The impact of geopolitical risks on travel and leisure stocks

Sercan Demiralay, Erhan Kilincarslan

Research output: Contribution to journalArticlepeer-review

76 Citations (Scopus)


The impact of geopolitical risks on tourism has not received scholarly attention in the existing literature. Previous studies focus on the effects of terrorism, which is a subset of geopolitical risks. Our paper fills this gap and contributes to the literature by analyzing the vulnerability of four regional Travel and Leisure (T&L) industry stock indices to geopolitical risks. Employing traditional and quantile regression techniques, our results suggest a greater sensitivity of T&L stock returns to geopolitical risks at times the industry performs poor, except for Asia & Pacific index that is the most resilient to geopolitical events. We find that the negative effects of geopolitical risks are mostly driven by the threat of adverse geopolitical events only during period of falling T&L stock prices. However, the realization of adverse geopolitical events significantly influences T&L stocks at all times. The results provide potential insights and implications for investors and tourism stakeholders.
Original languageEnglish
Pages (from-to)460-476
Number of pages17
JournalTourism Management
Early online date1 Jul 2019
Publication statusPublished - 1 Dec 2019


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