Comparing the Determinants of Tourism Demand In Singapore and French Polynesia: Applying the Tourism Demand Model to Panel Data Analysis

Abstract

This study explores the differences in tourism demand between French Polynesia and Singapore by applying the panel data technique. Although the tourism industry in these small states tends to be the main economic activity, they have a different economic structure: French Polynesia is highly dependent on the tourism industry, whereas Singapore has several service industries. This article applies the tourism demand model to panel data from 2008 to 2013. Different elasticities are observed in the model estimation between the two islands, such as income elasticity and transportation accessibility. Additionally, this article compares time dummies to estimate the impact of global bankruptcy in 2008. The results show that French Polynesia has slightly declined, while Singapore has gradually increased since 2008. An implication of this study is that the demand in a destination highly dependent on the tourism industry tends to result in a relatively high-income market, but the economy is affected by global phenomena. A destination that owns diversified industries is likely to have good accessibility, and the global economic impact is lower in the tourism market.