Demand for tourism in Malaysia by tourists from four major industrial countries - a panel data analysis

Abstract

The fact that tourism industry can play an important role in generating growth for an economy has been widely accepted by political authorities in many countries. The relevant issue then is, what moves the growth of tourism sector in a particular economy? The present study examines the significant influence of some selected factors towards inbound tourists from four major industrial countries; namely, the U.S, the U.K, Germany and Japan to Malaysia.

Based on the sample period of eleven years (ranging from 1994 to 2004), the data are analyzed by employing the panel data econometric technique. Results of the study indicate that the level of income in the tourists’ country of origin, price of tourism in the substitute destination (the Philippines) and the “Malaysia…Truly Asia” global campaign, are significantly influential in determining the flow of international tourists from the four countries in the sample into Malaysia.