The impact of hurricane strikes on cruise ship and airplane tourist arrivals in the Caribbean

Abstract

We investigate the impact of hurricanes on airplane and cruise ship arrivals in the Caribbean. To this end, we construct a monthly panel of airline and cruise ship arrivals and hurricane destruction and employ a panel vector autoregressive model with an exogenous shock (VARX) to quantify the dynamic effects of tourist arrivals after a hurricane for 18 Caribbean countries over the period 2000–2013. The results suggest an immediate decline in the month of a strike and up to one month after on cruise ship (2.33 and 1.21 percentage points) and airplane (0.57 and 0.27 percentage points) arrivals. Moreover, a strong recovery in airplane arrivals in months 3–6 following a hurricane was sufficient to induce a net positive effect of around 2 percentage points of total tourist arrivals into the region.