The Asian Tsunami and Tourism Industry: Impact and Recovery

This chapter examines the impact of the 2004 Asian tsunami, one of the most destructive and deadliest natural disasters in recent history, on international tourist arrivals (TA) and gross domestic product (GDP) in five severely affected countries: Maldives, Thailand, Sri Lanka, Indonesia, and India. An autoregressive distributed lag model was used to examine the causal relationship between tourism and GDP. The TA and GDP for the posttsunami period (2005-09) were forecasted using Box-Jenkins autoregressive integrated moving average method. The forecasted values were compared with the actual out-of-sample values to identify the impact of the tsunami on TA and GDP. The results indicated that in all five countries, tourism contributes to GDP. Although all countries experienced a sudden decline in TA immediately after the tsunami, the impact of the tsunami on long-term TA and GDP showed mixed results. Out of all five countries, Maldives demonstrated the highest adverse impact of the tsunami disaster on the tourism industry and GDP, while India showed the lowest impact.