Will the economic crisis be the end of travel?
Trip Start Jan 30, 2007
632Trip End Dec 31, 2011
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Some interesting things are emerging from the current economic downturn:
1. people are cutting back - with Christmas coming up, there has been such a drop off in orders (partly due to problems of factory inspectors getting into China) that lots of toy factories have closed in China;
2. house prices are dropping - they were way over-valued and disproportionate to what people were earning, and despite the talk that house prices can only go up, and that 'bricks and mortar' are a good solid investment, they are likely to keep going down, down, down. One economist I met likens house prices to something on the end of an elastic band. They go up, beyond their real value, and they go down, way below their real value.
3. there's comparisons with the Great Depression of the 1930s. Does this sound familiar:
banks and finance companies handed out lots of money for people to invest in shares and stocks - back then they thought stocks would keep on rising in value (just as people now thought houses could only go up in value).
4. there seems to be a domino-effect going on. How long before we see people trying to get their money out of the banks? A run on the bank could spell disaster, as during the Depression some 9,000 banks closed in the US alone. But we have yet to see rampant inflation and rising unemployment to make things worse.
5. expect consumer spending and confidence to drop even more. Recent studies of the Asian crisis along with the 2001-2001 Argentinean crisis found that consumption dropped dramatically - some items were eliminated from people's shopping basket. 'Cultural goods are most affected' quotes one study.
6. There is increased volatility. Last year the Dow Jones hit a record high of 14,279 - one year later it is 8,451. Similarly, foreign exchange rates have been yo-yoing up and down. Earlier this year the Australian dollar was close to 1=1 for the US dollar - now it is below 63 cents.
7. I am wondering if the current economic downturn will be good for the environment, and ultimately, humans on earth. We need to cut consumption and using up the earth's resources, and a new frugality and simplicity could move us towards that.
I guess there is a danger that efforts to heal the economic crisis will take attention away from climate change and the environment. In fact, the environment might be seen as less of a priority, being overridden by the need for more economic growth, whatever the cost. Falling gas prices could mean less efforts to find cleaner, greener fuels. Will the crisis give both 1st, 2nd and 3rd world nations excuses not to care about the environment?
Slower growth will mean less resources are consumed, but also that less resources will be given over to the environment, as it is seen as a luxury item.
8. The worsening economic crisis will impact on travel and tourism. It will be one of the first things to go off the list of essentials, and those that travel will spend less.
There is talk that this current downturn could be worse than 9/11 or SARs.
"Business travel consultant Tony Pilcher, of Pilcher Associates, added: "This [downturn] is going to have much more of a domino effect. I think it's going to be longer and deeper."
Travel management company Horncastle Executive Travel managing director Peter Drummond agreed: "We have never experienced anything like this before."
Businesses will be forced to make cutbacks, downgrade their travel plans and look at whether their business trips were necessary, they added."
I came across this piece of advice to the travel industry:
Think spiritually. When times are tough many people turn to some form of spirituality. Spiritual tourism tends to boom during difficult political or economic times. While many houses of worship may be the foundation for spiritual tourism, spiritual tourism is much more than merely visiting a church or synagogue. Think beyond your houses of worship to the underlying sense of spirit within your community. This may be the time to encourage people to visit cemeteries where loved ones are buried, or develop inspirational trails. Places where historical events may also become part of your spiritual tourism offering.
Finally, this bit of wisdom and insight from history:
In his famed MEMOIRS OF EXTRAORDINARY POPULAR DELUSIONS AND THE MADNESS OF CROWDS, 19th century historian Charles Mackay chronicled numerous economic disasters caused by irrational human behavior, including the tulip mania in 17th century Holland. Mackay wrote:
"In reading the history of nations, we find that, like individuals, they have their whims and their peculiarities; their seasons of excitement and recklessness, when they care not what they do. We find that whole communities suddenly fix their minds upon one object, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first. ... Money, again, has often been a cause of the delusion of multitudes. Sober nations have all at once become desperate gamblers, and risked almost their existence upon the turn of a piece of paper... Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one."