Tourism and Troubles: Effects of Security Threats on the Global Travel and Tourism Industry Performance

Abstract

Literature on the effects of security threats such as terrorism, political instability, and geopolitical power-plays on travel and tourism has produced mixed results with scant attention paid to the spillover effects on the tourism economy (e.g., employment, leisure expenditure, travel, and tourism services’ contribution to gross domestic product). This study provides a conceptual framework for the transmission of direct, indirect, and induced spillover effects of security threats on travel and tourism service industries. It uses rigorous methodological design and non-spatial and spatial panel-data analyses to examine the effects of security threats on tourism demand and economy. The conceptual framework and results of spatial panel data provide novel insights into security threats’ spillover effects on spatial inter-connectivity in the tourism service industry. The results show that security threat indices have significant negative impacts on tourist receipts, but they also contribute positively to employment, leisure expenditure, and tourist arrivals. Our conceptual model and substantial findings will inform both policymakers and future research.