Friday 30 September 2011

Statistics and linear thinking.

In a recent issue of New Scientist, I found this great quote, attributed to Aaron Levenstein.

"Statistics are rather like bikinis: what they reveal is suggestive, but what they conceal is vital."

Consider the latest press release from IATA, which reports that the aviation industry expects an increase of 800 million more passengers by 2014 compared to 2009. This is a staggering improvement from 2.5 billion to 3.3 billion.

Peek a bit closer and you may see more.

Isn't 2009 a bad choice as a base year, because air travel fell by 15%?
So a predicted growth of 32% over five years reduces to 12%.

And of the total 3.3 billion, 2.0 billion will be domestic travel. So lets ignore predicted domestic growth in China and India and concentrate on International travelers by air.

IATA forecast a growth in international passenger traffic to China of 10.8% presumably on an annualised basis, to the UAE of 10.2%, Vietnam by 10.2 % and so on.

Nels Bohr, the Danish physicist said it best: "Prediction is difficult, particularly when it applies to the future ".

Was the IATA consensus arrived at before the extent of the jasmine revolution was understood and before concerns about inflation were expressed in China and India?

One of the reasons given to explain the recession was the imbalance between the very rich and the very poor. In 1929 and 2009, in western nations, the range was 128 to 1, leading to conspicuous consumption and speculative high yield gambles.
The stage is now set for revolution and they will be bloody.

Tourism to Egypt and other Arab countries are already badly affected and Dubai will suffer too.

John Maynard Keynes warned of the dangers of linear trend forecasts. Markets are never perfect because information is rarely complete, because people are not always rational and there are sometimes obstacles to action.

There is always "Irreducible uncertainty".

Monday 26 September 2011

The cost of failure

David Tebutt's murder and the kidnap of his wife provoked outrage from the establishment and fear from potential western tourists.

Wealth does not guarantee safety. Indeed it provokes envy and motivation for the Somali pirates for whom this is a lucrative business.

Their hunting ground covers wide stretches of the Indian Ocean, as far south as the Seychelles and now even the pleasure beaches of Kenya are now within reach of the speedboats they use.

Kenya's tourism Minister said: "We strongly condemn this senseless act of violence on innocent visitors to our country."

It obviously made a lot of sense to the pirates.

The managing director of the tourist board, after promising justice and apprehension of the criminals went on to say:
"We further wish to reassure the travel trade that the safety of our tourists is paramount and the Government has proper machinery in place to ensure high level security of our tourists".
So what went wrong this time and what positive new steps have been taken to prevent a re-occurrence?

This and other recent calamities, natural and unnatural, accidental or deliberate make the case for every tourist office to have a Crisis management programme in place. One that is carefully thought through, researched and rehearsed.
Crisis management is not about being in a crisis. It involves:

* A continuous process of risk assessment and being proactive about dangers we face.

* Professional management involving timely and effective communication through the key media channels by the right people.

This means having a semi-permanent team in place, determining who will be in charge, who will be the spokes-person and who will monitor media reporting and response. The plan will identify both the internal team and those in each tourist providing country as well as the key media contacts.

Regular updates of risk and how you will respond needs to be planned and rehearsed, so if tragedy occurs, the tourist office responds with sympathy and positive action.

As the old adage says: ‘Fail to prepare, prepare to fail’.