Environmental concerns and their impact on inbound tourism revenue: does the growth rate of the nation’s matter?

Abstract

PurposeEnvironmental concerns are gaining traction with every passing day. Moreover, post Covid 19, similar to many sectors, the tourism sector is also trying to revive itself. Theoretically, the environment and tourism complement each other. However, empirical vetting is not adequate. This study is motivated to determine how the environment impacts tourism. In addition, the moderating influence of the growth rate of the nations on the impact of the nations on tourism is also investigated.Design/methodology/approachWe have gathered clear and balanced panel data on tourism and the environment for 106 nations for 10 years. The difficulty in measuring environment status is managed by estimating environment efficiency using Data Envelopment Analysis (DEA).FindingsSurprisingly, we find a significant impact of environmental efficiency on inbound tourism across the nations used in the study. Such findings are rarely observed in the earlier studies as very less studies look for the association of environmental efficiency with tourism. However, the findings are supportive of the principles of the Faro convention and ICOMOS (“International Council on Monuments and Sites”) charter to promote environmental quality for tourism attraction. The current research findings can change the future course of action regarding the environment for tourism. The findings of the study establish financial materiality for the tourism sector. These findings give a boost to the theory of sustainable tourism.Research limitations/implicationsThe study’s inconsistent outcome (as the literature finds significant association) regarding the insignificant influence of GDP growth rate is a limitation of the study. The insignificant association needs to be further investigated. This limitation can be a future scope on the topic.Originality/valueThe authors do not find many studies on the environment’s impact on inbound tourism. In addition, a few studies on the topic, which exist provide contradictory outcomes. Above all, the literature does not observe the moderation of the GDP growth rate on the environment’s impact on inbound tourism. This lack of studies in literature, to the best of our knowledge, is the unique contribution of the current study.