Tanzania recognises the potential of international tourism in accelerating socio-economic development, particularly as a supplier of foreign exchange, investment and employment. This paper investigates the factors affecting international tourism demand for Tanzania.
The autoregressive distributed lag approach to cointegration is applied. Local tourism prices, tourist addiction, tourist income and the 2001 terror attack in the United States have significant impacts on international tourism demand for Tanzania between 1996 and 2006. The government needs to maintain macroeconomic stability, especially low inflation, if the country is to reap full economic benefits from tourism. To reduce sensitivity to local tourism prices, the tourism providers should put more efforts in diversifying tourism products away from the universally available ones. There is also a need to improve customer satisfaction to enhance tourist addiction for the Tanzanian experience. In this regard, there is a need to further train staff in the tourism industry, improve tourism infrastructure such as roads and hotels and aggressively market Tanzanian tourism products to the world.
