Impact of visa restrictions on international tourism arrivals

Abstract

[eng] This research evaluates the impact of visa restrictions on international tourism arrivals for the period 2017-2019. Despite the relevance of the topic, surprisingly there are just few studies in the economic literature analyzing the extent to which visa restrictions reduce the flow of travelers between countries; due to the scarcity of studies and the visa restriction significance as an important barrier for tourism movements and to achieve economic growth and to reduce unemployment, through the development of the tourism sector. The main objective of this research is to explore the effect of visa restriction on tourism, contemplating different types of visas, by answering these questions: how is the detrimental effect on tourist flow? And which type of visa could be the best alternative for governments? providing this way more information to facilitate decision-making on government visa policy. To address these questions, the present study classifies types of visa restrictions into traditional (visa required), electronic visa (eVisa) and visa obtained at any access point into the state (Visa on arrival), using a gravity model to estimate bilateral tourism movements with OLS and PPML estimations in three different models: first model considers origin, destination, and year fixed effects, while second specification adds multilateral resistance terms and, the last one handle multilateral resistance term with pair fixed effect. Regarding the variables of interest visa required has a higher damage on international tourist arrival in 21.2%. Visa arrival is the type of visa with least negative effects on international tourist flow in both methods, 10.7% in OLS and 13.1% in PPML. Demonstrating in other words, that governments must evaluate the costs of visa policy, the type of visa they require from international tourists, analyze the benefits of visa applications flexibility evaluating the advantages against the disadvantages of visa restrictions.