9/11 - A Year On - Report

26th Nov 2002

In an analysis of tourism performance for 2001 the World Tourism Organization noted that prior to September
11 th a somewhat smaller growth than that recorded in 2000 was anticipated in international arrivals. This
prediction was based on the weakening economies of many OECD states and the concomitant reduced
consumer and business confidence. The events of 9/11 aggravated this situation and heralded a major crisis
from which the industry is slowly recovering.
The WTO estimates that international travel declined by 0.6 percent in 2001 to a total of 692.7 million.
International arrivals to the Americas region 1 registered among the largest declines for 2001 (-5.9%), second
only to South Asia (-6.3%). Despite this scenario, tourism has traditionally been a resilient industry and analysts
worldwide are optimistic that barring major escalations of the Middle East crisis the industry will return to
acceptable levels of growth by 2003.
People travel when times are “good”, when there is confidence in their economic and personal security. Since
September 11 th confidence in both these variables are under some stress as attempts to revive the world’s
economy and return to some normalcy in the travel market is proving to be challenging. The world’s largest
economies in Germany and the United States are both struggling with an increase in joblessness and low
consumer and business confidence. Analysts now debate the possibility of the world experiencing a double dip
recession. The current situation is further fueled by big corporations’ scandals in the US, which do little to
encourage investment in the US stock markets. While Consumer spending and incomes are relatively stable,
consumer and business confidence levels continue to record month over month declines. There is the real fear that a soft US economy will have long ranging impacts on the global economic climate.
The WTO in a September release on world tourism one year after 9/11 noted the difficulty in assessing the
situation of the tourism market in 2002 given the changes that have occurred in holiday consumption. Latest
travel surveys suggest that travel consumers are feeling more comfortable traveling abroad but remain concern
over the state of their domestic economy. Security is still of primary concern to the consumer, who has made a
conscious attempt to select destinations close to home or travel domestically. 2 Business travelers are exercising
their option to travel only when necessary and supplementing where possible the business trip with technology
options such as video conferencing/the internet net meetings. Overall the travel trade has reported shorter
booking windows, from around an average of six weeks to a month, making it difficult to assess future
performance of the sector.
It is important to analyze the performance of the Caribbean Tourism industry within the context of global
occurrences. Every destination world wide is reporting difficult times. Examples of some of the more publicized
destinations are described in the subsequent paragraphs.
According to the Office of Travel and Tourism Industry in the United States, prior to September 2001, total
visitor arrivals were already down 3% compared to arrivals recorded over the same time period in 2000. This
decline was attributed to a strong U.S. dollar and a global economic downturn. The Director for the Office of
Travel and Tourism Industries (OTTI), Helen Marano noted that “Unquestionably, the U.S. suffered its worst
single year of decline given the combination of a global economic slump and the September 11 attacks. Few
industries could maintain growth in such a climate”.
Tourism in the United States is a US$93 billion industry employing 18 million persons. In 2001- year end travel
contracted 11% to register 39.8 million arrivals. In the first quarter of 2002 arrivals declined by 12.2 percent
overall. Arrivals from long-haul destinations registered significant declines notably Europe, which was down
22.1 percent, Asia down 25.6 percent, Middle East -27.8 percent and Africa -20.4 percent. Fear of racial
profiling and reprisals in the US was widely associated with the decline in arrivals from Africa, the Middle East
and Asia.
Tourism in Australia accounts for 5 percent of its GDP and six percent of its workforce. Since September 11 th ,
losses in the industry are estimated to be around US$1.10 billion and cost up to 12,000 jobs. Australia`s major
tourists markets showed dramatic plunges in the 12 months to July, with visitors from neighboring New
Zealand dropping by 25.5 percent, Britain 17.7 percent and the United States 8.4 percent, according to the
Australian Bureau of Statistics overall, international visitor arrivals have fallen 8.4 percent to 409,400 in the
year to July, from 446,900 tourists for the same period last year, the bureau said. Hotels are estimated to be
operating at around 40% occupancy.
Tourism officials said that the result was due to a global economic downturn in the tourism industry since Sept.
11. Tourism Task Force chief executive Christopher Brown also lamented that current marketing approaches to
woo tourists to Australia were not delivering.
Europe is the most visited tourist region in the world hosting as many as 400.3 million visitors in 2001. Around
two million tourism related enterprises in the countries of the European Union account for an estimated 5 % of
both GDP and employment, i.e. more than 8 million jobs. Tourism also generates a considerable amount of
inter- industry activity.
The aftermath of the terrorist strikes on Europe`s inbound tourism industry was severe. By the beginning of
September 2001, European destinations were already feeling the effects of a weakening American economy and
the repercussions of foot and mouth in the UK. Many companies were relying on September to make good
shortfalls earlier in the year. The first half of September marks the start of the high season for American
visitors, a season which continues through October. The terrorist attacks led to the suspension of flights from
the United States for one week, cancellations following represented almost 5% of the total arrivals to Europe
from North America for the year. Amongst European Tour Operator Association members alone, this amount ed
to over half a million visitors not arriving, who would have account ed for a billion Euros of spending. The
repercussions of this disaster resonated throughout the European service economy. Millions of jobs are still at
risk in Hotels, Shops, Restaurants, and throughout the transport sector.
One year after the events of 9/11, France, Spain, Sweden and Britain are among countries still seeing fewer
Americans than usual. Among those Americans who are traveling, the growing strength of the Euro, the
European currency now hovering around parity with the U.S. dollar, is eroding American tourists` buying
power. But many still cite September 11 as the biggest reason why some would-be tourists are staying home.
Overall tourist numbers in France are likely to be down in the 2002. Summer, the most important time for the
French industry, had a mixed July but August showed a revival in the sector. Americans and Asians were fewer
in 2002 than they have been in the past, however 2003 is expected to be a good year. There was some increase
in the numbers of Dutch, German and Belgian tourists, attracted largely due to the good rail links between these
countries and France.
For more details see www.onecaribbean.org


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