Sentiment, mood and outbound tourism demand

Abstract

We investigate spillover effects from sentiment and mood shocks on US outbound tourism demand from 1996 until 2013. We use the Index of Consumer Sentiment and Economic Policy Uncertainty Index as proxies for sentiment and the S&P500 as a proxy for mood. We find a moderate to high interrelationship among sentiment, mood and outbound tourism demand. More importantly, sentiment and mood indicators are net transmitters of spillover shocks to outbound tourism demand. The magnitude of spillover effects sourced by sentiment and mood is time-varying and depends on certain socio-economic and environmental events. Our results have important implications for policymakers and travel agents in their efforts to predict tourism arrivals from key origin countries and to plan their tourism strategy.

Tourism demand analysis: The impact of the economic policy uncertainty on the arrival of Japanese tourists to the USA

“…Our findings for the real exchange rate are similar to the coefficients of the real exchange measures in Culiuc () and Tang (). In addition, our finding for the negative impact of the economic policy uncertainty is also in line with the previous findings of Dragouni et al () and Gozgor and Ongan (). Our results for the economic policy uncertainty somehow relate to the findings by Boukas and Ziakas (), Eugenio‐Martin and Campos‐Soria (), Kim et al (), Ritchie et al (), and Song and Lin () because they observe the negative effects of the global financial crisis of 2008–2009 on the international tourism demand.…”

“…Our findings for the real exchange rate are similar to the coefficients of the real exchange measures in Culiuc (2014) and Tang (2013). In addition, our finding for the negative impact of the economic policy uncertainty is also in line with the previous findings of Dragouni et al (2016) and Gozgor and Ongan (2017 uncertainty. At this stage, the EPU index should be included as an explanatory variable in the international tourism demand models because there is still a gap in the literature for the effects of the EPU on the demand for international tourism.…”

“…At this point, there are only a few studies to use the EPU in the tourism literature. For example, using the data for the period from January 1996 to December 2013, Dragouni, Filis, Gavriilidis, and Santamaria (2016), observe that the EPU in the USA negatively affects the USA outbound tourist departures. Using the data for the period from 1998Q1 to 2015Q4, Gozgor and Ongan (2017) also demonstrate that the EPU in the USA is negatively associated with the domestic tourism spending (direct tourism sales) in the USA.…”

The Effects of Economic Policy Uncertainty on Outbound Travel Expenditures

“…The regressions also introduced relevant control variables. Previous findings imply that the EPU can affect consumer spending behavior (Baker et al, 2016;Dragouni et al, 2016;Giavazzi & McMahon, 2012). For example, Giavazzi & McMahon (2012) show that households in Germany increase their savings (which means a decrease in spending) when economic policy uncertainty increases.…”

“…Based on the importance of tourism and its contributions, it is important to determine the factors affecting tourism demand behavior (Dragouni et al, 2016). Possible determinants of outbound tourism expenditures are analyzed both within a macro framework as well as micro framework.…”