Oil, the Global Economy and Tourism

Abstract

Purpose - The availability and price of oil are intimately linked to the global economy and as a result to tourism. This paper aims to present the results from research on tourism and oil, undertaken with a particular focus on New Zealand as a long-haul destination in the light of dwindling global oil resources. Design/methodology/approach - The findings of four distinct research phases will be reported in an integrative analysis. Findings - The results highlight that economic prosperity in countries of origin, and in particular tourists' income, is of critical importance for outbound tourism, especially to long-haul destinations. The econometric analysis of in-country behaviour, such as consumption and regional dispersion, reveal that variables such as country of origin, travel purpose or length of stay are currently more important determinants of travel behaviour than fuel prices. Practical implications - Coupled with differentiated oil vulnerabilities by different countries and different levels of price elasticity, the importance of market mix becomes evident. Tourism businesses can reduce their oil vulnerability by addressing a range of risk factors. Government policy and industry initiatives can support these micro-economic adaptation processes. Originality/value - Little research is available on the importance of oil shocks for tourism, and this paper is an attempt to address this gap. The findings are specific to New Zealand but will be of interest to other long-haul destinations. The analysis integrates across a range of research methods.