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Revenue determinants in tourism market


Mohebi, Mohammad and Abdul Rahim, Khalid (2010) Revenue determinants in tourism market. American Journal of Applied Sciences, 7 (12). pp. 1593-1598. ISSN 1546-9239; ESSN: 1554-3641


Malaysian tourism industry has been growing considerably in recent years. The number of tourist arrivals has grown by 25% during 2006-2008. In comparison with Thailand and Singapore, Malaysia has more tourist arrivals but it has earned less income. The purpose of the study was to determine the major factors affecting inbound tourism expenditure in Malaysia. Approach: A panel data set for 14 origin countries, from 1998-2009 has been used to estimate tourism expenditure using gravity model. Results: The results of the expenditure model suggest that the Malaysian price index and distance have negative impact while per capita income of origin countries and Malaysian per capita income have positive impact on tourism expenditure. Conclusion: The own price elasticity indicates in short run that the tourism expenditure was inelastic to price. But in the long run tourism expenditure in Malaysia was elastic and potential tourists are more sensitive to the price changes. The lagged dependent variables high coefficient (0.78) was represents that, our expectation has been right about consumer constancy to the destination. Based on the results, Singapore was a complementary destination meanwhile Thailand and Australia are substitute destination for Malaysia and finally SARS crisis negatively affected the tourism revenue.

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Additional Metadata

Item Type: Article
Divisions: Institute of Agricultural and Food Policy Studies
DOI Number: https://doi.org/10.3844/ajassp.2010.1593.1598
Publisher: Science Publications
Keywords: Tourism expenditure; Panel data; Gravity model; Origin countries; Econometric; Capita income; Dependent variable; Exchange rate; Tourism demand; Tourism revenue; Lagged dependent
Depositing User: Emelda Mohd Hamid
Date Deposited: 17 Jun 2013 00:47
Last Modified: 29 Nov 2017 03:29
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.3844/ajassp.2010.1593.1598
URI: http://psasir.upm.edu.my/id/eprint/16552
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