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Global uncertainty and the effectiveness of currency depreciation on tourism demand in G20 economies

Year: 2026

Type: article

Abstract: This study examines how exchange rates and global uncertainty interact to shape international tourism demand across G20 economies. Using annual data from 2001 to 2023, we apply a PMG-ARDL framework, complemented by heterogeneity and panel quantile regressions, to identify long-run relationships and distribution-specific responses. The results show that per capita income is the dominant long-run driver of tourism demand, while the positive effects of currency depreciation weaken substantially under elevated uncertainty. Moreover, we document a systematic divergence between advanced and emerging destinations: advanced economies preserve their exchange-rate advantages during uncertain periods, whereas emerging markets experience an erosion of price competitiveness. These findings suggest that exchange-rate-based strategies alone are insufficient to sustain tourism demand in volatile environments without macroeconomic stability and institutional resilience.

Source: Discover Sustainability

DOI: 10.1007/s43621-026-03428-x

Authors: Yeşim Helhel, Selcuk Helhel

Institution: Akdeniz University

Language: English

Topic: Diverse Aspects of Tourism Research

Subfield: Sociology and Political Science

Field: Social Sciences

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: gold

Estimated APC paid: $1,390