Global Estimation of the Elasticity of “International Tourist Arrivals/Income from Tourism”

Abstract

The prevailing discourse relates the widespread belief that an increase in the volume of tourist arrivals is a clear sign of success for tourism destination managers. According to a logarithmic regression function that estimates the inverse demand-income elasticity, it has been found that tourism flows are not the best measure to use in assessing the contribution of tourism to economic growth. Rather, the volume of income that is generated from these tourists should be considered. Furthermore, based on an analysis of correlations, it was found that the territories having the greatest efficiency in generating income from tourism are more competitive in terms of tourism. The results obtained may contribute to changing the approach used by both private and public bodies, and they may also help them to re-focus their business planning and policymaking so as to emphasize an increase in income level and not in volume of tourists.