Geopolitics: Trends contributing to Geopolitical tensions

Geopolitical Trends Impacting the Hotel Industry

Geopolitics refers to the influence of factors such as geography, economics, demographics and culture in the politics of a state. Pandemics, trade wars, nuclear weapons, land disputes, cyber-attacks, military tensions, domestic disputes and migration are all trends that can contribute to a geopolitical crisis, jeopardising the travel and tourism sector along the way. The world however is consistently changing which may accentuate other trends that will cause conflict in the near future.

Listed below are the key trends contributing to geopolitical tensions, as identified by GlobalData.

COVID-19

COVID-19 has had a significant impact on the travel and tourism sector and international travel across 2020 has been decimated. 10.8 million cases have now been confirmed across 188 countries/regions with 521,298 deaths according to the latest from John Hopkins’ University database.

The impact of COVID-19 caused the lockdowns worldwide and in May 2020, the UNWTO highlighted that 100% of destinations held restrictions on travel whilst 72% completely closed their borders to international tourism. COVID-19 is undoubtedly one of the largest scale events to affect the global travel sector.

Whilst the threat of a global recession looms, this pandemic will also create and accelerate geopolitical tensions that already existed. Airlines worldwide are begging for national policies to be based on scientific fact rather than politicised in order to service and for services to resume to a ‘somewhat normal’ level.

Trade wars

A trade war can act as a stimulus for further tensions affecting the bilateral relations between two destinations and thus the tourism development. Since the trade war began between China and the US in 2017, inbound arrivals from China to the US dipped by -11.2% (2017-2019). Chinese tourist spending in North America also declined by 6% to US$7.9bn in 2019

Nuclear weapons

The United Nations highlights nuclear weapons as the most dangerous weapons on earth. Nuclear weapons have only been used twice during warfare – in the bombings of Hiroshima and Nagasaki in Japan 1945, World War Two.

These weapons of mass destruction have been a driver of conflict between countries. Nine countries currently have nuclear weapons including: US, UK, Russia, France, China, India, Pakistan, Israel and North Korea and geopolitical tensions between these nuclear armed states pose a threat. Tensions with Iran have recently increased due to disputes surrounding its nuclear program.

Land disputes

The Palestine conflict can be used as a prime example here of major conflict arising over land disputes. This is one of the world’s longest running conflicts beginning in the early 20th century and still continues today. Russia’s annexation of Crimea in 2014 is also a prime example here where tourism between the two states has been dramatically affected.

Cyber-attacks

Cyberattacks within the travel and tourism industry have become more common as dealing with vast amounts of personal data, travel companies including airlines, agents, operators, cruises, etc. are key targets for attackers. Most recently, easyJet, the UK based LCC was hacked by a ‘highly sophisticated’ breach stealing the details of over 9 million customers.

Tensions between the US and Iran continue to escalate and during 2019, Iran cyberattacks on American entities doubled during the year according to Lotem Finkelstein, head of cyber threat intelligence at Checkpoint, an Israeli cybersecurity company. Australia’s government has also noted an uptick of ongoing sophisticated state-based cyber hacks.

Cyberattacks have the ability to cause considerable reputational and relational damage between governments, companies and consumers.

Military tensions

Whilst this has currently fallen out of favour as countries are now looking to soft power to help adjust a destination image, as geopolitical tensions escalate, military expenditure has risen to US$1.917 trillion in 2019, YOY growth of 3.6% according to the Stockholm International Peace Research Institute.

China and the US were the world’s heaviest military spenders. Both are hegemonic – the superpowers driving the world’s economic growth but alongside comes a notable desire for power and domination.

Domestic disputes

Sharpening tensions amongst governmental bodies, military and citizens have the possibility of causing mass divides between a population. The military coup in Turkey 2016 occurred when a part of the Turkish military attempted to overthrow the government under Recep Tayyip Erdogan. Local citizens were expected to join in with the military coup however, citizens ended up backing president Erdogan to stay in power. This major event caused international tourism to Turkey to decline by 28.5% in 2016.

Migration

Migration affects both inbound and outbound flows from a destination, and has considerably been the cause of disputes. This is not entirely dependent on migrant behaviour within a destination but can relate to a government’s inability to control security and alter measures according to the situation.

Mexico remains a major inbound source market for the US but during 2016 to 2017, inbound tourism flows decreased by -6.1% likely due to perceived hostility towards Mexican travellers. Trump also tightened migration policies related to several Muslim majority countries in 2017 including Yemen, Syria, Iran, Libya and Somalia causing widespread disagreement and negativity surrounding US migration policies.

Global social media coverage

Disinformation has spread across social media platforms and contributed to geopolitical clashes such as Russia’s interference in the 2016 presidential election and has deepened the tensions across US politics. The latest can look to the fight backs and ‘Twitter wars’ between Donald Trump and both Joe Biden and Andrew Cuomo.

With billions having access to platforms such as Instagram, Twitter, Facebook, TikTok, etc., has not only heightened connectivity between tourists but also advanced global exposure to conflicts.

This is an edited extract from the Geopolitics and its Impact on Tourism – Thematic Research report produced by GlobalData Thematic Research.