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Revisiting Tourism Flows to the Caribbean: What is Driving Arrivals?

Author

Listed:
  • Ms. Nicole Laframboise
  • Miss Nkunde Mwase
  • Mr. Joonkyu Park
  • Yingke Zhou

Abstract

The Caribbean share of the global tourism market has been declining. This study examines what is driving tourism flows. It estimates the determinants of tourism and explores variations based on sample differences, and also constructs a static nominal price comparison index. The paper finds that: (i) tourism arrivals and expenditure are sensitive to both price and income factors in source markets; (ii) price and income elasticities of tourism have declined since 2008; (iii) price elasticity is statistically insignificant for “high-end” destinations; and (iv) the nominal cost of an average one week beach holiday in the Caribbean is higher than in other beach destinations around the world. These results point to the need for structural reforms to raise product quality, cost reduction or containment in “low-end” destinations, including possibly via exchange rates, and an adjustment in aggregate consumption to adapt to the implications of a lower contribution to GDP from tourism.

Suggested Citation

  • Ms. Nicole Laframboise & Miss Nkunde Mwase & Mr. Joonkyu Park & Yingke Zhou, 2014. "Revisiting Tourism Flows to the Caribbean: What is Driving Arrivals?," IMF Working Papers 2014/229, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2014/229
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    References listed on IDEAS

    as
    1. Ms. Evridiki Tsounta, 2008. "What Attracts Tourists to Paradise?," IMF Working Papers 2008/277, International Monetary Fund.
    2. Bolaky, Bineswaree, 2011. "Tourism competitiveness in the Caribbean," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    3. Nkunde Mwase, 2013. "Tourism flows to Caribbean islands: an empirical note," Applied Economics Letters, Taylor & Francis Journals, vol. 20(10), pages 957-965, July.
    4. Mr. Sebastian Acevedo Mejia, 2014. "Debt, Growth and Natural Disasters A Caribbean Trilogy," IMF Working Papers 2014/125, International Monetary Fund.
    5. Mr. Alexander Culiuc, 2014. "Determinants of International Tourism," IMF Working Papers 2014/082, International Monetary Fund.
    6. Mr. Andy M. Wolfe & Rafael Romeu, 2011. "Recession and Policy Transmission to Latin American Tourism: Does Expanded Travel to Cuba Offset Crisis Spillovers?," IMF Working Papers 2011/032, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Mr. Sebastian Acevedo Mejia & Lu Han & Miss Marie S Kim & Ms. Nicole Laframboise, 2016. "Flying to Paradise: The Role of Airlift in the Caribbean Tourism Industry," IMF Working Papers 2016/033, International Monetary Fund.
    2. Carr, Liam, 2016. "Stakeholder Perspectives on a Tourism - Dependent Economy," Working Papers 262594, National University of Ireland, Galway, Socio-Economic Marine Research Unit.
    3. Eric Kemp-Benedict & Crystal Drakes & Nella Canales, 2020. "A Climate-Economy Policy Model for Barbados," Economies, MDPI, vol. 8(1), pages 1-21, February.
    4. Ding, Ding & Timmer, Yannick, 2023. "Exchange rate elasticities of international tourism and the role of dominant currency pricing," Journal of International Money and Finance, Elsevier, vol. 137(C).
    5. International Monetary Fund, 2017. "Panama: Selected Issues," IMF Staff Country Reports 2017/106, International Monetary Fund.
    6. International Monetary Fund, 2016. "Barbados: Selected Issues," IMF Staff Country Reports 2016/280, International Monetary Fund.
    7. Serhan Cevik, 2022. "Where should we go? Internet searches and tourist arrivals," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 4048-4057, October.
    8. Mr. Manuk Ghazanchyan & Li Zhao & Steve Brito & Vivian Parlak, 2019. "New Insights into ECCU's Tourism Sector Competitiveness," IMF Working Papers 2019/154, International Monetary Fund.
    9. Hendrickson, Michael & Skerrette, Nyasha, 2020. "Industrial upgrading and diversification to address competitiveness challenges in the Caribbean: The case of tourism," Studies and Perspectives – ECLAC Subregional Headquarters for The Caribbean 45099, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    10. Ding Ding & Mr. Yannick Timmer, 2022. "Exchange Rate Elasticities of International Tourism and the Role of Dominant Currency Pricing," IMF Working Papers 2022/024, International Monetary Fund.
    11. Robertico Croes & Jorge Ridderstaat, 2017. "The effects of business cycles on tourism demand flows in small island destinations," Tourism Economics, , vol. 23(7), pages 1451-1475, November.
    12. Ms. Kimberly Beaton & Metodij Hadzi-Vaskov, 2017. "Panama’s Growth Prospects: Determinants and Sectoral Perspectives," IMF Working Papers 2017/150, International Monetary Fund.
    13. Ding Ding & Yannick Timmer, 2022. "Exchange Rate Elasticities of International Tourism and the Role of Dominant Currency Pricing," CESifo Working Paper Series 9743, CESifo.
    14. David Perrain & Philippe Jean-Pierre, 2019. "The smart destination strategy, a key factor for changes in vulnerable tourist destinations? [La stratégie de destination intelligente, facteur clé des mutations des destinations touristiques vulné," Post-Print hal-02144769, HAL.

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