Title: Business cycles and tourism activity: the case of Portugal

Authors: António Portugal Duarte; Inês Veloso Garcia; Fátima Sol Murta

Addresses: CeBER, Faculty of Economics, Univ Coimbra, Av Dias da Silva 165, 3004-512 Coimbra, Portugal ' Faculty of Economics, Univ Coimbra, Av Dias da Silva 165, 3004-512 Coimbra, Portugal ' CeBER, Faculty of Economics, Univ Coimbra, Av Dias da Silva 165, 3004-512 Coimbra, Portugal

Abstract: This paper analyses the synchronisation of business cycles with tourism activity in Portugal from 1990 to 2021. The importance of the tourism sector in Portugal and its enormous contribution to the country's economic growth is an acknowledged fact. To better understand the business cycle and the corresponding stage of evolution of the tourism activity, we use the Hodrick-Prescott filter to break down the GDP into its cyclical and trend components. The same procedure is applied to four indicators associated with the tourism activity: the number of overnight stays in tourism accommodations, the income from the tourism activity, the revenue per bedroom and the population employed in the sector. The results suggest the existence of a relatively strong synchronisation between the business cycle and tourism activity in Portugal, the expansion (recession) phases of the Portuguese economy showing alignment with a more (less) favourable evolution in tourism activity in Portugal.

Keywords: business cycle; economic growth; Hodrick-Prescott filter; synchronisation; tourism activity; sun, sea and sand; Dutch disease; correlation; nights spent; employment; COVID-19; Portugal.

DOI: 10.1504/IJSEM.2024.138339

International Journal of Services, Economics and Management, 2024 Vol.15 No.3, pp.273 - 289

Received: 12 Apr 2022
Accepted: 04 Mar 2023
Published online: 01 May 2024 *

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