Abstract
Factors having an influence on travel demand to Iran are explored. The hypothesis specifies the variable of “domestic upheavals and insecurity” as the most significant obstacle to expansion of the demand for travel to Iran. Several demand models are briefly reviewed, and then in a macro model the function of demand for travel to Iran is estimated, using econometric methods. The substantial finding is at the moment, the low demand for travel to Iran is not due to insufficient infrastructures and facilities, but it is because of the element of “insecurity”. Hence, this issue needs to be addressed by new policies. Keyword: Tourism, Economics of Tourism, Travel demand, Iran
Highlights
At the present time, the tourism industry has developed extensively worldwide, and through which many countries have been able to improve their own conditions substantially, whilst overcoming some of their economic problems including low per capita income, high unemployment and insufficient foreign exchange revenues
Instead of X 1t (1369=1990=100), $GDPworld: Global gross domestic products, instead of the variable X 2t, TRREV(-1) : Foreign exchange revenue earned from tourism during the previous period, instead of variable Y t 1, DUM78: Dummy variable to consider the impacts of the first year of the Islamic Revolution, DUM7987: Dummy variable to consider the impacts of the war
The study reaches the conclusion that, among the factors affecting the tourists aspiring to travel to Iran and upon the foreign exchange revenue earned, the variable of “insecurity and domestic upheavals” is more significant than all other variables
Summary
The tourism industry has developed extensively worldwide, and through which many countries have been able to improve their own conditions substantially, whilst overcoming some of their economic problems including low per capita income, high unemployment and insufficient foreign exchange revenues. At the present time, the tourism industry revenue constitutes almost 6% of total global exports (Sabagh Kermany 1997). Considering the over-dependence of the Iranian economy on the export of crude oil and its extreme vulnerability in face of oil price fluctuations and other economic and noneconomic shocks, the development of tourism industry could reduce this vulnerability significantly. It would help economic policy makers to overcome the current problems such as low foreign exchange revenue, low level of income in the society, low level of non-oil export and unemployment
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