Abstract
This paper, with the use of annual data covering the period 1975 to 2008, seeks to identify the determinants of outbound tourism demand (outbound tourist outflows) in South Africa. We employ cointegration analysis by utilising an autoregressive distributed lag (ARDL) approach proposed by Pesaran et al. (2001) to make inferences about the long run and short run relationships. The results indicate that in the long run, outbound tourism demand is influenced by the real domestic income and the relative prices. Our results indicate that outbound tourism demand is a luxury good with an income elasticity of 3.5. In the short run, only relative prices have an impact on outbound tourism demand in South Africa. Outbound tourism demand was found to be price inelastic in both periods.
Highlights
Tourism is the world's largest sector, with annual revenues of almost $500 billion and it accounts for roughly 35 per cent of exports of services and over 8 per cent of exports of goods (DTI, 2006)
In this paper we examined the determinants of outbound tourism demand in South Africa over the annual period 1975-2008
The bounds test results confirm the presence of a long-run relationship between tourist outflows from South Africa and real domestic income, travel cost and relative price
Summary
Tourism is the world's largest sector, with annual revenues of almost $500 billion and it accounts for roughly 35 per cent of exports of services and over 8 per cent of exports of goods (DTI, 2006). Available 2010 statistics show that, overseas tourists came mainly from UK, 46 585 (26,3%); Germany, 21 863 (12,3%); USA, 14 885 (8,4%); The Netherlands, 11 200 (6,3%); France, 10 752 (6,1%); China, 5 582 (3,2%); Sweden, 5 431 (3,1%); and Australia, 5 238 (3,0%) These countries are the eight leading overseas tourist sources for South Africa accounting for about 68.7% of all inbound tourists visits. Inbound tourists visits have been increasing over the years; outbound tourism was stagnant from 1975 up to 1992 This was probably due to the apartheid political regime and associated foreign exchange restrictions that made it difficult for most South Africans at that time to go for overseas holidays. This explains why visits fell by 64% between 2003 and 2004 before increasing by 424% in 2005
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