{ "title": "Determinants of International Tourism", "publication": "IMF Working Papers, May 12, 2014", "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/determinants-of-international-tourism-41549", "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/determinants-of-international-tourism-41549", "overlayPath": "/en/publications/wp/issues/2016/12/31/determinants-of-international-tourism-41549/index.md", "summary": "The paper estimates the impact of macroeconomic supply- and demand-side determinants of tourism, one of the largest components of services exports globally, and the backbone of many smaller economies.", "sections": [ { "heading": "Overview and methodology", "content": "- Paper estimates the impact of macroeconomic supply- and demand-side determinants of tourism.\n- Applies the gravity model to a large dataset comprising the full universe of bilateral tourism flows spanning over a decade.\n- Scope: tourism as one of the largest components of services exports globally and the backbone of many smaller economies.\n- Author: Alexander Culiuc.\n- Date: May 12, 2014.\n- Publication details:\n - Pages: 46\n - Volume: 2014\n - Issue: 082\n - Series: Working Paper No. 2014/082\n - DOI: https://doi.org/10.5089/9781484383032.001\n - Stock No: WPIEA2014082\n - ISBN: 9781484383032\n - ISSN: 1018-5941" }, { "heading": "Key empirical findings", "content": "- Gravity model performance:\n - The gravity model explains tourism flows better than goods trade for equivalent specifications.\n- Income elasticities:\n - The elasticity of tourism with respect to GDP of the origin (importing) country is lower than for goods trade.\n- Exchange rate effects:\n - Tourism flows respond strongly to changes in the destination country’s real exchange rate.\n - Responses occur along both extensive (tourist arrivals) and intensive (duration of stay) margins.\n- OECD vs non-OECD dynamics:\n - OECD countries generally exhibit higher elasticities with respect to economic variables (GDPs of the two economies, real exchange rate, bilateral trade) due to the larger share of business travel.\n- Small-island tourism:\n - Tourism to small islands is less sensitive to changes in the country’s real exchange rate.\n - Tourism to small islands is more susceptible to the introduction/removal of direct flights." }, { "heading": "Policy-relevant implications", "content": "- Exchange rate policy and competitiveness:\n - Changes in the destination country’s real exchange rate can materially affect both tourist arrivals and length of stay, implying macroeconomic and exchange-rate policies can influence tourism receipts.\n- Infrastructure and connectivity:\n - For small islands, policies that affect air connectivity (direct flights) can have outsized effects on tourism flows relative to exchange-rate movements.\n- Differentiated strategies by market type:\n - OECD destinations, with higher business travel share, may see stronger responses to economic cycles and bilateral trade links; policy and marketing strategies should reflect differential demand elasticities across origin markets.\n\nSource: Determinants of International Tourism, IMF Working Papers 2014, 082, Alexander Culiuc, May 12, 2014 (DOI: https://doi.org/10.5089/9781484383032.001).\n\n---\n\n Content in this bundle\n\n- Determinants of International Tourism; by Alexander Culiuc; IMF Working Paper No. 14/82; May 2014\n - Determinants of International Tourism; by Alexander Culiuc; IMF Working Paper No. 14/82; May 2014 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Determinants of International Tourism; by Alexander Culiuc; IMF Working Paper No. 14/82; May 2014 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/determinants-of-international-tourism-41549" } ], "bullets": [ "[Markdown version](/en/publications/wp/issues/2016/12/31/determinants-of-international-tourism-41549/index.md)", "[Structured JSON version](/en/publications/wp/issues/2016/12/31/determinants-of-international-tourism-41549/index.json)", "[Bundle manifest](/en/publications/wp/issues/2016/12/31/determinants-of-international-tourism-41549/bundle-manifest.json)", "Authors: Alexander Culiuc", "Published: May 12, 2014", "Series: IMF Working Papers", "DOI: https://doi.org/10.5089/9781484383032.001", "Paper estimates the impact of macroeconomic supply- and demand-side determinants of tourism.", "Applies the gravity model to a large dataset comprising the full universe of bilateral tourism flows spanning over a decade.", "Scope: tourism as one of the largest components of services exports globally and the backbone of many smaller economies.", "Author: Alexander Culiuc.", "Date: May 12, 2014.", "Publication details:", "Gravity model performance:", "Income elasticities:", "Exchange rate effects:", "OECD vs non-OECD dynamics:", "Small-island tourism:", "Exchange rate policy and competitiveness:", "Infrastructure and connectivity:", "Differentiated strategies by market type:", "**Determinants of International Tourism; 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