LAUSR

Abstract This study examines the negative impacts of economic crises and disasters caused by weather or diseases on inbound tourists. We use two well-known tourist cities, Macao and Hong Kong, to highlight the importance of economic variables in attracting tourists, and the significant decreases in tourists when economic crises and disaster hit. Our results show that ignoring the impacts of crises will bias the statistical estimates. Using a simple dummy variable method, we illustrate that the test results can change from insignificant to significant statistically. We find that different types of crises will have different degree of negative impacts on tourism industry which are important for policy makers and the tourism industry in crisis management and in overcoming the difficulties in attracting more tourists under very unfavorable conditions.