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Corresponding author:
1 Kyiv National University of Technology and Design, Ukraine
E-mail: yulia.kostinets@gmail.com 
ORCID: https://orcid.org/0000-0001-6427-675X
2 Kyiv National University of Technology and Design, Ukraine
E-mail: valeriya1989@i.ua 
ORCID: https://orcid.org/0000-0002-4222-7620

DOI: https://doi.org/10.30525/2661-5150/2022-1-12

MODELING THE PROCESSES OF DEVELOPMENT  
OF THE DOMESTIC MARKET OF TOURIST SERVICES  

AND HOSPITALITY
Iuliia Kostynets1, Valeriia Kostynets2

Abstract. The study is devoted to the issue of modeling the processes of development of domestic market of 
tourist services and hospitality. Accordingly, the purpose of the study is to model the development of domestic 
market for tourism services and hospitality. During the study, the authors concluded that under current 
conditions of competitiveness of tourist regions of Ukraine on a global scale is directly related to the mechanism 
of cluster management of tourism development, including domestic. The authors established that the subjects 
of cluster policy are legislative and executive bodies of state and/or local authorities, which in the process of its 
implementation interact with each other and with business associations, manufacturing enterprises, educational, 
scientific and financial institutions, transport and logistics companies, service organizations, etc. Methodology. 
The theoretical basis of the study were the fundamental principles of economics, approaches to the general and 
special methods of scientific knowledge, scientific achievements of domestic and foreign scientists on modeling 
the development of tourism and hospitality. When modeling the processes of development of domestic market 
of tourist services and hospitality, methods of analysis of economic dynamics, structural and functional analysis, 
scientific abstraction, as well as the graphical method, econometric methods of linear regression and other 
methods of economic and mathematical modeling were used. The results and value of the research are to develop 
an author's model of development of the domestic market of tourism and hospitality of Ukraine, the essence of 
which is to use a cluster approach. In the mechanism of cluster management of the domestic tourism market it is 
important to determine the means and methods of targeted state influence, including levers of influence of local 
authorities, in order to effectively develop the cluster system of tourist destinations in Ukraine. The proposed 
mechanism is the basis for the implementation of cluster policy as a system of relations between the state and 
economic entities to improve the competitiveness of the national tourist product through the formation and 
development of tourism and hospitality clusters. The authors have improved the scientific and practical approach 
to clustering, which is based on the construction of a cluster model of the domestic market of tourist services of 
Ukraine, which provides an effective state policy of development of individual tourist clusters and the domestic 
market of tourist services as a whole.

1. Introduction
Tourism as the most widespread phenomenon  

of the modern period can be considered as a significant 
socio-economic and political fact, capable of influencing 
the economic system and economic development of 
regions and countries as a whole. World experience 
and practice of socio-economic stability of developed 
countries show that their natural, climatic, historical 
and cultural resources, as well as ethnic features become 
a common asset due to the development of tourism, 
which can be equated to a highly profitable industrial 
business.

Analyzing the scientific achievements of foreign and 
domestic scientists (Aleeva, Mochalova, 2018; Bran, 
Manea, 2012; Bujok, Klempa, Jelinek, Porzer, Rodriguez 
Gonzalez, 2015; Garnov, Krasnobaeva, 2012; Gorelova, 
Tultaev, 2012; Ghemawat, 2018; Gronroos, 1985; 
Sahaidak, Kostynets, Kostynets, 2019; Yong-Hyun, 
Wang, Fesenmaier, 2002), it should be noted that they 
comprehensively cover the theoretical and practical 
aspects of the organizational and economic mechanism 
for the creation and effective functioning of tourism 
entities. However, the current situation in the tourism 
markets of the world in the context of globalization 

This is an Open Access article, distributed under the terms 
of the Creative Commons Attribution CC BY 4.0



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and globalization requires constant identification and 
assessment of the current socio-economic aspects of 
tourism, analysis of factors, causes and consequences 
that promote or hinder the development of tourism.  
In this aspect, the development and application 
of scientific approaches to the study of the factors 
of development of the modern market of tourist 
services, its segmentation, the formation of levers of 
economic regulation and improvement of forms and 
methods of management of tourism in the regions,  
in particular through the cluster approach to managing 
the development of the internal market of tourist 
services, acquire significant importance.

Accordingly, the purpose of the study is to model 
the processes of development of the domestic market 
of tourist services and hospitality. When modeling 
the processes of development of the domestic market 
of tourist services and hospitality the methods of 
economic dynamics analysis, structural and functional 
analysis, scientific abstraction, as well as the graphical 
method, econometric methods of linear regression 
and other methods of economic and mathematical  
modeling were used.

2. The need for clusters in the field  
of tourism and hospitality

In modern conditions, tourism can be seen as a  
catalyst for economic development of regions, allowing 
the maximum use of the full range of recreational 
resources, social, cultural, industrial and climatic 
potential of the territories.

There are many different types of tourism, the 
popularity of which varies depending on the season, 
region, political situation, category of consumers and 
current market trends. Each tourist decides for himself 
how to organize his vacation, what type of tourism he 
will enjoy, taking into account his needs, expectations 
and interests at the moment. Some tourists prefer 
recreational or health tourism, others prefer extreme 
or ecological tourism, but all are willing to allocate 
financial resources for cognitive tours.

In modern conditions of management in the tourism 
industry there is a significant crisis situation. Despite  
the existing difficulties with recreation in foreign 
countries, familiar to domestic tourists, reorientation 
to domestic tourism is practically not happening.  
In many regions there is a lack of quality tourist 
infrastructure, even in the presence of recreational or 
cultural and historical potential. A large part of today 's 
tourists are not satisfied with the standard range of 
tourist offers – beach vacations or sightseeing tours  
with visits to museums. Many tourists are attracted  
by the "complex product" with a large number of 
components that can be changed depending on 
individual needs. Accordingly, there is currently a need 
to create clusters in tourism and hospitality.

Thus, in the process of organizing the cluster it is 
necessary to determine the list of benefits for each of 
the cluster participants and ways of their optimization; 
formation of a set of necessary initial data (analytical, 
statistical, mathematical, empirical, etc.); preparation of 
a package of documents for institutionalization of the 
cluster, giving it the status of a legal entity; expertise of 
developed intra-cluster concepts, strategies, programs, 
projects, plans and the formation of a comprehensive 
strategy for the implementation of local cluster 
initiatives; formation of a system of monitoring and 
control of the implementation of cluster initiatives 
strategy; assistance in assessing the potential product 
of the cluster for compliance with national and 
international standards; integrating strategies for 
implementing cluster initiatives with city and regional 
development strategies; publicizing cluster initiatives 
at public hearings, assessing whether they meet the 
expectations of experts and the local community; and 
promoting international relations and cooperation 
at various levels; organization of information and 
communication support, in particular, the organization 
of PR-campaigns, social advertising, creating a  
positive image of the cluster, informing businesses  
about the opportunities and benefits of cluster 
associations and cooperation within the cluster; 
development of appropriate educational and 
methodological support; organization and conduct 
of trainings, seminars, conferences, other information 
and communication activities for potential participants 
of clusters; other technical, financial, consulting  
assistance (Kostynets, 2018). 

The activity of many clusters has shown a higher 
level of their results and competitive advantages 
compared with the activities of business entities that 
are not included in certain structural associations, 
which means that clusters play a leading role in 
achieving competitiveness (Pushkar, Fedorova,  
2011). At the same time, one of the main tasks in 
the system of increasing the competitiveness of 
the national economy is to identify the potential 
for intrasectoral clustering or clustering at the  
regional level.

It should be noted that the cluster strategy of  
economic development should be seen as a set of  
actions and plans of the government (state economic 
policy) to implement the network principle of 
governance for the transition to a cluster model of 
development, the ultimate goal of which is to improve 
the well-being of citizens by accelerating economic 
growth. The formation of cluster strategy is based  
on the principles of the cluster policy (Aftandilyants, 
2018). Accordingly, the overall state regulation of 
economic development in the field of tourism and 
hospitality should be carried out taking into account 
the cluster strategy for the development of domestic 
tourism and hospitality market of Ukraine.



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3. Modeling processes of development  
of the domestic market of tourist services  
and hospitality industry

To build a model for the development of the  
domestic market of tourist services and hospitality, 
it is necessary to determine the factors and criteria of 
clustering.

Accordingly, it is necessary to determine the 
most significant factors of tourism and hospitality 
development in Ukraine, on the basis of which to build 
a model of the domestic market of tourist services  
and hospitality in Ukraine to model ways and means  
of achieving a positive effect. To confirm the  
significance of these factors and identify their 
dependencies it is necessary to conduct a correlation 
and regression analysis by constructing a multiple linear 
regression model.

Below is the constructed multifactor regression 
equation for all groups of species factors:

Y = a0 + a1 X1 + a2 X2 + ... + an Xn + C,                 (1)
Where Y is dependent variable; 
Х1,2,…, n – independent variables; 
n – number of independent variables; 
a0 – free term of the equation; 
a1, 2,..., n – parameters of the multifactor model; 
C – equation residues. 
According to econometric and statistical patterns, the 

parameters of the multifactor model can be found by 
acting with matrices according to the formula:

a = (Х’Х)–1 Х’у                                                           (2)
First, it is necessary to construct a multifactor 

linear regression of the economic development of the 
domestic tourism and hospitality market and determine 
the strength of the relationship between the factors for 
2015–2020. Determine the dependence of the share of 
tourism and hospitality in GDP as the main indicator 
of its strategic development (Y) on the consumer price 
index (X1), the number of tourism entities in the market 

(X2), the average number of employees in tourism (X3), 
number of employed population in the economy of 
Ukraine (X4), the share of investments from the state 
budget for the tourism development (X5), the number 
of tourists served by tourism entities (X6), the number 
of incoming (foreign) tourists (X7), the profitability 
of tourism entities (X8) and the number of hotels in 
Ukraine (X9) according to the State Statistics Service of 
Ukraine. 

A linear relationship (multicollinearity) may exist 
between the factors, respectively, one of them should  
be excluded from the model, since the inclusion of 
linearly dependent factors leads to the construction 
of a fully or partially unpredictable regression model. 
The selection of factors is carried out by means of 
a correlation matrix. Let us build a correlation matrix 
to determine the factors on which the share of tourism  
and hospitality in GDP depends.

At the intersection of columns and rows is the 
correlation coefficient, which becomes important 
within [-1; 1]. If the correlation coefficient is within 
[-0,2; 0) U (0; 0,2] – the correlation is very weak;  
[-0,5; -0,2) U (0,2; 0,5] – correlation is weak;  
[-0,7; -0,5) U (0,5; 0,7] – correlation is average;  
[-0,9; -0,7) U (0,7; 0,9] – correlation is strong;  
[-1; -0,9) U (0,9;1] – correlation is very strong. 

The analysis has revealed that the share of tourism 
and hospitality in GDP (Y) is weakly correlated 
with the consumer price index (X1), the number of 
tourism entities (X2), the share of investment from 
the state budget for the tourism development (X5), 
the number of tourists served by tourism entities 
(X6), the number of incoming (foreign) tourists (X7), 
the profitability of tourism entities (X8). The strong 
correlation is with the number of hotels (X9) and the 
number of employed population in the economy of  
Ukraine (X4).

It is important to exclude factors with weak  
correlation and build the regression equation Y from 
X4 and X9 by method of least squares, because it allows 
to get such estimates of parameters, for which the sum 

Table 1
Correlation matrix of the relationship between the share of tourism and hospitality  
in GDP and the factors influencing it 

 Y X1 X2 X3 X4 X5 X6 X7 X8 X9
Y 1
X1 0,3469 1
X2 -0,2686 -0,0031 1
X3 -0,6296 -0,7782 0,5135 1
X4 0,7257 0,2830 0,3359 -0,2466 1
X5 0,4078 0,9868 0,0367 -0,7880 0,4060 1
X6 0,2520 -0,5277 0,4695 0,5542 0,6107 -0,4370 1
X7 0,4570 -0,4881 0,2107 0,3768 0,6354 -0,4040 0,9538 1
X8 -0,2433 -0,6227 0,0133 0,6448 -0,4228 -0,7178 0,2968 0,3155 1
X9 -0,8325 -0,6092 0,5727 0,9139 -0,3294 -0,6096 0,3210 0,0805 0,3486 1

Source: authors' calculations



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of squares of deviations of actual values of the result 
indicator from calculated ones is minimal.

The result is a regression equation as follows:

Y = -34,67 + 0,00277X4 – 0,0020X9                    (3)
The model should be evaluated for adequacy 

and compliance with real data by the coefficient of 
determination R2 (R-squared), Student's t-test criterion, 
Fisher's criterion (F-test), estimation of equation 
residues, estimation of predicted and actual values of Y.

The coefficient of determination is one of the most 
effective assessments of the adequacy of the regression 
model, a measure of the quality of the regression 
equation, the characteristics of the predictive power 
of the analyzed regression model. R2 determines the 
dependence of the performance indicator (Y) – in this 
case the indicator of the share of tourism and hospitality 
in GDP – on all factors, ranging from (0; 1). If R2 → 1, 
there is a close relationship between the variables, the 
model is adequate and corresponds to the real data, if  
R 2 → 0 – vice versa. In our case R2 ≈ 0,9217 → 1, that 
means that the share of tourism and hospitality in GDP 
(Y) is strongly dependent on the number of hotels 
(X9) and the number of employed population in the 
economy of Ukraine (X4).

Student's t-test criterion gives the observed value of 
t-statistics. Its value is used to verify the significance of 
the appropriate estimation of the regression parameter. 
There are two hypotheses: hypothesis Н0 about the 
equality of zero of the corresponding coefficient 
(factor X does not affect Y); hypothesis Н1 about the  
inequality of zero of the corresponding coefficient 
(factor X affects Y). In this case, the hypothesis Н1  
(t-test X4 = 2,9605; t-statistics X9 = -3,8910). That 
means that the number of hotels (X9) and the number  
of employed population in the economy of Ukraine  
(X4) affect the share of tourism and hospitality 
in GDP (Y).

Fisher's criterion (F-test) is used to test the model 
for adequacy using the probability value. There are two 
hypotheses: hypothesis Н0 about the equality of zero  
of all regression coefficients (the model is not  
adequate); hypothesis Н1 about the inequality of zero 
(the model is adequate). If the probability value is less 
than the accepted value of α (5%), the null hypothesis 
is rejected. All coefficients of the constructed  
regression are not equal to 0 and F-test (0,022) is 

less than the assumed value of α, so hypothesis Н1 is 
fulfilled – the constructed model is adequate and can 
be used to predict the share of tourism and hospitality 
in GDP and to allocate tourism clusters by region of 
Ukraine.

The results of the correlation and regression analysis 
of the factors of strategic economic development of 
tourism and hospitality in the national economy of 
Ukraine are summarized in Table 2.

It should be noted that the most significant factors 
of economic development of tourism and hospitality 
in Ukraine are the number of employed population of 
Ukraine and the availability of tourist infrastructure,  
in particular hotels. The resulting regression model 
can be used to predict the targets of economic  
development of tourism and hospitality in Ukraine.  
To form effective tourist clusters it is proposed to take 
into account the relatedness of tourist regions on the 
basis of common borders and availability of tourist 
resources, the level of tourist infrastructure, etc. and  
to use this model to identify tourist clusters in 
the domestic tourist market. Figure 1 shows the  
distribution of regional sectors of tourism and 
hospitality in Ukraine, depending on the significant 
factors of correlation and regression model.

In general, the implementation of cluster policy 
should also be aimed at identifying, forming,  
supporting and consolidating clusters of small and 
medium-sized enterprises in the tourism business 
and hospitality, meeting the actual needs of business 
entities interested in improving their competitiveness 
by implementing joint projects within the cluster.

4. Conclusions
It should be noted that the essence of the model 

proposed by the authors of the development of 
domestic tourism and hospitality market in Ukraine 
is to use the cluster approach. In the mechanism of 
cluster management of domestic tourism market it is  
important to determine the means and methods of 
purposeful state influence, including the leverage  
of local authorities for the effective development of 
the cluster system of tourist destinations in Ukraine. 
The proposed mechanism is the basis for the imple- 
mentation of cluster policy as a system of relationships 
between the state and business entities to improve 

Table 2
The results of the correlation and regression analysis of factors of economic development  
of tourism and hospitality in the national economy of Ukraine 

Target indicator Influencing factors Coefficient of determination R2 F-test

Share of tourism and hospitality 
in GDP of Ukraine, %

– number of hotels (X9) 
– the number of employed population in 
the economy of Ukraine (X4)

0,9217 17,6637

Y = -34,67 + 0,00277X4 – 0,0020X9

Source: developed by the authors 



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Kropyvnytskyi
reg.

Volyn reg.
Chernivtsi reg.

Ternopil reg.

Chernihiv reg.
Kherson reg.

Sumy reg.

Rivne reg.

Mykolaiv reg.

Zhytomyr reg.

Zakarpattia reg.

Cherkasy reg.

Khmelnytskyi
reg. Iv.-Frankivsk reg.

Poltava reg.

Vinnytsia reg.

Zaporizhzhia reg.

Donets…

Kyiv reg.

Odessa reg.

Lviv reg.

Kharkiv reg.

Kyiv city

Dnipro region

-500

0

500

1000

1500

2000

2500

3000

-5 0 5 10 15 20 25 30

Figure 1. Distribution of regional sectors of tourism and hospitality in Ukraine for the purpose of their clustering

Source: developed by the authors

the competitiveness of the national tourist product  
through the formation and development of clusters of 
tourism and hospitality.

In conclusion, it is important to note that in order to 
implement effective public policy on the development 
of regional tourist clusters and domestic market of 
tourist services in Ukraine, it is necessary to conduct 
qualitative research to determine the actual number of 
existing tourist associations and hotel enterprises within 
the cluster. This task should be carried out mainly by 
local and regional authorities, because they have more 

differentiated information about the development of 
local businesses. At the same time, it is important for 
the authorities not only to ensure overall control over 
the activities of tourism and hospitality enterprises to 
pay taxes and monitor migration processes, but also 
to ensure the development and implementation of an 
effective mechanism of interaction between government 
agencies and all stakeholders of the enterprises. Equally 
important is the development of programs to support 
small and medium-sized businesses in tourism in 
Ukraine, which is a prospect for further research.

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