Tourism Demand and Exchange Rates in Asian Countries: New Evidence from Copulas Approach

Asian Pacific has become a rapidly growing tourism region and turn into the second best performing region in the world since 2001. Over the last decade, the average annual growth rate of international tourist visit Asia and the Pacific had reached 7.1% between 2000 and 2005. However, the decision of where to go for international tourists would be influenced by the exchange rate between mother country and the destination. The more information on traveling expenses among different destinations were gathered and analyzed, the more price-sensitivity travelers will shift their choice from the high exchange rate to the lower one. Thus, the exchange rate regime is essential to international tourism and even could be treated as a promoting policy to tourism.The main purpose of this paper is to exam the Copula-based measures of dependence structure between international tourism demand and exchange rates in Asian countries based on the monthly data. According to empirical results, the negative relationship between international tourists and exchange rate is presented. The impact of the currency appreciation on tourism demand is more greatly than the currency depreciation. Therefore, this delivers important information that there are opportunities for tourism operators to focus their marketing efforts in trying and offsetting potential for reduced demands.