Accurately forecasting travel demand can help policymakers and business enterprises significantly improve tourism promotion and marketing strategies, optimize investment plans, and achieve high operational efficiency. Although the existing literature has shown that geopolitical risks (GPR) and economic policy uncertainty (EPU) significantly and negatively affect travel demand, it has ignored the diversity in this demand and its diverging sensitivity to or tolerance for risks. To fill this gap, this study proposes that leisure and business travel react differently to GPR and EPU, and performs a comparative wavelet analysis based on the data on inbound foreign tourists in South Korea. The results show that leisure travel reacts quickly and sensitively to global and domestic GPR and EPU, but business travel moves much less sensitively, showing a high tolerance for risks. Recognizing business travel as a more stable and lucrative market segment, this study proposes that policymakers and business managers should implement targeted measures to promote business travel.
