Investigating the Determinants of Iran's Inbound Tourism Demand: Panel Data Analysis

The importance of the number of incoming tourists to a country in tourism development prompts planners to measure tourism demand to identify and prioritize related factors. Despite Iran's low contribution to the tourism industry, it's essential to investigate the agents affecting the industry’s growth and determine the factors affecting the increase of tourists entering the country. For this purpose, the dynamic econometric model of international tourism demand has been investigated in this research, and the determination of factors in the arrival of international tourists to Iran has been analyzed. In this regard, the tourists entering Iran from 50 different countries from 2008 to 2016 were examined; The effect of economic factors such as the Gross Domestic Product of origin countries, Consumer price index (relative price of tourism) and crude oil price, and non-economic factors such as the number of rooms, political stability and the effect of the boycott were measured as dummy variable on the demand of incoming tourists. For this purpose, the demand of incoming tourists was estimated using three models, including economic, non-economic, and hybrid models using the GMM estimator for the dynamic panel data model and EViews10 software. The research findings indicate that in addition to economic variables, non-economic factors also affect the amount of inbound tourism demand in Iran. Gross Domestic Product among economic variables and political stability among non-economic variables have had a more profound impact.