Tourist Inflows; Accommodation Prices and Exchange Rates: A Causality Analysis for Turkey

The study investigates the effects of accommodation prices and exchange rates on the number of tourists visiting Turkey for the period 2005:1-2018:6. Monthly accommodation price index and monthly average nominal exchange rates of the Turkish Lira against the currencies of important source countries are used as independent variables. Hacker-Hatemi-J (2006) bootstrap causality test and asymmetric causality approach developed by Hatemi-J (2012) are used for the eresearch. Findings reveal a symmetric causality relationship from accommodation prices to the number of tourists at 10% significance level. There is also a symmetric causality relationships running from the number of visitors and to each of Euro and Pound exchange rates. The only asymmetric causality relationship found runs from the negative shocks in number of visitors to positive shocks in Pound exchange rates. Results implicate careful pricing of accommodation services and inclusion of Pound/TL rate in marketing strategies for potential tourists from the UK in order for Turkey to have a sustainable tourist inflow