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a b s t r a c tThis paper investigates the determinants of the relationship among Korean outbound tourism demand for Jeju Island and three other Asian island countries using the multivariate generalized autoregressive conditional heteroskedasticity (MGARCH) and Vector Error Correction (VEC) models. It is found that pairwise conditional correlations among tourism demand for Jeju, Thailand, Singapore and the Philippines are not constant but time-varying. Estimated conditional correlations among Jeju and the three Asian countries are negative over some time periods. This implies that the three Asian countries are substitutes for Jeju in certain specific time horizons. The VEC model is used to investigate the short-run and long-run dynamic relationships and the results reveal that Industrial Production Index and real exchange rates had the positive or negative impact on conditional correlations of tourism demand for these destinations. Tourism policy implications are discussed for managing tourism demand for these destinations.

This study investigates Korean outbound tourism demand and its determinants using the Granger causality (GC) analysis. In contrast to previous studies, which deal only with internal factors such as exchange rate and income, this study examines the effects of interactions among countries and, therefore, produces more complete and relevant results. Korean outbound tourism to the USA is causally related to Korean outbound tourism to the other six countries in the study. These results can be used in tourism marketing and strategic planning by industry and government to allocate tourism resources more efficiently.

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This article examines the effect of the Korean pop culture phenomenon also known as “Hallyu” on the inbound tourism demand of Korea. “Hallyu” products are exported throughout Asia and have been growing over the past decade. Using a Bayesian autoregressive model, we empirically investigate the product placement effects of “Hallyu” explained by the parasocial theory of previous literature utilizing inbound tourist data and show that “Hallyu” effects are also present in the overall tourism industry of Korea. The study illustrates that product placement can be a powerful marketing strategy in the tourism industry and highlights its importance for policy makers in creating a comprehensive joint plan for the development of long-term tourism.