THE IMPACT OF VIOLENT CRIME ON TOURIST ARRIVALS IN MALAYSIA

The tourism industry plays an important role in boosting economic growth, providing job opportunities, and reducing the poverty rates in many countries. For this reason, the factors influencing tourism should be investigated, to ensure continued growth within the industry. Few studies had examined the effect of violent crime on tourist arrivals and price competitiveness in Malaysia. An increasing criminal activity and a rise in prices may discourage tourism arrivals. This paper applies an autoregressive distributed lag (ARDL) model to estimate Malaysia's determinants of tourism arrivals, on the period from 1986 to 2016. Tourism demand is modeled as a function of economic growth, tourism accommodation, prices (proxied by exchange rates and inflation), unemployment, and the crime index to proxy criminal activity in Malaysia. The results showed that inflation can reduce the number of tourists in the long run and in the short run. Similarly, the results also show that a higher exchange rate and violent crime index can reduce the number of tourists visiting Malaysia in the short run. Economic growth can attract more tourists to Malaysia in the long run.These findings are important for the formulation and implementation of policies. The Malaysian government should combat violent crime in the first place to prevent any reduction in tourist arrivals. Increasing government expenditure on national security could lead to a reduction in the violent crime index, thus increasing the number of tourist arrivals in Malaysia