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Travel and tourism industry faces numerous challenges

Tourism confronts a world in turmoil

Dr. Peter E. Tarlow, President of Tourism & More  Mar 28, 2011

The month of March is known in US basketball as "March Madness." This month has also been a month of madness around the world, not in sport, but rather in political upheavals. March of 2011 saw the Japanese earthquake, followed by a pacific-wide tsunami and nuclear power crisis, by riots in the streets of London, by the fall of the Portuguese coalition government, by union protests throughout the world, from Madison, Wisconsin to Europe, from revolutions in much of the Arab world, to renewed bus bombing and rocket attacks against Israel, to a no-fly zone imposed over Libya.

To add to the confusion neither government spokespeople nor the media have been very clear as to what these political undulations mean. From the perspective of the tourism industry, these momentous changes present a major challenge and may have long-term industrial consequences. In fact tourism risk has never been higher and tourism officials must change the way they do risk management. Here are a few factors to consider when seeing the new world of tourism risk management.

Food prices are rising at alarming rates. There is no one factor to account for the rapid increase in the rise of food prices. These price rises are the result of a number of factors: irregular rainfall in much of the world including a major Texas draught, the high cost of fuel resulting in higher transportation costs, political disturbances in the Middle East, the need to ration food in a post earthquake/tsunami Japan have all contributed to "food sticker shock" and political tension. It may well be hypothesized that much of the world's political upheavals have less to do with a desire for democracy and as has occurred throughout history, more to do with the cost of food. The impact of tourism being caught in the crossfire is already manifesting itself. Restaurants have had to raise prices or lower their service. Transportation companies have been (and will continue to be) hard hit. The airline industry is especially vulnerable. Airlines depend on both the food industry (at least in first class or executive class) and the fuel industry. Already on the margin, airlines can do nothing more than cut services and raise prices. The result of such a policy may create an economic tsunami as the leisure traveler may well decide that travel is simply too expensive and thus the "staycation" (or stay-at-home-vacation) once again becomes a reality impacting hotels and attractions throughout the world.

Furthermore, from a tourism security perspective, the world's security situation has deteriorated. There are few nations today that are not suffering from either political or economically motivated violence. From Mexico's drug wars to most of Latin America's express kidnappings, from street violence from England to the Middle East, the tourism world must face the fact that there is an increase both in the potential for crime and for acts of terrorism. Indeed the current Libyan government, with a great deal of blood on its hands, is not above "punishing" the West by further acts of terrorism.

The international tourism industry must also face the reality that world currencies are no longer stable. It is impossible to predict the value of the US dollar or euro over the next twelve months. This inability to know the value of a currency means that long-range tourism prices are especially hard to predict and the fallout from this monetary instability is already impacting multiple tourism support systems. For example, tourism experts are now noting that hospitals are turning people away (despite their nation's laws) who do not have local insurance or a well-backed credit card.

The tourism industry must also recognize that despite what the politicians may tell us the world's economy has multiple challenges. Among these challenges is the fact that retirement accounts, throughout the Western world, are no longer sustainable. Well-healed unions may protest, but there is no way that a diminishing working population can afford to allow people to retire at full or three quarter wages for periods of 20 or thirty years or more. What this means is that the group of people who often travel the most, the young retirees, may have to make major lifestyle changes and these changes may have a great impact on the world of tourism.

Despite these numerous challenges it would be a mistake to predict the demise of the travel and tourism industry. Instead this is the time when thoughtful tourism professionals need to be creative and well aware of the multiple disciplinary character of their profession. Tourism officials need much more than simply marketers, that model is soon to die. Instead tourism professionals must take into account a wide range of disciplines that include knowledge of: economic factors, political factors, the price of commodities, the impact of security on their industry, and how front-line customer service interacts with demographic changes, and how weather patterns may impact their industry.

The tourism industry can no longer ignore the issue of total tourism security, what is often called "tourism surety." As such the industry must view the interaction and overlapping of tourism economics, with locale reputation factors and combine these with tourism safety and security. Tourism cannot afford a medical crisis or a food crisis, a natural disaster or a political disaster, conventional wars or acts of terrorism, crime and gang violence and narco-trafficking. Each of these threats is interconnected and in a world connected by both the internet and rapid transportation nothing stays for long in any one place. Instead what impacts one part of the tourism industry in the end will impact the entire industry.

Tourism confronts a world in turmoil
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