How Terrorism Affects the International Tourism Industry

Introduction

There is an undeniable relationship between terrorism and tourism. Because of the immense economic power that tourist sites represent, they are attractive targets for terrorists seeking to cause unprecedented levels of economic and social disruption. The 21st-century economy is dominated by three sectors: information technology, tourism, and telecommunications. Tourism generates ten percent of international employment, with a surplus of 30% in the Caribbean region. The World Tourism Organization estimates that over 200 million people across the world would be employed in the industry by 2015. The tourism and travel sectors expanded by 700% in the last two decades (Gabbay & Ghosh, 2013). It is further projected that tourists will spend twice as much in foreign nations on tourism activities.

For most developing nations, tourism is the leading source of income in terms of GDP and a key driver of economic growth. The challenge for many of these developing countries lies in political instability, which can serve as a potential catalyst for terrorist attacks. This instability may arise from diverse political and religious opinions or disputes over property ownership.

Terrorist actions targeting tourist destinations have an adverse impact on the economies of affected countries. The World Tourism Organization recognizes that the contributions of travel and tourism to both developing and industrialized nations are immense, and any downturns in activity are a cause for concern. Repercussions extend beyond tourism-specific businesses — such as hotels, catering, and airlines — to all sectors of the economy through the multiplier effect. For instance, a decline in tourism can cause adverse impacts on employment, homelessness, crime, and other social and economic conditions (Pforr & Hosie, 2009).

Case studies from countries such as Egypt, Kenya, and the United States demonstrate how bombings and attacks have disrupted tourism. The September 11, 2001 attacks were particularly dramatic because the industry was at its peak and many tourism operators were thriving. Before those attacks, the industry had already experienced significant volatility — during the Gulf War, for example, tourism activities declined from 25% down to 5%, though this improved to 15% within two years between 1991 and 1993 (Kucukaltan, 2011). The 9/11 attacks affected both the U.S. tourism industry and the global tourism sector, prompting economic problems worldwide through the multiplier effect.

Problem Statement and Rationale

This paper seeks to evaluate the phenomena of terrorist activities, how terrorism affects international tourism, and strategies to combat terrorism. The central issue is that terrorism instills fear in society. This paper addresses the following research questions:

I. How does terrorism affect the rate of tourism activities?

II. Does the frequency or severity of terror attacks cause a significant effect on the tourism and hospitality industry?

III. What government procedures and policies are effective in mitigating the effects of terror attacks on the tourism industry?

Terrorism is a predominant issue in contemporary society and is growing because of the increasing number of terrorist movements and the resources available to them. A prime illustration is the suicide bombing that occurred at Domodedovo Airport in Russia on January 24, 2011 (Huggett & Pownall, 2010). Although some articles, textbooks, and theses address the issue of terrorism, there is limited research that specifically examines its impact on tourism. Some hospitality literature touches briefly on this impact, though in a broad and often ambiguous manner. The defined themes of interest examined in this paper include whether the intensity or recurrence of terrorist acts more significantly affects tourists' decisions to travel, and how organizations and government bodies develop plans of action to handle such emergencies in the future. An additional theme is the role of media in both positively and negatively influencing public behavior during periods of uncertainty. This study is also intended to provide readers with a deeper understanding of the motivations behind terrorism.

Literature Review: Terrorism and Its Effects on Tourism

In recent decades, there has been an increased volume of research on the terrorism phenomenon in relation to society. However, researchers suggest that the subject remains relatively underexplored. Even with the surge in research following the September 11 attacks, over 200 studies have been conducted on the effect of terrorism on the tourism and hospitality industry. This paper analyzes the terrorism phenomenon and its impacts on tourism, defines terrorism and the factors facilitating its existence, links terrorism to its impacts on the tourism industry, and offers recommendations.

Terrorism Defined

Beirman (2013) offers the following definition: The American Department of State describes terrorism as planned, politically motivated violence perpetrated against civilians and unarmed military personnel by sub-national groups, mostly intended to influence a broader audience. Global terrorism is described as involving nationals or the territory of more than one nation. Understanding the environment in which terrorist movements form and operate helps to clarify the nature of terrorism itself. Environmental conditions serve as leading indicators of what a society will produce. An affluent environment is likely to produce professionals and scholars, while impoverished conditions are more likely to generate gangs and persistent criminal activity. Nations struggling with disease, hunger, and other socioeconomic and environmental challenges — further complicated by population growth — face a combination of pressures that may nurture terrorism. Terrorist organizations can effectively recruit members by offering better conditions to individuals living in desperate circumstances, particularly in underdeveloped countries.

Effects on the Tourism Industry

When examining the impacts of terror on the hospitality and tourism industry, the negative consequences are most immediately apparent. Terrorist attacks destroy tourists' motivation to travel. For example, the bomb explosions in Bali on October 12, 2002, which killed 202 people, devastated the island's reputation as a serene and beautiful destination (Treverton, 2008). In the immediate aftermath, tour operators rapidly withdrew their vacation programs from Bali and resorts throughout Indonesia, just as the high season for tourists from the Northern Hemisphere was beginning. Hotel occupancy plunged from a normal rate of 75% to just 14% (Hitchcock, King & Parnwell, 2009). Although those numbers eventually recovered, it took nearly two years to return to pre-attack levels. In addition, there was a 23.45% reduction in tourists visiting Bali between June and September of the year following the bombing (Laws, Prideaux & Chon, 2007).

Tourism and vacations are perishable products — they cannot be stored and used at a later date. Terrorism has a lasting negative effect on revenue that cannot be fully recovered. Even after time passes and visitors resume normal travel, not all businesses that were once operating will have survived. Local suppliers without sufficient cash flow to sustain operations will be forced to close, leaving employees without income and unable to support their families.

International Tourism and Terrorism: Emerging Evidence

Research examining the causes of terrorism has focused primarily on two perspectives: economic development and civil liberties. Nations positioned midway between full political freedom and authoritarian rule face a higher terrorist risk. High levels of democratic governance, employment, and openness in source countries reduce conflict, though the opposite is true when these qualities are absent in destination countries. Investment outcomes have been studied from both macroeconomic and microeconomic perspectives. From a macroeconomic standpoint, the effect of terrorism on economic growth is modest, particularly in advanced nations (Page & Connell, 2009). This changes when a country endures a sustained terrorist campaign. From a microeconomic perspective, research has focused on the effects of terrorism on specific sectors such as tourism, international trade, and foreign direct investment.

Terrorists frequently target international tourists, viewing them as representatives of hostile governments and as political instruments. Attacking the tourism industry allows terrorists to harm a thriving sector while simultaneously garnering widespread media attention. When terrorist threats emerge in a country, foreign travelers reconsider their plans, as the perceived danger has increased substantially. The risk of becoming a terrorist target provokes an immediate and negative consumer reaction.