The Impact of ETA’s Dissolution on Domestic Tourism in Spain

Abstract

In late 2011, the Spanish terrorist organization ETA announced the end of armed violence after more than forty years of illegal activity. While the existing literature has already established the negative impact of terrorist actions on international tourism in a particular region, this paper aims to determine whether ETA’s final ceasefire and definitive dissolution had a positive impact on domestic tourism in Basque Country. To that end, a directed gravity model is estimated over a panel data-set of 699 domestic tourist flows between the Spanish regions from 2008 to 2013. Results suggest that the negative impact on visitor flows was localized in the Basque Country. Also, regardless of a permanent ceasefire announced in 2010, only the 2011 ‘definitive cessation of violence’ had an immediate significant impact on the number of visitors to the Basque Country. These results complement the scarce literature on post-conflict tourism analysis and may have implications for regional authorities in affected regions in their efforts to rebuild their destination brands.

Keywords:

• Domestic tourism
• Terrorism
• Gravity model

Acknowledgements

We gratefully acknowledge the insightful comments and constructive suggestions by two anonymous referees that helped improve the paper. The usual disclaimer applies.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Also note that there are no available data on potential instruments for the price variable that are needed to address the potential endogeneity problems in the specification.

² The variable attackBC represents the number of attacks occurred in the Basque Country for those observations that have the Basque Country as the destination. On the other hand, attackES represents the number of attacks occurred in any of the other regions that have the same attacked region as the destination. Note that this approach does not consider any potential substitution effects from the attacked regions to alternative destinations. In the case of the Basque Country, these effects are considered to be relatively small due to its consistently low ranking as tourism-attracting region – only 2.3% of domestic trips chose the Basque Country as destination in 2012 (IET 2013a) – in comparison with other Autonomous Communities. In terms of market share, the neighboring regions (i.e. La Rioja, Navarra, and Cantabria) are not important tourism attractors either.

³ In order to account for tourist flows, FAMILITUR database includes travelers with tourist purposes that stay at least one night at any type of accommodation in a different region. Consequently, day-trippers are excluded (www.iet.tourspain.es).

⁴ The attack that led to the last victim of ETA in southern France (2010) is not included in the data-set.