Tourist Arrivals in the APEC Region 14 th Global Forum on Tourism Statistics Venice, Italy 24 November 2016 Presented by Emmanuel A. San Andres, Analyst APEC Policy Support Unit Copyright 2015 APEC Secretariat
Outline About APEC Tourist arrivals in the APEC region Analytical framework Determinants of tourist arrivals Impacts of tourist arrivals Policy implications
APEC Member Economies APEC Official Observers Association of South East Asian Nations (ASEAN) Secretariat Pacific Economic Cooperation Council (PECC) Pacific Islands Forum (PIF)
APEC Policy Support Unit APEC Policy Support Unit (PSU) is the research and analysis arm of APEC. Conducts independent research in line with APEC s core priorities. Mission: To provide rigorous research & analysis needed to improve the quality of APEC's deliberations and decisions. Provide APEC members and fora with professional & tailor-made research, analysis, policy support & evidence-based policy suggestions. Five focus areas: Trade & Investment Liberalization & Facilitation Structural Reform Connectivity including Supply Chain Connectivity & Global Supply Chains Economic and Financial Analysis Sustainable Economic Development
APEC s Significance Source: StatsAPEC, Key Indicators Database.
APEC tourist arrivals, 1995-2013
Analytical framework Pull factors - Connectivity - Access - Safety - Tourist attractions - Cost/exchange rate Tourism Performance - Arrivals - Growth Economic Development - Economic growth - Inclusive growth - Trade/investment Push factors - Income - Macroeconomic factors - Awareness
Determinants of tourist arrivals Exogenous Factors Endogenous Factors Push Factors Origin GDP growth Origin currency Origin population growth Origin/year factors Awareness Origin passport power Pull Factors Destination GDP Bilateral trade Destination currency Distance Shared border Common language History Destination/year factors Visa requirements Connectivity Safety Attractions
Determinants of tourist arrivals Coefficient Significance Exogenous factors Destination GDP 0.218 Origin GDP 0.717 *** Bilateral exports 0.044 *** Bilateral imports 0.018 * Destination REER 0.001 Origin REER 0.004 *** Distance -0.0001 *** Common border + 1.958 *** Common language + 0.853 *** Common colony in 1945 + 3.353 *** Origin population -0.470
Determinants of tourist arrivals MAIN FINDINGS: EXOGENOUS FACTORS Positive macroeconomic conditions contribute positively to tourism performance GDP growth in origin and destination Bilateral trade growth Real exchange rate appreciation in origin economy increases tourism from that economy Geographic distance has negative impact (but ); having a common land border has a strong positive impact Common language and recent shared history (e.g., colonization, same country) has a strong positive impact
Determinants of tourist arrivals Coefficient Significance Endogenous factors Visa required+ -0.514 *** Origin passport power 0.015 * Direct flight+ 0.346 *** Flight time -0.001 ** Connectedness 0.014 *** Terrorism -0.0003 Crime -0.008 * Search popularity (economy) -0.005 *** UN Heritage Sites 0.006
Determinants of tourist arrivals MAIN FINDINGS: ENDOGENOUS FACTORS Visa requirements have the strongest impact Imposing visas alone reduces bilateral tourist arrivals growth by 0.5% Visa facilitation measures like e-visas will help, but high costs can negate positive effects of facilitation Air connectivity has the next strongest impact Having a direct flight can increase bilateral tourist arrivals by 0.3% Connectivity offsets effects of distance Ensuring safety and developing attractions can also contribute to tourism arrivals Negative awareness from news events seem to dominate
Impacts of tourist arrivals Elasticity of macro indicators wrt tourist arrivals
Impacts of tourism arrivals Marginal effects on poverty reduction and inclusive growth Explanatory variables Dependent variable Number of extremely poor Inclusive growth rate Tourist arrivals -0.124* 0.001 GDP -0.909*** -0.291 Population 5.845*** -0.060 Inequality 0.096*** -0.036*** N 958 1,051 Prob > chi2; F 0.000 0.012
Policy implications Travel facilitation and air connectivity are the two most important policies for tourism development Visa requirements, costs, and uncertainty are a first hurdle to visiting destinations If visas need to be imposed, facilitating applications and lowering costs will contribute to tourism growth Measures improving air connectivity and giving tourists more travel options (e.g., open skies, airline competition) can contribute to growth Tourist safety; site development; image management Enhance inclusiveness of tourism industry Access to training and skills development Access to capital Access to social protection and insurance
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