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Flying to Paradise: The Role of Airlift in the Caribbean Tourism Industry
Author: Mr. Sebastian Acevedo Mejia, Lu Han, Miss Marie S Kim, and Ms. Nicole Laframboise
Series:
IMF Working Papers
Volume/Issue:
Volume 2016: Issue 033
Language:
English
Publication Date:
23 Feb 2016
DOI:
https://doi.org/10.5089/9781498375108.001
ISBN:
9781498375108
ISSN:
1018-5941
Pages:
42
Keywords:
WP; tourist arrival; tourism industry; tourist; Caribbean; tourism; airlift supply factors; airlift supply factor; supply variable; market concentration; airlift supply data; airline industry; airlift availability; Structural vector autoregression; Natural disasters; Transportation; Unemployment rate
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper studies the role of airlift supply on the tourism sector in the Caribbean. The paper examines the relative importance of U.S.-Caribbean airlift supply factors such as the number of flights, seats, airlines, and departure cities on U.S. tourist arrivals. The possible endogeneity problem between airlift supply and tourist arrivals is addressed by using a structural panel VAR and individual country VARs. Among the four airlift supply measures, increasing the number of flights is found to be the most effective way to boost tourist arrivals on a sustained basis. As a case study, the possible crowding effect of increasing the number of U.S. flights to Cuba is investigated and, based on past observations, we find no significant impact on flights to other Caribbean countries. The impact of natural disasters on airlift supply and tourist arrivals is also quantified.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund