EG700-AU MSc International Hospitality Management

EG700-AU MSc International Hospitality Management

Introduction

The study of Global Tourism Database shows that terrorist attacks have increased subsequently in the current era. One of the most historic terrorism events is September 11th attack on Washington DC< Twin Tower. The occurrence of terrorism has not only culminated in social issues leading to death of the people and citizens, but also incurs an adverse impact on the economy of nations due to devastation of properties and seizing of the economic activities for a few days. The occurrence of terrorism activities also contributes to the development of a specific image and recognition of a place that further shapes the perception of the people towards the place. In this regard, tourism is one of the leading sectors most adversely affected due to terrorism. The background of the current study rests on analysis of the impact of terrorism on Ritz London and also the impact of terrorism on the international market. Ritz London is one of the five star hotel chains in London operating under the brand name of Mayfair. The founder of the hotel is César Ritz, who is a Swiss hotelier and he founded it in 1906. The exterior of the building design is identified in terms of Franco-American style. This study provides a critical assessment of the terrorism impact on Ritz London and the global tourism sector.

Influence of terrorism on The Ritz London

The analysis of terrorism activities in UK shows that in between 2018 and 2019, the UK has convicted more than 50 people due to terrorism-related activities and offenses with over 200 people in custody (Agarwal et al. 2021). In comparison to that, the rate of terrorism in UK showcases 231 terrorism cases between 2010 and 2019. This is indicative of the moderate to high prevalence of terrorism activities in UK as a result of which there has been a significant impact incurred on tourism activities and sector. Ritz London is one of the most luxurious and five star properties of UK that has generated average revenue of $129.5 million on an annual basis. Therefore, the implementation of Prospects theory in this context showcases that tourists are often considered as local, regional or national consumers who contribute to the economic development of a nation through tourism activities. However, increased terrorism activities contribute to perceived risks of the tourists as part of which they decide whether to visit the place. The sensitivity of tourists to terrorism threats in UK is extremely high and therefore, the initiatives of the UK government as well as the strategies implemented by the Ritz London are also significant factors to be considered. In this regard, the study of Corbet et al. (2019), showcases that positive impact is incurred as a result of terrorism on the activities and strategies of Ritz London that strengthens the relationship of the hotel with government and local police. The hotel chain also focuses on implementing safety policies for the guests through thorough background checks and identity proofs. In order to combat the terrorism activities within the hotel chain, the hotel has also banned visits of outside guests within the hotel premises that indicates the strategic actions and implications on part of the hotel. This is a positive factor influencing the perceived risks of the customers within the hotel premises.

In this context, the strategic planning and options implemented by Ritz London include crisis response and excellence of the operational strategies. As mentioned by Hadi et al. (2021), the company also adapts high security protocols to emerging threats. The excellent stakeholder management of the hotel could also be witnessed to be one of the significant impacts of terrorism on Ritz London in terms of collaboration and teamwork. There is also implementation of collaborative strategies by the hotel chain through creating partnerships with the respective authorities of UK and London as part of which there is real-time intelligence and availability of information on the security threats and networks of the company. This is indicative of the company’s strife towards maintaining high security and safety management for the tourists. However, one of the difficulties faced by the hotel chain is lack of effective marketing strategies as part of which there is lack of adequate information of the customers related to the safety and security management practices of the hotel (Gamage et al. 2020). Henceforth, the lack of marketing initiatives and strategies is one of the core weaknesses of Ritz London identified in the course of analyzing the terrorism impact on the hotel.

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On the other hand, the tourism rate in UK in 2010 amounted to 940 million that decreased to 31.2 million as of 2022 (Asongu et al. 2019). This is indicative of the huge decrease in tourism rate between 2010 and 2022 and apart from Covid19; terrorism is also a significant factor culminating in seriousness of the issue. The impact of terrorism on Ritz London is also witnessed in terms of profitability and revenue generation. This is analysed in two ways. Primarily, the increase in terrorism activities influences the safety perception of the international and national tourists as a result of which, they tend to visit certain places and avoid certain places. The Northern Ireland region of UK is one of the leading places with most numbers and risks of terrorism attacks and activities. Thus, the distance between Ritz London and Northern Ireland is approximately 497 miles that indicates a relatively shorter distance between the two regions and the visitors find it risky to visit Ritz London as well due to high perceived risks. As influenced by Stankova et al. (2019), the high perceived risks of the guests and travelers are hampering the image and reputation of the firm as well leading to lack of safety management practices. Because of this, the middle-aged demographic find it most uncertain and difficult to opt for Ritz London during their tourism activities leading to the low revenue and profitability for the hotel. However, the hotel has indulged in a range of strategic planning for eradicating the negative impact of terrorism.

The impact of terrorism on Ritz London could also be witnessed on hotel occupancy rates. As commented by Walters et al. (2019), increased terrorism activities in a nation or a region shall often incur negative impact on the hotel occupancy rates as tourists often refrain from visiting different places due to safety and security risks. The study of Khan et al. (2020) states that younger aged tourists and travelers have underpinned war, terrorism and political tensions to be significant factors influencing their decisions over a place. Henceforth, the impact of the terrorism activities in London and UK on Ritz London could be witnessed in terms of fostering stakeholder relationships and partnerships with the major authorities and agents of UK so that security could be managed significantly in the country as well as the hotel premises. There exists a causal relationship between terrorism and tourism as part of which the number of tourism activities and tourist visit rates decreases with the increase of terrorism activities and vice versa. Henceforth, the lower number of tourists’ visits and low occupancy rates in the hotels is another negative impact of the terrorism on the hotel chain.

Impact of terrorism on the international tourism market

Figure 1: Terrorism rate in Afghanistan between 2014 and 2022

(Source: Besley et al. 2020)

In terms of global terrorism rate, Afghanistan is one of the major countries with highest terrorism rate. Figure 1 illustrates the rise in Afghanistan terrorism rate from 5.70 points to 9.77 points in 2021 (Besley et al. 2020). This indicates the immense increase in the rise of terrorism activities in the country mainly led by Al-Qaeda. The impact of this in the tourism market of the country is witnessed through an average visit of only 90,000 tourists on an annual basis. This indicates that terrorism has created high perceived risks of the place due to which international tourists find it difficult to visit the place for leisure and tourism activities. Similar to Afghanistan, Burkina Faso has also a high rate of terrorism activities and the point of it in terms of Global Terrorism index stood at 8.56 points as of 2022 (Korstanje, 2020). The country has witnessed record low tourist visits in 2020 amounting to 62716.00. Apart from the direct impact of Covid19, the perception of local and international tourists due to the occurrence of terrorism activities in the different regions of the country is also an influential factor restraining the tourists from visiting the place.

In comparison to that, terrorism attacks and threats have been recorded low in the US due to initiation of policies and strategies from the end of the US government as part of which, only eight attacks took place in 2022. As studied by Asongu and Acha-Anyi (2020), in comparison to that, the UK also recorded as low as 4 attacks as of 2022 resulting in zero death of people due to terrorism activities. Henceforth, the US and UK have been two of the leading markets with lowest terrorism rates due to which the terrorism sectors of the two countries have also witnessed significant growth and development. As such, there have been 51 million international visitors in US in 2022 and 31 million in UK in the same year (Harb and Bassil, 2020). This is indicative of the fact that companies, hotels and other organizations in the tourism sector need to implement a range of strategic plans and implications for ensuring safety of the tourists. The impact of terrorism on the international tourism market is also witnessed through creating treaties and peaceful contracts between the different countries so as to foster tourism activities. The impact of terrorism is inverse on economic development of countries as countries with low terrorism rates tend to gain higher revenue from tourism as compared to the countries with high terrorism rates. The instance of the UK could be provided where visitors spent approximately £26.5bn for tourism activities in the country (Santamaria and Filis, 2019).

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The impact of terrorism in international tourism activities could also be witnessed in terms of considering the impact of terrorism on Egypt. As studied by Agarwal et al. (2021), one of the most infamous terrorism activities occurred in Egypt in 1997 that resulted in the death of 71 tourists. The reason for which terrorism activity occurred within the country was because of the strife of the traditional Islamic societies towards reviving Islamic religion in the country and it was also stated that indigenous and contemporary cultures have incurred negative impact on the country. However, despite this, there is an increase witnessed in the tourism activities of Egypt from 5.40 million in 2016 to 13.03 million in 2019. However, the number is extremely low as compared to UK and US where the number of tourists amounts to more than 31 million as of 2022 (Corbet et al. 2019). In comparison to that, the total number of tourists visiting Egypt in 2022 amounted only to 11.7 million that indicates the negative impact of terrorism on tourism.

The perception of terrorism risks in the different countries including Egypt, Syria, Israel and other countries has been significantly high among the visitors due to which, there has been negative impact on tourist’s motivation towards travel. As mentioned by Hadi et al. (2020), the impact of terrorism in the tourism activities is witnessed on evaluation of alternatives by the tourists as part of which the tourists usually opt for safer places as compared to the places that have high risks of terrorism activities. The global media also showcases a significant impact on the minds, perceptions and attitude of the tourists towards opting for the international tourism related activities as part of which there is a sudden decline witnessed in the number of visitors in the countries. The lowering of tourist visit rates has been significantly high in the countries with the highest rate of terrorism attacks and activities and thus, low rates of terrorism activities has been widely recognized in the countries even before Covid19 occurred. As influenced by Gamage et al. (2020), the instance of Israel, Syria and even Nigeria due to which the tourism rates in these countries have been decreasing by more than 5% on an average on an annual basis.

However, no impact of terrorism is witnessed on tourists visiting Thailand. The study of (_) showcases that negative impact of terrorism shall sometimes be eradicated through geographical features and beauty of a place. This is the reason for which tourism activities have been high in Thailand despite immense terrorism activities in the country. Additionally, Kashmir in India is also one of the most politically unrest regions of the world and has still been able to attract a wider number of visitors all across the world who have visited the place for its beauty and geographical features. Henceforth, based on this the negative impact of terrorism is not always witnessed on the tourism rates in a country or place. Thus, based on this it could be stated that some of the regions in the global tourism market have still been able to attract tourists despite having a high terrorism rate.

Conclusions

In compliance with analysis of the impact of terrorism on tourism, it can be stated that the terrorism is one of the major detrimental factors for the growth and development of tourism sector. The impact of terrorism rate in UK on Ritz London could be witnessed through implementing strategic plans and actions due to which the hotel has strengthened its security management and safety management practices to a great extent. Considering the global tourism market, the impact of terrorism on tourism could be witnessed in terms of negative perceived value and risks among the tourists due to which they refrain from visiting the places with high terrorism activities. However, positive impact of terrorism is witnessed on the implementation of strategic plans and actions by the hotel chains and the tourism sector as part of which the safety and security management practices of the places get enhanced. However, negative impact of terrorism is witnessed on countries with excessive high rate of terrorism such as Afghanistan, Burkina Faso and Egypt.

Reference List

Agarwal, S., Page, S.J. and Mawby, R., 2021. Tourist security, terrorism risk management and tourist safety. Annals of Tourism Research, 89, p.103207.

Asongu, S.A. and Acha-Anyi, P.N., 2020. Global tourism and waves of terror: perspectives from military expenditure. Journal of Policy Research in Tourism, Leisure and Events, 12(2), pp.239-261.

Asongu, S.A., Nnanna, J., Biekpe, N. and Acha-Anyi, P.N., 2019. Contemporary drivers of global tourism: evidence from terrorism and peace factors. Journal of Travel & Tourism Marketing, 36(3), pp.345-357.

Besley, T.J., Fetzer, T. and Mueller, H.F., 2020. Terror and tourism: the economic consequences of media coverage.

Corbet, S., O’Connell, J.F., Efthymiou, M., Guiomard, C. and Lucey, B., 2019. The impact of terrorism on European tourism. Annals of Tourism Research, 75, pp.1-17.

Gamage, S.K.N., Illangarathne, S.K., Kumudumali, S.H.T. and NEDELEA, A.M., 2020. Terrorism and tourism: a systematic review of empirical literature. Revista de turism-studii si cercetari in turism, (29).

Hadi, D.M., Katircioglu, S. and Adaoglu, C., 2020. The vulnerability of tourism firms’ stocks to the terrorist incidents. Current Issues in Tourism, 23(9), pp.1138-1152.

Harb, G. and Bassil, C., 2020. Terrorism and inbound tourism: does immigration have a moderating effect?. Tourism Economics, 26(3), pp.500-518.

Khan, A., Bibi, S., Lyu, J., Raza, A., Hayat, H. and Meo, M.S., 2020. Unraveling the nexuses of tourism, terrorism, and well-being: Evidence from Pakistan. Journal of Hospitality & Tourism Research, 44(6), pp.974-1001.

Korstanje, M.E., 2020. The impact of coronavirus on religious tourism: is this the end of pilgrimage?. International Journal of Religious Tourism and Pilgrimage, 8(7), p.4.

Santamaria, D. and Filis, G., 2019. Tourism demand and economic growth in Spain: New insights based on the yield curve. Tourism Management, 75, pp.447-459.

Stankova, M., Tsvetkov, T. and Ivanova, L., 2019. Tourist development between security and terrorism: empirical evidence from Europe and the United States. Oeconomia Copernicana, 10(2), pp.219-237.

Walters, G., Wallin, A. and Hartley, N., 2019. The threat of terrorism and tourist choice behavior. Journal of travel research, 58(3), pp.370-382.

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