THRESHOLD EFFECT of INFORMATION TECHNOLOGY INFRASTRUCTURE on TOURISM SECTOR DEVELOPMENT: EVIDENCE from TOP 10 AFRICAN DESTINATIONS

Abstract

Tourism has become an information-intensive business that heavily relies on ICT to provide information and conduct transactions for consumers of touristic products and services. Thus, ICT infrastructure would play a major role in the development of the tourism sector. This paper aims to investigate the threshold effect of ICT infrastructure on tourism sector development in top10 African tourism destinations including; Botswana, Egypt, Kenya, Morocco, Namibia, Rwanda, South Africa, Tanzania, Tunisia, Uganda. To do so, a double panel threshold regression model utilized over the period 2004 to 2017. The empirical results revealed a new perspective that there is a double-threshold effect of ICT infrastructure on the development of tourism sector, indicating a nonlinear effect of ICT infrastructure on the development of tourism sector in top 10 African tourism destinations. More specifically, the empirical results reveal that ICT infrastructure weakly and positively derives the number of intentional tourism arrivals and international tourist receipts when the level of ICT infrastructure is less or equal to the first threshold, while it strongly and positively derives the number of intentional tourism arrivals and international tourist when the level of ICT infrastructure is less or equal to the first and second thresholds. Thus, this paper provides important implications for policy makers, in that maximizing the benefits from information technology in developing tourism sector can be achieved when its level between certain critical threshold values.