Dynamic responses of tourist arrivals in Australia to currency fluctuations

Autor: Abbas Valadkhani, Jeremy Nguyen
Rok vydání: 2020
Předmět:
Zdroj: Journal of Hospitality and Tourism Management. 45:71-78
ISSN: 1447-6770
DOI: 10.1016/j.jhtm.2020.07.003
Popis: This study examines the dynamic responses of monthly Australian inbound tourist arrivals to higher frequency daily movements in the exchange rate. Many existing models of inbound tourism utilize currency values averaged over months or quarters to match available visitor data, thus discarding valuable dynamic information from higher frequency variations in the exchange rate. We employ a Mixed Data Sampling (MIDAS) approach, modelling monthly Australian inbound tourism from 1998 to 2018, while utilising daily observations of the domestic currency as an explanatory variable. The findings suggest that models that take averages of exchange rate data to match frequencies may substantially underestimate how sensitive tourists are in responding to short-term fluctuations in the exchange rate. Indeed, the overwhelming majority of such responses typically are observed within 15–20 days prior to travel. After considering time horizons of up to 90 days, our findings indicate that travelers are predominantly concerned with exchange rate variations again only within three weeks prior to their departures. The results suggest that the Mixed Data Sampling (MIDAS) methodology can be a useful supplement to traditional approaches to modelling tourism demand. MIDAS models can provide rich insights into the duration and patterns of the dynamic interplay between the variables of interest.
Databáze: OpenAIRE
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