The effect of virtual proximity and digital adoption on international tourism flows to Southern Europe

This paper extends the traditional gravity model to explain the effect of digitalization on international tourism flows to five Southern European countries, where tourism plays an important economic role. The analysis is based on balanced panel data covering the period 2004-2019. Internet-user statistics and Google Trends search data are used as a proxy for digital adoption and virtual proximity, respectively, by source markets. Results lend support to the notion that virtual proximity rather than digital adoption aided international travel, demonstrating that digitalization cannot be interpreted as a fluid and vague concept that exerts a consistent effect. Results also present evidence that Southern European countries should not be treated as a block of homogenous destinations. These findings inform stakeholders regarding the significance of digital platforms as strategic tools to empower consumers.