International tourism of Kerala: a study on tourism demand and stakeholder perceptions

Abstract

Tourism industry has been vital to the economy of Indian state of Kerala in terms of its contribution to employment generation, foreign exchange earnings and state GSDP. This study aims to scrutinize Kerala's international tourism demand across various dimensions and assess stakeholder perceptions within the sector. Employing diverse econometric techniques, including the autoregressive distributed lagged approach, linear regression, and double log regression, the research utilizes multiple datasets to estimate and elucidate tourism demand in Kerala. To ensure robust models, the study incorporated appropriate statistical tests. Descriptive statistics were employed to discern trends, patterns, and features of overseas visitor arrivals in the state. Complementing quantitative tools, thematic analysis was adopted for qualitative research components.The study reveals the seasonality of Kerala's international tourism, driven primarily by visitors from advanced economies in Europe and North America, particularly during the November to March period. This aligns with the extreme winter experienced in their home countries, contrasting with Kerala's stable and comfortable climate. Notably, overseas visitors, predominantly from Western advanced economies, choose Kerala not solely due to affluence but because it remains an affordable destination. Relative prices in Kerala, coupled with greater purchasing power of the tourists, attract visitors seeking respite from the West's harsh winter. Analysing arrivals from top source markets (the United Kingdom, the United States, and France) through double log regression, the study indicates that a significant portion of Kerala's international tourism remains less elastic to income. This suggests that the state's tourism is not perceived as a luxury product by visitors from advanced Western economies. The study concludes that economic fluctuations in Western economies are unlikely to significantly impact Kerala's international tourism due to the lower income elasticity of demand from key source countries. Additionally, the availability of direct flights and the influence of the Malayalee diaspora abroad emerge as strong determinants of inbound tourist arrivals in the state. Surprisingly, several factors, including air distance, population, land area, internet usage, trade relations, and even income (quantitative income as per the ARDL model and cross-sectional regression), appear to be less relevant in explaining Kerala’s international tourism demand, despite their potential effects.