Risk & Crisis Management in Tourism Sector:
Recovery from Crisis
in the OIC Member Countries
29
1.6. Impacts of Crises and Recovery in the Tourism Sector
1.6.1. Impacts of Crises
Any crisis in the categories reviewed above will damage the tourism sector’s ability to operate
normally, either because of damage to transport and other infrastructure and facilities, or because
of the perception that the destination is unsafe. As Laws and Prideaux (2005) point out, a crisis
affecting tourism will be quickly followed by a decline in visitor arrivals with a consequent loss of
jobs, reduction in business turnover and profits, falling tax revenues for the government, and (in
the case of a crisis of longer duration) a failure by overseas and domestic entrepreneurs to invest
in facilities. This was confirmed by the survey of businesses carried out for this report, which stated
that the fall in visitor numbers was the most significant impact of crises. Even an event of short
duration can cause considerable financial losses: Hall (2010) observed that the eruption of the
Icelandic volcano Eyjafjallajokull in 2010 caused losses of US$ 1.7 billion because of week-long
restrictions to flights over Europe.
Sensitivity to destination disruption differs between tourist generating markets and segments and
according to the type of disruption, with different markets beingmore sensitive to different aspects,
depending on their age, background and experience of travel (Liu et al, 2016). As shown in Figure
1.3, the survey carried out for this report indicated clearly that West Europeanmarkets are thought
to be the most sensitive to crises, followed by North America.
Figure 1.3: Sensitivity of tourismmarkets to crisis
3,28
3,28
3,54
3,62
3,71
4,00
4,13
1 2 3 4 5
South East Asia
North East Asia
North America
Southern/Medit. Europe
Central/Eastern Europe
Western Europe
Europe (Overall)
Not at all sensitive Not very
sensitive
Moderately
sensitive
Very
sensitive
Extremely
sensitive