An Augmented Gravity Model Analysis of Air Travel Demand in Emerging Tourism Destinations

Abstract

This study aims to identify and analyze the determinants influencing international air travel demand to emerging tourism destinations, particularly in landlocked countries where geographic and infrastructural constraints limit tourism development. The research seeks to extend the application of gravity modeling to the context of tourism air flows. An augmented gravity model framework was applied using panel data from 27 origin countries spanning 2000 to 2023, which together account for over 96 percent of Mongolia’s inbound tourist arrivals. The dataset was updated to include the most recent information available for 2023. Key variables included GDP per capita, population, distance, purchasing power parity, foreign direct investment, access to sanitation facilities, tourism competitiveness, and a border dummy variable. The results reveal that higher economic mass, greater tourism competitiveness, and the presence of direct air routes significantly increase inbound air passenger flows. Conversely, geographic distance and visa restrictions reduce arrivals, while infrastructure and sanitation variables produce mixed results. The border effect has a positive influence, while infrastructure and sanitation variables produced mixed results. The study contributes to tourism economics by adapting the gravity model to geographically constrained tourism markets. It provides actionable insights for policymakers in enhancing air connectivity, forming bilateral air service agreements, and improving tourism-related infrastructure and policy frameworks.