There have been numerous incidents in one or more countries in the past that led to sudden and unexpected reductions in demand for tourism services and confronted travel businesses with an economic environment of high uncertainty. However, the current financial and economic crisis appears to be of a larger dimension than most other crises before, and numerous experts around the globe agree that the present economic slowdown has the potential to become one of the most challenging and transformational disturbances on a supranational level since the Great Depression. Predictions of future developments are vague and can only be educated speculation at best, yet for the tourism industry the initial effects of this first major crisis of the globalization era are already clearly perceptible. Drawing on an extensive review of already existing literature, this paper explains the various milestones during the period that led to the 2007-2009 global financial and economic disorder, and subsequently considers a choice of selected key implications for the tourism industry and associated businesses. The aim of this paper is therefore to provide an academically substantiated reference guide for market participants and policy-makers alike, with the ultimate purpose of making a contribution to reduce the number of cases where wrong decisions lead to major difficulties or even the failure of a destination or an individual business. Results of the research indicate that the identified impacts are likely to intensify throughout 2009 and 2010, and that the crisis will most likely also entail fundamental changes for the industry on a long-term basis. In particular, it was found that in the medium term decreased public funding for tourism projects and restricted access to capital are likely to force many travel businesses into serious liquidity problems. This may cause a series of reactions, including widespread workforce reductions and severe cuts in the quality of the provided services. Besides, the crisis is likely to have considerable effects on the way leisure and corporate travel is conducted, as for instance shorter and less frequent trips or a stronger tendency towards cost containment. However, the paper also points out that every crisis embodies a great number of opportunities and provides an analysis of a range of selected chances for destinations and tourism businesses. [...]
Inhaltsverzeichnis (Table of Contents)
- 1 INTRODUCTION
- 2 HOW THE 2007-2009 GLOBAL ECONOMIC CRISIS EVOLVED
- 2.1 Recent historical background
- 2.2 The problem of sub-prime lending
- 2.3 The end of an era
- 2.4 Effects of the financial crisis on the real economy
- 3 RESEARCH METHODOLOGY
- 4 IMPACTS OF THE CRISIS ON THE TOURISM INDUSTRY
- 4.1 General aspects
- 4.2 Key negative impacts
- 4.2.1 Decreased public funding for tourism projects and infrastructure
- 4.2.2 Restricted access to capital
- 4.2.3 Excursus: Unemployment in the tourism industry
- 4.2.4 Changing patterns in leisure travel
- 4.2.5 Changing patterns in corporate travel
- 4.3 Selected possible opportunities
- 4.3.1 Shift in source markets
- 4.3.2 Intensification of the trend towards 'Smart tourism'
- 4.3.3 New spirit of companionship
- 4.3.4 Other opportunities
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper critically analyzes the 2007-2009 global financial and economic crisis and its implications for the travel industry. The objective is to examine how the crisis unfolded, its effects on the real economy, and its specific impacts on various aspects of the tourism sector.
- The evolution of the 2007-2009 global economic crisis.
- The impact of the crisis on the tourism industry.
- Negative impacts on the tourism industry (e.g., decreased funding, restricted capital access).
- Potential opportunities arising from the crisis within the tourism industry.
- Changes in travel patterns (leisure and corporate).
Zusammenfassung der Kapitel (Chapter Summaries)
Chapter 1: Introduction provides a brief overview of the topic and its significance.
Chapter 2: How the 2007-2009 Global Economic Crisis Evolved details the historical context, the sub-prime lending problem, the subsequent financial market collapse and its impact on the broader economy.
Chapter 3: Research Methodology describes the methods employed in the research for this paper.
Chapter 4: Impacts of the Crisis on the Tourism Industry explores the general effects of the crisis on the tourism sector. It examines key negative impacts, such as decreased public funding and restricted access to capital, and discusses changes in leisure and corporate travel patterns. It also highlights some potential positive opportunities arising from the crisis, such as shifts in source markets and the intensification of 'smart tourism'.
Schlüsselwörter (Keywords)
2007-2009 Global Financial Crisis, Economic Crisis, Tourism Industry, Travel Industry, Sub-prime Lending, Financial Markets, Economic Impact, Tourism Impacts, Leisure Travel, Corporate Travel, Public Funding, Capital Access, Smart Tourism.
Frequently Asked Questions
How did the 2007-2009 crisis affect the tourism industry?
The crisis led to a sudden reduction in demand, restricted access to capital for travel businesses, and a decrease in public funding for tourism infrastructure and projects.
What were the changes in travel patterns during the crisis?
Both leisure and corporate travel saw shifts toward shorter, less frequent trips and a stronger tendency toward cost containment and "smart tourism."
What is "Smart Tourism" in the context of the economic crisis?
Smart tourism refers to an intensified trend where travelers seek better value for money and destinations use innovative strategies to remain competitive during economic slowdowns.
What are the long-term implications for travel businesses?
The crisis forced fundamental changes, including widespread workforce reductions and a need for more resilient financial management due to liquidity problems.
Does the crisis offer any opportunities for destinations?
Yes, the paper points out that crises embody opportunities such as shifts in source markets and a new spirit of companionship among market participants.
- Quote paper
- MSc, MA Manuel Kaar (Author), 2009, A critical analysis of the 2007-2009 global financial and economic crisis and its implications for the travel industry and associated businesses, Munich, GRIN Verlag, https://www.grin.com/document/186660
