Analyzing the nexus between pandemic, policy uncertainty, and international tourists’ behavior in Taiwan

ABSTRACT

The tourism and hospitality industry is the hardest-hit industry, owing to the disruptions from COVID-19. The tourism sector witnessed a mounting loss of about 2.86 trillion dollars during the pandemic period. Exploring how inbound international tourists’ perception gets affected by uncertainty originating from the pandemics can have important insights to revive tourism during the new normality. Against this backdrop, this paper explores the impact of the pandemics and global economic uncertainty on international inbound tourist arrivals to Taiwan, a major travel destination of the East during the period 1997 to 2020. In particular, we augment the traditional demand model of tourism with economic uncertainty indicators and disaster and pandemic dummies, to explore the impact on visitor arrivals in Taiwan from major countries around Asia, Africa, Oceania, Europe, and America. To this end, the Autoregressive Distributed Lag (ARDL) along with the modified Wald test of Toda Yamamoto (T-Y) was applied. The empirical results depict that apart from the pandemics, the global economic policy uncertainty has adverse implications on international tourism demand. The findings have important policy implications. Recovery of tourism demand should move along: i) new concepts on products; ii) new destination imagery and iii) marketing strategies through collaboration from the state.

分析流行病、政策不确定性与台湾国际游客行为之间的关系摘要

由于COVID-19的破坏，旅游业和酒店业是受灾最严重的行业。在大流行期间，旅游业损失了约 2.86 万亿美元。探索入境国际游客的看法如何受到流行病带来的不确定性的影响，;可以为在新常态下重振旅游业提供重要的见解。在此背景下，本文探讨了 1997 年至 2020 年期间流行病和全球经济不确定性对台湾（东方主要旅游目的地）的国际入境游客的影响。特别是，我们将传统的旅游需求模型扩展为经济不确定性指标以及灾难和流行病假人，以探讨对亚洲、非洲、大洋洲、欧洲和美洲主要国家来台游客的影响。为此，应用了自回归分布滞后 (ARDL) 以及 Toda Yamamoto (T-Y) 的改进 Wald 检验。实证结果表明，除流行病外，全球经济政策的不确定性对国际旅游需求也有不利影响。研究结果具有重要的政策意义。旅游需求的复苏应该伴随着: i）产品的新概念: ii) 新的目的地图像和 iii) 通过国家合作的营销策略。

KEYWORDS:

• Taiwan
• international tourism
• economic uncertainty
• pandemic
• structural break, ARDL

关键词:

• 台湾
• 国际旅游
• 经济不确定性
• 流行病
• 结构性断裂、ARDL

Disclosure statement

No potential conflict of interest was reported by the authors.

Availability of data and materials

All data analyzed during this study are available and freely collected from public sources.

Notes

1. Access date: July,2021.

2. Access date: July,2021.

3. For the brevity, the conventional unit root test results provided in the Appendix section.

4. Tourist arrival variables from other regions became also stationary after taking their first difference. For brevity of space the unit root test results can be made available upon request.

Additional information

Funding

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

Notes on contributors

Sudeshna Ghosh

Sudeshna Ghosh is an Associate Professor in the Department of Economics at Scottish Church College, Kolkata, West Bengal, India. Her research interests include trade and tourism development and time-series econometrics (E-mail : [email protected]).

Gizem Uzuner

Gizem Uzuner is currently an Associate Professor in School of Management at New Uzbekistan University, Tashkent, Uzbekistan. Her research interests include economic growth, macroeconomic theory, macroeconomic policy, housing market, environmental tourism, and energy economics (E-mail: [email protected]).