International Tourism Demand in Malaysia by Tourists from OECD Countries: A Panel Data Econometric Analysis

This paper investigates the significance influence of selected economic and non-economic factors in determining tourism demand for Malaysia by tourists from OECD countries. Based on the sample of 15 years (1995 to 2009), the data are analysed using panel data econometric technique (fixed-/random effects model). The study shows that relative price of tourism is statistically significant in influencing the demand for tourism by tourists from OECD countries to Malaysia. This reveals that tourists from OECD countries are sensitive to the price changes. As for substitute price in the competing destination, the result proved that Singapore is a substitute destination for Malaysia. In addition, the non-economic factors such as the spread of SARS and global economic crises are also significant in influencing the demand for tourism in Malaysia by tourists from OECD countries.