Global uncertainty and the effectiveness of currency depreciation on tourism demand in G20 economies
Discover Sustainability, vol.7, no.1, 2026 (ESCI, Scopus)
- Publication Type: Article / Article
- Volume: 7 Issue: 1
- Publication Date: 2026
- Doi Number: 10.1007/s43621-026-03428-x
- Journal Name: Discover Sustainability
- Journal Indexes: Emerging Sources Citation Index (ESCI), Scopus, Geobase, Directory of Open Access Journals
- Keywords: Emerging versus advanced economies, Exchange rate competitiveness, Global uncertainty, Institutional resilience, Tourism demand
- Akdeniz University Affiliated: Yes
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.