IDEAS home Printed from https://ideas.repec.org/a/gam/jtourh/v5y2024i2p19-303d1370039.html
   My bibliography  Save this article

Pandemic and Economy: An Econometric Analysis Investigating the Impact of COVID-19 on the Global Tourism Market

Author

Listed:
  • Ioannis-Panagiotis Varzakas

    (Department of Economics, University of Thessaly, 38333 Volos, Greece)

  • Theodore Metaxas

    (Department of Economics, University of Thessaly, 38333 Volos, Greece)

Abstract

With the outbreak of the COVID-19 pandemic, the global tourism market has become one of the most affected sectors of the economy. In this research, the literature on the economic effects created by COVID-19 on a global level is first studied and the measures and restrictions that governments are obliged to take in order to suppress and prevent the spread of the coronavirus are analyzed. Next, there is an attempt to empirically estimate a system of equations regarding the two channels of influence of COVID-19 on tourism, making use of cross-sectional data, and specifically for a sample of 38 countries that launched vaccination up until the end of 2020. The explained results confirm that tourism is directly affected by the spread of COVID-19, due to the effort of travelers to avoid illness, but also due to the measures taken by governments to limit it. Tourism is also indirectly affected, due to the negative impact on income. Using 3SLS, an equation was developed to calculate the direct and indirect impact of COVID-19 on tourism. Notably, the dependent variable (tourism expenditure) exhibited a positive correlation with the independent variable (GDP) and a negative correlation with the total COVID-19 cases. Consequently, it was determined that a unit increase in the COVID-19 variable led to a reduction in international tourism expenditure by USD 859,237. Finally, there is a concern, and further investigation is needed, regarding the effect of vaccination against COVID-19 on tourism, which, while it is expected to be negative, is not confirmed by the results.

Suggested Citation

  • Ioannis-Panagiotis Varzakas & Theodore Metaxas, 2024. "Pandemic and Economy: An Econometric Analysis Investigating the Impact of COVID-19 on the Global Tourism Market," Tourism and Hospitality, MDPI, vol. 5(2), pages 1-14, April.
    • Handle: RePEc:gam:jtourh:v:5:y:2024:i:2:p:19-303:d:1370039
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2673-5768/5/2/19/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2673-5768/5/2/19/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Serhan Cevik, 2022. "Going Viral: A Gravity Model of Infectious Diseases and Tourism Flows," Open Economies Review, Springer, vol. 33(1), pages 141-156, February.
    2. Hites Ahir & Nicholas Bloom & Davide Furceri, 2022. "The world uncertainty index," POID Working Papers 031, Centre for Economic Performance, LSE.
    3. B. James Deaton & Brady J. Deaton, 2020. "Food security and Canada's agricultural system challenged by COVID‐19," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(2), pages 143-149, June.
    4. Prayag, Girish & Chowdhury, Mesbahuddin & Spector, Samuel & Orchiston, Caroline, 2018. "Organizational resilience and financial performance," Annals of Tourism Research, Elsevier, vol. 73(C), pages 193-196.
    5. World Bank, 2020. "The World Bank Annual Report 2020 [Rapport annuel 2020 du Banque Mondiale]," World Bank Publications - Books, The World Bank Group, number 34406.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ali, Imran & Arslan, Ahmad & Chowdhury, Maruf & Khan, Zaheer & Tarba, Shlomo Y., 2022. "Reimagining global food value chains through effective resilience to COVID-19 shocks and similar future events: A dynamic capability perspective," Journal of Business Research, Elsevier, vol. 141(C), pages 1-12.
    2. Jaewon Jung, 2023. "Multinational Firms and Economic Integration: The Role of Global Uncertainty," Sustainability, MDPI, vol. 15(3), pages 1-18, February.
    3. Pasura Aungkulanon & Walailak Atthirawong & Pongchanun Luangpaiboon & Wirachchaya Chanpuypetch, 2024. "Navigating Supply Chain Resilience: A Hybrid Approach to Agri-Food Supplier Selection," Mathematics, MDPI, vol. 12(10), pages 1-42, May.
    4. Huang, Wendi & Zhang, Weikang, 2024. "Exchange rate and corporate investment: Heterogeneous effects via the global value chain networks," Journal of International Money and Finance, Elsevier, vol. 147(C).
    5. Guglielmo Maria Caporale & Anamaria Diana Sova & Robert Sova, 2024. "The Covid‐19 pandemic and European trade flows: Evidence from a dynamic panel model," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 2563-2580, July.
    6. Alessandro Paolo Rigamonti & Giulio Greco & Mariarita Pierotti & Alessandro Capocchi, 2024. "Macroeconomic uncertainty and earnings management: evidence from commodity firms," Review of Quantitative Finance and Accounting, Springer, vol. 62(4), pages 1615-1649, May.
    7. Gheorghe Cristian Popescu & Monica Popescu, 2022. "COVID-19 pandemic and agriculture in Romania: effects on agricultural systems, compliance with restrictions and relations with authorities," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(2), pages 557-567, April.
    8. Khalil, Makram & Osten, David & Strobel, Felix, 2025. "Trade dynamics under geopolitical risk," Discussion Papers 03/2025, Deutsche Bundesbank.
    9. António Afonso & José Alves & João Jalles & Sofia Monteiro & João Tovar Jalles, 2024. "Energy Price Dynamics in the Face of Uncertainty Shocks and the Role of Exchange Rate Regimes: A Global Cross-Country Analysis," CESifo Working Paper Series 11384, CESifo.
    10. Zhou, Xi & Xiao, Min & Wu, Huiying & You, Jiaxing, 2024. "Does policy uncertainty travel across borders? Evidence from MNC subsidiary investment decisions," Journal of Banking & Finance, Elsevier, vol. 163(C).
    11. Afonso, António & Alves, José & Monteiro, Sofia, 2024. "Beyond borders: Assessing the influence of Geopolitical tensions on sovereign risk dynamics," European Journal of Political Economy, Elsevier, vol. 83(C).
    12. Magud, Nicolas E. & Pienknagura, Samuel, 2024. "The return of expansionary austerity: Firms' investment response to fiscal adjustments in emerging markets," Journal of International Money and Finance, Elsevier, vol. 143(C).
    13. Naimoli, Antonio, 2022. "Modelling the persistence of Covid-19 positivity rate in Italy," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    14. Jamil, Abd Rahim Md. & Law, Siong Hook & Mohamad Khair-Afham, M.S. & Trinugroho, Irwan, 2023. "Financial inclusion and economic uncertainty in developing countries: The role of digitalisation," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 786-806.
    15. Dhanashree Somani & Rangan Gupta & Sayar Karmakar & Vasilios Plakandaras, 2025. "Supply Bottlenecks and Machine Learning Forecasting of International Stock Market Volatility," Working Papers 202521, University of Pretoria, Department of Economics.
    16. Shu, Ying & Hossain, Mohammad Razib & Tillaguango, Brayan & Alvarado, Rafael & Işık, Cem & Murshed, Muntasir & Chen, Zhiguang, 2024. "Geo-political risks, uncertainty, financial development, renewable energy, and carbon intensity: Empirical evidence from countries at high geo-political risks," Applied Energy, Elsevier, vol. 376(PB).
    17. Jang, Seongsoo & Park, Jin Suk & Choi, Youngseok Thomas, 2022. "Organizational resource and resilience in tourism," Annals of Tourism Research, Elsevier, vol. 93(C).
    18. Dang, Tam Hoang Nhat & Balli, Faruk & Balli, Hatice Ozer & Gabauer, David & Nguyen, Thi Thu Ha, 2024. "Sectoral uncertainty spillovers in emerging markets: A quantile time–frequency connectedness approach," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 121-139.
    19. Mihaela Neacșu & Iuliana Eugenia Georgescu, 2024. "Analysing the Impact of Crises on Financial Performance: Empirical Insights from Tourism and Transport Companies Listed on the Bucharest Stock Exchange (during 2005–2022)," JRFM, MDPI, vol. 17(2), pages 1-14, February.
    20. Glebocki, Helena & Saha, Sujata, 2024. "Global uncertainty and exchange rate conditions: Assessing the impact of uncertainty shocks in emerging markets and advanced economies," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 96(C).

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jtourh:v:5:y:2024:i:2:p:19-303:d:1370039. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.