International Tourist Arrival in India
| DOI | 10.1177/0015732516681882 |
| Published date | 01 February 2018 |
| Date | 01 February 2018 |
| Subject Matter | Articles |
International Tourist
Arrival in India:
Impact of Mumbai 26/11
Terror Attack
Sangeetha Gunasekar1
Rojalin Patri1
Badri Narayanan2
Abstract
India experienced terror attack on its financial and entertainment capital
Mumbai on 26 November 2008. There were 12 coordinated shooting and
bombing attacks which lasted four days, killing 164 and injuring several hundred
(Press Information Bureau, 2008, HM announces measured to enhance security,
New Delhi: Ministry of Home Affairs, GOI.). The attack was largely targeted
towards international tourists visiting Mumbai at the hotels like Oberoi Trident,
The Taj Mahal Palace and Tower and Leopard Café. The objective of this article
is to study the impact of the 26/11 terror attack on the arrival of interna-
tional tourists in India. Very few studies in the literature have examined the
impact of terrorist attacks on the tourism industry. (For more recent work see
Arana & Leon, 2008, Annals of Tourism Research, 35, 299–315; Raza & Jawaid, 2013 ,
Economic Modelling, 33, 65–70.) Our article tries to add evidence to this grow ing
literature. Further in analyzing tourist demand, several researchers (see Song
et al., 2012 for a review) have studied the relationship between tourism and
economic growth. While studies have found unidirectional relationship between
international tourism and economic growth (e.g., Balaguer & Cantavella-Jorda,
2002; Oh, 2005), there are others who find evidence supporting bidirectional
relationship (e.g., Dritsakis, 2004; Kim & Chen, 2006, Tourism Management,
27, 925–933). In our study, we assume a bidirectional relationship between
foreign tourists arriving in India and its economic condition. In the present
study, we analyze the impact of 26/11 terror attack at Mumbai on the interna-
tional tourist arrival in India. The analysis is done using the vector autoregres-
sion (VAR) model, where the foreign tourists arriving in India is a function of
Foreign Trade Review
53(1) 12–28
2018 Indian Institute of
Foreign Trade
SAGE Publications
sagepub.in/home.nav
DOI: 10.1177/0015732516681882
http://ftr.sagepub.com
Corresponding author:
Sangeetha Gunasekar, School of Business, Amrita University, Coimbatore, India.
E-mail: sangeetha1000@gmail.com
1 School of Business, Amrita University, Coimbatore, India.
2 University of Washington–Seattle, Purdue University and McKinsey Global Institute, USA.
Article
Gunasekar et al. 13
economic condition prevailing in the country, captured here by real gross
domestic product of India and the terror attack dummy variable. Our results
indicate that post 26/11 there has been a significant decline in the number of
foreign tourists arriving in India. We further analyze the disaggregated airport
level data, where similar significant negative impact were found for Mumbai
and Delhi airports.
JEL: L83, Z32, Z38
Keywords
Tourism, terrorism, 26/11 attack, Mumbai attack, India
Introduction
India experienced a terrorist attack on its financial and entertainment capital Mumbai
on 26 November 2008. There were 12 coordinated shooting and bombing attacks
which lasted four days, killing 164 and injuring several hundred (Press Information
Bureau, 2008). The attack was largely targeted towards international tourists visit-
ing Mumbai at the hotels like Oberoi Trident, The Taj Mahal Palace and Tower
and Leopard Café. The objective of this article is to study the impact of the 26/11
terror attack on the arrival of international tourists in India.
Scanning the literature, we find several studies that have found the terrorist
attack to have a negative impact on demand for tourism, airline services and
hospitality among others. Arana and Leon (2008); Drakos and Kutan (2003);
Ender and Sandler (1991); Enders, Sandler and Parise (1992); Goodrich
(2002); Krakover (2005); Pizam (1999); Pizam and Fleischer (2002); Raza
and Jawaid (2013) and Yechiam, Barron and Erev (2005) are among those
studies that have analyzed the impact of terror event on different industries
and the economy as a whole.
Studies by Ender and Sandler (1991) and Enders et al. (1992) are the earliest
ones to have set the foothold at the sparse evidence on impact of terror attacks on
demand for tourism, airline services and hospitality. The study concludes that
terrorism has a negative impact on tourism revenues in Spain and other European
countries and substitute tourist’s preference for a destination with competing
ones. Furthermore, studies by Pizam and Fleischer (2002) prove that the impact of
frequency of terror events on demand for tourism is more than severity.
Goodrich (2002) while studying the impact of 11 September 2001 US attack on
US travel industry has quantified the impact in terms of loss incurred to the airline
industry. It finds that the US airline industry incurred a loss of sales revenue of
around 100 million during the period because of the large cancellation of book-
ings by airline passengers. This, as argued, led to large proposed layoffs in airline
employees like 20,000 pilots in both American Airlines and United Airlines,
13,000 in Continental Airlines, 10,000 in Northwest Airlines, 13,000 in Delta
Airlines and 16,000 layoffs in LSG Sky Chefs (LSG Lufthansa Service Holding
AG) support service to name a few.
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