Travel and Tourism Competiveness Analysis
15 Pages Posted: 7 May 2015 Last revised: 3 Apr 2016
Date Written: May 4, 2015
Abstract
A strong and competitive Travel and Tourism (T&T) sector contributes in many ways to the development of a region or an economy. It makes both direct contributions, by raising the national income and improving the balance of payments, and indirect contributions, via its multiplier effect. Tourism multipliers effect measures the total increase in output, labor earnings and employment through inter-industry linkages in a region/country as a result of tourism expenditures. This study seeks to identify the factors that determine a country’s competitiveness in this large and important industry. The study uses the World Economic Forum’s (WEF) competitiveness index, which is based upon multidimensional pillars of competitiveness. A discriminant analysis is conducted, comparing 24 top ranked destination countries with 26 low ranking destination countries. The evidence indicates that most developing countries have focused excessively on price competitiveness and neglected several more important pillars of TT competitiveness. There is a vivid evidence that the top destination countries place more emphasis on pillars of ‘Health and Hygiene’, ‘Cultural Resources’, ‘Human Resources’ (HR), ‘Tourism Infrastructure’ and ‘Environmental Sustainability.’ The quantitative findings suggest that countries aiming to build tourism competitiveness need to invest in their social and physical infrastructures, not simply in enhancing their cost effectiveness.
Keywords: Travel and Tourism, Hospitality, Competitiveness, World Economic Forum, Index, Pillars of Cometitiveness, Discriminant Analysis, UNWTO, WTTC, Determinants
JEL Classification: A10, C10, C20, F20, F29, H54, L80, L83, M20, O10, R10, Z00, Z10
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