Is the boom in East Asian tourism happening at the expense of other destinations? A cross-country analysis

Over the years, tourism has emerged as the world’s largest peacetime industry employing approximately 221 million people worldwide. According to the UNWTO, the tourist traffic rose to a record 1.087 billion arrivals in 2013 and this surge is expected to continue through 2030, in annual increments of 3.8 percent. Much of this unprecedented boom may be attributed to newly-affluent Asian nations such as Taiwan, South Korea and Malaysia as well as the huge populations of China, India and Indonesia - the first, second and fourth most populated countries in the world. Many analysts worry that the Asia Pacific region - a collection of dissimilar states squeezed between the Indian Ocean and the Pacific - could potentially be gaining market shares at the expense of their older rivals. We disagree with such a notion and will argue instead that the boom in East Asian tourist traffic is attributable to local factors primarily. Our examination of tourism data from the World Development Indicators database comprising a total of 92 countries covering a 16-year period (1995-2011), provides strong empirical support for our claim that the regional variation in tourism growth does not imply that some destinations are gaining at the expense of the rest. We examine changes in tourist arrivals among all relevant bilateral country pairs to test for a link between changes in tourist arrivals in Southeast Asian nations with Europe and North America. We do find that growth in tourist arrivals to countries of Southeast Asia has been particularly strong, but at the same time, tourism growth to Eastern Europe and to the Middle East has also been strong. This suggests that tourism is driven at least partly by economic growth of a destination, and it may also drive that growth. In examining changes in tourist arrivals by bilateral country pairs we find that for the vast majority of cases there is no support for the hypothesis that growth of tourism in one location comes at the expense of tourist arrivals to other countries. The tourism industry is dynamic and growing, and the success of new destinations does not come at the expense of traditional destinations. Rather countries seem to be establishing niches for themselves in terms of tourist offerings and as such may well be more complementary to each other than competitive. All countries—both developed and developing—may be able to stake a claim in the ever expanding global tourist trade.