Research project topic: Impacts of terrorism on International travel and tourism(Case study of 9/11) - Essay Example

Order: 258594 Research Proposal Impact of Terrorism on International Travel and Tourism (case study of 9/11) Is the Impact of Terrorism on Travel and Tourism Lasting? Introduction: The losses inflicted by terrorist attacks, such as 9/11 in the US, 7/7 in the UK, and, more recently, 11/26 in India, cannot be evaluated entirely in terms of money and material; the intangible, sometimes almost imperceptible, losses are equally enormous. For instance, the material damage caused by such attacks pales in comparison with the psychological impact which very often is verily ruinous; and in the case in point, the attack on the World Trade Centre, and the consequent commercial loss, was compounded by the widespread fear that the attacks engendered among the general public. Terrorists are arguably perverts, but not stupid enough not to have realised that, with its economic sinews, the US could easily rebuild the World Trade Centre; therefore, they targeted it so as to sow seeds of fear in the minds of the common people that if the World Trade Centre could not be saved, nobody could expect to be safe even in the US from terrorists. Relevance of the Proposed Research With more people round the world having more money in their pockets, the temptation to take in tourist attractions in other countries had become irresistible. In the process, travel and tourism have become twice blessed, as it were: they bless the tourists by helping them learn about new things, lands and people and also to relax away from their normal habitats; they benefit the host country with foreign exchange which is used to create employment. Therefore, acts of terrorism come as dampers to both the tourists’ disposition to travel to other countries and also to the local economies. That is the essential reason why all those interested in protecting and promoting travel and tourism should understand all the evil ramifications of terrorism so as to be able to address the problem. While the terrorist threat to life and limb cannot be magnified, its different fallouts deserve serious attention. For instance, by hijacking aircraft which eventually rammed the World Trade Centre and Pentagon buildings, the terrorists instilled in prospective American tourists fear of flights. The aviation industry in the US, no doubt, acted swiftly to control the damage, both material and psychological, but the fact remains that seven years after the event the volume of international travel and tourism to the US is still picking up, though steadily, as statistics in the following paragraphs will show. Rationale for the Research Project This project aims to show the impact of terrorism on travel and tourism in all its ugly plenitude, so that the world as a whole may be prepared to take on the threat if it recurs. It will also try to show how to minimise, if not neutralise, the adverse impact in the future, and what policy changes may be needed to achieve that objective. Research Questions i) Does the impact of terrorism on people’s propensity to travel last very long? ii) How steep has been the decline in the number of people who have travelled to tourist spots in other countries in the aftermath of 9/11? iii) Is fear the only key, or have official policies also discouraged prospective tourists? This study will draw on current literature on the subject, articles in the media and on the internet, and other sources. The key words to the research will be “tourism”, “terrorism”, “governmental policies”, “people’s gut reaction”, and “economic losses and resilience of affected countries”, among others, to support the thesis statement.. However, to tote up the visible, commercial losses first, “loss of tourism (resulting from the terrorist attacks on 9/11) cost the USA $100 billion, 200K jobs, $16 billion in tax revenue” (Doctorow; 2007) .The 17% decline in US tourism since September 11, 2001, has had a devastating effect on the economy, costing nearly $100 billion, two million jobs and $16 billion in tax revenue. The number of visitors to the US from around the world has fallen to 5.9% from 9.4% in 1992. On their part, Americans curtailed overseas travel, and chose domestic destinations in lieu; Hawaii offers a clear example of benefiting from a surge in domestic trips. “Hawaii tourism is enjoying robust growth as growth in tourist arrivals from the US Mainland have more than offset declines in Japanese and other international visitors. Hawaii’s current tourism boom is in part explained by the diversion of US travel from foreign travel.” (Bonham, Edmonds, and Mak; 2006) When travel industry officials in Mainland America speak of recovery from 9/11, the conventional practice is to refer to 2000 as the point of reference, and to regard recovery as having been achieved when tourist arrivals (or spending) return to pre-attack levels. Shortly after the attacks, the World Tourism Organisation (WTO) noted with a degree of satisfaction that the number of international tourist arrivals had fallen by less than 1% from 696.7 million in 2000 to 692.7 million in 2001. This small annual decline, however, marked a sharp reversal of the growth trend in international tourist arrivals registered in the decade preceding 9/11. By 2002, international tourist arrivals around the world rebounded to 702.6 million, exceeding the 2000 peak. Recovery is attained only when the level of economic activity (in this instance, tourism arrivals or expenditures) gets back to where you otherwise might have been had the terrorist incident not occurred. To achieve full recovery, tourist arrivals (or expenditures) must grow at a rate that is faster than the historical growth trend in the catch-up period. Using this definition of recovery, 9/11 ushered in a sharp reversal in the pre-9/11 growth trend of international tourism flows, and US share of total international arrivals fell to 5.9% in 2003, though US domestic travel increased steadily.” (Bonham, Edmunds & Mak; 2008) Airline industry worst hit The attacks had a substantial negative impact on the travel industry, especially the airline industry, which did not recover its international pre-9/11 flight volume until 2005. (FAA Aerospace Forecasts; 2005). It also looks as though Americans changed their habits. For instance, a survey of 22,097 adults across all the 50 States, conducted during January-March 2002, revealed “decreased activities, including travel”. (MARS Study; 2002). However, another school of thought has it that the impact of 9/11 “is temporary; it gradually subsides over several months, similar to findings of the gradual resumption of visitor counts to the more widely known destinations. These results emerge from two econometric models of daily visitor counts over a five-year period. An interaction term and an auto-regressive term assess the trend’s rate of decline.” (Gut and Jarrell; 2007) The research so far indicates that opinion is divided among researchers on the probable duration of the impact of terrorist attacks. But, by and large, they are agreed that the impact is indeed prodigious. Feasibility of research This research is hampered by the obvious difficulty in contacting researchers quoted here to elaborate on their theses. But that difficulty is being sought to be overcome through minute analysis of different viewpoints emerging from the bodies of research. Methodology This research seeks to read between the lines of all previous research on the subject, and relate the inferences to its own thesis. Statistics will be used extensively to reinforce the conclusions arrived at in this thesis, and the statistics will be sought to be viewed in the light of their interpretation by previous researchers. That method will give readers a comprehensive and consolidated perspective on the issues involved in studying the intensity and duration of the impact of terrorist acts on travel and tourism industries. Record broken One version is that “the travel and tourism industry in the US is strong and continues to be the most lucrative industry of that kind in the world. International visitors to the US set a new record level of spending in 2006. Sectors such as hotels and lodgings and restaurants are achieving new levels of prosperity. Key sector indicators are largely positive. According to Price Waterhouse Coopers, in 2006 lodging industry profit levels returned to the previous record level of $22.5 billion; and data from the Bureau of Economic Analysis indicate that total restaurant sales were less affected by 9/11 relative to other travel and tourism sectors and have steadily increased 15% in real terms between 2000 and 2005.” (Estrada; 2007) It is nevertheless true that, post-9/11, US travel and tourism receipts and international visitor levels both sharply declined; receipts roughly 22% from the peak in 2000 to a trough in 2003. However, travel and tourism receipts in 2006, at $107.8 billion, were 5% over the record set in 2000. Additionally, 2007 international visitor levels were projected to surpass the 2000 record, reaching 52.9 million. This clearly demonstrated the industry’s resilience. The US tops the world with respect to travel receipts. An Alibi? While the losses suffered by the travel and tourism industry in the immediate wake of 9/11 were undeniable, the thesis that they resulted entirely from the terrorist attacks has somehow stuck in the gullet of many people around the world. True, no people, least of all Americans, thought that such strikes could be mounted against so strong a country as the US; it cannot be denied, either, that any people in corresponding circumstances would have been caught off-balance. But to argue that the terrorist attacks, which undoubtedly contributed to the economic losses, alone were responsible for the losses would be to give hostages to fortune. To give a specific example of the resilience of the human spirit (that some Americans have argued somehow did not surface in the wake of 9/11), the following are excerpts from a report from India, significantly dated December 1, 2008, just four days after the worst-ever terrorist attacks on two big hotels in the country’s financial capital, Mumbai, that left nearly 200 people dead and many more injured. “On December 1, Graham Budd, chief operating officer of England-based semiconductor IP firm ARM, arrived in the business hub of south India, Bengaluru, for a technology symposium. He said his flight was relatively empty.” That may or may not have had anything to do with the Mumbai terror attacks which had made some companies issue travel advisory to their employees. However, the symposium was well-attended, with no foreign delegate who must have had to fly from his country dropping out. (Das; 2008) Besides Budd, there were at least 10 participants from Britain and France. A greater worry The IT industry in the capital of the southern State of Karnataka has repeatedly said that, though the city is not new to terrorist attacks, it does not expect the terrorist attacks in Mumbai to impact its business, and that the global recession is a much bigger worry, even though some do expect customer visits to decrease. President and COO of Collabera Mohan Sekhar put the issue in perspective at the symposium: “Businesses globally have come to accept terrorism has become a fact of life. But countries which have been affected, like the USA, the UK and India, have shown resilience in dealing with it. We don’t see any kind of long-term business impact on the Indian IT industry, except that there could be some slowdown in client visits during the coming months. This was, anyway, projected to happen, given the current global financial crisis.” The industry’s lobby body in India, Nasscom, thinks on the same lines; its president Som Mittal said at the symposium that there would be initial worries about travelling to India. However, it is not any different from what happened post-9/11 in the USA, the London blasts or the Madrid attacks. “We are in Hyderabad today for Nasscom’s information security summit, and the hotel (where we are staying) has taken every measure to instil confidence. Work goes on. After the terrorist attacks in Mumbai, most of our centres, even in Mumbai, were operational and customers were serviced without disruption.” Meanwhile, a Nasscom blog stated that increased precautions were being taken to ensure the safety of employees, facilities and visitors. The industry has put in adequate disaster management and business continuity plans to ensure 24/7 operations. “Disaster recovery centres are in place to take care of eventualities,” Mittal said. Remember, the terrorist attacks in Mumbai, as brutal as 9/11 and 7/7, were, like them, surprise ones. Yet the Indian economy had taken adequate precautions.” Maybe the USA had imagined “it could not happen here”, and paid the price of smugness. Coincidentally, many in the US also seem more worried by the current economic meltdown round the world. “In some ways, the travel and tourism industry in the US did an excellent job in responding to 9/11; but now it faces the threat of the current economic meltdown and what it means to world trade and tourism.” (Tarlow; 2008) Entry made tough Over the years since 9/11, plenty of evidence has surfaced in the US to suggest that the government’s policies have been at least as responsible as terrorist attacks for international tourists keeping off the country. Significantly, this much has been admitted by no less a dignitary than the deputy assistant secretary for Manufacturing in the US Department of Commerce. “While receipts provide a critical measure to gauge the industry’s strength, the global market share of international visitors to the United States has fallen since the peak in 1992. However, that alone does not give an accurate measure of performance. In recent years, the industry has had to wrestle with various challenges in a post-9/11 environment. Development of new security processes has challenged both the government and the private sector to achieve the right balance of security while continuing to welcome visitors and facilitate their entry into the United States. Secretary Gutierrez requested that the Department of Commerce’s Travel and Tourism Advisory Board (TTAB) make recommendations on how the federal government can support the industry’s efforts to compete for international travellers.” The TTAB is a private sector advisory board comprising 15 industry leaders representing various sectors of the travel and tourism industry. Its recommendations were referred to the Tourism Policy Council (TPC) which is led by the secretary of commerce and made up of 17 federal agencies addressing travel and tourism issues and policies. The TPC, at that point of time, was reviewing the recommendations, and member agencies were trying to implement some of them. Many of the issues were being addressed also by the Department of Homeland Security and State. The government and industry were largely in agreement. The Department of Commerce believes that the safety and security of Americans and those who visit the United States are paramount. However, “the government and industry share a vision for making the US accessible and safe simultaneously. The department of Homeland Security and State is collaborating with travel and tourism industry and the department of commerce on model ports of entry projects at the Houston International Airport and the Washington Dulles International Airport to ensure a more welcoming environment for international visitors through improved entry procedures and passenger assistance measures.” (Estrada; 2008) Liberalisation Another challenge to the travel and tourism industry is implementation of the next phase of the Western Hemisphere Travel Initiative (WHTT) which requires that all tourist travellers, including US citizens, travelling to and from Canada, Mexico, the Caribbean and Bermuda have a passport or other acceptable documents to enter or re-enter the US by land or sea. Implementation and communication of the land and sea requirements will facilitate travel into the US; after all, requirements for air travel have not inhibited travel to the US from within the Western Hemisphere. More than 68% of international travellers visit the US from Visa Waiver Program (VWP) countries and 60% of all receipts (exports) come from the same countries. (US Department of Commerce; Office of Travel and Tourism Industries; 2008). The VWC enables nationals of 27 countries to travel to the US for tourism or business for stays of 90 days or less without requiring them to obtain a visa, and that helps the travel and tourism industry. “The visa policy should exclude those who might harm the US, but should ensure that legitimate travellers are permitted entry. Demand for visas should be met speedily. The Department of State is improving the transparency, efficiency and predictability of the visa process, by adding consular positions, investing in automating outdated systems and streamlining the visa process while maintaining full security measures. It is in US interest to ensure that countries across the globe join it in implementing travel security processes that ensure the safety and security of travellers to the US and protect US national security interests. Reforming the VWP and extending it to countries that demonstrate a commitment to security will facilitate travel to US while maintaining the safety and security of Americans.” (Estrada; 2008) Bilateral pacts Chinese visits to the US increased 19% in 2006 from 2005. While there is huge potential for such visits, Chinese policies restrict group leisure travel to nations like the US that do not have a bilateral agreement with China. “Therefore, a bilateral agreement with China is desirable. A similar agreement with Brazil, whose economy is buoyant, to extend on a reciprocal basis visa length from five to 10 years would also help, besides easing pressures on visa issuance, reducing costs for individuals and families to visit the US and facilitating market access.” (B.S.Murphy; 2007) Liberalisation of air services between countries generates more opportunities for airlines, consumers, travel and tourism, and other industries. The US has more than 10 Open Skies bilateral agreements, and liberalised, though not “open skies”, agreements with China and Japan; an “open skies” agreement was signed with EU on March 2, 2007, and the key gains to the US from it are access to London’s Heathrow Airport, cargo rights in the UK, and Open Skies treatment for new EU member-States. The fact nevertheless remains that there is widespread criticism within the US of the government’s visa policies. “Visitors to the US from around the world rank the border procedures as among the worst on earth. What affects travel and tourism affects our image around the world…It is the person coming from India to look at a company in America for parts, or a person from South America who cannot get into this country for a conference because he can’t get a visa.” (Doctorow; 2007) Not welcome? The number of foreign visitors to the US plummeted since 9/11 “because foreigners don’t feel welcome, tourism professionals say.” (Porter; 2007) “The shabby welcome that many foreign visitors feel they get in the US is to blame. It’s clear what’s keeping people away in the post-9/11 environment; it is the perception that travellers aren’t welcome. They feel the US entry experience is among the world’s worst. The government should, therefore, work with the private sector to make visa acquisition more efficient, the entry process traveller-friendly and to improve communication.” (Freeman; 2007). “The welcome we extend to visitors is important.” (Dow; 2007). “The greatest public diplomacy tool America has is her people. Those who have visited the US and interacted with the American people consistently feel more positive about the US than those who have not visited.” (Pew Research Centre; 2007) For instance, in 2006 only 56% of Britons had a positive opinion of the US compared with 83% in 2000; 39% of the French saw the US in a positive light in 2006 compared with 62% in 2000; in Turkey, 12% had good things to say about the US in 2006, 40 percentage points down on 2000. “The US should promote itself to visitors. If you look at visitor numbers from the UK before 9/11, we have had 4.8 million of them; but last year (2006) the number was 4.1 million. Looking to 2010, the Department of Commerce is projecting an increase in those numbers, but only of one percent over the course of 10 years. If I ran a business that had one percent growth in 10 years, I would be fired.” (Freeman; 2007) “Many other countries have eased their inbound travel restrictions to promote international travel to their countries. Schengen Visa enables foreign visitors from non-EU countries to obtain a single visa for travel to all EU countries; several ASEAN countries now allow visa-free entry for each other’s nationals. So the US travel policy must find a balance between security needs and increasing the transactions costs foreign tourists face; the next US recession will be even more damaging to US tourism.” (Bonham, Edmunds & Mak; 2007). International Image Americans too curtailed their overseas travel, and the number of overseas trips from the US declined continuously from 60.9 million in 2000 to 54.2 million in 2003. “Opinions about the US have become increasingly negative in recent years, (Pew Research Centre;2005), and this may carry over into an increasing perception abroad that the US is unfriendly to foreign tourists, but that has not been demonstrated to be a serious deterrent to foreign travel to the US. Until 1986, the US had among the most restrictive visa entry requirements in the world. The US implemented its first visa waiver agreement with the UK as an experiment only in 1988. Today the list of nations whose nationals are able to enter the US without a pre-arranged visa is perhaps the shortest of any of the OECD countries. It seems obvious that the growing number of regulations and requirements needed to obtain a tourist visa to the US makes it more difficult for foreigners who want to visit the US. Requirements for personal interviews, higher visa application fees and longer waits to obtain visas can deter would-be international visitors. Added security measures at US embassies abroad mean that visa applicants must often wait in long lines. Perhaps it is not a coincidence that Singapore which has visa waiver agreements with well over 150 countries saw its international travel recover quickly from waves of external shocks and then surpass its pre-9/11 peak.” (Edmunds & Mak; 2005). The effects of 9/11 were devastating regarding America’s strict new visa policies and their effects on nations and individuals around the world. “Many leaders in today’s Arab world were educated in the US, which helped them develop an affinity for the country. This will not be true of the next generation of Arab leaders who are being denied the opportunity to study here. This will have an impact for decades to come on the very nature of US-Arab relationships, including leadership. Visa restrictions have also profoundly affected US companies doing business internationally, due to restrictions on visas to the US.” (Hamod; 2004). Restrictive visas Yet, there is little effort to quantify the effect that these new policies are having across-the-board on US firms. “A June 2004 study by the Santangelo Group, entitled ‘do visa delays hurt US business?’ found that US companies suffered $30.7 billion in financial impacts between July 2002 and March 2004 due to delays/denials in the processing of business visas. This included revenue losses of $25.53 billion and indirect costs of $5.15 billion.” (Hamod; 2004) US trade deficit during this period totalled $798.5 billion; so the $30.7 billion loss due to visa delays equates to nearly 4% of the US trade deficit.” (Ferguson; 2004). “The single biggest reason why foreign students have not come to the US is the restrictive visa program, according to a survey in October 2003 by the Institute of International Education which said losses to the US economy due to a drop in Arab students in 2003 amounted to at least $43,126,127. Visa hassles are affecting more than students and businesses. A synopsis of several of America’s leading medical facilities suggests that the US medical community is losing at least $1 billion per year in direct international patient care. When indirect revenues were considered (losses by hotels, restaurants, transportation firms, etc.) the number jumps to $4 billion per year now going to other nations. (Hamod; 2004) “The new visa requirements are also precluding international medical graduates (IMGs) from entering the US. According to the American Immigration Law Foundation, foreign-born medical professionals in the US account for 25.2% of all physicians in the country, and 1.1 million immigrants account for 13% of health care providers. (Ferguson; 2004) Saudis put off Tourism has also been hit. “Over the past three years, the loss of international travel to the US has cost the economy $15.3 billions, according to the Travel Industry Association of America. As for Saudi Arabia, the Institute for Middle Eastern Policy Research has observed that if new procedures turn away desirable Saudi visitors from the US, education, business, travel and tourism industries could easily lose an estimated $4.7 billion in Saudi travel revenue over the next decade.” (Hamod; 2004). Conclusion: It is clear from the foregoing analysis that the impact of 9/11 on the travel and tourism industries, enormous though it was, was compounded by what can be described as knee-jerk reactions of the US government to the terrorist attacks. Also, it is crystal clear that the fear of overseas travel fostered in Americans by 9/11 is wearing off steadily, though more slowly than many Americans themselves and their travel and tourist industries might have desired. Additionally, mankind, in general, and Americans, in particular, seem to be learning to live with international terrorism, at least for now and until it can be suppressed, and that reconciliation with, or resignation to, a grim reality is helping both keep their chins up and eyes to the front. References: Doctorow Cory; Boingboing, a Directory of Wonderful Things; http:www. Boingboing.net/2007/11/02/loss-of-tourism-cost. Html; November 2, 2007 Porter Stevan, chairman, Discover America Advocacy Campaign; AFP; November 1, 2007 Freeman Geoff; executive director; Discover America Advocacy Campaign; AFP; November 1, 2007 Das Gautam; Deccan Chronicle; India; December 2, 2008 Dow Roger, president, Travel Industry Association of America; AFP; November 1, 2007 Global Attitudes Project; Pew Research Centre, Washington; March 15, 2007 Bonham Carl, Edmunds Christopher, Mak James, “The Impact of 9/11 on Tourism in the US and Hawaii; New World or More of the Same?” http://72.14.235.132/search/q=cache:FRT 80qUSQ30; www.auber.org/-“Forecasting Tourism post-9/11 The Library of Congress; Business Reference Services; BERA (Business & Economics Research Advisor)-issue 11/12: Winter 2007/Spring 2008; FAA Aerospace Forecasts: Washington, D.C.: US Department of Transportation; Federal Aviation Administration; http://www.Faa.gov/data_statistics/aviation/aerospace_fore-casts; 1999-present MARS Study; December 7, 2002; http:/www.zonalatina.com/Zldata 248.htm “Many Americans Still Feeling Effects of September 11th; Are Re-examining Their Priorities in Life” http:/www.apa.org/practice/poll_911.html “The-impact-of-9-11 on Tourism in US and Hawaii” http://www.faqs.org/abstracts/Travel-industry/ Gut Peter &Jarrell Stephen’ “Silver Lining on a Dark Cloud: The impact of 9/11 on a Regional Tourist Destination; Journal of Travel Research, Vol.46, No.2, 147-153 (2007). http://jtr.sagepub.com/cgi/content/refs/46/2/147 Estrada Jamie, Deputy Asst. Secretary for Manufacturing; US Department of Commerce; http://www.trade.gov/press/speeches/estrada_032007.pdf-March 20,2007 Tarlow Peter Dr. (tourism tidbits; October 6, 2008); “Economic Downturn: The Economic Threat to the Travel and Tourism Industry”; http://www.eturbonews.com/5416/economic-threat-travel-and-tourism-industry. http://www.govpro.com/whitepapers/way_ forward_travel_tourism; October 3, 2008 Lynn Jane Baxter; Industry Watch; http://www.jbeprstrategies.com/ November 2005 Simon Hermann; “9/11- One year Later”. http://www.dgap.org (volume 3/2002) Bennett Mark &Bray Harry; http://www.sonic.net/-schuelke/Terrorism Vs Tourism, html; PDF. Indicator. Economic 09 2003/publications/org.nycp.www.//http Dove Jane; “Tourism and recreation”; http://www.geog.nau.edu/courses/alew/ggr 346/wtc/wtc4b.html http://www.davidrussell.org/wp-content/uploads/2006/09/wrc-9-11.jpg http://www.foxnews.com/story/O,2933,62178,00;html; Sept. 10, 2002 Hamod David, president, National US-Arab Chamber of Commerce, Washington, D.C., http://www.arabnews.com; September 10, 2004 Ferguson Barbara; “Lingering Economic Effects from 9/11 Attacks Still Being Felt”; http://www.arabnews.com; September 10, 2004 http://www.uschamber.com/press/releases/2005/november/05-177.html . Read More