Types of risks faced by the tourism industry

Critically analyse [i] the factors that influence the level of risk associated with crisis and disaster situations in the tourism, events and hospitality industry and [ii] the risk treatment options to manage crisis and disaster situations.

The number of people travelling for fun or for business purposes has increased significantly over the last decade (Mowforth & Munt, 2015). It is a reflection of this tourism is one of the fastest growing industries of the world and has become an important cog in the economic wheel of the majority of the nations (Mowforth & Munt, 2015).  According to a source, the annual revenue generated by this particular industry in the year 2016 was more than 7.6 trillion U.S. dollars (Veal, 2017). This figure becomes especially significant when the economic recession which the world is facing at the present moment (Veal, 2017). In addition to that, it is also to be noted that this particular amount of revenue generated by this fairly new industry is in excess of the revenue generated by some of the well established companies which have been in business for decades (Veal, 2017). Thus, it would be apt to say that the tourism industry is one of the important business sectors of the world and helps in the economic growth as well as the development of many of the nations of the work. However, the amount of risks which the industry faces is also significant (Page & Hall, 2014). This essay seeks to analyze the risks “associated with crisis and disaster situations in the tourism, events and hospitality industry” and the options which are available for the mitigation of these risks.

Risks form a significant part of all the business organizations which need to take into consideration in order to develop effective mitigation strategies for the risks identified (Hall, Timothy & Duval, 2012). In the opinion of critics, risk can be defined “as the situation or the condition from a business organization stands to gain or lose something very significant” (Hall, Timothy & Duval, 2012). It is significant to note that commonly people have attributed the negative connotations to the concept of risk however it is often seen that the various business organizations stand to gain a few things from the various risks which they face (Hall, Timothy & Duval, 2012). Therefore, it would be apt to say that risks are opportunities in disguise which if properly utilized can lead to the overall growth as well as the development of the business organization concerned. Thus, with this particular purpose the various business organizations develop various strategies for the effective mitigation of the business risks faced by them (Horner & Swarbrooke, 2016).

Man-made crisis and disaster situations

The tourism industry, although it is one of the fastest growing industries of the world, the amount of business risks which this particular industry faces is very significant. Some of the common risks faced by the business organizations belonging to the tourism industry are the threat from the competitors, the economic recession which the world is facing at the present moment, the fickle nature of the customers who keep on changing their destinations of their travel, the stringent visa legislations passed by the various nations of the world like the United States of America and others (Horner & Swarbrooke, 2016). In addition to all these, another significant risk which this particular industry faces is from the “risk associated with crisis and disaster situations” (Becken & Hughey, 2013). It is significant to note that these crisis and disaster situations can either be man-made or they can even be natural ones (Becken & Hughey, 2013).

Crisis and disaster situations are the ones during which the normal conduct of business is hampered and the concerned business organizations are not being able to transact their business in their usual manner and thus end of incurring a considerable amount of business loss (Buhalis & Amaranggana, 2013). These kinds of situations are more likely to affect the tourism industry in a negative manner more than any other business industry of the world (Buhalis & Amaranggana, 2013). The man-made crisis and disaster situations refer to the ones in which the root cause of the problem have been caused by the human beings like the various terrorist activities, political turmoil, religious issues, racism and others (Williams & Baláž, 2013). It is significant to note that all these factors have a considerable impact on the business of the various business organizations operational in the tourism sectors (Williams & Baláž, 2013). Therefore, it was seen that the tourism in France suffered a setback after the various incidences of violence in the city of Paris in the year 2017 (Veal, 2017). Similarly, the tourism in the nation of the Australia was hampered due to the various racists outburst in several parts of the nations (Wilks, Stephen & Moore, 2013). The nation of the United States of America also faced a similar situation after the incident of the World Trade Center  (Korstanje, & Clayton, 2012). Similarly, it is seen that the various countries of the world like Vietnam, Afghanistan, Syria and other where political conflicts form an important part of the society the tourism industry has suffered a serious setback (Korstanje, & Clayton, 2012). In addition to these, the tourists from the different parts of the world also avoid going to the places which has an orthodox outlook towards the other religion or the nation which is facing a religious problem (Korstanje & Tarlow, 2012). Thus, it is seen that the tourists from the various nations of the world seldom visit the countries of the world like Pakistan, Afghanistan and others which are facing religious problems (Korstanje & Tarlow, 2012). It is to be noted that almost all these factors are man-made and they have a considerable impact on the business of the business organizations related to the tourism industry. The primary reason for the travel being undertaken by the various people is their desire to see the world and also to relax and have a little time away from their busy as well as routine life (Dwyer et al., 2012). Therefore, it would be apt to say that if a particular nation or a location is having these kinds of problems and is unable to satisfy the basic requirements or the needs of these travelers then that nation or location will not be frequented by the tourists (Dwyer et al., 2012). Thus, it can be said that these man-made crisis and disaster situations pose a serious threat to the tourism industry and also likely to have a negative impact on the business of the business organizations related to the tourism industry (Wilks, Stephen & Moore, 2013).

Natural crisis and disaster situations

The natural crisis and disaster situations, on the other hand, are the ones over which the human beings have no control and they are seen a result of the changing climate of the world and the environmental damage which have been caused by the human beings in their brief period of existence on this earth  (Williams & Baláž, 2013). These kinds of crises and disasters pose several risks to the tourism industry and are likely to affect the prospects of the business organizations related to the tourism industry in a negative manner. These kinds of disasters generally include the various earthquakes, landslides, tsunamis, hurricanes, tornadoes, volcanic eruptions, and other natural calamities (Williams & Baláž, 2013). A common example of this is the decline in the business of the tourism industry of Nepal after the recent earthquake which it suffered (Veal, 2017). Another significant example of this is the decline in the business of the tourism industry of the island countries in the Pacific Ocean each time they experience a volcanic eruption (Williams & Baláž, 2013). The several hurricanes as well as the tornadoes which the United States of America also affects the prospects of the business organizations related to the tourism industry in s significant manner  (Buhalis & Amaranggana, 2013). It is significant to note that the human beings have absolutely no or very little control over the forces of nature and therefore the tourists from the various parts of the world generally like to avoid the places are susceptible to the various forms of natural crisis and disaste  (Buhalis & Amaranggana, 2013)r. Therefore, it would be apt to say these crises and natural disaster pose a considerable amount of threat to the business of the tourism industry in the countries which are prone to them and is likely to affect the their business in an adverse manner.

Strategies form an important part of the business of the various business organizations. It is significant to note that the various business organizations often take the help of many effective strategies to bring about the overall growth as well as the development of their business organizations (Hall, Timothy & Duval, 2012). In addition to the strategies which are likely to help the various business organizations to outrival their competitors or to capture the market, the various business organizations also take the help of several strategies for the mitigation of the various risks faced by them (Hall, Timothy & Duval, 2012). Therefore, it would be apt to say that these mitigation strategies form a core part of the various business strategies of the various business organizations. It is significant to note that these mitigation strategies play a significant role in the tourism industry as well.

Mitigation of risks in the tourism industry

The business of the various business organizations related to the tourism industry face the risks from both the man-made and natural crisis and disasters and therefore many of these business organizations often take the help of various mitigation strategies for the mitigation of the risks which these man-made and natural disasters pose to the business of the business organizations related to the tourism industry (Hall, Timothy & Duval, 2012). The first risk treatment option available to the business organizations related to the tourism industry is the development of their business in various diverse nations from different parts of the world (Hall, Timothy & Duval, 2012). The particular significant of this action lies in the fact that even if their business is being affected in one particular location or nation the business organization can compensate it with their business in other locations. In addition to this, the various business organizations related to the tourism industry can also take the help of the various natural disasters as a means to promote and also to expand it (Sadgrove, 2016). For example, Indonesia and other island nations of the Pacific Ocean are prone to several volcanic eruptions from the volcanic mountains which form a core part of their islands (Sadgrove, 2016). Thus, the various business organizations related to the tourism industry can utilize the volcanic mountains and the volcanoes of these island nations to attract more number of tourists to these island nations and thereby increase their annual revenue. Thirdly, the use of the latest technologies as well as innovations for the conduct of the business of the business organizations related to the tourism industry can also help to avert the risks which these business organizations face from these crisis and disasters (Sadgrove, 2016). The various business organizations related to the tourism industry can take the help of the meteorological departments of the nations in which they offer their services in a bid to avert any significant amount of risk which they face from the natural crises and disasters (Sadgrove, 2016). These in short are some of the strategies which the various business organizations belonging to the tourism industry can take the help of for the purpose of the mitigation of the risks faced by them on account of the natural and the man-made crises and disasters.

To conclude, people from different parts of the world like to see the world and this form an inherent desires of almost of all the individuals. It is a reflection of this that the tourism has flourished and prospered in the recent times. However, the business of the business organizations related to this particular industry are also susceptible to the same kind of risks which the other business organizations belonging to other sectors. More importantly, the business organizations belonging to the tourism industry also face a considerable amount of risks from the various man-made and natural crises and disasters which affect their business in a significant manner. Therefore, in response to this, the various business organizations belonging to the tourism industry often take the help of various mitigation strategies to mitigate the amount of risks faced by them and also to bring about an overall growth and development of their business organization.

References

Becken, S., & Hughey, K. F. (2013). Linking tourism into emergency management structures to enhance disaster risk reduction. Tourism Management, 36, 77-85.

Buckley, R. (2012). Rush as a key motivation in skilled adventure tourism: Resolving the risk recreation paradox. Tourism Management, 33(4), 961-970.

Buhalis, D., & Amaranggana, A. (2013). Smart tourism destinations. In Information and communication technologies in tourism 2014 (pp. 553-564). Springer, Cham.

Dwyer, L., Cvelbar, L. K., Edwards, D., & Mihalic, T. (2012). Fashioning a destination tourism future: The case of Slovenia. Tourism Management, 33(2), 305-316.

Hall, C. M., Timothy, D. J., & Duval, D. T. (2012). Safety and security in tourism: relationships, management, and marketing. Routledge.

Horner, S., & Swarbrooke, J. (2016). Consumer behaviour in tourism. Routledge.

Korstanje, M. E., & Clayton, A. (2012). Tourism and terrorism: conflicts and commonalities. Worldwide Hospitality and Tourism Themes, 4(1), 8-25.

Korstanje, M. E., & Tarlow, P. (2012). Being lost: tourism, risk and vulnerability in the post-‘9/11’entertainment industry. Journal of Tourism and Cultural Change, 10(1), 22-33.

Mowforth, M., & Munt, I. (2015). Tourism and sustainability: Development, globalisation and new tourism in the third world. Routledge.

Page, S. J., & Hall, C. M. (2014). The geography of tourism and recreation: Environment, place and space. Routledge.

Sadgrove, K. (2016). The complete guide to business risk management. Routledge.

Veal, A. J. (2017). Research methods for leisure and tourism. Pearson UK.

Wilks, J., Stephen, J., & Moore, F. (Eds.). (2013). Managing tourist health and safety in the new millennium. Routledge.

Williams, A. M., & Baláž, V. (2013). Tourism, risk tolerance and competences: Travel organization and tourism hazards. Tourism Management, 35, 209-221.