MODELLING FACTORS AFFECTING RELIGIOUS TOURISM FLOWS TO SAUDI ARABIA

Religious tourism demand is one of the major contributors to Saudi Arabia economy and considered to play an important role in the “Vision 2030”, which seeks to diversify Saudi Arabia’s economy reliance on oil revenues. As the country has undergone structural changes in international tourism and removed travel restrictions in the past few years, there is a need to identify the determinant factors that influence international tourists to plan and manage their trips. Therefore, this current study aims to investigate the effects of economic and noneconomic factors on international tourist flows by using A panel data gravity model for the period 2000-2019. The empirical evidence is based on the Generalized Method of Moments (GMM) and the Panel Regression technique. The findings of the regression show that the traditional gravity variables are important to explain Saudi Arabia’s religious tourism demand. The study also has found that habit persistence, the Pandemic Index, GDP per capita of Saudi and the original countries, human rights and investments in the tourist sector have a significant and positive impact on religious tourism demand. While political risks, transport costs, and tourism price have a statistically significant and negative effect on religious tourists’ arrivals. This study will contribute largely to the tourism demand literature by introducing country characteristics factors which include human rights issues as security proxies, pandemics, and quality of life and by measuring the impact of these variables in tourism demand in the context of an oil-based economy that under the transition to a diversified economy with a new vision. The findings of this study may assist in the development of Saudi Arabia’s tourism sector and economic development by providing knowledge to policymakers, investors, and other tourism stakeholders.