The Effect of Crises on the Tourism Industry - Term Paper Example

Tourism Policy Table of Contents Introduction 3 Importance of Tourism 5 Effect on Tourism Industry due to Terrorist Attacks 6 Terrorism in Maldives Tourism Industry 6 Terrorism in US’s Tourism Industry 7 Terrorism in South Africa’s Tourism Industry 8 Terrorism in Kenya’s Tourism Industry 9 Terrorism on Egyptian Tourism Industry 9 Response of Global Tourism Industry 12 Tourism Recovery 14 Breaking Obstruction and Managing Development 17 Conclusion 21 References 22 Introduction “The Global Tourism Industry has experienced many crises and disasters including terrorist attacks, political instability, economic recession, bio security threats and natural disasters” (Ritchie, 2004). In this report the above statement will be critically reviewed and also the way in which the global tourism industry has responded to these events will be analysed. For the purpose of the study affect of terrorist attacks on the tourism industry will be evaluated too. Tourism is a valuable industry for every nation. It not only creates new businesses but also can create jobs, income and can enhance quality of life. For years, tourism industry developed almost fluently and now it has become a chief economic segment. For many countries in the developing world, tourism is a significant basis of income creation and therefore, a key element of economic improvement. A good positive state related to tourism can improve the relationship and it rewards nations. But the consequences of negative conditions such as terrorism are massive on a countries’ financial system. Tourism contributes about 10 percent of global GDP. Tourism industry needs to predict customer requirements, recreate its business strategy, and relocate on providing good services because in recent years customers have become more demanding and a good tourism system can improve the image of the nation. Therefore, the terrorist attacks can play a massively derogatory role in a country’s economy and thus, the tourism sector similar to other sectors can bear the brunt of such scenario (Wharton University of Pennsylvania, 2010). Importance of Tourism Tourism has become a key economic activity in the 20th Century. The World Travel & Tourism Council had generated income of US $ 655 billion from tourism industry in the year 1995 and had created 212 million jobs. Global employment growth was estimated at 21 percent in the year 2007. This increase was primarily due to increase in capital investment and it contributed to 610,000 people globally being engaged to the tourism industry. The employment increase was from complimentary services such as entertainment and restaurants. The result of amplified travelling has led to rise in government income and gross output; it has multiplier consequence on global economies (Dunn, 1999). The following table shows the growth of tourism till 1992: Figure 1: Growth of tourism till 1992 (Thompson, 2008). Effect on Tourism Industry due to Terrorist Attacks Terrorist attack has an adverse affect on the tourism industry. It can lead to joblessness, homelessness, deflation, crime and other economic crisis. Several factors associated with tourism such as airlines, hotels, restaurants and catering sectors that are used by any firm or industry and their employees are all affected to a greater or lesser extent. Terrorism can unravel a country’s tourism industry. It affects directly to the tourists’ decision making. The role of tourism in emerging countries is currently so enormous that some downturn in the tourism sector is a serious concern. In general, tourism is one of the best performing economic sectors in the developing countries and can have various dimensional effects (Essner, 2003). Several such instances of the affect of terrorist attacks on the tourism industry will be evaluated in the following sections. Terrorism in Maldives Tourism Industry Maldives is a developing nation and is depended on their tourism industry as a source of income. Maldives is a holiday destination for the tourists due to its famous heavenly as well as authentic beauty with sea, sand, sun and service. The tourists who visit Maldives are accompanied with strong international wealth and affluent life style. It has been observed that tourism industry is flexible and vulnerable. Terrorist attacks caused threat to Maldives’ tourism industry. The incident of terrorist attacks in 2007 changed the tourism record of the nation. Before that the place was considered safe. The bomb blast in November 2007 at Male Sultan Park as well as Himandhoo Island Mosque brought the country to turmoil and had an adverse affect on the country’s industrial sectors. The main target of such an incident of severe magnitude was to target the tourists of western countries and thus only the tourists were injured and suffered, no Maldivians were affected. As a result, it had created an adverse affect on the society. As a consequence, the society at large got affected and lost its tolerant and modest nature to different notions. Maldives’ tourism industry has been a major target for terrorist attacks. The terrorist attacks are generally seen to target the tourist in a resort or a Cruise Boat as a result the tourists become scared and the brand image of the tourism industry of Maldives faced adverse impacts. Resorts and Cruise Boats are built in an island which can be accessed only by sea and it is totally separated from the general place of Maldives where local people live in. The security force is not much strong there thus it can be easily attacked by the terrorists (Faqs, 2010). Terrorism in US’s Tourism Industry The terrorist attack on September 11, 2001 that took places in the United States had an adverse affect on the global tourism industry. The world’s largest spending tourists are generally from the United States of America. They spent huge amount for travelling. The incident of terrorist attack at World Trade Centre on September 11, 2001 in Washington and New York had threatened the tourism industry and it created havoc in the city. It also had an affect on the earnings from the tourism sector as people became quite reluctant to travel in the US (Global Security, 2011). Terrorism in South Africa’s Tourism Industry The tourism sector in South Africa has suffered greatly due to the past events of the country. The increase in crime and terrorist activities in South Africa has severely affected the tourism sector. The country has become the victims of violence. The tourists for a number of years were reluctant to take a trip to the destinations due to the fear of being the victims of terrorist unrest. South Africa has been shocked by terrorist attacks in the coastal urban area of Cape Town. There is a great effect of country image on a tourist destination. Therefore, such instances of terrorism had reduced the influx of tourists in the country (Stoppard, 2003). Terrorism in Kenya’s Tourism Industry In Kenya, the tourism industry generates revenue of around 500 million dollar per year along with 500,000 jobs and is a significant part of foreign trade income. At present, Kenya’s economic condition is having a set back because of terrorist activities. The bombing at the U.S. Task Force in Nairobi and in a hotel located at a beach in Mombasa, as well as the missile hit against an airplane of Israeli traveller have enforced governments across the world to notify their people that Kenya is insecure for travellers (Essner, 2003). According to WTO (World Tourism Organisation), Mombasa is the main part of sightseeing in Kenya. The terrorist attack discouraged the travelling in Mombasa and thus caused for decline in number of trips by the tourists. The attack led to large unemployment and a negative effect in that area (Essner, 2003). Terrorism on Egyptian Tourism Industry Egypt was a well known tourist destination because of Giza Pyramids and the Aswan Dam. Income from tourism in Egypt went down by 11 percent after ‘al-Gama’a al-Islamiya’ started targeting tourists. The records say, tourism income increased 34 percent in the year 1995. In the year 1997, the generated income from tourism increased by 93 percent. But after 1997 the tourism revenue had started declining when 18 Greek tourists were killed by terrorist. The tourism revenue growth fell by $1.17 billion (Essner, 2003). An initial attack happened in the year 1992 which resulted in loss of 100 German lives. These kind of attacks happened at a stretch for four years. In the year 1996, terrorist attacked a bus where 150 Greek people were waiting, this incident killed 18 people. In 1997, terrorists killed 57 tourists of different nationalities in a temple and similar attack occurred in 2005 in the resort of Sharm al Sheik. These constant attacks caused fluctuation in the number of international tourists between 1992 and 2001. Due to Egypt’s excessive demand the tourism sector increased by 50 percent with a record of 4.3 billion dollar in the year 2000. Because of the terrorist attacks the tourism companies stay away from spending money in the country in provisions of hotel, airport conveniences and flights into the countries because of the risk that they might be attacked. However, the terrorism was not able to completely affect the tourism as it showed a continuous growth in 1999 and was estimated at 3.9 billion dollar and in 2000 was at 4.3 billion dollar (Bennett & Bray, n.d.). Fig 2: Depicts the international tourists receipts in Egypt from 1992 – 2001 (Bennett & Bray, n.d.). Response of Global Tourism Industry The key establishment in the arena of global tourism is the WTO (World Tourism Organisation). It is a global governmental organisation and has 143 members. It is liable for industry advancements and setting global regulations of principles for tourism. It maintains rights for worldwide tourists to ascertain and enjoy the planet’s natural resources, as if they were people of the country they are visiting. GCET (The Global Code of Ethics for Tourism) contributes to common understanding and admiration between people and society, operates as a medium for individual and combined accomplishment and provides as a valuable activity for host countries and societies. WTO makes supplementary outlets which can be used to address terrorism. They publish a report thrice in a year which provides information on worldwide tourism concern. For example, in one such report the major discussion that took place was related to terrorist attacks in Mumbai, Jakarta, Riyadh, and Casablanca. The WTO integrated into the U.N. as a specialised agency. This transformation will increase visibility of the WTO and even greater recognition for their work. This integration will provide WTO considerable opportunities to address most important tourism related issues such as terrorism (Essner, 2003). A number of terrorism events had significant impact on tourism such as terrorist attack of September 11, 2001, the Bali bombings in 2002, train bombing at Madrid in 2003, London terror attacks in 2005. These various events have wielded different impacts in the global tourism market throughout the world. Past trends suggest that certain countries are becoming competent at tackling terrorism events more swiftly than others (Bonham & Et. Al., 2006). International tourism improved sturdily last year following the decrease in revenue brought by recession and financial crisis in the late 2008 and 2009. There was an augment in tourist arrival in all regions. According to the UN World Tourism Organisation, the main reason for this recovery is enhanced financial situations worldwide. This is good for developing countries because they rely on revenues from tourism and it can create jobs to their people as well as expand the business. Asia was the first region to recover the tourists and became the strongest growing region in 2010. According to U. N agency, the global tourist arrivals reached latest record of 204 million in Asia in the year 2010 in contrast to 181 million in the year 2009 (Goodman, 2011). Africa maintained the growth in tourism during 2010 by hosting important global events such as FIFA World Cup. The event attracted new tourists towards Africa and its tourism industry grew by 10 percent in 2010 compared to 6 percent in 2009 (U.N. News Centre, 2011). In recent years, European tourism grew only by 3 percent, because of air traffic disruption caused by volcanic eruption. Western Europe performed well, while Southern and Mediterranean Europe did not fully recover from losses of 2009. Northern Europe also failed to improve in tourism sector. The UNWTO (United Nations World Tourism Organisation) has predicted an increase of almost nearly 5 percent for the year 2011 in tourism industry (The Earth Times, 2011) Tourism Recovery Tourism industry globally experienced a severe setback due to terrorism. But the tourism itself has great power of recovery. The tourism industry has the capability to stand apart with a great deal of strength and energy against the terrorism crisis and eradicate the problems efficiently. Tourism Industry Restoring Ability The tourism industry provides all kind of services for tourist activities. The global tourism industry mainly depends on generating revenue by attracting the tourist from all over the world. Tourist activity is extremely important for this industry and acts as most vital role for getting better. Whether the tourist can formulate their actions easily or not, it becomes the key for the tourism industry’s smooth operation. The convulsive behaviour not only leads to reducing the tourist in tourist destinations, but also at once affects the tourists’ activities in such destinations. Tourism Industry Revival and Upgrading The tourism industry is a service industry. It has a competitive advantage over other industries. Compared with steel, agriculture or building textile industry which need long term reinstallation and upgrading and can also have a damaging affect on the natural environment and resource, tourism sector has the comparative advantage in recovery from any disasters through early disaster restoration. To rebuild and restore the tourism, global tourism industry firstly has the great deal of effect on endorsing and advancing the progress of associated industries. Tourism industry’s complete cooperation has the extent to carry the societies all round development in tourism. Comparative Advantage for Renovating Tourism The tourism industry’s recovery has certain basic advantages. There are a number of exclusive tourism resources which attracts tourists. The tourists’ attraction places have to be highlighted to the public for returning the tourists in the tourist spots. The damage incurred by the terrorism to tourism sector has to be restored globally in order to retain global tourists. According to the present industry structure, the tourism industry always gets precedence. The agricultural or manufacturing industry development has much more restrictive issues than tourism industry. The progress of tourism industry not only optimises industry structure, but also renovates the damaged tourist resources and environmental corrosions. It improves and develops the tourism destination’s ecological functions. Security and Safety Information Tourism industry does not subsist without safety and security. It is a vital part to the tourism industry. The tourism industry’s priority is to reclaim the faith of the global tourists to specify to the world that the calamity has been removed, the terror and hidden dangers are no more present, the tourist destinations are safe and the tourists can travel without any tension. Safety information has vast importance to recover the tourist’s confidence and it eliminates their fear. Tourist Destination’s Accurate Information Clear information of tourism destination makes crucial effect for helping the tourists, tour investors and tour operators. It recovers their buoyancy to tourism industry. Any crisis in tourists’ area can create a negative impact on tourist’s mind and confidence. Rebuilding tourism industry has serious impact on improving investor’s confidence and eliminates the anxiety of the tourists. The tourism industry also communicates the progress of tourism system and strives hard to re-establish itself (Shen & Et. Al., 2009) Breaking Obstruction and Managing Development The travel & tourism industry understands that the 21st century carries new challenges and opportunities not only for its own industry, but also for the mankind for which travel & tourism is such a vital part. Travel and tourism provides employment for a tenth of the world’s residents. It is able to produce not only financial growth, but also endorse community and ecological development. At a time when the world is in front of unique troubles, rising travel and tourism’s ability to bring resolutions has become more significant. WTTC (World Travel and Tourism Council) is open with government around the world for talk with the widest series of agreements for tourism improvement. Travel and tourism creates a positive role to the people. International travel creates additional 840 million yearly advents around the world. Travel and tourism is respected by its host countries and societies. It is helping in putting up country from poverty, quarrel and mystification. It encourages transportation improvement and offer value to natural and global heritage (World Travel & Tourism Council, 2007). The foremost objective for travel and tourism is to maintain responsible and sustainable development. It can be accomplished by sinking inequalities in wealth and prospect, balancing the utilisation of resources and improving international indulgent. Supporting growth also depends on adequate transportation. Travel and tourism industry are harmonising the airports, roads, medical services, water, sanitation with traffic capacity. Thousands of travel and tourism functions are already contributing imaginative responses in order to increase prospect for profit, contentment and development. Tourism industry is pioneering ecological sustainability and creating sole products and services ranging from eco-resorts to large scale recovering. It is operating with customers and inspiring and supporting their efforts. Tourism industry also sponsors educational programs in schools to increase universal responsiveness of tourism. Tourism sectors have strategies and policies in place to ensure that income and other benefits remain significant in the local society. Industry remains to open new schemes for new challenges. Industry is also functioning to conquer restrictions on investment, physical obstructions, and stipulation of services or setting up companies. Tourism industry requires investment and infrastructure to deal with new challenges from terrorism, and it tries to work independently without the help of the government to solve problems. The tourism industry is continuously increasing its efforts and leadership for facing global challenges. Tourism industry is imaginative and inventive. It adjusts quickly to changing conditions and demand. It develops modified services, customised tour, cultural knowledge and experience of rising countries. Several governments comprehend how tourism can optimise private and public sector for more benefits, convert challenges into opportunities. The different proportions of tourism offer wealth of available opportunities for a mutual approach, a joint program and a common assurance. The tourism industry catalyzes a new agreement to deal with the threats and to grab the opportunities. The tourism convenes the ambitions of millions of people who want to travel, meet different cultures and share knowledge. Tourism industry has been at the front of modernisation. It is adjusting its services and yoking the new technologies to bring reliable quality and value for money. But the industry cannot do it alone. The challenges are shared and they want a universal reaction. The WTTC is covering locations, opportunities, employment, transportation, parity, modernisation, safety, mobility, rule and rights. This is the reason why the members come from a number of different countries. The WTTC is passionate to tie mutually its opinion and energy and support to allocating the general task with governments, global authorities and all other stakeholders (World Travel & Tourism Council, 2007). Conclusion Tourism industry is one of the biggest industrial sectors globally. It plays an important role in the economical, social and political development in every country, through creating jobs, income, revenue, and removing poverty. It also has other positive impacts. Tourism is a symbol of peace and exchange of cultural knowledge and sharing of thought among people. On the contrary, terrorism kills people and destroys properties whether personal or natural. It also decreases economic growth, destabilises market and investors confidence and reduces flow of tourists. It puts a negative effect on tourism related services such as hotels, airlines, travelling agencies and other sectors which supply services and goods to tourists. It also leads to various social problems and joblessness. Every nation should cooperate with each other with a global strategy to confront the international threats in order to build a better world free from terrorism and thus create further development and improve the tourism industry. References Bennett, M. & Bray, H., No Date. 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