Modeling tourism demand: Theoretical and empirical considerations for future research

Although tourism literature is replete with tourism demand studies, numerous empirical and theoretical issues remain unresolved. The majority of the extant studies center around replication of well-established theory of tourism demand with applications of contemporary empirical techniques for different sets of tourist-originating and receiving countries. However, the application of empirical techniques, especially panel data methods that are utilized to model tourism demand, seems to be arbitrarily chosen without due consideration of theoretical and empirical ramifications. The purpose of this study is to present a critical review of the tourism demand literature. We assessed the theoretical and methodological inaccuracies when modeling tourism demand in general and when applying panel data models in particular. We provided a guide to application of panel data techniques when modeling tourism demand. The article ends with discussions of an agenda for future research to fill the gaps in the extant literature and advance tourism demand research.