Determinants of International Tourism Demand in Southeast Asia

This paper aims to analysis the determinants of international tourism demand in Southeast Asia from 1995 to 2009. In addition to that, spill over effects of one-off occurrences are examined as well. The study uses data from open public sources to analyze the role of origin characteristic, origin-destination characteristics, destination characteristics as well as one-off occurrences in determining demand of international tourism in Southeast Asia. The analysis focuses more on variables other than traditional determinants of international tourism demand, namely income of origin country and relative tourism price, which in this paper appears as living cost variable. The study finds health and education, which representing human development in destinations, are significantly determining demand of international tourism in Southeast Asia. Four proposed negative one-off occurrences which capture disturbance international tourism demand in Southeast Asia finds highly significant as well. These one-off negative events are Asian economic crisis, SARS health, security threat and natural disaster. Further analysis, spill over effect are run on security threat and natural disaster. The results demonstrate evidence of spill over effect regarding the occurrence of security threat, but natural disaster does not. This means once a country in the sub-region experience threat such as Bali Bomb 2002, and then foreign visitors tend to avoid visiting Singapore, Malaysia and other Southeast Asia tourism destinations. The findings of the role of destination characteristics imply that investments in health and education will raise international tourism demand which is likely will also increase international tourism contribution. Likewise, the results of one-off occurrences suggest that risk management in Southeast Asia should be improved; particular attention on cooperating to maintain peace and stability in the sub-region. Relevance to Development Studies International tourism is one of important sector in Southeast Asia. An informative study of international tourism demand in Southeast Asia will be very helpful for tourism development planners to achieve long-term goal to gain long-term benefits and to minimize the costs of tourism development. The existing international tourism demand studies in the context of Southeast Asia only based on the condition in few countries. This paper is likely to be the first attempts analyze all 10 ASEAN member countries as a base of analysis.