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Macau hotel industry’s response to global shocks

Author

Listed:
  • Aliana Man Wai Leong
  • Emrah Kocak
  • Jingyi Bai
  • Fevzi Okumus

Abstract

This study examines the Macau hotel industry’s response to global shocks using vector autoregression analysis. According to the findings, the hotel occupancy rate reacts negatively to a one-standard-deviation shock in global geopolitical risk. However, this reaction decreases after the second period and completely loses its effect after the fourth period. Hotel occupancy rate responds weakly and short term negatively to the shock of global economic policy uncertainty. The hotel industry reacts short term, weakly, and positively to a shock in US monetary policy uncertainty. According to the variance decomposition results, at the end of the tenth term (long-term), 96.25% of the change in hotel occupancy rates is explained by their own dynamics. The rest is 3.00% geopolitical risk, 0.5% US monetary policy uncertainty, and 0.25% economic policy uncertainty.

Suggested Citation

  • Aliana Man Wai Leong & Emrah Kocak & Jingyi Bai & Fevzi Okumus, 2024. "Macau hotel industry’s response to global shocks," Tourism Economics, , vol. 30(7), pages 1914-1921, November.
    • Handle: RePEc:sae:toueco:v:30:y:2024:i:7:p:1914-1921
    DOI: 10.1177/13548166241234096
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    References listed on IDEAS

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