A Panel Data Analysis of International Tourist Arrivals from ASEAN Countries to Malaysia

Investigating the flows of inbound tourists from ASEAN countries to Malaysia, the present paper has identified that the level of income in tourists’ country of origin, the relative price of tourism in Malaysia, the relative price of tourism in the substitute destination, the 1997/98 Asian financial crisis and the spread of the SARs in Asia are the significant determinants of their arrivals. Based on the sample period of 16 years (i.e; 1994 through 2009) and using the panel data econometric technique (fixed-/random-effects model) to analyse the data, the policy implication of the paper's findings that could be conceived is that, if Malaysia were to attract more tourists from ASEAN countries, it needs to maintain its price competitiveness relative to other countries in the region.