International Tourism Demand and Determinant Factor Analysis in Ethiopia

Abstract

In Ethiopia, the goal is to position tourism as a key economic sector, since recently it has been identified as one of the major strategies of using tourism to alleviate poverty. Motivated by this need, the study sought to investigate the determinants of international tourism demand. Specifically, the effect of economic factors, tourist socio-demographic characteristics, political factors, and destination characteristics on international tourism demand in Ethiopia. The study used both longitudinal and cross-sectional research designs and panel data for economic variables from eleven countries for the period of only one month time as of (December 10th, 2018 to January 10th, 2019). Data was collected from the World Bank database, the United Nations Database, the International Monetary Fund Database and the Ministry of Culture and Tourism Statistics. Survey data was collected from individual tourists leaving the country by using questionnaires. The study used a dynamic panel regression model to determine the effect of economic factors on international tourism demand and a count data regression model to determine the effect of socio-demographic characteristics, political factors and destination characteristics on international tourism demand. The study results indicated that tourism price, travelling cost, trade openness and word of mouth effect were the main economic factors influencing international tourism demand in Ethiopia. The tourist's socio-demographic characteristics such as annual household income, age, and occupational status were found to significantly influence international tourism demand. The political factors composite index and destination characteristics composite index were also important determinants of international tourism demand. Taking into consideration of all these factors affecting tourism demand, the government and all the tourism stakeholders should work towards making Ethiopia's tourism product competitive, maintain reasonable prices, further develop the tourism infrastructure and offer quality services, along with the diversification of tourism products.