How resilient is La Réunion in terms of international tourism attractiveness: an assessment from unit root tests with structural breaks from 1981-2015

Abstract

Even if local policymakers increasingly claim that tourism is one of the key factors of future economic development for the French small island La Réunion, international tourist arrivals are observed to be locked in a stagnation phase since the beginning of the 2000s. Starting from this stylised fact, this article aims to study if this phenomenon results from major external events hurting this economy regularly. Next, by using univariate unit root procedures with structural breaks, we test for evidence of permanent or transitory effects of external shocks on international tourist inflows (total, by source markets, and by category) over the period 1981-2015. Finally, the empirical analysis allow us to reject the null of a unit root. Then, stagnation of tourism arrivals to La Réunion is not due to exogenous shocks but probably results from endogenous impediments within the domestic tourism industry and unsuitable public policies.

Is international tourism responsible for the outbreak of the COVID-19 pandemic? A cross-country analysis with a special focus on small islands

“…However, according to our proposal, on the contrary, these economies could be more exposed to and more impacted by such health crises through tourist flows than any other territories in the world. This finding cast doubts on the sustainability of tourism specialization in the medium and long run for small islands in a global context of recurrent health shocks, validating the “tourism-led vulnerability hypothesis” (Charles et al, 2019 ).…”

“…However, its positive effect on the long-run is not so evident. Conversely, a recent strand of the literature in tourism economics promotes the “tourism-led vulnerability hypothesis” (Goavec and Hoarau, 2015 ; Charles et al, 2019 ). Tourism specialization is expected to make a country dramatically prone to adverse exogenous shocks resulting in high economic instability and structural vulnerability.…”

A double life cycle in tourism arrivals to Spain: Unit root tests with gradual change analysis

“…The traditional approach to looking at the degree of persistence of a time series is to apply unit root tests. These tests have been widely used in empirical tourism literature to determine the transitory or permanent effects of economic crises or other types of shocks on tourism ( Charles et al, 2019 ; Lean & Smyth, 2009 ; Narayan, 2005a , 2005b ; Perles et al, 2016 , among others), and to examine the convergence hypothesis for tourism markets ( Lean & Smyth, 2008 ; Narayan, 2006 ; Tang, 2011 ). However, to the best of the authors’ knowledge, they have never been applied to test the validity of the TALC theory.…”

“…The ability to capture smooth transitions in economic variables makes unit root tests with gradual change very suitable tools to test persistence in tourism time series. The unit root tests that have usually been applied to tourism series, however, only take into account instantaneous structural changes ( Charles et al, 2019 ; Lean & Smyth, 2009 ; Narayan, 2005a , 2005b ; Perles et al, 2016 among others), which do not allow S-shaped trends, as the TALC theory defends.…”

Les îles touristiques à la merci du changement climatique : une évaluation par un indice synthétique de vulnérabilité physique

“…(Charles et al, 2019). Il apparaît comme un déterminant crucial de l'attractivité touristique des territoires à travers la constitution du capital naturel à la base de leur avantage comparatif mais également en tant qu'élément constitutif de leur capacité de charge(Butler, 2011).…”