Tourism Sector: Sector Research Perspective

The year of 2008 saw the oil prices soaring to new highs and touching about 150 USD per barrel (about 40% higher than the average price in 2007). Speculator spread rumors that it could also touch 200 USD per barrel. However by Feb 2009, it stabilized in the region of about 45 USD per barrel. One of the sectors that was worst hit by these fluctuating prices was the tourism industry.




Domino Effect:

The economic downturn is also expected to have a severe impact on the business travel which according to the World Tourism Organisation (UNWTO) accounts for about 15% of the passenger arrivals worldwide.

The tourism sector had borne the major brunt of the aftermath of 9/11 attacks which saw even some national flag carriers such as Sabena and Swissair collapsing. In India some of the major airlines such as Kingfisher and Jet-Airways allegedly defaulted on some of their payments and even entered a mutual agreement which raised the eyebrows of the regulators responsible for protecting consumers from monopolies.

Sector Research: Analysis of the Domino Effect

Financial analysts have spent sleepless nights trying to analyze the impact of such cascading effects where the performance of one sector can cause havoc on the results of another sector. Employees of KPOs have spent sleepless nights trying to evaluate the impact of such variations in prices and agreements between organizations on the financial health of the funds administered by them.

The current crisis has shown that sector research is a non trivial task as it involves the a detailed impact analysis of financial health of one sector on the financial health of the other. Such domino effects can have hair raising consequences if not analyzed correctly.