Modeling and Forecasting Chinese Outbound Tourism: An Econometric Approach

This paper aims to examine the demand for outbound tourism by mainland Chinese residents to 11 international destinations, and provide long-run forecasts up to the year 2020. The empirical results suggest that the income level and the cost of a stay at a tourism destination compared with that of staying at a Chinese tourism destination are two important factors that affect Chinese residents' traveling abroad. Results also show that the long-run income elasticities for all destinations range from 0.406 to 1.785, while the own price elasticities vary from -9.490 to -0.152. Based on the response patterns of tourism demand to income and price changes, five main categories of Chinese outbound tourism markets are identified. An ex ante forecasting exercise is also carried out which shows that outbound tourists from China mainly travel to Asian countries/regions during the period 2012-2020. The total number of outbound tourists is expected to reach 138.7 million by 2020.