Examining the business cycle of the tourism industry in Mexico at the state level using the Markov Switching Model (1992 to 2017)

Laura Sour

doi:10.31893/multiscience.2024108

Keywords:

Abstract

Despite being a popular tourist destination, state-level research on the business cycle in Mexico's tourism industry is lacking. This study aims to answer three research questions: Are the growth stages of the international tourism market similar across states? Are the growth stages of the domestic tourism market similar among entities? Is there a relation between the economic cycle of the international tourism market and the domestic market? We use the Markov Switching Model to estimate the business cycle of the tourism industry in each Mexican state from 1992 to 2017. We identify the most attractive states for international and domestic tourists. Notably, eleven of the coefficients belong to the economic cycle of the foreign tourist market, indicating a greater economic impact compared to the domestic market. The results show that each state has its own business cycle, requiring individual projections for each market. This information is relevant for tourism planners and policymakers to address the challenges posed by the SDGs.
References
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2. Botha, I., & Saayman, A. (2022). Forecasting tourism demand cycles: A Markov switching approach. International Journal of Tourism Research, 24(6), 759-74. https://doi.org/10.1002/jtr.2543
3. Chen, M. H. (2015). Driving factors of the hospitality industry cycle. Current Issues in Tourism, 18(4), 315-327. doi.org/10.1080/13683500.2013.854752
4. Chen, M. H., Wu, K. L., & Su, H. J. (2014). Research note: A study of the business cycle of the hotel industry in Taiwan. Tourism Economics, 20(3), 655-664. doi.org/10.5367/te.2013.0287
5. Chen, M. H., Lin, C. P., Cheng, M. C., & Yuan, J. H. (2015). Examining the Korean inbound tourism market cycle: A Markov regime-switching model. Tourism Analysis, 20(5), 551-557. https://https://doi.org/10.3727/108354215X14411980111532
6. Faber, B., & Gaubert, C. (2019). Tourism and economic development: Evidence from Mexico’s coastline. American Economic Review, 109(6), 2245-2293. https://doi.org/10.1257/aer.20161434
7. Gu, X., Wu, J., Guo, H., & Li, G. (2018). Local tourism cycle and external business cycle. Annals of Tourism Research, 73, 159-170. doi.org/10.1016/j.annals.2018.06.007
8. Hamilton, J. D. (1989). A new approach to the economic analysis of nonstationary time series and the business cycle. Econometrica: Journal of the econometric society, 357-384. https://doi.org/10.2307/1912559
9. Hall, C. M. (2021). Constructing sustainable tourism development: The 2030 agenda and the managerial ecology of sustainable tourism. In Activating Critical Thinking to Advance the Sustainable Development Goals in Tourism Systems (pp. 198-214). Routledge. https://doi.org/10.4324/9781003140542-12
10. Hsu, P. P. (2017). Examination of Taiwan's travel and tourism market cycle through a two-period Markov regime-switching model. Tourism Management, 63, 201-208. https://doi.org/10.1016/j.tourman.2017.06.011
11. Jiménez-Rico, A., Galván-Zavala, K., & Navarrete Reynoso, R. (2020). Financiamiento de las Mipymes en México y su impacto en su esperanza de vida. Revista de Desarrollo Económico 7 (23), 1-13. https://doi.org/10.35429/JED.2020.23.7.1.13
12. Instituto Nacional de Estadística Geografía e Informática INEGI (2014). Cuenta Satélite del Turismo preliminar 2014. Available in: http://www.inegi.org.mx/est/contenidos/Proyectos/SCN/C_Anuales/c_satelitetur/default.aspx Accesed on: August 24, 2019.
13. Instituto Nacional de Estadística Geografía e Informática INEGI (2016). Sistema de Cuentas Nacionales de México. Cuenta satélite del turismo de México Base year 2013 c2016 Available in: http://internet.contenidos.inegi.org.mx/contenidos/Productos/prod_serv/contenidos/espanol/bvinegi/productos/nueva_estruc/702825100292.pdf Accesed on: August 24, 2019.
14. Instituto Nacional de Estadística Geografía e Informática INEGI (2018). Sistema de Cuentas Nacionales: Cuenta satélite del turismo Base year 2013. Available in: https://www.inegi.org.mx/investigacion/ Accesed on: August 24, 2019.
15. Instituto Nacional de Estadística Geografía e Informática INEGI (2018). Turismo. Información General del INEGI. Available in: https://www.inegi.org.mx/temas/turismo/default.html#Infor%20macion_general Accesed on: August 24, 2019.
16. Choi, J. G., Mok, J. W., & Han, J. S. (2011). The use of Markov chains to estimate destination switching and market share. Tourism Economics, 17(6), 1181-1196. https://doi.org/10.5367/te.2011.0091
17. Organización Mundial del Turismo (OMT) (2017). Entender el turismo: Glosario Básico 2017 Available in: https://www.unwto.org/es/glosario-terminos-turisticos. Accessed on: February 2018.
18. Markov, A. (1971). Extension of the limit theorems of probability theory to a sum of variables connected in a chain, John Wiley and Sons, 447–475.
19. McKercher, B., & Denizci Guillet, B. (2011). Are tourists or markets destination loyal?. Journal of Travel Research, 50(2), 121-132. https://doi.org/10.1177/0047287510362779
20. Moore, W., & Whitehall, P. (2005). The tourism area lifecycle and regime switching models. Annals of Tourism Research, 32(1), 112-126. doi.org/10.1016/j.annals.2004.05.006
21. Ross, S. M. (2014). Introduction to Probability Models. Academic press. doi.org/10.1016/C2012-0-03564-8
22. Sala-i-Martín X. (2016). The global competitiveness report 2016–2017. World Economic Forum. Available in: https://www3.weforum.org/docs/GCR2016-2017/05FullReport/TheGlobalCompetitivenessReport2016-2017_FINAL.pdf Accessed on: February 2018.
23. Secretaría de Turismo SECTUR (2018). En 2017 México captó 39.3 millones de turistas internacionales y una derrama de 21.3 [In 2017 Secretaría de Turismo Available in: https://www.gob.mx/sectur/prensa/en-2017-mexico-capto-39-3-millones-de-turistas-internacionales-y-una-derrama-de-21-3-mmdd Accessed on: February 2018.
24. Secretaría de Turismo SECTUR (2018). Available information from the entities Available in: https://www.datatur.sectur.gob.mx/SitePages/InfTurxEdo.aspx. Accessed on: June 19, 2018.
25. Secretaría de Turismo SECTUR (2019). Based on data published by the World Tourism Organization (Panorama OMT de Turismo International [OMT International Tourism Panorama] May 2019 Updated years 2015-2017 and 2018 Available in: https://www.datatur.sectur.gob.mx/Documentos%20compartidos/DatosAbiertos_ANUARIO.zip Accessed on: September 23, 2019.
26. Secretaría de Turismo (SECTUR) (2019). Barómetro OMT –Volumen 17 Anexo Estadístico. Updated year 2015-2017 and 2018 Available in: https://www.datatur.sectur.gob.mx/Documentos%20compartidos/DatosAbiertos _ANUARIO.zip Accessed on: May 2019.
27. Secretaría de Turismo (SECTUR-DATATUR) (2018). Compendio Estadístico del Sector Turismo en México 2015 Available in: http://www.datatur.sectur.gob.mx/SitePages/InfTurxEdo.aspx Accessed on: September 23, 2019.
28. Secretaría de Hacienda y Crédito Público. (SHCP). (2017). Las finanzas públicas y la deuda pública a julio de 2017. Mexico. No.164 Available in: http://finanzaspublicas.hacienda.gob.mx/work/models/Finanzas_Publicas/docs/ori/Espanol/Mensuales/2017/Las%20finanzas%20publicas%20y%20la%20deuda%20publica%20a%20julio%20de%202017.pdf Accessed on: September 23, 2019.
29. Song, H., Dwyer, L., Li, G., & Cao, Z. (2012). Tourism economics research: A review and assessment. Annals of tourism research, 39(3), 1653-1682. https://doi.org/10.1016/j.annals.2012.05.023
30. Tsay, R. S. (2005). Analysis of Financial Time Series. Second Edition. John Wiley & sons
31. Valadkhani, A., & O'Mahony, B. (2018). Identifying structural changes and regime switching in growing and declining inbound tourism markets in Australia. Current Issues in Tourism, 21(3), 277-300. https://doi.org/10.1080/13683500.2015.1072504
32. Vega, R. A., & Vivas, X. M. (2007). El turismo como motor de crecimiento económico. Anuario jurídico y económico escurialense, (40), 677-710. Available in: https://dialnet.unirioja.es/descarga/articulo/2267966.pdf Accessed on: May 2019.
33. World Travel and Tourism Council (WTTC) (2019). About WTTC. World Travel and Tourism Council. Available in: https://www.wttc.org/about/ Accesed on: August 2019.
34. Witt, S. F., & Witt, C. A. (1995). Forecasting tourism demand: A review of empirical research. International Journal of forecasting, 11(3), 447-475. https://doi.org/10.1016/0169-2070(95)00591-7

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

How to cite

Sour, L. (2024). Examining the business cycle of the tourism industry in Mexico at the state level using the Markov Switching Model (1992 to 2017). Multidisciplinary Science Journal, 6(7), 2024108. https://doi.org/10.31893/multiscience.2024108

[1] Alonso Rodríguez, J. R. (2022). El turismo como motor de crecimiento económico en Colombia (2000-2019). Revista internacional de turismo, empresa y territorio, 6(1), 57-83. https://doi.org/10.21071/riturem.v6i1.14056

[2] Botha, I., & Saayman, A. (2022). Forecasting tourism demand cycles: A Markov switching approach. International Journal of Tourism Research, 24(6), 759-74. https://doi.org/10.1002/jtr.2543

[3] Chen, M. H. (2015). Driving factors of the hospitality industry cycle. Current Issues in Tourism, 18(4), 315-327. doi.org/10.1080/13683500.2013.854752

[4] Chen, M. H., Wu, K. L., & Su, H. J. (2014). Research note: A study of the business cycle of the hotel industry in Taiwan. Tourism Economics, 20(3), 655-664. doi.org/10.5367/te.2013.0287

[5] Chen, M. H., Lin, C. P., Cheng, M. C., & Yuan, J. H. (2015). Examining the Korean inbound tourism market cycle: A Markov regime-switching model. Tourism Analysis, 20(5), 551-557. https://https://doi.org/10.3727/108354215X14411980111532

[6] Faber, B., & Gaubert, C. (2019). Tourism and economic development: Evidence from Mexico’s coastline. American Economic Review, 109(6), 2245-2293. https://doi.org/10.1257/aer.20161434

[7] Gu, X., Wu, J., Guo, H., & Li, G. (2018). Local tourism cycle and external business cycle. Annals of Tourism Research, 73, 159-170. doi.org/10.1016/j.annals.2018.06.007

[8] Hamilton, J. D. (1989). A new approach to the economic analysis of nonstationary time series and the business cycle. Econometrica: Journal of the econometric society, 357-384. https://doi.org/10.2307/1912559

[9] Hall, C. M. (2021). Constructing sustainable tourism development: The 2030 agenda and the managerial ecology of sustainable tourism. In Activating Critical Thinking to Advance the Sustainable Development Goals in Tourism Systems (pp. 198-214). Routledge. https://doi.org/10.4324/9781003140542-12

[10] Hsu, P. P. (2017). Examination of Taiwan's travel and tourism market cycle through a two-period Markov regime-switching model. Tourism Management, 63, 201-208. https://doi.org/10.1016/j.tourman.2017.06.011

[11] Jiménez-Rico, A., Galván-Zavala, K., & Navarrete Reynoso, R. (2020). Financiamiento de las Mipymes en México y su impacto en su esperanza de vida. Revista de Desarrollo Económico 7 (23), 1-13. https://doi.org/10.35429/JED.2020.23.7.1.13

[12] Instituto Nacional de Estadística Geografía e Informática INEGI (2014). Cuenta Satélite del Turismo preliminar 2014. Available in: http://www.inegi.org.mx/est/contenidos/Proyectos/SCN/C_Anuales/c_satelitetur/default.aspx Accesed on: August 24, 2019.

[13] Instituto Nacional de Estadística Geografía e Informática INEGI (2016). Sistema de Cuentas Nacionales de México. Cuenta satélite del turismo de México Base year 2013 c2016 Available in: http://internet.contenidos.inegi.org.mx/contenidos/Productos/prod_serv/contenidos/espanol/bvinegi/productos/nueva_estruc/702825100292.pdf Accesed on: August 24, 2019.

[14] Instituto Nacional de Estadística Geografía e Informática INEGI (2018). Sistema de Cuentas Nacionales: Cuenta satélite del turismo Base year 2013. Available in: https://www.inegi.org.mx/investigacion/ Accesed on: August 24, 2019.

[15] Instituto Nacional de Estadística Geografía e Informática INEGI (2018). Turismo. Información General del INEGI. Available in: https://www.inegi.org.mx/temas/turismo/default.html#Infor%20macion_general Accesed on: August 24, 2019.

[16] Choi, J. G., Mok, J. W., & Han, J. S. (2011). The use of Markov chains to estimate destination switching and market share. Tourism Economics, 17(6), 1181-1196. https://doi.org/10.5367/te.2011.0091

[17] Organización Mundial del Turismo (OMT) (2017). Entender el turismo: Glosario Básico 2017 Available in: https://www.unwto.org/es/glosario-terminos-turisticos. Accessed on: February 2018.

[18] Markov, A. (1971). Extension of the limit theorems of probability theory to a sum of variables connected in a chain, John Wiley and Sons, 447–475.

[19] McKercher, B., & Denizci Guillet, B. (2011). Are tourists or markets destination loyal?. Journal of Travel Research, 50(2), 121-132. https://doi.org/10.1177/0047287510362779

[20] Moore, W., & Whitehall, P. (2005). The tourism area lifecycle and regime switching models. Annals of Tourism Research, 32(1), 112-126. doi.org/10.1016/j.annals.2004.05.006

[21] Ross, S. M. (2014). Introduction to Probability Models. Academic press. doi.org/10.1016/C2012-0-03564-8

[22] Sala-i-Martín X. (2016). The global competitiveness report 2016–2017. World Economic Forum. Available in: https://www3.weforum.org/docs/GCR2016-2017/05FullReport/TheGlobalCompetitivenessReport2016-2017_FINAL.pdf Accessed on: February 2018.

[23] Secretaría de Turismo SECTUR (2018). En 2017 México captó 39.3 millones de turistas internacionales y una derrama de 21.3 [In 2017 Secretaría de Turismo Available in: https://www.gob.mx/sectur/prensa/en-2017-mexico-capto-39-3-millones-de-turistas-internacionales-y-una-derrama-de-21-3-mmdd Accessed on: February 2018.

[24] Secretaría de Turismo SECTUR (2018). Available information from the entities Available in: https://www.datatur.sectur.gob.mx/SitePages/InfTurxEdo.aspx. Accessed on: June 19, 2018.

[25] Secretaría de Turismo SECTUR (2019). Based on data published by the World Tourism Organization (Panorama OMT de Turismo International [OMT International Tourism Panorama] May 2019 Updated years 2015-2017 and 2018 Available in: https://www.datatur.sectur.gob.mx/Documentos%20compartidos/DatosAbiertos_ANUARIO.zip Accessed on: September 23, 2019.

[26] Secretaría de Turismo (SECTUR) (2019). Barómetro OMT –Volumen 17 Anexo Estadístico. Updated year 2015-2017 and 2018 Available in: https://www.datatur.sectur.gob.mx/Documentos%20compartidos/DatosAbiertos _ANUARIO.zip Accessed on: May 2019.

[27] Secretaría de Turismo (SECTUR-DATATUR) (2018). Compendio Estadístico del Sector Turismo en México 2015 Available in: http://www.datatur.sectur.gob.mx/SitePages/InfTurxEdo.aspx Accessed on: September 23, 2019.

[28] Secretaría de Hacienda y Crédito Público. (SHCP). (2017). Las finanzas públicas y la deuda pública a julio de 2017. Mexico. No.164 Available in: http://finanzaspublicas.hacienda.gob.mx/work/models/Finanzas_Publicas/docs/ori/Espanol/Mensuales/2017/Las%20finanzas%20publicas%20y%20la%20deuda%20publica%20a%20julio%20de%202017.pdf Accessed on: September 23, 2019.

[29] Song, H., Dwyer, L., Li, G., & Cao, Z. (2012). Tourism economics research: A review and assessment. Annals of tourism research, 39(3), 1653-1682. https://doi.org/10.1016/j.annals.2012.05.023

[30] Tsay, R. S. (2005). Analysis of Financial Time Series. Second Edition. John Wiley & sons

[31] Valadkhani, A., & O'Mahony, B. (2018). Identifying structural changes and regime switching in growing and declining inbound tourism markets in Australia. Current Issues in Tourism, 21(3), 277-300. https://doi.org/10.1080/13683500.2015.1072504

[32] Vega, R. A., & Vivas, X. M. (2007). El turismo como motor de crecimiento económico. Anuario jurídico y económico escurialense, (40), 677-710. Available in: https://dialnet.unirioja.es/descarga/articulo/2267966.pdf Accessed on: May 2019.

[33] World Travel and Tourism Council (WTTC) (2019). About WTTC. World Travel and Tourism Council. Available in: https://www.wttc.org/about/ Accesed on: August 2019.

[34] Witt, S. F., & Witt, C. A. (1995). Forecasting tourism demand: A review of empirical research. International Journal of forecasting, 11(3), 447-475. https://doi.org/10.1016/0169-2070(95)00591-7

Abstract

References

How to cite