Terrorism and Tourism: An Empirical Exemplification of Consequences of Terrorist Attacks on Tourism Revenues in Turkey

Abstract

The booming tourism sector in Turkey has resulted in major economic gains in terms of direct revenues to both government and private sectors alike. Turkey had more than 45 million visits in 2018, and top inbound arrivals were from Russia and European Union (EU) members, such as Germany, the United Kingdom, and Bulgaria, among others (Organization for Economic Co-operation and Development [OECD], 2020). However, terrorism is becoming a challenge to tourism development. This study explores terrorism–tourism dynamics in Turkey. The short- and long-run impacts of terror attacks on tourism revenues were examined within the framework of an autoregressive lag (ARDL) model using monthly data for the period between 2012 and 2018. The empiri cal findings did not support terrorism's effects on tourism revenues. However, in the long run, terror-related casualties and fatalities on tourism revenues had different effects. The findings affirm that the casualty rate has a stronger impact on terrorism–tourism dynamics in Turkey because a 1% increase in reported injuries from terror attacks hampers revenues by approximately 0.1%. Hence, adequate and continuous support for general security establishments is imperative while strengthening commitments to the international cooperation on the war against terrorism to proactively contain the undesirable impacts of terrorism in the Turkish tourism industry.