ECONOMIC IMPACTS OF VISA RESTRICTIONS ON TOURISM: A CASE OF TWO EVENTS IN CHINA

• The economic impacts of one-off events and visa restrictions are assessed.
• An innovative approach that combines econometric and CGE models is used.
• The economic losses caused by two events are presented.
• The economic losses brought by visa restrictions during the 2008 Olympics are evaluated.
• Policy suggestions are given to limit the economic risk caused by visa restrictions.

Increasing attention has been paid to evaluate the impacts of large scale events on tourism demand. For providing policy suggestions, it should consider the economic impact of both events themselves and other factors. This paper evaluates the economic effects of visa restrictions on tourism as a result of the 1989 Tian’an Men Square Incident and the 2008 Beijing Olympic Games by using an innovative combination of econometric and computable general equilibrium (CGE) models. The results show that both events generated economic losses. The unexpected negative economic impact of the Beijing Olympics seems attributable to visa restrictions. Suggestions for the alleviation of the negative impact of visa regulations are provided.