The response of tourism to international economic conditions: Greece, Mexico and Spain.

Abstract

International tourism has become increasingly important over the past three decades. It has played an especially significant role in the economies of Greece, Mexico, and Spain, three countries with amenity resources, historical sites, and antiquities of interest to a broad range of visitors. Particularly in Spain and Greece (as will be shown below), international tourism has grown dramatically relative to the national economy. Although during the 1970s and early 1980s the growth of the petroleum industry overshadowed the growth of the tourism industry in Mexico, this picture appears to be changing somewhat in the later 1980s. In any event, tourism has consistently been at least the third-largest net source of foreign exchange for Mexico, behind only petroleum products and the entire group of agricultural and forestry products.' Thus, all three countries consider international tourism to be an important factor in their domestic economies. The purpose of this paper is to examine the impact of international tourism on the three aforementioned economies, using the latest statistical data available. In addition, we estimate demand functions for international tourism in each of the three cases. The decision to undertake both of these tasks was the result of a survey of earlier tourism studies that included analyses of Greece, Mexico, and Spain.2 In general, the existing studies cover time periods between 1950 and 1970. They include estimates of tourism demand functions, but, perhaps partially because of inadequate data, expected results often were not obtained. Based on current data gathered in part from the archives of the World Tourism Organization (WTO) in Madrid, the results obtained in the present study are more in keeping with the hypotheses that economists would be likely to make regarding the determinants of international tourism.