Inbound tourism demand elasticities of MENA countries: the role of internal and external conflicts

Abstract

Purpose In this paper, the authors investigate the inbound tourism demand elasticities of the Middle East and North African (MENA) countries. The authors emphasize the role of external and internal conflicts, world gross domestic product and relative prices over the period 1995–2017. Design/methodology/approach This study applies the heterogeneous panel data estimators based on the fully modified-OLS (FM-OLS), dynamic-OLS (DOLS) and the recently developed method of moments quantile regression (MMQR). Findings The empirical results indicate that the effect of external and internal conflicts on inbound tourism demand is negative and inelastic with external conflict having a stronger effect. The effect of both classifications of conflicts diminishes as the market share of the tourist destination increases. In addition, the role of the world GDP on tourism demand is positive and elastic, suggesting that tourism is a luxury good while an increase in relative prices diminishes inbound tourism demand. Originality/value The paper, therefore, concludes that if policy measures are not put in place to curtail incidences of conflicts, economic growth in these countries may suffer setbacks. This by implications could affect the attainment of the sustainable development goals (SDGs) targets.