Abstract
In this article we investigate the link between fluctuations in tourist arrivals (total, Arabs, Europeans) to Lebanon and terrorism in Lebanon on one hand, and the Syrian civil war on the other hand. This is done by estimating a set of models from the GARCH(1,1) family. Hence, in this article we attempt to model the conditional mean and conditional variance of the logarithm of monthly tourist arrivals to Lebanon between January 1995 and December 2014. The results reveal a significant negative marginal effect for terrorism on tourism demand. Moreover, terrorism is found to have a negative impact on the volatility of total international arrivals and Arab arrivals, but a positive impact on the volatility of European arrivals. Hence, terrorism reduces fluctuations in tourist arrivals in the first two cases, but increases fluctuations in the third case. However, terrorism has a transitory effect on the Lebanese tourism sector while the Syrian civil war has a permanent effect. In fact, during the Syrian civil war the volatility of the Lebanese tourism demand decreased.
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