The Impact of Shocks on Tourism Revenues: An Analysis of Türkiye

The tourism industry is of critical importance for Türkiye. Revenues from tourism have a significant share in the Gross Domestic Product. The tourism sector is affected by factors such as wars, political uncertainties, and epidemics. Türkiye, due to its geopolitical position, is also exposed to these negative situations from time to time. Despite many negative developments in the last two decades, the tourism sector has been growing in the world. In synchronization with the development in the world, the tourism sector in Türkiye is also growing and its income is increasing. It is critical to understand how the tourism industry is affected by shocks such as wars, political uncertainties, and epidemics and to develop policy recommendations in this regard. This study aims to determine whether tourism revenues in Türkiye have a resilient structure against shocks. In this study, which covers the period 2004Q1-2020Q1, the revenue variable obtained from foreign tourists travelling to Türkiye in US dollars is used. The Ng & Perron (2001), Kwiatkowski, Phillips, Schmidt, and Shin (KPSS, 1992), Zivot-Andrews (ZA, 1992), and Lee-Strazicich (LS, 2003) unit root tests were used to determine whether the effect of shocks is permanent. The findings obtained with the Ng & Perron unit root test indicate that the shocks to tourism revenues in Türkiye cause a permanent effect and damage. However, according to the KPSS, ZA, and LS unit root tests, shocks temporarily affect Türkiye's tourism revenues.