Dynamics of Australia's tourism in a multimarket context

Abstract

Forecasting tourism demand is critical to many economies including Australia's where tourism generates 514,000 jobs and contributes AU$35 billion to GDP (Amelung & Nicholls, 2014).While the structural determinants of tourism demand have been extensively examined (e.g. Lim & McAleer, 2001; Seetaram, 2012; Song, Dwyer, Li, & Cao, 2012), Narayan's (2008) seminal work has underpinned numerous studies into market co-movements (Abbott, De Vita, & Altinay, 2012; Lorde & Moore, 2008; Solarin, 2014; Yilanci & Eris, 2012). Using a five-variable VAR model, this study employs Granger causality and impulse responses to examine the dynamic interplay between tourist arrivals from Australia's five largest markets (New Zealand, Japan, the UK, the US, and China).