The effect of exchange rate crises on tourist fllows in the former USSR republics

Abstract

[eng] This paper examines the effect of exchange rate crises on tourist flows with the fixed effects OLS gravity model, using the data from the 14 former USSR republics for the period of 20 years (1995- 2014). After including the country pair intercepts, distance between main cities and common border dummy variables into the model, we found out that strong exchange rate crises influence significantly on tourism flows. Also we have learned that tourists are more likely to choose a destination where the exchange rate is depreciating. Moreover, there is a strong direct influence of the destination country GDP on tourist flows. Tourists tend to choose the countries with big GDP. The main reason for this dynamics might be the work migration. People that are looking for a job may choose the destination depending on the economical stability and its GDP. Finally, tourism flows are also sensitive to the changes of origin country GDP and population of both countries (origin and destination).