A year after "11-S": climbing towards recovery

It is difficult to find a confidence crisis in the past several decades that can match what the world experienced in 2001. The terrorist attacks on the 11th of September 2001 shook the entire global tourism industry. The international air-passenger traffic was especially affected and its decline had tremendous impact on the hotel industry and distribution networks. A year after, with some exceptions in the politically unstable regions, tourism is firmly back on the road towards recovery and growth. 

Tourism enjoyed exceptional years in 2000 and 2001. In 2000, international tourism grew by forty-five million arrivals, reaching levels never seen before. In 2001, international arrivals declined by 0.6 per cent, the first year of negative growth for international tourism since 1982. However, the results for 2001 would have been in line with the trend observed over the past decade had it not been for the magnitude of the increase in tourist arrivals in 2000, which was much larger than the figures obtained during the preceding years. 

The events of 11 September, which determined the results of international tourism in 2001 as well as the way in which certain destinations and sectors were affected, were only one factor, although the most important, for the decline in tourism statistics. The economic situation in the western countries, e. g. Germany and the USA, began to deteriorate in late 2000, while the decline had begun even earlier in Asia, which decreased outbound travel from Japan. The effects of the economic downturn on inbound tourism in regions such as the Americas, South Asia and the Middle East were felt during the first eight months of 2001.

Media saturation with images of the tragic events, the reiteration of the associated messages and the magnification of diplomatic and military responses - due initially to a lack of precise information and later to a flood of reports - led to a decline in international tourist flows. In the months following September 2001, it was not so much that people stopped travelling altogether but rather that they restructured their travel habits favouring destinations that were closer to home, more familiar and accessible using means of transportation that were perceived to be safer, that is, individual rather than mass transport. This only served to worsen the situation of the air transport industry. The consequences of this situation are still being played out and at this time it is very difficult to foresee where it will lead.

The situation of the tourism industry in the first half of 2002

At the present time, assessing the situation of the tourism market is something that most operators refuse to do until the season is further along. They simply do not have sufficient information, given the changes that have taken place in holiday consumption. There are not very many countries with a statistical mechanism allowing the evaluation of recent periods with a certain degree of reliability.

Sectional estimates may be biased by arbitrary intentions or interests, while the data series used may be of different natures (visitors, tourists, customers, person nights, etc.) or correspond to different periods of the year, generally from January-March to January-July. 

Another serious difficulty lies in that countries do not usually provide information about July and August. These two months are crucial for the summer season in the northern hemisphere and for a good number of countries in the southern hemisphere, July is also an important holiday month. In other countries, the high season runs from October to March, due to weather conditions between July and September.

Taking all of the above into consideration, the basic characteristics of international tourism in the first half of 2002 have been the following:

- There has been a contraction in international tourism caused by a decline in long-haul flows. 

- This contraction seems to be easing gradually as the months pass.

- The recovery in terms of number of trips has not been associated with a proportionate increase in revenues. It is expected that corporate earnings will grow at a slower rate.

- Prices are playing a key role in purchase decisions.

- The market has maintained certain characteristics that were already observed in tourist behaviour since late last year, particularly delays in bookings and last-minute purchases.

- Companies in the industry continue to give priority to profitability over other objectives. To this end, many companies have adjusted the capacity brought to market, with varying levels of success.

- There seems to be a clear trend towards maintaining a business strategy that includes an active policy of alliances, mergers and acquisitions as a way to reduce costs and ensure positive results.

- Tourism administrations continue to mobilize resources and to implement best management practices to support the industry as they have since September 2001, with results gradually becoming apparent in the industry's results and changes in its forms of action.

- In all the markets, medium-term expectations are positive. 

Rumours, albeit vague, regarding possible military operations in geographic areas close to those already affected by the events of September 11 have caused certain destinations to begin to be perceived as risky. No solution is in sight, within the short term, to the Israeli-Palestinian conflict. The tension between India and Pakistan is threatening the development of tourism in certain destinations in the area.

The recent flooding in Central Europe caused damage to a wide range of infrastructures (especially communications and transport) and to tourism facilities but also had a negative impact on the German outbound market. It is still too early to assess its impact, but it will certainly influence tourism results in the affected areas, both for independent destinations as well as circuits whose parts have been affected.

Some of the latest market trends

The main characteristics of demand are as follows:

- A clear tendency toward shorter stays when going on holidays.

- Greater fragmentation of holidays, due to a reduction in working hours and an increase in the number of paid leave days.

- Higher demand for customized holidays. The maturity of a significant part of the market demands this, while the use of advanced information technology makes greater  customization possible.

- The relative increase in the demand for conventional non-hotel accommodation.

- The shift from active holidays to holidays as an experience. In this regard, tourism is following in the footsteps of other types of consumption. The point is to achieve a complete participative experience, which provides new knowledge as well as authentic emotions.

- Increase in the number of senior tourists.

- The increasing importance given to tourism activities being subject to sustainable  development and fair trade principles.

- Migratory flows since they play an important role in tourism demand.

- Economic integration processes.

- The advent of emerging destinations which are prompting other destinations to rethink  the design of their products.

- The increased opportunities of destinations with lower border-entry hurdles.

- The segmentation of demand made more complex by the overlapping of traditional travel purposes (ex. Honeymoon trips to destinations with access to sun-and-sand, cultural and theme cruise products).

On the supply side, there have been changes in business integration strategies (alliances, mergers and acquisitions) and in management priorities, the configuration of the airline industry as well as advances and changes in distribution systems. It is important to consider this process due to its possible consequences for destinations with fragmented product offerings in the face of increasingly powerful groups in the transport and distribution sectors.

From the perspective of supply, the challenge is to anticipate changes in demand, to ensure adequate levels of quality and to transmit such values to customers through the creation and accreditation of brands. As an alternative, there are efforts to establish quality criteria accredited by recognized certification systems.

In the short term, tourism enterprises are trying to adapt to the current situation by working to reduce structural costs, lower their break-even point, fine-tune and rationalize their financial management and implement marketing measures affecting products and distribution systems. In this respect, GDSs are playing an increasingly important role. 

There is one formula that remains as valid as ever, and that is cooperation between governments and between the public and the private sector. WTO (World Tourism Organisation) sees it as very important to not only continue with its activities but even to enforce its guidance and help to the tourism industry through the work of all its resources and especially the Recovery Committee. The latter has proved to be needed and effective. 

Now, more than ever, the different social and economic actors need creative and effective mechanisms that allow them to work together in order to restore tourist confidence and to keep the tourism system operational.