Research Teams

DT 17/14 - Determinants of Argentinean tourism demand in Uruguay

ISSNISSN/ISBN: 1688-5090
In Uruguay total yearly tourists represent about 90% of its population of which
historically 60% or more have come from Argentina. Tourist activities have a great impact on
Uruguayan economy. They represent about 4% of Uruguayan GDP and generate near 6% of total
employment and 14% of total exports. For this reason it is important to analyze the
determinants behind tourism demand. In this paper we study the relationship between the
number of Argentinean tourists in Uruguay, their real expenditure, Argentinean GDP and the
real exchange rate (RER) between Uruguay and Argentina trying to find long-run relationships
between variables, following Johansen methodology. We found two cointegration relationships,
through Vector error correction models (VECM). In the first one we include real tourism
expenditure, Argentinean GDP and the RER between Argentina and Uruguay. In the second
one, we try to estimate the number of Argentinean tourists, using monthly dada of tourists, a
monthly indicator of Argentinean activity and the RER between Uruguay and Argentina. The
model’s forecast indicates a slight decrease of Argentinean tourism expenditure in 2014 and a
recovering for 2015.
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