Interdependency and spatial spillovers of tourism demand in Asia: a Hong Kong economic policy perspective

This project aims to develop a state-of-the-art spatial econometric method which pools all destinations in Asia to measure direct, indirect and total spillover effects across destinations. As a methodological advancement, the global vector autoregressive model will be integrated into the spatial model to further generate direct and indirect effects in response to shocks to certain destinations through impulse response analysis. Impulse response analysis will be conducted for policy simulations in the post-Covid era specifically to examine how potential economic shocks in the post-Covid era will affect the whole system and Hong Kong in particular.

The findings will provide important policy implications for relevant policymakers and the tourism industry in Hong Kong to respond effectively to possible fluctuations in economic situations in neighbouring destinations. This will allow Hong Kong’s tourism industry to recover from the pandemic more efficiently, maintain its regional competitive advantage and sustain its long-term healthy development and continuous contributions to Hong Kong’s economy.