Assessing the Elasticity of Health Tourism Demand from Middle Eastern Countries

Comprising medical and health (prevention) types of tourism, health tourism is of great importance for Iran, considering the country’s potential medical capabilities (the presence of qualified practicing physicians and extensive medical and treatment facilities) and appropriate natural health resources (such as hot springs, salt domes, salt lakes, and Mud therapy facilities). Moreover, the capacity of health tourism in terms of foreign exchange earnings is more than three times than that of ordinary international tourism. However, despite its great capacities, Iran has a modest share of the health tourism market, the increase in which requires the assessment of the elasticity of health tourism demand from the Middle East in terms of the relevant effective factors. Therefore, this study sought to find answers to the following basic questions: 1- What are the factors affecting the demand for health tourism? 2- What is the elasticity of the demand for health tourism in terms of such factors? To this end, this study assessed the demand for health tourism using the Almost Ideal Demand System (AIDS) and the simultaneous equation Model. Moreover, a questionnaire was administered to 182 tourists coming from the Persian Gulf countries to express their opinion regarding health tourism and estimate the elasticity of health tourism demands in terms of relevant effective factors. The results of the AIDS estimations revealed that the price elasticity of health tourism demand was greater than one, while the price elasticity of other products and accommodation services was less than one. Moreover, it was found that the elasticity of health tourists' demand from Iran belonged to significant variables such as the tourist’s income level, visa validity, expenses, exchange rate variations, and the inflation rate.