Travel and tourism competitiveness index and the tourism sector development

Abstract

The objective of this study is to test whether Travel and Tourism Competitiveness Index (TTCI) enhances tourism sector development in terms of tourist arrivals, tourism receipts, and the change in both tourist arrivals and tourism receipts. The results found that TTCI main index (Level 1) is positively associated with tourist arrivals but not tourism receipts and the change in tourist arrivals and tourism receipts. Further analysis (Level 2) reveals that while the T&T policy and enabling conditions index is positively associated with tourist arrivals, the infrastructure index is positively associated with tourism receipts. None of the Level 2 indices drives the change in tourist arrivals and tourism receipts. Among results obtained from Level 3 sub-indices, while price competitiveness, air transportation infrastructure, and cultural resources indices have a positive association with tourist arrivals, only ground and port infrastructure have a positive association with tourism receipts. Moreover, while safety and security, human resources and labor market, and air transportation infrastructure sub-indices drive a positive change in tourist arrivals, ICT readiness and natural resources drive a negative change in tourist arrivals and none of the sub-indices drives a change in tourism receipts. The study suggests several practical implications for tourism firms and policymakers.