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

Abstract

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.

Keywords: Economic burden of disease; Economic impact; Middle East respiratory syndrome; Outbreak; Tourism; Travel industry.

Figure 1:

Actual monthly arrivals of non-citizen visitors in the Republic of Korea (January 2013–June 2016) and projected monthly arrivals during and after the 2015 Middle East respiratory syndrome (MERS) outbreak (June 2015–June 2016) Notes: The thin solid line with filled circle markers shows the actual numbers of non-citizen arrivals while the thick solid line is the projected numbers of non-citizen arrivals during and after the MERS outbreak period in the absence of the outbreak. The dotted line shows the 95% confidence interval of projected values. The shaded gray area indicates the period between the confirmation of the first MERS case in the Republic of Korea and the World Health Organization’s declaration of the end of the outbreak.

Figure 2:

Actual monthly index of services of the accommodation sector in the Republic of Korea (Year 2010=100.0, January 2013–June 2016) and projected index of services during and after the 2015 Middle East respiratory syndrome (MERS) outbreak (June 2015–June 2016) Notes: The thin solid line with filled circle markers shows the actual index of services while the thick solid line is the projected index of services during and after the MERS outbreak period in the absence of the outbreak. The dotted line shows the 95% confidence interval of the projected index values. The shaded gray area indicates the period between the confirmation of the first MERS case in the Republic of Korea and the World Health Organization’s declaration of the end of the outbreak.

Figure 3:

Actual monthly index of services of the food and beverage service in the Republic of Korea (Year 2010=100.0, January 2013–June 2016) and projected index of services during and after the 2015 Middle East respiratory syndrome (MERS) outbreak (June 2015–June 2016) Notes: The thin solid line with filled circle markers shows the actual index of services while the thick solid line is the projected index of services during and after the MERS outbreak period in the absence of the outbreak. The dotted line shows 95% confidence interval of the projected index values. The shaded gray area indicates the period between the confirmation of the first MERS case in the Republic of Korea and the World Health Organization’s declaration of the end of the outbreak.

Figure 4:

Actual monthly index of services of the transportation sector in the Republic of Korea (Year 2010=100.0, January 2013–June 2016) and projected index of services during and after the 2015 Middle East respiratory syndrome (MERS) outbreak (June 2015–June 2016) Notes: The thin solid line with filled circle markers shows the actual index of services while the thick solid line is the projected index of services during and after the MERS outbreak period in the absence of the outbreak. The dotted line shows 95% confidence interval of the projected index values. The shaded gray area indicates the period between the confirmation of the first MERS case in the Republic of Korea and the World Health Organization’s declaration of the end of the outbreak.