The impacts of financial and non-financial crises on tourism: Evidence from Macao and Hong Kong. (January 2020)

• Record Type: Journal Article
• Authors: U, Sio-Chong Tony; So, Yuk-Chow Jacky
• Is Part Of: Tourism management perspectives. Volume 33(2020)
• Publication Date: 2020-01
• Subjects: Tourism demand -- Casino tourism -- Crisis event -- Tourism development -- Income effect -- Macao -- Hong Kong; C26 -- L83 -- Z30; Tourism -- Periodicals; 338.4791
• DOI: 10.1016/j.tmp.2019.100628
• Languages: English
• ISSNs: 2211-9736

Abstract

Abstract: This study examines the negative impacts of economic crises and disasters caused by weather or diseases on inbound tourists. We use two well-known tourist cities, Macao and Hong Kong, to highlight the importance of economic variables in attracting tourists, and the significant decreases in tourists when economic crises and disaster hit. Our results show that ignoring the impacts of crises will bias the statistical estimates. Using a simple dummy variable method, we illustrate that the test results can change from insignificant to significant statistically. We find that different types of crises will have different degree of negative impacts on tourism industry which are important for policy makers and the tourism industry in crisis management and in overcoming the difficulties in attracting more tourists under very unfavorable conditions. Highlights: Key factors of tourism demand model for Macao and Hong Kong are identified. Dummy variables are important to estimate the tourism demand model correctly when crises happened in the sample period. SARS and subprime mortgage crisis have negative impact on tourism industry of Macao and Hong Kong. Typhoon Hato only has negative impact on tourism industry of Macao. The corruption in Mainland China and the opaque VIP gambling service in Macao created negative income effect in Hong Kong.