The impact of earthquakes on Chile's international tourism demand

Abstract

This paper investigates the impacts of three earthquakes on international tourist arrivals in Chile. The shocks under analysis occurred on 21 April 2007, 14 November 2007 and 27 February 2010, in the north, south and center of Chile, respectively. The impacts are measured as the difference between the predicted and the effectively observed volume of visitor arrivals after the quakes in each Region. The predictions are computed using Seasonal Autoregressive Integrated Moving Average models on monthly visitor arrivals during the period January 2004 to June 2010. The results indicate that the impacts depend on the magnitude of the earthquake, the perception of safety generated by news coverage and the type of tourism characterizing the region where the earthquake has occured. In the case of the most recent earthquake of 27 February 2010, the recovering status of visitors arrivals is studied, showing that the inbound arrivals to some regions have fully recovered from the devastation after 4 months while other regions have not.