Economic Impact of the 2015 MERS Outbreak on the Republic of Korea's Tourism-Related Industries

The 2015 Middle East respiratory syndrome (MERS) outbreak in the Republic of Korea (ROK) is an example of an infectious disease outbreak initiated by international travelers to a high-income country. This study was conducted to determine the economic impact of the MERS outbreak on the tourism and travel-related service sectors, including accommodation, food and beverage, and transportation, in the ROK. We projected monthly numbers of noncitizen arrivals and indices of services for 3 travel-related service sectors during and after the MERS outbreak (June 2015 to June 2016) using seasonal autoregressive integrated moving average models. Tourism losses were estimated by multiplying the monthly differences between projected and actual numbers of noncitizen arrivals by average tourism expenditure per capita. Estimated tourism losses were allocated to travel-related service sectors to understand the distribution of losses across service sectors. The MERS outbreak was correlated with a reduction of 2.1 million noncitizen visitors corresponding with US$2.6 billion in tourism loss for the ROK. Estimated losses in the accommodation, food and beverage service, and transportation sectors associated with the decrease of noncitizen visitors were US$542 million, US$359 million, and US$106 million, respectively. The losses were demonstrated by lower than expected indices of services for the accommodation and food and beverage service sectors in June and July 2015 and for the transportation sector in June 2015. The results support previous findings that public health emergencies due to traveler-associated outbreaks of infectious diseases can cause significant losses to the broader economies of affected countries.