Tourism Competitiveness and the Role of Diversity: A Cross-Country Analysis

Several studies have empirically explored the determinants of tourism demand and supply as well as the factors that affect destination or tourism competitiveness; however, no prior study has considered the possible interaction effect between the degree of ethnic and linguistic diversity within a country and its level of economic development. Using the 2009 Travel and Tourism Competitiveness Index, a comprehensive measure of tourism competitiveness developed by the World Economic Forum, this study provides evidence that ethnic and linguistic diversity negatively impacts the level of tourism competitiveness across nations. Further, this study also finds that the negative effect of diversity on tourism competitiveness is mitigated in wealthier countries. In other words, higher levels of economic development can help off-set the negative impact of diversity on a country's tourism competitiveness.