Do Shocks to Tourism Receipts Have A Transitory or Persistent Nature? A Comparison of Traditional and Artificial İntelligence-Based Analytical Procedures

Abstract

The goal of this study is to determine whether the effects of shocks to tourism receipts and GDP are transitory or permanent in 10 major tourism destinations (Australia, Germany, Italy, Japan, Mexico, Poland, Portugal, South Korea, Switzerland, and the US) using data from 1995 to 2022. The study initially employs unit root tests that employ a variety of methods for modeling structural breaks, then performs a unit root test that is based on artificial intelligence. According to the results of the artificial intelligence-based unit root test, the effects of shocks to tourism receipts are transitory in Italy, Japan, and Mexico, while the effects of shocks to GDP are temporary in Australia, Poland, and Switzerland. The study provides policy recommendations for the tourism and hospitality sector and GDP in countries where the impacts of shocks are enduring.