Tourism Destination Competitiveness: Second Thoughts on the World Economic Forum Reports

Abstract

The Travel and Tourism Competitiveness Reports of the World Economic Forum elaborate the Travel and Tourism Competitiveness Index (TTCI) as an overall measure of destination competitiveness for 130 economies worldwide. From a tourism management point of view, a measure such as the TTCI is expected to be instrumental in explaining and predicting the tourism performance of receiving countries. This study explores several ways to transform the TTCI into a formative structural model. Partial least squares path modelling, PLS regression, mixture modelling and non-linear covariance-based structural equation modelling are applied to examine the TTCI's predictive power. The analysis probes possible measures for improvement. The destination countries may be subject to unobserved heterogeneity with regard to how the various constituents of competitiveness act on tourism performance. Interaction phenomena seem to prohibit a simple cause–effect pattern and non-linear relationships show encouraging results.