Revitalising small tourism destination states: necessity and strategies for structural change in tourism development

Abstract

ABSTRACT This paper delves into the controversy surrounding the link between structural change and tourism development, particularly focusing on small tourism states, over the period 1995Q1–2020Q4 using a panel-based approach. To address the research objective, the Quantile-on-Quantile (QQ) regression approach is utilised to assess the impact of different quantiles of structural change on the quantiles of tourism development. To ensure robustness, the outcomes of the QQR approach are compared with those of the conventional quantile regression technique. Empirical findings from the QQR approach reveal nuanced relationships. In Belize, Cyprus, Dominican Republic, Iceland, Malta, and Seychelles, structural changes exhibit a structural-increasing effect on tourism development. Conversely, in the Bahamas, Fiji, and Trinidad & Tobago, structural changes manifest both structural-increasing and structural-decreasing effects on tourism development. In Bahrain, structural changes have a structural-decreasing impact on tourism development. Furthermore, the study establishes a feedback nexus between tourism and structural change, offering feasible policy suggestions for policymakers. Overall, the findings suggest that sound policy responses to the relationship between structural change and tourism development should be context-specific, responsive to changing dynamics, and aimed at maximising the positive impacts of structural changes while mitigating potential negative consequences.