INTERNATIONAL POLITICAL TURBULENCES IMPACT ON TRAVEL AND TOURISM

Abstract

Tourism is a major economic development force, but it appears that international political turbulence has an impact on tourism. Whether the impact of political instability on tourism is a negative or a positive one is the scope of this study. In addition, Substitution and Spillover Effects that occur as a result of political instability impact on tourism are analyzed to provide additional information about the impact on safe countries adjacent to political instability/ or located within the same region of the turmoil. This research attempts to prove that there is a correlation between international political turbulence and tourism. In addition, it tries to provide evidence about the Substitution and Spillover Effects and the factors that contribute to the existence of one but the other. Jordan, a country in the Middle East region that depends heavily on tourism for its economic development, is studied as a tool to measure this impact. Panel Data Analysis using the Fixed Effect Model and the Random Effect Model to prove or disprove the research hypotheses was used. The results provide that the tourism is associated with political turmoil only when the turmoil is taking place in the Middle East and North Africa region. Moreover, the Substitution Effect is correlated with international tourism that arrives from outside the Middle East and North Africa region. On the contrary, the Spillover Effect was proved to have a regional impact, within the region of turmoil.