Impact of terrorist attacks on tourist arrivals: Evidence from Sri Lanka
Priyanga Dunusinghe and BMPK Beligahawaththa
Sri Lanka is a one of the leading tourist destinations in the world. The successive governments took various policy measures to develop the tourism industry despite the facing a 30-year long civil war. The end of the war in 2009 was seen as an opportunity to unleash the potential of the sector. Nevertheless, the Easter Sunday terrorist attack casts doubt on to what extent Sri Lanka will be able to make use of the sector for her socio-economic development. In the context of the above attack, this study expect to examine the impact of terrorist attacks on the tourism industry. The study make use of secondary data extracted from national statistical agencies. Our findings clearly indicate that tourism industry suffered a lot following terrorist attacks. It was found that tourist arrivals and tourism receipt were lower by around 20 per cent in a year which witnessed terrorist attacks compared to a normal year. Similarly, in the short-run, employment in the industry declined by around 11 per cent following a major terrorist attack on civilian target. The findings suggest that it is high time to enhance the capacities for the security establishments to minimize the risks pose by various terrorist organizations.