Week 4 - SHOCKS AND THREATS TO THE TOURISM INDUSTRY

 External shock and tourism: real and media impact in the last two decades the tourism sector has faced
numerous crises and external shocks such as terrorist attacks, natural disasters, political instability, economic
recession and uncontrolled migration. The effects of these events are almost immediate, with a negative impact
on the flow and image of both the damaged destinations and often of the adjacent ones. These events and their
resonance are the major challenges for destinations and tourism organizations that should first try to survive and
then retrieve attractiveness and competitiveness. The paper aims to identify and suggest an approach to
external shocks that conceptualizes the inclusion in the process of development of destinations, increasing its
capacity for absorption and management. For this purpose, we analyzed two cases of natural disasters
(earthquake in Assisi occurred in 1997 and the tsunami in Thailand in 2004 for a period of respectively 10 and 15
years) and the role of media in the relationship between tourism and terrorism. The analysis was developed
according to the guidelines of the duration and extent of the effects, measured through objective dimensions
(flows) and processes (communication and media). The results allowed us to trace the directions through which
the relationship between external shocks and tourism evolves in the recovery ability of the destination. We
identified the two essential conditions for the development of the absorption process. The first is the need for a
plan of management of the effects of disasters, including a direct integrated communication plan to all
stakeholders (tourists, operators and residents). The second one is the need to include the management of
external shocks in plans for the development of destinations, transforming it from extraordinary management in
response to disasters or crisis occurred to ordinary and constant attention in order to communicate and ensure
safety, thus reducing the post-event negative media impact and recovery time.
 Tourism is a powerful tool for development. It represents 10 percent of the world’s gross domestic product (GDP)
and provides 10 percent of jobs globally. The sector is also interlinked with every other sector in the economy. Its
ability to operate in various locations and the wide range of opportunities it offers, including at the entry level,
means that it has the ability to help bridge and minimize development and income gaps.
 In Southeast Asia, the first quarter of 2018 saw a 9.4 percent increase in tourist arrivals – the largest number
recorded amongst all regions – exceeding the already robust six percent average growth for global tourism
during the same period. The region’s unique and diverse travel offerings are forecast to bring in US$222.8 billion
in 2027 or 5.3 percent of the region’s total gross domestic product (GDP). Yet growth in the tourism sector is
under threat. The region’s governments and industry players are working to identify key risks that are threatening
the robustness and resilience of the sector. As the prime motivation for visitors to come to the region hinges on
local landscapes, biodiversity, heritage and cultures, the sector’s survival depends on the ability to retain and
preserve as much of these as possible while at the same time adapting to the changing social, environmental
and climatic.
 A successful tourism initiative without checks can also make the sector it is own worst enemy. This is seen in the
case of the Philippines ’ Boracay, Thailand’s Maya Bay and also many other destinations in the region. How
tourism can usually negatively impact a destination is through over-tourism and overcrowding – when the
number of visitors exceeds a locality’s ability to cope.
 The Malaysian National Academy of Arts, Culture and Heritage’s Chairman, Dr. Ong Hong Peng, cited the
example of Malaysia’s Sipadan Island in the early 2000 period. Following deterioration of quality of coral reef and
marine life due to over-tourism, Malaysia took the bold step of relocating all onsite buildings and businesses out
 of Sipadan Island. Sustainable management practices were implemented and a daily quota of 120 divers were
imposed to reduce pressure on the environment.
 “These measures contributed to the improvement of the quality and diversity of marine life and ecosystem, which
in turn ensured the sustainability of Sipadan Island. It continues to be ranked top ten best dive sites in the world.
These timely interventions enabled the reaping long-term economic and social benefits in a sustainable manner,”
he spoke at the United Nations World Tourism Organization (UNWTO), Asia Pacific Executive Training Program
on Tourism Policy and Strategy.

POLLUTION, CLIMATE AND OTHER THREATS

 Pollution is a significant threat to both inland and coastal destinations, with single-use plastic being a
bourgeoning hazard. The threat is especially large in ASEAN, where half of its member states are among the top
10 countries ranked by a mass of mismanaged plastic waste.
 According to professor in Tourism Planning at the Malaysia’s University of Technology, Prof Dr Amran Hamzah,
lack of proper sewage treatment and improper solid waste disposal are also threatening key marine destinations.
“Environmental degradation has reached alarming levels in many tourism islands in the Southeast Asian region.
Lack of proper sewage treatment, improper solid waste disposal, irresponsible tourist behavior, and the dumping
of plastic are diminishing marine resources that are vital in supporting tourism activities such as scuba diving,”
he said.
 On top of these human-driven threats, the tourism sector is also threatened by climate change which also acts
as a multiplier of existing risks. Climate risk and adaptation specialist Dr Sarah Opitz-Stapleton said that rising
sea temperature is bringing about irreversible loss of coral ecosystems, tropical fish, as well as coral bleaching
and mass die-off. “Poorly managed the conversion of beaches and destruction of mangroves for resorts further
damage the health and functions of coastal ecosystems, which is important for coastal resilience. Not only are
these activities unsightly to tourists, but they also pose significant health and livelihood risks to coastal
communities across Southeast Asia that would host the tourists,” she said.
 THREATS OF TERRORISM

 Terrorism may now pose the single greatest threat to the travel industry. In recent times, foreign visitors have
been shunning holiday destinations in the wake of terrorist attacks due to concerns over security, with hotel
occupancy rates dramatically falling in areas that have been affected.
 It is clear that the threat of terrorism is having an adverse effect on the numbers of tourists traveling to affected
cities, however, the number of corporate travelers is also negatively impacted, meaning that TMCs are also
beginning to feel the strain. According to a YouGov survey, terror attacks have cost the travel industry $8.2
billion in travel spending alone, whilst travel operators such as Thomas Cook are set to miss profit targets having
reported a loss in revenue.
 In an attempt to cast some positive light over the issue, some travel analysts have declared that tourist
destinations recover from terrorist attacks quicker than they would an environmental disaster. However, with the
increasing regularity of attacks, on a scale that has never before seen the long-term impacts are impossible to
predict – ensuring that terrorism remains the number one threat to travel.
 TRAVEL INDUSTRY’S SHARING ECONOMY

 The sharing economy refers to the collaborative consumption of goods and services using a peer-to-peer
service. The appeal of this system is that it is often significantly cheaper than purchasing a similar product from a
retailer or vendor. The rise of companies such as Airbnb, Uber, and Lending Club is testament to the attraction
of the sharing economy and, as such, it continues to prove a consequential threat to the global hospitality
industry.
 Some experts predict that the brand value of all top ten hotel chains – including the likes of Hilton, Marriott and
Accor – are set to fall significantly this year, and this has been attributed to the rise of the sharing economy and
specifically the encroachment of Airbnb. This is in spite of data that shows that less than 50% of Airbnb demand
is coming at the expense of those traditional hotels. This, combined with the fact that only 7% of Airbnb users
stay 1 night (vs 25% for traditional hotels), speaks to how Airbnb is primarily focused on non-hotel, leisure,
longer-duration stays, rather than corporate single-night stay segments that are commonly affiliated with the
major hotel chains mentioned above.
 The predicted fall in brand value has not gone unnoticed, however, and a fracture has formed between global
hotel brands and online travel agencies (OTAs), who are more at odds with one another than ever. Many major
hotel brands have launched campaigns to steer bookings to their own sites, in a bid to save on the 10% to 20%
commissions paid to OTAs. Travel sites aren't taking this lying down and have responded by pushing major
brands to the bottom of search results.

DISEASE TRAVEL INDUSTRY

 Ebola. Yellow Fever. Hepatitis. Typhoid. What do these diseases have in common? The fact that they’ve all had
a detrimental impact on the travel industry in recent years. Fortunately, such is the level of advanced medicine
within the United Kingdom and all across western In Europe and America, vaccines are now available to protect
travelers from the majority of these life-threatening diseases.
 The World Health Organization (WHO) has declared the Zika Virus a “global public health emergency”, whilst
some areas have declared a state of emergency and doctors have described it as "a pandemic in progress".
Given the news that the Zika Virus is spreading rapidly throughout Miami and Puerto Rica, as well as the fact
that fears about the virus in South America and the Caribbean have already resulted in a fall in foreign travel and
hotel occupancy, it is no surprise that Zika is on the minds of many travelers.
 Traveler numbers have greatly decreased in those areas that have been impacted; reports claim that potential
visitors are canceling plans to visit the Miami area – and Florida in general – deterred by fear of the mosquito-
borne illness. South America has arguably been hit the hardest by the outbreak and is also experiencing a rapid
decrease in traveler numbers. This is thanks, in part, to major airlines refunding tickets to passengers who have
booked flights to those areas of the continent affected by the Zika virus. British Airways, American Airlines, and
Lufthansa are among those offering passengers the opportunity to change their booking free of charge, delay
their journey or amend to an alternative destination, drive tourism away from those affected countries, and
reduce the number of overall travelers. The Zika virus is set to have a large impact on the travel industry. With
increased medical warnings not to visit affected areas, the disease is already having a detrimental impact upon
the number of people traveling and on the travel industry as a whole. Research into vaccinations is currently
ongoing and only time will tell whether the threat of the disease will remain a risk of travel. For the time being at
least, it poses a significant challenge to the global travel sector, and with the outbreak “spreading explosively” it
could spell yet more disaster for the industry. Terrorism, the sharing economy, and the Zika virus represent three
trials that have the potential to disrupt world travel. Yet, these are by no means the only distributions faced by
TMCs – Brexit, the world economy and fluctuating oil prices also maintain the capability for disruption.