Empirical Research Based On Gravity Model For Inbound Tourism In Mauritius

Tourism demand has sensitive and vulnerable characteristics. Inbound tourism demand is easily influenced by political, economical, social, environmental and other types of unexpected events. As a result, inbound tourist arrivals is, to a great extend, volatile, i.e. it is liable to change rapidly and unpredictably. Being the third largest foreign exchange pillar of Mauritius’s economy, tourism industry is an important source of foreign earnings. Due to the financial crisis and debt crisis in recent years, its tourist arrivals from Europe has been slowing down. But, on the other hand, China has become the fastest growing source of inbound tourism. Based on the current situation of inbound tourism, this empirical research uses a gravity model to analyse the factors influencing inbound tourism of the main source markets of Mauritius.In terms of the current situation of inbound tourism, Mauritius is maintaining a slow growth of inbound tourism and facing a steady development trend. Traditional source markets (Europe and Africa) are showing gradual recovery, slow growth and stable tourism consumption while emerging source market (Asia) is showing growing rate and strong consumption ability, but with fluctuations and shorter length of stay in recent years. In terms of demand characteristics, the inbound tourists show great travel motivation for seaside resorts and have high recognition for Mauritius as an island of scenery and multi-ethnic cultures image. In terms of inbound tourism demand, although the tourism resources in Mauritius is abundant but based on the elements of tourism supply, the reception size is small and showing slow growth. Besides, the types of tourism activities and tourism products are montonous, the service quality of tourism infrastructure and service facilities is low, the marketing system and reception service system is yet to be improved. The protection and development for tourism resources and service facilities still show weaknesses.With the rise of BRIC countries (Brazil, Russia, India and China), Mauritius faces a new opportunity for development. But with its insufficient inbound tourism demand, tourism consumptioin fluctuations, and its market competitors and substitutable destinations such as Maldives, Seychelles, etc., Mauritius has limited appeal. Therefore, there is a need for further analysis in its inbound tourism consumption behavior in order to enhance the development of inbound tourism for Mauritius.In this paper, the Mauritius inbound tourism model is based on Wilson’s gravity model and consists of 10 variables:the annual tourist arrivals from source country is taken as a dependent variable, GDP of source country, travel rate of source country, disposable income per capita of source country, population of source country, time distance, exchange rate, destination appeal, destination consumption price index and visa exemption are taken as independent variables. The annual data 2000-2014 for the four major source countries France, United Kingdom, South Africa and China are selected to carry out a panel data empirical analysis in order to identify the important factors affecting the inbound tourism in Mauritius. The results show that the effects of population of source country and exchange rate on inbound tourist arrivals are not significant. Moreover, there is a significant effect of GDP of source country, travel rate of source country, time distance, disposable income per capita of source country, destination appeal, visa exemption as well as destination consumption price index on the inbound tourist arrivals. Destination appeal (positive effect) and time distance (negative effect) are among the most influential factors of inbound tourism for the main four source markets of Mauritius. Destination consumer price index (negative effect), disposable income per capita of source country (positive effect) and GDP of source country (positive effect) have also important impact on the inbound tourism for the main four source markets of Mauritius. In addition, visa exemption and travel rate of source country are other important factors and play an important role for promoting inbound tourism.Accordingly, in order to sustain the rapid development of Mauritius inbound tourism demand, this paper has put forward four suggestions such as improving the tourism appeal, broadening tourism channels, strengthening marketing integration and improving the environment of tourism facilities.