| Abstract: |
The COVID-19 pandemic prompted a collapse in international tourism, severely
impacting the tourism-dependent economies in the Asia & Pacific region. Once
countries start reopening, tourism diversion effects could accelerate the
recovery in countries that establish themselves as more attractive travel
destinations than competitors. We investigate the impact of previous shocks in
tourism competitor countries on visitor inflows, with a particular focus on
tourism-dependent Pacific Island Countries (PICs). We find that PICs were
generally resilient to external shocks and benefitted from diversion effects
for certain types of shocks. For example, the share of departures from
Australia to PICs increased by 12 percent during the SARS outbreak. We then
derive policy implications for the post-COVID-19 revival of inbound tourism to
PICs and lessons for the future. |