Does Biodiversity Matter In The Tourism Demand Model? International Evidence

This study aims to examine the role of natural attractions, measured by biodiversity in attracting international tourists. This study was conducted from 2010 to 2016 for 120 countries. Several static approaches such as Pooled Ordinary Least Square (POLS), Random Effect (RE) as well as Fixed Effect (FE) were used to estimate the static effect between biodiversity and international tourist arrivals. Overall, the robust standard error results show that the choice of a tourism destination is strongly related to biodiversity. Moreover, the outcome also reveals that GDP per capita, good governance, investment in the travel and tourism sector, as well as the internet are positively significant in determining the tourism demand. Surprisingly, both the exchange rate and life expectancy are insignificant in this study. Therefore, the role of the government is essential to ensure the policies are correctly implemented to enhance the development of the tourism sector.