Determinants of Australian tourism exports

Tourism is the largest services export earner and plays a vital role in Australian economy. It contributes $35 billion, or 2.5 per cent of GDP and 8.9 per cent of total export earnings in 2012. Tourism industry grew faster than the total economy during 2010-2012 after recovering from the adverse effect of the strong Australian dollars caused by the resources boom during the mid- and late-2000s. This study examines the major long run determinants of tourism exports including the effect of real exchange rate and the resource booms of Australia. Using the Johansen cointegration technique, a stable long run negative relationship is found between tourism export earnings and strong currency value led by resources booms in Australia. However world income, trade openness and developed communication and infrastructure facilities suggesting positive long run relationship with Australia's tourism exports.