Does air pollution decrease inbound tourist arrivals? The case of Beijing

Tourism industry might be affected by pollution, discouraging current tourism and damaging destination's image, which compromises future arrivals. This paper quantifies the impact of air pollution on inbound tourism analyzing the case of Beijing city, China. Applying a standard tourism demand function, short-run and long-run impacts are explored in a VECM framework. Results show that air pollution had negative effects on tourist arrivals in the long-run, but not in the short-run. Also, there is a long-run causal relation between air pollution and inbound arrivals from most source countries, while air pollution does not Granger-cause a short-run tourist arrivals decrease.