Seasonal Tourism Demand Models from USA to Greece

Abstract

Tourists from USA, which is Greece's third major market after the European Union and Japan, represent 6% of international tourist arrivals in Greece in 2002. The average annual growth rate of tourist arrivals from USA was 20% for the period 1960–2000. Despite the political, economic and military crises, which dominated in the examined period, tourist arrivals to Greece from USA have continued to grow slowly. Therefore, it is essential to consider the economic factors influencing this tourism demand. The purpose of the paper is to estimate the elasticities among origin country's income, consumer price indices of both countries and transportation cost of inbound tourism from USA to Greece, exchange rate, and prices of goods and services of a competitive country using seasonally unadjusted quarterly data. Given Turkey's proximity to Greece, it is also useful to determine whether Greece and Turkey are substitute or complementary destinations using tourism demand models. In addition, vector error correction models (VECM) are examined in order to illustrate the seasonal effect of tourism demand in USA for Greece.