Abstract

This study presents the second part of our assignment for the Aruba Tourism Authority (ATA). Our study investigated the effects of two tax proposals (a turnover tax rate increase from 6% to 7% and a room tax rate increase from 9.5% to 12.5%) on tourism demand. We used monthly time-series data on tourism arrivals from several markets, including the U.S., The Netherlands, and other markets. We also segmented the arrival data based on the accommodations used in Aruba (high-rise, low-rise, and other accommodations). We applied several procedures to prepare and test the data before applying an Autoregressive Distributed Lag model to estimate the short- and long-term effects. The short-term effects relate to temporary instability generated along the long-term (structural) impacts. In the case of Aruba’s tourism, the short-term would indicate temporary up or down changes in tourists arrivals, which will gradually settle down to more consistent growth in the number of visitors. The results of our findings are presented below in the form of several questions.

Keywords

Aruba; tax; tourism

Prepared For

Aruba Tourism Authority

College

Rosen College of Hospitality Management

Publication Date

11-17-2022

Document Type

Report

Format

application/pdf

Language

English

Place

Aruba

Rights

No part of this publication may be reproduced, transmitted, transcribed, stored in a retrieval system, or translated into any language, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission from The Dick Pope Sr. Institute for Tourism Studies. All copyright, confidential information, design rights and all other intellectual property rights of whatsoever nature contained herein are and shall remain the sole and exclusive property of The Dick Pope Sr. Institute for Tourism Studies. The information furnished herein is believed to be accurate and reliable. However, no responsibility is assumed by The Dick Pope Sr. Institute for Tourism Studies for its use, or for any infringements of other rights of third parties resulting from its use. The UCF and The Dick Pope Sr. Institute for Tourism Studies name and logo are trademarks or registered trademarks of the University of Central Florida.

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