Impacts of global economic crisis on tourism destinations – A true story (entry essay competition)

This essay was written by Borislav Hadzhiev from Bulgaria as entry for the essay competition. The winning article by Silvija Prancane can be found here.

The ECONOMIC CRISIS, the big deal, the craze that we all talk about for so long, and even if we don’t, we listen about it. The economic crisis is to blame, is to blame for everything not because it is the cause of all our problems but more because we people love to blame, love to blame someone, if there is no one, something, for all our treble, problems, issues or dilemmas. Now the whole world is suffering-changing-adjusting because the GEC (Global Economic Crisis) some industries more than others but still. Since everything is connected, the impact on tourism industry is because the industries interrelated directly and indirectly, and that is simply because the people that are traveling are “a bit” more than the people that are working in the tourism industry.

So, how is the tourism industry affected by the GEC? I was a part of a group traveling in different countries like Australia, Cambodia and Indonesia, doing a research like an assignment for our field work for NHTV; I had the opportunity to talk to major tourism stakeholders in different situations and to discuss this question. Because of this reason I also had the perfect opportunity to observe the effect of the GEC on tourism in tree different countries; developed country, a country from the “third world” and developing country. The developed country, Australia. They knew about the GEC they saw what was happening in Europe and USA and they were preparing for the crisis to come, but the tourism industry, well the problem wasn’t the GEC. So the Australian Tourism Industry wasn’t affected by the GEC because the GEC wasn’t affecting the country at that time. But then, like we said tourism industry is not about the people employed but about the people who are traveling and some of the people who are traveling to Australia are form countries from Europe and USA, and they were affected form the GEC! So the Australians are preparing themselves for the GEC and are expecting more visitors from the countries that are negatively affected! On the other hand the bigger half from the tourists in Australia are domestic travelers. If that is the answer, then the impact on the tourism destination will occur when the GEC reach the country, supposable! Further one we move to the second country Cambodia, a “third world country”. Over there the situation is, well let’s just say different. Poor country, chip country, but also a country rich on nature and historical wonders, country with huge potential for tourism, attractive for foreign investments. Here the question how the GEC affects the tourism destination has slight different answer. Unlike Australia in Cambodia there is no domestic traveling, or at least there is no statistics about domestic traveling, and also Cambodia was marked by the IMF like one of the countries which will be affected the worst by the GEC. So Cambodia is all about foreign visitors and tourism was down by 30-40 percent for the first 3 months of the year, and all the owners were blaming the GEC. Everyone were pointing out the crisis like the major factor for the visitors decline, even though when the question about the GEC was asked the answer was “the thing that the Germans talk about”, still the people were acknowledging the crisis. So the GEC was to blame for the arrivals decline, and the impact was negative! There is something else about Cambodia, almost all the tourism is situated in Seam Reap around the Angkor complex and traveling across the country is hard and time consuming. Furthermore the country is torn apart from corruption, huge Korean monopole, and the fact that there is just only one Air Company flying to Cambodia makes the ticket the most expensive in the world (price according flight miles). Also Cambodia is not popular as a single destination, people always combine their trip with the neighboring countries, or just pass by Cambodia on their way from Thailand to Vietnam or the other way around. So the Global Economic Crisis is to blame for the visitors decline, and the people are just waiting for the G-20 to solve the problem with the crisis, the economic situation to become stabile and the people to start arriving again in Cambodia!

Continuing with our research the group moved to Indonesia, in Bali for a month over there we stayed in luxury villas with private pools for 10 Euros per night, if the crisis was the reason for the low prices, well then thank you crisis! This tourism destination was different from the previous two destinations; it was mature, well known, popular, even awarded best SPA destination, so tourism was all over Bali. We had our time to explore the island, to visit the attractions to talk to people on the both side of the tourism industry the tourists and the managers of the hotels. Tourism is changing constantly and Bali appeared to be very superior at adapting changes, even during the GEC four hundred room five star resorts were 75 percent occupied on prices way higher than 10 Euros per night. In Bali managers alongside CEOs were aware of the changes that were brought to them. They saw the changing markets, they saw how the Americans stopped to travel but also saw uprising countries that started to travel like the Russians and the Chinese, they saw how the business tourism went down, but they also saw the traveling families, they saw decline in foreign visitors but also saw the potential of the domestic market. Like we said Bali was mature tourism destination facing negative impacts of the mass-tourism and over development, also the country faced disasters, terrorism bombing and tsunamis, so the GEC is not the only crisis Bali is dealing with. Tourism numbers were down from the start of the year, but the forecasts ware positive and the reason for luxury villas costing us 10 Euros per night was the GEC or the fact that during the past 2 years there were built more than 1500 new villas?                                                       

 The impact of the Global Economic Crisis on the tourism destinations, it is negative, it is negative because people are losing money and are getting poorer and not just the Russian billionaires which lost 389 billions US dollars in total since the start of the GEC (according CNN news broadcasting), but even me and my friends at my home town (which is a ski resort) with population of 6000 people. So the impact is negative because people are not traveling that much as they used to but is that the main reason for the changes of the tourism industry? People will not stop to travel, they are still traveling but not that often and not that far, if they are not traveling on business trips they will travel whit their families and even if the travelers are not from Europe or USA they will be from Asia and if they are not traveling abroad they will travel in their country. So the tourism industry is changed and it is changing constantly, but is the reason for that the GEC or it is just like the first law of economics says “the economy is self-adjusting” and the same is valid for tourism? The tourism industry is all about the costumers so it will always adjust to people’s needs and wishes, and if is not the GEC it will be some other factor or like it usually series of factors that will be the cause for the change. The GEC is temporary and after the situation is stable again everyone will start to travel again and like is now it will be then, it will be up to the managers and marketing departments to attract the tourist too particular destinations.