Abstract
ABSTRACT Tourism demand is influenced by many factors including price-related variables like exchange rate. This paper aims to examine the influence of the exchange rate increase on the domestic tourism demand of Iran. To this end, the social accounting matrix is modified to incorporate domestic tourism as a distinct sector, and is fed into a CGE model. The results show domestic tourism demand is decreased for all households after a 50% increase in the exchange rate. However, the export of many sectors is improved. Inbound tourism, proxied by hotel sector, is also increased. The consequences of the exchange rate increase are not homogenous in all sectors, and it is recommended to study all aspects in exchange rate policies.
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