A Multivariate Analysis on the Factors

that Affect the Competitiveness of Tourism Around the Globe

In partial fulfilment
of the requirements in
Stat 147: Introduction to Multivariate Analysis

Submitted by:

de Guzman, Kate Anne A.

de la Pea, Marjolaine L.
Picio, Jr., John P.
Rivera, Ralph Christian L.

Submitted to:
Prof. Wendell Q. Campano

December 22, 2016

 ABSTRACT

Tourism is one of the key drivers of socio-economic progress throughout the world. With
the increasing number of destinations worldwide, tourism have opened new horizons to people
both the old and the young generation especially to the poor by creating jobs and enterprises, export
revenues, and infrastructure development. This study aims to create a global profile based on
tourism indicators. Secondary data was used and a total of 123 countries were included in the
study. Multivariate analysis was performed to assess a countrys performance when it comes to
tourism. Factor analysis was used which yielded five factors that would influence a countrys
tourism competitiveness: resources, utilities, development indicators, environment sanctuary and
biodiversity. Cluster analysis was also performed using the factors obtained. This method
categorized the countries into five clusters namely service capable, underdeveloped,
environmentalist, powerhouse and industrialized.

Keywords: cluster analysis, factor analysis, global competitiveness, tourism

 TABLE OF CONTENTS

CHAPTER I
Background..1
Objectives of the Study....2
Scope and Limitations..2
Significance of the Study.2
CHAPTER II
Review of Related Literature...3
On Air Transport and Tourism3
On Aquaculture Production and Tourism....3
On Armed Forces and Tourism....3
On Forest Area and Tourism3
On GDP and Tourism......4
On Health Expenditure Total and Tourism..4
On Improved Sanitation Facilities and Tourism..4
On Improved Water Source and Tourism....4
On Internet Users and Tourism5
On Labor Force and Tourism...5
On Marine Protected Areas and Tourism....5
On Services Offered and Tourism...5
On Terrestrial Protected Areas and Tourism...6
CHAPTER III
Methodology7
Data Gathering.7
Explanatory Variables..7
Factor Analysis9
Cluster Analysis...9
CHAPTER IV
Descriptives10
Factor Analysis..10
Cluster analysis..14
CHAPTER V
Conclusion and Recommendations18
REFERENCES.20
APPENDICES
Appendix A24
Appendix B26
 CHAPTER I
INTRODUCTION

Background
Tourism has been considered as one of the worlds greatest contributors in todays
culture and economy. Even before 1995, tourism had arrivals around 500 million and it keeps on
increasing yearly. According to the records of World Tourism Organization (UNWTO), there is
an increase in international tourism (number of arrivals) from 823,219,414 in 2005 to 1.161
billion in 2014. In UNWTOs long-term forecast report Tourism Towards 2030, it is expected
that international tourist arrivals worldwide will increase by 3.3% a year between 2010 and 2030
to reach 1.8 billion by 2030.
It can be shown that tourism has lifted nations especially the developing countries from
incapability of providing their resources and has become a source of income, that is, as an
investment priority. Philippines, as an example of a developing country, had PhP 1.43 trillion in
2015 that came from travel and tourism industry alone. These established businesses,
infrastructures, support and use for natural resources, and the peoples capability to adapt to new
ideas. However, the demand for an increase in tourist arrivals had left environmental factors
aside which is the most affected. As it can be a tool for environmental protection and
conservation, its adverse effects are unnoticed due to its economic advantage. In fact, Air travel
alone had 40% of the total CO2 emissions (kt) of 35,848,592 in 2013. Conservation benefits are
being addressed to solve not only the problem of pollution but land degradation, climate change,
solid waste and littering, sewage and species extinction as well.
Jafari (1981) defined tourism with its impact in the economy as a study of man away
from his usual habitat, of the industry which responds to his needs and the impacts that both he
and the industry have for the host socio-cultural, economic and physical environments. This
implies that tourism is not merely an activity for a person outside his zone, instead, to fully
understand tourism is to consider all the factors that it affects and is affected by it either
positively or negatively.

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Objectives of the Study
The researchers intend to create a global profile based on tourism indicators. Different
factors affecting tourism are evaluated and tested for its significance on predicting the level of
tourism in the world. Thus, this study will provide a better understanding of international tourism
by identifying its possible areas for improvement and development.
With this, the researchers have the following objectives:
1. To explain the underlying causes what makes tourism one of the fastest growing
economic sectors in the world;
2. To identify meaningful indicators of tourism through factor analysis;
3. To identify clusters of countries based on their tourism indicators using cluster analysis;
and
4. To help countries in their effort in planning for the infrastructure as well as marketing
their products.

Scope and Limitations

This study focuses on the development of tourism in each country around the globe using
various tourism indicators. The data used in the analyses came from the World Databank with
264 countries and 23 tourism indicators extracted. Originally, all of the countries were
considered in the study. However, due to insufficient datasets, other countries were removed
from the obtained data. Also, some indicators may not be present in the results because of
missing data. The study will then focus on the data from 123 remaining countries and 13
covariates. Also, the results and conclusions are only limited to the remaining 123 countries.

Significance of the Study

Over the past six decades, tourism has experienced continued expansion and
diversification to become one of the largest and fastest-growing economic sectors in the world.
(UNWTO) This study would help countries to better understand tourism, its impact and its
importance, on the current state of each countrys economy. The results of this study would
further benefit policy-makers in creating efficient and advantageous decisions while generating
effective strategies in developing a sustainable long-term development for economic growth
through tourism.

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 CHAPTER II
REVIEW OF RELATED LITERATURE

On Air Transport and Tourism

According to the Aviation Benefits (2016), over 54% of international tourists now travel
by air. This means that more than half of the population of the travelers uses air transport and
most of them come from other countries or other towns whose fastest (or maybe) way to get to
their destination is through air. This creates more jobs to airlines, traffic services, food chains,
hotels and restaurants, and resorts and other recreational places as tourists consumes or avails
these services during their visit.

On Aquaculture Production and Tourism

People do not stay at one place and do the same thing when travelling. Tourists look for
other activities aside from the usual, that is, going to sea for a dive. With that, there is a great
consumption of the aquaculture product (i.e fishes, molluscs, crustaceans, and aquatic plants) as
tourists seek new activities in water-based destinations (beaches and fishing grounds). The
presence of this kind of fish farming production can influence tourist on where to go and how
long they can stay (Nimmo and Cappell, 2009).

On Armed Forces and Tourism

UNWTO (1996) states that safety and security are vital to providing quality in tourism
which is given with equal priority like health. As the number of visitor increases, so as the
number of lives the government should protect. Armed forces represent a large portion of public
safety. An increase in the number of armed forces means an increase to the perception of tourists
of how safe a place is. UNWTO added that the success or failure of a tourism destination
depends on being able to provide a safe and secure environment for visitors.

On Forest Area and Tourism

Forest area covers 31% of the worlds land area (Adams, 2012). It provides shelter for
animals and supplies wood and other goods for human needs. It also provides amenity services

3
which attract people to visit (Roberts et. al, 2000). Bigger forest area means cleaner and fresher
air and environment for the tourists.

On GDP and Tourism

Consumption in tourism generates job opportunities to locals given more products to
offer. A specific tourist destination in a country may have a different pricing for their products
and people buy goods and avail services mostly for personal use regardless of price which is a
form of direct spending. Increasing number of tourists implies increasing demand and this
happens during peak months of a certain season. The manufacturing and services sector of a
certain country would most likely to take advantage on this idea (Bradshaw, 2012).

On Health Expenditure Total and Tourism

It is necessary that countries would provide basic needs for health services. Such that
travellers would likely to increase on certain destinations that give importance to the health of
their tourists. The total health expenditure of a certain country covers the provision of health
services (preventive and curative), family planning activities, nutrition activities, and emergency
aid designated for health but does not include provision of water and sanitation (WHO).

On Improved Sanitation Facilities and Tourism

As defined by World Health Organization (2013), sanitation facilities are essential to
ensure hygienic separation of human excreta from human contact. Travellers would prefer a
cleaner place to stay in where people would not get sick. More often, the places that offer proper
sanitation procedures for facilities are the costly recreational places. This increases the number of
visitors and profit for this kind of place. It is one of the reasons why government spend a great
deal of money on resorts and restaurants with cleaner and safer atmosphere for the visitors to
come in since proper sanitation generates economic benefit (Robbins, 2013).

On Improved Water Source and Tourism

Improved drinking water source implies safe drinking water (UNICEF, 2013). An
increase in the number of tourists results to increase in demand for resource like safe drinking
water. Investment in safe water supply would mean reduction in health risks and growth in

4
productivity of the labor force (Frone and Frone, 2013). Aside from the bottled water that people
can buy within the vicinity of their travels, there are available water on households and places of
accommodation. These supplies need to be as clean as possible to avoid spread of diseases that
may ensue.

On Internet Users and Tourism

Internet users helps in the competition of global tourism market. Internet can be used via
a computer, mobile phone, personal digital assistant, games machine, digital TV etc. The internet
plays a vital role in all economic sectors, including the tourism industry (Batini, 2013). Since
internet is available to all of those who have access 24 hours a day, the users keep the electronic
sectors alive by using it as a source of information in finding places to stay, availing services on
products and vehicular services, and in promoting tourist attractions.

On Labor Force and Tourism

The labor force is defined simply as the people who are willing and able to work. The
size of the labor force is used to determine the unemployment rate (World Bank, 2013). Without
these people, no infrastructures will be built, there will be no proper services for the tourists,
attractions will no longer function, there will be not enough production and supply will not meet
the demand, and the economy might fail.

On Marine Protected Areas and Tourism

Marine Protected Areas are intertidal or subtidal terrain, overlying water and associated
flora and fauna and historical and cultural features, that have been reserved by law or other
effective means to protect part or all of the enclosed environment. Like the terrestrial protected
areas, these places are target destinations of the tourists. With overflowing natural resources,
these diverse habitats need to be protected against destructive human activities. If these areas are
safeguarded from the people who have less knowledge on conserving it, locals can produce more
catch, beauty of nature will be preserved and will last longer, and there will be no e

5
On Services Offered and Tourism
Services include value added in wholesale and retail trade (including hotels and
restaurants), transport, and government, financial, professional, and personal services such as
education, health care, and real estate services (World Bank, 2013). Improvements on the
mentioned sectors will provide an overall look of a country. People will tend to visit places with
accessible and proper accommodation, comfortable and fast transport, safe atmosphere, clean
ecosystem, and inexpensive cost of living. This will give an upturn on profit and job
opportunities to all the sectors in economy

On Terrestrial Protected Areas and Tourism

Terrestrial protected areas are totally or partially protected areas of at least 1,000 hectares
that are designated by national authorities as scientific reserves with limited public access,
national parks, natural monuments, nature reserves or wildlife sanctuaries, protected landscapes,
and areas managed mainly for sustainable use (World Bank, 2013). These areas are top
destinations of many travellers since these are protected by the government from posed threats of
human activity. Since these places are preserved, it means that a lot of natural resources that
serve as natural habitat to flora and fauna are located here. Terrestrial protected areas need
permission for a tourist to visit, most of those who are allowed have research purposes for
preservation of biodiversity.

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 CHAPTER III
METHODOLOGY
Data Gathering
The data in this study came from the data repository of World Bank for year 2014.
Several variables were chosen by the researchers to explain the tourism competitiveness of
different countries but some variables contain missing data. With this, the variables reduced to
13 variables. Due to availability of data, 2014 was chosen as the reference year of the data. In
addition, the number of observations for analysis decreased from 264 to 123.

Explanatory Variables
The variables included in the analysis are as follows:
1. Air transport, passengers carried [AirTrans] - include both domestic and international
aircraft passengers of air carriers registered in the country.

2. Aquaculture production (metric tons) [Aquaculture] - refers to output from aquaculture

activities, which are designated for final harvest for consumption.

3. Armed forces personnel, total [ArmedForce] - are active duty military personnel,
including paramilitary forces if the training, organization, equipment, and control suggest
they may be used to support or replace regular military forces.

4. Forest area (sq. km) [Forest] - is land under natural or planted stands of trees of at least 5
meters in situ, whether productive or not, and excludes tree stands in agricultural
production systems (for example, in fruit plantations and agroforestry systems) and trees
in urban parks and gardens.

5. GDP (current US$) [GDP] - is the sum of gross value added by all resident producers in
the economy plus any product taxes and minus any subsidies not included in the value of
the products. Data are in current U.S. dollars. Dollar figures for GDP are converted from
domestic currencies using single year official exchange rates.

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6. Health expenditure, total (% of GDP) [HealthExp] - is the sum of public and private
health expenditure. It covers the provision of health services (preventive and curative),
family planning activities, nutrition activities, and emergency aid designated for health
but does not include provision of water and sanitation.

7. Improved sanitation facilities (% of population with access) [Sanitation] - refers to the

percentage of the population using improved sanitation facilities. They include flush/pour
flush (to piped sewer system, septic tank, pit latrine), ventilated improved pit (VIP)
latrine, pit latrine with slab, and composting toilet.

8. Improved water source (% of population with access) [Water] - refers to the percentage
of the population using an improved drinking water source. The improved drinking water
source includes piped water on premises (piped household water connection located
inside the users dwelling, plot or yard), and other improved drinking water sources
(public taps or standpipes, tube wells or boreholes, protected dug wells, protected springs,
and rainwater collection).

9. Internet users (per 100 people) [Internet] - are individuals who have used the Internet
(from any location) in the last 12 months. Internet can be used via a computer, mobile
phone, personal digital assistant, games machine, digital TV etc.

10. Labor force, total [LaborForce] - comprises people ages 15 and older who meet the
International Labour Organization definition of the economically active population: all
people who supply labor for the production of goods and services during a specified
period. It includes both the employed and the unemployed.

11. Marine protected areas (% of territorial waters) [Marine] - are areas of intertidal or
subtidal terrain--and overlying water and associated flora and fauna and historical and
cultural features--that have been reserved by law or other effective means to protect part
or all the enclosed environment.

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 12. Services, etc., value added (% of GDP) [Services] - correspond to ISIC divisions 50-99
and they include value added in wholesale and retail trade (including hotels and
restaurants), transport, and government, financial, professional, and personal services
such as education, health care, and real estate services.

13. Terrestrial protected areas (% of total land area) [Terrestrial] - are totally or partially
protected areas of at least 1,000 hectares that are designated by national authorities as
scientific reserves with limited public access, national parks, natural monuments, nature
reserves or wildlife sanctuaries, protected landscapes, and areas managed mainly for
sustainable use.

Factor Analysis
The essential purpose of factor analysis is to describe, if possible, the covariance
relationships among many variables in terms of a few underlying, but unobservable, random
quantities called factors (Johnson et. al.). In the study, factor analysis was used to determine
underlying factors that influence a countrys tourism competitiveness. The analysis was
performed through SAS using the principal component method.

Cluster Analysis
The basic objective in cluster analysis is to discover the natural groupings of the items (or
variables) (Johnson et. al.). The clustering is based on the closeness or similarity of one
object to the other. There are methods on clustering the observations namely: hierarchical
clustering and nonhierarchical clustering. Hierarchical method uses linkage to join clusters. On
the other hand, non hierarchical starts with (1) an initial partition of items or (2) initial set of seed
points which will form the nuclei of clusters. In the study, cluster analysis was used to classify
the countries into homogeneous groups using the factors obtained in factor analysis.

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 CHAPTER IV
Results and Discussion

Descriptives
Table 1. Percent Distribution of Countries by Continent

Continent Percentage

America, North 8.94 %

America, South 8.94 %

Africa 26.83 %

Asia 25.20 %

Europe 28.46 %

Oceania 1.63 %

The table above shows the percentages of the observations per continent. Majority of the
observations are from Europe. Availability of the data on the European nations may be the
reason why most of the observations. The countries in the data set are mostly from Europe,
Africa and Asia. On the other hand, only two countries represent the Oceania.

Factor Analysis
To determine how many factors should be retained, the researchers used the Kaiser-
Guttman rule which states that the number of factors to be extracted should be equal to the
number of factors having an eigenvalue greater than 1. Table 2 yields the eigenvalues of the
correlation matrix which shows four factors having an eigenvalue greater than 1. Also, Figure 1
shows the scree plot in which the elbow is on the fourth principal component. However, due to
interpretability, the researchers opted to retain five factors.

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 Table 2. Eigenvalues of the Correlation Matrix

Eigenvalues of the Correlation Matrix:

Total = 13 Average = 1

Eigenvalue Difference Proportion Cumulative

1 4.19287732 0.82642582 0.3225 0.3225

2 3.36645150 1.91342318 0.2590 0.5815

3 1.45302831 0.39780216 0.1118 0.6933

4 1.05522616 0.28500687 0.0812 0.7744

5 0.77021929 0.19089112 0.0592 0.8337

6 0.57932817 0.02959785 0.0446 0.8782

7 0.54973032 0.23184317 0.0423 0.9205

8 0.31788715 0.01797497 0.0245 0.9450

9 0.29991218 0.09502137 0.0231 0.9681

10 0.20489081 0.04212588 0.0158 0.9838

11 0.16276492 0.13400220 0.0125 0.9963

12 0.02876272 0.00984156 0.0022 0.9985

13 0.01892116 0.0015 1.0000

Figure 1. Scree Plot of Eigenvalues vs Principal Component

Table 3. Factor Pattern Using Varimax Rotation

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 Rotated Factor Pattern

Factor1 Factor2 Factor3 Factor4 Factor5

LaborForce 0.96043 -0.03510 0.06452 -0.03010 0.10447

Aquaculture 0.92060 -0.00770 -0.03254 0.00905 -0.07604

ArmedForce 0.85774 0.00837 0.09553 -0.09518 0.33602

Sanitation 0.01387 0.92678 0.06418 0.00301 -0.02852

Water 0.09325 0.91236 0.03346 0.03520 0.01715

Internet -0.01673 0.87818 0.17101 0.11706 0.04320

Services -0.15195 0.64211 0.45063 0.08704 -0.00510

HealthExp -0.11823 0.32638 0.79616 0.20354 -0.01483

GDP 0.59531 0.07638 0.69682 0.03766 0.24752

AirTrans 0.56826 0.06795 0.69408 -0.01291 0.25976

Terrestrial -0.02326 -0.04840 -0.02957 0.88860 -0.02452

Marine -0.04019 0.23210 0.23449 0.74465 0.05550

Forest 0.22147 0.00838 0.13384 0.02866 0.94621

Table 4. Variance Explained by Each Factor

Variance Explained by Each Factor

Factor1 Factor2 Factor3 Factor4 Factor5

3.2803961 3.0494614 1.9268570 1.4205241 1.1605639

Table 3 and 4 shows the rotated factor pattern of variables and the variance explained by
each factor, respectively. It can be seen in Table 3 that five factors are generated in the variables
using principal component method and Varimax rotation. Varimax rotation is used since the
factors it generates are the most sensible factors. In addition, according to Table 4, factors 1 and
2 explained most of the total variance of the observations.

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 Table 5. Final Communality Estimates

Final Communality Estimates: Total = 10.837803

Aqua
Forest Sanitation Water Marine Terrestrial GDP culture

0.9632 0.8640 0.8437 0.6680 0.7940 0.9085 0.8545

ArmedF Labor Health

HealthExp AirTrans orce Force Internet Services Exp

0.7960 0.8769 0.8669 0.9396 0.8163 0.6461 0.7960

The communality estimates and total communality are shown in Table 4. After using
Varimax rotation, communalities of the extracted indicators were generated which indicate the
importance of forest area, sanitation and water facilities, terrestrial protected areas, GDP,
aquaculture production, health expenditure, air transportation, armed force personnel, labor
force and internet users. With all communalities greater than 70%, these variables have been
identified to have significant effects to the tourism industry of a country. These indicators can
help on increasing or decreasing the competitiveness of the tourism sector of a country.

Identifying factors that affects tourism

FACTOR 1: RESOURCES
The first factor namely resources includes labor force, armed force personnel and
aquaculture production. This factor indicates the production of a country either by natural or
human resources. The availability of human resource denotes their capacity to accommodate and
serve the tourists. In addition, the natural resource suggests the kind and quality of items they can
offer.

FACTOR 2: UTILITIES
Utilities pertain to the second factor. The accessibility to necessary facilities like water,
sanitation, internet and services, which includes lodging, can have a big effect on the tourism

13
sector of a country. As their basic needs, tourists rely on how easy they can have access on these
utilities.

FACTOR 3: DEVELOPMENT INDICATORS

Health expenditure, GDP or Gross Domestic Product and air transportation defines the
development indicator of a country. Tourists check for the capability of a country in providing
the public needs such health and transportation. The development and modernization of a
country is essential to present an excellent credibility in the international tourism.

FACTOR 4: ENVIRONMENTAL SANCTUARY

The fourth factor which includes marine and terrestrial protected areas can be recognized
as environmental sanctuaries. The initiative programs of the government to protect and preserve
the natural resources can increase the chance of the country to be a worldwide tourist spot.

FACTOR 5: BIODIVERSITY
Biodiversity also affect the competitiveness of a country in the tourism sector. This is
significant since it specifies what scenic spots the country can can offer to the tourists. It also
describes the wide variety of natural resources a country has.

Cluster analysis

Cluster of countries by means of the factors extracted from factor analysis

CLUSTER=1

Variable N Mean Std Dev Minimum Maximum

Factor1 54 0.0215157 0.6589931 -0.5978659 3.7578964

Factor2 54 0.4518581 0.4734591 -0.5698529 1.2397466
Factor3 54 -0.2616315 0.6214759 -1.6020033 1.2320486
Factor4 54 -0.6733743 0.4883466 -1.5845609 0.6490797

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 Factor5 54 -0.1219267 0.2608022 -0.5917722 0.7164742

CLUSTER 1: THE SERVICE CAPABLE

Cluster 1 pertains to service capable countries in terms of manpower and utilities they can
provide. This cluster may have conflict of interest in their priorities. The positive value of factor
2, utility, denotes that they offer accessible facilities to the tourist. However, the negative value
of factor 4, environmental sanctuary, denotes that the countries under this cluster may have
reduction in their environmental resources. This cluster is composed of 43.90% of the
observation.

CLUSTER=2

Variable N Mean Std Dev Minimum Maximum

Factor1 29 -0.2332883 0.1641821 -0.5272726 0.0660742

Factor2 29 -1.4091668 0.5410731 -2.4715193 -0.5066918
Factor3 29 0.0045656 0.5713063 -1.1672345 1.1832519
Factor4 29 -0.1362721 0.5020491 -1.3046252 0.6566655
Factor5 29 -0.0918744 0.3528614 -0.6407138 1.4132852

CLUSTER 2: THE UNDERDEVELOPED

The second cluster is composed of underdeveloped countries. These observations have
unimproved facilities. The large negative value of the second factor, called utility, means that the
competitiveness of the country in the tourist sector will decrease due to these circumstances.
These may be due to low income, insufficient resources and/or conflicts or wars. Most of the
countries under these clusters are from Africa which is known to have poor or low income (Pew
Research Center). Also, countries like Afghanistan are affected by war. That is, 23.58% of the
observations is in this cluster.

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 CLUSTER=3

Variable N Mean Std Dev Minimum Maximum

Factor1 36 -0.1493338 0.1886115 -0.4710261 0.3264858

Factor2 36 0.4360288 0.8535299 -2.2560885 1.2314692
Factor3 36 0.1888957 0.7091470 -0.7800656 1.7326673
Factor4 36 1.1114821 0.9441355 -0.2739908 4.8809121
Factor5 36 -0.1648821 0.3210160 -0.5431330 0.9604805

CLUSTER 3: THE ENVIRONMENTALIST

Countries under this cluster have definite programs on preservation of nature. This cluster
can be called environmentalist cluster. The large positive value of the fourth factor,
environmental sanctuary, denotes that their government expresses their serious concern on nature
protection and preservation. Cluster 3 represents 29.27% of the observations included in the
analysis. Some countries in this cluster are major participants of the UN Climate Conference
with France as the host during 2015.

CLUSTER=4

Variable N Mean Std Dev Minimum Maximum

Factor1 3 0.4706429 1.0895110 -0.3386466 1.7094472

Factor2 3 0.2450433 0.6269804 -0.4672747 0.7132591
Factor3 3 2.3969907 5.1269582 -1.0493534 8.2888237
Factor4 3 -0.0063184 0.8671376 -0.7125093 0.9615115
Factor5 3 5.4132269 3.1821754 2.4830165 8.7983946

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CLUSTER 4: THE POWERHOUSE
In cluster four, the large positive values of the third factor, economic development, and
fifth factor, biodiversity, denotes that countries under this cluster may be economically powerful
and environmentally abundant. As seen in the cluster, Brazil which is home to one of the richest
biodiversities in the world is in this cluster (UNESCO Brazil). In addition, the two of the most
powerful nations in the world are in this cluster. United States and Russian federation are both
economically stable and technologically developed. This cluster is composed of 2.44% of the
observations.

CLUSTER=5

Variable N Mean Std Dev Minimum Maximum

Factor1 1 9.5676039 . 9.5676039 9.5676039

Factor2 1 0.0333353 . 0.0333353 0.0333353
Factor3 1 0.0044807 . 0.0044807 0.0044807
Factor4 1 0.3197023 . 0.3197023 0.3197023
Factor5 1 -1.0555266 . -1.0555266 -1.0555266

CLUSTER 5: THE INDUSTRIALIZED

This cluster comprises of only one country, China which is 0.81% of the
observations included in the experiment. This is the reason why factor 1 which pertains to the
resources has a significantly large positive value. China being the largest country in terms of
population has a large human resource. In addition, China being a manufacturing giant lead to
the large significant value of the first factor since they offer an extremely wide variety of items
and services.

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 CHAPTER V
CONCLUSION AND RECOMMENDATIONS

Tourism plays a dominant role in assessing a countrys development. It also contributes

to a countrys income and global competitiveness. To determine factors that affect tourism, the
researchers gathered possible indicators that may explain the level of tourism around the world.
Multivariate analysis was performed using the data from 123 countries. Factor analysis was used
to identify factors that can explain a countrys tourism performance. In addition, cluster analysis
was used to classify countries into groups that have the same characteristics.
The researchers came up with five factors that may be important in analyzing variables or
indicators that affect a countrys performance in terms of tourism. Five factors were obtained
namely resources, utilities, development indicators, environmental sanctuary and biodiversity.
The first factor accounts for the resources - a countrys capacity to accommodate and
serve the tourists. This factor is composed of the variables labor force, aquaculture and armed
forces. This factor suggests the countrys capacity in attracting tourists. The second factor
describes utilities a country can provide. This factor includes sanitation, water, internet and
services. The third factor is described by development indicators such as health expenditure,
GDP and air transport. The environmental sanctuary being the fourth factor is described by the
variables terrestrial and marine protected areas. Lastly, the fifth factor is described as the
biodiversity factor. This includes forest area.
Then, cluster analysis was performed using the factors obtained. The countries were
grouped into clusters with the same characteristics based on the five factors. There are five
clusters namely service capable, underdeveloped, environmentalist, powerhouse and
industrialized. Appendix B shows the countries which belong to these clusters.
The factors and clusters obtained in this study can help the countries involved in terms of
assessing and developing their global performance when it comes to tourism. The countries can
use the insights in improving their resources and services. Moreover, the results can guide a
countrys government in creating programs that can improve their countrys tourism
competitiveness.
There may be important factors that were not considered in the study. To further identify
the factors that is important in assessing tourism performance of a country, additional indicators

18
may be included such as those concerning communications and visiting accommodations. Also,
future researchers may consider those that significantly describe biodiversity such as animal and
plant species. Future studies may look examine the differences of developed countries and less-
developed or developing countries. Moreover, the researchers recommend adding more countries
in the study and considering the latest data set available.

19
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2015 Paris Climate Conference (COP21).. French foreign policy. France Diplomatie, French
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conference-cop21/. Accessed 21 Dec 2016.

Adams, Emily E. World Forest Area Still on the Decline. Earth Policy Institute. August 31,
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Available Military Manpower data through 2015. Available manpower by country.

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Batini, Ivica, MSc. The Role and the Importance of the Internet in Contemporary Tourism in
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Biodiversity in Brazil. UNESCO Office in Brasilia.

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Boyce, JK. From natural resources to natural assets. Economics Department, University of
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Cappell, Rod and Nimmo, Fiona. Assessment of evidence that fish farming impacts on tourism.
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2016.

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Climate Change and Tourism. Sustainable Development of Tourism. World Tourism
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Frone, Simona Maria and Frone, Dumitru Florin. Sustainable Tourism and Water Supply and
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Hill, G. et. al. Forests Role in Tourism: Phase 2 Summary Report - Final. Forestry Group
(Economics and Statistics) of the Forestry Commission. December 2003.
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International Tourism Definition. OECD Glossary of Statistical Terms.

stats.oecd.org/glossary/detail.asp?ID=5878. Accessed 20 Dec 2016.

Marine Protected Areas. Nature Conservancy. http://www.nature.org/science-in-

action/protected-areas-how-marine-protected-areas-help-alleviate-poverty.xml.
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Most People in Countries in Africa Are Poor or Low Income. Pew Research Center Global
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Pachauri, Shonali, et al. Access to Modern Energy. United Nations Industrial Development
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UNIDO_Access-to-Modern-Energy_2013-05-27.pdf. Accessed 18 Dec 2016.

Pullin, Andrew S. et. al. Human well-being impacts of terrestrial protected areas. BioMed
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Remo, Amy. Tourism contributes to P1.4T to GDP. Business/ Editor Picks. Philippine Daily
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Robbins, David. Guidance for Improving Sanitation in El Salvadors Tourism Areas Through
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Sanitation. Health topics. World Health Organization, 2016.

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23
 APPENDIX A
SAS Codes
PROC IMPORT OUT= WORK.survey
DATAFILE= "C:\Users\LENOVO\Desktop\Tour.xls"
DBMS=EXCEL2000 REPLACE;
SHEET="Sheet1$";
GETNAMES=YES;
RUN;

/*DETERMINING NUMBER OF FACTORS*/

PROC FACTOR DATA=WORK.survey SCREE;
VAR FOREST--SERVICES;
RUN;

/*FACTOR ANALYSIS*/
PROC FACTOR DATA=WORK.survey METHOD=PRIN RE ROTATE=PROMAX NFACT=5
OUT=FACTORS;
VAR FOREST--SERVICES;
RUN;

PROC PRINT DATA=FACTORS;

RUN;

/*DETERMINING NUMBER OF CLUSTERS*/

PROC CLUSTER DATA=FACTORS CCC PSEUDO METHOD=WARD
OUTTREE=CLUSTERS;
VAR FACTOR1--FACTOR5;
ID COUNTRY;
RUN;

/*CLUSTERING THE OBSERVATIONS*/

PROC TREE DATA=CLUSTERS N=4 OUT=CLUSTERED;
ID COUNTRY;
RUN;

PROC SORT DATA=CLUSTERED;

BY CLUSTER;
RUN;
PROC PRINT DATA=CLUSTERED;
BY CLUSTER;
RUN;

24
/*DESCRIPTIVE STATS OF EACH CLUSTERS*/
PROC SORT DATA=CLUSTERED;
BY COUNTRY;
RUN;
DATA DESCRIPTIVE;
MERGE FACTORS CLUSTERED;
BY COUNTRY;
RUN;
PROC SORT DATA=DESCRIPTIVE;
BY CLUSTER;
RUN;
PROC MEANS DATA=DESCRIPTIVE;
VAR FACTOR1--FACTOR5;
BY CLUSTER;
RUN;

25
 Appendix B
Countries under the Five Clusters

CLUSTER=1

Obs Country CLUSNAME

1 Czech Republic CL7

2 Hungary CL7

3 Bosnia and Herzegovina CL7

4 Serbia CL7

5 Lebanon CL7

6 Montenegro CL7

7 Albania CL7

8 Fiji CL7

9 Georgia CL7

10 Tunisia CL7

11 Mauritius CL7

12 Ukraine CL7

13 Armenia CL7

14 Sri Lanka CL7

15 Bahamas CL7

16 Cyprus CL7

17 Chile CL7

18 Argentina CL7

26
19 Belarus CL7

20 Philippines CL7

21 Vietnam CL7

22 Kazakhstan CL7

23 Honduras CL7

24 Panama CL7

25 El Salvador CL7

26 Kyrgyz Republic CL7

27 Ireland CL7

28 Jordan CL7

29 Algeria CL7

30 Bahrain CL7

31 Singapore CL7

32 Guyana CL7

33 Iran, Islamic Rep. CL7

34 Egypt, Arab Rep. CL7

35 Malaysia CL7

36 Azerbaijan CL7

37 Jamaica CL7

38 Myanmar CL7

39 Pakistan CL7

40 Gambia CL7

27
41 Paraguay CL7

42 Mexico CL7

43 Thailand CL7

44 Kuwait CL7

45 Oman CL7

46 Suriname CL7

47 Saudi Arabia CL7

48 Bangladesh CL7

49 Moldova CL7

50 Switzerland CL7

51 Qatar CL7

52 Turkey CL7

53 India CL7

54 Indonesia CL7

CLUSTER=2

Obs Country CLUSNAME

55 Cambodia CL11

56 Cote d'Ivoire CL11

57 Cameroon CL11

58 Ghana CL11

59 Afghanistan CL11

28
60 Sudan CL11

61 Kenya CL11

62 Uganda CL11

63 Benin CL11

64 Nepal CL11

65 Tajikistan CL11

66 Nigeria CL11

67 Ethiopia CL11

68 Niger CL11

69 Burkina Faso CL11

70 Senegal CL11

71 Zimbabwe CL11

72 Madagascar CL11

73 Mali CL11

74 Chad CL11

75 Gabon CL11

76 Lao PDR CL11

77 Togo CL11

78 Equatorial Guinea CL11

79 Rwanda CL11

80 Bolivia CL11

81 Malawi CL11

29
82 Mozambique CL11

83 Congo, Dem. Rep. CL11

CLUSTER=3

Obs Country CLUSNAME

84 Italy CL6

85 Spain CL6

86 Malta CL6

87 Portugal CL6

88 Belize CL6

89 Romania CL6

90 Latvia CL6

91 Slovak Republic CL6

92 Dominican Republic CL6

93 Morocco CL6

94 Estonia CL6

95 Lithuania CL6

96 Austria CL6

97 Bulgaria CL6

98 Croatia CL6

99 Costa Rica CL6

100 Greece CL6

30
101 Trinidad and Tobago CL6

102 Finland CL6

103 Colombia CL6

104 Peru CL6

105 Netherlands CL6

106 United Kingdom CL6

107 Guatemala CL6

108 France CL6

109 Germany CL6

110 Poland CL6

111 Tanzania CL6

112 Zambia CL6

113 Ecuador CL6

114 Namibia CL6

115 Belgium CL6

116 Congo, Rep. CL6

117 Japan CL6

118 Australia CL6

119 Slovenia CL6

CLUSTER=4

Obs Country CLUSNAME

31
120 Brazil CL5

121 Russian Federation CL5

122 United States CL5

CLUSTER=5

Obs Country CLUSNAME

123 China China

32