Over the past month, there has been a surge in global terrorism. Major terrorist incidents include the downing of a Russian plane over the Sinai Peninsula, deadly assaults on Paris, and suicide bombings in Turkey, Lebanon, and Nigeria. There have also been several other attacks, mainly concentrated across the Middle East and Northern Africa. While these devastating attacks are first and foremost a humanitarian issue, they undoubtedly have business consequences, ranging from physical damage to property to potential long term alterations in consumer behavior. This being said, what impact does terrorism, and more specifically the recent surge in global terrorism, have on the global travel and tourism industry?
For airlines, the short answer is none. Carolyn McCall, Chief Executive of British airliner EasyJet, said that typically, there is a quick resumption of travel after events like these, though it is too early to tell how long it might take for demand to recover. Flybe Group, another European airliner, reiterated this sentiment in releasing a statement saying that market conditions are expected to return to normal “before too long”.
The situation for popular tourist destinations and resorts is more or less the same. Yeganeh Morakabati, an expert in risk and tourism at Bournemouth University in the United Kingdom, stated that “Short term, [a terrorist incident] would put some people off. Longer term, people have short memories. A lot of people will forget.” Dr. Morakabati continued to say that the key factor in determining if tourism to a destination will be affected in the long term is if the event is publicly viewed as a one-time event or as a reoccurring threat, stating that “if it is a one-off attack, people forget.”
Governments have a financial incentive to protect the tourism industry and therefore will often enforce increased security and a regular military presence at popular tourist destinations. Another way that these popular tourist destinations are maintaining demand is by cutting prices. Simon Calder, travel editor of The Independent stated that “A very good way of getting people to go to destinations which have suffered at the hands of terrorists is to cut prices… We can make a cost-risk analysis. As long as we know the risks, that’s a reasonable thing to do.” Dr. Morakabati also weighed in on this topic saying that we must “look at it as a mathematical equation, sometimes the attractiveness of a destination is higher than the level of risk.” Essentially, popular tourist destinations that are under a more constant threat level must do everything in their power to decrease the risk of an incident and then cut prices to compensate for whatever risk remains.