Oil, the global economy and tourism

Abstract

The availability and price of oil are intimately linked to the global economyand as a result to tourism. This paper presents the results from research ontourism and oil, undertaken with a particular focus on New Zealand as a long hauldestination in the light of dwindling global oil resources.The findings of four distinct research phases will be reported in anintegrative analysis.The results highlight that economic prosperity in countries of origin, andin particular tourists’ income, is of critical importance for outbound tourism, especiallyto long haul destinations. The econometric analysis of in-country behaviour,such as consumption and regional dispersion, reveal that variables such as countryof origin, travel purpose or length of stay are currently more important determinantsof travel behaviour than fuel prices. Coupled with differentiated oil vulnerabilities by different countriesand different levels of price elasticity, the importance of market mix becomes evident.Tourism businesses can reduce their oil vulnerability by addressing a range ofrisk factors. Government policy and industry initiatives can support these microeconomic adaptation processes.Little research is available on the importance of oil shocks for tourismand this paper is an attempt to address this gap. The findings are specific to NewZealand but will be of interest to other long-haul destinations. The analysis integratesacross a range of research methods.