The determinants of length of stay and arrivals of tourists in the Croatia: a panel data approach

Purpose – The purpose of this study are (1) to explore the determinants of visitors’ arrivals at a destination from various countries, and the determinants of length of stays in Croatia (2) to examine if there is interaction effect between individual characteristics of origin countries and relative prices on length of stay, and/or various variables that include environment, energy, traffic and distance diversity. Design – The special focus is given to reviewing the theoretical issue of defining length of stays of visitors, i.e. discussing prices as a factor that impact a length of stays as an endogenous variable in tourism modeling. The paper also presents the more complex model of arrivals to the Croatia's resorts that are essential for the understanding of tourism in this country on broader scope. Methodology – The methodology of the research includes the descriptive statistics of time series and cross-sectional units (e.g. countries of origin), analysis of the existing data that are included in panel regression modeling, rigorous statistic diagnostics performed with an intention to choose the robust estimator. Approach – Given the importance of tourism sector for Croatia, this paper investigates the factors affecting the length of stay and arrivals of tourist visitors in Croatia using panel data from twenty-one countries, since 1996 to 2010. Findings – The main variables as the determinants of international arrivals in Croatia as a destination are: overcrowding and congestion of destination, attraction and environmental status and spatial distance between the capital cities. From modeling of the average duration of holiday deduced is inflation as a predictor but with insignificant value. Originality – The originality of this paper consists on the fact that it refers to empirical testing of a speculative area of research, still yet, as modeling of tourism demand often is; by this research touched is a variety of factors (state of natural attractiveness, pollution and energy intensively, prices and geographical distances) that influence tourism demand of Croatia.