How Pandemics Affect Tourism: International Evidence

Abstract

We document the negative effect of pandemics on tourist arrivals by using data for 127 countries for the period of 2000-2018. This effect is valid only for the case of low-income economies. The findings will provide insights for the possible effects of COVID-19 on the tourism industry. Once we consider the change in “Discussion about Pandemics Index” from 2019 to the first quarter of 2020, the model estimations suggest a tourist arrival decrease of 20% in the whole sample and 29% in low-income economies. This in line with the forecasts of UNWTO (2020). However, it should also be noted that the effect of COVID-19 is hard to predict, as the world has not experienced such a global pandemic before. As long as the travel bans and border closures remain, the negative effect will get higher.

Keywords: COVID-19, Pandemics, Tourism, Arrivals

JEL Classification: L83