Convergence of tourism market diversification: evidence from a new indicator based on Herfindahl–Hirschman index

In a bid to add to the understanding of the dynamics of tourism diversification, this study examines the convergence of tourism market diversification in 98 countries. The countries have been divided into different clusters based on the level of diversification, the volume of tourism arrivals, and income level, and convergence has been tested for each cluster. Additionally, our empirical analysis uses new sets of panel unit root tests that allow for (un)known single and double breaks to explore the convergence of tourism market diversification. The results suggest that there is evidence for convergence of tourism market diversification using the full sample. Further results suggest that among the different clusters of the countries examined, there is more evidence of convergence for tourism market diversification when the countries are divided based on the level of diversification. The implications of the results are also discussed.