COVID-19 impact on tourism inflow in selected Asia-Pacific countries: a gravity model framework

Abstract

PurposeThe main objective of this paper is to examine the impact of COVID-19 on the tourism flows of eight Asia-Pacific Countries: Australia, Hong Kong, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand.Design/methodology/approachUsing monthly data from 2019M1 to 2021M10 and 48 origin and eight destination countries in a panel Poisson pseudo-maximum likelihood (PPML) estimation technique and gravity equation framework, this paper finds that after controlling for gravity determinants, COVID-19 periods have a 0.689% lower tourism inflow than in non-COVID-19 periods. The total observations in this paper are 12,138.FindingsA 1% increase in COVID-19 transmission in the origin country leads to a 0.037% decline in tourism flow in the destination country, while the reduction is just 0.011% from the destination. On the mortality side, the corresponding decline in tourism flows from origin countries is 0.030%, whereas it is 0.038% from destination countries. A 1% increase in vaccine intensity in the destination country leads to a 0.10% improvement in tourism flows, whereas vaccinations at the source have no statistically significant effect. The results are also robust at a 1% level in a pooled OLS and random-effects specification for the same model.Research limitations/implicationsThe findings provide insights into managing tourism flows concerning transmission, death and vaccination coverage in destination and origin countries.Practical implicationsThe COVID-19-induced tourism decline may also be considered another channel through which the global recession has been aggravated. If we convert this decline in terms of loss of GDP, the global figure will be huge, and airline industries will have to cut down many service products for a long time to recover from the COVID-19-induced tourism decline.Social implicationsIt is to be realized by the policymaker and politicians that infectious diseases have no national boundary, and the problem is not local or national. That’s why it is to be faced globally with cooperation from all the countries.Originality/valueThis is the first paper to address tourism disruption due to COVID-19 in eight Asia-Pacific countries using a gravity model framework.HighlightsAsia-Pacific countries are traditionally globalized through tourism channelsThis pattern was severely affected by COVID-19 transmission and mortality and improved through vaccinationThe gravity model can be used to quantify the loss in the tourism sector due to COVID-19 shocksTransmission and mortality should be controlled both at the origin and the destination countriesVaccinations in destination countries significantly raise tourism flows