Abstract
The objective of this report is to review, analyse and conclude on the impact of terrorism on tourism, which includes actual movements of tourists, spending and receipts, as well as the consequences for key industry players, such as airlines, airports, hotel companies, tour operators and destinations. It is should be realised that the impact of terrorism on tourism is not limited to the trend in arrivals in a destination immediately following the occurrence of an incident, but extends to the “reaction to the reaction” of authorities and private sector tourism enterprises to the threat of terrorism.
Examples would be restrictions on hand luggage in airports or the requirement for biometric passports. It should also be born in mind that just because arrivals at a destination continue to progress or do not decline following a terrorist act does not necessarily mean that the incident had no impact. Though difficult to estimate precisely, it is often a question of opportunity loss in terms of arrivals and receipts for the country in question. This loss can be roughly estimated through comparing a country to its sub-region or by extrapolating what the gain in arrivals and receipts would have been without the occurrence of the terrorist act, based on the trend prior to the incident.
Table of Contents
- IntroductionDefinition of terrorism
- Terrorism distinguished from warfare, revolutions and criminality
- Most terrorist acts are politically motivated
- Figure 1: Types of terrorist group, 1968-97
- Most terrorist incidents involve bombings
- Figure 2: Tactics used in terrorist incidents, 1968-2007
- Bioterrorism
- Data Sources
- Overview
- Recent trends in international travel
- Growth in international travel slowed to snail' s pace
- Europe and the Middle East less affected
- Figure 3: Outbound trips by region 1990-2005 (in millions)
- North America worst affected
- Figure 4: Trend in arrivals by region and sub-region, 1990-2005 (in millions)
- Terrorism as a Post-War Phenomenon
- Figure 5: Terrorist incidents, by region, 1 January 1968 to 23 March 2007
- Few terrorist attacks directly target tourists
- Terrorist activity impacting tourism worldwide
- Figure 7: Terrorist incidents by region, 1 January 1968 to 23 March 2007
- Figure 8: Terrorist incidents, by selected country/region, 1 January 1968 to 23 March 2007
- Africa
- Americas
- Asia Pacific
- South Asia
- Sri Lanka
- Indonesia
- Philippines
- Thailand
- Europe
- Eastern Europe
- Middle East
- Case Studies: Terrorist Incidents Affecting Tourism
- Africa
- Mombassa, Kenya -- November 2002
- Little impact on arrivals
- Figure 9: Inbound arrivals and receipts in Kenya, 2000-05
- Official warnings against travel to the country
- Morocco -- Casablanca bombings, May 2003
- Figure 10: The trend in arrivals in Morocco, by nationality, 2001-06
- Figure 11: The trend in hotel overnights in Morocco by nationality, 2001-06
- Terrorism back on the agenda
- Effect attenuated
- Danger of losing the French market
- Tunisia -- April 2002 attack on Djerba
- Tunisian government forced to admit that it was terrorism
- Clearly the work of outsiders
- Figure 12: Incoming arrivals to Tunisia, 2000-05
- Different behaviour of incoming markets
- Figure 13: Incoming arrivals in Tunisia, by selected national origin, 1995-2004
- Americas
- The impact of 9/11 is still being felt
- Arrivals fell by 20% between 2000 and 2003
- Overseas arrivals were still 22% below 2000 levels in 2004
- All major European markets down by >20% except the UK
- Figure 14: Foreign arrivals in the US by major incoming market, 2000-04
- Foreign arrivals still below year 2000 levels in 2006
- Figure 15: Trend in the top-ten US incoming markets, 2000-06
- US outbound travel
- Figure 16: Total US outbound travel, broken down between North America and overseas, 1995-2005
- Outbound travel to Europe
- Figure 17: US outbound travel to Europe by country, 1995-2005
- Outbound travel to the Caribbean and Latin America
- Figure 18: US outbound travel to the Caribbean and Latin America by country, 1995-2005
- Outbound travel to Africa and the Middle East
- Figure 19: US outbound travel to Africa and the Middle East by country, 1995-2005
- Outbound travel to Asia and Oceania
- Figure 20: US outbound travel to Asia and Oceania by country, 1995-2005
- Inbound receipts
- Outbound expenditure
- Figure 21: US international travel and tourism balance of trade, 2000-06
- Influence of 9/11 on German travel plans
- Figure 22: Survey: Answers to the question, "Will the 9/11 terrorist attacks in the US influence your next holiday trip?", 2001-02
- Figure 23: Survey: Further questions asked to those who admitted that their travel plans were influenced by 9/11 or "didn' t know", 2001-02
- Asia/Pacific
- India/Kashmir
- India' s incoming is only a tenth of China' s
- Figure 24: International arrivals in India, 1995-2006 (' 000)
- Indonesia
- Bali
- Figure 25: October 2005 Bali bombing deaths and injuries
- Figure 26: The ten leading incoming national origin markets to Bali, 2001-05
- Marriott Jakarta (2003)
- Australian Embassy blast
- Terrorism' s impact on Indonesia
- Figure 27: Visitor arrivals to Indonesia, 2000-05
- Impact by source market
- Figure 28: Incoming arrivals to Indonesia by selected region/country
- Comparison of Bali 2005 and the 2004 attack on the Australian Embassy
- Figure 29: Visitor arrivals to Indonesia by month 2005 vs 2004
- Travel warnings still in force
- Philippines
- Figure 30: Trend in tourist arrivals and receipts in the Philippines, 1998-2005
- Travel warnings in force
- Sri Lanka -- Tamil Tigers
- Flights to Sri Lanka suspended
- Figure 31: International arrivals in Sri Lanka, 1995-2006 (' 000)
- Travel warning in effect for the north and east
- Thailand
- 2006 New Year bombings in Bangkok
- Figure 32: International arrivals in Thailand, 1995-2005 (' 000)
- Europe
- France
- Corsican terrorism -- an ongoing problem
- Figure 33: Corsican hotel performance, 2003-04
- Israel
- Worst hit by 9/11
- Figure 34: Arrivals in Israel and the southern Mediterranean region, 1995-2006
- Spain
- ETA
- Incidents not restricted to the north west
- Ceasefire broken
- The cost of Basque terrorism
- Businesses forced to pay for ' protection'
- Inward investment impacted by terrorism
- Direct impact on tourism
- Madrid 2004
- Effect on tourism attenuated
- Turkey
- Tourist sites targeted
- Figure 35: Inbound arrivals and receipts in Turkey, 1995-2005
- UK
- London bombings, July 2005
- Figure 36: The details of the July 2005 London bombings
- Figure 37: Visitor arrivals in the UK by selected month, 2005-06
- Figure 38: Trend in forward booking to the UK by selected month, 2005-06
- Behaviour of individual incoming markets
- Figure 39: Incoming visits, overnights and spend to London by selected country, 2000-05
- Ryanair hit by the blasts
- Hotel performance following the July 2005 bombings
- Figure 40: UK hotel performance, July 2005/July 2004
- Provinces benefited
- Figure 41: UK hotel performance, August 2005/August 2004
- August 2006 terrorism plot
- Fears that some plotters were still at large fuelled the chaos
- Links with prior incidents
- Terror alerts raised to the highest level
- US airlines warned in advance
- Chaos at London airports
- France and Spain impacted too
- Discovery of the plot comforted those advocating tighter controls
- Liquid explosives hard to detect by existing scanning equipment
- Easy to make a liquid bomb
- Tighter controls and more delays at airports
- EU restrictions
- The financial impact of the August 2006 terrorism plot
- IHC benefited from the terrorist scare
- Middle East
- Egypt
- Luxor was targeted a decade ago
- The impact was significant, but so was the rebound
- Terrorists have followed the trend in tourism development
- Seaside resorts have been the more recent targets
- Taba, October 2004
- Sharm El Sheikh, July 2005
- Dahab, April 2006
- Immediate impact on the travel trade of the Dahab attacks
- Terrorism becoming more decentralised
- Until Taba, it was just talk
- Video-taped declarations of the suicide bombers
- Key operatives killed in police shoot-out
- The impact of Sinai terrorism
- Figure 42: The trend in Egyptian incoming arrivals and receipts, 1995-2006
- Growth in tourism slowed by terrorism
- Comparing Sharm El Sheikh to Luxor
- Similar, but with important differences
- The composition of the incoming market has changed
- UK market takes over the number one spot
- Jordan
- Figure 43: The trend in Jordanian incoming arrivals and receipts, 1995-2006
- Reaction of the Tourism Industry and Authorities
- Airlines
- The impact of 9/11 on airlines was immediate and direct
- US domestic market worst hit
- IATA promotes the harmonisation of air travel security standards
- The "Simplifying Passenger Travel" initiative focuses on ' unknown' passengers
- Key opportunities
- Biometrics implementation
- Risk assessment using biometrics
- Link biometrics to registered traveller programmes
- Advance passenger information (API)
- Security Check Lane Management
- Common User Self Service (CUSS)
- E-tickets implementation
- Communication of SPT recommendations
- SAS rolls out biometric security
- The government should pay
- SAS is already experimenting with biometric security checks
- In-flight security standards
- Security of the flight crew compartment
- Aircraft search procedure checklist
- Training programmes
- Flight and cabin crew security training in the US
- National Strategy for Homeland Security (NSHS)
- Figure 44: List of basic crew member security training elements required by law, 2005
- The TSA offers advanced self-defence training for air crews
- Figure 45: List of advanced voluntary crew member self-defence training elements required by law, 2005
- Initial reactions and suggested improvements
- Figure 46: Summary of stakeholder concerns about the TSA' s prototype advanced voluntary self-defence training and actions taken by the TSA in response to the concerns
- Airports
- Suicide hijackers have necessitated a re-think of airport security measures
- Deficiencies in conventional pre-departure screening processes
- The human factor must be integrated
- Traditional screening designed to detect metal
- Incremental security costs for EU airlines
- Six-month trial for Simplifying Passenger Travel at Hong Kong International Airport
- Application procedures
- Airports call for global standards
- BAA
- BAA to spend £9.3 billion on airportsThe growing security industry
- Destinations (including governments)
- Australia
- China
- Germany
- Indonesia
- Philippines
- US
- Figure 47: Question #6 of the Discover America Partnership Travel Poll
- Passport restrictions on US outbound travel
- Figure 48: US passports issued and applied for, 1996-2006
- Figure 49: Service charges for American Passport Express
- The new rule only applies to air travel
- Travel advisories
- Announcements concerning travel threats and risks
- Co-operation with affected countries
- Australia warns against travelling to ASEAN venue
- Hotels
- Hotels make tempting ' soft' targets
- Hotels slow to adopt necessary security measures
- Risk varies according to location
- Employees can be a major source of risk
- Food and beverage operations merit particular surveillance
- Using technology to counter terrorism
- Video surveillance at the Wynn Las Vegas Casino Hotel
- Dogs can be effective and ' guest-friendly'
- Conferences and entertainers are charged extra for the dogs
- Saving guests time at the airport
- American Hotel and Lodging Association joins NYPD ' operation nexus'
- Tour operators
- Immediate effect of 9/11 on European outbound markets
- Cost cutting
- Tour operators forced to make concessions
- TUI and Djerba
- The Iraq war
- Istanbul bombings
- The reaction of a US outbound operator
- Insurance
- Business interruption
- Workers' compensation
- Terrorism risk is concentrated and non-random
- Figure 50: Traditional requirements for insurability
- Lack of coverage for terrorism
- Figure 51: Government-backed and national terrorism insurance programmes, 2007
- Australia
- Figure 52: Premium structure for reinsurance
- Austria
- France
- Figure 53: The French GAREAT terrorism insurance scheme, 2007
- Germany
- Figure 54: Annual aggregate stop-loss terrorism risk coverage in Germany, 2006
- Israel
- South Africa
- Spain
- Switzerland
- The UK -- Pool Re
- Figure 55: Industry-wide retention amounts for Pool Re by year
- US
- Most US businesses do not buy terrorism insurance
- ' Adverse selection' a problem
- Limitations and exclusions could limit payouts
- Uncertain future for terrorism insurance in the US
- Without TRIA, financing hotels becomes more difficult
- No move yet in Canada
- Terrorism risk market is broadening
- Airlines
- Most governments have withdrawn coverage
- The problem of WMD
- Trends in the cost of premiums
- Passenger liability
- Premium calculations are not standardised
- Air travel is getting safer
- Insurers' role in enforcing safety standards
- Airports
- Increased cost of terrorism insurance for hotels
- Terrorism insurance still a small percentage of revenues, but could rise significantly
- The question of liability
- Liability for repair
- What if the hotel is ' appropriated' ?
- Economic loss
- Liability towards guests
- To insure or not to insure....
- Travel insurance and terrorism?
- What Next?
- Terrorism still on the rise
- Figure 56: Trend in terrorism incidents by region, 2000-06
- Iraq is a training ground
- Increased risk for local companies
- Tourists becoming more resilient
- Keeping things in perspective...
- New outbound markets less sensitive to terrorism risk
- Which is the greater threat: terrorism, or our reaction against it?
- Some indication of inbound reforms on the way

