Outbound Tourism Demand of Turkey: A Markov Switching Vector Autoregressive Approach

Tourism has been one of the fastest-growing sectors in the world. Especially developed countries have been major markets for tourism destinations over the decades. Furthermore, the outbound tourism demand in emerging markets has increased rapidly in recent years. This study aims to investigate the determinants of Turkey’s outbound tourism demand by using the data from 1960 to 2013. For this purpose, the Markov Switching Vector Autoregressive Model is used as an empirical analysis. This model classifies the time period into different regimes in order to obtain more robust results. Finally, our findings show that Turkish citizens’ outbound visits have been influenced by income and the exchange rates.