Tourism Demand Model : determinants of Thailand's international tourist receipt

Abstract

To identify and examine some major determinants affecting the demand for Thailand's international tourist receipts and also to examine the situation and statistics of Thailand tourism industry. This study is restricted to only international tourist not domestic. The annually time-series data of 1978 to 1999 from secondary sources is employed. Econometric models were constructed and estimated on five selected countries of tourists' origin, in order to measure the response of demand to the change in determinants. The empirical results show that income variable is statistically significant and highly elastic in two cases with elasticity of 1.57 and 1.94. the relative price is statistically significant in two cases with elasticity of -0.81 and -1.02, while the exchange rate variable is found to be significant in only one case with elasticity of 0.79. The lagged income variable is also found to be significant and highly elastic in three cases with elasticity range from -1.21 to 2.89. The variable of national tourism office marketing expenditures is found to be significant in four out of five cases with elasticity range from 0.27 to 0.46. The dummy variable on special marketing program (the Visit Thailand Year 1987) is insignificant in all cases, while the dummy variable on the world political crisis (the Persian Gulf War) is found to be significant in only one case with unexpected sign of coefficient. Multicollinearity were detected and is the biggest problem of the study, the results should be better without such problem.