14th Global Forum on Tourism Statistics

Venice, Italy | 24 November 2016

Presented by

Emmanuel A. San Andres, Analyst

APEC Policy Support Unit

Copyright © 2015 APEC Secretariat

Tourist Arrivals in the

APEC Region

Outline

• About APEC • Tourist arrivals in the APEC region • Analytical framework • Determinants of tourist arrivals • Impacts of tourist arrivals • Policy implications

APEC Member Economies

APEC Official Observers • Association of South East Asian Nations (ASEAN) Secretariat • Pacific Economic Cooperation Council (PECC) • Pacific Islands Forum (PIF)

APEC Policy Support Unit

• APEC Policy Support Unit (PSU) is the research and analysis arm of APEC. • Conducts independent research in line with APEC’s core priorities.

• Mission: To provide rigorous research & analysis needed to improve the quality of APEC's deliberations and decisions. • Provide APEC members and fora with professional & tailor-made

research, analysis, policy support & evidence-based policy suggestions.

• Five focus areas: • Trade & Investment Liberalization & Facilitation • Structural Reform • Connectivity including Supply Chain Connectivity & Global Supply Chains • Economic and Financial Analysis • Sustainable Economic Development

APEC’s Significance

Source: StatsAPEC, Key Indicators Database.

APEC tourist arrivals, 1995-2013

Economic Development

- Economic growth

- Inclusive growth

- Trade/investment

Pull factors

- Connectivity

- Access

- Safety

- Tourist attractions

- Cost/exchange rate

Tourism Performance

- Arrivals

- Growth

Push factors

- Income

- Macroeconomic factors

- Awareness

Analytical framework

Determinants of tourist arrivals

Push Factors Pull Factors

Exogenous Factors

Origin GDP growth Origin currency Origin population growth Origin/year factors

Destination GDP Bilateral trade Destination currency Distance Shared border Common language History Destination/year factors

Endogenous Factors

Awareness Origin passport power

Visa requirements Connectivity Safety Attractions

Determinants of tourist arrivals

Coefficient Significance

Exogenous factors

Destination GDP 0.218

Origin GDP 0.717 ***

Bilateral exports 0.044 ***

Bilateral imports 0.018 *

Destination REER 0.001

Origin REER 0.004 ***

Distance -0.0001 ***

Common border+ 1.958 ***

Common language+ 0.853 ***

Common colony in 1945+ 3.353 ***

Origin population -0.470

Determinants of tourist arrivals

MAIN FINDINGS: EXOGENOUS FACTORS

• Positive macroeconomic conditions contribute positively to tourism performance • GDP growth in origin and destination • Bilateral trade growth

• Real exchange rate appreciation in origin economy increases tourism from that economy

• Geographic distance has negative impact (but…); having a common land border has a strong positive impact

• Common language and recent shared history (e.g., colonization, same country) has a strong positive impact

Determinants of tourist arrivals

Coefficient Significance

Endogenous factors

Visa required+ -0.514 *** Origin passport power 0.015 * Direct flight+ 0.346 *** Flight time -0.001 ** Connectedness 0.014 *** Terrorism -0.0003 Crime -0.008 * Search popularity (economy) -0.005 *** UN Heritage Sites 0.006

Determinants of tourist arrivals

MAIN FINDINGS: ENDOGENOUS FACTORS

• Visa requirements have the strongest impact • Imposing visas alone reduces bilateral tourist arrivals growth by

0.5% • Visa facilitation measures like e-visas will help, but high costs

can negate positive effects of facilitation

• Air connectivity has the next strongest impact • Having a direct flight can increase bilateral tourist arrivals by

0.3% • Connectivity offsets effects of distance

• Ensuring safety and developing attractions can also contribute to tourism arrivals

• Negative awareness from news events seem to dominate

Impacts of tourist arrivals

Elasticity of macro indicators wrt tourist arrivals

Impacts of tourism arrivals

Dependent variable

Explanatory variables Number of extremely poor

Inclusive growth rate

Tourist arrivals -0.124* 0.001

GDP -0.909*** -0.291

Population 5.845*** -0.060

Inequality 0.096*** -0.036***

N 958 1,051

Prob > chi2; F 0.000 0.012

Marginal effects on poverty reduction and inclusive growth

Policy implications

• Travel facilitation and air connectivity are the two most important policies for tourism development • Visa requirements, costs, and uncertainty are a first hurdle to visiting

destinations • If visas need to be imposed, facilitating applications and lowering

costs will contribute to tourism growth • Measures improving air connectivity and giving tourists more travel

options (e.g., open skies, airline competition) can contribute to growth

• Tourist safety; site development; image management • Enhance inclusiveness of tourism industry

• Access to training and skills development • Access to capital • Access to social protection and insurance

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