Supply Chains and Transportation

How tourism hotspots can bounce back after terrorist attacks

Tiffany Misrahi
Vice-President of Policy, World Travel & Tourism Council (WTTC)

Over the past 15 years, terrorism has been on the rise. There has been a five-fold increase in terror related deaths since 2000. These attacks have plagued the news. From 9/11 to the Madrid bombings, from Tunisia to Kenya, from Beirut to Baghdad to Paris; it is clear that terrorist attacks are very diverse in terms of their location, the impact as well as the perpetrators. The insights generated from these events have enabled policymakers and the industry alike to understand the implications of terrorism.

Below you can see a graph from STR Global and Deloitte illustrating terrorist attacks and in selected locations:

image001

So what does it mean for the travel & tourism industry?

1-      Cancellations come first

Terrorism causes chaos and leads to panic and fear. Indeed, safety is a pre-requisite for the success of the tourism industry, and the mere threat of events can cause tourists to rethink their decision to visit a destination.

The extent of cancellations differs greatly depending on the targeted destinations. For instance, following the attacks on 9/11, the federal government closed airports and cancelled thousands of flights. Even when the airports re-opened, tourists were wary of air travel, and airlines experienced at least a 30% reduction in demand during the initial shock period. In Paris following the Charlie Hebdo attacks, however, the impact on cancellations was minimal.

Following the terrorist attacks on the Bardo Museum in Tunisia in March, the Tourism Ministry reported that there were over 3000 holidays cancellations and reservations tumbled 60%.

2-      The costs are high

In effect, the cost of terrorism includes the property destroyed and the number of cancellations. It also includes indirect costs which may be linked to the diversion of foreign investment, tourism international trade, consumption, savings, unemployment and short term capital flows among others.

Estimating the costs is extremely challenging given the direct and indirect costs, both short and long term, associated to terrorist attacks. Research on the Boston Bombings however tried to estimate the losses, amounting to approximately $438 million. This includes the costs of having a city on “lockdown”, property damages and even indirect medical costs (estimated at $31 million).

3-      Destinations bounce back

The hotel industry is becoming more resilient to shocks from terrorism. In effect, the time that it takes for destinations to recover from these shocks has significantly decreased over the past 15 years.

For instance, occupancy levels in New York hotels took 34 month to recover from 9/11 attacks, and the wider US market took 45 months, with the impact compounded by an economic recession. In comparison, it took Madrid 12 months to recover from the 2003 train bombings and London 9 months from the July 2005 attacks. More recently the Boston Marathon Bombing had a limited impact on hotel occupancies, as did Paris following the Charlie Hebdo shootings.

4-      The need for security protocols

The ability of nations and destinations to bounce back relatively quickly can be partly attributed to the design and implementation of security protocols to respond quickly and efficiently to terrorist attacks. Being proactive, rather than reactive is a key success factor. It is essential for countries to have robust contingency plans, disaster recovery programmes and risk management protocols among others. It is also critical for countries to liaise with other nations in times of crisis, to support, and if required, collaborate on the evacuation of foreign nationals from the targeted areas.

For instance, the recovery efforts following the Bali bombings in 2002 were designed only after the attack took place – which led to a slow and laborious recovery of tourist confidence and revenues. On the other hand, the response to the London Underground bombings in 2005 was quick and decisive, leading to little effects on the tourism industry.

5-      Limiting publicity

Although domestic and regional travellers appear to be less deterred by isolated incidents, international demand is sensitive to the threat level portrayed by the press and travel advisories. Governments and businesses alike should take measures to re-boost the tourism sector once the situation has normalized, focusing on attracting the tourists, changing the perception through media by creating impactful communications campaigns and collaborating to develop strategies to attract new tourists.

On the whole however, it appears that there has been a shift in mentality among consumers and companies over the last 10 years, with the emergence of a “carry on as normal” culture in response to terrorism.

While the road to recovery can be long and arduous, the scale of the economic benefits from tourism makes investing in travel and tourism worthwhile. Indeed, tourism has the potential to drive foreign trade, increase access to international markets; increase foreign investments and spur entrepreneurship in an industry with low barriers to entry and broader economic development given the sector’s strong links with other industries.

Author: Tiffany Misrahi, Community Lead, Aviation & Travel Industries, World Economic Forum.

Image: A private beach at the Portobello Resort, Mangaratiba, March 11, 2014. REUTERS/Ricardo Moraes

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Stay up to date:

Supply Chain and Transport

Share:
The Big Picture
Explore and monitor how Supply Chain and Transport is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

The transport sector is a major source of emissions in Asia. Here are 6 ways to fix that

James Leather and Sudhir Gota

October 22, 2024

Sustainable deliveries: How cities and companies can lead on logistics

About us

Engage with us

  • Sign in
  • Partner with us
  • Become a member
  • Sign up for our press releases
  • Subscribe to our newsletters
  • Contact us

Quick links

Language editions

Privacy Policy & Terms of Service

Sitemap

© 2024 World Economic Forum