What determines international tourist arrivals to Peru? A gravity approach

Abstract

Using the gravity model, this study examines Peru’s tourism patterns by analyzing a panel dataset of the country’s international tourism flows from 59 countries over 22 years (1990–2011). The empirical results for the entire dataset are consistent with the general prediction of the gravity model (positive coefficients for economic size and negative coefficients for distance). Peru mainly has potential to expand tourism flows from European countries like Portugal, Belgium, Russia, Norway, Sweden, Switzerland, Italy, Germany and France. Although Peru offers no visa requirements for such countries, this policy seems to not be sufficient to increase tourism flows from them. Further collaboration between Peru and its neighboring countries in providing coordinated investment in transport infrastructure is necessary to create economies of scale that allow benefits from the cluster effect.