Departmental Bulletin Paper Panel data analysis of the inbound tourism demand and tourism policy in Laos

MORI  Tomoya

The purpose of this research is to investigate the determinants of the inbound demand in Laos by using a gravity model with panel data from 2000–2014. Our model includes not only income and price factors considered in previous studies but also the factors pertaining to three tourism policies: (1) visa easing, (2) development of economic corridors within GMS, and (3) the registration of UNESCO World Heritage Sites in Laos in 2001. The results indicate that the number of tourists from Cambodia, Malaysia, Singapore, Thailand, Vietnam, and Myanmar can increase after implementing visa permissions; however, we cannot find accurate numbers for the Philippines, Brunei, and Indonesia. In addition, the establishment of the East-West and South-North Economic Corridors encourages the inbound demand from not only Thailand but also Vietnam and China. Eventually, this research suggests some initiatives required for long-term growth in the tourism sector based on the results, considering the “tourist area life cycle” hypothesis by Butler (1980).

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