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Flying to Paradise: The Role of Airlift in the Caribbean Tourism Industry

Author

Listed:
  • Mr. Sebastian Acevedo Mejia
  • Lu Han
  • Miss Marie S Kim
  • Ms. Nicole Laframboise

Abstract

This paper studies the role of airlift supply on the tourism sector in the Caribbean. The paper examines the relative importance of U.S.-Caribbean airlift supply factors such as the number of flights, seats, airlines, and departure cities on U.S. tourist arrivals. The possible endogeneity problem between airlift supply and tourist arrivals is addressed by using a structural panel VAR and individual country VARs. Among the four airlift supply measures, increasing the number of flights is found to be the most effective way to boost tourist arrivals on a sustained basis. As a case study, the possible crowding effect of increasing the number of U.S. flights to Cuba is investigated and, based on past observations, we find no significant impact on flights to other Caribbean countries. The impact of natural disasters on airlift supply and tourist arrivals is also quantified.

Suggested Citation

  • 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.
    • Handle: RePEc:imf:imfwpa:2016/033
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    References listed on IDEAS

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    1. Mr. Alexander Culiuc, 2014. "Determinants of International Tourism," IMF Working Papers 2014/082, International Monetary Fund.
    2. 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.
    3. Ms. Evridiki Tsounta, 2008. "What Attracts Tourists to Paradise?," IMF Working Papers 2008/277, International Monetary Fund.
    4. 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.
    5. Harvey, A C & Todd, P H J, 1983. "Forecasting Economic Time Series with Structural and Box-Jenkins Models: A Case Study," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(4), pages 299-307, October.
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    7. Nkunde Mwase, 2013. "Tourism flows to Caribbean islands: an empirical note," Applied Economics Letters, Taylor & Francis Journals, vol. 20(10), pages 957-965, July.
    8. Andrews, Donald W. K. & Lu, Biao, 2001. "Consistent model and moment selection procedures for GMM estimation with application to dynamic panel data models," Journal of Econometrics, Elsevier, vol. 101(1), pages 123-164, March.
    9. Mr. Sebastian Acevedo Mejia, 2014. "Debt, Growth and Natural Disasters A Caribbean Trilogy," IMF Working Papers 2014/125, International Monetary Fund.
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    Cited by:

    1. Uwe Böwer, 2019. "Can Lebanon Defy Gravity Forever?," European Economy - Economic Briefs 046, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Cevik Serhan & Ghazanchyan Manuk, 2021. "Perfect Storm: Climate Change and Tourism," Journal of Globalization and Development, De Gruyter, vol. 12(1), pages 47-61, June.
    3. 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.
    4. 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.
    5. International Monetary Fund, 2017. "Panama: Selected Issues," IMF Staff Country Reports 2017/106, International Monetary Fund.
    6. Ms. Kimberly Beaton & Metodij Hadzi-Vaskov, 2017. "Panama’s Growth Prospects: Determinants and Sectoral Perspectives," IMF Working Papers 2017/150, International Monetary Fund.
    7. International Monetary Fund, 2016. "Barbados: Selected Issues," IMF Staff Country Reports 2016/280, International Monetary Fund.

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