Measuring the Impact of Epidemic Outbreaks on Financial Results.

The aim of the study is to analyze the impact of epidemic outbreaks on financial results on the example of the tourism industry in the world and therefore to emphasize decision-making process under uncertainty in economics. To measure the impact of epidemic outbreaks on financial results on the example of the Tourism Industry we use Hodrick & Prescott (1997), Stock & Watson (1999) and Hamilton (2018) approach on data from 1995 to 2019 (185 countries). The study results indicate that total (registered) direct costs of the epidemic outbreaks from 1980 to 2019 on the world level amounts to -95 billions US$ less in tourism spending and 56 million tourist arrivals drop. Total (potential) opportunity costs of epidemic crisis from 1980 to 2019 measured by the one-side HP filter worldwide equals -83 millions tourist arrivals and -126.7 US$ billions of tourist spending. Summary of our findings on estimates from the one-side (HP) (2009) and Hamilton's filter (2018) declare opportunity costs have an important role in managing tourism demand. In case of practical implications, the effective decision making process in time of COVID-19 demands flexible and innovative growth models, long-term macroeconomic stability, effective epidemic measures, and state subsidies.