The effects of business cycles on tourism demand flows in small island destinations

Robertico Croes and Jorge Ridderstaat
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Robertico Croes: University of Central Florida, USA
Jorge Ridderstaat: University of Central Florida, USA

Tourism Economics, 2017, vol. 23, issue 7, 1451-1475

Abstract: This study examines the liaison between business cycles and tourism demand flows to Aruba and Barbados by considering the between- and within-dimensions of business cycle effects. The study demonstrates that business cycles have a causal, dynamic bearing on tourism demand cycles, depending on the intrinsic dimensions that connect the two cycles. The methodology includes panel data analysis (unit root, cointegration, and Granger causality testing) on a transformed annual time series from 1970 to 2014. The study reveals that negative cycles indicate larger effects than positive cycles. However, these effects are not always present, are of short-term duration, and transitory in nature—depending on the cycle interval, the source country, and the destination. The study indicates the nature of the relationship between business and tourism demand flow cycles, which could help tourism managers and policy makers refine their tourism development strategies.

Keywords: business cycle; cointegration; granger causality; small islands; tourism demand cycle (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:23:y:2017:i:7:p:1451-1475

DOI: 10.1177/1354816617697837

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