Co-Movement in Tourist Arrivals in the Caribbean

Since the 1960s, the Caribbean has made numerous attempts at regional integration. One of the reasons for the failure of these attempts is the difference in business cycles across the region. Given the importance of tourism to the region, if arrivals to the Caribbean are converging over time, the differences in the business cycle characteristics of each country should decline. Using a panel of 22 countries and monthly data from 1977 to 2004, this study investigates the co-movement in tourism penetration and the growth in tourist arrivals for the region. The empirical results presented in the paper suggest that there is no convergence in tourism penetration across the group but that there are similarities in the rates of growth of tourist arrivals.