India Tourism Industry 2H11

Additional Information

The year 2011 has been a year of madness around the world, in political upheavals. The Japanese earthquake, followed by a pacific-wide tsunami, and nuclear power crisis, by riots in the streets of London, by the fall of the Portuguese coalition government, by union protests throughout the world, from Madison, Wisconsin to Europe, from revolutions in much of the Arab world, to renewed bus bombing and rocket attacks against Israel, to a no-fly zone imposed over Libya.

Food prices are rising at alarming rates. There is no one factor to account for the rapid increase in the rise of food prices. These price rises are the result of a number of factors: irregular rainfall in much of the world including a major Texas draught, the high cost of fuel resulting in higher transportation costs, political disturbances in the Middle East, the need to ration food in a post earthquake/tsunami Japan have all contributed to ""food sticker shock"" and political tension. It may well be hypothesized that much of the world's political upheavals have less to do with a desire for democracy and as have occurred throughout history, more to do with the cost of food. The impact of tourism caught in the crossfire is already manifesting itself. Restaurants have had to raise prices or lower their service. Transportation companies have been (and will continue to be) hard hit. The airline industry is especially vulnerable. Airlines depend on both the food industry (at least in first class or executive class) and the fuel industry. Already on the margin, airlines can do nothing more than cut services and raise prices. The result of such a policy may create an economic tsunami as the leisure traveler may well decide that travel is simply too expensive and thus the ""staycation"" (or stay-at-home-vacation) once again becomes a reality influencing hotels and attractions throughout the world.

Furthermore, from a tourism security perspective, the world's security situation has deteriorated. Few nations today are not suffering from either political or economically motivated violence. From Mexico's drug wars to most of Latin America's express kidnappings, from street violence from England to the Middle East, the tourism world must face the fact that there is an increase both in the potential for crime and for acts of terrorism. Indeed the current Libyan government, with a great deal of blood on its hands, is not above ""punishing"" the West by further acts of terrorism.

The international tourism industry must also face the reality that world currencies are no longer stable. It is impossible to predict the value of the US dollar or euro over the next twelve months. This inability to know the value of a currency means that long-range tourism prices are especially hard to predict and the fallout from this monetary instability is already affecting multiple tourism support systems. For example, tourism experts are now noting that hospitals are turning people away (despite their nation's laws) who do not have local insurance or a well-backed credit card.

The tourism industry must also recognize that despite what the politicians may tell us the world's economy has multiple challenges. Among these challenges is the fact that retirement accounts, throughout the Western world, are no longer sustainable. Well-healed unions may protest, but there is no way that a diminishing working population can afford to allow people to retire at full or three quarter wages for periods of 20 or thirty years or more. What this means is that the group of people who often travel the most, the young retirees, may have to make major lifestyle changes and these changes may have a great impact on the world of tourism. Despite these numerous challenges, it would be a mistake to predict the demise of the travel and tourism industry.