The Impact of Geopolitical and Pandemic Risks on Tourist Inflows: Evidence From Asia-Pacific Region

Abstract

The aim of this research is to investigate the impact of major risks such as geopolitical and pandemic risks on tourism industry in selected countries of Asia-Pacific. The results were obtained using a sample of 10 neighboring countries in the period of 1996 to 2018. Diagnostic tests confirmed the existence of spatial interaction between model variables for these countries. According to the results, the economic growth, internally and in neighboring countries, leads to an increase in the influx of tourists. Whereas increased domestic prices will reduce the influx of domestic tourists, rising prices in neighboring countries intensify tourists’ arrival of the country. Furthermore, results reveal that domestic geopolitical and pandemic risks lead to a decrease in tourist arrivals. In addition, whereas pandemic risks in neighboring countries do not have a significant effect on tourist arrivals, geopolitical risks in neighboring countries lead to more domestic tourists’ arrival.