The Effects of Terrorist Attacks on Destination Preferences of Domestic and Foreign Tourists: A Spatial Analysis for Turkey’s NUTS-II Regions

Tourism is one of the most affected sectors in the economy by terrorist attacks that have been increasing dramatically in all over the world. This study aims to investigate the effects of terrorist attacks on domestic and foreign tourism demand in Turkey. In terms of terrorist activities both the frequency degree and severity degree are taken into account as determinants of demand. The empirical analysis covers the time period between 2001-2015 and all 26 NUTS-II regions in Turkey. The model considers the possibility of spatial dependency because of clustering patterns of the tourists’ destination preferences and employs Spatial Error-Fixed Effects Panel Model. Our findings indicate that the severity degree of terrorism has distortion effects on tourism preferences unlike the frequency degree. We also find that though the distorting effects of terrorism are more significant for domestic tourists compared to foreign tourists. The control variables such as income level and exchange rates are found to be more significant determinants for foreign demand rather than domestic demand. Finally, there is strong and positive spatial effects on foreign tourists’ preferences toward Turkey’s tourism destinations