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  • Maditinos-Vassiliadis, 67-76

    MIBES E-BOOK 2008 67

    Crises and Disasters in Tourism Industry:Happen locally - Affect globally

    Zissis Maditinos, Christos VassiliadisDpt of Business Administration

    University of MacedoniaThessaloniki, Greece

    mady@uom.gr, chris@uom.gr

    AbstractMany scholars have noted an increasing number of disasters and crises,which affect the tourism industry, ranging from natural to human influencedincidents. The globalisation of the tourism industry and the fact that theworld is also becoming more interdependent and connected, have led to a newreality for tourism industry, where crises that occur in one single placeof the world can affect tourism activities around the broader area orworldwide.This paper, which is based upon the existing literature, tries to supportthis interdependence of tourism industry and enforces the need for crisispreparedness in tourism involved businesses and stakeholders. For thisreason, the paper presents some alternative approaches of crisis context intourism sector and it uses some well-known cases of crises and disasters,which had significant impacts on the tourism industry, in order finally tounderline the constantly ascending need for crisis and disaster preparationfor tourist businesses.

    Keywords: tourism, crisis, disasters.

    JEL Classification: M19

    Introduction

    Nowadays, tourism is an important economic sector in many countries.Between 2004 and 2020, the World Tourism Organization (WTO) forecasts thatinternational travel will increase from 760 million trips per annum to 1.5billion trips (WTO, 1998). If domestic trips are included, the 2020 totalwill be 15 billion trips per annum. Globally, tourism is a $625 billionindustry, the single largest non-government economic sector in the world(WTO, 2005). Europe registers a falling growth rate from about 4 (theperiod: 1980-2001) to 3 percent (the period: 1995-2020); the regions with adynamic growth rate are all related with Asia. The globalisation of thetourism industry has led to a rapid expansion of tourism businesses on aninternational scale in order to expand their market share andprofitability. As Pforr (2006) points out, the enormous growth tourism hasexperienced in the past 50 years, also as a consequence of technologicaladvancements in sectors such as transportations, Internet etc, whichbrought the worlds many destinations, no matter how far, within reach, hasresulted in a much stronger interconnectedness and complexity within thetourism system and made the industry in many regions around the world animportant factor in their socio-economic development.

    However, these processes have also opened businesses up to a wider set ofglobal risks involved in running businesses at such a scale, asglobalisation is often seen as complex and chaotic (Jessop, 1999). Tourismis often described as a fragile industry in that demand for travel ishighly susceptible to numerous shocks, such as wars, outbreaks of deadlycontagious diseases, incidents of terrorism, economic fluctuations,currency instability, energy crises, and so on. Many scholars have noted an

    mailto:mady@uom.grmailto:chris@uom.gr

  • Maditinos-Vassiliadis, 67-76

    MIBES E-BOOK 2008 68

    increasing number of disasters and crises, which affect the tourismindustry, ranging from natural to human influenced incidents. In recentyears the global tourism industry has experienced many serious crises anddisasters including terrorist attacks, political instability, economicrecession, bio security threats and natural disasters (Boniface & Cooper,2005). The globalization of tourism market is so remarkable that small-scale crises in one part of the world can have a significant impact onother parts of the world. Contemporary crises do not recognize or respectnational borders and do not confine themselves to a particular policy area(say health or energy).

    Tourism is therefore highly susceptible to external factors and pressuresin the wider operating environment. However, tourism is also an importanteconomic sector for many countries and many destinations are dependent upontourism for their growth and survival. This puts increasing pressure onmanagers and planners concerned with tourism to consider the impact ofcrises and disasters on the industry and develop strategies to deal withthe impacts to protect tourism business and society in general. Peopletoday argues that disasters are not acts of God, but failures of humanacts or else management failures (Douglas, 1994).

    Faulkner (2001) argued that there is a lack of research on crisis ordisaster phenomena in the tourism industry, on the impacts of such eventson both the industry and specific organisations, and the responses of thetourism industry to such incidents. Since then 2001 the literature hasexpanded upon these issues. Martin et al. (2005) refer that the literatureon tourism crises has grown considerably in recent years, particularly inthe light of the impacts on destinations of the September 11 events, aswell as the impacts of other political events, natural disasters, disease,crime or war. No matter how far the existing literature has gone, there isa constant need to understand better such incidents and examine strategiesthat can be used to stop or limit their impacts on a growing and importantindustry sector.

    Crises & Disasters in the Tourism Industry

    The term crisis is widely used in several scientific contexts (i.e.medicine, psychology, economy, society etc). It originates from the Greekword krisis, which means judgement, choice or decision. The use of theterm, however, varies depending on the context in which it is being usedand the researchers discipline. In the organizational literature, crisisis defined as follows: a low-probability, high-impact event that threatensthe viability of the organization and is characterized by ambiguity ofcause, effect, and means of resolution, as well as by a belief thatdecisions must be made swiftly (Pearson and Clair, 1998). Pearson andMitroff (1993) suggest that crises are events which pose threats to theviability of organisations. Seymour and Moore (2000) suggest that crisiscan threaten reputation, lives and the survival of an organisation.Faulkner (2001) argues that crises or disasters can be described as suddenchallenges which might test the organisations ability to cope. All theexisting definitions and approaches converge to that crisis is anunpleasant and difficult situation that has to be managed as effectively aspossible. Contemporary crisis management approaches have supported thatbusinesses and stakeholders involved in crisis situations must be benefitedby the experience.

    Crises are now occurring more frequently, possibly as a result of greaterpressures on business and industry from global market demands, and they mayhave a much more severe impact. Elsubbaugh et al. (2004) suggest thatcrisis is an inevitable part of business today and cannot be separated fromregular business activity. Understanding crises and disasters, their

  • Maditinos-Vassiliadis, 67-76

    MIBES E-BOOK 2008 69

    lifecycle and potential impacts and actions can help in the development ofstrategies by organisations to deal with such incidents, and stop or reducethe severity of their impacts on business and society, despite theircomplexity.

    As far as tourism is concerned, Laws and Prideaux (2005) argue that theterm crisis in tourism industry usually refers to an event that leads to ashock resulting in the sudden emergence of an adverse situation. McKercher& Hui (2004) point out that, crises are inevitable, episodic events thatdisrupt the tourism and hospitality industry on a regular basis and Coles(2004) adds when not in crisis, destinations are in an extended programmeof practically pre-event-limbo, almost waiting for the important triggerevent to take place.

    Parsons (1996) gave a very interesting view that can be used for theclassification of tourism crises. He suggested three types of crisesdepending on their gestation period: a) Immediate crises, where little orno warning exists therefore organisations are unable to research theproblem or prepare a plan before the crisis hits, b). emerging crises,these are slower in developing and maybe able to be stopped or limited byorganisational action, and c) Sustained crises: that may last for weeks,months or even years. Similar to Parsons classification is the one ofSeymour and Moore (2000), who have suggested that crises are of two types:the cobra type, which strikes suddenly and the python type which occursgradually. Karagiannis et al.(2006) suggest an alternative aspect toclassify the crises that affect tourism industry, using the factor of humaninvolvement in the crises cases (direct, indirect, no human involvement).Similar is the classification of Sausmarez (2007), who argues that crisesare traditionally classified as either natural (hurricanes and earthquakes)or man-made (industrial accidents, plane crashes and terrorist events).

    But which are the types of crises that although happen locally, affect theglobal tourism industry? Beirman (2003) focuses in five main reasons thatresult in a destination crisis:

    international war or conflict and prolonged manifestations of internalconflict,

    a specific act or acts of terrorism, especially those directed at oraffecting tourists,

    a major criminal act or crime wave, especially when tourists aretargeted,

    a natural disaster, such as an earthquake, storm or volcano, causingdamage to urban areas or the natural environment and consequentlyimpacting on the tourism infrastructure,

    health concerns related to epidemics and diseases; these may be diseaseswhich impact on humans directly or diseases affecting animals, whichlimit access to tourist attractions.

    Lepp and Gibson (2003) through their literature review pi

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