You're Here: Home > Keynotes > Terrorism and the Travel Industry (part 2)

Contents: Keynotes, Panels, Sessions

March 9, 2005

Terrorism and the Travel Industry (part 2)

(Continued from Terrorism and the Travel Industry, part 1)

Victor Aguado
If you take a look at the impact of September 11th and the Far East pneumonia, effect of SARS, it meant a decrease of travel, international travel in big numbers. For example September 11th , North Atlantic traffic went down by more than 40 percent . When the SARS affecting the Far East came to knowledge, the impact was similar or even bigger. So the perception of the passenger is that there are threats, one is terrorist and the other is health threat, and they react to that threat.

The reality is that the recovery of September 11th took almost two years, as Pedro ArgŁelles was mentioning. The transport industry they are recovering now, with certain growth in 2004 and 2005, so it took two years, at least, to recover.

In the Far East effect, once that they know that the threat is gone, then the traffic comes back, so the traffic goes back to the original numbers and even growing faster. So what it means is that this perception of threat these are the terrorist attacks that they come from September 11th and some other events, still is remaining, it is not as it was in 2001 and it takes longer to convince the people that yes the system is safe and secure. This is something that will be retained in the industry for many years and if something happens again the impact is going to be the same. So, yes, the traffic comes back but it takes longer.

William Fell
I was a member of the British Foreign Office for 30 years and the British Foreign Office is one of the government departments around the world that has used travel advisory. In my first year at British Airways, after joining them in 2002, we found ourselves very disrupted by the travel advisories that the Foreign Office and other foreign ministries were issuing because it tended to be very alarmist and people, including our own crew, sometimes said Why on earth are we flying to this particular country if its so dangerous?.

I now sit on the review group that the Foreign Office has established with the travel sectors in the U.K., and it has been a very helpful process that now the Foreign Office limits its specific warnings about terrorism to those instances where they really believe that they have very definitive intelligence about an imminent attack. Thats actually not very often because you cant necessarily get that sort of definitive intelligence. We found theres now much greater resilience in the industry as a result of the improvement of the sophistication of the advice that has been being issued by governments.

Its also worth noting that, certain amounts of things we discovered in this review group was that Im sorry to say this about my countrymen actually more British tourist deaths overseas in 2003 were caused by falling off hotel balconies probably drunk than being caused by terrorism. And certainly, the problem that actually our consular service has overseas with traffic accidents as a result of tourism rather than terrorism deaths is a much more severe one. Of course one major incident like Bali did change that perception, but we do need to keep those perspectives all the time, that in fact travel is at risk from more than just terrorism. We sometimes seem to perceive the terrorism more than we perceive the danger of getting drunk or getting run over.

Isabel Aguilera
Its hard to separate the effects of terrorism from other factors affecting the tourist industry, such as any normal economical activity, the appearances of low cost airlines or any other kind of political event happening in the world. The trend in the hotel industry is to increase occupancies and not increasing the price per hotel night. So I think, at the end the human being wants to survive and wants to continue their lives so I dont know if this is resilience or that we just seem to be resistant.

We have noticed that more often the travelling is shorter, the hotel period stays are shorter, and perhaps the Americans are less resilient than others because they are one of the populations that have to increase their long distance travelling. In the end, life and business continue, its true that the effect is, I dont know if its good or bad, that we require less time to recover and to see that life should continue when everything happens.

David Unger
This is a good point that has come out repeatedly, that Europe has had time for a learning curve and America is still sort of in a state of shock. I work in New York and take commuter trains everyday which are highly vulnerable and when I travel to Europe I can appreciate intellectually that Im probably in a diminished risk not an increased risk situation. But its hard to sort of calm down and think that, even three years after the 9/11.

Francisco Frangialli
Yes, two points. First of all I would like to explain a little bit why the market has proved to be so resilient. I think its mainly because there have been some qualitative changes which were underway already before September 11 and which have been accelerated by this faze of difficulties that we have gone through.

Because of all these problems people are staying closer to their homes. Before 2001 the trend was that long haul travels were increasing faster than intra regional and this has been modified by the situation we have been facing. Maybe we will change again now, but this has been the trend.

Two, people have been travelling less by air, at least in Europe and within the United States, and more by road, busses or train.

People have travelled to more familiar places; this is what Ive mentioned before with the situation in the Middle East. They have been able to change their destinations at the last minute, Internet and the new technologies have also been very helpful for that.

Finally, people have postponed their trips sometimes, travelling later when the situation or the perception of it has improved. But what this means is that people have still been travelling, there have been compensation mechanisms, flexibility and many abilities of the market have increased and this is a major aspect of the situation we are facing.

Second point is the issue of travel advisory. Ive worked with some organisations that have tried to address these issues because now it has become something very important. In 1999 we adopted what we call Global Code of Ethics for Tourism and I submitted this code to the General Assembly of the United Nations.

What do we say about travel advisory? We say its normal that governments inform their citizens, that they protect their nationals; they tell them this place is safe, you have this kind of problems, safety problems, health problems etc. But at the same time, sometimes the travel advisories are just not adequate, they are unfair and they do not correspond to the reality and they are excessive. A CEO close to us went to the internet site of the Foreign Affairs Ministry of Australia and discovered that the Australian government is discouraging their nationals to travel to 110 countries in the world! So where can the poor Australians go to? Antarctic? I dont know!

Last year I met the president of The Republic of the Seychelles and he said to me -We have a problem with The United States, they discourage their nationals to travel to any destination in the Indian Ocean, including The Seychelles.

At the same time, I had a visit last week from the Commander of the U.S. Navy in the Indian Ocean and he was asking me Can I send my staff here in The Seychelles because its a very quiet place for them to rest?

We have a problem here, what we command is not to abandon their travel advisories or their travel warnings because it can be necessary, but at least there must be a minimum of dialogue between the governments that are issuing the warnings and the governments of the destination, a dialogue between governments and the private sector industry and also that they are updated and revised from time to time. They are not to be too global. If you take a big country like Indonesia, you can have a very difficult problem in one island and many other destinations can be safe. So these are the kind of problems we are facing with these travel advisories.

David Unger
This dealing with America, how we deal with America, is emerging as a theme and its too bad that we dont have any defender of the American government actions here, maybe we have in the audience but well get to that in a minute.
Pedro, youll get the last response on this and then well turn it over to the audience.

Pedro ArgŁelles
Thank you David, very briefly, I think the resilience factor that was pointed out earlier, is very true. Air travel is probably one of, if not number one driver of todays leisure and tourist industry. I think the desire to travel, the desire to know more places, the effort done by air companies in general in order to make more accessible the possibility of travelling is there and its very dynamic and were looking forward, we see that were going back to normal, with the exception of the United States again.

I think we are back to normal and the gross we can forecast is back to normal rates, we think that growth or the passenger travel would be in the 5% level and probably in the 6% level for goods. Therefore, unless something else happens, we have overcome the crisis.

David Unger
Ok, we go straight to the audience.

Delegate from the floor
I live in South Africa, it was very interesting to me all the kind of discussions. Basically I have one question and a couple of comments reinforcing what some people have said here.

I absolutely believe in the private public partnership process. The issue of empowering the co-responsibility between the person utilising the service and engaged in these issues of business and the government is to my mind absolutely fundamental. One thing that perhaps is a good fallout of the September 11th is that passengers of the planes, I think they feel empowered to look around them and to remain at ease at the situation they are occupying. That was an example, where people feel now that their own lives are in their own hands and that such people should be more proactive about their own personal security in the environment they are occupying.

David Unger
We saw that in the shoe bomber too.

Delegate from the floor
Yes, I think thats exactly the point that we have in a way empowered than otherwise very reactive group of people that was just being transported, they were paying for a service and they didnt want to know anything about it, they wanted to get from A to B. I think weve seen a change in that.

On the other hand, we do have more proactive activities now. I want to refer you to the government of Mauritius. You mentioned the Seychelles, but I found it fascinating that Mauritius a year ago, based on the Bali example, decided to change the nature of the islands as a tourist point. They want to sell themselves now, just not only as beautiful but it is safe as well.

As a result of that, the police of Mauritius did a country wide study on emergent crime trends that has developed and invented a strategy to avoid all types of crimes including drugs and terror. One of the biggest problems they had to implement this new strategy with demands to private public partnership was actually to sit at a table with the hotels and with the mayor tourist companies. Why? Because in the south, in those safe locations like South Africa and Mauritius they are recognised as safe in every aspect. The hotels dont want the police to be seen! They have this problem with private security and the security within the hotel. Even the issues of petty thefts inside the hotel, sometimes by hotel personnel, sometimes by hotel guests is repeatedly covered up and the idea is to quiet things down to not to make a bad impression in front of the other guests.

We are trying to work very hard with a dialogue forum between the police, the hotels and the private security agents so that the security agents dont become the middlemen between the police and the hotel. The change of image where the people feel that in fact having a police nearby is a good thing not necessarily a bad thing.

The last point is that terrorism is a minimum part of this. The issue of criminal activity is the issue of being mugged in the street, the issue of whether you can walk safely from the hotel to the park. These are the things that have a great impact on the industry.

David Unger
Thank you, Virginia. Just to remind you that we have a lot of expertise in the room and on the panel and Ill take that as a comment rather than a question. It wasnt really a question and we have some other people waiting

Delegate from the floor
Thank you, first thing, thank you very much to all panellists for their insightful thoughts and comments. I have a question and then a consideration to raise to the members of the panel.

First, I wonder whether you have estimates about the increase in costs related to security in your different industries. From the perspective of business educators, its very important to us to know whether you perceive these increases in expenses costs or rather as investments in improvements of quality. Maybe theres something similar to what happened years ago when there were improvements in different processes at businesses. At first there were increase in the expense and accordingly there were less profit, but then after a period customers and public opinion started to see that as an improvement of the operations of the company.

I see here a kind of perverse or vicious circle given that the increasing demand is being complemented with an increase in the expenses of security so you have less money for marketing. So the consideration is whether you can use in your own marketing these improvements in security given that fear is linked to the perception of security. I was wondering whether investing more money in marketing and hence saying that youre offering more secure and safe services. Does that have an impact in terms of demand?

David Unger
Thats a very good question and the panel in answering that thing about what William Fell told us about situations where some governments are providing subsidies for forms of security that have to be born privately in other countries. In answering whether the payoff is in marketing you might mention whether you think there might be an appropriate governmental role there isnt now there.

William Fell
Can I try to make one comment? I dont deal with the financial side of the question, I dont know whether we strictly regard security expenses as sunk cost or not, but its certainly a case that, up to know, the airline industry has not gone in to competitive marketing on the basis of Fly my airline because we spend more on security than those people down the road. One of our mayor U.K. competitors which flies around with aeroplanes with mainly red tail planes and is chaired by an extrovert with a beard, I wont name it, has gone on the shifty side for some competitive marketing and we fly across the Atlantic in splendid aeroplanes supplied by Pedros company which have only two engines. He has gone into quite a lot of competitive marketing saying: You are safer flying in our aircraft because they have four engines. Well, thats about the closest weve come to competition on that side. I think it would probably be a mistake if the airline industry did start to market on the basis of Fly with us because we spend more on security. That could give rise to questions like why do you do this? Is this because you feel youre more of a target? So it could actually be counterproductive. So, I think we as an industry we prefer just to assume that we are regulated and that we do what we are told to do. In the case of my airline, we often do an awful lot more than the government regulators require of us. And again, that is not something we then advertise in the press.

Pedro ArgŁelles
Well, rather to come in on this last question, Id like to make a comment on the point that has being made by the lady in the audience in respect to parts in the world taking advantage of this situation in order to do their own marketing based on the premium security they can offer. I think that is an interesting comment because it drives directly in to the theme of this conference which is Democracy, Security and Terrorism. What is implicit in that comment is then the levels of security the non democratic countries can offer probably is superior to the levels of security that democratic countries can offer. I think that is something we should reflect on. Its certainly an interesting debate, but large democracies are based on freedom of movements and civil rights protected for all citizens unless proven to be wrongdoing. How can we compete with countries where that is not a fact and where the civil rights can be suspended just because a government decides to run their country at a level of security which is superior?

David Unger
Im going to be a bit more of an authoritarian chair because there are at least three questions from the audience and the clock is ticking. Francisco, you were on the other question, werent you?

Francisco Frangialli
Yes, Id like to ask the lady from South Africa. First of all, it was interesting to know from a friend that the mayor cause of accident among British tourist is the consumption of alcohol. Maybe these special effects are British. Theres been some surveys in the American market asking people What is the mayor cause of trouble for you? The answer was not at all terrorism. It was petty crime, problems that can come in the street, get your money or passport stolen. The same when youre asking the Japanese, their preoccupation for food safety has barrier of language.

So maybe more important as this notion of daily security problem that can come at any moment and you have this strong feeling of this big terrorist attack. It can happen anywhere, anytime whether you travel or stay at home. You are from New York, I live in Madrid, we are attacking New York in Madrid, so its not specific to travel. The last aspect of the question was about.

David Unger
Lets hold that, because there are people waiting. Victor, you wanted to come in on this question?

Victor Aguado
Very rapidly about the cost quality, its very difficult, its like safety, how much does an airline spend on safety? Its that required, is that labelled? You mentioned it, its very difficult to market safety. Probably on a continental basis, you may. Some continents are safer in air travel than others and that could be perceived, thats clear.

But anyway, security has a cost, and has a cost to airlines and airports. And at the end, either its paid by the government or by the traveller. The question is who pays? You mentioned theres different treatment in U.S. and Europe. The reality is that there are new initiatives in Europe, you know the two launches of research and development of systems of procedures. That could be a better way to address the industry as such. The industry needs protection, it needs security and lets provide the industry the means to develop and their own means to protect.

David Unger
We could go on for hours, but well in fact go on for ten minutes and the next question is over here.

Delegate from the floor
My name is Be Rama from India, Im the head of the counter terrorism division of [...] [24.45-26.45 not audible]

David Unger
I dont know if we have anyone in the room who wants to defend the U.S. regulatory authorities or government and is confident to do so. Im certainly not the person to do that. In terms of our tradition of victim activism it has two sides, the 9/11 Commission report which we heard praised in other venues here came back primarily because of citizen activism and it can sometimes be directed to a very constructive end. Im going to go there with the next question.

Delegate from the floor
Hello, my name is Simon Kennedy and Im an interested traveller rather than an expert in anything. Im interested to know following up on your comment, William. From a point of view of a travellers freedom, how long do you think itll take before travellers can have the freedom they used to have in travelling? Are there other solutions for security on airlines which are less invasive or less in plan to impact on travellers convenience and so forth?

Its highly unlikely that with reinforced doors and passengers being more aware that any granny is going to kill anybody with her manicure set. And if somebody was really inclined to be a terrorist on a plane now Im sure theyd be using methods which are more difficult to screen than a ceramic plate and so forth. Last week I flew from Zurich International Airport where they sell Swiss Army knives in duty free, so there are obviously holes in this lack of blades on planes security. So do you think that theres ever going to be an international consensus where we can again travel with relatively freedom.

William Fell
Thanks, its a good question again; its quite a tricky one to answer, because I think we get back to this question of personal perceptions of their freedom in relation to technology. We havent got the sort of screening systems quite yet that would enable you to pass through an archway and satisfy without any further inspection of your baggage and person that you re were free of metal objects, fire arms and chemical products which could also be used.

But at Heathrow certainly trialling a machine which has the effect, Im told, I havent seen it, of undressing the individual so you actually can see through to the naked body. Now, theres an immediate question there about intrusion as against efficiency. Are the travelling public prepared to be effectively undressed as a price for a much faster passage through screening?

You talked about grannies not attacking aircrafts, again we come back to this question about human rights. It would be very easy indeed for the screening and enforcement authorities to go in for much more active profiling of what we now call reason selection which actually eliminated non suspects and focused on suspect individuals. However, you immediately get into all sorts of discrimination issues that if you only start picking on Arab males aged between 20-30 youre probably infringing their human rights. You may also be missing the point, which may be that the terrorist has worked out that the Arab male aged between 20-30 easily gets picked on and they recruit a granny whos got some reason to want to be a terrorist. With her manicure set!

These are the issues, and we could probably solve the problems but we need better technology but we also need a better understanding between the public and the authorities as to what limitations they want to impose on the authorities ability to undress them or select them on grounds that might not seem entirely fair.

David Unger
With everybodys cooperation Ill try to get in as many questions as possible, because we already got a little bit in to the brake period. Lets all try to make the questions and answers as concise as we know how to make them.

Delegate from the floor
Hi, my name is Edwin. We talked a lot about the negative impact on this industry. I was wondering, I also see some trends that were started, and I think we mentioned them, before 9/11 that could have had some impact on changes in this industry and maybe this terrorism threat is accelerating these trends. Im thinking of private jets used for business travel, and I also think about that maybe the tourist will go more into boutique hotels than just the general international known hotels. I dont know if thats a safe assumption and maybe my question is then, what is the quality of companies in this industry to adapt themselves to the new trends and will that make up for the additional costs that come with security?

Isabel Aguilera
Im afraid that terrorism doesnt discriminate between boutique hotels, big hotels or beach hotels. I dont think that anybody can do any advertising unless its a new type of advertising called risky advertising saying that we are safe. We do as much as possible, we invest as much as possible, we pay as much as possible because its also a balance between cost and investment.

Nobody can say that we are safe so I can not agree we you, I think that everybody is vulnerable at the same time and the only thing we are at the moment is more conscious. Its true what you say, theres some procedures already initiated in the past and all this has only accelerated and I think that we are stronger and safer than ever. But that doesnt mean that we are completely safe. Im afraid that nobody can guarantee that when a terrorist is willing to kill himself to kill others.

Delegate from the floor
I work in the embassy of Panama in Spain and we receive a lot of calls, that I suppose that other embassies receive as well, asking about are we going to be safe? My question is whether there is a classification or measuring the level of security of countries, if so, is that information available to travel agents?

Francisco Frangialli
I travelled to Panama last week where in the local press I saw that the canal could be a target for Al-Qaeda. I dont think the canal of Panama is a target, every place in the world can be a target, we dont know. But let get to the question that was raised before, on the cruise industry. Here on this panel we have three representatives from the airline, no one from the cruise business. Im very afraid of that. Ive heard recently my colleagues saying the same, they are so big, 2,000, 3,000 people. There was some hijacking in the 70s, some attack in the Mediterranean, they say theres a big attack in the Caribbean, it will be a huge scale so we have to be prepared to every kind of events.

[...]

Delegate from the floor
Hello, I once worked for the U.S. government so I thought Id try to venture an answer to the questions why it seems that the U.S. is uniquely hung up on airline security and immigration regulations to a greater extent than Western Europe. This actually ties in with what theyll be taking about in the next panel in this room which deals with immigration policy. But I would just suggest that the answer to that is that in the U.S. the perception is that the terrorist threat is overwhelmingly external. It comes from the outside of the United States. Understandably, therefore the United States is very concerned about border security and keeping that threat outside the United States. My perception is, in Europe you see that threat from the outside as no greater threat than the threat from inside. That gives you a kind of different perspective on how important it is to set these strict immigration rules, report the passenger list in advance and all of that. I think thats an issue we going to talk about in the next panel.

David Unger
Id like to point out that the four 9/11 hijackings were domestic flights although they were originated from the outside. They boarded the planes on domestic flights.

Delegate from the floor
[...] On the politics of safety and security, and I think this is an issue we havent addressed, the governments also have to look as if they are doing something. The politics of security are very different in the United States than that they are in the European countries. For some of the reason youve mentioned for different history and different experiences, one issue is that in The United States shoes are x-rayed but only 30-40% of the checked baggage is x-rayed. Part of the problem is that politics might compel you to invest in security measures that are more visible but not necessarily the one with the most priority. On the business side and passenger and passenger organisation-the other two stakeholders in this- to actually make this an issue and make governments prioritize in a more sensible way.

Delegate from the floor
[...] Im with the government sector, Im going back to what Mr. Fell said before, something interesting about the dynamics about the industry that is responsible to put in and implement whatever their relations are in place. Its up to the people to decide to what extent they have that perception of terrorism and government should strike balance. Im with the government and I find that governments dont necessarily strike the balance because they are the ones who always seek a cautious approach. Forgive me to sound like a bureaucrat but, for us in government this is what we have to do.

The consequences of not taking the most cautious approach is much higher than, say, perceiving something to be less than what is has the potential to be. This goes back to what the industry is doing, I come from Malaysia and in my part of the world what we have found to be successful is that the industry, the hotels, the airlines go out in the market saying, not so much that we are safer than any other specific place but to give off that sense of Come visit us youll have a good time, bring your family, bring your friends and although that marketing strategy is not dedicated towards security the perception it gives out is one of safety. This helps, not only where I come from, but in a lot of other places, because at the end of the day the threat of terrorism is the fear that the terrorist wants to install in all of us that we are not safe anywhere. But to come to that it is for us in the industries with citizens and with government to make sure it doesnt happen. I think this is a team that has been received many times. In the industry, although you dont work in percent in terms of we are safer than the others, do you believe that in just the general sort of advertising Come, Visit! do you think that in itself would assist in increasing travel, increasing tourism and making people feel safer when it comes to travelling abroad and to other places?

Delegate from the floor
Thanks, my name is Deborah and Im a student. My questions is somehow complementary to the last question. Id like to know if the travel industry could, and if yes, how take any actions to combat terrorism either trying to work with the local government or with the World Travel Organisation in order to combat the terrorism? Is the terrorism a real threat to the industry as a whole?

Francisco Frangialli
Yes, I wanted to answer to the one question before, about these changes in the industry whether they have been accelerated by what has happened with the terrorism. And yes, a lot of these transformations had taken place before the end of long traditional vacations. You take one long month by the seaside for example, this has disappeared and weve had a multiplication of short breaks, last minute decisions, people shifting their destinations with the help of internet, and this I think started before and the industry sector theyve really adapted to those changes in a really impressive manner. If we have this rebound of 10% increase which is spectacular in 2004 is more or less thanks to the ability of transformation of the industry.

One example to illustrate this cultural gap between the United States and Europe is when I 20 years ago worked with the French Government before joining my present organisation. Thered been a hijacking of an aeroplane in Pakistan and many tour operators in the U.S. cancelled flights to many parts of the world including my country France. So it happened that I later on met on of this tour operators and I asked him how come you cancelled flights to France? He answered Because of this hijacking in Pakistan. Pakistan and France I was saying and he said Pakistan and France, all that at the Mediterranean.
The perception you have sometimes is difficult to represent.

David Unger
Ok, we will close with that interesting anecdote, theres no need to summarise you off here but we have an industry which is inheritably vulnerable which is a symbolic target for certain kind of terrorism which is resilient, weve been assured, and I think we have been given the facts to us that there has been a real learning curve going on, on measures of response and many, many issues out there, both on further measures and importantly on the trade offs now of civil liberties, privacy, democracy and security. I want to thank everybody for their interesting attendance and their contributions. Thank you very much!

Club de MadridInfoMedio
Members of the Club de Madrid

© Club de Madrid | Privacy Policy | Disclaimer | Contact Us | Feed RSS RSS 2.0