Factors That Influence Domestic Tourism Demand: Evidence from Armenia.

Abstract

ABSTRACT. Armenia has great opportunities and resources for tourism development. In 2021, the number of domestic tourists in Armenia was 1595826, an increase of 52.6% compared to 2020. In 2022, the number of domestic tourists was higher than in previous years - 1929940. The article evaluates the factors which influence domestic tourism demand with the use of ordinary and weighted least squares regression models. The main variables discussed in the models are: real GDP growth rate, consumer price index, average cost of tour packages from Armenia to other countries that can be considered as an alternative to domestic tourism, and dummy variables. The time series are based on quarterly data from 2005-2021. According to the analysis results, 1% increase in GDP will lead to a 0.22% increase in the number of domestic tourists, 1% increase in prices will lead to a decrease in the number of domestic tourists by about 0.12%, and 1% increase in foreign tour package prices will increase the number of domestic tourists by about 0.14%. The article also presents some suggestions for domestic tourism development in Armenia. The results may be useful for similar studies, as well as for state and private sectors conducting forecasts, planning, etc.