To analyze how the 9-11 terror attacks in 2001 has affected the hospitality industry in the US. The paper will also analyze how the industry has responded to the terror attacks in order to provide solutions for crisis management for similar events in the future. Objectives 1. To critically review the US hospitality industry before and after the 9/11 terror attacks. 2. To identify different opinions on crisis management and the factors that is perceived as the most important in the hospitality industry. 3.
To discuss how the US hospitality industry reacted to the 2001 terror attacks and to identify the process of the post disaster recovery. This will provide solutions for similar events in future. 4. To offer recommendations to the major players in the hospitality industry (restaurants, airline companies, hotels) so that they can be well prepared to organize effective and comprehensive recovery plan after the disaster. Introduction The September 11 terror attacks in 2001 against the US remain one of the most devastating terror attacks in history.
After hijackers crashing two airlines into the world trade center Twin Towers, an estimated 2, 974 people lost their lives. The attacks had great economic impact on the US and the world markets (Stein, 2003). The hospitality industry was not spared either. The hospitality industry in the US felt the impact of the attacks immediately. All the major players in the industry starting from restaurants, hotels, and airline companies were greatly affected by the attacks and the short and long term effects of the attacks continued to be witnessed long after the day of the attacks.
The US Hospitality industry before and after the 9/11 terror attacks Before the September 11 terror attacks on the US, the hospitality industry was very sound economically (Barth, 2001). Based on the industry’s ability before 2001, there were indications that the industry’s profitability was going to increase. As compared to the analysts’ predictions about the growth of the industry, the international lodging and the travel industry profitability exceeded the predictions. The industry was able to secure record corporate profits before the terror attacks.
According to prominent hospitality industry executives, the lodging industry in the US had about 53,500 properties (Campbell, 2002). In addition, the industry had about 4. 1million rooms through out the US. The US tourism sector in 2000 was estimated to provide employment to about 7. 8 million people and also provided direct or indirect employment to one out of every seven Americans. When it came to travel-related salaries, the US tourism sector in 2000 paid about $171. 5 billion and extra huge amounts of financial resources as taxes.
For instance, in 2000, the sector paid an estimated $99 billion as local, federal, or state taxes. Because a large portion of the US Gross Net Product is generated by the hospitality industry, the terror attacks which affected the industry also affected the amount of financial resources the industry contributed to the GNP. The hospitality industry human resources practices were before and after the terror attacks were different. Employers had no reason and opportunity to continuously investigate backgrounds of their employees. However, this changed after the 9/11 attacks.
After the terror attacks, the hospitality industry suffered enormous losses. The profits that had promised to lead to the growth of the industry began to be eroded (Sturman, M. 2002). The travel industry witnessed drastic decline in the number of people willing to travel, especially by air. The consumer confidence was also shaken. The managers and workers in the US hospitality industry acquired another responsibility of comforting and serving panicky and frightened customers. For instance, airline companies had to reassure their customers about their safety if they were to travel by air.
The managers and employees in the industry experienced trauma and shock with some losing their jobs due to the negative effects of the attacks on restaurants, hotels and airline companies (Dolfman and Solidelle, 2004). The industry was forced to manage the changes that came with the change of travel practices. There was drastic decline in revenue and even plummeting occupancy rates were experienced. Business patterns in the industry changed to accommodate changes that were being made to address the crisis.
New security regulations were put into place to tighten security in the industry (Barth, 2002). For instance, the passage of the USA Patriot Act allowed employers to investigate the employees. Furthermore, the Act gave the US government great authority to investigate any potential terrorist threat in the hospitality industry. Though this was seen as an effective way of promoting security in the industry, it has been alleged that the US government and employers use it to invade the privacy of the employees.