Macroeconomic Determinants of Indonesian Tourism Demand in Malaysia

Abstract

Indonesia is Malaysia’s second tourist generating country after Singapore, therefore it is important to
\nlook at the macroeconomic determinants of Indonesia tourism demand in Malaysia in order to maintain
\nand sustain the significant Indonesian tourist inflows into Malaysia. This study employed quarterly data
\nfrom 2000Q1 to 2014Q4 to estimate Indonesian tourism demand with the explanatory variables of real
\nincome, travel cost and exchange rate. The empirical findings suggest that there is a long-run
\nequilibrium relationship between Indonesian tourism demand and the specified determinants. In
\nsummary, higher Indonesian real income, higher travel cost and stronger Indonesian currency will
\nencourage more Indonesian visitors visiting Malaysia.