Market Potential Estimation for Tourism in Emerging Markets

Chaiwat Baimai

Description

Abstract
The objective of this paper was to develop a useful framework for estimating demand for tourism in emerging markets. Tourism has become one of the most crucial sectors in a large number of emerging countries. Moreover, the tourism industry in such markets is forecasted to keep increasing in the next decade. Hence, understanding and accurately forecast demand in the industry is essential in order to manage this sector effectively. Using stepwise regression analysis, we found a number of im-portant variables in estimating demand for tourism in emerging markets. Our regression model can benefit travel agencies and policy makers dealing with the tourism industry.
Resumen
El objetivo de este trabajo fue desarrollar un marco útil para la estimación de la demanda para el turismo en los mercados emergentes. El turismo se ha convertido en uno de los sectores más cruciales en un gran número de países emergentes. Por otra parte, la industria del turismo en estos mercados se prevé que seguirán aumentando en la próxima década. Por lo tanto, comprender y predecir con exactitud la demanda en la industria es esencial para gestionar este sector de manera eficaz. Mediante un análisis de regresión por pasos, nos encontramos con una serie de variables im-portante en la estimación de la demanda turística en los mercados emergentes. Nuestro modelo de regresión se pueden beneficiar las agencias de viajes y los responsables de las políticas relacionadas con la industria del turismo.

Sujets

• Tourism
• Emerging markets
• International marketing
• Turismo
• Mercados emergentes

Informations

• Publié par: erevistas
• Publié le: 01 janvier 2009
• Nombre de lectures: 30
• Langue: Español

Extrait

Vol. 7 Nº3 págs. 515-524. 2009

www.pasosonline.org


Market Potential Estimation for Tourism in Emerging Markets



iChaiwat Baimai
Texas A&M International University (USA)


iiJose Luis Daniel
Texas A&M International University (USA)




Abstract: The objective of this paper was to develop a useful framework for estimating demand for
tourism in emerging markets. Tourism has become one of the most crucial sectors in a large number of
emerging countries. Moreover, the tourism industry in such markets is forecasted to keep increasing in
the next decade. Hence, understanding and accurately forecast demand in the industry is essential in
order to manage this sector effectively. Using stepwise regression analysis, we found a number of
important variables in estimating demand for tourism in emerging markets. Our regression model can
benefit travel agencies and policy makers dealing with the tourism industry.


Keywords: Market estimation; Tourism; Emerging markets; International marketing.



Resumen: El objetivo de este trabajo fue desarrollar un marco útil para la estimación de la demanda para
el turismo en los mercados emergentes. El turismo se ha convertido en uno de los sectores más cruciales
en un gran número de países emergentes. Por otra parte, la industria del turismo en estos mercados se
prevé que seguirán aumentando en la próxima década. Por lo tanto, comprender y predecir con exactitud
la demanda en la industria es esencial para gestionar este sector de manera eficaz. Mediante un análisis
de regresión por pasos, nos encontramos con una serie de variables im-portante en la estimación de la
demanda turística en los mercados emergentes. Nuestro modelo de regresión se pueden beneficiar las
agencias de viajes y los responsables de las políticas relacionadas con la industria del turismo.

Palabras clave: Estimación del mercado; Turismo; Mercados emergentes; Comercialización
internacional.




i College of Business Administration, Texas A&M International University 5201 University Blvd., Laredo,
TX 78041-1900, USA. E-mail: [e-mail]
ii College of Business Administration, Texas A&M International University 5201 University Blvd., Laredo, [e-mail]
© PASOS. Revista de Turismo y Patrimonio Cultural. ISSN 1695-7121 516 Market Potential Estimation for Tourism in Emerging Markets

Introduction rism demand four times up by 2018, ac-
counting for US$2,465 billion, with an
anTravel and tourism have been consi- nual growth rate of 8.9%. The projection of
dered as an important industry in the ser- the increasing trend for tourism in
emergvice sector. The service sector consists of ing markets is presented in table 1. various kinds of industries such as
finanHowever, the tourism industry has been cial services, health care services, and
inaffected by the ongoing global economic formation sector services. Among these
crisis. The World Travel and Tourism industries, tourism is one of the most
imCouncil revealed the results of its Travel portant indicators of economic
contributions for both developed and developing and Tourism Competitiveness Report
countries. An economic impact of tourism (2009), explaining that the tourism trends
is significant, since huge amount of foreign will face a more challenging time than ever
inflow come from tourism. Moreover, tour- before due to the impact from an economic
ism accounts for the major source of cash uncertainty. The report also predicts a incomes, and it has been regarded as a
madownturn of international tourism particu-jor source of economic growth and
employlarly in emerging markets. Although the ment creation (Szivas and Riley, 1999).
tourism industry in emerging market will According to the World Tourism Barometer
2008, the trend of international tourism face a new challenge, it is believed that the
has increased continuously and is likely to trend will be positive in the long-run if
go up in the future. properly managed. Thus, understanding
Tourism has become one of the most and accurately forecast demand in the
incrucial sectors in a large number of emerg- dustry is essential in order to proactively
ing markets (Singh, 1997). Emerging survive during this tough time and
effecmarkets refer to countries that have rapid- tively manage the industry over time. It is
ly growing economy or that are in a transi- the intention of this study to develop a
usetional phase between developed and devel- ful framework for estimating demand for
oping status. Emerging markets comprise tourism in emerging markets.
more than half of the world's population,
account for a large share of world output, Background Literature
and have very high growth rates (Globa-
ledge, 2008). These emerging countries Identifying the determinants of tourism
have a strong effect to the global economy demand and specifying the tourism demand
as a whole. In fact, it is forecasted that by models are crucial for the generation of
2050 emerging countries especially the accurate forecast of futures tourisms
deBRIC economies ⎯Brazil, Russia, India, mand (Garcia, 2006). In this paper, a
marand China ⎯ will surpass those developed keting framework was applied for the
tourcountries as the United States, Japan, ism industry in emerging markets. It has
Germany, U.K., France, and Italy (Wilson long been known that the marking mix
and Purushorthaman, 2003). On top of model can help manage all products and
that, tourism in emerging markets is a services. To some extent, it can also be
major source of economic growth and fo- applied for the tourism industry. Basically,
reign income (Nowak et al., 2003). For the marketing mix includes four factors
these markets, the expected economic im- −product, price, place, and promotion.
provement relied heavily on the amount of The first dimension of the marketing
tou-rism inflow. mix is product. In term of international
The tourism industry in emerging mar- tourism, products are considered as the
kets is forecasted to keep increasing in the
location of destination. Considering
tournext decade. For example, the tourism
ism as a product, rich of nature and uni-industry China and India are growing
raqueness of a particular destination are the pidly, leading to a significant increase in
unit of interest. With regard to this view-both business and leisure travel. In
particpoint, national protected area and national ular, China will jump from fourth to second
position above Japan and Germany and is heritages are the important variables to
forecasted to increase its travel and tou- attract international tourists.
PASOS. Revista de Turismo y Patrimonio Cultural, 7(3). 2009 ISSN 1695-7121

Chaiwat Baimai and Jose Luis Daniel 517


Tourism Tourism Tourism Tourism as Employment in Employment in Tourism as a
Arrivals receipts expenditure a % of service sector tourist sector
% of GDP
(millions) (US$M) (US M) service (million) (thousand)
Argentina 4.15 2883.40 2892.00 2.38 1.35 12.18 290,167.03
Brazil 5.014972.704894.500.700.4665.65462,619.56
Chile 2.09 1304.40 1106.40 2.03 0.89 4.39 89,256.81
China 49.6 30870.10 22950.40 2.781.11257.06 7,134,128.48
Colombia 1.05 1225.80 1130.30 1.72 0.90 12.08 207,384.94
Czech Rep. 6.43 4875.60 2502.80 5.80 3.41 3.12 180,834.83
Egypt 8.64 7131.90 1688.60 14.68 6.62 11.27 1,654,278.17
Hungary 9.25 4407.70 3050.70 5.94 3.902.56 152,349.84
India 4.444702.704854.900.970.51 144.591,404,707.40
Indonesia87 4387.00 3577.60 3.06 1.2042.53 1,299,650.96
Israel 2.012896.902932.403.042.04 1.4443,704.06
Malaysia 15.9 8973.70 3810.00 12.83 5.755.56 714,039.12
Mexico 21.35 12253.80 7779.72.10 1.46 26.32 552,450.00
Peru 1.63 1270.40 694.20 2.061.367.18 148,259.79
Philippines 2.702153.301296.803.34 1.83 18.11605,307.19
Poland 15.67 6328.30 4389.10 2.88 1.86 9.34 269,132.50
Russia 20.19 5483.918081.10 0.990.5544.83 442,461.00
Saudi Arabia 8.62 4930.00 4467.60 4.54 1.41 4.13 187,729.70
S. Africa 8.39 7665.40 3453.90 4.55 2.98 13.32 605,821.48
Thailand 13.88 10263.60 5153.80 11.13 4.98 13.73 1,529,024.54
Turkey 18.91 19747.60 3042.57.36 4.62 10.41 766,271.71
Venezuela 770 662.10 1947.00 0.620.367.92 49,219.32
Table 1. Tourism Inflow in Emerging Markets

A considerable portion of the value to Also, national heritage is a substance
tourists is attributable to national pro- attraction for international tourism.
Contected area. National protected area is sidering tourism in the country of origin as
defined as legally established land or water a product, cultural tourism is another focal
area under either public or private owner- variable to be included in the model.
Culship that is regulated and managed to tural tourism has long been considered as
achieve specific conservation objectives. an attraction for international tourism.
Walpole and Goodwin (2001) examined Cultural tourism is defined as a unique
attitudes towards protected area touris