High regional economic activity repels domestic tourism during summer of pandemic

Abstract

This study investigates empirically how the regional economic activity, measured as the agglomeration of establishments, affects domestic travel and tourism flows during the COVID-19 summer of 2020. Domestic tourism flows are approximated by the number of overnight stays in all 96 French regions. Results from spatial estimations reveal that lower economic activity attracts more domestic tourists. This relationship becomes inflated if the neighbouring areas are characterized by equally sparse economic activity. In July and August 2020, regions with a 10% lower density of establishments (combined effect of within the same region and surrounding regions) have a between one and two percentage points higher growth rate in domestic overnight stays than others. The share of second homes is also significantly and positively related to domestic tourism. Coastal regions and regions surrounded by national parks have a larger growth in domestic overnight stays in August 2020 (by 15 and 24 percentage points, respectively). The counterfactual estimations based on data for the years prior to the pandemic (2017–2019) reveal that regions with a high establishment density are growing in domestic tourism. The other local characteristics investigated are either insignificant (direct effects) or have the opposite sign (spillover effects).