The Decoupling of World Tourism and the Global Economic Status

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CHAPTER 2: LITERATURE REVIEW1

Economic Recession1

Economic Recession in Europe2

Tourism- A Socio-Economic Phenomenon2

Role of Tourism Industry in Economy3

Role of Tourism in UK6

Role of Technology in Promotion of Tourism Industry12

Travel Motivation13

Impact of Recession on the Tourism Industry15

Theories Related to Tourism Industry17

Dependency and Life-Cycle Theory17

Theory of Community Approach18

Regulation Theory and New Tourism19

Conceptual Framework20

Overcoming Tourists' behaviour Lag20

Strengthening and Reinventing Marketing Strategies21

Innovating Radically21

Attracting Travellers21

REFERENCES23

APPENDIX-A33

APPENDIX-B35

List of Figures

Figure 1: International Tourism Demand5

Figure 2: Inbound Visitors' Numb and Total Spend by Sector-20109

Figure 3: Domestic Visitors' Numb and Total Spend by Sector-201010

CHAPTER 2: LITERATURE REVIEW

Economic Recession

The economic condition of the world has been under deep downturn since the economic crisis, which has affected the real as well as financial sectors that have penetrated into both advanced and developing and emerging countries. All the advanced major economies are highly affected by this while activities are abruptly slowing down in developing and emerging countries. The financial crisis spread like fire across the globe since 2008, leading the world to the worldwide recession of unpredictable duration and severity (Nanto & Donnelly, 2008, 2). What started as bursting of bubble in housing and real estate market and an increase in foreclosures has risen into a financial global crisis. The affect of turmoil in the financial sector on the real activities has increasingly become evident, spreading beyond its first epicentres for affecting other emerging economies. Some of the most vulnerable and largest banks, insurance agencies/ firms, and investment houses have either declared themselves as bankrupt or have asked for financial aids to rescue them from disclosures.

In the year 2008, the confidence of lenders dropped, credit flows froze, and one after another different countries' economies across the globe dipped down towards recession. With the occurrence of this crisis, all the industries were exposed to strong primary weaknesses and issues in financial systems across the globe, and in spite of the financial aid provided by government, still some of the industries have been able to recover completely from the impact of recession (Nanto & Donnelly, 2008, 2). One of the biggest risks towards growth comes from the hold back of foreign spending and the unfavourable impact on investments leading to decreased profitability in the export sector.

Economic Recession in Europe

The economic downturn in Europe, usually, heightened from banking to sovereign debts, as a number of countries preferred bailing out their banking systems with the help of taxpayer money. A number of European countries focused on reducing their budget deficits from 2010 to 2011 for improving their GDP. These countries include Ireland, France, Spain, Portugal, Italy, Iceland, and UK. The recession in UK caused a several firms to focus their training programs on major business needs, use their own staff for training purpose and organize more in-house courses in order to cut down their cost to a maximum level (Smeral, 2009, 10). Organizations in United Kingdom were struggling to sustain in the midst of credit crunch. According to Keith McGregor, the restructuring partner at Earnest & Young, the ...