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International Tourist Arrival in India: Impact of Mumbai 26/11 Terror Attack
Abstract
India experienced terror attack on its financial and entertainment capital Mumbai on 26 November 2008. There were 12 coordinated shooting and bombing attacks which lasted four days, killing 164 and injuring several hundred (Press Information Bureau, 2008, HM announces measured to enhance security, New Delhi: Ministry of Home Affairs, GOI.). The attack was largely targeted towards international tourists visiting Mumbai at the hotels like Oberoi Trident, The Taj Mahal Palace and Tower and Leopard Café. The objective of this article is to study the impact of the 26/11 terror attack on the arrival of international tourists in India. Very few studies in the literature have examined the impact of terrorist attacks on the tourism industry. (for more recent work see Arana & Leon, 2008, Annals of Tourism Research, 35, 299–315; Raza & Jawaid, 2013, Economic Modelling, 33, 65–70). Our article tries to add evidence to this growing literature. Further in analyzing tourist demand, several researchers (see Song et al., 2012 for a review) have studied the relationship between tourism and economic growth. While studies have found unidirectional relationship between international tourism and economic growth (e.g., Balaguer & Cantavella-Jorda, 2002; Oh, 2005), there are others who find evidence supporting bidirectional relationship (e.g., Dritsakis, 2004; Kim & Chen, 2006, Tourism Management, 27, 925–933). In our study, we assume a bidirectional relationship between foreign tourists arriving in India and its economic condition. In the present study, we analyze the impact of 26/11 terror attack at Mumbai on the international tourist arrival in India. The analysis is done using the vector autoregression (VAR) model, where the foreign tourists arriving in India is a function of economic condition prevailing in the country, captured here by real gross domestic product of India and the terror attack dummy variable. Our results indicate that post 26/11 there has been a significant decline in the number of foreign tourists arriving in India. We further analyze the disaggregated airport level data, where similar significant negative impact were found for Mumbai and Delhi airports.
... Most of the current researches measure the mutual relationship and recognized the one way causal inverse link fromincidence of terrorists and hospitality. Not many of them Samitas, Asteriou (2018) for Greece, Bhattacharya and Basu (2010) and Gunasekar, et al., (2018) for India, similarly, for Middle East Basu and Marg (2010) and Bassil, (2014), Hamadeh and Bassil (2017) study in favor of Lebanon and Lennon and O'Leary (2004) in support of Germany. Likewise, Trindade (2017), examine the impact of activist' shits in Turkey as well as Egypt on visitation of Portugal, and established a direct and optimistic effect. ...
... The short-term results are alike in terms of the symbol of the long-term and alike with the previous expectations, but in the short-term the calculated variable is statistically significant at one percent level of significance in the Valley. These findings are in line with the abundant of preceding researches, for example Sönmez (1998), Lepp and Gibson (2003), Feridun (2011), Raza and Jawaid (2013), and Gunasekar, Patri (2018). ...
Tourism industry is considered a key driver promoting socioeconomic development in under development economy, but there are several factors which hindering this development. The terror incidence in swat valley have severely affected tourism industry of the area. Terrorism is a growing hazard across the globe with severs socio-economic consequences. Pakistan is also playing it’s was against terrorism that it has affected its various economic activities including tourism. During the first decade of the ongoing century, northern mountainous area of Khyber Pakhtunkhwa, which was famous for tourism, was badly affected by incidences of terror2.The objective of this research work is to estimate the impact of terror incidents on domestic tourism in Pakistan, Khyber Pakhtunkhwa, Swat Valley (TA –domestic visitors’ arrivals).The current research is an effort to evaluate the short-term and long-term association between events of terror and domestic visitation. Primary data was collected using stratified random sampling techniques and interview method and secondary data was taken from various sources to evaluate the model. Auto Regressive Distributive Lag (ARDL) model is used to evaluate the data. The ARDL bound test confirms the co-integration between terror incidents and tourism. Additionally, the examined findings undoubtedly ensure the negative short-term and long-term impact of events of terror on domestic tourism in the study area.
... For example, after the Boston Marathon bombing incident in 2013, the tourism industry of the United States recovered in a mere 2 weeks due to the quick response of emergency teams and the national disaster management plan set by the government (Shipway, 2018). However, the tourism industry of India, which contributes about 6% to the GDP, did not recover for a year after the Mumbai Taj Mahal hotel bombing in 2008 (Gunasekar et al., 2018). Similarly, the tourism industry of Pakistan, throughout its history has also suffered heavily from disasters. ...
Derived from Supply Chain Management (SCM), Tourism Supply Chain (TSC) is the integration of tourism-related activities, and is more sensitive to an uncertain event like a natural disaster due to its high dependency on nature. Moreover, compared to developed countries, the TSC in developing countries like Pakistan is more susceptible to natural disasters and disruptions owing to the country’s weak infrastructure. As a result, the tourism sector in developing countries faces serious threats because of their weak resistance to uncertain natural disasters. Therefore, this study aims to enhance the resilience of the TSC in developing countries by evaluating different threats in top tourism hotspots using the Fuzzy Analytical Hierarchy Process (FAHP). Then, based on the FAHP results, Fuzzy Quality Function Deployment (FQFD) is used to propose the best risk mitigation strategies to deal with those threats. Furthermore, the study also estimates the cost of implementing the top mitigation strategy in developing countries to check the practicality of the results. The results showed that planning and implementation of emergency response is the best strategy to deal with natural disasters in Pakistan. Similarly, real-time monitoring and forecasting ranked as the second-best strategy to enhance TSC resilience. The use of FAHP-based FQFD in the area of tourism and improving its resilience, especially from the lens of developing countries is the prime novelty of the study.
... The results of the study concerning the terrorist attack in Mumbai, India, confirm that these attacks have a significantly negative impact on tourism demand (Gunasekar, Patri, & Narayanan, 2017). ...
International Thematic Monograph: Modern Management Tools and Economy of Tourism Sector in Present Era – 2021/2022 is the sixth annual publication of this kind published by the Association of Economists and Managers of the Balkans in cooperation with the Faculty of Tourism and Hospitality, Ohrid, North Macedonia. Presented thematic monograph characterizes the following facts: • 23 members of its Editorial Board come from 6 different countries of the Balkans region: 6 from Serbia, 6 from Montenegro, 5 from Croatia, 4 from North Macedonia, one from Slovenia, and one from Bosnia and Hercegovina; • Out of more than 60 chapters that have been submitted for publication, it has 37 double-blind peer-reviewed chapters accepted and published in English on more than 650 pages; • All chapters have been scanned with Crosscheck (powered by Turnitin) and have ORCID iD integration; • It gathered 93 authors from 12 different countries: Albania, Bosnia and Herzegovina, China, Croatia, Czech Republic, Italy, Montenegro, North Macedonia, Serbia, Slovak Republic, Slovenia, Slovenia who come from different faculties, universities, colleges, scientific institutes, enterprises, ministries and associations – listed at the next page; • 43% of all listed authors originate from abroad; • In a review process of a thematic monograph their contribution gave 79 highly esteemed reviewers all with PhDs; • Among listed peer reviewers 50,63% of them are international by country of origin; • The average grade of all published chapters obtained according to all reviews is 74,68 out of 100.
... The results of the study concerning the terrorist attack in Mumbai, India, confirm that these attacks have a significantly negative impact on tourism demand (Gunasekar, Patri, & Narayanan, 2017). ...
This research analyses the results of the Belt and Road Initiative in 17 Central, Eastern, and Southeastern European countries that signed the China-Central and Eastern European Countries Initiative. The subject of the research is the extent to which the initiative would provide benefits for the growth and development of these countries. Special attention will be paid to the link between infrastructure development and FDI, and whether environmental standards are taken into account in the projects belonging to the domain of the Initiative. The authors analyse which areas of economy belong to Chinese investments in the selected countries, and whether the countries have taken into account strategically important investments for the society and the country's economy. One of the goals of the research will be whether in the previous period the countries regularly settled their debts to China and how the COVID-19 crisis has had an impact on debt repayment.
... In addition, terrorism is a big challenge and halts the operations of tourism industry badly. Tourist inflow and armed conflict are negatively correlated and is a sole cause responsible for low tourist inflow and defectively hits the devotion of tourists for a picky destination(Depuma, 2015;Gunasekar, Patri and Badri, 2018; Global Terrorism Index, 2016; Parida, Bhardwaj and Joyita, 2015). So, terrorist attacks badly affected the normal functioning of tourism industry in India. ...
Bleisure tourism in India is experiencing a notable upswing, driven by various factors contributing to its improvement. The country's growing prominence as a global business hub, rich cultural heritage, and diverse leisure offerings make it an attractive destination for travelers seeking a blend of work and leisure experiences. The major cities in India got renowned for their business infrastructure, are also home to vibrant cultural attractions, historical landmarks, and natural wonders, enticing business travelers to extend their stays for leisure purposes. Moreover, advancements in transportation, digital connectivity, and accommodation options cater to the needs of Bleisure travelers, facilitating seamless transitions between work and leisure activities. In this chapter with increasing recognition of the benefits of blending business with leisure, the challenges will also be observed. These challenges, hurdles, and issues inviting the delay in this direction would be discussed while focusing on the solution approach, especially emerging Indian cities in this context.
This study examines how international tourism, foreign aid inflow, international trade and economic growth are responding to terrorism in Sub-Saharan Africa (SSA), and how institutions are moderating these interactions. To answer these questions, we examined a panel of 40 SSA countries for the period 2010–2020 based on the system generalised method of moments framework. Our results revealed that: (a) terrorism impacts adversely on tourism, foreign aid inflow, trade and overall economic growth in SSA; and (b) institutional quality has not been effective in mitigating the adverse effects of terrorism on tourism, foreign aid inflow, trade and economic growth in SSA. Policy implications are discussed.
JEL Codes: C33; F10; F35; F43; L83; N20
Indian Tourism brings together leading experts from all over the world to assess the challenges and opportunities of the tourism sector in India and its correlation to the country’s economic performance and prospects.
The purpose of this study was to determine how political instability influences inbound tourist flows in Ukrainian cities, performance of tourism-related businesses, and tourism-based profits in general. This study allows us to present the impact of various events on the tourism economy in Ukraine; however, the available secondary data with the unobserved component model procedure detection give only a general overview of the situation. Thus, interviews were conducted with experts, including managers of accommodation facilities, employees of municipal tourism development departments, and researchers investigating tourism. Interviews with experts revealed opportunities, threats, and future scenarios of tourism in Ukraine in the face of five years of political instability. The results support previous findings that political instability reduces tourist traffic over the short term. On the other hand, the interviews with experts representing major province cities have shown different results for the long-term perspective. Cities with developed tourism sectors in areas away from the place of conflict are beneficiaries of political instability. Disadvantaged are cities that had their tourist flows based on the citizens of the aggressor’s country—the Russian Federation. Cities that are underdeveloped in terms of tourism did not experience a significant impact of the political instability in eastern Ukraine.
Tourism is an essential industry for India for its economic advancement. Tourism contributed to one-tenth of India’s GDP and 42 million jobs in 2018. India has launched various measures to promote and push the tourism industry. Amidst the various schemes of the Government of India, Clean India Mission seemed to have a positive impact on the tourism Industry. The study aims to examine the impact of the Clean India campaign on four cities of India, and in turn, the impact on the tourist flows in these cities. The cities identified for this study are the top five tourist destinations of India during 2019: Delhi, Mumbai, Chennai, Agra and Jaipur. Clean India Mission is an effort to deal with all kinds of solid waste, sanitation and hygiene issues and other forms of pollution. Clean India Mission is an initiative to restore India’s natural beauty by making the country cleaner and pollution-free.
Germany and Great Britain are traditionally two of the most important sources of tourism for Greece. The purpose of this paper is to investigate changes in the long-run demand for tourism to Greece by these two countries. In order to explain the demand for tourism, we are using a number of leading macroeconomic variables, including income in origin countries (Germany and Great Britain), tourism prices in Greece, and transportation cost and exchanges rates between the three countries. Annual data from the three countries, covering the period from 1960 to 2000, are employed. Augmented Dickey–Fuller test for unit root is examined in the univariate framework and Johansen's maximum likelihood procedure is used to test the cointegration method and to estimate the number of cointegrating vectors of VAR model. Error correction models are estimated to explain German and British demand for tourism to Greece.
This paper aims to provide the most up-to-date survey of tourism economics research and to summarise the key trends in its recent development. Particular attention is paid to the research progress made over the last decade in respect of approaches, methodological innovations, emerging topics, research gaps, and directions for future research. Remarkable but unbalanced developments have been observed across different sub-research areas in tourism economics. While neoclassical economics has contributed the most to the development of tourism economics, alternative schools of thought in economics have also emerged in advancing our understanding of tourism from different perspectives. As tourism studies are multi- and inter-disciplinary, integrating economics with other social science disciplines will further contribute to knowledge creation in tourism studies.
A consumer-choice theoretical model is developed to test the regional effects of terrorism on competitors' market shares in the tourism sector where involved countries enjoy significant tourism activities but are subject to a high frequency of terrorist attacks. Using data for three Mediterranean countries—Greece, Israel, and Turkey—for the period from January 1991 to December 2000, results show significant own and spillover effects of terrorism on market shares. Terrorist incidents are decomposed to better identify the impacts of terrorism on tourism. Significant contagion effects of terrorism on market shares in the region are documented, as is evidence of the effect of terrorism on the substitutability between countries.
Based on a review of 300 cases of acts of crimes and violence that occurred at tourist destinations around the world in the last decade, a comprehensive typology was created. The objectives of this typology were to classify the attributes of acts of crime and violence, to analyze the differential effects that such attributes have on tourism demand, to examine the effectiveness of methods used for prevention and recovery from such acts, and to identify the parties responsible for prevention and recovery.
This paper reviews the published studies on tourism demand modelling and forecasting since 2000. One of the key findings of this review is that the methods used in analysing and forecasting the demand for tourism have been more diverse than those identified by other review articles. In addition to the most popular time-series and econometric models, a number of new techniques have emerged in the literature. However, as far as the forecasting accuracy is concerned, the study shows that there is no single model that consistently outperforms other models in all situations. Furthermore, this study identifies some new research directions, which include improving the forecasting accuracy through forecast combination; integrating both qualitative and quantitative forecasting approaches, tourism cycles and seasonality analysis, events' impact assessment and risk forecasting. r 2007 Elsevier Ltd. All rights reserved.
The results of a study conducted on the impact of acts of terrorism on tourism demand in Israel during the period of May 1991 to May 2001 confirmed the hypothesis that the frequency of acts of terrorism had caused a larger decline in international tourist arrivals than the severity of these acts. The implications of this study are that in cases similar to Israel, tourist destinations can recover from even severe acts of terrorism, as long as the terrorist acts are not repeated. However, when acts of terrorism—whether of high or low severity—occur at high frequency and regular intervals, tourism demand will constantly decrease, and eventually the destination’s tourism industry will come to a standstill.
An examination of the behavioral effect of repeated terrorist attacks reveals that local residents (of the attacked area) appear to be much less sensitive to this risk than international tourists. Furthermore, the limited sensitivity on the part of local residents seems to diminish with time, even when the attacks continue. An experimental study shows a similar pattern in a laboratory experiment that focuses on a basic decision task: when making a single decision based on a description of the problem, people tend to be more risk averse. Personal experience with the problem reduces this sensitivity. These results highlight an interesting relationship between basic decision-making research and the study of the response to traumatic events.
This paper examines the role of tourism in the Spanish long-run economic development. The tourism-led growth hypothesis is confirmed through cointegration and causality testing. The results indicate that, at least, during the last three decades, economic growth in Spain has been sensible to persistent expansion of international tourism. The increase of this activity has produced multiplier effects over time. External competitivity has also been proved in the model to be a fundamental variable for Spanish economic growth. From the empirical analysis it can be inferred the positive effects on income that government policy, in the adequacy of supply as well as in the promotion of tourist activity, may bring about. Copyright 2002 by Taylor and Francis Group
Este trabajo aporta evidencia acerca de la importancia de los ingresos de divisas por turismo en el crecimiento económico español experimentado en las últimas tres décadas. Los resultados econométricos indican que existe una relación de largo plazo entre el crecimiento de la renta del país y los ingresos procedentes del turismo internacional. Esta relación econométrica es única, y pone de relieve que la actividad turística tiene importantes efectos multiplicadores. Adicionalmente, se pone de relieve que la competitividad externa, cuyos efectos sobre el crecimiento económico son notablemente significativos, debe ser tenida en consideración a la hora de formular una relación a largo plazo. A la luz de los resultados obtenidos, cabe esperar que las distintas políticas publicas tanto en la adecuación de la oferta como en la promoción de la actividad turística puedan tener efectos beneficiosos sobre la renta. This paper examines the role of tourism in the Spanish long-run economic development. The tourist-led growth hypothesis is tested. The results indicate that, at least, during the last three decades economic growth in Spain has been sensible to persistent expansion of international tourism. The increase of this activity has produced multiplier effects over time. External competitivity has also been proved in the model to be a fundamental variable for Spanish economic growth in the long run. From the empirical analysis it can be inferred the positive effects on income that government policy, in the adequacy of supply as well as in the promotion of tourist activity, may bring about.
On Tuesday morning, September 11, 2001, 19 suicide hijackers took control of four United States commercial airplanes and crashed them, respectively, into the Twin Towers of the World Trade Center (WTC) in New York City, the Pentagon in Washington, DC, and in a field in Somerset County, west of Pittsburgh, Pennsylvania. An estimated 5000–6000 people were killed. The cost of the tragedy, in terms of rebuilding, is estimated at about $105 billion (CNN Television News Report, October 5, 2001). The tourism industry in America was severely affected, with immediate declines in airline passenger loads of 50% and more, and similar declines in hotel occupancy.This article describes the impacts of the September 11 terrorist attacks on the travel and tourism industry in the USA. It is compiled from the wealth of secondary data published in the print media, news reports on major television networks in the USA (e.g., ABC, CBS, NBC, and CNN), and informal discussions with 50 Executive MBA students and 21 faculty members at a university in the southeastern part of the USA. It is divided into six parts: (1) background: sequence of events; (2) impacts on the travel and tourism industry; (3) managerial implications; (4) future research; (5) limitation; and (6) summary and conclusion.
This paper studies the impact of the September 11 terrorist attacks and its after-effects on Spanish airline demand. Using monthly time series data from 1980–2003, we find that September 11th resulted in an ongoing negative demand shock although smaller than that experienced in the US but particularly in relation to international passengers.
The purpose of this paper is to devise a methodology for estimating the impact of transnational terrorism on tourism. Using monthly data from 1970–1988, we estimate the relationship between terrorism and tourism for Spain. We find that terrorist events have had a significant negative impact on the number of tourists visiting Spain. A typical incident is estimated as scaring away just over 140,000 tourists when all monthly impacts are combined. Moreover, the causality is unidirectional: terrorism affects tourism, but not the reverse.
This study investigates the causal relations between tourism growth and economic expansion for the Korean economy by using Engle and Granger two-stage approach and a bivariate Vector Autoregression (VAR) model. Two principle results emerge from this study. First, the results of a cointegration test indicate that there is no long-run equilibrium relation between two series. Second, the outcomes of Granger causality test imply the one-way causal relationship of economic-driven tourism growth. The hypothesis of tourism-led economic growth is not held in the Korean economy. This consequence is supported by testing the sensitivity of causality test under different lag selections along with the optimal lag.
The US airlines’ revenue passenger miles series are examined to objectively assess the effect of the September 11th terrorist attack on the performance of the industry controlling for the general economic conditions. A Vector Autoregression model (VAR) with revenue passenger mile and real gross domestic product series is utilized. The estimated effect of the attack supports the federal government's appropriation of $5 billion cash compensation to the airlines. Analysis at the individual air carrier level confirms that not all the US major and regional airlines were affected in the same manner. United, Northwest, US Airways, and Delta account for more than 63% of the aggregate decline in the US airline industry performance. Three air carriers: JetBlue, Aloha and Atlantic Southeast were able to significantly improve their performance immediately following the September 11th attack.
Terrorism and threats to national security are documented to have impacts on tourism demand. This paper focuses on the short-run impacts of the September 11 attacks in New York on tourist preferences for competing destinations in the Mediterranean and the Canary Islands. The proposed approach is a stated preference model based on two different samples taken at different points in time in relation to terrorist attacks. Results show that the attacks caused a shock to tourists’ utility, and a change in the image profile of destinations. Moreover, it was found that while some destinations experienced a strongly negative impact on their image and attractiveness, others were upgraded as a consequence of terror events.RésuméL’impact du terrorisme sur la demande touristique. Il est vérifié que le terrorisme et les menaces pour la sécurité nationale ont des impacts sur la demande touristique. Cet article porte sur les impacts à court terme des attentats du 11 septembre à New York sur les préférences des touristes pour des destinations en concurrence en Méditerranée et aux Canaries. L’approche est un modèle de préférence déclarée basé sur deux échantillons qui ont été pris à des moments différents par rapport aux attaques. Les résultats montrent un choc sur le modèle d’utilité des touristes et un changement sur le profile de l’image des destinations. En plus, certaines destinations ont subi un impact fortement négatif sur leur image et leur attrait, tandis que d’autres ont été revalorisées en conséquence des événements touristiques.
This study examines the causal relationship between tourism expansion and economic development in Taiwan. A Granger causality test is performed following the cointegration approach to reveal the direction of causality between economic growth and tourism expansion. Test results indicate a long-run equilibrium relationship and further a bi-directional causality between the two factors. In other words, in Taiwan, tourism and economic development reinforce each other. A discussion follows and managerial implications are identified based on the empirical findings.
This paper quantifies the impact that terrorism has had on tourism since 1970. To accomplish this task, the authors estimate a forecasting equation for a country's (region's) share of tourism using an ARIMA model with a transfer function based on the time series of terrorist attacks in the country (or region). Their results focus on three European countries--Greece, Italy, and Austria--that have experienced noteworthy terrorist attacks since 1970. The authors also calculate revenue losses for continental Europe. Since 1974 these losses are large, amounting to sixteen billion SDRs in present value terms. Much of the loss occurred in the 1980s. Copyright 1992 by WWZ and Helbing & Lichtenhahn Verlag AG
In this article we compare three models of the stochastic behavior of commodity prices that take into account mean reversion, in terms of their ability to price existing futures contracts, and their implication with respect to the valuation of other financial and real assets. The first model is a simple one‐factor model in which the logarithm of the spot price of the commodity is assumed to follow a mean reverting process. The second model takes into account a second stochastic factor, the convenience yield of the commodity, which is assumed to follow a mean reverting process. Finally, the third model also includes stochastic interest rates. The Kalman filter methodology is used to estimate the parameters of the three models for two commercial commodities, copper and oil, and one precious metal, gold. The analysis reveals strong mean reversion in the commercial commodity prices. Using the estimated parameters, we analyze the implications of the models for the term structure of futures prices and volatilities beyond the observed contracts, and for hedging contracts for future delivery. Finally, we analyze the implications of the models for capital budgeting decisions.
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