What are the impacts of the economic crisis on Tourism?TOURISM

All the goods and services people use and buy can be ordered according to how essential these are for them. Basic necessities of life like food, clothing and shelter are some of the most essential requirements in life, while luxuries like decorating the wall in your house with a $100,000 dollar original painting by a master is a luxury.

People in times of economic crisis, when their current income as well as future prospect of good income takes a beating, people try to reduce their expenses by cutting down expenses that are at the top end of non essential items. In this way economic crises affects demand of non-essential goods more than that of essential products.

Tourism is definitely not a necessity of life like food. At the same time it is not near the top of the scale of non essential goods. Still it is fairly high on the side of non-essential goods. People can do without taking a holiday for some time without suffering very much. Also people can reduce the expenses on tourist activities by taking less holiday, taking holidays of shorter duration, and by visiting nearby place rather than distant locations. In this way economic downturn is likely to reduce substantially the tourism activity. Particularly tourism to distant locations, like to overseas destinations, and places which are costly for tourists is likely to experiences heavy reduction in demand.