The United States hospitality industry: in the wake of 9-11 Essay - Part 11

Abstract

Even after close to a decade has passed, the memory of the horrific morning is still etched in the minds of many individuals - The United States hospitality industry: in the wake of 9-11 Essay introduction. That single event has changed the outlook, social as well as political, of many individuals on the manner they treat and regard one another. On one side, there are the victims, scarred by the loss of loved ones in the attacks; on the other hand is the business and political landscape, charred by the Islamist charge in the onslaught. Many industries are still feeling the effects of 9-11; one of them is the hospitality industry. Has the industry survived and has it recovered, or has it fallen under?

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Tourism and hospitality in the United States: Vibrant or dead?

            No one can be prepared for the events that transpired on that fateful morning on September 11, 2001. The attacks on the twin towers of the World Trade Center in New York City, the Pentagon and the attempted attack on the White House by cowardly Islamist terrorists caught everyone off guard. In the aftermath of the carnage on that day, people and industries tried to regain some form of control and sense in the confusion. People stopped all plans of travel fearing they might be the next victims of the Islamic cowards.

            A year after, the tourism and hospitality industry suffered freezing effects in their sector as well as the airline sector in the aftermath of the attacks (Stafford, Greg Yu, Alex Kobina and Larry Arnoo, 2002). For example, the government shut down the entire airline and aviation sector (Stafford, Yu, Kobina and Arnoo, 2002). After the Federal action, airlines basically scrounged the bottom for any available business that could be salvaged from the attacks (Stafford, Yu, Kobina and Arnoo, 2002). As this developed many of the airlines filed for bankruptcy while others sought out government loans to stay flying (Stafford, Yu, Kobina and Arnoo, 2002).

            But was the terrorist attacks carried out on 9-11 new in that the industry, hospitality, tourism and the airlines, failed to have adequate response mechanisms to cope with the crisis (Stafford, Yu, Kobina and Arnoo, 2002)? In the context of crisis identification and management, the instance of terrorist attacks and its effects are not that new (Stafford, Yu, Kobina and Arnoo, 2002). But the attacks of 9-11 can be considered an exception in this regard (Stafford, Yu, Kobina and Arnoo, 2002). What set the 9-11 attacks from other terrorist plots is the sheer scope of the attacks (Stafford, Yu, Kobina and Arnoo, 2002).

            On the ground immediately preceding the attacks, hotel managers, caught in a stunned state at the attacks, tried their best to contain the situation as best they can (Stafford, Yu, Kobina and Arnoo, 2002). Al-Qaeda, the barbaric Islamic group that launched the attacks, tried to incapacitate the Federal government in its operations (Stafford, Yu, Kobina and Arnoo, 2002). Hotel managers were primarily concerned with ensuring a safe haven for the guests billeted at their hotels while at the same time inquiring facts about the attack (Stafford, Yu, Kobina and Arnoo, 2002).

            The collective and individual relation to the attack was unprecedented (Michael Sturman, 2002). It would be a gross understatement to state that what transpired on that fateful day wrought by cowardly Islamist terrorists would not support the wide scale effects and consequences of the event (Sturman, 2002). The shock and fear that both hotel personnel and guest felt as a result of the attack reverberated throughout the scene (Sturman, 2002). Hotels, eating establishments and other locations sought to comfort the guests and frightened passengers were aided by their respective personnel (Sturman, 2002).

            These establishments’ personnel stayed on in the light of what happened (Sturman, 2002). In the immediate wake of the carnage, the industry was forced to wrestle with dropping rates of guests, drastic changes in travel habits and huge decreases in earnings (Sturman, 2002). All of these factors weighed heavily in the personnel, who were also dealing with the possible loss of loved ones in the attack (Sturman, 2002). In the year that followed, the industry was hard put to recover from the initial fallout of the disaster (Sturman, 2002).

            In the last quarter of 2001, the industry faced a loss of negative 20 to 25 factors in visitor numbers traveling to the United States (Air Transport Association, 2002). The figure tempered down to negative 10 to 15 percent in the first part of 2002 (Air Transport, 2002). The figure further improved to negative 5 to 10 percent at the end of the second half of 2002 (Air Transport, 2002). By the beginning of the third quarter of 2002, the industry grew on a flat rate (Air Transport, 2002).

            In the years before 9-11, the crimes of terrorists against the hotel and hospitality industry would be inclusive of hijackings and the killings of tourists (Stafford, Yu, Kobina and Arnoo, 2002).  For example, Sender Limoso (Shining Path), a local terrorist group operating in Peru, launched a murderous campaign specifically targeting the hospitality industry in the country (Stafford, Yu, Kobina and Arnoo, 2002). The group focused on murdering tourists, kidnapping them and attacking those in the hotels in the country (Stafford, Yu, Kobina and Arnoo, 2002).  They conducted this campaign from the 1980’s to the beginning of the 1990’s (Stafford, Yu, Kobina and Arnoo, 2002).

Terrorism and its use in achieving political gains is not a novel thing (Roy Lennon and Bay O’Leary, 2007). Of all factors that affect the tourism and hospitality industry, terrorism by far has the most weight (Lennon and O’Leary, 2007). It can be said the instance of terrorism affects this industry more heavily than any other (Lennon and O’Leary, 2007). The new ideology of terrorism is the one being alluded to as the culprit in the tragic 9-11 incident (Lennon and O’Leary, 2007).

Many individuals, in the immediate time frame of 9-11, responded with a huge amount of hesitation in flying to vacation spots, or for any other concern (Lennon and O’Leary, 2007). The mere suggestion of availing of flights was ruled out without any discussion, minor or major (Lennon and O’Leary, 2007). Airlines, faced with increasing costs and dwindling earnings, were forced to “mothball” many of their planes and obdurately reduced flights to reduce increasing costs (Lennon and O’Leary, 2007). Many airliners, such as SwissAir and MetroJet, were forced out of the market (Lennon and O’Leary, 2007). Others like United and USAir suffered major financial reverses in its profit margin (Lennon and O’Leary, 2007).

The government responded to the ailing airliners by crafting a $10 billion rescue package to aid the airlines to tide them over during the after effects of 9-11 (Lennon and O’Leary, 2007). On top of the loans, the government allocated another $5 billion in grant money to keep the planes flying and averting massive layoffs in the industry (Lennon and O’Leary, 2007). Aside from the airlines, the tourism and hospitality industry was similarly buffeted in the wake of the attacks (Lennon and O’Leary, 2007). The tourism industry not only in the United States but around the globe took a severe hit (Lennon and O’Leary, 2007).

In the estimation of The World Travel and Tourism Council (WTTC), the number of jobs lost in the tourism industry worldwide directly related to the attacks totaled 10 million across the world (Lennon and O’Leary, 2007). The effects were more felt by the smaller nations whose markets are heavily dependent on international tourism (Lennon and O’Leary, 2007). Many of these countries integrate a significant amount of their earnings on the tourism income they generate (Lennon and O’Leary, 2007). In more than 40 countries, tourism earning receipts are only overshadowed by oil in their sourcing of foreign exchange monies (Lennon and O’Leary, 2007).

In the wake of the terrorist attacks launched by the terrorists on 9-11, the United States hotel and hospitality industry sustained severe financial as well as psychological trauma after the 9-11 incident (Steven Campbell, 2003). Two years after, travelers were petrified of ever taking to the skies (Campbell, 2003). Since many of the usual flyers were afraid to avail of vacations via flying, most of the peripheral businesses, such as hotels and restaurants were constrained o reduce their personnel (Campbell, 2003). Many suppliers did not get compensation for the products they sold to the businesses (Campbell, 2003).

It can be understood that the hardest hit industry in the aftermath of the 9-11 attacks, and even the current financial turmoil currently buffeting the American and the world economies is the hospitality and entertainment sector (Osa Amadi, 2008). It is given in that the industry is susceptible to the very fluctuating nature of the market and the incertitude of the economy (Amadi, 2008). It is because that travel and vacation expenses are considered as non-primary budgetary allocations, hence they are the first to go in the event of a financial meltdown (Amadi, 2008). In crisis times, many people would shelve either temporarily or permanently plans for a vacation to cover allocations for the basics in life (Amadi, 2008).

These basics would cover food, housing and other necessary items essential to the existence of the family (Amadi, 2008). But this instance will in no way mean that the entertainment and hospitality industry will just turn over and die (Amadi, 2008). In cases like the 9-11 attacks and the ongoing financial recession, the people may have just opted not to travel by air but travel they did nonetheless (Amadi, 2008). Since the instances of people traveling did not cease, the industry then must adapt to the varying circumstances in the light of the developments (Amadi, 2008).

But even before the events of 9-11, the United States travel industry was affected already by the downturn of the United States economy in general (United States Department of Commerce, 2002). The economic reversals signaled a decrease in the growth of the travel industry (Commerce Department, 2002). But after the attacks, the industry suffered immediately from the attack (Commerce Department, 2002). In 2001, the domestic travel statistic registered a negative 3.5 percent average (Commerce Department, 2002). But it bounced back immediately after 2001, registering a positive 0.3 percent growth in 2002 (Commerce Department, 2002).

The industry was devastated by the 9-11 attacks (State University, 2009). In the two years after the barbaric attacks on New York on the 11th of September, 2001, the industry had to let go of 130,000 workers (State, 2009). Several major carriers were dangerously close to shutting down business operations due to the fallout effects of the disaster (State, 2009). Hotels reported a steep decline in room and occupancy rates after the attack (State, 2009). Even before 9-11, the industry was affected by the large scale contraction in the United States economy (State, 2009).

In 2000, the United States economy suffered a contraction (State, 2009). Prior to the downturn, the 1990’s saw the highest expansion of the United States economy in peace time history (State, 2009). Another factor in the slowdown of the hospitality industry was the Iraq conflict two years after 9-11 and subsequent regional conflicts (State, 2009). In the aftermath of the attacks, stringent measures were taken by the hotels and other hospitality based businesses to avert another incident (San San Lee, Stephen Barth, 2002). The daily operations of the hotels and other facilities will continue to be affected by the instance of the 9-11 attacks (Lee and Barth, 2002).

Hotels after the attacks began to employ more rigid selection systems (Lee and Barth, 2002). These systems at the time necessitated the replacement of the old procedures and replaced with more inflexible standards (Lee and Barth, 2002). Also, possible lapses in security protocol had to be addressed to close down potential holes in the system (Lee and Barth, 2002).

After it all, an upswing in the hospitality industry

            After the period of economic downturn as a result of the 9-11 attacks, the hospitality industry seems to have recovered substantially from the fallout effects of the September 11 attacks (Campbell, 2002). In a speech before Congress, officials of the American Hotel and Lodging Association bought attention the positive trends in the hospitality industry (Campbell, 2002).   It was noted in their testimony before Congress that in 2000, the hospitality industry was employing close to 8 million workers (Campbell, 2002).  But with that total, it was indirectly supporting one out of seven Americans in the economy (Campbell, 2002).

From the start to the middle of 2004, the visitors who enplaned into the United States jumped by around 17 percent from the figures of 2003 (State, 2009). From the figures the previous year, the number rose to around 14.5 million visitors who came to the United States (State, 2009). But at the time, it was said that the circumstances of these new travelers would continue for some time (Amadi, 2008). But it was also predicted by industry analysts that the hospitality will be able to adapt to the new scheme (Amadi, 2008).

In the short to medium term projections for the industry, there will surface the sector of those people who will decrease their expenditures for travel purposes (Amadi, 2008). As earlier stated, travelers will spend less on vacation expenses and the industry is expected to adapt to the decrease in traveler spending (Amadi, 2008). The industry is expected to lose out on the high end vacation spenders as people who still opt to have vacations will focus on spending for value packages and services (Amadi, 2008). Airlines and other elements in the industry must be able to cope with this new trend (Amadi, 2008).

In the latter part of 2002, the industry welcomed the opening of at least 70 new sites with capacity of 19,000 rooms (Campbell, 2002). At the time, apart from the registered capacity for rooms and hospitality facilities, there were more than 740 projects in the pipeline and more than 2,000 rooms to be added to that number (Campbell, 2002). New rooms totaling 330,000 rooms will be added after meeting requirements for financial and permits for their use (Campbell, 2002). Analysts attribute this fact that the industry has come out of the down season and has begun the upswing towards recovery (Campbell, 2002).

An immediate reaction to the attacks was the passage by the United States Congress of the USA Patriot Act (Sturman, 2002). With the enactment of this particular law, the employers in the hospitality as well as other sectors were given the muscle needed to investigate the background of their potential employees as well as their current work force (Sturman, 2002). The law also gave the government legal mandate to investigate possible threats to the nation with regard to terrorism (Sturman, 2002). But a line must be drawn on the privacy of the employer and that of their guest (Sturman, 2002).

            In the light of the attacks, there was a need to buttress screening procedures that are utilized by employers in their hiring system (Lee and Barth, 2002). At the time, the practice and instance of negligent hiring was prevalent in the industry (Lee and Barth, 2002). Since the liability of suits arising from negligent hiring practices would be on the employer, the need arose for a more rigid process of background screening before the potential employee is given a chance to work in the facility (Lee and Barth, 2002). But should the employer be stricter in monitoring the employee in the light of the 9-11 attacks (Lee and Barth, 2002).

            The very reason that the employer must be stricter in monitoring their employees is that the attacks happened in the fist place (Lee and Barth, 2002). But with the development of new technologies, the task of regulating the movements of employees has become easier for the employer (Lee and Barth, 2002). In this light, employers of these facilities have begun monitoring their employees via the various electronic fora in the workplace (Lee and Barth, 2002). Along with employees, guests have also been monitored by operators of such establishments (Lee and Barth, 2002). Consistent with legal statutes and procedures, the industry keeps watch over the guests they entertain in their establishments (Lee and Barth, 2002).

            One of the reasons the hospitality and related industries must consider in the upswing is the attitude of the travelers in resuming their activities (Lennon and O’Leary, 2007). From the factors seen, the traveling public seems to have shrugged off the fear from the attacks (Lennon and O’Leary, 2007). Any fear of doubts that lingered in the past must be removed from the mindset of people. If not, then the purpose of the 9-11 attacks would have succeeded.

References

Air Transport Association. (2002). U.S. air travel forecasted performance. Retrieved March 5, 2009, from http://www.destinationmarketing.org/web_images/presentations/PDI_2002/PPT/W103a.ppt#517, 4, U.S. AIR TRAVEL FORECASTED PERFORMANCE

Amadi, O. (2008, November 28). Global financial crisis: challenge for hospitality industry. Business Day. Nigeria.

Barth, S., Lee, S.S. (2002). The impact of 9/11 on the hospitality industry. Retrieved March 5, 2009, from   http://www.abanet.org/rppt/meetings_cle/2002/2002spring/RealProperty/Thursday/EconomicCatastrophes/BarthPaper1.pdf

Campbell, S.E. (2003). The hospitality industry is stable despite the nation’s economic slump. The Black Collegian.

http://www.articlearchives.com/travel-hospitality-tourism/lodging-hotels-motels/1003846-1.html

Lennon, R., O’Leary, B. (2007). International terror attacks: do they have an effect on German travel consumers’ perceptions and future travel plans? ASSBS E-Journal, Volume 3, number 1, pp.1-10.

 http://www.asbbs.org/proceedings/Lennon%20OLeary%20

ASBBS%20EJ2007.pdf

Stafford, Yu, G., Arnoo, L., Kobina, A. (2002). Crisis management and recovery: hoe Washington, D.C. hotels responded. Cornell Hotel and Restaurant Administration Quarterly.

State University. (2009). Looking into hospitality and recreation-Hotel industry, food service industry, recreation industry, travel industry, employment outlook for hospitality and recreation. Retrieved March 5, 2009, from http://careers.stateuniversity.com/pages/503/Looking-Into-Hospitality-Recreation.html

Sturman, M. (2002). The hospitality industry: one year after September 11, 2001. Cornell Hotel and Administration Quarterly.

http://www.allbusiness.com/accommodation-food-services/349289-1.html

United States Department of Commerce. (2002). U.S. government: what are we doing? Retrieved March 5, 2009, from http://www.destinationmarketing.org/web_images/presentations/PDI_2002/PPT/W103a.ppt#524, 9, U.S. GOVERNMENT: What are we doing?

 

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