Book Description

This paper examines the key determinants of international tourism. The study tests the hypothesis that international tourism is positively related to expenditures on its promotion. International tourism is important to countries as it has a huge economic impact. As many new destinations have emerged with economic growth, international tourism market is becoming more and more competitive. In such a situation, policy makers need to know the key determinants of international tourism in order to promote inbound tourism effectively. Many past studies have shown that economic variables such as price, income, exchange rates are important factors. However, since these macroeconomic variables are not controlled by tourism policy planners, past models did not provide much direct policy guidance for them. Thus, in order to provide further policy implications, this study analyzes the influence of government expenditure and non-economic factors on tourism. The data are from the UNWTO (the number of international tourist, budget of National Tourism Organizations, the number of hotel rooms), the World Bank (relative price level, real GDP per capita), and the UNESCO (the number of World Heritage cultural and natural sites). The results suggest that there is a highly statistically significant positive relationship between international tourism and expenditures on its promotion. The budget of NTO appears to increase both the absolute number of inbound tourists and market share of the country, and it is cost-effective. It is therefore recommended for national governments to allocate larger amount of budget to tourism related programs including marketing activities. Another finding is that there is a strong positive relationship between the number of the World Heritage cultural sites and international tourism. From this result, it seems that marketing activities will be more effective when they feature cultural resources including World Heritage sites. At the same time, it can be said that governments should consider the effective management and preservation of cultural resources to maintain sustainable tourism promotion. In addition, there is a strong positive relationship between the number of hotel rooms and international tourism. This result not only shows that the capacity of accommodations is important in tourism promotion, but also suggests that the role of private sector is essential to promote international tourism. Thus, close cooperation between governments and tourism industries is recommended.