The Impact of Exchange Rate on Inbound Tourism: Evidence from Jeju Island

Purpose – Jeju island is one of the most famous tourist resorts that attract thousands of tourists for sightseeing. However, in reality, there are quantities of factors that affect foreigners to travel at Jeju island. Therefore, this paper attempts to explore the impact of exchange rate on China’s tourists to travel at Jeju island. Research design, data, and methodology – Due to that China implements a managed floating exchange rate system in 2005, the monthly data from January, 2005 to December, 2017 will be employed to fulfil an empirical analysis under some econometric approaches so as to find the reasons that may affect the development of China’s tourists to travel at Jeju island. Results - The findings show that the exchange rate between China and South Korea and GDP are the driving factors that promote China’s tourists to travel at Jeju island. Both China’s price level and Jeju island’s price level block China’s tourists to travel at Jeju island. Meanwhile, the economic crisis happened at 2008 also has a significant and positive effect on the number of China’s tourists to travel at Jeju island. Conclusions – This paper provides some evidences for Jeju island’s government to take some corresponding measures to promote the tourism development of Jeju island.