Income and Transport Cost: Multiple Responses to Tourists Arrivals in Zanzibar

Gerald Moses Mwasambili; Bahati Ilembo; Tukae Mbegalo

doi:10.51867/scimundi.4.2.15

Authors

Gerald Moses Mwasambili Faculty of Science & Technology, Department of Mathematics and Statistics Studies, Mzumbe University - Tanzania
Bahati Ilembo Faculty of Science & Technology, Department of Mathematics and Statistics Studies, Mzumbe University - Tanzania https://orcid.org/0000-0001-5991-2571
Tukae Mbegalo Faculty of Science & Technology, Department of Mathematics and Statistics Studies, Mzumbe University - Tanzania

DOI:

https://doi.org/10.51867/scimundi.4.2.15

Keywords:

Fixed Effect Model, Income, Tourist Arrivals, Transport Cost, Zanzibar

Abstract

The tourism sector plays an important role in the Zanzibar economy and continues to be a leading sector and the main contributor to the national GDP but this sector is faced unprecedented challenges and an existential threat from the impact of the COVID-19 virus. In this regard, this study aimed to analyse the determinants of international tourism demand from the top ten tourist’s origin countries to Zanzibar from 2005 to 2021 and to quantify their influence. In this study Gray’s travel motivation theory, Crompton’s motivations for pleasure vacation theory and Dann’s theory of push and pull factors were used to analyse behaviour of tourists and choice of destination. The study adopted panel data analysis and used long, strong balanced secondary panel data extracted from various sources to estimate the impact of GDP per capita as proxy of income, exchange rates, tourism infrastructure, price of crude oil as proxy of transport cost, consumer price indices adjusted by exchange rates as proxy of relative price and dummy variables to capture effects of Covid-19 and economic recession of 2008 on number of tourist arrivals as proxy for tourism demand in Zanzibar. Regression results of fixed effect model suggested that; at the 0.05 significance level, a one unit increase in GDP per capita results into 1.999 units increase in number of tourist arrivals and one unit increase in transport cost would decrease tourist arrivals by 64.991 units. Coefficients value of dummy variable COVID-19 implies that, on average, the number of tourist arrivals decreased on the year of occurrence of COVID-19 pandemic by 9,539 units. The coefficients of other independent variables exchange rates, tourism infrastructure, relative price and economic recession of 2008 bear the right sign even though they were not statistically significant at 0.05 levels. This study recommends that, the government and other stakeholders to work on marketing Zanzibar tourism product to the high-income countries and to work on reducing transport cost from origin countries to Zanzibar.

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