Tourism Demand and Exchange Rates in Asian Countries: Evidence from a Panel Data Approach

The purpose of this paper is to investigate the impact of an important economic determinant, namely exchange rate, on the international tourism demand for tourist services in eight Asian countries using panel data procedures. A balanced panel data set of eight Asian countries over the period from January 2001 to July 2007 was used. By using appropriate panel data techniques, the effects of exchange rates change on international demand growth for Asian destinations can be obtained. The empirical results have shown that the influence of tourist arrivals change of previous season on current season is positive and statistical significance, that means there exists persistence effect of seasonality for tourist arrivals change. Another finding indicates that currency of destination country depreciated relatively to currency of origin country is helpful to the international tourism business in destination country and vice versa.