Abstract
This paper investigates the determinants of international tourism demand in Croatia, a country whose economy is heavily dependent on tourism. A particular focus is placed on the role of accommodation capacity and trade openness, two demand drivers that have been rarely examined in combination. Using the difference GMM estimator, a dynamic panel model of international tourism demand in Croatia is estimated, employing annual data for 16 tourism generating countries from 2007 to 2019. The results show that the lagged dependent variable, income, accommodation capacity, and exchange rate have a positive effect on international tourism demand, while the impact of relative prices and trade openness prove to be irrelevant in the Croatian context.
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