Terrorism and travel advisory effects on international tourism

ABSTRACT

The paper applies dynamic panel modeling to investigate the impact of terrorism and travel advice on global tourism. Annual arrivals data for 49 destinations and 15 leading countries of origin for the period 2010–2014 are used. Results indicate that casualties or fatalities from terrorism, absent travel advice, significantly reduce tourism demand. However, casualties (fatalities) combined with travel advice have a relatively larger adverse impact on tourism demand. The effects identified, however, are sensitive to country characteristics. Casualties (fatalities) as well as travel advice significantly weaken tourism demand for low-income countries but have no significant effect in high-income countries.

KEYWORDS:

• Dynamic panel
• GMM estimator
• effect of terrorism
• travel advice
• demand
• international tourism

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The data are obtained from the UNWTO statistical database available at http://www.e-unwto.org/toc/unwtotfb/current. The data capture arrivals from 15 source countries that have been leading tourist generators over the last few years.

2. Jet Fuel Spot price, FOB (dollars/gallon), was obtained from the U.S. Energy Information Administration site available at https://www.eia.gov/petroleum/data.cfm. Some researchers (e.g. Garín-Muñoz, 2006) have used price of crude oil to proxy for travel cost. However, the crude oil prices and jet fuel prices were found to have a very high correlation coefficient of 0.985.

3. The GTD is an open-source database that contains detailed information on terrorist events around the world, such as the type of attack, nature of attack, weapons used, fatalities, and casualties among others. The GTD is made available (at https://www.start.umd.edu/gtd/about/) by the National Consortium for the Study of Terrorism and responses to Terrorism (START).

4. WayBack Machine, by Internet Archive, provides a digital archive of publicly available websites and other information on the internet. It is available at http://web.archive.org/