, can be readily incorporated into the modeling process". Given these advantages, the ARDL estimation technique has been widely used in recent studies (Song et al 2003;Lee 2011;Otero-Gómez et al 2015;Lin et al 2015;Shafiullah et al 2018;Kumar et al 2020).…”

A theoretical analysis of preference matching by tourists and destination choice

“…Rivera and Tuazon (2019) use an empirical framework and point out that tourism can be designed to be pro-poor and thereby help improve the lives of low-income people. Kumar et al (2020) use the so called ARDL bounds approach and empirically demonstrate that income has a non-trivial impact on the demand for international tourism in small Pacific island nations such as the Cook Islands, Fiji, Tonga, and Vanuatu. In addition to the studies that we have just discussed, the work of Crouch (1995), Kim et al (2011), Chang and Chen (2013), and Choudhry and Lew (2013) clearly shows that there exists a positive relationship between income and tourism.…”