Tourism demand patterns in turbulent times: analysing Welsh accommodation occupancy data for 1998–2001

Different events in 2001, most notably an outbreak of foot and mouth disease and the 11 September terrorist attacks in the USA, caused many tourist businesses in the UK to experience significant changes in demand volumes. This paper examines the occupancy performance of serviced accommodation establishments in Wales from 1998 to 2001 and focuses especially on the changes in demand patterns in 2001. The approach is based on a combination of principal components and cluster analysis. The results are used to group establishments with similar performance profiles. Detailed conclusions are drawn about the temporal and spatial shifts in demand in 2001. ‘Winners’ and ‘losers’ are identified and several concrete implications for marketing and development policies are discussed. Copyright © 2004 John Wiley & Sons, Ltd.     

Impact analysis of September 11 on air travel demand in the USA

This study uses an intervention model to look at the impact of the September 11, 2001 terrorist attack on air transport passenger demand in the US. The result showed that both domestic and international air traffic was significantly impacted for 1 and 2 months, respectively. The impact pattern was thus abrupt and temporary, instead of gradual and permanent. The approach also provides better forecasts than the seasonal ARIMA benchmark.     

Network industries in collision: aviation infrastructure capacity,financing and the exposure to traffic declines

This paper discusses how various aviation infrastructure service providers have dealt with the fall off in airline traffic following the terrorist attacks in the US on September 11th. It shows that these organizations have relatively high fixed costs and low incremental costs for providing services. As such, small changes in traffic have large impacts on revenue because revenues are generally proportional to activity. However, because of the high component of common and fixed costs, airport and ATS provider costs do not change in proportion to activity. When traffic declines, revenue shortfalls can arise because most airport and ATC systems operate on a simple cost recovery basis. The responses to the events of September 11th have also caused substantial increases in security costs. To the extent these costs are passed forward to system users, they will increase the price of travel and impact patronage further. Airlines also have substantial fixed capacity costs. The declines in traffic are often felt as an erosion of yields and fares as carriers seek to maintain traffic loads for the capacity they are going to operate. In general, the ability to pass along cost increases from providers to airlines or from airlines to passengers depends on relative supply and demand elasticities. Because infrastructure provision is often a monopoly, and the demand for airline services is price elastic, we suggest that most of the cost increases will be borne by the airlines. We also suggest that short-haul flights will be most severely impacted because the fees and taxes are a larger proportion of the fare for these flights. We also examine the extent to which additional infrastructure costs imposed on operators may exacerbate the downturn in their traffic.     

Airline strategy in the 2001/2002 crisis—the Lufthansa example

This article presents a European view of the global airline crisis in 2001/2002. The underlying cyclical nature of the airline business and flexibilization as a strategy to manage the cycles are described. Crisis management at Lufthansa German Airlines following the terrorist attacks of September 11, 2001 is discussed in depth. In Europe, the slump in air traffic demand was soon matched by an industry-wide capacity reduction. Reduced overcapacity helped to stabilize yields and corporate results. However, managing the current crisis does not only aim at restoring the pre-crisis state, but rather at forming a more healthy business environment.     

Race to the bottom or swimming upstream: Performance analysis of US airlines

Data envelopment analysis is used to examine inter-temporal and peer group airline efficiency. Results for the US for 1985–2006 indicate that airline performance is converging over time. In particular, airlines inter-temporal inefficiency peaked earlier and then converged. Furthermore, using Tobit specifications it is seen that while demand intensity matters less in determining airlines inter-temporal inefficiency, their influence is stronger in determining peer group inefficiency. Block time, a representative of operational factors, tends to negatively impact airlines efficiency by imposing burdens on airline operations. Among the structural cost and revenue factors, fuel cost tends to affect inter-temporal inefficiency more robustly than it does to peer group efficiency. Labor pay tends to reduce inefficiency in case of inter-temporal while increasing peer group inefficiency. The events of September 11th had little or no impact on inter-temporal inefficiency but tended to reduce peer group inefficiency in a significant way. Finally, airlines efficiency tends to be robustly affected by block hours; reducing them increases efficiency.     

Travel Safety,Terrorism and the Media: The Significance of the Issue-Attention Cycle

Terrorist attacks against tourists and tourism infrastructure have long been acknowledged as having significant impacts on travel behaviour. The article examines the impact of the terrorist attacks of the 11 September 2001 in the United States to reflect not only the impact of the media on influencing travel behaviour but also tourism policy, particularly with respect to security issues and government response to crisis. The article does this with respect to the notion of an issue-attention cycle of political attention to policy issues and the manner in which these are played out. Several stages of the cycle are identified and related to the post September 11 aftermath. The cycle suggests that a five stage pattern of policy attention will be followed: pre-problem stage, alarmed discovery and euphoric enthusiasm, realisation of the cost of significant progress, gradual decline of intense public interest and the post-problem stage. The model suggests that current adoption of post September 11 security measures will likely cease to find political support once the perceived terrorist threat receives less attention in the media and, related to this, the voting public.     

A cointegration analysis of bilateral air travel flows: The case of international travel to and from the United States

Demand for international air travel has risen over the past decade causing international visitation to the US to reach a record high in 2012. This paper assesses the dynamic impacts of GDP, exchange rate, and the 9/11 terrorist attacks on bilateral air travel flows between the US and its 11 major travel and trading partners. An autoregressive distributed lag modeling approach is employed to estimate short- and long-run relationships between variables. Long-run results demonstrate foreign GDP as the major determinant of demand for inbound travel to the US and US GDP is a crucial factor affecting demand for outbound travel from the US. These findings support a strong linkage between economic growth and demand for international air travel. The real exchange rate has relatively little impact on the bilateral air travel flows. The US dollar appreciation against foreign currencies is found to reduce demand for inbound travel to the US, while having mixed effects on outbound travel from the US. In the short-run, economic growth tends to be a primary factor influencing international travel flows to and from the US. The 9/11 market shock has a detrimental short- and long-run effect on the bilateral air travel flows, implying that the impact of 9/11 is prolonged in international air travel markets.     

Impacts of videoconferencing on business travel: the Norwegian experience

This paper assesses the impact of videoconferencing on business air travel. Results suggest that videoconferencing has only a limited effect on business air travel, with substitution rates of 2.5–3.5%. Thus, within the Norwegian market, videoconferencing is not considered a serious threat to the airline industry. The enterprises considered in this survey indicate low sensitivity to the threat of terror and the instability that has followed September 11 in the US. In Norway, air travel recovered after 4–5 months. Videoconferencing is expected to grow but remain supplementary to personal contact.     

Real-time relief distribution in the aftermath of disasters – A rolling horizon approach

This paper presents a rolling horizon-based framework for real-time relief distribution in the aftermath of disasters. This framework consists of two modules. One is a state estimation and prediction module, which predicts relief demands and delivery times. The other is a relief distribution module, which solves for optimal relief distribution flows. The goal is to minimize the total time to deliver relief goods to satisfy the demand, considering uncertain data and of the risk-averse attitude of the decision-maker. A numerical example based on the large-scale earthquake that occurred on September 21, 1999 in Taiwan is presented to demonstrate the system.     

A dynamic demand analysis of the United States air-passenger service

This study examines the short- and long-run effects of various determinants on the demand for US air passenger-services using the Johansen cointegration analysis and a vector error-correction (VEC) model. Results show that, in the long-run, airfare, disposable income and NASDAQ have significant effects on US air travel demand. The combined short-run dynamic effects of disposable income, NASDAQ, population and airfare jointly explain changes in air passenger-miles. Finally, we find that the 9/11 terrorist attacks drop air passenger demand by 5% during 2001:Q3-2002:Q2, which in turn pushes down the seat capacity by 4%. However, it has little impact on airfare.     

Dynamic linkages between tourism transportation expenditures,carbon dioxide emission,energy consumption and growth factors: evidence from the transition economies

Tourism transport profoundly affects economic growth, energy consumption and carbon dioxide emissions. This study is an attempt to examine the impact of international tourism transportation expenditures, energy demand, foreign direct investment inflows, trade openness and urban population on carbon dioxide emission and per capita income for the panel of 11 transition Economies, over the period of 1995–2013. The results show that per capita income escalates the carbon dioxide emission (CO₂), which deteriorates the natural environment. International tourism receipts and international tourism expenditures for travel items are associated with the intensifying CO₂ emission and per capita income in the region. The study confirmed the energy-led emissions, FDI-led emissions, FDI-led growth, income-led emissions, income-led energy demand, trade-led growth and trade-led energy demand. The causality results further substantiate the the tourism-led growth and FDI hypothesis in the region. Finally, the variance decomposition analysis confirmed the following results, that is, (i) per capita income is the contributor that least influences CO₂ emissions, (ii) urban population influences per capita income and (iii) international tourism transportation expenditures will influence CO₂ emissions and per capita income for the next 10-year period.     

Predicting air travelers’ no-show and standby behavior using passenger and directional itinerary information

This is the first study of airline travelers’ no-show and standby behavior based on passenger and directional outbound/inbound itinerary data. The paper describes passengers’ behavior based on estimation of a multinomial logit model for domestic US itineraries departing in March 2001 or March 2002. This enables us to explore behavioral differences based on passenger and itinerary characteristics as well as identify differences in rescheduling behavior occurring after September 11, 2001. Benefits of using passenger data to improve forecasting accuracy and support a broad range of managerial decisions are described.     

Joint analysis of the impacts of built environment on bikeshare station capacity and trip attractions

Shared micromobility is proliferating throughout the world. Many researchers have extensively studied the links among factors representing the built and natural environment and bikeshare demand. One common feature of the existing demand models is that they view bikeshare infrastructure as a group of exogenous variables along with other influential factors. Indeed, this assumption is seldom true in planning practices. Bikeshare system operators usually allocate resources in dense urban areas based upon the environmental correlates. This study contributes to the literature by jointly exploring the determinants of bikeshare station capacity (i.e., the number of docking points) and trip arrivals at the station-level. The research dataset is constructed from the Citi Bike system in New York City in September 2016. The analytical results reveal that the effects of built environment characteristics on bikeshare usage could be carefully considered during the system installation process. We find existing bicycle facilities do not significantly influence the supply of docking points at the station-level. However, they exert direct and positive effects on hourly trip arrivals. The findings improve our understanding of the bikeshare system installation process.     

Multi-objective optimal planning for designing relief delivery systems

The fatal earthquake on September 21, 1999 caused significant damages to Taiwan, which made the national government focus on strengthening relief systems regarding natural disasters. Disaster prevention, protection, and reconstruction are the major areas of focus to reduce human suffering and damage from disasters. A key point is the ability to enhance the distribution of relief materials effectively. In this study, we construct a relief-distribution model using the multi-objective programming method for designing relief delivery systems in a real case. The model features three objectives: minimizing the total cost, minimizing the total travel time, and maximizing the minimal satisfaction during the planning period. The first two objectives pursue the efficiency goal, whereas the third pursue fairness – making best effort to ensure relief commodity delivery to all demand points. Results of an empirical study are presented and suggestions are given for future research.     

The role of Advanced Border Controls at Canadian airports

Within the context of debates about globalization, a ‘borderless’ world and ‘aeromobile’ travelers, this paper examines how Advanced Border Control (ABC) programs influenced relations between Canada’s airlines and airports, together with government between 1985 and 2010 and how this contributed to a balance between trade and national security imperatives. We also argue that the September 11, 2001 (9/11) attacks on the U.S. enhanced ABC program importance rather than impeded system development, and we challenge the post-9/11 view, encapsulated by the then U.S. Ambassador to Canada, (the late) Paul Cellucci, that ‘security trumps trade’. Based on interviews with airlines, airports, government agencies, and other influential actors, the analysis contributes to understanding the multi-decade symbiotic relationships between the public and private sectors that overcame political, business and technical challenges to support a ‘Trade with Security’ strategy.     

Malmquist financial efficiency analysis for airlines

This article discusses the financial efficiency of 42 airlines from 25 countries, in 2001 (the year of the September 11 terrorist attack in the United States), and their profitability in the following year. The Malmquist index was used to indicate the airlines’ capital structure changes from 2001 to 2002. The results show airline capital structure management and profitability dynamics following the unexpected event of 2001. The main conclusion is that airlines which moved more intensively to reduce their indebtedness showed improved profitability, given their size, fleet and intangible assets.     

Debunking some common myths about airport hubs

Much of the passenger air transportation market is served through hub-and-spoke operations with traffic being funneled through a number of major airports. This system has come under attack as protective of the airlines that center their operations on large hubs and is often as result, seen as not serving the public interest. This paper looks at some of the arguments that have been laid against the hub-and-spoke system. It does not offer a balanced perspective in that there are many problems with the system that are not touched upon here, but rather it seeks to question some of the economic logic that has been used to attack the hub-and-spoke structure. While the issues extend to many air transportation markets, the focus here is primarily on the US domestic situation.PrologueThe impacts of the events of September 11, combined with the move into economic recession in the US that was already underway at that time, have led to serious financial difficulties for many of the World's airlines. Some, such as Midway in the US, immediately sought bankruptcy protection whilst others, such as Sabena and Swissair in Europe, took a little longer to fade away. Most of those that remain, despite combinations of financial assistance, have been struggling in the current economic climate.The subject addressed here is not directly concerned with this issue, although there are important overlapping longer-term linkages. Rather it looks at the structure of the airline networks that dominate the provision of air services. These structures still remain, although there are inevitable changes occurring. This paper was initially drafted prior to the recent changes that have taken place in air transportation markets. It retains much of the original material that was presented at the Amsterdam meeting, with some minor up-dating. The theme may seem less important now than at the time of the meeting, but this, I would argue, is perhaps a premature view. The combination of derived demand, relatively easy market entry, lumpiness in investments, etc., have resulted over time in dramatic changes in the fortunes of the sector and individual actors in it. There are, though, a number of recurring themes that pose interesting questions for the applied economist and one of these is the nature of efficient networks.     

International transmission of shocks in the airline industry

There is a large literature on the international transmission of financial and other economic crises. This paper borrows from macroliterature to study an industry specific issue. It examines the impact of an industry specific real shock on firms within that industry, but in countries other than the crisis. In particular, it examines the impact of the events of September 11, 2001 on the market value of non-US airlines. In addition is attempts to identify both graphically and statistically, the importance of trade linkages and airline alliances in the international transmission of shocks.     

Observations of fundamental changes in the demand for aviation services

This paper addresses the seemingly inexorable decline in yield in the airline industry. The external shocks to the industry of the terrorist attacks of 9/11/2001, wars in Afghanistan and the Arabian Gulf and SARS all had downward impacts on the demand for air travel. However, these effects mask a more fundamental change in the demand for aviation services. The analysis uses published sources and a survey of 264 travellers to examine the fall in yields. The traffic mix of economy, business and first class passengers is shown to have changed over a 10 year period as proportionally more travellers choose to use economy class products. This combined with a fall in yield by a third in this cabin during the same period has lead to a significant fall in industrywide yields. Behavioural shifts in business travel and leisure demand are examined. Business travellers have switched from business class products as the difference between business class and leisure fares have increased significantly and as economy class and low-cost carrier products are increasingly viewed as acceptable for business traveller needs, particularly in short-haul markets. Leisure travel has increased as low-cost carriers have introduced low fares, generating new traffic and winning market share from scheduled and charter airline competitors alike.     

Overseas Visitor Deaths in Australia: 1997–2000

Reassuring visitors about their health and safety is particularly important for tourist destinations since the terrorist attacks of 11 September 2001. This study examined the deaths of 1513 overseas visitors to Australia over a four-year period, and found that most deaths (76%) were due to natural causes. Among the accidental deaths, the main causes were motor vehicle crashes and water-related incidents. The study findings support a widely held view that Australia is a safe destination for overseas visitors. It also provides a safety benchmark for other tourist destinations.