The Resilience of Caribbean Tourism to External Shocks

As with most industries, tourism is susceptible to external shocks from time to time. A study employed by Browne, Edwards and Moore (2009) suggests that shocks to the Caribbean tourist industry tend to have temporary rather than permanent effects, implying that Caribbean tourism is fairly resilient to these negative influences. This paper further investigates specific shocks, namely GDP and oil prices to test the above hypothesis. The study employs a multivariate GARCH model and utilizes monthly tourism data from 1977 to 2009 for 8 Caribbean countries.