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Despite natural disasters such as earthquakes, economic crises, terrorist incidents and
conflicts such as the Gulf (1991) and Kosovo (1999) war, world-wide tourism has
consistently kept growing. In the current negative climate it is easy to forget the
extraordinary progress which this industry has made over the last fifty years.
Today, the industry is seen as a major contributor to global economic development, with
significant effects on economic activities. It creates employment and generates wealth on a
truly international scale. Data from the WTTC (figure 2) estimated that in 2000, the
tourism industry employed 278 million people, generated an output of US$ 3.9 trillion and
contributed 12 per cent of global gross domestic product (GDP). Research estimates that
some 328 million people will be employed by 2010 (Goeldner, Ritchie and McIntosh 2000,
p. 680).
Figure 2: Employment in world tourism, 1988-2010
(Year 2010: estimated)
Source: Updated by the author from WTTC data quoted in Goeldner, Ritchie and McIntosh
2000, p.145.
186,6
190,4
193,2 200,4
206,7
214
255
255,5
266
278
328
0
100
200
300
400
M illio n s o f
em ployees
1988 1989 1990 1991 1992 1993 1994 1996 1998 2000 2010
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World tourism has traditionally been measured in international tourist arrivals and
international tourism receipts. The rapid and continued growth in international tourist
arrivals represents one of the major appeal of tourism as vehicle for economic
development. The WTO 2001 figures show that the number of international tourist arrivals
reached a record of 699 million in 2000, almost 50 million more than 1999 (figure 3). The
increase on 2000 was of 7.4%, almost double the figure of 1999. US$476 billion were
generated by this flow of tourists with an increase of 4.5 per cent over the previous year.
Figure 3: International tourist arrival (in millions)
(Years: 2010 and 2020 estimated)
Source: Updated by the author from WTO (2001) and Youell (1998, p.15).
The industry has continued its expansion and has developed all the capabilities to achieve
growth as the figures from the past have shown. Suddenly in 2001 both the slowdown of
the western economy and the terrorist attacks to the U.S.A. caused a crisis that had huge
repercussions on the industry. The next section illustrates an overview of the main
problems which occurred and the developments occurring in the tourism environment.
25.3
69.3
159.7
287
327
458
564
649
699
1018
1600
0
200
400
600
800
1000
1200
1400
1600
Arrivals
millions
1950 1960 1970 1980 1985 1990 1995 1999 2000 2010 2020
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1.2 Market and crisis. Before and after September 11
th
2001
The vulnerability of the tourism industry has again become evident after the terrorist events
in the U.S.A. In the immediate aftermath all the forecasting had to be revised and tourism
managers were forced again to deal with future uncertainties as a consequence of the
cancellations and fear of travelling from customers. Figure 4 shows the growth reached by
the industry with estimations revised for the end of 2001 downward to around 1 per cent
following the 11
th
September attacks.
Figure 4: Tourism Industry growth in number of arrivals (%)
Source: Updated by the author from WTO 2001 [online]
Despite the negative situation after the events, the WTO believed that there was still some
latent growth potential from many emerging areas. There was an ongoing shift in customer
attitudes and for many, tourism is no longer a luxury, it is a necessity and therefore
travelling should ‘take off’ again.
0
0.5
1
1.5
2
2.5
3
3.5
4
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
G
r
o
w
t
h
%
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Moreover, an analysis of customers’ behaviour from past situations such as the terrorist
attack at Luxor (Egypt, 1997) or both the Gulf (1991) and Kosovo (1999) wars, have
demonstrated that recovery could be achieved in the short-term.
Even if the scale of the attacks reached global awareness and has been blamed by the
public for all the consequences in tourism business, it should be considered that western
economies were in decline during the year 2001, affecting customers’ demands. The
September 11
th
events could have only accelerated and amplified the consequences on
tourism businesses. Contrary to the general beliefs, some important changes in the industry
were already occurring before, on top of the weakening economic situation.
Therefore, it has been important to make a distinction between crisis from economic
downturn and in contrast to that from terrorist attacks. Furthermore, the political events that
followed the September 11th attacks had to be considered and analysed in this paper as the
War in Afghanistan and the possibility to re-open the conflict against Saddam Hussain in
Iraq represented a further uncertainty to tourism organisations.
To summarise, many aspects had to be carefully considered when analysing the
uncertainties affecting organisations in their related industries. The next section introduces
the statement of the problem and the rationale of the work.
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1.3 Statement of the problem and rationale of the work
Organisations are faced both with uncertainties and rapid changes occurring in business
environments that cause difficulties to plan and develop strategies for the future. In
particular economic downturn and sudden crisis can generate different behaviours in the
strategies of organisations. How to deal with uncertainties and changes has become a
matter of study for business. The events of September 11
th
have generated a greater level of
interest on the subject.
Therefore, the author decided to deeply investigate and verify how organisations responded
to crises in their environments. Both short/long-term consequences in the tourism industry
were analysed and some past terrorist/war crises have been referred to as examples.
In this paper the European tourism environment has been chosen and analysed to narrow
down the research to a more detailed level that allowed the author to investigate better the
uncertainties coming from the market. In particular, changes in the European tour operators
sectors, in customers’ behaviour and in the European airlines industries have been
discussed to provide the reader with an overview of the tourism industry before and after
September the 11
th
.
The feedback from the case study provided a deeper insight on how the Italian tour
operator VIAGGIANDO S.p.A responded to both the economic slowdown and the effect of
the terrorist crises on the Italian market. The results were also useful to provide a
comparison between the Southern and the Northern European tourism markets with
reference to major changes occurring in the tour operator and airline sectors and also on
customers behaviours.
After having stated the problem and explained the rationale of how this work has been
developed, the next part introduces the scope and the objectives of this research.
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1.4 Scope of the study and objectives
The author's personal interest add to the impact that September 11
th
had on the tourism
industry represented an opportunity for further research on recent events and the
environmental uncertainties that companies faces in their day by day activities. The Italian
tour operator for whom the writer worked for during the last two summer seasons was
badly affected by the crises and the opportunity for the author to enter the tourism industry
vanished soon after the attacks to the U.S.A.
Therefore, this work not only aims to develop the knowledge of the author/reader on the
subject but it represents an opportunity to deliver work which could help the company to
better understand the environment uncertainties and how to deal with them in the future.
It was also an opportunity to analyse how organisations could recover from the terrorist
attack to U.S.A. at a moment when the economic situation was already stagnating. For the
first time, issues of globalisation arose as the terrorist crisis reached world-wide awareness
and represented a different situation from the past terrorist crisis, which had an impact only
at regional level such as the terrorist strikes that Egypt faced in 1997.
Therefore the main objectives of this work are to:
1. Examine and evaluate the significance of the contributors to the uncertainty currently
faced by the overseas tourism industry.
2. Identify how the changed environment has led to changed/changing patterns of
behaviour amongst consumers and organisations.
3. Identify how organisations deal with crisis issues and how these might be applied to the
tourism industry.
4. Examine the contributors to the uncertainty currently faced by the company.
5. Provide the company with a series of recommendations for future development.
The next section describes how the work has been developed.
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1.5 Overview of chapters
The development of this research is shown in figure 5 below.
Figure 5: Research development
Chapter Two
Research Methodology
Chapter Three
Analysis of the European
Tourism environment
Chapter Four
Literature review
Chapter Five
Case study feedback
VIAGGIANDO S.p.A.
Chapter Six
Findings of the study
Chapter Seven
Conclusion and
recommendations
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CHAPTER 2
Methodology
2.1 Approach
The aim of this dissertation is to provide an analysis of environmental uncertainties faced
by the tourism industry and its organisations after the recent events of September 11th
2001.
In order to overcome the difficulties deriving from the large amount of data and
information needed and the complexity of the research itself, both quantitative and
qualitative methodological approaches were evaluated.
On one hand, quantitative methods derive from the positivist paradigm. This philosophy,
first proposed by August Compte (1853), sustains that the social world exists externally,
and that its properties and characteristics should be measured using objective methods.
Hence, quantitative methods emphasise the adoption of standardised analytical instruments
to assess the reality, the generation and use of quantitative data, highly structured deductive
approaches, and a focus on facts.
On the other hand, qualitative methods are associated with phenomenology. According to
its paradigm, world and reality are not objective and exterior, but they are socially
constructed and given meaning by people (Husserl, 1946, quoted in Easterby-Smith et al
1991, p.24). As a result, qualitative methods emphasise the involvement of the researcher
in the observation, and the generation and use of qualitative data, together with the use of a
low structured, inductive research, and focus on meanings.
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Both approaches present strengths and weaknesses. As Easterby-Smith et al (1991, p.30)
suggest, while quantitative methods can provide wide coverage of the range of situations
and can be fast and economical; qualitative methods take into account changes over time,
understand people's meanings and adjust to new issues and ideas as they arise.
However, quantitative methods tend to be artificial and inflexible and do not take into
account people's meanings. As they focus on the present they therefore do not look at
changes. Qualitative methods require a great deal of time and resources, and the analysis
and interpretation of data can be considerably difficult.
Having considered the above strength and weaknesses of quantitative and qualitative
approaches, a 'methodologically pluralist' approach (Trow 1957, quoted in Gill and
Johnson 1991, p.127) was considered the best way by the author to tackle the complexity
of this research. Thus, both deductive and inductive approaches have been systematically
embraced, complementing one another and increasing the credibility of the research
process (Gill and Johnson 1991, p.129). Moreover as Easterby-Smith et al (1991, p.134)
point out, increasingly authors and researchers sustain that a mix of both methods should
be attempted, because it provides more perspectives on the phenomena under investigation.
2.1.1 Data Collection
Given the objectives of this study, secondary data was considered the most important
source. The limited time available did not allow the author to conduct more interviews to
the company as the development of the tourism crises continued through the months.
Therefore, secondary sources such as books, reports and reference works were used as
main sources. Theories related to the objectives of this study and already shown in similar
past research were compared with the actual developments of the crisis affecting tourism
organisations and were analysed. Furthermore, some periodicals, the national press, in
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particular the Financial Times, and the Internet were used on a daily basis to provide
updated information on the subject.
Ways of gathering quantitative data may include the use of archives and databases.
Structured interviews and questionnaires are other possible methods, but were rejected, as
the number of people interviewed would represent only a small population. This in turn
would lower the accuracy and precision of any statistical analysis findings (these
investigation techniques are mainly used in market research and opinion polls, which are
characterised by large populations). Moreover, the adoption of such methods would have
reduced the healthiness of the data through limiting the interviewees’ freedom for reply.
An empirical research was conducted in order to examine the tourism environment before
and after the September the 11th events. This entailed the statistical interpretation and
manipulation of quantitative data. In addiction, the analysis of the environment was carried
out using standardised analytical instruments. Johnson and Scholes 'step wise approach'
lead the author through a detailed investigation of the European tourism environment.
Techniques associated with qualitative methods include unstructured interviews,
observations and diary methods. Observation and diary methods were rejected since, the
former involved an in depth experience within a certain setting/organisation, and the latter
better suited studies of large samples of individuals (e.g., to gather data from a certain
organisation's employees). They were considered not appropriate to this type of study.
Thus, interviewing was considered the most suitable technique for the aims of this
research. In particular, the inductive approach took the form of unstructured interviews,
which provided the study with qualitative data.
2.2 Secondary data
Secondary sources are interpretations of events occurring over the period under
investigation, that are based on primary sources (Richardson, 1992).
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A critical survey of the literature was conducted during the initial stages of the
investigation. This enabled the researcher to gain suitable background knowledge of the
subjects in terms of the data available, and also the standard methods by which the field
interprets such information.
The nature of the study placed great importance on the collection of a large amount of both
primary and secondary data. Therefore, in terms of secondary data, an extensive and
complete bibliography was assembled, to provide adequate support for his study.
The gathering of secondary data was based mainly on books and articles from specialised
magazines. In particular because some vital changes were developing during the time when
this dissertation was written both the Internet and the daily press articles were particular
relevant for the purpose of this study.
2.3 Limitations of Secondary Data Collection
The very broad nature of the subject made it essential to establish early on a well defined
remit of investigation in order to make best use of the relatively limited time for research.
The main problem concerning the review of the literature was the fact that the data
collected was sometimes outdated. Often statistics covered a period up to 1999, preventing
from the possibility to analyse a two year time period (up to now). Outdated information
represented an important limitation especially because the study concerned a fast moving
and ever-changing business like the tourism industry. Unavailability, inappropriateness and
incompleteness of data, in particular from the tourism literature, further limit the validity of
such method.
The problem of bias arose during the literature review. These secondary data
interpretations of fact based on primary data; books and articles are naturally biased
according to the point of view of the author. The same is valid for public bodies’ and
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companies’ reports, since each organisation carries out its own interests, therefore
interpreting events and data according to its own perspective. In particular it was difficult
to reach an objective point of view from the tourism field as most if not all the tourism
literature refer to one single international organism which clearly could have some interest
on the industry (WTO, 2001).
2.4 Primary data
Primary sources are those documents produced during the period under investigation,
without the intervention of any sort of interpretation and manipulation. The main source of
primary data used were the interviews conducted by the company in Italy.
2.4.1 Interviews
As Burgess (1982, quoted in Easterby-Smith et al 1991, p.73) suggests, the interview is the
opportunity for he researcher to probe deeply to uncover new clues, open up new
dimensions of a problem and to secure vivid, accurate inclusive accounts that are based on
personal experience.
For the purpose of this research 'unstructured' interviews were chosen, in order to gain as
much information as possible, and to give interviewees the opportunity to express their
own opinions. Flexibility represents the main advantage of such kind of interviews, since
they allow one to follow up or explain questions.
The first step was the production of a representative sampling frame, i.e. a list of the total
individuals to be interviewed in the company. Purposive sampling methods were adopted,
and a particular group of individual was selected accordingly to their knowledge and
expertise in the tourism business.
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The questionnaire (appendix A) consisted of twelve open-ended questions, designed to
give the interviewees freedom of reply. In addition, both leading and multiple questions
were avoided. Further, the phraseology was developed with particular attention, in ode to
avoid questions which would have made the interviewee think in the researchers manner.
Before carrying out the interviews the questions had been piloted. They were sent by e-
mail to VIAGGIANDO S.p.A., to a travel agency which and were discussed with some
course students. Piloting is necessary, as it is very difficult to predict how respondents will
interpret and react to questions. Conducting a pilot before the main survey allows any
potential problems in the pro-forma of the questionnaire to be identified and corrected.
Moreover, where an interviewer-administered questionnaire is to be used piloting provides
the opportunity to refine and develop the interviewing and social skills of the researchers
and to help highlight any possible sources of interviewer bias.
A critical review of the literature represented the basis on which the questions were
selected. Their choice was driven by the need of covering the area of study as much as
possible. The questions were ordered in a way to logically follow the sequence of the
issues analysed in the dissertation.
2.5 Limitations of Primary Data Collection
2.5.1 Time Constraints
A great limitation of using interviews for the collection of primary data was time. Given
the busy schedules of the managers and employees interviewed, a small amount of time
was given to the researcher, this ensured that the short time available (30-45) minutes was
used to the maximum effect.
2.5.2 The problem of Bias
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