A revisit to the impact of exchange rates on tourism demand: The case of italy

Currency exchange rates have consistently been used in modeling international tourism demand (Song & Li, 2008). Using the case of Italy this study reexamines the relationship between exchange rates and international arrivals from a new perspective by quantifying the impact, if any, that the fluctuations of exchange rates, alone, have on international demand from nineteen separate nations. While confirming previous research relative to country pairs (Crouch, 1995), the findings of this study suggest that exchange rates do not universally affect international tourism demand, indicating exchange rates exhibit disparate levels of significance in determining international arrivals to Italy. In eleven of the nineteen nation pairs examined, exchange rates resulted in no significance, contradicting previous studies (Crouch, 1994b) and prevailing assumptions. These findings will help policy makers and practitioners to understand the impact of exchange rates on Italian tourism and offer direction to researchers on reevaluating the role of exchange rates in developing international tourism demand forecasting models.