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Saturday, January 22, 2011

How Does Political Unrest Impact Tourism?

2010 was a good year for tourism worldwide, with much of the uptick in Asia. According to a new report from the United Nations World Tourism Organization, 2010 saw 935 million people traveling (both for business and leisure) internationally, up 6.7% over 2009, but only 2% above the pre-recession levels of 2008. Obviously, it's a sign of the rebounding economy. Europe's tourist industry-- like it's economy-- was sluggish (up 3%), despite political stability. North America, where the dollar is still cheap, saw a healthy increase (8%), even if tourists are being advised to stay away from dangerous parts of the country like Arizona. The report attributed a slowdown in tourism in Mexico to the impact of swine flu, rather than drug-violence and out-of-control corruption.

Last week, we looked at the deteriorating tourist situation in Tunisia, with tourists being evacuated and flights being canceled because of the political situation there. Today, with reports that the once much feared Tunisian police have been joining the protestors in Tunis, the tourism industry is still uncertain about which way things are going to go for that country's tourist industry. At first a country that markets itself as a comfy, apolitical Mediterranean beach resort saw only cancellations and heard the giant sucking sound of a crucial foreign currency provider going down the drain. Optimists-- like Tunisia's ambassador to Spain-- see the successful revolt as an eventual boost for tourism there.
"Tourists were a bit worried," Ambassador Mohamed Ridha Kechrid conceded in an interview on the opening day of the five-day international tourism trade fair, Fitur, in Madrid.

"Now order has been re-established and from now on tourists can come back to Tunisia," he said.

"There was a crisis of confidence, which is bad for everyone, for Tunisians, for foreign investors and of course for tourists," he added.

But once democratic elections have been organized "Tunisia will be even more beautiful, more credible... and this change will be beneficial for Tunisian tourism and for the economy."

And the UN World Tourism Organisation's Secretary General Taleb Rifai says the industry there should recovery quickly.
Rifai noted that tourists left "in a speedy and regular manner," but many said they would return once the situation returns to normal.

"The history, the infrastructure and the stakeholders in Tunisia are entrenched enough to be able to recover rather quickly," he said.

"Of course, how quick this would be is very much dependent on the political developments that are unfolding," he said, noting that a new government is to be announced and new elections held.

"As far as tourism is concerned, we think that in the medium term, not the long term, Tunisia will come back to what it was."

It certainly has come back strong in Thailand since the collapse of the tourist industry there in 2008-'09. Less than a year ago we were reporting how the tourist industry was still falling apart in the face of continuing political turmoil. This year tourist arrivals were up by 10.8%!
Overall, arrivals in the first nine months of the year grew by 13.3% y-o-y, an impressive recovery from the 5.0% fall in arrivals experienced in 2009.

It is a positive sign that Thailand’s tourist industry has recovered so strongly from the 2008-2009 downturn and is testament Thailand’s ongoing attractiveness as a tourist destination, despite the sporadic outbreaks of social unrest. Much of this unrest has been concentrated around Bangkok, with the coastal tourist areas largely unaffected. As such, we expect tourist arrivals will have continued to pick up, with the high season around Christmas providing a good end to the year.

In a few weeks Roland and I are going down to Mexico for a few days and we decided to spend the time in one of our favorite cities there, Guadalajara. I haven't seen any reports of violence there but the prices were unbelievably low. Airfairs were cheap and hotel rates were phenomenal. The rack rate for the place we stayed last time is around $900/night for a suite. We only the most modest bargaining, we booked it for less than $200/night this time! That's the other side of the impact of violence on tourism, which is still disastrous in Mexico
Mexico’s drug wars lead the week’s financial news again as the city’s wealthiest city, Monterrey, was hit by a spate of 23 killings along with one woman dying of a heart attack upon witnessing a massacre in the city.

Home to some of Mexico-- and the United States’ biggest companies, including Cemex (CX) and General Electric (GE), Monterrey’s income is double the national average. The state of Nuevo Leon, of which Monterrey is the capital, however, has seen at least 60 killings in 2011 alone.

The violence is not confined to drug cartels and that is what is worrying business leaders. A US company executive was abducted, beaten and robbed of his armored car earlier this year while both Fitch and Standard & Poor’s both downgraded the country’s credit rating at the end of 2009, citing drug violence.

Not-so Accidental Tourists: While cities such as Juárez and Tijuana on the northern border are used to the violence, Monterrey and Oaxaca-- which saw the third Mexican mayor killed in just the first two weeks of 2011-- are slowly becoming accustomed to it, pushing out business and tourism.

Evidence of this was news that three cruise lines, Royal Caribbean Cruises, Norwegian Cruise Lines and Carnival Corp, announced they would be ending or at least scaling back trips to Mexico from California. While none of their destinations have been affected by the drug violence, customers, they claim, aren't distinguishing between regions of Mexico and are put off the country as a whole by news of violence.

While international tourism may be dropping, there are signs that domestic tourism, or at least travel, is on the up, with the news that InterJet, a low-cost domestic carrier, signed a contract to buy 20 Sukhoi-SuperJet aeroplanes for $650m. The first deliveries are scheduled for the second half of 2012. Flights on the new planes are likely to cover Toluca to Aguascalientes, San Luis Potosi and Querétaro.

Still a problem in Madagascar though-- where only a third of tourists expected are visiting the country and where a new problem is looming for tourism: Somali pirates expanding their operations south!


Tourism, which brings in aover $10 billion annually, accounts for almost 12% of Egypt's gross domestic product and directly accounts for close to one in 8 jobs. Roland and I had just arrived in Egypt in 1997 on the day after over 50 tourists were butchered in Luxor. The country emptied out of tourists and we had the whole place to ourselves. It was totally awesome for us-- problematic for the Egyptians. Right now the Egyptian tourist authorities are trying to put on a brave face and claiming most tourists go to the Red Sea resorts and that everything is hunky dory there. This sounds like bullshit and tomorrow is likely to be the biggest day of protests yet-- both bloody and possibly leading the inevitable collapse of the dictatorship. This is the most recent (Thursday) update from the State Department:
This security notice is being issued to update the U.S. citizen community in Egypt about reports that anti-government demonstrations are expected to continue through the weekend. Since the Police Day protests on January 25, there have been daily demonstrations in several areas of Cairo as well as other cities in Egypt. There have been violent clashes that have resulted in injuries and deaths among both civilian demonstrators and police forces. Several websites are posting calls for demonstrations to take place after Friday prayers on January 28. Areas where people congregate after Friday prayers should be avoided. 

While many of the demonstrations have focused on the downtown Cairo/Tahrir Square area, violent confrontations have occurred at other locations both in the Cairo metropolitan area and in Alexandria, Suez, and other cities. Traffic and the Metro system have experienced serious disruptions. Local authorities have announced that the planned demonstrations are illegal and that police will take appropriate action to prevent unauthorized gatherings. 

The Embassy urges American citizens to review their personal plans and remain alert to their surroundings at all times. Americans should avoid areas of planned demonstrations and be aware that spontaneous demonstrations can occur anywhere on short notice. If caught unexpectedly near a demonstration, Americans should obey instructions from police and leave the area as quickly as possible. Americans resident in Egypt should monitor local news broadcasts and American visitors should ask tour guides and hotel officials about any planned demonstrations in the locations they plan to visit. Americans should carry identification and a cell phone which works in Egypt. 

Although the State Department has issued recent-- meaning 2011-- travel alerts for Haiti, Tunisia, the Central African Republic, Niger, Nepal, and Sudan, there hasn't been one issued for Egypt yet.

There seems to be a conspiracy to downplay the seriousness of what's happening-- full on regime change-- in Egypt. Today demonstrations have spread to Giza and Luxor, the two top tourist sites in the country. But tourists are getting no warnings that would jeopardize the tourism industry. It's actually shocking. But pictures like this are starting to get out now and... well, no one wants to get caught in this kind of a traffic jam:

Even with a human chain encircling the Egyptian Museum to prevent looting and with tanks in the streets of Cairo (and several other cities), the tourist industry still has its collective heads in the sand and is basically saying, "everything is pretty normal for a nice swim in the Red Sea. The shark is dead. Come on in!" On the other hand, EgyptAir has stopped all flights out of Cairo.
Egypt's national carrier on Friday temporarily suspended its flights from the capital, while international airlines scrambled to readjust their schedules to accommodate a government-imposed curfew as mounting street protests presented President Hosni Mubarak's government with its most serious challenge ever.

Separately, the United States warned its citizens against any nonessential travel to Egypt and cautioned Americans already in the country to stay put. The warning came hours after Friday's anti-government protests spiraled out of control, forcing the deployment of the military which Egyptian state television said would work alongside the police to enforce the 6 p.m. to 7 a.m. curfew and restore order.

...An official at Cairo's international airport said some foreign airlines had canceled or rerouted flights slated to arrive Friday night, including Air France. The official spoke on condition of anonymity to avoid breaching instructions about contacting the media.

Air France said its once-daily flight to Cairo was rerouted to Beirut and would continue to Cairo on Saturday morning. The airline said its Saturday flight was canceled while the airline tried to amend its schedule.

And after protests erupted at virtually every tourist site in Egypt, the U.S. and Britain warned tourists away.
"If you are already in Egypt, you are strongly advised to stay put," it said. "We are not, at present, advising British nationals to leave the country."

Foreign Secretary William Hague said the safety of British nationals was "absolutely paramount".

"In light of the ongoing demonstrations in Egypt we have carefully reviewed our advice and now advise against all but essential travel to Cairo, Alexandria, Luxor and Suez.

"This does not affect transits through Cairo airport for onward travel to other destinations, and it does not cover Egypt's Red Sea resorts."

...Abta, the organisation formerly known as the Association of British Travel Agents, said it had not heard of any reports of British package tourists being affected by the unrest but said some tour operators had cancelled trips as a precaution.

Travel firm Thomas Cook said it had cancelled all excursions to Cairo this weekend from the Red Sea resorts. But it said flights were operating in and out of Sharm El Sheikh airport as normal this weekend.

British Airways has warned of changes to flight schedules to Cairo because of a curfew imposed in the capital.

Meanwhile the Egyptian Museum has been partially looted. Photos:

Tourist agencies in the West conspired with the Egyptian Tourist industry to downplay the dangers in that country. And the US State Department and British Foreign Office both went along-- seemingly more concerned with the Egyptian tourist industry than with the safety of their own nationals. And today tourists are desperate to get out of Cairo-- and can't. Western governments are finally starting to warn their nationals.
Hundreds of people crowded the capital's main international airport hoping for a flight out on Saturday but Western carriers were canceling, delaying or suspending service after days of violent unrest.

A British airline turned around its Cairo-bound jet in mid-flight.

Between 1,500 and 2,000 people flocked to Cairo Intentional Airport, many without reservations.
Officials said that about half were tourists and half Egyptians.

British Midlands International said its flight from London Heathrow to Cairo turned around because a shift in the start of a nighttime curfew from 6 p.m. to 4 p.m. had made it impossible to land in time for passengers to make it out of the airport.

Lufthansa and Delta have both canceled their Egyptian flights. And the U.S. State Department has done an about face, going from trying to reassure nervous tourists that it was perfectly safe to travel to Egypt-- and not upset the fragile economy-- to preparing to airlift all Americans out of the country!
he American Embassy in Cairo said Sunday it is making arrangements to begin flying Americans out of Egypt on Monday, as an outbreak of mass looting added new dangers to a nation rocked by protests seeking an end to President Hosni Mubarak's rule.

The U.S. government warned that Americans should consider leaving Egypt as soon as possible as residents of Cairo were taking steps to protect themselves against the spreading lawlessness.

Mubarak thugs are trying to incite civil war and mayhem by unleashing a wave of domestic terror against the Egyptian people, including the looting and home break-ins. It is the last gasp of a crumbling tyranny.

And I bet British tourists, who were fed the same line of malarkey by their Foreign Office-- again, putting the Egyptian economy's well-being ahead of their own citizens' safety-- are pissed off as they struggle to get out while they can.
Desperate holidaymakers, heeding Foreign Office advice to leave Egypt, found flights grounded as staff abandoned their posts to join in the national protests.

Passengers who risked venturing out of their hotels to travel to the airport found scenes of complete chaos with queues of several hours snaking around the terminal buildings.

Unable to leave due to the night-time curfew, many were forced to bed down in the departure lounges.

Those stranded said the entire airport had ran out of food and water adding to the misery.

I hope Egyptians are kinder to the Bits than Brits were to travelers who were stranded in their country over the December storms when every conceivable strategy to fleece trapped passengers was carried out to the max.

1 comment:

Shanna & Tash said...

This is a really great blog. I'm a journalism student and one day I wanna do what you guys are doing.. It's great. You have inspired me.. thanks =)