Does tourism marketing investment matter? A dynamic panel analysis for Africa, the Caribbean, Central America, and South America

This study focused on the impact of tourism marketing investment on tourism development. The parameters for the dynamic panel of 12 countries were estimated using: the one-step General Method of Moments, the Balestra and Nerlove, as well as the Fully Modified Ordinary Least Square procedures. The magnitudes of the estimated marketing investment elasticity values vary across tourism origin markets and are less than one, and inelastic. They suggest that, in the long-run, on average a 1% increase in tourism marketing investment results in a 0.63, 0.95, 0.72 and 0.86% increase in tourist arrivals to Africa, the Caribbean, Central America, and South America from their tourism origin markets, respectively. They have confirmed that tourism marketing investment by national tourism institutions has indeed contributed positively toward tourist arrivals in Africa, the Caribbean, Central America, and South America, thus confirming its direct and independent importance as a potential factor for a tourism destination. These results can assist in tourism marketing investment policy formulation, strategic market segmentation, product development and tourism planning.