The Exchange Rate: Its Volatility and Tourism Demand

This study aims at investigating the long-run and short-run relationships between international tourist arrivals in Mauritius and some of its key driving factors using an autoregressive distributed lag (ARDL) model over the period 1983–2019. Drawing on previous studies and exchange rate, its volatility, tourism infrastructure, relative price, tourists’ income and economic crisis are employed as the explanatory variables to examine this nexus. The results show that income and relative price influence tourist arrivals in both the long-run and short-run. In the long run, tourism infrastructure also proves to be significant. Nevertheless, both exchange rate and its volatility are insignificant.