The Effects of the FED’s Monetary Policy on Tourism & Hospitality Stock Returns: Empirical Evidence from Top Tourist Destinations

Proceedings of The 3rd International Conference on Tourism Management and Hospitality

Year: 2023

DOI:

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The Effects of the FED’s Monetary Policy on Tourism & Hospitality Stock Returns: Empirical Evidence from Top Tourist Destinations

Pınar Barut, Salih Katircioglu

ABSTRACT: 

The present study examines the effects of the United States’ FED monetary policy on stock returns of tourism and hospitality firms from the top ten tourist destination countries as ranked by World Tourism Organization as of 2022, which are publicly listed in stock markets. Quarterly time series data for each firm whose time series periods are heterogeneous are constructed and analyzed using econometric procedures. The autoregressive distributed lag (ARDL) results confirm long-term effects of the FED’s monetary policy changes on tourism and hospitality stock returns in top tourist countries. Results reveal that changes in the FED’s monetary policy generally exhibit positively significant effects on tourism and hospitality stock returns in the selected countries with only a few exceptions like the Chinese firms. Policy implications are provided during the discussion in the study.

keywords: Monetary Policy, Stock Return, FED, Tourism, Hospitality