This part of research project comprises of brief and deep look about the presence of terrorism and its impacts on tourism in management literature. At first the characteristics of terrorism risk and uncertainty discussed after defining terrorism and it history, and then discussion tries to narrate the some of the most important and basic concepts in strategic management relates with the terrorism research. We also need to critically analysing the different strategic concepts and about at which level of uncertainty, what kind of strategy may better for tourism industry.
Terrorism is not new; it has long history as old as humans’ willingness to use violence or force against the civilian population to achieve political or social ends. It has been defined as a tactic and strategy, a holy duty or crime, a justified reaction to oppression and an inexcusable represented. It has been used since the beginning of the history. According to Richard A. Horsley (1979) the first terrorist group was Jewish group called Sicarii, who murdered Romans and their collaborators to oust their Roman rulers from Judea. The killing weapon of Sicarii was Sica (short dagger) which they used to murder their enemies (Romans and Greeks) and these killings normally took place in daylight and in front of people. The aim of such acts was to send a message to the Roman authorities and their collaborators that this tactics can be used against them as well. The Hashhashin was the 11th to 13th century Iranian terrorist group offshoot of by a person known as the Ismailis. Like Sicarii terrorist they used the same method of stabbing their victims in daylight. There forces were too small to challenge the militarily, so that’s why they killed city governors and military commanders in order to create uncertainty in militarily. They also carried out assassinations as retribution. Under modern definitions of terrorism some killings they carrier out do not qualify as terrorism (Mark Burgess 2003).
According to Jeffrey Record (2003) the origin of modern terrorism and word terrorism was introduced in Europe in the French Revolution of 1789. In the early period of revolutionary years, it was mainly by violence that governments in France tried to impose their radical order on a reluctant citizenry. As a result during this revolution, the meaning of terrorism was recorded by Francaise Academie in 1798 as system or rule of terror. During these revolutionaries more than 40,000 people have been killed and 5 millions people being jailed as political suspects. This was one of the worst examples that show the terrorism and these cruel killings were justified as an attempt to reduce or eliminate the revolutionary government opponents and to create fear in others people trying to overthrow the existing government. According to Findley Carter Vaughn (1982) the French revolution created huge terror and become a prototype for the future terrorists.
The terrorist groups’ formation happened in the late 19th century. Terrorist used to format small groups to attack nation states. According to Crenshaw M. (1981) one of the examples of theses groups was Russian Revolutionary Group (Narodnaya Volya). This terrorist group was trying to create uncertainty through quick attacks against current political regime. The ideas and tricks that these terrorist were used, later become the prime example of terrorism in around the world. They used modern weapons such as bombs, guns and suicide attacks. According to the Director of Central Intelligence (1981) report “the Soviet Union was giving assistance to revolutionary movements throughout the cold war. They provide free training and supply of weapons to terrorist groups. The Soviet Union support revolutionary groups around the world in order to export revolution to non communist countries. This Soviet strategy resulted considerable terror and violence around the world.
In early 20th century revolutionary terrorism continued to motivate political violence all over the world, much of this violence directed against the British government. The Irish Republican Army terrorist started violence against British Empire in 1910s and IRA carried out number of attacks from 1916 to 1923 against British power. During this period they attacked over 300 police stations, killed dozen police officers and burned down the Liverpool docks and warehouses. After years of violence finally British Empire agreed to create an independent Irish nation. Many terrorist groups inspired from IRA fighting tactics including Palestine Mandate’s, Zionist, Hagannah, Irgun, Lehi and even British army special operations unit used during World War II (Carr M. 2006).
After the World War II terrorism was practiced by groups and individuals. According to Goren R. (1984), in late 20th century dramatic growth in terrorism began. Through this period many terrorist organizations were motivated by ideological considerations such as Palestinian Liberation Organization, Basque ETA and IRA appeared terrorists besides nationalists. These terrorist organizations introduced new and modern method of terrorism such as hijacking, attacks on public and private organizations. Many terrorist organizations consider terrorism as religious war and some use to achieve political goals. The recent and largest act of terrorism occurred on September 11 2001, when terrorist set of coordinated attacks on USA. The terrorist hijacked civilian airplanes and used these plans to attack the World Trade Towers and Pentagon. Other major terrorist attacks have occurred in London subway bombing, Madrid train bombing, Mumbai attacks and many more around the world in past decade.
Terrorism in nature is very difficult to define but the acts of terrorism conjure emotional responses in the victims and the person who did it. No one is agreeing on one single definition of terrorism, because one man’s terrorist is another man’s freedom fighter. If we consider terrorism is an act of political violence, then the war on terrorism is another form of political violence to wipe out other (terrorists). The term terrorism is come from French word terrorisme based on Latin language words “Terror” means great fear related to the Latin verb terrere (to frighten). According to the Oxford dictionary, terrorism means ‘act of terror’. The word terrorism is emotionally and politically charged and it is also very difficult to provide a precise definition. The studies have found over hundreds definitions of terrorism. The concept of terrorism may itself be controversial because state authorities often use it to delegitimize political or other opponents by use armed force against them (Hoffman B. 1998).
Defining terrorism is one of the most demanding tasks, because it has proven impossible to outline the scope of terrorist activities and find the meaningful delineation of actions that should be called terrorism in the context of philosophers and political scientists. The main reason is that (as said before) “one man’s terrorist is another man’s hero”. In the view of different authors and organizations terrorism has the different definitions. Hoffman B. (1998) describes as “terrorism is violence or equally important, the threat of violence, used and directed in pursuit of or in service of political aim. According to United States department of Defence “the calculated use of unlawful violence or threat of unlawful violence to inculcate fear; intended to coerce or to intimidate governments or societies in the pursuit of goals that are generally political, religious, or ideological”. In the dictionary of United Nations “An anxiety-inspiring method of repeated violent action, employed by (semi-) clandestine individual, group or state actors, for idiosyncratic, criminal or political reasons, whereby – in contrast to assassination – the direct targets of violence are not the main targets.”. According to the FBI (2002), “terrorism is unlawful use of force of violence against the person or property to intimidate government, civilian population or any segment therefore in furtherance of political or social objectives”.
A deep interpretation of terrorism in literature:
Terrorism can take many shapes and forms and much literature has been produced about financial impact of terrorism on different economic sectors and industries. Now arguably it the biggest threat to the tourism and related industries around the world. In the past twenty years, we have seen a dramatic rise in terrorism in different parts of the world. Terrorism did not begin in 21st century after World Trade Centre terrorist attacks. Europe, United States and other continents have a very long and sad history of terrorist attacks. According to Harold Miller (2003), in 20th century IRA in UK, ETA in Spain, Brigate Rosse in Itely, Rote Armee Fraktion in Germany, 7 November in Greece are the few worse examples of terrorist groups in Europe. In United States we remember the bombing in Oklahoma City in 1994, World Trade Center bombing in 1993 and 11 September 2001 terrorist attacks. But September 11 2001 attacks have changed the world, as UN Secretary General Kofi Annan has said, none of the issue that faced us on 10 September 2001 has become less urgent. Now the terrorism has grown to an unprecedented limit and in multiplicity. As we know that, even terrorist without the use of weapons of mass destruction can kill thousands of people and destroy the economic activities (Gabriele G.S. Suder 2004). According to Blomberg, Brock S. & Gregory (2004), “terrorism is associated with a diversion of spending from investment to governments’ expenditure”. To fund these government expenditures, they borrow from foreign financial institutions and governments. The develop countries with less volatile currencies normally issue long term debts to cover the deficit and less developing countries confronting terrorism by government spending through sale of foreign reserves, printing more currency and increasing inflation. Gupta S. & Clements B. (2004) reached the same conclusion, that the terrorist activities severe impacts on less develop countries than developed from monetary policy perspective.
Terrorism has its massive effects on tourism industry and related businesses. Darnell B. (2010) said, most businesses operating in the effected area gets impact from the thrust of government policies to quell terrorism, which is another kind of harm which tourism industry may gets, when the terrorist activities happens. This kind of wide-spread results predict an escalate unattractiveness of tourism in effected areas. It is conspicuous to secure all of the targets of terrorism at the same time. In the number of attacks done by small terrorist groups with least resources, the loss to tourism industry was massive. If costs of an attack be measured by the loss which tourism industry faced, the tourism industry always paid far great amount than the loss of terrorist group. Hoffman B. (1998) cited that the cost of the bomb was not more than $400, which was the reason of the loss of $550 million in the blast of World Trade Centre in 1993. The amount which is sending to protect the world from terrorism is many billion dollars, while the terrorist cost nothing in front of it.
The word terrorism seized the world’s attention in September 11 2001 as a result of destructive and dramatic attack on core symbols (world trade centre and pentagon) of world’s most powerful country United State of America. The September 11, 2001 terrorist attacks on New York exposed the vulnerabilities of the tourism industry and it also change the perception of tourists as to travel safely and securely. According to Bruck T. and Wickstrom B. (2004), some economic sectors or industries are more vulnerable to terrorist attacks than other and consequently they suffer more losses. The vulnerability of sector or industry may be due to characteristics of its operation. Tourism industry is perishable and its services can not be sold at another time or stored, once the time passes. So tourism industry will experience the vulnerability in the times of terrorist attacks and it affect on patterns of demand. The main aim of terrorist groups is to communicate the massage of fear to the people as wide as possible. According to Lehrman S. R. (1986), tourists are the soft target for terrorists because politicians and embassies are less attractive as they have huge security measures. Connor, Stafford & Gallagher (2009) said, targeting tourists has the potential to punish the ideologies of capitalism and damage the country economy. Richter and Waugh (1986) said that terrorist attacks on overseas tourists are less likely to alienate popular support than they attacks on local targets because in this way they threat to other tourists. Targeting the local tourists would likely to engage the public as a result to retribution of places the existence of the terrorist groups at risk. There are number of studies about tourists’ choice of destination based on the costs and risk of terrorism.
Gray P. and Thapa B. (2003) examined the effect of terrorism risk on travel intentions after the September 11 2001 attacks. The results show that travellers were considering the safety concerns and risk of terrorist attacks during travel. McKercher B. and Hui E. 2003) said that, terrorist attacks have an immediate but short term impact on tourism and travel flows. They also suggest that after the initial attacks tourism industry has greater effect than the scale of initial attack. According to Connor, Stafford & Gallagher (2009), terrorist will continue the biggest threat to the tourism industry and terrorist groups have to be active in order to maintain discipline, interest and morale. This statement is still valid after 19 years later, for this reason we can expect this to be continuing, because terrorist attacks can happen anywhere and no place is safe. Now the biggest challenge to tourism industry is to deal and manage the crisis in the event of terrorist attack.
It is difficult to determine the impact of terrorism on tourism industry because structure of tourism and terrorism differ not across the countries but also over the time. Drakos K. and Kutan A. (2003) emphasizes the importance of differentiating between different types of attacks, the locations of terrorist attacks (e.g. urban or rural areas) and number of casualties. Aziz H. (1995) said “terrorism could also be a reaction to irresponsible tourism development. The study of Enders W. and Sandler T. (1991) argue that it is found that the causality is unidirectional, that the terrorists affect the inflow of tourists but not reverse. The different studies, facts and figures show how tourism industry in particular country or region is affected by terrorist attacks. The deterrent impact of terrorism on tourism industry in particular country may benefit the tourism in alternative destinations.
Financial impacts of terrorism on tourism industry:
The literature on terrorism and tourism is scant. The two studies by Enders et al 1992 and Enders and Sandler 1991 provide empirical evidence on the link between tourism sector and terrorism. Enders W. and Sandler T. (1991) used monthly data from 1970 to 1988 and employed VAR (Vector Autoregressive Analysis) to find negative impact of terrorism on tourism in Spain. According to Drakos K. Kutan A. (2003), Enders et al studied a large sample of European countries, between the periods 1974 to 1988 to find the impacts of terrorist attacks on tourism. They employ time series analysis and ARIMA technique with transfer functions and construct a forecasting model to analyse the impact on tourism in these countries. In these models they used quarterly terrorism data to quantify the present value of loss in tourism revenue for selected sample of European countries. According to Enders calculation Italy, Greece and Austria lost $1.16 billion, $.77 and $4.5 billion respectively during 1974 to 1988. During this period all Europeans countries lost in tourism $16.15 billion due to terrorism. They conclude that terrorism has significant impact on Europe tourism industry revenue and tourists find substitute destination in order to minimise the risk of experiencing terrorist attacks.
The immediate effects of terrorist attacks are death and destruction but the subsequent effects are discourage investment, interrupt travel & tourism patterns and destabilise economies. The economic effect of terrorism has been the main subject of number of studies. According to Enders W. & Sandler T. (2002), the terrorist attacks have economically significant negative effect on the economic growth; these attacks have less persistent and considerably smaller than the impacts of internal conflict or external war. Frey B. and Luechinger S. (2004), said that terrorists change tricks and tactics in reaction to the government polices, and it has direct effect on investment and economic growth. They also said that the investor decision to invest in particular country is based on economic risk, monetary returns and political risk. The foreign direct investment is one of the economic benefits of tourism, anything that effect on tourism needs to be minimised. Coshall J. (2005) claimed that Pan Am flight bombing in Lockerbie Scotland had minimal impacts on UK tourism and receipts from international tourists, while September 11 2001 had severe impacts on UK tourism and rest of the world.
Different strategic management approaches of the tourism industry may have the same analytical aspects to improve the performance of industry. According to context of world Tourism organization (2008) the international tourism is increasing day by day as in 2008, the trade happens of more than $944 billion and over 922 million international tourist arrivals at different destinations and 2009 number of tourist arrival to 880 million which is 4% decline compare to 2008. The most affected reign was Europe, especially UK with a 6% decline.
Terrorism can also destroy tourism industry by reducing tourist arrivals in UK. After September 11 2001, terrorist attacks in UK and continued threat of terrorist attacks also reduce the foreign direct investment significantly. According to Ritcher and Waugh (1986), terrorism and political violence can destroy the tourism industry supply and demand because this industry is extremely sensitive to these extreme events. However, after September 11, 2001 the world has been threatened by terrorism, and acts of terrorism have increased in many countries including UK. The effects of terrorism on tourism decisions have been an area of research concern on demand. Drakos and Kutan (2003), Pizam A. (1999) and Krakover (2005) all agreed that the severity and frequency of terrorist attacks are negatively correlated with the tourism demand. The Pizam and Fleischer (2002) said that “the frequency of terrorist attacks cause large decline in tourism industry demand”. The intervention analysis by Coshall J. (2005) employs explore that “the dynamics of the effects of terrorism incidents on those travelling or visiting UK and UK people going abroad”.
Influence of Media Following a Terrorist Attack
Modern terrorism is particularly onerous, because of characteristic of its time. The impact of terrorism on macroeconomic is crucial, customers feel themselves in stress and some kind of continuous fear which definitely effects the spending patterns. Media plays very important role with regards to terrorists’ activities around the world. Firstly, terrorist use media to send their massage to the audience, and general public relied on media for information in the times of crises. Now terrorist are using media to advance their causes of attacks. According to Sonmez and Graefe (1998), “the escalation of terrorism after 70s has been linked to media, with instantaneous access to the global audience”. Secondly, the media provide information to the public, what has happened, which normally influence the public decisions about travel. In the event of terrorist attacks, Fischer H. (2005) discusses the importance of information, he said “it is very difficult for emergency personnel to receive and communicate the accurate information at the time of terrorist attacks. According to Lynch & Katju (2004), media only report during the time of crises, it provides coverage to particular incident as long as its news and then move toward new news story when it happens. She said tourism industry has a great influence of media reporting and constant coverage of terrorist related incidents discourages the restoration of consumer confidence. Beirman D. (2003) said that the globalisation of media enhanced the ability to report terrorist events as they occurred, it also gives rise some problems and benefits to tourist authorities. In the word of Mansfeld and Pizam (2006), the media coverage and reporting on terrorist attacks have great impact on tourism industry, which transform the terrorism from horrendous event into iconic event. Tourism industry needs to monitor media coverage of terrorist events, because this will help tourism industry to develop strategies, which will help it to restore the tourists and travellers confidence.
Media have its ital role in endangering fear, among the society; the irresponsible reporting generates scenes of ever present possibility of terrorist act. According to Crenshaw M. (1990) the new and fastest ways of communication allow people to know about happens in the other part of the world within minutes about any terrorist attack. On the other hand terrorist groups are adopting the latest techniques to communicate with each other and even sometime just for spreading fear with in the specific community to achieve their targets. Czinkota et al (2004) cited that terrorist also using old traditional ways to communicate which are unable to penetrate. The latest ways of transportation system gives terrorist groups better way to move around. So we can say that media plays very important role for tourism industry in the time of terrorists incidents, as the media medium for terrorists to the public subsequently depend on the same media for more information on that incident.
The discussion will cover some of the most basic concepts in the research of terrorism and its impacts on tourism. Tourism industry internationally and locally particularly affected by terrorism because when some things happen, it disrupts the activities of tourism and related industries. Every year more than trillion dollars are spent on combating terrorism. This along with billons dollars lost in property damage, loss of human resources and decrease in key industries potential profit like tourism, aviation, hotel and transportation industry. It is a plague on global economy and affects on everyone from entire countries to all the way down to individual. Terrorism in recent years has sparked, increase in fear and demand higher level of security. The cost of terrorism can be broken down into number of areas and come down to direct effects, response costs and negative effects on tourism industry.
Terrorism effects tourism activates deeply. This threat compel almost every department of tourism industry, which cause decline in the profit of industry and on the other side the whole economy has to bear the cost of every single act of terrorism. According to LCCI (2005) report, after 9 11 terrorist attacks, majority of tourism related industries fear high risk of terrorist attacks and they have contingency plan in place to deal with uncertainty. As globalization integrates multinational organizations and financial markets, events like terrorism which spurn economic uncertainty have increasingly international consequences. Terrorism causes unpredictable political and economic consequences, infuses the public with fear and prevents the free flow of capital, labour, and free market principles. Because of their disastrous impacts, occurrences of terrorism have serious implications on the performance of tourism and related industries around the world. In past few years immediate responses and severe impacts are felt in tourism industry soon after terrorist attacks happened. These sustained reactions can be observed through macroeconomic impacts, government policy responses, tourists and investor confidence. As world move towards more liberal economies and democratic political structures, tourism industry must have the ability to adapt and respond to terrorist events. In order to do so, tourism industry and associated businesses, need a more complete picture and understanding of the deleterious effects of terrorism.