The Effects of Economic and Financial Crises on International Tourist Flows: A Cross-Country Analysis

Abstract

This article investigates the effect of different economic and financial crises, such as inflation crisis, stock market crash, debt crisis, and banking crisis on international tourism flows using a panel gravity data set of 200 countries over the period 1995 to 2010. The results show that the inflation crisis has a dampening effect on international tourism flows in both the host and origin countries. The results also show that domestic debt crisis encourages international tourism arrivals in the host countries, whereas its impact on international tourism services in originating countries is negative. Further, the impact of these crises on tourism is region dependent. In particular, banking crisis depresses international tourism flows in host countries situated in regions such as America and Latin America and Caribbean, whereas its impact on originating countries located in regions such as Asia and the Middle East is insignificant.