Special Issue: E-Tourism Economics

Tourism Economics
1–18
Relationship between ICT ª The Author(s) 2019
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and international tourism sagepub.com/journals-permissions

DOI: 10.1177/1354816619858004
journals.sagepub.com/home/teu
demand: A study of major
tourist destinations
Nikeel Kumar
University of the South Pacific, Fiji

Ronald Ravinesh Kumar

Ton Duc Thang University, Vietnam

Abstract
In this article, we study the effect of ICT on tourism demand in nine major tourist destinations
based on visitor arrivals. Mobile and broadband subscriptions are used to proxy for ICT. Addi-
tionally, we account for price, source country’s income, and the destination’s income. Balanced
panels for the period 1995–2017 and 2002–2017 are used for mobile and broadband subscriptions,
respectively. The pooled mean group approach is used for estimation. The results indicate a 1%
increase in mobile subscriptions and broadband would increase international visitor arrivals by
0.04% and 0.11%, respectively. The elasticity coefficients of price and income are 0.71 and 1.58,
respectively, based on the mobile subscription model, and 0.88 and 1.83, respectively, based on
broadband subscription. The destination’s income has only a short-run positive association with
tourism demand. The causality results indicate that ICT cause tourism demand, and support for
technology-led growth hypothesis in the major tourist destinations.

Keywords
causality, cointegration, ICT, major tourist destinations, pooled mean group, tourism demand

Introduction
Technology continues to revolutionize tourism industries in many countries, especially in the context
of digital tourism. Digital tourism refers to a suite of real world and online contents aimed at improving

Corresponding author:
Ronald Ravinesh Kumar, Informetrics Research Group and Faculty of Social Sciences and Humanities, Department for
Management of Science and Technology Development, Ton Duc Thang University, 19 Nguyen Huu Tho street, Tan Phong
ward, District 7, Ho Chi Minh City 70880, Vietnam.
Email: ronald.ravinesh.kumar@tdtu.edu.vn
2 Tourism Economics XX(X)

experiences of tourists (Adeola and Evans, 2019a). For tourists, technology can be an important tool,
especially in terms of finding information about the intended destinations, climate and weather pat-
terns, accommodations, sceneries, geopolitical and economic situations, making travel bookings,
online shopping and payments, and capturing memories, among other things (Law et al., 2018).
Several studies have shown a close link between ICT and economic growth (Jorgenson, 2001;
Jorgenson and Vu, 2011; Kumar, 2014; Kumar and Kumar, 2012; Kumar et al., 2015, 2016; Madden
and Savage, 1998; Pohjola, 2002; Stiroh, 2002; Strobel, 2016; Ward and Zheng, 2016). The high-
income and highly developed provinces, countries, and regions can benefit from ICT developments,
especially in terms of productivity and economic growth (Lam and Shiu, 2010). Because tourism
development and economic activity are closely linked (Lanza and Pigliaru, 2000; Narayan et al., 2010;
Pablo-Romero and Molina, 2013; Sheldon, 1993), interest in exploring key drivers of tourism demand
is growing. Studies have shown that developments in the tourism sector can result in the improvements
in infrastructure including technology and public facilities (Andereck et al., 2005; Yoon et al., 2001),
the reduction in poverty (Croes, 2014; Vanegas et al., 2015), additional employment (Andereck and
Nyaupane, 2011), and the creation of local businesses (Dyer et al., 2007).
In this study, we examine the association between ICT, measured by mobile and broadband usage,
and tourism demand in nine major tourist destinations ranked by visitor arrivals. Drawing insights from
the gravity model and demand theory, we estimate the tourism demand model that includes leading
tourist destinations. Our sample includes China, France, Germany, Italy, Mexico, Russia, Spain, the
United Kingdom, and the United States.1 Interestingly, these countries possess a well-developed ICT
infrastructure (Lam and Shiu, 2010) and are experiencing growth in tourism (Shahzad et al., 2017). The
pooled mean group (PMG; Pesaran et al., 1999) approach is used to estimate the long-run and short-run
models, and the Dumitrescu–Hurlin (2012) heterogeneous panel test is used to examine causation. The
model with mobile usage as an indicator of ICT comprises data from 1995 to 2017, and the model with
broadband usage as an indicator comprises data from 2002 to 2017, which amounts to 207 and 144
observations, respectively. The rest of the article is set as follows: in the second section, we discuss the
literature on ICT and tourism. The third section is on data and methods. The fourth section 4 is on the
results, and the fifth section concludes with some policy implications.

Literature review
Tourism demand is often measured by visitor arrivals, tourism receipts or expenditure, nights spent
by a tourist in the destination country or distance traveled, Song et al. (2010) categorize these
measures into quantity, pecuniary, time consumed, and distance criterion. In any case, visitor
arrivals are the most commonly used measure of tourism demand (Crouch, 1994; Li et al., 2005;
Lim, 1997). The popularity of the use of visitor arrivals as a measure is because they provide
information to tourism service suppliers regarding the scope of new investments in hotel, aircraft,
and tourism infrastructure (Sheldon, 1993; Song et al., 2010).
A tourism demand model consists of variables like the tourist’s price and the tourists’ income,
among other variables. The income variable is usually measured by the real GDP per capita of the
source markets, industrial production index, and the real consumption expenditure (Dogru et al.,
2017; Kim and Lee, 2017). However, when the focus is on estimating models that examine overall
tourism demand from all destinations’ source markets, then the use of the world real GDP can
represent the income variable (Algieri, 2006).
The price variable is commonly measured by the real exchange rate. This measure also mini-
mizes the risk of obtaining biased price elasticities when relative prices and exchange rates are
Kumar and Kumar 3

individually incorporated into the model (Seetaram et al., 2016). The real exchange rate allows a
prospective tourist to compare the cost of living in the destination against the local currency (Song
and Li, 2008). Moreover, it has been noted that leisure travelers are more price elastic than business
travelers because the latter can postpone their travel (Crouch, 1994). Depending on the availability
of data, studies have considered additional variables to account for transportation costs (Narayan,
2004), substitute prices (Seetaram, 2012), seasonality effects (Ridderstaat et al., 2014), and
structural breaks (Smeral, 2017) in a tourism demand model.
Further, the causal models for tourism demand have followed either the demand or gravity theories.
Some earlier studies like Anderson and Van Wincoop (2003) suggest that such an approach overcomes
the large data requirements of the demand-based model that follows the almost ideal demand system.
The gravity model specification includes trade which can act as the tourism price indicator. Durbarry
(2008) uses a gravity model to explain the inbound international tourism demand in the United
Kingdom. The regression method employed was the fixed and random effects. The results are con-
sistent with the demand theory in that tourism price, measured by the real exchange rate, has a negative
association with tourism demand. Moreover, the source country’s income has a positive effect on the
United Kingdom’s tourism demand. Interestingly, the study notes that the income of the destination is
negatively associated with tourism demand, and that travel distance has a positive association.
Digital tourism refers to the application of ICT to create a substantive user experience for the
tourist (Adeola and Evans, 2019a; Benyon et al., 2014). Recent studies have shown that ICT like
smartphones and the Internet can have positive impacts on the tourism industry, in terms of, among
other things, easing communication channels, providing efficient payment mechanisms, and access
to useful information for decision-making (Law et al., 2018; Tan et al., 2017; Wang et al., 2018).
Focusing on the e-commerce industry, Werthner and Ricci (2004) highlight that the tourism
sector can be a positive driver. This and some other studies (Buhalis, 1998; Buhalis and Law, 2008;
Navı́o-Marco et al., 2018) have established a plausible link between tourism and technology. The
ICT-tourism is characterized by consumer demand, technological innovations, and industry
functions. From the consumer demand perspective, ICT enables tourists to access up-to-date
information on reservations at a fraction of the cost and provides relevant information regarding
destinations, resorts and hotels, and suite of activities (Buhalis and Law, 2008; Li and Buhalis,
2005; Mills and Law, 2004; Niininen et al., 2007; O’Connor, 1999; O’Connor et al., 2001). In this
regard, ICT can promote word-of-mouse effect through review and post-travel reports on websites
and travel forums (Gelb and Sundaram, 2002). Subsequently, ICT can reduce time lags due to
lengthy information search, and the uncertainty that may arise from expensive travels and bad
experiences (Fodness and Murray, 1997; Harrison-Walker, 2001; Song et al., 2003; cf. Spencer,
2019). In an earlier study, Buhalis (1998) notes that many service providers use ICT to communicate
prices and special offers to prospective tourists. Savings from lower prices, commissions, or reduced
airfares means tourists have more to spend at a prospective destination (Clemons et al., 2002; Luo
et al., 2004). Additionally, through easy access to information supported by ICT, a well-informed
tourist is better able to interact with the locals, find special offers and other deals that meet his or her
tastes, and add a personal touch to the trip (Kotiloglu et al., 2017). The use of smartphones has greatly
facilitated these aspects among other things like travel apps to help in route mapping, booking tickets
and accommodation, and searching for packaged tours (Adeola and Evans, 2019a).
While the theoretical link between ICT and tourism is clear, there are a few studies that have
empirically examined the relationship between the two (Adeola and Evans, 2019a, 2019b). Adeola
and Evans (2019a) examine the linear and nonlinear effects of mobile phones and Internet in Africa
over the period 1996–2017 using the systems generalized method of moments approach. They note
4 Tourism Economics XX(X)

a U-shaped response between mobile penetration, Internet usage, and tourism. Their results
indicate a unidirectional causality from mobile usage to tourism demand. In another study, Adeola
and Evans (2019b) relate ICT infrastructure to tourism development in African countries over the
period 1996–2016 using the dynamic gravity model. They find that ICT infrastructure has a
positive and statistically significant effect on visitor arrivals. Moreover, the study notes that
additional drivers of tourism demand are the bilateral real exchange rate and the real per capita
GDP of the origin countries. However, it was noted that distance and visitor arrivals are negatively
correlated which supports the view that greater travel distance could be due to higher travel costs.

Methods and data

Cointegration, long run, and short run
The basic model specification is consistent with earlier studies (Durbarry, 2008; Lin et al., 2015)
and follows the autoregressive distributed lag (ARDL) framework
q1
X q2
X q3
X
Dln Qi;t ¼ 1 þ J1j Dln Qi;tj þ J2j Dln Pi;tj þ J3j Dln Yi;tj
j¼1 j¼0 j¼0
q4
X q5
X ð1Þ
þ J4j Dln YDi;tj þ J5j Dln ICTi;tj þ ’1 ln Qi;t1 þ ’2 lnPi;t1 þ ’3 lnYi;t1
j¼0 j¼0
þ ’4 ln YDi;t1 þ ’5 ln ICTi;t1 þ ui;t
where Qi;t is visitor arrivals in destination i, 1 is the deterministic component which includes the
intercept term and time trend, Pi;t is the tourism
 price in destination i, Yi;t is the tourist’s income, YDi;t
is the income in the destination, ICTi;t 2 MOBi;t ; BBi;t is either the number of mobile subscrip-
tions MOBi;t or the number of broadband subscriptions BBi;t , aLR ¼ ’2 =’1 is the price elasticity
of tourism demand, b LR ¼ ’3 =’1 is the income elasticity of tourism demand, qLR ¼ ’4 =’1 is the
destination income elasticity of tourism demand, ’LR ¼ ’5 =’1 is the ICT elasticity of demand,
1 < ’1 < 0 is the error correction term’s (ECT) coefficient, and ui;t is the residual term.
For estimation, we use the PMG estimator developed by Pesaran et al. (1999). This is a panel
ARDL approach and the model is estimated with maximum likelihood with the short-run indi-
vidual heterogeneous effects (Pesaran and Smith, 1995) and the long-run homogenous effects. The
procedure is an intermediate case between the mean group and dynamic fixed panel estimator (cf.
Khoshnevis-Yazdi and Dariani, 2019). The procedure can be applied with Ið0Þ and Ið1Þ data.
Moreover, it avoids the need to examine cross-sectional dependence and the need to examine
cointegration due to the long-run homogeneity (Goh et al., 2018).
The Hausman homogeneity test is an integral part of the PMG analysis. It tests the null
hypothesis of that pooling of the long-run coefficients is appropriate against the alternative that
long-run effects poolability is invalid (Asafu-Adjaye et al., 2016). The null hypothesis requires that
the difference between the mean group and PMG is not systematic (Asafu-Adjaye et al., 2016).
Additional tests carried out are the unit roots test which assumes common AR effects (Levin et al.,
2002) and individual AR effects (Im et al., 2003), and the tests for robustness in the presence of
cross-sectional dependence (Pesaran, 2007). Additionally, we test for cross-sectional dependence
using the Breusch and Pagan Lagrange multiplier (LM), Pesaran’s scaled LM, and Pesaran’s bias-
corrected scaled LM tests. Cointegration test follows the Pedroni’s (2004) and Kao’s (1999) tests.
The two cointegration tests assume the null hypothesis of no cointegration.
Kumar and Kumar 5

Causality
We apply two tests to assess the direction of causality. To test for bivariate causality, we use
the Granger causality test developed by Dumitrescu and Hurlin (2012) with insights from
some recent tourism demand studies (Dogru and Bulut, 2018; Tugcu, 2014). The approach is a
non-causality test for heterogeneous panels with fixed coefficients in a bivariate vector
autoregression (VAR) model (Tugcu, 2014). Under the null hypothesis, there is no causality
for any cross-sectional units of the panel, termed as the homogenous non-causality (HNC)
hypothesis. Under the alternative hypothesis, at least one cross-sectional subgroup has a
causal relationship from the explanatory to the independent variable (Tugcu, 2014). The Wald
statistic is averaged for each cross-sectional unit to develop the panel version of the test static
to test the HNC hypothesis (Dumitrescu and Hurlin, 2012). The approach has good statistical
properties even in the presence of cross-sectional dependence and can be applied irrespective
of the structure of the panel (Alam and Paramati, 2016; Dogru and Bulut, 2018; Tugcu, 2014).
Additionally, to test for multivariate causality, we apply the Granger causality test of
Toda and Yamamoto (1995). The approach enables causality to be determined with a
mixture of Ið0Þ, Ið1Þ, and fractionally integrated variables. Moreover, causality can be
examined in the absence of cointegration. For this purpose, the following VAR models
are specified
k
X d max
X k
X
In Qt ¼ a0 þ a1i In Qti þ a2j In Qtj þ a3i In Pti
i¼1 j¼kþ1 i¼1
d max
X k
X d max
X k
X
þ a4j In Ptj þ a5i In Yti þ a6j In Ytj þ a7i In YDti ð2Þ
j¼kþ1 i¼1 j¼kþ1 i¼1
d max
X X k dmax
X
þ a8j In YDtj þ a9i In ICTti þ a10j In ICTtj þ u1t
j¼kþ1 i¼1 j¼kþ1

k
X d max
X k
X
In Pt ¼ b 0 þ b1i In Qti þ b2j In Qtj þ b 3i In Pti
i¼1 j¼kþ1 i¼1
d max
X k
X dmax
X k
X
þ b4j In Ptj þ b5i In Yti þ b 6j In Ytj þ b 7i In YDti ð3Þ
j¼kþ1 i¼1 j¼kþ1 i¼1
d max
X Xk dmax
X
þ b8j In YDtj þ b 9i In ICTti þ b10j In ICTtj þ u2t
j¼kþ1 i¼1 j¼kþ1

k
X d max
X k
X d max
X
In Yt ¼ z 0 þ z 1i In Qti þ z 2j In Qtj þ z 3i In Pti þ z 4j In Ptj
i¼1 j¼kþ1 i¼1 j¼kþ1
k
X dmax
X k
X dmax
X
þ z 5i In Yti þ z 6j In Ytj þ z 7i In YDti þ z 8j In YDtj ð4Þ
i¼1 j¼kþ1 i¼1 j¼kþ1
Xk Xdmax
þ z 9i In ICTti þ z 10j In ICTtj þ u3t
i¼1 j¼kþ1
6 Tourism Economics XX(X)

k
X d max
X k
X
In YDt ¼ h0 þ h1i In Qti þ h2j In Qtj þ h3i In Pti
i¼1 j¼kþ1 i¼1
dmax
X k
X dmax
X k
X
þ h4j In Ptj þ h5i In Yti þ h6j In Ytj þ h7i In YDti ð5Þ
j¼kþ1 i¼1 j¼kþ1 i¼1
d max
X Xk d max
X
þ h8j In YDtj þ h9i In ICTti þ h10j In ICTtj þ u4t
j¼kþ1 i¼1 j¼kþ1

k
X d max
X k
X
In ICTt ¼ J0 þ J1i In Qti þ J2j In Qtj þ J3i In Pti
i¼1 j¼kþ1 i¼1
d max
X k
X d max
X k
X
þ J4j In Ptj þ J5i In Yti þ J6j In Ytj þ J7i In YDti ð6Þ
j¼kþ1 i¼1 j¼kþ1 i¼1
d max
X Xk d max
X
þ J8j In YDtj þ J9i In ICTti þ J10j In ICTtj þ u5t
j¼kþ1 i¼1 j¼kþ1

The null hypothesis of the absence of causality is rejected if the probability value (p value) is
less than 10%. Hence, in equation (2), Granger causality from ICTt to Qt is noted if a9i 6¼ 08i,
and in equation (6) Granger causality from Qt to ICTt is noted if J1i 6¼ 08i. The stability of the
VAR model is confirmed if the inverse roots of the characteristic polynomial lie within the positive
and negative unit circle. Stability of the model can be achieved by the use of either optimal lags in
the VAR specification or the inclusion of the appropriate exogenous instruments such as the trend
term, structural break dummies, or seasonality dummies.

Data
The data for visitor arrivals, real effective exchange rate, destination per capita GDP, mobile
subscriptions, and fixed broadband subscriptions are gathered from the World Development
Indicators and Global Development Finance database (World Bank, 2019). The data for visitor
arrivals are from 1995 to 2017. The per capita real GDP data are from 1960 to 2017 for China,
France, Italy, Mexico, Spain, the United Kingdom, and the United States. For Germany, data on
per capita real GDP are from 1970 to 2017, and for Russia, they are from 1989 to 2017. The data
for mobile subscriptions are from 1987 to 2017 for China, from 1986 to 2017 for France, from 1985
to 2017 for Germany, Italy, and the United Kingdom, from 1988 to 2017 for Mexico, from 1991 to
2017 for Russia, from 1986 to 2017 for Spain, and from 1984 to 2017 for the United States. Data
for the real effective exchange rate are from 1980 to 2017 for China, France, Italy, Mexico, Spain,
and the United States, and for Germany and the United Kingdom, they are from 1979 to 2017. The
data for world per capita GDP are used as a proxy for source market income effects (Algieri, 2006).
These data are extracted from the Federal Reserve Economic Database (FRED, 2019) and covers
the period 1960–2017. A balanced panel is created with 23 years of annual data for the nine
countries, thus a total of 207 observations with mobile subscriptions as a proxy for ICT. However,
due to lack of data on broadband subscription as a proxy for ICT, we have 16 years of data for nine
countries, thus a total of 144 observations. All variables are transformed into logarithms to
interpret the coefficients as elasticities and minimize standard errors.
 Table 1. Descriptive statistics and correlation matrix.

Real effective World real Destination real Broadband

Statistics Visitor arrivals exchange rate GDP per capita GDP per capita Mobile subscriptions subscriptions

Panel A: Descriptive statistics

Mean 41,185,816 99.37 8997.06 27,960.38 1:39  108 34,747,224
Median 36,513,000 100 9184.82 34,318.50 66,681,000 15,725,000
Maximum 86,861,000 131.11 10634 53,128.54 1:47  109 3:94  108
Minimum 10,290,000 46.75 7389.72 1227.556 88,526.00 11,000
Standard deviation 19,657,424 13.26 976.90 15,659.58 2:43  108 57,320,858
Skewness 0.62 0.58 0.04 0.42 3.67 3.698647
Kurtosis 2.29 4.96 1.75 1.65 17.14 19.06
Normality 17.92 (<0.01)* 45.09 (<0.01)* 13.49 (<0.01)* 22.05 (<0.01)* 2192.97 (<0.01)* 1875.95 (<0.01)
Panel B: Correlation matrix
Visitor arrivals 1.00
Real effective exchange rate 0.03 (0.67) 1.00
World real GDP per capita 0.29 (<0.01)* 0.02 (0.74) 1.00
Destination real GDP per capita 0.36 (<0.01)* 0.26 (<0.01)* 0.06 (0.44) 1.00
Mobile subscriptions 0.18 (0.02)** 0.29 (<0.01)* 0.24 (<0.01)* 0.39 (<0.01)* 1.00
Broadband subscriptions 0.29 (<0.01)* 0.37 (<0.01)* 0.35 (<0.01)* 0.16 (0.05)** 0.93 (<0.01)* 1.00

Source: Authors’ estimation in Eviews 10.

Note: p Value in parenthesis.
*Significant at 1%.
**Significant at 5%.
7
8 Tourism Economics XX(X)

Table 2. Cross-sectional dependence test.

Null hypothesis Model Breusch–Pagan LM Pesaran scaled LM Pesaran CD

No cross-sectional Mobile 182.56 [36] (<0.01)* 17.27 [36] (<0.01)* 9.06 [36] (<0.01)*
dependence in residuals
Broadband 139.43 [36] (<0.01)* 12.19 [36] (<0.01)* 7.79 [36] (<0.01)*

Source: Authors’ estimation in Eviews 10.

Note: LM: Lagrange multiplier; CD: Cross-section Dependence. Degrees of freedom in square parenthesis, p value in round
parenthesis.
*Significant at 1%.

Results
Descriptive statistics and correlation matrix
In Table 1, we present the descriptive statistics and correlation matrix. A positive correlation
is noted between mobile subscriptions and visitor arrivals, and broadband subscriptions and
visitor arrivals.

Cross-sectional dependence and unit root

Results in Table 2 indicate the presence of cross-sectional dependence. Subsequently, we examine
the presence of unit roots, and the results are reported in Table 3. We note from the unit root test
results that the maximum order of integration is one, and a mix of order of integration exists
between series.

Cointegration and poolability

Based on the Hausman test results, we note that the series are cointegrated. This is confirmed via
the Pedroni and Kao cointegration tests (Table 4). Additionally, the null hypothesis of long-run
homogeneity cannot be rejected, and thus, the PMG method is appropriate for further estimation
(Table 5).

Long run and short run

The results with mobile and broadband subscriptions are reported in Tables 6 and 7, respectively.
In both cases, the optimal specification is based on the Akaike information criterion and the lag
length of 1 is applied.
In the mobile subscriptions model, the elasticity of mobile subscriptions with respect to visitor
arrivals is 0.04. This implies that a 1% increase in mobile subscriptions would increase interna-
tional arrivals by 0.04%, ceteris paribus. The price coefficient is 0.71, which indicates an
inelastic price. The income elasticity is 1.58 which means that the countries are luxury destinations
(Crouch, 1994). The ECT indicates that about 42% of disequilibrium errors are corrected each year
and that equilibrium is achieved in about 2.4 (1/0.42) years. Notably, the destination’s income
coefficient (0.57) is statistically significant in the short run only (Table 6).
In Table 7, broadband subscriptions is used as a proxy for ICT. We note its elasticity with
respect to visitor arrivals is 0.11. Thus, a 1% increase in mobile subscriptions would increase
 Table 3. Unit root test.

LLC IPS Fisher-ADF Fisher-PP CADF

Variables Level 1st diff. Level 1st diff. Level 1st diff. level 1st diff. level 1st diff.

lnQi;t 0.41 [1] 8.10 [0] 2.82 [1] 7.92 [0] 10.06 [1] 90.31 [0] 23.46 [1] 89.78 [0] 1.59 [2] 2.36 [1]
(0.66) (<0.01)* (0.99) (<0.01)* (0.93) (<0.01)* (0.17) (<0.01)* (0.71) (0.03)**
lnPi;t 1.99 [0] 9.14 [1] 1.89 [0] 7.47 [1] 29.37 [0] 84.19 [1] 25.20 [0] 80.06 [1] 2.43 [1] 2.57 [1]
(0.02)** (<0.01)* (0.02)** (<0.01)* (0.04)** (<0.01)* (0.12) (<0.01)* (0.01)** (<0.01)*
lnYi;t 2.05 [0] 11.32 [0] 2.38 [0] 8.81 [0] 4.00 [0] 99.76 [0] 6.79 [0] 116.22 [0] 2.61 [1] 2.31 [1]
(0.02)** (<0.01)* (0.99) (<0.01)* (0.99) (<0.01)* (0.99) (<0.01)* (0.99) (0.03)**
lnYDi;t 1.84 [2] 5.20 [1] 1.29 [2] 4.79 [1] 25.79 [2] 56.69 [2] 29.83 [2] 72.31 [2] 2.59 [1] 2.42 [2]
(0.03)** (<0.01)* (0.09)*** (<0.01)* (0.11) (<0.01)* (0.04)** (<0.01)* (<0.01)* (0.02)**
lnMOBi;t 7.51 [4] 9.19 [4] 14.12 [4] 7.12 [4] 178.23 [4] 176.68 [4] 511.63 [4] 23.81 [4] 2.87 [1] 3.07 [2]
(<0.01)* (<0.01)* (<0.01)* (<0.01)* (<0.01)* (<0.01)* (<0.01)* (0.17) (<0.01)* (<0.01)*
lnBBi;t 8.34 [9] 14.39 [9] 8.10 [9] 11.85 [9] 89.18 [9] 106.33 [9] 186.09 [9] 116.09 [9] 3.54 [1] 2.54 [1]
(<0.01)* (<0.01)* (<0.01)* (<0.01)* (<0.01)* (<0.01)* (<0.01)* (0.17)* (<0.01)* (0.01)**

Source: Authors’ estimation in Eviews 10 and STATA 13.

Note: Lag length in square parenthesis, p value in round parenthesis. LLC: Levin–Lin–Chu; IPS: Im–Pesaran–Shin; FADF: Fisher–Augmented Dickey–Fuller test; FPP: Fisher–Phillips–
Perron test; CADF: Covariate augmented Dickey–Fuller test. Test assumes intercept only. CADF test is based on Pesaran.
*Stationary at 1% level.
**Stationary at 5% level.
***Stationary at 10% level.
9
10 Tourism Economics XX(X)

Table 4. Cointegration tests.

Mobile subscriptions model

Panel A: Pedroni cointegration

Alternative hypothesis: common AR coefficients (within-dimension)

Statistic Prob. Weighted statistic Prob.

Panel v statistic 1.29*** 0.09 1.25*** 0.09
Panel r statistic 1.08 0.86 0.65 0.74
Panel PP statistic 0.39 0.34 1.57** 0.05
Panel ADF statistic 3.16* <0.01 3.03* <0.01

Alternative hypothesis: individual AR coefficients (between-dimension)

Statistic Prob.
Group r statistic 1.94 0.97
Group PP statistic 1.09 0.13
Group ADF statistic 3.23* <0.01

Panel B: Kao cointegration

ADF statistic 2.63* <0.01

Broadband subscriptions model

Panel A: Pedroni cointegration

Alternative hypothesis: common AR coefficients (within-dimension)

Statistic Prob. Weighted statistic Prob.

Panel v statistic 1.31 0.91 0.59 0.72
Panel r statistic 2.94 0.99 2.46 0.99
Panel PP statistic 0.49 0.31 2.44* <0.01
Panel ADF statistic 0.29 0.62 1.51*** 0.07

Alternative hypothesis: individual AR coefficients (between-dimension)

Statistic Prob.
Group r statistic 3.62 0.99
Group PP statistic 5.68* <0.01
Group ADF statistic 2.65* <0.01

Panel B: Kao cointegration

ADF statistic 2.53* <0.01

Source: Authors’ estimation using Eviews 10.

*Cointegrated at 1% level.
**Cointegrated at 5% level.
***Cointegrated at 10% level.
Kumar and Kumar 11

Table 5. Hausman poolability test.

Null hypothesis Model Test statistic p Value

Long-run poolability is appropriate Mobile 2 ð4Þ ¼ 0.28 0.99

Broadband 2 ð4Þ ¼ 0.37 0.98

Source: Authors’ estimation using Stata 13.

Table 6. PMG long-run and short-run estimates—mobile subscriptions model.

Variable Coefficient Standard error T statistic p Value

Panel A: Long run

lnPi;t 0.71*** 0.1220 5.7960 <0.01

lnYi;t 1.58*** 0.3946 3.9948 <0.01
lnYDi;t 0.41 0.2824 1.4551 0.15
lnMOBi;t 0.04** 0.0152 2.4481 0.02

Panel B: Short run

ECTi;t1 0.42*** 0.0933 4.4530 <0.01

DlnPi;t 0.17** 0.0911 1.9450 0.05
DlnYi;t 0.70 0.4580 1.5421 0.12
DlnYDi;t 0.57*** 0.2660 2.1595 0.03
DlnMOBi;t 0.06 0.0587 1.1174 0.26
Constant 4.05*** 0.9720 4.1679 <0.01
Trend 0.01 0.0054 1.0206 0.30

Panel C: Model statistics

Overall R2 ¼ 0.9999; adj. overall R2 ¼ 0.9988; SER ¼ 0.0566; 2N ¼ 7.87; p value ¼ 0.03. LL ¼ 393.9802; AIC ¼
3.1592; Specification: ARDL (1,1,1,1)

Note: N-normality test. AIC: Akaike information criterion; PMG: pooled mean group; ARDL: autoregressive distributed lag;
SER: standard error of regression; LL: log likelihood.
Source: Authors’ estimation using Eviews 10 and Stata 13.
*** and ** refers to significance level at 1% and 5%, respectively.

international arrivals by 0.11%, ceteris paribus. The price elasticity is estimated at 0.88, which is
also price inelastic, and the income elasticity is estimated at 1.83. Based on the coefficient of the
ECT, about 38% of disequilibrium is corrected each year. Further, the destinations’ income has a
short-run effect only. Interestingly, the outcomes are consistent with the results obtained in Table
6, where mobile subscriptions is used as a proxy for ICT.

Causality
Causality based on the Dumitrescu and Hurlin (2012) and Toda and Yamamoto (1995) are reported
in Table 8. In both cases, mobile and broadband subscriptions as proxies for ICT indicate a
12 Tourism Economics XX(X)

Table 7. PMG long-run and short-run estimates—broadband subscriptions model.

Variable Coefficient Standard error T statistic p Value

Panel A: Long run

lnPi;t 0.88*** 0.2033 4.3374 <0.01

lnYi;t 1.83*** 0.2414 7.5926 <0.01
lnYDi;t 0.04 0.1261 0.3176 0.75
lnBBi;t 0.11** 0.0436 2.5928 0.01

Panel B: Short run

ECTi;t1 0.38*** 0.1175 3.2467 <0.01

DlnPi;t 0.21 0.1811 1.1663 0.24
DlnYi;t 0.41 0.5329 0.7750 0.44
DlnYDi;t 0.66** 0.3029 2.2106 0.02
DlnBBi;t 0.03 0.0303 1.0790 0.28
Constant 0.98*** 0.3227 3.0624 <0.01

Panel C: Model statistics

Overall R2 ¼ 0.9853; adj. overall R2 ¼ 0.9700; SER ¼ 0.0498; 2N ¼ 3.73; p value ¼ 0.15. LL ¼ 301.4915; AIC ¼
3.3818; Specification: ARDL (1,1,1,1)

Note: N-normality test. AIC: Akaike information criterion; PMG: pooled mean group; ARDL: autoregressive distributed lag;
SER: standard error of regression; LL: log likelihood.
Source: Authors’ estimation using Eviews 10 and Stata 13.
*** and ** refers to significance level at 1% and 5%, respectively.

unidirectional causality, which means that ICT cause visitor arrivals and hence tourism demand.
Additionally, it is noted that ICT cause destination’s real GDP, which duly supports technology-led
growth hypothesis.

Discussion and conclusions

The study set out to examine the effect of ICT on tourism demand in nine major tourist destina-
tions, based on the largest number of visitor arrivals. It was noted that cointegration exists between
ICT and tourism demand. Mobile and broadband subscriptions were used to proxy for ICT.
Additionally, price, income, and destination’s income were included in the estimation. Our sample
consisted of a balanced panel with 207 observations in the case of mobile subscription and 144
observations in the case of broadband subscription. Cross-sectional dependence, unit root, and
cointegration tests were carried out, accordingly.
We note consistent results in both cases. The short- and the long-run results with respect to
visitor arrivals indicate that ICT is positively associated, price is negatively associated, and source
country income is positively associated—the latter implies that the major tourist destinations are of
luxury type. Moreover, it is noted that the destination country’s growth has only a short-run
positive effect on tourism demand. Further, we note a unidirectional causality from ICT to tour-
ism demand and destination country’s income.
 Table 8. Causality tests.

Toda–Yamamoto (1995) Dumitrescu–Hurlin (2012)

X variables lnQi;t lnPi;t lnYi;t lnYDi;t lnICTi;t lnQi;t lnPi;t lnYi;t lnYDi;t lnICTi;t

Panel A: Mobile subscriptions model

lnQi;t — 2 ð5Þ ¼ 16.54 2 ð5Þ ¼ 6.10 2 ð5Þ ¼ 3.02 2 ð5Þ ¼ 4.95 — 2 ð3Þ ¼ 4.73 2 ð3Þ ¼ 3.20 2 ð3Þ ¼ 5.97 2 ð3Þ ¼ 3.66
[<0.01]* [0.29] [0.69] [0.41] [0.32] [0.77] [0.04]** [0.92]
lnPi;t 2 ð5Þ ¼ 3.61 — 2 ð5Þ ¼ 13.26 2 ð5Þ ¼ 15.78 2 ð5Þ ¼ 20.14 2 ð3Þ ¼ 4.18 — 2 ð3Þ ¼ 1.36 2 ð3Þ ¼ 2.76 2 ð3Þ ¼ 5.09
[0.60] [0.02]** [<0.01]* [<0.01]* [0.59] [0.07]*** [0.52] [0.19]
lnYi;t 2 ð5Þ ¼ 21.92 2 ð5Þ ¼ 1.77 — 2 ð5Þ ¼ 53.04 2 ð5Þ ¼ 13.86 2 ð3Þ ¼ 7.24 2 ð3Þ ¼ 3.75 — 2 ð3Þ ¼ 4.63 2 ð3Þ ¼ 2.90
[<0.01]* [0.87] [<0.01]* [0.02]** [<0.01]* [0.86] [0.37] [0.59]
lnYDi;t 2 ð5Þ ¼ 11.83 2 ð5Þ ¼ 3.15 2 ð5Þ ¼ 2.31 — 2 ð5Þ ¼ 27.98 2 ð3Þ ¼ 3.02 2 ð3Þ ¼ 6.68 2 ð3Þ ¼ 3.85 — 2 ð3Þ ¼ 4.07
[0.03]** [0.67] [0.81] [<0.01]* [0.66] [<0.01]* [0.26] [0.66]
lnICTi;t 2 ð5Þ ¼ 9.44 2 ð5Þ ¼ 2.83 2 ð5Þ ¼ 3.69 2 ð5Þ ¼ 12.86 — 2 ð3Þ ¼ 6.87 2 ð3Þ ¼ 8.83 2 ð3Þ ¼ 1.84 2 ð3Þ ¼ 8.08 —
[0.04]*** [0.73] [0.38] [0.02]* [<0.01]* [<0.01]* [0.15] [<0.01]*
All 2 ð20Þ ¼ 32.32 2 ð20Þ ¼ 25.91 2 ð20Þ ¼ 32.78 2 ð20Þ ¼ 76.73 2 ð20Þ ¼ 73.84 — — — — —
[0.04]** [0.17] [0.04]* [<0.01]* [<0.01]*
Panel B: Broadband subscriptions model
lnQi;t — 2 ð1Þ ¼ 0.04 2 ð1Þ ¼ 0.24 2 ð1Þ ¼ 0.58 2 ð1Þ ¼ 3.16 — 2 ð1Þ ¼ 2.96 2 ð1Þ ¼ 0.20 2 ð1Þ ¼ 5.89 2 ð1Þ ¼ 1.83
[0.83] [0.62] [0.44] [0.05]** [<0.01]* [0.11] [<0.01]* [0.34]
lnPi;t 2 ð1Þ ¼ 0.02 — 2 ð1Þ ¼ 0.64 2 ð1Þ ¼ 9.10 2 ð1Þ ¼ 0.47 2 ð1Þ ¼ 1.19 — 2 ð1Þ ¼ 0.20 2 ð1Þ ¼ 7.14 2 ð1Þ ¼ 6.04
[0.88] [0.42] [<0.01]* [0.49] [0.89] [0.11] [<0.01]* [<0.01]*
lnYi;t 2 ð1Þ ¼ 7.39 2 ð1Þ ¼ 0.22 — 2 ð1Þ ¼ 19.72 2 ð1Þ ¼ 4.07 2 ð1Þ ¼ 1.57 2 ð1Þ ¼ 2.56 — 2 ð1Þ ¼ 2.07 2 ð1Þ ¼ 3.67
[<0.01]* [0.64] [<0.01]* [0.04]** [0.43] [0.01]** [0.11] [<0.01]*
lnYDi;t 2 ð1Þ ¼ 0.22 2 ð1Þ ¼ 0.46 2 ð1Þ ¼ 0.13 — 2 ð1Þ ¼ 20.80 2 ð1Þ ¼ 2.43 2 ð1Þ ¼ 4.12 2 ð1Þ ¼ 0.72 — 2 ð1Þ ¼ 8.67
[0.64] [0.49] [0.82] [<0.01]* [0.02]** [<0.01]* [0.49] [<0.01]*
lnICTi;t 2 ð1Þ ¼ 3.46 2 ð1Þ ¼ 4.67 2 ð1Þ ¼ 1.25 2 ð1Þ ¼ 20.80 — 2 ð1Þ ¼ 3.57 2 ð1Þ ¼ 4.27 2 ð1Þ ¼ 0.18 2 ð1Þ ¼ 2.47 —
[0.03]** [0.03]** [0.26] [<0.01]* [<0.01]* [<0.01]* [0.12] [0.05]***
All 2 ð1Þ ¼ 10.05 2 ð1Þ ¼ 5.46 2 ð1Þ ¼ 1.35 2 ð1Þ ¼ 41.08 2 ð1Þ ¼ 32.81 — — — — —
[0.05]** [0.24] [0.85] [<0.01]* [<0.01]*

Source: Authors’ estimation using Eviews 10.

Note: p Value in square parenthesis.
*Significant causality at 1%.
**Significant causality at 5%.
***Significant causality at 10%.
13
14 Tourism Economics XX(X)

The study has some clear contributions. First, the study reinforces the role of technology as a
driver of tourism demand and confirms that the major countries are luxury destinations. Second,
the study examines major tourism destinations from the perspective of tourism-ICT literature,
which was previously absent. Third, consistent results based on the two measures of ICT indicate
that both mobile and broadband subscriptions are correlated, and thus can be used as reliable
indicators of ICT. Additionally, the study reinforces the ICT-led growth hypothesis in the major
tourist destinations. Our analysis underscores that ICT development as a subset of the broader
definition of infrastructure improves visitor arrivals to the major destinations, holding all other
things constant.
Future research can consider the links between the various digital platforms and visitor arrivals.
The role of ICT in the context of platforms like social media can be analyzed in relation to tourism
demand. Moreover, given that ICT is a broad term, additional indicators to proxy ICT development
can be identified and examined in relation to tourism demand. Of course, with a larger data set, it is
plausible to explore nonlinearity and asymmetries in tourism demand, namely, ICT, and subse-
quently examine the threshold levels of ICT.
Our results clearly indicate a strong link between ICT and tourism demand in major tourist
destinations (China, France, Germany, Italy, Mexico, Russia, Spain, the United Kingdom, and the
United States). Therefore, by enhancing the quality and coverage of technology infrastructure,
these destinations can effectively promote their tourism sector at a greater scale. Using ICT tools to
scale up digital tourism will be an effective strategy to improve tourism demand in the future.
Additionally, for future consideration, we propose the possibility of implementing artificial
intelligence and virtual tourism experience in tourism industry, especially in countries where
technology and connectivity are par excellence.

Acknowledgements
The authors sincerely thank the editors, Professors Rodolfo Baggio and Davide Provenzano, and the anon-
ymous reviewers for their comments and suggestions. The usual disclaimer applies.

Declaration of conflicting interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or pub-
lication of this article.

Funding
The authors received no financial support for the research, authorship, and/or publication of this article.

ORCID iD
Ronald Ravinesh Kumar https://orcid.org/0000-0001-9658-4896

Note
1. Turkey is excluded from the study due to unavailability of consistent data on its real effective exchange
rate.

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Author biographies
Nikeel Kumar holds Bachelor of Commerce in Economics and Finance and Master of Commerce in
Economics from the University of the South Pacific (USP). He has worked as tutor in Finance in the School
of Accounting and Finance at USP and received gold medal for outstanding student of undergraduate Finance
from the USP and postgraduate diploma in Economics from the University of Fiji. His current research
focuses on tourism demand, energy, and applied economics.

Ronald Ravinesh Kumar is a research member in the Department for Management of Science and Tech-
nology Development (DEMASTED), Informetrics Research Group, and Faculty of Social Sciences and
Humanities at the Ton Duc Thang University, Vietnam.