Beyond Tourist Arrivals: Tourism Expenditure, Employment, and GDP Contribution in a Cross-Country Panel

Abstract

This study examines the relationship between tourism activity and economic performance using a merged country-year panel that includes tourism arrivals, inbound tourism expenditure, tourism employment, accommodation indicators, GDP per capita, and air-passenger activity. The analysis is limited to available observations through 2022, allowing the study to compare long-term tourism patterns before and during the COVID period. The merged dataset shows that reported country-level inbound tourist arrivals increased steadily over time and reached their highest observed level in 2019, at about 1.28 billion arrivals. After that peak, arrivals declined sharply, falling to about 362 million in 2020 and partially recovering in the latest available reporting years. Average tourism GDP share across reporting countries reached its highest observed value in 2019, at 5.22 percent, before decreasing during the crisis period. The descriptive results show that large destination countries are not always the most tourism-dependent economies, because tourism dependence is better reflected by GDP share, employment, and expenditure indicators. Exploratory regression results indicate positive associations between tourism employment and tourism GDP share. In the country-and-year fixed-effects model, inbound tourism expenditure is also positively associated with tourism GDP share, while visitor arrivals are less explanatory. Overall, the findings suggest that tourism spending and employment are more meaningful economic channels than arrivals alone; however, the results are descriptive rather than causal because the panel is unbalanced and reporting coverage varies.