Modelling the tourism life cycle using regime switching models


Created 21 Jul, 2003
Categories Working Papers
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The tourist area life cycle concept postulated that a destination should enjoy varying levels of popularity over time, and as a result, the growth in tourist arrivals should follow an s-shaped growth path. This study uses Markov-switching models, and quarterly data on stay-over visitor arrivals for Barbados over the 1957 to 2002, to test the tourism area life cycle concept. Markovian models allow the stochastic process of the growth in tourist arrivals to switch between the regimes outlined in the life cycle concept. The key finding of the paper is that the life cycle framework does adequately represent the growth in arrivals from individual tourist markets. However, there does not exist a common life cycle relationship, which is applicable to all tourism source markets, and by extension, to total arrivals. JEL Classification: L80; E32; C32.

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