The effect of the recession on the travel industry 1

Dissertation Proposal: The effect of the recession on the travel industry

Name

Tourism

Word count: 3082

Submission date
The effect of the recession on the travel industry 2

Contents

1. Introduction ............................................................................................................................... 4

2. Research Background ............................................................................................................... 4

3. Aim and Objectives ................................................................................................................... 4

4. Literature Review ..................................................................................................................... 6

4.1 Economic theories and recession.......................................................................................... 6

4.2 Effect of previous recessions on tourism .............................................................................. 7

4.3 Strategies to cope with the recession .................................................................................... 8

5. Methodological Framework ..................................................................................................... 9

5.1 Research Philosophy ............................................................................................................. 9

5.2 Approach ............................................................................................................................... 9

5.3 Strategy ............................................................................................................................... 10

5.4 Time Horizon ...................................................................................................................... 10

5.5 Data Collection Tools ......................................................................................................... 10

5.6 Sampling and Data Analysis ............................................................................................... 11

6. Planning and Critical Analysis .............................................................................................. 12

6.1 Timetable............................................................................................................................. 12

6.2 Ethical considerations ........................................................................................................ 13

6.3 Challenges........................................................................................................................... 13

6.4 Limitations .......................................................................................................................... 14

The effect of the recession on the travel industry 3

Reference list ................................................................................................................................ 15

The effect of the recession on the travel industry 4

1. Introduction

The purpose of the dissertation proposal is to understand the effect of the 2008 global

recession in the travel industry. The recession was a major issue that negatively affected the

tourism sector, and discouraged the movement of people (Furr, 2014). The proposal will first begin

by providing a background of the research. It will also detail the aims and objectives of the study.

The study is of importance, and would require further analysis to provide vital information. A

literature review will also be conducted to detail the perspectives of various scholars on the issue.

The proposal will also detail the methodology used, and it will finally describe the planning and

critical analysis that would ensure the success of the research.

2. Research Background

Global travel has been receiving increasing attention, as it is a primary source of revenue

for many countries. Furthermore, it enhances the image of many locations that tourists visit. Since

December 2007, the world witnessed one of the worst economic periods since the Great

Depression of the 1930s (Williams & Lew, 2014). The travel industry is significantly affected by

the global recession. During the recession, many tourists will avoid travelling or spending money.

It arises from the urge to use the money for other needs such as food and clothing, making traveling

a difficult alternative. Many companies in the travel industry, especially hotel and tourism

stakeholders, began to look at ways of dealing with the recession. In this regard, it is imperative to

carry out a study on the research topic. It is essential to examine the impact of the recession on

traveling, and this would prove beneficial in coming up with ways to prevent the devastating

effects of the recession (Zainal, et al., 2012). The recession leads to many economic problems that

are unavoidable. The topic seeks to achieve the objectives outlined below.

3. Aim and Objectives

The effect of the recession on the travel industry 5

The global recession significantly affected the travel industry. This research is limited in

scope, and it will consider the effects of the recession on the tourism industry. Furthermore, it will

be based on the global recession that occurred in 2007-2009 that led to major issues in the tourism

sector. The global recession affected many countries and their economies. It resulted in a reduction

in traveling, as few people could no longer afford to travel (Bartoluci, et al., 2010). Essentially,

the research objective is to look critically at the effects of the global recession in the hotel and

tourism industry. The research objectives are listed below.

1. What are the challenges in the tourism industry during the recession?

2. How does the tourist industry cope with the recession?

3. Is the tourism industry ready to deal with a recession in future?

The research aims to provide a response to several questions. The first question seeks to

establish how the recession affected the tourism industry. Primarily, coming up with a response to

the question will lead to the development of other questions. The second question will seek to

determine how the tourism industry respondent to the recession (Page & Connell, 2011). It is also

imperative to identify the strategies put in place by the tourism and hotel industry to deal with the

recession. It is important to understand the challenges in the past to avoid problems in future.

Essentially, the objectives of these research questions are to establish the impact of the recession

on the tourism industry (Dubey & Parihar, 2013). Few studies have looked at the effect of the

economy, and more specifically the recession, in the tourism industry. The results of the study will

provide vital information on how to deal with the recession. Mostly, it will make it easier for the

stakeholders to recover in case they face similar challenges in future.

The effect of the recession on the travel industry 6

4. Literature Review

4.1 Economic theories and recession

Many scholars have looked at the cause of the recession and its resolution. Scholars like

Smith (2011) provide insight into the Great Depression. According to Smith, the National Bureau

of Economic Research (NBER) offers a description of when a recession begins or ends. The

analysis depends on several variables such as industrial production, personal income, retail and

wholesale sales. Furthermore, it also considers the gross domestic product (GDP) of a country. In

this regard, the recession is a decrease in the countrys GDP. It occurs in two or more consecutive

quarters. Since 1945 to 2009, the organization has declared twelve recessions (Furr, 2014). Various

theories are in place to explain why recession occurs and how to deal with it. This information is

vital for the research. John Maynard Keynes developed a theory known as the Keynesian theory

to explain the Great Depression and its resolution. The Great Depression arose after the Federal

Reserve implemented controls to tighten the supply of money in the economy. It influenced people

to begin reserving their money, leading to the economic crisis (Chalkiti & Sigala, 2010). According

to Kelley (2010), the Federal Reserve should expand the supply of money. It would give rise to an

increase in confidence in the economy, and the circular flow of money would be encouraged.

According to a study by Smilevska (2010), a recession would lead to lower confidence among

citizens on the economy. Many of them would try to avoid the impending economic hardships by

saving the little money they have. It would then disrupt the circular flow of money, leading to more

issues in the economy. This would affect tourism as people will lack the finances to travel

(Smilevska, 2010).
The effect of the recession on the travel industry 7

4.2 Effect of previous recessions on tourism

The previous recessions significantly affected the tourism industry. Scholars such as Tribe

(2011) have looked at the impact of past recessions. It includes the 2000-2001 and 1990-1991

recessions that lasted for eight months. Since the recessions, many events occurred that affected

the industry. It includes the 9/11 terrorist attacks, SARS outbreak and volcanic eruption in Europe.

However, the impact of these developments was only felt in the regions of occurrence, and they

occurred for only a short time. However, the most recent 2008 recession was the worst in the

industry. It lasted for two years (Tribe, 2011). The impact was devastating to the industry. The

recession was caused by a housing downturn in 2006, and the effect was felt in many industries. It

was characterised by tightening of credit and losses by many banks (Mills & Law, 2013). Scholars

such as Logan and Molotch (2008) look at how the recession affected the tourism industry in Asia.

They support the belief that the recession hurt intra-regional travel. The number of tourists arriving

in the region declined sharply. However, this was a short-term effect. A positive impact emerged

after the recession. According to Page and Connell (2011), it led to the removal of the complacent

views that was the norm for many years about the growth of the industry. In this regard, the

industry began to use more competitive approach to attract clients into the region. It allowed then

to be more efficient and productive in their operations for the future market (Webber, et al., 2010).

The stakeholders in the tourism industry in the region also began to consider the wants and needs

of their customers. Many of them began to use promotion techniques to guarantee growth.

Bartoluci, Hendija and Vanja (2010) to determine the impact of the 2001 recession in the

US conducted research. The study was able to reveal that despite the current economic hardships,

many tourism stakeholders continued to market their services in the region. Many of them were

hopeful about the long-term prospects of the industry and were using technology as a strategy for
The effect of the recession on the travel industry 8

improvement (Bartoluci, et al., 2010). The study showed that many stakeholders in the industry

forecasted that the size of special events for tourists would reduce, but the number would increase.

Furthermore, the study also showed that the smaller companies faced more competition during the

recession. A study by Dwyer and Forsyth (2006) also shows that many businesses saw the

importance of identifying with their particular niche. It is through the provision of the delivery of

specialized services. Furthermore, the companies could reduce their financial exposure during a

recession through increased marketing efforts (Dwyer & Forsyth, 2006).

Scholars such as Smith (2011) look at the use of technology and other tools such as improving

negotiation skills as a way to deal with the recession. The information for these studies would

prove beneficial in determining the effect of the recession on tourism.

4.3 Strategies to cope with the recession

A study by Hackley (2010) shows that the recession was characterised by an increase in

competition among many stakeholders in the tourism industry. The competition relies on various

variables such as tariffs and type of competition and quality of services offered. The tourism

industry is often considered as luxurious and costly. It would require intense efforts to encourage

people to enjoy themselves during difficult times such as the recession (Hackley, 2010).

Satyanaryana (2006) carried out a study to show how business in the tourism industries

tried to cope with the recession. An important variable was that many businesses begin to use the

internet as a marketing strategy has proved beneficial for remote locations that were cheaper and

unknown to many tourism (Prideaux, et al., 2006). Primarily, it encouraged some people to

continue traveling despite the recession. It was a period that was stressful for many people, but

such destinations proved beneficial in assisting them to deal with the stresses arising from the

recession. The concept of demand and supply can be used in understanding the current trends
The effect of the recession on the travel industry 9

(Satyanaryana, 2006). The analysis of the concept in the literature is loose, and can be used to

mean a macroeconomic demand. Moreover, it is imperative to consider the demand for tourism in

rural or unpopular areas. It can be the case where the individual will only travel a shorter distance

to exotic locations (Chalkiti & Sigala, 2010). Specifically, it includes local tourists who were

largely unaffected by the recession as traveling was still an issue. According to Jayawardena

(2013), the services provided and location matters greatly. In case the destination is closer to the

individual, and then they will not be discouraged by the recession to visit the location. The tourism

sector is also a multi-activity and multisectoral sector. It is characterised with many organizations

both private and public that rely on the industry. They are also in different sizes, and every

stakeholder faces different challenges due to the recession.

5. Methodological Framework

5.1 Research Philosophy

The primary objective of the study is to determine the impact of the recession on the travel

industry. The relationship between the two variables is analysed based on a descriptive and

qualitative form of the study (Baggio & Sainaghi, 2011).

5.2 Approach

The approach to achieving the research objectives will involve both qualitative and

descriptive research. The method is advantageous, as it would provide valuable information in

regards to how various stakeholders in the tourism industry were affected by the recession. The

research will also rely on several stages. It is an important part of the start of the project. It will

also involve coming up with specific areas that would be studied by the research.
The effect of the recession on the travel industry 10

5.3 Strategy

The strategies used for the research will entail several stages. The first stage is preliminary

research. It involves the collection of information and data about the research. This phase will

determine the course of the study. The research will apply both primary and secondary methods of

data collection. The primary data is sourced from both stakeholders in the industry and tourists or

individuals who wanted to travel during the recession. The interviews will be in the form of online

questionnaires through the survey monkey website. The respondents will fill questionnaires that

will be posted on the website (Cheuk, et al., 2010). The response time will be an average of ten to

thirty minutes, allowing all respondents sufficient time to complete the questionnaires. The

questions will be clear and easy to understand. The secondary data collection will entail

information from libraries and online sources. It will provide further information about the

research topic. The most vital sources will be from companies that provide services to tourists, and

rely on tourism. The application of a qualitative descriptive approach is advantageous in detailing

relevant information about the effects of the recession. It will be using statistical data on the impact

of the recession on the tourism industry. It will ensure that the study achieves its objectives.

5.4 Time Horizon

The research will utilize online surveys. Each respondent will have about thirty minutes to

complete the questionnaire. Furthermore, all the respondents will have to complete the survey in

about one to two weeks. The use of online survey allows the respondents to fill the questionnaires

at their own convenient time. It encourages them to respond and provide truthful information.

5.5 Data Collection Tools

The data collection tools involve the use of online surveys. It will allow the participants to

provide their responses from any remote location. It is essential as the research considers the
The effect of the recession on the travel industry 11

feedback of people from a wide geographic area. It will ensure that the information collected is of

high integrity. The data will also be collected from the internet, facilities and libraries. The

information will consider how various stakeholders are affected by the recession and ways in

which they try to cope with the current economic developments. The dependent variable will arise

based on the outcomes in regards to the impact of the recession (Elliott & Boshoff, 2005).

The first section of the questions will consider how the recession affected the tourism

industry. It will be regarding traveling preference and business operations. The second part will

involve questions and the reasons for the change in the strategies of the future and business

performance. Finally, the questions will seek to determine general demographic questions such as

years of operation in the tourism industry or previous traveling experiences before the recession.

It will also consider the type of organization, and its linkages with other stakeholders in the

industry.

Over 200 emails will be sent. The emails will contain a link to the online survey, and it would be

sent to interested parties in the tourism industry such as employees and individuals who travelled

or wanted to travel during the recession.

5.6 Sampling and Data Analysis

The participants will be accessed from tourism websites and chat rooms. It is essential to

ensure the authenticity of the research. The questions will be prepared beforehand to ensure that it

would gain sufficient information from the respondents. The sample for the research includes

various stakeholders in the tourism and hospitality industry. It will involve organizations engaged

in marketing tourist destinations and those participating in the transportation and provision of

services for tourists (Kelley, 2010).

The effect of the recession on the travel industry 12

The results that have been attained from different studies will also be integrated into the

research. It will be used in the analysis of the information collected. The use of articles and studies

on the recession and its effect on tourism will entail the utilization of exclusion and inclusion

criteria. Furthermore, the issues that arise due to the recession will be considered, and this will be

used in coming up with an in-depth analysis. Moreover, the accuracy of the research scope and

coverage will be improved by excluding articles and studies in languages besides English. It will

narrow down the sources required for the research.

The collected data will first be pooled and classified according to the concepts determined.

It will then be classified, organized and grouped. This stage will make it easier to establish a

logical, organized and methodological analysis of the data. The information collected is both

qualitative and quantitative. It will prove beneficial in analysing the primary hypothesis. The data

collected from the study will support the assumptions of the topic being studied. Mostly, the

assumptions will depend on the background information determined by the study. The research

will also use statistical software in the analysis of results. It will prove beneficial in coming up

with tables and graphs to provide a representation of the data collected, making the analysis process

easier.

6. Planning and Critical Analysis

6.1 Timetable

Time management is an important aspect of research. The research will use the minimal

time possible to ensure the successful completion of the study. It is achieved through planning

and using time correctly. Furthermore, the preliminary study reveals that the strategy for working

has been detailed (Thbault, et al., 2013).

Table 1. Plan of Work

The effect of the recession on the travel industry 13

Background Research
Data gathering tool design
Data collection
Data analysis
Project writing (Draft 1)
Final manuscript
Week 1 2 3 4 5 6 7 8 9 10

6.2 Ethical considerations

The research will consider various ethical considerations. Research ethics will play a role

in dealing with the data from the participants. All the responses will be anonymous in nature.

Mostly, the participants will not be linked to their responses. Furthermore, the information will

be confidential, and will only be revealed to the individuals directly involved in the study. The

use of the online survey guarantees the confidentiality of the responses. Ethical considerations

will also include the utilization of the library research (Smith, 2011). Specifically, all the sources

of information from library-based resources will be cited correctly. Through the ethical

considerations, the data collected will be reliable. It will ensure the validity of the findings.

6.3 Challenges

The research faces several challenges. A major problem is finding the research

participants. The survey will be comprised of people from many regions and localities. It is hard

to access the particular individuals who fit the profile of the research. Essentially, the challenge

of recruiting the participants will be dealt with using trial and error. It increases the number of

participants (Lazaroiu, 2011). Inclusion and exclusion criteria can then be used to determine the

best respondents for the research. Accurate information about the participants will have to be

availed to ensure that the respondents will provide meaningful responses to the research. It can

be through analysis of previous travels and roles and positions in the tourism industry.

Furthermore, the research will target a particular group. This group can then recommend more

participants for the research.

The effect of the recession on the travel industry 14

6.4 Limitations

Many limitations faced the research. These are the weaknesses of the result and are not

easy to control. For a start, the results of the research cannot be applied to a larger population. It

arises from using a sample to ensure convenience. It is difficult to find participants for the

research from an extensive geographic location. In this regard, the research relies on participants

who should be willing to fill the questionnaires. This limitation can be dealt with by ensuring

that the sample is comprised of random participants. In this regard, they should be from different

countries, especially those with a high number of tourists travelling abroad (O'Reilly & Kerrigan,

2013). The research is also limited by time. The respondents are expected to provide feedback

during a specific interval of time. In this regard, the limitation can be dealt with by allowing the

respondents to have sufficient time to answer the questionnaires. They should also be informed

before answering the questionnaires on what is expected for them to ensure that they answer the

questionnaires swiftly.
The effect of the recession on the travel industry 15

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