A Tale of 3 Cities

A Tale of 3 Cities

As travel consultants, we weigh, prevent, and react to risks on our clients’ behalf every day.

Some events—for example, the 2010 Eyjafjallajökull ash plume that grounded air travel in Europe for weeks—are completely unpredictable and all we can do is react. Others, like last year’s Hurricane Sandy, give some notice and require a more proactive approach; FROSCH rescheduled, rerouted, and re-accommodated more than four hundred travelers during the run-up to the storm. In other situations, it’s harder to assess the risk and how to react. What happens when it’s political and social unrest that disrupt our clients’ travel plans?

We decided to investigate three of the world’s foremost destinations—Cairo, Rio de Janeiro, and Istanbul—and the unrest that has marked their recent history. Do these events put these destinations out of reach for American travelers?CAIRO, EGYPT
At this time, in Cairo’s case, the answer may be yes—temporarily. On July 3, 2013, the U.S. State Department issued a formal warning to American citizens “to defer travel to Egypt and … to depart at this time because of the continuing political and social unrest.” After a two-year cool-down period that followed the 2011 Arab Spring, Egyptians once again filled the streets in protest for and against ousted President Mohamed Morsi. The protests erupted into a full-blown military coup, prompting the U.S. and several other countries to temporarily close their embassies.

Egypt’s visitor numbers declined by some 37% to reach close to 9 million compared to over 14 million in 2010.

-Euromonitor International

Egypt’s tourism and international business sectors have certainly felt the sting of these events. As the revolution commanded headlines in 2011, all but the most fearless travelers stayed away; visitor numbers plummeted by more than a third. Hotels, car rental agencies, airlines, and tourist attractions all took a hit. In 2010, the travel and tourism industry brought in USD 14.1 billion. In 2011, that number fell to just USD 9.5 billion.

Despite the erratic security situation over the past two years, tour operators and travelers have been eager to go back to Egypt. David Marek, president of Ker & Downey (a FROSCH preferred tour operator) took a family vacation to Egypt last March. “This was one of my family’s top 3 vacations,” he says, “partly because of the lack of tourists. For instance, a normal visit to the Cairo Museum will result in full-on elbow jostling lines of people crowding down the halls. Our visit took on the atmosphere of a private viewing, whereby we could linger at any site we desired; we were truly the only people in the museum. On the Nile, the normal 300 ship flotilla of cruise boats was down to just a dozen—and those were operating at 20% capacity. Personally, I still would not hesitate to travel to Egypt as I have confidence in our partners on the ground.”

For travelers worried about the developing situation in Egypt, Mr. Marek offers a solution: “I’d suggest they fly into Cairo and then head straight for Luxor. The troubles in Egypt center around Cairo, so getting on the Nile should be a good option.”

Tour operators are hoping that things will quiet down at long last. Slashed prices for hotels and tours, not to mention the appeal of visiting the sites without tourist crowds, are tempting travelers back to the region. We fully expect Egyptian tourism to get back on its feet and that this segment of its economy will help contribute to this country’s long-term stability.

Rio has a couple of big years ahead. As the host city for the 2014 FIFA World Cup and 2016 Summer Olympics, it’s poised to welcome a huge influx of visitors. Rio is already the top destination in South America—attracting 2.82 million international tourists a year—so it seems a sound investment for the city to spruce up its tourism infrastructure with new hotels, athletic venues, green space, and other attractions.

Other preparation measures in the Cidade Maravilhosa include a crackdown on crime, a project called “pacification” which aims to reduce violence and drug trafficking in the favelas. In the five years since the project began, violence has steadily decreased.

In the state of Rio de Janeiro, homicides have fallen to the lowest level since 1991, an indicator of the growing success of Brazil’s ‘pacification’ project.

-InSight Crime

So when protesters took to the streets last June against a bus fare increase, it was a setback for the city’s public image. It soon became clear that it was about more than just the price of a bus ticket. Brazilians expressed their opposition to steadily increasing taxes and the cost of living associated with their country hosting these international sporting events. Critics pointed to cities like Athens, where athletic venues built for the Olympics now sit unused and decaying, soaking up taxpayers’ money while the country undergoes austerity measures in an effort to buoy a flailing economy.

It appears that the protests, despite their scattered messages, have accomplished something: Brazilian President Dilma Rousseff not only nixed the proposed bus fare increase, but also made a commitment to address the protesters’ other concerns.

Despite the unrest, traveler interest in Rio seems not to have waned. “My team is working on requests for packages for the World Cup, and we have already received some inquiries for Olympic travel as well,” says Ralph Cooper, SVP of Leisure Sales for FROSCH. “People are aware of the situation, but confident that the chance to attend these events in such a vibrant city is worth it. If you stay in the right hotel and have an experienced travel consultant a phone call away, it will be a fantastic vacation.”

Like Rio and the demonstrations that started as a protest against bus fares and soon grew to encompass other social issues, the recent demonstrations in Istanbul started in defense of a small public park, one of the city’s few remaining green spaces. But overnight, crowds grew and violence broke out, and it became clear that there were more elements at play. Issues ranging from police brutality and freedom of speech, to human rights and environmental concerns were the fuel that fed the passions of the protesters.

Soon, the protests transformed into the keeping of a silent vigil, known as “duranadam,” or “standing man.” By simply standing quietly in Taksim Square, protesters registered their presence and point of view, a stark protest to the week of upheaval that came before. This quick transition to peaceful protest has given a hopeful outlook for the city’s future.

At this point, visitors are largely unfazed by the turn of events in June, and the country’s $20 billion tourism industry continues to thrive. Indeed, Istanbul is a key airport hub, to the extent that a third international airport is under construction and is projected to become the largest airport in the world. The city is also an elemental port of call for Mediterranean cruises; 40% of Americans who visited Turkey last year did so by stepping off a cruise ship.

Turkey’s capital city could see 10.37 million tourists who will spend $8.6 billion in 2013.

-Business Insider

The international hotel industry appears to have faith in Istanbul’s promising future. Marriott, Fairmont, Starwood, and Club Med are among those investing in new builds and refurbishment projects, bringing Istanbul’s bed capacity to 100,000.

All this is good news for the Olympic Committee, which is eyeing Istanbul as one of three candidates to host the 2020 Summer Olympics (up against Madrid and Tokyo). Proponents say that hosting the Olympics is a good opportunity to invest in the infrastructure and civic features that will benefit citizens and bring in tourism money over the long run. 83% of Istanbul residents support bringing the Olympics to their city. However, if Istanbul residents start to see the Olympic presence in their city the same way that those in Rio do, there’s danger that tensions could arise once more.

At FROSCH, we monitor world events through a daily Travel Bulletin, produced in cooperation with a global team of GSM partners. We use this Bulletin to measure risk for trip planning and to notify potentially affected travelers about issues at their destination, from weather alerts and airline strikes to street protests and special events that may affect travel.

A comprehensive travel insurance policy is crucial for any trip, but more so when traveling to a destination that has been in the headlines. A Travel Delay or Cancel Anytime policy can protect your vacation funds if your trip is interrupted, or if you simply don’t feel comfortable traveling due to recent news.

Brad Gray, Director of Retail Channel Management at Allianz Global Assistance USA, FROSCH’s preferred travel insurance provider, recounted how Allianz customers were helped during Egypt’s revolution. “Helping customers who are impacted by major global events like the civil unrest in the Middle East and other countries is our top priority. As soon as we learned of the events unfolding in Cairo in January, 2011, our Travel Assistance Department began contacting the 195 customers who were scheduled to be in Egypt,” said Gray. The Allianz team worked to determine who was safe and who needed help getting home after being evacuated to far-flung places like Greece and Cyprus.

Gray reported: “All of the customers we reached were happy that we called and a few were surprised. They didn’t expect that from an insurance company. A few cried when recounting the situation they faced in Egypt. They were glad we were there for them and told us how much that meant to them.”

If you are caught in the midst of an uprising while overseas, it’s best to approach the situation with a good measure of common sense: stay in your hotel, contact your guide and travel advisor, and monitor local media to determine your next plan of action.

  • Avoid demonstrations and large gatherings.
  • Monitor local news for updates.
  • Enroll in the State Department’s Smart Traveler Enrollment Program for information and so the U.S. Consulate can communicate with you in case of emergency.
  • Leave a copy of your important documents and trip itinerary with a trusted friend (or travel advisor) back home.
  • Buy travel insurance.
  • Use hotel transportation rather than hailing a cab.
  • Ask your tour guide or hotel concierge about how to avoid unsafe parts of town.
  • Dress modestly and with respect toward the local customs.

It’s with this in mind that the true benefits of working with an experienced travel consultant emerge. Through our knowledge of the area and our contacts on the ground in these destinations, we assess the true situation—beyond the media hype—to determine whether operations are proceeding as normal. What’s our ultimate goal? To keep our travelers happy, safe, and excited to book another trip as soon as this one’s over!