This study examines the determinants of inbound tourism demand to Malaysia using an extended gravity model framework. The analysis incorporates economic, social, policy-related, bilateral, and external shock factors using panel data from multiple tourist source countries between 2010 and 2024. The study applies panel regression techniques, including pooled OLS, Fixed Effects, Random Effects, and PPML estimations, to identify the key factors influencing international tourist arrivals to Malaysia. The findings indicate that higher income levels, larger population sizes, favourable exchange rates, cultural proximity, safety, public health conditions, trade openness, and connectivity positively influence tourism demand, while inflation and geographical distance negatively affect the tourist arrivals. The COVID-19 pandemic is also found to have a significant adverse impact on tourism flows. The results support the extended gravity model and highlight the importance of economic stability, infrastructure development, tourism diversification, and resilience strategies in strengthening Malaysia’s tourism competitiveness and ensuring sustainable tourism growth.
Agu, C., Ogbuabor, J. E., & Onah, B. U. (2026). How is institutional quality moderating the effect of terrorism on international tourism, trade, foreign aid inflow and economic growth in sub-saharan Africa? Foreign Trade Review, 61(1), 109-132.
Anderson, J. E. (2011). The gravity model. Annual Review of Economics, 3(1), 133–160. https://doi.org/10.1146/annurev-economics-111809-125114
Baltagi, B. H. (2021). Econometric analysis of panel data (6th ed.). Springer.
Bank Negara Malaysia. (2023). Annual report 2023. Bank Negara Malaysia.
Bendezú-Jiménez, H. J., Bendezú, A. E. R., Delgado, T. J. R., & Sánchez, J. A. L. (2026). The Macroeconomic shocks, political stability and public policy: Determinants of tourism arrivals in Peru (2003-2023). Investigaciones Turísticas, (31), 195-223.
Chiu, Y.-B., Zhang, W., & Ding, K. (2020). Does Globalization Influence Inbound Tourism? Evidence from a Dynamic Panel Threshold Analysis. Journal of Travel Research, 60(5), 1074-1084. https://doi.org/10.1177/0047287520919514 (Original work published 2021)
Dwyer, L., Forsyth, P., & Dwyer, W. (2020). Tourism economics and policy (2nd ed.). Channel View Publications.
Ghosh, S. (2021). Inbound Australian tourism demand from Asia: a panel gravity model. Journal of Economic Studies, 48(7), 1388-1400.
Guo, X., Li, W., Zhou, H., & Li, L. (2026). How Do Cultural Institutes Influence Inbound Tourism Flows? Evidence from China Considering Cultural Distance. Journal of China Tourism Research, 1-26.
Hausman, J. A. (1978). Specification tests in econometrics. Econometrica, 46(6), 1251–1271. https://doi.org/10.2307/1913827
Heriqbaldi, U., Esquivias, M. A., & Agusti, K. S. (2023). The role of cultural distance in boosting international tourism arrivals in ASEAN: a gravity model. Consumer Behavior in Tourism and Hospitality, 18(1), 97-109.
Huang, X., Han, Y., Gong, X., & Liu, X. (2019). Does the belt and road initiative stimulate China’s inbound tourist market? An empirical study using the gravity model with a DID method. Tourism Economics, 26(2), 299-323. https://doi.org/10.1177/1354816619867577 (Original work published 2020)
Ibragimov, K., Perles-Ribes, J. F., & Ramón-Rodríguez, A. B. (2021). The economic determinants of tourism in Central Asia: A gravity model applied approach. Tourism Economics, 28(7), 1749-1768. https://doi.org/10.1177/13548166211009985 (Original work published 2022)
IMF. (2023). World economic outlook database. International Monetary Fund. https://www.imf.org
Izadi Yazdanabadi, F., & Ashtiani, T. (2024). Determinants of Inbound Tourism to Iran: A Gravity Model Analysis of Economic and Cultural Factors. Economics Research, 24(94), 139-184.
Khalid, U., Okafor, L. E., & Burzynska, K. (2021). Do Regional Trade Agreements Enhance International Tourism Flows? Evidence from a Cross-Country Analysis. Journal of Travel Research, 61(6), 1391-1408. https://doi.org/10.1177/00472875211028321 (Original work published 2022)
Khalid, U., Okafor, L. E., & Shafiullah, M. (2019). The Effects of Economic and Financial Crises on International Tourist Flows: A Cross-Country Analysis. Journal of Travel Research, 59(2), 315-334. https://doi.org/10.1177/0047287519834360 (Original work published 2020)
Liang, Y., Xu, X., Guo, C., & Chen, J. (2025). Modeling the Lagged Effects of Cultural and Educational Exchange on Inbound Tourism: Evidence From a VAR-IRF Analysis of China. Sage Open. https://doi.org/10.1177_21582440261415953
Liu, A., Fan, D. X. F., & Qiu, R. T. R. (2020). Does Culture Affect Tourism Demand? A Global Perspective. Journal of Hospitality & Tourism Research, 45(1), 192-214. https://doi.org/10.1177/1096348020934849 (Original work published 2021)
Morley, C., Rosselló, J., & Santana-Gallego, M. (2014). Gravity models for tourism demand: Theory and use. Annals of Tourism Research, 48, 1–10. https://doi.org/10.1016/j.annals.2014.05.008
Nguyen, H. Q. (2021). Elasticity of tourism demand by income and price: Evidence from domestic tourism of countries in ASEAN. Cogent Social Sciences, 7(1), 1996918.
Nguyen, L. P., & Nguyen, H. T. (2021). Factors impacting tourism demand: An analysis of 10 ASEAN countries. The Journal of Asian Finance, Economics and Business, 8(1), 385-393.
Nguyen, Q. H. (2025). Key Factors Determining the Demand for International Air Travel: Source Market Approach as a Region. Pacific Economic Review. https://doi.org/10.1111/1468-0106.70008
Nguyen, T. T. T., & Choi, C. H. (2025). Tourism as a Trade Facilitator: Gravity-Based Evidence from Vietnam?s Bilateral Trade Flows. Asia & the Pacific Policy Studies, 13(1), e70073. https://doi.org/10.1002/app5.70073
Okafor, L. E., Khalid, U., & Adeola, O. (2021). The effects of regional trade agreements on international tourist flows in the Middle East and Africa. In New frontiers in hospitality and tourism management in Africa (pp. 245-262). Cham: Springer International Publishing.
Park, S. (2025). The differential impact of origin and destination country uncertainty on international tourism. Tourism Economics, 31(7), 1465-1470. https://doi.org/10.1177/13548166251317656 (Original work published 2025)
Papagianni, E., Evgenidis, A., Tsagkanos, A., & Megalooikonomou, V. (2023). Tourism Demand in the Face of Geopolitical Risk: Insights from a Cross-Country Analysis. Journal of Travel Research, 63(8), 2094-2119. https://doi.org/10.1177/00472875231206539 (Original work published 2024)
Permatasari, M. F., & Esquivias, M. A. (2020). Determinants of tourism demand in Indonesia: A panel data analysis. Tourism Analysis, 25(1), 77-89.
Pham, U., Trinh, Q., Le, H., & Vo, U. (2023). Impacts of regional trade agreements on international tourism demand: Empirical in Vietnam. Cogent Economics & Finance, 11(2), 2250230.
Prayag, G. (2009). Tourists’ evaluations of destination image, satisfaction, and future behavioural intentions. International Journal of Tourism Research, 11(6), 537–554. https://doi.org/10.1002/jtr.730
Raifu, I. A., & Afolabi, J. A. (2026). Does rising inflation affect the tourism industry? Evidence from Nigeria. Journal of Policy Research in Tourism, Leisure and Events, 18(1), 167-183.
Saglam, Y., & Ampountolas, A. (2020). The effects of shocks on Turkish tourism demand: Evidence using panel unit root test. Tourism Economics, 27(4), 859-866. https://doi.org/10.1177/1354816619899831 (Original work published 2021)
Salahodjaev, R., Safarova, N., & Usmanova, N. (2020). Determinants of tourism arrivals to Uzbekistan: evidence from dyadic data. Tourism Review International, 24(4), 251-255.
Santos Silva, J. M. C., & Tenreyro, S. (2006). The log of gravity. Review of Economics and Statistics, 88(4), 641–658. https://doi.org/10.1162/rest.88.4.641
Seth, D., Sheel, A., Onder, I., & Uysal, M. (2026). Cross-border tourism in North America: A hybrid deep learning framework with macroeconomic indicators. Tourism Management, 113, 105320.
Shah, I. A., Nengroo, T. A., & ul Haq, I. (2022). Determinants of International Tourism Demand in India: An Augmented Gravity Model Approach. Studia Universitatis Vasile Goldi? Arad, Seria ?tiin?e Economice, 32(3), 102-115.
Solarin, S. A., Erdogan, S., Pata, U. K., & Kartal, M. T. (2024). Modeling the determinants of tourism diversification: An empirical analysis for Australia. Tourism Economics, 30(8), 2002-2020. https://doi.org/10.1177/13548166241246024 (Original work published 2024)
Song, H., & Li, G. (2008). Tourism demand modelling and forecasting - A review of recent research. Tourism Management, 29(2), 203–220. https://doi.org/10.1016/j.tourman.2007.07.016
Song, H., Witt, S. F., & Li, G. (2012). The advanced econometrics of tourism demand. Routledge.
Tan, C. Y., & Soon, S. V. (2023). Tourism demand for Malaysia: Further evidence from panel approaches. Asia Pacific Management Review, 28(4), 459-469.
Thao, H. T. P. (2026). Decoding the tourism-economy linkage in Vietnam (1990–2023): evidence from an extended ARDL model. SN Business & Economics, 6(2), 47.
Tinbergen, J. (1962). Shaping the world economy: Suggestions for an international economic policy. Twentieth Century Fund.
Tolcha, T. D., Njoya, E. T., & Christidis, P. (2026). Exploring the determinants of domestic air travel across Africa. Journal of Air Transport Management, 131(10292), 4.
Tourism Malaysia. (2023). Malaysia tourism statistics in brief 2023. Malaysia Tourism Promotion Board.
Ulucak, R., Yücel, A. G., & ?lkay, S. Ç. (2020). Dynamics of tourism demand in Turkey: Panel data analysis using gravity model. Tourism Economics, 26(8), 1394-1414. https://doi.org/10.1177/1354816620901956 (Original work published 2020)
UNESCO. (2023). Culture and sustainable development report. UNESCO.
UNWTO. (2021). Tourism and COVID-19: Impacts and recovery. United Nations World Tourism Organization.
UNWTO. (2023). World tourism barometer 2023. United Nations World Tourism Organization.
Wamboye, E. F., Nyaronga, P. J., & Sergi, B. S. (2020). What are the determinants of international tourism in Tanzania?. World Development Perspectives, 17, 100175.
World Bank. (2023). World development indicators. World Bank. https://data.worldbank.org
World Economic Forum. (2023). Travel and tourism development index 2023. World Economic Forum.
World Health Organization. (2023). Global health observatory data repository. WHO.
WTTC. (2023). Economic impact research 2023. World Travel & Tourism Council.
Witt, S. F., & Witt, C. A. (1995). Forecasting tourism demand: A review of empirical research. International Journal of Forecasting, 11(3), 447–475. https://doi.org/10.1016/0169-2070(95)00591-7
Yang, Y., Wong, K. K. F., & Wit, K. D. (2010). A literature review of tourism demand modeling and forecasting. International Journal of Management Reviews, 12(4), 427–457. https://doi.org/10.1111/j.1468-2370.2009.00262.x
Yerdelen Tatoglu, F., & Gul, H. (2020). Analysis of tourism demand using a multi-dimensional panel gravity model. Tourism Review, 75(2), 433-447.
King, C. W. K., Ibrahim, K., Ganie, K., Narawi, F., & Gadiman, N. S. (2026). Determinants of Tourism Demand in Malaysia. International Journal of Academic Research in Business and Social Sciences, 16(5), 1091–1117.
Copyright: © 2026 The Author(s)
Published by Knowledge Words Publications (www.kwpublications.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
