Terrorism and travel advisory effects on international tourism

The paper applies dynamic panel modeling to investigate the impact of terrorism and travel advice on global tourism. Annual arrivals data for 49 destinations and 15 leading countries of origin for the period 2010-2014 are used. Results indicate that casualties or fatalities from terrorism, absent travel advice, significantly reduce tourism demand. However, casualties (fatalities) combined with travel advice have a relatively larger adverse impact on tourism demand. The effects identified, however, are sensitive to country characteristics. Casualties (fatalities) as well as travel advice significantly weaken tourism demand for low-income countries but have no significant effect in high-income countries.