IDEAS home Printed from https://ideas.repec.org/a/vrs/zirebs/v25y2022i1p95-110n1006.html
   My bibliography  Save this article

Tourism and Business Cycles: Does the Relationship Fade Away?

Author

Listed:
  • Kožić Ivan

    (Institute for Tourism, Vrhovec 5, 10000 Zagreb, Croatia, Phone: +385-1-3909-666, Fax: +385-1-3909-667)

  • Arčabić Vladimir

    (Faculty of Economics and Business, University of Zagreb, Trg J. F. Kennedyja 6, 10000 Zagreb, Croatia, Phone: +385-1-238-3144)

  • Sever Ivan

    (thinktourism d.o.o., Radnička cesta 80, 10000 Zagreb, Croatia, Phone: +385-98-402-561)

Abstract

For a long time, tourism has been considered a social, economic and environmental phenomenon that provides products and services whose consumption is supposed to surge in periods of economic growth and wane in periods of slowdown, thereby acting procyclical. To examine this hypothesis, we have explored the exact behavior of tourism activity before and after the last big economic crisis – the Great Recession 2008 followed by the European Sovereign Debt Crisis. We have applied a methodology of business cycle analysis to investigate the relationship between the cyclical components of GDP and tourism nights spent by the residents of 23 EU member states in the 1996-2018 period. We report an important structural change in the relationship between tourism and business cycles. The relationship became apparently weaker over time and finally became insignificant after the end of the crisis, suggesting a smooth structural change. Our findings suggest uncertainty as to how tourism activity would restore its usual dynamics following the end of the current COVID-19 pandemic recession.

Suggested Citation

  • Kožić Ivan & Arčabić Vladimir & Sever Ivan, 2022. "Tourism and Business Cycles: Does the Relationship Fade Away?," Zagreb International Review of Economics and Business, Sciendo, vol. 25(1), pages 95-110.
    • Handle: RePEc:vrs:zirebs:v:25:y:2022:i:1:p:95-110:n:1006
    DOI: 10.2478/zireb-2022-0007
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/zireb-2022-0007
    Download Restriction: no
    File URL: https://libkey.io/10.2478/zireb-2022-0007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Gu, Xinhua & Wu, Jie & Guo, Haizhen & Li, Guoqiang, 2018. "Local tourism cycle and external business cycle," Annals of Tourism Research, Elsevier, vol. 73(C), pages 159-170.
    2. Dolnicar, Sara & Lazarevski, Katie & Yanamandram, Venkata, 2013. "Quality of life and tourism: A conceptual framework and novel segmentation base," Journal of Business Research, Elsevier, vol. 66(6), pages 724-729.
    3. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    4. Kay Smith, Melanie & Diekmann, Anya, 2017. "Tourism and wellbeing," Annals of Tourism Research, Elsevier, vol. 66(C), pages 1-13.
    5. Uysal, Muzaffer & Sirgy, M. Joseph & Woo, Eunju & Kim, Hyelin (Lina), 2016. "Quality of life (QOL) and well-being research in tourism," Tourism Management, Elsevier, vol. 53(C), pages 244-261.
    6. Arthur F. Burns & Wesley C. Mitchell, 1946. "Measuring Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number burn46-1, June.
    7. Paresh Kumar Narayan, 2011. "Are shocks to tourism transitory at business cycle horizons?," Applied Economics, Taylor & Francis Journals, vol. 43(16), pages 2071-2077.
    8. Mayers, Sherry-Ann & Jackman, Mahalia, 2011. "Investigating the business cycle properties of tourist flows to Barbados," MPRA Paper 38646, University Library of Munich, Germany.
    9. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    10. Inklaar, Robert & Jong-A-Pin, Richard & de Haan, Jakob, 2008. "Trade and business cycle synchronization in OECD countries--A re-examination," European Economic Review, Elsevier, vol. 52(4), pages 646-666, May.
    11. Egon Smeral, 2014. "Forecasting International Tourism with Due Regard to Asymmetric Income Effects," Tourism Economics, , vol. 20(1), pages 61-72, February.
    12. Swanson, Norman R., 1998. "Money and output viewed through a rolling window," Journal of Monetary Economics, Elsevier, vol. 41(3), pages 455-474, May.
    13. Campos-Soria, Juan A. & Inchausti-Sintes, Federico & Eugenio-Martin, Juan L., 2015. "Understanding tourists' economizing strategies during the global economic crisis," Tourism Management, Elsevier, vol. 48(C), pages 164-173.
    14. Bruno Eeckels & George Filis & Costas Leon, 2012. "Tourism Income and Economic Growth in Greece: Empirical Evidence from Their Cyclical Components," Tourism Economics, , vol. 18(4), pages 817-834, August.
    15. Litterman, Robert B, 1983. "A Random Walk, Markov Model for the Distribution of Time Series," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(2), pages 169-173, April.
    16. Vladimir Arcabic, 2018. "Fiscal convergence and sustainability in the European Union," Public Sector Economics, Institute of Public Finance, vol. 42(4), pages 353-380.
    17. Guizzardi, Andrea & Mazzocchi, Mario, 2010. "Tourism demand for Italy and the business cycle," Tourism Management, Elsevier, vol. 31(3), pages 367-377.
    18. Ulrich Gunter & Egon Smeral, 2016. "The decline of tourism income elasticities in a global context," Tourism Economics, , vol. 22(3), pages 466-483, June.
    19. Campos, Nauro F. & Fidrmuc, Jarko & Korhonen, Iikka, 2019. "Business cycle synchronisation and currency unions: A review of the econometric evidence using meta-analysis," International Review of Financial Analysis, Elsevier, vol. 61(C), pages 274-283.
    20. Pedro M.D.C.B. Gouveia & Paulo M.M. Rodrigues, 2005. "Dating and Synchronizing Tourism Growth Cycles," Tourism Economics, , vol. 11(4), pages 501-515, December.
    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. Robertico Croes & Jorge Ridderstaat, 2017. "The effects of business cycles on tourism demand flows in small island destinations," Tourism Economics, , vol. 23(7), pages 1451-1475, November.
    2. Gu, Xinhua & Wu, Jie & Guo, Haizhen & Li, Guoqiang, 2018. "Local tourism cycle and external business cycle," Annals of Tourism Research, Elsevier, vol. 73(C), pages 159-170.
    3. Chien-Chiang Lee & Godwin O Olasehinde-Williams & Ifedolapo Olabisi Olanipekun, 2022. "GDP volatility implication of tourism volatility in South Africa: A time-varying approach," Tourism Economics, , vol. 28(2), pages 435-450, March.
    4. Vatsa, Puneet, 2020. "Comovement amongst the demand for New Zealand tourism," Annals of Tourism Research, Elsevier, vol. 83(C).
    5. Joe Baldwin & Claire Haven-Tang & Steve Gill & Nigel Morgan & Annette Pritchard, 0. "Using the Perceptual Experience Laboratory (PEL) to simulate tourism environments for hedonic wellbeing," Information Technology & Tourism, Springer, vol. 0, pages 1-23.
    6. Cem Işık & Ercan Sirakaya-Turk & Serdar Ongan, 2020. "Testing the efficacy of the economic policy uncertainty index on tourism demand in USMCA: Theory and evidence," Tourism Economics, , vol. 26(8), pages 1344-1357, December.
    7. Zheng, Jing & Liang, Sai & Ma, Jing & Liu, Guoqiao & Wu, Yirong, 2022. "Can tourism enhance Chinese subjective well-being?," Annals of Tourism Research, Elsevier, vol. 93(C).
    8. Hsu, Pao-Peng, 2017. "Examination of Taiwan's travel and tourism market cycle through a two-period Markov regime-switching model," Tourism Management, Elsevier, vol. 63(C), pages 201-208.
    9. Karel Janda, 2019. "Earnings Stability and Peer Company Selection for Multiple Based Indirect Valuation," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 69(1), pages 37-75, February.
    10. Jakusch, Sven Thorsten, 2017. "On the applicability of maximum likelihood methods: From experimental to financial data," SAFE Working Paper Series 148, Leibniz Institute for Financial Research SAFE, revised 2017.
    11. Zins, Andreas H. & Ponocny, Ivo, 2022. "On the importance of leisure travel for psychosocial wellbeing," Annals of Tourism Research, Elsevier, vol. 93(C).
    12. Miroslav Rončák & Petr Scholz & Ivica Linderová, 2021. "Safety Concerns and Travel Behavior of Generation Z: Case Study from the Czech Republic," Sustainability, MDPI, vol. 13(23), pages 1-17, December.
    13. Changhyun Kim & Yoonseok Zang & Heli Wang & Kate Niu, 2024. "When Do Corporate Good Deeds Become a Burden? The Role of Corporate Social Responsibility Following Negative Events," Journal of Business Ethics, Springer, vol. 192(2), pages 285-306, June.
    14. Efe Can KILINÇ & Cafer Necat BERBEROĞLU, 2019. "The Relationship Between Saving, Profit Rates and Business CyclesAbstract:There are different approaches of economics schools on the sources, causes and determinants of business cycles. These approach," Sosyoekonomi Journal, Sosyoekonomi Society.
    15. Hwang, Sun Ho & Kim, Yun Jung, 2021. "International output synchronization at different frequencies," Economic Modelling, Elsevier, vol. 104(C).
    16. Mary Doidge & Hongli Feng, 2025. "The Role of Anticipated Regret in Farmers’ Land Conversion Decisions," Land, MDPI, vol. 14(2), pages 1-18, February.
    17. Silvia Palasca & Elisabeta Jaba, 2014. "Leading and Lagging Indicators Of the Economic Crisis," Romanian Statistical Review, Romanian Statistical Review, vol. 62(3), pages 31-47, September.
    18. Petr Rozmahel & Ladislava Issever Grochová & Marek Litzman, 2014. "The Effect of Asymmetries in Fiscal Policy Conducts on Business Cycle Correlation in the EU. WWWforEurope Working Paper No. 62," WIFO Studies, WIFO, number 47249.
    19. Nguyen, Ha Trong & Mitrou, Francis, 2025. "Natural disasters and the demand for health insurance," Journal of Environmental Economics and Management, Elsevier, vol. 130(C).
    20. Matthew Rousu & Wallace E. Huffman & Jason F. Shogren & Abebayehu Tegene, 2007. "Effects And Value Of Verifiable Information In A Controversial Market: Evidence From Lab Auctions Of Genetically Modified Food," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 409-432, July.

    More about this item

    Keywords

    business cycles; tourism cycles; coherence; the Great Recession 2008;
    All these keywords.

    JEL classification:

    • Z30 - Other Special Topics - - Tourism Economics - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

    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:vrs:zirebs:v:25:y:2022:i:1:p:95-110:n:1006. 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: Peter Golla (email available below). General contact details of provider: https://www.sciendo.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.