German demand for tourism in Spain

Since Germany has traditionally been one of the most important sources of tourism for Spain, a deep knowledge of the main determinants of the demand may be useful for policy-makers and agents of the industry. In this paper, a dynamic model is used to examine German demand for tourism in Spain. The proposed model is applied to a panel data set consisting of inbound German tourism in each of the 17 Spanish destinations (Autonomous Communities) for the period 1991–2003. The empirical results suggest that tourism demand in the previous period has an important effect on current tourism demand. The results also indicate that the demand for tourism in Spain is a luxury for the Germans and highly dependent on the evolution of relative prices and cost of travel between Germany and the destination.