ESTIMATING EUROPEAN TOURISM DEMAND FOR UKRAINE

1. INTRODUCTION

Tourism is recognized to be the most dynamic industry contributing 9% of the international GDP in 2012 (World Travel and Tourism Council, 2013). As a result the change in demand for tourism products affects all sectors of an economy (Stabler, Papatheodorou, & Sinclair, 2009). It is no surprise that various countries are interested in fostering development of tourism as a driving economic force. Last three years witnessed the positive dynamics in development of the inbound tourism in Ukraine. As a result of the 12% growth of the international arrivals in 2012 Ukraine was ranked 9 among the most visited countries in Europe with more than 23 m. visitors (World Tourism Organization, 2013).

Despite the fact that over the last two decades series of econometric studies have been conducted to outline the factors influencing tourism demand for specific destination (Witt and Martin, 1987; Smeral et al.,1992; Crouch, 1994) there are not a lot of sophisticated research on this topic in Ukraine. Main studies of Ukrainian tourism demand were conducted after big events as Eurovision 2005 or Euro-2012 hosted in the country (Malyugina, 2006, Ditkovska, 2007, Drabyk, 2008, Kozlovskyy, 2010, Voronin, 2012) and still focus qualitative rather than measurable quantitative side of phenomena. This is may be predetermined by the low share of tourism in the national economy (8,1% in 2012, (World Travel & Tourism Council, 2013) Ukrainian researcher Mazurets (2009) argues that this state is caused by the lack of attention from the government, insufficient amount of foreign investments and weak regulatory framework. Therefore, the aim of this paper is to determine the relationships between the number of tourist arrivals in Ukraine from five E...

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Despite the argument of the significant impact of transportation costs on tourists import to the destination (Walsh, 1996/1997) we decided to exclude it from the current research for 3 main reasons. First of all, as 4 out of 5 countries included in our study are sharing a boarder with Ukraine the travel distances appear to be short. The majority of tourists arrive by car, therefore, minimizing the expenses required for getting to the destination. Secondly, previous studies indicate problems in accurate measurement of the actual transportation costs as transportation companies, namely airlines, often introduce different pricing policies for the same class of travelers (Lim, 1999). Finally, the stated variable is highly multicollinear with per capita income at the destination (Mervar & Payne, 2007).

The stated variables were calculated as follows (Appendix A, B, C):