CASE STUDY: "SEPTEMBER 11" TERRORIST ATTACK

Terrorists struck the United States on September 11, 2001 with a suicide attack that involved the
hijacking of fully fuelled passenger jets as flying bombs. Both towers of the World Trade Centre in New
York and part of the Pentagon building in Washington DC collapsed after hijacked aircraft crashed into
them. A large aircraft also crashed in western Pennsylvania.

The following security measures were taken as response after the attack:

• All government buildings in the country were evacuated, including the White House and Congress.

• Lower Manhattan was evacuated and the National Guard brought in.

• All commercial flights to and from the US were suspended until noon on September 12.

• Air force fighters were ordered to attack any suspicious aircraft flying in US airspace.

• Seven US warships sailed towards New York, two aircraft-carriers to help in rescue efforts.

The impact was huge around the world, across the United States and particularly in New York City.
Numerous investment firms housed in the World Trade Centre lost hundreds of employees; stock
exchanges all over the world plummeted; travel and entertainment stocks fell, online travel agencies
particularly suffered, as they cater to leisure travel. Similarly, share price of airlines and airplane
manufacturers plummeted after the attacks. Several airlines were threatened with bankruptcy. Tens of
thousands of layoffs were announced in the following week. Tourism in New York City declined
precipitously, causing massive losses in a sector, which employed 280,000 people and generated $25
billion per year. In the week following the attack, hotel occupancy fell to below 40 percent, and 3000
employees were laid off. Tourism and hotel occupancy also fell drastically across the nation.

Due to the terrorist attack in 2001, global international arrivals declined by 0.6 per cent, the first year of
negative growth for international tourism since 1982. According to the World Tourism Organization
tourism recovery and development may follow characteristics below:

• There was a contraction in international tourism caused by a decline in long-haul flows. This contraction
seems to be easing gradually as the months pass.

• The recovery in terms of number of trips was not associated with a proportionate increase in revenues.
Corporate earnings grew at a slower rate.

• Prices played a key role in purchase decisions.

• Delays in bookings and last-minute purchases were common.

• There was a clear trend towards an active policy of alliances, mergers and acquisitions as a way to
reduce costs and ensure positive results.

• Travellers stayed for a shorter period of time but required more customised products.

• Cooperation between governments and the public and the private sector was enhanced due to the
necessity of finding solutions to the crisis.