Evaluation of demand: US tourists to Aruba

Abstract

This study examines international tourism demand to Aruba from the United States. This is the first empirical attempt to estimate the income, price, and exchange rate elasticities on Aruban tourism. An accurate estimate, understanding, and forecasting of the demand based on appropriate analytical methods is important for both the government and private investors. Tourism demand estimates from either the linear and the double log linear models reveal that the effects of income dominate those of prices and exchange rates. In general, US tourists appeared to be highly sensitive to the income variable and inelastic with respect to price. The exchange rate variable was not significant.