Preliminary communication

An Analysis of Foreign Tourism Demand for Croatian Destinations: Long-Run Elasticity Estimates

Andrea Mervar
James E. Payne

Abstract

Given that tourism is a significant source of export revenues for Croatia, it is vital for policymakers to understand the factors affecting foreign tourism demand for Croatian destinations. This study provides long-run elasticity estimates associated with the aggregate foreign tourism demand for Croatian destinations in the period 1994:1-2004:4 using the autoregressive distributed lag (ARDL) approach. Foreign tourism demand is proxied by the aggregate number of foreign overnight stays in Croatia. The long-run elasticity estimates indicate that tourism demand is positive and highly elastic with respect to the income of tourist-generating countries. Moreover, tourism demand is adversely affected by the political conflicts in the 1990s. The real exchange rate and transportation costs are not statistically significant determinants of foreign tourism demand.

Keywords

tourism demand; cointegration; ARDL; Croatia

Hrčak ID:

71591

URI

https://hrcak.srce.hr/71591

Publication date:

15.2.2007.

Article data in other languages: croatian

Visits: 4.231 *