Some regions of the world are experiencing wars and conflict, which have caused serious problems in supply chain management.

For example, countries that import significant amounts of goods from Ukraine and/or Russia are highly affected by the war between those two countries. Over 50% of the domestic consumption of many African countries is supported by grains imported from Ukraine and Russia, and due to their lack of purchasing power, these countries cannot turn to higher-cost resources, resulting in grain shortages in Africa.

Travel is also impacted by ongoing conflicts, such as the conflict between Israel and Palestine, which has resulted in flight cancellations for a long time and increased economic uncertainty. A new tab from Marriott International revealed that demand had softened and some cancellations had been reported at its 27 hotels in Lebanon, Jordan, and Egypt. Ticket bookings have dropped 26% from the previous year to Egypt, 49% to Jordan, and 74% to Lebanon due to the war, according to ForwardKeys, a flight ticket data company based in Valencia, Spain. Travel agency Essentialist reported canceling 75% of trips to the extended Middle East and Northeast Africa.

In addition to wars and conflicts, terrorist attacks can have a sobering impact on hospitality and tourism businesses, and they pose a major problem in some regions. For example, during the last two decades, numerous cases of international terrorism have occurred, some of which were specifically targeted at tourists or attempted to disrupt their travels.

Saebra and her colleagues (2020) refer to several locations where terrorist attacks took place: New York, United States (2001); Madrid and Barcelona, Spain (2004, 2017); London and Manchester, United Kingdom (2005, 2017); Tuusula, Finland (2007); Apeldoorn, Netherlands (2009); Utoya, Norway (2011); Paris and Nice, France (2015, 2016 2017, 2017); Brussels, Belgium (2016); Sousse, Tunisia (2015); Berlin, Germany (2016); Istanbul, Turkey (2016, 2017); Christchurch, New Zealand (2019), and Colombo, Sri Lanka (2019). These attacks and other security concerns such as crime and corruption hurt tourist perceptions of a destination and therefore reduce tourist revenues.

Our industry is also deeply wounded by natural disasters, which lead to economic hardship. Key stakeholders include hotels, restaurants, tour operators, transportation services, and souvenir shops, all of which suffer huge losses. As a result of a decline in arrivals and widespread cancellations, revenue is hemorrhaging, and pushing businesses to the brink of closure, in some cases permanently. Natural disasters negatively affect not only the overall hospitality and tourism industry but also the people employed in this industry. In particular, people in low-skilled or informal jobs experience job losses, income reduction, and displacement as a result of natural disasters.

In 2023 in the United States alone, 28 weather-related and climate-related disasters cost at least $1 billion each, making 2023 the year with the highest recorded number of natural disasters. This catastrophic year resulted in at least 492 deaths, the eighth-highest number of disaster-related fatalities in US history since 1980. Natural disasters also caused significant damage regionally in the United States. For example, Hurricane Ian greatly affected tourism in Florida.

According to tourism reports from the Lee County Visitor & Convention Bureau, 2.1 million visitors visited Lee County between October 2022 and July 2023, leaving an economic impact of about 3.7 billion. The number of visitors decreased by 46% compared to the previous season, with 3.91 million visitors and an economic impact of $5.7 billion. The trend has been continuing in recent years; in 2018, Munich Re NatCatSERVICE recorded 850 events in Europe, ranking Europe as the third most affected continent (14%). Floods and landslides accounted for 46% of all reported events, followed by storms (42%), extreme weather and wildfires (7%), and earthquakes, tsunamis, and volcanic eruptions (5%). Unfortunately, these numbers indicate a long-term trend toward more frequent storms and floods. In 2023 it was calculated that the global economy lost $312 billion due to natural disasters.

Similarly, when the Australian bushfires spread in New South Wales and Victoria in 2019 and 2020, news outlets around the globe portrayed the fires as disasters, resulting in many international visitors canceling their trips. The fires affected an area the size of Wisconsin and occurred just a few months before the pandemic halted international tourism. In January 2020, Forbes reported that over 60% of reservations to even fire-free areas were canceled, resulting in a total loss of 4.5 billion dollars in tourism revenue. Australia could not reopen to international visitors until February 2022, leading to three years of drastically reduced visitor numbers.

Natural disasters continue to occur regularly, which puts the tourism industry in a difficult position, as it also faces economic difficulties and inflation in many countries. While the public, the media, and politicians expect 100% security, this expectation is not often realistic. Because of these tourism and travel safety issues, the public may feel intimidated and decide not to travel to a certain area due to their concerns.

The final risk is food shortages, often due to famine and drought. Acute food insecurity was estimated to affect 238 million people in 48 countries in 2023, up 10% from the previous year, according to the Food Security Information Network. In addition, domestic food price inflation remains high in many parts of the world. Global Drought Snapshot 2023 : The Need for Proactive Action estimates that 1.84 billion people worldwide, almost a quarter of humanity, will experience drought in 2022 and 2023, according to the United Nations Convention to Combat Desertification (UNCCD). There have been three official global food crises in the last 50 years, each of which has revealed unique causes at multiple scales within the global industrial food system.

As drought is felt intensely in a majority of low- and middle-income countries, it operates silently and often goes unnoticed by the world at large, failing to prompt immediate social or political responses. Then we can ask how famine and drought can impact hospitality and tourism businesses. As of now, there are very few studies on this topic. While we know, for example, that scarcity of food and water can lead to increases in the prices of accommodation, food, and beverages, more research is needed to fully evaluate the impact of lack of food and water on hospitality and tourism businesses. It is especially important to ask if destinations have resilience plans in place to address these issues predicted by experts.

Increased vulnerability can have profound implications for food and security crises, as well as for the world's most marginalized populations. Although the current disruptions in production and distribution provide insight into the need for adaptation and transformation in existing food and security systems, not much information is available about the degree of vulnerability of the hospitality and tourism industry. Regarding tourism activities, drought can adversely affect snow sports such as skiing and snowmobiling, as well as activities on rivers and lakes, such as boating, rafting, canoeing, fishing, and swimming, as snowdrifts and stream flows will decrease.

The National Integrated Drought Information System reports that water is also an essential component of activities such as cycling, hiking, and camping. In times of drought, these activities may have to be shifted or shortened. As a consequence of the degradation of water resources, water quality, stream flow, and snow cover can be reduced. Consequently, these impacts limit outdoor activities, increase the risk of waterborne diseases, and shorten the outdoor recreation and tourism season. In the United States alone, there are 219 ski resorts, 13 national parks, and 887 reservoirs affected by moderate to severe droughts (D1-D4) and a total of 5% of streams report a flow below their average by more than 10%.

The tourism and hospitality industry is also under stress due to global price increases, which are caused by shortages and supply chain disruptions, and inflation is another obvious effect. Ultimately, inflation influences the profitability of hotels by significantly affecting their operational costs. The rising costs of raw materials such as food, beverages, and linen during inflationary periods make maintaining hotel standards more difficult. According to the Bureau of Labor Statistics, hotel prices in the U.S. increased by 1% from May to April 2023 so the current business environment appears to be generally inflationary.

As reported in the December 2023 travel price index (TPI), food and beverage services contributed significantly to US travel and tourism sector inflation in December 2023, increasing by 5.2% over the previous year. Similarly, the inflation rate for restaurants and cafes in European Union member countries increased by 5.9% in December 2023 compared to December 2022.

This industry is on the cusp of exciting changes as we journey into the future. Technology, sustainability, personalization, and strict security measures will continue to redefine industry standards and norms. Exceptional guest experiences will always be at the forefront of the industry. Hospitality and tourism businesses should also be profitable to survive in the long term.

However, our industry will always be affected by wars, security concerns, health, and political crises, as well as food and water shortages and supply chain problems. This brief article addresses these fundamental issues however, do not provide any solutions to respond to these issues. Deep technical analysis and expert groups are necessary to find solutions to these problems. The fact that the hospitality and tourism industry is vulnerable to such threats should encourage managers and owners of hospitality and tourism businesses to consider possible future scenarios.

As part of future planning, managers and owners of hospitality and tourism businesses should constantly evaluate such threats. Therefore, industry professionals and government officials should closely follow these trends and develop proactive strategies. It would be helpful to inform and educate the people who are employed in the hospitality and tourism industry about potential threats to the industry and how such threats can impact their jobs and income.

Reprinted from the Hotel Business Review with permission from http://www.hotelexecutive.com/.