Impact Assessment of External Shocks on International Tourism Demand

Most of forecasting studies has estimated coefficients as the effect of external events on tourism demand, but estimation of the impact of external events on international tourism demand was neglected. In this respect, this study aims to investigate the impact of external event on tourism demand. To this end this study employed two research approaches in order to estimate the impact of Severe Acute Respiratory Syndrome (SARS) on international tourism demand for Korea. The results of this study reveal that SARS caused significant impact on the inbound tourism demand for Korea. In specific,the results of the ARIMA Intervention model (Approach 1) predicted the negative impact of SARS as -610,671 tourists. On the other hand, the second approach predicted the impact of SARS as -864,193 visitors. The results of two approaches indicate that the impact of SARS on tourism demand could be different. This findings imply that the variety of forecasting approaches should be employed and compared each other since multiple approaches provide more advantages than any single approach. In other words, utilizing multiple approaches provides researchers and policy-makers with range of impact of SARS that is not conveyed by any single approach.