Modelling Structural Relations for Tourism Demand: the Central European Cases

Abstract

This application study concentrates on causal links, directed from economic parameters to internal Czech and Slovak tourism for both, short- as well as long-term changes in time series. As tourism forms a fundamental part of the service industry with many social and environmental connections, the structural equation modelling (SEM) methodology, i.e. simultaneous equations covering the number of fundamental and derived variables, is used. Taking into account the market specifics with relative close history, the identical models for countries are selected, enabling a precise mutual comparison. The data on a ratio of non-residents and residents, together with nights spent and other parameters, are examined for first as well as seasonal differencing. For instance, the destination living cost, relative wages and salaries, the balance of payments, labour productivity, trade openness and harmonized unemployment as exogenous variables, are introduced. Covering short and long horizons, labour productivity is a fundamental parameter in the Czech Republic. Significant relations proved differently between countries presented by trade openness as a factor of the global economy. The members of destination management or other authorities can appreciate the results, concentrated especially on various accommodation establishments and hospitality.

Keywords

• structural equation modelling
• causality
• simultaneous equations
• tourism