A critical analysis of the 2007-2009 global financial and economic crisis and its implications for the travel industry and associated businesses

Inhaltsangabe:Introduction: At present (spring 2009), the world experiences one of the most severe economic crises in post-WWII history, precipitated mainly by the U.S. sub-prime mortgage crisis which became apparent to the broad public in 2007. In 2008, the U.S. sub-prime crisis turned into a global financial crisis, and subsequently into a global economic downturn that forced numerous countries into recession. Stock markets have fallen, large financial institutions have collapsed, and governments had to come up with rescue packages to bail out their financial systems. Although it can be argued that overall the tourism industry may not be as vulnerable as other commercial sectors when it comes to fluctuations in clients’ purchasing power, in the medium term tourism businesses are still likely to be at least as seriously affected by the upcoming new distribution of economic power as any other industry. A long-term trade and industry downturn may bring about a broad range of changes to the world, like altered roles of the United States, the European Union and the Asian block, insecurity and crime, a different understanding of handling energy resources, further polarization between rich and poor, or changing values and therefore consumer preferences in general – to name just a few. All these factors may potentially have adverse impacts on tourism businesses, and thus require adequate attention and timely academic research. However, change can also mean positive development and can open up new chances and opportunities for the world economy. These opportunities need to be identified, assessed and exploited. With an estimated direct and indirect contribution of the travel and tourism sector of 9.4 percent to global GDP, 10.9 percent to world exports and 9.4 percent to world investment, the significance of the industry’s role in the struggle for economic recovery clearly must not be underestimated. As the tourism industry is all about pleasant experiences and the positive things in life, it is sometimes hard to think about crisis management. When having to operate in an economically insecure environment of the current dimension, numerous managers therefore face the challenging situation of having to make decisions in fields they do have little or no knowledge about. However, in a fast-changing and highly volatile economic climate like the present, inaccurate decisions by executives of tourism businesses can have devastating consequences and can [...]