THE IMPACT OF COVID-19 ON TOURIST HOTEL PERFORMANCE AND TOURISM DEMAND: EMPIRICAL EVIDENCE USING POPULATION-BASED ADMINISTRATIVE DATA FROM TAIWAN

Abstract

This paper examines the impact of COVID-19 on tourist hotel performance and tourism demand in Taiwan. We use population-based administrative data on tourist hotels and visits with official records of COVID-19 cases to estimate the effect of the disease on the industry. Results show that a 1% increase in the number of confirmed cases of COVID-19 decreased the total revenues, and the room revenues and food and beverage revenues of tourist hotels by 0.33%, 0.47% and 0.26%, respectively. Moreover, the impact of COVID-19 is heterogeneously distributed among tourist hotels of different quality. With respect to mechanism behind the negative effect of COVID-19 on tourist hotel performance, decreases in tourism demand is a driving factor. We find that a 1% increase in the number of confirmed cases of COVID-19 reduces the number of tourist visits by 0.10%.