Estimating the Impact of Economic Factors on Tourism: Evidence from Hong Kong

This study examines issues relating to the impact of economic factors on tourist expenditure and hotel room occupancy rate. The article first presents an overview of the tourism industry in Hong Kong, an examination of the particular aspects of the tourism industry, and an estimate of tourist spending and hotel room occupancy rates. Using an expectations model, real tourism expenditure is found to depend on expected income, expected exchange rate and price level. The results of the article also reveal that the equilibrium hotel occupancy rate is a function of tourist flows, exchange rates, price level and length of stay.