Local tourism cycle and external business cycle

Xinhua Gu, Jie Wu, Haizhen Guo, Guoqiang Li*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

17 Citations (Scopus)


This paper uses a Markov switching model (MSM) to decompose Macao's tourism cycle into high and low growth states (HGS, LGS) for the period of 2005Q2–2017Q2. The likelihood of the cycle maintaining HGS is 93% but the risk of staying in LGS is 80%. The Macao cycle is favorably asymmetric, with HGS (14.7 quarters) lasting much longer than LGS (5.1 quarters). Further, the paper combines structural regressions with the MSM to identify determinants of the Macao cycle, with useful policy implications derived from the regression results. We find that Macao's tourism cycle is heavily affected by Mainland China's business cycle and other external factors. Additionally, outward-looking marketing, albeit very costly, is found to be effective for keeping the local cycle in HGS.

Original languageEnglish
Pages (from-to)159-170
Number of pages12
JournalAnnals of Tourism Research
Early online date9 Jul 2018
Publication statusPublished - 30 Nov 2018


  • Business cycle
  • Casino hospitality
  • Macao
  • Markov switching model
  • Tourism cycle


Dive into the research topics of 'Local tourism cycle and external business cycle'. Together they form a unique fingerprint.

Cite this