Determinants of tourism flows in Small Island Developing States (SIDS)

Abstract

This paper analyses factors affecting arrivals of international tourists into countries denoted as Small Island Developing States (SIDS). These destinations are paired to all potential countries of origin for which the data was available in the UNWTO database for at least one year over the studied period 1995-2014. The dynamic panel data regression techniques within the gravity approach scheme are applied to identify the significance and importance of different factors of international tourist arrivals into SIDS. These factors are subsequently compared in terms of their significance and relevance across the three geographic sub-regions of SIDS. The results show that tourism flows into SIDS are highly persistent. They depend on the accessibility of destinations, tourism infrastructure development, political stability, and levels of economic development of destinations as well as countries of origin. Exchange rate, weather, and language and historical (colonial) links also play significant roles. The regional comparison reveals that the significance and importance of these factors among the three sub- regions vary only modestly.

Keywords

• dynamic panel data regression
• gravity model
• international tourist arrivals
• islands
• small island developing states (sids)
• tourism flows