An Analysis of Tourist Spending by International Visitors to the United States during the COVID-19 Pandemic

Abstract

The COVID-19 pandemic disproportionately affected sectors that require international travel. One of these is the tourism sector. This study examined the impact of the pandemic on the spending patterns of international tourists in the United States. Using a vector autoregressive (VAR) framework, the study explored the influences of COVID cases and deaths on the number of international visitors in the United States. Exogenous variables in the VAR model are tourists' expenditure, GDP, and the total population of tourists' countries of residence. The lag order selected by Akaike and Schwarz information criteria was 2. The findings revealed that immediate past values of COVID cases and deaths determined their current figures as well as the count of international tourists in the U.S. Furthermore, tourists' expenditure, as well as GDP and population of tourists' countries, influenced the propensities of international tourists to select the U.S. as their destination. However, tourists' spending was not found a significant determinant of COVID cases and deaths, suggesting that coronavirus did not respect the spending abilities of the tourists. The study concluded that the U.S. authorities should be prepared for more inflow of visitors from countries with high GDP and high populations and should be cautious of high spending patterns of visitors as this may add to the existing inflationary pressures in the country.