Original article - http://www.eturbonews.com/5604/tourism-and-global-economic-crisis-2008
This article tries to analyse the affect on the tourism industry by the global economic crises and what new trends emerge during this situation. Economists and tourism industry experts take into consideration the past economic global crises, the global tourism scare and the way it had an effect on the tourism industry. It has been understood that tourism will not stop but will flow in a different way. There will be a change in the travelling behavior of the people and therefore the tourism & hospitality businesses have to adopt a different business model to survive in this situation.
My take on this – by Rahul Wadhwa
Master in Tourism Destination Management student 2008/2009
The global economic crises of 2008 and all the economic recessions of the past have had the same fundamental reasons that is either an unregulated or an under regulated market. This condition leads to a rise in the speculative and unsecured investments mounting the share market values which ultimately leads to a slump when the real value of shares are found. This is referred to as a correction process by the economists in which a lot of finance is lost by businesses and individuals. During such times governments all over the world have acted swiftly to control the situation.
As tourism industry is an integral part of the global economy so it is evident that it will get affected by the economic breakdown. Most of the travel and tourism involves discretionary expenses so during economic crises people first tend to cover up and conserve for the essentials of living and then look ahead for other things. As learned from the past experiences it has been observed that tourism does not stop at all but there is change in the way people make their travel decisions as they do during the balanced conditions. The tourism and hospitality businesses also suffer a lot of damage and to overcome in such situations they need to adapt a different designed strategic business model by analyzing the requirements and to come up as winners.
The trend among travelers in the short and medium term is spending less on travel. Instead of going for luxury & high end products people will prefer for budget,low cost and value for money goods. The demand for luxury end market is likely to decrease so the tourism and hospitality businesses have to adopt in such a way to service travelers on a tighter budget. Airlines and hotels especially need to rapidly adapt to this trend to do well. In the case of currency shakeout, destinations with favorable currency may benefit .With the surge in the value of U.S dollar and the Euro, the Americans, Europeans and Japanese may resume travelling. The growth seen in the Chinese and Indian outbound market will slow down as the economies are just growing and there will be a growth in domestic and short haul international travel.
However, it has been depicted that people worldwide will continue to earn money and they would want to have a vacation and will travel for all the illicit affairs. People will want to get away from their work and home and go for some type of tours. I think people won’t forget to travel due to the financial outbreak but there will be a shift in the normal pattern and more importantly the tourism businesses that have to overcome these challenges have to think strategically and adapt to different business models.
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