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This article examines the economic impact of tourism in and around China's Zhangjiajie City, a destination known for its protected areas and natural beauty. It is a rather unique case in that it is a natural attraction in the developing world that attracts predominately domestic tourists. Based on the analysis of published governmental statistical data, this study concludes that tourism has accelerated the economic development of the region, transformed the industrial base of the region, and that tourism is gradually emerging as the dominant economic sector. It concludes by discussing future threats to Zhangjiajie's tourism-centric economy.

As international tourism is an industry that is easily impacted by external shocks, there is always structural mutation of the time series related with it, which causes the existence of outliers. Those outliers will have an impact on analyses based on such data. Using quarterly data from 1994 to 2006, this paper detects outliers in the time series of international tourists to China and finds that the number of international tourists during the second and the third quarters of 2003 are outliers of the time series. To eliminate the impact of outliers, the paper uses the SARIMA model to forecast the values of outliers. By replacing the original value with the forecasted values, the authors conduct a co-integration analysis with the new time series and the corresponding quarterly gross domestic product (GDP) data. The results show that research conducted without considering outliers overestimates the effect of international tourism on economic growth.

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