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Corbet, Shaen; O’Connell, John F.; Efthymiou, Marina; Guiomard, Cathal; Lucey, Brian
Annals of tourism research, March 2019, 2019-03-00, 20190301, Volume: 75Journal Article
•We use an ARMA-GARCH model that examines changes in tourism to European terrorism.•Traffic flows are found to fall despite significant fare reductions.•Traffic varies substantially based on the flight origin and ticket-type purchased.•Business travel slows substantially due to duty of care for corporate transport.•Fare response was unable to mitigate substantial reductions in passenger demand. This paper estimates the influence of terrorist attacks on European tourism through the short-term post hoc response of the airline industry and passengers. We use a seasonally-adjusted ARMA-GARCH methodology on unique datasets that examine changes in tourism as measured by ASKs, seats filled and changes in both fares and revenues. Traffic flows are found to fall despite significant fare reductions; however, this response varies substantially based on the flight origin and ticket-type purchased. We found that business travel slows substantially due to duty of care legislation for corporate transport. While we found evidence indicating substantial airline fare reductions, in the majority of investigated cases this response was unable to mitigate substantial reductions in passenger demand and flows across varying ticket types.
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