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International Tourism, Terrorism and Recession

International tourism in relation to terrorism and world economic recession

Since time in memorial, people have traveled beyond their borders for various reasons such as military expeditions, trade and even discovery. It was through such travel that people became conscious of the endless possibilities that lie beyond their boundaries that they knew not about. However, the genesis of modern tourism has been traced back to the 1800’s during which time the Grand Tour occurred in England. When the young nobles became of age at time, they were sent off to Europe to learn mannerisms and skills that would propel them into becoming respected statesmen in the future. The Grand Tour led to an emergence of “Romantic tourism” as those sent to Europe fell in love with the landscapes the foreign lands offered. More people were lured into the idea of traveling and eventually, mass tourism came into being when Thomas Cook launched travel agency that offered tourist services such as site seeing. From that time, tourism has evolved and grown tremendously to the kind of industry it is today.

Essner defines tourism as “a service based industry comprised of several elements including transportation, accommodation, food and beverages, tours and merchandising” According to World Trade Organization, tourism is the fifth largest global industry ranked after fossil fuels trade, telecommunications, and agriculture among others. The tourism sector is said to be the biggest commercial service provider offering a diverse array of services in restaurant, hotel, tour operating and gift shops. The World Travel and Tourism Council has forecasted that by the year 2020, approximately two hundred and seventy five million individuals will have been employed in the travel and tourism sector. According to United Nations World Tourism Organization, the international tourist arrivals in 2011 were 980 million and this was a 4% growth from the previous year.  It also predicts a 3% to 4% increase in international arrivals in the year 2012. In 2010, the revenue generated by international tourism in export earnings amounted 919 billion dollars.

Tourism is greatly depended upon by many developing nations as the major foreign exchange earner and the also a foreign direct investment.

Even with the current statistics reflecting positively on international tourism, there lie numerous threats which are impacting negatively on this multi-billion industry. This paper will be looking at terrorism and economic recession which have trended recently as key international tourism concerns and how they have impacted on international tourism.

Terrorism and International Tourism

There is a link between international tourism and terrorism. Terrorism has its roots from ideological differences which are mostly politically based. Alsarayreh, Jawabreh & Helalat stated that tourism is key aspect of international politics and added that some countries use it as a pressure mechanism against another country they are differing with in order to attain various political agendas. Other individuals however, have resorted to terror attacks as a means of settling scores as a result of ideological differences politically or religiously. These authors argue that since international tourism is inseparable from international relations being formed, it can then not be separated from politics because of the foreign diplomacy ties. When a country admits foreign visitors within its boundaries and takes responsibility over their safety, it is engaging in a political action even though tourism is an economic process. Local politics and policies with regards to tourism are also influenced whereby; good political relationships will encourage movement of people across the boundaries of the nations involved and vice versa.

Impact of terrorism on international tourism

In their study done across the six continents, results of their study revealed that terrorism indeed has a negative impact on international tourism as it was experienced after the September 11th attack in America.  This attack is by far the one that has had the most adverse impact on the tourism and travel industry. Four American airlines were hijacked in a series of coordinated attacks by the Al Qaeda terrorist group and crashed into major buildings most notably the World Business Trade Center comprising of the twin towers and the Pentagon leading to the death of approximately 2200 innocent civilians. This single event led to an overall worldwide decline economically but the tourism sector suffered even greater. Many people lost their jobs as a result in other service industries that complement tourism such as airlines and hospitality sectors. This attack had such a drastic impact on people who acquired a strong fear for flying or traveling that there was a 4 million drop in international arrivals that year. The tourist receipts in America in the year 2000 were 130.8 billion dollars which dropped to 119.8 and 113.5 in 2001 and 2002 respectively. In 2003 and the years after however, both the American and worldwide numbers saw a significant increase. Ahmed, Nawaz & Qazi affirm that terrorist activities have continuously troubled the tourism industry for the past one decade since the occurrence of the 9/11 attack.

Kenya has had its fair share of tourism mishaps as a result of terror attacks. Tourism is Kenya’s second largest foreign exchange earner responsible for 12% of the GDP.  According to Lovgren tourism is said to earn Kenya approximately 500 million dollars annually in revenue. The terrorist attacks of the US embassy in 1998 and the Mombasa Paradise Lodge in 2002 led to a decline in tourism activities in the country. The travel advisory issued by British government in 2003 made the situation worse because the country was just recovering from the effects of the previous attacks. This led to a downfall in revenue got through tourism as hotel and other service providers suffered losses. It is estimated that the amount of money lost during this period as a result of the travel advisory totaled to 1 million dollars a day.

Egypt, one of the largest tourist destinations is not new to terrorist attacks some of which are directly focused on tourists visiting the country. According to African Safari Information, Egypt is ranked first in Africa recording the highest number of tourist arrivals. Egypt is home to one third of the world’s historic monuments that attract high tourist traffic. Such monuments include the pyramids of Giza amongst which the Great pyramid of Khufu features. This particular pyramid is notable as one of the Seven Wonders of the World and is said to have been built purposefully to act as a tomb for the royal kinsmen. The Sphinx of Giza, known to feature among one of the world’s largest statutes is also a monument worth noting. The Valley of the Kings not only acts as a tourist attraction site, but an archeological site as well. This is where noble men were buried after the pyramid method was marred by tomb raiders. These are just but a few of the magnificent tourist attraction sites in Egypt.

Historically however since the year 1992, political instability and terrorist attacks have come to disrupt tourist activities in the country. The first tourist to ever lose their life was a British woman during a bus raid by militants who also injured two British men on November 12th 1992. This kind of tourist attack has continued over the years causing adverse effects to the tourism industry which has continued to suffer great losses. Millions of revenue generated through tourism has been lost as a result because of travel advisories that have been issued based on the insecurity levels in Egypt which are ever heightening.

Impacts of recession on tourism

Recession is generally a period of economic decline. It occurs when there is a drop in the Gross domestic product followed by a fall in stock market, skyrocketing unemployment and house repossessions. The last event is usually brought about by a drop in the housing market and the inability of the people to pay for their mortgages and loans leading to foreclosure of their properties. A recession which drags out with severe consequences is referred to as a depression. Global economies have recently suffered from a recession and at one point U.S suffered a depression which led them to review the law to prevent it from happening again. In later years these laws were repealed and unscrupulous members of the finance sector took advantage of this to make personal and individual gains.  Globalization led to the spread of the recent recession from U.S to Europe and in-turn this spread to Asia and Africa. All these economies are tied together and thus a slump in one puts all the others at risk of destruction.

Tourism which makes up a huge part of the global economy was obviously heavily affected by the recession.

 Ways the global recession is affecting tourism
The restaurant business has become more populated during the recession period, fast food chains and the casual dining ends have been doing better than the middle market dining restaurants during the recession period. This is attributed to the fact that the people who frequented these joints mostly the middle class have become more cautious with how they spend their money and are more likely to eat at home to cut on the “unnecessary” spending. The low income earners are still willing to get dine at the fast food joints since there is no much difference in prices, on the other hand the wealthy who are mostly recession proof will still afford to dine out. In the high end dining spots there is a clear distinction between some of the joints with some being able to maintain their wealthy clients while others have resorted to price drops, heavy advertising and offers to maintain their clientele as a survival strategy. In Europe most of the restaurants that made their incomes mostly from corporate and tourist dining have suffered the extremes of the recession period. This is because most of these restaurants had the “highly expensive” tag among the locals so with reduction of tourists coming in and the corporate being careful on where they entertain themselves, these restaurants have had to contend with losses and reduced profits with the hope to outlive the global recession.

In the airline sector, air transport service providers faced a significant reduction in passenger volume and also significant drop on returns. Very few people are willing to travel for tourism purposes this is because most of them are suffering from budget cuts, unstable employment because of cut backs and the increased prices in air fare. Even though some airlines have tried to give discounts they haven’t been able to keep the normal prices and they have had to increase these to meet the operation costs. The GDP change rate coupled with the GDP per capita are still the main determinants of basic traffic growth for the air transport industry, which is now on the third phase of decline which began in late 2007 with the sharp rise in the international oil price. However through to the mid 2008 airlines would still recover a substantial part of these costs, since demand for air travel and tourism were still high. In early 2009, the situation got worse and there was a drastic drop in tourism activities leading to airlines cutting back on fare and staff to ensure survival of their companies during the recession period.  Airlines in the Gulf between Europe and Asia had to reduce their fares by approximately 50% particularly for business class.

According to UNWTO World Tourism Barometer in June 2009, International tourist visits increased by 1.9% in 2008 but this trend deteriorated during that year and as expected tourist visits fell by 8% in the first quarter of 2009. Negative growth of around 2-3% in international tourist visits was realized in that year. A further 4-6% decrease is expected for the full year (2009) due to change in the economic predictions.  The World Travel and Tourism Council stated that the tourism industry slowed down by 1.0% with regards to GDP. This was its poorest performance since 2003. Travel and tourism was expected to contract further by 3.5% in the year 2009.  For 2010 it was forecasted that tourism imports would stagnate and persistent decline would be realized all-over the world with Africa as the only exception since all the other tourist areas will suffer a reduction in tourist volumes in that year. The highest shock was recorded in Europe –10%, in the first quarter. The Americas felt the impact mostly because of the slowdown in the United States and the Caribbean states –5%, in the first quarter, while the drop in demand for tourism in Asia and the Pacific has been more sudden than expected with –6% recorded in the first quarter.

References

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