The Longitude and Latitude of Trading in Tourists

One way of looking at the flow of tourists is to view it as trade flow, analyzing people rather than goods or services. This research applies a gravity model to estimate tourist flows as a function of distance and economics as well as market size. The explanatory variables account for gross domestic product, population, oil price, tourism receipts, exchange rates, distance, skilled labor and regional trade agreements. Findings indicate that educated tourists are more interested in visiting the country and higher wealth also increases their willingness to visit. Moreover, tourists arriving from popular tourist destinations are found to be more eager to visit, although travel distance and higher fuel price negatively impacts their interests. Finally, if the tourist home country has regional trade agreement membership they are less willing to visit, although this is
not affected by the strength of their local currency.